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THIRD ANNUAL REPORT OF THE FEDERAL RESERVE BANK OF PHILADELPHIA FOR THE YEAR ENDED DECEMBER 31, 1917 WASHINGTON GOVERNMENT PRINTING OFFICE 1918 THIRD ANNUAL REPORT OF THE FEDERAL RESERVE BANK OF PHILADELPHIA FOR THE YEAR ENDED DECEMBER 31, 1917 WASHINGTON GOVERNMENT PRINTING OFFICE 1918 LETTER OF TRANSMITTAL. Federal Reserve Bank, Philadelphia, Pa., January 15, 1918. Sir: I have the honor to submit herewith the third annual report of the Federal Reserve Bank of Philadelphia, covering the period from January 1, 1917, to December 31, 1917. Respectfully, yours, Richard L. Austin, Chairman and Federal Reserve Agent. Hon. W. P. G. Harding, Governor Federal Reserve Board, Washington, D. C. 8 TABLE OF CONTENTS. Page, I. Introduction...................................................... 7 II. Results of operation................................................................................... 7-15 Comparative statement of condition.................................................... 7 Earnings and expenses......................................................................... 12 III. Reserve position of the bank...................................................................... 16 IV. Discount rates.............................................................................................. 17 V. Investments of the bank............................................................................. 18-28 Analysis of earnings assets.................................................................... 18 Earnings from investments.................................................................. 21 Rates of earnings from investments..................................................... 21 Distribution by maturities of bills discounted, acceptances, and warrants............................................................................................. 22 Collateral notes and bills discounted—members................................ 24 Acceptances bought in open market................................................... 26 United States securities........................................................................ 27 Municipal warrants............................................................................... 28 VI.Federal reserve note issues........................................................................... 29-33 VII. Internal management of the bank.............................................................. 33-38 Directors and officers............................................................................ 33 Transit department operations............................................................. 35 Gold settlement fund............................................................................ 37 Collection department.......................................................................... 38 Government deposits............................................................................ 38 VIII. General banking conditions in the district and relations with member banks........................................................................................................ 39-43 Banking power of the district.............................................................. 39 Condition of member banks................................................................. 40 Acceptances up to 100 per cent........................................................... 42 Banks granted fiduciary powers........................................................... 42 IX. State bank membership................................................................................ 44 X. Fiscal agency of the United States............................................................... 44-47 Liberty loan campaigns........................................................................ 45-47 XI. Business conditions....................................................................................... 48-56 Bank clearings...................................................................................... 53 Commercial failures.............................................................................. 55 Imports and exports............................................................................. 55 Freight-car movements......................................................................... 56 Stock-exchange transactions................................................................ 56 Building operations.............................................................................. 57 Postal business...................................................................................... 58 Crops...................................................................................................... 58 5 THIRD ANNUAL REPORT OF THE FEDERAL RESERVE BANK OF PHILADELPHIA. I. Introduction. The period covered by this report has been probably the most momentous in the life of the Nation since the days of the Civil War. The resources of the banks have been called upon to meet the ab normal demands growing out of the vast increase in business inci dent to the war, and on account of the floating of the Liberty loans. The Federal Reserve Banks have enabled them to meet these de mands. II. Results of Operation. Comparative statement of condition of the Federal Reserve Bank of Philadelphia. Dec. 31,1917. Dec. 30,1916. $4,008,400.00 31,903,836.94 18,390,067.91 9,649,950.00 10,000.00 $900,000.00 663,076.79 13,656,430.08 2,825,000.00 465,112.22 $168,274.06 2,542,975.94 1,993,750.00 1,484,147.13 63,962,254.85 18,509,619.09 6,189,147.13 58,906.44 511.99 2,055.51 17,057.93 27,708.01 2,445.83 1,367.18 10,142.15 43,172.04 1,684.23 25,580.56 15,409.87 Dec. 31,1915. RESOURCES. Collateral notes—members........ Bills discounted—members.... Bills bought in open market... United States bonds and notes. Municipal warrants...................... Earning assets.................... Interest accrued on United States bonds and notes, Cost of unissued Federal Reserve notes....................... Expenses paid in advance................................................ Transit department expenses.......................................... Furniture and equipment—general............................... Furniture and equipment—transit department.... Organization expense.......................................................... Due from Federal Reserve banks—net........................ Due from banks and bankers.......................................... Exchanges for clearing house, cash items, etc........... Due from member banks—overdrafts.......................... Federal Reserve notes on hand...................................... National and Federal Reserve notes of other banks Nickels and cents.................................................................. Mutilated currency forwarded for redemption.......... Miscellaneous assets............................................................. Gold settlement fund.......................................................... Gold redemption fund1...................................................... Gold coin and certificates.................................................. Bank of England sterling gold account........................ Other lawful money............................................................ 18,491.31 12,370,908.10 1,517,804.61 7,378,564.69 12,804.81 4,348,590.00 1,353,500.00 209.09 56,027.50 110,032.85 32,101,000.00 65,445,755.00 19,064,667.50 3,675,000.00 1,189,996.10 5,382,501.30 609,389.97 3,864,733.22 171,140.00 463,476.00 121.89 132,500.00 31,517.06 3,025,971.02 1,046,543.43 33,959.73 380,267.50 215,885.00 100.83 8,042,000.00 100,000.00 16,988,892.50 9,695,000.00 466,154.30 3,358,145.30 7,445,485.00 Reserve 121,476,418.60 25,597,046.80 20,498,630.30 Total resources 212,674,169.60 54,794,517.09 31,495,511.73 Capital.................................................................... Profit and loss...................................................... Unearned discount and unearned interest. Government deposits........................................ Due to member banks...................................... Cashier’s checks outstanding.......................... Federal Reserve notes1.................................... Miscellaneous liabilities.................................... 6,142,150.00 220,238.27 160,902.51 5,387,488.53 103,000,930.13 435,026.66 97,325,755.00 1,678.50 5,228,100.00 89,966.68 39,559.33 3,145,549.05 44,965,072.26 26,015.72 1,300,000.00 254.05 5,269,600.00 14,099.28 787,178.45 25,424,376.56 107.63 Total liabilities........................................ 212,674,169.60 54,794,517.09 31,495,511.73 LIABILITIES. 239.81 1 In June, 1917, the statement was changed so as to include gold with Federal Reserve Agent under “Gold redemption fund,” and “Federal Reserve notes” now represent gross liability for Federal Reserve notes, instead of onlv the net liability. 7 8 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. The large increase in the bank's figures is due to the increase in re serve deposits of member banks, resulting from the amendment to the act affecting the reserves, to the admittance to membership of a number of large trust companies, the increase in the amount of Federal Reserve notes outstanding, and the operation of the transit department. Federal Reserve notes in circulation at the close of the year amounted to $92,977,165, and exceeded the net amount of member bank deposits by $226,104. Every effort has been made to accumulate gold through the issue of Federal Reserve notes, and on December 31, the amount of gold deposited against notes was $65,445,755. The accumulation of this fund has largely increased the bank’s loaning power, and from time to time transfers have been made from it to maintain the bank’s reserve. Due to the admission of new members and the increase in the capital and surplus of member banks, the paid-in. capital of the bank increased $914,050 during the year, and at the end of the year amounted to $6,142,150. The following table shows the results of the operation of the bank for the year 1917: Earnings for 1917_ _________________________________________ $1, 015, 959 Expense of operation of bank proper__________________ $165. 843 Cost of Federal Reserve currency issued (including expressage, insurance, etc.)__________________________ 70.340 Miscellaneous charges account note issues_____________ ________ Depreciation on furniture and equipment_____________ 3. 782 Transit department disbursements in excess of net service charges received_________________________________ 22,120 Total________________________________________________ 262, 085 Net earnings for year_______________________________________ Profit and loss, Jan. 1, 1917_______________________ ____________ 753, 874 89, 966 Total________________________________________________ Dividends paid: Date paid, June 30, 1917; period covered, July 1, 1915, to Dec. 31, 1915; amount________________________ 155, 320 Date paid, Dec. 31. 1917; period covered, Jan. 1, 1916, to June 30, 1917 ; amount________________________ 466, 830 Interest paid on stock surrendered_________________ 1, 452 843, 840 Total________________________________________________ Profit and loss, Jan. 1, 1918_____________________________ 623, 602 220, 238 54365— 18 Chart No. 1. i 10 ANNUAL REPORT OP FEDERAL RESERVE BANK OF PHILADELPHIA. ASSETS FEDERAL RESERVE BANK OF PHILADELPHIA Chart No. 2. ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. LIABILITIES Federal reserve bank oe Philadelphia Chart No. 3. 11 12 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. EARNINGS AND EXPENSES. During the early part of the year, the greater portion of the earn ings was obtained from the purchase of bankers’ bills, but with the placing of the Government loans, the member banks began bor rowing freely and the amount of their borrowings increased rapidly as the war financing progressed. For the purpose of reserving its funds for discount purposes, the bank early in the year discontinued, as far as possible, its purchases of municipal warrants. Two dividends were declared during the year, one on June 30, 1917, amounting to $155,320.31, covering the period from July 1, 1915, to December 31, 1915, and the other on December 12, amount ing to $466,829.62, covering a period of 18 months from January 1, 1916, to June 30, 1917. The invested funds of the bank increased largely during the year, and earnings increased proportionately. Current expenses remained quite steady, the increase, considering the additional work done by the bank, being small. As the number of Federal Reserve notes issued greatly increased, their cost became a correspondingly greater item of expense. Net earnings reached their maximum in December, when they were at the rate of 30.2 per cent on the paid-in capital. In the following charts are shown the earnings and expenses by months and the rate of net earnings on the paid-in capital. Earnings and expenses. Expenses. Earnings. Profits from From sale of Sun invest United dry ments. States profits. securi ties. January... February.. March........ April.......... May............ June............ July............ August.... September. October... November. December. $36,836 $11,388 42,145 2,380 43,664 46,938 69,525 76,934 85,997 89,911 94,804 84,170 121,412 194,717 Total, 1917. 987,057 Total, 1916. 376,898 $170 565 1,130 874 2.521 1,770 1,026 403 1,048 1,248 1.521 2,856 Total earn ings. Transit depart ment Ex Depre expense Total penses Note cia in ex ex of ope issues, tion cess of pense. ration. charges. net service charges. $48,394 $11,354 45,091 11,228 $4,320 44,794 11,580 3,760 47,812 11,303 4,400 72,046 12,251 2,880 78,704 12,373 6,840 87,023 12,753 760 90,314 15,036 3,040 95,853 14,991 8,600 85,419 16,019 12,160 122,933 14,323 11,060 197,573 20,300 12,520 13,768 15,132 1,015,959 163,510 70,340 11,170 20,137 3 417,939 164,983 17,603 $13 13 17 23 27 61 74 12 Net avail able for divi dends. >$1,804 $13,158 $35,236 131 15,679 29,411 309 15,649 29,145 2 260 15,443 32,369 144 15,288 56,758 817 20,043 58,661 976 14,506 72,517 1,755 19,854 70,461 4,133 27,751 68,102 2,386 30,626 54,792 4,153 29,610 93,323 5,769 38,601 158,972 240 > 22,120 256,210 759,749 15,653 38,241 167,998 249,941 1 Includes $1,367.18, balance carried over from 1916. 2 Net service charges in excess of disbursements. 3 Includes $9,734 realized by conversion of United States bonds. An nual rate of net earn ings. 8.4 7.3 6.5 7.5 12.7 13.5 16.3 15.7 15.7 12.2 20.0 30.2 12.2 4.78 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. Chart No. 4. 13 14 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. Earnings and expenses. 1917 1916 EARNINGS. Bills discounted—members.................................. Bills bought in open market............................... Investments: United States bonds and notes................... Warrants............................................................. Profits realized on United States securities.. Sundry profits........................................................... Total earnings................................................................................................................... $370,359 474,653 $28,391 198,243 123,875 18,170 13,768 15,132 81,081 69,183 36,634 5,407 1,015,959 417,939 22,057 350 174 18,362 306 749 230 46,206 42,615 8.311 3,590 1,080 1,361 163 1.700 9,070 2,803 326 1,284 4.700 1,426 7.311 233 8,702 39,100 52,398 6,012 3,220 820 895 558 2,000 9,250 1,231 12 11,552 3,415 1,147 6,648 987 6,041 163,510 70,340 164,983 16,600 1,003 15,653 4,000 CURRENT EXPENSES. Expenses of operation: Assessment account expenses, Federal Reserve Board........................... Federal Advisory Council (fees and traveling expenses)........................ Governors’ conferences (including traveling expenses).......................... Federal Reserve Agents’ conferences (including traveling expenses) Salaries: Bank officers.................................................. Clerical staff................................................... Special officers and watchmen................ Directors’ fees........................................................ Directors’ per diem allowance........................ Directors’ traveling expenses.......................... Officers’ and clerks’ traveling expenses.... Legal fees................................................................ Rent................................................................... '... Telephone............................................................... Telegraph................................................................ Postage and expressage..................................... Insurance and premiums on fidelity bonds Light, he at, and power................................. Printing and stationery..................................... Repairs and alterations..................................... All other expenses, not specified.................... Total expenses of operation......................................................................................... Cost of Federal reserve notes issued, including expressage......................................... Miscellaneous charges account Federal reserve note issues......................................... Depreciation of furniture and equipment.......................................................................... Disbursements of transit department in excess of net service charges received. Total current expenses, exclusive of amortization charges, account or ganization expenses.................................................................................................... Less disbursements of transit department........................................................................ 240 22,120 256,210 202,239 34,241 Current expenses of bank proper, exclusive of amortization charges, ac count organization expenses................................................................................... 256,210 167,998 Net earnings for year...................................................................................................... Per cent of average paid-in capital....................................................................................... 759,749 12.5 249,941 4.7 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. Chart No. 5. 15 16 ANNUAL REPORT OP FEDERAL RESERVE BANK OF PHILADELPHIA. III. Reserve Position of the Bank. The reserve position of the bank on the last Friday of each month is shown below. The bank wishes to express its appreciation of the cooperation of the member banks and State institutions for their serv ices in strengthening its gold reserve. Upon the request of the bank? they deposited their gold and accepted in exchange Federal Re- Chart No. 6. ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 17 Reserve position on lost Friday of each month during 1917. [000’s omitted.] Liabilities (net). Deposit. January... February.. Mai ch.... April......... May........... June........... July........... August.... September October... November. December. $49,588 $15,537 47,648 20,161 50,697 24,181 50,034 29,068 56,568 32,686 94,361 39,703 82,256 41,257 72,214 43,502 79,143 51,026 81,946 59,612 66,103 78,414 94,363 93,642 Reserves. Total gold Total and liability. gold certificates. $65,125 67,809 74,878 79,102 89,254 134,064 123,783 115,716 130,169 141,558 144,517 188,005 $55,654 52,100 61,110 54,983 57,804 98,993 98,577 78,945 100,365 108,510 98,106 119,544 Reserve percentage. Against net deGold Against deposit liaagainst comLawful hilities. JFederal bined money, Reserve note silver, Total notes and and reserves. silver in actual deposit Gold. certificircula- liabilicates. tion. ties. $922 233 198 556 445 1,285 1,480 1,061 1,103 759 940 1,148 $56,576 52,333 61,308 55,539 58,249 100,278 100,057 SO, 006 101,468 109,269 99,046 120,693 Per ct. Per ct. Per ct. 78.1 73.5 76.0 57.3 48.2 69.2 80.0 64.8 75.7 73.5 67.4 64.8 80.0 74.0 76.5 58.5 49.0 70.8 81.5 65.0 76.5 74.5 68.8 66.0 108.6 84.5 92.6 90.5 93.2 84.6 79.5 73.7 79.0 80.9 68.9 62.3 Per ct. 86.9 77.1 81.8 70.3 65.3 74.5 80.9 69.1 77.5 77.3 68.5 64.1 Total gold reserve includes gold in the hands of the Federal Reserve Agent on the last Friday of each month. IV. Discount Bates. The discount rates remained unchanged from September 21, 1916, to May 10, 1917, when the 15-dav rate for commercial paper and member bank collateral notes was reduced to 3 per cent. In order that member banks might extend the necessary accommodation to their customers in making payment for Liberty loan bonds, a special rate of 3| per cent was established for the discount of paper and member bank collateral notes having a maturity of not over 90 days and secured by Liberty loan bonds or United States Treasury certi ficates of indebtedness. The second Liberty loan having been issued at 4 per cent, a gen eral readjustment of the discount rates seemed advisable, and on November 26 the bank’s rates for discount were advanced. The changes are given herewith: 54365—18----- 3 18 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. Changes in discount rates during calendar year 1917. Rate in effect— Jan. 1, May 10, June 1, June 11, Nov. 2, Nov. 26, Nov.30, Dec. 7, 1917. 1917. 1917. 1917. 1917. 1917. 1917. 1917. Discounts maturing within 15 days, including mem ber banks’ collateral notes. Paper including member banks’ collateral notes se cured by United States certificates of indebted ness or Liberty loan bonds maturing within 15 days Paper maturing within 16 to 60 days...................................... Paper maturing within 61 to 90 days...................................... Paper secured by United States certificates of in debtedness or Liberty loan bonds maturing from 16 to 90 days...................................... Agricultural and live-stock paper maturing after 90 days............................................ Trade acceptances maturing from 1 to 60 days................... Trade acceptances maturing ing from 60 to 90 days.......... Commodity paper maturing within 90 days....................... 3J 3 3 4 4 34 Jan. 1, 1918. 34 34 4 4 34 44 44 44 44 4 4 5 44 i4 34 34 3i .............. .............. 4 4 4 (2) 1 Rate of 4 per cent for paper maturing 16 to 60 days effective Nov. 26. 2 Rates for commodity paper merged with those for commercial paper of corresponding maturities. Bankers’ acceptances purchased at the market rate, subject to agreement, V. Investments. ANALYSIS OF EARNING ASSETS. Operations during the early part of the year were on a relatively small scale. The total loans and investments made during January were only $3,940,771. In the month of May, when the war financing began, there was a large increase in the amount of loans to member banks and the total loans and investments for the month reached $25,878,818. This amount was almost doubled in June. Operations connected with the second Liberty loan again stimulated borrowings during the latter months of the year, loans made in December amount ing to $45,025,375. Bills discounted for members during 1917 comprised 67.8 per cent of the total operations, compared with 26 in 1916; bills bought com prised 26 per cent in 1917, compared with 62 per cent the previous year. ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 19 Loans and investments made by months. Month. Bills dis counted— members. Bills bought in open market. Municipal warrants. $4,598,260 40 $1,268,322 25,203 2,575 126,667 29,219 317,700 10,200 125,938 January................................ February............................. March.................................... April...................................... May........................................ June....................................... July........................................ August.................................. September.......................... October................................ November........................... December............................ $565,122 1,682,222 3,009,293 2,385,421 20,445,040 42,724,903 22,175,858 18,170,441 18,934,001 16,819,730 31,478,602 45,025,375 $2,107,327 10,058,886 4,610,296 5,268,807 5,404,559 3,441,475 11,472,425 7,450,793 6,056,282 4,565,180 19,479,626 5,998,140 Total, 1917............... Per cent of total................ Total, 1916.............. Per cent increase or de crease, 1917 over 1916.. 223,416,008 67.8 $22,328,600 85,913,796 26.0 $53,122,000 18,792,250 5.7 $2,500,000 +900 +61 + 650 Total. United States securities. 1917 1916 $3,940,771 11,766,311 12,220,424 7,780,935 25,878,818 46,166,378 33,648,283 26,064,872 25,000,483 21,394,910 50,991,728 64,889,565 $3,012,800 1,948,800 6,542,700 5.296.500 6,562,000 7,329,200 7,318,400 4,476,100 7.571.500 7,469,300 9,462,600 18,781,700 1,621,424 0.5 $7,823,000 329,743,478 100.0 $85,771,600 85,771,600 -80 +284 10,000 33,500 13,866,050 20 ANNUAL REPORT OP FEDERAL RESERVE BANK OF PHILADELPHIA. earning Assets-Average daily Amount on Hand-1317 Federal ‘Reserve Bank of Philadelphia Chart No. 7. ANNUAL REPORT OP FEDERAL RESERVE BANK OF PHILADELPHIA. 21 Average daily holdings of the several classes of earning assets for each month and calendar year 1917. Bills dis counted— members.' Month. Bills bought. Total. United States securities. Municipal warrants. 1917 1916 January................................ February............................. March.................................... April...................................... May....................................... June...................................... July....................................... August.................................. September.......................... October................................ November........................... December............................ $766,946 902,672 1,413,082 1,212,746 6,285,864 12,394,010 13,852,692 10,540,930 12,656,277 9,958,904 15,756,446 33,346,433 $10,501,049 13,884,435 11,757,278 11,018,096 12,491,969 10,405,492 12,401,444 18,014,284 18,019,258 15,298,910 23,909,654 21,297,307 $2,735,129 2,016,107 2,147,330 6,597,280 6,597,300 6,363,966 3,097,300 3,107,558 3,666,040 3,740,400 3,495,700 7,654,381 $928,012 1,432,016 1,400,076 1,497,731 1,421,461 377,967 158,363 124,946 125,937 7,419 25,633 39,177 $14,931,136 18,235,230 16,717,766 20,325,853 26,796,594 29,541,435 29,509,799 31,787 718 34,467,512 29,005,633 43,187,433 62,337,298 $7,722,182 8,140,448 11,140,662 13,950,526 16,719,120 17,120,064 18,119,076 17,357,542 17,728,745 18,881,183 17,972,828 22,239,398 Average for year.. Per cent............................... Average for 1916... Per cent increase or de crease, 1917 over 1916.. 9,923,917 33.3 $1,005,376 14,916,598 50.2 $8,585,000 4,268,208 14.5 $3,325,005 628,228 2.0 $2,675,600 29,736,951 100.0 $15,590,981 15,590,981 +890 +74 +27 -76 +91 EARNINGS FROM INVESTMENTS. The total earnings during January amounted to $36,836; these were doubled in June, and in December amounted to $194,717. The month of May marked a sudden increase in earnings from bills discounted and loans to members, and in the month of June they exceeded, for the first time, the earnings from bills bought. Earnings from loans and investments for the calendar year 1917. Month. Bills discounted, members. Bills bought. Total. United States securities. Municipal warrants. 1917 January................ February............. March.................... April...................... May........................ June...................... July....................... August.................. September.......... October................ November........... December............ $3,549 2,700 4,477 3,551 17,705 36,112 43,877 33,022 38,178 31,328 47,258 108,602 $24,499 31,613 30,441 26,874 33,769 26,927 33,766 48,597 46,982 43,065 65,373 62,746 $6,981 4,693 5,359 13,028 14,391 12,862 7,828 7,858 9,225 9,738 8,696 23,216 $1,807 3,139 3,387 3,485 3,660 1,033 526 434 419 39 85 153 $36,836 42,145 43,664 46,938 69,525 76,934 85,997 89,911 94,804 84,170 121,412 194,717 Total, 1917 Per cent of total. Total. 1916.......... 370,359 37.7 28,394 474,653 48.0 198,243 123,875 12.5 81,130 18,170 1.8 69,183 987,057 100.0 376,898 1916 • $14,512 14,113 20,464 25,619 31,969 31,464 36,418 35,596 36,107 40,531 37,362 52,743 376,898 RATES OF EARNINGS FROM INVESTMENTS. The annual rate of earnings on invested funds as a whole stood at 2.90 per cent at the beginning of the year. With the exception of a recession in the months of April and May. this rate has been 22 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA, steadily increasing until the rate stood at 4.61 per cent in December. Reference to the following table shows that the largest rate of return has been from bills discounted for members: Calculated annual rates of earnings from loans and investments. Total. Bills dis counted, mem bers. Bills bought in open market. United States securi ties. Munici pal war rants. January.................................................................... February.................................................................. March..*.................................................................. April.......................................................................... May........................................................................... June.......................................................................... July........................................................................... August...................................................................... September............................................................... October.................................................................... November............................................................... December................................................................ 0.0398 .0301 .0373 .0376 .0328 .0354 .0372 .0368 .0367 .0370 .0364 .0383 0.0279 .0296 .0304 .0396 .0396 .0314 .0320 .0317 .0317 .0331 .0332 .0346 0.0299 .0303 .0293 .0248 .0248 .0245 .0297 .0297 .0306 .0306 .0302 .0357 0.0313 .0285 .0284 .0292 .0293 .0332 .0391 .0409 .0405 .0406 .0405 .0461 0.0290 .0301 .0307 .0290 .0298 .0316 .0343 .0333 .0334 .0341 .0342 .0461 0.0221 .0218 .0216 .0224 .0225 .0224 .0237 .0242 .0248 .0253 .0253 .0280 Average for 1917......................................... Average for 1916.................................................. .0373 .0370 .0318 .0231 .0290 .0256 .0289 .0258 .0332 .0242 .0242 Month. 1917 1916 DISTRIBUTION BY MATURITIES OF BILLS DISCOUNTED, ACCEPTANCES, AND WARRANTS. The following table shows the total amount of bills, notes, and war rants discounted and purchased by the bank during the year, dis tributed by maturities. Borrowings incident to the placing of war loans were largely accomplished by obligations having a maturity of 15 days and less. The liquidity of the bank is indicated by the large proportion of maturities within 15 days it has carried. Hills discounted, acceptances, and warrants distributed by maturities and months for the calendar year 19If. 1-15 days. 16-30 days. 31-60 days. 61-90 days. Over 90 days. Total. January.............. February........... March.................. April.................... May...................... June.................... July...................... August................ September......... October.............. November......... December.......... $247,937 1,307,784 2,667,902 2,208,142 18,545,006 39,039,795 19,000,985 24,596,145 17,175,492 11,962,123 17,859,511 32,125,650 $226,503 2,027,128 1,061,570 874,599 2,785,098 1,839,122 1,429,165 914,557 1,205,851 1,684,876 3,375,295 6,448,283 $850,008 3,329,446 1,055,263 911,719 1,480,976 1,785,845 1,819,689 1,983,641 1,637,175 1,257,125 9,067,163 3,886,982 $1,086,242 5,047,077 2,616,577 3,656,296 2,776,111 3,475,321 8,729,150 7,926,931 4,826,189 6,068,941 20,575,808 8,562,600 $1,530,081 54,876 220,852 130,139 291,627 26,295 2,669,294 325,898 145,576 421,845 113,951 $3,940,771 11,766,311 7,622,164 7,780,895 25,878,818 46,166,378 33.648.283 35,747,172 24.990.283 21,394,910 50,991,728 51,023,515 Total, 1917 186,736,472 23,872,047 29,065,032 75,347,243 5,930,434 320,951,228 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. Chart No. 8. 23 24 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. The maturities of the bank’s earning assets on the last Friday of the year are shown in the following table: Distribution by maturities of paper and short-term investments held by the Federal Reserve Bank and the Federal Reserve Agent at close of business Dec. 28, 1917. Maturities— Total. Within 15 days. 1. Bills discounted—members: Commodity paper.......................... Trade acceptances.......................... Member banks’ collateral notes. All other............................................. Total. 2. Acceptances bought: Bankers’ acceptances— Foreign................................................. Domestic.............................................. Dollar exchange bills (sec. 13, amended)................................................ Trade acceptances— Foreign................................................. Domestic.............................................. Total. 3. Rediscounts for other Federal reserve banks............................................................ 4. Short-term investments................................ Grand total. From 16 to From 31 to From 61 to 30 days. 60 days. 90 days. .$74,658 5,845,996 14,956,692 $26,950 1,715 $11,000 48,782 $10,000 17,329 2,848,048 13,073,441 2,606,095 $47,950 142,484 5,845,996 33,484,275 20,877,346 2,876,713 13,133,223 2,633,424 39,520,705 1,392,467 730,598 4,847,303 1,702,205 3,428,027 1,384,917 3,822,999 617,100 13,490,796 4,434,820 12,189 2,135,154 273,899 i 491,547 205,559 6,823,407 5,018,503 4,440,099 18,417,163 9,700,120 18,151,726 7,073,523 57,947,868 10,000 10, ooc 23,022,500 Amounts of the several classes of discounted paper held by the Federal Reserve Bank and the Federal Reserve Agent on above date. Secured. Agricultural paper..................................................................................... Commercial and industrial paper........................................................ Member banks’ collateral notes............................................................ All other, n. s.............................................................................................. $16,514,814 5,845,996 Total bills discounted................................................................... 22,360,810 Unsecured. Total. $187,639 16,972,257 $187,639 33,487', 071 5,845,996 17,159,896 39,520,706 COLLATERAL NOTES AND BILLS DISCOUNTED----- MEMBERS. Borrowings by member banks, in the form of collateral notes, in creased from $1,307,700 in April to $15,229,000 in May and $35,690,499 in June, when they were almost entirely secured by bills receiv able. Each month from May showed an increase in the amount of notes secured by United States bonds or Treasury certificates of indebt edness. In December they amounted to $9,550,501 and notes secured by bills receivable amounted to $1,657,250. Discounts of bills receiv able increased from $5,216,040 in May to $7,034,954 in June, reaching the large total of $33,817,624 in December. The notes rediscounted ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 25 ranged in size from a few dollars to $250,000. During 1916, earnings from bills discounted and collateral notes were only 9 per cent of the total, whereas in 1917 they were 38 per cent. Bills discounted, during each month by classes of paper; earnings from dis counts and average rates of monthly and annual earnings for Ihe calendar year 1917. Members-collateral notes. Earnings. ComTrade mod- All other Secured accept ity discounts. by ances. paper. United Otherwise secured. States securities. January.................. February................ March...................... April......................... May.......................... June.......................... July.......................... August.................... September.............. October................... November.............. December............... .................. .................. .................. . ................ 8880,000 680,650 1,691,650 2,110,000 5,532,500 3,002,500; 9,209,425 9,696,501' 8230,000 815,164 8319,958 175,000 21,721 1,185,501 1,605,000 29,730 1,374,563 1,307,700' 24,199 1,053,522 14,349,000 25,758 5,190,282 6,956,061 35,009,849 78,343 16,515,320 36,874 $25,666 3,907,014 10,192,990 94,159 26,200 5,747,092 3,303,022 10,082.190 16,289 S,714;811, 184,701 25,666 4,892,718 7,755,505 100,139 29,000 14,384,533 1,511,250 99,001 22,950 33,695,673 Total, 1917.. Total, 1916.. Total. Average for balance month. Amount. 8565, 8766,946 1,682, 902,672 3,009, 1,413,082 2,385, 1,212,746 20,445, 6,285,864 42,724, 12,394,010 22,175, 13,852,692 18,170, 10,540,930 18,934, 001 12,656,277 16,819, ■’OA 9,958,904 15.756,446 31,478, 33; 346,433 45,025, 726,078 128,1.50 82,019,939 223,416,008 9,923,917 8,609,532 22,328,600 1,005,376 74,800 Aver age 83,549 0.0398 2,700 .0301 4,477 . 0373 3.551 .0376 17,705 .0328 36,112 .0354 43,877 .0372 33,022 .0368 38,178 .0367 31,328 .0370 47,258 .0364 108,602 .0383 370,359 28,391 . 0373 .0370 Amount of paper (exclusive of bankers' acceptances) discounted for member banks, distributed by maturities as of date of discount; also number of banks in district and banks accommodated during each month in the calendar year 1917. Mem Mem ber ber banks banks accom in dis mo trict. dated. January............... February............ March.................. Anril.................... May...................... June...................... July...................... August................ September.......... October............... November.......... December.......... 631 632 632 631 630 628 628; 628 627 627i 630 636 14 18 17 16 43 79 64 67 76 79 116 139 Total. 15 days or less. 16-30 days. 31-60 days. 61-90 days. 812,080 88,294 30,769 26,477 268,424 5S9,704 966,750 923,701 469,187 629,448 731,106 795,492 $184. 8247,937 $120, 234; 1,149,757 205, 2,667,902 234, 74, 53; 2,164,269 137, 338' 18,545,006 1,2S3, 1,640: 38,818,843 1,67«, 940; 18,862,985 403, 394, 14,596,145 256. 17,174,648' 717; 568, 716, 11,962,123 509, 17,462,072 708, 987 1,575 32,125,650 6,206, 425.2,897 Over 90 days. 1917 $800 $565, 4,876 1,682, 1,610 3,009, 3,472 2,385, 9,529 20,445, 1,295 12,724, 1,870 22.175, 18; 170, 4,214 18,934, 2,425 16,819, 900 31,478, 45,025, 1916 $242,773 109,247 212,010 922,680 1,590,123 945,730 1,380,125 739,515 546,346 307,303 3,415,021 11,917,727 175,777,337 12,286,5739,789,675 25,531,432 30.991 223,416,008 22,328,600 Total................ Per cent of total.............. 78.7 4.3 11.4 .1 100.0 ACCEPTANCES BOUGHT IN THE OPEN MARKET. The total amount of bills bought in the open market amounted to $85,913,796, compared with $53,122,000 the previous year. The 54365—18----- 4 26 ANNUAL REPORT OE FEDERAL RESERVE BANK OP PHILADELPHIA. average rate of return for the year was 3.18 per cent compared with 2.31 per cent in 1916. Acceptances bought in the open market. Earnings. Bankers’ accept ances. Trade accept ances. January.............................................. February........................................... March................................................. April.................................................. May..................................................... June.................................................... July................................................... August................................................ September........................................ October.............................................. November......................................... December.......................................... $2,095,200 9,974,000 4,610,296 5,268.809 5.355.600 3.208.600 11,208,800 7,007,900 5,950,470 4,565,180 18,786,857 5,944,691 $12,127 84,886 692,769 53,449 $2,107,327 10,058,886 4,610,296 5,268,807 5,404,559 3,441,475 11,472,425 7,450,793 6,056,282 4,565,180 19,479,626 5,998,140 Total, 1917............................ Total, 1916............................. 83,976,401 51,769,000 1,937,395 1,353,000 85,913,796 53,122,000 48,959 232,875 263,625 442,893 105,812 Average balance for month. Total. $10,501,049 13,884,435 11,757,278 11,018,096 12,491,969 10,405,492 12,401,444 18,014,284 18,019,258 15,298,910 23,909,654 21,297,307 14,916,598 : 8,585,000 ! Amount. Average rate. $24,499 31,613 30,441 26,874 33,769 26,927 33,766 48,597 46,982 43,065 65,373 62,746 0.0279 .0296 .0304 .0306 .0396 .0314 .0320 . 0317 .0317 .0331 .0332 .0346 474,653 198,243 .0318 .0231 Bills bought, distributed bg maturities. Total. 15 days or less. Over 90 days. 16-30 days. 31-60 days. 61-90 days. 1917 January... February.. March........ April.......... May............ June............ July............ August.... September. October... November. December. $158,027 43,873 220,952 138,000 844 397,439 Total, 1917.......... Per cent.......................... Total, 1916. 959,135 1.1 $106,300 1,821,861 987,128 737,158 1,501,582 164,552 1,025,374 520,434 637,528 1,175,391 2,666,308 241,858 $665,906 3,095,418 820,693 857,957 1,142,411 145,354 879,227 1,601,231 919,546 540,876 7,458,126 989,174 11,585,474 13.5 >10,322,000 19,115,919 1 Within 30 days. $1,074,162 4,933,580 2,585,808 3,629,819 2,507,687 2,885,617 6,762,400 5,003,230 4,357,002 2,429,493 8,844,702 4,767,108 49,780,608 99 9 58.0 11,566,000 231,324,000 $260,959 50,000 216,667 252,879 25,000 2,667,424 325,898 141,362 419,420 113,051 4,472,660 5.2 1916 $2,107,327 10,058,886 4,610,296 5,268,807 5,404,559 3,441,475 11,472,425 7,450,793 6,056,282 4,565,180 19,479,626 5,998,140 $194,000 709,000 4,759,000 3,990,000 4,109,000 5,766,000 5,049,000 3,661,000 6,591,000 5,'962,000 5,670,000 6,662,000 85,913,796 100.0 53,122,000 53,122,000 2 Sixty days and over. UNITED STATES SECURITIES. Early in the year the Federal Reserve Board announced that Federal Reserve Banks would not be required to purchase during the year more than $15,000,000 United States 2 per cent bonds from member banks, and such bonds would have to be offered to the Treas ury Department on or before March 21. The aggregate of bonds offered amounted to $10,877,500, of which amount $1,098,200 was allotted to the Federal Reserve Bank and paid for on April 1. Sub- ANNTTAT, REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 27 sequently $549,200 was converted into United States 3 per cent bonds, and $549,000 into one-year 3 per cent notes. In connection with the Government financing, the bank has from time to time taken over blocks of bonds and certificates of indebted ness, which were disposed of later. Income from this class of invest ment amounted to $123,875. The average rate of return was 2.90 per cent. Profits realized from the sale of United States securities amounted to $13,768. The following tables show the holdings of United States securities: United States securities. Tncoine. Amount purchased. Average balance. Amount. January... February.. March......... April........... May............. June............. July............. August.... September. October.... November. December.. 13,866,050 $2,735,129 2,016,107 2,147,330 6,597,280 0,597,300 6,363,966 3,097,300 3,107,558 3,666,040 3,740,400 3,495,700 7,654,381 $6,981 4,693 5,359 13,028 14,391 12,862 7,828 7,858 9,225 9,738 8,696 23,216 0.0299 . 0303 . 0293 .0248 .0248 . 0245 .0297 .0297 .0306 .0306 .0302 .0357 18,792,250 2,500,000 4,268,208 3,574,000 123,875 81,130 .0290 .0256 $4,598,260 40 317,700 10,200 Total 1917 Total 1916 United States securities held on last day United States bonds with circulation privilege. 2 per cent 2 per cent consoli Panama, dated of 1936-1938. 1930. United States Treas ury certificates of indebtedness. $6,260 100 100 100 100 100 100 100 100 100 each month. 3-4 per cent. 3per cent conver 3 per cent sion one-vear bonds, notes. 1946-47. $137,000 $1,092,000 of United States bonds without circulation privilege. 2 per cent. January... February. March.... April......... May........... June.......... July........... August.... September October... November. December. Rate. $3,500,000 3,500,000 3,500,000 $658,000 577,000 205,000 549,200 549,200 549,200 549,200 549,200 549,200 549,200 549,200 549,200 Liberty loan. $1,999,000 1,999,000 1,999,000 2,548,000 2,548,000 2,548,000 2,548,000 2,548,000 $317,700 632,500 2,548,000 2,548,000 1,100 1,100 2,548,000 2,548,000 6,552,650 Total, 1917. $2,135,000 1,999,000 6,597,260 6,597,300 6,597,300 3,097,300 3,097,300 3,415,000 4,387,800 3.675.400 3.303.400 9,649,950 28 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA, MUNICIPAL WARRANTS. Investments in municipal warrants have been very much less than during the previous year. It became apparent early in the year that there would be abundant investment for the bank’s funds in redis counting and open-market operations, and the purchase of municipal warrants was discouraged. Municipal warran ts. Earnings. City warrants. Other warrants. Total. Average balance. Amount. January.... February.. March......... April........... May............. June............. July............. August.... September. October.... November. December.. $1,268,322 25,203 2,575 126,667 25,219 $4,000 125,938 Totals 1917. Totals 1916. 1,573,924 $1,268,322 25,203 2,575 126,667 29,219 125,938 10,000 33,500 10,000 33,500 47,500 1,621,424 7,823,000 Rate, $928,012 1,432,016 1,400,076 1,497,731 1,421,461 377,967 158,363 124,946 125,937 7,419 25,633 39,177 $1,807 3,139 3,387 3,485 3,660 1,033 526 434 419 39 85 153 0.0313 .0285 .0284 .0292 .0293 .0332 .0391 .0409 .0405 .0406 .0405 .0461 628,228 2,675,600 18,170 69,183 .0289 .0258 Warrants purchased during 1917, distributed by maturities. Total. 60 days. January.............................................................................. February............................................................................ March.................................................................................. April.................................................................................... May...................................................................................... June......................................................................... July...................................................................................... August........................................................................ $125,938 September......................................................................... October.............................................................................. November.......................................................................... 33,500 December........................................................................ Total........................................................................ 159,438 90 days. Over 90 days. $1,268,322 $25,203 2; 575 126,667 29,219 1917 1916 $1,268,322 25*203 2*575 126,667 29,219 $1,576,000 630,600 855,700 100,000 862,800 617,600 889,800 75,600 434,200 1,200,300 378,200 202;200 125,900 10,000 33,500 10,000 37,778 1,424,208 1,621,424 7,823,000 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 29 VI. Federal Reserve Note Issues. The comparative statement of condition of the Federal Reserve agent’s accounts follows: Comparative statement of the Federal Reserve Agent’s accounts. Dec. 31, 1917. Dec. 30, 1916. $10,160,000 97,325,755 $7,260,000 17,069,590 $2,680,000 9,160,000 17,994,245 34,855,506 6,150,410 1,300,000 640,000 Dec. 31, 1915. RESOURCES. Federal Reserve notes on hand.................................................................. Federal Reserve notes outstanding........................................................... Federal Reserve notes sent to Comptroller of Currency for destruc tion .................................................................................................................... Bills to seeure Federal Reserve notes......................................................... Funds to redeem Federal Reserve notes: Gold com and certificates on hand.................................................... Lawful money on hand.......................................................................... Gold redemption fund............................................................................ Gold with Federal Reserve Board..................................................... 4,220,000 3,730,000 4,160,000 4,966,755 54,759,000 859,590 11,180,000 5,000,000 Total.......................................................................................................... 63,945,755 15,769,590 9,160,000 Total resources...................................................................................... 224,281,261 47,549,500 21,640,000 Federal Reserve notes received from Comptroller of Currency (gross amount)................................................................................................ Collateral received from Federal Reserve Bank...................................... Provision for redemption of Federal Reserve notes.............................. 125,480,000 34,855,506 63,945,755 30,480,000 1,300,000 15,769,590 12,480,000 Total liabilities........................................................................................ 224,281,261 47,549,500 21,640.000 LIABILITIES. 9,160,000 ANNUAL REPORT OP FEDERAL RESERVE BANK OF PHILADELPHIA. 30 FEDERAL RESERVE NOTES ISSUED BY FEDERAL RESERVE AGENT FEDERAL RESERVE BANK OF PHILADELPHIA Millions Millions OP DOLLARS OF DOLLARS 140 140 130 130 '//////////, 120 120 no no 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 9, 20 10 DEC 31.1915 MO 1 I— AND DESTROYED PuRHAM BWOS DEC 30.1916 rXXV ® NOTES IN HANDS OF THE FEDERAL RE5ERVE AGENT PM.UA Chart No. 9. 20 10 DEC 31.1917 , . .. N0TE5 I55UED TO V//A BANK BY THE FEDERAL RESERVE AGENT ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 31 The demand for currency has been heavy, due to the abnormal activity in all lines of business. The act of the Pennsylvania Legis lature, making Federal Reserve notes a part of the lawful reserve of State institutions, effected the exchange of a considerable amount of gold held by such institutions for Federal Reserve notes. The amendment to the Federal Reserve Act, depriving vault cash of its former character of bank reserve, and requiring that all member bank reserves be carried with the Federal Reserve Bank exclusively, also induced the member banks to exchange their gold for Federal Re serve notes. ISSUE OF NOTES BY MONTHS. The amount of notes in circulation increased steadily, as shown by the following table: Federal reserve notes issued and in actual circulation. Outstandat begining of month. January... February.. March........ April.......... May............ June............ July............ August.... September. October... November. December. $17,069,590 16,828,690 22,103,470 25,710,270 30,432,570 34,303,070 41,905,670 42,203,960 45,472,060 53,318,135 65,528,385 81,354,665 r it Issued during month. $6,060,000 4,040,000 5,280,000 4,400,000 8,400,000 1,000,000 4,100,000 10,700,000 14,700,000 17,000,000 17,920,000 Re deemed. Outstand ing at end of month. $240,900 $16,828,690 785,220 22,103,470 433,200 25,710,270 557,700 30,432,570 529,500 34,303,070 797,400 41,905,670 701,710 42,203,960 831,900 45,472,060 1,353,925 53,318,135 1,698,250 65,528,385 1,173,720 81,354,665 1,948,910 97,325,755 Held by Federal Reserve Bank at end of month. In actual circulation at end of month. 1917 $741,595 $16,087,095 1,253,975 20,849,495 1,372,835 24,337,435 1,335,445 29,097,125 1,123,155 33,179,915 2,116,850 39,888,820 846,920 41,351,040 2,269,400 43,202,660 2,291,625 51,026,510 4,415,280 61,113,105 2,930,265 78,424,400 4,348,590 92,977,165 1916 $8,098,555 7,485,050 7,062,455 6,655,055 6,156,380 6,679,130 7,322,000 6,920,010 7,134,080 8,047,290 12,601,630 16,898,450 32 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. GOLD AMD COLLATERAL HELT BY FEDERAL RESERVE AGENT AS SECURITY FOR FEDERAL RE5ERYE N0TE5 OUTSTANDING federal Reserve bank or Philadelphia federal reserve notes outstanding = 100 % Chart No. 10. DENOMINATIONS. . Notes of the denominations of $10 and $20 were especially in de mand and were issued in large quantities, the following table show ing the amount of each denomination issued: Denominations of Federal Reserve notes issued during 1911. Total. Fives. January.............................. February............................ March.................................. April.................................... May...................................... June...................................... July...................................... August................................ September.......................... October............................... November.......................... December.......................... Tens. Twenties. Fifties. Hundreds. 1917 1916 $325,000 $400,000 $400,000 800,000 200,000 890,000 1,800,000 1,000,000 1,600,000 400,000 350,000 1,200.000 3,200,000 1,200,000 $6,060,000 4,040,000 5,280,000 4,400,000 8,400,000 1,000,000 4,100,000 10,700,000 14,700,000 17,000,000 17,920,000 Total, 1917.............. 11,100,000 30,794,000 38,320,000 5,890,000 Per cent of total.............. 32.8 6.3 11.9 40.9 Total, 1916.............. 5,752, 700 3,974,800 4,430,200 .................... 7,550,000 8.1 93,600,000 100- $100,000 $2,280,000 $3,680,000 360,000 2,400,000 1,280,000 480,000 2,080,000 2,720,000 200,000 1,080,000 2,720,000 1,160,000 2,680,000 3,360,000 520,000 480,000 420,000 1,160,000 1,920,000 1,720,000 4,140,000 3,600,000 2,300.000 4,680,000 4,720,000 1,200,000 4,800,000 6,800,000 3,160,000 4,920,000 7,040,000 1,472,700 900,000 680,000 1,360,000 6,080,000 3,340,000 14,157,700 ANNUAL REPORT OP FEDERAL RESERVE BANK OF PHILADELPHIA. 33 INTERDISTRICT MOVEMENT OF NOTES. In the following table are shown the amounts of the bank’s own Federal Reserve notes received back from other Federal Reserve Banks, also amounts, of notes of other Federal Reserve Banks re turned to the latter by this bank during 1917: w INTERDISTRICT MOVEMENT OF NOTES. Received from— Returned to— Boston.................. New York........... Cleveland............ Richmond.......... Atlanta................ Chicago................ St. Louis.............. Minneapolis........ Kansas City.... Dallas.................... San Francisco... 8634,700 5,876,300 258,495 323,920 150,650 357,500 90.600 17,000 11.600 314,450 31,575 $368,000 11,553,902 883,000 798,000 311,000 419,000 113,000 122,000 129,000 101,000 163,000 Total, 1917 Total, 1916 8,066,790 2,110,175 14,960,902 4,411,975 VII. Internal Management of the Bank. Directors of the Federal Reserve Bank of Philadelphia. Richard L. Austin, chairman and Name. Residence. Term expires. Charles J. Rhoads............................ William II. Peck.............................. M. J. Murphy.................................. . A. B. Johnson................................... E. S. Stuart........................................ G. W. F. Gaunt................................ Richard L. Austin........................... H. B. Thompson.............................. J. Davis Brodhead 1........................ Philadelphia, Pa...................... Scranton, Pa.............................. Clarke Green, Pa...................... Philadelphia, Pa...................... ........ do............................................ Muilica Hill, N. J..................... Philadelphia, Pa...................... Wilmington, Del...................... Bethlehem, Pa.......................... Dec. 31,1917 Dec. 31,1918 Dec. 31,1919 Do. Dec. 31,1917 Dec. 31,1918 Dec. 31,1917 Dec. 31,1919 Dec. 31,1918 Class. A B C. : Group 1........................ Group 2......................... Group 3......................... Group 1......................... Group 2......................... Group 3......................... Federal Reserve agent. H. B. Thompson, deputy chairman. Charles J. Rhoads, governor.] 1 Resigned Dec. 12,1917. DIRECTORS AND OFFICERS. Mr. Levi L. Rue, president of the Philadelphia National Bank, was reelected as a member of the Federal Advisory Council to rep resent the Third Federal Reserve District. In accordance with the amendment to the Federal Reserve Act approved June 21, Mr. IT. B. Thompson became deputy chairman instead of deputy chairman and deputy Federal Reserve Agent. The office of assistant Federal Reserve Agent having been created, Mr. Arthur E. Post, who had acted as assistant to the Federal Re serve Agent, was appointed to that position. On August 1 Mr. Frank M. Hardt, cashier, was elected deputy governor and cashier, and on July 3 Mr. C. A. Mcllhenny, then an officer of the Bank of 34 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. North America, was elected an assistant cashier, and on Decem ber 19 Mr. W. J. Davis was also elected an assistant cashier. These additions to the officers’ staff were made necessary by the great in crease in the business of this institution. The board of directors continued without change during the year until December 12, when the Hon. J. Davis Brodhead felt com pelled to resign because of having accepted a position with the Custodian of Alien Property. The regular elections for a class A and a class B director were held from November 20 to December 4. Mr. Charles J. Rhoads, governor of the bank, though eligible for reelection as a class A di rector, declined to be a candidate, as he believed it to be for the best interests of the bank to have elected as class A directors men who are actively connected with member banks and are thus in a position to represent the stockholders. As the result of the election, Joseph Wayne, jr., was elected a class A director by group 1 banks and Hon. Edwin S. Stuart was reelected a class B director by group 2 banks. The votes cast were as follows: GROUP 1, CLASS A. First choice. Candidates. William Bromer, vice president National Bank of Schwenksville, Schwenks ville, Pa...................................................................................................................................... Allen P. Perley, president West Branch National Bank, Williamsport, Pa.. Joseph Wayne, jr., president Girard National Bank, Philadelphia... .............. Second choice. Third choice. 14 12S 12S 14 21 51 1 52 19 2 142 GROUP 2, CLASS B. Robert Brown, manufacturer, Stroudsburg, Pa............................................................ John C. Ogden, general superintendent Cambria Steel Co., Johnstown, Pa... Edwin S. Stuart, merchant, Philadelphia, Pa.............................................................. 1 1 ° 3 At the close of the year the bank had 6 officers and 186 clerks, a total of 192, as compared with 4 officers and 85 clerks at the end of the previous year. Of this increase in the clerical force, the greatest number has been added to the transit department. The work of the teller’s depart ment has become heavy, due to the large amount of cash handled daily, and it was necessary to add 15 note counters to the force there. The issues of Liberty bonds have added greatly to the work of the fiscal agent’s department. Its force was increased in order to handle the work incident to the payment of interest on Government bonds, the payment of Government checks, the handling of war-savings stamps, etc. The force of clerks in this department will probably have to be further increased. The war has thrown much work on the Federal reserve bank, which it had neither the clerical force nor the equipment to properly ANNUAL EEPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 35 handle. The quarters of the bank are inadequate and the work was conducted under the greatest handicaps. Notwithstanding these difficulties the officers and clerks have labored without complaint, being on duty long hours, frequently working well into the night— one department working 40 hours at one stretch—in order to com plete in time the figures in connection with the bond issues. It is with great pleasure and due appreciation of these services that this acknowledgment is made of the faithful, efficient, and selfsacrificing work of the officers and clerks of this bank during the year. TRANSIT DEPARTMENT. The check-collection system inaugurated in May, 1916, has been expanded and improved and is becoming of daily increasing serv ice to member banks. The average number of checks handled in the month of January was 9,104, and their value was $7,038,420. The average number handled in December was 15,762, and the value $18,037,952, an increase of 73 per cent in the number and of 156 per cent in the value of items handled during the last and first months of the year. Of the 427 nonmember banks in the district, 310 are now taking items for remittance at par, a gain for the year of 78, and we have hopes that before long all nonmember banks will be included in our list. There are 65 clerks in the transit department, an increase for the year of 25. The cost of the department, including charges on the shipments of money, was $101,701. Of this amount $79,582 was re imbursed through the service charge of 14 cents per item, leaving a balance of $22,120 of the cost of the department to be borne by the bank. Transit department operations. Expenses of Deprecia tion operation. charges. January......... Total expense. Service charges. Disburse ments in' excess of service charges. February.............. March.................... April...................... May........................ June....................... July........................ August.................. September............ October................. November............ December............. $6,372 5,440 6,361 5,890 5,836 6,825 7,261 8,917 9,284 9,836 10,244 13,249 8308 385 392 393 370 395 398 408 409 425 426 507 86,680 5,825 6,753 6,283 6,206 7,220 7,659 9,325 9,693 10,261 10,670 13,756 $6,243 5,694 6,444 6,543 6,062 6,403 6,683 7,570 5,560 7,875 6,518 7,987 8437 131 309 i 260 144 817 976 1,755 4,133 2,386 4,152 5,769 Total, 1917 Total, 1916 95,515 34,241 6,185 5,000 101,701 39,241 79,582 22,120 4,000 i Service charges in excess of disbursements. 