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SEVENTH ANNUAL REPORT

of the

FEDERAL RESERVE BANK
OF PHILADELPHIA




FOR THE YEAR ENDING

DECEMBER 31, 1921

SEVENTH ANNUAL REPORT

of the
FEDERAL RESERVE BANK
OF PHILADELPHIA

FOR

THE

YEAR ENDING

DECEMBER 31, 1921

PUBLISHED BY THE
FEDERAL RESERVE AGENT
OF THE
FEDERAL RESERVE BANK OF PHILADELPHIA




LETTER OF TRANSMITTAL
February 28, 1922.

Hon. W. P. G. Harding,
Governor, Federal Reserve Board,
Washington, D. C.

SIR: I have the honor to transmit to
you herewith the seventh annual report
of the Federal Reserve Bank of Philadelphia, covering the year 1921.




Very truly yours,
RICHARD L. AUSTIN

Federal Reserve Agent and
Chairman

Federal Reserve Bank of Philadelphia
Directors and Officers
DIRECTORS
Class A
Class B
Joseph Wayne, Jr., Philadelphia, Pa.
Alba B. Johnson, Rosemont, Pa.
Francis Douglas, Wilkes-Barre, Pa.
Edwin S. Stuart, Philadelphia, Pa.
M. J. Murphy, New York, N. Y.
Charles K. Haddon, Camden, N. J.
Class C
Richard L. Austin, Philadelphia, PaHenry B. Thompson, Wilmington, Del.
Charles C. Harrison, Philadelphia, Pa.

OFFICERS
Richard L. Austin, Federal Reserve
George W. Norris,
Agent and Chairman
Governor
Henry B. Thompson,
William H. Hutt,
Deputy Chairman
Deputy Governor
Arthur E. Post, Assistant Federal
Edwin S. Stuart,
Reserve Agent
Deputy Governor
Walter T. Grosscup, Assistant
William A. Dyer,
Federal Reserve Agent
Cashier
C. A. Mcllhenny, Assistant Cashier
W. J. Davis, Assistant Cashier
J. M. Toy, Assistant Cashier
F. W. LaBold, Assistant Cashier
R. M. Miller, Jr., Assistant Cashier
S. R. Earl, Assistant Cashier

William G. McCreedy, Comptroller

Member of Federal Advisory Council
Levi L. Rue, Philadelphia, Pa.




Table of Contents
PART I—SUMMARY
PAGE

Reference to business conditions
Summary of operations
Statement of condition
Earnings and expenses and profit and loss
Discount rate changes
Reserve position

5
6
7
9
10
11

PART II—OPERATIONS

Loan and discount operations:
Summary
Bills rediscounted
Purchased paper
United States securities

13
13
14
16

Currency:
Federal Reserve notes
Federal Reserve Bank notes
Currency department

17
18
18

Clearings and collections:
Transit operations
Gold settlement fund
Collection department
Coupon department
Wire transfer operations

.

19
. 20
21
21
22

Fiscal agency operations:
Bond conversions and deliveries
Certificate of indebtedness and note issues
Government deposits
Government checks
War Savings activities

22
23
23
23
24

Internal organization:
Directors and officers
Changes in official staff
Assumption of sub-treasury functions
Building and vault
Employees

24
25
25
25
26

PART III—BANKS OF THE DISTRICT

Number, capital, surplus, etc., by classes
State member banking institutions
Special powers for national banks
Department of Bank Examination

26
27
28
28

APPENDIX
Statistical tables




29

Seventh Annual Report of the
Federal Reserve Bank of Philadelphia

B

USINESS conditions in the Third Federal Reserve District
during the year 1921 having been fully set forth in the reviews issued monthly by this Bank, only a brief reference to
them is necessary here.
The year began with practically all business, except some retail
lines, much depressed. Manufacturers and distributors were carrying large stocks of raw materials and merchandise obtained at high
cost, and credit was greatly extended as a result of these conditions.
A feeling that intensive liquidation was necessary pervaded the
business community, and it seemed for a while as if most business
efforts were directed to that end; there was scarcely any planning
for future business and few commitments of any kind were made.
Save for a buying movement in the textile, leather and shoe industries beginning late in January and extending through February,
there was no relief from the depression until it reached its lowest
point in July. For the three or four months following, an increased
demand was noted for practically all of the textiles, leather, boots
and shoes, and some of the products of iron and steel. This demand, however, was comparatively shortlived, and the last months
of the year witnessed a recurrence of the lull. This lull was partly
seasonal in its nature. There was every evidence that fundamentally
conditions in business were much better at the close of the year
than they were at the beginning.
The decrease of loans and imports of gold so strengthened the
position of the Reserve banks, that they no longer found it necessary to maintain high discount rates in order to safeguard their
reserves, so that on July 21, coincidently with the Federal Reserve
Banks of Boston and New York, this Bank lowered its rate
on commercial paper from 6 to 53^2 per cent. Further improvement in its position resulted in additional reductions in discount
rates in this district on October 5 to 5 per cent and on November 3
to 43^2 per cent.
Following the reduction of discount rates and the* general easing
of monetary conditions, the prices of Government bonds and notes
advanced rapidly, the demand for Government certificates of indebtedness increased, higher prices for good securities prevailed,
and the market rates for commercial paper and bankers' acceptances



5

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

declined. The improvement in financial conditions was undoubtedly
a contributing factor of the first importance in preparing the way
for the up-turn in business in August, which continued month by
month up to November.

Operations and Services
The operations of the various departments connected with the
rediscounting and clearing functions of this Bank declined very
materially during 1921, as a direct result of the smaller volume
of business operations, and of lessened credit demands. While these
services to banks, therefore, were not called upon so heavily as in
1920, others were more fully availed of by the member banks.
Among the latter were collections, transfers of funds by leased
wire, and the safekeeping of securities. The Bank Examination
Department expanded its activities, and the dissemination of accurate information on business conditions through the medium
of the monthly report has been of assistance to bankers and business men in this and other districts. The great expansion in the
circulation of the business review during 1921, from 3,300 to 9,800,
was due almost entirely to requests from the persons who are receiving it.
The table given below summarizes the activities of the principal
departments of the Bank:

Discounts for member banks....
Number of banks accommodated
Bills purchased
Currency:
Shipments
Receipts
Gold settlement fund operations
—net gain
Collection items handled
United States coupons paid
Transfers of funds by wire
Bond conversions and exchanges.
War savings securities sold
Transit—checks handled
As of December 31:
Securities in safekeeping for member banks
State bank and trust company
members
Examinations by Bank Examination Department
Circulation of report on business
conditions
*Net loss.



1921

1920

1919

$3,872,367,000
509
$99,176,000

$5,820,258,000
484
$76,380,000

$10,736,435,000
494
$14,048,000

646,540,000
691,239,000

643,266,000
570,093,000

389,269,000
444,475,000

11,424,000
364,897,000
69,587,000
847,697,000
628,379,000
1,553,000
13,035,022,000

18,674,000
233,309,000
62,519,000
625,339,000
680,534,000
2,594,000
16,327,200,000

*5,734,000

5,037,000
13,843,744,000

$63,263,000

$27,743,000

$20,962,000

51

46

38

57

42

9,800

3,300

47,064,666

2,000

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

The issue of currency, the redemption of notes unfit for circulation, and shipping charges have been a source of heavy expense to
the Bank, but an invaluable service to the member banks and the
public. During 1921 the original cost of the Federal Reserve currency of this bank (including shipping charges) was $320,922.89,
and redemption costs were $113,210.76. To these must be added
the taxes paid on Federal Reserve Bank note circulation—$58,312.82,
and the cost of currency and coin shipments to and from banks,
amounting to $107,113.61. In all, these charges totalled $599,560.08,
or almost 22 per cent of the total current expenses of the Bank.

Statement of Condition
The statement of condition of this Bank reveals the nature of
the changes wrought by the decline in the use of credit during 1921. Comparing the December 31, 1921, statement with
that of the year before, we find that bills discounted decreased
$83,831,000, and total earning assets $100,018,000. Maturing loans
were paid off in this district, not so much by the payment of gold
and other cash, which increased $14,263,000, or by debits to member
banks' reserve accounts, which decreased $6,308,000, as by the
return of Federal Reserve notes, of which $77,597,000 were retired
from circulation during the year. The reserve ratio responded to
the lessened calls upon the loaning power of this Reserve bank, and
the gain in reserves, by increasing from 54.7 to 71.2 per cent.
Statements for the past four years follow:




SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Statement
Federal Reserve Bank of Philadelphia
(In thousands of dollars, i. e., 000's omitted)
RESOURCES

Dec. 31,1921 Dec. 31,1920 Dec. 31,1919
$1,950
61,776

$6,087
50,353
264

$1,194
31,679
10,506

$63,726
144,402
4,366

$56,704
138,791
8,902

$43,379
88,948
8,448

Total gold reserves
Legal tender notes, silver, etc.

