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F ederal R eserve B ank
OF

D A LLA S

December 31, 1923.

TO THE BANK ADDRESSED:
The enclosed pamphlet describes and illustrates,
in a very interesting way, the manner in which the Federal
Reserve System serves the banks and business interests of the
country. It was compiled and published to meet the need for
bringing about a better understanding of the functioning of
the Federal Reserve System, and we are mailing it to the
eligible non-member state banks in this district believing
that it will prove of interest to them.

Yours very truly,

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

-o fs e r v ic e to
bank§ & business

The Federal Reserve System

*llll|?r? ttfm ta ttn maum,
011 j?

ptaph p m a lj.”

CHARTS
com prising exhibit o f Federal reserve system
at annual con vention o f Am erican Bankers’ A ssociation
September 24-27, 1923

Inclusive of tabular matter and two charts which could not be prepare
in time for exhibit at the convention

CONTENTS
T

h e

F

u n c t io n in g

F

e d e r a l

R

o f

t h e

S

e s e r v e

M O B IL IZ A T IO N

y s t e m

PAGE
NUMBER

:

OF G O L D

RESERVES:

M o b iliz a t io n o f reserves

2

R e d u c t io n in reserve re q u ire m e n ts

4

R e le a s e o f fu n d s f o r in v e s tm e n t

5

M e m b e r s h ip in th e sy stem

E

3

C a s h a n d reserves o f n a tio n a l b a n k s

6

l a s t ic it y

o f

C

r e d it

:

E la stic cu rre n cy

7

R e d is c o u n tin g

8

F in a n c in g trad e t h r o u g h b a n k e r s ’ a ccep ta n ces

9

S ta b iliz a tio n o f in terest rates

10

P rices a n d lo a n a c c o m m o d a t io n s

11

T R A N S F E R A B IL IT Y O F C R E D IT :
C h e c k c o lle ctio n s

12

N o n -c a s h c o lle c tio n s a n d w ire tran sfers

13

G o l d s e ttle m e n t fu n d

16

In te rd istrict b o r r o w in g

17

R E SU L T S OF O P E R A T IO N :
D is p o s it io n o f g ro ss ea rn in g s

18

R ate o f retu rn o n e a rn in g assets

18

E xp en ses co n tra ste d w ith v o lu m e o f o p e r a tio n s

19

R e s e rv e ratio

19

F actors a ffe c tin g reserves

20

E a r n in g assets

20

P a y m e n t o f in terest o n reserve d e p o sits

21

R e p o rts o n b u sin ess c o n d it io n s

22

GENERAL:
F in a n c in g an im p o r t tr a n sa ctio n b y b a n k e r s ’ a ccep ta n ces
C h i e f s u p p o r t o f b ill m a rk e t

14 a n d 15
23

R eserve re q u ire m e n ts u n d e r state law s
L o c a t io n o f F ed era l reserve b a n k s a n d b ra n ch es

1

2 4 t o 27
28

MOBILIZATION OF RESERVES
Bank reserves formerly were widely sca tte re d among
individual banks. In times of need each bank had to
look out for itself and was loath to part with its holdings,
and any large withdrawal of reserve funds from city
depositories led to strained conditions.
Now reserves of member banks are their balances in the
Federal reserve banks. These great gold re se rv e s
practically sustain the re se rves of every member, as
from that great reservoir assistance may flow to
member banks in any part of the country through the
rediscount system.

ff IN UNION THERE IS STRENGTH ”

REDUCTION IN RESERVE REQUIREMENTS
Increased liquidity of bank re so u rce s due to new form of
reserves introduced by Federal reserve system permitted
large decreases in the percentage of reserves to be
carried by member b an ks. Three facto rs made this
p o ssib le- the mobilization of re se rv e s at the reserve
banks; the fact that these reserves are actual collected
funds, and that means for rediscounting are available.
The funds thus released add considerably to loaning
power of member b an ks.
Many states now permit state member banks to keep
re se rv e s in a cco rd an ce with provisions of Federal
Reserve Act.

