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i
X-1530
FEDEPJ\.L RESERVE BOARD ANNOUNCEMENT
FOR THE vJEEK ENDING JANU.tillY 6TH, 1922.
ADMITTED TO THE FEDERAL RESERVE SYSTEM:
Capital
Surplus
Commonwealth Banking & Trust Co.,
Cleveland, Ohio. ·
ijp250 ,000
~100,000
Total
Resources
DISTRICT NO. 4.
BANK
~353,160
CLOSED~
Woodville State Bank,
\~oodville,
Texas.
VOLUNTARY LIQUIDaTION:
Scandinavian-American Bo.nk, Mo.rshfield, Oregon.
2
X-1530
FEDERAL
RESELVI~
BOlillD ANiJOUNC:SLlBNT
FOR Tilli ,/ELK LlJDING J . .UIJUAhY 13, 1922 •
.ADMITTED 'i'O
T~-Jb
L''EI6hll.1 BESERVE SYS'l'Bi'1l:
None admitted.
WI 'l'HDRAW.L.. L:
Kansas Reserve State
Bar~k,
J:'opeka., K::ms&s. ·
Guaranty State Bonk, J:'r oup, Texas.
The .Peoples B3.nk. St • .Paul, M:innesota, has merged
with the Central Metropolitan Bank, St. :Paul, a member
bank.
Merchants St.:1te Bank, Port Arthur, ~'exas, has converted into The Merchants Nat iona.l Bank of Port Arthur.
PERMISSION GRANTl<.:D TO EXERCISE TRUS'r .PO\VERS:
The City National Bank of Binghanton, New York.
The First National Bank of Red 'iifing, Minnes(;ta.
X-1530
F.EDERAL RESERVE. BOARD ANNOUNCEMENT
FOR THE VVEEK ENDING JANUARY 20, 1922.
ADMITTED. 'rO THE FEDERAL RESERVE SYSTEM:
Capital
Surplus
Total
Resources
DISTRICT NO. 6.
Merchants and Planters Bank,
Whitecastle, Loui.siana • .$30,000
.
DISTRICT
$6,000
NO. 7.
The Wayne Co'qnty .State Dank.
Corydon,
l~wa.
75,000
25,000
377,953
lllERGER:
. The Peoples Bank· of St. Paul, Minnesota, has merged
with the Cen:tral .MetMpolitan B~ftk·· of St. Paul.
X-1530
FEDERAL RESERVE BOARD A~ffi0UNC~·~1ENT
}'OR THE V/EEK ElJDil'JG JA.NUARY 27, 1922.
ADMITTED TO THE .l.<'EDER.ii. I\.ES'2:f(VE SYS1'EII:
C.o.pital
Sv.rulus
Total
Resources
w125,0JO
:W25,000
~819,661
25,000
6,000
148 '552
25 ,OO(J
500
110,612
DISTRICT NO. 3.
Columbia County Trust Company,
Bloomsburg, .Pem~syl v.:m.ia
Orrstown Bank,
Orrstown, .Pennsylvania
DISTRICT NO. 9.
Mellette County State Bank;,
White River, South ~~kota
LIQUIDATION:
Bank of Commerce & Tr1; st Comp::tny, :vrercedes, Texas.
The First Territorial B::;.nk,
Lovington, Nev1 Mexico.
CONVERSION:
The Merchants State Bank, Port Arthur, Texas, has converted
into The Merchants National Bank of Port Arthur.
PERlVIlSSlON GRANTED 'I'O EXEHCISE TRUST ?OVJERS:
The
The
The
The
The
The
First National Bank of Ocean City, New Jersey.
Central National Bank of Philadelphia,· Pennsylvania.
Third National Bank of Philadelphia, Pennsylvania.
Citizens' National Bank of .Princeton, Illinois.
{)ecurity National Bank of Sheboygan, Wisconsin.
First National Bank of Guthrie, Oklahoma.
X-1520
FEDERAL RESERVE BOARD ANHOUNCEMENT
FOR THE VJEEK ENDING FEBRUARY 3D, 1922.
AUUTTED TO THE FEDE:?..AL RESERVE SYSTEM:
Capt tal
SUrplus
Total
Resources
$125,000
$80,000
$1,105,149
50,000
110,000
485,025
DISTRICT NO. 3.
Lemoyne Trust Company,
Lemoyne, Fennsylvania
DISTRICT NO. 6.
Macon County Bank,
· Tuskegee, Alabama
6
X-1530
FEDEBAL BESER VB BOARD ANNOUNCEMENT
FOR THE WEEK ENDING FEBRUARY 10, 1922.
Aa1ITTED TO THE FEDEP.AL RESERVE SYSTEM:
Capital
SUrplus
Total
Resources
DISTRICT NO. 6.
Polk County Trust Company,
Lakeland, Florida
$&>0,000
$438' 119
WITHDRAWAL:
The
Hills~ro
State Bank,
Hillsboro,
Indiana.
CONVERTED INTO NATIONAL B.A!IKS:
City Trust & Savings Bank, Grand Rapids, Michigan.
First State Bank, Locust Grove, Oklahoma.
LIQUIDATION:
Bellevue Bank & Trust Company, Bellevue, Idaho.
The Hudson County National Bank of Jersey City, New Jersey.
The.National Exchange Bank of Carthage, New York.
The First National Bank of Holly Hill, South Carolina.
The First National Bank of Barnesville, Georgia.
The First National Bank of Gulfport, Mississippi.
The Galesburg National Bank, Galesburg, Il,linois. ·
The First National Bank of Colfax, Iowa.
The National Bank of Benld, Benld, IlHnois.
The American National Bank of Mount Carmel, Illinois.
The Merchants' National Bank of South Bend, Indiana.
•
X-1530
l<"'EDERAL RESERVE BOMD .A.NNOUNCEivlEl'JT
FOR THE ,{ELK EJ.'WING FEBHU.IRY 17, 1922,
ADUITTED TO THG' FEDERaL RGJBHVE SYSTEM:
Capital
Surplus
Total
Resources
~100,000
~;25,000
:;,125,000
200 ,ooo
40,000
2,026,284
500,000
250,000
2,097,207
Southern Co~nercial & Savings Bank,
St. Louis, Mo.
200,000
50,000
2,7~5,536
DISTRICT NO. 2.
.. J.
Overpeck Trust Comptmy,
Ridgefield ?ark, 1:'
Globe Exchange Bank,
Brooklyn, N. Y.
Iadwood Trt~st Company,
Brooklyn, N. Y.
CONVERSION:
The State BLmk of Enumclaw, Enumclav.;, Nashingtl')n, has converted into The First National Bank of Enumclaw.
VOLUNTARY
The Rideout Bank.
LIQUID~~TION;
Marysville,
California.
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
The American National Bank of West Ealm Beach, Florida.
B
X-1520
FEDEBAL RESERVE BOARD ANNOUNCEMENT
FOR THE WEEK ENDING FEBRUARY 24,1922
ADMITTED TO THE FEDERAL RESERVE SYSTEM:
Capital
surplus
Total
Resources
DISTRICT NO. 3.
Peoples Savings & Dime Bank,
. Scranton, l?ennsylvania
$700 ,uoo
~450
,000
$1.2,813,148
100,000
50,000
650,215
First State Bank of Bedias,
Bedias, Texas
25,000
5,000
103,417
lola State :Sank,
lola, Texas
25,000
5,000
104,626
DISTRICT NO.
e.
Montgomery County Loan &
Trust Co.,Hillsboro,lll.
DISTRICT NO. ll.
PERMISBION GRANTED TO EXERCISE T.RUST POWERS:
Mercantile National Bank in New York, New York, N. Y.
The First National Bank of Elwood, Elwood, Indiana.
The American National Bank of Racine, Racine, Wisconsin.
9
X-15:30
F~DERAL
RESERVE BOARD AN1WUNCEiv.IENT
FOR THE WEEK ENDING MARCH 3, 1922.
ADMITTED TO THE FEDERaL RESERVE SYSTEM:
Capital
Surplus
Total
Resources
~25,000
$6,500
~215,450
100,000
100,000
2,731,029
DISTRICT NO. 5.
The Forest Hill State Bank,
Forest Hill, Maryland
DISTRICT NO. 9.
Daly Bank & Trust Company,
Anaconda, Montana
CONVERT.BD INTO Nb.TlONAL B.<i.NKS:
Mercantile Trust ComFany, New York, N. Y.
Bank of Lemoore, Lemoore, California.
I,IERGED
(with Security Trust & Savings Bank, Los angeles, Cal.)
Long Be~ch Trust and Savings Bank, Long Beach, Calif.
Guaranty Trust & Savings Bank, Los Angeles, Calif.
PERMISSION GRANTED TO EXERCISE TRUST POV/ERS:
The First National Bank of St. Mary's, West Virginia.
10
X-15~0
FEDERAL RESERVE BOARD .ANNOUNCEMENT
b'OR THE VVEEK ENDING MARCH 10, 1922
AD11ITTED TO THE FEDERAL RESERVE SYSTEM:
Capital
Surplus
Total
Resources
$~.000
~15,000
$66,175
DISTRICT NO. 6.
Bank of Hoschton,
Hoschton, Georgia
CHANGE OF l'WYIE:
The Northea.st-Tacony Bank, Philadelphia, Pennsylvania,
to Northeast-Tacony Bank & Trust Company.
AUTIDRIZED TO ACCE.PT DBAl!"'TS AND BILLS OF EXCHANGE
U2 TO 100 ..2ER CENT Ol!, CAPITAL AND SURPLUS:
Mercantile Trust Company, San Francisco, California.
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
The
· The
The
The
The
The
First National Bank of Spring Valley, N. Y.
Farmers' National B3ll.k of Butler, .J:lerina.
First National Bank of Martinsville, Ind.
First National Bank of Whiting, Ind.
Citizens' National Bank of Hampton, Iowa.
Quincy National Bank, Quincy, Illinois.
.x.-lo~
FEDEB.t.I.J, RESillt VE BO..:'-ED .Jj:JlTOUJ.'l"CEl\1ENT
FOR THE WEEK ENDING J'.ulliCH 17, 1922
ADMITTED .TO THE FEDERAL RSSI:.RVE SYSTEM:
Total
Surplus
DISTRICT NO.
Resources
e.
The Greenfield Bank,
Greenfield, Tennessee
$218,359
iJt;30,0GO
DISTRICT NO. 9.
State Bank of Anoka,
anoka, Minnesota
50,000
25,000
923,118
Security State Bank,
Wanamingo, Minnesota
40,000
8,000
208,836
DISTRICT NO. ll.
The Farmers Guaranty State Bank,
Stephenville, Texas
100,000
543,097
QONVERSION:
The Rittenhouse Trust Company, Philadelphia, Pennsylvania,
has converted into a national bank.
PERMISSION
The
The
The
The
G~TED
TO EXERCISE TRUST ?OWERS:
Fruit Growers' National Bank of smyrna, Delaware.
Market Street National Bank of Philadelphia, Penna.
Rittenhouse National Bank of Philadelphia, Penna.
First National Bank of Elloree, South Carolina.
•
X-1530
FEDERAL RESERVE BOARD ANNOUNCEMENT
.FOR THE WEEK ENDING lJARCH 24, 1922
ADMITTED TO THE FEDERAL RESERVE SYSTEM:
Capital
Surplus
Total
Resources
DISTRICT NO. 6.
Peoples Bank & Trust co.,
Selma. Alabama
$100 ,000
CitUlene Bank,
Barnesville, Georgia
50,000
35,000
242,383
BANK CLOSED:
Yellowstone valley Bank & Trust Co. , Sidney • Montana..
AU'l'HORlZED TO aCCEPT DRAFTS AND BILLS OF EXCHANGE
UP TO 100 .PER CENT OF C.AiliTAL JUID SURPLUS:
The New York Trust Company, New York, N. Y.
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
The Commercial National Bank, Raleigh, North Carolina.
The Palmer lfational Bank,
Danville,lllinois.
~he First National Bank,
Mascoutah, Illinois.
The National City Bank,
Evansville,Indiana.
The American Exchange National Bank, Virginia, Minnesota.
The First National Bank,
Longview, Te:ms.
13
X-1530
F.EDERAL RESERVE BOARD ANNOUNCEMENT
FOR ':'hE WEEK ENDIIW ~..:ARC:I 31 , 1922
ADMITTED TO THE FE:or'RAL RESERVE SYSTEM:
...
Cajpita1
SUrplus
Total
Resources
$125,000
$35,000
$662,514
DISTRICT NO. 8.
Lnwrence County Bank,
Walnut Ridge, Ark.
INSOLVENT:
First Guaranty State Bank, Collinsville. Texas.
CONVERSION:
The Texas Bank ~. Trust Co. ,
into a natienal bank.
Bea~nt
.
, Texas, has converted
PERMISSION GRANTED TO EXERCISE TRUST POWERS•
The West ern Reserve Nat iona.l Bank, warren, Ohio.
First National Bank of Polk County at Oepperhill, Tenn.
The Security Nat ional Bm k, Faribault, Minn ..
The First National Bank of Hooker, Okla.
X-15:30
FEDERAL RESERVE BOARD .ANNOUNCUU!:NT
FOR THE WEEK ENDING A.2RI1 7, 1922.
AlliliTTED TO THE FEDERAL RESEH VE SYSTEM:
Capital
Farmers Bo.nk of Pendleton,
· .il'ranklin, West Virginia
surplus
Total
Resources
$50,000
$50,000
$616,978
25,000
4,000
72,782
DISTRICT NO. 6.
Pendergrass Banking Co,,
Pendergrass, Georgia
VOLID\f'l'.t:JiY
The Bank of Santa Monica,
LI~UlD.tiTION:
S.::mta Monica, California..
CONVERSION:
The Peoples State Bank, Enumclaw, 1/a.shington, has converted
into a nn.tiona.l bank.
PERIUSSION Glk.NTED TO EXERCISE TRUST POI.rERS:
The People's Nation~l Bank of Leesburg, Virg~nia.
The Beckley National Bank, Beckley, West Virginia.
The First National Bank of Troy, Alabama.
X-15~
.i'.EDERAL RESERVE BO.tiRD ANNOUNCEMENT
FOR THE WEEK ENDING AI'RlL 14, 1922,
~lTTEp TO THE FEl§R.A.W RESERVE SYSTEM:
Total
Capital
Resources
!l'he State Bailking & !l'ruat Co ••
dieveland. Ohio
$750.000
1'he P'al'lllei-s & Mei'9liants Bank CO• t
S¥1 vatl.ia, Oliio
50,000
$11 '146 ,011
piSTRICT NO. 4.
16,000
567,126
100,000
15,000
416,945
100,000
10,000
207,856
DiSTRICT NO. 6.
Bank
ot Jladison,
Madison, Georgia
DISTRICT NO. 8.
Planters Bank
&
Ba~eville,
!l'r.ust co.,
Hisaiasippi
Cambria
:Bank,
Inc.,
Cambria, Virginia.
INSOLVEN!l':
El Paso Bank & Trust Oo., El Paso,
Texas.
CHANGES OF N#ME:
Montclair Trust Company, Montclair, New Jersey,
to the
Montclair Essex Trust Company.
Saline Trust and Savings Bank, Harrisburg, Illinois,
to the
First Trust and $avings Bank.
PERMjSSIQN g!W!!J.'ED Tc;> EXERCISE TRUST POWERS:
The First National Bank
o~
Stevens Point, Wisconsin.
iG
X-1530
b~DERAL
RESERVE BOARD ANNOUNCEMENT
FOR THE WEEK ENDING APRIL 21, 1922
ADMITTED TO THE FEDERAL RESBHVB SYSTEM:
Total
Resources
Capital
Su:rplus
The Peoples Trust Company,
~,qartinsburg, West Virginia $200,000
~102,500
$1,562,724
10,000
501,199
DISTRICT NO. 5.
DISTRICT NO. 6.
Bank of Winter Park,
Winter Park, Florida
40,000
DIS'I'RICT NO. 8.
Farmers State Bank,
New Athens, Illinois
. Northwestern TJ:ust Company,
St. Louis, Missouri
82,066
25,000
500,000
200,000
8,595,320
X-1530
FEDEB.tU. Ill!iS::I:B. V::. BOARD AJ."f.r• OT.n'.f c::J\J.B~·I1'
FOR THE 7/EE[ E:::JD!lm .u•..-<HIL 28, 1922
Total
-·-Resources
DIS1'RICT NO. 7 •
Fletcher Savings & Trust Co.,
Indiannpo1is, Indiana
$1,500~000
Soruggs,Van~ervoort
200,000
16,526,517
& Barney Bcnk,
St. Louis, Mo.
1,378,418
200 ,OU~oJ
The .North. Siue !~..nlk •f Brooklyn. :J Y., has merged with t.:.. e
Manufacturers Trust Ce. of Brooklyn umie::. name of the latter.
CONSOLIDATION:
The am~fic3n Bank & Trust Co. ~d the Liberty Bunk & Trust Co.,
both of New Orleans, La., have consolidated under the name of
American Liberty Bank & Trust Co.
CONVERSION:
The Farmers & Merchants State ,flank, Kenedy, Texas. ha.s converted
into a national bank.
~ERMISSlON
GRANTED TO EXERCISE
T.hU~T ~~V&RS:
The Honesdale National Bank, Honesdale, Penna.
The Bank of North &nerica,
Phj.ladelphia, Penna.
The Third National Exchange :eank, Sandusq, Ohio.
The Clinton CountY. Nation~ Bank, l:;umington, Ohio.
The ?eople' s National Bank, Monessen, .Penna.
Dtlbuque National Bank, Dubuque, Io·.,va.
The University National Bank, Seattle, Wash.
X-1530
FEDERaL RESERVE BOARD ANNOUNCltlllElfT
WR THE 'YIEEK ENDING M.AY 5, 1922.
All'IIITTED TO THE l:i'EDER..<:..L P.EBERV':Z. SYSTEM:
· Caeital
SUrplus
Total
Resources
Si:25 000
~2,500
$27,500
Bank of Hattiesburg & Trust Co.,
100,000
Hattiesburg, Miss.
33,000
1,046,003
200,000
50~000
1,812,203
200,000
1,000
2,220-,847
DISTRICT NO. 6.
The Peoples Bank,
Crystal Springs, Miss •.
"'t'
'.·
DISTRICT NO. 8.
The Savings Trust Co.,
St. Louis, Mo.
DISTRICT NO. 12,
Citize.ns Bank,
.Portland, Oreg.
PE.BIVIISSION GruNTED TO EXERCISE TRUST POWERS:
The Tel."re Haute National Bank,
Terl."e Haute, Indiana.
-fO
.J.._J
X-1530
FEDERAL RESERVE BOARD ANNOUNCEMENT
FOR THE VJ.EEK ENDING liiAY 12~ 1922.
AIMIIJ.1TED TO THE FEDERAL RESERVE SYS'TEM:
Co.pi tal
Surplus
Totql
Resources
DISTRICT NO. 5.
Bank of Victoria, Inc ••
Victoria, Va.
$
30,000
~~ 9,000
50,000
12,500
$360,928
DISTRICT NO. 7.
Iowa Loan & Trust Co.,
Fairfield, Iovva.
.Y.QJ.UNTARY LIQUimT!ONS:
Farmers Bank Company" Pandor<:>", Ohio.
Farmers & Merchants S~wing::; Bn.nlc, Logan, Utah.
WI T'.dDRAWAL:
Cla~·
County State Banlc, Louisville, Illinois.
AUTHORIZED TO ACCEPT I!RAFTS AND DILLS OF EXCHANG1&
UP TO 100 PER C,'EN~' OF CAPITLL AND SUP..PLUS:
The lllercha.nts Bonlc,
Hobilo}
Alabama.
PERMISSION GRi1.NTED TO EXERCISE TRUST P0\7ERS:
The Citizens' Nntiond Dank of Lehighton, Pcnnn..
Tho Fourth Nationn.l Dnnk of r:ichit:::., K.-msas.
The First Nntionnl Bnnlc of Clarks~rillo, Texas.
The State Nationsl Bnnk of Houston, Texns.
20
FEDERAL RESERVE BOARD
WASHINGTON
X-1530
FEDERAL RESERVE BOABD ANNOUNCEMENT
FOR '1HE. \i£EK ENDING lllAY 19. 1922
AIM.IT'lED TO THE FEDERAL RE&'ERVE SYSm!:
Capital
Surplus
Total
Resources
$31,.400
$10~000
$121,708
60.000
50,000
532,954
DIST.RICT NO. 11.
Blooming Grove State Bank,
Blooming Grove·' Texas.
50,000
5,000
175,360
DISffilCT NO. 12.
Columbia Valley Bank,
Wenatchee, Washington.
100,000
25,000
1,853,229
DISTRICT NO. 6.
Fanners & Merchants Bank,
Hurtsboro, Alabama.
The Middle Georgia Bank,
Eatonton, Georgia.
CONVERTED INTO Nl.TIO:W.L .Bli.NKS:
The·Passaic Trust & Safe Ieposit Co., Passaic, N. J.
Guaranty .Bank & Trust Co., Beaumont. Texas.
VOLUN'JARY LIQ.Ulll\TIONS:
Dollar Savings Bnrur & Trust Co., Bellai~o. Ohio.
Union State Bank:, Nezperce, Idaho.
PERMISSION GR11.N!IED TO EXERCISE TRUST POWERS:
First National Bank:, Lyndhurst, N. J.
Passaic National Bank and Trust Co., Pas s~dc, N. J.
The Nat iona.l Bank of Newburgh., N. Y.
The Mount Holly National Bank, lllount Holly, N. J.
First National Bank, Hnhnnoy City, Penna.
Frederick County National Bank, Frederick, Ud.
First National Bank, Waterloo, Iowa.
The Sheridan National Bank:, Sheridan, Wyoming.
The American Nntional Bank, Silver City, N. Mex.
The Americnn National Bank, San Fr2ncisco, Calif.
FEDERAL RESERVE BOARD
WASHINGTON
X-1530
F.E.DERAL BESER'VL BOARD ANNOUNCEUENT
FOR THE \VEER ENDII\U NIAY 26, 1922
AllUTTED TO THE FEDERAL RESERVE SYSTEH:
Surplus
Total
Resources
:DISTRICT NO. 7.
The Farmers State Savings
Milford, Michigan.
Bank~
JJISTRICT NO. 11.
Farmers State Bank~
Olney 1 Texas.
30,000
6,000
100,631
DISTRICT NO. 12.
Co.mmercial Bank & Trust Co.,
Wenatchee, rJashington.
100,000
VOLill!TARY LIQUIU'.TION:
Farmers & Merchants Banl.{, Idaho Falls, Idaho.
PEBl'HSS,.ION GR".N'I!ED TQ T.::x:ERCISE 'l'RUST P01.'JERS:
The National Bank of Commcrcot Providence, R- I.
The Citizens' National Banl:, Port Henry, N. y,
1,592,704
FEDERAL RESERVE BOARD
WASHINGTON
X-1530
FElERAL RESERVE BOARD ANNOUNCElliENT
FOR THE WEEK ENDING JUNE 2, 1922.
ADm T~ TO THE F.E.'D.EBJ.L RES}!RVE SYSTEU:
Ca]2ital
Surplus
Total
Resources
$80,000
$50,000
$798,481
39,100
7,900
76,430
100,000
40,000
799,336
25,000
25,000
319,644
DISTRICT NO. 6.
Farmers & Merchants Bank~
Athens, Alabama.
DISTRIC1' 1-qo. 8.
The Corydon State Bank,
Corydon, Indiana.
Bank of Pontotoc,
Pontotoc, ~dississi:ppi.
DISTRICT NO. 10.
The Jamestown State Bank,
Jamestown, Kansas.
PERMISSION
GRl~NTED
TO EXERCISE TRUST POrl.ERS:
The Peoples National Bank, Belleville, New Jersey.
The Totowa National Bank 1
Paterson,
Nevv Jersey.
The Citi~ens' National Bank,Potsdnm~
New York.
The Condon National Bnnk,
Coffeyville,Kansas.
23
FEDERAL RESERVE BOARD
WASHINGTON
X-1530
FEIERAL RESERVE BOARD ANNOUNG.El![ENT
FOR THE V~ENDING JUNE 9, 1922.
All!IITTED TO TEE Fl!IERAL RESERVE SYSTEM:
Total
Resources
Capital
DISTRICT NO. 3.
Union Savings Bank & Trust
\'lilkes-Barro ~ Penna.
Co.~
$222,300
~~66,690
$834~819
25,000
159000
204.863
DISTRICT NO .. 6. ·
Farmers State Bank,
Lincolnton, Ga..
PEBMISSlON GBA.N'JXI} TO EXERCISE TRUST POr11ERS:
The
Tho
Tho
Tho
The
The
The
Ballston Spa National Bank. BPllston Spa. N. Y.
Dover Plains National Bank, fuver Plains. N, Y.
First National Bank of Mechanicsburg, Penna..
National Bank of Commerce. Philadelphia. Penna.
First National Bank of Monterey, Ind.
Simmons Nation13.l Bank of Pine Bluff, Ark.
James River National Dank of Jamestown, N. Dak.
FEDERAL RESERVE BOARD
WASHINGTON
),t-15:30.
FEDERAL :RESERvE BOARD ANNOUNCEMENT
FOR THE WEEK ENDING JUNE 16, 1922.
ADMITTED TO THE :BEDERAL RESERVE SYSTEL1:
Capital
§urplus
Total
Resourc-es
DISTRICT NO. :3.
Provident Trust Co. 9
Philadelphia, Penna. $2,000,000 $5,000,000 $7,709,440
DISTRICT NO. 4 ..
Beaver County Trust Co.,
New Brighton,Penna.
400,000
160,000
1,284,275
2.00 9000
:30,000
246,927
DISTRICT NO. 7.
Auburn Park Trust & Savings Bank,Chicago ,Ill.
CHANGE:
The Provident Life & Trust Company of Philadelphia has
been re-organized.and its banking and trust company business transferred to a new corporation named the Provident Trust Company of
Philadelphia, which company has been admitted to membership.
PE:RMISSION GRANTED TO EXERCISE TRUST POWERS:
The First National Bank of Columbia'City, Indiana.
X-1530
iEDERAL BESJmlVE BOARD
FOR THE ';lEEK
El~:OING
~OUNC~T
JUNE 23, 1922.
J.DUTTED TO THE l'EDERAL RESERVE
SYSTEM~
SUrplus
Total
Resources
$200 ,000
$2,931,052
806,100
161,220
4,286,931
200,000
150,000
DISTRICT NO. 7.
Commercial State Savings Bank.
Detroit, Michigan.
$1,000,000
DISTRICT NO. 8.
Louisville Trust Co.,
Louisville, Kentucky.
Jefferson Bank,
St, Louis, ¥1ssour1.
DISTRICT NO. 11.
First State Bank of Roby,
Roby, Texas.
40,000
DISTRICT NO,. 12 ..
Farmers State Bank,
Coulee City, 'asshington.
25,000
2,500
122,220
CHANGE OF LOCjTIONi
The First state Bank of Cloudcroft, New Mexico, has removed
to Alamogordo, New Mexico.
BANK CLOSED:
The Bank of Murtaugh, Murtaugh, Idaho.
URGER:
The Greeneville Bank,and the Merchants & Farmers Bank, both
of Emporia, Virginia, member bankS, have merged under the name of The
Citizens Bank of Emporia.
CONVERTED INTO NATIONAL Ba.N.K:
The Lincoln Trust Comp.my, New York, N. Y.
ABSORBED BY NATIOli.t\.L BANK:
The State Savings & Mercantile Bank, Wichita, Kansas, has
been absorbed by the Fourth National Bank ofWichits.
PERMISSION GRANTED TO EXERCISE TRUST P();VERS:
The
The
The
The
First National Bank of Nutley, New Jersey.
Madison National Bank of Richmond, Kentucky.
Charleston National Bank, Charleston, West Virginia.
Security Natio:oa.l Bank Bavings & Trust Co.,
St. Louis, Missouri.
X-1530
FEDERAL RESERVE BOARD ANNOUNCEMEm'
WEE[{ ENDING JUNE 50, 1922.
iOR TEE
ADMIT~D
ro THE FEDEJtA.I. I!ESJg!YE
SYSTAt:
Capital
DIST.B.ICT NO • 3.
J enld.ntowu Trust Company,
Jenkintown, Penna.
§urplus
Total
Resources
$ 125,000
$ 260,000
1,000,000
1,000,000
4,616,394
50,000
6,000
365,131
DISTRICT NO, 5.
Old Dominion Trust Company,
Richmond, Virginia.
DISTRICT NO. 12.
Farmers & Merchants' Bank,
· :Burbank, California..
CON50LillA.TION .AND CHANGE OF NAME:
The First state Savings :Sank, Evart, Michigan, a member bank,
and the Evart Savings Bank of Evart, a. non-member bank, bave consolidated
under the name of Evart State Bank,which continues membership.
VOLUNT.AllY LIQUIDATION:
The Security Savings Bank,
Brigham City,
utah.
ro ACCEPT DRAFTS AND BILLS OF EXCHANGE
UP TO 100 PER CENT OF CAPITAL AND SURPLUS:
AUTHORIZED
American-Liberty Bank & Trust Co., New Orleans, La.
PERMISSION GRANTED 1tl EXEB.ClSE TRUST roWERS;
The
The
The
The
The
The
First National Bank of Dover, Dover, Delaware.
First National Bank of NewtO\"m, Newtown, Penna.
National Bank of Baltimore, Baltimore, Md.
First National Ba.Dk of Terre Haute, Terre Haute, Ind.
Orange National Bank, Orange, Texas.
First National Bank ot Long Beach, .Long Beach, Calif.
~·
.
c:·,.-.j
t" . } 'J
FEDERAL RESERVE BOARD
WASHINGTON
X-3291
January 4, 1922.
SUDJECT:
Certification of ~ayment of Franchise Tax to
Treasnry Department.
Dear Sir:
In accordance with the procedure previously
adopted by the Treasury Department 1 in connection with the
certification as to payrr:ent by Federal Reserve Banks to the
Treasurer of the United States of amounts on account of franchise tax, the Federal Reserve 3oard 1 at the request of the
Treasury Department, asks that your auditor prepare a statement of income and expenses coverini;o the caLmdar year 1921 1
showing the manner in v;hich the arr:ount due the United States
on account of franchise tax was determined.
It is requested
that ·when the statement has been prepared the fallowing form
of certification
~Je
typed on its cack, executed ty your audit-
or and countersigned by a senior executive officer.
The state-
ment should then be forviarded to the Secretary of the Treasury,
Division of Public l•loneys, \:ashington.
- 2 -
"I hereby certify that I have examined this
statament of profit anl loss account of the Federal ·
Reserve Jank of
for the celendar year
1921; that the items in such account are correct as shc>m
by the records of such Federal rieserve Dank; that such
profit and loss statement shows all items of t:_ain during the :::eriod; that all deductions made from gross and
net earnings in such statement apr:- ear to ce fair, just
and reasonable in all respects 1 and that the amount due
the United States as shown thereon is correct in accort.iance with the provisions of Section 7 of the Federal
Reserve Act approved DecemJer 23 1 1913 1 as amended by
the act of I.Ia:rch 3, 1919."
fluditor, Federal Reserve
COUNTERSIGNED:
:Bank of
The Treasury Department advises the Board that it is the
usual custom of administrative officers of' the Goverrunent having
charge of the collection of revenue to make such verifications of
collections as will insure the Government 1 s receipt of the correct
amount due 1 and that it desires the certified copy of your statement requested in order
t6 make such verifications therefrom.
Very truly yours,
W, \i. Roxton,
Secretary.
TO THE GOVERNORS OF ALL FEDERAL RESERVE
BANKS~
EXCEPT DP.LLAS.
FEDERAL RESERVE BOARD
WASHINGTON
X-3292
January 4, 1922.
SUJ3JECT:
De~r
Code words to be used in connection with Settlement
through Gold Settlement Fund of shipments of "other"
Federal Reserve notes.
Sir:
With further reference to tbe Board's letter of December
31, 1921 (X-3290) describing the plan for the settlement through
the Gold Settlement Fund of "other'' Federal Reserve notes, it
will be noted that certain code words 'Rere adopted by the Board
for use in connection with the new plan of settlement to go into
effect February 1st.
It is now requested that the code words CHURCH, CHURNING
and CIDER, designated in that letter, be added to the bottom
of page 4g of the new code book to follow the coie word CHUMMY,
already. inserted, the code words DRUID end DRUMli!TER be added to
the bottom of page 77, following the code word DROWSY and that
the code wonl DUCKBILL be added to the bottom of page 7B
following the code word DUCHY.
It will, of course, be understood thet the use of the
code words CB.U'Mltf! end CHURL listed on page 4B of the new code
book and used at the present time in connection with direct
ad vices .to the Federal Reserve banks of shipnents of fit and
unfit i'eder~:~l Reserve notes will be discontinued after February
1st and it is requested th"'t these words be cancelled in your
Bank's copies of the Telegraphic Code, when the new plan of
settlement becomes effective.
Very truly yours,
Walter L. Eddy,
Assistant Secretary.
GOVERNORS OF
~LL
FIDERftL RESERVE :BANKS.
U. S. CY.JRRENCY
1
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c:."Ji_
FEDERAL RESERVE BOARD
WASHINGTON
. X-3294
January 6, 1922.
SUBJECT:
Reports from Clearing Houses of Total Debits to Individual
Account.
Dear Sir:
At the last annual Convention of the American Bankers Association held in Los An 0 eles, the following resolution was passed 1Y
the Clearing House Section:
1
Whereas1 at a meetin€!, of the Clearing House Section of the
American Bankers Association at its annual convention held at Los
Angeles 1 it was the sense of the meeting that it should take definite
action on the question of the abolishment of the publication of bank
clearings 1 and in lieu thereof that total debits 1 which it is believed
represent more clearly the total volume of business transacted 1 be
published 1 and
Whereas, it was the sense of the meeting that the publication
of such information should be discontinued 1 that the information shl)uld
be furnished to the managers of the clearing houses 1 not only by member
banks 1 but by non-clearing institutions - therefore 1 be it Resolved 1
that the Clearing House Section of the American Bankers Association
heartily endorse the stand taken by the St. Paul Clearing House Association1 which on September 28, 1921 1 adopted the following resolution:
Resolved 1 That beginning January 1, 19221 or such earlier date
as may be generally agreed upon, the members of this Association and such
other banks as clear through a member bank 1 be required to report to the
manager each day at time of clearing1 the total of their individual debits~
of the preceding day 1 with the· view 1 on the part of this Association, of
using such individual debits in publications hereafter 1 in lieu of
clearing figures, it being the belief that total debits more clearly
represent the volume of business transacted in this City 1 and be it further
Resolved1 That the Clearing House Section recorr~ends that
every clearing house association adopt a reso~ution of similar purport
so that after January 1, 19221 the publication of total daily transactions shall be given the publicity now given to daily clearings.
/_
.. , ..
X-3294
- 2-
The Board understands that it is the desire of the Clea.hng House
Section to cooperate with the Board in compiling total debits to individual
accounts, and the Secr~tary of the Section under date of December 15 requested all clePrin? house managers to report weekly to the Federal Reserve
Bank of their District their total debits to individual accounts. The
Board hopes that the manager of each cle~ring house association in your
District will m~ke these rerorts to your Bank. For your information there
is enclosed a list of ~n clePring house associations in your District which
are not now submitting weekly reports ~nd the Board req,ues ts that you communicate with the manager of each of these associations with a view of having
him telegr~=rph to your B.ank {at the ex1"ense of the Board) each week beginning
with February 1, 1922, the total amount of debits to individual accounts made
by banks which are members Qf the c lecrina house and banks which clear through
clearing house members, i.e., so called ttle""ring non-members.
The Board has been advised thet the Clearing House Section, f'.merican
Bankers .Associ::?ction, has sent to the manager of ;ech cleerinf house a.ssociation a form upon which reports should be made to the Federal Reserve
Banks, and that there are printed on the fom instructions regPrdinf?: the
charges which should be included in the reports. The instructions referred
~o provide for the inclusion of debits to expense and miscellaneous accounts
~n addition to other debits required to be reported under instructions issued
by the Board. In communicating with the managers of the cleering house associations it is requested thet you advise therr th.st debits to individual
accounts should represent charges to accounts of depositors other than banks
and should include only the following items:
. "Debits to accounts of individuc>ls, finns and corporations, and of the
Un1ted StPtes Government includin~ T:ar Loan deposit accounts, also debits
to savings accOU:nts » payments from trust ace ounts and certificates of
de:posi ts paid."
.~ebits in settlement of clearing house balancos, payments of cashiers'
checks, ch2rges to expense and miscellaneous accounts, corrections and
similar charges must not be included in figures. of debits to individual
accm.mts.
~
flt the present time approximately 170 clePring house centers are reporting this infonn~>tion end we hope to increase this number materielly through
the cooperation of the Clearing House Section, their records showing 275
cle~ing house associations in the country.
Very truly yours,
G o v e r n o r.
(Enclosures)
To all Federal Reserve Agents.
0.3
"-..L
FEDERAL RESERVE BOARD
X-3295
WASHINGTON
SUBJECT:
January 51 1922.
Building Operations of Federal Reserve Banks
Dear Sir:
On December 191 1921, an amendment was 'pronosed by Senator
Harris of Georgia to Senate Bill 2263, which by agreement will come to a
vote on the 17th instant, reading as follows: "The Federal Reserve Board
shall have no authority hereafter to enter into any contract or contracts
for the erection of any building of any kind or character~ or to authorize
the erection of any buildine,., without the consent of Congress having previously been given therefor in express terms".
The Federal Reserve Board has never assumed that it has authority:
to enter into any contract for the erection of any kind of building. The
directors of Federal Reserve Ban1m are .• however., em!'owered under tne provisions of Section 4 of the Federal .Reserve Act "to make contracts" and ''to
exercise**all powers specifically grarned by the provisions of this .Act and
such incidental powers as shall be necessary to carry on the business of
bankin6 within the limitations prescribed by this Act".
The Board has alvvays taken the view that the law autnorizes
directors of Federal he serve Ban:{s to provide their banks and branches with
such buildings and equipment as 1nay be necessarJ for the proper conduct of
their business. There is nothing in the Federal Reserve Act tnat requires
the specific approval of building contracts by the Federal Reserve Board,
but under its power of general supervis:i.on (paragraph j 1 Section ll) ".;he
Board has required all Federal Reserve Banks to submit for its consid~ration
all options for the purchase of real estate., all plans and specif1cations
for buildings and vaults and has advised the b~~ks that they should not
enter into any contracts involving investments of this kind until the Board
had had an opportunity to make any sug~;est:i.ons or offer any objections as
it might deem proper.
In some cases buildings of Federal Beserve Banks and brauch·es r1ave
been completed and in others contracts have been let which must necessc:.rily
be carried out. Although the amounts involved in the erection of Federal
Reserve Bank buildings represent investments of the banks 1 own funds ad.
not the expenditure of public moneys., the Board feels., nevertheless.~ tLat
no attempt should be made by any Federal heserve Bank to anticipate any
action by Congress which may tend to restrict or modity its present authority and you are requested to advise your directors at once that the Board
advises that no new contracts for the construction of a building be entered
into by them until there has been opportunity of ascertaining the disp osition of Congress toward the amendment above quoted.
Very truly yours,
(Signed) W. P. G. HARDING,
G o v e r n o r.
CHAIRMEN OF ALL F.R.BANKS
34
FEDERAL RESERVE BOARD
WASHINGTON
X-3296
January 5.,
SUBJECT:
19~::2.
Building Operations of Federal heserve Banks.
· )i
..
Dear Mr. Chairman:
.\
· l,am enclosing for your information copy of a letter which the Board
is sending today to the Chairman of the board of directors of each Federal
Reserve Bank.
The buildings of the Federal Reserve Banks of hichmond) Dallas and
Kansas City have been completed and they are now being oecupied by the
banks. The Federal Reserve Bank of Atlanta has outgrown the building
which it is now occupying and the work of constructing an annex large
enough to meet present requirements is now wall under way.
The building
of the Federal Reserve Bank of Boston is nearly completed and some depart•
ments of the Bank have already been moved into the new building.
The
buildings of the Federal Reserve Banks of Chicago and San Francisco are
also ·.vell a.G.v.s.n.;;ed. <LlJ. it is expe:;·ceJ. t~,~Y v•~ll be 1·eady for occupru'1cy
within the next few months..
Contractfl have been let in connection with
the construction or' buildings of the Federal Reserve Banks of 1~ew York and
Cleveland which cannot now be cancelled and the work of construction must
accordingly proceed. The Federal Reserve Bank of Philadelphia was able to.
purchaee ~ building which after certain changes and the addi tionof a
large vault is suitable for its purposes and this building is occupied by
the Bank. The contracts for the foundations of· the building for the
Federal Reserve Bank of Minneapolis were let some time ago and the foundations will be completed within the next ten days.
No contracts, however,
have yet been let for the superstructure. No contracts have so far been
let tor the building of the Federal Reserve Bank of St. Louis.
The Federal Reserve Bank of Cleveland has completed repairs and additions to the building of its Branch at Pittsburgh, and has acquired a lot
for the use of its Cincinnati Branch, but no contracts have been let for
the construction of the building and tha·t Br·ar,.:ih is atill occupyi11g lea;Sed
quarters which are very inadequate.
The Federal Reserve Bank of Richn::md
some years ago purchased a building for the use of its Baltimore Brancn,,
which has proved to be entirely too small and more than a year ago it
acquired a larger building site in that city.
It is proposed to erect
a building upon the site so acquired and upon its completion to sell the
building which is now being occupied by the Bal. timore Branch, but no
contracts have been let for the new building.
The Federal Reserve Bank
of Atlanta has purchasedre. building for the use of its Br~ch at Nashville,
which must, however, be remodeled before it can be utilized, and no contracts have yet been let for these necessary changes. The Atlanta Bank
has purchased a site Upon which it proposes to erect a building for the
use of its Branch in New Orleans, but the construction contracts have not ·
yet been let. It has also purchase~ a lot for the use of its Jacksonville Branch, but· has not yet entered into any -contracts for the construe. tion of the buildtng. The :Cetro:'.. t B::anch of the Federal Re ser:;e Bank of
Chicago is occUpying leased quarters which are entirely inadequate and
unsuitable in many respectsJ and the Federal Reserve Bank of Chicago has
recently bought the ground in Detroit upon which it pr~oses to erect a
....
-2•
I
\
J
..
•
building, but no contracts for cc:nstr:.lct:,cn La7e yet be::m let.
The
Federal .Reserve Bank of St. Louis more than a year ago purchased a lot upon
which it pro-r:oses to construct 'a buildin5 for the use of its Branch in
Little Rock. ?lans have been made but contracts nave not yet been let.
The St. Louis Bank purchased a building in Louisville which has proved to
be entirely too small and it has since acquired 50 feet of ground ad joinine;
on which it proposes to construct a two-story anne.~t uniform in style with
the present building. Con.tracts for construction have not yet been let.
The Federal Reserve Bank of Minneapolis completed some time ago its building
for the Branch at Helena1 Montana. The i'ederal Reserve Bank of Kansas City
has acquired a lot in Denver but has not yet let contracts for the construe ..
tion of a building which is badly needed. It has not yet let contracts for
the building to be used by its Branch in Oklahoma City but has purchased a
building for the use of its Omaha Branch. The Federal .Reserve Bank of Dallas
completed about two years ago the building for its Branch at El Paso and the
work of conBt7''!.l.Cti.on on the building. for its B~·a.::1ch at Hcusto~1 is well u1.1.der
way. The Federal .Reserve Bank of San Francisco about a year a~o bought a lot
for the use of its Salt Lake City Branch but i1as not yet begun the preparatior:
of plans for a building and consequently has let no contracts. l'Jo real estate
has yet been bought for the other Brar~ches of Federal neserve Banks; B~ffalo
(New York)) Birmingpam (Atlanta), lllemphis (St. Louis) and rortla:r"d, Seattle,
Spokane and Los Angeles (San Francisco), which are occupying leased quarters
which answer the purpose for the time being, but it is evident that ultimately
all the.se Branches must either be given more adequate quarters or must be
abandoned.
Since the Sub-Treasuries were abolished, the Federal Reserve Banks ha~e
been exercising the functions formerly performed by the Sub-Treasuries and
these functions have been extended wherever present facilities admit to the
branches. In view of the large amounts of actual cash and securities held
by all Federal Reserve Banks and"branches, it ie very important that they be
provided with proper vault facHiUes. f!everal of the Federal i\ese.rve Banks
are very anxious to let contracts and proceed with the work of construction
of buildings, which are urgently needed, but the Board is not willing that
anything should be done to defeat the intent of Congress. As a vote will be
taken on the pending amendment at an early date, it is not thou[,ht that any
serious inconvenience will result from awaiting an expression of the will
of Congress.
It seems properto call your attention to the fact that full and detailed reports of the bu~lding operations of Federal aeserve Banks have
been made to Congress in the annual report of the Federal Reserve Boar<i each
year, as well as in the Board's reply of October 31, 1921 to Senate .riesolution 153, which has been published as Senate Document 75 •
Very truly yours,
(Signed) W. P. G. H.AiWING
G o v e r n o r.
,
·
Chairmen of Banking and Currency
Committees of Senate and House.
~~~
FEDERAL RESERVE BOARD
WASHINGTON
X-3297
January l., 1922 •
•
Dear
In accordance with the plan of classifying
and
rating employees of the Board, made effective July
1., 1920, there is enclosed herewith a notice of your
rating
"'
and
relative standing in classification as based
upon this rating, and your salary as of January 1, 19?2,
as approved by the Federal Reserve Board.
Very truly yours,
Assistant Secretary •
•
•
li._,,(_)
•
FEDERA~
,.
GOLD
Summa .
RESERVE :SOARD
SETTLEMENT FUND
ot transaeticmtt for eriod endin Janua
Federal
Reserve
B61lk of
Balance last
statement
?9, 1921.· .
Dec.
Gold
Wi tbdrawals
Deposits
-.
:Boston
New York
Philadelphia
Cleveland
6,181,400.00
11, ooo, 6oo. oo
200.00
3,195,{)()0.00
Ricbmcmd
Atlanta
Chicago
St. Louis
Minneapolis
Bans as City
Dallas
San Francisco·
23,152.41
32,200.00
1, 017.53
1,002,000.30
5,600.00
2,ooo,ooo.oo
.Aggregate
· wi tlxlrawa.ls
end transfers
to .A ent 's fund
X-3298
{CONi'IDENTI.AL
Aggregate
deposits and
TRANSFERS
transfers from ~~------~--~~------~--------------~
ent 1s fum
Debits
Credits
28,223.75
31,3 53, 084. 33
10,813, 039· 31 .
1, 228, C27. 77
2, 831, 470. Sj
724,043.36
1, 231, ~7 .39
559,165.75
7,435,605.08
650,407.74
66.5, 292. 76.
6, 045 701.87
6J 181, 4·oo. oo
'11,000,600,00
5,000,200.00
3,195,000.. 00
1,023,152.41
32,200.00
1,017.53
1,0C21 000.30
5,6oo.oo
3, 920. ooo. 00
:Bank of
~ 000~ 000. 00
2,000,000.00
3,000,.000.00
2,000,000.00
2, 000, 00(). 00
..
13.,000# ooo. oo
Total
Federal
Reserve
Washington. D. C.
January 6, 1~2·'1,
Settlements from Deeeoiler 30, 1921 to January 5, 1922
inclusive. ... ________________________________
__ ,.. ____ ..., _____ .
______________________________
.
:Balance in
fund at close
ot business
Jan. 5. ·1922.
s,ooo,ooo,oo
...
2,ooo,ooo,oo
..
..
I$ 13, ooo, ooo, oo
Suamary o! changes in owner~
ship of gold b7 banks through
transfers and settlements.
------------------------------------
2, 810, 020,15
4, 109, 197. 36
.
F E D E R A L
5. 1922.
Su:nma.:-il of tr-ansactions for 'Period ending Januar
Gold
Federal
Bela..'"lce 1 e.s t
Reserve
statement
Wi tbirawals
Dec. 29, 1921.
Agent at
Boston
New York
Philaclelphia
Cleve lend
Richmond
.Atl~ta
. Chicago
St. Louis
I$
I
I
I
t
I
l
I
145, ooo, 000
301, ooo, 000
28,595,000
4o,ooo,ooo
297,644,500
56,100,000
2,200,000
San Francisco
Total
I$
Deposits
1
t
for
transfers
to bank
10, ooo, ooo
I
I
I
I
J$
I
10,000,000
...
3,700,000
4,000;000
7,·ooo, ooo 1
.
1,000,000
"
1, 3781 184,260
4o, 000,000
I$
36,700,000
I$
I
30,000,000
I$
I
10,000,000
145,000,000
321,000,000
'
140, 389, 260
140,000,000
-
2,000,000
5,700,000
34,295,000
5,000,000
1,000,000
-
71 920,000
10, ooo, 000
X-3298 a
Washington, D. C.
January 6, 1922.
:Balance at
close of
busineu
Jan. 5. 1922.
5, ooo,ooo
t
...
5, ooo, 000.
1, 920,000
7,000,000
I$
10,000,000
5, ooo, 000
-
2, 2}4, 000
Deposits
I
10,000,000
30,000,000
7,000,000
26,36o, oob
Total
1$ 10, ooo, ooo I$
2,000, 000
2,000,000
.,
203,661,500
I$
l
I
20,000,000
I
I
I
I
I
,..
F UN D
_{COl-lFIDENI'U L)
Deposits
Total
through
Wi tbirawals
transfers
from bank
V:i tbirawals
145,000,000
I
I
I
Dallas
10, ooo.. 000
Gold
130,389,260
Minne::.polis
Kansas City
I$
I
A G E :L1 T S '
R E S E R VE
I$
l
I
I
I
-
7,000,000
20,000,000
310, 644, 500 ·.
2,000. 000
56,100,0®
7,000,000
9,200,000
1,000,000
27,360,000
2,000,000
I.
'35,000,000.
-
2,234, 000
5,000,000
s, 920,000
54,000,000 ( $ 47,920,000
I~
90,700,000
199,741,500
I$
1,:420,964,260
-
PEDERJI L RESERVE BO.aRD
GOLD
Sumrna.r.y of trensactibns for
Fe-ler.u
Reserve
Eank of
SET'l.'LEMEWT
FUND
eriod end
'Balance last
statement
.
Jan-5. 1922.
Withdrawals
Deposits
,...
FED E R J. J,· RES E R V E
of transae t1 ons for -pe r1 od eniiruz Janu~ 12 j 1922.
. Gold
f.·e"'deral
Balance last .
Gold
statement
FeF:erve
Jan. -5. 1922.
Withdrawals
Deposits
Agent at
A G E NT S 1
F U ND
_1 CONFIDMU L)
Total
Jt..r.ri.O.l"Y
Best on
~~
145,000,000
J$
New York
321,000,~0
I
140,389,"260
r
t.tlanta.
I
I
1-.
I
1
~ieago
-I
'Philadelphia·
Cleveland
Richmond
. "!40, 000, 000
"'
34,295,000
Deposits
through
Withdrawals
~transfers
from bank
I$ 1o,ooo,ooo \$ ;,ooo,ooo ~~
I$
I
r 30,000,000 I
;,ooo,ooo
I
l
I
l
·3,000,000
I
5,000,000
I
.;
5,000,000
•
I$
I
I
Minneapolis
9,200.,000
K.cms as City
27,360,000
a,ooo,ooo I
I
2,000,000 I
2,234,000
30,000,000
I
-.I
1,000, 000
.I
8,000,000
10,000,000
l
8,000,000
I
I
I
I
I
I
2,000,000
1,000,000
56,100,000
Dallas
San Francisco
f
Total
l $ 1, 420, 964, 260 I$
-
3,000,000
-
20,000,000
I$ 13, ooo, ooo I$
150.. 000, 000
351,000,000
135,389,~60
. 34, coo, 000
I
!""
2, ooo, .ooo
.3,000,000
. 1·
·-
302,644,500
. 57,100,000
9,200,000
25,360,000
:~234,000
I
2,296,500
199.. 741,500
-
31,295:.000
I
St. Louis
I$
I
l
'
•
140, ooo, 000
3,000,000
I
35,000,000
310,.644,500
Wi thdrawa.ls
for.
transfers
to bank
X-3299 a
w·ashington, D. C.
January 13. 1922.
:Balance. at
Total
..
close of
bus i.'Oless
Deposits
Jan. 12, 1922.
8,000,000
8,296,500
I$38, ooo" ooo I$
8, 000,000
2,296,500
2s, 2~, ;oo
I$
205,1445,000
51,000,000
I$1,443,667, 76o
.
...
j
FEDERAL RESERVE BOARD
WASHINGTON
X-3302
January 14, 1922.
Subject:
Reports of Currency Transactions - Form 160.
Dear Sir:
The Treasury Currency Committee, appointed follo·wing the recer1t Governors' Conference, is desirous of
obtaining from the Federal Reserve Banks reports by calendar
months of their currency transactions.
The Committee has
approved a form of report identical with the Board's Form
160, and in order to obviate the necessity of the Federal
Reserve Banks having to make two rerorts each month - one
report to the Board covering transactions during a period
ending with the last Friday of the month, and· one report
to the Currency Committee covering transactions during the
calendar month - all Federal Reserve Banks are requested
to have their.nex.t re,.,ort to the Board, Form lb01 cover
transactions during the period from Friday, December 30,
1921 to Tuesday, January 31, 1922 inclusive, and to render
in duplicate thereafter reports covering transactions during
calendar months. The duplicate copies of the report ·ivill
be transmitted by the Board to the Treasury Currency
Committee.
Very truly yours,
G o v e r n o r.
To all Governors
Copies to Chairmen.
X-3303.
TREASURY DEPARTUENT
WASHINGTON
January 13, 1922.
, I
The Governor
Federal Reserve Board.
Sir:
You are advised that the De 1~rtment has referred to the Comptroller
General of the United States, Treasury Department Division, for settlement,
the account of the Bureau of Engraving and Printing for preparing Federal
Reserve notes during the period December l to December 31, 1921, amounting
to $257,518.52, as follows:Federal Reserve Notes 2 1914
<iji20
Tetal
@10
'IJilOO
:if 50
~
Boston •••••••••
52,000
206,000
1,000
'33,000 p:120,000
New York •••••• 1Q20,0ou
856,000
372,000
2,248,000
Philadelphia., ••
285,000
149,000
63,000
1,000
498,000
87,000
Cleveland ••••.•
131,000
93,000
311,000
188 ,wo
4,000
399,000
Richmond ••..•••
69,000
1,000
137,000
Atlanta ••••.•••
28 ,OOJ
18,000
2,000
145,000
97,000
Chicago •...••••
110 ,OvO
127,000
452,000
215,000
St. Louis ••••••
95,000
88,000
2,0UO
228,000
42,000
1,000
Minneapolis ••.•
61,000
44,000
2,000
1,000
122 ,000
ltl '000
Kansas City ••••
91,000
50,000
33,000
1:74,000
Dallas •••••••••
3,000
3,000
106,00(.;
408 ,ouu
San Francisco ••
l91,00U
109,000
2,000
2,375,000
6,000
5,194f,OOO
l '742 ,000 1,060,000 11,000
5,194,000 sheets at ;.:-49.58 per M
The charges
ag~inst
...
:Ji,257,518.52
the several Federal Reserve Banks are as
follows:-
l'
Sheets
Boston ••••.•
206,000
New York ••••
2,248,000
Philadelphia
498,000
Cleveland •••
311,000
Richmond, •••
399,000
Atlanta ••••.
145,000
Chicago •...•
452,000
St. Louis •••
228,000
Minneapolis.
122,000
Kansas City.
174,000
Dallas ••.••.
3,000
San Francisco
408,000
5,194,000
Compensat ion
3,429.90
37,429.20
8 ,291. 70
5,178.15
6,643.35
2,414.25
7,525.80
:3,796.20
2,031.30
2,897.10
49.9$
6,793.20
~86,480.10
ilate
Inc. Com?rinting Materials -eensation
Total
3,289.82
2,515.26
978.50 10 ~213.48
35,900.56 27,448.08 10,678.00 111,455.84
7,953.06
6,080.58
2,365.50 24,690.84
1,477.25 15,419.38
4,966.67
3,797.31
6,372.03
4,871.79
1,895.25 19,782.42
2,315.65
1, 770.45
688.75
7,189.10
7,218.44
2,147.00 22,410.16
5,518.92
1,083.00 11 '304.24
3,641.16
2,?8~.88
1,948.34
1,489.62
579.50
6,048.76
2, ·n8 .'18
2,124.54
826.50
8,626.92
47.91
36.63
14.25
148.74
6,5J5.76
4, 981.68
1,938.00 20,228.64
~82,948.18 ~63,418.74 ~24,671.50 257,518.52
The Bureau appropriations will be reimbursed in the above amount from
the indefinite appropriation "Preparation o.nd Issue of Federal Reserve Notes,
Reimbursable", and it is requested that your board cause such indefinite appropriation to be reimbursed in like amount •
~~
By direction of the Secretary:
Respectfully,
S. ?. Gilbert,Jr.,
Under Secretary.
.
.
c··
•
X-3303a
TREASURY DE.i?tili.TMENT
\\ASHI:TGT0N
January 13, 1922.
. I
The Governor
Federal Reserve Board.
Sir:
Y(..u are advisoJ. ;;.ilu.~ ·~;10 :;::;:·;.clc..:r-t.r."'£::t_, lKL8 :;e:i\~LL'E:<i to the vC .. ,.J?.;:t·o ....~eJ.· G-E-neral
of the United States, Treasury De:.;a'rtment Divis.·l·.m, for settlement, the account
of the Bureau of Engraving and .t>rinting for preJ?aring Federnl Reserve notes
during the period December l to December 31, 1921, amounting to w24. 79 ,as fOllo·,;s:
Federal Reserve Notes, 1918
!plO
..
Philadelphia • . • • •
San Fra...'lcisco
100
100
. '•
~49.58
per :.1 ••••
'-:~:0)
400
400
lOJ
500 sheets at
,wo
600
~p24. 79
The charges against the several Federal Reserve Banks are as follows:
..
_Sheets_
'
Philadelphia •••
San .b,ranc is co ••
Compons.:1tion
Plate
?rlnting Mate:da1s_
Total
~1.22
6~66
;;;,1.60
6.39
4,88
.48
1.90
:,04.96
19.83
~5.32
~p7 .. 99
~6o10
4;;2. 38
iJ;;24.79
100
ijj;l.66
~
500
Inc. Compensation
(
'it'
The Bureau a~Y;_:;roprint"tons v.rl:i.l ·oe reimbursed in the above amount from the
indefinite a_c)propriat:J.on tt.2reparation .1.nd Issue of Federal Reserve Notes,
Reimbursable", and it is requested. that your board cause such indefinite appropriation to be reimbursed in l:i.ke amcunt.
By direction of the
~ecretary:
Re spec t:fulJ.y,
s, P.
Gilbert, Jr.,
Under Secretary.
....
.
'
OFFICERS AND DIRECTORS
OF~DERAL
RESERVE BANKS
X-3304
Di§trict No, l - Federal Reserve Bank of Boston.
(Frederic H. Curtiss, Chairman and Federal Reserve .Agent~ Allen Hollis, C·ey1ty
Chairman, Chas. A. Morss, Governor.)
DIRECTOR
:I
TERM EXPIRES
RESIDENCE
BUSINESS AFFILIATIONS
Dec. 31.
Class A_
Frederick S. Chamberlain New Britain, Conn. Cashier, New Britain Nat. Bk.
Thomas P. Beal
Boston, Mass
Pres. 2nd Natl. Bank, Boston
Edward S. Kennard
Rumford., Maine
Cashier, Rumford· Natl. Bk.
1922
1923
1924
Class B.
E_ R~ Morse
Philip R .. Allen
Charles G_ Washburn
~
Proctor, Vt.
E. Walpole) Mass
Worcester, Mass
Treas~ Vermont Marble Co~
Bird & Son Inc. Paper Co.
Trustee and Manufacturer
1922
1923
1924
Manufacturer
1922
1923
1924
Class C.
Jesse H. Metcalf
Frederic H. Curtiss
Allen Hollis
Providence, R. I.
Boston, Mass
Concord., N. H.
Lawyer
___________________________________________ ......... -.- ..... ---------------------.------------District No. 2 - Federal Reserve Bank of New York
(Pierre Jay, Chairman and Federal Reserve Agent, Wm. L.. Saunders,
Deputy Chairman., Benjamin Strong, Governor)
•I
'
Class A.
) f
Jas. S, Al~xander
R. H. Treman
Charles Smith
New York City
Ithaca, N~ Y.
Oneonta, N. Y.
Chas A. Stone,
Richard H. Williams
Frank L.. Steyens
New York City
Pres. Amer. Internat'l. Corp.
Williams & Peters (Coal) Co,
Madison, N~ J.
North HoosickJ N.Y.Manufacturer
Pres. Natl. Bk. of Commerce
Pres. Tompkins Co. Natl. Bk.
Pres. Citizens Natl. Bk.
1922
1923
1924
1922
1923
1924
-2-
District No. 2- Federal Reserve. Bank of New York (Cont'd.)
X-3304
-------------- ------DIRECTOR
TlF:'il EXP IRE:S
Dec. 31.
RESIDENCE
BUSINESS AFF!LIATIONS
New Ycrk C~ ty
l<ew York City
New York City
Chairman-Dir. Ingersoll-Rand
Pres. American Radiator Co.
-------------
Class C.
Pierre Jay
Vim. L. Saunders
C. lVl. Woolley
:. S22
1923
1924
-----------------------------------------------------------------------------------District No. 3 - Federal Reserve Bank of Philadelphia
{Richard L. Austin, Chairman a.Yld Federal Reserve Agent; H. B. Thompson,
Deputy Chairman_, Geo. W Norris_, Governor.)
..
Class A.
M. J .. Murphy
Joe. Wayne 1 Jr.
Francis Douglas
Clarks Green, Pa.
Philadelphias Pa.
Wilkes--Barre 1 Pa.
c/o A. B. Leach & Co. N. Y.
P.res. Girard Natl. Bank
Cashier, First Natl. Bank
Philadelphia, Pa.
Philadelphia. Pa.
Camden, N. J.
V-Pres. Soutbwark Fdy. & Mach Co 1922
Merchant
1923
Pres. Victor. Talkj~g Machine Co 1924
Wilmington, Del.
Philadelphia, Pa.
Philadelphia, Pa.
Pres. U.S.Finishing Co. N. Y.
1922
1923
1924
Class B.
..
I
Alba B. Johnson
Edwin S. Stuart
Charles K. Haddon
Class
c.
H. B~ Thompson
R. L. Austin
Chas. C. Harrison
cjo Harrison & Co. Bankers
1922
1923
1924
--------------------~-------------------------------------------------------------'\('
(D,
l(
District No. 4 - Federal Reserve Bank of Cleveland
Wille_, Chairman and Federal Reserve Agent; Lewis Blair
'ililliams, Deputy Chairman, E. R.. Fancher, Governor ... )
c.
Class A.
Chess Lamberton
Robert Wardrop
0 .. N. Sams
Frankl in1 Pa.
Pittsburgh, Pa •.
Hillsboro, Ohio
V-Pres. Lamberton Natl. Bk.
Peoples Natl. Bar~
1.'iercha..'1.ts :National Bank
1922
1923
1924
Erie_, Pa.
Lexington_, Ky.
Youngstown, Ohio
Reed Mfg. Co.
Combs Lumber Co~
Brier Hill Steel Co.
192.2
J. 92.3
J.92u
Class B.
R .. P. Wright
Thomas A. Combs
John Stambaugh
~3-
District No.
DIRECTOR
4- Federal Reserve Bank of Cleveland (Cont 1 d.)
RESIDENCE
BUSINESS .AFFILIATIONS
Cleveland, Ohio
Cleveland, Ohio
Toledo, Ohio
X-3304
TERM EXPIRES
Dec. 31.
Hayden, Miller & Co.
--------------------------------------~~---
----------------------~--
Class C.
L. B. Williams
D. C. Wills
W. ·;v. Knight
)I
1922
1923
1')24
Bostwick-Braun Co.
----------------------------------------------------------------------------------District No. 5 - Federal Reserve Bank of Richmond.
(Caldwell Hardy, Chairman and Federal Reserve Agent, James A. Moncure
Deputy Chairman, George J. Seay, Governor. )
Class A...
John F. Bruton
L.. E,. Johnson
Charles E. Rieman
I'
Wilson, N. C.
Alderson, w. Va.
Baltimore, Md.
Pres. First National Bank
Pres. First National Bank
Pres. Western National Bank
Washington, D. C.
Hartsville, S. C.
Richmond, Va,
Pres .. NatL Elec. Supply Co.
Merchant and Planter
Pres. Atlantic Life Ins. Co.
Richmond, Va.
Richmond, Va.
washington, D. C.
Sec-Treas. Richmond Guano Co.
Class B.
Ed~vin C. Graham
D_ R. Coker
Edmund Strudwick
1922
1923
1924
Class C.
James A. Moncure
Caldwell Hardy
Frederic A. Delano
Receiver
----------------------------------------------------------~-------------------------
District No. 6 - Federal Reserve Bank of Atlanta.
(Joseph A .. McCord, Chairman and Federal Reserve Agent} W. H. Kettig
Deputy Chairman, M. B. Wellborn, Governor.)
l(
Class A.
Oscar Newton
P. R. Kittles
John K. Ottley
Jackson, Miss.
Sylvania, · Ga.
Atlanta, Ga.
Pres. Jackson State Natl. Bank
Pres- Natl. Bank of Sylvania
V-P Fourth National Bank
Nashville, Tenn
New Orleans., La.
Decatur, Ga.
Hartford Hosiery Co.
Pres. Kohn, Weil & Co. Inc.
Contractor and Engineer
1922
1923
1924
Class B..
W. H. Hartford
Leon C.. Simon
J. A. McCrary
1922
1923
1924
--4X-3304
District No.
6 .. Federal
R.:~Rerve
Ba.."lk of Atlanta ( Cont t d. )
TERM EXPIRES
DIRECTOR
Class
BUSINESS
RESIDENCE
Dec. 31.
PFFJLI...~TIONS
c.
~~.
H.. Kettig
Joseph .A. McCord
Lindsey Hopkins
Birmingham~
.Ala.
.AtlantaJ Ga.
Atlanta_, GaA
Sou. Rep. Crane Co.
1922
1923
1924
Investment Benker
---------------------------------~--------------------------------------------------
District No. 7 -· Federal Reserve Bank of Chicago.
(William A. Heath, Chairman an1 Federal Reserve Agent, ~fames Simpson.,
Deputy Chairman, ,James B. McDougal., Governor. )
Class A.
Chas H. McNider
E. L. Johnson
George M. Reynolds
Mason City, Iowa
Waterloo., Iowa
Chicago, Ill.
Pres. of various banks
Pres. Leavitt & Johnson Trust Co.
Pres. Con. & Commercial Natl. Bk.
1922
1-923
1924
I.'
'
Class B.
J. w. Blodgett
A. R. Erskine
A. H. Vogel
Class
Grand Rapids., Mich. Chairman & Treas. BloQgett Co.
$outh Bend, Ind.
Pres. Studebaker Company
Milwaukee, Wise.
Pres Pfister & Vogel Leather Co.
Muncie, Ind ..
Chicago, Ill.
Chicago, Ill.
Pres. Ball Bros. iJfg. Co.
1st. V-P lviarshall Field & Co.
1922
1923
1924
c.
F. C. Ball
James Simpson
Wm. A. Heath
1922
1923
1924
----------------------------------------------------------------------------------District No. 8 - Federal Reserve Bank of St. Louis.
(William McC. Martin, Chairman and Federal Reserve .Agent, John
w.
Boehne,
Deputy Chairman1 David C. Biggs, Governor.)
.1
i
Class A.
Sam A. Ziegler
John G~ Lonsdale
J. C. Utterback
Cashier; Albion Natl.
Bar~
Albion, Ill ..
St. Louis, lVlo.
Paducah., Ky.
Pres. City National. Bank
Little Rock, Ark.
Greenville, Miss.
St .. Louis, Mo.
Attorney at Law
Retired
Pres. Natl. Bank of Commerce
1922
1923
1924
Class B.
W. B. Plunkett
LeRoy Percy
Rolla Wells
Plur~ett-Jarrell
Gro. Co.
1922
1923
1924
.
,.. s
'
__ t -.
-5-
·,
X-3304
District No. B - Federal Reserve Bank of St. Louis (Cont 'd).
DIRECTOR
TERM EXPIRES
Dec. 31.
RESIDENCE
BUSINESS AFFILIATIONS
Memphis, Tenn.
Evansville, Ind.
St. Louis, Mo.
Editor "Commercial .Appeal"
:Retired Capitalist
Class C.
c. P. J. Mooney
John W. Boehne ·
Wm. McC. Martin
1922
1923
1924
---------~------------------------------------------------------------------------
District No. 9 - Fede.ral Reserve Bank of Minneapolis
(John H. Rich, Chairman and Federal Re.serve Agent., Homer P.. Clark,
Deputy Chairman, R. A.. Young, Governor-)
Class .A,.
Theodore Wold
c. Bassett
Wesley C. McDowell
Minneapolis, Minn.
Aberdeen, .5. D.
Marion., N. D.
V-P Northwestern Natl. Bank
Pres. Aberdeen Natl. Bank
Pres. First National Bank ·
1922
l-923
1924
St. Paul, Minn..
Helena, Mont.
LaCrosse, Wise.
Insurance
Holter & Co. Hdwe.
-Hixon & Co. Inc •
19221
1923
1924
Lake Linden, Mich.
Minneapolis1 Minn.
St. Paul, Minn.
J.
Mining Engineer
1922
1923
1924
·Class B.
F.. .R. Bigelow
N. B. Holter
F. P.. Hixon
Class
.
c.
C. Harry Benedict
John H. Rich
Homer P.. Clark
West
Publishin~
Co.
_______ ________ _________________... ____.____________ ..., _____________________________ _
._.
..,.
District No. 10 - Federal Reserve Bank of Kansas City
(Asa E_ Ramsay, Chairman and Federal Reserve Agent. Heber Hord,
__ peputy 'Chairman., .J.
z..
Miller# Jr • ., Governor.)
Class A.
W. J .. Bailey
E. E. Mullaney
J. C. Mitchell
Atchison., Kansas
Hill City, Kanaas.
.Denver, Colorado
Pres. Exchange Natl. Bank
Pres. Farmers & Merchants Bk.
Pres. Denver National Bank
1922
Kansas City, Mo.
Muskogee, Okla.
Omaha, Nebr.
V-P Drumm Comm. Co.
Retired
Byrne & Hammer Dry Goods Co.
1922
1923
1924
1~23
1924
Class B.
M. L. McClure
Harry W, Gibson
T. c. Byrne
-6District No. 10- Federal Reserve
DIRECTOR
of Kansas City (dont'd.)
X-3304
TERM EXPIRES
Dec .. 31.
RESIDENCE
BUSINESS AFFILIATlONS
Kansas CityJ Mo.
Kansas City, Mo.
Central City, Nebr.
V-P Kansas City Life Ins.Co.
--------------------~.
Class
Bal~
c..
F. W. Fleming
A sa E, Ramsay
Heber Hord
Stockman-Farmer
1922
1923
1924
----------·-----------------------------------------------------------------------District No. 11 - Federal Reserve Bank of Dallas.
(W. F. Ramsey, Chairman and Federal Reserve Agent, W. B. Newsome,
Deputy Chair.man, B. A. McKinney 1 Governor.)
Class A.
B. .A. McKinney
Howell E. Smith
John T.. Scott
Dallas1 Texas.
McKinney 1 Texas.
Houston., Texas.
American Exchange Natl. Bk.
Cashier, First National Bank
Pres. First National Bank.
1922
1923
1924
Fort Worth, Texas.
Paris, Texas.
Wichita Falls, Tex.
Livestock Commissioner
Cotton Oil Mills
Wholesale Grain
1922
1923
1924
Abilene, Texas.
Dallas, Texas ..
Dallas,· Texas.
Wholesale Groceries.
1922
1923
1924
Class B..
Marion Sansom
J. J. Culbertson
Frank Kell
Class C.
H. 0. Wooten
Wm. F, Ramsey
W. B~ Newsome
Investl)lents
------------------------~---------------------------------------------------------
District No. 12 - Federal Reserve Bank of San Francisco.
(John Perrin, Chairman and Federal ..aeserve Agent, Walton N. Moore 1
,.Deputy Chairman, J. U. Calkins, Governor. )
Class A_
C. K. Mcintosh
John W. Baer
M. A. Buchan
San Francisco, Cal.
Pasadena, Calif.
Palo Alto, Calif ..
V-P Bank of California., N•
Pres. Union National Bank
Pres. First National Bank
Class B.
E. H. Cox.
A. B. C. Dohr.mann
Wm. T. Se snon
Madera,. Calif.
San Francisco, Cal.
San Francisco, Cal.
Pres. Weed Ltwber Co,
Pres. Dohrmann Co~~. Co.
Farmer.
Class C.
Wm. Sproule
John Perrin
Walton N. Moore
.A.,
San Francisco1 Cal. Pres. Southern Pacific Co.
San Francisco, Cal.
San: Friiw:ia.co,· Cal. ·Walton N. Moore Dry Goods Co.
1922
1923
1924
1922
1923.
1924
1922
1923
1924
X-3304a
OFFICERS AND DIRECTORS OF F.EDERflL RESERVE BRANCH B-ANKS
50
District No. 2 -Buffalo Branch of the Federal Reserve Bank of New York
(W. W. Schneckenberger, Manager)
DIRECTORS
RESIDENCE
BUSINESS AFFILIATIONS
John A. Kloepfer #
Elliott C. McDougal
Harry T. Ramsdell
Fred. J. Coe #
E. J. B~calo I
Thomas E. Lannin
w. W. Scheckenberger
Buffalo, N. Y.
n
Pres. Liberty Bank
Pres. Bank of Buffalo
Pres. Mfg. & Traders National Bank
"
Niagara Falls, N. Y. Pres. Power City Bank
Barcalo Manufacturing Company
Buffal o1 N. Y.
V-P Lincoln Alliance Bank
Rochester.. N. Y.
Buffalo., N. Y.
------------------------------------------·-----~----~-----------~~-------------~--
District No. 4 - Cincinnati Branch of the Federal Reserve Bank of Cleveland
(1. · W. Manning, Manager)
Hon. Judson Har.mon
#
Chas. A. Hinsch #
W. s. Rowe
Geo. D. Crabbs
L.
W. Marming
Cincinnati, Ohio
"
"
,,
Atty. Hannon, Colston, Goldsmith
and Hea.dl,ey.
Pres. 5th-3rd National Bank
Pres. First National Bank
Philip Carey Manufacturing Company
fl
------------------------...-------------------------------------------Bank of Cleveland
....... -----------.----·District No. 4 - Pittaburgh Breach of the Federal Reserve
(George DeCamp, Manager)
Chas. W. Brown
· James D. Callery =/(
John R. McCune #
R. B. Mellon
CJeorge DeCamp
Pittsburgh, Pa.
"
"
n
"
V-P Pittsburgh Plate Glass Company
V-P Philadelphia Co. (Pittsburgh)
Pres. Union National Bank
V-P Mellon National Bank
--·-~--------------------------------------~---------------------------------------
District No. 5 -Baltimore Branch of the Federal Reserve Ba.nl·of Richmond
(Albert H. Dudley, Manager) ·
Chas. C. Homer1 Jr.
William Ingle #
ivaldo Newcomer #
Henry B. Wilcox
Albert H. Dudley
Baltimore, Md.
n
"
II
Pres. Second National Bank
Pres. Bal. timore Trust Company
Pres. National E&change Bank
V-P Merchants Mechanics National Bk.
ff
-~-~---~--~--------~-----~-----------------------------------------------~---------
District No. 6 - New Orleans Branch of the Federal Reserve Bank of Atlanta
(Marcus Walker, Manager)
P. H.. Saunders # Chrm.
New Orleans~
Mobile~ Ala
R. S. Hecht
John E. Bouden~ Jr.
F. W Foote #
..
New Orleans, La.
A. P. Bush # Dep. Chrm.
H. B. Lightcap
Leon C.. Simon
La.
"
Hattiesburg, Miss.
Jacl:son, Miss.
New Orleans, La.
Pres. Commercial Trust & Savgs. Bk.
Wholesale Grocer
Pres. Hibernia Bank & Trust Co.
Pres. Whitney Central National Bk.
V-P First National Bank
· Capitalist and Farmer
Pres. Kobn Weil & Company
X-3304a
-2-
District No. 6 - Birmingham Branch of the Federal Reserve Bank of Atlanta
(A. E. Walker, Manager)
DIRECTOR
RESIDENCE
BUSINESS AFFILIATIONS
:. H. Xettig # Chrm.
Oscar Wells if
Birmingham. llla.
Southern Rep. Crane Company
Pres. First National Bank
V-P Birmingham Trust & Savings Co.
Pres. American Trust & Savings Bank
Pres. Traders National Bank
·r. o.
"
"
~ith
II
·,;. Vi. Cra:ii for~
John H. Frye
fl
-----------------------------------------------------------------------------------District No. 6 - Jacksonville Branch of the Federal Reserve Bank of Atlanta
(George R. DeSaussure~ Manager)
John C. Co~per # Chrm.
Edvvard ~i. Lane
Bion H, Barnett
Giles L. Wilson
Fulton Saussy #
Jacksonville} Fla.
"
"
II
"
Attorney at Lavi
Pres. Atlantic National Bank
Pres. Barnett National Bank
V-P Florida National Bank
F. Saussy Company
-----------------------------------------------------------------------------------District No. 6 - Nashville Branch of the Federal Reserve Bank of Atlanta
(J. B. lidcNamara, Manager)
W. H. Hartford # Chrm.
Jas. E. Caldwell
E. A. Lindsey
T. A. Embry
Paul M. Davis #
Nashville, Tenn.
n
ff
Winchester, Tenn~
Nashville, Tenn.
Hartford Hosiery Company
Pres. 4th & lst National Bank
Pres. Tenn. Hermitage National Bank
Pres. Farmers National Bank
V-P American National Bank
--------------~---------~--~--------------------------------------------------------
District No. 7 - Detroit Branch of the Federal Reserve Bank of Chicago
(Robert B. Locke, Manager)
'ohn Ballantyne #
'- ,~ory W. Clark
·ulius H. Haas
~harles H. Hodges #
:lobert B. Locke
District No. 8 -
George W. Norton
F. M. Sackett #
W. C. Montgomery
Embry L. Swearingen I
W. P. Kincheloe
Detroit, Mich.
"
II
11
Louisv~le Br~eh
(W. P.
Louhville~
Pres.
Pres.
Pres.
Pres.
Merohants National Bank
lst & Old netroit Natl. Bank
Wayne County & Home Savgs. Bk.
Detroit Lubricator Company
of the Federal Reserve Bank of St. Louis
Kincheloe~ Manager)
Ky.
tl
Elizabethto>m, Ky.
Louisville, ICy.
Capitalist
Pree. Pioneer Coal Company
V-P Hardin National Bank
Pres. First National Bank
r:~
(')
<._),..-;.,
X-3304a
-3-
District No. 8 - Memphis Branch of the Federal Reserve Bank of St. Louis
(John J. Heflin, Manager)
DIRECTOR
RESIDENCE
R. B. Snowden
·Memphi~,
John D. McDowell
T. K Riddick #
..
s. Ep Ragland #
John J. Heflin
BUSINESS AFFILIATIONS
Tenn.
II
II
"
V-P Bank of Commerce & Trust Co.
V-P Union & Planters Bank & Trust Co.
.Attorney
Pres. Central State National Bank
---------------------------------------·---------------------------------------------District No. g - Little Rock Branch of the Federal Reserve Bank of St. Louis
(A~
J. E.. England,. Jr.
Moorhead Wright #
George w Rogers #
..
C• .r,, Pratt
.A. F~ Bailey
F. Bailey,
Little Rock1 Ark.
ff
II
tl
~anager)
Pres • .American National Bank
Pres .. Union Trust Company
V-P Bank of Commerce
Pres.. Exchange NationaJ. Bank
----~------------------------------------------------------------------------------
District No •. 9 - Helena Branch of the Federal Reserve Bank of Minneapolis
( 0. A. Carl son, Manager)
Kaufman
Chas. J. Kelly
H. Wv Rowley
L~ M. Ford if
Thomas Marlow #
R,. O.
Helena, Mont.
Butte, Mont.
Billings, Mont.
Great Falls, 1\iont.
Helena, Mont.
, Union Bank and Trust Company
Hanson Packing Company
Director and Stockholder
Banker
National Bank of Montana
--------------------------·--------------------------------------------------------District No. 10 - Denver Branch of the Federal Reserve Bank of Kansas City
(C..
John livans #
Alva B~ Adams #
c. C. Parks
A~ c.. Foster
C. A,. Burkhardt
A. Burkhardt, Manager)
Denver., Colorado
Pueblo, Colorado
·Denver, Colorado
n
Pres. International Trust Company
Attorney
V-P First National Bank
V-P United States National Bank
-----------------------------------------------------------------·-----------------District No. 10 - Omaha Branch of the Federal Reserve Bank of Kansas City
(L. H. Earhart, Manager)
P. L. Hall #
o_ Marnell #
w J. Coad
.
Geo. E. Abbott
t_ H. Earhart
R.
Lincoln, Nebr.
Nebr. City, Nebr.
Omaha, Nebr ..
Cheyenne, Wyo.
·
Pres. Central National Bank
Cashier~ Merchants National Bank
Pres. Packers National Bank
Pres. First National Bank
----------------------------------------------------------------------------------District No. lO - Oklahoma City Branch of the Federal Reserve Bank of
Kansas City (C_ E. Daniel, Manager)
William Mee #
E. K. Thurmond #
Dorset Carter
T. P. Martin Jr.
C. E~ Daniel
Oklahoma City, Okla.
"
"
"
·
Pres. Security National Bank
Banker
Pres.. Celine Oil Company
Pres. Okla. Stock Yards Natl. Bank
X-3304a
-4District No .. "11 - El Paso Branch of' the Federal Reserve Bank of Dallas
(W. c. Weiss, Manager)
DIRECTOR
RESIDENCE
BUSINESS AFFILiftTIONS
w. .
El Paso, Texas
t" ~"1'1
c._;t.)
Attorney at Lmv·
Investments
Turney #
P. Coles #
E. M. Hurd
u.. s.. Stewart
w_ c. Weiss
n
~~
A~
It
"
Pres. City National Bank
"
----------------------------------------------------------------------------------District No. l l - Houston Branch of the Federal Reserve Bank of oallas
{Floyd Ikard, Manager)
R.. M. Farrar #
J.
J.
na•is #
Frank Andrews
Guy M. Bry,.:
E, F. Gossett
Houston, Teg_as
Galveston, texas
Houston, Texas
Pres. National Bank of Commerce
Pres. S, Texas St. Bank
:t.a.vyer
V-P LU!llbermans National Bank
II
---------------·-----~--------------------------------·~-----·---·-----------------
District No. 12 - Portland Branch of the Federal aeserve Bank of
San Francisco, Calif. (Frederick Green«ood, Mar~ger)
Edward Cookingham
J, c. Ainsworth
Nathan Straus #
Jos. N. Teal #
Frederick Greenwood
Portland, Oregon
"
Pres. Ladd & Tilton Bank
Pres. United States National Bank
Gen. Mgr_ Fleischner, Mayer & Co.
Pres. Teal 1 Minor & Winfree Co. ·
n
"
n
~---~-------------------------------------------------------------------~---------
District No. 12 - Seattle Branch of the Federal Reserve Bank of San Francisco
{C. R. Shaw, Manager)
F.. Backus
M A. Arnold
....
Chas. H. Clarke #
Chas. E. Peabody #
M..
C. R. Shaw
Pres.
Pres.
Pres.
Chrm.
Seattle, wash.
"
"
"
"
National Bank of Commerce
First National Bank
Kelly Clarke Company
Puget Sound Navigation Co.
---~---~~----------~-------------~--·-----·------~---------~-------------------~---
District No. 12 - Spokane Branch of the Federal Reser.ve Bank of San Francisco
(W. L. Partnet, Manager)
.
·
R. L .. Rutter
Peter McGregor #
Spokane 1 Wash.
Hooper, Wash.
G. I. Toevs I
Spokane1 Wash.
W. L. Partner
Pres. Spokane & East. Trust Co.
It
·
Pres.
McGregor Land
. • .. : ...
& Livestock Company.
V-P Centennial Mill Company
------------·~~-----------------~--·--------------------------------------------·--
District No. 12 - Salt Lake City Branch of the Federal Reserve Bank of
San Francieco (R. B. Motherwell# Manager)
L~
H. Farnsworth
Salt Lake City, Utah
Chap in A. Day
Ogden, Utah
Salt Lake City, Utah
G. G. Wright #
Laf~yette Hanchett #
"
R, B. Motherwell
..
Chairman, Walker Brothers~ Bankers
Pres. Ogden Portland Cement Co.
Gen. Mgr. Con. Wagon & Machinery Co.
Pres. Utah Power & ~ight Company
t-. ··"
~-/·u:
/
X-3304a
-5District No. 12 - Los Angeles Branch of the Federal Reserve Bank of
San Francisco
tc. J. Shepherd, Llianager)
DIRECTOR
RESIDENCE
BUSINESS AFFILIATIONS
A. J. Waters
J. F. Sartori
Los Angeles, Calif
Henry M. Robinson #
1 .. B. Newton #
C.. J.. Shepherd
Pasadena, Calif •
Los Angeles, Calif.
Pres. Citizens National Bank
Pres. Security Trust and
Savings Bank
Pres. First National Bank
Retired
It
II
# Appointed by Board
Corrected to January 21, 1922.
.
FEDERAL RESERVE BOARD
WASHINGTON
.<--: r-.._;d
X-3305
January 20, 1922.
SUBJECT:
Expense Main Line, Leased Wire System, December, 1921.
Dear Sir:
Enclosed herewith you will find two mimeograph
statements X3305a and X-3305b, covering in detail o~erations
of t:r.e main line, Leased Wire System, during the month of
December, 1921.
Please credit the amount payable by your bank in the
.:::eneral account, Treasurer U. S., on your books, and issue
C/D Form 1, National Banks, for account of "Salaries and Expenses,
Federal Reserve Board, Sjecial Fund", Leased Wire System, sending
du~licate C/D to Federal Reserve Board.
Very truly yours,
Fiscal Agent.
Enclosures.
TO GOVERNOBS OF ALL BANKS EXCE 0 T CFICPC'.O.
f
•
X-3305a
REPOBT SftOWING CLASSIFICATION ANI' NOPJJJ3EI1' OF l:"ORDS
TRI'NSMITTED OVER ~trAIN LINE OF 'YiiE FEDERAL BS3ERVE
LEt, SET' WIRE SYSTEM FOR THE \1'0NTH OF DECEMPEB, 1921.
From
Bank Business
Per cent of
Total Bank
Business(*)
Treasury
Dept.
Business
War
Finance Corp.
Business
Total
------------------------------------------------------------- •-----------------·52 084
81
7,570
Boston
New York
Philadel?hia
Cleveland
Richmond
.Atlanta
Chicago
St. Louis
Minnea1J01 is
Kansas City
Dallas
San Francisco
45,333
187,316
58,813
90,398
80,009
89,128
143,500
8 5, 7Jl
46,003
104,263
85,379
J&U3_~
Total F. R.
Banks
Washington
1' 205,185
271,298
Grand Total
3.76
15. 5~·
4.38
7.50
6.64
7.40
11.94
7.11
3.82
8.65
7.08
1.,5. 68
100.00
so.o4%
20~
81
6,804
7,625
3,066
2,878
18,537
14,989
2,204
- 660
~-
124,342
129,037
64,838
29,860
1.394,365
450,195
263,379
1,476,483
·Per cent of total
,..;
202,549
66,689
101,872
94,588
108,234
157.334
99,623
69,403
130,232
93.936
216,916
104,698
1,844,560
14,320
7.876
11,393
7' 775
11,481
10,362
11
otl4
'
4,863
10,980
6,353
14.28%
Bank Business
Treasury
1,476,483 words or 84.86%
n
15.142b
263,379
"
TOTAL
'•
1,739,862
( *) These
100.00%
~ercentages used in calculating the
,.,ro rata share of leased wir"l ex·;enses as shO'I\1!1
on the accom'anying statement (X-3254b).
FEDERAL RESERVE BOAR~
wnSHINGTON, D. c.
JANl~FY
20, 1922.
913
5.68%
• "'
t:-·
•
':J.J
RE~ORT
0]' EXPENSE
MAIN LIN!£
FEDERAL PSSEFVE LE~SED WIRE SYSTEr,n DECE~il9E'R,
1921.
X-3305b
------------------~~~-----------------------------------------------------------------------------------------------
Extra
c··)er;;.torsl
8co.laries
Name of Bank
()~)era tors 1 Com~:len-' Wire
Overtime
sation
~ental
Total
Expense
0 ro rata
Sh '3re of
Total
Ex"9ense
Credits
Payable to
Fed3ral
Rese:c·ve
Board
-------------------------------------------------------------------------------------------------------------------$
240.00
676.03
$
240.00
$
$ 240.00
Boston
$
New York
Ph.ilad 8 h1h i a
Clev3land
Fiichrrond
Atl-:1nta
Chica~o
790.17
225.00
524.00
300.00
240.00
(#) 1+,915.52
St. Louis
6.00
]00.00
Minn·:>3..,..,olis
Kansas City
Dallas
San Fr""ncisco
299.01
54.00
85.31
509 ' 50
210,00
275 .. 00
332.76
170.00
493.. 75
$
( *) 3 • 23
$
l,Ot:9.13
279.00
609.31
312.73
450.00
4,921. 52
300.00
275.00
332.76
170.00
493· 75
916.03
3' 785.95
1,188.89
l,g27.20
1,£.17.68
l·rso2.8J
2,908.89
1, 732.18
930.65
2,107.36
1,724.87
3,620,05
1,089,18
279.00
609.31
812.73
450.00
4, 921.52
300.00
275.00
332.76
170.00
493.75
2, 696.77
909.39
1,217.89
8')4.95
1,352.83
( ~ *) 2 , 01 2· 63
l, L:j2,18
655.65
1, 774.60
1,554.87
3,326.30
16,082.90
Federal Res. Board
---------------------------------~-----------------------------------------------------------------------------~-----
$ 3,806.20
Total
( #)
(&)
( *)
(**)
(a)
$ 6.00 $1,157.82 $16,036.13 $26,056.15 $24,362.58
1,693. 57 a
$24,362. 58
Includes S3.1a.ries Washington Onerators.
Amount T"'imburseable to Chicago.
Cut in Wastn. on Bic:h-J3a1 to Circuit.
Credit
Rec~ived
$1,693.57
from War Finance Corp, covering business for month of November.
FED~B~L BRS~RVE
Jf,l\lTT~FY
ROARn,
D. C.
2'1, 1922.
~AS~INGTON,
$9,973.25
$ 16,401.96
( &)2, 012.63
$ 14,339.33
FEDERAL RES'E!RVE BOARD.
Got·Il
X-3306
SETTLEMENT FUND
ot transactions for "Period ending January 19 1922.
Federa.l
Balance last
Gold
Gold
Reserve
statement
Bank of
Withdrawals
Deposits
Jsn. 12, 1922.
~T':'ilma!Y
Boston
New York
$ 24,133.044.17 $
~iladel-ohia
Cleveland
:Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
136,304,570.25
59.968,~13'8.17
1,025,250.00 $
2,237,993·55
1,220,720.92
2,049,674.77
1,341,351.73
836,014.58
1,263,457. 51
86o,333·70
466,027.68
790,414.04
877~121 .. 38
1,094,778.26
14,063,138.12 l $
-
7,078,100 .. 00
345,500.00
663.65
1,007,100.00
D. C.
20, 1922.
Washi~gton,
( CONF_ID:!!."NTlAL}
Januar;r
I
Aggregate
Aggregate
TRANSFERS
deposits and
withdrawals
transfers from -------·---------·----------------and transfer•
Credits
Debits
to A~ren t I s fund
Alien t' s fund
1,025.,250.00 $
$ 2,000,000.00 $
$
3,000,000.00
12,000,000.00
7,078,100.00
32,237.993-55
1,000,000.00
1,000,000.. 00
345,500.00
6,220,.720.92
663 .. 65
2,049,6'74.77
2,000,000.00
1,.007,100.. 00
1,341,351.73
...
2,000,000 .. 00
3 ,836,014..58
1,000,000.00
461,000.00
l,263,457~51
1,000,000.00
700.00
860,333.. 70
2,000,000.00
500,000.00
466,027.68
...
2,000.500.00
790,414~04
1,000,000.00.
. 2, 250,000.00
877,121.38
2,.000,000.00
6.643,422.29
11,094,778 .. 26
I$ 62,o63,138.12 I$ 20,286,985.94 I$ 15,ooo,ooo .. oo l$ 15,ooo,ooo..:oo
;
-
-
-
46, 4llo, 67-98
17,973,618 .. 77
12,743,865.60
87,4o4,J80.29
461,000.00
26,261,985.57
700.00
25,628,756.43
500,000.00
31,702,042.43
2,000,500.00
7.090,204.30
1.-500,000.00
34,298,8o6 .. 17
4, 000 t 14-22.. 29
San Fr.anciaco
Total
16,893.985.94
f$ 509,950,13o.13 I$
----------~-----·--------~-----------------------------~--------------~------------------~--~------------------~~---------~---------------------Federal
Suamary of changes in ownerSettlements from January 13, 1922 to January 19, 1922
Balance in
Reserve
, ship of gold by banks through
inclusive.
fund at close
Bank of
transfers and settlements.
of business
------------~--------------------------------------------------------~----Net
Total
To-tal
Jan •. 19, 1922. --·---~-----~----------------~~~~--
-
-
-
~~------~r---~n!~b~i~t~s--~~~~De~b~1t~s~~~r-~~Cre~d~i~ts~~~~-;~~~~~~~~=:~~~~--~De~c~n~u~e~~~--~~~~Boston
$
$
1 ,331,051.8, $ 123,020,8 3.0
23,797,
.37
$
New York
~iladelPhia
Cleveland
Richmond
Atlanta
Chicago
6,586,219.15
2,1~2,914.39
561,717.25
24.566,420.00
St. Louis
Minneapolis
Kansas Cit,
Dallas
J'ranclsco
Total
($ 33,907,2n.39
I$
392,275,7.17.98
126,427,742.77
92,817,824.50
92,462,623.03
36,323,381.75
197,622,620.33
83,873,671.60
25,213,089.41
65,158,020.86
4<>,896,558.89
48 l 878.10
1,322,494,181.. 06
I$
385,689,49&.23
124,234,828.38
101,518,102.81
91,900,905.78
42,274,542.50
173,056,200.33
86,976,885.73
26,771,551.25
74,14o, 746.27
42,463,198.49
446 8 .. 2
l,322,494.,18l.o6
95,558,456.95
51,900,252.86
53,091,1)5.17
8,700,278.31
3,103,214.13
1.558,461.84
8,382, 725.41
1,566,639.60
1
, 80 .. 15
33,907,27~.39
-
19,077,6~.79
5,951,160.75
f$
15,586,219.75
2,192,914.39
f$
16,859,011.77
63,035.502.78
29,505,566.. 00
29,221,190.59
41,294,853.80
11,029,722,.52
33,802,430.35
466,173,977.95
.
23,566,42o.oo
I$
~,
~~,..,~:y
E :0 E R Jf L
RE S E R VE
of transactions for period endin~ Januar :r 19, 1922.
:<L~ert.l
Bale."'lce last
Gold
Gold
Reserve
statement
··
Agent at
Jan. 12, 1922.
Withdrawals
Deposits
150,000,000
t $ 1o,ooo,ooo It
I$
1
351,ooo,ooo
1
I
"'.1!1ilaC.elphia
135,389,260
s.,ooo,ooo
C].eveland
14o,ooo,ooo
tJ
:~ ~
='-.3306 a
-· ~· :. . ".: . ~: -.-.cyn!' D. C-.
,~"'-il ..• ~('' 19~....
1
1
Wi~~drawals
I$ 1o,ooo,ooo.
., $
TotcJ.-----~.--
Total
Deposits
through
transfers
from bank
.Withdrawals
for
transfers
to bank
It
I
]'
·{ COlJFTrENT:At)
l
:tTt1w York
A G E :N '1' 5 1
3o,ooo,ooo I
;,ooo,ooo 1
Deposlts
I$
I
I$
3o,ooo,ooo 1
5,ooo,ooo
-
1
34,000,000
4,000,000
::'l:.icago
302,644,500
10,000,000
10,000,000
57,100,000
2,000.,000
J
5,000,000
Ka..'"lsas City
j
25,360,000
Dallas
-1
..
2,000,000
2,000,000
750,000
205,445.000
2,643,000
j$ 1,443,667,760
I$
36,000,000
Jan. 19.
1922~-
llK>, 000,000
381,000,000
f
lO,QOO,OOO
j$ 19,400,000 f$ 3,393,000 I$ 48,000,000
39,393,000
302,644.5oo
57,500,000
1,484,000
10,000,000
2,643,000
I$
38,ooo,ooo
25,36o,ooo
·J .
750,000
2B,295,ooo
9,200,000
2.,000,000
2,000,000
2,234.000
San Francisco
Total
3,000,000
9,200,000
I
1
4,ooo.ooo 1 8,.ooo,ooo 1 •
1o,ooo,ooo I 1o,ooo,ooo I
2,4oo,ooo
2,000,000
2,4oo,oo6
·
b~s~ness
135,389.26o
5,000,000
3,000,000 .,
·~ ::lP"il ta
Minnea-polis
a·!;
cl--.-se of
l4o,ooo.,ooo
3,000,000
:3t. LoUi!i
. i;,..~~•• .::e
I$
212,802,000
67,4oO,OOO
j$1,471,674,760
60
\.
FEDERAL RESERVE BOARD
WASHINGTON
X-3307
January
SUBJECT:
~~
192~.
Foreign and Intarnational Banking lnstitutionsj
Report of Condition as at the Close of Business,
becember 31 1 1921.
Dear Sir:
Under authority of the agreement entered into by your
corporation with the Federal Reserve Board1 you are hereby respectf.ully requested to furnish the Board with a report of condition1 as
at the close of business December 31, 1921, giving in detail all
assets and liabilities of your corporation and the data asked for
in the accompanying memorandum.
,
Kindly arrange to file the report of your Head Office ,
and domestic branches combined as soon as possible. Separate re- ·
ports of foreign br~1ches and affiliated banks should be sent as
soon as they are received by you. It will be appreciated if, after
the reports have been received from all of your foreign branches
and affiliated banks, you will have prepared a consolidated statement of your corporation to be eent to the Board.
While the Board has ruled that no specific reserve has to
be carried by foreign branches or affiliated institutions of American
banking corporations against deposits abroad, it 1 nevertheless,
wishes to be ad.vised as to the average reserve carried by all such
branches and affiliated institutions of corporations vvhich are operating under agreement with the Fed.eral Reserve Board.
You are,
therefore, requested to have each of your foreign branches, agencies,
offices and subsidiary banks furnish you, for transmission to the
Board, a report of the average reserve carrieq during the month of 1ecember,l92l, against deposit liabilities in the fonn shown in the
accompanying memorandum.
Kindly acknowledge receipt.
Very truly fOurs,
(Enclosure
To be sent to Special List.
G o v e r n o r.
REPORT OF CONDITION TO FEDERAL
R~SF.RVE BOARD.
The following information is desired in connaction with the report of
condition to be made as at close of business December 31, 1921~
.A. HE.PD OFFICE
AND DOMESTIC BH.ANCP.ES COI.fBINED
1. Detailed balance sheet show:mg all assets and liabilicies1 including
contingent liabilities. It is requested that the items for which detailed schedules are requested below be shown as separate accounts on
the balance sheet.
2. Amount of loans
(a)
(b)
(c)
and discounts, divided: Sec·Llred - U..1secured
Demand
Time
Overdrafts and other advro1ces
Total
3. Detailed
list of investments (including stock of affiliated institutions) showin€>:
(a) Issuing Government or corporation
(b) Interest rate
(c) Maturity
(d) Par value
(e) Book value
(f) Approximate market value -
4. <A-mership
of stock of affiliated institutions:
(a) Per cent o~ned by yourselves
(b) Per cent owned by foreign Governments
(c) Per cent owned by individuals and corporatio11s
havin~. balances due to your coq,oration
1
with amount for each bank separately:
(a) Government bank
(b) Domestic banks
(c) Foreign banks
(d} Foreign branches 1 agencies and affiliated institutions
5.. List of banks, branchas etc.
6.List of banks 1 branches 1 etc. having balances due from your cerporation
with amount for each bank separately:
(a) Domestic banks
(b) Foreign banks
(c) Foreign branches 1 agencies and affiliated· institutions
7. Bills payable:
{a) Payable to:
(b) Amount
(c) Interest rate
( J.) iv'.atur i ty
(e) Collateral - give list
~
-::::::-
X-})O(a
6. Redisccunts:
(a) .Amount
{b) Maturity
(c) Rate
(d) vii th vhom
(e) Secured or unsecured - if secured, givedetailed infcrmation
regardir.tg security.
9. Reserve Statement:
Deposits in the United States:
(a) Het demand derosits (after dedllcting uncolle.cted demanJ iterr;s
payable within United States - eAchanges)
(b) Time deposits
(c) Reserve held:
Cash on hand
Bank balances__ _ ___
Total
Per cent of reserve 10 . .Acceptances - limitations:
(a) Acceptances outstanding:
l. Maturing in 30 days or less
2. Maturing after 30 days
Total outstanding acceptances.
(b) Capital and surplus
Excess a over Q
$.
$
$
$_____ _
$
Acceptances secured
Acceptances unsecured
Amount required to be secured under
agreernen t wvi th Federal Reserve Board
(Give list of security held as required above
giving description ar"d approximate amolillt)
(c) List of dra~~ers of drafts accepted, with total
aggregate liability in e..-.cess of 10 per cent
of capital and surplus.
Address
Business
Aggretate Liability
$
d·
~)
$
Security* cr Guaranty
(d) Reserve against outstanding acceptances:
Required: 15% against all acceptances outstanding which
mature in 30 days or lessj and
)'% against all acceptances outstanding which
mature in more than 30 days.
l. Cash ( **)
2. Bank balances (*•)
3- Bankers acceptances
4. Securities approved by Federal Reserve
Board (List in detail) ___________________
Total
( *) If security 1 state what the security consists of 1 g1v1ng, quantity and
approximate value; if a bank guarar~t~~ give name andlocation of bank.
( **) Tnese ano;m"Ls. of co'urse. t"ust not 1· -r·,cl,lde th ose appear1ng ln 3- ( c ) as
·
· o
•
•
u
v
part of your reserve against deposits.
-3- -
X-3307 a
11. General limitations:
Per cent deposits and acceptances outstanding to capital
and surplus
--------------------
l2. List of officers and
directors~
13. List of stocl<holders, showing nu."llber of shares O'Nned by each.
14. List of branches, sub-branches, agencies. offices and affiliated
institutions - date of
15~
13.
o~ening
of each and the location.
Date of last examination or audit - by whom made.
l<'()'fl~IGN
B_!UINCB'ES 1 AGBNCIES ANT'l SUBSIT'IA'FlY BANKS AN!l C0BPORA'riONS.
1. Balance sheet to be furnished by each, showing in detail all assets and
liabilities, including contingent liabilities. It is requested that
the items for which detailed schedules are requested below be sho'lvn
as separate accounts on the balance sheet.
2. Amount of loans
(a)
(b)
(c)
and discounts, sho,IVing: Secured - Unsecured
Demand
Time
OVerdrafts and other advances
3· retailed list of investments, showing:
(a)
(b)
(c)
(d)
(e)
(f)
Issuing Government or corporation
Interest rate
Matu.ri ty
Par value
Book value
A-pproximate market value
4, List of banks having balances due to your branch with amount for each
bank separately:
(a) Government bank
(b) Banks and bankers
(c) Head Office
(d) Other branches, agencies and affiliated institutions
5-- List of banks having balances due from your branch
with amowt for each
bank separately:
(a) Banks and bankers
(b) Head Office
(c) Other branches, agencies and affiliated institutions
6. Bills
~ayable:
(a) 'Payable to
(b) Amount
(c) Interest rate
(d) "'-~aturity
(e) Collateral (Give detailed list)
••
X-3307 a
-47. Bee iscoun ts:
(a) Amount
(b) Maturity
(c) ~ith whom
(d) Bate
(e) Secured or unsecured - if secured, give detailed data
B. Deposits:
J'lollar
Equivalent
(a) Government deyosits (if secured give
list of collateral)
1. J!Grnand
2. Time
Other deposits
3. Demand
4. Tbe
Total
(b) De'Posi ts •· hc··w ;,>a;'(able:
1. Local Currency
2. Ilollar
3. Sterling
4. Other-vise - - - - - - - - - Total
9· Special Beserve Statement - average for month of June, 1921
(a) Net deposits:
1. 'Palfable in local currency
in dollars
2.
"
in sterling
3.
"
4.
IT
Oliherwise - - - - - - - - Total
(b)
Reserve~
1. Amount, if an.v, and composition required by local laws.
2. Amount held:
Amount
Per cent to
net deposits
Gold and Silver •••••• $
Local currency••.••••
Other cash ••.••.•.•••
Balance in local •••••
Govt. bank ........ .
(e) Other rese1•ve funds - - - - - - - - -
(a)
(b)
(c)
(d)
<%
'J'YtEl.l
10. nate of last examination or audit- by whom made.
NOTE: 1. Where a schedule does not refer to your corporation, plea.Se
indicate this by inserting the word "~one".
2. Re:ports for forei'?l1 branches, agencies, etc., should be in
terms of United States dolla~s, stating the rate of exchange
at which they 'Vere converted.
FEDERAL RESERVE BOARD
WASHINGTON
X-3308
January 21, 1922.
SUBJECT:
Edge Act Corporatione;
Report of Condition as at the Close of Business,
December 31. 1921.
Dear Sir:
Under the prov1s1ons of the Board's Regul~tion
K, Series of 1920, governin~ oankine corporations authorized to do forei<m l:ankin2. business under the tenns of
SectiOn 25 {a) of the Fed~ra1 Reserve Act, you are her~by
res?ectfully re~uested to furnish the Board with a report
of condition, as at the close of business Dece~ber 31,
1921, ?ivin~ in detail all assets and liabilities of your
corporation and the data asked for in the accorr:panying
menorandum.
Kindly acknowledge receipt.
Very truly yours,
G o v e r n o r.
Enclosure.
TO EDGE .L'CT CORPOR!'T'IONS.
•
REPOR~
OF CONDI~ION ~0 FEDER~L
:S 0/IRD
- - - - - - - - - RESERVE_;::;__;;.c..__ _ _ _ __
-
The following information is desired in connection
with the report of condition to be made as
at close of business Decemter 31, 1921.
1~
.
Detailed balance sheet showin? all assets an~ liacilities, incluiing
contingent lia"bilities. It is requested that the iterr.s for which detailed schedules are req,ues ted "be low l::e sho·JVn as sep~rate accounts on
the talance sheet •
2.
Amount of loans and discounts, divided:
(a) Demand
{1:) Time
(c) Overdrafts and other advances
Total
~-
Detailed
(a)
(b)
(c)
(d)
(e)
(f)
4.
List of banks having balances due to your corporation with amcunt
for each bank separately:
(a) Government bank
(b) Domes tic c anks
(c) Foreign banks
5·
List of banks having balances :iue from your corporation with
arr.ount for each bank separately:
(a.) Domes tic banks
(b) Foreign banks
6.
Bills payable:
(a) Payable to:
(b) P.mount
(c) Interest rate
(d) 1-~Taturity
·(e) Collateral - give list
1·
Rediscounts:
(a) ..Amount
(b) Maturity
(c) Rate
(d) With whom
(e) secured or unsecured - if secured, give detailed information
regarding security.
Secured- Unsecured
list of.investments, sho7nng:
Issuing Government or corporation
Interest rate
Maturity
Par value
:Book v81ue
.Approximate market value -
X-~3308a
2 8.
Reserve Staterr.ent:
Deposits in the United States:
(a) Net demand deposits (after deducting uncollected demand
i terns payable ·vi thin United States - excbanges)
(b) Time deposits
(c) Reserve held:
Cash on hand
Eank "balances _______
Total
Per cent of reserve •
9·
~cceptances- limitations:
(a) Accepta..J.ces outs tandint,:
1. W!aturine in 30 days or less
2. N'1aturing after 30 days.
Total outstandin~ acceptances.
(b) C?pi tal and surplus
Excess 2 over Q_
Acceptances secured
fleceptsnces unsecured
.Amount req_uired to be secured under
agreeirlent with Federal Reserve :Eoard
(Give list of security held as re~uired
acove givin; description and approximate arrount)
(c) List of drawers of drafts accepted, ·Ni th
total ag£regate liability in excess of
10 per cent of capital and surplus •
.Address
Eusiness
.Aggregate Liatility
$
$_ _ _ _ __
$
$._ _ _ _ __
$
$
$
$
Security* or Guaranty
(d) Reserve against outstandin€ acceptances!
Required: 15% against all acceptances outstandin;:: ·~vhich
mature in 30 days or less; and
3% against all acceptances outs tand.in~ which
mature in rr.ore than 30 days.
1. Cash (**)
2. Eank balances ( **)
3· Eankers acceptances
4. Securities approved by Federal Reserve
Eoard (List in detail)
Total
(*)
If security, state what the security consists of, :1v1n; quantity
and approximate value; if a bank guaranty, give na'·ce and location
of bank.
(**) These amounts 1 of course, Y'iUst not include those ap}'earing in 8-(c)
as part of your reserve agr::oinst deposits.
- 3-
X-3308a
CB
10.
General Limitations:
Per cent deJ?OSits ani acce-pt31lces outstanding to capital
and surplus _________________________________________
11.
List of officers and directors.
12.
List of stockholders, showing nurr:ber of shares owned by each.
13. Date of last examination or a:tdit-
by whom made.
,.
GOLD
r per_1_o~din_g January 26
Bala."'lce l a.st
Gold
..
E tatemen t
Jan. 19, 1'122.
Withdrawals
§l.~"':;j!.,y~_!ra.a'1Sac_J;icn_s fc
Fede.:-cl
Res<:l.'Ve
Bank
ot
Boston
New York
Pb.ilad.el nhia
Clevele.nd
Ricl:unond
.A-tlanta
Chicago
St. Louis
Minneapolis
$ 23, 797.f:-05-37
95,550 ,lr 56.95
51,900, c: 52~86
53,091, ~·~55~ 17
19,077,( ~9. 79
16,859,011 .. 77
63r035,~ J2.78
29,505.:.56.00
29,221,1 90.59
Kansas City
~1,294,E 53.80
DalJ.a.s
11,029 ;; 22.. 52
Sen Francisco · 33,80291.-30.35
--~ -·- ··--~--....4Total
I$
468,173,977~95
$
j$
FEDERAL RESERVE BOARD
SETTLEMENT FUND
1922.
Gold
De-posits
981+ ·~ 703. ~ $
3,194,500.
1,357,83Llg
2,355J827.35..
1,812,423.67
1,455,827. 75"
1, 51+9 ,285.35'
825,6c0.07
756,420.65
815,023.76.
968,959·71
1,227 ,843-69..
17,304,247.09 I$
Aggregate
wi thdrawal•
and transfers
to ARent's t'und
a38,000.00 $
2, 70,.200.00 .
9,000,801.00
1, 700.. 00
5,537,000.00
201,4oO.OO
6,015,700.00
2,000,223.25
3,000,300.00
6,001,200.00
2,020,000 .. 00
13,502,500.00
so,o89,024.25 I$
X-3309
{CONFIDENTIAL)
Aggregate
deposits ~d
transfers from
Ajilen t 1 s fund
984-, 703.0a $
3,194,500.9
1,357,831.12
2,355,827.35
1,812,423.67
5,455,827.75
1,549,285.35
5,825,6o0.07
756,420.65
815,023-76
968,9~9-71
6, 227 ,8:·-3.69
31,304,247.09
f$
We,sh ington, D. C.
Jarm&rl 21 1 1922.
TRANSFERS
--------------------------------~Credits
Debits
-
lO,a38,000.00 $ 7,000,000.00 $
12,000,000.00
2, 70,200.00
2,000,000.00
9,000,801.00
3,000,000.00
1,700.00
4,000,000.00
5. 537,000.00
2,000,000.00
201,400.00
5,000,000.00
6,015,700.00
2,000,223.25
2,000,000.00
3,000,300.. 00
6,001,.200.00
1,ooo,ooo.oo
2,020,000.00
20,247,000.00
66,833,524.25 f$ 19,ooo,ooo.oo I$ 19~ooo,ooo.oo
-
I
-
-
---------'"!'1'----------------·--------------------------------------------------------·----------·-------------~-------------------------------------.-.-
Federal
Reserve
Bank of
f~t~lements f~om
--------------------------------------------------~--------------------------
Debit"
l--i7i38~·K76.o2 $
-
llhila.de11'hia
84, 89,763.31
.118. 64 7t 200.23
42,386,738.90
179,886,858.11
90,250,176 .. 04
24,799.918.62
67,278,25z.42
41,326,19 .. 87
2,3~8,903.53
-
709,265 .. 14
4,803,387.48
-
I$
2.. 507,247.89
16.~6~ ,q61 .. 26
4o,696,911.51
~q.628.287.47
1$
Total
96,770~919.15 $
120,~09,610.63
-
.Atlanta.
Total
Debits
338,908,008 .. 35
12.053,270.19
Cleveland
l.Uchmcnd
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
Balance i::a
fund at close
of business
Jan. 26, 1922.
inolu.~ive.
Nat
Boston
New York
January 20, 1522 to January 26, 1922
1,264,881,955.10
Credits
95,032,043.13 $
358,862,353.47
108,456,t6o.44
96,107~ 95-32
116,328,296.70
49,630,688.21
180,780.,181.95
89,54o,910.90
19,996,531.14
68,265,613.65
38,818,948.98
4,.062. 326.. 21
1$. 1,.264,s81,955.. to 1$
Net
Credits
19,954,350.12
11,617.932.01
987,356.23
-
$
7,243,949.31
893,323.84
4<l,696,911.51
I
SUll'.l!IlS.ry of changes in owne~
ship of gold by banks through
transfers and settlements.
-----------~--------------------~Inc Tease
Decrease
24,412,o2b.32 $ 8,738,876.02 $
7.954 . 350.12
102,788,506.13
10,053,270.19
49,439 t 952.55
14,617,932.\)1
65.355,539.8
1,681,096.47
24,483,322.59
9,243,.949.31
20,848,533.33
5,893.323.84
~-395,241.27
709,265.14
. 2 ,970,924.o4
2,803,387.48
28,661,682.46
987 ,356.2)
4 7.46S,386.27
.
1,rp7,247.89
10,573,514.92
. 16,565,961 .. 26
31,255,625.40
503,703,255.11 1$ ij{),J78,oo7.9s.1 $ 4o,378~7.9s
-
1$
-
_,
-
·~
··•
F E D E R A L
A G E N T S'
R E S E R V E
F U ND
~'8
Sumna~y of transactions for neriod ending Janua.r. 26 lq22.
Fe:deral
Balance last
Gold
Gold
Reserve
statement
Ap:ent at
Wi thdrawa.~s.
Jan. 19, 1922.
Deposits
~oston
New York
I$
I
140, ()00. 000
~~
I
for
transfers
to bank
I
'Philadelphia.
135,389,260
Cleveland.
140,000,000
28,295,000
Richmond
Atla.."lta
Chicago
t
t
5,000,000
3,000,000
6,000,000
38,000,000
302,644,500
2,000,000
I
I
lOPOOO,OOO
J.tinnea:po11s
25,360,000
I$
130,000,000
I
381,000,000
I
lJ0,389,26o
2,500,000
6,ooo.ooo
4,000,000
31.295,000
7,000,000
3.000,000
45,000,000
292,641+,500
10,000,000
5,000,000
2,000,000
7,500,000
9,200,000
Kansas City
I$
14o,ooo,ooo.
.I
3,000,000
Dallas
Total
212,802,000
1$ 1,471,674, 76o I$
63.000,000
9,200,000
2,000,000
1,000,000
2,000,000
1.ooo,ooo
I
1,484,000
San Francisco
1~22.
f
10.000,000
I
57,500,000
St. Louis
Deposits
5.000,000
I
21.
'
Balance at
close of
businees
Jan. 26. 1q22.
Total
withdrawal. s
I$
I
I
J&:'.J8l'"'[
Total
Deposits
through
transfers
from bank
1$ 1o,ooo,ooo J$
I$
381, 000. 000
't CONFinENTl AL)
Wi thdra.wal s
:····3309a.
"--.:.:1gton,. D. C.
7,000,000
29,000~000
1,484,000
J
I$
24,360,000 .
6,744p500
12,500,000
1$ 16, 744,5oo
,-~
5,000,000
13, 74~,500
1$ 14,ooo.ooo l$
45.7~.500
J.
I
5,000,000
I$
204,057,500
26,500,000
1$ 1.452.4Jo,26o
-1
0
F E DE R P L R E
~
E R VE B 0 P R D
ST i: TE~.rP.'T FOR THE PRESS
X- 3310
For release in Uorning Papers,
Friday 1 Febru"'ry
3 1922.
1
The follo·,·,lng is a review of general business and
financial conditions throughout the several Federal
Reserve Districts during the month of January, as
coLtained in the forthcoming, issue of the Federal
Reserve Bulletin.
Production and trade show no striking, departures from
tne conditions prevailing at tne tim.e of the last report.
J\t
this season there usually occurs a period of slackec1ng in
various lines of manufacture and this has been true during the
past month.
Such recession as there has been does not, ho'>•ever,
go beyond tne proportions to be expected at this time of the
year.
In a
n~~ber
of lines productive activity has been un-
usually well sustained.
The already pronounced tendency toward
stabilization of r-rices has continued.
The Federal Reserve
Board's price index for December shows a reduction of only two
points~
as compared with a month earlier, while the United States
Bureau of Labor Statistics shows no change in its index.
On the productive side interest nas been largoly
centered about the iron and steel trade.
The activity in that
brancn of business has, on the ·.;hole, been slightly on the increase, the end of the year
showir,~o
a slovv in 6 dotm Jue to the
f"lt")
; i<c.#
X-3310
-2-
usual inventory period,while during the first part of January better inquiry, particularly from railroads has tended to increase the volume of
orders on hand as well as the activity of the plants.
ferrous metals continues quiet.
Demand for non-
In cotton and woole.;:1 textiles no material
change has taken place, but opening prices of the ..~merican iioolen Company
on fall lines are showing a slightly lower tendency.
Most of the mills
are still actively at work on orders taken during previous months.
In
other manufacturing lines there has been., if anything, a moderate tendency
toward improvement.
districts.
noted.
This is true of shoe manufacturing in the western
But little recovery from the depression in silk is yet to be
Demand in the automobile trade remains little altered but with
reports of fair prospects for spring trade.
But little change in crop conditions can be expected during the
winter season.
Prices of staple fann products have, ori the liihole 1 about
held their own with fair export demand.
Minor agricultural crors, especially
including citrus fruits and sugar cane, have shown satisfactory yields.
The interest in the agricultural situation 11ow centers about the preparations for the ne-,;; season.
Some anxiety is e...<:pressed with reference to
credit conditions in various parts of the liast and South 1 due to the fact
that banks in those regions already hold considerable amounts of paper
representing the "carry over" from last year.
Combined bank figures show
continued liquidation and re~ession in the loan account 1 but this has been
far more pronounced in urban and :nanufacturing sections than in the aii::,ricultural districts.
In general 1 liquidation} although still proceedin€ 1
has been retarded.
A slight increase in unemployment is attributable largely to
seasonal recession and indicates no important changes in the general demand
for labor.
Building operations have been unusually well maintained,
-3-
X-3310
especially for this season of the year, being about double those reported
for the corresponding month a year ago-
The demand for lumber has likewise
been well maintained 1 but with considerable variation as to prices between
different grades and classes,
Wholesale trade lines have show·n great variation.
Sharp declines have
occurred in dry goods and boots and shoes, while hardware sales,
~l
thC 11Z)'"!
not declining in so marked a degree, have fallen off substantially.
Groceries also show a lessened volume of demand.
In the Southern States
decline in wholesale lines has been especially pronounced in dry goods and
shoes.
The figures, however, make a distinctly favorable showing as com-
.
pared with a year ago.
In retail trade, buying demand in the manufacturing
districts of the East and North still shows improvement, while demand in
the agricultural regions of .the iJest and South indicates sharp decrease as
compared with the corresponding period a year ago.
~ihile,
as already noted 1 the general price level has shown but little
change, some important items have suffered from instability.
are raw
wool~
while
in·cotton~
variations in export demand have prevented
prices from assuming a fixed position.
prices has also been noted.
Among these
Some uncertainty in iron and steel
Building materials have in some
brick and cement, moved downward.
cases~
such as
Slight recovery in raw sugar has been noted
during the latter part of the month.
Financially the month of January has shO'wn growth in the reserve strength
of Federal Reserve and member banks.
Commercial demand for credit has tended
downward, while market quotations for money have easeJ.
bankers acceptances has become general.
A lower rate on
Foreign exchan6e quotations nave
fluctuated within a considerably narrowor ranbe tha.1'1 during December.
figures still show tendencies toward a small volUffie of business.
Export
f"j,.
-4.AGRIC!JLTURE.
~-
X-3310
S:e
i1eather conditions have thus far been excellent for
the growth of winter wheat in the states east of the Mississippi River
and in District No. 9 (Minneapolis)~ but have not been so favorable in
Districts No. 10 (Kansas City); No, 11 (Dallas)) and No. 12 (San Francisco).
Winter wheat and rye were reported to be in good condition in early
January throughout District No. 7 (Chicago)) and there vias plenty of
snow to protect the plant in Wisconsir"~ Iowa1 and Michigan.
District
No. 8 (St. Lovis) reports that the winter Hheat plant has good gro·wth~
and that the color of the top growth indicates an exceptionally healthy
condition.
In District No. 9 (Minneapolis) there has been a pronovnced
increase in acreage of rye and some increase in wheat sovving due to the
favorable conditions for fall planting and the relatively favorable
prices received for rye in 1921.
District No. 10 (Kansas City) states
that the condition of wheat in Kansas and Nebraska is very low, as the
result of a long continued drought) while the deficiency of moisture
in Colorado and Wyoming has beez;1 partly remedied by recent snows and
rains.
Copious rains during December and January have improved the
condition of winter wheat in District No. 12 (San Francisco) which had
previously suffered from a pro1ongad drought, and a light layer of snov;
new covers the fields of Idaho and \vashington.
The Louisiana cro1) of
can~
sugar has been much benefited by ideal
weather throughout the harvesting and grinding s0ason 1 and cane production for 1921 amountad to about 3~671,000 tons, an incraase of
cdnt in comparison with 1920.
for certain large factories.
47 per
GrindL.g operations ara completeJ, except
~-J:
·:,:u
-5COTTON.
X-3310
Cotton ginnings fror: Dac:Jmber 13, 1921 1 to January 151
1922, inclusive .. amountad to cnly 114,513 balos, as compared with
1,133, 479 bales in the corresponding period of the previous year.
Desp its this early curtailment in ginning activity the price of milLl iEgupland cotton at Ne·,, York declined from 18.30 cants on December 24th to
17.75 cents on January 24th.
District No. 11 (Dallas) reports that the
winter has been mild and fears that this ,nay permit extensive hi be rnating of boll weevils.
The establishment of large non-cotton zones during
the coming year tc be alternated with other zones in subsequent years
has been strongly advocated as a method of ending the costly ravages of
the weevil, but there seems little prospect of concerted action of this
sort during 1922.
Hov1sver, definite steps have be:m taken to sto!'
cotton planting for a year in certain sections of Texas which are infested by the pink boll worm, and that pest may soon be exterminated.
TOBACCO. The markets in Virginia and North Carolina were closed
from December 20th until after New· Year 1 s Day.
Subsequent sales have
been comparatively light .. due to unseasonable weather for the preparation
of the leaf for market .. but the v>arehousamen estimate that about 30 per
cent of the year's production has already been sold.
Prices of Burley
tobacco not signed up by the growers 1 cooperative association1 have
averaged materially higher than in 1920.
the selling season in a short time.
No.
3
The association expects to or,on
The cigar leaf market in District
(Philadelphia) continues dull, and ,:~ovement of the La!"lcaster County
crop has not yet begun.
Cigar rr,c.nufacturc;rs in the District are now in
the midst of their usual v:inter inactivity, factories v1ith fe.-v exceptions
being closed down during the latter part of December for the purpose of
X-3310
taking stock.
Many pJ.ents> particularly thos2 of tne smalL3r firms, aro
still closed.
The demand for cigars is exceedingly light, and orders in
most cases can be filled from stock.
in District No,
5
Both
manufact~rars
and retailers
(.R~.chmond) reduced prices on most cigare>ttes and some
cigars d;.tring the f>econJ waek of January, and some price reductions have
been annovnced jn Jlif"Jtr:i.ct No.
FRUIT.
have suffered
3 (PhHadelphia).
The unYJicked citrus fruit of California is reported to
considan.ble damage from recent frosts, but both California
and Flo_t'ida production is well above the average output of recent years.
The orange crop is estimated to amount to 22,500,000 boxes in Ctlifornia
and
8~20C,OOO
~lOO,OCO
boxes in Florida, as compared with 18,7001 000 boxes and
boxes, respectively, in the previous year.
The lemon production
of District No. 12 (San Francisco) is estimated at 4,664)000 boxes, as
compared with 3, 750,000 boxes in 1920.
Grapefruit production is also
somewhat larger than last year and amounts to 5J400,000
No.
6
(Atlanta)> an increase of about
6
per cent.
box~s
Shirment
in District
of ths present
crop of citrus fruit from Florida has been more rapid them during the last
season.. but the volume of California shiYJments up to December 31st was
l~ss
than in the corresponding period of 1920.
GR~IN
MOVE\1ENTS.
Volume of grain movements increased slightly
during December due to exceptionally heavy marketing of corn and a moderate
increase in receipts of oats and rye.
Wheat receipts amounted to 24,572,000
bushels at 17 reporting int0rior centers .. a decline of
nared with November.
4.4
per cent as com-
Particularly heavy declines were registered at Toledo
and Duluth., Y>hich were partly counter-balancod by a large increase in the
amount of wheat raceived at Kansas City.
District No. 10 (Kansas City)
X-3~)1 0
-7-
reports that wheat stocks on tne f anns on December 31st were much
Doce,J.ber receirts of corn at :t 7
smaller than at the close of 1920.
interior centers totaled 41,731,000 bushels, an increase of 139 per
cent in comparison v.ith November, arld
since January, 1921.
th'3
largest rr.orlthl:,- recsipts
Increases of over 100 per cent
ir~
corn receipts
vvere record3d at each of the following imyortant centers - Chicago,
Duluth, Kansas City, iliihvaukee, Minneapolis, Omaha, and Peoria.
This
acceleration in the movement of corn fro:n the farms is partly seasonal,
but has been much aided by large exports to Europe.
Stocks of grain
have shown a slight tendency to increase at both ir"terior and seaboard
centers, although there has been some decline in stocks of oats and
barley.
Corn stocks increased 92 per cent at 11 rerorting interior
centersJ and 13? per cent at eight rep orting seaboard centers during
December.
D&I.IR..
December production of flour shov.ed a further decrease
in all Districts.
District No.
9 (Minr..eap olis) rer. ortad an out; ut of
lJ 7541 654 barrals 1 a decline of 2l1 per cent from tne hovember figure of
21290,034 barrels.
December production reDorted in Dis"':.rict jo. 10
(Kansas City) was 1.,540.,102 barrels 1 as comr;ared v1ith l.,L7] 1 C3:.+ -oarrels
in November 1 while the output of 11 leaiing mills in District No. 6
(St. Louis) decreased from 261, 400 barrels in November to 248 1 bOO barrels
in December.
In District No. 7, (Cnicago) 43 re"resentative rr.illers
produced 311 1 162 barrels, which was 0.5 per cent less than in November 1
while in District No. 12 {San Francisco) 61 mills produced 775 1 139
barrels 1 as compared with
856,079
Jobbers and bakers in District No.
barrels produced by 71 mills in November,
7
(Chicago) are reported to be buying
c:
-u-
X-3310
ver; little flour, but in District No. 3 (St. Louis) December broi.lsjJt
forth !1luch better shipping illstructions on old
volume of new business was disaprointing.
orders~
al thougn the
In Districts Nos. 8 (St. Lcuis)
and 10 (Kansas City), there nas been much better inquiry since Januar/
1st.
In the former, this v;as especJ.ally true of t..,e
all was for prompt shirment.
Sc~tl:,
but virLue:.lly
In the latter, a co1,siderable number of
sales resulted, due largely to depleted stocks 1 and what is known as the
small trade did most of the buying.
There is practically no e.<p ort
demand in District ~o. 12 (San Francisco), and 1 while domestic inquiries
are frequent, f e;.; sales have resulted.
LIVESTOCK.
December receipts of cattle and calves and s.heep at
15 western markets were less than in November, although rJceipts of Dogs
were greater.
Sneep receipts alone ·were greater than a year ago.
ln
the case of cattle and calves, 975,330 head ivere received during December,
as compared with 1, 394,217 head duriL. g Noven:ber an:i 964,309 l1ead during
December, 1920.
Receipts of hogs during December 0ere 2,£73,947 nead,
as compared with 2, 559,916 head during November and 2, 932,052 head. a -;ear
ago.
Receipts of sheep decreased from
1,24~,214
head during November to
974,034 head during December, as compared with 942,353 nead during
December, 1920.
The condition of livestock
).r,
Dis-'::rict ~;o. 10 (K:- ;;;?s
City) is generally good, al thou;h the number of cattle and sheep on feed
in the Mountain States and on the Great Plains is less than last year.
Livestock in all parts cf Listrict No. 11 (Dallas) is re)'lorted to be
wintering well, in spite of the fact that winter rainfall is still much
belo''' normal, and in n:any sections ranges are seriously affected by drougi1t.
- 9 -
X-3310
In District No. 12 (San Francisco),recent rains have im"J?roved ranges in
California and Arizona, but the condition of Oreg011 ranges is below normal.
Twenty-three representative packers
re~ort
2~3
an increase of
per
cent in December sales (measured in dollars) over those for November, but
a decline of 20.5 per cent from those for December, 1920.
District No. 7
(Chicago) reports a better domestic demand for meats and lard toward the
close of December, but a tendency toward irregularity in the opening
weeks of January.
Seasonal falling off in export trade set in during
J'1ecember, and i t was com·:)aratively dull in e::Lrly January.
COA~
Total
~reduction
of coal in the United States during 1921
arr,ounted to 495,000,000 tons, which is t'be smallest annual output during
tre last ten yesrs.
'
The decrease was due princiually to the lessened
out?Ut of bituminous coal, as anthracite mines maintained a large
tion until the last of November.
a decrease during December.
~roduc-
Production of bituminous coal showed
The output for the month was 30,975,000 tons,
as com-Pared with the November "t)roduction of 35,955,000 tons, and a production of 52,123,000 tons in December 1920.
District No. 3 (Philadelphia)
re-oorts that the consumers' market is still inactive, although the removal
of the trans"Dortation tax on January 1 c·aused a sligrt reduction in urices.
"Drices at the mines have decreased slightly due to co11l"'Jeti tion between
union and non-union o~erators.
District No.
7
(Chicago) states that
"steam coal and screenings are slightly stronger in demand and nrice".
Ex;orts 'he,ve declined as Bri tisb corrmeti tion has ':lecome more active.
'Production of anthracite coal decreased from 6,859,000 tons in
Noverr')er to 5,984,000 tons in Decerroer, which is considerably lower than
the OUt'~ut of s,454,ooo tons in Decerriber, 1920.
District No. 3 (Philadel~hia)
-10reports a noticeable ir.cree.se in
X-3310
~ne ~ales
tc consumers of dc.I,estic
sizes) althougn steam sues still move slug,gisnly.
Due to the fact
that both retailers and operators .1ave larbe stocks 1 many companies
have curte.iled
production and tne industry is now or:erating at abo;;.t
60 per cent of capacity.
The production of beehive coke for December was 514 1 000 tons as
compared with
477 000 tons in November and 1 515 OGC tons in December}
1
1
1
1920, while December production of by-product coke was 1, 8b01 000 tons
as compared with 1 1 766,000 tons in November.
By-product rroducers have
a considerable advantage at present as tha; are not entirely daponiant
on the manufacture of iron and steal.
PETHOLEU1\A.
Reports from District No. 11 (Dallas) show a pro-
duction of 13,419 1 700 barrels of crude oil for Decembsr as con:parad
·,vi th 1 O, 617 1 880 barrels duriug i'-;ovember.
This was th3 larg,est aa..ount
produced during any one montg of 1)21 in that District,
field which brought in
The Mexia
33 producing v1ells was largely responsible for
the enormous increase, and showed a daily average production for the
month amounting to 104,530 bF.trral s.
During Decerr.oer 2C3 p roducinz w sl.ls
were completed in District No.ll (Dallas) with an initial production
of 328 1 984 barrels as compared with 132 producing <;ells completed in
November with an initial production of 20o_.341 barrels.
Ho¥;aver,
production of crude petroleum in this District for the year was almost
five million barrels less than during 1920.
On account of a reduction
in price drilling operations nave been much curtailed in the loUd-continent
field.
On January
at $1.30 and
9.
1922 .. the price of Corsicana light and heavy stood
$. 95 respectively as compared with $3.00 and
spectively on January 1 1 1921.
~1. 75 re-
((J
Cl_L
-11-
X-3310
In District No. 12 (San Francisco) crude petroleum production
reached the high figure of 114,349,92l+ barrels during 1921 1 or an
increase of 9, 123, 73 3 barrels when compared with 1920.
year 657 new producing wells were completed.
During the
The daily average pro-
duction of petroleum in California during December was 3251 473
barrels as compared with 293.,323 barrels during November.
On account
of the seasonal slackening in consumption and the continued increased
production the stored stocks on December 31, 1921 amounted to 35,021,912
•
barrels as compared with 33,486,350 barrels on November 30, 1921 and
22)240,271 barrels on December 31, 1920.
Forty-four new producing
wells with an initial daily production of lo,l60 barrels were completed in District No.
1~
(San Francisco) during December.
IRON AND STEEL. A better tone is reported in the iron and steel
industry, although the actual volume of business received has increased
only slightly in January.
Unfilled orders of the United States Steel
Corp oration at the close of December amounted to 4, 2[,8, 414 tons, as
compared with 4,250, 542 tons a month earlier.
Pig iron production,
however, shewed a substantial increase, from 1,415,481 tons in
November to 11 649,086 tons in December 1 and the monti1 showed a net
gain of four furnaces in blast.
ingot production was only
On the other hand) December steel
1,1..~27,093
tons, as compared vvith a November
figure of 1, 660,001 tons, due to wides;:>read cessation of operations
at the holidays.
Some tendency of buyers to figure definitely on future
requirements, and the appearance of large contracts in the market, is
reported from District No. 4 {Cleveland}.
District No. 3 (Philadelphia)
X-3310
however still notes hesitancy on the part of buyers to place orders
at existing prices, due largely to uncertainty as to possible changes
in freight rates.
Railroais have placed some contracts, while the
automobile industry, in anticipation of increased operations, is buying
somewhat more freely, especially of sheets.
Seasonal decrease in pur-
chases of plates and pipe by oil interests is, however, reported.
Lake shipyards have let some contracts, while tin plate and tubular
goods on the liihole are said by District No. 4 (ClevelanJ) to be making
the best showing of any steel lines at the present time.
Prices have
shown little further decrease since the opening of the year, and concessions are said to be largely of the character of dividing advantages of location with the buyer.
Oplerating conditions in District
No. 3 (Philadelphia) average 40 per cent of capacity, which is still
somewhat less than for the industry as a v;hole.
Most plants in ti1at
..
District have expanded their operations somewhat during January.
P.UTOMOBILES~
pas:senger, cars
As
~owed
WC3S
to be expected,. December production of
a sharp
::iecr~ase_
from _the November iigure.
Pr;oducers of 93-7 per Gent of the total output rerorted for November,
sbow
61
1
58~
November and
cars produced _ in December, as compared with 97,
93~
in
351 957 in December1 1920. Companies producing 71 per
cent of the total output of trucks .re,ort~d for November# . show
--
trucks produced in December, as compared with 7,166 trucks ..\n. November
and 5,315 trucks
~-year
ago •.
cent less than. in November,_ but 5 per cant grea.ter
The extent 9f consumers'
are
-~exand_~s
pro~eeding c~utiously~
wer~
Decembe%_" factory shipments
as ;et
Further price
th~
.~c~rtain,
19 per,
a yeax:- a;go.
and manufacturers
red~ctions W~le
announced
-13-
X-3310
duringthe past month on many cars and trucks in an effort to stimulats
orders fer spring delivery.
Dealers in many cases have been compelled
to absorb severe losses on useJ. cars that have been acce;,>ted in part
payment for new ones.
states District No.
NCNF~RROUS
rrA veritable glut eAists in ti.e used-car market 11 ..
3 (Philadelphia).
METPLS.
The nonferrous metal markets have been quiet
Froa, a price of 14 cents per pound 1 reached in mid-
during January.
December 1 copper (New York .. net refinery) declined to 13.50 cents by
Copper production for December was 16.. 545.. 182 pounds .. as
mid-January.
compared with 22,347 .. 934 pounds for November.
are rer orted as
ago.
per
793, 000.. 000 p ounds
1
Stocks on January 1 .. 1922
or 331,000, 000 pounds less than a year
Lead continues to be quoted by the leading interest at
~ound.
4.70 cents
December zinc production increased to 22,013 tons from the
November figure of 21.135 tons, but stocks at the close of the month
showed a small decrease 1 from
67 .. 049
tons to
66 . 603
tons on December
31st.
Dema:r1d has decreased somewhat and prices have shown a tendency to decline
slightly.
December production of both zinc blende and lead ores in
District No. 10 (Kansas City) was much greater than in November 1 increas-
respectively.
The unsold surplus, however, decreased from 78,000 tons to
70,000 tons in the case of zinc blende ore, and from 1, 700 tons to Eooo tons
in the case of lead ore.
The end of the year sees a gradual resumption of
operations in that District by manJ mines long closed down.
COTTON TEXTILES.
Cotton consu:nption in December amounted to 511, oOO
bales 1 a decline of 14,810 bales from the November total.
important developments during the month.
to maintain a high rate of activity.
The
l~ew
There were no
England mills
continue
The re!:lort from District No. l (Boston)
C"'i /~,,.
L>u
-14-
X-) -;1 0
notes the fact that recent upward price revisions have been moderate and
have been confined to cloths. the prices of ,r,icn have not previously
responded to the .Autumnal rise in raw cot con.
In District No. 3
(Philadelphia) the demand for cotton 1arn is reported to be dull and nei ..her
dealers nor sellers are disposedto consider orders for future delivery.
Mills in. District No. 5 (Richmond) are operating on much the same basis as
during the preceding two months.
them busy 'Well into 1922.
A few have fonvard orders that will keep
In District No. S (.Atlanta), reports made to the
Federal Reserve Bank by 39 representative cotton cloth mills showed a
slight reduction in yardage output in December, of
with November.
4.3
per cent as compared
Shipments v1ere 1. 6 per cent below those of the previous
month, but orders on hand at the end of the month had increased 2.7 per
cent.
As compared with December 1 19201 cloth production was 38 per cent
greater, shipments
12S.7
per cent larger, and orders on hand at the end
of the month, 22.1 per cent above those of December 31, 1920.
The fact
that some mills closed for a few days during the holiday season would explain at least a part of this reduction.
speaki11g1 are operating at full capacity 1 and in certain cases are runnin
night shifts.
Thirty-three mills engaged in the production of cotton yarn
in the District re:r orted production to be 2. 4 per cent less than in
but 00.3 per cent larger than in December, 1520.
l~ovember,
Snipments were 4.2 per
cent less than November totals, ar.l 141.5 per cent above December 1920
shiprents.
The order's on nend at the end of t:-.0 rr.oLL1 v.s,::r::;
J.c.S
per cer.t
less than at the end of November, ani 54.8 per cent in excess of those on
hand on December 31, 1920.
X-3310
- 15WOOlEN TEXTILES:
f. t the ·be)Zinning of J:::nua.ry the ~9ercentage of idle
woolen a.."'ld. vvors teJ. mechinery and of idle hours to totals reported according to the Census figures shoived a slie:ht advance in rrost cases.
In the
case of looms wider than 50" reed space, the percent a~ e of idle machinery
rose fror.:: 2~. 6 per cent on Decemter l, 1921 to
30 ·3 per cent on January 3,
tut there was a sligJ::lt reduction froTIJ. 21.7 per cent to 21.2 per cent in
the case of looms
50"
reed
s~ace
or less.
The corresponding percentages
for spindles rose from 22.4 per cent to 25.1 per cent for 'rvoolen S?indles
a.'"ld from 10.2 per cent to 13 per cent for
~of
'~Vorsted
spindles.
The percent-
iile hours to totals reported increased in all cases with the ex-
ception of
comes~
The percentages for looms wider than 50" reed space
increased from 28.7 per cent to 32 ~9 per cent; for looms
50" reed space
or less • the increase was from 25.7 :per cent to 27.8 per cent.
.
The per-
centage of idle spindles hours rose from 21.9,per cent to 25.6 per cent
in the case of rvoolen spindles and from 12,6
case of worsted spindles.
cent to 13.8 per cent in the
P certain arrount of reduced activity is to ce
expe<eted at the end of the yee_r
offerings.
~er
irr~-::-.ediately
prior to the display of fall
The opening of the American Woolen
Co~pany 1 s
lines of staple
worsted and staple and fancy woolens on Monday, January 23, had been awaited
with special interest end the
f~ct
that prices were on the average lo-ver
than last year is taken as a favoratle augury for sustained mill activity.
The effect of t":e se-ttle"'"'ent of the 1=rolonged dispute in the garment
trades in Ne·"· Yor.l.z City- is certe.in to have a stimulating effect upon the
mc=>rJ<tet for .··omen 1 s wear ':lut the se.ttlerrent is too recent to have been
reflected to any exter.t as yet in mill activity.
- 16-
X-3310
District No. 1 (Boston) states thPt the mills in that District are
running at as high a rate as could be expected even if business throue,hout the country were in a prosperous condition.
On the other hand, the
goods mills in District No. 3 (Philalelphia) are much less active, and
the average rate of production is estimated not to be in excess of 55
per cent.
This av®e is probarly not representative as some mills are
closed or running at greatly reduced capacity, 'Nhereas at least one
corporation reports that its mills are operatini? at capacity, and that
it has unfilled orders sufficient to keep it working at top speed for six
weeks.
The demand for carpet and knitting yarn has been good, although
there are sail to be very few requests for weaving yarn.
Ps a result
yarn mills in District No. 3 (Philadelphia) are operating at about 80
per cent capacity with sufficient orders to insure a
rate for about three months.
maint~nance
of this
The raw wool market has been very active of·
late 1 and. prices have ad.vanced materially 1 lar·gely as a result of iucreasing scarcity which, combined \1\Tith tariff restrictions, bas stim.1lated
speculation and trading.
A stntement issued by the Boston Wool Trade
Pssociation showed that there was a very general scarcity of raw wools, as
the Boston dealers on January 1, 1922 held the smallest 8mOunt on hand
since the beginning of 1919 with stocks about half those held on January
1, 1921.
Wool consumption during December amounted to 61,283,000 pounds
as compared with 65,326,000 pounds in November.
CLOTHING:
Ps a result of seasonal factors, sales of clothing in
District No. 2 (New York) dropped 50 per cent in Decemcer as compared with
November totals (10 firme reporting).
sales increased 26.8 per cent.
Ps compared with a year ago, however,
District No. 8 (St. Louis) also reports a
rather sharp decline in the December business of.23 reporting firms, a
X-· 3J!.O
- 17 -
drop which in this District was accelerated ry the unusually warm weather
which retarded sales..
It is stated thbt orders
fo~·
forward delivor;)r
continued tore well in excess of a year ago, 1:ut were slightly less
than during the preceding
noi:.·~h.
Reports from
rn!3nnfa-~turers
of men 1s
clothing in District No. 7 ( Chicag:)) show that the volume of spring orders
received by seven wholesale clcthh1g rr:anufacturers was 47 ,g per cent in
excess of the totals for the
preced~.ng
year.
The numl::,er of suits made
increased 34.1 per cent as compared whb Novemrer, and 320.3 per cent
as compared with Decemrer, 1920, when many shops were closed entirely.
In the case of
15 reporting tailors-to-the-trade, orders and
pr,?du~tion
decreased in Decemcer as compared with Novemcer, although both were in
excess of figu'res for December, 1920.
The decline in production amounted
to 28.9 per cent as compared with November, and in orders the reduction
was 32.6 per cent.
fts compared with the preceding year, the percentages
were 2048 and 26.1 respectively.
SILK "l'EX'T'ILES:
Raw silk consumption, according to the Silk Pssocia-
tion of Prnerica, amounted to 20,930 bales in Decen;ber, an increase of
2,575 bales over the preceding month.
However, there is no noticeable
acceleration of activity in the case of mills manufacturing tread silks
and ribbons, as the
persist~nt
rise in raw silk prices has militated
seriously against the placing of orders for future delivery.
The
statistics received from North Hudson and Paterson (Ja~1uery rl) do not
indicate any material improvement in the situation since the middle of
December.
In fact slight increases for Paterson in the rn4mter of active
looms and percentage of active loom hours to totals available axe more
than offset by pronounced decline in North Hudson.
In the fanner city
3,731 looms were active out of a total of 15,000 reporting, and the
Y-3310
- 13 -
percentage of active loom hours to total was 22. 7.
In North Hudson
1,405 looms were active out of a total of 4,596 reporting, and loom
activity was 32.7 per
HnSIERY:
hour~
cent~
New orders placed with hosiery mills in District. Mo. 3
(Philadelphia) engaged in manufacturing silk and heather mixtures have
declined in recent weeks largely because of the rise in yarn prices which
has made wanufacturers unwilling to accept contracts at prices formerly
prevailing.
In view of large orders already placed, however, the mills
will be able to run from three to six months on the existing basis.
Business has fallen off in the case of mills manufacturing seamless silk
hosiery, partly becau<>e of yarn ad'lrmces, but also because the demcmd ha;:;
turned more toward full-fashioned goods.
The
25 firms selling to the
wholesale trade which regularly report to the Federal Beserve Barik of
Phil~delphia,
increased their output (in dozens of pairs) 5 per
December as compared with Novemter, and
year ago.
Ord~rs
c~nt
in
172.1 per cent as compared with a
booked declined during the month 21.6 per cent, but
82.2 per cent above those of December, 1920.
Shipments fell off 0. 2 per
cent as compared with November, but showed an incraase of 88.3
~er
cent
over a year ago • . The nine firms selling to the retail trade produced
per cent less in November and
Orders booked declined
27.9
wer~
4.0
3.9 per cent less than in December, 1920.
~er
cent from the preceding month, shipments
fell 10-2 per cGnt, and unfilled orders were
37.9 per cent less.
District No. 6 (Atlanta) orders for cotton hosiery during
Tlecem~-er
In
in-
creased, and production was slightly larger than in Novemh"lr, but at about
the same rate as a year ago.
substantially unchanged as
Unfilled orders at the end of the year remain?(\
co~)ared
with those on hand Nov8mber }:',"Jut
were lart;er than at the end of 1920.
I
- 19UNDERWEPR:
The comparative reports received from
mills belonging to the Assoc:i.at:i.on of
34 representative
Knit Goods Manufacturers of Jlmerica
show that in the case of these mills little change in production capacity
occurred during the month of December.
A slight reduction in output
amounting to 5,100 dozens was racord.ed, totals falling from 357,606
dozens in Novem.ber to 352,506 dozens in December.
Unfilled orders on
December 1, were 21,535 dozens in excess of November 1, the totals rising
from 1,109,321 dozens to 1,130,856 dozens.
New orders received during
the month troT!Jed 96,747 dozens, from a total of 296,972 dozens for
November to 200,225 dozens for Decemter.
I
c~ncellations
declined from
13,981 dozens during November to 10,916 dozens, a reduction of 3,065
For the l~9 mills which reported an actual production of
dozens.
518,376
dozens in December, the percentege of nonnal capacity averaged 77 per cent,
a decline from the month of November in which 57 rrdlls showed an average
productive capacity of 86.5 per cent.
that they were closed,as compared
~~th
Six mills reporting, announced
three mills which reported closed
during Novemter.
Manufacturers of het"vyweight underwear loc.qted in District No.
3
(Philadelphia) report that they are booking orders fo:r immediete shipment,
and also for fall delivery.
They
st~te
thPt although the
m<:~j
od ty of
orders are not large, the total is sufficient to keep the mills fairly
bUS:'(·
In lightweight underwear, however, the a'DOU?lt of business done
continues to be telow expectations •
..
X-3310
- 20 ')HOES AT'm n:n."f'HER:
during the lest
Demand for hides l"nd skins was very sporC!i.ic
two weeks of
Dece~her
.3nd the first three weeks of JAnuary,
'but prices are for the most part unchanged.
There ·Nere only two recorded
sales of packer hides in the last two weeks of Decemler, wh&reas sales in
the second week of
months.
Jarn.;~a1-y
re,-,ched. the lc.q;est wsekly agg4·egate .for
District No. 7 ( Chic8go) re:r:orts th::1t shipr;.ents of green hiles
from Chicago during December were
i
s::Jve~aJ.
9· 6 per cent greater than in Nover.J,er.
S8les of c~lf and kip skins increased in the rr1iddle of January,
as a result of a slight reduction in prices.
Leather sales in Decemter
were somewhat less th£m in Novem1 er, due to the general desire of
manufacturers to reduce inventories, but demand for both sole and upper
leathers has improved during Janu?ry.
District No.
7
(Chicago) rerorts that
sole leather was in good demand during the early :part of January and that
there was a slight
District No.
tendency toward stiffening of :prices.
Reports from
3 (Philadelphia) state that colored leather is being pur-
chased more freely, while sales of patent leather are decreasing.
Export
demand for kid is improving and stocks of kid are now comparatively low ..
Western shoe factories showed a moderate increase in activity during
Decemcer, while most eastern plants slightly reduced operations.
Six
important shoe manufacturers in District No. 1 (Io::;ton) report proG.•J..;"LJ~l
2. 5 per cent less then in November, but 40.2 per cent greater than in
.
December,
1920.
These firms had
27.9
:per cent more shipments, but
per cent less new orders in December than in November.
(Philadelphia)
45
shoe concerns report production
ments 1.1 per cent less, and new orders
than du\ing November.
'
52.4
1.9
30
In District No. 3
per cent less, ship-
per cent less during
Twenty-one manufacturers in District No.
7
Dece~ber
(Chica£o)
I
- 21 -
report increases of
3.6
·~
X-3310
per cent in proiuction and 17.3 per cent in
unfilled orders, while shipments registered a decline
of 23.2 per cent.
District No. 8 (St. Louis) states that 11 reporting concerns showed
increases in Decemter sales varying from
•
in comparison >vith No'rer:d;er.
6.5
per cent to 22 Fer cent
Factories s:r;.ecie>lizing in high priced shoes are
doing relatively a nuch smaller tusiness thrm those producing cheaper grad.es.
LUMBER~
Decerr:ter and the openinf' of Jwuary is generally a period
of seasonal inactivity in the lumler iniustry, lut conditions tnis year
h"lve been relatively satisfactory.
Decen:ter production of southern pine
showed some decrease, outFut of 117 mills in District No. 6 (J>tlanta)
being 281+,835,000 feet as comparei with 298,704,000 feet for 123 mills in
Novemter, and. a similsr lecrease was noted. for 45 rr.ills in District No. 11
(Dallas).
Shipments in
oth Districts fell off more sharply, from
312,902,000 feet to 248,347,000 feet in District No.
6
(Ptlanta), and
from l0b,742,0CO feet to 83,149,000 feGt in District No. 11 (Dalla.s) ·
Unfilled orders at the close of the month showed a similar decrease, from
186,453,000 feet to 156,776,000 feet, and from 51,187 ,COO feet to
39,231,000 feet respectively, but stocks
rem~ined
practically unchanged.
Winter weather has ·been interfering with logging operations in some parts
of District No. 6 (.Atlanta).
There has teen quite an aFpreciable increase
in orders in the first part of Januar,y, and likewise some increase in prices.
In District No. 8 (St. Louis), because of the sustained strength of
the market as a result of the comparative smallness of stocks e.nd cut,
there has been rr.ore th3n the usual amount of inq_uir"J, end also of small
buying for immediate needs.
Buying of tuilding lumter for stock 1 even "by
thettline yard"companies; has hArdly started as yet.
Decree~qe
of stocks
')«")
x... 3310
·L
- 22 in spite of lessened. shipments is reported ty 12 rronufacturers in
District No. 9 (Minneapolis).
December shipments were 24.5 per cent
less than in November, while stocks decreased
6. 6 per cent.
Sales of
15 retailers decreased 48.5 per cent for the same periodt and stocks
2 • 8 per cent •
In District No. 12 (San Francisco) the month of December was marked
by moderately heavy demand for lumter for water shipment, both domes tic
and foreign, a slight increase in prices of the upper grades of some woods,
and reports of small and incomplete stocks in the hands of mills and
distributors.
Production of four associations during the four weeks ending
December 31, was 280,622,000 feet, as compared with 355,898,000 feet during
the four weeks ending November 26, while shipments likewise fell from
341,578,000 feet to 285,659 ,OCO feet.
Unfilled orders, reported 'oy only
two associations increased, ho·,vever, from 1,07L032,000 feet to l,l4o,370,C00
feet.
The Decem'oer export marke.t witnessed larr:e purchases c.y JApan ancl c
slight revival in Pustralian derr.End for Pacific Coast lumber, while in tce
domestic market cuying for .Atlan.tic Coast and
heavy for this season of the year.
C~>lifornia
shipment continued
Production of logs was less in December
than in November, due to the unusually severe storms and the usual holiday
shut-down for repairs.
BUilDING:
The total v~lue of building -permits issued in 166 selected
cities amounted to $139,192,593 in December, as compared with $145,883,418
in November, and $69,164,·447 in December, 1920.
The valuation of permits
issued. moreover, was actuAlly greater in December than in November in six
of the twelve Federel Reserve Districts·
)
These increases occurred in
f'.J
X-3310
- 23Districts No.4 (Cleveland), No.5 (n;.ch"'1ond.), No.8 (St~ Louis), No.9
(Minnee.po~.is), No. 10 (K9.Il3as City), ard No. 12 (San Francisco), ani ranged
from 5 per cent in District No. 5 (Rict.:J"1cnd.) to 4o per cent in District
No. 9 (Minneapolis).
Comparison with Decem1:·erJ 1920 shows large incl·eases
in velue of per:nits issued. for every
~E'd.erC1l
Reserve District, these in-
creases varying in size from 12 per cent for District No. 11 {Dallas) to
254 per cent for District No. 8 (St. Louis).
The value of contracts
awarded in seven Federal Reserve Districts (statistics of which are compiled
cy the F. W. Dodge Company) increased from $177,375,132 in November to
$183,633,754 in Decen:i\:er.
Increases were registe!'ed in Districts No .. l
(Boston), No. 2 (New York), No. 3 (PhilaJ.el:pbia), No. 5 (Ricbnonl) and
No.
9
(Minneapolis), while Distr·icts No. 4 {Cleveland.) end No.
7
{Chicago)
registered decreases.
District No. 1 (Boston) reports that the ·t:uilding situation in New
England has improved steadily for several months, due to a noteworthy
increase in residential building.
Reports from District No. 3 (Philadelphia)
indicate that the trend of construct ion l'Jf.ls teen definitely upvard throughout the greater part of 1921 and that plentiful supplies of building
materials are now available at fairly stable prices.
In District No.
5
(Richmond) the volume of new construction and of repairs were c oth larger
in Decem"ber than in Decemrer, 1920, ·but the inerease was relatively greater
in the case of new construction.
District No. 8 (St. Louis) reports marked
activity in the erection of inexpensive homes in subur-can comrrun:i.ties and
smal~
towns.
There hfl.ve been small reductions in prices of cement and
certain grades of yellow pine lum"l:'er.
Decemter "'.:;uildinB: activity in
District No. 12 {San Franciso) was greater than in any :previous month
except Octocer, 1921.
X-3310
- 24 EMPLOYMENT:
A fairly general, although not pronounced increase in
numbers unemployed occurred d,_u·j_;-tg December, accC;rding to the reports made
were employing 74~ 267. fewer employees -than at the end of November, - a
decrease of 4. 7 per cent.
Supplementary reports received from the several
Districts indicate that the decline in employment is fairly general} and
not confined to the large establishments covered by the employment
survey~
In District No. l (Boston), however, the reports are on the whole encouraging although the ,granite and paper making industries are among those that
are employing some\-lhat fey;er workers.
On the other hand, the employment
situation in the shoe centers of Massachusetts is improved, and the textile
centers continue as during past months to show relatively little unemployment.
Conditions in the metal working establishments are reported to be
"spottyn, with a probable slight gain in employment.
The reports from the
New Ycrk State Department of Labor show very little change in the employment
situation during the past three months, and since seasonal decline might
be expected at this time, the situation is on the whole rath;;r better than
it was.
Th7 settlement of tLe
s: rike
in ti10
g-.~.rmant
indus ~1·y of New r urk
hac; :decidedly reduced unemployment in the medle trades. ·In District No. 3
(Philadelphia) the Pennsylvania State Department of Labor reports a fairly
l
steady growth in unemployment during November and December with a result
that at the end of the year the number unemployed in the six cities of
.Altoona, Harrisburg, J ohnstow~ Philadelphia, Scranton and Williamsport
reached a maximum for the year of 243 1 293, but on January 15., the number
of unemployed had fallen to
234,910
a decrease of
3.4
per cent.
, . ,'\
:;_
-25In District No.
past month.
X-3)10
5 (Richmond) no material changes are reported during the
It is said that "there is a steady but slow growth in the
number of employees taken on by factoriesj but an offset to this during
winter is that there has been lessened employment on outdoor work and
reduced demand for farm labor".
The replies to the labor questionnaires
which are regularly sent out by the Federal Reserve Bank in District
No.
7
(Cticago) covering
3lj showed a decrease of
249
finns employing
139j 758
workers on December
5. 3 per cent in numbers employed as compared
with the preceding month and 16.2 per cent as compared with the same
month of the preceding year.
The dec.rease covered a very extended list
of industrial establishments.
The largest group comprising manufacturers
of iron and steel products sh~ved a decrease of
plants a decrease of 16 per cent.
3.4
per centj and packing
In District No9 9 (Minneapolis) un-
employment increased during December and 11 the demand for labor nas been
very slight ov.ing, to the complete absence of agricultural operations of
any
importance~
and the completion of public works and buildings.
In
Montanaj slight improvement appeared during J;lecen:ber in employment in
lumber mills and copper mining establishments".
Unemployment also in-
creased in District No, 10 (Kansas City) and according to tl:,e report
the industrial situation was not as good as it had been thirty or sixty
days previous.
Tbe seasonal release of farm
labor~
completion of beet
sugar manufacturesj reduction in railroad shopsJ strikes in packing houses 1
and the difficulties in the coal mines combined to reduce the numbers
emplo1ed..
Cessation of agricultural v<ork and of outdoor construction
operations was also resr onsibla for increases in numbers unemployed in
District No. 12 (San Francisco).
The movement into the cities of
,.~J
;~..)
•
X-3310
laborers from the rural districts tended to swell the numbers out of
<Vork in the principal centers.
The bulk of the unemployment was
confined to unskilled laborers.
It ·;;as stated that in tne inter-
mountain states the situation was not so
seri01..1s.~
and there was no
marked suffering from unemployment.
A number of Districts mention rather significar.t readjustments
in wage rates which have been made iuring the past month.
In District
No. 1 (Boston) i t is interesting to note that several ,small cotton
textile mills have reduced wage rat<3s frow 10 to 20 per cent, and it
is alleged that southern competition is exerting a pressure working
for these reductions.
metal
•~orking
'
Scattered wage reductions have occurred in
establishments.
In District No. 2 (Nev. York) a 12 per
cent reduction in the wages of textile mill workers in Utica and
Cohoes has occurred.
Tnis reduction was accompanied by a coincident
increase in worki:rlg hours which will result in tha maintenance of the
per capita earnings.
The New York State Department of Labor in its
Monthly Survey estimates tnat the average vweekly earnine:s in factories
in the S·cate during December were $24.91 as compared with $24.32 during
November., the increase being due in part to lengthened working time.
In District No .. 12 (San Fra..;.cisco) the maj Ol'ity o:f tne ,uining, companies
in Utah anncunced a reduction in wages of appro ..<imately 10 per cent)
effective January 16~ 1922.
In San Francisco wages of r:etal trade
workers were reduced 10 per cent during the month.
reductions L
awards ..
There were also
the wages of building trades as a result of arbitration
x...3310
WHOLESALE TRADE:
Very general recessions in tre sales of reporting .
wholesale firrrs occurred in December as comuared wit>- the precedine:r month.
In
t~-e
cese of dry goods and shoe firrrs the_ reductions •111ere especially
reavv in a 1rajority of the Districts from which returns \vere secured.
decre~ses in dry goods sales ran~ed from
(New York) with
3
6.9
The
?er c3nt in District No. 2
firrrs re~?ortin[', to 42.8 per cent in District No. 11
(Dallas) wit'- 12 firrrs r?··)ortinP-:.
District No.
9
{~lrinnea-oolis) was the
only one recordinc.: an increase,which anounted to 7.1 per cent for three
reporting firn:s.
Declines in shoe sal2s varied from
10.3
per cent for t:re
14 reporting firrr.s in District No. 12 (San Francisco) to 45.4 per cent for
6 (Atlanta) and No. 7 (Chicago), 9 fims reporting in
both Districts No.
eacr case.
Jiesui te these r:-arked reductions,
hO''~~ever •
sales on the whole
made a favorable sho'ving as comnared with a year a2o, and it is evident
that the decreases '"'ere ·Jrincipally due to seasonal factors, since the
physical volurre of sales has been 11Vell maintained in the case of dry goods,
while in boot and shoe lines, actual increases have been recorded in all
reuort~nc Districts, rangin~ fram
0.2 per cent in District No. 7 (Chicago)
with 9 fims re:portinP-:, to 38.2 per cent in nistrict No.
19
firrrs reporting.
in District No.
9
5
(Richrrond) with
Pry goods sales as compared with a year ago increased
{Minneapolis) No. 11 (Dallas) and No. 12 (San Francisco),
the percentages being 168.6 for
3
firms reporting, 8. 7 for 12 firms report-
in.2, and 11.2 for 12 firms reporting, ·for the res')')ective Districts.
Small
decreasos occurred in the other Districts ranging fra:m 1.1 per cent in
District No.
5
District No.
4 (Cleveland) with 11 firrrs reporting.
(Richmond), with 16 fims reporting, to 10.6 per cent in
Grocery sales showed a uniformly do'Nnward trend durin"' December al thouE,h
as comTJargd with a year ago the percentages of decreases were not as lart:e
X··3310
-28as were th ~
correspondin&~
percentages for November 1920, and November 1921.
The reductions durinR" December as corruared vvi th Nov2mbAr ranged frorr 1. 8 per-'
cent for District No.
6
(Atlanta) with 29 firms reporting, to 16.2 l)er cent
for District No. 10 (Kansas City) with
the
urecedin~·
6 firms reuortinz.
As corrroared ·Ni th
year reductions varied frOT a minimum of 10.8 ner cent in
District No. 10 (Kansas City) with 6 firms reporting:, to a maxinmrr of 24.1
per cent in District No. 4 (Cleveland) with
25
firms re-oorting.
Hard.vare
sales similarly dropued in December as compared with the preceding month in
all Districts exce·_...,t District Nol 3 ("hiladelphia), in which an advance of
0.4 per cent was recorded for 23 firms.
In all other Districts decreases
occurred r::>niling from 8.9 per cent in Districts No.
6 (Atlanta) and No. 12
(San Francisco),with 22 firrrs reportinrz in each case, to 20.5 per cent in
District No.
5
as com-oared
'~ith
(Bichmond) with 18 firms reportinz.
Fi~res
for December
a year ago show decreases in all cases exceut District No.
10 (Kansas City) in which 4 re"?orting finns shouved an average increase of
3. 5 per cent.
The minimum decrees e was
7. 3 per cent for District No. 7
(Chicago) with 18 firms re-oorting; the rr:a.ximum percentage of decrease was
28.9 for District No. 9 (Minneapolis) with 10 firrr,s reporting.
District No.
3 ("Philadelnhia) states that al thou£h tre business in 1-ardwar·? in that section
.
-·-
-
was somewhat better des"l'Ji te seasonal dullness, the developrrents were very
uneven.
Dealers in builders' hardware were meeting: e.n active dem.:;md, but
fims in the coal districts had ex"Jc:rienced a gradual decrease in purchasin;:.
District No. 8 (St. Louis.) also notss an improvement in demand as evidenced
by forward orders which are from
5 to 14 times as lar :;re as a year ago.
Row-
ever, the December sales of 12 reportin.z interests were 13 to 24 per cent
under the same month in 1920 and frcrn 8 to 14 per cent less than in November,
1921.
In connection with
~11 lin~s
of WP01esale trade general emphasis was
-29-
X-3310
placed upon the continuance of the policy of ordering to fill onv immediate
requirements.
This tendency was further accentuated by a desire to j:educe
the end of the year inventories.
Reports from the southern Districts
note that ir1 the rural sections slow payments by the farmers and curtailed
credits of the stores have kept down buying in some regions in vvhich the
urban centers have exnerienced a fairly active demand.
RETnL TRADE.
Retail sales in December showed a decided increase
as compared with those of NovemberJ 1921.
All of the Districts show a
decrease when compared with Decemoer 1920 e.x.cept the three eastern
Districts, No. 1 (Boston).t No. 2 (New York), and No. 3 (Philadelphia).
Comrarison of sales from July 1st to December 31st show that the business
transacted throughout the country during the six month period was 10.9
per cent smaller in dollar amounts than that of the same period in 1920.
District No. l (Boston) reports tnat the increase in the volume of trade
in that District was not confined to the large stores but was participateJ
in by many smaller stores in various centers while District No. 8 (St. Louis)
reports that "results in the country as a rule were less satisfactory
than in the larger centers of populationrr.
The lines which were most
active during the month were neckwear, inexpensive silver, leather goods,
gloves, furniture,
goods,. books,
jewelry, and kitchen goodsJ while the market for dress-
stationery,~
millinery and heavy clothin§; was dull.
as a whole show a large degree of stabilization.
Prices
December sales throughout
the United States showed increases amounting to 5. 6 per cent in District
No. 1 (Boston)} l.G per cent in District No. 2 (New York) and L2 per
cent in District No. 3 (Philadelphia).
Decreases were reported in the
other Districts amounting to 10.. 7 per cent in District No. 4 (Clevelar,d),.
4.5 per cent in District No.
5
(Richmond), 1(.0 per cent in District No.
6
Utlanta), 7.4 per cent in District No. 7 (Chicago).t 8.S per cent in District
1 ('f)
'.,.,;''\....._..,
- 30 -
X-3310
No. 8 (St. Louis), 13.3 per cent in District No. 9 (Minneapolis), 4.3 per
cent in Jiistrict No. 10 (Kansas City), 16.7 p8r cent in District No. 11
(Dallas), and 2.4 per cent in Ilistr:ict No. 12 (San Francisco).
Stocl\s on hand in re1Jresentative district stores throu::hout the country
at the close of December were 17.5 per cent lower than at tbe close of
November, 1robably due to reductions preceding annual inventori?s.
Out-
.
stendinR orc'13rs at the en"!. of Jiecemher were ;:>ractically tre
S3F8
3S
at t:'le
end of November •
.!'.EI.CES:
probably
The f!eneral trend of wholesale 'l")rices durin::< Jiecember wes
toward
sli~lotly
lower }.evels than in the precedin;::
montr~.
The
index of the Federal Reserve Board redstered 138 as compared with 140 in
November.
The tabor I'epartrr:ent index, on the other hand, showed,no chEm,;e.
The rrost important point of disa-:rreement between the two indexes was in the
matter of lumber -..Jrices which th:; Labor Tlepartrrent reports to have increased,
while correspondents of the Board report small reductions or no change.
This is an indication of t'l.e uncertainty as to 1Jrices in this industry,
whic~-
is further borne out by the Federal Ressrve Bank of Philadelphia which states
that dealers in that Jiistrict re-port a wide range of quotations.
Althou2h
the nrices of individual commodities in the raw materials group shifted up
and down during the rronth, the averae-e of farm products, animals and
~nests,
and mineral :procucts was approximately the same as in the precedin;:: rronth.
Manufactured i goods, however) declined in price.
Tlurin<? the first three weeks of Janu::try, -prices of <>.gricultural commodities such as corn, o::tts, wheat, cotton, etc., showed little chani=e frorr:
the December level but whatever
reductions.
occurred were in the direction of
tive stock and me2ts
except in the case of cattle
chan~es
which were lo•.ver.
advanced cons]d.erably,
Tob:::~cco
prices at recent
- 31 -
X-3310
auctions were reported to be relatively stron; in both the Kentucky and
~Tircinia
districts.
The trend of -prices of cotton textiles was downw:.-rd but
reductions were srrall both in the yarn and cloth sections of the industry.
The manufactured corrmodi ties are followin§:" the trend of the raw material.
'""'ool -prices for sever?l montrs have been lar£ely influenced by nros"?ective
t"lriff re-ul?tions.
furin2 January there were adv2nces in carpet 'IVOOl :::.s well
as in tr.e fine grades of clotf1in.:o. wool..
Yarn -oric'?s have advanced also, but
the J\rrericm ""'oolen Company end otrer larce ?reducers at their ouenings for
fa:.l ,.,.oods have quoted :)rices sorrewhat lower thm have been
prevailin~..
Pric;;s of iron and serd-finished steel in January were not very different
frorr those quoted in December.
ho,vever, have been r2duced.
More hi<!J.;ly rranufactured steel 0roducts,
Col:e "Jrices continue to show
we~mess.
Bi tum-
inous coal, orl the other hand, wzs a few cents a ton hLYer in Januc.ry than
in :necerrber.
Retail prices of food are rs-oorted by the ne:partment of Lc.bor to have
decre?-sed 1 ':)er cent during t._.e month of :recember •
.§.EJ'l'"PThTG:
The rr:onth of Janu3ry has been characterized by a decided
stiff:minll in ocean frei::cht rates, particul:1rly c1-cs.rter r?tas for -orompt
loe:din.::-.
Vore activity bas likewise been displayed in tine charters, a
number of vessels having
shillings
J~uary,
been chartered for 12 reonths 1 .;::eneral tradinc at 5
ner dead-wei ::h t ton -oer month.
1920, of 25
shillin~s,
and in
This corrmares with quotations in
Janu~ry,
1921, of 10 shillings :per month.
The revival of interest in time charters for as lonq a
(when for
"'T'aDY
~ericd
as 12 months,
months past ch2.rterers have been as a rule unwillin.c; to si:;11
for more trm a round t;-ip or three monte,s at a tirr,e) is undoubtedly of
si~ificance
c.s shcwin:: that shi;?pin' rr:en are not anticipatinc material re-
ductions below recent charter quotations, at least for sorr:e months to corre.
Grain C2.T£"oes frorr the lltlantic
range to Europe, and cargoes of sugar from
-32-
X-3310
Cuba to the United Kingdom nave receLtL) dis-played pronounced activHy; but
the e£port coal trade continues at a low ebb, British quotations on coal in
most foreign markets baing reported as lower than the best American C. I. F.
prices.
FORRI G1~ TRADE: 'I'he value of good3 ex;: orted in December 1 1921 1 remained
at approximately the same figure as in November, uame1y about $295, 00(1, OCC.
This represents a substantial decline from the mcnthly value of exports from
April to October inclusive, which was fairly stable around an average sligntly less than $350,000, OCO,
lihile the rate of t:nis decli1,e has by no means
been so great as in February ani
;,~arc.n,
1:;21, it snould be borne in mind
that the chief factor in tne f o:.:mer decline, (that is, very materially
reduced commodity prices), is no loLger or:erative to any considerable extent.
The most recent declines in export values therefore affect more or
less gradually a fall in tne actual quanti ties and vo1u,ne of E,Oo:ls in the
export trade.
Reserve Boarl I
Substantiation of this conclusion is afforded by the Fe,ieral
a foreign
trade index reflecting the physical quantities of
the most important export commodi ties 1 · wt,ich shovvs a decline f rc;n 117 .b in
October to
97.3
95.0
in .November, and a slii)1t increase to
calendar year 1913 being, regarded as 100.
in December, the
ha,J.d
Import S 1 on the other j na"le shown
a distinct tendency to increase above tGe totals wnich were reacned in the
sUID;ner months of 1921, standing at $236,000,000 in Decer.1ber as compared with
$211,0001 000 in November, and $1~3,000,0CO in October.
no reason tc doubt that the value
figures,~
Here again there is
·;;hicrJ in recent months are the re-
sult of fairly stable co'Tlmodity prices, now represe;Jt with a fair degree of
accuracy tLe actual tendencies from muntll to mor.th.
The Board's foreign
trade index reflecting the quantities of imports of principal commodities ir,creased from 126.9 in October to 150.6 in November, and to 106.7 in December.
- 33 X-3310
Considering as a whole, the year just past, our export trade was valued
at $4,485,000,000 as compared with $8,228,000,000 in 1920.
Our import trade
was reduced in aoout the same nroportion totaling $2,508,000,000 in 1921 as
a&::c-inst 3:5,278,000,000 in 1920.
The result has been that our "favorablen
balance of trs.de instead of b3ing ne"'.rly $3,000,000,000 as in 1920 was last
year a little less than $2,000,000,000.
tions o£
.~?.:old
Counting as an offset net
im~orta-
during the last twelve rr.onths, which amounted to about
$668,000,000, our net credit balsnce from so-called visible sources was cut
down to apnroximately $1,300,000,000.
Vlhen this is com"TJared with the net
visible additions to our international balance in 1920 or about
$2,880,000,000 it will be seen that there has been a decided tendency toward
a rr;ore even balance between exnorts and imports.
This tendency has been
es"TJecially pronounced in November and December during both of which months,
if allowance is rr:ade for estimated invisible payments by the United States,
our balance of trade was actually reversed and constituted a small debit
agc:.ins t us.
X-3311
F E DE R
ft
L RE S ERVE B0
ft
RD
STftTEMENT FOR THE PRESS
For release in afternoon papers;
Friday, February 3~ 1922.
CONDITION_OF THE ACCEPT/1NCE
MARK~T
The Federal Reserve Banks report the condition of the
acceptance market in their respective Districts as follows:
DISTRICT
NO~
1 (BOSTOJU~
From the middle of December to the end of the year, the
market for bankers' acceptances was extremely dull.
In order· to
help the market., the Reserve Bank reduced its purchaoiuts rate and.
purchased freely for its own
portfolios~
With this relief to
their portfolios 6 the bill brokers at once increased their offering rate by one eighth of one per cent, but with the close of the
year and the prospect of lower rates after the first becoming an
important influence on the competition fer
bill~
sagged back to 4-1/4 bid and 4-1/8 asked.
The acceptance market
rates again
during the first week of January was fully as dull as it had been
in mid December.
The competition for bills early in January by
brokers anxious to fill their portfolios in anticipation of a good
X-3311
market for acceptances in the near future again found rates a.own to
a new low level of
3-7/8
bid with sales at
i1hile for a fe~:
3-3/4,
days brokers were able to make sales at tne nev; rates, tne sales
•~ere
r1ot sufficient in volume to keep up .vith the offerings of bills, and
this~
l~eiv
cor..bined ·,vith the increase of rates of call-money in
r,ut up prices again one eithth of one per cent,
York,
A feature of the
bill market durii:J.g the past fe1v weeks has been the large proportion
of bills a(Sainst cotton and t;rain.
Even with the la;; rates prevail-
ing on acceptances 1 ttere has been evidence of cor"tinued buying by
savings banks and banks outside of Boston.
Since the first of the
year .. conditions have been such that the Reserve Bank
has kept its
purchase rate at a point where it is unprofitable for banks of brokers
to dispose of their holdings of bills through that channel and therefore its purchases have been insignificant since the first of the year,
although there has been an increase in the volume of bills car•ied on
repurchase agreement.
DISTRICT NO. 2 (NE\f YORK)
Firmness of money rates during the latter part of December
caused a lack of investment demand in the bill rnarket 1 and dealers 1
portfolios increased.
This phase was succeeded by a sharp revival
of investment demand early in January accompanying easier money
conditions.
i; i th changed money conditions~ dealers reduced their
bid rates for prime bills by successive changes from
to
4-1/4
per cent
3-7/8 per cent and made proportionate reductions in offering rates
down to
3-3/4 per cent.
Later in the month both rates advanced 1/8
as the supply of free funds became somevvhat more restricted.
During
•
X-3311
-3-
the latter part of December the discount market availed itself of
Federal Reserve Bank facilities to a considerable extent and during
the first part of January entirely liquidated its position at the bank
as money became easier.
New offerings of bills in the market were in
moderate volume and consisted principally of bills in connection with
the export of cotton and grain and the import of raw sugar, coifee
and silk.
DISTRICT NO. 3 (PHILftDELPHift).
Jllthough easier monetary conditions and low rates for call money
have resulted in a ready market for acceptances, dealers have not been
able to get a sufficient amount of these bills to accommodate the demand,
and sales during the mcnth of December, according to the reports of four
dealers fell off 31 per cent in the Third Federal Reserve District from
the November figure.
Three dealers report that their country-wide sales
have declined less than 4 per cent under the previous month, and 39 per
cent under December 1 1920.
banks in this
The monthly reports from twelve accepting
District indicate an increase ir:. the amount of new
acce-ptances created during the month ending January
10~
outstanding on that date was lower than on December 10.
but the amount
Comparativ~
figures follow:
Executed during
Il receding month
1922 January 10•.•••• ~······
1921 December 10••••.•..•..•
Nove.nber 10 ...••.•..• ,
Outstc:mdir~g,
on
given date_
$10,784,000
11,231~ 000
11,824, occ
The bulk of the new bills result from the financing of the export of cotton
and grain, the import of. sugar and coffee, the domestic shipment of cotton,
the ;;arehousing of cotton and tobacco, an::t the creation of dollar e.iCchange
•
-4-
bills.
X-3311
In this connection it is interesting to note that the Federal
Reserve Bank of Philadelphia purchased in all $24 .. 875~ 000 worth of acceptances during November and DecemberJ and that this amount was distributed as fallows:
Dollar eli: change,
cent; domestic shipments_,
36.3 per cent.
6. 9 per cent; warehousing 5. 7 per
15. :j per cent; imports, 34.5 per cent; exports
Sugar importations amounted to 1S. 3 per cent of the totaL
There was a further decline in rates from 4-l/4 per cent prevailing a
moLth ago to 3-3/4 per cent in the third week of January.
rulin~?, rates on
A year ago the
Go to 90 day acceptances vvere from 5-5/8 to 5-3/4 per
cent.
DISTRICT NO. 6 (.ATLPPT.A)
Of 21 reports regarding acceptance transactions during December
1921 received from accepting member banks in this Districtt'll reports
showed no transactions in acceptances of any kind durint:, the r,;or.t!L
Ni..:1e
reports showed amounts of domestic acceptances executed during December
aggrebating
5.7
per cent more than durinb November 1 but
than during December 1920.
5.6
per cent less
Foreign acceptances executed during December
1921 v,rere approximately 34 per cent greater in amount than durir:g,
l~cvewber
lj'::O~
Accept-
1521, but still about 14 per cent less than during December
ances purchased in the open market during December 1921 by the Feder&l
Reserve Bank of Atlanta were larger by
\
64. c3
per cent than during the pre-
ceding month.~ and were 33.5 per cent in excess of the total for December
•
1920.
Except for September and October 1921, this total for December is
larger than for any month since April lS20~
DISTRICT NO. 7 (CHIC~·GO)
Re:r orts from bar1h:s sho., a continuance during December of the
general falling off in acceptance trC~.nsactions.
Bills accepted decreased
-5-
X-3311
37 per cent and bills sold 44 per cent from the November amount.
Smaller
decreases were shown in bills bought and bills held at the close of the
month.
Purchase rates for December were rerorted ranging from 4-1/o to
4-1/2 per cent although most of the rates reported were 4-1/4 per cent,.
The maturities of bills purchased were divided as follovvs:
30
day, lS-3
per cent; 60 day, 30.6 per cent; 90 day, 49.2 per cent, and 180 day, 0.7
per cent.
The greatest part were reported drawn against tea.~ provisions.~
wool, meat, meat products and cotton.
.A detailed swnrnary of returns follo.-.s~
~venty-nine banks
*Bills bought .
**Bills sold
Bills held at close of month
fimount accerted
In thousands of dollars
December
November
3. 873
7,143
4,395
5, Cis3
51009
12,710
4,G5C
6, 981
*E1Cclusive of bills purchased by tne accepting bank, and of ~urchases
for the account of specific customers.
**Exclusive of bills purchased for the account of, and sold to specific
customers.
Comparison of statistics on Bankers Acceptances at the Federal Reserve Bank
,,
of Chicago f or November and December follow'
During Month
Bar.kers Acceptances rediscounted .
*Bankers Acceptances bought •
Bankers Ac.ceptar.ces sold from holdings •
Held at close of month
Bankers Acceptances rediscounted
•Bankers Acceptances bought .
December.
. $
987
11,3 91+J 5.64s.~ 9~23
November
$
2,b37
12,2671463
190., OvG
2,637
967
6, 4v9J l4j
:),l::J41
5oc
*Included in Acceptances bcught, but not ir: .Acceptance<: sold, are t.r,ose
bought with agreement by the sellers to repurcnase within fifteen dais•
DI~TRICT No. 8 (ST. LOUIS)
The market continues quiet with features of i'r,terest or 1mr: ortance
lacking.
The decline in rates has serveJ tc curtail the demand for bills,
banks and investors rreferring to place their funds in Government
• •
-6-
X-3311
securities or other investments yielding more favorable returns.
.Accep"t-
ances purchased in the open market by this Bank in December amounted to
$1,221, 7321 a decrease of $2, 911.,61!-t under the preceding month.
Rat~s
range from 3-3/4 to l~-1/lf per ce:.1t.
DISTRICT NO. 9 (MINNEAPOLIS)
The customary rate on bankers' acceptances with endorsement increased
frcm 4-5/6 to 5 per cent and rates on commolity par·er secured by warehov.se
receipts increased from 5-1/2 to 7 per cent.
DISTRICT No. 10 (KMJS.M2 CITY)
Bankers' acceptances based on foreign trade transactions experienced
pericd s of dullness and at times were neglected oecause of pressure of other
demands during the year.
This was indicated by purchases of bills in open
market by the Federal Reserve Bank.
Reviewing the .narket for the past year
it is seen that on the first \wednesday of January 1921 1 bills purchased
amountedto $2,150,537; the volume declined steadily until in July and
llugust when it reached the total amount of $25,000.
An increase
after the harvest period and on January 4, 1922, the total
~vas
holdin~s
noted
of
thee.e bills by the Federal Reserve Bank amounted to $11 096,200.
DI~!RICT
NO• ll (DPLLftS)
Inquiries addressed to accepting banks disclose that there was a
substantial increase in the outstanding acceptances createdduring the
month~ the total en December 31st being $4,251)692 as compared to $3~~52)337
on Novexber 30th, or an increase
of about 31 per cent.
Of this amount
$1, 90i.!-,692 was held against imrort and e.4port transactions, .vhile $2, Y+7 1 000
.
-7-
X-3311
was based on domestic shipment and storage of goods.
Total accept-
ances held by this Bank on December 31st aggregated $165 1 000 as
compared with $190,000 on November 30th) all of which were executed
by banks of this District.
DIETRICT NO. 12 (::'JlN FHJlNCISCO).
The course of the acceptance market during the period from
December
15
to January
15J
was uneven.
During the latter part of
December, when most of the banks were ccnserving their holdings of
cash1 the demar.d fell off materielly 1 resulting in a slight easing
of selliLg rates around the end of the month.
.After the first of
the yearJ however 1 large amounts of idle money sought investment
in both call money and bankers 1 acceptances.
In
consequence~
call
money rates fell as low as 3 per cent in New York, which made
acc~ptances
at the then prevailing rate of 4-1/6 per cent an
attractive investment as short-time securities.
The demand for
~
bills of this character became so great that within the space of
a few days after the first of January the rate for prime bills fell
f~om
4-l/3
per cent to 3-3/4 per cent) at which point it stands
today (January 15).
banks.
The bulk of tnis demand came frorr; large city
,iilany country banks have found the rate too lovv to be
attractive.
Coincident with the large demand for prime bills was
a shorte f>e of supply .,-;hich brought about th·3 necessary condition of
a rap idly
v~eakening
market.
A rough classification of bills
·'R .-• -1
...11-..J.>_..iL
-8-
X-3311
marklted as reported by the principal dealer on the Coast shows
that short term bills and 120-day bills have gained greatly in
favor.
The approximate percentages of each class to the total
sales of all classes follows:
Dec. 15 to
Jan . .J..5__
""?
c::::_.
30 day
6o day
90 day
120 day
130 day
Nov. 15 to
Dec. 15
5UL
t'O
33.3%
24.4%
19. 89o
Inactivity in the market during December is reflected in the
repcrts to this Bank of 36 of the principal accepting banks of
the District.
Total purchases of $6,085~363 during December
.
were $5,266,917 less than purchases in November ($11,352,285)
.
the decrease being almost entirely in purchases of bills orig-
inating outside of the District.
Wheat 1 sugar 1 rice and cotton
were the principal commodities on which acceptances executea
during•the month were based.
Purchases and holdings of accept-
ances of reporting banks arpear in the following table:
X- 3311
-9-
Amount hcepted 12thC~=~:~~/~1=trio~T---All~-:;:er___ --] --- ~o:December
November
December
November.:J_Decerrit;er
Novem1:er
Decemoer
Nover:~ber
-~ !~~:\~e!,~r-Decerr:oer
Noverr1:er_
P."l.cific
Northr:est
l:Jorthern
California $2,370,742$3,461,6121$2,142,636 ~2,291,734 l~l,953,11;8f2,571,826j<!;4,o95,354$ 4,B63,5FoP~ 3,919,022$ 2,916,197
Southern
Ce"lifornia
Otl:er
Districts
Total
36 "banks re-porting.
November totels changed due to revised figures received from one bank,
,
.1
FF.DER~L
GOLD
Summary of transactions for ~eriod ending
Federal
Balance last
Gold
Reserve
statement
:Bank of
Withdrawals
---
X-3312
Superceding X-1145
Washington, D. C.
RESERVE BOARD
SETTLEMENT FUND
{ CONFIDENtl'lftt)
Gold
Deposits
19___
Transfers to
Federal Reserve
Agent's gold fund
Transfers
f~
Federal Reserve
Agent's gold fund
TRI'NSFERS
:Between Feder~]
Reserve E!!Ulke
-------------------------------~-~~
Debits .
Credits
~O.!_t£fl____ t~------- -1~------- _ _I!--_--_- -l$_------- -l!-------- l$_ ---- - -- 1$_---- ---!e.! !o!k_- _l_------ -1-------- _f_-------- 1-------- J_------- -1--------1--------Eh!l~!l:eh!a_l_------ -1-------- _J_------- -1 _;------- _f_----- ·_- -1----- _:_ __ -1---------.
Ql~V!!_l~ -
-
1_ -- - - - - -1 - - - - -- - - _,_ - - - -- - - ~ 1- - - - -- -- _,_ - - - - - - - -1 -- - -- _·:...- 1- --- - --- - ...
·
.
------- 1 -------- 1
Ricbri.ond
------------------
l
t
1
I
I
------------------ 1 --- _ - --·._ - 1 - - - - - - - - •"'
~t.!~!!t!! - - - i_ - - - - - - - 1- - - - -- -- -'- -- --- - - -1 -- -- ---- -'--- -- - - -- l- - - - -- - -1 - - - - -:- - - -.Qhic~o
·
I
l
------ 1 -------- 1 ------------------ 1 ------------------ 1 - - - - - - - - l - - - - - - - - ~t.!. l!<>Ei_! - - 1 - - - - - - - - 1 - - - - - - - - -'- - - - - - - - - l - - - - - - - - - L - - - - - - - - l - - - - - - - - 1 - - - - - - - ~ -.
~,!!ll!_a;eo.!i! - 1 - - - - - - - - l - - - - - - - - _j_ -- -- - - - -l - - - - - - - - -'- - - -- - - - - 1- -- - -- - -1- - - -- - - ~ . !"a!!s!.S Citv 1
1
1
l
f
l ______ -- l_- -- --- ---~~ -------- ------------~----- -----------------~a!l!!S_ --- 1 -------- 1 ------------------ 1 ----~----------- .:. . -1------- -1--...;.:-----l
l
·
San Francisco
I
f
Total
J$
f$
l
I.
l$
-+-1- -
,i
X-~3J2
Supercening
Sheet /f2
a
X-11~5
a
--------------------------------------------~---
19
to
19_
inclusive.------------------------------------------------------------------------~deral Reserve Notes
thecks. drafts, etc.
Settlerrents from
Federal
Reserve
B!mk of
"''otal Debits.
~0~t£11_
- - -
. ,!ie! !o;:k_-
1
Total Credits
I
Total Debits
1¢- - - - - :._ - - 1$- - - - - - - - _I! -
_l_------
~h_!l~d~lth.!a_l
- - - - . ,. - -1-------- _j _________
________ l _________ I_ ________
I
Balance in
fund at close
of business
19
Net changes in ownership of
gold through settleJOOnts and
transfers between Federal
___________________________________..
Reserve Banks.
Total Credits
l:f:- - - - - - - - 1$_ -
Loss
- - - - - -
I
-11 - - - - - - - - l $_ -
Gain
- - - - -.- -
l ____ ·- _- _l_------- _j_---- .--- -1--------l- _______ i ___ _____ ,_________ l- _______ ~
Ql~v~l~ - - 1 - - - - - - - - 1 - . ,. - - - - - - _{_ - - - - - -.- - 1 - - - - - - ~-- i - - - - - - - - _f_ - - - - -- - - 1 - - - - - - - - ~i£~0!!,d_- -1------- _i_- ------ --~------- ---- -1- ----- -- 1-- ------ _,_- - ---- - -1-- --- ---~tl:~!!t_g - - - 1_------ -1--- ----- -'-- ---- --- 1_------ .;.1_------- _\_------- -l------- -:2~c ~E. - - - 1 - - - - - - - - l - - - - - - - - _(- ___ - ___ - 1 _ - - _ - - - - 1 - - - - - - - - -1- - - - - - - - - 1 - - -· - - - - - ~t.!. ~~i~-
_l_------ _l_------- -'----- ----1------- -1-------- _J_------- -1---------
l_ - - -- - - _1 _ - _ - -- __ J ____ .- ____ 1 ______ - _ 1 -- -- --- - J_ - - - - - -- - 1-- - - - - - - !a!!s~s_C.!tl. _l __ --- ___ l _________ j_ _______ _ l _ ____ - __ l_------- -'-------- -1--,.;..-----~a!l!f!!3_-- _l_------ _l_------- _,_-...:.----- _l_------ _l_------- _,_ --------1-------- San Francisco I
I
~!!Tl~ap_o!i!-
Total
I$
I$
Settlements from_
19_
to-
19_
inclusive.
~e~i~e of =::::::::R:~~~::::~:::::::-r:~~=-~==~~~::::-:::::::
=
tt
l~
I$
1$
Ee~ Zo£k____ 1 ==== = = ===== J ________ 1 ===== _
___ =
1 ________ 1 _______ -c_-_-_-_-_-_-_= 1 ______
==1
==
E_o~ t£n_ - - -
£uff~l.Q
.!:hi l_~d.~ 112hl:a-
-
Ql~v~l.§:!l~ ___
£i~c.!n~a_i i
l ______ ._ _ l ________ I_ - - - - - - - 1 - - - - - - 1·
1
I
1
1 - - - - - - - - J - - - - - - - -~- - - - - - - - 1 - - - - - - -
=
fi_tt~b}±rgh= -= = 1 === = = ==li =: = = ==: =c =======l1 ======
1
=
B 1£~0~d- I .
1 - - - - - - - - 1 - - - - - - - -~- - - - - - - - l - - - . .,. - - 1 - - - - - - - - 1 - - - - - - - -,- - - - - - - - 1 - - - - - Ne;
-1------- -1-- -·---- -~------- -1-------------- -------- ---------------- ------£i £r".!_n_g~@:II'~ - - 1 - - - - - - . ;. - 1 - - - - - - - _j_ - - - - - - - 1 - - - - - - -·
___ 1 ________ 1 _______ _I ________ l _____ - _
!!a£kE_O!!V.!_l.!.e__ 1 _______ -1 _______ _I_ ;_ ______ l ______ _
Qhi_C~£ - - - - 1 - - - - - - - - 1 - - - - - - - _I_ - - - - - - - 1 - - - - - - Qe_!rs_i_! ____ 1 ________ 1 _______ _I ________ l ______ _
___ 1 ________ 1 ________ I_ _______ 1 ______ _
~i.!t.!.e_REc! __ 1- _______ l _______ _I _______ _ l _____ -v! lle___ l ________ l _______ _I ________ l ______ _
~e!!:J?Ei! ____ 1 ________ 1 __ - __ - - _I_ - - - - - - - 1 - - - - - - __ 1 ________ 1 ________ I_ _______ 1 ______ _
_____ 1 _______ -1- _______ I_ _______ 1 ______ _
[~Es ~s-C_! tz - - l - - - - - - - - 1 - - - - - - - _I ________ 1 ______ _
-~- - - - - - - - 1 - - - - - - ____ 1 ________ 1 _______
Qm~---- -1------- _l_------ _j_------ _l_-----.Qk_!a.Eo!!!a..,C,!. tz _ 1 _ _ _ _ _ ___ 1 ______ _I ________ l _ _ _ _ _ _ _
~a.!l~s- ____ 1 ________ 1 __ - __ - - -I_ - - - - - - - 1 - - - - - - ____ 1 ________ 1 _______ _l ________ 1 __
____ _
:Baltimore
1: ti~ t~ - - - Orle~;!ia~hyi);l~
~t.:. ~o~iE_
~~i~
Mi~n~a;eo.!.i!