$212,494
7,159

$204,397
993

$140,775
589

Total reserves
Bills discounted:
Secured by U. S. Government obligations.
All other
Bills bought in open market

$219,653

$205,390

$141,364

66,615
21,937
15,895

115,647
56,736
12,689

174,450
35,405
5,177

Total bills on hand
U. S. bonds and notes
U. S. certificates of indebtedness:
One year certificates (Pittman Act)
All other
Municipal warrants

$104,447
2,173

$185,072
1,431

$215,032
1,385

10,000
189
140

30,280
181

30,280
407

Total earning assets
Bank premises
5 per cent redemption fund against Federal
Reserve Bank notes
Uncollected items
All other resources

$116,949
600

$216,967
500

$247,104
500

700
46,296
218

1,300
67,749
358

1,475
92,971
692

$384,416

$492,264

$484,106

$8,736
17,945

$8,485
17,010

$7,884
8,805

1,786
104,706
1,210

1,222
111,014
1,447

5,189
110,541
9,358

$107,702
200,724

$113,683
278,321

$125,088
237,051

5,886
43,049
374

22,601
51,324
840

28,792
75,633
853

$384,416

$492,264

$484,106

71.2

*54.7

*41.0

Gold and gold certificates
Gold settlement fund—F. R. Board.
Gold with foreign agencies
Total gold held by bank. . .
Gold with Federal Reserve Agent.
Gold redemption fund

Total resources.
LIABILITIES
Capital paid in
Surplus
Deposits:
Government
Member bank—reserve account.
All other
Total deposits
Federal Reserve notes in actual circulation. .
Federal Reserve Bank notes in circulation—
net liability
Deferred availability items
All other liabilities
Total liabilities.
Ratio of total reserves to deposit and Federal
Reserve note liabilities combined

""Calculated on basis of net deposits and Federal Reserve notes in circulation.



SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Earnings and Expenses
Although the rate of earnings on loans and discounts was about
the same as in 1920, the smaller amount of earning assets was
reflected in a diminution in the earnings of the Bank. In the
table below interesting items bearing upon earning power are
presented for the past five years:

Year

1921
1920
1919
1918
1917

Average earning assets

Average rate
of earnings on
bills, etc.

Net earnings
available for
dividends, etc.

Annual rate
of earnings on
capital

$160,991,000
223,888,000
218,039,000
101,067,000
29,737,000

4.94%
5.01"
3.94"
4.19"
3.32"

$5,339,000
9,065,000
6,659,000
3,192,000
754,000

60%
117"
89"
46"
12"

The paid-in capital of the Philadelphia Federal Reserve Bank
is less than 3 per cent of its total resources, and the average
earning assets for the year were more than 18 times this capital,
so that a very moderate rate of interest charged for the rediscounting of paper would result in large earnings on the capital. Such
earnings when proportioned to the total resources of the Bank
would be relatively small.
It should not be forgotten, as has often been said before, that
the Federal Reserve banks have been able to greatly increase their
loans through the note issuing powers, a privilege conferred upon
them by the Federal Government.
The gross earnings for 1921—$8,008,000—were derived from the
following sources: bills discounted, 85.5 per cent; purchased paper,
6.4 per cent; United States securities, 7.5 per cent; and miscellaneous sources, .6 per cent. After the payment of dividends and
the addition of $935,239 to the surplus, the remainder—$3,886,552,
was turned over to the Government in payment of the franchise
tax. In 1920, owing to the fact that the surplus of 100 per cent
of subscribed capital permitted by law had just been built up, only
$363,662 was paid to the Government as a franchise tax.
Comparative profit and loss statements follow:1
'For statement of earnings and expenses by months see appendix, exhibit 2.
9



SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Earnings
Current expenses
Current net earnings
Additions to current net earnings:
Amounts deducted from reserve for depreciation and U. S. Bonds
Assessment account expenses Federal
Reserve Board previously charged to
profit and loss
All other
Total additions
Deductions from current net earnings:
Depreciation allowances on bank premises
Reserve for depreciation on U. S. bonds. .
Assessment account expenses Federal
Reserve Board
All other
Total deductions
Net deductions from current earnings
Net earnings available for dividends, surplus and franchise tax
Dividends paid
Transferred to surplus account
Franchise tax paid U. S. Government

1921

1920

1919

$8,008,095
2,766,443

$11,848,551
2,176,274

$8,609,880
1,775,185

$5,241,652

$9,672,277

$6,834,695

8,188

$31,828
104,366

$3,697

$135,380

$146,194

$3,697

$30,000

$646,620
105,396

$29,112

7,578

1,339

41,828
108,283

$37,578

$753,355

$179,223

*$97,802

$607,161

$175,526

$5,339,454

$9,065,116

$6,659,169

$517,663
935,239
3,886,552

$496,679
8,204,775
363,662

$462,380
6,196,789

$127,192

*Net addition.

Changes in Discount Rates
The discount rates of this Bank on all paper, except that secured
by United States certificates of indebtedness, were continued unchanged up to July 21, 1921. During that period the rate on
paper secured by United States bonds was 5}/% per cent, and on
commercial, agricultural and livestock paper, 6 per cent. The
rate on paper secured by certificates of indebtedness ruled at the
rate borne by the certificates, but with a minimum of 5 per cent
up to February 2. On February 3 the minimum was raised to 5 ^
per cent, and on June 16 a flat rate of 6 per cent was established.2
In July conditions were thought by the Board of Directors to be
propitious for the lowering of rates, and they were reduced on
July 21 to 53^2 per cent for paper of all classes and maturities.
This reduction was followed by two others, to 5 per cent on
October 5, and again to 4 3^ per cent on November 3. The rate
in effect at the close of the year was 43^2 per cent.
discount rate changes in appendix, exhibit 1.
10




SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Reserve Position
The decrease during 1921 of approximately 100 millions of dollars
in the holdings of bills discounted and other earning assets was
accomplished for the most part through the retirement from circulation of almost 78 millions in Federal Reserve notes. A decrease
of over 6 millions in the reserve deposits of member banks, and an
increase of more than 14 millions in reserve cash were the other
manifestations of the decline in earning assets. The reserve ratio,
therefore, responded to these salutary changes by increasing from
54.7 per cent at the end of 1920 to 71.2 per cent on December 31,
1921.
The first six months of the year were marked by declining gold
holdings, but the decreases in liabilities—Federal Reserve note
circulation and total deposits—were so large that the unfavorable
trend of the reserve cash was more than offset, with the result that
the reserve ratio increased from 54.7 to 57.5 per cent within this
period. During the last six months, liabilities continued to decline
and reserve increased, so that a still larger increase in the reserve
ratio, from 57.5 per cent to 71.2 per cent, occurred.
A summary, by quarters, of the reserve ratio and contributing
factors, is given below:1
(In thousands of dollars, i. e., 000's omitted)

Reserve ratio
Total reserves
Total earning assets
Federal Reserve notes in
circulation
Total deposits

Dec. 31,
1921

Sept. 30,
1921

June 30,
1921

Mar. 31,
1921

Dec. 31,
1920

71.2%
$219,653
116,949

70.2%
$218,157
124,738

57.5%
$193,505
174,401

52.9%
$183,315
200,916

54.7%
$205,390
216,967

200,724
107,702

209,063
101,582

226,454
109,927

239,749
106,626

278,321
113,683

The chart on the next page shows the trend of cash reserves,
note circulation, and deposits with greater minuteness over the past
two years. In this chart, however, the line for deposits should not
be accepted too literally. Up to and including March 11,1921, this
line represents net deposits, and after that time, total deposits. In
the summary given above, total deposits are given for December
31, 1920, in order that it may be comparable with the figures for
the succeeding quarters.
x

For weekly figures, see appendix, schedule 11.
11




SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

FEDERAL RESERVE BANK OF PHILADELPHIA
DEPOSITS, F.R. NOTE CIRCULATION, CASH RESERVES
AND RESERVE RATIOS, 1920-1921
PERCENT

»ER CENT

—

RESERVE RATIOS

— A CTUAL

——--ADJUSTED

A.

A-A-

VJ

t

/—. '

,,,

.*•»•

70
60
50

*T

40
30
20
10

10

MILLIONS OF DOLLARS
ZOO

MILLIONS OF DOLLARS
200

DEPOSITS

150

100

100

50
o

0

400

400

F.R. NOTE CIRCULATION

350

350

300

300

250

250

200

200

150

.150

100

100

50

50

O

O

500

500

450

DEPOSIT AND F.R. NOTE LIABILITIES.XAND TOTAL RESERVES, C

450

400

400

350

350

300

300

250

250

200

200

150

150

100

100

50

50

O

0

1920

1921

Adjusted percentages ara calculated after reducing or increasing reserves held
by the amount of accommodation received froa or extended to other Federal Reserve
tanks.
The deposit curve is based, on "net deposits" up to Uareh 11, 1921, and on
"total deposit*" thereafter.




12

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

LOAN AND DISCOUNT OPERATIONS

T

HE total of all discounts and open market purchases by the
Federal Reserve Bank of Philadelphia during 1921 was
$4,174,403,000, a decrease of 35 per cent from 1920, and of
61 per cent from 1919. A comparative summary is given below:1

Bills discounted
Bills bought
United States securities
Municipal warrants
Totals

1921

1920

1919

$3,877,366,959*
99,175,592*
197,720,850
140,000

$5,964,836,594*
76,380,100*
357,432,400
0

$10,736,435,270
14,048,447
52,921,500
0

$4,174,403,401*

$6,398,649,094*

$10,803,405,217

•Bills discounted for, and acceptances bought from, other Federal Reserve banks included.

