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FIRST ANNUAL REPORT

M. B. WELLBORN
CHAIRMAN OF THE BOARD A N D FEDERAL
RESERVE AGENT

FEDERAL
RESERVE B A N K
OF ATLANTA
(

DISTRICT No. 6 )

TO THE

FEDERAL
RESERVE BOARD
WASHINGTON, D. c.







OFFtCERS AND DIRECTORS

FEDERAL RESERVE BANK
OF ATLANTA
DISTRICT NO. 6

DIRECTORS :
CLASS “A”

”Llewellyn P. Hillyer, Macon, Ga.
Frank W. Foote, Hattiesburg, Miss.
Warren H. Toole,,Winder, Ga.

December 3 , 1915
1
December 31, 1916
December 31, 1917

CLASS “E”

’* John A. McCrary, Decatur, Ga.
W. H. Hartford, Nashville, Tenn.
Paul H. Saunders, New Orleans, La.

December 31,1915
December 31,1916
December 31, 1917

CLASS “C”

t Edw. T. Brown, Atlanta, G a
W. H. Kettig, Birmingham, Ala.
M. B. Wellborn, Anniston, Ala.

December 31, 1915
December 31, 1916
December 31, 1917

* (Subsequently re-elected for three years).
i (Subsequently re-appointed for three years).

‘ OFFICERS:

M. B. WELLBORN,

-

*-

-

Chairman of the Board and
Federal Reserve Agent.

- - - - Governor
W.H.TOOLE, - - - - - Secretary.
J:B. PIKE, - - - - - - Cashier
JOE. M. SLATTERY, - - - Assistant to Federal Res.
Agent and Deputy -Sec’y.
M. W.BELL, - . - - - Assistant Cashier
W.S.GRAVFjS - - - - - Auditor
JOS. A. McCORD,

-

Member Advisory Council :
CHAS. A. LYERLY, Chattanogga, Tenn.
General Counsel :
HOLLINS N. RANDOLPH, Atlanta, Ga.




(-

Z H E following Telegrams were among the
many of congratulation and felicitation
received on the day of formal opening of the
Federal Reserve Bank of Atlanta :
Washington, D. C.. Nov. 16th. 1 9 1 4

M. B. WELLBORN,
Chairman of the Board of Directors,
Federal Reserve Bank o Atlanta,
f
Atlanta, Ga.
Please present to Governor McCord and your Board of Directors my felicitations and the assurance of my earnest
desire a t all t i m e s to d o what may be within my power t o
help the Federal Reserve Bank of Atlanta fulfill i n the
highest measure the fondest hopes entertained for it by the
Federal Administration, the Bank’s own officers and the
public.
(Signed) JOHN SKELTON WILLIAMS,
f
Comptroller o the Currency

Washington, D. C., Nov. 16th. 1914
Federal Reserve Bank of Atlanta,
Atlanta, Georgia.
f
The Comptroller of the Currency a t the close o business
on November 1 4 t h , having executed the Certificate author.
izing the Federal Reserve Bank of Atlanta to commence
business, I have this-morning signed the announcement t o
be mailed to all member banks o the establishment of your
f
bank and this will be your authority t o place i n the mail
f
copies o t h e announcement sent you for this purpose.
(Signed) W. G. McADOO,
Secretary of the Treasury




3

FIRST ANNUAL REPORT
TO THE

FEDERAL
RESERVE BOARD
FROM

DISTRICT NO. 6-ATLANTA

M. B. WELLBORN.
CHAIRMAN A N D F L D L R A L R L S L R V L A G E U T

OI:FI('E

OF PEDERAI,

RESERVE hGES'I1.

