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THIRD ANNUAL REPORT
OF THE

FEDERAL RESERVE BANK
OF SAN FRANCISCO
FOR THE YEAR ENDED DECEMBER 31, 1917




WASHINGTON
GOVERNMENT PRINTING OFFICE
1918

THIRD ANNUAL REPORT
OF THE

FEDERAL RESERVE BANK
OF SAN FRANCISCO
FOR THE YEAR ENDED DECEMBER 31, 1917




WASHINGTON
GOVERNMENT PRINTING OFFICE

1918




LETTER OF TRANSMITTAL.
F edera l R eserv e B a nk ,

San Francisco, Cal., January 15, 1918.
S ir : I have the honor to submit the following report concerning
the operations of the Federal Reserve Bank of San Francisco and
the Twelfth Federal Reserve District for the year ended Decem­
ber 31, 1917.
Yours, very truly,
J o h n P e r r in ,
Chairman and Federal Reserve Agent
Hon. W. P. G. H a r d in g ,
Governor, Federal Reserve Board,
Washington, D. C.




3




TABLE OF CONTENTS.
Page.

Financial results of operation................................................................................. 7-9
Earnings, expenses, and dividends................................................................
8
Activities during the year...................................................................................... 9-10
Discount operations.........................................................................................
9
Acceptance business........................................................................................ 10
10
United States bond operations............................................................. ..........
Municipal warrants..........................................................................................
10
Reserve position............................................................................................... 10
The Federal Reserve Bank and member banks.................................................... 11-15
Movement of membership within the district...............................................
11
State banks and trust companies....................................................................
11
Accommodation of member banks through discounts................................... 13
Deposits from member banks............1............................................................ 13
Periodic reports regarding condition of member banks................................ 13
Bank failures within the district....................................................................
13
Overdue paper.................................................................................................
14
Branches...........................................................................................................
14
The Federal Reserve Bank and the public........................................................... 15-16
Open-market transactions................................................................................ 15
16
Effect of discount rate policy of the bank upon general market rates.........
Publicity work of the bank and the attitude of the public toward the Fed­
eral Reserve system.....................................................................................
16
The Federal Reserve Bank and the Government................................................. 16-25
Relation to the comptroller’s office................................................................
16
Government deposits...................................................................................
17
Relation to the United States Treasury.........................................................
17
Liberty loan campaigns................................................................................... 17-25
The Federal Reserve Bank and note issues........................................................... 25-27
General policy..................................................................................................
25
Denomination of notes issued.......................................................................... 27
Interdistrict movement of notes...................................................................... 27
Internal management of the bank......................... ................................................28-30
Function and work of directors, executive committee, and staff................
28
Office and vault facilities; bank premises......................................................
30
Check collections....................................................................................................30-32
General business conditions................................................................................... 32-34
LIST OF TABLES.

1. Classification by maturities of paper rediscounted..........................................
2. Reserve position at the end of each month during 1917..............................
3. Certificates of indebtedness subscribed............................................................
4. Officers and directors of Federal Reserve Bank...............................................
5. Comparison of deposits and of loans and discounts of national banks with
those of a year ago..........................................................................................
6. Comparisons of loans, investments, and deposits since June 30, 1914............
7. Federal Reserve notes issued and redeemed by Federal Reserve Agent dur­
ing 1917...........................................................................................................
e x h ib it s .

A. Chart of Federal Reseve notes outstanding during 1917.................................
B. Bank clearings of principal cities.....................................................................
0. Banking power of the district...........................................................................



5

34
35
35
36
36
37
38
39
40
40




THIRD ANNUAL REPORT OF THE FEDERAL
RESERVE BANK OF SAN FRANCISCO.
F in a n c ia l R esu lts

of

O pera tio n s ,

COMPARATIVE STATEMENT.

The large growth of the Federal Reserve Bank of San Francisco
during the past two years is shown in the following comparative
statement:
Dec. 31,1917. Dec. 31,1916. Dec. 31,1915.

RESOURCES.
Total gold reserve.........................................................................
Legal tender notes........................................................................

$94,018,470
408,823

$35,815,250
78,678

$20,380,960
4,778

Total reserves......................................................................

94,427,293

35,893,928

20,385,738

Bills discounted, members...........................................................
Bills bought in open market........................................................

25,780,201
17,082,456

250,968
12,462,266

467,162
683,840

Total bills on hand.............................................................

42,862,657

12,713,234

1,151,002

United States Government long-term securities.........................
United States Government short-term securities........................
Municipal warrants.......................................................................

2.455.000
1.500.000

2,633,750
500,000
737,376

1,000,475

Total earning assets............................................................

46,817,657

16,584,360

2,496,455

Due from other Federal reserve banks, net.................................
Uncollected items.........................................................................

5,908.934
12,809,375

4,294,110
3,846,266

3,924,326
213,708

8,140,376

4,138,034

344,978

Total deductions from gross deposits.................................

18,718,309

Real estate....................................................................................
All other resources
........................................................................

120,000
463,807

Total resources....................................................................

160,547,066

60,618,664

27,112,698

Capital paid in................................................................... .........
Government deposits...................................................................
Due members’ reserve account.....................................................
Due nonmember banks, clearing account...................................
Collection items.............................................................................

4,162,450
12,353,939
63,779,910
2,620,985
9,885,477

$3,929,300
3,643,138
37,852,376

$3,941,800
427,321
17,509,725

2,030,467

21,832

Total gross deposits.............................................................

88,640,311

43,525,981

17,958,878

Feredal reserve notes in actual circulation...................................
All other liabilities........................................................................

67,744,305

13,098,115
65,268

5,212,020

Total liabilities....................................................................

160,547,066

60,618,664

27,112,698

LIABILITIES.

*

92,471

It will be observed that the amounts due to member banks have
approximately doubled in each of the past two years, while the gold
reserve has increased in still greater proportion. The development




7

8 ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.
of rediscounting for member banks is shown in the growth from an
insignificant total at the beginning of the year to $25,780,201 at the
close. The total discounted during the year 1916 was $1,973,355,
which compares with $102,981,205 during the year 1917. During the
first five months of 1917 the discounts aggregated approximately
$1,500,000, while in the month of June alone they exceeded $9,000,000.
This large increase was, of course, occasioned by the requirements
growing out of payments in connection with the first Liberty loan.
The discounts during the month of November aggregated $26,964,721.
the first important payment on the second Liberty loan falling due
ni that month.
EARN ING S, EXPENSES, A N D DIVIDENDS.

The important increase in earnings is shown in the following
comparative statement:
1917

1916

EARNINGS.
Bills discounted for members......................
Acceptances bought......................................
United States securities..............................
Municipal warrants......................................
Profits realized on United States securities.
Penalties for deficient reserve......................
Transfers bought and sold, net....................
Service charges..............................................
Sundry profits..............................................

$292,981.91
308,
147, 355.24
11, 934.70
11, 250.00
18, 221.97
64, 363.55
31, 047.40
52.08

Total...................................................

885,802.45

316,450.10

Current expense...........................................
Cost of Federal reserve notes.......................
Total cost furniture and fixtures.................

267,541.28
43,074.97
28,142.34

187,902.73
56,804.69
12,589.59

Total...................................................

338,758.59

257,297.01

Net earnings.......................................

547,043.86

59,153.09

$20,682.97
133,331.07
67,529.54
49,772.61
14,487.50

**i8*266‘66
7,660.26
4,786.15

EXPENSE.

Balance profit and loss, Dec. 31, 1916............................. .................
Net earnings______________________________________________
Total________________________________________________
June 30, 1917, dividend No. 3____ ________________ $108,356.51
Dec. 31, 1917, dividend No. 4_____________________ 286,418. 85
Contingent reserve______________________________ 85,000.00
Depreciation ____________________ _____________ 6,000.00
----------------Undivided profits--------------------------------------------------------

$15,416.87
547,048. 86
562,460. 78

485,775.37
76,685.37

The two dividends paid during the year cover the cumulative 6
per cent dividend accrued from March 31, 1915, to December 31,
1916. Dividends remaining unpaid are for the year January 1 to
December 31, 1917, amounting to approximately $240,000.




ANNUAL REPORT OP FEDERAL RESERVE BANK OF SAN FRANCISCO.

Net earnings, by months, have been as follows:

January------------- ______
February__ ___________
March _______
A pril_____ :____ ______
May__________ . _ _
June __ __________
July--------- ----- ______

$36,275.44
17,394.27
5,321.44
26,199. 79
40,728.95
31,495. 66
37,743.40

August -----------September-----------October_________
November________ _____
December_______
Total _____ _____

A ctivities D u r in g

the

9

$501,933. 47
49,691.34
61,671.62
83,274. 72
106,313.76
547,043. 86

Y ear .

DISCOUNT OPERATIONS.

Discounts, which during the year 1916 aggregated $1,973,355.
expanded to a total of $102,981,205 during the year 1917 for 156 mem­
ber banks out of a total of 553.
DISCOUNT RATES.

The discount rates in force January 1, 1917, were slightly modi­
fied on March 1, those for maturities of 60 days or less being ad­
vanced one-half per cent and the rate for agricultural and live stock
paper having maturities beyond 90 days decreased one-half per cent.
On April 2 the rate for maturities of 31 to 60 days was decreased
one-half per cent. On December 10 the rates for maturities of 60
days and less were again advanced one-half per cent. As the year
closes rates range from 4 to 5J per cent for various maturities, ex­
cept 3£ per cent for member-banks’ promissory notes maturing in 15
days or less, secured by Government bonds, and 2| to for bankers’
acceptances.
As member banks have become familiar with rediscounting they
have manifested a steadily growing tendency to offer shorter maturi­
ties, and have applied for considerable advances upon their own notes
maturing within 15 days or less, collateraled by eligible paper, Lib­
erty bonds, or Treasury certificates of indebtedness.
TliADE ACCEPTANCES.

Tlierc lias been increasing interest in trade acceptances, and their
use lias gained considerable headway in the Pacific Northwest, hav­
ing been adopted by the grain dealers and millers of the Northwest
and by the West Coast Lumbermen’s Association. It appears that
chambers of commerce and associations of merchants and manufac­
turers and credit men are more concerned than bankers to secure
their adoption. They have every good argument in their favor as
against the unavailable open-ledger account, being far surer of
prompt payment and providing admirable paper for discount.
54010—18----- 2




10

ANNUAL REPORT OP FEDERAL RESERVE BANK OF SAN FRANCISCO.
ACCEPTANCE BU SIN ESS.