The average daily earning assets are of greater interest than the
figures on operations, as they show the effect of the loan and discount operations upon the investment holdings of the Bank.2 In
the table which follows, little change is indicated in the holdings
of purchased paper, but the holdings of bills discounted decreased
about 33 per cent from the 1920 figure. For the first time since
early in 1918, municipal warrants appear in this tabulation:

Bills discounted
Bills bought
United States securities
Municipal warrants
Totals

1921

1920

$124,878,388
9,159,376
26,945,703
7,123

$190,122,307
9,809,869
33,955,559
0

$193,194,965
1,581,247
23,262,740
0

$160,990,590

$233,887,735

$218,038,952

1919

Rediscounted Paper
Bills to the amount of $3,872,367,000 were discounted for member
banks in 1921, as compared with nearly 6 billions in 1920, and almost 11 billions in 1919. The number of banks which were accommodated in the course of the year was 509 compared to 484 in 1920.
x
Loans and discount operations in appendix, schedule 3.
*For holdings at end of each week, see appendix, schedule 11.
13




SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

In addition to the discounts for member banks $5,000,000 of bills
was discounted for other Federal Reserve banks in January. It
was at no time necessary for this Bank to rediscount with any other
Reserve bank during the year. This condition furnishes an interesting contrast with 1920, during which year this Bank was rediscounting with other Reserve banks during the first four months
of the year, and during the last four months it, in turn, was loaning
to others.
A statement of the holdings of discounted paper more clearly
indicates the extent of the assistance rendered to member banks
than the data on operations. There is given below a table showing
the amount of discounted bills held by this Bank on December 31,
1920, and at the end of each of the succeeding quarterly periods:
(In thousands of dollars, i. e., 000's omitted)
Classes of paper

Customers' paper secured
by Government obligations
Member banks' coll. notes:
Secured by Government
obligations
Otherwise secured
Commercial paper
Agricultural paper
Live-stock paper
Trade acceptances
Bankers' acceptances
Totals

Dec. 31,
1921

Sept. 30,
1921

June 30,
1921

Mar. 31,
1921

Dec. 30,
1920

$10,459

$14,993

$24,933

$35,660

$39,597

56,155
0
21,103
719
0
116
0

55,096
0
30,911
372
5
224
0

69,603
0
45,166
641
0
252
0

72,871
0
47,208
400
5
213
0

76,080
50
57,069
388
0
229
150

$88,552

$101,601

$140,595

$156,357

$173,563

A reduction in the total amount of paper held occurred in each
quarter of 1921 but the greatest decrease took place in the third
quarter during which period a decline was recorded amounting to
46 per cent of the total decline of $87,011,000 for the year. Smaller
holdings of bills secured by Government obligations account for
the major part of the total decrease.

Purchased Paper
With the decline in borrowings by member banks, this Bank has
increased its purchases of bankers' acceptances in the open market.
Its total purchases of this paper in 1921 were $99,176,000, of which
all but $6,823,000 was bought from dealers operating in the Third



14

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

FEDERAL RESERVE BANK OF PHILADELPHIA
MOVEMENT OF EARNING ASSETS
DURING 1920 AND 1921
MILLIONS OF DOLLARS
150

MILLIONS OP DOLLARS
ISO

UNITED STATES SECURITIES
100

100

50

50

100

100
PURCHASED BILLS

50

50

350

350
DISCOUNTED BILLS
SEE NOT£ BELOW )

i '

300

300

ISO

250

200

200

150

150
100

50

1

1921

1920

A - Paper tsonred by u . 3 . Government obligations discounted for bank! In d i i t r i a t .
2 - Total paper diMounted for banks in d i s t r i c t .
0 - Total discounted paper held.
Space between l i n e s B and a represents - rtiere above line B - paper discounted for,
and - «her» below line B - paper rediscounted with, other Federal Reserve Bank*.




15

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Federal Reserve District. The latter amount was acquired through
the Federal Reserve Bank of New York. In 1920 total purchases
were $76,380,000, of which 46 per cent was purchased through the
New York Federal Reserve Bank. This larger patronage with
dealers in acceptances operating in this district is in line with the
policy of the Bank of fostering the development of a local acceptance
market.
The bills bought during the past year divide themselves, according to the transactions involved, as follows: Foreign bills, 66.3
per cent; domestic bills, 20.8 per cent; bills creating dollar exchange,
12.9 per cent. An interesting comparison of holdings, average
maturities, and rates over the past four years is given in the table
below:
Purchases in open market during year
Holdings at
end of year

1921....
1920....
1919...
1918...

$15,895,000
12,689,000
5,177,000
3,011,000

Average
maturity

Average
Rate

Amount

Purchases
from other
Federal Reserve banks

44.81 days
59.09 "
57.00 "

5.34%
5.89"
4.38"
4.12"

$92,353,000
41,232,000
14,048,000
77,686,000

$6,823,000
35,148,000
0
42,322,000

United States Securities
Holdings of United States securities at the end of 1921 show a
large decrease in the 2 per cent certificates of indebtedness which
are deposited with the Treasurer of the United States to secure the
circulation of Federal Reserve Bank notes. Other changes are of
minor importance. There follows a tabular presentation of holdings at the end of the past three years:

United States bonds:
2% Panamas of 1936-38
3% conversion bonds of 1946-47
3J^% Liberty loan
4% Liberty loan
4J4% Liberty loan
Total United States bonds

1921

1920

1919

$100
549,200
48,100
0
836,400

$100
549,200
48,100
0
836,400

$100
549,200
11,850
797,150
26,600

,433,800

$1,433,800

$1,384,900

Victory notes
Certificates of indebtedness:
2% to secure circulation of Federal Reserve Bank notes
All other

739,000

0

0

10,000,000
189,000

30,280,000
181,500

30,280,000
407,000

Total United States securities

$12,361,800

$31,895,300

$32,071,900




16

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

CURRENCY
Federal Reserve Notes
With the exception of a few weeks around the holiday period at
the end of the year, the circulation of Federal Reserve notes of this
Bank decreased throughout the whole of 1921. The amount in
circulation on January 1 was $278,322,000, and on December 31,
$200,724,000. The lowest point was $197,251,000, reached on
December 6, and from that point the circulation increased to
$211,040,000 on December 23, to take care of Christmas trade
needs, and this in turn was followed by a decline to the end of the
year.
While it is true that notes were issued to the Bank by the Federal
Reserve Agent in larger quantities than in 1920, redemptions in
1921 were proportionately so much larger, that the volume of notes
outstanding decreased greatly, as the following calculation shows:1
•
Notes outstanding January 1
Issued to Bank during year

Notes returned for redemption and fit notes returned..
Notes outstanding December 31

1921

1920

$291,298,605
183,410,000

$247,895,665
177,420,000

$474,708,605

$425,315,665

251,838,490

134,017,060

$222,870,115

$291,298,605

In connection with the decrease throughout the district infthe
amount of disbursements for payrolls, etc., it is interesting to note
that, in the amount of their issue, notes of the $10 and $20 denominations reversed their positions. In 1920, 25 per cent of the notes
issued were of the $10 denomination, and 37.4 per cent were of
the $20 denomination. In 1921, 31.6 per cent were $10 notes, and
26.8 per cent, $20 notes.2
The statement of the Federal Reserve Agent's account, with
comparisons for the two preceding years, follows:
issues and redemptions by months given in appendix, table 4.
1
Comparison of amount of each denomination issued yearly given in appendix,
table 5.
17



SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA
Resources
Federal Reserve notes on hand
Federal Reserve notes outstanding...
Collateral security held:
Gold in gold redemption fund
Gold with Federal Reserve Board..
Eligible paper
Total resources

Dec. 31, 1921

Dec. 31,1920

Dec. 31,1919

$50,400,000
222,870,115

$25,580,000
291,298,605

$21,340,000
247,895,665

14,013,355
130,389,260
101,435,017

17,401,845
121,389,260
162,024,571

14,558,905
74,389,260
165,192,017

$519,107,747

$617,694,281

$523,375,847

$881,360,000

$680,580,000

$510,780,000

608,089,885

363,701,395

241,544,335

$273,270,115

$316,878,605

$269,235,665

144,402,615
101,435,017

138,791,105
162,024,571

88,948,165
165,192,017

$519,107,747

$617,694,281

$523,375,847

Liabilities
Federal Reserve notes received from
Comptroller (gross)
Less returned to Comptroller for destruction
Received from Comptroller ( n e t ) . . . .
Collateral pledged by Bank against
outstanding notes:
Gold and gold certificates
Eligible paper
Total liabilities

Federal Reserve Bank Notes
Under the authority of the Pitman Act, the United States Treasury has been buying silver since February to take the place of the
silver dollars which were melted down and sold to foreign governments as bullion during the war. Circulating notes known as silver
certificates, secured by these silver dollars, were acquired by the
Government by purchase from the Federal Reserve banks, payment being made for them in 2 per cent certificates of indebtedness. The Federal Reserve banks were authorized to use such
certificates as security for the issue of Federal Reserve bank notes.
Following the purchase of silver by the Treasury, the coinage of
silver dollars and the issue of silver certificates has been resumed.
The 2 per cent certificates of indebtedness are being paid, and
equal amounts of Federal Reserve bank notes retired. Federal
Reserve bank notes in circulation decreased from $22,601,000 to
$5,886,000 during 1921, and holdings of Pitman Act certificates of
indebtedness declined from $30,280,000 to $10,000,000 in the same
period.

