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FEDERAL RESERVE
BULLETIN




ISSUED BY THE

FEDERAL RESERVE BOARD
AT WASHINGTON

APRIL, 1919

WASHINGTON
GOVERNMENT PRINTING OFFICE
1919

FEDERAL RESERVE BOARD.
EX OFFICIO MEMBEES.
CABTEB GLASS,

Secretary of the Treasury, Chairman.
JOHN SKELTON WILLIAMS,

Comptroller of the Currency.

W. P. G. HARDING, Governor.
ALBERT STRAUSS, Vice Governor.
ADOLPH 0. MILLEB.
CHABLES S. HAMLIN.

J. A. BBODEEICK, Secretary.

GEOBGE L. HARBISON, General Counsel.

W. T. CHAPMAN, Assistant Secretary.

H. PABKEB WILLIS,

W. M. IMLAY, Fiscal Agent.
M. JAGOBSON, Statistician.




Director, Division of Analysis and Research.
F. I. KENT,

Director, Division of Foreign Exchange.




SUBSCRIPTION PRICE OF BULLETIN.
The Federal Reserve Bulletin is distributed without charge
to member banks of the system and to the officers and directors
of Federal Reserve Banks. In sending the Bulletin to others the
Board feels that a subscription should be required. It has
accordingly fixed a subscription price of $2 per annum. Single
copies will be sold at 20 cents. Foreign postage should be added
when it will be required. Remittances should be made to the
Federal Reserve Board. Member banks desiring to have the
Bulletin supplied to their officers and directors'may have it sent
to not less than ten names at a subscription price of $1 per annum.
No complete sets of the Bulletin for 1915, 1916, or 1917
are available.

TABLE OF CONTENTS.
Review of the month
Business and financial conditions during March
Bank credits in war (from London Economist)
Condition of Federal Reserve Banks covering period during floating of fourth Liberty loan
Liquidating the war paper of member banks
Extension of conversion privilege to first Liberty loan
Indexes of business conditions
Increase in the production of raw materials. 1913-1918
War operations of the Bank of France
Law renewing the charter of the Bank of France
Statement of organization and purpose of new Industrial Board of the Department of Commerce
Practice of handling bills of exchange in foreign countries
Banks granted authority to accept up to 100 per cent of capital and surplus
Foreign branches of national banks
State banks and trust companies admitted to system during the month
Charters -issued to national banks during the month
Commercial failures reported
Fiduciary powers granted to national banks
Rulings of the Federal Reserve Board
'.
Law Department
Bank transactions during February and March
Index of wholesale prices
Discount and interest rates prevailing in various cities
.-•
Physical volume of trade
Number of member banks in system, number of members discounting, and average discounts held by each
Federal Reserve Bank, 1917-1919
Chart showing
Discount and open market operations of the Federal Reserve Banks
Resources and liabilities of the Federal Reserve Banks
Federal Reserve note account oil the Federal Reserve Banks and agents
Member bank condition statement
Imports and exports of gold and silver
Estimated stock of money in the United States
Discount rates in effect. -.
.Operation of the Federal Reserve clearing system
Loans and discounts of State bank members




IV

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323
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336
337
339
341
345
357
357
358
358
359
359
361
363
369
372
376
379
386
387
388
393
397
399
403
404
404
405
406

FEDERAL RESERVE BULLETIN
VOL. 5

APRIL i, 1919.

