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329 I' "' x... Ie91 H:CliORANDUM April 8,. 1920. To Governor Harding Subject: B~1~cors' Acceptances Purchased in tho open rncrl(ot held by tho Fedor~1 Reserve B2rur of :NO\i York, Harch 27, 1920. From 11r. Paddoclc. On February 28, 1920, tho total of acceptances purchased in tho open marlmt by the Fodcr111 Rosorvo Banlt of :New Yorlc reached the largest amount ever hold by the Barut. ~;231,257 ,300.00, At tho close of business March. 27, 1920, when the pros ant examination v1as commenced, tho acceptancc holdings amounted to ~~196,480,000 .. 00 • • A general classification of tho 7,500 accc;>tancos held on Harch 27, 1920, is as follovTS: Character .Amount Import and Export Bills 0154,45o,ooo.oo Domestic Bills 25,750,000.00 Foreign Trade Bills 2,860,000.00 Domestic Trade Bills 270,000.00 Dollar Exchcngo Bills 2,150,000.00 Bills. hold under repurchase 11greament 11,000,000.00 $196,480,000.00 From information t~con off during the examination, it appears that the acCO'.J?tnncos cover shipments of nearly one hundred different comJnoditios, and that about one hal~ of those accoptancos, representing ap- proximately 15% of_ tho dollar total, set out specifically in the instrumont tho commodity covered. In many other instances an idea as to tho character of tho transaction financed may be obt~inod from firm names, place uhcro droxm, or other inforr.J.ation appearing on tho bill. · :•nsos tho shipments arc doscr ibed as "General Horch11n<iisc 11 • it I11 a few HmJCvor, is estimated that about one fourth of the accc:;?tancos hllld boar no evidence of the nature of tho goods shipped, beyond the certificate as tc 330 -~ ~e general character of the transactio~ necessary under the Bo~d's regulations . fer_ eligibUity fer JUrchase. thir4s of the total number of X-1891 The import bills, which constitute about two acceptan~es and one half of the total amount, Ufru:ally contain full detaUs in regard to shipnents -eovered, includ_ing .a de·- · scription of the goods, vessel ~which shipped, and reference to credit estab· lished: conc~ing The export bills give very little specific information the shipnents represented, beyond a general statement sueh as "Exports to Japan", ·."Cotton for Export", ''Merchandise for export•, "carpets for Europe", etc. Aside from the certificate as to the nature of the transaction, necessary for eligibility; the domestic bills ~requentlJ fail to set out the goods covered. However, the domestic bi~ls are in good form and the drawers are usually well known provision• grain or .manufacturing concerns, of which the following may be mentioned as samples: _Great Atlantic . Go., Wil_son & co., Nestles Food co., & Pacific Tea Co., International Grain Augusta Knitting co,, utica Knitting Co., Mexico Hide C_o., Newbu:l"ger Cotton Co., Maxwell Motor Co., Oil Storage Co., Barnet Leather Co • , United Sugar Co.; Empire Petroleum Co • , Castle Ki.d Co • , Union Wool eo., Premier Worsted Mills, Tungsten Products eo. The· folloWing classification as to commodities covered is ,mad~ of the acceptances bearing definite information as to the character of the transaction represented: . . . ------·---~--------·------------------------------~·----------~-------~----------Characte:r of Acceptance Silk cOtton Hid9'8 & Skins Packers Coe~nut oil Sugar Silver Coffee Wool Wheat Digitized for!