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Sixth Annual Report

Federal Reserve Bank
of New York
For the Year Ended December 31, 1920

Second Federal Reserve District




Sketch of Liberty and Nassau street corner of proposed new
bank building of the Federal Reserve ltank of New York




Sixth Annual Report

Federal Reserve Bank
of New York




For the Year Ended December 31
1920

Second Federal
Reserve District

LETTER

OF

TRANSMITTAL

FEDERAL RESERVE BANK
OF NEW YORK

New York, March 1, 1921.

SIR: I have the honor to submit herewith the sixth annual report of the Federal
Reserve Bank of New York, covering the
year 1920.
Respectfully,
PIERRE JAY,

Chairman and Federal Reserve Agent

Hon. W. P. G. HARDING,

Governor, Federal Reserve Board,
Washington, D. C.




Table of Contents
P A G E

Directors a n d officers

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I.

Review of business a n d credit conditions in 1920

II.

B a n k operations

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S t a t e m e n t of C o n d i t i o n

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Fiscal a g e n c y operations

A p p e n d i x

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6-20

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21-54

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22-25
26-31
3 2
33-36
3 7
38-39
40-43
44-47
48-49
50-53
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4 - 5

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Income and Disbursements .
.
Loans and Investments during 1920 .
R a t e s of Discount
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Federal Reserve Currency
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.
Subtreasury at N e w York
Reserve Position
Collections and Clearings
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Relations with Banks
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Foreign Relations .
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O r g a n i z a t i o n of t h e B a n k
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T h e Buffalo Branch
III.

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55-60
6 1 - 9 5

Federal Reserve Bank
of New York
DIRECTORS AND OFFICERS, JANUARY, 1921
DIRECTORS
PIEBRE JAY, New York City

LESLIE R. PALMER, Croton-on-Hudson,

Chairman
GEORGE

FOSTER

N . Y.

PEABODT, Saratoga

WILLIAM L. SAUNDERS, Plainfield, N . J.

Springs, N. Y.

CHARLES SMITH, Oneonta, N. Y.

Deputy Chairman

CHARLES A. STONE, New York City

JAMBS S. ALEXANDER, New York City

ROBERT H. TREMAN, Ithaca, N. Y.

RICHARD H. WILLIAMS, Madison, N . J.

MEMBER OF FEDERAL ADVISORY COUNCIL
PAUL M. WARBURG, New York City

OFFICERS
,

General Officers
B E N J . STRONG, Governor

J. HERBERT CASE, Deputy Governor

GEORGE L. HARRISON, Deputy Governor

Louis F. SAILER, Deputy Governor

EDWIN R. KENZEL, Deputy Governor

DUDLEY H. BARROWS, Secretary

JAY E. CRANE, Assistant Secretary
EDWARD H. HART, General Counsel

Senior Officers
J. HERBERT CASE,

JOSEPH D. HIGGINS,

Controller of Foreign Relations, Pro
tern.. Controller of Loans, Pro tern.
ARTHUR W. GILBART,

Controller of Cash and Custodies
j WILSON JONES,
Controller of Fiscal Agency Function*

Controller of Administration

LAURENCE H. HENDRICKS,
Controller at Large, Controller of
Collections, Pro tern.



EDWIN R. KENZEL,

Controller of Investments, Pro tern.
LESLIE R. ROUNDS,
Controller of Accounts

DIRECTORS AND OFFICERS, JANUARY, 1921—Continued
Junior Officers
WALTER B. MATTEBON,

GILBERT E. CHAPIN,

Manager, Certificates of Indebtedness
Department and Manager, Securities Department

Manager, Loan Department
CHARLES H . COE,

Manager, Check Department
JAY E. CRANE,

HENRY R. MURRAY,

•

Manager, Collection Department

Manager, Foreign Department

ROBERT M. O'HARA,

EDWIN C. FRENCH,

Manager, Investment Department

Manager, Custody Department

JOHN E. RAASCH,

BETnuNE M. GRANT,

Manager, Methods and Supplies Department

Manager, Government Securities Sales
Department
WILLIAM A. HAMILTON,

JAMES M. RICE,

Manager, Cash Department

Manager, Government Bond Department

HOWARD M. JEFFERSON,

Manager, Personnel Department

LESLIE R. ROUNDS,

Manager, Accounting Department, Pro
tern.
Manager at Large
I. WARD WATERS, Manager, Service Department

ADOLPH J. LINS,

Auditor
FRANCIS OAKEY, Acting General Auditor
EDWARD L. DODGE, Manager, Auditing Department
HARRY ARTHUR H O P F , Organization Counsel

Federal Reserve Agent
PIERRE JAY, Federal Reserve Agent
SHEPARD MORGAN, Assistant Federal Reserve Agent
"
RALPH T. CRANE, Manager, Member Bank
WILLIAM H. DILLISTIN, Manager, Bank
Relations Department
Examinations Department
CARL SNYDER, Manager, Statistics Department

BUFFALO BRANCH
Directors
E. J. BARCALO, Buffalo, N . Y.

CLIFFORD HUBBELL, Buffalo, N . Y.

FRANK L. BARTLETT, Olean, N. Y.

THOMAS E. LANNIN, Rochester, N . Y.

RAY M . GIDNEY, Buffalo, N . Y.

ELLIOTT C. MCDOUGAL, Buffalo, N . Y.

HARRY T . RAMSDELL, Buffalo, N . Y.

Officers
RAT M . GIDNEY, Manager
WALTER W. SCHNECKENBURGER, Cashier
HALSEY W. SNOW, J R . , Assistant Cashier




PER CENT,

300

1915

1916

1917

1918

1919

Volume of National bank loans compared with the course of wholesale
prices in the United States (Department of Labor index). Average prices
for 1913 are taken as the base, 100 per cent.




Sixth Annual Report of the
Federal Reserve Bank of New York

BUSINESS AND CREDIT CONDITIONS
IN 1920

T

HE operations of the Federal Reserve Bank of New York
during 1920 were carried on under conditions so exceptional
that a review of the business and credit conditions which
prevailed throughout the year will greatly facilitate an understanding of the matters dealt with in this report. In many respects
the year will stand out as one of the most remarkable in the financial
and economic history of the United States. As will be seen from
the diagram on the opposite page the long rise in both commodity
prices and the volume of credit reached its culmination in 1920,
and at no time during the period of the rise, or indeed ever before
in peace times, had the upward course of prices and credit proceeded so rapidly as during the twelve months preceding the
reversal which occurred in 1920.
Commodity Prices
The rise in prices, which began shortly after the Armistice,
continued until May, and for that month the Department of
Labor index of wholesale commodity prices was 35 per cent, above
March of the preceding year. But even prior to the high point in
May there were notable declines in a number of leading staples,
such as silk, wool, hides, and furs. In April came the panic in
Japan which, as in 1907, proved to be the forerunner of financial
and commercial difficulties in many other parts of the world.
Almost simultaneously, price declines began in all the leading commercial nations, at least in raw commodities. It was clear that the
peak of the great rise had been reached, and the downward tendency
brought to a sudden end the heavy speculation in many commodities
which the long rise in prices had invited and stimulated. It also




8

SIXTH ANNUAL REPORT

brought about a flood of cancelations of orders and revealed a
situation the extent of which had been but little realized. For the
rising prices, and especially their acceleration in the autumn and
winter of 1919-20, had not only induced heavy speculation in raw
commodities but had created among merchants and manufacturers
a state of mind in which, fearful lest they might not obtain the
desired volume of goods, they placed orders far in excess of their
real requirements. This apparently overwhelming demand compelled many manufacturers to allocate to their customers only a
certain percentage of their orders. But when the turn came, the
false basis of the demand soon became evident to both buyers and
sellers. Not only did new orders shrink to a minimum, but orders
already placed were canceled in large volume and vast amounts of
goods were rushed into shipment to avoid cancelations. The
difficulties of the situation and the congestion of goods which
occurred were considerably heightened by the disturbed conditions
of transportation, both by sea and by land, which prevailed in the
winter and spring.
Although in April and May there was a slight movement among
department stores towards reduction of prices, generally speaking
however, retail prices gave way relatively little during 1920. At
the close of the year the National Industrial Conference Board
estimated a decrease of 10 per cent, in the cost of living for families
of moderate means. But the prices of raw materials, especially
those having an international market, fell more generally and with
increasing severity as the summer and autumn advanced. An index
of twelve basic raw materials* maintained by this bank reached
its peak about the middle of May and at the end of December
showed a decline of 40 per cent. The diagram on the opposite page
indicates the similarity of the movement of this index with a like
index maintained by this bank of the British prices for twentyfive raw materials.
Such a steady and finally violent fall in commodity prices, accompanied by cancelations of orders, shrinkage of demand, and
greatly reduced production, not only injected elements of confusion
and uncertainty into commerce, industry and agriculture, but in
many cases entailed heavy losses. The seller's market which had
prevailed for several years was suddenly transformed into a buyer's
market. Instead of competition between buyers, competition
between sellers was re-established. Many of those who had been
over-trading on insufficient capital and conducting their increasing
business too largely on banking credit suddenly found themselves
over-supplied with goods and over-extended in credit. Under
these circumstances the attitude of banking and other creditors
*Cotton, hides, hogs, rubber, copper, Bngar, wheat, corn, pig iron, lead, petroleum and lumber.




FEDERAL RESERVE BANK OF NEW YORK
P

CENT.

400

ENGLAND

300

UNITED STATES

200

100
JAN- FEB MAR APR MAY JUN JULY AUG 5fP OCT- NOV- PEC
Price indices for 1920 of basic raw materials in England and the United States.
(1913 average=100 per cent.)

has been almost invariably helpful and constructive. Extensions
have been readily granted where a concern had good management
and a good record, and was in a condition justifying such a course.
Management by creditors' committees, or reorganizations by
agreement with creditors, have taken the place of what would
usually have been a long list of confessed failures and receiverships.
Credit
The diagram on page 6 shows that coincident with the rapid
increase of prices during the twelve months ended February, 1920,
the volume of bank loans also increased rapidly. But after February
loans increased very much more slowly, and toward the end of the
year they actually declined. But the diagram shows that during
1920 bank loans neither rose nor fell as fast as did commodity prices.
It was in New York City that bank loans showed their first
tendency to fall, following the decline in stock exchange values
which occurred in the autumn of 1919. Loans of New York City
member banks reached their maximum on October 10, 1919, almost




10

SIXTH ANNUAL REPORT

precisely a year before the loans of the banks in other parts of the
country reached their maximum. During 1920 New York City
bank loans declined $320,000,000, whereas the bank loans of the
749 member banks in other parts of the country which report
weekly to the Federal Reserve Board increased about $350,000,000.
New York City bank deposits declined $470,000,000 in 1920 and at
its close were down $505,000,000 from their high point reached
September 19, 1919.
But while bank loans in this Federal Reserve District were less
at the close than at the beginning of the year, they fluctuated
widely meantime, in response to the unusual demands which were
often made on those New York City banks which do a nationwide
business. Not only did these banks have to take care of the requirements of their local customers, but any additional credit pressure
arising elsewhere in the country was immediately reflected in their
loans. Besides lending large sums to their mercantile, manufacturing, and other customers in all parts of the country, the amounts
which they were called upon to lend to out-of-town banks were the
largest on record, even greater than they were before the Federal
Reserve system was established.
Nothing will better illustrate the ebb and flow of credit in this
district and the heavy strain to which the New York City banks
and the Federal Reserve Bank of New York were at times subjected
than the following series of transactions occurring during the last
three months of 1920, which are typical of the movements in credit
during each of the three preceding quarterly periods, culminating,
on the fifteenth days of March, June and September, with the
income and excess profits tax payments, the maturity of large issues
of certificates and the sale of fresh issues of certificates.
1. The deposits of the principal banks in New York City decreased
$470,000,000 from October 14 to December 6, on account of
Government and commercial withdrawals.
2.
These withdrawals caused a steady tendency for gold to be
drained from the Federal Reserve Bank of New York to other
Federal Reserve Banks. For the three months ended December
17, the potential loss of gold aggregated $337,000,000.
3.
But this adverse flow of gold was in fact offset by Government
transfers to New York, by the sale of certificates of indebtedness
by New York banks to other Federal Reserve Banks and by sales
of acceptances and rediscount operations between Federal Reserve
Banks.
4.
These rediscount operations comprised the following:
On September 29, other Federal Reserve Banks owed the
Federal Reserve Bank of New York $19,000,000. By October
6, payment of these loans was completed. On October 29, the
Federal Reserve Bank of New York owed other Federal Reserve
Banks $48,000,000. By December 15, repayment of these loans
was completed.




FEDERAL RESERVE BANK OF NEW YORK

11

Between December 8 and 15 the deposits of the principal New
York banks rose $407,000,000, in connection with the following
transactions:
1.

Certificates of indebtedness were redeemed and paid in this
district in the amount of $344,000,000, which was $124,000,000
more than the taxes paid.
2.
This excess of redemptions over taxes on December 15 necessitated as usual a loan by this bank to the Government. The amount,
• $74,000,000, was gradually repaid and was extinguished on December 28.
3.
The banks of the district on December 15 increased their deposits $212,000,000 when they paid for their subscriptions to the
new issues of certificates by crediting that amount on their books
to the account of the Government.
In connection with the foregoing transactions centering around
the December 15 tax payment date:
1.
The principal banks of New York City reduced their borrowings
at the Federal Reserve Bank between December 8 and 16 by
$187,000,000.
2.
As tax checks were collected and as the banks sold certificates
of indebtedness to their customers, deposits began to decline, and
by December 28, had fallen off $174,000,000.
3.
Simultaneously the banks began to increase their borrowings at
the Federal Reserve Bank, and by December 28 such borrowings
had risen $138,000,000.

This period of three months, involving such heavy movements of
funds, came at a time when the demands for credit are usually at
their highest. It also coincided with the most severe declines ever
experienced in commodity prices and with great business uncertainties and discouragement. Such a combination of events would
almost certainly have resulted in disordered credit conditions had
there not been a countrywide organization adjusted both to permit
the free flow of funds where credit requirements summoned them,
and to set in motion counter movements of funds as well, thus
maintaining the equilibrium of the credit structure and assuring
borrowers at all times an adequate supply of funds at steady rates.
Thus complete credit elasticity was maintained throughout the
year. And the knowledge by the banks that an organization was
functioning which could maintain credit equilibrium and elasticity
and which, with their cooperation, was gradually bringing credit
under control, enabled them to face with confidence what proved
to be one of the most difficult and trying years in our financial
history.
The way in which credit elasticity was maintained and credit
was sent where it was most needed, is graphically illustrated by the
following diagram which shows for the year 1920 the reserve percentages of each of the Reserve Banks before giving accommodation
to other Reserve Banks or receiving accommodation from them.




12

SIXTH ANNUAL REPORT

While the reserves of all these banks were actually kept at or above
the legal minimum of 40 per cent, on notes and 35 per cent, on
deposits by means of rediscounting between Federal Reserve
Banks where necessary, the lines in the diagram show what the
reserves would have been had each Reserve Bank operated purely
as an independent institution, relying only upon its own reserves.
The diagram illustrates particularly clearly the heavy seasonal
assistance which Reserve Banks in the agricultural sections require,
and shows the Federal Reserve Bank of New York at times as a
lender and at times as a borrower.
i

70
CO
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J
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40
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70

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60

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50

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10

10

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JAN

APR

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70

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Pi*

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10

RICHMOND
V

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1

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1

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50

20

Vs
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OCT

CLEVELAND
60

PHILADELPHIA

NEW YORK

BOSTON

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OCT-

K.AN3A3 CITY

APR-

MINNEAPOLIS

ST. LOUIS

DALLAS

u
- VV
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SAN FRANCI5CO

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Reserve percentages
http://fraser.stlouisfed.org/ of Federal Reserve Banks each week in 1920 as they would
have appeared if no borrowing had taken place between Federal Reserve Banks
Federal Reserve Bank of St. Louis

FEDERAL RESERVE BANK OF NEW YORK

13

But in the reserve percentage of the entire Federal Reserve
system, shown in the block at the bottom of the diagram, there
were no such wide fluctuations as occurred in the percentages of the
individual banks. While reserves in individual banks fell as low
as 9 per cent, and rose as high as 81 per cent., the reserves of the
system as a whole fluctuated between the narrow limits of 45.8
per cent, and 41.4 per cent. There could be no better evidence of
the unity of the system brought about by the rediscounting operations between the twelve Reserve Banks which are carried on when
needed under the direction of the Federal Reserve Board. These
operations were effected instantly over private telegraph lines and
settled for daily through the Gold Settlement Fund. Thereby,
the twelve reserve banks, for all purposes requiring the extension
or transfer of credit between various sections of the country, became
in effect a single reservoir of credit. And through these operations
it was possible to maintain a degree of equilibrium in credit heretofore unknown in the United States.

Rates and the Money Markets
The higher interest rates prevailing throughout 1920 were a
natural sequence of the increasing credit demands which resulted in
a rapid increase in bank loans in the latter part of 1919 and the
early months of 1920, and a correspondingly rapid decrease in the
reserve ratio of the Federal Reserve system. Rates were also
probably influenced by the successive increases of discount rates
which the Reserve Banks made, beginning November, 1919, in
order to bring the unprecedented expansion of credit under control,
and in order that the official discount rates might reflect more
correctly existing credit conditions and open market rates. For by
January 23, 1920, when the Reserve Bank rate for commercial
paper was advanced to 6 per cent., the open market rate for commercial paper had already been 6 per cent, for several weeks. And
on June 1, when the Reserve Bank rate was advanced to 7 per
cent., commercial paper had been selling for a fortnight at IY2 P e r
cent, and for a month before at 7 per cent. The Federal Reserve
Bank in its circular announcing the increased rates effective June
1 stated that the action had been taken
"in order that bankers, their customers and the public generally may find in the discount rates of this bank a reflection
of existing credit conditions."
Shortly after June 1, 1920, the rate in the commercial paper
market rose to 8 per cent, and remained there till the closing weeks
of the year, when an easier tendency developed.




14

SIXTH ANNUAL REPORT

During 1920 important changes, other than rate changes, occurred
in the money markets. The open market for bankers acceptances,
commonly called bills, was greatly developed and an open market
for Treasury certificates of indebtedness was created. Both bills
and certificates meet the most rigid requirements of safety and
ready convertibility into cash, and the development of active
markets for both was greatly facilitated by the higher interest
rates which have recently prevailed.
There are now four principal markets in which banks and others
are accustomed to invest their surplus funds for short periods;
namely, the markets in:
Commercial paper
Call loans
Bills
Certificates of indebtedness
The following reflects briefly the conditions at present prevailing
in each of these markets.
COMMERCIAL PAPER MARKET. The volume of commercial paper
offered through brokers, after increasing almost steadily for fifteen
months, began in February, 1920, to decrease almost equally
steadily, sellers of paper evidently preferring to borrow from their
own banks rather than to pay the rates demanded by banks with
surplus funds to invest. The volume of commercial paper which
eleven of the principal dealers had outstanding in February, 1920,
was $1,150,000,000. At the close of the year this volume had
declined to $850,000,000. Throughout the year the paper offered
was absorbed almost entirely by interior and country banks, as
the New York banks, with but few exceptions, were heavy borrowers
from the Federal Reserve Bank.

While commercial paper has long been considered one of the
principal mediums through which banks might invest their surplus
funds for short periods, yet in discussing the four markets through
which this may now be done, it will be important to point out
certain fundamental differences which exist between the various
markets. The market in commercial paper, for example, is only a
one-way market. Commercial paper once bought by a bank cannot
be resold in the paper market except by special arrangements with
the brokers from whom it was bought. The purchaser of commercial
paper can normally realize upon it or convert it into cash only by
indorsing it and rediscounting it with another bank or with a
Federal Reserve Bank.