3

CASH AND RESERVES OF NATIONAL BANKS
CARRIED UNDER FEDERAL RESERVE A C T ON JUNE 3 0 , 1 9 2 3
IN CONTRAST WITH REQUIREMENTS IF NATIONAL
BANK ACT HAD CONTINUED IN FORCE

Deposits of national banks more than doubled from i9 i4 to 1923.
However, the lower reserve requirements of the Federal
Reserve Act enabled these banks to carry largely increased
deposits with an actual decrease in their reserves. Cash
now counts only as till money and has been reduced from
1,021 millions in 1914 to 290 millions in 1923, or 12 per cent.
If the National Bank Act was in effect today these banks
would have to hold reserves of 1,753 millions in cash and
1,242 millions on deposit with other banks, or 2,995 millions.
Required cash reserves alone under the National Bank Act
therefore would have been much larder than the present
combined total of reserve at reserve Banks and cash in vault.

4

RELEASE OF FUNDS FOR INVESTMENT
The Federal Reserve Act has released a vast amount of
cash which was formerly held as reserve under the
National Bank Act. From 1,021 millions (without Alaska
and Hawaii) in 1914, a reduction has been made to
only 290 millions in 1923. The difference-7 3 1 millions—
has gone largely into the reserve banks a s part of
the legal reserve of 1,128 millions now required to
be held there. A striking comparison not generally
realized is that the casn in vault of all national
banks was 13.635 per cent of deposits in 1914, where­
as combined cash and required reserves were only
9.414 per cent of deposits in 1923 under the Federal
Reserve Act.

RATIO REQUIRED RESERVE AT FEDERAL
RESERVE BANKS TO DEPOSITS

.RATIO CASH IN VAULT
I
TO DEPOSITS

5

MEMBERSHIP IN THE SYSTEM
Membership formerly restricted to banks with paid-up
unimpaired capital a s follows: Cities of 3,000 people
Or leSS-$ 25 , 000 ; 3,001 to 6,000-$ 50, 000 ; 6,001 to
50,000-$ 100,000; over 50,000-$200,000. Banks may
now become members having capital equal to 6 0 %
of amounts given provided mat they increase cap­
ital to requirem ents within five y e a rs.
Excluding mutual savings banks, 3 3 % of all banks on June
3 0 ,19 2 2 were member banks, and these members had
7 3 % of total resources.

PER CEN TA G E OF R ESO U RCES OF MEMBER BANKS
“TO

TO T A L BANKING RESO URCES OF EA CH S T A T E

■
□

Member banks hold s o % o r
more of the banking resources.
Member banks hold between 2 5 %
and 5 0 % of the banking resources.

In no states do member banks hold
less than 2 5 % of the banking resources.

6

ELASTIC CURRENCY
Money in circulation prior to passage of Federal R eserve
Act responded little to changing needs of business. It
had little power of expansion or co n tra ctio n .
Federal Reserve A ct created a c u rre n c y secured by goid
and busin ess paper. This c u rre n cy expands and con­
tra c ts almost autom atically a s borrowings fluctuate.
Federal re se rv e notes now constitute almost one half of
total money in circulation.
Close relation to volume of b u sin e ss is indicated in
ch art.

REDISCOUNTING
Inflexible re se rv e s under national bank a c t permitted
reserves to be used only to meet withdrawal of deposits.
Loaning power was rigidly limited, there being no elas­
ticity in loaning power to meet emergencies.
Federal Reserve Act does not encourage any institutions
in doing business beyond their resources, but it does
provide means through rediscounting for meeting all
legitimate requirements of business.