During the year $58,(>40,(>05 acceptances covering foreign ship­
ments have been purchased, comparing with $32,775,078 during the
previous year. These have been chiefly those of bankers and ac­
ceptance houses, a smaller amount being those bearing bank indorse­
ment but drawn on strong mercantile or manufacturing concerns to
cover goods imported. A considerable part has been those of Pacificcoast banks for imports from the Orient. However, the embargo
against the export of gold, effective September 7, 1917, has served
to reduce greatly the volume of bills coming from the Orient. This
country’s exports of commodities to the Orient being less than its
imports, there was no method of settling balances except by exports
of gold. When the embargo stopped these, imports of commodities
were curtailed, because payments to a certain extent could only take
the form of credits which could not be withdrawn or used.
In San Francisco the same actual rates as in New York have been
maintained for acceptances.
An amendment to the Federal Reserve Act approved September 7,
1916, provided for domestic acceptances. It was thought that a large
volume of such bills would develop. Thus far, however, this has
not proved true. The total volume of domestic acceptances bought
by this bank during the period from September 7, 1916, to Decem­
ber 31,1917, has been $6,809,694.
Member bank acceptances have been purchased at rates slightly
lower than those of nonmember banks.
U N ITED STATES BOND OPERATIONS.

In January $1,000,000 United States 3 per cent conversion bonds
were sold at a premium of $11,250. This was the only transaction
in obligations of the United States aside from Liberty loan bonds
and Treasury certificates of indebtedness.
M U N IC IP A L W ARRAN TS.

The total purchases of municipal warrants during the year, almost
wholly in January, aggregated $785,394.21, comparing with $5,962,621.14 purchased during the year 1916. The discontinuance of such
purchases was with a view to conserving the banks’ resources for ac­
commodation of member banks.
RESERVE POSITION.

Table 2 shows the reserve position of the bank at the end of each
month during the year.




ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.
T h e F ederal R eserve B a n k

and

11

M em ber B a n k s .

M OVEM ENT OF M E M B E R SH IP W IT H IN T H E DISTRICT.

The number of national banks in this district increased during the
year from 522 to 536. This increase consisted of 12 newly organized
and 11 conversions from State banks, partially offset by the volun­
tary liquidation of 9. Of those liquidating, all but 4 were absorbed
by other national banks.
STATE B A N K S A N D

TRU ST

COM PAN IES.

The deposits of national banks in this district are approximately
$1,000,000,000 and those of State banks $1,200,000,000. National
banks presumably have a larger proportion of demand deposits, so
that as members of the Federal Reserve system their required re­
serve with Federal Reserve Bank would be a larger percentage of
their deposits. Therefore if all State banks were members it is
probable that the deposits of Federal Reserve Bank would be ap­
proximately doubled and its strength likewise doubled. The sta­
bility of the financial structure, of which the State banks constitute
more than half, unavoidably depends upon the sustaining power
of the Federal Reserve system. In the present situation, with State
banks outside of Federal Reserve system, the base beneath this
huge fabric is one-half of what it might be and should be, especially
in view of possible financial strains ahead.
In this district there are 1,321 State banks and trust companies,
including 152 branches, of which 685 have capital and surplus such
as to render them eligible for membership. In addition there are
223 which are desirable as members but have insufficient capital
and surplus to meet requirements of membership. Thus far the
following have become members:
Name.
&

Coffman Dobson Bank & Trust Co., Chehalis, Wash...................
Spokane Eastern Trust Co., Spokane, Wash............................
Live Stock State Bank, North Portland, Oreg.............................
Bank of Rosalia, Rosalia, Wash.....................................................
First Savings & Trust Bank of Whitman Count}’’, Colfax, Wash
Genesee Exchange Bank. Genesee, Idaho.....................................
Dexter Horton Trust & Savings Bank, Seattle, W ash................
Metropolitan Bank, Seattle, Wash................................................
Ladd & Tilton Bank, Portland, Oreg...........................................
First State Bank, La Crosse, Wash................................................
Bank of Kimberly, Kimberly, Idaho............................................
State Bank of Wilbur, Wilbur, Wash...........................................
Northwestern State Bank, South Bellingham, Wash...................
Butler Banking Co., Hood River, Oreg.........................................
Farmers State Bank, Reardon, Wash...........................................
Lumberman's Bank, Hoquiam, Wash..........................................
Fidelity Trust Co., Tacoma, Wash................................................
Total......................................................................................




Capital
and
surplus.
$259,000
1,203,000
110,000

30.000
65.000
37.500
500.000
300.000

2, 000,000
68.000

48,250
55,000
145.000
125.000
32.500
112,500
800.000

Resources.

$1,800,000
11.259.000

688,000

334.000
786.000
53 >,000
7.907.000
3.081.000
21.669.000
570.000
292.000
815.000
1.474.000
915.000
592.000
610.000
6.634.000

5,876,750 I 60,852,000

12 ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.
In addition to these there have been filed applications of eight
banks having $2,626,500 capital and surplus and $18,641,000 re­
sources.
In the States of Washington, Oregon, and Idaho quite active and
definite inclination for membership has been manifested. The State
bank superintendents of Oregon and Idaho, by circular letters to
banks under their jurisdiction, have urged all eligible banks to join
the Federal Reserve system. It is probable that a good many banks
in these three States would quickly make application for member­
ship if it were possible for the officers of Federal Reserve Bank to
personally point the way and explain the vital need of the country
that each eligible bank add its quota of strength. The advantages
of membership to the banks themselves are so great and so obvious
to those understanding the workings of the system that it seems no
persuasion should be required.
The provisions of the California bank act present some obstacles
to membership. A State bank or trust company in becoming a
member bank would not only be required to carry with the Federal
Reserve Bank the reserve deposit such as required of national banks,
but would also be required to carry reserve in vault not required of
national banks, amounting in the case of city banks to 9 per cent
of demand deposits. In addition to this, savings departments are
permitted to invest in commercial, rediscountable paper to an amount
equal to only 5 per cent of savings deposits.
There is earnest desire on the part of the State banks, especially
of Los Angeles and San Francisco, to secure a modification of the
State bank act so as to permit membership without disadvantage, a
modification such as has been made in the Pennsylvania law, which
in the matter of reserves provides only that State banks becoming:
members of the Federal Reserve system shall carry reserves as re­
quired by the Federal Reserve Act. The banks of Los Angeles, dur­
ing the fall, took the initiative in having a conference with San
Francisco and Oakland banks, seeking concurrent action of all in
applying for membership. Banks having deposits approximating a
total of $500,000,000 were represented. A committee was appointed
which visited Washington and conferred with the Federal Reserve
Board with regard to possible amendments to the Federal Reserve
Act. While these banks have taken no definite steps as yet toward
membership, their interest presumably has not diminished.
From a patriotic viewpoint the obligation resting upon this great
group of banks is so important that there seems reason to hope for
favorable action.




ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.
ACCOMMODATION

OF

M EM BER

BANKS

T H R OU GH

13

DISCOUNTS.

Rediscounts, exclusive of member banks’ collateral notes, by months
for the year 1917 have been as follows:
February.
March
April ___
M ay -----

$123,358
106,785
151,522
698,8S8
450,599
9,058,095
4,804,568

August------------------------September ____________
October_______________
November__ ___________
December_____________
T o tal___________

Classification by maturities of paper rediscounted is shown in
Table 1.
DEPOSITS FROM M EM BER B A N K S.

On January 1, 1917, deposits from member banks aggregated
$35,656,826, and on December 31 had grown to $63,779,910, while
deposits from nonmember banks for clearing purposes, which were
nonexistent at the beginning of the year, amounted to $2,620,985 on
December 31.
Deficiencies in required reserve deposits during 11 months aver­
aged $215,000, which were taxed at 6J per cent per annum, viz, a
rate 2 per cent above the 90 days’ discount rate. The payments on
this account during this period have aggregated $13,966.38. It is
obviously more advantageous for member banks to obtain funds by
rediscounting, which is possible at a rate as low as 3-J per cent. To
advance funds to member banks by rediscounting likewise impairs
the resources of a Federal Reserve Bank less than withdrawal of an
equal amount from its reserves.
PERIODIC REPORTS REGARDING CONDITION OF M EM BER B AN KS— E X A M IN A ­
TIO N S OF M EM BER B A N K S .

Weekly reports are furnished by member banks showing their
daily totals of demand and time deposits and required reserve depos­
its with Federal Reserve Bank. Those having net deposits less than
$1,000,000 give only the figures of each Friday. No occasion has
arisen for any special examination of member banks during the year.
B A N K FAILU RES W IT H I N T H E DISTRICT.

In this district no national bank has failed since the establish­
ment of the Federal Reserve system. Failures of State banks during
the year have been as follows: In Arizona, Commercial Bank of
Parker; in Washington, Broadway State Bank, Northern Bank &
Trust Co., German-American Mercantile Bank, and Fremont State
Bank, all of Seattle.



14

ANNUAL BEPOET OF FEDERAL RESERVE BANK OF SAN FRANCISCO.
OVERDUE PAPER.

Some clays before maturity this bank forwards rediscounted paper
for collection, usually to the bank from which received, charging to
that bank’s account on the day of maturity. There has been no in­
stance of overdue paper and no loss through these transactions.
BRANCH ES.

From the time of the establishment of the Federal Reserve Bank
of San Francisco, bankers and business men of the Pacific Northwest
urged the location of a branch in that region, the principal cities of
which are two or more days by mail from San Francisco. It was
deemed wise, however, to give first attention to the development and
organization of the head office and to defer establishing branches
until after the several successive payments on account of capital
and reserve deposits had been made.
On April 3, 1917, a conference was called in San Francisco to
take the matter under definite consideration, those present being the
Hon. A. C. Miller, of the Federal Eeserve Board, representatives
of the clearing-house banks of Portland, Seattle, and Spokane. The
determination reached was that, instead of a single branch serving
the Pacific Northwest, it was desirable to establish, at least tenta­
tively, three branches, one at each of the points named. It was
recognized that whenever experience proved that the service re­
quired at any point was of too little importance to justify the ex­
pense of operation, a branch could readily be discontinued or modi­
fied in character.
Spokane bankers urged that the first branch be established there,
in. view of the impending need for rediscounting in connection with
handling the maturing wheat crop, and, as evidence of cooperation
of the clearing-house banks, proposed that, if the branch were estab­
lished, (a) the clearing-house banks would employ the branch to
conduct the clearing-house examinations, paying as compensation
an amount equal to the previous cost of conducting such examina­
tions, and (b) all clearing-house State banks and trust companies
would maintain reserve deposits with the branch in the same percent­
ages as if they were member banks, and subject to the same penalties
for deficiencies. The Spokane branch was accordingly established,
opening for business on July 2G, 1917, its territory being eastern
Washington and northern Idaho.
Upon the same basis of cooperation of clearing-house banks, the
Seattle branch was established and opened for business on Septem­
ber 19,1917, with western Washington as its territory, and the Port­
land branch on October 1, 1917, with the State of Oregon as its
territory.



