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ANNUAL REPORT
OF THE

FEDERAL RESERVE BANK
OF BOSTON




FOR THE YEAR ENDED DECEMBER 31,1915

WASHINGTON

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ANNUAL REPORT
OF THE

FEDERAL RESERVE BANK
OF BOSTON




FOR THE YEAR ENDED DECEMBER 31,1915

WASHINGTON
GOTBUnHMT WNT1N6 OJTK2
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TABLE OP CONTENTS.
Page.

Opening of bank.............................. ..................................................................
Internal organization and personnel ................................................................
By-laws of bank...................................................................................................
Directors and executive committee.....................................................................
Advisory council............ ...................... ..............................................................
Rediscounts.........................................................................................................
Federal Reserve notes..... .................................................... .............................
Government bonds purchased..............................................................................
Open-market operations.......................................................................................
Handling of checks..............................................................................................
Publicity....*......................................................................................................
Relations with member banks............................................................................
Attitude of State banks toward Federal Reserve System....................................
Bankers’ acceptances...........................................................................................
Gold settlement fund...........................................................................................
Election of directors............................................................................................
Member banks, number of, in district................................................................
Fiduciary powers granted....................................................................................
Credit needs of the district...................................................................................
Cooperation between Federal Reserve Banks.....................................................
Relations between Governor and Federal Reserve Agent....................................
Effect cl discount rates on money rates in district..............................................
District problems.................................................................................................
Industrial and agricultural situation....................................................................
Earnings and expenses........................................................................................
Line of development...........................................................................................




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ANNUAL REPORT OF THE FEDERAL RESERVE BANK OF
BOSTON.

F rederic

H.

Curtiss ,

Chairman and Federal Reserve Agent.

Owing to the prevailing low rates for money, due to a large extent to the money
released by the new reserve requirements and to the advances made on emergency
orders, member banks have found it necessary to rediscount with this bank only
to a limited extent, and, therefore, to meet operating expenses the directors of this
bank have found it necessary to seek investments in the open market.
Municipal notes, bankers* acceptances, and, to a limited extent, Government bonds
have thus far constituted its principal investments.
A retrospect of conditions existing at the time the Federal Reserve Banks began
operations, November 16, 1914, should be of interest. There was outstanding in this
district on November 16, 1914, about $31,000,000 of emergency currency, consisting
of Aldrich-Vreeland notes and clearing-house certificates. The Boston banks showed
ft deficit with their reserve agents and only a moderate excess in cash. The comptroller’s call of October 31, 1914, showed bills payable and notes rediscounted of
about $6,000,000, most of this being borrowed by the country banks. At the date of
that call many of these banks were running below their reserves and the total surplus
reserve of the banks in the district was abnormally low. Money rates were high.
Demand money to brokers ranged from 5J to 7 per cent, and the commercial borrower
was obliged to pay 6 per cent and even higher for accommodation up to six months.
Member banks were restricting their own customers and were out of the market for
outside paper.
The Boston Stock Exchange was closed except for dealings through a committee,
and only limited transactions were allowed. The associated banks of Boston were
paying balances through the Boston clearing-house in clearing-house certificates and
bmk notes. Within a few days after the opening of the Federal Reserve Bank call
money was lending at 4} to 5 per cent, and commercial paper was moving fairly
freely at 5J to 6 per cent. The new reserve requirements, which went into effect
at the date of opening of the bank, were materially felt throughout the district.
O p e n in g

of th e

Bank.

As soon as the board of directors of this bank organized one of their first official
actions was the selection of its executive officer, the Governor. After a most careful
canvass of eligible men the position was offered to and accepted by Mr. Alfred L.
Aiken, at that time president of the Worcester National Bank, Worcester, Mass.
As it was deemed advisable to have a Deputy Governor, Mr. Thomas P. Beal, clast
A director, and president of the Second National Bank of Boston, at the request of
the directors consented to assume that position without compensation until such,
time as the services of an active officer were required.




5

6

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

Mr. Florrimon M. Howe, assistant cashier of the Old Colony Trust Co., Boston, was
chosen cashier of the bank*
Temparary banking rooms were secured at 101 Milk Street and vaults were hired
from the New England Trust Co.
The first payment on capital stock was received at the Subtreaeury, through the
courtesy of Mr. Charles S. Strecker, the assistant treasurer. This payment amounted
to $1,618,924.99 and was practically all received on or before November 2, 1914.
The stock of this bank was subscribed in about the following proportions:
Banks in group 1 approximately 76$ per cent.
Banks in group 2 approximately 16^ per cent*
Banks in group 3 approximately 7^ per cent
Group 1, banks with a capital and surplus over $250,000; group 2, banks between
$120,000 and $250,000; group 3, banks under $120,000.
The first shipment of Federal Reserve notes was also received at the Boston Sub­
treasury, where they were stored until the permanent vaults were ready for occupancy.
Acting under instructions from the Secretary of the Treasury, this bank was opened
for business on November 16,1914, and the first payment of reserves was received at
the Subtreasury. This payment amounted to approximately $15,000,000, about
$9,300,000 of this being paid in gold, showing that the request of the Federal Reserve
Board to member banks that they make this payment in gold met with satisfactory
response.
Permanent quarters were later secured at 53 State Street, to which the bank moved
on January 1, 1915. These quarters are on the first floor of the Exchange Building,
and cover about 4,283 square feet of floor space. These rooms were formerly occupied
by a bank and are well adapted to present needs. They furnish adequate space for
offices, a directors’ room, cages, and space for clerical work. They are rented at an
annual rental of $12,500 and a lease was taken for four years from January 1, 1915.
The vaults in this room are modem, well arranged, and adequate for daily needs. In
the same building there has been rented from a safe-deposit company vaults formerly
Occupied by the Boston Clearing House Association, and in the3e are carried the
bank’s main reserved. Federal Reserve notes and the gold in the custody of the Fed­
eral Reserve Agent are kept in separate safes in the same vault.
I n t e r n a l O r g a n iz a t io n

and

Perso n n el

op th e

Bank.

The bank has a governor, a deputy governor (who is inactive), a cashier, assistant
cashier, chief clerk, paying teller, receiving teller, discount clerk, assistant discount
clerk, and eight other clerks * including stenographers, a telephone operator, book­
keepers, etc. Owing to the exigencies connected with the early opening of the bank,
the employees were chosen with emphasis given to their past experience in the posi­
tion to be filled, and therefore most of them were drawn from the large commercial
banks, and the efficiency of these clerks has befen an important factor in keeping the
Staff at a minimum.
The Federal Reserve Agent is in charge of the credit and the statistical department
of the bank. He has an assistant, a secretary, and a stenographer. The deputy Fed­
eral Reserve Agent, after the early stages of the organization of the bank, apart from
Ms duties as director has been active only in the absence of the Federal Reserve Agent,
flue department in its present stage of development not requiring the services of two
officials.
^
When, the operating force of the bank has at any time had an unusual volume of
w«rk put upon it the clerical force of the Federal Reserve Agent’s department has
been freely used by the bank, and this has helped to keep the clerical force of the
lank small. This department has collected a moderate-sized reference library, which
has proved of considerable value to the officers of this bank and to member banks:




ANirUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

7

B y -l a w s .

At a meeting of the board of directors on November 5, 1914, the following by-laws
were approved. Since that time two amendments have been made, ora adopted on
June 3, 1915, and the other on September 2, 1915, both being in regard to the time of
directors’ meetings:
B y -LAWS OF THE FEDERAL RESERVE BANK OF BOSTON.

A r t ic le L— Directors,
S ection 1. Quorum.— A majority of the directors shall constitute a quorum for the
transaction of business, but less than a quorum may adjourn from time to time until
a quorum is in attendance.
S ec . 2. Vacancies.— As soon as practicable after the occurrence of any vacancy in
the membership of the board the chairman of the board shall take such steps as may
be necessaiy to cause such vacancy to be filled in the manner provided by law.

Sec. 3. Meetings,—There shall be a regular meeting of the Doard every Thursdays
at 2.30 o’clock p. m. or, if that day be a holiday, on the first preceding full business
day. The chairman of the board may call a special meeting at any time and shall do
so upon the written request of any three directors or of the governor. Notice of regular
and special meetings may be given by mail or by telegraph. If given by mail, such
notice shall be mailed at least two days before the date of the meeting. If given by
telegraph, such notice shall be dispatched at least one day before the date of the meet­
ing. Notice of any meeting may be dispensed with if each of the directors shall in
writing waive such notice.
Sec. 4. Powers.—The business of this bank shall be conducted under the super­
vision and control of its board of directors, subject to the sup3rvision vested by law
in the Federal Reserve Board. The board of directors shall i pprint the officers and
fix their compensation. The board may appoint legal counsel for the bank, define
his duties, and fix his compensation.
S ec . 5. Special committees.— Special business of the bank may be referred from

time to time to special committees, which shall exercise such powers as the board
, ijaay delegate to them.

Sec. 6. Order of business.—The board may from time to time make such regulations
as to order of business as may seem to it desirable.
A r tic le

2.—Executive committee.

Section 1. How constituted—There shall be an executive committee consisting of
the governor, the Federal Reserve Agent, and one or more directors chosen from
classes A or B; the member or members of the committee chosen by the board shall
serve during the pleasure of the board or for terms fixed by it. Not less than three
members of the committee shall constitute a quorum for the transastion of business,
and action by the committee shall be upon the vote of a majority of those present at
any meeting of the committee. The committee shall have power to fix the time and
place of holding regular or special meetings and the method of giving notice thereof.
Minutes of all meetings of the executive committee shall be kept by the secretary,
and such minutes or digests thereof shall be submitted to the members of the board
of directors at its next succeeding meeting. Such minutes shall be read to the meeting
if required by any member of the board.
Sec. 2. Powers.—Subject to the supervision and control of the board of directors,
a6 set forth in article 1, section 4, the executive committee shall have the following
powers:

fa) To pass upon all commercial paper submitted for discount.
tb) To initiate and conduct open-market transactions.
(c). To make from time to time such changes in the discount rates as may seem best,
the same to be reported to this board of directors at the next meeting of the directors
following such changes.
(d) To buy and sell securities.
(e) To apply for and provide for the security to be pledged against the issuing of
augh federal reserve notes as ma^, in the judgment of the committee or of the board,
^ iifi^ i» r y for the general requirements $ tne b&nk.
‘ (/) To employ or to delegate to officers of the bank authority to employ clerks and
other subordinates and to define their duties and to fix their compensation. .
" (r/)‘ To approve bonds furnished by the officers and employees of the bank and to
^avide for their custody.
(ft) In general, to conduct the business of the bank, subject tb the supervision and
control of the board of directors.




8

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.
Article 3.— Officers.