~e]:e!]a
~e£v~r-
~
~l_P§:S£
~
!!~S_10£ - - - _ 1 ________ 1 - ______ _1_ - - - - - - - 1 - - - - - - - 1 -- - ,_- - - ~~ !r~£i~c9_
1- -- - - - - _I ________ 1 ______ _
l.- _______ 1 _______ _I ________ 1 ____ -- _
§.p£k£n~ - - - - l - - - - - - - - l - - - - - - - -'- - - - - - - - 1 - - - - - - !:o!tla£d____ l __ . ;. _____ 1 ________ I_ _______ 1 _____ - _
£a.!.t_L§:k~ Qi_!y_ 1 ______ ~ _l _______ _I _______ _ l ______ -·
__ 1 _ ______ 1 _______ _I _______ _ l ______ _
£egt!_l~
____
~O! ~nge_!e!
TOT.AL
~
I$
I$
j$
·'1 _.• C'
_:.,__t ... "t..._)
FEDERAL RESERVE BOARD
WASHINGTON
X-3314
Sir:
I hanQ you herewith Federal Reserve Boardts Goli Settlement ~<ni
check No.
for $
, d.rawn to your order, with the
req_uest that you will please credit the following Federal Reserve Banks
anc1 ./lgents i.n either their G-old Redeirpticn Ft.md &ccounts against Federal
Reserve 11otes or in the Federal Reserve :Bsnks 1 5% Redemption Thnd accounts
against Federal Reserve Bank notes in the respective accounts ani in the
amounts as indicated relow.
There is included in the amount of this check the total amount as
noted below, charged Feder.ai Reserve Banks by the Board; in payment for
credits to the accounts of certain national banks in their 5% Redemption
Fund accounts as advised by the various Federal Reserve Banks and Branches,
the letter transmitting the individual credits for account of the national
banks having been previously forvvaroed to the National Bank Redemption
Agency.
Name of
Federal Reserve Bank or Agent
Name of Account
··'! - ...... ~
_;_L_. . _
FEDERAL RESERVE BOARD
WASHINGTON
~-3315
Sir:
There is transmitted to you here~ith a transcript of advices from
the following Federal Reserve :Banks and Branches under dates and in the
amounts as indicated, with the request that you will please credit the
banks named in the attached letters as forwaried by the Feiera1 Reserve
'Banks and :Branches in the respective 5% Reder:rptio:n F•.md accounts against
national bank notes, in the amounts as noted there!.n.
Payment for these credits will be effected
of business this date.
Federal ·Reserve J3enk
or Branch
Date of letter
cy
the :Board at the close
~~
:118
FEDE:RAL RESERVE BOARD
WASHINGTON
X-3317
February 2, 1922.
SUBJECT:
Temporary lldvances to Dealers Against Victory
Notes.
Dear Sir:
You are re~uested to aavise your Executive. Committee
that until further notice the Federal Reserve Board will
not object to any arrangements ·.vhich y'our Bank may desire
to make for temporary advanees to dealers against Victory
Notes on the same tasis as advances ha1re heretofore teen
made ageinst Treasury Notes a."'ld. Certificates. Victory
Notes are naw so ne~r their maturity tha.t they may be treated as short-time ohlig~tions. Your Bank cannot, of course,
make loan~ direct to deE"lers on the security of Victory
. Notes, but under its open market powers may :pUrchase them
or carry there for dealers. under agreements by them to repurchase at stated times.
Very truly yours,
G o v e r n o r.
CHAIRMEN ALL F. R. B.ANRS.
FEDERAL RESERVE BOARD
WASHINGTON
X-3318
Fetruary 2, 1922.
StJ'PJEC'T':
Right of Iireetors of Federal Reserve Eanks and
Ir911ebes to Examine Rerorts of Examination of
Member }.~nks.
De."lr Sir:
I am transmitting herewith, for your information, copy of a
letter from the Comptroller of the Currency on the subject of the
right of directors of Federal Reserve Banks to exarrine reports of
examination of mern:oe r ': anks made' ty ne tional tank examiners.
I may sa.y that the Foard concurs in the views expressed by
the Comptroller, althoueh the appointed memlers have not heard any
of the COTrplaints to which the Comptroller refers. It is sue:£ested
that as far as practicable the same rule 'ce adopted with respect
to reports by Federal Reserve Bank examiners as the Comptroller
desires to have followed with respect to reports by national lank
examiners.
It seerrs to the Board thl"lt directors could be inforn:ed of
the cone lusions of the Federal Reserve Pgent ::end the Governor of
the Bank as to info!1Tll3tion contained in the reports without going
into det3il and that these ;;:eneral conclusions could be furnished
officers C'lnd directors of r;anch tanks for their guidance.
Very truly yours,
G o v e r n o r.
Elnc losures .
CHJ m~'EN ALL F .R. F Jl.NKS.
c
0
'P
y
TREJI.SURY DEPARTMENT
Washington
Office of
Comptroller of the Curren~y
January 30, 1922.
X-33li:la
Hon. W. P. G. Harding, Governor,
Federal Reserve Board~
Washington, D. C.
My dear Governor:
Directors' right of access to
of Examinajjion.
R~orts
I have had under consideration the letter of John Perrin,
Chairman of the Board of the Federal Reserve Bank of San Francisco,
and the opinion of Assistant Federal Reserve Agent in the matter of
the right of directors for the inspection of reports made by National
Bank Examiners. I have gone into the question presented by Mr. Perrin
quite fully and I find that I am unable to agree with Mr. Perrin in
his contention.
A proper rule appears to have been laid down on December 22,
1914, in a letter from Mr. Delano to the then Corriptroller of the
Currency, which reads:
"Information contained in Natioilal Bank reports ot
State Bank reports, should be available only to the
National Bank Examiner, the Federal Reserve Exa~iner duly
authorized to examine the Federal Reserve Bank and member
banks in the respective districts, the Federal Reserve
and Deputy Federal Reserve Agents, all of whom are government representatives. The Governor of the Federal Reserve
Bank should., of course., have access to the Credit Bureau
Files but under ng circumstances should any information
contained in the Bank Examiner's reports be open for the
inspection of the directors of any Federal Reserve Bank,
and except those above referred to".
!:! think the important thing to bear in mind is the
Federal Reserve Agent is just as much a goverr~ent official as the Chief Examine-r, and., while the Chief
Examiner reports direct to the Comptroller of the Currency., who is in turn ex-officio rr:ember of the Federal
Reserve Board., the Federal Reserve Agent reports
direct tothe Federal Reserve Board".
,~
-2-
X-3318a
r-,1
-"-r·.•..).._
It would appear that thus early in the organization of the
Federal Reserve Systen: the constructj on was placed upon the right of
directors to see the renorts adverse to tne contention of Mr. Perrin~
and I find that such co~structi on was transmit ted by '.r. P.. C. Milbr to
Federal Res,erve Agent Perrin at San Francisco, in the ,-, or:is f ollo.< inc,~
"Referring to the attached- letter from Federal Reserve
Agent Pernn of S8.n Francisco, this office for the pres~nt
is willing to grant the Federal Reserve Bank of San Francisco
permission to furnish the manager of the Spokane branch of
that bank copies of the reports of examinations of national
banks loca~ed in the territory assigned to the branch. These
copies, however, should be filrnished to the !!@.nagec in confidence and he should be instructed that they are for his
information and the information of his Qredit staJli only,
and are not accessible to the members of the Board of
Directors of the Branch bank".
I am quite c~nvinced that the rulings neretofore made are both
correct in law and in principle. It certair~y never was intended that
bankers who were elected to serve on the Federal Reserve Bank Boards
should have access to the inside of banks which were competing with
their own banks and in which they might for some motive desire information. It rather begs the question to say that these men who are elected
from banks as Claf:ls A and B directors are honorable men and would not use
the information secured for personal advantage or for interference in the
affairs of such banks whose repo;cts they would examine. That_. of course,
is t.De high ideal that in all such transachons s.Dould be i ollowed; but
the Class A and B directors are human beings, and while many no doubt
do regard the right to look into the reports of the examiners as sacred
and one which shc.uld not be used to the disadvantage of the bank, yet I
have personal reasons to know that thel·e are except:i.ons to that rule,
of which I have had serious complaint.
It would seem that the directors should not demand the privilege of
looking into these reports as a matter of right. If the Chaj.rmen of the
Federal Reserve Banks are not capable of passing upon these reports so as
to give correct information to the BoardJ then it would be my opinion that
a Federal Reserve Agent should be secured who had such capability, and it
seems to me that the 3oard should in all ca~es be guided by the determination of the Federal Reserve Agent and perhaps the Governor of the bank as
to whether or not a member bank is entitled to credit it seeks. Certainly)
the information should not be peddled to the boards of directors of the
various banks, and by them in turn pediled to the boards of directors of
the branch banks. It is my up inion that the inf orn:ation the bJ:anch banks
get should be the direction from tne Governor and Fed.eral Reserve Agent
of the parent bank and not by such branch bank directors having copies of
the reports for their inspection and very often misuse.
"~~(')
..,LL,.c_ ·.' tCJ
-3-
X-3318a
I have just recently had coming from one of the big cities complaint that the reports of the Na.tional Bank Examiners were being
improperly used. This information comes to me in a way that I am not
at liberty to give details, but it is quite sufficient to enable me to
come to the conclusion that there shculd be some more rigid regulation
as to who should inspect reports. I am clearly of the opinion that
such inspection should be limited to the Federal Reserve Agent and the
Governor of the bank, and that their ccncl~sions as to the information
contained in the reports and not !..@.~ should be given to such
officers as are ·entitled to such information for their guidance and for
the guidance of the officers of the branch banks.
I am further clearly of the opinion that the copies of these reports
should not be and must not be delivered to branch banks for the use of
the officers of the branch banks, and it is my view in this respect that
only the conclusions as to the merits and solvency of the bank should be
transmitted to the officers of such branch banks with such directions as
the parent bank desires to give.
I do not desire 1 of course 1 to be captious or technical in laying
down these rules as I think they shculd be 1 but I think that such regulations are important to the welfare of the Federal Reserve Banking
System and necessary to inspire confidence with member banks that the
inside of their institutions will not be peddled or improperly used.
I think it is quite easy to understand that facts where they are known
to too many persons are quite likely to leak out, and for that reason
I am of the opinion that i t is highly important and proper that the
regulations I am suggesting should be enforced and lived up to religiously.
Respectfully submitted}
(Signed) D. R. Crissinger, Jr.
FEDER "t. RF.SERVE llO.ftRD
GOLD SE"''"''LEMEN"''.FUND
X- 3319
D. C.
Com'IDE"Nf!I n)
Feb rua.ry-..:h 1922.
Aggregate
!ggregate
witmrawals
deposits and
TRJINS FERS
transfers from -~·---~------------and transfers
Debits
t~ent 's fund ~nt 1 s fund
Credits
2,ooc,ooo .. oo .~
,ooo,ooo .. oo $
-$
856,881.~~
2,ooo,coo.oo
12,866,700 .. 00
2,884,594 .. 6
2,ooo,ooo.oo
8,800.00
1,325,561.62
4,007,tbO.OO
21,818,637 ·92
1, ooo,-ooo.oo
1,000,600.00
1,429,472.47
1,000,527,.75
4,146,809.10
230,900.00
1, 532 t 598.57
1,001,9E2-50
905,875·60
1,100 .. 00
578,816 .. 32
1 '001,llQO. co
5. 816,}22. 78
1,002,000 .. 00
825,037.89
7.393~000.00
11,425,959-05
Washin~tan,
Summary of transactions fer -periad. ending Ferruary 2, 1922.
.
Gold
Gold
Federal
·:s·ale.nce last
ment
Reserve
state
Withdrawals
Deposits
:Bank of
Jan. 26 • 1922.
Boston
New York
Pl:-~il ad e1phi a.
Cleveland
Ricmond
Jltlanta.
Chicago
St. Louis
~nneapolis
24,41 2,o2 6.32
. 102,788,506.13
49,489.952-55
/;5, ~5 5,539·83
24,483.322.59
20,648.5a3-33
73.395.2 1 .. 27
~>97 0,924.04
28,661,6£2.46
47,468, 386.27
10,57 3~514.92
31,25 5,&5 .. 40
~
J"
.a..."ls as City
Dallas
San Fre.neisco
---·
Total
1~ 503,703,255.11 I~
---
356,881.~
$
2,884,594.6
1,325.561.€2
1,818,637·92
1,429,472.47
1,146,809.10
1,532,598·57
905,875.60
578,el6-32
816,322.73
825,037 ·59
1,425,959.05
10 '000. 000.00
12,866,700.00
8,5oo.co
4,007,€oO.OO
1,000,foo.OO
1,000,527 ·75
230,900.00
1,001,9~·50
1,100 .. 00
l,Col,4oo.co
1,002 ,ooo .. oo
5.503.500.00
-
37 ,675,090 .. 25 I~ 53,546,567 .. 65 J $ 49,554,590.25
I$
-
4,coo,ooo.oo
-
I$
4,ooo,ooo.oo
--------~-------------------------------------------------~---------------------------------------------------------~---------------------------~~
furii at close
~--------------------------------------------------~----------~~
I
Net
Total
Total
:Bank of
of busiuess
Feb .. 2, 1922.
l
Net
· De"oit,s
:Boston
New York
Phi 1({de 1phi a
Cl evela..'I'Jd
"Ricbmo:nd
Jltlanta.
Chicago
St. t.o~is
Minneapolis
KansM City'
Dallas
41, 639.,070.64
*
I$
41,812.to2.22
CreC:its
Credits
Debits
$
4,172,934.91
95 ;217 ,838.46 $
99.390,773·37
354,422,561-96
396,061, 632 .. 6o
6, 1-fe '713 ..21
132.799 ,o41.72
126, 62~ ,328.51
106,632 .. 93
91 f 471,274-71
91,3 t 641.78
1 t. 689,584.78
100, £?79 .9~6.41
99' 190,351.63
2,974,225.87
39,401,122.45
42,375.3 8.32
10,52.1',464.15
193.613,948.. 01
183,092,483.36
3, 731,064.32
80,042,446.86
83,773.511.18
1,716,862.75
23,750,583.46
22,033.7?0-71
68,393,182 .. o1
68,566,713.59
848,445.57
37,917,238-18
37,068,792.61
9,881,613· 73
Q,8te!l18.14
4L_981,104 .. 41
1,282,65o_,l77·47 I$ 1,282,650,177·47 l$._41,812,602 .. 22
-
$
It
--,.._--.------------------------------....
Decrease
Inc1-ease
45,728,079-54 $
93.131,54o~8a
~,800,828.89
,479.931.91
11,598,922 .. (:o
37 ,104,34o.o8
I$
499.721,277·71
173.531.58
43,639,070.64
56,3li2 .904.1
47. 651,134.Sl+
26,744,034-90
20,67 6,477 .. 85
82' 665.006. 85
28,798,075-26 .
·-
173,531-58
~rencisco
rrota.l
Summary of changes in ownership 6f gold by "tanks through
transfers and settlements.
:Ba.lanc e in .
e";tlements from Janual"y' 27, 1922 to February 2, 1922
inclusive ..
Federal
Reserve
I$
-
$
2 t 172,934-91
-
8;169, 713.21
106, 632·93
2' 68~,584. 78
2,97 ,225·87
10,521,464.15
3.731,064.32
2. 716,8~. 75
-
848,445·57
9,881, ~73. 73
FEDERAL RESERVE
.AGENTS'
FUND
X-3319a
Surmna.ry of transactions for~riod. ending February 2, 1922.
Federal
~alance last
Gold
Gold
statement
Reserve
Deposits
Wi thd.rawals
Jan. 26, 1922.
.Agent at
~oston
li
New York
I
381,000.000
'Phi lade l'pbia.
I
I*
I
Cleveland
Richmond
I
Atlanta
I$ 1o,ooo,oco
5,000,000
I~
I$
I
10,0u0,000
I
31,295,000
3,000,000
45,ooo,coo
4,000,000
2,500,000
6,000,000
10,000,000
6,000,000
2,000,000
1, 700,000
2,000,000
Minneapolis
3,000,000
~
24,3Eo,ooo
1,000,000
San Francisco
I
Total
1~ 1,452,430,260
4,000,000
I
I
5,500,000 .
J$
20,000,000
I$
15,200,000
ji11,889,500
381,000,000
125.389,260
lto t oco ,ooo
28,295,000
~6.500,000
29 6, 644,500
1,700,000
62,700,000
9~200,000
. 6,000,000
5,.000,000
1,889,500
204,057 ,500
I
I
I
I.
120,0CO,OOO
10,000,000
·-
1,484,000
Dallas
3,000,000
...
9,200,000
Kansas City
•
20,000,000
63,000,000
St. Louis
f$
5.ooo.ooo
292 • 644, 500
Chicago
I$
20,000~000
14o,ooo.ooo
I
I
_(_CONFIDENT !.A L)
Deposits
Total
through
transfers
Withdrawals
from bank
Withdrawals
for
transfers·
to bank
'------"'-
I
I
I~
130,389 ,2Eo
· 130 ,ooo~ooo
Washingtan, D. c.
February 3, 1922.
Total·
13a.lance at
close of
Deposits
business
Feb. 2, 1~2.
-
30,Jf:o,OOO
1,484,000
10,000,000
I$ 38~000,000 J$
1,889,500
31,889,500
10,000,000
l't
212,168,000
53,200,000
j$1,473,74o,760
~
. ro..
~
,./"
<~
FEDERAL RESERVE BOARD
WASHINGTON
X-3320
February 41 1922.
2UBJECT:
Discount and Premium on Uni tsd Stc"t.es S'3r:ur:; t i.es_
Dear Sir:
Reports received by the Board during the past few
weeks indicate that considerable amounts of Victory Notes
are being pu~chased by certain of the Federal Reserve Bru1ks
at a premium.
In order that the amount and annual rate of earnings
on United States securities may be correctly stated, i.e. 1
based on cost price, it is requested that premi~~ paid, if any,
on United States securities purchased by your Bank be set up
in a separate account, and that such premium accolmt be
credited and the bankts earnings on United States securities
debited wi tn the proper amortization char-ge either daily or
at the end of each month. J.~ikewise, should the bank purchase
United States securities at a discount, the runount of the
discount should be set up. in a special account, "Discount on
U. S. securities", v:hich account should be charged and the
Bank's earnings on United States securities credited with the
appropriate amortization charge either daily or as of the last
day of each month.
On balance sheet 1 Form 34, the discount or premium
accounts may be combined and shown against the caption
"Discount and premium on U. S. securities", code BH~D. The
amount of such discount or premium should 1 of course} be
treated as a deduction from or addition to the par value of
earning assets in order to obtain tha 11 liq~jd value of earning assets 11 to be reTlorted on daily balance shee};, Form 34.
Very truly yours 1
G o v e r n o r.
Letter to all Agents.
.""') t::'
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•
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Iii
FEDERAL RESERVE BOARD
WASHINGTON
Febr~ary
8, 1922.
X-3322
SUBJECT~
Negotiability of Promissory Notes Secured by
Chattel or Real Estate Mortgages.
Dear Sir:
fer t:10 il1for:i.lo.Cic.~.~.1 e;~ :··w,.i.e.i~al ReserJe .Jb.2..~:~13 ..
there is enclosed herewith a co~y of the Board's lettar
to Governor Calkins, with refere~:ce to the negotiability
of notes secured by chattel or roal estate mortgages~
togetner with copies of a brief resume, and detailed
memorandum cf law, on the same subject prepared by the
Counsel to the Federal Reserve Bank of San Francisco.
Yo'.lrs very truly,
Enclosures ..
To Governors and
Federal Reserve Agents.
Go v e r n o r
..
,l
-·~ r-.P·~
c
0 'P
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y
FEDERAL RESERVE BOARD
Washington
X-3322a
February 2, 1922.
Mr. J. U. Calkins, Governor,
Federal Reserve Bank,
San Francisco, Califnrnia.
Dear Governor Calkins:
Receipt is acknowledged of your letter of January 20, 1922,
enclosing copy of a memorandum of law on the general subject of the
negotiability of notes secured by mortgages, together with a brief
resume thereof, both prepared by your counsel 1 iJr. Agnew.
The Board has submitted these memoranda to its counsel, who
has gone over them with much interest. He states thac the brief contains
an excellent discussion of the question and a most helpful compilation
of authorities, and that in his opinion, the other Federal reserve bar.ks
and their counsel wculd be very glad to be supplied viith copies of both
the brief and tne resume. The Board will, the ref ore, circulate these
memoranda among all Federal reserve banks. As you indicate in your letter,
these memoranda will serve to impress upon the Federal reserve banks the
legal uncertainties involved in dealing with certain kinds of paper and
the importance of determining the state of law obtaining within their respective districts.
Under the conflicting state of authorities it is impracticable
to make a general ruling coveri~g all possible situations or to rule that
mortgage secured notes originating or payable in certain States are or are
not negotiable. Such questions of negotiability must be determined by
reference to local laws and decisions and are 1 therefore, primarily for
the determination of local counsel. In view of the fact that the courts
of Ce>lifornia ar"d a few other States appear to have rejected the majority
rule and to have held definitely that notes are non-negotiable i f they
recite that they are secured by chattel or real estate mortgages, the
Board desires to call your attention to its former rulLngs to the effect
that non-negotiable notes are ineligible for discourt by Federal reserve
banks. ·.dth respect, however, to notes the negotiability of which cannot
be determined with reasonable certainty under the relevant statutes and
court decisions, it seems proT'er for Federal reserve banks to assume that
the majority rule would be held to aprly, and the Board's former rulings
need not, therefore, be construed to prohibit the discount of such notes.
As pointed out in your counsel's memorandum, the question of what law
governs the negotiability of a note is often a difficult one to decide.
Yours very truly,
(Signed)
WSL:B
1i,
P. G. Hardin&
Go
v
e r n o r.
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2_,_ i(j
C0
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FEDER,dL REPERVE BANK
San Francisco
January
20~
1922.
X-3322b
SUBJECT:
Negotiability of Promissory Notes Secured by
Mortgages.
The rule of laiv in force in a majority of the states
is that the negotiability of a promissori note~ othenvise negotiable in form, is not affected by the fact that i t is secured
. b 1 a chattel or real estate mortgage. I..:1 most of the states,
also, the mere fact that such negotiable note states upon its
face that it is secur~d by mortgage, does not militate against
its negotiability. The above rules are suprorted by the great
·vveight of authority.
On the other hand 1 it is generally held that in those
cases where a note, otherwise negoti1'l.ble in form, in terms adopts
the provisions of an accompanying mortgage, as where the note
states that its payment is "subject to all the terms and conditior.s"
of the mortgage, it is thereby rendered non-negotiable.
The majority rule above stated is followed in the United
States courts in Alabama, Arkansas, Color1'l.do, District of Columbia 1
Mississipri .. New Jersey, NeVI York~ North Carolina, Oklahoma,
Oregon, Texas, \iashington, and many other states.
The majority rule is rejected in whole or in part in
California1 Illinois, Imva, Kansas,. Michigan, Minnescta, ar.d Utah.
In Idaho, Nevada and Arizona and several other jurisiictions, the
question has never been directly presented for decisio~.
In
Missouri, Montana, Nebraska and 1iiscousin, the decisions are in
conflict and it is difficult to say what conclusion tne courts
of these states vlill reach v.hen the question is again presented
for interpretation under the terms of the ~egotiable Instruments
Act.
An explanation of the processes of reasoning by which
the states fo1lov1ing the minoritJ rule have reached the conclusion
that· promissory notes, other.-•ise negotiable in form, are rendered
non-negotiable when transferred to one having knowledge of the
existence of an accompanying and supporting :nortgage, cannot be
undertaken within the scope ·of tr,is memorandum.
··:~ ~~~.(~
~-r"- ,.q__.,
X-3322b
The law of the rlace of ccmtract or tna place of payment
generally governs the interpretation of the instrument.
A note
executed and payable in California~ coming into the bands of a
purcnaser residing in Ne·•· York willJ as a general rule .. be interpreted as to its negotiability in accordance iiitb tne law
enunciated by the courts of Cclifornia. In order~ therefore, to
determine the negotiable charact0r of a note secured by mortgage~
i t will not suffice to rely upon the rule applying in tne jurisdiction wnere the instrument is held, if the obligation originated
or is rayable in anotner jurisdiction. ReferenceJ in such case,
must be made to the law as set forth in the decisions of the courts
oi the state of origin or payment.
For a fuller discussion of this important phasa of the law
of negotiable instrumants, reference is made to the accompanying
brief.
(Signed) Albert C. J,gnew,
Attorney.
•I
X-3322c
MEM'ORftNDtTM OF AUTFORI'T'IES
IN R'F
N'EGO't'!liP!LI'i:IY OF l'ROMISSORY NOTES SEClJRED BY MORTG.AGES
-:1 "i' -1
-.;_;..._.'", j~
X- 3322c
- 1 -
TV!EMORNPDUM IN HE NEGO'l'lPBILI'l'Y OF 1'::\0MISSORY
SECIT:"'~
NOTE~
BY MOR'T'Gf'GES
IN'T'RODUC'T'ION
The question of the negotiability of promissory notes secured by
mortgages is one of considerable importance to Federal reserve banks •
If the note is negotiable, although secured by mortgage, it is not
s ut j ec t, in the hands of an innocent purchaser for value before rna turi ty, to any equities ~s between the mortgagor and the mortgagee.
If,
on the other hand, the court holds that the note is rendered nonnegotiar le, either ry re1'lson of the fact that it is secured 1·y mortgAge
or by reason of some provision contained in the mortgage, i t is su·cjec t
in the h21nds of an innocent purchaser for value before maturity to any
defenses which the mortg3gor may have ag2inst the mortgagee.
Thus, if
the note is held to be non-negotiable, the Federal reserve l:ank which
may have purchased the note in good faith and without notice of an.y
defense to the payment thereof may, .when suit is brought to effect collection through the foreclosure of the mortgage or otherwise, be confronted with a defense of fraud or failure of consideration which may
partially or entirely defeat e. recovery upon the debt.
WHPT LP.W GOVRRNS
.An investigation of this su'Dject necessarily involves also an investigation of the question as to what law will govern the interpretation
of the contract involved in the execution and delivery of the note secured
by mortgage.
For instance, if the Federal Reserve 13ank of San Francisco,
',I
-:1
~.q
~'\....- ..;,....:..;.;
X-3322c
- 2 by an assignment made in
C~lifornia,
becomes the owner of a note executed
in Illinois and secured ty a real or :personal mortgaee upon property located in Illinois, the questiol'l of whether the negotiat ili ty or non-negotiab ili ty of such note is to ce determined under the law of California or under the law of Illinois l::ecomes vital.
The general rule is that a contract, as to its validity and interpreta tion, is governed by the law of the place where it is rr:ele - the lez: loci
contrectus; or, more accurately speaking, that contracts are to ·oe governed,
as to their nature, validity and interpretati9n, ty the law of the place
.
where they were made, unless the contracting parties appear to have bad
some other place in view.
The law cf the place of contract in general determines the
of the instrument.
ne~otiallility
This is especially true where the place of the contract
as well as the place of
p~ent
are the same.
In other words, a note se-
cured by chattel or real estate mortgage, executed in Illinois and :payal·le
in Illinois, will, in the bands of a purchaser residing in CE~lifornia be
interpreted f's to its negotiarility, not in accordance with the law of California, but in accordance with the law of Illinois.
Where the place of pay-
ment is different from the place of contract, it is usual that the law of
place of payment governs.
Thus 1 under ordinary conditions a note secured
by.~·chattel or crop mortgage executed in Illinois but payatle in Crlifornia
would te interpreted in accordance with the law of C&lifornia.
In some
caees, however, the law of the place where the instruwent is executed has
been held to control rather than the law of the place of pay;:'ent..
however, is the exception to the rule.
This,
Where the q_uestion arises as bet~Veen
an indorser and the indorsee, it has been held that the contract would be
·~1 ·~C)
.......:_-._,)U
X- 3322c
- 3-
governed by the law of the place where the indorsement v;ras c.ade.
On the
c1ther hand, however, the place of execution rather than the place of indorsement §'overns where the action is by an indorsee a€2inst the ...-..Jaker
or the drawer.
'..i
If a ~-:ill is negotiatle ry the lav'l 'Yerchc-nt, it is presurr.ed
to te negotiable ry the law of the place of contract in tl'.e a·~. sence of
proof to the contrary.
.As a ge.-:teral rule, the law of the place of con...
tract governs the general liarllity of the maker, except in so far as controlled l'y the law of the place where the instrument is paya:ble •
If no
particular place of payment is specified, the law of the place of contract goYerns.
As a general rule, the liability of the rraker to others
or his right to set up an e1uiteble defense will be unaffected ty the
law of the place of
tr~nsfer.
Thus, it may le said to 1·e the prevailing rule tha.t a note secured
ty mortgage on chattels or real property executed in California an.i pay-
able in California will be interpreted by the law of the place of execution, whPrever the action may arise.
It may a.lso 1::e sail to 1: e generally
·.
true that, in the al:sence of a definite statement
G
s to where the obliga-
tion is payable, the contract will be governed according to the law of
the State of California even though payrrent be derranded in another jurisdiction.
The determination of the '-luestion of what law shall govern ·:,ecomes
extremely important in interpreting the ri§ht of a maker of a note secured
by mortgage, to equita1·le defenses age>inst a ·bona fide purchaser for
value before maturity, on account of the fact that the courts of the several states have reached widely different conclusions upon the subJect
and, on account of the fi"C t that ev.en in those jurisdictions the courts
of which·~have held simil-3rly, the processes of reasoning by which the
X-3322c
- 4conclusions are reached differ very wi·iely.
Herevvith follo·ns a brief resume
of the decisions of the courts of several jurisdictions in regard to the
negotia1: ility of promissory notes secured by rr.ortgages, the decisions of the
United States courts reing. reviewed firstj thereafter the decisions of the
courts of the states emtraced within the TWelfth Reserve District, anJ lastly
the decisions of the courts of several other states not em:. raced in this
district.
GENFRftL RULE .
The doctrine has ·r,een laid down in a number of cases and is stateJ. ty
Mr~
Hilliard in his treatise on mortgages that, if a
mort~a~e
is [iven to
secure a negotia~le note, and ~oth the mortgage and the note are transferred
for value before maturity to a .bona fide 1niorsee, such
benefit of the mortgage as well as of the note,
the original parties.
cle~
indo~ee
of any
This doctrine, which may re said to be the
rule, is }ased upon the theory
t~t
takes the
e~uities
retween
""~ority
it is the dect which gives character to
the rrortgage and fixes the rights and remedies of the parties under it, and
not the mortgage 1"-hich determines the nature of the dert.
In many cases, he-wever, this doctrine is denied on the ground that the
mortgage is simply a chose tn action, and is taken surject to the accounts
between the mortgagor end the mortgagee and while it is an incident to the
debt, the benefit of which, so far as the assignor is concerned,
with it, the assignee cannot rely on the privileged character of the note
to insure him the advantage of the mortgage.
The courts which have so held .have generally reached the conclusion by
stating thrt the assignee, having to resort to
is corr:pelled to do
e~uity
to enforce his rights,
to the mortgagor and allow him the right of all de-
fenses against the mortgage.
e~uity
Under this rule, although the purchaser of a
...... .t'
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,..;_;_~;
X-3322c
- 5-
note before maturity takes it free of any e'iui ties existing between the original parties, yet, if i t is secureJ by r::wrtgage, the non-assignable character
of the aecuri ty 1ualifies his rights and rerceiies upon the not.e and rr.akes
it subJect to all defenses and e1uities to which it 'tvouli le liable in the
hands of the assignor.
Under this view, the rights of an assignee seeking to
foreclose a mortgage are deterrrinei by the principles of e'iuity applicatle
to non-negotiable instruments and not by the law rr.erchent, and since a mort•
gage is a non-negotiat.le instrument, an assignee takes it sucject to all
e~uities and defenses between the original parties, even though the mortgage
•
der t is evidenced by a negotiat le prcmissory note ttansferred to the assignee
for value, before maturity..
This may oe said to be the rrinority tule.
Jones on Chattel Mortgages, _7th Eel. par. S}S.
This doctrine has teen followed in Minnesota, Illinois, Ohio~ Kansas
and several other states, 1::ut in Illinois, where this rule h,'ls teen followei,
it is held not to apply to deeds of trust given to secure railroad coupon
1
onds intended to
'he
Peoria Railroai
thrown upon the market and
Co~
circul~ted
as co:rn::eraial
paper~
vs Thompson, 103 Ill- 205.
Mr. Daniel in his work on Negotiable Instruments, (6th Fd. par.
834)
<'Lis approves of the doctrine last stated which sutj ects notes, secured ly mortgages to any defenses availat le by the mortgagor against the mortgagee and
states that the fanner rule seems tb be tre e::t,uitatle and just one.
It is
clear, however, that even the majority rule 1 that an innocent purchaser of a
note secured by mortgage is protected against any e:1uities existing in favor
of the mortgagor, is sucject to this limitation; that if the land or personal
property covered by the mortgage was surj ec t to a :prior lien of a third party.
the indorsee of the note would only a,cluire the right to enforce his claim
against the land or personal property sur jee t to such lien, wpether he had
__:,cl
X- 3322c
- 6notice of it or not.
l
~his limitation arises from the very nature of the
transaction, as the indorser himself could not,'by a negotiable or other
contre>ct, supersede the :rre-existing rights of a. third person, not a. pttrty
Thus, even in those st~tes which hold to the strict rule of
·to his a.ct.
negotial:: ili ty of notes secured by mortgage, it is held t~t wherever the
assignee is chargeatle with constructive notice of an e~uity prior to the
mortgage under which he claims, he rrust yield to itThe mere f~ct that a note is secured by a mortgage does not of itself
affect its negotiability, except in CPlifornia, and under these
circurr~
stances the assigmrent of the mortgage cannot affect the negotiatili ty of
the note.
One class of
c~ses
holds that where a mortgage is delivered at
the same tiwe as the note, provision in the mortgage rendering the amount of
the note or the time of payrrent uncertain, destroy the negotiability of the
note in the hands of all persons charged with notice thereof, especi?lly
where the note expressly refers to the mortgage.
Jones V. Dulick (Kans. fip~.) 55 Pac. 522t
Brooke v. Struthers, 110 Mich. 562; 68 N. W. 272,
Cornish v. Woolverton, 32 Mont. 456; 81 Pac. 4
Roblee v.· Union Stockyards National Bank, 69 Nee.
180; 95 N. W. 61;
Kendall v. Seley, 66 Nee. to; 92 N. w. 178
Donaldson v. Grent, 15 Utah 231; 49 Pac. 179·
There are, however, many decisions holding to the contrary, and in
which particular mortgage provisions which, if contained in the note, would
destroy its negotiari1ity, are held not to affect the negotiaeility of the
note
o ecaus e
they relate solely to the security.
The courts of many of the states have held that
te;rpor~meously
together.
executed as part of the same transaction will te construed
If, construing the instruments together, the mortga§:e irrports
into the note conditions which render it uncertain or
othe~vise
violete the
·~)[_~
-L--:'.1_)
X-3322c
elemental principles of negotial i l i ty, the note •vill be rendered non-negotiable.
Irooke v. Struthers, 110 Mich. 5&; 6S N. W. 272,
Cornish v. Woolverton, 32 Mont.456; Sl Pac. 4.
But construing together simply rr.eans that, if there be any provisions in one
instrument limiting, explaining, or otherwise affecting the provisions of
another, they will be given effect as between the parties therr.selves and aU
persons charged with notice, so that the intent of the parties may te carriec1
out. and the whole agreement actually made, may "'Je effectuated.
The courts
have usually held that this does not mean that the provisions of one instrurrent are irrported bodily into another, contrary to the intent of the parties.
They may l:::e intended to be separe.te instrurr.ents, and to provide for entirely
different things.
Hence the provisions of a mortgage securing a conternporan-
eous note, which rrerely relate to the preservation of the security, are not as
a rule construed as a part of the note so as to destroy its negotiatility.
Thorpe v. Mindeman, 123 Wise. 149; 101 N. W. 417.
So, also, where the provisions of a contemporaneous written
instru~ent
are contradictory and repugnant to the till or note, it is usually held that
they will not le construed together end that the provisions of the note control.
White v. Miller~ 52 Minn~,
(3 R. C. L. par 54.)
367; 54 N.
W.
736,
In applying these rules. however, the courts are far from teing in
harrr.ony.
Conceding the general rule that a note ~ay te rendered nan-negoti-
atle ty ree.son of provisions in the n:ortgage executed and delivered with the
note and as part of the same transqction and referred to in the note, it rerr:ains to 'ce considered what particular provisions in a mortgage will so render the note
non-ne~otiab le.
P.s a general rule, it rney 'c·e stated that, when
X- 3322c
- 8-
the note adopts the terms of the mortgage es a part of the contract and the
terms of such mortgare are such as to make the note uncertain or conditional
11s to amount, the tirre of payrrent or the like, it makes the note non-negotiable.
Des Moines Savings J3ank v. llrthur, 163 Iowa, 205
143 N. W. 556.
Garnett v Meyers, 65 Neb.280; 91 N. W. 4oO, 94
N. Tfl.
803.
On the other hand, if the provision of the mortgage, even if actually
incorporated in the note, wou1drot affect its neg,otiability, the mortgage
provisions have no effect on the negotiability of the note, except in Cali-4
forniaFarmer v. First National Ean~fArk. 132.
Hunter v. Clarke, 184 Ill. 153; 56 N. E. 297.
Des Moines Savin.2s J3ank v. Arthur, 163 Iowa, 205;
143 N. W. 556,
Cox v. Cayan, 117 Hich. 599; 76 N. W. 96,
Blumenthal v. Jassoy, 29 Minn. 177; 12 N. W. 517,
Bradbury v. Kinney, 63 Neb. 754; 39 N. W. 257,
Cunnin?ham v. McDonald, 98 Te~cas, 316; 33 S. W. 372,
Thor!)e v. Mindeman, 123 Wise. 149; 101 N. W. ~17.
Likewise if the mortgage merely provides for the loing of an act which it
would be the duty of the party to perfonm independently of such provision,
the ne9 otiability of the note is not affected.
Wilson v. C~'>mpbell, 110 Mich., 530; 63 N. 1'J. 278;
Bradbury v. Kinney, 63 Neb. 754; 39 N. W. 257·
Some courts teke the extrerr:e position that provisions contained in a
conterr.poraneous mortgate which, if in corporated in the note would destroy
its negotiability, do not affect such negotiacility, as they rel8te wholly
to the .security rather than to the indebtedness.
P more or less common pro-
vision in a mortgage in some states is one requiring the mortgagor, 'that is,
the maker of the note, to pay all tl"'xes levied on the land or the mortgage,
or insurance, and sometimes providing that in default thereof, the whole
- 9debt shall be payable at once.
X-3322c
Such provisions contained· in the. mortgage
Michig~n,
are held to !T'.ake the note non-negotiable in Kansas,
1Je1'raska and Utah.
Montana,
On the other hand, the contrary is held in Colorado,
Illinois, Iowa, Oregon, Washington and Wisconsin.
The latter decisions
proceed on the theory thet such provisions in a mortgage relate wholly to
the mortgege security end not to the indebtedness.
Likewise,
on t:tis theory
it W8s hel1 in Oklahoroa rrior to the adoption of the Negotiable Instruments
let that provisions in a mortgage for attorney's tees upon foreclosure did
not ,affect the
negoti~rility
of the note, although it
'NOUH
have been other-
wise if such provisions were incorporated in the note.
F.9rrr:ers National :Bank v. We Call, 25 Okla. 600;
lOh Pac. 8h~i 26 L.R.Jl.(NS) 217 and Note.
From the above it may be seen thet the decisions of the various courts
are widely divergent in considering even the sarre rratter and under the same
state of facts.
I have considered, therefore, that the only thorough rrethod
of investigating the subject is by an examination and review of the decisions
of certein of the state courts.
RUL'F I"N
~'~'!.l'E
UN!'T'FD
S'r~rrt<:S
COUR'l'S
The generel rule, accepted by the United States courts, is that the
assi§"!nee for value "before maturity of a negotietle note and the mortgage
securing it, without notice of any equities in favor of the mortgagee, is
unaffected by any e~uities to which the note would te sutject in the hands
of the mortgagee.
ag<~inst
Uron foreclosure no other or further defenses are allowed
the mortgage than would te Pllowed i f the action were "brought in
a court of law upon the note.
National Livestock Bank v. First Nat. Tank, 203
p.s. 296 (affinTing 15 Okla. 194; 75 Pac. 130)
Chicago R~ilway E1uiprrent Co. v. Merchants
NationPl Ban"k~, 136 U. s. 266- 2S3,
Sawyer v. Prickett, 19 Wall (U.s.) 146,
SNift v. Smith, 102 U. S. 442.
- 10 -
X-3322c
In the ease of Carpenter v. Longan, 16 Wall. 271 (U.S.} the Supreme
Court said:
".All the authorities agree that the debt is the principal
thing and the mortgage an accessory. E~uity puts the principal
and accessory upon a footing of e~uality and gives to the
assignee of the evidence of the debt the same rights in re@:ard
to both. The mortgage can have no separate existence. When
the note is paid, the mortgage expires. V~en the amount due on
the note is ascertained in the foreclosure proceedings, e~uity
recogni-zes it as cone lus i ve and decrees ace ordingly. 11
In the case of Smith v. Nelson Land & Cattle Co., 212 Fed, 56, the
collateral mortgage contained a provision that in the event of certain
contingencies, the whole sum for which the notes were given might te declared imrr.ed.iately due.
It was held that such provision did not destroy
the negotialility of the note.
In the ease of Chicago Railway Equipment Company v. Merchants Eank,~36
U. S. 283, Justice Harlan, speaking for the Supreme Court, said:
If the notes had been in the usual form of promissory notes,
and the maker had given a mortgage tack to the payee, the title
would technically have been in the payee \\ntil they were paid.
rut they would, in such case, have teen negotiable securities
protected in the hands of bona fide holders for value against
secret defenses, and their immunity from such defenses would
have been communicated to the mortgage itself. In Kenicott v.
Supervisors, 16 Wall. 452, 469 1 it was said that where a note
secured by a mortgage is tr~nsferred to a 'hona fide holier for
value before maturity, and a bill is filed to foreclose ·th~
mort:gage, no other or further defenses are e llowed a.e:e ins t the
mortgage than would be allowed were the action brov.ght in a
court of law upon the note."
11
In the United States courts it has been held that tne mere fact that
c;,
Mte contail:o
on its .Lace a reference
to collateral security for the
payment thereof, as where a note contains a provision th'1t is is secured
by
a lien on real
est~te
or. thet is is secured l:::y mortgage, does not de-
stroy its negotiability.
De HaS's v. Dibert 70 Fed. 227.
.·J
'~
...;.L'...;.:.JL
X-3322c
- 11. 1.~ere,
however, the mortr:::ge provides thPt upon a f!>ilure of the rrort-
gag or to pay tpxes 1 they may l,e paid by the mortgagee end
the
~r.oount
shc~ll
te added to
of the note and be recoveratle in a separate action on the note· ,
it has t.een held in the United Ste.tes courts th:ot such provision renders the
amount of the note uncertBin a.nd destroys its negotiability.
Far~uar v. Fidelity Insurance Co. Fed. C~s.
Hovel..1. v. Toa..:L, ]'ed. CPs. j,'t>[/56.
*4676
A cle-or distinction is rr1>de in the Federal decisions between notes se-
cured by mortg.':\g's which rrerely stP.te tlwt they e.re so secured and notes secured by
mortg~g?s
of the mortgage.
vvhich in
tern·~s
adort or
incorpor~te
into .the note tl-·2
t?l
Thus 1 in the ce.sa of Klots v. M?nufl"cturers Corr:rr:&tciel Co.,
wrp.s
179 Fed. 813, the promissory note/ in the usual form except that it concluded
with tre followine words: nsubject to the ter11"s of the contract between JT.i.fter
and pt:>yee of October
25, 1905. 11
The court in passing upon the note sEtid:
"V:e think thPt whenever the ]_:'ayr'ent of a note is expressly
made subject to tl;e eq:uities gro·'!itl!; C"vlt of 1 and defenses based
upon, an existing or contempbr,c.necus agreement, a person tGking
such note hold.s it subject to such e;uity end. defenses."
It would "':Pre.<=>r from the ~bove thr>t where a promissory note st--tes th:?t
it is "sutJect to the terns
oft?
cert"'in mort§:-"'Re (or deed of trust) of even
dr>te herewith" there can be no ';l.U8f'ltion that in the United. States courts
terrrs cont<"ined in the mortg."'ge mili tl"t ing
ag~>ins
t negot iab ili ty will atfect
the note.
It seerr.s thl"t in
CC~lifornie
.vhen a note is secured by a conterrpor<>neous
mortg,.ge, whether on real or personal property, both
instrurre~1ts
having ueen
executed as pert of one tnmsaction, the said note, vvhether negotiaole in
form or not, is non-negotiable in feet if taken with notice of the existence
:i
1
~
()
-J.. -""'--.;
X3322c
- 12 of the mortgage.
11
Thus, in Cr-liforniA 1 if a promissory note merely states,
this note is secured by mortg"ge (or deed of trust) of even date herewith,"
any person taking the note takes it subject
to notice of the existence of
the mortgage, and, therefore, subject to any equities existing between the
original mortgagor and mortgagee.
In cases where the note rre>kes no mention
of the f~?ct th""t it is secured by rrortg"ge And it comes into the hancis of an
innocent purch%er for value before maturity and without notice of the fact
thAt it is secured by mortgage, the 'iuestion of #hether the assignee tFkes it
free of equities seems to be in doutt in California.
The
leadin~
case on the subject in question,is thPt of Meyer v. Weber,
133 C.,l, 631, decided in 1901 1 before the adoption of the Ne<;:otiable Instrurr.ents Jlct in this stl"te.
nepotiable in form.
The note upon which the action was brought was
It cont~'ined, however, the following provision.
"This note is secured by mortgage of even date herewith"·
And th2 mortg<'ge conVined provisions which, in the +,hen existing state of
l~w. would, if incorporated in the note, have destroyed its ne§'otiability.
The court stAted
~>s
follows:
"The only ::a_uestion rresented is, whether the instrument in
suit is e negoti~ble promissory note. The appellant contends
thAt it is, en'l_ the>t it rr:ust be considered sepe.rate from and
independent of the mortgage given to secure the sarre; th~t the
clause, (this note is secured by mortgage of even date herewith,)
,.,,ay be 1is:reg--rded ~s forming no,part of the obligation to p~y
as specifiei in the note, 13ut the mortge,:e was delivered at the
san:e tirr:e as the note, reletes to ,the sarr'8 subJect matter and
they fol'ql. subst<ntia.lly, one tr.<>nsaction. They must therefcre
be trken "nd considered together. , }ln independent action on a
promissory note secured by F.Ortg?g.e is :r'rohitited in this state.
Trere can be but one action for the recovery of eny dett or the
enforce))'e·,rt of eny ri§'ht secured by Fortge.g.e upon re?l est9.te
or :cerson;:,l "!_Crorerty, Nhich ~ction must. te in accord?·nce with
the rrovisions of this ch<J.pter (C.C.P. 726) • • • • The assi['nrcent end tr?nsfer of the note ani mortra~e in {Uestion, therefore, wa.s without ·prejud.ice to any set-off or other defense
exisUn:-: in favor of the defendants, the sarre as thouc_h there
hl')d. been no assipnr1ent and. the action h"'d teen brou&ht ty the
c~mpeny to whom they •vere ?iven."
1
~
n
-''-'.-c:.t_)
- 13 -
X-3322c
In the case of Srriley v. Watson, 23 CPl. lp-p. 4c·9-412, decided without
reference to th9 provisions of the Nef.otietle Instruments Law, the note provided
th~t
princip~l
i f the interest wes not ]"aH .:;_ue.rt ., rly •.vhen due,
the whole sum of
end interest should becor:e irr·ediately due and :pt>cyalle at the option
of the holder of the note.
The court decided thet this provision of tr..e note
itself destroys its negotiPb ili ty.
This
1
of course, hAs l:een ch~·need in CE' 1-
iforni~ since the passafe of the Ne£'oti~:\1-·le Instruments Law.
J'y w~y of ~Uct)"\ 1
however, the court eaid:
u Pp~.e
llPnts insist! 1. Tht>t there 111/.<>s no f,"'i1ure of considerfor the note Pncl deed of trust; 2. Concedinc.: such foilure,
the note was nerotiPl:le, ec1uired ·r,y defe.1.iant tefore me.turity in
fCOd faith and for va.lue, end hence not surject to the defense of
went of consideretion . . • • ,
~tion
"In su"'port of tha second. propostion, that the note is negotia'ble, appell~=mts insist that the eivinf: of a mort§:'age to secure
payn-,ent does not affect the neg otiar i l ity cf a note, citing the
cese of NbDoneld v. Randall, 139 C,·l. 24ti, which holds th?t the
giving of a mortgage to secure the :pavrent of a negotiatle :pron'issory note ioes not affect its negotia1:ility. This, however, is in
direct conflict with the c so of ~~eyer v. Weber, 133 CaL 631;
Brif:.;<s v. Crowford, 162 C'?l. 129; ~nd \1atio:1.al E2rd•vood Co. 'Y. Sherwood , 165 Cc- 1 . 1 • , • • . • •
"V.Te 1'\re unecle to distincuish e tr'"nsnction •Nhere such a cl~use
(inaturin"' tho note at the option of tre holder upon default in rayment of interest) is inserted in Uce note from one vherein i t is
orritted frm the note 1 but inserted. in the mortga[,e construed Ni th
~nd. considered ~>s a p~>rt of tro note.
If in the le.tter cese it renders the note non-ne;rotia.cle, its insertion in the note itself must for
like reasons hpve like effect. 'T'he ·vei;JJt of euthority elsevhere
su-:-r.orts the contrr>ry view, a.nd we wouli be re1uctent, by reason of
the iYr:_rortBnce of the question ns affectin~. the corc·erciel interest,
in following the doctrine an--lOunced in Meyer v. 'Jie'ter, were it not
for the fr>ct thet in the 1"'tEl cr>.se of NetionD.l Hardwood Co. v.Sherwood, 1c.5 Ce.l. 1, the Supre"'e Court, Sittin::: in b:mc, reiter.;ted the
:"I octrine and reesserted t"ll'lt such provision contained. in a mcrte ~ro-e,
'but orri ttr;d from the note, is o'bno.:.dous to section 3033 of the Civil
Code, 2nd x·end.ers the note noil.-nezotit"c:le. 11
In the c".se of N,"'tioill3l r:r,.,_rdwor:d. Co. v. Stervvc·O·i (Supre) the note
e·cpe,rently cont,"in:::d. no
ter~
s Nhich rrould des troy its ne§.otie:t ili ty.
The
- 14 -
X- 3322c
:J ~ .1!
_:_f_~ ~i.e.
mortgage, however, provided thn upon default in the payment of interest
on the note, the holder should have the ortion to declare the whole sum
due immediately.
'~'be
note ""n<i mortgeee having been executed -s;rior to the
adoption of the Neootiable Instruments .f\ct in this state, it was construed
under tbe rules then edsting, without reference to that act.
The court
held that the fact that the note strted upon its face th8t it was secured
by a mortg<'ge, rendered it non-neg,otiab le •
The opinion is in part as
follows:
"It appears to be settled ty the decisions of this court
that where a note is secured ty a mortfFge on land, toth being executed at the same times, or as parts of one transaction,
the note, al thouth ne§',otiab le in form, is not ne§otiable in law,
'll"here the :rurchaser takes it with l:nowledge of the existence of
the mortg?§:J=" . . . . • . . It should be remarked, however, that
in the present. C"'G8 en:i also in Meyer v. v:eber Pnd Bri~gs v.
Crpwford, the note recited th?t it was secured by mortga.ge. The
result Wl"s thnt no :persr.n could receive the note as indorsee
without notice of the fact th£".t it was accompanied by the mortgage. T..8ere is nothincr in an_y_.of the decisions which would
support th~_~l.Q.,!.m, should a c2se a.ri~th,qt, in the absenc~
of any such___££gj__i?l in the note, one who shouLi--.1:urchase it for
value before :rr.aturit,r_, in good fai tJ~ ani v~. th_out Knowled)e or
notice of the.J::QQ_r'tQao~couJ:d not hold it ;: s a ne2otiab le ins trument and free £:rom cm,v defense whi£h the maKer might have as
MElins t the uayee or eny_previous holdsr. 11
In the cese of Metropolis Trust
.l?,:
Savinr,s Bank v, Monnier,
lF9 CaL 595,
the appellants sou~ht to avoid the effect of the dicta in the case lezt ~uoted
by calling to the attention of the court the fact that the note contained no
reference to the mortgage end that the mortgage contained no covenants not
:permitted in a nePotiable instrument.
The court, however, refused to sus-
tain the contention, saying:
11 The note and mortgafe 'Nere rrade, executed anC.. delivered
simultaneously, Jill of the trensfers involved in this l i tigation were of the note 8nJ mortgage. The plaintiff ana f 1rs t
intervenor pr.?y for relief based upon a ccven"':'1t of the mortga~e not contained in the note.
So far ns all of the parties
to this liti§ation sre concerned, the note and mm:tga~e were
knovm to be co-existent and interdependent. They were non-
'-~
-.~
nerotiable. To make them so it Rc:s not necessary that the
note should state upon its fece tt:?t it was coupled with a
mort:::age."
Thus it can ·be seid tr.LPt the courts of California have §Sone only to
this extent; they h~ve held, inferentially at least, that th3 only case
in which '="note secured by ::r.ortf::>.§,e can be ne~otiable is the.t such note
Yr?l:es no reference to the mort~2.r:.e and th~.t it shell have come into the
h~nds of an innocent purche.ser for value tefore rr;aturity and without
notice of the fact th?t it ''r:; ev:cr secur:=d by mortg,?~e.
llfeyer v. "leber, 133 Cel. -:::gl,
Bri:---s v. CrP''vford., 162 C-l. 125,
Helner v. Parsons, 12: C&l. P::~-:;. 451,
\'Ientr~r v. :Ero2d.,va.v :BanL, 2C C:l. tr;t·. 389,
Taylor v. Jones, lt5 Cc<l. 102:,
~ ..
Fuller v. 13lin..'1 Lumber Co. 32 C"l· kpp. Dec. 574,
Stoner v. Security ~rust Co. 32 C~l. ftp~· Dec. 30 •.
It ha.s also been hel:\. in Celifornia that
cute:i at the sarre tirr,e ;s a
~romissory
2,
collateral contract exe-
note ani referred to i::1 the note
·Nill, if the contrqpt contcins any tera·s
affectin~
necotiability, destroy
the negotiAbility of the note.
Eyer v. Inter. Bank Corp.
262
Fed.
292-296.
In the familie.r arplic..-tion of the rule to notes
secured by mortgages, fre~uently one of tLe ins trurrents
refers to the other. The rule is not ch<:m~e1 Nhen no
such reference is made. In the hpnas of the original
Iayee or of a tra."'lsferee of the note ,·:i th illowledge of
the collateral e.green:ent, whether or not th8 note is
nefotie."t:le in form, it is non-negotieble in 1e.ct. 11
11
Spot ten v. Dyer,
29
Cal. Apy;. Dec .
50 3.
Doubt is expressed in some of the earlier Cclifornia c;:ses as to
Nhether or not the
~orovisions
of e. deed of trust ·Nill he.ve the serr.e effect
,ss those of a rrort?e>re in renlering the note non-ne.::otisble.
This doutt
seerrs to ha.ve teen resolved a.f inst tne ner otiat.:ility of such notes in the
recent c<>se of Qj.linn v. Rike, 33 C8l. ~FP· Dec. 709 (Dec. 1920), wherein
it is said:
~ t""'
_;_._,;j
15 -
X- 3322c
- 16 "In .:i anuarv 191F., the defendant executed and delivered.
to her co-defendant a promissory note, negotiabie in form,
in the sum of ~20Co.co. For the ~urpose of securing payrrent
of the same she made and executed a deed of trust to a certain Title Insurance and Trust Company. The note was, therefore, non-ne,.::otiable."
In vie·N of the unusual position taken by the courts of California,
rr.uch difficulty was forrrerly encountered in this state in connection ·rith
the nePotiability of bonds intended to circulate in the open ma.rket and
secure which, underlying mortf:e.;es were given.
In the case of Kohn v.
Sacramento Electric, Ga.s 8~ R"'ihlr>y Co., 168 Cal. 6, the court was called
upon to pass upon the negotiability of certain bonds and interest coupons
of the Sacramento Electric,Ges and Railway Company secured by a mortgage
upon thE! real and personal property of the corporation.
Indorsed upon each
of the bonds was a certific~te of the trustee to the effect that the bond
was secured by a trust mortgage therein
mentioned~
Pn officer of the Trust
Cou:.pany in whose custody the bonds had. been placed. feloneously obtained a
number of them and negotiated therr. to plaintiff who paid. value therefor.
The money paid by plaintiff for the bonds was not used for the benefit of
the corporation.
The bonds and coupons ceing payable to bearer, the pur-
chaser contended the.t tre corporation was not entitled to any defense to the
payrr;ent thereof.
The court decided that, although the bonds v1ere :fayable to
bearer and were intended to circulate without re£istration or
indorse~ent,
they were non-negotiable, saying:
"It is the contention of ~:pL-ellants that the tonds, teing
by a rr.ortgege cont?inin& conditions not certain of fulfillment, and notice of the mort§a~e and its conditions appee>ring
upon the bonds and cou?ons themselves, the bonds are not and cannot be negotiacle instrur::ents. In other worr'[s, appellants rely
upon the rule announced in Meyer v. 111e·ber, 133 CaL 685 .... , •
that a note secured by P mortgC'Ge on lPnd., both being executed
at the ser:::e time as :part of one tr:onse.ction, is not negotiable in
law, even if negotiable in fom, :;vhere the purchaser tekes it with
su~ported
- 11 -
X-·3}22c
knowledge of the exi s ter..ce of -.:be mortgage . • . • .
There is no essential differe'1ce bet:Ne8.1 the two kinds
of instrurr·ents and. we see no escape from the logic of
the position of aprellants that a bone~ like a note, i f
dependent upon a mortgage, is s u1: .i ect to ell eq_ui table
defenses against a holder with notice . • • • . • . . .
There seerrs to be no g cod reason ·rvhy bonds should be
placed in a class governed by different frinciples
than those applicable to notes."
In orJ.er to evoid the effect of this decision and to place bonds on
a different fovting from ordint>ry 'Pro"'issory notes secured by morte:ages,
the 1921 session of the C' lifornia Le~ishture passed the following law:
tTJ3onds payable to ce!"rer or holder shall te negotieble, not''Vithstenning any conditions cont~ined therein or in the mortgage,
deed of trust or other ins tru:;;ent securing the sarr.e."
(Chap. 344 Cal. Session Laws 1921; in effect July 29, 1921.)
Sumnarizing, it may be said, therefore, that all promissory notes secured by mortgages or deeds of trust on real or.personal property in California are non-negotiable in the hands of a tr1?nsferee, even though the
transfer be made fo<~ value r..nd befoJ.e n-atw·i ty of the no·;;e ,.iJr'0v~.J.ed the
trensferee takes with actu<"l or constn.J_cti\'8 notice of the existence of the
supporting mortgage.
The only exception to this rule is thet in reference
to conds payatle to bearer or holder, referred to acove.
RULE IN wnsFINClPQ:t!
The rule in the Stcte of VJashington seerr:s to be that if the note is
negotiable upon its face, even though i t refers to the fact that it is sGcured by a contemporcmeous mortgage and even though the mortgage conta:i.ns
provisions which i f incorporated in the note might render it non-ne~ot iat J.e •
the note is negotiable.
In so holding, it will be seen thPt the courts
of the State of Washington have reached a conclusion in accordance with the
general rule end exactly opposite to the conclusion reached by the courts
of the Stete of CRlifornia.
This rule, hcwever) only applies where the
"n
_;__,u
.l
X- 3322c
- 13 -
promissory note dces not in terrrs adopt and incorporate as part of
contract the pro-risions of the mortgage.
tains such terms as
11
tl~
Where the :pro:rdssory note con-
This note is su'cject to all the terms and conditions
of a certain mortgage executed of even date herewith, 11 or other similar
terrrs, the. note and. rrtortgaee are construed as one contract and any terms
cont~ined
in the mortgafe which, if contained in the note would affect its
negotiability, wi 11 he.ve a like effect ~:md will destroy the ne§otiabili ty
of the note ..
In the case of I3?rker v. Sartori,
66 Wash. 260; 119 Pac. 611, the
notes were secu.-ed by mortgages which conteined stipul$tions rewiring the
Jra}:er to pay 1 in addition tO the principal debt. and interest t
SUCh SUffiS
aS
the mort[a~ee might be re:1uired to incur fo1· insurance, taxes and asa:essrr:ents
on the land.
It was arg-J.ed. th9t the mortgages should be constrned with the
notes and that the aforesaid provisions rendered the amount to 1:e paid uncercain.
The court stated:
"It is Rp:pare'l.t th."'t tne notes in tllis case were net;otiable
instrurrents • • • • • • The f::>.ct t:b..at tt.e intenst was :payeble in
installments does not render tlc.e notes uncertain. • • ·We are
satisfied that the provisions of the mortga3.es were not ir:-~-::orted
ipto the notes, so as to renier them non-nefr'Otiable." Citing
Thorpe v. ~~inderrand., 123 1i'Tisc. 149; 101 N. ''J. 417 ·
Farmers :Bank v. ~fc Cr->11, 25 Okla. toO; 116 Pac. 36G
Prrerican S"vings 13;:-nk & Trust Co. v. Helgesen, 116 Pac. 337 · ~
So also in the case of Eright v. Offield, 31 ~ash. 442;
143·
Pac. 159,
the court, in passing upon negctiabili ty of a note vvhich referred to a mortgage securing it, said:
"Accodinf: towha.t we telieve to 1-:Jethe letter ruJ.e, a
mortGTaJ!e securing a note, ttwugh referred. to in tte nute,
but ·ni thout expr;s2ly aJ.o-r:tin,;_ its coni it ions, is :nereJ.y
ancillary to the note, "'ni the conditions found in the mo.rtgage alone 'llill not c hen:·e the c~~racter of. the n~te as a
ne&-otiable instrurrent. The -crorm.se to p:::y ~s heM. to be a
distinct agreen:ent from the rcortgage and if couched in proper
terms, the-note is negotiable."
- 19 -
X-3322c
'T'he sarre conclusion was reache:l in the cases of Lovell v.
~.!Jusselrr..an,
Bl Vlash. 476; 142 Pac. 1143, and t-~oore v. :Burling, 93 ~7ash. 217; 160 Pac.
420, although by a slightly different process of reasoning.
Surrrrra.rizing, it may, therefore, ce said. that in the Sta.'te of Washington
the only manner in
wh!_c1-,
in proper form, cen
the ne;ot1ati!.1. ty of a :;::romissory note, otterr:ise
e destroyed is :·y
plecin~
in the note a reference to
the mortgage adopting the terr:'s of the rrortga~e as p?rt of the note.
Even in
such event, it is my opinion that the ne[otial::ility of the note ·,·;auld not te
destroyed unless the mortgat;:e conteined ten::s repugnant to the rrovisions of
the Nef:otiat le Instruments J.ct.
In the State of 1Nashins ton, sul~j ect to the
fore§'oin~ exception, a purchaser of Et promissory note nerotiaile in form for
V?lue and "before maturity tr>kes the note free from any
e~1uities
existing ::e-
tween the mortgegor and mortgagee.
RULE IN OH"EGON
--------
In Ore£l.on the fact that a prorrissory ncte is secured by a chattel mortgare ~1.ces not, of itself, affect the ne2-otiacility of the note"
In those
ce>ses 'Nhere the mortgage conta.ins provisions which, if incorporated in the
note "Vould destroy the neg.otialility thereof, such provisions are not imported into the note and do not affect its negotiability unless incorporated
therein ty direct reference in the note to the mortg.cge end Ad.o:ntion of its
terms.
In other wor.is, the courts of the Stste of Oregon have follo'NeG. the
rrajority rule.
In the c~se of r~iley v. Inland Err.pire Co~any,
75
Orefon,
309; 146 Pac. 991, the rule is stated in the following lanuag,e.
"A rr.ortge>.ge, t.eing merely an inciCl.ent to the note which it secures, the assi~cnment of the fonr.er carmot hamper or destroy the
negotiatili ty of the latter. No q,ues tion is made at out the note
t eing nee: oti a:t le on its f .">Ce."
- 20 ..:.
X-3322c
The sarr:e rule, however, applies in Oregon, which applies in practically
all other jurisdictions; that is, that where the note expressly
ado~ts
the
mortgage and states that it is subject to the terms and conditions thereof,
all the
te~s
of the mortgage are imported into the note and any of such
terrr.s which, if contrined in the note would destroy negotiacility, will heve
e. like effect, though contpined in the
v . .Angus,
rnortg~ge ..
·~.Thus,
in the case of Hull
60 Ore. 95, 113 Pee. 234, the note stated as follows:
"This note is given as a part of the purchase price of real
property and is secured cy mortgage of even date herewith, and is
subject to all the terrr.s and conditions of said mortgage."
The court, in passi11g upon the negothbility of this note, se.i·i:
''!n instrument tore negotiatle must contain, among other
things, an unconditional promise or order to pay a sum certain
in money . • • • • • It would ce doing violence to the language
to say th~t the note is unconditional, when it ezpressly says
upon its face that it is subject to conditions. The reference
to the mortgage ry the terms of the note is in effect makinf the
note and mortgage one instrument, with the conditions rendering
the note non-negotiable."
1'his decision, as steted a'bove, is merely in conformity with the general
rule on this subject.
The court in this ce.se recognizes a contrary holding
ivherein it states:
"There are, however, numerous decisions to the contrary.
Many of the courts hold that the provisions of the mortgage
do not affect the negotiacility of the note, otherwise negotiable, cecause the provisions of the mortgage relete solely
to the security."
The leading case in Oregon on the sulject of the negotiatility of pror.-,issory notes secured 'hy r;;orte~?ges is that of Page v. Ford,
Pac • 1013.
cert;:~in
65 Ore. 450; 131
The note in this case was ~-:iven as part of the purche.se :price of
real es t?te .<>nd persone.l property.
On the
mar~ in
of tile note these
words were written:
"This note is secured ty mortgflge of even date given to
secure the 1:: Alance of the purchase price of the property ::les ern ed in s aii TI'Ortgage."
~
,. ... ,.f,
.
......r.,:._•. __
X- 532c::'c
- 21 ...
The mortga.ee, it seems, provided that the rr;ortgagor should pay all taxes
assessed upon the lBnd covered therety as Nell as all taxes that might
thereafter te assessed on the note.
The court, holdin;,. the note nerotielle,
stated as follows:
"The third -croposition rroises the q_uestion as to whether
the 1)rovisi on in the rr:ortgage re-1uirint the mortt:a~or to pay
a.ll taxes that might thereafter te a.ssessed on the note renders
the amount due thereon uncertAin, and therefore non-negotiatle.
It is contended by respondent with much plausicility that the
note and mortgt>ge, n~ving teen fiven at one time and £W'part
of the same transaction, should le construed together as one
instrurrent. ·~he logical effect of this argument would te to
incorporate into the note, ani into every otter note executed
simultaneously with and to secure a rtortgage every stipule1tion
of the mortgage. 'v1hile this result does not seem to have teen
fully apprehended l:'y courts holding the vieNs hereinafter considered, it cannot be denied that the ·position of counsel for
respondents has respectatle authority to support it • • • . •
The conclusions dravvn in the cese.s not~d. seem to us to be surported neither by sound logic nor pu1:lic policy. Their logical
result is to mPke every promissor~r note secured l::y real estate
mortgage a pe>rt of the mortgap.e, ~nd. sulject to all its stipulations and conditions, therety reducin~ it to a mere contract
not negotiable. 't'hey assUJ"'le th2t when ~Prties sit dO'l>'l'l end
execute a promissory note, negotia·t le by its terms, and secure
it by a mortg2ge, they intended a,s a mAtter of law to do the
thing th"'t as a matter of fact they neve"- thought of doing,
n<>rr:ely, to make a non-negotiet.le notew i's a matter of putlic
policy, such holdings tend to discredit and che2pen corrrr.ercial
pe:per and to render purch,sers thereof suspicious of investine
in it when secured l::y mortgages, often held and recorded at a
dis t?nce fr·om the pl2ce wnere such pc-_f.er i., offer-ed for sale.
• . . • • . . It is hardly c once iv~b le that it was the legislative intention to render notes so secured non-negotiable."
It rray be said, therefore,
th~t
in Oregon all notes nee,otiecle upon
their face, remain negotiable even through secured l'y mortgege unless by tl1e
terrr.s of the note, the mortgage and note are
rr~de
one contract.
In Idaho, as in C-lifomia, a mortgagee rrcay not waive his security ,
and sue upon the note c-,s an unsecured debt.
Section 5949 of the Compiled
Statutes of Idaho (1919), :r:rovides th0t l::ut one action may ·be l::rought for
the recovery of cm.y debt or the enforcerr.ent of any right secured by mrJrtgage
'I
~~
X- 3322c
- 22 ....
"~
t·· f)
-.t-'._, Jt-:~
upon real est<"tA or :personal property, ;.vhich action must te in accordance
with the -:provisions of tl1e chapter rele ti ve to foreclosure.
Ce:ierhold v. Loofl::. orrow (Ida. 1886) 9 Pac. 641, .
~,dvance Thresher Co. v. Whiteside (Ida. 1391), 26 Pac. 660.
In the cese of :s~rnes v. :Buffalo Pitts Co. (Ida. 1899) 57 Pac. 267, the
court holds tha:t no money judgrrent can te rendered on d.el:ts secured by chattel
mortgage until the security is exhausted, thus holding, at least inferentially,
that the security cannot l:e waived.
It vvould seem th!lt if the holder of the
note could waive the security afforded cy the mortgage and sue on the note e.s
through tmsecured, the nefotial'ility of the note must, of necessity, "be determined from the :provisions contained therein, without reference to the mortgage.
The effect of securing a TTOmissory note ty mortgage h-s not teen specifically :passed upon in the State of Idaho.
In the case of LeHis v .. Sutton (Ia.e.
1912) 122 Pac. 911, the court uses langua[e which seems to lead to the conclu-
.
sion that the note and rr,ortgage ;,vill :·e construed together end thc-t any terrr.s
conta.ineJ. in the mortgage destroyin~ nefotiat ility will te imported into the
note.
The court in this case says:
••rn a proceedinf, therefore, to foreclose a mortga.~e securing
:rromissory notes, the act ion is founded upon the notes end mortga.E:e.
The foreclosure proceeding is the one action th'"' t can te maintained,
and the notes and mortgage ere inseparably connected • • • • · · • •
The notes themselves are rr:erely evidences of the incle·L· teiness, 8nd
the fact thP t the notes provide tb? t i f suit be brought upon them
there shall re <"'llowed a reasonable attorney 1 s fee does not change
or alter the conditions in the mortgage to the effect that tre fee
shall rei\ t ipulated sum."
The court in the cese of Clerk v. Paddock, (Ida. 1913) 132 Pac.
795,
also s·-errs to hold trot the note and mortgage e.re inseparatle end, inferentially at le~st, thet any tenns contained in the mortgage .vhich destroy
negotiarility will te construed ·vith the note.
!Is stated al:ove, however, the
question under iiscussion has not been specifically passed upon in Idaho and
the law in that state is in a very unsatisfactory condition.
On account of
the similari tv 1.-.e tween the laws of Idaho and C"' lifornia relative to mortgages,
.•! ,. •.
~-·~
X- 3322c
I am inclinei to the relief that
tb'~
courts of Idaho vill, when called upon,
follow the rule l<>id d.o·\1!1 in C<>lifomia, and will hold that the note and
mortgage are tole construed together as one contract, and that, where the
holder of the note tc-kes with notice of the fact that it is secured by mortge§::e, he takes it sutject to all the tenLs and conditions of the ;-r.crtgage.
Dighton v. First Exchange Nat. Pent~ ( Ll.a. 1920} 192 Pac. 332.
l.!Ullen v. Goodin~ Implement Co. (Lta. 1911) ],1'3 Pac. 5C:G,
P2nk of Mont:r:elier v. ~·1ontrelier Lum'er Co. (IC:a. 19C9)
lG2 Pac • 685,
Rein v. Callaway (Ida. 1901) 65 'Pac. t3-
The l.:rN in Utah relative to the sul:Ject under discussiop is even le:::s
fully developed than in Idaho.
fs in Idaho the -1.ues tion as to whether or
not the Irovi~ions of the n.ortgafe or collateral agreerrent rr:ay render the
note non-ne2'oti?1: le turns eorre•r.rhat u.,.'on the consideration of whether one
hclJinr; a note secured '.y ":;ort§,age rr:ay ..veive the security and sue uron the
If the holder of the note ~md mortgage rca.y waive the security, it is
note.
difficult to see how any provisions of the rr.ortgc>ge csn affect the negotiar ili ty of the note.
Section 7230 of the Corrriled La:.vs of Utah provides the.t there can te
1: ut one action for the recovery of any del' t or the enforcement of any right
secured
1~y
mortgage u:pon rs8l est.?te or rersonal property, which action must
: e in accor•iance with the rrovisions of the law reletive to foreclosure.
The
only ex.ceytion to the at ove ruleiftba.t where the sucJ ec t of the mortgage has
ce2sed to exist or h2s tecome valueless, without the fault of the rwrtgagee,
en action on the note) "vithout foreclosure of the mortgage rray 'be brought.
In this res::ect the laws of Utah are similGr to those of California.
The leadint: c2se in Utah on this sutject is thet of Donaldson v. Grant
(Utah 1S97), 49 Pac.
779.
This case w-s decided before the adortion of the
n
0
.;l
!<-:"A
-~\:_}~'.C.
X- 3322c
24Negotiable Instrurr:ents Law in Utah.
There is, however, nothing in the later
decisions of the Supreme Court of the State of Utah to indicate that the rule
laid down in that case has been changed.
In the case referred to the note se-
.cured ty the mortgage. contained the following provision:
"If default be made in the payrr:ent of any of theinterest after
it l:ecomes due or failure to comply with any of the conditions or
agreements contained in the mortga[e given herewith, then saia princip:<.l sum, with the accrued interest tr..ereon, shell, et the option of
the holder of the note, tecome due and payat·le."
It we.s held
th~t
this
~revision
rendered the note non-negotiable.
It is to be noted, however, thPt this case is not decisive of the ~uestion
of uvh"'t effect a mortgage merely referring to a promissory note which it secured would have ur.on the note.
The mortgage in the Donaldson case contained many terms which would destray negotia1 ility if contained in the note ru1d in view of the fact that the
note adorted all of the terms .?nd conditions of the mortgage, the court could
hardly have held otherwise.
We
F
re left without advice as to what the court
would have held hBd this incor-Porating language teen left out of the note
itself~
The Donaldson case has not been referred to again in the Utah de-
cisions and is still the latest decision in that state upon the point of inquiry.
The case of Frost v. Fisher (Colo) 58 Pac. 872 Page v. Ford, supra, and
Throre v. Mindeman (\'!isc.) 101 N. 1'!. 417, referring to the case of Donaldson
v. Gnmt, differentiate= it from cases in which the note does not adox:t the
terms of the mortgage.
While there seems to be a general tendency among all
the courts to uphold the negotiability of notes which are plainly negotiable
upon their face, irresrec ti ve of the terTl's conte.ined in the collateral security, it is
imrossi~le,
in view of the present lack of authoritative statement
in Utah, to say what the courts of thet state will determine as to the negotial:-ility of notes secured by mortgages in nhich the note rr:erely refers to
character of the security.
~
1
..
~.
_:__ .:_
X-3322c
RULE IN flRI70NJl AND NEVADJl
In neither Jlriaona nor Nevada do we find any authoritative
state.nant on -:;he subject under discussion.
surprising as the decisions of tnese
t~o
This, however, is not
states are, as a whole,
somewhat lacking in internretations of substantive la1:.
'v;e do
find certain decisions, however1 w;1ich 1 ,.-hile not in point, sno<v the
trend that the courts of thase states have taken in regard to tne
''egotiabil i ty of notes secured by mortgages.
In the case of Burling v. Goodman, 1 Nev. 314, the follov:ing
significant language is used:
"The quality or character of the contract is il-1 no
wise affected because the debt created thereby has been
secured by mortgage. 'I'he security is merely an incident
to the debt contracted and sought to be recovered."
The only other case found in the Nevada Reports which even remotely passes upon the matter is that of Dixon v. Miller., 43
164 Pac. 926.
l~av.
2o0;
In this case, in a suit upou a promissory note secured
by chat tel mortgage a def anse of failure of consideration was urged.
The plaintiff, however, was the payee of the note, so that the question
of the rights of a bona fide holder were not invol vad •. Tne note in
question ;,as negotiable ir. form and merely referred to
was secured by chattel mortgage of even date.
ttlt>
fact that it
The court said:
".Absence or failure of consideration is a matter of
defense as against any person pot a holder in due course.
f,prellant is net a holder iL due course, but is the pa/ee
thereof and t:-1erefore under tne statute the resy:ondent is
entitled to defend by impeaching the consideratior. of tne
instrument."
;_)
,.-
',···c
_,_ .._'(_)
-26-
X-j322c
It may be said from the above that the court intimated that if the
note and mortgage had passed to a bona fide holder before
maturit{~
would have so passed free of any equities and immune from any
of failure of consideration.
it
def~nses
Thus it may be said that the courts in
Nevada seem to differentiate between the contract entered intothrou.gh
tne note and that entered into throusn
/tne mortgage and tnat a negotiable promissory note would pass to a bOLla
fide holder, before maturity, free of any equities or defenses arising
out of any matter contained in the mortgage.
More than this cannot be
said of tte Nevada decisions.
ln .Arizona, while the matter has not been directly adjudicatad,
we find sorr;e '110re authoritative statements.
ln the case of Newman v. Fidelity Savings & Loan Jl.s~ociationl 14
Ariz. 354; 12~ Pac. 53~ an assignee of the mortgage failed to record the
assignment to him of that instrument.
The original mortgagee frauduler,tly
released the mortgage he had assigned and the property being so cleared
of encumbrance 1 was
unencumber~d
by a new mortgage.
The court held that
the rights of the second mortgagee 1 accruing after the fraudulent releases,
were superior to those of the oribinal mortgagee, oaying:
"A negotiable note nasses by indorsement, carr;ing with
it the mortgage collate~al thereto. A bona fide holder of
·a negotiable note before maturity takes it clear of all
equities."
In the case of Slaughter v. Bank of Bisbee (Ariz. 1916) 154 Pac.
1040, the note was negotiable in form.
Iti however, contained a notation
"for payment under contract of even date.''
Suit was brought by a pur-
chaser before a1aturity and was resisted upon the ground that the contemporaneous contract referred to·in the note had been broken.
The court
held the note to be negotiable upon tne ground that the reference was
merely one to the transaction from which the note arose and did not
- 27 ":"
X-3322c
subject the payment of the note to a contingency.
"The usual way to condition or to make contingent
a promise to tJay is to use language clearly carrying
that intention and purpose~ either by diract expression
or by reference tc some extrinsic contract in such
man:r"er as tQ mai:e t::.e paymc::.~ o: Le note subjec~ to
the terms and conditions of the contract. 0
This case leads to the conclusion that a reference in a
note~
o~~e:-
wise negotiable, to the fact that it is secured by mortgage, would have
no effect upon the negotiability of the note.
In the case of Edwards v. Dealers Ice Company (.Ariz. 1915) li-1-6
Pac. 908, the note referred to a certain chattel mortgage on personal
property of even date given to secure the note_
The question as to
whether an alleged illegal r revision in the c>1at tel mortgage inval idoted
the note was raised and the court said:
"The note is an independent contract fro~ the
contract of surety. The mortgage is only to secure
the payment of the note~ • . . • . and the appellant
contends that the chattel Lnortgage and the note it
was intended to secure are void, because tbe note on
its face refers to the chattel mortgage as securing
it~ and the chattel mortgage contains an illegal
provision . . . . Here we have a note referring to
another instrument made at the same time, alleged to
contain an illegal condition. The note is clearly
severable and separable from the c.nattel mortgage
instrument . . . . . The note may 'oe enf arced and
the mortgage containing the said provision may be
disregarded."
From the above decisions, I am of the opinion that, when callel
upon to pass upon the matter, the courts of Arizona will hold:
1.
That the mere fact that a note is secured by mortgage does not,
of itself, affect the negotiability of the note;
2.
That the note and mortgage even though executed simultru.eously
are separate instruments and that a reference in the note to the fact
that it is secured by mortgage will not affect t.r.e r.o.egotiability of a
- 28 -
X-3322c
note otherwise negotiable; and
3.
Even though the contemporaneous mortgage contains provi-
sions which, if incorporatod in the note would destroy its negotiability, the ho).der of the note is at liberty to disregard the
mortgage security and sue upon the note as though i t wero unsecured;
therefore, that terms destroying negotiability contained in tne mortgage will not 1 unlesi>
ir~corporated
in the note by appropriate terms
contained therein, affect the negotiability of the note secured
thereby, othenvise negotiable in form.
OTHER JUR!fi'ICTIONS
COLORJIDO
In the case of Frost v. Fisher 1
13
Colo. App. 322;
58
Pac.
372, a mortgage given to secure a note, which was on its face negotiable, provided that, in case the mortgagor failed to pay the taxes on
the property or the premiums of insurance thereon, the holder of the
note might pay such taxes or premiums and the amount so paid would
become an additional indebtedness secured by the same mortgage.
The
mortgage also provided that in case of sale, the mortgagee should
apply the proceeds to the payment of the additional indebtedness and
then to the payment of the note.
It was held that the additional
indebtedness was a distinct debt chargeable to the land alone and that
it did not pertain to the note in such maru:..er as to render the amount
thereof uncertain end the note non-negotiable.
The court said:
"P. mortg,a12,e may coDtai~.~rsoDal. covenant so
expressed that the tenas of F•e r"ote ;vould be
modified end controlle~ by it. In such case, the
covenant would be imnorted into the note and, in
determining the obligation and liabil.i ty of the maker,
·;'i
,~.-.n
--.:_1;._,:cJl
- 29 -
'
X-3322c
should be construed with the note as part of it.
But. we do not think that the rule applies to a
covenant which is ir.serted p~rely for purposes of
security and for the enf orceu1ent of which resort
can be had only to tne p;.~operty mortgaged."
DISTRICT OF COLU'.1BIA
In the case of Brewer v. Slater, 16 Apr. (D.C.) 48, tne court
follows the maj or it y rule 1 using the following 1 anguage:
"It requires no citation of authority to show
that a negotiable note secured by mortgage upon land
loses none of its attributes by reason of that fact.
The mortgage is an incident to the debt and rasses
with its assi~~ent. The debt evidenced by the note
gives character to the mortgage and protects it from
equities b'3tween the rtortgagor and the mortgagee in
behalf of bona fide holders of the note for value.
A mortgage, with or without power of sale, detracts
nothing from the quality of the debt which it secures
though it may add commercial value thro~gh its lien.
That the note may recite or show upon its margin 1
which seems to be the general custom, that it is secured by mortgage or other lien, cannot af feet the
doctrine statet."
ILLINOif.
The minority rule is followed in Illinois, where i t is held
that where resort is had by the holder to the mortgage security 1 the
mortgage follows the note and that the note in the hands of assignee
is subject to any defense which
wo~ld
avail against it in the nands of
the mortgagee himself, although tne assignee may have purchased the
note in good faith for a valuable consideration and before a1aturity.
Vlhi te v. Gutherland, 64 Ill. 131
Olds v. C~~mings 1 31 Ill. 133.
In the case last cited the rule is stated in the fallowing
language:
•
"The note itself, though secured by a mortgage is
still commercial paperj and .vhen tile remedy is sought
upon that, all the rights incident to commercial paper
will be enforced in t;1e courts of law. But when the
rel'l':e.iy is sought through .the medium of the mortgage,
- 30 -
X-3322c
when that is the f ound.ation cf the suit and tl1e note is
merely used as an inctC:ent, then courts of equity must
look deeper in the transaction and see i f there be any
equitable reason why it sho'J.ld not be enf arced."
This case is a leading authority in Illinois on the subject and
has been fallowed in the following cases:
Couton v. Cameron, 205 Ill. 50; 87 N. E. 8001 Romberg
v. McCormick, 194 Ill. 205; 62 N,E. j37, Chicago Title
Co. v. Alff 1 133 Ill. 91; 55 N.E. 659;Buehler v.
McCormick, 169 Ill. 269; 48 N.E. 267, McAuliffe v.
Reu t .o. . r) 1rr Il, . . .I..f. 9, ~· 4~ N.. w.. ·c-7
. . ~.....
.J..
...
v
~
_L o.
It should be said that the courts of Illinois have often shown
dissa.t csfaction with the rule as established in the case of 01J.s. v.
Ca~mings
it.
and have on occasions sought to restrict rather than e£tend
Thus, the rule has been held not applicable to an assibnee or
holder of accomlliodation paper secured by mortgage.
Miller v. Larned.,. 103 Ill. 562. ·
And the courts have refused to extend the rule to deeds of trust given
to secure railroad coupon bonds intended to be thrown on the market
and circulated as commercial paper.
Paoria Railroad Co. v. Thompson, 103 Ill. 137.
In Iowa it has been held that a stipulation on the back of a
note that it was secured by moctgage and that the payee agreed to look
to the mortgage security for the payment of the note, became part of
the note and rendered the note non-negotiable.
Allison v. Hollenbeack, 133 Iowa, 479; 114 NJ1. 1059.
This decision, however, is merely in
cor~formit}
with the general
rule that w:nere the note adopts or incorporates into it the teems of
the mortgage, its negotiability will be controlled by such terms.
:~
,.,..~.~
.......__.___
- 31 -
X-3322c
The courts of Iowa) however) iu oLe case at least) seem to have
adopted the minority rule to ths effect that the negotiability of the
note m.ay be destroyed by terms contaiLed in the .nortgage e.;(ecuted
simultaneously v. i th the note even tnough the bolder of the note ,c,ay
have had no notice of the mortgage at tne time he accepted the note.
In the case of Iowa National Jank v. Carter, 14q. Ioiia, 715,
123 N, W. 237 1 the notes
~ere
as part of ti'"1e transaction.
secured by chattel mortgage executed
The mortgage provided that the wnole
debt should become due in case of the sale or removal of tne property
by the ,nortgagor with the consent of the mortgagee or in· case the
latter deemed ni:t.sel f insecure.
The court said:
"~e are satisfied that by reascn of recitals in
the ncrtgag,e, not only the tine of paymer,t, but the
amount thereof, was uncertain and subject to a contingency, and that the notes were non-negotiable, and
are subject to the defenses pleaded in the hands of
the holder) although he may have had no knoviledge or
notice thereof when he took the notes,"
This case was decided under tile provisions of the lbgotiable
Instruments Law.
J,n op-r osi te !'·osition seems to have been as5umed by the Iowa
courts in the later case of DesMoines Savings Bank v . .Arthur, 163
The note in this case proviled:
"This note is secured by a mortgage on 101 acres of
laD:i in :iladison CountyJ Iov1a."
The courtJ in holding the note to be negotiable) stated as folloiis!
"T~e pucrose of tne mortgage was to afford securitJ
for the pay<nent of the note, and. all the co11ciiticms
e~cept one relate to the protection and preservation of
the security, Tnese have no bearing on the engagements
containe.:l ir:.. the note. ·,ihile the .Gote and ,n0rtgage are
to be construed together 1 this does not ~ean that the
,~L
X-3322c
- 32 -
provisions of the mortgage are tnereby incorporated into
and became a part of the note . . . As the provisions
in the mortgage did not render the amount payable on the
note uncertain 1 the note cannot be denounced as nonnegotiable on this ground. Nor did tLe clause giving
the mortgagee on breach of certain conditions, the
election to declare the entire indebtedness due • • • , ·.
Decisions to the contrary may be found on both of the
focegoing propositions, but our conclusion has tne
support of the great weight of authority."
It is to be noted 1 however 1 that in Io,-;a there was at the tLne
this decision was rendered> a statute (section 3426 1 Civil Code) by
virtue of which a ser;arate action would have been maintained on the
note independently of the mortgage.
KPNS!S
The courts of Kansas have repeatedly held that the note and
construed together as if they were parts of one instrument.
They.have
also held that any terms in the mortgage which, if included in the
note would destroy its negotiability, will have tne same effect tnough
incorporated in the mortgage,
Cab bel v. Knot e) 2 Kans. App. 68j
Chick v. Willet ts 1 2 Kans. 3?9·
Muzzy v. Knight, 8 Kans. 1 3Gb.
Meyer v. Graeber, 19 Kans. 166.
43
Pac.
309.,
The gene!"aJ. ;·ule t::c,t wl:ere a not3 :::+:'1er,Jise negc.L ab::..e ir.
form refers to the mortgag3 by which it is secured: and incorporates
the mortgage as part of the contract) the negotiability of the note
will be affected by the terms of the mortgage has also been followed
in Kansas.
•
- 33 -
X-3322c
Chapman v. Steiner, 5 Kans. App. 326; 46 Pac. G07,
ilistrand v, Parker; 7 Kans • .Ap';, :502j 52 Pac, 59
Jones v. Dulick (Kans App) 55 Pac. 522.
Vi right v. Shimeck, 8 Kans App. 350; 55 Pac. 4G4.
MICH IG.AN
The two leading cases on the subject in Michigan are those of
Brooke v. Struthers, 110 Mich. 562; 68 N.~. 272;
35
Wilson v. Campbell, 110 Mich., 530; 35 L.R.A. 544.
L,R.A,
536,
and
These two
decisions, apparently without any distinguishing characteristics,
decided by the same court, at the same term, seem to be in direct
conflict.
The note in the case of Brooke v. Struthers, contained the
following provision:
"This note is of even date with a certain real
estate mortgage made by the maker hereof to the
payee and collateral hereto."
The mortgage by its terms, required the mortgagor to pay
all taxes and assessments upon the property.
The court in holding
the note non-nagotiable said: (p. 515)
11 In the present case,
the mortgage binds t:1e
mortgagor to pay all taxes and assesswents upon the
premises. Now if this might be said to be a provision to protect tne security and therefore not affecting the note, yet when it provides in addition
that when the mortgagor shall leave any tax or
assessment, valid or invalid, unpaid for thirty days,
that such taxes and assessments) whether previously
paid by the mortgagee or notJ and the whole amount
of principal and interest shall become due and payable
immediately, it injects into theobligation a contract,
as much as though the maturity and amount of the
obligation were to depend upon any other act or service
agreed upon, calculated to enhance or maincain tne
value of the security, . . . . • A mortgage e~ecuted
simultaneously wi "Gh the note is a part of the cor:tract
and they are to be construed together . . . . . Jlnd
where the note is secured by a mortgage, and there is
a provision in the mortgage contained not contained in
the note, it will control • • • • Several cases ·have
-34-
X-3322c
been cited to the pro~osition that 'when a note secured
by mortgage is transfen·ed to a bona fide holder for
value before maturity and a bill is filed to foreclose
the mortgage 1 no other or further defenses are allowed
again~t the mor·cgage tnan viould be alli;;>~ed were the
action brought in a court of law upon tLe r1ote. 1 But
this pro:; osition does not militate against the contention
that the note and mortgage are to be construed together ..
for a court of law would be bound to notice and apply
the rule .. and equity mi&ht do the same. '.,e have been
unable to find any case ;vhj.ch holds or implies that the
negotiability of a note will not be taken away by provisions whicn affect the certainties reguis_~·.i:?_ c.o nQg9tiable
paper contained in a contemporaneous mortgag,~_to_Y!hj.ch the
note refers. We do .. ho11-1ever, find cases which hold that
a mortgage partakes of the negotiable cha<acter of the note
so long as the previsions of the mort gage are not inconsistent with negotiability . . . • . . By reason of the
provision which renders the note uncertain in time of
pa:rrn,>:lt and .v:1icL Llg:~af·c~:;;ci up o"J i. t ~.::or-Gain cun·~ • .:.._(;-;, obligations, the note was rendered non-negotiable unless,
as already said, the holders of these notes are to enjoy
immunity because of some peculi3.r sanctity arising from
the fact that the mortgage not the note contains the
stipulation. 11
The case of Wilson v. Campbell .. supra. was decided upon almost
identical facts.
The mortgage 1 securing ti1e note, provided tnat the
mortgagor should pay all ta.<.es levied upon the property and t11at U;:> on
thirty days failure so to do, after the same became due, the note
should
teLc:n~
immediately payaole.
:.:de or;:../ ciifierence t;;,tv,eer. tnL;
case and the Brooke case was that the mortgage did not provide tnat
the unnaid assessments should be added to and become a part of the
indebtedness.
The court held that the provis.ion for the payment of
taxes) being a burden resting in any event upon tha mortgagor> did
not destroy the negotiability of the note.
The line of demarkation
between the two cases isJ to say the least, very difficult to find.
MISSOURI
It has been held in Missouri that a note and. deed of trust,
executed simultaneously 1 constituted one transaction and that on.e
~
!"'• ,._
_:._~_ :~j
- .35 -
X-3322c
taking them ui th notice of ti1e terms of the deed of trust takes it
subject to all of the provisions of such terms.
Brownlee v. Prnold, So Mo. 79,
Naples v. Jones, 62 :llo. 44_3,
Noell v. Gaines, 58 Mo. S4g.
These decisions, however,
we1~e
expressl/ overruled in the
case of Owings v. N!cKenzie 1 133 Mo. 323.
In tne case of City National Jank v. Goodloe, 93 Mo.
App. 123-136, the court says:
"The defendant further contends that the note
and mortgage must be construed togetner as one instrument and that the condi tior,s set forth in the
latter render the former no,~negotiable. 3ut this
contention we are unable to concede to defendant
. • . . • . The lav; now prevailing, in this state
is to the effect that a mortgage is a mere security
creating.a lien upon the pro·nerty. Tne debt secured
by the mortgage is the princinal thing and the
mortgage a mere incident, folloNing the debt
wherever it goes and deriving its cnaracter from the
instrument which evidences the debt."
The rule has been affirmed by the Federal court interpreting
the Missouri statute in the case of Kem1edy v. :?rodecick, 216 Fed. 137,
wherein tne doctrine in this state is well set forth in the following
language:
"If two instruments are e.,ecuted at the sa;De ti:ne,
in the course of the same transaction, and covering the
same subject matter, they are to be read and construed
together as one instrument. Jut tnis doctrine does
not apply to a transaction in which two separate and
distinct natters are involved. Each is to be construed
and ir.terp reted as a complete er"ti ty, .-n1etner thej be
written in o.c1e paper o:c several.
"An unconditional promise to pay a certain sum at
a certain tLne is s :natter a:r:art from security by 1iay
of deed of trust or mortgage of lard or rledge or
rrortgage of cnattels. One is governed by tne law
merchant and the other by pcoperty laws. The o.mer
1 r- t"
~~-;..... )f:_)
X- 3322c
may rely if he chooses, exclusively upon the promise
to pay according to its terms.
Conditions for his
benefit in the mortgage or pledge agreement may be
availed of only in his capacity of mortgagee or
pledgee.
They are limited to the purposes of the
mortgage or pledge. They can not be read into the
promise to pav, and so r~nder a certain promise
uncertain or convert a negotiable instrument into
a non-negotiable instrument."
fl
The same doctrine is affirmed in the case of Goodfellow v.
Stillwell,
73
Mo.
17.
In this case the plaintiff purchased before
maturity a negotiable promissory note secured by a deed of trust.
Payment had, in fact, been made to the trustee on account of the
note before it npassed to the transferee.
It was held, however 1 that
the transferee having no knowledge of the payments was not bound by
them and took the payment free from any equities existing between tLe
maker and the trustee.
~WNTJINA
In Montana the same law exists as that in California; that
is, that but one action can be brought for the recovery of a debt or
the enforcement of a right secured by mortgage, which action must be
in foreclosure.
lji!
The Montana courts seem also to have followed the California
decisions in holding that a reference in a note to the fact that it is
secured by mortgage will render the note non-negotiable if the
,nortgc-~ge
contains any terms rendering the amount or medium of payment uncertain.
The leading case in this state (and one which has been much criticiz.ed
by the courts of other states as being bad lav1) is Cornish v. \'iool vert on,
32 Mont. 456; 31 Pac. 4.
- 37 -
X-3322C
The note in this case merely refers to the fact that it was
secured by mortgage of even date.
3oth the note and mortgage were
assigned, prior to maturity; to a purchaser for value and the assignment was recorded.
The makers of the note defended, upon the
ground that the indebtedness had been paid to the original mortgagee
prior to notice of the assignment.
The court after reviewing the
conflicting decisions upon the question said;
"For another reason it (the note) is non-negotiable.
It refers on its face to the mortgage. Section 2207 of
the Civil Code provides: 'Several contracts relating
to the same matters, between tna same parties and made
as parts of substantially one transaction are to be
taken together. 1 Under the rule of construction here
declared, the conditions and stipulations embodied in
·the one must be construed to enter into and constitute
a part of the other, so that, if the mortgage referred
to in the note contains conditions which render the
note uncertain as to the amount to be paid and the
time of payment, these must be read into the note. The
two must be read and construed together to ascertain
the nature of the. agreement upon which the negotiable
character of the note depends. The reference to the
mortgage brings to the notice of every one dealing with
the note all the conditions attached, so that, even
though it should be held negotiable so far as concerns
the conditions expressed upon its face, its negotiable
character must be determined by the provisions of the
mortgage. This section of the statute sets at rest any
question which might otherwise exist as to the rule of
construction applicable. (Citing Meyer v. iieber, 133
Cal. 661).
"Apart from the statute, there is a conflict in the
decisionsj the courts of some states applying the rule
declared by the statute~ but others holding that tae
conditions containej in the mortgage do not affect the
character of the note secured thereby. In this state
the mortgage is but an inci.dent, ani pa.sses to the
assignee of the note. This, however, does not affect
the application of the rule, for it is the general rule
in this country that a mortgage does not convey the
legal title but is a mere lien to secure the performance
- 38 -
X3)22c
of the contract to ~~ich it is en incident .
The mortgage in this case contains a number of
condi ticns, among the11 that the :11ortgagor will pay
all ta~:es imposed upon t:-1e :nortgaged property or
against the holder of the mortgage . ~ . . Construing this condition as a pert of the note, it is
clearly non-negotiable . . . . . . . The contention
is also made by the appellants that a note, though
negotiable in form~ i f Eecured by rr;ortgage 1 is not
negotiable in this state, even though it contains
no reference to the mortgage, ar,d without regard to
any conditions contained inthe latter. lDasmuch
as the question invol.ved is one of importance, >Ve
prefer to reserve a decision of it until a case
arises in whicn we may have the advantage of full
argument."
The latter question referred to in the above decision an.d ur;o1"
which the court did not pass in that case seens to have been decidea
against the negotiability of the note when the note, though not
referring to the mortgage, comes into the hands of the transferee
'' ith knowledge of the existence of the mortgage, in the case of
Buhler v. Loftus, 53 Mont. 5~6; lb5 Fac. GOl.
This case was decided in 1917 and after the adoption in Montana
of the Negotiable Instruments Law.
P. J.
Buhler~
'lhis was an action brougr1t by
the rr:aker of the note ar~ i :nortgege 1 against John H.
Loftus and other transferees.
The cour·t said:
"The note did not refer to the mortgage and.
upon its face was negotiable~ If it had been
transferred by indorsement, without mention of
the mortgage, what rights viould have been acquired
would have depended upon the soluU.otl of a
different question from that before us . . . The
transfer, hov;ever, was made by written assignment
of ·che note and mortgage both. John H. Loftus,
therefore 1 took i t with full knowledge tl1at i t
was a morcg,age nct8, <;ollec·t.ible oy nim only as
such. It therefore did not come into his hands
as a 'courier without luggage 1 but as a nonnegotiable instrument subject to all the equities
- 39 -
X-3322c
existing in favor of J. M. Buhler at the time he
received it. This was expresBly so held by this
court in Cornish v. lioolverton and that case is
conclusive of this."
It may, therefore, be said that in Montana one who takes a
note 1 even before maturity, and for value,. with knowledge of the
fact that the note is secured by mortgage, accepts it subject to all
·the terms ru'ld conJ.i. tions of the mortgage vtihich., i f repugnant to negohability, will destroy the n_egotiability of the note.
NEBMSKP
The leading case on the subject in Nebraska is that of Garnett
v. Meyers, 65 Neb. 230-239; 9i N. Vi. 400; 94 N. il. 303.
The court. in that case adopted th.e rule that if agreements in
regard to the indebtedness
ar~
inserted in the accompanying mortgage
executed as part of the same transaction., they. must be construed with
the note.. If such agreements render the amount that the holder of
the note can demand on the indebtedness Hself ur;;certain, the note is
non-negotiable in the hands of one who takes i t with notice.
The
court said:
"The reasonableness of this rule would probably not
be doubted in case the accompanying paper was not a
mortgage, but was executed for the sole purpose of
modifying the terms of the r1ote or to make its payment
dependent upon conditions expressed in tne accompanying
paper. The reason seems to be equally apparent when
modifications of the terms of the note or limita·tions
imposed upon the collection of the indebtedness itself
are inserted in t;le accompanying mortgage. S'..lch provisions in the mortgage are to be construed with the
note. If the contract} so construed, renders the
amount that may be determined upon the indebtedness
itself uncertain, the one wno takes the note with
notice of the limitations in tne mortgage is not entitled to p·rotection as an innocent holder • • • • • .
..
- 4o -
X-332:::c
It is well settled in this state, that although a note
is absolute in form, every_J2.~.'2~ris~on affe(:ting _1.tl~-n~~~:;!B..
or the e:vnount or fG.'lru:er of....r~:LJJ!:~Q~t> that is th_e cqn-!-.I?-!~t
in regard to tt~- ~.nd~?b!ednas~; j~_se_1£,~ntained :i.n tl:!'-~
mortgage gi ve._Q_j; o se.q?:_re ~c...~.,_Q_l_~£'?.:._£f2!lten:p ori!::neo~_sJJ.~af f ects the no~e i_!l.J;I. ~ci§._el z.J0_e_2a!~.~--J1l~r anQ_to
.
the same exten~tY-J?_:tJ::..our-11 :i.X?,.i'-l·V~~S1d w_:Li!h.i~ on the sam..:'!
niece of paper,_ as to all pen;ons cha.rgeable with
notice. 11
The case of Roblee v. Stockyards National Bank (1903) 95 N. \I.
61# lays down the rule that a note otherwise negotiable is not renjered
non-negotiable merely by a provision for or reference to collateraJ.
security; but that when the note and mortgage are executed together
they must be construed together and any terms in the mortga;;e reFu>;;r,.ant
to negotiability will have a like e f feet upon the note.
A similar
conclusion was reached in the case of Ccnserdine v. Moore, G5 Neb. 29li
that the provisions in the mortgc.ge related ;uerely to the pNsarvation
of the security and did not affect the negotiability of the note.
No very recent decisions upon this subject in Nebraska were
found.
It may be said that the rule in that state 1 as indic&tsd by
the above authorities 1 is that one who takes a note secured by
ll'o~-tgage
with notice of i;hat fact is chargeable with all the conditioLs of
the mortgage and that the two being construed together, the
ne=:o~;iaoHity
of the note will be regulated by the provisions of the mortgage.
OK1JIH0Mfl.
It has been held in Oklahorr.a that a provision for attorney 1 s
fees in case of foreclosure incorporated in the mortgage does not
affect the negotiability of the acco:nranying note althoug,h such provision, if incorporated in the note, would destroy its negotiability.
-41-
X-3322c
Fanners National Bank v. ill!cCall (Okla. 1910)
lC6 Pac. 866.
This decision was rendered before the adoption in the State of
Oklahoma of the Negotiable Instruments Act.
The court, reviewing
the conflicting decisions on the question said:
"In the ·case at bar, the note on its face is
negotiable, but it is insisted that the mortgage securing payment of same provides for an attorney 1 s fee
in the event of foreclosure and that such provision
also shall be construed as included in the note,
thereby rendering it non-negotiable. There is a
conflict of authority on this question.
The great
weight seems, however, to be against the contention
and supporting the rule that a covenant in a mortgage
which is framed purely for the purpose of security and
f ~r enforcement of vvhich resort could be had only to
t~e property mortgaged and not a part of any debt by
v1rtue of the note, but on account of the terms of the
mortgage, the terms and conditions thereof being limited
to providing security for the indebtedness, does not
affect the negotiability of the note • . . . . However.~
'iihen the provisions of the mortgage by direct stiDulation in the note are made a part thereof, the sam~ in
that event may be rendered non--negotiable.
"It is further insisted, ho~vever, that section 793
of the Code ;vhich provides 'Several contracts relating to
the same matters, between the same parties, and rnade as
parts of substantially one transaction, are to be taken
together, 1 concludes this question in favcr of the defendant in error.
"This section was borrowed by the lawxakers of the
territory of Oklahoma from the statutes of Dakota territory.
In the case of First National Bank .v. Flaths 10
N, D. 28lj 86 N. W, 66 7, this section was construed and
held to constitute a rule of interpretation merely and
united several contracts into a single contract only for
such purposes, and that a real estate mortgage a.,'·1d the
notes secured therebf did not constitute a single contract,
but remained as separate contracts, except for the purposes of interpretation. '•'ia necessarily conclude that the
stipulation in the mortgage regarding attorLey 's fees does
not render the note non-negotiable,"
-42-
'.,
X-3322c
This decision has been followed in the later case of ~Vestlake
v. Cooper (Okla. 1913) 171 Pete. 859, in which it is pointed out that
the holder of the note may abandon the mortgage entirely and recover
on the note as though it were unsecured, in which event the terms of
the mortgage would be immaterial.
It may be said, therefore, that the rliajority rule is follovved
in Oklahoma, and that unless a note expressly incorporates and ado,ts
as part of the contract the terms of the mortgage 1 such terms will
not affect the negotiability of the note.
'lhe general· rule that ono who purchases oef ore maturity for
value a negotiable note secured by a mortgage, takes the paper free
from equitable interests of third parties of which the holder has no
notice is followed in case of Van Bukelo v. Southwest Manufacturing
Comrany (Texas) 39 S. ii. 1085.
In the case of Cunningham v. McDonald, 93 Tex. 316, 83 S.
~~.
3721 it is held that a reservation in a deed of trust securing a note,
of the right on the part of payor to make payments thereon at certain
times prior to maturity does not destroy the negotiability of the
note.
While the point i's not expressly decided, it is intimated in
this case that the terms of a mortgage or deed of trust executei contemporaneously with the note and referred to therein will be ex.al!lined
in passing upon the negotiability of the note and that such terms may
affect the negotiability of the accompanying note.
See also; Rogers v. Broadnax 1 24 Tex. 533;
'27 Texas, 236.
,~I("'
...;.;_" ,.::j
'~
.f• I
C)!,
~c.. ·~ ~:_..)
X-3322c
-43-
Thus, in the case of Robertson v. Parrish (Te~as) C. A. 139~)
39 S. W. 646, it is held that the terms of a deed of trust. executed
by a purchaser to secure his purchase of money note more than a month
after giving the note and receiving the deed,
beca~e
part of the con-
tract of sale, and that the addi tiona! provisions of the deed of trust
became part of the obligation.
"This deed of trust provides that the note becomes
enforceable by sale or suit if any of the interest
remains unpaid for six months after due. This provision thus became ingrafted on the note."
See also: Traders Nat. Bank v, Smith 1 (Tex. C.A.)
2a s. '•'· 1056.
Therefore, while no decisions directly in point nave been
found, i t is believed. that the courts of that state will construe
contemporaneous instruments as one contract.
Whether the courts of
Texas will go to the extent of holding that the terms of a contemporaneous mortgage will be read into the note in the hands of a bona
fide purchaser for value
~
maturity, who also takes the mortgage as
security or who takes the note with knowledge of the existence of the
mortgage, I am unable to say.
In the case of Thorpe v. Mindeman, 123 iiisc. 149; 66 L.R. A.
146, decided under the Negotiable
Instruments Law, the Supreme Court
of \visconsin held that agreements in a mortgage by which the mortgagor
is required to pay taxes, exhibit receipts and maintain insurance on
the buildings for the mortgagee's benefit, and the mortgagee is given
:; t·"".j i~
-..!-
X-3322c
the privilege of effecting such insurance and having a lien for the
amount so paid added tc the indebtedness) not being intended to
qualify the absolute promise in the mortgage note, does not change
the note or affect its nagotiability.
The court in this case reaches this conclusion by stating
that the provisions for the payment of insurance are merely for the
preservation of the security and do not affect the indebtedr.ess itself.
In other words, this court follows tne majority rule:
"Construing together simply means that if
there be any provisions in one instrument limiting,
explaining, or otherwise aff ectir,g the provisions
of another, they will be given effect as between
the parties themselves, and all parties charged vvith
notice, so that the intent of the parties may be
carried out,~ and that the whole agreement actuallf
made may be effe~t1J?.t<;d . • , . . , The ··•romise to
pay is one distinct agreement and, if couched in
proper terms, is negotiable. The pledge to secure
'~that promise is another distinct agreerue;J.t which
ordinarily is not intended to affect in the least
the promise to pay, but only to give a remedy for
failure to carry out the promise to pay.
The
holder of the note may discard the mortgage entirely and sue and recover on his note; and the
fact that the mortgage has been given with the
note) containing all manner of agreements relating
simply to the preservation of the sec~rity would
cut no figure."
CONCLUSION:
It may be. seen from the fore going that the courts of
·~he
various states are in hopeless conflict on the question involved.
No attempt has been made to review the decisicns of
•
other states not mentioned, it being
~y
opinion that on account
of the wide variance in "the decisions and processes of reasonL1g
..
"";i,;.
-'! f .. ~ ,.,._
~:...
-45-
X-3322c
by which the conclusions are reached, that it is necessary
to examine the latest d8cision in the state in question in
order to arrive at a safe conclusion as to the effect in
such jurisdiction which mortgage security has upon the negotiability of the accompanying note.
(Signed) Albert C, .Agnew,
Attorney.
.
;~,}
X-3323
•
.··.'. tJ
,~I"
-;._"
F E D E B AL
BE S E R VE
B 0 A RD
STt.TEli1ENT FOR TFE ?:HESS
For release in Morning ?apers,
lf'ednesday, Febru?.ry 8, 1922.
The following is a digest of the Review of
the Month as contained in the forthcoming
issue of the Feder~ Reserve Bulletin.
In the Review of the
~onth
contained in the
Feder~l
Reserve
Bulletin for February a general discussion of the European economic
and financial situation is afforded with special reference to the problems
which are likely to be presented at the Genoa Conference.
The Beview
calls attention to the fact that the Genoa Conference is the outcome of the
increasin~l~
serious economic cattditions abroad, and after sketching
the ~agertda"
which have bsen proposed for Genoa quotes the explanation
offered by ·.Premier Lloyd-Ge6:-ge with reference to the reasons for the
inclusion of
Russia and Germany in tr e conference.
Russian and German
problems are treated as being practically inevitable elements in the
existing economic situation.
The Review remarks:
The inclusion of Russia has already been the subject of discussion
because of the view that her participation in the conference at which
Russia was represented would imply a recognition of the present Russian
Government or an assent to its 1')olicy by other participating
Governments.
Premier Poincare, of France, in succeedinP" M. B!'iapd, has awaron'tly held
to tre view that Frar.ce could not well be represented at the conference
without a previous undertaking on the par·iJ of Russia to allow full faith
and credit to her prewar debts.
On all these points the issues at stake
X-J323'
- 2 -
177
a.re "'l;loli tical 1' in the broad sense of that term rather than economic.
But the !)Osition of trose who regard the conference as likely to be
\
successful in the economic sense., only as issues affecting the rehabilitation of Bussia, Germany. ll.ustria, and Southeastern Europe generally, can be
disposed of, is that the plan
1.'/hich may be adopted is not very likely to
succeed on account of the natural Hmita:tions to wb.ich it would be subject.·
Somewhat the same position is taken as regards the
7
sug~estion ,th~t
no
reference be made at the Genoa conference to the que' ti"On of German repa.ratione.
Within the past month or more it has been contended more positively
tran ever before that the reparations problem is an almost inevitabie element
in any discussion whicn aims to develop a general solution for European
questions at large."
The Review then turns to the reparations situation and calls attention
to the unsatisfactory position in which the reparations <fu.estion has been
left.
The Review then considers the question whether the best way of
'
settling with France durinq
'
the next few years may not be an extension
of the plan provided in the Wiesbaden agreement.
As to this it remarks:
"It sl3ems to be more and more admitted th:~.t· the best way of paying
-'ranee in the next few years will be by an extension of the method provided in the Wiesbaden agre.gmen t, a.l though the use of German labor in the
;devastated
.· f
re~ioris,
to be practicable.
, the French
which 1qas contemplated in that agreement, may not prove
t:»qrnents in kind will not, hol"lever, ultimately solve
situation~
Speakin'Sl then of
because of the
~he
lar~?"e
French :public debt,"
ch.e.nlles which have occurred since the Brussels
conference the Review cqlls attention to. the fact that· at· the time of the
'Brussels conference business depresdon had not begun to .itevelop to any
~
considerable extent. ·It then says:
l
[
X-3323
.. 3 -
178
"Since that t.ime, however, the demoralizing effect. of the conditions
in eastern 1£Urope has reactE\)d very
irectly'upon trade elsewhere, w:i:th
the result that recently tr-ere have
rehabili~tion
of the purchasing piwer
'\lol~d, Austria, etc~
I'
several pro-posals looking to the
r buying capacity of Russia,
The proposal .whie }. appeal's to have been officially
C~~il
accepted by the SUpreme Economic
corporation of an intemat1on.aJ. or@.'anilat
t Cannes provides for the in-
on. based
upon private capital,.
the -participants to include representat.iv a of Great Britain, Frsncei
Italy,
Bel~:\:um,
desire.
United
States~
possibly others if they so
Germtmy,
The declared purpose of this
org~ization
.
is the rebuilding of
I
railroads and other means of comtrunieat~ in Russia·--~~---~~~ !)lan_ ..
c9ntemplates the creation not.anly of a
central international
co~oration
1JIIi th headquarters in London but of .affiliated corporations in the -participa-
ing countries as well.
.~
Cantribu.tions to the capitalization of the corpora-
tian are to be made in the currencies of the several contributing countries.
but control is to be exercised by the central
orga:nization~
11
The reeent developments in connection with the T3r Meuien seheme are
outlined and a cantrast is drawn between that plan
an~
the recOmmendations
laid before l='arliament by Mr. Lloyd-George after the close of tre Cannes
conference.
The Review then comr:ents upon the savings to result from
naval 11mitation, as foilows:
"The savings
wh~ch
will result from the limitation in armaments
decided upon at the Washington conference will, unfortunately, affect
immediately onl7
tr.~.
th.ree countries whose finances are already in a
relatively sound c.ondl,tion";
It
i~ es~imated
that t11e reduction decided
u'l;)on for the United States will.save about $200,000 1000 on the present
1
building program.
· The saving in
E;n,~land
and Japan· wil1 reach an amount
- 4ap~roximately
equivalent.
In
Fr~nce
and Italy, however, no increase in
naval armaments had been contemplated in the near future, and the savings
brought about at Washington will not affect their immediate :problems.
"It is particularly important in the present situation not only that
P.'overnmental bud1:1ets sro.,_ld be balanced., so that short-time borrowing by
I
the Government may be discontinued but
ale~
that the sum of Government
exnenditures should be decreased in order to reduce the tax burden of the
J
business community.
In most countries, ho,vever, curtailment of taxes seems
highly problematical at present.
Only in the United States has
it
been
attempted.
"Any savinl!.s w·h ich result in En,Qland next year from a decrease in
expenditures will probably have to be apulied to debt reduction.
The
situation is .much the sa1-ne in France.
"In Italy the difficulty of increasing Government revenue to meet
)
expenditures is almost as great.
In Germa.ny the balancinf.l' of the
bud~e·t
is complicated by t"be fluctuatin'? value of the marz, and large increases
in taxes are planned for the coming year."
Turning to the actual question of work at Genoa, the Beview states
that a fund amen tal is sue to be dealt
with there wi 11 -undoubtedly be the
restoration of the
~old
foreign exchange.
Discussing the latter
11
standard or some plan for the stabilization of
~uestion,
the
Beview says:
From the preliminary announcements of -unoffici3.l cl':aracter, as well
as from the "agenda", it is clear thst discussion at
relate in no small measure to tl':e restor'1ti0n of
~he
lieu thereof, to the nevelo'!jment of some plan for the
foreign exchange.
~ch
Genoa is likely to
R:Old standard, or, in
s~abiJizetion
of
difference of o:p,.nion exists concerr.inP: the specific
means to be ertployed 3Ild the incidental difficul t:i.es likely to be enco-untere ·
in bringing altout a return to the gold standard in furope,
•
But there is
X-3)23
- 5 a gratifying unanimity
01 o~inion
aiTong leading
economist~,
financiers,
and s tatesrren to the effect t'bat any "9errr,anent rehabilitation of credit
and currency systerr:s will necessitate a. return to a. s;rold basis of some sort.
It is quite obvious, ho>Never, that :r,>riol" to any atterrp,t to reinstate the
I
gold standard, many complex problems will
problems connected with reparations
i
~ave
p~ents,
to be solved.
These are
with domestic and foreign
indebtedness, with the effect of national policies upon the amount and
direction of current expenditures.
The issues involved necessitate far-
reaching international adjustments that are likely to be the subject of
prolonged negotiations.
Extraterritorial interference •.vi th power to raise
money or to spend it is ri¢1tly regarded as an interference with the
sovereignty of a State, and can only be justified in extreme cases.
On the
other hand, a simple ultimatum to insolvent nations to the effect that
obligations rr.ust be met and budgets
~t
a solution of international difficulties.
be balanced, will not bring about
The capacity of the several
nations to defray recurrent expenditures out of re?Ular sources of income
rr,ust be carefully appraised, and exnendi tures in excess of ability to pay
must be eliminated before budgets canoe balanced and inflation
stopped.
conse~uently
Until some sort of international agreement based upon recognition
of this patent fact has
made possible the cessation of deficit financiering
no "9rog)'am of currency reform involvin.-z a return to the gold standard has
I
any chance of success."
Retention of the gold standard as an interns tional basis of
values
is endoreed by the Review as follows:
"The argument in favor of the restoration of gold as an international
standard of value is twofold - first, that no superior or better basis for
~,-t'
-prices has as yet been developed, and, seccnd,. that the use of &!Old as an
·~ (-f
_...._
-·
X-3323
- 6int~rnational
currency or price basis
affords~rong
pressure to bring about ex"O:msion of credit.
In ·international trade the
gold standard also constitutes a nexus between the
countries,
It
c~n
protection against
price levels of varioW"
by no means be said to be an ideal means of payment, but
under normal conditions it has been very effective in preventing the price
'
level of any one country from falling toomarkedly out of
of others.
"l.oss of
,Q"OlO
1 ~'hen
line wi th that
currency and credit systems are erected upon a gold basis,
following imports tends to check the :process of further credit
eX'9ansion 1 and the lmowled!:!e that gold may be wanted for export is under
all circumstances a deterrent to indefinite credit expansion.
In short,
international purchases and sales tend to offset one another except to
the extent that occasional adverse balances can be covered by means
of gold shipments,
However, if there is no attempt to rraintain the gold
standard or to link gold in any way with the internal price level, the
process of gold denudation can go on to the point of exhaustion.
In fact, that is what has virtually happened in a number of countries,
Ordinarily the rising intl'lrest rates that would accompany an outflow
of gold would check such a movement.
,
...
of
~aper
~ut
if credit expansion by means
issues goes ahead unrestricted by the need of redemption,
either immediate or
~respective,
no effect upon interest rates need ensue.
n
_.~...-
.,
·-~q
-~'._;r-.-.;.J
- 7- •
X-3323
Discussion of the inflation now existing in Europe leads to the
question whether a so-called gold exchange standard migd not be
employed and the Review urges tr1at artificial methods of controlling
exchange operations are of no permanent value:
"Their inadequacy as a means of correcting funda;r.sntal ::alaJjustments of trade balances nas been made so obvious by experience ahd. nas
been a subject of such lengthy comment that it does net require further
elucidation.
It is, however, conceivable that the stabili;ation of
exchange and the reestablishment of a satiilfactory system of internal
payments could be accomplished by a rigorous c cntrol over credit and
currency without return to the gold standard.
3ut it is highly unlik.;lly
that such control wculd be sufficiantly rigorous and discriminating to
prevent exchange fluctuations from continuing to be of a magnituje
sufficient to constitute a serious interference with foreign trade.
It
may be that the use of the discount rate as a means of price stabilization could with wise manipulation1 t.mi1ampered by political pressure)
be effective in some countries.
Chan~es
in discount rates wouli then
act as a means of encouraging the expansion or forcing tna contraction
of credit-created currency without either an inflow or outflow of
~old.
3ut such a scheme presupposes a centralized control over money markets
that was by no means assured even in prewar times, and it also presupposes a sensitive response to variations in- the interest :rate that
implies the existence of highly organiztU international
no longer exist·"
\
mar~ets
which
- 8 -
X-3323
The statement is plainly :nade that the great accumulation of
gold in the United States at tne present time is gravely dangerous> the
Review stating tne case as follows:
"It is evident fro:n all that has been said that the United
States nas an interest irJ. tne introduction of some form of gold standard
as a meani. to the resumption of trada relationships through tha effect·:.
ive stabilization of exchange.
At present} furthermore 1 the abnormal
concentration of gold in this country is a source of danger, because it
is a false guide in matters of credit policy - no longer an index of
the outside limit of legitimate credit expansion.
Considerations of
national interest alone areJ therefore 1 a sufficient reason for a
careful weighing of pro.,.,osals looking to a redistribution of the gold
)
sup1;lies of the world and involving a return of sorr,e part of the gold
held by the United States for use elsewhere.
No proposals of any sort
should, however 1 be entertained until far-reaching guaranties o!
fiscal refor,n have bean secured from the countries tnat require aid.
Otherwise the assistance would be detrimental to the extent that it
•
'
would lead to the postponement of the necessan fiscal reforms wnich
must be made preliminary to the rehabilitation of
c~rrencj
systems and
the reestablishment of .stabilized excnange relationships. 11
The Review closes witn a sketch of the present international
balance situation ir:.. wnich it is shown t;1at:
"In November, 1921J a detailed estimate of tha net unfunded
balance due to the United States from abroad was presented,
Exclusive of
the war-time debts of foreign Governments to the United States Govern-
·' .r·v~.
_,_,.,_,!
..J..,
- 9 men t, which amo'Qll t to :tl 0, 000,000 , 000, roughly speaking, it was
estimated that on October 1, 1921. there was owing to private creditors
in the United States a net unfunded balance of $3,408,000,000.
'During October,
i~orts
N·ovemb~:r,
end December exports of merchaneise exceeded
by a little less than $300,000,000; and for the same period
net imports of
~old
and silver were but slightly short of $125,000,000,
leaving a net addition to our unfunded balance from "visible" sources
of $175,000,000.
When, however, the remaining or "invisible« items
in the balance are taken into consideration and sunned up, it is likely
that they constituted a. net debit for the three months of between
$175,000,000 and $200,000,000.
durin~
The result is that the visible items
these three months ha?ebeen fully offset or possibly a little
more than offset by the invisible elements in the balance, leaving
the former estimate substantially unchanged and if anything sli?"htly
reduced at the close of 1921.
In view of all the available facts,
therefore, it seems fair to take $3,4oo,ooo,ooo as the approximate
amount of" our unfunded international balance on January 1, 1922. ·
')
)
•
--.
FEDERAL RESERVE BOARD
WASHINGTON
February 6 1 1922.
X-3324
SUBJECT:
Letter from Federal Reserve aank of Boston
RegarQing Insurance on Juilding
Dear Sir:
There is transmitted herewithJ for your
information, copy of a letter from tne Governor of
the Federal Reserve Bank of Boston regarding the
insurance on the new building of t.r1at Bank.
Yours very trulyJ
(El:closure)
G o v e r n o r.
)
GOVERNORS ALL F.R.BANKS EXCEPT 30STON
'~
:---· ~
_:....,i'__ .,'t....V
. _,
-·' ---r
...
_;_,_~ )
c 0 p y
FEDERPL RESERVE BANK
OF BOSTON
X-3324a
February 2, 1922.
Mr. W. P. G. Harding1 Governor,
Federal Reserve Board,
Washington1 D. C.
Dear Governor Harding:
I have just completed our final arrangements with the insurance
companies as to the rate of insurance on our nev1 bank building. and I
thought that the Beard might be interested to knew what that rate
was and what the insurance will cost us per year, especially as the
Board of UnderNriters state that the rate they have issued on our
bank building. is the lowest rate they have ever r,ut out.
The basic rate is 9· 6 cents per hundred dollars on an 80 per
c_ent co-insurance clause which makes an allowance for the value of the
foundations, By taking the .insurance policies for five years, we
get a five-year insurance at four times the rate for one year. The
result is that a five-year policy costs us 33.4 cents per hundred
dollars, and on $2, 8001 000 comes to $101 752 premium for the five
years or $2150.40 for one year.
Since the time that the building was started, vwe have been in
communication with the insurance people and tc,l-i them that we would
insure the building if the rate was so lovi that we could not afford
to do anything else, but unless we had a good rate we should prefer
to set aside a fund to insure it ourselves. It seems to me that this
charge per year for insurance on the building of $2150.40 on $2,600~000
is so low that He cannot afford to insure the building in any other
way, and as I say 1 I thought you would be interested to know the reresults of our efforts in this direction.
)
Of courses we have followed the regulations required by the
insurance companies and have done everything to prevent a fire in the
building or at least to localize it I but we considered that their
.
regulations and their experience was so good that we could not afford
to do any differently from what they recommended in any event. As
a result of their recorr~endation we nave sprinklers in the basement}
certain fire partitions and fire doors and all exterior glass is wire
glass and. :r.etal frame windows... and eac:--1 window Das tvvo or three
mullions in it which divide the panes into comparatively swall pieces
and this together with the wire is expected to prevent any fire
getting inside the building in case a neighboring building was burn~d.
-2-
X- 3324 a
Tfieseregulations are applied to factory buildings and therE) is
much experience to show that they are effective.
I would add that we have been insured by the best stock
in Boston~ not the same as if we were insured in mutual
comnanies where 'v'le would be subject to additional premiwn in case
of loss in some other plant •
c~mpanies
.Also, when we finally occupy the building even this rate
will be cut slightly because we have watchmen in the building 24
hours of the day, and still another reduction about June or July
when the high pressure service in Boston goes into effect.
Very truly yours,
(Signed) Charles A. Morss,
Governor.
......_"'--'
''
'•
-..
...
FEDERAL RESERVE BOARD
WASHINGTON
X- 3326
February 11,
1922.
)
SUBJECT: Special Rerorts Leased Wire Operations.
)
Dear Sir:
For some time, it has teen felt that the Main Line
leased wire facilities of the Federal Reserve Syst~ have
been .inadequate for a prompt handling of the business carried
over them. .H the suggestion of the Federal Reserve "Board, the
Federal Reserve Leased Wire Cornmi ttee, in conjunction with the
.American Telephone and Telegrarh Comrany, has undertaken a
comprehensive study of the operations of the leased wire system
for the :purpose of determining, what additional fPcili ties are
needed and What ChAnf_es,. if any 1 Should be rrade in the present
arrangement of the wires in order to provide the most satisfactory and economical service.
The Corr.mittee advises that it will be necessary for
it to ol·tain the following. information from each Federal Reserve Bank and from the Federal Reserve Board: ( 1) The volume
and class of tusiness transmitted daily to eech other point on
the main line system; (2) The volume of each cla-ss of business
dispatched hourly.
Two forms have reen :rrovided cy the Cornrrittee on
which each Feders 1 Reserve Bank is requested to sul:mi t the information desired at this time. The forms are self-explanatory
and should be forwartled to reach the Board as promptly as possicle after the end of ~he period covered.
.
Very truly yours,
Governor.
Enclosures.
TO 'T'HE GOVERNOR OF EACH FEDER tL RESERVE :BANK·
FEDERAL RESERVE BANK OF
ORIGINAL
.........
NUMBER OF Ef•CH CL.~SS OF MESSAGES
DUPLICATE
DEsPATCHED
EA~1
HOUR OVER
CIRCUIT NO..
TRIPLICA!l'B
Date
TIME
CLASS A
·CLASS !
CLJ\SS C
I
1'0!AL
,I
8-9 A. M.
l
9-10
I
I
I
10-11
1
i
11-12
)
f
I
P. M.
12-l
t
''I
1-2
-
•i
2-3
I
I
3-4·
I
•.
I
4-5
I
I
I
I
I
-
'
I
After 5 P .. M..
f
i
NUMBER OF MESSAGES ON HPND UNSEll'!' J.T STATED HOURS
I
TIME
6
CL.ASS A
CLASS B
CLAf-S
c
TOTAL
·~-
A. :M.
..
I
~~-
9
f
lCi
·--
11
.
l
i
·-
12
1
!
i
-·-~
'
.
I.
i
i
P. M.
I
!
'
j
i
2
-
3
t
,
I
.,
t
l
I
I
4
I
I
.I
I
I
5
-·
Note:- This form of report should be kept da~ly dunng the pan.od Feb. 20 to Ma
21 (both dates inclusive). At the end of .the period, ell daily reports should.
promptly fo~arded in triplicate to the Federal Reeerve Board.
c
!
I
FEDER~t.
GOLD
RESERVE l30JIRD
SE'Y'TLE'MENT FUND
Summery of trensacticns fo r period ending Fetruary 9 1922.
l?ed.eral___
Balt.nce l a.st
Gold
Gold
Withdrawals
s +,at. el'!'en t
Deposits
Feb. 2, 1 922.
B-os-to-n---+r---::-45~ 728, 079.54 $
New York
69,131,5 40.85
Philadelphia
~ 342 9o4.14
Cleveland
~7; o51~ 134.84
Flicbnonl
26,744,034.90
Jl.tla:nta
20.,~j6,47J•S5
Chicago
82, bb5.,. 0 .65
St. Louis
28,798,075,26
<23.o9
~~innea.polis
30,. 800,15
Kansas City
42,479)931.~1
Dallea
11,598,922. 0
San Francisco
37,104,3 40.08
Total
It
827,750.00 $
2, 914, 029. 87
1, 212, 86e·
2,373,1 •
1,212,617.29
957,600.00
1,368,o90.00
l31,050.00
04,333.56
941,334.43
1, 259, t378. 29
1,491,380,00
a6
1,274.29
4, 374,000.00
8, 002, 500. 00
4,000,000.00
6.,ooo.. 6oo~oo
3., oog, 1oo. oo
2, 001, ooo. 00
7, oo6,4oo. oo
2,000,000.00
5,001,800.00
3,ooo,ooo.oo
5, ooo, 400.00
X-3327
_ _ _ ,__( CONFID~l AL)
Aggregate
Aggregate
withdrawals
deposits and
and transfers
transfers from
to .Agent 's fund
.Agent 's fl.md
$
$
827,750.00
1,274.29
2., 914, 029.87
1, 212, 8 8.
2, 373,1 4.
1,212,617.29
957,600.00
1, 368, 890. 00
l31,050.00
04, 333·56
941,334.43
1,259,878.29
1, 491,380. 00
6
6a
4, 374, ooo. 00
8, 002,500.00
4,ooo.,ooo.oo
6,ooo,6oo.oo
3., 009,100.00
2, 001, ooo. 00
7,0c6,4ou.oo
2, ooo, ooo. 00
5,00l,l500.00
31 000, 000, 00
6, 298, 4oo. oo
499,721,277·11 I~
Washington, D. C.
February 10, 1922.
TRANSFERS
-------------------------------~----Debits
Credits
$
13, coo, ooo. 00 $
1,ooo,~ooo~oo
-
-
-
-
14, ooo, ooo. 00
-
10,000,000.00
-
2,000,000.00
2, ooo, ooo•. 00
-
l $ 14, ooo, ooo. 00
------------~----------------------------~--------------------------------------------------------------------------------------------------------
'Federal
Reserve
!lank of
Settlements from
Febru~
3, 1922 to February 9, 1922
inclusive.
---------------------------------------------------------------------------
Balence in
fund a.t close
of business
Feb • 9 1 1922 •
Summary of changes in ownerabip of gold by banks through
transfers and settlements.
-----------------------------------~~
Increase
F E D E R A L
R E S E R V E
Sr:I"'..m ary of tr3Dsact.ions for tleriod ending February 9. 1q22.
Gold
Gold
Balance last
t'-3de ra.l
'
statement
Feb. 2, 19~2.
Re serve
.Agent at
Withdra;;als
Withdrawals
for
transfers
to bank
Deposits
..
Boston
I$
120,000,000
New York
t
381, 000, 000
I$
10;;000,000
125.. 389,260
I
Cleveland
160, 000;.000
I
Richmond
28,295,000
I
Jltlanta
46,500,000
Chicago
296, 644; 500
I$
I
I
'
Philadelphia
I$
St. Louis
62,700,000
Minneapolis
301 360,, O:JO
Dallas
San Francisco
I$
I
( ~ONFIDENT IAL)
Total
Total .
Withdravvals
I$
10,000,000
Deposits
I$
X-3327 a
Washington, D. C.
February 10~ 1q22.
Balance at
close of
business
Feb. q. 1q22.
J$
I
I
'
3.,000L000
t
110,000,000
381, 000, 000
125, 389, 260
25,295,000
3, 000" 000
2,000, 000
3,000:000
2, 000,000
ooo, 000
20, ooo, 000
8, 000,000
20,000,000
I
308,644,500
2,000,000
1,6oo, ooo
I
I
2, coo, 000
1,6oo, ooo
I
62,300,000
'1
2. ouo, 000
g~
2:000,000
2, ooo, 000
45,500,000
' 9, 200,000
2, 000,000
30,360,000
I
7, 000.,~ 000
1, 484,000
l, 298,000
8.; 298.-000
I$
Total
F U N D
160,000,000
1, 484, Ci.)O
212,16 8, 000
s•
Deposits
through
transfers
from bank
I
9, 200,000
Kansas City
..
'
3, 000,000
I'
P GE N T
'·
36, 29s, ooo
203, 870, 000
I$
25, 6oo, ooo
I$
1, 463, o42, 760
.
FEDERAL RESERVE BOARD
WASHINGTON
X-3323
Fe.bruary 14, 19.22.
Mernl: e r 'Bank Su:pervis ion.
SUBJECT:
Dear Sir:
There is transmitted herewith, for your information,
copy of letter addressed to one of the Federal Reserve Banks
in response to a re 1_uest that the Federal Reserve Board otaline and define the :r;:owers and duties of the 'Federal Reserve
Banks reg;:-rding the TDatter of rreml:er bank surervision.
Very truly yours,
G o v e r n o r.
Enclosure.
'
.~\{"'\
-·-'
r-'~J
·•
. ...
February 14 1 1522.
X-332Sa
Dear Sir:
F.eceint is acKr.owledgod of your letter, in which you request the Federal Reserve Board to outl ir:e and define the powers
and dutiss of the Federal Reserve Banks regnrding the matter of
member bank supervision.
So 'far as the lav; is concerned, it is sufficient to refer
to the provision in Sect:i.on 21 of the Federal Reserve Act that "In
addition to the e.l(aruiae!'th>{lS made 2-nd conducted oy the Comptroller
of the Currency, every E\Jderal Reserve Bank may, v:ith the approval
of the Federal Reser-ve Ar;ent or the Feder.:.l Reserve Board., provide
for special examination of member banks within its district". This
provision gives to each Federal .Reserve Eanh. the legal rjgi1t,
subject to approval by the Federal Reserve Agent or the Federal Reserve Board_, to examiue any of its member banks, including national
banks and State member banks.
It is difficult to lay down any hard and fast' rule of
policy for Federal Reser':re Banks to follow in e.l(ercising their power
to examine member banks. The Board is of the opinion that unnecessary
duplication of examinations sho1~ld be avoided~ and that independent
examinations need not be made by Federal Reserve Bani-:s unless for
some reason the reports of examinations made by e.wm.iners of the
Comptroller of the Currency and of the State Ban!Cin? Departments
fail to give the Federal Reserve Bank the idormatiorl .-1hich i t feel·s
it should have.
The Board believes that the practice of having·
Federal Reserve Bank examiners participate in examinations conducted
by the State Banking Departments is a very desirable one and it misht
be possible for the Reserve Bank E.<aminers to participate also in
national bank examinations on some basis satisfactory to all concerned.
There may, of course) be special circumstances which make it desirable
for a Federal Reserve Bank to undertake an independent exrunination of
a member bank and whenever such arl occasion arises the Federal Reserve
Bank should not hesitate to eAercise this discretionary po-;ier which
it has} subject to the approval of the Federal Reserve Agent or the
Federal Reserve Board.
Generally: 3TJ8aking, it is true that the authority to take
corrective measures r-ests with the Comotro~.ler of the Currency vvith
respect to national banks, and with th~ 2tate ba:'lking au.tlwrities
vvith respect to State member banks. You. are aware, ho>ieverJ that
under the authority of Section 19 of the Feder2~ Reserve Act the
Board has prescribed penalties for failure on the part of member banks
X-3326a
-2-
to maintain ·the required reserve balances; and the Board also has
au"chority to require 'a State member bank to v<ithdravv from the
Federal Reserve System upon proof triat it has failed to comply
vvith the la:iv or the regulations of the E'ederal Rsse~·ve Board.
Furthemore., Section 2 of tLe Federal Rese:cve .Act provides for the
forfeiture of t:ne rights,, privileges and franchises of any national
baJ:tk whose failure to comply with the Feder<ll Reserve .4ct has been
determlned and adjudged by a United States Court of competent
jurisdiction in a suit b:~oui-:ht for that purpose "under the direction
of the Federal Reserve Board 1 by the Comptroller of the Currency
in his ovin name."
The Federal Reserve Board takes the viev; that cases of
noncompliance ·with Federal laiv and cases of objectionable practices
on the part of member banks should f j.rst be brought to the a.ttention of the particular member banks Vlith courteous requests for
remedial action. If this fails to brine, satisfactory results 1 the
matter should be reported to the State bankint authorities in the
case of State member banks and to the office of the Comptroller of
the Currency in the case of national banks 1 and whenever such reports are made to either of these authorities, the Federal Reserve
Board should be so advised.
Very truly ycursj
(Sibned) ''· P. G. P....ARDING
G o v e r n o r.
FEDERAL RESERVE BOARD
WASHINGTON
X-3329
Febr~ary
SUBJECT:
15, 1922.
Bill to enlarge po:iers of Farm Lean Banks
Dear Sir:
There is enclosed herewith, for your information_.·
copy of a letter addressed by the Board., on January 26, 1922,
to the Chairman of the Committee on Ban).dng and Currency of
the United Staten Senate, endorsing S. 3051 which proposes
to enlarge the powers of the Farm Loan Banks. This bHlJ
which was introduced by Senator Lenroot, is the same as
H. R. 10058, introduced in the House of Representatives by
Mr. Anderson, and embodies the reco~~endations of the Joint
Commission of A6ricultural Inquiry.
Very truly yours,
Gcver·nor.
f
CHJIIRMEN .AND GOVERNORS OF .ALL F.R-BANKS •
•
)
~ ('\I:""
_ .. _ .._1(.._)
l
c0
p
y
FEDERPL RESERVE BOARD
~.lashint::ton
Jan;;.ary 26, 1922.
X-33?.Sa
:
My dear Mr. C;1airman:
Receipt is acK.:.o~~led~ed of your letter of January 23 1
1922, encl o"'int-: a co·ny of Senate Bill 3051 and reque::otint;_ the
views of the Federal Reserve Board witn rebard to it. This is
the bill, the enactment of ~hich is recorn~ended in the recently
published report of the J oht Comn;ission of Abricul tural Inquiry.
Tne same bill has ·also "been introciuced in the HousE> of Rep resentatives as H. R. 10056.
While t;1e proposed bill deals mainly with the :Federal
Farm Loan Systerr: 1 the administration of which does not, of course 1
come vv i thin the jurisdiction of the Fecteral Reserve Board, the
Board is ~;;lad of the opportur1ity to say that the bill nas its
cordial approval and support. Tne Board believes the bHl to be
sound and constructive lesislation that is well desi1:;ned to afford
much needed relief to asricultural aLd live stock interests by
adding to their available credit f acHi ties, which at the present
time are not adequate for their requireL;ents.
The bill proposes to add to the Federal Faril~ Loan Act
a new title 1 Title 11., con>:oisting of Sections 201 to 209. SubdivisiOL (a) of Section 201 provides ti:1at eac'~ Federal land. bank}
subject to resulation by the Federal Farm Loan Board, may discount
for any bank or live stock loan company 1 v,rith the endorsement of
such bank or company 1 any note or other such oblig_ation the proceeds of which have been used for an asricultural purpose or for
the raising, breeding, fattenins or marketin),S of live stock~ and
may make loans to any coonerative association of producers of
staple agricultural products upon the security of warshouse receipts covering such products. Subdivision (b) of Section 2Dl
provides for the issuance by Federal land banks of debentures or
other such obligations with maturities not in excess of three
years secured by discounts or loans made under subdivision (a).
Section 204 provides that any Federal reserve bank may discount
for a Federal land baEk 1 ur on t.1e lat ~er 1 s er::.dorser;,er.t, disco:mts
or loans made under Sectio1:c 201 ;,.r,ic;·, nave a naturity at tne time
of discount by t11e Fedsral reserve bank not in e/~cess of six
months 1 ar~d Section 2.CS provides t:J.at any Federal reserve oar.k ,r,_ay
..
.
-2-
X-3329a
buy and sell the debentures and other obl is,ations of a Federal
land bank issued under Section 20~ to the sar:e extent and
subject to the same limitations as those upcn 11hich ".;hey may
buy and sell Federal fann loan bonds, The oth0r f3e'::Uons of
the ne•.- title provide for the creation of a nfann cred:i.ts
department 11 in each Federal land bank for the purpose of exercisinb the po~ers conferred by the title 1 and provide that
the capital of each sucn department shall be $1, COOJ OC01 to be
subscribed by the UrJj. ted. States 1 ru.d contair1 certaJ.n other
necessary administrc;:U.ve provisions iihi0h are not importar,t
for t(le purposes of tni s seneral discussion.
At the present tirr.e the Federal E'arm Loar1 Act provides
the rr.eans for s:.tpplyins the farmers lcnes til::e crer.L.ts u:;on the
securi t.y of first mc.rt.g,a;;es upon ag,r Lcul tural lands; and uncier
the terms of the Federal Reserve Act ag_ricul tural paper with
a maturity not :i,n ex.cGss of six months is eligible for rediscount
by Federal reserve banks after it bas beer. disc0unted and endorsed by a member bank of the Federal Reserve System.
As
pointed out, hmvever, in the Report of the Joint Commj ssion of
.Ag,dcultural Inquiry, there is need for agricul tu.::-al cndi ts of
an intermediate type, running, from six months to three years, for
production and :narketing purposes. The farmers 1 turnover in the
production of crops; including the plantir:g, harvesting and
gradual marketinf; through orderly pror.esses designed to avoid
flooding the market at any one time, norwally requires approximately twelve months; and in the live stoc~c j ndustry the turnover ·
may require as long as threa years.
Conseque.rtly, in order to
make it possible for the farmer and lJ.ve stoc~ :ran to liqu:i.date,
out of the ultimate proceeds of his a)c;ricul tural t.ra"1sactions,
his indebtedness incurred for production and marketinb purposes,
it is necessary that such indebtedness be permitted to run for
periods ranging from six months to three years, depencii·;g u-r:on the
particular commodities being, produced and marketed.
Loans with such maturities cannot be ;;ranted, jn sufficient
amounts to meet the ;1eeds of agriculture .. by ordinary bankir.e, institutions the liabilities of which are for the most part payable on
demand~ unless the banks can rely on beiut; able to redisG0'.mt the
loans in smeresenc1es. The main purpose of the bill undor consideration~ as the Federal Reserve Boari understands it, is to provide
proper ar.d adequate facilities for such rediscountz.
Bills have been introduced in Con~.ress within the
proposing_ to amer.d tn.e Fecl.eral Reserve .Act so as to make
for discount by Federal reserve bar1ks agricultural paper
maturities up to twelve months, instead of six n;onths as
past year
elit:ible
iVi th
the law
, ...
I
•
X-3329a
-3-
now provides.
The 3oard has expressed its disapproval of these
and· similar bills, ber;ause the enactment of any such bill ·would
materially lessen both the liquidity of the paper held by tne
Federal reserve banks and the elasticity of t~1e Fed<?ra..l :reserve
note currency which is based upon anJ s2-cu::-ed by the paper so
held. The bill reccmmencled by tne Jo:i.m Commission of A§,:·icultural Inquiry avoids tr,is danger, ar,d at the sa'lle ti::e offers
far more adequat3 rel isf to the ae;rict<l t1.<raJ. interests of the
country than could be ol)tained throu:;h tr1e enar.tment of such an
amendment to tne Fe::iel·al Reserve Act.
The l<~ederal Resen'e Board has carefully eYam:i.necl. the bill
introduced in the Senate as S. 3051, and. in tne House of Representatives as H. H. lOC58, etnd ap~roves Lot only the pu;:pose and
substance of the b~.11, but also the form and languag-:1 tltet have
been acl.olJted in drafting it. The Board is of the cpim.otJ that
the bill is admirably designed to accoml)lish the pu.rposos Yihich
its framers have in mind and that its various provis:i.t•ns are so
coordinated as to provide the most efficient machinery for the
performance of the new functions of the Fedora1 land banks without
in any way interfering wHh their present activities.
Very truly yours 1
(Signed.) W. P. G.• HllRDING
G o v e r n o r.
Hon. George P. McLean, Chairman,
Committee on Banking and Currency~
United States Senate.
TREASURY DEPARTMENT
WASHINGTON
February 9, 1922.
The Governor
Federal Reserve Board.
Sir:
You are advised that the Department has referred to the Comptroller General
of the United States, Treasury Department Division, for settlement the account
ot the Bureau of Engraving and Printing for preparing Federal Reserve notes during the period January 1 to January 31, 1922, amounting to $255,951.22,as follows:
Federal Reserve Notes, 1914
•
J.£
Boston ••••.••••• 18,000
New York ••••••• 1·,059 ,000
Philadelphia... 321,000
Cleveland •••••• 127,000
Richmond ••.•••• 25?,000
Atlanta. ••••••• ·• 134,000
Chicago •..••.•• 309,000
St. Louis. • • • • • 15,000
Minneapolis....
Kansas City....
Dallas. • . • . • • • .
San Francisco..
43,000
75,000
1, 000
65,000
2,443,000
MlO
1,000
971,000
57,000
106,000
5:3,000
55,000
229,000
1,000
7,000
8,000
i_gQ_
80,000
160,000
20,000
l.:JQ,OOQ
. J.4,000
lO ,000
124,000
31.,000
$50
13,000
5,000
__
1,000
._
2,000
6,000 .
s,ooo
34,000
1,000
78,000 _5.000
17.000
655,000
Total
§t)lOO
6,000
21,000
9t.,'OOO
2,203,000
403,000
333,000
327,000
199,000
667,000
47,000
53,000
117,000
2,000
309,000
4,759,000
4,759,000 sheets at $49.58 perM ••.•..• $235,951.22
The charges against the several Federal Reserve Banks are as follows:
Sheets
Compensation
Plate
Printing
~recsed
~aterials
Compensation Total
Boston........
99,000 $ 1,648.35 $ 1,581.0~ $1,208.79
$4,908.42
~70 •.25
New York •••••• 2,203,000 36,679.95 35,181.91 26,899.65 10,464.25 109,224,74
Philadelphia •• 403,000 6,709.95 6,455.91 4,920.63
1,914.25 19,980.74
Cleveland •••.. 333,000 5,544.45 5,519.01 4,065.95
1,591.75 16,510.14
Ricbmond •••••• 527,000 5,444.55 5,222.19 5,992.67
1,553.25 16,212.66
9,866.42
Atlanta ••••... 199,000 5,515.35 5,178.03 2,429.79
945.25
Chicago ••.•... 667,000 11,105.56 10,651.99 8,144.07
3,168.25 55,069,66
2,330.26
St. Louis •••.• 47,000
782.55
750.59
573.87
223.25
2,627.74
Minneapolis ••.
55,000
882.45
846.41
647.13
251.75
5,800.86
Kansas City ••• 111,000 1,948.05 1,868.49 1,428.57
555.75
99.16 .
9.50
Dallas ••••••..
2,000
53.30
51.94
24.42
San Francisco.. 309,00Q. 5.1~~ J..\,~.~4.1§. ~_.772.89 _1 .....~.~7..~-~?- J.P..~~~~
4,759,000
79,237.35
76,001.25 58,107.39
22,605.25
255,951.22
The Bureau appropriations will be reimbursed in the above amount from
the indefinite appropriation "Preparation and Issue ot Federal Reserve Notes,
Reimbursable", and it is requested that your Boa:rd. cause such indefinite ap:propriation to be reimbursed in like amount.
By direction of the Secretary:
Respectfully,
s. ?. Gilbert,Jr.
Under Secretary,
TREASURY DEPARTMENT
WASHINGTON
Febr-ua.ry 9.,. 1922,
The Governor
Federal Reserve Board.
Sir:
You are advised that the Department has referred to the Comptroller.
General of the United States, Treasury Department Division, for settlement
the account of the Bureau of Emgraving and Printing for preparing Federal
Reserve notes during the period January 1 to January 31, 1922, amounting
to $84.29, as follows:
~
1918
~eraJ. R~;serve ~s.
$1000
~~ew
$5000
York • • .. . . . . . . . . . . . . . . • • . . . . . l,Ouo
San Francisco
•
41
...... ,
.............
1,000
100
200
400
1,700
100
200
Cleveland . , ...................... .
Ri cllmond ......................... .
_?00
·-~-
1,600
1, 700 sheets at $49.58 per M
500
............. "' .
Total
$84.29
The charges against the several Federal Reserve BankS are as follows:
Sheets
CompenPlate
sat ion Printing
New York ••••• 1,000 $ 16.65
1,67
100
Cleveland •••.
200
3.33
Richmond ••.••
400
6.66
San Francisco.
28.31
1,700
r
Increased
Materials Cmnpensation
. $ 12.21
1 .. 60
::..20
6.39
27.16
$ 4.75
1.22
$ 15.97
.47
.95
1.90
8.07
2..44
4.88
20.75
Total
$ 49.58
4,96
9.92
19.83
84.29
The Bureau appropriations will be reimbursed in the above amount from
the indefinite appropriation "Preparation and Issue of Federal Reserve Notes,
Reimbursable", and it is requested that your Board cause such indefinite appr~priation to be reimbursed in like amount.
By direction of the Secretary:
Respectfully,
s.
P. Gilbert, Jr ••
Under Secretary.
·;IWI'"""'
~~
-·
....,...
..,;!
,
GOLD
30~055,598.62
69,265, 9tll .64
60,023,7ciJ.86
47' 648, 431.97
34, 82,, 48~.82
26, 58 ' OJ. .• 43
93,~7,08~.(£
35,
9,321.17
lansas City
Dallas
· 67s,eoo.oo
2,727,350.00
1, 055,801.18
1,7~, 110.15
1~1 6,1~0. 00
982,6 5.00
1,047,673.£5
2,20.3,550.00
386,534.60
745,394.92
,....
FEDERAL RESERVE BOARD
S E T T L E M E N T FUND
s
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
,-.
............_
X-3331
CONFIDENTIP
Aggregate
d.eposits &.d
transfers from
A ant's fund
$ 10, ooo, ooo.oo
7' 001, 400. 00
4,100.00
7' 001,400.00
4,100.00
-.
2, 011, ~~oo. oo
3, 036, oco. 00
2, 001,200.00
5, ooo,6oo. oo ·
1, 003, 700.00
6, 001,600.00
D.C.
~lashinbton,
2,011,400.00
3,o'lb,ooo.oo
2, COl, 200.00
5, 000,600.00
1, 00), 700.00
6, 001,600.00
Februar 1
.. }
1~
T R A NS F E RS
---------------------------------Credits
Debits
l8,WO,OOO.OO
55, ooo, ooo. 00
11,000,000.00
7,000,000.00
6, 000, ooo. 00
2,000,000.00
4,ooo,ooo.oc
2,000,000.00.
--------------------------------~---·-----·----------------------------------
Boston
New .York
Phila.te1rhia
Cleveland
Richmond,
Atlanta
25, 91 o, 695. 85
Chicago
St .. Louis
¥inneapolie
10,046,456.91
4,673,685.90
4,937,464.13
Kansas City
Dallas
San
rran·i
o
Total
'total
Debits
96,539,2Sl.4t.
338,027,629.19 .
105, 213' 3 97. 25
83,271,140.71
96,(,10,309. 09
33,145,228.26
'149,125, 433.90
go, 250,117. )3
22,140,432.15
70,435,094.58
,284, 4.
Total
Credits '
102,6154,367.90
312,116,933.34
110,366,643.01
95, 2'~6,~44.. 7g
100, 0':?.3,456. 0~
44, 939, 097. 34
161, ~56,679. 87
80,20},660.42
~ 7,466, 745.25
o5, ~97 1 630. 45
,_ gl,2~6.4
Net
Credits
6,145;,1~.44
5,113,250.76
11,955,504.07
. 1, 413' 146 • 93
11, 843, 869. 08
12,331,245.97
----------------------------------~>
27, 52.2,1 o;. riJ
102, 62~- 26€>. 79
4o, 075,.336. 44
51,0o7,225.69
311, O:.Sl, 862,75
29, 531' 220. 56
105, 141, 860.38
20, 974,914. 26
-;o, 919, 5<:£. 30
41,073,203.38
17' 430, 380.j4
41 26 4 0 -
. 49, 299, 025.16
Decrease
11,854,893-56 $
Increase __;)
29,0391 J04.l5
-
5,886, 749.24
...
4, 955, 504. 07
-
4, 586,1553.07
...
I
14, o46, 456.91'
4,673,685. 90
6, 937,464.13
11,843,869.08 " •
10,331,245.97
-
496.. 901.91
56,716,825.18
~
.I
-~
FEDERPL
RESERVE
T
· Surnrr:ar·i of transc:tctions for nerio<l ending, Febrc.tary 10 192':>.
Federal
B<la.nce last
Gold
Gold
Reserve
statement
·
Agent at , Feb. 9, 1922. j Wi thdrawale
Deposits
~oston
I$
110, 000, 000
New York
I
381,000,000
I$
l
I$
I
l
l
125,339,260
C1evelar•d
160,000,000
Richmond
25,295,000
Atlanta
45,500,000
Chicago
308,644,500
6, 000,000
2,000,000
9,200,000
1, ooo, 000
Kansas City
30.,360,000
10,000,000
I$
I
I
2,000,000
St, Louis
.I
Dallas
l
Totc.l
Deposit~
Withdrawal a
X- 333la
Washington, D.C.
___ February 17, 1922.
TBalance at
closA of .
:
businesr:.
Feb. 16 1 22.
I$ 10., ooo, ooo I$
..
5, 000,000
5,000,000
5,000,000
l$
-
1.
100,000,000
I
l
331, ooo, 000
125,339,260
160, 000, 000
l
25,295,000
I
11,ooo,ooo
3,-ooo, ooo
l
I
13,000, 000
58,500,000
3, 'boo, ooo
2,000,000
10,000,000
31 0, 644, 500
2,000, 000
5, 000,000
65,300,000
1,000, 000
8, 200,000
2,000,000
28,360,000
1,484,000
1,484, 000
San Francisco
Total
5,000,00C
F U N D
Total
Dep Oioi ts
"Gnroug,h
trar:sfers
from bank
2,000,000
Minneapolis
s•
10,000,000
62,300,000
GE NT
CONFIDENT! !L
Withdrawals
for
transfers
to 1
)ank
l$
Philadelphia
Jl
2. o42, ooo 1
203,810,000
I$1, 463, o42, 760
I$
18, ooo, 000
}$
14,000,000
I$
2,042,000
12,o45,ooo l$19,ooo,ooo I$ 3o,o45,ooo
201, 822, 000
l$
33,000,000
l $1,465,997, 760
~
c"""
,....,.~
~·
•
A.-)3)2
--
HJTIE'{ OF TIIGH::ST.
(~~ges
rP.fer to
~~ges
of
t~is
pamphlet)
Introduction.
Tligest, 'Pqge .l.
Sum"T·"ry of conclusions of Corrrr:ission.
Tli~st, -o,ges 1 to 9.
Feder<>l Feserve System, Digest, 'Page. 9.
Ch;rpt~r
II.
Oper·tions of Feder0'\1 B~serve System
by econorr,ic neriods.
1914 .. Anril, 1917.
1.
2.
April, 1917
- Aum·,st,
3.
:'u~ru.st
·-.
- \lj"'rch, 1919
4.
March, 1919
-
5.
'
November,
June, 1920
...
' 1918
,Jurt~,
J1igest, p. 10
1918.
"
"
p. 10
p. 11
"
.June, 1921.
p. 11
II
1920.
p . 18 to 22
Chapter I II .
Tr~J.sury policies wi tb r~1.,tion to Federal :Reserve
polici~s.
nig~st
p. 23.
Chapter IV.
Feder,,l Reserve 'T;)olicy, 1920.
'Digest, p. 26.
Ch3.pter V.
Feder~l Reserve nolicy as indic'1tt:>d by a comparison of
interest r~tes on U. S. certific~tes, b~
"l.cce·.)t 'mces, commerci ?1 paper ?nd Federal
:Reserve discount r?..tes.
!liges t, p. 35.
f1l;''>~
t' .-J - C·.'
" " ,• •·• !('
j ' ;-
X-3332
- 2 -
ehapter VI .
Earnings of Federal ~eserve banks as related to
Feder~l Reserve ~olicies.
Digest, p.36.
....
Cha-pter VII .
Movement of funds in and out of New York City,
Di@"est. p. 37 •
Chapter VIII.
Defects 8nd deficiencies ot the banking ~hiner,1.
~oposed new legislation. Digest, ~.~.
Chapter IX.
Statistical tables showing movement ot mane7 and
credit.
Digest, ~. 46.
Chapter X.
Minority opinion of Ogden L. Mills.
*• *
)
Digest, p.
46.
........
X-3332
RE'PORT OF
~
JOINT
CO~ISSION
OF
aGRICULTUR~L
Introd11.ction .
. ("Page references arc-iO~~ges
INQUIRY.
ot the report).
Page No.
.
I
•
I
The Senate eoncu~rent resolution 4 which created the
Joint Co;m1ission of Agricultural Inquiry, requires
the comrois~i~~ to investigate.and report to Congress
".pon su :ru.cjects.
This report deals wiU1 ·~e fifth subjee·t, namely, the banking
and financial Tesources and credits of the countr,y,
especially as affecting agricultural credits.
Th~
7
difficulties ot the farmer are due in a measure to the
credit testrietians and limitations of the past
eighteen months. and in part to the fact that the b8nlring machinery of the co1mtry is not ade~tely adapted
to the farmer's requir~ents.
7
The proposed bill to amend the Federal Farm Loan fl.ct and the
Federal Reserve Act.
9
Discount rates of Federal Reserve banks should normally be
slightlY' above the market rates on the same class of
paper.
11
Until our entrance into the World War, the rates of the
Federal Reserve banks were, for the most part, above
market rates on 'Orime comereial paper.
11
.
'
Since our entrance into the World War, the t•ate policy of
t'he Federal :Rese,-ve ba:'iks was suborc:'i.i:late6. to the
re"'uirements of 'i;he Treasury, a,lCi. the. 'J.'rAas'lll"y policy
of borrcwinp fm:tds for th~ war at ~;·a.t-~s :>:f lntl9rest
below the ma>.rket rate. and dlscourJ.G x::tte.a ther·aaft;er
were belcw the mat'ket ratec on ehe characte:r of
pa-per to which they app'l.ied.
11
2.
X-3332
t>age No.
The cost of the war coulC! not be met out of current
taxes, end it wes necessa.ry to -orovide for immectiate
payments by m('lt?ns of the exp:msion of manufacture of
credit,
11
This necessit~ted the use of the lending power of the
Federal Reserve bmks through loans to member banks
at a rate of interest below the rate carried by the
bond and certificate of indebtedness issues of the
Governrnen t.
11
This policy induced large borrowings on the part of member
banks from Federal Fe serve banl:s, and. 1 arger ex't)ansion
of loans and discounts of the member banks.
11
The greatest ex~ansion of loans and discounts of all banks
occurred in the period between November, 1914, and our
entrance into the war.
12
During this period, the loans anct discounts of all banks
in the country expanded 4o uer cent, while ~rices
increased 75 per cent.
12
nuring the war neriod loans and discounts ex~anded 14 per
cent and ~rices increased 17 per cent.
.12.
In the post-war period loans and discounts expanded 30 per
cent, and ~rices incre~sed 33 ~er cent.
.12
In the early part of 1919, the question arose of increasing
the discount rstes of the Pederal Peserve banks in the
direction of the sounder ~olicy ef m~intaining these
rates ?cbove the m?crket r:::ctes for corwercial paper and
above the rates on Government bonds and certificates
of indebtedness.
1~
At this th9 the Government was considering the flotation
of the Victory lo:m w~ich it was then thought would
involve $6,ooo,ooo,o~c.
12
/~ ''·.~.<4"-J
3.
X-3332
Page No.
The Treasury was unwilling to undertake the flotation
of this loan at a rate of interest comparable with
commercial rates on account of the possible effect
upon existing issues of nrivate securities, and
its possible effect in requiring the refunding of
the issues of Government bonds already floated.
12
This was clearly the time for a policy of advanctng the
discoant rates of the Federal Reserve banks with a
view of curt.3.iling the enansion, speculation, and
extravagance which was then beginning.
·I
12
The discount ~olicy of the Federal Reserve banks was
again subordin~ted to the Treasury policy in
aecuring its credit reouirements, although at this
time the tendency to,lllard e~ansion, speculation,
and extravagance was beginning to be apparent.
'I
12
A policy of restriction by advances in the discount
rates could. and should have been adopted in the
early part of 1919, notwithstanding the difficulties which the Treasury anticipated in floating the
Victory loan if such a policy were adopted.
12
Had this policy been adopted in the early part of 1919,
much of the expansion, speculation, and extravagance
could have been avoided.
12
Had such a policy been adopted in 1919, the difficulties,
hardshi'ps, and losses which occurred in 1920 - 1921
as a result of the nrocess of deflation and li~dat ion would have been diminished.
12
.
'
The Federal Reserve banks and the Federal Reserve Board
took no action in the direction of restriction by
increases in discount rates until necember, 1919,
when sli~t advances were rr.ade, fol10'Pied in January,
1920, by more radical advances and by further increases during the remainder of 1920.
12
In the meantime there began and continu~d a period of
e~ansion, extravagance, and speculation, the like
of which has never before been seen in this ccnmtry,
or -perhaps in the world.
4.
•
X-3332
Page No,
When finally the Federal Reserve 13oard and the Federal
Reserve b~s adopted the policy of restriction,
loans and discounts~ currency and prices had
reached such a point that deflation was accompanied
by pe~endicular and very material declines of
prices accOfl'Panied with great losses and hardships.
The reserves of individual Federal Reserve banks, and of
the system as a whole, began to dwindle rapidly. In
some of the reserve banks, the r'3serves fell as low
as 9 per cent, 3.nd at one time it is said that the
reserves of one of the banks were entirely exhausted.
13
The tremendous drain upon the credit resources of the
co"Untry brought about the over extension of many of
the 'ban'k-s, and with some to the "!;)Oint where they
were utterly un3.ble to loan additional funds to
their customers without danger of insolvency.
13
From 1915 to 1920, the ratio of loans and discounts of
national ban.'ks to ca"~;>ital and surplus had increased from 3,g to 1 to 5.5 to 1.
·I
13
13
In many cases, further eXl)ansion could not be made without endangering the interests of de~ositors and stockholders.
The -oolicy of the Federal Reserve banks,
therefore, during this period, underwent a change.
niscount rates were raised, ~articularly upon certificates of indebtedness and Government bands, resulting
in the lii'!Uidation of this class of paper by the
member banks, and the freeing of the funds invested.
in them for other purposes.
13
13
This exhaustion of credit, counled 1"ith the decline in
exports, gav~ im-oetus to the decline in prices.
'I
With the exhgustion of the credits of European Gover.nments
in this country, the ~rchasin@: ,ower of Europe :ln
our roark~ts b <?.@..'an to fail.
This resulted in a sharp
decline in e~orts, -oarticrularly of farm ~roducts.
13
5·
X-3332
Page No.
With the be!linning of this decline, the forces of
reaction and denression began to operate. Goods
were thrown on the market, orders were c~celled,
the buyer's strike developed, unemplo~ent ensued, and comr,>lete industri91 depression followed.
13
Goods began to congest the channels of commerce, and
more and more credit was re~ired to carry these .
goods until they could be marketed.
13
It was necessary, by a high level of discount rates,
to keep these credit re~irements in such a relation to "9rices that bank failures would no~ result ~nd a financial crash increase the inevitable industri9l depression resUlting from declining prices.
13
The commission believes that the policy of lower discount rates and greater liberal1 ty in extending
credits could have been adopted in the latter part
of 1920 and in the early months of 1921, and that
such a policy would have retarded the process of
lir-uid.ation and thus spread the losses incident to
the inevitable decline of prices to a lower level
over a longer -o~riod, and that the adoption of
such a policy at that time would have been advisabl9.
13
About on3-third of the banks at this period were greatly
oVBr-ext9nded.
14
.•
It was the ~osition of the Federal Reserve Board that a
policy of cheap money at this time, coupled with an
invitation to them to further extsnd theroselves,and
the ratio of loans and discounts to capital, might
have resulted in bank failures.
14
'!.'he Federo:tl Reserve Board and Federal Rsserve banks took
the position th~-t they were confronted with a. choice
betwe~n continuing the high discount rates and the
conserro.ent ~ssure upon comr~rcial and agricul tu:ral
industries on the one hand, and a policy of lower
discount rates involving a possible financial crisis
in the midst of an industrial crisis on the other..
14
~""}
6.
X-3332
c
i -
'Page No.
The Federal Reserve banJrs, with th~ approval of the
Federal Reserve Board, took th~ first choice, and
discount rates wer~ continuf'ld unon prattically the
same l~vel as before.
14
It seems probable that a chang"' in the policy of the
Federal R~serve system ·~ith reference to discount
rates IMOuld have accompliShed a reversal in part of
the ~sychological and economic f~ctors ~hich at this
time w~r? moving in tho direction of lo·.JV~r prices,
and at th~ same time woUld have tended to induce on
the part of the bc:nks a. more 11beral attitude toward
furnishing additional credit.
14
The pressure of &count rates and of li"'uidation in the
agricultural sectivns result~d in great hardship, losses
and sacrifice. Tr~se w~r~ not confined, horvever, to
agricu.l tural sections.
14
The pressure was greater upon the ap.-ricul tural sections:
(a) 'Because of the ~,eculiar conditions surrounding
the marketinrr of agricultural crops;
(b) 'Because the croos of 1920 had been ~reduced at
costs p.'r!"ater than those an'~")licabl!" to any other
cro-ps in th"! history of the country.
(c) Because prices of agricultural corrrrodities declined
to a ~eater degree and with greater rapidity than
the prices of other conmodi ties•
14
The liquidation of hank loans and discounts in agricaltural
sections was less than in the industrial sections.
In fact, but little actual lirmida.tion of loans and discounts
had taken -ol3.ce in the ap:ricultural sections of the
country as a whole up to May, 1921.
'I
Certain exceptions noted:~
Linuidation of loans and discounts in the Kansas City
district in the period between March 4, 1920 and April
28, 1921, ~ounted to_13 ~er cent, and was substantially
14
14
'
.
r"'~
-_
- ... - '-~-
j
r-.,"
j:· :.:_;.••,
X-3332
't
Page No.
as great in the ~gricultural sections as in the
industrial sections.
In the Dallas district the loans and di~counts in
agrlcUl tural counhes Nere r8duced b. 33 per cent,
and :in non-?.gricul turql counties 12.6 per cent .
•
In tr•:! ~ninnea:oolis district, the lo?lls and discounts
•vere reduced 4. 61 -oer cent in agricultural counties,
and 12.02 per cent in non--'lgricultural counties.
The above does not mean that there was no llressure for
li~id~tion in agricultural loans as well as
industrial and coinT>ercial loans.
It means rather
that trJ?. 1rices rf"c "iV8d by the f3nner were not
sufficient to lirlQidate the debts he had made in
-oroducin!! tr..e crop Pnd in extendine: his plant and
operations during the more nrosp~rous period which
preceded tr-3 crisis.
14
Lii"!U.idations in b'3llk lo9ns in the agrieul tural counties
in the Kansas City district were materially larger
than in th"! agricul tur~l counties of the other
FP~eral Reserve districts.
14
This enforced linuidation undoubtedly resulted in great
hardships and losses from forced sales of farm
commodities, particularly in the case of cattle.
14, 15
The deflation, hardships, and losses increased in the
Kansas City district particularly, and in other
districts in which the progressive rate was applied
and by the application of progressive rates upon
borrowing in eJtcess of the basic line of the borrowing banks.
15
The -oressure of liquidation may be indicated by a reduction in deposits as w~ll as by a reduction in loans
and discounts.
This -pressure in agricultural sections is exr. fbi ted by the fact that the reduction of
total deposits { Ume and demand) in agricultural
counties was 11.1 per cent as compared with 5.2 per
cent in semi-agricul tur~l counties 3lld 4. 4 per cent
in industrial counties.
15
.f'
~'-
8.
~-3332.
Page No.
In
dem~d
deposits, the reduction was 20.02 per cent
in agricultur9.l counties. 1}.14 per ce:nt in semiagricultural counties, and 10.07 per cent in
industri~l counties.
15
It was contended th:::>t high rates for call money on
the New York stock exch?.ni!e brought a withdrawal
of funds to New York which were sorely needed by
industry and agriculture.
The rates for call money in New York during the period
from January,1920, to June, 1921, were continuously below 10 -oer cent, with the excention of the
period from Janua,ry to March , 1920.
,.
.
15
15
Beginning with November, 1919, and continuously
throughout 1920 snd the first 'half of 1921, the
loans of New York City banks made on the stock
exchflnge for out-of-town correspondents as well
as the balmces of country banl<s with New York
City banks continuously declined.
15 .
The Gold Settlement Fund statistics show the continuous flow of money on ordinary trans~ctions from
the Federal Beserve Bank of New York to other
Federal Beserve banks during this period.
15
The very great derrands for money by industry and agriculture resulted in the withdrawal of funds from
New York, c~using higher interest rates, - instead
of the deromds of the stocY exch2nge resulting in
the withdrawal of funds from the banks serving industry md agriculture.
15
The position of the Feder~l Reserve ~oard and the
Federal Feserve banks during the war neriod and
the cycle of ex~ansion, extravagance, etc. which
followed it, was extremely difficult.
15
Enormous issues of war bonds were floated through them
and their auxiliary organi£ations~
15
! ·- ..- ___ ._,... . J
'""
I
9·
-x... JJ32
Page No.
Their policy was not only int~rwoven with the policy
of the Treasury Dep"lrtrnPI'lt, but subordinated to it.
The decisions which had to bP. rn<:Jde were difficult and
important.
-\
I
15
15
Doubtless in these circumst~c~s mistakes of judgment
were rn3.de which ths cleqrer judgment of retrospect
would chBnge.
15
The commission believ~s that a policy of sharp a.dv3.llCes
in discount retes srould h we be-:m inaug11r<1ted the
first six months of 1919, and cannot excuse the
action of the Feder3.l Reserv~ Board and the Federal
Reserve banks in this 1Jeriod in f>:tiling to take
measures to r8strict the ex~ansion, inflation, speculation, ~d extravagance 11<l1lich characterized the
period.
15
The Federal Reserve System.
16
19
Federal Reserve notes
Res'?rv~
ratios.
20
Disc cunt re.tes
21
Open-rr.arlr<:'t Tr<msac tions
22
Inter-Federal BeservA
~rum~
Transactions
23
Basic tine
24
Progressive Rate
25
Dis,osi tion of E""rnings of
Fed~ral
Reserve Banks
26
i
~
0
·~
_,_ \'
~t:
.-:--,.
/~
,~ '--'··- .._i£
10.
X-3332
\
Page. No.
CH II "Pl'ER II .
The
erations of the Federal Reserve System Related
~ "Econ<l!'ic Perro ds.
neve1opment of the Federal 'Reserve System
t»eriods:
•
!.
NOV8rr:b~r,
1914
- 1\pril, 1917 •
II.
-
III.
August, 1918
- March, 1919.
IV.
lWarch, 1919
- June, 1920.
V.
I.
Anri1, 1917
June, 1920
- Jun.:>, 1921.
ilu~st,
1918.
Nov~rnber, 1914- ~~ril, 1917.
30
Pric~s incr8ased 8normously - 75~
Farm -r,roduc ts from 101 to 181
Food from 105 to 182, etc. ~tc.
~eat ros8 to $2.95 tn M~y, 1917
Exports incr-?aS8d 352~ mostly for "IT~.
~ank loans, state and national, increased 41%
General stoCk of money increased 27.4~
Incr~as~ in nrice caused by
(a) mar demand
{b) Gold bnoorts
Federal Peserve banlr r~tes hi,qher than m!U'ket rates.
II.
31
1\pril, 1917 - A.ugust, 1918.
36
Great increase in -production
Gre3t increase in ~riees
Farm nroducts, - 181 to 230
Control of -r,>roduction and consumption
Food Administration
Fuel 4dministration
'R. R. Mministration
~ar Fingnce Corporation
Capital Issues Committee
~ank loans, state and national increased 11.9~
Federal Reserve bank discounts, etc. increased 171%
Federal 'Reserve aotes increased 238~.
General s toc1~ of money increased 33. 9~
Government eYcess of disbursements 12.3 billions financed
by Treasury.
37, 38
,~,-,
j
11.
Y.-3332
Page No.
III.
August, 1918- March, 1919.
Temporary deflation.
41
~rices declined
Production fell off
Ex~orts fell off slightly
Loans and de~osits of national banks practically
stationary
Federal Reserve notes declined slightly
General stoclr of money declined slightly
Federal Res~rve banks discouraged expansion by direct
action but did not advance discount rates.
I,
IV.
March, 1919 - June, 1920.
Post war inflation.
Great inflation
Great increase in ?rices.
33-1/3~
Great speculative activity.
Gover.nroent restraints removed.
Farm products. 228 to 244
Food products
203 to 287
Loans and discounts, state and national banks
increased 24.7~.
Federal Reserve bank discounts etc. increased 33.4%
Federal Reserve notes increased 24.7~
Exports sustained by loans of 2-1/2 billions to
foreign Governments.
'.
Prices and bank
e~ansion.
l?rice Advance.
'Prewar period
War period
Post war ..,eriod
i'
Banking Expansion
75%
17%
33%
Government's revenues in 1919 overtook expenditures.
This released credit which would have reduced borrowings
frorn Federal Reserve banks if rates had been increased so as to ~revent credit being employed in
speculative industries.
Up till 1919, total expenditures of
Gove~ent for all
purposes from beginning of war was 27.8 billions, of
which 6.9 billions .had been raised by taxation.
43
43
~
;
~
--~-- q_.)
t
1;;..
"\
X-3332
Page No.
No further bond issue could be made without added
inflation or manufacture of credit.
44
Increase of Federal Reserve discount rates just before
Victory loan would h"'ve diminished its succress or·
compelled its failure.
teffin~ell ouoted.
Increased discount rPtes would have necessitated higher
rates in Victory Loan is~e.
Treasury objected.
If rate of Victory ).oan had been th "'t of other taxable
investments or of short term Trea~y certificates, of
~cceptances (4-1/4~) or on commercial borrowings (5-l/2%)
pressure to refund outst~ding bonds on basis of higher
Victory Loan r'3.tes "vould h3Ve increased and possibly
have been irresistible.
Such hi¢h rates in Victory loan would increase interest
rates generally and de'r.lreci <>.te the v~lue of the outstandin~ Govemment bonds M.rrying lower rates.
44
44
Mtt1ht have caused large lir'!'Uidation of securities other than
Government bonds, and de-preci'3.tion of securities held
by sEvings benks, trust cownanies, insurmce corrroanies, etc.
The advantages of increased discount rates to ~revent S"f?eculation and inflation yielded to the apnrehensions of the
Treasury.
Treaswx difficulties should not h9.ve con trolled the
Discount 1?0licy of the Federal Feserve banks.
Had Federal Beserve b~~s in snring of 1919 increased rates
prorr>~tly and "f?rogressively, ~ch of the s~eculation,
exp~sion and inflation of the succeeding 12 months
mimt have been greatly retarded, if not \Vho1ly prevented.
44
44
44
·I
.13
Page No.
Loans and discounts of member and Federal Reserve banks
continued to e~and in s~ite of direct.action and
remonstrance.
44
The Federal Feserve banks, how~Wer, did not increase discount rates until necerriber, 1919, '"hen sli&_!ht increases were made, followed 'by more radical increases
in Janue.ry, 1920 :md others l?.ter in 1920.
45
Meantime the inflation <mC!. s!;)eculation continued and 11rices
went to unheard of l~vels.
Sharp increases 1t 'bednnin12: of this T'leriod 11110uld have:
(a) Served as
('b) Serv~'>d to
forces
era of
.'
warning.
check the economic and psychological
which combined to produce m un-paralleled
expansion, inflation, himn ~rices, etc.
It is altogether '11robable, if it is not wholly certain that
ltad a sound "POlicy been ado-pted st the beg:1nnin2" of this
period, li,uidation would h:::.ve been less preci-pitous,
the decline less abru-pt, 2nd the attendant hardships and
losses upon banks, individu'3.ls, etc. correspondin&rly
diminished.
V.
Jure, 1920 - June, 1921.
Snring of 1920.
Deflation snd
neflatian began
~nd
of 1919.
45
Li~idation.
Exports declined
Consumption fell off
Stream of ,.,roduction flowing frorr famer to consumer backed
up in ch.~els of distribution.
Himher discount rat~s ~d ti~ht reoney onerated as dikes to
keep goods flowin~ in chgnnels of trade.
l'rices fell belo'"' cost of nroduction.
Cost of '11roduction hi12:her in 1920 th8n in any "Precedin~ year.
t?ecei.,ts fran fam -,roducts could not lir-uidate the indebtedness a12:ainst them and -crovide for new 'T)roduction.
~ore credit-needed to finance new nroduction and carry 1920
production until it could 'be rooved.
-suyorst panio at
45
45
45
45
14
~
. _...,.
'_,
X-3332
Supply not
ade~uate
Page No.
to meet demand.
Marked increase of orders.
45
A runaway, sellers market.
46
Suddenly bubble burst
Cancellation of orders
Prices fell ~reci~itately
Causes:( a) Wave of cancelled order·s
(b) Fright ace om"9anyin2" it
(c) Exhaustion of credit nreceding it.
Price decline without ~arallel in 120 years.
46
These conditions forced upward the loans and discounts of
state and national banks and de"9osit and currency
liabilities of Federal Feserve banks.
Figures.
46
During this period, the ~olicy of Federal Reserve rates
lower than r~tes carried by Government securities
passed :=tway.
46
Discount rates during this neriod were more radical in increase than any previously adopted.
47
Especially so as to increase on coll-"'teral notes secured by
Government obligations, which ~~ere increased from 4-3/4 to
5~ in some cases, from 4-J/4 to 5-1/2 in others, and
later to 6~.
These increases were under Q"eneral ~olicy of uniform rates
on all paper of the same maturity rega_rdless of the
co]ateral su~orting it.
t
Claimed to be sound central
~11
banl~;inr-
nractice.
loans for sarre rraturities by Federal Reserve banks,
bein!! indorsed by rrember bari!rs are "!)resumed to be good,
whatever the collateral, comrr·ercial paper or Government
paper, md should take sarr.e discount rate.
_()
X-3332
Page No.
~'
That is to s~:.
l'ifference in rate sh6u.id be based upon maturity and
not on character of collateral.
Sixty-six per cent of borrowings of member banks at
this time were based on· Government t,)aper.
The increase in discount rates thus forced banks to
disl?ose of much of their holdin~s of this kind
of paper.
This released funds invested in war ~aper and made
possible a reduction of member banks borrowings
from Federal Res~rve banks.
This theory is sound and in line with central bankin.£" ,_,ractice.
Its application at this time resulted in hardship upon some
member banks, and was, -perh3ps, needlessly drastic.
..
·
48
Federal Reserve banks, as nreviously stated, to aid Treasury
fingnce, gave a preferential rate in favor of paper
secured by Government bonds.
i.
The effect of above increase:
(a) "Penalized the member b9llk borrO'dng on Government
securities owned by it, for the benefit of its
customers.
(b) "Penalized the banks loanin~ at low rates to custaners on their notes secured by Government bonds.
(c) J'lestroyed advantage of Government bonds as basis of
lo.:ms by member banks from Federal Reserve banks.
(d) Induced linu.idation of these bonds by member banks.
·'!
This tended to depress nrice of Govermnent bonds. Tables.
48 and
l'uring: a ""Oeriod of sharp and short duration, of unusual expansion and contraction, curves representin~? (a) movement of
logns and discounts, (b) mov~ent of deposits, (c) movement of T>rices, would t~d to run narallel.
The chart showing this, - B 'Page 51, - shows nrices falling
While (a) increase, and thus it is apT>arent that the
strain of credit becomes gr~ater and ~reater.
49
49
."""':<,....·,rl
I--
.16
X-3332
Page No.
The noint of greatest stress upon credit would occur at
point at which the curve of loans and discounts and
currency issues, and the curve showing nrices and stocks
of goods were the furthest apart.
49
If this condition continued, the credit structure would break,
with resul tin!! 1?anic a."1d bank failures,
50
That is, as nrices fall and loans and discounts increase, the
margin diminishes.
Debts must ul tim.'3tely be naid out of e-oods.
The higher nrice of ?Oods, relatively, the more easily the
debts can be 'Oaid.
'
'
'
The more debts to be naid, the more difficult to pay under
·
falling nrices.
Assuming a drop in nrices inevitable in 1920, some action of
Federal Reserve ~oard was necessary to bring the debts to
be paid into a closer relation to the nrice of goods.
·'
•
50
51
Position of Federal Feserve ~oard very difficult in •~riod
following armistice.
(a) Duty-of Board and banks to nrovide for essential credits.
(b) Duty to limit credits for non-essential and speculative aredi ts.
(c) Duty to nrevent banks to overextend.
51
Balance between these was extremely delieate.
It is -orobable that the Federal Feserv~ Foard and some of the
Federal Reserve banks, with a view to .,reserving the
int~ity of the banrinq systero, and to .,revent a financial
panic, itr?osed excessive ""lressure in the direction of
reduction, or at le'lst, ;revention of ex·')ansion of loans
and discounts of the member ban1rs.
52
'( • ;\_,.
(~ .'~\ ..('
,·'I';_...._
.17
X-3332
Pae-e No.
~olicy of Federal RPserve Board and Federal
in~ all of this ueriod, and increasin~ly
Reserve banks durduring latter half
of 1920, was one of restriction of credit.
52
, I'
An
l
I
altern~tive ~~lic.y
would have been extension of all credit
desired for any ~urpose.
Would h~ve involved dangers:( a) 1\1ight later h:r.;e resulted in large number of
failures.
(b) Undue r9duction of reserves
(c) Excessiv~ currency issues resultinrr in depreciated
currency.
(d) Loss of confidence in b"'nkin!2" system, runs on banks,
and d"l'lr'ands for r::>d8J'rr'Jtion 0f F~deral !Iesane
52
notes in g-old.
Increased discount rqtes could be effective only against banks
borrowing frorr Federal Bes'::3rve banks.
Tables#
52
Tables show 6941 b:mks (73c1-) were borrowing from Federal
Peserve b«nks md 2467 (27~) not borrowing-, in year 1920. 52, 53.
Federal Reserve Board e.nd Federal F.eserve b~s can not directly
control or su~ervise the .loan ":JOlicy of member banks; can not
require a banlr to make a loan, nor Ylrohibi t it.
53
Nor can they directly control loan ~olicy of 20,000 state
banks and trust corrnanies, not members, re;>resenting 35
or 4o% of bank resources of U. S.
53
Only restraint, restriction of credit against member banks,
throu.f!b:
(a) Fefusinr 1 oans in individual cases.
(b) ~ressure of discount rates an those which
were borrowinq
Restraint was exercised in both (a) and (b).
There were cases where it resulted in hardship on member banks
and on their custorrcers.
The
.
of Federal ~gs~rv~ ba~:-s reflected necessity for
control, restraint and r~striction •
53
~olicy
54
.
·::-'\,-~.0,
)~
18.
X-3332
Page No.
Could not be uniformly applied:
(a) Conditions in districts not uniform;
demands for customers loans in some
districts greater in ~roportion to
bankin.Q; resources than in others.
(b) Condition of ~ember banks not uniform.
(c) Loan ?olicies of member banks influenced
more by individual judgment of local
conditions than by considerations of
general 0olicy affectin? country as
a whole.
l t
Question of loans by Federal Peserve bank different from loan
by a rrell'ber bank.
~mount of a loan to a member bank only arises when member
bank 8.t tem·•)ts to borrow rrore than amount 'iO which it is
fsdrly <:m titled.
54
'While loo>ns and discounts of ba:nJ'"s and Feder?l Peserve banks
increased until October, 1920 9nd currency issues until
Je.n. 1921, the net result of the -,,,riod from June, 1920
to June 1921 was a decline.
54
Loans and discounts, all b:cTh:s, state and ne.tional declined
9. 5't.
Loans and discounts of n?tional banJTs declined 11.8~
Total bills, etc. of Federal Teserve banl!s declined 36.3~
Federal :Reserve notes in circuletion declinecl. 18.5%
..
,I
55
General stock of money incr~ased 3.4%
From June, 1920 to June, 1921
Prices decreased 44.9%
Loans and discounts decreased 18~
Fam ':"roducts decr'3a.sed 53.9'1b
55
Federal Reserve bank reserv~s increased from 43.6 to 60.8~
caused
(a) Li,...uidation of member bank" borrowings
(b) Net importations of gold
55
Pro~essive
rates ex~lained
(See also '!?· 25)
55
I/ . i'-- -.,4
X-3332
19.
Page No.
In districts where pro¥ressive rate applied, and in some
others, the resources of the Federal Reserve banks were
l~gely absorbed by a relatively small number of banks.
This absorption reduced ~bili ty to lend to other member banks.
t
56
56
r
»rogressive roates by ""1enali·zin~? banlrs which were borrowin~
excessively, tended to reduce their borrowin~s, making
a lar.:rer amount of funds available for banks borrowing
moder~tely or not at all.
Commission able only to obtain data as to nrogressive rates
in Kansas City District.
.I
.
t
56
Com:ylaints against ·,rogressive rates.
1. B.esul ted in e:":orbitant rates on member bank loans.
2. Excessive ....,ressure on member ba.nlrs to reduce borrowings from Federal 'Feserve banks •
3. Excessive rates on borrowin~s of some banks and conse~ent h~rdshi'p •
(
Kansas City District fairly tY?ical.
56
Chart C, .,, 57, shows:
Jan •. 1920. 14 Kmsas City banks h9.d absorbed 34~ of normal
lending ..,ower of the Federal Reserve bank, and 9 Omaha
banks 23. 5~.
Total 57<t..
·
56
A?ril 1920. The 14 Kansas City banks had absorbed 50~ and
the 9 Orr.a:h.a b-9.nks 23-'16.
Totd 73~.
56
This left only 27~ of norreal lending ..,ower for the 1063 other
member b 3lllrs.
In
~eriod
frorr April, 1920, to necet:.'ber 31, 1920:
Bari!.rs not ···reviously borrowinF' re.d absorbed 12~..
57
BorrO"nine: b::n'k's increased from 178 (16.8 of all banks)
to 416 (38.3~ of all banks).
'Borrowin!Z banks total borrowin~s from Federal Feserve bank
increased from 106.8 millions to 117.3 millions or 9%.
Borrowings of the 14 Kansas City banks fell off from 50%
to 361-, md the 9 Omaha ba.rik"s fell off from 23~ to 13%~
57
~-,~
,~ ~\{t . !.~
.20
X-3332
?age No.
Progressive ra.tes compelled reduction in proportion of
lending -:1ower absorbed by 14 Kansas City and 9 Omaha banks.
58
) f
•
k
Also ?errnitted use of lendin&r ~ower to meet requirements of
other banks ·7'reviously borrowing moderstely or not at all.
Ch2.rt II, ·~·. 59 ahows c'listribution of credit based on loaning
power of Federal Reserve banlr including rediscounts from
other Federal Reserve b~s which were not included in
Chart C, p. 57.
n
58
Chart
shows similar decline in absorption by the 14 Kansas
City banks and 9 Omaha banks (pro&rressive rate banks).
i '
'
t
i
58
Shows also that all other b3.nks "1')aying .,,ro~essive rates, exclusive of those in Kansas City and Omaha, - continued
to increase their borrowinftS until December, 1920, during
period of sh?,rpest decline of the borrowings of the Kansas
City and Omaha member banks.
58
Shows also:
That banks borrowin£" within their basic line increased
until August, 1920, when they absorbed 31'1& of total
lendin~ ~ower of Federal Reserve barik.
58
From Au~st, 1920, to December, 1920, they declined to 17~. 58
Chart also shows that effect of nronessive rate was to reduce
borrowings of city banks and to pe~it an increase in
borrowings of country b~s.
58
':':'h2.t actually happened, as the ch:.u-t s:b ows, was that the borrowings
of the Kansas City and Omaha banlrs were transferred to
country banks, thus increasin~ their nroportion of borrowings
subject to ~ro~ressive rates and decreasing that of the
Kmsas City and Omaha banlrs subject to proe:ressive rates.
58
Table, p. 60, shows gain in rates ·Jaid on "9rogressive plan over
what they would have been under a uniform ~ rate.
59
21
22f$
X-3a32
Average rG.te pcrld.
.
.
Average rate
6.61~
pc.o.i~
o:r ba.n1m
.
borJ.~o.nr~ c.t 1iro.~ressive ra.tes, 6. 7~ ·
by .::.1.1 belollks d.t
no~
.
, 6Z
..m.d. pro:.:.resaive rate~ 1
62.
Total interest ~ca.ii by ..J.l o.::...ks i i l Z...Us.:.a Oit,t .1as $3.d59V!. 78 less
t.oc.n if 7;:0 rdote ~ oaa..1 i.t. atfact..
·
Cild.rt · al.so sJ10Ws:
If ell ~ in district ~ oorrO\Ied votc:J. omount of Od.Sie
lines, tAe lic.~tbili ties. ot tile Fed.er'-ll R-lserve Oa.nlt wouli .ao.ve
oeen extended by 30 ~llions ·of aoll..:;XS.
62 ·
Inte~st CJ.larps made by member blj\llks pa.yi~· pro~ressive rates were
.~ ci.S · t.co8e pay.i.ngr.nQl'lllcll r-c:~.tes or tLl.Ose w~cb. lW4 not
rediscounted c:~.t call :.vi tll J'ederal. Reserve Oonks.
;.
62
Govemor Miller testified tD.c:~.t totdl. c:.mount of 1ntar.3st in excess of
l~ refunded to country o&iuts Wd.S less t41an $300.
'
6ca
62
Interest ctlcU'ged by member OCIJlks subse-tusn~ to a.ppliec..tion of
progressive rotes· 718re no tdgll8r .t4a,n r ...tes c~rged bet ore.
;
..
\Ybatever may be S~d .:::.8 to effect of progNSSiVe rca.tes on t.ae
avarage •. both aa to vOJil)elline liquic,ia.tion ond. c:~.verage ra.te. of
interest, the fd.Ct still rama,ins th&.t:
·
•
(a.) Its applica.tion in mc:.ny ~stances Te.~.t~d. ~ -uno~s~ionable
rates upon tne borrowings, or .soma portion the~ot • ot
.
banks. borrowing in excess of tileir Oc..sic Une.
62
(b) I·ts "PPlioation serve;i to exert pressure for liquidAtion
upon tbese CWlks cand coamuni t~s >'lUre tm ne~ were
grect.test, tlla.t is, to pelldl.ize t&4e oa.nks tD=aldng tJla gJ"eatest
atforts to serve ~eir cus tomars.
62 ..
The application of such ~ uniform and. ~bi tra.:ry rule to cill oa.nks *** :.
witJlout regc:11.~ to pecUliar cil:C'DStances *** c..n not be justifi.e4;
from stancipoint qf sound banking, nor from standpoint of the.
consideration 1;o w.uich the public is entitled. from banks '!'**
exercising public functions ****• :
62
X-3332
.·
226
22,
Pca.ge No.