REDISCOUNTS BY FEDERAL RESERVE BANKS
NUMBER
OF

BANKS

6,000

5 .0 0 0

4 .0 0 0

3 .0 0 0

2.000

1.000

1919

1920

1921

8

1922

FINANCING TRADE THROUGH
BANKERS’ ACCEPTANCES
The Federal Reserve Act, by permitting national banks
to accept drafts or bills of exchange and to issue
letters of c re d it, provided a new method of finan­
cing in this country and made available to banks
a desirable form of investm ent. The financing of
foreign trade, which heretofore had almost entirely
been done abro ad , was g re atly facilitated.
The reserve banks have been steady p u rc h a se rs of
bankers’ bills.

9

STABILIZATION OF INTEREST RATES

Prior to the Federal reserve system interest rates ex­
hibited marked seasonal .variations,- low at one sea­
son and high at another. Now banks may care for
seasonal credit and currency needs by rediscounting
at their reserve bank and thus avoid drawing heavily
on funds already in use elsewhere. This elasticity
minimizes seasonal fluctuations in interest rates.

FLUCTUATIONS IN INTEREST RATES MINIMIZED
IN D E X

120
115
1 10

105
YEARLY

10
0

AVERAGE

95
90
85
FIR S T QUARTER
J A N -F E B -M A R

SECOND QUARTER
APR -M A Y JUN

THIRD QUARTER
JU L -A U G -S E P

10

FOURTH OUARTER
O C T-N O V -D E C

PRICES AND LOAN ACCOMMODATIONS
The decline in prices which began in 1920 brought about
six months later a reduction in both Federal reserve note
circulation and rediscounted bills held by reserve banks.

11

CHECK COLLECTIONS
92 percent of the banks now cooperate in the Federal
reserve par check collection system, through which
more than 1,800,000,000 checks amounting to over
$560,000,000,000 were collected in the last four years.
The more direct routing of checks and more immediate
payment has effected a tremendous saving in the
transaction of the country’s business.
The check collection problem does pot stop with the mere
question;“ Shall exchange be paid”? It involves necessarily
the further question of whether checks shall continue to
be promptly collected, or whether we shall go back to the old
system of circuitous routing to avoid exchange charges.

ROUTE OF A CHECK
BEFORE TH E FEDERAL RESERVE
Check on North Birmingham bank
was deposited in Birmingham bank

4 Miles

Sent to bank in Jacksonville Florida

488

»

Sent to bank in Philadelphia

s i7

•
•

Sent to bank in Birmingham

941

(To avoid payment of exchange]
(To avoid payment of exohange)

(To avoid payment of exchange)

Sent to bank in North Birmingham

4

•
>

CHECK NOT PA 10 ANO
Returned to Birmingham bank

4 ”

Returned to Philadelphia bank

941 ”

Returned to Jacksonville bank

s in

Returned to Birmingham bank

488 •
>

”

Returned by Birmingham bank to depositor

Distance traveled 4500 miles
Time in tra n s it 14 days
UNDER TH E FEDERAL RESERVE

Collection would be made by mail
directly in 2 days

12

NON-CASH COLLECTIONS
AND WIRE TR ANSFERS
Collection of non-cash items and wire tr a n s fe r of
funds for member banks supplement the check
collection system . By u se of wire tra n sfe rs,
banks may promptly re sto re b a la n c e s by draw­
ing upon th eir accounts in other sectio n s of the
country, and the rapidity of transfer, by reducing
the “ float’,’ m akes bank statements more reflect­
ive of tru e condition.

NON-CASH COLLECTIONS AND WIRE TRAN SFERS
B ILLIO N S
OF

D O LLA R S

70
60
50
40
30
20

10
1920

1921

1922

1920

13

1921

1922

FINANCING AN IMPORT TRANSACTION BY BANKERS ACCEPTANCES
FOREIGN BANK

To finance import
of merchandise
obtains letter of
credit from bank
and sends it to
foreign exporter
Forwards funds
to bank prior
to maturity of
acceptance.

