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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 !! 11 3-3/S n it 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 11 60 n 90 it 120 n 150 3„5/,5-4-3/8 if II 180 3-3/8 - 4 3-3/5 - 4-l/s II Close Bid Offered 31 It It It 3- 5 / 8 !1 3-3/8 11 11 II 3-3/8 No. 7 (Chicago) Bid 30 day m a t u r i t y 4-1/8 gO " " nit 9 0 rr It 120 " It 150 " It 180 " Range during period Offered - 3S " 11 II ft tt 4 - 3-3/8 II 11 It 4-1/8 - 3-3/8 Bid Close Offered J>2 It II 3-3/8 31 - 3-5/8 3 - 3 / 8 - 31 II
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