_obacco FRASER :Number of: Percent of Items :total no. items: 700 480 345 380 285 225 150 '150 80 75 '75 9.3 6.0 4.6 5.0 4.0 3.0 2.0 2.0 1.0 1.0 1.0 Percent of total .Amount :amount acceptances: Remarks 12,162,000 11,130,000 10,461,000 '7,980,000 '7,935,000 5,515,000 4,2()0,000 3,500,000 2,600,000 1.965,000 1,935!000 .. 6.2 5.'1 5.3 4.0 4.0 2,8 2.2 1.8 1.3 1.0 1... 0 -Imp. Japan -etports Imp.s.Am. 11K,porte Imp. Orient Imp.w. Ind. Exp.Orient Imp.s.Am. Exp.Europe Exp.E!lrop& Im::.>· .. 331 X-1891 ... Other commodity shipments ·rhich n.re shmm by the datu on the bills to have been financed by the a.cceptance method a.re n.s follo·.;s: Copper, crude rubber, pulpwood, gasoline, kerosene, olive oil, brass, groceries, gold flour, crude oil, hemp ··rn.lnuts, extrn.cts, cocon., C[Ullphor, humc.n hn.ir 1 bUIIlbOO mc•.. tti~g, muri~.te 6f potC\Sh, dried C.lbumen, sn.rdines, diamonds, ivory 1 strn.•'r brc.id, .rice, dog skin m:~ts 1 elm-er. seed, bristles, rc..isin§, "te:c dust, cur?d herring, n.niseed 01.1, strn.•.; hc.ts, rut;s, C.'\rpets, _pec.nuts, Jn.pn.n ·.mx, gum dc.m.:.~r, hc..rd··rc.re, srttJ.n, rn.tt::.n furniture, olives, cign.rs, glue, toys, drm·ring instruments, sur;ic'al instruments, crockery. ~-- ..., . -··· ,__,...,. ... !1.- '"' .. • • At the close of business I''!a.rch 27, 1920, the Federn.l Reserve Ba.nk of New York held Ba.nkers 1 Accept:1.nces, drmm by the principal. packing concerns, us follovrs: ------------·------------------·----------------------------------------Drm·;er Amount Number of Distribution of acceptors in in in in in Barik~ in 11 Bunks 16 Banks 4 Ba.nks l2.Banks 1 Bunk Armour &: Co. ~-'rift &: Co. Eorris &: Co. Wilson & Co. Cud~hy & Co. Tota.l 3M ·------- ac~pt_~nce s 5 Cities 8 Cities 153 82 2 Cities 6 Cities l City 12 Cities . ' ' ~3 25 3,975,000 3;900,000 1,300,000 1,128,100 8 200,000 31l fl0,503,100 --------~-------~---------------------------·---~---~--·------~--------~- A few of these bills, a.m.ounting to less than domestic nccept.ances bec..ring thi~ bill of r;oods". '\TaS rt ;'soo.,ooo.oo are certifica.to th:;t "At the time of ucccptc.nce seeured by shipping documents e.-idencing the domestic shipment About one third of the n.ccepto.nces referred to in the foregoing to.bulation o~ po.ckers 1 bills are accepted by No.tionnl banks n.nd there is no nota;tion thereon to shou the charucter of the transo.ction. {Under the Boar9.' s regulations (13-1916) _no evidence of eligibility is required t·rith respect to a bill a.ccepted by a National bank~) Forty-four of the bills carried in the tabulation 1 CJ'llounting to (1 1 100 ,000, were out for collection and therefore could not be e:x:a.mined. The remaindel" of the bills conto.in a certification that ' 1This a.ccepta.nce is bnsed on o. tro.nsuction in\"olving th.e importation or exportation of goods 11 or what the acceptnnce is "an inherent •• -' ' .. 332 ' ... -":::- X-1891 ~ part of an export trans:::>..ction and does not require revenue stn.mps 11 • ":3wift" bills refer to 11 under L/C No.- , Date- Exports 11 an~ the 1 11 The J-irroour 11 bills sto.te "Dro.~·rn Covering exportation of Herchandise". None of the packers' bills contains any definite statement as to the commodity coveredr the date, character or destination of the shipment; or the name of the vessel co.rryin; the ;oods. On February 28, 1920, the date the acceptances reached the hi~h nL..'l.rk, :' 231,257 )300.00, the packers' bills n.mounted to :: 18 >300, 000 • 00 ( 8%) • On r:ln.rch 27, 1920 1 vri th total acceptances of ;:196,500 ,000.00, the packers' bills hod been reduced to . 