14

15

GOLD SETTLEM ENT FUND
All tran sa ctio n s between Federal re serve banks are
cleared through the gold settlem ent fund at Wash­
ington. Daily settlements expedite the transfer of
balances and avoid physical shipments of money.
Transactions in 1922, amounting to $76,490,000,000
were handled at a cost of approximately 65/100 of
a cent per $1,000 of funds transferred. If gold is
shipped a s sh o rt a distance as from New York to
Pittsburgh, the express and insurance ch arg es
alone would be $1.35 per $1,000.

GOLD SETTLEMENT FUND TRANSACTIONS

1916

1917

1918

1919

16

1920

1921

1922

INTERDISTRICT BORROWING
A re s e rv e bank which has extended credit up to
the limit allowed by its r e s e rv e s may replenish
its re se rv e s by rediscounting with other reserve
banks. In this way the re so u rce s of all reserve
banks are made availab le to all member banks
throughout the country. Rediscounts between
re se rve banks amounted to over seven billions
of d o llars in the years ieis to 1921 inclusive.

REDISCOUNTING BETWEEN
FEDERAL RESERVE BANKS

1919

1920

17

1921

RATE OF RETURN ON EARNING ASSETS
OF FEDERAL RESERVE BANKS

1916

1917

1918

1919

18

1920

1921

1922

EXPENSES OF FEDERAL RESERVE BANKS
CONTRASTED WITH VOLUME OF OPERATIONS
CURRENT EX P EN SES

CURRENCY COUNTED

$40,000,000
30.000.

. .

20 000

000
000

10,0 0 0 ,0 0 0

1920 1921

CHECKS HANDLED

1922

COLLECTION ITEMS HANDLED

19

TRANSFERS OF FUNDS

20

PAYMENT OF INTEREST
ON RESERVE DEPOSITS
Reserve Banks are organized for service and not for profit.
To pay interest on re serve deposits it would be necessary
for reserve banks to maintain large earning assets. For
example, in 1922 their earning assets would have had to
average $ 1,800,000,000 to enable them to pay expenses,
2 % interest on deposits, and 6 % in dividends. T h e ir
earning a s s e ts during that year actually averaged
$1,187,000,000. In other words they would have had to
keep over $600,000,000 additional constantly invested
to enable them to pay interest.
It is obvious that they could not have done this without
entering into active competition with member banks.
Moreover, such a practice would curtail their ability to
accommodate member banks with discounts as needed.

21

REPORTS ON BUSINESS CONDITIONS
Each reserve bank keeps in close touch with business and
agricultural conditions in its district and publishes monthly
reports for free distribution. These reports, which are
largely sum m aries of facts ascertained at first hand,
are issued in the interest of better business through
the dissemination of sound information.
The Federal Reserve Bulletin, published by the Federal
Reserve Board, contains extensive and authoritative
information on finance and trade throughout the world.

22

CHIEF SUPPORT OF BILL MARKET

F ederal r es e r v e Banks and F oreign T rade
FEDERAL RESERVE BANK

MONTHLY
PUBLICATIONS

FOREIGN
TRADE
BANK

A cceptances Executed in U S during 1922 (esti $4,000.000.000
Of which F ederal reserve Banks Purchased 4 9 % - t .aoo.ooo
948

23

R e se r v e R e q u ire m e n ts U n d e r S ta te L a w s
States printed in red do not permit state member banks to substitute
reserve requirements of Federal Reserve Act.
Figures in parentheses refer to footnotes

D istribution

R eserves required to be held upon
RESTRICTIONS

A labam a:
A ll banks

Demand
deposits

Aggregate
deposits

None

15%

-

None
50,000 or over
under 50,000

__

__

H

Vs

—
—

__

20%
15%

None
100,000 or over
50,000-99,999
Under 50,000

__

__

__

18%
15%
12%

—

—
—

M

H
H

Vs

H
Vs
Vs
U

(38)

None

-

None
N one

5%

__

Vs
Vs
Vs

5%

-

5 % (38)
—

(3)
(4)
(3)