FEDERAL RESERVE BANK OF NEW YORK

15

CALL MONEY MARKET. Money loaned on call to members of
the New York Stock Exchange can normally be converted into cash
within twenty-four hours without the lenders' incurring any liability
in doing so, although as is well known, there have been times when,
as a practical matter, call money could not be so converted.

Until a few years ago, call money was the only investment of
presumably instant convertibility and the rates for call money were
generally considered indicative of the volume of available surplus
funds. But recently, with the development of the open markets
in bills and in Treasury certificates of indebtedness, both representing instruments which are now instantly convertible and which
in volume far overshadow the call money market, the latter has
become less of an indicator of credit conditions. Another factor
operating against the importance of the call money market in this
respect is that loans on securities other than United States Government securities are not available as a basis for credit with the
Federal Reserve Bank, and investors, in addition to requiring for
their current funds an investment of undoubted convertibility in
the open market, now want the additional protection of an investment which, if the open market fails, can be converted into cash
at a Federal Reserve Bank. Still another factor tends to diminish,
for the present, at least, the importance of call money rates as
credit indicators. This is the heavy borrowing of the member banks
from their Reserve Banks. For presumably such surplus funds as
they gradually accumulate will generally be used for paying off
loans at their Reserve Banks rather than for investment, merely
for profit, in any of the four markets under discussion.
The volume of funds absorbed by the call money market declined
almost steadily throughout 1920 and, as in the case of the absorption
of commercial paper, the great bulk of the lending was done by outof-town banks and institutions. Seven per cent, might be said to
have been the prevailing rate during the greater part of the year
although in the early months and in some other periods much higher
and widely fluctuating rates prevailed.
BILL MARKET. Throughout the year the estimated volume of
bankers and indorsed foreign trade acceptances has remained steady
at about $1,000,000,000, in spite of the decline in commodity prices
and of the slackening of trade in the autumn with South America
and the Orient. Discount houses and dealers in bills in New York
City report a steadily broadening market for bankers acceptances
during the year, not only among savings banks, commercial banks
and trust companies, but also among insurance companies, industrial




16

SIXTH ANNUAL REPORT

corporations and private investors having funds which they wish to
place in an investment combining satisfactory rate, minimum risk
and instant convertibility. The market for bills was by no means
confined to the larger financial centers. Through the efforts of
dealers, bankers, and Federal Reserve Banks, many purchasers of
bills have been found in smaller centers and even in country districts
throughout the United States. Bills placed with such investors
have been almost entirely those bearing no banking indorsement.
In 1920, as in previous years, the Federal Reserve Bank of New
York, with the support of some of the other Reserve Banks, has
stood ready at all times to purchase such bills as the market would
not absorb, provided they bore satisfactory banking indorsement.
The Federal Reserve Bank of New York has also, from time to time,
by means of purchase and resale agreements, made short advances
to dealers in moderate amounts, at times when they found difficulty
in carrying their portfolios of bills at rates bearing some relation to
the current bill rate. In this way it has been made possible for
dealers readily to purchase bills as they were created, and at steady
rates—both prerequisites for the development of a reliable discount
market. In this respect the bill market has been in sharp contrast
with the rate fluctuations of the call money market.
During the year the discount market made distinct progress
towards independence of Federal Reserve Bank support. The
higher rates which prevailed in the latter half of the year attracted
not only much private and corporate money to make its first investment in bills, but a considerable volume of the funds of foreign
banks as well. The consistent maintenance of a free gold market
in the United States and the confidence inspired by the demonstrated ability of our open discount market to function at all times,
have together made this country a highly desirable market for the
investment of foreign funds. In the aggregate, the transfer of
foreign funds and their investment in bankers acceptances and
United States certificates of indebtedness have constituted an important contribution of capital to our markets. As a result of the better
demand and distribution the investment of the Federal Reserve
Bank of New York in bills decreased from $209,000,000 on January
2 to $110,000,000 on December 30, or 47 per cent. The investment
of all Federal Reserve Banks in bills decreased from $575,000,000
on January 2, to $256,000,000 on December 30, or 56 per cent.
The bill market is a two-way market. A buyer of well known
bankers acceptances has been able throughout the year to resell
them instantly, without indorsement, to houses dealing in bills.



FEDERAL RESERVE RANK OF NEW YORK

17

CERTIFICATE MARKET. Although the $3,260,000,000 of Treasury
certificates of indebtedness, exclusive of special certificates and Pittman Act certificates, which were outstanding at the first of the
year, were largely held by investors rather than banks, no open
market existed for such certificates, and a purchaser wishing to
realize upon them before maturity was obliged to re-sell them to the
banks from which he purchased them. The banks in return would
borrow upon them from the Federal Reserve Bank.

In the early spring, owing to the increasing demands for credit
and the desire of many purchasers to convert large amounts of certificates into cash, it seemed advisable to attempt to create an open
market in certificates. This was undertaken with the two-fold
object of facilitating the sale of future issues of certificates, and of
relieving the banks from the burden of re-absorbing certificates
they had sold. Certain dealers in short time investments undertook
to effect a secondary distribution of certificates, purchasing them
from the banks and re-selling them to private investors and corporations having funds available for temporary investment. For a time
this bank, by means of purchase and resale agreements, facilitated
such operations by making moderate advances against certificates.
The development of the open market was greatly accelerated by
the action of the Treasury in offering certificates at rates which
attracted public buying at the time of the original issue. This
not only relieved the banks but in the latter half of the year resulted
in substantial over-subscriptions to each issue. Whereas in the
early months of the year certificates were frequently offered at a
discount and bids were difficult to obtain, at the close of the year
every outstanding issue, except the small maturity of March 15,
1921, bearing 4% per cent, interest, was selling freely at par or a
slight premium. At the opening of the year the member banks
throughout the country which report weekly to the Federal Reserve
Board, and which represent between 40 and 50 per cent, of the
banking resources of the country, held $857,000,000 of certificates
and at its close they held $272,000,000 of certificates, a decrease
of 68 per cent. During the year the volume of certificates which
were being borrowed upon at the twelve Federal Reserve Banks fell
from $462,000,000 to $188,000,000, a decrease of 59 per cent.




It

SIXTH ANNUAL REPORT
Government Financing

The expansion of credit and prices which occurred after the
United States entered the world war is attributed primarily to the
failure of the country to save currently the amounts which were
required to finance the war. To the extent to which certificates and
bonds could not be purchased out of current savings, the banks
either directly, or indirectly through loans to their customers, had to
absorb the balance. The volume of certificates held by the banks
of the country has been steadily decreasing and the record of 1920
has just been mentioned. The volume of loans which the banks
made to their customers secured by Liberty bonds and Victory
notes has also been decreasing steadily. The following diagram
shows a 31 per cent, decrease in such loans in both the New York
City banks and the reporting member banks already referred to,
the figures of which are an accurate reflection of banking conditions
generally.
MILLIONS
OF DOLLARS

2000

—»
^. —>_ JNTI KECOl JNTR

1000

— • - * - i

s

500

100

— —-_

—

*
»

ctw

_

JAN-

FE& MAR- APR-

MAY JUN

«

'OKK( :ITY
—v^. — » ^ _

JULY

AU6

5 E P - OCT NOV- DEC-

Volume of loans secured by United States war obligations held by reporting
member banks in New York' City and in the entire country each week in
1920 (logarithmic scale.)



FEDERAL RESERVE BANK OF NEW YORK

19

The following figures show the decrease in the gross Government
war debt during 1920.
Dec. 31, 1919

Total

$20,239,626,000

$19,511,761,000

$727,865,000

3,259,896,000
259,375,000
56,926,000
895,564,000

2,300,583,000
259,375,000
32,854,000
756,768,000

959,313,000
24,072,666
138,796,000

$24,711,387,000

Liberty Bonds and Victory
Notes
Certificates of Indebtedness:
Tax and Loan
Pittman Act
Special
War Savings Securities

Dec. 31, 1920

$22,861,341,000

$1,850,046,000

Decrease

Conditions at the Close of the Year
The following quotation from the 1919 report of this bank, read
after the foregoing review of business and credit conditions in 1920,
indicates how complete the reversal has been:
"Throughout the latter half of the year the supply of most
goods has been wholly inadequate to the demand; competition in
most industries has been non-existent; and the insistent demands
of a class of buyers without experience in prices and determined
to satisfy their desires regardless of price have resulted in a seller's
market. The year closed with the speculative demands for credit
somewhat decreased but with the demands of industry, at ever
increasing price levels, absorbing the credit released by lessened
speculation. The credit reservoir was at its lowest point and
average commodity prices at their highest."

Yet after the difficulties and discouragements which culminated
in the great autumn decline in commodity and security prices, a
slowing up of the drop in commodities, an up-turn in securities,
and a better inquiry for certain lines of goods, gave rise to some
encouragement as the year closed. Not a little of the encouragement
arose from a realization that the unprecedented price declines and
the losses, the shut-downs, and the unemployment they had occasioned, had all taken place without disarranging the financial
machinery of the country. Besides, the credit reservoir was several
points higher at the close of the year than at its opening, and to the
extent that this resulted from liquidation of loans it meant stronger
and healthier credit conditions. With many important raw materials selling at or below pre-war prices, and with some of them
selling at less than the estimated cost of production, it became evident that the next step in the readjustment would be the slower and
more difficult phase of translating the lower cost of raw materials



20

SIXTH ANNUAL REPORT -

into lower costs for finished goods, and at the same time readjusting
wages somewhat commensurately with actual reductions in the
cost of living. The substantial wage reductions which had occurred
in textile and other industries in the late autumn and which were
very generally accepted by the wage earners, gave promise that
other adjustments might be possible during 1921 and that really
lower living costs might be effected. The elasticity in credit which
had been maintained in 1920 was an assurance that during 1921,
unless wholly new and unexpected conditions should arise, credit
would continue to be available for the legitimate and necessary
requirements of commerce, industry and agriculture.




II
BANK OPERATIONS
STATEMENT OF CONDITION

T

HE statement of condition of the Federal Reserve Bank of
New York as of December 31,1920, as compared with that for
December 31, 1919, is given in brief form below. A more
detailed comparative statement appears in the appendix, page 62.
RESOURCES
Dec. 31, 1920
$473,411,574.47
144,759,115.20

Total resources

$1,062,734,197.78

$149,636,607.26

$257,774,709.82

$1,814,170,174.35

All other resources (chiefly uncollected checks).

202,902,609.54
69,028,300.00

$1,046,362,877.42

Total earning assets

$562,089,842.45
228,713,445.79

113,740,374.53
61,184,305.55

Bills discounted for members:
Secured by Government obligations
Secured by commercial paper
Bills and securities purchased:
Acceptances
United States securities

$595,355,279.21

$454,751,722.52
416,686,474.82

Total reserves

$549,161,628.71
46,193,650.50

$618,170,689.67

Gold
Legal tender notes, silver, etc

Dec. 31, 1919

$1,915,864,186.81

LIABILITIES
$82,787,106.04
11,297,895.88
702,431,237.92

$67,472,682.63
5,848,393.50
755,951,452.59

105,452,278.59

214,266,330.48

Total gross deposits

$819,181,412.39

$976,066,176.57

Federal Reserve notes (net)
Federal Reserve Bank Notes (net)
All other liabilities

$867,480,630.00
38,833,200.00
5,887,825.92

$807,615,970.00
54,673,000.00
10,036,357.61

$1,814,170,174.35

$1,915,864,186.81

Capital and surplus
Government deposits
Reserve deposits of member banks
All other deposits (chiefly checks deposited for
deferred availability)

Total liabilities



21

SIXTH ANNUAL REPORT

22

INCOME AND DISBURSEMENTS
The following statement gives in brief form the income, disbursements and disposition of profits of the Federal Reserve Bank of New
York for the years 1920 and 1919. A more detailed statement
appears in the appendix, pages 63 and 64.
INCOME
1920

Total

$49,839,182.52
8,323,050.37
1,975,648.96
387,439.92
369,204.84

$29,935,910.97
3,326,838.44
1,888,497.28
181,165.55

$60,894,526.61

From bills discounted for members
From bills purchased
From United States securities owned
Other income
Sundry adjustments

1919

$35,332,412.24

DISBURSEMENTS
1920
Operating expenses
Cost of Federal Reserve currency, etc.
Disposition of net profits:
Charged off on real estate
Added to various reserve accounts
Sundry adjustments
Dividends paid
Added to surplus
Paid U. S. Government as franchise tax.
Total disbursements.

1919

$5,782,204.40
1,217,050.64

$4,613,219.83
1,121,125.07

285,676.64
481,464.29
1,477,096.58
12,332,523.41
39,318,510.65

900,031.72
694,423.05
43,993.04
1,291,047.84
23,964,678.06
2,703,893.63

$60,894,526.61

$35,332,412.24

The disbursements for current expenses do not include the cost
of the departments performing fiscal agency functions for the
United States Government, aggregating $1,516,454.64, which has
been or is to be reimbursed to the bank by the Treasury Department.
While the operating expenses of the bank, including salaries,
were greater for the year 1920 than for 1919, yet a considerable part of this increase was owing to additions to the staff
made in the course of 1919, and to advances in salaries effective
on January 1, 1920. Aside from increased fixed charges, such as
rent, etc., the expense basis of the bank was slightly lower at the
close of the year than at the beginning. A much increased volume
of work in many departments was made possible by higher individual efficiency.




FEDERAL RESERVE BANK OF NEW YORK

23

Disposition of Profits
Net profits were $53,128,130 in 1920, compared with $27,959,619
in 1919. The increase is due to the larger volume of paper discounted at the higher discount rates prevailing during the year.
At the close of the year deductions were made from the net
profits of the bank to cover known items of depreciation and to
provide reserves for special purposes. The property acquired
during the year as a site for a storage and warehouse building was
written down $147,890.94, representing the appraised valuation of
the old buildings which stood upon it when purchased, and a
reserve of $100,000 was set aside against present high construction
costs. Certain preliminary expenses, aggregating $137,785.70, in
connection with the erection of the new bank building, were
charged off. The loss in value of the foreign balances of the bank,
based on market rates at the close of the year, amounting to
$106,164.69, was written down, as was also a further depreciation
of $25,299.60 in the value of United States securities held. An
additional sum of $250,000 was set aside in the fund which the
bank is accumulating to provide self-insurance in respect of losses
which may be incurred in future.
After these various deductions and the payment of 6 per cent,
dividends to stockholders, aggregating $1,477,096.58, an amount
was transferred to the surplus account sufficient to bring it to 100
per cent, of the bank's subscribed capital as authorized by law.
This transfer to surplus amounted to $7,963,800 and was the
equivalent of the increase in the bank's additional subscribed
capital during 1920. According to the amendment to the Federal
Reserve Act approved March 3, 1919, 10 per cent, of the remaining
profits was also transferred to the surplus account, bringing the
year's contribution to surplus up to $12,332,523.41. After these
deductions, there remained $39,318,510.65, which was paid to the
Treasury of the United States as a franchise tax. The sum so paid
in 1919 was $2,703,893.63.
In view of the large increase in the income of this bank for 1920
over 1919 and of the much larger franchise tax paid to the United
States Treasury for 1920, it is important that the nature of the
earnings of the Federal Reserve Bank should be fully understood.
These earnings are a direct measure of the credit expansion or
inflation which our war financing necessitated. They are also a
direct measure of the utility of the Federal Reserve Bank in providing such credit as business conditions necessitated. The Federal
Reserve Bank is a semi-public institution organized and operated
not for the purpose of making profits, but to stabilize credit and
keep it elastic, and to issue such circulating notes as the business




24

SIXTH ANNUAL REPORT

of the community requires. Its surplus earnings, which are derived
from the credit-making and note-issuing power granted to it by
the Government, accordingly revert to the Government.
The reason why the Federal Reserve Bank shows such large
earnings is because the Government does not tax it, but in lieu of
taxes takes the major part of its earnings. A governmental grant
of note-issuing power to any institution or set of institutions,
especially when such notes are of an emergency nature, is quite
generally accompanied by a heavy tax.
Under the Aldrich-Vreeland Act, which prior to the Federal
Reserve system provided emergency currency, the Government
taxed the banks upon notes issued under the terms of the act at
rates running from 5 per cent, up to 10 per cent. Under the Federal
Reserve Act the member banks, which borrow from the Federal
Reserve Banks mainly to obtain currency, in effect pay a similar
tax in the shape of the rate of discount charged upon their borrowings. This rate, or tax, does not go directly to the Government,
but goes to its note-issuing agency, the Federal Reserve Bank,
which after paying expenses and 6 per cent, dividends turns over
to the Government in the form of surplus earnings the discount
it has received. If the Government, following the principles of
the Aldrich-Vreeland Act, had during 1920 assessed a direct tax of
7 per cent, on the Federal Reserve Bank of New York in respect of
that portion of its Federal Reserve notes not covered by gold, the
amount of the tax the Government would have thus directly
received would have approximated very closely the amount it
actually did receive, indirectly, from the surplus earnings of the
Federal Reserve Bank.
Federal Reserve Bank earnings when transferred to the Government may be used by it only to place additional gold behind the
greenbacks or to retire Government bonds. In this way, the
earnings go directly toward correcting the inflation which called
the earnings into existence. Presumably, as inflation subsides, the
volume of Federal Reserve notes required for hand to hand currency will gradually lessen and both the discounts and the earnings
of Federal Reserve Banks will lessen correspondingly.
The following diagram shows the distribution of the gross income
of the Federal Reserve Bank of New York during 1920.




FEDERAL RESERVE BANK OF NEW YORK

25

£ ^
SURPLUS
20.5 °/o
U.S. TREASURY
65.1 °/°

Distribution of gross income of the Federal Reserve Bank of New York
in 1920




2€T

SIXTH ANNUAL REPORT

LOANS AND INVESTMENTS
In 1920 the total loans and investments of the Federal Reserve
Bank of New York reached their highest point, as appears from
the following comparisons:
Low point of 1920, reached April 22, was
Low point of 1919, reached September 19, was. . . .
High point of 1920, reached November 1, was
High point of 1919, reached December 30, was

$986,000,000
734,000,000
1,166,000,000
1,079,000,000

Total on December 31, 1920, was
$1,046,000,000
Total on December 31, 1919, was.... 1,062,000,000
The course of the loans and investments of the bank during the
six full years of its operation is shown in the following diagram
which gives the figures for the last Friday of each month.
MILLIONS
OF DOLLARS

I £00

1000

1915

1916

1917

1916

1919

I9E0

Earning assets of the Federal Reserve Bank of New York




FEDERAL RESERVE BANK OF NEW YORK

27

Rediscounts and Advances
During 1920 the amount rediscounted for or advanced to member
banks fluctuated between $651,900,000, the low point, on March
17, and $1,006,800,000, the high point, on November 1. Many
of the larger New York City members borrow only for a single
day or for two or three days and renew their loans only for such
amounts as they actually need, thereby adjusting their reserve
positions almost daily to correspond with legal reserve requirements. This resulted in an enormous turnover of discounts and
advances, averaging about $160,000,000 a day, and aggregating
for the year over $50,000,000,000 as against $42,000,000,000 during
1919. The total amount of credit which the Federal Reserve Bank
was extending by way of rediscounts and advances to members
at the close of each week throughout the year will be found in the
appendix, pages 66 and 67.
The following table gives some of the interesting figures of
rediscounts and advances during the past three years:
1920
Number of applications
received
20,336
Amount of applications
accepted and discounted or advanced
upon
$50,539,428,847.71
Number of pieces of
paper discounted or
advanced upon
180,462
Largest piece of paper
discounted or advanced upon
$85,000,000.00
Smallest piece of paper
discounted or advanced upon
$14.72
Average size of notes
discounted or advanced upon
$280,055.79

1919

1918

23,237

$42,449,491,133.87
127,721

14,831

$24,535,538,457.77
129,038

$120,000,000.00

$135,000,000.00

$2.81

$5.02

$332,361.09

$190,141.96

As the year advanced progress was made by country banks and
by banks in the up-town and outlying sections of New York City
in extinguishing their indebtedness to the Federal Reserve Bank.
While this liquidation was going forward the large banks in lower
Manhattan doing a nation-wide business and subjected to large
demands for credit continued heavy borrowers at the Federal
Reserve Bank. Early in June, 361 out of 771 member banks were
borrowing from the Federal Reserve Bank. On November 20, the
number borrowing was reduced to 261. During December, however,
the number again increased, due to year-end demands.