Currency Department
The assumption of the functions of the Sub-Treasury in February
necessitated the addition of 12 persons to handle coin and 5 to



18

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

supplement the existing force of money counters. Figures of currency counted during 1920 and 1921 follow:

1921.
1920.

Number of pieces

Amount

104,743,901
71,673,499

$766,821,557
683,291,320

The increase in the number of pieces handled comes directly as
a result of Sub-Treasury activities, as 48,692,292 bills of the $1
and $2 denominations were counted in 1921, as compared with
19,394,081 in 1920. These bills were largely United States notes.
The average daily number of all pieces handled in 1921 was 380,886,
and in 1920, 259,686.
Total shipments of currency were little larger than in 1920, but
receipts increased very perceptibly, as the tabulation shows:1

1921
1920
1919

Receipts

Shipments

$691,239,266
570,093,449
444,475,010

$646,539,531
643,266,382
389,269,059

The amount of coin received from March 1 to December 31 was
$18,319,000, and the amount paid out, $18,532,000. In the seven
months from June 1 to the end of the year, 103,078,479 pieces of
coin, amounting to $13,106,464 were counted.

CLEARINGS AND COLLECTIONS
Transit Department Operations
The volume of checks passing through the Transit Department
reflects directly the volume of business transactions in this district. It is not surprising, therefore, to note that in 1921 there
was a falling off in the dollar amount. There was, however, a
marked increase in the number of items making up this total.
The average amount of each check handled during 1921 was
Monthly shipments and receipts given in appendix, schedule 6.
19



SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

$250, and in 1920, $344. If this decline in the average amount
for which each check was drawn had been confined to the past
year, it might be assumed that it was entirely a result of smaller
average purchases. But it has continued over the past four years
for which we have records, and this suggests the conclusion that
checks are coming more and more into common usage as a means
of payment even in the smallest transactions. Part of the decrease
is ascribable to the increasing tendency on the part of member
banks of making transfers to other banks by wire instead of transfer
drafts, but this tendency by no means accounts for the entire downward trend in the size of the average check.
The average daily number of checks handled during the year was
174,100, as compared with 156,617 in 1920, and the largest number
handled in any one day was 253,768 on November 10. The summary below gives the total number and amount of checks handled
during the years from 1918 to 192111
Amount of Checks Handled

1921
1920
1919
1918

On Philadelphia
banks

On banks elsewhere in
district

On banks in
other Reserve
.districts

Totals

$8,483,268,001
10,466,186,613
8,907,672,377
6,655,028,275

$2,745,789,135
3,123,073,591
2,129,201,167
1,263,933,879

$1,805,964,565
2,737,939,769
2,806,870,819
3,373,447,958

$13,035,021,701
16,327,199,973
13,843,744,363
11,292,410,112

Number of Checks Handled

1921
1920
1919
1918

On Philadelphia
banks

On banks elsewhere in
district

19,441,824
16,593,192
12,051,043
4,256,167

24,435,943
21,679,301
15,379,260
8,569,393

On banks in
other Reserve
districts

8,352,255
9,025,978
7,456,465
4,308,201

Totals

52,230,022
47,298,471
34,886,768
17,133,761

Gold Settlement Fund Operations
Total receipts through the gold settlement fund during 1921 were
$6,948,659,183.78, and disbursements, $6,937,235,623.73, showing
'Monthly figures on transit operations given in appendix, schedule 7.
20




SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

a gain of $11,423,560.07 from this source for the year.1 In 1920
there was a gain of $18,674,000 through this fund, and in 1919 a
loss of $5,734,000.

Collection Department
The report of the collection department shows a great expansion
in the number and amount of items received for collection, that is,
notes and bills payable at a future date The number of items received expanded from 92,651 in 1920 to 221,238 in 1921, or 139
per cent, and the amount of these items from $233,309,000 to
$364,897,000, or 56 per cent.2 The average amount of each item,
however, declined from $2,519 to $1,649. The ratio of the number
of items returned unpaid to total items received increased from
16.4 per cent in 1920 to 17.7 per cent in 1921.

Coupon Department
A smaller number of United States coupons was paid by the
coupon department than in 1920, but their total amount increased
11 per cent. Comparative figures for the past three years follow:

1921
1920
1919

Number

Amount

8,781,836
9,493,270
8,258,108

$69,587,294.85
62,519,070.00
47,063,622.79

The division of the 1921 and 1920 totals according to the class
of the security from which the coupons were clipped is given herewith:
Number
1920

Liberty bonds and Victory
notes
Certificates of indebtedness. .
Other United States coupons

9,441,536
44,527

Amount
1921

8,641,093
117,599
23,144

Monthly figures given in appendix, schedule 8.
J
Monthly figures given in appendix, schedule 9.
21



1920

1921

$56,462,863
6,011,002

$59,462,517
9,304,749
820,029

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Wire Transfer Operations
The transfer of funds over the leased wires of the Federal Reserve
System is coming into increasing use by our member banks. In
1921, 13,366 messages transferring $847,699,000 were sent, whereas
in 1920, the number of messages was 9,832, and the total amount
involved, $625,339,000. This increasing appreciation of this serivce
is even more manifest in the number of banks availing themselves
of it. The largest number of banks making such transfers in any
one month of 1920 was 27, as compared with 68 in 1921.
The amounts transferred to each of the other Reserve districts
during 1921 were:
$78,670,000
383,636,000
61,226,000
49,533,000
24,384,000
136,065,000

Boston. ..
New York
Cleveland
Richmond
Atlanta. .
Chicago. .

St. Louis....
Minneapolis. .
Kansas City.
Dallas
San Francisco

$14,779,000
43,569,000
11,418,000
15,085,000
29,334,000

FISCAL AGENCY OPERATIONS
As a result of transactions involving the exchange, conversion,
and transfer of ownership of Liberty bonds and Victory notes, the
Liberty bond department of this Bank handled 3,486,163 pieces to
the amount of $633,523,400 during 1921. In 1920, 3,589,075 pieces
amounting to $680,533,650 were exchanged or converted. The
exchange of permanent for temporary bonds formed the bulk of
the operations in both years. Details of various operations connected with the fiscal agency function follow:

Liberty bonds and Victory notes:
Conversions
Exchanges
Transfers of ownership
Purchases for United States Treasury
Received in payment of inheritance taxes
Certificates of indebtedness redeemed



22

Number
of pieces
handled

Amount

71,901
3,405,886
8,376
13,415
1,495
71,817

$11,148,350
617,230,300
5,144,750
28,160,700
1,677,600
193,807,000

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Certificates of Indebtedness
Probably one of the best indications of easier monetary conditions
is to be found in the subscriptions to the various issues of United
States certificates of indebtedness. In 1920 this district was allotted $264,323,000 of certificates, and the ratio of subscriptions to
allotments was 118 per cent. There were 16 issues in 1921 with a
total allotment to the district of $266,293,500. Subscriptions were
216 per cent of allotments for the first 8 issues, and 682 per cent
for the last 8.
The number of subscribing banks, however, declined from 999
in 1920 to 838 in 1921. Comparative data of subscriptions and
allotments in 1920 and 1921 follow:1
1921
Subscriptions

Allotments

Subscriptions

Allotments

$425,522,500
664,323,000

$113,801,500
152,492,000

$96,149,000
216,185,000

$80,722,500
183,600,500

$1,089,845,500

$266,293,500

$312,334,000

$264,323,000

Loan certificates
Tax certificates
Totals

1920

In addition to the certificates, two issues of three-year United
States Treasury notes were marketed in 1921. Subscriptions in
this district were $240,996,300, and allotments, $86,106,700.

Government Deposits
Government deposits averaged a little higher than in 1920, and
the number of depositories increased from 684 at the end of 1920, to
689 at the end of 1921. At the close of business December 31,
1921, deposits were $31,490,000, and the amount of collateral
pledged was $55,095,000.

Government Checks
The number of Government checks handled increased from
1,918,816 in 1920 to 2,065,822 in 1921, but the amount involved
decreased from $528,703,755 to $462,551,120.
Statistics of each issue given in appendix, schedule 10.
23



SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

War Savings Activities
Cash sales of War Savings securities in the Third Federal Reserve
District fell off again in 1921, amounting to $1,552,876, as compared
with $2,593,882 in 1920, $5,036,774 in 1919, and $41,662,200 in
1918. The causes operating to produce this decline in sales were
the waning of enthusiasm after the war, the low rate of interest on
these securities, and the rise in unemployment.
The new peace-time savings plan of the Treasury Department,
which became effective December 15, provided for $1 savings
stamps, and savings certificates in denominations of $25, $100 and
$1,000, to be sold at flat prices of $20, $80 and $800 respectively.
The maximum annual investment permitted to one person in a
year was raised from $1,000 to $5,000. Apparently this revision of
the plan made these securities more acceptable, for sales during the
last two weeks of December exceeded those of the same period in
1920 by 66 per cent.