No. 4

mature on May 20, 1923. Interest will be
REVIEW OF THE MONTH.
The publication of the current issue of the payable on December 15, 1919, and thereafter
semiannually on June 15 and December 15,
FEDERAL RESERVE BULLETIN
and at maturity. All or any of the notes may
has been
fifSTLTbert^loanf
deferred for some days
be redeemed before maturity at the option of
in order to include in it the offithe United States on June 15 or December 15,
cial statement of the Secretary7 of the Treasury,
1922, at par and accrued interest.
concerning the fifth, or Victory Liberty loan.
"In fixing the terms of the issue, the TreasThe exact terms and conditions under which
ury has been guided largely by the desire to
the new loan is to be offered were made public
by the Secretary of the Treasury in a statement devise a security which will not only prove
attractive to the people of the country in the
issued on April 13 in the following language:
first instance, but the terms of which should
"The Victory Liberty loan, which will be
offered for popular subscription on April 21, insure a good market for the notes after the
will take the form of 4 | per cent three-four campaign is over and identical prices for the
j^ear convertible gold notes of the United two series, and should not affect injuriously the
States, exempt from State and local taxes, market for the existing bonds of the Liberty
except estate and inheritance taxes, and from loans.
1
' This will be the las t Liberty loan. Although,,
normal Federal income taxes. The notes will
be convertible, at the option of the holder, as the remaining war bills are presented, furthroughout their life into 3f per cent three- ther borrowing must be done, I anticipate that
four year convertible gold notes of the United the requirements of the Government in excess
States, exempt from all Federal, State, and of the amount of taxes and other income can,
local taxes, except estate and inheritance in view of the decreasing scale of expenditure,
taxes. In like manner the 3f per cent notes be readily financed by the issue of Treasury
will be convertible into the 4f per cent notes. certificates from time to time as heretofore,
"The amount of the issue will be$4,500,- which may be ultimately refunded by the issue
000,000, which, with the deferred installments of notes or bonds without the aid of another
of income and profits taxes payable, in respect great popular campaign, such as has characto last year's income and profits, during the terized the Liberty loans.
" I am sure that the people of America will
period covered by the maturity dates of
subscribe to this Victory loan in the same
Treasury certificates of indebtedness now outstanding, will fully provide for the retirement spirit of patriotism which they have shown in
of such certificates. The issue will be limited the past to the end that the notes may be as
to $4,500,000,000, except as it may be neces- widely distributed as possible, and that our
sary to increase or decrease the amount to banking institutions may be left free to supply
facilitate allotment. Oversubscriptions will be the credit necessary for the purpose of industry
rejected and allotments made on a graduated and commerce and the full employment of
scale similar in its general plan to that adopted labor. Let the world see that the patriots of
in connection with the first Liberty loan. America, out of their boundless resources, and
Allotment will be made in full on subscrip- with the same enthusiasm and devotion to
country with which they prosecuted the war
tions up to and including $10,000.
"The notes of both series will be dated and to a victorious conclusion, are determined to
bearlinterest from May 20, 1919, and will finish the job."




303

304

FEDERAL RESERVE BULLETIN.

APRIL 1,

1919.

So clearly are the terms and conditions of the the individual buyer than has been true of any
new issue set forth in the state- of the preceding Liberty loans.
ent
The financial situation which has called
J u s t <l u o t e d t h a t com"
ment would seem to be called
forth the new offering of notes
f is so w e l i k n o w n t h a t onl
for with respect only to one or two points in
°
y a
very general description of the
connection with the announcement. Of these
the most important is probably the character circumstances attendant upon the placing of
of the new offering as an issue of "notes' 7 this loan need be furnished. The Treasury
rather than of " bonds."
has, from the beginning of December last to
The new notes, under the terms which have the end of the month of March, issued in
been fixed by the Secretary of the Treasury, certificates of indebtedness intended to anticiare to run for not over four years. Practically, pate the proceeds of this flotation approxitherefore, the difference between the old and mately $4,700,000,000, after deducting exthe new issues is that while the Government changes and redemptions. These obligations
must redeem or refund the notes after a given run five months from their date of issue.
period it might or might not, at its option, At the present time the expenditures of
refund the older issues. There is evidently the Treasury are running at the rate of
no warrant whatever for the view that the about $1,300,000,000 per month, a figure
notes are essentially a different kind of in- decidedly less than the rate of expenditure in
yestment or are to be regarded in some January and about the same as that which
special or peculiar way as contrasted with was established during February. The exact
the bonds. They are like the latter Govern- outlay for March has been $1,379,811,785.
ment obligations, while the period of their life Estimated expenditures up to the end of this
is entirely sufficient to warrant the ordinary fiscal year will bring the outlay for the fiscal
investor in putting his funds into them. In- year as a whole to about $18,000,000,000
deed, as is well known, before the war one or $19,000,000,000, of which sum there had
of the most important conservative invest- been expended up to the end of March
ments in the money market of the United $15,164,224,227. Congress has in the meanStates was offered by a series of short-term time adopted legislation designed to afford
notes issued by railroads and public-service cor- new sources of revenue from taxation, the
porations. These had become a favorite in- first installment of which was turned into
vestment with discriminating buyers, their ma- the Treasury on March 15. This legislation,
turity being from one to four years, the pre- however, will not suffice to meet the requireferred life as a rule not exceeding two or three ments of the Department, as the figures already
years. When the investor purchases a Govfurnished amply show. In the following table
ernment note with a maturity of five years he
are furnished details concerning the issues of
has the assurance that the obligation thus purcertificates of indebtedness which have been
chased will possess greater stability of value
placed in the hands of the banks in anticipathan could possibly be given by any bond whose
maturity is long or which is subject to the tion of the fifth Liberty loan.
possibility of redemption after a specified Series dated:
Dec. 5, 1918
period, but which has no definite or positive
Dec. 19, 1918
claim for such redemption upon the maker or
Jan. 2, 1919
issuer of such bonds. Far from its being true,
Jan. 16, 1919
therefore, that the new "notes" are not well
Jan. 30, 1919
adapted to private subscription, they are
Feb. 13, 1919
eminently so adapted, while the conditions
Feb. 27, 1919
Mar. 13, 1919
under which they are to be issued should
bring them much closer to the requirements of
Total