28

SIXTH ANNUAL REPORT

As has already been said there has been a marked change in the
class of paper rediscounted or pledged to secure advances. Holdings
of paper secured by United States war obligations have declined
in recent months, and during December, 1920, averaged about
$160,000,000 lower than in December, 1919, reflecting not only
the constant absorption of Government securities by the investing
public and their removal from the portfolios of banks, but also the
smaller volume of certificates of indebtedness outstanding. On the
other hand, rediscounts of commercial paper have rapidly increased,
and during December, 1920, averaged $307,000,000 more than in
December, 1919. At the close of the year paper secured by Government war obligations constituted approximately 50 per cent, of
the total, as against 80 per cent, at the close of 1919. These proportions during December of each of the last four years are illustrated by the following diagram.

Per Cent.

Secured by

War Loans

Per Cent.

Secured by
Commercial Paper

1919
1920
Classes of security used as a basis for rediscounts and advances

Purchased Bills
During the year this bank purchased in the open market for its
own account nearly $1,700,000,000 of bankers acceptances and
indorsed trade bills, an increase of about $500,000,000 over the
aggregate for 1919. The increase was due in large part to the
shorter maturities purchased and the relatively larger turnover
which this involved. At the same time substantial amounts were
purchased for other Federal Reserve Banks, for member banks in




FEDERAL RESERVE BANK OF NEW YORK
29
this district and for foreign correspondents. The total amount of
bills purchased in the open market in 1919 and 1920 was as follows:
1919

1920

•
Pieces

Total

Pieces

69,961

$1,697,000,000

43,572

$1,211,000,000

36,276
4,825
4,791

731,000,000
42,000,000
103,000,000

28,584
873
867

740,000,000
8,000,000
25,000,000

115,853

For the account of this bank. .
For account of other Federal
Reserve Banks . . . .
For account of member banks
For account of foreign banks..

Amount

Amount

$2,573,000,000

73,896

$1,984,000,000

In 1920 this bank purchased acceptances from other Federal
Reserve Banks amounting to $11,000,000, and sold acceptances
to them out of its own portfolio amounting to $147,000,000. Of
these sales to other Federal Reserve Banks $70,000,000 were made
at their own request. Purchases for member banks and foreign
correspondents will be described more in detail elsewhere.
But of far greater interest than the total turnover of bills is the
volume of bills held by this bank and by the Federal Reserve system
as a whole. The following table, showing the decreasing amount of
bills so held as the year progressed, indicates the increasing breadth
of general investment buying, and the decreasing dependence of
the bill market upon Federal Reserve Bank support.
Date

1920
January 30. .
February 27.
March 2 6 . . .
April 30
May 28
June 25
July 30
August 2 7 . . .
September 24
October 29. .
November 26
December 30.

Owned by
Federal Reserve
Bank of New York

Owned by
All Federal
Reserve Banks

$191,215,000
231,257,000
196,484,000
160,431,000
179,372,000
189,342,000
135,195,000
100,523,000
94,783,000
88,546,000
77,990,000
109,902,000

$561,313,000
531,367,000
451,879,000
407,247,000
418,600,000
399,185,000
345,305,000
321,965,000
307,624,000
298,375,000
247,703,000
255,702,000

While the figures for the system show almost continuous decrease
during 1920, those of this bank show an occasional sharp increase,
due mainly to the greater activity in short bills in the New York
district, where bills approaching maturity are freely sold to the
Federal Reserve Bank.



SIXTH ANNUAL REPORT

30

The following table shows, as of the close of each year from
1915 to 1920, the volume of bills owned by the Federal Reserve
Bank of New York and by the Federal Reserve system as a whole,
and compares the latter with the estimated amount outstanding
in the country.

Date

1915
1916
1917
1918
1919
1920.

Owned by
Federal
Reserve
Bank of
New York

Owned by
All Federal
Reserve
Banks

Estimated
Amount
Outstanding

Percentage
Owned by
All Federal
Reserve Banks
to Estimated
Amount
Outstanding

$8,715,000
41,457,000
148,125,000
69,323,000
191,312,000
109,902,000

$23,013,000
127,497,000
275,366,000
303,673,000
585,212,000
255,702,000

$250,000,000
450,000,000
750,000,000
1,000,000,000
1,000,000,000

51.0
61.2
40.5
58.5
25.6

Under the money conditions which have existed during the year
the short bill rate has been consistently lower than the rate for
60 and 90 day maturities. This has resulted in a steady shortening
of the average time to maturity of the bills held by this bank, as
will be seen from the following statement of the average maturity
of the bill portfolio of the Federal Reserve Bank of New York.
January
1,
April
1,
July
1,
October
1,
December 31,

1920
1920
1920
1920
1920

42 Days
33
u
30
11
29
u
28

The minimum rates at which indorsed bills were purchased by
the Federal Reserve Bank of New York during 1920 were:
Date
January 1 to January 22
January 23 to January 26
January 27 to February 26
February 27 to May 4
May 5 to May 12
May 13 to December 31

Short Bills
4M%
5M%
5H%
VA%
5V2%

90 day Bills
5

%

sy2%
6
6

%
%

Further details of transactions in bills will be found in the appendix, pages
 73 to 75.


FEDERAL RESERVE BANK OF NEW YORK

31

Government Obligations Owned
The policy which this bank adopted at the outset of keeping its
direct investment in Government securities at a minimum has been
followed throughout 1920. The Government obligations owned
have been confined almost exclusively to three classes.
1. One-year special 2 per cent, certificates of indebtedness to
secure Federal Reserve bank note circulation. Throughout the year
the bank has held $59,000,000 of these certificates, purchased from
the Treasury under the authority of the Pittman Act.
2. Special Treasury certificates of indebtedness running for a
few days. During the year the bank has continued to purchase
from the Treasury temporary certificates of indebtedness running
from one to three days. These certificates have been purchased at
the quarterly tax periods, on days when heavy maturities of certificates occurred, or at other times of unusually large demands upon
the Treasury, in order to provide it temporarily with funds until
tax checks could be collected or funds could be transferred from
other districts or withdrawn from depositary banks. The purchase
of such certificates has been heaviest on the quarterly tax payment
dates because of the inevitable delay in handling and collecting the
tax checks and of the necessity for immediate payment of the large
amounts of the regular issues of certificates of indebtedness which
mature on such dates. The largest certificate purchased in 1920
was for $146,000,000 on September 15. In the appendix, page 76,
are shown the amounts of the several certificates purchased during
the year and the periods for which they were held.
3. Certificates of indebtedness held under sales contract. In
the years of war financing, the banks were called upon to purchase
certificates of indebtedness in very large amounts, and to nonmember banks and bankers who could not avail themselves of its
rediscount facilities the Federal Reserve Bank offered to purchase
such amounts of their certificates of indebtedness as they could
not themselves carry, provided they would agree to repurchase
them within 15 days. This offer has not been withdrawn, but with
the more active investment market for certificates, the extent to
which it has been availed of has steadily decreased. The largest
amount held under sales contract at any one time in 1920 was
$17,788,000 on September 8, and the smallest amount $390,000 on
December 31.



32

SIXTH ANNUAL REPORT

RATES OF DISCOUNT
The marked decline already noted in the proportionate amount
of Government obligations offered as the basis for advances or
rediscounts at the Federal Reserve Bank, took place concurrently
with the maintenance of rates of discount under which loans secured
by Government obligations enjoyed preferential treatment.
On January 1, 1920, the discount rate was 4 ^ per cent, for all
classes of paper. On January 23 the commercial paper rate was
increased to 6 per cent, and on June 1 to 7 per cent. The rate on
loans secured by Liberty bonds and Victory notes was advanced
on these dates, respectively, to 5}/2 per cent, and 6 per cent. A
preferential rate on loans secured by United States Treasury
certificates of indebtedness, first of 4% per cent., then of 5 per cent,
and later of 5)^ per cent., was maintained throughout the year.
Rates for the rediscount of bankers acceptances were progressively
advanced and reached 6 per cent, on June 1. No changes in rates
were made after June 1.
Detailed schedules appear in the appendix, on page 70.




FEDERAL RESERVE BANK OF NEW YORK

33

FEDERAL RESERVE CURRENCY
In 1920 the circulating notes of this bank reached their highest
point, corresponding with the generally higher level of bank loans
and in the early part of the year reflecting the rapidly rising level of
commodity prices. Of the two kinds of circulating notes issued, the
Federal Reserve bank notes are a small issue now being reduced,
but the Federal Reserve notes of this and the other Federal Reserve
Banks represent the chief fluctuating, and at present the most
important, element in the country's non-metallic currency.

Federal Reserve Notes
MILLIONS
OF DOLLARS
1000

900

i

J

600

1*

700

u

1V

600

500

J
1

400

300

200

A

J

J

100

—•»
1915

1916

1917

1918

1919

1920

Federal Reserve note circulation of the Federal Reserve Bank of New York

The diagram shows graphically the course of the circulation of
the Federal Reserve notes of this bank during 1920 as well as during




34

SIXTH ANNUAL REPORT

the preceding years. After the usual January decline in 1920 the
volume of circulation rose above the high point of 1919 and
remained above the corresponding points of 1919 for the rest of the
year. The rise in circulation in the spring, however, was not due
entirely to domestic currency requirements, for many millions of
Federal Reserve notes were shipped to Cuba and other Caribbean
countries as a result of the trade activity and rising prices there,
which were induced in part by the high quotations for sugar then
prevailing.
The increase in the note circulation from the first of the year to
the maximum was $75,600,000 as compared with about $100,000,000
in 1919 and a much larger increase in each of the two preceding years.
While the high point is usually reached in the Christmas holidays,
it was reached in 1920 on November 5 when, however, the circulation was barely above that of early July. The volume of notes,
like the volume of deposits and loans, did not shrink precipitately as did commodity prices, but during the autumn a beginning was made towards a gradual reduction of the circulating
medium.
The following diagram, showing for the twelve Federal Reserve
Banks, since 1914, their earning assets, their Federal Reserve notes
in circulation, and their member bank deposits, shows for the
expanding period, at least, an intimate relation between their discounts and their notes—a relation which appears to be far closer
than that which exists between their discounts and their deposits.




35

FEDERAL RESERVE BANK OF NEW YORK

MILLIONS
OF DOLLARS
3500

3000

2500

2000

1500

1000

1915

1916

1917

1918

191?

19E0

Federal Reserve notes, earning assets, and member bank reserve deposits
of all Federal Reserve Banks




36

SIXTH ANNUAL REPORT
Federal Reserve Bank Notes

Federal Reserve bank notes have been issued by this bank only
under the provisions of the Pittman Act of April 23, 1918, the
purpose of which was to create a supply of currency of small
denominations, mostly $1 and $2, to replace silver certificates which
were being withdrawn from circulation so as to release silver dollars
for export as bullion to India and other foreign countries. About
$270,000,000 in silver was melted under this authority, of
which about $10,000,000 was turned over to the Director of the
Mint to be reminted into subsidiary silver currency and the
remainder was sold as bullion at slightly more than $1.00 per fine
ounce. The amount of Federal Reserve bank notes which could
be issued under the Pittman Act by all Federal Reserve Banks was
thus limited to $270,000,000, of which this bank was authorized to
issue $59,276,000. The amount actually issued and in circulation
declined during 1920 from $53,000,000 to $39,000,000.
With the decrease in the demand for silver in the Far East, the
need for melting silver dollars ceased, and the Director of the
Mint began the repurchase of American silver under the terms
of the Act. About 30,000,000 ounces were bought in 1920, but no
silver dollars were minted. The increase in the aggregate amount
of silver certificates in circulation, from $119,000,000 on the first
of July to $152,000,000 at the end of December, was due almost
entirely to the exchange for silver certificates of a portion of the
59,000,000 silver dollars deposited by the Treasury in this bank
during the year.

Condition of the Currency
The rapid increase in the volume of Federal Reserve currency
when it was first placed in the hands of the public provided a more
than customary proportion of new notes. But the maintenance in
good condition of that increased volume of currency has been
rendered impossible by the necessity of printing an immense volume
of permanent Liberty Bonds with which to replace the temporary
bonds sold during the Liberty Loan campaigns. Notwithstanding
efforts made by the Bureau of Engraving and Printing to meet the
requirements for both currency and bonds it has been found necessary to extend the life of notes in circulation in 1920 to about 16
months, whereas the average in 1916 was about 12 months. This
has unfortunately necessitated using many notes which heretofore
would have been considered unfit for circulation.



FEDERAL RESERVE RANK OF NEW YORK

37

THE SUBTREASURY AT NEW YORK
On December 6, 1920, the Secretary of the Treasury, under the
authority of an Act of Congress approved May 29, 1920, turned
over to the Federal Reserve Bank of New York certain functions
previously performed by the Subtreasury, thereby completing
in this district the transition from the Subtreasury system of
handling Government fiscal agency operations, established in 1846,
to the more comprehensive method now provided in the Federal
Reserve system.
At the time of the transfer this bank received on deposit
$1,447,966.36 in coin, representing all of the general fund then in
the hands of the Assistant Treasurer at New York. The Federal
Reserve Bank now performs through its money departments all
small currency and coin operations formerly conducted by the
Assistant Treasurer, thereby adding somewhat to the volume of
currency and coin shipments previously handled. It also receives
deposits from National banks to be credited to the Treasurer for
account of the 5 per cent, redemption fund held against National
bank notes, and cuts and cancels National bank notes and United
States paper currency.
The Subtreasury building at Wall and Nassau Streets remains
in the custody of the Treasury Department, but is assigned to the
Federal Reserve Bank for the use of certain of its departments.




SIXTH ANNUAL REPORT

RESERVE POSITION
100
,•. >

80

\

1/

A

60

L

V

\
\

s

40

20

0
1917

1918

1919

1920

Monthly average reserve percentage of the Federal Reserve Bank of New York

The foregoing diagram indicating the ratio of the reserve of this
bank to its combined deposit and note liabilities shows a fairly
steady condition in 1920 when compared with the declines of the
three preceding years. The weekly percentages will be found in
the appendix, pages 66 and 67.
These figures, however, represent the reserve position of this
bank after inter-Federal Reserve Bank transactions have taken
place. Reference has already been made to the extent to which
rediscounting and its counterpart, the inter-Federal Reserve Bank
sale of bankers acceptances, have occurred. The highest amount
of paper which this bank has had under rediscount with other
Federal Reserve Banks, in order to maintain its legal reserve percentage, was $100,000,000 on January 15, 1920. The highest amount




FEDERAL RESERVE BANK OF NEW YORK

39

which this bank had under rediscount for other Federal Reserve
Banks during 1920 was $87,100,000 on June 5, 1920. Disregarding
rediscounts and sales of acceptances between Federal Reserve
Banks, the lowest average reserve percentage of this bank in 1920
was 31.6 and the highest 47.6.
On several occasions during the year, when the movement of funds
was exceptionally heavy, the reserve of this bank fell slightly below
the legal minimum for a day or two. For these discrepancies the
bank was penalized by the Federal Reserve Board, under the
provisions of paragraph (c) of Sec. 11 of the Act, in the aggregate
amount of $23,301.10.
In the appendix, pages 66, 67, and 75 will be found a detailed
statement showing the rediscounts by and for this bank, and the
acceptances bought from and sold to other Federal Reserve Banks.
A diagram showing by weeks the reserve percentage before interReserve Bank transactions, compared with the percentage after
such transactions, is given in the appendix, page 69.




40

SIXTH ANNUAL REPORT

COLLECTIONS AND CLEARINGS
The collection services of the Federal Reserve Bank include the
collection of checks, notes and drafts, coupons and maturing bonds,
and the transfer of funds by telegraph for the benefit of member
banks and their customers. The new facilities which have been
developed and the time saved over that formerly required, when
each bank relied upon correspondent banks in other cities to serve
as collection agents, have caused a continuous growth in the volume
of such business transacted by the Federal Reserve Bank.

Check Collections
During 1920 the Federal Reserve Bank of New York collected or
forwarded for collection a daily average of 181,228 checks drawn
upon banks in all parts of the country. Collections within this
Federal Reserve district are made directly from member or nonmember banks or through local clearing houses. Checks drawn
upon banks outside the district are collected through other Federal
Reserve Banks. A bank receives credit for each check it deposits,
either immediately or in one, two, four or eight days according to
an averaged time schedule which is so designed as to cover the
time usually required for the mail to reach the bank upon which
the check is drawn, and for that bank to make payment at its
own Federal Reserve Bank. Each transaction is settled on the
books of the Federal Reserve Bank if it is entirely within this
Federal Reserve district, or by telegraph between the Federal
Reserve Banks if the transaction is between two Federal Reserve
districts. Thus time is saved not only by the expeditious routing
of checks to banks upon which they are drawn, but by the telegraphic settlements between Federal Reserve Banks, described
on page 43. The check collection service is rendered without charge.
A modification of this plan, which makes a still further saving
of handling and time, has been the arrangement by which member
banks are allowed to send checks for collection directly to the
Federal Reserve Banks of other districts. This privilege is being
increasingly availed of. In the last year 150 member banks in this
district sent checks amounting to $11,955,000,000 directly to other
Federal Reserve Banks and 582 member banks in other districts
sent checks amounting to $8,663,000,000 directly to this bank.
The 1920 check collection operations are compared with those of
previous years on the next page. The number of checks collected
or routed for collection by the Federal Reserve Bank of New York
was 17 per cent, greater than in 1919. At the end of the year 508
banks of this district were using the check collection facilities as
compared with 375 on December 31, 1919. Additional details of
the year's operations are given in the appendix, page 79.



FEDERAL RESERVE BANK OF NEW YORK
Period
1915 (June 1-December 31 only)
1916
1917
1918
1919
1920

Number of
Items Handled

Amount

1,262,211
6,841,364
19,408,179
35,349,601
74,463,917
87,036,421

$1,334,015,772
5,160,192,000
20,104,527,000
42,581,833,000
56,510,748,116
55,325,112,827

The largest number of checks handled in a single day was 327,000
on October 14, immediately following the Columbus Day holiday.
The transit department, which receives, sorts, records and sends to
their destinations the checks which are deposited for collection,
operates 24 hours a day. The day force has consisted on the
average of about 300 clerks and the two night shifts combined have
numbered about 100. Although the number of checks presented
for collection in 1920 increased, it was possible through better
training and organization to make a slight reduction in the staff of
the transit department.