ANNUAL* REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

15

In importance of operations Seattle leads, with Portland and
Spokane following in the order named. The great shipbuilding,
lumbering, and import and export operations now centering at Seat­
tle, largely expanded by war activities, have occasioned an excep­
tional volume of transactions there. Camp Lewis, near Tacoma, with
40,000 or more soldiers, adds to Seattle’s pay-roll requirements. Up
to December 13, 1917, the total amount of Federal reserve notes
shipped to the respective branches has been as follows: Seattle,
$8,175,000; Portland, $5,425,000; Spokane, $2,G90,000.
While it is anticipated that these branches will show reasonable
earnings, it is recognized that their value can not be measured by
earnings but by the service they render. It is beyond question that
the important territory situated in the Pacific Northwest, more re­
mote from a Federal reserve bank than is any other section of the
country, is tremendously benefited by these branches. The financial
status of the respective branches on November 30 was as follows*
Branch.

Capital
paid in.

Members.

O
Portland................... S national banks, 3 State banks.................................
Seattle....................... 31 national banks, 2 State banks................................
Spokane.................... 59 national banks, 3 State banks.................................

$448,000.00
291.000.00
269.000. C
O

Deposits,
excluding
United States
deposits.
$8,292,272.46
8,197,289.32
5,549,611.96

While capital paid in by the member banks attached to each branch
is shown as a separate amount, this is only as a matter of bookkeeping,
since the operations of a branch are in nowise limited or determined
by the amount of capital. In other words, the accommodation and
service which a branch extends are no more limited than if extended
by a head office without branches.
The bankers of Salt Lake City have expressed a strong desire to
have a branch located there, but have not as yet arranged for the
same measure of cooperation by both State and national banks as
was done at Spokane, Seattle, and Portland. Salt Lake City and
tributary territory would doubtless find a branch of advantage, since
the city is located approximately 24 hours from the nearest larger
city. Adequate supplies of gold, Federal Reserve notes, and credit,
immediately at hand, would obviously give security and stability not
otherwise possible.
T h e F ederal R eserve B a n k

and the

P u bl ic .

O P E N -M A R K E T OPERATIONS.

In the open market a total of $52,532,108 bankers’ acceptances
have been purchased during the year and $15,733,940 bank-indorsed
foreign trade acceptances. Rates have been within the limits of 2 to
4J per cent, authorized by the Federal Reserve Board, being highest



16

ANNUAL BEPOBT OP FEDERAL BESEBVE BANK OF SAN FRANCISCO.

during the latter part of the year, though not reaching the higher
limit. The total held at one time has fluctuated between $3,924,381.66
on October 31 and $23,029,460 on December 13.
EFFECT OF DISCOU N T-RATE PO LIC Y UPON GENERAL M A R K E T RATES.

During the previous year the discount operations of the Federal Re­
serve Bank had little perceptible influence upon general market rates,
but during the current year, particularly the latter half, the discount
operations have been of such increased volume, growing out of neces­
sities connected with financing Government loans and crop movements,
that the influence has been important in adding steadiness. Federal
Reserve Bank’s discount rates have remained substantially unchanged
since January, 1915, there having been only fractional advances for
shorter maturities. General market rates have shown a somewhat
firmer tendency, but the constantly available privilege of rediscount­
ing at exceptionally moderate rates has both enabled member banks
to meet all their customers’ legitimate requirements and has main­
tained an unexampled stability of rates. In many instances and to a
degree far beyond previous experience the Federal Reserve Bank has
been called upon to extend unusual accommodations in carrying mem­
ber banks over peak loads.
PU B LIC ITY W ORK OF TH E B A N K AND ATTITUDE OF T H E PUBLIC TOWARD
T H E SYSTEM .

The absorbing attention demanded for the rapidly expanding
volume and complexity of current operations has rendered it im­
practicable to undertake any publicity work during the year. The
fact that the Federal Reserve Bank as fiscal agent of the Government
has been the center from which activities have radiated in connection
with the two great Liberty loan campaigns has, of course, brought it
before the public in an extraordinary way.
The public generally and gratefully recognizes the vital service
which the Federal Reserve System has rendered during the year as a
\rast sustaining power under conditions of unprecedented financial
strain. The comment is frequent that without the Federal Reserve
System financial convulsion could not have been avoided.
T he

F ederal

R eserve

B ank

and

the

G overnm ent.

RELATION TO T H E COMPTROLLER’ S OFFICE.

Except in connection with Federal reserve notes, this bank has
had little direct dealings with the office of the Comptroller of the
Currency. With Mr. Claud Gatch, however, the chief national
bank examiner of this district, frequent communication has been had
and not infrequently also with the examiners under his direction.



ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

17

A spirit of most cordial cooperation and helpfulness has been inva­
riably shown. Copies of considerable parts of the reports of ex­
aminations of national banks have been filed with the Federal reserve
agent and fuller information given upon request.
GOVERNM ENT DEPOSITS.

On the first day of each month of the past year Government de­
posits with this bank have been as follows, an occasional large sum
being an unexpended balance derived from payments for Liberty
bonds:

January____________
February___________
March______________
April.. ... ................
May________________
June___ ___________

$3,679,633.15
2, 776,722. 84
1, 715,612. 03
3.391,645.88
12,258,442.10
6,836,449.51

July________________ $1, 779,172.07
August-------------------- 818, 570. 23
September__________ 2,826,401.21
October_____________ 5,022,190. 29
November....................... 18,100,899. 98
December............-......- _ 42, 927, 205. 80

RELATION TO T H E UNITED STATES TREASURY.

Particularly in its service as fiscal agent of the Government, this
hank has had important relations with the Treasury Department.
In San Francisco all Government funds hitherto deposited in national
banks, except court and post-office deposits, are now deposited with
the Federal Reserve Bank. A large volume of warrants drawn upon
the Treasurer of the United States are presented for payment at this
bank and its branches, particularly Seattle. During the month
October 16 to November 15 these items averaged 1,270 per day,
amounting to $3,554,297, or more than double the amount at any
other Federal reserve bank except at New York, where the average
daily amount was $6,610,037.
WAR LOANS.

The supreme service as fiscal agent, however, and one which has
severely tested the capacity of the management of the Federal Reserve
Bank, has been in connection with the sale and distribution of the
Government’s war securities in this district.
FIRST LIBERTY LOAN .

On May 15,1917, the preliminary organization for the first Liberty
loan was effected at a meeting of San Francisco bank presidents and
bond dealers. called by the chairman of the board of the Federal
Reserve Bank, who suggested that the governor of the Federal Re­
serve Bank be made chairman of the general executive committee
to centralize the direction in the Federal Reserve Bank. A general
executive committee was chosen, having supervision of the entire
twelfth Federal Reserve district.
54010—18----- 3




18

ANNUAL REPORT OP FEDERAL RESERVE BANK OF SAN FRANCISCO.

The State was used as the larger basis of organization, and a State
chairman, generally a banker of some standing, was appointed by
the general chairman in each of the seven States of the district. This
State chairman in turn suggested the nomination of his local com­
mittee chairmen, who were then appointed by the executive com­
mittee at San Francisco. A special representative, generally a mem­
ber of some local bond house, was assigned to cooperate with each
State chairman, to put into effect the definite plan of campaign of
working through the banks to reach their depositors, and in general
to aid in formulating an effective organization.
The general distribution committee had responsibility for the
campaign initiated by it for appealing through banks to their de­
positors, and for following up by direct methods the work of obtain­
ing subscriptions through the agency of appointed salesmen, etc.
Besides supervising all committees in the district the general organi­
zation committee managed the sales in San Francisco.
The general publicity committee handled copy for newspaper pub­
licity, both in San Francisco and throughout the district; arranged
the distribution of posters and campaign literature; arranged ad­
dresses before conventions, organizations, etc.; encouraged subscrip­
tions of employees; arranged parades, mass meetings, etc.
Wherever practicable, local committees were modeled after those
in San Francisco. The finance committee had jurisdiction of allow­
ances for expense of committees, of campaign budget, and of tabu­
lation of quotas. The executive manager was the guiding spirit in
the campaign, and most of the questions of policy were decided by
him. He was continually in direct communication with the seven
State chairmen and all local committees, and sent out to committees
a daily bulletin covering department rulings and general news items
of interest to the workers.
There was no precedent by which to determine the amount of
energy and extent of organization required to market an issue of
$2,000,000,000 bonds, so there was great uncertainty at all stages.
The period was brief in which to create an organization and secure
subscriptions for the allotted quota; but an inspiring readiness
to help was generally manifested, both in subscribing and in working
to secure subscriptions. Apathy of farmers as a class in subscribing
for the bonds was, however, quite generally reported and lack of
cooperation with the Liberty loan committees. In a hastily organ­
ized campaign it was inevitable that there should be duplication of
effort and occasional frictions, but total subscriptions of $175,623,900,
with a so-called minimum allotment of $140,000,000 and maximum
of $175,000,000, prove the essential effectiveness of the work done
in the first campaign. The campaign closed on June 15—one month
after the first meeting.



ANNUAL REPORT OP FEDERAL RESERVE BANK OF SAN FRANCISCO.

19

The accounting work in connection with the first Liberty loan
was conducted in the restricted quarters occupied by the Federal Re­
serve Bank. The lack of space enhanced extraordinary difficulties
incident to handling a vast volume of unaccustomed transactions
by a hastily gathered and wholly inadequate force, numbering a
maximum of 66 individuals. It was inevitable that some confusion
and consequent delays should result.
SECOND LIBERTY LOAN.

After the first Liberty loan was closed, much consideration was
given to improving the organization for the second. In accordance
with the request of the Secretary of the Treasury to maintain the
established organization, the same general executive board was con­
tinued, with some additions, James K. Lynch serving as ex officio
chairman, he having meanwhile been elected governor of the Federal
Reserve Bank to succeed A. C. Kains, resigned.
A general advisory council of 104 members was chosen from the
district at large and appointed by the Secretary of the Treasury.
This council included the governor of each State, chairmen of the
State councils of defense, and other prominent men. As in the first
campaign, each State was held responsible for the success of the
campaign within its own confines, each State being divided into
several auxiliary sections, which in turn were subdivided into local
divisions. Special representatives were again sent out to perfect
State and local organization and to cooperate with the State
chairman.
The first meeting of the general executive committee was held 011
August 20, and the campaign closed October 27. More time, more
careful preparation, and valuable experience gained in the first cam­
paign all aided in the second. In the latter there was superior or­
ganization, although the formulated plans were not rigidly followed.
In the first campaign there was perhaps greater patriotic enthusiasm,
with more of grim determination in the second. So vast an under­
taking, carried to splendid success through volunteer effort, evidences
a fine patriotism and remarkable spirit of cooperation. The total
subscriptions were $292,889,300.
To avoid the accounting difficulties experienced in the first loan,
the fiscal agent department of the Federal Reserve Bank was estab­
lished apart from the bank in ground-floor rooms of the Mills Build­
ing some three blocks distant. Later it became necessary to occupy
space on the third floor in order to accommodate the staff, which
grew to 130 members and still continues approximately at this
number, new work having been added in connection with war sav­
ings certificates and thrift stamps.