4

$613,438,000
572,494,000
751,684,500
600,101,500
687, 381, 500
620,578,500
532,381,500
542,197,000
4, 920,256, 500

APBII* 1,1919.

FEDERAL RESERVE BULLETIN.

The policy of issuing short-term certificates
of indebtedness was resorted
f CeF t 0 b t h e T r e a s
°
"
F
™ 7 Department
early in the war at a time when
the needs of the Government were exceptionally
urgent and unexpected in character. They
have served their purpose well as a means of
supplying the Treasury without delay with
the funds of which it stood in need. In so
doing, however, the certificate policy has
necessarily placed upon the banks the necessity
of bearing a continuing burden of war securities. This burden was, of course, at a minimum immediately after the conclusion of a
Liberty loan, inasmuch as at that time at least
a considerable part of the new bonds had been
sold to the public and the certificates to that
extent "funded." In so far, of course, as a
Liberty loan did not result in inducing the
public actually to take over and pay for the
new bonds, the banks instead of carrying the
short-term certificates of the Government now
carried the paper at whatever date maturing,
which had been made by their clients for the
purpose of enabling themselves to subscribe
for bonds. Inasmuch as the process of borrowing by the Government against certificates
has almost invariably been begun within a very
short time after the completion of a Liberty
loan, there has been steadily in the hands of
the banks a varying quantity of certificates
which has increased as the date of flotation
of each Liberty loan drew nearer, thereafter
to be technically reduced by the public through
the process of borrowing at the banks for the
purpose of absorbing the bonds. The necessity of general public subscription as an indispensable element in the process of financing
thus becomes apparent.
The Secretary of the Treasury, in a statement issued on March 12, expressed the opinion
that it is urgently necessary that these notes
should be given as wide a distribution as
possible, saying:
" I take this opportunity to repeat what I
have already stated, that it is the intention of
the Treasury Department to carry on the same
kind of intensive campaign for distribution as
heretofore. It would be a most unfortunate




305

occurrence if the people of the United States
failed to take these notes, thus placing the
burden of subscriptions on the banks. The
business of the country looks to the banking
system for credit wherewith to carry on its
operations, and if this credit is absorbed to a
large extent by the purchase of Government
securities, there will be many limitations placed
upon the supply of credit for business purposes.
Our merchants and manufacturers need ample
credit for setting the wheels of industry in
motion for peace-time production and distribution, and the wage earner is directly interested
in seeing that these wheels are kept moving at a
normal rate in order that full employment at
good wages may continue, and where readjustment conditions have necessitated a slowing
down of industry, it is vitally important that
activity be resumed and labor reemployed at
the earliest possible moment."
It should be understood that under the plan
of financing which has been pursued by the
Government since the entry of the United
States into the war, the direct source from
which public funds are drawn is the commercial
banks of the country. Precisely this same
situation exists in the case of the fifth loan, and
precisely the same obligation rests upon the
community to participate in the purchase and
absorption of the bonds needed for the funding
of the certificates. During the continuance
of the war there was, of course, the impetus
growing out of the belief that subscriptions
made in this way were necessary for the purpose of aiding in the immediate maintenance of
the armies in the field. The Government still
has strong military forces in
Euro e
Government **
P engaged in the important and necessary work of
completing our operations there. The obligations which have been met since the opening of the year and are still to be liquidated
are those which remain subsequent to the
conclusion of the war, and which represent the obligations or indebtedness incurred
for the conduct of the struggle. Essentially, however, the reason why the public
should subscribe for and take up the securities
offered in one of these great periodical loans is
that of self-interest. If the obligations already
taken by the banks are not liquidated, the
community at large will suffer from a continued