Additions to the Par List
The list of States within which checks on every bank can be
collected at par was increased by eleven during 1920. At the close
of the year all banks in forty-one States, together with about 40
per cent, of the banks in the remaining seven States, were remitting
at full face value for all checks drawn on them and presented for
payment by Federal Reserve Banks. These banks aggregated
28,768, or more than 94 per cent, of the 30,500 banks of the country;
and the only States in which there were banks not remitting at par
were Alabama, Florida, Georgia, Louisiana, Mississippi, South Carolina and Tennessee.

Extension > Local Clearing Houses
f
In 1920 the Northern New Jersey Clearing House Association
was established by a majority of the banks in Jersey City and
Hoboken and by several banks in Newark, Bayonne and nearby
cities. It performs for these banks the functions of a city clearing
house. It has effected a saving of two or more days in the time
required for the collection of checks drawn on its members, and
the Federal Reserve Bank of New York gives immediate credit for
checks which can be cleared through it.
The organization on December 31 had 17 banks and trust companies as members and 6 as associate members. Its meetings are
held in a room at 37 Liberty Street, New York, provided by the
Federal Reserve Bank. The daily clearings of the association at
the close of the year averaged about $4,000,000, of which this bank
presented about $3,000,000.



42

SIXTH ANNUAL REPORT

Arrangements were made during the year whereby members of
the clearing house associations of Elmira, N. Y., and Binghamton,
N. Y., settle their balances daily by wire on the books of the
Federal Reserve Bank. This arrangement has resulted in a settlement which provides actual reserve money instead of a settlement
which consisted in the acceptance of a check drawn on some other
bank. It has eliminated risk and reduced float.
The one-way clearing arrangements with Bronx and with Brooklyn
banks were maintained during the year. During the year the
volume of checks presented by this bank against Bronx banks was
$1,308,000,000 and against Brooklyn banks was $1,650,000,000.
Settlements for these checks are made in Federal Reserve funds on
the day on which they are presented.

Note and Coupon Collections
During 1920 the Federal Reserve Bank handled for collection
227,262 notes and drafts payable in New York City, as compared
with 99,978 in 1919, an increase of 127 per cent. Notes and drafts
on places outside of New York City numbered 336,552 as compared
with 146,037 in 1919, an increase of 130 per cent. The collection
of matured bonds and coupons totaled $60,115,335 in 1920 as
compared with $39,748,000 in 1919, an increase of 51 per cent.
No charge is made by the Federal Reserve Bank for its services
in collecting these non-cash items, other than a charge of fifteen
cents per item in certain cases where notes or drafts are returned
unpaid. But where a charge is made by the collecting bank it is
passed back to the depositing bank. About 86 per cent, of the
items payable within this district outside of New York City were
collected at par and where charges were made the average rate was
1-12 of 1 per cent, on the face value of the notes or drafts. Of the
items payable outside this district about 90 per cent, were collected
at par, and charges, when made, averaged about 1-13 of 1 per cent.

Gold Settlement Fund
The settlement of balances between Federal Reserve Banks is
accomplished through the medium of the gold settlement fund,
which by law is operated by the Federal Reserve Board and is
lodged with the Treasurer of the United States. This fund constitutes part of the gold reserves of the Federal Reserve Banks and
payments between them are made by debiting or crediting their
respective portions of the fund. At the close of the year the total
amount in the fund was $356,244,000, of which $36,435,000 was
to the credit of this bank.
Transactions cleared through the gold settlement fund include
not only the balances between Federal Reserve districts on check
clearances, but transfers of funds for the account of the United




FEDERAL RESERVE BANK OF NEW YORK

43

States Treasury and of member banks and their customers, rediscounts and sales of acceptances between Federal Reserve Banks,
redemptions of Federal Reserve notes and other transactions.
The volume of settlements made each day through the fund now
averages about $300,000,000.
The increased volume of inter-district transactions is shown in
the following aggregate settlements of the Federal Reserve Bank of
New York made through the gold settlement fund in each year
from 1915 to 1920:
1915
1916
1917
1918
1919
1920

$556,432,000
2,335,225,000
17,118,917,000
32,935,576,000
41,932,723,000
48,840,900,000

The volume of settlements made through this fund between the
Federal Reserve Bank of New York and each of the other Federal
Reserve Banks during 1920 is shown in the appendix, page 81.

Telegraphic Transfer System
Through the gold settlement fund and the private wires connecting the various Federal Reserve Banks, it is possible to make
payments between widely separated parts of the country, immediately, at par and without cost. This service is used by the
Treasury, and by member banks for the convenience of themselves
and their customers.
The growth of its use is shown by the following table which gives
the number of transfers made by this bank each year from 1916 to
1920.
Number

Year
1916 (nine months)
1917
1918
1919... .
1920

. . . .

Amount

2,971
10,302
39,099
82,321
147,302

$484,500,000
6,768,400,000
19,384,371,849
18,245,250,181
17,021,509,734

Although the number of transfers during 1920 was nearly double
the number during 1919 the amount was smaller. This is due in
part to a decline in the amount of transfers of United States Treasury funds between Federal Reserve Banks. An increasing number
of banks has been making use of this service. In January, 1920,
the number of telegraphic transfers averaged 363 a day and in
December 712.




44

SIXTH ANNUAL REPORT

RELATIONS WITH BANKS
Visits and Conferences
In 1920 the work of the member bank relations department
was developed and its travelling representatives made more than
1,000 visits to member banks outside of New York City. In addition, officers of member banks outside of New York City were
invited, in groups of about 30, to spend a day at the Federal
Reserve Bank, examining its facilities, suggesting improvements
in its service, and discussing problems of bank operation and policy.
During the year 369 member and 22 non-member banks were
represented at these conferences.
Through these visits and conferences opportunity was found to
effect a better understanding of the relations of this bank with
its members, and of the proper use of its credit facilities. They also
resulted in a more general use of its other services. The increase,
during the year, of about 200 in the number of banks using the
transit department, as well as the increased volume of currency
shipments, of securities deposited for custody and of security
transactions cleared is directly attributable to the contacts thus
maintained.

Purchasing Acceptances for Country
Member Banks
Especially effective has been the work of this department in
educating country member banks to avail themselves much more
freely than heretofore of the services of this bank in purchasing
bankers acceptances. This service was opened to out-of-town
member banks in 1919. During that year 873 acceptances, aggregating $8,199,947 were bought for 38 member banks. In 1920,
4,825 acceptances, aggregating $42,424,017 were bought for 230
member banks, mainly the smaller of the country institutions.
Purchases for member banks are made on their order, either of
particular bills or of an approximate amount of given maturities of
such names as this bank buys for its own account. Such bills always
bear a banking indorsement other than that of the acceptor, and
are three-name paper of the class to which this bank's own purchases are confined. Paper bought for member banks is held, if
desired, for their account, for collection or such other disposition as
they may direct. No charge is made for this service.
These purchases were of substantial benefit in developing a
broader discount market. A number of banks which began by
buying bills through this bank have since become regular buyers
for their own account directly from dealers, also at their discretion
taking unindorsed bills at slightly higher rates. In time the present
service offered by this bank may become unnecessary.




FEDERAL RESERVE RANK OF NEW YORK

45

Monthly Review of Credit and
Business Conditions
Throughout the year this bank, like other Federal Reserve Banks,
has published for circulation among the bankers and business men
of the district a Monthly Review of Credit and Business Conditions.
The Review is an outgrowth of the reports which had been sent
monthly by the Federal Reserve Agent to the Federal Reserve
Board, for its information. It is a summary of important financial
and industrial developments based upon personal inquiry and upon
analysis of current banking and business statistics. From time to
time it also contains informative statements on the operations of
the Federal Reserve Bank.

Relations with Banking Departments
As in previous years, the relations with the office of the National
Bank Examiner in this district and with the banking departments
of the States of New York, New Jersey and Connecticut, were of
the most cordial nature. Mutual advice and assistance have been
given wherever requested and our examiners participated with the
State authorities in the examination of nearly one-half of the State
bank members. In a number of cases in which member banks
were temporarily embarrassed by heavy withdrawals, the presence
of officers of this bank cooperating with the bank examiners, coupled
with the ample supply of currency which membership in the Federal
Reserve system assured, had an undoubted effect in restoring
confidence and a cessation of the withdrawals.

Fiduciary Powers and Other Authorities
There were 29 additions in 1920 to the list of National banks in
the district exercising fiduciary powers under authority of the
Federal Reserve Board granted in accordance with the amendment
to the Federal Reserve Act approved September 26, 1918. Three
National banks, which had received authority previously to exercise some of the powers, received additional authority in 1920.
A list of all banks in the district thus far authorized appears in
the appendix, page 82.
Banks in this district which have received permission to accept
drafts and bills of exchange up to 100 per cent, of their capital
and surplus are listed in the appendix, page 86.




46

SIXTH ANNUAL REPORT

Bank Changes in 1920
At the close of the year the banks of the Second Federal Reserve
District (exclusive of savings banks), classified according to their
charters, whether National or State, and also according to membership in the Federal Reserve system, were as follows:
1919

1920

Type of Bank
NonPer Cent.
NonPer Cent.
Members Members Members Members Members Members
National banks
State banks
Trust companies . . . .

197
125

100
18
38

649
51
83

203
124

100
20
40

758

Total

636
44
78

•"322

70

783

327

71

Changes in the table given above from a similar table printed a
year ago are accounted for as follows:
Total number of banks in the district, January 1, 1920
New National banks established during the year
New State institutions established during the year

1,080
23
25

Total

1,128

National banks absorbed by State institutions
State institutions absorbed by other State institutions
State institutions liquidated
National banks consolidated with other National banks

2
8
1
7

Total decrease

18

5
National banks converted into State institutions
4
State institutions converted into National banks
State institutions converted into another type of State institution. . 2
Total number of banks at the end of the year

1,110

Membership of State Institutions
The number of State banks and trust companies which are
members of the Federal Reserve system, increased from 122 to
134 during the year. Nineteen State institutions were admitted
to for FRASER
membership; three withdrew from membership; six were conDigitized


FEDERAL RESERVE BANK OF NEW YORK

47

solidated into three, and one trust company was converted into a
National bank, making a net increase of twelve in the list of State
institution members. The new members in 1920 were as follows:
Month

Bank or Trust Company

January. . . . Bank of Bogota
February... The Peoples Trust Co. of Malone.
Bank of Coney Island
The Marine Trust Company of
Buffalo
State Bank of Shortsville
Bank of Hasbrouck Heights

Location
Bogota, N. J
Malone, N. Y
Brooklyn, N. Y. . . .

Resources
Dec. 29, 1920
$492,123.01
3,084,088.82
3,493,646.82

Buffalo, N. Y
133,705,445.98
367,709.64
Shortsville, N. Y. . .
Hasbrouck Heights,
N. J
304,727.02
Industrial Bank of New York.. . New York, N. Y. . .
6,883,897.81
March
The Merchants Bank of the City
of New York
New York, N. Y. . .
*
The American Bank of LackaLP 'Lawanna N Y
779,574.47
Belmoit. N. Y . . .
The State Bank of Belmont
546,621.87
City Trust Co. of Newark
Newark. N. J. .. .
3,221,622.19
Peoples Bank of Hamburg
Hamburg, N. Y . .
1,646,118.94
North Side Bank of Brooklyn. . . Brooklyn, N. Y. .
8,263,470.95
May
Dunkirk Trust Co
Dunkirk, N. Y . . .
1,259,778.39
August
Bank of Blasdell
Blasdell, N. Y . . . .
183,933.06
September.. The Bidgewood Trust Company. Ridgewood, N. J.
2,421,197.27
October. . . . Lewis County Trust Company. . Lowville, N. Y . . .
1,008,305.90
December. . Orleans County Trust Company. Albion, N. Y
775,931.61
Fidelity Trust Company
Newark, N. J
31,177,268.76
Consolidated with Bank of the Manhattan Company, New York City.

The 134 members represent 33 per cent, in number and about
80 per cent, in resources of the State banks and trust companies
in the district which have sufficient capital to make them eligible
for membership. In both of these respects the Second Federal
Reserve District continues to lead all other districts.




48

SIXTH ANNUAL REPORT

FOREIGN RELATIONS
Relations with foreign central banks entered into prior to 1920
have in some cases been further developed during the year and
certain additional arrangements have been effected. A summary
of the operations carried on in accordance with them is as follows:
BANK OF ENGLAND:—In 1919 the Federal Reserve Bank of
New York, acting for all Federal Reserve Banks, purchased from the
United States Grain Corporation about 730,000,000 German gold
marks, equivalent to about $173,000,000, which was forwarded
from the Continent to the Bank of England and by it reduced to
bars and held earmarked for the account of this bank. During the
latter part of 1919 and the early part of 1920 the amount of this
earmarked gold was reduced to $111,458,044.95 by sales to banks
and bankers desiring to ship gold from New York to various parts
of the world in settlement of trade balances. But as such sales
had practically ceased by mid-summer it was decided to bring the
balance of the gold to New York. The shipments were undertaken
by the Bank of England. They began on September 22, and the
last consignment arrived in New York on November 12. The gold
was deposited in the New York Assay office for credit to the twelve
Federal Reserve Banks and is being re-melted and re-assayed.
When this gold reached London from the Continent in the autumn
of 1919 it was included in the reserves of the Federal Reserve
Banks, consequently its subsequent importation to the United
States had no effect upon the reserve position of the Federal
Reserve Banks.
BANK OF FRANCE:—No change has occurred in relations with the
Bank of France, but the services of this bank were availed of in
consummating certain parts of the transaction for the repayment
of France's share of the Anglo-French loan, which matured on
October 15, 1920. In these transactions this bank acted in behalf
of all the Federal Reserve Banks.
BANK OF JAPAN:—The relations between the two institutions
have been more active during the past year. An agreement has
been effected covering mutual accounts and investments, in accordance with which operations have been conducted in this market.
D E NEDEELANDSCHE BANK:—The active relations of a year ago
have continued, and this bank acts in many particulars in the
capacity of correspondent of de Nederlandsche Bank for the
Digitized conduct of its transactions in New York.
for FRASER


FEDERAL RESERVE BANK OF NEW YORK

49

D E JAVASCHE BANK:—The arrangement effected in April, 1919,
relating to deposits in current account, investments, collections and
the earmarking of gold, has continued in active operation. The
Federal Reserve Bank of New York has formally appointed de
Javasche Bank its agent and correspondent in Java, and in turn
has acted during the year as New York agent and correspondent
of de Javasche Bank.
BANK OF SPAIN:—The account opened with the Bank of Spain
in 1919, in connection with the payment of the peseta credit
arranged by the United States Treasury was closed when the last
instalment of the credit was retired in March, 1920.

ARGENTINA:—During 1920 the account of the Argentine Government with the Federal Reserve Bank of New York, opened in 1918
under an agreement between the United States and Argentina for
the stabilization of exchange, was closed by a gradual withdrawal
of the deposits, thereby avoiding, to the extent of such deposits,
shipments of gold by Argentina to the United States in payment of
adverse trade balances.

Gold Imports and Exports
During the past year gold imports amounted to $428,744,000
and exports to $322,091,000. The imports, however, included
$111,500,000 of earmarked gold which had been held for the Federal
Reserve Banks by the Bank of England.
The table below shows imports and exports classified according
to the principal countries of source and destination.
Imports

Exports

Country

Amount
000's
omitted

England
France
Canada
Hongkong
Other countries... .

$274,982
48,739
34,196
30,192
40,635

64
11
8
7
10

$428,744

100

Total




Per cent,
of Total

Country

Amount
000's
omitted

Japan
Argentina
Hongkong
China
Rest of Asia
Other countries...

$101,299
89,995
31,497
28,287
27,811
43,202

31
28
10
9
9
13

$322,091

100

Total

Per cent,
of Total

50

SIXTH ANNUAL REPORT

ORGANIZATION OF THE BANK
The new plan of bank organization described in the report for
1919 was developed in further detail during 1920. On September
1 an organization manual was published setting forth in text and
diagrams the duties of the officers of the bank and the functions of
each department, division and section. The definite allocation of
duties to department heads and the concentration of responsibility
upon them for the conduct of regular business have been found
to be effective in carrying forward the daily work of the bank.

Board of Directors
The board of directors met weekly throughout the year and the
executive committee daily, except on Saturdays and holidays.
Other committees of the board held meetings as occasion required.
To fill a vacancy in the board of directors caused by the resignation of William B. Thompson, Class B director since 1914, a
special election was held in the spring of 1920, which was participated in by member banks having capital ranging from $201,000
to $1,999,000. Richard H. Williams, of Madison, N. J., of the
firm of Williams & Peters, coal merchants doing business at No. 1
Broadway, New York City, was elected, receiving all votes cast,
and took his place in the board on June 1.
In the usual autumn election, Mr. Williams and Robert H.
Treman, of Ithaca, N. Y., Class A director since 1914, and senior
deputy governor during the war, were both re-elected directors for
three-year terms from January 1, 1921. The Federal Reserve Board
reappointed William L. Saunders, of Plainfield, N. J., a Class C
director for a three-year term, beginning January 1, 1921, and
redesignated Pierre Jay chairman of the board and Federal Reserve
Agent for 1921.

Member of the Advisory Council
At their meeting on January 7, 1920, the directors re-elected A.
Barton Hepburn, Chairman of the Advisory Board of the Chase
National Bank, as the member of the Federal Advisory Council
from the Second Federal Reserve District for the year 1920.

Officers and Staff
The managing committee, composed of the governor, the chairman
of the board and certain of the general and senior officers of the
bank, has met four times a week throughout the year to pass upon
administrative policies and matters relating to the general business
of the bank.



'

FEDERAL RESERVE RANK OF NEW YORK

51

In the absence of Governor Strong, who was away on leave the
entire year, J. Herbert Case, deputy governor, was appointed by
the directors acting governor. On May 19, the directors elected
as deputy governors of the bank, George L. Harrison, then general
counsel of the Federal Reserve Board, and Edwin R. Kenzel, then
controller of investments and a member of the staff of the bank
since its establishment. Edward H. Hart was elected general
counsel of the bank on February 18. On November 8, Channing
Rudd, controller of the Government Loan Organization, died very
suddenly. He had been a member of the official staff of the bank
since 1918, and had since September 2, 1919, conducted, with
marked ability and singleness of purpose, the various activities of
the bank which had been entrusted to him.
While the total volume of the work of the bank was greater in
1920 than in 1919 the number of employees was slightly reduced.
At the end of 1920 there were 2,936 employees as compared with
2,962 in 1919. A larger volume of work, or the consolidation of
allied groups, caused increases in the personnel of the service
department, particularly the stenographic and protection services;
of the cash department, where additional money counters and
handlers of coin and bullion were required; of the collection department, where a larger force was needed to handle country collections; and of the statistics department, with which were merged
several groups of employees formerly attached to other departments. These increases, partly accounted for in the absorption of
the Subtreasury, fifty-one of the employees of which were taken
over by the bank, were more than offset by decreases in other
departments. A table showing the number employed in each
department on December 31, 1919, and December 31, 1920, is
inserted in the appendix, page 87.
The reduction in the size of the staff was made possible by the
careful selection and training of new employees, by the re-assignment of duties to old employees so that each might be engaged in
work for which he was best adapted, and by the loyal cooperation
of the staff in all efforts to secure greater efficiency, despite the
difficulties inherent in the present constricted space and widely
scattered offices. Furthermore, during the year overtime work
was practically eliminated.
The directors, with the approval of the Federal Reserve Board,
authorized quarterly payments of extra compensation during the
year to all employees receiving annual salaries of $5,000 or less, in
order to provide for the increased cost of living. These payments
were made as an emergency measure and their continuance in
whole or in part will depend upon the cost of the necessities of life
in the future. The group insurance plan by which each employee



52

SIXTH ANNUAL REPORT

is protected to the amount of one year's salary up to the sum of
$3,000 remained in effect. In December, 1920, more than $4,000,000 of insurance was being carried. The premiums on $3,500,000
of this amount were paid by the bank and the premiums on the
balance were paid by the bank and reimbursed to it by the Government. During the year $19,140 was paid to the beneficiaries of
12 deceased employees.
The medical division of the personnel department examined
about 1,000 applicants for positions during the year, rejecting 5
per cent, because of physical defects. The division also gave
medical advice and first aid treatment to employees. The other
work of the personnel department has been supplemented by the
Federal Reserve Club, an organization embracing nearly all of the
bank's employees, which has published the Federal Reserve Club
Magazine and in addition to various recreational and athletic
activities has carried through a schedule of courses on banking
and finance, and organized a plan of co-operative purchasing.
The cafeteria served 227,000 meals during the year to the women
employees at an average cost to them of 33 cents.