S ection 1. The board of directors shall appoint a governor, a deputy governqr, a
secretary, and a cashier, and shall have power to appoint such other ofhcers as the board
may from time to time determine to be necessary and appropriate for the conduct of
the business of the bank. The offices of deputy governor, secretary, and cashier, or
any two of them, may be held by one person, in the discretion of the board. The
officers chosen by the board shall hold office during the pleasure of the board.
Sec. 2. Federal Reserve Agent.—The Federal Reserve Agent, as chairman of the
board of directors shall preside at meetings thereof. Copies of all reports and state­
ments made to the Federal Reserve-Board shall be filed with the Federal Reserve
Agent.
Sec. 3. Deputy Federal Reserve Agent.—In the absence or disability of the Federal
Reserve Agent Ins powers shall be exercised and his duties performed by the deputy
Federal Reserve-Agent.
Sec. 4. The governor.—Subject to the supervision and control of the board of direc­
tors, the governor shall have general charge and control of the business and affairs of
the bank, and he shall be the chairman of the executive committee. He shall have
power to make any and all transfers of securities or other property of the bank which
may be authorized to be sold or transferred by the executive committee or by the
board. The governor shall have power to prescribe the duties of all subordinate
officers and agents of the bank where such duties are not specifically prescribed by
law or by the board of directors or by the by-laws. The governor may suspend or
remove any employee of the bank.
S ec. 5. The deputy governor,—In case of the absence or disability of the governor
his powers shall be exercised and his duties discharged by the deputy governor, and
iti case of the absence or disability of the deputy governor, the board shall appoint
from the directors a governor pro tem. The duties of the deputy governor shall other­
wise be such as may be prescribed by the board of directors or by the governor. In
case the board shall deem that the business of the bank requires the appointment of
one or more assistant deputy governors it sfyall have authority to appoint such assistant
deputy governor or governors and shall prescribe and define his or their duties.
Sec. 6. The secretary.—The secretary shall keep the minutes of all meetings of the
board and of all committees thereof. He shall have custody of the seal of tne bank, *
With power to affix same to certificates of stock of the bank, and by authority of the
board or the executive committee to such other instruments as may from time to
time be required. The board of directors may, in their discretion, appoint a secre­
tary pro tem or empower one or more officers to affix the seal of the bank to certificates
of stock or other instruments. The secretary shall perform such other duties as may
from time to time be prescribed by the board of directors, the executive committee,
or the governor.
Sec. 7. The cashier.—The cashier and at least one other officer designated by the
board of directors shall have the joint custody of all moneys, investments, and securi­
ties of the bank, subject to such rules as the board may adopt. He shall perform such
other duties as may be assigned to him from time to time by the executive committee,
the board of directors, or the governor.

Article 4.—Certificates of stock.
Section 1. Signature.— All certificates of stock, or payment of or on account of
stock subscriptions, shall be signed by the governor or a deputy governor and the
secretary or cashier, or such other officers as may be prescribed oy the board, and such
cerdfibates shall bear tBe cor^orattMa^l .
Article 5.
Section 1. Business hours*
—The bank shall be open for business for such hours
as the directors may from time to time determine.
Article 6.— Amendments.

These by-laws may be amended at any regular meeting of the board by a majority
vote of the entire board: Provided, however, That a copy of such amendment shall
have been delivered.to each member at least 10 days prior to such meeting.
Adopted by the Board of Directors of the Federal Reserve Bank of Boston on
November S, 1914.
The following amendment was favorably acted upon at the directors’ meeting of
June 3, 1915:




ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

%

Before the word “ Thursday,” section 3, line 1, of the by-laws, insert the word
"alternate” ; after the word “ Thursday,” insert the words “ beginning June 24,” so
that the section will read:
“ There shall be a regular meeting of the board every alternate Thursday at 2.30
o’clock p. m., beginning June 24, or if that day be a holiday, on the^first preceding
full business day. The chairman of the board may call a special meeting at any time
and shall do so upon the written request of any three directors or of the governor.
Notice of regular and special meetings may be given by mail or by telegraph. If
given by mail, such notice shall be mailed
leaat two days before the date of the
meeting. If given by telegraph, such notice shall be dispatched at least onq day
before the date of the meeting. Notice of any meeting may be dispensed with if each
of the directors shall in writing waive such notice.”
The following amendment was favorably acted upon September 2, 1915.
Article 1, section 3, line 2, after the word “ at,” strike out the words “ 2:30 o’clock
. m.,” and substitute therefor the following: “ Such time as may be fixed by the
oard,” so that that portion of section 3, as amended will read as follows:
“ S ec . 3. Meetings.—There shall be a regular meeting of the board every alternate
Thursday at such time as may be fixed by the board, or if that day be a holiday oi\
the first preceding full business day,” etc.

E

D irectors an d E xecutive Committee .

During the first eight months the board of directors met every week, the executive
committee meeting on the same day. The amendment to the by-laws of June 3,
mentioned above, provided that the directors should meet every alternate Thursday,
and thereafter both the executive committee and the directors’ meetings were helc)
every two weeks. The records show that 47 meetings of the board have been held,
with an average attendance of about 8 directors. The executive committee has met
52 times, with an average attendance of 4 members,
The executive committee consists of the governor of the bank, who is chairman* ,
the chairman of the board of directors, and three other members of the board. It
has been found expedient to have the class A and class B directors representing
group 1 serve on this committee continuously, both being Boston directors, the other
two class A directors serving during alternate periods.
Records are kept of the executive committee meetings. All rediscounts for mem*
ber banks and investments made are approved, and matters pertaining to the policy
and conduct of the bank are discussed by that committee. The records of these
meetings are read and the action of the committee confirmed at each meeting of the
board of directors.
At each meeting of the board of directors a statement of the condition of the banfc
and a detailed record of all transactions in the way of loans and investments is pre*
sented to the directors. While the officers of the bank are in more frequent consultant
tion with the two Boston directors, every director is in close touch with the bank’s
affairs, and gives careful attention and thought to the development of its usefulnessv
A d v i s o r y C o u n c il .

The board of directors, after careful consideration of the provisions of the Federal
Reserve Act regarding the functions and conception of the Federal reserve advisory
council, decided to appoint a banking official not connected with this bank as an
officer or director as a member of that council. On October 16, 1914, the directors
chose Mr. Daniel G. Wing, president of the First National Bank of Boston, as the
member of the Federal advisory council from this district for the term ending December
31,1915. Mr. Wing accepted this position and has served without compensation other
than allowances for ordinary traveling expenses. He has thus far attended every meet­
ing of the advisory council, and after each meeting has appeared before the board of
directors of this bank by invitation and informed it of the deliberations and con',
elusions arrived at by that council.
28858— 16-------2
T




£0

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.
D is c o u n t R a t e s .

Rates of discount were established by the board of directors, and went into
%Sectas follows:
10 days.

60 days.

90 days.

6
5*
5
44
4
4
4
4

16..
^ 30$*0.17..
,
#)-.
Feb. 3..
-June 18..
'July 1..
Aug. 6..

30 days.

6
6
5J
5
4
4
4
4

Cver,

6

6
6

5

n
4*

4

The directors in establishing rates for the longer-time paper have had in mind the
wit-of-town banks* These rates have teen established based on prevailing rates in
the outlying districts, so that assistance could be furnished without causing undue
inflation. As the money market became more normal and reserves began to accu­
mulate in the centers, rates were maintained, as it was felt that the Boston banks,
•owing to their large amount of unemployed funds, would probably meet any rate
Established by this bank, and that a further reduction of rates might affect the general
taioney market.
"While member banks have been slow to avail themselves of the privilege of redis­
counting with this bank, this is due to a considerable extent to the general belief
that the process is a slow one and surrounded by much formality. Banks that have
rediscounted, however, find that such is not the case, and are using that privilege
whenever necessary. There is no delay in crediting a bank with its rediscounts.
TThegovernor and chairman pass on paper as presented.
The 10-day rate was established to meet the needs of those banks that carry as a
Wcondary reserve the demand afreet loans of brokers, tha/t the services of this bank
witftit be called upon for temporaryuse, instead of those loans being called. In normal
timfcs it is expected that banks will use tim short-time. §>rivilege, and that this rate
Will follow very closely the current demandrates in Boston.
A commodity rate, of 3£ per cent was established on September 24,. 1915, but as
yet no loftos of a character warranting special rates have appeared in this district.'
A
situation arises in the matter of trade acceptances. The trade acceptance
in use at the present time has the character to a large extent of the ordinary two-name
paper offered for rediscount.
This bank has rediscounted for 26 member banks since the inauguration of the
These rediscounts have amounted to $2,386,322.80. The following table
fellows these distributed by months:
Month.

Number
of appli­
cations.

1914
1915

$20,677.81
273,577.56
9

8

15

22
21

2
2

21

mm
December,.
T o ta l.

highest point, July 2,1915, $436,545.87.




Amount.

15
17
9
12

18

126,943.68
139,595.96
178,®$. 04
325.652.53
191,m 78
347,369.11

2 1 668.11
0j

75,847.01
91,264.35
54,546.*98
179,799.34
184.188.54

2,386,m. 80

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

11

During November and December, 1914, 10 banks rediscounted, and during the
year 1915, 28 banks rediscounted, of which 9 had rediscounted in 1914.
F ederal R eserve N otes.

This bank has issued $10,520,000 Federal Reserve notes in the following denom­
inations:
5’s.......................................................................... ............... $3,620,000
4,680,000
10’s...................................................................................
20’s.........................................................................................
640,000
. 50’s................................................ ........................................
600,000
100’s........... .......................................................................... .
980,000

These notes have all been issued against rediscounts or indorsed bankers’ accept*
ances, and the bank has reduced its liability by a deposit of gold. Mutilated notes
have been canceled and returned to the extent of $500,000, as follows: 5’s, $260,000
10’s, $210,000; 50’s, $10,000; 100’s, $20,000.
The demand for these notes has come for the most part from Boston member and;
nonmember banks, and as their issuance has not drained the bank’s gold reserve,
but instead has mobilized additional gold in the hands of the Federal Reserve Agent,
it has been deemed a wise policy and,one giving additional strength to the bank’s
position. The application for notes and the pledging of collateral in each case has
been approved by the executive committee. All gold held by the Federal Reserve
Agent for the redemption of Federal Reserve Notes is carried in gold order certificates
running in favor of the Federal Reserve Bank or Federal Reserve Agent of Boston,
There has been received from the Comptroller of the Currency $16,360,000 in Federal
Reserve Notes, as follows:
5’s............... .................................................................. $5,080,000
10’s................................................................................. 5,920,000
20’s..... ........... ............................................................. . 1,760,000
50’s................................................................................. 1, 600, 000
100’s.............................................................................. 2,000,000
These notes have been carried, together with the gold certificates held by the
agent, in separate safes in the bank’s vaults, in the State Street safe deposit vaults
located beneath the banking rooms of the Federal Reserve Bank.
'
Access to the bank vaults requires the presence of three officers and access to the
Federal Reserve Agent’s safes requires the Federal Reserve Agent and one other.
It has been intimated by member banks that the demand for $50 and $100 notes
has been for the use of mutual savings banks. The demand for $10 notes can partly
be traced to the fact that $10 gold certificates have been used for pay roll and other
counter requirements in this district, and the Federal Reserve note has no doubt
replaced much of this class of currency. '
In order to meet any unusual demand for currency a supply of Federal Reserve
notes of this bank amounting to $45,000,000 has been printed, a generous supply
being carried always on hand in Boston by the Federal Reserve Agent, ready for issu­
ance. As these notds are estimated to cost $0.00959 per note, this has been a heavy
expense to the bank, but as the supply will probably cover several years’ necessities
the cost will be distributed over that period. Each time notes are issued the cost is
charged by the bank as a current expense.
Satisfactory results have been obtained in cleaning and laundering soiled notes at
a very small cost.
The Subtreasury has furnished fiacilities for canceling and cutting mutilated notes
that have been redeemed and those notes have been forwarded to the comptroller




12

ANNUAL REPORT OF FEDERAL RESERVE B A N K OF BOSTON.

for destruction. Federal Reserve notes of other Federal Reserve Banks have been
received on deposit by this bank and forwarded to the issuing bank as follows:
New York............................................. ................................................ ..
Philadelphia............................................................................................ .
Cleveland............... ................................................... .............................
Richmond............................ . .................................................................
Atlanta.......................... ............................................................................
Chicago............ ..........................................................................................
St^ Louis.....................................................................................................
Minneapolis...... .................................................................... ................
Kansas City........................................................................................... *..
Dallas..........................................................................................................
San Francisco...... ......................................................................................