306

FEDERAL RESERVE BULLETIN.

inflation of banking credit and from the high
prices that are consequent upon this condition
of affairs. Only one remedy for the situation
now existing can be applied—that, namely, of
subscribing freely for the Government obligations when offered and of paying for them out
of the proceeds of saving, either already accumulated or to be accumulated from time to
time. Indeed, the urgency for adherence to
this policy is greater now than it was during
the war, inasmuch as at that time there was
strict oversight and control on the part of the
Government over production, distribution, and,
in a measure, consumption, while at present
that oversight has naturally and properly been
greatly relaxed or, in many branches of business
entirely abolished. The responsibility of saving
and conserving resources thus remains with
those who are the recipients of current incomes, either from investments or from salaries
and wages, in perhaps a higher degree than
was previously true.
Neglect on the part of the public fully to
appreciate and fully to perform
The banking ^ g ^ y j n taking up and pa}~ing for the forthcoming Victory
note issue would have a very prejudicial effect
upon the banking position by aggravating the
state of credit expansion which already exists.
With a view to ascertaining the exact facts
in the situation the Board directed a statistical
inquiry into conditions, which resulted in a
statement issued to the public on March 10,
that refers to the condition of the banks of
the country, both Federal Reserve and member, in this regard. These figures show that
the banks are already carrying a large amount
of so-called "war paper." At the end of 1918
the condition reports of 7,762 national and 930
State member banks and trust companies
showed that loans and discounts (including
overdrafts) were 13,562 millions, of which 3,634
millions, or 27 per cent, represent loans and discounts of trust company and State bank members. Among the total investments reported,
United States Liberty bonds figure to the extent of about 1,589 millions, of which 375 millions are reported by the member nonnational




APRIL 1,

1019.

banks. Treasury certificates held at the close
of the past year by all member banks totaled
1,303 millions, of which 321 millions represent
the holdings of nonnational members.
Loans upon the security of Liberty bonds and
Treasury certificates carried by member banks
at the close of the year aggregated 1,402
millions, of which 345 millions, or about 25
per cent, are shown for member institutions
other than national banks. Most of these
loans are secured by Liberty bonds. For the
national banks the Comptroller shows 1,020
millions loaned on Liberty bonds and 37
millions on Treasury certificates, which
together constitute about 10.6 per cent of the
total loans and discounts of the national banks
reported for the end of 1918. For the other
member banks this percentage works out at
9.5 per cent. The total of these loans (socalled war paper) is exclusive of approximately
360 millions, the amount of war paper held
under rediscount on December 31, 1918, by
the Federal Reserve Banks. It thus appears
that at the end of 1918 the member banks held
about 4,300 millions of their invested funds in
the shape of United States war obligations and
war paper, or more than 20 per cent of the
20,525 millions of their total loans and investments (otjier than fixed investments) reported
at the close of the past year.
It must be remembered that this showing
relates to the condition of affairs at the close
of last year (1918). Since that time there have
been sold and placed in the hands of the banks
about $3,734,424,500 of certificates of indebtedness in anticipation of the fifth loan.
A considerable portion of these certificates
has been used for rediscounting with the
Federal Reserve Banks. About $1,600,000,000 of the fourth loan certificates were retired during January of the present year, and
about $800,000,000 of tax certificates were
taken up about March 15, so that the situation
set forth in the Board's inquiry is changed correspondingly. The volume of war loan paper
in the banks at the present time thus shows but
little indication of self-liquidation, a factor
which must be carefully considered in connec-

APKIL 1,1919.