INTERNAL ORGANIZATION
Board of Directors
Class

Name

Residence

Group 1. Joseph Wayne, Jr., president, Philadelphia, Pa.
Girard National Bank, Philadelphia, Pa.
Group 2. Francis Douglas, cashier, First Wilkes-Barre, Pa.
Nat. Bank, Wilkes-Barre, Pa.
Group 3. M.J. Murphy,c/o A.B. Leach & Clarks Green, Pa.
Co., Bankers,NewYork,N.Y.

B.

Group 1. Alba B. Johnson, vice-president, Southwark Foundry &
Machine Co., Phila., Pa.
Group 2. Edwin S. Stuart, merchant,
Philadelphia, Pa.
Group 3. Charles K. Haddon, vice-president, Victor Talking Machine
Co., Camden, N. J.
Richard L. Austin
Henry B. Thompson, president,
U. S. Finishing Co., New
York, N. Y.
Charles C. Harrison

Term expires
Dec. 31, 1923
Dec. 31, 1921
Dec. 31, 1922

Rosemont, Pa.

Dec. 31, 1922

Philadelphia, Pa.

Dec. 31, 1923

Camden, N. J.

Dec. 31, 1921

Philadelphia, Pa.
Wilmington, Del.

Dec. 31, 1923
Dec. 31, 1922

Philadelphia, Pa.

Dec. 31, 1921

The annual election of directors resulted in the re-election of
Mr. Francis Douglas and Mr. Charles K. Haddon to represent



2-1

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

class A, group 2, and class B, group 3, respectively, for terms of
three years ending December 31, 1924. Mr. Charles C. Harrison,
a class C director, was reappointed by the Federal Reserve Board
for the same term, and Mr. Richard L. Austin was reappointed as
Federal Reserve Agent and Chairman of the board of directors for
a term of one year, and Mr. Henry B. Thompson was reappointed
as Deputy Chairman for one year. The board of directors again
selected Mr. Levi L. Rue, president of the Philadelphia National
Bank, to represent the Third Federal Reserve District on the
Federal Advisory Council.
Mr. R. D. Stockton, on May 1, announced his resignation as the
Comptroller of this Bank, to take effect June 1. His resignation
was accepted by the board of directors with expressions of regret,
and at a later meeting Mr. William G. McCreedy, formerly assistant auditor, was appointed to serve as Acting Comptroller.
Mr. Walter T. Grosscup, with the approval of the Federal Reserve Board, was appointed as Assistant Federal Reserve Agent on
July 13.
The assumption of the functions of the Sub-Treasury of the
United States on February 4 (in accordance with the Act of Congress of May 29, 1920) has thus far not added greatly to the work
of the Bank. A small increase in the force of the currency department to handle coin and count a larger amount of currency was
necessary, but little additional work has fallen thus far upon the
Government coupon or Liberty loan departments.
The new vault of the Bank was completed in the middle of the
year. It adds greatly to safety and convenience in handling the
large amounts of money and securities in the possession of the
Bank. A valuable service is being performed for the member banks
in receiving their securities for safekeeping. At the end of the year
the amount of securities so deposited by member banks was $63,263,000, as compared with $27,743,000 at the end of 1920.
Total expenditures up to December 31, 1921, on the building,
the vaults, and for other expenses in connection with them, were
$2,422,677. This may be divided as follows: Original cost of
building, $600,000; remodeling and improvements, $412,032; furniture and equipment, $413,239; old vault, $107,930; new vault,
$748,982; repairs and alterations (not permanent), $140,494. The
sum of $748,982 charged to the new vault does not include the cost
of remodeling the building, etc., these expenses being included
under another heading.



25

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF

PHILADELPHIA

A total of 897 officers and clerks were in the employ of the Bank
on December 31, 1921, as compared with 842 at the end of 1920.

BANKS OF THE DISTRICT
In the following tabulation the 1,189 banking institutions in the
Third Federal Reserve District on December 31, 1921, are classified according to location, membership in the Federal Reserve
System, and membership in the par collection system:
Banks on par list
National
banks

State
bank
members

Nonmember
state
banks

Totals

Pennsylvania
New Jersey. .
Delaware. . ..

556
79
18

39
8
1

395
15
33

990
132
55

Totals

653

51

473

1,177

Noncheck
state
banks

Grand
totals

997
135
57
12

1,189

At the end of 1920 there were 1,149 banking institutions in the
district, while at the beginning of the year there were only 1,105.
The more important items taken from the statements of the
banks as of June 30, 1921, are given in a table below. It will be
observed that the member banks of the Federal Reserve System
had 63 per cent of the total resources of all banks in the district.
If we consider only the eligible banks, we would find that the
member banks composed 69 per cent of the total number of all
eligible institutions, 69 per cent of their combined capital and surplus, and 72 per cent of their total resources.
(In thousands of dollars, i. e., 000's omitted)
National
banks

Number
Capital
Surplus
Undivided profits.
Total deposits
Total resources...

651
$88,639
125,162
43,207
1,282,803
1,704,925




Member
state banks

48
$25,821
48,738
11,887
290,403
390,902
2G

Nonmember
state banks

Totals

469
$76,226
86,019
29,489
978,850
1,228,149

1,168
$190,686
259,919
84,583
2,552,056
3,323,976

Ratio
member
banks to
all banks
60%
60'
67'
65'
62'
63'

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Changes in the condition of the member banks are best reflected
in the reports which 58 of these banks rendered during 1921. For
purposes of comparison their combined reports as of January 7
and December 28 are given below:
January 7

December 28

$76,385,000
198,983,000
406,702,000

$51,519,000
199,543,000
326,617,000

$682,070,000

$577,679,000

United States securities owned
Other securities owned

$69,072,000
154,363,000

$75,626,000
162,447,000

Total investments

$223,435,000

$238,073,000

Total loans, discounts and investments*

$905,505,000

$815,752,000

Total deposits
Borrowings from Federal Reserve bank

$719,036,000
110,036,000

$684,735,000
50,024,000

Loans and discounts:
Secured by United States securities*
Secured by other stocks and bonds
All other
Total loans and discounts*

•Includes rediscounts with the Federal Reserve Bank.

In the investment items an increase of more than 14 millions of
dollars is to be noted, which offsets in part the decrease of 104
millions in loans and discounts, including rediscounts with the
Federal Reserve Bank. From the figures it appears that 60 millions
of the total reductions in the loans and discounts of these member
banks were used to reduce their borrowings from the Federal Reserve Bank.
The downward trend of loans and discounts and of borrowings
from the Federal Reserve Bank, with minor fluctuations, was continuous throughout the year.

State Member Banking Institutions
At the end of 1920, 46 State banks and trust companies, in this
district, were members of the Federal Reserve System, and, during
1921, 6 other banks in Pennsylvania were added to the list. One
of the member banks in Scranton, however, was consolidated with
a national bank in February, with the result that the number of
member state banking institutions on December 31, 1921, were 51.
Of this number 39 were located in Pennsylvania, 8 in New Jersey
and 4 in Delaware.



27

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Fiduciary Powers for National Banks
Sixteen applications for fiduciary powers for national banks were
acted upon and granted during the year. Six of these were requests
for additional powers by banks which had previously been granted
only partial powers, so that the net increase for 1921 is only 10
in the number of banks possessing these privileges. A table follows
showing the banks in each state possessing either full or partial
powers on December 31, 1921:
Full powers

Partial powers

Totals

Pennsylvania
New Jersey .
Delaware

68
18
2

36
5
2

104
23
4

Totals

88

43

131

Department of Bank Examination
Among the duties of the Department of Bank Examination are
the examination of the banking and trust departments of state
member banks, the investigation of applications for fiduciary
powers, new national bank charters, and applications under the
Clayton Act in connection with interlocking directorates. It also
has maintained a separate record of applications and transactions
affecting the capital stock of this Bank.
During 1921, 57 examinations of banking institutions were made
in all, of which 46 were in co-operation with the State Banking
departments. The remaining 11 were independent examinations,
all but one resulting from applications for membership in the
System. The total banking resources of all the banks examined
was $261,387,000; 37 individual trust departments with total assets of $527,420,000, and 25 corporate trust departments covering
a total of $1,098,316,000 were also examined.
The number of transactions handled and applications investigated were: fiduciary powers, 16; national bank charters, 8; Clayton
Act applications, 32; capital stock transactions, 179. The Department has been frequently called upon by State banking institutions
in this city and elsewhere in the district in connection with bank
mergers and other matters and has been particularly helpful in
assisting banks in the installation of trust departments.



28

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

APPENDIX
EXHIBITS
PAGE

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

Changes in discount rates
Earnings and expenses, 1921
Loan and discount operations
Federal Reserve notes issued and in actual circulation
Denominations issued
Currency receipts and shipments
Transit department operations
Gold settlement fund operations
Collection department operations
Treasury certificates issued
Movement of principal asset and liability items during 1921 .