20

ANNUAL* REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

This force, laboring under handicaps of hasty gathering and lack
of coordination, has shown a spirit of devotion born of real patri­
otism. The same was true in equal degree of the accounting force in
the first loan.
Even with the greatly larger force and fuller experience in the
second campaign it has not been possible to avoid confusion, delay,
and complaint. There has been no lack of industry but, because
trained men have not been available, it has been increasingly neces­
sary to employ many not trained for difficult work.
Subscriptions and allotments to the two loans were as follows:
First Liberty loan.

Second Liberty loan.

Total subscriptions____ $175,623,900 Total number of sub­
scriptions __________
582,162
Allotments:
To individuals-----1,559,900
By individuals____
$349,000
To corporations___ 2,962,000
By corporations___
2, 532,900
By member banks_ 164,337, 250
To member banka— 74,499,700
To n o n m e m b e r
By n o n m e m b e r
banks__________ 54,672,400
banks__________ 125,670,150
Total___________ 133,694,000
Total___________ 292,889,300
Allotted________. ____ 261,138,000
Second Liberty loan of 1917.
Amounts subscribed.

Number o f subscrib­
ers in each group.

$50____________ ________ 274,004
________177,162
$150 to $500____ ________ 89,817
$550 to $1,000_____________ 27,217
$1,050 to $5,000____________ 9, 679
$5 050 to $10,000____________ 2,193
$10,050 to $25,000___________
990
$100____________

Amounts subscribed.

Number o f subscribers in each group.

$25,050 to $50,000___________
603
$50,050 to $100,000__________
299
$100,050 to $250,000_________
131
$250,050 to $500,000_________
38
$1,000,000 and over_________
29
Total_______________ 582,162

it will be noted that fewer than throe in every hundred subscribers
bought amounts over $1,000. .
In addition to the foregoing, there have been received by Federal
Reserve Bank 2,163 subscriptions for various issues of Treasury
certificates, as follows, bearing the dates indicated:
Mnr. 31, 19171__________
Apr. 25, 1917 ........ .
May 10, 1917___ ______
May 25, 1917_________
June 8, 1917____ ____
Auj?. 9, 1917 ________
Aug. 28, 1917___________




$2,500, 000
20, 000, 000
7, 500,000
4,200, 000
5,200,000
13, 000,000
7,520,000

Sept. 17, 19 17________
Sept. 26, 1917 ___
Oct. 18, 1917__________
Oct. 24, 1917___ _____
Nov. 30, 1917_____ _
Total - -

1 Subscribed by Federal Reserve Bank.

__

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

21

Classification by denominations of subscriptions is shown in
Table 3.
The Federal Reserve Bank owns United States securities as
follows:

2 per cent consols___________________________________________ $2,429,000
3 per cent 1-year Treasury notes______________________________ 1, 500,000
3£ per cent Liberty bonds_____________________________________
26,000
Total.
3,95», 000

No Treasury certificates are now owned, although the Federal
Reserve Bank has at times owned considerable amounts, the maxi­
mum being $3,793,000 on October 6, and has in every instance re­
purchased from member banks whenever requested.
Member banks’ promissory notes collateraled by United States
bonds and Treasury certificates have been discounted as follows:
July____________________ $400,000 October________________ $4,562,000
August_________________ 1,261,000 November--------------------- 7,059,500
September______________ 1,494, 400 December______________ 5,127,925

On December 31,1917, the total held of such loans was $1,017,688.
The number of new employees engaged, salaries paid, and expenses
incurred in the conduct of operations connected with Liberty loans,
Treasury certificates, war savings certificates, and thrift stamps were
as follows:
Number of
employees.
First loan—May 15-Dec. 31.....................................................
Second loan—Sept. 1-Dec. 31..................................................

66
130

Salaries.
$54,013.86
75,723.62

Expenses.
$152,036.05
222,607.05

A partial account of these expenses, amounting to $128,614.76, has
been rendered to the Secretary of the Treasury and reimbursement
received. A further account is in preparation.
It was an unprecedented thing to endeavor to sell bonds in amounts
so large in proportion to banking resources, a minimum for this dis­
trict of $140,000,000 in the first loan and a minimum of $210,000,000
in the second. There were varying opinions as to the effect of suc­
cessful flotations upon the banking situation and upon industries
and commerce. By some it was believed that the district would be
drained of its circulating medium—its actual money. By others,
who saw the operation more clearly as a series of credit transactions,
it was feared that those banks extending credit to customers to buy
Liberty bonds would have their loanable funds so absorbed that they
would be unable to meet the necessary requirements of commerce.




22 ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.
Many feared that, for investment in Liberty bonds, particularly if
bearing a rate of 4 per cent or more, savings deposits might be with­
drawn to the point of embarrassment of savings banks.
The published reports of banks give a fair indication of the actual
results. In some States such reports of State banks are not compiled
in sufficiently detailed form to make the desired comparisons possible;
consequently only the trend can be deduced from reports of part of
the banks instead of a complete exposition tabulated from the reports
of all.
DATES OF IM P O R T A N T P A Y M E N T S OF T H E TW O LOANS.

First loan: June 28,1917,18 per cent; July 30, 20 per cent; August
15, 30 per cent; August 30, 30 per cent.
Second loan: November 15,1917,18 per cent; December 15, 40 per
cent; January 15,1918, 40 per cent.
Deposits.
(1) ALL NATIONAL BANKS, TW ELFTH DISTRICT.
Total deposits,
including
Government
deposits.
1917.

Total deposits,
excluding
Government
deposits.

$885,647,000
$931,816,000

$871,390,000
$917,465,000

$46,169,000
5.21

$46,075,000
5.20

$931,816,000
Sept. 11......................................................................................................
................................................
Nov. 20..................................................... $1,017,287,000

$917,465,000
$952,281,000

$85,471,000
9.2

$34,816,000
3.8

Increase............................................................................................
P e r c e n t .......................................................................................

Increase............................................................................................
..........................................................................
Percent................

(2) NATIONAL BANKS IN RESERVE CITIES, TWELFTH DISTRICT.
$513,681,000
$554,839,000

$505,412,000
$546,683,000

$41,158,000
$41,271,000
Increase............................................................................................
8
Percent...........................................................................................
8.4
Sept. 11......................................................................................................

$554,839,000
$606,450,000

$546,683,000
$569,810,000

Increase............................................................................................
$51,611,030
$23,127,000
Percent...........................................................................................
4.2
9.3
(3) NATIONAL BANKS OUTSIDE RESERVE CITIES, TWELFTH. DISTRICT.

Sept. 11......................................................................................................

$371,966,000
$376,977,000

$365,978,000
$370,782,000

Increase............................................................................................
Percent...........................................................................................

$5,011,000
1.4

$4,804,000
1.3




ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

23

Time deposits•.
(4) ALL NATIONAL BANKS, TW ELFTH DISTRICT.

Time deposits.
1917.
$160,065,000
June 20....................................................................................................................................
162,900.000
Increase.......... ..............................................................................................................
Perccnt.....................................................................................
...................................

2,835,000
1.9

June 20....................................................................................................................................
162.900.000
Sept. 11....................................................................................................................................
179.275.000
Increase.........................................................................................................................
Per cent........................................................................................................................

16,375,00C
10.05

(5) SAVINGS DEPOSITS OF ALL CALIFORNIA STATE BANKS, SAVINGS BANKS, AND
TRUST COMPANIES.
Savings
deposits.
1917.
June 20.................................
Nov. 20.................................

$596,325,000
606,205,000

Increase.....................
Per cent.....................

9,880,000
1.66

Between the two reports of national banks published on the
Comptroller’s calls June 20 and September 11, the four important
payments, 98 per cent, were made upon the first Liberty loan, the
total amount being $133,694,000.
Nevertheless, between those two dates the combined deposits of all
national banks of this district showed an increase of $46,169,000,
equal to 5.21 per cent. (See (1) above.) A part of these banks in
making payment received back a deposit of Government funds.
Such transactions would cause an increase in their Government de­
posits. Excluding Government deposits on both dates, the increase
was $46,075,000, equal to 5.20 per cent. Of those amounts, national
banks in reserve cities (Los Angeles, Cal.; Ogden, Utah; Portland,
Oreg.; Salt Lake City, Utah; San Francisco, Cal.; Seattle, Wash.;
Spokane, Wash.; and Tacoma, Wash.) gained in total deposits $41,158,000, equal to 8 per cent, and excluding Government deposits
gained $41,271,000, equal to 8.4 per cent. (See (2) above.) This
shows a decrease and not an increase in Government deposits.
National banks outside reserve cities gained in total deposits
$5,011,000, equal to 1.4 per cent, and excluding Government deposits
gained $4,804,000, equal to 1.3 per cent. (See (3) above.)
It appears, therefore, that even excluding Government deposits,
the combined deposits of all national banks increased during the
time that $133,694,000 of first Liberty loan bonds were bought and



24

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN,FRANCISCO.

paid for in this district, but that the increase was somewhat greater
in reserve city banks than in banks outside reserve cities.
Time deposits, which, it might be thought, would be drawn upon
for investment in Liberty bonds, increased in even greater pro­
portion. (See (4) above.)
Between June 20 and the date of the preceding call, that is, be­
fore any important payment was made on the first Liberty loan,
time deposits of all national banks increased $2,835,000, equal to 1.9
per cent, but between June 20 and September 11, during which 98
per cent was paid on this loan, the increase in time deposits was
$16,375,000, equal to 10.05 per cent. (See (4) above.)
On November 15 the first important payment became due on the
second Liberty loan, the allotments of which aggregated $261,138,000.
Payment of only 18 per cent was then required, but many subscrip­
tions were paid in full, the total payments aggregating $167,259,000,
equal to 64 per cent of the entire allotments.
Between Comptroller’s calls of September 11 and November 20, in
spite of the payment of this great sum, deposits of all national banks
increased $85,471,000, equal to 9.2 per cent, but Government de­
posits in these banks in the same period increased $50,655,000, equal
to 355 per cent. Excluding the latter, the increase was $34,816,000,
equal to 3.8 per cent. (See (1) above.) Between the same dates, de­
posits of national banks in the eight reserve cities increased $51,611,000, equal to 9.3 per cent. Excluding Government deposits, the
increase was $23,127,000, equal to 4.2 per cent. (See (2) above.)
This shows that while there was a general increase in deposits, there
was a greater increase in reserve cities than outside.
Between June 20 and November 20, savings deposits of all Cali­
fornia State banks, savings banks, and trust companies combined
show an increase of $9,880,000, equal to 1.66 per cent (see (5) above),
showing that savings depositors are so prospering through continuous
employment at high wages that the new deposits have somewhat
more than offset the withdrawals for investment in Liberty bonds.
Between June 20 and November 20, while national banks in reserve
cities gained $64,398,000, 12.7 per cent, in deposits, excluding those
of the United States, their loans increased only $27,265,000, 8 per
cent. This group, which includes the larger commercial banks, would
probably feel the chief pressure of any emergency demand for loans.
Its resources constitute approximately 60 per cent of the total re­
sources of all national banks in the district.
Thus in five months $468,513,200 Liberty bonds were subscribed, of
which $394,832,000 were allotted, and payments made aggregating
$300,953,000. In spite of this deposits of both commercial and sav­
ings banks have increased, with a materially smaller proportion of
increase in loans.



ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

25

Money has not been shipped out of the district. The conclusion
is inevitable that the general bank position is stronger than before
the Liberty loans were offered. The economic explanation is of
course that, in effect, this district has paid for $300,000,000 of
Liberty bonds with ships, metals, agricultural products, etc., at very
high prices. It is not surprising that bank clearings should be mak­
ing new records and that industry and commerce should be generally
active and prosperous.
T h e F ederal R eserve B ank

and

N ote I ssu e s .

GENERAL POLICY.

It has been the general policy of this bank to substitute Federal
Reserve notes for gold whenever possible. This has been difficult on
the Pacific coast where custom for more than half a century has made
gold the ordinary medium. The use here of gold for currency has
been more than a custom: it has been a pride and, it might be said,
almost a religion, grounded in the discovery of gold in California
in 1849, which first attracted conspicuous attention to the possi­
bilities of this section, and fostered by the production in California
and Alaska since then of hundreds of millions of gold. Gold dust,
gold slugs, as well as gold coins were used as money here when a
depreciated currency circulated elsewhere throughout the country.
The custom and prejudice of the people favor the use of gold as
currency. Purses are adapted to it. Bank tellers trained to handle
gold find it bothersome to handle paper to which they are unac­
customed.
The gradual introduction of national-bank circulation made some
progress toward a change. The panic of 1907 caused scrip to circu­
late. People were glad to get it when gold was unobtainable. The
Aldrich-Vreeland issues in the fall of 1914 also found favor because
of the relief they brought at a crisis. For nearly three years after
the establishment of the Federal Reserve Bank it was found possible
to issue only a relatively small amount of Federal Reserve notes.
With the enactment of the amended reserve provisions approved
June 21, 1917, a change in the situation began, gold in more impor­
tant volume flowed to the Federal Reserve Bank and Federal Re­
serve notes issued in exchange. Army and Navy paymasters, who
had hitherto made up their pay rolls with gold, received official
instructions to use Federal Reserve notes, the Treasury giving gold
to the Federal Reserve Bank in exchange. A good many millions of
Federal Reserve notes have been shipped to the Seattle branch for
use in pay rolls at Camp Lewis.
The Assistant Treasurer at San Francisco has made Federal Re­
serve notes his ordinary counter money, paying gold only when de­



26

ANNUAL REPORT OP FEDERAL RESERVE BANK OF SAN FRANCISCO.

manded. The San Francisco Mint has adopted the method of mak­
ing payment by checks on the Treasury, which are paid by the Sub­
treasury chiefly in Federal Reserve notes. It was arranged that the
Subtreasury become a member of the San Francisco Clearing House
and settle its balances through the Federal Reserve Bank, again
minimizing the use of gold for settlements. From Portland gold
has always been shipped to points down the Columbia River to pay
the fishermen. It was found that this gold never returned. Federal
Reserve notes have been substituted for this service. Taxes in Cali­
fornia, State, county, and city, are payable in gold and until recently
were collected almost entirely in gold. By cooperation of treasurers,
it has now been arranged that Federal Reserve notes and cashiers’
checks of the Federal Reserve Bank be used for the principal part
of such payments. The Federal Reserve Bank now pays express
charges on gold or gold certificates shipped to it and prepays charges
on Federal Reserve notes sent in exchange.
The appeal of the President, made on October 13, 1917, to State
banks to join the Federal Reserve system as a patriotic duty in order
to build up to the maximum its gold reserve has called important
attention to the fact that the Nation is financially able to withstand
strains in direct proportion to the extent of the gold reserve of the
Federal Reserve system. It is perhaps not generally comprehended
that a holder of a Federal Reserve note has to that extent deposited
gold in the Federal Reserve Bank, and that anyone paying out a
Federal Reserve note by the same act pays gold into the Federal
Reserve Bank. Paying money thus offers opportunity to every bank
teller to render patriotic service by aiding in the financial fortifica­
tion of the country. This wave of substitution of Federal Reserve
notes for gold has had a striking effect upon the volume of Federal
Reserve notes issued by this bank. At the beginning of the year
1917 only $14,000,000 were outstanding. This had expanded to less
than $25,000,000 when the amended reserve provisions became effect­
ive June 21, 1917. The amount had risen to $41,900,000 at the end
of October, to $58,400,000 at the end of November, and to $77,097,550
at the end of December.
Frequent reference is made in press comments to the large volume
of Federal Reserve notes outstanding, as if they were additions to
the currency in circulation, whereas they are largely issued in place
of gold which is absorbed into Federal Reserve Bank reserves. Gold
in circulation serves no purpose which paper credit currency does
not adequately serve. But in a Federal Reserve Bank’s reserve
gold multiplies its power, every dollar constituting the potential
basis for two and a half dollars of credit for the needs of commerce.
The following illustrates the fact that gold is absorbed into the
Federal Reserve Bank’s reserve as Federal Reserve notes are paid



ANNUAL BEPOET OF FEDERAL BESEEVE BANK OF SAN FBANCISCO.

27

out: On September 1 Federal Reserve notes outstanding were $28,434,930 and net deposits $53,402,231.52, amounting together to $81,837,161.52. The combined gold reserve held against both amounted
to $57,270,522.50, or 70 per cent. On December 1 notes outstanding
were $58,402,405; net deposits, $77,474,184.11; combined gold re­
serve, $96,367,990 or 71 per cent. It will be seen that $39,097,468
gold was added to reserve, although the increase in deposits was
only $24,071,953. At the end of December Federal Eeserve notes out­
standing were $77,097,550; net deposits, $69,922,002; and combined
gold reserve, $94,018,470, or 64 per cent.
By denominations, Federal Reserve notes issued have been as
follows:
Issued 1917.

Redeemed
1917.

Hundreds....................................................*..................................................

$11,700,000
17.600.000
25.120.000
4,400,0(10
8,000,000

$1,729,430
955,690
1,496,670
146,150
175,600

Total......................................................................................................

>66,820,000

4,503,540

Twenties.........................................................................................................

i Net amount outstanding Dec. 31,1917, $77,097,550.
INTERDISTRICT M O V E M E N T OF NOTES.

Federal Eeserve notes have been received from and returned to
other Federal.Reserve Banks as follows:

January-November, inclusive__________________________ :______$3,783,290
Returned__________________________________________________ 1,502,110

Largest exchanges have been with Federal Reserve Bank of New
York:

Received from Federal Reserve Bank, New York________________ $2,254,540
Returned to Federal Reserve Bank, New York__________________ 331,025

That Federal Reserve notes issued in one district have relatively
small circulation in other districts is shown by the fact that from
January 1 to November 30 the total of the notes of this bank received
by other Federal Reserve Banks amounted to only $3,783,290. Under
the provisions of the Federal Reserve Act, these were returned to the
issuing bank. In the same period this bank returned notes of other
Federal Reserve Banks to an amount of $1,502,110. Of these
amounts $2,254,540 of this bank’s notes were received from the Fed­
eral Reserve Bank of New York and $331,025 of that bank’s notes
returned to it.




28

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.
I n tern al M anagem en t of th e B a n k .

F U N CTIO N A N D W O R K OF DIRECTORS, EXECUTIVE COM M ITTEE, A N D STAFF.

A list of officers and directors is given in Table 4.
Directors’ meetings are held with great regularity and excellent
attendance on the first and third Tuesdays of each month. Informa­
tion regarding the bank’s activities is furnished in considerable de­
tail, and all matters of general policy are considered by the board.
The executive committee is rarely convened. Rediscounts and loans
are first authorized over the signatures of the governor or deputy
governor and the chairman, the other members of the executive com­
mittee signing at their convenience and after such investigation as
each desires.
Since the inauguration of the Liberty-loan campaigns the governor,
as chairman of the general committee, has given his attention largely
to these. In consequence the deputy governor has borne the brunt of
the executive work in the bank. An assistant deputy governor was
appointed to assist, but for a temporary period it became necessary to
have him serve as acting manager of the Portland branch, an assist­
ant cashier of the head office later taking this place. Another as­
sistant cashier of the head office also served as acting manager of the
Seattle branch, and was subsequently appointed manager. Three
trained employees of the head office have also served as acting cashiers
of the three branches, two of them subsequently being appointed
cashiers. This draft upon its staff has placed a heavy pressure upon
the head office during the exceptional demands of the past few
months, and while both official and clerical staffs have been largely
expanded, they are still inadequate.
The force of the fiscal agent department, though large, has been
quickly gathered and has not as yet been properly organized for best
results. The difficulty is generally recognized of obtaining skilled
clerks at this time.
There has been no change during the year in the personnel of the
directors of class A and of class B. Of the class C directors, the
class appointed by the Federal Reserve Board, Mr. Claud Gatch,
chief national bank examiner, completed the term of his appointment
with end of the year 1916, and, in conformity with the policy of
the Federal Reserve Board that national bank examiners shall not
be directors, he was unavailable for reappointment. On January 4,
1917, Mr. E. C. Bradley, former vice president of Pacific Tele­
phone & Telegraph Co., was appointed to succeed him. After serv­
ing a brief period he was called to Washington to act as assistant
to the Secretary of the Interior, and necessarily resigned as director.
On April 23, 1917, Mr. Edward Elliott, professor of international




ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

29

law in the University of California, and of the law firm of Lane &
Elliott, was appointed as Mr. Bradley’s successor.
On July 5, 1917, Mr. A. C. Kains resigned as governor, and on
August 7, 1917, Mr. J. K. Lynch, class A director, was appointed as
his successor. Although it is the policy of the Federal Reserve
Board that a governor of a Federal Reserve Bank shall not at the
same time be a director, the Board permitted Mr. Lynch to complete
his term ending with December 31, 1917. In the regular election of
directors, completed in December, Mr. J. E. Fishburn, president of
the Merchants’ National Bank of Los Angeles, was elected to succeed
him. Mr. A. B. C. Dohrmann, class B director, was reelected.
For the systematic guidance and supervision of branches Mr. John
U. Calkins, deputy governor, was appointed deputy governor in
charge of branches, with the purpose of his frequently visiting the
branches in person.
On July 17,1917, Mr. William A. Day, previously assistant cashier
of the Savings Union Bank & Trust Co., of San Francisco, was
appointed assistant deputy governor, and from September 26, 1917,
to December 14, 1917, served as director and acting manager of the
Portland branch. Other official appointments were as follows: June
6, 1917, Mr. Ira Clerk, as assistant cashier; December 14, 1917, Mr.
W. N. Ambrose, acting manager Portland branch; Mr. C. J. Shep­
herd, assistant cashier, served as acting cashier Spokane branch,
from July 26, 1917, to September 18, 1917, and from September 18,
1917, to December 18, 1917, served as director and acting manager
Seattle branch, being appointed manager Seattle branch on Decem­
ber 18,1917; December 18,1917, Mr. J. C. Galbraithe, cashier Seattle
branch; December 18, 1917, Mr. C. R. Shaw, cashier Spokane
branch; September 26,1917, Mr. H. N. Mangels, acting cashier Port­
land branch; October 29, 1917, Mr. C. S. Loveland, examiner Port­
land branch; October 29, 1917, Mr. E. B. McBride, assistant exami­
ner Spokane branch; December 18,1917, Mr. H. S. House, auditor.
Upon inauguration of preparations for the second Liberty loan the
fiscal agent department of the bank was quartered in the Mills
Building, three blocks from the bank, and Mr. G. O. Bordwell,
cashier, assumed entire charge of its operations.
The following is a list of the members of the bank’s staff who have
entered military or naval service: J. B. Watts, corporal, Three hun­
dred and sixty-third Regiment, National Army; Nat Neal, Coast
Artillery; Emmett Cashin, Aviation Corps; Donald Henderson,
Ambulance Corps; F. W. Kiser, yeoman, first class, United States
Navy; Homer E. Malaby, ensign, Paymaster’s Department; Thomas
E. Graves, first lieutenant, Aviation Section, Officers’ Signal Reserve
Corps; Judson Swift, Sixty-second Machine Gun Corps; Sam H.
Davis, jr., Company D, United States Naval Reserve ; Monroe Baer,



30

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

One hundred and sixty-sixth Depot Brigade; T. O’Connor, Sev­
entieth Company, One hundred and sixty-sixth Depot Brigade; R. S.
Paden, sergeant, Quartermaster’s Department; Thomas S. Marlor,
lieutenant, United States Geological Survey; Fred Robbins, Three
hundred and twenty-second field battalion, Signal Corps, Ninetyfirst Infantry Division; Harry B. Fuller, sergeant chauffeur, Quar­
termaster’s Department; G. J. Concannon, Company F, Fourth Bat­
talion, Twentieth Engineer Corps.
OFFICE AND V AU LT FACILITIES— B A N K PREM ISES.

The present office of this bank, occupied from the outset, grows
increasingly inadequate. During the year a small additional space
has been obtained, but further expansion at this location seems im­
practicable, and exhaustive search discloses no other available quar­
ters. The fact that the business part of this city has been entirely
rebuilt within 10 years measureably accounts for this.
The vault is approached through the quarters of the lessor bank,
with which it is jointly used. The Subtreasury has courteously
placed considerable vault space at the disposal of the bank, and this
has given a measure of relief.
The fiscal agent department has been established for the time
being in an office building a few blocks distant. Its requirements
have extended beyond the available ground floor space, so that parts
of the force are accommodated in various offices above.
The increasing requirements for greater space and the apparent
impossibility of finding adequate quarters with proper vault facili­
ties have led the directors to decide that the construction of a build­
ing for the bank’s use is necessary. At an expense of $120,000 an
appropriate site has therefore been purchased, approximately 120
feet square, with frontage on three streets, assuring unusual provision
for light. Building plans are now under consideration.
C h ec k C ollections .

During the year the check collections of this bank have steadily
increased, the total to November 30 aggregating 2,307,015 items,
amounting to $1,082,192,4G5, a daily average of 8,5G4 items, amount­
ing to $13,554,053.
The number of banks using the collection system has gradually
increased, but approximately 80 per cent of the checks handled have
been received from other districts, chiefly from New York and
Chicago.
Banks in this district using the system have been largely those in
reserve cities, although the smaller banks have manifested a growing
disposition to benefit by the advantages as they gain information.
The establishment of branches at three centers in the Northwest has
served to greatly expedite collection of checks drawn on banks in



31
that section, which increases the value of the check-collection service.
Every effort is made to reduce the time of collection to the minimum,
and to give quickest returns possible, thus reducing the “ float,” that
is, the amount of outstanding collections. Proceeds of checks de­
posited for collection are made available for the depositing bank on
the day scheduled for arrival of checks at destination. On request,
authority is given for sending checks direct to branches, the proceeds
being made available as a credit with head office on the day of ex­
pected arrival at branches. By arrangement, a bank may also send
checks direct to the banks upon which drawn, credit being given by
Federal Reserve Bank on the day checks are scheduled to reach the
drawee banks.
To cover the cost of handling, a service charge is made of 1% cents
for each item, but no charge is made on the first 500 checks received
from any bank in one calendar month.
For a considerable time this bank collected, by express, checks
drawn on nonmember banks which refused par remittance. On Oc­
tober 20, 1017, express collections were discontinued and thereafter
a par list has been used. From this list those banks are excluded
which refuse par remittance and checks drawn upon them are not
accepted by Federal Reserve Banks or their branches.
At the time of discontinuance, checks upon 122 banks were being
collected by express. There are now 136 banks which refuse to remit
at par and checks drawn upon them are consequently refused by
Federal Reserve Bank and its branches. Including 152 branches of
State banks there are 1,321 State banks in this district. Approxi­
mately 90 per cent remit at par.
During the year much progress has been made in developing
methods for the settlement of clearing-house balances through Fed­
eral Reserve Bank. Los Angeles clearing-house banks, all of whom
are member banks, initiated the movement, arranging that after each
day’s clearings the clearing-house manager certifies by telegraph the
balances due from and due to the clearing banks. Federal Reserve
Bank then enters the proper credits and debits upon its books and
telegraphs confirmation. This plan has worked smoothly since its
inauguration July 16,1917. On the same date San Francisco banks
began settling clearing-house balances through Federal Reserve
Bank. Although the clearing-house manager certifies to Federal
Reserve Bank the amounts due to and due from the several banks,
this serves as authority only for receiving and crediting the amounts
due creditor banks. With one or two exceptions each debtor bank
draws its draft on and sends it to Federal Reserve Bank for the
amount of its debtor balance. At Spokane, Seattle, and Portland,
clearing balances are settled through the respective branches of
Federal Reserve Bank.
ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.




32

ANNUAL. REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

The service rendered by the check collection and clearing systems
is of such fundamental advantage in reducing “ float ” by avoiding
circuitous collection methods and in economizing the use of actual
money that an increasing use will surely result. Another service of
great value is that rendered by the gold-settlement fund, deposited
in the Treasury at Washington subject to the order of the Federal
Reserve Board. Through this device, for example, Federal Reserve
Bank of San Francisco transfers for its members by telegraph gold
from San Francisco to New York and from New York to San Fran­
cisco with no charge except for the telegrams. It serves for transfers
between all Federal Reserve Banks or their branches.
G e n e r a l B u s in e s s C o n d it io n s .

Shipbuilding has probably been the most conspicuous single factor
in the activities of this district during the first year of participation
in the war. There has been vast expansion in the operations of
established shipbuilding concerns and many new companies have
organized for constructing both steel and wooden ships. San Fran­
cisco now has the largest shipbuilding plant in the United States,
and this industry, confined here almost wholly to steel construction,
has expanded enormously. While Seattle has had the greatest de­
velopment of new concerns, in which many thousands of men are now
employed, shipbuilding at Portland has likewise assumed vast pro­
portions. At Portland and Seattle both steel and wooden ships are
building. At Los Angeles too, important construction is under way.
A most interesting enterprise is the construction of a reinforcedconcrete ship of some 5,000 tons, at a point near San Francisco. Ves­
sels of this character of 200 or 300 tons have hitherto been success­
fully constructed, but this is the first instance of such a vessel of
any considerable size. The smaller ones, at least in some instances,
have been built keel up, then with hatches tight have been launched
upside down, quickly righting when floated. It is proposed to
launch the large vessel sidewise. If this vessel proves a success, it
will be important as the cost will be little more than one-third that
of steel. Furthermore, steel is now difficult to obtain, while cement
is readily available, made more so by discontinuance of road con­
struction and decrease in building operations.
The lumbering industry has been handicapped by lack of trans­
portation and by labor troubles, menacing I. W. W. disturbances
having developed at times in the Northwest, where the latest factor
has been an embargo on fir to hold it for the Emergency Fleet Cor­
poration and for aeroplane construction. Had it not been for such
difficulties, the lumbering industry would have shown phenomenal
results for the year. The actual results, however, have been suf


ANN UAL REPORT OP FEDERAL RESERVE BANK OF SAN FRANCISCO.

33

fieiently favorable to impart substantial commercial activity to all
sections in which lumbering is important, dissipating the sluggish­
ness which has clogged them for several years. Revival in lumbering
and vast development in shipbuilding have given special advantages
to Seattle and Portland at this time.
Mining of all kinds has been exceedingly active in this district
and for the most part profitable. It is estimated that mining divi­
dends for 1917 in the territory known as the inland empire, of which
Spokane is the center, will aggregate approximately $100,000,000.
The metals there are chiefly lead, zinc, copper, and magnesite. The
United States Geological Survey estimates that, except as to zinc
ore and concentrates, the production in the first six months of 1917
has equaled the entire output of 1916.
Copper mining has continued on a huge scale throughout the year,
although maximum output has not been reached because of labor
troubles, I. W. W. disturbances having especially affected the
Arizona mines. The value of copper mined in Arizona during 1917
is estimated at $200,000,000, other metals $60,000,000.
The production of petroleum in California has fallen far below
consumption. During 1917 production was 97,267,832 barrels and
shipments were 108,853,457, reducing stored stocks fom 44,036,190
barrels on December 31, 1916, to 32,450,465 barrels. Stored stocks
on December 31,1915, were 57,147,051 barrels.
In many respects the year 1917 has been unfavorable for agricul­
tural products. The spring was cold and backward in the North­
west, with hot winds and deficient moisture in the later season. The
Washington wheat crop was about 27,000,000 bushels against 45,000,000 the preceding year. The yield of barley in Oregon, Washington,
Idaho, and Nevada was about 18 per cent less than in 1916, but in
California there was a considerable increase.
In California the area planted in beans increased from 253,000
acres in 1916 to 395,000 acres, the yield being nearly double, an esti­
mated total of 9,280,000 bushels.
In 1912 the acreage in rice was 1,400. This was increased yearly
until in 1917, 90,000 acres were planted.
These typify the agricultural situation of the year, some crops
poor, some good. There was, however, such an effort for large prod­
uct, stimulated by both patriotism and extraordinary prices, that in
spite of unfavorable conditions the product of foodstuffs in the en­
tire district was exceptionally large. There were many abundant
yields in California—35,000 tons more raisins than ever before; more
peaches than in 1916 by 1,300,000 bushels; a record number of car­
loads of deciduous fruits and perishable commodities; shipments of
cUrus fruits, aggregating 54,361 carloads, surpassed all previous