Bank Premises
A sketch of the elevation of the proposed new bank building is
shown as the frontispiece of this report. The site of the new building, which will cover some 46,000 square feet, is in the plot bounded
by Nassau Street, Maiden Lane, and Liberty Street. The section
shown in the sketch is the corner at Nassau and Liberty Streets
and includes the main entrance to the building, which will be on
Liberty Street. During the year the high construction costs and
the conditions prevailing in the building trades made it seem
unwise to proceed with the actual work of erecting so large a
building. Nevertheless, the commissioned architects, Messrs. York
and Sawyer, working with the building committee of the board of
directors, the planning committee composed of officers of the bank
and the consulting architect, have made substantial progress in
determining the principal features and arrangements of the building.
In the spring of 1920 the directors and officers matured a plan
which had been long under consideration, for the purchase of a
piece of land for the erection of a fireproof storage and warehouse
building to house the stationery and supplies of the bank and the
ever-growing volume of its files and records. While the land
purchased for this purpose, at the corner of Gold Street and Maiden
Lane, is within a block of the site for the new bank building, its
cost per foot was less than half the cost of the latter. The area is
about 13,300 square feet.




New Storage Building under erection at Maiden Lane and Gold Street




FEDERAL RESERVE BANK OF NEW YORK

53

An eight-story building is now being erected on this property by
the architects, Messrs. York and Sawyer, and the contractors,
Messrs. Marc Eidlitz & Son, who have been commissioned to build
the bank building. It is expected that the storage building will be
ready for occupancy late in the spring of 1921. In addition to
providing much needed additional storage space and enabling the
records now stored in Brooklyn to be brought near the bank, the
upper floors of the storage building will make it possible, during the
construction of the main bank building, to take care of the several
hundred employees of the bank now housed in old buildings on the
site of the bank building.
A photograph of the storage and warehouse building is shown
opposite the preceding page.




54

SIXTH ANNUAL REPORT

BUFFALO BRANCH
The Buffalo branch of the Federal Reserve Bank of New York
was opened on May 15, 1919. Its operations, which were described
in last year's report, were designed to make the facilities of the
Federal Reserve system more readily available to the banks in the
ten most western counties of New York State.
The number and resources of member banks in the Buffalo
branch territory at the time of organization of the branch and at
the end of 1920, were as follows:
National Banks

State Banks and
Trust Companies

May 15, 1919 Dec. 31, 1920 May 15, 1919 Dec. 31,1920
Number
Capital and Surplus. .
Total Resources

57
$16,151,300
181,516,000

60
$17,373,000
180,972,000

$7,657,500
91,471,000

21
$33,115,000
327,400,000

The Buffalo branch as originally organized, did not carry the
accounts of any banks in its territory, and it was optional with them
whether they should deal with the Buffalo branch or with the main
office in New York. But in 1920 the accounts and discounts of the
member banks in the city of Buffalo were transferred from New
York to the branch office; so that their relations with the Federal
Reserve Bank of New York are all through the Buffalo branch.
The accounts of the banks in the territory outside Buffalo are still
carried at the New York office, and the transactions which the
branch may have with them are reported in detail by wire. Checks
received by banks in the city of Buffalo are usually deposited in
the branch for collection, but it is still possible for them, as for other
banks in the branch territory, to send checks to the main office
for collection, subject to the time schedule which controls all
checks collected through the New York office.
The transfer of accounts of the Buffalo banks on May 1 resulted
in placing with the Buffalo branch reserve deposits of $17,213,000
and deferred credits of $3,444,000. On July 1 discounts amounting to $55,652,000 were transferred to the branch, and all loans
to Buffalo banks have since been made at the branch, subject to
final approval by the directors of the Federal Reserve Bank of
New York.




Ill
FISCAL AGENCY OPERATIONS

A

the conclusion of the Liberty and Victory loans in 1919, the
operations which this bank performed as fiscal agent of the
United States underwent a material change. The organization which had successfully carried through the work of selling these
securities in this district dissolved, and the operations of the bank
were concentrated on the exchange and conversion of bonds and
notes, rather than on their sale.
The sale of Treasury certificates of indebtedness continued; but
the declining needs of the Treasury for funds and the growing
public recognition of the value of certificates of indebtedness for
temporary investment, established a demand which facilitated their
distribution and largely reduced this bank's function, as the district
selling agency of the Treasury, to that of handling the recurring
issues. Offerings of certificates of indebtedness in 1920, after the
first few issues, were very largely oversubscribed; the proportion
held by private investors constantly increased; an active outside
market developed; and at the close of the year all but one of the
outstanding issues were selling at or slightly above par.

Certificates of Indebtedness
Issues during 1920 of certificates of indebtedness, other than
Pittman Act and special certificates held by Federal Reserve Banks,
were about one-third of the volume issued in 1919, and the amount
outstanding throughout the country on December 31, 1920, was
$2,317,000,000 as compared with $3,262,000,000 on December 31,
1919.
Since 1917, when certificates of indebtedness were first issued,
the amount sold throughout the country has been about $30,000,000,000, of which about 43 per cent, were sold by the Federal
Reserve Bank of New York, as is shown in the following table.

1917
1918
1919
1920
Total




Total Sales in
United States

Sales in
Second District

Per cent. Sold in
Second District

$3,880,570,000
10,742,094,000
11,246,820,500
3,939,832,500

Year

$2,422,075,500
4,091,260,000
4,506,155,500
1,716,680,500

62.4
38.1
40.1
43.6

$29,809,317,000

$12,736,171,500

42.7

55

SIXTH ANNUAL REPORT

56

The figures showing the percentage sold in this district in 1920
do not, however, reflect the intensity of the demand. Allotments
made by the Treasury, particularly in recent issues, were customarily
much below the subscriptions received. To the two issues dated
December 15 the aggregate subscriptions in this district amounted
to $413,000,000, which was slightly more than the amount requested
by the Treasury from the whole country.
MILLIONS
OF DOLLARS
Z500

£000

1500

1000

1918

1919

1920

Amount of Certificates of Indebtedness outstanding in the Second Federal
Reserve District (entire black and white area) and amount held by reporting
banks (black)

It has become more and more apparent that certificates of
indebtedness are passing from the possession of the banks into the
hands of private investors. The foregoing diagram shows the proportion that the amount of certificates of indebtedness held by 112
banks reporting regularly to the Federal Reserve Bank has borne
to the total amount sold in this district and not matured. Since
these banks represent about 77 per cent, of the banking resources
of the district and include the banks most likely to be in possession
of certificates of indebtedness, it may fairly be assumed that the
major part of the certificates not in their possession is held by
individual investors. The amount of certificates pledged with the
Federal Reserve Bank as collateral for loans has also declined to a
marked degree. The following table gives comparative figures
for successive half-yearly periods, showing the proportion the
amount owned by the reporting member banks, and the amount




57

FEDERAL RESERVE BANK OF NEW YORK

pledged with the Federal Reserve Bank of New York, bore to the
total amount sold in this district and not yet matured on the
respective dates.
Period
Feb. to June, 1918
July to Dec, 1918
Jan. to June, 1919
July to Dec, 1919
Jan. to June, 1920
July to Dec, 1920

':.

Owned
51.9
38.6
37.4
25.8
20.8
16.5

per cent.
per cent.
per cent.
per cent.
percent.
per cent.

Pledged with Federal
Reserve Bank
9.6
18.1
15.2
12.8
14.5
11.5

per
per
per
per
per
per

cent.
cent.
cent.
cent.
cent.
cent.

The issues and allotments in 1920, the amounts outstanding
week by week compared with the amounts held by the 112 reporting
member banks, and the volume of certificates redeemedjiuring^the
year are shown in the appendix, pages 89 to 92.

Government Deposits and Disbursements
Banks subscribing for certificates of indebtedness commonly
continue to pay for them by book credit—that is, by opening an
account in favor of the Federal Reserve Bank of New York as fiscal
agent of the United States. The banks pay 2 per cent, interest on
such deposits which are drawn upon ratably by the Federal Reserve
Bank on the instruction of the Treasury Department as funds are
required, usually twice each week. As in previous years, this method
of handling the proceeds of sales of certificates of indebtedness,
which has been more fully described in former reports of this bank,
prevented these large transactions from becoming a disturbing
element in the money market. The largest amount on deposit
with qualified depositaries in 1920 was $384,330,000 on January 7,
and the smallest was $8,045,000 on December 13. The largest
amount of securities in the vaults of the bank and in the hands of
custodians pledged as collateral against these deposits was $551,828,000 on January 8. There was a notable increase in the proportion of commercial paper to the amount of Government obligations
so pledged.
Receipts of taxes were deposited directly with this bank by the
collectors of internal revenue in this Federal Reserve district, and
were used for the redemption of maturing certificates of indebtedness and for other Government purposes.
Aside from checks drawn in redeeming certificates of indebtedness, the payment of coupons, etc., more than 9,500,000 miscellaneous Government checks were handled, aggregating $2,407,000,000. This was a marked decrease from the total handled




58

SIXTH ANNUAL REPORT

during the years of war activity. In 1918 more than 11,000,000
Treasury checks amounting to about $5,000,000,000 and in 1919
nearly 13,000,000 checks amounting to $4,300,000,000 were handled.
The totals for each month in 1920 are given in the appendix, page 93.

Exchange and Conversion of Government Bonds
Inf March, 1920, the Treasury Department began to supply,
issue by issue, permanent bonds for the temporary bonds which
had been sold to the public during the Liberty and Victory loans.
In this district the exchange was carried on by the Government
Bond department of the Federal Reserve Bank, through which
the original issue was conducted. In addition, this department, as
has been described in previous reports, continued to conduct the
conversion of Liberty bonds and Victory notes from one issue to
another, where authorized, and their exchange from one denomination to another, as well as certain operations connected with their registration. The size of these operations appears from the following
summary.
Transaction
Temporary
Permanent
Temporary
Permanent

bonds received for exchange or conversion...
bonds received for exchange or conversion.. .
bonds delivered on exchange or conversion. .
bonds delivered on exchange or conversion...

Total

Pieces

Value

7,085,889
2,276,373
340,291
5,219,048

$2,343,301,950
995,932,350
402,039,450
2,904,898,100

14,921,601

$6,646,171,850

By far the largest operation was the exchange of temporary for
permanent bonds. To facilitate this work the practice was inaugurated of supplying banks in the district with permanent coupon
bonds on consignment so that they might make exchanges for
their customers. Altogether 325, or about one-fourth of the banks
of the district, have taken advantage of this arrangement. Permanent bonds of all issues except the Fourth 43^s were available prior
to December 31, and permanent bonds of this issue were ready on
January 5, 1921.
The marked tendency noted a year ago for bonds of the $50 and
$100 denominations to be offered for exchange into bonds of higher
denominations was again evident in 1920.
The demand for registered bonds showed some increase during
the year. The mechanism of registration has been accelerated, so
that the average time now required is about three weeks. Records
of bond registration are maintained in the Treasury Department
at Washington and the function of the Federal Reserve Bank is
limited to the receipt and delivery of the bonds.



FEDERAL RESERVE BANK OF NEW YORK
59
The payment of coupons from Government bonds, Federal Farm
Loan bonds and War Finance Corporation bonds increased to some
extent in 1920. Over 31,000,000 coupons have been paid, aggregating over $295,000,000.

Partial Payments Completed
The success attained in selling on a weekly payment plan
Third and Fourth loan Liberty bonds and Victory notes, and the
methods employed in handling a total of some 2,400,000 separate
accounts in New York City, have been referred to in preceding
reports. The period through which payments were made on
Victory notes expired on April 10, 1920, and on July 30 the association of New York City banks which had been organized to finance
such small-instalment subscriptions was dissolved. Although these
institutions assumed a maximum underwriting liability for the three
loans amounting to $320,000,000, they were actually called upon to
advance but about one-quarter of that amount, or $85,330,417.
Of all the Liberty bonds and Victory notes sold to subscribers
under the partial payment plan 90 per cent, were fully paid. The
following table summarizes the operations of receiving payments.
PIECES SOLD

Loan
Third
Fourth
Victory

Payment
Period
12 mos.
6 mos.
12 mos.

Total

$50

$100

$500

698,608
699,184
633,377

138,139
98,844
156,508

7,781

2,031,169

393,491

7,781

Estimated
Number of
Individual
Total
Payments
836,747 36,550,000
798,028 18,000,000
797,666 35,500,000
2,432,441

90,050,000

Education in Saving
The organization established after the close of the Victory loan
in 1919 to carry on the continuing saving and sales campaign of
the Treasury Department confined its activities in 1920 to the sale
of thrift and savings stamps and Treasury savings certificates, and
the carrying forward of education to encourage saving, with a
particular view to bringing about a wider secondary distribution of
Government war loan securities already issued. The methods
utilized were the preparation of press material and other literature,
addresses at meetings, and the establishment of Government Savings Associations in connection with industrial, school, and women's
organizations. Publicity material prepared by the organization
was carried in the daily press, in about 2,300 weekly and monthly
publications in this district, and in about 1,000 house organs and
trade journals. Meetings addressed included those of chambers of
commerce, Rotary clubs, merchants' associations, women's clubs,



m

SIXTH ANNUAL REPORT

civic clubs, school teachers' institutes and employees in industrial
plants. From January to December, 1920, the Government Savings
Association plan, according to which members of an association
agree to purchase thrift stamps or other Government securities at
regular intervals, was introduced in over 1,400 establishments
employing over 350,000 persons.

Government Loan Expenses
In connection with the five Government war loans, this bank as
fiscal agent of the United States financed all expenses incident to
the work in this district, including the expenses of the selling
organizations and of the fiscal agency departments of the bank
handling the various issues after sale. The total expenses up to
December 31, 1920, were slightly less than $12,000,000, as appears
in detail on page 94 in the appendix. The Treasury Department
in periodic payments has reimbursed the bank practically in full,
and there remains out of the total sum, representing some 150,000
individual payments, about $2,700 for which the Treasury under
its rules cannot make reimbursement. Steps were taken early in
1921 finally to clear the accounts.
The bank continues to advance necessary expenses in connection
with the activities of the present Government Loan Organization,
and also the expenses incident to the conversion and exchange of
bonds, and other fiscal agency operations.




APPENDIX
EXHIBITS
LETTER

A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W

TITLE

Statement of Condition—Dec. 31,1920, and Dec. 31,1919 . . . .
Earnings and Expenses during 1920
Capital Account Reconciliation
Principal Assets and Liabilities each week in 1920
Rates of Discount
Gold Reserves
Discounts and Advances
Open Market Acceptance Purchases
Acceptances Rediscounted
Purchases from the Treasury of Special Certificates of Indebtedness .
.
Federal Reserve Notes
Check Collections
Telegraphic Transfers
Gold Settlement Fund
National Banks with Fiduciary Powers
Acceptors to 100 Per Cent
Personnel of t h e Bank
Certificates of Indebtedness (Issues and Subscriptions)
. . . .
Certificates of Indebtedness (Redemptions)
Certificates of Indebtedness (Amount held by banks as compared with
amount outstanding in Second District)
P a y m e n t of Treasury Checks
Fiscal Agency Expenses
Loans, Investments, and Deposits, Reporting Banks

PAGE

62
63
65
66
70
71
72
73
75
76
78
79
80
81
82
86
87
89
90
92
93
94
95

DIAGRAMS
NUMBER

TITLE

PAGE

1 Earning Assets
2 Liabilities, Reserves, and Reserve Ratio

68
69




6]

SIXTH ANNUAL REPORT

62

Exhibit A

STATEMENT OF CONDITION
At the Close of Business, Dec. 31, 1920, and Dec. 31, 1919
Dec. 31, 1920

Dec. 31, 1919

$132,723,247.12
45,901,896.46
1,211,100.00

$154,233,758.73
14,976,859.68
48,194,795.30

Total gold held by bank
Gold with Federal Reserve Agent
Gold redemption fund

179,836,243.58
254,575,330.89
39,000,000.00

217,405,413.71
306,756,215.00
25,000,000.00

Total gold reserves
Legal tender notes, silver, etc

473,411,574.47
144,759,115.20

549,161,628.71
46,193,650.50

Total reserves
Bills discounted for members:
Secured by Government war obligations....
Secured by commercial paper

618,170,689.67

595,355,279.21

454,751,722.52
416,686,474.82

562,089,842.45
228,713,445.79

Bills bought in open market

416,686,474.82
113,740,374.53

228,713,445.79
202,902,609.54

985,178,571.87
1,468,305.55
50,000.00

993,705,897.78
1,256,800.00
50,000.00

390,000.00
59,276,000.00

8,445,500.00
59,276,000.00

59,666,000.00

67,721,500.00

1,046,362,877.42
Total earning assets
4,092,497.30
Bank premises
2,766,360.00
5% redemption fund against F. R. bank notes.
Uncollected items and other deductions from
141,346,433.94
gross deposits
All other resources
1,431,316.02
Total resources
$1,814,170,174.35

1,062,734,197.78
3,200,626.83
2,900,000.00

Resources
Gold and gold certificates
Gold settlement fund
Gold with foreign agencies

Total bills on hand
U. S. Government bonds
U. S. Victory notes
U. S. certificates of indebtedness:
Tax and loan
Pittman Act

Liabilities

Dec. 31, 1920

250,055,887.88
1,618,195.11
$1,915,864,186.81
Dec. 31, 1919

Capital paid in
Surplus
Government deposits
Member bank reserve deposits
Other deposits, including foreign gov't credits.
Deferred availability items

$26,372,650.00
56,414,456.04
11,297,895.88
702,431,237.92
12,133,377.48
93,318,901.11

$22,390,750.00
45,081,932.63
5,848,393.50
755,951,452.59
45,395,971.09
168,870,359.39

Total gross deposits
Federal Reserve notes in actual circulation.. .
Federal Reserve bank notes in circulation—
net liability
All other liabilities
Total liabilities

819,181,412.39
867,480,630.00

976,066,176.57
807,615,970.00

38,833,200.00
5,887,825.92
$1,814,170,174.35

54,673,000.00
10,036,357.61
$1,915,864,186.81




FEDERAL RESERVE BANK OF NEW YORK

63

Exhibit B

EARNINGS AND EXPENSES
For the Calendar Years 1920 and 1919
EARNINGS

Discounted bills
Purchased bills
United States securities
Deficient reserve penalties (including interest)
Sundry profits
Total earnings

1920

1919

$49,839,182.52
8,323,050.37
1,975,648.96
141,664.90
245,775.02

$29,935,910.97
3,326,838.44
1,888,497.28
36,405.58
144,759.97

$60,525,321.77

$35,332,412.24

$221,867.58

$181,874.61

1,200.00

1,150.00

270.53

316.48

88.63
27,525.00
4,650.92
383,759.41
3,479,269.85
166,448.33
199,212.55
23,743.04
9,323.47
301,796.88
3,328.13
32,933.78
49,045.21
114,779.04
3,956.47
26,282.66
3,076.73
270,383.29
55,623.39

139.22
24,345.00
3,384.52
294,794.50
1,982,807.00
61,207.51
781,297.44
29,014.57
11,250.00
290,243.41

199,478.34
204,161.17

103,904.55
142,250.97

5,782,204.40

4,613,219.83

648,392.46
159,766.27
207,401.48
201,490.43

642,430.43
105,166.64
169,514.40
204,013.60

$6,999,255.04

$5,734,344.90

CURRENT EXPENSES

Expense of operation:
Assessments for expenses Federal Reserve
Board
Federal advisory council (fees and travelling
expenses)
Governors' conferences (including travelling
expenses)
Federal Reserve agents' conferences (including
travelling expenses)
Directors' fees
Travelling expenses
Salaries:
Officers
Clerical staff
Special officers and watchmen
All other
Officers' and clerks' travelling expenses
Legal fees
Rent
Taxes and fire insurance
Telephone
Telegraph
Postage
Expressage
Insurance and premiums on fidelity bonds....
Light, heat and power
Printing and stationery
Repairs and alterations
Cost of currency shipments to and from member and non-member banks
All other
Total expenses of operation
Cost of Federal Reserve currency (including
expressage and insurance)
Miscellaneous charges, account note issues..
Taxes on Federal Reserve bank note circulation
Furniture and equipment
Total current expenses.