.

.

29
30
31
32
33
34
35, 36
37
38
39
Insert

Exhibit 1
Changes in Discount Rates
Rates for all maturities in effect
Jan. 1

Member banks' collateral
notes:
Secured by bonds or notes
of the U. S
Secured by U. S. certificates of indebtedness...
Secured by U. S. threeyear notes
Secured by commercial
paper
Rediscounts:
Secured by bonds or notes
of the U. S
Secured by U. S. certificates of indebtedness...
Secured by U. S. threeyear notes
Commercial paper
Agricultural or live-stock
paper
Endorsed bankers' acceptances
Trade acceptances

Feb. 3

June 16 July 21

5%

6%

6%

6%

5%

6%

5%

6%

5%

5K

5%

6%

5%

6%

6%

6%
6%

5%
5%

6%

6%

6%

5%

6%
6%

6%
6%

6%
6%

5%
5%

*At rate borne by certificate, but not less than 5%
**At rate borne by certificate, but not less than
29



Oct. 5

Nov. 3

Exhibit 2
Earnings and Expenses 1921
EARNINGS
From
investments

Deficient reserve penalties

Sundry
earnings

Total
earnings

Total
current
expenses

Current
net
earnings

Annual
rate of
net
earnings

$847,827.92
803,647.17
871,143.37
779,364.27
805,782.79
755,698.71
645,787.51
591,879.41
524,021.57
498,989.64
416,515.28
420,923.34

$3,220.24
5,506.58
1,766.74
3,250.38
2,670.03
4,014.72
3,265.65
2,217.07
2,254.57
2,767.04
1,902.55
1,607.29

$552.19
271.27
742.52
487.28
420.95
3,119.97
492.98
356.81
430.92
336.76
375.14
4,474.24

$851,600.35
809,435.00
873,652.63
783,101.93
808,873.77
762,833.40
649,546.14
594,453.29
526,707.06
502,093.44
418,792.97
427,004,87

$153,012.44
150,920.39
178,526.08
157,293.60
160,159.02
592,825.52
199,967.93
192,941.45
188,608.11
191,174.22
174,714.52
426,299.39

$698,587.91
658,514.61
695,126.55
625,808.33
648,714.75
170,007.88
449,578.21
401,511.84
338,098.95
310,919.22
244,078.45
705.48

96.7%
100.5"
95.1"
88.5"
88.8"
24.0"
61.4"
54.7"
47.4"
42.2"
34.1"
.9"

Totals, 1921

$7,961,580.98

$34,442.84

$12,071.03

$8,008,094.85

$2,766,442.67

$5,241,652.18

60.0%

Totals, 1920

$11,736,470.00

$69,150.00

$42,931.00

$11,848,551.00

$2,176,274.00

$9,672,277.00

116.8%

Totals, 1919

$8,550,650.00

$25,673.00

$33,555.00

$8,609,879.00

$1,775,184.00

$6,834,695.00

89.0%

Totals, 1918

$4,230,955.00

$29,784.00

$97,000.00

$4,357,740.00

$1,086,916.00

$3,270,824.00

46.0%

January
February
March
April
May

June
g July
August
September
October
November
December




SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Exhibit 3
Loan and Discount Operations

Bills discounted
for member
banks

January
February
March
April
May
June
July
August
September
October
November
December
Totals, 1921
Totals, 1 9 2 0 . . . .

Discounted
paper acquired from
other Federal
Reserve
banks

Open market
paper acquired from
other Federal
Reserve
banks

Bills bought
in open
market

$349,825,864.28
309,687,078.02
399,243,410.19
359,860,513.19
357,917,059.63
372,532,913.95
282,489,271.17
309,970,455.61
272,172,581.15
281,555,106.36
275,544,613.03
301,568,092.08

$5,000,000

$6,671,629.41
11,001,773.89
9,022,991.43
9,859,527.67
11,037,621.55
3,399,958.78
1,402,926.52
4,302,508.68
2,000,775.11
8,777,865.43
11,052,658.03
13,822,838.77

$3,872,366,958.66

$5,000,000

$92,353,075.27

$6,822,517.35

5,820,257,742.17

144,578,852

41,232,255.15

35,147,844.94

Totals, 1 9 1 9 . . . . 10,736,435,270.00

$6,822,517.35

14,048,447.00

Total discount and open
market purchases
United States
securities

January... $26,721,000.00
7,544,000.00
February..
March. . . . 26,939,000.00
10,160,000.00
April
31,319,000.00
May
55,902,100.00
June
July
325,100.00
1,758,000.00
August....
September. 6,316,800.00
October. . . 4,157,500.00
November. 2,340,000.00
December. 24,228,350.00
Totals:
1921
$197,726,850.00
1920
357,432,400.00
1919.... 52,921,500.00




Municipal
1921

$45,000.00
95,000.00

$388,218,493.69
335,055,369.26
435,205,401.62
379,880,040.86
400,273,681.18
431,834,972.73
284,217,207.69
316,030,964.29
280,490,156.26
294,490,471.79
288,992,271.06
339,714,280.85

$140,000.00

$4,174,403,401.28

0
0

31

1920
$656,620,270.22
571,916,990.34
544,618,765.49
596,705,178.67
461,996,683.82
525,832,296.73
561,643,726.62
568,684,403.01
477,114,821.26
447,374,996.26
526,776,425.53
459,364,535.31

it
324
318
330
369
384
399
393
382
381
388
403
417

509

$6,398,649,094.26 484
10,803,405,217.00^, 494

Exhibit 4
Federal Reserve Notes Issued and in Actual Circulation

1921

Outstanding
at beginning
of month

Outstanding
at end of
month

Issued
during
month

Fit
notes
received

Redeemed

$7,450,000

$20,259,100

$271,579,505

Held by bank
at end of
month

In actual circulation
at end of the month
1921

1920

$25,040,000

$259,053,585

$223,585,215

January

$291,298,605

$7,990,000

February

271,579,505

19,700,000

19,519,150

271,760,355

23,340,000

259,162,480

242,238,875

March

271,760,355

12,800,000

19,732,850

264,827,505

28,540,000

239,749,520

247,631,135

" April

264,827,505

13,120,000

25,044,060

252,903,445

21,420,000

235,555,585

245,442,935

May

252,903,445

16,200,000

24,435,300

244,568,145

21,420,000

230,644,670

249,835,795

June

244,668,145

20,000,000

23,025,635

241,612,510

21,420,000

226,453,965

249,135,625

July

241,642,510

20,000,000

18,788,695

242,853,815

21,420,000

221,080,590

251,795,885

August

242,853,815

20,800,000

21,220,150

242,433,665

20,620,000

213,764,635

268,543,798

September

242,433,665

8,400,000

19,889,500

230,944,165

20,220,000

209,062,515

270,823,520

October

230,944,165

7,400,000

17,631,350

220,712,815

35,220,000

201,612,125

271,743,935

November

220,712,815

14,000,000

17,240,000

217,472,815

27,220,000

197,873,035

270,553,290

December

217,472,815

23,000,000

17,602,700

222,870,115

22,146,205

200,723,910

278,321,675




SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Exhibit 5
Denominations of Federal Reserve Notes Issued to Bank During 1921
1921

1920

1919

Denominations
Amount

$5
$10

$20 .
$50
$100
$500
$1000

Totals

$45,550,000
57,940,000
49,120,000
23,000,000
5,600,000
600,000
1,600,000

%

24.8
31.6
26.8
12.5
3.1
.3
.9

$183,410,000 100.0




Amount

Amount

%

24.1
25.0
37.4
9.7
2.8
.1
.9

$37,010,000
58,880,000
75,970,000
9,600,000
11,600,000
600,000
2,000,000

19.0
30.1
38.8
4.9
5.9
.3
1.0

$177,420,000 100.0

$195,660,000

100.0

Of.

/a
$42,780,000
44,380,000
66,460,000
17,200,000
4,800,000
200,000
1,600,000

Exhibit 6
Currency Receipts and Shipments
Receipts

1921

From
member
banks

From
non-member
banks

Shipments
To
member
banks

To
non-member
banks

Total receipts

1921

1920

1921

1920

$47,238,481
29,132,634
39,996,106
46,697,711
39,590,446
48,536,095
51,623,976
48,800,799
51,909,656
53,257,562
53,669,878
59,640,105

$38,223,737
51,453,041
56,372,687
53,096,348
52,627,402
59,145,596
54,492,399
55,517,449
57,675,875
44,141,834
57,168,285
66,624,878

$33,689,992
60,276,829
48,045,055
46,795,965
48,879,250
47,084,490
53,279,310
60,711,627
57,511,399
64,210,360
55,338,584
67,443,521

$51,595,145
44,465,986
62,341,633
53,258,070
53,580,969
57,984,393
53,491,855
58,522,114
57,194,486
53,721,975
51,228,665
59,801,585

$2,680,995
981,592
1,228,087
1,833,625
1,793,825
1,949,081
3,870,021
4,298,529
3,585,365
3,315,290
3,958,055
4,557,925

$38,223,737
51,453,041
56,372,687
53,098,348
52,627,402
59,145,596
54,492,399
55,517,449
57,675,875
44,141,831
56,682,165
66,066,915

$486,120
557,963

$54,276,140
45,447,578
63,569,720
55,091,695
55,374,794
59,933,474
57,361,876
62,820,643
60,779,851
59,037,265
55,186,720
64,359,510

Totals, 1921.