H

(5)

H

—

Vs
Vs
Vs

(38)

15%

—

10%
—

20% (2)
25%
20 %

Vi
Vi
Vi
Vi

V (39)
(39)

H

__
—

12%

None
None
None

Vi
Vi
Vi
Vi

5%
—
--- —

(38)

V

—

—
—

C olorado:

Savings banks
Reserve agents (35)
Other banks

—
—

Balances
with de­
positaries

-

—

Cash in
vault

__

None
None

C a l if o r n ia :

Savings banks
Commercial banks

-

__

—

10%
20%
15%

A r k a n sas:

Reserve agents (35)
Other banks

Savings
deposits

_

A r iz o n a :

Savings banks
Other banks

Tim e
deposits

%

(1)

C o n n e c t ic u t :

State banks and trust com­
panies
D

elaw are:

Hanks and trust companies
Savings banks

_

5 % (38)
—

F l o r id a :

All banking companies

None

20%

-

-

-

(6)

G e o r g ia :

All banks

None

15%

-

5 % (7)

State banks
Trust companies

None
None

(38)

5 % (7)

_

I daho :
15%
15%

—

Vo
Vs

(8)

—

(38)

Vs
Vs

I l l in o is :

Ranks and trust companies

Chicago
Elsewhere

25 % (9)
15% (9)

—

I n d ia n a :

All banks and banking com­
panies

None

12H % (10)

—

—

(38)
(38)

(38)
(38)

-

-

(38)

(38)

Io w a :

State banks, trust com- 1
panies, and savings |
banks doing commer­
cial business
J
Other savings banks
K

—

20%
15%

None

—

ansas:

State banks
(

11 )

( 12 )
Trust companies
K

3,000 or over
Under 3,000

50,000 or over
Under 50,000
Under 50,000
Under 1,000
None

8%
8%

8%
8%

M o
M o

xM o

—

—

8%

M o

17 o
A

10%
10%
7%
25%

3%
3%
3%
3%
10%

—
—
—

—

_
—
----—

7%

_

H

H
H

H

1A o
7

2
A
H

■

?$

(14)

M (13)
*$(14)

Vs

entu cky:

State banks and trust com ­
panies

Central reserve
cities (15)

13%

3%

—

H

V

Reserve
cities (15)
Elsewhere

—

10%

—

—

7%

3%
3%

—

H
H

V
H

None

-

20%

-

-

Vs ( 1 6 )

H

L o u is ia n a :

State banks
M

a in e :

Trust and banking com­
panies

None

15% (17)

-

24

-

-

-

All (18)

R e se r v e R e q u ir e m e n ts U n d e r S ta te L a w s
R eserves

D
r e q u ir e d to b e h e l d u p o n

is t r ib u t io n
o f R eser ve s

P o p u l a t io n

RESTRICTIONS

M

aryland:

State banks
Trust companies
M

a ssach u setts:

Trust companies

M

ic h ig a n :

Commercial banks
Savings banks
M

in n e so t a :

State banks
M

i s s i s s ip p i :

State banks
M

M

None
None
In Boston!
within 3 1
miles of [
State House J
Elsewhere
100,000 or over
Under 100,000
None

Savings
deposits

Cash in
vault

Balances
with de­
positaries

-

H

2
A
All (19)

-

Yu (20)

H (20)

15%

H (20)

H (20)

—

(38)
(38)
(38)

(38)
(38)
(38)

M
Vi

H
H

(38)
(38)

(38)
(38)

V\s
H
(38)

1Vis

(21)
(21)

(21)
(21)

Aggregate Demand
deposits deposits

—

15%
15%

-

20%

Time
deposits

20%
12%
12%

-

-

—

—

-

Res. cities (35)
Elsewhere

-

15%
12%

5%
5%

Over 50,000
Elsewhere

-

25%

10%

10%

1-5%

7%

7%

200,000 or over
25,000 to 199,999
Under 25,000

-

18%
15%
15%

-

is s o u r i :

State banks and trust com­
panies

ontana

:

State banks

Res. cities (35)
Elsewhere

-

—

15%
10%

-

-

STATES PRINTED IN RED DO NOT PERMIT STATE
MEMBER BANKS TO SUBSTITUTE RESERVE
REQUIREMENTS OF FEDERAL RESERVE ACT.