$954, 645
31,690
24,315
69, 865
29, 800
22,925
3,770
20, 305
12,485
22, 780
7, 205

Total................................................................. .............................. 1,199,785
Notea of this bank have been received from other Federal Reserve Banks as follows:
New York*...... .......................................................................... ................. $232,070
Philadelphia............ ................. ...................................................... ...........
29,750
Cleveland.................................................. .................................................
575
Richmond.......................................................... .............. ............ . ...........
1,440
Atlanta..................................................... ...................................................
1,255
Chicago...................................................................................... ................
7,400
3,050
St. Louis........................... ...........................................................................
Minneapolis.................... ................... .........................................................
160
550
Kansas City.................................. ..............................................................
Dallas................ ..........................................................................................
290
San Francisco...............................................................................................
6, 330
Total.................................. ................. ............................. ...............

282,870

G overn m en t B onds,

This bank has purchased $1,000,000 United States Government 2’s, 1930, at prices
ranging from 98J to 99. The question of purchasing Government securities has been
frequently discussed by the directors of this bank. Apart from the fact that each year
this bonk may be called upon to purchase its pro rata of such securities presented
for purchase by member banks under the provisions of the Federal Reserve Act,
various arguments have been presented against the purchase of such bonds for invest­
ment.
O p e n -M a r k e t O p e r a t i o n s .

In order to meet its operating expenses tins bank has been a large purchaser of
bankers’ acceptances and city and town notes.
On February 18, 1915, the directors of this bank voted to establish a rate of not
less than 2 per cent and not more than 4 per cent for the purchase of bankers’ accept­
ances. It has purchased acceptances at rates varying from 2 per cent to 3 per cent,
following table shows the purchases by months:




ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

Amount.

Month.

February.
March___
April.
May.
June.......
July...........
August___
September.
October___
November.
December.,

13

1915.

1340,317.18
1,030,278.09
549,853.94
643,209.30
572,516.55
1,063,620.68
1,063,486.29
781,224.78
1,791,963.05
3,348,051.89
2,920,804.84

Total..................................................... - .............................................................................. 14,105,326.59

It is the custom of New England cities and towns, especially in Massachusetts, to
issue short-time notes in anticipation of taxes, to be paid from the current taxes.
These municipal warrants form a most attractive investment, a default in payment
being practically unknown. Under regulations of the Federal Reserve Board this
bank has purchased $8,247,535.85 of these warrants, as shown by the following table:
Number
of pur­
chases.

Month,

January..
February.
M a rch /...
April........
May.
June...........
July...........
August___
September.
October___
November.
December..

1915.

5
3
8

13
20
20

17
12

18
7
23
16

Amount.

$555,000.00
320.000.00
306,84Q.00
635.000.00
658,200.00
731.000.00
433.000.00
1,144,000.00
748.000.00
339.000.00
1,706.575.27
670,920.58
8,247,535-85

Total.

These have been purchased at prices ranging from 2 per cent to 3£ per cent. The
prevailing prices have been somewhat higher than in past years, due to purchases
by Federal Reserve Banks and low money rates. These town notes are readily con­
vertible., there being a good demand for them from savings banks and trustees.
The H

a n d l in g

of

Ch e c k s .

There is no problem that has been given more careful study by the officers of this
bank than that of the handling of checks for its member banks. In this particular
district, owing to the highly developed system which has been operated for several
years by the Boston Clearing House Association, the necessity for this bank to develop
a collection system of its own, so far as the handling of intradistrict checks is con­
cerned, was not so imperative as in most of the other districts, for through that medium
a very large percentage of checks on New England banks, member and nonmember,
are being handled at pax. The need of member banks is largely for the handling of
interdistrict checks, which not only form a laige percentage of the total amount of
checks they receive, but most of which are subject to a collection charge under the
Boston Clearing House rules, member banks carrying accounts in other cities—prin­
cipally Albany and Philadelphia—in order to collect these checks at par. The devel­
opment of this interdistrict clearing is naturally dependent upon the development
of the clearing systems in other districts.




1‘4

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

i
In connection with the opening of the Federal Reserve Banks this bank advised
its members that it would receive on deposit for immediate credit checks drawn on
any Federal Reserve Bank and checks drawn by member banks on member banks
in Boston only. This practice
continued until the collection system was inaugu­
rated <MJune 15, 1915.
(Jil Kovemfier 13,1914, the Federal Reserve Bank of Bosttm i m <d«cted a limited
memberof the Boston Clearing House Association, and on November 18,1914, began
to clefcrits Boston checks. From that date on the Boston banks made clearing-houss
settlements by checks drawn on this bank, a policy which still continues and which hae
dfttie atfay with the payment of money in clearing-house transactions and the necessity
of carrying through the streets large sums of currency to and from the clearing house.
The method by which this is accomplished is as follows: Boston banks having debit
balances against the clearing house each day draw their check in favor of the clearing­
house manager, who in turn opens a temporary account in the Federal Reserve Bank.
These checks he deposits each day and draws his checks in favor of banks gaining or
having a credit balance.
On June 15, 1915, t^iis bank inaugurated the voluntary clearing system generally
adopted by the Federal Reserve Banks, a system of immediate debit and immediate
credit for intradistrict checks. Forty-three bulks joined this system at the outset,
and since that time nine additional banks have joined and two withdrawn from the
system, making the present number 50, as shown by the following list:
CITY OR TOWN AND NAME OF BANK.

Attleboro, Mass., First National Bank.
Bellows Falls, Vt., National Bank of.
Boothbay Harbor, Me., First National
Bank.
Boston, Mass., Boylston National Bank.
Boston, Mass., Commercial National Bank
Boston, Mass,, First National Bank.
Boston, Mass., Fourth Atlantic National
Bank.
Boston, Mass., Merchants National Bank.
Boston, Mass., National Union Bank.
Boston, Mass., Old Boston National Bank.
Boston, Mass., Old Colony Trust Co.
Boston, Mass., Peoples National Bank of
Roxbury.
Boston, Mass., Second National Bank.
Boston, Mass., Webster & Atlas National
Bank.
Bridgeport, Conn., First Bridgeport
National Bank,
Chelsea, Mass., Broadway National Bank.
Claremont, N. H., Claremont National
Bamk.
Clinton, Conn., Clinton National Bank.
Banbury, Conn., Danbury National Bank.
Gloucester, Mass., Cape Ann National
Bank.
Gfcetenfield, Mass , First National Bank.
Qfeenwich, Conn., Greenwich National
Bank.
Haverhill, Mass., First National Bank.
Hudson, Mass., Hudson National Bank.
Park National Bank.
Mass., Hopkinton National
Mass., Manufacturers National




Manchester, N. H., Amoskeag National
, Bank.
Manchester, N. H., Merchants National
Bank.
Marlboro, Mass., First National Bank*
Marlboro, Mass., Peoples National Bank.
Millbury, Mass., Millbury National Bank.
Montpelier, Vt., First National Bank.
New B e......................................National
Bedford, Mass., Mechanics .
Bank.
Newburyport, Mass., Merchants National
Bank.
New Haven, Conn., First National Bank.
North Bennington, Vt., First National
Bank.
Northborough, Mass.,
Northborough
National Bank.
Norwodtf, Mass., N o n ^ d National Bank.
Plymouth, Mass., Plymouth National
Portsmouth, N.H., First National Bank.
Providence, R. I., National Exchange
Bank:
Quincy, Mass./Mount Wollaston National:
Bank.
Springfield, Mass., Chicopee National
Bank.
Springfield, Mass., Springfield National
Bank.
Ware, Mass., Ware National Bank.
Westfield, Mass., Hampden National
Bank.
Windsor, Vt., State National Bank.
Worcester, Mass., Merchants National
Bank.
Worcester, Mass., Worcester National
Bfcnk.

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

15

The largest number of checks handled in one day was 1,803, on October 18, 1914,
and the smallest number 226, on June 15, 1915. The average number of items daily
was as follows:
July, 1,023; August, 1,030; September, 1,045; October, 1,205; November, 1,255^
December, 1,202. The average amount of these checks daily hae been as follows:
July, $1,064,297.36; August, $977,795,84; September, $1,090,206.51; October*
$2,010,813.44; November, $2,901,186.54; December, $2,290,814.11.
With the inauguration of this collection system the bank changed its previous
schedule in reference to checks on Federal Reserve Banks taking for immediate credit
drafts drawn by member banks upon the principal banks in New York, Albany, and
Philadelphia, as well as drafts drawn upon the Federal Reserve Banks of New York
and Philadelphia. Checks on the following Federal Reserve Banks are received oi$
a deferred basis.
Federal Reserve Bank of Richmond, two days after receipt.
Federal Reserve Bank of Cleveland, two days after receipt.
Federal Reserve Bank of Chicago, two days after receipt.
Federal Reserve Bank of St. Louis, two days after receipt.
Federal Reserve Bank of Atlanta, three days after receipt.
Federal Reserve Bank of Minneapolis, three days after receipt.
Federal Reserve Bank of Kansas City, three days after receipt.
Federal Reserve Bank of Dallas, four days after receipt.
Federal Reserve Bank of San Francisco, six days after receipt.
With the opening of the Federal Reserve Banks, the Boston Clearing House A bsck
ciation passed a resolution to amend section 2 of its rules and regulations to read %
follows:
“ Sec. 2. For all items collected for account of the Governments of the United
States, the State of Massachusetts, or the city of Boston, for New England checks
collectible at par through the Boston Clearing House, and for items payable in the
cities of New York, Providence, Albany, Troy, Jersey City, Newark, Hoboken*
Bayonne, Philadelphia, and Baltimore, and for all items (whether such items ate
collected through the Federal Reserve Bank of Boston or otherwise) which the Federal
Reserve Bank of Boston shall have notified the manager of the Boston Clearing House
Association that it will receive from its members for immediate credit at par, the
charges shall in all cases be discretionary with the collecting bank, and shall not be
governed by the provisions of these rules and regulations. ’ ’
Although all member banks were invited to enter the clearing system no efforts were
made on the part of this bank’s officers to influence^ member banks to jbin, the cha$->
acter of the business of the banks in New England, especially that of banks outside ol
Boston being such that after careful study.it was concluded that these banks would
have difficulty in maintaining balances to meet their checks. The country bank haa
been accustomed to count as reserve checks sent to its reserve correspondent as sooi*
as those items were mailed, and balances with those correspondents being counted a*
reserve by the country banks as shown by their own books, and not as shown by tjhe
books of the collecting bank, although even the record of the latter bank would include
uncollected checks. Furthermore, a practice has developed of allowing the out-oK
town bank to remit for its own checks, and therefore the country bank has been accuse
tomed to handle its business under the prevailing practice, the burden of carrying the
uncollected checks falling on the reserve correspondent, the country bank carrying
compensating balances to reimburse it.
As the reserves of the country banks are to be ulitmately transferred to the Federal
Reserve Banks, the Federal Reserve Banks must furnish its members with the facile
ities which they are receiving from their reserve correspondents. While the physical
handling of items, both time and demand, is a large one, it ie not insurmountable, for