Tne. infirmity of tne progressive ~ate is its substitution of fixed,
arbi trory rule fOr to.e exerciat lf S1fll>c...t.r.l1Jtic discretion in
JIWd.ng
.
1~.
Detl~tion WQ.S mor.> rc..pt.l. in Lnsc:~.S Cits
co~Qbl~ &6riculturol ~stricts.
03
District than ill otAJr fcdrly
Belc1.ti Vg \NgN.l ot ~flQtion o£ locms alll1
COJJ4PcU"ed "Ti tA oi ty Od.nka.
6?
disooWJ.~s
in country ,.
68
68
68
Progr.lssiv~
·l';;
ra.t3 WQS in '3ffJct in Atlontd.. st. Louis,
and Dallas
.
Not in -lffact in 'O'u.ica.go dlld Minn~apolis
lima~
City
Eltdminct.tion of ta.blae S4l0,.:l. AJDount and.
rat~
of d<Jflotion was not cemtrollgd. by
rates.
·
Rc..t.J of <Wfl~tion ·.Y<;WS\ ~ in l(WlsGS district
,(progr.Jssiv..l rei>~) and. 30.~ in J(inn.l~po~
(non progr~ss1ve ~t-l).
T.ns non-progr3saivJ rct.tlii bcmks ot Mca.go d~Jor~QEJ3d 30.-',
wnil.) DtUlu (Progr~ssi.vo rate) 'deor.lasod 1~ Ql'ld
Atlcan\Q (progressive) ?acr-losold 36:'
68
The reduction in lo~ c:md discounts ill country bQnks
was relca.tiv .,ly l~ss tLWl in ci ti. Oc:t.llks.
68
progr~ssiv~
a..
O~t
'18
Borrowings of !Dr3mb:ar bc.nks in MinnJ~polis aistrlct ;r~N in
simild.r axcess except in J&;..rc.tl ani April,. 1921.
F, pa.g3 79 sAows:
Borrowings of m.maber ba.nks in., Atlanta .and. Biohmond. waro in
excess of total bd.sio lin.ls during eDiire p!riod from
JUna 1920 to July 1921 .. :.
'78
33.
Pago
CHAPTER
l i I.
Cbd.pte:r II !•
Policy of Treasury in rJlation to F~dJral R;}scrv:J policy..
It is
aSS1.lm3d tbat war roqtiir·~mJnts could not b:J imnediataly
provided out of incrJas3d production or d:Jcrgas~d
consumption.
Som..J POI"tion of cost of .;a.r uru.st .ba.Ve
incr~as~ of o~ cr..Jdits.
Principc:W. q,ucstion mas ra.t-3 of
b:Jci.r.
~vo
policiJs possible:•
l. To sall bonds ~t
.tliglurata
2.
oo~n
int~ra~t
~rk3t
80
furnisn3d taough
GovJrnmant oonds s.o.ould
rate or at a r3lativJly
80
a: at a
r.;~lativ;:;ly
80
low rate.
f~voring
80
80
To sell bonds below lilcU'bt rd.t3
Consid3rations
227
No.
1. ·
(a) High rate ·,vould ancoura.gu sa,ving..
(b) Would r~sult in transfJr of ~xisting capital from
non-Jssentic&.l and low rat~ illV-.}stmonts to
Govt. bonds.
(c) Would absorb free ca.pi tal, discour.s.gu non;oessc3ntial
production.
(d) Would. limit 3xpa.nsion d.Ud inflation
(;,) ryould r~duc~ consumption
(f) All of a.bov J ,wouli rJtct.rd ris,; of pricGs,
(g) Lov·:;;;r pric,;s •vouli r;::ducc amount of mon;.;y n.Jodl3d by
Gov .;rnm.Jn t.
(h) T.aJ .aigu.3r rd.ta 'vould .!JaVJ t.:md.ad to maintain tha
price of ·Gov·.;rnm:mt oond.s ~t pct.r.
· ·
80
Consid.;;r...tions favoring 2..
(a.) Tr)a.sury s.aoulli
s~cuN
funds a.t lovrost possibl.; rc..to
Sound. only if sc:iiD.; Qlllount of moruy rJq_uirJd to
finca.L1C·J war· d.t .aig.:l a.s at low ra.tl.l of int.;r"'st..
81
81
228
Consid.;)rd.tions fd.voring 2 (Continu.ld)
(b) Al:.Y policy should avoid too suddon changas in rd.tes
which· would ca.us.;) rapid cbang~s in gonJral.
intJrust ra.t.Js. witil r.lsulting dislooa.tiqn and
.;)JDba.rra.sSJn.)nt to industry.
11
Commission is of o.pinion:
Advanta.a.1 of low ra.t~Js morJ ~ilan offs,Jt by tl:w
it Cci.US;.)d cand tA:J d.tt.mdcmt high pri~s.
81
Low
inflc~.tion
ra.t~
policy it;.cr.;d.S.Jd totql .;.xp.mditur..l for int.JNSt
and pli.noipW. oi d,.,Jbt.
Inv~stors, ~uying fr~p~triotic motiv~s suff~rad:
(d.) From low rd.t.>s cllld. cons~qn.>nt ®p:r.lcia.tion of
Jlb.rltat volu~ of t.l.) bonds.
(b) W~l.J country sufiJr;d from iuorJas;.)d cost .. of war
·· Aivantagll or disad.vcmtaga of t.1.: 2 policies is l'OOaBU.rod
by infle~otion nJcJssa.rUy following Ji t.a.;r.,
Tha
intle~otion
un.iJr tJU low rC~ot.; policy was
grJa.t.)r t.Gcm uni..sr ~gA rat.> policy.,
Mat.aod of infli:i.tion or
....
banks.
l'llC&nu.fC~>Ctur.l
~a.sur;.)a,bly
81
of or.Jdi t oy J't)d.Jrc..l R.>'S-.rV>J
(d.) B'u7Jrs w.;r.l ;ncou.ra.g.>d to borro·; l1lQnoy witJ:~. ·NG!.oh to
purohoa3 Liblrty bonds G.t sam.; ra.tJ a.s ~t paid on
th.J oond.s, .i~osi t~ng t.a.s bonds as oolla.t>~rW..
8l
(b) This incrlla.s.>d loana c,nj, discounts of t.n.> l~ng b~
and a.lso d~osi ts to cr.ldi t of Gov ;;1'll'4.>nt.
The Govo.rnmmt l.Jft t~) tunis 'Vi t4 1;4.; banks for SCIDG
wu.))ts c.t 2~ int.lNSt .a.nJ. ·no r..:ssrvJ wa.s r.lQ.Uir.Jd.
1'ho3
~ ~ d. profit on.i tD.J · incr .>a.s3 of th>Jir
doposits s•v,J 141'6.Jr sums for s~rt t~ loans
to tA.Jir oustouwrs, this t Jnding to ecms.J infl.:...tion.
'
(c) Wben t.o.; Gov.;~nt Celoll.sd for tJlJS.; funds txl.J oo.nks·
would obtc.in odvcmc~s from F.>doral R>Js.Jrv.. bonks
on t~.>ir not.>s w1 til tA.~ bonds a.s colla.t~rdl, or ::tlloy
would r.~discount tn>J not;;s· of t-.>ir customJrs, so
~~
(d) Tl13 proce.Jd.s of .lV.lry $5 would "PP.ld.r on F.ld:Jral B.>S;)l"V3
ban)t books ciS about $2 in de})osi ts and $3 in Fecleral
B3sarv~ not~s
·
81
'
82
82
~·
.as
•
· X-3332
paga No.
on
til.3 d.3posits tjms craa.t.Jd fu~ur.;) lOdn .JXj;onsion by
t~· m.;)JllOJr bo:Wka ·doul>1 ca.risa.
82
(a) According t.o p;,rsons, Q. duposi t in F.ld..;)rol. R.3S S1"V3
Bc:t.nk of $100,000 will ~upport 1 .. 1 or 1. (j millions of ·
lodllS by m.mfu.3r bcl.nks, .11 or 1~ to oa.;, ~ll will .P..trmi t
em Jqu.:.l i:.1Cr..so.S3 i:1 F.td.::rol R~s.trv .J not.)s .::.ni d.3poSi ts
of lJl.)mb.3r bonks comoin3d.
82
(f) Ti:w Qovlrma.;;nt, on m.t~'llrQ.;;u~·: tA:;sa fun..is; us1ldlly ~d
~ to J..m3riccan produc3rs of wo.r mc:..t.;ric:J., · ·.li t~r
llractly or t.:;.ro~ lo.:.ns to alliu.i Gov.:.mmants. .
. (g) TA.JS3 funis ~rOill)tly ~ OOOL to tAa b..a.nks ~ C01&1&13rcial
d..Jposits.
(A) TLis incr.:.as·Jd. t~ G.Ss ...ts ~~ li-bili 'G5•..ts of t.J.O Fodor~
R3s.Jrva bi.nlrs ~i lllJtlb.;r ·~.
T~is
proc3duro
witb~~
fore~
lOa& to
F:;ciJrQl
RJs~rV3
bQnks to
axt~i
cr3dit
~u~ ~3mbar ~.
82
Or 3Ve& to f':.mis.d ..;. proti t to t:w wmror oanks in tho
first instQJlc-3 by llscount ra.t3s lCI'W;)r ~A:.n ra.to
borM by vA3 bonds.
83
b.s th.l succusstul sdl.J of Libarty bor.ds cl.t low int3Nst
rQ.t3s wQ.S n.303Ss~ly prad.ictl)i on 10\v J.iscount rotss
by t.c..J F<3dural. R.3s :Jrvs ~.
83
Tms low rot~ policy \/eo.S contra.ri to tAO policy of tile
graot fi..lb.l'i.Cic:J. countri3s of L~ morld prior to the
W'Ql" QZ• .,. in SOill!.# Co83S during tb:i Wor.
.
,
83
cartifica.tes wer3 .J.so issued. in a.nticipa.tion of lOon c.nd
t~ Pcl.~3nts.
}.(ora iuportant in cr:J&tion of eonk cr.:sdi t can:i. expansion of loans
cmd discounts tc..an Libsrty oonis. or Victory notes.
83
R3Q.Son ·va.a:Primct.ry own..srs..dp lco.rgsly r:::mc:dn.Jd w1 tJl i..l~ bollkS.
Difficult or iupossibls to s-311 ~..wm on ~ invastm3nt boaia
T~s ~3 nJc~sswry disposcJ. of t.c.J oor~ i.O
wm.c~ ..vould malt.;)
JlQU.U3 tll.,)m.
basis
it profi tabl3 for
w
t~
oa.nks on a.
bc..nks to
8.3
229
230
X-3332
T.tw bonks roc.li vv<l d. l~g~ raturn from till3 purcha.sa of
cartificotas ~ th.l r~t~ borne by tho C3rtificatea.
Tll3
bonks 66.V3 croJ.i t to GoV3rnrJl.Jnt for tAeir subscriptions:
This incr~C~.Svd .lq~lly its d:Jposits ond lo.ns.
WAil~ tA..: Oc;.rka p.:..id 2fo on t4..1sJ deposits; tAcy D4.Jd ~ep no
r.3s3l"V3 cand t~y oft~ ii:Jr<J not dra..vn out oy th.1 Gov.>rnm~nt for. c::. consiJ..:Jr.o.bla tim.J.
\'lillln
o-ll~J.
for, t4<J bonks coulJ. oorrow from Fad.Jrc:sl
bonk o.t ca. ro.t.:> no .'lig~r or. .:JV::n low3r t.:an tha
cartificot3 rat~.
In t4s
R~san;a
83
~a.y a. proportion of t.ac cr..:dit 13x.pansion inpliad in
abking thasa loans
WQS
transfarrud to
tn~
Federal Raserve
bank.
83
t.a.J duposi ts tt..us cr-..e~ot.::d in t ~v F.Jd.:src..l R.Jservu bonks W:Jra
drd.\m upon by JD.:jmCNr bQ!lka for vo.ul t · caAl ani till mon.ly,
pa.rt of t4ls.J J..sposi ts wor.J conv .~rt.:Jd into F.:Jd.Jrol ~:>s3rva
notos.
W.c..JD. ti:oo ~s ·:~Jr.J po.ii by. t£U Gov.:~.mt to CW'lU.fd.Ctur.Js, .3tc.
t43y proq>tly returnod C~oS inllvi.iUc:tl. d3posi ts.
Against t.:ws..: :duposits tAl ba.nks hal to k..Jp rJs~rves,
incr~ing tA.l loQnS on~ .i.lpoaits l~cbiliti.:>s.
ori
84
t~r.Jb;r
sa.b of t!n long tim.:l GOV.Jmm.lnt oonis, tuJ c.Jrtifica.tJs
issu.Jd. in anticipotion ·v:lr:: r ... tirOO..
tb~ bon::LS :14r.J purcnos.Jd by inY.Jstors woo d.id not ·
to Oorro.v, t;u..; infl..:..tion :'lei.S r .Jduc ..d, baca.us.:: tAu
r ...d..:~tion oi ttl.. CJrtiiieo.t ..s r-duc.:d t~.J ~ invvstm...nts
~ t~ oQDks.couli r ... ducJ·t~Jir i.lot to ttl.J F.~d..:ral R.:svrv;
b~ ~thus pr.:pQr... ·for ~t~.~r p.:riod. o~ auort ti~
Gov .:r,nmJnt ....ccOIDllO.la.tion..
Ir-. so fa.r
CloS
Jl.:;.V ..
84
. cgartry;B IV.
F3dt)rd.l R.;s,:,rv.l policy in
19~0.
85
2·31
.27
l>age No.
In Se'Qt. 192n, decltne of :9rices well under way.
Q.cn~ral ind~ f~ll
Agric. -oroducts
frOJrl 272 to 242 ·
"
" 2411. to 210
Lower discount rlites demmded to check this decline
Claitr:~d
fall in -;rices duq to billh discount rate l)Olicy of
Fedent ~es~rve buD:s.
-
Lower discount rates were aSked in order to arrest process of lir'U.ida.tion.
No change in ";)Olicy wa.s made.
...
85
Factors in rate mal-"inq:( a.) Oondi tim: of lending banlrs
(b) Peser\rg ratio of FEideral Beserve banks
(c) l)ossil)il:i ty of .:old wi t~drawa.ls
(d) G9n9rel ccndition of business
Causes ·of decline in . ..,rices, es'?,eci~:>,lly of. agricultural products: .
(a) Falling off in 9X'DOrts.
85
(b)
"
" s-necul-:tiv<:l den"md.
86
(c) Reduction in domestic eonsunrotion in latter ~art
of 1920 and firS't half of 1921.
86
(d) l)sycboloncal. attitude of tbe ~eople.
!"86
In 1919 ~~~t compldnt a~a.inst him cost of livin«.
Senate Fesolution, l4ay 17, 1920.·
Aslred. Boud s t9'9s it -,roposed. to tue to meet
etistin~ inflation of currgncy and credit and
the eonset~Uent high ..,rices.
News~a'9er ~rop~anda,
86
86
cO\l'!)led with e1t'Dansion of
credit ••• tev~rs~d the ~sycholo@ieal attitude
which h3d contributed to infl11tion of prices and
ba:nlr credit.
· 86
The drop in -orices, h'3rald9d as beginning of den~
~ tion introduc'3d '9SYchology of f-.,ar into bank3rs
minds.
• 28
X-3332
Made th'ml
str~in,
i~or~ bankin~;t maxim that in times of credit
money should be lent freely though ;at a high
86
Merchants were forced to sell stoCks to li~uidate loans.
Buyers bought only froll' day to day.
Orders were cancelled.
C:onsumers bought only for itmJediate essential needs.
86
t>roduction slowed down.
Une~loyment incr~ased.
chan@e in Frederal Feserve ~olicy would probably have
reversed in nqrt the ~sychological and economic
factors t3ndinp· to lower ,..,rices.
mould
in
h~ve
86
t,qnded to 1'Jroduce a IPOre liberal attitude
to furnishin~ additional credit.
b~ks 3S
Such a ch?ng/!3 of -r>olicy '"rould necessarily mean an
extension of lo"l.ns.
Desirability of such a ch",nge in nolicy must depend
on su~ly of funds ~V"l.il~ble.
Banks can l~nd fre~ly only when their condition will
admit without end~~ering interests of depositors
and stockholders.
86
What was the condition of the banks in last "Cart of 1920:
87
Varied widely
One-third
}
'~'tere
greatly extended
One-third moderately
ext~ded
87
One-third loaning within very conservative limits.
This condition shown by numbers borrowing from
Federal t?eserve banks:
One-t'hird borrowing very heavily
One-third borro,ning moderately
One-third borrowing not at all.
87
Those not 'borrowin@" at all could meet their re®ireroents by
borrowing frorr Federal B~Mrve banl~s.
l
Page N'o.
rate.
Made them exert "'ressure for lio.u.idation.
~
"-t..
i
:"""\ ...., f""'
(·
"~,f-,J
r " - <~
,:·
29
X-3)32
Page
1~0.
Those borrowing moderately could borro>l more.
Those borrowing immoderately could not extend further credit
without danger of their solvency.
Where a bank is in latter si tuation1 where additional loans
dangerously decrease ratio of capital to loans and
discounts . . or to deposits, the remedy is to increase its
capital and not increase its borrowings from the Federal
Reserve banks.
87
Bar;king capital has not kept pace with deposits during, the
period of deflation.
From June 30~ 1913 to June 30, 1920:National banks
Deposits increased 109%
Capital and surplus increased 22%
Ratio of capital to deposits:
1913. 1 to 5.45
1920. 1 to 10. 89.
Margin of safety had thus decreased
87
5o%.
Ratio of capital to loans and discounts:-
1913.
1920.
1 to 5.84.
1 to 9·95·
87
If capital had maintained sam!;} ratio as deposits~ 16.8 biJlj.ons
of additional loans could have been made by member banks.
This possible expansion is wholly theoretical . . as i t would be
limited by reserve requirements which would greatly
reduce its aggregate.
It is clear that in many cases 1 inadequacy of capital and not
insufficienty of Federal .Reserve bank credit was a factor
which limited and restricted credit during this crisis.
87
87
..,_
.·~,~,1
,
0'""'·,1!f
~~~~.·~:_,_,t-::C
30.
X-3332
Page No.
F~d':lral
P?s8rV:? "Roerd qnd Fed<?r'll :8esgrve banks bound to
considar 3ff:?ct of a 'Tora liberal uolicy.
'fust r3sult in mor:?la<:Jns.
~.s b3.nl\:"S 1om in period of
falling nrices the strs.in upon crsdi t becomes more and
more nronounced.
,.
88
Danger of bank' failures increases.
F8deral :Reso.rv8 Bo<>.rd '-'nd F~deral P~serve b3.r.ks f3l t
this danger of b~k fqilures was a real menace. which
would h3.ve b'?"n gre9.tly increased by a. discount policy
suffici3ntly lil:leral to grr%t the -orocess of liquidation.
83
The Commission, how<>-ver, believes that notwithstanding this
danger, a mora liberal nolicy could h~ve been adopted in
the latter part of 1920 and the es.rly ?art of 1921, and
that it would have served to arrest in nart the tide of
deflation and reduce the hsrdships and iosses incident
thereto.
88
'i
111hat<?ver rr'iy be said of the nolicy adopted from the standpoint of wisdom and nec8ssity, in the light of the
psychologic<l.l ?.nd economic factors necessary to be
consideredL it is evident th~t the apnlication of the
policy in -.he rur:::l sections resulted- in great hardship and distress 3nd contributed to some results
economically und~sirable.
88
Tnis hardshi~ was due, in large measure:(a) To e'cessive cost of nroducing the 1920 crop
(b) To the slow~r turnov<?r incident to farrnin§! operations.
?r~ssur8 for li,.,uidation corr•pelled in TPany cases the sale of
imme.ture cs.ttle and ce.lves which se~ms likely to result
in a shortage of mee.t supuly during the coming season
of production.
The pressur8 for lil'luidation forced sales while a wiser and
more discriminatinR" -9olicy would hs.ve su;z?ested carryin>;; the borrower until less dis3strous sales could be
made.
Farm3rs difficulties were increas3d:Prices of what he sold dqclin3d faster than Drices of
wh:tt he had to buy.
88
88
59
,
0.f""'f· ._,.,
,-:.:···~·ar_J
31~
Page No.
Had the change in pol:i.cy .. i f carried out., arrested the decline
prices cf what he hac; to buy, without arresting the decline of
prices of what he had to eell., his condition ;,;ould have been
worse than whcot it -.vas.89
in
Federal Reserve banks ratio of reserves in May 1920 had
fallen to 42, 7%.
Omitting, inter-Federal Reserve baLk :rediscounts~ the ratio of
reserves in many of the southern and ¥1estern Fede:·al Reserve
districts was far belo~, 40%.
89
In Atlanta, ivlinneap ol is; Kansas Ch;- e:nd Dallas., the reserve ratio ..
unadjusted, fell below 2rtJ,, at ti1nes during last half of 19'.::.0.
89
7 of the Federal Reserve banks were
borrowing frow the other 5.
At one time during 1920,
39
The Federal Reserve Board could have s<Aspended the reserve
re_quirements, but would ~ave created an anomalous condition:The purpose of the suspension would be to enable member
banks to increase loans.
The banks, howe.ver .. would have to pay a tax on the reserve
deficiency.
39
The purpose of the tax, to be added to the discount rate,
is to cause a re1:.1.ct:ion in bo~rowi;._:s fr0-<1 FederaJ.
Reserve banks, so as to bring up the reserve ratio to
required amount of 4o%.
90
To have suspended reserve requirements in latter half of 15?0
would be to encourage larger borrowinbs from the Federal
Reserve banks, on the one hand, and to discourage them on
the other, by increase in the discount rate.
90
Studies made by
Co~~ission:
Was expar.sion in bank loans during. the 4 or 5 years
ended with June 1920 more or less rapid in
rural districts than in financial and ~ndustrial
centers?
91
Examined into by Dr. David Friday.
1.
Sl to 101
.r"'>·
,,
X-3332
32.
Page No.
The tables prepared by Dr. Friday show:The expansion in agricultura~ states during the period of
inflation was at least as great, if not greater,
than in the industrial states.
101
,.
Another study in cooperation ~~~i th the Federal Reserve Board and
Federal Reserve Bank of Nevi York:
Between May 4 1 1920 and April 28 1 1921.
{a) Loans and discovr~ts.
Banks in a~;ricul t...1.ral counties
If
fl
n
semi" non
n
"
"
"
declin~d.
1.2%
"
1.3%
5.6%
II
(b) Borrowin 6 s from Federal Reserve banks.
Banks in agricultural counties increased
Banks in semi " counties remained stationary
II
n
declilted,
" non II
56.6%
Pressure of liquidation is also shown by reduction of deposits
in above study.
A6ricultural counties decreased
Semi
"
n
u
11
Non
"
"
11.1%
5.2%
4.4%
115
This reduction is emphasized as to agricultural counties by
fact that time deposits increased except in il1ir.n. and
Kansas City districts.
115
Increase was over 594 millions or 1 Cftb
llb
Demand deposits
Agricultural counties decreased
Semi
"
"
n
II
ff
Non
"
20.02%
13.14%
10.07%
116
In agricultural counties, demand deposits decreased 468 millions
;,rhile loans and discounts d~creased only 3G. 5 millions~
117
Means that farmers being unable to sell their products for
enough to liquidate their loans, or to sell ·chem at all in
many cases 1 drew down their deposits to pay their debts to
merchants., factors, etc. who in turn paid the ivholesalers
or manufacturers., who in turn1 liquidated their bank loru1s. 117
~.
c
·~·~t_)
f(-,
,,
Jj.
X-3332
This process, added to the liquidation in industrial sections,
resulted in a total reduction of bank loans of 327 millions
and a reduction of total deposits of S65.7 millions.
117
Conclusion of co:n.a;ission from above studies:1.
2.
EA.pansion of bank loc:ms in rural districJ~s durine;
inflation !Jeriod endins June 1920, ·;,as relatively
greater than in industrial sections.
117
The action of the Board and Federal .Reserve banks during
the 15 mcnths rrecedint; April 23, 1921, did not
produce a greater curtailment of bank loans in
rural districts than in the financial and industrial
sectio:r.s.
117
3.
4.
'
Credit ·;.ras not absorbed cy tbe f inancie.l centers at the
expense of rural communities for the purpose of
speculative activities.
The pressure of liquidation and depression in the
agricultural sections ·:;as reflected in a reduction
of deposits, ·;:hich ·;;as relatively larger in
agricultural and serni-agrj.cultural counties than
in the industrizl centers.
117
These conclusions are supported by an ana1y sis of 'J orrovlinc,s of
ztember banks from Federal rieserve banks, JivLin;;_ the
Federal Reserve districts into:1.
Industrial section.
Federal Reserve banks of 3oston, New York,
Philadelphia and Cleveland.
2.
Cotton section
Feder.al Reserve banks of Richmond, Atlanta,
and Dallas.
3. A2ricultural and live stock
s~ction.
Federal Reserve banks of Chicago, St. Louis,
Minneapolis, Kansas City and San Francisco.
I'
Table 35.
Total amount of all paper held by Federal Reserve banks
during period fro:n January, J.920, to May 31, 1921,
divided into 3 sections, - industrial, a~ricultural
and live stock, and cotton.
118
118
-'""•«. ~M-/
·~
.
34.
X-3332
Page No.
Comparison with peak, - October 1 1920, and May 31, 1921.
1..
Total paper 1 all districts.
Industrial fell off from 109 to 60.3
'
.
:
42.7
.Agricultural and live stock fell fro,n 109.4 to 82
= 27.4
112.6 to 92.5= 20.1
Cotto:.1 section fell from
Agricultural paper 1 all districts.
From January 1920 to
l'~ay,
19'21. .Rose from 27.1 to 178.1
In a6ricultural section rose from 66.6 to 259.8
In agricultural and live stock section
rose from 34.1 to 184.6
In cotton section
«
"
8 to 158.2
3.
119
Live stock paper
Industrial section. Rose from 10.4 on Jan. 30, 1920
to 303.S in August 1 1920.
August 20, 1920 to May 31, 1921 1 fell to 43.8
Not sufficient in volume to be indicative.
120
Cotton section.
Rose from 32.5 in Jan. 1920 to 161.2 in April 1921.
Fell to 1b9.2 in May, 1921.
A6ricultural section.
Rose from 44.3 in Jan. 1920 to 136.5 in Oct. 1920, and
then fell to 84.4 in May 1921.
120
All districts combined.
Rose from 42.3 in Jan. 1920 to 136.9 in Oct. 1920 and
then fell to 96.2 in May 1921.
I'
120
This table indicates:
(a) Tne
i~crease in discounts of agricultural and live
stock paper was relatively greater than that of
all other paper.
(b) The liquidation of discounts of agricultural and
live stock paper 11as relatively less than the
liquidation of all o~her discounts.
120
?~'l
J',,• ..._ • .....__.
....
I
X-3332
Federal Reserve -oolj.cy as indicated by e. comparison of interest
rates on U. S. ce:-tificates 1 bank acceptances 1 commercial
paper, and discount rates.
121
New York is the money center of the U.S.
Transactions in U.S, certificates. acceptances (domestic and
foreign) 1 bankers acceptances: and com:uercial paper., center
in Nevi York.
The discount rates of Federal Reserve Bank of New York 1 the ref ore 1
il:d..:".cc..·~e t:L1~ g,enex·al r·ola·~ion bet,;etln ir.,;e:cest rates and
discount rates.
121
Chart K. p ~ 122
Sho·:vs relation between Federal Reserve Bank of Ne·•· York.
Discount rates and the market rate for U.S. certificates 1
bankers acceptances and commercial paper.
From Jan. to April 1520.
Federal Reserve bank rate lower than rr.arket rate for
all above eAcept U.S. certificates.
Since Jan. 1921.
Federal iieserve bank discount rate hi£.b!2.r than U.S.
certificates and bankers acceptances but ~JD:
than market rate for. ccm:::ercial paper.
r\elation betv-1een Federal Heserve bank rates and market rates is
irr.portant for reason that when Federal Reserve bank rate
is higher than market rates, banks would derive profits
frorr. paying off their indebtedness to the Federal Reserve bank.
,.
Chart L. p. 123
Relation between rates of issue of U.S. Treasury certificates
and rate o:f Federal !1.eserve 3ank of New York on advances on
such certificates.
Chart ~. and table 36 p. 124
Comparison between Federal Reserve oank of Nev; York.
Discount rates on J..;. to S mm:ths corc:oerc~s'. paJ:er) with t:1e
market rate.
121
~2l
'
~.
,-.,
~
r
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X-3332
"Page No.
,.Jntil ~-Jr:.l, 1917, 3!1'~~:--::::~c i:ltO ,.~::.', t,.,~? Fe&era1 nes~rve
bmk discount rate on comnoercia1 paper was hi><:her than
the mar~et r~te.
Aft~r
trt?ril, 1917, was always lower.
125
Charts N and 0.
Belqtion bt?twe"'n rnn1rrum discount rate of "Bank of Engl.:Jnd 3Ild th0 rr:'Cr1_'"Jt rat?s on 90 day bills.
125
Chart K.
Shows th":Jt F-?ders1 >:?es0rV8 "Bank of N~w York discount
rates on U. S. C"lrtific~t"s, since JanuB.ry, 1921,
has 'been <=lbovr.. :T"'.rket re.te.
'"'1so th~t Fed "!)ral :8es<:>rv•'>- b:ml· discount rate on
acce~t?nces since January, 1921. has been above the
market rate.
122
T?cblas 38 and 39.
Offici2l discount rat"'s.
"
, '
127
For.:;im centr8l banks.
t:;,blcs show: ..
T!iscount rat'"'s of Gr-s<.l.t ~rit~in, 5!>ain, 'Denmark,
J"n•:m mt1 Norway 'Ner:: increas~d befor3 those
of t'l--., F~deral 't10s~rv~ 'Ban'!!." of New York.
122
Thes::;
Ja;?m.
)
Oct. 1919. !ncr'"'ased from 6.5 to 7.3~
Nov. 1919.
"
" 7.3 to 8.03%
Coincident ·'Vith. bro.;::-1.~ in th-? sil~ m=,rket and
resuJtinq fin~ncia1 crisis.
128
128
>
Earnin><:s of Federal :R'?s::rv"?
R.,serv-:'! -nolici"'s.
b2Jil.~s
as related to Federal
?ublic service and net ~rofit is the
Fed:?rsl Reserve system.
12.9
~urpose
of the
Profit from discount rates should not be and has not bJen
a factor in determining rates.
129
129
I
0
'.1'
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X-3332
Page No,
No incentive to profit because o! the franchise tax.
Prof its depend on vo1 ume of member bank borrowings and bi.J l s
purchased.
130
Gross earninE,s.
1920. 131. 2 millions.
130
Net earnings.
1920.
149.2 millions.
.,
129
Table 40, p. 130.
Profit and loss account of Federal Reserve banks, 1920.
.
129
Borrovd.ngs are 1az·ger in times of financial stress 1 and 1
therefore 1 gross profits are larger.
)
129
132
Dividends.
5. 6 millions
82.9
il
Surplus
Franchise tax
6o. 7
II
Conclusion of commission
Profits of Federal Heserve banks bear no relation to policy
of Federal .H.eserve Board and Federal .Reserve banks
in determining discount rates.
132
CHAPTER VI I.
Movement of funds in and out of New York City.
133
2anking reso;.;.rce::.; of lie .. York City:2/5 of resources of all national banks in U.S.
1/5 of resources of all banks in U.S.
133
New York City is financial center of U.S.
New York City is today the mo.--1ey market of the world.
133
/"~
X-3332
f'
38
OuJstion to consid.Gr:was cr::d.i t or fu.'11s :lrawn from th:) i nt~rior to th:;
financi~l c :mt )rs.
Chart
133
'P.
BisG ani ;l8clin':l of d.o:posi ts in
r,;st of country.
}1:::-w
York City and.
134
During 1919.
D.;posi ~s outsiJ..; of N ;v.; York City :cos..; frow 7. S oillions
to 9.1 oillions.
During 1 s.~().
T.c..is L.;v.;l nlci.ir:.tu.in..;d outsiJ..J of
l:JJW
York City..
During 1920.
D.Jposits of NJw York City oanks f.;ll off 370 millions
During 1920.
D.;clinv of Q.;posits of
in N.;w York City.
~11
oar~s ~ccount.;d
for oy d.;c1in0
133
During 1921.
D;..']?osi ts of oo.nks outsiJ.J of IL.r York City 0..;gcW"l to
d:;clin.; out ~it rr.;uch 3lo.nr r~-L t ..... .m. in I'!J"J Yorlc City
July 13, 1921.
1. Bca.nks outsiiJ of N.;w York City
F.:ll from 9.1 oillions to 8. 7 billions.
2. N0.v York City Od.nks
FJll from 5 oillions on D->c. 31, 1920 to
4. 5 oillions on July 13, 1941.
C~rt
4%
10%
133
Q•
Shows
T~ol.;
133
Scl.U13.
41, pag.J 135.
P..:rc.mtd.g0 o.f d.0clin..;. Loa.~.1.s c.nJ d..;posi ts.
NJv; Yor1~ City o.,.,nks ....n .... a.ll o.a.llk> i;L u.s,
Lo...ns ..on..l ..10posi ts r..:c:.ic..::...:J :F .;d.k, ...:a.rli..:r in N..;w York
City t~ in co1.1ntrJ .-.s "" w. . ol..:.
.
Tota.l doclin..; of oot...:.. loans anJ. d0poaits wo.s c,r...:c::~.t..;r
proportionatGly in N0w York City t.:Ja.n in
country ""s a. .v..... o1..;.
133
135
135
"'('"""\.
' ..:..,.• :''- ~i
0
'.
.39
X-3332
"Page No.
Ch "1rt F.
Balances of out of to\'\1!1 ban1cs with New York City banks.
Loans nlaced by New York City banks for out of town
banks, on calL
136
During expansion of 1919 until Jan. 1920:These b ~1 ":J.nces inc:.teased ranicily
Balances of out of town banlrs were 840 millions
Loans i:>laced for them by New York City banks were 680
millions - tot<1l 1. 5 bill ions.
136
From J~., 1920- Jsn., 1921:These balances and lo~ns decroased 450 millions,
From Jan., 1921, to July 20, 1921:
Decr~ased an ~ddition3l 175 millions.
136
These reductions indicate:
(a) A mov9ment of money away from New York City to
the·country sections during the neriod of
gr~atest stress in the country districts.
(b} That ins t"-"td of money being drawn from the
int?rior to N<>.w Yorl< City, the opposite was
the case.
138
Above conclusion ie fortified by g·old settlement fund
tr?nsac tions.
Table 43 A.
Gold settlement fund tr3nsactions Jan. to June, 1920.
Table 43 B.
July to December, 1920.
Table
43 C.
Jan. , 1921, to July 20, 1921.
138
139
Above statements cover u.eriod from Jan., 1920, to July 20,
1921.
Results in entire period.
Orcinary transactions.
Net loss toN. Y.
1.7 billions.
Offsets.
Treasury deposits. 1.0 billions.
Bg_l<::>nce on S9.les and -ourchases of acceptnaces
629 millions.
139
14o
'"'
, .......~.;.." _;
n'
,·.
X-32>32
40
Stat-"m.;nt s..:..o'N'S distinct t..:nd.,:mc:r towards ·;::itnd.ra.-vc.l of funds
from :tT..;w York Ci iiY oanks t.urougb. c.c..Jck cl..:c:~.rdncuff, offs.Jt
only by .;xtra.or:l.L:.""ry trcJlsc.ctions.
140
Ta.ol :.;s 44 A .... nd 44 B.
LoC;~.Us to c;;W.-.i.J. :.t.-.;;posi ts from out of town corr.::sponJ.,.mts.
Uov.JmoJr l j , 19.GO.
Tabl.; 44 A·
Tot.ll lOd.l.1S outsi.i.J :JJ·•• York district
Totc.l looJ.1S arJ.d. inv .Jst..<>. mts
1.3 billion
5. 4
"
Ta.bL: 44 B.
d..;posits from outsi~~ Now York iistrict 1.2 oillions
Tota.l oorrowings fro'n F·.:;d:;ral R ... s...;rv.; baJlk. 8c30 millions
Tot~
S.;J.O"NS : -
(a) Lo.,.ns to oa.nks, rc:~.ilroc..J.s, c:..gricultura.l cJl.i iniustridl ..
J tc. outsiJ.;; of li:>>v York district JXC0-.;dod
iJ:posi ts from sor.r.~ sourc ... s oy 96.8 millions.
140
(b) In g;;n.;ra..l,
Accom::oiation rJC.)i Vvd. oy corporations, ..;tc.
outsi.i..:; of NJVI York J.is tric t from N::m
York City ~Jo:l.fJ.ks ·::o-s ci.pproxil'Ibt ;;ly ... qual
to t.u~ dJ:posits r0C.JiVei oy Now Yor~ City
bd.cits from institutions .;..nl p ..Jrsons outsiio
t.ac UJ•v York . .i.istrict.
Cn""rt S, Ta.bl~ 45, p.
Str..;..;t loans.
l~l.
S.uovvs:
1. Du.ring 1919, ca.ll fums from (o.) out of to.r.a o.;..nks
.::~.nd (b) N.;w York City oc:~.nks incr:;c:..s.;d witLL gr.;at
rQ.pidi ty.
2.
Fur1J.S from o·ll.t of to·:m oa.r~ks 1ncr Jci.S -.:i gr ..:a. t·.Jr t..:..;a.n
from ~Liiv York City oc:.nlr..s.
During 1920.
Suo:vs:S.a.:..rp i.;clin..: coL:-.cidmt wi t.u pr ..:ssurJ for loans for
C:~.gricultural dni cor~..;rci~l purpos..;s, oot.(j, in
lL:.- York City ""nd outsiio.
140
142
l4Z
142
~
•':...:~ --;:t;
41.
X-3332
Page No.
Shows also:"'Then funds b~2'-"ln to be withd·rawn from the
stock exch.::tn;ze in 1 ?'tter n~rt of 1919.
Interest rates on call ~oney rose sharply
from 6~ to 14~.
142
Chart also s'hows:
(a)
~~e incr~ase in the call loan rate was brought
about by the d?c1ine in amount of available
funds for call loms.
(b)
Trl;! increase in r?t~s did not result in drawing
funds frorr tn ~ intl'lrior 'OT the country.
142
(c)
Durin~Z
Chart T.
Str~"'t
1920 -?nd 1921, when funds both from New
York City snd outside were §.ec1ining, the
avera~?"! call rene'val r3.te r~ng:ed higher than
durin2: th~ ·orecedinc- t'NO years when funds available for call loms were incr<?asing.
143
loans:.
52
Nsw Yorlr City b<L'"lks.
Chart U.
Felation of tot'?l loans of all stock exchange banks
and the av'=r".!2'e call loan rate.
144
Both above charts show:( a) Th:=.tt tl:e incre::tse in the "Ver.age call loan rate,
in most cases followed a decline in the total
funds av:til·-ble for stock exchs..."l!2'.? loans.
(b)
The reduction of call loan funds either resulted
frorr or was coinci0ent 1vith the pressure for
commercial, industrial, :=.tnd agricultural loans
both in and out of Ne•111 York City and the higher
rates offered for these tynes of ~aper*
143
f'hile it is tne th<>ct the .qr"l"'t del!'and, durin~t 1920, for
loans for s.qricul tur:=.tl, industrial and comnercial purposes drew funds out of the stoc1.~ market and New York
City, to t,.';.e country districts, it is equally true
th8t in ;Priods of susts.in3d ~i~ interest rates in N3w
York or on tro stoc1r "'!xch9.n.Q'e !T'oney flows from the
country to N3w Yorlr City.
144
~1oney
is a. cormodi ty and, lik'3 ot~er coir'JTJOdi ties, flows
to nlace where it comrands th1'3 hirnest "':lrice.
144
.}
•
I
X-3332
Page
Chart U.
Street loans of New York City bar..ks and call loan rates.
No~
144
Chart V.
Loans of reporting banks in U.S. and street loans of Ne.v York
City banks.
145
Above charts show:Stock e.~Cchange loans in Ne.i York City decreased more
rapidly and to a much greater extent than 1 cans and
ir:vest:uentz of all n">pvrtin; ban:rs.
This sur;;Sests that the ieme>Jld f cr loans in the col.mtry benerally
resulted in the vd thdrawal of funds from the l\iew York Stock
exchange.
.
145
145
CH.'<PTER VIII •
'
Defects and deficiencies of the banking machinery.
14G
Jasis of credit machinery co1;.sists of 301 000 independent state
and natioLal banks.
Independent be,nkin;;_ 1 though well adapted to our independent
co:nmercial system and the spirit of our institutions,
results in certain limitations up on the full use of the
banking, p ovver of the country.
146
(a) Difficult to carry out a uniform policy, either
of liberality or of curtailment.
(b) The system is subject to the individual differences
of management and of 'flOlicy of 30~ 000 banks.
146
(c) Makes it impossible for full utilization of the
resources of some banks in the locality to
give relief where other banks in same locality
are extended to limit of safety.
Do not recommend le~islation nermittir.;:c any general or unj.versal
system of br~ch banking in U.S.-
146
Possibilities of credit control by large financial centers
might constitute a menace.
146
0
t
4_).
r-3332
.
A
'Page No .
systerr of limi t~d br"'nch banking might furnish a
possibl~ solution.
Inaugu.ra.tion of such a s1stem involves reconsideration
of whole -policy of inde.,~ndiOlnt banking.
Commission does not feel warranted in making a definite
recomrrendation but suggests that ap-propriate committees of Co.ngrass consid~r it.
Further d3fects in our
(d)
b~king
146
machinery:-
20,000 O"'ri'c's, h9.vinl2" frcrr 35 to 4o~ of our
146
banking resources, E>re not roembers.
(e)
(f)
,.
These banks must rely on their correspondents
in times of str~ss.
They c'mtribute !.i ttle to .::eneral reserves of
the country.
146
If p~rmitted to borrow, directly or indirectly,
from Federal Peserve banks in times of stress
they do so at ex~ense of the reserves contrihuted by menber banks.
146
These country banks are usually small and can
not exnmd '3.de,.,uately in crises.
147
They are l"'r£T")ly st:::..te bal'JYs, and have no
access to Federal Peserve bank reservoir of
credit.
147
(g)
(h)
( i)
Other defects;
Merrber han..'lts can not furnish from 6 months ·to
3 years credits absolutely necessary to
farmers for -::>reduction nurposes.
147
Stock raisers re~uire
( j)
147
Grain crops
of~n
3
year credits.
reouire credit for
lon~er
than 1 Y'=- ?.r.
e. g. wint"lr whest, if
(1r)
lll-7
f~rtilizer
is used.
Credit should be available on a maturity basis
which will assure the farrr~r he will not be
~ressed for nayrr~nt until his ~roduct is
ready for mqrket.
147
• f"'·l
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,,. ,.' r -
44
X-3332
Pa.gs No.
Absolut.;ly n.oc.;ssd.ry to fill ta.. g,c:a.:p b.:.;t·.v. un s.u.ort
.J
tim.J now furnis..:..;Q. ...n:i. loa6 tim.J cr.:d.i. t Olll y
:pa.rti~ly furnis.:.l..;d. oy t.u...; 11d.tiorldl, sta.t.; oni
COii.m"'rcica.l oca.nkin1;; syst"'m a.n.t lo.rgJlY furnis.o.·Jd.
oy f.-.n mortga.e;.J institutions ..nd t.a..; F.;d.ora.l
Fa.rm Lo""n syst"'m.
(l)
14?
In a.ili tion to o..;ir.g ];:rovil.:d ·.vi.t.J. Cd.S.:.. for :pro.iuction o.ni
ma.rk::tir..g of cror:s, cr~d.it·n.ust eo furnis ......;d. for f..;rtilizJr
· a.nd o~...:....;r .-xp ..ms~s L .. :i..:...:~~t to }:l~o.J.uc'.:;io~1.
1..:;? ·
148
Limi l:iations of Fa.rm Locwl SJSt..;m.
:rot intJnd.Jd to furni s.J. ·fw,1.ls for pro.iuction ,,,n.i Il'ld.rkJ ting.
Prd.ctico.lly limi t.:d. to _long tiro.; loa.11s of a. mor.J or luS's p.lriildl1.;nt
na.tur..;, sue..._ a.s t~os..; sp..;cifi..:J. in t.c....; Act.
,
I
F..;d.;ra.l
R~s..;rv..; sys~;m "'std.olis~~~
F.;d.Jrd.l R..;S.;rv..;
~~s
d.S
c..;;ntra.l r.;s~rvoirs of colo.u'1l.irci~l oa.r.kiug dll.:i COH<::.r..;ss liwi. t.:;d.
t ....; r..;.iiscount
J;:O
:;;rs to paf.Jr of r..;l.a.tiv.;ly s ..... ort m.... turity•.
T.C..-3 9J ld.y limi tca.tiOJ.1 is ,;;:m.;.rci.liy suJfici<mt to cov ~r t.u.~ n.;:;.is
u.:: .;;om:.:...:rc..;; ail.J. inJ.ustry.
T..::.~
::; n10nt.as limi tC~.tio;:l ta.k..:~s ca.ru of t.:.J s..:.ort
of fc..i~Jrs tor i~JJ:.:r_pol·a.ry purpos;;s.
t.:,r:;:
.)Or rowir;gs
Lo.-.:.s cov .ri11g t.a~ p.;riol of oot.a pro.iuction dll~ ordorly ::.""rk.jtir.g
i"lclu..J..:.n;; br.;JJ.icg c.nl fa.tteui~1g of liv<> stoci~, r;,-iuiri:..11
~tu.riti ... s of froxr. o mo:.:.·~--s to 3
y.;; ....rs, ""r..:l .• ot 0lie;iblJ
'
.
un~or F~dor~l
R3sarN
148
sy3~aw.
F;;;J.ora.l R,.;sorvoJ i.~v .;str:.-mts :cru.st oc co~1fL.3J. to t .... ose of ca.
GJll-11-,.ui ...... .,L ..."' ::L.tu..:~.;; -·~.J. of Si....Ort.;;r matul·iti.:;s.
::::.u.;3 :possioili cy oi ro[;.;3 ia.ls
sufr'ici<Jnt.
UJ.l~-:>r
148
Failera.l R3s jrv.:J syst..;m is not
149
,...... ' ' )
,·.
!-3332
Essentials of proposed
1.
Page No.
legisl~tion:-
Amend Farm Loan Act.
(a) To nermit Federal ler:d b$'J:rs to redls~mmt
agricultural paper havin~ a maturity from
6 months to 3 years, for national banks, state
banks and trust companies, savings insti tutions and incorporated live stoCk loan companies.
i
tv
(b) To nermi t Federal land banks to loan directly to
6ooperative associations of farmers or~ani~ed
under st"'te laws, when secured by warehouse
receints covering- sta"!?le a~ricul tural products.
(c) Permit Federal land banks to establish senarate
de~artments for nurpose of issuing short time
debentures l-:1 '?.Ving a maturity of not more than
3 years, secured by loans described above in
(a) and (b).
·
149
(d) Necessary ca~ital for the seParate departments
to be furnished from the Federal Treasury.
149
(e) The rates of interest under (a) and (b) and on
the short titre debentures need not necessarily
coincid~ with the rates of interest on farm
land mort~?a~es and farm loan b 011d.s covering
these mort~af'es issued by Farm Land banks.
149
(f) To n~rmi t Feder'3.1 'Reserve banks to ~;m.rchase
debentures issued under these ~roposed amendments under the same terms and conditions as
now govern their ~)urchase of farm los:n bonds. 149
(g) To 'T)errni t Federal ResArve banks to rediscount for
Federal land b~nks or joint stock land ba~s,
with their indorsement, any lo~s made under
(a) and (b) above when within a maturity of
6 months.
150
Farm land banks, not having large fixed ca-pital, rr:ust obtain
funds by sale of their bOnds in the investment market,
to provide canital for new loans.
150
Because of seasonal n~ture of agricultural requirements, it
would not be ..,ractic<:1ble to reouire farm land banks to
borrow by bond issues the amounts necessary to satisi'y
the Peak of the fa~~rs' demands.
150
i ' - · · - .,
~:--J'i
(" '
X-3332
46
Pag0 No.
Desirabl'-3 1 tharefore, if not n-:ccssary, to . mable t.n<Jm to
rediscount ·,vi t:O. Fedoral Reserve banks t:0.0ir loans upon
security of agricultural products, w~en wituin maturity
of six months.
Not necessary to a.dmit farm land banks into
system.
Fad0rc~.l
150
Reserve
Because of t:O.eir limit<:.3d working capital, they should not be
raq_uired to Irk.l.ka any deposit v-ri th the Fuderal Resarv0 banks
as a prereq_uisita to rediscounting loans as c~.oove r~f0rred to.
These racomrJ.endcl.tions will effect'U.d.lly bridg0 t.ue presant gap 1
wi tnout as td.olis.aing ncN c..nu. un trivd Irld.C.ai n0 ry or
sacrificing any of tua fund.a."ll,.mtal principl0s upon w.llicn both
the Fcirm Loa.n Syst-.;m d.ll-1 t.o.-:: F0d.Jrcil Rvs.::rve System must
rast.
150
Statistical tablas s.o.owing mov.::m,.mt of money and cr0di t.
Table •7, page 154.
Give:s a complete picture of movement.
151
Minority opinion of Ogden L. Mills.
153
Concur in report, with on.; exception:Ca.n not agree wi t.a tb...; s tate:r1en t tna t 11 a cnange in policy
as to discount ratas, lat0 in tue year 1920, would
have accooplisb.~d a. revJrsal in part of the
psychological and econonac factors w.o.ich at tnis
time were moving in tha direction of lower prices."
This suggestion is:(a) Out of b.ar::aony wi t.a tb.e balance of the report ..
_(b) Inconsistant Nith t.a0 facts brougnt out by our
inv<Jstiga.tion.
Hig.ller discount ra.t.;;s did. not produc0 t.ae orcak in prices.
InconceiVcibl0 taa.t t.u..:Jir reduction could .t:.cJ.Va counteracted
the economic forc...:s leci.ding to inc:vi table dafla.tion.
l58
_;f._
,r,.···
I·
47.
X-3332
'flage No.
l.
Federal 'Beserve bank rates were below market rates
throue·hout ye9.r 1920.
2.
''
Only 904-r' b"'-n~s out of a tot"'l of 28,210 az.e merroers of
Feder21l 'Feserve svst~>r.
(a) 1\~!?n.Y of those b:".nks e.re to a great extent free from
co~~etition and cr~rge rat3s fixed by local custom and local circums ts.nces.
(h) Decrl'lase of a Federal 'Reserve bank rate from 7 to
6~ can h?.V9 no effect on a western or south
western ban'~ ch"'rc;cing 8 1 10 or 12'1b.
(c) Fed'3r<>l Reserve discount rB.tes can only be effective in restriction of loans and discounts of
bsml~s wr-ich are harrowing from the Federal Reserve banl"s.
In Sept., 1920, in New York
district, trere were 454 non-borrowers against
323 borrowers.
3.
Borrowings from Feder=>l Reserve ban~'"S, May 4, 1920, to
~-pril 28, 1921.
~g:ricul
NonIf
4,
tur,1 counties.
"
~
Increased 56.6d/o
DecreB.sed 28.5~
st9.te~ent
I object to is true, a lower Federal Reserve
discount rate would hav<?- maintained industrial "9rices
to the furt'c <?r dise.dv"'n tage of the farmer.
158
~ile it can not be conclusively nroved that credit
strin!7ency W9.S not an initisl factor contributing to
price defl3tion 1 trere is no evidence to show i t ~· 158
•
admits tr~t once ~rices st~rted to drop, credit stringency
was tr~ cause ·of rruch h'trdship and, in m9.ny cases, of
incr~ased losses •
Do~ b~lieve
that increased Federal Deserve discount
and contractin!2" credit were the nrin~._x:y ca,~ses
of t'::e s"srr,> -::lrice defl?tion of the 2nd relf of 1920.
r:o~t<:ls
158
(a) Tr.e nrice "!)eak of all corrrcoditi~s was reach in ~1e.y,1920.159
"Loans of all r-'mortinl2" "bmks, and discounts of Federal
Feserv-: b?cnl-s continued to increase until Oct. 1920.
1
Federal Peservo note issues continued to increase until
J'.:lJ.""l, 1 1921,
-~
·-··--
~'''i"1)
,.•
,.__ ,
48.
X-3332
Page No.
Certain agricultural commodities reached their peak
in 19191 and fell rapidly before any material
increase in Federal Reserve bank rates, and
before any credit stringency was felt.
e.g. - Hogs 1 bacon, cattle, dressed mutton
and butter.
159
In all these instances, there was a direct relationship between
the ~peak and the eJU?ort true peak.
The hog export peak was in June, 1919, and the
July, 1919.
~
159
peak in
The same as to bacon.
The
g~ttle
export peak was in August 1 1919, and the
November.~
1919.
The cotton export peak was in
same month.
f~rm ind_u
~ril 1 l~Q
The total
April.~
pri~~
peak in
1920, and the price peak in the
peak was in March1 1920 and the price peak in
~9
Many other instanc~s showing relationship between production and
con§umption peak and the price peak.
No such relationshi~ can be established between increased Federal
rieserve bank discount rates and the drop in price of any
single commodity.
,,
I
...
159
(b) Agricultural prices broke more sharply than any other, and
yet, from M~y 1920 to May 1921, the liquidation of loans
in agricultural. counties was relatively much less than in
industrial counties .
(c)
(d)
Interest rates are only a small percentage to total outlay,
which is largely accounted for by cost of labor, cost
of material, transportation and distribution.
Price deflation was world wide.
Crisis began in Japan in 1919.
159
;~·-:..)
rj' ····
f~
I"' . ·- . t)
X-3332
Page No.
•I
Price level began to fall:Great Brit~in.
April, 1920.
n
France and Italy.May,
U. s., Germany, India and Canada. June, 1920.
Netherlands. Aurust, 1920.
Australia. Sept. , 1920.
159
Conclusion.
m:i:nc?>:i ty nr.nrn.on !liven. because many believe that the increase in Federal Reserve
bru;k rates we.s a T.Jrimary cause of dedine in
prices in 2nd half of 1920, which so disastrously affected agricultural products.
Th~,s
Such an opinion inev:i. tably leads to the conclusion that the ~ederal Reserve Board and
Federal Reserve bariks constitute an agency
by means of which ~rices may be raised or
lowered.
This opinion is so contrary to
economic facts and to the ~~oses of the
Federal Beserve system, that it should not
be nermi tted to pass unchallenged.
,.
I
159
1-3332
1~
A.
.,.
INQUIRY INTO THE
RE'POR1' OF THE JOINT AGRICUtTURft'L COMMISSION
.AS RELATES TO ITS CRITICISM OF
FEDER~t
RES11'RVE 'POLICIES.
Tbe eri tic isms ot Fed.et'al Reserve policies ate chiefly confined to
two periods:-
1. Post war inflation.
·tl
2.
March 1919 - Jtme 1920.
DeflPtion and liquidPtion. · June 1920 - June 1921.
1.
J'irst period.
Post war irtflaticn.
M~rch
1919 - June 1920
Criticisms made by the C~ission:
1.
The iow rate polic7 of the Federal Reserve :Board and the Federal
Reserve ·banks was unsound..
Digest P• 11. Report P• 43
2.
Diicotint rates shd'!lld have been radically increased during the
apring of 1919. to cheek speculation and inflation.
Digest P• 9· Report P•
It
3·
"
u..
" "
15
43
Such radical 'increase in discount rates would have forced the
melliber banks to apply the Government credit which was
released in 1919, towards pay-ing off their borrowings from
the Federal Reserve banks, instead of using it to feed
speculation..
· Digest p. 11. Report poi
43.
4. Tbe application of such a ''sound policr" would have made the
subsequent lililidr->tion less precipitous and would heve
mitigated tbe hardship on banks Pnd individuals.
Digest P• 3· Report
ft
11
S.
"
It
5
13
rt
'D•
fi
If
II
12
iJ
45
The Federal Reserve :Board should have insisted upon such a radical
increase of 'tlscount rates. in spite of the feet that such
aetion would have forced tm Tre~.sury "o issue tbe 'Victory
notes at higher rates, correspondin~
the market value of
money,
Digest p. 12. Repbrt :P• 44.
te
6.
The intlat1on ceused by the low rate policy ''~'as measurabi;y greater
than would have followed a hign rate polic7.
Digest P• 24.
I:'... ,. ~
i':' _,'·:.::
Report p. 81.
X-3332
A,.
2.
7. '!'be low rete policy increased Government expenditures for
principal and interest.
8.
Digest p. 24.
Refort :P• 81.
The low rate policy depreciated the market value of the
Liberty bonds causing loss to investors.
Digest :p. 24. Report P• 81.
S· The low rate policy increased the cost of the war.
Digest P• 24.
Report ~· 81.
10. Tbe low rate :policy was contrary to the policy of the great
finaneial centers of the wor1d:;,prior to the war, and. in
some CI!Ses, during the wctr.
Digest P• 25. Report P• 83.
II.
Answer to the above criticisms as shown by findings of the Oomnission.
1.
'!'he Commission finds that the whole Ciuestion of Federal Reserve
discot~Dt rates during this :r;:eriod hinged on whether the
'Victor.y notes should be issued at a relatively low rate or
at a higher rete eprroximeting the mBrket rete for mcney.
Dieest p. 23. Report p. 80.
2.
The C01m1ission admits that if the victory notes were to be issued
at a rele.tively low rete the discount rates of the Federal
Reserve banks: :must have been maintained at correspond.irgl;r
low rates.
Digest p. 25. Report P• SJ.
'.
,\
3· The CormdssiQl fims that higher rates fixed in the approaching
Vic tory notes=1.
Would increase interest N!tes generally thtoughout the
United States.
Digest p. 12. Report p. 44.
2.
Would depreciate the market value of all outstl!'nding
Liberty borda.
Digest P• 12. Report P• 44.
J. . Would force
4..
great
li~uide.tion
Would depreciate tbe market value of securities be:ld
by savings banks, trust companies, insurance coarpanies.
etc.
.5.
in all securities ..
Di@est P• 12. Report p. 44.
Di@est P• 12..
1llould give rise to e. demendfor refunding outstanding
Libert;r bonds which mi~bt have been irresistible.•
Digest p. 12. Report p. 45.
6. Would ·result in a dislocr.'tion PDd
growing out of
R&!>ort P• 44..
~be
embarrassment to industry
general increase in interest rates.
Digest P• 24. Report P• Sl.
X-3332
A.
3~-
.
'
Notwithstanding the eb ove,
The Commission f.inds that higher
I"E~tes
in the Victory notes:-
1.
Would encour~e s~>'Vings.
2.
Would cause a trmsfer from non-essential P..nd low rate
investments to Gov~rnment bonds.
3.
Would a.bs<:>rb free capitaL
4.
Would discourage non-essential production
5.. Would limit Eixpen$ion And inflation
6. Would reduce consumption
7• Would retard the rise in
8.
''
~rices
Would reduce the amount or money needed bt tbe Government
fOl" tlJe War, the higbf-Jf ir.. ~et"est rPt&S being Offset
b~ the smaller E:Cnoutit needed. •
Digest P• 23. Report pp~SO,Sl.
The Commission further firids the.t the decisions which bad to be made
were difficult Pnd. important and that doubtless; in these
cireumstEtnees, miste>kes of judgment were mede which the clearer
judgment of retrospect would clPnge~
Digest P• 9.. Report P• 15.
III.
Deflation
C~Dd
liq,uidP.tion period..
Criticisms made
b~
June 1920 .. June 1921.
the Comrrission.
The Commission finds:-
1.
The policy of the J'edere.l Reserve !lonrd was one of reduction
or, it least, :Qrevention of furtJler expansion ot loans
and disco~.mts of member banks.
Digest p. 16. Report P• 52.
2.
That, although admittedly exercised with a. view to
preserve the integrity of the banking system and to prevent
financial panic, it is ,probable that the presstll'e was
excessive.
Digest P• 16. Report P• 52.
3·
That this pressure was exerted in the only way it could be
exerted, v17; .. , in refusing loans to trsmber banks in
individual cases mel by the pressure of discount rates
on borrowing member banks.
Digest p .. 17. Report P• 53•
1-3332
4..
A.
0--......"'l
r<)·.,_ ..
<
'
4.. That there were cases where such pressure resulted in
hardship on member banks and tl::mir customers.
Digest P•
17 .. Report 53.
5·
That· the· action of the Federal Reserve Board in wiping
out the differential rates on Goverment paper was
sound in theoa and in lim with central bsnking
practice, but that its §Pplic~tic:n penalized member
banks which were 'b orrowirg on their own Government
securities or were loaning at lON rates on customers
notes secured by Government bonds.
Digest P• 15. Report p. 48.
6..
That this action forced member banks to liQ.uidate theit"
holdings d Government borxls and depressed the ma.rlm t
value of Government bands ..
Digest :P• 15. Report P• 48
on the ass~tion tbat a
decline in prices was inevitable in 1926, shoulll have
taken some action to bring debts to be pfiid into c1dser
relation ·With the goo:ls with which onlr the debts eou1d
be paid.
Digest p. 16. Report p. 51
See • Digest P• St 24 A. "
rt
13
1. 'rhat tlB !eder8l Reserve :Board,
i.
s.
That He d:rop in prices inttoduced into the public the
psychology of fear md mede the banks ignore the banking
maxtm that, in ti~es of streas; credit should be gr?nted
freely though at a higher rate, and melte them exert
pressure fo.r li~uid.P tion.
Digest P• 28, Report P• 86•
9·
That a che!2se in Federal Reserve policy would probab!z
have reversed in pert this psychological factor •
.Digest P• 28. Report p. 86.
10.
That notwithstanding the epprehensions of the Federal
~serve 13oard. Pnd J'ede~el Rese"e 'banks that a. change in
policy, - resulting in a genal?l invitation to menber
banks to increase their loans, - might result in bank
failures, the Commission is t£ the opinion that:
A more liberal policy could. have been ~dopted.
That such a policy would have served to arrest in part
the tide of deflation end to reduce the hardships and
losses incident tba reto.
Digest P• 30. Report p .. SS.
11.
That it is evident that the applicf'ltion of the policy in
rural sections resulted in gre~t hardships .gnd. distress
and contributed to scm:e results economically undesir~ble,
wbatever may- be said otbe rwise in sUpport of the policy frem
tbe stF.!Ddpoint of its wisdom and necessity, and in the
light of tm psychological end economic fae tors which it was
necessary to consider.
Digest p. 30. Report P• 88.
'·
X-3332
•
\
11 A.
Tbe pressure of li~uidation in agricultural sections
wes shown by a greater relative decline in
deposits than in semi-agri. ru l tural end indus trial
sections.
Digest p. 1· Report P•
0···p
~- .,_)
I
A•
15.
That the hardship em rural sections was due largely to:Excesslve cost of producing the 1920 crOp. ' · ; '·
Slower tunuwer for farmers ..
Pressure for liquidation forced sale of immature cattle
and ca:Lves, which will produ.ee a shortage of
meat sup-ply.
Sales were forced when borrower should ha,'ij'e been carried.
Digest :p.. 30• Report P• gg,.
Prices of what he had to sell declined taster ~
those be bad to biq.. Digest P• 30. Report P• 89.
lJ. Tba.t
prOgressive rates resulted, in many in~ten~es 1 in
unc6nseione.ble rates: Upbn the borrowings• or some
portiQ'l thereof, of iiSir:tler banks in excess o£ th~ir
besic lines.
Digest p. 21~ Report p.
1
62.
14~
Penaqzed banks which were maki.ng the greatest effort to
serve their customers.
Digest p .. 21. Report P• 62.
15..
\.
The application
at such a uniform ~'md ar'bit raty rule to ell
banks, wi1hout regard to peculiar circumstances, cen
not be justified from the standpoint of sOJm banking;
nor from the ccnsideration to which the public is .
entitled from banks * * • exercising ~b11e functions.
Digest P• 21. Report P• 62.
IV ..
.Answer to above as shown b;y; findi!l!s of the ComYr1issiono
1.
I
2..
'!'he increased discount r~tes ani subsequent tight moneT
ope~.ted as a dike to keep goods, - which .were backed up in
the channels of distribution from the farner to the cons\lller. flowing in the channels of trade, notwithstanding the
obstacles of declining :prices and slackening demand.
Digest p.-· 13. Report I>• 45.
See infra- Digest pp. 8, 24 ~.
"
" 13
The· causes of the headlong fall in prices were:-
cancelled orders.
frig.ht.
~lie
Digest p .. 14.
Digest ·p. 14.
If
ft
27-
Report p. 46.
Report p. 46.
" PP• 85, 86.
X-3332
I
6..
A..
''
Preceding exhaustiOn of credit~
Falling off in exports'It
n
n speculative demand.
n
1 domestic consumption.
'
•
3·
Digest p. 14..
n
n
II
n
n
"
27-
27.
27•
Report P• 46
• pp .. 85, 86
lt
85, 86.
85, 86.
"
" "
tm inflation period was relatively
greater in the rural districts than in the ird\ls trial sections.
Digest P• 33· Re~ort P• 117
"
It
34~
•
fl
120.
The expansion of loans during
4. The policy
of the :Fed'3ra.l Reserve lloa.rd and Federal Reserve banks
duting the deflation period did not produce a gre~t2r
c'lo¢ta.ilment of loans in the rur~l districts than in the fin8lleial
artd industrial sections.
Digest P• 33· Report P• 117.
•
5-
The rediscotints by Federal Reserve banks of agricultural and
live stoek paper was relatively
of ell other paper.
6. The
6
gt~ater
than the rediscounts
Digest P• 34. Report P• 120.
li~uidation, of Pgricultural and live stock p~per was relatively
less than the liquidation of Pll Other discounts.
Digest p. 34. Raper t p .. 120.
A.tn fact, but little t>ctua.lliquidation Cf loans and discounts had
taken place in the agricul tur a.l sec ti ons of the c ounti"y' as a
whole up to ~ 1921. Certain exceptions noted.
Digest P• 6. Report P• 14.
7. The Federal Reserve T:oa.rd was in a very delicate position.
Its duty
To
To
To
was:provide for essential credits
lirnit non-essential. and speculative credits.
prevent banks over~tending.
Digest p. 16. Report p. 51
The balance between these was extremely delic<'te.
Digest p. 16. Report p.5~.
8.
I
Tbe Commission, - while of the opinion that it is probable
that the Federal Reserve Boa~ and some of the Federal Reserve
banks imposed 'ieessive pressure towards reducticn or
prevention of expansion of loans, -states specifically that the
alternative Of its policy, - the extension of all credit
desired for any purpose, - would have ~tNol-eed the following
dangers:A large number of bank failures.
An undue redueti on of reserves
Excef'lsive currency issues resulting in deprecia..tion
Loss of confidence in the banking system
Runs on banks
Demand for redemption of Federal Reserve notes ~ goldDigest p .. 11.. Report P• 52
,~..
t
-
')
•.
X-3332
9..
10.
The
A.
C~ission specifically finds that
:Before the application of progressive rates the Federal
Reserve Bank of Kansas City's resources were
largely absorbed. by a relatively small number of
banks in Kansas City m.d Omaha. which, in April 1920,
were absorbing 73~ of the mormal leai.ing pow~r of the
Federal Reserve bank·
Digest P• 19• Report p. 56.
Tbe progressive rates reduced these borrowings 1argely thus
increasing the funds of the Federal Reserle bsrlk available
tor other banks borrowing moderately or not at all.
Digest p. 19. Repott P• 56.
11. Tbe chart sh01rs that the progressive rates permitted an increase
in the borrowing&
12.
or
countty banks.
.
Digest P• 20.
Report P•
58.
The borrowings of the Ks.nsf\s Cit1' Ehd Omabe. banks were
transferred to the eounttT banks.
Digest
·
·
p.
.
~o.
Report p; 58.
1;.
'!he
14..
The average ra.te paid by
rates was 6-7~·
15.
Tbe total interest paid by ... 11 banks in lriltlsas City was
$325,904.78 less tbsn would heve been paid had the tate
been a flat w-rate.
Digest p. 21. Report p ..
avet~ge
te.ter normal al'Xl_J)rogressive, }la-id by all banks
in the district was 6.61%.
Digest P• 21.. Report P•
ali
62.
benka borrowing at progressive
•Digest P• 21. Report P• 62.
62 ..
16.
The progressive rate did not cause eny increase in.. Guetomere.
rates; wbetber the loaning banks were borrowing at norma!
rates, progressive rates, or were not borrowing at alll,
the custaners rete was the sane.
Digest p. 21. Report P• 62.
17.
Progressive rates did not control ei tber the acunt of deflation
or the rate of deflation•
Digest p .. 22. Report p .. 68.
18.
The reduction of loans Alld discounts, under progressive rates,
was re1,_tively less in countr.y banks than in city banks.
Digest P• 22. Report p .. 68 ..
19..
The expansion of loam during inflation period was relatively
greater in the rural than in industrial districts.
Digest p. 33. Report p. 117
If
20.
"
34.
"
" 120 ..
The policy of tbe Federal Reserve Doard and Federal Reserve
banks during the deflation period did not produce a greater
curtailment of loans in the rural then in the industrial
sections.
Digest P• 33· Report P• 117.
• •
X-3332
A.
21.
Tbe rediscounts by the Federal Reserve banks of agricultural
and live stock paper were relatively greater than the
rediscounts of ell other paper. Digest P• 34. Report P• 120
22..
The liCLuida.tiort of agi"icultut~l and live stoc)F pwper was
relatively
l!U thaxi
the
li~UidrUon
of all other discounts.
Digest P• 34. Report P• 120
It
n
6
n
"
14.
23.
If a more liberal. poticr ha4 been adopted by the Federal Reserve
:Board and as a re!!uit the prices of what tbe farmer had to
buz were stabilized mote than the prices of what he had to
.ell, his condition wOuld have be~n worae than before.
Digest P• 31. Report P• 89·
24.
In the spring of 1920
* * * the etl'Mm of ptoduction floWihg
from the farmer to the consumer began to back up in 1he
cha~ls af distribution, altho~ higher discount tates !94
£i@t m,gpg, like dikes erected along the banks of the .
stream, served as influences to keep goods flowil8 in the
channels ct trade, notwithstanding the obstacles of declining
prices and sleekening demand.
Digest p. 13. Report p. 45.
'.
I
!
24 ·J. It we.a necessary, by e high level of discount rates, to keep
these credit re~uirements 1n such a relPtion to the
prices of goods th~'~t benk failures would not result ani a
financial crash increase the inevitable industrial.
depression resulting from declining prices.
Digest P• 5· Report P• 13
was not abeotbed b~ financi~l centers at the expense
of rural CODI1'Uni ties for purpose of specul~ ti ve ~c:ttJ.vitiea.
Digest p .. 33· Report p. 117 •
25. Credit
26..
Tbe J)ftlicy of the Federal Reserve banlts reflected the necessity
tor control, restraint, and restriction.
Digest :P• 17. Report P• 51.4..
27.,
Tbe Coa:missicn finds, however, tat the Federal Reserve Board
and tbe Federal Reserve banka cpyl4 not apply th~ir pftlicy
p.nUoJ!lz because conditions were not uniform.
·
28.. That it could not control tl:e loan policies of the 20,000 banks
which were not members • - representing from 25 to 40% of the
bmldng resou~es of the country.
Digest P• 17. Report P• 53·
29. That it could limit loans only to member bS!Uts which were
borrowing or threatening to borrow exeea§ivel;r.
Digest P• 17. Report P•
51+.
X-3332
..
:t~
A..
30· The Comnission finds that a chsnge in policy, to be effective,
must necessarily me~n a further extensicn of. loans.
Digest p. 28. Report P•
31. That
...
32.
86
s~h
further extension must derend on the ~veilable
supply of fundS•
Digest P• 28. Report P• 86 •
That when banks increase loans end discounts during a time of
falling prices, the credit strain increases, aS also the
danger ¢ bank f ai lures.
,.Digest P• 30. Report p. gg.
33· That l/3 of tlle banks w·ere greatly over extended.
Digest P• 26.
Report P• 87 •
That the Federel Reserve :Pol'!rd and. Feder.t:U Reserve banks felt
that due regp rd nust be had to the pes si ble results r:L
a change in poliCJ!i• ·
Digest P• 30. Report P• 88.
35·
.'
That they felt thAt a. gene:.·l".l invitation to me:aller banks to
increase loans, - through the effect of lONer discount
rates, - might result in bank failures.
Digest p. 30. Report P• 88.
36. That suspensicn of the reserve requirements would have
afforded no remedy, for the tax imposed. by the Federt:>l
Reserve l'lct must be ei&ed. to the discount rate, and
while such suspension would tend to increase loans. the
tex would operete in the same measure to restrict loans.
Digest p. 31. Report p. 90·
37 • That the renedy for overexteniei banks should. be en increase of
ca:pit~l.
Digest :P•
29. Report
P•
87.
38. That it is clear thflt in many CAses, inade9.ue.cy of capital, .<>ni
not insufficiency of bank c:eiit was a fP.ctor restrainins
and limiting credit iuring this p::ricd.
Digest P• 29. Report P• 88.
0·,~'""•")
(: ,' __ ,,...:J
~
..
(""""'. ,;-. !"""!\
FEDERAL RESERVE BOARD
WASHINGTON
X-3333
February 18., 1922.
,..
SUSJECT:
Monthly R<Jpo:~ts of Claaring Cpsrations and of
Member and Non-member Banks in District,
Forms 170 and 170-a.
Dear Sir:
.,
The Board has experienced considerable difficulty
in obtaining reports relating to clearing operations from
some of the Federal Reserve Banks in time to have them tabulated and sent to the printer with the manuscripts for the
monthly Federal. Reserve iluJ_letins, thus necessi tatint:, considerable changes in the 0 alley 1 and sometimes in the page
proof. It has been decided, therefore,~ to sho·w, figurss of
clearing operations by calendar months in the future.
Accordinoly, it is requested that rerorts be furnished on forms 170 and 170-a for the period from February
1 to February 261 inclusive, in addition to reports for the
period from January 16 to February 15, and that subsequent
reports be made for calendar months. It .will also be appreciated if you will furnish us with reports on the above forms
for the month of January 1922, in order that figures by
calendar months may be available for the entire year.
Very truly yours,
G o v e r n o r.
TO ALL FEDEHJIL
RESE~VE
.AGENTS.
~--
'-
(_)
r", ,...,
X- 3334a
.
I'
,1'!
.. ' ;l_
A GILL.
A DILL to be entitled AN PCT to require all
bar~s
and banking
institutions incorporated under and by virtue of the laws of Geor 6 ia
to become members of the Federal Reserve Bank; to provide for a for-
...
feiture of charter and liquidation of assets for the failure or refusol
to comply with the terms of this ACT i to provide when this Act shall
be of force and effect, and for other purposes.
Section 1.
Be it enacted by the General Assembly of Georbia 1 and it is
hereby enacted by the authority of the same 1 that all banks and bankin 6
institutions incorporated under and by virtue of the la#s of Georgia
'
I
are hereby required to become members of the Federal rteserve Bank as
provided under the law·s of the Congress of the United States.
Section 2.
oe it further enacted by the authority aforesaid, that any and
all banks and bankin£:, insti tut:l..ons fail ine;, and refusing to become
members of the Federal Reserve dank shall forfeit its charter, and tha
Superintendent of
~anks
iu the State of Georgia is hereby directed and
authorized to take charge of the assets of such bank, close up the same
a~d
liquidate the assets of the same.
Section 3.
'I
Be it further enacted by the authority aforesaid, tnat this ACT shall
take effect and be of f"J.ll force on and after January 1st, 1924,
Section 4.
Be it further enacted by the authority afore said, that all la;;s and.
parts of laws in conflict with this ACT be and the same are hereby repoahd.
FEDERAL RESERVE BOARD
265
WASHINGTON
February 18., 1922.
X-3335
SUBJECT:
Annual Election of Officers and Approval of Salaries
by Federal Reserve Board.
Dear Sir:
Some of the Federal Reserve Banks have apparently
overlooked the Board's instructions of December 23, 1915 and
January 6, 1916, regarding the annual election by the directors
of all officers and the approval of their salaries annually
by the Federal Reserve Board. The Board understands that all
officers are annually elected by the Board of Directors .. but
in some cases salaries have not been submitted for the Board's
approval~ upon the theory, the Board assumes .. that it is not
necessary to do so in cases where no changes have been made in
the salaries.
I enclose copies of the Board's letters above referred to and would state that the Board desires to have submitted to it for approval all salaries voted by the Board of
Directors-to officers for the year 1922.
Very truly yours,
G o v e r n o r.
Enclosures :
X-3335a &
487.
TO CHAiliEN OF ALL F.R.3ANKS
c
0
p
y
December
23~1915.
X-3335a
I
S I R:
' '
,,
The question has been brought before the Federal
Reserve Board from various so..1rces whether the officers
and employees of Federal R~serve Sanks are to have a definite tenure of office, or are to hold office subject to
the pleasure of their boards of directors. Investigation
shows that there is a lack of uniformity in the by-laws
of the several banks on this subject, and that r.. o definite
action has thus far been taken as regards the Board's own
relation to the matter.
I am, therefore, instructed to advise you that the
Federal Reserve Joard has determined to ask the several
banks to submit to it each and every year, as of Janua~y
1, their lists of officers and el:lployees, v>'ith salaries for
approval, such action to be a reatter of regular routine,
involving a preceding annual action on the part of each
board of directors in electinb or re-electing officers and
employees for another year. It is also suggested that
(in the course of each such year) the officers and employees of each bank shall be co •• sidered to hold their appointments for the calendar year and subject to the pleasure of the boards of directors of such oank.
Respectfully~
(Sit;necl)
H~
Parker iJillis, ·
Secretary.
r.~.,~-1
I' , , ' •
S i r
Your l3ttor of Jc:·:nuetry third was subrr.itted to the Board) and
,,.
I am directed to s"'-7 to you tilc:.t the Board is in accord oiiith the vie·Ns
f
expressed therein.
As you stated) the real point is that the list of all salaries should be subrr.itted to the Board once a ye&r for its approval 1
and the month of January -,vould seem to be the natural tirr.e for such
apl)roval as th:..t is the usual month -,,hen changes in salaries are made.
The Board does not wish to convey the idea that it desires
that all clerks should have definite terms of office.
These ap-
pointments may be for an indefinite term provided thay are terminable
at the pleasure of the Board of Directors of the Bank.
While the
gener.;,l custom is that clerks are ap:lointecl by the officers of the
ba::1k, the officers 1 senior and junior 1 as a rule 1 are appointed or
elected by the Board of Directors of the Bank) generally to serve for
the ensuing year.
It would appec..r) therefore 1 that this gener::-.1
practice ought to be observed also by the Federal Reserve banks r.nd
senior and junior off icars ought to be appointed f rorr. year to year
and their salar.ies ~ as all othe_rs 1 _ should be_ dUb }ect to c'cnnuc..l approval by ti1e Federal Reserve Board.
Very truly yours 1
fEDERAL
ADVISORY
1
92
COU11t:!L
2
- --- -- ---- - -- -- --- -- - --- - - -- - -
-- - - - - - - - - -
Executive Committees:-
Officers:-
L. L. Rue, President
L. L. Rue
P.o M. Warburg
Philip Stockton
J~ J. Mitchell
F. o. Watts
E. F.. Swinney
P. M. Warbur~ Vice President
H. L. Hilyard~ Secretary
- - . - - - - - ·- - - - - - - -
-
- - - --- --- - ~
~
~
MEMBERS
District
Representative
No. 1
Philip Stockton
No. 2
Paul M. Warburg
President
Old Colony Xr. _Co.
Boston, Mass.
31 Pine Street
New York, N. Y.
No ..
3
L. L. Rue
President
The Phila. Nat. Bk.
421 Che stnt.lt St • ,
Philadelphia, Pa.
No.
4
C. E. Sullivan
President
Central Nat. Bank,
Savings & Trt.lst Co.,
Cleveland, Ohio.
No.
5
No .. 6
E.
w.
Lane
7
J. J. Mitchell
No.
s
F.
No.
9
G. H. Prince
No ..
'
J. G. Brown
President
Citizens Natl. Bk.,
Raleigh, N. C.
President
Atlantic Natl. Bk.,
Jacksonville, Fla.
Chairman of the Board
,
•
No. 10
Illinois Trust and
Savings Bank,
Chicago, Ill.
o.
Watts
President
First Nat. Bank,
St. Louis, Mo •
Chairman o.f the Board
Merchants Nat. Bk.,
St. Paul, Minn.
E,. F. SWinney
Preaident
First Nat.
Bank~
Kansas City, Mo.
Nat. ok. of Commerce
San Antonio, texas.
11
R..
L. Ball
Chairman of the Board
No. l2
D.
w.
Chairman of the Board Old National
No.
Twohy
Bank~
Spokane, Wash.
Digitized for---------·-----~--~---~--------~--·-·-------------------~--------------------------··
FRASER
Address o.f H.. L. Hilyard., Secretary, 421. Chestnut Street, Philad.&lDtlia., Pa.
.. ..
~
~~
FEDERAL RESERVE BOARD
WASHINGTON
February 21, 1922.
X-333 7
SUBJECT:
·~'
~/ire
Transfers of Funds.
Dear Sir:
Upon recommenda-tion of the Federal· Reserve Leased Wire
Committee, the Federal Reserve.Board has adopted the follcwing rules
and regulations for the guidance of the Federal Reserve Benk~;
1.
Telegraphic transfers should be accepted from and paid
to meinber banks only. (However, as some of the Federal
Reserve Banks are under obligations to accept telegraphic
transfers from their non-member clearing banks, they may
for the present cor.tinue to make such transfers.)
2.
The descriptive data in telegrams transferring fur.ds
should be limited to nmae of the sending member bank;
name of its customer requestin& transfer, if shown,
name of member bank receiving credit,' and name of other
beneficiary, i f stated, for whose account credit is given.
3.
Descriptive data in wire advice of payment or nonpayment of collection items forwarded. between Federal
Reserve Banks should be confined to the collection
number., name of payer or place of payment, and amount.
4.
In addition to the usual mail advice to payee banks of
telegraphic transfers credited to t!'leir account, immediate advice by telephone or telegrai'h shoilld be given
by the Federal Reserve Bank receiving the transfer~ except in cases where credited ·oank has stated that vvj re
advice is unnecessary or where the nature of the transaction or the amount Lwolve:i indicates that the additional expense is not justified.
t
I f
'
Telegraphic transfers for conswM:ation on date of receipt
·should not l::e accepted by Federal Reserve Ba,;..ks later than
thirty (3::>) mh:..utes prior to t,he closing hour of the
Federal Reserve Bank to which transfer is made. Any transfers requested after that .hcJr may be male at the discretion of the Federal Reserve 3ank receiving credit.
6.
..
5.
Any loss resulting from neglig,ence on the part of the
Federal Reserve Syste.n in the transmission of telegrams
over leased wires through relay statior~s should be borne
by the sending Federal Reserve Bank, unless responsibility
Gan be definitely fixed u~on the Federal Reserve 3an~ to
which the transfer is made.
.. ...... ~:.J
r•·.r~
X- 3337
-2··
7•
The code should be used in cor:I~ection vv'ith all messages
invol vir.g the tra~1sf er and rayment of funds 1 and 1 in the
interest of economy 1 all ottsr telegrams should be coded
where the use of the code will apprecj.a'bly shorten the
message.
S.
Telegrams should be worded as concisely as possible 1 an4 all
unnecessary tele;raphin6 elLninated.
To enforce this each
bank should adopt some plan vvhereby any misuse of the leased
wires will be b::-ou;;ht to the attention of an officer whose
duty it will be to co~runicate with the oribi~ating depart.nent, or 1 in the case of incomin(:; i• ires 1 with the sending
off ice.
9.
Leased wires should not be used in tracil:,~ collection i terns
fornarded by a member bank in one district direct to a
Federal Reserve Bank of another district, proceeds of which
are to be credited to the Federal Reserve Bank of the district
in which the endorsin~ bar~ is located.
\1..._. .
'
t
r~
While the above rules a?·.:i ;·egulations are intended as a guide to tr.e
Federal neserve Barcks themselves 1 the follow-ing clauses are recommended for
unifor~ use by all Federal rteserve J~nks in a circular to member banks relating to wire transfer of funds;
1.
2.
.
"Telegraphic transfers will be accepted from an:i paid to
member banks only."
3.
'
"The Federal Reserve oank of
will use due care and
diligence in the transfer of fund& to the receiving Federal heserve Bank for credit to the account of 1 or payment to 1 the
payee bankJ out will r"ot be responsible for e~·rors or delays in
the transfer of such funds caused by circumstances beycnd its
control."
"In order that important messa.;es may not be delayed, rr:ember
banks are asked to co-operate with us by not makin6 request
for telegraphic transfers for small amountsJ or those which
can be made as well throu.;h the mails."
ll: addition a schedule should be included showing the closint; time for
receivin~ requests for transfers to be ~ade to other Federal Beserve 3anks.
Very truly yours 1
G o v e r n o r.
TO THE GOVEHNORS OF ALL FEDERAL RESERVE BANKS.
,_.
<"·'''.I
FEDERAL RESERVE BOARD
f· .
WASHINGTON
X-3339
February 23, 1922.
SUBJECT:
Expense Main Line, Leased Wire System, January, 1922.
Dear Sir:
Enclosed herewith you will find two mimeograpl:. statements, X-3339a and X-3339b, covering in detail operations of
the main line, Leased Wire System, during the month of January,
1922.
Please credit the amount payable by your bank in the
general account, Treasurer U. S., on your books., and issue
C/D Form 1, National Banks, for account of "Salaries and Expenses,
Federal Beserve Board, Special Fund", Leased Wire System, sending
duplicate C/D to Federal Reserve Board.
Very truly yours,
Fiscal Agent.
Enclosures.
TO GOVERNORS OF .ALL BANKS EXCEPT CHICftGO.
•
,.. ...... t .
·~·',
i'· ..
X-3339a
REPORT SHOWING CLASSIFICATION AND NUMBER OF WORDS
TRANSMITTED OVF.R MAIN LINE OF THE FEDERAL RESERVE
LEASED WIRE SYSTEM FOR THE MON'I'H OF JANUARY, 1922.
War
Treasury
Per cent of
Finance Corp.
Total Ball-k
Dept.
From
Total
Bank Business Business(*)
Business Business
----~-------------~---------------------------------------~--·------------Boston
141
44.. 896
40,101
}.6i
4,654
New York
10,443
190
183~ 758
173;125
15.58
Philadelphia
60.,234
. 5, 358
54,876
4.94
Cl.e'lfeland
6., 1388
83,. 031
474
90,393
7.. 47
Richmond
4; 874
91, 859
7.12
79.. 050
7J 935
Atlanta
81; 845
4, 896
7,174
93 .. 915
7-37
Chicago
144,143
137,130
12.34
7, 013
St. Louis
87,875
7.14
7, 654
79,278
943
Minneapolis
44,560
67,953
4, 029 19,364
4.01
Kansas City
121.,669
8.24
6,415
23,671
91 .. 583
Dallas
3, 312
1,007
83J878
7.12
79,059
San Francisco 167.294
166. 756
8. 86&
12.594
.J.5..c6
-
Total F. R.
Banks
Washington
1,110, 932
253.741
Grand Total
1, 364,673
Per cent of Total 33.85%
80.,908
105.463
67,489
9, 063
1,259i329
368,,?S'Z
186,391
_100.00
76,552
1,627,616
ll.45)b
Bank Business
Treasury Business
TOTAL
\
1,364,673 words or 87.98%
J,86,39l fl
" 12.02
1,551, o64
(
·FEDERPL RESERVE BOARD
WASHINGTON, D. C.
FEBRUARY 23 1 1922.
100.0<:1%
p
4. 70'/o
J
•
REPOnT OF
EXPENSE
MAIN LINE
FEDERAL HESEEVE LEPSED \V!RE SYSTEM J.ANU.ARY 1 1922.
X- 3339b
-------------------------------------------------------------------------------------------------------------Pro rata
Operators'
Salaries
Name of Bank
Boston
$
New York
250.00
Overti~e
$ -
Comp~nsation
Wire
Rental
Total
Expense
$ 115.00 $
$. 365.00
789.98
Poiladelphia
225.00
Cleveland
524,00
Richmond
300.00
Atlanta
240.00
Chicag,o
(#)5,015.31
St. Louis
300.00
Mieneapo1is
275.00
Kansas City
326.66
Dallas
170.00
San Francisco
Extra
Operators'
Share of
Total
Expense
789.98
225~00
524.00
300.00
240.00
5,027.31
563.00
275.00
328.16
170.00
395.00
12.00
2-Sii.OO
l. 50
395.00
$
74b.l8
3.,228.97
1, 023.62
1, 548.17
11475.63
1,52(.44
21'557.46
1, 479· 77
Credits
$
365.00
789.98
225.00
524.00
300.00
588.00
275.00
323.16
3~121.
.170.00
395.00
20
$ 383.18
2,438.99
790.32
1, 024.17
1,175.S3
240.00
1.267.44
51 02/ • _31 ( H )2,469. 83
631.03
l, 707.75
1., 475.63
Payable to
Federal
Reserve
Board
391.77
556.C8
113(9.59
1,305.63
2,726.20
Fed. Res. Board
Total
$ 13.50
$403,00 $16,oG6.07t25,293-52
( A) 4. ~ ks. 4o
(#) Includes salaries Wasni.ogton Operators
(&) Amount reimbursable to Chicago
.
"'20,725.12
$20,725.12 $9,227.45 $13,967.50
(&)2. 469.83
$11,497.67
~
{**)Credit,
(a) Includes $2, 546.58 rec~ived from Treasury Dept. ar.td $2, 010.29 from •iar Finance Corporation covering
business for mcnthe Gf Aug. and Dec., 1921 1 respectively; also $11.53 received from lessor account of
interruption in service during Dec.
FEDERAL RESEiWE BOARD
WASHINGTON1 D, C,
FEBRUARY 23 1
1922. ....
.
..
""'"'.
FEDERAL RESERVE TiOARD
G.OLD
Summary of transactions for ~~~~-=~-~~~~~
neriod. end.i
Federal
Balance last
Reserve
statement
T;ank of
Feb. lf, l922.
Withirawals
~~~~~-=r~
Eosto!i___
l'Te\., York
"Philaieh:hiD
Clevelani
Richnond
Atlanta
Chicago
St • 'Louis
1111!.nnea:polis
Kansas City
Dalhs
San Francisco·
Total
li
'27, 522,105.
102,629,.26.0..19
48, 075,336.. 44
511 cb], 225..89
31, 081 1 882.75
29,531~220.56
105,141,860.38
20~ 914# 914. 26
30,919,5o6.}0
-41J 073,203 .. 38
17., 430,380.74
41,265.,470.24
,
SETTLEMENT
2.
Gold
Deposits
- .. 00
79,000
722,340.00
l, 797 J 722.50
882,800.00
1,460,198-36.
941,993.11
920; 928.12
1,666,154.62
720,786.57
1, 000, ooo. 00
1,ooo,ooo.oo
1,ooo,ooo.oo
19,927.61
-
626,355~76
2,003,100.00
6oo.. oo
1~~ 002,1-!.oo .. oo
l, 000, ooo. 00
7.. ooo, ooo. 00
X-3340
Washington, D. C.
February 2 4 ! 1222.
FUND
( CONFIJ:!ENTI/1L)
1\ggregate
Aggregate
deposits ani
wi thdrawa1s
transfers from
and transfers
to Agent ts fund
1\gent 1s fund
Cf
722.,34o. on $
79#000.00
31,797,722.50
1, oco, ooc. 00
882J800.00
1,ooo,ooo.oo
1,460,198.36
1, ooo, 000. 00
941, 993-11
19,927.61
7, 920,928.12
1, 666,.154.62
2, 003,100.00
720,786.57
600.00
626,.355.76
7;002,400.00
8771557.32
11 000, 000. QQ
1., 130, 812.65
81204,500.00
1,124 565. 00
I
-
-
'fiR .ftNSFERS
----------------------------------Credits
Debits
$
- 000. 00 $
20, ooo.,
-
-
-
-
1, ooo, coo. 00
2,ooo,ooo.oo
1,ooo,ooo.oo
-
2, ooo, 000. 00
6, 000, ooo. 00
-
8, ooo, ooo. 00 .
- .
- 54~.71~366.7_9 It
-------------------------------------------------------------------------·----------------------------------------------------------------------..Summary of changes in ownerFederal
Balance in
Reserve
:Bank of
877,557.32
1,130, 812.65
1,122; 565.00
12, 87o, 214. o1 1$
Settlements from February 17, 1922 to February 23, 1922
inclusive.
fun4 at close
of business
Feb. 23, 1922.
---------------------------------------------------------------------------Net
Total
Total
Debits
89,98 ,123.51
330, oso, ~7. 72
. J.11, 366, 4. 44
102,733, o6s.oo
.lOj, 622, ~1. 20
Creiits
9, 3.;1; 1 • 3
356, 578, 829. 61
119; o64, 566. 92
89,564,459.66
105,301,968.76
44, 849,236.59
180, 920, 762. 08
83.,064,162.20
24, 874, 085. 69
65, 982, 761. 59
40,173, 728. 93
37,982,587.30
:Boston
New York
Philadel-phia
Cleveland
13_,l.6s~6os.42
Richmond.
)20.. 322 .. 44
tltlanta
)8, 429~ 3· 94
Chicago
3, 918, 942.58
184, 839.. 7o4. 66
St. T..ouis
7# 529, 689. 74
90,593,851.94
MinneaT'olis
22, 807, 583.31
7,688.,471.42
Kansas City
73, 671, 233. 01
Dallas
38,924,2l2·75
10,759,219.00
4 741,8 .30
San Francisco
. 'T'ota.l
(<t: 43,932,178.58 ttt_,237.,796,347.86 J$1,237,796.-347.86
~
Credits
, - 2,
<1:
26, 498, 651. 89
7,698,302.48
2,<b6,502.38
1,249,449.18
tt
43, 932,17.8_.58
f$
---------------------------------~-
Increase
o.
77,4o9,190.18
56,890,838.92
39; 438,419.. 11
31, 819,567.. 20
28., C49,492. 70
101,556,763.18
20,727,537.95
32,360,252. 92
471509,574.64
18,549,017.27
37,588,186.24
6,419,272.65
ship of gold by banks through
transfers and settlements.
-
11,168,608.42
-
679.677.56
6, 419,272.65
1, 918,942.58
1,529,689. 74
25,923,384 .. 72
-
2, di6,502.)8
311.,528.58
1, 249, 449.18
F F DE R A
t
Sumna:ry of transactions for -period ending_ February 23, 1922.
Gold
Gold
Feder·al
Falance last
Reserve
statement
V!i thdraWals
Agent at
Feb. 16, 1922.
Deposits
Poston
~raw
York
I$
1oo,ooo~.ooo
1¢
I
381,000,000
·-------R .'E S P: R Tf E
'Phile.iel~hia
125,. 389, 260
Cleveland
160, 000, 000
Richmond
Wi thirawals
for
transfers
to bank
310, 644., 500
St. Louie
Deposits
5,000,000
-
I$
I
I
10,000,000 j'l;
110,000,000
1
I
I
411,000,000
30,000,000
-
5,0oo.~ooo
10,000,000
5,000,000
66, 500, ooo·
1o.~ooo,ooo
315,644,500
1,000, 000
28,360,000
Dallas
11 0001 000
-
1,4s4,oco
San Francisco
l
Total
It
1,465,997,760
1,204,500
1,204,500
201.,825,000
f$
13,000,000
I*
22,0001 000
p
l 1 2o4,500
I$
37,000,000
160, ooo, 000
8, ooo, 000
7, 000,000
1, ooo, 000
120,389, 260
22,295,000
3,000,000
. 8, 200,000
Kansa.s City
30,000,000
3,000,000
65,300,000
Mi,rmeanol is
'I*
Ii
I
Washington, D. C.
February 24, 1222._,.
Ealanee at
close of
business
Feb. 2}, 1922 •
Total
Withdrawals
I
58,500,000
Chtcago
Is
( CONFIDENTU L
Total
Deposits
through
transfers
from bank
I
25,295,000
.Atlanta
5,000,000
10,000,000
F U N D
X-3340a
1
,~
fl G E N T S 1
l$
14,204,500 I'~
59 1 0001 000
l
'
1
I
t
li
66,300,000
8,200,000
28,360,000
1,484,000
. 200, 620, 500
1,510,793,260
·~
)
.
t
0r ..
t·
FEDFRPL RE S
~
-~
VE l 0
ft
RD
STJITEf>mJ•;T FOil. THE Pr\FSS
X- 3341
For release in J>'lorning Papers,
Fr~dar, ~arc~
3, 1922.
The fell o,, ing, is a revievv of seneral business and
financial conii tior:s throu6hout the several Federal
heserve Districts durin~ the month of February, as
contained in the forthcoming issue of the Federal
Reserve Bulletin.
''
Durin6 the past month
irr,prove:~.:ent
of conditions in
several basic industries has furnished a r.ore hopeful prospect
for the trade of the co,c.ine, :noLths.
This better outlook has in
some measure been offset by labor and other difficulties in tne textile industry r;hich have resulted in reduced activity ir, that
branch of business.
Fluctuations in the price of raw materials
have subjected the textile trade to still further difficulty, ,.hile
in that industry, as well as in others, the lack of forward orders
has made it difficult to plan policies far in advance.
Fairly
E:ood conditions are renorted in the shoe and leather industry, alI
I
though imr rovement has been laq:,ely conf irlod tci Nev; Eng_land.
iron and steel
It is to be
varyin~
noted~
In
opinions exist as to the situation and outlock.
however, that there has been distinct increase in
the activity or the rlants of the United States Steel Corporation as
well as some increase in the activity of independent ;nill s.
Iron
,~,..,.
•• _)
J
t
X- 3341
-2-
and steel prices have, hovvever, tended to decline, or at best to hold
their own, rather than to advance.
In the chemical industry business
activity has been given a severe setback as a result of uncertainty
as to the future.
In the nonferrous n;etals} especially cor ;·er} there
has been a distinct increase in rroduction >'iith the reopenine;. of mines
which have been shut do;vn for a long tirr.e past.
The net outcome of these changes has been to diminish the irregularity and uneveness noted in the movement of industry during 1921.
Textiles and allied lines which he.ve been far in advance of others are
losin& their relative i1iomentum.
The evenin;; tendency thus evidenced
by current readjustments is reflected in the fact that the Board's
price index remains
.,
'
unchan~ed
at 136.
The significance of this apparent
stability of the price situation is not disclosed until account is taken
of the fact that there have been noteworthy advances in prices of many
agricultural products during the
~onth.
The effect of these advances
would have been to raise the &eneral price index had they not been offset by
correspondin~
declines in other lines of industry.
Tbe readjust-
ment process, it would aprear} has now definitely reached the sta[e of
.
I
inter-industrial price revisior...
Tne advance iL value of agricultural
products has tended to create conditions materially facilitating both
the liquidation o£ loans at banks ar:d the rapidity of ,1.ove:Jent of
'!lroducts to market,
The mors satisfactory :T.arketing and price con-
ditions have not only extended to grain1 but have also included tobacco
and otter products.
Early crop reports from the southwestern grain
regions have not been altogether reassuring.
,.
'·
' J
f""'-,1"'!:-",
,.
''
X-3341
-3-
The long continued slackness of employment and past uncertainty
as to agricultural prices have produced an effect upon trade
activity~-
with the result that both wholesale and retail trade indexes are dis-
•
posed to show recession of buying in most parts of the country save
for seasonal activity in special lines 1 such as dry goods,
betterment of retail
dem~1d
AlthouJQ
has been reported in the farming districts 1
the effect of higher agricultural prices has not yet brought about
any considerable modification of conditions.
It should 1 however1 be
remembered in this ccLnectior., that the f ar;ner had already largely·
disposed of his last year's crop.
The volume of employment (another importaHt factor in influencin~;.,
derr,and for goods) shows but little modification, althou~ fib,ures
reported by the United States Euployment Service indicate a slieht
advance.
This co11di tion, however, holds good chiefly in the population
centers.
Strikes in the textile region of New EEc_;land as well as labor
troubles elsewhere have during the latter part
tended to
ag~ravate
o~,
the month of Fabruary
the unemployment situatior..
Continued improve!Tlent is noted in buildi:r"g operations.
As com-
pared with last year the volume of building is very much larger, January
'·
permits being more than double what they were a year aco•
This is re-
sulting in some increase in demand for steel and iron products as well
as for other materia+s.
It has also ircreased the demand for labor in
parts of the country where ti1e surplus of unemployed would othendse
have been more considerable.
()
,....., ... ,rJ
I
~
X-334l
\
-4-
f'
-~
Financially the month has shc.m cor:tinued reductions in th·::J
volume of credit required by the comnunity.
Portfolios both of re-
serve and member banks sho.v still further reduction1 while interest
rates have remained fairly stable at the levels already reacned.
,·
Foreign e%change has shown a decidedly stronger tendency, the hi£hest
levels for a long time past havinb been reached in sterling, francs~
and some. other European currencies.
Business failures are on a
materially higher level than in 1921, while the month of February,
as previously predicted by commercial agencies, also shows an increase
in commercial failures as contrasted with January.
~!CULTURE.
The condition of winter wheat has shown some im-
provement recently, as a result of snows and rains in the latter part
of January and the early part of February.
District No. 10 (Kansas
City) states that the Kansas wheat cror·, .except in the eastern haU of
the state, is in poorer condition than ha.:;; been repor~ed at "'~his saason
ir, many years.
Drought still prevails in large sections of Oklahoma ad
Colorado, but the deterioration of wheat in Nebraska has beer, checked by
recent snows.
No.
,
'r
7
Weather was favorable for the wheat crop in Districts
(Chicago) and No. 8 (St. Louis) up to the middle of February.
District No. 11 (Dallas) February rair1s have benefited
Texas wheat crop is reported to be far bel ow normal..
In
crop S 1 but t!1e
Vegetable and
truck crops of the Gulf Coast and the Rio Grande Valley have so far
escaped dan:age from killing freezes and generally promise fair yields.
District No~ 8 (St, Louis) reports that stocks of corn on the farms are
unusually large for this season, and that much corn is. being fed to
cattle and hogs.
"'-
I,
/"'""\,
-··-
:
._... ;
,..
X-3341
-~-'
COTTON.
The price of middlins-upland cotton at New Orleans
the third week of February 1 was
average.
\_.
In District No.
16.75
cents~
the same as the January
11 (Dallas) cold rainy weather has tern1
pore.rily hal ted the preparation of soil for the new crop, but has
been very beneficial in furnishing an abundant supply of subsoil
moisture.
Although freezing temperatures have frequently occurred
in the northern part of the District,. it is feared that the ccld waves
have not been sufficiently severs to insure v1ide-spread destruction
of boll weevils.
Heavy reduction in Texas wheat acreage may result
in an increased planting of cotton.
District No. 8 (St. Louis)
reports that demand for cotton is quiet, while District No. 5 (nichmond)
states that farmers continue to held a substantial portion of the last
crop on farms or in bonded warehouses.
United States amounted to
Exports of raw cotton frorr; the
475,910 bales in January} as compared with
639,825 bales in December.
TOBPCCO.
Se.les of leaf tobacco on the .narkets of Virginia and
North Carolina have becm limited.
,,lost of the markets i:j the bright
belt closed during February, and the dark markets expect to close
during March.
In spite of the large amount of low grade tobacco corr:ing
on the market as farmers olea" their barns, prices have been well sustained.
The ~rowers Oooperative Association has commenced o~eruticns
in the burley district 1 making advances to grov;ers as tobacco is
delivered to it.
reported by it.
Several large sales at quite sstisfactory prices are
In the vrestern dark district 1 the greater portion of
the tobacco has been delivered at very satisfactory prices.
i-llest of
the undelivered tobacco is of inferior grade, but is bringinG a fair price.
-6-
0 . -·- _..(
X-3341
' l
The cigar leaf market in District No. 3 (Philadelphia) continues
dull, and in all but a few sections, the largest part of the 1921
crop is still in the growers', hands.
While the quality in gene.ral
is poor, prices to date have been lower than in recent years.
Demand
for cigars is reportej light in J?istrict No. 3 {Philadelphia) and
)'
production is still being curtailed.
January, 1922, sales were no
greater than January, 1921 1 which in tu.rn was the poorest month in
years.
A slight improvement is reported since_ the first of February.
Only a few makers of pupular brands are producing cigars in any appreciable volume.
FRUIT. Prices of citrus fruit, both in California and-Florida,
rose ·rapidly in the latter part of January, as a result of the severe
damage t_o the California crops from frost.
OffiCiats of the California
Fruit Growers Exchange estimate that 50 per cent of the orange crop
and 33-1/3 per cent of the lemon crop have been destroyed by frosts
and.winds.
Oranges suffered more severely than lemons, because lemons
are planted in more favored situations and are more
by smudge-fires and heating plants.
gener~.ly
protected
Shipments of oranges ·and lemons
from California from November 1, 1921, to January 29, 1922, amounted
to 10,439 cars, an increase of about 2 per cent over the shipments ir.
the corresponding period of the previous crop year.
District No.
According to
6 {Atlanta), extremely cold weather at distributing
points has hindered the moveme.ot of citrus fruit from Florida, but
during this season to date, shipments of orant;es have be.en approximately
as heavy, and shipments of grapefruit have been 12 par cent heavier
than in the corresponding weeks of the last crop year.
It is estimated
that only 45 per cent of the grapefruit crop has been shipped from
' l
-7-
X-3341
Florida1 and over 6J500 carloads are said to be still on the trees.
Unsettled and cold weather during January is reported to have
caused some damage to fruit in Michigan.
In New Mexico there was
some premature blossoming of apricot trees in January 1 but District
No. 10 (Kansas City) reports that subsequent loss from frosts was
negligible.
The southern strawberry crop was in good condition at
the end of January.
GRAIN
~OVEMENTS.
The volume of grain movements showed a
further slight advance during January, due to the exceedingly heavy
marketing of corn.
Receipts of corn at Chicago amounted to 2S1 568JOCO
bushels in January, as compared'with 13,288,000 bushels in December,
and correspondingly large increases in receipts were recorded at
Minneapolis, Omaha, and St. Louis.
January receipts of wheat showed
some curtailment at most reporting centers, although slight increases
were recorded at St. Louis and
Wichita~
.Receipts of rye also declined,
but receipts of oats and barley registered moderate increases.
Stocks
of grain at 11 interior centers declined somewhat during January,
although tnere was some increase in stocks of rye and barley.
The
most general reduction occurred in the case of wheat stocks, which
declined at all important centers except Duluth.
District No. 12 (San
Francisco) reports that total exports of wheat and carley from Pacific
Coast ports during the present cereal year are
during the same period of the previous saason.
in the case of wheat, to
47~46S,2ll"bushels
considera'~ly
higher than
These exports
amounted~
this year) as compared with
. -·'
X-3341
-8FLOUR.
January production of flour showed an increase over
December in certain Districts, but in othtH s the reverse was true.
In District No. 9 (Minneapolis) the January output reported was
1, 935,754 barrels, as compared with 1 1 754,654 barrels in December 1
,,
\
.
while in District No. 8 (St. Louis) the respective figures for 11
millers were 333,966 barrels ar.d 24o,600 barrels.
In District No~
'
7 (Chicago), however, January production of 44 millers was 289,478
barrels, a decrease of 3.3 per cent from the December figure, while
in District No. 10 (Kansas City) 1,398,989 barrels were produced in
January.
Output in District No. 12 (San Francisco) decreased from
775,139 barrels reported
by
Gl mills in December to 711,292 barrels
reported by 67 mills in January.
1
A decidedly better feeling per-
vaded the trade in District No. 6 (St. Louis), accompanied by stronger
demand for both home consumption and export.
Retailers and ultimate
consumers show a disposition to replenish stocks.
In District No. 10
(Kansas City), demand was somewhat slow early in January, most of the
orders being for quick sh:pment.
The incra&se in wheat prices, and the
accompanying increase in flour, has stimulated purchasing, although,
states District No. 10 (Kansas City) "not to the extent of creating
any extraordinary demands 11 •
LIVE STOCK.
Movement of each of the principal classes of live sccc.h:
to market during January was heavi.er than in December 1 although in all
cases less than in January 1 1921.
Receipts of cattle and calves at 15
western markets during January were 1,128, 020 head 1 as cornpared with
975,330 head during December and
1 1 1~1,814
head during January, 1321.
In the case of hogs, receipts increased from 2,673,947 head during
De cerr1ber to 2, 332 1 551 head during Jar"uary) as co:upared with 3, 339,419
-9-
'I.
nead durir:g January, 1921.
X-3341
H.eceipts of sheep during January were 1,101}679
head, as compared with 974,034 nead. duri.r-'-g December and 1,112, 024 head during
January, 1921.
During January there was more activity in the purchase of
stocker and feeder cattle, calves and sheap in District Nc. 10 (Kansas City)
than ha1 been obser.ved for .many months.
Such purcnassrs in quite a number
of instances oucbid buyers for the packers.
i:
The live stock in the District
in general is rel'ortad to be ir1 a very fa·.rorable position. In Districts Nos.
11 (Dallas) and 12 (San Francisco) 1 howl3ver 1 conditions have been unfavorable.
Winter rains in District No. 11 (Dallas) hi:we not been sufficient to relieve
the drought from which ranges have been suffering for several m.o..ths 1 while
in District No. 12 (San Francisco) there.was unusually cold weather throughout
January.
Twenty-three
represe,~tative
packers
re~or-t
an increase of 1. 8 per cent
in January sales (measured· in doll.ars) over those for December, but a decline
of .17.8 per cent from those for January, lS'2L
Reports from District No. 7
(Chicago) generally state that domastic trade in fresh meats was slow during
the latter part of January and early February, although J.omestic trade in
cured meats and lard was good.
A marked revival took place 'in ti1e demand for
lard and provisions in the United Kingdom and on the continent; and prices
advanced.
~.
Production of bituminous coal showed an increase during january.
The output for the month was 37,600,000 tons, as compared with the Decertiber
production of 30,975,000 tcns 1 and a production in January, 1921, of 4q 270,000
.
tons.
\iith the exception of October, the figures for January 1 1922, are the
largest since January a year ago.
The preser.t production is large enough to
meet current requirements f cr consumption and export and at the same time add
to the reserve in storage.
Due to the expectation of a strike of bi tumino:..ts
r ___
-10miners on April lst, there has baen
X-3341
ar;.
up of reserves during the last month.
improved demand and a building
This has been especially notice-
able with railroads and public utilities, - electric utility plants
having
51
days' suprly on hand and coal gas plants
January 1st.
59
days' supply on
Other classes of consumers hold from four to eight weeks
1
supuly •. Stocks throL:ghout the country on January 1 amounted to 47 1 5001000
tons in addition to 7,151,000 tons on the Upper Lake docks.
Production of anthracite coal increased from 5,984,000 tons in
December to 6, 258,000 tons in January, which is 15 per cent below the
7, 410,000 tons production for January, 1921.
District No. 3 (Philadelphia)
reports that continued cold weather during the past month has resulted in
only a slight improvement in the domestic demand for prepared sizes of
anthracite.
All purchasing is of a hand-to-mouth nature and orders are
for only small lots 1 as operators and dealers alike are umv1lling to
accumulate stocks b'efore the end of the present coal year.
Domestic
consumers are unwilling to purcbase at the present price as their fuel
needs vvill lessen considerably after .April~ ·~and consumers of steem sizes
are also reluctant to stock at the present price, since they are awnre
oi
the existence of heavy supnlies of stear coal in the yards of dealers
and operators.
In an endeavor to reduce their holdings, independent
operators have reduced their prices, even on some of the popular sizes,
to the companies' level, and retail dealers have sbaded existing prices as
much as 50 cents or $1 a ton.
The production of the bee-hive coke for
January was 496,000 tons as compared with 514,000 tons in December and
1,137,000 tons in January, 1921, while January production of by-product
coke was 1,903,000 tons as compared with 1,360,000 tons in December and
•.
2, 278, 000 tons in January a year ago.
t
- 11 I 0
E~T~2~~ft:
Reports from District No. 10 (Kansas C~ty) state that the
number of oil wells completed j_n January of
t~is
y9ar was less +:l·.an one-
half the total completed du:i:'ing .Jar>uary, 1921, b·..tt the quality of the wells
was sueb as to brin£: the new production to within 3 per cent of the total
new production for
J~~ary,
1921.
Cn1de oil production for Kansas, Okla-
homa and ~yo~ing runounted to approximately 14,369,000 barrels, as compared
with 12,:}.5S,OOO barrels in Jcmuary, 1921.
"'ProC.uc~ion
· ·
'n • .:..J.s
l n nl· str; c·~ No • 11 , .. a , - )
•'\..
130 '\. . ~rrol,..
~
' 1ed
~
'~,',)~a
~ \ "~ (
l.•·.',).!.'··j
VC.
of crude petroleum
.:>
d-,·e~ ..., C'
W.l.J.Lt;:-
T~«.v·a···
uc..:J.o\.> !.J.
breaking all previous records and registering an increase of 1,496,380
over
barrels
th~ necember production figure.
In that District 212 new
producin~ wells, with an initial flow of
259,188 birrels, were completed
in January e.s compared with 203 producers with an initial flow of 328,984
·•
barrels in necember.
Average daily production of petroleum in California
during January \was 315,755 barrels, a decrease of 9, 723 barrels a day,
compared with December, and of 15,.431 barrels a day compared with January
a year ago.
Fifty-two new producing wells with an initial daily production
of 11,210 barrels were completed during Januar,y.
Stored stocks at the end
of the month increased to 36,·184, 527 barrels, an increase of 1, 162,615
barrels over the amount stored during December.
Prices for crude oil
showed very little change during the month of January, but are hi>?her
than in January, 1921, at which time crude oil prices were showing rap5.d
declines.
IFON ANT'l STE~t:
.~f~~r
the ext:rer:;e cln. llness of Dec~r~h~r, Jo:mu.er.y
steel ingot production showed an increase to 1,593,432 tons from the figure
of 1,427,093 tons during the preceding month, but pig iron production
showed a slight decrease, from 1,649,086 tons in December to 1.638,697 tons
in January.
The unfilled orders of the United States Steel Corporation at
••
J
- 12 -
X-3341
the close of the month likewise showed a small dacrease, from 4,268,414
tons to 4,241,678 tons.
conditions
in-February.
Divergent reports E:re, however, heard as to
On the one hand the fact that increased dew3nd
since the middle of January has served to carry operations back to the
\
level obtained in November is pointed to.
Furtherrr.ore, sorrs important
companies having a diversified output have recently been able to run at·
better than 60 per cent of their capacity.
On the other hand, while it is
acknowledged that many firms report an increasing volutre of inquiries, and
in some instances a larger number of orders, it is believed that the
increase has been but slight.
It is genE?rally acknowledged that at least· a
considerable part of the present demand is for small quantities and for
immediate delivery.
A
large part has been for the replenishment of exhausted.
lines, revealed when inventories were completed in January.
More active
demand by cement and oil interests, as well as for export, is reported.
There have been some sales of both railroad equipment and structural steel,
lroth inquiries and orders being believed 'by some to afford decided· encourage·ment, while others regard them as "disappoltntingly small".
All in all, it
is apparent that conflicting tendencies are still in evidence and that no
marked terdency toward ,either further progress or recession has yet
a~eared.
This is r'3flected by the fact that :prices for 'both pig iron and finished stef....
products in general continue weak.
AUTOM013ILES.:,
Some improvement in the automobile industry in January
is reported, although when compared with a year ago. production is considerably less.
C~anies re~orting
as against 52,026 in December.
.
)
produced 54,086 passenger cars in January,
These companies prodv.ced 73.6 per cent of
X-3341
- 13 the total output reported for t1ecember.
rvianufac turers report that the
results of the New York and Chicago automobile shows, both in at tend.ance
tha~
and interest displayed by the puolic, were better
stated by District No.
4 (Cleveland) that the public is
confjJl.ence after the recent -pdce reCll.JCt50'"', end
to come in.
expected.
+,:~at
It is
show~ng more
orde:r"J e>l"e '··er,.;:minz
Output of reporting truck manufacturers decreased from 6,318
trucks in December to 5,837 in January.
These manufacturers produced
76.1 per cent of the total output reported for December.
l:!QN!l'EFROUS MH;TAT,S:
market during February.
There was little change in the nonferrous metal
The price of copper (New York, net refinery) was
12.875 cents to 13.0 cents -o~r ::oound on February 15~2 as compared with
13.25 cents per -pound on February 1, while the price of lead l':as been
practlcally stabilized at
4.70
cents per ?ound since last September.
The zinc market has been exceptionally quiet, the price rerraining around
4.50
cents.
Copper
production in January arr.ounted to
25,848,284
pounds
in comparison with a production of 18,595,182 pounds in December.
Some
of the more important copper companies have resurr.ed operations in spite of
the reduction in the price of the metal.
reports January shipments of
28,~31
ristrict No. 10 ("Kansas City)
tons of zinc blende as campar2d with
30,096 tons for January, 1921, average ·-prices being $26.44 and
resp"3cti vely.
~27.ll,
Production of zinc show·ed a further increase, amountinf:; to
23,706 tons in January as compared with 22,013 tons in December, but was
still less than the amount produced in January, 1921, •.>vhich totaled
25,916 tons.
Thera was a further slight reduction in the amount of zinc
on hand, stocks at the end of January ,"'Jriour:.ting to
with 66,608 tons at the end of Decembe~.
65,678
tons as compared
District No. 10 (Ransas City)
- 14 -
X-3341
reports that the price of lead ore was very steady throughout the month
of
January, the
prevailin~
price being $60.00 per ton every week.
stocks at the end of the month show3d 72,000 tons of zinc
Ore
blende aa
against 50,000 tons for the same d?.te in 1921, and of 600 tons of lead
ore as against 500 tons on the
corres~onding
date in 1921.
District
No. 12 (San Francisco) states that reports received from 14 of the largest
in that District show a decreased nroduction of gold, silver and
min~s
lead for December as compar8d
COTTON T!i:VT!TJES:
~~ith
the previous month.
There has 'besn a subsidence of activity in the
cotton goods mills during recent weeks, although the consUIIIPtion ·or·
cotton in January as reported by the Bureau of the Census rose to
526,552 bales as compared with 511,800 bales in December.
The continued
fluctuations in the price of raw cotton have been a serious hinderance to
the placing of forward orders, and the extensive strikes in New England
mills following announced wage reductions have added to the already
existing uncertainties.
During January, however, the rate of the activity
of the New EnglarA cotton industry was well maintained and even showed a
slight increase..
Goods mills in District No. 3 (Philadelphia) are
operating at about 70 per cent of capacity with orders booked sufficient
)
'
.
to enable them to continue running at that rate for about six to eight
weeks.
Very little manufacturing is being done for stock.
first part of February, the yarn market in
was reported to be exceedingly dull.
~istrict
Thl.ring the.
No. 3 (?.hiladelphia)
Orders were in small lots for
irnr,ediate delivery and buying was confined chiefly to the knitting trade.
Yarn mills in the District were operating at 65
..
p~r
about 75 per cent of orders being filled from stock.
cent of ca.pacity with
District No. 5
X-3341
- 15 -
.~
. . . .,, r':
,_
(Richreond) says that the mills in that section "continued to run on
approximately full time in an effort to get the cost of production as low
as po;;siole, but orders
of stock has resulted".
bc.i.~ . . g
On
far less than the
O'l.i.~l:Jut,
son.t:: accua;ulation
account of the unwillingness of buyers to
place forward orders, many mills were beginning to curtail their operating
time.
Cotton cloth manufacturers in
~istrict
No.
6 (4tlanta) have also
felt the unfavorable effects of the uncertain markets for raw cotton.
In
the case of the goods mills, demand decreased during January and a number
of the mills reported that they were
conditions for future delivery".
~able
to secure orders under present
Statistics based on the returns from
4o r~presentative goods mills in the District showed a reduction in the
yardage output of clothing during January of 1.7 per cent as compared with
December but an increase of
Shipments increased
39.1 per cent as compard with a year ago.
3.4 per cent during the
~~nth
and 29~4 per cent as compared with January, 1921.
as compared with December
6.8 per cent greater than at tl:e end of the preceding month and
cent above those on hand a year ago,
~were
Orders an hand
'8.2 per
Although yarn buyers were also said
to be purchasing only for lmrr::"l::Uate n':leds the
re"?c~ts
39
recei-o;red from
representative yarn mills in District No. 6 (Ptlanta) showed a great
increase in activity during January.
compared with December and was
.I •
Production rose
90.6 per cent ·
Yarn shipments increased 2.8 per cent as
per cent as compared with January,
month were
17.9 per cent as
greater than a year ago .
co~ared
with
Decen~er
and
108.1
1921. Orders on hand at the end of the
15.9 -per cent larger than at the end of December and 20,5 per
cent larger than a year ago.
It is st-£,ted that the demand for low grade
yarns appears to be weak. consumers showing preference for the better grades.
X-3341
- 16 TOOLEN TEXTILES:
Activity in woolen textiles has shown a slight
recession during the past month, as is evident from the statistics of
active and idle machinery and percentages of idle hours reported by the
Bureau of Census.
in all cases
The percentages of idle looms to total reported rose
exce~t
in that of carpet and rug looms.
For looms wider
than 50" reed space, the percentage of idle machinery on February 1, was
34.3 as compared with 30.3 at the beginning of January. . The corresponding
perc.,ntages for looms 50" reed space or less were 27.2 and 21.2 respectively .
On the other hand, there was a reduction in the percentage of idle carpet
and rug looms from 26.2 to 22. 4, (February 1).
The percentage of idle
woolen spindles rose from 25.1 to 27, and for worsted spindles from 13
to 14.3.
Percentage of idle hours to totals reported were also greater
in the case of weaving machinery e*cepting carpet and rug looms, the figures
for looms wider than 50n reed space being 35.2 per cent on February 1, as
compared with 32.9 ner cent at the beginninQ of January.
The corresponding
figures for looms 50" reed space or less were 32 per cent and 27.8 ?er cent.
The
percent~ge
of idle hours for carpet and rug looms, however, was reduced
to 23.9, as compared with 29.7 for the preceding month.
idle spirdle hours remained
of woolen
spindl~s,
~ractically
Percentages of
unchanged, falling in the case
from 25.6 at the beginning of January to 25.4 on
February 1, while in the case of worsted spindles they rose from 13.3 at
the beginning of January to 13-9 on February 1.
District No. 1 (Boston) reports woolen and worsted machinery to be
"moderately active" although not operating at as high a rate as during the
past two or
thr~e
months.
Orders taFen at the recent opening sales of the
mills were, generally speaking, below expectations.
In District No. 3
- 17(P"niladelphia) production of wo:Jlen
~mel
worsted cloth increased
sligL~ly
during the month and reporting mills averaged about 75 per cent of operating
capacity.
However, orders on hand \rere not in most cases sufficient to
make possible the maintenance of this rate of production for more than 30
';
days.
In the yarn market, Tiistrict No. 3 (Philadelphia) reports a
falling off in the demand for knitting yarns but there was a slight
improvement in the call for weaving yarns,· although the market continues
to be very limited.
Carpet yarns, however, were in active demand.
Operations of yarn mills in the District averaged about 80 per cent of
capacity and it was stated that most spinners could continue at that rate
for two or three months on the basis of orders on hand.
In some cases,
departments were being operated at night and a majority of the mills were
e~loying
a full
force of men.
The market for raw wool continues to remain firm although a lessening
of the volume of operations has been noticeable since the beginning of
February according to the report from !'lis.trict No. 1 (Boston).
prices in the. Boston
mar~et.
Raw wool
advanced. on the a'?'erage nearly 50 per cent to
the beginning of February as compared with fall quotations.
No. 12 (San Francisco) reports that at the
is held by growers in that District.
pre~ent
District
time little or no wool
Between 75 and 80 per cent of the
1921 wool clip and carry-over was sold between June 1 and November 1, 1921,
at prices ranging from 9 cents to 20 cents per pound according to the grade
of wool and locality Where grow.n.
from
~ool
buyers are now said to be offering
17 cents to 33 cents per pound for various small holdings still
the growers• hands.
amounted to
in
Raw wool consumption during the month of January
61,192,000 pounds.
r......,. ····
1~
;_)
- 18 -
--CLOTHING:
Clothing sales in Districts No. 2 (New York) and No. 8
(St. Louis) showed very slight
December.
2.3
chan~s
in January as compared with
In the former District there was a negligible increase of
per cent in sales for 10
re~orting
firms while in the latter there
was a slight recession in the volume of sales of
J
both Districts
sal~s
District No. 2
(N~N
7
reporting
firms~
as compared with a year ago showed reductions.
York) this drop amounted to 22.8 per cent.
received from six wholesale manufacturers of
District No.
23
(Chic~go)
men~s
In
In
Returns
clothing located in
showed that the volume of orders for spring
received to date was 25.8 per cent ah.ead of orders received fo-r the spring
sAason last year.
two seasons.
The comparison is for the sarr:e number of days during the
The production increased slightly during the month, the
number of suits made being
5.4 per cent greater than during December and
64.1 per cent in excess of production for January, 1921. Shipments were
327 ·9 per cent greater than
January a year ago.
in December and
58.9 per cent greater than in
The reports received from 10 tailor-to-the-trade
showed a slowing down in activity, as the number of suits made was 36.5
per cent below that of the preceding month, although 11.4 per cent
than a year ago.
greate~
Orders received during the month were 30 per cent below
December figures but
14.5 per cent above those for Januax·y a year ago.
Shipments declined 36.5 per cent from the December totals, but increased
11
~er
cent over last year •
..,
J
- 19 -
highly unsatisfactory COl'ldi tion, due
ir~
considerable :part to the
l~nc~rtain
ties growing out of the speculative rise in the prices of raw silk in the
Japanese markets.
'
Buyers, in consequence, are unwilling to make forward
commitments on the basis of present costs of production, and the few orders
that are being placed are chiefly for immediate delivery.
District No. 3
('PhiJ.adel~hia) in
The situation in
the case of mills manufacturing silk goods,
is bett':!r than might be ·expected, considering these disturbing factors,
as the average rate of operation of renorting firms is about 70 per cent
of capacity.
A number of mills, as a matter of fact,
are operating at full
capacity but in all cases activity is based on orders received some time
ago.
.r •
The demard for silk yarns has fallen off to a certain extent and the
cessation of
b~ving
by hosiery manufacturers has been an unfavorable factor,
but nevertheless, yar11 rrmmfacturers in Tlistrict No, 3 ('Philadelphia•) are
opArating at "an almost normal 11 rate for this season of the year.
how:::;ve:.. engageJ. en ordel's
mills
~~c::n dU1·i~1g
pr"lvious
mo.:1~hs.
They are,
Ai. thougt1 a few
are running at full capacity with enough business to il'lsure capacity
operation for about six weeks , reporting establishments are
a~eraging
only
60 per cent of capacity and on the basis of present orders can not continue
at that rate more than two weeks.
Latest reports from Paterson and North
Hudson, February 11, show a very low percentage of activity, as only
3.653
looms out of a total of 15.000 reporting were operating in Paterson and the
p~rcentage
of operating loom hours to total available was only 23.02 per
cent, a reduction from the figure of 24.13 per cent reported two weeks ago.
In North ?Udson, the percentage of operating loom hours to total
re~orted
was 57.48 per cent as com:pared with 58.8 per cent on January 28.
Active
looms amounted to 2,456 out of a total of
4.179,
- 20 ROSIE~
Reports from 33 hosiery firms in District No. 3 (Philadelphia)
show a large incrPase in orders booked during January.
In the case of those
reporting firrrs which sell to the wholesale trade, orders booked
during
the month increased 55.5 per cent as compared with December while in the
case of the firms selling to the retail trade the increase was 181.9 p8r cent.
Unfilled orders on hand January first were 1.9 per cent greater than during
the preceding month in the case of firms
selling to the wholesale trade
and 33 per cent larger in the case of firms selling to the retail trade.
Product
manufactu~d
during the month rose for both classes of firms, the
respective nercentages being 0.4 and 13.
Shipments in the case of firms
SAlling to the wholesale trade advanced 11.7 per cent and in the case of
firms selling to the retail trade dropped 24.7 per cent.
Tl'w
report from
District No. 3 (Philadelphis) says that "statements received regarding the
amount of business being done are very conflicting and it is agreed that
difficulties are rr;et with, due to the fact that the cost of mate:cials has
increased. while there is difficulty in placing orders at any advance in
prices over those narrad earlier in the season.
During the month there was
a slight decline in the price of silk and cotton yarns but not sufficient
'
'
to enable manufacturers to make any concessions to buyers".
District No.
6
(Atlanta) reports that there is little change i:n the activity of the cotton
,,_,•...___
\•
___,,----;---.,..---·r-----~/.-
·-.,/
hosiery mills in that
~~··-·-
section
Orders hooked during the
month were,
however, considerably largc:;r than in Decemb 2r and about the same as reported
for January of the preceding year.
X-3341.
- 21 ~ERW.EAR:
In January, 1922, reports were received from 55 mills
producing underwear, as compared with
1921.
49
in December, and
61 in January,
Actual production during the past twelve months shows material
~rogress.
A
year ago the
~reduction
of 61 reporting mills was only
148,023 dozens, or 16.4 p~r cent of norn~l, while the most recent figures
from 55 mills place ac ~,~-:-~ production at 6lLO, 489 dozens, or 79.1 ';?Cr cert
4'
of normal.
In December the production of
49
mills stood at 77.0 per cent
of normal.
The greater part of the January 1922 production was along the line of
summer underwear, which amounted to 347,977 dozens or 95.3 per cent of normal,
while the production of winter garments amounted to 292,512 dozens or 65.8
',.
.
p~r
cent of normal.
Comparative reports received from 34 mills show marked improvement for
the month of January as compared with the December returns from the Slimle
mills.
Production tose from 398,338 dozens in December to
January, a gain of
~17,051
dozens in
4.7 per cent. Unfilled orders fell slightly from
1,228,611 dozens on December 13 to 1,175,377 dozens January 14, a decrease
of 4.3 per cent.
The most striking gains are seen in new orders received and
shipments during the month.
The former rose from 271,764 dozens in December
~o 481,270 in January, an increase of 77.1 per cent, while 524,007 dozens
were shipped during January as compared with 320,126 dozens in Der.ember,
a gain of 63.7 per cent.
At the sarr.e time cancellations fell off 36 per
cent from 10,850 dozens in December to 6,94o do~ens in January.
Forty mills with a normal production of 635,149 dozens, reported an
actual production of 505,242 do~ens during January with unfilled orders on
hand February 1, amounting to 1:531,205 dozens, the 'balance of orders having
increased 18.2 per cent since January 1. :new Orders arnouuted to 722,616
dozens or 11~. 2 per cent of normal production, while shipments were 78.7
p~r cent of normal production.
Cancellations were slight, being only
1.1 p~r cent of normal production.
X-3341
SHOES
A~~D
LE PTHER.
r,, . ·.
i~u
22 -
j
~
~~J
{..
Demand for hides and skins continued to be ver.y dull during the
last week in January and the first three weeks in February, and prices of
packer hides at Chicago yltelded somewhat in the week ending February 18th.
District No.
7
(Chicago) reports 1 howevGr, t h at more interest has been shown
in country and specialty hides than in the uacker class.
Sales of green
calf and kip skins throughout the United States were 105 per cent greater
in J~muary than in December.
The curtailment made several weeks ago by
most of the tanners in the number of hides put into process will not be
felt in the finished leather market for severe.l months.
District No. 3
{Pbiladelphia) states that sales of leather are not large but orders are
being received steadily.
Sales ·of belting in District No~
7
(Chicago)
were greater in J~nuary than in either December or :!fenuary, 1921, but
belting prices advanced.
Demand for shoe leathers bas been
restricte~
largely to special tics, such as patent, grey sue1e, smoke1 elk skins, ani
veals.
January se.les in the United States were 124 per cent larger than
those of December,
due to a heavy increase in demand in the Naddle West.
Shoe manufacturing showed an
cncour~ging
increase in actiVity
during January, except in District No. 8 (St. Louis).
Reports from eight
manufacturers in District No. l (Boston) indicate that January production
was 12 per cent greater than thet of Decerober and ll.J :per cent gree.ter than
thl'lt in Jenu?ry. 1921.
2 :per cent in shipments
Six of these
~d
a iecrease of
January in comparison with December.
trict No.
m~nufacturers
7
showed an increase of
per cent in new
o~lers
for
Forty-five reporting firms in Dis-
3 (Philadelphia) show increases of 15 T-er cent in -production, 14
per cent in
shipments~
18 per cent in new orders, 8.5 per cent in stocks •
and 5 :per cent in number of operatives -:luring Janue.ry, while the volume of
unfilled criers was re:luce:'l.
~bout
5 per cent ..
Shoe manufacturers in
•
)
- 23 -
X-3341
that District are runnit.J.g their fectories at a higher T:'e:>:-cents.g;.; of
capacity than at any time since last spring, although prices still
continue to decline.
In the high grade factories specialties pre-
dominate, varying from strap sli-:9pers to sport shoes.
28 concerns in District No.
Reports from
7 (Chicago) show that production increased
1 per cent, shipments 4 per ~ent, and stocks 16 r.er cent during the
month of J anu ery.
Retail merchants are reported to be buying only in
small q_uantities and low t:riced shoes have the best demand.
Factory
operation in District No. 8 (st. Louis) ranged from 45 to 100 per cent
of capacity, with lower production confined chiefly to interests
specializing in expensive footwear.
January sales of 11 reporting
manufacturers in thst District showed increaseu
ranging from
te
to 140
per cent in number of paits over January, 1921, but were slightly smaller
than in December, 1921.
:, 'l;~
1~~-- •C)
' ..._,
- 24 LUMT'ER: The lumber si tua.tion shows a. slight improvement.
The
close of the inventory -pe.riod has bcnefi tei the inius try by ro1 in
creased demand, but the increase
~~s
fallen short of expectations.
General coniitions in the lumber in"Lustry of District No~ 12 (San
Francisco) improved during January, which was evidence·i by an in:t
crease in ·.:-reduction, shi-pments and orders, both a.s comparel with
December, 1921, and with
J~nuary
during the four weeks ending
Proiuction of lurnb;::r
a. year ago.
J~nu~ry
25, accorling to reports re-
ceived from three lumber associations, totaled 327,624,000 feet
compared with 264,544,000 feet in the ~receding four weeks, ~increase of 23.7 per cent during the month.
Compared with January,
1921, when 152,110,000 feet \vere cut, there was an increase of
175,514,000 feet, or 115.3 per cent.
Present cut is approximately
80 per cent of normal rroduction for the rerorting mills·
Orders
received during the month tota1ei 343,565,000 feet compared with
270,724,000 feet in December and 17S,614,0CO feet in Jgnuary a year
ago.
~nd
The January orders exceeie'i the
J~nu?.ry
cut bv 4.8 per cent
the shipments were 5-3 per cent above the actual rroiuction,
continuing the reduction in stocks which has been in ~rofress since
last November.
approxim~tely
Logging rro,iuction d.uring January wa.s repol·ted to be
50 per cent of normal.
Severe weather conditions h&ve
foreed m~y camps to suspen::l operations for the "ast three months·
District No. 6 (.Atlanta.) reports that although winter weather has
interfered somewhat with mill ani logring operations, there hes been
some improvement in the industry, as shown by an increase both in
- 25 orders and pro:luction over the precei.ing month.
February 3rc1. of the
75 reporting mills of the Southern Pine Association
57 reported full time
full time and
Dece~ber.
41
and. only
4 shut down, corrpared with 6 operating
shut down out of the
76
reporting for the last week in
Production since January 1st has been about 81 per cent of
District No. 11 (Dallas) reports a ~rod.uction of
nonnal.
for
23
For the week ending
mills during January as comrared with
in Decerrber.
95,954,972
85,572,937 feet
feet for
45
mills
There has been a sharp decline of shipments corr.bined with
an increase in new orders, making the unfilled orders of
41
mills on
Janu8ry 31st, 44,667,936 feet against a total of 39,230,622 feet for 45
mills on December 31st.
The demand for
up::-a~
gr,.,des of lumber has been
very weak.
Lumber sales at retoil in District No.
9
(Minneapolis) declined
25 per cent between December ani January, but were larger than in January
a. year ago.
Stocks, while lower than a ye~r ago, were larger at the end
of January than at the end of December.
On the other hand the number of
board feet ordered during January, 1922 1 nearly doubled that of January
a year ego, and shipments during J~nuary were more than double those of
a. year ago.
Production of reporting mills in January was 4,536.322
board feet as compared with
1,803.114
boari feet in Decerrber.
In
District No. l3 (Stw Louis) there has been a declining market for westcoast lumber, moderate red.uction of stocks, reggei prices, and. a, somewhat lower selling basis for hardwoods.
South::;rn pine, bowc:ver, has been
making headway 1 ani with a gradually• increasing demand has apparently
strengthened its rrice position since the new
ye~r-
- 26 -
'
·-
:'·
- ....
'BUilDING: Iluildinty penni ts issued in 166 selected cities rea~hed. a
total value of $138,631,902 during January is compared with $ll.~O,}B2,4C5
In seven of the 12
during December and. $61,522,867 during January, 1921.
Federal Reserve Districts- No. 1 (Tioston), No.3 (Philadelphia), No. 5
(Richmond) 1 No. 6 (.Atlanta)
1
No. 7 (Chicago), No. 11 (Dallas), end No. 12
)
(San Francisco) - the value of renni ts issued was greater in January than
in December.
These increases varied in size from 3 per cent in District
No.7 (Chicago) to 64 per cent in District No. 11 (Dallas).
Decreases were
registered in the other five Districts and ranged in size from 3
~er
cent
for District No. 2 (New York) to 52 per cent for District No. 9 ·(Minneapolis).
The value of permits issued in JanuPry, 1922, was greater than in January,
t
1921, in the case of every Fe4.eral Reserve District.
These increases varied
from 4 per cent for District No. 4 (Cleveland) to 230 per ~ent for District
No. 2 (New York).
The value of contracts awarded in seven Federal Reserve
Districts (statistics of which are compiled by the F. W. Doige Co.) decreased from $183,633,754 in December to ¢148,377,055 in January.
Decreases
occurred in Districts No.1 (Boston), No.2 (New York), No.3 (Philadelphia),
No.5 (Richmond), No- 7(Chicago), and No.9 (Minneapolis), while there was
a moderate increase in the velue of contracts awarded in District No.4
(Cleveland).
District No. 1 (Iioston) states that resiiential construction continues
to be maintained at a high rate, whereas the number of new business buildings shows a marked decline.
Reports from District No.
3
(Philadelphia)
indicate considerable building ~-ctivity, which has been encouraged by further
declines in rrices of materials.
In District No. 6 {Ptlanta) building has
~.-
continued in large volume during the
·~·in+,er
months, as the weather has been
unusually mild, but building for industriel purposes has not revived to the
same extent as home buil1ing.
A large nu..nber of small homes are also being
built in the southern sections of
able weather
conditions prevail.
~istrict
No.8 (St. Louis), where favor-
Distl·ict No.
that there is a noticeable increase in the
9 (Y.-Hnneapolis) reports
aver~ge
size of permit issued
Construction
for new construction, in spite of declining building costs.
activity in District No. 11 (Dallas) is
increasin~
in volume and is being
extended from residential building to building for business purposes.
District No. 12 (San Francisco) reports the.t building activity in January
once more reached record proportions, exceeding that in any month with the
exception of October, 1921.
EMPLOYMENT:
The reports rec0ived from the various Districts concern-
ing developments in the labor situation during the :past month are of a somewhat conflicting character.
The latest stetements issued by the United
States Employment Service covering firms employing more than 500 workers
show that for the period ending Januery 1 there was an increase of 4.2 :per cent
in numbers employed as compared with the end of December.
Increases were
especially noticeable in the case of vehicles for land transportation in
which there was an increase of 58.4 per cent during the month.
!eat her
ani its finished 't'ro:iucts ani met~"ls followed with increases of 3·7 ani 2.8
per cent respectively.
The lergest decreases occurrer:l in railroad repair
shops which showed a re1.uction of
3·9
per cent in numbers employed ani in
tobacco manufacture in which there was a decrease of 2.6 per cent.
The
~ '',f""!t
- 28 -
:
net increase in numbers emplo;y·ed amounted to
ing firms which were ernnloyinp
1,556,507
63,4oO for the
workers on Janu~ry
the date of this report, conli tions have arisen which have
increases in unemployment in
cert~in
<"'
... ~·j
1, I..JZ8 re:p.::-rt-
31.
Since
br:t;~~ght
about
sections of the country notably in
District No. 1 (:nos ton) where wiies:prea:i strikes in the textile mills of
t
Rhode Island and New H:.rrrpshire ~re now in progress.
The strikes
stPrted t.bout the rni'l:lle of Fcbr..Pry when mills in northern New England
and Rhode lsl,_m-1. '"nnovnced
!:'"
reiuction of
20
per cant in wage rates
accompanied in some inst-nces by l".n increase in working hours from 48
to
54
per week.
So fa.r, cotton mill operetives in M'3-ssachusetts h-::lVe
not been ~ffected to any greet extent rs no wPge reductions bEve been made
either in Fell River ot· NeN ! aiford.
'Little change c cc'lrrecl i n the
according
employment situation in that st0te during the past month,
to the reports of tha M.."'ss<->chusetts Pu~·,lic Employment Offices at Springfield, Worcester end Boston.
The n~ber applying for all lines of work
was, however, reported to be in ~11 cases lPrgely in excess of dem~nd.
In New York Stete, there was a slight decrease of
1.5
per cent in the
numbers employed in 1,500 est~clishrnents which m~de reports to the State
Dep~rtment
of Lebor.
The decre~se w~s ~ttributed mainly to se~sonal
reductions and the closing of
f~ctories
for repairs.
In District No.
3
(PhilPdelphia) a l~rge number of unemployed was still reported for the
six cities of ~ltoona, H~rrisburg, Johnstown, Philadelphi~, Scr~nton
and Willif:'J:I'l..sport according to the Pennsylv~IDia StPte Depc.rtment of Labor.
The number of unemp~oyed rose from
February 15.
232,960
on February
to
234,275
on
However, this is en improvement over conditions on
Janu?ry l when there were 243,293 une~loyed..
1
Reports received by the
tf~
t ...... .-·.~ ;
J
X-3341
- 29
Phih.:ielphia
iniic~te
Feder~l
a high
degre~
th$.t the nu:m.ber of
of 1"1te.
Reserve P!!!Dk from other sections of the District
of unemployment ?..s m.?.r.y
~.ppJ.i.cnnts
District No.
5
:for work
h~s
m~m:::~cturers
state
been exce})ti.,nnlly large
(Ricmnon~) rep~rts that during_the
past
month there has been sorre evidence of an incr8ase in the numbers unemployed-.
Street ce.r strikes have been in progress in Richmond,
Norfolk and Portsmouth en:.l one has been called in Columbia, S. C.
fi number of ship y2ris' employees heve been laid off in Newport News.
Employment agencies in the District note
~
influx of workers from
northern f!n.i eastern points who have been inducei to migr?.te by inform.<>_t:ton of greater "'Ctivity in the in-iustries of the southeastern
stl'>tes.
Special reports mAde to the
Feder~l
th~t at the end of January there was
Reserve lank of
an increpse of
4.3
Chic~go
show
rer cent in
numbers employed by reporting finns as corr;:;,.rei with the eni of December although a decline of
occurred.
on JenuAry
5.8
per cent as comppred with
a¥ea~
ago
The in1Uiry covers 205 firms which employed 116,277 men
31.
The increases in employment were exceptionally heavy
in the case of automobiles and accessories, met<e.ls other
and iron, and
egricultur~l
machinery.
The respective
th~n
steel
rercent~ges
In the automobile gro,.tp, the heavy increc.se
was caused by the
oper~.tions
after
f~ct
thet two of the five reporting plents resumed
tem:por~rily
closing iown.
In the
machinery group the increases in numbers ernployei
~ gric ul tural
~re
offset in p?rt
by the f2ct tiT> t meny plants are working on re:lucei scredules o·r
, • . flf
-
.,_-:.c
X-3341
- 30meint~ining
relief employment.
In District No.
9
(Minnenpolis), con-
ditions improved. .iuring the month of Janu"'ry .<>ni speCial reports maie
to tha Fe.ierf11 Reserve r.?nk of Minne?polis covering firms employing
less than
500 men in Minneg,polis
Pnd.
also incluling mining end lumber-
ing compl!!nies in the District showed Sl1 increase of 8.2 per cent in numbers
'
employed.
The United
St~tes
Employment Service covering the
este.blisl:rnents like,vise reported slight increases 1.uring
l~rger
Janu~ry.
The
most "('ronouncei improvement in conUtions occurre1 for minirlg com:pe.nies
in Montena an::l. MichigM, in luniber m.o.nufecturing and in construction work•
Corrrp:,ring the tot<ll number Grnployed by finns reporting directly to
the Fe:ie r~l Reserve :Bank on February 1 with nunibers employed on the s erne
.•
i!'>te of the c-rece1ing ye"'r there we.s a reduction of 20 per cent recorded •
The iecrease was heaviest in the case of mining companies in northern
Minnesota which were
date a year ago.
ch~nge
empl:oyitl~
District No. 10 (KBnsas City) reports no especi2.l
during the month.
inius tri'll
pl~nts
less than :h?lf as many men as on the same
Reports received directly frarn a number of
loc$ted. in the district showei
?.
slight im:Provement,
as these :plents .vere employint_. 39,655 men at the close of Janu<?ry as
compared with
ye~r ~go.
the month.
39,349 at the end of the rreceding month end 38. , 686
In District
No~
11 (Dall!'s) no speciel
Numbers employed.
incre~sed
ch~nge
e.
was noted during
in the builcdng trades but it was
St"lted th.,t in cotton seed proiucts plants, re,ilrO?.·i shops, mining, lumber
e.ni metP1 trp.:les ani
~ong
the rmks of
cleric~l
?.ni unskilled. workers
there was still a lerge iegree of unemployment 1:revP.lent.
In District
~31-
X- 3341
No. 12 (San Fr.:--ncisco) t>lso there were :er:!cticelly no changes during
the month of Jmu!"ry.
In C?lifornia, OrefOn
~nl
Washington there
we.s reportei to h?Jve been "tn im:Provement in outlook".
Increased
activity in lumbering eni other inlustries was 3bsorbing some of the
~n1
unem9loyed forces of the District,
'
anl Utah
~n
in 1\rizona, Nevada, Idaho,
incre'1se in minin§ ?ctivity es::;:eci-"'lly in the copper mining
d.~stricts h~d
On the other henl,
occurred..
r~ilro~d
end construction
work were reduced in scope and the decreeses in numbers employed in
these lines Pbout
counterb~l~nced
WFOLES ,r.t.E rrRt-DE:
the
incre~ses
in other lines.
Stetistics giving sales of the four reporting
wholesale lines, groceries, dry goods, bard.ware e.nd boots end shoes,
iniicete no chPnges of mom3nt during the rast month, P-lthough in the
cese of dry goods a mPrkei seasonal
u~turn
in sples is registered for
all Districts except No. 2 (New York) in which there was a decline of
14.3
per cent for
3
reporting firms.
were edv~ces renging from
11 finns r'2porting, to
5 firms reporting.
4.5
In all other Districts there
rer cent in District No.
4
(Clevelend)
95·3 per cent in District No. 10 (Kansas City)
A majority of the other Districts record exception-
ally hec-vy incre?ses amounting to 49.2 -_=-er cent in the case of District
No.7 (Chicago) with 11 firms reporting t>.nd
No.
5
(Richmond), 14 firms reporting.
54.9 per cent in District
In all other c ?.ses except
District No. 12 (San Fr~ncisco) incr3~ses were in excess of 25 per
cent as cornp?red with the preceding month.
s~les
were heavier as compared.
with Jro1uary a year ago in every case except District No .. 6 (l\tlanta) where
there was a negligible drop of
1.5 per cent for 21 reporting firms ..
- 32 -
Otherwise, increases ranged from
2.5 per cent for 14 firms in
District No. 5 (Richmond) to 62.1 per cent for five firms in
District No. 10 (Kansas City).
Increases as compared with a year
ago were also especially heavy in Districts No. 2 (New York),
llb. · T (Chicago) ,No. 9 (111inneapolis), the advances a.mov.nting to
'
40.3 per cent for three firms, 42.4 per cent for 11 firms, and
50.1 per cent for four fhms, respectively.
Reports from wholesale
grocery firms indicate a generally dull trade during the month
of January in all Distr:i.cts except :t-!o~ 9 (M5T:~.'I').8P,:poJ is) ;.n ~hich
an advance of
3.5 per cent for
12 firms occurred and
~istrict
No. 12 (San Francisco), in which there was an increase of 15.5
per cent for 31 fi~s.
Decreases were recorded ranging from 2.4
per cent in ristrict No. 11 (Dallas), 12 firms reporting, to 11.8
per cent in District No9 2 ((New York), 41 firms reporting.
As
compared with a year ago, decreases were evident in all reporting
~istricts
although they were pot
suffjcien~ly
pronounced to more
than offset the intervening price declines in most cases.
,.
, !"' ' •. r"'
. l)
-33·
X-3341
The declines in sales were least in
Di~trict
No. 12 (San Francisco)
where a drop of 1. 9 per cent was recorded for 31 firms; the decrease
was greatest in District No. 6 (Atlanta) 1 where sales were 18.8 per cent
less for the 32 reporting firms.
Seasonal dullness in the hardware
trade is also reflected in the fairly pronounced drop in sales that ocw
curred in most reporting Districts during the month of January.
Excl u.sive
of District No. 5 (Richmond) in which an advance of 7.1 per cent in the
sales of
19
reporting
reporting firms occurred 1 declines were registered in all
Districts~
the minimum being 2.5 per cent for District No. 12
(San Francisco) with 21 firms rep orting, and the maximum amounting to
29.5 per cent for eight reporting firms in District No. 10 (Kansas City).
The volume of sales as compared with a year ago nas been fairly well sus-
,•
tained, the decreases ranging from a negligible amount of • 7 per cent in
District No. 12 (San Francisco) 21 firms reporting1 to 28.6 per cant in
District No. 4 (Cleveland), 10 firms reporting.
Three reporting shoe
wholesalers in District No. 9 (Minneapolis) reported a very heavy increase
in sales during January of 73.G per cent as cc.mpared with the preceding
month.
Otherwise declines were recorded in Districts No. 2 (New York)~
No. 5 (Richmcnd), No. 6 (Atlanta) 1 No. 7 (Chicago) and No. 12 (San Francisco)"
rising from 2.7 per cent in the case of District No.6 (Atlanta)~nine firms
..
reporting to 15.2 per cent in the case of District No. 7 (Chicago), 16
firms reporting.
As compared with a year ago, fou.r Districts, No. 2 (New
York) 1 No. 5 (Richmond) 1 No. 9 (MiQneapolis)~ and No. 12 (San Francisco)
show increases amounting to
6.4 per cent eight firms reporting; 36.5 per
1
centJ 20 firms; 47.1 per cent, three firms reporting; and 26.2 per cent 1
2l firms reporting respectively.
-34RETAIL TRftDE.
X-3341
Retail sales in January showed the usual decrease
in volume after the holiday buying.
All Districts reported decreases
in dollar amounts as compared with January 1 1921 figures, but this is
attributed in most cases to decline of prices rather than a smaller
volume of trade.
The public did not respond as usual to the annual
sales, and extra sales efforts were necessary to maintain even the
current volume of sales.
preceding months.
Collections were rather poorer than in the
The percentage of unpaid charge accounts compared
with cash payments being large, especially in country districts.
The
dollar amount of sales recorded by 387 stores throughout the United
States showed a decrease of 12,4 per cent from
January~
1921.
Decreases recorded by the vario\l.s districts were as follows:
lli.Jtiri ~1.
~~~Dl
No. 1
" 2
II
3
" 4
II
5
"
(Boston)
8.1
(New York)
7.8
(Philadelphia) 12.2
(Cleveland)
21.9
(Richmond)
17.0
6 (Atlanta)
19.4
r~r.Mtn.i
~j.sl_
No. 1
II
8
II
9
" 10
11 11
" 12
(Chicago)
(St. Lou:Ls)
(Minneap o1is)
(Kanqas City)
(Dallas)
(San Francisco)
6.6
15.1
15.6
12.9
19.0
6.3
Department stores' stocks showed a decrease of 4.2 per cent from last
month~
but are about the same size as last year.
The rate of turnover
was slightly less than in December., 1921} but there was a rather sub ...
stantial increase in the volume of outstanding orders.
PRICES.
The most significant feature in the price situation in
the first three weeks of February was the rise in prices of agricultural
commodities.
Prices of grains and live stock., not only on the large ex-
changes but generally throushout the country, showed appreciable advances,
while wool prices.. especially for the finer grades, were materia1.ly
higher than in December and January.
Raw cotton, however, was slightly
-35-
X-3341
lower at the opening of February thar1 in January 1 but the February
average quotation for upland middling at New Orleans was
as compared with 16.75/:,
in January.
16.29p a pound
Prices of nonagricultural raw
materials were for the most part lower in February than in January.
An
average of the prices of all grades of bituminous coal on the leading
markets of the country was $2.21 a ton at the mine in February, as compared with $2.26 in January.
Pig iron prices were also lower in February,
as were prices of copper and tin.
practically unchanged for
q
Lumber prices in general have been
period of several weeks.
An average of February prices of manufactured goods would probably
show little change from the January average.
Steel products continued to
decline in February, also cotton yarns and cloth.
Wocl and silk textiles,
on the other hand, increased although in the case of the finished
gcod~
trading appears to have been on a comparatively narrow basis •. Food prices
showed a tendency to increase because of the rise in prices of agricultural
commodities.
January is the most recent month for which index numbers of wholesale prices are available.
The Federal Reserve Board index for that month
was 138 (with prices in 1913 considered as 100).
as the December index.
Between December and January small reductions ·Nere
made on the average in the prices of manufactured
as a group advanced.
This figure was the same
goods~
while raw materials
The increase in the latter group was due to the advance
in prices of farm products.
Changes in retail prices and the cost of living in general have
been slight during the past few months) as is shown by a study of the cost
of living in
32 cities which was published by the Bureau of Labor Statistics
early in February.
This study
sh~vs
that between September and December1
t
X-3341
1921, there was an average reduction
per cent.
in the
cost of living of only 1.7
The total reduction since the peak of prices in the summer of
1920 is estimated at 19.5 per cent.
FO~EIGN
TFADE.
January exrorts and imports were both somewhat
lower than those reported for December.
Exports 1 whicn amounted to
$279, OC0 000 were at a level lower than had been reached at any tirne since
1
.August, 1915.
Imports., which were valued at $216 1 000,0001 although lower
than the December total> did not decline to the very low values recorded.
in the summer months of 1921,
Foreign trade at this season of the year
is normally less than at other times, so that this latest decline is Lot
unexpected 1 nor does it signify anything new of a disturbing sort.
One of the most
signi~icant
facts in connection with American foreign
trade in recent months has been the readjustment of exports and imports
upon a basis more nearly approaching an even balance.
In January the
excess of merchandise exports over imports was only $63, 000, 000 as compared
with $445,000,000 for the previous January, and a monthly average during
1921 of $165,000, 000.
The latest foreign trade figures,
therefore~
indicate the contin-
uance of a tendency which becamd especially pronounced in
November~
1921,
when merchandise exports exceeded imports by $6},000,000 as compared with
the far greater
amount of $155,0001 000 in October.
lf allo•vance is made
for imports of gold and also for estimate{; of the various "invisible"
elements in our trade balance, such as immigrants' remittar:ces and foreign
investments, the excess of merchandise exports has been more than offset
in each of the last three months, with the result that our balance of
trade has actually been reversed and for those m..:nths constituted a s17iall
debit against us.
...
'
-~:
J'
,·~
~~ ~~-·- r"' j
-37SHinniNG.
X-3341
Ocean freight rates during February remained
generally steady1 while such changes as occurred were in the
direction of higher quotations.
Grain was the principal commodity
for which substantially increased rates were paid from American
ports to the United Kingdom and the Continent 1 while small increases over January rates were effective on flour in the same
trades. West Indian sugar cargoes, although not so active as in
January1 continued to furnish employment to many vessels.
Time
chartering for future requirements was less in evidence than in
tne previous month, but tnere was good demand for steamers in
position for prompt loading,and charterers at times found difficulty
in filling their immediate needs without o-ffering a premium.
Steamship men report that cargo offerings are on the increase,
which, coupled with the firmness of freight rates and improved
foreign exchange conditions, has given rise to a feeling of greater
confidence. in shipping circles than prevailed two or three months
ago.
-~ ~
'_·
FEDERAL RESERVE BOARD
WASHINGTON
X-3342
February 27, 1922.
StmJECT:
Notation on blank cheeks of member banks indicating
branch to which they should be sent for collection.
Dear Sir:
The Board has received a letter from a member bank which
is located in the brPnch territory of one of the Federal
Reserve ranks, calling attention to the fact that while many
of the member banks have on their blank checks the number of
their Federal Reserve District they do not have anything to
indicate the branch to which the issuing bank is assigned and
to which its checks should·be sent for collection.
The
suggestion is made that if some means coulQ be devised of i~
dicating the branch on the checks it wouli facilitate the
handling of the items.
Possibly the printing of the name of
the branch in skeleton letters. across the numerals might be
desirable, but the suggestion is r·sferred to you for consideration and for such action as you may deem advisable.
Very truly yours,
G o v e r n o r.
GOVERNORS OF /1 t.L F. R.. r ~ 'NKS
COOIES TO F. R .. ~.GF.NTS.
~
~~
- ·- ( _,.i
,'/
X-3343
F E DE R A L R E S E R VE B 0 A R D
STATEMENT FOR THE PRESS
For release in afternoon papers,
Friday, March 3, 1922.
CONDITION OF THE ACCEP.T!NCE MARKET
With this month a change is made in the method of
reporting the condition of the acceptance market.
During
the past year, a separate report for each district was presented, but beginning with this report, a general survey of
the acceptance market for the entire country will be made.
These reports will cover a period beginning approximately with
the middle of the month.
The demand for acceptances has been generally good,
although irregular.
District No. 4 (Cleveland) reports an im-
provement over the entire month, caused to some extent
by
deposits in banks of funds arising from the soldier bonus
granted by Ohio.
Most of the other districts state that while
the demand was strong during the latter half of January, i t declined during the early part of February.
T11e decline was
caused in part by the offering of a new issue of United States
certificates at a rate more attractive than that on bankers'
bills.
Government financing thus adversely affected the
acce~t·-
p
•
·~
--"')
ance market throughout the·entire country.
.tn additional factor
which drew funds from the acceptance markets of the
East~
was the
hardening of the call money rate to 5 per ce11t .1iti1 the close of
January and its continued firmness during the first two weeks of
February.
Also individuals and corporations rather favored long-
term investments with tax-exempt features.
The supnly of bills especially at the beginning of the
period was small in relation to tha demand 1 but during February
bills moved more slowly due to their comparatively low rate.
However~
District ~~o. 4 (Cleveland) reports that a number of banks vihic;1 i1ad
not supplied the market for soma months pasc came in ·ivith
and so the market as a whole was well supplied.
offerings~
Acceptances based
on foreign trausactions ter"ded to decrease, because of the general
decline 1in the invoice value of exports and imports, while those
arising from domestic shipments and warenousing increased.
District
No. 10 (Kansas City) attributes the 1 ull in foreign acceptances to
the diminishing flour and grain exports at this season of the year.
Foreign acceptances executed by banks in District No.
during January were
3.7
6
(Atlfu~ta)
per cent less than those executed during
December, 1921 1 and 17.9 per cent less than during January a year aso.
The same District notes ttat domestic acceptances executed during
January, 1922 1 aggregated 10.5 per cent more than those executed
during December, 1921 and more than three times the amount made iuring
January, 1921.
.Also District No. 4 (Cleveland) observes a continued
decline in export and import bills, but a new supply of bills based
on warehouse receipts and donlestic shipments.
•
•
X-3343 •
Bills offered during ttis period were varied in nature.
District No. 2 (.New York) reports tta.t new bills co:ning into the
market were drawn principally against sugar 1 cotton1 grain,. silk and
coffee, in the order mentioned •.. In District No. 7 {Chicago),
bills were drawn largely against meat,
grain.~
coffee, provisions
District No. 3 {Plliladelphia) reports the
and earned goods.
following classes of bills: cot to;.., flour (warehouee), food
products (domestic) 1 leather (import), oil and lumber (export).
Rates were low during the beginning of the
period,~
but
moved to a higher level during the early part cf February with
call money and the decrease in
the increase in the rate for
the demand for bills.
In District No.
2 (New
York), during the
first week of January the dealers were bidding 4-l/4 for prime
bills and offering at 4-1/8 and as a result of the exceptionally
good demandJ bills moved very freely at the latter mentioned rate.
Due to the heavy dell'and and the scarcity of new billsJ dealers
reduced their bid rate to 4-1/3 to 4 - 3-3/4.
3-7/8 and their offering rates
1
Tr"ese rates, however, were apparently not attractive
enough1 and as the demand fell awayJ ratee hardened slightly during
the balance of the peri9d and closed firm at 4-1/8 bid and ·4 per
cent offered.
The reports of dealers regarding the rates of prime bills
in District
follows:
.No. 2
{Ne\v York)
and
District No. :7 {C>dcago) are
as
.
..
-4-
Dealers
1
Ii.ates on Prime Jill s..
X-3343
Range dgir10.. period
Close
Offered
3id
Bid
Offerei
New Yor_k.
Maturity
30
6o
90
120
150
160
ChigagQ
30
day
4-11 a ...
~;+
)-~
It
3-7/3
II
II
II
II
3-7/8
3-7/3
4-1/4
II
"
II
II
0o
II
90
120
150
160
II
"
- )+
4-1/S
II
"
II
II
II
II
II
4-3/8
"
4-1/6
II
3-7/8
II
~-1/:.;.
3-)ji+
II
II
,,
'-'--l/3 ...,._ 1 I14
4-l/4 4-3/8
II
n
,,
-+
cc-l/8 4-l/8
II
II
II
II
II
II
I!
"
II
,,
3-7/8
4-1/?..
II
"
3-3/4
II
II
4-1/4
7 (Chicago) reports
II
11
1
I-
4-~/
II
II
6
4-lj:::. 4-l/4
II
District
6o and 90 day bil:s.
7-h~ follovJing distribution: "30-day,
9 per cent; 60-day, 4 per cent; 90-day, 53 per cent; and 160-day, 4 par
4-l/8
II
No. 1 (Josten) states that the demand ;;as best for
cent."
.:-+
n
II
Bills of short maturities were favored by purchasers.
District No.
)·
'+
II
"
II
II
"
/
"
.I
INDEX OF MIMEOGRft':lH LETTFR2 FORWARDED 3Y THE
FEDERAL RESERVE BOARD
DURING THE MONTH OF FESRUftRY, 19~2
- - - - --- - - - - - - - - - - -- -- - - - - - - - Date
.VIimeo No.
- - --
19:::2
-
X-1530 February 3
10
17
X-3311
X- 3317
X- 3316
X-3320
X-3323
X-3324
X-3322
X-3326
X- 33~3
X-3329
X-3333
X-3335
X-3337
X-3339
X-3342
St. 2596
St~
2606
24
- -- --- State Banks
- " "
SUBJECT
--- -
-
--
--- - - - --
-
-
- - - -
admi t·~ed to the Federal Reserve System
II
II
II
II
II
II
II
II
II
II
II
II
II
"
It
II
"
II
II
II
II
II
3 - Press Statement-Condi ticn of the Accentance MarKet
2 - Tem~ crary Advances to Dealers Against" Victory Notes
2 - Right of Directors of Federal Reserve Danks and
3ranches to E.<amine Lieports of Examination cf .v1ea:ber
Banks
4- Discount ru1d Premi~~ on United States Securities
t
Press Statement - Revie·;1 of the lvlcnth
6 - Letter from Federal heserve JanK of ..)oston re
Insurance on Building
6 - Negotiability of Promissory Notes Secured oy
Chattel or Real Estate ,~lortgages.
11 - Special Reports Leased viire Operatior.s.
14 - Member Sank Sul'\ervision
15 - 3ill to enlarge 'Po<iers of Farn:: Loan Danks
16 - Monthly Reports of Clearing Operations and of
i·lember and Non-member Banks in District, Forms
170 and 170-a.
lS - Annual Election of Officers and Aprroval of Salaries
by Federal Reserve Board.
2l - 1lire Transfers of Funds
23 - Expense ;',lain Line, Leassd ~-ue System, January" 1922.
27 - Notation on blank checks of merr:ber banks indicating
branch to ;;hich they sh.:uld be sent for collection.
rllaturity distribution of Certificates on Balance
Sheat, Form 34.
Schedule on Personnel for 1521 .Annual Report.
GOLD
FEDERAL RESERVE BOJRD
SET,LEMENT FUND
~~~~~~~~~~~~~~~~~~~~~~~--~~------~--------
Gold
Feieral
Reserve
Agg~gate
witbdr~als
Deposits
and tranSfers
to
ent 's fund
statement
Peb. 23, 1922.
Bank of
X-3346
Washing ton, D. C.
CamnD~IftLl______~------------~Ma~rc~h~,3L'~l~9=22~-~--
Jggregate
deposits ani
transfers from
/1. ent 's fund
1 ,100.00
25,o60.00
10,503,500.00
1,000,000.00
3, 000., 000.00
3.. 050.00
3,225,300.00
200.00
2,001,4Qo.OO
1, 000, 5ol. 88
1, 000., 000. 00
5,448,700.00
:Boston
New York
"{)bilad.elpbia
Cleveland
Ricbmond
fttlanta
Chicago
St.; t.ouis
Minneapolis
Kansas CityDallas
~Francisco
·'
'l'otal
27,219,871.88
TRftNSFERS
----------------------------------Debits
Credits
,ooo,ooo. o
2, 000, 000. 00
2., 000, ooo•. 00
I$
6,ooo,ooo.oo
4, 000, 000. 00
I$
6,ooo,ooo.. oo
--------------~-------~--~----------------------------------------------------------------------------------------------------------------------~Federal
Settlements fran February 24, 1922 to March 2. 1922
Balance in
Sunmaly of changes 1n ownerReserve
inclusive.
fUDi at close
ship of gold by banks through
Bank of
of bus.kless
U:ensfers and settlements •.
------------~---------------------------~---------------~-------------------
Net
·nebJ.ts
Poston
New York
Philadelphia
Cleveland
Richmond.
928,534.00 I$
26,301.,307.60
i$
-
....
1., 228, 7f. o. 72
1, 080,224.84
~tlenta.
-
-
Chic"'gO
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
3~403,853-36
1, 923,778.39
-
fct!
Total
Debits
100, 8571486.22 I$
408, o64, 569. Ol
131,917,985.. 52
93, 728, 923· 28
112, 629, 223. 20
43,105,233-84
198,973,500.23
92.370,583.13
22, o44, 629. 57
77,024,791-70
36,264,717-35
55, 542,418.27
Total ..
Credits
99,928.952.22 I$
381, 763,261~41
140, 4o4,36lf-.29
99, 088, 29().11
111,lf.00,462.48
42,025,009.00
200, 932, 953-11
96, 862., 521.18
23,,209,322-71
73,620,938-34
t~~ 3~0, 938- 96
. s.,9l4-1~, d.q. 51
34,866,458.91(~ 1,372.,524.. ~1.32lt1,}72.,524i<b1.321$
Mar. 2, 1922.
Net
..
CreMts
-
s, 486, 378. 77
5,359,]66.83
-
1, 959,452.88
4, 49l, 938. 05
l# 164,..693.14
-
13,4o4~·629.24
·~
----------------------------------Decrease
Increase
20,6b9,342.05 $
47,777,342.58
76,952,072.69
44,593.. 849. 71
32, 546.644. 99
26,3~,05Q.2J.
99.. 8 .. 016. Ob
24, 374, 180.65
35,0I.q,l4b.o6
32.. 511,083.16
1 " 775, 588.-92
55, 3&6, 095.48
4, 928, 534.00 $
28,301,307.60
-
-
-
10,.,486,37f.77
5,359,36£.83
-
5, 959,452.88
4,491,938.05
1,154.,693·14
-
1, 228, 760.72
1, 080., 224.84.
13,404,629.24
3, 403, 853-36
1, 923, 778. 39
-
34.866.458 .. 91 tct: 519.746,418.56 l~ 40,866.458.91
..
f$
40_,865.458~91
CY
~~
~
FEDERJ,L
RESERVE
A(}ENTS:
FUND
X-3346a
SumnaiY of transactions for~iod ending Warch 2, 1922.
Gold
Gold
'Balance last
Federal
statement
Reserve
Wi thclrawals
Deposits
Feb. 23, 1922.
Jlgent at
I·1'
110 '000 ,000
j$
I*
"New York
411,000,000
I
120,389,2F-O
Cleveland
1Co,ooo,ooo
Ricbmond.
22.295,000
J.t1anta
66,500,000
4,000,000
Chicago
315,€#4,500
66,3oo,ooo
2,000,000
for
transfers
to bank
3,000,000
Boston
do·
St. Louis·
Minneapolis
I$
I
j$
I
~
Deposits
Dallas
I
Total
I$
-
I$
110,000,000
I
411, C'OO, 000
I
120,389,2~
·I
I
l
lto,OOO,OCO
\..
30,795,000
500,000
63,000,000
3,000,000
10,000,000
322 ' 644 J 500
2,000,COO
500,000
8,500,000
1,800,000
66,100,0CO
4,000,000
10,000,000
1,800,000
8,200,000
2,000,000.
2,000,000
5,000,000
2,000,000
i
7,000,000
~
7,000,000
200, feo,soo
1,510.,793,26o
close of
business
March 2, 1~22.
I
1,484,000
San Francisco
I
3, 1922.
~~lance at
I$
8,500,000
28,3fo,ooo
T-otal
8,200,000
Kansas City
I
I
($
~~·ch
( CONy_lD_!NT If. L)
Deposits
Total
through
transfers
Witbdrawals
from bank
Wi tbdrawals
I
Philadelphia
i':1ash:'.ngt on, D • C.
I$
18,ooo,ooo
945,500
I$
12,8oo.ooo
I$
7,945,500
33,360,000
1,484,000
192,675,000
X- 3347
OFFICERS OF FEDERAL RESERVE BANKS
Chairman & F.R. Agent
Governor
Deputy Governor
Cashier
BOSTON
F1'H., Curtiss
C.A. Morss
c.c.
w.w.
Wm. Willett
Bullen
Paddock
Asst. Cashiers
Asst. F.R. Agts.
.Auditors
F.W, Chase
C.F. Gettemy
H.F. Currier
E, G. Hult
W.N.
E• .M.
H,A.
L.W.
NEW YORK
Pierre Jay
PHILJIDELPHift
R.L. Austin
*
Benj. Strong J.H.
L.F.
G,L,
E,R.
G.w. Norris Wm.H. Hutt 1 Jr.
Controller
# Manager
(&) Also Secretary
( l) Acting Audi~or
( **) Acting AssistaDt F. R. Agent.
Case
Sailer
Harrison
Kenzel
L.H.
J.D.
A,w.
J.W.
L.R.
R.M.
Hendricks •
Higgins*
Gil bart*
Jones*
Rounds*
Gidney•
W,A. Dyer(&)
Kenyon
Leavitt
Saunders
Sweetser
G.E, Cha¥in#
Shepard A. Morgan
C.H. Coe
J,E. Crane#
W.H. Dillistin#
E,L, Dodge#
E, C. French#
Bethune ·Grant~
W, A. Hamilton ·
H.M. Jefferson#
A,J. Lins#
w.B. Matteson#
J • L. Morris#
H.R. Murray#
R,M. O'Hara#
J.E. Raasch#
Jas. M. Rice#
Carl Snyder#
s. s. Vansant#
I, W. Waters#
Francis Oakey(l)
w.J.
W.I. Rutter 1 Jr.
s.R.
F.W.
C,A.
R,M.
Jas.
Davis
A.E. Post
Earl
W.T. Grosscup
LaBold
F.G. Rehfuss(**)
Mcilhenny
Miller1 Jr.
M. Toy
X-3347
-2-
Chairman & F,R, .Agt,
CLEVELAND
D, C, Wills
Governor
Deputy Governor
E, R, Fancher M. J. Fleming
F, J. Zurl inden
Cashier
H, G. Davis
Asst. Cashiers Asst. F.
c. w.
Arnold
c, L. Bickford
R.~
J. C, Nevin(&)
Auditors
F. V, Grayson
D. B. Clouser
H. F. Strater
w. F. Taylor
G. H, Wagner
RLCHMOND
Caldwell Hardy
ATLANTA
J. A. McCord
G, J, Seay
Peple
G. H. Keesee
R. H, Broaddus
J, S, Walden(l)
A.s. Johnstone(l)
~C.
A,
M,B. Wellborn L. C, Adelson
J, L. Campbell
CHICAGO
Wm.
A, Heath
*
Controller
J.B. McDougal
# Manager
(&) Also Secretary
(1) Assistant to Governor
**
Acting
C. R. McKay
S, B, Cramer
J. H. Blair
M.
w.
Bell
w. c. Bachman*
K, c. Childs*
J. H. Dillard*
D. A. Jones*
0, J. Netterstrom*
A, H. Vogt *
Clark Washburne*
v.
Blackburn R. H, Lee
W, W, Dillard
J. G, Fry
Thos, Marshall~Jr,
Edw. Waller, Jr.
Geo. S, Sloan
E. G, Grady
w.
R. Patterson Ward Albertson
W. B. Roper
c. R. Tidwell
R. A, Sims
J. B. Tutwiler
Creed Taylor
W. F. McLallen ( &)
F. Bateman#
W,H. White
R. H. Buss#
J. c. Callahanff e.G. Rutledge**
R. E. Coulter 4f
A. w. Dazey
I. J .. Delaney#
F. H. Hat:U'ahan#
w. A, Hanson#
E. L. Harris#
R, c. Huelsman#
F, A, Lindsten#
w, K. Lyle#
L, G, Pavey#
Irving Fischer#
F. .'II. Huston#
F. R, Burgess
C,
X-J)4t
-3-·
C!hai rman
&
F. R. Agt.
Governor
Deputy Governor
Cashier
CHICAGO (Cont'd.)
Asst. Cashiers
.tsst. F .R. Ag!s.
Audit~
J. H.. Rumbaugh#
J. G. Roberts#
Lo1,1is G. Meyer#
s·r.
LOUIS
fim. McC.
Martin
D.
c.
Biggs
o.
M.
Attebery
J.
w,
White
E. c .. .Adams
F. N. Hall
w. H. Glasgow
A. H,. Haill
J,
s.
MTNNEAPOLIS·
::ohn H. Rich
R. A. Young
W. B. Goery
s.
B.
S, Cook
F. C, Dunlop*
v.
Moore
C., M.
Stewart
E. J. Novy
w.
Rinkleff
F. Gilmore
Gray Warren
F. G. Norton
c.
L. Mcsher
J. F. Ebersole
Harold C., Core
L. E, Rast
KANSAS CITY
Asa E. Ramsay
J.Z. Miller,Jr,C,A, Worthington J.
w.
Helm
G.
E~
Barley
A. G. Frost
Arthur M. McAdams
M. W, E.. Park
John Phillips} Jr.
C.K. Boardman(*)· S.A. Wardell
G. H. Pipkin
E, P, Tyner
DALLAS
vim. F. Ramsey
*
Controller
# Manager
(*) Also Secretary
B.A. McKinney R. G. Emerson
R. R. Gilbert R. B. Coleman
Fred Harris
W. o. Ford
J • L•. Lumpkin
Reese T. Freeman
c.
C. Hall
Val J. Grund
D. P. Reordan
'.
··~
'
·j
•
--+-
::;hairmen &
F~R •
~AN FRANCISCO
John Perrin
.Agt_.
G-overn )r
Deputy Governor
Cash2ers
J. U. Galkins
Wm. A. Day
Ira Clerk*
L, C. Pontious*
w.
N. Ambrose
Asst. Cashiers
.4.sst.. F .R. Agts.
Auditors
H. s. House
Wm. Hale
H. N. Mangels
F. H, Holman
S. G. Sargent
H. C. Breck
F. H. Holman
C. D. Phillips
Jay 1. Reed
c. E~ Earhart
Mudie McRitchie**
H. M, Craft**
E. c. Mailliard**
Geo. H. Schmidt**
c. s. Jernegan**
~~'
Assistant Deputy Governor
Acting Assistant Cashiers
Corrected to 1 'ic.rcn 16,. 19',2.
FEDERAL RESERVE BOARD
WASHINGTON
X-3348
March 6, 1922.
fTJBJECT:
Dear
Governors' Conference
Sir~
The Federal Reserve Board has designated
Tuesday., kay 2., 1S22J as the opening date of the next
meeti~g of the Governors of Federal Reserve Banks for
conference vrith the Board and with each other.
The
meeting will convene at ten A. M. in the Board 1 s
Assembly Room in Washington.
The topics which the Board desires to discuss
with the Governors will be submitted later and the
topics Nhich they may wish to discuss among themselves
will be prepared by their own com:nittee.
Very truly yours 1
G o v e r n o r.
GOVERNOrtS OF JlLL F.R .. BPNKS ..
FEDERAL RESERVE BOARD
WASHINGTON
March 7~ 1522.
:.;._3349
SUBJECT:
l?roposed r".mendmer:ct to Section 25(a).
Dear Sir:
For your iLformation there is enclosed
herewith cory of Senate Bill No.2'436 and copy of
a letter,, rit:en by tns EcaLl i'1 r.3sponse to d
com~unication frcm the Chairillan of the Sub-Com~ittee
of the Senate Committee OJ.-: Bankir.g and Currency in
which the Board's vie;.s -,vith re.s!'ect to the proposed
legislation are set forth.
Very truly
yours~
Governor
TO THE CH!IIRMEN OF JILL FEDERAL R.ESERVE BANKS.
COPIES TO .PLL THE GOVERNORS.
•
•
c0
p
y
X-334Sa
February 27, 1922.
Honorable Truman H. Newberry,
United States Senate.
My dear Senator:
Receipt is acknowledged of ycur letter of February 24
advisir:g that you have been appointed chairman of the subcommittee of the Senate Committee on Banking & Currency to
consider Senate Bill No. 2436, and requesting the Federal Reserve Board to express its opinion v;ith regard to this bill.
The bill proposes to amend eecticn 25(a) of the Federal
Reserve Act so as to authorize foreign banking corporations
engaged in business of the kinds described in Section 25 of
the Act 1 or organized under the provisions of Section 25(a),
to make application for and be admitted to membership in the
Federal Reserve Syste~ subject to such rules 1 regulations and
conditions as the Federal Reserve Board may prescribe. Under
the present terms of Secticn.25(a) corporations organized under
the provisions are expressly prohibited from joining the Federal Reserve System.
The Board has had occasion to consider
the advisability of legislation for this purpose a number of
times during the past year1 and as a result of your letter
formally considered the matter at its meeting this morning
and voted to reco.r:mnend to ycur committee the e.cactment of·
Senate Bill 2436.
The main reason for legislation authorizing foreign
banking corporations to join the Federal Reserve System is
that acceptances of non-member banks are bought and sold in
the open market at a somevvhat higher rate than acceptances
of member banks.
While the Federal reserve banks themselves
do not discriminate in this way against non-member bank acceptances~ but base their rates for the purchase of all bankers' acceptances upon the credit standing of the accepting
institutions, the fact that in transactions to which the Federal reserve banks are not parties a higher rate prevails in
the open market with respect to non-member bank acceptances
than to member bank acceptances operates to the disadvantage
of accepting institutions which are not members of the Federal
Reserve System.
The Board believes also that the enactment
-2t
Honorable Truman H. lJevvbeny
cf the proposed bill is desirable for the reason that it will
brir.g foreign bankir;g corporations into closer contact with the
F?deral reserve banks and will, thereforeJ tend toward a unification of the country's bankin~ system as a vvhole.
As the
Board senses the oy-inicn which is generally prevalent, sentiment is groviing in favor of having the nonm::Jmber banks of the
country join ~he Federal Reserve System, ani the enactment of·
this bill would, of course, be a step iu that direction.
For the reasons i::1dicated above the Fed~ral Reserve
Board approves of Senate Bill 2436. The Board :ft8t only considered the purpose and the substance of the bill,. 'out has given
careful consideratior to the f crm of the bill and believes it
to be in all respects satisfactory.
Foreign banking, corporatio;'ls under the supervision of
the Federal Reserve Board do net receive domestic deposits to
any considerable e..dent, so that the reserves 1ih~ch thay would
carry with Federal reserve ban~s on account of their deposit
liabilities ;vould not be as large in Froportior. toti1eir capital
and surplus as iL the case of other member ban~s; but on the
other nru1d they would not be expected to avail· therr:selves of
the rediscount privilege to the same extent as other ;:r;ember banks
for the amount of eligible paper held by them would not be as
great, comparatively speaking1 as ti1e amount of such paper
normally held by other member bal~s.
Furthermore, the Federal
Reserve Board has authority under the present terms of Sections
25 and 25(a) 1 and this authority would not be affected by the
enactment of Senate Bill 2436, to require foreign bankircg corporations to carry reserves against acceptance liabilities~ and
the Board has prescribed the chal~acter and amount of such Teserves in Section XIII of its Regulation K, Series of 1920~
In so far as it may be found desirable to do so for the purpose
of making foreign banking corr orations vvhich become ruembers of
the Federal Reserve System COlltribute in a larger degree to
the resources of the Federal Reserve System, the Federal Reserve
Soard may require reserves against acceptance liabilities to
be carried in the form of bala-.ces with Federal reserve bar.tks.
You will note that under the terms of Senate Bill 2436
foreign banking corporatior:s admitted to membershir ir: the Federal Reserve System ·would not be subject to exa"!lination by exa'lliners of the Comptroller of the Currency or to the limitations
prescribed by Section 13 of the Federal .Reserve .Act upon the
exercise by member banks of the po·#er to accept drafts and bills
of exchar.,ge. The foreign bankL1g corporations are subject to
examiLation by the Federal Reserve Board, and the limitations
on the exercise of their acceptance po.vers are defir.ed in Section XIII of the Board 1 s negulation K just referred to.
These
•
-3Honorable Truman H. Newberry
provisions of Senate Bill 2436 1 which are contai~ed in lines
18 to 25 on the second page., are deemed by the Feder8.1 Reserve
Board to be necessary in order to make the amendment effective.
For your id ormation and convenience 1 I am ~closing
a copy of the Board 1 s Regulations of the Series of 1520 which
contains Regulation K relatir..g to the organization and operation of foreign banking corporatio.s organized under Section
25(a) of the Federal Reserve .Act. If there is any further
information which the 3oard can furnish to your committee it
·,vill be very glad to do so.
Very truly yours.,
(Signed)
~.
P. G. HflRDING
Go v e r n o r,
Enclosure.
'
c 0
'0
y
67th CONGRESS,
1st Session.
s. 2436
Pugust 22, 1921.
Mr. Ecl£e intro1uce1 the follo·'ving bill; '-Vhich ''Vas read t.vice ani referre.:.
to the Comni ttee on Fenking and Currency.
:FILL
to
To amen1 section 25 (s.) of the Pet ~-r;roved Decemcer 23, 1913, known·
~s the Feier~l Reserve ~ct.
Ie it erwc i;ei by the
~en~
te
~nd
House of Represents ti ves of the
United Stetes of fmerice in Con.; :-,;s:; <:~sse::o:bled, That section 25 (a)
of the ~ct a~proved Decem-rer 23, 1913, knovvn es the Fe:l.er,.,l Reserve
/let, as ?mended by
the tcts "'J::.:roved. Fecru<?rv 27, 192l,'?ncl June 14,
1921, be further emended by striki1( out thet
p?.rec~r!'n;:h
of said
section which re.9ds "'s follows: "She.reholders in any corporation
orgenized under the provisions of this section shall be liable for
the amount of their
unpai~
stock subscriptions9
No such corporation
sh<>ll become e member of any Federal reserve bank," and by substituting
in lieu of said paragraph the
follo-•vin~-!
"Shareholders in any corpor'-'tion or§:enized under the :provisions
of this section shall be lieble for the amount of their unp3id stock
sut scrir tions.
"-~ny cor:por~tion engeged in business of the kinis descrite:l in
section 25 of this
.~-ct,
r:.-nd any
corpor~tion
ori' e:..-dzed under the pro-
visions of this section, may rrake applic..,tion to the Feder3l Reserve
....
X-3349b
- 2Board, under such rules and regulations
subscribe to stock of the
Feder~l
~s s~id
board may prescribe, to
reserve bank of the district within
which the ap-plying corpor~tion is loc~ted in an amount e.a,ue,l to
centum of the paii-up
capit~l ~ni
6 per
surplus of the applying corporation.
The Federel Reserve Poert, subject to such coniitions .t:ts it may prescribe,
may, in its discretion, permit the
applyin~
holder of such Feier!'!l reserve benk.
members of the
Feier~l
corporetion to.become a stock-
..all such corpor'9tions becoming
reserve system shall be subject to the provisions
of this ./let 'Nhich rel~ts specific-"'lly to member banks: Provided., That
such corpor~tions shl"'ll not be subject to examination by examiners of
the Comptroller of the Currency under the provisions of the first two
paragraphs of section 524o of the Revised Statutes as arn~ndei by section
21 of this .Act, gn:l shall not be subject to any limitations upon the
exercise of the poNer to accept irr.:.fts t?rrl bills of exchange drawn upon
them, except such ~s <:1.re imposed by regul~tions prescribed by the
Feieral Reserve
->
1....
~o~ri."
('
FEDERAL RESERVE BOARD
WASHINGTON
X-
March
3351
9, 1922.
SUBJECT: Printing of Federal Reserve Notes.
Dear Sir:
Your attention is invited to the enclosed copy
of a letter received from the Pssistant Secretary of the
Treasury, regarding the printing of li'ederal Reserve notes.
You are re~uested to give the matter careful consideration
and to advi-se the Board just how far your bank can go in
carrying out the suggestions of the Assistant Secretary.
Very truly yours,
GOVF.R~OR
Enclosure.
Chai nnen of e 11 F. R • Banks
Copies to Governors.
-.
r~.
X) ))~t( a)
COPY
'T'R'EIISURY
\-'
DEP,~R'T'MF."'JT
Washington
Dear Governor Harding:
Under date of Pugust 31, 1921, I addressed a
letter to you advising as to the number of employees in the Bureau of
Engraving and Printing engaged in making Federel Reserve Notes, and
st~ted
that in planning a reduction in the Bureau force it would be
helpful to secure from you some gener;:cl estimate as to the
prob~ble
deliveries of Federal Reserve Notes which would be required by .the
Feder~l
Reserve Board. within the period of the next six months.
1l
schedule showing production, delivery from the vault and average daily
delivery from the vault,of Federal Reserve Notes during the months of
July
~md
~ugust,
1)21, and the deliveries for the fiscal years 1919, ·
1920, and 1921 were also submitted.
On September 27, 1921, you replied that shipments
of Federal Reserve Notes to the
bex..~s
a-:c-o·::?;:ed 131,505 sheets and
that in your opinion it was unlikely there would be any decrease in
these figures during the remaining months of the year.
You stated
that during the months of Janua.ry and February, it might 'be possible
that the shipments would decline to about 100,000 or 125,0CO sheets
daily.
Your estimate as to deliveries to be re1uired from the
Bureau for six months from the date of your letter was 225 ,COO sheets
of Federal Reserve Notes daily, part of which '.vould be used in building up a reserve stock.
On February 1, 1922, you advised that there had
b~en
buiLt up a sufficient stock of Federal Reserve Notes and that
,,
X3351(a)
- 2-
the printing orders hereafter placed by the Boarl for account of the
banks will be to replace week by week notes Nithd.rawn from the reserve
stock for shipment to the banks.
five months, the average
You estimated that during the next
daily delivery of Federal Reserve Notes would
be 125,000 sheets, and further stated thflt it was inpossible to estimate the avera?e ieliveries during the period July 1 to December 31,1922 ..
You expressed the belief, however, that the average daily delivery during the latter part of this year would not exceed 150,0CO sheets daiJ.y.
The demand for Federal Reserve Bank Notes has been
steadily decreasing for some time past and under dste of Febroary 7, the
flssistsnt Secretary of the Federal Reserve Board advised that the Board
deemed it desirable to reduce the stock of Federal Reserve
]grik
Notes
on hand, and, therefore, req.uests the discontinuance of the delivery
of all Federal Reserve Bank Notes until further
notice~
In accordance with your letter of February 1, as recited
above 1 and the discontinuance of production of Federal Reserve Bank
Notes, the Bureau has adjusted its force to meet the re;uired
productio~
This involved furloughing for one day in seven slightly over 4,000 e~
ployees, which plan is in operation at the present moment.
lt should be understood that the reduction in working
•
hours which was made to apply to 4,000 employees covers all errployees
engaged in the production of currency.
The
re~uirements
of currency, such as National Bank NOtes, Silver
h~ve
only be3n slightly reduced.
for other. fonns
Certific~tes,
etc.,
The services of certain employees
which had been entirely devoted to the production of Federal Reserve
Notes and Bank Notes were not dispensed with but were utiliz.ed in the
production of other forms of currency.
This plan seemed more advisable
.
...
X3351(a)
- 3than breaking up the organization and discharging a number of employees,
under existing business conditions.
I understand that it is now proposed to discontinue for the
time being the printing of ·notes for the New York and Chicago Federal
Reserve Banks.
The present daily printings for the New York Federal Re-
serve Barik are 78,500 sheets and for the Chicago Bank are 8,750 sheets, a
total of 87,250 sheets.
If this action should be taken and the schedule
for the other banks maintained, it will leave the :Bureau of Engre.ving and
Printin~
with only 37,750 sheets to print daily.
This further drastic reduction in the requirements for Federal
Reserve Notes, amounting to 87,250 sheets, will mean a further
~eadjustment
in the organization and personr,el of the Bureau of Engraving and Printing.
I fear that such a radical cut in the work will have a far-reaching effect
and will cause serious complaint.
The err.ployees have accepted the necessity
of being laid off one day in seven in good spirit.
If it should be necessary
to make this reduction two days or more in seven, the loss in earning power
would constitute a serious hardship.
I, therefore, beg to inluire if it is possible at this time to
loOk forward for the balance of the calendar year and estimate the need for
Federal Reserve Notes ani Federal Reserve Bank Notes during that perioi. With
such figures in hend, the Bureau could adjust its organization and personnel
to approximately the monthly average production re<i,uired. I make this sugg'3stion 1dth the understanding that the New York and Chicago Federal Reserve
banks could probably not go through the balance of this year without
calling for any new printing of Federal Reserve Notes and that other
Federal Reserve Benks
may
be receiving month by month •.rore than their
'
- 4average
re~uirement?
for the
bal~nce
of the year and so might later
ask for a reduction or discontinuance of new printings.
This is
~'J.reJy
a•"l operat:i.ng
~:·oolern
of th2
E~.::.es.·~
of
En~
graving and Printing and I trust that we may have the co-operation of
the Federal Reserve Board and banks in rneeting a situation which at best
will prove embarrassing to a large number of employees.
Sincerely yours,
(Signed) Eliot Wadsworth
~ssistant
Honorable W. P. G. Barding,
Governor, Federal Reserve Board,
Treasury Department.
Secretary.
.
.
FEDERAL RESERVE BOARD
WASHINGTON
X-3353
'M.arch 9, 1922.
SUBJECT:
Currency Payments for Pccount of United States.
Dear Sir:
The Board has received from the Secretary of the
Treasury a copy of his letter, iated March 6, 1922, to the
Treasurer of the United States, which gives instructions as
to payments of United States currency, with particular reference
to the payment of gold certificates and the kinds of currency
in which payments shall be made i:n the different denominations ..
P copy of this letter is transmitted herewith for your information and for the guidance of your bank with respect to payments
for account of the United States.
It is important that this policy be carried into
effect as a matter of routine without special comment.
Vety truly yours,
G o v e r n o r.
Enclosure.
r,F,rnTFR 'T'O GOVER'!\TORS OF /ILL F. R. E nnzs
COPY 'T'Q F. R. .aGE1lTS •
X-3353a
'i'R"' ~ s CFY PFP AR.,~ o/'1\lT
c 0 t' y
W~ ClPP.TG11CJN
March 6, 1922.
Dear Mr. Treasurer:
In order to reestablish the unrestricted circulation
of gold within the United States and restore payments by the Government to the basis which existed before the war, you will until further notice make
pa~1nents
of United States paper currency without
distinction as between United States notes, silver certificates
and gold certificates, except for the following restrictions as
to denominations:
(1)
Pa~~ents
in dencminations of $1 and $2 shall be
made, so f8r as possible, in silver certificc-tes, l'.>nd if no silver certificates are availBble, then in United States notes, or,
when av;>i lab le, Federal Reserve Bank. notes.
(2)
Payments in denominAtions of ¢.5 an::l $10 shall be
made, so far as possible, in United States notes end, when available, in silver certificates.
If United States notes and sil-
ver certificPtes are not
le in sufficient q,uant i ties, it
aveil~b
will be the policy in the future
8S
in the p:::st to purchase Fed-
eral Reserve notes from the Federal Reserve Banks in the d.es ired
amounts.
Nothing herein contained, however, shall be deemed
to prohibit the payment of $10 gold certific2tes on demand, or if
·no other kinds of currency in that denomination are available.
(3) Payments in denominations of
$20 and upwards shall
X- 3353a
-Zbe made, so far as possible, in gold certificates, or, ·.vhen available, in United States notes end silver certificates.