10,500,000.00 (5 .3%). A statement sho">ring the distribution n.mong; banks and bankers of the acceptances on hand is attached to this memorandum. GENERAL COMl'lliNT The accept::'..nces held by the Federal Reserve Br:mk of Ner; York at the close of business Ho.rch 27, 1920, ~·rere found to be in sood condition. Regulations and technical requirements are carefully observed, and detailed information in connection '·rith the vrork is readily o.vailc..ble. The examination of the 7,500 bankers' acceptances held by the Ne':.r York Bank stronr;ly sugr;ests the desirability of a standard size for accepto.nce forms, say 9 11 x check form, and uniform acceptance. sli~htly t..,n, arro.nr~ement of printed matter on the face of the It is also believed th:"'..t tpe consideration of acceptances to larp:er thn.n the ordinary note or it ..rould ha~e be of sreo.t advanto{~e in included in the bill a definite statement as to the coiDQodity covered, and in addition for r export bills, the details of shipment. L~port and . . X-1891 a . ... BJINKERS' ACCE"PT.ANCES 'PURCHASED HELD BY FEDERJ!L RESERVE B.ANK OF NEW YOBK, 27, 1920 .. AT CLOSE OF BUSINESS MARCH NEW YORK DISTRICT NATIONAL 3ANKS .American Exchange National Bam: .Atlantic National Bank Bank of New York, N~ B~.A. Battery Park National Bank Chase National Bank Chatham & Phoenix National Bam~ Chamical National Batik Citizens National Bank Coal & Iron National Bank East River National Bank First National Bank Harriman Nati anal Bank Imuorters & Traders National Batik Irving National Bank Li~erty National Bank Mech. & Metals National Banl: Merchants Nati •Jnal Bank National Bank of Comnerce National City Bank National Park Bank Seaboard National Bank Union Exchange National Bank Garfield National Barik $1,289,000 377,000 1, 554,000 83,000 2,384, 000 305,000 1,082,000 127,000 91,000 2,000 300,000 50,000 2,784,000 1,659,000 780,0':)0 617,000 10,119,000 9,251,000 518,000 302,000 10,000 295,000 TRUST COMPANIES Bankers Trust Co~ Central Union Trust Co Colum~ia Trust Co Equitable Trust Co Farmers' Loan & Trust Co Franklin Trust Co Guaranty Trust Co. Irving Trust Co. Italian Discount & Trust Co Lawyers Title & Trust Co Mercantile Trust Co Ne1v York Trust Co Scandinavian Trust Co U.S. Mortgage & Trust Co $ 2,242,000 2,sse,ooo 1,161, 000 5, 705,000 3,032,000 277,000 5,673,000 376,000 53,000 485,000 334,000 333 . . . ..2 ... X-1891 a ftmerican Forei~n Banking Corporation Asia Banking Corporation Bank of America Bank of Manhattan Oo. Baxll.:: of United States Corn Exchange Bank Columbia Bank Foreign Credit Corpo~ation Foreign Trade Bariking Corp~ French American B'anking Corp. Grace & .Qo., m.R. Bank lnternati onal Banking Corp. Mercantile Bank of the Americas New Netherland Bank · ' New York Produce Ex change Bank Pacific Bank Park Union Foreign Banking Corp. The State Bank Textile Bam,ing Co 6. t 301 ' 000 2,408.000 286,000 2, 284,000' 282, OQO. 169,000 lliOOO 3.·368,000 1,005~000 1,990,000 46,000 3-419,000 6j521:,000 90,000 2.000 315,000 3,0341000 57,000 919,000 PRIV ~, TB BANKERS .American Express Co¥ Brown Brothers & Co. Goldman, Sachs & Co9 Hallgarten & Co Heidel~ach, 705,000 9,121,000 6,195,000 l & Co. Huth & Co .-.Kuhn, Loe':l & Co Ladenburg, Thalw..an & Co 2,760,000 155,000 950,000 230,000 1,089~000 Lazard Freres Maitland Conpell &.Co J.?. Morgan & Go ~oe & Co, John Na\¥Iiburg & Co. , E. ' ' Schall & Co., Wm SchUlz & Ruckgaber Seli!IDlan & Co., J & w Sutro Bros. & Co A~ Iselin & Co ·370, 000 920,000 54,000 1,142,000 1,358,000 85,000 50,000 100,000 100,000 FOREIGN AGENCIES An7lo South American Barik Banca Comtle Italiana Baru~ of British West Africa Banl:: of Montreal Bank of Nova Scotia Batik of Taiwan Canadian Bank of Ccmmerce 1~632~000 1,199,000 178,000 246,000 12,000 90,000 }, 938,000 334 .. -3- Dominion Bank London & Bra~ilian Bank National Banl:- of S•1u.th Africa Royal Bank of Canada Standard Banb: of South Africa U;1.:i.on Bank of Canada Me::chants Bank of Canada X-l89J. a $ 58,000 86,000 . 