16

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

tMt meanssimplymenand machines. The expense will be heavy,but there is little
qti&tion biit that a saving can be made over the present existing methods, and under
,
the Federal Reserve Act this expense can be prorated among the member banks.
; Qti^the ottier hahd, as the checks pertain to the reserves of the out-of-town member
is a morefeeriouaone.
theBdstpnCIearing House passed the nerw schedule of col­
lection charges appended'herefo, which showed a substantial reduction. There is no
qu&ticai but that Blest1of these chafes were brought about by the facilities offered
by the Federal Roserve Banks through the gold settlement fund, and by the collection
system inaugurated in the clearing housed in other cities which are based to quite an
BjateUt on the facilities given by other Federal Reserve Banks. The problems
involved in the handling of checks arise largely in connection with the out-of-town
banks, especially as it pertains to their reserves, and in this connection it would
appear that there was need for amendments to the Federal Reserve Act.
P u b l ic it y .

Each month the Federal Reserve Agent has furnished for the Federal Reserve
Bulletin a report on conditions in New England. In this connection information,
opinions, and statistics have been furnished freely by the merchants in the different
lines of trade, and by the local bankers, and this service and cooperation has been
most helpful. The officers of the bank have furnished the local newspapers from
time to time with such details of its operation as they felt would be of interest to the
public at large. Rates of discount established by the bank appear each day in these
papers. During the past year addresses have been made before State banking asso­
ciations and before many trade associations, it being thought a matter of the greatest
importance to have the bankers and merchants not only familiar with the details of
the Federal Reserve System, but to have them interested in the work the bank is
doing and the progress being made in the development of the system. The public
apparently know very little about the new banking system or its purpose and every
effort should be made to give them authentic* information.
R

e l a t io n s

B etw een

the

F ederal R eserve B an k
Banks.

of

B oston

and

Its M e m b e r

f Owing to the unusual condition existing in the money market, and to the fact that
the reserve city banks offer facilities to the country banks which this bank has not yet
developed, more particularly in connection with the collection of checks and other
items, the latter banks have carried only their minimum reserve requirements with
this bank and have used ltd facilities only tQa limited extent. The relations between
country bank officials and the officials of this bank have been most cordial. While
many of the banks in this district are borrowing, most of them find it much mote
convenient to go to their correspondent bank and borrow, either in the form of a
demand loan, With or without collateral, or against a certificate of deposit.
The comptroller's calls on the several dates show the total borrowings of member
banks in the district as compared with their rediscounts with this bank, as follows:




Total
borrowed.

IX :v" v 'i! ! ! ! “ ! " * ! !! ! ! ! ! ! * I!
4b>. . . «« *I »4« th **4•■4l t ^ ■i *>*■***....... .
■
t
k

$4,738,416
4,047,708
3,069,796
........................ t *^ 4,284,445
3,398,856;
2,985,406

__

Borrowed,
F. R. B.
$105,000
234,531
410,723
270,44*
190,849
131,725

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

17

N The officials of the city banks on the other hand are apparently satisfied with the
progress made in the development of this bank’s functions. While but few of the
Boston banks have rediscounted with us, almost all have intimated that should
occasion arise they would do so. Furthermore, several Boston banks have entered
into the acceptance business to a large extent, and the assistance that this bankha*
given in the matter of rates and market for acceptances has done mucfcjp bring it
into favor with those banks. The Boston ba^ks have also used this bank to 4 large
extent in exchange transactions, and the aeryices offered by the gold settlement
fund have been used almost exclusively by those banks.
Thus far Boston banks have received more benefits from this bank than have the
other banks in this district. A possible exception to this is in Aroostook County,
Me., where, owing to an unusual situation surrounding the principal industry, the
potato crop, banks have relied on this bank to a considerable extent to cany them
through a trying period. The moral effect of having the Federal Reperve Bank of
Boston stand behind them was not only appreciated by those banks, but enabled *
them to handle their business much more satisfactorily and to finance themselves
without having to call upon this bank to an undue extent for rediscounts or without
embarrassing their customers.
T h e A t tit u d e

of

State B a n k s T o w a r d

th e

F ederal R

e serve

Sy s t e m .

The trust companies in this district, at least those doing a commercial business,
are watching with interest the operations of this bank, and several are inclined to
enter the Federal Reserve System.
The relations between the officials of this bank and those of the State institutions
have been most satisfactory, and frequent interchange of ideas and the cooperation
received by these officials have been most helpful.
The board of directors have appointed a committee consisting of the governor,
the Federal Reserve Agent, and one director to examine and pass on the condition
of State banks applying for membership in the system. The class B director, group 1,
is the third member of this committee in the case of trust companies located in Boston,
and the class A director, group 1, on trust companies outside of Boston.
' On the recommendation of the above committee the Federal Reserve Board admitted
the Old Colony Trust Co. to membership on August 14,' 1915. This trust company
subscribed for 7,200 shares of stock, making payment of $360,000, being 50 per cent
of its subscription, on August 24, 1915, and on the same day transferred to this bank
fft,600,000 reserves.
In connection with the application of State banks for admittance to the Federal „
Reserve System, the assistance and cooperation of the Massachusetts banking depart­
ment has been of great assistance, and the relations between the officials of this bank
and those in that department are most cordial.
B a n k e r s ’ A cceptances.

New England imports a large volume of hides and wool from South America and
cotton and jute from the Orient and other sections of the world. These shipments
in the past have been financed through credits drawn on European centers. Since
the opening of the Federal Reserve Banks these foreign trade transactions have been
financed to a large, extent through dollar credits drawn on this country and the
acceptances arising therefrom have found a ready market in the Federal Rieserre
Banks. Several of the member banks in this district have entered this new
of finance and the Federal Reserve Bank of Boston has used every effort to fifiPtK
$r
and develop that business, not only by buying a large amount of that class of paper;
.
*
’ A
■’
f




28

AKNTJAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

but also through furnishing favorable forward discount rates to assist in protecting
its member banks. The following member banks have entered this field:
1. First National Bank, Boston, Mass.
2. Fourth-Atlantic National Bank, Boston, Mass.
3. Merchants National Bank, Boston,’ Mass.
4. National Shawmut Bank. Boston/Mass.
5. Old Cblony Trust Co., Boston, Mass.
6. Second National Bank, Boston, Mass.
7. Merchants National Bank, Worcester, Mass.
iJnder special permission of the Federal Reserve Board the First National Bank,
df Boston, and the National Shawmut Bank, of Boston, have been given authority to
accept up to 100 per cent of their capital and surplus. It is of interest to note that the
former bank has reported the largest amount of acceptances of any member bank of the’
Federal Reserve System.
G old S ettlem en t F u n d .

The inauguration of the gold settlement fund in Washington is one of the most
important developments of the Federal reserve system, and its influence has,been
felt by the banks in the district in facilitating the handling of domestic exchange,
arising for the most part in connection with the collection of checks outside of the
district. While this settlement fund has been used for the most part by the city banks,
it has enabled those banks to collect the checks of the out-of-town banks with less
expense. The influence of this fund has also been shown in the recent regulation on
checks adopted by the Boston Clearing House Association and other associations.
Since the inauguration of this clearing fund between the Federal Reserve Banks
this bank has handled for its member batiks without cost to them about $267,000,000
of exchange, only having to transfer $680,000 of gold to the fund after the initial
deposit.
E l e c t io n .

An election was held between November 16, 1915, and December 1, 1915, for the
selection of a class A and a class B director. The retiring directors represented group
3, and, therefore, only banks in that group had the right to vote for their successorsGroup 3 consists of 145 of the smaller banks in the district, and of that number only
60 banks certified district reserve electors. Only a moderate amount of interest was
taken in the election and only three candidates were nominated for each class. Of
the 60 electors only 52 voted. A majority of the votes cast were for the outgoing
directors, Mr. Arthur M. Heard, of Manchester, N. H., class A, and Mr. Charles G.
Washburn, of Worcester, Mass,, class B, who therefore wer^ declared reelected.
M em ber B a n k s.

When the Federal Reserve Bank of Boston commenced business on November 16,
1914, it had 439 member banks. Soon after this the Island Pond National Bank,
Island Pond, Vt., joined the system, and on June 18, 1915, the First National Bank,
Yan Buren, Me., which had just been organized, joined. On August 24, 1915, the
Old Colony Trust C > Boston, Mass., also became a member, making a total of 442,
< .,
banks.
During the first year the following nine banks have gone into liquidation and with­
drawn from the system, leaving 433 member banks in this district:
Charter Oak National Bank, Hartford, Conn., consolidated with Phoenix National
Bask, Hartford, Gmm.
Pacific National Bank, Lawrence, Mass.,. consolidated with Merchants Trust Co.,
Lawrence, Mass.
Aetna National Bank, Hartford, Conn., consolidated with Hartford National Bank,
Hartford, Conn.




ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

1#

National Union Bank, Woonsocket, R. I/, consolidated with Woonsocket Trutft ^o.,
Woonsocket, R. I,
Winthrop National Bank, Boston, Mass., consolidated mAh Merdterte National
Bank, Boston, Mass.
'
New Haven County Natkmi J in k , ffaw Haven, Conn;, consolidated with N
feifr
Haveniiftnk, N. B. A., New Haven/Conn.
Lynn National Bank, Lynn, Mass., consolidated with Lynn S&fe Des^it 4 TVOBt
Co., Lynn, Mass.
First Ward National Batik, Boston, Mass., and Mutual National Bank, B&
stttn^
Mass., formed Metropolitan Trust Co., Boston, Maas. .
The capital stock of this bank has been increased 6,044 shades since the original
payment was made on November 2, 1914* Through the admission of the Old Colony
Trust Co. of Boston and the readjustment of the capital and surplus of member banks'
9,359 additional shares have been Issued to member banks at par. Through the
liquidation of member banks and changes in capital and surplus 3,315 shares have
been surrendered.
F id u c ia r y P o w e r s .