36 ANNUAL REPORT OP FEDERAL RESERVE BANK OP PHILADELPHIA. Chart No. 11. ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 37 Total number and amount of checks handled monthly and during the calendar year 1917. On country banks in this district. On Philadelphia banks. Number. Number. Amount. Amount. 1917. January............................ February......................... March............................... April................................. May................................... June.................................. July................................... August............................. September...................... October............................ November....................... December........................ 236,705 209,967 258,170 271,590 294,068 297,818 325,518 328,261 293,780 367,892 370,357 394,055 S182,998,925 199.859,376 246,290,587 255,466,069 292,196,057 344,434,393 302,315,872 327,342,255 284,939,508 397,418,830 419,819,276 450,948,801 404,966 349,088 445,015 375,565 435,497 429,996 453,704 497,679 431,250 514,031 476,590 526,329 $52,170,483 46,345,061 54,268,671 56,344,330 62,575,631 63,741,041 67,128,277 68,456,648 68,090,876 80,355,151 76,022,606 83,281,933 Total, 1917........... Total, 1916........... 3,648,181 1,121,179 3,704,029,949 1,301,401,864 5,339,710 2,679,110 778,780,708 312,245,482 On banks in other reserve cities. Number- Total. Number. Amount. Amount. 1917. January........................... February......................... March............. ................. April................................. May................................... June.................................. July................................... August............................. September...................... October............................ November....................... December........................ 157,938 143,180 167,366 163,116 178,405 178,243 199,866 203,435 203,538 257,420 249,609 262,265 $153,902,963 140,741,052 178, S94,749 186,862,433 221,114,500 244,368,130 207,465,530 223,313,333 239,951,955 289,379,806 278,349,990 299,336,688 799,609 702,235 870,551 810,271 907,970 906,057 979,088 1.029,375 928,568 1,139,343 1,096,556 1,182,649 $389,072,371 386,945,489 479,454,007 498,672,832 575,886,188 652,543,564 576,909,679 619,112,236 592,982,339 767,153,787 774,191,872 833,567,422 Total, 1917........... Total, 1916........... 2,364,381 670,454 2,663,681,129 999,204,762 11,352,272 4,470,743 7,146,491,786 2,612,852,108 Average number of items handled daily. On Philadelphia banks. On country banks in this district. On banks in other reserve cities. Total. Number. Amount. Number. Amount. Number. Amount. Number. Amount. 1917. January.......... February.... March...’........ April................ May.................. June................. July.................. August............ September... October.......... November... December.... 9,104 9,544 9,562 11,316 11,310 11,454 13,021 12,157 12,241 14,150 15,432 15,762 $7,038,420 9,084,517 9,121,874 10,644,420 11,238,310 13,247,477 12,092 635 12,123,787 11,872,479 15,285,340 17,492,470 18,037,952 15,576 15,868 16,482 15,649 16,750 16,538 18,148 18,433 17,969 19,770 19,858 21,053 $2,006,557 2,106,594 2,009,951 2,347,680 2,406,755 2,451,578 2,685,131 2,535,431 2,837,120 3,090,582 3,167,609 3,331,277 6,074 6,508 6,199 6,796 6,862 6,856 7,995 7,535 8,480 9,901 10,400 10,491 $5,919,345 6,397,320 6,625,731 7,785,935 8,504,404 9,398,774 8,298,621 8,270,864 9,997,998 11,129,993 11,597,916 11,973,467 30,754 31,920 32,243 33,761 34,922 34,848 39,164 38,125 38,690 43,821 - 45,690 47,306 $14,964,322 17,588,431 17,757,556 20,778,035 22,149,469 25,097,829 23,076,387 22,930,082 24,707,597 29,505,915 32,257,995 33,342,696 Total, 1917. 12,087 12,273,306 17,674 2,581,355 7,481 8,825,030 37,603 23,679,692 GOLD SETTLEMENT FUND. The gold settlement fund has been of great use in settling balances between Federal Reserve Banks and large amounts were cleared 38 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. weekly. The following table shows the summary of operations and the net gains and losses: (/old settlement operations. 000’s omitted.) Period covered. Dec. 22, 1916, to Jan. 25, 1917........ Jan. 26 to Feb. 23, 1917........................ Feb. 24 to Mar. 22, 1917........................ Mar. 23 to Apr. 19, 1917........................ Apr. 20 to May 17, 1917........................ May 18 to June 21, 1917........................ June 22 to July 19, 1917........................ July 20 to Aug. 23, 1917........................ Aug. 24 to Sept. 19, 1917.................. Sept. 20 to Oct. 18, 1917.................. Oct.' 19 to Nov. 21, 1917.................. Nov. 22 to Dec. 20, 1917.................. Total of weekly statements for Gold. Transfer. period. Balance last state Total ment. With Depos Total Net Net Debit. Credit. drawn. ited. debits. debits. credits. credits. 15,105 11,300 15,117 1,000 550 10,855 4,300 1,690 3,044 1,885 Balance after close of busi ness for period. 3,962 185,411 195,564 14,115 10,523 158,109 154,297 6,711 10,855 159,994 169,190 9,196 17,441 18,071 15,117 17,441 6,699 300 552 1,586 177,742 184,147 9,167 18,071 4,120 4,500 26,300 2,919 199,413 212,116 15,622 4,854 4,854 3,200 550 32,000 257,653 310,882 53,229 23,433 23,433 1,520 140 19,000 9,147 207,104 220,023 22,066 15,972 15,972 2,250 20,761 43,000 4,751 278,639 314,023 40,135 26,867 11,025 234,807 248,211 24,429 27,376 1,698 253,398 264,029 12,329 41,947 357,168 442,717 85,549 33,511 317,400 337,281 29,471 12,837 26,867 2,150 27,386 38,131 27,376 32,800 30,740 7,000 41,947 59,950 44,965 79,000 33,511 69,570 73,015 45,000 13,000 1,000 9,590 COLLECTION DEPARTMENT. On September 1, 1917, a collection department was established. Items received for the first four months were as follows: Number of items handled. September.......................................... October................................................ November........................................... December............................................ 80 154 186 242 Amount. $89,239 367,246 664,065 1,143,353 Number paid. 74 146 174 219 Amount. $79,553 363,907 661', 604 1,119,912 Number returned. 7 8 12 23 Amount. $8,836 3,339 2,461 23,440 The greater proportion of this business comes through other Fed eral Reserve Banks and consists of drafts with bills of lading at tached, coupons, notes, and checks on which special advice of pay ment is requested. The only charges made have been our service charge of 10 cents per item, none of the remitting or crediting banks having made any charge for exchange during the period mentioned in the above table. GOVERNMENT DEPOSITS. The work in connection with the Government department has grown considerably. During the year 375,276 Government checks, amounting to $216,604,043 were handled, 5 clerks being regularly assigned to this work. ANNUAL REPORT OF FEDERAL RESERVE RANK OF PHILADELPHIA. 39 VIII. General Banking Conditions in the District and Rela tions with Member Banks. On January 1, 1917, there were 631 member banks in the district. During the year 4 national banks were organized; 6 went out of exist ence, ana 7 State institutions joined the system, making a total mem bership of 636. We give below a table showing the relation of the Third Federal Reserve District compared with the districts of the other banks. It is interesting to note that while the area of the district is only 1.2 per cent of the entire area of the country, the population is 6.4 per cent and the resources of the member national banks 8.1 per cent. Federal Reserve district. Population. Boston.............. New York.... Philadelphia.. Cleveland........ Richmond.... Atlanta............ Chicago............ St. Louis......... Minneapolis... Kansas City... Dallas............... San Francisco. Total.... Per cent. Square miles. Per cent. 6,963,987 13.Ill,816 6,632,611 9,314,762 9,278,461 10,055,640 14,154,175 9,291,698 5,164,426 7,404,443 5,637,290 6,631,164 6.7 12.7 6.4 9.0 9.0 9.7 13.7 9.0 4.9 7.1 5.4 6.4 61,345 51.890 36,844 73,310 152,314 247,209 190,513 194, 767 414,074 473.611 394,161 683,852 103,640,473 100.0 2,973.890 Total resources of member banks (000 omitted). Number of member national banks. Per cent. Per cent. 6.5 13.8 15.8 13.6 23.0 81,144.154 4,478,494 1,338.811 1,719,441 825,670 539,923 2,131,874 633,725 784,745 1,161,353 601,160 1,177,578 6.9 27.1 8.1 10.4 5.0 3.3 12.9 3.8 4.7 7.0 3.7 7.1 388 624 627 751 514 376 1,036 466 747 949 622 534 5.1 8.2 8.3 9.8 6.7 4.8 13.5 6.1 9.7 12.7 8.1 7.0 100.0 16,536,928 100.0 7,634 100.0 2.0 1.8 1.2 2.5 5.1 8.3 6.4 1 BANKING POWER OF DISTRICT. The total banking resources of the district reached a new record in 1917. The following figures include national banks (as of Sept. 11), State banks, and trust companies: Bankinff institutions—District No. 3. |000’s omitted.] Capital. Surplus. Undi vided profits . Individ ual de posits. Total Bank deposits. resources. Pennsylvania: National hanks (535)................................ State institutions (301 reporting)........ $68,877 73,691 890,385 96,609 825,053 45,781 $789,138 604,473 $163,938 81,209,999 981,010 70,767 Total (836)................................................ 142,568 186,994 70,834 1,393,611 234,705 2,191,009 New Jersey: National banks (72).................................. State institutions (40).............................. 6,242 5,336 7,035 5,038 3,017 2,007 82,649 56,197 1,525 959 109,515 71,563 11,578 12,073 6,024 138,846 2,484 181,078 1,589 3,687 1,617 3,933 696 1,962 13,269 44,100 812 4^ Total (112)................................................ Delaware: National banks (22).................................. State institutions (27).............................. 19,297 56,091 Tot/U (49)................................................ . 5,276 5,550 2,658 57,369 1,686 75,338 Totals: National banks (629)................................ State institutions (368)............................ 76,708 82,714 99,037 105,580 28,766 49,750 885,056 704,770 166,175 72,600 1,338,811 1,108,664 Total (997)................................................ 159,422 204,617 78,516 1,589,826 238,775 2,447,474 40 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. COMBINED STATEMENT OF CONDITION OF MEMBER BANKS. A comparative statement of condition of member banks is given in the following table: Date of comptroller’s call. Sept. 12,1914J Sept. 2,1915. Sept. 12,1916. Sept. 11,1917. Loans and discounts............. United States bonds.............. Other bonds, securities, etc. All other resources................. •5518,774,000 60,843, (MO 156,673,000 267,188,000 $527,799,000 61,438,000 198,582,000 267,289,000 $597,371,000 58,812,000 244,462,000 295,338,000 $647,542,000 91,707,000 283,356,000 317,256,000 Total............................... 1,003,478,000 1,055,108,000 1,195,983,000 1,338,811,000 Capital stock........................................ Surplus.................................................. Undivided profits.............................. National-bank notes outstanding Individual deposits........................... Bank deposits...................................... All other liabilities........................... 76,875,000 98,761,000 20,759,000 64,197,000 570,342,000 159,796,000 12,748,000 77,248,000 98,150,000 21,100,000 58,278,000 640,860,000 149,004,000 9,868,000 76,814,000 97,304,000 24,460,000 56,291,000 759,894,000 106,926,000 14,294,000 76,708,000 99,037,000 23,706,000 55,596,000 877,549,000 106,175,000 34,980,000 Total........................................... 1,003,478,000 1,055,108,000 1,195,983,000 1,338,811,000 KESOURCES. LIABILITIES. 1 The figures for 1914 include only those banks now in this district. RESERVE CONDITION OF MEMBER BANKS. The banks have maintained strong reserve positions as shown by the following table. On September 12, 1914, two months prior to the inauguration of the new banking system, the banks held excess reserves of only $22,000,000 above the then required reserve of $175,000,000. When the Federal Reserve Act went into operation, $50,000,000 of reserves were released. Reserve condition of member national banks. [000’s omitted.] In vault. With Federal Reserve Bank. With approved reserve agents. Total. Date of comp troller’s call. Excess. Held. Re quired. Held. Re quired. Held. Re quired. Held. Re quired. 1914. Dec. 31____ $59,727 $39,612 $18,512 $17,467 $81,328 $39,612 $159,567 $96,691 862,876 1915. Mar. 4.......... May 1.......... .Tune 23........ Sept. 2____ Nov. 10........ Dec. 31........ 59,946 54,066 60,453 48,299 50,420 50,886 41,731 42,349 43,189 36,516 38,428 37,822 20,603 20,459 21,248 19,443 20,238 27,267 18,507 18,818 19,236 16,625 17,550 24,092 101,359 106,072 111,402 98,752 94,407 75,215 41,731 42,349 43,189 36,516 38,428 30,957 181,908 180,598 193,104 166,493 165,085 153,368 101,970 103,516 105,613 89,657 94,406 92,872 79,939 77,082 87,497 76,836 70,659 60,496 1916. Mar. 7.......... May 1.......... June 30........ Sept. 12.... Nov. 17........ Dec. 27........ 55,568 51,157 46,863 55,485 51,633 53,492 40,663 40,898 40,324 42,591 44,308 44,038 28,899 26,712 34,108 41,294 47,443 62,114 25,954 26,106 33,013 34,856 44,308 44,038 93,868 87,232 73,487 80,821 78,036 66,690 33,309 33,501 25, 704 27,120 20.222 20,032 178,835 165,101 154,458 177,600 177,112 182,296 99,926 100,505 99,041 104,567 108,83fi 108,108' 78,409 64,596 55,417 73,033 68,274 74,188 54,418 52,661 50,663 46,224 46,579 44,580 59,877 63,578 64,553 68,347 74,277 46,224 46,579 44,580 70,310 68,066 85,007 77,645 64,996 21,067 21,234 20,238 199,302 193,884 180,212 68,347 74', 277 113,515 114,392 109,398 70,310 68,066 85,787 79,492 70,814 1,963 6,221 1917. Mar. 5.......... May 1.......... June 20........ Sept. 11.... Nov. 20........ 1 I ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. DEPOSITS, LOANS, AND BORROWINGS OF MEMBER 41 BANKS. Borrowings by member banks are shown in the following table. The average ratio between loans and deposits for the past three years has been 79.3 per cent. The banks in the district are generally not heavy borrowers, but they have become accustomed to relying on the Federal Reserve Bank for assistance. On December 31, 1915, of the total borrowings from all sources by banks in the district, only 5.5 per cent was from this institution. On November 20, 1917, this figure was 78.4 per cent. J/ezn&er banks—District No. 3. Borrowings from Federal Reserve Bank. Borrow Per cent ings from borrowed sources Total from other than borrowings. Federal Federal Reserve Reserve Bank. Bank. Date Deposits. Loans and discounts. 1914. Dec. 31..................... $757,895,000 8629,971,000 83.0 $786,000 $6,678,000 $7,464,000 10.5 1915. Mar. 4...................... May 1....................... .1 urie 23.................... Sept. 2..................... Nov. 10.................... Dec. 31.................... 766,350,000 774,550,000 794,940,000 640,859,000 670,195,000 680,957,000 630,516,000 642,200,000 638,372,000 527, 798,000 553,856,000 553,338,000 82.3 82.9 80.3 82.3 82.5 81.2 608,000 627,000 599,000 646,000 127,000 168,000 3,245,000 4,654,000 4, 773,000 2,880,000 2,049,000 2,887,000 3,853,000 5,281,000 5,372,000 3,526,000 2,176,000 3,055,000 18.0 11.f 11.1 705,576,000 728,365,000 723,071,000 759,894,000 800,209,000 803,279,000 567,036,000 587,185,000 590,604,000 597,371,000 621,491,000 612,720,000 80.4 80.6 81.6 78.6 77. 