1,555,000 4,561,020 331,000 1,578,000 10,000 BROOKLYN 42,000 25,000 Brooklyn Trust Co Pe~les Trust Co NEW JERSEY First National Banl-, Hoboken Hamilton Trust Co. Paterson Paterson National B~~. Paterson First National Bank, Jersey City Nat. Newark & Essex Bkg Co.· Netvark 74,000 141 '000 4,000 33,000 200,0JO NEW YORK STATE Buffalo,Banlr of Buffalo " Citizens Com 1 1. Tr. Co. 11 Fidelity Trust Co " Liberty Bank # Manufs, & Traders Natl •. Bk. " Marine Trust Co Gen3seo,Livin!ston City Trust Co. · Kingston,Rondout National Bank Syracuse,First Trust & Denosit Co, " Salt Springs National Bank 25,000 350,000 1'00,000 78,000 6oo,ooo 618,000 9,000 10.3,000 75,000 25,000 335 • '(I • 336 X-1891 a • FOREIGN TRADE ACCEPTORS _,......,.......,....,....==..,.....-~- Ind., Chartered Batik of I., A & C B. Altman & Co Balfour, Williamson & C~ Cheney Brothers H.W~ Peabody & Co $ 39 1 000 129,000 51; 000 295;000 Ind~ 1 Hong, & Shang. Banking Corp. Cheney Brothers W.R. Grace & Co H. w·. Peabody & C~ 97,000 70,000 103,000 Ind. , Nonmember Banks G, Amsinck & Co Balfour, Williamson & Ce w. R. Grace & Cc V, Guerin & Fils Hadden & Co .. H. w. Peabody & Co F. Vietor & Achelis 156,000 1.42, ooo 443,000 10.000 37,000 274,000 90,000 Ind., MemiJer Banl-(s G. Amsinck & Co Armour & Co Balfour, Williamson Cheney Br':lthers W.R. Grace & Co & Co New York State Albany, N.Y. State National Bank Utica, Citizens Trust Co. n First National Batik 11 Oneida City Trust Co. n Utica Trust & Safe Deposit Co Total Foreign Trade Acceptances 109,000 79,000 71,000 518,000 153 J 000 25,000 100,000 472,000 50,000 871000 $2,866,000 DOMESTIC TRADE ACCEFTJI.NCES United Cigar Stores Co. 268,000 ~ •· X-1891-a -5ATLANTA DISTRICT. New Or lean~, Canal-Comtl, Nat. Bank II II Canal-Com 11. Tr. & Sav .. Eank Bibernia E~ & Trust eo. "It "II Marine Iank & Trust Co. Whitney Cen. Nat. Bank . " " .Atlenta, .Atlenta National Bank Centrel Bank & Trust Co. " II Lowry National Bank .Augusta, Merchants Natiopel :Eank ~OSTON $20,000 126,ouo g6S,ooo 25,000 335,000 . 202~000 1oo.ooo 90, 000 9·,000 DISTRICT. .American Trust Co. Federal Tn:~t co .. First National Bank First National Corp.. Fourth .Atlantic Nat),.onal Bank International Trust Co~ Lee, -Higgi~son.& 9o. Merchants National Eank Moors & .co., J .. B•. National Shawmut lank Old Colony Trust. Co .. Second National Bank . Shawmut Corporation State Street Trust Co. Webster &. .Atlas ~tional Bank Blackstone Canal Nat~ Bank, Provide~ce, R.I. Hospital Trust Co., n ·Thames National Fank. Norwich, Conn. First National Bank, New Haven, Conn. Springfield Nat. lank, Spring(ield, Mass. Massoit Pocasset Nat. Bank, Fall River, Mass. 250,.000 113,000 4; 525 ,ooo l:r624,ooo 121,000 97,000 1, 601,000 170~000 47 ,ooo 4,384'1"000 3,961,000 9.ooo 1,863~000 369,000 330,000 72,000 350,000 233,000 23,000 100,000 53,000 CHICAGO D,ISTRI.