'32,489.79
33,235.36
116,071.54
54,395.47
98,816.68
2,859.23
236,653.61
130,718.37

64

SIXTH ANNUAL REPORT
Exhibit B—Continued

EARNINGS AND EXPENSES
Profit and Loss Account
1920
Earnings
Current expenses
Current net earnings
Additions to current net earnings on account of:
Special reserve previously set aside
Assessment for expenses of Federal Reserve
Board previously charged to profit and
loss
All other

Total
Deductions from current net earnings on
account of:
Estimated value of buildings now standing
on main bank building site, charged off
Preliminary expenses in connection with
erection of main bank building
Estimated value of old buildings on building
site, charged off
Reserve against present high construction
costs, building
Reserve for depreciation United States
securities
Assessment for expenses of Federal Reserve
Board
Reserve for depreciation of foreign balances .
Reserve for self insurance
All other

1919

$60,525,321.77
6,999,255.04

$35,332,412.24
5,734,344.90

$53,526,066.73

$29,598,067.34

200,000.00
168,681.70
6,050.03

31,095.96

$53,900,798.46

$29,629,163.30

$900,031.72
$137,785.70
147,890.94
100,000.00
25,299.60
106,164.69
250,000.00
5,526.89

168,681.70
325,741.35
200,000.00
75,089.00

$772,667.82

$1,669,543.77

Net earnings available for dividends, surplus,
and franchise tax

$53,128,130.64

$27,959,619.53

Dividends paid
Transferred to surplus fund
Franchise tax paid United States Government.

$1,477,096.58
12,332,523.41
39,318,510.65

$1,291,047.84
23,964,678.06
2,703,893.63

Total deductions




FEDERAL RESERVE BANK OF NEW YORK

65

Exhibit C

CAPITAL ACCOUNT RECONCILIATION
January 1 to December 31, 1920
Capital paid in January 1, 1920

$22,390,750

SUNDRY INCREASE:

Due to increase of capital and surplus of member banks.. $3,855,900
Due to organization of new National banks
553,650
Due to admission of State banks and trust companies. . . 1,059,900

5,469,450
27,860,200

SUNDRY DECREASE:

Due to banks liquidating
Due to banks withdrawing from system

;'
1,477,950
9,600
1,487,550

Paid in capital December 31, 1920




$26,372,650

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68

SIXTH ANNUAL REPORT
Diagram 1

EARNING ASSETS
MILLIONS
OF DOLLARS
200

75

50

PERCEIJTAGE OFWA* PAPIR TO TOTAL DISCOUNTS

JAN.

FEB. MAR. APR. MAY JUNE JULY AUG-. SEPT. OCT. NOV. DEC.




FEDERAL RESERVE BANK OF NEW YORK
Diagram 2

LIABILITIES, RESERVES, AND RESERVE RATIO
PER CENT.
BEFORE

>

40

AFTER

20
RESERVE
AFTER

PERCENTAGES

INTERBANK

BEFORE

AND

TRANSACTIONS

0
MILLION*
OF DOLLARS
1000

V
500

DEPOSIT

LIABILITY

1000

500

FEDERAL RESERVE NOTE CIRCULATION

1600

NOTE AND DEPOSIT LIABILITIES

iaoo

600
TOTAL RESERVES

JAN. FEB. MAR. APR. MAY JUNE JULY AUG-.SEPT OCT NOV DEC.




69

Exhibit E

RATES OF DISCOUNT
Effective at the Federal Reserve Bank of New York in 1920
Rediscounts
Period

Collateral Loans Secured By

AgriSecured by Secured
Comcultural
Liberty by Certifi- Paper 91
mercial
Bonds cates of In- days to 6
Paper
1-90 days 1-90 days debtedness Months

January 1-22...
Jan. 23-Feb. 5..
February 6-25..
February 26-29
March
April
May
June
July
August
September
October
November
December




6
6
6
6
6
6
7
7
7
7
7
7
7

6
6
6
6
6
6
6

5
6
6
6
6
6
6
7
7
7
7
7
7
7

Bankers
Acceptances
1-90 days
4%
5
5
5
5
5
5
6
6
6
6
6
6
6

Certificates of
Indebtedness

AuthorCom- Bankers
ized
Liberty mercial AcceptRates
Bonds Paper
ances Minimum

W
4M
5
5
5
5

Open Market
Purchases
Bankers Acceptances

5
5
5
5
5
5
6
6
6
6
6
6
6

C/J

Actual
Rates

4

5M
5
5
5
5
5
5
5
5
5
5
5
5

a

5^6

5M-6
M6

FEDERAL RESERVE BANK OF NEW YORK

71

Exhibit F

GOLD RESERVES
On Friday of Each Week in 1920
(Amounts in thousands of dollars)

Date

Gold
Coin and
Certificates

Gold
Settlement
Fund

Gold
Gold
Gold
with
Total
Federal Redemp with
Gold
tion
Foreign Reserves
Reserve
Fund Agencies
Agent

2.
9.
16.
23.
30.
February 6.
13.
20.
27.
March
5.
12.
19.
26.
2.
April
9.
16.
23.
30.
May
7.
14.
21.
28.
4.
June
11.
18.
25.
July
2.
9.
16.
23.
30.
August
6.
13.
20.
27.
September 3 .
10.
17.
24.
October
1.
8.
15.
22.
29.
November 5 . .
12..
19.
26.
December 3 . ,
10.
17.,
24. .
31..

154,012
140,823
124,643
137,103
136,008
115,488
113,966
112,668
118,311
97,804
83,577
72,586
65,833
83,673
95,412
96,202
95,517
83,532
85,520
83,861
81,488
81,918
79,215
82,220
77,728
83,530
83,504
82,218
82,078
89,114
88,017
89,755
91,441
95,413
97,014
77,021
63,613
81,829
99,397
110,897
133,402
110,165
78,568
82,470
92,153
86,909
87,038
99,490
109,555
118,419
111,078
137,258
132,723

41,101
11,154
94,198
61,528
77,954
70,049
74,882
43,078
23,501
25,625
48,093
28,467
57,898
95,445
58,364
71,215
109,558
63,545
88,713
84,955
118,277
125,826
103,300
106,861
110,284
71,628
103,090
83,980
83,143
50,381
57,504
50,589
29,248
36,576
24,116
50,102
75,564
25,537
100,042
42,728
37,807
63,835
46,425
66,250
57,410
60,441
75,969
74,128
30,128
42,792
24,557
52,652
45,902

306,756
300,520
284,286
283,218
281,778
290,732
299,876
304,712
308,402
308,798
308,338
307,936
312,568
311,810
314,749
313,546
308,204
317,217
306,316
305,072
294,136
285,599
285,182
284,531
284,137
283,547
282,362
281,827
280,907
280,222
279,139
278,544
277,632
277,126
275,950
275,070
269,181
268,712
267,490
266,519
235,642
234,475
264,013
262,732
251,920
250,750
250,002
249,032
248,236
237,200
245,765
235,046
254,575

January




25,000
25,000
25,000
25,000
25,088
25,191
24,986
24,918
25,000
27,000
26,988
27,000
27,000
26,980
27,000
27,000
26,965
26,986
26,998
27,000
26,994
33,986
33,993
33,862
33,966
33,975
33,914
35,979
35,917
35,971
35,977
35,943
35,957
35,983
35,928
35,803
35,899
35,857
35,985
35,982
37,925
37,924
37,911
37,965
37,955
38,374
38,000
38,000
38,000
38,000
38,000
39,000
39,000

48,195
45,260
44,158
43,057
41,956
41,956
41,406
41,406
41,406
41,406
41,390
41,390
41,390
41,390
41,390
41,390
41,390
41,390
41,390
41,390
41,390
40,932
40,931
40,931
40,931
40,931
40,931
40,931
40,932
40,931
40,931
40,932
40,931
40,905
40,905
40,905
40,906
40,905
40,905
40,905
32,855
31,780
29,472
27,276
28,315
28,347
27,268
25,638
24,677
24,862
24,862
1,211
1,211

575,064
522,757
572,285
549,906
562,784
543,416
555,116
526,782
516,620
500,633
508,386
477,379
504,689
559,298
536,915
549,353
581,634
532,670
548,937
542,278
562,285
568,261
542,621
548,405
547,046
513,611
543,801
524,935
522,977
496,619
501,568
495,763
475,209
486,003

473,913
478,901
485,163
452,840
543,819
497,031
477,631
478,179
456,389
476,693
467,753
464,821
478,277
486,288
450,596
461,273
444,262
465,167
473,411

SIXTH ANNUAL REPORT

72

ExhibitIG

DISCOUNTS AND ADVANCES
Total Made Each Month, 1919 and 1920
1920

1919

Month
Number
of
Items

Amount

Number
of
Items

Amount

15,090
10,884
15,771
11,249
11,038
10,858
12,443
17,149
18,291
16,922
18,169
22,598

Total

$3,454,051,296.76
3,798,318,694.90
3,755,959,629.07
3,165,858,324.82
3,181,043,819.41
3,425,122,639.83
4,044,469,874.32
5,091,646,803.95
4,412,393,284.07
4,914,285,965.04
5,088,376,344.22
6,207,902,171.32

9,229
7,906
6,050
7,314
8,184
9,645
11,759
9,329
11,219
15,601
13,650
17,835

$3,468,059,283.23
2,667,770,966.68
2,631,731,389.65
2,678,055,774.51
4,067,069,831.02
3,102,797,327.60
3,989,474,706.53
3,528,702,367.80
3,495,701,094.17
4,472,425,043.59
4,466,207,075.38
3,881,496,273.71

180,462

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

$50,539,428,847.71

127,721

$42,449,491,133.87

Type and Maturity of Bills Held December 31, 1920
Maturity

Within 15 days
16-30 days
31-60 days
61-90 days

Discounts or
Advances
Based on
United States
Securities

Discounts or
Advances
Based on
Commercial
Paper

Bankers
Acceptances

Total

$345,178,695.10 $349,183,694.88 $39,501,424.57 $733,863,814.55
31,287,725.59 22,436,171.28 30,330,571.03 84,054,467.90
57,144,048.21 35,911,132.12 35,977,382.91 129,032,563.24
9,155,476.54 7,930,996.02 38,227,726.18
21,141,253.62

Total, Dec. 31,1920.. $454,751,722.52 $416,686,474.82 $113,740,374.53 $985,178,571.87
Average maturity,
28 days
Total, Dec. 31,1919.. $562,089,842.45 $228,713,445.79 $202,902,609.54 $993,705,897.78
Average maturity,
43 days
Total, Dec. 31,1918.. $652,567,674.72 $44,773,780.97 $77,576,632.94 $774,918,088.63
Average maturity,
27 days



Exhibit H

OPEN MARKET ACCEPTANCE PURCHASES
Bills Bought for the Account of the Federal Reserve Bank of New York in 1920

Month

Bankers
Acceptances
Import
and Export

Bankers
Domestic
Acceptances

Indorsed Trade
Bills of
Foreign Origin

Bills Drawn
to Furnish
Dollar Exchange

Domestic
Trade
Acceptances

$251,590.37

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

$123,316,879.70
140,059,287.17
132,510,580.54
72,014,129.42
121,568,943.14
105,244,645.06
84,395,279.90
95,355,216.61
86,614,916.00
107,592,942.78
103,679,532.63
100,188,208.70

$26,711,390.27
31,841,680.29
25,696,877.71
17,988,699.18
33,759,527.12
27,477,744.08
20,681,821.57
20,784,353.24
18,923,206.83
29,027,244.16
30,983,988.07
31,805,843.06

$1,280,412.53
1,449,235.44
1,920,607.59
2,747,506.94
1,001,929.28
22,055,797.18
9,220,054.00
12,121,754.90
1,546,284.54
719,057.07
705,804.79
988,380.00

$1,506,100.00
2,865,000.00
3,842,097.40
695,240.00
2,172,727.01
4,306,325.00
1,252,551.83
4,245,136.57
4,528,900.65
7,409,433.00
7,380,185.40
8,634,294.90

Total.

$1,272,540,561.65

$315,682,375.58

$55,756,824.26

$48,837,991.76




Total

' 116,245.66
534,800.86
250,000.00
255,000.00

$153,066,372.87
176,215,202.90
164,495,841.81
93,743,642.43
159,108,907.14
160,569,277.79
115,739,767.44
132,506,461.32
111,729,553.68
145,283,477.87
142,999,510.89
141,871,726.66

$4,511,989.55

$1,697,329,742.80

"525,678.57
298,066.89
605,780.59
1,484,766.47
190,060.14

i

Exhibit H—Continued

OPEN MARKET ACCEPTANCE PURCHASES
Bills Bought for the Account of Other Federal Reserve Banks in 1920
Bills Drawn
to Furnish
Dollar Exchange

$12,365,096.09
11,908,379.20
9,340,569.80
14,055,766.02
11,783,530.63
10,500,156.65
7,512,165.56
12,376,930.86
10,623,299.69
12,407,680.52
4,424,876.51
9,695,137.99

$40,537.87

$950,000.00
85,000.00
400,523.95
911,068.98
161,800.00
888,380.00
596,195.14
756,025.00
1,455,759.40
2,078,715.38
1,012,835.19
1,539,474.35

$87,705,046.82
62,197,665.68
79,703,584.21
71,329,821.55
44,785,827.48
56,212,005.81
44,797,448.81
69,154,168.13
70,458,195.65
61,480,798.68
35,253,430.52
47,811,752.27

$126,993,589.52

$65,537.87

$10,835,777.39

$730,889,745.61

Bankers
Domestic
Acceptances

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

$74,349,412.86
50,204,286.48
69,962,490.46
56,362,986.55
32,840,496.85
44,823,469.16
36,664,088.11
56,021,212.27
58,379,136.56
46,994,402.78
29,815,718.82
36,577,139.93

Total

$592,994,840.83

Month




25,000.00

Domestic
Trade
Acceptances

a

Indorsed Trade
Bills of
Foreign Origin

Bankers
Acceptances
Import
and Export

Total

FEDERAL RESERVE BANK OF NEW YORK

75

Exhibit H—Continued

OPEN MARKET ACCEPTANCE PURCHASES
Purchased Bills Sold to Other Federal Reserve Banks
1920

Federal Reserve Bank of

$30,673,000
35,148,000
33,671,000

Boston
Philadelphia
Cleveland
Chicago
St. Louis
Minneapolis.. .
Kansas City
Dallas
San Francisco

1919

47,722,000
$147,214,000

. .

$50,265,000
65,113,000
15,070,000
19,282,000
35,028,000
5,012,000
122,969,000
$312,739,000

..

Total

Exhibit I

ACCEPTANCES REDISCOUNTED IN 1920
Distribution by Months and Classes of Bills
Trade Acceptances
Month

Bankers
Acceptances
Domestic

January

Foreign

Total

$10,701,281.04
3,585,778.38
10,993,936.20
13,220,041.98
4,967,778.89
2,065,064.88
3,534,342.33
1,831,005.11
2,243,958.55
5,683,634.13
6,018,828.02
5,808,623.08
1920 $70,654,272.59

$6,296,046.39
4,194,039.31
6,709,913.63
3,057,105.14
3,908,370.59
2,054,995.64
1,906,410.13
3,796,904.98
2,666,388.53
2,500,745.63
2,779,839.21
1,693,855.84
$41,564,615.02

$38,624.11
262,300.00
654,802.50
98,327.40
352,863.89
88,000.00
206,300.00
417,500.00
1,322,580.52
1,172,608.28
12,647.00
64,005.63
$4,690,559.33

$17,035,951.54
8,042,117.69
18,358,652.33
16,375,474.52
9,229,013.37
4,208,060.52
5,647,052.46
6,045,410.09
6,232,927.60
9,356,988.04
8,811,314.23
7,566,484.55
$116,909,446.94

Total, 1919 $61,771,256.65

$41,197,024.82

$15,936,065.20

$118,904,346.67

February
March
April
May

June

July
August
September
October
November
December
Total,




SIXTH ANNUAL REPORT

76

Exhibit J

PURCHASES FROM THE TREASURY
Special Certificates of Indebtedness Bought in 1920
Date

Amount

life of
Issue

Amount

Date

Life of
Issue
in
Days

in

Days
2
3
5
6
7
16
17
19

$12,000,000
23,000,000
39,000,000
21,000,000
24,000,000
3,000,000
5,000,000
8,000,000

1
2
1
1
1
1
2
1

February 2
3
4
11

29,000,000
48,000,000
7,000,000
3,000,000

15
16
17
18
19
20
22
23
24
25
27
29
30
31

125,000,000
121,000,000
92,000,000
60,000,000
61,000,000
73,000,000
55,000,000
26,000,000
19,000,000
3,000,000
2,000,000
1,000,000
2,000,000
8,000,000

1
1
1
1
1
2
1
1
1
1
2
1
1
1

1
2
3
5
6
7
8
9
10
12
13
14
15
16
17
19
20
21

27,000,000
57,000,000
64,000,000
59,000,000
45,000,000
45,000,000
47,000,000
48,000,000
50,000,000
57,000,000
38,000,000
45,000,000
27,000,000
36,000,000
37,000,000
31,000,000
17,000,000
13,000,000

1
1
2
1
1
1
1
1
2
1
1
1
1
1
2
1

June

11. . . .
12
15....
16. . . .
17. . . .
18. . . .
19. . . .
21
22. . . .
23....
24
25. . . .
26....
28. . . .
29. . ..
30....

$5,000,000
14,000,000
94,000,000
93,000,000
79,000,000
54,000,000
58,000,000
53,000,000
35,000,000
33,000,000
32,000,000
32,000,000
34,000,000
34,000,000
26,000,000
23,000,000

1
1
1
2
1
1
1
1
1
3
1
1
1
1
2
1

July

1....
2
3

29,000,000
37,000,000
45,000,000
32,000,000
29,000,000
15,000,000
13,000,000
14,000,000
17,000,000
10,000,000
9,000,000
12,000,000
12,000,000
15,000,000
12,000,000
9,000,000
8,000,000
7,000,000
2,000,000
10,000,000
9,000,000

1
1
1
2
1
1
1
1
1
1
1
2
1
1
1
1
1
1
1
2
1

1
1
1
2

January

March

April




1
1

6
7
8

9
10
12
14
15
16
17
19
20
21
22
23
26
30
31
August

2. . ..