As chairman of the board of directors and Federal Reserve Agent since the opening of the bank,
on November 16, 1914, my entire time has been
devoted to the duties of my office. I have been
assisted in the general routine work of the office by
Mr. Joe M. Slattery, Assistant to Federal Reserve
Agent.
I n addition to receiving collateral incident t o the
issuance of Federal Reserve notes, work is occasioned
by deposits of gold to reduce liability f o r outstanding circulation; and on account of the large amount
of agricultural paper handled, with cotton receipts
attached, there is a daily transaction in substitution
of collateral, necessitated by the sales of cotton and
withdrawal of cotton receipts pledged.
The total note issue of our bank up t o this date,
December 31, 1915, amounts to $18,950,000, and by
comparison with the issue of other Federal Reserve
Banks i t is second in amount, and stands first in
m o u n t , taking into consideration the proportion of
our capital stock to that of other Federal Reserve
Banks. This proportionately large issue of our
bank is due to the fact that a great deal of currency
is required for use in moving the cotton crop, which
currency prior to the establishment of t h e Federal
Reserve Bank was obtained by the member banks
from reserve cities. Our bank being within a short
distance of each member bank, the difference in the
cost of shipping, either by mail or express, constitutes quite a saving in expense and also a great
convenience, since the banks a r e able to get the
currency in much less time.
Against the issue of Federal Reserve notes I am
holding $4,751,245,69 in collateral, being commercial
paper rediscounted by the member banks with the




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Federal Reserve Bank of Atlanta. In addition t o this
collateral the Federal Reserve Board holds to the
credit of the Federal Reserve Agent at Atlanta $14,800,000 in gold transferred from the gold settlement
fund.
EARLY ORGANIZATION OF THE BANK.

At the organization of the bank, owing to the
depression throughout the United States due to the
European war, business within the sixth Federal
reserve district was almost paralyzed; the cotton
crop was in process of marketing, and Europe, no
longer a purchaser, had previously absorbed more
than one-half of this product. The banks and merchants were, of course, unable to make their usual collections, and business was in a chaotic state. The
decision of the Federal Reserve Board t o have the
Federal Reserve Banks open f o r business on November 16, 1914, greatly restored confidence, so that
by the time the Federal Reserve Bank of Atlanta
opened; t h e member banks did not find it necessary
to offer u s rediscounts t o any great extent. I n
addition thereto, the member banks in our district
had obtained Aldrich-Vreeland emergency currency
to the extent of $22,000,00, and had taken advantage
of the lower rates offered by the banks in the large
financial centers, as the result of the establishment
of the Federal reserve system.
The physical organization of the Federal Reserve
Bank was similar to t h a t of any other pioneer movement, and consisted simply in working out the details
as they presented themselves. The $22,000,000 of
Aldrich-Vreeland currency obtained by the member
banks of this district had served to tide over the
credit necessities of the district f o r several months
prior to the opening of our bank. The difficulties
experienced in the early operation of the Federal
Reserve Bank were due largely to lack o f a thorough knowledge of the intent and meaning of the
Federal Reserve Act and of the class of paper eligible for rediscount. The solution of these problems
involved much correspondence with the member
banks. Another question involved was the difficulty
in obtaining uniform warehouse receipts and insurance sufficiently specific to identify the product
pledged. This problem has been practically solved.
A t points of concentration where the movement
of cotton is too rapid to permit of the deposit of
receipts with this bank, custodians have been appointed, under adequate bond, to hold and exchange
the securities supporting paper rediscounted with
this bank. The prevailing custom of loans to cotton
merchants on demand paper gave rise to the necessity of rebating on paper withdrawn before maturity, in order to allow t h e unhampered sale of
tlw commodity previously pledged.




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The effect of the work of the Federal Reserve
Bank has been to reduce the rates of rediscount;
to give the member banks the assurance of a place
of rediscount at reasonable rates, and the knowledge
that they could obtain currency when needed. It has
stabilized the value of the commodities of the district ; the quality of loans by member banks is much
improved; bankers are rewiring better paperpaper that will be liquidated at maturity-with
a
view to eligibility at the Federal Reserve Bank.
Of the member banks in the district 49 are borrowing from their correspondents and have not
applied for rediscount with this bank. To these
banks I addressed the following letter:
“In analyzing the credit needs and conditions of
member banks in this district we notice from your
last report of condition to the comptroller that you
a r e using outside funds.
“Inasmuch as you have never availed yourselves
of the rediscount facilities of the Federal Reserve
Bank of Atlanta, we are anxious to ascertain if
there be any‘specific reason f o r your not allowing
this institution to serve you in this capacity.
“We are desirous of having the thorough cooperation of the member banks, and would be glad
to have a frank expGession from you along this
line.”
With one exception, nearly all of the banks to
whom the above letter was addressed express no
dissatisfaction with the Federal Reserve Bank.
Some state they prefer to borrow in New York, a s
heretofore, believing it involves less trouble, while
others say they can obtain a lower rate in New York
than they can with us, the one exception stating
that the Federal Reserve Bank should, in their opinion, accept paper of any character when offered by
a member bank.
INTERNAL ORGANIZATION OF THE DANK.