Under date of February 15, 1915, the Federal Reserve Board issued its circular
inclosing regulations covering the granting of special permission to national bante
to perform certain fiduciary functions under section 11 (k) of the Federal Reserve Act.
Thus far the applications of the following banks have been approved by the Federal
Reserve Board:
T r u s t e e , E x e c u t o r , A d m in is t r a t o r ,

and

R

e g is t r a r o p

CONNECTICUT.

1915.
Mar. 22. Middletown National Bank* Middletown.
22 . Second National Bank, New Haven.
22 . Manufacturers National Bank, Waterbury.
Apr. 29. National Bank of Norwalk, Norwalk.
May 8. National Tradesmens Bank, New Haven.
8 . Merchants National Bank, New Haven,
July 26. Yale National Bank, New Haven.
Aug. 20. City National Bank, South Norwalk.
26. City National Bank, Bridgeport.
MASSACHUSETTS.

Mar. 15. First National Bank, Boston.
18. National Shawmut Bank, Boston.
22. Merchants National Bank, Boston.
22. Second National Bank, Boston.
22. Union Market National Bank, Watertown.
22. Worcester National Bank, Worcester.
26. Peoples National Bank, Boston.
26. Merchants National Bank, Salem.
26. Merchants National Bank, Worcester.
Apr. 3. National Mahaiwe Bank, Great Barrington,
3. Norwood National Bank, Norwood.
12. City National Bank, Holyoke.
20. First National Bank, Haverhill.
20. First National Bank, Webster.
22. Chicopee National Bac&,. Springfield.
24. Crocker National Bank, Turners Falls.
29. Home National Bank, Holyoke.




Stocks

and

B on ds.

20

ANNUAL REPOET OF FEDERAL RESERVE BANK OF BOSTON.

1915.
May 8.
8.
10.
June 1.
July 26.
Aug. 26.
26.
Sept. 10.
13.
Dec. 1.

Massasoit-Pocasset National Bank, Fall River.
Mechanics National Bank, New Bedford,
Peoples National Bank, Marlboro.
Agricultural National Bank, Pittsfield.
Northampton National Bank, Northampton.
Fif&t National Bank, Marlboro.
Pittsfield National Bank, Pittsfield.
Gape Ann National Bank, Gloucester.
Greylock National Bank, Adams.
Holyoke National Bank, Holyoke.
NEW HAMPSHIRE.

Apr.

3.
12.
20.
20.

Claremont National Bank, Claremont.
Strafford National Bank, Dover.
First National Bank, Concord.
Keene National Bank, Keene.
RHODE ISLAND.

Mar. 26. Aquidneck National Bank, Newport.
VERMONT.

May

5.
8.
Oct. 21.
Dec. 1.

Peoples National Bank, Brattleboro.
Citizens National Bank, Poultney.
First National Bank, Brandon.
Welden National Bank, St. Albans.
T rustee, E xecutor,

A d m in is t r a t o r .

and

CONNECTICUT.

Mar. 22. First National Bank, Wallingford.
NEW HAMPSHIRE.

Mar. 18. Merchants National Bank, Dover.
May 10, Indian Head National Bank, Nashua.
T

rustee,

E xecutor,

and

R e g is t r a r

of

Stocks

and

B onds.

Apr. 12. First National Bank, Portland, Me.
Oct. 6. Norway National Bank, Norway, Me.
T rustee,

and

R e g is t r a r

of

Stocks

and

NEW HAMPSHIRE.

June 7.
July 13.
14.
Aug. 2,
Sept. 10.

Ashuelot National Bank, Keene.
Citizens National Bank, Newport.
Wolfeboro National Bank, Wolfeboro.
Amoskeag National Bank, Manchester.
Mechanicks National Bank, Concord.
T rustee.

May

6. Old Lowell National Bank, Lowell, Mass.
R

e g is t r a r

of

St o c k s .

Mar. 22. Essex National Bank, Haverhill, Mass.
R

e g is t r a r of

Stocks

Sept. 21. City National Bank, Danbury, Conn.




and

B<>n d s .

B onds.

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON,

‘ 21

In none of the New England States is there any statutory provision expressly
authorizing national banks to act as trustee, executor, administrator, and registrar
of stocks and bonds except Vermont. In Vermont the legislature ofl91$pa8sedap
act expressly authorizing national banks to ac{ as executor, trustee, and adminis­
trator. New Hampshire recently passed an act forbidding banks to act aa executor
or administrator. The question as to whether this act applies to national banks %
s
well as trust companies is now pending before the New Hampshire Silpreme Court.
A committee, composed of the governor, the chairman, and the cashier, have
passed upon the applications of member banks for powers under section 11 (k) of the
Federal Reserve Act. In the case of each application this committee has scruti­
nized carefully both the resources and management of the applying^ bank before
making its report. The Committee makes its report to the board of directors, who
make, through the chairman, a recommendation to the Federal Reserve Board baaed
upon the report of that committee. The granting of these privileges has been greatly
appreciated by member banks.
In determining the standing of these banks, the cooperation and assistance afforded
by Mr. James D. Brennan, chief national-bank examiner of this district, has been of
much value.
C r e d it N e e d s

op th e

D is t r ic t .

This is a savings district for the most part, and banking capital iB in excess of the
demands of local business. Therefore banks are obliged to seek investments in the
open market. Commercial paper should constitute more of the investments of the
commercial bank, especially of the country bank. The country bank’s experience,
however, in purchasing outside paper has not been very satisfactory, and this has led
those banks to invest more and more in a poorer grade of bonds yielding a high per
cent of income. These investments, in many cases, have not proved satisfactory,
and many banks show a heavy shrinkage in their bond accounts.
The development of a credit department and its use by member banks is a subject
that has been given careful consideration. Thus far the work in the credit depart­
ment has been limited largely to the compiling of statistics and credit information
on member banks and State banks applying for membership. The credit depart­
ments of the Boston banks have been of much assistance and have been frequently
used in checking up the makers of notes offered for rediscount.
Every effort should be made by reserve banks to see that proper safeguards sur­
round the commercial notes purchased by member banks through note brokers. It
would seem advisable to standardize, as far as possible, the form of statement fur­
nished by the broker to banks buying paper in the open market and that such state­
ments should be certified to by outride accountants, and in the case of tfce luger bor­
rowers that notes be registered by some responsible agent. This bank has furnished to
its member banks a simple form of statement to be used in obtaining credit informa­
tion from depositors and has recommended the forms adopted by the American Bank*
era’ Association as a standard form when more detailed information was deemed
necessary.
The provision of the Federal Reserve Act allowing member banks under certain
restrictions to invest in farm mortgages has been exercised to but a limited extent by
banks in this district, farm lands in New England not furnishing for the most part
attractive security for loans. There is, however, in many of the country districts a
demand for real-estate loans. If the Federal Reserve Act could be amended so that
in lieu of the farm loan member banks outside of reserve cities could invest a certain
portion of their time deposits in loans against improved local real estate^ perhaps at
60 per cent of the assessed value of the land and buildings, member banks have
stated they would avail themselves of that privilege, and could invest more of their
surplus money locally and with greater safety.




22*

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.
C o o p e r a t io n B e t w e e n F e d e r a l P e s e r v e B a n k s .

This bank has purchased about $4,886,000 municipal notes, which it has distributed
among tfae other Federal Reserve Banks. In matters pertaining to exchange between
it and the other Federal Reserve Banks, this bank has allowed those exchanges to
take a normal course and has not made any profit on such transactions. The board
of directors voted to purchase from other Federal Reserve Banks a considerable
block of rediscounts provided those banks found it necessary to rediscount.
R e l a t io n s B e t w e e n

the

Governor

and

F ederal R eserve A g en t.

The relations between the governor and the Federal Reserve Agent from the begin­
ning have been those of partners rather than of officers in a corporation, both realizing
that the ultimate success of the Federal Reserve Bank of Boston should be their first
thought. Both have shared in the responsibilities and tried to direct the bank’s
policy for the greatest benefit of the commerce and member banks in this district.
While the FederaL Reserve Agent has had charge of the credit department and sta­
tistical work, his organization has been easy of access and freely used by the officers
of the baht. On the other hand, the banking staff has assisted the Federal Reserve
Agent’s department in collecting statistics, in handling unfit Federal Reserve notes,
and this service has been given freely when needed. There has been cooperation
at all times between the banking department and the department of the Federal
.Reserve Agent.
E

ffect of

R ates

of

D isc o u n t F ix e d b y the F e d e r a l R e s e r v e B a n k
R a t e s i n t h is D i s t r ic t .

on

M oney

The opening of the Federal Reserve Bank of Boston on November 16, 1914, had a
marked effect upon the then existing money rates in this district, especially so in
the large centers. This, however, was caused more through the release of cash for­
merly held by member banks as reserve than by the establishment of discount rates
by this bank.
Within a few days after the opening of the bank rates were reduced anywhere
from 1 to 2 per cent and the banks in the large centers were more inclined to extend
accommodation to their own customers, and the demand rate on brokers’ loans was
equally materially reduced. The establishment of the lower rates from time to time
affected the rates paid by the country bank on its borrowings, for the Boston banks,
wishing to retain the loans of the out of town banks, met those rates and the country
banker h^s been able to borrow money during the past year probably lower than he
ever has before.,
On the. other hand, the exceptionally large reserves in the centers have no doubt
been a factorM the reducing of rates. During the past 12 months the country banks
have been borrowing on an avera^ge of about $4,000,000, and as this bank has only
rediscounted on an, average about $200,000 of that amount that fact is apparent.
The following table shows that trend of rates in this district since November, 1914:

6
©

mfiTifty ............... 6-7 4J-5J 4-5J 3*-4
Tteeittoaey, 6 months or
................... . 6-7 5 -6 4-5
6
5
Yearraoney... . . . . . . . . . . . .
5*

.....

®©tweeii toamks...............




$

4 1 1 f. r 1, "■ i
3

3

3 |3 ii
i ^
1

2 -24
3M ’
f H l 3 -3}
6 5HS 4 ^ 3 M 3J-4

W
f

3

3J-4&

3

’K

3

3
3J -4
4|-4*

m«

,3

O
3

84n

Nov.

i

Sept.

1915

1914

3

8

Q

3

2 - 4 2 ^ il
2 -2i
3^3
2 * - i 2*-3
3 M I f - ? 3 - 4 a - 4 3 -4 3 -4 3 -4 3 -4

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

£3

D is t r ic t P r o b l e m s .