11,000,000

September 1. . ..
13....
14
15
16....
17
18
20
21
22

15,000,000
7,000,000
1,000,000
146,000,000
134,000,000
108,000,000
79,000,000
58,000,000
19,000,000
7,000,000

FEDERAL RESERVE BANK OF NEW YORK

77

Exhibit J—Continued

PURCHASES FROM THE TREASURY
Special Certificates of Indebtedness Bought in 1920
Amount

Date

Life of
Issue

Date

Amount

Days

Life of
Issue
Days

15
16....
18....
20....
22
23....
25....

$6,000,000
9,000,000
7,000,000
2,000,000
6,000,000
8,000,000
8,000,000

1
2
1
1
1

November 24
26
27
29

$15,000,000
3,000,000
1,000,000
5,000,000

2

2
1

11,000,000
5,000,000
11,000,000
14,000,000
14,000,000
16,000,000
20,000,000
7,000,000

1
1
1
1
1
2
1
1

74,000,000
51,000,000
60,000,000
62,000,000
45,000,000
39,000,000
42,000,000
18,000,000
18,000,000
16,000,000

1
1

November 1 5 . . . .

December 15
16
17
18
20
21
22
23
24
27

October

16....
17....
18...
19....
20
22....
23....




1
2

1

1
2
1
1
1
1
3
1

n

SIXTH ANNUAL REPORT
Exhibit K

FEDERAL RESERVE NOTES
Movement between Federal Reserve Bank of New York and
other Federal Reserve Banks, 1920
Notes of Federal Reserve Bank
of New York
Received from Other Federal Reserve Banks
From
Atlanta
Boston
Chicago
Cleveland
Dallas
Kansas City
Minneapolis
Philadelphia
Richmond
St. Louis
San Francisco
Total

Notes of Other Federal Reserve Banks
Shipped by
Federal Reserve Bank of New York

Amount
$14,148,750
59,214,000
28,409,000
23,654,500
4,826,150
4,963,350
2,598,000
56,466,500
16,953,300
8,609,155
12,048,005
$231,890,710

To
Atlanta
Boston
Chicago
Cleveland
Dallas
Kansas City
Minneapolis
Philadelphia
Richmond
St. Louis
San Francisco
Total

Amount
$19,925,100
72,683,600
58,504,800
54,226,950
7,407,550
7,046,400
5,954,400
77,547,950
29,435,850
7,963,450
17,907,800
$358,603,850

Issues, Retirements, and Amount Outstanding
Total issued to the bank by the Federal Reserve Agent:
1914 to 1919, inclusive
During 1920

$1,944,033,000.00
373,080,000.00
$2,317,113,000.00

Notes unfit for circulation retired:
1914 to 1919, inclusive
During 1920

$1,004,317,045.00
276,441,725.00
al,280,758,770.00

Amount outstanding December 31, 1920
Amount outstanding December 31, 1920:
In actual circulation
Held by Federal Reserve Bank
Total
On December 31, 1920 the Federal Reserve Agent held against
Federal Reserve Notes:
Gold and gold certificates
Eligible paper
Total

$1,036,354,230.00
$867,480,630.00
168,873,600.00
$1,036,354,230.00

$254,575,330.89
953,166,744.19
$1,207,742,075.08

alncludes $59,033,000.00 of notes fit for circulation returned by the bank and by
the United States Treasurer.




Exhibit L

.

CHECK COLLECTIONS
Classification of Checks Handled by the Federal Reserve Bank of New York in 1920

Month

On Treasurer
of United States
Number

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

On Banks in Other
Federal Reserve Districts
Number

Amount

Amount

On New York
Clearing House
Number

802,396
920,786 $585,256,867
786,292 $254,935,539
636,261
827,071 498,620,919
654,581 198,574,757
713,530 250,540,924 1,053,198 611,967,362 1,094,851
829,982
271,326,670 1,051,141 650,673,688 1,068,742
944,091
613,402,076
989,974
708,947
162,077,913
987,492 640,970,057 1,008,152
858,095 480,065,694
900,985 628,040,931 1,068,217
811,861
119,650,799
976,099
854,168 578,882,018
925,990
187,567,095
596,389,625 1,016,888
935,814
1,023,849
158,963,066
1,020,041
93,398,075 1,039,756 683,090,234 1,124,395
1,046,157
121,256,901 1,010,556 594,254,875 1,033,826
1,332,918 139,401,715 1,026,311 557,661,361 1,132,514

Amount
$2,365,383,469
1,755,700,536
2,495,143,239
2,222,597,477
2,122,793,499
2,469,268,066
2,064,899,200
2,037,210,094
2,129,841,730
2,232,946,687
1,953,870,635
2,179,989,142

On All Other Banks
in Second District
Number

Amount

3,534,985 $2,048,734,984
2,833,652 1,677,595,987
3,736,677 1,623,032,112
3,597,722 1,394,963,547
3,519,387 1,300,750,537
3,959,917 1,411,358,826
3,900,434 1,345,446,966
3,616,840 1,245,341,095
3,843,726 1,321,426,297
4,081,958 1,375,636,690
4,015,922 1,253,119,992
4,532,132 1,242,229,714

TOTAL
Number

Amount

6,044,459 $5,254,310,859
4,951,565 4,130,492,199
6,598,256 4,980,683,637
6,547,587 4,539,561,382
6,162,399 4,199,024,025
6,813,656 5,001,662,643
6,681,497 4,158,037,896
6,373,097 4,049,000,302
6,820,277 4,206,620,718
7,266,150 4,385,071,686
7,106,461 3,922,502,403
8,023,875 4,119,281,932

1
5

TOTAL.. . 10,712,243 $2,437,759,148 11,597,252 $7,239,210,013 11,906,432 $26,029,643,774 45,173,352 $17,239,636,747 79,389,279 $52,946,249,682
Buffalo Total

139,471

28,171,866

1,658,245

407,000,921 al,844,891

al,278,262,181

4,004,538

665,428,177

7,647,145

2,378,863,145

GRAND
TOTAL. 10,851,714 $2,465,931,014 13,255,497 $7,646,210,934 613,751,323 6$27,307,905,955 49,177,890 $17,905,064,924 87,036,424 $55,325,112,827
a On Buffalo Clearing House.



6 On New York or Buffalo Clearing House.

I

Exhibit M

TELEGRAPHIC TRANSFERS
Daily Average
Number of Transfers
1917
January...
February..
March....
April
May
June
July
August....
September.
October.. .
November.
December.




I

Amount Transferred

Month
1918

1919

1920

31
35
38
48
73
70

65
80
88
101
112
110
135
142
168
188
187
209

211
213
213
221
235
262
272
273
306
330
357
359

363
376
414
410
442
476
484
474
505
546
609
712

1917

$31,801,000.00
28,536,000.00
30,893,000.00
37,304,000.00
47,191,000.00
50,308,000.00

1918
$49,137,729.59
50,063,542.32
42,693,293.87
54,739,515.64
55,045,758.84
70,647,040.30
67,710,105.00
54,046,227.58
55,639,814.09
98,785,077.26
68,017,973.77
86,148,696.73

1919
$61,452,380.36
54,293,219.90
60,427,470.97
49,145,844.50
47,515,234.73
56,751,256.15
69,269,382.04
60,844,434.71
69,264,574.21
59,560,197.96
61,805,748.66
69,557,755.09

1920
$61,969,127.04
55,094,494.37
57,756,015.93
53,274,829.54
49,334,573.63
52,218,807.81
51,603,953.55
48,292,337.03
60,178,809.63
63,504,000.00
56,409,000.00
62,275,400.66

>
f

3

Exhibit N

GOLD SETTLEMENT FUND
Amounts Received and Paid by the New York Federal Reserve Bank in 1920 in Settlement of
Accounts Due
From or to Federal Reserve Bank of
Atlanta.
Boston..
Chica
Cleve
Dallas
Kansas City
Minneapolis
Philadelphia
Richmond
St. Louis
San Francisco
Treasurer of the United States
Federal Reserve Agent
Deposited by us in Subtreasury . . . .
Withdrawn by us from Subtreasury
Gold redemption fund
Total.
Gain.




Received
$844,681,972.61
4,990,355,229.22
3,793,781,256.01
2,885,380,482.07
574,634,071.54
780,810,453.69
498,723,254.34
4,849,987,169.18
1,994,633,008.85
1,005,918,590.76
1,624,512,817.32
419,494,500.00
148,000,000.00
25,000,000.00

Paid
$1,145,243,897.91
5,059,570,748.92
4,055,872,998.98
2,599,211,754.23
797,298,971.72
818,433,163.73
500,632,185.91
4,536,732,160.90
2,014,369,365.59
1,085,910,569.07
1,546,370,417.40
99,341,534.45
130,000,000.00

10,666,000.66

Net Gain

$300,561,925.30
69,215,519.70
262,091,742.97
$286,168,727.84

313,255,008.28
78,142,399.92
320,152,965.55
18,000,000.00
25,000,000.00

6,000,000.00

$24,435,912,805.59

$24,404,987,768.81
$30,925,036.78

Net Loss

222,664,900.i8
37,622,710.04
1,908,931.57
19,736,356.74
79,991,978.31

16,666,000.66
6,000,000.00

$1,040,719,101.59

$1,009,794,064.81

§

$30,925,036.78

09

82

SIXTH ANNUAL REPORT
Exhibit O

NATIONAL BANKS WITH FIDUCIARY POWERS
Authorizations listed according to States, 1915 to 1920
The Federal Reserve Board has authorized the National banks of this district
listed below to exercise one or morefiduciarypowers as follows:
(1 Trustee
(2. Executor
(3) Administrator
(4) Registrar of Stocks and Bonds
(5) Guardian of Estates
(6) Assignee
(7) Receiver
(8) Committee of Estates of Lunatics
(9) Any other fiduciary capacity in which State banks, trust
companies or other corporations which come into competition with National banks are permitted to act under the
laws of the State in which the National bank is located.
The numerals opposite the name of each bank, which refer to the list given above,
indicate the power or powers it is authorized to exercise.
Place
NEW YORK STATE
Adams
Albany
u
a

Amsterdam
Auburn
a

Brooklyn
u
Buffalo
Canandaigua
Canton
u

Carthage
Catskill
Clayton
Cooperstown
Corning
Cuba
Dunkirk
u

Edwards
Elmira
u

Far Rockaway
Fredonia
Freeport
Fulton
Geneva
Glens Falls
Gloversville
u

Goshen
Granville
Hempstead

Name of Bank

Farmers National Bank
First National Bank
National Commercial Bank & Trust Co.1
N. Y. State National Bank
First Nat'l Bank (conditional)
Cayuga County National Bank
The National Bank of Auburn
First National Bank
Nassau National Bank
Mfrs. & Traders National Bank
Canandaigua National Bank
First National Bank
St. Lawrence Co. Nat'l Bank
Carthage National Bank
Catskill National Bank
National Exchange Bank
First National Bank
Second National Bank
First National Bank & Trust Company1
Cuba National Bank .
Lake Shore National Bank
Merchants National Bank
Edwards National Bank
Merchants National Bank
Second National Bank
Nat'l Bank of Far Rockaway
National Bank of Fredonia
Citizens National Bank
Citizens National Bank .
Geneva National Bank
Merchants National Bank
City National Bank
Fulton County National Bank
National Bank of Orange County
Farmers National Bank
Washington County National Bank
First National Bank

Name changed during year.




Powers Granted

1 to 9
4
1 to8
1 to 9
Ito9
1 to 8
1 to9
1 to 9
1 to 9
Ito9
Ito9
Ito9
Ito8
Ito9
1 to 8
4
1 to 9
1 to 8
1 to 8
1 to 9
1 to 9
1 to 8
4
1 to7
1 to 9
4
1 to 9
1 to9
1 to 9
4

1 to 8
1 to 9
1 to9
Ito9
4
4
Ito9

FEDERAL RESERVE BANK OF NEW YORK
Place
Herkimer
Hoosick Falls.
Hornell
Hudson
Hudson Falls.
a

I lion
Ithaca
Jamestown. . .
Kingston.
Lackawanna.
Little Falls. .
Lockport
Lowville
Middletown
Mineola
Morristown
Mount Vernon.
Newburgh
New York

North Tonawanda.
Norwich
Nyack
Ogdensburg.
Olean
Oneida
Oneonta
Oswego..
Ovid
Peekskill.
Plattaburg.
Liquidated



Name of Bank
Herkimer National Bank
Peoples National Bank
Citizens National Bank
Farmers National Bank
First National Bank
Peoples National Bank
Sandy Hill National Bank
Ilion National Bank
First National Bank
American National Bank
National Chautauqua County Bank.
First National Bank of Rondout
Rondout National Bank
Lackawanna National Bank
Little Falls National Bank
National Exchange Bank
Niagara County National Bank
Black River National Bank
Merchants National Bank
First National Bank
Frontier National Bank
First National Bank
Highland National Bank
American Exchange National Bank..
Atlantic National Bank
Bank of New York, N. B. A
Bronx National Bank
Chase National Bank
Chatham & Phenix National Bank. .
Chemical National Bank
Citizens National Bank2
Coal & Iron National Bank
First National Bank
Garfield National Bank
Gotham National Bank
Hanover National Bank
Harriman National Bank
Irving National Bank
Liberty National Bank2
Lincoln National Bank
Mechanics & Metals National Bank.
Merchants National Bank
National American Bank
National Bank of Commerce
National City Bank
National Park Bank
Seaboard National Bank
State National Bank
Chenango National Bank
National Bank of Norwich
Nyack National Bank
National Bank of Ogdensburg
Exchange National Bank
Oneida Valley National Bank
Citizens National Bank
Wilber National Bank
Second National Bank
First National Bank
Peekskill National Bank
Westchester County 2National Bank..
ity National Bank

83

Powers Granted
1 to 8
1 to 8
1 to 9
1 to 9
1 to 9
1 to 9
Ito9
Ito9
Ito9
1 to 9
1 to 8
Ito9
1 to 9
Ito9
Ito9
Ito9
1 to9
1 to 9
1 to 9
4
4
Ito8
Ito9
Ito9
Ito9
Ito9
4
1 to 9
1 to9
Ito9
Ito8
1 to9
1 to 9
Ito9
Ito9
Ito8
Ito9
Ito9
1 to9
1 to 8
1 to 8
1 to 9
1 to 9
Ito8
1 to9
1 to 9
1 to 9
1 to 9
1 to 8
1 to9
1 to9
1 to 8
1 to 9
1 to 9
to9
to9
to 9
to9
to8

84

SIXTH ANNUAL REPORT
Name of Bank

Place

Plattsburg National Bank& Trust Co. 1 ...
First National Bank
First National Bank
National Bank of Port Jervis
a
Fallkill National Bank
Poughkeepsie
Farmers & Manufacturers National Bank.
Richfield S p r i n g s . . . . First National Bank
Suffolk County National Bank
Riverhead
Lincoln National Bank1
Rochester
Farmers National Bank
Rome
Saratoga S p r i n g s . . . . Saratoga National Bank
First National Bank
Southampton
Richmond Borough National Bank
Stapleton
Suffern National Bank
Suffern
Tarry town National Bank
Tarry town
Tr
Manufacturers National Bank
°*
Union National Bank
Utica City National Bank
Utica
Oneida National Bank
u
National Bank of Vernon
Vernon
First National Bank
Walton
Wyoming National Bank
Warsaw
Jefferson County National Bank
Watertown
Watertown National Bank
u
National Bank of Westfield
Westfield
First National Bank
Yonkers
Plattsburg
Port Chester
Port Jervis

NEW JERSEY
Arlington
Asbury Park
Atlantic Highlands...
Belvidere
Bloomfield
Boonton
Bound Brook
Cranbury
Dover
Elizabeth
u

Frenchtown
Garfield
Hoboken
a

Jersey City
Lambertville
Long Branch
Montclair
Morristown
u

Newark
u
u
a

New Brunswick
u

Orange
Passaic
Paterson
1

First National Bank
Merchants National Bank
Atlantic Highlands National Bank
Belvidere National Bank
Bloomfield National Bank
Boonton National Bank
First National Bank
First National Bank
National Union Bank
National State Bank
Peoples National Bank
Union National Bank
First National Bank
First National Bank
Second National Bank
First National Bank
LambertviUe National Bank
Citizens National Bank
First National Bank
First National Bank
National Iron Bank
Merchants & Manufacturers Nat'l Bank 1 ..
National Newark & Essex Bkg. Company.
National State Bank
North Ward National Bank
National Bank of New Jersey
Peoples National Bank
Orange National Bank
Second National Bank
Passaic National Bank
First National Bank

Name changed during year.




* Liquidated

Powers Granted
1, 2, 3, 4, 5,7,8,9
Ito9
Ito9
Ito9
1 to9
Ito9
4
4
4
1 to9
4
Ito8
4
1 to9
1, 2, 3, 5, 6, 7,8, 9
1 to9
Ito9
Ito9
Ito9
1, 2, 3, 5, 6, 7
1 to9
1 to9
1 to 8
1 to8
4
1 to9

Ito9
1 to8
1 to 3
1 to 8
1 to4
1 to9
Ito4
Ito4
Ito4
Ito7
Ito9
1, 4
Ito9
Ito4
Ito9
Ito9
Ito8
Ito9
Ito9
Ito9
Ito9
Ito4
1 to9
1 to9
Ito4
Ito9
1 to9
Ito8
Ito9
Ito9
1 to9

FEDERAL RESERVE BANK OF NEW YORK
Place
Paterson
«
Perth Amboy
Phillipsburg
Plainfield
Red Bank
Ridgewood
Rutherford
Somerville
South Amboy
South River
Sussex

CONNECTICUT
Bridgeport
a
u

Danbury
Greenwich
Norwalk
Ridgefield
South Norwalk
Stamford




Name of Bank

85

Powers Granted

Paterson National Bank
Second National Bank
City National Bank
First National Bank
Phillipsburg National Bank
City National Bank
Broad Street National Bank
Second National Bank
Citizens National Bank
First National Bank
Rutherford National Bank
Second National Bank
First National Bank
First National Bank
Fanners National Bank

Ito9
Ito9
Ito9
Ito9
Ito8
Ito4
Ito9
Ito9
1 to9
Ito9
Ito4
Ito4
Ito9
Ito9
Ito4

City National Bank
Connecticut National Bank
First Bridgeport National Bank
City National Bank
Danbury National Bank
Greenwich National Bank
National Bank of Norwalk
First National Bank
City National Bank
First Stamford National Bank

Ito9
Ito9
Ito9
Ito9
Ito9
Ito8
Ito4
1 to9
Ito4
Ito9

SIXTH ANNUAL REPORT

86

Exhibit P

ACCEPTORS TO 100 PER CENT.
List of Banks Receiving Permission, 1915 to 1920
The following banks have received permission to accept drafts and bills of exchange
up to 100 per cent, of their capital and surplus:
NEW YORK STATE
Buffalo
New York
U

U

u
u
a
u
u
it

u
it

u
u
a
a
u
u
u
u
a
u
u
u
u
it

a
it

U

u

Utica
u

NEW JERSEY
Hoboken
Newark
New Brunswick
Paterson

CONNECTICUT
Bridgeport

Citizens Commercial Trust Company
Manufacturers & Traders National Bank
American Exchange National Bank
Atlantic National Bank
Bankers Trust Company
Bank of America
Bank of the Manhattan Company
Bank of New York, N. B. A.
Central Union Trust Company
Chase National Bank
Chemical National Bank
Citizens National Bank1
Columbia Trust Company
Corn Exchange Bank
Equitable Trust Company
Farmers Loan & Trust Company
Fifth Avenue Bank
First National Bank
Franklin Trust Company1
Garfield National Bank
Guaranty Trust Company
Harriman National Bank
Importers & Traders National Bank
Irving National Bank
Liberty National Bank
Lincoln Trust Company
Mechanics & Metals National Bank
Mercantile Bank of the Americas, Inc.
Mercantile Trust Company
Merchants National Bank1
National Bank of Commerce
National City Bank
National Park Bank
New Netherland Bank
Pacific Bank
Seaboard National Bank
Second National Bank
United States Mortgage & Trust Company
W. R. Grace & Co.'s Bank
First National Bank
Utica Trust & Deposit Company

First National Bank
National Newark & Essex Banking Company
National Bank of New Jersey
Hamilton Trust Company
Paterson National Bank

City National Bank

Liquidated subsequent to receiving permission




87

FEDERAL RESERVE BANK OF NEW YORK
Exhibit Q

PERSONNEL OF THE BANK
Distribution by Departments, 1919 and 1920
1920

1919
Total

FUNCTION
Men

Women

Total

0

37

3
1

4
0

7
1

4

1

5

3

4

1

5

6

98
31

42
16

140
47

150
32

ADMINISTRATION FUNCTION
Service Department.
Personnel Department

258
7

145
36

403
43

303
46

CASH AND CUSTODY FUNCTION
Cash Department
Custody Department

216
66

130
3

346
69

288
55

192
159

374
147

566
306

570
298

2

1

3

5

1

6

7

LOAN FUNCTION
Loan Department

84

37

121

106

INVESTMENT FUNCTION
Bill Department . . .
Securities Department

15
23

8
15

23
38

21
48

FISCAL AGENCY FUNCTION
Certificates of Indebtedness Department. . . .
Government Rond Department . . .

