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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 " 11 " ) 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 - )
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