A complete set of by-laws was adopted by our
board of directors at its first meeting, a copy of
which is hereto attached. By referring to the powers
and duties of the executive committee, it will be
noted that the management or administration of
the bank is largely left with this committee. The
said committee is composed of the governor, who is
chairman of the committee, the Federal Reserve
Agent, and one director. The directors serve in
monthly rotation, being selected by the board of
directors a t its regular monthly meetings. Thus
the governor of the bank and the Federal Reserve
Agent are in continuous service on this committee.
This plan works admirably, and the whole committee is in thorough touch with the workings of the
bank. The executive committee meets daily for the
consideration of all discounts offered by member




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banks. When the directo?. serving on the committee
lives some distance out of town and is unable t o
attend the daily meetings of t h e executive committee, he usually selects a director who lives in Atlanta, or very close by, t o act in his stead.
The official staff of t h e bank is composed of the
following:
Governor .................................
Secretary (acts only at board meetings).
Deputy secretary?
Cashier
Assistant cashier ..........................
Manager credit bureau
Auditor
--1
---Discount clerk).

Salary.
$9,000
25

.....
........................
...................................
3,600
2,500
2,400
2,400
1,800

.....................
...................................
...........................
--__ .
c

The discount clerk has a staff of clerks with
salaries ranging from $480 to $1,200 p e r annum.
Including this staff of clerks and officers, the
total number of employees is 27. Our bank having
to handle so large a number of rediscounts, the
force is constantly a t work, frequently into the
night, during the autumn and winter seasons.
DEPUTY FEDERAL RESERVE AGEKT.

When i t is necessary for the Federal Reservc
Agent in Atlanta to be absent from the city for a
week o r more, he so advises the deputy Federal
Reserve Agent, in writing, requesting him to serve
in the interim a s Federal Reserve Agent. F o r such
service he is allowed the same compensation, per
dicm, as that received b y the Federal Reserve Agent.
Other than this, the deputy Federal Reserve
Agent in Atlanta has no specific duties, and receives
no compensation, except the duties and compensation of a regular director, serving as a member of
the board of directors and as a member of the
executive committee.
I>EPl;T\- (;OVERSOR.

A t the time of the organization of this bank il
deputy governor was elected to serve without compensation, but in view of the ruling of the Federal
Reserve Board as to the ineligibility of member bank
officials serving as deputy governor of this bank,
our board of directors, at their meeting on June 11,
1915, in accepting the resignation of the deputy governor, voted not to select a deputy governor (an
active deputy governor being unnecessary) ; and
further voted that the director serving on the executive committee, each month, be designated gov1 Per month.
? T h e depnty secretary rcceivcs n salary of
S2,400.M per aniiiim :is Assistnnt to t h e Pcrleral Reserve Agent.




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ernor pro tempore and to act as governor during
the absence of the governor of the bank. For such
services, as governor, he receives the same compensation allowed the governor.
BOARD OF DIRECTORS.

The board of directors meet once a month, and
during the first year of the board’s existence it was
found necessary to remain in session two consecutive days at each meeting; but beginning with the
second year a session of one day’s duration has been
found sufficient. While the class A and class B
directors are in closer touch with the viewpoint and
affairs of the member banks, the class C directors
are no less attentive to the welfare of the banking
interests of the district, and, their positions being
appointive, probably act with a little more independence than the other directors.
EXECVTIVE COMMITTEE.
LOANS AND DISCOUNTS.

In the early days of the operation of our bank
it was feared that some difficulty would be experienced in handling the rediscounts offered by member
banks-a fear relieved by experience. The executive
committee, in handling the offerings of constantly
borrowing banks, are as considerate of them a s is
consistent with safety and prudence; but notes a r e
frequently returned for various reasons, the most
prominent of which are:

I. Ineligibility.
11. A too distant maturity.
111. Continued renewal.

IV. Poor mercantile ratings, or othe? unfavorable information.

V. A too liberal line of credit extended t o
customer.
The Federal Reserve Bank of Atlanta has, since
its opening, discounted 22,252 pieces of paper
amounting to $35,013,287.67. This large volume of
discounts necessarily requires close and steady work,
as our executive committee examines carefully each
day the condition of the borrowing banks, and each
piece of paper offered for rediscount; also the volume
of the member bank’s transactions with the Federal
Reserve Bank of Atlanta, incIuding the average
balance maintained, date of the first offering, maximum accommodation extended, date of liquidation,
if any, maximum accommodation subsequently extended, amount outstanding, proportion of paper
secured by collateral, and pending maturities.
This bank has not deemed i t wise, except at its




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New Orleans branch, t o engage in open market
operations to any great extent, as we have had, at
all times, a fairly full line of discounts, this being,
in our opinion, the primary object of the law-to
first accommodate the member banks in extending
to them rediscounting privileges. It is our intention, however, to go into the open market for business whenever our loanable funds are idle, in order
to take care of current expenses and make our own
rates effective when i t becomes necessary.
DIVISIOS OF WORK-GOVERNOR
ANI) FEDERAL RESERVE AGENT.

The division of work in this bank between the
governor and the Federal Reserve Agent is rather
evenly balanced, both giving their entire time to the
business of the institution. While i t is generally
understood that the operation of the bank is under
the management of the governor, still, in practice,
this is not exclusively true. The by-laws of the
bank provide, under article 2, section 2, paragraph
H, that to the executive committee is delegated the
power “in general to conduct the business of the
bank, subject to the supervision and control of the
board of directors.” A s chairman of the board of
directors, I a m necessarily a regular member of the
executive committee and am, therefore, called upon
to participate in the joint management of the bank.
These duties, in addition to attending to t h e correspondence with the Federal Reserve Board, and
having custody of t h e Federal Reserve notes and
collateral deposited with me to secure the issuance
thereof, add largely to the contemplated duties of
the Federal Reserve Agent. The duties of t h e Federal Reserve Agent at Atlanta have been further
increased by the establishment of the branch bank
in New Orleans. Relations existing between the
governor and Federal Reserve Agent are most pleasant and agreeable.
POIVERS O F TRUSTEE, EXECUTOR, ADMIYTSTR?\TOR,
ASD REGISTRAR OF STOCKS MI)
noms.

In recommending that permission be granted to
applying member banks to a c t as trustee, executor,
administrator, and registrar of stocks and bonds,
we have adopted the plan of presenting such applications to the board of directors at its regular
monthly meetings. A s chairman of the board of
directors, I obtain as a preliminary all t h e information available from t h e chief bank examiner for
the district and other sources and present same to
the board of directors with the application. If acted
upon favorably, the application is forwarded to your
board, accompanied by such information as we have
obtained, with the recommendation t h a t i t be
granted.




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(

LE.\RIY(; SSSTE3.I.

Our bank has earnestly endeavored to co-operate
with t h e Federal Reserve Board in putting into effect
the voluntary clearing system proposed by your
Board, but the result h a s not been satisfactory.
The system was inaugurated on April 10, 1915.
membership was voluntary, and items were received
only from those banks which agreed to permit their
accounts to be charged with checks on themselves,
subject to final payment. The system began operntion with 67 members, 15 joining later, and 9 withdrawing, leaving a present membership o f 73, o
E
which 21 are located i n reserve cities.
The number of items handled daily has averaged
440, of which 207 have been on banks in the district
outside of Atlanta, 204 on banks in Atlanta, and 29
on banks in other Federal reserve districts. The
principal objections raised by the member banks
are: (1) They can not anticipate the drawings,
hence the difficulty of maintaining their reserves
when checks a r e charged to their accounts; (2) they
object to giving up exchange charges, which i t has
been their custom to make; (3) owing to the limited
number of points covered, none being outside the
district other than Federal reserve cities, the volume
of items they send in f o r credit must, of necessity,
be small; (4) since the Federal Reserve Banks will
not accept their checks on nonmember banks, which
a r e in the majority i n this district, balances must be
maintained with reserve correspondents, in order
to have such items collected.
The effect of the system has not been to reduce
exchange charges, either by the banks themselves
or by the two country clearing houses in the district,
Arlanta and Nashville. The charges in this district
run from $1.50 to $2 per $1,000, the average being
$l.G3 per $1,000 f o r the entire district.