25

Ys
(38)

R e se r v e R e q u ir e m e n ts U n d e r S ta te L a w s
R eserves

RESTRICTIONS

N

ebrask a:

State banks
Savings banks
N EVADA:
Reserve agents (35)
Other banks
Savings banks and trust
companies not doing
general banking business

r e q u i r e d to b e h e l d u p o n

Aggregate Demand
deposits
deposits

D

is t r i b u t i o n
of R e serves

None
None

25%
i5% ;

None

15% (37)

None
None

—

None

12%

: —•
—•

' —
—

ft
ft

ft
ft

ft

ft

10%

None

---—
—

■

20%
15%

Savings
deposits

—
—

--- - . '
---- •

Over 25,000
Elsewhere
None

—

—
—

5%

Cash in
vault

Balances
with de­
positaries

Time
deposits

n
ft
(38)

Vs
ft
(38).

N e w H a m p s h ir e :

All banks
N

ew

Jersey:

State banks
Trust companies
N ew M

e x ic o :

All banks
N

ew

Y

ork:

State banks
«

Trust companies

“

“
“
Private bankers
“
“

Boroughs of
2,000,000
or over
Boroughs of
1,000,000
to 1,999,999 (23)
Elsewhere
Boroughs of
2,000,000
or over
Boroughs of
1,000,000
to 1,999,999 (23)
1st and 2nd
class cities
under
1,000,000
Elsewhere
Cities of 1st class
Elsewhere

—

—

ft.

ft

—
—

—•
—

Vs
H

Vs
Vs

--- -

—

(25)

All

ft (24)

ft

f t (24)
f t (24)

ft
ft

15%

% (24)

ft

13%

Vis (24)

M3

—

15% (22)
15%

—

18%
15%
12%

—

—

—

—

10%
10%
15%
10%

—
—
—
—

—
—•
—
—

?7 (24)
5
V o (24)
Mo
Mo

Vs
Mo
Vl 0
Vl 0

None

—

15%

—

5%

(25)

(38)

None

—

20%
10%

8% (26)
7%

5% (27)

ft
Vs

Vs
Vs

None

15%

Vis
demand
Vis
time

'V is
demand
[V is
time

Vl 5
demand
Vi o
time

ftis
demand
V o
time

—

—
—

N orth C a r o l in a :

Banks and trust companies
N orth D akota :
Savings banks
State banks
O h io :

Commercial banks

15%

O klahoma: (28)
State banks
“
“
Reserve banks
Savings banks not doing
general business

10%

—
----

Savings banks and trust
companies
20%
15%
20%

—
—
—

—

—

---—

ft
ft
ft

2
/l5
ft
ft

20%

Over 2,500
Under 2,500
None

—

—

—

ft

f t (6)

15%

10%

10%

Oregon:

State banks and trust companies

None

All banks
R

hode

ft

H

f t demand
time (30)

P e n n s y l v a n ia :

f t demand (29)
time (30)
Vs

None

—

15% (22)

7f t

None

15%

—

—

—

ft

None

—

7%

3%

—

(38)

(38)

None

20%
17 ft%

—

—

—

(38)
(38)

(38)
(38)

I slan d:

State banks and trust companics
So u th C a r o l in a :

All banks
South D

akota:

Reserve banks (35)
Other banks

’

26

R e se r v e R e q u ir e m e n ts U n d e r S ta te L a w s
R

e s e r v e s r e q u i r e d to b e h e l d u p o n

P o p u l a t io n
RESTRICTIONS

T

Time
deposits

Savings
deposits

is t r ib u t io n
of R eserves

Cash in
vault

Balances
with de­
positaries

en n essee:

State banks and trust com­
panies
T

Aggregate Demand
deposits
deposits

D

None

_
_

10%

_
_

_
_

(38)

(38)

None
None

—

15%
20%

—

—

(38)
(38)

(38)
(38)

50,000 or over
Under 50,000
None

—

15%

34

—

—

—

Vs

10%

—

—

—

None

—

15% (10)

—

3%

None

—

10%

3%

—

(38)

(38)

None

15% (33)

_

_

_

(38)

(38)

exas:

Banks— capital $25,000
or over
Other banks
Utah:

Commercial banks
Savings banks

20%

—

—

Vs
Vs

34

H

V erm ont:

All banks
V ir g in ia :

State banks (32)
W

est

(29)

V ir g in ia :

State banks and trust com­
panies
Savings banks
W

Vs

a s h in g t o n :

State banks and trust com­
panies
W

34 (31)

None

5% (34)

All (34)

3
A
—

—

—

None

20%

—

—

—

(38)

(38)

«

12%
—

_
_

_
_

—

—

—

5%

(38)
(38)

(38)
(38)

10%
10%

(38)
(38)

(38)
(38)

i s c o n s in :

Reserve banks
Other state banks and
trust companies
Mutual savings banks

2
/~

15%
—

W y o m in g :

Commercial banks and
trust companies
Savings banks

None

20% (36)

(1) Or in U. S. bonds.
(2) Deposits other than savings.
(3) 6% deposits may be in Liberty bonds.
(4) 7 )4 % deposits may be in Liberty bonds.
(5) 34 of balances may be in approved bonds.
(6) Or approved bonds.
(7) Reserve against time and savings deposits may be in unpledged U. S. or Georgia bonds.
(8) Not less than 5% as cash in vault.
(9) Ruling of auditor— not state law.
(10) Commercial deposits payable on demand and subject to check.
(11) Banks having 20% or more of deposits due to banks.
(12) Banks having less than 20% of deposits due to banks.
(13) 34 of reserves as cash with approval of banking commissioner.
(14) U. S. bonds and demand loans secured by U. S. or municipal bonds accepted as reserve.
(15) As designated by Federal Reserve Act.
(16) Member banks’ balances with Federal reserve bank accepted as cash in vault.
(17) Including deposits subject to notice within 10 days.
(18) 34 may be in U. S. or Maine bonds.
(19) y3 may be in bonds.
(20) Yi of cash and )4 of balances, or in all % of total reserve, may be in approved bonds.
(21) Such portion of reserve as directors may determine may be on deposit with approved reserve agents, balance
in cash.
(22) All items or claims payable on demand.
(23) If bank does not have office in borough of preceding class.
(24) Prescribed percentage may be on deposit with Federal reserve bank.
(25) No requirements as to cash in vault; all may be carried with reserve agents.
(26) Total deposits on time certificates.
(27) Deposits subject to notice as provided by law.
(28) No specific law exists permitting state member banks to substitute Federal reserve in lieu of state requirements,
but state authorities do not criticize such substitution.
(29) 34 of balances may be in approved bonds.
(30) 34 in approved bonds, % in cash or balances.
(31) 34 of cash may be deposited in bank in same town or county.
(32) State law by implication permits state member banks to comply with reserve requirements of federal
Reserve Act.
(33) Reserve of 100% required against uninvested trust funds.
(34) Set aside from profits and held as cash.
(35) As defined by state law.
(36) Liability to depositors other than savings.
(37) D e p o s its in banking or com m ercial departm ent.
. .
(38) Reserves consist of cash in vault and balance with approved reserve agents, no provision being made for
definite distribution between the tw o .

.

(39) Upon approval of banking commissioner one-half of reserves may be in bonds or other obligations of the
United States.

27

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