FEDERAL RESERVE BULLETIN.

tion with the prospects of the great Government loan which is now in contemplation.
A new factor has been brought into the current financial and banking sitfin uation h
"
y the fact that on
March 15 the first installment
of the proceeds of income taxation was turned
into the Treasury Department in accordance
with the requirements of the War Revenue
Act of February 26. By the terms of that law
payments of income taxation are now permitted
to be made in four equal quarterly installments, falling due on March 15, June 15,
September 15, and December 15. The first
installment is now reported as having
amounted to approximately $1,001,000,000.
This is currently accepted as equivalent to
about one-quarter of the total return to be
expected, but is probably in excess of that
figure. While probably the large majority of
individuals and corporations will prefer to take
advantage of the installment method of payment, there are not a few who are following
the custom of former years of paying in lump
sum. Such payments tend relatively to reduce
the payments to be received at subsequent
installment periods. There is no means of
estimating with accuracy the total return on
the basis of the installment of March 15, unless
it be assumed that this installment is roughly
equal to one-quarter of the total, in which
case the gross income from the income, corporation and excess profits taxes will amount to
not more than $4,000,000,000. The moneys
received on March 15 served to liquidate issues
of certificates of indebtedness which were falling due on that date and consequently simply
to transfer a specified amount of bank credit
from one group in the community to another
through the medium, first, of tax payments
to the Government, and then liquidating payments made to meet its outstanding certificates. Inasmuch as practically $800,000,000
of the March 15 receipts were thus absorbed
in settling maturing claims, the first tax payment leaves the Treasury in about the same
position as before, so far as current payments
are concerned, and it must therefore dispose




307

of the same problem as heretofore in connection with its program of borrowing and expenditure.
A special phase of the problem of Government financing as currently
Presented is that of supplying
the immediate necessities of
the Railroad Administration. Owing to the
fact that Congress did not finally act upon the
appropriation of $750,000,000, which had been
proposed for the use of the railroads, and
which had passed the House and had been
favorably reported by the committee of the
Senate in charge of it, it has become necessary
to devise some alternative method of meeting
the necessities of the railroads. Director
General Hines, of the Railroad Administration,
addressing the conference of the governors of
the Federal Reserve Banks with the Federal
Reserve Board held at Washington, March
20-22, gave a complete review of the situation
produced by the failure of Congress to enact
legislation providing the new funds required
for coming months. He stated that between
now and July 31 next there would be required
by railroad companies to pay interest and
dividends approximately 266 millions; to pay
for equipment, 258 millions; to pay for securities now maturing, 119 millions. While it is
not necessary to have all of these funds at
once, there were required on April 1, 63 millions
for interest and dividends and 74 millions
to pay for equipment already delivered and
to be delivered by April 1, an approximate
total of 137 millions. The Director General
stated that for funds due to the railroad
companies for interest and dividend charges
on April 1 he had considered the issue of
certificates of indebtedness signed by the
Director General, these certificates to bear
interest and be available as collateral upon
which railroads might borrow such funds as
they require, the War Finance Corporation to
furnish funds where railroads are unable to
borrow elsewhere. Attempts had been made
to deal with the situation only up to April 1,
with the idea that as result of experience gained
the Railroad Administration would be in better

308

FEDERAL, RESERVE BULLETIN.

APRIL 1,1919.