£! Central Trust Co. of· Illinois C- & C. Natione.l lank Corn Exchange National Bank First National 1Jank Harris Trust & Savings B~ Illinois Trust & Savings Bank Merchants ~Loan. & Trust Co. National Bank of the Republic utfion Trust Co4 First Trust & Savings Bank National C:\ ty l-ank Detroit, F:i.rst & Old Detroit Nat ... :Bank n National Bank of Commerce n peoples State B~ 4,000 1,003,000 316.,ooo 197,000 100)000 125,000 14,ooo 901000 ~oo,ooo 325)000 119,000 250,000 100,000 331,000 337 x-1891-a -6CHICAGO DISTRICT (CONTINUED) IndiMo.:polis, Fletcher ~1\rn. Uat. Bo.nlc llihmu.l;:oc, First Hisconsin National Ba.nlc II Second \lard Savings Banlc 253,000 75,000 175,000 CI.JWELAND DISTRICT. Contrn.l Hat ioncl Bo.nlc Citizens Savings & Trust Co. Cleveland Trust Co. F:irst National Bani~ First Trust & Savi:q;s Bo.nlc Guardian Savings & Trust Co. Superior Savings & Trust Co. Union Corrm1orcc Nati oncl Banlt Cincinnati, CitizGns Ho.tional Banlr 11 Fi£th-Third National BD.lllc Pittsburgh, Banlc or Pittsburgh~ N. -A. " First National Bank II Pittsburgh Trust Co. II Farmors Do?osits Nat. Banlc II Peoples National Bnnlc II Union Trust Coo · Akron, Ohio, Ohio Savings & Trust Coo II II F.irst Second National Bo.nlc 11 Toledo, Nc.tioncl .Bank or Commerce 95,000 49,000 873,000 125,000 30,000 1,096,000 325,000 1,158,000 221,000 . 322,000 359,000 176,000 50,000 144,000 137,000 250,000 50,000 104,000 135,000 DALLAS DISTRICT City Ua tiono.l Bo.:nlc El Paso, Tex. First No.tionc.'"'l.l .Bo.nlc· Tc:x:arl{D.no.,. State National Banlc Houston, First Hat ional .Bank 183,000 100,000 575,000 MINNEAPOLIS DISTRICT First No.tiono.l .Bank !.Iidlo.nd Nn.tional Banlc Northvmstorn Nationc.l .Banlr St. Paul First Nafiona1 Bo.:nlc " " llorchD.nts National BCJ:lk l.Iinnoc.polis, 11ctropolitan National Banlc PHILADELPHL~ Corn Exchange National Bank Commercial Trust Co. First National Banlc Fourth Stroot National Banlc Girard National Bank Girard Trust Co. llarltct Stroot Nationcl Bank 600,000 407,000 845,000 56,000 248,000. 70,000 DISTRICT 703,000 200,000 480,000 137,000 1,470,000 150,000 . 392,000 3 v~-8 339 -1PHILADELPHIA DISTRICT (.CONT.) Philadelphia National Batik Tradesmen 1s National Bank Union National Bank Franklin National Bank · 1\nthracite Trust Company, Scranton, Pa. Bosak State :Bank, n n Peoples Savings & Dime Bank, ~ n 2; 629,000 494,000 99,.000 100,000 25,000 25,000 25,000 RICHMOND DISTRICT r American National Batik 33~,000 Merchants National Bank 54,000 National State & City Bank 292,000 Baltimore, Me·rch. & Mach. First Nat.Bank 1,000,000 " National Exchange Bank 267,000 167,000 " Second National Bank. " National Bank of COJl'JJre rce 50,000 " Continental Trvst Co. 550,000 Citizens National Bank " 250,000 rr Union Trust Co. 47.000 " Farm~rs & Merchants Nat.Bank 25,000 11 National Union Bank 25,000 Washington, D.c. Commercial National Bank 1121,000 100,000 " Continental Trust Co. " District National Baak 50,000 " National Metropolitan Bank 75,000 KANSAS CITY DISTRICT Fidelity National Batik & Trust Co. National Bank of Com:rerce 25,000 25,000 ST. LOUIS DISTRICT Mercantile Trust Co. Mississippi Va!ley Trust Co. National Bank of Comrr.erce Louisville, ~. National Bank of Kantuc~ Memphis, thion & Planters Bank & Trust Co. 309,000 174,000 258,000 50,000 385,000 SAN FRANCISCO DISTRICT Anglo & Landon Paris National Bank :Bank of California, N.. A. Wells Fargo Nevada National ~ 1,595,000 351,000 390,00$) ... . 340 S.AN FRANCISCO DIS~RICT f, CONT.} First National Bank, :Los Angel-es, Cal. First National Bank, Berkeley, cal. U. S.. National Bank~ "?ortlani, Ore. First National Bank: Seattle: Was~. R~rchase agreeme~~ · Betnbard. Scholle & 9o~ ( 8, 625,000 ·solomon Bros, & Hutzle~ . ! ' 75,000 49g,ooo !Discount Corp ... of N.Y. • 100,000 1:718,000 ·13oad. & C'TOoJ.win ' 8t000 2§,000 175,000