The Federal Reserve Bank of Atlanta receives
f m m its members, a t par, subject to deferred credit,
exchange on points outside of the district. It also
makes transfers, by maiI, outside t h e district without cost, and pays checks on itself coming from
other ciistricts, without charge, provided the volume
of exchange deposited by any member bank during
the current month equals the amount o f the transfers made for thal bank and incoming checks from
other E'ederal Reserve Banks. The charge on the
difference, if any, is based on the cost o f shipping
currency to the gold fund to cover, provided such
shipments have to be made. We have not endeavored
to make a profit on our exchange transactions, believing w e should aive thls service t o our members




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A
without cost, provided me can so do without Ioss
to ourselves.
ATTITUDE OF STATE BANKS.

A canvass of the attitude of the State bankers
toward the Federal Reserve System develops the fact
that while every thoughtful State banker fully
realizes that the system to which he has in no way
contributed has been indirectly of great benefit to
his institution, he is hesitant about joining a system
of which his ideas are more or less vague. He is
familiar with the limitations of the State laws
under which he operates, but unfamiliar with the
National Bank and Federal Reserve Acts and in
many cases exaggerates the extent of their requirements. The State banks are accustomed to transact
business at fixed rates of interest and are not in
sympathy with any movement which may tend to
decrease their profits through changes in interest
rates, and, further, i t wilI no doubt be difficult to
engage the attention of the majority of State bankers so long as the period of easy money continues.
R[-SISESS

C o s n r n o s s O F THE s r x m FEDERAL RESERVE DISTRICT.

A t the time of the inauguration of the Federat
Reserve System the genera1 business conditions of
the district were undergoing a most demoralizing
depression, and especially was this true in agricultura1 lines. The South had produced the largest
cotton crop in its history and a correspondingly
smal1 F a i n crop; the cotton exchanges were closed,
exports cut off, causing a depreciation in value unti1
the market price was beIow the cost of production
and trade in our main staple aImost a t a standstilI.
The establishment of the Federal Reserve Bank
and its public announcement that it intended to lend
all the assistance within its power to aid the producers was the strongest factor in dispelling the
gloom and doubt. I n this work the Federal Reserve
Bank had the hearty co-operation of the member
banks of the district.
The unusual conditions caused a holding back of
the 1914 crop and the marketing of it in the late
winter and spring of 1914-15,thereby necessitatinR
the most rigid economy, especialiy among the agricnltnral element of our population. Snch conditions
brought most forcefully to the mind of the Southern
farmer the imperative need of crop diversification,
with the result that the ,1915 crops showed an increase of approximateIy 70,000,000 bnshels in corn.
wheat, and oats, with a n increase in the rice crop of
approximately 5,000,000 bushels, with more cattle
and hogs than any previous season, and for the first
time t h e cotton crop of the South may be classed




(121

t o some extent as a “surplus-money crop.” The
decrease of approximately 5,000,000 bales in the 1916
crop and the establishment of a 3 per cent commodity rate to member banks for money loaned to
the farmers a t 6 per cent were the strong elements
in causing and maintaining the favorable prices of
cotton, and the commodity rate has been especially
effective in the holding and marketing of the crop.

The tobacco growers of both Tennessee and
Florida were compelled to carry over a greater portion of their 1914 crop on account of difficulty in
delivery and high ocean rates, and to the producers
of this commodity the Federal Reserve Bank has
rendered valuable aid in assisting them to hold their
ci-op for a more favorable market.
The iron industry has received a strong impetus
within the past few months and the movement in
this and kindred industries is shonger t h a s for
several years past. Activity is general throughout
the district, covering a multiplicity of lines, and business conditions appear exceedingly bright.
ESTABLISHMENT OF A BRANCH OF THE FEDERAL RESERVE BANK OF ATLANTA AT NEW ORLEANS, LA.

The policy of the board of directors o f this bank
was not favorable to the establishment of branch
&inks until we had thoroughly developed the business of the parent bank. In view of the commercial
importance of New Orleans and its distance from
Atlanta (approximately 500 miles) the board of
directors decided to recommend to the Federal Reserve Board the establishment of a branch at New
Orleans, to be known a s the New Orleans Branch
of the Federal Reserve Bank of Atlanta.
The branch bank was opened for business on
September 10, 1915. Its territory comprises t h a t
part of the sixth district in the States of Louisiana
and Mississippi, and the banks in the Counties, of
Mobile and Baldwin, Alabama. The expenses of
the branch bank at New Orleans for the first year’s
operation are guaranteed by the member banks in
the city of New Orleans.