Fede:ral
Reserve notes already on hand in these denonnnations may be paid
out, but 1vithout specific authority therefor in writing Federal
Reserve notes will not any longer be purchased from the Federal
Reserve Banks for the purpose of making payments in denominations
of $20 nnd upwards.
It will continue to be the policy of the Treasury to deposit
to the credit of the Federal Reserve Banks in the Gold Fund
with the Federal Reserve Boar1 the free gold which from time to
time becomes ava.ilable to the Treasury and is not req.uired to make
current payments.
The instructions heretofore given unier date of June 30,
1920, as modified by the instructions of January 7, 1921, and
the general instruc"d0ns of Pugust 30, 1920, as ame1J.ded., as to
Exchanges, Replacement and Redemption of United States paper
currency are modified in accordance herewith.
The Treasury is notifying the Federal Reserve Board of
these instructions and
re~uesting
that the Federal Reserve Bank$
follow similar procedure with respect to payments for account
of the United States, 'JVhether on current payments or on exchange
or redemption of United States paper currency.
Very truly yours,
(Signed) A. W. Mellon
Secretary.
The Honorable,
The Treasurer of the United States ..
........
FEDERAL RESERVE BOARD
WASHINGTON
March 9, 1922.
SUBJECT:
Pt.yn:ents of Gold
Certific~tes.
Dear Sir:
In connection with the letter of the Secretery of the
Treasury to the ~re~surer of the United States, dated March
6, 1922, a copy of which has been sent you today, it seems
to be proper to advise you th~t the suggestion has been made
that Federal Reserve :Banks adopt the general policy outlined
therein with respect to all payments, making such modifications as may be necessary as to payments for their own
account.
The ~uestion of resuming payments of gold certificates
was, as you will doubtless recall, considered at the Joint
Conference of Governors and Chairmen of Federal Reserve Banks,
held in Washington in October, 1921.
The conference did not
at the time favor the resurrption of payments of gold certificates. The point has been m,sde th'3t the objections to gold
payments which were then raised have been met by developments
which hgve occurred since.
The total gold holdings of the Federal Reserve Banks
have increased nearly $SOO,OOO,OOO since March 4, 1921, and
the eOI!'ibined reserve ratio has risen from 50.8 to 76.7 per
cent.
The l~wer discount rates which now prevail at all
Federal Reserve Banks give an answer, it is argued, to any
criticism which might be raised against the payment of gold
certificates on the theory that these payments were intended
to reduce the reserves of the Federal Reserve System and
furnish ~n excuse for high discount rates.
ftt the same time,
it is feared by same that the great accumulation of gold in
the Federal Reserve System, though it may not yet have caused
any inflation, offers a constant tempte.tion to the adoption
of unsouni credit ~olicies and unless some corrective action
is taken may lead the country into another period of inflation
and speculation.
There seems to be little prospect that there will,in
the near future, be any effective demand from the rest of the
world. for large amounts of the gold accumulated in this country,
for it seerrs that for the present at least the proceeds of any
loans which European governments may be able to place in this
country will have to be used for reconstruction and for the
...
.•
...,
X-3354
- 2-
purchase of conm:oJities, r1'lthEr
gold resetves.
ths-11
for the
acc'..:.ffiula~ion
of
The Federal Reserve Board is not unmindful of the fact
that it is important to take into consideration not only the present reserve position of the several Federal Reserve Banks, but
their prospective position in view of demands which may be made
upon them for credit accommodation as the season advances. While
some of the Federal Reserve Banks might feel justified in paying
ou:t gold certificates freely, at least until their reserves were
reduced to a certain point, others may feel that in view of re'-i,Uirements ahead of them they would not be justified in changing
the existing policy.
The -i,uestion then arises - what effect would
the adoption of a new policy with respect to gold payments by
one Federal Reserve Bank or by a group of Federal Reserve Banks
have ·u.pon others which feel that their rese.:ve pos::.tion at the
present time is none too high?
The Board would be pleased to have,
as early as convenient, an official expression of the views of your
own Federal Reserve Benk as to the policy which it should adopt,
all the circumstances being taken into consideration.
Very truly yours,
Governor.
CH~IRME~ ALL F. R. BftNKS
COPIES 'T'O GOVERNORS.
l4illE'rlPL RESEHVE :aD,:\f.D
'!" t E "M E N T F U N D
X-33 55
G 0 L D . S E "'
Washington~
s-.mmal'Y of transactions for ""Deriod ending March 9. 1< 22.
D.
e.
Me.rch 10. 1922.
(CC.•"N"FIDE""l'l'i'XAL} .
.,1
~Ii'e~d.~e~ral~- ~~':!-~Ba~l~en:.:·c::..e..:::·--=-las~t~:.r:.,..=::::!=4
~
. Go~ld:;:=-==-....~=-r::.::..:..-,Go:;-::-:;-ld"i""'"'"""----r---;jrg-:-g~re=-=g=-a7-:te=--~---~- ·-ifgg..::.r~eg=:;:a"7t-e--.,..--------..;;.;:=~::....=.;;:.z_~;:;=..:.-__.;;
~eserve
'Best on
'N'ew
witbdra~ls
statement
Mar. 2, 1922.
Eank of
~
York
Philadelphia
Cleveland
Richmond
.Atlanta
Ct.ieago
St.. Louis
Minneapolis
Jt .ns as City
...
D~.llaa
San Francisco
_20, 669, 342.05
~~n7.. 342.. 58
1 952, (1{2.., 69
Witbirawals
t
616,787.68 [$
1,29.0,~8.00
812, O.Ol ·
Deposits
....
14; 075, 000. 00
2,000,400.00
an:l transfers
to Asent 's fund
t
deposits and
· transfers from
.Ae;ent 1s fund
14,015,000.00
2,000,400.00
2.,000.,.100.. 00
44,~,849.71
}2,
,644..-99
1,393,119. 44
.· s46.. 352.22
6, 095, 000.00
6, 095, ooo.·oo
9~ 82 1 016. o6
2 , J7ij1 180.. 65
933.. ~16.80
50,000.<?0
50,000.00
26,~,056.21
35.. o47,146.. <b
32,51.1,083.16.
1 ..
588. ~
556 ,()95..
jlZ"
637,950~00
. 573, 76.45
353.. 150.00
497, 91.3 .. 17
81.2,741.31
774,180.00
2.,000;100.. 00
-
2,.000,100.00
1, 009, ooo.oo
31000,000.00
J,OOJ.,700.00
-
•
'!" R
A N.S FER S
----------------------...-.-..............
Debits
Credits
-:
"~
t
'
2., 000, 000. 00
1.,. ooo, 000. 00
1.,000,000.. 00
~
1,500,000.. 00
1,000,000.00
1,5oo,ooo.co :?
2, 000,100. 00
1, 009, ooo. 00 .
3, 000, 000... 00
4, )25, 700.00 .
500.,
ooo.oo
.·,)<
c
"'otal
It 519,7lf6,.41s.56 It
9,543,245.08 I~ J3,233,3oo.oo ft &s,-543,245.os t~ 34,555,3oo.oo· ft 6.,5oo.,ooo.. oo lt 6,500,()0()..00 <~
----------~---------------~--------------~--~~~------------~--~~~~ ~~-·--~~------~~----~---------------------------·------------~----~~~
Federal
Set+:lements from Ma;reh }, 1922 to March 9~ 1922
Balance in
Sumnary of ch8nges in ownerReserve
inclusive.
fund at close
ship a( gold by banks th~
.
.
Bank of
. of business
transfers and settlements •.
----~--~-~-------------~-----~-~---~~------~~~~~-~----------------~-Wet
Total
Total.
Net
Val'·9· 1922 ..
Debits
Cr~tts
Credits
».crease
Increase
J
Boston
---------------------------··· ....
Bew York
'Philad.elphia
Clevelan:l
RiebnODi
-tlanta
Chicago
St. Lmis
Minneapolis
Kansas City
Dallas
San J'renciseo
Total
-
~.913.01
1, 569..515.89
2, 737, 752..19
6,013#377-35
.64
1#081.. 913.01
1,569,515.89
1,2376 752.19
5.573~377.35
6
~~
I
~
~~~----
-"
-
.
--
·------
FEDERAL RESERVE
A
-- - - - -
-
-----------
--
G EN T S 1
FUND
X-3355 a
Washington~
Summa
Federal
Reserve
Agent at
Withdrawals
Boston
I$
110~ 000, 000
New York
I
411;,000,000
Philadelphia
Cleveland
l$
t
1
I
5, 000,000
120,; 389, 26 0
16o_. ooo. 000
Richmcmd
Atlanta
I
I
Chicago
. st.
Louis
lllirmeap.olia
Kansas Ci-ty
Dallas
I
t
,.
t
30,795.000 t .
63,000,000 I
322,6l64., 500 I
66,1QO,OOO I
'
.I
I
-
2,500,000
~oop,~ooo
2,000,000
t
l
10,000,.000
l$
I
'
l
,I
I
l
I$
I
15~000_,000
l
I
I
5_,000,000
9,000,000
10,000.,000
3,,000_,000
6,000,000
2.,000,000
5,000,000
•.
3J,J60,000
-
1,484., 000
I
Total
)$ 1,519,647, 760
I
l,OQQ,OOO
J$
1~,000,000
I$
D.
c.
1922,
Balance at
close of
bus.i.nesu
Mar.
1
Total·
Deposits
10,
I$
110, 0001 000
I
t
I.
411, ()00, 000
I
t
1J0,38~_,2.6o
I
I
I
I
I
I
15,000_,000
1 &o~ ()()(), 000
5.,000,000
32, 795_,000
11, 500, 000 .
74~500,000
33~,644.,500
20,000.,000
1,000,000
f
65,100,000
t
13,,200_.000
~
5,000,000
1.000,000
34,360. 000
1,~000
1,322,000
192,675, 000
Mar~h
I$
5,000~000
1,~.000
8.,200,000
San Francisco
3, ooo, ooo
Withdrawals
for
tranufers
to bank
Depouits
I$
I$
I
(CONFIDENTIAL
Deposits .
.Total
through
transfers
Withdrawals
fran bank
14,500,000 }$ 1,,322,000
1,322,000
15,000,000
f$
59,000,000
I$
19,322,000
2cb,J5J,OOO
15,000,000
I$
73,500,000
'·J$
1,573,82~ 760
:·· ·"'$
.c,·.
,;;;.·
c.,,·
.;,._,.
('";: ...
X-3356 .,.
!l'RBABURY
~A.R~!r
WASHlNGWN
The
,,
fl._..-''~ .... c)j:
March 7, 1922.
Governor
Jederal Reserve Board.
Sir:
You are advised that the Dep1rtment bas referred to the Comptroller General of
the United States, ~reasury Department Division, tor set~1ement, the account ot tht
.Bureau ot Engraving and l?rintins tor preparing Federal reserve notes during the
period February 1 to February 28, 1922, amounting to $160,192.98, as to1lowa:·
F!deral.Beeerve Notes, 1914
il.
GQ.
$20
A100
To,tal
s,ooo 2,329,000
New Yotk •••••••••••• 1,258,000
162,000
906,000
11'1,000
Phi1a~elph1a ••••••••
8,000
109,000
...
Cleveland •••••••••••
160,000
·51,000
25,000
84,000
e,ooo
10,000
BiclDDond ~· •••••••••••
2,000
Atlanta •••• , •••••••• ~
65,000
7,000
52;000
&.ooo
Ch.icago ................
'12,000
4,000
2,000
81,000
15~.000
St. Louis
5,000
1,000
4,000
...
Minneapolis •••••••••
26.,000
~e.ooo
2-ooo
Kansas City •••••••••
'11,000
45,000
261000
~ge?,.ooo
san Franc i 8C 0 ••••••• ~o~.ooo
l1~.ooq
66.QQQ
5,000
1,'15'1,000
3,231,000
1.160,000 3>9,000
3,2~,000 sheets at f49.58 ·········: ~160,192.98
The charses against the several Federa4 Reserve Banka are as to11ows:
1
...........
Sheets
Opep,.;.
sat ion
l1ate
Printing
IAc.Com- .
Materials P!nsation
Tot!l
Hew York •••••••• 2.329,000 ~38,'1'1'1.85 $57,194.13 i28,43'1.09 $11,062.75 $115,4'11.8~
Philaclelpbia •••• 117,000 1,.94~.05 1,868,49 1,428.5?
555.'15
5,800.66
Cleveland •••••••
160,000 2,664.00
2,655.20
1,953.60
760.00
7,932.80
Bichmond ••••••••
10,000
166.50
159.70
122.10
47.50
495.8Q
Atlanta •••••••••
65,000
1,082,.25 1,038.05
793.65
2()8.;75
S,222.7Q
Ohicaso ••••••••• 159,000· 2,647 .s5 2,5S9,23 1,941.39
755.25
',ees.22
st. LOUiS •••••••
5,000
83.26
79,85
61,05
~3.75
247.9Q
MiDnea~lis •••••
28,000
466.20
44'1.16
341.88
133.00
1,388.24
X.saa OitJ •••••
71,000 -{..t~~82_,;1~ .l...J_3-'.!J'
866,91
337.25
3,90.18
San rrancisco •••
287,000;
·7~8·~~
4,5S3o39 3.;p4,27 1.3§3.25
4 2 .46
3,231,000 53,7 6.1 5i.599·07 39,450.51 15,347.25 160,192.9
I
I
1
I
I
L
.
.
The Bureau appropriations will ~e re1l'Uuree4 ln ~ tbe above amount fJiom the in. . definite appropriation "Prepa.rat1cm. anctlssue ot federal Beaerve lbt&a,. Be1m'bursab1e". and it is requested that :pour Board cause such 1ndetlnite apprOpriation to
be reizribU:reed 1n lllle amount.
By direct1on ot the ~retar,v:
Beepecttu.ll.y ..
s.
P. Gilbert,Jr.
Under Secret&l7•
•f
-'
D I S C 0 tJ N T.
TR AN
GI
T A lf
1)
TABLE
11 C> N. E Y D E P A R
f
M I R 'r
J
A-3357
J'
1..
\
• '
#
·~
Name of Bank
UNITS HANDLED PER. DQI!LAR OF EXPENSE
TOTAl! tJEENSE - 1921
Disc9Unt
'l'rmsit
Money
DISCOUNT
Number
units
handled
per
Appardollar Index. ent
SDent Number Rank
TRANSI!
MONEY
Number
Number
units
units
handled
handled
Appar- par
per
A~ pardollar· Index -ent
dollar Index vnt
Number Rank
soent Number Rank
BDent
. COMBINED
Weighted
In4ax
Number
:,
Appar.•nt
Rank'
!c
'cj•
..
$ 51., 921
$ 337.,101.
$ 199.838
1.59
138
5
151
178
1
1~a
196
2
181
1
229,048
1., 000,430
756,234
.65
57
11
90
l<l>
4
948
250
1
155
2
Philadelphia
50,316
475.,109
264,441
J.C2
263
1
114
134
2
397
1o4.7
6
132
3
Cleveland
76,947
644,388
355.,416
.. 99
86
9
76
89
9
322
85
7
87
9
Richmond
84,957
488,509
193,511
1.47
128
6
82
96
6
254
67
8
91-9
s
3
504
133
3
130
4
36
12
60
12
Boston
New York
i>
Atlanta
87,925
204.,649
223,501.
1.81
157
2
99.
116
Chicago
156,576
965,525
1,473,422
1.64
143
3
71
84
10
138
St. Louis
76.,559
431,331
233,214
l .. o4
90
8
80
94
1
398
105.0
5
97
6
Minneapolis
94,690
389,6C2
273,492
1.15
100
7
59
69
12
185
49
10
66
1Q
Kan8as City
lt,G, 79&
646.,854
192,903
.93
81
10
89
1<1.)
5
223
9
90,617
)61.,056
831789
1.63
142
4
78
92
8
4ol
59
1o6
4
103
270,.879
664., 516
275,583
·57
50
12
65
76
u.
178
47
11
64
Dallas
San Francisco
'
g2.4
·.··'
7
(
. ;1
,,
;
~~
~{
fc
5
9
u
;
Avera&!
$118.1Ql: . ~ .550.. 7~
$ 377.112
1.15 - 100
85 - 100
179 = 100
100
~~,.>
.
2,·
"
fQ:Uw
NUMB~
QE
NUMBEB,
~:t.QYEE~l..9a
-
Nam~
gt
Bank
Dj.iiJ~ounjj
DISCOUNT
Index Appaunite
Number rent
handled
Rank
by each
ellll:l1oyee
Number
units
handled
by each
elilD1ovee
Number
· Ttans;i.jj
Boston
24
209
New York·
94
651
28
Cleveland
Richmond
!!swa
Q[
Iw:Il:S BAWLiD BI E.GCij IMELOYEE
TRANSit
-rnJex
Number
Appa.-
rent
Rank
units
han,iled
by each
eDID1oyee
AppaNumber rent
Rank
·'
.
3,445
118
8
243,236
153
1
1,152.,170
90
6
388
1,587
55
11
138,879
87
10
1,846,711
144
261
90
5.. 428
186
1
200.,830
131
3
1,163,829
15
271
92
5.,075
174
3
179,762
113
4
36
Philadelphia
128
263
64
3,4~
119
7
149,279
..
93-7
COMBINED
Weighted Appa.•
Index
rent
Number
Rank
140NEYf
Nwab&r Index
1
128
104
5
91
5
126
3 ·.
1,243.,51.1
97
4
112
4
7
769,461
60
11
i
1
2
1
·i
-
.E
.:·
90
9
-~
'
Atlanta
30
87
74
5,315
182
2
233,748
147
2
1,530,008
119
3
142
1
Chicago
65
510
200
3,949
136
4
135,18.3
S5
:u
1, 015.,833
78
7
87
ll
St. Louis
33
2o6
94
2,420
83
9
' 163_,266
102
5
985.387
77
8
93.1
7
Jlinnea.poli~
29
178
31
3.. 765
129
6
128,658
81.
12
1,628,978
127
2
92-9
8
Kanaae·City
57
383
55
2,388
82
10
150.. 043
94.2
6
780,889
61
10
89
10
Dallas
31.2
191
38.4
3.,859
133
5
146,686
92
9
878,102
68
9
94
6
291·9
~.4
1,419
49
2. <312 = 100
12
148.,658
93
8
5Sl,<l>5
12
75
12
~'59.\00
: 100
45
= 100
.;
Francisco
(Average
San
1()9..4
46.6
292
f Number of pieces sorted.
'
..
111.6
•.·
l
282~017
100
,.•..
~
~
-
'"'"~
cS
·ci
X-3358
:f"':"
_:00
~~
r,__:-, __ _..,. .{
TREASURY
DEPART~~T
Office of Cashier.
tr. S. PAPER CURRENCY
Q!ILY STftTEMENT
UNITED STATES
SII.VER
.-..,NI.:...;.n;;;.;t.:;.;;:S;.__ _ _ _ _C.:.:!:.:.:.·;RT t:i"ICfl TES
t~EASURER 1 S
GOLD
CERTIFICATES,
CASH BALANCE:
On.es • • .. • • • • .. •
Twos • • • .. • • • • •
Fives
••.•.•••
Tens . . . . . . . . . . . .
Twenties •
• • • •
Fifties. • • • .. • • • - - - - - - - - - - - - - - - - - - - Total
TREASURER'S RESERVE SUPpLY:
Ones . . . . .
Twos .• • •
Fives ••••
Tens ......
Twenties ••
Fifties., ••
..
.. ...
. ... -------------------""
Total
AMOUNT AVAILABLE FOR SHI'!'MENT FROM
m!1SURER•S CASH AS SHOWN ABOVE:
Ofi!a· ~.. • • • • • •
Tw-os
• •
• • • • •
Fives • • • • • • •
Tens , .
• • • • •
Twenties. • • • • •
Fifties • • • • • • • • - - - - - - - - - - - - - - - - - - Total
U. S. CURRENCY DELIVERED FOR DESTRUCTION ••
FREE SILVER • • • • • • • • • • • ~ • •
mEE GOLD • • • .. • • • .. • • . • • • •
<-;_- .,.
rl..
F.EDERAL RESERVE BOARD
WASHINGTON
X-3359
March 13, 1922.
SUBJEC'J:':
Dedsion in
-~tlanta
PaT
Clearance Case.
Dear Sir:
There is enclosed herewith, for your
information, copy of the opinion rendered by
Judge Beverly D. Evans of the United States District Court in Georgia, in the litigation between
the Federal Reser~e Bank of Ptlanta and a group
of non-member banks in Georgia, as received by the
Federal Reserve Board in telegraphic form.
Very truly yours,
Governor.
ENCLOSURE
GOVERNORS OF llt.T; F .R .EJ\NKS
COPY TO CH.AIRMEN
~
_3.)
c
0 p
y
X-3359a
r ;;. -'.q
·-
"Beverly D. Evans District Judge:
This case was heard by me on its merits and., after
consideration 1 find as follows:
a.rgumant and due
1~
Under sections 13 and 16 of the Federal Reserve Act the Federal Reserve
Banks are e11powered to accept any and all checks payable on presentatiol}
when deposited with them for collection,
2.
Cheeks thus received must be collected at par. The Federal Reserve Banks
are not permitted to accept in payment of checks deposited with them for
collection an amount lass than the full face value of the checke.
3.
In the discharge sf its duties with respect to the collection of checks
deposited with them, and with respect to performing the functions of a
clearing house., the several Federal Reserve Banks are empowered to
adopt any reasonable measure designed to accoZ~plish these purposes. To
that end a Federal .Reserve Bank may send checks to the drawee bank directly, for remittance thro~ the mails., of collections without cost of
exchange. lf the drawee bank refuses to remit without deduction of
the cost of exchange., it is in the power ~f the several Federal Reserve
Banks to employ any proper instrumentality or agency to collect the
checks from the drawee bank, and it may legitimately pay the necessary
cost of this serVi ca.
4,
The process of the daily collection of checks., in the exercise of the
clearing house functions 1 is not rendered unlawful because of the fact
that Of the checks handled two or more of them may be drawn on the
same bank ..
5.
It 1~ a legitimate feature of the clearing house function of a Federal
Reserve Bank to publish a par clearance list., that is, a list of banks
on which checks are drawn that will be collected at par by the Federal
Reserve Banks. But inasmuch as a conclusion may be drawn from the
appearance of a bank's name on the par 1 ist that it agrees to remit at
par, or has agreed to enter the par clearance system., 1 do not think
such list should include the naroo of any non-member bank, unless such
non-member bank consents.
l see no objection to including in the par
clearance list the names of towns or cities, with .a representation that
the Federal Reserve Bank will undertake to collect at par checks drawn
on any bank (member ~r non-member) in such town or city.
6.
In the inauguration of its par clearance system, I find that the Federal
.Reserve Bank of the Atlanta District was not inspired by any \<erior
purpose to coerce or injure any no~member bank which refused to remit
at par.
Specifically I find the charge that the federal Reserve Bank
at Atlanta would accumulate ch~cks upon country or non-member banks until they reach a large amount, and then cause them.to be presented for
payment over the counter, so as to oompel the plaintiffs to maintain so
much cash in their vaults a$ to drive them out of business, as an alternative to agreeing to remit at par, is not sustaiped by the evidence.
:~ "~
X-3359a
- 2-
1·
I find the evidence insufficient to sustain any charge in the bill that
the Federal Reserve Bank was acting illegally.,. or exercising any right
it· had so as to oppress or injure the plaintiff banks.
With regard to
the publication of the names of non~ember banks on the Federal Reserve
Bank's par list while I do not think the evidence justifies a finding
that such publication was done to injure o:r oppress plaintiff banks,
nevertheless I do not think the names of plaintiff banks, or any of them,
should be included in the list without their consent.
The general result of my findings is, that the plaintiffs are entitled to
the writ of injunction ·against the inclusion of their names on the par
list without their consent1 but are not entitled to an injunction for
any other matter complained agai~st the respondents.
Let an appropriate decree be submitted giving effect to the foregoing
findings. This March llth 1922~.
March 13., 1922 ..
\"
~1 •••. ~
'·~. ,. ___
FEDERAL RESERVE BOARD
WASHINGTON
SUBJ~C'.r:
OO~T D.1.~.a.
X--3360
FOR KII.NDLlNU CURREUC!
Dear Sir:
The Treasury
Curr~ney
Committee in its study of the
various pheses of the currency situation is desirous .of dbtaining the following inform.:;tion and the Federal Reserve
Board suggests that the Federal Reserve Banks furnish the
Board, for trang,mission to the Commi&tee, ac the earliest
date practicable figures, if available, covering the items
listed:
1.
Amount of capital investment in cancellation
and cutting machinery, including cost of installation.
2.
Cost of handling currency on the basis of l,OOO
notes:
(a)
(b)
(c)
{d)
3·
Shipping, postage, insurance, ete.
Sorting and counting.
Cancelling and cutting.
Administrative expenses.
Jr,-erage mmber of used notes, .both fit and unfit,
received and counted daily by tlle banks during
the months of January and February 1922.
Very truly yours.,
Walter t. Eddy,
Assistant Secretary.
To all Governors of Federal Reserve Banks.
;_;_
GOLD
Balance last
statement
Mar. 9. 1922.
Boston
New York
Philadelphia
Cleveland
Ricbnond
Jtlanta.
Chicago
St. Louis
'Minneapolis
Kansas City
Dallas
San ~r3l".Cisco
~ .. 3,8,~9-07
O.lg
6~:·~~..
, ~,200.2
"47,3:J"',l88 .. cb
30.55.4"'592.08
22.,612,423.-72
67.~858,786.25
22,230,988.31
}0,455, 743.87 ·
34, ~.. 192.• 64
19,189,217.17
37,118,581. .. 84
March 16
·Gold
FEDii.ML RESERVE BO.AiiD
SETTLEMENT FUND
l 22.
Aggregate
Deposits
apd
tragsf~rs
to A ent 's fur.d
556,310.00
1,~~840.00
~h 930.. 00
1,212,.3ai.49
984,020.00
603,850.31
91!7,952.95
565,477-50
495,639.61
589, 850.00
765,267..13
785,941.31
March 1 · 1q22. ·
CONFIDENTIAL
Gold
witbirawals
Wi tblrawals
X-33bl
Washington, D. C.
600.00
12,576,500.00
l, 001,300.00
3,200.00
1, 500,000.00
2, 000.00
2,600.00
2,244~50
l, 000,.,5p().OO
501, 300. 00
. 500,000.00
11 500,000,00
5'561 310.00
!_,565_,840.. 00
l5"'947,9JO. 00
11 21.2,.}06.49
984,020.00
2,603,850.31
30,~7_,952.95
565,477-50
495,639.61
5, 539, 850. 00
765,2€>7.13
785,~1.31
Aggregate
deposits and
transfers from
ent •s fund
00.. 00
42,576,500.. 00
l, 001_.300. 00
3.. 200.00
1"'500, 000,.00
2, 000.00
2,600.00
. 2,244.50
1,000,500.00
5011 300. 00
TRANSFERS
-------------~------~~----------··~
Debits
Credits
-
1,500,000.00
1, 000,000.. 00
.31 .. ooo, coo.~
...
2, 000,000.00
5"' 000,000.00
-
1.8,000,000.00
1,.500,000.00
2,000, 000.. 00
4, 000, 000. 00
500.,000.00
2,131,000.00
-
500,000.00
500, 000.00
500,.000.00
2,.500,000.00
j$ 485,758,473.48 (t
10"'020.,385 .. 30 tt
18,590"'244.50 J$ 551 C20,.385.30 I$ 49,821,.244.50 l$ 35,000,000.00 l$35.-000,000..00
---------------~--------------------------------~~--~-----------~----------------------------------------------------------------~--~---~--------~
SUDIIIa.ry of changes in OWJ3e~
Faderal
Balance in
Settl~nts frQD March 10, -"1922 to March 16. 1922 ·
Total
Reserve
Bank of
inelusive•
---------------------------------------------------------------------------Net
Total
Total
Debits
Debits
Credits·
fund a.t close
of business
!thr- 16, 1922.
ship of gold by banks tbrov<
transfers ·and .settlements.
-------------------------------~-~·
Decrease
Boston
New York
Philadelphia.
Cleve lend
-
1, 542, 379· 99
Richmond
748,767-r91
.Atlanta
Chicago·
St. Louis
Minneapolis
Ka.ns as City
Dallas .
1,127, 584. o6
980.19
-
5,829,644.. 46
1, 621, 878.52
San Francisco
Total
-
-3.483.61J.te
7I 979, 729• 51 '
51,214, 9JJ. 93 I $
-
2,627,584.. o6
1, 500,980.19
.
-·
-
2, 329. 6144..146
2,121,878.51
4,135.827... 09
24, oc6. oo.s3
I$ 24,. oo6,~.SJ
c.?
CJr
.~
.
•
Vla.9hing tell. D•. ~ ••
l 22.
'Mb.rchl
W1 thdi'awals
Wi tb:irawals
Depos 1.ts
for
Gold.
through"
New ,York
Philadelpbia
Cleveland
f$
I
I
I
Ricbnond
Cbicae~.
st.
LoUis-·
l$
411, OCJ, 000
I
~·
130,389,260. 1160, 000, 000
~195,000
.-
Atl~~-
11o,ooo;oqo
.
I
t
JJ4.6lt4~500
.I
t
.I
..
Depoeita
I$
I
;,qoo,ooo I
.
3.-000.000
f
-
I.
t~fers
f$
l$.
I JO_. 000, oOo. l
.t
'
l
13,.200, 000
Kansas Ci_t,.
34.. 36o~Ooo
I
I
~484;000
J
I·
San Francisco f
. 2o6, 353, 000
....
8,000,000
Total
\$
-·
t
JO., 000., 000
f
...
1., 231, 000
I
160, ()().('), 000
J
·1
)0,000~000
I.
8,000,000
I
l
I
2, ooo,. ooo 1
5,000,000
-
133,319,26o
~,000,000
I·
l
t
I
-
1
2~ 795.000
I"
3.. 000,000
· ·"
close of
bm:iness
Mar'· 16
'
I
...
iJalance at
381.~000
-
..
.
,J
]
110, 000,. 000
I
l
2,000;000
-
-
Depoa~1ts
l
l$
5,.000,000
8,000,000
..
-
Withdrawals
...
....
Total
from bank
65,100,000
74.,500,000
Minneapolis
Dallas
-c
~1'8Dsfera
to bank
l3oston
'· ~·-t
· ~~
X-3361 a
7$~~·990
'
35&.~.. 500
I
1_, 231,. ooo 1
'
67,lOO,Q00
13,200., ()(X).
5.. ooo, ooo
37,360,000
1,484,.000
205,1~000
-;}~
'l~
---------------~------------~-------------__;._ _ _ _ _ _ _ _ _ _ _ _ _ _ _••c;;<
:ii
.Ji
Total
-~
:-
.
..
{-
FEDERAL RESERVE BOARD
WASHINGTON
X-33E2.
March 17, 1922.
SGBJECT:
Expense llkin Line, LeaseJ. Wire System, February,l922.
Dear Sir:
~:-.. ..:::os':.::c~ he . . ·.:-·11-.. yvu .·.i:l fL_..:;. t-vo mirr:eo§:raph so;;atementll, X- 3362a end X- 3362"::;, coverL1§:' in ietail opere> tions of
the main line, Leased \"!ire System, during c. he month of February
1922.
..
Pleese credit i:he amount payable by your bank in the
general account, Trefaurer u, s., on your books, and issue
C/D Form l, Netional Bcn~s, for eccounc. of "Salaries and Expenses,
Federal Reserve Boaro., Sp:::cial Fund", !eased Wire System, sending
duplicate C/D to Federal Reserve Board.
Very trul,v yours,
Fiscal Agent.
Enclosures.
TO GOVERNORS OF PLL BANKS EXCEPT CHICAGO.
..
~
.
;.
X- 3362a
REPORT SHOWING CLPSSIFIC.ATION AND NUMBER OF WORDS
TRP,\JSWTTED OVER WIN LINE OF THE FEDERPL RESERVE
TEASED WIRE SYSTEM FOR THE MONTH OF FEBRU.PRY, 1922.
From
Bank Business
Per cent of
TotAl :Bank
Business(*)
Treasury
Dept.
Business
War
Finance Corp.
Business
Total
--------------------------------------------------------------------------<:95
157:309
46,518
To tel F. R.
Banks
w,.s!.ti~g ton
6.71
9.21
12 ·37
7. S7
3·72
8.12
6.32
14.62
97 6, 383
265.364
100.00
1,242,747
Percent o:E To tel
5,464
81.61%
'(, 63u
:/)1
6,061
9,238
7,918
7.732
4,483
8, 639
4,503
1'3 ,l_ll
5,529
4,271
249
688
14,558
13,180
213
9,060
38,076
167,638
51' 653
77 ,2EZ
77,066
103,391
128,932
83.330
55,315
101,151
66,447
164,991
'90,327
136,204
48,542
4.946
1,115,252
407.514
226,531
':,)
65,476
89,882
l2C, 765
74,910
36,274
79.332
61,731
142.776
"tle.nta
Total
7-07
<_)
..,~r:..
Chicago
St. Louis
Minneapolis
K•=mses City
Dallas
Sen Francisco
~.:rand
3-32
16.11
4. 76
C.SJ ,015
Boston
New York
Phil ed.e l phi a
Clevel?nd
Richmond.
53' 488
1,522, 7%
14.88%
BaM But.iness
TraEsury Business
1,242. 747 nords or 84.58%
226,';231 II
" l~ .42
TC!rAL
l,469.278
FFDE:RftL RES'ERVF PN'Rr
V,!PSHINGTON, D. C.
M!'RCH 17 I 1322.
217
10,329
5,135
lLO.OO%
3·51%
X- 33t2b
,_
FEDER~L
;!.,.,_
Operators'
Salari~s
Name of Bank
Boston
York
Philadelphia
Cleveland
Richmond
NeN
$
Operators'
Overtime
250.00
789.98
Extra
Compensetion
Wire
$ .250.00
11.39
301.87
;...
225.00
524.00
300.00
240.00
4,894·33
4.(;0
300.00
27).00
352.82
182.0(.
395-0(;
':t8,724.13
Fe:ienl
Credits
$
666.36
3,233·43
955·38
1,41:3.02
1,)46. 7 6
1,648.54
~
Reserve
Boaru
250.00
$' 416.36
80l.37
2,431-56
225 .(A;
524.()(;
300.Lv
240.0(.;
$
730-38
395·02
1,046. 76
1,608.54
~,
411.55 (*)
,432. 78
'+,394·33
1, 539.44
300.00
1,239-44
746.64
1, t29. 7 6
1,268.48
2,934-37
275 .C'O
471.64
1,276.94
1,086.48
352-32
16:: oliv
39::5. (;()
2. 539 ·37
tl5. 89
$16,821.18$25,561.20
(a)5,49l.24
$20,070-96
$3,740.02 113,7 42.49
.
(&)2,411.51)_
$11,330.94
lt1clu:tes sElsries of WtsLin§;ton Open:·c.ors
.Amount reimbursat 1e to Chicago
CreJ.i t
Includes i3,942.S>S received from 1're·-sury Depar1..ne:-n, :ond tl,543.26 from War Finance Corpor:-r.ion cuvering
tusiness for months ot SerLerr::cer, 1921 tnt J<=>nu""ry, 1922, rcsr.;ct,~'.rely.
~'F.DFl. ''
L Rfi;fii Ji'J1i:
"
•
PayALlc to
--~----------------------------------------------------
$20,070-96
,
Pro rata
Sbare of
Tol.al
E.o_pense
16,321.18 16,821.18
----------------------------------------------------------
(#-)
(&)
( *)
(a)
1922.
Total
E..<pense
Rental
$ -
Res. EoarJ
·rocal
FEbRU~RY,
225.')0
524.JO
300. :)()
240. 'j(;
Ptl"--nt,a
(#)4,3jC.j3
ChiC'"'gO
St. Louis
300.0U
Minneapolis
275· ~u
K~ns-s Cit.y
352.32
D:lles
1S2 .00
S2n Francisco
395-C>O
~4'e.i.
REPGrtT OF EXPE1\!SE
MAIN LINE
RESERVE LEASED WIRE SYSTEM
}! OfRD
W.~ SHINu'I'UN,
D. C.
MJRCH 17, 1322.
-; ..
FEOERAL RESERVE BOARD
WASHINGTON
. £,.;a.cch J. 51 1 j2::::.
Stc:tem(mt :i..ssued by Secretary of Treasury
SUBJECT~
-
Dear Sir:
There is. transmitted
her~with 1
for your information1
copy of a statement issued to the Press today by the Secretary
of the Treasury 1 with reg'"rd to payments of gold certificates.
Very truly yours,
G o v e r n o r.
Enclosure.
GOVERNORS OF ftLL F. R. BANKS
COPIES TO CH.ft Il1.MEN.
"i·~)
FCR RELEASE, MORNING PPPERSJ
TREASURY DEP Jl RTMENT.
Saturday, Murch 18, 1922.,
ST,~Tm.IENT BY SECR2T/~.Y
MELI.ON.
The Secreta.ry of the Treasury announces that the Treasur:r
has now resumed payments of gold. certificates in ordinary co1.:rse
of business without dem<md 1 and that the Federal Reserve Banks
throughout the country ;;;ill be guided by a similar policy in making
current payments for Government account.
This action removes the
last artificial restriction upon gold payments in this country,
though gold has at all times during and since the war been freely
' paid out by the Trear,ury and the Federc:.l Reserve Bar"ks ·.vhenever demanded in payment of gold
oblig~tions.
.
FEDERAL RESERVE BOARD
WASHINGTON
MarGh 21 1 1922.
X-3364
SUBJECT:
Treasury Currency Shipments.
Dear Sir:
There is enclosed herewith 1 for your
information~
copy of letter addressed by the Under Secretary of the
T:-sa2t'r/ to the Tre :::;s;.,:rer of tLe United States cc:.:r~ainiug
instructions with respect to handling shipments of paper currency
presented direct by banks and others to the Treasurer of the
United States for redemption.
Yours very truly}
G
o v e r n o r.
(Enclosure)
TO GOVERNORS OF ..lLL FEDE&L RESERVE &iNKS ..
' f
' ..
X-3364a
(COPY)
March 17, 1922.
Tha Honorable,
The treasurer of the United Stat 3s.
Dear Mr. Treasurer:
In
or~er th~t
tary1s letter of i~arch
the instructions embolied in the Secre-
61 1922.. may be carri:d out .cfectively, you
1;ill, until furth;;or notice .. L'lf,ko diract shipments of Unit0d States
paper currar.. cy to bsr.ks and others ,;hich present United
St~
tes paper
currancy direct to the Treasurer of t.B United Statet; for redemption,
instead of making such shipments through the Federal Reserve Bank of
the district as contemplate.i by the Currency Regulations dc:tea Augu.::t
30~ 1S20.
In making, such return ship<nents of currency direct to banks
e.nd others you will be guided as to denominations and other.;ise by
the instructions contained in the Secretary 1s letter of March
6 1522.
1
Until further notice you will apply the same pol icy in
rneking return shipme:::ts of United States peper currency upon redemption of Federal Reserve notes .. Natione,l l~<nk notes and Federal Reserve
Bank nctss presented direct to the Treasurer of the United Stet~s for
red er.1p t ion.
By direction of the Secretary:
Respectfully,
(Signod) S. P. Gilbert, Jr.
CTn.Ier l:iecretary.
·'.-1..-
FEDERAL RESERVE BOARD
WASHINGTON
I.!erch 22, 1922.
,,
Purchase and Scle of Gove~ent Securities by Federal
.Reserve Banks Cutsi:le of their own Districts.
EUBJECT:
r.:;,.:: .....
-~·
..
Paragraph (b) of Section 14 of the Federal Reserve Act, which
authoriz as Federal Reserve Bar.k;:; to buy and sell bonds and notes of
the Un::.ted Stetes, etc. 1 provi:les thrct such purchases c.nd s2les are
"to be ma:le in accordance with ruJ.es and regulations prescribed by
the. Federal Reserve Board".
By virtue of the authority vested in it and in accordance ;d th
a requ3St received from the Trea..::.UlJ Department, vihich is dEJsi.rous
that all t1·ansactions in Goverr.illlent securities be made thro,)gh the
Federal Reserve B::nk.:.o 1 the Board has n;led ·that \ivhemever any Federal
Reserve Bank desires to buy or sell bends, notes 1 or certificates of
the United States) or c:ny other GoverrJl'Ilent securities 1 o,;.ts:ldo of its
own district} it shall transmit i tG orcter for the purchase or .,de of
such securities to the Federal Reberve Bsnk of the di~trict in -;;hich
such purchase or sale is to be effected.
Very truly yours,
G o v e r n o r.
GOVERNOH:::' AND .AGENT;:. PLL F. n. BPNKS
......
·~:<";}~r?:j1~~
FEDERAL RESERVE :BO.ARD
GOLD SETTLEMENT FUND
X-3366
Washing ton~ D.
SUTm'la
of trens!Cti.a for
Fed.eral
Reserve
Bank of
Boston
New York
Philadelphia
Clevelam
Ricbnond
Jtlanta
Chicago
st. Louis
\ftnneapolia
Kansas City
riod enii
.Aggregate
Mar ..
16. 1922.
Witbirawals
28, ~ 715. l
90, ·2.~,557.60
6o,03:L183. 73
~,126~811.08
29,528,192.09
19,261~805.50
~078, 742.85
19,o4o,171.25
29,459, 624.07
31~68$887 .. 10
Dallas
21,Qij5,828.56
San FrP.ncisco
34,927,813.-44
Total j$ 480.,559,332.68
1$
8 ,115.00
1,578,550.00
1, 009,620.00
1,555, 796.6s
S49,2TI.;·OO
699,276.00
1,001,899-05
691,169,.60
327, 924.17
510.,619.;71
·749.007.92
885,500.00
10.,664, 755.13
. deposits
8 ,115.
1,578,550.00
1,009,620.00
1,555, 796.68
849,277.00
699,276.00
1,001,899.05
691,169.60
327, 924.17
510,619.71
749,007.92
750.00
6,2~809.00
1,582,800.00
8,~500.00
•
a,ooo.oo
5.. 6oo.oo
20,0e2,300.00
- ·
885,5~00
1$
am
transfers from
t •s fuDi
to .A ent 1s fund
7.582,800.00
8, 004,500.00
. g,ooo.oo
5, 600.. QO
2,300.00
t$
.Aggregate
wi.tbirawals
and transfers.
Deposits
c.
March 24., 19?2 •
CONFIDENTIAL
llalanc.e last
statement
·:;:~~
1$
750.00
7,.994,300.00
43,598,250.00
:?A
. .
-~
) ,J
.~f:
_TR.AN_SFERS
---~---------------~----~~~:
Credits ....~
9,000,000.00
2,000,000.00
5,000,000.00
3,000, ()()0.00
17,000,000.00
6,000,000.00
2• 000, 000.00
3,000,000.00
-
....
-
6,~CXJO.t00
I$ 66,ooo,ooo.oo I$ 66,ooq,ooo.oo
.-.~
ii?:
:
'
·-;.
-i
c.~
----------~----------~------------------------------~--~------------~----~-------------------------------------------------~----------------~~
Federal
Settlements from March 17, 1922 to March 23, 1922.
13alance in
Sumnary of changes in ~ ·
:1~
Reserve
inclusive..
·
fund at close
ship ~ gold b7 banks thX'O\llb ;::]
llallk: of
----------------------------.;.-----------------------------------------of.,bus1ness.
tr8JlSfera and settleiDB!lts. ·.- ..:_y/1
Net
Total
Total
~. 23, 1922. --------------------------.:.-~~·
Debits
Debits
Credits
IncreaM ' C:;li)
21,804,750.00
10,664,755.13
13oston
·New York
Philadelphia
Cleveland
Richmond
.Atlanta
Chicago
St. Louis
~nneapolis
Kansas City
Dallas
San Francisco
Total
-
26,96o,257.14
1$ 26.,96~~~
-~
•0')
, , .. ' .. : x•,;;; _"
;~ -x •, (;; ,[':~~:i,i,.i~~l
FEDERAL
RESERVE
AGENTS'
FUND
X-3365a
Su.rmary of transactions for -perioi ending March 23, 1922 ..
Gold
Gold
Balance last
Federal
statement
Reserve
Wi thdraJ"''als
~gent at
Mar. 16, 1922.
Deposits
(CONFIDENT! AL_}
Deposits
Total
through
transfers
WithiraNals
from bank
Wi tbirawals
for
transfers
to bank
Boston
I~
110,000,000
I$
New York
I
I
381,000,000
I
"Philadelphia
Cleveland
I$
f$
I$
I$
1
10,000,000
I
I
I
I
I
133,389, 260
I
f$
1
It
I
100,000,.000
381, 000, 000
I
10,000,000
133,389,260
160., 000, 000
160,. 000; 000
Richmond
29, 795;000
~tlanta
78, (.'IJC, 000
3,000, 000
Chicago
356,~44.,500
4,ooo,ooo
St. Louis
67,100,000
Minneapolis
13,200,000
Kansas City
37,360,000
Dallas
I
,.
1_,000,000
3,000,000
2_,000,000
4000,000
1,500,000
I
I
29,795,000
76,000,000
1, ooo, 000.
332,644,500
66,600,000
1,500, 000
-.
I
I
13,200,000
37,360,000
,...
205,122_, 000
t.
I~ 1, 573,094, 76o
I$
l
I
24,000,000
20,000,000
1,484,000
San Francisco
Total
Washington, D. c.
March 24~ 1922.
Total
13alance at
close of
business
Deposits
Mar. 23. 1922.
1_,484,000
1, 793,500
19, ooo, ooo
I$
~~ 5oo, ooo
t $ 21,793, 5oo I t
1$ 4o, 793, 500 1$
203, 328, 500
1.,793,500
2,5oo, oco
t$
1, 534., 801, 26o
·-~·fill
~
m
~
.
.•
FEDERAL RESERVE BOARD
WASHINGTON
X-3367
March 2 4, 1322 •
SUBJEW:
.Action of Federal Reserve Board. on Recor.~
meniations of Governors 1 Conferences.
Dear Sir:
Follo;;vino:: the l.o s t con£ ere nee of the Governors of t~18
Federal Reserve B:~s the :Board. had. corresponience rdth several
of the banks reg.,_r::.ing some of the recO!lliLeniatiGns meie et that
conference which iniicated th?t there ;v?s no general u..YJ.:ierst~mding
as to the force sn6.. effect to be given to such recom'1:endetions.
The Governors' conferences consiier certain subJects
suc.Ees ted by the Fe:ier,-1 Reserve Bo2rd ani in c:?i(l.i tion consider
other subjects sug;;asted. by the Governors C:J.U FeQere.l Reserve
b~nks.
Some of the recotnmend.? tions adopted by the conferences
heve expressly proll'iiei that the recomr::an-...?tions 2,re made nsubJ :ct to ·r,he approval of the Federe.l Reserve :Boeri"; while other
recommend.~tions hrve oeenmade idthout any express reference to
the :Boer:i, the conference ap:rarently .iecid.inl:'. in each instance
whether the subJect metter of the p,"'rticulF!" recomrrenJ.etion is
such the.t the Boa rei iJ\l'Ould v.rish to pas;; upon ths 11'.2 t ter.
The Boc;r..._ has d.ec iuei thE t he reaf te r it •vill con;; id.e r
e2.ch r~_co:r~-~-L:-nic.tion m9G.e by the Governors' conference in order
th · t it ,-H<'Y i12ve en opportunLy to express its vievs u:r:;on any of
t:r.e v~rivus subj;c~.-s, en::.. th"t un.,il Lne :Eoar.:L hc:s cn:"otm~ei its
rc . . ion ·it..• respect co ~:: reconmenJ.Ftion ~he Federal Reserve l:c.ru;.s
sh:vl:~ m ks no ch2n .e in their pre-existing pr2ctices on account
oi: lhc rc;coilli'Leniation.
is heretofore, che Boari will in most instances Il18rely
or ..:..isa~prcve ·~he recon:a!Jm~etions, ~'n.i suet c.cc..ion will ·ce
indicnive of _:r...c Bo2.r:: 's view -=·s co the a.Jviszbility c·f puttin~"
the rc.com"en:~~tions i:i'lto effect 8t t.he VP.rious Feueral Reserve :ban.&s,
bu.;, Nill net ·be inten.:.,e:.t. l?s a m·ri...Latory Lcirection ·c.o tne FeJ.er2l
Reserve B"nks.
E7e:c.. after sucD "'l?:t:rov.~l or d.isapprov:.::l, eac ..1.
"'~~rove
..
''
.
X- )367
..
- 2 -
FeJ.erel Reserv-:; Bank m2y iecbe iJhot~1er c,r not-, in cile ligi:lt of
the recormrenie·cion anJ. the :5oari 1 s action tnerecn eni ?ny other
circumstence3, it vill follO'N the re·comnend.ation.
If, huNever, the Boen. rdahes to eJ.opt eny recorrLenC:ation so &s to §:i<Je
it lihe force ani effect of a rulinc, che Eo~ni ,Ifill so state in
its announcement to the Fe.1er1:·l Reser.re ]!Cnks.
Sin:ilarly, ·cne
Boer:·. will so specify if for any reaso:1 it intenis its .iise.pprovPl
;:;s e. prohi.oition e?,einst the F3::1eral Reserve :2&rd.:.s putcing, '= recomn:en::..etion into effect.
Yours very truly,
G o v e r n o r.
TO
GO\F~!,!JS.S
Ff:D~,:; IlL
~"'ID
R?SE?.VF "G-E""JTS.
,(•
FEDERAL RESERVE BOARD
WASHINGTON
Y- 3368
,
Mar,ch 2 4, 1922.
SUBJECT:
·Dee_r Sir:
I enclose hersNi
G.C,
for ycur inform- cion, copies
of letter;; frmr. tne Secret&ry cf the Tree.sury, one iatel
March 21
en~
-she ocher March 24, 192_:', ,v-hich relate to
golJ. peymenta cy Fe::...er&.l R-::serv.;.. ler.J<:s.
Very truly .l: ·~-<ra,
G
o v e r n o r.
GOVE?\TORS 'LL F. R. :HR~S EXCE'Pl N.Y.
COPES Cli"IRME-:' ~~LL F. R. :S'::-T"r<:S (inclu·-.L1 N.
1
Y_.l
COPY
THE SECRETARY OF THE TrtE.ASURY
Washington
X-3368a
Maroh 21, 1922.
My dear Governor:
I have received and noted your letter of March 141 1922, with
the enclosed copy of a letter from Governor Seay of the Federal Reserve Bank of Richmond, with reference to payr.;.ents of gold certificates.
I assume that notwithstanding the position taken by Governor Seay with
respect to gold payments by the Feder9.l reserve banks, the Federal Reserve Bank of Richmond will nevertheless be guided by the instructions
contained in my letter of March 6th to the Treasurer in making payments
for account of the United States. I assume that the Federal reserve
banks will also keep in mind that under the lavi the issue and distribution of United States paper currency is under the supervision of the
Secretary of the Treasury and that the Secretary of the Treasury1 under
the act of March 141 19001 as amended, is charged with the duty of
maintaining the parity of all forms of money with gold. The currency
system of the United States is squarely established on a gold basis,~
and it is a well-recognized attribute of an unrestricted gold standard
that gold be not only held in reserve and available for issue in settlement of foreign balances but also circulate freely and without restriction in domestic transactions. This can be done without dissi;ation of
the country's gold supply~ and without loss by abrasionl through the
internal circulation of gold certificates~ and the result should he not
the loss of gold 1 as feared by the Federal Reserve Bank of Richmond, but
rather the building up of a secondary gold reserve which will be available a~Iain for accumulation in the Federal reserve banks in case of need.
So f ~r from encouraging hoarding, this should make i t clear to all that
all the currency is on the same gold basis, without discrimination in
favor of geld, unless the Federal reserve ba.11ks themselves should by
maintaining an artificial position with respect to gold indicate nervousness aJout their gold reserves.
I notice that the Federal Reserve Bank of Ricnmond states that
in its opinion the Federal reserve banks should continue, as a
''consistent, unalterable policy * * * to accumulate all the current
gold of the country."
This extreme view apparently arises from the
fact that ever since their organization the Federal reserve banks have
been accumulating gold and have now come to believe that it is the
normal process.
I have indicated~ in my letters of March 6, 1922,
to the Treasurer of the United States and the Federal Reserve Board
why I believe that there is no longer any occasion to folloYi this artificial practice and have stated that the Treasury will follow a different
policy. I need hardly add that if the Federal reserve banks should
all adopt the policy advocated by the Federal Reserve Bank of Richmond1
-2-
the result would be to nullify the gold policy adopted by .the
Treasury unless the Treasury should itself resume direct issues
and redemptions of United States paper currency fo:::- the banks of
the country~ and restore the system of currency distribution which
prevailed before the currency regulations of August 30, 1920,
were put into effect.
Very truly yours,
(Signed) A. W. Mellon
Secratary.
Hon. W. P. G. Harding~
Governor, Federal Reserve
Washington, D. C.
Board~
COPY
THE SECRETPRY OF THE TREASURY
Washington.
March 24, 1922..
My dear Governor:
I received your letter of March 16 1 1922, and have noted the enclosed copy of the letter of March 14th from the Federal Reserve Bank
of Chicago1 on the subject of gold payments. The Federal Reserve Bank
seems to be under some misapprehension as to the payments it makes for
Gove~ent account. These payments are not; of course; limited to operations connected with the so-called "Fiscal Agency Functions" of the
bank. As depositaries and .fiscal a~ents of the United States, the Federal Reserve Banks handle United States paper currency anti coin received
for redemption and replacement, and make payments in new currency received
from the Treasury. Both redemptions and issues are handled through the
freasurer 1 s account with the Federal Reserve Benks. Under this procedure
perhaps 90 per cent of the United States paper currency issued and redeemed goes through the Federal Reserve Banks, and it was intended that
in these operations the Federal Reserve Banks would be guided by the
instructions given to the Treasurer of the United States in the Secretary1s letter of ~.~arch 6, 1922.
To some extent the same is true of
other currency payments charged to the Treasurer's account 1 as up~n re•
demption of Treasury certificates 1 interest coupons and Treasurer's
warrants arJ.d checks.. In these circumstances it is not clear what the
Federal Rsserve Bank of Chicago means by the statement that it can com·
ply with the request of the Secretary of the Treasury without changing
its preserJ.t policy.
Vary truly yours,
(Signed) A. W. Mellon
Secretary.
Hon. W. P .. G. Harding,
Governor, Federal Reserve Board,
Washington, D. C.
F E D E R A L
R E S E R V E
B O / R D
STATEMENT FOR THE PRESS
X-3369
For release in Morning Papers,
Saturday, April 1, 1922,
The following is a review of general "business and
financial conditions throughout the several Federal
Reserve Districts during the month of March, as
contained in the forthcoming issue of the Federal
Reserve Bulletin.
The outstanding feature in business development during the
past few weeks has been the improvement in basic industries, including steel, especially railway equipment, copper, and other metals,
A marked increase in the production of automobiles has also been a
feature of the month.
Building activity which has been on the up-
grade for several months past, continues its growth, February permits
being about 40 per cent in excess of those of February, 1921, while
the advance is still continuing.
Ag against this favorable trend in the physical volume of
production in basic lines is the fact that a variety of conditions
have operated to offset the encouraging improvement which has been
noted in textiles during the winter months.
Prominent among these
unfavorable influences is the disturbed relations with labor, but uncertainty as to cost of production and lack of forward orders have
produced a depressing effect in those districts where no labor troubles
have made themselves felt,
No important changes have been observed
in other manufacturing lines, such as leather, boots and shoes.
X-3369
-
2 -
Agriculturally, the month has been one of favorable development
considering the
season.
Winter wheat prospects are re-*
ported good in most parts of the country,
Cotton planting indicates
increased acreage although a heavy infestation of boll wesvil is
predicted.
tions.
A larger use of fertilizer is also reported in some sec-
Prospects for deciduous fruits are reported encouraging.
Labor conditions in the agricultural regions are regarded as satisfactory.
/ material increase in the demand for labor, largely the
natural seasonal growth, is reported from most districts.
According to official figures, marke.d, even if still limited, decrease in unemployment is under way.
This is partly due to the
greater activity of basic industries already referred to, and partly
to seasonal growth of demand for labor, but offsetting it must be mentioned the voluntary unemployment growing out of strike conditions,
both present and prospective.
In trade, both retail and wholesale, the tendency has been, on th
whols, downward, although not pronouncedly so.
In certain Districts
seasonal activity has resulted in an absolute increase in particular
lines of wholesale trade, as, for exanple, in the case of shoes and
dry goods.
Retail trade, on the other hand, is uniformly lower than
it was a month ago or than it was at this time last year.
This is in
a large measure due to postponement of buying resulting from the lateness of the season but is also in part due to a longer continuance of
unemployment.
X-3369
- 3 The movement of commodities to market during the month has "been very
satisfactory. Increase in car loadings has been noticeable in many parts
of the country.
Grain shipments during February have been larger than in
any month since October, 1921. A satisfactory movement of livestock and
meat products is also reported..Better earnings of railroads demonstrate
the growth in freight tonnage which has bee# a striking feature of recent
weeks.
The advance in the index number of wholesale prices shewn by the
Federal Reserve Board's compilation amounts to 4 points for the month.
This change is largely due to the advance in the prices of agricultural
products.
In wholesale
lines some declines have taken place but prices
have been tolerably firm, although where they have been so, restriction
of the activity of trade has .bean a feature.
The process of evening
up prices through interindustrial adjustments is still incomplete.
Financially the month has shown but little change.
Discount and in-
terest rates have not moved materially. Foreign trade shows a somewhat further decline with a much closer approach to adjustment of export and iirport
figures both hare and abroad. Increasing stability in foreign exchanges,
with the exception of marks, has been the rule. Further liquidation of
"frozen" loans in the West and South has been effected and raports from
these parts of the country show tnat a satisfactory line oi credit is being extended for the planting of new crops.
Increasing specie reserves
and declining portfolios in Federal Reserve Banks show that there has been
no increase in the demand brought to bear by member banks for commercial
accommodation.
-4AGRICULTURE.
X-33&9
The quantity of grain stored on the
farms an
March 1, 1922, was considerably smaller than on March 1, 1921. Stocks
of oats have registered the greatest reduction and are 4l per cent
less than a year ago, while stocks of wheat are 40 per cent less,
stecks of barley 37 P e r cent less and stocks of corn 16 per cent less.
The•condition of winter wheat has shown marked improvement during
March.
District No, 10 (Kansas City) reports that the wheat plant is
making a very favorable showing in the eastern and southern parts of
Kansas, and that recent rains and snows in Oklahoma have greatly aided
the crop.
The drought has been broken in the Texas Panhandle, accord-
ing to District No. 11 (Dallas), and that section now has the brightest
crop outlook in many years.
Reports also indicate that the condition
of winter wheat is good in District No. 8 (St. Louis), but severe
sleet and ice storms
have caused considerable damage to winter grains
in District No. 7 (Chicago).
District No, 9 (Minneapolis) states that
winter wheat is in splendid condition, as it has been well protected
by snow.
Plowing and preparation of soil for corn is now in progress
in most of the southern states and seeding of oats is under way in
Missouri, Kansas and Oklahoma.
Planting of sugar cane in Louisiana has
been hampered by wet and cold weather, but the cane already planted is
reported to have escaped damage.
COTTON.
The final ginning report on the 1921 cotton crop showed
total ginnings of 7,97&,&^5 running bales.
The price of middling up-
land cotton at New Orleans on March 15 was 16.75 cents, which is the
same price as prevailed on February 15.
There is a general tendency
-5-
•
X-3369
throughout the cotton belt to hasten planting of the new crop, as an
early start helps to minimize the depredation j f the boll weevil.
o
District No. 11 (Dallas) reports some increa?^ in cotton acreage this
year, and states that timely rains have put the soil in a condition
which should be conducive to the quick germination and growth of the
plant.
Reports from District No, 6 (Atlanta) indicate an increased
acreage and a tendency to use- fertilizers.
In District No. 5
(Richmond) rain and snow have delayed spring planting, while the
generally mild winter has permitted the hibernating of a large number
of boll weevils.
TOBACCO.
Virginia tobacco sales in February and early March
were comparatively small and prices generally low, due to the fact that
the Jiulk of the offerings were barn scrapings and low grades sold to
wind up the season's crop.
Sales of bright tobacco in Virginia to
March 1st were 60 per cent and of dark tobacco 85 per cent of those in
1$20-21.
Prices realized for the former averaged lower this season
than a year ago, but dark tobacco brought higher average prices. Leaf
dealers report improved foreign demand.
In Kentucky, the Burley
Tobacco Growers Cooperative Association, it is reported, has continued
to operate in a very satisfactory manner.
crop is not heavy.
It is now evident that the
A large part has been delivered to the Association
and already sold, although some is in storage.
satisfactory.
Prices have been very
A plan is now being inaugurated to organize am associa-
tion in the dark districts of western Kentucky, and is expected to be
completed for handling the lg22 crop.
District Nc. 3 (Philadelphia) reports no evidence of the improved
demand for cigars usually expected at this time of the year, and the
X-3369
-6-
demand is still very uncertain and irregular.
/Ithough dealers' stocks
are low, they are buying only goods they absolutely need,
January
sales of revenue stamp3 for cigars were less than in any month within
the past three years.
FRUIT.
Movement of citrus fruit to market from California and
Florida showed some decline during February.
Growers belonging to the
California Fruit Growers Exchange received an average price (f.o.b.
California) of $3*39 per box for oranges and $3-93 P e r box for lemons
in February, as compared with $2,15 P e * box for oranges and $2.03 P 0 r
box for lemons in February, 1921.
Tho market for Florida oranges is
also very strong and substantial premiums are paid for standard sizes.
Prospects for deciduous fruits are thus far excellent, but it
must be remembered that there is still danger of frost damage in many
parts of the country.
District No. 10 (Kansas City) states that the
outlook of orchard fruit is very favorable, although there has been
some winter killing of peach trees.
Orchards are in bloom in most
sections of District No. 11 (Dallas) and promise large yields unless
damaged by late frosts.
District No. 8 (St. Louis) reports increased
strawberry crops in Arkansas and Mississippi, and a more careful and
scientific treatment of fruit orchards.
Shipments of apples from
District So. 12 (San Francisco) amounted to 47,335 carloads up to March
4, 1922, as compared with 29,12$ carloads shipped in the corresponding
period of the previous crop year.
District No. 12 (San Francisco) reports heavy exports of both
dried and canned fruits in recent months.
Only 8,511,851 cases, or about
15 per cent, of the 1921 pack of California remains in the hands of canners
-7-
X-33b9
and both foreign and domestic demand is increasing.
Prices for canned
apricots, peaches, pears, and cherries have all advanced since the
beginning of the season, but are considerably lower than at this date
last year,
GR£J.N MOVEMENTS-Receipts of grain at 17 interior centers were
larger in February than in any month since October and exceeded January
receipts by 7«5 p®r cent.
Corn receipts at these 1 7 centers were larger
than in any month during the past two years, due to heavy increases at
Chicago, Indianapolis, Kansas City and Peoria,
Wheat receipts were 18.5
per cent larger than in January, and showed particularly large gains at
Kansas City, Chicago, and Omaha.
Receipts of oats, rye, and barley
also increased at interior centers, while there was a slight drop in
the receipts of flour.
Grain receipts at nine seaboard centers were
slightly larger in February than in January due to the heavy movement
of com, although the receipts of wheat, rye, and barley declined.
Stock* of grain increase^ at both interior and seaboard centers. Stocks
of corn were much augmented at all reporting centers, whereas stocks of
wheat, oats, and barley were somewhat diminished.
FLOUR. February production of flour in most Districts showed an
increase over both January, 1922, and February, 1$21.
In District No, 9
(Minneapolis) the reported February, 1922, production was 1,802,781
barrels, as compared with 1,935,75^ barrels for January and 1,839,799
barrels for February, 1921.
Eleven leading mills in District No, 8
(St. Louis) reported a decrease of 8 3 , b a r r e l s from the January, 1922
output, but an increase of 1,872 barrels over the February, 1921 production.
In District No. 7 (Chicago) on the other hand, a comparison of February,
1922, figures with January, 1922, and February, 1921, showed increases of
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X-3369
1 9 . 5 per cent and 40 per cent respectively.
District No. 1 0 (Kansas City)
reports that 80 mills produced 1,498, 813 barrels during February, 1922,
an increase of 356/5^3 barrels, or 31*2 per cent over the production of
84 mills reporting in February, 1921.
Reports from District No. 12
(San Francisco) showed an increase from 711,292 barrels produced by
57 mills in January to 745,650 barrels produced by 64 mills in February,
Toward the end of February, prices were higher in District No. 7
(Chicago) in response to the higher price of wheat.
however, the demand subsided-
After March 1,
District No. 10 (Kansas City) likewise
states that there was a drop in sales at the beginning of March.
Throughout the period there has been a good export demand while buying
for domestic consumption continues to be for immediate needs only.
LIVESTOCK. Receipts of cattle and calves at 15 western markets
during February were 1,345,487 head as compared with 1,128,020 head
during January and 835,686 head during February, 1921.
Receipts of
hogs decreased from 2,882,551 head in January to 2,530,092 head in
February, which was 372,015 head less than a year ago.
February receipts
of sheep were 913,642 head, as compared with 1,101,679 head in January
and 972,647 in February, 1921.
District No. 10 (Kansas City) remarks
that February was notable for the number of stackers and feeders sent to
the country.
On account of low temperature in some parts of District
No. 12 (San Francisco) and the consequent backwardness of pasture lands,
California grass fed cattle are expected to come to the market in May,
a month later than usual.
At present the livestock in the District is
reported to be in favorable condition.
Returns from 35 packers show an increase of 1.8 per cent in average
weekly sales in February over those of January, 1922 and 3^ show a decrease
-9of 14.2 per cent as compared with a year ago.
x
-33&9
Higher prices in February
were a factor in the increase of dollar sales over those for January.
Domestic trade in fresh and cured meat8 during the early part of March
was rather slow on account of the lenten period, reports District No. 7
(Chicago),
Export demand for meats and provisions fell off during the
first part of March.
COPI.. Production of bituminous coal showed an increase of 9 P 6 r
cent over January and 33 per cent over February last year.
The output
for the month was 40,951,000 tons, @n average of 1,706,000 tons per
working day, which is the
1913.
highest rate of production for February since
Production for the coal year to March 4th was 39^/ 9^5, 000 tons
compared with 496,639,000 tons for the previous coal year to March 4,
1921.
Stocks in the hands of consumers on January 1st amounted to
47,500,000 tons and. there were 7,200,000 tons at the lake docks. Demand
has suffered a general falling off, except in District No. 4 (Cleveland).
The decrease in general is attributed to the uncertainty as to prices
after JSpril 1st, and to the fact that railroad and public utilities have
accumulated large stocks and are no longer increasing their reserves.
Production of anthracite coal for the month was 6, 7o2,0C0 tons, an
increase of 8 per cent over January and a decrease of 12 per cent compared with February last year.
Demand for both domestic sizes and steam
coal is governed by seasonal influences and purchases are sufficient to
cover only immediate needs-
Although certain large users have stored
coal in anticipation of a strike, in the main, consumers do not seem
concerned with the fear of a shortage, and retail dealers and domestic
consumers alike appear to be. desirous of entering the new coal year
-10with minimum stocks.
X-33b9
Consequently producers have been compelled to store
a large proportion of their output and their reserves are heaVy.
Some
retail dealers have endeavored to stimulate demand by shading prices, but
the practice has not been general- production of beehive ccxe for February
amounted to 53^*000 tons,an increase of 8.5 P e r cent over January. Consultation and prices are bet car than last month, a reflection of increased
iron cr. 6t33l operations. Stocks at by-product plants now amount to
..l
more than 1, 000,000 tons.
PETROLEUM. Reports from all the more important oil fields indicate
an increased output of crude oil during February.
Due to this increased
production and the lessened demand, it is estimated that stocks increased
over 8,000,000 barrels during February.
District No. 10 (Kansas City)
states that during February 4j}0 wells were completed as compared with
U95 in January and 771 in February 1921.
The average flow per completed
well was 156 barrels as compared with 149 barrels in January and 85
barrels in February a year ago.
Gross production during February in
Kansas, Oklahoma, Wyoming, and Colorado totaled 13,141,692 barrels for
the twenty-eight days of the month as compared with 14,375^000 barrels
in January and 11,$03,000 barrels in the corresponding month last year.
Reports from District No. 11 (Dallas) show a daily average production of 4$1,404 barrels as compared with 481,165 barrels during
January.
The north Texas field and the Mexia field were considerably
hampered by weather conditions.
In this District 223 producing wells
were completed with an initial flow of 258,135 barrels.
The total pro-
duction for the District was 13;759*335 barrels as compared with 14,916,130
barrels in January. District No. 12 (San Francisco) also reported an increased average daily production during February.
The stored stocks in
that District stood-at 36,701,810 barrels on March 1 as compared with
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X-3369
22,903^39 barrels on the corresponding date a year ago.
Forty-one new
producing wells were completed during February, as compared with 52 wells
in January.
District No. 11 (Dallas) reporte a slight weakness in crude oil
prices during the month.
Corsicana heavy decreased from 95 cents per
barrel to 75 cents per barrel.
However, the prices posted at the various
fields are now equal to, or higher than, those posted at this time a year
ago.
IRON AND STEEL.
Further improvement in the iron and steel industry
occurred during February although there was some recession in activity early
in March.
District No, 3 (Philadelphia) reported that plants in that section
received less business than those located in other parts of the country and
were operating at about 45 per cent of capacity as compared with a rate of
6 0 to 6 5 per cent elsewhere.
Daily iron production in February averaged
58,214 tons as compared with 53*063 tons in January.
The output of steel
ingots advanced, the net gain amounting to 148,863 tons according to the
American Iron and Steel Institute.
Unfilled orders of the United States
Steel Corporation receded to 4,141,C69 tons at the end of February, the
lowest total since December 1914.
The decrease of over 100,000 tons as
compared with unfilled orders at the end of January is, however, largely
attributable to the increased activity that prevailed in the steel mills
during February.
Demand from automobile manufacturers is better and con-
siderable buying is being done by the railroads. Prices of some products
such as plates, bars and shapes advanced in March and that is true also of
some grades of pig iron. Nevertheless, the upward movement is by no
means general and as a matter of fact declines have occured in certain
grades of pig iron, while the average of steel prices shewn by the composite figure compiled by the Iron Age for March 7 was below the average
of the same date a month ago.
—
AUTOMOBILES,
X-3369
12 —
District No. 7 (Chicago) reports increased,
activity in "both production and shipment of automobiles during
February.
Manufacturers who reported 81,47 4 passenger cars
built in January, show an output of 107,626 cars during February
or an increase of }2-l per cent over January.
Truck production
of companies reporting 8,8)2 trucks built in January, was 12,443 during
February, or an increase of 40-9 P e r cent.
Production is also in-
creasing in District No. 4 (Cleveland) but buyers are not purchasing
for stock but against sales.
There has been an improvement in
the automobile body business in that section although automobile
axle business is probably not in exces's of a year ago.
NONFEKRQUS METALS-
Due to the announcement that a number of
copper mines were to reopen, the demand for the metal slackened in
Feb ruery.
On March 15, however, the price of copper (New York, net
refinery) was 12-75 c@#ts per pound as compared with 12.$0 cents
on March 1-
The export demand lately has taken so much copper off
the market that producers generally have not cared to attract domestic
trade by price cutting.
Copper production in February amounted to
37,415,808 pounds as compared with 25,848,284 pounds in January, but
was less than 50 per cent of the amount produced during February, 1921.
District No. 10 (Kansas City) reports declines in both shipments and
prices of zinc ores from the January record for the Missouri-KansasOklahoma zinc and lead mines, the total shipments of zinc ore being
27,043 tonR as against 28,431 tons during January.
Shipment of lead
ores showed a material increase over January and over February a year
X-3369
- 1 3 ago.
Production conditions gradually improved during the month
in this District.
Both lead ores and mine ores registered a notable
increase in price during February.
Stocks of zinc on hand at the
end of February were 64,124 tons as compared with 65,678 tens at
the end of January.
The total production of zinc was 22,513 tons
in February as compared with 23,706 tons in January.
Conditions
industries in
in the gold, silver, lead and zincraining/DistrictNo. 12 (San
Francisco) continued to improve slowly during February.
COTTON TEXTIIES.
The reduced rate of activity in the cotton
textile industry which was reported a month ago, subsequently became
even more pronounced.
The extensive strikes in certain sections
of New England have not stimulated activity in other parts of the
country, and cotton consumption drorped from 526,562- bales in January
to 473.073 bales during the month of February.
In New Hampshire
and Rhode Island, the reduction in the amount of cotton consumed
amounted to 45 and 26 per cent, respectively, although the full
effects of the strike were not felt until the middle of February.
Mill operations increased slightly in Connecticut and Vermont
but were substantially unchanged in Maine and showed a slight
loss in Massachusetts-
The cotton goods market in District No. 1
(Boston) was reported to be dull during the first three weeks of
March and print cloths sold lower than at any time since the beginning of* the year.
The southern mills were also feeling the
influence of lessened demand and District No. 5 (Richmond) reported
the industry to be " largely on a hand to mouth basis" .
In Dis-
trict No. 6 (Atlanta) production in both cloth and y a m mills de-
X-3369
- 14-
creased according to the reports received from representative
mills located in thet section.
Forty-one cloth mills showed
a reduction in the yardage output during February of 3-6 per cent
as compared with January, tut an increase of 42.2 per cent as compared
with a year ago.
Shipments increased 1.8 per cent as compared
with January and 72.5 per cent as compared with February, 1921.
Orders on tend at the end of the month were 4.J per cent below
those on hand at the end of the preceding month but were 53*3
per cent above those on hand a year ago.
The reduction in
the output of 38 y a m mills amounted to 1J-6 per cent during
the month as compared with January but was nevertheless 33*8 per
cent above the output for February, 1921.
Y a m shipments fell
9,7 per cent but were 35*6 per cent greater than a year ago. Orders on hand at the end of the month dropped 15 <5 P e r cent as
coirpared with January and were 13-S per cent above the amount
outstanding at the end of February, 1921.
WOOLEN TFXTILES.
Activity in woolen textiles showed a slight
improvement during February, according to the statistics of active
and idle machinery and percentages of idle hours reported by the
Bureau of the Census.
The percentages of idle looms to total
reported fell in all cases-
For looms wider than 50" reed space
the percentage of idle machinery on March 1 was 3^*5 as compared
with 34.3 at the beginning of February.
The corresponding
percentages for looms 50" reed space or less were 27-1 and 27.2
respectively.
There was a reduction in the percentage of idle
X-3369
- 15carpet and. rug looms from 22.4 to 21.2.
The percentage of
idle woolen spindles fell from 27-0 to 20.1 and that of worsted
spindles rose from 14.3 to 14.4.
The percentages
of idle
hours to tq|al reported were also less in the case of weaving
machinery* the figures for looms wider than 50" reed space
being 3^*1 per cent on March 1 as compared with 35*2 per cent
at the "beginning of February.
The corresponding figures for
looms 50" reed space or less were 31-9 P e r cent and 32-0 per
cent.
The percentages of idle hours for carpet and rug
looms was reduced to 23-1 from 23 • 9 for the preceding month.
Percentages of idle spindle hours fell in the case of woolen
spindles from 25.4 at the beginning of February to 18-4 on
March 1, while in the case of worsted spindles they rose from
13-9 at the beginning of February to 17*3 on March 1.
' Notwithstanding the somewhat better showing for February,
reports from various Districts indicate that the situation is
not so favorable as it was at the beginning of the year^
Dis-
trict No. 1 (Boston) says thet woolen and worsted t i l g | r that
nljjii
section, particularly in Rhode Island, are gradu&lly curtailing
production. The goods market is stated to be dull, especially
in the case of men's wear, and worsteds are not selling as
well as woolens.
In District No. 3 (Philadelphia), a few
firms report ne fairly well maintained volume of business"
but in the majority of cases orders are small and merely to
fill in.
Cancellations, moreover, have increased greatly
X--3369
- 3.6 during the past two weeks -
Production has "been curtailed
and in some cases plants manufacturing men's wear have been
closed down entirely, while manufacturers of women's wear
are operating at a much reduced rate.
District No. 3
(Philadelphia) reports no particular change in the woolen
and worsted y a m situation.
Yarn mills are averaging about
85 per cent of operating capacity, but are working almost
entirely on contracts placed some time ago.
Both in Boston
and Philadelphia markets the demand for raw wool has decreased and Boston reports that "prices have shown a slight sagging
tendency", although on the whole it seems that the market
h*s held fairly firm and sellers - re not disposed to make
concessions CLOTHING.
The s?les of ten wholesale clothing firms
located in District No. 2 (New York) showed an increase of
3 per cent as compared with January.
The 23
reporting
firms located in District No. 8 (St. Louis) also recorded
a fair increase in February sales-
Forward orders were
stated to be somewhat better than in recent months although
smaller than in former years-
Seven wholesale manufacturers
of men's clothing in District No. 7 (Chicago) have about con>
pleted orders for the spring season end it appears that the
"increase in the volume of such orders over those of last
year is not so large as the earlier activity seemed to promise" .
Latest returns show this increase to be about 26
per cent for the season to date.
Eleven tailors-to-the-
X-3369
- 17
trade report orders for suits, received during February to be
61.4 per cent in excess of orders for the preceding month
while the number cf suits m^de increased
per cent as
compared with January.
SILK TEXTILES.
The persistence of unsatisfactory condi-
tions in the market for raw silk continues to be the chief
obstacle to the resumption of activity in the silk manufacture.
Buying on the part of jobbers is in limited quantities and only
to satisfy the needs of the moment.
low rate and stocks are accumulating.
production is at a very
The latest reports re-
ceived from Paters on and North Hudson for March 11 show recessions in activity as compared with a month ago.
In Eater-
son only 3,299 looms out of a total of 15,000#%re active as
compared with 3,653 a month ago, and the percentage of operating loom hours to totsl available bad fallen to 22.28 as compared,
with 23.02 on February 11.
In North Hudson the percentage
of operating loom hours to total reporting was 57-33 as connpared with 57*48 a month ago.
Active looms amounted to
2,468 out of a total covered of 4,l6l as compared with 2,456
a month ago.
#0
HOSIERY.
In District No. 3 (Philadelphia) sales of silk
hosiery have increased and it is reported that some orders for
full-fashioned hosiery are being placed for delivery as far
ahead as June, although many call for prompt shipment.
In
seamless hosiery, both silk and artificial silk, few orders
-
X-3369
18-
are being received except for early delivery.
The returns made
to the Federal Reserve Bank of Philadelphia by 28 firms selling
to the wholesale trade do not, ho/ever, indicate any improvement
in February as compared .vith the preceding month, as both
production figures and unfilled orders on hand at the end of
the month showed a decline, output being 3.1 per cent below
thet of January (in dozens of pairs) while unfilled orders on
hand were 17.2 per cent lower.
But in the esse of nine firms
selling to the retail trade a slight increase of 1.8 per cent
in output was recorded, and unfilled orders at the end of the
month were 18.2 per cent larger.
Output and orders were in
all cases much above a year ago.
The increase in output aver-
aged over 85 per cent for both classes of firms, while the unfilled orders were 148.8 per cent greater in the case of the
firms selling to the wholesale trade and 45-7 per cent larger in
the case of firms selling to the retail^rade.
In District No.
6 (-Atlanta) the plants manufacturing cotton hosiery booked
about the same amount of orders as were reported for the pre1
ceding month, but "the amount of hosiery manufactured by reporting mills was 5*6 per cent less, although 32• 5 PeI* cent
above the total manufactured in February 1921.
Unfilled
orders at the end of the month were 21 per cent below those
on hand at the end of January.
UNDER^R•
In February, 1922, reports were received
from 53 mills producing underwear as compared vith 55 in
X-3369
- 19 -
January, and 63 in February, 1921.
Actual production during
the month continued to show decided progress, as the amount
produced "by the 53 mills was greater than the totals reported
for January "by the 55 reporting mills, and much above the output for the same month in 1921.
A year ago the production
of 63 reporting mills amounted to only 248,431 dozens or 28.0
per cent of normal; in January, 1922, the production of 55 mills
stood at 640,489 dozens or 79"1 per cent of normal; while the
most recent figures from 53 mills place production at 663,346
dezens, or 84.1 per cent of normal.
Production in February
was almost evenly divided between winter and summer underwear,
the former amounting to 332,224 dozens, or 74-0 per cent of
normal, and the latter being 331,122 dozens, or 9"$.4 per cent
of normal.
Comparative reports received from 36 mills belonging to
the Association of Knit Goods Manufacturers of America show an
opposite trend from that displayed during the previous month in
all items except actual production.
New orders received during
the month declined 48-5 per cent from 764,944 dozens in January
to 393,585 dozens in February.
Shipments also declined during
the month, 442,194 dozens being shipped as compared with 531,789
dozens in January, a falling off of 16-8 per cent. Unfilled
orders rose slightly from 1,26l,601 dozens in January to 1,432,368
dozens in February, an increase of 13-5 per cent.
Cancellations
increased 51*7 P e r cent amounting to 10,968 dozens in February
-
dlQ
x-3369
—
as compared with 7,228 dozens in January.
Actual production
rose slightly from 493> 196 dozens in January to 507,022 dozens
in February, or 2.8 per cent.
SHOES ^HD LEATHER. Demand for hides and skins h^s continued
dull, although there vers some large sales of packer hides in
the second week of March.
Prices h^ve receded somewhat from
the February levels for packer hides, calf skins, and goat skins.
Reports from eight tanners in District No. 7 (Chicago) show
slightly larger sales for February than for January.
New orders
booked in March have been for low-grade leather or specialties.
In District No. 3 (Philadelphia)» sales of belting leather have
shown a mode re te increase, .vhile sales of sole leather and
upper leathers have decreased.
Demand for patent leather has
been iuite satisfactory,but business in both glazed kid and calf
leather has been poor.
February output of shoes is slightly smaller than that
of January for most Districts, but would show a slight increase , except in District No. 1 (Boston), if reduced to a
daily average basis•
Eight firms in District No. 1 (Boston)
report total shoe production in February 11-5 per cent less
than in January, but 60 per cent greater than in February, 1921,
Some New England factories which make novelties for the Easter
trade are still iuite active, but those producing staple goods
are experiencing a seasonal slackness.
Production of 47 con-
cerns in District No. 3 (Philadelphia) was 0.9 per cent greater
in February than in January, while shipments increased 15-7 per
X-3369
-*• 21 —
cent-
New orders, however, declined 1 3 . 7 per cent.
Large
orders hrve been booked for sport shoes and for white shoes,
but business of factories which make high grade shoes has
been disappointing.
Reports of 28 shoe manufacturers in
District No. 7 (Chicago) indicate that production in February
was 3-8 per cent less than in Janusry, while shipments increased 10.J P e r cent.
Unfilled orders of 22 manufacturers
were equal on the average to about five weeks" business at
the February rate.
Merchants are buying only in small quanti-
ties and there is an increasing tendency to cancel orders.
District No. 8 (St. Louis) states that February sales of 11
reporting interests ranged from 20 per cent less to 8 per
cent more than January gales.
The demand was centered on
low-priced staples, but considerable improvement was noted in
the call for novelty goods.
LUMBER•
The lumber situation continues to sho/v a slight
improvement, but the spring trade is very lets this year because
of the depression in agriculture, the continued high freight
rates, and the difficulty of adjusting costs cf production to
a lower basis.
Buying is as yet conservative and is only to
meet immediate needs-
However, reports from three lumber
associations in District Mo. 12 (San Francisco) show an increase in production, orders, and shipments compared with January and with a year ago.
Production of lumber for four weeks
ending February 25 was 3^7,678,000 feet, an increase of 6-1 per
X-3369
-
22
-
cent over the production of the preceding four weeks.
Orders
received totaled 355,758,000 feet, an increase of 3*5 per
cent over January and of 69-4 per cent over February, 1921.
Shipments from ths same mills increased from 3^5*249,000 feet
in January to 353'234,000 in February, and were "JO per cent
larger than in February last year.
Logging operators were
working at approximately Fo per cent of normal during February
compared with §0 per cent the month before.
Conditions in the lumber industry in District No. 6
(Atlanta) have continued to improve, in spite of unfavorable
we ether conditions. Orders and shipments for 112 mills in
February were 247,852,100 and 238,332,768 feet compared with
241,135404 and 224,732,954 feet for 108 mills in January. Of
73 reporting mills, 57 were operating full time and only three
were shut down.
Output of southern pine mills in District No.
11 (Dallas) decreased from 85,572,937 feet- for 41 mills during
January to 82,699,889 feet for 42 mills during February.
New
orders during the month amounted to 81,309,962 feet, compared
with 73,888,871 feet during January.
Despite the large in-
creases in shipments, the unfilled orders of 42 reporting mill
on February 28 totaled 51,070,461 as compared with 44,667,936
feet for 4l mills on January 31Lumber sales at retail in District No. 9 (Minneapolis)
X-3369
- 23 were 86-7 P e r cent of those a year ego.
February orders and
shipments of mills both showed a decrease as compared with
January,
District No. & (St. Louis) reports that the hard-
wood msrket following a month or six weeks of softening prices,
declined ^uite noticeably in early March.
BUILDING-
The valuation of building permits issued in
166 selected cities amounted to $l4l,715»2^3 in February as compared with $138, 631,902 in January and $96,023,474 in February,
1921.
The value of permits issued was greater during February
than during January in seven of the twelve Federal Reserve Districts - No. 1 (Boston), No. 2 (New York), No. 3 (Philadelphia),
No. 4 (Cleveland), No. 6 (Atlanta), No. 7 (Chicago), and No. 8
(St. Louis).
These increases varied in size from 0.5 P e r cent
for District No- 2 (New York) to 60 per cent for District No. 8
(St. Louis).
The remaining five|ffiistricts reported decreases
varying from 11 per cent for District No. 11 (Dallas) to 26 per
cent forDistrict No. 9 (Minneapolis).
The value of permits issued in February, 1922, was greater
than in February, 1 9 2 1 , in all of the Federal Reserve Districts,
except No. 7 (Chicago) and No. 9 (Minneapolis).
These increases
ranged frem 7 P e r cent for District No- 5 (Richmond) to 284 per
cent for District No. 3 (Philadelphia)-
The value of contracts
awarded in seven Federal Fteserve Districts (statistics of which
are compiled by the F. W. Dodge Conpany) increased from $150,164,153
in January to $161,220,750 in February.
Increases occurred in
-24-
X-33&9
Districts KG. 2 (New York), No. 5 (Richmond), No, 7 (Chicago) and
No. 9 (Minneapolis), while contracts in Districts No. 1 (Boston),
No. 3 (Philadelphia)^ and No. 4 (Cleveland) showed slight declines,
• h value of contracts awarded for residential purposes in seven
Te
Districts increased from $71,223,*b75 in January to $71,680,853
in February.
Reports from District No. 1 (Boston) indicate that residential building comprises a smaller proportion of the total
construction than in last summer and autumn.
District No. 3
(Philadelphia) states that the prevailing building activity is
the most promising element in the business situation, and that
this activity is largely confined to the construction of small
homes and inexpensive apartment houses.
District No, 5 (Richmond)
reports that the construction outlook is bright, and considerable
supplies of materials and loanable funds are available.
Reports
from District No. 6 (Atlanta) indicate that the housing shortage has
been relieved to a great extent,
District No. 8 (St• Louis) reports
that residential construction is proceeding on a larger scale than
at any time since the beginning of the war, while municipalities
are starting many important building; projects.
M
X-3369
-25-
With, tne exception of tne Sew England district, in which
large numbers of employees in tne cotton mills of Now Hampshire and Rhode
Island and, to a lesser extent Massachusetts, are out on strike, tne
reports concerning the employment situation are distinctly encouraging- The
United States Employment Service snowed a slight increase of 8,894 {.37 per
cent) in numbers of workers employed by 1,428 reporting firms.
Losses
occurred only in textiles end in paper and printing, the former industry
accounting for 19,152 of the total decrease of 19,237.
In tne State of
New York there was an increase of 3 per cent in the number of factory workers
between January 15 and February 15, which was the largest monthly gain reported since September.
In District No. 3 (Philadelphia) an improvement
likewise occurred, as between February 14 and March 15 there was a decrease
of 7 per cent in the number of unemployed in the six cities of Altoona,
Earrisburg, Johnstown, Philadelphia, Scranton and Williamsport.
The
questionnaire based on returns from 236 firms reporting directly to the
Federal Reserve Bank of Chicago showed tn&t the number employed on February
38 nad increased 1.1 p^r cent as compared with the preceding month, the
total number employed at tne later date being 131,609.
In District No. 9
(Minneapolis) it was stated tnat winter unemployment had passad its peak
and that the demand for farm labor and for building workers was expected to
strengthen considerably during the coming month. In Montana considerable
copper
improvement had been noted in
and zinc mining and in the lumber camps.
The Anaconda mines reopened during the past month.
District No. 10 (Kanaas
City) also reports increased activity in outdoor work and the reopening
of a number of industrial plants.
In the lead and zinc mining fields of
Kansas, Missouri and Oklahoma, the situation was better than during the
X-3369
— 26 —
preceding months, although there was little change in the Rocky Mountain'
mining districts.
District No. 12 (San Francisco) reports "Steadily in-
creasing activity of the lumber mills, the near approach of the Alaska
fishing season, and the beginning of railroad and highway construction
work" as having resulted in "a steady diminution of unemployment there
during the month".
Reports from the ten principal lumbering districts
show that 60,697 loggers and lumbermen were on the payrolls on February 15
as compared with 54,350 men a year ago.
WHOLESALE TRADE:
Percentage of increase (or decrease) in net sales in
February 1522 as compared with the preceding month
(January 1922)
Groceries
3ry Goods
Number
Number
Disof Firms ;
of Firms
trict : PerReport- :Per
Reportcentage
NO*
:centage ing
-6.0
2
41
0.2
3
3
-1.4
50
-5.1
14
4
-4.4
25
7.1
11
5
-0.3
48
-2. 1
16
6
—0. 2
31
13.4
IS
7
-3.4
24
—12. 9
10
9
-1.7
14
-22.9
4
10
2. 6
9
0. 2
6
6.4
11
11
19.7
12
12
-14. 2
31
-4.5
12
:
Hardware
Boots & Shoes
Number
:
Number
of Firms
of Firms:Per
Report*^,:Per
Report:centage ing
:centage ing
-3. 0
11
8
-2.0
0.2
25
9. 5
.12
-17.6
18
25.2 18
-12.4
21
19.1
8
6.7
15
8
15.0
0.5
14
7.2
3
17.1
9
-3.1
12
-5.5
21
0.3 13
;
;
Percentage of increase (or decrease) in net sales in
February 1922 as compared with February 1921
2
3
4
5
6
7
9
10
11
12
*-—6.0
-12.7
-20.7
-12.0
-18.9
-13.1
-13.4
7.3
-16.8
-17.8
41
• 50
25
48
31
24
14
9
11
31
-7. 0
-5. 5
1.3
-17.4
-13.7
10.7
-10.3
4.0
-11.7
-1.3
3
14
11
16
19
10
4
6
12
12
-20.0
-16.6
-18.1
-1.7.1
-14.8
-13.0
-30. 0
12.7
-24.2
1.1
11
25
12
18
21
15
14
9
12
21
—20. 0
8
19.7
—0.1
-11.9
83.1
18
8
8
3
-4. 5 13
X-3369
"i
'
- 27 It is evident from the above table that sales of the four principal
wholesale lines for which returns are included compare favorably with a
•year ago.
But the seasonal increases
that might be expected at this
time are not generally in evidence except in the case of boots and shoes.
Dry goods sales in District No. 6 (Atlanta) and District No. 11 (Dallas)
however, reflect the opening up of spring buying although in neither District
did the increase come op to expectations.
District No. 6 (Atlanta) mentioned
the bad weather as having had a deterrent effect upon sales.
The late date
at which "Easter comes, together with the very conservative policy pursued
by retailers in placing
examining sales figures.
forward orders are factors to be considered in
It is also necessary to keep in mind that February
had 4 per cent fewer business days than January.
RETAIL TRADE'
Dollar values of retail sales continued to decrease during
February as compared with those of January.
This appears to be due to the
shorter month, and to the large reduction in prices offered in the special
sales in order to move winter goods preparatory to the spring season.
likewise
Sales
showed a decrease as compared with last February, undoubtedly be-
cause of the severe
weather and lateness of Easter.
District No. 1 (Boston)
reported that the department stores situated in New England cities other than
Boston did not do as well in February, relative to a year ago, as they did
in January, because of the textile strike
prevailing in that part of the
country during February, while District No. 5 (Richmond) attributed the falling off in trade in two cities to street car strikes.
February sales of 444 department stores throughout the country decreased
10.5 per cent as compared with February, 1921.
3.1 per cent in District w o. 1 (Boston)
The decreases ranged from
to 19. 5 per cent in District No. 11
(Dallas-). Stores in all Districts have been laying in stocks of spring
-i
X-3369
-28-
merchandise, so that there has been a general increase throughout the
United States in stocks on hand at the end of February, as compared
with the end of January, but half the Districts show decreases from
the corresponding month last year.'
The receipt of spring merchandise
in quantities naturally increased the average percentage of stocks
on hand at the end of each month since January 1 to net sales during
January and February, and the percentage at the end of February was
471 «5>
as
compared with 424.4 at the end of January.
The ratio of
outstanding orders to total purchases during 1$21 remains practically
unchanged,
PRICES.
Prices of most farm products continued to rise during
the early part of March and in the case of a few commodities the
advance continued through the month.
According to the quotations
furnished the Federal Reserve Board, grains showed slight reaction
about the middle of the month, but the avdrags for the first three
weeks of March was higher than for February.
Sheep and mutton have
continued to show substantial increases and cattle and hogs are slightly
higher than they were at the end of February, although in the case of
hogs, lower than during the first two weeks of March.
Wool prices have
remained firm during the month in spite of a smaller demand from manufacturers than had existed earlier in the year.
Other leading farm
products, such as cotton and hides, have shown the reverse tendency.
Raw cotton prices during the first three weeks of March were higher
than the February average but there has been a steady downward trend
in the market during March.
Cattle hides and calfskins were definitely
#
-29-
X-3369
lower in March than in February.
*
There has been no uniformity in the movement of the prices
of non-agricultural raw materials*
Prices of bituminous coal have
been gradually reduced each week bince early in February and recently
some of the independent companies have also reduced their quotations
for anthracite.
Coke, on the other hand, has advanced in price as
a result of the slight improvement in conditions in the ironmd
steel industry.
Prices within the iron and steel industry proper,
however, appear to be scarcely any, if at all, higher than last
month.
In fact, prices of steel rails and certain other commodities
were actually lower in March than in February,
Copper and tin
prices were lower also than in February, but there was a definite
trend upward in both markets.
Prices of finished and semi-finished textiles were uneven
during March,
In the cotton industry prices seemed to be definitely
on the decline, while in the woolen industry there was considerable
uncertainty and relatively little trading done.
Silk cloth prices,
on the other hand, are reported to have been firm.
Index numbers for February showed an appreciable advance,
the Federal Reserve Board index shifting four points from 133 to
1U2 (on the basis of prices in 1913 ~ ICQ) and the index of the
Bureau of Labor Statistics advancing three points*
As was pointed
out in last month's Bulletin, the most important commodities to increase were farm products.
Provisions were also higher as well as
certain chemicals, oils, and woolen yarns.
*
i
f
-30-
x-3369
FOREIGN TR.ADE. The value of exports of merchandise during
February dropped to $251,0C0,000 which is only $34,000,000 more
than the value of imports for the same month.
This excess of
merchandise exports over imports is the smallest since September,
1914, and indicates a continuance of the tendency toward a more
even balance of trade which has been particularly evident since
last November.
Imports of gold rave declined sarewhat in recent
months, but in February they were nevertheless on a substantial
scale, amounting to $28,700,000.
In February, as in previous
rronths, exports of gold were comparatively insignificant, totaling
only between $1,000,000 and $2,000,000.
It is significant to
note that while in consequence of the fall in prices, the value
of our export trade has been very largely reduced in the last few
months, compared with the same months of the previous year, the
value figures still remain substantially above prewar levels.
So
far as actual quantities are concernedhowever, the Federal Reserve
Board's foreign trade index shows that foreign shipments have
recently been somewhat lower than in the same months of 1913-
F E D E R A L
R E S E R V E
B O A R D
Statement for the Press
For immediate release.
*-3370
March 27, 1922.
The Federal Reserve Board sent the following telegram to all
x Federal Reserve Banks today:
"Without authorization from Board certain press notices have
appeared regarding new regulation as to eligibility of batik&rs1
acceptances in export and import transactions.
Board is today
*
releasing the following information:
"Regulation A, Series of 1$22, superseding Regulation A,
Series of 1920, will be available for distribution probably March
2§. That part of new regulation which relates to eligibility of
bankers' acceptances in export and import transactions will read
as follows:
"A Federal Reserve Bank may rediscount any such bill
bearing the indorsement of a member bank and having a
maturity at time of discount of not more than three months,
exclusive of days of grace, which has been drawn under a
credit opened for the purpose of conducting or settling
accounts resulting from a transaction or transactions involving any one of the following:
(l) The shipment of goods between the United States
and any foreign country, or between the United States and
any of its dependencies or insular possessions, or between
foreign countries."
The following is the Board's letter of transmittal which will
*
accompany the new regulation:
X-3370
2 —
'The F e d e r a l R e s e r v e B o a r d t r a n s m i t s h e r e w i t h R e g u l a t i o n A,
S e r i e s o f 1 9 2 2 , s u p e r s e d i n g R e g u l a t i o n A , S e r i e s of 1 9 2 0 .
'No c h a n g e h a s b e e n m a d e i n t h e r e g u l a t i o n e x c e p t i n t h a t
p a r t w h i c h d e a l s w i t h b a n k e r s ' a c c e p t a n c e s g r o w i n g o u t of t h e i m p o r t a t i o n o r e x p o r t a t i o n of g o o d s , a n d t h a t p a r t h a s b e e n s i m p l i f i e d b y t h e
e l i m i n a t i o n of c e r t a i n m a t t e r w h i c h a p p e a r e d i n t h e f o r m e r r e g u l a t i o n .
It s h o u l d b e u n d e r s t o o d , h o w e v e r , t h a t t h e B o a r d ' s a c t i o n i n i s s u i n g
the new r e g u l a t i o n w i t h this m a t t e r eliminated does not imply any
c h a n g e o f v i e w a s t o t h e m e a n i n g o r p r o p e r c o n s t r u c t i o n of t h e l a w ,
or a s to t h e b r o a d p r i n c i p l e s w h i c h should g o v e r n t h e e x e r c i s e of the
acceptance privilege.
The B o a r d is not r e v e r s i n g or in any w a y
m o d i f y i n g a n y of i t s f o r m e r r u l i n g s a s t o b a n k e r s ' a c c e p t a n c e s g r o w i n g o u t of t h e i m p o r t a t i o n o r e x p o r t a t i o n of g o o d s i n s o f a r a s t h e s e
r u l i n g s h a v e b e e n i n t e r p r e t a t i v e of t h s 1 a w , o r h a v e l a i d d o w n b r o a d
g e n e r a l p r i n c i p l e s , t h e o b s e r v a n c e of w h i c h is, a s a r e s u l t o f l o n g
e x p e r i e n c e i n t h e f i e l d of i n t e r n a t i o n a l b a n k i n g , r e c o g n i z e d a s e s s e n t i a l i n t h e p r o p e r c o n d u c t of t h e a c c e p t a n c e b u s i n e s s .
The Board's
a c t i o n is intended m e r e l y to allow g r e a t e r l a t i t u d e to F e d e r a l R e s e r v e B a n k s f o r t h e e x e r c i s e , e a c h i n i t s o w n w a y , of t h e i r d i s c r e t i o n a n d j u d g m e n t , o b s e r v i n g a l w a y s , of c o u r s e , t h e e x p r e s s a n d i m p l i e d l i m i t a t i o n of t h e l a w .
'Conditions a f f e c t i n g foreign trade at the present time are
e s s e n t i a l l y d i f f e r e n t f r o m t h o s e w h i c h l e d t o t h e d e v e l o p m e n t of t h e
f o r m e r r e g u l a t i o n s . P r i o r t o t h e e n a c t m e n t of t h e F e d e r a l R e s e r v e
Act,national banks were without authority to issue bankers' acceptances,
a n d a l t h o u g h s o m e S t a t e b a n k s h a d t h a t p o w e r v e r y f e w of t h e m e x e r c i s e d
it.
D u r i n g t h e w a r , h o w e v e r , t h e r e w a s a r a p i d g r o w t h of t h e a c c e p t a n c e b u s i n e s s s t i m u l a t e d b y the a b n o r m a l derer.nd f o r g o o d s a n d c r e d i t s ,
a n d d u e t o t h i s r a p i d g r o w t h it b e c a m e n e c e s s a r y f o r t h e F e d e r a l R e serve Board to make frequent rulings and p e r i o d i c a l l y to issue regulat i o n s f o r t h e g u i d a n c e of a c c e p t i n g b a n k s a n d F e d e r a l R e s e r v e B a n k s i n
this new field.
R e g u l a t i o n A, S e r i e s of I 9 2 O , c o n s t i t u t e d t h e l a s t
d e f i n i t e s t e p i n t h e d e v e l o p m e n t of b a n k e r s ' a c c e p t a n c e r e g u l a t i o n s
d e s i g n e d p r i m a r i l y t o m e e t t h e e x i g e n c i e s of t h e u n u s u a l c o n d i t i o n s
that existed d u r i n g and for some time after the w a r , that regulation
c o n t a i n i n g t h e s u b s t a n c e of a l l t h e m o r e i m p o r t a n t r u l i n g s p r e v i o u s l y
issued by the Board.
'Those A m e r i c a n b a n k i n g i n s t i t u t i o n s w h i c h h a v e l a r g e demands
for a c c e p t a n c e c r e d i t s in f o r e i g n t r a n s a c t i o n s h a v e by t h i s t i m e had
considerable experience in this field, and the former detailed regulations
a r e n o l o n g e r t h o u g h t n e c e s s a r y . M o r e o v e r , it i s b e l i e v e d t h a t t h e g e n e r a l a d v a n c e m e n t of f o r e i g n t r a d e , w i t h t h e r e s u l t i n g b e n e f i t t o t h e
agricultural and commercial interests w h i c h erg largely dependent u p o n
f o r e i g n m a r k e t s , c e n b e f u r t h e r e d m o s t e f f e c t u a l l y at t h e p r e s e n t t i m e
b y t h e s u b s t i t u t i o n of t h i s s i m p l e r r e g u l a t i o n a p p l i c a b l e t o a c c e p t a n c e s
in export and import transactions.
X-3370
- 3 'The r e s p o n s i b i l i t y f o r p a s s i n g u p o n the e l i g i b i l i t y of
b a n k e r s ' a c c e p t a n c e s o f f e r e d to t h e F e d e r a l R e s e r v e B-*nks f o r
r e d i s c o u n t or p u r c h a s e rests u p o n the F e d e r a l R e s e r v e B - n k s t h e m s e l v e s , a n d e a c h b a n k s h o u l d s a t i s f y i t s e l f , in w h a t e v e r w a y i t
d e e m s a p p r o p r i a t e , t h a t t h e a c c e p t a n c e s c o n f o r m to t h e r e q u i r e m e n t s of the l a w and the B o a r d ' s r e g u l a t i o n . The F e d e r a l R e s e r v e
B o a r d w i l l w a t c h c a r e f u l l y t h e d e v e l o p m e n t of t h e a c c e p t a n c e
b u s i n e s s u n d e r t h i s n e w r e g u l a t i o n w i t h a v i e w of m a k i n g a n y
l a t e r m o d i f i c a t i o n that m a y seem n e c e s s a r y or a d v i s a b l e .
The
B o a r d w i l l c a l l the a t t e n t i o n of the F e d e r a l R e s e r v e B a n k s to
a n y a p p a r e n t f a i l u r e to c o m p l y v i t h t h e l a w o r a b u s e of t h e
a c c e p t a n c e p r i v i l e g e and the F e d e r a l R e s e r v e B ^ n k s w i l l in t u r n
b e e x p e c t e d to k e e p the B o a r d c l o s e l y advised i n regard to
a c c e p t a n c e p r a c t i c e s in their districts.'
W . P . u. Harding,
G o v e
r n o r./j
X-3371
F E I) E B A L
STATE W T
R E S E R V E
B O A R D
FOR TPE PRESS
For release in afternoon papers,
Saturday, April 1, 1922.
CONDITION 07 THE ACCEPTANCE MARKET
The supply of acceptances during the month ending
March 11, in general was relatively small in comparison with
the demand until near the close of the period, when the
supply tended to increase.
District No. 1 (Boston) renorts -
"The existing supply was inadequate and continued so until veil
toward the end of February, although there was a slight increase
in the number of bills offered.11
However, in District No. 4
(Cleveland) brokers' portfolios were well filled, and were ample
to meet all demands.
This decline in the volume of bills in
most Districts was due in part to the smaller ahiount executed by
the accepting banks.
These institutions, especially in New York,
were inclined to hold their bills, due to the comparatively easy
condition of the money irarket during a considerable part of the
period, and to the improvement in the position of banks in
general.
Although the demand for acceptances continued to be
-2-
X-3371
affected by the available supply of government certificates, the dealers'
aggregate portfolios in New York declined from about $66,COO,000 to
$40,000,000,
Districts No. 7 (Chicago) and No. 12 (San Francisco),
however, report an increase in dealers' holdings.
In the latter Dis-
trict the total number of bills accepted during February was
an increase of $6$$,l6l over January.
$4,426,227,
District No. 10 (Kansas City)
attributes the small number of acceptances to the inactivity in the
exportation of wheat and flour.
The bills purchased by the Federal Reserve Bank of Philadelphia
during February showed a decrease from January in the proportion based
on dollar exchange, and an increase in those based on imports.
With the
exception of Districts No. 4 (Cleveland) and No. 8 (St. Louis), bills were
in good detqand.
This was due largely to the low rates for call money
which prevailed throughout the East.
Another factor was the anticipation
of the tax payment adjustment for March 15.
Banks followed the policy of
conserving cash for the purpose of meeting withdrawals for income tax
payments.
Before the middle of the month it became apparent that the need
for funds had been overestimated, and thus the acceptance market was used
as an outlet for surplus funds.
Districts No. 1 (Boston) and No. 3
(Philadelphia) both report that the demand for bills was especially brisk
from out-of-town banks, while District No. 2 (New York) stated that local
savings banks were active buyers.
In District No. 3 (Philadelphia) the
majority of sales were made to interior banks.
Acceptances with a maturity
of between 60 and 90 days were in greatest demand.
Bills moved quite freely at the rates quoted in the various
Districts, only Districts No. 4 (Cleveland) and No. 8 (St. Louis)
-3-
X-3371
reporting the local markets somewhat dull.
Dealers' rates on prime
"bills in Districts No. 1 (Boston), No. 2 (New York), and No. 7
(Chicago), were as follows:
Boston:
All Maturities
Ran&e during period
Offered
Bid
4 l/g and 4g 3 7 / b to 4
Close
Offered
Bid
4" to 4 1 / 8 3" 7 / 6 to 4
New York:
3C day maturity
60 "
"
90 "
"
120 "
"
150 "
"
IgO »
»
4 l/g
7/S - 4.
I
I
1
1
"
n
n
"
2
4 l/g - 4 1/4 3 7 / 8 - 4 1/8
4 1/4 - 4 3 / S 4 - 4 l/g
I
t
f
t
"
"
4 l/g
?
f
f!
Chicago:
30 day maturity
60 "
"
4 l/g
"
gQ
r
r
120 "
150 "
180 "
t
t
n
"
"
4
1
1
f
t
r
r
"
tr
4 l/g - 4 1/4
4 - 4 l/g
"
"
t
i
7/S - 4
I
t
h
I
t
I
f
11
t?
I
t
4 1 / 4 - 4 y g 4 - 4 l/v
t
t
i
t
4 i/g
3 7/8 - 4
t
t
n
t
t
it
t
t
4 l/g-4*
n
1
1
n
i
t
t
t
i
t
n
»
"
3 7/8-4 i/g
FEDERAL RESERVE BOARD
WASHINGTON
X-3372
March 28, 1922.
SUBJECT:
Change in Code for Telegraphic Advice
of Approval of Applications for Membership.
Dear Sir:
Referring to the Board's circular letter X-1823 of February
10, 1920, and enclosed code for use in telegraphic advice of approval
of applications of state institutions for membership, you are advised
that condition number four, as amended by the Board's letter X-lgUl
of February 21, 1920, has been further amended so as to read as follows
"That except with the approval of the Federal Reserve
Board, there shall be no change in the general character of your assets or broadening in the functions
now exercised by you, such as will tend to affect materially the standard now maintained and required as
a condition of membership; that vou.ehall not reduce
vour capital stock without first having obtained the
ar-rroyal of the Federr.I P s > : .e Bc,°~ ': rr.i that you
.,r"r
will exercise all powers with due regard to the safety
of your customers."
This condition as amended will be applicable to all State
banks whose applications for membership @.re approved on or after May
1, 1922.
Please change your copy of the code accordingly.
The underlined portion has been inserted in this condition
in order to require State banks hereafter admitted to membership
to obtain the approval of the Federal Reserve Board before reducing
•*
i
X-3372
-
2
-
their capital stock, as is required by law of national banks.
Yours very truly,
W. V. HOXTON,
Secretary.
r
To Chairmen of all
Federal Reserve Banks.
GOLD
Federal
Reserve
Bank of .
Total
Total
%
Gold
Withdrawals
Deposits
"
876,700.00
1,631,590.00
919,800.00
1,564,074.40
998,100,00
$
-
9,079,000.00
$
to Agent's fmdL
876,700.00
1,631,590:00
919,800.00
6,564,074.40
998,100.00
6h0,095.00
10,000,400,00
2,200,00
1,002,400.00
800.00
384,241.02
712,504.91
883,030.00
1,098,900,00
$
2 0 , 2 3 5 , 1 0 0 . 0 0 ||$
*
*
Total
Debits
84,527,465.97
$
Total
Credits
87,520,416.83
28,981,801.26 |$
361,206,018,94
$
119,477,797.43
2,162,649.54
€8,158,085.38
3, C & , 728. 51
2,870,555.33
2,559,609.84
40,015,519.67
208,182,576,34
72,777,091,01
38,897,655.57
53,296,241,48
40,915,688.69
mm#
180, 024, 490.96
69,906,535.68
40, o n , 745,98
50,736,631.64 i
I* 38,775,628.60 1*1,268,059,134,46 ($1,268,059,134,46 {$
Net
Credits
2,992,950.8b
T R A N S F E R S
$
9.079,000.00
148*500,00
Debits
8,000,000.00
$
Credits
19,000,000.00 .
3,000,000.00
1,00(^000.00
5,000,000.00
1,000,000.00
1,000,000.00
1,000,000,00
1,000,000.00
2,000,000.00
956,300.00
$
31,189,600.OQ |$
21,000,000,00 j$21,000, 000,00
Balance in
fund at close
of business
Mar. 30, 1922.
Settlements from March 24, 1922 tb March 3 0 , 1922
Inclusive.
Net
Debits
Aggregate
deposits and
transfers frem
Agent's fund
20,000,400,00
2,200.00
1,002,400.00
800.00
^ : 9 M
2,384,241.02
2,712,504.91
9,399,030.00
1,098,900,00
1,800.00
11,465,201.26 ($
X-3373
Washington, D. C*
Aggregate
withdrawals
and transfers
148,500.00
6b0,095.00
|* 513»492,827.55 )$
Federal
Reserve
Bank of
Bos ton
New York Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Gold
Balance last
statement
Mar, 23, 1922.
Boston
* st.m591.07
New York
Philadelphia
6^69.543.09
Cleveland
Richmond
Atlanta
23,209,856.20
Chicago
84,321,522,63
St. Louis
1 3 , 6 % 713.63
Minneapolis
32,^,694.13
Kansas City
33,%6,512.58
Dallas
20,776,783.56
47,293,467.40
San Francisco
FEDERAL RESERVE BOARD
S E T T L E M E N T FOND
Summary of changes in ownership of gold by banks through
transfers and settlements.
21,465,841.93
$
Increase
Decrease
5,007,049.14 1 1$
38,165,720.92
4,6#,972.99
4,797,937.02
900,169.02
5,057,787.38
1,176,090.41
53,211,110.00
27,409,777.88
22,449,930,22
70,071,841.28
28,854,252.34
11,555,843.97
42,591,257.56
38,775,628.60 j$ 515,700,626.29 )$
2,162,649.54
99,830.98
33,158,085.38
2,024,728.51
1,870,555.33
1,797,937.02
4,057^787.38
176,090,41
4,559,609.84
48,882,508.72 ($48,882,50^19
F E D E R A L
R E S E R V E
S-jurroary of transactions for period ending March 10, 1922.
Balance last
Gold
Federal
Gold
statement
Reserve
Agent at
Withdrawals
Mar. 23, 1922.
Deposits
H E
Withdrawals
for
transfers
to bank
J T S'
F U N D
( CONFIDENTIAL)
Deposits
Total
through
transfers
Withdrawals
from hank
Total
Deposits
X-3373a
Washington, D. C.
March 31» 1932.
Balance at
close of
business
Mar. 30, 1922.
Boston
100,000,000 }$
100,000,000
New York
381,000,000 |
381, 000, 000
Philadelphia
133,339,260
|
Cleveland
160,000, 000
I
Richmond
29,795,000
I
3,000,000
6,500,000
|
Atlanta
76, 000,000
I
2,500,000
1,500,000
j
Chicago
332,644,500
j
10,000,000
St. Louis
66,600,000
j
Minneapolis
13,200,000
|
Kansas City
37,360,000
|
1,484,000
|
203,328,500
j
Dallas
San Francisco
Total
I $ 1,534, 8 m , 260
5,000,000
I
5,000,000
165,000,000
3,ooo t ooo
6,500, 000
33,295,000
2,500,000
1,500,000
75,000,000
5,000,000 j
2,000,000
|
700,000
20, 000, 000
j
10, 000, 000
2,000,000
2,000,000
2,000,000
J
1$ 31,500,000
|
954,500
|$ 10,700,000
| $ 10,954,500
|$ 17,516,000
700,000
65,300,000
15,200,000
4,000,000
39,360,000
8,516,000
2,000,000
8,516,000 |
7,000,000
312,644,500
2,000,000
j
2,000,000
2,000,000
128,389,260
5,000,000
10,000,000
195,374,000
7,954,500
|$ 42,454,500
|$ 28,216,000
j $ 1,520,562,760
o
10
FEDERAL RESERVE BOARD
WASHINGTON
X-3374
March 31, 1922.
SUBJECT:
Senate Bill No. 3255
Dear Sir:
For your information there is enclosed herewith a
c o p y of S e n a t e B i l l N o . 3 ^ 5 5 a n d a c o p y of t h e B o a r d ' s l e t t e r
t o t h e C h a i r m a n of t h e S e n a t e C o m m i t t e e o n B a n k i n g a n d C u r r e n c y ,
setting forth its views w i t h respect to the proposed legislation.
Very truly yours,
G o v e r n o r .
(Enclosures)
TO THE FEDERAL RESERVE AGENTS OF ^LL THE BANKS
CO^Y TO GOVERNORS
COPY
6 7 t h Congress,
2 d Session.
s. 3255
x-3371+a
tN THE SfcNATE OF THti UNITED STATES
March 7 (calendar day, March g), 1$22.
Mr. Ca3.der introduced the following bill; which was read twice
and referred to the Committee on Banking and Currency.
A BILL
To amend section 513&, Revised Statutes of the United States,
relating to coirporate powers of associations, so as to
provide succession thereof until dissolved, and to apply
said section as so amended to all national banking associations.
Be it enacted by the Senate andtiotiseof Representatives of
the United States of America in Congress assembled, that section
5136 of the Revised Statutes of the United States be amended so
that the paragraph therein desighated d s "Second" shall read as
t
follows:
"Second. To have perpetual succession until it shall be dissolved by the act of its shareholders owning two-thirds of its
stock, unless its franchise shall become forfeited by Reason of
violation of law, or unless it shall be terminated by the provision of Act of Congress hereinafter enacted,11
SEC. 2. All Acts or parts of Acts providing for the extension
of the period of succession of national banking associations for
twenty years are hereby repealed, and the provisions of paragraph
second of section 513&, Revised Statutes, as herein amended shall
apply to all national banking associations now organized and
operating under any law of the United States.
COPY
X-337^b
March 20, 1922.
Hon. George Pv McLean, Chairman,
Committee on Banking and Currency,
United States Senate,
Washington, D. Cw
My1 dear Mr. Chairman:
Receipt is acknowledged of your letter of March
15, 1922, in which you ask for the views of the Federal
Reserve Board with regard to Senate Bill 3^55« This bill,
if enacted, would amend Section 513^ Revised Statutes of
the United States so as to give to every national banking
association, whether now or hereafter organized, "perpetual succession until dissolved by the act of its shareholders owning two-thirds of its stock, unless its franchise shall become forfeited by reason of violation of law,
or unless it shall be terminated by the provisions of an
act of Congress hereinafter enacted,n
The Federal Reserve Board has given careful consideration to the bill and feels that its enactment is very
desirable.
The Board understands that most of the States
grant charters to banking institutions for periods in excess of twenty years, many States, including New York,
granting charters which automatically continue forever unless revoked or forfeited, or unless the corporation is
dissolved; and the fact that it is possible to obtain charters from the States which are more favorable in this respect than the charters granted to national banks not only
is a deterrent to organization under the provisions of the
National Bank Act but operates also as an inducement to existing national banks to convert into State institutions.
The proposed legislation is particularly desirable from the standpoint of national banks exercising fiduciary p o w e r s granted to them under the provisions of Section 11 (k) of the Federal Reserve Act. The Board has always taken the position that a national bank with trust powers may legally and properly undertake the execution of a
trust which may continue for a period beyond the term of its
original charter, but, nevertheless, the fact that the national
bank has to apply for periodical renewals of its charter
seems to be a consideration which handicaps national banks
in their competition with State institutions for fiduciary
business*
X-337^b
-2-
National b a n k s are subject to s u p e r v i s i o n and e x a m i n a t i o n b y t h e o f f i c e of t h e C o m p t r o l l e r of t h e C u r r e n c y a n d m a y
b e e x a m i n e d a l s o a t t h e i n s t a n c e of t h e F e d e r a l R e s e r v e B o a r d .
S e c t i o n 2 of t h e F e d e r a l R e s e r v e A c t p r o v i d e s t h a t t h e c h a r t e r
of a n a t i o n a l b a n k m a y b e f o r f e i t e d f o r n o n c o m p l i a n c e w i t h o r
v i o l a t i o n of t h e F e d e r a l R e s e r v e A c t i n a s u i t b r o u g h t b y t h e
C o m p t r o l l e r of t h e C u r r e n c y u n d e r t h e d i r e c t i o n o f t h e F e d e r a l
R e s e r v e B o a r d , a n d S e c t i o n 5 2 3 9 of t h e R e v i s e d S t a t u t e s p r o v i d e s f o r s u c h f o r f e i t u r e f o r v i o l a t i o n of t h e p r o v i s i o n s of
t h e N a t i o n a l B a n k A c t i n a s u i t b r o u g h t b y t h e C o m p t r o l l e r of
t h e C u r r e n c y o n h i s o w n a c c o u n t . I n v i e w of t h e s e s t a t u t o r y
p r o v i s i o n s , it s e e m s t o t h e B o a r d t h a t a m p l e p r o t e c t i o n i s
a f f o r d e d a g a i n s t p o s s i b l e a b u s e s b y n a t i o n a l b a n k s of t h e i r
franchises.
T h e B o a r d k n o w s of n o v a l i d o b j e c t i o n t o g r a n t i n g p e r petual franchises to national banks, subject to t h e qualificat i o n s c o n t a i n e d i n Senate Bill 3255> and b e l i e v e s t h a t t h e
legislation is entirely consistent w i t h sound banking.
The
n a t i o n a l b a n k i n g system should be put on an e q u a l f o o t i n g w i t h
t h e b a n k i n g s y s t e m of t h e v a r i o u s S t a t e s , s o f a r a s i s c o n s i s t e n t w i t h s o u n d p r i n c i p l e s , a n d S e n a t e B i l l 3 2 5 5 w i l l , if
e n a c t e d , r e m o v e o n e of t h e u n n e c e s s a r y h a n d i c a p s u n d e r w h i c h
the n a t i o n a l b a n k i n g s y s t e m is f u n c t i o n i n g at t h e p r e s e n t t i m e .
Yours very truly,
(Signed) W.P.G. HARDING.
G o v e r n o r .
WSLJB
FEDERAL RESERVE BOARD
WASHINGTON
X-3375
April 3 , 1 9 2 2 .
SUBJECT:
Abstract from -Annual Report.
Dear Sir:
I enclose herewith, for your information, two
copies of a slightly modified abstract of the last few
pages of the annual report of the Federal Reserve Board.
This article has been prepared for publication, about
the middle of April, in a special edition of the Raleigh
(N. C,) News and Observer.
Very truly yours,
G o v e r n o r .
(Enclosure)
ALL F. R. AGENTS
COPIES TO GOVERNORS.
x-3375a
THE FETER/I RESERi^E SYSTEM WHAT IT IS P W WHAT IT HAS ACHIEVED.
I n o r d e r t h a t t h e r e m a y b e a clearer u n d e r s t a n d i n g of t h e p r i n c i p l e s w h i c h g o v e r n t h e p o l i c i e s of t h e F e d e r a l R e s e r v e B o a r d a n d t h e
o p e r a t i o n s of t h e F e d e r a l R e s e r v e B a n k s , it s e e m s d e s i r a b l e t o r e v i e w
b r i e f l y s o m e of t h e e s s e n t i a l f e a t u r e s of t h e F e d e r a l R e s e r v e A c t , t o
d i s c u s s t h e m e a s u r e of a u t h o r i t y c o n f e r r e d u p o n t h e F e d e r a l R e s e r v e
Board, the joint and separate p o w e r s exercised by the Federal R e s e r v e
B o a r d and t h e F e d e r a l R e s e r v e B a n k s , and t o d e s c r i b e c o n c i s e l y t h e
f u n d a m e n t a l c h a r a c t e r a n d s o m e of t h e d i s t i n c t i v e f u n c t i o n s of t h e
Federal Reserve Banks.
No Central Bank
A t t e n t i o n s h o u l d b e called, f i r s t of all, t o the f a c t t h a t t h e
F e d e r a l R e s e r v e Act d i d n o t e s t a b l i s h a c e n t r a l b a n k .
Ca the conf
t r a r y , it a d o p t e d t h e r e g i o n a l p r i n c i p l e and a u t h o r i z e d t h e establish-*
m e n t of n b t m o r e t h a n 1 2 b a n k s , t o b e l o c a t s d i n v a r i o u s s e c t i o n s ef
the country.
E a c h of t h e s e b a n k s i s p r a c t i c a l l y i n d e p e n d e n t of t h e
others, in operation
as w e l l as in local policies.
From a legal
standpoint these banks are private corporations organized under a
special, a c t of C o n g r e s s , n a m e l y , t h e F e d e r a l R e s e r v e Act.
stockholders
Their
a r e t h e i r m e m b e r b a n k s , e a c h of w h i c h is r e q u i r e d to
s u b s c r i b e t o t h e c a p i t a l s t o c k of t h e F e d e r a l R e s e r v e B a n k a n a m o u n t
e q u a l t o 6 p e r c e n t of i t s o w n c a p i t a l a n d s u r p l u s , o n e - h a l f o f w h i c h
a m o u n t is r e q u i r e d to b e p a i d in.
*-3375a
-
2
-
Disposition of Earnings
-After all necessary expenses of a Federal Reserve Bank have been
paid or provided for, the stockholders are entitled to receive an
annual dividend of 6 per cent on the paid-in capital stock, which is
cumulative.
-After the dividend claims have been fully met, the net
earnings are paid to the United States as a franchise tax, except that
the entire earnings are paid into a surplus fund until that fund amounts
to 100 per cent of the subscribed capital stock of the Federal Reserve
Bank.
Thereafter 10 per cent of the net earnings are paid into the
surplus fund and the remaining 90 per cent paid to the Government as
franchise tax.
Organization
Esch bank has nine directors, of which six are elected by the
member banks and three are appointed by the Federal Reserve Board.
Not more than three directors can be officers or directors of member
banks and the three directors appointed by the Federal Reserve Board
cannot be officers, directors, or stockholders in any bank.
Three
directors elected by the member banks must be men who are actively engaged in their respective districts in agriculture, commerce, or some
other industrial pursuit.
As there are 12 Federal Reserve Banks, there
are, therefore, 103 Federal Reserve Bank directors, of which only 36
are appointed by the Federal Reserve Board, while the remaining 72
directors are elected by the member banks of the country - nearly
10,000 in number.
X-3375a
- 3 Lending Powers.
The law does not contemplate direct competition by the Federal
Reserve Banks for business with each other or with national banks,
State banks, trust companies, and savings banks.
Federal Reserve Banks
are not allowed to receive deposits from the public and can accept
deposits only from their member banks, from the United States Government, and, solely for the purposes of exchange or collection, from
nonmember banks or trust conpanies.
They ara not allowed to make
loans or advances direct to the public, but can lend only to the
United States, to their member banks, and, subject to certain conditions, for periods not exceeding six months, in anticipation of the
collection of taxes or the receipt of assured revenues, to States,
counties, municipalities,and other political subdivisions in the
United States,
The Federal Reserve Banks are not permitted by lew to make loans
direct to individuals, firms, and corporations, and while they can, under certain restrictions, purchase bills of exchange and bankers'
acceptances in the open market, their dealings with the public in
the matter of loans are limited to the discounting of notas, drafts,
and bills of exchange for member banks, all such paper to be indorsed by
the member ban*: offering it.
In lending in this way to their member
banks, the Federal Reserve Banks are not authorized by law to use the
same discretion and freedom of action that are allowed national banks,
State banks, and trust companies, but they must observe the limitations
prescribed by law as to the character and maturity of the notes offared
them by member banks for discount; except as to notes, drafts, and bills
x-3375a
- 4drawn or issued ior agricultural purposes or based on live stock,
which a federal Reserve Bank may discount for a member bank if
the maturity does not exceed six months, a Federal Reserve Bank can
not discount any paper for a member bank which has longer than $0
days to run, exclusive of days of grace*
The law puts a limitation also upon the character of advances
against member banks' notes.
A Federal Reserve Bank may make advances
to its member banks on their promissory notes for a period not exceeding 15 days, provided such promissory notes are secured by the deposit
or pledge of bonds or notes of the United States, or by notes, drafts,
and bills of exchange or bankers' acceptances which are themselves eligible for rediscount or purchase by a Federal Reserve Bank.
To be
technically eligible for rediscount a note must be indorsed by a member
bank, its maturity must be within the time limit prescribed by law, and
it must have been issued or drawn for agricultural, industrial, or
commercial purposes, and it must also be shown that the proceeds of
the note have been used or are to be used for such purposes.
. Ag Federal Reserve Banks are not permitted by law to rediscount
any paper which does not bear the indorsement of a member" bank, it is
clear that in order for a federal Reserve Bank to render financial
assistance to those engaged in commerce and industry, in agriculture,
or in the raising of live stock, the loans must first be negotiated
with member banks.
There are many loans, however, which member banks
may legally and properly make which can not be rediacounted with Federal
Reserve Banks for the reason that the law does not admit of the classification of such paper as eligible.
A Federal Reserve Bank, therefore.
X~3375a
-5 can not discount any paper, however good it may be, which is not
technically eligible under tho terms of the Federal Reserve Act;
and, on the other hand, it is entirely within its right in declining to discount notes which, even
though technically eligible, are
not satisfactory from a credit standpoint.
Federal Reserve Banks are forbidden by law from discounting notes
drafts, or bills covering merely investments, or issued or drawn for
the purpose of carrying or trading in stocks, bonds, or other investment securities, except bonds and notes of the Government of the United
States.
Reserves
The Federal Reserve Act, as amended, has changed both the amount
and character of the reserves which all national banks and State member
banks must carry against their deposit liabilities.
For a long period
of years it has been the practice of American banks to carry as a reserve in cash and on deposit with other banks a certain proportion of
their deposits.
Before the passage of the Federal Reserve Act the
national banks in the three central reserve cities were required to
keep in their own vaults as reserve in gold or lawful money an amount
equal to 25 per cent of their net deposits, and in other cities and
towns they were required to keep a part of their required reserves in
cash in their own vaults, while a part might be kept on deposit with
other banks.
The laws regarding the reserves of State banks varied
in the different states.
Under the Federal Reserve Act the percentage
of reserve required has been substantially reduced,and, as amended, no
national bank and no State member bank is required to keep any definite
X~3375a
~
()
—
amount of cash in its own vaults, and whatever amount of cash is kept
on hand by the member banks, as deemed necessary by the judgment and
experience of their officers, does not
count as part of the banks'
lawful reserve.
The entire legal reserves of all member banks must be kept on
deposit with the Federal Reserve Banks.
As a consequence, the cash
resources of the Federal Reserve Banks are necessarily very large and
their holdings of gold, in particular, constitute a very large proportion of all the gold in the country.
The gold held by the Federal Re-
serve Banks is equal to all the gold'that would have been in circulation or held by all the banks throughout the country if there had been
no Federal Reserve Banks established.
As the Federal Reserve Banks were made the sole custodians of the
legal reserves of all member banks, the object of Congress in throwing safeguards and limitations around their loan transactions is evident.
It is necessary that Federal Reserve Banks should keep themselves
in a "liquid" position; that is, their bills discounted must be of short
maturity and should be readily collectible.
The strength of the entire
banking system of the United States is directly related to the strength
of the Federal Reserve Banks.
If the Federal Reserve Banks should
allow themselves to get into a weak, over-extended, and unsafe position,
all member and non-member banks would be seriously affected.
General Powers and Limitations.
While Congress has placed upon the Federal Reserve Board the responsibility of defining eligible paper, within the meaning of the Federal
X-3375a
-
- 1 Reserve Act, it has intrusted the management of the Federal Reserve Banks,
under the general supervision of the Federal Reserve Board, to their own
directors.
Each Federal Reserve Bank has power to appoint, by its board
of directors, such officers and employees as are not otherwise provided
for in the Federal Reserve Act and to define their duties, to prescribe
by-laws, not inconsistent with the law, regulating the manner in which its
general business may be conducted, and to exercise, by its board of directors,
or duly authorized officers or agents, all powers specifically granted by
law and such incidental powers as may be necessary to carry on the business
of banking within the limitations prescribed by law.
Each Federal Reserve Bank is conducted under the supervision and control
of its board of directors, who are charged by law to perform the duties
usually appertaining to the office of directors of banking associations
and to administer the affairs of the bank fairly and impartially and without discrimination in favor of or against any member bank or banks and,
subject to the provisions of law and the orders of the Federal Reserve
Board, to extend to each member bank such discounts, advancements, and
accommodations as may be safely and reasonably made with due regard for
the claims and demands of other member banks.
The Federal Reserve Board is not authorized by law to pass upon the
paper which is offered for discount to Federal Reserve Banks.
This is a
function which must be exercised by the directors of the Federal Reserve
Bank or by their duly authorized officers or agents.
While the law
does not prescribe any fixed limit as to the amount of loans that a
Federal Reserve Bank may make to a member bank, it does require that due
x-3375a
2 —
)
regard must be given to the claims and demands of other member banks;
that is, to their possible needs for credit accommodation.
It also
provides that a Federal Reserve Bank must extend to each member bank
such discounts and accomodations as may be "safely and reasonably"
made.
This means that the directors of a Federal Reserve Bank and
the officers appointed by them must exercise their best judgment in
granting discount acconanodations.
They must assure themselves that
the discounts are such as can be safely made, and reasonably made,
with due regard to the possible requirements of other member banks
which may ask for accommodation later on.
The lending power is not vested in the Federal Reserve Board
and the reason for this is probably twofold.
Reserve System is not a central bank.
conpriaing twelve banks.
First, the Federal
It is a regional system
Congress did not intend that there
should be a centralized control of credits.
Second, In a country
embracing so vast an area as the United States, it would be a very
difficult task, if not an impossibility, for a central board to
pass intelligently upon the security of the paper offered for discount, which must necessarily come from all sections of the country.
v
X-3375a
No Control Over Member Bank Loans.
While the Federal Reserve Act was intended, to strengthen the
banking system of the United States and to provide ready means of rediscount ing certain classes of paper, it is also the evident intention of
the act to disturb as little as possible the business of the member and
non-member banks, or their dealings with their customers.
There is
nothing in the Federal Reserve Act which gives either the Federal Reserve
Board or a Federal Reserve Bank any control over the loan policy of any
member bank.
A Federal Reserve Bank can not compel a member bank to make
a loan which it does not desire to make, nor restrain it from making a
loan which it wishes to make even though it is forbidden by law.
A Federal Reserve Bank can not lend directly to the customers of
a member bank, nor does it, in fact, take the initiative in making loans
to a member bank for the purpose of enabling the member bank to distribute
the funds so advanced to its customers.
The Federal Reserve Bank lends to
the member bank against transactions already made, for the purpose of
enabling the member bank to restore its reserve to the legal requirement,
after the reserve has been impaired or is about to be impaired because of
increased loans and deposits.
There is a very general popular misconception regarding this, and
it may be that some of the member banks are responsible for this misunderstanding without being actuated, however, by sinister motives*
Banks, as
a rule, do not like to admit to customers that they are short of loanable
funds nor do they wish to arouse enmity in declining to make loans or in
asking for a reduction of a loan already made.
- 10 -
X-3375a
There are doubtless some tank officers who are able frankly to
decline an application for a loan in a way which leaves no sting, but not
all bank officers have such tact.
Some are frank enough, but their
bluntness hurts the feelings of the would-be borrower.
It is not unusual,
therefore, for seme bank officers in declining loans to seek to evade
direct responsibility.
in this capacity.
Formerly, the board of directors was made useful
In recent years, however, bank officers have found
in the Federal Reserve Board or the Federal Reserve Bank a much more satisfactory buffer than a local board of directors.
In many cases, in
small towns particularly, banks have found it convenient to pass the
responsibility on to the Fbderal Reserve Bank or the Federal Reserve Board,
and have stated to a borrower or would-be borrower that they would like
to grant the extension asked for or make the loan desired, but the Federal
Reserve would not permit it-
Such a procedure has a tendency to relieve
the situation as far as the local bank is concerned, but it is certainly
unfair to the Federal Reserve System.
This evasion of responsibility has
subjected the Federal Reserve Banks to a great amount of unjust criticism
and has given the public a wrong impression of the authority and attitude
of the Federal Reserve Banks and the Federal Reserve Board.
It is entirely true that a Federal Reserve Bank, mindful of its
responsibility under the law and acting in accordance with the dictates
of ordinary banking prudence, may have had occasion to call the attention
of some of its larger borrowing banks to their large discount lines, which
have run in some cases over a period of years without being reduced, and
have called the attention of the borrowing banks to the necessity of
working themselves into a stronger position.
But in no case within the
-
11
-
X-3375a
knowledge of the Federal Reserve Board has any Federal Reserve Bank undertaken to say to a member bank what particular loans it should call or ask
to have reduced.
Federal Reserve Note Issues.
ThStG is perhaps as much confusion in the public mind regarding
the issue of federal Reserve notes as there is regarding the rediscounting functions of the Federal Reserve Banks«
There are some who appear
to have an impression that the Federal Reserve Board has power to expand
or contract the currency &f the country at will and that it has exercised
this power in a reckless and arbitrary manner.
that the Federal
While the law prescribes
Reserve Boa*d shall have the right, acting through the
Federal Reserve Agent, to grant in whole or in part or to reject entirely
the application of any Federal Reserve Bank for Federal Reserve notes, it
has never exercised this right.
On the contrary, it has always approved
promptly every application which has been made for the issue of Federal
Reserve notes.
One of the purposes of the Federal Reserve Act, as stated
in its caption, is to furnish an elastic currency, but there are some
whose idea of elasticity is continuous stretching.
Currency to be really elastic must be susceptible of expansion
or the reverse, as the needs of industry and commerce may require.
Many
believe that there was a preordained contraction of the currency during
the year 1920, determined upon in order to reduce prices-
The expansion
of nearly $600,000,000 in Federal Reserve note circulation which actually
took place during that year shows that the impression is absolutely
unwarranted -
- 12 -
x-3375a
An increase or decrease in the volume of Federal Reserve notes outstanding is not the result of any preordained policy or premeditated
design, for the volume of Federal Reserve notes in circulation depends
entirely upon the activity of business or upon the kind of activity which
calls for currency rather than booK credits.
Federal Reserve notes can he issued only against collateral in an
amount equal to the SUT. of the Federal Reserve notes applied for, which
collateral security must be notes and bills discounted or acquired by the
banks or gold or gold certificates.
The law requires each Federal Re-
serve Bank to maintain a reserve of 1 0 per cent in gold agains^t its
4
Federal Reserve notes in actual circulation.
During the year 1$21 the loans of the Federal Reserve Banks to
their member banks decreased by about $1,500,0C0,000; and as the notes
discounted with Federal Reserve Banks have been paid off, Federal Reserve
note currency has come back to the banks and, in the absence of a demand
for it, has not been reissued.
Upon payment of commercial paper which
has been deposited to secure Federal Reserve notes, there necessarily
results either an immediate return of an equivalent amount of notes to
the bank or an automatic increase in the percentage of gold reserve available for their redemption.
Federal Reserve notes are not legal tender,
nor do they count as reserve money for member banks.
They are issued only
as a need for them develops, and as they become redundant in any locality
they are returned for credit or for redemption to the Federal Reserve Banks
or to the Treasury at Washington.
Thus, there can not be at any time more
Federal Reserve notes in circulation than the needs of the country at the
prevailing level of prices and wages require, and as the demand abates
- 13 -
X-3375a
the volume of notes outstanding will be correspondingly reduced through
redemption.
The
increased volume of Federal Reserve notes in circula-
tion from 1917 to the end cf the year 1920 was, in so far as it was not
the result of direct exchanges for gold and gold certificates, the
effect of advancing wages and prices and not their cause, just as the
reduction which has taken place during the past year is the result of
lower prices and smaller volume of business, rather than their cause.
Under the Federal Reserve System, as business expands, as labor
is more fully employed, and as production increases and distribution
becomes more active, there follows a demand for greater discount accommodations and a need for more currency, and the increased volume of
discounts furnishes a means of providing tne increased volume of currency
required.
Aid for Agriculture Through Rediscounting.
Some of the Federal Reserve Banks have much larger resources and
consequently greater lending power than others.
In ordinary times the
Federal Reserve Banks in agricultural sections have very heavy seasonal
demands made upon them f or accommodation and in the fall of 1920 these
demands were abnormally large because of the difficulty experienced in
marketing agricultural products.
As the Federal Reserve Banks are re-
quired by law to maintain certain specified reserves, both against their
deposits and their note issues, and are required to advance their discount
rates whenever their reserves fall below the legal requirements, it is
evident that they must have some way of supplementing their resources in
order to continue to accommodate their member banks and through them the
public•
- 14 -
X-3375a
During the war every interest was subordinated to the single
idea of winning the war, and restrictions were imposed upon many kinds
of ordinary commercial and financial activities.
The Government, in
order to carry on the war, was obliged to borrow large sums and had
outstanding when the war ended about $25,000,000,000 of bonds and shorttime notes or certificates.
The flotation of this vast amount of
securities, without any impairment of the standard of value, was made
possible by the Federal Reserve System.
The Federal Reserve Banks issued Federal Reserve notes up to the
capacity of their respective communities to absorb them and maintained
their lending power by rediscounting with other Federal Reserve Banks.
After the war ended the various restrictions upon commerce and industry,
which had been imposed during the war, were removed and for several
months there was extraordinary activity in all lines, which continued
until the late spring of the year 1920.
Then came a violent reaction, accompanied by a drastic fall in
prices and by conditions which without the aid of the Federal Reserve
System would have resulted in a financial panic of unprecedented proportions.
The Federal Reserve Board is empowered by law to permit or require one Federal Reserve Bank to rediscount for another and to approve
applications of a Federal Reserve Bank for Federal Reserve notes, to
decline them in part or to refuse them altogether.
In every instance
the Board arranged promptly all applications made by Federal Reserve Banks
for rediscounts, and provided for the immediate issue of all Federal
Reserve notes applied for.
X-3375A
-15 In this way the Federal Reserve Banks in agricultural sections
were able to tide their member banks over a most dangerous and embarrassing situation by making advances in amounts far beyond their
normal lending power.
What Happened in IWo Typical Agricultural States.
The reports of the Comptroller of the Currency show that on
August 22, 1907, just before the panic of that year, the rediscounts
and bills payable of all national banks in the entire United States
amounted to $59,177,000.
At one time during the fall of 1920 the
borrowings of member banks in North Carolina alone from the Federal
Reserve Bank of Richmond amounted to $28,758,889*53•
t about the
same time the borrowings of Iowa member banks from the Federal
Reserve Bank of Chicago amounted to $98,636,000.
*
The Value of the Federal Reserve System.
Perhaps
it
m U h t be indelicate for me to express an
opinion
as to
the value of the Federal Reserve System to the country during the disastrous year 1920, but chere is no impropriety in quoting a few passages
from the report of the Comptroller of the Currency for thet year, which
was transmitted to Congress on February 7» 1921-
! n tnis report thw
Comptroller said:
"The story of Japan's industrial and financial experience is largely similar to-the experience of South American and European countries
some of them oar allies, and others neutral.
Some of these countries
are now going, through a business cataclysm similar to that through which
Japan has so recently passed.
In our own country • e have been thus far
w
X_3375a
— 16 —
fortunate enough - thanks largely to the splendid efficiency and.
stabilizing influence of the Federal Reserve System - to avoid the
financial crises and complete disorganization which have made havoc
elsewhere.
We have passed with comparative safety through exceed-
ingly troubled and nerve-racking times; but difficult and dangerous
problems remain to be solved, the solution of which will demand clear
heads and steady nerves."
"The deflation which at that time (1919) was obviously inevitable
has come, and the country is now in many respects on a sounder basis,
economically, than
it has been for years."
"Largely through the aid and excellent functioning of-the Federal
Reserve System, the business and banking interests of the country have
passed successfully through the perils of inflation and the strain and
losses of deflation without panic and without the demoralization which
has been produced in the past at various times from far less serious
and racking causes.
Those banking and other interests which at the
outset so vigorously opposed the Federal Reserve System are now among
its warmest advocates."
"The past seven years have been, in numbers of persons and extent
of interests involved, the most momentous and critical in the history
of this Republic.
We have had to face and solve gigantic and unpre-
cedented problems, and the banking and financial machinery of the
country has been subjected to a test and strain unparalleled.
It has.
been the duty of our country very largely to finance the world, and in
carrying out the program which fate imposed upon us we have overcome
successfully difficulties that at times seemed almost insurmountable
x-3375a
^
- 17 -
'
and we have met every righteous demand made upon us.
:
Our Federal Re-
serve financial and banking system, inaugurated in 1914, has been of
inestimable value; and without its aid, tasks which we have so successfully accomplished would have been impossible."
The present Comptroller of the Currency, in his report to Congress
for the year 1$21, has this to say:
"The year has been one of the most trying through which banking institutions have passed in a long period,
Following an experience of in-
flation which, considering its world-wide extent, was perhaps without
parallel, the banks in the past year have been under the necessity of
facing the reaction in the form of progressive deflation.
To an ex-
tent that a few years ago would have been beyond our utmost imaginings,
the necessity has been imposed upon the American banking system to provide, as it were, a pneumatic cushion to ease down the economic structure
of the world.
The strain has been a heavy and difficult one, and the
results have been such as to justify, beyond all our expectations, the
confidence that has been reposed in our Federal reserve system.
"It is occasion of much satisfaction to be able to report that the
national banks have demonstrated throughout this difficult experience a
most impressive stability, strength, and soundness of management.
That
they have stood the test so well is largely due to the high courage and
excellent management of their officers.
It would be an egregious in-
justice to omit acknowledgment of this service to the public, and of the
fine cooperation which the banks have extended to the supervisory authority
of the Government.
"It must be borne in mind that the inauguration of the Federal reserve
system was practically simultaneous with the outbreak of the Great War,
which,though it did not involve the United States directly for a long
time, nevertheless had its instant reactions upon our financial and
economic concerns.
These reactions were so extensive and intensive
that there is hardly possibility, in view of our experience of the last
seven years, of questioning that but for the timely establishment of the
Federal reserve system, our country, and indeed the rest of the world,
would have suffered much greater difficulties in financing the war, than
were actually experienced.
It may well be doubted whether the extraordi-
nary demands that were made upon American industry, agriculture, and finance
could possibly have been met if this instrumentality of credit consolidation and elasticity had not been in existence.
We will arrive at the
most adequate appreciation of what the Federal reserve system has meant
to us during these trying years, if we will undertake to visualize the
conditions that would have existed had we been compelled to operate through
the financial mechanism that was in existence prior to the creation of the
Federal reserve system. " ,
.
"It was inevitable that the period of deflation which followed the
war's expansion of credits should be intense and difficult in proportion to
the extent of the inflation.
While it is true that no banking system could
have created assets and industrial capacity where these did not exist in
substantial forms, yet it is also true that none save a highly efficient
and smoothly functioning system, could have made possible the contributions of our country during the world's crisis.
It is a fvrtner testimony
in favor of our system that since the armistice we have bean able to proceed farther, and with less discomfort, on the way to normal conditions,
than any other of the great powers."
FEDERAL RESERVE BOARD
WASHINGTON
X-3376
April 6, 1922
SUBJECT:
Correction in Telegraph Code.
Dear Sir:
One of the Federal Reserve Banks has called
attention to the fact that in the Federal Reserve
Telegraph Code (Page 37) the word following the word
"buoyant" and preceding the word "burden" is spelled
"bouyantly" and has asked if the word is out of place
or misspelled.
The word is apparently in its proper place
but misspelled, the "0" and "u" having been transposed
and overlooked in proofreading.
Please make correction in the copies of the
Code furnished to your bank.
Very truly yours,
Walter L. Eddy,
Assistant Secretary.
LETTER TO GOVERNORS
OF ALL
FEDER/L RESERVE B/NKS.
FEDERAL RESERVE BOARD
WASHINGTON
X-3377
April 6,
SUBJECT:
Postal Registry Receipts in use by
Federal Reserve Banks.
Dear Sir:
>
There is enclosed, herewith copy of a
communication received frcm the Post Office Department, which is self explanatory.
It is requested that you send to the Board for transmittal
to the Post Office Department samples of the
"registry forms" used by your bank and its branches.
Very truly yours,
G o v e r n o r .
(Enclosure)
TO THE GOVERNORS
OF ^LL FEDERAL RESERVE HANKS
COPY
X-3377a
POST OFFICE DEp/RTMENT
Third Assistant Postmaster General
WASHINGTON
April 4, 1922.
Honorable W. P. G. Harding,
Governor, Fedsral Reserve Board,
Washington, D. C.
My. dear Sir:
As will be noted by extract from communication attached
hereto, the postmaster at Salt Lake City, Utah, raises the
question as to why it is necessary for the local branch of the
Federal Reserve Bank at Salt Lake City to use the special registry forms, like samples also attached * , rather than the
regular stock registry forms.
Your views regarding the matter
will be appreciated.
In this connection it is stated that it is very desirable
of course that the forms used in connection with registered
mail by the Federal Reserve Banks and branches be uniform in
size and character and conform, as near as practicable to the
stock registry forms, and in this connection it is suggested
that there be obtained from the several Federal Reserve Banks
and branches samples of forms used by them in connection with
the mailing of registered matter, or its receipt from the post
office, and that such samples be transmitted to this Office
for examination and possible suggestions the adoption of which
might tend to uniformity or otherwise be advantageous.
Sincerely yours,
(Signed) barren I. Glover.
Third Assistant Postmaster General.
* Samples not received.
GWP/3B
Inclosure.
COPY
X-3377-D
EXTRACTS FROM LETTER FROM THE POSTMASTER AT SALT LAKE CITY,
UTAH, DATED FEBRUARY 13.
Enclosed herewith find sample forms of registry receipts all
of which are used daily and together by the local branch of the
Federal Reserve Bank, acting under instructions by district headquarters at San Francisco. In the interest of post office efficiency, which depends to a certain extent upon uniformity and convenience, we have objected to this use of variegated forms, filed
under as many serial numbers, by a single patron of this office,
and the objection is based on the following reasons:
1. Because of the decided inconvenience in keeping valuable
files pertaining to one subject in several lots or filing cases.
2. Because of the obvious irregularity of filing such valuable records under several serial numbers.
3- Because it is practically impossible to satisfactorily
check at the time of receipt the registered articles with the
entries on these several and separete forms.
4. Because the forms submitted by the Federal Reserve Bank
do not harmonize with forms supplied by the Department in size,
shape or matter; there is no provision at all for restricted
delivery.
5. Because of time and space necessarily wasted in checking
and filing these several forms daily; in listing 51 articles yesterday, seven bills were used each of which had space for 40 entries.
6. Because frequently changes made in the system of the
Federal Reserve Bank are subsequently requested by other
banks.
8. Because it is not clear that one patron or business concern should be allowed privileges which are withheld from other
patrons; each may ask the acceptance of one or more forms adapted
to the particular need of his office system.
9« Because we are crowcled now for floor space in which to do
necessary work by the simplest method possible.
10. Because some of these forms have never
received the
approval of the Post Office Department—they are presented without
notice, or concern for the service.
Our protest, based on the grounds above stated, were communicated by the local branch bank to the Federal Reserve Bank at San
Francisco which wired that its blanks had been referred to the
4 2 .
X-3377b
Post Office Inspector in Charge at that point; that he saw no
objection to their use and that other offices were accepting
them in consequence; the local bank was further advised to
telegraph the Post Office Inspector in Charge at Denver, Colorado,
to issue instructions to this office.
Representatives of the local branch bank intimate that
they will not accept oulk receipts on i T r 3824 but will remain
iom
at the window until individual receipts for every mailing are
made out on Form3S06 if their variegated forms are refused. I
do not believe in humoring a patron who demands a privilege which
cannot be accorded other patrons having equal rights when such
concessions involve a loss of efficiency and a waste of time and
money with "curtailment" our watch word.
If, in view of the inconvenience of checking, the irregularities in filing and the possibility of an endless variety of forms
to suit the changing plans of insistent business concerns, the
Department instructs us to accept and file anything submitted, or
approved by an inspector, we shall offer no further objections to
lists presented with articles to be registered.
But we would
like to have a ruling on the matter at an early date.
*
>v
-
-M
' '
-*c*
f
>
\
FEDERAL RESERVE BOARD
GOLD
S E T T L E M E N T 1U N D
Summary of trareactions for period ending April 6. 1922.
Federal
Balance last
Gold
Gold
Reserve
statement
Bank of
March 30,1922.
Withdrawals
Deposits
(nnK
FIDENTIjiL)
Aggregate
Aggregate
withdrawals
deposits and
and transfers
transfers from
X-3378
Washington, D.C.
Anril 7.1922.
! R O S F 'E R S
.
Ao Alftt ® 0 f
to Agent'6 fund
CR»*4>M 0 * WUH
Debits
Credits
Boston
$ 21,465,841.93 $
631,050.00
$
$
—
$
631,050.00
$ 8,000,000.00
$
Sew York
125,333,499.33
1,564,070.00
12,045,700.00
l,5b4.070,00
12,045,700.00
18,000,000.00
Philadelphia
66,133,216.08
803,200.00
1,003,000.00
3,803,200.00
1,003,000. oc
1,000,000.00
Cleveland
53,211,110.00
1,324,749.00
1,500.00
1,324,149.00
1,500.cc
1,000,000.00
Richmond
27,409,777.88
823,357.16
3,000,300.00
828,357.16
3,000,300.00
1,000,000.00
Atlanta
22,449,930.22
668,800.00
668,800.00
2,000,000.00
Chicago
70,071,841.28
1,002,625.00
215,328.12
1,002,625.00
218,323.12
5,000,000.00
St. Louie
17,107,931.05
681,500.00
6a., 500.00
5,000,000.00
Minneapolis
29,516,124.60
460,343.65
500,000.00
2,260,343.65
500,000.00
1,000,000.00
Kansas City
28,854,252.34
432,225.73
1,000,000.00
1,000,000.00
432,225.73
Dallas
11,555,843.97
649,240.00
1,500,000.00
649,240.00
1,500,000.00
San Francisco ^ — § 4 5 1 . 2 5 7 . ^
972.611.11
4.50a 000. 00
972.613.11
5.699.000.00
lotal
L?.515JO:,6?6.22 I s a a & m - s . . . . L L - 2 M 6 S , 828.12
£$ 24, 967, 528.12 $ 21,000,000.00
$ a , 000, ooo.oo "
Federal
Sett;
Lements from March ;
51, 1922 to April 5,1922.
Balance in
Summary of chang3s in ownerReserve
• incli
isive.
fund at close
ship of gold by 1
banks through
Bank of
of business
transfers and settlements.
Net
Total
Total
Net
Apr. 6, 1922
Debits
Debits
=
Credits
Credits
Decrease
Boston
™
Increase
$92,941,754.99
" $ 108,560,674.99 $ 15,618,920.00
$ 28,453,711.93
New York
$ 7,6l 8,020.00
28,555,958.61 410,084,882.83
381,528,924.22
125,259,170.77
10,555,958.61
Philadelphia
115,720,226.40
123,553,810.07
7,833,583.67
67,166,599.75
Cleveland
8,833,583.67
6,376,286.16
98,674,678,27
92,298,392.11
44,511,574.84
7,376,286.16
Richmond
89.001.308.24
92,086,706,81
3,085,398-57
33,667,119.29
Atlanta
4,085,398.57
38,606,670.57
44.746.105.70
6,139,435.13
25,920,565.35
Chicago
4,139,435.13
181, 938,^4.96
205,729,215.94
23,791,000.98
88,078,545-38
St. Louis
18,791.000.96
4,06l,4l4.06 106,964,801.30
102,903,387-24
7,365,016.99
5,061, 414.06
Minneapolis
25,651,116.64
25,918,697.57
267,580,93
29.023.361.88
Kansas City
1,267,580.93
77,701,168.03
80,646,102.31
2,944,934.28
32.366.960.89
Dallas
2,944,934.28
1^152,460.54 38.428.185.25
37.275.724.71
11,254,143.43
1,152,460.54
San Francisco
19.^4: 714.19 64.702.186.79
_ 45.l67.6S2.60
27.782.910.26
x
IS. 514.714.10
* 59,b8Q, 853.56 $1,340,415,394.27 $1,340,415,394.27 $ 59,680,853-56
$
| 520,849,680.76
$ 47, b80, 853.56 * 47,680,3533^
.
00
F E D E R A L
R E S E R V E
Summary of Transactions for period ending April^6. 1922
Balance last
Gold
Federal
Gold
Reserve
statement
Agent at
March 30, 1922. Withdrawals
Deposits
loo, 000,000 1$
AGENTS*
FUND
(CONFIDENTIAL)
Total
Deposits
through
withdrawals
transfers
from bank
withdrawals
for
transfers
to bank
X-3378a
Washington, D. C.
April 7. 1922.
Balance at
close of
business
April 6.1922.-
Total
Deposits
1$ 10,000,000)$
110,000,000
Boston
1 $
New York
1
. 381,000,000 1
Philadelphia
1
1^3,389,260
-
Cleveland
1
165,000,000
—
1
-
1
165,000,000
Richmond
1
33# 295,000
-
1
-
I
33,295,000
Atlanta
$ 10,000,000
1$
-
1$
1$
1
10,000,000
j
j 8,000,000
8,000,000)
136,389,260
)
1,500,000
75,000,000
371,000,000
10,000,000
1,500,000)
76,500,000
Chiccgo
I
312,644,500 |
7>000, 000
15,000,000
j
7,000,000
)
15,000,000)
320,644,500
St, Louis
I
65,300,000 I
2,000,000
1,000,000
1
2,000,000 j
1,000,000)
64,300,000
Minneapolis
1
15,200,000
)
1,800,000)
17,000,000
Kansas City
1
39,360,000
)
1,000,000)
40,360,000
Dallas
I
10,000,090
-
San Francisco 1
195,374,000
-
Total
! $ 1,520,562,760
1
-
1,300,000
1, 000, 000
j$ 19,000,000
1$ 28,500,000
1
1
1
1,199,000
1$ 1,199,000
| $ 9,800,000
j$
1,199,000
20,199,000
-
1
10,000,000
I
-
1
194,175,000
$ $ 38, 300,000) $ 1,538,663, 760*
CO
to
TREASURY DEPARTMENT
Office of the SBcretary
WASHINGTON
X-3379 :
April 6, 1922.
The Governor
Federal Reserve Board.
Sir:
You are hereby advised that the Department has referred to the Comptroller
General of the Halted States, Treasury Department Division, for settlement, the
account of the Bureau Of Engraving and Printing for preparing Federal Reserve
notes during the period March 1 to March 31, 1922, amounting to #116,612.16, as
follows,Federal Reserve Notes. 1914
&5
M
1,047,000 455,000
46,000
30,000
. 53,000
6,000
9,000
18,000
New York ....
Philadelphia.
Cleveland ...
Richmond ....
Atlanta
Chicago
Minneapolis..
Kansas City..
Dallas
San Francisco
103,000
22,000
18,000
39,000
112.000
1,449,000
120
186,000
6,000
14,000
1,000
— —
33.000
617,000
$100
18,000
******
1,000
2,000
6,000
75,000
——•
£50
36,000
4,000
— —
m III
II
<—*»•
3,000
6.000
216,000
' W
2,000
50,000
*•
•
1.000
20,000
2,352,000 sheets at $49.58 per M
Total
1,742,000
86,000
73,000
29,000
2,000
184,000
22,000
21,000
39,000
154.000
2,352,000
$116,612.16
The charges against the several Federal Reserve Banks are as follows:
Sheets
Compensation
New York
1,742,000 $29,004.30
Philadelphia
86,000
1,431.90
Cleveland
73,000
1,215.45
29,000
Richmond ...
482.85
2,000
Atlanta ....
33.30
Chicago
184,000
3,063.60
366.30
Minneapolis.
22,000
349,65
Kansas City,
21,000
649.35
39,000
Dallas
Jf.SS4.KI
San Francisco 154.000
2,352,000 39,160.80
Plate
Printing
Materials
#27,819.74
1,373.42
1,165.81
463.13
31.94
2,938.48
351.34
335.37
€22.03
2,459.30
37,561.44
121,269.82
1,050.06
891.33
354.09
24.42
2,246.64
268.62
256.41
476.19
1.880.34
28,717.92
Inc.Compensation
Total
$ 8,274.50 | 86,568.36
$
4,263.88
408.50
346.75
3,619.34
137.75
1,437.82
9.50
99.16
874.00
9,122.72
104.50
1,090.76
99.75
1,041.18
185.25
1,933.62
7.635.32
731.50
11,172.00 $116,612.16
The Bureau appropriations will be reimbursed in the above amount from the
indefinite appropriation "Preparation and Issue of Federal Reserve Notes, Reimbursable" , and it is requested that your Board cause such indefinite appropriation to be reimbursed in like amount.
Respectfully,
Wm. S. Broughton.
Commissioner.
FEDERAL RESERVE BOARD
WASHINGTON
X-338O
April 10, 1922.
SUBJECT: Supplies of Gold Certificates.
Dear Sir:
The enclosed copies of letters exchanged with the
Under Secretary of the Treasury are self-explanatory and are
sent to you for your information.
Very truly yours,
G o v e
(Enclosures)
TO THE GOVERNORS OF
ALL FEDERAL RESERVE BANKS,
rnor.
C O P Y
F E D E R A L
R E S E R V E
B O A R D
Washington
X*3380a
March 24, 1922.
Dear Mr. Sec re t ary:
I acknowledge receipt of your letter of March 2 3 r d , in which
you suggest that the Federal reserve banks make requisition on the
Treasurer in due course for sufficient stocks of gold certificates for
use in making payments on Government account.
In the past, the Federal reserve "banks have obtained new gold
certificates from the Treasury Department only when they have sent in
other gold certificates for redemption, or when they have made payment
therefor by checic to the order of the Treasurer of the United States
drawn on their gold settlement fund accounts- The cost of shipping
new golc certificates to replace those sent in by the Federal reserve
banks for redemption is borne by the Treasury Department; the cost of
shipping new gold certificates when paid for by gold settlement fund
check is borne by the Federal reserve banks. Is the Board correct in
its understanding that he re after the Treasury Department will furnish
the banks with gold certificates on the same basis as it now furnishes
them with silver and legal tender certificates?
In a letter received from the Federal Reserve Bank of Philadelphia, a copy of which I transmitted to the Secretary under date of
March 21st, the bank asked, to be informed what payments made by it are
to be regarded as "payments for the account of the United States".
It is believed that if all Federal reserve banks were advised in this
particular, they would have soire real basis for determining their requirements for gold certificates.
For your infonnation, I would state that it is not ths practice
at the present time for the Federal reserve banks to make requisitions
direct upon the Treasurer of the United States for supplies of United
States currency.
The banks make known their requirements daily by wire
to the Federal Reserve Board and request that the Board arrange with
the Treasurer of the United States shipments of the amounts, kinds and
denominations of United States currency needed by them. Is it desired
that Federal reserve banks requiring gold certificates make requisition
therefor direct on the Treasurer of the United States, or is it desired
that they make known their requirements through the Board in the same
manner as in the case of silver end legal tender certificates, or is it
preferred that hereafter the Federal reserve banks make requisition
direct upon the Treasurer of the United States for all forms of United
States currency desired by them?
Very truly yours,
(Signed) W. P. G, HARDING,
G o v e r n o r .
Honorable S. P. Gilbert, Jr.-,
Under Secretary of the Treasury.
COPY
X-3380c
THE UNDER SECRET/RY OF THE TREASURY
Washington.
April 6, 1922,
My daar Governor:
I received your letter of March 24, 1922, in reply to my letter of
March 23d, with regard to the supply Gf gold certificates by the Treasury
to the Federal Reserve Banks* The Treasury Department is prepared to fur
nish the Federal Reserve Banks with gold certificates on the same basis
as it now furnishes them with silver certificates and United States notes,
under the general regulations governing the handling of United States
paper currency by the Federal Reserve Banks.
t believe that the procedure now used for the requisition of silver certificates and United
States notes through the Federal Reserve Board should be continued, and
extended to cover requisitions of gold certificates as well*
It was
not the intention in my letter of March 23d to suggest that requisitions
for gold certificates should be made direct of the Treasurer of the
United States, rather than through the Federal Reserve Board.
With regard to your suggestion that Federal Reserve Banks should
be advised as to what payments are to be regarded as "payments for the
account of the United States", I should say that the question had been
answered by the Secretary's letter of March 24, 1922, with regard to
the letter Iran the Federal Reserve Bank of Chicago, dated March 14th,
I understand that the Secretary's letter has since been transmitted
by the Federal Reserve Board to all the Federal Reserve Banks. The
general regulations of the Treasury Department issued under date of
Au@ast 30# 1920, as to the handling of United States paper currency
presented for redemption or replacement, and under date of October 19,
1920, as to the handling of coin and other functions previously performed by the Subtreasuries, also indicate the Treasury's views on the
subject.
If it would be helpful to the Federal Reserve Banks to have
more detailed information, the Treasury will be glad to reply specifically to any inquiries made.
Very truly yours,
(Signed) S. P. Gilbert Jr.,
Under Secretary,
Hon. I . P. G, Harding^
/
Governor, Federal Reserve Board,
Washington D. C.
THE UNDER SECRETARY OF THE TREASURY
Washington
X-33 80b
March 23, 1922
My dear Governor:
In view of the Secretary's letter of March 6,
1922, to the Treasurer of the United States as to
payments of gold certificates and other forms of United
States paper currency, a copy of which was transmitted
to the Federal Reserve Board with the Secretary's
letter of the same date, I suggest that it would he
well for the several Federal Reserve Banks to make requisition on the Treasurer in due course for sufficient
stocks of gold certificates for use in making payments
on Government account. According to reports from the
Federal Reserve Banks, the stacks of gold certificates
at the banks are relatively low, particularly in the
smaller denominations*
The Treasury will be prepared
to give prompt attention to requisitions for additional
stocks when submitted in the usual manner.
Very truly yours,
(Signed) S. P. Gilbert, Jr.,
Under Secretary
Hon. W. P. G, Hardiiig,
Governor, Federal Reserve Board#
FEDERAL RESERVE BOARD
WASHINGTON
X-33SI
April 11, 1922.
SUBJECT:
Report of Treasury Currency Committee.
Dear Sir:
On March 2gth, the Treasury Currency Committee
conferred with representatives of several of the Federal
Reserve Banks. There is enclosed, herewith, for your information, a copy of a summary report of the conference,
and you are advised that the conclusions reached by the.
conference have the approval of the Treasury Department
and the Federal Reserve Board.
In connection with the recommendation of the
conference with respect to the Federal Reserve Banks estimating their future requirements for new paper currency, each
Federal Reserve Bank is requested to telegraph the Board on
April 29, 1922, and on the last business day of each month
thereafter, the estimated amount of each denomination of
new paper currency which it will require during the ensuing
month. Estimates of the requirements of each branch bank
should also be telegraphed, separately, to the Board and not
combined with those of the head office.
The Federal Reserve Banks are requested to confirm
by letter the telegrams above referred to and to include in
the letter tentative estimates of the requirements of the head
office and branch banks, separately, for new paper currency
for the ensuing three monthsVery truly yours,
(Enclosure)
TO THE GOVERNORS OF
ALL FEDERAL RESERVE BANKS.
G o v e r n o r .
COPY
X-33Sla
Summary Report of Conference with Respect
to Paper Currency Supply and Distribution
Held in the Office of the Commissioner of the Public Debt on March
29, 1922.
Those attending were:
The currency committee, consisting of:
Messrs, Broughton and Elliott, Office of the
Commissioner of the Public Debt,
Mr. Pearce, Cashier,
Messrs. Eddy and Buell, of the Federal Reserve Board.
Representatives from Federal Reserve Banks, as follows:
Messrs. Gil b art and Higgins, New York.
Mr, Chase, Boston.
Mr. Netterstrom, Chicago.
The conference dealt chiefly with the following points:
(1) the currency printing program and distribution of new currency;
(2) a standard of fitness for circulated notes.
!• The currency program and distribution of new currency. Mr. Broughton
briefly called attention to the report submitted about a year and a half
ago by a committee of the Federal Reserve Banks, to the situation existing a year ago when the Department estimates were compiled, and the situation existing last fall at the time of the Governors' conference, and
to the present situation; all with respect to currency supply and the
current printing program so far as relates to the Treasury. He spoke of
the committee appointed to supervise the supply and distribution of new
currency, composed of Treasury and Federal Reserve Board representatives,
stating that due to decreased demands for currency and the attention of
Mr, Eddy and Mr. Pearce the currency committee, as such, up to date had
not been an active factor in the situation.
He referred to instructions
recently given by the Secretary to the Treasurer of the United States
regarding kinds and denominations of currency in which payment should
be made, stating that the restoration of silver certificates to circulation would in time supply practically all the l's and 2's required,
and that as a result United States notes for the most part must in
future be issued in denominations higher than $2.
He spoke of the
necessity for saving and the possibility of arriving at a definite
basis for currency supply, involved with which would be the determination of a stand?rd of fitness for circulated notes.
• general discussion followed.
A
No adverse factors in the procedure established in August 1920 for the distribution of new currency
through the Federal Reserve Banks were developed. Recent instructions
- 2 ~
X-33gla
to the Treasurer authorizing him to make direct returns on currency
presented to him for redemption were referred to as a possible factor
in breaking down the existing system should banks generally so proceed.
It was pointed out, however, that direct transactions were so few and
in such small amounts that the general situation could not be affected.
It was the consensus of opinion that it would be entirely
practicable for Federal Reserve Banks to anticipate their denominational
requirements of new notes definitely for a one monthfs period and approximately for a three months1 period, such estimates to be available for
the information of the Treasury and the Federal'^Reserve Board.
2, Standard of fitness for circulated notes*
Mr. Elliott, chairman of
special Treasury committee, reported the results of an inquiry recently
completed*
He presented a definition of circulated paper currency
fife for further circulation, as formulated by the special committee,
as follows:
"Paper currency tendered for redemption in order to
be classed as fit for further circulation must be fairly clean feo that its class, denomination and genuineness
can be determined without difficulty, and must contain
a sufficient BSdunt of *lif e1 or 'sizing1 to permit its
being handled with facility. It should not contain
heavy creases which break the fibre of the paper and
indicate that disintegration has begun,
A fit note
when held by one end in one hand and pressed into a
slightly concave shape lengthwise should sustain itself substantially on a line with the hand. It should
not present a lizqp or rag like appearance* If a note
has retained a fair amount of the original strength
or fsizing!, it is fit unless it is so badly soiled
as to be offensive, or is torn, perforated or otherwise
mutilated, Mere creasing or wrinkling that has not
broken nor seriously weakened the note does not make
it unfit. So-called *dog ears1 or bent corners do not
render notes unfit."
And he further presented statements showing the actual number of fit
notes found by the committee in te$t examinations of currency in
process of redemption, the standard of fitness being in accordance
with the above definition.
Copies of these statements are attached
hereto as exhibits 11 A11 and "B\ The actual notes were presented for
the inspection of the conference, and other notes not previously inspected were presented for examination by the conference.
It was the consensus of the conference that copies of the
findings should be reported to all Federal Reserve Banks, and that
the Federal Reserve Banks themselves would establish and maintain
a uniform standard of fitness if such test examinations are made
- 3 -
X-33Sla
periodically by the Treasury and reported to all Federal Reserve Banks.
3. Conclusions,
The conference unanimously reached the following conclusions with recommendation to the Secretary of the Treasury and the
Federal Reserve Board that they be adopted and given official sanction;
(1) that the standard of fitness of paper currency for further circulation be defined as follows:
"Paper currency tendered for Redemption in order to
be classed as fit for further circulation must be fairly clean so that its class, denomination and genuineness
can be determined without difficulty, and must contain
a sufficient amount of 'life' or 'sizing' to permit its
being handled with facility.
It should not contain
heavy creases which break the fiber of the paper and
indicate that disintegration has begun.
A fit note
when held by one end in one hand and pressed into a
slightly concave shape lengthwise should sustain itself substantially on a line with the hand. It should
not present a limp or rag like appearance. If a note
has retained a fair amount of the original strength
or 'sizing', it is fit unless it is so badly soiled
as to be offensive, or is torn, perforated or otherwise
mutilated. Mere creasing or wrinkling that has not
broken nor seriously weakened the note does not make
it unfit. So-called 'dog ears' or bent corners do not
...render notes unfit."
(2) that the Treasury from time to time, in accordance with such standard,
make test examinations of each kind and each denomination of paper currency
presented for redemption by each Federal Reserve Bank, and that the result
of such examination be reported at the end of each month to the Federal
eserve Board for the information and guidance of Federal Reserve Banks;
(3) that Federal Reserve Banks be requested at the end of each month to
estimate their denominational requirements of new paper currency for the
ensuing month, and that at the same time they be requested to submit a
tentative estimate for the ensuing three months; such reports when
received by the Federal Reserve Beard, insofar as they relate to
currency supplied by the Treasury, to be transmitted to the Commissioner of the Public Debt, as Chairman of the Currency Committee,
f
k
X-3381a
Exhibit "A"
-
A SPECIAL EXAMINATION OF $1 UNITED STATES NOTES AND SILVER CERTIFICATES
FROM FEDERAL RESERVE BA^KS SHOWED PERCENTAGES OF FIT NOTES AS FOLLOWS:
United States
Notes
Silver Certificates
Boston
25
7
New York
32
29
Philadelphia
33
21
Cleveland
3
17
Richmond
g
Atlanta
3
Chicago
24
not examined
19
not examined
Minneapolis
not examined
31
Kansas City-
not examined
18
Saint Louis
33
27
Dallas
Average for all
banks
3
15
not examined
21
J
Exhibit "B"
RESULT AS SHOWN BY FX/¥IN/TTQN OF CURRENCY RECEIVED
X-3331a
FROM FEDERAL RESERVE BANKS BY THE RATIONAL BANK REDEMPTION AGENCY
Bank from which:
Denomireceived
:
Class
nations
Boston
:N.B. Notes
10
n
:F.R.
20
Few York
:N.B. Notes
5
it
:N.£.
10
I
f
:N.B.
20
n
:F.R.
5
if
:F.R.
10
Philadelphia
:N.B. Notes
5
(
f
:F.R.
5
T
l
:F.R.
- 10
Cleveland
~:F.R.' Notes
5
1
!
:F.R.
10
Richmond
:N.B. Notes
5
I
T
:N.B.
10
f
t
:N.B.
20
I
t
:F.R.
5
Atlanta
:N.B." Notes
5
:N.E.
n
i
f
n
:N.B.
:F.R.
Chicago
:N.B. Notes
i
t
:N.B.
i
t
:3f.B.
n
:F.R.
Saint Louis
: N . B . " Notes
M
:F.R.
Minneapolis
:N.B. Notes
i
t
:F.R.
Kansas City
:N.B. Notes
n
_:F,R.
Dallas
:N.B." Notes
fi
:F.R.
:N.B. Notes
San Francisco
:N.B.
:N.B.
:N.B.
:F.R.
:F.R.
:F.R.
ii
t
i
i
t
I
I
n
it
10
20
10
5
10
20
10
-
5
20
10
10
20
10
10
20
5
10
20
50
5
10
20
No. of notes
examined
400
400
Per cent
of fit
Average per
cent of fit
12
12
bCO
34
400
'400
400
400
400
400
400
37
20
26
27
22
22
UOCT ~
400
300
300
300
400
400
400
400
400
400
400
400
400
400
400
400
400
400
400_
400
400
40C
300
400
100
400
400
400
2?
11
. . 15
6
23
0
14
14
5
6
24
24
15"
25
24
24
0
S
10
20
14
10
21
24
6
20
14
10
37
37
10
10
22
3
22
ll
"
17
4 ^
34
48
,
3
11
17
34
51
61
40
11
61
„
FEDERAL RESERVE BOARD
WASHINGTON
X-3382
April 11, 1922.
SUBJECT;
Closing Hour of Federal Reserve Banks.
Dear Sir:
(X—3337^
Section 5 of the Board's circular letter of February 21, 1922
the subject of "Wire Transfers of Funds™ reads as follows:
on
"Telegraphic transfers for consummation on date of receipt
should not be accepted by Federal Reserve Banks later
than thirty minutes prior to the closing hour of the
Federal Reserve Bank to which transfer is made, Any
transfers requested after that hour may be made at the
discretion of the Federal Reserve Bank receiving credit.w
The Board has been requested to advise all Federal Reserve
Banks what interpretation should be placed on the words "the closing
hour of the Federal Reserve Bank to which transfer is made,"
The
rules end regulations adopted by the Board for the guidance of the
Federal Reserve Banks in handling wire transfers of funds are based
upon recommendations made by the Federal Reserve Leased Wire Committee
and the Board is advised that the Committee, when recommending that
Telegraphic transfers for consummation on date of receipt should not
be accepted by Federal Reserve Banks later than thirty minutes prior
to the closing hour of the Federal Reserve Bank to which transfer is
made had clearly in mind the regular closing hour of the Federal
Reserve Banks for transacting banking business, which both the Committee
and the Board understands is the same as the closing hour of the membsnks in the cities in which the Federal Reserve Banks are located#
Very truly yours,
G 0 v e r n o^r.
TO THE GOVERNORS OF
m
FEDERAL RESERVE BANKS.
FEDERAL RESERVE BOARD
a O B D S E T T L E M E N T
FUND
Summary of transactions for period ending April .13. 1922,
Federal
Balance last
Gold
Gold
Reserve
statement
Bank of
April 6, 1922
Withdrawals
Deposits
X-33S3
V/ashingt on, D, C
April 14. 1922
(CONFIDENTIAL).
Aggregate
Aggregate
withdrawals
deposits.and
T R A N S F E R S
and transfers
transfers from
to Agent's fund
Agent's fund
Debit?
'
Credits
Boston
$ 28,1+53,711.93
577,750.00
©7000, COO. 00
750.00
New York
1,3 6 6 , 2 0 0 . 0 0
125,259,170.77
l,$00,00
1,366,2 0 0 . 0 0
6, 000, 000.00
1,900.00
Philadelphia
67,166,599.75
039,750.00
9,000,000.00
12,039,750.00
3,000, 000.00
9,000,000.00
Cleveland
44,511,574.84
l, 000,000.00
::381,115.00
4,381,1 1 5 . 0 0
1,000,000.00
3, 000,000.00
Richmond
1, 048,050.00
33,667,119.29
4,000, 800, 00
6,048,0 5 0 . 0 0
4,000,800.00
Atlanta
25,920,565.35
758,391-00
758,3 9 1 . 0 0
Chicago
88,078,545.38
1,238,980.00
1,0 0 0 , 4 o o . 00
11,238,980.00
1*000,400.00
5,000,000.00
St. Louis
7,365,016.99
1, 000,400.00
733,830.00
1, 000, 000.00
1,000,400.00
733,830.00
Minneapolis
29.023.361.88
423,890.54
423,890,54
3, 0 0 0 , 5 0 0 . 0 0
3,000,500.00
Kansas City
32.366.960.89
718,294,83
4oo.oo
400.00
2, 000, 000.00
718,294.83
Dallas
11,254,143.43
813,450.00
1, 000, 000. 00
313,450.00
1,000,000.00
San Francisco
27,782.910.26
956,583,07
4,000.000.00
6,538,300.00
1 003.800.00
_25i 583.07
Tstal_,
H O i O u Z Z Z l i LQCS^QO.OO .1 -_4Q,056J2S4144
—15i.Q00^Q0Qs.00„_.L$__l^QQ0J000i00_.
IZZElSilzQoloo
Federal
Settlements from April 7, 1922 to April 13, 1922
Balance in
Summary of changes in ownerReserve
inclusive
fund at close
ship of gold by banks through
Bank of
of business
transfers and settlements.
Net
Total
Total
Net
Apr. 13, 1922
Debits
Debits
Credits
Credits
Increase
Decrease
Bpston
083,579-98 $
98, 129,587.00 $
$
6,046,007.02
$
46,007.02
27,921,968.95
New York
364,777,454.65
383,531,102.78
18,753,648.13
136,648,518.90
12,753,648.13
Philadelphia
5,730,882.38
123,848,729.16
118,117,846.78
2,730,882,38
61,395,967.37
Cleveland
98,304,844.27
98,756,792.72
451,948.45
38,582,408,29
2,548,051.55
Richmond
89,416.165.14
448,962.11
31,652,666.26
32,796,97
32,796.!
Atlanta
39,7 6 5 . 2 6 5 . 1 5
197,384.21
4,432,119.06
4,432,119.1
29,594,293.41
Chicago
188, 517,448.60
5.531.897.21
182,985,551.39
77,308,068.17
531,897-21
St. Louis
1,573,595»42
94,786,282.37
212,686.95
573,595.42
7,057,991.57
Minneapolis
28,6 5 6 , 1 0 2 . 8 4
3,924,519.64
8 : 731,583.20
27,675,451.70
3,924,519.64
Kansas City
8.365.086.22
80,
148,321.q4
783,235.72
6,365,086.22
25,283,979.84
Dallas
926,787.75
025,033. bO
098,245.85
10,513,905.68
926,787.75
San Francisco
3.661,751.01
375,225.19.,
211,474.18
36,248.99
Total
$ 2 9 , 7 1 6 , 5 1 9 , 6 3 $1,284,204,452.89
$ 17,600,820.17
$ 17,600,820.17
?
S
:
?k
I
vi
iO
f e d e r a l
r e s e r v e
Summary of transactions for period ending April 13, 1922
Gold
Balance last
Federal
Gold
statement
Reserve
•Agent at
Withdrawals
April 6, 1922
Deposits
Boston
$ 110,000,000
New York
136,389,260
Cleveland'
-
165,000,000
|*
l
371,000,000
Philadelphia
$
Richmond
76,900,009
Chicago
320,644,500
St. Louis
-
-
-
-
!
1
2, 500,000
-
1
1,000,000
-
7,000,000
1 10,000,000
—
64,300,000
2,000,000
t
2,500,000
•
Minneapolis
17,000,000
1,000,000
i
1
-
Kansas City
40,360,000
2,000,000
|
1,000,000
Dallas
10,000,000
1
1
194,175,000
1
San Francisco
Total
*1,538,663,760
3,000/000
-
$
20,000,000
$
-
10,000,000
-
Total
Deposits
$
-
$ 110,000,000
1
-
371,000,000
1
141,389,260
I
165,000,000
-
' 5, coo, coo
X-3383 a
"< a s h i n g t o n , B.C.
A p r i l 14.1922.
B a l a n c e at
c l o s e of
business
A p r i l 13, 1922
1
1 0 , 0 0 0 , coo
-
3,000,coo
7,500,000
. 37,795, 000
-
1,000,000
77,500,000
1
7,000,000
20,000,000
333,644,500
|
-
2,000,000
2, 500,000
64,800,000
1
-
-
1,000,000
-
-
2,000,000
-
-
|117,000,000
F U K D
$
-
5,000,000
I
33,295,000
Atlanta
$
1
(CON!
PIDENTIAL)
Deposits
Total
through
transfers
Withdrawals
from bank
Withdrawals
for
transfers
to bank
-
.
age N T S
-»
5,000,000
-
10,000,000
3,534,500
1,000,000
.
1
$ 25,000,000
39,360,000
*t
10,000,000
1
3,534,500
3,534,500
$
16,000,000
1
190.640.500
1
$ 23,534,500
$ 42, 000, 000 $ 1 , 5 5 7 , 1 2 9 , 2 6 0
1
-
-
OT
CO
FEDERAL RESERVE BOARD
WASHINGTON
April 15, 1922.
X-338U
SUBJECT:
Record of Bank Membership
In verifying schedules submitted by Federal Reserve
Agents for inclusion in their annual reports, it has been noted
that in several instances the schedules relating to new member
banks dc not agree with the records of the Board as regards dates
of admission.
In order that the practice in this connection may be
uniform, therefore, you are advised that the Federal Reserve Board
considers that a bank becomes a member of the system on the date
indicated under one of the following circumstances:
1.
National Banks.
(a) Ordinarily under the present practice the Comptroller
of the Currency does not issue a certificate of
authority to begin business until advised by the
Federal Reserve Board that it has approved an application for stock and that the applying bank has made
the required 50% payment thereon. Under such circumstances the bank becomes a member on the date of the
certificate issued by the Comptroller authorizing it
to begin business.
(b) If for any special reason the Comptroller of the Currency
should issue his certificate of authority to a bank to
begin business prior to the bank having filed an application for stock in the Federal Reserve Bank, the bank
becomes a member as of the date the Federal Reserve
Agent receives the required payment for stock provided
the b a n k a p p l i c a t i o n has previously been approved by
the Federal Reserve Board; if, however, payment is made
prior to the Board having approved the application, the
bank becomes a member on the date the application is
approved.
(c) Where a state institution converts into a national bank,
the stock of the state member bank is transferred to
the national bank on the books of the Federal Reserve,
Bank without the formality of a new application. In
X-33SU
-2-
such cases, membership as a national bank begins and
membership as a state bank ceases as of the date on which
the Comptroller of the Currency issues his certificate of
authority to the bank to begin business.
2. State Institutions.
(a) With reference to state institutions, the present procedure
is (l) filing of application, (2) approval by the Board,
subject to conditions, (3) acceptance of such conditions,
(4) final approval by the Board, (5) payment for stock.
Under this order of procedure, the applying institution
becomes a member as of the date the Federal Reserve Agent
receives the required payment on the stock subscription.
(b)
In case a state bank applying for membership should make
the required payment on stock prior to the completion of
the other formalities in order, as set forth in the preceding paragraph, membership begins as of the date the
Federal Reserve Board gives final approval to the bank's
application.
In connection with the Federal Reserve Agents advising the
Board by telegraph of payments made on account of subscriptions to
stock, it is desirable that the Board be advised in each case on the
date on which payment is actually received, the code word "Newcome"
being used for this purpose. If, however, for any reason, the telegram is not dispatched to the Board on the date on which payment is
actually made, the Federal Reserve Agents, in such cases, are requested to indicate in the telegram the date on which they received
payment.
Very truly yours,
Gove
rnor.
FEDERAL RESERVE BOARD
WASHINGTON
x-3385
April 19, 1922.
SUBJECT:
Ruling on Reserves Against Liabilities Resulting
from Receipt and Use of Trust lUnds.
Dear Sir:
For some time past the Federal Reserve -Board has
had under consideration the question of reserves against
liabilities which result from the receipt and use of trust
funds.
At the meeting of the Board today a formal ruling
on this question was adopted, a copy of which is enclosed
herewith for your information.
Very truly yours,
G o v e r n o r .
(Enclosure)
TO ALL F. R. AGENTS
COPIES TO GOVERNORS.
RESERVES AGAINST LIABILITIES RESULTING FROM RECEIPT AND USE OF TRUST FUNDS.
X-33S5*
A national bank exercising fiduciary powers need not
carry reserves against trust funds, which it keeps
segregated and apart from it* generpl aglets, or deposits in another institution.
It", however, such funds
are mingled with the general assets of the bank under
authority of Section 11(k), Federal Reserve Act, a
deposit liability thereby arises against which reserves
must be carried.
All funds received by a national bank, including funds
deposited by a corporate debtor to meet the corporation's
maturing obligations, give rise to deposit liabilities
against which reserves must be carried, unless the funds
are received as trust funds and are kept segregated from
the general assets of the bank.
In computing reserve requirements, trust funds deposited
by a national bank in another institution must, be classified by the latter as an individual deposit rather than
a bank deposit.
Whether funds received under certain circumstances are
trust funds depends in each case upon the particular circumstances.
These principles are equally applicable to State member
banks and trust companies receiving and using funds under
like circumstances.
A number of inquiries have been received relating directly or indirectly
to the subjects discussed in the two rulings published on p. 1^35 of the
Federal Reserve Bulletin for December, 1^21, and the Board has deemed it
advisable to issue this further ruling dealing generally with the same
subjects and discussing also certain related questions which have been
raised since that time.
Section 11(i) of the Federal Reserve Act, which authorizes the Federal
Reserve Board to grant permission to national banks to exercise dfiduciary
powers, provides in part that:
-2-
X-33S5a
"National banks exercising any or all of the powers
enumerated in this subsection shall segregate all
assets held in any fiduciary capacity from the general
assets of the bank and shall keep a separate set of
books and records showing in proper detail all transactions engaged in under authority of this subsection."
If this provision were not qualified in a subsequent paragraph
of the section, all funds received by a national bank in a fiduciary
capacity would have to be kept separate and apart from the general assets
of the bank and could not be mingled with other funds received by the
bank in the course of its strictly banking business.
This provision is
merely a statement of the general rule of law that a trustee must keep
property which it holds in trust segregated from property belonging to
the trustee individually or to other trusts.
The national bank could,
however, unless prohibited by the terms of the trust to which the particular funds belonged, deposit them in another bank for the account of the
national bank as fiduciary, for this would not be mingling trust funds
with the funds of the bank acting as fiduciary.
It is to be noted, however, that a subsequent provision of Section
11(k) modifies the prohibition against mingling funds held in a fiduciary
capacity with the general assets of the bank.
The provision in question
reads as follows J
"Funds deposited or held in trust by the bank awaiting
investment shall be carried in a separate account and
snail not be used by the bank in the conduct of its'
business unless it shall first set aside in the trust
department United States bonds cr ether securities
approved by the Federal Reserve Board."
Construing this latter provision, the Federal Reserve Board has,
by its Regulation F, Series of 1920, provided as follows:
-3-
• X-33S5a
"Funds received or held in the trust department of a
n at ...una* u x a aw ax ling inve stzadnt or distribution may
au.
be deposited in the commercial department of the bank
to the credit of the trust department, provided that
the bank first delivers to the trust department, as
collateral security, United States bonds, or other
readily marketable securities owned by the bank, which
collateral security shall at all times be equal in market
value to the amount of the funds so deposited."
Consequently, unless prohibited from so doing by the terms of the
particular trust, a national bank may deposit in its commercial department
funds which it has received in a fiduciary capacity and which are held
temporarily awaiting investment or distribution, that is, it may mingle
such funds with the general funds of the bank, provided it deposits proper
collateral in its trust department as the security to the trust estate for
the funds thus used.
When, however, trust funds are thus deposited in
the bank's commercial department, the bank incurs a deposit liability
against which reserves must be carried, since, in effect, the trust department has become an ordinary depositor in the commercial department,
and the deposit constitutes in the hands of the commercial department,
funds which may be used generally in the conduct of its business.
The result is that if funds received by a national bank in its
fiduciary capacity are kept separate from the bank's general funds, so
that the property of the trust estate can always be identified, or if the
trust funds are deposited in another institution to the credit of the trust
department, the national bank is, with respect to such funds, subject to
no deposit liability against which it need carry reserves; but as soon as
the bank mingles those trust funds with its general funds, it thereupon
incurs a deposit liability against which it must maintain reserves.
To
-4state these p r o p o s i t i o n s in another form?
X-33 85a
Bo deposit liability results
f r o m t r u s t f u n d s d e p o s i t e d i n a n a t i o n a l b a n k so l o n g a s s u c h f u n d s a r e
carried as trust funds and kept segregated from t h e b a n k ' s general
assets.
If t h e t e r m s of t h e t r u s t p e r m i t , t h e t r u s t f u n d s m a y b e e m -
p l o y e d i n o r d i n a r y c o m m e r c i a l b a n k i n g i n t w o w a y s , b o t h of w h i c h , h o w e v e r ,
w i l l g i v e r i s e t o d e p o s i t l i a b i l i t i e s ; it m a y t r a n s f e r t h e f u n d s t o i t s
c o m m e r c i a l d e p a r t m e n t , a s p r o v i d e d i n S e c t i o n 1 1 ( k ) of t h e F e d e r a l R e s e r v e
A c t a n d P a r a g r a p h V of t h e B o a r d ' s R e g u l a t i o n F, i n w h i c h e v e n t t h e
n a t i o n a l b a n k w i l l b e s u b j e c t t o r e s e r v e r e q u i r e m e n t s o n a c c o u n t of t h i s
d e p o s i t i n i t s c o m m e r c i a l d e p a r t m e n t , or it m a y m a k e a g e n e r a l d e p o s i t
of t h e f u n d s i n a n o t h e r i n s t i t u t i o n f o r t h e a c c o u n t of i t s t r u s t d e p a r t ment, and i n t h i s event t h e depositary i n s t i t u t i o n w i l l be required to
carry reserves against such deposit.
If t h e n a t i o n a l b a n k r e c e i v i n g f u n d s i n i t s f i d u c i a r y c a p a c i t y
d e p o s i t s t h o s e f u n d s i n a n o t h e r i n s t i t u t i o n , t h e l i a b i l i t y of t h a t o t h e r
i n s t i t u t i o n is, a s s t a t e d a b o v e , a d e p o s i t l i a b i l i t y a g a i n s t w h i c h i t
m u s t c a r r y a r e s e r v e b a l a n c e w i t h i t s F e d e r a l R e s e r v e B a n k , if it i s a
member bank.
Such a deposit should b e d e s i g n a t e d in some w a y as a deposit
f o r a c c o u n t of t h e n a t i o n a l b a n k a s f i d u c i a r y a n d t h e d e p o s i t a r y b a n k m u s t
t r e a t it a s a n i n d i v i d u a l d e p o s i t r a t h e r t h a n a b a n k d e p o s i t ; t h a t is,
in computing its required reserve, the depositary bank may not include
its l i a b i l i t y to the n a t i o n a l b a n k as fiduciary a m o n g t h e a m o u n t s due t o
other banks from w h i c h the amounts due from other banks may be deducted.
T h i s n e c e s s a r i l y r e s u l t s f r o m t h e f a c t t h a t t h e t r a n s f e r of t r u s t f u n d s
t o the. d e p o s i t a r y b a n k c o n s t i t u t e s a d e p o s i t b y t h e n a t i o n a l b a n k a s
fiduciary and not a deposit by such bank in its own right and consequently
-5-
x_33 85a
the deposit is not an item due to banks generally, but is an item due
t o t h e n a t i o n a l b a n k a s f i d u c i a r y a n d so a n a l o g o u s t o a n i n d i v i d u a l
deposit.
The same p r i n c i p l e s must also determine w h e t h e r funds w h i c h are
received by a national bank from a corporate d e b t o r to m e e t the corporat i o n ' s m a t u r i n g o b l i g a t i o n s (such as b o n d s and c o u p o n s ) constitute
d e p o s i t l i a b i l i t i e s w i t h i n t h e m e a n i n g of S e c t i o n 1 9 of t h e F e d e r a l R e s e r v e -Act.
If t h e f u n d s s o r e c e i v e d a r e t r u s t f u n d s a n d a r e k e p t at a l l
t i m e s segregated from the bank's general assets, the b a n k incurs n o
d e p o s i t l i a b i l i t y and need carry n o r e s e r v e a g a i n s t such funds.
t r u e i r r e s p e c t i v e of t h e m a t u r i t y of t h e o b l i g a t i o n s .
This is
If, o n t h e o t h e r
hand, the funds are mingled w i t h the b a n k ' s general funds, a deposit
l i a b i l i t y is t h e r e b y created against w h i c h r e s e r v e s m u s t be carried.
W h e t h e r or n o t i n a n y g i v e n c a s e f u n d s r e c e i v e d b y a b a n k t o m e e t
a corporate debtor's maturing obligations constitute trust funds depends
u p o n t h e e x p r e s s or i m p l i e d t e r m s of t h e a g r e e m e n t u n d e r w h i c h t h e f u n d s
a r e r e c e i v e d a n d t h e o t h e r c i r c u m s t a n c e s of t h e p a r t i c u l a r c a s e .