7 76.2 189,000 502,000 530,000 263,000 563,000 1,563,000 2,041,000 2,108,000 2,323,000 4,151,000 8,538,000 2,230,000 2,882,000 2,638,000 2,586,000 4,714,000 10,101,000 8. 5 17.4 20.1 10.1 11.9 15.5 1917. Mar. 5...................... 819,658,000 May 1....................... 856,440,000 June 20.................... 834,139,000 Sept. 11................... 877,549,000 Nov. 20.................... 1,137,208,000 626,192,000 637,270,000 727,275,000 647,542,000 664,215,000 76.4 73.7 75.2 73.8 58.5 1,080,000 1,261,000 17,108,000 14,080,000 23,101,000 5,132,000 5,843,000 9,738,000 6,771,000 6,427,000 6,212,000 7,104,000 26,846,000 20,851,000 29,528,000 17.7 17.7 63.6 67.5 78.4 Rate. Per ct. Per cent. is. a 5.8 5.5 1916. Mar. 7...................... May 1....................... June 30.................... Sept. 12................... Nov. 17.................... Dec. 27..................... RELATION 2,380, 000 OF LOANS AND DEPOSITS OF PHILADELPHIA CLEARING-HOUSE MEMBERS. The following figures, concerning members of the Philadelphia Clearing House Association, are given as a matter of interest, as the Philadelphia member banks contribute 42 per cent of the capital of the Federal Reserve Bank and carry balances with it amounting to 56 per cent of the total member bank deposits with the Federal Reserve Bank. 42 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. Philadelphia clearing-house members, 2.9/7. [000’s omitted.] Capital. stock. January... February.. March........ April.......... May........... June........... July........... August.... September October... November. December. $30,370 30,370 30,370 30,370 30,470 30,470 31,470 31,470 31,470 31,470 31,470 31,470 Loans, dis counts, and invest ments. $532,200 545,740 550,740 552,330 561,230 552,810 554,910 550,890 561,790 573,160 600,980 592,550 Deposits. Bank. Indi vidual. Total. $178,360 185,050 188,240 187,020 171,670 169,310 164,680 163,180 164,720 174,340 173,720 169,110 $478,480 482,790 474,620 490,130 486,140 470,230 469,600 466,260 476,310 495,050 492,400 472,070 $656,840 667,84c 662,860 677,150 657,810 639,540 634,280 629,440 641,030 669,390 666,120 641,180 Ratio of loans to de posits. 81.0 81.8 83.1 81.5 85.3 86.5 87.5 87.6 87.5 85.6 90.2 92.5 ACCEPTANCES UP TO 100 PER CENT. The following banks, all located in Philadelphia, have been given authority to accept up to 100 per cent of their capital and surplus, as provided by the Federal Reserve Act: Fourth Street National Bank. Girard National Bank, Philadelphia National Bank, Trades men’s National Bank, Market Street National Bank. There was approved on June 7, 1917, an act of the State legislature empowering State banks and trust companies to accept drafts and issue letters of credit, and it is expected that the acceptance business of the banks in the district will become an increasing item. Acceptance liabilities of member banks. Date of comptroller’s call— Amount Dec. 31, 1915_____________________________________________$2,809,000 Mar. 7, 1916____________________________________________ 5, 751, 000 May 1, 1916____________________________________________ 6,219,000 June 30, 1916___________________________________________ 5, 234, 000 Sept. 12, 1916___________________________________________ 5, 084, 000 Nov. 17, 1916___________________________________________ 8,640,000 Dec. 27, 1916___________________________________________ 8,309,000 Mar. 5, 1917____________________________________________ 8, 852, 000 May 1, 1917____________________________________________ 6,154,000 June 20, 1917___________________________________________ 8, 513, 000 Sept. 11, 1917___________________________________________ 9,732,000 Nov. 20, 1917___________________________________________ 7,522,000 BANKS CHANTED FIDUCIARY POWERS. This bank has received many applications from members for per mission to act as trustee, executor, etc. There is a conflict of opinion ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 43 as to whether or not national banks in the States comprising this district can legally act in fiduciary capacities without enabling legis lation, and we do not know which of the following institutions, whose applications have been approved, have actually undertaken to act in a fiduciary capacity. Banks of the district which hare been (/ranted special powers. Location. Delaware: Frederica........... Name of bank. Powers granted. First National Bank..................................... Trustee, executor, administrator, and regis trar of stocks and bonds. Do. Do. Seaford............... Laurel................. New Jersey: Atlantic City.. Do................ Cape May.......... Princeton.......... ........ do................................................................. Peoples National Bank............................... Belleville........... Blossburg.......... Belleville National Bank............................ Miners National Bank................................. Do. Atlantic City National Bank.................... Union National Bank.................................. Trustee, executor, and administrator. Merchants National Bank.......................... Registrar of stocks and bonds. First National Bank..................................... Trustee, executor, administrator, and regis trar of stocks and bonds. Trenton.............. ........ do................................................................. Do. Do................ Broad Street National Bank..................... Do. Pennsylvania: Annville............ Annville National Bank............................. Do. Dubois............... Deposit National Bank............................... Do................ DuBois National Bank............................... Ephrata............. Farmers National Bank.............................. Harrisburg........ Merchants National Bank.......................... Hazleton............ Huntingdon.. . Jenkintown.... Johnstown........ Hazleton National Bank............................. First National Bank..................................... Jenkintown National Bank....................... First National Bank..................................... Lansdale............ Lititz.................. Marietta............. Maytown........... Mountville........ Myerstown........ Nanticoke......... Nazareth............ Newville............ Patton................ Pen Argyl .... Philadelphia... Do................ ........ do................................................................. Farmers National Bank.............................. Exchange National Bank........................... Maytown National Bank............................ Mountville National Bank......................... Myerstown National Bank........................ First National Bank..................................... Nazareth National Bank............................ First National Bank..................................... ........ do................................................................. ........ do................................................................. Fourth Street National Bank................... Eighth National Bank................................ Do................ Do................ Do................ Philadelphia National Bank..................... Quaker C ity National Bank...................... Southwark National Bank........................ Reading............. Penn National Bank.................................... Scranton............ Third National Bank................................... Stroudsburg... First National Bank..................................... Trustee, executor, and administrator. Trustee, executor.administrator, and regis trar of stocks and bonds. Do. Do. Trustee, executor, and administrator. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Do. Trustee, executor, administrator. Trustee.executor, administrator, and registrar of stocks and bonds. Do. Do Do. Do. Do. Do. Do. Do. Do. Do. Do Registrar of stocks and bonds. Trustee, executor, administrator, and regis trar of stocks and bonds. Registrar of stocks and bonds. Do. Trustee, executor, administrator,and regis trar of stocks and bonds. Do. Registrar of stocks and bonds. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Tioga................... Grange National Bank................................ Topton............... National Bank of Topton........................... West Chester.. National Bank of Chester County........... Trustee^ executor' administrator, and registrar of stocks and bonds. Do. West Grove.... National Bank of West Grove.................. Do. Wilkes-Barre... Second National Bank................................ Williamsport... West Branch National Bank.................... Do. Do. York.................... Industrial National Bank of West York. 44 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. IX. State Bank Membership. The Legislature of Pennsylvania passed an act, approved July 17, 1917, authorizing any bank or trust company incorporated under the laws of the State to become a member of a Federal Reserve Bank, and in such event to be subject to all the provisions of the act of Congress known as the Federal Reserve Act, allowing any such bank or trust company to comply with the reserve requirements of such act in lieu of those established by the laws of the State, and permitting the commissioner of banking to accept the examinations and audits made pursuant to such act in lieu of those required by the laws of the State. The movement of State banking institutions into the Federal Reserve system began in August when the directors of the Miners’ Deposit Bank of Lykens, Pa., resolved to apply for admis sion. On October 16 the Girard Trust Co. of Philadelphia filed its application, which was approved by the Federal Reserve Board on November 5, and on that date the company become a member. Since then the following trust companies have been admitted: Philadel phia Trust Co., Philadelphia; Commercial Trust Co., Philadelphia; Pennsylvania Co., Philadelphia; Camden Safe Deposit & Trust Co., Camden, N. J.; Wilmington Trust Co., Wilmington, Del. This makes the number of State member banks 7. The banking institu tions that have been admitted have resources of $168,683,000. They have added $831,300 to the capital of this bank and $12,576,000 to its deposits. There are 285 banks and trust companies eligible for membership. Signs of interest in the matter of membership have been manifested throughout the district, and we believe it will not be very long be fore most of the State institutions have made application for admis sion. Membership in the Federal Reserve system is looked upon as evidence of the strength of a banking institution, and ultimately we have every confidence that all institutions will be member banks. As shown by Hie reports of the loan and transit operations there has been a marked increase in the use of the facilities of the Federal Reserve Bank by the member banks, and we hear on all sides ex pressions of deepest satisfaction with the system. The Liberty loan transactions brought the bank into direct contact with all the State institutions of the district and have done much to establish cordial relations with them. X. Fiscal Agency oe the United States. The most important function performed bv the bank during the year was its part in the placing of the Liberty loans and United States certificates of indebtedness. ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 45 Promptly following the receipt on May 3 of word from the Secre tary of the Treasury that he had decided to use the Federal Reserve Banks as the central agencies in their districts in organizing the campaign for placing the bonds and certificates of indebtedness., receiving subscriptions, handling payments, delivering bonds, etc.,, and that he had communicated with all banks in the United States asking them to cooperate with the Federal Reserve Banks, a confer ence was held with the representatives of all the banking interests and the owners or managers of the newspapers of Philadelphia to consider plans for conducting the work. As a result of this confer ence, the governor of the Federal Reserve Bank was asked to appoint a general committee to have charge of the campaign, which com mittee was duly organized. Other committees were formed to con duct particular branches of the work. Committees of bankers and those connected with other lines of business were organized in nearly every local community, and the work of placing the bonds was undertaken with the utmost vigor. Depositors of banks were com municated with—the public interest was developed and stimulated through addresses at public meetings, at the theaters and other places of amusement, at meetings of employees in shops and stores. Scholars and teachers in the schools were organized for the work, newspaper advertising and posters were freely used. Facilities were furnished by the banks which made it possible to meet subscriptions by weekly payments, for the safe keeping of the bonds without charge, and for making loans on bonds at the same rate of interest as that borne by the bonds. In both campaigns practically the same organization was used, it being, however, more developed and enlarged and made more com prehensive for the second campaign. The conduct of the campaigns was actively supervised by com mittees, upon the chairmen of which fell the greater burden of the work. These men and their associates on these committees were untiring in their work, all their time was placed at the disposal of the com mittees, and in the successful conducting of the campaigns they rendered services which could not have been bought and which were of inestimable value to their country. Especial acknowledgment should be made of the services of the investment bankers, who practically suspended their private business to undertake the sale of the Liberty loans. They placed at the service of the committee a large and efficient force of bond salesmen whose training and experience did much toward the success of the cam paign. 46 ANNUAL REPORT OP FEDERAL RESERVE BANK OF PHILADELPHIA. The report of the Liberty loan campaign committee gives the names of over 4,000 persons serving as chairmen of the various general and local committees, cooperating with whom were more than 25,000 people. It is a matter of deep regret that there is not sufficient space in this report to permit the publication of all their names. Many banking institutions throughout the district availed them selves of the opportunity to become depositaries of the proceeds of Liberty bonds, 32 banks, 82 trust companies, and 200 national banks being appointed such depositaries. To pass upon and care for the securities for these deposits, securities committees composed of three bank officers were appointed in 15 cities and banking institutions were appointed as custodians of securities. In Philadelphia commit tees of bank officers nominated by the Philadelphia Clearing House Association acted as the securities committees and custodians of se curities. The securities sent to the Philadelphia custodians were deposited with the clearing house. Securities to the value of nearly $200,000,000 were handled by these committees and custodians. This service was all voluntary, without compensation, and involved a considerable sacrifice of time, but it was of inestimable value in facilitating the settlements for Liberty loan bonds. The amount of Liberty bonds subscribed for and allotted in this district and the number of subscribers were as follows: Amount sub scribed. First Liberty loan...................................................................... Second Liberty loan.................................................................. $232,309,250 380.350.250 Amount allotted. $165,147,600 280,184,100 Number of subscribers. 