The influence of the new reserve requirements, which became operative at the time
the Federal Reserve Bank opened, is a subject which is worth studying. Reference
to the subject of reserves has been made elsewhere, in this ^report, especially as^it
refers to the problem surrounding the collection of checks and its influence in t&e
retiring of emergency circulation.
*
Thus far, for the most part, the reduction in the new reserve requirements Uas bepn
of little help to the out-of-tpwn bank.
On the other hand, the Boston banks, Boston being the only reserve city in this
district, have been'able to reduce their reserves nearer the minimum. The releasing
of these reserves and the release of reserves in central reserve cities, especially New
York and Chicago, have produced a surplus in bank reserves which has greatly de­
pressed the money market, producing low rates, which have reacted against the
country bank.
Another problem, which is hot perhaps peculiar* to this district is so important that
mention should be made of it^is* the practice of allowing high rates of interest by banks
on open accounts and time deposits. While competition for business has brought
this practice about and will cause its continuation, still especially in the case of the
out-of-town bank it weakens the bank’s condition, these banks feeling obliged to
invest their funds in loans and securities of a lower grade than good banking practice
would warrant in order to show a profit on those accounts. This question of interest
paid on accounts pertains likewise to the State institutions, and cooperation between
State banking departments and the officers of the Federal Reserve System would
seem advisable.
I n d u s t r ia l

and

A g r ic u l t u r a l Si t u a t i o n .

The general industrial situation in this district at the time this bank began busi­
ness was unsatisfactory, due to quite an extent to circumstances connected with the
European struggle. Mils were running only a proportion of their capacity, and,
owing to the prevailing high rates of money and the unsettled condition in staple
products, general business was marking time. Orders for foreign consumption,
however, were arriving in increasing amounts, and these orders for boots, shoes,
leather, arms, ammunition, woolen goods, and machinery have been the principal
stimulus to business lor the greater part of the past year. Early in the fall, however,
domestic orders began to appear, especially from the South and West, and our mills
began to feel the effect of the falling off of foreign-made goods. While emergency
orders are still an important factor in some centers, general business has shown a
steady improvement from domestic trade, and on the whole every line, with but a very
few exceptions, reports good business. Labor is apparently well employed all over
the States, and especially in agricultural districts is hard to obtain. The dye situa­
tion, which affects the textile trade, has been getting more and more serious and has
restricted the production of certain goods.
While New England is largely a manufacturing district, agriculture plays quite
an important factor in the outlying sections. A year ago, with the exception of the
potato crop, the general run of farm products was good and brought fair prices. The
foot-and-mouth disease was heavily felt in the spring in certain sections where farmers
have relied on carrying over stock for spring market. The season of 1915 on ihe
whole has been unsatisfactory for the farmer, the early rainy weather, together with
the unseasonable spring and summer months, has brought rather poor returns from
most of the crops, especially the hay crop, which is an important one in New England.
On the other hand, the potato crop in Maine, where it is the most important factor,
has been unusually good and prices for that commodity range high. The farmers
relying on that crop will probably more than make up for their losses last year.




24

ANNUAL REPOET OF FEDERAL RESERVE BANK OF BOSTON.
E a r n in g s

and

E xpenses.

Not until January 9, 1915, when the tentative regulation of the Federal Reserve
Board on the purchase of town warrants was received, was this bank in a position
to invest any of its money, with the exception of a limited amount of notes redis­
counted for its meniber banks. The release on February 12, 1915, of Circular 5 of
that board enabled this bank to buy bankers’ acceptances, and these two classes of
loans have formed the greater part of its investments throughout the year.
During the period of organization the expenses were heavy. On June 30, 1915,
therefore, an operating less of $26,243.80 was shown. In additipn to that its share
of the expenses of the Federal Reserve Board, its organization expense, and the
cost of preparing a large supply of Federal Reserve notes created an expense of
$56,562.70, this expense to be distributed over several years and charged off as earn­
ings warrant.
It is the custom of this bank to count as income only actual interest and discount
earned, unearned income being carried in a separate account and transferred' from
day to day as earned to current income. On June 30, l$l5, this bank showed unearned
income of $23,550.83, or an amount nearly equal to the operating loss.
While the demand for rediscounts from member banks has not increased, invest­
ments in acceptances, town warrants, and Government bonds during the second half
of the year have been such that the earnings for that period make a much more satis­
factory showing, the surplus for the second period being practically enough to take
care of the operating loss of the first eight months.
L in e

of

D evelopm ent.

The past year has been one of development. The officers and directors of the
bank have had no precedents to guide them. They have been blazing a new trail,
and, although each step has had to be carefully thought out, progress has been stead­
ily made* The problems of this bank have been so different from those of the ordi­
nary commercial bank that past experience and training have been of little help in
solving them. Each problem as it came up has had to be carefully analyzed and
solved only after the most careful s^udy and inquiry into all conditions affecting it.
It has been the aim of the officers and directors of this bank to ptlt it in operation
and to carry on its business with as little disturbance to the financial machinery of
this district as possible. Its development has not been forced, but has come natu­
rally, adjusting its policy to present banking conditions and making innovations
slowly and with due care. It has been its aim to conserve its resources in such shape
as to make them available should occasion arise when member banks should need its
services.
A p p e n d ix .
B o s t o n Cl e a r in g H

ou se

A s s o c ia t io n .

{Collection schedule* January, 1914.]
FOE NEW ENGLAND.

Free.—All items on Providence, R. I., and checks on banking institutions remit­
ting at par through the Boston Clearing House.
One-tenth of 1 per cent.-*-All other New England items (exceptions noted below).1
OUTSIDE NEW ENGLAND.

])is(retwndrv.—Ml items on Albany, N. Y.; Baltimore, Md.; Bayonne, N. J.;
Hoboken, N. J.; Jersey City, N. J.; Newark, N. J.; New York, N. Y.; Philadelphia,
Pa.; and Troy, N. Y.
i One*twentietii of 1 per cent.—Caribou, Fort Fairfield, Fort Kent, Uoulton, Mars Hill, Presque Isle,
Van 1 uren, and TVashburn in State of Maine.
3




ANNUAL BEPOBT OF FEDEBAL BESEBVE BANE OF BOSTON,

25

One-tenth of 1 per cent.—All items on Canada, Delaware, District of Columbia, Illi­
nois, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Missouri, New
Jersey, New York, Ohio, Pennsylvania, Virginia, West Virginia, and Wisconsin.
One-fourth of 1 per cent.—All items on Alabama, Arizona, Arkansas, California,
Colorado, Florida, Georgia, Idaho, Indian Territory, Kansas, Louisiana, Mississippi,
Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oklahoma.
Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, ana
Wyoming.
No charge less than 10 cents.
CHARGE POINTS NOVEMBER, 1914.
[Showing points that have gone on par list since that data
B o s t o n Cl e a r i n g H o u s e .
FOREIGN DEPARTMENT.

Checks on banking institutions, as listed below, will be received on deposit subject
to a discount of one-tenth or one-twentieth of 1 per cent as stated, under the rules
and regulations adopted by the Clearing House Association.
Ve r m o n t .

One-tenth of 1 per cent.
Barton Savings Bank & Trust Co.
Bethel, National White River Bank.
Bradford National Bank.
Bristol, First National Bank.
Burlington, Howard National Bank.
Burlington, City Trust Co.
Burlington, Merchants National Bank.
Burlington Trust Co.
Burlington, Hiittenden County Trust Co.
Chelsea, National Bank of Orange County
Chester, National Bank of.
Danville, Caledonia National Bank.
Derby line, National Bank of.
Ehosburg Falls Savings Bank & Trust Co.
Enosburg Falls, First National Bank.
Es£ex Junction, Essex Trust Co.
Fairhaven, Allen National Bank.
Fairhaven, First National Bank.
Hardwick, Granite Trust Co.
Hardwick Savings Bank & Trust Co.
Hyde Park, Lamoille County National
Bank.
Island Pond National Bank.
Ludlow Savings Bank & Trust Co.
iyndonville National Bank.
Manchester Center, Factory Point Na­
tional Bank.
Widdlebury NqiionaLBank.
Middletown Springs, L. < fA. Y. Gray.
S
Montpelier National Bank.
Momsville, Union Savings Bank & Trust
Co.
NewportTNational Bank of.
Newport, Orleans Trust Co.1
North Bennington, First National Bank.
Northfield National Bank.
Northfiel<LSavings Bank.
North Troy, Valley Savings Bank &
Trust Co.
. ' ,
r
Orleans, Central Savings Bank & Trust
.. Co.
......... . 7




"

" ........ ............................................

Poultney, First National Bank.
Poultney, Citizens National Bank.
Proctor Trust Co.
Proctorsvllle, National Black River Bank.
Randolph National Bank.
Richford Savings Bank & Trust Co.
Rutland, Clement National Bank.
Rutland, Killington National Bank.
Rutland, Rutland County National Bank.
Rutland, Rutland Trust Co.
Springfield, First National Bank.
St. Albans, Welden National Bank.
St. Albans, Franklin County Savings
Bank.
St. Albans, Peoples Trust Co.
Swanton Savings Bank & Trust Co.
Vergennes, National Bank of.
West Rutland TruBt Co.
White River Junction, First National
Bank of.
White River Junction, Hartford Savings
Bank & Trust Co.
Winooski, Champlain Trust Co.
Woodstock National Bank.
MAINE.

Orte-twentieth of 1 per cent,
Caribou, Aroostook Trust Co.
Caribou National Bank.
Fort Fairfield National Bank.
Fort Fairjjield, Frontier Trust Co.
Fort Kent Trust X
Jo.
Houlton, Farmers National Bank.
Houlton, First National Bank.
Houlton Trust Co.
Mars Hill Trust Co. ,
Presque Isle Na,ti6nil Bank.
Preqque Isle,
Trust 4? Banking
Co. , .
Van Buren Trust Co. .
Van Buren, First National Bank.
WisT^urn,,7
Aroostook Trust Co]
‘

i Have gone on par list since Nov. 10,1014.

2®

ANNUAL REPORT OF FEBEBAL RESERVE BANK
NEW HAMPSHIRE.

One-tenth of 1 per cent:

O BOSTON
F

Wolfbonmgh, National Bank.
Woodsville National Bank.
CONNECTICUT;

Berlin National Bank;
Berlin Guaranty Trust Co;
Colebrook, Farmers & Traders National
Bank.
Colebrook National Bank.
Conway National Bank.
Groveton, Coos County National Bank.
Lancaster National Bank..
Lancaster Trust Co.
Lisbon Savings Bank & Trust Co;
Littleton National Bank.
North Conway Loan & Banking Co.
Whitefield Bank & Trust Co.
N ovem ber,

1914:

One-tenth of 1 per cent.
Ansonia National Bank.1
Darien, Home Bank & Trust Co.1
Derby, Birmingham National Bank.1
Myetic River National Bank. ^
Norwalk,Fairfield County National Bank.
Norwalk, Central National Bank & Pck
h
plea Trust Co.
Seymour Trust Co.1
Shelton Trust Co.1
Thomaaton National Bank.
C. A.