If t h e
b a n k i s a c t i n g a s t r u s t e e u n d e r a d e e d of t r u s t f o r t h e h o l d e r s of t h e
o b l i g a t i o n s w h i c h are to be paid, the p r e s u m p t i o n w o u l d be, in the absence
of e v i d e n c e t o t h e c o n t r a r y , t h a t it w a s t h e i n t e n t i o n of t h e p a r t i e s t h a t
t h e f u n d s r e c e i v e d s h o u l d b e h e l d a s t r u s t f u n d s s u b j e c t t o t h e t e r m s of
t h e d e e d of t r u s t .
O n t h e o t h e r h a n d , if t h e b a n k h a s n o d u t y t o t h e
h o l d e r s of t h e o b l i g a t i o n s , a n d t h e r e i s n o s p e c i a l a g r e e m e n t s e t t i n g f o r t h
the bank's duties in regard to handling the funds, the bank b e i n g authorized
m e r e l y to pay the o b l i g a t i o n s w h e n and a s p r e s e n t e d , t h e p r e s u m p t i o n w o u l d
be that the t r a n s a c t i o n w a s intended t o give r i s e to a n ordinary deposit
-6-
x-3385a
t'
l i a b i l i t y , the bank h a v i n g authority to m i n g l e t h e f u n d s w i t h its
g e n e r a l a s s e t s a n d a c t i n g m e r e l y a s t h e a g e n t of t h e c o r p o r a t e d e b t o r
i n paying the obligations.
I n t h e t w o r u l i n g s p u b l i s h e d o n p * I U 3 6 of t h e 1 9 2 1 F e d e r a l
R e s e r v e B u l l e t i n , the Board p a s s e d u p o n t h e f a c t s of t w o s p e c i f i c
situations but did not attempt to lay down definite rules for differentiating between deposits which constitute trust funds and deposits
which give rise to a liability against which reserves must be carried.
In the present ruling, however, the Board l a y s down t h e broad rule
t h a t a l l f u n d s r e c e i v e d b y a b a n k i n t h e c o u r s e of i t s c o m m e r c i a l or
fiduciary business must be treated either as deposits against which
r e s e r v e s m u s t b e c a r r i e d , or a s t r u s t f u n d s s u b j e c t t o t h e o r d i n a r y
r e s t r i c t i o n s a n d s a f e g u a r d s i m p o s e d u p o n t h e c u s t o d y a n d u s e of t r u s t
funds, and that w h e t h e r a certain deposit falls in one category or the
other m u s t depend in each cage u p o n the p a r t i c u l a r t e r m s and conditions
u n d e r w h i c h it w a s m a d e .
For convenience, the institution receiving the funds in question
h a s b e e n referred to t h r o u g h o u t the r u l i n g a s a n a t i o n a l bank.
It i s
t o b e u n d e r s t o o d , of c o u r s e , t h a t t h e p r i n c i p l e s h e r e i n s t a t e d a r e e q u a l l y
a p p l i c a b l e to State m e m b e r b a n k s and t r u s t c o m p a n i e s r e c e i v i n g and u s i n g
funds under like circumstances.
gold
Summary of transactions for peri od ending April 20,
Balance last
Gold
Jederal
s tatement
Reserve
Apr, 13, 1922.
Bank of
Withdrawals
Boston
$
New York
"Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
$
27,921,968.95 $
136,648,518.90
61,395,967.37
38, 582, 408,29
31,652,666.26
29,594,293.%!
77.308.068.17
7,057,991.57
27,675,451.70
25,283,979.8%
10,513,905.68
33.700.876.18
671,850,00 $
1,285,600.00
73%, 099.66
1,237,180.79
1,188,990,00
607,000.00
985,250.00
659,950.00
283,415.00
1,391,700,00
757,%50.00
929,330.00
507,336,096,32 1*
10,731,815.%5 $
Federal
Reserve
Bank of
Boston •
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
federal reserve board
s e t t l e m e n t fund
(CONFIDENTIAL)
Aggregate
Aggregate
wi thdrawals
deposits and
Deposits
and transfers
transfers from
to Agent's fund
Agent's fund
1,000,000.00 $
5,671,850.00 $
1, 000, 000, 00$
50,000.00
1,285,600.00
50,000.00
5, 000, 800.00
5,000,800.00
8,73%, 099.66
7, 001,000.00
7,001,000,00
1,237,180,79
% 049,100.00
1,188,990.00
5,049,100.00
%, 607,000. 00
5,000,000.00
5,000,000.00
10,985,250.00
1, 000, 000.00
3,000,000,00
659,950,00
1,001,350.00
283,415.00
1,001,350.00
1,000,000,00
1,000,000,00
1,391,700,00
1,000,800.00
1,000,800,00
757, %50.00
3,002,000.00
4,344,000.00
6,929,330.00
Gold
30,105,050.00
$
%3,731,815.%5 $
Settlements from April 1%, 1922 to April 20, 1922
inclusive.
Net
Debits
*
*
2,989,162.30
2,670,795.17
%,795,%03.81
13,913,366.80
1,313,059.25
I*
Total
Debits
103)958,392.11 *'
387,757,240. %3
101,032,952.28
% , 00%, 533.16
%
201,718,113.75
101,119,712.27
27,874,293.23
70,988,295.98
41,928,249.66
M,502,l#,89
Total
Credits
109,483,550.7% $
%03,802,531.92
129,%99,767.02
110,71%, 072.69
96,237,5%8.%7
%4,786,308.98
187,804,746.95
99,806,653.02
28,996,216.73
72,632,402.87
42.281.637.27
55.712.325.28
25,681,787.33 I* 1,381,757*761.9% I* 1,381,757,761.94 I*
x-33s6
33, %%7,050.00
Balance in
fund at close
of business
Apr. 20, 1922.
30,717,372.45
25,769,069.23
60,409,451.37
7,084,982.32
29,515,310.20
24,536,386,73
11,110,643.29
32,325,689.57
1,121,923.50
1,644,106,89
353,387.61
210^143.39
25,681,787*33 I*
4
21. 1Q?2.
T R A N S F E R S
Debits
9,000,000.00
$
Credits
4,000,000.00
2, 000, 000. 00
2,000,000.00
w
3,000,000.00
1,000,000.00
2,000,000.00
1,000,000.00
$ 12,000,000.00
Net
Credits
5,525,158,63 $
32,775,277.58 $
16,045,291.49
i%2,%58,ao,39
781,775,82
fcril
$ 12,000,000.00
Summary of changes in ownership of gold by banks through
transfers and settlements.
Decrease
989,162.30
670,795.17
%,795,%03.8l
10,913,366,80
2,313,059.25
355,893.11
$
Increase
9,525,1^.63
7,0%5,291.49
781,775.82
1,12I7923.50
353,387.61
l,ao,l%3.39
9 7 , 051,330.87 |$ 20,037,680.44 |$ 20,037,6&£l%
F E D E R A L
oumrnery ot traii s a c t i o n s l o r p e r n D ending April
d
Federal
Balance last
Gold
Reserve
statement
Agent at
Withdrawals
Apr. 13, 1922.
Bost on
$
1 1 0 , 0 0 0 , OCX?
New York
141,389,260
Cleveland
1(5,000,000
10,000,000
5,000,000
$
-
5,000,000
-
-
$
x-33s6a
1 1 n i ii. i^cc.
7
5,000,000
$
B a l a n c e at
c l o s e of
business
Anr. 20. 1922.
Total
Withdrawals
Deposits
10,000,000
$
-
10,000,000
-
8,000,000
5,000,000
8,000, 0 0 0
-
•
Total
-
-
$
110,000,000
371,000,000
144,389,260
-
-
—
-
165,000,000
-
-
-
-
FUND
Deposits
through
transfers
from b a n k
Withdrawals
for
transfers
. to bank
Deposits
$
AGENTS'
JiKTIiJii)
lUUMflJ
19ZZ,
Gold
371,000, OCC
Philadelphia
$
<
R E S E R V E
-
37,795,000
Richmond
37,795,000
Atlanta
77,500,000
2,500,000
1,000,000
-
4,000,000
2,500,000
5,000,000
80,000,000
Chicago
333,644,500
5,000,000
-
-
10,000,000
5,000,000
10,000,000
338,644,500
2,000,000
1,000,000
63,800,000
St. Louie
64,800,000
-
Minneapolis
16,000,000
-
K a n s a s City
39,360,000
-
Dallas
10,000,000
-
-
-
-
San Francisco
Total
190,640,500
$ 1,557,129,260
}$
22,500,000
2,000,000
1,000,000
-
-
1,000,000
|$
|
8,000,000
-
-
-
-
-
|$
3,342,000
-
|$
33,000,000
-
)$
25,842,000
40,360,000
10,000, 000
6,000,000
1,342,000
6,000,000
1,342,000
1,000,000
-
16,000,000
j$
195,298,500
41, 000, 0 0 0
1$ 1 , 5 7 2 , 2 8 7 , 2 6 0
FEDERAL RESERVE BOARD
WASHINGTON
x-3337
April 22, 1922.
SUBJECT:
Expense Main Line, Leased Wire System, March, 1^22.
D e a r Sir:
Enclosed herewith you will find two mimeograph
statements, X - 3 3 8 7 a and X-33S7b, c o v e r i n g in d e t a i l o p e r a t i o n s of t h e m a i n l i n e , L e a s e d W i r e S y s t e m , d u r i n g t h e
m o n t h of M a r c h , 1 $ 2 2 .
P l e a s e credit t h e amount p a y a b l e by y o u r bank in
t h e g e n e r a l a c c o u n t , T r e a s u r e r U . S,, o n y o u r b o o k s , a n d
i s s u e C / D F o r m 1 , N a t i o n a l B a n k s , f o r a c c o u n t of " S a l a r i e s
and Expenses, Federal Reserve Board, Special Fund", Leased
W i r e System, sending duplicate C/D to Federal R e s e r v e B o a r d .
Very truly yours,
(Enclosures)
Fiscal Agent.
TO GOVERNORS OF ALL B A N K S EXCEPT CHICAGO.
x-338?a
REPORT SHOWING CLASSIFICATION AND NUMBER OF WORDS
TRANSMITTED 07£R M a IN LINE O F i'BE FEDERAL RESERVE
LEASED W I R E S Y S T E M F O R T H E M O N T H O F M A R C H , 1 9 2 2 .
P e r c e n t of T r e a s u r y
Total Bank
Dept.
B a n k B u s i n e s s : B u s i n e s s ( *) B u s i n e s s
From
Boston
N e w york
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. L o u i s
Minneapolis
Kansas City
Dallas
San Francisco
32,179
208,355
58,127
80, o76
74,233
77,564
138,134
SS.SSl
46,751
96,976
66,533
152.014
T o t a l F . R,
Banks
1,117, 823
Washington
327,542
2. 5 8
id. 64
5-20
7.16
6.64
6.94
12.36
7-77
4.15
8.6s
5.95
13^62
9,111
14,660
10,831
13,619
11,086
14,465
12,236
14,085
9,229
11,586
7,741
24,, 3 6 7
War
Finance Corp.
Business
195
—
—
395
8,629
5, o o 4
21
-7R-7
i
100
410
907
1,121
i -V
Total
41,485
223,015
68,958
94,090
93,948
97,033
150,441
101,723
56,080
108,972
75,181
177,502
153, 066
196,783
17,539
4,936
1,288,428
529,261
1,445,365
349,849
22,475
1,317,689
P e r c e n t of T o t a l 7 9 - 5 2 #
19.25#
1,23#
Grand Total
100,00
Bank Business
Treasury Business
1 , 4 4 5 , 3 ^ 5 w o r d s or 8 0 . 5 1 %
l4P 84A
"
" 1 A.4A
TOTAL
1,795,214
(*)
100.00#
These percentages used in calculating the
p r o r a t a s h a r e of l e a s e d w i r e e x p e n s e s a s s h o w n
on the accompanying statement (X-3387b).
FEDERAL RESERVE BOARD
W A S H I N G T O N , D„ 0 .
A P R I L 22, 1 9 2 2 .
report of expense
main line
federal reserve leased wire system march, 1922.
N a m e of B a n k
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, L o u i s
Minneapolis
Kansas City
Dallas
San Francisco
Operators1
Salaries
Operators'
Overtime
$
$
250.00
789,98
225.00
524.00
315.00
240.00
(#)5,224.0S
300.00
275.00
316.66
170.00
395.00
.
339.02
-
-
Total
250.00
1,129.00
-
225.00
524.00
315.00
4.00
240.00
5,228.08
«•>
300.00
275.00
316.66
170.00
—
-
395.00
-
$ 742.46
4.805.39
1,340.56
1,845.85
1,711.79
1,739.13
3.186.40
2,003.10
1,077.60
2,237.70
1,533.91
3,506.07
Credits
$
250.00
1,129.00
225.00
524.00
315.00
Payable to
Federal
Reserve
Board
$
492.46
3,676,39
1,115.56
1,321.85
240.00
1,396.79
1,549.13 ,
395.00
1,921.04
1,363.91
3,111.07
5,228.08
300.00
275.00
316,66
170.00
x
2 , 0 4 1 . 6 8 (*)
1,703.10
802.60
$17,527.25
$9,024.72
(#)
(&)
(*)
(a)
$
—
Fed. Res. Board
Total
Wire
Rental
Pro rata
S h a r e of
Total
Expense
x-3387b
$ 343.02
-
$26,894.99 $25,779.96
u)i,u5,q3
$25,779.96
$9,367.7k
$18,453.90
(&)3,c4x,6g
$16,412.22
I n c l u d e s s a l a r i e s of W a s h i n g t o n O p e r a t o r s
Amount reimbursable to Chicago
Credit
B a c i i t f e d $ 1 , 1 1 5 . 0 3 f r o m W a r F i n a n c e C o r p o r a t i o n c o v e r i n g b u s i n e s s f o r m o n t h of F e b r u a r y .
federal reserve board
washington, d. c,
april 22, 1922.
"CREDIT, CURRENCY AND BUSINESS"
Address by
V. P. G. HARDING
GOVERNOR, FEDERAL RESERVE BOARD
before
THE SOUTHERN WHOLESALE DRY GOODS ASSOCIATION
BIRMINGHAM, ALA.
May 10, 1922.
For Release in Afternoon Papers
Wednesday, Hay 10, 1922.
X-333
x-3382
CREDIT, CURRENCY AllD
BUSINESS.
Questions concerning credit and currency are of vital
interest to all classes of the community. ' They concern producers,
distributors and consumers alike.
The entire population is em-
braced in this classification and, indeed, in the last analysis
the single word "consumer11 covers all.
T«'hile tnere are many who
produce more than they consume and who, therefore, naturally view
economic problems from the producer1s standpoint, it follows, nevertheless, that as everybody is a consumer the broadest interest is
that of the consumer.
The distributors are consumers, but are not producers except
in so far as they furnish the means of distribution.
interests are included in the distributor class.
Many varied
All who are en-
gaged in transportation are distributors in a sense and the banks,
the dealers in credit, play a very important part in the process of
distribution, just as they do in aiding production and in facilitat
ing the economic processes of consumption*
The great distributors
of the country, however, in the ordinary acceptation of the term,
are the merchants, both wholesale and retail.
Through them goods
and commodities pass from the primary producer or manufacturer to
the ultimate consumer.
The merchant comes necessarily in close con
tact with the banks, the purveyors of credit, upon which he calls f
accommodation both in making purchases from the producer and in
effecting sales to the consumer, with the railroads and steamship
lines which make the physical transfer of goods from one place to
x-3338
-2-
a n o t h e r ; and h i s a s s o c i a t i o n w i t h t h e c o n s u m e r is n e c e s s a r i l y intimate.
The merchant b u y s in order that he m a y sell, and in ordinary
t i m e s , i n o r d e r t o m e e t c o m p e t i t i o n a n d t o s a t i s f y t h e d e m a n d s of h i s
c u s t o m e r s , h e m u s t s e l l at a c l o s e m a r g i n , d e p e n d i n g u p o n h i s v o l u m e
of b u s i n e s s a n d f r e q u e n t t u r n o v e r f o r h i s p r o f i t .
It i s t o h i s
i n t e r e s t , t h e r e f o r e , t h a t t h e r e s h o u l d b e n o i n t e r r u p t i o n i n a n y of
t h e v a r i o u s p r o c e s s e s i n c i d e n t t o t h e t r a n s f e r of g o o d s f r o m t h e p r o d u c e r t o t h e c o n s u m e r ; n o c o n g e s t i o n of c r e d i t a n d n o s t o p p a g e of
transportation.
The merchant must watch the m a r k e t s closely in order
t o a s s u r e h i m s e l f , a s f a r a s h e c a n , t h a t h e w i l l b e a b l e t o s e l l at
a profit the goods that he buys.
He must keep a watchful eye upon
his operating expenses and upon his credits, in order that he m a y offer
terms t o h i s customers as favorable as t h o s e m a d e by h i s c o m p e t i t o r s
a n d m e e t o b l i g a t i o n s i n c u r r e d i n p u r c n a s e s b y t h e p r o c e e d s of h i s s a l e s .
A n y t h i n g w h i c h i n t e r r u p t s t h e o r d i n a r y f l o w of g o o d s t o t h e i r
ultimate market affects him adversely and his own buying power is
g a u g e d b y t h e p u r c h a s i n g p o w e r of h i s c u s t o m e r s .
Coming, a s he does, in contact w i t h practically all factors in
the c o u n t r y ' s economic life, the m e r c h a n t can sense better, perhaps,
than any one else, that intangible but powerful entity k n o w n as public
o p i n i o n , and h e can, and d o e s , e x e r t a p o t e n t i n f l u e n c e i n m o u l d i n g
that opinion.
I n v i e w of t h e f a c t s t o w h i c h I h a v e a l l u d e d , I f e e l
t h a t it i s a p p r o p r i a t e t o d i s c u s s b e f o r e t h i s a u d i e n c e , c o m p o s e d , a s it
is, of w h o l e s a l e m e r c h a n t s , s o m e of t n e p r o b l e m s r e l a t i n g t o b a n k c r e d i t
a n d c u r r e n c y w i t h w h i c h i t h a s b e e n t h e p a r t i c u l a r p r o v i n c e of t h e
Federal
R e s e r v e B o a r d to d e a l .
f
-3-
x-3388
There is more or less confusion in the minds of some with regard
to the three C's - capital, credit and currency.
While these words are
interrelated, they are by no means synonymous, and an intelligent
differentiation of them is necessary for a proper understanding of our
present financial and economic problems.
Capital is the permanent fund of productive wealth, the accumulation of the products of past labor capable of being used in the
support of present or future labor.
It is that part of the product of
industry which, in the form either of national or of individual wealth,
is available for further production.
More specifically, it is the
wealth employed in carrying on a particular business or undertaking.
It
is the actual estate, whether in money or property7 which is owned or
employed by an individual, firm, or corporation in business and implies
ownership and does not, without qualification, include borrowed money.
Credit is the reputation of solvency and character which entitles
a man to be trusted in buying or borrowing.
The word "credit" is derived
from the Latin word "credo", meaning11! trust or believe,' and while credit
itself is a liability* and not an asset to the man who obtains it, the
ability to get credit is one of the most substantial resources .that an
individual can possibly have, and is one which should be guarded with
the most jealous and watchful care.
One basis of credit is capital;
but character - that is, good reputation as to veracity, integrity and
ability - is also a basis of credit without which the capital foundation
would count for little.
The processes of production and distribution
are profoundly affected by credit conditions.
on credit.
Modern business is done
One of its life-giving principles is credit.
The mood and
-4-
x-33ss
temper of a business community are deeply affected by the state of
credit.
The ultimate test of the functioning of a credit system is
found in what it does to promote the production and distribution of
goods.
Business rests upon its surest foundation whenever there is
a proper balance between the volume of credit and the volume of concrete
things which credit helps to produce and which are the normal basis of
credit.
Abuse of credit means shod: and disturbance, and gross and
continued abuse spells disaster.
Currency may be defined briefly as that which is current as a
medium of exchange, that is, which is in general use as money or as
a representative of value.
It may be gold, silver or engraved slips
of paper, which do not require endorsement but can pass readily from
hand to hand.
By common consent of all civilized nations, based upon
the sentiment and traditions of ages, gold is the recognized measure of
value and medium of exchange, and is the basis of international settlements.
Its purchasing power is, of course, not uniform with respect to
all commodities and varies from time to time according to the supply of
and demand for the various things for "7hich gold is exchanged, but it
is the universal standard, economically, even where it is not legally.
In this country, settlements growing out of business transactions
are made for the greater part by checks drawn upon banks, which are
negotiable by endorsement.
Bank checks, therefore, form an important
part of our circulating medium, although in regular course they are
outstanding for limited periods of time, soon finding their way into
the drawee banks for payment.
The total amount of checks drawn by
^
X-33ss
firms and individuals upcn their bank accounts during the course of
any single week of the year far exceeds the total volume of all forms of
money in circulation.
The greater part of the money in actual circulation is in the
form of paper currency, such as Federal Reserve notes, national bank notes,
United States Treasury notes, and United States gold and silver certificates.
These forms of currency circulate on a parity with gold for the
reason that they are redeemable in gold on demand, with the exception of
national bank notes which are redeemable in lawful money, and silver
certificates which by their terms are redeemable in silver dollars, but
they in turn are protected by the obligation and ability of the Government
to maintain them at a parity with gold.
The older generation of business men can remember the years
following the Civil War, when the currency in circulation was composed of national bank notes and Treasury notes, known as greenbacks,
which were not redeemed in gold.
Consequently, gold coin ceased to
be a medium of circulation and became an
article of commerce, it's
value in terms of paper money fluctuating from day to day and prices
and wages were expressed in terms of this irredeemable paper, just as
is the case in Continental Europe and to some extent even in England today.
Merchants in those days who bought goods abroad paid for them
on the basis of geld and resold them in terms of paper currency which had
a fluctuating value in terms of gold.
Since the first o f January, 1S79<>'
the United States has been on a gold basis and the purchasing power of
a paper dollar has been at all times the same as that of a gold dollar.
x-3388
- 6 —
T h e r e h a v e b e e n t i m e s , h o w e v e r , w h e n t h e s u s p e n s i o n of g o l d p a y m e n t s
and. a r e t u r n t o a f l u c t u a t i n g p a p e r c u r r e n c y s e e m e d i m m i n e n t , b u t t h e s e
crises have always been passed successfully and today all currency
of the U n i t e d S t a t e s is r e d e e m e d in g o l d w i t h o u t q u e s t i o n a n d is o n
a p a r i t y w i t h g o l d b o t h at h o m e a n d a b r o a d .
There has always
.existed, h o w e v e r , in this c o u n t r y some l a t e n t
s e n t i m e n t ill f a v o r o f a p a p e r c u r r e n c y b a s e d n o t u p o n g o l d b u t u p o n
t h e f a i t h a n d c r e d i t of t h e G o v e r n m e n t .
This Sentiment in favor of
fiat money, that is, paper currency issued b y the Government as such
b u t n o t b a s e d o n c o i n o r b u l l i o n a n d c o n t a i n i n g n o p r o m i s e to p a y i n
coin, has a l w a y s b e c o m e more i n t e n s i f i e d in the p e r i o d s of r e a c t i o n
and depression w h i c h have followed those of extreme activity and
prosperity.
B e f o r e the p a n i c of 1873 there w a s m u c h a g i t a t i o n for
paper money.
L a t e r on, h o w e v e r , the soft m o n e y a d t o c a t e s w e r e divided;
some f a v o r e d a repeal of the R e s u m p t i o n Act and the issue of m o r e
T r e a s u r y n o t e s , or g r e e n b a c k s , w h i l e others c l a m o r e d for the free
and u n l i m i t e d coinage of silver d o l l a r s .
The
greenback idea was
d e f e a t e d , but in 1 8 7 8 the c o m p u l s o r y coinage of a l i m i t e d a m o u n t of
silver d o l l a r s b e g a n a n d continued u n t i l shortly a f t e r the p a n i c of
1893Following that panic, soft m o n e y advocates u n i t e d
s u b s t a n t i a l l y in f a v o r of the free a n d u n l i m i t e d c o i n a g e of s i l v e r
at the r a t i o of l6 to 1, a l t h o u g h there w a s some s e n t i m e n t in f a v o r
of state b a n k n o t e s in a d d i t i o n .
In due time the economic
forces of the c o u n t r y asserted themselves, and there was
:
-7-
x-3388
gradual and continued improvement in commerce and industry.
In the
course of a few years the free silver doctrine ceased to be an issue.
It was realized, however, even during the good times which
preceded the panic of 1907, that there were grave defects in the
banking and currency system of the country.
There were more than
25/000 banks in the United States, each standing virtually alone.
In
accordance with the requirements of law and in order to be able to
pay their depositors, all banks kept certain amounts of gold and
currency cn hand and most of them maintained credit balances with other
banks in the larger cities, these balances being in most cases part
of their required reserves.
Inordinary circumstances, the funds on
deposit with the city banks could be withdrawn in currency by the
country banks whenever they desired, but when business and credit
conditions were disturbed, and a spirit of mistrust and suspicion
pervaded the country, many banks would seek to increase the amount
of actual cash on hand in order to reassure depositors who might
otherwise wish to withdraw their money.
It was ir: those times that the large city banks were least able
to supply the currency, for the available supply was limited and there
was no quick way of increasing it.
A large part of the circulating
medium in those days consisted of national bank notes wnich were secured by Government bonds*
Under the law no national bank notes
could be issued by any bank in an amount in excess of its own capital
stock and as many national banks had already issued their maximum
quota in order to realize the small profit obtainable thereby^ while
o t h e r s f o u n d it i m p r a c t i c a b l e t o a c q u i r e t h e b o n d s w h i c h w e r e
n e c e s s a r y t o s e c u r e a d d i t i o n a l c i r c u l a t i o n , it w a s i m p o s s i b l e t o
i n c r e a s e t h e s u p p l y of n a t i o n a l b a n k n o t e s r a p i d l y o r t o a n y
great extent.
Our i n f l e x i b l e currency system had m u c h to do w i t h the
m o n e y p a n i c of I 9 O 7 .
F e a r i n g t r o u b l e , m a n y of t h e 2 5 , 0 0 0 b a n k s
s o u g h t , e a c h for i t s o w n p r o t e c t i o n , t o w i t h d r a w s u c h c u r r e n c y
a s it c o u l d f r o m o t h e r b a n k s a n d p a y out a s l i t t l e a s p o s s i b l e
to d e p o s i t o r s .
Emergency measures could.not be resorted to in
a d v a n c e of a c t u a l p a n i c , f o r t h e y w o u l d , i n t h e m s e l v e s , h a v e p r o duced a panic, and while steps were taken finally to conserve
t h e c a s h r e s o u r c e s of t h e b a n k s t h e y c a m e t o o l a t e t o p r e v e n t
t r o u b l e a n d t h e e x i s t i n g b a n k i n g m a c h i n e r y f e l l p.part i n t o
t h o u s a n d s of s e p a r a t e u n i t s .
Each.bank w a s obliged to rely
largely u p o n its own cash resources, because, however^ willing,
o t h e r b a n k s f e l t t h a t t h e y c o u l d n o t s u r r e n d e r m u c h of t h e i r o w n
c a s h , f o r b y d o i n g so t h e y m i g h t i m p a i r t h e i r a b i l i t y t o m e e t
t h e p o s s i b l e d e m a n d s of t h e i r o w n c u s t o m e r s .
Thus each bank, in
seeking to protect itself, weakened the banking structure as a
whole.
The d e f e n s e s w e r e weakest w h e n the danger w a s greatest.
- 3
-
x-3388
The panic of 1907 convinced the country that something must be
done to prevent similar occurrences in the future. In the following year
Congress created a Monetary Commission which after a long and thorough
study of the hanking systems of the world submitted an elaborate report,
and a draft of a new banking and currency bill.
During the year 1912
a committee of the House of Representatives investigated banking methods
in this country and in its report pointed out the fundamental defects
in the system then existing.
Early in the year 1913 Congress took
up the matter of banking reform in earnest and the Federal Reserve Act
was put upon the statute books before the close of that year.
There has been no money panic in this country since the Federal
Reserve Act became a law.
This statement, in itself, has no particular
significance, for less than nine years have elapsed since the passage
of the Act, and there have frequently been periods of more than nine
years when the banks of the country have been able at all times to
supply the currency demanded of them.
But when we consider the events
which have taken place during the past nine years and what has been
accomplished and prevented by reason of the operation of the Federal
Reserve System, the conclusion is inescapable that the enactment of the
Federal Reserve law was a most conspicuous example of valuable constructive legislation.
The Federal Reserve Banks were*not opened for business until nearly
a year after the passage of the Federal Reserve Act and consequently the
Federal Reserve System could do nothing to mitigate the shock which the
banking, commercial and industrial interests of the country experienced
when the great European War broke out unexpectedly in August, 1914.
-10-
X-33S8
The F e d e r a l Reserve Act, however, continued in effect u n t i l June JO, 1915
t h e p r o v i s i o n s o f t h e A l d r i c h - V r e e l a n d A c t o f i9os, w h i c h w o u l d o t h e r w i s e
have expired by limitation on June 30, I91U.
U n d e r t h i s l a w it w a s
p o s s i b l e f o r n a t i o n a l b a n k s , "fcy f o r m i n g t h e m s e l v e s i n t o a s s o c i a t i o n s , t o
issue national bank notes, on approved collateral other than United
S t a t e s b o n d s , s u c h n o t e s b e i n g s u b j e c t to a t a x at t h e r a t e of 3 p e r
cent p e r a n n u m u p o n the average amount in circulation for the first
three months, w i t h a graduated increase of one-half of 1 per cent per
annum for each month thereafter until a maximum rate of 6 per cent per
annum was reached.
U n d e r the p r o v i s i o n s of this Act, a s extended, the
n a t i o n a l b a n k s of t h e c o u n t r y w e r e a b l e to p r o v i d e f o r t h e m s e l v e s a n d
for their state b a n k neighbors sufficient currency to meet the demands
of business and of nervous depositors, without resorting to the suspension
or r e s t r i c t i o n of c a s h p a y m e n t s , w h i c h e x p e d i e n t s w e r e e m p l o y e d d u r i n g
former crises.
A f t e r t h e F e d e r a l R e s e r v e B a n k s b e g a n b u s i n e s s i n N o v e m b e r , 191*+,
and u p to the entrance of our o w n country into the V a i n A p r i l , 1917,
?r
the stabilizing influence of the new system w a s so great that events
which otherwise would have been most disturbing produced not the slightest
tremor in b a n k i n g circles.
Let u s n o w contrast the effect u p o n our p r e s e n t b a n k i n g system of
our participation in the greatest war of all history w i t h the effect u p o n
our earlier banking structure of the Civil Tar.
It i s t r u e t h a t
the country h a d increased greatly both in population a n d w e a l t h b e t w e e n t h e y e a r s 1861 a n d 1917, b u t w a r s i n t h e ' 6 0 s w e r e c o n d u c t e d o n
•£7
e
X I •"
a far smaller and l e s s expensive scale than now.
X-.33SS
President Lincoln !s
f i r s t c a l l f o r t r o o p s w a s f o r 7 5 * 0 0 0 m e n a n d i n n o b a t t l e of t h e C i v i l
War w e r e more than this number actively engaged on a side.
One m o d e r n
b a t t l e s h i p r e p r e s e n t s a greater cost t h a n the e n t i r e United S t a t e s N a v y
i n t h e C i v i l t<ar, a n d a e r i a l w a r f a r e w a s , of c o u r s e , u n d r e a m e d of s i ^ t y
years ago.
-
frith t h e i m m i n e n c e of t h e C i v i l W a r , t h e b a n k s g e n e r a l l y s u s p e n d e d s p e c i e p a y m e n t s a n d a f t e r a b r i e f p e r i o d of r e s u m p t i o n l a t e r o n
"were f o r c e d t o s u s p e n d t h e m a g a i n f o r m a n y y e a r s .
Both the United Stetes
a n d C o n f e d e r a t e G o v e r n m e n t s w e r e o b l i g e d t o r e s o r t t o t h e i s s u e of p a p e r
money.
T h e g o l d v a l u e of U n i t e d S t a t e s c u r r e n c y d e c l i n e d a t o n e t i m e t o
a b o u t 4 0 p e r - c e n t of p a r , w h i l e C o n f e d e r a t e c u r r e n c y , c o n s t a n t l y d e p r e c i ating, had its further decline accelerated w i t h e a c h successive new issue
u n t i l t o w a r d t h e c l o s e of t h e s t r u g g l e i t s p u r c h a s i n g p o w e r w a s h a r d l y
a s g r e a t a s t h a t of s o m e of t h e E u r o p e a n c u r r e n c i e s of today-,.
D u r i n g t h e y e a r s 1 9 1 7 and I 9 I 8 t h e U n i t e d S t a t e s h a d u n d e r a r m s
at o n e t i m e a s m a n y a s 4, C O O , 0 0 0 m e n , e x c l u s i v e of i t s v a s t n a v a l
establishment.
T h e r e w e r e f l o a t e d betv.een J u n e , 1 9 1 7 a n d O c t o b e r ,
1 9 1 8 f o u r i s s u e s of L i b e r t y B o n d s , a g g r e g a t i n g i n a l l $ 1 6 , 9 7 8 , 0 0 0 , 0 0 0 ,
and d u r i n g t h e s e t w o y e a r s the F e d e r a l G o v e r n m e n t c o l l e c t e d $ 5 , 4 2 5 , 0 0 0 , 0 0 0
in taxes.
Notwithstanding these vast financial operations, there w a s
n o m o n e y p a n i c , n o r at a n y t i m e a n y s e r i o u s c r e d i t d i s t u r b a n c e .
The
v o l u m e of F e d e r a l R e s e r v e n o t e s i n c i r c u l a t i o n , w h i c h s t o o d at $ 3 7 & , C O O
at t h e b e g i n n i n g of t h e W a r , a m o u n t e d t o $ 2 , 5 5 3 , 1 9 ^ , 0 0 0 at i t s c l o s e ,
b u t t h e g o l d p a r i t y of t h e s e n o t e s a n d a l l o t h e r f o r m s of c u r r e n c y w a s
- 12 -
'
x-33ss
maintained and there was never a time when the purchasing power of
a $20 Federal Reserve note was not the same as that of a $20 gold
piece.
The maximum amount of Treasury notes, or greenbacks, outstanding
at any time during the Civil War was $44'9,33
9^2, and the purchasing
power of these notes at one time was. little more than one-third of a
corresponding face amount of gold.
The crucial test, however, of the Federal Reserve System came after
the end of the frorld" War.
It was realized that the signing of the Armistice which ended
the war from a military standpoint did not end it in a financial
sense and during the early months of the year 1J19 &there was a lull
and much hesitation in business.
The successful flotation, however,
of the Victory Loan in May of that year was regarded as the end of
the war in a financial sense and a period of great activity set in.
It was evident that four years of war had greatly impaired tne
productive capacity of Europe and had greatly reduced stocks of goods
and supplies of all kinds.
There was a general impression that theie
was a world-wide shortage of goods and that Europe in replenishing h^r
supplies must continue to draw heavily upon the productive capacity of
the United States, just as had been the case ever since the year 19^5This impression was deeply engrafted upon the minds of the public and
for a time European needs were so urgent that they had to be supplied
at any sacrifice.
At the same time a substantial part of the sum
which during the war the United States had agreed to advance to foreign
- 13 -
X-3388
n a t i o n s w a s still u n e x p e n d e d and these f u n d s were used d u r i n g the y e a r
1 9 1 9 i n p a y m e n t of g o o d s e x p o r t e d t o E u r o p e .
M a n y shrewd business m e n looked forward confidently to several
y e a r s of c o m m e r c i a l a n d i n d u s t r i a l a c t i v i t y a n d m a d e t h e i r p l a n s u p o n
t h e a s s u m p t i o n t h a t p r i c e s w o u l d e i t h e r a d v a n c e or r e m a i n s t a b l e a n d
that a r e t u r n to the p r e - w a r level or a serious d e c l i n e in the immediate
future was most improbable.
Farmers incurred obligations for addition-
al l a n d a t a v a l u a t i o n b a s e d u p o n t h e c o m m o d i t y p r i c e s t h e n e x i s t i n g ,
merchants extended their business and manufacturers prepared to increase
their productive capacity by making additions to their plants, regardl e s s of t h e f a c t t h a t s u c h a d d i t i o n s c o u l d be m a d e o n l y a t c o s t s m u c h
higher than normal T h e p r e v a i l i n g o p i n i o n w a s t h a t w e h a d e n t e r e d i n t o a n e r a of
high p r i c e s and that there would be for some time a serious shortage
of g o o d s .
M a n y jobbers called in t h e i r s a l e s m e n and w e r e obliged
to scale d o w n the orders w h i c h p o u r e d in by every m a i l .
Prices
advanced w e e k by week and many p r o d u c e r s and m e r c h a n t s were reluctant
t o sell, for a d v a n c i n g p r i c e s w e r e a c c o m p a n i e d by h i g h e r w a g e s and
greater p r o d u c t i o n costs.
C r e d i t w a s f r e e l y u s e d , not o n l y i n p r o d u c t i o n at h i g h c o s t , b u t
in w i t h h o l d i n g g o o d s from the market, and i n v e n t o r i e s and bank statements everywhere showed an expanded condition which would have been
regarded as u n t h i n k a b l e a few y e a r s before.
It i s n o t d i f f i c u l t n o w t o p o i n t o u t t h e e s s e n t i a l f a l l a c y i n
t h e p o s i t i o n w h i c h w a s t a k e n a n d to e x p l a i n t h e l o g i c a l a n d i n e v i t a b l e
-14-
x-33ss
reaction which took place, a reaction, however, which many did not foresee
until too late.
requirements.
The error lay in the incorrect estimate of consumptive
We can see now that instead of there being a shortage,
there was in fact a fictitious demand, if not in some industries an oversupply.
A grave mistake was made by manufacturers, merchants and farmers
in basing their plans upon the normal relationship between production
and consumption at a time when conditions were anything but normal. There
was, indeed, no question as to the need of Europe for American goods and
supplies, and estimates as to American consumption, perhaps justified
potentially, did not take sufficiently into account the effect of extremely high prices upon the volume of consumption.
A continued demand
for goods depends in the long run upon the buying power of the consumer.
V?hat one can not get at all, he must do without, and when he cannot
obtain all that he needs he mast be satisfied with a part.
need for goods, however
The mere
urgent, does not create an economic demand.
There must be an ability on the part of those needing goods to satisfy
the need, by exchanging other goods, by rendering service, by pacing
cash or by tendering some acceptable form of credit obligation.
Millions of people
in some of the European countries were obliged
to deny themselves a part of their accustomed food supply, to forego
purchases of clothing and other things which ordinarily would be regarded
as absolutely necessary.
Luxuries were impossible and in mapy cases
articles so classed were sacrificed in order to
provide the irreducible
minimum of the necessities of life.
The effect of high prices in this country was reflected finally
in reduced .consumption and in the latter part of March, 1920 those who
-15-
x-3338
had dreams of a long continuance of the conditions which had existed up
to that time were rudely awakened by the collapse of the silk market in
Japan.
By this time public opinion began to undergo a change and public
opinion is a powerful force, more potent than banking boards, or legislative bodies.
The curtailment of buying became more and more noticeable.
What has since been referred to as the "buyers1 strike" manifested itself
everywhere throughout the United States and in other countries as well;
and in quick succession the drastic reactions in commodity prices began to
take place•
Many who had been anxious to buy cancelled orders and withdrew
from the market, while others who had been reluctant to sell became
nervously eager to dispose of their goods,
Banks began to find that loans which they had regarded as being
collectible at any time desired could not be repaid in the altered circumstances and must be carried along.
Recourse was had in increasing degree
to the Federal Reserve System which responded to all legitimate demands
and which should be credited with preventing the commercial crisis which
followed from developing, as would otherwise have been inevitable, into
a most disastrous money panic.
During the year 1920, when these drastic changes in price levels
were taking place, the total earning assets of the Federal Reserve Banks,
which include rediscounts for member banks, increased from $3,039*000,000
at the end of January to $3,39^,000,000 at the end of October,
At the
same time there was not only no contraction in Federal Reserve note currency, but on the contrary there was an almost continuous expansion in
the volume of Federal Reserve notes in circulation, the amount increasing
from $2,8%%,000,000 on January 23rd to $3,^,000,000 on December 23, 1920,
- 16 -
x~3)gg
a record high mark.
These figures should be impressed upon the minis of the public,
for the
unwarranted statement is often made that the Federal
Reserve authorities deliberately set out to bring about deflation and to
accomplish this purpose caused sherp curtailment of credit and drastic
contraction of the currency.
The Federal Reserve Banks are required by law to maintain certain
specified reserves against their deposit and note liabilities. Provision
is made for the suspension of reserve- requirements, under certain penalties,
and the law authorizes the Federal Reserve Boari to permit or require
one Federal Reserve Bank to rediscount paper for anotner, in order
that a part of the cash resources of a bank having excess reserves may
be diverted temporarily to another bank which otherwise would be defficient in reserve..
The Federal Reserve Board is also empowered by
law to reject in part or altogether any application made by a Federal
Reserve Bank for Federal Reserve notes, and it is permitted at its
discretion to impose an interest charge on that part of the Federal
Reserve note circulation which is not specifically covered by gold,
but such a charge was never
imposed.
At one time during the fall of 1920, when the strain was greatest,
one Federal Reserve Bank was neither Borrowing from nor lending to
other Federal Reserve Banks, and three Federal Reserve Brinks were
lending large amounts to the remaining eight Federal Reserve Banks.
Interbank rediscounting was a continuous process all during the year 1%20
and during part of the year 1^21,
- 17 -
X-33S8
Interbank rediscounts reached their peak late in October 1920, when they
amounted to $267,000,000.
In the autumn of 1920 the total accom-
modation extended by all Federal Reserve Banks to their member banks
aggregated approximately $2,750,000,000, as compared with a total of
$59,000,000 of rediscounts and bills payable for all national banks in
the United States in the autumn of 1907, just before the panic of that year.
Had the Federal Reserve Board desired to curtail credits and contract the currency, it could have done so most effectively by the
exercise of its legal authority to refuse to permit one Federal Reserve
Bank to rediscount for another, and to decline applications for Federal
Reserve notes.
But the Board arranged promptly all rediscounts asked
for, and approved immediately all requests for Federal Reserve notes.
The events of the past two years have shown that there is often
no clear and immediate relationship between commodity prices and the
volxyne of credit and cnrre"cy«
According to the quantitative theory
of money, broadly speaking, as the supply of money increases its value
decreases and consequently the value of the things for which money is
exchanged increases.
But it is obvious that this is subject to very
definite limitations and involves other factors, such as the volume of
trade and production, the rapidity of turnover or velocity of exchanges,
and likewise public confidence.
Loss of confidence may often lead to
heavy hoarding, and what have recently come to be known as "frozen loans"
slow up greatly the turnover of credit.
Both may result in an actual
contraction, although there is no apparent change in the nominal amounts
outstanding.
During the years 1915 and 1916, when there was an influx of gold
- 18 -
x&3338
into this country of more than one billion dollars, in payment of purchases
of American goods by the warring nations of Europe, prices and wages
advanced sharply *
On the one hand, there was an increase in our basic
stock of money and on the other, no corresponding increase in the volume
of goods available for domestic consumption; an advance in prices and
wages was a natural consequence. Had it been possible
to increase the
VvOlume of goods and commodities as rapidly as the volume of gold increased,
the advance in prices would certainly have been less pronounced#
Then again, when specie payments are suspended and a country undertakes to meet the enlarged requirements of its government and its commerce
by increasing its issues of irredeemable paper currency, prices and wages
naturally advance.
It should be remembered that the issue of irredeemable
paper currency, while sometimes unavoidable in times of war, is merely a foreed popular loan and that one issue tends to bring on another, each successive
step adding to the depreciation,
Germany by turning loose a flood of paper
money has reduced its value more rapidly than she has added to the .
quantity *
The German mark, whose normal value was about 4 marks to
the dollar, has now depreciated to a point where one dollar of American
money will purchase about 350 marks.
Russia has carried its currency
inflation to such extremes that she has practically destroyed the value
of her paper money altogether.
Normally a dollar would buy about 2
rubles, while now one dollar will purchase about 4,000,000 rubles.
Gresham1s Law lays down the principle that a superior and inferior
currency cannot circulate together, that the inferior drives the superior
out of circulation and into hiding.
The depreciation of currency in some
- 19 -
x-33ss
European countries has gone so far as to make it very difficult and inconvenient to transact business through the medium of these currencies, the
physical volume of an amount sufficient for ordinary retail transactions
being so great as to make it impossible to carry it around on one's person.
Then again as the depreciation is continuous and constant, traders are unwilling to accept paper money unless they can exchange it immediately for
something else.
Consequently in those European countries where the currency
is most greatly depreciated, direct exchanges of goods for goods are made;
and in some places gold is being brought out of hiding and is performing once
more, in a limited way, its accustomed function as a medium of exchange. Thus
it is apparent that when a currency has depreciated to the vanishing point,
Gresham's Law no longer holds good.
It is not the function of the Federal Reserve System nor of any
banking system to attempt to fix or control prices; and the Federal Reserve
discount rates have never been established with that idea in view.
As a
matter of fact, they have always been lower than current rates given by
member banks to their customers, and due to peculiar circumstances have in
fact followed rather than led the rise and fall of current rates.
Banks
are chiefly concerned with prices only in so far as the security of their
loans may be involved, and they are interested more in the stability of
prices and their margin of collateral than in the general price level itself.
Banks do not create general conditions but they mast adjust themselves to
changing conditions, which, in recent eventful years, have been brought
about by unseen and irresistible forces throughout the world.
Federal Reserve notes have never been issued or redeemed with a
- 20 v i e w to affecting prices.
X-33SS
They are in fact but a very small element
in the volume of credit through w h i c h the vast exchanges of the n a t i o n
are made.
Increases or decreases in the volume of Federal Reserve notes
in c i r c u l a t i o n a c c o m p a n y a d v a n c i n g or d e c l i n i n g b u s i n e s s a c t i v i t y , p r i c e s
and wages.
A n i n c r e a s e or d e c r e a s e in the v o l u m e of F e d e r a l R e s e r v e
n o t e s o u t s t a n d i n g is n o t the r e s u l t of a n y p r e o r d a i n e d p o l i c y or p r e m e d i t a t e d design, for the volume of such notes in c i r c u l a t i o n depends
entirely u p o n the a c t i v i t y of b u s i n e s s , or u p o n the k i n d of a c t i v i t y w h i c h
calls for currency rather than b o o k credits.
• F e d e r a l Reserve notes can b e issued only against collateral in a n
a m o u n t e q u a l to the s u m of the F e d e r a l R e s e r v e n o t e s a p p l i e d for, w h i c h
c o l l a t e r a l s e c u r i t y m u s t b e n o t e s a n d b i l l s d i s c o u n t e d or a c q u i r e d b y the
banks or gold or gold certificates.
The law requires each Federal Reserve
B a n k to m a i n t a i n a r e s e r v e of 4 0 p e r cent i n g o l d a g a i n s t its F e d e r a l
Reserve notes in actual circulation.
T h e F e d e r a l R e s e r v e B a n k s d o n o t m a k e l o a n s d i r e c t to t h e p u b l i c .
They can rediscount only eligible paper bearing the endorsement of a member
bank which paper represents loans made by such member banks to their
customers.
Federal Reserve Banks have nothing to say to member banks
about what loans they shall make to their customers.
In ordinary times
member banks make such loans out of their own resources and do not call
upon the Federal Reserve Banks for accomodation except for seasonal requirements or in emergencies.
During the peak of the credit strain the
maximum rediscounts and bills payable of member banks with the Federal Reserve Banks did not exceed 14 per cent of their total loans and discounts.
- 21 -
x-33ss
It follows, therefore, that the volume of rediscounted paper carried " y
b
Federal Reserve Banks fluctuates far more sharply up and down than the
total of loans and discounts of the member banks.
As the credit strain
relaxes, customers reduce their loans with the bank with which they deal,
and that bank naturally reduces its line of rediscounts at the Federal Reserve Bank, and thus as the credit strain relaxed during the year 1921, the
loans of the Federal Reserve Banks to their member banks decreased in the
natural and orderly course of business about $1,500',000,000.
Furthermore,
concurrently with the payment of the paper discounted with Federal Reserve
Banks Federal Reserve note currency has come back to the Reserve Banks and
in the absence of
a
demand for it, has not been reissued.
7,lien the demand
for Federal Reserve notes falls off the banks which hold them send them
to the Reserve Banks for credit, and there necessarily results an automatic
increase in the percentage of gold reserve
available for their redemption.
Federal Reserve notes are not legal tender, nor do they count as reserve
money for member banks.
They are issued only as the need for them develops
and as they become redundant in any locality they are returned for credit
or for redemption to the Federal Reserve Banks or to the Treasury at Washington.
Thus, there cannot be at any time more Federal Reserve notes in cir-
culation than the needs of the country at the prevailing level of prices
and wages require, and as the demand abates the volume of notes outstanding
will be ..correspondingly reduced through redemption.
Federal Reserve notes
being but a small element in the total volume of
credit, and the bulk of our business being carried on by checks drawn
against bank deposits, the really important thing is the total volume of
-22-
X-33SS
bank credit and whe tiler this can increase or decrease autom&tically
according to the needs of business and agriculture.
Under the Federal
Reserve System, as business expands, as labor is more fully employed and
as production increases and distribution becomes more active, there
follows a demand for greater discount accommodations and a need for more
currency, and the increased volume of discounts furnishes a means of providing the increased volume of currency required.
While the general level of prices and the total volume of credit that is deposits and currency - correspond roughly in their movements,
prices of individual commodities often fluctuate in directions opposite
to the general movement.
For example, last September there was a sudden
and marked advance in the price of cotton.
This advance was not due to
any increase in the loans of Federal Reserve Banks nor to any expansion of
the currency.
In fd-ct, the amount of Federal Reserve notes in circulation
on September 15th, when cotton was selling at about 21 cents a pound, was
about
$500,000,000 less than when cotton was selling at 11 cents a pound
in the Spring,
The advance in the price of cotton was due to economic
causes and to the operation of the law of supply and demand.
After the
report of the Department of Agriculture, early in September, the world
awakened to the fact that the cotton crop wa.s abnormally small, and it was
thought at one time that less than seven million bales would be produced.
As the ginners' reports were made, it became evident that the Department of
Agriculture had under-estimated the size of the cotton crop and the price
declined four or five cents a pound.
This decline took place notwithstanding the reduction which was made
about the same time in the discount rates of all Federal Reserve Banks, in-
• e l u d i n g those in the South.
-23*
x-3388
T h e f a c t should, b e e m p h a s i z e d t h a t t h e n e t
advances w h i c h have taken place in recent m o n t h s in the p r i c e of cotton
and other a g r i c u l t u r a l p r o d u c t s h a v e b e e n due, not to credit or currency
e x p a n s i o n b u t , to s m a l l e r s u p p l i e s a n d to i n c r e a s e d d e m a n d s f o r c o n s u m p t i o n .
Fcr reasons already explained there has been a steady and practically
continuous decrease in the volume of Federal Reserve notes in circulation
since the latter part of December, 1920, reflecting general conditions.
As I have said, most of the business of the country is carried on through
the medium of bank checks, and the volume of currency in use depends
largely upon the activity of the industries and retail trade.
Notwith-
standing the smaller volume of Federal Reserve notes in circulation, bank
deposits now show a tendency to increase.
On March 10, 1922, the deposits
of all national banks in the United States aggregated $15)39^,^38,000 as
compared with $lU,560,852,000 on September 6, 1921.
Prices of farm products, the things which the farmer has to sell,
declined more rapidly than the price of merchandise and various things
which the farmer has to buy.
The result was a curtailment in farmers'
purchases which soon had a serious effect upon commerce and industry.
For several months past, however, prices of-farm products have shown an
upward tendency, while retail prices of goods have declined.
Prices of some commodities, as furnished by the Bureau of
Markets of the Department of Agriculture, on April 1 5 ,
1 9 2 2 , were as follows:
1 9 2 1 and April 15,
-24-
X-33SS
Quotation
Commodity
Market
Description
Cotton
Corn
Wheat
Oats
Hogs
New Orleans
Chicago
Minneapolis
Chicago
Chicago
Middling
No. 2 mixed
Spring No. 2
No. 2 white
Average p r i c e
April 15
1921
.lit
-531
1,45
*37
8.50
*
*
*
A p r i l 15
1922
•!%
^'57^
-3%
10.15
Interest rates have declined in all sections of the country.
The
4% per cent Liberty Bonds have advanced from a n average price on A p r i l
15, 1 9 2 1 o f a b o u t $ 5 8 . 4 8 to w i t h i n a f r a c t i o n o f p a r at t h e p r e s e n t time.
Twenty-five representative railroad stocks advanced from an average of
$51.70 on April 15,
1 9 2 1 to $ 6 2 . 2 5 o n April 1 5 , 1922, twenty-five in-
d u s t r i a l s f r o m $ 8 4 . 1 0 to $ 9 6 . 1 9 ,
f r o m $ 6 7 . 9 0 to $ 7 9 . 2 2 ,
fifty railroad and industrial stocks
and forty listed bonds advanced from an average
of $ 6 9 . 8 9 o n A p r i l 15, 1 9 2 1 to $ 7 9 - 9 7 on A p r i l 15, 1 9 2 2 .
T h e s i t u a t i o n t o d a y i n * m a n y r e s p e c t s is e x a c t l y t h e r e v e r s e o f
that w h i c h e x i s t e d at the e n d of the y e a r 1919*
Surplus goods of all
kinds h a v e gone into consumption and statements cf m e r c h a n t s throughout
the country show a m a r k e d reduction in the v o l u m e of g o o d s on their
shelves.
The fact that a revival in a g r i c u l t u r e h a s come m u c h sooner
t h a n h a d b e e n e x p e c t e d b y those who r e g a r d e d the l o w p r i c e s of last
s u m m e r a s p e r m a n e n t h a s b r o u g h t n e w h o p e a n d c o u r a g e to t h e a g r i c u l t u r a l
d i s t r i c t s a n d a f f o r d s a b a s i s for the b e l i e f that there will, in due time,
be a distinct business improvement in those districts.
v h i l s t h e s i t u a t i o n a b r o a d is s t i l l c o m p l i c a t e d a n d w i l l d o u b t l e s s
c o n t i n u e so f o r m a n y y e a r s , t h e r e a r e m a n y i n d i c a t i o n s o f i m p r o v e m e n t . T h e
exchanges o f some of the l e a d i n g E u r o p e a n c o u n t r i e s h a v e b e c o m e far m o r e
stable during the past twelve months and the pound sterling in particular
has made a distinct a d v a n c e toward its n o r m a l parity, the present q u o t a t i o n
b e i n g about $ 4 . 4 4 a s c o m p a r e d w i t h $ 3 » 9 2 o n A p r i l 15, 1921.
(*) Quotations for April 1 3 ,
1922.
*-25*
x-33s&
American tourists are flocking to Europe this summer in large
numbers and the sums they expend abroad will add to the ability of
the foreigners to "buy American goods•
The past seven years have "been full of momentous and stirring
events and rrerchants have had their trials and their burdens to bear
as well as all other classes.
The world-wide reaction which followed
the abnormal activities of the early post-war period had a serious
effect upon the business of wholesale merchants, but it is gratifying
to knew how well they have stood up under the strain, and in view of
the evidences of improvement which are now apparent in all sections
of the country it 33ems to me that the time Has come when the enterprising business man may well let others indulge in lamentations and
recriminations over the past and devote his energies to working out
the problems of today and preparing for the business of tor or row.
Remember that this country of ours has never failed to demonstrate
its tremendous recuperative power and that the processes of production,
distribution and consumption will be continuous as long as humanity
endures.
Let the merchants exercise their function as distributors *
If business is dull, send out your traveling men; use printers ink advertise liberally but judiciously, and the business that you thus
create for yourselves will stimulate production and by reducing the
number of unemployed will add to the purchasing power of your custo
In the words of Edward Everett Hale, let us
"Look
Lock
Look
Lend
up and not down,
forward and not back,
out and not in,
a hand,*1
x-3389
f e d e r a l
r e s e r v e
b o a r d
ST fTEr/ENT F O R T H E P R E S S
For release in Morning Papers,
Tuesday, May 2, 1922.
T h e f o l l o w i n g i s a r e v i e w of g e n e r a l " b u s i n e s s a n d
f i n a n c i a l conditions throughout the several F e d e r a l
R e s e r v e D i s t r i c t s d u r i n g t h e m o n t h of A p r i l , a s
c o n t a i n e d i n the f o r t h c o m i n g i s s u e of t h e F e d e r a l
Reserve Bulletin.
P r o n o u n c e d i n c r e a s e of a c t i v i t y h a s b e e n c h a r a c t e r i s t i c
o f m a n y b a s i c l i n e s of i n d u s t r y d u r i n g t h e p a s t m o n t h .
It h a s
b e e n p a r t i c u l a r l y n o t i c e a b l e in the m e t a l w o r k i n g i n d u s t r i e s , w h i l e
m e t a l m i n i n g operations have also reflected the tendency to an upward
movement.
I n s t e e l a n d i r o n m a n u f a c t u r e it i s n o w e s t i m a t e d t h a t ,
t a k i n g t h e i n d u s t r y a s a w h o l e , a b o u t JO p e r c e n t of p l a n t c a p a c i t y
is b e i n g u t i l i z e d .
T h e r e o p e n i n g of m a n y of t h e i n p o r t a n t c o p p e r
m i n e s i s p a r t l y t h e r e s u l t of t h e g r e a t r e d u c t i o n i n s u r p l u s c o p p e r
s t o c k s a n d p a r t l y t h e o u t c o m e of i n c r e a s e d d e m a n d , b o t h d o m e s t i c a n d
foreign.
T h e r e h a s b e e n a d e c i d e d i n c r e a s e i n p h y s i c a l o u t p u t of
zinc and seme a d v a n c e i n l e a d ore p r i c e s .
The automobile trade has
s h o w n a v e r y d e c i d e d gain, the M a r c h output b o t h i n trucks and passeng e r c a r s b e i n g m o r e t h a n 5 0 p e r c e n t a h e a d of t h a t f o r F e b r u a r y w h i l e
m a n y p l a n t s are reported as f u l l y employed.
Active demand f o r b u i l d i n g materials has had a favorable
e f f e c t n o t o n l y u p o n t h e m e t a l s b u t a l s o u p o n o t h e r l i n e s of i n d u s t r y .
T h e t o t a l v a l u e of b u i l d i n g p e r m i t s f o r M a r c h w a s a l m o s t t w i c e as
g r e a t as t h a t f o r F e b r u a r y a n d m o r e t h a n t w i c e a s g r e a t a s t h a t f o r
- 2 March, 1921*
x-3369
The lumber industry has notably expanded operations.
In c o t t o n t e x t i l e s t h e m o n t h h a s b e e n m u c h l e s s e n c o u r a g i n g ,
There has been a reduction in mill activity,
largely due to the wide-
s p r e a d strikes in the N e w E n g l a n d d i s t r i c t s .
On the other h a n d , de-
mand for cotton goods
has b e e n fairly well sustained.
districts mills generally
In the southern
continue to operate at a l e v e l c l o s e to f u l l
c a p a c i t y , a l t h o u g h w i t h s o m e t e n d e n c y t o a c c u m u l a t i o n of s t o c k s .
and shoes have shown great irregularity
districts.
Boots
as b e t w e e n different producing
V e r y m u c h t h e s a m e i s t r u e of the w o o l e n m a n u f a c t u r e .
A
c o n s p i c u o u s d e v e l o p m e n t h a s b e e n t h e s h i f t i n g o f d e m a n d f r o m w o r s t e d s to
woolens.
L e a v i n g o u t v o l u n t a r y u n e m p l o y m e n t , t h e r e s u l t of s t r i k e s , a d e c i d e d
i n c r e a s e i n t h e nuriber of e m p l o y e e s a t w o r k is n o t e d .
There has b e e n a
2 . 5 p e r c e n t i n c r e a s e d u r i n g t h e m o n t h i n t h e n u m b e r of w o r k e r s e m p l o y e d
b y f i r m s reporting to the U . S. E m p l o y m e n t S e r v i c e .
The improvement noted
w i l l , h o w e v e r , b e o f f s e t to s o m e e x t e n t b y t h e w i d e s p r e a d u n e m p l o y m e n t
i n the ® o a l m i n i n g i n d u s t r y as w e l l as i n the N e w E n g l a n d t e x t i l e c e n t e r s .
W h o l e s a l e and retail trade have r e f l e c t e d to some e x t e n t the improvement in industrial conditions.
S u c h i m p r o v e m e n t is i n p a r t s e a s o n a l
b u t a l s o c o n t a i n s a n e l e m e n t of g r o w t h d u e t o b e t t e r b u s i n e s s c o n d i t i o n s .
F i g u r e s c o m p a r e f a v o r a b l y w i t h t h o s e of a y e a r a g o , p a r t i c u l a r l y i n h a r d w a r e l i n e s w h i c h are a f f e c t e d b y the g r e a t e r a c t i v i t y in b u i l d i n g .
In
the r e t a i l t r = d e a l s o a v e r y g e n e r a l a d v a n c e h a s t a k e n p l a c e , i n s p i t e
of t h e l e t e E r s t e r a n d t h e b a d c o n d i t i o n of t h e r o a d s i n t h e r u r a l s e c t i o n s .
Agriculturally the m o n t h has not b e e n a l t o g e t h e r p r o m i s i n g .
Spring
- 3 -
x-33s9
p l a n t i n g h a s "been r e t a r d e d "by t h e c o l d w e ? t h e r a n d c o n t i n u e d r a i n s .
Prices continue relatively stable.
The Federal Reserve Board's
v h o l e s ? l e p r i c e i n d e x f o r M a r c h a d v a n c e d one p o i n t .
Few conspicuous
c h a n g e s i n t h e p r i c e s of e n t i r e g r o u p s of c o m m o d i t i e s a r e i n d i c a t e d , .
F i n a n c i a l l y the m o n t h s h o w s t h e s a m e t e n d e n c i e s a s d u r i n g
M a r c h and February.
F o r e i g n e x c h a n g e h a s "been m u c h m o r e s t a b l e .
Interest rates have continued on a very low basis with slight
tendencies to d e c l i n e .
M
a p p a r e n t s h r i n k a g e of c o m m e r c i a l
c r e d i t h a s b e e n i n d i c a t e d b y f u r t h e r f a l l i n g off i n the
redis-
c o u n t s o f the F e d e r a l R e s e r v e B a n k s , a l t h o u g h a n u p w a r d m o v e m e n t
i s ° g a i n to b e n o t e d i n t h e l o a n s a n d d i s c o u n t s of m e m b e r b a n k s
i n m a n y p a r t s of the c o u n t r y .
more promising outlook in ex-
p o r t trade is a p p a r e n t l y i n d i c a t e d b y a n o t h e r g r o w t h in our
f a v o r a b l e b a l a n c e , a l t h o u g h it is s t i l l u n c e r t a i n w h e t h e r t h i s
i s d u e t o t e m p o r a r y c a u s e s o r t o a g e n e r a l r e v i v a l of E u r o p e a n
demand.
But for labor disturbances
the i n d u s t r i a l o u t l o o k w o u l d b e
p r o n o u n c e d d e f i n i t e l y g o o d w i t h e v i d e n t p r o m i s e of i m p r o v e m e n t
e v e n i n t h o s e d i r e c t i o n s , s u c h as f o r e i g n t r a d e , i n -vhich h e r e tofore prospects have been unsatisfactory.
x-33s9
-4agriculture:
C u r r e n t p r o d u c t i o n of w i n t e r w h e a t w a s e s t i m a t e d o n
•April 1 t o a m o u n t t o 5 7 2 , 9 7 ^ , 0 0 0 b u s h e l s , o r 2 . 4 p e r c e n t l e s s t h a n i n 1 9 2 1 ;
w h i l e p r o d u c t i o n of r y e w a s e s t i m a t e d a t 6 9 , 6 6 7 , 0 0 0 b u s h e l s , o r a b o u t 2 0
p e r c e n t g r e a t e r t h a n t h e c r o p of 1 9 2 1 ,
C o n d i t i o n of w i n t e r w h e a t i n
D i s t r i c t No. 1 0 (Kansas C i t y ) w a s g r e a t l y b e n e f i t e d by s n o w s and r a i n s
d u r i n g M a r c h a n d t h e f i r s t w e e k of A p r i l , b u t i n s e c t i o n s of t h e G r e a t
P l a i n s m u c h of t h e w h e a t w a s k i l l e d b y t h e l o n g d r y s e a s o n w h i c h e x t e n d e d
f r o m e a r l y a u t u m n t o t h e l a t t e r p a r t of t h e w i n t e r .
In D i s t r i c t N o . 8
(St. L o u i s ) t h e w i n t e r w h e a t crop h a s a f i n e s t a n d a n d good r o o t growth,
a l t h o u g h f l o o d s h a v e entirely destroyed the crop u p o n t h o u s a n d s o f acres
of b o t t o m l a n d s .
W i n t e r g r a i n s are in fine condition i n D i s t r i c t N o . 7
(Chicago) and little wheat acreage has been abandoned.
T h e p l a n t i n g of s p r i n g c r o p s h a s b e e n m u c h d e l a y e d d u e t o t h e c o l d
w e a t h e r and continued rains.
D i s t r i c t No. 8 (St. L o u i s ) r e p o r t s t h a t t h e r e
a r e s l i g h t i n c r e a s e s i n a c r e a g e of c o r n p l a n t e d i n A r k a n s a s , M i s s i s s i p p i
and Tennessee, w h i l e there are smaller p l a n t i n g s i n K e n t u c k y .
An increase
i n corn acreage is reported from District No. 1 0 (Kansas City), but seeding
of o a t s h a s b e e n g r e a t l y r e t a r d e d b y w e t w e a t h e r .
Met soil also has
i n t e r f e r e d w i t h t h e p l a n t i n g of p o t a t o e s i n K a n s a s a n d N e b r a s k a , a l t h o u g h
indications still point to a normal acreage.
C o n t r a c t s for sugar beets
signed prior to April 8 provide for 1 1 1 , 5 5 0 acres in Colorado, 44,919 acres
i n N e b r a s k a , a n d 1 3 , 0 0 0 a c r e s i n W y o m i n g a t a m i n i m u m p r i c e of $ 5 p e r t o n
of b e e t s .
In District No. 7 (Chicago) wet weather has prevented many farmers
f r o m s o w i n g o a t s w h i c h m a y cause a n i n c r e a s e i n t h e a c r e a g e of c o m .
Precautions are being taken to prevent the European corn borer from reaching
the corn belts from infested territory in eastern states.
S o w i n g of
X-3389
b a r l e y h a s been delayed in District No. 1 2 (San F r a n c i s c o ) , but
it is e s t i m a t e d t h a t t o t a l p l a n t i n g s w i l l b e a b o u t a s l a r g e a s i n
1921.
W h e a t f i e l d s in W a s h i n g t o n , Idaho, and U t a h w e r e p r o t e c t e d
b y s n o w a l l w i n t e r , a n d t h e ir.elted s n o w h as i n s u r e d a p l e n t i f u l
supply of m o i s t u r e .
COTTON.
The acreage p l a n t e d to c o t t o n t h i s y e a r w i l l be
g r e a t e r t h a n i n 1 9 2 1 , a c c o r d i n g to r e p o r t s f r o m l 6 7 c o u n t i e s in
Texas.
T h e r e i s s t i l l m u c h d o u b t a s to the s i z e of t h i s i n c r e a s e ,
however, and recent rains have resulted in considerable abandonment.
Acreage of cotton planted in Oklahoma will be slightly larger than
in 1 9 2 1 , a l t h o u g h p l a n t i n g h a s b e e n r e s t r i c t e d i n t h o s e c o u n t i e s
w h i c h s u f f e r e d h e a v i l y f r o m the boll w e e v i l .
D i s t r i c t No, 8
(St. L o u i s ) states that p l a n t i n g h a s b e e n i m p e d e d by e x c e s s i v e
m o i s t u r e , but that acreage will b e 1 6 p e r cent l a r g e r than last year
in A r k a n s a s , and about the same as l a s t year in M i s s o u r i .
Some
l o c a l i t i e s in that D i s t r i c t report increased sales of fertilizer,
b u t comparatively little h a s b e e n bought in District No. 5 (Richmond),
The p r i c e of m i d d l i n g u p l a n d c o t t o n at N e w O r l e a n s o n A p r i l 19
w a s 1 7 cents, as compared with 1 6 . 7 5 cents on M a r c h 15-
A
very
active cooperative selling movement h a s b e e n developed among the
farmers of District No. 5 (Richmond), and an effort is being made
to p e r s u a d e g r o w e r s to c o n t r a c t to s e l l t h r o u g h t h i s a s s o c i a t i o n f o r
five years.
Many farmers have already signed contracts which pledge
t h o u s a n d s o f b a l e s to t h i s p o o l .
x-3389
TOBACCO.
In most districts, tobacco has practically all been
d e l i v e r e d b y the f a r m e r .
B u r l e y g r o w e r s are r e p o r t e d to a p p e a r w e l l
s a t i s f i e d w i t h t h e r e s u l t s o b t a i n e d b y t h e i r a s s o c i a t i o n u p to t h i s
t i m e , a n d a c t i v e a t t e n t i o n is b e i n g g i v e n b o t h i n t h e w e s t e r n d a r k
d i s t r i c t s a n d i n the e a s t e r n d i s t r i c t s to t h e f o r m a t i o n o f s i m i l a r
marketing organizations.
Preparations are b e i n g made for a full
s i z e d c r o p of B u r l e y a n d d a r k t o b a c c o i n D i s t r i c t N o . 8 (St. L o u i s )
w h i l e in District N o . 4 (Cleveland) a somewhat l a r g e r c r o p is e x p e c t e d than l a s t year, w h e n the acreage w a s b e l o w the average,
A
l e a d i n g d e a l e r i n D i s t r i c t N o . 5 ( R i c h m o n d ) s t a t e s t h a t "the l e a f
t o b a c c o t r a d e i s i n a f a r m o r e h e a l t h y c o n d i t i o n t h a n it h a s b e e n
i n t h e l a s t two y e a r s a n d w e t h i n k i t i s g r a d u a l l y i m p r o v i n g e a c h
month."
L i t t l e recent a c t i v i t y is r e p o r t e d i n the P e n n s y l v a n i a
leaf market.
E s t i m a t e s indicate that a p p r o x i m a t e l y 25 p e r cent of
the 1921 c r o p is still h e l d b y the growers.
I n g e n e r a l the d e m a n d
f o r c i g a r s in that D i s t r i c t h a s i n c r e a s e d w i t h i n the p a s t m o n t h , but
m a n y e v i d e n c e s of d e p r e s s i o n a r e still f o u n d in the industry..
Opera-
t i o n s a v e r a g e b e t w e e n 6 0 a n d "JO p e r c e n t o f c a p a c i t y .
FRUIT.
Shipments of citrus fruit from C a l i f o r n i a and F l o r i d a
d u r i n g M a r c h w e r e c o n s i d e r a b l y s m a l l e r t h a n i n M a r c h , 1 9 2 1 , d u e to a
d e c i d e d curtailment in the shipments of oranges.
M a r c h s h i p m e n t s of
o r a n g e s a m o u n t e d to 6 , 7 0 1 carloads, a d e c r e a s e of l 4 p e r cent f r o m the
s h i p m e n t s a y e a r a g o , w h i l e s h i p m e n t s o f g r a p e f r u i t a m o u n t e d to 2 , 2 3 3
c a r l o a d s , a n i n c r e a s e o f 6 p e r c e n t , a n d of l e m o n s , 9 ^ 0 c a r l o a d s , a n
i n c r e a s e o f 0.4 p e r c e n t .
District No. 6 (Atlanta) reports that large
-7-
x-j389
markets are rapidly absorbing at increased prices all citrus fruit
offered.
Prices of oranges are higher than they have ever been before
at this time of the year, and grapefruit prices have risen as a r e s u l t
of the shortage of orgnges.
Reports from District No* 12 (San Francisco)
indicate that almost all the navel orange crop was shipped by the middle
of April, as a result of the strong demandReports from all sections of the country indicate that the
prospects for the deciduous fruit crop are exceptionally good.
District
No. 5 (Richmond) states that continued cold weather has prevented unseasonably early development of fruit trees and that the outlook for a
large crop is excellent.
Apple and peach orchards in District No. 8
(St, Louis) have been subject to more careful cultivation than in former
years, and the Arkansas strawberry crop will probably exceed all previous
yields.
Heavy rains have given an adequate supply of soil and surface
moisture for the growing season in District No. 12 (San Francisco), while
the backward spring has delayed budding and minimized the dangers from
frost.
The apricot crop which has been infested by apricot dry rot and
injured by frosts is the only fruit crop reported to be in poor condition.
GRAIN MOVEMENTS*
Grain receipts at 1? reporting interior centers
decreased considerably during March, although receipts of rye and barley
increased.
This decline was due to a reduction in exports, unfavorable
weather conditions, and uncertainty concerning the size of the new crops.
Corn receipts, which reached a record volume in February, declined 47 per
cent during March, due to heavy reductions at Chicago, St. Louis, Peoria,
and Indianapolis*
Receipts of wheat were 15 per cent smaller than in
March, the declines being most pronounced at Kansas City, Wichita, and
X-33S9
-8-
Omaha.
R e c e i p t s of b o t h c o r n a n d w h e a t a t D u L u t h w e r e c o n s i d e r a b l y
l a r g e r in March than in February.
R y e r e c e i p t s at r e p o r t i n g c e n t e r s
i n c r e a s e d 1 1 0 p e r cent d u r i n g March, this i n c r e a s e a l s o b e i n g most
m a r k e d at B u l u t h .
R e c e i p t s of b a r l e y w a r e 4 0 p e r c e n t g r e a t e r ' t h a n
i n F e b r u a r y , m o s t of t h e g a i n b e i n g r e c o r d e d a t M i n n e a p o l i s a n d
Milwaukee.
T o t a l r e c e i p t s of g r a i n a t n i n e s e a b o a r d c e n t e r s i n c r e a s e d
d u r i n g M a r c h , a l t h o u g h r e c e i p t s of c o r n a n d rye w e r e s o m e w h a t d i m i n i s h e d .
S t o c k s of w h e a t and b a r l e y at b o t h i n t e r i o r and s e a b o a r d c e n t e r s d e clined d u r i n g March, w h i l e corn stocks continued to accumulate.
FLOUR.
M a r c h p r o d u c t i o n of f l o u r e x c e e d e d t h a t o f F e b r u a r y i n
almost all Districts, the estimated figure for t h e United S t a t e s being
9,658,000 barrels, as compared with 9,232,000 barrels in February.
R e p o r t e d output i n D i s t r i c t No. 9 (Minneapolis) w a s 2,053.»800 barrels,
as compared w i t h 1,802,781 barrels in February, a n increase of 13.8
per cent.
In District No. 1 0 (Kansas City) production increased from
1,498,813 barrels in February to 1,7^6,507 barrels in March.
Eleven
l e a d i n g m i l l s i n D i s t r i c t N o . 8 (St. L o u i s ) s h o w e d p r o d u c t i o n i n c r e a s e d
from 260,472 barrels to 329,426 barrels, while 4S millers i n District
N o . 7 ( C h i c a g o ) s h o w e d a n i n c r e a s e of 1 0 . 2 p e r c e n t , t h e M a r c h f i g u r e
being 449,568 barrels.
In District No. 1 2 (San Francisco), however,
output declined from 795,650 barrels in February, for 64 mills, to
707,202 barrels in March, for 6l mills.
In all Districts, however,
p r o d u c t i o n w a s i n e x c e s s of t h a t in March, 1 9 2 1 .
Business in general
is d e s c r i b e d as dull, and m i l l e r s i n D i s t r i c t No. 1 0 (Kansas C i t y )
a s s e r t t h e y a r e f a c i n g t h e n e c e s s i t y of c u r t a i l i n g o p e r a t i o n s u n l e s s
there are increased bookings or orders, both for domestic and foreign
-9trade.
x-3389
Prices, however, continued strong, mainly in sympathy w i t h
t h e s t r o n g p o s i t i o n of c a s h w h e a t , a n d h e n c e i n c r e a s e d s h a r p l y i n t h e
m i d d l e of A p r i l ,
Choice milling grain is reported difficult t o secure
by several Districts,
L I V E S T O C K , R e c e i p t s of c a t t l e a n d c a l v e s at 1 5 w e s t e r n m a r k e t s
d u r i n g M a r c h w e r e 1 , 1 5 7 , 1 3 5 h e a d , a s c o m p a r e d w i t h 1,3^-5/^-87 h e a d
d u r i n g F e b r u a r y and 1,119,5^-3 h e a d d u r i n g M a r c h , l y 2 1 .
R e c e i p t s of
h o g s d e c r e a s e d f r o m 2,530,092 h e a d d u r i n g F e b r u a r y , t o 2 , 3 S U , 335 h e a d
during March, as compared with 2,390,^80 head a year ago.
March
sheep receipts, however, w e r e 9 9 7 , 1 1 9 head, a s compared w i t h 9 1 3 / ^ 2
h e a d d u r i n g F e b r u a r y a n d l , l 6 l , 5 ^ 9 h e a d d u r i n g M a r c h , 1921.
Stocker
a n d f e e d e r s h i p m e n t s of c a t t l e a n d c a l v e s w e r e m u c h h e a v i e r i n jaarch
t h a n i n F e b r u a r y , b u t t h e r e v e r s e w a s t r u e of s h e e p .
General conditions
a f f e c t i n g the livestock industry are showing continuous improvement
i n D i s t r i c t No. 1 0 ( K a n s a s C i t y ) , t h e h i g h e r l e v e l s of p r i c e s ( a s c o m p a r e d w i t h t h o s e p r e v a i l i n g t h r o u g h t h e fall and e a r l y w i n t e r m o n t h s )
having greatly stimulated interest.
There h a s b e e n a h e a v y movement
of c a t t l e f r o m t h e s o u t h w e s t t o t h e l o n g g r a s s p a s t u r a g e of O k l a h o m a ,
Kansas a n d Nebraska.
Steady improvement i n r a n g e conditions i s
r e p o r t e d i n District No. 1 1 ( D a l l a s ) .
Continuance of winter w e a t h e r
u p t o t h e m i d d l e of A p r i l prolonged t h e f e e d i n g s e a s o n i n D i s t r i c t
1 2 (San Francisco) b e y o n d i t s normal l i m i t s , b u t livestock i n g e n e r a l
is reported in normal condition.
Returns f r o m 3 6 p a c k e r s s h e w a d e c r e a s e of 0.1 p e r c e n t in
average weekly s a l e s ( i n d o l l a r s ) i n M a r c h f r o m t h o s e of February, a n d
37 s h o w a d e c r e a s e of 3 . S p e r c e n t a s c o m p a r e d w i t h a y e a r a g o .
Dorrestic
-10-
x-33s9
t r a d © in fresh and cured m e a t s w a s r a t h e r slow in M a r c h i n D i s t r i c t N o .
7 ( C h i c a g o ) , b u t s h o w e d s o m e s i g n s of i m p r o v e m e n t i n e a r l y A p r i l .
Export
b u s i n e s s in p r o v i s i o n s w a s m u c h smaller.
COAL. M a r c h p r o d u c t i o n of b i t u m i n o u s c o a l w a s 5 0 * 1 9 3 / 0 0 0 t o n s ,
the highest record for any March d u r i n g the past ten years and an inc r e a s e o f 2 3 p e r c e n t o v e r l a s t m o n t h a n d of 6 5 p e r c e n t o v e r M a r c h , 1 9 2 1 .
D u r i n g t h e f i r s t w e e k of t h e s t r i k e , p r o d u c t i o n d r o p p e d t o 3 , 7 9 3 , 0 0 0
t o n s , a s c o m p a r e d w i t h 5 , 5 9 0 , 0 0 0 t o n s d u r i n g t h e f i r s t w e e k of t h e 1 9 I 9
coal strike.
S t o c k s i n t h e h a n d s of c o n s u m e r s o n A p r i l 1 w e r e 6 3 , 0 0 0 , 0 0 0
tons, w i t h 4 , 0 0 0 , 0 0 0 t o n s in storage on the L a k e d o c k s .
A l t h o u g h it i s
estimated that the supply, w i t h weekly production, is sufficient for
four m o n t h s ' c o n s u m p t i o n and export, t h i s d o e s not m e a n t h a t soma
s e c t i o n s a n d i n d u s t r i e s m a y n o t f e e l a s h o r t a g e uiuch e a r l i e r , d u e t o
unequal distribution.
O n a c c o u n t of t h e n e a v y r e s e r v e s of c o n s u m e r s a n d
dealers, bituminous markets have felt little stimulus from the lessened
output resulting from the strike.
P r o d u c t i o n of a n t h r a c i t e f o r t h e m o n t h w a s 8,757,000 t o n s a s c o m pared w i t h 6 , 7 6 2 , 0 0 0 tons in February and 7 , 4 0 b , 0 0 0 tons during March
last year.
Demand for hard coal h a s b e e n but little affected by the al-
m o s t con.plste s u s p e n s i o n of m i n i n g s i n c e A p r i l 1 .
ceptions domestic
W i t h v e r y faw e x -
consumers are b u y i n g t o satisfy immediate ncsds o n l y
as they do n o t fear
a n y s h o r t a g e e g a r e s u l t of the s t r i k e .
P r o d u c t i o n of b e e - h i v e c o k e f o r M a r c h w a s 7 3 2 , 0 0 0 t o n s ,
w i t h a p r o d u c t i o n of 1 9 1 , 0 0 0 t o n s f o r t h e w e e k e n d i n g A p r i l 1 , t h e h e a v i e s t
weekly tonnage during the year.
By-product coke production increased
from 1 , 7 9 5 , 0 0 0 tons in February to 2 , 1 3 7 , 0 0 0 t o n s in March.
There have
b e e n n o g e n e r a l a d v a n c e s in p r i c e , but a s t i f f e n i n g of q u o t a t i o n s
-li-
x-3389
occurred early in April, due to t h e sharp decline in output.
S t o c k s of
by-product coke exceed 1 , 0 0 0 , 0 0 0 tons and there is no change in p r o d u c t i o n
a s t h e s e f u r n a c e s h a v e l a r g e s u p p l i e s of b i t u m i n o u s .
PETROLEUM.
P r o d u c t i o n of c r u d e p e t r o l e u m t h r o u g h o u t t h e U n i t e d
States continued its upward trend during March, reaching the new record
of 4 6 , 9 1 6 , 0 0 0 b a r r e l s .
In District No. 11 (Dallas) 16,246,680 barrels
were produced, as compared with 13/753/335 barrels during February.
The
d a i l y a v e r a g e y i e l d s h e w e d a n i n c r e a s e of 3 2 , 6 5 2 b a r r e l s o v e r t h e f l o w
during February.
I n t h i s D i s t r i c t t h e r e w a s a g e n e r a l r e s u m p t i o n of
drilling operations.
T h e n u m b e r of ./ells c o m p l e t e d t o t a l e d 3 5 5 w h i c h i n -
cluded 268 producers as against 223 producers completed during February.
District No. 1 0 (Kansas City) reports that approximately 1 5 , 4 0 6 , 4 0 0
b a r r e l s w e r e p r o d u c e d d u r i n g the 31 d a y s in M a r c h a s c o m p a r e d w i t h
1 3 , 7 9 4 , 0 0 0 b a r r e l s f o r t h e 2 8 d a y s of F e b r u a r y a n d 1 4 , 3 9 ^ , 0 0 0 b a r r e l s
f o r t h e 3 1 d a y s of M a r c h 1 9 2 1 .
In District No. 1 0 (Kansas C i t y ) 633
w e l l s w i t h a d a i l y n e w p r o d u c t i o n of 1 3 7 , 9 6 ? b a r r e l s w e r e co-apleted, as
compared w i t h 433 w e l l s during February and 765 during March, 1921, with
d a i l y n e w p r o d u c t i o n of 6 7 , 9 5 3 b a r r e l s a n d 7 0 , 9 1 0 b a r r e l s r e s p e c t i v e l y .
D i s t r i c t N o . 1 2 ( S a n Francisco) l i k e w i s e r e p o r t s a n i n c r e a s e d p r o d u c t i o n
of 8 , 9 7 0 b a r r e l s p e r d a y o v e r F e b r u a r y .
S h i p m e n t s of c r u d e p e t r o l e u m ,
however, declined l 4 , l £ 4 barrels p e r day from the p r e v i o u s month.
Fifty-
e i g h t n e w w e l l s w e r e o p e n e d d u r i n g M a r c h w i t h a n i n i t i a l d a i l y f l o w of
22,000 barrels, but two wells were abandoned.
Stored stocks in District
No, 1 2 (San F r a n c i s c o ) w e r e 3 7 , 9 9 1 * 6 9 4 b a r r e l s on M a r c h 31
a s
compared
w i t h 1 , 2 8 9 , 8 8 4 b a r r e l s on February 28.
A n i n c r e a s e f r o m $ 1 . 2 5 t o $ 1 . 5 0 p e r b a r r e l i n t h e p r i c e of M e x i a
c r u d e o i l w a s a n n o u n c e d d u r i n g M a r c h . T h e p r i c e o f M e x i a h a s r i s a n i.rom
$.60 per barrel to $1,50 per barrel during the last five m o n t h s in the
f a c e of a n e n o r m o u s i n c r e a s e i n p r o d u c t i o n .
X-33S9
-12-
IRON AM) STEEL
I m p r o v e m e n t h a s c o n t i n u e d in the i r o n and s t e e l
i n d u s t r y , a l t h o u g h t h e c o a l s t r i k e h a s s e r v e d to i n j e c t a f a c t o r of
u n c e r t a i n t y into the situation.
March pig iron production amounted
to 2 , 0 3 4 , 7 9 4 tons, as c o m p a r e d w i t h 1 , 6 2 9 . 9 9 1 tons d u r i n g F e b r u a r y ,
while steel ingot production showed a somewhat greater increase,from
1I7^5>022 tons to 2,370,751 tons.
O p e r a t i o n s of t h e l e a d i n g i n t e r e s t
h a v e b e e n at s l i g h t l y o v e r 7 0 p e r c e n t of c a p a c i t y , a n d o f t h e i n d e p e n d e n t s at b e t w e e n 60 a n d 6 5 p e r c e n t .
Activity in District No. 3
( P h i l a d e l p h i a ) is still on a somewhat lower scale t h a n i n o t h e r sections .
Acconpanying this increase i n ^ r c i u c t i c n was an increase in
s a l e s , the u n f i l l e d o r d e r s o f t h e TJ. S . S t e e l C o r p o r a t i o n a d v a n c i n g
f r o m U, 1 ^ 1 , 0 6 9 t o n s at t h e c l o s e of F e b r u a r y t o 4 , 4 9 4 , 1 4 8 t o n s o n e
month later.
M a r c h b o o k i n g s of m i l l s a n d f u r n a c e s a r e s s i d b y
District'- N o . 4 ( C l e v e l a n d ) t o h a v e b e e n t h e h e a v i e s t i n a b o u t t w o
years. - Not only have sales increased and operations expanded, b u t
prices have exhibited a firmer tendency than h a s b e e n evident for
several months past.
In m a n y i n s t a n c e s q u o t a t i o n s h a v e b e e n ad-
vanced, b o t h f o r p i g iron and f o r s t e e l p r o d u c t s -
Curtailed pur-
c h a s i n g h a s h o w e v e r u s u a l l y f o l l o w e d t h e a n n o u n c e m e n t of a n a d v a n c e ,
f o r . c o n s u m e r s h a v e g e n e r a l l y b e e n g i v e n t h e o p p o r t u n i t y to p l a c e
o r d e r s at t h e o l d f i g u r e b e f o r e t h e a d v a n c e is m a d e .
I n p a r t the
g e n e r a l s i t u a t i o n r e f l e c t s t h e f e a r of a p o s s i b l e s h o r t a g e a s a r e sult
of t h e c o a l s t r i k e , a n d t h i s h a s c o n t i n u e d a p o t e n t f a c t o r
t h r o u g h o u t .April.
M
for stocking purposes.
l e a s t a p a r t of r e c e n t p u r c h a s e s h a v e b e e n
T h e i n f l u e n c e of t h e c o a l s t r i k e h a s b e e n
brought sharply home to the i n d u s t r y b y the u n e x p e c t e d cessation of
w o r k b y non-union m i n e r s i n the CcnnellsviHe region, «hich is a
x-3389
l e a d i n g s o u r c e o f TSeehive c o k e .
Most plants however are reported
to have sufficient fuel to last for some time, but there is n a t u r a l l y
h e s i t a t i o n to expand operations further.
• AUTOMOBILES•
B o t h p r o d u c t i o n a n d s h i p m e n t s of a u t o m o b i l e s i n c r e a s e d
during March.
Manufacturers who produced 98>487 passenger cars in
F e b r u a r y b u i l t 1 5 2 , 5 1 2 c a r s i n M a r c h , a n i n c r e a s e of 5 4 - 9 p e r c e n t ,
w h i l e c o m p a n i e s b u i l d i n g 1 2 , 8 6 1 t r u c k s i n F e b r u a r y h a d a n o u t p u t of
1 9 , 3 U 9 t r u c k s i n M a r c h , a n i n c r e a s e of 5 0 . 4 p e r c e n t .
Carload
s h i p m e n t s i n c r e a s e d f r o m 19«63 6 in F e b r u a r y to a p p r o x i m a t e l y
2 5 , 2 1 0 in M a r c h .
O r d e r s f o r p a s s e n g e r c a r s a r e c o m i n g i n at a
g o o d rate i n D i s t r i c t N o . 4 ( C l e v e l a n d ) , and p a r t of the i m p r o v e m e n t
in t r u c k b u s i n e s s is
ascribed to r e d u c t i o n i n stocks h e l d b y d e a l e r s .
NONFERROUS METALS.
O n l y a f e w c o p p e r c o m p a n i e s i n the U n i t e d States
now remain closed.
The four porphyry copper companies resumed
o p e r a t i o n s o n t h e f i r s t of .April.
Copper production during March
s h o w e d a n i n c r e a s e of a b o u t 6 5 p e r c e n t o v e r t h e p r o d u c t i o n f o r
F e b r u a r y , a m o u n t i n g to 6 l . 8 6 ? » 4 0 3 p o u n d s as c o m p a r e d w i t h 3 7 , 4 1 5 , 8 0 8
p o u n d s in F e b r u a r y , b u t w a s 2 7 , 2 5 9 >762 p o u n d s less t h a n i n M a r c h 1921.
S a l e s of c o p p e r w e r e t h e l a r g e s t s i n c e N o v e m b e r , b u t t h e p r i c e of
electrolytic copper delivered in New York was 12.625 cents per pound
on April 1 5 as c o m p a r e d w i t h 1 4 cents p e r p o u n d in D e c e m b e r .
Zinc
p r o d u c t i o n f o r M a r c h t o t a l e d 2 6 , 5 3 2 t o n s , a n i n c r e a s e of 4 , 0 1 9 t o n s
over F e b r u a r y and 10,791 tons over March, 1921.
D i s t r i c t No- 10
( K a n s a s C i t y ) r e p o r t s t o t a l ' s h i p m e n t s of 3 1 , 6 0 1 t o n s of z i n c o r e s as
c o m p a r e d w i t h 27 ,043 t o n s d u r i n g F e b r u a r y and 2 2 , 1 3 8 t o n s d u r i n g M a r c h
a year
ago.
S t o c k s of z i n c o r e h e l d i n b i n s of t h e p r o d u c e r s t h r o u g h
out the d i s t r i c t a m o u n t to a p p r o x i m a t e l y 5 4 , 0 0 0 t o n s .
The average
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x-3369
p r i c e f o r lead ore f o r t h e m o n t h of M a r c h w a s $ 6 1 . 1 7 p e r t o n a n d t h e
t o t a l s o l d a m o u n t e d t o 7 > 5 0 2 t o n s , as c o m p a r e d w i t h 7 . 8 0 6 t o n s s o l d i n
F e b r u a r y a t a n a v e r a g e p r i c e of $ 6 0 . 0 0 p e r t o n .
p e r ton f o r March, 1921, was $38.97*
The average price
Reports received from 19 m i n e s
e n g a g e d i n the p r o d u c t i o n of g o l d , s i l v e r , lead a n d c o p p e r i n D i s t r i c t
N o . 1 2 ( S a n F r a n c i s c o ) i n d i c a t e a s m a l l d e c r e a s e i n the o u t p u t of t h e s e
metals i n February, 1922, as compared w i t h January,
The silver pro-
d u c t i o n in the United States f o r M a r c h amounted to 4,186,042 troy ounces
as c o m p a r e d w i t h 3 , 8 7 8 , 4 9 8 d u r i n g F e b r u a r y and 6 , 0 7 7 , 4 9 8 d u r i n g M a r c h ,
1921.
COTTON TEXTILES•
The. strike i n the N e w E n g l a n d m i l l d i s t r i c t s is as
yet u n s e t t l e d and it is n o t s u r p r i s i n g , t h e r e f o r e , t h a t m a n u f a c t u r i n g
a c t i v i t y c o n t i n u e d t o d e c l i n e d u r i n g t h e m o n t h of M a r c h .
Reports from
D i s t r i c t N o . 3 ( P h i l a d e l p h i a ) s h o w v e r y l i t t l e a c t i v i t y i n t h e c a s e of
y a r n mills i n this section, w h i c h on the average a r e operating at not
t o e x c e e d 7 5 p e r c e n t of i n c a p a c i t y w i t h s t o c k s a c c u m u l a t i n g i n t h e h a n d s
of s p i n n e r s .
In contrast to this situation, reports f r o m D i s t r i c t s
No. 5 (Richmond) and N o . 6 (Atlanta) indicate that operating activity
c o n t i n u e s at a h i g h rate, a l t h o u g h the f o r m e r D i s t r i c t s t a t e s t h a t
m i l l s t o c k s a r e a c c u m u l a t i n g s o m e w h a t , w h i l e m i l l s c o n t i n u e to r u n at
approximately full time.
In District No. 6 (Atlanta) there was an
a c t u a l i n c r e a s e i n M a r c h p r o d u c t i o n of c o t t o n c l o t h a m o u n t i n g t o 1 2 . 8
p e r cent f o r 43 m i l l s r e p o r t i n g d i r e c t l y to the F e d e r a l R e s e r v e B a n k
of that D i s t r i c t .
S h i p m e n t s d u r i n g the m o n t h i n c r e a s e d 1 7 . 2 p e r
c e n t , b u t o r d e r s o n h a n d a t the e n d of the m o n t h w e r e 5 p a r c e n t l o w e r .
C o t t o n y a r n p r o d u c t i o n a l s o a d v a n c e d 1 0 . 9 p a r c e n t i n t h e c a s e of
-15-
36 reporting mills.
x-33^9
Shipments were 18.7 p e r cent greater but orders
o n h a n d w e r e 8 p e r c e n t l e s s t h a n a t t h e e n d of t h e m o n t h .
The con-
s u m p t i o n of r a w c o t t o n i n the U n i t e d S t a t e s d u r i n g the m o n t h of M a r c h
i n c r e a s e d t o 5 1 8 , 4 5 0 b a l e s a s c o m p a r e d w i t h 4 7 3 > 0 0 0 "bales i n F e b r u a r y .
WOOTEN TEXTILES.
T h e e f f e c t of i n c r e a s e d d e m a n d f o r w o o l e n s a s c o n -
t r a s t e d w i t h w o r s t e d s is e v i d e n t i n the s t a t i s t i c s s h o w i n g t h e p e r c e n t a g e of i d l e s p i n d l e s t o t o t a l r e p o r t e d a n d p e r c e n t a g e s of i d l e
spindle h o u r s to total reported.
In the c a s e of w o o l e n s p i n d l e s the
p e r c e n t a g e of i d l e m a c h i n e r y d r o p p e d t o 1 7 * 5
o n
April 1 as c o m p a r e d
w i t h 2 0 . 1 o n M a r c h 1 w h i l e the p e r c e n t a g e of i d l e h o u r s f e l l to
14.1 as c o m p a r e d w i t h 18.4.
In the case of w o r s t e d s p i n d l e s , the
p e r c e n t a g e of i d l e m a c h i n e r y j u m p e d t o 2 5 . 3
as
c o m p a r e d w i t h 1 4 . 4 and
t h e p e r c e n t a g e of i d l e h o u r s t o t o t a l r e p o r t e d r o s e t o 2 9 . 2 a s c o m pared with 17.3.
T h e r e w a s a n i n c r e a s e i n t h e p e r c e n t a g e of i d l e
m a c h i n e r y a n d a l s o i n t h e p e r c e n t a g e of i d l e h o u r s t o t o t a l r e p o r t e d ,
b o t h f o r l o o m s 50" reed s p a c e and w i d e r and those f o r 50" reed s p a c e
or less.
F o r l o o m s w i d e r t h a n 5 0 " r e e d s p a c e , t h e p e r c e n t a g e of
i d l e m a c h i n e r y r o s e f r o m 3 1 - 5 ( M a r c h 1 ) to 3 4 - 9 ( A p r i l 1 ) a n d f o r
l o o m s 5 0 " r e e d s p a c e or l e s s t h e a d v a n c e w a s f r o m 2 7 - 1 to 2 7 . 8 .
Tne
c o r r e s p o n d i n g a d v a n c e s i n t h e p e r c e n t a g e s of i d l e h o u r s w e r e f r o m
3 4 . I to 3 6 . 9 , a n d f r o m 31-9 t o 3 6 . 5 r e s p e c t i v e l y .
A c c o r d i n g to t h e
report f r o m D i s t r i c t N o . 3 ( P h i l a d e l p h i a ) the d e m a n d f o r w o o l e n and
w o r s t e d c l o t h h a s b e e n s l i g h t , t h e v o l u m e of b u s i n e s s h a s b e e n l e s s
t h a n f o r t h e c o r r e s p o n d i n g p e r i o d l a s t y e a r , a n d t h e m a j o r i t y of r e porting firms state that demand has diminished since M a r c h 10.
x-3389
T h e p e r c e n t a g e of a c t i v i t y i n t h i s D i s t r i c t a p p e a r s t o h e c o n s i d e r a b l y
h e l o w t h e a v e r a g e , a s the m a j o r i t y of r e p o r t i n g m a n u f a c t u r e r s s t a t e
t h a t t h e y a r e o p e r a t i n g at o n l y 4 0 p e r c e n t of c a p a c i t y .
There
is c o n t i n u e d d u l l n e s s i n the y a m m a r k e t and w e a v e r s h e s i t a t e to m a k e
p u r c h a s e s b e c a u s e of a l a c k o f d e m a n d f o r t h e i r p r o d u c t .
District
Ho. 1 (Boston) reports that the m a r k e t f o r raw w o o l "has t e e n m o d e r a t e l y
active and that p r i c e s h-ve b e e n h i g h e r d u r i n g the p a s t m o n t h " .
is s a i d t o b e a s c a r c i t y of s o m e w o o l s i n B o s t o n .
There
On the other hand,
the P h i l a d e l p h i a r a w w o o l m a r k e t is " e x t r e m e l y i n a c t i v e , t r a d i n g b e i n g
c o n f i n e d to s m a l l lots on w h i c h s e l l e r s are w i l l i n g to g r a n t p r i c e
concessions" »
-The a c t i v i t y of c o a r s e a n d m e d i u m w o o l s i s s a i d n o t
t o b e g r e a t "but r e l a t i v e l y b e t t e r t h a n f o r the f i n e r c o u n t s .
CLOTHING.
S a l e s of r e p o r t i n g w h o l e s a l e c l o t h i n g f i r m s s h o w e d i n -
c r e a s e s i n M a r c h as c o m p a r e d w i t h F e b r u a r y b o t h f o r D i s t r i c t N o - 2
( N e w Y o r k ) , i n w h i c h 1 0 f i r m s s h o w e d a n i n c r e a s e of 4 1 . 2 p e r c e n t ,
and District No. 8 (St. Louis) in w h i c h 23 f i r m s reported increases
ranging f r o m 2 to 2 0 p e r cent i n March.
the w h o l e s a l e c l o t h i n g m a n u f a c t u r e r s
during March.
I n D i s t r i c t No* 7 ( C h i c a g o )
report f e w orders received
T h e a c t u a l v o l u m e of b u s i n e s s f o r t h e s e a s o n , h o w e v e r ,
has averaged over 35 P e r cent greater than a year ago f o r 8 reporting
firms:
I n the c a s e of 13 t a i l o r s - t o - t h e - t r a d e t h e r e w a s a n i n c r e a s e
of 7 9 . 8 p e r c e n t i n o r d e r s f o r s u i t s r e c e i v e d i n M a r c h a s c o m p a r e d
w i t h February, w h i l e orders were 8.6 per cent g r e a t e r than in M a r c h
1921.
T h e n u m b e r of s u i t s m a d e i n c r e a s e d 8 9 - 7 P e r
c e n t
i n
M a r c h
as c o m p a r e d w i t h F e b r u a r y a n d w a s 7 - 1 p e r c e n t above t o t a l s f o r M a r c h
1921.
"*tm
SIIK^
T h e r e h a s t e e n a c t i v e s e l l i n g of b r o a d s i l k s b y j o b b e r s i n t h e
P h i l a d e l p h i a s e c t i o n a c c o r d i n g to the r e p o r t s f r o m D i s t r i c t No. 3
( P h i l a d e l p h i a ) b u t p r o d u c t i v e a c t i v i t y h a s n e v e r t h e l e s s c o n t i n u e d to
decline.
B r o a d s i l k looms a r e w o r k i n g f r o m 1 to 3 d a y s a w e e k , w i t h
l e s s t h a n 5 0 p e r c e n t of t h e s i l k s p i n d l e s i n o p e r a t i o n .
Individual
o r d e r s are e s t i m a t e d to b e 2 0 p e r c e n t s m a l l e r t h a n d u r i n g the p r e ceding year.
Declines in manufacturing activity are also reflected
i n the f i g u r e s r e c e i v e d f r o m N o r t h H u d s o n a n d f r o m P a t e r s o n , w h i c h
s h o w f u r t h e r r e d u c t i o n s i n t h e n u m b e r of a c t i v e l o o m s a n d i n t h e p e r c e n t a g e of a c t i v e l o o m h o u r s t o t o t a l r e p o r t e d ( A p r i l 6 ) .
F o r P a t e r s on,
o n l y 2 , 2 0 9 o u t of a t o t a l of 1 5 , 0 0 0 l o o m s w e r e r e p o r t e d a c t i v e a n d t h e
p e r c e n t a g e of a c t i v e l o o m h o u r s to t o t a l r e p o r t e d w a s 17-02.
H u d s o n , 2,187
In N o r t h
w e r e a c t i v e o u t of a t o t a l r e p o r t i n g of 4 , l 6 l , w h i l e t h e
p e r c e n t a g e of a c t i v e h o u r s w a s U 3 . 7 1 .
T h e p r i c e s i t u a t i o n i n the c £ s e of r a w s i l k i s s t i l l u n s a t i s f a c t o r y ,
d e c r e a s e s at t h e e n d of M a r c h h a v i n g b e e n f o l l o w e d b y r e n e w e d a d v a n c e s
s i n c e the m i d d l e of A p r i l .
S p e c u l a t i v e a c t i v i t i e s i n the Y o k o h a m a
market, and a knowledge that considerablea holdings are in the hands
of t h e J a p a n e s e s y n d i c a t e , c o n t i n u e t o b e u n s e t t l i n g f a c t o r s c a u s i n g
b u y e r s to h e s i t a t e to m a k e p u r c h a s e s .
HOSIERY.
The full-fashioned silk hosiery mills in District No. 3
( P h i l a d e l p h i a ) c o n t i n u e d to b e b u s y a l t h o u g h the f a l l i n g off i n orders
f o r f u t u r e d e l i v e r y i n d i c a t e s a d e c l i n e i n t h e i n t e n s i t y of t h e d e m a n d
f o r t h e f i n e s t g r a d e s of g o o d s .
I n t h e c ^ s e of m i l l s m a k i n g s e a m l e s s
hosiery, b o t h silk and artificial silk, great variations in activity exist.
x-3389
S o m e m i l l s a r e r u n n i n g a t 1 0 0 p e r c e n t of c a p a c i t y w i t h o r d e r s s u f f i c i e n t
to m a i n t a i n t h a t r a t e f o r s e v e r a l m o n t h s ; b u t t h e m a j o r i t y a r e o p e r a t i n g
at
anywhere
f r o m 3 0 t o 7 5 p e r c e n t of c a p a c i t y .
Returns from firms
s e l l i n g to the w h o l e s a l e trade s h o w e d that p r o d u c t m a n u f a c t u r e d d u r i n g
t h e m o n t h o f M a r c h ( i n d o z e n s of p a i r s ) i n c r e a s e d 1 0 . 5 p e r c e n t a s c o m p a r e d w i t h the p r e c e d i n g m o n t h .
Orders hooked were
p e r cent
g r e a t e r , w h i l e u n f i l l e d o r d e r s o n h a n d at t h e e n d of t h e m o n t h d e c l i n e d
1 9 * 8 p e r c e n t as coiqpared w i t h t h e e n d of t h e p r e c e d i n g m o n t h .
The
c o r r e s p o n d i n g f i g u r e s f o r f i r m s s e l l i n g to t h e r e t a i l t r a d e s h o w e d i n c r e a s e s of 2 8 p e r c e n t a n d 0 . 1 p e r c e n t a n d a d e c r e a s e i n u n f i l l e d
o r d e r s of 1 5 - 5 p e r c e n t .
tinued to h e scarce.
Orders for mercerized and cotton hose con-
O n the other hand, i n D i s t r i c t No. 6 (Atlanta)
f o u r m i l l s m a n u f a c t u r i n g c o t t o n h o s i e r y s h o w e d a n i n c r e a s e of o r d e r s
b o o k e d d u r i n g t h e m o n t h of 2 5 p e r c e n t , a l t h o u g h o r d e r s o n h a n d at t h e
e n d of t h e m o n t h w e r e 6 . 9 p e r c e n t b e l o w t h o s e o n h a n d at t h e e n d o f
February.
T h e r e w a s a d e c r e a s e of 5 . 6 p e r c e n t i n h o s i e r y m a n u f a c t u r e d
a s c o m p a r e d w i t h t h e p r e c e d i n g m o n t h , b u t a s u b s t a n t i a l i n c r e a s e of
2 3 . 4 per cent as compared w i t h a year ago.
UNDERWEAR.
C o m p a r a t i v e r e p o r t s received f r o m 3 4 m i l l s reporting to
t h e A s s o c i a t i o n of E h i t G o o d s M a n u f a c t u r e r s of A m e r i c a r e f l e c t p r o g r e s s
i n a c t u a l p r o d u c t i o n o v e r the p r e v i o u s m o n t h , o u t p u t i n c r e a s i n g f r o m
4 9 7 . 0 0 5 d o z e n s i n F e b r u a r y to 6 0 1 , 3 0 2 d o z e n s i n M a r c h , a g a i n of 2 1
p e r cent.
S h i p m e n t s a l s o i m p r o v e d as c o m p a r e d w i t h F e b r u a r y , a m o u n t -
i n g to 4 2 9 , 7 6 9 d o z e n s i n t h a t m o n t h , a n d 5 0 1 , 0 3 0 d o z e n s i n M a r c h , a n
i n c r e a s e of 1 6 . 6 p e r c e n t .
Both unfilled orders
end new orders fell
o f f d u r i n g M a r c h , t h e f o r m e r d e c r e a s i n g f r o m 1 , 4 1 8 , 8 9 2 d o z e n s o n F e b r u a r y 1,
w 10
.
x-3389
to 1 , 3 3 6 , 2 4 5 d o z e n s o n M a r c h 1 , a d e c l i n e o f 6 . 0 p e r c e n t ; w h i l e t h e
l a t t e r f e l l f r o m 3 8 ? > 8 2 0 d o z e n s to 3 5 5 , 7 1 3 d o z e n s , a d e c l i n e of 8.0
per cent.
C a n c e l l a t i o n s d e c r e a s e d f r o m 1 0 , 9 6 8 d o z e n s i n F e b r u a r y to
9 , 5 5 1 d o z e n s in M a r c h , or 1 3 . O p e r c e n t .
T h i r t y - s e v e n m i l l s w h i c h r e p o r t e d a n a c t u a l p r o d u c t i o n of 6 1 2 , 5 6 6
'dozens i n M a r c h h a v e u n f i l l e d o r d e r s o n h a n d o n £ p r i l 1 a m o u n t i n g
t o 1 , 2 0 S , 6 0 0 d o z e n s , t h e b a l a n c e of o r d e r s h a v i n g d e c l i n e d 1 1 . 4 p e r
cent since M a r c h 1.
dozens.
T h e n o r m a l p r o d u c t i o n of t h e s e 3 7 m i l l s i s 7 0 8 , 6 ) 6
N e w o r d e r s a m o u n t e d t o 3 6 3 , 9 6 0 d o z e n s , o r 5 ^ » 4 p e r c e n t of
n o r m a l p r o d u c t i o n , w h i l e s h i p m e n t s w e r e 5 1 0 , 5 5 5 d o z e n s , o r J2 . 1 p e r c e n t
of n o r n a l .
C a n c e l l a t i o n s a m o u n t e d t o o n l y 1 - 4 p e r c e n t of n o r m a l p r o -
duction.
S H O E S AW
LEATHER.
P r i c e s of p a c k e r h i d e s i n c r e a s e d s o m e w h a t d u r i n g
t h e f i r s t t h r e e w e e k s o f .April a n d t h e C h i c a g o m a r k e t h a s b e e n f a i r l y
active»
Demand for calf skins has also shown some improvement, but
b u s i n e s s i n b o t h s h e e p s k i n s and g o a t s k i n s is v e r y d u l l .
Reports from
seven tanners in D i s t r i c t N o . 7 (Chicago) s h o w a d e c l i n e i n M a r c h sales
of m a n y s h o e l e a t h e r s , b u t a n i n c r e a s e i n
harness, sole, and calf leather.
have the b e s t d e m a n d .
^-los
of s t r a p , b a g , c a s e ,
L o w g r a d e s a n d s p e c i a l t i e s s e e m e d to
D i s t r i c t N o . 3 ( P h i l a d e l p h i a ) s t a t e s that the
m o s t e n c o u r a g i n g f e a t u r e in the h e a v y l e a t h e r m a r k e t h a s b e e n the in. c r e a s e d s a l e s of b e l t i n g l e a t h e r w h i c h r e f l e c t s a g e n e r a l i n c r e a s e m
manufacturing activity.
A m o n g the u p p e r leathers, b u s i n e s s in b o t h
kid and calf has b e e n rather light this season, but there have recently
b e e n i n c r e a s e d s a l e s of l o w e r g r a d e k i d .
P a t e n t l e a t h e r w h i c h has had
t h e b e s t d e m a n d t h i s y e a r is n o w s o m e w h a t l e s s a c t i v e .
The export
x
- 20 -
-33S9
m a r k e t f o r u p p e r l e a t h e r s , h o w e v e r , has s h o w n a t e n d e n c y to b r o a d e n ,
p a r t i c u l a r l y i n r e s p e c t to t h e n u m b e r of c o u n t r i e s w h i c h a r e m a k i n g
purchases.
W e s t e r n shoe f a c t o r i e s c o n t i n u e a c t i v e , b u t the a v e r a g e d a i l y outp u t of N e w E n g l a n d f a c t o r i e s s h o w e d s o m e c u r t a i l m e n t d u r i n g M & r c h . T o t a l
o u t p u t of e i g h t m a n u f a c t u r e r s i n D i s t r i c t N o . 1 ( B o s t o n ) w a s o n l y 2 . 4
p e r c e n t g r e a t e r i n M a r c h t h a n i n F e b r u a r y , a n d t h e o u t p u t of s e v e n of
the r e p o r t i n g f i r m s showed a n a c t u a l d e c r e a s e .
P r o d u c t i o n of 45 m a n u -
facturers in District No. 3 (Philadelphia) was
14.J p e r c e n t m o r e than
i n F e b r u a r y a n d s h i p m e n t s ..*6re 3 8 > 5 p e r c e n t g r e a t e r .
N e w orders in-
c r e a s e d 6 - 5 p e r c e n t , b u t t h e t o t a l v o l u m e of u n f i l l e d o r d e r s d i m i n i s h e d
19-9 per cent.
B o t h w h o l e s a l e r s and retailers h e s i t a t e to m a k e p u r c h a s e s
e x c e p t f o r i m m e d i a t e r e q u i r e m e n t s o n a c c o u n t of f r e q u e n t s t y l e c h a n g e s Returns f r o m reporting firms i n District No. 7 (Chicago) indicate that
p r o d u c t i o n in M a r c h was 11.2 p e r cent greater than i n February; while
stocks decreased 10.1 p e r cent, shipments increased 15*2 p e r cent, and unfilled orders decreased 7*5 p e r cent.
S p o r t i n g s h o e s and e x t r e m e styles
h a v e the b e s t d e m a n d . F a c t o r y o p e r a t i o n in D i s t r i c t N o * 8 ( S t . L o u i s ) is
f r o m 8 0 t o 1 0 0 p e r c e n t of c a p a c i t y .
A large b u s i n e s s has b e e n d o n e in
that D i s t r i c t in E a s t e r g o o d s and s p e c i a l t i e s , a l t h o u g h the d e m a n d cont i n u e s to c e n t e r i n l o w p r i c e d s h o e s •
Orders hsve b e e n received in
s a t i s f a c t o r y v o l u m e i n A p r i l , b u t t h e r e h a s b e e n s o m e d e c r e a s e i n the
l e v e l of p r i c e s f o r f a l l l i n e s .
M2 u
1 ie
^
ment.
X-3389
luraoer s i t u a t i o n s h o w s a d e c i d e d a n d v e r y g e n e r a l i m p r o v e -
District No. 1 2 (San F r a n c i s c o ) reports that the industry is more
a c t i v e t h a n a t a n y t i m e s i n c e t h e b o o m p e r i o d i n t h e S p r i n g of 1 9 2 0 .
P r o d u c t i o n reported by 1 6 8 m i l l s i n four a s s o c i a t i o n s in the D i s t r i c t w a s
3 8 1 , 5 7 2 , 0 0 0 f e e t , a n i n c r e a s e of 1 4 . 8 p e r c e n t o v e r F e b r u a r y a n d of dO. 9
p e r cent over March, 1 9 2 1 .
Orders received totaled 4 6 7 , 3 4 6 , 0 0 0 feet, 3 3 . 3
p e r c e n t g r e a t e r t h a n l a s t m o n t h and 6 0 . 8 p e r c e n t g r e a t e r t h a n M a r c h l a s t
year.
T h e v o l u m e of o r d e r s r e c e i v e d w a s 2 2 . 4 p e r c e n t g r e a t e r t h a n a c t u a l
p r o d u c t i o n d u r i n g t h e m o n t h , a n d 1 1 . 2 p e r c e n t i n e x c e s s of s h i p m e n t s , a n d
r e p r e s e n t e d t h e l a r g e s t a m o u n t of n e w b u s i n e s s t o t a l e d i n a n y o n e m o n t h
since March, 1920.
S h i p m e n t s d u r i n g the m o n t h a m o u n t e d to 420,108, C O O feet,
as compared w i t h 3 ^ 7 , 6 6 0 , 0 0 0 fset i n February and 2 4 8 , 4 7 7 , 0 0 0 feet i n March
a year ago.
Higher prices for many varieties and grades have accompanied
increased p r o d u c t i o n and consumption.
The l o g g i n g industry n o longer is
h i n d e r e d by t h e w e a t h e r , and i s k e e p i n g p a c e w i t h t h e m i l l i n d u s t r y . O r d e r s
and s h i p m e n t s have increased from 2 4 j , 8 5 2 , W O and 2 3 8 , 3 3 2 , 7 8 8 feet for 1 1 2
v
t
z
m i l l s i n D i s t r i c t No. 6 ( A t l a n t a ) i n February to 3 0 5 , 6 5 1 , 4 5 5 and 2 9 7 , 1 3 4 , 2 1 5 /
for 1 1 8 m i l l s d u r i n g M a r c h .
Of 6 7 r e p o r t i n g m i l l s , 4 9 w e r e o p e r a t i n g f u l l
last
t i m e and o n l y o n e w a s s h u t d o w n .
Production increased from 266,202,470 feet /
month to 296,272,361 feet i n March.
In sharp c o n t r a s t t o l a s t m o n t h ' s
situation, District No. 11 (Dallas) reports a large increase i n p r o d u c t i o n
w h i c h was, however, 1 0 p e r cent below shipments.
Unfilled orders on hand
M a r c h 31 amounted to 5 9 , 1 5 6 , 3 ^ 6 feet as compared w i t h 5 1 , 0 7 0 , 4 6 1 feet on
February 28.
R e t a i l l u m b e r s a l e s at 701 y a r d s i n D i s t r i c t N o . 9 ( M i n n e a p o l i s )
w e r e m o r e t h a n t w i c e as great in M a r c h as in F e b r u a r y b u t 1 0 p e r cent l o w e r
than in March a y e a r ago.
O r d e r s a n d s h i p m e n t s of n i n e l u m b e r m a n u f a c t u r e r s
x-3389
-22-
increased from 7 , 7 1 0 , 0 0 0 and 6,261,119 feet in February to 4,623, 0 0 0 and
9,922,302 feet in March.
than last year.
Stocks declined during the month and were lower
District No. 8 (St. Louis) reports a brisk demand and a
strengthening of prices in materials used in industrial construction.
The
hardwood trade has benefited a little by activities of planing mills and
automobile factories but there is no progress toward price stabilization.
BUILDING:
N u m b e r of b u i l d i n g p e r m i t s i s s u e d , v a l u e of p e r m i t s i s s u e d ,
a n d v a l u e of c o n t r a c t s a w a r d e d a l l r e a c h e d n e w h i g h l e v e l s d u r i n g M a r c h .
Total value of permits issued in 1 6 6 selected cities amounted to $259,508,703
in March, as compared with $l4l, "J15,243 in February and $126,472, 03I in
March, 1 9 2 1 .
The value of permits issued was greater in March than in
either February, 1922, or March, 1 9 2 1 , i n each of the twelve Federal R e s e r v e
Districts.
Increases in March over February varied 4from 18 per cent in
District No. 1 ( B o s t o n ) to 18S per c e n t in District No. 9 M i n n e a p o l i s ) ,
w h i l e i n c r e a s e s over March, 1921, ranged from 8 p e r cent in D i s t r i c t No. 11
( D a l l a s ) to 2 3 8 p e r cent in D i s t r i c t No. 2 (New Y o r k ) .
T h e . b v a l u e of c o n t r a c t s a w a r d e d i n s e v e n F e d e r a l R e s e r v e D i s t r i c t s
( s t a t i s t i c s of w h i c h a r e c o m p i l e d b y t h e F. W . D o d g e C o m p a n y ) i n c r e a s e d f r o m
$161,438,750 in February to $ 2 6 4 , 6 5 1 , 1 6 5 in March.
r e c o r d e d i n e a c h of t h e s e v e n D i s t r i c t s .
L a r g e i n c r e a s e s .vere
T h e v a l u e of c o n t r a c t s a w a r d e d
f o r r e s i d e n t i a l p u r p o s e s i n t h e s e D i s t r i c t s a m o u n t e d t o $1-'- 2, 5 7 / > 397
M a r c h , a n i n c r e a s e of 5 7 p e r c e n t o v e r F e b r u a r y a n d of 1 0 0 p e r c e n t o v e r
March, 1921.
Reports from District No. 3 (Philadelphia) indicate a great expansion
i n b u i l d i n g o p e r a t i o n s , w h i c h i s p a r t i c u l a r l y n o t e w o r t h y i n t h e c a s e of
-23residential building.
X-3389
Operations in District No. 4 (Cleveland) h a v e
b e e n s o m e w h a t h a m p e r e d by s t r i k e s , but a r e n e v e r t h e l e s s s h o w i n g s t e a d y
growth.
A b u i l d i n g e x p o s i t i o n is to be held in C l e v e l a n d to s t i m u l a t e
t h e b u i l d i n g of h o m e s a n d t o a d v e r t i s e v a r i o u s t y p e s of h o u s e f u r n i s h i n g s .
In D i s t r i c t No. 5 ( R i c h m o n d ) new c o n s t r u c t i o n is s h o w i n g m o r e activity
than r e p a i r s and alterations, and a r c h i t e c t s and b u i l d e r s h a v e as m u c h
work as they can handle.
T h e v a l u e of b u i l d i n g p e r m i t s i n 1 9 of t h e 2 4
r e p o r t i n g cities in District No. 7 (Chicago) w a s over 1 0 0 p e r cent greater
than in February.
District No. 1 0 (Kansas C i t y ) r e p o r t s that t h e r e is
n o t o n l y u n p r e c e d e n t e d a c t i v i t y i n t h e e r e c t i o n of h o u s e s a n d a p a r t m e n t s ,
b u t a l s o g r e a t a c t i v i t y i n t h e e r e c t i o n of p u b l i c b u i l d i n g s a n d s c h o o l
buildings.
EMPLOYMENT. R e p o r t s r e c e i v e d b y t h e U n i t e d S t a t e s E m p l o y m e n t S e r v i c e
f o r t h e p e r i o d e n d i n g M a r c h 3 1 s h o w e d a n i n c r e a s e of 2 , 5 p e r c e n t i n n u m b e r s
employed as compared w i t h the p r e c e d i n g month.
The principal declines
occurred i n l e a t h e r and its finished p r o d u c t s and in t e x t i l e s .
Advances
were most pronounced in the groups comprising vehicles for land transportation, i r o n and steel, metal and m e t a l p r o d u c t s .
The direct and indirect
e f f e c t s of t h e c o a l s t r i k e u p o n e m p l o y m e n t w i l l , of c o u r s e , n o t b e a p p a r e n t
until the next reports are issued.
District No. 1 (Boston) reports that
n o t w i t h s t a n d i n g t h e c o n t i n u a n c e of t h e t e x t i l e s t r i k e , t h e " a c t u a l a m o u n t
of u n e m p l o y m e n t i n t h e c o t t o n m a n u f a c t u r i n g i n d u s t r y i s p r o b a b l y n o l a r g e r
t h a n at t h e b e g i n n i n g of A p r i l " .
I n t h e c e n t e r s of m a n u f a c t u r e f o r m e t a l
g o o d s , m a c h i n e r y a n d t o o l s s u c h a s Vv'aterbury, W o r c e s t e r , P r o v i d e n c e a n d
New Haven, there has been a steady upward movement in numbers employed.
I n N e w Y o r k S t a t e t h e r e w a s a n i n c r e a s e of 1 . 3 p e r c e n t i n n u m b e r s
employed in industrial establishments between February 15 and M a r c h
15 according to the reports received from the
New York State Department of Labor,
In District No. 3 (Philadelphia)
excluding 200,000 striking miners, employment conditions -also showed
continued improvement between March 15 and April 15,
There was a decrease
of 16.8 per cent in numbers unemployed in the six cities of Altoona, Harrisburg
Johnstown, Philadelphia, Scranton and Williamsport, tne number out of
work on the latter date being 181,310.
emphasizes the
the District,
District No. 5 (Richmond) likewise
very general inprovement in employment conditions throughout
The special inquiry regularly made into employment conditions
in District No* ? (Chicago) snows tnat 220 firms employing 117,983 persons
at thj end of March had on their pay rolls 3- 5 per cent more employees than
at the end of the preceding month, and practically the same number as a year
ago, the decrease amounting to only 0.1 per cent.
The increase in the total
payrolls of these reporting concerns was especially large, indicating that
many men already at work were getting back to full time schedules.
The
increase in the amount of the payrolls compared with the preceding month was
12*3 per cent*
Automobiles and accessories were reported to be employing
13 per cent more men than a year ago while tne monthly report from the
Employers' Association of Detroit snows an increase of 9.4 per cent during
the month
in numbers employed in manufacturing
transportation".
"vehicles for land
Iron and steel products, agricultural machinery and rail-
road equipment also show pronounced advances.
District No. 9 (Minneapolis)
reports a considerable increase in the seasonal demand for farm labor and
a^so notes that a considerable surplus of mining labor is being absorbed by
tne opening of tne copper and iron mines.
In District No. 10 (Kansas City)
lead and zinc mines and smelters "snow increased activity with larger numbers
-25-
of men at work".
X-3389
This is also true in the C o l o r a d o m e t a l m i n e s .
There
has b e e n a n increased, demand for l a b o r f o r f a r m w o r k a s w e l l a s f o r w o r k on
hignways and public improvement-
In D i s t r i c t No. 1 2 (San F r a n c i s c o )
agricultural and building operations and Highway construction have absorbed
c o n s i d e r a b l e n u m b e r s of the u n e m p l o y e d a n d the i n c r e a s i n g a c t i v i t y of the l e a d
a n d copper m i n e s of the District nas a l s o b e e n a f a v o r a b l e f a c t o r i n reducing
unemployment.
I n the P a c i f i c n o r t m / e s t , r e p o r t s f r o m ten p r i n c i p a l l u m b e r -
ing sections show 61,427 loggers a n d lumbermen employed on M a r c h 25 as
c o m p a r e d w i t h 60,697 on F e b r u a r y 1 5 and 55,426 on the same date a year ago.
" A c c o r d i n g t o r e l i a b l e a u t h o r i t i e s , e m p l o y m e n t i n t h e m e t a l i n d u s t r i e s of
C a l i f o r n i a (exclusive of snip b u i l d i n g ) i n c r e a s e d 19 p e r c e n t d u r i n g the
last two months.11
X-3389
-26-
M O L E S ALE T R A D E :
P e r c e n t a g e of i n c r e a s e (or d e c r e a s e ) i n n e t s a l e s i n
Inarch 1 9 2 2 a s c o m p a r e d w i t h t h e p r e c e d i n g m o n t h
(February 1922)
Groceries
Dry Goods
Hardware
;
Number
Number
Number
Disof Firms
of Firms:
of F i r m s
trict : P e r R e p o r t - :per
R e p o r t - -1 :Per
ReportNo. :centage ing
:centage ing
: centage ing
2
28.4
41
9.2
58.1
3
11
3
12.4
47
19.8
15
46.2
25
4
21.2
23
13. 5
33.1
13
12
13.9
5
46
16
19
23.2
34.0
6
18.4
29
29.2
16.6
22
21
7
27.6
35
60.7
8.4
9
15
31.7
9
59
74.9
-2.1
6
14
10
19.2
10
8
10. 0
51.4
8
11
12.3
12
-0.4
12. 6
13
12
12
21.1
21
32
24.8
23. 5
13
•
Boots & Shoes
:
Number
:
of F i r m s
:Per
Report:centage ing
67.3
8
17.9
48.0
56.6
-9.1
19
9
8
7
38.6
15
-17.4
8
•-24.2
-16.0
-23.4
-21.3
19
9
8
7
-21.4
15
P e r c e n t a g e of i n c r e a s e ( o r d e c r e a s e ) i n n e t s a l e s i n
M a r c h 1922 as compared w i t h M a r c h 1921
2
3
4
5
6
7
9
10
11
12
0.4
-17.4
-12.6
-10.1
-7,0
-10.1
-3. 9
-3.7
-9.2
-12.9
41
47
23
46
29
35
59
10
12
32
-14.3
-17. 5
-18.6
-18.0
-17.0
-9.9
-22,4
-0.1
-27.2
-2.1
3
15
13
16
21
6
8
12
13
9
-2. 0
-5. 6
-13.5
-23.0
-5. 6
-10.1
-20.6
-13.8
-18.6
-3.8
11
25
12
19
22
15
14
8
13
21
It i s d i f f i c u l t t o g e n e r a l i z e c o n c e r n i n g the v a r i a t i o n s i n t h e s a l e s
of r e p o r t i n g w h o l e s a l e f r i m s , for t w o reasons.
First, returns have been
a v a i l a b l e f o r o n l y a l i m i t e d n u m b e r of mont.os, a n d s e c o n d l y , t h e y c o v e r a
period during which violent price changes have occurred.
However, tne v e r y
pronounced and general advances in sales occurring i n M a r c h are undoubtedly
seasonal.
This will be evident wnen comparisons are made w i t h sales for
- 27 -
the same m o n t h a year ago.
W i t h due allowance for price declines the snow-
i n g is f a v o r a b l e b u t n o t u n u s u a l .
as h a v i n g interfered
southern Districts,
X-3389
Reports comment u p o n the bad w e a t h e r
somewhat w i t h retail trade, e s p e c i a l l y i n the
therjuy retarding purchases from wholesalers.
In
D i s t r i c t s No, 2 (Hew York) u u i No. 3 ( P h i l a d e l p h i a ) sales of b u i l d e r s h a r d ware resulting from an increase in building operations have Helped swell
the sales of hardware.
Collections on the whole in all reporting lines
a p p e a r to h a v e i m p r o v e d #
RETAIL TRADE:
R e t a i l s a l e s f o r M a r c n t h r o u g h o u t tne c o u n t r y s h o w e d
the e x p e c t e d s e a s o n a l i n c r e a s e w n e n c o m p a r e d w i t n t h o s e f o r F e b r u a r y , d u e
p a r t l y to t h e l o n g e r m o n t h , b u t t h e y w e r e n o t a s l a r g e a s f o r M a r c h , 1921*
A l l o w a n c e m u s t b e m a d e , h o w e v e r , f o r t h e d e c l i n e i n p r i c e s a n d the f a c t t h a t
E a s t e r came i n M a r c h l a s t year.
B e c a u s e of t h e l a t t e r c i r c u m s t a n c e , t h e
sales for the first three m o n t h s of the year c o m p a r e d u n f a v o r a b l y w i t h
t h o s e f o r the c o r r e s p o n d i n g p e r i o d l a s t year*
I n c o u n t r y d i s t r i c t s the
d e c l i n e i n t r a d e f r o m l a s t y e a r is a t t r i b u t e d p a r t l y to t h u b a d w e a t h e r a n d
m u d d y r o a d s , w h i l e i n c o a l m i n i n g c e n t e r s , the s t r i k e h a s a f f e c t e d b u s i n e s s ,
In the U n i t e d States as a w h o l e , however, t h e stores are b e g i n n i n g to fuel
the results of the i m p r o v e m e n t i n the employment situation.
M a r c h s a l e s f o r 4 4 6 s t o r e s i n t h e U n i t e d S t a t e s s h o w e d a d e c r e a s e of
1 4 . 5 p e r c e n t f r o m t h o s e of l a s t M a r c h ,
T h e f i g u r e s f o r D i s t r i c t No, 1 2
( S a n F r a n c i s c o ) a r e tne l e a s t u n f a v o r a b l e , a d e c r e a s e o f 6 * 2 p e r c e n t , w h i l e
i n D i s t r i c t N o . 6 ( A t l a n t a ) t r a d e s u f f e r e d a d e c r e a s e of 2 4 . 4 p e r c e n t .
At
the e n d o f M a r c h t h e s t o r e s h e l d l a r g e r s t o c k s t h a n t h e y d i d i n F e b r u a r y ,
as the E a s t e r buying had s c a r c e l y commenced-
A l l out three D i s t r i c t s show
X-5389
- 23 increases i n stocks on hand over tnose ^ald iUst March.
"
v.-"•*
Tne r a t i o of a v e r a g e
s t o c k s a t the e n d o f the f i r s t t h r e e m o n t h s t o a v e r a g e m o n t h l y s a l e s d u r i n g
the s a m e p e r i o d w a s 4 5 3 * 2 , s h o w i n g a b e t t e r r a t e o f t u r n o v e r t n a n w a s t h e
c a s e a m o n t n a g o , b u t c o m p a r i n g u n f a v o r a b l y w i t h t h a t f o r l a s t M a r c h . A t the
e n d of M a r c h t h e p e r c e n t a g e o f o u t s t a n d i n g o r d e r s to t o t a l p u r c h a s e s f o r 1 9 2 1
w a s l o w e r f o r a l l D i s t r i c t s t n a n at t h e e n d o f F e b r u a r y , w n i c h w o u l d s e e m to
indicate that the b u l k of the spring a n d summer goods had b e e n received b y the
e n d of M a r c h , o r t h a t t h e b u y e r s w e r e d e p e n d i n g u p o n f i l l - i n o r d e r s t o m e e t
the demands of the season.
PRICES. Whatever price cnanges nave occurred during April nave been
of v e r y s m a l l d i m e n s i o n s .
Ar-ong t n e a g r i c u l t u r a l c o m m o d i t i e s , w h e a t ,
c o r n a n d o a t s a v e r a g e d a b o u t o n e c e n t h i g n e r i n t h e f i r s t tiiree w e e k s of
April tnan in March.
O n t h e o t h e r h a n d , p r i c e s of c o t t o n , c a t t l e , h o g s
a n d m e a t p r o d u c t s w e r e a s h a d e l o w e r t h a n in M a r c h , a n d s n e e p p r i c e s d e c l i n e d n e a v i l y . I n t h e s o m e w a y , o n l y s m a l l cn_jiges o c c u r r e d i n t n e p r i c e s
of m o s t of tne l e a d i n g m e t a l s a n d coal a l t h o u g h p i g i r o n a d v a n c e d o n tne
a v e r a g e b e t w e e n 5 0 c e n t s a n d $ 1 . 0 0 a t o n , wiiile l e a d a d v a n c e d a b o u t 3/4tp
a pound.
Lumber prices were practically unchanged.
characterized manufactured goods also.
The same stability
The A m e r i c a n W o o l e n Company ad-
v a n c e d p r i c e s of c e r t a i n o'f t h e i r f a b r i c s s l i g h t l y , b u t w o o l e n a n d w o r s t e d
yarns nave been practically unchanged.
Cotton yarn prices have been
f r a c t i o n a l l y lower, w h i l e any r e d u c t i o n s w h i c h may h a v e o c c u r r e d in cloth
have been slight.
T h e F e d e r a l R e s e r v e B o a r d i n d e x of w h o l e s a l e p r i c e s f o r M a r c h
( r e v i s e d f i g u r e ) s t o o d at 1 4 7 a s c o m p a r e d w i t h 1 0 0 i n 1 9 1 3 -
T h i s «vas o n e
point higher t h a n the index for February. . Increases occurred in agricult u r a l c o m m o d i t i e s , p i g i r o n a n d c o k e a m o n g t h e raw m a t e r i a l s , a n d i n
- 29 -
x-3389
f
522
c o t t o n s e e d o i l , b u r l a p , c e r t a i n c h e m i c a l s , s u g a r a n d m e a t s a m o n g the
finished goods.
T h e r e w e r e d e c r e a s e s i n h i d e s , silic, c o a l , c o p p e r , a n d
tin; in c e r t a i n p e t r o l e u m and eteel products, rubber, b r i c k , and in a
c o n s i d e r a b l e n u m b e r of f o o d s t u f f s .
Otherwise commodity prices were
largely-
unchanged .
R e t a i l p r i c e s of f o o d d u r i n g M a r c h ivere s o m e w h a t l o w e r t h a n i n
F e b r u a r y , the i n d e x of t h e B u r e a u of L a b o r S t a t i s t i c s s t a n d i n g at 1 3 9
as c o m p a r e d w i t h l^j2 i n the e a r l i e r m o n t h .
M t e r a s e r i e s of d e c l i n e s c o n t i n u i n g , o v e r a p e r i o d of
FOREIGN TRADE
s e v e r a l m o n t h s , the f o r e i g n trade returns f o r M a r c h d i s c l & s e l a r g e inc r e a s e s i n t h e v a l u e of b o t h e x p o r t s a n d i m p o r t s .
The f o r m e r are re-
ported at $ 3 3 2 , 0 0 0 , C O O , w h i c h is larger than any m o n t h l y total since
l a s t O c t o b e r , a n d is n o t q u i t e 1 5 p e r c e n t b e l o v t h e f i g u r e f o r M a r c h ,
1 9 2 1 . T h e v a l u e of i m p o r t s i s g i v e n a s $ 2 5 8 , 0 0 0 , C O O i n M a r c h , s u r p a s s i n g
the amount f o r any single m o n t h since D e c e m b e r , 1 9 2 0 .
That these increases
i n v a l u e r e p r e s e n t a l s o t h e m o v e m e n t of g r e a t e r q u a n t i t i e s of g o o d s is i n d i c a t e d b y the F e d e r a l R e s e r v e B o a r d » s f o r e i g n trade i n d e x w h i c h in M a r c h
s t o o d at 1 0 J . 1 f o r e x p o r t s a n d at 1 9 5 * 7 f o r i m p o r t s , c o m p a r e d r e s p e c t i v e ly w i t h 82.6
and 1 S 3 - 4 in February, and w i t h 9 2 . 6 and 1 6 9 - 6 in March, 1921.
S o m e w h a t s i m i l a r c o n c l u s i o n s a r e w a r r a n t e d b y a c o n s i d e r a t i o n of t h e
t o n n a g e of A m e r i c a n o v e r s e a s c o m m e r c e as c o m p i l e d b y t h e U n i t e d S t a t e s
Shipping Board.
T h e s e f i g u r e s s h o w t h a t , e x c l u d i n g s h i p m e n t s of o i l i n
b u l k , t h e w e i g h t of o u r o v e r s e a s e x p o r t s i n M a r c h e x c e e d e d vbe w e i g h t of
s h i p m e n t s i n F e b r u a r y b y a b o u t 2 8 p e r c e n t , w h i l e at the s a n e t i m e i m p o r t s
increased approximately 6 p e r cent in weight.
If o i l s h i p m e n t s a r e i n -
c l u d e d , t h e g a i n i n t h e t o t a l t o n n e g e of o u r o v e r s e a s t r a d e , b o t h i n w a r d a n d
o u t w a r d , i s s h o w n t o h a v e b e e n a b o u t 2 3 p e r c e n t i n M a r c h as c o m p a r e d w i t h
February.
X-3390
F E D E R A L
R E S E R V E
B O A R D
STATEMENT FOR THE PRESS
For release in afternoon papers,
T u e s d a y , M a y g, 1 9 2 2 .
CONDITION OF THE ACCEPTANCE MARKET
The acceptance market d u r i n g the p a s t r e p o r t i n g p e r i o d h a s b e e n
marked w i t h d u l l n e s s and inactivity.
The d e m a n d f o r bills was light
b u t s t i l l w a s g r e a t e r t h a n the s u p p l y a v a i l a b l e i n m o s t d i s t r i c t s .
D i s t r i c t N o . 2 (New Y o r k ) a t t r i b u t e s the f u r t h e r d i m i n i s h e d v o l u m e
of t h e m a r k e t s u p p l y of a c c e p t a n c e s i n p r r t to the c o n t i n u e d t e n d e n c y
of E u r o p e a n p u r c h a s e r s of A m e r i c a n g o o d s to p r o v i d e s i g h t r a t h e r t h a n
t i m e c r e d i t , i n v i e w of t h e i n s t a b i l i t y of the e x c h a n g e s , w i t h the
r e s u l t a n t i n s t a b i l i t y of f o r e i g n p r i c e s of i m p o r t e d g o o d s a n d c o m m o d i ties.
D i s t r i c t N o . 3 ( P h i l a d e l p h i a ) n o t e s a s l i g h t i n c r e a s e i n the
v o l u m e of b i l l s a r i s i n g l a r g e l y f r o m t r a n s a c t i o n s i n f o r e i g n t r a d e .
The demand f o r bills in practically every district was light.
D i s t r i c t s No. 1 (Boston),and N o . 2 (New Y o r k ) , N o . 4 ( C l e v e l a n d ) all
state that there was a d e c r e a s e d d e m a n d f r o m c o u n t r y b a n k s and private
investors.
T h e s e , a c c o r i i n g to D i s t r i c t N o . 1 ( B o s t o n ) f o u n d conrrer-
c i a l p a p e r m o r e attractive to t h e i r n e e d s , while in D i s t r i c t No. 2
(New York) f u n d s were diverted to short-term government obligations
w h i c h w i t h their tax-exempt feature offered b e t t e r rates to d o m e s t i c
investors.
B e c a u s e of l o w r a t e s p r e v a i l i n g in the m o n e y m a r k e t ,
-
2
. x-3390
-
a c c e p t i n g "banks p r e f e r r e d t o c a r r y t h e i r o w n b i l l s .
This tendency
c o n t r a c t e d t h e a m o u n t of b i l l s i n t h e m a r k e t a n d c o n s e q u e n t l y t h e
h o l d i n g s of d e a l e r s d e c l i n e d i n m o s t d i s t r i c t s w i t h the e x c e p t i o n
of N o . 1 ( B o s t o n ) .
T h e s e surplus b i l l s w e r e m o v e d to the N e w
Y o r k m a r k e t T h e r e t h e y "ere a b s o r b e d .
R e p o r t s f r o m the p r i n c i p a l
accepting b a n k s in D i s t r i c t No. 12 (San F r a n c i s c o ) indicate a d e c r e a s e of 5 5 - 3 p e r c e n t i n t h e a m o u n t of a c c e p t a n c e s b o u g h t i n
M a r c h as c o m p a r e d w i t h
February.
There was n o sharply defined
demand for any particular maturity but bills with 90 day maturity
were favored,in most districts except in D i s t r i c t N o . 1 (New York)
w h e r e b i l l s of s h o r t e r m a t u r i t i e s w e r e p r e f e r r e d .
In District
N o . 1 1 ( D a l l a s ) t h e v o l u m e of o u t s t a n d i n g a c c e p t a n c e s d e c l i n e d
sharply.
T r e r e we.s i n c r e a s e d
activity in acceptances in Dis-
t r i c t N o . 1 0 ( K a n s a s C i t y ) w h e r e t h e h o l d i n g s of l o c a l b a n k s
expanded considerably.
- 3 -
x-3390
D e a l e r s f a t e s on p r i m e b i l l s in D i s t r i c t s No. 1 ( B o s t o n ,
No. 2 (New Y o r k ) and N o . J (Chicago):
District No. 1 (Boston)
Renge
Bid
Offered
60
31 - 4-1/8
3-3/8 - 4
Close
Bid
Offered
3-3/8
31
No. 2 (New Y o r k )
Bid
30 d a y m a t u r i t y
c
0
90
120
150
180
Close
Range during period
Offered
3£ - 4-1/ i
3-3/& - 4-l/s
Bid
Offered
3S
!!
1
1
3-3/S
n
i
t
32 - 3 - 5 / 8
3-3/8 - 3t
No. 4(Cleveland)
-3 id
Renee during period
Offered
30 day m a t u r i t y 3 s - 4-1/8
1
1
60
n
90
i
t
120
n
150
3„5/,5-4-3/8
i
f
II
180
3-3/8 - 4
3-3/5 - 4-l/s
I
I
Close
Bid
Offered
31
I
t
I
t
I
t
3- 5 / 8
!
1
3-3/8
11
1
1
I
I
3-3/8
No. 7 (Chicago)
Bid
30 day m a t u r i t y 4-1/8
gO "
"
r
nit
90 r
I
t
120
"
I
t
150
"
I
t
180
"
Range during period
Offered
- 3S
"
1
1
I
I
f
t
t
t
4 - 3-3/8
II
11
I
t
4-1/8 - 3-3/8
Bid
Close
Offered
J>2
I
t
I
I
3-3/8
31 - 3-5/8
3 - 3 / 8 - 31
II
G O L D
Federal
Reserve
Bank of
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas CityDallas
San Francisco
Total
Balance last
s tatement
Apr. 20, 1922.
$
Gold
Withdrawals
32,775*277.58 *
43,675,432.33
30,717,372.45
25,769,069.23
60,409,451.37
7,084,982.32
29,515,310.20
24,536,386.73
11,110,643,29
32,325,689.57 1
|$ 497,051,330.87 |$
Federal
Reserve
Bank of
14,148,456.84 | S
X-3391
Gold
—
Aggregate
Aggregate
withdrawals
deposits and
Deposits
and transfers
transfers from
to Agent's fund
Agent's fund
5 , 0 0 0 , 0 0 0 . 0 0 $ 10,72b,477.50 $
5,000,000.00 $
76,000.00
31,500,102.16
76,000.00
1, o c a , 1 0 0 . 0 0
895,400,00
1,001,100.00
2,000,250.00
2,000,250.00
4,377,9^4.50
2,500,040.00
6,109,944.50
2,500,040.00
902,518.42
12,724,878.64
11,020,806.26
18,724,878.64
1,500,000.00
1,500,000.00
839,477.50
4,000.00
4,000.00
523,375.00
3,000.00
545,100.00
3,000.00
706,050,00
4,004,300.00
1,001,221.00
5,286,300.00
28,813,568.64 j$
6 9 , 1 4 8 , 4 5 6 . 8 4 j$
Settlements from April 2 1 , 1 9 2 2 to April 2 7 , 1 9 2 2
inclusive.
Net
Debits
1,652,424.06
7, e o , 306.64
907,972.58
Boston
*
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
1,779,560.58
Minneapolis
2,441,951.38
Kansas City
Dallas
3,123,606.31
San Francisco
1,645,760.46
Total
|$ 1 9 # 3 8 1 , 5 8 2 . 4 1
726,477.50 $
1,500,102.16
895,400.00
4,377,984.50
1,109,944,50
902,518*42
1,020,806.26
839,477.50
523,375.00
545,100.00
706,050.00
1,001,221.00
FEDERAL RESERVE BOARD
S E T T L E M E N T
F U N D
Total
Debits
116,585,467.55
400,922,471.57
129,006,453.68
111,050,775.63
88,379,929.61
42,240,110.94
196,559,046.21
96,931,331.31
29,480,227.99
71,212,225.84
41,092,812.61
54.545,618.09
Total
Credits
$
$
114,933,043.49 $
393,092,164.93
128,098,480.70
117,405,413.85
92,493,477.47
45,%2,259.6o
201,419,325.28
95,151,770.73
27,0^8,276.61
72,043,194.44
37^969,206.30
52.899.857.63
|$ 1 , 3 7 8 , 0 0 6 , 4 7 1 . 0 3 ($ 1 , 3 7 8 , 0 0 6 , 4 7 1 . 0 3 ; $
30,095,568,64 j
|$
Balance in
fund at close
of business
Apr. 27, 1922.
Net
Credits
$
6,354,618.22
4,113,547.86
3,222,148.66
4,860,279.07
830,968.60
1 9 , 3 8 1 , 5 8 2 . 4 1 }$
24,396,376.02 $
94,203,801.59
56,871,232.43
47,652,336.05
32,221,015.81
28,088,699,47
68,973,802.82
7,965, 944.24
26,553,983.82
25,825,255.33
8,280,986.98
. 36,965,008.11
457,998,442.67 | $
-
T R A N S F E R S
Debits
1,000,000.00
9,000,000.00
$
Credits
1,000,000.00
1,000,000.00
2, 000,000.00
2,000,000.00
,
1,000,000.00
*,000,000.00
2,000,000.00
10,000,000.00 j 10,000,000.00
1$
Summary of changes in ownership of gold by banks through
transfers and settlements.
Decrease
2,652,424.06
16,830,306.64
$
Increase
)
92,027.02
6,354,638.22
5,113,5*7,**
3,222,148.66
2,441,951.38
2,123,606.31
1,830,968.60
»4,z>9. St
24, 048, 288, 39 | $ 24, 048, 868113
Ox
f e d e r a l
r e s e r v e
S u m m a r y of transactions for period ending Jbril 27, 1922.
Federal
Balance last
Gold
Gold
Reserve
statement
Agent at
Apr. 20, 1922.
Withdrawals
Deposits
Boston
||
<
110,000,000
1$
New York
|
371,000,000
1
Philadelphia
{
144,389,260
1
Cleveland
J
165,000,000
|
37,795,000
|
Atlanta
{
80,000,000
1
Chicago
|
338,644,500
1
|
63,800,000
|
2, 00C. 000 I
Minneapolis
J
16,000,000
)
Kansas City
j
40,360,000 ]
Dallas
|
10,000,000
X-3391a
Washington, D. C.
April 28. 1922.
Balance at
Total
close of
business
Deposits
Apr. 27, 1922.
(con; 'IDENTIAL )
Deposits
Total
through
transfers
Withdrawals
from bank
Withdrawals
for
transfers
to b a r k
6,000,000
St, Louis
fund
1
Richmond
agents'
San Francisco {
Total
-
1$
-
1$
1
—
H5
30,000,000
~
10,000,000
1
I
1$
10,000,000
|$
120, 000,000
30,000,000
-
I
401,000,000
144,389,260
J
165,000,000
3> 000,000 1
3,000,000
}
1
1,500,000
I
-
5,000,000
3,000,000
J
1
1,OCO, 0 0 0
1
42,795,000
1
81,500,000
J
10,000, 000
I
342,644,500
2,000,000
1
6,000, 000
1
1,500,000
1
63,300,000
1•
16,000,000
j
39,360,000
1
2, 000,000 1
8,000,000
1,500,000
10,000,000
1,500,000
{
I
**
"
2,000,000 j
1,000,000
1
195,298,500 I
1,572,287,260
1$
10,000,000
7,000,000
!
|$ 20,000,000 |$ 7,000,000
t
1,282,000
J
j$
1,282,000
}$ 55,000,000
8,232,000
)$
21,282,000
|
|$
187,016,500
& ,000,000
|$ 1 , 6 1 3 . 0 0 5 , 2 6 0
•^6|
Ol
to
X-3392
RECOMMENDATIONS O F THE FEDERAL ADVISORY COUNCIL TO THE FEDERAL RESERVE BOARD,
April 28, 1922.
TOPIC 1.
Should Federal Reserve Banks adopt w i t h respect to their
own transactions the policy recently adopted by the United States Treasury
of p a y i n g out g o l d a n d g o l d c e r t i f i c a t e s w i t h o u t r e s e r v a t i o n !
RECOMMENDATION:
T h e C o u n c i l i s of t h e o p i n i o n t h a t t h e r e i s n o n e c e s -
s i t y f o r t h e F e d e r a l R e s e r v e B a n k s p a y i n g out g o l d o r g o l d c e r t i f i c a t e s
without reservation in their transactions with member banks.
If, h o w e v e r ,
g o l d i s c a l l e d f o r by a m e m b e r b a n k it s h o u l d b e p r o v i d e d w i t h o u t a n y
question.
W e b e l i e v e it t o b e s o u n d p o l i c y f o r t h e F e d e r a l R e s e r v e B a n k s
t o b e t h e d e p o s i t o r i e s of t h e g o l d of t h e c o u n t r y .
T h e c o n c e n t r a t i o n of
t h e g o l d i n t h e b a n k s a n d t h e i s s u e of F e d e r a l R e s e r v e n o t e s a s t h e p r i n c i p a l
m e d i u m of c i r c u l a t i o n t h r o u g h o u t t h e c o u n t r y i s n o t to b e c o n s i d e r e d a w a r
measure.
It i s o n e of t h e f u n d a m e n t a l p r i n c i p l e s of m o n e t a r y r e f o r m t h a t
t h e g o l d of t h e c o u n t r y s h o u l d b e m o b i l i z e d i n t h e F e d e r a l R e s e r v e B a n k s .
W a r c o n d i t i o n s a r e so b e c l o u d e d at t h e m o m e n t t h a t it i s i m p o s s i b l e to
f o r e c a s t w h a t p r o p e r u s e m a y b e m a d e of o u r g o l d p o w e r .
Self interest would
d i c t a t e t h a t w e s h o u l d d o n o t h i n g w h i c h w o u l d i n t e r f e r e w i t h o u r a b i l i t y at
the p r o p e r m o m e n t to r e n d e r our m a x i m u m a s s i s t a n c e in r e s t o r i n g the e q u i l i b r i u m of t h e w o r l d .
I n t h e e v e n t of n e e d t h e c o u n t r y i s i n a m u c h s t r o n g e r
p o s i t i o n if t h e g o l d i s m o b i l i z e d i n t h e v a u l t s of t h e F e d e r a l R e s e r v e B a n k s
t h a n if it i s s c a t t e r e d a s a c i r c u l a t i n g m e d i u m i n t h e h a n d s of t h e p e o p l e .
T h e a r g u m e n t h a s b e e n m a d e i n f a v o r of t h e p a y m e n t of g o l d o r g o l d c e r t i f i - ,
c a t e s by F e d e r a l R e s e r v e B a n k s at t h i s t i m e t h a t it w o u l d r e d u c e t h e h i g h
-2-
X-3392
r e s e r v e s of t h e F e d e r a l R e s e r v e B a n k s , w h i c h h i g h r e s e r v e s h a v e b e e n
t h e s u b j e c t of u n j u s t c r i t i c i s m , a n d t h a t i t w o u l d a l s o c r e a t e a
s e c o n d a r y g o l d r e s e r v e i n t h e h a n d s of t h e p e o p l e .
T h e C o u n c i l i s of
t h e o p i n i o n t h a t b o t h of t h e s e a r g u m e n t s a r e of c o m p a r a t i v e l y s l i g h t
i m p o r t a n c e i n t h e f a c e of c o n d i t i o n s a s w e s e e t h e m .
T h e C o u n c i l i s g l a d t o l e a r n t h a t s i n c e t h e S e c r e t a r y of t h e
T r e a s u r y ' s l e t t e r of M a r c h 6 t h w a s s u b m i t t e d , a f u l l e x c h a n g e of v i e w s
has taken place between the Treasury, the Board and the Federal Reserve
Banks, from w h i c h a full u n d e r s t a n d i n g h a s r e s u l t e d c o n c e r n i n g the most
important points raised in the Secretary's letter.
The Council notes
w i t h g r e a t s a t i s f a c t i o n f r o m t h e S e c r e t a r y ' s l e t t e r of A p r i l 2 5 t h t h a t
a l l p a r t i e s n o w a g r e e t h a t u n d e r t h e p r o v i s i o n s of t h e F e d e r a l R e s e r v e
Act,the
f i n a l r e s p o n s i b i l i t y w i t h r e s p e c t t o t h e i r c o n d u c t of b u s i n e s s
a n d w i t h r e g a r d t o t h e i r g e n e r a l m e t h o d s of m a k i n g p a y m e n t s m u s t r e s t
w i t h t h e Federal R e s e r v e Banks, a c t i n g u n d e r the d i r e c t i o n and supervis i o n of t h e F e d e r a l R e s e r v e B o a r d .
This, however, does not prevent that
w h e n Federal Reserve Banks act as redemption agencies for the Treasury,
t a k i n g t h e p l a c e of s u b t r e a s u r i e s , t h e y m a y b e r e q u e s t e d t o m a k e p a y m e n t s
i n g o l d or g o l d c e r t i f i c a t e s i n r e d e m p t i o n of t h e G o v e r n m e n t ' s o b l i g a t i o n s .
M o r e o v e r , a s a l r e a d y s t a t e d , t h e g e n e r a l p o l i c y s h o u l d b e a d o p t e d by t h e m
n e v e r t o r e f u s e t o m a k e p a y m e n t s i n g o l d i n t h e d i s c h a r g e of t h e i r o w n
obligations w h e n e v e r a payee m a k e s a particular request for such gold
payment.
T h e F e d e r a l R e s e r v e A c t p r o v i d e d f o r t h e g r a d u a l e l i m i n a t i o n of
s u b - t r e a s u r i e s a n d f o r t h e u n d e r t a k i n g of f i s c a l a g e n c y f u n c t i o n s b y t h e
Federal Reserve Banks.
T h i s o b v i o u s l y b r i n g s a b o u t t h e n e c e s s i t y of
f 530
*
X-3392
-34 e v i s i n g w a y s a n d m e a n s of d o i n g j u s t i c e t o t h e r e q u i r e m e n t s of
t h e T r e a s u r y w i t h o u t a f f e c t i n g t h e a u t o n o m y of t h e F e d e r a l R e s e r v e
S y s t e m and c r e a t i n g the d a n g e r s and d e f e c t s w h i c h m a y r e s u l t f r o m
a d i v i s i o n of a u t h o r i t y a n d c o n t r o l .
It w a s w i t h t h e s e c o n d i t i o n s i n v i e w t h a t t h e F e d e r a l R e s e r v e
A c t m a d e t h e S e c r e t a r y of t h e T r e a s u r y a n e x o f f i c i o m e m b e r a n d
C h a i r m a n of t h e B o a r d , so t h a t t h r o u g h t h e B o a r d a s a j o i n t i n s t r u m e n t ,
w i t h the Secretary's cooperation and in full understanding w i t h him,
p o l i c i e s a n d p l a n s of a c t i o n c o u l d b e d e v i s e d w h i c h w o u l d b e s t s e r v e
t h e i n t e r e s t s of b o t h t h e T r e a s u r y a n d t h e F e d e r a l R e s e r v e S y s t e m ,
and w h i c h w o u l d t h e n be carried into effect t h r o u g h t h e joint instrum e n t a l i t y of t h e F e d e r a l R e s e r v e B o a r d .
The Council is glad to note
t h a t t h e S e c r e t a r y ' s l e t t e r of A p r i l 2 $ t h a u g u r s w e l l f o r a f r u i t f u l
cooperation on these lines.
TOPIC 2.
I n o r d e r t o m a k e s o m e h e a d w a y i n t h e m a t t e r of r e t i r i n g
n a t i o n a l b a n k n o t e c i r c u l a t i o n , w o u l d it b e a d v i s a b l e f o r t h e F e d e r a l
*
R e s e r v e B a n k s t o a d o p t t h e p o l i c y of f o r w a r d i n g a l l n a t i o n a l b a n k
n o t e s received by them, w h e t h e r for d e p o s i t or redemption, t o the
T r e a s u r e r o f t h e U n i t e d S t a t e s f o r r e d e m p t i o n , t h u s m a k i n g it m u c h
m o r e d i f f i c u l t f o r n a t i o n a l b a n k s t o m a i n t a i n t h e i r ^ c i r c u l a t i o n and
tending to make the profit disappear, in w h i c h event the premium on
circulation bonds would correspondingly tend to disappear; and the
Federal Reserve B a n k s might then be in a b e t t e r p o s i t i o n to acquire
t h e c i r c u l a t i o n b o n d s a n d g r a d u a l l y a c c o m p l i s h t h e r e t i r e m e n t of
national bank notes.
- 4 RECOMMEND/TION:
X-3392
'
T h e C o u n c i l i s of t h e o p i n i o n t h a t t h e F e d e r a l R e s e r v e
B a n k s should not adopt a p o l i c y w h i c h w o u l d tend to f o r c e the retirement
of c i r c u l a t i o n n o t e s of n a t i o n a l b a n k s by m a k i n g t h e i r i s s u e u n p r o f i t a b l e .
ADDITIONAL RECOMMEND/TIONS:
RECOMMENDATION 3 "
•
I n answer to inquiry from the Federal R e s e r v e Board
t h e F e d e r a l A d v i s o r y C o u n c i l w o u l d s t a t e i t i s of t h e o p i n i o n t h a t n o F e d e r a l
R e s e r v e ^ B a n k s h o u l d b e p e r m i t t e d to r e f u s e t o a c c e p t n a t i o n a l b a n k n o t e s
f o r d e p o s i t , a s w e b e l i e v e t h a t so l o n g a s n a t i o r a l b a n k n o t e s a r e o u t standing they should remain on a parity w i t h the other c i r c u l a t i n g m e d i a
and it is t h e r e f o r e e s s e n t i a l that n o d i s c r i m i n a t i o n a g a i n s t t h e m be m a d e
by Federal Reserve Banks.
R E C O M M E N D A T I O N 4:
The Council r e c o m m e n d s that t h e F e d e r a l R e s e r v e B o a r d
p e r m i t Federal R e s e r v e Banks to p u r c h a s e in the open market, trade accepta n c e s b e a r i n g t h e e n d o r s e m e n t of a t h i r d n a m e i n t h e s a m e m a n n e r a s i s r e q u i r e d b y t h e ' B o a r d i n t h e p u r c h a s e of b a n k e r s a c c e p t a n c e s u n d e r S e c t i o n
1 4 of t h e F e d e r a l R e s e r v e A c t .
RECOMMENDATION 5:
The F e d e r a l Reserve Board h a s b e e n asked to amend
R e g u l a t i o n D, S e r i e s of 1 9 2 0 , so a s t o s a n c t i o n t h e m e t h o d s of t r e a t i n g
as time or savings deposits, d e p o s i t s w h i c h i n p r a c t i c e a r e p a y a b l e on
demand.
T h e C o u n c i l e x p r e s s e s i t s e l f a s o p p o s e d t o a n y m o d i f i c a t i o n of
this Regulation w h i c h might tend to serve as a subterfuge in order to secure
lower reserve requirements.
RECOMMENDATION 6:
I n v i e w of t h e v e r y l a r g e s u r p l u s e a r n e d b y t h e
F e d e r a l R e s e r v e B a n k s i n t h e p a s t s e v e r a l y e a r s , t h e C o u n c i l , w h i l e not
p a s s i n g u p o n t h e l e g a l a s p e c t of t h e q u e s t i o n , b u t s o l e l y f r o m t h e s t a n d p o i n t of e q u i t y a n d s o u n d b a n k i n g p o l i c y , i s of t h e o p i n i o n t h a t it w o u l d
b e p r o p e r a t t h i s t i m e f o r t h e F e d e r a l R e s e r v e B a n k s t o c o n t i n u e p a y m e n t of
d i v i d e n d s f r o m s u r p l u s , e v e n t h o u g h not c u r r e n t l y e a r n e d , p a r t i c u l a r l y a s t h e
m a x i m u m rate is 6 $ p e r annum and such d i v i d e n d s are c u m u l a t i v e .
• /"•»
•f J
v
R E C O M M E N D A T I O N 7;
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T h e C o u n c i l a p p r o v e s the p r i n c i p l e i n v o l v e d in Senate
B i l l 3255, p r o v i d i n g for the extension of charters of n a t i o n a l banks.
R E C O M M E N D A T I O N 8:
T h e C o u n c i l s u g g e s t s to the F e d e r a l R e s e r v e B o a r d
the
i m p o r t a n c e of p u r s u i n g a c a m p a i g n of e d u c a t i o n of the p u b l i c r e g a r d i n g the
f u n c t i o n s a n d o p e r a t i o n s of t h e F e d e r a l R e s e r v e S y s t e m .
R E C O M M E N D A T I O N 9:
The C o u n c i l has r e a d w i t h i n t e r e s t the l e t t e r of the
S e c r e t a r y o f t h e T r e a s u r y to t h e G o v e r n o r o f t h e F e d e r a l R e s e r v e B o a r d d a t e d
A p r i l 25, 1922, relative to investments of Federal R e s e r v e Banks, in w h i c h
the S e c r e t a r y r e q u e s t e d the c o n s i d e r a t i o n of t h e s u b j e c t b y t h e F e d e r a l
Advisory Council.
The C o u n c i l congratulates tne c o u n t r y u p o n enjoying a f i n a n c i a l
a d m i n i s t r a t i o n w h i c h takes t h e e n l i g h t e n e d p o i n t of v i e w that the F e d e r a l
R e s e r v e S y s t e m s h o u l d n o t be u s e d for the p u r p o s e of c a r r y i n g the G o v e r n m e n t ' s
obligations.
M a n y c o u n t r i e s i n E u r o p e w o u l d n a v e b e e n s a v e d f r o m s o m e of
their m o s t s e r i o u s f i n a n c i a l d i f f i c u l t i e s , if e q u a l w i s d o m h a d g o v e r n e d their
policies.
The C o u n c i l is a l s o i n s y m p a t h y w i t h the p o i n t of v i e w e x p r e s s e d b y the
S e c r e t a r y of the T r e a s u r y that the F e d e r a l R e s e r v e B a n k s s n o u l d a v o i d e x c e s s i v e
i n v e s t m e n t s i n G o v e r n m e n t securities, even of a short maturity.
The C o u n c i l
is f u l l y i n a c c o r d w i t h the v i e w s i m p l i e d that the F e d e r a l R e s e r v e B a n k s
should b y preference seek investments in the fields of such bills of exchange
as t h e y can purchase i n the open market.
T h e C o u n c i l is of the view, h o w e v e r , that the p a r t i c u l a r c i r c u m s t a n c e s
prevailing at present must be borne in mind, especially the present h i g h
p e r c e n t a g e of r e s e r v e s of tne System.
-
b
~
X-3392
M o r e o v e r , i f t h e F e d e r a l R e s e r v e B a n k s should, e n t i r e l y l i q u i d a t e t h e i r
holdings of Government obligations, they would thereby lose all p o w e r
of i n f l u e n c e on the banking situation of the country, in c a s e excessive
ease of m o n e y should develop, threatening a new era of inflation.
I n s u c h t i m e s , i t is o f t h e u t m o s t i m p o r t a n c e t h a t t h e F e d e r a l R e s e r v e
S y s t e m s h o u l d b e a b l e to dispose of its h o l d i n g s , t h e r e b y t h r o w i n g
the b u r d e n o n the m e m b e r bunks a n d taus exercising a r e s t r a i n i n g influence.
The f l o a t i n g s u p p l y of bills at p r e s e n t is e x t r e m e l y l i m i t e d .
A g g r e s s i v e b u y i n g of a c c e p t a n c e s w o u l d , n o d o u b t , t e n d f u r t h e r to r e d u c e
t h e r a t e a t w n i c h t h e s e a c c e p t a n c e s c o u l d b e b o u g h t , a n d it m i g h t
d e s t r o y to a c e r t a i n extent at least the distribution of acceptances
a m o n g a l a r g e p a r t of b u y e r s - t n e s o - c a l l e d a c c e p t a n c e m a r k e t - w n i c h
has been built u p w i t h no little effort.
W h i l e the Council believes at the same time that the Federal .
Reserve S y s t e m w o u l d be w e l l advised in making efforts to increase its
h o l d i n g s of a c c e p t a n c e s , t h e r e is n o d o u b t t h a t the F e d e r a l R e s e r v e
Banks as a whole c a n not avoid at this time, f o r the reasons above
explained, investing v e r y substantial amounts either in Government
Bonds, Certificates of Indebtedness, or warrants.
Of these three,
n o doubt, the short term Treasury Certificates are the m o s t suitable
as investments for the Federal Reserve Banks.
Bearing i n m i n d that
t h e c a p i t a l a n d s u r p l u s o f the c o m b i n e d F e d e r a l R e s e r v e B a n k s a m o u n t
-?-
X-3392
to a p p r o x i m a t e l y $ 3 0 0 , C O O > 0 0 0 , the C o u n c i l d o e s n o t f e e l t h a t t h e r e
i s j u s t c a u s e to c r i t i c i s e the F e d e r a l R e s e r v e B a n k s f o r h a v i n g
invested in Treasury Certificates and short term Government o b l i g e
t i o n s u p to a n a m o u n t w h i c h i s n o t l a r g e l y i n e x c e s s of t h e i r c a p i t a l
and s u r p l u s , and w h i c h , c o n s i d e r i n g the a m o u n t of t h e i r a s s e t s ,
c o n s t i t u t e s o n l y a s m a l l p a r t of t h e i r r e s o u r c e s .
T h e C o u n c i l i s s t i l l of t h e o p i n i o n t h a t t h e F e d e r a l R e s e r v e
B a n k s s h o u l d a v o i d i n v e s t i n g i n long t e r m G o v e r n m e n t "bonds.
The
C o u n c i l f u r t h e r u r g e s the F e d e r a l R e s e r v e B a n k s w h e n m a k i n g a n y
p u r c h a s e s of s h o r t t e r m G o v e r n m e n t o b l i g a t i o n s , t h a t s u c h p u r c h a s e s
should not interfere with Treasury operations.
I n g i v i n g t h i s v i e w , t h e C o u n c i l i s i n n o w a y m o v e d "by a n y
c o n s i d e r a t i o n of e a r n i n g s of t h e F e d e r a l R e s e r v e B a n k s , b u t s t a n d s
e n t i r e l y b y t h e o p i n i o n e x p r e s s e d i n i t s r e s o l u t i o n of N o v e m b e r . 2 1 ,
1921, as f o l l o w s :
" T h e B o a r d b r o u g h t t o t h e a t t e n t i o n of t h e C o u n c i l t h e
m a t t e r of t h e i n c r e a s e i n t h e r e s e r v e s of t h e F e d e r a l R e s e r v e
B a n k s , a n d t h e a p p a r e n t a p p r o a c h of t h e t i m e w h e n , a s a r e s u l t
o f t h e l i q u i d a t i o n of b o r r o w i n g s b y m e m b e r b a n k s , t h e F e d e r a l
Reserve Banks will be seeking investment f o r their idle funds T h e B o p r d r e q u e s t e d the C o u n c i l ' s o p i n i o n as to the w i s d o m
of t h e F e d e r a l R e s e r v e B a n k s ' i n v e s t i n g t h e s e f u n d s i n U n i t e d
States Government bonds.
"The C o u n c i l s t a t e d that it is n e t d i s t u r b e d b y the f a c t
that the e a r n i n g s of the F e d e r a l R e s e r v e B a n k s are d e c r e a s i n g
b e c a u s e of t h e a c c u m u l a t i o n of i d l e f u n d s . T h e F e d e r a l R e s e r v e
B a n k s w e r e n o t c r e a t e d for p r o f i t and the C o u n c i l is m i n d f u l
of t h e f a c t t h a t , a s p->st e x p e r i e n c e h a s s h o w n , t i m e s of
t e m p o r a r y i d l e n e s s of f u n d s a r e b o u n d t o b e f o l l o w e d b y p e r i o d s
of g r e a t e r d e m a n d s f o r m o n e y , b e t h e y s e a s o n a l o r e m e r g e n c y
requirements.
X-3352
" W h e n e v e r it m a y a p p e a r n e c e s s a r y f o r F e d e r a l R e s e r v e
B a n k s to s e e k i n v e s t m e n t s i n t h e o p e n m a r k e t , the C o u n c i l
w o u l d r e c o m m e n d that p r e f e r e n c e b e g i v e n to o b l i g a t i o n s
such as:
1. Bankers Acceptances.
2 . U n i t e d S t a t e s C e r t i f i c a t e s of I n d e b t e d n e s s .
3« S u c h s h o r t t e r m S t a t e a n d M u n i c i p a l o b l i g a t i o n s
as are p e r m i t t e d b y the F e d e r a l R e s e r v e A c t . "
R E C O W E N D AT I O N 1 0 .
T h e C o u n c i l n o t e s w i t h g r e a t s a t i s f a c t i o n the
r e c e n t r u l i n g of t h e F e d e r a l R e s e r v e B o a r d i n r e l a t i o n t o b a n k e r s
a c c e p t a n c e s , i n h a r m o n y w i t h R e c o m m e n d a t i o n N o . 11 of t h e F e d e r a l
A d v i s o r y C o u n c i l , d a t e d M a y 1J, 1 9 2 1 .
R E C O M M E N D A T I O N 11.
Excessive borrowings.
In the j u d g m e n t of
C o u n c i l , t h e m o s t e f f e c t i v e w a y t o h a n d l e t h e s i t u a t i o n is b y t h e
p e r s o n a l i n f l u e n c e of t h e G o v e r n o r of e a c h F e d e r a l R e s e r v e B a n k o n
t h e m e m b e r b a n k s b o r r o w i n g to e x c e s s .
CONFIDENTIAL
For officials of
Treasury Department, Federal R e s e r v e B o a r d , and
Federal Reserve Banks.
-
x-3393
CURRENCY DISTRIBUTION AND PAYMENT
POLICY FOR FEDERAL RESERVE
BANKS
The committee on currency supply and distribution, w i t h members h i p r e p r e s e n t i n g t h e T r e a s u r y a n d t h e F e d e r a l R e s e r v e B o a r d , at
a m e e t i n g i n t h e O f f i c e o f t h e C o m m i s s i o n e r o f t h e P u b l i c D e b t , in
March, 1922, w i t h representation from Federal R e s e r v e Banks present
in a c c o r d a n c e w i t h a m i n u t e a d o p t e d by the c o n f e r e n c e of G o v e r n o r s
of the F e d e r a l R e s e r v e B a n k s h e l d in W a s h i n g t o n in O c t o b e r , 1921,
a d o p t e d three specific r e c o m m e n d a t i o n s . T h e S e c r e t a r y of t h e T r e a s u r y
and the F e d d r a l R e s e r v e B o a r d h a v e c o n s i d e r e d these r e c o m m e n d a t i o n s
and, after a further conference with the c o m m i t t e e a n 4 after further
s t u d y of the w h o l e c u r r e n c y situation, h a v e a g r e e d u p o n the f o l l o w i n g
p r o g r a m w h i c h it i s b e l i e v e d w i l l f u r t h e r t h e e f f e c t i v e , s o u n d , a n d
economical distribution of currency through t h e F e d e r a l R e s e r v e Banks.
I n o r d e r , h o w e v e r , t h a t t h e e x e c u t i o n o f t h e p r o g r a m w i l l a t t a i n its
m a x i m u m g o o d , it i s n e c e s s a r y t h a t e a c h F e d e r a l R e s e r v e B a n k a g r e e to
a d o p t a n d u n i f o r m l y c a r r y out t h e p r o c e d u r e or p o l i c i e s o u t l i n e d h e r e i n .
They are:
1.
STANDARDS OF FITNESS OF CURRENCY.
P a p e r currency t e n d e r e d for r e d e m p t i o n in order to b e classed
a s f i t f o r f u r t h e r c i r c u l a t i o n m u s t b e f a i r l y c l e a n so t h a t i t s c l a s s ,
denomination and genuineness can be determined without
difficulty, and
m a s t c o n t a i n a s u f f i c i e n t a m o u n t o f " l i f e " o r " s i z i n g " to p e r m i t its
being handled with facility.
It s h o u l d n o t c o n t a i n h e a v y c r e a s e s w h i c h
r
»' '
<:
x-3393
-
2
-
b r e a k t h e f i b r e o f t h e p a p e r and. i n d i c a t e t h a t d i s i n t e g r a t i o n h a s b e g u n .
A fit n o t e w h e n h e l d by ® n e e n d in one h a n d and p r e s s e d into a slightly concave shape lengthwise should sustain itself substantially on a
l i n e w i t h t h e h a n d . It s h o u l d n o t p r e s e n t a l i m p o r r a g l i k e a p p e a r ance.
If a n o t e h a s r e t a i n e d a fair amount of the o r i g i n a l s t r e n g t h
o r " s i z i n g " , it i s f i t u n l e s s i t is so b a d l y s o i l e d a s t o b e o f f e n s i v e , or is torn, p e r f o r a t e d or o t h e r w i s e m u t i l a t e d .
Mere creasing
or wrinkling that h a s not b r o k e n n o r seriously weakened the n o t e does
n o t m a k e it u n f i t .
S o - c a l l e d "dog e a r s " or b e n t c o r n e r s do n o t render
notes unfit.
j(a)
(b)
•
T h e standard of fitness defined a b o v e shall a p p l y to
all forms and denominations of circulating currency.
Test examinations of each kind a n d each d e n o m i n a t i o n
of paper currency presented for redemption by each
Federal Reserve B a n k will be made under the general
s u p e r v i s i o n of the T r e a s u r y a n d F e d e r a l R e s e r v e B o a r d
Currency Committee, and the results of such examinations
w i l l b e r e p o r t e d at t h e e n d o f e a c h m o n t h to t h e F e d e r a l
R e s e r v e Board for the information a n d guidance of Federal
Reserve Banks.
n
- methods of distribution
I n order that the standards of f i t n e s s in the c i r c u l a t i o n
outstanding in the several Federal Reserve Districts shall be as nearly
u n i f o r m as p o s s i b l e , a n d in order that there m a y b e a u n i f o r m p o l i c y
i n a l l d i s t r i c t s a s t o the d i f f e r e n t k i n d s o f c u r r e n c y t o b e p u t i n t o
circulation, new currency should be distributed through the Federal Reserve B a n k s a n d n o t direct from the Treasury except for p u r e l y local
needs.
"
VAS I
. ' .
x-3393
- 3 HI-
ORDER OF P A Y M E N T O F DIFFERENT EI EDS OF CURRENCY
F e d e r a l R e s e r v e B a n k s , in m a k i n g p a y m e n t s of c u r r e n c y ,
should, d i s t r i b u t e c u r r e n c y i n t h e f o l l o w i n g o r d e r o f p r e f e r e n c e J
fa) 5*s and over*
(l) N a t i o n a l b a n k n o t e s
(3) Federal Reserve Bank notes
(3) S i l v e r Certificates
U . S. Notes (Legal Tenders)
(5) F e d e r a l R e s e r v e n o t e s
(6) Gold C e r t i f i c a t e s
(b) l's and 2's
(1) F e d e r a l R e s e r v e B a n k n o t e s
(2) Silver Certificates
(3) U . S . N o t e s ( L e g a l T e n d e r s )
* N 6 t e S i n c e the m a x i m u m d e n o m i n a t i o n of n a t i o n a l b a n k n o t e s , silver
c e r t i f i c a t e s a n d l e g a l t e n d e r s is $ 1 , 0 0 0 , p a y m e n t s i n d e n o m i n a t i o n s
h i g h e r than that a m o u n t m a s t b e m a d e in F e d e r a l R e s e r v e n o t e s a n d G o l d
certificates, in the order n a m e d .
IV. N A T I O N A L B A N K N O T E S
W h i l e it is b e l i e v e d t h a t n a t i o n a l b a n k c i r c u l a t i o n u l t i m a t e l y
w i l l b e e l i m i n a t e d e n t i r e l y , it is f e l t t h a t t h i s m a y b e a c c o m p l i s h e d o n l y
through Congressional action and not otherwise.
Meanwhile,Federal Reserve Banks should not discriminate against
t h e n a t i o n a l b a n k c u r r e n c y , w h e t h e r f i t o r u n f i t , e i t h e r i n r e s p e c t to i t s
r e c e i p t for d e p o s i t or in r e s p e c t to its s h i p m e n t to the T r e a s u r y for redemption. T h e standard of f i t n e s s p r e s c r i b e d i n p a r a g r a p h I. must apply
equally to n a t i o n a l b a n k currency and a l l other forms of currency.
x-3393
V, SILVER CERTIFICATES.
It h a s b e e n e s t i m a t e d t h a t t h e n o r m a l r e q u i r e m e n t s f o r t h e
$1 a n d $ 2 denominations of currency approximate $400,000,000.
It i s
b e l i e v e d t h a t s o f > r a s is l e g a l l y p o s s i b l e Unifced S t a t e s c u r r e n c y o f
these denominations should consist of silver certificates, any excess
of d e m a n d o v e r s u p p l y b e i n g f i l l e d b y t h e issue of U n i t e d S t a t e s n o t e s
(legal tenders) rather than a n y other form of currency.
VI.
U N I T E D STATES NOTES (Legal T e n d e r s )
It is b e l i e v e d t h a t t h i s f o r m of c u r r e n c y m a y b e e l i m i n a t e d
a t some g p r o p r i a t e time in the future but that u n t i l e l i m i n a t e d it
should b e the policy of the Treasury to confine the printing a n d circ u l a t i o n o f U n i t e d S t a t e s n o t e s to t h e d e n o m i n a t i o n s o f $ 1 , $ 2 , $ 5 ,
and $10, w i t h preference for the $1 a n d $2 denominations, a s m a y b e
required.
VII. FEDERAL RESERVE B A N K NOTES
In v i e w of the fact that the present p r o g r a m of t h e T r e a s u r y
c o n t e m p l a t e s a r e t i r e m e n t , w i t h i n the n e a r f u t u r e , of a l l P i t t m a n A c t
certificates against w h i c h Federal Reserve B a n k n o t e s a r e issued, all
Federal R e s e r v e B a n k s should p a y out a n y s u c h b a n k n o t e s o n h a n d in
o r d e r to use t h e m u p a n d h a v e t h e m p e r m a n e n t l y r e t i r e d d u r i n g t h e p e r i o d
w h e n t h e T r e a s u r y is p a y i n g o f f t h e c e r t i f i c a t e s .
Neither the Federal Reserve Banks nor the Federal Reserve
Board should place any more orders for the printing of Federal Reserve
Bank notes.
* 1
-5-
X-3393
VIII. PRINTING PROGRAM (Federal Reserve N o t e s )
(a) Standing agreement - E a c h Federal Reserve B a n k should
advise the Federal ReserveBoard of the amounts of
F e d e r a l R e s e r v e n o t e s i n e a c h d e n o m i n a t i o n t h a t it
desires to h a v e in its r e s e r v e s t o c k of u n i s s u e d
n o t e s , s p e c i f y i n g h o w ranch o f e a c h d e n o m i n a t i o n is
to b e h e l d i n W a s h i n g t o n . O r d e r s f o r p r i n t i n g o f
F e d e r a l R e s e r v e notes should b e a u t o m a t i c , so that
any deficiency in the a g r e e d W a s h i n g t o n stock of
a n y d e n o m i n a t i o n should b e tantamount to a n order
t o p r i n t s u f f i c i e n t a m o u n t s to b r i n g t h a t s t o c k u p
to the agreed minimum.
(b) Manufacturing p r o g r a m for 1922. In order, however,
to f a c i l i t a t e the m a n u f a c t u r i n g p r o g r a m of t h e
Bureau of Engraving and Printing, each Federal Res e r v e B a n k should, b e f o r e J u n e 1, 1922, e s t i m a t e
and advise the F e d e r a l ReserveBoard of the amounts
of each denomination of Federal Reserve notes that
it w i l l r e q u i s i t i o n f r o m W a s h i n g t o n d u r i n g t h e r e m a i n d e r of the calendar y e a r . W i t h s u c h e s t i m a t e s
at h a n d , the F e d e r a l R e s e r v e B o a r d w i l l p l a c e o r d e r s
to h a v e p r i n t e d f o r e a c h b a n k e a c h m o n t h t h e p r o p e r
p r o p o r t i o n of the amounts of each d e n o m i n a t i o n w h i c h
t h e b a n k e s t i m a t e s it w i l l w i t h d r a w f r o m t h e W a s h ington reserve stock during the balance of the year.
If at a n y t i m e d u r i n g t h e r e m a i n d e r o f t h e y e a r , a
F e d e r a l R e s e r v e B a n k f i n d s it n e c e s s a r y t o i n c r e a s e
o r d e c r e a s e i t s e s t i m a t e s it s h o u l d s o a d v i s e t h e
Board by telegram on the last business day of any
month,stating the amount of each denomination which
it e x p e c t s t o w i t h d r a w f r o m t h e W a s h i n g t o n r e s e r v e
s t o c k d u r i n g the r e m a i n i n g m o n t h s of t h e y e a r . T h e
Board will then adjust printing orders accordingly.
A l t h o u g h this program may result in a t e m p o r a r y increase in the r e s e r v e s t o c k of some of t h e b a n k s
o v e r a n d a b o v e t h e f i x e d m i n i m u m f i g u r e , it w i l l
accomplish a n orderly operation of the printing
p r o c e s s f o r t h e b a l a n c e of t h e y e a r , a n d w i l l l e a v e
each Federal Reserve Bank with its agreed minimum
reserve stock of n o t e s at the end of t h e calendar
year. (This p l a n supersedes the Federal Reserve
Board's letter X-33SI of April 11, 1922).
IX.
DISTRIBUTION OF UNITED STATES CURRENCY BY TREASURY DEPARTMENT
United States currency - Each Federal Reserve B a n k
w i l l a d v i s e the Federal R e s e r v e B o a r d (for h e a d
1 >
X-3393
office and each branch separately) of the amounts
of $1 a n d $ 2 b i l l s e s t i m a t e d to b e s u f f i c i e n t for
one month's reserve supply and will now place
o r d e r s w i t h t h e B o a r d (for h e a d o f f i c e a n d e a c h
b r a n c h s e p a r a t e l y ) to c r e a t e cash r e s e r v e s o f t h e s e
amounts. Hereafter, each bank will telegraph to
the federal Reserve Board on the last business day
of each month the amount of each denomination of
$1 and $2 notes (United States currency) estimated
as sufficient to m a i n t a i n r e s e r v e stocks at the
h e a d o f f i c e and branches at the f i x e d figures.
M o n t h l y o r d e r s to t h e F e d e r a l R e s e r v e B o a r d f o r
United States currency from the Treasury must b e
c o n f i n e d s o l e l y to the $1 a n d $ 2 d e n o m i n a t i o n s ,
a n d mu.st n o t i n c l u d e r e q u i s i t i o n s f o r h i g h e r d e n o m i n a t i o n s , b u t if a t a n y t i m e t h e T r e a s u r y f i n d s it
necessary under the law to issue U n i t e d States n o t e s
or other kinds of United States currency in denominat i o n s a b o v e $1 a n d $2, s u c h n o t e s w i l l b e a p p o r t i o n e d
among the twelve Federal Reserve Banks, w h i c h will accept them and p a y them out as c o n t e m p l a t e d i n p a r a g r a p h
III,
(Signed) W. S. BROUGHTON,
Chairman.
»
walter l. eddy
"
w. e. buell
"
c. s. pearce
currency committee.
April 26, 1 9 2 2 .
approved:
(Signed) A, W. MELLON,
Secretary of the Treasury.
approved:
Federal Reserve Board
(Signed) V. P. G. HARDING,
Governor.
FEDERAL RESERVE BOARD
WASHINGTON
May 3, 1922.
X-3394
SUBJECT:
D a y l i g h t S a v i n g , D i s t r i c t N o . J>.
Dear Sir:
You were advised by the Federal Reserve
B o a r d , in its t e l e g r a m of A p r i l 12, 1922, that the
F e d e r a l Reserve B a n k of P h i l a d e l p h i a would operate
on the daylight saving p l a n during the p e r i o d April
30th - September 30th (both dates inclusive).
The B o a r d is n o w advised by the F e d e r a l Re* serve B a n k of Philadelphia that the daylight saving
p e r i o d in that District will t e r m i n a t e on S e p t e m b e r
24th. Standard time will, therefore, b e in e f f e c t
a g a i n in D i s t r i c t No. 3 on S e p t e m b e r 25th.
Very truly yours,
Walter L. Eddy,
Assistant Secretary.
TO THE GOVERNORS OF ALL FEDERAL RESERVEBANKS
EXCEPT PHILADELPHIA.
SOLD
Summary of transactions for period ending May 4, 1922
Federal
Balance last
Gold
Reserve
statement
Bank of
Apr. 2 7 , 1 9 2 2 .
Withdrawals
Boston
$ 2^396,376,02 I
•New York
Philadelphia
Cleveland
^7,652f33i6.05
Richmond
32,221,010.81
Atlanta
28,088,699*47
Chicago
68,973,802.82
St. Louis
7,965,944.24
26,553,983.82
Minneapolis
Kansas City
25,825,255.33
8,280,986.98
Dallas
36,965,008,11
San Francisco
Total
1$ 4 5 7 , 9 9 8 , 4 4 2 , 6 7 { $
Federal
Reserve
Bank of
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louie
Minneapolis
Kansas City
Dallas
San Franc 1 Ban
Total
i$
693,245.00
1,242,938.50
644,940.00
1.313,747*00
887.770.00
526,1(01.24
1,009,675.00
819,901,07
307.116.01
1,776,500.47
857,942,22
998,265.78
11,078,442,29 ($
FEDERAL EESEBVE BOARD
S E T T L E M E N T FUND
Gold
Deposits
1,000,00
25,000.00
10,500,000.00
Aggregate
withdrawals
and transfers
to Agent's fund
1
693,245.00
5,000,000,00
1,007,500.00
2,0(50,600.00
1,000,000.00
5,204,721.00
2 4 , 7 3 8 , 8 2 1 . 0 0 |$
(CONFIDENTIAL)
Aggregate
deposits and
transfers from
Agent*s fund
$
i S : S 5 : ? 8 ®
1,313,747.00
887.770.00
12,526,401.24
1,009,675.00
819,901.07
307.116.01
3,776,500,47
857,942.22
10,998,265.78
Total
Total
Debits
Credits
104,^7,732.78
10^,650,897*11
443,9^,154,%
428,664,031,02
137,594,622.54
137,923,874,96
2,394,505.16
107,562,345.90
105,167,840.74
2,691,451,49
98.530.660.87
95,839,209.38
41,985,156.79
51,797,776.15
3,(*5,105.44
220,769,609.05
217,724,503.61
610,196,53
92,569,211,97
91,959,015.44
28.061.549.88
31,143,196.42
68,563,540.36
77,571,252.68
36,462,300.88
39,200,064.79
58,772,669.91
59,596,892.68
2 5 , 7 9 3 , 2 1 7 . 3 2 | $ 1 , 4 3 9 , 2 4 4 , 5 5 4 . 9 8 j$ 1 , 4 3 9 , 2 4 4 , 5 5 4 , 9 8 $
Debits
$
Credits
3,007,500.00
2,000,600,00
1,000,000,00
6,628,721.00
4 5 , 0 7 8 , 4 4 2 . 2 9 j$
Net
Credits
T R A N S F E R S
5,000,000,00
Settlements ftorn.April 2 8 , 1922 to May 4, 1 9 2 2
inclusive.
Net
Debits
1,790,835,b7 5
15,261,123,03
1,000.00 W
25,000.00
10,500,000.00
X—3395
Washington, D, C.
May 5, 1922.
28,162,821.00
1$
Balance in
fund at close
of business
May 4, 1 9 2 2 ,
$
329,252.42
9,812,619,36
3,081,646.54
9,007,712.32
2,737,763.91
824,222.77
25,793.217.32 $
Summary of changes in ownership of gold by banks through
transfers and settlements.
21,?*j,
77,72' r u o i l
57,055,5 4 4 . 8 5
43,944,0 8 3 , 8 9
33,641,794.32
25,374,9 1 7 . 5 9
64,919,0 2 2 . 3 8
9,543,346.64
2 9 , 3 2 8 , 514.35
33,057,0 6 7 . I 8
11,160, O 8 . 6 7
8
33,419 686.10
441,082,821,38 $
1,790,835.6? $
Decrease
15,261,123.03
2,394,505.16
2,691,451.49
3,045,105.44
610,196.53
Increase
329,252.42
9,812,619,36
3,081,646.54
9,007,712.52
2 , 7 3 7 , 7 6 3 . 9 # , •i
824,222.71
25,793,217*32 |$ 25,793,217lf2
OV
i
F E D E R A L
R E S E R V E
Summary of transactions for-period ending May 4, 1922.
Balance last
Gold
Gold
Federal
statement
Reserve
Withdrawals
Deposits
Apr. 27, 1922.
Agent at
Boston
|$
120,OCX),000
New York
|
401,000,000 1
Philadelphia
|
144,389,260 1
Cleveland
|
165,000,000
Richmond
|
42,795,000 J
Atlanta
}
81,500,000
1
3,500,000
j
1,000,000
Chicago
|
342,644,500 1
5,000,000
|
St. Louis
1
63,300,000
2,000,000
1
Minneapolis
|
16,000,000 1
Kansas City
|
39,360,000 1
Dallas
{
10,000,000
j
187,016,500
!
}$ 1 , 6 1 3 , 0 0 5 , 2 6 0
1$
San Francisco |.
Total
1
1
|$
3,000,000
1$
1
F U N D
IS
-
1
-
1
-
1
-
f
-
1
-
1
-
1
I
-
1
5,000,000
|
-
1
1,500,000
1
-
5,000,000
-
2,000,000
10,000,000
(
j
1,000,000
|
5,000,000
|
-
10,000,000
123,000,000
1
401,000,000
j
149,389,260
165,000,000
3,000,000
I
-
I
39,795,000
f
3,500,000
1
13,000,000
1
91,000,000
1
12,000,000
1
5,000,000
}
5,000,000
|
342,644,500
4,000,000
}
1,500,000
j
60,800,00b
j
16,000,000
I
42,360,000
1
10,000,000
195,592,500
1
-
1
f
-
1
-
j
1
2,000,000
-
-
•
1
1
1
f
1
-
3,000,000
-
1,424,000
-
18,500,000
. 1
($
-
-
^
V
3,000,000
1
-
-
$
1
1$
-
-
X39 a
-35
Washington, D. C.
May 5. 1922.
Balance at
Total
close of
business
Deposits
May U. 1922.
(CONFIDENTFIAL)
Total
Deposits
through
Withdrawals
transfers
from bank
Withdrawals
for
transfers
to bank
3,000,000
1$
AGENTS
|$ 11,500,000
|$
:
1
10,000,000
1
1,424,000
j
10,000,000
1
3,424,000
1$
34,000,000
1$ 2 1 , 9 2 4 , 0 0 0
}$
45,500,000
;$ 1,636,581,**
Ql
£
FEDERAL RESERVE BOARD
WASHINGTON
X-3396
M a y g, 1 9 2 2 .
SUBJECT:
Reimbursement of Fiscal Agency Expenses,
Dear Sir:
At the conference of Governors of the F e d e r a l
Reserve Banks recently held in Washington, there was ref e r r e d t o it f o r c o n s i d e r a t i o n a l e t t e r f r o m t h e U n d e r
S e c r e t a r y o f t h e T r e a s u r y , a c o p y o f w h i c h is e n c l o s e d f o r
your information.
The conference requested the Federal Reserve Board,
in b e h a l f of the F e d e r a l R e s e r v e Banks, to a d v i s e t h e
Treasury that the banks will submit estimates of expenses
and w i l l ask for reimbursement.
The Secretary of the
T r e a s u r y h a s b e e n a d v i s e d t h a t t h i s w i l l b e d o n e . J u l y 1,
1 9 2 2 has b e e n fixed b y the Treasury as the date f r o m w h i c h
the reimbursements will be made. Y o u are requested to have
m a d e u p a n d f o r w a r d to t h e B o a r d at y o u r e a r l y c o n v e n i e n c e
a list o f a l l j u n i o r o f f i c e r s or m a n a g e r s , h e a d s o f d i v i s i o n s
a n d e m p l o y e e s w h o s e t i m e is d e v o t e d e n t i r e l y t o f i s c a l a g e n c y
work, together w i t h a statement of the salary p a i d in e a c h
case.
T h i s i n f o r m a t i o n w i l l b e t r a n s m i t t e d to t h e T r e a s u r y
Department.