476,000 623,000 Of the second Liberty loan $8,167,000 was subscribed for by the scholars and teachers of the public and parochial schools of Phil adelphia. The allotments of issues of Treasury certificates of indebtedness to this bank were practically all taken by the banking institutions of the district. At the close of subscription, the bank sometimes had left a moderate amount of certificates, but in all but one instance they were finally absorbed by belated subscriptions. The subscrip tions for the certificates made through this bank were as follows: ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 47 United States certificates of indebtedness. Amount allotted to subscribers. Number of sub scribers in each group. Total amounts allotted to each group. Issued Apr. 25, due June 30; 3 per cent. $25,000 and less..................... Over $25,000 to $50,000.... Over $50,000 to $100,000... Over $100,000 to $250,000.. Over $250,000 to $500,000.. Over $500,000 to $1,000,000 Issued Apr. 27, due June 30: 3 per cent. $25,000 and less..................... Over $25,000 to $50,000.... Over $50,000 to $100,000... Over $100,000 to $250,000.. Over $250,000 to $.500,000.. Over $500,000 to $1,000,000 Issued May 4, due June 30; 3 per cent. $25,000 aud less..................... Over $25,000 to $50,000.... Over $50,000 to $100,000... Over $100,000 to $250,000.. Over $250,000 to $500,(XX).. Over $500,(X)0 to $1,000,(XX) 24 Issued May 10, due July 17; 3J per cent. $25,000 and less.................... Over $25,000 to $50,000.... Over $50,000 to $100,(XX)... Over $100,000 to $250,000.. Over $250,0(X) to $500,000.. Over $500,000 to $1,000,000 94 35 28 14 8 5 Issued May 25, due July 30; 3J per cent. $25,000 and less..................... Over $25,000 to $50,000.... Over $50,000 to $100,000... Over $100,000 to $250,000.. Over $250,(XX) to $.500,(XX).. Over $500,000 to $1,000,000 125 24 29 19 7 3 888 000 610.000 1.486,000 2,595. (XX) 1,921,000 1,500.000 207 9,000,000 Issued June 8, due July 30; 3J per cent. $25,000 and less..................... Over $25,000 to $50,000.... Over $50,000 to $100,000... Over $100,000 to $250,000.. Over $250,000 to $500,000.. Over $.500,000 to $1,000,(XX). 91 35 28 IS 10 3 767, (XX) 939,000 1,492,000 2.315,000 2.741,000 2,146,(XX) 185 10,400,000 Issued Aug. 9, due Nov. 15; 3J per cent. $25,000 and less..................... Over $25,0(X) to $50,000....... Over $50,000 to $100,(XXI.... Over $100,000 to $250,000... Over $250,000 to $500,000... Over $500,000 to $1,000,000. 25 31 8 6 687,000 735,000 1,330,000 3,993,000 2,155,000 3,900,000 181 12,800,000 43 30 24 16 9 8 $530.000 760.(XX, 1.250.000 1.760,000 2,700.000 5.000,000 130 12.000,000 37 12 5 1 345. 000 305.000 250,000 100, 000 1.000.000 4 2 5 195, (XX) 105 000 100.000 600.(XX) 1,000,000 682.000 S25. (XX) 1,491,000 1.452 000 2 050,000 3,500,000 10,000,000 Issued Aug. 28, due Nov. 30; 3J per cent. $25,000 and less..................... Over $25,000 to $50.000....... Over $50,000 to $100,000.... Over $100,000 to $250,000... Over $250,000 to $500,(XX)... Over $500,000 to $1,000,000. 76 ! 37 33 i 14 8 2 170 703,000 975,000 1,970,000 1,777,000 2,655,000 1,802,000 9,882,000 48 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. United States certificates of indebtedness—Continued. Amount allotted to subscribers. Issued Sept. 17, due Dec. 15; 3i per cent. Number of sub scribers in each group. $25,000 and less..................... Over $25,000 to $50,000___ Over $50,000 to $100.000... Over $100,000 to $250,000... Over $250,000 to $500,000... Over $500,000 to $1,000,000. 71 22 20 10 6 5 $600,000 555,000 1,012,000 1,350,000 1,700,000 3,000,000 134 8,217.000 633,000 Subscribed to by Federal Reserve Bank. Issued Sept. 26, due Dec. 15; 4 per cent. $25,000 and less.................... Over $25,000 to $50,000___ Over $50,000 to $100,000... Over $100,000 to $250,000.. Over $250,000 to $500,000... Over $500,000 to $1,000,000. Issued Oct. 18, due Nov. 22; 4 per cent. $25,000 and less..................... Over $25,000 to $50,000___ Over $50,000 to $100,000.... Over $100,000 to $250,000... Over $250,000 to $500,000... Over $500,000 to $1,000,000. Issued Oct. 24, due Dec. 15; 4 per cent. $25,000 and less..................... Over $25,000 to $50,000....... Over $50,000 to $100,000.... Over $100,000 to $250,000... Over $250,000 to $500,000... Over $500,000 to $1,000,000. Issued Nov. 30, due June 25, 1918, 4 per cent. $25,000 and less...................... Over $25,000 to $50,000.... Over $50,000 to $100,000... Over $100,000 to $250,000.. Over $250,000 to $500,000.. Over $500,000 to $1,000,000. XI. Resume of Total amounts allotted to each group. 134 8,850,000 129 50 29 30 6 11 1,189, COO 1,271,000 1,554, COO 3,841,000 1,850,000 10,295,000 255 20,000,000 181 75 45 28 6 14 1,806,000 2,047,000 2,355,000 3,410,000 1,550,000 12,832,0C0 349 24,000,000 31 21 13 11 7 8 361,000 628,000 660,000 1,310,000 1,800,000 8,841,000 91 13,600,000 24 2 8 11 1 7 216,000 87,000 420,000 1,488,000 400,000 8,881,000 53 11,492,000 Business Conditions. January.—The year commenced with an excellent undertone to general business conditions. However, the possibility of peace resulting from the exchange of notes caused hesitation in all lines of business, and developed a spirit of caution on the part of buyers in contracting for goods in excess of immediate wants. Commercial failures during 1916 were fewer than the preceding year and the liabilities of the companies involved were less in amount. Of the concerns failing 94 per cent were conducting business with less than $5,000 capital. The year 1916 was one of comparatively low crop production, but the prices obtained for most of the crops were extraordinarily high. The value of the products of farms in the district shows a gain of about 44 per cent for 1916 over 1915. Rates for money were easier than the preceding month. Call money de clined from 5 per cent to 3| per cent. ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 49 February.—The difficulties of the railroads and steamship com panies in moving goods promptly, the scarcity and inefficiency of labor, and the increased cost and inadequate supply of coal and other materials curtailed production somewhat. Activity continued in practically all industrial and other lines of business, and no diffi culty was experienced in disposing of products. In some localities there was much conservatism in the placing of new orders. Quite a number of important industrial concerns enlarged their plants. Collections were generally satisfactory. There was a general feeling of confidence and optimism as to the future, but on account of the extraordinary conditions and the uncertainty of the foreign situa tion, business was conducted in a cautious and conservative way. Locomotive business was reported as unprecedentedly favorable. Money rates remained easy. The announcement of Germany’s new submarine policy resulted in violent declines in the prices of securi ties. March.—While less active than the preceding months, the volume of business transacted in most lines continued on a large scale. Stim ulated by the United -States Government’s inquiries and orders, prices of many articles were further advanced. Because of the un certain foreign situation, however, commitments were undertaken with caution. In response to a questionaire to which 362 business concerns replied, 67 per cent reported business “ excellent or good,” 13 per cent “ fair,” and 20 per cent “ uncertain or bad.” Two hundred and thirty-seven concerns reported the outlook to be “ excellent or good,” and 118 “ fair, uncertain, or bad.” An average increase dur ing the past year of 26 per cent in wages and 49 per cent in cost of materials was reported. Money rates were easy. April.—The entrance of the United States into the war caused advances in prices, greater demand for goods, and greater scarcity in materials in many lines of trade. Manufacturing plants through out the district were running as fully as the supply of labor and materials would permit. The problem of deliveries in many cases was very annoying because of the limitation of output and trouble some transportation conditions. The labor situation became very acute. The condition of the winter wheat crop was reported 15 per cent below normal. There arose a patriotic desire on the part of the people in agricultural sections to do their full duty toward produc ing the maximum amount of foodstuffs, but on account of the high prices and scarcity of fertilizer, the high price of seed, and the scarcity and high wages of labor, it appeared that the acreage planted in food crops could not be increased materially. The attempt was made to have people put forth extra efforts in planting vegetable gardens for their own account. Retail trade during March was reported as the largest in history, but after Easter trade fell off very 50 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. much. It was felt that this was largely due to the practicing of economy on the part of the public which was so earnestly recom mended. The prospect of large Government borrowings caused hesi tation in the investment of funds. Sales of securities fell off and prices declined. May.—Manufacturing plants operated as near capacity as possible. A slowing up became noticeable, however, in retail trade and among the jobbers of wearing apparel of all kinds, due to extremely high prices, unseasonable weather, the economy campaign, and the fact that most consumers were pretty well supplied. Some of the de partment stores were compelled to reduce their staffs of employees because of curtailed sales. The potato acreage in Pennsylvania was estimated at 108 per cent in comparison with last year. Manufac turers of goods not essential to war, such as carpets, lace curtains, and tapestries, did not have enough orders to warrant more than 50 per cent operation. Surplus reserves of the Philadelphia banks de creased $20,000,000. Money rates stiffened considerably, call money advancing from 34 to 4 per cent. The prevailing rate for paper was 5 per cent. June.—There was a noticeable improvement in business conditions in those lines which are especially dependent upon weather condi tions, higher temperatures having stimulated demand for many summer specialities and business in seasonable merchandise was well up to normal in volume. The Philadelphia department stores re ported considerable improvement and expected business to continue good. The automobile pleasure car business was reported as not very good. Cotton and wool prices were very high. A further de crease in the surplus reserves of the Philadelphia banks to the lowest point since December, 1916, forced up call money to 5 per cent. Com mercial paper ruled at 54 per cent. The rediscount feature of the Federal Reserve Bank was availed of to a very considerable extent. Financial institutions were occupied with the flotation of the Liberty Loan. July.—There was no change, generally speaking, in the great busi ness activity prevailing in this section. In nearly every line, the manufacturer, jobber and retailer report the volume of business large and results satisfactory, although there was no cessation of com plaints of the difficulty in obtaining workers, the scarcity of fuel, and unsatisfactory transportation conditions. Uncertainty due to possible legislation as to price control adversely affected some lines. Rates for money continued firm, call money and paper being quoted at 5 per cent. Due to the high cost of materials and high wages, very much more money was required to conduct business than formerly, and customers borrowed freely from their banks and lines of credit were used to the full. ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 51 August.—There was no important development in the business situation. A strong tendency toward cautiousness existed on the part of buyers, owing to the uncertainty of future prices and the high cost and scarcity of many kinds of goods. There was a steady readjustment to war conditions, but business men generally expected an active fall and winter business. Great difficulty was reported in all lines in securing sufficient skilled and unskilled labor and office help, which, in some cases, forced production below normal. The high cost of building materials and labor resulted in the cessation of building for investment. Manufacturing druggists and chemists were taxed to the limit taking care of emergency orders required by the European countries, the United States Government and the Eed Cross. Member banks continued to avail themselves quite freely of the rediscount feature of the Federal Reserve Bank. Financial insti tutions were well loaned up, and the money market remained on a firm 5 per cent business. There was a good commercial demand for funds. Public interest in the security markets was at a low ebb. September.—Plants throughout the district continued busy and manufacturers generally expected a very large volume of business owing to the tremendous quantities of business needed by the Govern ment for carrying on the war. Retail distribution of fall merchan dise showed a very satisfactory increase in activity, demand being stimulated by cool weather and the return of many people to the city, but there was some complaint that the high prices were restricting the movement in certain lines. Wholesale orders were placed in considerable amounts, especially for staples in dry goods, furnish ings, notions, underwear, etc. All lines were prevented from work ing to capacity by the uncertain deliveries, scarcity of raw materials, and the shortage of labor. Money rates advanced, best names selling at 5| per cent. October.—The outstanding feature of financial and business con ditions was the concerted effort of practically all the financial insti tutions and a great many industrial concerns to make the second Liberty loan an unqualified success. General business conditions con tinued to be prosperous, and retail trade retained its activity. The predominating influence of the war was felt in nearly all lines of industry, and Government orders took precedence over private busi ness. As a result, the normal demand was somewhat obscured, and a marked conservation in placing orders for deliveries next spring was noticeable. The scarcity of cars resulted in very unsatisfactory deliveries of coal. Government orders for coal produced a shortage in the supply available for the customary needs of domestic and com mercial consumers. The production of iron and steel mills was seriously curtailed by the scarcity of fuel. The sugar shortage, caused by the fact that much of the Cuban crop was purchased by the 52 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. allied Governments, was reported to be purely temporary. Another cause of the scarcity was that consumers were buying far ahead of their needs, thereby reducing the already small supply in the hands of the dealers, but relief was in sight from the new Louisiana and Hawaiian crops, also western beet sugar. Bank clearings reached a high record figure—$1,678,000,000 for the district. Rates for com mercial paper were firm at to 6 per cent. A continuation of liqui dation of high-grade investment securities resulted in a further de cline in prices. November.