position to adopt sound policy for subsequent to be made of the funds thus obtained, it was
generally understood that they might be
requirements.
While suggestions have from time to time utilized for any of the purposes for which the
appeared that the needs of the Railroad Ad- corporation was organized. Besides the finanministration might properly be met by means cial requirements of the railways, which have
of acceptances drawn by equipment manu- been noted above, and local public utilities,
facturers and others upon the Railroad Ad- which have latterly been the subject of much
ministration, the conclusion arrived at, after discussion, the extension of credit in aid of the
conferences between the Director General of export trade by the War Finance Corporation
Railroads, the Secretary of the Treasury, and seems a likely development in the expansion of
the Federal Reserve Board, was that this its activities. The promotion of the export
would not be the best method of procedure trade by means of long-term credits has been
and that the needs of the railroads should be much discussed since the adoption by Congress
handled through the agency of the War of the Victory Liberty Loan Act of March 3,
Finance Corporation. The problem of financ- in which provision was made for the extension
ing the railroads has thus become a War of credits " for periods not exceeding five years "
Finance Corporation matter, the method pro- in amount not to exceed " the sum of one billion
posed for handling the situation being that of dollars" either to any person or corporation
the issuance of certificates of indebtedness, to engaged in exporting the domestic products of
be given to the equipment companies and the United States or to any bank or trust comothers by the Director General of Railroads, pany which extends assistance to such an
these to be used as collateral or protection of exporter.
such advances as may be made by the War
It is to be noted that the Federal Reserve
Finance Corporation or others. The Director Banks are authorized by a provision of the War
General of Railroads has issued a statement Finance Corporation Act, and subject to the
on this topic in which he says:
maturity limitations of the Federal Reserve
"The plan announced by the Director Gen- Act and regulations of the Federal Reserve
eral is that the Railroad Administration will Board, to discount obligations of member banks
issue its certificates of indebtedness to the rail- secured by bonds of the War Finance Corporaroad corporations for amounts due on account tion and to rediscount eligible paper secured by
of rental and other transactions arising out of
Federal control. I t is estimated that the the bonds and indorsed by a member bank.
amount of the April 1 requirements will be No such discount or rediscount, however, may
approximately $70,000,000.
be at an interest charge less than 1 per cent per
"The War Finance Corporation announces annum above the prevailing rate for eligible
that it is prepared to receive applications from commercial paper of corresponding maturity.
the railroads for advances for their April 1
During the month of March there has been
requirements on the security of certificates of
further effort on the part of
indebtedness issued by the Director General.
"Consideration is still being given by the Private financ- business to adjust itself to the
Director General as to the method to be ing.
new requirements of peace
adopted for meeting obligations due from the
through the reintroduction of methods of
Railroad Administration to equipment companies. An announcement on this subject will private financing. The gradual withdrawal of
the Government from the market as the leadbe made in the near future."
The War Finance Corporation on April 2 ing buyer has helped this movement. Methods
offered for subscription through of financing which were developing during the
Finance m Corpo- i t g fiscai a g e n t S ; the Federal latter part of the war in connection with the
ration issue. R e g e r v e B a n k g j $200,000,000 heavy purchases of the Government are giving
one-year 5 per cent bonds. While no official way to ordinary banking methods of financing.
statement was made with reference to the use Renewed purchases of commercial paper by




APRIL 1,

1919.

FEDERAL RESERVE BULLETIN.

banks are reported, while not a few institutions
are stated to be considering the best methods
to be followed in the use of their fluid funds
when short-term Treasury certificates of indebtedness shall be withdrawn from the market.
The volume of funds available for private
industrial enterprises has seemed to be reasonably satisfactory, although rates have been
kept at a tolerably high level as a result of the
conservatism of bankers who desire to avoid the
development of any cramped position which
might result from the demands of the Government during the progress of the fifth loan.
While the Government is still supporting the
export trade in no inconsiderable degree, it is
noteworthy that a substantial percentage of the
new financing now in progress is intended for
the purpose of facilitating the movement of
goods to foreign countries. These credits are
taking the form in many instances of acceptances, while in others they are simply ordinary
advances designed to sustain business which is
being developed for export account.
It was announced on March 15 that the synCompletion of dicate of bankers which had had
Belgian industrial in charge the placing of the socredit.
called Belgian industrial credit
had succeeded in completing their transactions
and in closing the allotments. This credit is
of especial interest because it represents the
first actual industrial borrowing in the United
States obtained through the regular mechanism
of the ordinary discount market for the purpose
of European reconstruction since the conclusion
of the war. The industrial credit in question
was distributed by a group of banks which had
joined hands for the purpose of making acceptances in favor of a consortium or group of
Belgian banks which, through the National
Bank of Belgium, had applied for accommodation to the extent mentioned. This accommodation when released will be used for the
purpose of the rehabilitation of Belgian industrial districts, and it is the understanding that
such indemnity proceeds as may be obtained
from Germany will, if available, be used for
the purpose of liquidating the obligation under
this credit. In any event, the resources of the