T h e T r e a s u r y w i s h e s it u n d e r s t o o d t h a t i n m a k i n g
reimbursement there will be no p r o v i s i o n m a d e for general
s u p e r v i s i o n or overhead, thus following the precedent e s t a b lished during the time w h e n fiscal agency expenses were reimbursed.
Very truly yours,
G o v e r n o r .
C H A I R M E N O F A L L F.R.BANE'S
COPIES TO GOVERNORS
C O P Y
THE UNDERSECRETARY OF THE TREASURY
Washington
M a y 1, 1 9 2 2 .
X-339_6a.
ffy d e a r G o v e r n o r :
This will confirm the statement w h i c h I h a v e several
times made orally to y o u and other m e m b e r s of the F e d e r a l Reserve B o a r d that, in v i e w of the e x t e n s i o n o f t h e a p p r o p r i a t i o n
f o r e x p e n s e s o f l o a n s a n d t h e p r o b a b i l i t y t h a t at l e a s t s o m e
of the Federal Reserve Banks w i l l not b e a b l e u n d e r present
c o n d i t i o n s to e a r n e n o u g h to p a y e x p e n s e s a n d d i v i d e n d s w i t h o u t
s p e c i a l i n v e s t m e n t s in G o v e r n m e n t s e c u r i t i e s f o r that
raking
purpose, the Treasury now stands ready, u p o n request through
the F e d e r a l R e s e r v e Board, to r e i m b u r s e the F e d e r a l R e s e r v e
Banks for necessary fiscal agency expenses. The Treasury will
b e p r e p a r e d to d i s c u s s w i t h t h e F e d e r a l R e s e r v e B o a r d , o r w i t h
the Federal Reserve Banks individually, as m a y b e desired,
a n y d e t a i l s r e l a t i n g to r e i m b u r s e m e n t f o r f i s c a l a g e n c y e x p e n s e s , w i t h p a r t i c u l a r r e f e r e n c e to t h e d a t e s from, w h i c h t h e
T r e a s u r y w i l l r e s u m e r e i m b u r s e m e n t . It is u n d e r s t o o d , o f
c o u r s e , t h a t if t h e T r e a s u r y is t o m a k e r e i m b u r s e m e n t f o r
fiscal agency expenses the Federal Reserve B a n k s , r n t h the coo p e r a t i o n o f t h e econonqy a n d e f f i c i e n c y c o m m i t t e e o f t h e
Federal Reserve Board, w i l l make every effort to k e e p fiscal
a g e n c y e x p e n s e s d o w n to t h e m i n i m u m , a n d t h a t t h e T r e a s u r y w i l l
i t s e l f h a v e t h e r i g h t to e x e r c i s e g e n e r a l s u p e r v i s i o n o v e r
these expenditures.
Yours very truly,
( S i g n e d ) S« P - G i l b e r t , J r . ,
Under Secretary.
H o n . YL P. G . H a r d i n g ,
Governor, Federal Reserve Board,
W a s h i n g t o n , D . C.
FEDERAL RESERVE BOARD
WASHINGTON
x-3397
M a y 8, 1 9 2 2 .
SUBJECT:
Currency Policy
Dear Sir:
The currency distribution and payment policy
for the F e d e r a l R e s e r v e Banks set forth i n the e n c l o s e d
pamphlet will become effective June 1, 1922.
B e f o r e the p l a n b e c o m e s effective all Federal
R e s e r v e B a n k s are r e q u e s t e d to give the f o l l o w i n g i n f o r m a t i o n
to t h e F e d e r a l R e s e r v e B o a r d :
(1) The a m o u n t s o f F e d e r a l R e s e r v e n o t e s in
e a c h d e n o m i n a t i o n that each b a n k d e s i r e s to h a v e in its
reserve stock of u n i s s u e d n o t e s .
( 2 ) W h a t a m o u n t o f the r e s e r v e s t o c k o f e a c h
d e n o m i n a t i o n is to b e h e l d i n W a s h i n g t o n .
(3) W h a t a m o u n t ( e s t i m a t e d ) of e a c h d e n o m i n a t i o n o f t h e r e s e r v e s t o c k of n o t e s n o w h e l d i n W a s h i n g t o n
w i l l b e r e q u i s i t i o n e d d u r i n g the r e m a i n d e r of the c a l e n d a r
year.
(4) The a m o u n t s (for h e a d o f f i c e a n d e a c h b r a n c h
s e p a r a t e l y ) o f n e w $1 a n d $ 2 n o t e s ( U n i t e d S t a t e s C u r r e n c y )
e s t i m a t e d to b e s u f f i c i e n t f o r o n e m o n t h ' s r e s e r v e s u p p l y .
( 5 ) T h e e s t i m a t e d a m o u n t s o f n e w $1 a n d $ 2 n o t e s
( U n i t e d S t a t e s c u r r e n c y ) w h i c h w i l l b e n e e d e d d u r i n g J u n e , 3.922
to m a i n t a i n t h r o u g h o u t the m o n t h r e s e r v e stocks o f these n o t e s
at approximately the fixed figures.
It i s r e q u e s t e d t h a t o n M a y y i , 1 9 2 2 , e a c h F e d e r a l R e s e r v e B a n k w i r e the F e d e r a l R e s e r v e B o a r d the a m o u n t of
n e w $1 a n d $ 2 n o t e s ( U n i t e d S t a t e s c u r r e n c y ) o n h a n d .
Very truly yours,
(Enclosure)
G o v e r n o r .
TO THE GOVERNORS OF ALL FEDERAL RESERVE BANKS.
FEDERAL RESERVE BOARD
WASHINGTON
X-339S
M a y 8, 1 9 2 2 .
SUBJECT:
T r a n s f e r s to F i v e P e r C e n t R e d e m p t i o n
Fund Accounts of National Ban)s.
Dear Sir:
Practically all deposits for credit of national banks
in the Five Per Cent Redemption F u n d against n a t i o n a l b a n k note
circulation are made through the Federal Reserve Banks and
Branches.
T h e Treasury Department has a d v i s e d the B o a r d that
it is d e s i r a b l e that f u n d s d e p o s i t e d b y n a t i o n a l b a n k s w i t h
Federal Reserve Banks and Branches for credit in the national
banks 1 Five Per Cent Redemption Fund accounts should be covered
into the F i v e Per Cent R e d e m p t i o n Fund against national b a n k note
c i r c u l a t i o n o n the d a y t h e y a r e r e c e i v e d b y t h e F e d e r a l R e s e r v e
Banks and Branches.
U n d e r t h e p r e s e n t p r o c e d u r e t h i s is i m p o s s i ble and a n e w procedure has, therefore, b e e n suggested a n d h a s
the a p p r o v a l o f the T r e a s u r y D e p a r t m e n t a n d t h e F e d e r a l R e s e r v e
Board.
C o m m e n c i n g w i t h J u n e 1, 1 9 2 2 , e a c h F e d e r a l R e s e r v e B a n k
a n d B r a n c h w i l l w i r e d i r e c t to the T r e a s u r e r o f t h e U n i t e d S t a t e s ,
National : " B a n k R e d e m p t i o n A g e n c y , W a s h i n g t o n , a t t h e c l o s e o f b u s i n e s s
e a c h d a y t h e t o t a l a m o u n t d e p o s i t e d w i t h it b y n a t i o n a l b a n k s f o r
t r a n s f e r to t h e T r e a s u r e r o f t h e U n i t e d S t a t e s f o r credit i n t h e i r
Five Per Cent R e d e m p t i o n F u n d a c c o u n t s and in the same t e l e g r a m
w i l l a u t h o r i z e t h e T r e a s u r e r o f t h e U n i t e d S t a t e s to c h a r g e t h e g i v e n
t o t a l to t h e F e d e r a l R e s e r v e B a n k ' s ( h e a d o f f i c e ) F i v e P e r C e n t R e demption Fund account against Federal Reserve notes and request him
to c o v e r a l i k e a m o u n t i n t o t h e F i v e P e r C e n t R e d e m p t i o n F u n d . a g a i n s t
national bank notes.
The necessary authority to authorize the
T r e a s u r e r of the U n i t e d States to charge the parent b a n k ' s F i v e Per
Cent R e d e m p t i o n F u n d a c c o u n t a g a i n s t F e d e r a l R e s e r v e n o t e s s h o u l d
b e given to all b r a n c h banks.
Each Federal Reserve Bank and Branch
w i l l m a i l d i r e c t to t h e T r e a s u r e r o f t h e U n i t e d S t a t e s , N a t i o n a l
Bank Redemption Agency,daily a schedule giving the names of national
banks w h i c h h a v e during the day deposited funds to b e transferred to
the T r e a s u r e r of the U n i t e d States for credit in their F i v e P e r Cent
R e d e m p t i o n F u n d accounts and the amount so d e p o s i t e d b y each national
bank-named should also be indicated.
2 -
X-3398
The following code word will be used by the Federal Reserve
B a n k s a n d B r a n c h e s in their t e l e g r a m s to the T r e a s u r e r of the U n i t e d
States;
D U R B A R Charge our (head o f f i c e ) Five Per Cent R e d e m p t i o n
Fund account against Federal Reserve notes
a n d cover like a m o u n t into Five Per Cent R e d e m p t i o n F u n d
against national bank notes.
Upon receipt of schedule
mailed y o u today please credit Five Per Cent R e d e m p t i o n Fund
a c c o u n t s of b a n k s n a m e d in a m o u n t s indicated.
U p o n receipt b y the Treasurer of the United States of
the a b o v e t e l e g r a m f r o m a F e d e r a l R e s e r v e B a n k , or a B r a n c h or
B r a n c h e s thereof, the Treasurer will t e l e g r a p h the F e d e r a l Reserve
B a n k as follows, u s i n g code w o r d :
D U S K Y Have today charged your Five Per Cent R e d e m p t i o n
Fund account against Federal Reserve notes in the following
a m o u n t s , in a c c o r d a n c e w i t h t e l e g r a p h i c r e q u e s t s of this
date made by y o u r b a n k and brandies: (Name of city in w h i c h
h e a d o f f i c e is l o c a t e d ) $
j (Name of city in
w h i c h b r a n c h is l o c a t e d ) 3
Total amount
charged has b e e n covered into Five Per Cent R e d e m p t i o n Fund
account against national bank notes.
Upon receipt of
schedules national banks named therein will be given credit.
Very truly yours,
G o v e r n o r .
TO GOVERNORS OF ALL
FEDERAL RESERVE BAFKS.
"AMERICA AND THE DEBTS OF EUROPE" ,
Address by
EDMUND PLATT
VICE-GOVERNOR FEDERAL RESERVE BOARD
"before
THE AMERICAN ACADEMY OF POLITICAL AND SOCIAL SCIENCE
Philadelphia, PaFriday Evening, May 12, 1922•
X-3399For Release in Morning Papers,
Saturday, May 13, 1922.
-1-
X-3399
The topic assigned for discussion this evening "America and
the Debts of Europe" is broad enough to allow of considerable latitude
and does not necessarily imply that discussion is to be limited to the
debts of Europe to America, but I take it that it is with such debts
that we are chiefly concerned, and I propose to speak particularly of
the debts not of European governments to our government or even to our
people who have purchased the bonds of European governments, but of
the debts which business men, manufacturers and bankers of Europe owe
to our business men, manufacturers and bankers*
With regard to the great debt of our former allies or associated
in the war to our government I merely want to say in passing that I
have been rather surprised as to the source from which the principal
demand for its early payment appears to come.
If this demand came from
the great financial centers or from men of large incomes who pay the
most burdensome taxes, it would be explained by the desire for relief
from taxes through the application of the sums received to the reduction of the war debt, but it appears to come from producing centers,
and particularly from agricultural sections which are dependent upon
export demand for their products for maintenance of prices.
It would
seem clear that early payment of any part of this debt must decrease
the purchasing power of the people of the allied countries and must
therefore make for lower prices for the products we sell to them*
It is of course well known that European merchants, traders and
bankers owe large sums of money to Americans.
Even if we had no direct
-2-
X-3399
proof of this we should know that it must be true from the fact that
large flotations of foreign securities have been made in this country
without turning the tide of gold importations.
Since last October
the foreign financing in this country has at times almost equalled
the current trade credit balance, but gold importations have continued,
with only a slight slackening due evidently to the stoppage of gold
production in the South African mines through strikes.
How much of an unfunded trade balance is there?
This has proven
an interesting study for economists and statisticians and they have
assembled many columns of interesting figures, but have differed considerably in their conclusions*
I think the first serious effort to
bring together the known facts, the visible items, with some estimate
of the "invisible11 items was made by the Federal Reserve Board1 s
Division of Analysis and Research in the Federal Reserve Bulletin for
September, 1920•
A merchandise balance had accumulated in our favor
of $6,062,000,000 between November 1, 1913 and July 31, 1920 and it
had become very evident long before that such a one-sided trade could
not be carried on indefinitely*
The Federal Reserve Bulletin brought
to light offsets that appeared to reduce this balance of more than six
billion dollars to about three billion dollars, adding that "from this,
of course, must be deducted the amount of indebtedness to European and
other countries vAiich existed at about the time of the Armistice*"
Ihis was followed the next month by a much more elaborate study
by Dr, B. M» Anderson in the Chase Economic Bulletin on Europe's
unfunded debt*
His conclusion was that
1
1
on September 15, 1920 Europe
-3-
X-3399
owed, an unfunded debt of over $3,500,000,000 to private individuals,
banks and corporations in the United States," this being in addition
to the ten billion dollars which European governments owed to the
United States government, and in addition to the debt of Europe to
investors in the United States holding European securities.
Dr.
Anderson maintained that the primary explanation of the tremendous
expansion of bank credit in the United States in 1919-20 was "our
unbalanced and unfinanced export trade, together with the rising
prices, fictitious prosperity, and speculation which have grown out
of the unbalanced export trade."
Oar exporters had borrowed money
from our banks in large amounts because of inability to collect what
was due them abroad, or because they had taken payments in foreign
currency balances which they thought they could convert into American
dollars at more favorable rates of exchange later.
Dr. Anderson
declared that computations as to the unfunded balances owed us on our
world trade were not particularly valuable - that the European balance
was the only one that counted, as the triangular exchange of goods
and of credit by which America's credit balances in Europe had been
settled through debit balances with South America-
and the Orient had
broken down.
This idea was combatted by Prof. John H. Williams in the June,
1921 Review of Economic Statistics of the Harvard University Committee
on Economic Research.
He gave reasons for believing that it is still
permissible to subtract from Europe's debt to us the amounts we owe
to non-European countries, and his final conclusion was that the unfunded debt to the American merchants, bankers and corporations was
-4-
X-3399
considerably smaller than others had estimated.
"Our international
situation since the Armistice," he declared, "has been less alarming
than has frequently been stated.
It appears improbable that our
unfunded balance exceeded a billion dollars at the end of last year"
(December 31> 1920).
Our unfunded balance from Europe was estimated
at from half a billion to a billion greater than our balance with
the world as a whole, but he concluded "It is not possible to believe
that so prolonged and pronounced a recovery could have occurred
(in European exchanges) had London and the Continent been indebted
to the United States - bedides the $10,844,000,000 of obligations
held by our government and the private long term indebtedness - by
some three to four billion dollars".
In November, 1921, the Federal
Reserve Bulletin returned to the subject with a much more complete
statement of items of credit and debit than in the study of September,
1920, the conclusion being that so far as visible items, and items
which could be estimated with some approach to accuracy were concerned,
the sum due our merchants, bankers and corporations was on October 1,
1921 no less than $3,403,000,000.
The Bulletin mentioned offsets
that might reduce this amount, such as the speculative purchases of
foreign currencies by Americans, but did not attempt to estimate their
amount.
This sum referred to our trade with non-European as well as
with European countries.
It was swelled half a billion dollars by
the inclusion of an item with relation to the cost of cancellation of
European war contracts in this country in 1919,
I think, in any previously published estimate.
item not included,
x-3399
The February 1922 Federal Reserve Bulletin pointed,
out that in October, November and December our favorable
balance of trade was a little less than $300,000,000, from
which gold imports of $125,000,000 were to be subtracted,
leaving the net addition to the unfunded balance $175,000,000,
and conjecturing that the invisible items plus foreign financing probably more than offset that amount.
The unfunded
balance on January 1, 1922 was therefore given as $3,400,000,000,
lopping off $8,000,000 from the November estimate.
There have, of course, been other contributions on
this subject.
The Journal of Commerce on Monday, April 24th,
published a number of articles by leading bankers and economists,
and the economic magazines hava published occasional papers,
but generally speaking these have added only an item or two to
the studies already referred to, or have expressed opinions
without bringing much that was new to their support.
It is noteworthy that the main studies of this subject
coincided with periods of depression or of recovery in sterling
exchange.
Sterling had been pegged during the war at 4.76,
and when allowed to take its own course after March 18, 1919
began to fall until in February, 1920 it reached a low point
of 3.18.
It recovered to 4.00, then fell to 3.58 in August
x-3399
at the time when the first study of unfunded balances was made
in the Federal Reserve Bulletin in September of that year,
followed by Dr. Anderson's study of October.
In the Spring of
1921 there -was a remarkable recovery with cable rates at or a
little above $4»00 for more than a week in the latter part of
May, and it was during this period of recovery, or before the
reaction from it had proceeded far, that Prof* Williams made
his elaborate contribution to the Harvard Review of Economic
Statistics*
It was natural at that time to find reasons for
believing the unfunded balance much less than had previously
been estimated, and Prof. Williams * conclusion that so pronounced a recovery could not have occurred with so great an
unfunded balance as three or four billions of dollars seems
justified.
By the time of its publication, however, in June
the reaction was well under way and before the end of July
sterling rates were as low as in August of the year before, below
3*60 from the 19th of July to August 6th.
x-3399
-7-
When the Division of Analysis and. Research of the Federal Reserve
Board made its second and chief investigation of the question of unfunded
debts for the November issue of the Bulletin there had been considerable
recovery, hit the study was. published or was prepared, just before the
notable rise in sterling, in French francs and in lira that began about
the time the Conference on the Limitation of Armaments met in Washington.
By the end of November British pounds had risen to about $4.00, and by
December 31st to 4.21 l/4, and by Mar ch to $4.40.
Since March the
advance has proceeded less rapidly, but has been well sustained.
There
is no further talk of debasing the pound and British bankers express
confidently their expectation that par may be reached before the close
of the present year, or soon after the end of the year.
There is ho necessary conflict between the figures on the unfunded
balance as given in the November Federal Reserve Bulletin and carried
forward to the end of the year and other studies of the subject, with
the exception of one or two items, , for the reason that the Bulletin has
not attempted anything further than an appraisal of known facts with
such invisible items as had long been estimated as offsetting the balance
of trade, such as tourists' expenditures, relief contributions, emigrants'
remittances, etc., concerning which enough information could be obtained
upon which to base estimates.
As already stated it appears that the
gold imports, the known investments of Americans in foreign securities,
and the invisible items included in the Bulletin's figures have somewhat
overbalanced the excess of exports over imports for several months,
-s-
x-3399
but for more than a year imports have been slowly increasing while
exports (in value at least) have been decreasing, so that this change
alone is not enough to account for the very pronounced and well sustained rise in sterling and in the principal allied currencies.
The
conclusion seems inevitable that no such recovery could have been made
if there were still an unfunded balance due the merchants and bankers
of this country as great as three billion dollars.
That there was such a balance in the summer of 1920, when the
Federal Reserve Board first undertook an investigation of the subject
I have no doubt.
Liquidation had scarcely begun at that time, and
Dr. Anderson was doubtless also right in attributing a large share
of the overextended condition of banks in the financial centres to
the efforts of our exporters to carry this balance.
Whether it could
have been- cut down so much as Prof. Williams estimated by the beginning
of the year 1921 seems more than doubtful, but that- liquidation and invisible offsets had by that time become well started is reasonably certain.
The Federal Reserve Bulletin has suggested that speculative
purchases of foreign currencies may have been a large item and has
also suggested that American exporters have doubtless charged off considerable losses.
It seems probable that the major depressions of
exchange mark periods when our people were seeking to convert foreign
balances into dollars and that exchange recovered when most of the
conversions had been made and losses wiped out.
Some very large
American exporters are known to have taken considerable losses in
-9this way.
X-3399
They sold in terms of foreign currencies, and found them
when payments became due considerably depressed, but when recovery was
delayed beyond their expectations they finally bought dollars and took
their losses.
Very large losses are also known to have been charged off
by some of our bankers.
It should be remembered always that even if the balance of trade
were actually against us European exchanges would not be at their old
gold pars.
The principles laid down in the well know Bullion Report
of 1810 with regard to the effect of irredeemable paper currency on
exchange still govern.
With the English budget in balance and
British prices about as low as ours,sterling might be nearer the old
par than it is now if there were no unfunded talance due us, but it
can not gc tc par until the paper currency of England is actually and
freely exchangeable for gold.
Predictions as to the future course of exchange are rather thank-less, however.
As already mentioned there were British economists and
bankers who declared no longer ago than last fall that the pound sterling
could never recover, or that its recovery could not be attained without
a ruinous decrease of prices, and that it would be better to stabilize it
at about 3*65 or 3*70.
There has in fact been a considerable decline
in prices in Great Britain and that decline has been doubtless a leading
factor in the recovery of sterling and also in the recovery of Britain's
export trade.
No longer ago than April 1st the editor of the Economic World whose
articles are always worth reading and usually sound
predicted that "no
X-3399
person now living will ever see the value of the present French franc
of actual currency normally and regularly equal to one-half of that of
the gold franc established by law as the monetary unit of France".
At
the time that was published the French franc was quoted at about 9 cents
in our currency.
It had been as low as 5*79 i n 1921 but had recovered
to 8.13 at the end of December.
afteii
Within a little more than two weeks
Mr * March made this prediction French francs sold at 9*37 l/2,
and had little more than a quarter of a cent to go to reach half par.
They have since fallen back somewhat, but I see no reaspn why they
should not continue to advance, if France makes progress towards
balancing her budget.
They are not lower now than our Civil War-
greenbacks were at one time, and complete restoration does not appear
impossible, though it may take a considerable number of years *
I am not going to undertake to estimate how great an unfunded
balance may still be due to the merchants, bankers and corporations
of America,
They had a severe lesson in 1920 and have since then .
preferred a diminishing business for which payment was reasonably
sure in dollars.
It appears at any rate clear that they have for
many months been collecting or funding in some way, or charging off
debts due them,
I believe that investments in real estate in Europe
and in the shares of European enterprises have been a very large offsetting factor.
Prof. Williams states in the May number of the
Quarterly Journal of Economics that foreign investments in Germany
since the Armistice have been estimated at nearly $250,000,000, and
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X-3399
it is well known that Americans have been large investors not only
in German property, but in PolaM, in Italy and in the states which
formerly made up the Austrian empire.
This item of foreign invest-
ment, with the wide-spread speculative purchases of foreign currencies
might easily have amounted to a billion dollars.
The debts of individuals in Europe to individuals and corporations
in America, at any rate can not at present, I believe, be so large as
to present any insuperable bar either to the restoration of the exchanges that seem within reach of restoration or to the stabilization
of exchange with countries where inflation of paper currencies has
reached a point beyond the possibility of restoration.
Fluctuation
of exchange, due to inflation, is annoying and introduces a very undesirable element of speculation in foreign trade.
An irredeemable
paper currency even if not constantly expanded is subject to changes
of value from political and other causes not related to trade balances
or international debts.
Our Civil War greenbacks went up or down in
value in accordance with the fortunes of the Union armies, and later
with relation to policies under discussion in Congress.
The deprecia-
tion of some European exchanges has undoubtedly been increased by the
instability of some governments or by socialistic policies.
as Secretary Hughes has well said, must precede credit.
Confi#en@e,
Give# good
government and balanced budgets something could doubtless be done in
the direction of stabilizing exchanges between countries having an
irredeemable paper currency and countries on a gold basis.
It would
X-3399
- 12 -
probably be in the nature of recognition for fixed periods, or in
some casas permanently, of new pars around which fluctuations could be
controlled within something approaching normal limits.
No outside
or international attempts at "stabilization", however, could perform
miracles or take the place of the necessary internal conditions and
efforts in each country.
Stabilization of exchanges between the
United States and the neutral countries, whose currencies are not
greatly depreciated, such as Holland and the Scandinavian countries,
seems within reach on the former gold par bases, and foreign trade
would doubtless be benefited by such control of fluctuation as might
be instituted in other cases, but so long as our own currency is sound
and our prices attractive and so long as the pound sterling continues
to maintain itself at a point so near par, with francs and lira showing progress, it can hardly be said that the continuance or recovery
of our foreign trade are really dependent upon any such stabilizing
measures.
REMARKS MADE BY A. C. MILLER
IF THE COURSE OF A DISCUSSION ON
FEDERAL RESERVE CREDIT POLICY
at the
JOINT CONFERENCE OF THE CHAIRMEN AND GOVERNORS
of the
FEDERAL RESERVE BANKS
HELD IN WASHINGTON, D. C.
October 25-28, 1921,
X-"$UOO.
_1_
X-3U00
There are one or two words, Governor, which I think I migjit
say.
I have been very much impressed by what the Comptroller
has said.
I think all of us must be very much impressed with
the clearer appreciation of our problems which this discussion of
rate policy has evidenced.
ceding conference.
In that regard it surpasses any pre-
I was particularly delighted at the frank
avowal of Mr. Strong that the British discount principle of always
maintaining reserve bank fates above going market rates was not
applicable to American conditions.
The whole tenor of the
discussion here this morning indicates above all that there is
increasing appreciation on the part of the managers of the Federal
Reserve System that the Federal Reserve Banks are partners in
American industry and enterprise and that the touchstone of the
successful operation of the Federal Reserve Banks is to be found
in what those banks do to assist the production and distribution
of goods.
They, therefore, function best when they hllp to pro-
mote and maintain,a good state of industry and, as an essential to
that, a healthy condition of mind on the part of the business and
producing community.
I am sure that we would err egregiously in the administration of the.Federal Reserve Banks if we overlooked the fact that
the Federal Reserve System in our country occupies a much more intimate relationship to industry than the Bank of England does, for
instance, to business and industry in that country.
Our judgments
» 2 -
X-3U00
are of very much more concern and are of very much more effect in
their economic incidence than the judgments of any other reserve
institution anywhere in the world,
A good deal has been aaid
in the discussions yesterday and this morning concerning the
principles governing discount rates.
Let me say frankly that I
am very skeptical of the value of so-called principles in a matter
that is so much a matter of judgnsnt based as it must be upon
conditions and circumstances.
I, myself, would, therefore, be very
hesitant in laying down a principle in the matter of discount policy.
I may, however, say in contradistinction to the oft repeated statement that Reserve Bank rates should be above market rates that I
believe cur constant study should be not to see how high we can maintain rates but how low we can safely go in establishing rates without
inviting dangers of unhealthful developments in business and industry.
This is not inflationist doctrine; this is the economic view.
The cost of credit is an element of cost of production.
Pro-
viding business and credit are in a healthy condition, there is no
reason for the Reserve Banks doing anything that adds to the costs
of credit.
When industry discloses tendencies toward specula-
tive expansion, then is the time to add to the cost of
credit.
I believe that it is the part of wisdom to recognize that in the
formulation of a discount policy and in the adjustment of discount
rates we should seek just as earnestly to avoid deflation as we
f
x-3Uoo*
~ 3should to avoid, inflation.
By inflation I mean an expansion
of crsd.it that eventuates in a rise of gsneral prices.
By de-
flation I mean a restraint of credit that eventuates in a
of prices.
fall
Good economic and credit policy will endeavor to
steer a middle course between these two dangerous shoals.
A year of fifteen months ago the business and industry of
the country began their descent from the apex of speculative
expansion into the trougn of depression by way of the most
*
violent reaction of prices that we have ever experienced in
tiiis country.
Now, .vhere arj we at the present time?
We
are still in the trough of depression, but we are beginning to
see here and there little symptoms of animation and recovery.
It would not surprise me to see a condition of monetary ease
develop in the United States where commercial rates would go
as low as 4 > per cent.
|
I mean market rates, not discount rates
at the Reserve Banks,
I hope no condition of extreme ease
comes to pass.
We have, however, in former periods of extreme
business depression seen a great accumulation of idle funds at
the great centers, so great that no rate could bj made low enough
to induce borrowing,' because the outlook for the profitable .use
of borrowed funds was too unpromising.
That was true after
the crisis of 1873 > again after 1393 > and it may prove true in
~
4
-
x-3400
1921 or 1922, though I believe and I certainly hope that befofe
long thers will be a business revival of healthy character and
considerable proportions such as will make a demand for credit
and
keep
rates from sliding simply
because
nobody wants to
"borrow*
I think the probability is that for a good mapy years to
come, certainly I Believe for five years and possibly it may
be for a period as long as ten years, we shall have to deal
with very rapidly shifting scenes in the business world*
I
look for very frequent alternations of periods of short lived
and feverish activity in business and industry followed by
periods ol acute, short-lived depression*
In other words,
industry will have to travel an uneven sea-
Such has usually
been the case after all great economic crises induced by great
wars-
That was true after the Napoleonic war, which supplies
the nearest analogy to the present situation.
It was also
true after 1873 when readjustment follow3d a badly disturbed
course lasting at least five years,
and on no one of these
occasions was the whole structure of industry and commerce of
the leading producing countries so badly dislocated as at the
present time.
We have got to be prepared, therefore, to deal with conditions and circumstances as they develop and not according to
x-5^00
- 5fixed, principles.
This means that we must always strive to main-
tain in the Federal Reserve System great flexibility of mind.
Our
principal pre-occupation, I repeat, should he to deal with conditions
and circumstances rather than with principles.
We have got to do
just what a wise physician does,when he at times hesitates to give
a patient a small dose of some powerful medicine and at other times
does not hesitate to give him a very heavy dose.
We have got to
base our judgments and bottom our policies upon facts rather than
upon preconceptions*
Now, at the moment, what is the outstanding fact in the
industrial situation?
It is that industry is still pretty far
down in the trough of depression.
What does this suggest as to
a proper rate policy adjusted, to circumstances?
opinion that at the present time no rate at
a
I am of the
Federal Reserve
Bank could be made so low that it would induce borrowing for
the sake of what would be called illegitimate uses.
Banks do
not Borrow from the Federal Reserve Bank for fun or simply because money is cheap*
Nor do merchants and manufacturers
borrow from their banks simply because money is cheap.
lead a horse to water but you cannot make him drink.
You can
When he will
not drink you cannot regulate the amount of his drink, but when
he wants to drink you can regulate the amount he may drinic by reg
ulatin6 the amount in the troujgi.
And so it is pretty much with
- 6 -
x-3^oo
respect to the relation of money rates at Federal Reserve Banks.
It is when things are on the upward move that the Federal Reserve
Bank can "become a very real influence in restraining what in its
judgment is an unheal thful and undesirable tendency, by advancing
its rates.
It can, in other words, through a wise and timely
application of increased rates do much to restrain, if not altogether to prevent inflation.
At the present time, however, there
are no undesirable tendencies of this kind in the business situation-
Business is sick and it needs whatever modicum of comfort
and support it can get from a cheapening of the cost of credit.
There has been some discussion here of the influence actually
exerted by Reserve Banks' rates upon the rates charged customers of
member banks.
There is some difference of opinion as to how exten-
sive is the influence exerted by changes of Reserve Bank rates.
I
think it is a fair reading of the mind of the conference to say that
in one way or another the actual cost of credit to borrowers at this
time is influenced by Reserve Bank rates to a sufficient degree to
make it necessary for us to recognize the bearing that Reserve Bank
rate changes have in the immediate economic and industrial situationV»e have <zot to recognize the fact that ,\hen business is being done
as it is at the present time on very narrow margins, an addition
or subtraction of l/2 or 1 per cent in the cost of borrowed funds
is a matter of a great deal of moment.
A reduction of Reserve
X-34OO
- 7Bank rates in such circumstances may have a considerable effect
in quickening the pace of industry and in accelerating its revival.
On the other hand, I think it not at all unreasonable to anticipate
that within a period of a year, or even possibly six months, we
may have a spurt of activity in certain portions of the country
at least that will make it very desirable to take a firmer grip on
the reins«
We may even see speculative and inflationist tendencies
develop to a point where it will be advisable to press on the curb.
That is not, however, the situation at the moment.
The runaway
horse has been brought to a standstill, let us relax our grip, giving
him a little rein, if we think by doing so he v/ill show some disposition to move along.
I am disturbed but not surprised by what the Comptroller has reported of a recent conversation with a gentleman wham, he regards
as a competent interpreter of public and congressional opinion-
I
have recalled a great many times to myself in connection with the
perils through which the Federal Reserve System has been passing in
recent months, what it was that really brought the Second Bank of the
United States to the brink of dissolution.
Aside from the mass of
rather secondary political and factional charges, it was the great expansion of credit supported by that institution in the year 1S32 followed by the violent contraction of credit in the winter of 1833**^*
This
begot in the minds of people, not all of whome were sympathetic with
Andrew Jackson in his attack against the Bank, the conviction that
- S -
X-3400
the Bank had too much po-var, that it was an arbiter of economic destiny,
that it could make or mar the prosperity of the country "by assuming
a liberal or illiberal attitude in the matter of credits.
I think
there are symptoms that not a few people in the United States at the
present time are of a similar opinion with reference to the Federal
Reserve System.
I think the influence of the Federal Reserve Sys-
tem is in danger of being over-emphasized both by its enemies and by
its ffiends.
It is important, therefore, that our policies should
be carefully and quickly adjusted to the trend of conditions in order
to minimize the baneful effect of either exaggerated criticisms or unwarrented expectations.
The people are in a certain sense partners -
sometimes silent, sometimes active - in the Federal Reserve System, and
what they think or what they believe. what they hope or what they fear
is a factor not to be overlooked by us.
I have stated a good many times in Federal Reserve discussions
that in my judgment the
word contraction had no place in the
vocabulary of Federal Reserve banking. Nothing is surer than that
the American people will never stand contraction if they know that
it can be helped. Least of all will they stand contraction if they
think it is contraction at the instance, or with the consent of an
institution like the Federal Rsserve System, set up under public
statute and public in its responsibility and character.
I am glad,
therefore, that the Comptroller has brought into this discussion
the fact that the people are partners with us.
But let me add
by way of caution that I do not mean by this that we must let
-9r
X-3400
"politics" into the Federal Reserve System.
There is a great difference between "politics" and public
opinion.
The less we have of "politics" in the Federal Reserve
System the better for the Reserve Banks and for the people.
In
the long run, however, the Federal Reserve System will net succeed
and in my judgment will have no right to think it is succeeding
unless it has the substantial approval of average public opinion; and for this reason principally* that public sentiment and public
opinion in economic and financial matters in our country reflect the
experiences, the conditions and the difficulties the producing elements
of the population are going through.
The thought on public matters of
an economic character of the average American is formed by his daily
experiences as a bread winner more than by any other single factor or
circumstance of his life.
We cannot ignore the fact that the Federal
Reserve Banks are a factor in industry, in agriculture, and in commerce.
Still less can we igjaore the fact that this is believed and understood
by the average man.
We cannot ignore the fact that states of trade and
industry are very largely influenced by states of mind.
Least of all can
we ignore the fact that at certain times the policies, particularly
the discount policy, of the Federal Reserve Banks can influence and
induce states of mind.
Timeliness of action is of the essence of
successful Federal Reserve action*
timely actionimprovement.
Rig^it action, above all, means
Herein I think the Federal Reserve System has need of
I want to do all that I can to emphasize what the Gover-
nor said in his opening remarks, if I got his meaning, - that our action
-10-
X-3400
in the matter of discount changes has frequently bean too slow.
As I would put it, we have too frequently followed where we should
lead.
Action on the part of a Federal Reserve Bank is valuable in
just the degree in which it correctly anticipates either an upward
or downward swing in the movement of business and credit.
It is a
dangerous proceeding to wait till you are on a downgrade and then
jam the brake on suddenly. Begin to aet your brakes when you see what
is going to happen.
No Reserve Bank can develop a successful discount
policy except on the basis of foresight.
I repeat, we should lead.
We should lead upwards in the matter of rates and we should lead upwards
to prevent or mitigate inflation; we should lead downwards to prevent
liquidation from becoming a straight-jacket of deflation. We should
not hesitate for a moment to reduce rates when we believe that conditions are weakening, liquidation proceeding, and business slackening, just as we should not hesitate when we see that business is
swelling unhealthily and its momentum is being accelerated by unhealthy market conditions, to anticipate and by anticipating to
prevent their consummation in disaster by applying the brakes soon
enough to prevent that extreme being reached.
The Reserve System
cannot "make "the business situation but it can do an immense deal to
make its extremes less pronounced and violent.
X-34OO
It has been very interesting to me, as one who has devoted
most of his time to the study of economics and economic history to
note with what unerring certainty what are called business cycles
recur.
I have often wondered how long it would take the business
man and the banker to appreciate the bearing of the business cycle
upon him.
It has long been recognized by economists that modern
business moves through cycles; that one extreme of the cycle is the
phase of violent speculation giving rise to extreme business tension
and collapse of prices, that the other extreme is the trough of depression, such as we are in at the present time.
If I were to make
one general observation, call it a principle, if you prefer - that
makes it sound a little more impressive - it would be that the discount policy of the Federal Reserve Banks should always address itself
to the phase of the business cycle through which the country happens
tc be passing.
In the degree in which it is successful in correctly
interpreting the trend of affairs and anticipating the approach of the
next phase of the business cycle and translating this into its equivalent
in terms of discount policy, the Reserve System will be a great and
useful institution - in brief, a success.
I see the Federal Reserve Banks in their larger economic relations as moderators.
It is the business of a Federal Reserve Bank
to moderate the pace of business when business is very good, because
experience has demonstrated over and over again that when everybodythinks and feels that business is very good, it is seldom as good as
thought. On the other hand, it is the business of the Federal Reserve
~ld~
x-3400
Banks to moderate the retreat of business when business is getting
bad, because experience has demonstrated time and again that business
need never get as bad as it will if it is allowed to go its downward
course unassisted.
If I correctly interpret the temper of this con-
ference, much has been said that is extremely reassuring that we are
looking in the right direction in the Federal Reserve System. I believe
we understand our opportunities and our responsibilities. Above all
should we understand that we mast ourselves develop independently out
of our own experience a discount policy suited to American conditions.
We must recognize that the conditions which obtain in the United
States are different from those which obtain anywhere else in the world;
different from those which obtain in an old and conservative bank
center like England or in a new and untamed country like, let us say,
Argentina.
We in the United States need to take an economic view of
the discount function of the Federal Reserve Bank and we need to do
it in a large and comprehending sense. We need to do it in the spirit
of the Federal Reserve Act itself.
It is well to recall the words of
that Act (I have often wondered who was responsible for their authorship).
They occur in Section 14, where, in describing the powers of the Reserve
Banks and Reserve Board with respect to rates it says rates shall be
fixed "with a view of accommodating commerce and business".
TThat does "Accomodating concarca ;md business" mean?
I will
not undertake to explain what I understand these words to mean further
than has already been suggested in what I have said,
I will, however,
add that to understand what "accommodating" counerce and business is
we have to understand wl.at commerce and business require. By way of
-13-
x-34oo
illustration I will add that you do not accomodate conxnerce and
business "by high, rates when four million men are out of employment
and business is sick for lack of markets and markets are lacking because the world is more or less in commercial chaos*
On the other
hand, you are not accommodating commerce and business in an economic
sense and in that large public sense which should control the decisions of the Federal Reserve System vfoen you allow a rate to drag on
at an artificially low level at a time when business is speeding on
the upgrade so rapidly that it can only be a question of time when it
will take a headlong plunge into a sea of depression which will involve the whole community.
That was the situation after 1919 •
Speaking specifically about the rate schedule suggested by the
Governor this morning, I want to call attention to one fact.
For my
personal information I have had a percentage computed for the Federal
Reserve System which shows what the reserve percentage would be if the
System were still operating on the same gold reserve as a year ago.
In other words, so as to show the degree of improvement in the reserve
position of the System due to liquidation of the loan account. What
does this computation show?
If we compute the percentage on the basis
of what it would be had there been no increase in gold holdings and
the reserve position consequently had been affected only by the
diminution of the loan account, the System would show a reserve percentage today of approximately 52 per cent as against TO.
In other
words by far the greatest part of the improvement of the reserve
position of the System has come not from liquidation of the loan account bu.t from importation of gold.
This is particularly true of the
~ 14 ~
Reserve Bank of New York*
S3-
X-3U00
f '
.
'
That B%ik shows a reserve percentage of
On the basis of the liquidation of the loan account alone, its
reserve percentage would be computed, at something like 46 or 47 per
cent •
A computation of this kind made for each one of the twelve
Reserve Banks will show which banks have in the vernacular of banking
improved their reserve position by "cleaning up" and which appear to
be strong largely because of heavy additions td their gold holdings.
I would be inclined to suggest in connection with the Governor's
proposal, the consideration of this thought: that in making a general
revision of Reserve Bank rat as, those banks, I think they are four or
five in number, that show the greatest amount of cleaning up during
the past year, that show the greatest improvement in their reserve
position through liquidation rather than through increased gold holdings,
should be the leaders in any downward revision of rates.
While on the subject of reserve ratios let me express my
opinion in passing ,in answer to a question asked in yesterday's conference , that I regard the reserve percentage of the Federal Reserve
Banks at the present time as a pretty worthless indicator of discount
policy.
I regard it as almost worse than useless as a guide to changes
in discount rates•
It is utterly misleading and will be until some
considerable number of leading commercial countrias are operating upon
something like a gold basis.
I think we are likely to experience a good
deal of embarrassment over the Reserve Banks showing a high reserve ratio
simply because they are the dumping ground of the world's gold. This
will occur when we get up against a situation where it will be good
banking and economic policy to undertake to control the expansion of
-15credit by a rise of rates.
x-3400
Sooner or later, and. I think sooner
rather than later, we shall find, ourselves confronted with just such
a situation, a situation which unless controlled will develop into a
secondary inflation and culminate in a secondary crisis., Unless we
are forehanded and resolute enough to apply rate pressure before
business and credit expansion gets too much headway, and this quite
irrespective of how high our reserves may happen to be, there will be
trouble.
With regard to the matter of gold policy touched on in the
discussions this morning, I may say that I do not feel very much enthusiasm for the suggestion that gold or gold certificates shall be
put into circulation to an amount of a hundred or perhaps only fifty
millions.
If we are going to restore gold to circulation, let's do
it boldly, not hesitatingly.
The Federal Reserve System has reached
a position, I think, where when it moves it should move on strategic
lines, not on merely tactical lines. With respect to gold, as with
respect to discount rates, let us take a big and broad position and not
maneuver timidly.
It is my belief and certainly iry hope that the gold
which we have received in unprecedented volume in the last year we hold
essentially as economic trustees.
The pporest use to make of this
gold is to put it into circulation in this country.
The best use we
can make of it is, when the situation is right for such intervention,
to use it to help the restoration of the currency in Europe and the restoration of the gold standard, there in at least some qualified form.
We shall ultimately have to take a very positive part in the financial
and economic reconstruction of Europe.
Part of our assistance will, I
*16-
x3u00
believe, take the form,through specified gold loans, of sending
some of the gold which we have received during the current year in
such huge amounts, back to Europe to be used in effecting currency
reorganizations there.
The movement of gold into the United States
in 1921 is absolutely without parallel or precedent.
The countries
which have sent us this gold have sent it not because they are rich,
not because they can afford to dispense with it in their currency
and credit organization, but because a crisis has been reached in
their financial relations with us as a result of which an increasing
proportion of business has got to be conducted on a cash basis.
Practically one-third, perhaps more, of the excess of the exports we
have sent to Europe during the current year have been paid for with
gold.
This is a very serious situation.
Cash payments seriously
restrict business. Nor can trade go on in considerable volume if the
existing rapidly and violently fluctuating exchanges do not find
correction.
But there can be no correction except as some gold is
put into the foundations of the currency structures of the now distressed countries of Europe.
My view has long been that the function of the Federal Reserve
System is to continue to hold this gold in its vaults where it now
is mobilized and whence it can be readily mobilized for use elsewhere
when the moment arrives, and not to demobilize it.
I should be very
sorry to see the Reserve System pursue a policy which indicated lack
of comprehension of the situation in Europe, lack of appreciation of
our relation to it, lack of appreciation of the obligation which we must
sooner or later assume, lack of appreciation of the stark fact that we
-17-
X-3U00
axe going to assume that obligation whether we now intend to or not.
I repeat we are going to do it because we must in our own interest
as well as in the interest of Europe. The proposal, therefore, to
take this gold out of the vaults of the Reserve Banks and to dissipate
it by putting it into circulation to my mind means either that we
lack confidence in our ability to restrain an expansion of credit
when we show a high reserve (should such restraint become desirable)
or because we are proceeding as theorists in the matter of our gold
policy and slavishly adopting the principle that there can be no gold
standard in a country unless it is buttressed by a considerable dispersion of gold in the pockets of the people.
It is my opinion that there will be no gold standard in any
useful sense for us unless there is at least a qualified restoration
of the gold standard in the countries of Europe.
So long as gold
moves as it now does, not as a normal instrumentality of commerce but
as the instrumentality of the pawnbroker, there is going to be no gold
standard in a regulatory sense.
While it does not pertain to the present discussion, I am, nevertheless, tempted to indulge myself in this connection to express the
thought that the Federal Reserve Conference having clarified the atmosphere with regard to credit conditions and discount policies, could not
devote its thought more usefully than to investigate and study what
there is that we can usefully do to help the restoration of a better
currency and exchange condition in Europe and to devise soma plan for
intervention when the moment is ripe for intervention.
I am inclined
- is -
x-3400
to think that the time is not far off when something can and should
he done.
If a general clarification and improvement of the general
international situation follows the conference to he held in this city
next month, if something is done to alter the practices and policies
which have given rise to the need or the supposed need of extravagant
expenditures for armaments, and furthermore if something is done to
show the mischievous and obstructive effect of economic and financial
barriers between countries, the time will be near when something can
be undertaken to initiate a constructive program of currency and exchange restoration.
As the strongest nation in the world and as the
custodian of the greatest gold hoard that has ever been massed in any
single control in the history of Christendom, the obligation to blaze
the way - to do the thinking - to do the planning, rests with the
group of men who are assembled in this room.
X-3401
TREASURY DEPARTMENT
Office of the Secretary
mSHINGTON
May 6, 1922.
The Governor
Federal Reserve Board..
Sir:
You are hereby advised that the Department has referred to the
General Accounting Office, Treasury Department Division, for settlement
the account of the Bureau of Engraving and Printing for preparing Federal
Reserve notes during the period April 1 to April 30, 1922, amounting to
$77,196.06, as follows:Federal Reserve Notes. 1914
&5
New York.....
Philadelphia.
Cleveland....
Richmond.....
Atlanta
Chicago.
St. Louis....
Minneapolis
Kansas City..
Dallas ......
San Francisco
141,000
100,000
145,000
37,000
71,000
23,000
• iio
$20
£50
11,000
87,000
41,000
7,000
44,000
19,000
128,000
33,000
61,000
12,000
11,000
13,000
6,000
— — —
64,000
129,000
10,000
203,000
923,000
51,000
20,000
1,000
40.000
321,000
— — — .
4,000
10,000
11,000
— — —
—
•»"
— — —
—
19,000
1,557,000 sheets at ^.49.58 per M .... $>77,196.06
Total
295,000
226,000
247,000
56,000
1
126,000
— — 42,000
— —
4,000
125,000
164,000
4,000
11,000
—f—
261.000
6,000 1,557,000
2,000
—
— — —
18.000
288,00U
#100
X-3401
— 2 —
The charges against thei several ]
Federal Reserve Banks are
as follows:
Sheets
Compensation
New York..... 295,000
Philadelphia. 226,000
Cleveland.... .247,000
Richmond..... 56,000
126,000
42,000
4,000
St. Louis....
Minneapolis.. 125,000
Kansas City.. 164,000
Dallas....... 11,000
San Francisco 261.000
1,557,000
4,911.75
3,762.90
4,112.55
932.40
2,097.90
699.20
66.60
2,081.25
2,730.60
183,15
4,345.65
25,924.05
Plate
Inc.ComPrinting Materials pensation
4,711.15
3,609.22
3,944.59
894.32
2,012.22
670.74
63.88
1,996.25
2,619.08
175.67
4.168.17
24,865,29
Total
3,601.95 1,401.25 14,626.10
2,759.46 1,073.50 11,205.08
3,015.87 1,173.25 12,246.26
2,776.48
266.00
683.76
6,247.08
598.50
1,538.46
2,082.36
199.50
512.82
198.32
19.00
48.84
6,197.50
593.75
1,526.25
8,131.12
779.00
2,002.44
545,38
52.25
134,31
1.239.75 12.940.38
3.186.01
18,010.97 7,395.75 77,196.06
The Bureau appropriations will be reimbursed in the above amount
from the indefinite appropriation "Preparation and Issue of Federal Reserve
Notes, Reimbursable", and it is requested that your board cause such indefinite appropriation to be reimbursed in like amount.
Respectfully,
Wm .S Br ought on,
Commissioner.
f
TREASURY lEPARTMENT
Office of the SBcretary
Washington
X-340la
May 6, 1922.
The Governor
Federal Reserve Board.
Sir:
You are hereby advised that the Department has referred to the
General Accounting Office, Treasury Department Division, for settlement
the account of the Bureau of Engraving and Printing for preparing Federal
Reserve notes during the period April 1 to April 30, 1922, amounting to
$69.41, as follows,Federal Reserve Notes. 1918
$500
Total
900
Kansas City
$1000
500
' 1,400
1400 sheets at §49.58 per M . . . . #69.41
The charges against the Federal Reserve Bank of Kansas City
are as follows,Sheets
Compensation
Plate
Printing
Materials
1,400
#23.31
#22.36
#17.09
Inc. Compensation
#6.65
Total
#69.41
The Bureau appropriations will be reimbursed in the above amount
from the indefinite appropriation "Preparation and Issue of Federal Reserve
Notes, Reimbursable", and it is requested that your board cause such indefinite appropriation to be reimbursed in like amount.
Respectfully,
WmSJBr ought on,
Commissioner.
'
"T
. FEDERAL RESERVE BOARD .
GOLD SET! LBMEJT. FUBD
Summary of transactions for period ending May IX, 1922.
Balance last
Gold
Federal
statement
Reserve
Withdrawals
May 4, 1922.
Bank of
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
$
64,919,022.38
9,543,346.64
29,328,514.35
33,057,067.18
11,160,808.67
33,419,686.10
$ 441,082,821.38 $
Federal
Reserve
Bank of
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
21,913,295.35 $
77,724,740.06
57,055,544.85
43,944,083.89
33,641,794*32
25,374,917.59
663,535.00 $
1,324,495.00
887,450.00
1,669,847*52
1,237,980.00
800,900.00
691,450.00
Gold
Deposits
51,100.00
3,067,700.00
1,000,000.00
3,000,000.00
720,800.00
1,000,800.00
4,002,100.00
378,912.35
1,288,430.00
1,198,650.00
855,400.00
2,001,000.00
2,000,000.00
11,717,849.87 $
7.505,500.00
23,628,200.00
'
(CONFIDENTIAL)
~
Aggregate
Aggregate
deposits and
. withdrawals
and transfers
transfers from
to Agent's fund
Agent's fund
$
$
$
663,535.00
51,100.00
1,324,495.00
3,067,700.00
887,450.00
1,000,000.00
1,669,847.52
3,000,000.00
1,237,980.00
800,900.00
1,000,800.00
691,450.00
4,002,100.00
720,800.00
378,912.35
2,001,000.00
3,288,430.00
2,000,000.00
1,198,650.00
8,389,000.00
8,855,400.00
24,511,700.00 $
$
21,717,849.87 $
Settlements from May 5 , 1922 to May 11, 1922
inclusive.
$
Set
Debits
1,126,052.60 $
4,988,415.58
9,608,871.29
6,876,255.57
7,862,901.53
3,450,364.61
7,252,058.55
1,151,130.22
3,256,570.63
Total
' Debits
96,270,857.66 $
356,316,623.20
120,016,734.11
95,391,380.47
85,378,392.05
39,946,619.02
202,873,282.52
104,081,982.92
29,520,140.94
77,664,164.00
38,811,758.42
52.328.283.84
Total
Credits
95,144,805.06
399,555,445.71
115,028,318.53
85,782,509.18
87,677,955.52
39,980,855-62
195,997,026.95
96,219,081.39
26,069,776.33
70,412,105.45
37,660,628.20
49.071.713.21
$
1$ 45,572,620.58 | $ 1,298,600,219,15 II 1 , 2 9 8 , 6 0 0 , 2 1 9 . 1 5 1$
Balance in
fund at close
of business
May 11, 1922.
• Net
Credits
43,238,822.51
$
2,299,563.47
34,234.60
4 5 , 5 7 2 , 6 2 0 . 5 8 1$
20,123,707.75 $
us,690,167.57
54,247,379.27
34,665,365.08
37,703,377.79
25,608,252.19
60,352,116.81
4,961,745.11
25,499,237.39
24,517,578.63
10,811,028.45
29.696.715.47
X-3402
Washington, D. C.
May 12, 1922.
T R A N S F E R S
Debits
—
$
4,000,000.00
Credits
1,000,000.00
1,000,000.00
2,000,000.00
4,000,000.00 $ 4,000,000-00
Summary of changes in ownership of gold by banks through
transfers and settlements.
Decrease
1,126,052.60 $
4,988,415-58
8,608,871.29
Increase
39,238,822.51
2,299,563.47
1,034,234.60
4,876,255.57
7,862,901.53
3,450,364*61
7,252,058.55
1,151,130.22
3,256,570.63
443,876,671.511$ 4 2 , 5 7 2 , 6 2 0 . 5 8 ($ 42,572,629*5*
Or
03
'
F E D E R A L
R E S E R V E
w -i iJ. UL i X u uvula ivi pox ; . t5«u*ng ivay ±J A7":*
j dty J t c
u
f
Balance last
Federal
Gold
Gold
Reserve
statement
Agent at
May 4, 1922.
Withdrawals
Deposits
123,000,000
$
-
$
-
VUiVriiJ&l
Deposits
Total
through
transfers
Withdrawals
from bank
Withdrawals
for
transfers
to hank
$
$
2-3402a
Washington, D. C.
title»
y Ac
-^T
Balance at
Total
close of
business
Deposits
May 11, 1922.
1
$
1
1
Boston
AGENTS
New York
401,000,000
-
-
-
-
Philadelphia
149,389,260
-
-
-
-
Cleveland
165,000,000
-
-
-
Richmond
39,795,000
-
4,000,000
-
-
Atlanta
91,000,000
-
1,500,000
-
—
Chicago
342,644,500
5,000,000
-
-
5,000,000
J
St. Louis
60,800,000
2,000,000
-
r
2,000,000
|
Minneapolis
16,000,000
-
Kansas City
42,360,000
2,000,000
Dallas
10,000,000
-
195,592,500
-
San Francisco
Total
| 1,636,581,260
4
j$
9,000,000
-
1,500,000
.
-
—
1,000,000
{$ 8,000,000
2,000,000
-
-
J
$
883,500
-
—
2,000,000
149,389,§60
A
165,000,000
(
4,000,000
43,795,000
1,500,000
92,500,000
337,644,500
.
1,500,000
|
1
883,500
10,000,000
I
1$ 9,883,500
I
f$
j
60,300,000
16,000,000
1
3,000,000
43,360,000
10,000,000
1
8,000,000
[$
1
-
J
-
883,500
i
1
-
123,000,000
401,000,000
1
-
$
8,000,000
202,709,000
18,000,000
|$
j 1,644,697,760
Dt
• COd-
FEDERAL RESERVE BOARD
WASHINGTON
X-3U03
May 12, 1922.
Dear Sir:
You are advised that that division of
the Board's organization known as the "Division
of RSports apd Statistics" will hereafter be
known as the "Division of Bank Operations".
Very truly yours,
Walter ,L. Eddy,
Assistant Secretary.
TO THE GOVERNORS OF ALL F. R. BANKS
( COPIES TO THE F. R. AGENTS)
I
t
FEDERAL RESERVE BOARD
WASHINGTON
X-34oU
May 16, 1552.
SUBJECT:
Senate Bill No. 3531.
Dear Sir:
For your information there is enclosed herewith a
copy of Senate Bill No. 3531 a i . a copy of the Board's letter
zd
to the Chairman of the Senate Conroittee on Banking and Currency,
setting forth its views with respect to the proposed legislation.
Very truly yours,
Vice
G o v e r n o r .
(Enclosures)
TO THE.FEDERAL RESERVE AGENTS OF ALL THE BANKS
COPY TO GOVERNORS.
COPY
X-3404a
May 4,. 1922.
Honorable George P« McLean,
Chairman, Banking & Currency Committee,
United States Senate.
My dear Mr. Chairman:
Receipt is acknowledged of your letter of May 2, 1922, in which
you request the views of the Federal Reserve Board with regard to Senate Bill 3531* The bill, if enacted, would amend Section 9 of the Federal Reserve Act so as to make eligible for membership in the Federal
Reserve System State banks having a capital of not less than 60fc of the
amount required under the terms of. the present law, provided, that 20^
of the net income of a bank admitted to membership under the authority
of this amendment shall be set aside annually in a fund from which the
capital of the bank shall be increased from time to time until its
capital amounts to not less than that now required by the law.
At the time your letter was received a conference of the Governors of the Federal Reserve Banks was in session, and I laid your letter and S. 3531 before that conference. After some discussion of the
proposed legislation a vote was taken, the result of which indicated
that 8 of the 11 Governors then present favored the enactment of the
bill.
The Federal Reserve Boara has also considered the proposed
legislation and by a majority vote has instructed me to write you expressing its approval of S. 3531*
The effect of the enactment of the bill would be to make eligible for membership in the Federal Reserve System a large number of
State banks, with a capital of $15,000 to $20,000, which are not eligible at the present time because Section 9 of the Federal Reserve Act
now requires that every State bank applying for membership shall have
a capital sufficient to entitle it to become a national bank in the
place where it is located, and the minimum capital required of national
banks is $2$,000.
The bill at the same time recognizes the principle
embodied in the National Bank Act that every incorporated bank should
have a capital of at least $2$,000, for under the proposed amendment
every bank admitted to membership with a smaller capital would be required to set aside 20/j of its net earnings until it possessed a capital equal to that amount.
X-34o4a
-
2
-
There is no doubt that the banking machinery of this country would
"be made more effective and generally useful, if the sound and properly
managed banks which still remain outside the Federal Reserve System were
brought into it.
This fact was pointed out, in the chapter entitled
"Defects and Deficiencies of the Banking Machinery", in Part II of the
recent report of the Joint Commission of Agricultural Inquiry, from
which the following paragraph is taken:
"A further defect in the banking machinery of the
country is found in the fact that about 20,000
of the independent banks of the country,representing from 35 to 4o per cent of the banking resources,
are not members of the Federal Reserve System.
These banks are without direct access to the general
reservoir of credit, consequently mast rely for
the expansion necessary in times of stress or business expansion upon the accommodations which it is
possible to secure from their correspondents. These
banks contribute little to the general reserves of
the country, as those reserves are now represented
principally by deposits in the Federal Reserve Banks.
Consequently, if they are permitted to borrow either
directly or indirectly from the Federal Reserve
Banks in times of stress or business expansion they
mast do so at the expense of the reserves contributed
by the banks which are members of the Federal Reserve
System."
The Board feels that the enactment of S-3331 would be a distinct
step toward remedying this defect. As the great majority of banks with
capital of less than $25,000 are located in the agricultural sections
of the country, and as a greater proportion of their loans represent advances to farmers than is the case with the larger institutions, there
can be little doubt that the passage of S-3531 would be effective in
making the benefits of the Federal Reserve System mora generally available to small farmers.
Two members of the Board desire me to express their opposition
to this proposed legislation ujson the ground inter alia that it discriminates against national banks.
Respectfully,
(Signed) W. P. G. Harding
G o v e r n o r .
s-3531-
COPY
X-3404b
67th Congress,2d Session.
IN THE SENATE OF THE UNITED STATES
April 20 (calendar day, May l), 1922.
Mr. Harris introduced the following "bill; which was read twice and
referred to the Committee on Banking and Currency.
A BILL
To amend section 9 of the Federal Reserve Act.
Be it enacted " y the Senate and House of Representatives of
b
the United States of America in Congress assembled, That paragraph 9
of section 9 of the Federal Resarve Act as amended is amended to read
as follows:
"No applying bank shall be admitted to membership in a Federal
reserve bank unless (a) it possesses a paid-up, unimpaired capital
sufficient to entitle it to become a national banking association in
the place where it is situated under the provisions of the National Bank
Act, or (b) it possesses a paid-up, unimpaired capital of at least 60
per centum of the amount sufficient to entitle it to become a national
banking association in the place where it is situated under the provisions of the National Bank Act and, under such rules and regulations
as the Federal Reserve Board may prescribe, it sets aside annually in a
fund an amount not less than 20 per centum of its net income for the preceding year and it increases its capital from such fund from time to time
until it possesses a paid-up,and unimpaired capital not less than the
capital which would have been requiredif such bank had been admitted to
membership under the provisions of subdivision (a) of this paragraph."
FEDERAL RESERVE BOARD
WASHINGTON
X-3%05
May 15, 1922.
SUBJECT:
Daylight Saving, Baltimore Branch.
Dear Sir:
You. were advised by the Federal Reserve
Board in its telegram of April 12, 1922, that the
Baltimore Branch of the Federal Reserve Bank of Richmond would operate on the daylight saving plan during
the period May 1 to August J>1, "both dates inclusive.
The Board is now advised by the Federal
Reserve Bank of Richmond that its Baltimore Branch
will operate on the daylight saving plan during the
period May 1 to August 27.
Standard time will,
therefore, be in effect again in Baltimore on August 28.
Very truly yours,
Walter L. Eddy,
Assistant Secretary.
TO THE GOVERNORS OF ALL
FEDERAL RESERVE BANKS.
FEDERAL RESERVE BOARD
WASHINGTON
X-3U06
May 15, 1922.
SUBJECT: Method of Receipting for Shipments of
Currency to Member Banks.
Dear Sir:
Until recently it was the practice of one of the
Federal Reserve Banks when making shipments of currency to
banks in its District to enclose therewith a stamped receipt
card to be signed by the consignee bank and returned to the
Federal Reserve Bank.
The Post Office authorities objected
to this practice on the ground that it gave undue publicity
to the fact that considerable sums of money are being transmitted through the mails.
The matter was taken up with the Federal Reserve
Bank in question which advised the Board that its practice
now is to enclose with each shipment of currency a printed
form of receipt and stamped envelope addressed to the proper
department of the Federal Reserve Bank.
At the request of the Post Office Department this
matter is being brought to the attention of all Federal Reserve Banks with a view of effecting discontinuance of the
practice, wherever it may exist, of having banks to which
currency is shipped acknowledge receipt of same by postcard.
Very truly yours,
Vice Governor.
TO THE GOVERNORS OF ALL FEDERAL RESERVE BANKS
EXCEPT CLEVELAND.
FEDERAL RESERVE BOARD
WASHINGTON
May 17, 1922.
X-3407,
SUBJECT:
Form of Report and Manual for Distribution of Functional
Expense of Federal Reserve Banks.
Dear Sir:
The form of report covering functional expenses, together
with the manual giving detailed instructions for distribution of the
cost of Various items to be included under each function and expense
unit) which was prepared by a subcorotittee of the Federal Reserve
Board's Committee on Economy and Efficiency, and adopted by operating
officials of the Federal Reserve Banks at the conference held in
Chicago on April 24 and 25, has been approved by the Federal Reserve
Board.
In accordance with the action taken at the conference, all
Federal Reserve Banks should furnish the Board's Committee on Economy
and Efficiency with monthly reports on forms included in Schedule E
(this schedule is now in the hands of the printer, and the banks will
be supplied with copies in the near future) covering operations of the
Head Office and of each branch beginning with the month of July.
Banks which find it possible to do so should also submit reports of
operations covering the month of June. These reports should be addressed, Committee on Economy and Efficiency, Federal Reserve Board,
Washington.
It should be understood that reports on the new forms do not
in any way supersede the regular monthly expense reports on Form 96
and that the Banks will be expected to continue to submit monthly expense reports on that form, which should be made out in accordance
With instructions regarding the preparation of reports of earnings
and expenses of the Federal Reserve Banks issued by the Board under
date of June 20, 1921.
Very truly yours,
Vice Governor.
Letter to all Chairmen
Governors)
(Copies to
FEDERAL RESERVE BOARD
WASHINGTON
X-340S
May 18, 1922.
SUBJECT:
Code words to be used in connection with
Transfers to Five Per Cent Redemption
Fund Accounts of National Banks*
Dear Sir:
With further reference to the Boardrs letter of
May 8, 1922, (X-3398) describing a plan whereby funds deposited by national banks with Federal Reserve Banks and
Branches for credit in the national banks* Five Per Cent
Redepption Fund accounts will be covered into the Five Per
Cent Redemption Fund against national bank note circulation
on the books of the Treasurer U. S., as of the sane day
they are received by the Federal Reserve Banks and Branches,
it will be noted that certain code words were adopted by the
Board for use in connection with this new plan, to go into
effect June 1, 1922»
It is now requested that the code words DURBAR
and DUSKY, designated in that letter, be added to the bottom
of page SO of the new code book, to follow the code word
DOPLICITY.
Yours very truly,
Walter L„fcEddy,
Assistant Secretary.
TO THE GOVERNORS OF ALL
FEDERAL RESERVE BANKS.
GOLD
Gold
Balance last
statement
May 11, 1922.
Federal
Reserve
Bank of
Withdrawals
$ 20,123,707.75 $
Boston
New York
115»690467.57
Philadelphia
54,247,379.27
34,665,365.08
Cleveland
37,703,377-79
Richmond
25,608,252.19
Atlanta
60,352,116.81
Chicago
4,961,745.11
St. Louis
25.499,237.39
Minneapolis
24,517,578.63
Kansas City
IP,811,028.45
Dallas
29,696,715.47
San Francisco
Total
( $ 4 4 3 , 8 7 6 , 6 7 1 . 5 1 1$
Federal
Reserve
Bank of
Boston.
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
766,859-00 $
1,1445,295-00
946,600,00
1,293,617.50
1,131.450.00
730,600.00
966,892.96
883,000.00
337,180.00
1,no ,500.00
857,300.00
1,055,930.00
11,525,224,46 |$
ISDSEAL RESERVE BOARD
S E T T L E M E N T FUND
X-3UIO
Washington, D. C.
Gold
Aggregate
Aggregate
. withdrawals
deposits and
T R A N S F
Deposits
and transfers
transfers from
Debits
to Agent1 s fund
Agent's fund
1,000,000.00 $
2,000.00 $
2,000.00 $
766,859.00 $
13,500,000.00
2,025,000.00
2,025,000.00
1,445,295.00
946,600.00
50.00
50.00
18,000,000*00
3,000,000*00
1,293,617.50
1,000,000.00
1,000,000.00
1,131,450.00
1,000,650.00
1,000,650.00
730,600.00
4,000,000.00
4,000,000.00
966,892.96
1,000,000.00
883,000.00
6,054,300.00
2,054,300.00
1,000,000.00
1,300.00
1,300.00
337,180.00
1,110,500.00
857,300.00
1,055,930-00
2,500,700.00
1,000,300.00
4,000,400.00
20,584,700.00 1$
2,500,700.00
1,000,300.00
14,455,900.00
11,525,224.46 j$
Net
Debits
$
$
11,142,810.15
3,195,116.67
3,857,349.32
9,065,166.53
14,988,740.77
Total
Debits
115,075.958.15 $
413,385,567.43
140,749,478.53
115,006,303.32
89,940,835.82
43,704,372.60
233,118,307.20
102,553,324.63
25,893,469-77
85,986,480.53
40,407,036.94
61,530,873-97
Total
Credits
119,014,586.28
435,070,031.14
129,606,668.38
111,811,186.65
93,451,194,59
$
45,262,606.59
234,310,318.60
98,695.975-31
29,760,181*39
76,921,314.00
46,885,812.76
46,542,133-20
|$ U2.249.1S3.U4 |$ 1,467.352,008.89 |$1,467.352,008*8$ J$
Net
Credits
3,938,628.13
21,684,463.71
3,510,358.77
1.578,233.99
1,192,011.40
3,866,711.62
6,478,775.82
$
Credits
3,000,000.00
2,000,000.00
1,000,000.00
10,500,000.00
50,040,200.00 |$ 16,500,000.00 |$ 16,500,000.00
Balance in
fund at close
of business
May 18, 1922.
Settlements from May 12, 1922 to May 18, 1922
inclusive.
E R S
22,297,476.88
127,454,336.28
44,158,019.12
48,176,630-91
42,082,286.56
27,456,536.18
64,577,235-25
5,275,695.79
28,030,069.01
27,342,612.10
17,432,^)4.27
28,107,944.70
Sunmary of changes in ownership of gold by banks througi
transfers and settlements.
Decrease
$
-
9,142,81)0.15
3,195,116.67
Increase
$ 2,938,628.13
11,184,463.71
4,510,35847
1,578,233.99
4,857,349.32
14,988,740.77
1,192,011.40
2,866,711.62
1,434,833.47
6,478,775-82
42,249,183.44 |$ 482,391,647.05 |$ 32,184,016.91 I$32,184,016/91
Or
F E D E RAL
isactions tor peric>a ending may 15,
Summary of trai
Gold
Balance last
Federal
statement
Reserve
Withdrawals .
Agent at May 11, 1922*
Boston
$
123,000,000
New York
401,000,000
Philadelphia
149,3%,260
Cleveland
$
165,000,000
10,000,000
Deposits
$
92,500,000
2,500,000
Chicago
337,644,500
7,000,000
St. Louis
60,300,000
Minneapolis
16,000,000
Kansas City
43,360,000
Dallas
10,000,000
Total
|$ 1,644,697,760
|$
34,500,000
—
-
4,000,000
-
15,000,000
-
150,000,000
-
3,000,000
2,500,000
-
7,000,000
-
4,000,000
-
-
|$
-
2,500,000
-
-
10,455,500
-
1,000,000
-
-
-
-
-
-
9,500,000
115,000,000
144,389,266
-
1,000,000
j$
$
-
-
-
7,000,000
202,709,000
San Francisco
5,000,000
-
15,000,000
2,500,000
-
$
5,000,000
-
-
-
10,000,000
Balance at
close of
business
May 18. 1922.
401,000,000
—
1,000,000
-
Deposits
-
—
-
Withdrawals
$
Total
-
-
-
3,000,000
Atlanta
-
-
-
XUBiJJiU
JUiMLlU
Total
Deposits
through
transfers
from hank
$
$
X-34lOa
Washington, D. C-
-
5,000,000
43,795.000
5,000,000
A G E
Withdrawals
for
transfers
to hank
Gold
-
Richmond
R E S E R V E
29,455,500
—
1,000,000
-
17,455,500
1$ 63,955,500
**
1$
9,500,000
40,795,000
91,000,000
330,644,500
58,800,000
16,000,000
44,360,000
10,000,000
185,253,500
|$ 1,590,242.260
•j
ir
^
9
COPY
THE AMERICAN BANKERS ASSOCIATION
5 Nassau St.,
New York, N.Y.
X-3U11
May 16th, 1922.
Mr. John R. Mitchell, Member,
Federal Reserve Board,
Washington, D. C.
My dear Mr. Mitchell;
Mr. James Ringold of Denver and Vice President of the
Clearing House Section of the American Bankers Association, asked
me to write you relative to the conversation he had with you on
Saturday regarding the practicability of having district designations
and "branch designations for the Federal Reserve Lanks and their
members, combined in somQ manner with the American Bankers Association numerical number. He suggested that I write you regarding
this matter and tell you of the action taken by the members of the
Executive Committee of the Section at the Spring meeting at White
Sulphur Springs, last week. ~
Governor Harding has been in communication with Mr.
McAdams, President of the American Bankers Association, who referred this matter to Mr. Washburn, President of the Clearing House
Section, under whose direction the Numerical System is operating.
The suggestion was made at our meeting held last week that we recommend to the Committee on the Numerical System and they in turn
recommend to the Federal Reserve Board if it meets with their
approval, a plan to be worked out whereby the twelve Federal Reserve
Banks be listed alphabetically, for instance, Boston - A, New York - B,
Philadelphia - C, Cleveland - D, and so forth, and the branch designations carry an abbreviation of the city in which it is located, for
instance, in the Fourth Federal Reserve District, it would carry
D-Cleve, for Cleveland, D-Pitts for Pittsburgh, D-Cinn, for Ciny
cinnati.
This alphabetical designation to be placed immediately
under the numerical number appearing on all checks. By using the
alphabetical key for the Federal Reserve designations, there will
be no chance whatsoever of the clerks in the transit departments
listing the checks incorrectly, as would be the case as suggested
by the Federal Reserve Bank of San Francisco, which bank submitted
to Governor Harding an idea whereby their head office would be
listed as 11-21 28-4 for Spokane and 19-3 for Seattle. Under
12-S,FiX2 -Sp.
12-Se.
our suggestion, the Federal Reserve Bank of San Francisco and the
branches would be listed as follows:
11-21
Spokane 2g-U
Seattle 19-5
L-S.F.
L-Sp.
L-Se.
The members of the Clearing House Committee also feel
X-34II
that the placing of the Federal Reserve Bank designations as
suggested, on checks and drafts, if agreeable to the Committee
on the Numerical System, can be accomplished more readily through
Federal Reserve agencies than through the American Bankers Association, as each "branch of the Federal Reserve Bank would merely
have to take up the matter with banks in its own district. However, the American Bankers Association will lend its untiring
support to the Federal Reserve Board and the Federal Reserve Banks
in helping to bring this about.
We feel that the Committee on the Numerical System
will concur with the action taken by the members of the Executive
Committee of the Clearing House Section and I will be glad to let
you know of the action of this Committee after they have held a
meeting regarding this matter.
Will be pleased to have you let
me know just what you think of the proposition that we suggest.
Hoping to hear from you regarding this matter and with
kindest regards, I remain
Yours very truly,
(Signed) D. A. Mullen
Secretary.
M/R
FEDERAL RESERVE BOARD
WASHINGTON
X-3^12
May
22, 1922.
SUBJECT: Expense Main Line, Leased Wire System,. April, 1922.
E»ar Sir:
Enclosed herewith you will find two mineograph
statementsX-3^12a and X~34l2b, covering in detail operations of the main line, Leased Wire System, during the
month of April, 1922.
Please credit the amount payable by your bank in
the general account, Treasurer U. S., on your books, and
issue c/D Form 1, National Banks, for account of "Salaries
and Expenses, Federal Reserve Board, Special Fund", Leased
Wire System, sending duplicate C/D to Federal Reserve Board.
Very truly yours,
Fiscal Agent(Enclosures)
X-3Uj2a
REPORT SHOWING CLASSIFICATION AND NUMBER OF WORDS
TRANSMITTED OVER MAJN LINE OF TEE FEDERAL RESERVE
LEASED WIRE SYSTEM FOR THE MONTH OF APRIL, 1922.
Bank Business
Per cent of
Total Bank
Business (*)
'Treasury
Dept.
Business
29,366
200,627
51,4o4
76,879
70,008
60,813
124,336
79,542
4o,628
81,591
59,770
131,664
2.91
19,89
5.10
7.62
6.94
6.03
12.33
7.59
4.03
8.09
5.92
13.25
4,574
9,751
6,239
5,291
4,472
5,720
6,113
6,185
3,646
5,670
3,144
11 Ml
Total F. R.
Banks
1,008,628
Washington
288,420
100.00
72,262
32,5)3
From
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Grand Total
1,297,048
Percent of Total
15^,795
88.58$
10.57^
Bank Business
Treasury Business
1,297,048 words or 8 9 . 3 ^
154.795
" n 10.66
TOTAL
1,451,843
100.00)*
(*) These percentages used in calculating the
pro rata share of leased wire expenses as shown
on the accompanying statement (X-34l2b)
5 ™ % ! , RESERVE BOARD
WASHINGTON, D. C.
MAY 22, 1922.
War
Finance Corp.
Business
l4s
-
256
6,648
231
35
405
91
232
99
Total
34,085
210,378
57,643
82,426
81,128
66,764
130,484
86,132
44,365
87,493
63,013
14-5.121
8,145
. 4,215
1,089,035
375,168
12,360
1,464,203
0.85^
REPORT OF EXPENSE
MAIN LINE
X-3Ul2b
FEDERAL RESERVE LEASED WIRE SYSTEM APRIL,1922.
Name of Bank
Operators'
Salaries
Boston
$ 250.00
New York
789-9S
Philadelphia
225.00
Cleveland
366.00
Richmond
305.00
240.00
Atlanta
Chicago
(#) 4,985-98
1
St. Louis
300.00
Minneapolis
275.00
Kansas City
326.66
Dallas
170.00
San Francisco
395.00
Operators1
Overtime
$
20.00
-
(#)
(&)
(*)
(a)
—
-
-
-
-
11.00
-
-
-
-
-
-
-
-
Total
Expense
$
—
-
Fed. Res. Board
Total
Wire
Rental
250.00
809.98
225.00
366.00
305.00
240.00
4,996.98
300.00
275.00
326.66
170.00
395-00
Pro rata
Share of
Total
Expense
$ 686.75
4,69b,00
1,203.59
1,798.30
1,637.83
1,423.07
2,909.85
1,862.02
951-07
1,909-22
1,397-11
3,126.97
Credits
$
250.00
809-98
225.OO
366.OO
305.00
240.00
4,996.98
300.00
275-00
326.66
170.00
395.00
Payable to
Federal
Reserve
Board
$ 436.75
3,884.02
978-59
1,432.30
1,332.8$
1,183.0)
2,087-13 **)
1,#62.02
676.07
1,582.56
1,227.11
2,731.97
$17,579.88 17597.88
$8,628.62
$
J1.00
-
$26257.50
(a) 2657.72
23599.78
$23599-78
$ 8,659.62
$ 17027*29
(&) 2087.11
14940.16
Includes salaries of Washington Operators
Amount reimbursable to Chicago
Credit
Received $2,313*94 from Treasury Dept. and $343«78 from War Finance Corporation covering
business for months of October 1921 and March 1922, respectively.
FEDERAL RESERVE BOARD
WASHINGTON, D. C.
MAY 22, 1922.
FEDERAL RESERVE BOARD
WASHINGTON
X-3413
May 23, 1922*
SUBJECT: Acceptance Practices.
Dear Sir:
The Comptroller of the Currency recently held a
conference in Washington with the Chief National Bank Examiners
and through his courtesy the Board is enabled to lay before
you copy of a report made to him by a committee of examiners
upon improper acceptance practices which have been discovered.
The Board requests that you bring this report to the attention
of your bank's own examiners, of the discount committee and
of those of your officers who purchase acceptancesVery truly yours,
Governor.
(Enclosure)
TO THE CHAIBMENVOF i&L F. R. BANKS.
Copy to the Governors-
X-34l)a
COPY.
Washington, D, C.
May 5, 1922.
Comptroller of the Currency,
Washington, D. C.
Sir:
Your committee No. 1 submits its report upon improvement of the
character of acceptances by national banks and a discussion of bad.practices
which have been found.
The new regulations which have been issued by the Federal Reserve
Board, in connection with the use of bankers' acceptances covering export
and import transactions, emphasize the necessity of more carefully considering the basis upon which acceptance credits are being granted by the various
member banks.
In spite of the comprehensive regulations issued by the
Federal Reserve Board regarding this phase of banking practice, there have
been numerous and flagrant violations upon the part of the large as well
as the small banks*
The duty of strict supervision of the underlying
principles ^ipott which national banks grant their acceptance facilities
devolves to a very great extent upon the National Bank Examiners, and
special attention should be paid to that part of the examination, to see
that not only the letter but the spirit of the law is carried out.
It
might be helpful to point out some of the more common abuses of the acceptance privilege, which have been met with recently in the examination of
national banks.
Perhaps the most frequent abuse in connection with granting
acceptance facilities against import and export transactions is found in
the continued renewals given by some banks to their customers, aggravated
to a considerable extent by the difficulties which have arisen in American
foreign trade during the past two years,
When the Federal Reserve Board
announced its intention of showing greater leniency towards red is counting
by the Federal Reserve Banks of ue%ewals, in connection with transactions
effected by the world wide depression in business, many banks took advantage
of this %oo great and unintended an extent, and advances which were originally
made by means of acceptance credits, but which should have long since been
either liquidated or turned into a direct bank loan, were carried along by
the banks by means of continued renewals of acceptances.
A national bank
should not commit itself regarding renewals of acceptances at the time of
the opening of the credit. ' Each application for a renewal should be
judged upon its own merits at the maturity of the acceptance.
It is found,
however, that some banks have agreed to one or more renewals at the time
of the opening of the credit.
There have also been a number of cases
where acceptances have been renewed as many as five or six times against
X-3^13a
~
2
-
imports or exports of both raw materials and finished products.
The
tendency in such cases is for the hank to furnish working capital to
concerns by means of acceptance credits rather than by making them a
direct loan.
Some banks have granted acceptance facilities to American
exporters.against their foreign bills, which have been lodged with them
for collection.
This method has in some cases been abused through the
continued renewals of such acceptances, in spite of the fact that the
collections upon which they were based had been dishonored, extended or
returned because of non-payment.
All of these acceptances should have
been retired at maturity and a direct advance secured from the bank, if
necessary, to finance the delay.
There has even been one case of a
bank, which after finding that payment was delayed on various export
bills which they had discounted for one of their customers, requested
him to put them in funds by drawing a ninety day bill on the bank, Which
was accepted and discounted, thus wiping out the debit.in the direct
advance account.
In the recent Cuban crisis there were many instances of too
liberal renewals of acceptances in connection with various sugar credits.
In some cases the credit was in force from the time that the sugar cane
was growing until long after the arrival of the refined sugar in America.
The "dead season" financing has proved to be particularly objectionable.
Practically all of the so-called "sugar credits", in which most of the
large accepting banks participated, were subject to a considerable amount
of criticism as to the method by which the collateral was handled, particularly while the sugar was in Cuba.
There was no attempt made in
connection with these credits at the time of the various renewals to
adequately reduce the amount of the acceptances outstanding to conform
to the actual marketable value of the sugar held.
Although the sugar
was not really being financed by means of acceptances for a speculative
purpose, still, the banks enabled large amounts of sugar to be kept off
the market while stocks that were being held and which were not being
financed by the acceptance credits, were disposed of in the market.
Some member banks have not taken definite steps in connection
with granting acceptance facilities against export transactions to assure
themselves that there were actual and definite shipments involved.
They
have thought that it was sufficient to have a general understanding that
the proceeds of an acceptance would be used for the financing of shipments
of merchandise between any particular countries.
Also that it was quite
in order to grant acceptance credits with continued renewals to finance
continuous shipments of raw materials imported into the United States.
This financing should more properly have been taken care of as a direct
borrowing proposition rather than by means of continuously renewed
acceptances.
X-34l3a
-I
-
There have also been instances where acceptance credits have not
teen granted directly to the exporter or importer but to corporations which
have used the funds thus obtained for the purpose of financing the foreign
business of their customers«
In a general way the abuses which have come up in connection
with the granting of acceptance facilities against export and import
transactions apply in the case of credits governing domestic acceptances.
In these credits we agzin meet a number of cases where there have been
excessive renewals; where the banks have financed the carrying of goods
for a considerable period of time, if not for the speculative holding, at
least for the maintenance of prices above what would otherwise be the
real economic value; and where little regard has been paid in the case
of renewals to the depreciated value of the collateral against which the
acceptances were made.
There have been instances where domestic acceptances have been
given with practically no attention paid to the question of the accepting
bank being secured durin6 the life of the acceptance. As an instance of
this, one bank accepted drafts drawn against crude and refined oil in
storage on their customer's property or in his pipe lines.
CDomestic acceptance credits have also been used for the purpose of securing continued finance. An example may be mentioned where
a bank accepted time bills drawn upon them secured by warehouse receipts
covering cotton in warehouses. . These receipts were deposited by the
bank with a correspondent in the town where the warehouse was located,
with instructions to permit substitutions, allowing their customer to
receive the documents against trust receipt.
This resulted in the
collateral bein& continually changed, so that the accommodation was
really in the nature of a permanent Joan.
In another case acceptances were made for the account of a
cotton factor, who at the time of the acceptance pledged and deposited
warehouse receipts and signed contracts of sale with a bank. The amount
of the acceptances included his profit on the transaction, and no definite
time for the taking up of the cotton by the purchaser was agreed upon. As
the acceptances were renewed on a falling market for cotton no effort was
made to have the amount of the acceptances conform to the real value of
the cotton.
In one instance a bank was accepting against a domestic shipment
when the goods were being transported across the city by truck; a trip
requiring about thirty minutes.
X-3^13a
-
b
-
b
A flagrant misuse of acceptances may " e mentioned where a firm
desired to purchase some furs from another concern and wrote a letter
to a bank stating that it was holding the furs at their disposal and
induced the "bank to accept their time draft on themWith the money
S3 cured from the discount of the bank's acceptance the furs were actually
secured and gradually sold during the life of the acceptance.
There have been instances of some misconceptions arising in
connection with the interpretation of the Federal Reserve Board's definition
of a readily marketable staple#
One bank stretched this definition to
include bristles and brushes.
In another case watch parts were construed as staples and in
still another case acceptances were executed against dolls1 heads in
storage*
Another unwarranted abuse has been met where acceptances have
been given for the purpose of securing overdrafts * Acceptances have also
been executed by the same bank for the financing of the building of a
steamship in the United States for foreign owners•
The above is a summary of the most common abuses of acceptances
found in the recent examinations of national banks.
In view of the excellent material which has been issued by the Federal Reserve Board and the
American Acceptance Council on the correct method of financing domestic
and foreign business by means of acceptances, it would be quite useless to
reiterate the clear and concise suggestions made by them.
In fact during
the past seven years there has not been a subject in banking practice which ^
has received as much publicity as that of the acceptances#
In spite of this ?
scarcely an examination is made of one of the larger accepting banks without
finding some violations of the intent and purpose of the Federal Reserve
Act in connection with acceptances*
It is very difficult lor the Federal
Reserve Banks to discriminate between which acceptances are drawn in
accordance with the law and which are not, when member bank acceptances
are offered to them for rediscountFurthermore it is extremely awkward,
if not impossible for them to make inquiries regarding the transaction
actually behind an acceptance, when the bill is presented to them for
rediscount through a third party as it would necessarily have to be.
Perhaps the most practical method of remedying the situation
is to have more attention paid by the bank examiners to a bank * s acceptance activities,
A study should be made by a fully qualified member of
the bank examinerrs force of each acceptance credit, and he should satisfy
himself that the bank is entirely familiar with all of the details rei
garding the business, and especially that the underlying transactions
X-34l3a
- 5will liquidate the credits within a reasonable length of time.
The
examiner should assure himself that there is a responsible officer in
each bank who is thoroughly conversant with the law and regulations
governing acceptances, and any changes therein.
Particular inquiry
should be made in the case of all renewals to ascertain that the transaction
is still alive, and sfl&Ll forms a proper basis for being financed by means
of acceptances.
Above all an earnest endeavor should be made to obtain
the active cooperation of the bank officials as regards the placing of
national bank acceptances upon a correct basis*
(Signed)
D.
T.
H.
L.
C.
C.
W.
K.
Borden
Thomas
Scott
Roberts.
FEDERAL RESERVE BOARD
WASHINGTON
X-3I+IU
May 23, 1922.
SUBJECT: Personnel of Federal Reserve
Banks and Branches.
Bear Sir:
It is request3d that you forward to the Board a statement,
to reach Washington not later than June 10, giving the information
requested "below for the Head Office and each Branch separately, as
of December 31> 1921*
The figures shown should represent the
number and salaries of the personnel of your bank before the end-ofyear changes became effective.
1. Name, title, and annual salary of each
officer, also the department to which
each officer below the grade of cashier
or controller is assigned.
2.
Total number of employees, together with
their annual salaries in each of the
f oilowing departments:
Bapking
Federal Reserve Agents
Auditing
Fiscal Agency
It is also requested that statements similar to the above
be furnished to the Board as of June J>0, and December 31, 1922, and
thereafter as of June 30 and December 31 of each year.
Very truly yours,
Governor.
TO THE CHAIRMEN OF ALL FEDERAL RESERVE BANKS.
FEDERAL RESERVE BOARD
WASHINGTON
X-3U15
May 24, 1922.
SUBJECT:
Closing of b o o k s .
Dear Sir:
I n t h e p a s t it h a s b e e n t h e p o l i c y of t h e F e d e r a l R e serve B a n k s to close their b o o k s on J u n e 3 0 as w e l l a s o n D e c ember 31 of eaqh year, although the calendar year has been
c o n s i d e r e d as the f i s c a l y e a r .
A n u m b e r of t h e b a n k s n o w f i n d
it n e c e s s a r y t o s e t u p s u b s t a n t i a l a m o u n t s a s r e s e r v e s a g a i n s t
p r o b a b l e l o s s e s , a n d a s it is n o t p r a c t i c a b l e to e s t i m a t e w i t h
a n y fair degree of accuracy on June
t h e a m o u n t of s u c h r e s e r v e s w h i c h w i l l b e set aside o n D e c e m b e r 31, e n t r i e s m a d e on
J u n e 3 0 h a v e to b e r e v e r s e d or m a t e r i a l l y m o d i f i e d w h e n t h e
b o o k s are f i n a l l y closed-for the y e a r on D e c e m b e r 31•
I t is e v i d e n t t h e r e f o r e t h a t n e t r e s u l t s o f o p e r a t i o n s
cannot be a c c u r a t e l y shown for each of the two 6 - m o n t h p e r i o d s .
A c c o r d i n g l y the F e d e r a l R e s e r v e B o a r d r e q u e s t s that in the
f u t u r e the b o o k s of the F e d e r a l R e s e r v e B a n k s b e c l o s e d b u t
o n c e a y e a r , t h a t i s , o n D e c e m b e r 31*
This does not, however,
affect the payment of the u s u a l semi-annual d i v i d e n d on June 30,
a n d it is t h e r e f o r e r e q u e s t e d t h a t t h i s l e t t e r b e p r e s e n t e d to
the B o a r d of D i r e c t o r s of your b a n k at a n e a r l y d a t e , so that
t h e i r f o r m a l r e s o l u t i o n in r e g a r d to p a y m e n t of d i v i d e n d s f o r
t h e f i r s t h a l f o f the p r e s e n t y e a r m a y r e a c h t h e B o a r d n o t
later than June 20, 1922,
Very truly yours,
G o v e r n o r .
LETTER SENT TO EACH CHAIRMAN
COPIES TO GOVERNORS.
FEDERAL RESERVE BOARD
WASHINGTON
X-3U16
May 24, 1922.
SUBJECT:
Minimum Bate for Open Market Purchases
of Trade Acceptances.
Dear Sir:
A t t h e i r r e c e n t c o n f e r e n c e the G o v e r n o r s of the F e d e r a l
R e s e r v e B a n k s r e c o m m e n d e d t h a t n o p r e f e r e n t i a l r e d i s c o u n t r a t e "be
established for trade acceptances, but that in f i x i n g rates for
o p e n market p u r c h a s e s of trade a c c e p t a n c e s c o n s i d e r a t i o n b e g i v e n
to the especial q u a l i t y of that k i n d of p a p e r .
This recommendation
h a s b e e n approved b y the Federal R e s e r v e B o a r d , and the B o a r d h e r e b y
a n n o u n c e s t h a t it i s p r e p a r e d , u p o n t h e a p p l i c a t i o n o f a n y F e d e r a l
R e s e r v e B a n k , to a p p r o v e a m i n i m u m rate at w h i c h e l i g i b l e trade
a c c e p t a n c e s m a y b e p u r c h a s e d in t h e o p e n m a r k e t b y t h e a p p l y i n g
Federal Reserve Bank, such minimum buying rate to be not less than
o n e - h a l f of one p a r cent above the m i n i m u m b u y i n g rate f o r b a n k e r s '
a c c e p t a n c e s e f f e c t i v e at s u c h F e d e r a l R e s e r v e B a n k *
In connection w i t h the r e c o m m e n d a t i o n referred to, the
G o v e r n o r s r e q u e s t e d the F e d e r a l R e s e r v e B o a r d to c o n s i d e r t h e a d v i s a b i l i t y of a m e n d i n g its r e g u l a t i o n n o w in e f f e c t g o v e r n i n g o p e n
m a r k e t p u r c h a s e s o f t r a d e a c c e p t a n c e s . T h i s r e g u l a t i o n is R e g u l a t i o n
B , S e r i e s o f 1 9 2 1 , w h i c h , a s its t i t l e a n d t e x t b o t h i n d i c a t e ,
a u t h o r i z e s F e d e r a l R e s e r v e B a n k s , u p o n the c o n d i t i o n s t h e r e i n p r e scribed, to p u r c h a s e in the o p e n m a r k e t b i l l s of exchange, trade
acceptances and bankers1 acceptances.
T h e B o a r d is o f t h e
o p i n i o n that there is n o o c c a s i o n at the p r e s e n t time f o r a m e n d ing this regulation.
Very truly yours,
G o v e r n o r .
LETTER TO CHAIRMEN
Copy to Governors.
FEDERAL RESERVE BOARD
WASHINGTON
X-3417
M a y 2 4 , 1922.
SUBJECT: "Reserved for Government
Franchise Tax."
Dear Sir:
I n a c c o r d a n c e w i t h t h e r e c o m m e n d a t i o n of t h e C o n f e r ence of G o v e r n o r s of F e d e r a l R e s e r v e B a n k s h e l d i n W a s h i n g t o n
o n M a y 2 , 3> a n d 4 , the B o a r d w i l l d i s c o n t i n u e t h e p u b l i c a t i o n
of the i t e m "Reserved f o r G o v e r n m e n t F r a n c h i s e T a x " in its
w e e k l y s t a t e m e n t o f the c o n d i t i o n o f F e d e r a l R e s e r v e B a n k s ,
b e g i n n i n g w i t h t h e s t a t e m e n t a s o f J u l y 5 , 1 9 2 2 , a n d it is r e q u e s t e d t h a t the i t e m b e a l s o e l i m i n a t e d f r o m s t a t e m e n t s o f
condition of your Bank released locally.
In v i e w of the d i s c o n t i n u a n c e o f the p u b l i c a t i o n o f t h e i t e m " R e s e r v e d f o r G o v e r n ment Franchise Tax", amounts shown against that caption for
p r i o r d a t e s w i l l b e a d d e d to " A l l o t h e r l i a b i l i t i e s " w h e n
c o m p a r a t i v e f i g u r e s for the p r e c e d i n g w e e k or y e a r are p u b lished.
In consequence of the above change in the w e e k l y statem e n t , a f t e r J u n e 28 b a l a n c e s h e e t s F o r m 3 4 s h o u l d n o t s h o w
a m o u n t s of "Accrued p o r t i o n of e s t i m a t e d e n d - o f - y e a r c h a r g e - o f f s "
a n d of a m o u n t s "Reserved for G o v e r n m e n t F r a n c h i s e T a x , " e i t h e r
i n t h e M i s c e l l a n e o u s L i a b i l i t i e s b l o c k or a m o n g the d e d u c t i o n s
f r o m c u r r e n t Bet e a r n i n g s a s p r o v i d e d f o r i n t h e f o r m n o w i n
use*
The caption "Available for transfer to surplus f u n d "
s h o u l d b e c h a n g e d s o a s to r e p r e s e n t " A m o u n t s a v a i l a b l e f o r
depreciation allowances, reserves, surplus, and franchise tax,"
a n d t h e a m o u n t t h e r e o f s h o u l d b e r e p o r t e d a g a i n s t the p r e s e n t
code w o r d " C U T E " a n d i n c l u d e d in i t e m "All o t h e r l i a b i l i t i e s "
of the w e e k l y s t a t e m e n t .
L E T T E R
Very truly yours,
G o v e r n o r .
TO EACH CHAIRMAN.
FEDERAL RESERVE BOARD
WASHINGTON
X-3U1S
May 25, 1 9 2 2 .
SUBJECT:
Treasury Certificates Maturing June 15, 1922.
Dear Sir:
I enclose herewith, for your information, copy
of a letter received today f r o m the U n d e r S e c r e t a r y of the
T r e a s u r y , f r o m w h i c h you will see that h e e x p r e s s e s the
h o p e t h a t t h e F e d e r a l lie s e r v e B a n k s w i l l n o t r e i n v e s t t h e
a g g r e g a t e f a c e a m o u n t o f $ 7 5 > 0 0 0 , 0 0 0 of T r e a s u r y c e r t i f i c a t e s
w h i c h t h e y n o w h o l d , m a t u r i n g J u n e l ^ t h , at l e a s t f o r a p e r i o d
o f t e n d a y s or t w o w e e k s f o l l o w i n g t h a t d a t e .
Y o u are r e q u e s t e d to a d v i s e the B o a r d as to the
a t t i t u d e of y o u r b a n k w i t h r e s p a c t to this r e q u e s t .
Very truly yours,
G o v e r n o r .
(Enclosure)
GOVEBNOriS O F A L L F . E . B A N K S
COPIES TO CHAIRMEN
COPY
THE UMDEBBECKETAHY OF THE TREASURY '
WASHINGTON.
M a y 25, 1922,
M y dear Governor:
A c c o r d i n g to r e p o r t s r e c e n t l y t r a n s m i t t e d b y t h e F e d e r a l
R e s e r v e B o a r d , the F e d e r a l R e s e r v e B a n k s n o w h o l d f o r t h e i r o w n
a c c o u n t a b o u t $75>000,000 a g g r e g a t e f a c e a m o u n t of T r e a s u r y c e r tificates maturing June l^th.
I h o p e t h a t w h e n the t i m e c o m e s ,
t h e s e c e r t i f i c a t e s w i l l b e a l l o w e d to r u n o f f , w i t h o u t r e i n v e s t m e n t , a t l e a s t f o r the p e r i o d of t e n d a y s o r t w o w e e k s f o l l o w i n g
J u n e 1 5 t h i n w h i c h the T r e a s u r y w i l l "3 c o v e r i n g o v e r d r a f t s w i t h
0
the F e d e r a l R e s e r v e B a n k s p e n d i n g the c o l l e c t i o n of t a x c h e c k s
a n d the r e c e i p t of f u n d s f r o m d e p o s i t a r i e s .
To a l a r g e e x t e n t
the 3 per cent special certificates w h i c h the T r e a s u r y w i l l give
i n t h i s c o n n e c t i o n w i l l f i l l t h e g a p i n the i n v e s t m e n t a c c o u n t ,
a n d f r o m m a n y p o i n t s o f v i e w , it w i l l b e a h e l p f u l t h i n g t o l e t
this large b l o c k of F e d e r a l R e s e r v e B a n k investments run off
n a t u r a l l y a t the m a t u r i t y of t h e c e r t i f i c a t e s .
V e r y truly yours,
(Signed) S. P. Gilbert, Jr.,
Under Secretary.
H o n . W . P . G. H a r d i n g ,
Governor, Federal Reserve Board,
W a s h i n g t o n , D . C.
F E D E R A L R E S E R V E
B O A R D
STATEMENT FOR THE PRESS
X-3U19
For release in Morning Papers,
T h u r s d a y , J u n e 1, 1 9 2 2 .
T h e f o l l o w i n g is a r e v i e w o f g e n e r a l b u s i n e s s a n d
financial conditions throughout the several Federal
R e s e r v e Districts during the m o n t h of May, as
c o n t a i n e d in t h e f o r t h c o m i n g i s s u e o f t h e F e d e r a l
Reserve Bulletin.
S t e a d y improvement in the i n d i c a t e d y i e l d of the p r i n c i p a l
agricultural products h a s been an outstanding feature in the developm e n t s of the past month.
Improvement in the prices of cotton,grains,
and other p r o d u c t s is a l s o a n o t e w o r t h y f e a t u r e of the month-
Busi-
ness, insofar as dependent u p o n current agricultural prospects, shows
steady improvement, n o t w i t h s t a n d i n g d i m i n i s h e d export shipments of
a g r i c u l t u r a l p r o d u c t s , p a r t i c u l a r l y grains, as d i s c l o s e d b y the
ten m o n t h s 1 figures since the b e g i n n i n g of the f i s c a l year, and
n o t w i t h s t a n d i n g f u r t h e r a slackening of the d e m a n d f o r a g r i c u l t u r a l
products for domestic use.
Good demand for labor h a s manifested
itself in p r a c t i c a l l y all p a r t s of the country w i t h c o r r e s p o n d i n g
reduction of unemployment especially in outdoor occupations.
In a p p r a i s i n g the m a n u f a c t u r i n g s i t u a t i o n a d i s t i n c t i o n
mast b e drawn between basic commodities and those of a more h i g h l y
finished sort.
The marked improvement in the case of iron and
steel n o t e d in b u s i n e s s surveys of p r e v i o u s months h a s continued
during May, unfilled orders increasing materially and ingot pro-
- 2 -
X-3419
1:
d u c t i o n b e i n g the greatest in any one m o n t h since N o v e m b e r , 1920.
The demand for iron and steel products continues p a r t i c u l a r l y strong
in the c a s e of automobiles and railway supplies.
M u c h the same may
b e s a i d w i t h r e s p e c t to c o p p e r a n d t h e o t h e r n o n f e r r o u s m e t a l s .
The a d v a n c e s in the p r i c e of copper and the r e d u c t i o n in stocks
which had previously occurred have been accompanied b y a general reo p e n i n g of m i n e s and a c o r r e s p o n d i n g i n c r e a s e in the d e m a n d for m i n e
labor.
T h e s i t u a t i o n in o t h e r i m p o r t a n t l i n e s of m a n u f a c t u r e is l e s s
e a s y to c h a r a c t e r i z e .
D u e to the c o n t i n u a t i o n of t h e t e x t i l e strikes,
the output of c o t t o n g o o d s h a s b e e n m a t e r i a l l y l e s s e n e d , a l t h o u g h
in the southern cotton mill districts plants are reported as operating
near to full capacity.
A very pronounced increase in unfilled orders
h a s b e e n n o t e d b y r e p r e s e n t a t i v e c o t t o n m i l l s in t h e A t l a n t a d i s t r i c t ,
w h i c h is t y p i c a l of the g e n e r a l s i t u a t i o n .
T h e r e w a s a r e c e s s i o n of
a c t i v i t y in w o o l e n m a n u f a c t u r i n g during A p r i l , e s p e c i a l l y in the w o r s t e d
b r a n c h of t h e i n d u s t r y , w h i l e the s i l k i n d u s t r y is s u f f e r i n g f r o m a c o n d i tion of continued depression and inactivity.
manufacturers of boots and shoes.
A mixed situation confronts
In the St. Louis district, a c t i v i t y
h a s b e e n w e l l m a i n t a i n e d but in the B o s t o n , P h i l a d e l p h i a and C h i c a g o districts some recession has apparently occurred.
A p o r t i o n of this mast be
a s c r i b e d to s e a s o n a l r e a c t i o n .
P r i c e s h a v e c o n t i n u e d to s h o w s t a b i l i t y .
The general index number
of w h o l e s a l e prices c o m p i l e d b y the F e d e r a l R e s e r v e B o a r d shows an advance
o f t w o p o i n t s a s c o m p a r e d w i t h t h e p r e c e d i n g m o n t h , m a k i n g it l 4 g ( w h i c h
c l o s e l y a p p r o x i m a t e s t h e i n d e x n u m b e r 146
year ago).
of the c o r r e s p o n d i n g m o n t h a
T h i s a d v a n c e is d u e to the a d v a n c e s in t h e p r i c e s of
- 3 -
X-3419
agricultural products and in materials u s e d in certain basic industries.
O n t h e w h o l e the adjustment of p r i c e s among c o m m o d i t i e s and industires
is a p p r o a c h i n g a m o r e normal relationship.
R e f l e c t i n g the i m p r o v e d c o n d i t i o n in a g r i c u l t u r e a n d the larger
d i s b u r s e m e n t in wages in m a n y basic industries, r e t a i l trade exhibits
an enhancement of b u y i n g power, returns being more f a v o r a b l e t h a n
those of recent months.
In wholesale trade, however, the situation
is s p o t t y , some lines, such as h a r d w a r e , b e i n g f a v o r a b l y i n f l u e n c e d
b y the great activity in building.
In other w h o l e s a l e lines the
i m p r o v e m e n t o f r e t a i l t r a d e is n o t r e f l e c t e d i n a c o r r e s p o n d i n g a d vance in wholesale demand.
It s h o u l d b e r e m e m b e r e d , h o w e v e r , t h a t
o w i n g t o t h e s e a s o n a l c o n c e n t r a t i o n of o r d e r s i n w h o l e s a l e t r a d e ,
e s p e c i a l l y in the s o u t h e r n d i s t r i c t s , a n exact p a r a l l e l l i s m b e t w e e n
r e t a i l a n d w h o l e s a l e a c t i v i t y , is s e l d o m f o u n d , a n d i n t h e m o n t h
of M a r c h , w h o l e s a l e b u s i n e s s e x p e r i e n c e d a h i g h d e g r e e of s e a s o n a l
activity.
O n the w h o l e t h e r e appears to h a v e b e e n a d e c r e a s e in u n e m p l o y ment w h i c h has been brought about through the increased seasonal
demand for outdoor labor, the enlarged opportunities for employment in the mines, and in other directions.
Factory demand has
not kept pace with the growth in other branches^ b u t , o n the whole,
h a s receded, e s p e c i a l l y if voluntary u n e m p l o y m e n t d u e to strikes
in c e r t a i n sections of the country b e c o n s i d e r e d .
In the building
t r a d e s ' t h e n o t a b l e r e v i v a l w h i c h s t a r t e d at a b o u t t h e c l o s e of w i n t e r
h a s c o n t i n u e d a n d h a s led to u n u s u a l d e m a n d for l a b o r .
X-3U19
~ 4 F i n a n c i a l l y t h e m o n t h of M a y h a s a l s o "been a p e r i o d o f
comparative stability#
N o changes in discount r a t e s h a v e
t a k e n p l a c e a t t h e F e d e r a l R e s e r v e B a n k s and r a t e s in the
o p e n m o n e y m a r k e t h a v e continued d i s t i n c t l y b e l o w those prev a i l i n g at the l o c a l Federal R e s e r v e i n s t i t u t i o n s .
Call
m o n e y f i g u r e s h a v e b e e n e x c e p t i o n a l l y l o w d u r i n g m o s t of the
month.
Interest r a t e s have a l s o f a l l e n to some extent in
t h e p r o d u c i n g s e c t i o n s o f the c o u n t r y #
T h e p r o s p e c t of s o m e
better adjustment of foreign economic conditions h a s tended
t o s t a b i l i z e r a t e s o f e x c h a n a e , m o s t of t h e f o r e i g n c u r r e n c i e s
fluctuating only within very narrow limits.
F o r e i g n trade h a s shown a distinct t e n d e n c y to improve,
t h e m e r c h a n d i s e e x p o r t b a l a n c e i n f a v o r of t h e U n i t e d S t a t e s
reaching higher figures.
A t the s a m e t i m e a s o m e w h a t b e t t e r
inquiry for tonnage has developed.
Among domestic developments
t h i s t r i k i n g e v e n t of t h e m o n t h h a s b e e n t h e a n n o u n c e m e n t o f a
c u t of 1 0 p e r c e n t i n r a i l r o a d r a t e s b y t h e I n t e r s t a t e C o m m e r c e
Commission#
V/hat e f f e c t t h i s w i l l h a v e u p o n c o m m o d i t y m o v e -
m e n t s is a s y e t u n c e r t a i n .
;
X-3U19
- 5 AGRICULTURE:
The average condition of winter wheat on M a y 1 was
8 3 * 5 , a s c o m p a r e d w i t h a c o n d i t i o n of 8 7 2 . 4 o n A p r i l 1 , 1 9 2 2 , a n d a
c o n d i t i o n of 8 8 . 8 on M a y 1, 1 9 2 1 .
The estimated production amounts
to 5 8 4 , 7 9 3 , 0 0 0 b u s h e l s , or 0 . 4 p e r c e n t l e s s t h a n t h e 1 9 2 1 c r o p .
In
D i s t r i c t N o - 7 ( C h i c a g o ) t h e w i n t e r w h e a t c r o p p r o m i s e s to b e c o n s i d e r a b l y l a r g e r than in 1921 and h a s e n j o y e d f a v o r a b l e w e a t h e r cond i t i o n s d u r i n g the e a r l y part of M a y , e x c e p t for f i e l d s in r i v e r b o t t o m s .
D i s t r i c t N o * 1 0 ( K a n s a s C i t y ) s t a t e s that w e a t h e r c o n d i t i o n s i n M a y
h a v e b e e n v a r y e n c o u r a g i n g a n d i n d i c a t e a c o n t i n u a n c e of the r e m a r k a b l e
improvement in the c o n d i t i o n of wheat w h i c h c o m m e n c e d in A p r i l .
Winter
w h e a t is a l s o i n g o o d c o n d i t i o n i n D i s t r i c t N o . g ( S t . L o u i s ) , a l t h o u g h
a c o n s i d e r a b l e a c r e a g e in s o u t h e r n I n d i a n a a n d I l l i n o i s was' f l o o d e d a n d
has been abandoned.
In D i s t r i c t No* 1 2 (San F r a n c i s c o ) the wheat
crop w a s h e l p e d b y improved w e a t h e r c o n d i t i o n s in the f i r s t h a l f of
M a y , a l t h o u g h the t e m p e r a t u r e h a s b e e n r a t h e r too l o w f o r rapid growth,
a n d c e r t a i n f i e l d s i n n o r t h e r n C a l i f o r n i a a r e i n n e e d of r a i n .
The
average c o n d i t i o n of rye throughout the U n i t e d States on M a y 1 was
9 1 - 7 w h i c h f o r e c a s t s a p r o d u c t i o n of 7 9 , 1 5 2 , 0 0 0 b u s h e l s , as compared
w i t h a crop of 5 7 , 9 1 8 , 0 0 0 b u s h e l s in 1 9 2 1 .
The l e a d i n g agricultural districts all report a m a r k e d reduction
in t h e p l a n t i n g o f o a t s , d u e t o t h e l a t e s p r i n g a n d h e a v y r a i n s a n d
floods.
Reports f r o m District No. 10 (Kansas City) indicate that
the corn acreage w i l l be s u b s t a n t i a l l y larger than in 1 9 2 1 , due to
619
- 6
X-3419
-
t h e l a r g e w h e a t a c r e a g e w h i c h w a s a b a n d o n e d , a n d the s m a l l a c r e a g e s e e d e d
to o a t s ; b u t c o m p a r a t i v e l y l i t t l e o f t h e c o r n a c r e a g e o f N e b r a s k a a n d
Kansas has yet b e e n planted and much replanting has been necessitated
i n O k l a h o m a o n a c c o u n t of u n f a v o r a b l e s o i l c o n d i t i o n s .
In District
N o . 7 ( C h i c a g o ) the p l a n t i n g of c o r n is f r o m o n e t o t h r e e w e e k s l a t e ,
b u t s o i l c o n d i t i o n s are. n o w r e p o r t e d to b e p r o p i t i o u s .
Corn planting
h a s a l s o b e e n d e l a y e d i n D i s t r i c t N o * 8 ( S t . L o u i s ) , b u t is n o w m a k i n g
rapid progress.
The acreage will be larger than last y e a r in Missouri,
Arkansas and Tennessee.
B e p o r t s i n r e g a r d to t h e w h i t e p o t a t o c r o p i n d i c a t e a r a t h e r
general increase in acreage.
The b u l k of the F l o r i d a c r o p h a s already
b e e n h a r v e s t e d and early planted potatoes in O k l a h o m a and southern
Missouri are growing rapidly.
Louisiana sugar cane has been greatly
r e t a r d e d b y cool w e a t h e r , w h i l e the c r o p s o n m a n y l a r & e p l a n t a t i o n s
have been destroyed by floods.
District No. 10 (Kansas City) reports
t h a t a c r e a g e p l a n t e d to s u g a r b e e t s is a b o u t 1 5 p e r c e n t l e s s t h a n i n
1921 in N e b r a s k a , W y o m i n 6 , Colorado and K a n s a s .
COTTON:
Cotton prices have risen r a p i d l y d u r i n g M a y in all
sections of the S o u t h , due to the large d o m e s t i c f a c t o r y c o n s u m p t i o n ,
the c o n t i n u e d h e a v y e x p o r t s , and doubt c o n c e r n i n g t h e size of the n e w
c r o p on a c c o u n t of the d e l a y e d p l a n t i n g a n d the f e a r of b o l l w e e v i l
ravages.
T h e p r i c e of m i d d l i n g u p l a n d c o t t o n a t N e w O r l e a n s o n
M a y 1 7 was 1 9 - 9 cents, as compared w i t h 1 7 cents on A p r i l 19-
Cotton
s t o r e d i n m i l l s a n d i n p u b l i c w a r e h o u s e s o n A p r i l }0, a m o u n t e d t o
4 , 6 7 2 , 6 0 5 b a l e s , a b o u t 36 p e r c e n t l e s s t h a n o n A p r i l JO,
1921.
X-3U19
.
ffi:
~ 7 ~
H e a v y r a i n s a n d f l o o d s d e l a y e d the p l a n t i n g of c o t t o n i n a l m o s t
all sections.
T h e c o t t o n c r o p in D i s t r i c t N o . 1 1 ( D a l l a s ) is f r o m
t w o t o f o u r w e e k s l a t e , b u t t h e r e is a c o n s i d e r a b l e i n c r e a s e i n
acreage•
L o w temperatures and excessive rains necessitated con-
s i d e r a b l e r e p l a n t i n g of c o t t o n i n t h e s o u t h e r n p a r t s o f D i s t r i c t
N o . 1 0 (Kansas City) and D i s t r i c t N o . 8 (St. L o u i s ) , and f a r m e r s
iri A r k a n s a s , T e n n e s s e e a n d K e n t u c k y a r e a l s o p l a n t i n g a l l s p a r e
a c r e a g e to c o t t o n .
Planting was practically completed during
A p r i l in c e n t r a l and s o u t h e r n G e o r g i a , w h e r e a s less t h a n h a l f the
c o t t o n w a s p l a n t e d i n the n o r t h e r n s e c t i o n of t h e s t a t e .
About
2 0 p e r c e n t o f the f i e l d s i n G e o r g i a w e r e p l a n t e d w i t h o u t t h e u s e of
fertilizer.
TOBACCO:
In District No. 5 (Richmond), tobacco has b e e n trans-
p l a n t e d in S o u t h C a r o l i n a a n d the p l a n t s a r e d o i n g w a l l , w h i l e V i r g i n i a
b e d s are good and land has b e e n prepared for resetting*
North Carolina
r e p o r t s i n d i c a t e i n c r e a s e d a c r e a g e i n t o b a c c o a n d g r e a t e r u s e of f e r t i l i z e r
than last year.
T o b a c c o b e d s are g r o w i n g f a s t in D i s t r i c t N o . 8 (St.
L o u i s ) , b u t t h e r e a r e s o m e c o m p l a i n t s of d a m a g e f r o m w o r m s »
The co-
o p e r a t i v e m a r k e t i n g a s s o c i a t i o n in D i s t r i c t N o . 5 ( R i c h m o n d ) appears
to b e m a k i n g s t e a d y h e a d w a y a m o n g t h e ^ r o w e r s , a n d a n n o u n c e s t h a t it
has leased 150 warehouses.
Leaf d e a l e r s in that D i s t r i c t report that
the past m o n t h or two h a v e w i t n e s s e d d i s t i n c t improvement in the leaf
business»
O r d e r s f r o m a b r o a d h a v e i n c r e a s e d w i t h t h e r i s e in f o r e i g n
e x c h a n g e , a n d t h e r e is a f a i r v o l u m e of d o m e s t i c b u s i n e s s .
Dealers
report t h e i r s t o c k s are n o t h e a v y , a n d b e l i e v e this y e a r ' s crop w i l l
vV*1-'
X-3U19
-
8
-
b e l a r g e l y t a k e n u p b y f o r e i g n and. d o m e s t i c m a n u f a c t u r e r s w i t h i n t h e
next 90 days.
D o m e s t i c c i g a r l e a f in D i s t r i c t N o . 3 ( P h i l a d e l p h i a )
has, however, shown little activity.
P r i c e s o n the w h o l e still tend
d o w n w a r d , a n d t h e s u p p l y is p l e n t i f u l .
A slight i n c r e a s e in cigar
s a l e s in M a y is r e p o r t e d o v e r A p r i l , b u t t h e l a r g e r m a n u f a c t u r e r s
s e e m to h a v e r e c e i v e d r e l a t i v e l y m o r e o r d e r s t h a n t h e s m a l l e r o n e s .
FRUIT:
Prospects for large deciduous fruit yields are excellent
i n m o s t s e c t i o n s , a l t h o u g h c o n s i d e r a b l e f r o s t d a m a g e w a s s u f f e r e d in
Districts No* 3 (Philadelphia), N o . 5 (Richmond), and No, 11 (Dallas)«
Reports f r o m District N o . 3 (Philadelphia) indicate that frost damage
w a s s e v e r e in the v a l l e y s , b u t c o m p a r a t i v e l y l i g h t o n the h i l l s i d e s .
T h e g r e a t e s t injjtry w a s d o n e t o p e a c h e s a n d e a r l y c h e r r i e s , w h i l e t h e
d e s t r u c t i o n of a p p l e s a n d p l u m s w a s l e s s g e n e r a l .
In District N o . 5
( R i c h m o n d ) the a p p l e c r o p w a s c o n s i d e r a b l y d a m a g e d b y f r o s t s in the
l a t t e r p a r t o f A p r i l , b u t t h e s t r a w b e r r y c r o p is o f r e c o r d s i z e .
The
L o u i s i a n a strawberry crop this year amounted to about 1 , 7 0 0 car loads
a n d w a s s h i p p e d to 5 5 d i f f e r e n t m a r k e t s i n 3 2 s t a t e s , a l t h o u g h a v e r a g e
prices were lower than for several years.
It is e s t i m a t e d t h a t t h e
commercial watermelon crop of Florida will amount to 12,7^4 cars,
over 50 per cent greater than the 1921 crop.
The outlook for orchard
f r u i t in D i s t r i c t N o . S (St- L o u i s ) i s b e t t e r t h a n i n a n y y e a r s i n c e
1914, a n d the A r k a n s a s s t r a w b e r r y c r o p is the l a r g e s t on r e c o r d .
have been much improved by scientific pruning and spraying.
Orchards
In District
X-3U19
•
- 9 N o . 1 0 (Kansas City) all fruit trees h a v e a h e a v y crop, w i t h the possible
e x c e p t i o n of a p p l e trees.
The condition of peach orchards forecasts
a r e c o r d c r o p i n C a l i f o r n i a , a n d y i e l d s of c h e r r i e s a n d p e a r s a l s o
p r o m i s e to b e u n u s u a l l y h e a v y .
P r i c e s of c i t r u s f r u i t s c o n t i n u e f a v o r a b l e , a l t h o u g h s o m e r e d u c t i o n
h a s resulted f r o m imports of Spanish and I t a l i a n o r a n g e s .
Florida
suffered f r o m a p r o l o n g e d s p e l l of d r y w e a t h e r d u r i n g A p r i l w h i c h
c a u s e d s o m e s h e d d i n g a n d l o w e r e d the c o n d i t i o n of e a c h of the c i t r u s
fruit crops.
G?AIN MOVEMENTS:
Grain receipts at 1 ? interior centers registered
another marked decline d u r i n g April and were 56 per cent l e s s than the
h i g h total r e c e i v e d in F e b r u a r y .
The v o l u m e of m a r k e t i n g was smaller
for all kinds of grain in A p r i l , the decreases being most marked for
rye and corn.
The m o s t important c a u s e of this c u r t a i l m e n t in m a r k e t -
i n g i s a r e d u c t i o n i n the v o l u m e o f g r a i n e x p o r t s .
W h e a t r e c e i p t s at
the r e p o r t i n g i n t e r i o r c e n t e r s a m o u n t e d to 1 6 , 5 9 2 , 8 7 9 b u s h e l s in A p r i l ,
a decline of 17*2 per cent as compared w i t h M a r c h .
The deer2as3 was
m o s t p r o n o u n c e d in D i s t r i c t s N o . S (St. L o u i s ) and N o . 9 (Minneapolis),
w h i l e t h e r e w a s a n a c t u a l i n c r e a s e in D i s t r i c t N o . 7 ( C h i c a g o ) .
Receipts
of corn t o t a l e d 1 5 * 3 5 6 , 7 ^ - b u s h e l s in A p r i l , a d e c l i n e of 50 p e r cent
f r o m the M a r c h f i g u r e s .
D i s t r i c t N o . 1 0 (Kansas City) reports that
millers continue to buy choice white and yellow corn and that prices
are strong.
T h e v o l u m e of g r a i n s t o r e d a t i n t e r i o r a n d s e a b o a r d c e n t e r s
w a s 'somewhat d i m i n i s h e d d u r i n g A p r i l , b u t w a s m u c h l a r g e r t h a n s t o c k s o n
A p r i l 3 0 , 1 9 2 1 , d u e t o t h e l a r g e r a c c u m u l a t i o n s at p r i m a r y m a r k e t s .
X-3419
- 10 FLOTO:
Flour production during April was less than during March
in all D i s t r i c t s , a l t h o u g h greater than d u r i n g A p r i l 1921
Districts.
in c e r t a i n
In D i s t r i c t N o . 9 ( M i n n e a p o l i s ) , the A p r i l 1 9 2 2 f i g u r e s
r e p o r t e d was 1 , 7 7 7 , 4 9 9 b a r r e l s , w h i c h w a s 1 3 p e r cent l a s s than in
M a r c h and 7 p e r cent less t h a n a
year ago.
The April output in
D i s t r i c t N o . 1 0 ( K a n s a s C i t y ) w a s 1 , U S 7 b a r r e l s , a d e c r e a s e of
1 7 p e r c e n t f r o m M a r c h , b u t a n i n c r e a s e of 2 0 p e r c e n t o v e r the
April 1921 figure.
F o r t y s i x m i l l e r s in D i s t r i c t N o . 7 ( C h i c a g o )
p r o d u c e d 3 1 5 , 3 5 S b a r r e l s i n A p r i l , w h i c h w a s 2f p e r c e n t l e s s t h a n
in M a r c h , but 33 P 3 r cent m o r e than a y e a r ago; w h i l e 11 l e a d i n g
m i l l s i n D i s t r i c t N o . 8 ( S t . L o u i s ) s h o w e d A p r i l p r o d u c t i o n of
2 5 2 , 8 6 8 b a r r e l s , as against 3 2 9 , 4 2 8 b a r r e l s in M a r c h .
In District
N o . 1 2 ( S a n F r a n c i s c o ) o u t p u t o f 6 l m i l l s d e c r e a s e d f r o m J01,202
barrels
in M a r c h to 4 9 4 , 9 4 6 b a r r e l s in A p r i l .
Throughout April
the d e m a n d f o r f l o u r w a s s l o w a n d u n s a t i s f a c t o r y in D i s t r i c t N o .
8 ( S t . L o u i s ) , e s p e c i a l l y o n h i g h g r a d e s a n d patents.
Purchasing
was principally on a hand to mouth basis, but prices were relatively
w e l l s u s t a i n e d , d u e c h i e f l y to s c a r c i t y of p r i m e m i l l i n g w h e a t a n d
s c a r c i t y of c l e a n a n d l o w g r a d e f l o u r s .
O l d export orders in
District No. 1 2 (San Francisco) have b e e n delivered, and little n e w
export business has been bookad.
LIVE STOCK:
R e c e i p t s o f e a c h o f t h e t h r e e p r i n c i p a l c l a s s e s of
live stock during April were less than during the preceding month, and
than a year ago.
A p r i l receipts of cattle and calves w e r e 985,243
f f&r' V ",J
X-3419
-11
-
h e a d , a d e c r e a s e of 1 U . 9 p e r c e n t f r o m t h e M a r c h f i g u r e , a n d 1.0
per
c e n t f r o m the A p r i l 1 9 2 1 f i g u r e .
Receipt of h o g s in A p r i l amounted
t o 2,094,35^ h e a d , w h i c h w a s 12.2
per cent less than in March, and
S.l per cent less than a year ago.
25.6
Receipts of sheep decreased
p e r c e n t f r o m M a r c h t o ^ A p r i l , a m o u n t i n g to ? 4 l , 4 0 1 h e a d for the
l a t t e r m o n t h , a n d w e r e 31.2
p e r c e n t l e s s t h a n i n A p r i l 1921.
The
d e c r e a s e in r e c e i p t s of fat c a t t l e and a l l c l a s s e s o f h o g s a n d s h e e p
i s a t t r i b u t e d b y l i v e s t o c k m e n i n D i s t r i c t N o . 10 ( K a n s a s C i t y ) t o t h e
liquidation that followed unsatisfactory m a r k e t s and s t r i n g e n c y a year
ago.
Satisfactory spring grazing and improved market prices for fat
c a t t l e a r e g i v e n a s the c h i e f i n c e n t i v e f o r h o l d i n g l a r g e n u m b e r s of
thin cattle on farms and ranges.
Live s t o c k conditions in the District
are generally good, a l t h o u g h l a t e storms a n d cold weather in m o u n t a i n
s e c t i o n s h a v e r e s u l t e d in c o n s i d e r a b l e l o s s of o l d s t o c k , b o t h c a t t l e
and sheep.
A b n o r m a l l y h e a v y rains in T e x a s d u r i n g the p a s t 3 0 days
h a v e a i d e d in p r o d u c i n g a s i t u a t i o n that is n o w r e p o r t e d t o be almost
ideal f o r the r a p i d g r o w t h a n d f a t t e n i n g of c a t t l e , e x c e p t i n the
v i c i n i t y of E l P a s o a n d p a r t s o f e a s t e r n N e w M e x i c o «
L o s s e s in l i v e
s t o c k i n D i s t r i c t N o , 1 2 ( S a n F r a n c i s c o ) f r o m e x p o s u r e a n d l a c k of
f e e d , h a v e b e e n greater t h a n u s u a l d u r i n g the p a s t w i n t e r , w h i c h was
unusually long and severe.
The c o n d i t i o n of f e e d on m o s t p a s t u r e s
a n d r a n g e s i s r e p o r t e d m u c h b e l o w t h e a v e r a g e f o r t h i s p e r i o d of t h e
y e a r , a l t h o u g h i m p r o v i n g w i t h t h e a d v e n t of w a r m e r w e a t h e r .
was accompanied by heavier losses than usual.
Lambing
Substantial progress
>
,
.<
X-3U19
'
- 12
is b e i n g m a d e i n b u i l d i n g u p t h e d a i r y i n d u s t r y i n D i s t r i c t N o . 1 0
(Kansas C i t y ) .
T h i r t y - o n e packers report April dollar sales 2 . 9 per cent less
than in M a r c h , and 8 . 2 per cent less t h a n in A p r i l , 1921 -
S t o c k s of
c u r e d m e a t s a n d l a r d at w e s t e r n p a c k i n g p o i n t s a t t h e c l o s e o f A p r i l
were greater than on March 31, but considerably below those of a year
ago.
P a c k e r s in District N o . 1 0 (Kansas C i t y ) report that, w h i l e
the d e m a n d f o r p o r k h a s not b r o a d e n e d , b u y i n g h a s b e e n f r e e , a l t h o u g h
purchases are for immediate needs only.
considerable improvement•
The beef trade h a s shown
Five large exporters in District No. 7
(Chicago) reported April shipments larger than in March, but two reported decreases.
A n o m i n a l increase in consignment stocks abroad
was indicated on May 1.
COAL:
A p r i l p r o d u c t i o n of b i t u m i n o u s c o a l w a s e s t i m a t e d at
1 5 > 7 8 0 , 0 0 0 t o n s , c o m p a r e d w i t h 5 0 , 1 9 3 .000 t o n s l a s t m o n t h , a n d
27>553,000 tons in April last year.
This month's production was
w e l l b e l o w t h a t of a n y A p r i l i n r e c e n t y e a r s , a n d 3 >000 > 0 0 0 t o n s
l e s s t h a n the o u t p u t of N o v e m b e r , 1 9 1 9 w h e n a s n o w , a g e n e r a l s t r i k e
of b i t u m i n o u s m i n e r s w a s in p r o g r e s s .
Production has increased,
h o w e v e r , f r o m 3 > 3 3 5 > 0 0 0 t o n s d u r i n g t h e f i r s t w e e k of t h e s t r i k e ,
to
5 0 0 ^ 0 0 0 t o n s d u r i n g t h e s i x t h w e e k a n d f u r t h e r i n c r e a s e is p o s s i -
b l e , d e p e n d i n g o n d e m a n d w h i c h is b e g i n n i n g
by firmer prices.
to p i c k u p , a c c o m p a n i e d
D u r i n g t h e e a r l y w e e k s of the s t r i k e d e m a n d w a s
' - ''
1
>
I
V
•
X-3419
OKI
- 13 v e r y sluggish as consumers preferred u s i n g their reserves to buying,
so t h a t p r o b a b l y a n a v e r a g e o f 4 , 0 0 0 , 0 0 0 t o n s w e e k l y h a s b e e n d r a w n
f r o m t h e 6 3 , 0 0 0 , 0 0 0 t o n s s t o c k e d i n the c o u n t r y o n A p r i l 1 s t .
Production of anthracite coal for the m o n t h was practically
negligible.
Output was 8 , 7 5 7 , 0 0 0 tons in M a r c h , and 7 , 7 0 3 , 0 0 0 tons
in April last year.
b e e n about 6,000 tons.
A v e r a g e w e e k l y p r o d u c t i o n d u r i n g the strike h a s
The industry has b e e n virtually unaffected by
the b i t u m i n o u s strike and d e m a n d remains v e r y q u i e t .
There has been
little p r i c e - c u t t i n g to stimulate householders' b u y i n g and where tried
it h a s p r o v e d i n e f f e c t u a l .
O u t p u t of b e e h i v e c o k e d r o p p e d f r o m
7 3 2 , 0 0 0 t o n s in M a r c h to 5 2 8 , 0 0 0 tons in A p r i l a n d w a s 3 2 8 , 0 0 0 tons
in A p r i l , 1 9 2 1 , w h i l e by-product coke p r o d u c t i o n increased from
2,137,000 tons last month to 2,227,000 tons in A p r i l .
PETROLEUM:
P r o d u c t i o n of crude p e t r o l e u m d u r i n g A p r i l d e c r e a s e d
c o n s i d e r a b l y f o r the c o u n t r y a s a w h o l e .
in District N o . 11 (Dallas).
This was especially noticeable
In this D i s t r i c t crude p e t r o l e u m production,
which reached a peak during March, declined sharply and only 13,750,590
b a r r e l s w e r e p r o d u c e d , a d e c r e a s e o f 2 , 4 96,090 b a r r e l s .
This large re-
duction was due partly to the unfavorable weather conditions and partly
to the l o w p r o d u c t i o n of n e w w e l l s c o m p l e t e d .
B o t h the L o u i s i a n a and
T e x a s f i e l d s shared in this r e d u c t i o n , the A p r i l d a i l y a v e r a g e y i e l d
for all Texas fields being 3^9,713 barrels as against a daily average
f l o w of 3 8 9 , 9 ^ 4 b a r r e l s d u r i n g M a r c h .
District No. 12 (San Francisco)
again reports increased production, and a
decrease in consumption,
x-3419
,
r o
~ l4 r e s u l t i n g in the l a r g e s t s t o r e d s t o c k s of c r u d e p e t r o l e u m s i n c e A p r i l ,
1917"
A v e r a g e d a i l y p r o d u c t i o n in C a l i f o r n i a d u r i n g A p r i l w a s 3 ^ 1 , 0 7 7
b a r r e l s a s c o m p a r e d w i t h 333,737 "barrels i n M a r c h a n d 3 3 8 , 9 8 1 b a r r e l s
in A p r i l 1921«
Forty producing wells were completed d u r i n g the month*
S t o r e d s t o c k s of g a s o l i n e h e l d in C a l i f o r n i a d e c r e a s e d 1 2 , 6 9 3 , 8 3 5
g a l l o n s d u r i n g M a r c h a n d s t o o d a t 63 , 7 1 8 , 7 0 1 g a l l o n s o n . A p r i l 1 s t ,
as c o m p a r e d w i t h 5 1 > 5 7 3 > 9 4 5 g a l l o n s on A p r i l 1 , 1 9 2 1 .
An estimate
of the crude oil p r o d u c t i o n in D i s t r i c t N o . 1 0 (Kansas C i t y ) indicates
a decrease when compared with March, but an increase w h e n compared
with April last year-
In t h a t D i s t r i c t t h e r e w a s a n i n c r e a s e in
the n u m b e r of w e l l s c o m p l e t e d , w h i l e t h e d a i l y n e w p r o d u c t i o n w a s
7,107 b a r r e l s less than in M a r c h , but m o r e than double the d a i l y n e w
p r o d u c t i o n d u r i n g the corresponding•period a year ago.
N o r a d i c a l p r i c e c h a n g e s h a v e b e e n n o t e d in a n y of t h e s e D i s t r i c t s
for crude oil*
E e f i n e r s r e p o r t a g e n e r a l i m p r o v e m e n t in the s i t u a t i o n ,
and w i t h the i n c r e a s i n g d e m a n d f o r g a s o l i n e a s the s e a s o n a d v a n c e d
increases o f f r o m 2 c e n t s to 2$ cents p e r g a l l o n h a v e b e e n m a d e .
IRON A N D STEEL:
F u r t h e r m a r k e d i m p r o v e m e n t is r e p o r t e d i n t h e
iron and steel industry.
P i g iron production during April was
2,072,114 tons, an increase of 1.8 per cent over the M a r c h figure,
On May 1
162 f u r n a c e s w e r e i n b l a s t , a s c o m p a r e d w i t h 1 5 5 o n
April 1 and w i t h 69 on August 1, 1921, the l o w figure last year.
About a dozen additional furnaces have resumed during May.
Steel
ingot p r o d u c t i o n also increased 2*9 per cent t o 2 , 4 3 9 > 2 4 6 tons in
A p r i l , a n d the u n f i l l e d o r d e r s of the U . S. S t e e l C o r p o r a t i o n 1 3 * 4
X-3419
- 15 ~
p e r c e n t to 5 > 0 9 6 , U l 3 tons o n A p r i l 30*
t i n u e d at o v e r ?0 p e r cent of c a p a c i t y .
May operations have conF i r m s in District No. 3
( P h i l a d e l p h i a ) s t i l l l a g "behind t h e g e n e r a l a v e r a g e ,
Demand for
n e a r l y all p r o d u c t s h a s b e e n a c c e n t u a t e d b y f e a r of p o s s i b l e r e s t r i c t i o n of o u t p u t •
The coal strike has seriously affected prices, in-
creasing production cost for many manufacturers who have b e e n comp e l l e d to p u r c h a s e K e n t u c k y a n d West V i r g i n i a coal since the p a r t i a l
s h u t d o w n i n t h e C o n n e 11 s v i l 1 e r e g i o n *
A s e l l e r ' s m a r k e t , it is
s t a t e d , c a n n o w b e s a i d to e x i s t i n n e a r l y a l l p r o d u c t s , b u t m a n u facturers h e s i t a t e to promise future deliveries and are m o r e concerned over increasing production than in b o o k i n g n e w business» Railr o a d s and a u t o m o b i l e m a n u f a c t u r e r s a r e b u y i n g a c t i v e l y , b u t s t r u c t u r a l
steel orders, while still large, h a v e decreased somewhat lately:
Tin
p l a t e is i n a c t i v e d e m a n d a n d w i r e p r o d u c t s a r e m o v i n g i n l a r g e q u a n t i ties,
The pig i r o n m a r k e t in District N o * 3 (Philadelphia) h a s b e e n
fairly a c t i v e d u r i n g M a y , a l t h o u g h rather l e s s so t h a n in A p r i l -
Im-
p r o v e m e n t in e x p o r t d e m a n d d u r i n g the f i r s t w e e k s o f M a y is r e p o r t e d
i n D i s t r i c t No* 7 ( C h i c a g o ) , b u t t h e b u l k o f t h i s b u s i n e s s h a s b e e n
g o i n g to e a s t e r n m a r k e t s .
AUTOMOBILES:
B o t h p r o d u c t i o n a n d s h i p m e n t s of a u t o m o b i l e s s h o w e d
f u r t h e r i n c r e a s e d u r i n g A p r i l , a l t h o u g h n o t at as r a p i d a rate as in
March.
Manufacturers who produced 152,625 passenger cars during
M a r c h , b u i l t 1 9 6 , 7 2 8 d u r i n g A p r i l , a n i n c r e a s e of 2 8 . 9 p e r c e n t ,
while companies building 19,369 trucks during March showed an April
X-3U19
- l6 output of 2 1 , 8 6 5 trucks, a n increase of 12.9 per c e n t .
Carload ship-
m e n t s w e r e a b o u t 3 0 > 2 0 0 in A p r i l , a s c o m p a r e d w i t h 2 7 , 3 2 0 i n M a r c h ,
Exports have shown a considerable increase»
A few popular medium
and l o w p r i c e d makes have b e e n selling in l a r g e r q u a n t i t i e s than ever
b e f o r e , w h i l e m a n y d e a l e r s are several w e e k s b e h i n d in t h e i r d e l i v e r i e s .
Used cars are being accepted on a more equitable basis than heretofore,
w h e n c o n c e s s i o n s w e r e m a d e in o r d e r to s t i m u l a t e b u s i n e s s , a n d a l a r g e r
percentage of sales n o w involves no trades-
Nearly all customers, both
for n e w and u s e d cars, are stated by District Ho* 3 (Philadelphia),
h o w e v e r , to r e q u i r e credit for l o n g e r p e r i o d s of time t h a n h e r e t o f o r e ,
and cash sales are few.
NOITFEETiOUS M E T A L S :
A c c o r d i n g to reports f r o m the v a r i o u s m i n i n g
districts, operations continue on an increased scale.
The average
p r i c e of e l e c t r o l y t i c c o p p e r f o r e a r l y d e l i v e r y in N e w Y o r k w a s 1 3
cents per p o u n d on M a y 15 as compared with 1 2 . 6 2 5 cents p e r p o u n d a
m o n t h a g o , b u t d e m a n d is w e l l m a i n t a i n e d .
P r o d u c t i o n of c o p p e r for
the country as a whole showed a decided increase in A p r i l over M a r c h
production*
The A p r i l p r o d u c t i o n of r e f i n e d
2
i n c throughout the
c o u n t r y a m o u n t e d to 2 5 , 5 0 6 tons, a slight i n c r e a s e over the p r e v i o u s
month.
In District No* 10 (Kansas City) a noticeable change occurred
in the l e a d a n d zinc ore m a r k e t s of the J o p l i n f i e l d .
Prices continued
to r i s e , t h e a v e r a g e p r i c e f o r a l l g r a d e s of z i n c b l e n d e o r e s i n A p r i l
was $ 2 3 . 7 1 p e r ton, as c o m p a r e d w i t h $ 2 6 . 3 3 p e r t o n for the p r e v i o u s
month.
T h e m o n t h o f A p r i l r e g i s t e r e d the h e a v i e s t s h i p m e n t s of z i n c
X-3419
- 17
ore for several m o n t h s past.
Bis total shipments were 45,185
tons as against 31,601 tons during March.
declined considerably during the month.
S t o c k s of z i n c o r e
Lead ores continued
to a d v a n c e i n p r i c e a n d s o l d a s h i g h a s $ 7 0 . 0 0 p e r t o n .
The
i n c r e a s e i n s h i p m e n t s o f l e a d o r e s f o r t h e f i r s t f o u r m o n t h s of
the y e a r a m o u n t e d t o 1 0 , 4 0 1 t o n s w i t h a n i n c r e a s e d v a l u e o f
$1,036,729.
D i s t r i c t N o . 1 2 ( S a n F r a n c i s c o ) r e p o r t s t h a t the
g o l d a n d s i l v e r m i n i n g i n d u s t r y is i n a m o r e f a v o r a b l e c o n d i t i o n
t h a n at a n y t i m e d u r i n g t h e p a s t I S m o n t h s .
C Q ^ T Q y TZiTTXLSS:
I n F e w E n g l a n d c o t t o n c o n s u m p t i o n is a t
a m i n i m u m a s a r e s u l t of t h e s t r i k e c o n d i t i o n s s t i l l p r e v a i l i n g ,
b u t e l s e w h e r e the r i s e i n t h e p r i c e o f r a w c o t t o n h a s r e s u l t e d
i n t h e p l a c e m e n t of l a r g e r o r d e r s e s p e c i a l l y i n t h e m a r k e t f o r
yarns.
In District No. 3 (Philadelphia) the demand for yarns
is r e p o r t e d t o h a v e s h o w n a n o t a b l e i n c r e a s e s i n c e t h e f i r s t o f
M a y a l t h o u g h t h e a v e r a g e o u t p u t is o n l y b e t w e e n 6 0 a n d 7 0 p e r c e n t
of n o r m a l f o r the m i l l s i n that D i s t r i c t .
In the c a s e of the
c l o t h m i l l s , h o w e v e r , there was n o e v i d e n c e of a c c e l e r a t e d a c t i v i t y b u t o p e r a t i o n s w e r e a v e r a g i n g a r o u n d 75 P 8 r c e n t of c a p a c i t y .
District No. 5 (Richmond) reports both jobbers and mill owners
reluctant to negotiate forward orders on a n y considerable scale
i n the f a c e o f a d v a n c i n g p r i c e s of r a w m a t e r i a l .
The mills in
X-3419
- IS -
the D i s t r i c t a r e generally r u n n i n g full t i m e and r e c e i v i n g a
s u b s t a n t i a l a m o u n t of orders f o r i m m e d i a t e s h i p m e n t .
Pro*
d u c t i v e o p e r a t i o n s o f r e p o r t i n g m i l l s in D i s t r i c t N o * 6
( A t l a n t a ) d u r i n g A p r i l showed a l o s s in the case of c l o t h
m i l l s a s c o m p a r e d w i t h t h e p r e c e d i n g monfcn., b u t b o t h y a r n
a n d c l o t h m i l l s h a d l a r g e r o r d e r s o u t s t a n d i n g than at the
e n d of M a r c h .
F o r the 4 0 cloth m i l l s p r o d u c t i o n d r o p p e d
7.6 p e r cent in A p r i l as c o m p a r e d with M a r c h but orders were
1 5 p e r c e n t g r e a t e r t h a n a t t h e e n d of M a r c h .
As com-
p a r e d w i t h A p r i l 1921 the corresponding p e r c e n t a g e s are
4b.4 per cent and 139*5 per cent.
For the 39 r e p o r t i n g
yarn mills production increased 0.6 par cent as compared
with M a r c h and was 59»5 per cent in excess of April 1921.
Orders on h a n d at the end of April were 2 1 - 7 per cent greater
than at the end of M a r c h a n d 2 5 . 3 p e r cent greater t h a n in
April 1921,
T h e c o n s u m p t i o n of r a w c o t t o n d u r i n g t h e m o n t h o f
A p r i l d e c l i n e d d e c i d e d l y a s the t o t a l < f e l l f r o m
b a l e s to 4 4 6 , 8 4 3 b a l e s .
,
<
- 19 WOOLEF TEXTILES.
X-3U19
D e c i d e d a d v a n c e s h a v e o c c u r r e d in the p r i c e s of
r a w w o o l , w h i c h a r e n o t to b e e x p l a i n e d o n t h e b a s i s o f s p e c u l a t i v e
d e m a n d s a l o n e , b u t a r e c a u s e d b y p u r c h a s e s to c o v e r m i l l n e e d s .
Stocks
of w o o l in the east a r e low and p r i c e advances h a v e b e e n p a r t i c u l a r l y
p r o n o u n c e d in the c a s e of the f i n e r g r a d e s of w o o l .
For example, in
D i s t r i c t No. 1 2 (San Francisco) approximately 35 P e r cent of the total
1 9 2 2 clip w a s r e p o r t e d to h a v e b e e n "contracted f o r b y M a r c h 1 at
p r i c e s r a n g i n g f r o m 25 to
of w o o l r e s p e c t i v e l y .
p e r p o u n d for 'average1 and 'top1 grade
T h e l a r g e r J e r i c h o w o o l p o o l i n U t a h s o l d at 4 0 ^
p e r p o u n d , e s t a b l i s h i n g a n e w t o p p r i c e f o r t h e s e a s o n t o g r o w e r s for
high grade wool."
T h e report f r o m District Mo. 1 2 (San F r a n c i s c o )
f u r t h e r s t a t e s t h a t " w o o l i s n o w r e p o r t e d t o b e s e l l i n g r a p i d l y , at
p r i c e s ranging from 20^ per p o u n d for the poorest grades to 4o4 p e r
p o u n d f o r t h e b e s t g r a d e s , o r f r o m 2 5 to 3 5 4 p e r p o u n d f o r m e d i u m
grades."
" L a s t y e a r , t h e s e g r a d e s s o l d at 1 0 t o 1 5 ^ p e r p o u n d o n a r e -
luctant market."
D i s c r i m i n a t i o n in favor of w o o l e n cloths as against
w o r s t e d s continues to be reflected in the greater a c t i v i t y of woolen
spindles as compared with worsted.
F o r example, t h e p e r c e n t a g e o f idle
w o r s t e d spindles as r e p o r t e d to the B u r e a u of t h e Census a d v a n c e d from
25-3
on
A p r i l 1, t o 3 5 - 4 o n M a y 1 , w h i l e t h e p e r c e n t a g e o f i d l e w o o l e n
s p i n d l e s d r o p p e d s l i g h t l y , f r o m 1 7 - 5 A p r i l 1> t o 1 7 * 3 M a y 1.
This drop
of 0 . 2 per cent f o r idle w o o l e n spindles, h o w e v e r , w a s not r e f l e c t e d in
t h e p e r c e n t a g e o f i d l e h o u r s to t o t a l r e p o r t e d w h i c h r o s e f r o m 1 4 . 1 o n
A p r i l 1 f o r w o o l e n s p i n d l e s t o 1 5 . 2 o n ifey 1 .
The percentage of idle
h o u r s f o r w o r s t e d s p i n d l e s a d v a n c e d f r o m 2 9 - 2 to 3 7 - 9 *
In the case of
looms wider than 5 0 " reed space and 5 0 " reed space or less, increasing
•r* /r") #
- 20 -
x-3419
:
i d l e n e s s w a s r e c o r d e d b o t h i n t e r m s of i d l e m a c h i n e r y a n d i n t e r m s o f
idle hours*
The p e r c e n t a g e of idle machinery f o r looms w i d e r than 50"
r e e d s p a c e r o s e f r o m 3 4 * 9 A p r i l 1 t o 3 9 * 7 M a y 1 , w h i l e the c o r r e s p o n d i n g
p e r c e n t a g e s f o r l o o m s 50 11 r e e d s p a c e or l e s s w e r e 2 7 * 8 o n A p r i l 1 a n d
3 6 * 0 o n M a y 1.
The percentage of idle hours rose in the one case from
3 6 , 9 t o 4l,6; a n d in t h e o t h e r c a s e , f r o m 3 ^ - 5 t o 46#6«
District No. 3 (Philadelphia) states that many mills h a v e converted
t h e i r l o o m s f r o m t h e m a n u f a c t u r e o f w o r s t e d to w o o l e n s a n d o p e r a t i o n s a r e
a v e r a g i n g a b o u t SO p e r c e n t i n t h e w o o l e n m i l l s a t t h e p r e s e n t t i m e ,
w h e r e a s the w o r s t e d m i l l s a r e r u n n i n g at o n l y ^ 0 p e r c e n t o f c a p a c i t y .
D e m a n d f o r y a r n s is m o s t a c t i v e f o r u s e i n t h e m a n u f a c t u r e o f m e n ' s w e a r
and dress goods.
wool prices.
a m o u n t e d to
Y a r n p r i c e s are m u c h firmer w i t h the a d v a n c e in r a w
T h e c o n s u m p t i o n of r a w w o o l d u r i n g t h e m o n t h o f A p r i l
5^- * 5 8 8 , 0 0 0
p o u n d s a s c o m p a r e d w i t h 7 0 , ^ 2 4 , 0 0 0 p o u n d s in
March.
CLOTHING*
A c c o r d i n g to r e p o r t s f r o m 1 7 f i r m s l o c a t e d i n D i s t r i c t
No. 2 ( N e w Y o r k ) , s a l e s in A p r i l w e r e 2 . 1 p e r c e n t i n e x c e s s of t h o s e
for the p r e c e d i n g m o n t h and 34.6 p e r cent g r e a t e r t h a n a y e a r ago.
D i s t r i c t No. 8 (St. L o u i s ) stated t h a t sales d u r i n g A p r i l s h o w e d c o n s i d a r a b l e i r r e g u l a r i t y a n d that t h e r e h a d b e e n s o m e l o s s e s d u e to u n s e a s o n able weather and flood conditions.
In District No * 7 (Chicago) the re-
turns f r o m wholesale clothing manufacturers are not presented because
orders for fall m e r c h a n d i s e are not yet being p l a c e d in sufficient
v o l u m e to s h o w t h e t r e n d f o r t h e n e w s e a s o n .
Reports from 12 tailors-
t o - t h e - t r a d e , h o w e v e r , s h o w e d a n i n c r e a s e in t h e n u m b e r o f s u i t s m a d e o f
2 . 7 p e r c e n t as c o m p a r e d w i t h t h e p r e c e d i n g m o n t h , b u t o r d e r s w e r e | . 4
T?
A
» .
;
.r o r~'
,>
- 21 per cent less than in March.
xy
X-3419
°'""
On the other hand, as compared w i t h a
y e a r a g o , t h e r e is c o n s i d e r a b l e i i m p r o v e m e n t , a s p r o d u c t i o n w a s 2 6 . 7
per cent greater and shipments were 24.0 p e r cent larger.
SILK.
T h e r e a r e n o i n d i c a t i o n s of i m p r o v e m e n t i n t h e s i l k i n -
d u s t r y a n d i n a l l p r o b a b i l i t y t h e o u t l o o k is n o t s o g o o d a s it w a s a
montn ago.
The statistics received from North Hudson and from Paterson
show f u r t h e r d e c l i n e s in m a n u f a c t u r i n g activity in the l a t t e r city
and n e g l i g i b l e a d v a n c e s in the former.
In the c a s e of P a t e r s o n 2,710
l o o m s w e r e a c t i v e o n M a y 8 o u t o f a t o t a l of 1 5 , 0 0 0 r e p o r t i n g , a n d the
p e r c e n t a g e o f a c t i v e h o u r s to t o t a l a v a i l a b l e w a s 1 6 . 0 8 a s c o m p a r e d
w i t h 1 7 - 0 2 A p r i l 8.
In the case of
N o r t h H u d s o n t h e p e r c e n t a g e of
a c t i v e h o u r s r o s e to 4 6 , $ 1 o n M a y 6 a s c o m p a r e d w i t h 4 2 . 7 1 A p r i l 8 .
T h e a v e r a g e p r o d u c t i o n of the silk mills in District No. 3 (Philadelphia)
w a s a b o u t $ 0 p e r c e n t a n d it w a s s t a t e d t h a t t h e m a j o r i t y of t h o s e
mills which reported a higher percentage of operations were placing
t h e i r g o o d s in s t o c k .
In spite of the low d e g r e e of activity, the
r a w s i l k m a r k e t r e g i s t e r e d s h a r p p r i c e a d v a n c e s a b o u t the f i r s t o f
the m o n t h , but since that time t h e r e h a v e b e e n n o p a r t i c u l a r changes.
HOSIERY. The reports received by the Federal Reserve B a n k of
P h i l a d e l p h i a f r o m 29 h o s i e r y m a n u f a c t u r e r s s e l l i n g to t h e w h o l e s a l e
t r a d e showed a slight r e c e s s i o n in output d u r i n g A p r i l of 9 - 4 p e r c e n t ,
but orders booked increased 213*7 p e r cent.
T h i s l a r g e a c c e s s i o n to
orders probably represents seasonal bookings for next autumn.
I n the
c a s e o f t e n f i r m s s e l l i n g to t h e r e t a i l t r a d e t h e p r o d u c t m a n u f a c t u r e d
during April was 1 9 . 4 per cent less than the M a r c h output while orders
booked increased 2-5 per cent.
Three manufacturers of cotton hosiery
- 22 -
X-3419
located in District No, 6 (Atlanta) showed a p r o d u c t i o n 4 p e r cent
less than in the p r e c e d i n g m o n t h but orders b o o k e d increased 20.7 per
cent.
C o r r e s p o n d e n t s in that District stated that "while the current
demand for hosiery had increased during April, there was no extensive
buying for future delivery".
In District No. 3 (Philadelphia) the
m a r k e t f o r c o t t o n h o s i e r y w a s r e p o r t e d to b e e x t r e m e l y d u l l .
TJ]#SRWEAR.
In April, 1922, reports were r e c e i v e d from 53 mills
p r o d u c i n g u n d e r w e a r , a s c o m p a r e d w i t h 5 4 in M a r c h a n d 6 l i n A p r i l , 1 9 2 1 .
A c t u a l p r o d u c t i o n d u r i n g the m o n t h s h o w e d a d e c i d e d f a l l i n g off, the
a m o u n t p r o d u c e d b y t h e s e 53 w i l l s b e i n g only 5 2 1 , 8 5 5 d o z e n , or 8 2 . 7 P e r
cent of normal.
D u r i n g the p r e c e d i n g m o n t h 5 4 m i l l s r e p o r t e d p r o d u c t i o n
a m o u n t i n g to 7 5 6 , 2 4 8 dozen, or 9 2 * 9 p e r cent o f n o r m a l .
The production
of 6l m i l l s a year ago, however, w a s only 4 0 1 , 9 3 8 dozen, or 4 9 . 6 p e r
cent of normal.
The figures for summer underwear production were more
n e a r l y n o r m a l than t h o s e f o r w i n t e r u n d e r w e a r , t h e former a m o u n t i n g to
2 4 6 , 1 2 4 dozen, or 9 2 . 6 p e r cent of normal, w h i l e the latter stood at
2 7 5 , 7 6 1 d o z e n , or 7 5 - 4 p e r cent of n o r m a l .
C o m p a r a t i v e r e p o r t s received f r o m 3 5 m i l l s also show a loss in
p r o d u c t i o n since last month, decreasing f r o m 6 0 ^ , 1 1 6 d o z e n in M a r c h
to 453,963 dozen in April.
T h e r e w a s a similar f a l l i n g off in b o t h
u n f i l l e d orders and n e w orders during the month, the former declining
f r o m 1 , 3 0 4 , 2 0 3 d o z e n i n M a r c h t o 1 , 1 4 2 , 4 8 1 d o z e n i n A p r i l , a l o s s of
1 2 . 4 p e r c e n t , a n d t h e l a t t e r f r o m 3 7 3 * 0 4 7 d o z e n s i n M a r c h to 2 7 0 , 1 5 3
d o z e n i n A p r i l , a d e c r e a s e o f 27*6 p e r c e n t .
S h i p m e n t s a m o u n t e d to
350,990 dozen as compared with 497,826 dozen in March, a falling off
X-3419
of 29-5 per cent.
Cancellations rose from 8 , 6 8 5 dozen in March to
15>029 dozen in April, an increase of 73-0 per cent.
SHOES AbTD LEATHER.
The market for packer hides broadened con-
siderably during the first three weeks of May.
Sales at Chisago were
heavier than in any preceding month of 1922, and prices registered an
average increase of about 10 per cent.
of poor quality and sales were small.
Offerings of country hides were
Demand for calf skins has in-
creased in both Philadelphia and Chicago, but demand for goat skins
continues to be very light and prices are at about the same level as
in 1914.
There has been a distinct slackening of activity among
tanners both in the East and in the Middle West.
Sales of belting
leather and harness leather were well maintained during April and the
first half of May, but business in shc9 leathers and glove leathers is
very dull.
District No. 7 (Chicago) reports that such demand as exists
for shoe leathers is for patent, glazed, black, and sport kinds for
women's wear, and side leather, work shoe leather, and calf skins for
men's shoes.
In District No. 3 (Philadelphia) business in sole leather
has been of only moderate size and some price cutting has developed,
but an increase in exports has afforded some relief.
Among the upper
leathers, there is still an exceptionally large demand for patent, some
improvement in sales of calf, but very poor demand for kid.
Leather
stocks continued to increase during April.
Shoe factories in District No. 8 (St. Louis) continue to operate
at close to capacity, but production was curtailed during April in
Districts No. 1 ( Boston), No. 3 (Philadelphia), and No. 7 (Chicago).
Eleven inportant interests in District No. S (St. Louis) are operating
-2^-
X-3U19
f a c t o r i e s a t f r o m 8 6 to 1 0 0 p j v c e n t o f c a p a c i t y , and. h a v e h a n d l e d
3 $ p e r cent m o r e b u s i n e s s in t h e f i r s t f o u r m o n t h s of 1 9 2 2 t h a n i n the
corresponding p e r i o d of 1921.
Orders since M a y 1 in that District
have been very satisfactory, and the proportion of forward orders has
b e e n i n c r e a s i n g f r o m w e e k to w e e k .
The demand has been principally
for s t a p l e goods, but sales of n o v e l t i e s a r e i n c r e a s i n g and r e t a i l
merchants are purchasing broader assortments.
In District No. 7
(Chicago) production of 30 firms declined $.4 percent in April as comp a r e d with March, and shipments declined 17»5 P e r cent, w h i l e unfilled
o r d e r s i n c r e a s e d 1 0 . 4 p e r c e n t a n d s t o c k s i n c r e a s e d 6.7 p e r c e n t .
Eight large m a n u f a c t u r e r s in District No. 1 (Boston) r e p o r t e d a decline of 14 per cent in production during April.
Shipments of five of
t h e s e firms decreased 24 p e r cent a s c o m p a r e d w i t h March, a n d their n e t
n e w orders w e r e 6 p e r cent smaller.
Orders of New England factories,
h o w e v e r , showed c o n s i d e r a b l e improvement in May, p a r t i c u l a r l y in the
case of w o m e n ' s shoes.
P r o d u c t i o n and shipments of U 5 firms in District
No. 3 (Philadelphia) declined 14 p e r cent a n d 13»5 P e r cent, respectively,
during April as compared with March, a n d new orders are only b e i n g obt a i n e d at r e d u c e d p r i c e s .
LUMBER.
T h e l u m b e r i n d u s t r y c o n t i n u e s to s h o w a n i m p r o v e m e n t
due to the increased building operations, a n d the regular spring demand
w h i c h has b e e n d e l a y e d this year.
District No. 12 (San F r a n c i s c o )
r e p o r t s that A p r i l p r o d u c t i o n r e a c h e d 95 P e r cent o f e s t i m a t e d n o r m a l
capacity, and there h a s been a slight increase scrfar in May.
Pro-
d u c t i o n of 1 7 2 m i l l s was 3 ^ 9 , 0 2 0 , 0 0 0 feet c o m p a r e d w i t h 3 8 1 , 5 7 2 , 0 0 0
f e e t i n M a r c h , a n d 2 5 3 , 5 0 6 , 0 0 0 f e e t i n A p r i l , 1 9 2 1 , i n c r e a s e s o f 1.9
- 25 p e r cent and 53-4 p e r cent respectively.
X-3419
Orders were received for
4 9 4 , 6 8 7 , 0 0 0 feet of lumber, an increase of 5*8 p e r cent over M a r c h
and of 67.9 per cent over April a year ago.
Shipments during April
totaled 424,725,000 feet conpared w i t h 420,108,000 feet in M a r c h and
266,361,000 feet in April, 1921.
U n f i l l e d o r d e r s a t t h e c l o s e of
A p r i l a m o u n t e d to 4 2 6 , 9 4 0 , 0 0 0 f e e t c o m p a r e d w i t h 3 7 5 , 3 4 6 , 0 0 0 f e e t
on M a r c h 31st, and 249,529,000 feet on April 30, 1921.
Logging opera-
t i o n s a r e n o w p r o c e e d i n g at f u n c a p a c i t y a n d d e m a n d for l o g s is r e p o r t e d g r e a t e r t h a n a t a n y time d u r i n g the p a s t t w e l v e m o n t h s .
The
s h i n g l e b r a n c h o f t h e l u m b e r i n d u s t r y h a s b e e n i m p r o v i n g s t e a d i l y , aid
the increased demand has advanced the price.
Orders and shipments
for 116 mills in D i s t r i c t No, 6 (Atlanta) have increased f r o m
2 4 7 , 8 5 2 , 1 0 0 f e e t a n d 2 3 8 , 3 3 2 , 7 5 5 f e e t i n M a r c h to 3 7 1 , 4 1 4 , 0 2 8 f e e t
and 322,66c,386 feet respectively in April.
Of 72 reporting mills,
5 8 were o p e r a t i n g f u l l t i m e a n d s i x were o p e r a t i n g f o u r d a y s a week,
one mill three days, one mill two days and one mill one day.
decreased from 296,272,3^1 feet
in March
to 2 8 2 , 5 2 8 , 7 9 5 f e e t
Production
April.
P r o d u c t i o n in D i s t r i c t No. 11 (Dallas), w h i c h h a d s h o w n a m a r k e d imp r o v e m e n t in March, declined somewhat in April.
O u t p u t is s t i l l b e l o w
s h i p m e n t s , a n d is o n l y 7 0 . 4 p e r c e n t o f o r d e r s , w h i l e u n f i l l e d o r d e r s
i n c r e a s e d f r o m 5 9 > 3 - 5 6 > 3 4 6 f e e t o n M a r c n 3 1 , to 7 0 , 7 3 7 , 5 0 0 f e e t a t t h e
end of A p r i l .
Retail lumber sales in District No. 9 (Minneapolis) were
50 p e r cent larger in A p r i l than in March, and s n o w e d a slight i n c r e a s e
over April last year.
The increased demand has advanced the wholesale
p r i c e and retail prices are firmer on all grades.
X-3419
BUILDING.
Building a c t i v i t y c o n t i n u e d , t o increase during A p r i l
a n d the value of contracts a w a r d e d in seven F e d e r a l R e s e r v e Districts
(compiled f r o m statistics gathered by the F. W. Dodge Co.) amounted
to $322,630,2^1, as compared w i t h $264,651,165 in March.
Increases
w e r e r e c o r d e d in six of t h e s e s e v e n D i s t r i c t s v a r y i n g f r o m 1 p e r cent
i n D i s t r i c t No* 3 ( P h i l a d e l p h i a ) to 6l p e r cent i n D i s t r i c t No, 1
(Boston).
T h e r e w a s a d e c l i n e of 1 7 p e r c e n t in t h e v a l u e of c o n -
tracts awarded in District No. 9 (Minneapolis).
The value of resi-
d e n t i a l b u i l d i n g c o n t r a c t s increased in each of t h e s e seven D i s t r i c t s
a n d a m o u n t e d to $ 1 2 5 , 8 7 3 >456 i n A p r i l , a s c o m p a r e d w i t h $ 1 1 2 , 5 7 7 , 3 9 7
in M a r c h .
District No. 3 ( P h i l a d e l p h i a ) r e p o r t s that b u i l d i n g of r e s i d e n c e s
s t i l l p r e d o m i n a t e s i n P h i l a d e l p h i a , a l t h o u g h a n u m b e r of c o n t r a c t s
have been made for construction of large hotels and office buildings.
T h e b u i l d i n g activity in that D i s t r i c t h a s r e s u l t e d i n a m a r k e d improvement in the b r i c k industry.
In District No. 5 (Richmond) resi-
d e n t i a l b u i l d i n g h a s resulted in a rather g e n e r a l d e c l i n e of r e n t s .
R e p o r t s i n d i c a t e that a c o n s i d e r a b l e v o l u m e of i n d u s t r i a l b u i l d i n g
h a s c o m m e n c e d i n D i s t r i c t N o . 8 ( S t . Lqpuis), a n d s o m e s h o r t a g e o f
skilled labor in the building trades has developed.
In District No.
11 (Dallas), construction for b o t h residential a n d business p u r p o s e s
is proceeding on a large scale.
EMPLOYMENT.
In New England the textile strike accounts for
4 0 , 0 0 0 u n e m p l o y e d w h i l e the c o a l s t r i k e is d i r e c t l y or i n d i r e c t l y
r e s p o n s i b l e for the idleness of m a n y thousands of w o r k e r s in v a r i o u s
- 2 7 parts of the country.
x-34ig •
I n v o l u n t a r y u n e m p l o y m e n t is ,however, s t e a d i l y
d i m i n i s h i n g a n d that fact is e m p h a s i z e d in a l l t h e r e p o r t s that h a v e
been received.
A l t h o u g h the f i g u r e s of the U n i t e d States B u r e a u of Labor
S t a t i s t i c s s h o w a f r a c t i o n a l p e r c e n t a g e l o s s , t h e y p r o b a b l y do n o t a d e q u a t e l y r e f l e c t the extent of the g e n e r a l i m p r o v e m e n t as the statistics
a r e b a s e d u p o n r e t u r n s f r o m l a r g e e m p l o y e r s of l a b o r l o c a t e d in industrial
centers.
N a t u r a l l y a t t h i s s e a s o n o f t h e y e a r m u c h o f t h e g a i n is d u e
to i n c r e a s e d o p p o r t u n i t i e s f o r o u t d o o r e m p l o y m e n t .
T h e g r e a t g a i n in
, b u i l d i n g a c t i v i t y h a s a f f o r d e d e s p e c i a l o p p o r t u n i t i e s n o t o n l y to w o r k e r s
i n t h e b u i l d i n g t r a d e s b u t in a l l i e d i n d u s t r i e s .
T h e N e w Y o r k S t a t e D e p a r t m e n t o f L a b o r r e p o r t s a s l i g h t l o s s in
n u m b e r s e m p l o y e d in f a c t o r i e s d u r i n g the m o n t h of A p r i l as c o m p a r e d w i t h
larch.
In District No. 3 (Philadelphia) there h a s been a d e c i d e d im-
p r o v e m e n t i n t h e e m p l o y m e n t s i t u a t i o n a c c o r d i n g to t h e P e n n s y l v a n i a S t a t e
Department of Labor.
O n M a y 15 t h e r e w e r e 1 3 9 , 2 8 0 u n e m p l o y e d i n t h e s i x
c i t i e s of A l t o o n a , H a r r i s b u r g , J o h n s t o w n , P h i l a d e l p h i a , S c r a n t o n a n d
W i l l i a m s p o r t , a d e c r e a s e of 10.1 p e r cent as c o m p a r e d w i t h t w o w e e k s ago
and o f 2 3 . 2 p e r cent as c o m p a r e d w i t h A p r i l 1$.
The reports from District
N o . 5 R i c h m o n d ) a r e p a r t i c u l a r l y e n c o u r a g i n g a n d i t is s t a t e d t h a t a c t u a l
s h o r t a g e s of l a b o r a r e a p p a r e n t in c e r t a i n l o c a l i t i e s .
The Public Em-
ployment Bureau of Richmond reported that during A p r i l more positions
w e r e open in the m e n ' s division than during any m o n t h since October 1920.
The special inquiry into employment conditions conducted by the Federal
Reserve B a n k of Chicago covered establishments employing 12^,295 workers
at t h e e n d o f A p r i l , a t o t a l w h i c h w a s 1 p e r c e n t i n e x c e s s of t h e f i g u r e
for the preceding month.
T h e d e c r e a s e s w e r e c o n f i n e d m a i n l y to f o o d
-
28
-
X-3419
s t u f f s , k n i t g o o d s , w e a r i n g a p p a r e l arid t h e l e a t h e r i n d u s t r i e s w h i l e
metals, machinery and construction industries improved.
In D i s t r i c t s
No. 9 (Minneapolis), No. 10 (Kansas City), and No, 12 (San F r a n c i s c o )
t h e r e s u m p t i o n of m i n i n g o p e r a t i o n s in copper, zinc and l e a d a r e a s
h a v e g i v e n e m p l o y m e n t to c o n s i d e r a b l e n u m b e r s o f m i n e r s , w h i l e f a r m
labor and construction work have likewise created an active demand.
F o r e x a m p l e , in A r i z o n a , Idaho, N e v a d a and U t a h , as s t a t e d i n the
report from District No. 12 (San Francisco), employment is g r e a t e r
than at any time d u r i n g the p a s t y e a r .
This i m p r o v e m e n t is "largely
due to r e n e w e d a c t i v i t y in the m i n i n g sections o f t h o s e s t a t e s a n d to
an increased demand for seasonal agricultural labor.
Four of the
l a r g e s t m i n i n g c o m p a n i e s in the G l o b e - M i a m i c o p p e r m i n i n g d i s t r i c t of
A r i z o n a reported an increase of 4 4 p e r cent in the number of e m p l o y e e s
o n t h e i r p a y r o l l o n M a y 1 a s c o m p a r e d w i t h A p r i l 1,'.'
X-3419
-29WHOLESALE TRADE
P e r c e n t a g e of i n c r e a s e (or d e c r e a s e ) in n e t s a l e s in
A p r i l , 1922 as compared with the p r e c e d i n g m o n t h
(March, 1922)
Groceries
:
Number
Disof F i r m s
: Fer
trict : PerReportNo.
c e n t a g e ing
-16.6
42
2
45
—14.2
3
4
24
-12.7
—10.0
45
5
6
-13. s
31
-13.2
7
39
8
-12.1
51
10
-10,2
9
11
12
- 9.3
12
-11-7
Boots & Shoes
Hardware
Dry Goods
:
:
: Per
rcentage
~ -24.3
-20.9
-14.7
-16.1
Number
of F i r m s
Report- : Pering
centage
6
-0.1
15
7.3
0.9
13
6.7
15
-5.6
20
-13.2
11
-17.1
7.8
-20.1
6
9-0
- 5.8
-3.6
7
- 5.0
11
1-7
- 9«b
2.9
Number
Number :
of F i r m s
of Firms:
Report- : Per- Reportc e n t a g e ing
ing
11
—26.2
9
26
12
18
IS
-3.4
20
-4.5
9
20
5.8
9
16
5
-3-5
8
12
-9.6
P e r c e n t a g e of i n c r e a s e ( o r d e c r e a s e ) i n n e t s a l e s i n
April 1922 as compared w i t h April 1921.
2
3
4
5
- 5-7
-16.9
-17.6
- 9•2
6
-15.9
7
5
10
11
12
-13* 2
- 6.0
-14.2
- 3.3
-
42
48
24
45
31
39
-29.5
-26.O
-19-7
-17.7
- 3-3
-13.0
-28.1
- 4.1
-10.7
-11.2
51
9
12
6.5
-13.0
- 9-2
- 6.0
1.0
-15.4
11
26
12
18
20
20
16
2.8
8
- 4.4
12
-6.5
6
15
13
15
20
11
6
7
11
-8.8
-
1.1
—17 - 2
-19-2
23-s
- 5.4
-13.3
9
18
9
9
5
-18.5
W i t h t h e e x c e p t i o n of h a r d w a r e , t h e i n c r e a s e s i n s a l e s s h o w n
during the month of M a r c h b y reporting wholesale firms have b e e n followed
by fairly heavy decreases.
In some Districts the coal strike has had
a n u n f a v o r a b l e e f f e c t u p o n s a l e s b u t it i s n o t p o s s i b l e to s a y h o w g r e a t
a f a c t o r the strike h a s been, since s a l e s w o u l d n a t u r a l l y r e c e d e at this
season of the year.
In the case of hardware lines, p u r c h a s e s of agri-
cultural implements, fencing and b u i l d e r s ' h a r d w a r e probably explain those
-30i n c r e a s e s that h a v e o c c u r r e d .
X34ig
R e p o r t s from the southern and western
s e c t i o n s of the c o u n t r y indicate that i m p a s s a b l e r o a d s a n d f l o o d c o n d i tions in certain areas have been unfavorable factors which have helped
to b r i n g about a somewhat m o r e t h a n seasonal r e c e s s i o n in sales.
RETAIL TRADE*
Generally throughout the country retail estab-
l i s h m e n t s r e p o r t d e c i d e d i m p r o v e m e n t i n b u s i n e s s d u r i n g t h e months o f
April.
T h i s is r e f l e c t e d b y s u b s t a n t i a l i n c r e a s e s i n m a n y c a s e s i n the
r a t i o o f A p r i l s a l e s to t h o s e a y e a r a g o , a n d i n o t h e r c a s e s b y s m a l l e r
decreases than occurred for previous months.
Most of the unfavorable
reports come from coal mining fields and cotton centers where strikes
are in effect, or from sections affected by high water*
The lateness
o f Easter, a n d t h e b a d M a r c h w e a t h e r p o s t p o n e d a l a r g e p a r t o f t h e s p r i n g
buying until April.
A f t e r the m i d d l e of the m o n t h , the v o l u m e of sales
t e n d e d to d i m i n i s h , b u t f u r t h e r r e d u c t i o n s o f p r i c e s a n d i n t r o d u c t o r y
sales of summer goods p r e v e n t e d any very marked d e c r e a s e .
As compared
w i t h this time last year, p r i c e s in the first four months of 1 9 2 2
s h o w a m u c h greater d e c r e a s e in most Districts t h a n d o sales*
R e p o r t s f r o m 4 6 1 department stores in t h e U n i t e d S t a t e s s h o w e d
a d e c r e a s e of 0 . 6 p e r cent in sales for the m o n t h a s compared w i t h April,
1921.
District Ho* 3 (Philadelphia) f i g u r e s w e r e m o s t f a v o r a b l e , in-
c r e a s i n g 5 p e r cent, while trade in District No. 11 (Dallas) suffered
the greatest decrease, namely 11.1 p e r cent.
T h e m a j o r i t y of D i s t r i c t s
h a d l a r g e r stocks o n h a n d at the c l o s e of A p r i l t h a n they h a d e i t h e r a
y e a r o r a m o n t h ago, b u t in all c a s e s the net c n a n g e was small*
D u e to
the i n c r e a s e d s a l e s , the r a t e of s t o c k t u r n o v e r n a t u r a l l y s h o w s a n increase,
The policy of hand-to-mouth buying apparently continues, for
-31-
x-3419
t h e p e r c e n t a g e o f o u t s t a n d i n g o r d e r s at t h e c l o s e o f t h e m o n t h to p u r chases for the year 1921 has been gradually decreasing since the opening
of the present year.
PRICES.
Not only did the p r i c e index of the Federal Reserve
B o a r d g a i n t w o p o i n t s i n A p r i l , r e a c h i n g l4s,
"been f u r t h e r g e n e r a l p r i c e a d v a n c e s i n M a y .
t u t t h e r e a p p e a r to h a v e
Corn, oats and wheat h a v e
r i s e n d e c i d e d l y w h i l e slight increases h a v e o c c u r r e d in the c a s e of
cattle, hogs and sheep.
p r i c e of mutton.
yarn and cloth.
There has b e e n a recent m a r k e d a d v a n c e in the
There were also increases in r a w cotton a n d in cotton
In t h e case of t h e two latter c o m m o d i t i e s , d e c r e a s e d
o u t p u t d u e to s t r i k e s w o u l d p a r t l y e x p l a i n t h e u p w a r d m o v e m e n t «
Wool
y a r n s are reported f i r m while prices of raw wool h a v e been moving
steadily upward.
A sharp increase in coal p r i c e s has already occurred
a s t h e r e s u l t o f t h e s t r i k e a n d p i g i r o n is a l s o m u c h h i g h e r *
As re-
gards the nonferrous metals, lead and copper p r i c e s have risen, while
zinc remains substantially unchanged.
FOREIGN TRADE.
Exports from the United States in April declined
slightly in value as compared with March, while imports showed a m o r e
decided falling off.
The figures are $321,000,000 for exports a n d
$ 2 1 7 , 0 0 0 , 0 0 0 for imports, the excess of exports over imports therefore
b e i n g $ 1 0 4 , 0 0 0 , 0 0 0 , w h i c h is l a r g e r t h a n t h e e x c e s s r e p o r t e d f o r a n y
month since last October.
T h e m o v e m e n t of s p e c i e d u r i n g A p r i l w a s
o n a m u c h r e d u c e d scale, net i m p o r t s of g o l d b e i n g o n l y $ 1 0 , 7 0 0 , 0 0 0 ,
i n c o n t r a s t w i t h $ 3 2 , 5 0 0 , 0 0 0 in M a r c h a n d $ 8 0 , 3 0 0 , 0 0 0 in A p r i l , 1 9 2 1 .
- 32 -
X-3U19
So far as quantities of commodities are concerned, the Federal R e s e r v e
B o a r d ' s foreign trade index shows practically n o change in the average
q u a n t i t i e s of g o o d s e x p o r t e d d u r i n g A p r i l c o m p a r e d w i t h t h e p r e v i o u s
m o n t h , but t h e i n d e x f o r i m p o r t s d r o p p e d f r o m 2 0 6 - 5 i n M a r c h to
169*1 in April, a decline of IS p e r cent.
G 0 LB
Federal
Reserve
Bank of
Balance last
statement
May 18, 1922.
$
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas CityDallas
San Francisco
Total
|$
Total
Gold
$
127,454,336.28
44,158,019.12
48,176,630.91
42,082,286.56
27,456,536.18
64,577,235-25
5,275,695.79
28,030,069.01
27,342,612.10
17,432,804.27
28,107,944.70
482,391,647.05 |$
Gold
Withdrawals
%,&9T,476.83
Deposits
747,035.00 $
1,326,545.00
821,748.50
1,374,318.00
1,072,300.00
668,260.50
954,575.50
745,300.00
384,425.00
671,750.00
880,675.00
875,900.00
10,522,832.50 |$
500.00
3,029,000.00
6,500,900.00
2,400.00
100,000.00
4,000,000.00
$
Net
Debits
2,829,821.20
1,034,112.11
1,780,951.92
9,409,352.62
7,098,330,04
2,295,988.98
5,925,197.32
3,216,706.02
$
Total
Debits
110,165,678.56 $
426,722,554.69
123,340,765.23
122,579.816,71
101,608,598.83
48,239,783.40
227,391,175.90
118,734,156.84
33,583,890.33
87,964,842.86
48,713,114.47
58,956,829.74
2,001,300.00
1,000,300.00
7,501,300.00
24,135,700.00 |$
Total
Credits
116,201,845.65 $
437,911,967.27
129,896,851.10
119,749.995.51
100,574,486.72
46,458,831.48
237,279,970.57
109,244,804.22
26,485,560.29
85,668,853.88
42,787,917.15
55,740,123.72
|$ 33,670,460.21 |$ 1,508,001,207.56 |$ 1,508,001,207.56 !$
X-3U20
Washington, D. C,
Aggregate
Aggregate
deposits and
withdrawals
and transfers
transfers from
Agent's fund
to Agent's fund
500.00 $
$
747,035.00 $
3,029,000.00
1,326,545.00
6,500,900.00
821,748.50
2,400.00
1,374,318.00
100,000.00
11,072,300.00
668,260,50
954,575.50
6,000,000.00
745,300.00
384,425*00
2,001,300.00
2,671,750.00
1,000,300.00
880,675.00
12,511,800.00
3,875,900.00
S ittlements from May 3
<
L9, 1922 to 1fey 25, 1
L922
inclxisive.
Federal
Reserve
Bank of
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
FEDERAL EESEEVE BOARD
S E T T L E M E N T FUND
25,522,832.50 j$
31,146,200.00 |$
Balance in
fund at close
of business
May 25, 1922.
Net
Credits
23,587,106-97 $
6,036,167.09 $
140,346,203-86
11,189,412.58
6,556,085.87
^97^891*71
30,075,874.45
26,007,323.76
73,511,454.42
9,888,794.67
5,041,043.17
20,547.313.97
25,376,173.12
12,627,231,95
33,527,138.68
•
V
r-r
T R A N S5F E R S
Debits
4,000,000.00 $
3,000,000.00
Credits
* '
' ##
1,000,000.00
4,000,000.00
1,000,000.00
1,000,000.00
7,000,000.00 |$ 7,000,000.00
Summary of chailges in ownership of gold bj banks through
r
transfers and $
settlements.
Decrease
5,829,821.20
1,034,112.11
780,951.92
5,489,352.62
7,098.330.04
1,295,988.98
4.925,197.32
3,216,706.02
Increase
$ 2,036,167,09
11,189,412.53
6,556,085.87
9,888,794.67
OTI.,,, „
33,670,460.21 |$ 488,015,014.55 |$ 2 9 , 6 7 0 , 4 6 0 . 2 1 1$ 29,670,460.21
F E D E R A L
V U A 1 M . VU V.U
U 4 1 C . y J 4C1
Federal
Reserve
Agent, at
Boston
Gold
Balance last
statement
M a y .16, 1 9 2 2 .
$
118,000,000
"SM .
Gold
Withdrawals
$
-
R E S E R V E
-
$
-
FUND
X-3420a
W a s h i n g t o n , D . C.
\ VV1NJ?-ujcivm-tiju/
Withdrawals
for
transfers
to bank
Deposits
$
AGENTS'
Deposits
. through
transfers
from bank
$
-
J t I-U.
Of
Total
Withdrawals
$
Deposits
-
New York
401,000,000
-
-
-
-
Philadelphia
144,389,260
-
—
-
-
-
Cleveland
150,000,000
—
-
—
-
$
-
-
Richmond
91,000,000
Chicago
-
40,795,000
Atlanta
-
Balance at
close of
business
M a v 25. 1922.
Total
$
-
118,000,000
401,000,000
13,000,000
-
150,000,000
53,795,000
144,389,260
3,000,000
-
10,000,000
2,000,000
2,000,000
-
-
2,000,000
2,000,000
91,000,000
330,644,500
5,000,000
10,000,000
-
-
5,000,000
10,000,000
335,644,500
St. tools
58,800,000
2,000,000
-
2,000,000
-
4,000,000
54,800,000
Minneapolis
16,000,000
-
-
-
Kansas City
44,360,000
Dallas
10,000,000
San Francisco
Total
2,000,000
-
|$
-
11,000,000 |$
16,000,000
2,000,000
-
-
•
185,253,500
1$ 1,590,242,260
1,000,000
3,000,000
5,010,500
7,010,500
3,000,000
2,000,000
-
-
}$
-
|$
|$ 18,010,500
45,360,000
10,000,000
3,000,000
5,010,500
15,000,000
-
16,000,000
|$
183,243,000
31,000,000
($1,603,231,760
Ci
00
X-3421
F E D E R A L
R E S E R V E
B O A R D
STATEMENT FOR THE PRESS
For release in afternoon papers,
Friday, June 2, 1922.
CONDITION OF THE ACCEPTANCE MARKET
T h e r e p o r t s of m o s t F e d e r a l R e s e r v e B a n k s i n d i c a t e a n inc r e a s e i n t h e a c t i v i t y of t h e a c c e p t a n c e m a r k e t .
Both pur-
chases a n d sales of bills increased c o n s i d e r a b l y as compared
with previous periods.
District No. 3 (Philadelphia) and
D i s t r i c t N o . 7 (Chicago), in w h i c h the l a r g e s t i n c r e a s e s
o c c u r r e d , r e p o r t : "For t h e m o n t h e n d i n g M a y 1 0 t h e a m o u n t
of a c c e p t a n c e s executed w a s $3,27^,000; for the m o n t h e n d i n g
April 10, $3,097,000, and for that ending February 10,
$2,365,000. (Philadelphia)."
"Average weekly purchases in this period reported b y d e a l e r s
to this b a n k , amounted to $7,660,000 as compared w i t h $2,275>000
i n t h e p r e c e d i n g f i v e creeks, w h i l e a v e r a g e w e e k l y s a l e s i n c r e a s ed from $2,797,000 to $7,922,000. (Chicago)."
District No.
1 2 ( S a n F r a n c i s c o ) r e p o r t s a n i n c r e a s e of 4 2 p e r c e n t i n
acceptances bought over the previous period.'
The m a r k e t in D i s t r i c t N o . 1 (Boston) w a s somewhat spotty
a t t h e b e g i n n i n g o f t h e r e p o r t i n g p e r i o d b u t s h o w e d s i g n s of
- 2 -
X-3U21
i m p r o v e m e n t towards the end of A p r i l .
The rate of 3 - l / S per cent
p r e v a i l i n g i n B o s t o n f a i l e d to i n d u c e c o u n t r y b a n k e r s to p u r c h a s e
bills.
This rate could not have been held except for buying from
special sources in N e w Y o r k and Chicago.
At the end of the period
dealers increased the selling rate for b i l l s f r o m 3 - 1 / 8 to 3 i per cent
a n d r a i s e d the b u y i n g rata to 3 - 3 / S P e r c e n t .
The latter rate
however could not be maintained, as no new bills w e r e offered, and
s o it w e n t b a c k t o 3 ? p e r c e n t .
D i s t r i c t N o . 2 (New Y o r k ) shows the same t e n d e n c y as B o s t o n .
A t t h e b e g i n n i n g o f t h e p e r i o d b o t h d e m a n d a n d s u p p l y v/ere d u l l
but showed considerable improvement towards the end.
A t the be-
ginning dealers offered at 3-3/8 P 3 r cent and were bidding 3s
per cent.
T o w a r d s the e n d of t h e p e r i o d , h o w e v e r , a s n e w b i l l s
became scarce, they b i d 3* per cent and offered"at 3 - l / s p e r cent.
T h e c o m p a r a t i v e s c a r c i t y of the s u p p l y of b i l l s is p a r t l y d u e to
the i n c l i n a t i o n of b a n k s to h o l d t h e i r o w n a c c e p t a n c e s in v i e w of
comparatively easy money.
A s in p r e v i o u s p e r i o d s f o r e i g n
o w n e d m o n i e s c o n t i n u e d to i n c r e a s e t h e d e m a n d foi
bankers' b i l l s
A d e c l i n e i n t h e a m o u n t o f a c c e p t a n c e s e x e c u t e d is r e p o r t e d b y
the F e d e r a l R e s e r v e B a n k s of D i s t r i c t s N o . 6 ( A t l a n t a ) , N o . 8
(St. L o u i s ) a n d N o . 1 1 ( D a l l a s ) .
District No. 4 (Cleveland)
reports a dull market with small supply and slight demand throughout the entire period.
The decrease in the a m o u n t of acceptances
- 3 -
X-3421
i n D i s t r i c t s N o , 6 ( A t l a n t a ) a n d N o . 11 ( D a l l a s ) is m a i n l y d u e to t h e
d e c l i n e i n the v o l u m e of b i l l s "based u p o n d o m e s t i c s h i p m e n t s .
In Atlanta
domestic acceptances decreased 24.6 per cent while foreign acceptances
d e c l i n e d o n l y % . 2 p e r c e n t a s c o m p a r e d w i t h the p r e v i o u s p e r i o d .
The preference for maturities varied, 90 day b i l l s b e i n g in heaviest
demand.
Districts N o . Y(Chicago) and N o . 12 (San F r a n c i s c o ) show the
f o l l o w i n g range of m a t u r i t i e s :
30 day
ll£
19-6
Chicago
San Francisco
Total
100#
100^
120 day
16%
10.4
90 day
60 day
15c/»
11-5
58-5
T h e p r e v a i l i n g r a t e s in D i s t r i c t s N o . 2 ( N e w Y o r k ) N o , 4 ( C l e v e l a n d ) a n d
No. 7 (Chicago) were as follows:
Rates on prime bills
Bid
Sanga during period
Offered
Close
Bid
30-day m a t u r i t y )
No. 2
(New York)
60 "
go
"
120 "
150 "
ISO "
1
1
"
) 3i
)
"
»
"
) 3-3 /
)
)
3-1/8
30-day m a t u r i t y )
No. 4
(Cleveland)
60 "
90 "
"
"
) 3i )
120 "
150 "
ISO "
"
"
"
)
) 3i - 3 - 7 / 8
)
3-7/8
30-day m a t u r i t y )
No. 7
(Chicago)
Offered
60 n
90 "
"
"
) 3i - 3S•
)
120 "
150 "
ISO "
"
"
"
)
) 3i - 3i
)
3-1/8 -
3!
3i
3-l/8
3 - 1 / 5 - 3l
3-1/5
3-1/8
-
3-3/8
3I - 3-3/8
3-1/8 -
3-3/8
3i - 3i
3-1/8
3-i/8
- )
FEDERAL RESERVE BOARD
WASHINGTON
X-3U22
M a y 27, 1 9 2 2 .
SUBJECT:
D e c i s i o n in Richmond Par Clearance Case.
Bear Sir:
T h e r e is t r a n s m i t t e d h e r e w i t h , f o r y o u r
information, a copy of the d e c i s i o n b y the S u p r e m e
Court of the State of N o r t h Carolina in the case of
t h e F a r m e r s a n d M e r c h a n t s B a n k , et a l , v . t h e F e d e r a l
Reserve B a n k of Richmond.
Very truly yours,
G o v
(Enclosure)
T O C H A I R M E N O F ALI« F . R . B A N K S .
e r n o
r.
COPY
X-3U22&
N O R T H C A R O L I N A S U P R E M E C O U R T - S p r i n g T e r m 1 9 2 2 - #1+19 U n i o n .
F a r m e r s a n d M e r c h a n t s B a n k et a l s
V*
F e d e r a l R e s e r v e B a n k of R i c h m o n d , V a «
Appeal by defendants from Webb, J.
F e b . T e r m 1 9 2 2 of U n i o n .
T h i s a c t i o n w a s b r o u g h t b y t h i r t e e n banks a n d trust c o m p a n i e s o r g a n i z e d
u n d e r t h e la-re o f t h i s S t a t e w h i c h a r e n o t m e m b e r s o f t h e F e d e r a l R e s e r v e
S y s t e m , a g a i n s t t h e F e d e r a l R e s e r v e B a n k o f R i c h m o n d , V a . , tc o b t a i n a n
i n j u n c t i o n to p r e v e n t the F e d e r a l R e s e r v e B a n k f r o m r e f u s i n g to a c c e p t
exchange drafts d r a w n b y the p l a i n t i f f s o n their r e s e r v e d e p o s i t s for
less t h a n the f a c e amount of checks p r e s e n t e d , a n d f r o m r e t u r n i n g a s d i s honored checks drawn b y various depositories u p o n the plaintiff banks which
h a d b e e n p r e s e n t e d a t t h e i r c o u n t e r s b y the F e d e r a l R e s e r v e B a n k o f R i c h m o n d
b u t f o r w h i c h the p l a i n t i f f s h a d t e n d e r e d d r a f t s f o r l e s s a m o u n t s d r a w n b y
them upon their respective reserve depositories.
A temporary restraining
o r d e r w a s a w a r d e d in a c c o r d a n c e w i t h the p r a y e r of t h e c o m p l a i n t .
The
a c t i o n h a v i n g b e e n b r o u g h t b y said b a n k s f o r the b e n e f i t of t h e m s e l v e s and
s u c h o t h e r l i k e i n s t i t u t i o n s w h o m i g h t j o i n in t h e s u i t a n d t h e r e s t r a i n i n g
order p r o v i d i n g that all such institutions m i g h t b e c o m e p l a i n t i f f s in the
action and h a v e the benefit of said restraining order, some 265 state banks
a n d t r u s t c o m p a n i e s h a v e b e c o m e p a r t i e s p l a i n t i f f as a p p e a r s f r o m t h e r e c o r d .
By agreement between counsel, trial b y jury was waived and by consent
the judge f o u n d the f a c t s a n d u p o n the said f i n d i n g of the f a c t s a d j u d g e d :
( l ) T h a t t h e d e f e n d a n t , F e d e r a l R e s e r v e B a n k o f R i c h m o n d , is h e r e b y
e n j o i n e d f r o m r e f u s i n g t o a c c e p t e x c h a n g e d r a f t s w h e n t e n d e r e d b y the
- 2 -
X-}k22a
p l a i n t i f f "banks i n p a y m e n t o f c h e c k s d r a w n o n t h e m u n d e r t h e o p t i o n g i v e n
said b a n k s u n d e r p r o v i s i o n s of C h a p t e r 2 0 L a w s N . C. r a t i f i e d 5 Feb. 1921;
( 2 ) T h e s a i d d e f e n d a n t is h e r e b y e n j o i n e d f r o m r e t u r n i n g a s d i s h o n o r e d
any check, payment for w h i c h in exchange drafts b y plaintiff banks or either
of t h e m , h a s b e e n tendered u n d e r the p r o v i s i o n s of s a i d act and the d e f e n d a n t r e f u s e s to a c c e p t the same;
( 3 ) T h e s a i d d e f e n d a n t is l i k e w i s e e n j o i n e d f r o m p r o t e s t i n g f o r n o n p a y m e n t any c h e c k , p a y m e n t f o r w h i c h in exchange d r a f t s b y p l a i n t i f f b a n k s ,
or e i t h e r of t h e m , h a s b e e n t e n d e r e d u n d e r the p r o v i s i o n s of s a i d A c t
a n d d e f e n d a n t r e f u s e s to a c c e p t the same;
( U ) T h e s a i d d e f e n d a n t is l i k e w i s e e n j o i n e d f r o m p u b l i c a t i o n o r
a u t h o r i z i n g the p u b l i c a t i o n of the name of a n y of the p l a i n t i f f b a n k s ,
l i t e r a l l y or b y i n c l u s i o n , in a n y l i s t or o t h e r p u b l i c a t i o n d e s i g n e d f o r
circulation among b a n k i n g institutions generally, regardless of the name
employed to designate such list or publication
u n l e s s a n d u n t i l the b a n k
thus published or included shall have previously given its consent to such
publication.
Appeal b y the defendant,
Alex W. Smith and Stack, Parker & Craig for plaintiffs.
Connor & H i l l , H e n r y W . Anderson, M. G. Wallace and C.7r.Tillett,Jr.for
defendant.
C l a r k . C. J .
T h e d e f e n d a n t , F e d e r a l R e s e r v e B a n k o f R i c h m o n d , is a b a n k i n g
c o r p o r a t i o n d u l y o r g a n i z e d u n d e r the A c t of C o n g r e s s a n d e s p e c i a l l y u n d e r a
certain Act k n o w n as the Federal Reserve Act.