A duplicate of the accounting system of the Atlanta bank is used in the New Orleans branch, and
the auditor of the Federal Reserve Bank of Atlapta
and the examiners for the Federal Reserve Board
make periodical examinations of its accounts. Daily
reports are made to the Federal Reserve Bank o f
Atlanta, with copies to the Federal Reserve Board.
On Friday of each week the statements of the branch
are telegraphed to Atlanta and incorporated in the
weekly statement of the Federal Reserve Bank of
Atlanta.




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.
-

-

As Federal Reserve Agent, I appointed a “representative of the Federal Reserve Agent, at New
Orleans,” to represent m e in transactions involving
the issuance of Federal reserve notes, which action

qas approved by the board of directors of the New
*leans

/

/

branch and the Federal Reserve Board.

Upon my request to the Board, the Comptroller
of the Currency deposits Federal reserve notes with
the Assistant United States Treasurer at New Orleans, subject to the order of the Comptroller of the
1 Currency. Upon notice f r o m my representative a t
! New Orleans that collateral has been deposited, an
order for Federal reserve notes is forwarded to the
I
1 Federal Reserve Board and transmitted t o the As. sistant United States Treasurer at New Orleans,
:who delivers the Federal reserve notes t o the man< a g e r of the New Orleans branch. My representa‘ tive handles only the collateral and records incident
to the transactions.

/
.

-

CREDIT NEEDS Ofi THE DISTRICT.

/--

The ability of the Federal Reserve Bank and of
the southern banking organizations to move the cotton crop and to properly finance the preparation of
cattle f o r the market has demonstrated t h a t the long
anticipated relief from seasonai financial pressure
has been realized. The great progress in diversification of crops for t h e p a s t two seasons clearly indicates the willing response to broadening effort, this
response being limited only by the great need of an
adequate supply of capital t o prepare for and finance
the improvements necessary to profitably grow and
market crops which have heretofore been grown
to a limited extent only.
Iron and steel industries have no lack of funds
for current needs, including the movement of their
products and t o finance reasonable extensions and
for improvements. The naval-stores industry has
suffered severely for the whole season f o r lack of
necessary funds. This is a peculiar industry in that
the greater part of operating capital is expended in
labor; therefore, while t h e result can be accurately
forecast, this expenditure is not represented by
tangible assets which can be made the basis for
financial negotiations. The industry is sadly in
need of some kind of coalition and organization that
would tend to stabilize prices and promote confidence
in financial circles. The rapidly diminishing area
adaptable to the production of these articles and the
increasing foreign and domestic normal demand indicate t h a t this industry should be conserved if this
country is t o receive the returns to which it is entitled from what has been and is still a natural and
valuable asset. The lumber industry is in better




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financial position, and for the immediate future appears to be in a fair position so f a r as the sale of
the product is concerned, but has suffered severely
€or a period running back to the depression in 1907,
during which time billions of feet of valuable timber
have been manufactured and sold without profit.
Any comprehensive plan of conserving the wealth of
our natural resources should by all means include
some feasible plan of finance which would enable
manufacturers to keep their timber supply inactive
during periods of slack demand and low prices,
rather than to follow the present system of exhausting this valuable asset to cover carrying charges.
The prominent distinction between such industries
and agriculture and mining is that agricultural products are produced seasonally, and new mineral deposits are constantly discovered, adding to the already tremendous known quantity of that source of
wealth, with the fair assurance that yet undiscovered
mines will place the probability of exhaustion f a r
remote; while on the other hand the timber area is
known, the amount fairly accurately determined, and
the end of a n important industry foreseen. All of
which clearly points to the necessity of careful study
o€ the wasting of this resource through press of
necessity occasioned by lack of capital and credit.
The immediate and crying need of the district is
financial encouragement for new enterprises. Money
is plentiful for established demand, but any attempt
to promote new activity or even to re-establish lines
of effort which have been idle through the past depressions meets with little or no encouragement.
Although everywhere are seen the essentials of prosperity, there appears to be a strong undercurrent of
uneasiness and disbelief in its solidity or permanency. Under these conditions substantial progress
is, of course, impossible. What stimulus is necessary to a resumption of normal and progressive
enterprise is not apparent unless it be the allaying
of. uncertainty regarding the outcome of the European war and of a n unanalyzed, yet ever present
fear of the remote possibility that our own Nation
may become involved therein.
EARNINGS OF NATIONAL BANKS OF SIXTH DISTRICT.