309

Belgian banks are directly pledged to protect
the loan. The credit, as already stated, has
taken the form of acceptances distributed
among a considerable number of banks and to
be discounted by members of the group after
acceptance has been furnished. The drafts are
to run 90 days, with arrangements for three
renewals, so that in effect the operation has a
maturity of a year. These provisions are
practically in line with those which had already
been established in other connections to govern
the so-called "renewal acceptances" of past
years. The Board, therefore, has not, as
stated in some quarters, developed any new
policy in connection with the discounting of
drafts of this character, but its attitude in the
matter remains unchanged and is governed by
the general instructions on the subject sent
out in the beginning of the year 1918 and since
then somewhat expanded for the purpose of
meeting special conditions as they presented
themselves from time to time. It has been suggested that similar acceptance credits be placed
on behalf of other countries which are in need of
funds for similar purposes. The Board's position, as already developed, has been that operations of this kind under the general description of
"acceptances77 should be subjected to reasonable
limitation and should not be extended to an
extent which would result in placing in bank
portfolios too large an amount of nonliquid
paper having a fairly distant maturity. While
the Board recognizes that in the present unusual
circumstances of the financial world some relaxation of usual safeguards may be unavoidable;,
nevertheless it believes that every reasonable
precaution should be taken to prevent the undue
accumulation of paper subject to renewal.
The development of the past month in regard
Federal Reserve to the condition of Federal Reand member serve Banks has been an inbanks.
crease of holdings of war paper
and a decline in ordinary paper and acceptances, the total being $491,900,000 on February
20, and on March 21 $451,700,000, or a decline
of $40,100,000. These holdings rose at the
Federal Reserve Banks from 1,596 millions on
February 20 to 1,691 millions on March 21 y

310

FEDERAL RESERVE BULLETIN.

while at reporting member banks certificate
holdings rose by about 500 millions over the
1,743 millions held on February 21. Offsetting
these increases there has been some slight liquidation in United States bonds and in loans secured by Government obligations at member
banks. The general trend of loans and investments has been upward, both at Federal Reserve and member banks, but acceptance holdings have declined. The gold reserves of the
Federal Reserve Banks have increased from
2,125 to 2,140 millions, while net deposits have
increased from 1,730 to 1,768 millions. At the
member banks there has been an increase in
Government deposits following the certificate
issues, while other demand deposits have also
risen very materially, reaching a high-water
mark on March 14 of 10,311 millions. There
has also been a slight decline of reserve balances
at the Federal Reserve Banks. These changes
are incident to the general course of public
financing anticipatory of the placing of the
fifth Liberty loan, and apparently indicate no
material changes in the condition of the commercial banks of the country. The restriction.
of business has resulted in an increasing decline
in current commercial demands for accommodation, but funds have been in good supply, and at
reasonable rates for all ordinary requirements.
The point at which the. process of war financing still continues to touch the
Price situation. public most closely is in connection with current prices of commodities.
There continues to be a noticeable recession in
the general level of wholesale prices. This recession aggregated probably about 10 points
up to the first of March from the high level or
"peak" which had been reached during the
war period prior to the armistice. During the
month of March itself but little further recession has been noted. The aggregate recession
is in any case relatively small and current
reports seem to show that the downward
movement of prices has either been arrested
or is at least losing speed. In fact, complete
restoration of prices to their eventual normal
basis, whatever that may be, can not be
expected to occur so long as the war loan




APRIL 1,1919.

securities of all kinds continue to rest in any
very considerable figure in the hands of the
banks. It is therefore strongly to the interest
of the public that as rapidly as possible such
war loan paper should be eliminated from the
banks. In the annual reports of Federal Reserve agents, published as section 2 of the
Board's fifth annual report, will be found discussions of the length of time required for
the elimination of this war paper from bank
portfolios. From this it will be noted that in
the majority of cases there is an expectation
that the banks may relieve themselves of the
bulk of their war loan advances within a period
of eight or nine months after the conclusion of
the fifth Liberty loan campaign. Whether
these predictions are oversanguine or not only
the future can show. It is certainly in the
general interest tnat the process of eliminating
war paper proceed as rapidly as is thus expected. In proportion as such elimination
occurs the ground will be prepared for future
progress toward the restoration of prices to
their eventual basis and therewith the " readjustment " of business to peace conditions,
which is being so anxiously watched by the
industrial community.
During the past few weeks two changes in
bank statements which are well
Rediscounts and

,.„

,,

bills payable.

,i

<
•

,•

i

,

worthy ol notice have occurred.
J

.

. .