R

uggles,

Manager,

CHARGE POINTS, NOVEMBER 16, 1915.
B o s t o n C l e a r i n g H o u s e A s s o c ia t io n .
N o v e m b e r 16,1915.
At a special meeting of the Boston Clearing House Association, held to-day, the?
“ Rules and regulations regarding collections” were amended to make discretionary*
the following additional points:
1. Checks on points receivable upon deposit at par by Federal Reserve Banks in
the cities of Boston, New York, and Philadelphia from their respective member banks.
2. Checks on banks and trust companies in the States of New York and New Jersey
receivable upon deposit at par by members of the New York Clearing House Associa^
tion.
^
S. Checks on Federal Reserve Banks, provided that the credit of interest upon suck
checks shall be delayed in accordance with the schedule of deferred credit adopted bjr
the Federal Reserve Bank of Boston.
4. Items on Chicago and St. Louis.
5. Drafts drawn upon insurance companies and mutual savings banks located ii*
New England.
. The ‘' Rules and regulations regarding collections” as amended now read as follows
^Se c t io n 1. These rules and regulations shall apply to all members of the associfeion, and to all banks or trust companies or others clearing through such members.
The parties to which the same so apply are hereinafter described as collecting banks.

Sec. 2. The charges shall be discretionary with the clearing bank and shall not ba
governed by the: provisions of these rules and regulations upon the following items:

a. .All items collected for account of the Governments of tne United States, the Com*
monwealth of Massachusetts, or the city of Boston.
b. New England checks collectible at par through the Boston Clearing House.
c. Checks which Federal Reserve Banks in the cities of Boston, New York, and Phil*
adelphia shall give notice that they will receive upon deposit at par from their re*
cpective member bank?.
d. Checks on banks and trust companies in the States of New York and New Jersey;
receivable upon deposit at par by members of the New York Clearing House Asso*
ciation.
e. Checks drawn upbij any Federal Reserve Bank: ProwSerf, That, the credit of
interest upon such checks shall be delayed in accordance wifli the schedule of deferred
credit adopted by the Federal Reserve Bank of Boston.
/. Items payable ih the: cities of New York, Providence, Albany; Tiby, Jersey
Newark, Hoboken, Bayonne, Philadelphia, Baltimore, Chicagt>t and St. Louts.
g. Drafts drawn iipon insurance companies and mutual savin^ l^kcr located ifr
New England.
SAe. 3. Fbr all items*payable at anvpoint in New England,
a. Items on the city of Providence, R. L,
6. Checks collectible at jiaar through the Federal Reserve Bank of Boston,




* HHvegortettrttr Hat since Nov. 10! 1914.

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON,

c. Checks on those banking institutions which pay checks on themselves sent
through the clearing house by remitting therefor promptly on receipt thereof, without
charge, checks on some member of the Boston or New York Clearing House, or upon
some banking institution clearing through some such member; and
d. Drafts drawn upon insurance companies and mutual savings banks located in
New England,
the collecting bank shall charge not less than one-tenth of 1 per cent of the amount of
the items respectively, and In no case leas than 10 cents upon any one item, but all
such items received irom any one depositor or correspondent on the same day may
be added together and treated as one item for the purpose of fixing the amount to be
charged.
Until further notice from the clearing house committee, section 3 of the rules and
regulations regarding collections outside the city of Boston is modified by the addi­
tion of the following:
“ Should any banking institution in New England pay checks on itself sent through
the clearing house by remitting therefor promptly on receipt thereof, with a charge
of one-twentieth of 1 per cent, checks on some member of the Boston or New York
clearing house, or upon some banking institution clearing through some such member,
the collecting bank shall charge not less than one-twentieth of 1 per cent of the amount
of the item respectively, and in no case less than 10 cents upon any one, item; but
s*,
all such items received from any one depositor or correspondent on the same day may
be added together and treated as one item for the purpose of fixing the amount to be
charged.”
Sec. 4. For all items received (except those on Federal Reserve Banks and on the
points declared discretionary in sec. 2), payable at points in Delaware, District of
Columbia, Indiana, Illinois, Iowa, Kentucky, Maryland, Michigan, Minnesota, Mis­
souri, New Jersey, New York, Ohio, Pennsylvania, Virginia, West Virginia, Wis­
consin, and Canada, the collecting bank shall charge not less than one-tenth of 1
per cent of the amount of the items, respectively, and in no case less than 10 cents
Upon any one item; but all items described in this section received from any one de*
positor or correspondent on the same day may be added together and treated as one
item for the purpose of fixing the amount to be charged.
S e c . 5. For all items (except those on Federal Reserve Banks) payable at points;
in Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, In­
dian Territory, Kansas, Louisiana, Mississippi, Montana, Nebraska, Nevada, New
Mexico, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, South
Dakota, Tennessee, Texas, Utah, Washington, and Wyoming, the collecting bank
shall charge not less than one-quarter of 1 per cent of the amount of the items, respec­
tively, and in no case less than 10 cents upon any one item; but all items described
in this section received from any one depositor or correspondent on the same day
may be added together and treated as one item for the purpose of fixing the amount
to be charged.
Sec.'6. The charges herein specified are in all cases to be collected at the time of
deposit or not later than the 10th day of the following calendar month- No collecting
bank shall directly or indirectly ailow any abatement, Tebate, or return for or on
account of such charges, or make in any form any compensation therefor.
Sec. 7. In case any member of the association shall team that these rules and regu­
lations have been violated by any of the collecting banks; it shall immediately report
the facts to the chairman of the clearing house committee, or, in his absence, to the
manager of the clearing house. Upon receiving information from any source that
there has been a violation of the same, said chairman, or, in his absence, said man­
ager, shall call a meeting of the committee. The committee shall investigate the
facts* and determine whether a formal hearing is necessary; In case the committee
do concludes, it shall instruct the manager to formulate charges and present them to
the committee. A copy of the charges, together with written notice of the time and
place fixed for hearing regarding the same, shall be served upon the collecting bank
charged with such violation, which shall have the right at any hearing to introduce
such relevant evidence and submit such argument as it may desire. The committee
shall hear whatever relevant evidence may be offered by any person and whatever
arguments may be submitted, and shall determine whether the charges are sustained.
In case it reaches the conclusion that they are, the committee shall call a special
meeting of the association and report thereto the facts with its conclusions. If the
report of the committee is approved by the association, the collecting bank charged
with such violation shall pay to the association the sum of $1,000; and incase of a
second violation of these rules and regulations any collecting bankmayalso, in the
discretion of the association, be excluded from using its privileges directly or in­
directly, and, if it is a member, expelled from the association.
Charles P. Bu nn , Jr., Secretary,




28

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.
B o s t o n C l e a r in g H o u s e A s s o c ia t io n .

[List No. 2. December 6,1915.]

Banks outside of New England upon which the charge is discretionary:
All items on the cities of—
Albany, N. Y.
Baltimore, Md.
Bayonne, N.J.
Chicago, 111.
Hoboken , N.J.
Jersey City, N.J.
Checks upon the following banks:
Federal Reserve Banks—
Atlanta, Ga.
Chicago, 111.
Clevelaud, Ohio.
Dallas, Tex.
Kansas City, Mo.
Minneapolis, Minn.

All items on the cities of—Continued.
Newark, N. J.
New Y<jrk, N. Y.
Philadelphia, Pa.
St. L ouls, Mo.
Troy, N. Y.

Federal Reserve Banks—Continued.
New York, N. Y.
Philadelphia, Pa,
Richmond, Ya.
St. Louis, Mo.
San Francisco, Cal.

DELAWARE.

Seaford, First National Bank.

Delmar, First National Bank.

NEW JERSEY.

Allentown, Farmers National Bank.
Arlington, First National Bank.
Asbury Park, Asbury Park & Ocean
Grove Bank.
Asbury Park, Asbury Park Trust Co.
Asbury Park, Seacoast National Bank.
Atlantic City, Boardwalk National Bank.
Atlantic City, Marine Trust Co.
Bayonne, all items.
Bellevue, First National Bank.
Berlin, Berlin National Bank.
Bemardsyille, Bernardsville National
, Bank.
Blackwood, First National Bank.
Blairstown, First National Bank.
Bloomfield, Bloomfield National Bank.
Bloomfield, Bloomfield Trust Co.
Bloomfield, The Watsessing Bank.
Boonton, Boonton National Bank.
Bound Brook, Bound Brook National
Bank.
Bound Brook, First National Bank.
Caldwell, Caldwell National Bank.
Caldwell, Citizens’ National Bank.
’Camden, Camden National Bank,
Oamden, Camden Safe Deposit Trust
Co.
Camden, First National Bank.
Carlstadt, Carlstadt National Bank.
Olayton, Clayton National Bank.
Clifton, Clifton Trust Co.
-Clinton, Clinton National Bank.
Closter, Closter National Bank.
•Cranford, Cranford Trust Co,
Dunellen, First National Bank.
East Orange, East Orange Bank.
East Orange, Essex County Trust Co,
East Orange, People's Bank.




East Orange, Savings, Investment &
Trust Co.
Edgewater, First National Bank.
Edgewater, Northern New Jersey Trust
Co.
Elizabeth, Elizabethport Banking Co.
Elizabeth, Elizabeth Trust Co.
Elizabeth, National State Bank.
Elizabeth, Union County Trust Co.
Englewood, Citizens’ National Bank.
Englewood, Palisades Trust & Guaranty
Englishtown, First National Bank.
Flemington, Flemington National Bank.
Flemington, Hunterdon County National
Bank.
Fort Lee, First National Bank.
Freehold, National Freehold Banking Co.
Garfield, First National Bank.
Glen Ridge, Glen Ridge Trust Co.
Guttenberg, First National Bank.
Hackensack, Hackensack National Bank.
Hackensack, Hackensack Trust Co.
Hackensack, Peoples National Bank.
Hackettstown, Hackettstown National
Bank.
Hackettstown, Peoples National Bank.
Haddon Heights, Haddon Heights Na­
tional Bank.
Harrison, West Hudson County Trust Co.
Hoboken, all items.
Hope, First National Bank.
Jersey City, all items.
Lakewood, People’s National Bank.
Lyndhurst, First National Bank.
Manasquan, Manasquan National Bank,
Matawan, Farmers & Merchants National
Bank.

ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON,

Millville, Mechanics National Bank.
Montclair, Bank of Montclair.
Montclair, Essex National Bank.
Montclair, Essex Title Guaranty & Trust
Co.
Montclair, First National Bank.
Montclair, Montclair Trust Co.
Moorestown, Moorestown National Bank.
Morristown, American Trust Co.
Morristown, First National Bank.
Morristown, Morristown Trust Co.
Morristown, National Iron Bank.
Mount Holly, Union National Bank.
Netcong, Citizens National Bank.
Newark, all items.
New Brunswick, National Bank of New
Jersey.
New Brunswick, New Brunswick Trust
Co.
New Brunswick, Peoples National Bank.
Nutley, Bank of Nutley.
Orange, Orange National Bank.
Orange, Second National Bank.
Passaic, Hobart Trust Co.
Passaic, Merchants Bank.
Passaic, Passaic National Bank.
Passaic, Passaic Trust & Safe Deposit Co.
Passaic, Peoples Bank & Trust Co.
Paterson, Citizens Trust Co.
Paterson, First National Bank.
Paterson, German-American Trust Co.
Paterson, Hamilton Trust Co.
Paterson, Paterson National Bank.
Paterson, Paterson Safe Deposit & Trust
Co.
Paterson, Second National Bank.
Paterson, Silk City Safe Deposit & Trust
Co.
Pedricktown, First National Bank.
Perth Amboy, First National Bank.
Perth Amboy, Perth Amboy Trust Co.
Pitman, Pitman National Bank.
Plainfield, City National Bank.
Plainfield, First National Bank.
Plainfield, Plainfield Trust Co.
Plainfield, State Trust Co.
Pompton Lakes, First National Bank.
Port Norris, First National Bank.
Princeton, Princeton Bank.
Ridgefield Park, First National Bank.
Ridgewood, First National Bank.
Ridgewood, Ridgewood Trust Co.
Rockaway, First National Bank.
Roosevelt, First National Bank.
Roselle, First National Bank.
Rutherford, Bergen County Bank.
Rutherford, Rutherford National Bank.
Rutherford, Rutherford Trust Co.
Secaucus, First National Bank.
Somerville, First National Bank.
Somerville, Second National Bank.
South Orange, People’s Bank (branch of
East Orange).
South Orange, Savings Investment &
Trust Co.
South River, First National Bank.
South River, South River Trust Co.




Spring Lake, First National Bank.
Summit, First National Bank.
Summit, Summit Trust Co.
Swedesboro, Swedesboro National Bank*
Tenafly, First National Bank.
Toms Kiver, First National Bank.
Union, Town of, First National Bank.
Vineland, Tradesmen’s Bank.
Weehawken (see Union, town of).
Westfield, National Bank of Westfield.
Westfield, Peoples National Bank.
Westfield, Westfield Trust Co.
West Hoboken, Commonwealth Trust Co.
West Hoboken, National Bank of North
Hudson,
West New York, N, J. Title Guaranty &
Trust Co.
West Orange, First National Bank.
Westwood, First National Bank.
Woodbridge, First National Bank..
Williametown, First National Bank.
NEW YORK.

Albany, all items.
Amityville, Bank of Amityville.
Amityville, First National Bank.
Amsterdam, First National Bank*
Astoria, all items.
Babylon, Babylon National Bank.
Babylon, Bank of Babylon.
Bay Shore, First National Bank.
Bay Shore, South Side Bank.
Bayside, all items.
Bronxville, Gramatan National Bank,
Brooklyn, all items.
Buffalo, Bank of Buffalo.
Buffalo, Buffalo Trust Co.
Buffalo, Central National Bank.
Buffalo, Commonwealth Trust Co.
Buffalo, German-American Bank.
Buffalo, Manufacturers & Traders Na­
tional Bank.
Buffalo, Marine National Bank.
Buffalo, Market Bank.
Buffalo, Peoples Bank.
Buffalo, Third National Bank.
Cazenovia, Cazenovia National Bank.
College Point, all items.
Corona, all items,
Dundee, Dundee National Bank.
Elmhurst, all items.
Elmira, Merchants National Bank.
Elmira, Second National Bank,
Far Rockaway; all items.
Farmingdale, Bank of Farmingdale.
Farmingdale, First National Bank*
Fleischmanns, Citizens Bank of Griffins1
Comer.
Floral Parjc, Floral Park Bank.
Flushing, all items.
Freeport, First National Bank.
Freeport, Freeport Bank.
Geneva, First National Bank.
Glen Cove, Glen Cove Bank.
Glen Cove, Nassau Union Bank;
Glens Falls, First National Bankt

5©

ANNUAL REPORT OF FEDERAL RESERVE BANK OP BOSTON.

Glens Falls, National Bank of Glens Falls. Port Washington, Bank of North Hemp­
Granville, Washington County National
stead.
Bank.
Richmond Hill, all items.
•Great Neck, Bank of Great Neck.
Ridgewood, Ridgewood National Bank* *
Greenwich, First National Bank.
Rochester, Traders National Bank.
<Jroton. Mechanics Bank.
Rockaway Beach, all items.
Gouvemeur, First National Bank.
Rockville Center, Bank of Rockville
Hempstead, First National Bank.
Center.
Hempstead, Hempstead Bank.
Rockville Center, First National Bank.
Highland Falls, Pirst National Bank.
Roslyn, Bank of Hempstead Harbor.
Hoosick Falls, Peoples National Bank.
Rye, Rve National Bank.
Hudson Falls, Peoples National Bank.
Salem, Peoples National Bank.
Huntington, Bank of Huntington.
Saranac Lake, Adirondack National
Huntington, First National Bank.
Bank.
Ithaca, First National Bank.
Saratoga Springs, Adirondack Trust Co.
Ithaca, Tompkins County National Bank. Saratoga Springs, Citizens National Bank.
Jamaica, all items.
Schenectady, Citizens Trust Co.
Lake Placid, Lake Placid National Bank. Schenectady, Mohawk National Bank.
Larchmont, Larchmont National Bank.
Schenectady, Schenectady Trust Co.
Lawrence, Bank of Lawrence.
Schenectady, Union National Bank.
Lockport, National Exchange Bank.
Smithtown Branch, National Bank of
Smithtown Branch.
Lockport, Niagara County National Bank.
Long Island City, all items.
Southampton, First National Bank.
Lynbrook, Lynbrook National Bank.
Stapleton, all items.
Mamaroneck, First National Bank.
Stony Brook, Bank of Suffolk County.
Mariners Harbor, all items,
Syracuse, Central City Trust Co.
Mechanicsville, Manufacturers (National Syracuse, City Bank of Syracuse,
Bank.
< Syracuse, Commercial National Bank.
Syracuse. First National Bank.
Middleport, First National Bank.
Syracuse, Merchants National Bank.
Millbrook, Bank of Millbrook.
Syracuse, National Bank of Syracuse.
Mineola, First National Bank.
Syracuse, Salt Springs National Bank.
Mineola, Nassau County Trust Co.
Mount Vernon, First National-Bank.
Syracuse, Syracuse Trust Co.
Mount Vernon, Mount Vernon Trust Co.
Syracuse, Third National Bank.
Syracuse, Trust & Deposit Co. of Onon­
Newburgh, Highland National Bank.
New Brighton, all items.
daga.
New Rochelle, Hi guenot Trust Co.
Tottenville, all items.
Troy, all items. .
New Rochelle, National City Bank.
Tuckahoe, lirat National Bank.
New Rochelle, New Rochelle Trust Oo.
Westbury, Bank of Westbury.
New Rochelle, North Avenue Bank.
New York City, all items.
We3thampton Beach, Seaside Bank.
Niagara Falls, Niagara Falls Trust Go.
Whitestone, all items.
Niagara, Power City Bank.
White Plains, Central Bank of West­
chester County.
Northport, First National Bank.
Northport, Northport Tn M Co.
WhitePlains, Citizens Bank.
White Plains, County Trust Co.
Nyack, Nyack National Bank.
White Plains, First National Bank.
Nyack, Rockland County Trust Co.
Ogdensburg, National Bank of Ogdeas- Woodhaven, all items.
surg.
Yonkers, First National Bank.
Ossining, First National Bank.
Yonkerft, Westchester Trust (Jo.
Yoakers, Yonkerd National Bank*
Ossining, Ossining National Bank.
Oyster Bay, North Shore Bank.
PENNSYLVANIA.
Oyster Bay, Oyster Bay Bank.
Ozone Park, all items.
Allentown, Allentown National Bank.
Pearl River, First National Barak.
Peekskill, Westchester Countjy JJafcwnal Allentown, Merchants National Bank.
Allentown, Secoud National Baolc.
Bank.
Altoona, First National Bank.
Perry, First National Bank.
Altoona, Second National Bank.
Philmont, First National Bank.
Blue Ball, Blue Ball National Banfe.
Plattsburjj. First National Bank.
Bradford, Bradford National Bank*
Pleasantville, Mount Pleasant Batik.
Canton, Farmers National Bank.
Port Chester, Firat National Banik.
Canton, Fir^t National Bank.
Port Chester, Mutual TntflVGo. *?
Chester County.
Catasauqm, National Bank *f C*4*»
sauqua.
Port Jefferson, JiankoOf Bort JeScarsoa.
Port Jeffer«m, First National Bank.
ChamWdb*u& National Bdkk <rf Chambersbuxg.
Port Richmond* all item*.




ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON.

Clarks Summit, Abington National Bank.
Coatesville, National. Bank of Chester
Valley.
Collegeville, Collegeville National Bank.
Coplay, (Joplay National Bank.
Danville, Danville National Bank.
Danville, First National Bank.
Duncannon, Duncannon National Bank.
Duncannon, Peoples National Bank.
Dunmore, First National Bank.
East Berlin, East Berlin National Bank.
Fawn Grove, First National Bank.
Freeland, First National Bank.
Girardville, Firat National Bank.
Glenside, Glenside National Bank.
Hamburg, First Natiqnal Bank.
Hazleton, First National Bank.
Honey Brook, First National Bank.
Howard, First National Bank.
Huntingdon, First National Bank.
Lanc aster, Northern National Bank.
Lancaster, Peoples National Bank.
Landisville, First National Bank.
Lansdale, First National Bank.
Lehighton, First National Bank.
Lecnasters, Lemasters National Bank.
McConnellsburg, First National Bank.
Marietta, Exchange National Bank.
Millersville, Millersville National Bank.
Milton, Milton National Bank.
Mount Joy, First National Bank.
Mount Union, First National Bank.
Mountville, Mountville National Bank.
Nazareth, Nazareth National Bank.
Norristown, Peoples National Bauk.




31

North Wales, North Wales National Bank.
Philadelphia, all items.
Phoenixville, National Bank of Phoenixville.
Pottsville, Miners National Bank.
Pottsville, Pennsylvania National Bank.
Quakertown, Quakertown National Bank.
Reading, National Union Bank.
Ridgway, Elk County National Bank.
Scranton, First National Bank.
Scranton, Third National Bank.
Scranton, Traders National Bank.
Selins Grove, Farmers National Bank.
Shippensburg, Peoples National Bank.
Tamaqua, First National Bank.
Terre Hill, Terre Hill National Bank.
Tt'emont, Tremont National Bank.
Troy, Grange National Bank of Bradford
County.
Waynesboro, Citizens National Bank,
Waynesboro, Peoples National Bank*,
West Chester, First National Bank.
We3t Chester, National Bank of Chester
County.
Williamsport, First National Bank.
Williamsport, West Branch National1
Bank.
York, Central National Bank.
York, First National Bank.
York, York National Bank.
VIRGINIA.

Richmond, checks on all banks.
C. A.

o

R ug glek ,

Manager.





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102