$657,186,876

$34,052,390

$646,495,448

$1,044,083

$691,239,266

Totals, 1920.

$548,123,372

$21,970,077

$643,266,382

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




Total shipments

$646,539,531
$570,093,449

$643,266,382

Exhibit 7
Transit Department Operations
Total number and amount of checks handled monthly
Philadelphia banks

January
February....
March

District no. 3 banks

Total

Other Reserve districts

Number

Amount

Number

Amount

Number

Amount

Number

Amount

1,532,048

$763,752,067

1,920,154

$229,096,300

767,327

$178,436,983

4,219,529

$1,171,285,350

1,366,611

631,846,062

1,740,122

188,250,851

659,700

156,176,482

3,766,433

976,273,395

1,730,797

765,566,073

238,589,370

755,009

188,586,871

4,589,325

1,192,742,314

w April

1,656,888

725,395,039

2,103,519
2,075,994

229,593,189

739,158

171,289,882

4,472,040

1,126,278,110

May

1,596,161

669,269,248

2,008,479

212,513,318

643,596

143,074,354

4,248,236

1,024,856,920

June

1,751,023

733,844,057

2,207,131

238,140,347

688,878

145,295,082

4,647,032

1,177,279,486

July

1,551,810

686,234,031

2,096,797

220,961,209

698,106

139,561,762

4,346,713

1,046,757,002

August

1,622,596

656,528,382

2,058,650

220,089,914

670,545

134,888,196

4,351,791

1,011,506,492

September...

1,596,828

690,155,021

1,989,154

234,906,528

639,720

129,019,429

4,225,702

1,054,080,978

October

1,607,224

695,205,485

2,016,014

223,615,704

667,003

153,651,603

4,290,241

1,072,472,792

November. . .

1,614,274

685,224,901

1,962,588

223,689,804

657,187

136,686,167

4,231,019

1,045,600,872

December. . .

1,815,564

780,247,635

2,257,341

286,342,601

766,026

129,297,754

4,838,931

1,195,887,990

19,441,824

$8,483,268,001

24,435,943

$2,745,789,135

8,352,255

$1,805,964,565

52,230,022

$13,035,021,701

Total




Exhibit 7—Continued
Average daily number and amount of checks handled
Philadelphia banks

05

District no. 3 banks

Total

Other Reserve districts

Number

Amount

Number

Amount

Number

Amount

Number

Amount

January

61,282

$30,550,083

76,806

$9,163,852

30,693

$7,137,479

168,781

$46,851,414

February....

62,119

28,720,276

79,096

8,556,858

29,986

7,098,929

171,201

44,376,063

March

66,569

29,444,848

80,904

9,176,514

29,039

7,253,342

176,512

45,874,704

April

63,726

27,899,809

79,846

8,830,507

28,429

6,588,072

172,001

43,318,388

May

63,846

26,770,770

80,340

8,500,532

25,743

5,722,974

169,929

40,994,276

June

67,348

28,224,771

84,889

9,159,259

26,495

5,588,273

178,732

42,972,303

July

62,073

27,449,360

83,871

8,838,449

27,924

5,582,471

173,868

41,870,280

August

60,096

24,315,866

76,246

8,151,478

24,838

4,995,859

161,177

37,463,203

September...

63,873

27,606,200

79,566

9,396,262

25,589

5,140,777

169,028

42,143,239

October

64,288

27,808,219

80,640

8,944,628

26,681

6,146,064

171,609

42,898,911

November...

70,185

29,792,387

85,330

9,725,643

28,574

5,942,877

184,089

45,460,907

11,013,176

29,462

4,972,991

186,112

45,995,691

$9,152,630

27,841

$6,019,882

174,100

$43,450,072

December. ..

69,829

30,009,524

86,821

Average...

64,806

$28,277,560

81,453




Exhibit 8
Gold Settlement Fund Operations
Net gain
for month

Balance
at close

Total
receipts

Total
disbursements

January

$620,186,948.53

$625,709,472.10

February

532,428,799.05

513,829,541.68

March

605,169,944.92

620,556,750.80

April

634,334,475.79

631,698,092.80

May

548,320,993.45

550,062,748.71

June

598,843,168.58

595,544,878.23

July

545,265,462.21

546,603,791.95

1,338,329.74

50,896,790.81

August

552,755,742.12

556,741,487.10

3,985,744.98

46,911,045.83

September

560,062,233.13

554,039,719.06

6,022,514.07

October

587,924,248.23

570,468,504.48

17,445,743.75

November

549,030,165.84

555,175,154.25

6,144,988.41

64,244,315.24

614,337,001.93

616,805,482.57

2,468,480.64

61,775,834.60

$6,948,659,183.78-

$6,937,235,623.73

$48,012,188.53

$36,588,628.48

$8,949,690,155.95

$8,931,016,633.33

$53,832,460.15

$35,158,937.53

1921

Net loss
for month

$50,352,274.55
$5,522,523.57

63,429,008.35

$18,599,257.37
15,386,805.88
1,741,755.26

48,936,830.20
52,235,120.55

3,298,290.35

52,933,559.90
70,389,303.65

Totals, 1921




48,042,202.47
50,678,585.46

2,636,382.99

December

Totals, 1920

44,829,750.98

Exhibit 9
Collection Department Operations
Number of items
received
1921

City

Country

Amount of items
received for collection

Number of items
returned—unpaid
Total

City

Country
2,115

City

Country

Total

2,422

$6,671,557

$17,204,235

$23,875,792

17,195,665

23,296,257

20,521,354

26,612,002

Total

January

3,372

9,105

12,477

307

February. . . .

2,626

8,608

11,234

266

1,941

2,207

6,100,592

March

2,948

11,635

14,583

307

2,220

2,527

6,090,648

8§ April

3,304

12,172

15,476

380

2,807

3,187

6,209,097

7,876,993

14,086,090

May

3,055

14,205

17,260

330

3,559

3,889

5,482,308

25,850,233

31,332,541

June

3,548

16,210

19,758

336

3,411

3,747

5,982,214

27,360,942

33,343,156

July

3,958

16,873

20,831

444

2,731

3,175

6,967,219

23,803,947

30,771,166

August

3,464

17,011

20,475

386

2,969

3,355

6,778,332

23,884,217

30,662,549

September.. .

3,318

16,418

19,736

395

3,138

3,533

8,834,749

24,771,407

33,606,156

October

4,326

18,244

22,570

463

3,145

3,608

10,390,318

28,754,555

39,144,873

November.. .

3,989

18,101

22,090

424

3,068

3,492

10,213,907

27,258,153

37,472,060

December. . .

4,697

20,051

24,748

451

3,484

3,935

11,800,985

28,892,932

40,693,917

Totals

42,605

178,633

221,238

4,489

34,588

39,077

$273,374,633

$364,896,559




$91,521,926

SEVENTH ANNUAL REPORT, FEDERAL RESERVE BANK OF PHILADELPHIA

Exhibit 10
Treasury Certificates of Indebtedness Issued During 1921
Loan Certificates of Indebtedness Issued
Date of
Symbol
series

E-1921
F-1921
G-1921
H-1921
A-1922
B-1922
C-1922

Issue

Maturity

Jan. 15, 1921
Jan. 15,1921
Feb. 15,1921
April 15, 1921
May 16, 1921
Aug. 1, 1921
Nov. 1, 1921

April 15,1921
Oct. 15, 1921
July 15, 1921
Oct. 15,1921
Feb. 16, 1922
Aug. 1,1922
April 1,1922

Total subscriptions

Subscription
allotted

5K% $15,032,000
63,527,000
5H"
5 H " 22,291,000
5K" 52,535,000
5 ^ " 91,076,000
5K" 156,827,500
4M" 24,234,000

$5,160,500
18,903,000
10,945,000
19,047,000
25,757,500
30,336,500
3,652,000

Rate

Tax Certificates of Indebtedness Issued
Symbol
series

TS2-1921
TM-1922
TJ-1922
TM2-1922
TM3-1922
TS-1922
TS2-1922
TJ2-1922
TD-1922

Date of

Total subscriptions

Subscription
allotted

5H% $10,434,000
45,981,000
5H"
53^" 45,628,000
5M" 44,488,000
5 " 53,246,500
5 M " 81,467,500
4 M " 128,814,500
4 M " 18,360,500
4 M " 235,903,000

$10,434,000
40,346,000
25,333,500
9,033,500
8,191,500
12,081,500
17,476,500
3,707,000
25,888,500

Rate

Issue

Maturity

Mar. 15,1921
Mar. 15, 1921
June 15, 1921
Aug. 1, 1921
Sept. 15, 1921
Sept. 15, 1921
Nov. 1, 1921
Dec. 15,1921
Dec. 15,1921