A resume of the earnings of the national banks
of this district presents a most interesting subject
which the general public has had little opportunity
t o examine and about which an almost universal
mistaken idea exists. That the net earnings of the
banks of the district fall short of the returns accruing to other lines employing a similar capital and
energy has, of course, been well known to those
whose life work has been along this line of activity,
But in the mind of the general public there exists




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a n impression so greatly a t variance with the facts
that a wide publicity and a clearer understanding of
the comparatively meager profits realized would no
doubt do much to create a closer and more sympathetic relation between the banks of the district and
their customers. Moreover, in view of the fundamental and sweeping changes in our financial structure contemplated and effected by the Federal Reserve Act, a clearer and more appreciative general
understanding of the difficulties attendant upon the
operations of the banking business is highly desirable, if not almost essential, to the purpose of securing the full measure of co-operation necessary to
effect the broad and salutary reforms for which
this system was designed.
The following tabulated analysis of earnings is
arranged in groups according to invested capital
(i. e., capital, surpIus, and undivided profits):
Invested capital:
Net earnings.
Less than $50,000.. . . . . . . . . . . . . p
$50,000 to $100,000
$100,000 to $200,000
$200,000 to $300,000
$300,000 to $500,000
$500,000 to $1,000,000..
Over $1,000,000..

er cent.. 6.13

................do .... 7.6
...............do .... 8.6
...............do .... 7.9
...............do .... 6.3
...........do.. .. 6.36
.................do. ... 7.63

I might add, in conclusion, that the policy o f the
bank has been to issue as many Federal reserve notes
as possible and to put up gold with the Federal Reserve Agent to reduce outstanding liability. I n this
manner the Federal Reserve Bank has been able to
accumulate gold, which the officers of the bank believe is the correct policy to pursue. It is thought
highly desirable that ultimately our bank have on
hand only gold and gold certificates and put Federal
reserve notes out for circulation into the channels
of commerce.
Respectfully submitted,
M. B. WELLBORN,
Chairman of the Board and Federal Reserve Agent.
Atlanta, Ga., December 31, 1915.




,

STATEMENT OF OPERATIONS
OF

FEDERAL RESERVE BANK OF ATLANTA
I INCLUDING N E W ORLEANS BRANCH

)

TO DEC. 31. 1915
EARNINGS
___
Earned discount on Bills Discounted-members .....................
$230,020.43
Earned Discount on Bills Purchased ...........................................
88.63
Earned Interest on Investments
................................

Earned Commissions ....................
(Warrants)
Earned from other sources ..........
TOTAL EARNINGS-

; : : ; ; ; 91

--& && ..
& . A,

4,608,73
$236,460.37

EXPENSES
Organization Expenses (including our proportion of expenses
of Federal Reserve Board at
Washington from their organization to June 30th 1915,
$ 23,597.22
$8,342.05)....................................
Current expenses, cost of operation (including our proportion of expenses of Federal
Reserve Board at Washington
from June 30, 1915 to Dec 31,
1915, $4,831.60; also office of
Federal Reserve Agent and
Chairman of the Board) .......... $103,440.30
Cost of manuf're of Federal Res.
Notes used ($18,950,000.00) .... $ 24,573.70
Depreciation charged off cost of
furniture and equipment
(33% per cent.) ....................... - $ 2.316.76
TOTAL EXPENSES
$153,927.98
$ 82,532.39
NET PROFITS

In addition to the above our books
also show an income from
Unearned discount ................... $ 35,170.82
Unearned interest on invest$
850.32
ments ..........................................
TOTAL
$ 36,021.14
The average maturity date of
our discounts is Feb. 16th:
Total amount of bills discounted
for member banks to date........ $35,013,287.67
Total amount of bills discounted
26,938,994.42
paid to date ..................................
Total amount of bills now under
8,074,293.25
discount ........................................
Total number of banks accommodated ...........,.... 248
386
Total number of banks in district........................
Total number of notes discounted ......................... 22,252
Atlanta, Ga., January 3rd, 1916
The foregoing is a correct statement as shown by the
books of this bank at the close of business Dec. 31st, 1915.
JOS. A. McCORD, Governor
(17)