I t is o n e of t h e 1 2 F e d e r a l
- 3 -
X-jU22a
R e s e r v e B a n k s w h i c h w e r e organized, u n d e r the t e r m s of that A c t and d o e s
b u s i n e s s in a c c o r d a n c e therewith, e s p e c i a l l y w i t h the N a t i o n a l banks and
State m e m b e r b a n k s in the Fifth Federal Reserve D i s t r i c t , w h i c h consists
o f a p o r t i o n o f t h e S t a t e of W e s t V i r g i n i a , t h e w h o l e o f M a r y l a n d , the
D i s t r i c t of C o l u m b i a , V i r g i n i a , N o r t h C a r o l i n a a n d S o u t h C a r o l i n a .
Under
t h e t e r m s o f t h i s A c t , t h e m e m b e r b a n k s , w h i c h a r e the N a t i o n a l b a n k s in
the above m e n t i o n e d district and also certain State banks therein, w h i c h
h a v e q u a l i f i e d f o r a n d b e e n a d m i t t e d to m e m b e r s h i p i n t h e F e d e r a l R e s e r v e
S y s t e m , a r e r e q u i r e d to k e e p a n d m a i n t a i n w i t h t h e F e d e r a l R e s e r v e B a n k of
Richmond certain balances as reserves.
The m e m b e r banks create these
b a l a n c e s b y s e n d i n g to t h e F e d e r a l R e s e r v e B a n k f o r c o l l e c t i o n c h e c k s or
other instruments w h i c h they h a v e received on deposit or for collection.
Since the b u s i n e s s of all b a n k i n g i n s t i t u t i o n s c o n s i s t s l a r g e l y in
t h e h a n d l i n g o f c h e c k s , it is c l e a r t h a t if t h e F e d e r a l R e s e r v e B a n k is
to d i s c h a r g e e f f i c i e n t l y its f u n c t i o n a s a r e s e r v e d e p o s i t o r y of i t s
m e m b e r b a n k s , it m u s t b e a b l e to c o l l e c t t h e i r c h e c k s a n d o t h e r i n s t r u m e n t s
w h i c h are the o r d i n a r y m e a n s of m a k i n g s e t t l e m e n t of a c c o u n t s and t r a n s m i t t i n g
funds.
When the Federal Reserve Banks ware first organized they ware not
e x p r e s s l y e m p o w e r e d to a c c e p t f o r c o l l e c t i o n a n y c h e c k u n l e s s it w a s d r a w n
u p o n a m e m b e r b a n k or other Federal Reserve Bank.
Since member banks re-
ceive checks not only upon other member banks but also u p o n non-member
b a n k s , a n d since the m e m b e r b a n k s w h i c h include m o s t of the l a r g e r b a n k s
o f t h e c o u n t r y , a c t e d a s a g e n c i e s t h r o u g h w h i c h the n o n - m e m b e r b a n k s
c o l l e c t e d c h e c k s w h i c h t h e y h a d r e c e i v e d , it s o o n b e c a m e e v i d e n t t h a t if
t h e F e d e r a l R e s e r v e B a n k s u n d e r t o o k to c o l l e c t c h e c k s u p o n t h e i r m e m b e r
C56
- U -
X-jU22a
banks but could not collect for member banks checks u p o n n o n - m e m b e r banks,
a v a s t m a j o r i t y o f c h e c k s u p o n m e m b e r b a n k s w o u l d p a s s t h r o u g h the' F e d e r a l
Reserve Banks while checks on non-member banks would be collected through
other agencies.
As the amount of the checks w h i c h any b a n k r e c e i v e s u p o n others and
t h e a m o u n t o f c h e c k s u p o n i t s e l f w h i c h it is c o m p e l l e d to p a y , w i l l u s u a l l y
bs about
t h e s a m e , if a F e d e r a l R e s e r v e B a n k c o u l d h a n d l e a l l c h e c k s u p o n
m e m b e r b a n k s but could receive f r o m ^ m e m b e r b a n k s o n l y a p o r t i o n of the
c h e c k s w h i c h t h e y t h e m s e l v e s r e c e i v e , i n t h e c o u r s e o f t i m e t h e f l o w of
checks would be unequal and the member banks w o u l d be placed at a great
d i s a d v a n t a g e i n t h e i r e f f o r t s to m a i n t a i n p r o p e r r e s e r v e s .
As a con-
s e q u e n c e , C o n g r e s s b y t h e A c t of 7 S e p t . 1 9 1 6 a n d o f 2 1 J u n e 1 9 1 7 , a m e n d e d
S e c . 1 3 of t h e F e d e r a l R e s e r v e A c t a n d a u t h o r i z e d a n y F e d e r a l R e s e r v e B a n k
to r e c e i v e f o r c o l l e c t i o n f r o m i t s m e m b e r b a n k s " c h e c k s a n d d r a f t s p a y a b l e
u p o n p r e s e n t a t i o n i n i t s d i s t r i c t " , t h u s r e m o v i n g a n y l i m i t a t i o n u p o n the
p o w e r of the F e d e r a l Reserve B a n k to receive c h e c k s .
F r o m the v e r y nature
of a c h e c k n o p e r s o n is o b l i g e d to c o n s i d e r t h e d r a w e e , or p e r s o n u p o n
w h o m it is d r a w n , b e f o r e r e c e i v i n g it e i t h e r a s a h o l d e r o r a s a n a g e n t
for collection.
U n d e r t h e l a w b e f o r e the l a s t m e n t i o n e d a m e n d m e n t to t h e F e d e r a l Res e r v e A c t , F e d e r a l R e s e r v e B a n k s w e r e r e q u i r e d to r e c e i v e c h e c k s u p o n
m e m b e r b a n k s f o r c o l l e c t i o n at p a r , a n d w e r e , t h e r e f o r e , c o m p e l l e d to
r e q u i r e m e m b e r b a n k s to p a y t h e m the full face a m o u n t of all c h e c k s r e ceived.
It is o b v i o u s t h a t if m e m b e r b a n k s w e r e c o m p e l l e d t o p a y t h e
- 5 -
X-3422a
full face amount for all checks h a n d l e d through the Federal Reserve Banks
"but s u c h b a n k s c o u l d n o t r e q u i r e n o n - m e m b e r b a n k s t o p a y t h e f u l l f a c e
amount
.on c h e c k s d r a w n u p o n t h e m , a g r e a t i n e q u a l i t y w o u l d r e s u l t b e -
c a u s e n o n - m e m b e r b a n k s w o u l d , t h r o u g h the a g e n c y o f t h e i r m e m b e r b a n k '
correspondents, collect all c h e c k s u p o n any m e m b e r b a n k at par; but
w o u l d n o t p a y to m e m b e r banks checks d r a w n u p o n themselves at p a r .
With
this in v i e w , C o n g r e s s expressly p r o v i d e d b y the a m e n d m e n t of 2 1 June 1 9 1 7
t h a t " n o c h a r g e f o r the p a y m e n t of t h e c h e c k s a n d d r a f t s a n d t h e r e m i s s i o n
t h e r e f o r b y e x c h a n g e or. o t h e r w i s e s h a l l b e m a d e a g a i n s t t h e F e d e r a l R e s e r v e
Bank".
I n e x e r c i s e o f t h e po-ver t h u s c o n f e r r e d , t h e F e d e r a l R e s e r v e B a n k o f
R i c h m o n d u n d e r t o o k to m a k e a r r a n g e m e n t s w i t h all n o n - m e m b e r b a n k s in its
d i s t r i c t u n d e r w h i c h t h e y w o u l d a g r e e to r e m i t a t p a r f o r a l l c h e c k s w h i c h
the F e d e r a l R e s e r v e B a n k r e c e i v e d u p o n them-
P r i o r to t h i s
t i m e , it h a &
b e e n the c u s t o m of m a n y small b a n k s , e s p e c i a l l y those l o c a t e d in remote
sections and thus f r e e f r o m c o m p e t i t i o n , to r e f u s e to remit t h e full face
a m o u n t f or c h e c k s d r a w n u p o n t h e m T h i c h w e r e sent t h r o u g h the m a i l s , but they
i n s i s t e d t h a t i n a s m u c h a s t h e c h e c k c a l l e d f o r payment i n m o n e y at t h e i r
c o u n t e r s a n d n o t f o r a r e m i s s i o n b y d r a f t or o t h e r w i s e , t h e y c o u l d r e f u s e to
p a y a n y c h e c k u n t i l it w a s p r e s e n t e d a t t h e i r c o u n t e r s a n d t h a t , t h e r e f o r e ,
if t h e y u n d e r t o o k t o r e m i t f o r c h e c k s s e n t t h e m b y m e a n s o f a n e x c h a n g e
d r a f t , t h e y c o u l d , in c o n s i d e r a t i o n of t h e i r w a i v e r of d i r e c t p r e s e n t a tion demand a discount and remit
some lesser sum.
n o t t h e f u l l f a c e a m o u n t of c h e c k s , b u t
T h i s is c a l l e d a n e x c h a n g e c h a r g e f o r r e m i t t i n g f o r
- 6 checks-
X-3U22a
T h e a m o u n t of t h i s c h a r g e o r d i s c o u n t e x a c t e d i n c o n s i d e r a t i o n
of p a y m e n t b y d r a f t r a t h e r t h a n i n c a s h v a r i e d , b u t u s u a l l y r a n f r o m l / l O
t o l / 4 o f 1/0 u p o n t h e a m o u n t of a l l c h e c k s so p a i d M a n y n o n - m e m b e r b a n k s refused to m a k e a n y a g r e e m e n t to p a y the
F e d e r a l R e s e r v e B a n k at p a r f o r c h e c k s s e n t t h e m f o r c o l l e c t i o n t h r o u g h
the mails.
The
F e d e r a l R e s e r v e B a n k of R i c h m o n d 1 w a s p r o h i b i t e d b y t h e
F e d e r a l Reserve Act f r o m p e r m i t t i n g any discount to b e d e d u c t e d from
t h e f a c e a m o u n t o f c h e c k s w h i c h it h e l d f o r c o l l e c t i o n .
It s e n t r e p r e -
s e n t a t i v e s to t h e n o n - m e m b e r b a n k s i n N . C . u r g i n g t h e m t o a g r e e t o r e m i t
a t p a r , e x p l a i n i n g t h a t it b e l i e v e d t h a t s u c h p r a c t i c e w o u l d b e f o r t h e
m u t u a l c o n v e n i e n c e of b o t h p a r t i e s a n d t h a t a n i n s i s t e n c e b y t h e n o n m e m b e r b a n k s o n t h e i r s t r i c t l e g a l r i g h t to h a v e a c h e c k p r e s e n t e d f o r
p a y m e n t at t h e i r c o u n t e r s a n d t o p a y t h e s a m e o n l y i n l e g a l m o n e y w o u l d
b e a n i n c o n v e n i e n t a n d e x p e n s i v e m e t h o d of d e a l i n g , n o t o n l y to t h e
F e d e r a l Reserve B a n k of R i c h m o n d , but a l s o to the n o n - m e m b e r b a n k s .
The
n o n - m e m b e r b a n k s w e r e a t the s a m e t i m e a l s o n o t i f i e d t h a t if t h e y s h o u l d
i n s i s t u p o n t h e i r l e g a l r i g h t to r e q u i r e a p r e s e n t a t i o n a t t h e i r c o u n t e r s
of a l l c h e c k s d r a w n u p o n t h e m vvhen h a n d l e d b y a F e d e r a l R e s e r v e B a n k , t h e
F e d e r a l R e s e r v e B a n k w o u l d b e c o m p e l l e d to p r e s e n t t h e c h e c k s at t h e i r
c o u n t e r s b y m e a n s of d u l y a u t h o r i z e d a g e n t s b u t if c o m p e l l e d t o t a k e t h i s
course the F e d e r a l Reserve B a n k w o u l d , a f t e r s u c h p r e s e n t a t i o n , refuse
t o "'aive its r i g h t t o i n s i s t u p o n p a y m e n t i n l e g a l t e n d e r m o n e y -
- 7 -
X-3%22a
The Federal Reserve Bank made arrangements with certain residents of the towns in w h i c h various n o n - m e m b e r b a n k s w e r e s i t u a t e d to
c o l l e c t c h e c k s a s i t s a g e n t s b y m e a n s o f p e r s o n a l p r e s e n t a t i o n o r it
sent a n e m p l o y e e to such t o w n to act as its a g e n t ,
On 15 November 1921, the Federal Reserve B a n k of Richmond gave
n o t i c e t h a t it w o u l d c o l l e c t c h e c k s u p o n a l l n o n - m e m b e r b a n k s i n N , C .
by s e n d i n g t h e m t h r o u g h the m a i l if the b a n k w o u l d a g r e e to p a y the
full a m o u n t d u e u p o n the checks, or b y p e r s o n a l p r e s e n t a t i o n b y the
a g e n t if t h e n o n - m e m b e r b a n k r e f u s e d t o p a y t h e f u l l f a c e a m o u n t o f
the check u n l e s s p r e s e n t e d p e r s o n a l l y at its c o u n t e r .
T h e L e g i s l a t u r e of N , C,, L a w s 1 9 2 1 , C h a p t e r 20, a u t h o r i z e d
S t a t e b a n k s i n N. C. to charge a fee not in e x c e s s of l / S of 1 ^ o n
r e m i t t a n c e s c o v e r i n g checks, o r a m i n i m u m f e e of 10'& a n d p r o v i d e d
that in the event a Federal Reserve Bank, post office, or express
company s h o u l d present checks at the counters of the d r a w e e b a n k a n d
d e m a n d p a y m e n t i n c a s h , s u c h d r a w e e "bank s h o u l d b e p e r m i t t e d to p a y
by means of a draft drawn upon its exchange deposit, excepting, however,
checks p a y a b l e to the State or to the Federal Government and checks
u p o n w h i c h t h e d r a w e r h a d e x p r e s s l y d e s i g n a t e d to the
contrary-
The
defendant bank, being advised that this statute w a s unconstitutional,
presented the checks at the counter of the drawee bank, demanding the
full amount due a n d returned the checks as d i s h o n o r e d w h e n payment in
full was refused.
In returning checks w h i c h h a d b e e n so p r e s e n t e d ,
the F e d e r a l R e s e r v e B a n k of R i c h m o n d w a s c a r e f u l to state that the
c h e c k h a d been d u l y presented a n d t h a t p a y m e n t i n m o n e y a t i t s f a c e
amount had b e e n demanded but had b e e n refused as the drawee bank claimed
- g -
X-3422a
the right to d i s c h a r g e its o b l i g a t i o n b y its own d r a f t .
T h e p l a i n t i f f s in this p r o c e e d i n g sought to r e s t r a i n the F e d e r a l
Reserve Bank of Richmond, from returning any check presented under
t h e s e c i r c u m s t a n c e s a n d t o r e q u i r e it t o a c c e p t a n e x c h a n g e d r a f t f r o m
t h e p l a i n t i f f s w h e n a n y c h e c k h a d b e e n t h u s p r e s e n t e d to t h e m r e g a r d less w h e r e such e x c h a n g e draft w a s p a y a b l e or w h e t h e r o r not the p a y m e n t
o f it c o u l d b e i n d e f i n i t e l y p o s t p o n e d , a s s u g g e s t e d i n t h e a r g u m e n t ,
by a succession of such exchange drafts.
The p l a i n t i f f s , however, in a d d i t i o n to the e c o n o m i c effect of
the F e d e r a l statute w h i c h f o r b i d s the p a y m e n t b y the R e s e r v e Bank of
a charge for collection of checks thus forcing, as they claim, all
c o l l e c t i o n to b e m a d e t h r o u g h t h e F e d e r a l R e s e r v e B a n k s w h o c a n t h u s
collect without charge, made the further a l l e g a t i o n that the defendant
was u n d e r t a k i n g to coerce the non-member b a n k s to a b a n d o n their right
to c h a r g e for r e m i t t i n g for c o l l e c t i o n s of checks u p o n t h e m b y saving
u p checks over a c o n s i d e r a b l e p e r i o d of time u n t i l they r e a c h e d a large
a m o u n t a n d t h e n d e m a n d i n g them at the counter w i t h the p r o b a b l e effect
of d r i v i n g the b a n ! into liquidation.
W e n e e d not consider this a l l e g a t i o n w h i c h w a s n o t o n l y denied
b y the d e f e n d a n t but w h i c h the court has found a s a fact to b e untrue,
a n d the plaintiffs^^nave t a k e n no e x c e p t i o n to s u c h f i n d i n g .
It w o u l d
be unnecessary to notice this proposition but that such conduct was
condemned b y Mr. Justice Holmes in the case o f the A m e r i c a n B a n k & Trust
Co. v Federal R e s e r v e B a n k o f Atlanta, o p i n i o n f i l e d l 6 May 1 9 2 1 .
That
decision was r e n d e r e d u p o n a demurrer on which, o f course, the court
- 9 -
X-3U22a
:
v
a s s u m e d t h a t a l l the a l l e g a t i o n s o f t h e b i l l a n d a l l r e a s o n a b l e i n f e r e n c e s
f r o m t h e m .-/ere t r u e .
T h e f i n d i n g of fact o n the trial in the p r e s e n t
case, eliminated this question entirely f r o m our consideration.
The r e c o r d and briefs in this case are v o l u m i n o u s and the argument
h a s b e e n v e r y e l a b o r a t e a n d a b l e as the i m p o r t a n c e of t h e c a s e d e m a n d e d .
T h e F e d e r a l R e s e r v e B a n k u n d e r the p r o v i s i o n s o f t h e F e d e r a l
Statute
h a s the right to receive for c o l l e c t i o n a c h e c k d r a w n u p o n a n o n - m e m b e r
b a n s , o r u p o n a n y o t h e r p e r s o n - vithin i t s d i s t r i c t u n d e r the c l e a r u n m i s t a k a b l e terms of the act.
T h e a m e n d m e n t m a d e 21 J u n e 1917
to S e c . 13 o f the F e d e r a l R e s e r v e A c t
p r o v i d e s : "No c h a r g e f o r t h e p a y m e n t of t h e c l u c k s a n d d r a f t s a n d t h e r e m i s s i o n t h e r e f o r f o r e x c h a n g e o r o t h e r w i s e s h a l l b e m a d e a g a i n s t the
Federal Reserve Banks".
T h e r e a l q u e s t i o n , t h e r e f o r e , p r e s e n t e d f o r u s is w h e t h e r t h e L e g i s l a t u r e
o f N . C. c a n b y t h e A c t a b o v e m e n t i o n e d , C h a p . 2 0 L a w s 1 9 2 1 , i n t e r f e r e w i t h
t h i s p r o v i s i o n o r r e g u l a t i o n of t h e F e d e r a l c o r p o r a t i o n b y a v a l i d A c t o f
C o n g r e s s b y p r o v i d i n g t h a t a s t a t e b a n k n e e d n o t p a y its o b l i g a t i o n s in
lawful money %hen checks, which u p o n their face are unconditional orders
for the p a y m e n t of m o n e y , are p r e s e n t e d by Federal Reserve B a n k s .
The question m a y be p r e s e n t e d concretely by this h o m e l y illustration.
Suppose a farmer or merchant or other c i t i z e n of this State should send
h i s c h e c k f o r $ 1 , 0 0 0 , d r a w n o n a bank, i n t h i s S t a t e , i n p a y m e n t of a p u r c h a s e o f goodjs o r o t h e r a r t i c l e , to N e w Y o r k ,
T h e p e r s o n r e c e i v i n g it w o u l d
p l a c e t h i s c h e c k , i n t h e o r d i n a r y c o u r s e o f b u s i n e s s , to h i s c r e d i t i n s o m e
b a n k in t h a t c i t y , w h i c h b a n k i n o r d i n a r y u s a g e w o u l d s o m e t i m e s c h a r g e f o r
c o l l e c t i o n a small sum b a s e d u p o n the i n t e r e s t f o r the t i m e u s u a l l y occupied
X-3422a
-10-
i n s e n d i n g t h e c h e c k to t h e b a n k h e r e a n d the r e t u r n o f t h e c o l l e c t i o n
to the bank in N e w York.
A s to t h i s c h a r g e , w h i c h is a m a t t e r b e t w e e n
t h e d e p o s i t o r a n d h i s b a n k , t h e r e is n o c o n t r o v e r s y h e r e .
W h e n such
c h e c k is s e n t to t h i s S t a t e it h a s b e e n n o t u n u s u a l h e r e t o f o r e , f o r t h e
b a n k h e r e to m a k e i t s r e m i t t a n c e b y e x c h a n g e o n N e w Y o r k a n d to c h a r g e
a f e e f o r t h e s e r v i c e b u t s i n c e t h e a m e n d m e n t to S e c . 1 3 o f t h e F e d e r a l
R e s e r v e B a n k A c t o f 2 1 J u n e 1 9 1 7 , if s u c h c h e c k f r o m N e w Y o r k is r e m i t t e d
t h r o u g h the F e d e r a l Be serve B a n k no c h a r g e c a n be m a d e f o r e x c h a n g e in
r e m i t t i n g t h e p r o c e e d s a n d if t h e b a n k h e r e s h o u l d r e m i t a n y t h i n g l e s s
t h a n t h e f a c e of the c h e c k , $ 1 0 0 0 , t o the F e d e r a l R e s e r v e B a n k , t h e
F e d e r a l R e s e r v e B a n k i n o b s e r v a n c e o f the p r o v i s i o n s o f t h e a b o v e a m e n d m e n t to S e c , 1 3 w i l l r e f u s e to a c c e p t it a s p a y m e n t a n d n o t i f y i t s
c o r r e s p o n d e n t in N e w Y o r k w h y the c h e c k has b e e n p r o t e s t e d for non-payment
T h e p l a i n t i f f s c o m p l a i n t h a t t h e r e s u l t is t h a t a l l c h e c k s w i l l b e s e n t
f o r c o l l e c t i o n t h r o u g h t h e F e d e r a l R e s e r v e B a n k s s y s t e m b u t t h a t is a n
e c o n o m i c r e s u l t w i t h which this court h a s n o t h i n g to d o .
This m a y or
m a y not h a v e b e e n the intention o f Congress in m a k i n g the amendment but
t h e F e d e r a l R e s e r v e B a n k A c t h a s b e e n h e l d v a l i d a n d the a m e n d m e n t o f
1 9 1 7 w a s a v a l i d r e g u l a t i o n o v e r the c o r p o r a t i o n c r e a t e d b y it vvhich
C o n g r e s s h a d the p o w e r to make. C o n c e d i n g that C o n g r e s s c a n n o t r e q u i r e the
b a n k h e r e to r e m i t w i t h o u t c h a r g e f o r i t s t r o u b l e ,
Congress by forbidding
the charge p r e v e n t s the R e s e r v e B a n k f r o m a l l o w i n g such c h a r g e (and the
t o t a l o f s u c h c h a r g e s if m a d e t h r o u g h o u t t h e C o u n t r y w o u l d a m o u n t t o
$ 1 3 5 , 0 0 0 , 0 0 0 a n n u a l l y ) and the R e s e r v e B a n k h a s n o a l t e r n a t i v e e x c e p t to
d e m a n d p a y m e n t o f t h e f a c e a m o u n t o v e r t h e c o u n t e r in l e g a l t e n d e r f r o m
w h i c h n o s t a t e c a n r e l e a s e the p a y e e b a n k w i t h o u t v i o l a t i o n of t h e U . S.
-11-
X-3^22a
C o n s t i t u t i o n , a n d o f i t s o b l i g a t i o n to t h e d r a w e r a n d t h e d e s t r u c t i o n
o f its b u s i n e s s b y t h e p r o t e s t s o f t h e c h e c k s o f i ^ s c u s t o m e r s .
T h e s t a t u t e o f N. C.,
C h a p t e r 20, I921, w a s i n t e n d e d for the
b e n e f i t o f t h e S t a t e b a n k s in t h i s S t a t e , "by a u t h o r i z i n g t h e m t o
continue to charge exchange for remitting collection of checks presented to them for payment, b y sending their own checks for less than
the f a c e a m o u n t of t h e c h e c k sent h e r e for c o l l e c t i o n , b u t h o w e v e r d e s i r a b l e t h a t p o l i c y m a y b e , it is c l e a r l y i n c o n f l i c t w i t h t h e v a l i d c o n s t i t u t i o n a l p r o v i s i o n of t h e F e d e r a l s t a t u t e .
No Act of this State can
authorize the drawee bank to pay less than the face amount of the check
d r a w n u p o n it b y its d e p o s i t o r o r t o r e m i t i t s c h e c k i n p a y m e n t o r p a y
it o t h e r w i s e t h a n i n l e g a l t e n d e r m o n e y .
N o r c a n it r e q u i r e t h a t t h e
Federal Reserve B a n k shall pay a fee or that the b a n k h e r e may remit less
than the f a c e v a l u e of the check w h e n the F e d e r a l statute forbids s u c h
charge.
It is true t h a t t h e F e d e r a l R e s e r v e B a n k a s h o l d e r o f t h e c h e c k
h a s n o c o n t r a c t r i g h t s w i t h t h e d r a w e e b a n k u n t i l t h e c h e c k is p r e s e n t e d
b u t a s h o l d e r it c a n r e q u i r e p a y m e n t o f t h e f a c e a m o u n t o n t h e c h e c k i n
l e g a l t e n d e r a n d u n d e r t h e A c t o f C o n g r e s s it c a n n o t p a y a d e d u c t i o n
f r o m t h a t f a c e v a l u e b y a c c e p t i n g a r e m i t t a n c e to t h e H e s e r v e B a n k o f
a lesser amount,
T h e R e s e r v e B a n k a l w a y s e n c l o s e s w i t h t h e c h e c k sent
to t h e p a y e e b a n k a s t a m p e d a n d a d d r e s s e d e n v e l o p e f o r t h e c h e c k t o b e
remitted in p a y m e n t , w h i c h must b e for t h e f a c e amount of the c h e c k sent.
The Federal statute, being a regulation of the Federal Corporation
by Congress, the Act of t h i s State a u t h o r i z i n g the p a y e e b a n k here to
e x a c t e x c h a n g e is i n d i r e c t c o n f l i c t w i t h t h e d u t y i m p o s e d u p o n t h e F e d eral R e s e r v e B a n k b y the Act of Congress a n d the R e s e r v e B a n k acts w i t h i n
-12-
X-3U22a
its d u t y t o o b s e r v e t h e p r o v i s i o n of t h e F e d e r a l A c t b y r e f u s i n g to
r e c e i v e a c h e c k f o r l e s s t h a n t h e f a c e a m o u n t o f t h e c h e c k s e n t b y it
for collection.
I t is t r u e it c a n n o t e n f o r c e p a y m e n t o f t h e f a c e
a m o u n t e x c e p t b y p e r s o n a l p r e s e n t a t i o n of t h e c h e c k a t t h e c o u n t e r o f
t h e p a y e e b a n k b u t it h a s a r i g h t to r e f u s e a c h e c k s e n t t o it b y the
p a y e e b a n k f o r l e s s t h a n the f u l l f a c e a m o u n t a n d to p r o t e s t the c h e c k
it h a s s e n t h e r e f o r c o l l e c t i o n f o r n o n - p a y m e n t » T h e m a t t e r t h e n
b e c o m e s o n e b e t w e e n t h e d r a w e r o f t h e c h e c k a n d t h e p a y e e ? >ank w h o
r e f u s e s to p a y i t .
The U . S. C o n s t i t u t i o n , Art- V I , (Sec-2) p r o v i d e s that the C o n ?
s £ i t u t i o n of t h e U . S . a n d the l a w s m a d e in p u r s u a n c e t h e r e o f , " s h a l l
b e t h e s u p r e m e l a w o f t h e l a n d ; a n d the j u d g e s i n e v e r y S t a t e s h a l l b e
b o u n d t h e r e b y , a n y t h i n g i n t h e C o n s t i t u t i o n or l a w s of a n y S t a t e to t h e
contrary notwithstanding".
I n the m a t t e r b e f o r e u s the A c t of C o n g r e s s
w h i c h p r o v i d e s that no e x c h a n g e shall be a l l o w e d b y the R e s e r v e B a n k
f o r r e m i t t i n g f o r t h e c o l l e c t i o n o f a n y c h e c k b y a n y b a n k is i n d i r e c t
c o n f l i c t w i t h t h e s t a t u t e o f t h i s S t a t e a u t h o r i z i n g the p a y e e b a n k t o
r e m i t a l e s s e r a m o u n t t h a n t h e f a c e a m o u n t o f a n y c h e c k p a i d b y it if
presented b y the Federal Reserve Bank.
t h e F e d e r a l l a w is s u p r e m e .
The injunction, therefore, was improvidently
g r a n t e d a n d the j u d g m e n t m a s t be
In this conflict of authority,
REVERSED.
FEDERAL RESERVE BOARD
WASHINGTON
X-3I+23
May 31, 1922.
SUBJECT:
Senate Bill 2653.
Dear Sir:
'
F b r y o u r i n f o r m a t i o n t h e r e is e n c l o s e d h e r e w i t h
g, c o p y o f a l e t t e r a d d r e s s e d * b y t h e B o a r d , t o t h e C h a i r m a n
of the Banking and Currency Committee of the Senate expressing
the Board's views w i t h respect to Senate Bill 2653*
o f t h e t e x t o f t h e b i l l is a l s o e n c l o s e d h e r e w i t h .
Very truly yours,
G o v e r n o r .
(Enclosures)
TO ALL FEDERAL RESERVE AGENTS.
A copy
X-3423a
COPY
M a y 27, 1 9 2 2 .
Hon. George P. McLean, Chairman,
Banking and Currency Committee,
United States Senate,
Washington, D. C.
My dear Mr. Chairman:
R e c e i p t is a c k n o w l e d g e d o f y o u r l e t t e r o f M a y 1 3 r e q u e s t i n g
the views of the Federal Reserve B o a r d as to Senate B i l l 26^3, w h i c h
w o u l d a m e n d S e c t i o n 5 2 0 1 R e v i s e d S t a t u t e s so a s t o a u t h o r i z e n a t i o n a l
b a n k i n g a s s o c i a t i o n s to invest in the s t o c k of safe d e p o s i t companies,
U n d e r e x i s t i n g l a w n a t i o n a l b a n k s a r e p e r m i t t e d to r e c e i v e
v a l u a b l e s o n d e p o s i t f o r s a f e k e e p i n g a n d to r e n t s a f e d e p o s i t b o x e s ;
b u t it a p p e a r s t h a t s u c h b u s i n e s s s o m e t i m e s r e s u l t s i n l o s s to t h e
b a n k s a n d t h a t t h e p u r p o s e o f t h i s b i l l is to e n a b l e t h e m to l i m i t
or segregate such losses by forming separate corporations for the
purpose of carrying on this b u s i n e s s .
The Federal Reserve Board approves of the p u r p o s e of the
b i l l to p e r m i t n a t i o n a l b a n k s to o r g a n i z e s e p a r a t e c o r p o r a t i o n s t o
carry on their safe deposit business; but the B o a r d feels that the
b i l l a s d r a w n is a m b i g u o u s a n d is s u s c e p t i b l e o f a c o n s t r u c t i o n w h i c h
w o u l d p e r m i t n a t i o n a l b a n k s to h o l d s t o c k i n c o r p o r a t i o n s e n g a g e d i n
m a n y o t h e r a c t i v i t i e s i n a d d i t i o n to t h e b u s i n e s s o f r e c e i v i n g v a l u a b l e s
o n deposit for safekeeping and renting vaults, safes, and safe deposit
boxes.
It a l s o c o n t a i n s s o m e p r o v i s i o n s w h i c h m a k e it u n n e c e s s a r i l y
complicated and confusing.
T h u s , it c o n t a i n s a p r o v i s i o n t h a t n o
n a t i o n a l b a n k shall p u r c h a s e or h o l d shares of s t o c k of a n y c o r p o r a tion except such a s are a u t h o r i z e d b y the F e d e r a l R e s e r v e Act, w h i c h
is m e r e l y d e c l a r a t o r y o f e x i s t i n g l a w , a n d a p r o v i s i o n r e q u i r i n g
shares of stock of other corporations a c q u i r e d by n a t i o n a l banks in
s a t i s f a c t i o n of debts p r e v i o u s l y c o n t r a c t e d to be d i s p o s e d o f w i t h i n
a c e r t a i n t i m e , w h i c h a p p a r e n t l y h a s n o r e l a t i o n to t h e h o l d i n g o f
stock in safe deposit companies.
If, a s it is a s s u m e d , t h e s o l e p u r p o s e o f t h e b i l l is t o
e n a b l e n a t i o n a l b a n k s to p u r c h a s e a n d h o l d s t o c k i n s a f e d e p o s i t
c o m p a n i e s , t h e B o a r d f e e l s t h a t it w o u l d b e p r e f e r a b l e t o e n a c t a
simpler f o r m of b i l l h a v i n g no other effect t h a n that.
It is
suggested, t h e r e f o r e , that the last p a r a g r a p h of t h e b i l l b e
stricken out and that the following be substituted in l i e u thereof:
"Any national banking association nay purchase
and hold the stock of any corporation organized a n d
existing u n d e r the laws of the State in w h i c h such
a s s o c i a t i o n is l o c a t e d , w h i c h is d o i n g b u s i n e s s o n
X-3423a:
the premises on which the principal business of such
a s s o c i a t i o n is c o n d u c t e d , a n d w h i c h is e x c l u s i v e l y
engaged in the business of receiving v a l u a b l e s on dep o s i t for safekeeping a n d letting vaults, safes, a n d
safe deposit boxes; Provided, that the p u r c h a s i n g a n d
h o l d i n g o f s u c h s t o c k is f i r s t d u l y a u t h o r i z e d b y r e s o l u t i o n of the b o a r d of directors of such a s s o c i a t i o n
a n d b y t h e w r i t t e n a p p r o v a l of t h e C o m p t r o l l e r o f t h e
Currency, stating the number a n d amount of the shares
w h i c h the a s s o c i a t i o n m a y p u r c h a s e a n d h o l d ; Provided,
further, that the Comptroller of t h e Currency m a y r e q u i r e any a s s o c i a t i o n to dispose of p a r t or a l l of a n y
s u c h s t o c k w i t h i n a s p e c i f i e d time, not less t h a n six
m o n t h s a f t e r r e c e i p t of w r i t t e n n o t i c e f r o m h i m , if
i n h i s j u d g m e n t s u c h a c t i o n is n e c e s s a r y f o r t h e p r o t e c t i o n of s u c h a s s o c i a t i o n o r i t s s t o c k h o l d e r s or d e positors".
This provision follows as closely a s practicable the
c o r r e s p o n d i n g p r o v i s i o n of S e c t i o n 1 0 6 of the N e w Y o r k B a n k i n g
Law w h i c h authorizes banks to purchase a n d h o l d s t o c k of any
s a f e d e p o s i t c o m p a n y o r g a n i z e d a n d e x i s t i n g u n d e r t h e lav/a o f
It w o u l d b e m o r e l o g i c a l t o i n s e r t
the State of N e w York,
this p r o v i s i o n in S e c t i o n 5 1 3 ^ of the R e v i s e d S t a t u t e s , w h i c h
d e f i n e s t h e c o r p o r a t e p o w e r s o f n a t i o n a l b a n k s ; but it p r o b a b l y
w o u l d b e e a s i e r t o s u b s t i t u t e it f o r t h e l a s t p a r a g r a p h o f
S e n a t e B i l l 2 6 5 3 , s i n c e t h a t b i l l is a l r e a d y b e f o r e t h e C o m mittee.
Yours very truly,
(Signed)
P. G. Harding.
G o v e r n o r .
COPY
X-3%2}b
6 7 t h Congress,
1st S e s s i o n ,
S. 2653•
IN THE SENATE OF THE UNITED STATES.
October 2 0 (calendar day, N O V E M B E R l), 1921.
Mr„ W a d s w o r t h introduced the following bill; w h i c h w a s read twice and
r e f e r r e d to t h e C o m m i t t e e o n B a n k i n g and C u r r e n c y .
A BILL
To a m e n d s e c t i o n 5201 of the R e v i s e d Statutes to a u t h o r i z e n a t i o n a l
b a n k i n g a s s o c i a t i o n s to i n v e s t i n t h e s t o c k o f s a f e - d e p o s i t c o m p a n i e s ,
and for other purposes*
B e it e n a c t e d b y t h e S e n a t e a n d H o u s e o r R e p r e s e n t a t i v e s o f
the United States of A m e r i c a in Congress assembled, That the
f o l l o w i n g p a r a g r a p h b e a d d e d to s e c t i o n 5 2 0 1 o f t h e R e v i s e d S t a t u t e s :
"That no a s s o c i a t i o n shall p u r c h a s e or h o l d shares of s t o c k of
any corporation except such as axe authorized by the F e d e r a l Reserve
Act, or the s t o c k of any safe-deposit company o r g a n i z e d a n d existing
u n d e r t h e l a w s o f t h e S t a t e i n w h i c h t h e a s s o c i a t i o n is l o c a t e d a n d
d o i n g b u s i n e s s o n the p r e m i s e s o w n e d or l e a s e d by the a s s o c i a t i o n ,
u n l e s s the p u r c h a s e of such shares of s t o c k in a n y s a f e - d e p o s i t company shall b e authorized by resolution of the b o a r d of directors of
the a s s o c i a t i o n and formally a p p r o v e d by the C o m p t r o l l e r of the
C u r r e n c e : Provided, That the shares of stock of other c o r p o r a t i o n s
a c q u i r e d b y a n y a s s o c i a t i o n in s a t i s f a c t i o n of debt p r e v i o u s l y cont r a c t e d s h a l l b e d i s p o s e d of a s s o o n as sale c a n b e e f f e c t e d at a
p r i c e e q u a l to the amount of the debt for w h i c h the s h a r e s w e r e a c q u i r e d , b u t i n n o e v e n t s h a l l t h e s h a r e s so a c q u i r e d b e h e l d l o n g e r
than two y e a r s f r o m the date of acquirement.11
FEDERAL RESERVE BOARD
WASHINGTON
X-3424
( S u p e r s e d i n g 627)
S i r :
Y o u a r e h e r e b y d i r e c t e d to p r o c e e d t o
o n "business i n c o n n e c t i o n w i t h t h i s B o a r d , u p o n c o m p l e t i o n
of which, unless otherwise directed, y o u will return to
W a s h i n g t o n , D . C.
While absent from Washington upon the discharge of
the above described duty your actual necessary traveling exp e n s e s , a n d actual expenses for s u b s i s t e n c e not to exceed
$5-00 per diem, will be paid from funds under the control of
this Board.
In connection w i t h the above travel y o u will b e
guided by Treasury Department Circular No.
l a t i o n s 11.
Respectfully,
127-1 "Travel Regu-
FEDERAL RESERVE BOARD
WASHINGTON
X-3*l25
J u n e 1, 1 9 2 2 .
SUBJECT:
New Clayton Act Forms.
Dear Sir:
T h e r e is b e i n g f o r w a r d e d to y o u u n d e r s e p a r a t e c o v e r , a
s u p p l y o f F o r m 9 4 ( e ) , w h i c h is a n e w f o r m o f s t a t e m e n t o f a p r i v a t e
b a n k e r o r b a n k i n g f i r m to b e s u b m i t t e d i n c o n n e c t i o n w i t h a p p l i c a t i o n s b y p r i v a t e b a n k e r s f o r t h e p e r m i s s i o n o f t h e B o a r d to s e r v e
at the s a m e . t i m e as director, officer, or e m p l o y e e of a m e m b e r b a n k
and not m o r e than one other bank, banking a s s o c i a t i o n or trust comp a n y . T h i s f o r m is m o r e a p p r o p r i a t e f o r u s e b y p r i v a t e b a n k e r s i n
m a k i n g such statements than F o r m 9 4 ( a ) which formerly w a s u s e d for
that p u r p o s e .
T h e r e are a l s o b e i n g f o r w a r d e d to y o u u n d e r separate cover
supplies of the following forms w h i c h have b e e n r e v i s e d w i t h a v i e w
of o b t a i n i n g i n f o r m a t i o n w h i c h e x p e r i e n c e h a s p r o v e d to b e m a t e r i a l
in c o n s i d e r i n g a p p l i c a t i o n s for p e r m i s s i o n to s e r v e two or m o r e b a n k s
u n d e r the K e r n A m e n d m e n t to the C l a y t o n Act a n d w h i c h f r e q u e n t l y w a s
not furnished on the old form:
Form 94.
Application of director, officer or employee of a member b a n k for permission of
the F e d e r a l R e s e r v e B o a r d to s e r v e a t the
same time as director, officer or employee of
not more than two other b a n k i n g institutions
u n d e r t h e K e r n A m e n d m e n t to t h e C l a y t o n A c t ;
F o r m 9 4 ( a ) S t a t e m e n t to b e s u b m i t t e d i n c o n n e c t i o n
with such applications by each hanking institution involved;
F o r m 9 4 ( b ) S t a t e m e n t to b e s u b m i t t e d b y F e d e r a l E e s e r v e
Agent w i t h reference to such applications.
These revised forms w i l l immediately supersede the corresponding old forms.
Yours very truly,
G o v e r n o r .
To all Federal Reserve Agents.
FEDERAL RESERVE BCWtD
. .
S E T T L E M E N T • F U N D.
GOLD
Summary of transections for period ending June 1, 1922.
Gold
Balance last
Federal
statement
Eesarve
Withdrawals
May 25, 1922,
Bank of
Boston
$ 23,587,108-97
140,346,203.86
New York
Philadelphia
56,393,256.49
40,974,091-71
Cleveland
Richmond
30,075,874.45
Atlanta
26,007,323.76
Chicago
73,511,454.42
St. Louis
5,041,043.17
Minneapolis
20,5U7.313.97
Kansas City
25,376,173.12
Dallas
12,627,231.9$
San Francisco
33,527,138.68
Total
1^88,015,014.55
Total
1,168,780.00
25,000.00
2,000,400.00
2,010.04
692,730.00
1,188,765.77
982,360.46
856,455.00
' 878,811.00
2,001,700.00
556,050.00
320,650.00
640,963.43
637,150.00
1.055.700.00
878,811.00
556,050.00
320,650.00
640,963.43
637,150.00
3,555,700.00
500.00
f
9,560,915.66 |$
1,676,044.97
Total
Debits
84,289 , 4 5 9 . 5 3
360,903 , 4 2 3 . 5 1
111,833 , 0 1 9 . 7 9
8 4 , 7 1 6 ,972.03
83,208,472.48
38,799 ,505.87
1 7 8 , 4 8 7 ,4149.05
91,309 ,418.96
2 8 , 8 1 4 ,094.63
65,523 ,994.41
34,777 ,974.99
4 7 , 3 5 7 ,256.12
I$32,770,495.61
1$L,210,021,041.37
$
Net
Debits
002r200.00
8,031,810^04 |$ 14,060,915.66
26,352,397.80
3,410,918.01
1,331,134.83
$
Total
Credits
86,075,366.89
334,551,025.71
117,030,330.35
91,875,845.53
92,034,228.51
42,439,241.11
175,076,531*04
89,978,284.13
29,685,174.74
69,954,931.50
35,638,870,71
45,681,211.15
|$ 1 , 2 1 0 , 0 2 1 , 0 4 1 . 3 7
Washington, D. C.
June 2, 1922,
(CONFIDENTIAL)
Aggregate
Aggregate
deposits and
withdrawals
transfers from
and transfers
Agent's fund
to Agent's fund
$ 1,000i 000.00
$
582,500.00
25,000.00
1,168,780.00
2,000,400.00
2,692,730.00
2,010.04
1,188,765.77
982,360.46
856,455,00
Settlements from May 26, 1922 to June 1, 1922
inclusive*
Federal
Reserve
Bank of
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kasas City
Dallas
San Francisco
.Deposits
1,000,000.00
582,500.00
|$
Gold
2-)426
'$
Net
Credits
1,785,907.36
5,197,310.56
7,158,873.50
8,825,756.03
3,639,735.24
871,080.11
4,430,937.09
860,895.72
j$
32,770,4%.6l
T R A N S F E R S
Debits
I
Credits
2,001,700.00
8,000,000.00
500.00
4.698.700.00
!$ 17,728,310.04
Balance in
fund at close
of business
June 1, 1922.
Summary of changes in ownership of gold by banks through
transfers and settlements.
$
$ 25,790,516.33
112,850,026.06
60,898,237.05
46,947,009-48
37,919,270.02
28,790,604.00
71,223,425.41
11,153,858.34
21,098,244.08
29,166,146.78
12,850,977.67
32,994.093-71
(#91,682,408.93
1$
j$
Decrease
26,352,397.80
3,410,918.01
1,331,134.83
1,676,044.97
.
j$ > 2 , 7 7 0 , 4 9 5 . 6 1
Increase
$ 1,785,907.3^"
5,197,310.56
7,158,573.50
8,825,756.03
3»639,755^24
871,080.11
4,430,937.09
860,895.72^|$32,770,495,
F E D E R A L
R E S E R V E
V SiLH
.
LCC
ounnary ox vicuIScLUUAUlia 1U1 pez X >VL t I L X K UUIiy X, J ^ . •
Gold *
Balance last
Gold
Federal
statement
Reserve
Withdrawals
Deposits
May 25, 1922.
Agent at
Boston
$
$
118,000,000
A G E N T S '
New York
1401,000,000
-
$
—
Philadelphia
144,389,260
5,000,000
-
Cleveland
350,000,000
-
-
2,000,000
-
•»
-
2,000,000
5,000,000
141,389,260
-
150,000,000
-
-
50,795,000
500,000
90,000,000
3,000,000
10,000,000
342,644,500
-
10,000,000
1,500,000
46,300,000
-
-
-
-
16,000,000
-
-
-
-
-
45,360,000
-
—
-
-
-
10,000,000
Atlanta
91,000,000
1,500,000
500,000
-
Chicago
335,644,500
3,000,000
10,000,000
-
St. Louis
54,800,000
2,000,000
1,500,000
Minneapolis
16,000,000
-
-
Kansas City-
45,36o,ooo
-
Dallas
10,000,000
-
8,000,000
1.696.500
183.243.000
401,000,000
-
-
118,000,000
1,500,000
-
$ 14,500,000
$
-
-
3,000,000
$ 1,603,231,760
Deposits
Balance at
close of
business
June 1. 1922.
3,000,000
53,795,000
Total
$
IPotal
-
Richmond
San Francisco
X-}426a
W a s h i n g t o n , B.C.
V W . i XJClJJA /
i N• O J i N L L U
:
Total
Deposits
through
Withdrawals
transfers
from bank
Withdrawals
for
transfers
t© bank
-
F U N D
$
12,000,000
$
9,696,500
2.500.000
$
4,500,000
$ 24,196,500
2.500.000
1,696,500
$
184,046,500
16,500,000
$1,595,535,260
O
$
X-3426
RATIO OF DISCOUNTED BILLS HELD B Y FEDERAL RESERVE BABES TO THEIR DEPOSIT LIABILITIES
TOGETHER WITH THEIR RESERVE PERCENTAGES A S OF M A Y 24, 1922.
123,595
Ratio of discounted bills to
member bank reserve deposits
(Percent)
19.8
8.2
750,841
8.5
85.2
50,128
44.4
105,881
47.3
76.8
144,230
50,110
34.7
138,061
36,3
69.5
Richmond
61,349
52,302
84.6
54,791
95.5
69.4
Atlanta
42,965
33,237
67.9
46,500
71.5
82.3
Chicago
261,597
67,393
25.8
252,284
26.7
76.0
St. Louis
74,230
21,049
28.4
69,747
30.2
72.0
Minneapolis
42,952
27,037
62.9
39,899
67.8
68.0
Kansas City
77,314
23,754
30.7
74,806
31.8
62.7
Dallas
46,695
31,408
67.3
44,902
69.9
64.3
139,321
42,637
30.5
121,435
35.1
73.4
1,917,176
487,240
25,4
26.7
77*5
Total
deposits
Discounted
bills
Boston
127,614
24, 4l6
Ratio of discounted bills
to total
deposits
(Percent)
19.1
New York
778,940
63,769
Philadelphia
112,969
Cleveland
Federal
Reserve
Bank
San Francisco
TOTAL
Member
banks1
reserve
deposits
1,822,742
Reserve
percent,
76.0
FEDERAL RESERVE BOARD
WASHINGTON
X-3U29
J u n e 3, 1 9 2 2 .
SUBJECT:
Business Reporting Conference.
Dear Sir:
In confirmation of m y telegram of this date, y o u are
a d v i s e d that the B o a r d has called a conference, to b e h e l d
i n W a s h i n g t o n o n J u n e 13th t o 1 5 t h , t o c o n s i d e r m e t h o d s o f
promoting greater economy and efficiency in the statistical
w o r k and business reporting of the Federal Reserve B a n k s .
Y o u a r e r e q u e s t e d to h a v e y o u r b a n k r e p r e s e n t e d a t t h i s
c o n f e r e n c e b y some one d i r e c t l y in charge of or a f f i l i a t e d
w i t h the p r e p a r a t i o n of y o u r monthly reports.
A c o p y o f t h e p r o g r a m f o r t h i s c o n f e r e n c e is e n closed h e r e w i t h for your information and that of y o u r representative.
Very truly yours,
G o v e r n o r .
(Enclosure)
T O A G E B T S O P A L L P. R . B A N K S .
r".yr
PROGRAM
x-342ga
BUSINESS REPORTING CONFERENCE
W A S H I N G T O N , J U N E 13-15, 1922x
I.
T
Joint .Session with F e d e r a l R e s e r v e B o a r d
1.
2.
Progress since last conference.
3.
II-
Opening address; - B o a r d ' s views a s to problems of reporting service,
Present position of district reports; interest of the banking and
business community in t h e service.
Results of special surveys
made by Federal Reserve B a n k s .
Scope of Business Conditions Work
4.
5.
III.
H. P. Willis
rr
ays and means of improving the business reporting service.
a. Interchange of data between districts
b, Development of data for specific industries. Relation to
other reporting services* and furnishing data to them,
Centralization or division of special studies into given topics
in order to avoid duplication.
Organization of the Service.
6.
Organization of the statistical and reporting work within the
Federal Reserve Banks. .
7»
Relation of the library service to the statistical service.
Question of centralizing the reading and cataloging of
current books, periodicals, etc. in order to avoid possible duplication by having the same work done in the
several banks.
8.
Information service in each bank.
departments of the bank.
9.
Distribution of the monthly business reviews, including -
Scope and relation to
other
a. Somber issued
b. Size desired
c. Charge to be made, if any, for the report
10.
17.
Cost of the service.
Editing and Supervision.
11.
Central editing of business conditions reviews. How far needed and
how long to be continued.
X-3U29a
- 2 ~
Correlation of the Federal Reserve Board's service with that
of the individual Federal Reserve Banks.
a* Dates of publication,both of Bulletin and of Board,s
indexes.
b. Service rendered by the present telegraphic summary
of business conditions.
Federal Reserve Bulletin.
a. Sections in Federal Reserve Bulletin which banks
and their members have found particularly useful.
Furnishing of Board's figures to the banks.
b. Adequacy of the present foreign service.
FEDERAL RESERVE BOARD
WASHINGTON
X-3U3O
J u n e 6,
SUBJECT:
1921 Annual Report,
Dear Sir:
T h e r e h a s b e e n f o r w a r d e d to y o u today u n d e r
separata cover a b o u n d copy of the A n i m a l Report of the
Federal Reserve Board covering operations during the
calendar year 1921.
Very truly yours,
Walter L. Eddy,
Assistant Secretary.
TO EACH GOVERNOR, F. R- AGENT,
AKD BRANCH MANAGER.
1. Ratio of Federal Reserve notes in circulation to Members' Reserve Deposits (Percent),
and
2. Total Gold Holdings of each Federal Reserve Bank, 1917 to 1922.
X-3431
(Amounts in thousands of dollars)
TOTAL
30 4 9 . 6
29 U 9 . 2
28
28
61.6
85.8
29 96.9
28 1 1 0 . 6
27 1 5 3 . 0
27 1 6 9 . 2
28
27
26 1 5 3 . 4
26 1 7 1 . 1
26 1 6 3 . 2
I
170.1
182.2
30 191.2
25 175-0
29 1 6 0 . 5
28 1 5 0 . 2
28 146.7
29 1 2 7 . 7
31 120.2
938,046
1,294,512
l,408,470
1,671,133
BOSTON
29.5
32.4
48.9
91.2
1,815,704
1,949,021
2,020,813
2,090,274
136.0
160.9
2,142,305
2,147,734
2,117,854
2,078,432
165.5
165.2
191.3
1,934,755
1,969,375
1,989,835
2,059,333
229.1
101.7
168.4
223.4
237.9
52,170
103,944
72,266
80,449
115,560
130,084
NEW YORK
61.3
46.9
60.5
59.8
73«4
135,221 105.0
114,000 107.9
116,574
108.7
108,533 101.0
142,086 1 0 7 . 8
152,865 116.8
165,752 H 3 . 5
214,304 115.3
250.6
249.7
2 0 4 , 2 5 8 120.2
2 0 6 , 8 3 6 124.7
2 , 2 1 0 , 7 6 5 244.3
2 1 2 , 8 5 8 122.1
2,461,931 239.2
2 , 7 2 5 , 9 6 6 219.7
2 , 8 6 9 , 6 0 0 187.1
2,975,355 l40»2
3,007,621 127.3
401,420 49.4 6 0 , 9 3 0
484,082 73.2 98,995
567,235 71.4 1 0 0 , 3 6 5
622,871 1 1 1 . 0 119,544
643,470
809,189
591,631
590,749
735,392
732,932
640,130
570,438
I36.6
CLEVELAND
24.8
36.2
50.9
94.7
145,954 123.1
RICHMOND
ATLANTA
23,436
63,516
112,369
107,962
61.5
50.6
74.5
126,664 1 3 3 . 1
32,439 1 0 3 . 1
41,347 80.8
51,413 119.0
62,227 171.6
40,557
71,642
1 6 3 , 3 3 9 136.4
53,988 1 4 5 . 7
64,531
38,020 278.4
67,303
169.8 144,735 146*9 188,793 178.0 55,965
31,330
203.8 174,037 207.4
251.2 142,658 222,4
253,974 2 1 1 . 7
197,505 2 6 2 . 8
156.9
249.3
82,397
62,256
63,549
218.6 1 2 5 , 5 6 9
203.3 124,622
193.4 129,732
2 5 1 . 6 138,341
182.4
2 2 6 , 9 1 1 228.1 74,696 2 5 7 . 4
I83,462 214.3 67,215 257.0
214,671 I 9 9 . 7 73,153 285.2
181,253 243.4 81,543 2 5 6 . 3
67,055
67,325
504,689 242.6 140,539
155,396
.543,820 250.7 177,3U
466,267 2 6 3 * 4 2 0 1 , 2 3 2
229.5
231.6
513,612 240.4
588,293
240,894 101.1
871,941
246,898 94.6 1,028,479
2 3 4 , 1 8 0 96.9 1,069,499
172,896
137,176
: PHILADELPHIA
237.5
229.4
215.5
173.3
192.8
213.8
210,654 171.2
211.6 210,408 180.4
91.4 1,119,313 184.5
86.8 1,150,504 175.7
1 9 4 , 0 1 5 211.5 75,990 261.7
94,816
75,445
77,037
84,092
303,410
251,363
241,747
247,406
328.8
347.2
299.9
85,622
73,352 234.6
99,681 253.9
116,016
131,431
221,239 215.1 70,593 264.1
240.0 230,022 2 4 5 . 5 78,735 2 9 9 . 3
240.9 285,200 273.6 88,164 3 6 2 . 3
184,957 2 0 1 . 9
181,390 1 9 4 . 1
218,529 145.2
2 2 0 , 9 0 3 141.0
65,989
110,706
263.7
232.4
223.8
207.9
258,892 171.2
2 3 7 , 1 2 2 157.2
86,837
74,604
65,751
64,oi4
272.8
79,285
63,463
70,348
r
1. Ratio at Federal Reserve notes in circulation to Members' Reserve Deposits (Percent),
and
2- Total Gold Holdings of each Federal Reserve Bank, 1917 to 1922.
(Amounts in thousands of dollars)
DATE
CHICAGO
ST. LOUIS
1
* QOA
1
June
Sept.
Deo.
m
Mar.
Jane
Sept.
Deo.
1922
Mar.
May
30
29
28
28
21.4
48.4
60.8
104.9
29
28
27
27
92,276
2
1
:
2
KANSAS CITY
:
1
:
DALLAS
2
1
:
SAN FRANCISCO
2
1
Hi
:
2
191,414
218,924
53.2
46.8
61.1
122.0
31,784
43,792
42,770
58,276
69.7
81.3
79.0
123.O
39,942
53,168
51,294
69,932
47.0
47.4
40.0
80.2
56,313
57,662
70,475
83,978
90.0
81.7
104.5
104.9
BSS?
42,358
64,557
49.2
107.4
*3,670
65,274
70,361
92,129
113.1
142.0
177.6
197.5
257,381
222,932
310,635
418,172
118.8
136.3
191.8
211.5
77,235
65,499
77,547
98,695
131.9
149.2
169.9
200.8
68,398
44,891
63,494
86,525
91.2
113.2
128.7
165.4
84,395
63,114
87,026
92,600
105.4
90.1
166.1
181.8
41,088
30,600
38,125
34,123
114.1
I85.7
254.1
274.9
99,815
130,963
143,177
159,919
28
27
26
26
174.0
178.7
180.9
200.9
US:
t, .093
,588
O O r*-K
1211
Mar.
June
Sept.
Deo.
121S
Mar.
Jane
Sept.
Dec.
m
Mar,
Jane
Sept.
Deo.
MINNEAPOLIS
72,925
84,856
76,415
94,267
173.0
160.7
ISI.5
I69.7
75,823
127.7
73,305 i 116.0
77,038 , 111.2
51,173
135.2
68,737
71,069
68,429
77,688
133.0
IO7.7
117.7
128.2
38,641
33,573
35,099
56,181
240.7
227.2
220.2
207.9
136,394
146,749
151,927
191,622
26
25
24
30
189.7
210.3
218.9
228.2
314,510
295,252
193.8
191.7
209.9
208.1
71,907
72,272
69,438
82,883
146.1
174.0
181.0
182.5
62,274
48,842
49,107
48,447
114.5
118.1
137.2
150.1
82,670
72,745
72,407
71,961
121.4
161.0
177.1
178.2
61,013
48,917
45,721
43,281
185.9
192.3
211.5
240.3
166,580
180,758
145,219
186,581
25
29
28
28
202.6
192.4
186.8
178.7
a
444,286
187.2
I73.5
169.7
153.7
84,913
73,023
80,595
93,800
158.9
139.5
145.8
143.5
55,84}
41,190
*0,395
55,624
126.7
112.7
113.9
IO3.4
71,938
72,265
68,116
67,817
128.2
108.1
96.6
84.5
40,020
28,594
28,958
31,890
203.3
223.3
204.2
219.6
190,930
199,927
229,766
280,328
29
31
I59.I
145.6
446,084
460.000
120.2
104.1
99,044
122.0
75,629 J 110.5
69,965
65,374
66,3
75.5
77,632
83,960
61.5
59.8
189.5
185.3
283,023
252,288
156,032
443,185
372.355
296,760
294,389
305,144
O
FEDERAL RESERVE BOARD
WASHINGTON
June 8, 1922.
X-3U32
SUBJECT:
Claims for Fiscal Agency Reimbursement»
Dear Sir:
On May 8, 1922 the Board sent to all Federal Reserve Banks its
letter (X-3396) on the subject of reimbursement by the Treasury
Department of fiscal agency expenses incurred by the Federal Reserve
Banks. The Board is in receipt today of a letter from the Under
Secretary of the Treasury, sent by direction of the Secretary, in
which a statement is made that from replies received from several
Federal Reserve Banks there appears to be some misunderstanding as
to the extent of reimbursement and a more explicit explanation is
made. For your information and guidance there is quoted the following from the Treasury's letter to which reference has just been made:
"It is contemplated that beginning July 1, 1922, the Treasury
Department will reimburse the Federal Reserve Banks for all direct
expenses necessarily incurred in the performance of any fiscal
agency functions which do not involve their depositary functions
and which, do not directly involve their accounts with the Treasurer
of the United States. Such reimbursement will include all direct
expenses such as personal services, supplies, printing, stationery,
etc-, but will not include any indirect expenses such as salaries
of general officers or expenses of operation of buildings owned and
occupied by a Federal Reserve Bank.
"In other words, fiscal agency expenses for which reimbursement may be claimed embrace all additional expenses incurred by
Federal Reserve Banks on account of the issue, transfer or exchange
of any bonds, notes, certificates or Treasury savings securities
issued by the Treasury Department, but will not include expenses
incident to the paying of Government warrants or checks or interest
coupons or the redemption of matured securities for the account of
the Treasurer of the United States, nor will it include any expenses
arising in connection with the handling-' of depositary accounts, or in
connection with any currency or coin transactions, (except as
provided in the coin or currency regulations)."
2 -
X-.3430
The Board advises all Federal Reserve Banks that their claims
for reimbursement should " e made in strict accordance with the terms
b
of the foregoing quotation.
Very truly yours,
G o v e r n o r .
FEDERAL RESERVE BOARD
WASHINGTON
X-3I+33
June 9 , 1922.
SUBJECT:
Revised Instructions regarding the Distribution of Reimbursable Fiscal Agency Expense.
Dear Sir:
Page 15 of schedule B of the Manual for Distribution
of Expenses issued by the Federal Reserve Board's Committee on
Economy and Efficiency provides for the deduction of the reimbursable expense from the several expense units under the Fiscal
Agency function.
Beginning July 1, 1 9 2 2 , the Treasury Department will again
reimburse Federal Reserve Banks for all expenses in connection with
Fiscal Agency operations except certain items of overhead (Board's
letters X-339& and X-3432). This necessitates some modifications
in the Manual for the Distribution of Expenses and Report Form,
Schedule E.
At the time the original manual was approved the only
expenses for which reimbursement ":as allowed were in connection with
original issues and, therefore, appeared in connection with the fiscal Agency function only. Under the new ruling, however, reimbursement will be made for a proportionate cost of a number of the service
departments, such as files, protection, stenographic, etc.
The
Committee is chiefly interested in the gross operating costs of the
several functions and expense units and it will not be necessary to
make any deduction in connection with the reimbursable expenses,even
under the Fiscal Agency function.
The reason for showing deductions originally was to make
schedule E balance with form 96. As you will see now by reference
to the recapitulation sheet of schedule E, this proof is arrived
at~T>y malting the total of schedule E, which includes all expenses,
balance with the total of forms 96, 97, and 97a.
You will find enclosed herewith several revised copies
of page 15 of schedule B of the manual, which you will please have
substituted for the original page. You will note the change in the
introductory paragraph.
http://fraser.stlouisfed.org/
r
Federal Reserve Bank of St. Louis
Very truly yours,
G o v e r n o r .
B - 15
FISCAL AGENCY
(The expense of operating e a c h separate u n i t of this f u n c t i o n
s h o u l d i n c l u d e all e x p e n s e s , w h e t h e r or n o t r e i m b u r s e d b y the
Treasury. Fiscal Agency expenses other than those shown u n d e r
this f u n c t i o n should be included in their respective e x p e n s e
u n i t s , r e g a r d l e s s o f w h e t h e r o r n o t the b a n k s r e c e i v e r e i m b u r s e m e n t .)
Admini s trat ion
includes salaries of officers and a n y other
e m p l o y e e s assigned to the general a d m i n i s t r a t i o n
•of t h i s f u n c t i o n , a n d o t h e r e x p e n s e s i n c i d e n t a l t h e r e t o .
Original Issues
i n c l u d e s a l l e x p e n s e s i n c i d e n t to t h e o r i g i n a l
i s s u e o f G o v e r n m e n t s e c u r i t i e s e x c l u s i v e of
savings securities.
Redemptions
includes all expenses incident to the r e d e m p t i o n
of G o v e r n m e n t securities- e x c l u s i v e o f s a v i n g s
securities.
Exchanges and Conversions
i n c l u d e s a l l e x p e n s e s i n c i d e n t to t h e f o l l o w i n g
work:
E x c h a n g e of c o u p o n for r e g i s t e r e d ,
E x c h a n g e of registered for c o u p o n ,
E x c h a n g e of temporary for p e r m a n e n t ,
Transfers of registered b o n d s ,
Exchange of denomination,.
Conversions.
r
Accounting
i n c l u d e s a l l e x p e n s e s i n c i d e n t to t h e f o l l o w i n g
work:
General books
Statements
Reports
War Loan Deposit Accounts
i n c l u d e s a l l e x p e n s e s i n c i d e n t to W a r L o a n
D e p o s i t s , m a k i n g of c a l l s and m a i n t e n a n c e of
records. (Does not include custody of collateral)
War Finance Corporation
i n c l u d e s all e x p e n s e s i n c u r r e d in c o n n e c t i o n
with War Finance Corporation work except custody
of securities and c o l l a t e r a l .
Custody of Securities
i n c l u d e s a l l e x p e n s e s i n c i d e n t to the h o l d i n g o f
Government securities for Fiscal Agency work, as
follows:
Unissued securities (stock)
War Loan Deposit collateral
http://fraser.stlouisfed.org/
(X-3433a)
War Finance Corporation collateral.
Federal Reserve Bank of St. Louis
G O L D
a^nwrnnry of transactions for period ending June 8. 1922.
Gold
BsJaace last
Federal
statement
Reserve
Withdrawals
June 1, 1922.
of
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kaafeas City
Dallas
San Francisco
Total
Federal
Reserve
leak of
$ 25,790,516-33
112,850,026.06
60,898,237.05
46,947,009.4s
28,200.00
2,200,000.00
Gold
Deposits
$ 14,000,000.00
2»20£L000.00
3,217,450.00
5,000,000.00
5,055,850.00
430,130.00
1,000,000.00
2,000,000.00
1,700.00
3,000,000.00
118,700.00
176,000.00
3,000.000.00
118,700.00
176,000.00
300.00
2,000,000.00
305,450.00
440.177.50
$
28,200.00
4,000,000.00
55,850.00
430,130.00
6,504,200.00
6,971,957.50
$ 32,506,-200-00
$
Boston
New York
Philadelphia
11,562,411.69
Cleveland
5,326,216.18
Richmond
Atlanta
2,466,559-42
Chicago
522,382.96
St. Loals
Minneapolis
Kansas City
4,953,340-75
Dallas
2,480,447-78
San Francisco , 10.996.644-45
Total
# 63,2)9,804.21
$
Total
Debits
134.291,336-51
406,225,976.45
142,647,754-53
112,620,303.54
94,013,351.84
40,127,599.01
212,607,994.73
105,133,208-98
28,217,488.70
74,202,035.24
34,^06,824.20
• 55.052,072.. 31
$
Total
Credits
108,463,535.53
463,306,229-02
131,085,342.84
107,292,087-36
94,950,51^.61
37,661,039-59
212,085,611.77
107,397,246.83
31,175,639.72
6# ^48,694.49
-#,326,376.42
44.9S3.42t.86
$
T R A N S F E R S
Debits
5,000,000.00
4,000,000.00
6,00a,000.00
300.00
2,000,000.00
25,971,957-50
$ 43,466,700.00
—
57,080,250-57
937,162.77
2,264,039-85
2,958,351.02
( $ 1 , 4 3 9 , 9 4 5 , 9 4 8 . 0 4 111,439,945,948.04 1$ 6 j , 2 ) 9 , 8 0 4 . 2 1
$
Balance in
food at close
of business
June 8 , 1922.
% 13,962,715.35
16^,902,076.63
si,135,825.36
44,401,343.30
34^56,432.79
23,268,194.58
70,272,612.45
15,417,898.19
2,000,000.00
1,000,000.00
1,000,000.00
5,000,000.00 II. 5,000,000.00
ekmasry of dbarig»s in ownarship of gold bjr banks throogi
transfers and t
wttlemsnta.
4
Decrease
25,827,800.98
$
11,562,411.69
5,328,216.18
2,466,559-42
522,382.96
23,937,895-10
26,037,106.03
13.065,079.89
27.919.971.16
I$509,177,151-43
Credits
1,000,000.00
10,464,700.00
Met
Credits
r
|
2,000,000.00
1,700.00
5,000,000.00
305,450.00
6,440,177.50
i,
Se1Itlements from June Z 1922 to June 8, 1<
induilive.
Net
Debits
$ 25,827,600-98
X-3434
Washington,, n.-n.
June 9. 1922:
( CONFIDENT! AL)
Aggregate
Aggregate
withdrawals
deposits and
and transfers
transfers from
to Agent's fund
Agent's fund
$ 14,000,000.00
'
3^17,450.00
37,919,270.02
28,790,604.00
71,223,425,41
11,153,858.34
21,098,244.08
29,166,146.78
12,850,977.b7
) 2 , 0 9 ) 4 1
I $491,688,408.93
raERAI. RESERVE BOARIK s
S E T T L E M E N T # U Jf D
2,953,340.75
1,480,447.78
9,098.644.4s
t* . 59,239,804.21 ( $
Increase
52,080,250.57
1,937,162.7? i
.
—
2,264,039.8$!
2,958,351.02
59,239,9%.%
•
%
F E D E R A L
S u m m a r y o f transactions for period, ending June 8 _1222t
Gold
Gold
Balance last
Federal
statement
Reserve
Deposits
Withdrawals
June 1, 1922.
Agent at
R E S E R V E
AGENTS*
FUND
(CONFIDENTIAL)
Deposits
Total
through
Withdrawals
transfers
from bank
Withdrawals
for
transfers
to hank
X-31+31+a
Washington, D, C»
June 9, 1922.
Balance at
Total
close of
business
Deposits
June 8. 1922*
118,000,000
$
$
Boston
116,000,000
New Yor£
401,000,000
401,000,000
Philadelphia
141,389,260
141,389,260
Cleveland
150,000,000
Richmond
342,644,500
5,000,000
90,000,000
Chicago
St. Louis
6,000,000
96,000,000
5,000,000
2,000,000
10,000,000
i
3,000,000
2,000,000
337,644,500
3,000,000
45,360,000
Dallas
55,795,000
I
16,000,000
Kansas City
5,000,000
5,000,000
5,000,000
1,000,000
46,500,000
Minneapolis
145,000,000
5,000,000
50,795,000
Atlanta
5,000,000
Total
45,360,000
10,000,000
I
7,000,000
3,960,500
1$ 1 , 5 9 5 , 5 3 5 , 2 6 0
1$ 12,000,000
| $ . 1 , 0 0 0 , 0 0 0 | $ 10,960,500
16,000,000
I
184,046,500
San Francisco
47,300,000
10,960,500
6,000,000
179,086,000
1$ 19,000,000, 1$ 22,960,500
| $ 20,000,000
|$ 1,592,574,760
I
6,000,000
Oi
CK
X-3435a
NO.
3157
AT LAW
IN THE DISTRICT COURT OF THE UNITED STATES FOR
THE NORTHERN DISTRICT OF TEXAS, AT DALLAS
Federal Reserve Bank of Dallas,
Plaintiff,
v.
City of Cleburne,
Defendant.
PLAINTIFF'S BRIEF ON THE QUESTION OF JURISDICTION
T h i s s u i t w a s i n s t i t u t e d "by t h e p l a i n t i f f t o r e c o v e r
the contents of certain warrants exceeding the jurisdictional
a m o u n t i s s u e d b y t h e d e f e n d a n t t o t h e o r d e r of d i v e r s a n d
s u n d r y c i t i z e n s o f t h e S t a t e o f T e x a s a n d b y t h e m a s s i g n e d to
the p l a i n t i f f .
The defendant contends that this court is without
jurisdiction of the suit.
It b a s e s that c o n t e n t i o n u p o n the
e x i s t e n c e of t h a t p a r t o f t h e f i r s t p a r a g r a p h o f S e c t i o n 2 U o f
the J u d i c i a l Code w h i c h reads:
" N o d i s t r i c t c o u r t s h a l l h a v e c o g n i z a n c e of a n y s u i t ( e x c e p t
u p o n f o r e i g n b i l l s o f e x c h a n g e ) to r e c o v e r u p o n a n y p r o m i s s o r y n o t e s o r o t h e r chose in a c t i o n in f a v o r of a n y a s s i g n -
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e a , o r o f a n y s u b s e q u e n t h o l d e r if s u c h i n s t r u m e n t b e p a y a b l e to
bearer and b e not made b y any corporation, unless such suit
m i g h t h a v e b e e n p r o s e c u t e d in s u c h c o u r t to r e c o v e r u p o n said
n o t e o r o t h e r c h o s e i n a c t i o n if n o a s s i g n m e n t h a d b e e n m a d e . "
T h e c o n t e n t i o n o f t h e p l a i n t i f f is t h a t t h i s s u i t a r i s e s u n d e r
a l a w of the U n i t e d States and that the p r o v i s i o n above quoted and h e r e i n a f t e r r e f e r r e d to a s t h e " a s s i g n e e c l a u s e " a p p l i e s o n l y t o c a s e s i n
w h i c h a n a l i e n sues a c i t i z e n or in w h i c h a c i t i z e n of a n o t h e r state
s u e s a c i t i z e n o f t h e s t a t e i n w h i c h t h e a c t i o n i s b r o u g h t , a n d t h a t it
h a s n o a p p l i c a t i o n to a c a s e a r i s i n g u n d e r a l a w of the U n i t e d S t a t e s .
T h a t t h i s c a s e is o n e a r i s i n g u n d e r a l a w o f t h e U n i t e d
States h a s b e e n distinctly decided in A m e r i c a n B a n k & Trust Co. v.
F e d e r a l R e s e r v e B a n k of A t l a n t a , 2 ^ 6 U . S .
499*
, 4l Sup. Ct. Bep.
T h e p l a i n t i f f m a i n t a i n s t h a t t h e l e g i s l a t i v e h i s t o r y a n d judicial,
c o n s t r u c t i o n o f t h e " a s s i g n e e c l a u s e " u n m i s t a k a b l y s h o w t h a t it h a s n o
a p p l i c a t i o n to a c a s e a r i s i n g u n d e r a l a w o f t h e U n i t e d S t a t e s , a n d
f u r t h e r that the " a s s i g n e e c l a u s e " , as it n o w a p p e a r s in S e c t i o n 2 4 of
t h e J u d i c i a l C o d e , d o e s n o t c h a n g e t h e o p e r a t i o n o f t h a t c l a u s e a s it
existed in the Act of 1888.
The "assignee c l a u s e " w a s e m b o d i e d in the
o r i g i n a l J u d i c i a r y A c t of 1 7 8 9 a n d h a s b e e n b r o u g h t f o r w a r d i n s u b s t a n c e
in varying phraseology through all subsequent enactments and revisions.
The o r i g i n a l J u d i c i a r y A c t of 1789» 1 U . S . S t a t . 7 2 et s e q . , d i d n o t
v e s t j u r i s d i c t i o n o v e r c a s e s a r i s i n g u n d e r t h e C o n s t i t u t i o n or l a w s o f
t h e U n i t e d S t a t e s , b u t b y S e c t i o n 1 1 t h e r e o f the j u r i s d i c t i o n w a s c o n fined to t h r e e c l a s s e s of c a s e s :
1.
7/here t h e U n i t e d S t a t e s a r e p l a i n -
t i f f s ; 2 . W h e r e a n a l i e n is a p a r t y ; 3« tThere t h e s u i t i s b e t w e e n a
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citizen of the state w h e r e the suit is b r o u g h t and a c i t i z e n of another
state.
B y the Act of F e b r u a r y 1 3 , 1801, c. 4, Sec. 11, 2 Stat. 89, jurisd i c t i o n o v e r s u i t s a r i s i n g u n d e r the C o n s t i t u t i o n and l a w s of the U n i t e d
States w a s v e s t e d , b u t b y the Act of M a r c h S, 1802, 2 U . S. Stat. I32,
t h e A c t o f F e b r u a r y 13,
1 8 0 1 , w a s r e p e a l e d a n d the o r i g i n a l J u d i c i a r y A c t
revived, so that the j u r i s d i c t i o n over cases a r i s i n g u n d e r the C o n s t i t u t i o n
and laws of the U n i t e d S t a t e s w a s b r o a d l y e x e r c i s e d for the first time
b y t h e A c t o f M a r c h 3, 1 8 7 5 , c . 1 3 7 , s e c , 1 , 1 8 S t a t . 4 7 0 .
R e v e r t i n g to t h e o r i g i n a l J u d i c i a r y A c t , i t w a s d i s t i n c t l y h e l d
b y J u s t i c e S t o r y , at c i r c u i t , that the " a s s i g n e e c l a u s e " w a s w i t h o u t a p p l i c a t i o n to a suit b y the U n i t e d States, as a s s i g n e e , to r e c o v e r the
c o n t e n t s of a p r o m i s s o r y n o t e a g a i n s t the m a k e r , a l t h o u g h t h e m a k e r a n d
the p a y e e s a n d a s s i g n o r s w e r e c i t i z e n s of the same s t a t e , b e c a u s e the r e s t r i c t i o n c o n t a i n e d in the e l e v e n t h s e c t i o n o f the A c t , b e i n g the " a s s i g n e e
c l a u s e " in q u e s t i o n , w a s n o t intended to a p p l y to a suit b r o u g h t b y the
United States.
U n i t e d States v. Greene, 4 Mason 427, 26 Fed. Cases No.
15,258.
It therefore appears that the "assignee clause", as embodied
i n t h e o r i g i n a l J u d i c i a r y A c t , w a s c o n f i n e d i n i t s o p e r a t i o n to t h e r e m a i n i n g two c l a s s e s of c a s e s - the o n e in w h i c h a n a l i e n w a s a p a r t y , and
the o t h e r in w h i c h the j u r i s d i c t i o n r e s t e d s o l e l y on d i v e r s e c i t i z e n s h i p .
t h e spirit and intent of the "assignee c l a u s e " and a c o n s i d e r a tion of the evil d e s i g n e d to be p r e v e n t e d t h e r e b y d o n o t e m b r a c e this
case within their purview.
The First B a n k of the U n i t e d States w a s A o t
b y i t s c h a r t e r v e s t e d w i t h t h e p o w e r to s u e i n t h e f e d e r a l c o u r t , a n d , a s
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a b o v e s t a t e d , the J u d i c i a r y A c t d i d n o t c o n f e r j u r i s d i c t i o n o v e r
c a s e s a r i s i n g u n d e r t h e l a w s o f the U n i t e d S t a t e s , a n d i t w a s , t h e r e f o r e , p r o p e r l y h e l d , in the c a s e s of The B a n k o f the U n i t e d S t a t e s v .
D e v e a u x , 5 C r a n c h 6 l , a n d T h e B a n k of t h e U n i t e d S t a t e s v . M a r t i n , 5
Peters 479, that the b a n k could not maintain an action in the federal
court.
O b v i o u s l y t h e d e c i s i o n i n t h o s e c a s e s w o u l d h a v e b e e n to t h e
c o n t r a r y h a d the o r i g i n a l J u d i c i a r y A c t c o n f e r r e d , as the J u d i c i a l
C o d e n o w c o n f e r s , j u r i s d i c t i o n o v e r c a s e s a r i s i n g u n d e r t h e l a w s of t h e
United States.
T h e r e a f t e r t h e s e c o n d B a n k of t h e U n i t e d S t a t e s w a s i n c o r p o r a t e d
b y A c t of C o n g r e s s a n d its c h a r t e r e x p r e s s l y c l o t h e d it w i t h the p o w e r
to s u e i n t h e f e d e r a l c o u r t .
It w a s h e l d b y Chief J u s t i c e M a r s h a l l ,
i n O s b o r n v . T h e B a n k , 9 H h e a t o n 7 3 5 , t h a t it w a s w i t h i n t h e p r o v i n c e
o f C o n g r e s s , u n d e r t h e C o n s t i t u t i o n , to c o n f e r j u r i s d i c t i o n o n t h e
f e d e r a l c o u r t s of a suit b y the b a n k , as s u c h a suit w a s o n e a r i s i n g
u n d e r a l a w of the U n i t e d States w i t h i n the m e a n i n g of those words in
the C o n s t i t u t i o n , and that t h e r e f o r e the b a n k c o u l d m a i n t a i n a n a c t i o n
in the f e d e r a l c o u r t .
T h e e x p r e s s p r o v i s i o n i n t h e c h a r t e r of t h e b a n k
t h a t it m i g h t s u e i n the f e d e r a l c o u r t w a s b u t the e q u i v a l e n t o f t h e
existing statute which confers jurisdiction in all
suits of a civil
n a t u r e , a t c o m m o n l a w o r i n e q u i t y , o f c a s e s a r i s i n g u n d e r t h e l a w s of
t h e U n i t e d S t a t e s , a n d h a d the o r i g i n a l J u d i c i a r y A c t c o n f e r r e d t h a t
j u r i s d i c t i o n the special p r o v i s i o n in the b a n k ' s c h a r t e r a u t h o r i z i n g
it to s u e i n t h e f e d e r a l c o u r t w o u l d h a v e b e e n w h o l l y u n n e c e s s a r y .
In Commercial National Bank v. Simmons, 6 Fed. Cases No. 3>062,
t h e b a n k b r o u g h t a n a c t i o n t o r e c o v e r t h e c o n t e n t s o f n o t e s p a y a b l e to
.
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and. assigned by citizens of the state where the suit was brought to
the plaintiff, and it was contended there, as it is contended here,
that the "assignee clause" defeated the jurisdiction, but the court
held otherwise.
Again, in The Bank of the United States v. The Planters' Batik
of Georgia, 9 iheaton 904, Chief Justice Marshall held that the bank,
despite the "assignee clause", could maintain an action on notes
assigned to it by citizens of the State of Georgia in which the action
was brought * It clearly appears from the opinion in that case that the
court construed the "assignee clause" to be confined in its application
to cases in which the jurisdiction rested solely on diverse citizenship.
In the course of the opinion Chief Justice Marshall, inquiring
whether the "assignee clause" defeated the jurisdiction, pertinently
said:
"It does not sue because the defendant is a citizen of a
different state from any of its members, but because its
charter confers upon it the right of suing its debtors in
a circuit court of the United States.
If the bank could not sue a person who was & citizen of the
same state with any one of its members, in the circuit
court, this disability would defeat the power.
There is,
probably, not a commercial State in the Union, some of
whose citizens are not members of the
States.
Bank of the United
There is, consequently, scarcely a debt due to
the bank, for which a suit could be maintained in the federal
court, did the jurisdiction of the court depend on citizenship.
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A g e n e r a l p o w e r to s u a in a n y c i r c u i t c o u r t o f t h e UnitedS t a t e s , e x p r e s s e d i n t e r m s o b v i o u s l y i n t e n d e d to c o m p r e h e n d
e v e r y c a s e , w o u l d t h u s b e c o n s t r u e d to c o m p r e h e n d n o c a s e .
S u c h a c o n s t r u c t i o n cannot b e the correct o n e . "
H e r e t h e p l a i n t i f f d o e s n o t s u e b e c a u s e t h e d e f e n d a n t is
a c i t i z e n o f a d i f f e r e n t s t a t e , b u t b e c a u s e its c h a r t e r , i n v i r t u e o f
a n A c t o f C o n g r e s s , c o n f e r s u p o n it t h e r i g h t o f s u i n g i t s d e b t o r s in
the f e d e r a l c o u r t u n d e r t h a t p r o v i s i o n o f S e c t i o n 2 4 o f t h e J u d i c i a l
Code w h i c h v e s t s j u r i s d i c t i o n in this c o u r t n o t cf some b u t of all
c a s e s a r i s i n g u n d e r the laws of the U n i t e d S t a t e s .
H e n c e it is c l o t h e d ,
b y v i r t u e o f i t s c h a r t e r a n d the j u r i s d i c t i o n a l p r o v i s i o n a b o v e r e f e r r e d
to, w i t h t h e g e n e r a l p o w e r to s u e i n t h e c o u r t s o f t h e U n i t e d S t a t e s ,
and that power is, as said b y Chief Justice Marshall,
" e x p r e s s e d in
t e r m s o b v i o u s l y i n t e n d e d to c o m p r e h e n d e v e r y c a s e " , a n d t o c o n s t r u e it
a s c o n t e n d e d f o r b y t h e d e f e n d a n t h e r e i n w o u l d m a k e it " c o m p r e h e n d n o
case".
A s this case a r i s e s u n d e r a l a w of the U n i t e d S t a t e s , the m a t t e r
o f c i t i z e n s h i p is i m m a t e r i a l »
In Commercial National Bank v. Simmons,
supra, Walker, District Judge, said:
" I f the m a t t e r o f c i t i z e n s h i p , i n r e f e r e n c e t o t h e n a t i o n a l
b a n k s , is d i s p e n s e d w i t h i n f a v o r o f s u c h b a n k s , t h e n w h a t
r e a s o n is t h e r e f o r t h e a p p l i c a t i o n o f t h e l i m i t a t i o n , a s to
suits on assigned paper?
T h a t l i m i t a t i o n i s o n l y a t t a c h e d to
e n f o r c e t h e p r i v i l e g e s o f c i t i z e n s h i p a n d to p r e v e n t i t s a b u s e
in b r i n g i n g suits in f e d e r a l c o u r t s .
And, further, the banks,
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in p u r c h a s i n g n o t e s , e t c . , are o n l y d o i n g w h a t the l a w
a u t h o r i z e s t h e m to d o . "
This u n m i s t a k a b l y shows that the r e s t r i c t i o n of the "assignee
c l a u s e " a p p l i e s o n l y t o t h e m a t t e r of c i t i z e n s h i p a n d t h a t i t w a s n e v e r
d e s i g n e d to e x t e n d to a c a s e a r i s i n g u n d e r a l a w o f t h e U n i t e d S t a t e s .
A g a i n , t h e c o m m e n t o f J u d g e »7elker t h a t the* b a n k s i n p u r c h a s i n g n o t e s
a r e d o i n g o n l y w h a t t h e l a w a u t h o r i z e s t h e m to d o , is p e r t i n e n t h e r e .
T h e c h a r t e r o f t h e p l a i n t i f f a u t h o r i z e s it to d e a l i n a n d t o a c q u i r e
s u c h p a p e r a s t h a t u p o n w h i c h t h i s s u i t is b a s e d , a n d it is m a t t e r o f
common, and therefore j u d i c i a l k n o w l e d g e that the a s s e t s of all the
F e d e r a l R e s e r v e B a n k s c o n s i s t l a r g e l y of n o t e s a n d other c h o s e s in
a c t i o n a s s i g n e d to t h e m b y c i t i z e n s o f the S t a t e s i n w h i c h t h e y a r e
located-
F r o m t h i s it f o l l o w s t h a t t h e c o n s t r u c t i o n c o n t e n d e d f o r b y
the d e f e n d a n t in this case w o u l d deprive the F e d e r a l R e s e r v e B a n k s of
the r i g h t to s u e the m a j o r i t y , i f n o t a l l , o f t h e i r d e l i n q u e n t d e b t o r s
i n the f e d e r a l c o u r t .
S u c h a c o n s t r u c t i o n w o u l d b e s u b v e r s i v e of b o t h
t h e l e t t e r a n d t h e s p i r i t of t h e l a w t h a t e x p l i c i t l y c o n f e r s j u r i s d i c t i o n of a l l c a s e s a r i s i n g u n d e r the laws of the U n i t e d S t a t e s .
The "assignee c l a u s e " d o e s n o t o p e r a t e to d e f e a t j u r i s d i c t i o n
u n l e s s t h e c a s e c o m e s b o t h w i t h i n i t s l e t t e r a n d i t s i n t e n t , I f it
s h o u l d b e c o n c e d e d t h a t t h i s c a s e c o m e s w i t h i n the l e t t e r o f t h e
" a s s i g n e e c l a u s e " , y e t it is e q u a l l y o b v i o u s t h a t it d o e s n o t c o m e w i t h i n
its i n t e n t .
A s s a i d b y J u s t i c e S t o r y , i n U n i t e d S t a t e s v. G r e e n e , s u p r a i n
discussing the "assignee clause";
A
'
x-3l+35a
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•
"The terms of this latter clause are exceedingly broad
and strong, 'nor shall any district or circuit court have
cognizance', etc.; and if they are to be understood without any limitation whatsoever, they clearly extend to the
present case."
But, said Justice Story:
"It was foreseen, that if no restriction of this nature were
interposed, the jurisdiction of the courts of the United
States might, by fraudulent or friendly assignments, be
extended to almost all classes of contracts between citizens
of the same state.
This would be a ,manifest evasion of the
Constitution in its limits upon the .judicial power.
This
was the mischief to be remedied. But the case of the government is not within the mischief.
It is not presumable.
that the government would countenance a fraud of this nature,"
It csumot be presumed that the Federal Reserve Banks, which
essentially are great governmental agencies and in which the government itself has a direct pecuniary interest, would indulge the practice
of obtaining choses in action by "fraudulent or friendly assignments"
for the improper purpose of wrongfully conferring jurisdiction where
it did not rightfully exist.
The institution, in this court of a suit
arising under a law of the United States cannot constitute a mischief
because the institution and maintenance of such a suit is expressly
permitted by the Constitution and the existing law.
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In New Orleans v. Whitney, Administrator, I38 U. S.
595, the co-art entertained jurisdiction of suit on a chose in
action by an administrator, saying:
" T h e e v i l w h i c h t h e l a w w a s i n t e n d e d to obtfiate w a s t h e
v o l u n t a r y c r e a t i o n o f f e d e r a l .jurisdiction b y simulated
assignments.
Assignments b y o p e r a t i o n of law, b y
c r e a t i n g l e g a l r e p r e s e n t a t i v e s , are n o t w i t h i n the m i s c h i e f o r r e a s o n of t h e l a w . "
In Lipschitz v. Napa Fruit Co., 223 Fed. 701, the
Circuit Court of Appeals for the Second Circuit, in discussing
the "assignee clause", said:
"The i n t e n t of the s t a t u t e w a s to p r e v e n t c i t i z e n s of
the same state f r o m c r e a t i n g a d i v e r s i t y of c i t i z e n s h i p
b y a s s i g n m e n t , and f r o m thereby c o n f e r r i n g u p o n the assignee b y indirection a right to sue in the c o u r t s of the
United States which otherwise he would not have possessed."
In Holmes v. Goldsmith, l4j U. S. 160, the court said:
"It is quite plain that the plaintiff's action did not
offend the spirit and purpose of this section of the Act.
The purpose of the restriction as to suits by assignees
was to prevent the making of assignments of choses in
action for the purpose of giving .jurisdiction to the
x-3345a
-10federal court."
In that case the jurisdiction, t h o u g h r e s t i n g solely
o n d i v e r s e c i t i z e n s h i p , w a s s u s t a i n e d b e c a u s e it w a s s h o w n t h a t
the n o m i n a l endorser w a s not r e a l l y such, and that the n o t e w a s made
"by t h e m a k e r s f o r h i s a c c o m m o d a t i o n a n d a s h i s s u r e t i e s .
N u m e r o u s o t h e r c a s e s o f s i m i l a r i m p o r t m a y "be r e a d i l y
c i t e d , h u t the f o r e g o i n g e x c e r p t s i n d i s p u t a b l y e v i d e n c e the fact
t h a t t h i s c a s e is i n d i s p u t a b l y w i t h o u t the m i s c h i e f or the p u r v i e w
of the i n h i b i t i o n of the "assignee c l a u s e " .
There are two classes of federal jurisdiction:
One
is d e p e n d e n t u p o n the c h a r a c t e r of the p a r t i e s , a n d the o t h e r u p o n
the c h a r a c t e r of the s u b j e c t m a t t e r .
T h e s e a r e t-vo d i s t i n c t c o n -
c e p t i o n s a n d t h i s c a s e d o e s n o t d e p e n d o n t h e c h a r a c t e r of the
p a r t i e s , b u t is g o v e r n e d b y the subject m a t t e r .
In Cohens v. Virginia, 6 Eheaton 264, 393» Chief Justice
Marshall said:
"In one d e s c r i p t i o n of c a s e s , the j u r i s d i c t i o n o f the
c o u r t is f o u n d e d e n t i r e l y o n t h e c h a r a c t e r of t h e p a r t i e s ;
a n d the n a t u r e of the c o n t r o v e r s y is n o t c o n t e m p l a t e d b y
the constitution.
T h e c h a r a c t e r of the p a r t i e s is e v e r y -
t h i n g , the n a t u r e of the c a s e n o t h i n g .
I n the other d e -
s c r i p t i o n of cases the j u r i s d i c t i o n is f o u n d e d e n t i r e l y
o n the c h a r a c t e r of the c a s e , a n d the p a r t i e s a r e n o t
contemplated b y the constitution.
I n these the n a t u r e of
the c a s e is e v e r y t h i n g , t h e c h a r a c t e r of the p a r t i e s
nothing."
v. 3 4 3 5 a
-11-
The jurisdiction of this suit, therefore, is dependent
upon its character, to wit: one arising under a law of the
United States, and is in no way concerned with the character of
the parties.
The contention of the defendant is further confronted
with this insuperable objection.
In pursuance of the Constitution
Congress has explicitly clothed this court with jurisdiction
of all suits at common law or in equity that involve the requisite
jurisdictional amount and that arise under the laws of the United
States.
This jurisdiction will not be held to be taken away by
any subsequent words of the statute, although appropriate for
that purpose, unless it shall clearly appear that such was the
manifest intent of Congress.
The reasoning of Justice Story, in United States v.
Greene, supra, whilst applying with peculiar force to the
government, is nevertheless applicable here.
In the course of
that opinion Justice Story said:
"Here the .jurisdiction is clearly given by the words of the
9th section, and it is incumbent upon those who assert
that it is restrained by another section, to establish the
fact beyond all doubt.
To show that the subsequent words
may be so applied, is not sufficient: it must be shown
that they were actually used for such a purpose."
The "assignee clause" was inserted in the original
Judiciary Act, and that at a time when it was not possible for
.X-3U35a
-12-
it to operate upon suits arising under the Constitution or the
laws of the United States, because at that time such jurisdiction had not been conferred, nor, if we eliminate the
ephemeral existence of the Act of February 1), 1801, was it
conferred until the Act of March 3> 1875*
I t is therefore in-
disputable that Congress in the original enactment of the
"assignee clause" designed that it should operate only on
suits in which the jurisdiction was founded either upon alienage
or diverse citizenship.
1887,
as
The "assignee clause", in the Act of
corrected by the Act of 1888, which is embodied in
Section 629 of the Revised Statutes, is set forth in a proviso
following the grant of jurisdiction in cases in which an alien
is a party or the suit is between a citizen of the state where
it is brought and a citizen of another state.
That act is as
follows:
"The circuit courts shall have original jurisdiction as
follows:
First. Of all suits of a civil nature at common law or in
equity, where the matter in dispute, exclusive of costs
exceeds the sum or value of five hundred dollars, and an
alien is a party, or the suit is between a citizen of the
State where it is brought and a citizen of another State:
Provided. That no circuit court shall have cognizance of
any suit to recover the contents of any promissory note or
other chose in action in favor of an assignee, unless a
X->35a
-13suit might have been prosecuted in such court to recover
the said contents if no assignment bad been made, except
in cases of foreign bills of exchange."
The connection of the clause in question in the statute above quoted unmistakably shows that its operation was
restricted to the two classes of cases antecedently specified.
Again, the "assignee clause" is therein embodied in a proviso,
and it is familiar learning that the office of a proviso,generally,
is either to except something from the -enacting clause, or to
qualify or restrain its generality, or to exclude some possible
ground of misinterpretation of it as extending to cases not
intended by the Legislature to be brought within its purview.
Where the enacting clause is general in its language and object.
and a proviso is afterwards introduced, that proviso is construed
strictly and takes no case out of the enacting clause which does
not fall fairly within its terms. j n short, a proviso carves
.
special exceptions only out of the enacting clause, and those
who set up any such exception must establish it as being; within
the reason thereof.
Such is the text of the article entitled
"Statutes & Statutory Construction" in 1 Fed, Stat. Anno. 2
ed., p. 153» and. that text is supported by a wealth of
citations from the ultimate tribunal.
The defendant cannot parry the force of this settled
rule of construction by pointing out that the "assignee clause",
as it now appears in Section 24 of the Judicial Code, is
J
—4
1—
x-343%
differently arranged and set forth in a separate and distinct
sentence.
Such fact can exert no potent influence here because
the Judicial Code, both by its express provisions and by
settled judicial construction, is not a new enactment but a mere
continuation, and neither a mere change in arrangement nor an
unimportant change of phraseology operates a change of the law.
Section 294 of the Judicial Code reads:
"The provisions of this Act, so far as they are substantially
the same as existing statutes, shall be construed as continuations thereof, and not as new enactments, and there
shall be no implication of a change of intent by reason of
a change of words in such statute, unless such change of
intent shall be clearly manifest."
Section 295 of the Judicial'Code reads:
"The arrangement and classification of the several sections
of this Act have been made for the purpose of a more convenient and orderly arrangement of the same, and therefore
no inference or presumption of a legislative construction
is to be drawn by reason of the chapter under which any ,
particular section is placed."
It is familiar learning that in the construction of
the Revised Statutes the presumption is against an intention to
change the meaning and construction of a statute re-enacted
therein. Mere changes in phraseology arising from a condensation or otherwise are not to be regarded as changing the pre-
099
-15#
existing law.
N o r is it to b e i n f e r r e d t h a t C o n g r e s s , b y
consolidating or transposing earlier provisions, intended to
c h a n g e t h e i r e f f e c t , "unless a n i n t e n t i o n t o d o so is c l e a r l y
expressed.
y
A change of the law b y a revision w i l l not b e
p r e s u m e d -unless t h e l a n g u a g e i n t h e r e v i s i o n c a n n o t p o s s i b l y
b e a r the same construction a s the revised and repealed act.
1
F e d . S t a t . A n n o . 2 e d . 1 8 3 srncl c a s e s c i t e d f r o m t h e S u p r e m e
C o u r t "under n o t e s 7» 8, 9 a n d 1 0 .
In Anderson v. Pacific, etc., Co., 225 U. S. 187. the
Supreme Court, speaking b y Justice Hughes, said:
*
"The change of arrangement, which placed portions of what
was originally a single section in two separated sections,
cannot be regarded as altering the scope and purpose of
the enactment.
F o r it w i l l n o t b e i n f e r r e d t h a t C o n g r e s s ,
in revising and consolidating the laws, intended to change
t h e i r e f f e c t u n l e s s s u c h i n t e n t i o n is c l e a r l y e x p r e s s e d . "
To the same effect are U n i t e d States v . Cress, 2 4 }
t
U . S . 3 1 6 , 331.
B u c k Stove Co. v. Vickers, 226 U . S. 205,213;
and H e r r m a n n v. Edwards, 238 U . S. 10J, 1 1 7 and 1 1 8 .
/
In the case last
cited t h e c o u r t , s p e a k i n g b y M r .
C h i e f J u s t i c e "White, p p . 1 1 7 a n d 1 1 8 , p e r t i n e n t l y s a i d :
"The r e - e n a c t e d section in other words, instead of g e n e r a l l y
stating what was excluded from jurisdiction and then
carving out exceptions, as was done in the Act of 1888,
\
g a v e j u r i s d i c t i o n o n l y i n t h e c a s e s w h e r e it w a s i n t e n d e d
— 16 —
x-_p^'3r)S
t o g i v e it a n d t h e n p r o c e e d e d to d e c l a r e t h a t i n a l l o t h e r
cases w i t h i n the contemplation of the section there should
h e n o j u r i s d i c t i o n , t h u s m a k i n g t h e l i n e s c l e a r a n d "broad
a n d l e a v i n g n o r o o m for controversy or doubt,
Aside from
t h i s it is t o b e m o r e o v e r o b s e r v e d t h a t t h e i n t e n t i o n o f
C o n g r e s s to m a k e , b y the a d o p t i o n of the J u d i c i a l Code,
so r a d i c a l a c h a n g e f r o m the rule w h i c h h a d p r e v a i l e d f o r
s o l o n g a p e r i o d is n o t t o b e i n d u l g e d i n w i t h o u t a c l e a r
manifestation of such purpose."
T h e m e a n i n g o f t h e " a s s i g n e e c l a u s e " , a s it e x i s t e d
in the original Judiciary Act and ever since u p to a n d including
t h e A c t o f 1 8 8 8 , a s j u d i c i a l l y i n t e r p r e t e d , is t o o w e l l s e t t l e d
t o admit the p o s s i b i l i t y of a s u c c e s s f u l c o n t e n t i o n that the
m e r e r e a r r a n g e m e n t o f it i n t h e J u d i c i a l C o d e w a s d e s i g n e d b y
C o n g r e s s to o p e r a t e such a radical change in its m e a n i n g a s that
contended for by the defendant.
The doctrine that a revision
of a statute does not change the l a w as o r i g i n a l l y e n a c t e d w a s
a l s o decided b y the Supreme Court of Texas in H a r t f o r d F i r e
Insurance Co. V. Walker, gU Tex, 473•
There are a multitude of cases in w h i c h the "assignee
clause" has b e e n applied and in which jurisdiction was denied;
b u t , f r o m a n e x a m i n a t i o n o f a g r e a t n u m b e r o f t h e m , we.
confidently v e n t u r e the a s s e r t i o n that in a l l of them the
jurisdiction rested solely on diverse citizenship, and that no
case can b e p r o d u c e d in w h i c h the "assignee clause" defeated
t h e j u r i s d i c t i o n w h e n it r e s t e d u p o n t h e e x i s t e n c e o f a f e d e r a l
—17
y-3ux>~
~
question.
In f a c t , w e t h i n k this exact q u e s t i o n h a s b e e n set a t
rest b y the Supreme Court in the case of
U « S . 23O.
Wyman v. Wallace, 201
T h a t case w a s decided b y the Circuit Court of
A p p e a l s of the E i g h t h Circuit, sub nom. G e o r g e v. W a l l a c e , 1 3 5
Fed. 286.
The court was composed of Circuit Judges Sanborn,
Thayer and Hook.
T h e r e i n the court said:
"The complainant, a citizen of N e w H a m p s h i r e , sued as the
assignee of a nonnegotiable promissory note.
His assignor,
t h e p a y e e o f t h e n o t e , is a n a t i o n a l b a n k l o c a t e d i n t h e
s t a t e o f N e b r a s k a , a n d is t h e r e f o r e d e e m e d a c i t i z e n o f
that state so far as concerns the q u e s t i o n of .jurisdiction.
Most of the appellants are also citizens of Nebraska.
This
b e i n g so, some ground of federal .jurisdiction o t h e r t h a n
d i v e r s i t y o f c i t i z e n s h i p m u s t b e f o u n d t o e x i s t t o .justify
the m a i n t e n a n c e of the suit against them."
It w a s d e c i d e d t h a t t h e j u r i s d i c t i o n r e s t e d o n a
f e d e r a l q u e s t i o n and did not depend u p o n diverse c i t i z e n s h i p
a n d t h e r e f o r e the j u r i s d i c t i o n was s u s t a i n e d .
F r o m that decision the case w a s t a k e n o n appeal to
the Supreme Court, sub nom. W y m a n v. Wallace, 201 U . S. 230.
The facts, so far as t h e y a r e e s s e n t i a l to a n
understanding of the question, are that the A m e r i c a n and the
U n i o n banks were each engaged in business in the City of Omaha,
Nebraska.
The American bank encountered financial difficulties
a n d m a d e a n ^ a r r a n g e m e n t w i t h t h e U n i o n b a n k to f i n a n c e it.
As
X-3^3cia
* *
-
18-
the result of the transaction certain notes were given, one of
w h i c h was assigned to Wallace, a citizen of N e w H a m p s h i r e .
Wallace sued on the note and by an amended bill sought, on
,.
behalf of himself and all other creditors of the A m e r i c a n bank,
•
the w i n d i n g u p of the a f f a i r s of that b a n k , the d e t e r m i n a t i o n
^
of the amount due u p o n his note, etc.
He had not reduced the
n o t e t o j u d g m e n t p r i o r to t h e c o m m e n c e m e n t o f t h e s u i t .
Upon
a final hearing a decree was entered ascertaining the amount
due
rr
a l l a c e . t h e c o m p l a i n a n t , a n d d i r e c t i n g a r e c o v e r y o f $ 9 7 • 23
o n each share of stock.
It d i s t i n c t l y a p p e a r s , p , 233» t h a t t h e a p p e l l a n t s i n
that case p r e s e n t e d the exact question involved h e r e .
s
In the
course of their brief they said:
"The court did not h a v e .jurisdiction o n the g r o u n d of
c i t i z e n s h i p , b e c a u s e complainant is the a s s i g n e e o f a
nonnegotiable chose in a c t i o n and his assignor, the Union
N a t i o n a l B a n k , is a b a n k l o c a t e d in N e b r a s k a , w h i l e t h e
American National Bank. Kimball, and these appellants, were
>
also citizens of Nebraska."
The court held that, as the jurisdiction rested on a
'
federal question, the "assignee clause"^ did not apply.
Justice
B r e w e r , in d e l i v e r i n g the opinion, s a i d :
"A m a t t e r o f j u r i s d i c t i o n is f i r s t p r e s e n t e d .
The note,
w h i c h is t h e f o u n d a t i o n o f p l a i n t i f f ' s s u i t , is o n e m a d e b y
t h e A m e r i c a n B a n k to t h e U n i o n B a n k , b o t h l o c a t e d i n
•
Nebraska, a n d u n d e r the statute, for the p u r p o s e of
t
1
*?>
-°
'>1* •
X-5''35"- 19.jurisdiction, to be c o n s i d e r e d c i t i z e n s of N e b r a s k a . 2 5 S t a t .
436;
s e c . 4.
T h e p l a i n t i f f is a c i t i z e n o f N e w H a m p s h i r e ,
H e could not m a i n t a i n a n action against the m a k e r of the
note, a l t h o u g h a citizen of a State other t h a n that of the
maker and payee,
25 Stat. 434; sec. 1,
But if diverse
citizenship was the sole basis of the jurisdiction of the
Circuit Court, the decision of the Court of A p p e a l s w o u l d
be final and there would be no appeal to this court.
Stat. 828; sec. 6.
26
The .jurisdiction of the Circuit Court,
however, w a s not invoked on the ground of diverse citizenship - at least, not o n that alone.
The case presented
was one a r i s i n g u n d e r the laws of the United Statss.
It
w a s a suit to enforce a special right g i v e n b y those l a w s .
S e c t i o n 5 2 2 0 , R e v . Stat., r e a d s : 'Any ( n a t i o n a l b a n k i n g )
a s s o c i a t i o n may go into liquidation and b e closed by the
vote of its shareholders owning two-thirds of its stock.'
%
section 5151, Rev. Stat., stockholders in national
b a n k s a r e m a d e l i a b l e f o r 'all c o n t r a c t s , d e b t s a n d
engagements of such association, to the extent of the
a m o u n t o f t h e i r s t o c k t h e r e i n , at t h e p a r v a l u e t h e r e o f ,
in addition to the amount invested in such shares.'
t i o n 2 o f t h e a c t o f J u n e 3 0 , 18?6,
1 9 S t a t . 63,
Sec-
is a s
follows:
'Sec. 2.
That when any national banking association shall
have gone into liquidation under the provisions of section
five thousand two hundred and twenty of said statutes, the
- 20
-
individual l i a b i l i t y of the shareholders p r o v i d e d for by s e c t i o n
fifty one h u n d r e d and fifty one of said statutes m a y b e enforced
b y any creditor of such association, b y b i l l in equity, i n t h e
n a t u r e of a c r e d i t o r ' s b i l l , b r o u g h t b y s u c h c r e d i t o r o n b e h a l f
of h i m s e l f a n d of all other creditors of the a s s o c i a t i o n , a g a i n s t t h e
shareholders thereof, in any court of the United States having
o r i g i n a l j u r i s d i c t i o n in equity for the d i s t r i c t in w h i c h such
a s s o c i a t i o n m a y h a v e b e e n loc&ted or e s t a b l i s h e d . *
More than
two-thirds of the stock voted, on F e b r u a r y 25, 1396, for a
v o l u n t a r y l i q u i d a t i o n , a n d o n A p r i l 2 7 , I896, t h e C o m p t r o l l e r
of the Currency formally approved the liquidation a n d notified
t h e c a s h i e r o f t h e A m e r i c a n B a n k to that e f f e c t .
In $roleeding.
therefore, b y this suit to enforce in b e h a l f o f h i m s e l f and a l l
o t h e r creditors of the A m e r i c a n B a n k the extra l i a b i l i t y imposed
b y Rev, Stat, sec, 5151. a case was presented arising u n d e r the
l a w s of the U n i t e d States, and of which, independently of the
m a t t e r o f d i v e r s e c i t i z e n s h i p , t h e C i r c u i t C o u r t h a d .jurisdiction."
It w i l l b e o b s e r v e d t h a t i n the c o u r s e o f J u s t i c e B r e w e r ' s
opinion he said:
"He could not m a i n t a i n an action against the maker o f t h e note,
a l t h o u g h a c i t i z e n of a state other than that of the m a k e r a n d
p a y e e , 25 S t a t . 4 3 4 ; s e c . 1 . "
25 U . S. Stat. 434, sec, 1, cited b y J u s t i c e Brewer, as
a b o v e s t a t e d , is t h e enafctment a p p r o v e d A u g u s t 1 3 , 1 8 8 8 , c o n taining the "assignee clause".
The "assignee clause" was
e m b o d i e d i n the. o r i g i n a l J u d i c i a r y A c t w h i c h , a s w e h a v e s t a t e d ,
-
21-
d i d n o t c o n f e r j u r i s d i c t i o n o f a n y c a s e a r i s i n g tinder t h e C o n s t i tution or the laws of the United States.
Justice Story, in his
opinion in United States v. Greene, supra, w h i c h has never b e e n
questioned, distinctly decided that the "assignee clause" did
not a p p l y to a suit by t h e U n i t e d States a s a s s i g n e e ; a n d J u d g e
Welker, in his opinion in Commercial National B a n k v . Simmons,
s u p r a , w h i c h h a s n e v e r b e e n q u e s t i o n e d , d e c i d e d t h a t it d i d n o t
apply to the case of a national b a n k whose charter a u t h o r i z e d
it t o s u e i n t h e f e d e r a l c o u r t ,
P r e s u m a b l y , t h e r e f o r e , C o n g r e s s k n e w w h e n it e n a c t e d
the original Judiciary Act that the "assignee clause" was not
i n t e n d e d to affect the j u r i s d i c t i o n of cases o t h e r t h a n t h o s e
resting solely on diverse citizenship.
Therefore the original
intent of the " a s s i g n e e c l a u s e " w a s to o n l y p r e s c r i b e a n
additional requisite of diversity of citizenship. Such manifestly w a s its o r i g i n a l intent, a n d n o t h i n g h a s t r a n s p i r e d since
that time to evidence a change of that i n t e n t .
In fact, W y m a n
v . W a l l a c e , s u p r a , c o n c l u s i v e l y s h o w s t h a t s u c h is n o w t h e i n t e n t
of the enactment.
The First B a n k of the United States, d e s p i t e the
"assignee clause", could have maintained an action, a s assignee,
in the f e d e r a l court h a d those courts at that time b e e n v e s t e d
w i t h j u r i s d i c t i o n of cases a r i s i n g u n d e r the laws o f the U n i t e d
States; and the special provision in ths charter of Second
B a n k o f t h e U n i t e d S t a t e s a u t h o r i z i n g it t o s u e i n t h e f e d e r a l
court w o u l d h a v e b e e n w h o l l y u n n e c e s s a r y h a d the f e d e r a l courts
X-3U353
— 22 —
at that time b e e n v e s t e d w i t h j u r i s d i c t i o n of cases involving
federal questions*
The charter of the Federal Reserve B a n k plus the
j u r i s d i c t i o n of all cases a r i s i n g u n d e r t h e l a w s of t h e U n i t e d
S t a t e s is t h e e x a c t e q u i v a l e n t o f t h e c h a r t e r o f t h e S e c o n d B a n k
of the U n i t e d S t a t e s , and, therefore, the d e c i s i o n s of C h i e f
J u s t i c e M a r s h a l l , in T h e B a n k of the U n i t e d States v . The
P l a n t e r s v B a n k o f G e o r g i a , a n d J u d g e ^ e l k e r , in C o m m e r c i a l
National B a n k v. Simmons, supra, are not only applicable
but conclusive.
It is t h e r e f o r e r e s p e c t f u l l y s u b m i t t e d t h a t , a s t h e
j u r i s d i c t i o n o f t h i s c a s e r e s t s u p o n t h e f a c t t h a t it is a
suit a r i s i n g u n d e r the laws of the U n i t e d States, this court
has jurisdiction.
Respectfully submitted,
C M S . C. HUFF,
E. B. STROUD,
ETHERIDGE, McCORMICK & BROMBERG,
Attorneys for Plaintiff.
'
708
X-3436
R e s u l t s of Test E x a m i n a t i o n of each K i n d of Paper
C u r r e n c y presented during the M o n t h of
ig2_,
f o r R e d e m p t i o n b y the
.
(Name of F. R. Bank or B r a n c h )
U. S. CURRENCY
(Half N o t e s )
Denomination
Ones
Twos
Fives
Tens
Twenties
Total
No. Notes Examined
No. Fit N o t e s
fS o f F i t N o t e s
F. R, B A N K N O T E S
»
k.
No. Notes Examined
1
N o . Fit N o t e s
%
of Fit N o t e s
FEDERAL RESERVE NOTES
(Half N o t e s )
Denomination
No. Notes Examined
No. Fit N o t e s
^ of Fit N o t e s
NATIONAL BANK NOTES
No. Notes E x a m i n e d
No. Fit Notes
io o f F i t N o t e s
Fives
Tens
Twenties
Fifties
Hundreds
Total
f
X-3U37
£OPY
S. EES. 302.
IN T H E SENATE OF THE UNITED STATES,
A p r i l 2 0 ( c a l e n d a r d a y J u n e 7),1922,
W h e r e a s it h a s b e e n c h a r g e d o n t h e f l o o r o f t h e S e n a t e t h a t t h e
Federal Reserve Board h a s a publicity fund of several thousa n d d o l l a r s w h i c h it u s e s f r o m t i m e t o t i m e t o c a r r y o n a
n e w s p a p e r p r o p a g a n d a in support of the acts and p o l i c i e s of
the Federal Reserve Board; a n d
W h e r e a s it h a s b e e n c h a r g e d t h a t a p o r t i o n o f s a i d p u b l i c i t y f u n d
h a s b e e n u s e d to i n d u c e c e r t a i n n e w s p a p e r s to p r a i s e a n d d e fend the acts and policies of said Federal Reserve Board a n d
to a t t a c k and' condemn Senators who h a v e criticized the p o l i c y
o f s a i d b o a r d : T h e r e f o r e b e it
R E S O L V E D , T h a t the F e d e r a l R e s e r v e B o a r d b e , a n d it is
h e r e b y , r e q u e s t e d to f u r n i s h to t h e S e n a t e , at i t s e a r l i e s t
c o n v e n i e n c e , i n w r i t i n g , a l l the i n f o r m a t i o n in its p o s s e s sion touching the matters specifically set out in the following questions:
(1) H a s the F e d e r a l R e s e r v e B o a r d a p u b l i c i t y fund?
If s o , h o w m u c h o r w h a t a m o u n t is p r o v i d e d p e r a n n u m a n d
f r o m w h a t tsyurce is s u c h f u n d d e r i v e d ?
( 2 ) F o r w h a t p u r p o s e is s a i d f u n d n o w u s e d a n d f o r
w h a t p u r p o s e h a s it b e e n u s e d s i n c e M a y 15, 1 9 2 0 , t o J u n e
1, 1922?
(3) T o w h a t p e r s o n o r p e r s o n s a n d i n w h a t a m o u n t s a n d
for what service performed has money b e e n paid from said
p u b l i c i t y f u n d s i n c e M a y 1 5 , 1920, t o J u n e 1, 1 9 2 2 ?
( U ) H o w is s u c h f u n d d i s b u r s e d ?
paid out?
U p o n w h o s e o r d e r is it
( 5 ) W h a t s u m is e x p e n d e d a n n u a l l y f o r p u b l i s h i n g t h e
monthly bulletins of said board, including salaries and
other expenses connected w i t h the p r i n t i n g of said b u l l e t i n s ?
Attest:
(Signed) George A. Sanderson
Secretary.
7':
COPY
X-3U37a
J u n e S, 1 9 2 2 ,
SUBJECT:
R e s p o n s e to S. Res. 3 0 2 .
Sir:
The Federal Reserve Board has received, from the Secretary of
the Senate, a r e s o l u t i o n of the S e n a t e (S. R e s . 30—5, p a s s e d J u n e
Jth, 1922, reading as follows:
,lr-
hereas it h a s b e e n c h a r g e d o n t h e f l o o r o f t h e S e n a t e
that the Federal Reserve Board has a publicity fund"of
s e v e r a l t h o u s a n d d o l l a r s w h i c h it u s e s , f r o m t i m e t o t i m e ,
to carry on a newspaper propaganda in support of the acts
a n d p o l i c i e s of the F e d e r a l R e s e r v e Board; a n d
"97hereas it h a s b e e n c h a r g e d t h a t a p o r t i o n o f s a i d
publicity fund has b e e n u s e d to induce certain newspapers
to p r a i s e and defend the acts and policies of said Federal
R e s e r v e Board, a n d to a t t a c k a n d c o n d e m n Senators w h o h a v e
c r i t i c i z e d the p o l i c y of said b o a r d : T h e r e f o r e b e it
" R e s o l v e d , T h a t t h e F e d e r a l R e s e r v e r o a r a o e , a n a it i s
h e r e b y r e q u e s t e d to f u r n i s h to the S e n a t e , at its e a r l i e s t
c o n v e n i e n c e , in w r i t i n g , a l l the i n f o r m a t i o n i n its posses*-*
s i o n t o u c h i n g ' t h e m a t t e r s s p e c i f i c a l l y set out in t h e f o l l o w
ing questions:
( 1 ) H a s the F e d e r a l R e s e r v e B o a r d a p u b l i c i t y fund; if
so, h o w m u c h o r w h a t a m o u n t is p r o v i d e d p e r a n n u m , a n d f r o m
w h a t s o u r c e is s u c h a f u n d d e r i v e d ?
(2) F o r w h a t p u r p o s e i s s a i d f u n d n o w u s e d , a n d f o r w h a t
p u r p o s e h a s it b e e n u s e d s i n c e M a y 15, 1920, t o J u n e 1, 1922?
(3) T o w h a t p e r s o n o r p e r s o n s a n d i n w h a t a m o u n t s a n d
for what service performed has money been paid from said
p u b l i c i t y f u n d s i n c e M a y 15, 1920, t o J u n e 1, 1922?
( 4 ) H o w i s s u c h f u n d d i s b u r s e d - u p o n w h o s e o r d e r is it
paid out?
( 5 ) % % a t s u m is e x p e n d e d a n n u a l l y f o r p u b l i s h i n g t h e
monthly bulletins of said board, including salaries and other
expenses connected w i t h the p r i n t i n g of said b u l l e t i n ? "
•'
T h e F e d e r a l R e s e r v e B o a r d denies the charges r e f e r r e d to in the
p r e a m b l e of the r e s o l u t i o n "that the F e d e r a l R e s e r v e B o a r d h a s a p u b l i
c i t y f u n d o f s e v e r a l t h o u s a n d d o l l a r s w h i c h it u s e s f r o m t i m e t o t i m e
to c a r r y o n a n e w s p a p e r p r o p a g a n d a in s u p p o r t o f the a c t s a n d p o l i c i e s
of the F e d e r a l Reserve Board", and "that a p o r t i o n of said p u b l i c i t y
f u n d h a s b e e n u s e d to i n d u c e c e r t a i n n e w s p a p e r s t o p r a i s e a n d d e f e n d
the acts a n d policies of the Federal R e s e r v e Board a n d to a t t a c k and
c o n d e m n S e n a t o r s w h o h a v e c r i t i c i z e d the p o l i c y of said b o a r d " .
—
2
—
X-3437a
0
I n a n s w e r t o t h e q u e s t i o n s n u m b e r e d 1, 2, 3 , s n d 4 i n t h e r e s o l u f
tion, w h i c h a r e d e s i g n e d to elicit i n f o r m a t i o n r e g a r d i n g the s o u r c e f r o m
w h i c h t h i s a l l e g e d " p u b l i c i t y f u n d " is d e r i v e d a n d t h e p u r p o s e s f o r
w h i c h and the methods by w h i c h expenditures a r e made thereform, the
F e d e r a l R e s e r v e B o a r d s t a t e s t h a t it h a s n o " p u b l i c i t y f u n d " a n d h a s
n e v e r h a d a n y s u c h f u n d , a n d t h a t it h a s n e v e r e n g a g e d i n n o r c a u s e d
to b e carried on any n e w s p a p e r p r o p a g a n d a in support of its p o l i c i e s
or for a n y other purpose, and has never used nor caused to b e used any
of its funds or other funds to induce newspapers or other a g e n c i e s for
t h e d i s s e m i n a t i o n o f n e w s , to p r a i s e or d e f e n d t h e a c t s o r p o l i c i e s
o f the F e d e r a l R e s e r v e Board, or to a t t a c k or c o n d e m n S e n a t o r s or
other persons who have criticized the Board's policies.
The Federal Reserve Board maintains no publicity organization a n d
has never even subscribed to a press clipping bureau.
The only fund u p o n w h i c h the Federal Reserve Board may draw for
a n y p u r p o s e is t h e f u n d w h i c h is r a i s e d t h r o u g h i t s s e m i - a n n u a l a s s e s s m e n t s against the Federal Reserve banks made pursuant to the terms of
S e c t i o n 1 0 of the Federal Reserve Act, w h i c h provides as f o l l o w s :
"The F e d e r a l R e s e r v e B o a r d shall h a v e p o w e r to l e v y
semi-annually u p o n the Federal R e s e r v e banks, in p r o p o r t i o n to their capital stock a n d surplus, a n a s s e s s m e n t
s u f f i c i e n t to p a y its estimated e x p e n s e s a n d the s a l a r i e s
of its m e m b e r s and employees for the half y e a r succeeding
the levying of such assessment, together with any deficit
carried forward from the preceding half y e a r . "
P a y m e n t s m a d e by the F e d e r a l R e s e r v e b a n k s p u r s u a n t to the B o a r d 1 s
semi-annual assessments, are covered into the G e n e r a l F u n d of the Treasury
o f the U n i t e d S t a t e s to the credit of t h e F e d e r a l R e s e r v e B o a r d , U n d e r
t h e l a w t h e F e d e r a l R e s e r v e B o a r d is a n i n d e p e n d e n t e s t a b l i s h m e n t o f t h e
U n i t e d S t a t e s G o v e r n m e n t a n d t h e m o n e y s i n t h e f u n d t h u s r a i s e d to m e e t
its expenses are public funds and can be disbursed only in accordance
w i t h the terms of the F e d e r a l Reserve Act, subject to the r e s t r i c t i o n s
c o n t a i n e d i n t h a t A c t a n d s u b j e c t a l s o to a l l o t h e r r e l e v a n t r e s t r i c t i o n s
u p o n the expenditures of public m o n e y s . The a u t h o r i t y for, a n d the
p u r p o s e of, all e x p e n d i t u r e s m a d e f r o m this f u n d a r e e v i d e n c e d b y the
usual form of p u b l i c voucher, and the accounts of the F e d e r a l Reserve
B o a r d are a u d i t e d , just a s are the a c c o u n t s of other d e p a r t m e n t s and establishments of the Government, b y auditors of the General A c c o u n t i n g
Office, a c t i n g under the supervision of the Comptroller General of the
United States.
T h e 5 * h q u e s t i o n o f t h e r e s o l u t i o n c a l l s f o r i n f o r m a t i o n a s to " W h a t
s u m is e x p e n d e d a n n u a l l y f o r p u b l i s h i n g t h e m o n t h l y b u l l e t i n s o f s a i d
board, including salaries and other expenses connected with the printing
of said b u l l e t i n s ? " T h e m o n t h l y b u l l e t i n r e f e r r e d to is the "Federal
Reserve B u l l e t i n " w h i c h has been issued monthly b y the Federal Reserve
Board since May, 1915
X-3^37a
- 3 I n t h e f o l l o w i n g t a b l e is s t a t e d t h e c o s t o f p r i n t i n g a n d d i s t r i b u t the Federal Heserve Bulletin:
Jan.l to May 31
Amount paid to Government Print1920
1921
1922
ing Office for printing Federal
Reserve Bulletin,
$29,013•6l
$26,l40«06
$10,762.53
ing
Cost of postage used in distribution of Federal Reserve Bulletin
Total
Less receipts for subscriptions
and sales of m i s c e l l a n e o u s issues
Net cost of publishing
2U0.00*
269.00*
96.00
$29,253.61
$26,365.06
$10,858.53
5.WS1.03
9.233,9^
3.211.50
$23*792.58
$17,131*12
$ 7f6U7.O3
•Estimated
N o one is employed by the Federal Reserve Board to p e r f o r m services
solely in connection w i t h the p u b l i c a t i o n of the F e d e r a l Reserve Bulletin.
T h e w o r k o f t h e B o a r d is p e r f o r m e d t h r o u g h a p p r o p r i a t e d i v i s i o n s , i n e a c h
of which there are a certain number of employees under the charge of a
division chief. A s a part of the w o r k of some of these divisions, certain
i n f o r m a t i o n is g a t h e r e d a n d statistics; are compiled f o r the u s e of the
F e d e r a l R e s e r v e B o a r d in the p e r f o r m a n c e o f its d u t i e s , a n d this i n f o r m a t i o n
a n d these s t a t i s t i c s a r e in m a n y instances p u b l i s h e d i n the F e d e r a l Reserve
B u l l e t i n , b u t t h e p r i n c i p a l w o r k o f t h e s e d i v i s i o n s is e n t i r e l y i n d e p e n d e n t
o f t h e p u b l i c a t i o n o f t h e B u l l e t i n . It is i m p o s s i b l e , t h e r e f o r e , t o d o
more than estimate what part of the w o r k done b y the Board's regular staff
a n d p a i d f o r i n t h e B o a r d ' s s e m i - m o n t h l y p a y r o l l is p r o p e r l y c h a r g e a b l e
to the F e d e r a l Reserve Bulletin. A reasonable estimate w o u l d b e that about
$ 3 , 0 0 0 r e p r e s e n t s the a n n u a l salaries p a i d b y the B o a r d o n a c c o u n t of w o r k
done in connection w i t h the publication of the Federal Reserve Bulletin.
The objects of the B o a r d in issuing the B u l l e t i n a r e stated in a h
a n n o u n c e m e n t c o n t a i n e d in the first issue of M a y 1, 1915» a s f o l l o w s :
"With this issue the Federal Reserve B o a r d b e g i n s the p u b l i c a t i o n of
T h e B u l l e t i n is i n t e n d e d t o a f f o r d a g e n e r a l
a Federal Reserve Bulletin.
statement concerning business conditions and events in the Federal Reserve
S y s t e m t h a t w i l l b e o f i n t e r e s t t o a l l m e m b e r b a n k s . It w i l l i n c l u d e
c o n s o l i d a t e d s t a t e m e n t s of b a n k c o n d i t i o n a n d s u c h a b s t r a c t s of c o r r e s p o n d e n c e of t h e F e d e r a l R e s e r v e B o a r d , s t a t e m e n t s a n d facts r e l a t i n g to
the national banks and Treasury Department, and actions taken by Federal
a n d State Governments as have a direct relationship to b a n k i n g problems.
Brief comparative reports concerning the operations of the Federal
Reserve System in the several districts will also be published from time
to time,
"In the l a w department of the B u l l e t i n w i l l be included opinions of The
Counsel of the Federal Reserve Board released for publication, such opinions
X-3U37a
- 4 -
of counsel of the several banks a s may b e deemed of general interest, and
reports of legislation, National and State,affecting the m e m b e r banks,
" T h e B u l l e t i n is i n t e n d e d a s a m e a n s o f c o m m u n i c a t i o n b e t w e e n t h e
F e d e r a l Reserve Board* the public, a n d the m e m b e r b a n k s . Its p u b l i c a t i o n
h a s b e e n s u g g e s t e d f r o m m a n y q u a r t e r s , a n d is e x p e c t e d t o f a c i l i t a t e t h e
w o r k of the F e d e r a l R e s e r v e b a n k s b y k e e p i n g t h e m in t o u c h w i t h c o m m o n
p r o b l e m s a n d m e t h o d s s o a s to a v o i d n e e d l e s s d u p l i c a t i o n i n t h e i r s e v e r a l
d i s t r i c t s . T h e B u l l e t i n is n o t i n t e n d e d a s a v e h i c l e f o r t h e e x p r e s s i o n
of opinion, but as a means of distributing information. The cooperation
of all member banks, and particularly of Federal Reserve banks,is requested
in order that the publication may be made as complete a s possible, and may
c o n t a i n :6s m u c h i n f o r m a t i o n o n subjects of g e n e r a l interest to m e m b e r s as
is f e a s i b l e .
"The B u l l e t i n will be distributed free to Federal Reserve banks and
to m e m b e r b a n k s . A s u b s c r i p t i o n p r i c e f o r o t h e r s w i l l b e d e t e r m i n e d l a t e r . "
Annexed hereto, as Exhibits A, B and C respectively, are copies of
t h e f i r s t a n d o f r e c e n t i s s u e s o f t h e F e d e r a l R e s e r v e B u l l e t i n , t h a t is,
t h e i s s u e s o f M a y 1, 1915»
M a y 1, 1922,
a n d t h e s h o r t e d i t i o n o f J u n e 1,
1922,
A n examination of these issues will disclose the character of the
information contained in this publication.
T h e F e d e r a l R e s e r v e B u l l e t i n is p r i n t e d a t t h e G o v e r n m e n t P r i n t i n g
O f f i c e a n d f o r t h e f u r t h e r i n f o r m a t i o n o f t h e S e n a t e t h e r e is e n c l o s e d
herewith, as Exhibit D, a copy of the Board's letter to S e n a t o r R e e S Smoot,
Chairman of the Joint Committee on Printing, u n d e r d a t j of M a r c h 16, 1920,
setting f o r t h c e r t a i n facts b e a r i n g u p o n the n a t u r e of the p u b l i c a t i o n .
The original subscription price of the Federal Reserve Bulletin was
p e r a n n u m , b u t s i n c e J u l y , 1920,
the Board has p u b l i s h e d the B u l l e t i n
in two editions. The first or short edition, containing only the regular
official announcements, a review of business conditions and other general
m a t t e r , is d i s t r i b u t e d w i t h o u t c h a r g e t o t h e m e m b e r b a n k s o f t h e F e d e r a l
Reserve System and at a charge of $ 1 . 5 0 p e r a n n u m to other subscribers.
The final or complete edition, containing the detailed analysis of business
conditions, special articles, review of foreign banks, a n d complete statist i c s s h o w i n g t h e c o n d i t i o n o f F e d e r a l R e s e r v e b a n k s , is s o l d a t t h e s u b scription price of $ 4 . 0 0 per annum.
$2.00
The amounts received from subscriptions and from sales of miscllaneous
issues are c o v e r e d into the G e n e r a l F u n d of the T r e a s u r y to t h e credit of
the Federal Reserve Board a n d can b e disbursed only in t h e m a n n e r and for
the purposes heretofore described.
Respectfully,
( S i g n e d ) I7. P . G . H a r d i n g .
The P r e s i d e n t of the S e n a t e .
G o v e r n o r .
FEDERAL RESERVE BOARD
WASHINGTON
X-3U3S
June 13, 1922.
SUBJECT:
Credit Statement Forms.
Dear Sir:
The Board has recently received a letter from
Mr. 0 . H. Boies, Statistician of the A s s o c i a t i o n of L i f e
Insurance Presidents, requesting information as to whether
or not all Federal Reserve Banks include inquiries in their
credit statement blanks regarding the amount of insurance
carried b y makers of paper offered for rediscount.
In order to enable the B o a r d to answer this inquiry, it w i l l b e appreciated if y o u w i l l f u r n i s h u s at
your early convenience w i t h three sets of the credit
statement forms used in connection with rediscounted
paper drawn b y individuals, firms, or corporations. In
forwarding these forms to the Board, kindly state w h e t h e r
o r n o t t h e f o r m s call f o r i n f o r m a t i o n r e g a r d i n g t h e a m o u n t
of fire and life insurance carried, and in the case of
l i f e i n s u r a n c e w h e t h e r t h e n a m e o f t h e b e n e f i c i a r y is
called for.
In case the
Board are modified in
fied statement should
its files m a y b e kept
credit statement forms furnished the
the future, three copies of the modibe furnished the Board in order that
u p to date.
Very truly yours,
Walter L. Eddy,
Assistant Secretary*
TO ALL F. R. AGENTS.
FEDERAL RESERVE BOARD
WASHINGTON
X-3U39
June 13, 1922.
S U B J E C T : S u m m a r y o f R e p l i e s to Q u e s t i o n n a i r e o n
E x e r c i s e of Trust Powers b y N a t i o n a l B a n k s .
D e a r SirJ
U n d e r d a t e o f O c t o b e r 12, 1921, t h e F e d e r a l R e s e r v e
Board, through the Federal Reserve Banks, addressed t o all n a tional banks w h i c h had b e e n granted p e r m i s s i o n to act in fiduc i a r y capacities u n d e r the terms of S e c t i o n l l ( k ) of the F e d e r a l
R e s e r v e A c t , a q u e s t i o n n a i r e d e s i g n e d to e l i c i t i n f o r m a t i o n a s
to t h e d e g r e e o f s u c c e s s w h i c h t h e y w e r e a t t a i n i n g i n t h e o p e r a t i o n o f t h e i r t r u s t d e p a r t m e n t s a n d a s to t h e n a t u r e o f t h e
p r a c t i c a l a n d l e g a l d i f f i c u l t i e s , if a n y , w h i c h t h e y w e r e e n countering,
A summary of the replies r e c e i v e d to t h a t q u e s t i o n -
naire has b e e n prepared and published in pamphlet form and a
s u p p l y i s b e i n g s e n t to y o u u n d e r s e p a r a t e c o v e r .
It w i l l b e
a p p r e c i a t e d if y o u w i l l k i n d l y h a v e one of t h e s e p a m p h l e t s m a i l ed to each of the national banks in your district w h i c h has
been granted fiduciary powers.
Very truly yours,
Secretary,
TO CHAIRMEN OF ALL F.R.BANKS.
FEDERAL RESERVE BOARD
WASHINGTON
X-3UU0
June 13, 1922.
SUBJECT:
Estimates of Fiscal Agency Expenses for Six M o n t h s '
P e r i o d b e g i n n i n g J u l y 1 , 1J22.
Dear Sir:
T h e r e is t r a n s m i t t e d h e r e w i t h c o p y o f a l e t t e r r e c e i v e d
f r o m t h e U n d e r S e c r e t a r y o f t h e T r e a s u r y , w h i c h is s e l f - e x p l a n a t o r y .
Y o u a r e r e q u e s t e d at y o u r earliest c o n v e n i e n c e t o f o r w a r d to t h e
B o a r d , for its i n f o r m a t i o n and for t r a n s m i t t a l to the T r e a s u r y D e p a r t m e n t , a n e s t i m a t e , for the s i x m o n t h s ' p e r i o d b e g i n n i n g J u l y 1st
next, of reimbursable fiscal agency expenses, in a c c o r d a n c e w i t h the
terms of the enclosed letter, the Under Secretary's letter of
J u n e 6th, w h i c h w a s quoted to y u u in the B o a r d ' s c i r c u l a r letter
of June 8th (X-3^32), and the classification of objects of expenditure, as prescribed by the Comptroller General in Bulletin
N o . 1, d a t e d M a y 11, 1922, of the General A c c o u n t i n g Office, a
c o p y o f w h i c h is t r a n s m i t t e d h e r e w i t h .
Very truly yours,
G o v e r n o r .
(Enclosure)
GOVERNORS OF A L L F. R. B A M S
COPIES TO AGENTS.
COPY
X-3440a
TREASURY DEPARTMENT
WASHINGTON
June 12, ig22.
%
dear Governor:
R e f e r r i n g to y o u r circular l e t t e r o f M a y S, 1$22, a d d r e s s e d
to F e d e r a l R e s e r v e B a n k s o n t h e s u b j e c t o f r e i m b u r s e m e n t f o r f i s c a l
a g e n c y expenses, and supplementing m y letter of J u n e 6th on the same
s u b j e c t , it is r e q u e s t e d t h a t y o u s e c u r e f r o m e a c h F e d e r a l R e s e r v e
B a n k a n estimate of reimbursable fiscal agency expenses, a s defined
i n rry l e t t e r o f J u n e 6 t h , t h a t w i l l b e i n c u r r e d d u r i n g t h e s i x m o n t h s '
p e r i o d b e g i n n i n g J u l y i, n e x t ; s u c h e s t i m a t e s to b e c o m p i l e d u n d e r
t h r e e g e n e r a l h e a d i n g s : ( A ) T r e a s u r y ITotes a n d C e r t i f i c a t e s , ( B ) T r e a s u r y Savings Securities, and (C) Other Fiscal A g e n c y Expenses; w i t h
f u r t h e r s u b d i v i s i o n s in a c c o r d a n c e w i t h t h e c l a s s i f i c a t i o n o f o b j e c t s
of expenditure, a s prescribed by the Comptroller G e n e r a l in B u l l e t i n
N o . 1, d a t e d M a y 1 1 , 1 9 2 2 , o f t h e G e n e r a l A c c o u n t i n g O f f i c e . C o p i e s
o f t h i s b u l l e t i n a r e e n c l o s e d f o r t r a n s m i s s i o n to t h e F e d e r a l R e s e r v e
Banks,
In m y letter of J u n e 6th, I f a i l e d to state that as a general
rule the Treasury will not reimburse Federal R e s e r v e Banks for a n y
expenses incurred at Branches. In special circumstances, expenses
of h a n d l i n g issues of T r e a s u r y c e r t i f i c a t e s and n o t e s i n c u r r e d at
b r a n c h e s may b e reimbursed, but as regards other e x p e n s e s claims for
r e i m b u r s e m e n t w i l l not be e n t e r t a i n e d , except w i t h respect to t r a n s a c t i o n s c o n d u c t e d at t h e N e w O r l e a n s B r a n c h o f t h e F e d e r a l R e s e r v e
B a n k o f A t l a n t a , w h e r e t h e p r o c e d u r e ' h a s b e e n so l o n g e s t a b l i s h e d
that no change in p o l i c y w i l l b e m a d e .
In this c o n n e c t i o n y o u are
a d v i s e d that in response to inquiries F e d e r a l R e s e r v e Banks h a v e
b e e n a d v i s e d that the Department w i l l not object to g e n e r a l fiscal
a g e n c y t r a n s a c t i o n s b e i n g conducted at branches, b u t that such transactions mast be conducted for account of the parent b a n k .
I h o p e it w i l l b e p o s s i b l e t o s e c u r e t h e e s t i m a t e s a b o v e r e f e r r e d to w i t h i n t w o w e e k s 1 t i m e t h a t t h e a c c o u n t s i n v o l v e d m a y b e
established b e f o r e the b e g i n n i n g of the next fiscal y e a r .
By direction of the Secretary.
Very truly yours,
(Signed) S. P . Gilbert, Jr.
Honorable W, P. G. Harding
Governor, Federal Reserve Board.
12 enclosures
Under Secretary.
FEDERAL RESERVE BOARD
WASHINGTON
X-jUUi
J u n e 13, 1922.
SUBJECT:
Final Action B y B o a r d on Recorrmendations of
G o v e r n o r s C o n f e r e n c e , May 2-4, 1922.
Dear Sir:
The Federal Reserve Board has given careful
c o n s i d e r a t i o n to the m i n u t e s of the conference of
G o v e r n o r s of the Federal R e s e r v e B a n k s h e l d in W a s h i n g t o n o n M a y 2 - 4 , 192.2, a n d h a s a l r e a d y s e n t o u t c i r c u l a r
l e t t e r s m a k i n g effective, as rulings of the B o a r d ,
c e r t a i n r e c o m m e n d a t i o n s of the c o n f e r e n c e . T h e B o a r d
d o e s n o t d e e m it n e c e s s a r y t o m a k e f o r m a l r u l i n g s w i t h
r e s p e c t to other c o n c l u s i o n s r e a c h e d at the c o n f e r e n c e ,
a n d , w h i l e it r e s e r v e s t h e right,, u n d e r i t s g e n e r a l
p o w e r s o f r e g u l a t i o n , to m o d i f y o r a m e n d , a s a n d w h e n
o c c a s i o n m a y r e q u i r e , it h a s , b y a f o r m a l v o t e , e x p r e s s e d
its concurrence in all the v a r i o u s c o n c l u s i o n s r e a c h e d
b y t h e conference, a s set f o r t h in t h e m i n u t e s .
Very truly yours,
G o v e r n o r .
G O V E R N O R S O F A E L F . R . B A M E S (and Dep. G o v . Harrison o f U . Y . )
Copies to Agents.
FEDERAL RESERVE BOARD
WASHINGTON
X-3UU2
June 13, 1922.
SUBJECT:
Franking Privileges on Fiscal Agency Mail.
Dear Sir:
In c o n n e c t i o n w i t h the p r o p o s a l o f the TreasuryD e p a r t m e n t to r e i m b u r s e t h e F e d e r a l R e s e r v e B a n k s f o r f i s c a l
a g e n c y e x p e n s e s , t h e q u e s t i o n h a s "been r a i s e d a s t o w h e t h e r
t h e F e d e r a l R e s e r v e B a n k s w i l l b e p e r m i t t e d to f r a n k a l l
T r e a s u r y m a i l a f t e r J u l y 1, 1 9 2 2 , a s w a s d o n e p r i o r to the
absorption of fiscal agency expenses b y the Federal Reserve
Banks.
T h e f o l l o w i n g q u o t a t i o n is f r o m a l e t t e r r e c e i v e d
b y the Board from the Under Secretary of the Treasury to
whom the question was referred:
"It w i l l b e a p p r o p r i a t e f o r y o u t o a d v i s e
the F e d e r a l Reserve B a n k that the c o n t e m p l a t e d
a b s o r p t i o n b y the Treasury of certain, fiscal
a g e n c y e x p e n s e s a f t e r J u l y 1, n e x t , w i l l n o t
i n v o l v e a n y change in p o l i c y w i t h respect t o
the payment of postage, and if after that date
the Federal Reserve Banks incur postage charges
in connection w i t h items the expenses of w h i c h
will be reimbursed by the Treasury, such postage
charges of course will be absorbed b y the Treasu r y , So f a r a s t h e T r e a s u r y is c o n c e r n e d n o
f u r t h e r r e p r e s e n t a t i o n s w i l l b e m a d e to the Post
O f f i c e D e p a r t m e n t w i t h respect to the d i s p a t c h
of mail by Federal Reserve Banks without prepayment of postage, and accordingly, the a r r a n g e m e n t s
now in effect will be continued".
Very truly yours,
G o v e r n o r .
To Governors of all F.R.Banks.
X-3443
TREASURY B B P A R M E N T
Office of the S e c r e t a r y
v/ASHINGTON
1
i-v
June 9, 1922,
The Governor,
Federal Reserve Board.
Sir:
Y o u are advised that the Department has referred to the G e n e r a l Accounting O f f i c e , T r e a s u r y D e p a r t m e n t D i v i s i o n , f o r s e t t l e m e n t , the account of the
B u r e a u of E n g r a v i n g a n d P r i n t i n g f o r p r e p a r i n g F e d e r a l R e s e r v e n o t e s d u r i n g
t h e p e r i o d M a y 1 t o M a y 3 1 , 1 9 2 2 , a m o u n t i n g to $ 7 3 , 7 2 5 . 4 6 , a s f o l l o w s :
Federal Reserve Notes. 1914
A
New York
140,000
Cleveland ........ 101,000
86,000
Atlanta .......... 134,000
—
St t L o u i s . . . . . . . .
M i n n e a p o l i s ...... 4 1 , 0 0 0
Kansas City ...... 71,000
Dallas ...........
1,000
S a n F r a n c i s c o .... 1 8 6 . 0 0 0
760,000
£20
m
5,000
82,000
37,000
16,000
45,000
—
33,000
42,000
6,000
143,000
76,000
15,000
21,000
—
33,000
32,000
—
40.000
366,000
22,000
17,000
5,000
1,000
1,000
— —
—-
1,000
1,000
ww
"
—
2,000
1,000
1,000
49,000
1,000
4,000
—
48.000
308,000
1,487,000 sheets at $49.58
Total
$100
M
11,000
387,000
231,000
123,000
202,000
1,000
107,000
148,000
1,000
276.000
3,487,000
#73,725.46
The charges against the several F e d e r a l R e s e r v e B a n k s arc as follows:
Sheets
New York ....
Philadelphia.
C l e v e l a n d ..
R i c h m o n d ....
A t l a n t a .....
St. L o u i s ...
Minneapolis..
Kansas City..
Dallas ......
San Francisco
Comt>ensation
Plate
Printing
Materials
1 7 5 . 6 7 N> 1 3 4 . 3 1
1 1 , 0 0 0 $ 1 8 3 . 1 5 i1
t
,
4725. 27
,180. 39
6,443. 55
6
387 ,000
2 ,820. 5 1
3,846. 15
3 ,689. 0 7
231 ,000
1 ,501. 8 3
2 , 0 4 7 .9 5
1 2 3 ,000
1 ,964. 31
2 ,466. 4 2
2 0 2 ,000
3,363. 30
3 ,225. 9 4
12. 2 1
16. 65
15. 97
1 ,000
1 ,306. 4 7
1 ,708. 79
1,781. 55
107 ,000
2 ,363. 56
1 ,807. 0 8
2,464. 20
148 ,000
12. 21
15. 97
16. 65
1 ,000
3 ,389. 9 6
4.595.40
4 ,407. 7 2
27$ ,000
1,487,000 #24,758.55 $23,747.39 $18,156.27
I n c . Cornpensation
Total
52. 25 $ 5 4 5 . 38
1 , 8 3 8 . 2 5 19 , 1 8 7 . 4 6
1 , 0 9 7 . 2 5 1 1 ,452. 9 8
6 ,098. 34
584. 25
959. 50 1 0 ,015. 16
49. 58
4. 75
5 ,305. 0 6
508. 25
703. 00
7 ,337. 8 4
49. 58
4. 75
1 ,311. 0 0 1 3 ,684. 08
7,063.25 $73,725.46
$
The Bureau appropriations w i l l he reimbursed in the above amount fron
the indefinite a p p r o p r i a t i o n "Preparation a n d Issue of F e d e r a l R e s e r v e N o t e s
R e i m b u r s a b l e " , a n d it i s r e q u e s t e d t h a t y o u r B o a r d c a u s e s u c h i n d e f i n i t e
a p p r o p r i a t i o n to be reimbursed in like amount.
Respectfully,
Tifa. S . B r o u g h t o n ,
Commissioner.
X-3443a
TREASURY DEPARtMENT
O f f i c e of the S e c r e t a r y
WASHINGTON
June 9, 1922
The Governor,
Federal Reserve Board.
Sir:
Y o u are advised that the Department has referred to the General
Accounting Office, Treasury Department Division, for settlement, the
a c c o u n t o f t h e B u r e a u of E n g r a v i n g a n d P r i n t i n g f o r p r e p a r i n g F e d e r a l
Reserve notes during the p e r i o d M a y 1 to M a y 31, 1922, a m o u n t i n g to
$9.92 as follows:
Federal Reserve Notes 1918
01000
Philadelphia
2 0 0 sheets at $ 4 9 . 5 8 .... $ 9 . 9 2
The B u r e a u appropriations w i l l be reimbursed as follows from
the i n d e f i n i t e a p p r o p r i a t i o n " P r e p a r a t i o n a n d I s s u e of F e d e r a l R e s e r v e
N o t e s , R e i m b u r s a b l e " , a n d it i s r e q u e s t e d t h a t y o u r B o a r d c a u s e s u c h
indefinite a p p r o p r i a t i o n to b e reimbursed in like a m o u n t .
Compensation of Employes
Plate Printing
Materials & Miscellaneous Expenses
Increased Compensation
Respectfully
#3.33
3.20
2.44
95
09.92
Wm. S. Broughton,
Commissioner.
FEDERAL RESERVE BOARD
WASHINGTON
X-344U
June 15, 1922.
SUBJECT; Test Examinations of Paper Currency
p r e s e n t e d f o r Redeniption, M a y , i g 2 2 .
Dear Sir:
S e c t i o n 1 of the c u r r e n c y p l a n a p p r o v e d b y the
Treasury Department, the f e d e r a l R e s e r v e Board, and b y the
Governors of the F e d e r a l R e s e r v e Barks at their conference
h e l d in W a s h i n g t o n during May, 1922, p r o v i d e s that test
examinations of e a c h kind and denomination of p a p e r currency
presented for redemption by each Federal Reserve B a n k shall
b e m a d e under the general supervision of the T r e a s u r y and
F e d e r a l Reserve B o a r d Currency Committee, and that the res u l t s of s u c h e x a m i n a t i o n s s h a l l b e r e p o r t e d at t h e e n d of
each m o n t h to the Federal Reserve B o a r d for the i n f o r m a t i o n
and guidance of the Federal Reserve Banks in the effort
w h i c h is b e i n g m a d e t o a v o i d t h e d e s t r u c t i o n o f a n y a p p r e ciable n u m b e r of notes a c t u a l l y fit for f u r t h e r c i r c u l a t i o n .
T h e r e is e n c l o s e d h e r e w i t h a s t a t e m e n t s e t t i n g
forth the results of test examinations made of p a p e r currency
sent in for redemption b y each Federal Reserve B a n k and
B r a n c h d u r i n g the m o n t h of M a y , 1922. In d e t e r m i n i n g the
s t a n d a r d of f i t n e s s of the n o t e s examined, the test d e s c r i b ed in Section 1 of the currency plan w a s applied.
The Treasury Currency Committee has advised the
B o a r d that the figures given in the attached statement
p u r p o r t i n g to be the number of fit Federal R e s e r v e n o t e s
f o u n d in the f lredemptions of e a c h B a n k a n d B r a n c h d u r i n g
May should be reduced about one-fifth to a l l o w for the
fact that examinations of half notes were made to determ i n e the standard of fitness of Federal Reserve n o t e s
sent in for redemption.
Very truly yours,
(Enclosure)
Walter L, Eddy,
Assistant Secretary.
X-3444a
I N A C C O R D A N C E "7ITH T H E P R O V I S I O N S O F T H E C U R R E N C Y
PLAN ADOPTED AT THE GOVERNORS' CONFERENCE HELD IN
MAY, 1922, TEST EXAMINATIONS OF EACH KIND AND
EACH DENOMINATION OF PAPER CURRENCY PRESENTED FOR
REDEMPTION DURING THE MONTH OF MAY, 1922, HAVE
BEEN MADE UNDER THE SUPERVISION OF THE TREASURY
AND FEDERAL RESERVE BOARD CURRENCY COMMITTEE,AND
T H E R E S U L T S T H E R E O F A R E A S SHO'YN H E R E I N -
X-3444a
federal reserve bank of boston
p. s . currency ( H a l f N o t e s )
Denomination
Ones
No. Notes Examined
7,000
No. Fit Notes
1,989
of F i t N o t e s
28
F. R. B A N K N O T E S
No. Notes Examined
N o . Fit Notes
i>. o f F i t N o t e s
12,000
818
6.8
Twos
Fives
190
15
674
67
1,300
12,700
2,925
23
Tens
200
100
50
.Twenties . Total
100
9,600
3,010
57
31
57
12,100
1,138
24,100
1,956
8.1
9-4
FEDERAL RESERVE NOTES (Half Notes)
Denomination
. Fives
. Tens
No Notes Examined
15,900
15,800
No. Fit Notes
10,577
9,145
fo o f F i t N o t e s
66.5
57-8
NATIONAL BANK NOTES
No. Notes Examined
No. Fit Notes
of F i t N o t e s
1,000
11,200
907
•Twenties
Fifties
Hundreds.
5,620
36.7
3,000
238
7-9
Total
"47,000
15,300
25,342
53-9
180
36
30,0
130
10
7.6
27,210
4,ii6
15.1
FEDERAL RESERVE BANK OF NEW YORK
17. S . C U R R E N C Y ( H a l f N o t e s )
Denomination
Ones
No. Notes Examined
24,000
No - Fit N o t e s
7,007
$ of F i t N o t e s
29
F, R. B A N K N O T E S
No. Notes Examined
No. Fit Notes
fo of F i t N o t e s
19,500
. 790
4
Twos .
2,000
662
33
16,400
1,117
6.8
FEDERAL R E S E R V E N O T E S (Half N o t e s )
Denomination
, Fives .
Tens
No- N o t 3 5 E x a m i n e d
16,100
15,700
No. Fit Notes
10,517
9,370
of F i t N o t e s
63.8
58.1
NATIONAL BANK NOTES
No. Notes Examined
No- Fit N o t e s
;> of F i t N o t e s
t
16,000
2,511
16.0
17,900
1,523
8.8
Fives
T e n s .T w e n t i e s - T o t a l
2,500
1,009
40
400
132
260
46
§9,SCO
33
23
30
15,900
1,728
10.8
100
20
20
-
8,856
51,900
3,655
7-0
.Twenties .Fifties. Hundreds. Total
16,000
2,201
47,800
28,088
5S.7
51.2
12,500
711
5.6
1,500
281
18.7
2,309
50,209
393
17.0
5,539
11.0
V f'-.ltji
2
x-344Ua
FEDERAL P S E R V E BANK OF PHILADELPHIA
U. S. CURRENCY (Half N o t e s )
Denominat ion
Ones
No, Notes Examined
10,000
No, Fit Notes
3,776
fo o f F i t N o t e s
38
F. R. B A N K NOTES
No. Notes Examined
No, Fit Notes
% of Fit N o t e s
15,300
*4*7
2.9
.
Twos
1,000
240
24
10,400
FEDERAL RESERVE NOTES (Half Notes)
Denomination
Fives . Tens
No. Notes Examined
16,000
16,000
No, Fit Notes
10,763
9,383
io o f F i t N o t e s
58.6
67
NATIONAL BANK NOTES
No. Notes Examined
No. Fit Notes
<p o f F i t N o t e s
2,100
587
27.9
4,000
1,16C
29
.
Fives
500
350
70
Tens
100
6
6
-
. Twenties
14,700
7,634
51.9
1,225
132
10.7
—
. Twenties.
-
Total
11,600
4,372
38
25,700
2,160
8.4
Fifties . Hundreds . Total
46,700
27,780
59.4
60
8
13-3
1
24.0
7,4io
1,893
25.6
FEDERAL RESERVE BANK OF CLEVELAND
U. S. C U R R E N C Y ( H a l f N o t e s )
Denomination
. Ones
No. Notes Examined
10,000
No. Fit Notes
1,095
11
$ of Fit Notes
F. R. B A N K NOTES
No. Notes E x a m i n e d
No. Fit Notes
$ of Fit Notes
19,300
130
0.6
Twos
500
110
22
Fives
500
132
26
Tens
200
12,900
759
5.9
#00
20
2.2
800
133
l6.6
FEDERAL RESERVE NOTES (Half N o t e s )
Fives
. Tens
Denomination
11,100
No. Notes Examined
13,300
4,090
6,586
No. Fit Notes
36.8
fo o f F i t N o t e s
NATIONAL BANK NOTES
No. Notes Examined
No. Fit Notes
fo o f F i t N o t e s
25,200
2,156
8-5
12,800
2,053
16.0
. Twenties.
45
-
Total
11,200
1,427
13
33,900
1,042
3.1
. Twenties. Fifties . Hundreds. Total
33,200
8,800
16,237
5,561
48.9
63.I
13,100
828
6.3
300
25
8.3
6.8
51,458
5,066
9.8
X-3UUUa 7 ^ 6
3
FEDERAL RESERVE BANK O F RICHMOND.
U . S. C U R R E N C Y (Half N o t e s )
Denomination
Ones
10,000
No. Notes Examined
1,864
No. Fit Notes
$ of Fit Notes
19
F. R. B A N K NOTES
No. Notes Examined
No. Fit Notes
% of F i t N o t e s
10,100
112
1.1
Twos
1,000
383
38
2,400
134
5.5
FEDERAL R E S E R V E N O T E S (Half Notes)
Denomination
Fives
Tens
4,000
No. Notes Examined
3,100
No. Fit Notes
2,034
1,383
44.6
/o o f F i t N o t e s
50.8
NATIONAL BANK NOTES
No. Notes Examined
No. Fit Notes
fo o f F i t N o t e s
4,000
325
8.1
2,600
132
5.0
Fives
600
257
43
Tens
100
43
43
Twenties'
-
12,500
246
1.9
—
-
Twenties
2,900
2,125
73-3
400
55
13.7
Fif ties
-
Total
11,700
2,547
22
Hundreds
-
20
—
Total
10,000
5,545
55.4
7,020
512
7.3
FEDERAL p S E R V E B A ^ _ 0 F M & A N T A
U. S. CURRENCY (Half Notes)
Denomination
Ones
6,000
No. Notes Examined
No. Fit Notes
1,631
$ of F i t N o t e s
27
F. R. B A N K N O T E S
No. Notes Examined
No. Fit Notes
fi o f F i t N o t e s
29,900
1,774
> 9
Tvos
500
154
31
Fives
400
201
50
Tens
200
116
58
2,800
318
11-3
3,900
498
12.7
1,000
453
45.3
FEDERAL RESERVE NOTES (Half Notes)
Denomination
Fives
Tens
No. Notes Examined
16,300 1 2 , 0 0 0
4,228
No. Fit Notes
7,334
48.0
'p o f F i t N o t e s
35-2
Twenties
8,000
4,376
54.7
Fifties
Twenties
-
-
Hundreds
-
-
-
-
Total
7,100
2,102
30
37,600
3,043
8.1
Total
36,300
16,438
45.2
NATIONAL BANK NOTES
No. Notes Examined
No. Fit Notes
fo o f F i t N o t e s
17,S50
2,517
14.1
20,500
2,291
14.1
2,300
102
4.4
40,650
5,510
13-5
X-3444a
FEDERAL RESERVE BANK OF CHICAGO
U . S. C U R R E N C Y (Half N o t e s )
Denomination
. Ones
No. Notes Examined
9,000
No, Fit N o t e s
1,320
fo o f F i t N o t e s
15
F, E. B A N K NOTES
No. Notes Examined
No. Fit Notes
fo o f F i t N o t e s
12,200
98
0.8
Twos
600
119
20
a
13,900
FEDERAL R E S E R V E N O T E S (Half Not es)
Denomination
Tens
No, Notes Examined
16,000
15,900
No. Fit Notes
7,410
6,799
f of Fit Notes
46.6
42,4
NATIONAL BANK NOTES
No. Notes Examined
No. Fit Notes
fo o f F i t N o t e s
15,400
21,600
394
2.5
1,772
8.2
Fives
800
18
9
Tens
200
5,400
259
4,7
2,000
37
%
1.8
. Twenties. Total
10,100
100
29
1,555
15
29
1,900
585
30.7
35,400
1,740
5.0
. T w e n t i e si. F i f t i e s . H u n d r e d s . T o t a l
47,200
15,300
20,479
6,270
43.4
40.9
7,800
189
2.4
200
44
22.0
16
16.0
45,100
2,415
5-3
Twenties
100
61
61
Total
4,700
1,883
40
100
FEDERAL RESERVE B A N K OF ST. LOUIS
Twos
100
72
72
Fives
#00
322
80
Tens
100
71
71
F. R. B A N K NOTES
No. Notes Examined
No. Fit Notes
fo of F i t N o t e s
3,500
370
10.5
1,600
600
122
20.3
900
137
15.2
Fifties
Hundreds
17,200
1,077
6.2
(Half N o t e s )
Tens
Fives
8,000
8,000
4,769
3,156
59.6
39-4
NATIONAL BANE NOTTS
N o . N o t e s Exe.mined
No. Fit Notes
fo o f F i t N o t e s
19,600
4,286
21.3
A
I
1
Denomination
No, Notes E x a m i n e d
No. Fit Notes
f> o f F i t N o t e s
16,000
1,148
7.1
269
16.8
Tv:ent i a s
8,000
5,077
63.4
3,600
628
17.4
100
15
15
23,800
1,975
8.3
!
U . S. C U R R E N C Y ( H a l f N o t e s )
Denomination
Ones
No. Notes Examined
4,000
No. Fit Notes
1,357
fo o f F i t N o t e s
34
20
0
0
Total
24,000
13,002
54.2
39,320
6,077
15.4
I ' - p
X-3444a
5
P D E M L RESERVE
OF MINNEAPOLIS
'
U. S. CURRENCY (Half Notes)
Denomination
Ones
No. Notes Examined
2,200
No, Fit Notes
763
fo o f F i t N o t e s
34
P. R. BANK NOTES
No, Notes Examined
No. Fit Notes
1"o o f F i t N o t e s
9,000
8U9
9-4
Twos
100
30
30
3,500
433
12.3
FEDERAL RESERVE NOTES (Half Notes)
Denomination
Fives
Tens
No* Notes Examined
1 2 , 0 0 0 11,800
N o . Fit Notes
6,096
5,687
fo o f F i t N o t e s 1
48.1
50.s
NATIONAL BANK NOTES
No. Notes Examined
No, Fit Notes
•fo o f F i t N o t e s
8,500
736
8.6
11,000
Fives
300
157
, 52
1,300
47
3-6
Twenties
5,900
3,704
62.7
Tens
Twenties
200
14,000
1,33S
9.5
-
4
Fifties
Hundreds
"
1,700
210
12.3
Total
29,700
15,487
52.1
21,200
1,619
7.6
-
-
Total
2,600
950
37
FEDERAL RESERVE BANK OF KANSAS CITY
U. S. C U R R E N C Y (Half N o t e s )
Denomination
Ones
No. Notes Examined
2,000
No. Fit Notes
887
% of Fit N o t e s
44
F. R. B A N K N O T E S
No, Notes Examined
No. Fit Notes
/3 o f F i t N o t e s
12,000
384
3.2
Twos
100
45
45
Fives
100
50
50
Tens
3,200
271
8.4
500
0
0.0
100
3
3
FEDERAL R E S E R V E NOTES (Half Notes)
Denomination
Fives
Tens
No. Notes Examined
12,000
7,900
No. Fit Notes
1,74s
3,855
22.1
$ of Fit N o t e s
32.1
NATIONAL B M K NOTES
No. Notes Examined
No. Fit Notes
fo o f F i t N o t e s
19,400
2,080
10.7
1
23,000
2,848
12.3
Twenties
7,000
2,621
37.4
2,000
247
12,3
Fifties
100
30
30
Twenties
100
Total
2,300
1,047
46
15,800
658
4.2
Hundreds
50
0
0
Total
26,900
8,224
30.6
44,550
5,205
11.7
- '
'
•
6
;
X-34U4a
FEDERAL RESERVE BANK OF DALLAS
U . S. CURRENCY (Half N o t e s )
Denomination
Ones
No. Notes Examined
2,000
No. Fit Notes
609
c
jo o f F i t N o t e s
30
F. R. B A N K NOTES
No. Notes Examined
No. Fit N o t e s
C
P of Fit Notes
12,800
620
3.2
Twos
—
1,000
35
3-5
FEDERAL RESERVE NOTES (Half Notes)
Denomination
Fives
Tens
No. Notes Examined
12,000
3,000
No. Fit Notes
1,252
3,867
c
jo o f F i t N o t e s
41.9
32.2
NATIONAL BANK NOTES
No. Notes Examined
No-. F i t N o t e s
fo o f F i t N o t e s
20,000
2,476
12.3
20,300
3
; ^
Fives
200
60
30
Tens
300
8
2.6
200
22
11.0
Twenties
3,400
1,799
52.9
3,120
402
12.8
Twenties
—
Fifties
-
120
8
6.6
—
Hundreds
w
Total
2,200
669
30
20,300
625
3.8
Total
18,400
6,924
37.6
30
2
6.6
4},570
6,223
14.3
Twenties
Total
1,900
1,225
64
FEDERAL RESERVE BANK OF SAN FRANCISCO
(J. S . C U R R E N C Y ( H a l f N o t e s )
Denomination
Ones
N o . N o t e s Exsimined
1,800
No. Fit Notes
1,153
64
of F i t N o t e s
F. R. B A N K NOTES
No. Notes Examined
Not. F i t N o t e s
*jo o f F i t N o t e s
21,700
7,829
36.0
Twos
-
10,600
4,170
39-3
FEDERAL RESERVE NOTES (Half Notes)
Denomination
Fives
Tens
12,000
11,600
No. Notes Examined
No. Fit Notes
5,442
9,333
46.8
fo o f F i t N o t e s
77.7
Fives
100
72
72
Tens
2,100
453
21.5
500
60
12.0
-
Twenties
12,000
8,080
67.3
Fifties
15.900
2,174
13.6
574
140
24.3
-
-
34,900
12,512
35- 8
-
Total
35,600
22,855
64.2
100
7
7-0
72,974
14,124
19.3
Hundreds
NATIONAL BANK NOTES
Ifo. N o t e s E x a m i n e d
No. Fit Notes
'> o f F i t N o t e s
$
25,100
3,340
15.2
31,300
7,963
25.4
T
X-3Wte
FEDERAL RESERVE BANK OF NEW YORK
BUFFALO BRANCH
U. S. CURRENCY (Half N o t e s )
Denomination
Ones .
No, Notes Examined
2,000
No. Fit Notes
i4s
fo o f F i t N o t e s
7
F. R. B A N E NOTES
No. Notes Examined
No, Fit N o t e s
io o f F i t N o t e s
8,000
Ss
Twos
200
Go
30
11,900
654
5-5
FEDERAL R E S E R V E N O T E S fHalf N o t e s )
Denomination
Fives
Tens
No. Notes Examined
8,000
8,000
No. Fit Notes
5,829
3,559
fo o f F i t N o t e s 45-8
73-6
NATIONAL BANK NOTES
No. Notes Examined
No. Fit N o t e s
% of Fit Notes
8,000
6,000
105
980
1.3
16.3
Fives
100
33
33
-
Tens
100
24
24
Twenties
—
Twenties
8,000
3,293
4l.i
Fifties
3,900
100
42
42.0
46
1.1
—
Total
2,400
265
11
19,900
877
4.4
Hundreds Total
24,000
12,251
53.5
18,000
1,173
6.5
X-34UUk
fEDERAL RESERVE B A M _ O F CIEVELATO
CINCINNATI B R A N C H
U. S. C U R R E N C Y (Half
Denominat ion
No. Nooes Examined
No, Fit Notes
<?o o f F i t N o t e s
Notes)
Ones
5-.000
1,667
33
Twos
200
108
F. R. BANK NOTES
N o . Notes E x a m i n e d
N o . Fit N o t e s
$ of Fit Notes
9,000
4gi
5-4
2,000
lS
0,8
Fives
200
54
112
56
Tens
200
60
30
Twenties
100
39
39
Total
5,700
1,986
35
12,000
1,000
io4
10.4
611
51
FEDERAL RESERVE NOTES (Half N o t e s )
Denomination
Fi.vss
Parts
No. Notes Examined
No. Fit N o t e s
fo o f F i t N o t e s
11.900
5,345
44.9
12.000
7,994
NATIONAL BANK NOTES
No. Notes Examined
No. Fit Notes
fo o f F i t N o t e s
3,900
143
16,000
2,083
13.0
3-6
66,6
Twenties
Fifties
Hundreds
5,000
2,292
45.8
2,900
101
3'4
100
3
3-0
Total
28,900
15,631
5-3
50
0
0
22,950
2,330
10.1
Twenties
100
82
82
Total
2,700
846
31
PITTSBURG BRANCH
U . 5. C U R R E N C Y ( H a l f N o t e s )
Denomination
Ones
No. Notes Examined
2,000
No. Fit Notes
592
fo o f F i t N o t e s
30
F. R. B A N K N O T E S
No, Notes Examined
No. Fit Notes
fa o f F i t N o t e s
7,900
395
5.0
Twos
200
33
19
—
Fives
200
50
25
1,600
300
18.7
FEDERAL RESERVE NOTES (Half N o t e s )
Denomination
Fives
Tens
No. Notes Examined 1 6 , 3 0 0
15,900
No. Fit Notes
6,681
7,703
$ of Fit Notes
43.1
40.9
Twenties
15,500
8,577
56.1
NATIONAL BANK NOTES
No. Notes Examined 1 1 , 2 0 0
No. Fit Notes
1,327
i° o f F i t N o t e s
11.s
12,000
1,499
12.4
14,200
3,167
22.3
Tens
200
84
42
-
Fifties
400
10
2-5
9,500
695
7J
Hundreds
Total
43,000
23,261
48.4
150
13
8.6
37,950
6,oio
15.2
,-
<r
X-3UU4a
9
^
F E D E R A L K E S K R V E BAJfK O F R I C H M O N D
BALl'iMaUS B R A N C H
U . S . C U R R E N C Y ( H a l f Notes'!
Denominate on
One?
No. Botes Examined
2,000
No. Fit Notes
722
i> of F i t N o t e s
36
F. R. B A N K NOTFS
No. Notes Examined
No. Fit Notes
$ of Fit N o t e s
12,100
502
4.1
Twos
200
97
4s
4,100
218
5-3
FEDERAL R E S E R V E N0TT% (Half Notes)
Denomination
Fi~~
Tens
™~o,900
No. Notes Examined
4,500
No. Fit Notes
2,441
2,961
% of P i t N o t e s
54.2
Fives
Tens
200.
13
d
500
0.6
Twenties
1,400
451
32-2
300
170
56
700
SO
11.4
Fifties
Twenties
200
Total
2,900
116
5S
1,238
100
17,500
803
>3
4.6
Hundreds
Total
12,800
5,853
45.7
NATIONAL R A N K NOTES
No. N o t e s E x a m i n e d
No. Fit Notes
$ of F i t N o t e s
1,000
166
16.6
2,200
203
9.2
1,500
136
9-0
4,700
505
10.7
10
X-3444a
F E D E R A L R E S E R V E B A N K 05' A T L A N T A
NET ORLEANS BRANCH
U , S. C U R R E N C Y ( H a l f N o t e s 5
Denomination
Ones
No. Notes Examined
2,000
No. Fit Notes
345
fo o f F i t N o t e s
42
P* R . BANK" N O T E S
No. Notes Examined
N o . Fit Notes
of Fit Notes
4, SCO
7
0.1
Twos
200
%
6,100
623
10.2
F E D E R A L R E S E R V E NOTES (Half N o t e s )
Denomination
Fives
Tens
No. Notes Examined
12,100 15,900
N o . Fit N o t e s
6,735
9,534
fo o f F i t N o t e s
SO.2
55.0
NATIONAL BANK NOTES
No. Notes Examined
No, Fit Notes
/5 o f F i t N o t e s
7,700
820
11.4
7,900
930
11.7
Fives
200
106
53
Tens
200
117
53
-
Twenties
4,400
2,922
S7.7
2,200
365
lS.5
-
Twenties
10,700
63O
5-9
-
Fifties
-
Total
2,600
1,100
42
Hundreds
Total
32,400
19,351
59.7
17,800
2,175
12.2
-
NASHVILLE BRANCH
U. S. CURRENCY (Half Notes)
Denomination
Cnes
No. Notes Examined
2,000
No* Fit Notes
616
of Fit N o t e s
31
Twos
200
44
22
Fives
200
F . R . BABE" N O T E S
No. Notes Examined
No. Fit Notes
$ of Fit N o t e s
500
55
11.0
500
179
22.3
100
21
21.0
Twenties
300
201
67.O
Fifties
10,300
530
5-1
FEDERAL RESERVE NOTES(Half Notes)
Denomination
Fives
Tens
No. Notes Examined
1,400
600
No. Fit Notes
783
413
5s.3
'p of F i t N o t e s
56,2
NATIONAL BANK NOTES
No. Notes Examined
No. Fit Notes
% of Fit Notes
6,000
1,295
21.5
2,100
160
7.6
Tens
100
g
1,600
427
26.0
Twenties
%
-
-
Hundreds
-
Total
2,500
777
31
11,700
725
6.7
Total
2,300
1,402
60.9
9,700
1,332
19.4
11
X-3W4B
FEDERAL p S E R V E B M K _ O F ATLANTA
BRANCH
U. S. CURRENCY (Half Notes)
P ^nomination
Ones
Twos
No. Notas Examined
2,000
. 100
No.Fit Notes
422
24
f; of F i t N o t e s
21
24
Fives
100
27
27
F. R. B A N K NOTES
No, Notes Examined
No. Fit Notes
of Fit Notes
100
14
14.0
10,800
59$
5.5
1,000
128
12.8
F E D E R A L R E S E R V E NOTES (Half N o t e s )
Denomination
Fives
Tens
No. Notes Examined
4,000
3; 000
No. Fit Notes
1,500
-322
50 of F i t N o t e s
45.0
27.4
Twenties
2,200
1,011
45.9
NATIONAL BANK NOTES
No. Notes Examined 16,600
No, Fit Notes
2,084
rfo o f F i t N o t e s
12.5
3,500
190
5.4
8,800
552
6.1
Tens
Twenties
"
-
Fifties
Total
2,200
473
21
11,900
738
' 6.2
-
Hundreds
Total.
9,200
3,633
39-5
52
0
0
19
0
0
28,971
2,826
9-7
JACKSONVILLE BRANCH
U . S . C U R R E N C Y f H a l f Notts')
Denomination
Ones
No. Notes Examined
2,000
No. Fit Notes
678
$ of Fit Notes
34
Twos
200
53
31
F. R. BANK N O T E S
No. Notes Examined
No, Fit Notes
io o f F i t N o t e s
12,000
396
2.7
900
142
15.7
NATIONAL BANK NOTES
denomination
Fives
No. Notes Examined 15,100
No. Fit Notes
2,228
$ of Pit Notes
14.7
Tens
10,000
1,510
15.1
Fives
200
80
40
1,000
93
9-3
Twenties
4,000
330
8.2
Tens
-
Fifties
S4
20
31.2
Twenties
-
Hundreds
15
10
66.6
Total
2,400
821
34
13,900
561
4.0
Total
29,179
4,09s
14.0
12
X-3UUlfa
F$2)ERAL R E S E R V E B A N K O F C H I C A G O
DETROIT BRANCH
U . S. C U R R E N C Y (Half N o t e s )
Donominat ion
Ones
No. Notes Examined
2,000
No. Fit Notes
fo o f F i t N o t e s
15
F. R. BANK NOTES
No. Notes Examined
No. Fit Notes
/o o f F i t N o t e s
16,000
102
0.6
Twos
200
29
59
62
31
10,000
1S5
l.S
1,000
14
1.4
•
FEDERAL RESERVE NOTES (Half Notes)
Denomination
Fives
Tens
No. Notes Examined
8,000
7,900
No. Fit Notes
3,510
2,557
$ of Fit N o t e s
44.4
31.9
NATIONAL BANK NOTES
No. Notes Examined
N o . Fit N o t e s
$ of Fit Notes
9,200
I,071
II.6
Fives
200
5,000
I'i
Twenties
5,000
3,633
45.4
-
Tens
200
71
35
-
Twenties
100
67
67
-
Total
2,700
558
21
27,000
301
in
Fifties
200
22
11.0
Hundreds
-
Total
23,900
9,700
40.5
14,400
1,430
9-9
13
x-3444a
FEDERAL RESERVE BANK OF ST. LOUIS
MEMPHIS BRANCH
U. S. CURRENCY (Half Notes)
Denorainat i o n
Ones
N o . of N o t e s Examined.
2,000
No. Fit Notes
483
^ of Fit N o t e s
24
Twos
200
65
32
Fives
200
78
38
Tens
200
99
49
F . ,R. B A N K N O T E S
No. Notes Examined
No. Fit Notes
<0 o f Fit N o t e s
1,400
348
24.8
300
32
10.6
-
10,000
6lS
6.1
FEDERAL RESERVE NOTES (Half N o t e s )
Denomination
Fives
Tens
No. Notes Examined
8,000 7,200
No. Fit Notes
3,144 2,919
5® of F i t N o t e s
40.5
39.3
NATIONAL BANK NOTES
No. Notes Examined
N o . Fit N o t e s
£ of Fit Notes
Twenties Fifties
3,200
1,129
35.2
5,000
8,000
759
9-4
-
Hundreds
3,000
1,854
37-0
Twenties
-
707
Total
2,600
725
28
11,700
998
8.5
Total
18,400
7,192
39
16,000
3,320
20. Z
23.5
LOUISVILLE BRANCH
U . S. C U R R E N C Y (Half N o t e s )
Denomination
Ones
No. Notes Examined
2,000
No. Fit Notes
1,252
$ of Fit N o t e s
63
F. R. B A N K NOTES
No. Notes Examined
No. Fit Notes
io o f F i t N o t e s
NATIONAL BANK NOTES
Denomination
No. Notes Examined
No. Fit Notes
$ of Fit N o t e s
s
8,500
779
9.1
Twos
100
41
41
-
Fives
Tens
16,800 17,300
7,818 5,441
46.5
31.4
Fives
200
149
74
200
38
19
Twenties
6,500
2,316
35-6
.
Tens
200
179
89
-
Fifties
550
219
39.S
Twenties
200
188
94
-
Hundreds
Total
2,700
1,809
67
8*700
817
9-1
Total
41,265
lj
|
42.6
15,843
38.4
Ik
X-3UUUa
P M f J . RESERVE B A N K OF ST LOUIS
LITTLE ROCK BRANCH '
U. S. CURRENCY (Half N o t e s )
Denomination
Ones
No, Notes Examined
2,000
No, Fit Notes
446
fo o f F i t N o t e s
22
F , R . BANI: N O T E S
No. Notes Examined
No. Fit Notes
of Fit Notes
11,700
101
0,8
Twos
200
107
53
6,600
G
200
78
39
2,200
600
*3
Tens
100
Twenties
100
9.0
FEDERAL R E S E R V E NOTES (Half N o t - s )
Denomination
Fives
Tens
No. Notes Examined
4,oco
4,000
No, Fit Notes
2,200
2,529
£ of Fit Notes
64.7
55.0
NATIONAL BANK NOTES
No, Notes Examined
No, Fit Notes
fo o f F i t N o t e s
Fives
3, S00
328
3.7
-
-
54
Twenties
1,700
925
57.2
Fifties
-
2.8
Hundreds
-
Total
2,600
%
14,500
208
14-3
Total
9,700
5,774
59.5
17,700
695
3-9
15
X~jUU>4a
F E D E R A L P S E ' R V E B A N K OF M I N N E A P O L I S
HELENA BRANCH
U. S. CURRENCY (Half N o t e s )
Denomination
Ones
No, Notes Examined
1,000
No. Fit Notes
228
i of Fit Notes
23
F, R. B A N K NOTFS
No. N o t e s Examined.
No, Fit Notes
$ of Fit Notes
5,200
287
5-5
Twos
25
25
Fives
100
22
22
2,000
100
100
236
11.3
E ^ E R A L r f R E S E R V E NOTES (Half N o t e s )
denomination
No. N o t e s E x a m i n e d
4,000
2,000
No. Fit Notes
1,921
1,^55
% of F i t B o t e s
48.0
72.7
NATIONAL BANE NOTES
No. Notes E x a m i n e d
No, Fit Notes
jjfk-Gf F i t N o t e s
1,900
82
4-3
6
6
Tens
100
3
3
Twenties
100
14
14
Total
1,400
292
21
7,300
529
7.2
2,000
8,000
4,504
56.3
500
2,400
90
3-7
1,02S
51-4
8
1.6
16
X-3444a
FEDERAL RESERVE RANK OF KANSAS CITY
l"-V
OMAHA " b r a n c h
U . S . C U R R E N C Y ( H a l f Not. as1!
Denomination
Ones
No. Notes Examined
2,000
No, Fit Notes
121
fo o f F i t N o t e s
5
F. R. B A N K NOTES
No. Notes Examined
No. Fit Notes
tfo o f F i t N o t e s .
9,900
Twos
100
13
13
Fives
200
l3
Twenties
S
2,000
-
265
Tens
100
6
-
11,900
-
65
2.5
Total
2,400
147
330
2.5
3-2
NATIONAL I A N T NOTES
Denomination.
No. Notes Examined.
N o , F i t N o t e s ' ...
% of Fit Notes.
Fives
8,500
n
Tens
8,100
125
1-5
Twenties
2,900
9
0.3
Fifties
62
0
0
Hundreds
20
0
0
Total
2-3
DENVER BRANCH
U. S. CURRENCY (Half N o t a s )
Denomination
Ones
No, N o t e s E x a m i n e d
2,000
No. Fit Notes
705
$ of Fit N o t e s
35
Twos
100
57
67
Fives
300
145
4S
F. R. B A N K N O T E S
No. Notes Examined
No. Fit Notes
% of Fit N o t e s
2,100
236
11.2
11,700
16,300
1,375
S.4
FEDERAL RESERVE NOTES (Half Notes)
Denomination
Fives
Tens
No. Notes Examined
3,200
N o . Fit Notes
745
% of Fit N o t e s
23-3
NATIONAL BANK NOTES
No. Notes Examined
N o . Fit Notes
f= o f F i t N o t e s
10,300
5^3
5.4
8,000
955
11.9
Tens
-
Twenties
Total
2,400
91S
3s
30,100
—
665
2,276
5.6
7.5
Twenties
Fifties
Hundreds
2,200
1,243
56.5
Total
5,400
1,989
36.2
4,600
165
100
3-5
4.0
4
100
7
7.0
23,100
1,694
7.3
X-3444a
17
FEDERAL RESERVE EANE OF KANSAS CITY
C K t t i m A CITY BRANCH
U, S. CURRENCY (Half N o t e s )
Denomination
Ones
No. Notes Examined
2,000
No. Fit Notes
597
fo o f F i t N o t e s
30
F. R. B A N K NOTES
No. Notes Examined
N o . Fit Notes
& of Fit Notes
9,300
201
2.1
NATIONAL BANK NOTES
Denomination
Fives
No. Notes Examined
9,100
N o . Fit N o t e s
1,123
% o f Fit N o t e s
13.0
Twos
200
Ts
1,000
5.S
Tens
7,000
535
11.9
Fives
Tens
107
Twenties
100
60
53
So
3,900
554
14.4
2,500
901
36
15,000
4,700
1,006
21,4
Twenties
Total
1,265
o.U
Fifties
100
21
21.0
Hundreds
50
29
5S.0
Total
20,150
2,635
13.1
X-3444a
FEDERAL R E S E R V E B A N K OF DALLAS_
E L P-A30 B R A N C H
U, S. C U R R E N C Y (Half N o t e s )
Denomination
Ones
ITo. N o t e s E x a m i n e d
2,000
No. Fit Notes
7
.> o f F i t N o t e s
36
i
R. BANK NOTES
7,900
S i-Q, N o t e s E x a m i n e d
"•To. F i t N o t e s
98
1.2
% of Fit N o t e s
Twos
100
38
38
1,000
3,600
294
8.1
Tens
-
-
-
—
Twenties
-
148
14.8
F E D E R A L R E S E R V E N O T E S ( H a l f Notes)...
jj^.ves
fans
Denomination
No. Notes Examined
No. Fit Notes
—
fo of F i t N o t e s
NATIONAL BANK NOTES
No* N o t e s E x a m i n e d
¥0. F i t Notes
fo o f F i t N o t e s
Fives
100
31
31
3,800
624
16.4
Twenties
Fifties
—
—
700
ISO
164
23.4
0.0
Hundreds
-
20
1
5.0
Total
2,200
784
36
8,900
246
2.7
To tal
-
8,300
1,083
13.0
F E D E R A L R E S E R V E B.4NK O F M L L A S ,
HOaS'lGT B H A K C H
U . S . CURRENCY ( H a l f N o t e s )
Denomination
Ones
1,000
No, N o t e s E x a m i n e d
126
No. F i t N o t e s
c
13
:a o f F i t N o t e s
? . R . BANK NOTES
3o> N o t e s E x a m i n e d
% . Fit Notes
5 of F i t N o t e s
FEDERAL RESERVE NOTES
Denomination
;To. N o t e s E x a m i n e d
fo. F i t Notes
% of F i t N o t e s
ATI0NA.L BANK NOTES
'0. N o t e s E x a m i n e d
p. Fit Notes
' of F i t N o t e s
7,300
43
0.5
Twos
4,100
126
3-1
(Half Notes)
.fxves^
Tens
Fives
2
Twenties
7,600
2,900
10.8
9.8
823
Fifties
Hundreds
7,400
3,405
46.0
1,600
11,300
1,410
12.4
905
56.5
285
Total
1,000
126
13
11,500
173
15-2
2.0
1,800
35.0
Twenties
100
4,000
1,869
46.7
631
Tens
100
2
2.0
21,900
2,520
11.5
T-9
X-344Ua
! w
ITORA.L RESERVE BANK_0F SAN FRANCISCO
L O S .ANGELES B R A N C H ~
U . S. CURRENCY (Half Notes)
Denomination
Ones
Ho. Notes Examined
1,000
N o . Fit N o t e s
1+75
% of Fit Notes
I7
4
F. R. BANK NOTES
No. Notes Examined
No. Fit Notes
$ of Fit N o t e s
4,000
2^4
6.3
Twos
100
67
67
0,000
1,6^1
32.8
Tens
100
100
79
79
70
70
Twentie s
6,700
744
ll.l
12.1
10,000
3,327
33-2
Total
1,300
691
53
2,700
490
F E D E R A L R E S E R V E N O T E S (Half N o t e s )
Denomination
Fives
Tens
No. Notes Examined
8,000
6,800
No. Fit Notes
4,272
3,795
% o f Fit N o t e s
53-4
55.5
NATIONAL BANK NOTES
No. Notes Examined
N o . Fit N o t e s
% of F i t N o t e s
Fives
*
Twenties
8,000
Fifties
Hundreds
Total
22,800
10,736
47.1
7,400
1,283
17.3
400
8
100
3
22,900
6,262
27-3
Twenties
Total
2,400
1,148
48
2,666
33.3
2.0
3-0
PORTLAND BRANCH
U. S. CURRENCY fHalf N o t e s )
Denomination
Ones
No. Notes Examined
2,000
No. Fit Notes
942
$ of Fit Notes
47
Twos
200
81
40
Fives
200
125
62
$\ R . B A N K N O T E S
No. Notes Examined
N o . Fit Notes
io o f F i t N o t e s
1,400
194
13.8
100
9
9.0
4,900
768
15.6
F E D E R A L R E S E R V E NOTES (Half N o t e s )
Denomination
Fives
Tens
No. Notes Examined 12,000
9,700
No. Fit Notes
7,322
5,982
% of Fit N o t e s
49.8
75.4
NATIONAL BANK NOTES
No. Notes Examined
No. Fit Notes
i of Fit Notes
5,600
739
14.0
10,800
2,929
27.1
Twenties
11,400
8,133
71.3
1,700
281
16.5
Tens
-
Fifties
-
1,000
394
39-4
Hundreds
100
18
18.0
7,400
1,369
18.4
Total
33,100
21,437
64.7
18,200
4,017
22.0
'
20 .
X-3444a
EEDERA1 RESERVE BANK OF SAN FRANCISCO
SALT LAXE CITY BRANCH
U. S. CURRENCY (Half Notes)
Denominat ion
Ones
N o , N o t e s Examined.
1,900
N o . Fit N o t e s
870
fi o f F i t N o t e s
46
F. R. B A N K NOTES
No. Notes Examined
No. Fit Notes
i of Fit N o t e s
NATIONAL BANK NOTES
Denomination
No. Notes Examined
No. Fit Notes
fo o f F i t N o t e s
Twos
Fives
Tens
200
100
31
75
37
47
47
4,200
579
13-7
1,200
300
153
93
Fives
Tens
3,800
6,700
1,700
31
3.1
436
6.5
i£I
200
62
12.7
Twentie s
5,700
825
14.5
31.0
Twenties
Total
2,400
1,054
44
Fifties
28
9
32.1
Hundreds Total
12,235
7
2
28.5
795
6.5
SEATTLE BRANCH
U. S . C U R R E N C Y CHalf Not.as)
Denomination
Ones
No. Notes Examined
2,000
No. Fit Notes
S6l
fo o f F i t N o t e s
43
F. R. B A N K NOTES
N o . N o t as E x a m i n e d
N o . Fit N o t e s
fo o f F i t N o t e s
4,000
299
7.4
Twos
200
13
4
900
231
2,800
30c
23.S
53
29
-
Tens
100
97
97
-
Twenties
-
25.6
F E D E R A L R E S E R V E N O T E S ( H a l f Notes.)
Denomination
Fives
Tens
No. Notes Examined 15,900
13,400
N o . Fit Notes
8,517
8,561
fo o f F i t N o t e s
63.3
55-4
NATIONAL BANK NOTES
No. Notes Examined
N o . Fit Notes
fo o f F i t N o t e s
Fives
200
3,600
462
12.3
Twenties
15,400
H,54c
74.9
1,500
462
25.6
Fifties
105
43
40.9
Total
2,500
1,152
46
4,900
530
10.2
Hundreds Total
44,700
23,926
64.7
52.0
2,355
1,801
21.5
ifc. fc
•
21
"
F. R. BANX NOTES
No. Notes Examined
No. Fit Notes
$ of Fit N o t e s
b
11,400
3,299
23.9
Twos
'
3,600
597
19-3
Tens
Twenties
100
319
29
1,700
343
20.1
4,100
121
2.9
Total
1,100
42
42
F E D E R A L R E S E R V E NOTES (Half N o t e s )
Denomination
Fives
Tens
No. Notes Examined
1,600
3,300
No. Fit Notes
2,910
937
fo o f F i t N o t e s
76.5
53.5
NATIONAL BANK NOTES
No, Notes Examined
No. Fit Notes
fo o f F i t N o t e s
Fives
13,100
3,642
27.8
Twenties
1,700
1,259
74.6
V
-
X-3444a.
P D E R A L p S E H V E BANK OF SAN FRANCISCO
SPOKANE BRANCH
U. S. CURRENCY (Half N o t e s )
Denominat ion
Ones
No. Notes Examined
1,000
No. Fit N o t e s
277
$ of Fit Notes
28
I*-/
Fifties
Hundreds
Total
7,100
5,116
72
1,300
9,000
159
12.2
977
10.8
T
V
FEDERAL RESERVE BOARD
WASHINGTON
June 15, 1922.
f
CONFIDENTIAL
>
Dear Sir:
T h e B o a r d is i n f o r m e d t h a t t h e r e h a v e b e e n c a s e s
w h e r e communications to borrowers from the W a r F i n a n c e
C o r p o r a t i o n , c a l l i n g a t t e n t i o n to p a s t d u e p a p e r a n d
d e m a n d i n g payment or adjustment, h a v e b e e n sent out on
stationery of Federal Reserve Banks, thus giving the
i a g r e s s i o n t h a t t h e r e is s o m e d i r e c t c o n n e c t i o n b e t w e e n
the W a r F i n a n c e Corporation and the F e d e r a l R e s e r v e B a n k s .
W h i l e t h e B o a r d is, of c o u r s e , a n x i o u s t h a t F e d e r a l R e s e r v e B a n k s s h o u l d c o o p e r a t e w i t h the W a r F i n a n c e C o r p o r a t i o n i n a n y p r o p e r w a y a s p r o v i d e d b y l a w , it f e e l s t h a t
nothing should be done to give the impression that Federal
R e s e r v e B a n k s a r e c o n c e r n e d in f o r c i n g p a y m e n t o f l o a n s
m a d e b y t h e W a r F i n a n c e C o r p o r a t i o n , a n d it i s o f t h e
o p i n i o n that t h e u s e o f F e d e r a l R e s e r v e T a n k , s t a t i o n e r y
i n m a t t e r s w h i c h r e l a t e e n t i r e l y to t h e a f f a i r s o f t h e
War Finance Corporation should not be p e r m i t t e d .
It is s u g g e s t e d t h a t y o u l o o k i n t o t h i s m a t t e r
q u i e t l y and that y o u take s u c h steps as y o u m a y d e e m
p r o p e r to see that the letterheads and s t a t i o n e r y of
y o u r B a n k are not used in connection w i t h the w o r k o f
other corporations.
Very truly yours,
G o v e r n o r .
GOLD
Federal .
Reserve
Bank of
. Balance last
statement
June 8, 1922.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$
Istei
Federal
Reserve
Bank of
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louie
Minneapolis
Kansas City
Dallas
San Francisco
Total
13,962,715.35
164,902,076,63
51.135,825-36
44,401,343.30
34,856,432.79
23,268,194.58
70,272,612.45
15,417,898.19
23,937,895.10
26,037,106.03
13,065,079.89
27,919,971.76
FEDERAL RESERVE itiOARD
SETTLSMElTf FUND
Gold
Withdrawals
VWJMj-Xi
Aggregate
withdrawals
and transfers'
to Agent's fund
GtJld
Deposits
$
$
-
$
-
13,075,000.00
5,000,000.00
X-3446
$
13,075,000.00
1,000,000.00
1,000,000.00
1,000,000.00
5,000,000.00
3,000,000.00
1,000,000.00
l$_5QSjiJLi51.M_l*
L°°9_.999-°0-ll
i ^ 2 ^ o p o . p o _ l $ ^ _ i ^ o o o , 0 0 0 , 0 0 |$
SetiElements from June 9 , 1922 to June 1 5 , 1<
?22
Indus:
Lve.
$
-
84,378,430.52
4,637,409.02
$
$
Total
Debits
118,376,044.27 $
508,614,264.12
118,683,061.06
n
&.m
45,610,189.62
232,883,148.44
116,305,520.52
7,636,319-33
28,514,072.62
74,663,224.05
686,634.29
40,861,612.69
55.075,$02^89
97,338,793.16 $ 1,551,329,354.07
—
June lb. 1922.