34

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

records. The apple crop of Idaho, Oregon, and Washington was
large. The salmon pack of Alaska was exceptional.
Present forecasts of next year’s production of foodstuffs would be
sheerest guessing, because there is ample time for any unfavorable
condition to be righted. Concern is, however, being felt because of
the lack of precipitation in California, there having been only about
10 to 15 per cent of the normal seasonal precipitation. In the wheat
regions of the Northwest the fall planting was practically a failure.
Later rains have made the conditions there such as to be promising
for spring planting.
In spite of curtailment of available range, the high price of feed,
and the difficulty in securing labor, live stock holdings in the Pacific
Northwest, according to Government estimates, generally showed
slight increase on December 31, 1917, over the same date in 1916.
In Oregon, Washington, and Idaho the holdings of cattle, exclud­
ing milch cows, increased from 2,055,000 head to 2,165,000 head
during this period; of milch cows from 623,000 to 633,000 head;
of sheep from 6,141,000 to 6,306,000 head. Holdings of swine de­
creased from 890,000 to 811,000 head. Total live-stock holdings
increased 206,000 head, or 2.1 per cent.
Labor is unsettled and there have been many strikes, though
there are none of importance as the year closes.
Import and export trade, in spite of deficient tonnage, is at record
volume. Seattle’s foreign trade exceeds that of San Francisco, the
totals for the two being, respectively, $480,000,000 and $400,000,000.
Building permits during the past five months are 17 per cent less
than in 1916. Bank deposits, bank clearings, and post-office receipts
are continually making new high records.
The year has been one of great agricultural, industrial, and com­
mercial activity and prosperity in this district. This reflects the
fact that it has made important contribution of products vitally
necessary for winning the war.
T a b l e 1.—

Classification by maturities of paper rcdiscountcd.
MATURITIES.
Over 15 to
39 days.

Over 30 to
60 days.

Over 60 to
90 days.

Over 90
days to 6
months.

120,302
50,254
460,935
842,881
216,019
520,765.
197,799
296,§53
910,940

$7,863
9,266
8,578
200,577
114,823
2,520,000
599,191
474,815
1,879,306
1,863,551
1,973,355
3,731,567

$25,559
34,705
46,796
216,386
132,380
2,883,932
1,087,110
877,941
2,762,083
1,923,762
3,803,274
9,71^,057

$37,707
32,344
74,157
139,828
125,995
3,089,878
1,437,418
636,470
1,344,130
1,971,127
2,655,771
6,931,795

$47,705
4,540
21,990
21,814
27,147
103,351
42,387
188,277
161,927
20,224
171,165
240,221

$123,358
106,786
151,521
698,887
450,599
9,058,096
4,178,987
3,393,522
7,668,211
7,976,463
10,900,421
23,582,580

Total............................... ! 11,647,195

13,382,892

23,511,975

18,526,620 | 1,220,748

68,289,431

Month.

January___
February..
March........
April..........
May...........
June..........
July...........
August......
September.
October___
November..
December..




15 days
and less.
$4,514
25,931

Total.

ANNUAL* REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

35

Table 2.—Reserve position of Federal Reserve Bank of San Francisco at till
end of each month during the year 1017.
Month.

January...
February.
March......
April........
May.........
June.........
July.........
August....
September
October...
November.
December.

Net deposits.

Federal
Reserve
notes out­
standing.

Gold and gold
certificates,
gold settle­
ment fund.

$32,911,714.14
33.715.308.10
39,049,C82.53
36.841.247.13
39,004,838.49
61.127.208.14
64,501,712.33
53,402,231.52
52,422,235.60
54,682,509.58
77.474.184.11
69,922,002.00

$15,726,890
16,195,845 j
16,205,545 '
19,954,290 ;
22.843.600 !
24.387.600 i
26,088,230
28,434,930 i
36,420,270 !
41,903,470 I
58,4Q2,405 !
77,097,550 !

$20,893,505.00 $82,879.10
21.070.995.00 31,551.10
27.040.167.50
65.343.35
21.337.340.00 102,393.05
20.345.045.00 114,299.35
35.494.235.00 141,412.20
45.319.530.00
92.587.00
28.835.592.50 45,849.80
37,6(5,300.00
33,772.40
40.968.910.00
62.064.35
83.775.00
57.769.585.00
47.024.920.00 408,822.55

Gold with
Federal
Reserve
agent.

Other
cash.

Total gold
reserve.

$15,726,890
16,195,845
16,207,545
19,954,290
22.843.600
24.387.600
26,088,230
28,434,930
26,516,270
30,949,470
38,598,405
45,993,550

$36,620,395. C
O
37.266.840.00
43.247.712.50
41.291.630.00
43.189.245.00
59.881.835.00
71.407.760.00
57.270.522.50
64.181.630.00
71.918.380.00
96.367.960.00
94.018.470.00

N ote.—An amendment to the Federal Reserve act approved June 21,1917, includes in reserve gold with
the Federal Reserve agent. For easier comparison, this table is constructed as if this provision had, been
in effect throughout the year.

Table 3.- -Report of Treasury certificates of indebtedness subscribed for through
Federal Reserve Bank, San Frandscot during 1917.
$1,000 to $25,000.
Series.

Mar. 31..
Apr. 25..
May 10..
May 25..
June 8 ..
Aug. 9 ..
Aug. 28.
Sept. 17.
Sept. 26.
Oct. 18..
Oct. 24..
Nov. 30.,
Total.

Num­
ber.

Amount.

$25,000 to $50,000.

$50,000 to $100,000. $100,000 to $250,000.

Num- j Amount.
ber. i

Num­
ber.

$2, 220,000

143 $1,990,000
121 1.322.000
1.237.000
833.000
1.254.000
1.268.000
100
100 1.252.000
227 2.910.000
209 2.968.000
79 1.007.000
19
275.000
1,295

16,316,000

$250,000 to $500,000.

,

1 120,000

2.750.000
4.075.000
1.871.000
167.000
374

16,778,000

$500,000 to
$1,000,000.

Num­
ber.

$2,835,000
1.195.000
635.000
1.425.000
920.000
1.940.000
1.885.000
5.145.000
4.431.000
2.765.000
400.000

1.138.000
498.000
792.000
1.160.000
987.000

132
71
94

Amount.

254

23,576,000

Amount.

$2,740,000
2.545.000
930.000
1.350.000
1.945.000
2.925.000
3.890.000
6.637.000
5.801.000
3.795.000
970.000
170

$1,000,000.

33,528,000

Total.

Series.
Num­
ber.

Amount.

Num­
ber.

Amount.

Mar. 31......................
Apr. 25......................
May 10.......................
May 25....................
June 8........................
Aug. 9........................
Aug. 28......................
Sept. 17......................
Sept. 26....................
Oct. 18...... ................
Oct. 24.......................
Nov. 30......................

12 $4,835,000
3 1,300,000
900,000
3
2
800,000
8 3.550.000
1
400.000
1
374.000
9 3.530.000
7 2.200.000
9 3,970,000
500.000
1

2

56 22,329,000

9

6,534,000

Amount.

1 $2,500,000
1 2,680,000

1,450,000

Total................

Num­
ber.




3

$2,700,000

1

750,000

2

3,421,000

1
1
1

509.000
600.000
525,000

1

1,458,000

5

10,059,000

Num­
ber.

Amount.

1
251
173
165
113
151
159
167
387
383
177
36

$2,500,000
20,000,000
7.500.000
4.200.000
5.200.000
13.000.000
7.520.000
9.030.000
23.000.000
20.000.000
13,408,000
3.762.000

2,163

129,120,000

36

ANNUAL REPORT OP FEDERAL RESERVE BANK OF SAN FRANCISCO.

Table 4.—Officers and directors of Federal Reserve Bank of San Francisco.
DIRECTORS.

Class A.—Alden Anderson, term expires December 31, 1918; C. K. McIntosh,
term expires December 31, 1919 ; J. E. Fishburn, term expires December 31,
1920.
Class B.—Elmer H. Cox, term expires December 31,1919; A. B. C. Dohrmann,
term expires December 31, 1920; John A. McGregor, term expires December
31, 1918.
Class C.—Edward Elliott, term expires December 31,1919; Walton N. Moore,
term expires December 31, 1918; John Perrin, term expires December 31, 1920.
OFFICERS.

John Perrin, chairman of the board and Federal Reserve agent; James K.
Lynch, governor; John U. Calkins, deputy governor in charge of branches;
William A. Day, assistant} deputy governor; George O. Bordwell, cashier; Ira
Clerk, assistant cashier; W. N. Ambrose, assistant cashier and acting manager
Portland branch.
BRANCH DIRECTORS AND OFFICERS.

Portland: W. N. Ambrose, assistant cashier of head office, acting manager;
A. L. Mills, president First National Bank; J. C. Ainsworth, president United
States National Bank; Nathan Strauss, of Fleischner & Meyer; Judge Thomas
C. Burke; H. N. Mangels,1 acting cashier.
Seattle: Clifford J. Shepherd, manager; M. F. Backus, president National
Bank of Commerce; N. H. Latimer, president Dexter Horton National Bank;
Charles E. Peabody, capitalist; Charles H. Clarke, of Kelley-Clarke Co.; J. C.
Galbraithe,1 acting cashier.
Spokane: Charles A. McLean, manager; D. W. Twohy, president Old National
Bank; Edwin T. Coman, president Exchange National Bank; Peter McGregor,
farmer; G. T. Toevs, manager Centennial Mill Co.; Clarence R. Shaw, cashier.
—Comparison of deposits and of loans and discounts of national banks
of the twelfth Federal Reserve district on Nov. 17, 1916, and Nov. 20, 1917.

T a b l e 5.

DEPOSITS.
Per cent
increase.

Nov. 20,1917.

