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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
"
II
"
3-7/8
4-1/S
II
"
II
II
II
II
II
4-3/8
II
"
4-1/6
~-1/:.;.
3-)ji+
II
II
,, 1 I14
'-'--l/3 ...,._
4-l/4 4-3/8
II
n
,,
-+
cc-l/8 4-l/8
II
II
II
II
II
II
I!
"
II
4-1/?..
II
"
3-3/4
II
II
4-1/4
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
cent."
4-l/8
II
No. 1 (Josten) states that the demand ;;as best for
7 (Chicago) reports
.:-+
n
II
Bills of short maturities were favored by purchasers.
District No.
)·
'+
II
,,
3-7/8
- )+
II
"
II
/
"
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