$
5,000,000.00
1,210,000.00
Net
Debits
Aggregate
deposits and
transfers from
Agent's fund-
Total
Credits
126,689,002.41 $
424,235,833.60
130,876,212.13
112,953,158,63
102,834,755^8
52,070,637.84
272,183,859.80
108,669,201.19
35.466,977-93
83,100,739.88
40,174,978.40
——62,073,996r3g j
I 1.551,329,354.07 •
*
Net
Credits
,
8,312,958.14 *
12,193,151.07
8,682,709.14
6,460,448.22
39,300,711.36
6,952,905.31
8,437,515-83
6.008.XQU.OQ
97,338.793.16 v
$
T B A N £ F S H S
.
Debits
Credits
$ 1,000,000.00
6,000,000.00
43,000,000.00
3,000,000.00
1,000,000.00
9,000,000.00
6,000,000.00
1,210,000.00
9,000,000.00
1,000,000.00
4,000,000.00
5,000,000.00
4,000,000.00
12,000,000.00
1,000,000.00
2,246.500.00
3.000,000.00
2 6 , m • - 5 0 0 . 0 0 I*
Balance in
fund at close
df business
June 1 5 , 1922.
23,275,673.49
130,598.646.11
61,328,976.43
34,763,934.28
35.539.14X.93
23,728,642.80
105,783,325.81
13,781,578.86
26,890,800.41
29,474,621.86
8,378,445.60
28.l64.g6s.gfi
Seminary of c&axlges in owner*
ship of gold bj banks through :
r
transfers and i
lettlements.
$
521,708,651.43 1»
Decrease
47,378,430.52
4,637,409-02
7,636,319,33
$
• Increase
9,312,95*~#&
10,193,151.07
682,709.14
460,448.28
39,300,711.36
2,952,905.31
3,437,515.a3
4,686,634.29
2.001.605.01
66,340,399.07 $ 66,340,399^#
2
4
#
Y £
ffIS
D £ it v js ii u a a % a-
A Jj it
SnmmAyy of transactions for period ending June 15, 1922
Gold
Gold
Balance last
Federal
statement
Reserve
Deposits
Withdrawals
June 8, 1922.
Agent at
1$
-
(CONFIDENTIAL)
Total
Deposits
through
Withdrawals
transfers
from "bank
Withdrawals
for
transfers
to tank
1$
Boston
|$
118,000,000
hK
-
New York
|
401,000,000
|
|
141,389,260
j
Cleveland
j
145,000,000
|
Richmond
|
55,795,000
|
3,000,000
Atlanta
|
96,000,000
|
2,000,000
Chicago
|
337,644,500
|
6,000,000
|
10,000,000
I
St. Lpuis
|
47,300,000
j
1,000,000
1
500,000
1
Minneapolis
j
16,000,000
|
Kansas City
|
45,360,000
|
Dallas
j
10,000,000
179,086,000
|
-
j
San Franc!aco j
Deposits
1$
1$
1$
Total
X-3446a
Washington, D. C.
June 1 6 . 1922*
Balance at
close of
business
Jttne 15. 1922.
IS
-
Riiladelphia
r « « •"
Total
1$ 1,592,574,760
—
401,000,000
-
2,000,000
I
-
5,000,000
-
118,000,000
136,389,260
5,000,000
145,000,000
-
.
I
3,000,000
52,795,000
j
-
2,000,000
94,000,000
i
—
1
|
1,000,000
-
9,000,000
1
-
5,000,000
j
6,000,000
1
|
3,000,000
J
10,000,000
I
15,000,000
j
346,644,500
3,500fOOO 1
40,800,000
16,000,000
-
1
J
I
1
2,000,000
1
1,000,000
j
44,360,000
10,000,000
|$ 19,000,000
j
1,246,500
—
|$ 11,500,000
|$ 10,246,500
|$ 8,000,000
1,246,500
1$ 29,246,500
177,839,500
|$ 19,500,000
|$ 1,582,828,260
'•Wf
<E
FEDERAL RESERVE BOARD
WASHINGTON
X-3UU7
June 17, I922.
SUBJECT: Correspondence regarding Reimbursable
Fiscal Agency Iteas.
Dear Sir:
For your information, there is enclosed copy
of a letter from the Governor of the Federal Reserve Bank
of Boston, relating to the Treasury1 s instructions regarding reimbursable fiscal agency items, referred to in
Board1s letter X-3^32, together with copy of letter of
the Under Secretary commenting thereon.
Very truly yours,
G o v e r n o r .
(Enclosure)
GOVERNORS OF ALL F. R. BANKS
COPIES TO CHAIRMEN*
I 749
X-3Wf-a
T R E A S U R Y
C O P Y
D E P A R T M E N T
WASHINGTON
June 15, 1922
%
dear Governor:
I have your letter of June l4th, enclosing a letter from
Governor Morss of Boston, dated June 12, 1922, regarding reimbursable fiscal agency expenses at Federal Reserve Banks. The Governor
understands the Treasury's position with respect to reimbursable
items.
I agree with the Governor it would be very bad administra-
tion to set up an independent force, whose services are available
only on work the expenses of v l i h are reimbursable. However, as
fic
, suggested by the Governor, it would seem entirely feasible to set
up a reimbursable pay roll which will cover a proportionate part
of salary expenses.
It is exactly the same situation as exists
in many Treasury offices where more than one appropriation is
available for personal services, and in such instances the customary
procedure is the same as suggested by Governor Morss.
Very truly yours,
(Signed) S. P. GILBERT, JR.
Under Secretary.
Hon. W . P. G. Harding,
Governor, Federal Reserve Board.
f T'50
COPY
X-3U47b
FEDERAL RESERVE BANK
OF BOSTON
June 12, 1922.
Hon. W, p, 0, Haxding, Governor,
Federal Reserve Board,
Washington, D. C.
Dear Governor Haxding:
We have received your letter, X-)4)2, under date of June 8,1922 referring
to claims for Fiscal Agency reimbursement and note the instructions contained
in the quotations from the Treasury letter to the Federal Reserve Board* We
are in doubt as to the meaning of that portion of the Treasury letter which •
you quote referring to the exception from reimbursement of expenses incident
to "The redemption of matured securities for account of the Treasurer of the
United States".
It has seemed to us that the redemption of Government obligations constitutes
the more important part of the work of the Fiscal Agency Department inasmuch
as in the issue of new securities they are received from the Treasury and may
be delivered to the subscribers without any consideration on our part of the
authenticity of the instruments and the funds received in payment for them
from the subscribers are credited them in the account of the Treasurer of the
United States. When Government securities are redeemed at maturity or
otherwise on orders received from the Secretary of the Treasury, the reverse
operation takes place - we receive from the holders Government securities,we
Cancel and deliver them to the Treasurer of the United States and charge the
account of the Treasurer of the United States with the amounts redeemed.
In the case of redemption, however, there is the added duty of examining the
securities for their authenticity and the compliance with the various instructions of the Secretary of the Treasury regarding^ lost, stolen securities,
etc.
For purposes of securing economy of administration irrespective of whether
the costs were ultimately reimbursable or not, we have conducted the issue
and exchange of Government securities in the same department, using the
clerical force interchangeably as the exigencies of the situations required.
Referring to a recent communication from the Federal Reserve Board requesting
a list of salaries, it was specified that such list should include only
those persons whose time was entirely devoted to Fiscal Agency work. Should
that be the basis for reimbursing us for Fiscal Agency expenses under the new
ruling by which it appears that we are to be reimbursed only for expenses of
issue, we feel that it would result in a lack of economy in administration.
X-3447-b
W e w o u l d a p p r e c i a t e it i f y o u w o u l d a d v i s e u s
(1) I f w e c o r r e c t l y u n d e r s t a n d t h e T r e a s u r y ' s p o s i t i o n t h a t w e a r e t o b e
r e i m b u r s e d only for that p o r t i o n of the Fiscal A g e n c y e x p e n s e s r e l a t i n g to
issues and receive no reimbursement for expenses in connection with
redemption;
( 2 ) I f s u c h is t h e c a s e , w o u l d t h e T r e a s u r y c o n s i d e r h a v i n g a n u n d e r s t a n d i n g
w i t h u s a s to w h a t p o r t i o n o f t h e g r o s s e x p e n s e i n c l u d i n g b o t h i s s u e a n d
r e d e m p t i o n t h e y w o u l d b e w i l l i n g to a s s u m e a s t h e i s s u e e x p e n s e , t h u s p r e v e n t i n g
the n e c e s s i t y of a c t u a l l y setting a s i d e a force of e m p l o y e e s engaged in the issue
division exclusively w h o s e services could not be u s e d for the p u r p o s e s o f
r e d e m p t i o n without our foregoing all reimbursement for their services in
c o n n e c t i o n w i t h the i s s u e of securities.
Yours very truly,
(Signed)
Charles A, Morss,
Governor.
I
FEDERAL RESERVE BOARD
WASHINGTON
i
X-3W+S
v
June 19, 1922.
SUBJECT:
Expense
Main Line, Leased Wire System, May, 1922.
Dear Sir:
Enclosed herewith you. will find two mi^aegraph
statements, X-»)448a and X-jWgb, covering in detail operations of the main line, Leased Wire System, during the
month of May, 1922.
Please credit the amount payable by your bank in
the general account, Treasurer, U. S., on your books, and
issue C/D Form 1, National Banks, for account of "Salaries
a n d Expenses, Federal Reserve Board, Special Fund", Leased
Wire System, sending duplicate C/D to Federal Reserve Board.
Very truly yours,
Fiscal Agent.
(Enclosures)
&
F
r & .
X-344Sa
REPORT S H O W I N G C L A S S I F I C A T I O N A N D N U M B E R O F W O R D S
TRANSMITTED OVER M A I N LINE OF THE FEDERAL RESERVE
L E A S E D W I R E SYSTEM F O R THE M O N T H O F MAY, 1922-
From
Bank Business
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St- L o u i s
Minneapolis
Kansas City
Dallas
San Francisco
32,403
214,507
56,32S
81,199
m
136,51s
84,080
44,782
88,443
65,148
132,188
Total F. R .
Banks
1,074,428
Washington
312,664
Grand Total
P e r c e n t of
Total Bank
Business
3*02
19.96
5.24
7.56
6.66
6.26
12.71
91
37,716
6,826
4,472
4,818
97
85,768
' $
67
103
74,487
142,848
89,786
49,733
94,709
68,213
lki'845
9,000
6,863
3
79,610
4,329
1,800
1,151,376
100.00
72,619
80,910
153,529
6,129
1,546,750
4$i"""-a
5,222
12.10
8.23
6.06
8 9 • 6Sfo
FEDERAL RESERVE BOARD
W A S H I N G T O N , D . C.
JUNE 19, 1922.
y/ar
Finance Corp.
Business
Total
6,263
5,603
4,951
6,049
2,961
.9,591
7 83
4.17
1,387,092
Percent of Total
Treasury
Dept.
Business
9.92f,
217
104
££
0.40^
.. %
.
m
REPORT OF EXPENSE
MAIN LINE
FEDERAL RESERVE LEASED WIRE SYSTEM? MAY, 1922.
Name of B a n k
Operators'
Salaries
Boston
$ 250.00
New York
789-98
Philadelphia
225.OO
Cleveland
366.00
Richmond
305.00
Atlanta
240.00
Chicago
(#)5,054-55
St. Louis
300.00
Minneapolis
275-00
Kansas City
326.64
Dallas
170.00
San Francisco
395.00
Operators'
Overtime
$
20.00
-
-
-
-
. -
—
-
(#)
(&)
(*)
(a)
-
$8,697.17
$
$
250.00
809-93
225.00
366.00
305.00
240.00
5,058.55
300-00
275-00
359.54
-
62.90
-
-
-
170.00
—
395-00
$17,576.
$
86.90
715.67
4.730.08
1,241-77
1,791.56
1,578.27
1,483-48
3,011.99
1,855.54
988.20
1,950.33
1.436.09
2,914.83
250.00
809-98
225.00
366.00
305,00
240.00
5,058-55
300-00
275-00
359-54
170.00
395-00
P a y a b l e to
Federal
Reserve
Board
$
465.67
3,920.10
1,016.77
1,425.56
1,273-27
l,243.4s
2,046-56 (*)
1,555.54
713-20
1,560.79
1,266.09
2,519.33
17,576.78
$26,360.85
(a) 2 6 6 3 , 0 4
$23,697.81
$23,697.81
$8,784.07
$16,960.30
(&) 2 , 0 4 6 . 5 6
$14,913.74
Includes salaries of W a s h i n g t o n Operators
A m o u n t r e i m b u r s a b l e to C h i c a g o
Credit
Received $2,483-94 from Treasury Dept. and $179-10 from War Finance Corporation covering
b u s i n e s s f o r m o n t h s of N o v e m b e r 1 9 2 1 a n d A p r i l 1 9 2 2 , r e s p e c t i v e l y .
FEDERAL RESERVE BOARD
V
—
Credits
-
Fed.Res.Board
I
Total
—
Total
Expense
Pro rata
S h a r e of
Total
Expense
$
Wire
Rental
-
4.00
X~344gb
W A S H I N G T O N , D . C.
JUNE 19, 1922.
FEDERAL RESERVE BOARD
WASHINGTON
X-3449
June 21, 1922.
SUBJECT: ASSESSMENT FOB GENERAL EXPENSES OF THE FEDERAL RESERVE BOARD,
JUNE 30 TO DECEMBER 51, 1922.
Dear Sir:
There is enclosed, herewith for your information and attention
copy of a resolution adopted toy the Federal Reserve Board at a meeting
held on June 20, 1922, levying an assessment upon the several Federal
Reserve Banks of an amount equal to one hundred twenty-two thousandths
of one per cent (.00122) of the total paid-in capital stock and surplus
of such hanks to defray the estimated general expenses of the Federal
Reserve Board from June 30 to December 31, 1922.
There is also enclosed a statement showing the basis
which the assessment is levied.
upon
The assessment should be computed upon your paid-in capital
mid surplus, including super-surplus, as of the close of business
June 20, 1922.
I have the honor to request that you bring this matter to
the early attention of the Board of Directors of your bank,and deposit
one-half of the amount of your assessment in the General Account,
Treasurer, U. S., on your books on July 1, 1922, and one-half on September 1, 1922, in each instance issuing a C/B on Form 1,National Banks,
for credit of "Salaries and Expenses, Federal Reserve Board, Special
Fund", assessment for general expenses.
Kindly send duplicate C/D to the undersigned, together with
a statement of your capital and surplus used as a basis for the assessment .
Very truly yours.
Enclosures.
To Chairmen All. F.'R.Ba-iks.
Fiscal Agent.
X-3449a
EESOLUTION LEVYING ASSESSMENT
Whereas, under Section 10 of the act approved
December 23, 1913,and known as the Federal Reserve Act,
the Federal Reserve Board is empowered to levy semiannually upon the Federal Be serve Banks in proportion to
their capital stock and surplus an assessment sufficient
to pay its estimated expenses, including the salaries of
its members ,as s 1st ant s, attorneys, expert s, and employees
for the half year succeeding the levying of such assessment .together with any deficit carried forward from the
preceding half year; and
Whereas, it appears from estimates submitted
and considered that it is necessary that a fund equal
to one hundred twenty-two thousandths of one per cent
(.00122) of the total paid-in capital stock and surplus
of the Federal Reserve Banks be created for the purpose
hereinbefore described, exclusive of the cost of engraving and printing of Federal Reserve notes;
Now,
therefore,
Be it resolved, That pursuant to the authority vested in it by law, the Federal Reserve Board hereby levies an assessment upon the several Federal Reserve
Banks of an amount equal to one hundred twenty-two
thousandths of one per cent (.00122) of the total paidin capital and surplus of such banks as of June 30,1922,
and the Fiscal Agent of the Board is hereby authorized
to collect from said banks such assessment and execute,
in the name of the Board, receipts for payments made.
Such assessment will be collected in two installments
of one-half each; the first installment to be paid on
July 1, 1922, and the second half on September 1, 1922.
«
;
X-3449b
ESTIMATE POR JUNE 1922 ASSESSMENT
1
Average monthly encumbrance for period
January 1, 1922, to June 30, 1922:
Personal services
Mon-personal services.
* $ 4 7 ,725
14.782
$ 62,507
Estimated monthly requirements,
June to December, 1922:
Personal services
Non-personal services. .
•
•
51,800
17.675
Estimated monthly increase
Total estimated requirements,
June to December, 1922, inclusive
Estimated unencumbered balance, June 30, 1922 .
69,475
6,968
416*850
. 26,000
Amount to be raised by assessment, . . . .
390,850
Estimated paid-in capital and surplus of
Federal Reserve Banks as of June 30, 1922 .
320,300,000
An assessment of one hundred twenty-two thousandths
of one per cent (.00122) will produce, . .
390,766
R A T I O OF D I S C O U N T E D BILLS HELD BY F E D E R A L R E S E R V E BANKS T O T H E I R D E P O S I T L I A B I L I T I E S
TOGETHER W I T H THEIR R E S E R V E PERCENTAGES AS O F JUNE l4, 1922.
X-)4^0
( A m o u n t s i n t h o u s a n d s of d o l l a r s )
Member
banks1
reserve
deposits
Boston
129,400
20,278
R a t i o of d i s counted bills
to t o t a l
deposits
(Percent)
15.7
New York
765,140
42,737
5.6
732,835
5.8
1
84.4
Philadelphia
112,916
41,854
37.1
107,305
39-0
8
78.5
Cleveland
148,865
40,834
27.4
141,053
28.9
4
69.2
Richmond
62,121
42,009
67.6
55,175
76.1
12
75*8
Atlanta
53,610
29,955
55*9
48,052
62.3
10
83.9
Chicago
267,656
56,697
21,2
256,592
22.1
3
79.9
St. Louis
67,849
18,695
27.6
64,527
29,0
5
66.5
Minneapolis
49,509
24,682
49.9
45,561
54.2
9
69.7
Kansas City
80,163
22,572
28.2
76,999
29.3
6
65.9
Dallas
49,216
31,280
63.6
46,290
67.6
11
64.9
San Francisco
142,591
42,024
29.5
121,201
34,7
7
70.9
TOTAL
1,929,036
413,617
21.4
1,821,450
22,7
Federal
Reserve
L a n k of
Total
deposits
FEDERAL RESERVE BOARD .
Discounted
bills
125,860
R a t i o of d i s c o u n t e d b i l l s to
member bank reserve deposits
(Percent)
16.1
DIVISION OF BANK OPERATIONS,
Rank
Reserve
percentages
2
69.1
77.4
JUNE 22., 1922.
R A T I O O F D I S C O U N T E D BILLS H E L D B Y F E D E R A L RESERVE BANKS TO THEIR D E P O S I T LIABILITIES
TOGETHER WITH THEIR RESERVE PERCENTAGES AS OF JUNE 21, 1922.
X-3U5I
(Amounts in t h o u s a n d s of d o l l a r s )
Boston
124,359
23,773
Ratio of d i s counted bills
to t o t a l
deposits
(Percent)
19.1
N^w York
729,613
33,1-93
4.6
718,106
Phil adelphia
109,637
44,176
4O»3
Cleveland
143A53
42,091
Richmond
56,156
Atlanta
Chicago
Federal
Reserve
B a n k of
Total
deposits
Discounted
bills
Member
banks'
reserve
deposits
Ratio of discounted bills
to m e m b e r b a n k
reserve deposits
(Percent)
19.2
Rank
Reserve
percentages
2
72.2
4.7
1
87.9
108,256
40.8
8
80.7
29.4
l4l,485
29-7
6
69
40,553
72.2
55-,095
73.6
11
75-5
51,160
30,885
60.4
49,736
62.1
10
83,0
251,85S
60,002
23.8
249,273
24.1
3
81.3
St. Louis
72,615
18,947
26.1
71,085
26.7
5
68.4
Minneapolis
46,324
26,729
57-7
45,224
59,1
9
70.3
Kansas City
82,762
21,147
25.6
80,884
26.1
4
64.5
Dallas
45,230
32,904
72.7
44,238
74.4
12
61.8
San Francisco
141,532
46,763
33.0
125,010
37*4
7
70.2
TOTAL
l,254,399
421,568
22.7
1,812,010
23-3
FEDERAL RESERVE BOARD,
DIVISION OF BANK OPERATIONS,
JUNE 22, 1922.
123,618
7
79.1
GOLD
FEDERAL RESERVE BOARD
S E T T L E M E N T
F U N D
Summary of transactions for period ending June 22, IS122.
Gold
Gold
Balance last
Federal
statement
Reserve
Deposits
Withdrawals
June 15, 1922.
Bank of
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
$
23,275,673.49 $
130,598,646.11
61,328,976.43
34,763,934.28
35,539,141.93
23,728,642.80
105,783,323.81
13,781,578.86
26,890,800.41
29,474,621.86
8,378,445.60
28,164,865.85
$
Total
1$ 521,708,651.43 |$
1$
(CONF]
[DENTIAL)
Aggregate
Aggregate
deposits and
withdrawals
and transfers
transfers from
to Agent's fund
Agent's fund
$
14,500,000.00
2,000,000.00
$
5,000,000.00
$
Net
Debits
92,970,925-64
330,648.24
14,500,000.00 -
June 23, 1922.
i
T R A N £ FEBS
$
2,000,000.00
Debits
5,000,000.00 $
Credits
™
67,000,000.00
14,000,000.00
1,000,000.00
7,000,000.00
7,000,000.00
29,000,000.00
4,000,000.00
100,000.00
100,000.00
4,423,000.00
750,000.00
17,350+000.00 |$
13,000,000.00 |$
Total
Total
Debits
Credits
$126,080,201.95
111,456 , 5 6 3 . 7 6
425,088,988-99
518,059 ,914.63
1W,033,55&.#
138,522 ,395.85
122,144 ,874.34
134,083,720*67
106,912,538-20
114,001,367.00
43,280 ,316.85
48,596,293.92
243,940 ,727.05
271,512,536.27
101,052,956.53
106,301,315.78
29,848 ,320.09
32,505.037.83
76,667 , 0 . 2
786
86,106,763.20
40,826 ,186.10
42,733,372.21
54,059,676.43
5%,390 ,324.67
93,301,573-88 $1,587,102,826.69
$ 1,587,102,836.69 $
Net.
Credits
14,623,638.19
5,511,156.59
11,938,846.33
7,088,828.80
5,315.977.07
29,571,809*22
5,248,359.25
2,656,717.74
9,439,054.58
1,907,186.11
93,301,573.88 $
6,000,000.00
3,000,000.00
4,000,000.00
Settlements from June 16, 1922 to June 22, .1922
inclusive.
Federal
Reserve
Bank of
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St . Lewis
Minneapolis
Kansas City
Dallas
San Francisco
Total
X-3U52
21,023,000.00 |$
Balance in
fund at close
of business
June 22, 1922.
32,899 ,311-68
119,127 ,720.47
47,840 ,133.02
47,702 ,780,61
35,627 ,970.73
22,044 ,619.87
106,355 ,133.03
21,029 , 9 3 3 . 1 1
26,547
30,913
9,385 , 6 3 1 . 7 1
30,257 ,217.61
529,731,651.43 $
6,000,000.00
2,000,000.00
1,000,000.00
2,000,000.00
75,000,000.00 |$ 75,000,000.00
Summary of changes in ownership of gold "by banks through
transfers and settlements.
Decrease
$
I M S
1,684,022.93
343,282.26
Increase
9,623,638.19
10,938,846.33
88,828.80
571,809.22
11,248,359.25
5,439,054.58
2,330,648.24
907,186.11
38,817,722.48 $ 38,817,722.4^
O
F E D S B A L
B E S E R V
A G E N T S *
FUND;
X-3452a
Stannary of transact lone for period, ending June 22. 1922«
Federal
Reserve
Agent at
Balance last
statement
June 15, 3.922.
Gold
Gold
Withdrawals
Deposits
Withdrawals
for
transfers
to bank
Boston
|$
118,000,000 It
1$
1$
New York
|
401,000,000
1
Deposits
through
transfers
from bank
(CONFIDENTIAL)
Total
Total
Withdrawals
Deposits
1
1
m
1
-
Philadelphia 1
136.589,260 I
Cleveland
1
145,000,000
Richmond
i
52,795,000 1
1
Atlanta
j
9^,000,000
I
Chicago
I
346,644,500 1
St. Louis
|
40,800,000 j
m
m
5,000,000
2,000,000
m
I
1
Kansas City
I
44,360,000
I
Dallas
t
10,000,000
1
San Francisco 1
177,839,500
1
7,000,000
1$
m
.
|t
118,000,000
1
-
1
401,000,000
5,000,000 1
141,389,260
1
145,000,000
1
52,795,000
.1
1
1
-
{
;
—
1
!
4,000,000
1
94,000,000
1
-
1
341,644,500
2,000,000
j
-
5,000,000
1
1
|
42,800,000
1
16,000,000
4,000,000 1
48,360,000
1
mm
4,000,000
1
•
..
-
1
1
-
It
j
1
16,000,000
j
-
1
'|
|$ 1,582,828,260 |$
»
-
it
1
5,000,000 1
Balance at
close of
business
June 22, 1922.
-
1$
I
-
Minneapolis
Total
1
Washington i D. C#
1
«
"
J
-
1
3,673,000
|
-
It
3,673,000
It
1
|
m
W
X
4,000,000
-
13,000,000 |t
1
.
V
1
10,000,000
3,673,000
\
1
- •
1
174.166,500
io,673;ooo
It
13,000,000
It 1,585455,260
m .
X-3453.
TREASURY 1EPAKBSZT
Office of the Secretary
WASHINGTON
June 20, 1922.
The Governor
Federal. Reserve Board.
Sir:
You are advised that the Department has r e f e r r e d to the General Accounting
Office, Treasury Department Division, for s e t t l e m e n t , t h e account of the Bureau
of Engraving and Printing for preparing Federal R e s e r v e notes during the period
June 1 to June 17, 1922, amounting to $41,944,66, as f o l l o w s :
Federal Reserve Notes 1914
New York
Philadelphia.. .. 74,000
Cleveland
.. 71,000
Atlanta
Minneapolis
.. 27,000
Kansas City .. .. 36,000
San Francisco .. 91.000
464,000
m
16,000
67,000
13,000
20,000
19,000
19,000
20,000
20.000
194,000
£50
44,000
55,000
21,000
2,000
5,000
15,000
33.000
175,000
Total
36,000
187,000
145,000
93,000
116,000
51,000
71,000
147.000
846,000
SiQO
— »
mmm*
2,000
6,000
—
— —
— —
—
1,000
1,000
—
—
—
2.000
11,000
1.000
2,000
846,000 sheets at *49.58 ..
The charges against the several Federal Reserve Banks are as follows:
Sheets
New York
Philadelphia
Cleveland
Richmond
Atlanta
.....
Minneapolis .......
Kansas City
San Francisco
Compen- Plate
sation Printing
Materials
36,000
599.40
574.92
439.56
187,000
3,113.55 2,986.39 2,283.27
145,000
2,414.25 2,315.65 1,770.45
93,000
1,548.45 1,485.21 1,135.53
116,000
1,931.40 1,852.52 1,416.36
51,000
849.15
814.47
622.71
71,000
1,182.15 1,133.87
866.91
147.000
2.447.55 2.347.59 1.794,87
846,000 |il4,085.9013,510.62 10,329.66
inc .Com- Total
sensation
171.00 $1,784.88
888.25
9,271.46
688.75
7,189.10
441.75
4,610.94
551.00
5,751.28
242,25
2,528.58
337.25
3,520.18
698.25
7.288.26
4,018.50 $41,944.68
The Bureau appropriations will be reimbursed in the above amount from the
indefinite appropriation "Preparation and Issue of Federal Reserve Notes, Reimbursable" , and it is requested that your Board cause such indefinite appropriation to be reimbursed in like amount.
Respectfully,
Wm, S. Broughton,
Commissioner.
FEDERAL RESERVE BOARD
WASHINGTON
X-3454
June 26, 1922.
SUBJECT:
D e f a c e m e n t of $100 F e d e r a l Reserve N o t e s .
Dear Sir:
T h e r e is enclosed, h e r e w i t h , f o r y o u r i n f o r m a t i o n ,
c o p y of a l e t t e r r e c e i v e d f r o m t h e U n d e r S e c r e t a r y o f t h e
T r e a s u r y , w h i c h is s e l f - e x p l a n a t o r y .
The Board concurs
in M r . G i l b e r t ' s v i e w that the a c t i o n r e c o m m e n d e d b y The
N a t i o n a l C o u n t e r f e i t D e t e c t o r is i n a d v i s a b l e a n d u n n e c e s s a r y .
Very truly yours,
G o v e r n o r .
(Enclosure)
TO T H E G O V E R N O R S OF ALL F E D E R A L R E S E R V E B A N K S
C o p i e s to F e d e r a l R e s e r v e A g e n t s .
X-3U54a
COPY
The U n d e r S e c r e t a r y of T h e T r e a s u r y
Washington
June 26, 1922.
M y dear Governor:
T h e J u n e , 1 9 2 2 , n u m b e r of T h e N a t i o n a l C o u n t e r f e i t D e t e c t o r , a
p u b l i c a t i o n d e v o t e d to d e s c r i p t i o n s a n d w a r n i n g s o f c o u n t e r f e i t i s s u e s ,
w h i c h is d i s t r i b u t e d to m a n y b a n k s a n d c o m m e r c i a l c o n c e r n s throughout
the country, described a n e w a n d dangerous counterfeit $100 Federal
R e s e r v e n o t e a n d a d v i s e d its s u b s c r i b e r s t o r e f u s e a n y $ 1 0 0 F e d e r a l
R e s e r v e n o t e e x c e p t w i t h t h e e n d o r s e m e n t t h e r e o n of t h e d e p o s i t o r o r
i n d i v i d u a l p r e s e n t i n g it*
S u b s e q u e n t l y this p u b l i c a t i o n a m e n a e d its
w a r n i n g c i r c u l a r ana. r e c o m m e n d e d t h a t s u b s c r i b e r s m a k e a m e m o r a n d u m of
the n a m e a n d a d d r e s s of all p e r s o n s p r e s e n t i n g a $ 1 0 0 F e d e r a l R e s e r v e
n o t e , t h i s m e m o r a n d u m to b e a t t a c h e d t o t h e n o t e .
The Secret S e r v i c e D i v i s i o n of the T r e a s u r y D e p a r t m e n t h a s e x a m i n e d t h i s c o u n t e r f e i t n o t e , a n d is o f t h e o p i n i o n t h a t b a n k e m p l o y e s
e x p e r i e n c e d in the h a n d l i n g of c u r r e n c y w i l l h a v e n o d i f f i c u l t y in d e tecting it, and that accordingly banks may safely accept $100 Federal Reserve n o t = s f r o m c u s t o m e r s w i t h o u t d e l a y i n g to m a k e a m e m o r a n d u m of their
names and addresses.
T h e o r i g i n a l r e c o m m e n d a t i o n of T h e N a t i o n a l C o u n t e r f e i t D e t e c t o r m a y l e a d , I f e a r , to a w i d e s p r e a d a n d c o n t i n u i n g d e f a c e m e n t of t h e c u r r e n c y , s i n c e a l l e n d o r s e d n o t e s vill h a v e t o b e d e s t r o y e d
a n d r e p l a c e d w i t h n s w n o t e s , w h i c h i n t u r n w i l l b e d e f a c e d . I n o r d e r to
m i n i m i z e t h i s d a n g e r a s f a r a s p o s s i b l e , I t h i n k it w o u l d b e a d v i s a b l e
f o r t h e F e d e r a l R e s e r v e B o a r d to n o t i f y t h e F e d e r a l R e s e r v e B a n k s , a n d ,
t h r o u g h t h e m , a l l m e m b e r b a n k s , t h a t it s t r o n g l y d i s a p p r o v e s of the e n dorsement of $100 Federal Reserve notes, as originally recommended by
the N a t i o n a l Counterfeit Detector, a n d believes further that the amenda t o r y r e c o m m e n d a t i o n o f t a k i n g c u s t o m e r s ' n a m e s a n d a d d r e s s e s is u n necessary.
Very truly yours,
( S i g n e d ) S. P . G i l b e r t , J r .
Under Secretary.
H o n . V/. P . G . H a r d i n g ,
Governor, Federal Reserve Board
W a s h i n g t o n , D . C.
X-3U55
i
F E D E R A L
R E S E R V E
B O A R D
STATEMENT FOR THE PRESS
For release in morning papers,
S u n d a y , J u l y 2, 1 9 2 2 .
CONDITION OF THE ACCEPTANCE MARKET
A c c o r d i n g to reports received by the F e d e r a l Reserve B o a r d
from the Federal Reserve Banks of the various districts, a general
i n c r e a s e is n o t i c e d i n m a n y d i s t r i c t s i n t h e v o l u m e o f a c c e p t a n c e s
executed throughout the entire reporting period.
The greatest in-
crease is r e p o r t e d b y the e a s t e r n d i s t r i c t s , w h i l e in some interior
a n d w e s t e r n districts the m a r k e t seems to b e w i t h o u t a n y important
change.
In D i s t r i c t s N o . 1 (Boston) a n d N o . 2 (New York), the
supply °f bills was larger than the demand, due to the p r e v a i l i n g
low rate of a c c e p t a n c e s .
D i s t r i c t N o . 2 (New Y o r k ) states that
"during the w e e k ended M a y 25 some dealers reported that for the
f i r s t t i m e i n s o m e m o n t h s t h e y w e r e a b l e to p u r c h a s e a l l o f t h e
N e w Y o r k acceptances they wished.
The supply reached its maxi-
m u m f o r t h e p e r i o d d u r i n g t h e w e e k e n d e d J u n e 2 , w h e n it w a s a b o u t
5 0 p e r cent greater t h a n the w e e k l y a v e r a g e since the e a r l y part
of the y e a r , w i t h the exception of the first h a l f of May."
District
N o . 1 ( B o s t o n ) a l s o r e p o r t s that the supply of b i l l s o f f e r e d increased during the month and exceeded the amount offered the previous month.
The v o l u m e of sales increased rapidly a s the season
progressed, and during the last w e e k of the period sales w e r e three
- 2 times a s large as during the first week*
X-3^55
In D i s t r i c t N o . 2 ( N e w
York), sales throughout the period were irregular.
Bills did not
move freely at t h e offered rates, a n d the m a r k e t was r a t h e r
sluggish.
offered.
T h e r a t e at t h e b e g i n n i n g w a s 3 i b i d a n d 3 ~ l / S
It i n c r e a s e d , h o w e v e r , t o w a r d s t h e m i d d l e of the p e r i o d
to 3 w 3 / 2 b i d a n d 3 i o f f e r e d , but d e c l i n e d t o w a r d s the e n d t o 3 &
b i d a n d 3 - l / S o f f e r e d , m a i n l y d u e to t h e i n c r e a s e in d e m a n d a n d
the p r e v a i l i n g easy m o n e y m a r k e t ,
An improvement, however, was
noticed during the last w e a k of the p e r i o d w h e n b i l l s of shorter
m a t u r i t i e s w e r e in g o o d d e m a n d .
In D i s t r i c t N o . 3 ( P h i l a d e l p h i a )
t h e v o l u m e o f a c c e p t a n ces e x e c u t e d b y d e a l e r s a v e r a g e d h i g h e r i n
this m o n t h t h a n in the three p r e c e d i n g p e r i o d s .
T h e a m o u n t of
a c c e p t a n c e s c r e a t e d by b a n k e r s s h o w s a l s o a c o n s i d e r a b l e i n c r e a s e .
"In t h i s D i s t r i c t t h e a m o u n t c r e a t e d b y t h e t w e l v e r e p o r t i n g b a n k s
h a s b e e n increasing over the past four m o n t h s .
The amounts exe-
c u t e d f o r t h e p r e c e d i n g m o n t h l y p e r i o d s w e r e as f o l l o w s :
June 10
May 10
April 10
March 10
$ 4,212,000
3,274,000
4,097,000
2,265,000 "
District No. 4 (Cleveland) reports a stagnant market and no changes
of importance.
The supply of bills was limited*
T h e d e m a n d w a s in
e x c e s s o f t h e s u p p l y , m a i n l y d u e to t h e l o w r a t e o f c a l l m o n e y .
T h e t e n d e n c y t o w a r d s l o w e r r a t e s w a s f e l t at t h e e n d o f t h e r e p o r t ing p e r i o d w h e n b i l l s m o v e d less f r e e l y .
In District N o . 7 (Chicago)
t h e u p w a r d t r e n d in t h e v o l u m e o f a c c e p t a n c e s w h i c h s t a r t e d i n A p r i l
c o n t i n u e d t h r o u g h o u t the e n t i r e p e r i o d o f M a y a n d b e g i n n i n g o f J u n e ,
X-3U55
- 3 ~
The report of District N o . 12 (San F r a n c i s c o ) indicates a slight
increase in the amount of acceptances bought in May, 1922, a s
compared w i t h April and a marked increase (32 per cent) in the
amount of bills accepted.
Purchases for foreign account continued to support to a large
e x t e n t t h e m a r k e t at t h e p r e s e n t lor: r a t e s i n t h e e a s t e r n d i s t r i c t s ,
especially in Districts No. 2 (New Y o r k ) and No. 1 (Boston).
Bills
based u p o n exports and imports increased in volume in several D i s tricts, w i t h the exception of District N o . 7 (Chicago), and District No. 11 (Dallas) w h i c h report
a r i s i n g out of f o r e i g n trade.
a decrease in acceptances
District No. 6 (Atlanta) however,
reports a n increase in the volume of f o r e i g n acceptances, a n d a
d e c r e a s e in t h e n u m b e r o f d o m e s t i c a c c e p t a n c e s .
M a t u r i t i e s ranging between 3 0 a n d SO days w e r e p r e f e r r e d in
the eastern districts.
District No. 7 (Chicago)
and District
No. 12 (San Francisco), however, indicate a preference for 9 0
day maturities.
District No. 7 (Chicago) reports the following
p e r c e n t a g e d i s t r i b u t i o n of m a t u r i t i e s :
30
60
90
ISO
days
days
days
days
12 per cent
53
11
D i s t r i c t N o . 12 (San F r a n c i s c o ) reports the d i s t r i b u t i o n of maturities
30
SO
90
120
days
days
days
days
M a y IS to J u n e 1 5
2 . 4 per cent
45.5
51.6
0.2
April 15 to May 15
I9.0 per cent
11.5
53.5
10.4
- U -
%
X-3U55
T h e b u l k o f a c c e p t a n c e s i n the v a r i o u s d i s t r i c t s w e r e b a s e d u p o n the
following commodities: sugar, cotton, meat products, oils, wool,
coffee, tobacco, rubber, ^lso dollar exchange.
The
:rates t h r o u g h -
out the period were as follows:
Bates on prime bills
Range during period
Offered Bid
Bid
ITo, 2
(Mew Y o r k )
30 day maturity
oO "
"
rt
50 0
120
l^O
ISO
No. 4
(Cleveland)
»
150
ISO
"
"
"
"
"
i
t
3-l/S
- 3&
ti
3%
3-l/S
i
t
i
t
"
"
"
"
"
IT
"
f
t
"
I
t
3i - 3-3/s
I!
t!
"
3-3/s
- 3i
"
"
3-3/S
- 3i
3-3/8
n"
- 3^
3% - 3-l/g
n
3&
n
3-l/S
3-3/S - 3i
3i - 3-3/S
3i - 3-l/S
3-3/S - 3*
3*
3-l/S
3l
"
"
"
30 day maturity
I
t
60 »
W
90 «
120
150
ISO
3-1/s
Offered
"
n
30 day maturity
60 "
"
90
"
"
120
No. 7
(Chicago)
11
,f
3f - 3-3/2
"
»
i
t
ti
Close
H
tt:
t!
"
11
11
11
3-1/5
It
- i
f
t
"
"
it
3-3/S
11
11
3i - 3-3/
3-l/S
3% - 3-3/S
3-l/S
3l - 3-3 /
3-l/S
3i - 3-3/S
3-l/S
tt
tl
I
I
t!
tl
I
t
t
t
3i - 3i
tl
3-1/s
- 3i
tl
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3i - 3i
fl
t
t
3-i/s
-3%
FEDERAL RESERVE BOARD
WASHINGTON
X-3456
J u n e 27, 1 9 2 2
SUBJECT;
Liability of Federal Reserve Banks on Government
"'arrants and. C h e c k s C a s h e d b y T h e m .
Dear Sir:
T h e U n d e r S e c r e t a r y o f the T r e a s u r y h a s s e n t t h e
B o a r d a copy of a l e t t e r h e h a s w r i t t e n the G o v e r n o r of one
of the F e d e r a l Reserve Banks on the subject of the l i a b i l i t y
of Federal Reserve Banks on Government warrants and checks
cashed b y them. For your information I quote the following
from the l e t t e r in question:
"The T r e a s u r y does not look to the F e d e r a l
R e s e r v e B a n k s a s indorsers or g u a r a n t o r s of w a r r a n t s
or checks d r a w n on the T r e a s u r e r w h i c h m a y b e cashed
b y the Federal Reserve Banks. The duties a n d functions of the F e d e r a l Reserve Banks, as d e p o s i t a r i e s
a n d f i s c a l a g e n t s of the U n i t e d S t a t e s , in r e s p e c t
to the payment of Government w a r r a n t s and checks are
s e t f o r t h in p a r a g r a p h s 3 5 - 3 8 o f T r e a s u r y D e p a r t m e n t
Circular N o . 1%6, as amended a n d supplemented M a y
15> 1 9 2 2 , a n d t h e T r e a s u r y h a s n o i n t e n t i o n o f h o l d ing the F e d e r a l R e s e r v e B a n k s to any l i a b i l i t y in
this connection b e y o n d the d i s c h a r g e of their duties
and responsibilities u n d e r the terms of the circular."
Very truly yours,
G o v e r n o r .
GOVERNORS OF ALL F. R. BANKS
COPIES TO CHAIRMEN.
FEDERAL RESERVE BOARD
WASHINGTON
X-3U57
J u n e 27, 1922.
SUBJECT:
Responsibility of Federal Reserve Banks W i t h Respect
to Checks D e p o s i t e d for Credit to T r e a s u r e r ' s G e n e r a l
A c c o u n t a n d s e n t to O t h e r t h a n D r a w e e B a n k s f o r C o l l e c tion,
Dear Sir:
T h e B o a r d h a s r e c e i v e d f r o m the U n d e r S e c r e t a r y of t h e
T r e a s u r y a c o p y o f a l e t t e r w r i t t e n ty h i m , u n d e r d a t e o f J u n e 9th,
to one of the F e d e r a l R e s e r v e B a n k s , w h i c h r e a d s a s f o l l o w s :
"I h a v e y o u r l e t t e r of J u n e 1, 1922, r e g a r d i n g the p r o v i s i o n s o f D e p a r t m e n t C i r c u l a r N o , 176, a s a m e n d e d a n d s u p p l e m e n t e d
May 15, 1922, a n d h a v e n o t e d y o u r views r e g a r d i n g the a c c e p t a n c e of
dividends on claims filed against insolvent banks under paragraph
26 of the circular, a n d regarding the l i a b i l i t y of F e d e r a l R e s e r v e
B a n k s i n case t h e y elect to send G o v e r n m e n t c h e c k s to o t h e r t h a n t h e
drawee banks for collection under paragraph 25 of the circular.
"The p u r p o s e of t h e p r o v i s i o n in p a r a g r a p h 25 of the circular r e g a r d i n g acceptance of dividends on claims against insolvent
b a n k s t h a t ' d i v i d e n d s o n c l a i m s so f i l e d s h o u l d b e a c c e p t e d o n l y
u p o n s p e c i f i c a u t h o r i t y f r o m t h e S e c r e t a r y o f t h e T r e a s u r y 1 is to
e n a b l e t h e T r e a s u r y t o r e s e r v e i t s r i g h t s a g a i n s t t h e t a x p a y e r or
o t h e r d r a w e r o f t h e c h e c k u p o n w h i di t h e c l a i m is b a s e d . T h e r e s h o u l d
be no legal difficulty o n this account, for the filing of a claim does
not p r e c l u d e refusal or delay in a c c e p t a n c e of p a y m e n t . T h e r e a claim
filed on account of a dishonored exchange draft covers other items
t h a n Government items, however, the b a n k may, of course, a c c e p t dividends o n account of items other than Government items. In a n y case,
the F e d e r a l Reserve B a n k m a y receive dividends e v e n on a c c o u n t of
Government items without previous instructions from the Treasury, but
disposition should be m a d e of such dividends only in accordance with
the T r e a s u r y ' s i n s t r u c t i o n s . In s u c h c a s e the r i g h t s of the T r e a s u r y
c a n b e a m p l y s a f e g u a r d e d if t h e F e d e r a l R e s e r v e B a n k w i l l n o t i f y t h e
Treasury of the receipt of such dividends and the T r e a s u r y will then
give p r o m p t a d v i c e of its d e s i r e s in the m a t t e r .
Z-3^51
2 -
"The p r o v i s i o n s of p a r a g r a p h 25 as to the l i a b i l i t y of a Fede r a l R e s e r v e B a n k w h i c h e l e c t s to s e n d G o v e r n m e n t c h e c k s t o o t h e r t h a n
the d r a w e e b a n k for collection restate a w o r k i n g arrangement a g r e e d
to b e t w e e n the T r e a s u r y a n d the F e d e r a l R e s e r v e Board, of w h i c h the
several Federal Reserve Banks were notified by the Board. The statutes
u n d e r w h i c h b o t h certified a n d u n c e r t i f i e d checks a r e a c c e p t e d b y t h e
G o v e r n m e n t e x p r e s s l y p r o v i d e that if t h e c h e c k t e n d e r e d b y t h e t a x p a y e r is n o t p a i d b y t h e b a n k o n w h i c h it is d r a w n t h e t a x p a y e r r e m a i n s
l i a b l e to the G o v e r n m e n t a s if n o c h e c k h a d b e e n r e c e i v e d . T h i s , of
course, m e a n s that, w h e r e v e r the drawee b a n k fails to p a y the check,
t h e T r e a s u r y is f u l l y p r o t e c t e d b y i t s r i g h t t o p r o c e e d a g a i n s t t h e
taxpayer. But, in cases w h e r e the d r a w e e b a n k has a c t u a l l y p a i d the
check to a collecting agent bank used b y the Federal Reserve Bank, the
Government has lost its recourse against the taxpayer a n d m u s t l o o k
e i t h e r to t h e c o l l e c t i n g a g e n t b a n k or to the F e d e r a l R e s e r v e B a n k .
Apart from any question of legal liability on the part of the Federal
Reserve Bank, the a r r a n g e m e n t in q u e s t i o n h a s p r o v e d t o b e a w o r k i n g
one and has been adopted b y the several Federal Reserve Banks. The
Treasury considers the arrangement a reasonable one, and, therefore,
h a s e m b o d i e d its t e r m s in Circular N o . 1 7 6 . "
T h e f o r e g o i n g is t r a n s m i t t e d f o r y o u r i n f o r m a t i o n .
Very truly yours,
G o v e r n o r ,
TO THE GOVERNORS OF ALL F. R. BANKS
Copies to Chairmen.
F E D E R A L
R E S E R V E
B O A R D
STATEMENT FOR THE PRESS
X-3459
F o r release in M o r n i n g Papers,
S a t u r d a y , J u l y 1 , 1922.
T h e f o l l o w i n g is a r e v i e w of g e n e r a l b u s i n e s s a n d
financial conditions throughout the several Federal
Reserve Districts during the m o n t h of June, as
contained in the forthcoming issue of the F e d e r a l
Reserve Bulletin.
The outstanding features of the economic development during
the m o n t h have b e e n the continued and noteworthy increase in the
physical volume of production and a continuance of the advance in
prices noted for the month of May, the wholesale price index number
of the U n i t e d States B u r e a u of labor Statistics showing an increase
five points for that m o n t h .
Prices in Great Britain also show
a n increase, the index n u m b e r c o m p i l e d b y the F e d e r a l R e s e r v e B o a r d
for international comparison advancing four points, a s compared
w i t h a n increase of n i n e p o i n t s in t h e s i m i l a r l y c o n s t r u c t e d n u m b e r
for the United States.
A n i n c r e a s e o f p r o d u c t i o n is n o t e d i n h i g h l y f i n i s h e d
lines of m a n u f a c t u r e as w e l l as in basic industries.
The advance
has b e e n especially marked in iron a n d steel, a n d industries w h i c h
are large consumers of iron and steel products, such a s automobiles,
foundries, machine shops, etc.
May copper production was 256 per
cent of that of M a y 1921, a n d s h o w e d a v e r y l a r g e a d v a n c e over the
preceding month.
Zinc output also increased, while stocks were
less t h a n h a l f those at the close of M a y , 1 9 2 1 .
Building activity
- 2 has continued practically unabated.
X-3459
The v a l u e of c o n t r a c t s let during
M a y w a s $323*000,000, w h i c h w a s about 5 0 p e r cent l a r g e r than for
May, 1921,
This was substantially the same as the A p r i l figure.
Decided improvement in tanning and moderate improvement
in the output of boots and shoes are noted*
Wholesale groceries
and hardware show a very pronounced advance over April, and compare
f a v o r a b l y w i t h the sales of a y e a r ago.
In dry goods and shoes
a s e a s o n a l r e c e s s i o n is r e p o r t e d , b u t t h e b u s i n e s s i n m o s t D i s t r i c t s
does not vary greatly from that of laat y e a r .
for t h e first time in
ago.
The retail trade
m a n y m o n t h s is i n e x c e s s o f t h a t o f a y e a r
T h i s , h o w e v e r , is n o t u n i f o r m l y t r u e , a s i n a p p r o x i m a t e l y
h a l f t h e D i s t r i c t s t r a d e w a s l e s s t h a n i n M a y , 1921.
A l t h o u g h the production of anthracite coal has b e e n reduced
p r a c t i c a l l y to nothing, the p r o d u c t i o n of b i t u m i n o u s coal at n o n u n i o n m i n e s h a s i n c r e a s e d s o m e w h a t , at t h e s a m e t i m e t h a t t h e p e t r o l e u m
output for the m o n t h has shown an advance as compared with April,
General employment conditions tave taken a very decided turn
for the better.
I n s o m e l i n e s a s c a r c i t y o f l a b o r is n o w r e p o r t e d , a s
for example in the steel and b u i l d i n g trades.
labor also continues upward#
Demand for agricultural
TThile u n e m p l o y m e n t s t i l l e x i s t s , e s p e c i a l l y
in those industries such as coal and textiles w h e r e labor troubles prevail, figures furnished by the United States Employment Service and by
v a r i o u s S t a t e d e p a r t m e n t s o f l a b o r s h o w m a r k e d r e d u c t i o n s i n n u m b e r s out
of work,
- 3 -
X-3459
M o s t staple crops h a v e shown improvement d u r i n g the past m o n t h
and the a p p r o a c h of m i d s u m m e r finds the farming c o m m u n i t y a s a w h o l e
anticipating fully average yields.
In some parts of the country u n f a v o r -
a b l e w e a t h e r h a s d e l a y e d or i m p a i r e d p r o s p e c t s , tut t h e g e n e r a l s i t u a t i o n
is f a v o r a b l e .
C a r l o a d i n g s o n l i n e s of r a i l w a y s s e r v i n g a g r i c u l t u r a l
d i s t r i c t s s h o w a very m a t e r i a l a d v a n c e e v e n t h o u g h the n e w crop h a s not
b e g u n to m o v e in q u a n t i t y .
Railways w h i c h have suffered most severely in
b u s i n e s s a r e t h o s e w h i c h a r e l a r g e l y d e p e n d e n t o n c o a l to m a k e u p t h e
b u l k of their traffic.
Of fundamental interest has been the continued downward tendency
of discount and money rates.
In the N e w Y o r k market the charge for call
f u n d s h a s b e e n a s l o w a s 2~: p e r c e n t .
also tended distinctly downward.
B a t e s fur ' c o m m e r c i a l p a p e r h a v e
During the m o n t h the Federal
R e s e r v e B a n k s o f N e w Y o r k a n d B o s t o n r e d u c e d t h e d i s c o u n t r a t e to
4 p e r cent.
cent,
The B a n k of E n g l a n d has a l s o r e d u c e d its r a t e to 3 s P e r
Federal Reserve Bank portfolios show little change, although
i n d i c a t i n g a d e c l i n i n g t e n d e n c y , w h i l e m e m b e r b a n k l o a n s h a v e shown,
but moderate alteration.
The outcome of thu international bankers'
c o n f e r e n c e a t P a r i s w a s u n f a v o r a b l e to t h e m o v e m e n t o f e x c h a n g e
toward higher levels and limited recessions have occurred in
nearly all of the E u r o p e a n currencies.
Foreign loans have con-
t i n u e d to b e p l a c e d in this m a r k e t in c o n s i d e r a b l e q u a n t i t i e s . T h e
l a t e s t export t r a d e f i g u r e s s h o w a small s h r i n k a g e in the v o l u m e
of exports while imports have increased materially.
- 4 AGBICUITUBE:
X-3459
The c o n d i t i o n of the crops shows a v e r y general and
d e c i d e d improvement over last month, due m a i n l y to the f a v o r a b l e w e a t h e r
during May and early June,
June
1
was
El.9,
c o n d i t i o n o f 77-9
The average c o n d i t i o n of w i n t e r wheat on
as compared w i t h a condition o n M a y
o n
J u n e 1, 1 9 2 1 .
1,
of
S3*5 and
a
, T h e r e w a s a d e c i d e d i m p r o v e m e n t in
the w h e a t p r o s p e c t s of District No. 7 ( C h i c a g o ) d u r i n g May, but there
w a s s o m e d a m a g e f r o m r e d r u s t i n t h e f i r s t h a l f o f $June.
In District
N o . 1 0 (Kansas C i t y ) the h a r v e s t i n g , w h i c h w a s b e g u n in the l a t t e r part
o f M a y , is s u f f i c i e n t l y a d v a n c e d t o i n d i c a t e t h a t t h e y i e l d is b e t t e r
than w a s anticipated on May 1.
H a r v e s t i n g is i n f u l l s w i n g i n D i s t r i c t
N o . 8 ( S t . L o u i s ) w h e r e a y i e l d e q u a l to, o r i n e x c e s s o f t h e J u n e 1 e s t i
m a t e i s i n d i c a t e d , a n d thel D i s t r i cb is e x p e c t e d t o p r o d u c e 8 3 , 3 9 0 , 0 0 0
b u s h e l s o f w i n t e r w h e a t c o m p a r e d w i t h 56,110,000 b u s h e l s l a s t y e a r .
In District No, 1 2 (San Francisco), the c o n d i t i o n of w h e a t d e c l i n e d
during May.
S i n c e J u n e 1 d r y i n g w i n d s h a v e b e e n d e t r i m e n t a l to t h e
condition of growing grains in sections of Oregon and Washington.
Planting of spring wheat, though delayed by unpropitious weather,
w a s f i n a l l y c o m p l e t e d l a t e i n May u n d e r f a v o r a b l e w e a t h e r c o n d i t i o n s .
T h e c o n d i t i o n of t h e o a t s crop is i m p r o v i n g , a l t h o u g h it
w i l l b e s m a l l e r t h a n last y e a r , due to a r e d u c e d a c r e a g e .
The corn
a c r e a g e i n D i s t r i c t N o . 8 ( S t . L o u i s ) is p r o b a b l y f r o m 1 5 t o 2 0 p e r
cent s m a l l e r t h a n a y e a r a g o w h i l e t h e a c r e a g e in D i s t r i c t No. 1 0
( K a n s a s C i t y ) is a b o u t a s l a r g e a s l a s t y e a r .
The warm dry weather
i n e a r l y J u n e w a s f a v o r a b l e f o r plai$jing a n d l e n t e n c o u r a g e m e n t t o
t h e c o r n g r o w e r s , a l t h o u g h t h e r e is s o m e a p p r e h e n s i o n o f p r o b a b l e
- 5 insect damage in District N o . S (St. Louis).
X-3U59
District No. 7 (Chicago)
r e p o r t s s a t i s f a c t o r y p r o g r e s s , b u t t h e r e is a n e e d o f r a i n i n s o m e s e c tions.
B a r l e y fields m a t u r e d rapidly in C a l i f o r n i a this season a n d
t h e h a r v e s t is n o w i n p r o s p e c t . T h e C a l i f o r n i a c r o p o f b a r l e y is e s t i m a t e d to be 2 4 p e r cent larger than in 1 9 2 1 .
The a c r e a g e of the w h i t e
p o t a t o crop shows a n increase, especially in D i s t r i c t N o . 1 0 (Kansas
City).
In that D i s t r i c t and in D i s t r i c t N o . Z (St. L o u i s ) the crop
is g e n e r a l l y i n g o o d c o n d i t i o n .
In F l o r i d a , w h e r e t h e h a r v e s t i n g is
n e a r i n g completion, the s e a s o n has b e e n v e r y s a t i s f a c t o r y f r o m the
point of view of production, but farm prices ranged rather low.
The
s u g a r c a n e c r o p is r e p o r t e d m a k i n g g o o d p r o g r e s s , b u t a v e r a g e s a b o u t
three w e e k s late in L o u i s i a n a and h e a v y rains h a v e p r e v e n t e d w o r k i n g
the crop.
COTTON:
Unfavorable weather conditions which retarded cotton
p l a n t i n g h a v e g i v e n p l a c e to d r y w e a t h e r a n d h i g h e r t e m p e r a t u r e a n d
t h e p r o s p e c t is m o r e h o p e f u l .
T h e p r i c e o f m i d d l i n g u p l a n d oaotton a t
N e w Orleans o n June 1 4 was 19.4 cents, as compared w i t h 19*9
o n
Ms,y 17*
C o t t o n s t o r e d in m i l l s a n d p u b l i c w a r e h o u s e s o n M a y 3 1 a m o u n t e d to
3 , 9 8 1 , 0 0 0 bales, a b o u t 3 ^ p e r c e n t l e s s t h a n o n M a y 31,
1921.
District N o . 11 (Dallas) estimates the increase in acreage
a s h i g h a s 1 5 t o 2 0 p e r cent, b u t t h e s i g n i f i c a n c e o f t h i s is s o m e what m o d i f i e d b y the fact that last y e a r 1 s acreage w a s b e l o w normal•
T h e c r o p i s f r o m t h r e e to f o u r w e e k s l a t e w h i c h a d d s to t h e d i f f i c u l t y
of curbing the a c t i v i t i e s of the w e e v i l s w h i c h h a v e appeared in large
numbers.
Reports show that not more t h a n 75 p e r cent of the cotton
p l a n t e d i n T e x a s is g r o w i n g , b u t t h e w a r m , d r y w e a t h e r s i n c e t h e
X-3459
s e c o n d w e e k in J u n e h a s b e e n f a v o r a b l e and a fair crop s h o u l d b e p r o d u c e d .
H i g h t e m p e r a t u r e s a n d s u n s h i n e o v e r a l l t h e c o t t o n p r o d u c i n g s e c t i o n s of
District No* 8 (St. Louis) have greatly improved the condition of the
crop and the activities of the boll weevil have b e e n retarded.
In
District N o . 1 0 (Kansas C i t y ) a great deal of replanting v a s necessit a t e d b y t h e e a r l y r a i n s a n d l o w t e m p e r a t u r e s , a n d t h e c r o p a s a w h o l e is
from two to three weeks late.
T h e w e e v i l is a p p e a r i n g i n s o m e l o c a l i t i e s ,
a m o n t h earlier than last year, and some damage has b e e n done.
A large
amount of fertilizer has b e e n u s e d in G e o r g i a a n d a freer u s e t h a n last
y e a r is r e p o r t e d i n D i s t r i c t N o . 5 ( S t . L o u i s ) .
COTTON FINISHING:
Reports from 35
the
m e m b e r s b e l o n g i n g to
the N a t i o n a l A s s o c i a t i o n of Finishers of Cotton F a b r i c s indicate that
there w a s an increase in finished yards billed from 87,153,255 in
A p r i l to 9 2 , 2 5 4 , o 7 3 in M a y .
The volume of p r o d u c t i o n showed little
change in Districts No. 1 (Boston),'Nd. 2 (New York), and No. 3
( P h i l a d e l p h i a ) , but w a s v e r y m u c h l a r g e r than in A p r i l in D i s t r i c t s .
No. 5 (Richmond), No. 6 (Atlanta), and N o . o (St. Louis).
The total
grey yardage of finishing orders received increased from 20,545,503 * n
April to 1 0 0 , 3 4 2 , 0 0 5 in May, a n d shipments of f i n i s h e d goods rose from
4 3 , 3 5 5 cases to 4 9 , ^ 5 9 cases.
t h e m o n t h i n c r e a s e d f r o m 1.2
TOBACCO:
The average w o r k a h e a d at the end of
d a y s to 9*1 d a y s .
Interest in District No. 5 (Richmond) has been centered
u p o n further p r o g r e s s in the o r g a n i z a t i o n of the cooperative m a r k e t i n g
association.
The association has recently succeeded in arranging for
advances aggregating $39,000,000 from the War Finance Corporation
during the next marketing season.
The effort to e f f e c t the o r g a n i z a t i o n
- 7 -
X-3459
o f the a s s o c i a t i o n i n t h e d a r k t o b a c c o s e c t i o n s o f D i s t r i c t N o . o ( S t .
L o u i s ) is m e e t i n g w i t h s a t i s f a c t o r y r e s u l t s .
The leaf tobacco business
in District No. 5 (Richmond) gradually improves, a n d appears in a healthier
c o n d i t i o n t h a n for the past two y e a r s .
M a n u f a c t u r e r s 1 b u s i n e s s in that
D i s t r i c t a p p e a r s to b e g o o d , w h i l e c i g a r m a n u f a c t u r e r s t h r o u g h o u t D i s t r i c t N o . 3 ( P h i l a d e l p h i a ) r e p o r t i n c r e a s e d s a l e s . T h i s is the m o r e r e m a r k a b l e in v i e w o f t h e f a c t t h a t J u n e , J u l y a n d A u g u s t u s u a l l y s h o w a
s e a s o n a l f a l l i n g o f f in d e m a n d .
The large f a c t o r i e s still report better
b u s i n e s s than do the smaller firms.
the best sale.
The better grades of cigars have
Orders are still largely for immediate shipment, but the
number of standing orders has increased.
FRUIT:
Reports from the v a r i o u s f r u i t - g r o w i n g d i s t r i c t s are very
f a v o r a b l e a n d a c r o p w e l l a b o v e t h e t e n - y e a r a v e r a g e is a n t i c i p a t e d in
District No, G (St. Louis).
P r a c t i c a l l y a 1 0 0 p e r cent s t r a w b e r r y c r o p
has b e e n m a r k e t e d in District N o . 10 (Kansas City).
Crops of blackberries
and raspberries are about normal, while an unusually large crop of cherries
is b e i n g m a r k e t e d i n J u n e .
Peaches and pears are reported as doing well,
a n d t h e p r o s p e c t f o r t h e a p p l e c r o p is b r i g h t e r t h a n f o r s e v e r a l y e a r s .
T h e G e o r g i a p e a c h c r o p , h o w e v e r , is n o t q u i t e u p to t h e a v e r a g e , a n d
the w a t e r m e l o n s a n d cantaloupes h a v e b e e n d a m a g e d b y rain.
W e a t h e r con-
ditions in M a y h a v e been favorable throughout District No. 12 (San
F r a n c i s c o ) f o r d e c i d u o u s f r u i t s a n d the a p p l e c r o p , a l t h o u g h l e s s t h a n
the record crop of 1921, will be large.
A yield of 39,322,000 bushels
is e s t i m a t e d f o r t h e D i s t r i c t c o m p a r e d w i t h 45,4^0,000 b u s h e l s h a r v e s t e d
in 1921.
The p a s t m o n t h has b r o u g h t an i m p r o v e m e n t in the c o n d i t i o n of
peaches, w h i c h a r e expected to yield a larger crop than last y e a r a n d
x-3459
— s —
a g o o d y i e l d o f c h e r r i e s a n d p e a r s is i n p r o s p e c t .
The fruit crop in D i s t r i c t No* 5 ( R i c h m o n d ) p r o m i s e s somewhat
better than was expected after the freezes in the latter part of April,
T h e o u t l o o k f o r p e a dies i n V i r g i n i a a n d N o r t h C a r o l i n a i s f a i r l y g o o d
a n d S o u t h C a r o l i n a is a l r e a d y shipping a good crop.
Prices of citrous fruits are higher than in April and much
h i g h e r t h a n in M a y last y e a r but shipments of citrous fruits f r o m
C a l i f o r n i a a r e o n l y a b o u t h a l f a s l a r g e as i n M a y 1 9 2 1 . V a l e n c i a G r a n g e s
(which comprised the b u l k of shipments d u r i n g M a y ) a r e r e p o r t e d to b e
only f a i r in q u a l i t y a n d small in size this s e a s o n .
GRAIN MOVEMENTS:
Grain receipts at 17 interior centers registered
a n i n c r e a s e o f 5j p e r c e n t d u r i n g M a y .
This pronounced increase was
distributed very evenly among the different grains, but there was a
slight d e c r e a s e in the receipts of f l o u r .
M a y receipts of b o t h wheat
a n d corn i n c r e a s e d about 73 p e r cent at these c e n t e r s , a n d t o t a l e d
30,125,797 bushels and 27,354,113 bushels, respectively.
r e c e i p t s of w h e a t a n d c o r n w a s m o s t m a r k e d a t C h i c a g o .
The gain in
The May move-
ment of wheat in District No. 1 0 (Kansas City) was exceptionally heavy,
as a result of rising prices and better transportation service.
As
shipments f r o m the four leading markets in that District w e r e 2,432,000
b u s h e l s in excess of the receipts for the month, elevator stocks were
substantially reduced.
T h e r e w a s a s o m e w h a t s i m i l a r s h r i n k a g e at
interior and seaboard centers.
Grain prices declined rather generally
in the latter part of May, a n d a l t h o u g h there was some recovery early
i n J u n e , t h e p r i c e o f w h e a t is s t i l l d e c l i n i n g a n d i s b e l o w t h e l o w e s t
April quotation.
- 9 FLOUR:
x-3%59
Flour production during May was greater in all Districts
than during April and than during May, 1921#
R e p o r t e d M a y output in
D i s t r i c t No* 9 ( M i n n e a p o l i s ) w a s 1 , 3 2 9 , 7 5 5 b a r r e l s , w h i c h w a s 6 p e r cent
g r e a t e r t h a n in A p r i l a n d 1 p e r cent g r e a t e r t h a n in M a y , 1921*
In
D i s t r i c t N o . 1 0 ( K a n s a s C i t y ) p r o d u c t i o n i n M a y a m o u n t e d to 1 , 5 0 4 , 2 2 6
b a r r e l s , a n i n c r e a s e of 1 p e r c e n t o v e r t h e p r e v i o u s m o n t h a n d o f 3 1
p e r cent over the same month last y e a r .
Eleven leading mills in
District No. S (St. L o u i s ) produced 2J9>970 b a r r e l s in May, w h i c h was
11 p e r cent g r e a t e r t h a n the A p r i l f i g u r e .
M a y o u t p u t o f 44 m i l l s i n
D i s t r i c t N o . J ( C h i c a g o ) w a s 3 2 6 , 3 1 1 b a r r e l s , a n i n c r e a s e of 3 p e r cent
o v e r A p r i l a n d 2J p e r c e n t o v e r t h e M a y , 1 9 2 1 p r o d u c t i o n .
In District
No. 1 2 (San F r a n c i s c o ) M a y p r o d u c t i o n of $5 m i l l s w a s 5 2 2 , 2 0 0 b a r r e l s ,
w h i c h w a s 5 p e r cent g r e a t e r t h a n d u r i n g A p r i l .
D e m a n d for flour
during M a y w a s dull a n d fe tureless in D i s t r i c t N o . 2 (St. L o u i s ) .
B o t h there a n d in D i s t r i c t No* 1 2 (San F r a n c i s c o ) b u y e r s w e r e disp o s e d to a r a i t the n e w w h e a t crop b e f o r e s t o c k i n g u p .
A fairly
active inquiry existed for clears and low grade flour, but mills
w e r e u n a b l e t o s e l l t h e h i g h e r g r a d e s a n d h a d n o c l e a r s to d i s p o s e
of*
Both foreign and domestic demand were likewise dull in District
No, 1 0 (Kansas City).
Choice milling wheat remains at a high level
in D i s t r i c t s N o . 5 (St. L o u i s ) a n d No. 1 2 (San F r a n c i s c o ) .
/LITE STOCK:
Movement of cattle ,
calves and hogs to market
during M a y was h e a v i e r than during May, 1921, but the reverse was true
of sheep.
In each case, r e c e i p t s at 15 w e s t e r n m a r k e t s w e r e greater than
during April.
May receipts of cattle and calves w e r e 1,302,000 head,
a n i n c r e a s e o f 3 3 p e r c e n t o v e r t h e A p r i l f i g u r e a n d 23 p e r c e n t o v e r
'
-
the May, 1921 figure.
10
-
R e c e i p t s of h o g s in M a y , w h i c h a m o u n t e d to
2>73^• 0 0 0 h e a d , w e r e 3% p e r cent g r e a t e r than d u r i n g the p r e c e d i n g
m o n t h a n d 1 4 p e r cent greater t h a n a y e a r a g o .
May receipts of sheep
vvei'e 9 3 6 , 0 0 0 h e a d , a n i n c r e a s e o f 2 6 p e r cent o v e r t h e A p r i l f i g u r e
b u t a d e c r e a s e o f 1 5 p e r c e n t f r o m t h e M a y , 1 9 2 1 .figure. T h e h e a v i e r
>
receipts are attributed to the increase in the prices of cattle a n d
hogs, but sheep prices have shown a
declining tendency.
The movement
of southwestern cattle for finishing purposes is practically completed,
heavy shipments from ranges to pastures in the n o r t h e r n and w e s t e r n
states taking place in May.
Abundant rains in Districts Nos. 10
(Kansas C i t y ) a n d 11 (Dallas) h a v e left the soil w e l l s a t u r a t e d w i t h
moisture and grazing prospects in general are excellent.
B a i n is,
however, b a d l y needed in southwestern Arizona and southwestern N e w
Mexico1
D i s t r i c t N o . 1 2 (San F r a n c i s c o ) r e p o r t s i m p r o v e m e n t in the
c o n d i t i o n of l i v e s t o c k in all p a r t s of the D i s t r i c t , except s o u t h eastern Arizona.
Thirty-two packers report May sales 1 9 , 3 p e r cent greater
t h a n in A p r i l , a n d 3 1 report t h e m 1 0 . 0 p e r cent o v e r t h o s e for May, 1921.
May was thus the most encouraging month so far this year.
Practically
all r e p o r t e d improvement in domestic demand, e x c e p t in the coal districts,
a n d a flew r e p o r t e d i m p r o v e m e n t i n d e m a n d f r o m r u r a l d i s t r i c t s .
Storage
stocks of c u r e d m e a t s at w e s t e r n p a c k i n g p o i n t s at t h e c l o s e of M a y
w e r e greater than at the opening of the month, a n d there was a m a r k e d
increase in the stocks of lard.
Packers operations during May were
the largest of a n y m o n t h of the present y e a r in D i s t r i c t No. 1 0 (Kansas
City).
- 11 .
COAL:
X-3U59
Bituminous coal p r o d u c t i o n in M a y amounted to about
20,2£>7,000 tons, a s c o m p a r e d w i t h 1 5 , 7 5 0 , 0 0 0 tons in A p r i l a n d
33,330,600 tons in May, 1921.
The weekly output has shown a
steady increase since April 22, except for the w e e k ending June
3, w h i c h included a h o l i d a y .
Most of the gain in production
is r e p o r t e d b y n o n u n i o n f i e l d s , a s o p e r a t i o n s i n s t r o n g l y o r ganized districts are still prevented by the strike.
District
N o . 3 ( P h i l a d e l p h i a ) r e p o r t s t h a t p r o d u c t i o n is i n c r e a s i n g i n
many nonunion fields which suffered from strikes during April
Production increased in the coal fields of District
and May.
N o . 6 ( A t l a n t a ) d u r i n g M a y a n d w a s m a i n t a i n e d at a s u b s t a n t i a l l y
higher level than in May, 1$21.
Heavy purchases were made in
that District by western railroads.
Most bituminous mines
in D i s t r i c t No. 7 (Chicago) are still closed.
Conditions vary
in the several states of D i s t r i c t N o . 1 0 (Kansas C i t y ) f r o m a l most total inactivity in Missouri and Wyoming to about 65 p e r cent
o f c a p a c i t y o p e r a t i o n s in C o l o r a d o .
Reports from all Districts
indicate that stocks h a v e b e e n considerably depleted, but that
prices are steady since the agreement of the operators a s to
fair spot p r i c e s a t the m i n e s .
N o anthracite coal has b e e n mined since the commencement of the strike, but small quantities continue to be dredged
from the rivers each week.
These dredgings a m o u n t e d to
2 6 , 0 0 0 tons in A p r i l a n d 3 ^ , 0 0 0 tons in M a y in c o m p a r i s o n
- 12 -
X-3459
w i t h a n a c t u a l m i n e p r o d u c t i o n of 7 » * + 9 7 » 0 0 0 t o n s i n M a y , 1 9 2 1 .
District No. 3 (Philadelphia) states that stagnation still
p r e v a i l s i n t h e r e t a i l market, f o r d o & c s b i c ~ i s e s o f a n t h r a c i t e , b u t t h a t b u c k w h e a t is i n g r e a t e r d e m a n d a t h i g h e r
prices.
P r o d u c t i o n of b e e h i v e coke d e c l i n e d f r o m
5 2 8 , 0 0 0 tons in A p r i l to 4 3 2 , 0 0 0 tons in M a y , w h e r e a s
by-product coke output increased from 2 , 2 2 7 , 0 0 0 tons
in A p r i l to 2 , 5 3 7 * 0 0 0 tons in M a y .
As a result of
the shortage of beehive coke m a n y steel manufacturers
are relying chiefly u p o n by-product ovens, and the
stocks of by-product cok6 have been much reduced.
4
. 13 PETROLEUM.
X-3459
P r o d u c t i o n of c r u d e p e t r o l e u m h a s "been i n c r e a s i n g
s t e a d i l y s i n c e t h e s e c o n d week- in M a y , i n s p i t e o f a r e d u c e d f l o w in
the Texas and L o u i s i a n a fields.
T h e t o t a l M a y o u t p u t a m o u n t e d to
4 6 , 4 7 3 , 0 0 0 b a r r e l s a s c o m p a r e d w i t h 4 4 , 6 5 7 >000 b a r r e l s in A p r i l *
The
a v e r a g e d a i l y p r o d u c t i o n of oil i n C a l i f o r n i a w a s 3 5 7 > 3 7 6 b a r r e l s d u r i n g .
M a y , a s c o m p a r e d w i t h 3 ^ 1 , 0 7 7 b a r r e l s in A p r i l a n d 3 3 7 , 1 0 1 b a r r e l s in
May, 1921.
D e v e l o p m e n t w o r k is i n c r e a s i n g a n d c o m p l e t i o n s n u m b e r e d 6 4
w e l l s i n M a y i n c o m p a r i s o n w i t h 4 $ w e l l s in A p r i l .
Shipments increased,
but are still less than p r o d u c t i o n , so that C a l i f o r n i a stocks were
2 , 2 4 6 , 4 o 4 b a r r e l s l a r g e r o n J u n e 1 t h a n o n M a y 1*
A number of new
w e l l s h a v e b e e n shut i n , to c u r t a i l t h e a m o u n t o f s u r p l u s p r o d u c t i o n *
In t h e fields of District No. 10 (Kansas City) crude petroleum
production averaged 539*446 barrels a day during May, as compared with
5 5 5 > 2 3 4 b a r r e l s a day in April.
The n u m b e r of w e l l s completed increased
f r o m 6 5 1 i n A p r i l t o 669 i n M a y , a l t h o u g h d e v e l o p m e n t o p e r a t i o n s in s o m e
localities were hindered by weather conditions.
Average daily production
i n D i s t r i c t N o . 11 ( D a l l a s ) d e c l i n e d f r o m 4 5 8 , 3 5 3 b a r r e l s i n A p r i l to
426,173 barrels in May, w h i l e the number of completed wells dropped from
531 to 473•
Tiie p r o d u c t i o n of t h e M e x i a f i e l d c o n t i n u e s t o d e c l i n e , b u t
t h r e e n e w f i e l d s w e r e p r o v e n in t h e T e x a s c o a s t a l r e g i o n d u r i n g M a y .
P r i c e s o f t h e b e s t g r a d e s of K a n s a s a n d O k l a h o m a c r u d e oil r e m a i n
u n c h a n g e d , at $2 p e r barrel, w h i l e the only important change in Texas
p r i c e s w a s a n i n c r e a s e i n t h e p r i c e o f o r a n g e c r u d e f r o m $ 1 to $ 1 . 2 5 , t h e
price already prevailing in other coastal fields.
O n J u n e 5 the p r i c e
o f P e n n s y l v a n i a c r u d e w a s i n c r e a s e d f r o m $3.25 t o $3.50 a b a r r e l .
- 14 -
X-3459
R e f i n e r s h a v e b e e n i n c r e a s i n g their o p e r a t i o n s d u r i n g M a y a n d June, as
demand h a s been somewhat stimulated b y w a r m weather a n d the coal strike.
Domestic sales of kerosene and fuel oil are increasing, while an improvemerit is r e p o r t e d i n t h e e x p o r t d e m a n d f o r g a s o l i n e .
I R O N A N D STRRT,.
upward progress.
The iron and steel industry h a s continued its
P i g i r o n p r o d u c t i o n d u r i n g M a y a m o u n t e d to 2 , 3 ^ 7 , 0 0 u
t o n s , a n d s t e e l i n g o t p r o d u c t i o n to 2 , 7 1 1 , 0 0 0 t o n s .
O u t p u t i n "both c a s e s
w a s a b o u t 11 p e r c e n t l a r g e r t h a n d u r i n g t h e p r e c e d i n g m o n t h .
there was a net gain o f 13 furnaces in b l a s t .
Daring May
Unfilled orders of the
U n i t e d S t a t e s Steel C o r p o r a t i o n i n c r e a s e d 3 P e r cent o v e r those at t h e
c l o s e o f A p r i l , a n d a m o u n t e d to 5 * 2 5 4 , 0 0 0 tons,
T n e i n t e r e s t of p r o -
d u c e r s is l a r g e l y in p r o v i d i n g output n e c e s s a r y t o m e e t their c o m m i t m e n t s ,
w h i l e t h e r e is i n c r e a s i n g p r e s s u r e f r o m b u y e r s t o o b t a i n d e l i v e r i e s o n t h e
orders they have already placed.
Buyers are again hesitant about contracts
c a l l i n g f o r d e l i v e r y f a r in t h e future, w h i l e p r o d u c e r s a r e l i k e w i s e rel u c t a n t to a c c e p t o r d e r s t o o f a r a h e a d *
A f e w p r o d u c e r s in District No. 3
(Philadelphia) have b e e n forced to close d o w n or curtail operations because
o f t h e s h o r t a g e a n d h i g h cost o f c o k e .
Producers in many cases are ex-
p e r i e n c i n g d i f f i c u l t y i n s e c u r i n g s k i l l e d w o r k e r s , a n d u n s k i l l e d l a b o r is
also scarce in some localities.
Blast furnace a c t i v i t y in District No. 3
(Philadelphia) still lags considerably behind that in other sections.
H e a v i e s t d e m a n d in t h e i n d u s t r y is f r o m a u t o m o b i l e , r a i l r o a d , b u i l d i n g
and oil interests.
Price increases have been less pronounced during the
past month than previously.
The season's selling p r i c e for Lake ore has
b e e n reduced 50 cents, a n d railroad freight rates h a v e b e e n reduced 10
p e r c e n t f r o m m i n e s to u p p e r L a k e p o r t s .
- 15 AUTOMOBILES.
X-3459
D a r i n g M a y the a u t o m o b i l e i n d u s t r y s h o w e d a
further c o n s i d e r a b l e increase in a c t i v i t y .
production a n d shipment statistics.
T h i s i s r e f l e c t e d b o t h in
Manufacturers who produced
196,768 passenger cars in April built 231,629 cars in May, an increase
of 1 7 . S p e r cent, w h i l e companies b u i l d i n g 2 1 , 8 6 2 trucks in April h a d
a M a y output of 23,189, a n increase of 6.1 p e r cent.
Carload shipments
w e r e a b o u t 3 3 » & 1 0 i n M a y , a s c o m p a r e d w i t h 31,33®+ i n A p r i l , a g a i n
of 7 . 9 per cent.
The output f o r the f i r s t five m o n t h s this year
w a s g r e a t e r than for the first six m o n t h s last y e a r .
One factor in
t h i s i n c r e a s e i n b u s i n e s s is that r e p l a c e m e n t p u r c h a s e s b y u s e r s l a s t
y e a r w e r e l i g h t , a n d a n a c c u m u l a t e d r e p l a c e m e n t d e m a n d is n o w m a n i f e s t ing itself.
T h e s a l e o f n e w c a r s i s r e p o r t e d to b e k e e p i n g p a c e w i t h
p r o d u c t i o n , and in some c a s e s d e m a n d exceeds a b i l i t y to p r o d u c e .
and m o d e r a t e p r i c e d cars are in greater d e m a n d .
continues on a satisfactory basis.
NOKFBRROUS METALS.
Lower
The used car market
Prices appear stabilized.
Mining operations continued to expand during
J u n e in t h e c a s e o f a l l i m p o r t a n t n o n f e r r o u s m e t a l s e x c e p t l e a d .
Copper
p r o d u c t i o n a m o u n t e d to 8 8 , 7 1 3 , 9 0 0 p o u n d s , w h i c h w a s 1 6 p e r c e n t l a r g e r
than in A p r i l and about 2 6 6 per cent greater than in May, 1921.
Despite
t h e i m p r e s s i v e i n c r e a s e i n p r o d u c t i o n d u r i n g t h e p a s t tlire3 m o n t h s , t h e
g e n e r a l t r e n d of c o p p e r p r i c e s , h a s c o n t i n u e d to b e u p w a r d .
On June l4
the p r i c e o f e l e c t r o l y t i c copper d e l i v e r e d at N e w Y o r k r a n g e d f r o m
1 3 . 7 5 c e n t s to 1 3 . 8 7 5 c e n t s p e r p o u n d , a s c o m p a r e d w i t h a p r i c e of
13*25 cents per pound a month previous.
Domestic demand for copper
s l a c k e n e d c o n s i d e r a b l y d u r i n g June,- b u t f o r e i g n d e m a n d w a s w e l l m a i n t a i n e d ,
District No. 9 (Minneapolis) reports that the May extraction of copper
X-3U59
m i n e s in M o n t a n a and M i c h i g a n was over six times as g r e a t a s that of
May, 1 9 2 1 .
Z i n c p r o d u c t i o n in M a y a m o u n t e d t o 2 7 , 4 1 9 t o n s , w h i c h w a s a b o u t S
p e r c e n t i n e x c e s s o f the A p r i l output a n d 51 p e r c e n t l a r g e r t h a n in M a y ,
S t o c k s of zinc
1921.
c o n t i n u e to d e c l i n e a n d t o t a l e d o n l y
40,409
at t h e e n d o f M a y , a s c o m p a r e d w i t h S 3 , 7 2 1 t o n s o n M a y 3 1 , 1921.
No.
10
(Kansas C i t y ) r e p o r t s that
46,124
tons
District
tons of zinc o r e w e r e shipped
during May, at a n average price o f $29*51 p e r ton.
Production is being
m a t e r i a l l y a u g m e n t e d by the reopening of p r o p e r t i e s w h i c h h a v e b e e n idle
for over a year.
T h e o u t p u t o f p i g l e a d in M a y w a s a b o u t 1 . 8 p e r c e n t l e s s t h a n i n
April, but was 12 per cent greater than in May, 1921.
Shipments of lead
ores from District No. 10 (Kansas City) were, however, somewhat greater
t h a n i n A p r i l , a n d t h e a v e r a g e p r i c e r o s e f r o m $60.27 p e r t o n t o $ 7 0 . 9 0
per ton.
T h e M a y s i l v e r p r o d u c t i o n t o t a l e d 4,257,973 o u n c e s , i n c o m -
p a r i s o n w i t h 4,13S.550 ounces in A p r i l . .
COTTON TEXTILES.
C o t t o n c o n s u m p t i o n for M a y w a s c o n s i d e r a b l y a b o v e
the total f o r A p r i l as t h e increase a m o u n t e d to n e a r l y 50,000 b a l e s .
The
u p w a r d p r i c e movement of r a w cotton stimulated the p l a c e m e n t o f o r d e r s ,
m o r e p a r t i c u l a r l y for h e a v y cotton goods, and w a s r e f l e c t e d in a less
p r o n o u n c e d rise in the p r i c e b o t h of c o t t o n c l o t h a n d o f yarn.
District
No. 3 (Philadelphia) reports productive activity in t h e goods mills to
b e about 85 p e r cent o f capacity and states that stocks on h a n d a r e n o r m a l
for the season.
In District No. 5 (Richmond) the mills are receiving
a l l t h e o r d e r s t h a t t h e y ' a r e p r e p a r e d to r e c e i v e , a n d a c t i v i t y i s g r e a t e r
t h a n it w a s i n A p r i l .
The special inquiry conducted in District No. 6
- 17 -
X-3459
(Atlanta) shows that 3 ^ mills which produced approximately 3
000,000
y a r d s o f c l o t h in May h a d a yardage output of 10.1 p e r cent g r e a t e r
than in A p r i l , while for 31 mills r e p o r t i n g this item, p r o d u c t i o n w a s
38.9 p e r cent in excess o f May, 1921.
O r d e r s o n h a n d a t t h e e n d of
the m o n t h (29 firms reporting) were 12.9 P e r cent greater than in
April, and 4l per cent above those for May, 1^21, (24 mills reporting
for the latter date).
S o m e of t h e s e tills are o p e r a t i n g n i g h t shifts.
Demand is not only for immediate delivery b u t there i s also a heavy
demand for the fall.
Reports received from 36 m i l l s producing 7*500,000
p o u n d s o f y a r n h a d a p r o d u c t i o n i n p o u n d s in M a y 1 4 . 1 p e r c e n t g r e a t e r
than i n A p r i l , a n d f o r 29 m i l l s the o u t p u t w a s 2 5 . 1 p e r c e n t in e x c e s s
of that o f a year ago.
Orders on hand a t the end o f M a y ( 3 2 mills re-
porting) had risen 5 * 6 per cent as compared with April and were 27*3 P e r
cent greater for the 17 mills giving r e t u r n s for a y e a r ago.
W O O L E N T E X T I L E S . T h e r a p i d a d v a n c e in t h e p r i c e o f r a w w o o l h a s
c a r r i e d q u o t a t i o n s to f i g u r e s f a r a b o v e t h o s e p r e v a i l i n g l a s t y e a r .
D i s t r i c t N o . 1 ( B o s t o n ) m e n t i o n s t h e f a c t t h a t t h e a v e r a g e o f $8 q u o t a t i o n s c o m p u t e d b y R . G. D u n & C o m p a n y s h o w s a r i s e o f o v e r 7 5 P $ r
cent between October and June.
D i s t r i c t Ho. 12 (San F r a n c i s c o ) states
t h a t w o o l i s b e i n g s o l d a s f a s t a s it i s s h e a r e d a n d s a c k e d a n d o v e r 9 0
p e r c e n t of t h e t o t a l c l i p o f t h e D i s t r i c t h a d b e e n d i s p o s e d o f b y J u n e
1st.
A t t h a t d a t e g r o w e r s w e r e r e p o r t e d to b e s e l l i n g a v e r a g e c l i p s
o f f i n e g r a d e u n c l e a n e d w o o l s a t p r i c e s r a n g i n g f r o m 3 5 4 to 4 o 4 p e r
p o u n d a s c o m p a r e d w i t h 3 0 to 3 5 4
parable grades a year ago.
a
m o n t h before and 15 to 174 ^ o r com-
Choice l o t s have since sold at 454
some
growers are holding in the expectation of receiving even better prices.
- IS -
X-3U59
District No. 3 (Philadelphia) refers to the fact that Ohio delaine
fleeces are selling at higher prices than territory wools,
Ohio
farmers are receiving for fine clips that shrink about 60 per cent
when scoured, as high as 57jt P e r pound.
There was also a slight increase in manufacturing activity
during the month of May, as the figures published by the Department
of Commerce show a decrease in the percentage of idle hours to total
reported both for looms wider than 50 inch reed space and for 50 inch
reed space or less.
In the case of the former the percentage of
idle hours to total reported dropped from 4l*6 to 37-6 on June 1;
and in the case of the latter the percentage fell from 46-6 to 44#S.
In the case of woolen spindles the percentage of idle hours to total
reported dropped to 11.4, from 15-2 recorded on May 1.
The percentage
of idle hours in the case of worsted spindles still remained very high
although there was a decline to 3^*7 per cent on June 1 from 37*9 P e r
cent on May 1.
District No, 3 (Philadelphia) comments on the marked
discrepancy between the activity of woolen mills, which are operating at
about SO per cent of capacity,
and of the worsted mills which are
running at 33 P e r cont of capacity*
Yarn stocks in that District
appear to be low, while the average production of the yarn mills is
estimated at about 75 P e r cent.
CLOTHING*
In District No. 2 (New ,York) sales of both men's
and women1 s clothing were larger than a year ago.
According to reports
received from seven firms selling men's clothing the increase amounted
to I 6 . 5 per cent, while the increase in the case of l4 firms distributing
women1 s clothing was 9*3 P^r cent*
As compared with April, however,
- 19 -
x-3^59
seasonal d e c l i n e s of 3 4 * 6 per cent and 32*3 p e r cent r e s p e c t i v e l y w e r e
recorded*
I n D i s t r i c t N o * 8 (St» L o u i s )
o f c l o t h i n g were from 10
p e r c e n t l e s s t o o v e r 1 0 0 p e r c e n t a b o v e t h o s e o f a y e a r a g o in t h e c a s e
of r e p o r t i n g firms*
A very general improvement in business was noted
a n d it w a s s t a t e d t h a t m a n u f a c t u r e r s w e r e r e c e i v i n g a h e a v y v o l u m e o f
mail orders which in some cases could not be filled f r o m stock.
e s p e c i a l l y h e a v y v o l u m e of r e o r d e r s
An
f r o m the South had b e e n received
by distributors of w o m e n 1 s apparel in the District.
Reports have been
r e c e i v e d f r o m m a n u f a c t u r e r s of m e n ' s c l o t h i n g i n D i s t r i c t N o * 7 ( C h i c a g o ) ,
b u t c o m p a r a b l e f i g u r e s for the n e w s e a s o n a r e not a v a i l a b l e a s o r d e r s
h a v e n o t yet b e e n p l a c e d in any c o n s i d e r a b l e amount.
Seven tailors to
t h e t r a d e r e p o r t s l i g h t r e d u c t i o n s i n s u i t o r d e r s f o r M a y a m o u n t i n g to
1*6 per cent a s compared with April, but orders were 2 9 * 1 p e r cent
greater t h a n in May, 1921-
The number of suits made fell off 7*4 per
cent as c o m p a r e d with April, b u t were 3 2 * 7 per cent g r e a t e r t h a n a year
ago.
S I L K TEXTILES# T h e consumption of r a w silk in May showed a substantial increase, a d v a n c i n g f r o m 2 4 , 2 4 7 bales in A p r i l to 3 3 , 2 5 4 bales.
Prices also advanced and silk throwsters in District No. 3 (Philadelphia)
w e r e s t a t e d to b e r e c e i v i n g i n c r e a s e d b u s i n e s s , m a n y m i l l s r u n n i n g at
SO p e r cent of c a p a c i t y .
Hosiery m i l l s were p u r c h a s i n g heavily but
t h e r e w e r e n o i n d i c a t i o n s of i m p r o v e m e n t i n t h e m a r k e t f o r b r o a d s i l k s
w i t h the exception of crepe fabrics.
Production in the goods mills in
District No. 3 (Philadelphia) averaged only about 40 per cent of capacity,
w h i l e t h e s t a t i s t i c s f r o m P a t e r s o n s h o w e d a p e r c e n t a g e of o p e r a t i n g h o u r s
to t o t a l a v a i l a b l e o f o n l y 2 1 . 6 5 p e r c e n t ( J u n e 3 ) w i t h 1 5 , 0 0 0 l o o m s r e
1''
4
porting*
O n l y 3 , 5 ^ 0 l o o m s of t h e t o t a l 1 5 , 0 0 0 w e r e p r o d u c i n g o n
that date.
HOSIERY*
Reports received f r o m hosiery m i l l s in District No* 3
/
( P h i l a d e l p h i a ) i n d i c a t e l i t t l e c h a n g e in p r o d u c t i v e a c t i v i t y d u r i n g
V
May.
It is s t a t e d t h a t f u l l f a s h i o n e d h o s i e r y m i l l s h a v e o r d e r s
that w i l l keep them busy until the end of September a n d some h a v e orders
for shipments sufficient to run through the rest of the year.
The
seamless hosiery mills in general are not booked b e y o n d a six weeks
period.
T h i r t y reporting firms in District No, 3 (Philadelphia) selling
to the wholesale t r a d e manufactured 0 . 2 per cent m o r e in May than in
A p r i l a n d 27*7 p e r c e n t m o r e t h a n i n M a y , 1 9 2 1 .
Orders booked fell
off 50• 3 p e r cent a s c o m p a r e d w i t h A p r i l a n d w e r e 2 9 * 4 p e r cent b e l o w
the bookings of a year ago.
Notwithstanding this fact, unfilled orders
w e r e 15-3 p e r cent l a r g e r t h a n those on h a n d at t h e e n d of M a y , 1921,
a l t h o u g h I3.5 p e r cent l e s s than at the end of the p r e c e d i n g month.
In the case of l4 firms selling to the retail trade, the product manufactured was 3.9 per cent below April figures, but 25-3 P e r cent larger
than in May, 1921.
O r d e r s booked in M a y increased 3 2 . 8 per cent as com-
pared with April and were 3^*6 per cent above May, 1921.
Unfilled
o r d e r s w e r e 1 0 . 2 p e r cent g r e a t e r t h a n at t h e e n d of A p r i l , but 2 0 * 4
p e r c e n t b e l o w t h o s e on h a n d a t t h e e n d o f M a y , 1 9 2 1 .
All cotton and
m e r c e r i z e d h o s i e r y l i n e s w e r e said to b e " e x t r e m e l y d u l l " in D i s t r i c t
No. 3 (Philadelphia).
But returns f r o m four reporting m i l l s in District
N o . 6 ( A t l a n t a ) showed a n increase i n output of 1 4 . 4 p e r cent for M a y a s
compared with April, and an increase of 62.4 per cent in orders booked
-21-
X-3459
d u r i n g t h e m o n t h , w i t h u n f i l l e d o r d e r s 1 7 - 7 p e r c e n t g r e a t e r at t h e
end of t h e m o n t h t h a n at t h e end of A p r i l .
UMDERViEAR.
In May, 1922, reports were received f r o m Uy mills
p r o d u c i n g underwear as c o m p a r e d w i t h 53 in April, a n d 6 2 in May, 1921,
P r o d u c t i o n during the m o n t h showed a slight decline compared with last
month, b u t the loss w a s v e r y inconsiderable c o m p a r e d w i t h the loss
during the preceding m o n t h .
May p r o d u c t i o n of 5 1 8 , 1 5 0 dozens by
47 mills shows an increase of 12,803 dozens over the amount produced
b y 6 2 m i l l s in May, 1921.
Production of 47 mills in May wag 74.2 per
c e n t o f n o r m a l , o f 53 f i r m s i n .April, 8 2 . 7 p e r c e n t o f n o r m a l , a n d o f
6 2 firms in May, 1921, 55*4 per cent o f normal.
Production of winter
u n d e r w e a r i n lfe.y a m o u n t e d to 2 9 8 , 0 8 0 d o z e n s , w h e r e a s s u m m e r u n d e r w e a r
output totaled only 220,070 dozens.
C o m p a r a t i v e r e p o r t s r e c e i v e d f r o m 33 of t h e s e m i l l s s h o w a n
opposite trend from last month.
O r d e r s o n h a n d a t t h e f i r s t of t h e
m o n t h s h o w e d a l o s s of 5 2 , 1 1 6 d o z e n s , or 8 p e r c e n t , b u t t h e large
volume of n e w orders and the decline in shipments resulted in an
i n c r e a s e in o r d e r s on h a n d a t t h e c l o s e of the m o n t h of 1 7 1 , 8 8 4
dozens, or 28.9 per cent.
N e w orders during the m o n t h registered an
increase of 228,428 dozens, or 92.9 p e r cent; and p r o d u c t i o n increased
f r o m 3 9 2 , 5 7 8 d o z e n s to 4 0 3 , 8 7 2 d o z e n s , a g a i n of 2 . 9 p e r c e n t .
Ship-
ments and cancellations, however, declined from 326,717 dozens and
1 4 , 7 1 1 d o z e n s , to 2 9 1 , 7 6 1 d o z e n s a n d 1 1 , 2 2 7 d o z e n s r e s p e c t i v e l y .
S H O E S A M D LEATHER. P r i c e s o f C h i c a g o packer h i d e s continued to rise
s t e a d i l y d u r i n g J u n e a n d a r e n o w f r o m 20 p e r c e n t to 3 0 p e r c e n t h i g h e r
than in April.
Despite the increase in prices, t h e v o l u m e of sales h a s
2*
f
- 2 2 -
w
t
X-3U59
b e e n l a r g e in b o t h C h i c a g o a n d N e w York,
There was a p r o n o u n c e d im-
p r o v e m e n t in t h e d e m a n d for calfskins d u r i n g the t h i r d w e e k o f J u n e ,
but the market for sheep and lamb skins has been rather inactive.
Marked improvement occurred in most branches of the leather
industry during May and the first three weeks of June.
Seven tanners
in District No. 7 (Chicago).reported total sales for May from 20 to
60 per cent above those for April.
siderably diminished during May.
Stocks in that District were con4
District No. 3 (Philadelphia) re-
p o r t s that May s a l e s of belting leather w e r e t h e largest for many
m o n t h s , a n d t h a t J u n e s a l e s a r e c o n t i n u i n g at t h e s a m e h i g h l e v e l .
The market for other heavy leathers is also much broader, and there is
n o w a d e m a n d for all tannages and all parts.
Calf leather is much
m o r e a c t i v e , a n d h e a v y s k i n s f o r men's w e a r a r e s e l l i n g p a r t i c u l a r l y
well.
S a l e s o f k i d l e a t h e r arer l a r g e r , a s a r e s u l t o f a n i n c r e a s e
in their use for women's pumps.
There has been a slight improvement
in the g l o v e b u s i n e s s , b u t most of the d e m a n d is s t i l l f o r the c h e a p e r
grades.
Sales of harness leather are w e l l maintained, except in
certain coal regions.
Shoe manufacturing registered a slight improvement in most
sections during May.
The production of eight leading manufacturers
in District No. 1 (Boston) increased 1 . 3 per cent during May, and
were 2$.6 per cent higher thai in May, 1921.
Shipments of seven of
these firms were 0.6 per cent less than in .April, while oew orders
increased 11.3 per cent.
Reports of Uj firms in District No. 3
X-3^59
(Ehiladelphia) show an increase of 3.3 per cent in production, an increase of 2.1 per cent in new orders, and
a decline of 12.8 per cent in shipments for May, as
compared with April*
During the first two weeks in
June there was a marked improvement in new orders for
shipment within five or six weeks; due to a depletion
of wholesale and retail stocks, and a greater stabilization of' both prices and styles.
The shoe production
of 32 manufacturers in District No. 7 (Chicago) increased 4.3 per cent during May, while the volume of
unfilled orders reported was 39*3 P e r cent higher on
May 31 than on April 29.
There was less hesitancy in
placing orders for future delivery, and some firms now
require over nine weelcs to fill an order.
Sales of 11
reporting interests in District No. 8 (St. Louis) were
from 2 to 11.5 per cent higher than in April. Factory
operation varied from 90 to 100 per cent of capacity.
In that District there has been a revival of demand for
better grades of both Men's and women's shoes; and orders
for forward delivery are increasing.
, 795
- 24 -
X-3U59
LUMBER: Orders, shipments and production of lumber were all at
a high level during May, but some slackening of demand was noted
during the first two weeks of June.
Railroad shipments of forest pro-
ducts increased from 233,559 cars in April to 240,6l4 cars in May.
The volume of new orders reported to the National lumber Manufacturers
Association has declined steadily since the middle of May, and totaled
only 227,675,093 feet for 39^ mills in the week ending June 17, as
compared with 301,837,237 feet for 397 mills in the week ending May
20.
lumber mills in District No. 1 2 (San Francisco) operated
at capacity in May for the first month in two years.
The increased
output, however, was not equal to the orders received and unfilled
orders on May 31 were almost twice as large as on the corresponding
date in 1 9 2 1 ,
Orders received by 191 reporting mills totaled
6 0 7 , 1 5 9 * 0 0 0 feet in May, an increase of 4 2 per cent over April and
of 7 1 per cent over May, 1 $ 2 1 .
Log production amounts to about 9 0
per cent of normal capacity and is increasing rapidly due to improved
weather conditions.
District No. 6 (Atlanta) reports that production of 1 2 2
mills of the Southern Pine Association totaled 3 ^ 6 , 9 9 3 * 0 0 0 feet
during May, as conpared with a
cut of 2 8 2 , 5 2 9 , 0 0 0 feet for 1 1 5
mills in April, while unfilled orders for the same groups of mills
increased from 2 5 1 , 5 7 7 , 0 0 0 feet on April 2 9 to 3 3 1 , 1 3 2 , 0 0 0 feet on
May 31.
Forty-five southern pine mills in District No. 1 1 (Dallas)
reported both orders and shipments considerably in excess of the
»
r
I
- 25 -
796
x-3459
c . for the month, while their unfilled orders on May 3^ amounted to
ut
99,561,000 feet, in comparison with unfilled orders of 70,738,000
feet on the hooks of 42 mills on April 29.
Prices of southern
pine continued to climb during May, and remained firm during the
first two weeks of June. The cut of reporting lumber manufacturers
in District No. 9 (Minneapolis) showed a marked gain during May,
but was less than either shipments or new orders.
Retail sales
of lumber in that District were 36 per cent larger than in April
and 7 per cent larger than in May, 1921.
BUILDING-: The total volume of building operations continued
during May, at about the same high level as in April, as reductions
in activity in certain eastern and southern states were counterbalanced by increases in most of t h e central and western states.
The value of contracts awarded in
seven Federal Reserve Districts
(compiled from statistics gathered by the F. W. Dodge Co.) amounted
to $323,044,164 during May, as compared with $322,630,241 in April
and $220,792,350 in May, 1921.
Building increased during May in
f i v e of these seven Districts, t h e i n c r e a s e s ranging f r o m
per
cent in District No. 3 (Philadelphia) to 53*^ P e r cent in District
No. 4 (Cleveland). Decreases of 25.1 per cent and 22.4 per cent
were recorded in the value of contracts awarded in Districts No. 1
(Boston) and No. 2 (New York), respectively.
The value of resi-
dential building contracts increased in all of the seven Districts,
except Districts No. 2 (New York) and No. 4 (Cleveland).
- 25 -
X-3U59
Reports from District No. 3 (Philadelphia) indicate
that building activity is particularly pronounced in Atlantic
City and in the vicinity of Philadelphia.
Manufacturers of
"building materials report a large and increasing demand,
While prices have advanced considerably.
In District No. 7
(Chicago) construction operations at Detroit and Chicago
showed unusually large gains during May, and the increase
in the average value of new permits indicated that larger
buildings are being erected.
Permits issued by cities
of District No. 5 (St. Louis) indicate that new projects
included more classes of construction in May than in any
preceding month of 1922.
Building operations in District
No. 10 (Kansas City) were the largest ever recorded in a
single month, although somewhat limited by storms and
floods in some sections.
Construction activity reg-
istered a rather marked decline in District No. 11
(Dallas), during May, as compared with April, but was
maintained at a considerably higher level than in May,
1921.
• F 798
1
'
-r27 -
EMPLOYMENT;
.
x-3^59
Current testimony as to the increased opportunities for
employment and the limited number of persons seeking positions is even
more unanimous and emphatic than it has been during the immediately preceding months'*
The United States Employment Service announced an increase
of 3 • 2 per cent in numbers employed at the end of May as compared with April
for the 1,428 firms covered " y its survey. The decreases were confined to
b
a limited group of workers and were relatively unimportant.
In District
No*. 1 (Boston) the metal working industry and the building trades have been
active, but the strike in the cotton textile mills of the District still
continues, although some mills have reopened and report an increasing number
of employees. Employment agencies in District No. 2 (New York) state that
there is a shortage of unskilled labor, while according to the New York
State Department of Labor the numbers employed in industrial establishments
in the State are about equal to the totals for March, 1921. As compared with
April, moreover, most of the larger cities report increases in numbers at
work in May. An advance in average weekly earnings in New York factories
is a significant indication both of the increasing scale of operations in
some establishments and also of increased rates of pay in certain lines in
which labor shortages have developed. In District No* 3 (Philadelphia), the
Pennsylvania State Department of Labor announces that 104,055 persons were
unemployed on June 1 5 t h in the six cities of Altoona, Harrisburg, Johnstorm,
Philadelphia, Scranton and Williamsport, the lowest figure since December
30, 1920, and a decrease of 25.3 per cent from the estimates of May 15thin District No. 5 (Richmond), it is said that reports from various sections
of the District show that common labor is becoming scarce in some localities
and that there have*been a few scattered advances in wages. The building
- 28 -
X-3U59
trades , road work and other public improvements have given employment to
large numbers
of unskilled laborers.
Such
unemployment as still exists
is largely due to strikes in the coal mining regions of West Virginia.
District No. 6 (Atlanta) notes increased employment in the cities and
also increases in output both in coal mining and in the iron and steel
industries in Alabama. District No. 7 (Chicago) emphasizes the need for
workers in the steel mills and the existing shortages in lumber camps and
saw mills.
Foundries and machine shops are likewise reported to be in
need of men.
Construction work and the automobile industry have been lead-
ing factors in the demand for labor.
The special survey of employment
conditions made by the Federal Reserve Bank of Chicago shows a gain of
4.4 per cent of numbers employed by 198 firms having 117.047 persons on
their pay rolls at the end of May. Employment conditions in District No-9
(Minneapolis) are said to have undergone a noticeable change during the
last 30 days because all labor wanting work is now able to find it and
employers for the first
needed help.
time in two years are not able quickly to find
In fact there are shortages of skilled laborers in the
building trades, of skilled miners in the copper
regions, and of
experienced farm help. District No. 10 (Kansas City) reports that there
is greater industrial activity in the District than for several months past
although a delay of about two weeks in beginning the wheat harvest left
considerable numbers unemployed in the interior cities.
The increase in
building and construction work and renewed activity in the lead and zinc
mining regions have been very favorable factors.
In District No. 11
(Dallas) idle workers have been absorbed in part by the harvesting demand,
although recently there has been a reduction in building activity vifoich
f 800
'
- 29 -
X-3U59
has added to numbers •unemployed". It is reported from District No* 12
(San Francisco) that unenployment during May was confined almost entirely
to unskilled labor which was, however, being rapidly absorbed. Salmon
fishing and canning began in May and offered employment to large numbers
of men. Reports from identical establishments in the principal lumbering
sections of Oregon, Washington, and Idaho shows that 77»^00 men were on
the pay roll June 1st as compared with 54,000 men on June 1, 1921, an
increase of Ujj per cent. All lumber camps and mills in Oregon, Washington#
and Idaho are reported to be employing over 100,000 men. Employment in
the mines and in the petroleum industry of California was below normal
during May but was increasing, while in Arizona, Idaho, Nevada and Utah
there was an increasing demand from the mines and for agricultural work*.
Coal miners on strike in Utah have found employment in considerable numbers
in the copper mining regions'. According to the United States Employment
Service employment in manufacturing industries in the cities advanced
fractionally in Portland and Seattle, but was somewhat less in Los Angeles
and San Fransisco.
X-3459
- 30 WHOLESALE TRADE
Percentage of increase (or decrease) in net sales in
May > 1922 as compated with the preceding month
(April, 1922)
Groceries
Dry Goods
:
Number
Dis- :
of Firms ;
trict : Per- Report- : PerNo. :centage ing
centage
2
42
0-6
-5.2
-0.4
17.4
50
4
12.8
26
2.0
12.6
48
-6.9
5
6
16.8
-4.2
37
42
16.1
11.3
7
10.8
16.1
9
38
10
8.5
9
~3*3
11
1.2
12
5.8
12
6.8
13.6
32
}
Hardware
Number
of Firms
Report- : Percentage
ing
8
11.9
4.1
15
12.6
13
16
3.9
3-U
23
14.1
12
8.9
5
11.3
7
12
3*5
14
14.3
Boots and Shoes
Number
of Firms
PerReporting
centage
-4.4
11
27
12
17
-15.9
22
-25.5
-8.6
14
-6.6
10
8
12
0.4
22
Number
of Firms
Reporting
10
19
10
10
4
14
Percentage of increase (or decrease) in net sales in
May, 1922 as compared with May, 1921.
2
3
4
5
6
7
9
10
11
12
—O.J
-2.4
-7*3
1.2
—1.6
2.3
1.4
0.2
-5.2
3-U
42
50
26
48
37
40
38
9
12
32
-11.1
-17.8
--4.-5
-7.7
7.2
8.7
-11.6
-0.7
—6.1
10.5
8
15
13
16
23
12
5
7
12
14
13.9
9-0
8.6
4.7
1.5
22.0
6.9
I3.8
-1.2
23-7
11
27
12
17
22
14
10
8
12
22
-9.5
10
1.8
2.2
-4.2
4-9
19
10
10
4
-2.5
14
A very general and decided increase in wholesale sales of groceries and
of hardware is reported "by all Districts except District No. 2 (New York) in
which grocery sales declined 5*2 per cent. Grocery sales in certain sections
have "been stimulated by the opening of the fruit canning season and by the
consequent increase in purchases of sugar. There has also been a larger
demand for staples and canned goods. The growing demand for farmers* supplies
and builder^ hardware has been an important factor in the increased hardware
802
- 31 -
X-3U59
sales that have otSturred during the month and fn general,' sales is
May were well above the totals for a year ago.
In the case of dry goods and shoes, there is evidence of between
season dullness and decreases in sales as compared with the preceding
month were to have been expected. In some Districts dry goods sales
dropped decidedly as compared with a year ago*. In District No. 3
(Philadelphia) for example, a fall of 17*8 per cent is attributed to
the effects of the coal strike, as many retailers in mining sections
have been buying only 25 to $0 per cent of normal requirements.
Outside the coal regions, however, there has been an increasing demand.
District No. 6 (Atlanta) calls attention to the fact that although
dry goods sales showed a decline as compared with April they are 7*2
per cent in excess of May, 1921. The rise in the price of cotton and
the textile strike in New England have resulted in some price advances
by the local wholesalers. In District No* 10 (Kansas City) in which
dry goods sales were slightly below those of last year the decline was
attributed to weather conditions which were unfavorable to the sale of
summer goods.
-RCTflTT.TOATTO?Six of the twelve Federal Reserve Districts reported
increased retail sales during May as compared with the same month last
year. The decreases reported practically offset the increases so that
for the country as a whole retail trade for the month
, appears to be as
large as in May, 1921, but cumulative sales for the year 1922 continue
to compare unfavorably with sales for the corresponding period of 1921
in all Districts. The various lines o f merchandise have fared equally
.
• •
52
~
x-3459
well, and the demand is for medium-priced articles'-
The big crop of
small fruits and vegetables, the more seasonable weather, and the
. universally favorable outlook for crops have been important factors in
stimulating business in the farming districts'. The more pessimistic
reports are largely from sections dependent on the coal-mining industry
for their prosperity.
ithe United States indicate
Reports from 4^2 department stores in
an increase of 0.8 per cent in sales over a year ago-
The increase of
15.5 per cent in the District No. 12 (San Francisco) over sales for last
May is particularly encouraging while the largest decrease amounts to
7.2 per cent for District No* 6 (Atlanta).
The stocks on hand at the
end of May are about the same size as on May J1, 1921. A comparison
with stocks for April shows a reduction of 3*3 per cent, which, with
the increased sales, produced a more rapid rate of turnover.
The
slight increase in the ratio of outstanding orders to purchases for 1921
indicates that the buyers are beginning to place their fall orders.
FOREIGN TRADE:
There was a moderate decline in exports from the
United States during May, the reported value amounting to $308,000,000
as compared with $318,000,000 in April. At the same time imports after
dropping decidedly in April rose very nearly to the level of two months
ago, the figures reported for May being $254,000,000*
The excess of
exports over imports which in April amounted to slightly over $1Q0,000,000
was therefore reduced to $$4,000,000 in May.
The Federal Reserve Board's
/ trade^index for exports declined from 106• 0 in April to 99*4 in May,
showing that there was some reduction as compared with the earlier month
in the average quantities of the principal commodities exported.
The
indet for imports rose from l69«l in April to 177*9 in May, but the
• -33-
K 804
.
X-3^59
volume of import trade indicated " y the latter figure was considerably
b
below that indicated f o r M a r c h , w h m n t h e index stood at 206.5.
Ibe movement of gold continued during M a y on the much reduced scale of
the previous month, with imports valued at $9,000,000 and exports at
$3,400,000. Net imports of the metal last month were thus less than
$6,000,000 in contrast to $57,000,000 in May, 1921, and a monthly
average of $28,000,000 during the first three months of the current year*
FEDERAL RESERVE BOARD
WASHINGTON
x-3460
July 6, 1922.
SUBJECT:
Edge Act Corporations;
Report of Condition as at the Clos§ of Business,
June 30, 1922.
Dear Sir:
U n d e r the p r o v i s i o n s of the B o a r d * s R e g u l a t i o n
K , S e r i e s o f 1 9 2 0 , governing: b a n k i n g c o r p o r a t i o n s a u t h o r ized to do f o r e i g n b a n k i n g b u s i n e s s u n d e r the terms of
S e c t i o n 2 5 ( a ) o f the F e d e r a l R e s e r v e A c t , y o u a r e h e r e b y
r e s p e c t f u l l y r e q u e s t e d to f u r n i s h the B o a r d w i t h a r e p o r t
o f c o n d i t i o n , a s at t h e c l o s e o f b u s i n e s s J u n e 3 0 , 1 9 2 2 ,
giving in detail all assets and liabilities of your
corporation and the data asked for in the a c c o m p a n y i n g
memorandum.
Kindly acknowledge receipt.
Very truly yours,
G o v e r n o r .
(Enclosure)
>
TO E D G E A C T CORPORATIONS.
r. 806
report of condition to federal
reserve board
x-3u60a
T h e f o l l o w i n g i n f o r m a t i o n is d e s i r e d i n c o n n e c t i o n
w i t h the r e p o r t o f c o n d i t i o n t o b e 1 m a d e a s
a t c l o s e of b u s i n e s s J u n e 3 0 , 1 9 2 2 .
Detailed balance sheet showing all assets and liabilities, including
c o n t i n g e n t l i a b i l i t i e s . It is r e q u e s t e d t h a t t h e i t e m s f o r w h i c h d e tailed s c h e d u l e s are requested b e l o w b e s h o w n as separate accounts o n
the b a l a n c e s h e e t *
.Amount o f l o a n s a n d d i s c o u n t s , d i v i d e d :
(a) Demand
(b ) T i m e
(c) O v e r d r a f t s and other advances
Total
Detailed
(a)
(b)
(c)
(d)
(e)
(f)
Secured - Unsecured
l i s t of i n v e s t m e n t s , s h o w i n g :
Issuing Government or corporation
Interest rate
Maturity
Par value
Book value
Approximate market value -
l i s t of b a n k s h a v i n g b a l a n c e s d u e to y o u r c o r p o r a t i o n w i t h amount
f o r each b a n k separately:
(a) G o v e r n m e n t b a n k
(b) Domestic banks
(c) F o r e i g n banks
L i s t of b a n k s h a v i n g b a l a n c e s d u e f r o m y o u r c o r p o r a t i o n w i t h
amount for each b a n k separately:
(a) D o m e s t i c banks
(b) F o r e i g n b a n k s
Bills payable:
»
(a) P a y a b l e to:
(b) Amount
(c) Interest rate
(d) M a t u r i t y
(e) Collateral * give list
*
Rediscounts:
(a) Amount
(b) Maturity
,
(c) R a t e
(d) W i t h whom
( e ) secured o r unsecured — if s e c u r e d , g i v e d e t a i l e d i n f o r m a t i o n
regarding security.
-
2
-
!'!- jk'oOa.
8.
Reserve Statement:
D e p o s i t s in the U n i t e d S t a t e s :
(a) Net d e m a n d d e p o s i t s (after d e d u c t i n g u n c o l l e c t e d d e m a n d
items payable within United States - exchanges)
(b) Time deposits
(c) Reserve held:
Cash on hand
Bank balances
Total
P e r c e n t of r e s e r v e -
9 « Acceptances - limitations:
(a) Acceptances outstanding:
1. M a t u r i n g i n 3 0 d a y s or less
2. Maturing after 30 days.
Total outstanding acceptances.
(b) Capital and surplus
E x c e s s a o v e r b_
,
Name
Acceptances secured
Acceptances unsecured
A m o u n t r e q u i r e d to b e s e c u r e d u n d e r
agreement with Federal Reserve Board
( G i v e l i s t of s e c u r i t y h e l d as r e q u i r e d
above giving description and approximate amount)
( c ) L i s t of d r a w e r s o f d r a f t s a c c e p t e d , w i t h
t o t a l a g g r e g a t e l i a b i l i t y i n e x c e s s of
1 0 p e r c e n t of c a p i t a l a n d s u r p l u s .
Address
Business
Aggregate Liability
$
$
$
$
$
$
$
$
Security* or Guaranty
(d) Reserve against outstanding acceptances:
Required: 15$ against all acceptances outstanding w h i c h
m a t u r e in 30 days or less; and
yfo a g a i n s t a l l a c c e p t a n c e s o u t s t a n d i n g w h i c h
mature in more than 30 d a y s .
1. Cash (**)
2. B a n k balances (**)
3* B a n k e r s a c c e p t a n c e s
4. S e c u r i t i e s a p p r o v e d b y F e d e r a l R e s e r v e
B o a r d (List in d e t a i l )
Total
(*)
If s e c u r i t y , s t a t e w h a t t h e s e c u r i t y c o n s i s t s o f , g i v i n g q u a n t i t y
a n d a p p r o x i m a t e v a l u e ; if a b a n k g u a r a n t y , g i v e n a m e a n d l o c a t i o n
of b a n k .
( * * ) T h e s e a m o u n t s , of c o u r s e , m u s t n o t i n c l u d e t h o s e a p p e a r i n g i n 8 - ( c )
as p a r t of y o u r r e s e r v e a g a i n s t d e p o s i t s .
'
f 808
»
- 3 -
10.
X-34G0a
General Limitations:
Per cent deposits and acceptances outstanding to capital
and surplus
11.
List of officers and directors. .
12. List of stockholders, shewing number of shares owned " y each.
b
13*
Date of last examination or audit - by whom made.
FEDERAL RESERVE BOARD
WASHINGTON
X-3u6i
July 6, 1922.
SUBJECT:
Foreign and International Banking Institutions;
Report of Condition as a t the Close of Business,
June 30, 1 9 2 2 ,
Dear Sir:
U n d e r a u t h o r i t y of the agreement entered into b y y o u r
corporation w i t h the Federal Reserve Board, y o u are h e r e b y respectfully requested to furnish the Board with a report of condition, as
at the c l o s e of b u s i n e s s J u n e 30* 1922, g i v i n g in d e t a i l a l l a s s e t s
and liabilities of your corporation and the data asked for in the
accompanying memorandum.
K i n d l y a r r a n g e to f i l e t h e r e p o r t o f y o u r H e a d O f f i c e
a n d d o m e s t i c b r a n c h e s c o m b i n e d as s o o n as p o s s i b l e . S e p a r a t e rep o r t s of f o r e i g n b r a n c h e s and a f f i l i a t e d b a n k s s h o u l d b e sent as
soon as they are received by you.
It w i l l b e a p p r e c i a t e d i f , a f t e r
the reports have been received from all of your foreign branches
and affiliated banks, you will have prepared a consolidated statem e n t o f y o u r c o r p o r a t i o n to be sent to the B o a r d •
Vh.ile t h e B o a r d h a s r u l e d t h a t n o s p e c i f i c r e s e r v e h a s t o
be carried b y foreign branches or affiliated institutions of A m e r i c a n
b a n k i n g corporations against deposits abroad, it, n e v e r t h e l e s s ,
w i s h e s to b e a d v i s e d a s t o t h e a v e r a g e r e s e r v e c a r r i e d b y a l l s u c h
b r a n c h e s and a f f i l i a t e d institutions of corporations w h i c h are operating under agreement w i t h the Federal Reserve Board.
You are,
t h e r e f o r e , r e q u e s t e d to h a v e e a c h o f y o u r f o r e i g n b r a n c h e s , a g e n c i e s ,
o f f i c e s a n d s u b s i d i a r y b a n k s f u r n i s h y o u , f o r t r a n s m i s s i o n to t h e
Board, a report of the average reserve carried d u r i n g the m o n t h of
J u n e , 1922, a g a i n s t deposit l i a b i l i t i e s in the f o r m s h o w n in the
accompanying memorandum.
Kindly acknowledge receipt.
Very truly yours,
(Enclosure)
TO B E SENT TO SPECIAL LIST.
G o v e r n o r .
REPORT OF CONDITION TO FEDERAL
RESERVE BOARD.
'
X-34Sla
T h e f o l l o w i n g i n f o r m a t i o n i s d e s i r e d i n co/mactiojx. w i t h t h e r e p o r t of
c o n d i t i o n t o b e m a l e a s at c l o s e of b u s i n e s s J u n e 3 0 , 1 9 2 2 .
A. HEAD O F F I C E
M P DOMESTIC BRANCHES COMBINED
1. D e t a i l e d b a l a n c e s h e e t s h o w i n g a l l a s s e t s a n d l i a b i l i t i e s , i n c l u d i n g
c o n t i n g e n t l i a b i l i t i e s . It i s r e q u e s t e d t h a t t n e i t e m s f o r w h i c h d e tailed schedules are requested below be shown as separate accounts on
the balance sheet.
2. A m o u n t of l o a n s
(a)
(b)
(c)
and discounts, d i v i d e d : Secured - Unsecured
Demand
Time
O v e r d r a f t s and o t h e r a d v a n c e s
Total
3 - D e t a i l e d l i s t of i n v e s t m e n t s ( i n c l u d i n g s t o c k of a f f i l i a t e d i n s t i tutions) showing:
(a) Issuing Government or c o r p o r a t i o n
(b) Interest rate
(c) Maturity
(d) Par value
(e) Book value
(f) A p p r o x i m a t e m a r k e t v a l u e 4. O w n e r s h i p of s t o c k of a f f i l i a t e d i n s t i t u t i o n s ( a ) P e r c e n t o w n e d by y o u r s e l v e s
( b ) P e r c e n t o w n e d by f o r e i g n G o v e r n m e n t s
(c) Per cent owned by i n d i v i d u a l s and c o r p o r a t i o n s
5* L i s t of b a n k s , b r a n c h e s , e t c . h a v i n g b a l a n c e s d u e to y o u r c o r p o r a t i o n
w i t n amount for each bank separately:
(a) Government bank
(b) D o m e s t i c b a n k s
(c) F o r e i g n banks
(d) F o r e i g n branches, a g e n c i e s and a f f i l i a t e d institutions
6 . L i s t of b a n k s , b r a n c h e s , e t c . h a v i n g b a l a n c e s d u e f r o m y o u r c o r p o r a t i o n
w i t h amount for each bank separately:
(a) Domestic banks
(b) Foreign banKs
(c) Foreign branches, a g e n c i e s and affiliated institutions
7- B i l l s p a y a b l e :
(a)
(b)
(c)
(d)
(e)
Payable to:
Amount
Interest rate
Maturity
Collateral - give list
-2-
'
r
8 1 1
8. Rediscounts:
X-346la
(a) Amount
•
(b) Maturity
(c) Rate
(d) With whom
(e) Secured or unsecured - if secured, givedetailed information
regarding security.
9. Reserve Statement:
Deposits in the United States'
(a) Net demand deposits (after deducting uncollected demand items
payable within United States - exchanges)
(b) Time deposits
(c) Reserve held:
Cash on hand
Bank balances^
Total
Per cent of reserve 10. Acceptances - limitations:
(a) Acceptances outstanding:
1. Maturing in 30 days or less
2. Maturing after 30 days
Total outstanding acceptances.
(b) Capital and surplus
Excess a over &
$
$.
$
$.
$
Acceptances secured
Acceptances unsecured
Amount required to be secured under
agreement with Federal Reserve Board
(Give list of security held as required above
giving description and approximate amount)
(c) List of drawers of drafts accepted, with total
aggregate liability in excess of 10 par cent
of capital and surplus.
Name
Address
Business
Aggregate Liability
$
$
$
Security* or
(d) Reserve against outstanding acceptances:
Required: 13% against all acceptances outstanding which
mature in 30 days or less; and
3$ against all acceptances outstanding which
mature in more than 30 days.
1. Cash (•*)
2. Bank balances (**)
3 . Bankers acceptances
4. Securities approved by Federal Reserve
Board (List in detail)_
—
Total
(*) If security, state what the security consists of, giving quantity and
approximate value; if a bank guaranty, give name and.location of bank.
(**) These amounts, of course, must not include those appearing in 5-(c) as
part of your reserve against deposits.
812
-311. General limitations:
X-3^6la
^er cent deposits and acceptances outstanding to capital
and surplus
12. List of officers and directors. ,
13« List of stockholders,, showing number of shares owned by each.
lU-. List of branches, sub-branches, agencies, offices and affiliated
institutions - date of opening 6f each and the location.
15- Date of last examination or audit - by whom made.
B, F09RIGM BLANCHES, AGENCIES ANP SUBSIDIARY B A M S AMD COLORATIONS.
1. Balance sheet to be furnished by each, showing in detail all assets and
liabilities, including contingent liabilities. It is requested that
the items for which detailed schedules are requested below be shown
as separate accounts on the balance sheet.
2. Amount of loans
(a)
(b)
(c)
and discounts, showing: Secured - Unsecured
Demand
Time
Overdrafts and other advances
3. Detailed list of investments, showing:
(a) Issuing Government or corporation
(b) Interest rate
(c) Maturity
(d) "Par value
(e) Book value
(f) Approximate market value
4. List of banks having balances due to your branch with amount for each
bank separately:
(a) Government bank
(b) Banks and bankers
(c) Head Office
(d) Other branches, agencies and affiliated institutions
5. List of banks having balances due from your branch with amount for each
bank separately:
(a) Banks and bankers
(b) Head Office
(c) Other branches, agencies and affiliated institutions
6. "Bills payable:
(a) "Payable to
.
(b) Amount
(c) Interest rate
(d) Maturity
(e) Collateral (Give detailed list)
-47. Rediscounts:
(a) Amount
(b) Maturity
(c) With whom
(d) Pate
(e) Secured, or unsecured - if secured, give detailed data
*
•
813
X-346la
8. Deposits:
/ \ «
,
(a) Government deposits (if secured give
list of collateral)
1. Demand
2. Time
Other deposits
3« "Demand
4. Time
•
Total
(b) Deposits - ho*r payable:
1. Local Currency
2. Dollar
3. Sterling
4. Otherwise ________________________
Total
Pollax
Equivalent
Special Reserve Statement - average for month of June, 1322.
(a) Net deposits:
1. Payable
2.
3»
"
4.
"
in local currency
in dollars
in sterling
Otherwise
Total
(b) Reservei
1. Mount, if any, and composition required by local laws.
2. Amount held:
Amount
Per cent to
Net deposits
(a) Gold and Silver...... $
(b) Local currency
(c) Other cash.
(d) Balance in local.....
Govt. bank........
(e) Other reserve funds
Total
10. Date of last examination or audit - by whom made.
NOTE: 1. Where a schedule does not refer to your corporation, pleade
indicate this by inserting the word "None".
2. Reports for foreign branches, agencies, etc., should be in
terms of United States dollars, stating the rate of exchange
at which they were converted.
FEDERAL RESERVE BOARD
WASHINGTON
X-3462
June 29, 19224
SUBJECT}
Calculation of Franchise Taxes as Affected
"by Surplus and Super-surplus.
Dear Sir:
At the end of the year 1921 each of the Federal Reserve
Banks except the Federal Reserve Bank of Dallas had accumulated a
normal surplus fund equal to 100$ of subscribed capital, and in
addition had established a super-surplus fund representing the
amount of surplus in excess of 100$ of subscribed capital* The
question has been raised as to the effect of maintaining these
two separate surplus funds/known as normal surplus and slipersurplus respectively, in calculating the annual franchise taxes
to be paid by the Federal Reserve Banks to the United States.
For your information there is enclosed, herewith a copy of an
opinion of the Board's Counsel, dated June 5,1922, with reference to this question.
This opinion has been approved by
the Federal Reserve Board and the Board will require the Federal
Reserve Banks to calculate their annual franchise taxes in the
manner therein indicated.
If, therefore, the aggregate amount
of the normal surplus and super-surplus of a Federal Reserve Bank
is not less than 100$ of the subscribed capital of the bank at
the end of the year 1922, the Bank will be required to pay to
the United States as a franchise tax for the year 1922 , 90$ of
the current earnings for the yaar after the deduction of expenses,
dividends and proper charges for reserves, depreciation and losses
This method of calculating franchise taxes is not entirely in accord with the practice in former years, as will be
seen by reference to the Board's circular letter of December 8,
1921, (St. 2467) with regard to the closing of the books of the
Federal Reserve Banks on December )1, 1921. She practice in former years has been for Federal Reserve Banks, in calculating
franchise taxes, to deduct from their net earnings whatever ^
amount was necessary to bring their normal surplus up to 100$ of
subscribed capital, without reference to the amount of their
super-surplus fund.
After giving the matter careful consideration the Board has concluded that this past practice is not
- 2 -
X-3462
authorized, u n d e r the terms of the l a w , and the F e d e r a l R e s e r v e
B a n k s w i l l , t h e r e f o r e , at t h e t i m e t h e y p a y t h e i r f r a n c h i s e
t a x e s f o r t h e y e a r 1 9 2 2 b e r e q u i r e d to m a k e p r o p e r a d j u s t m e n t
w i t h the T r e a s u r y o n a c c o u n t o f f r a n c h i s e t a x e s f o r f o r m e r
y e a r s . Detailed instructions will " e forwarded in due course.
b
Yours very truly,
G o v e r n o r .
(Enclosure)
TO GOVERNORS OF AIL F. R. BANKS
COPIES TO CHAIRMEN.
COPY
X-3462a
Federal Reserve Board.
June 5, 1922',
Walter S. L o g a n , General Counsel
Surplus of Federal Reserve
Banks.
The second paragraph of Governor Strong1s letter of M a y 26th
r a i s e s the q u e s t i o n w h e t h e r , w h e n the subscribed capital of a Fede r a l R e s e r v e B a n k i s i n c r e a s e d d u r i n g t h e y e a r , 'the Bank1s n o r m a l
s u r p l u s s h o u l d b e i n c r e a s e d to lOOfo o f t h e i n c r e a s e d s u b s c r i b e d
c a p i t a l b y a transfer f r o m the super-surplus fund or b y setting
a s i d e a p a r t o f c u r r e n t e a r n i n g s . At t h e e n d o f 1 9 2 1 t h e F e d e r a l
R e s e r v e B a n k of N e w Y o r k h a d , out of its past e a r n i n g s , a c c u m u l a t e d
a n o r m a l s u r p l u s f u n d e q u a l t o 100/o o f s u b s c r i b e d c a p i t a l a n d h a d
a l s o created a super-surplus fund. D u r i n g the year 1 9 2 2 the subs c r i b e d c a p i t a l o f the B a n k w i l l b e i n c r e a s e d b y i n c r e a s e s in the
c a p i t a l of m e m b e r b a n k s and b y additional b a n k s b e c o m i n g m e m b e r s .
T h e q u e s t i o n w h i c h G o v e r n o r S t r o n g r a i s e s is w h e t h e r t h e n o r m a l
s u r p l u s o f t h e F e d e r a l R e s e r v e B a n k s h o u l d b e i n c r e a s e d to 1 0 0 ^
o f the s u b s c r i b e d c a p i t a l a t the e n d o f 1 9 2 2 , b y a t r a n s f e r f r o m
s u p e r - s u r p l u s t o s u r p l u s o r b y c a r r y i n g a part, o f the e a r n i n g s
f o r the y e a r 1 9 2 2 to n o r m a l s u r p l u s b e f o r e a n y f r a n c h i s e t a x is
p a i d to t h e U n i t e d S t a t e s .
S e c t i o n 7 of the F e d e r a l R e s e r v e A c t r e f e r s t o " a s u r p l u s
fund" and "the surplus".
The l a w contemplates that there will b e
but a single surplus fund for each F e d e r a l R e s e r v e B a n k , a n d the
d i v i s i o n of the s u r p l u s into two s e p a r a t e f u n d s k n o w n as "normal
s u r p l u s " a n d " s u p e r - s u r p l u s " r e s p e c t i v e l y is a m e r e b o o k k e e p i n g
o p e r a t i o n w h i c h s h o u l d n o t e f f e c t t h e a m o u n t o f the f r a n c h i s e t a x
to b e p a i d to the G o v e r n m e n t . W h e n , t h e r e f o r e , n o r m a l surplus plus
super surplus equals or exceeds subscribed capital, S O o f current
e a r n i n g s , a f t e r t h e p a y m e n t o f e x p e n s e s a n d d i v i d e n d s , mast b e p a i d
to t h e U n i t e d S t a t e s a s f r a n c h i s e t a x , a n d o n l y 10 c p o f s u c h c u r r e n t
e a r n i n g s c a n b e c a r r i e d to s u r p l r s . I a m of the o p i n i o n , t h e r e f o r e ,
that a t t h e e n d o f the y e a r 1 9 2 2 a t r a n s f e r s h o u l d b a aude from
t h e s u p e r - s u r p l u s t o n o r m a l s u r p l u s o f a n a m o u n t e q u a l to the a m o u n t
b y w h i c h t h e s u b s c r i b e d c a p i t a l o f t h e F e d e r a l R e s e r v e Bank h a s
b e e n i n c r e a s e d d u r i n g t h e y e a r , and that i f t h e s u m o f t h e n o r m a l
s u r p l u s a n d t h e s u p e r - s u r p l u s is n o t l e s s t h a n t h e s u b s c r i b e d
c a p i t a l at that time n o n e o f the c u r r e n t e a r n i n g s of the b a n k
s h o u l d b e c a r r i e d to n o r m a l s u r p l u s and o n l y 1 0 $ o f t h e c u r r e n t
e a r n i n g s a f t e r t h e p a y m e n t o f e x p e n s e s and d i v i d e n d s s h o u l d b e
c a r r i e d to s u p e r - s u r p l u s .
Respectfully,
(Signed) W a l t e r S. L o g a n ,
General Counsel
WSL
0>MC
G O L D
Federal
Reserve
Bank of
Balance last
statement
June 22, 1922.
Gold
$
1 1 1 1 1 1 «
Aggregate
withdrawals
and transfers
to Agent's fund
$
X-3463
W a s h i n g t o n , D . C*
$
2,000,000,00
1,000,000.00
2,000,000.00
1,000,000.00
8,000,000.00
1,000,000.00
1,000,000.00
10,000,000.00
8,000,000.00
1,000,000.00
2,000,000.00
41,638.97
2.102.543.07
6,739,563.59
2,762,138.73
7.954.114.08
1,531,731.64
247,748.97
1,000,000.00
Debits
3,000,000.00 $
Credits
1,000,000.00
7,000,000.00
3,000,000.00
1,714,500.00
-
$
16,000,000.00 $
Total
Credits
14,000,000.00 $
$
133,859,822-46
120,699,788.58
86,465,436.31
45,246,310.12
236,886,265.16
101,745,535.29
31,992,767.73
82,085,649.71
39,905,395.92
67,690,691.19
131,239,031.81
123,707,209.16
91,428,569.74
45,204,671.15
234,783,722.09
95,005,971.70
29,239,629.00
74,131,535.63
38,373,664.28
67,442,942.22
* x i M f s
3,007,420.58
4,963,133.43
18,714,500.00 $
*
7,000,000.00 $
7,000,000.00
iges. in ownerSvuMmry of tihai
ship of gold by banks through
transfers and sc
?ttlements.
Balance in
fund at close
of business
June 29, 1922.
Set
Credits
|$ 24,000,269.70 |$ 1 , 4 7 2 , 3 5 6 , 6 7 6 . 8 3 |$ 1,478,356,676.83 U
$
2,000,000.00
1 1
2,620,790.65
T R A N S3 F E R S
m-
Total
Debits
*
, * ys-w«
3,000,000.00
1
$
0
2,000,000.00
2,000,000.00
. Sett]
Laments from June 23 , 1922 to June 29, 1<
?22
inclusiire.
Net
Debits
Aggregate
deposits and
transfers from
Agent's fund
»
Total
Deposits
1
•6»
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Gold
Withdrawals
Boston
$ 32,899,311.68
New York
119,127,720.47
Philadelphia
47,840,133-02
47,702,780.61
Cleveland
35,627,970.73
Richmond
22,044,619.87
Atlanta
106,355,133.03
Chicago
21,029,938.11
St. Louis
26,547,518.15
Minneapolis
30,913,676.44
Kansas City
9,385,631.71
Dallas
30,257,217.61
San Francisco
Total
$ 529,731,651.43 $
Federal
Reserve
Bank of
FEDERAL RESERVE BOARD
S E T T L E M E N T
F U N D
$
43,219,342.37
48,710,201.19
4o,591,104.16
22,002,980.90
96,252,5^.96
15.290.374a.52
23,785.379.42
24,959,562.36
7,853,900.07
31,723,968.64
24,000,269.70 }$ 534,446,151.43 |$
Decrease
1,543,914.10 $
3,620,790.65
41,638.97
2.102.543.07
6,739,563.59
2,762,138.73
7.954.114.08
1,531,731.64
247,748.97
Increase
21,573,629.79
7,420.58
4,963,133.43
.
•
-
'
26,544,183.80 |$ 26,544,183,80'
r
F E D E R A L
R E S E R V E
A G E N T S«
F U N D
X-3463 a
Washington, D. C.
W M V k A i i f ,
Federal
Reserve
Agent at
Balance last
statement
June 22, 1922.
Boston
$
118,000, OCX)
Ifew York
401,000,000
Philadelphia
141,389,260
Cleveland
Gold
Withdrawals
$
10,000,000
Deposits
$
145,000,000
Richmond
/
-
Atlanta
,
2,000,000
-
Minneapolis
16,000,000
-
-
Kansas City
10,000,000
San Francisco
Total
108,000,000
401,000,000
2,000,000
138,389,260
145,000,000
.
49,795.000
500,000
94,500,000
-
-
2,000,000
10,000,000
349,644,500
2,000,000
2,000,000
2,000,000
42,800,000
,
16,000,000
-
-
20,000,000
$
500,000
-
48,360,000
-
-
10,000,000
714,500
«•
$
-
-
-
-
-
174,166.500
$ 1,585,155,260
$
10,000,000
48,360,000
Dallas
$
5,000,000
-
-
2,000,000
-
10,000,000
3,000,000
-
42,800,000
Deposits
-
-
-
St. Louis
$
-
500,000
2,000,OCX)
Withdrawals
Balance at
close of
business
June 29. 1922.
Total
-
-
-
-
Total
*•
-
3,000,000
341,644,500
$
—
-
94,000,000
Chicago
Withdrawals
for
transfers
to bank
$
-
5,000,000
52,795,000
XVNCJ
U1JX
Deposits
through
transfers
from bank
W W M 1 W fc.-
Gold
$
2,714,500
•
173.452.000
714,500
$
14,000,000
$
22,714,500
$
14,500,000
$ 1,576,940,760
O
jtek
GO
FEDERAL RESERVE BOARD
WASHINGTON
J a n u a r y 3» 1 9 2 2 .
s t . 2521.
SUBJECT:
Revised form 38, Classific a t i o n of Discollated a n d
Purchased Bills-
Dear Sir:
W i t h reference to the B o a r d ' s l e t t e r St. 2 4 9 2 ,
d a t e d D e c e m b e r 17, 1 9 2 1 , t h e r e a r e b e i n % f o r w a r d e d t o
you today, under separate cover,
copies of revised
form 38, "Classification of Discounted a n d Purchased
B i l l s " f o r u s e of y o u r b a n k (and b r a n c h e s , if a n y )
during the current year.
Very truly yours,
E, L. Smead, C h i e f ,
Division of Reports and Statistics.
*
COPY SENT TO EACH F. R. AGENT.
FEDERAL RESERVE BOARD
WASHINGTON
J a n u a r y b, 1922.
st.2533.
SUBJECT:
Number of m e m b e r banks
accommodated through the
discount of paper during
1921.
Dear Sir:
W i l l y o u k i n d l y furnish the Board, for public a t i o n i n the forthcoming a n n u a l report, w i t h a
s t a t e m e n t s h o w i n g t h e n u m b e r o f m e m b e r "banks a c c o m m o d a t e d t h r o u g h the d i s c o u n t of p a p e r d u r i n g the y e a r
1 9 2 1 , d i s t r i b u t e d "by S t a t e s .
Very truly yours,
E. L. S m e a d , C h i e f ,
Division of Reports and Statistics,
(Copy sent to e a c h F e d e r a l R e s e r v e A g e n t . )
FEDERAL RESERVE BOARD
WASHINGTON
January 14, 1$22.
St.2548SUBJECT:
M o n t h l y report of c a s h r e s e r v e s
a n d other m o n e y h e l d by F . R.
Bank and Agent.
D e a r Sir:
I n o r a e r to e n a b l e t h e B o a r d to f u r n i s h t h e S r e a s u r j
Department with certain additional data for u s e in compiling
t h e m o n t h l y c i r c u l a t i o n s t a t e m e n t a n d to e x p e d i t e t h e p r e p a r a t i o n of the s t o c k of m o n e y table p u b l i s h e d r e g u l a r l y in
t h e F e d e r a l R e s e r v e B u l l e t i n , i t i s r e q u e s t e d thd,t t h e B o a r d
b e f u r n i s h e d w i t h a s t a t e m e n t a s of the e n d of e a c h m o n t h
s h o w i n g the a m o u n t of each c l a s s of m o n e y held b y the F e d eral r e s e r v e b a n k (including b r a n c h e s ) a n d the F e d e r a l reserve
a g e n t . F o r this purpose, f o n n 44-a has been revised, as per
c o p y a t t a c h e d , a n d a s u p p l y o f t h e n e w f o r m i s b e i n g s e n t to
y o u today u n d e r separate cover.
Ycrur a t t e n t i o n i s i n v i t e d to t h e r e q u e s t a t t h e b o t t o m
o f t > e f o r m , t h a t t h e r e p o r t b e m a i l e d o r t e l e g r a p h e d (in
d o l l a r s ) i n t i m e to r e a c h t h e B o a r d ' s o f f i c e s n o t l a t e r t h a n
o n e o ' c l o c k on the t h i r d b u s i n e s s d a y of e a c h m o n t h . It is
h o p e d t h a t t h i s w i l l a l l o w a m p l e t i m e to p e r m i t a c a r e f u l
c h e c k i n g o f t h e f i g u r e s b e f o r e t h e y a r e f u r n i s h e d to t h e B o a r d ,
i n o r d e r to o b v i a t e t h e n e c e s s i t y o f r e v i s i n g t h e c i r c u l a t i o n
s t a t e m e n t o n c e it is i s s u e d b y the T r e a s u r y D e p a r t m e n t . It
w i l l a l s o b e n o t e d that f o r the p u r p o s e s of the r e p o r t on f o r m
44-a, u n a s s o r t e d currency h e l d at the end of the m o n t h should
be d i s t r i b u t e d a m o n g the several classes of m o n e y held by the
b a n k , s u c h d i s t r i b u t i o n to b e b a s e d o n p e r c e n t a g e s d e t e r m i n e d by
e x p e r i e n c e i n s o r t i n g c u r r e n c y r e c e i v e d b y t h e b a n k . -When t h e
r e p o r t is m a d e by telegraph, code w o r d s a g a i n s t w h i c h n o a m o u n t s
are shown should be emitted.
f
*» 3 - ^
•
St.25^g.
.The first r e p o r t on r e v i s e s f o n n 4 4 - a s h o u l d b e rendered. a s a t c l o s e o f "business o n J a n u a r y 3 1 , 1 $ 2 2 . I n t h i s
c o n n e c t i o n it is r e q u e s t e d that, i f p r a c t i c a b l e the B o a r d b e
f u r n i s h e d n o t l a t e r than January 2 8 w i t h a statement giving
g o l d b u l l i o n a n d c o i n h o l d i n g s of t h e F e d e r a l r e s e r v e b a n k
and F e d e r a l reserve agent, distributed in the m a n n e r called
f o r b y i t e m s 1 t o 4 a n d 8 to 1 0 o f r e v i s e d f o n n 4 4 - a , a s a t
c l o s e o f b u s i n e s s on t h e l a s t d a y o f e a c h p o n t h i n 1 5 2 1 *
Very truly yours,
GOVERNOR-
Enclosure.
L e t t e r s e n t to a l l F . E . A g e n t s .
C22
• Form 44-a
• (Revised Jan.1922)
CASH RESERVES AND OTHER M O S E Y H E L D BY THE FEDERAL R E S E R V E BANK
AND AGENT AT
IS
O n the l a s t d a y of the m o n t h of
Code
I ten.
G o l d h o l d i n g s of F . R . B a n k :
1. U . S. M i n t a n a A s s a y O f f i c e b a r s
2. U. S. g o l d coin
3> F o r e i g n g o l d c o i n
4. G o l d a t A s s a y o f f i c e a w a i t i n g s e t t l e m e n t
5- Golo. c e r t i f i c a t e s
6. G o l d S e t t l e m e n t F u n d - F . R . B o a r d
7.
Gold R e d e m p t i o n F u n d - U. S. Treasurer
• G o l d h o l d i n g s of F . R A g e n t :
8. U. S. M i n t a n a Assav Office b a r s
.
9- U . S. g o l d coin
1 C . F o r e i g n g o l d c o i n ..
11. Gold certificates
1 2 . Golo. F u n a - F . R . B o a r a . ....
13- G o l d R e d e m p t i o n F u n d - U . S . T r e a s u r e r
Other reserve cash:
l4. T r e a s u r y n o t e s of I 8 5 O
•
>
15- U n i t e d S t a t e s n o t e s
16. S i l v e r c e r t i f i c a t e s ..
17- S t a n d a r d s i l v e r d o l l a r s
18. S u b s i d i a r y s i l v e r
T 0 T A T C A S F R E S E R V E S ' ( t o a g r e e w i t h i t e m T E N D . o n four. 3 4 ) >
Non-reserve cash:
19* N a t i o n a l b a n k n o t e s
20, F . R . b a n k n o t e s o f o t h e r F . R . b a n k s
21. F R . n o t e s o f o t h e r F . R . b a n k s
22. F R . n o t e s - o w n - o u t s t a n d i n g
2 3 . F . R . n o t e s - o w n - h e l a .by F . R . b a n k a n d b r a n c h e s
24. F. R. n o t e s - own - forwarded f o r redemption
2 5 . F . R . b a n k n o t e s - o w n - h e l d b y b a n k a n a brancn.es .
G R A N D TOTAL (Cash r e s e r v e s p l u s items 19 - 2 5 )
Amoun t
BACK
REAL
RICE
ROAN
RUSS
RAGG
RUSH
RELY
RIST
ROTE
RAID
ROLF
REIN
RIDE
RUTH
RADD
RENO
F.IEF
,ROBB
RUHR
RAKE
RENT
RACE
RITT.
ROMA
RUFF
RAND
Federal Reserve Agent.
NOTE:
F o r p u r p o s e s o f t h i s s t a t e m e n t , u n a s s o r t e d c u r r e n c y h e l d a t t h e e n d of t h e
m o n t h s h o u l d be distributed, on a p e r c e n t a g e b a s i s , a m o n g the several
c l a s s e s of c u r r e n c y h e l d b y t h e F . R . B a n k .
T h i s r e p o r t s h o u l d b e m a i l e d o r t e l e g r a p h e d (in d o l l a r s ) i n t i m e to
r e a c h t h e Board's o f f i c e s n o t l a t e r t h a n o n e o ' c l o c k o n t h e t h i r d b u s i n e s s
day of every m o n t h . Telegraphic reports should be followed by ccmplete
m a i l s t a t e m e n t s a s s o o n a s p r a c t i c a b l e . The t e l e g r a m s h o u l d n o t g i v e the
c o a e w o r d s a g a i n s t which, n o a m o u n t s a r e r e p o r t e d .
St.588.
FEDERAL RESERVE BOARD
WASHINGTON
FEBRUARY G ,
1922.
st.2556.
SUBJECT:
M a t u r i t y distribution of
certificates on balance
sheet, form 3^-
Dear Sir:
O n examining balance sheets form 3 ^ received from
s o m e o f t h e F e d e r a l r e s e r v e b a n k s , it is n o t e d t h a t o c c a s i o n a l l y t h e f i g u r e s r e p o r t e d o n the r e v e r s e s i d e u n d e r t h e
h e a d i n g " U . S . C e r t i f i c a t e s of I n d e b t e d n e s s " , c o d e s L A S T to
TOTTGr, i n c l u d e U . S . T r e a s u r y notes*.
Amounts reported under
the h e a d i n g m e n t i o n e d s h o u l d r e p r e s e n t the m a t u r i t y d i s t r i b u t i o n o f c e r t i f i c a t e s o f i n d e b t e d n e s s o n l y , a n d it w i l l
b e appreciated, therefore, if h e r e a f t e r U . S. T r e a s u r y notes
a r e e x c l u d e d from the m a t u r i t y c l a s s i f i c a t i o n b o t h in the
w e e k l y f o r e 3 ^ t e l e g r a m a n d i n t h e irail r e p o r t o n f o r m 3 ^ *
Vary truly yours,
Walter L. Eddy,
Assistant Secretary.
L e t t e r s e n t to e a c h F . R . A g e n t .
FEDERAL RESERVE BOARD
WASHINGTON
February 20, 1922.
St.2608.
SUBJECT:
Schedule on Personnel for
1®21 Annual Report.
Dear Sir;
R e f e r r i n g to the s c h e d u l e on p e r s o n n e l f u r n i s h e d
i n r e s p o n s e t o the B o a r d ' s l e t t e r X - J 2 7 4 o f D e c e m b e r 1 § ,
it h a s b e e n d e c i d e d , p e n d i n g the a d o p t i o n of a u n i f o r m
s y s t e m of classifying officers a n d employees b y all F e d e r a l r e s e r v e "banks, t o u s e a f o r m o f s c h e d u l e i n t h e 1 9 2 1
a n n u a l r e p o r t that w i l l a d m i t of r e a d y c o m p a r i s o n w i t h
the f i g u r e s for D e c e m b e r 3 1 , 1 9 2 0 , a s s h o w n i n the 1 9 2 0
annual report.
Accordingly, we are enclosing herewith a
c o p y of the s c h e d u l e for y o u r b a n k a n d w o u l d r e q u e s t that
y o u a d v i s e the B o a r d w h e t h e r the figures for the two y e a r s
a r e on a comparable basis, a n d if not that n e c e s s a r y changes
in the 1921 figures b e indicated.
Vary truly yours,
.Walter L. Eddy,
Assistant Secretary.
L e t t e r sent to F . R . A g e n t s a t a l l b a n k s e x c e p t A t l a n t a ,
FEDERAL RESERVE BOARD
WASHINGTON
!'a.rch b, 1922
"St. 2b 19.
SUBJECT:
Condition Reports of State B a n k
a n d T r u s t C o m p a n y l u m b e r s , F o r m IO5.
Bear Sir:
T h e r e a r e "being f o r m r d e d t o y o u t o d a y r u d e r s e p a r a t e c o v e r "by
registered mail
c o p i e s o f F o r m 1 0 5 r e v i s e d a s o f F e b r u a r y 15,
1922.
P l e a s e m a i l t h r e e c o p i e s o f t h e f o r m to e a c h s t a t e b a n k a n d
trust c o m p a n y m e m b e r in y o u r district w i t h instructions to h o l d the
b l a n k forms pending receipt of a c a l l for condition reports, w h e n
t h e y s h o u l d b e p r o m p t l y f i l l e d out a n d two c o p i e s m a i l e d to y o u - in
no case later than 10 days after receipt of the call.
It w i l l b e n o t e d that the a b o v e m e n t i o n e d f o r m p r o v i d e s that loans
a n d d i s c o u n t s shall b e s h o w n g r o s s w i t h o u t d e d u c t i o n s o n a c c o u n t of
b i l l s r e d i s c o u n t e d w i t h the F e d e r a l r e s e r v e a n d other b a n k s , a l s o that
the a g g r e g a t e a m o u n t of r e d i s c o u n t e d b i l l s a r e to b e s h o w n in the b o d y
o f t h e s t a t e m e n t a g a i n s t l i a b i l i t y i t e m ITo. 3 O . S p e c i a l a t t e n t i o n o f
m e m b e r b a n k s s h o u l d b e c a l l e d t o t h e f a c t t h a t t h e t o t a l a m o u n t of b i l l s
p a y a b l e a n d r e d i s c o u n t s a s r e p o r t e d a g a i n s t i t e m s 2 9 a n d ~j>0 o n t h e f a c e
of t h e f o r m s h o u l d b e in a g r e e m e n t w i t h totals r e p o r t e d a g a i n s t items 5
a n d 9, r e s p e c t i v e l y , o f s c h e d u l e 4 o n the r e v e r s e side. I n v i e w of the
above change in form, m e m b e r banks should be a d v i s e d that the general
i n s t r u c t i o n s , i s s u e d b y the B o a r d u n d e r date of D e c e m b e r 1921, a r e still
in e f f e c t , b u t that the i n s t r u c t i o n s r e l a t i n g to items f o r m e r l y d e d u c t e d
f r o m g r o s s l o a n s a n d d i s c o u n t s n o w a p p l y to c o r r e s p o n d i n g i t e m s s h o r n o n
s c h e d u l e 4.
I n o r d e r t h a t the c o m p i l a t i o n o f the B o a r d ' s a b s t r a c t showing the
c o n d i t i o n o f a l l state b a n k a n d t r u s t c o m p a n y m e m b e r s c o m b i n e d a s of the
d a t e o f t h e n e x t c a l l m a y n o t b e u n d u l y d e l a y e d , it w i l l b e a p p r e c i a t e d
if t h e r e p o r t s a r e f o r w a r d e d t o t h e B o a r d a s s o o n a s p r a c t i c a b l e a f t e r
t h e y a r e r e c e i v e d b y the F . B. b a n k . S p e c i a l effort s h o u l d b e m a d e to
see that a l l the r e p o r t s r e a c h the B o a r d w i t h i n 2 0 d a y s a f t e r d a t e of
c a l l . M e m b e r b a n k s s h o u l d b e i n s t r u c t e d to u s e o n l y t h e f o r m s r e v i s e d
a s of F e b r u a r y 15, 1922 in m a k i n g out c o n d i t i o n r e p o r t s s u b m i t t e d in
compliance w i t h the next call.
(All Agents)
Very truly yours,
W a l t e r L. E d d y ,
Assistant Secretary.
FEDERAL RESERVE BOARD
WASHINGTON
L & r c h b, 1922.
st.2629.
SUBJECT:
Rediscounts.
Dear Sir:
In a c c o r d a n c e w i t h the r e c o m m e n d a t i o n of the F e d e r a l Reserve
A g e n t s at t h e i r c o n f e r e n c e w i t h the F e d e r a l R e s e r v e B o a r d i n O c t o b e r
1 9 2 1 , t h e B o a r d h a s r u l e d t h a t i n t h e f u t u r e "bills r e d i s c o u n t e d "by m e m b e r "banks a n d "by F e d e r a l r e s e r v e b a n k s s h a l l "be i n c l u d e d w i t h o t h e r
d i s c o u n t e d b i l l s o n t h e a s s e t s i d e o f c o n d i t i o n r e p o r t s a n d set u p s e p arately as a n e w item among liabilities, instead of being reported as a
c o n t i n g e n t l i a b i l i t y b e l o w t h e b o d y o f c o n d i t i o n r e p o r t s a s h a s b e e n the
p r a c t i c e i n t h e p a s t . A s u p p l y o f F a r m 1 0 5 , r e v i s e d a s o f F e b r u a r y 15,
1 9 2 2 to p r o v i d e f o r the i n c l u s i o n o f r e d i s c o u n t s i n t h e b o d y o f t h e r e p o r t ,
w i l l b e f o r w a r d e d to y o u t o d a y f o r u s e o f S t a t e b a n k a n d T r u s t c o m p a n y
members in preparing their next condition reports.
I n case one F e d e r a l r e s e r v e b a n k r e d i s c o u n t s p a p e r w i t h a n o t h e r in
t h e f u t u r e , t h e r e d i s c o u n t i n g o r b o r r o w i n g b a n k w i l l i n c l u d e the a m o u n t
o f r e d i s c o u n t e d b i l l s w i t h its b i l l h o l d i n g s u n d e r the g e n e r a l c a p t i o n
"2-ills d i s c o u n t e d f o r m e m b e r b a n k s " , a n d r e p o r t the a m o u n t t h e r e o f a g a i n s t
liability item "Bills rediscounted w i t h other Federal reserve banks", which
will appear immediately preceding the item "All other liabilities",. The
discounting or lending b a n k should change the general c a p t i o n "Bills discounted" a p p e a r i n g in the present statement to "Bills d i s c o u n t e d for m e m b e r
banks"', a n d i n s e r t a n e w i t e m " B i l l s d i s c o u n t e d f o r o t h e r F e d e r a l r e s e r v e
banks" immediately b e f o r e item "Bills bought in open market". Inasmuch as
the a m o u n t s of b i l l s r e d i s c o u n t e d w i t h o t h e r F e d e r a l r e s e r v e b a n k s w i l l b e
i n c l u d e d i n t h e t o t a l earning, a s s e t s o f t h e b o r r o w i n g b a n k s a s w e l l a s i n
those of the l e n d i n g b a n k s , the c a p t i o n " T o t a l e a r n i n g a s s e t s " i n the
B o a r d ' s d e t a i l e d s t a t e m e n t of c o n d i t i o n of F e d e r a l r e s e r v e b a n k s a n d in
statements of borrowing banks will read "Total earning assets, including
rediscounts with other Federal reserve banks".
No c h a n g e s w i l l b e m a d e in the B o a r d ' s consolidated p r e s s statement
for the r e a s o n that all inter-Federal reserve b a n k discount operations
fflast b e e l i m i n a t e d i n o r d e r to o b t a i n a c o n s o l i d a t e d s t a t e m e n t o f the
r e s o u r c e s a n d l i a b i l i t i e s o f t h e S y s t e m a s a w h o l e . A s t h e s u m of r e s o u r c e s
a n d l i a b i l i t i e s in t h e d e t a i l e d s t a t e m e n t w i l l , t h e r e f o r e , e x c e e d the r e sources a n d l i a b i l i t i e s s h o w n i n the c o n s o l i d a t e d s t a t e m e n t b y the a m o u n t
of p a p e r u n d e r rediscount b e t w e e n F e d e r a l r e s e r v e b a n k s , a note w i l l be
a d d e d to t h e B o a r d ' s d e t a i l e d s t a t e m e n t o f r e s o u r c e s a n d l i a b i l i t i e s t o
s h o w that the f i g u r e s a r e inclusive of r e d i s c o u n t s b e t w e e n F e d e r a l r e s e r v e
-
2
-
st.2625.
"banks - A s a m p l e f o r m o f t h e r e v i s e d s t a t e m e n t is e n c l o s e d , i n w h i c h n e w
items are shown in parentheses a n d on w h i c h lines have b e e n drawn through
i t e m s t o "be e l i m i n a t e d * O n t h e d a i l y b a l a n c e s h e e t , f o r m
t h e re d i s c o u n t i n g or b o r r o w i n g b a n k s h o u l d i n c l u d e p a p e r u n d e r r e d i s c o u n t i n i t s
b i l l h o l d i n g s a n d report the total a m o u n t t h e r e o f i n the M i s c e l l a n e o u s L i a bilities b l o c k against code COTT* The lending b a n k s h o u l d report rediscounts
for other Federal Reserve Banks following code B U S K against code BARR* Data
w i t h r e g a r d to m a t u r i t i e s on the r e v e r s e side of the f o r m s h o u l d b e e x clusive of rediscounts for other F e d e r a l R e s e r v e B a n k s , i.e., thsy should
cover paper discounted for m e m b e r banks in your own district, and acceptances
b o u g h t in the o p e n m a r k e t . I n a s m u c h as n o F e d e r a l r e s e r v e b a n k is n o w red i s c o u n t i n g a n y o f i t s p a p e r , n o c h a n g e s w i l l b e m a d e i n t h e f o r m of t h e
B o a r d 1 s w e e k l y s t a t e m e n t u n t i l it a g a i n b e c o m e s n e c e s s a r y f o r s o m e F e d e r a l
r e s e r v e b a n k to r e d i s c o u n t w i t h a n o t h e r F e d e r a l r e s e r v e b a n k *
I n v i e w o f t h e r e v i s e d f o r m of s t a t e m e n t a n d w i t h t h e i d e a of
d e f i n i t e l y d e t e r m i n i n g i n a l l c a s e s the e x t e n t to w h i c h a F e d e r a l r e s e r v e
b a n k f i n d s it n e c e s s a r y t o o b t a i n a c c o m m o d a t i o n f r o m a n o t h e r F e d e r a l r e s e r v e b a n k , it i s d e s i r a b l e , i n c a s e b a n k e r s 1 a c c e p t a n c e s a r e s o l d b y o n e
F e d e r a l r e s e r v e b a n k to a n o t h e r for the p u r p o s e of o b t a i n i n g a c c o m m o d a t i o n ,
that the s e l l i n g b a n k e n d o r s e s u c h a c c e p t a n c e s , in w h i c h case t h e y w i l l b e
s h o w n a m o n g n B i l l s r e d i s c o u n t e d w i t h o t h ^ r F e d e r a l r e s e r v e oanks 1 1 a n d " B i l l s
d i s c o u n t e d f o r o t h e r F e d e r a l r e s e r v e b a n k s * b y the s e l l i n g a n d p u r c h a s i n g
b a n k s , r e s p e c t i v e l y . W h e n b a n k e r s 1 a c c e p t a n c e s are s o l d at the request of
t h e p u r c h a s i n g b a n k , a n d n o t a t t h e r e q u e s t o f t h e s e l l i n g b a n k f o r the
p u r p o s e of o b t a i n i n g a c c o m m o d a t i o n , they n e e d not b e e n d o r s e d b y the s e l l i n g
b a n k , a n d t h e a m o u n t w i l l n o t b e s h o w n a m o n g rediscounts n o r t a k e n i n t o
consideration.in calculating adjusted reserve percentages*
Very truly yours,
GOVERNOR.
Enclosure.
L e t t e r sent t o a l l F » R < Agents*•
Ci
CQ
R E S O U R C E S A11D L I A B I L I T I E S O F T H E F E D E R A L R E S 2 E V E BA11KS A T C L O S E O F B U S I N E S S
1922.
(In t h o u s a n d s of d o l l a r s )
St.252
R E S O U R C E S
F e d e r a l Reserve B a n k of Boston N e w York Eaila. Cleve.
R i c h . A t l a n t a C h i c a g o S t . L o u i s M i n n . K a n s . C y , Dallas S a n F r a n .
Gold and gold certificates
G o l d s e t t l e m e n t f u n d - F- R. B o a r d
T o t a l g o l d h e l d b y "banks
G o l d w i t h F. R. A g e n t s
Gold redemption fund
Total gold reserves
Legal tender notes, silver, etc.
Total reserves
.
a
3ills-diSGemated-r-4 )
,
(Bills d i s c o u n t e d f o r m e m b e r "banks:)
Secured by U.S.Govt, obligations
All other
(Total)
(Bills d i s c o u n t e d for o t h e r F. R. B a n k s )
Bills b o u g h t in o p e n market
Total-bills-on-hand
U . S. b o n d s a n d n o t e s
U. S. certificates of indebtedness
One-year certificates (pittmin Act)
All other
Municipal warrants
ge%al-eaya.4ng-si-ssats
(Total earning assets including
rediscounts with other F.R. Banks)
Bank premises
5 ^ R e d e m p t i o n f u n d a g a i n s t F. R.
Bank notes
Uncollected items
All other resources
TOTAL RESOURCES*
(a) I n c l u d e s -bills—discount'ed - f o r
&feher-Fr--R.—Barf£&r-via:
( * I n c l u d i n g r e d i s c o u n t s "between F e l e r a l r e s e r v e b a n k s . )
o
eo
•
C 0
B E S O X J R G E S A N D L I A B I L I T I E S O F T H E F E D E R A L R E S E R V E B A N K S A T C L O S E OF BUSIiSSS
A ^ I n thousands of dollars)
.
C a p l t r ^ n r
6
Bati£
B
°et0n
H e
'"r0rk
P h l l a
-
0 1
*w-
wi>*
8
C h l « g o St.k«i. UUm.
1922,
St.2627* ^ a"
Kan,.Cy. Dallas San FrJa.
Surplus
Reserved for Govt, franchise tax
DepositsGovernment
Member b a n k - reserve account
All other
Total deposits
F. R. notes in actual circulation
F* f R . B a n k n o t e s i n c i r c u l a t i o n n e t liabilityD e f e r r e d availability items
--(Bills r e d i s c o u n t e d w i t h o t h e r F . R . B a n k s )
A l l other liabilities
TOTAL LIABILITIES*
R a t i o of t o t a l r e s e r v e s to d e p o s i t a n d F . R .
n o t e liabilities combined, p e r cent
Geatiagent-liabili^y-as-eai.ePsei'-eH-i.iseeHR%ed-papeF-p»d$rsee'aHte4-wifch-etheF
Fr-Sr-Bdfiks
Contingent liability on bills purchased
for foreign correspondents
F. R . notes outstanding
F . R« notes h e l d by banks
F, R . notes in actual circulation
Bills-diseennSed
(Bills d i s c o u n t e d for m e m b e r b a n k s )
B i l l s b o u g h t i n o p e n inarket
U - S . c e r t i f i c a t e s of indebtedness
FEDERAL RESERVE NOTES OUTSTANDING A N D IN ACTUAL CIRCULATION
D I S T R I B U T I O N O F B I L L S , U» S , C E R T I F I C A T E S O F I N D E B T E D N E S S A N D M U N I C I P A L W A R R A N T S B Y M A T U R I T I E S
fithin 15 days
l 6 to 3 0 d a y s
3 1 to 6 0 days
6 l to 9 0 d a y s
Over $0 days
Total
FEDERAL RESERVE BOARD
WASHINGTON
M a r c h 13, 1922.
st.2639.
SUBJECT:
R e c o r d of F e d e r a l R e s e r v e B a n k
Discount Rates 1914 - 1$21.
Dear Sir:
The B o a r d has recently u n d e r t a k e n the preparation
of a comprehensive report covering a l l changes in F e d e r a l
R e s e r v e B a n k d i s c o u n t r a t e s , f r o m the o p e n i n g of the b a n k s
to the e n d of the year 1921. A c o p y of the g a l l e y p r o o f
o f t h a t p a r t o f the r e p o r t w h i c h r e f e r s to y o u r h a n k is
enclosed herewith.
It w i l l h e a p p r e c i a t e d if y o u w i l l kindly- h a v e the
changes in rates c a r s f u l l y c h e c k e d a g a i n s t the r e c o r d s of
your hank, indicating any errors which m a y he found either
i n r a t e s o r d a t e s , a n d r e t u r n t h e p r o o f t o the B o a r d a t
y o u r e a r l y c o n v e n i e n c e . I n the e v e n t c h a n g e s are f o u n d
n e c e s s a r y , it w i l l b e a p p r e c i a t e d if y o u w i l l k i n d l y f u r n i s h t h e B o a r d , if p r a c t i c a b l e , w i t h c o p i e s o f d i s c o u n t
r a t e s c h e d u l e s i s s u e d b y the b a n k a t the t i m e t h e r a t e s
q u e s t i o n e d were put into e f f e c t . E x c e p t for the year 1921,
p r a c t i c a l l y a l l t h e i n f o r m a t i o n s h o w n is b a s e d o n t a b l e s
r e l a t i n g to d i s c o u n t r a t e s a s p u b l i s h e d i n t h e B o a r d ' s
annual reports.
Very truly yours,
W. Hoxton,
Secretary.
Enclosure.
L e t t e r to a l l F . R . A g e n t s .
FEDERAL RESERVE BOARD
WASHINGTON
M a r c h 1 4 , 1$22.
St.2642.
SUBJECT;
Weekly "Float" Statement.
Dear Sir:
Inasmuch as no deductions are n o w b e i n g made from
d e p o s i t l i a b i l i t i e s f o r the p u r p o s e o f c a l c u l a t i n g r e s e r v e
p e r c e n t a g e s a n d a s t h e r e is n o w a d a i l y F e d e r a l r e s e r v e
n o t e s e t t l e m e n t b e t w e e n F e d e r a l r e s e r v e b a n k s , i t is f e l t
that the c o l u m n i n d i c a t i n g the a m o u n t of " f l o a t a f t e r deducting net investment in transfers and National a n d F, R,
B a n k n o t e s " i n the B o a r d ' s w e e k l y " f l o a t " s t a t e m e n t n o
longer has any special significance.
Accordingly, begin-
n i n g w i t h t h e s t a t e m e n t f o r the w e e k e n d i n g , J a n u a r y 4, a
c o p y of w h i c h is a t t a c h e d h e r e t o , the s t a t e m e n t s h o w s the
a m o u n t of " f l o a t " a s m e a s u r e d b y the d i f f e r e n c e b e t w e e n u n c o l l e c t e d items a n d d e f e r r e d a v a i l a b i l i t y i t e m s , a n d the
float after deduction of net investments in transfers and
all non-reserve cash.
Very truly yours,
Walter L, Zddy,
Assistant Secretary.
Enclosure.
Letter
sent to all F. R. Agents.
FEDERAL RESERVE BOARD
WASHINGTON
M a r c h 22, 1922.
St2674.
SUBJECT:
A b s t r a c t of C o n d i t i o n R e p o r t s
ox S t a t e B a n k a n a T r u s t C o m ^ a n y
M e m b e r s a n d o f a l l M e m b e r Bu,nks
a s of D e c e m b e r }1, 1921.
Dear Sir:
W e a r e f o r w a r d i n g to y o u u n d e r s e p a r a t e c o v e r
copies of the B o a r d * s A b s t r a c t No, l6 s h o w i n g
the condition of State B a n k and Trust Company members
a n d of a l l m e m b e r b a n k s as at close of b u s i n e s s o n
December 31, 1$21.
Consolidated figures for all mem-
ber banks, b o t h National and State, are shown on pages
1 a n d 12,
P l e a s e f o r w a r d o n e c o p y o f t h e a b s t r a c t to e a c h
State B a n k and Trust Company m e m b e r in your district
t h a t h a s e x p r e s s e d a d e s i r e to r e c e i v e c o p i e s o f a b stracts as issued.
Very truly yours,
' S . L , Smdu,d, C h i e f ,
D i v i s i o n o f R e p o r t s atia S t a t i s t i c s .
L e t t e r to a l l F , R . A g e n t s .
FEDERAL RESERVE BOARD
WASHINGTON
M a r c h 22, 1922.
st.2675.
D e a r Sir:
It w i l l be a p p r e c i a t e d if y o u w i l l
furnish- t h e Board, w i t h f i f t e e n ( 1 5 ) c o p i e s
of t h e A n n u a l R e p o r t c o v e r i n g o p e r a t i o n s o f
y o u r h a n k for the calendar y e a r 1921 as soon
as practicable after they are received from
the printer*
Very truly yours,
W a l t e r L - Eddst
Assistant Secretary.
(All F . R . Agents, except D a l l a s . )
FEDERAL RESERVE BOARD
WASHINGTON
J u n e 1, 1 9 2 2 .
St. 2809
SUBJECT:
Quarterly Bank Premises Report.
Dear Sir:
T h e r e are attached hereto two n e w forms for u s e in furn i s h i n g the B o a r d w i t h q u a r t e r l y i n f o r m a t i o n in r e g a r d to the
status of b a n k building and remodeling operations.
Form St. 2810
s h o u l d b e u s e d in r e p o r t i n g the status o f n e w b u i l d i n g o p e r a t i o n s
or of p r o p e r t y p u r c h a s e d for the purpose of constructing a n e w
building thereon, w h i l e F o r m St. 2810-a should b e u s e d in the
case of buildings which-have been or are to b e remodeled. Reports
o n t h e s e f o r m s s h o u l d b e s u b m i t t e d a s o f M a r c h 31, 1 9 2 2 , a n d a t
the end of each quarter thereafter, and should be a c c o m p a n i e d w i t h
a brief statement summarizing developments in connection with
building or remodeling operations during the current period. A report for the first quarter of the p r e s e n t y e a r should b e s u b m i t t e d
covering e a c h b u i l d i n g or b u i l d i n g site (including p r o p e r t y sold),
but thereafter reports need be prepared covering only buildings
under construction or w h i c h a r e being remodeled.
W h i l e it is b e l i e v e d t h a t t h e i t e m s a p p e a r i n g o n t h e n e w
forms are in the main self-explanatory, the following suggestions
are offered in order that reports from all Federal Reserve Banks
a n d B r a n c h e s m a y b e p r e p a r e d , so f a r a s p r a c t i c a b l e , o n a u n i f o r m
basis.
T h e o r i g i n a l c o s t o f l a n d , i n c l u d i n g b u i l d i n g s if a n y ,
(item l ) should represent t h e amount p a i d to t h e v e n d o r . Incidental
expenses connected w i t h purchase (item 2 ) should include s u c h exp e n s e s a s c o m m i s s i o n s , cost of t i t l e e x a m i n a t i o n , f e e s a n d t a x e s for
recordation, legal expenses, surveys, etc,
P r e l i m i n a r y e x p e n d i t u r e s in c o n n e c t i o n w i t h n e w b u i l d i n g
operations should include testing, surveying, cost of preliminary
building plans, consultation expenses and traveling expenses incident
to p r e l i m i n a r y planning, and other similar expenses, including the
s a t i s f a c t i o n o f u n e x p i r e d l e a s e s , n o t c h a r g e a b l e to c o n s t r u c t i o n c o s t s .
Cost of vaults should represent the actual c o n s t r u c t i o n cost
of the v a u l t , e x c l u s i v e of the cost of the v a u l t door, v a u l t l i n i n g s
and novable equipment inside the v a u l t .
In case the w a l l s of the
-
2
-
St.
vault a r e integral w i t h the walls of the building or the latter are
r e i n f o r c e d as a n a d d e d vault p r o t e c t i o n , the a d d i t i o n a l cost of the
foundation of the building incident to the use thereof in connection
w i t h the vault should be considered as a part of the cost of the vault
F i x e d m a c h i n e r y and equipment for the p u r p o s e of this
report should include all large p e r m a n e n t units such as boilers,
engines, dynamos, elevators, heating, lighting, and ventilating
systems, pumps, hoisting apparatus, plumbing, wiring, etc.
M i s c e l l a n e o u s b u i l d i n g c o n s t r u c t i o n or r e m o d e l i n g expenses
incurred b y Federal Reserve Bank should cover salaries p a i d to
officers or e m p l o y e e s of the b a n k in c o n n e c t i o n w i t h the b u i l d i n g ,
or any other office expense such a s travel, inspection, surveys and
tests, all of w h i c h a r e m a d e apart and a s i d e f r o m s e r v i c e s p e r f o r m e d
u n d e r s u p e r v i s i o n of the a r c h i t e c t or b u i l d e r .
F i x t u r e s of a p e r m a n e n t or s e m i - p e r m a n e n t n a t u r e , such a s
counters, cages, shelving, etc., s h o u l d be c o n s i d e r e d as a part of
the cost of the b u i l d i n g as r e p o r t e d a g a i n s t i t e m 8 - a of F o r m
S t . 2 8 1 0 ' a n d i t e m 4 - a of F o r m S t . 2 8 1 0 - a , w h i l e f u r n i t u r e a n d e q u i p m e n t s h o u l d b e c h a r g e d to F u r n i t u r e a n d E q u i p m e n t a c c o u n t o n F o r m Inla n d not enter into the cost of the b u i l d i n g s a s r e p o r t e d o n t h e s e
f orms.
I n s u b m i t t i n g t h e f i r s t r e p o r t o n t h e n e w f o r m s , it w i l l
b o a p p r e c i a t e d if y o u w i l l a t t a c h a d e t a i l e d l i s t e n u m e r a t i n g t h e
different k i n d s of m a c h i n e r y and equipment i n c l u d e d in i t e m 8 - d of
Form St. 2810 and item U-d of Form St. 2810-a.
Very truly yours,
G o v e r n o r .
L E T T E R TO A L L F. R. AGENTS.
*
Federal Reserve Board.
fForm S t . 2 8 1 0
*
PREMISES REPORT QUARTER ENDING
, igg
Federal R e s e r v e B a n k or B r a n c h at
P r o p e r t y l o c a t e d at (street location)
.(Separate report should be made f o r each B u i l d i n g )
JffiW
BUILDING
0PEBA1I0NS
[
Current
Quarter
Total
to d a t e
complete
Building Site
1. O r i g i n a l c o s t o f l a n d , i n c l u d i n g b u i l d ings , if a n y
$
2. Incidental expenditures connected w i t h
purchase
3- Cost'of w r e c k i n g old b u i l d i n g s
Total ( 1 + 2 + 3 )
~
5> L e s s p r o c e e d s f r o m s a l e o f s a l v a g e d
material
6Cost of b u i l d i n g site
New Building
7• P r e l i m i n a r y e x p e n d i t u r e s
S. Cost of c o n s t r u c t i o n :
(a) B u i l d i n g , e x c l u s i v e o f v a u l t s and
f i x e d m a c h i n e r y a n d e q u i p m e n t ..
(b) Vault c o n s t r u c t i o n , i n c l u d i n g a n y
a d d i t i o n a l s t r u c t u r e or f o u n d a t i o n
made necessary by vault
(c) V a u l t e q u i p m e n t , i n c l u d i n g d o o r s ,
lining, and all interior equipment
(d) F i x e d m a c h i n e r y a n d e q u i p m e n t
9' M i s c e l l a n e o u s b u i l d i n g c o n s t r u c t i o n e x penses incurred by Federal Reserve Bank
10.Fees: (a) A r c h i t e c t s
(b) E n g i n e e r s
11*
Cost of n e w b u i l d i n g
12.
Cost of b u i l d i n g and b u i l d i n g site
(6 + 11)
13-Depreciation allowances charged off:
( a ) C h a r g e d to c u r r e n t n e t e a r n i n g s
( b ) C h a r g e d to s u p e r - s u r p l u s . . , .
(c)
Total
lU.Book v a l u e of .property (12 - 13c) .....
MEMORANDA.
15.Reserves a g a i n s t d e p r e c i a t i o n (as s h o w n on F o r m 3*0 •
(a) Charged to c u r r e n t n e t e a r n i n g s
( b ) C h a r g e d to s u p e r - s u r p l u s
'
(c)
Total
16.Floor space:
(a) O c c u p i e d b y F e d e r a l R e s e r v e B a n k
(b) R e n t e d
*
(c) U n o c c u p i e d
)
(d
Total f l o o r a r e a in n e w b u i l d i n g
.
$
$
$
.
.
Sq.
Sq.
Sq.
Sq.
Ft.
Ft.
Ft.
Ft.
f
| > Federal Reserve Board.
Form St. 2810-a
338
B A M PREMISES REPORT QUARTER ENDING
Federal'Reserve B a n k or Branch at
Property located at (street l o c a t i o n )
Total
REMODELED BUILDING OPERATIONS
Estimated
cost to
complete
to
date
Current
Quarter
1. Original cost of land and b u i l d i n g . . £
2. I n c i d e n t a l e x p e n d i t u r e s c o n n e c t e d
with purchase I . . . .
Total (1 + 2)
34. C o s t o f remodeling:
(a) Building, exclusive of vaults
and fixed machinery and equipment
(b) Vault construction, including
any additional structure or
foundation made necessary by
vault . . . . . .
.
(c) Vault equipment, including doors,
l i n i n g , a n d a l l i n t e r i o r equipment
(d) Fixed machinery and equipment,
5* M i s c e l l a n e o u s b u i l d i n g r e m o d e l i n g e x penses incurred by F. R. Bank. . .
6. Fees: (a) Architects
.
(b) Engineers
Total cost ( 3 to 6 )
. . . . .
7g. L e s s p r o c e e d s f r o m s a l e o f s a l v a g e d
material
9- C o s t o f b u i l d i n g a n d b u i l d i n g s i t e .
10.Depreciation allowances charged off:
( a ) C h a r g e d to current net e a r n i n g s
(b) Charged to super-surplus . . .
(c) Total . * • • • • • • *
11.Book v a l u e o f p r o p e r t y (9_ 10c).. . .
4
MEMORANDA
12.Reserves against d e p r e c i a t i o n (as shown on f o r m 3U):( a ) C h a r g e d to c u r r e n t n e t e a r n i n g s
• •
(b) C h a r g e d to s u p e r - s u r p l u s . . .
(c)
Total . .
13.Floor space:
, (a) Occupied b y F. R. Bank
(b) Rented
(c) Unoccupied
(d)
Total floor area in remodeled building . . .
.$
Sq.Ft.
Sq.Ft.
Sq.Ft.
Sq.Ft.
FEDERAL RESERVE BOARD
WASHINGTON
J u n e ?, 1 9 2 2 .
St.2823.
SUBJECT:
S e n a t e B i l l 3531.
Dear Sir:
P l e a s e f u r n i s h t h e B o a r d w i t h a s t a t e m e n t , "by m a i l o r t e l e g r a p h , t o
r e a c h W a s h i n g t o n n o t later t h a n J u n e 15, s h o w i n g the f o l l o w i n g d a t a f o r
e a c h s t a t e or p o r t i o n of state i n y o u r d i s t r i c t 1.
N u m b e r a n d p a i d - i n capital of n o n m e m b e r b a n k s i n c i t i e s of p o p u l a t i o n of over 50,000 which have a p a i d - i n capital stock of
$ 1 2 0 , 0 0 0 or over but less than $200,000.
2*
N u m b e r a n d p a i d - i n c a p i t a l of n o n m e m b e r b a n k s in cities of p o p u l a t i o n o f f r o m 6 , 0 0 1 to 5 0 , 0 0 0 i n c l u s i v e , w h i c h h a v e a p a i d - i n
capital stock of $60,000 or over but less than $100,000.
3.
N u m b e r and p a i d - i n capital of n o n m e m b e r b a n k s i n cities of p o p u l a t i o n of from 3,001 to 6,000 inclusive, w h i c h h a v e a p a i d - i n
capital stock of $30,000 or over but less t h a n $50,000.
4,
N u m b e r arid p a i d - i n c a p i t a l o f n o m e m b e r b a n k s i n c i t i e s o f p o p u l a t i o n of 3,000 or u n d e r w h i c h have a p a i d - i n capital stock of
$15,000 or over but less than $25,000.
T h e a b o v e i n f o r m a t i o n i s d e s i r e d i n o r d e r to m a k e a v a i l a b l e t h e n u m b e r a n d p a i d - i n c a p i t a l s t o c k o f t h e f o u r g r o u p s of b a n k s i n e a c h s t a t e
which, on the basis of capital requirements, would be made eligible for
membership in the Federal Reserve System should Senate bill 3531, which is
quoted below, become a law.
SENATE
BILL
3531
To amend s e c t i o n 9 o f the F e d e r a l R e s e r v e A c t .
B E XT ENACTED BY THE SENATE AND HOUSE O F REPRESENTATIVES O F THE
UNITED STATES OF AMERICA IN CONGRESS ASSEMBLED, That paragraph 9 of sect i o n 9 o f t h e F e d e r a l R e s e r v e A c t a s a m e n d e d i s a m e n d e d to r e a d a s f o l l o w s :
" N o a p p l y i n g b a n k s h a l l b e a d m i t t e d to m e m b e r s h i p i n a F e d e r a l r e s e r v e b a n k u n l e s s (a) i t p o s s e s s e s a p a i d - u p , u n i m p a i r e d c a p i t a l s u f f i c i e n t
to e n t i t l e it to b e c o m e a n a t i o n a l b a n k i n g a s s o c i a t i o n i n t h e p l a c e w h e r e
it i s s i t u a t e d u n d e r the p r o v i s i o n s o f t h e N a t i o n a l B a n k A c t , o r ( b ) it
p o s s e s s e s a p a i d - u p , u n i m p a i r e d c a p i t a l of at least 6 0 p e r c e n t u m of the
a m o u n t s u f f i c i e n t to e n t i t l e i t t o b e c o m e a n a t i o n a l b a n k i n g a s s o c i a t i o n
i n the p l a c e w h e r e it is s i t u a t e d u n d e r the p r o v i s i o n s of the N a t i o n a l
2
-
B a n k A c t a n d , u h d e r s u c h r u l e s a n d r e g u l a t i o n s a s the F e d e r a l R e s e r v e
B o a r d m a y p r e s c r i b e , it sets aside a n n u a l l y in a fund an a m o u n t not less
t h a n 2 0 p e r c e n t u m o f i t s n e t i n c o m e f o r t h e p r e c e d i n g y e a r a n d it i n c r e a s e s its c a p i t a l f r o m such f u n d f r o m time to time u n t i l it p o s s e s s e s
a p a i d - u p and u n i m p a i r e d c a p i t a l n o t l e s s t h a n the c a p i t a l w h i c h w o u l d
h a v e b e e n r e q u i r e d if s u c h b a n k h a d b e e n a d m i t t e d t o m e m b e r s h i p u n d e r t h e
p r o v i s i o n s of s u b d i v i s i o n (a) of this p a r a g r a p h . "
Very truly yours,
Secretary.
L e t t e r s e n t to a l l F . B . A g e n t s e x c e p t M i n n e a p o l i s , K a n s a s C i t y , D a l l a s
and San Francisco.
FEDERAL RESERVE BOARD
WASHINGTON
June 17, 1922.
St.2842.
SUBJECT:
R e c o r d of Federal Reserve
B a n k D i s c o u n t -Rates,
1914 - 1921.
Dear Sir:
For your information there are enclosed herewith
two c o p i e s of a p a m p h l e t w h i c h h a s just b e e n p r i n t e d g i v i n g
the record of all c h a n g e s i n d i s c o u n t r a t e s of the F e d e r a l
r e s e r v e b a n k s f r o m the time of their i n a u g u r a t i o n i n N o v e m b e r 1 9 1 4 to t h e e n d o f D e c e m b e r 1 9 2 1 .
The B o a r d h a s a small supply of t h e s e p a m p h l e t s ,
a n d i f d e s i r e d , a l i m i t e d n u m b e r i n a d d i t i o n to t h e e n c l o s e d
copies will be furnished upon raquest.
Very truly yours,
Wrn. 7 , H o x t o n ,
7
Secretary.
Enclosure.
L e t t e r s e n t to C h a i r m a n a n d to G o v e r n o r
at each Federal Reserve Bank.
FEDERAL RESERVE BOARD
WASHINGTON
J u n e 26, 1922.
St. 2862.
SUBJECT:
Condition Reports of State Bank
and. Trust Company Members, Form 105-
Dear sir:
There are being forwarded to you today under separate
cover by special delivery
copies of Form 105 revised as
of February 15, 1922* please mail three copies of the form to
each state bank and trust company member in your district with
instructions to hold the blank forms pending receipt of a call
for condition reports, when they should be promptly filled out
and two copies mailed to you - in no case later than 10 days
after receipt of the call.
in order that the compilation of the Board's abstract
showing the condition of all state bank and trust company members
combined as of the date of the next call may not be unduly delayed,
it will be appreciated if the reports are forwarded to the Board
as soon as practicable after they are received by the F- R. bank.
Special effort should be made to see that all the reports reach
the Board within 20 days after date of call.
Very truly yours,
Walter
Eddy,
Assistant Secretary.
Letter sent to each f. R. Agent.
1
FEDERAL RESERVE BOARD
WASHINGTON
June 29, 1922.
St.2S63.
SUBJECT:
E a r n i n g s and. D i v i d e n d s r e p o r t s
of State B a n k and Trust C o m p a n y
m e m b e r s a s of J u n e 3 0 , 1922,
Dear Sir:
T h e r e a r e "being f o r w a r d e d to y o u t o d a y u n d e r s e p a r a t e
cover b y registered mail
c o p i e s of f o r m 10? for u s e of
State b a n k and Trust company m e m b e r s in submitting their semia n n u a l r e p o r t s of e a r n i n g s a n d d i v i d e n d s .
P l e a s e a d v i s e t h e b a n k s t h a t t h e r e p o r t i s to c o v e r
the s i x - m o n t h p e r i o d e n d i n g J u n e 30, 1922, i r r e s p e c t i v e of
w h e t h e r or not t h e y m a y have closed their b o o k s o n that date,
or w h e t h e r a n y d i v i d e n d s that m a y h a v e b e e n d e c l a r e d c o v e r
that p a r t i c u l a r p e r i o d .
T h e r e p o r t s h o u l d b e a a b m i t t e d to y o u i n d u p l i c a t e
within ten days after receipt of the b l a n k forms b y reporting
banks.
Kindly acknowledge receipt.
Very truly yours,
W a l t e r L. E d d y ,
Assistant Secretary.
I
L e t t e r to e a c h F. R. A g e n t .
FEDERAL RESERVE BOARD
WASHINGTON
June 28, 1922,
St.2866.
SUBJECT:
O u t l i n e of F e d e r a l R e s e r v e
Branch Banks.
Dear Sir:
T h e r e a r e b e i n g f o r w a r d e d to y o u t o d a y , u n d e r s e p a r a t e
cover,
c o p i e s of the O u t l i n e of F e d e r a l R e s e r v e B r a n c h
B a n k s , c o v e r i n g t h e i r p o w e r s a n d f u n c t i o n s , r e v i s e d a s o f J a n u a r y 1,
1922.
T h e o u t l i n e i s b a s e d o n i n f o r m a t i o n f u r n i s h e d i n r e s p o n s e to
t h e B o a r d ' s l e t t e r S t . 2 4 1 0 d a t e d N o v e m b e r 16, 1 9 2 1 , a n d o n r e g u l a r
and special reports received f r o m the F e d e r a l reserve banks and
branches.
I t i s d e s i r e d to k e e p t h e d a t a o n p a g e s 1 to 8 c u r r e n t
a t a l l t i m e s , a n d it i s t h e r e f o r e r e q u e s t e d t h a t t h e B o a r d ' s a t t e n t i o n b e c a l l e d to a n y a l t e r a t i o n s o r r e v i s i o n s t h a t m a y b e c o m e
n e c e s s a r y i n t h e p r e s e n t o u t l i n e d u e to c h a n g e s i n t h e f u n c t i o n s
p e r f o r m e d b y b r a n c h e s o f y o u r b a n k , if a n y .
Very truly yours,
W a l t e r L. E d d y ,
Assistant Secretary.
Enclosures.
L e t t e r s e n t to e a c h F e d e r a l R e s e r v e A g e n t .
FGQ6#- reserve board
A $ r U
s , . W -
SUBJECT: Charts showing movement of
assets and liabilities of
Federal Reserve Banks, etc.
Dear Sir:
There are "being forwarded to you today unde£.
separate cover two copies each of the following charts:
1. Movement of earning assets of all Federal Reserve Banks, 1921 and ig22»
2.
Debits to Individual Accounts at Banks in Reporting Clearing House Centers, 1921 and 1$22.
3«
Deposits, Federal Reserve note circulation, Cash
Reserves and Reserve Ratio of all Federal Reserve
Banks, 1921 and 1922.
4. Movement of loans and Investments, Deposits and
Federal Reserve Bank Accommodation \pf ^11 Reporting Member Banks, 1921 and 1922.
5«
Federal Reserve Banking Developments, 1917-1923.
One of the sets is intended for your use and. the other for
the use of the Governor. One set, containing the five
charts, is being mailed to the Manager of each Federal Reserve Branch Bank.
All the information required to continue the several
curves for the remainder of the present calendar year will
be obtainable from the Board's regular weekly published
statements.
Very truly yours,
Walter L. Eddy,
Assistant Secretary.
(Letter sent to each F. R. Agent
FEDERAL RESERVE BOARD
WASHINGTON
M a y 23, 1922.
st.2792.
SUBJECT:
A b s t r a c t of C o n d i t i o n R e p o r t s
of State B a n k a n d Trust C o m p a n y
Members and of all Member Banks
a s of M a r c h 10, 1922.
Dear Sir:
W e a r e f o r w a r d i n g to y o u u n d e r s e p a r a t e c o v e r
c o p i e s of the B o a r d ' s A b s t r a c t No. 17 showing the
condition of State B a n k and Trust Company m e m b e r s and of
a l l m e m b e r b a n k s a s at close of business on M a r c h 10,
1922,
Consolidated figures for all member banks, both
N a t i o n a l a n d State, are s h o r n on p a g e s 1 a n d 12.
P l e a s e f o r w a r d one c o p y of the a b s t r a c t to e a c h
State B a n k a n d Trust Company m e m b e r i n your district that
h a s e x p r e s s e d a d e s i r e to r e c e i v e c o p i e s o f a b s t r a c t s a s
issued.
Very truly yours,
E . L. S m e a d , C h i e f ,
Division of B a n k Operations.
L e t t e r to a l l F. R. A g e n t s .
@FedFRASER