All national banks:
Alaska.............
Arizona............
California.........
Idaho...............
Nevada............
Oregon.............
Utah.................
Washington—
Total.
1 Acting officers from




$73,884,000
196,227,000
42.273.000
20.451.000
42.480.000
20.446.000
7.491.000
9.332.000

$26,698,000
96.087.000
28.393.000
3.439.000
21.916.000
12.193.000
4.479.000
661,000

49
40
17
52
37
60

412,584,000

193,866,000

47

182,000
9,554,000
618.289.000
46.842.000
13.380.000
114.849.000
46.527.000
166.674.000

2 6,000

1.969.000
95,489,000
8.944.000
2.785.000
17.997.000
13.022.000
28.208.000

*3
29

.
I
i
j
j

188,000
7,585,000
522,800,000
37.898.000
10.595.000
96.852.000
33.465.000
138.466.000

1,017,287,000 |

Total.

$100,582,000
292,314,000
70.666.000
23.890.000
64.396.000
32.639.000
11.970.000
9.993.000
606,450,000

Reserve cities:
Los Angeles—
San Francisco..
Portland..........
Salt Lake City.
Seattle.............
Spokane...........
Tacoma............
Ogden..............

Nov. 17 1916.

847,879,000

169,408,000

head office.

Increase.

* Decrease.

8

18
23
26
18
39
21

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

37

—Comparison of deposits and of loans and discounts of national banks of the
twelfth Federal Reserve district on Nov. 17, 1916, and Nov. 20, 1917—Continued.

T a b l e 5.

LOANS AND DISCOUNTS.
Reserve cities:
Los Angeles...
San Francisco.
Portland........
Salt Lake City
Seattle............
Spokane.........
Tacoma..........
Ogden............

169.426.000
179.110.000
35.368.000
14.139.000
34.737.000
22.149.000
6.052.000
6.632.000

$58,666,000
156.557.000
31.105.000
15.350.000
28.915.000
17.379.000
5.208.000
4.952.000

$10,760,000
22,553,000
4.263.000

Total...........

367,613,000

318,132,000

49,481,000

16

SST::::::::

46,000
4.582.000
339,600,000
22.950.000
6.178.000
58.431.000
24.067.000
82.235.000

29,000
903,000
58.993.000
7.621.000
1.890.000
13.306.000
• 6,393,000
14.364.000

20

Washington...

75,000
5.485.000
398,593,000
30.571.000
8.068.000
71.737.000
30.460.000
96.599.000

17
33
30
23
26
17

Total...........

641,513,000

538,089,000

103,424,000

19

All national banks:
A laska..........
Arizona..........
California.......
Idaho.............
Nevada..........

.

11 211.000

5.822.000
4.770.000
844,000
1.680.000

18
15
14

16
20
24
16

i Decrease.

—Comparison of loans, investments, and deposits of national banks on
June 80,19H, with those on corresponding dates in 1915, 1916, and 1917, and
on November 20, 1917.

T a b l e 6.

LOANS AND INVESTMENTS.

Date of call.

June 30,1914:
Loans.......
Bonds, etc

Amounts.




100.1

1.5

1. A

91.7

8.8

10.4

88.2

22.3

33.2

87.2

13.5

52.9

584.525.000
196.952.000
781,477,000

Nov. 20,1917Loans.......
Bonds, etc

100.5

482.570.000
157.255.000
639,825,000

June 20,1917:
Loans.......
Bonds, etc

Percent
increase
over June
30,1914.

440.555.000
147.650.000
588,205,000

June 30,1916:
Loans.......
Bonds, etc,

Per cent
increase
over pre­
ceding
figure.

$439,092,000
140,723,000
579,815,000

June 23,1915:
Loans.......
Bonds, etc

Per cent of
loans and
invest­
ments to
deposits.

641.513.000
245.751.000
887,264,000

38

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO.

T able

,

6.—Comparison of loans, investments, and deposits of national banks on June
, with those on corresponding dates in 1915,
and 1917, and on November
— Continued.

SO 1914
2 0 , 1917

DEPOSITS.

Date of call.

Amounts.

June 30,1914............................................................
June 23,1915............................................................
June 3C, 1916...........................................................
June 20,1917......................... .................................
Nov. 20,1917...........................................................

$576,852,000
587.678.000
698.620.000
885.647.000
1,017,287,000

Per cent of Per cent of Per cent
deposits to increase
increase
over pre­ over June
loans and
ceding
invest­
30,1914.
figure.
ments.
99.5
99.9
108.3
113.8
114.7

1.9
18.9
26.7
14.9

1.9
21.1
53.5
76.3

Table 7.—Federal Reserve notes issued and redeemed by Federal Reserve agent
during 1917.
Fives.
Outstanding Dec. 31,1916
Issued during 1917.............. $11,700,000
Unfit notes redeemed, 1917..
Outstanding Dec. 31,1917




1,729,430

Tens.

Twenties.

Fifties.

Hundreds.

Total.

$17,600,000

$25,120,000

$4,400,000

$8,000,000

$14,781,090
66.820,000

955,690

1,496,670

146.150

175,600

81,601,090
4,503,540
77,097,550

ANNUAL BEPOBT OF FEDEBAL BESEBVE BANK OF SAN FBANCISCO.

E x h ib it




A.—Federal Reserve notes outstanding, 1917.

39

40

ANNUAL BEPOET OP PEDEBAL BESEBVE BANK OF SAN FBANCISCO.

Exhibit B.—Bank clearings of principal citie* in twelfth district.
[In millions; 000,000 omitted.]

1911

1912

(l) 40

Bakersfield.................
Fresno.......................
Long Beach.................
Los Angeies................
Oakland.......................
Pasadena.................... .
Sacramento..................
San Diego.................. .
San Francisco............ .
San Jose.......................
Santa Rosa..................
Stockton......................
Reno............................
Portland......................
Salt Lake City.............
Ogden..........................
Seattle..........................
Spokane.......................
Tacoma.......................

173
42
78
83
2,427
30

1913

51

48
108
134
2,624

40

553

1915

333

26
1,048
181
44

101
100
12
50

2,694
35

15
554
350

225
139

665
219
133

203

612
193
99

6,442

4,9

6,470

6,124

6,188

* Organized 1912.

110

First 11
months.
1917

1916

20
54

24
53
17
1,145
176
44
103
103
2,516
36
13
47
14
577
315

1,211
189

1,169
223
47
93
132
2,678

*557*

Total.

E x h ib it

1914

28
72
30
1,284
223
50
126

33
96
35
1,381
246
53
146

3,480
44
13
72

4,399
49
14
82
28
784
644

112

110

21

650
513
61
790
255
115

88

1,042
310
145
9,685

7,9

* Organized 1914.

C.— Banking power of twelfth Federal Reserve district.*

[Resources and liabilities given in thousands; i. e., 000 omitted.]
Arizona.

California.

National State
banks. banks.
Number of banks.
Date of report.......

National
banks.

7
Nov.20

K
fi
Sept.ll

270
Nov.20

$5,485

$25,949

1,842

4,515

330
3,578
11,297

Idaho.

Nevada.

State National State National State
banks. banks. banks. banks. banks.
571
Nov.20

64
137
Nov.20 Sept. 11

10

Nov.20

Sept. 11

RESOURCES.
Loans and discounts...........
Stocks, bonds, and other
securities.......................... .
Banking house, furniture,
and fixtures, and other
real estate......................... .
Cash and exchange...............
Other resources....................
Total.

$398,593 $575,072 $30,571

$31,0

$8,068

$10,512

145,917 218,233

10,234

3,6

3,457

2,130

1,530
14,533

17,761
208,803
20,094

35,849
142,786
21,261

1,662
13,709
281

1,797
14,230

417
4,353
314

682
4,433
216

46,527

791,168 993,201

56,457

51,026

16,609

17,973

LIABILITIES.
Capital...................................
Surplus and undivided
profits................................
Due to banks........................
Individual deposits, demand
Individual deposits, tim e...
Rediscount8.........................
Monev and bonds borrowed.
Circulation outstanding.......
Other liabilities....................
Total.

675

2,938

(*>
(a)

59,525

544
44

<229

11,297

46,527

791,168 993,201

462
8,149
743

41,025

4,042

1,435

1,846

2,591
5,139
32,438
9,265
349
140
3,021
74

1,766
2,138
31,716
10,809
158
294

599
1,726
8,974
2,610

640
143
7,753
7,526

103

1,215
50

56,457

51,026

16,609

66,186

48,912 47,042
133,943 20,594
394,769 210,581
84,577 625,281
126
6,620
10,382
871
40,813
18,247 22,520

2,335

1Includes 4 counties in eleventh Federal Reserve district.
* Included in demand deposits.
s Subtracted from loans and discounts and not included in total liabilities for national banks.
4Includes rediscounts and money borrowed.




17,973

ANNUAL BEPOBT OF FEDERAL BESEBVE BANK OF SAN FRANCISCO. 41
E x h ibit

C.—Banking power of twelfth Federal Reserve district—Continued.
[Resources and liabilities given in thousands; i. e., 000 omitted.]
Oregon.

Utah.

Washington.

National State National State National State
banks. banks. banks. banks. banks. banks.

Total.
National
banks.

State
banks.

178
24
Sept.ll Nov.20

102
Oct. 8

78
Nov.20

284
Sept.ll

534
Nov. 20

1 1,351

Loans and discounts............ $71.737
Stocks, bonds, and other
securities............................ 29,834
Banking house, furniture,
and fixtures, and other
4,526
real estate..........................
Cash and exchange............... 32,807
Other resources....................
849

$46,868

$30,460

$57,240

$96,599

$76,323

$641,513

$823,062

11,516

9,764

6,333

44,703

18,297

245,751

264,663

3,246
23,693
782

1,816
15,239
61

3,413
15,338
458

4,665
47,332
3,097

9,970
31,834
1,749

31,177
325,821
13,542

56,487
246,847
24,581

Total........................... 139,753

86,109

57,340

82,783

196,396

Number of banks.................
81
Date of report....................... Nov.20

RESOURCES.

138,374 1,269,025 1,415,640

LIABILITIES.
Capital..................................
Surplus and undivided
profits................................
Due to banks.......................
Individual deposits, demand
Individual deposits, tim e...
Rediscount *.........................
Money and bonds borrowed.
Circulation outstanding.......
Other liabilities....................

9,591

8,894

3,405

7,223

11,810

15,856

6,717
13,733
76,647
21,462
1,082
1,110
6,142
1,338

4,364
4,210
41,482
24,860
492
1,176

4,322
4,152
30,247
30,007

6,742

7,368
23,448
96,205
47,021
518
1,005
6,680
2,821

8,110
7,997
59,197
54,095
554
1,157

631

2,501
12,467
24.121
9; 939
540
1,445
3,236
228

Total........................... 139,753

86,109

57,340

82,783

196,396

2,230

90,230
69,368
196,918
641,303
178,617
9,109
14,087
61,651
22,759 “




67,479
39,234
412,001
742,578
1,330
3,498
*32,*6i8

138,374 1,269,025 1,415,640

i Includes 134 branch offices.
* Subtracted from loans and discounts and not included in total liabilities for national banks.

O

106,975

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