—Manufacturing industries were running at high pres sure, but were somewhat restrained by the very considerable diffi culties encountered in securing supplies and sufficient labor. The large ball-bearing plants in the district were seriously affected by the falling off in the production of automobiles, for which the largest part of the output of ball bearings was used. Cotton prices reached a level hitherto unattained for a long period of years. Retail trade conditions generally appeared to be stationary. Collections were good, except in the case of a few industries which were affected ad versely by war conditions and the working out of the new Govern ment policies. Building operations were curtailed owing to the high cost and difficulty in obtaining labor and materials and the difficulty experienced by builders in securing advances of money from financial institutions. Exports from the port of Philadel phia reached $62,724,000, a new record, the increase being largely due to heavy shipments of powder. Opinion throughout the district was unanimous in agreeing that the railroads should receive an ad vance in freight rates. Rates for paper continued firm at 5| to 6 per cent. There was an average demand for loans in most quarters, but in some parts of the district borrowers used full lines of credit. December.—The industries engaged in producing supplies for war purposes were running at as near capacity as possible. Other indus tries, however, felt to a considerable extent the circumstances which tended to cut down their output; the demand for their product de creased, and they were unable to meet the wages which the munition factories offered. Christmas trade was rather disappointing and not up to normal. Many merchants did not cany as large stocks as was, their custom in previous years, owing to their unwillingness to put in large stocks of goods at the prevailing high prices and because of their inability in many instances to secure goods from the manufac turers. The coal situation was considerably aggravated by the ap pearance of cold weather earlier than usual. Some manufacturing plants were forced to operate on a margin of not more than one or two days’ supply of coal. Building operations practically ceased, except where absolutely necessary. The total of the Christmas sav ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 53 ings funds carried by the banks in the district amounted to upward of $10,000,000, which was about $500,000 ahead of 1916. The number of depositors was approximately 350,000. Payments on account of Liberty loan subscriptions caused a shrinkage in loanable funds, and money rates were firm. The call-money late was advanced to 6 per cent and the rate for paper to 5| per cent. BANK CLEARINGS. The growth of business in the district during the year is‘shown in the following table of bank clearings, which are the largest on record. Of course the high prices of goods constituted a prominent cause for the big increase. Clearings in the Third District. 1917. January... February.. March........ April.......... May............ June........... July............ August___ September. October.... November. December.. Total for year. Philadelphia. District outside of Philadelphia. Per cent increase Total for district. compared with 1916. 81,397,691,175 1,251,517,407 1,467,016,516 1,410,313,000 1,477,700,000 1,503,806,000 1,331,836,519 1,368,485,000 1,337,772,768 1,569,400,000 1,532,682,000 1,549,512,824 .$97,000,832 83,891,961 97,276,863 101,560,000 99,545,000 99,932,000 99,272,488 92,576,000 91,846,400 109,360,000 99,532,000 102,350,996 $1,494,692,007 1,335,409,368 1,564,293,379 1,511,873,000 1,577,245,000 1,603,738,000 1,431,109,007 1,461,061,000 1,429,619,168 1,678,760,000 1,632,214,000 1,651,863,820 36 29 43 38 41 40 29 36 23 25 20 14 17,197,733,209 1,174,144,540 18,371,877,749 26 54 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. • 1915-1917 BANK CLEARIMGS COMPARED EOR PHILADELPHIA FEDERAL RESERVE DISTRICT jan feb|mar|apr|may june|july|aug 5EPt|oct|noy!dec 3 2,000,000.000 1,800,000,000 1,600,000,000 \l9 17/ z 1,400,000,000 1 1 1 1 f z n 1,200,000,000 “ ** / i 7 / — / / 1 1.000,000,000 / z / / / ! 1 800,000,000 £ s \\ sl9 s' 600,000,000 400,000,000 200,000,000 Chart No. 12. * X s' z t ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 55 COMMERCIAL FAILURES. The year 1917 showed a continued falling off in the number of commercial failures, and during the month of September there were only 40, the smallest number for any month we reported. Of these, 37 were concerns doing business with a capital of $5,000 or less. The following table has been compiled from Bradstreet’s report of commercial failures in the district: BradstreeVs report of commercial failures in the Third Federal Reserve District, classified as to capital employed. $5,000 and less. $20,000 to $50,000. $50,000 to $100,000. $100,000 to $500,000. 1917 1917 1917 1916 1917 1 1 1 1 1 1 1 75 51 61 56 61 45 48 49 40 65 60 63 96 103 101 67 48 50 57 65 73 87 86 93 2 5 674 926 $5,000 to $20,000. 1917 1916 1917 1916 73 48 56 90 2 2 3 1 2 4 3 2 1 4 4 1 4 2 2 3 2 5 2 1 1 January...................................... February................................... March./.................................... April........................................... May............................................. June............................................ July............................................. August....................................... September................................ October...................................... November................................. December.................................. 58 40 44 46 37 58 58 57 96 64 44 46 55 60 69 84 78 88 Total............................... 629 869 1916 2 1 1 1 1 1916 Total. 2 1 1 3 7 1 2 2 2 2 1 1 1 2 1 1 27 39 14 9 2 4 1 1916 IMPORTS AND EXPORTS. Exports from the port of Philadelphia during the year 1917 were the largest on record, and in October, a new high mark of $62,724,000 was reached, due chiefly to heavy shipments of powder. Besides munitions of war, other important items exported in large quanti ties were grain and petroleum. Naturally, in view of the foreign situation, imports declined in comparison with the previous year. Figures prepared by the Commissioners of Navigation follow: Business through the port of Philadelphia. Exports. 1917 Imports. 1916 1917 1916 January.... February.. March.......... April............ May.............. June............. July.............. August........ September. October.... November. December.. $43,634,046 57,652,322 38,879,748 39,889,979 42,507,832 41,284,111 21,451,383 57,381,188 24,093,366 62,724,000 32,309,000 40,158,000 $11,738,378 9,801,012 15,567,739 34,688,268 24,830,464 24,286,752 27,890,704 37,013,839 44,377,332 25,217,112 41,467,209 25,165,429 $9,093,450 9,041,989 7,488,047 11,103,862 11,424,218 14,304,452 8,953,507 9,247,078 8,276,928 4,486,000 4,106,000 4,446,000 $7,387,295 9,176,185 9,625,334 11,336,364 12,854,821 13,552,856 10,740,537 8,221,037 6,806,542 7,602,789 6,946,608 6,712,340 Total 501,964,975 321,044,815 101,971,531 111,407,851 56 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. FREIGHT CAR MOVEMENT. We give below tables showing the loaded freight car movement on the Pennsylvania, Lehigh Valley, and Delaware, Lackawanna & Western Railroads during the months of 1917 compared with each month of the preceding year. Pennsylvania R. R. loaded freight ear movements at Lewiston Junction. Bituminous coal, eastbound. January.... February.. March......... April........... May............... June............. July............. August.... September. October.... November. December.. Total Coke, eastbound. Miscellaneous, eastbound. Miscellaneous, westbound. Total. 1917 1916 1917 1916 1917 1916 1917 1916 1917 41,132 35,216 45,843 41,192 45,785 42,824 41,367 40,442 38,215 38,009 40,031 32,193 54,046 43,711 50,548 44,691 41,527 39,885 42,184 47,027 42,752 43,051 40,088 38,184 5,563 4,290 5,751 5,552 5,643 6,034 6,366 5,796 5,596 5,503 5,404 4,449 4,812 5,242 6,277 4,999 5,022 4,701 4,608 4,593 4,668 5,216 5,433 5,088 33,820 31,024 38,833 39,103 38,085 34,382 33,057 30,618 31,766 30,211 26,917 19,300 36,211 33,113 38,211 43,258 39,304 32,922 32,113 35,059 35,537 37,141 37,629 31,670 21,047 18,733 24,629 24,375 26,201 26,257 25,479 24,775 22,821 20,834 17,641 9,958 20,382 19,565 23,040 24,274 23,648 25,620 28,170 28,452 28,318 27,019 23,857 20,829 101,562 89,263 115,056 110,222 115,714 109,497 106,269 101,631 98,398 94,557 89,993 65,900 482,249 527,694 65,947 1916 115,451 101,631 118,076 117,222 109,501 103,128 107,075 115,131 111,275 112,427 107,007 95,771 60,659 387,116 432,168 262,750 293,174 1,198,062 1,313,695 Lehigh Valley R. R. loaded freight car movements. 1917 January......................................... February...................................... March............................................ April.............................................. May................................................ June................................................ July................................................ 289,219 244,925 324,971 316,078 382,768 356,960 334,832 1917 1916 August.......................................... September.................................... October......................................... November.................................... December..................................... 318,009 327,812 344,041 336,766 248,001 335,263 324,700 363,008 340,832 300,992 Total.................................. 3,824,382 3,854,386 1916 297,819 266,846 325,845 317,627 345,947 313,584 321,923 Delaware, Lackawanna & Western R. R. freight car mileage made on rails in the State of New Jersey. January........................................ February...................................... March............................................ April.............................................. May................................................ June............................................... July................................................ 1917 1916 2,694,942 2,241,833 2,964,152 2,779,917 3,190,253 3,069,278 2,626,794 2,894,378 2,529,818 2,798,402 2,704,331 2,713,220 2,651,817 2,684,534 August........................................... September.................................... October......................................... November.................................... December..................................... 1917 1916 2,539,253 2,391,001 2,685,839 2,498,603 2,281,811 2,660,564 2,883,864 2,883,864 2,805,530 2,607,211 Total.................................. 31,971,678 32,817,533 STOCK-EXCHANGE TRANSACTIONS. The decline in prices of securities, which reached their high point in November 1916, together with the Government war issues, and the consequent desire of investors to have their money in liquid form,, in order to purchase Government obligations, resulted in a marked ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. 57 contraction in transactions on the Philadelphia Stock Exchange. There was little public interest in the market throughout the year. In the month of November, 1916, 1,035,085 shares were traded in, whereas in November of 1917, the number was only 284,170. The bond business, however, was reasonably satisfactory. Transactions on the Philadelphia Stock Exchange are shown in the following table: Philadelphia Stock Exchange transactions. Number of shares. 1917 Cost of bonds. 1916 1917 1916 January.... February.. March.......... April............ May.............. June............. July.............. August........ September. October.... November. December.. 404,319 357,474 382,839 278,141 369,140 187,464 393,542 219,187 256,558 327,698 284,170 260,156 388,194 632,649 293,431 235,001 294,750 281,670 169,023 230,882 559,062 508,992 1,035,085 753,417 $2,396,150 2,007,700 1,536,635 2,065,464 1,185,400 796,350 1,657,250 1,269,970 2,054,850 2,507,100 987,300 1,249,250 $2,528,130 1,932,970 1,865,300 1,541.600 1,572,550 1,498,395 1,155,450 1,402,150 1,180,776 1,723,900 1,779,110 1,323,130 Total. 3,820,688 • 5,382,156 19,713,419 19,503,461 BUILDING OPERATIONS. Building operations decreased considerably from the mark reached in 1916. The high cost of labor and materials and inability of build ers to secure advances from financial institutions are given as the reasons. Figures of building operations in Philadelphia given be low are indicative of general building conditions throughout the district. The bulk of the depreciation was due to the falling off in the construction of two-story houses, which amounted to $11,438,355. Building operations in Philadelphia. 1 Number of operations. 1917 1916 Estimated cost. 1917 1916 anuary.... February.. March...... April............ May.............. June............. July.............. August........ September. October.... November. December.. 613 815 1,147 1,337 971 763 592 666 578 748 461 270 736 1,086 1,606 1,915 1,524 1,709 1,040 1,247 1,153 1,337 1,181 1,079 $2,144,630 4,042,115 3,470,625 5,009,740 3,558,355 2,328,755 5,195,365 1,554,115 2,252,765 2,030,475 1,629,425 740,020 $1,859,090 2,437,750 4,590,630 6,227,780 4,791,255 5,147,115 3,101,685 4,472,120 3,301,310 4,055,045 4,451,925 5,460,865 Total. 8,961 15,613 33,956,385 49,896,520 J 58 ANNUAL REPORT OF FEDERAL RESERVE BANK OF PHILADELPHIA. POSTAL BUSINESS. Monthly postal receipts at the Philadelphia post office exceeded $1,000,000 for the first time in the month of November, when the figures reached $1,077,115. The increase shown is due, of course, to a large extent, to the higher postage rates which became effective about that time. Comparative statement of the postal and money-order business of the Phila delphia. post office. Money-order business. Postal business. 1917 1916 1917 1916 January.... February.. March......... April........... May............. June............ July............. August.... September. October.... November. December.. $887,803 763,553 911,439 845.997 843.591 785. 701 703,971 734,499 817,806 973.469 1,077,115 1,160,298 $795,730 768,419 848,540 780.454 816,427 753,425 659,289 693,636 750.615 830.311 826,095 968,010 $2,101,685 1,940,608 2,393.709 2.049,152 2,082,896 2,115,971 2,062,602 2,206,179 2,225,889 2,507,410 2,401,672 2,636,275 $1,764,669 1,773,654 2.005,457 1, 840,750 1,868,081 1,859,586 1,759,991 1,864,638 1.832,810 1,970,602 1,985 087 2,287,716 Total 10.505.242 9,490,951 26,724.048 22,813,041 CROPS, COLD STORAGE HOLDINGS, TOBACCO. The farmers in the district harvested good crops, which were in excellent condition for the most part. Farmers were, however, harrassed by inability to secure farm labor, and in many instances were forced to aid each other. Some crops had to be sacrificed, as the farmers were unable to harvest them. The new wheat crop appears to have a good start, but the acreage planted is about the same as last year. Cold storage plants in the district reported an increase of 29 per cent in the holdings of eggs compared with the previous year, 19 per cent in butter, and 53 per cent in cheese. Holdings of meat, however, declined from 10 to 15 per cent on the average. The to bacco fields of Pennsylvania are estimated to have produced over 58,000,000 pounds of tobacco during 1917, according to the Depart ment of Agriculture. This is an increase of approximately 9,000,000 pounds over the 1916 crop. Prices paid averaged as high as 25 to 30 cents a pound. o
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