35
152

12
198

47
350

82
320

GOVERNMENT LOAN ORGANIZATION
Government Securities Sales Department....
Liberty Loan Association Department
Administration Department

16
4
11

22
2
9

38
6
20

168
129
55

Officers
Office of Organization Counsel
Procedure
.
LAW FUNCTION
Legal Department
ACCOUNTS FUNCTION
Accounting Department
. .
Methods and Supplies Department

COLLECTION FUNCTION
Check Department
Collection Department
Northern New Jersey Clearing House Association
FOREIGN RELATIONS FUNCTION
Foreign Department




37

30
8

88

SIXTH ANNUAL REPORT
Exhibit Q—Continued

PERSONNEL OF THE BANK
Distribution by Departments, 1919 and 1920
1920
FUNCTION
Men

Women

Total

1919
Total

FEDERAL RESERVE AGENT'S FUNCTION
Member Bank Relations Department
Note Issues Department . . . .
. .
Bank Examinations Department
Statistics Department

4
3
8
28

2
0
1
28

6
3
9
56

4
3
4
20

AUDITING FUNCTION
Auditing Department

91

18

109

112

1,557

1,253

2,810

2,868

62

64

126

94

1,619

1,317

2,936

2,962

TOTAL
Buffalo Branch
GRAND TOTAL




Exhibit R

CERTIFICATES OF INDEBTEDNESS
Issues and Subscriptions in 1920

Series

Date of Issue

Maturity Date

Rate

Total Sale

Sale in
Second District

Per Cent.
of Sale in
Second
District
to Total

Paid for
by Credit

Sale

TD- 1920.
TM4-1920.
TM- 1921.
E- 1920.
F- 1920.
G- 1920.
H- 1920.
A- 1921.
TJ- 1921.
B - 1921.
TM2-1921.
C- 1921.
TM3-1921.
TS- 1921.
TM4-1921.
D- 1921.
TJ2- 1921.
T D - 1921.

Jan. 2, 1920
Feb. 2, 1920
Mar. 15, 1920
Apr. 1, 1920
Apr 15, 1920
Apr 15, 1920
May 17, 1920
June 15, 1920
June 15, 1920
July 15, 1920
July 15,1920
Aug. 16, 1920
Sept. 15, 1920
Sept. 15, 1920
Oct. 15,1920
Nov. 15, 1920
Dec. 15, 1920
Dec. 15,1920

Total
a Average.



Dec. 15, 1920
Mar. 15, 1920
Mar. 15, 1921
July 1, 1920
July 15, 1920
Oct. 15, 1920
Nov. 15, 1920
Jan. 3, 1921
June 15, 1921
Jan. 15, 1921
Mar. 15, 1921
Aug. 16, 1921
Mar. 15, 1921
Sept 15, 1921
Mar. 15, 1921
May 16, 1921
June 15, 1921
Dec. 15, 1921

5

%

5K%
6

%

5M%
6 %
5M%
6 %
5M%
6

%

Number of
Days Before
Final Withdrawal of
Deposits

$703,026,000
304,877,000
201,370,500
200,669,500
83,903,000
170,633,500
102,863,000
176,604,000
242,517,000
126,783,500
74,278,000
157,654,500
106,626,500
341,969,500
124,252,500
232,124,000
188,123,000
401,557,500

$324,189,000
107,732,500
59,982,000
104,682,000
33,039,500
94,127,500
37,239,000
81,370,500
93,629,500
55,808,500
34,583,000
57,704,500
60,233,500
181,370,500
40,566,500
83,515,500
93,616,000
173,291,000

46.1
35.3
29.8
52.2
39.4
55.2
36.
46.1
38.6
44.0
46.6
36.6
56.5
53.0
32.6
36.0
49.8
43.2

$230,440,000
86,302,500
33,753,500
76,973,000
32,268,500
82,046,000
34,291,000
61,038,000
80,662,000
55,019,500
33,173,000
52,225,000
36,027,500
164,312,000
36,662,000
80,649,500
67,297,000
146,008,000

42
50
22
21
47
47
32
30
30
47
47
43
43
43
32
31
34
34

$3,939,832,500

$1,716,680,500

43.6

$1,389,148,000

a38

Exhibit S

CERTIFICATES OF INDEBTEDNESS
Redemptions in Second District during 1920
Loan Issues
Date of
Series
Issue
4-E
5-A
5-C
5-D
5-E
5-F
5-G
5-H
5-J
5-K
A-1920
B-1920
C-1920
D-1920
E-1920
F-1920
G-1920
H-1920
A-1921
B-1921
C-1921

."

Sept.
Dec.
Jan.
Jan.
Jan.
Feb.
Feb.
Mar
Apr.
May
Aug.
Aug.
Sept.
Dec.
Apr.
Apr.
Apr.
May
June
July
Aug.

Total for loan certificat«s




3,1918
5,1918
2,1919
16,1919
30,1919
13,1919
27,1919
13,1919
10,1919
1,1919
1,1919
15,1919
2,1919
1,1919
1, 1920
15,1920
15,1920
17,1920
15,1920
15,1920
16, 1920

Maturity
Jan.
May
June
June
July
July
July
Aug.
Sept.
Oct.
Jan.
Jan.
Feb.
Feb.
July
July
Oct.
Nov.
Jan.
Jan.
Aug.

2,1919
6,1919
3,1919
17,1919
1,1919
15,1919
29,1919
12,1919
9,1919
7,1919
2,1920
15,1920
2,1920
16,1920
1,1920
15,1920
15,1920
15,1920
3,1921
15,1921
16,1921

Cash
Redemption
$1,000
500
7,500
13,000
10,500
14,500
10,000
5,500
2,500
4,500
109,027,500
154,122,500
126,935,000
17,904,000
99,022,000
31,448,000
77,260,000
34,773,500
26,891,000

Exchanged for
Other Issues

$799,000
4.860,000
97,815,000
1,005,000
7,596,000
1,303,000
15,894,000
446,500
606,000
265,000

1,000,000
$678,453,000

$130,589,500

Used in Payment of Taxes

Total

$1,000
500
7,500
13,000
10,500
14,500
10,000
5,500
2,500
4,500
109,826,500
158,982,500
224,750,000
18,909,000
106,618,000
32,751,000
93,154,000
35,220,000
27,497,000
265,000
1,000,000
$809,042,500

Exhibit S—Continued

CERTIFICATES OF INDEBTEDNESS
Redemptions in Second District during 1920
Tax Issues
Date of

Series

Cash
Redemption

Issue

TA
T- 4
T- 5
T- 6
T-7
T-8
T- 9
T-10
TM3-1920.
TJ- 1920.
T D - 1920.
TM4-1920.
T M - 1921.
TD- 1921.

July 15,1919
Sept. 15, 1919
Dec. 15, 1919
Sept. 15, 1919
Dec. 15, 1919
Mar. 15, 1920
Mar. 15, 1920
Sept. 15, 1920
Mar. 15, 1920
June 15, 1920
Dec. 15,1920
Mar. 15, 1920
Mar. 15, 1921
Dec. 15, 1921

Used in Payment of Taxes

Total

Maturity

Aug. 20,1918
June 3, 1919
June 3,1919
July 1,1919
July 1,1919
July 15,1919
Sept. 15,1919
Sept. 15, 1919
Dec. 1, 1919
Dec. 15, 1919
Jan. 2,1920
Feb. 2, 1920
Mar. 15, 1920
Dec. 15, 1920

Exchanged for
Other Issues

$6,000
17,000
70,500
24,500
359,000
118,569,000
23,728,000
350,980,000
33,880,000
245,102,500
267,713,500
101,980,000
17,000,000
12,000,000

$3,991,500
866,000
14,369,500
11,101,000
18,062,000
23,333,000
2,279,500

$2,260,000
285,000
14,746,500
9,014,000
16,260,000
13,416,500
5,358,500

$6,000
17,000
70,500
24,500
359,000
124,820,500
24,879,000
380,096,000
53,995,000
279,424,500
304,463,000
109,618,000
17,000,000
12,000,000

Total for tax issues.

$1,171,430,000

$74,002,500

$61,340,500

$1,306,773,000

Total for loan and tax issues.

$1,849,883,000

$204,592,000

$61,340,500

$2,115,815,500




I

SIXTH ANNUAL REPORT
Exhibit T

CERTIFICATES OF INDEBTEDNESS
Amount Held by Banks as Compared with Total Amount
Outstanding in Second District in 1920
Date
2.
9.
16.
23.
30.
February 6.
13.
20.
27.
5.
March
12.
19.
26.
2.
April
9.
16.
23.
30.
7.
May
14.
21.
28.
4.
June
11.
18.
25.
2.
July
9.
16.
23.
30.
August
6.
13.
20.
27.
September 3.
10.
17.
24.
October
1.
8.
15.
22.
29.
November 5.
12.
19.
26.
December 3.
10.
17.
24.
31.

January

Amount
Outstanding

Amount Held
by Reporting
Banks 1

$1,448,621,000
1,497,621,500
1,384,621,500
1,375,621,500
1,375,621,500
1,345,621,000
1,333,621,500
1,328,621,000
1,328,621,000
, 1,312,621,000
1,291,621,000
1,101,520,000
1,100,530,000
1,176,423,500
1,207,124,500
1,319,525,500
1,332,392,500
1,332,392,500
1,332,392,500
1,332,392,500
1,369,631,500
1,369,631,500
1,359,631,500
1,346,044,000
1,258,361,000
1,257,263,500
1,158,135,000
1,158,101,000
1,212,010,000
1,217,482,000
1,197,015,000
1,196,941,000
1,196,927,000
1,244,211,500
1,234,599,000
1,234,191,500
1,214,103,500
1,103,823,000
1,100,955,500
1,095,475,500
1,094,500,000
1,077,044,500
1,072,605,500
1,070,528,500
1,071,269,500
1,070,754,000
1,122,395,500
1,122,027,500
1,121,793,000
1,109,691,500
1,097,603,000
1,065,161,500
1,037,753,000

$351,789,000
370,185,000
327,235,000
297,800,000
290,829,000
305,754,000
289,283,000
291,225,000
283,350,000
257,244,000
251,681,000
220,179,000
218,739,000
264,993,000
266,663,000
350,660,000
300,758,000
278,930,000
273,052,000
274,692,000
291,568,000
274,404,000
264,082,000
247,422,000
251,266,000
241,022,000
220,124,000
205,847,000
260,738,000
254,340,000
231,437,000
211,873,000
207,286,000
225,814,000
218,686,000
215,641,000
147,887,000
220,301,000
200,937,000
156,961,000
155,871,000
166,951,000
152,597,000
147,242,000
142,750,000
137,128,000
179,229,000
152,744,000
127,310,000
105,030,000
197,449,000
160,799,000
146,686,000

1 These reporting banks represent approximately 77 per cent of the total banking
resources of the Second Federal Reserve District.




FEDERAL RESERVE BANK OF NEW YORK

93

Exhibit U

PAYMENT OF TREASURY CHECKS
During 1920
Month

Number

Amount

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

724,598
599,412
650,909
762,095
642,031
750,201
690,531
796,465
917,703
902,390
927,229
1,147,605

$243,882,226.88
206,015,890.61
250,540,916.78
270,336,282.89
158,449,874.70
480,203,695.16
117,622,149.04
181,689,267.33
144,107,755.11
93,597,680.64
120,761,911.98
139,446,226.52

Total

9,511,169

$2,406,653,877.64




SIXTH ANNUAL REPORT

94

Exhibit V

FISCAL AGENCY EXPENSES
Total Disbursements and Reimbursements, 1920 and 1919
1920
Total disbursements during year
Amounts reimbursable January 1
Total
Reimbursements received during year
Balance reimbursable at end of year

1919

$1,516,454.64
977,835.29

$4,963,642.44
3,049,530.05

$2,494,289.93

$8,013,172.49

2,269,642.44

7,035,337.20

$224,647.49

$977,835.29

Total Obligations Incurred to December 31, 1920
First Loan
Second Loan
Third Loan
Fourth Loan
Victory Loan
General Expense, July 1, 1919, to June 30, 1920*
General Expense, July 1 to Dec. 31, 1920*
War Savings 1918
War Savings 1919
War Savings 1920
Certificates of Indebtedness Sales 1918
Certificates of Indebtedness Sales 1919
Certificates of Indebtedness Sales 1920
Certificates of Indebtedness Sales 1921
Total

$393,672.10
720,390.19
2,494,116.98
2,716,487.74
2,601,203.81
1,036,503.18
472,545.82
514,860.52
656,074.87
160,519.79
25,177.88
9,360.18
92,651.72
67,458.67
$11,961,023.45

*"General Expense" is a Treasury Department classification and in this table shows
expenditures incurred for fiscal agency operations other than those individually specified.




FEDERAL RESERVE BANK OF NEW YORK

95

Exhibit W

REPORTING BANKS
Loans, Investments, and Deposits
(Amounts in Thousands of Dollars)

Date

Jan.

2
9
16
23
30
Feb. 6
13
20
27
Mar. 5
12
19
26
Apr. 2
9
16
23
30
May 7
14
21
28
June 4
11
18
25
July 2
9
16
23
30
Aug. 6
13
20
27
Sept. 3
10
17
24
Oct. 1
8
15
22
29
Nov. 5
12
19
26
Dec. 3
10
17
24
31

Total
U.S.
Securities

Total
Loans
Total
Loans
Secured All Other
Deposits
Secured by Stocks Loans and Loans and
(incl.
InvestInvestby U. S.
Gov't.
and
ments
ments
Bonds
Bonds
Deposits)

$771,003 $510,678 $1,557,420 $3,267,932
785,809 510,240 1,530,248 3,264,308
726,772 522,104 1,516,502 3,295,273
686,966 518,079 1,505,992 3,303,925
669,114 498,252 1,475,350 3,393,704
679,255 476,307 1,437,478 3,377,017
669,210 465,728 1,388,439 3,426,871
666,646 458,241 1,353,502 3,428,249
653,989 423,591 1,356,130 3,442,449
624,238 431,824 1,340,539 3,464,359
619,511 408,407 1,349,261 3,528,484
583,774 405,703 1,336,970 3,598,184
581,767 403,283 1,357,868 3,553,593
630,637 403,144 1,344,255 3,641,645
628,653 398,324 1,328,877 3,659,506
713,462 392,180 1,366,845 3,634,452
663,382 390,307 1,334,930 3,627,999
652,587 376,150 1,349,047 3,619,895
656,234 372,348 1,314,441 3,636,835
656,005 379,202 1,308,730 3,687,565
673,665 376,728 1,332,509 3,645,356
660,621 386,317 1,330,079 3,671,217
650,004 378,817 1,337,055 3,640,905
634,075 373,266 1,320,236 3,684,675
635,194 368,402 1,330,462 3,751,422
626,903 368,916 1,329,176 3,723,836
607,178 366,174 1,342,002 3,687,324
589,013 365,576 1,309,634 3,715,065
641,976 356,437 1,290,333 3,731,592
635,091 346,174 1,300,528 3,733,820
615,667 352,241 1,284,542 3,722,022
593,375 339,001 1,246,203 3,738,317
590,238 327,277 1,240,314 3,739,640
606,860 328,609 1,240,843 3,710,649
599,108 325,931 1,274,025 3,709,593
596,775 325,346 1,266,038 3,676,233
529,861 328,963 1,262,263 3,721,179
602,351 322,068 1,268,218 3,867,014
579,025 321,077 1,284,431 3,804,468
534,978 322,080 1,327,009 3,788,824
537,570 320,653 1,318,888 3,780,443
549,883 317,415 1,370,820 3,751,447
535,799 310,550 1,311,665 3,746,712
525,844 299,936 1,359,100 3,627,435
523,427 299,122 1,298,701 3,613,605
521,418 299,367 1,267,917 3,578,165
560,868 290,512 1,243,662 3,609,351
536,087 292,977 1,275,116 3,581,141
512,917 296,089 1,283,742 3,471,215
490,065 301,350 1,286,104 3,504,376
583,266 302,239 1,313,960 3,621,753
551,934 297,338 1,330,510 3,517,549
551,762 314,585 1,377,299 3,565,842




$6,107,033
6,090,605
6,060,651
6,014,962
6,036,420
5,970,057
5,950,248
5,906,638
5,876,159
5,860,960
5,905,663
5,924,631
5,896,511
6,019,681
6,015,360
6,106,939
6,016,618
5,997,679
5,979,858
6,031,502
6,028,258
6,048,234
6,006,781
6,012,252
6,085,480
6,048,831
6,002,678
5,979,288
6,020,338
6,015,613
5,974,472
5,916,896
5,897,469
5,886,961
5,908,657
5,864,392
5,842,266
6,059,651
5,989,001
5,972,891
5,957,554
5,989,565
5,904,726
5,812,315
5,734,855
5,666,867
5,704,393
5,685,321
5,563,963
5,581,895
5,821,218
5,679,331
5,809,488

$5,948,605
5,849,579
5,858,510
5,705,357
5,666,471
5,605,408
5,627,340
5,483,023
5,485,721
5,519,135
5,594,826
5,623,363
5,580,018
5,776,545
5,716,659
5,864,839
5,725,326
5,752,166
5,686,123
5,720,203
5,752,523
5,804,330
5,739,023
5,729,770
5,835,353
5,766,789
5,763,803
5,680,385
5,748,968
5,674,130
5,665,284
5,569,774
5,553,483
5,533,597
5,527,642
5,476,950
5,506,164
5,820,274
5,674,051
5,666,093
5,639,194
5,716,048
5,560,344
5,483,436
5,404,313
5,380,170
5,405,079
5,371,282
5,288,509
5,298,439
5,510,037
5,419,674
5,567,336