Sept. 15,1921
Mar. 15, 1922
June 15, 1922
Mar. 15, 1922
Mar. 15, 1922
Sept. 15, 1922
Sept. 15, 1922
June 15, 1922
Dec. 15, 1922

Treasury Notes Issued
Date of
Symbol
series

A-1924
B-1924

Issue

Maturity

June 15,1921
Sept. 15, 1921

June 15,1924
Sept. 15, 1924




39

Rate

Total subscriptions

Subscription
allotted

$60,086,600
180,909,700

$45,509,500
40,597,200

Movement of Principal Asset and Liability Items During 1921
(Amounts in thousands of dollars, i. e., 000's omitted)
Purchased bills

Discounted bills

Reserve
percent.a er«s *

TV»tfll

Date

earning
assets
(2+7

+10)

Total
held

(3+4)

1
199,420
199,307
182,895
191,14*
199,618
203,695
213,437
210,221
200,911
194,988
197,967
206,414
197,845
8.. 178,162
15.. 191,940
22.. 190,591
27.. 189,229
M a y 4.. 183,412
11.. 175,905
18.. 191,364
25.. 183,249
June 1.. 196,225
8.. 188,240
15.. 195,718
22.. 170,298
29.. 174,648
July 6.. 155,769
13.. 147,438
20.. 148,706
27.. 148,534
Aug. 3.. 151,299
10.. 141,658
17.. 144,584
24.. 137,705
31.. 134,525
Sept. 7. . 130,317
14.. 130,030
21.. 132,421
28.. 123,493
Oct. 5. . 115,470
11.. 117,697
19.. 126,659
26.. 124,521
Nov. 2.. 119,783
9.. 114,801
16.. 113,586
23.. 3 113,559
30.. 110,439
Dec. 7.. 3111,681
14.. 3108,631
21.. <121,364
28.. *121,676

Jan.

7..
14..
21..
28..
Feb. 4..
11..
18..
25..
Mar. 4..
11..
18..
25..
April 1..

Dis
counted
for other
Federal
Reserve
banks

Discounted for m e m b e r
banks in this district

Total
(2—3)

Secured
by U.S.
Gov't.
obligations

Per
cent

Total
held

(5-5-4)

(8+9)

2

3

4

5

6

7

155,623
153,379
141,894
149,340
146,019
148,407
156,911
156,969
152,262
146,909
150,843
158,762
152,633
132,033
144,496
144,233
145,026
141,604
136,381
146,965
144,976
155,691
149,569
139,080
134,351
140,684
123,360
116,443
118,835
119,098
122,120
112,132
115,320
107,581
106,529
103,183
103,746
103,124
100,476
94,155
95,420
101,657
100,885
96,084
91,667
90,109
88,406
86,217
88,645
85,630
91,953
90,316

12,100
10.236
5,991
4,946
2,182
2,148

143,523
143,143
135,903
144,394
143,837
146,259
156,911
156,969
152,262
146,909
150,843
158,762
152,633
132,033
144,496
144,233
145,026
141,604
136,381
146,965
144,976
155,691
149,569
139,080
134,351
140,684
123,360
116,443
118,835
119,098
122,120
112,132
115,320
107,581
106,529
103,183
103,746
103,124
100,476
94,155
95,420
101,657
100,885
96,084
91,667
90,109
88,406
86,217
88,645
85,630
91,953
90,316

111,684
109,233
108.271
109,674
108,042
110,857
109,390
110,120
107,205
110,213
109,403
111,967
106,646
102,335
104,274
108,198
110,140
107,329
102,154
109,324
110,731
114,117
111,280
104,111
96,691
94,815
84,043
83,388
85,638
85,709
87,503
82,031
85,949
78,073
78,150
76,937
74,745
74,318
69,840
67,600
68,264
71,654
68,767
67,356
66,008
63,932
70,007
66,126
67,160
66,405
70,401
70,213

77.8
76.3
79.7
76.0
75.1
75.8
69.7
70.2
70.4
75.0
72.5
70.5
69.9
77.5
72.2
75.0
75.9
75.8
74.9
74.4
76.4
73.3
74.4
74.9
72.0
67.4
68.1
71.6
72.1
72.0
71.7
73.2
74.5
72.6
73.4
74.6
72.0
72.1
69.5
71.8
71.5
70.5
68.2
70.1
72.0
70.9
79.2
76.7
75.8
77.5
76.6
77.7

11,997
11,155
8,689
9,883
21,650
22,627
23,810
20,918
16,485
16.181
13,482
14,077
14,572
15,680
16,856
14,018
12,387
11,443
9,411
8,336
8,908
11,182
9,656
8,149
6,089
4,689
3,390
2,538
1,492
1,105

681
1,081
1,887
3,245
3,127
2,288
1,440
2,372
1,972
1,353
2.391
6,255
5,889
6,484
6,744
7,846
9,809
10,156
8,970
8.665
13,859
15,277

Bought
Purfrom
chased
other
Federal in open
Reserve market
banks (7—8)

8

6,823
6,823
6,733
4,038
3,213
2,796
1,547
1,206

Federal
United Total
Reserve
Total
States
cash deposits notes
in
securi- reserves
Ac- Adcircu- tual justed2
ties
lation

9

10

11

12

13

14

15

11,997
11,155
8,689
9,883
14,827
15,804
17,077
16,880
13,272
13,385
11,935
12,871
14,572
15,680
16,856
14,018
12,387
11,443
9,411
8,336
8,908
11,182
9,656
8,149
6,089
4,689
3,390
2,538
1,492
1,105
681
1,081
1,887
3,245
3,127
2,288
1,440
2,372
1,972
1,353
2,391
6,255
5,889
6,484
6,744
7,846
9,809
10,156
8,970
8,665
13,859
15,277

31,800
34,773
32,312
31,919
31,949
32,661
32,716
32,334
32,164
31,898
33,642
33,575
30,640
30,449
30,588
32,340
31,816
30,365
30,113
36,063
29,365
29,352
29,015
48,489
29,858
29,275
29,019
28,457
28,379
28,331
28,498
28,445
27,377
26,879
24,869
24,846
24,844
26,925
21,045
19,962
19,886
18,747
17,747
17,215
16,390
15,631
15,344
14,021
14,021
14,291
15,457
15,988

212,208
203,196
215,248
212,816
198,539
196,282
179,246
192,185
197,733
200,958
188,523
188,132
194,210
201,865
188,152
186,962
186,199
190,811
198,426
180,864
177,395
173,264
177,994
181,254
185,049
186,944
206,367
209,584
208,168
206,217
207,384
209,429
207,839
203,874
210,290
220,180
222,209
208,748
217,396
227,737
227,571
208,799
212,429
216,364
224,833
220,480
221,414
225,155
221,705
230,840
219,297
216,638

115,100
106,117
108,373
111,478
109,680
110,378
107,694
109,586
112,167
111,647
104,286
114,671
112,887
107,286
107,478
107,695
103,329
103,209
103,879
106,849
97,092
100,341
101,799
108.663
98,420
101,098
103,218
104,230
104,270
102,691
108,632
101,243
105,504
98,025
100,668
103,810
105,836
100,632
100,161
106,272
106,114
104,042
103,879
106,501
101,280
103,109
103,093
103,783
102,899
101,928
100,286
98,997

273,005
266,856
263,141
262,522
254,979
256,313
254,110
260,274
255,895
251,623
241,622
242,344
239,274
236,446
235,815
233,467
234,527
233,280
234,291
229,259
228,229
230,413
228,216
226,633
224,125
226,352
224,513
223,653
219,130
219,341
217,307
219,778
216,543
214,334
213,765
213,818
213,815
210,130
208,698
205,264
207,445
201,154
200,853
198,986
204,422
200,725
200,324
197,873
198,014
203,767
207,593
205,198

58.2
57.2
61.3
59.5
56.4
55.3
51.5
53.6
55.7
57.0
54.5
52.7
55.1
58.7
54.8
54.8
55.1
56.7
58.7
53.8
54.5
52 4
53.9
54.1
57.4
57.1
63.0
63.9
64.4
64.0
63.6
65.2
64.5
65.3
66.9
69.3
69.5
67.2
70.4
73.1
72.6
68.4
69.7
70.8
73.5
72.6
73.0
74.6
73.7
75.5
71.2
71.2

61.5
60.1
63.0
60.9
58.9
57.8
53.4
54.8
56.6
57.8
54.9
53.0

March 18, net deposits, as given below, were used in calculating reserve percentages:
Jan. 7
$91,593,000
Feb. 4
$97,292,000
Mar. 4
14
88,478,000
11
98,568,000
11
21
88,182,000
18
93,978,000
28
95,128,000
25
97,994,000

....
....

....
....

....
....
....
....
....

$98,843,000
100,964,000

'Adjusted percentages are calculated after increasing or reducing reserves held by the amount of accommodation extended to or received from
other Federal Reserve Banks. A blank (..) in this column indicates that no accommodation was extended to or received from other Federal
Reserve Banks.
'Includes $45,000 of municipal warrants.
•Includes $95,000 of municipal warrants.