1 he one is the addition to the
weekly statement of the New York Clearing
House banks of the item "Bills payable, acceptances, and other liabilities," an item which
covers rediscounts at Federal Reserve Banks
and is probably largely composed of such rediscounts. The other change has been introduced
by the Board itself and consists of the addition
to the weekly Federal Reserve Board statement
of an item showing rediscounts between Federal Reserve Banks. The new "bills payable"
item in the New York Clearing House statement now amounts to close to $900,000,000,
while the interbank rediscounts shown on the
Federal Reserve Board's weekly statement are
about $70,000,000. It is expected that as
time goes on the reporting of this item of bills
payable will be adopted as a practice by other

APEIL 1,1919.

clearing houses and that each member will
probably be called upon to make a separate
statement thereof. Already some well-managed member banks are showing in their statements the extent to which they are in debt to
Federal Reserve Banks. It has been the
opinion of the Board that the borrowings of
member banks at Federal Reserve Banks
might very easily be carried to excess, the loans
being placed there primarily for the purpose of
profit and not for any more general public or
fundamental object. In a general letter to
banks, issued on November 19, and referred to in
the FEDERAL RESERVE BULLETIN for December,
the Board took occasion to caution member
banks which it thought were in some danger of
overdoing their rediscounting, that the purpose
of such rediscount operations was not primarily
that of assisting the member institutions which
placed the rediscount to obtain the funds for
further profitable operations, but was rather to
be determined upon the basis of general banking advantage or upon that of relief for banks
which found themselves hard pressed or were
suffering from reductions in reserve account.
This point of view should be again emphasized,
particularly at a time when the taxation and
borrowing requirements of the Public Treasury
are likely to call for the utmost conservation of
resources and the use of the greatest judgment
and care in the making of new obligations. It
is therefore encouraging that the more progressive banks of the country are already scrutinizing carefully one another's rediscount operations and that they are inclined to attribute
considerable importance to the matter of getting " clean " or free of outstanding claims upon
them, which might prove troublesome and
which in any case represent drafts upon the general fund of fluid resources of the community.
During the month of March important
developments occurred which
Suspension of
d u c e f ar . re aching modificaexchange control. \
_ _ . . °
_
tions of the foreign exchange
situation. On March 18 it was announced on
behalf of the British Government that instructions had been received "to suspend purchases
of sterling exchange for Government account."




311

FEDERAL RESERVE BULLETIN.

The action was described at the time as "simply
another step of the kind all Governments have
been taking designed to permit business to resume its normal course." The Federal Reserve Board, on March 19, issued the following
statement: "All restrictions as to the sale or
purchase of lira exchange by dealers as described in the Executive order of the President
of January 26, 1918, are hereby removed until
otherwise instructed." These announcements
were equivalent to the withdrawal of Government support for the stabilized or artificial
rates of exchange which had heretofore prevailed in the New York market for sterling and
lire. The effect of these measures was a
marked decline in both branches of the foreign
exchange market. Up to about the olose of
March the following quotations were registered:
Range.

Sterling checks
Cables
Paris checks
Cables
Antwerp checks
Cables
Lirechecks
Cables
Pesetas checks
Cables

4. 75H @
4. 7 6 ^ @
5. 71 @
5.69 @
5.98 @
5.96 @
6.36 " @
6.35 @
20. 50 @
20. 62* @

4.58
4. 59
6. 03
6.02
6.22
6.20
7.70
7.65
20.15
29.25

These changes in the situation of exchange
mark the beginning of a new
eriocTW nanCia period in international finance.
The withdrawal of Government
support in important branches of exchange is
equivalent to a statement that henceforth the
movement of commodities for private account
between the United States and other countries
must be financed on some basis other than that
of Government guaranty. In normal times the
decline of exchange occurs in countries adversely affected by an unfavorable balance of
trade. The effect of such an adverse balance
is to depress the rate of exchange and thus to
raise the price of imported commodities in the
country which is suffering from a fall of exchange and a tendency is thus automatically
set up to restrict further excessive buying by
importers. Great Britain has already found it
necessary to adopt strong measures to prevent

312

FEDERAL RESERVE BULLETIN.

further importations of commodities and the
withdrawal of support for sterling will tend to
make these restrictions still further effective.
The same situation will probably exist in an
even more marked degree with respect to importations from the United States into Italy.
All these conditions must necessarily exert an
Important effect upon our export trade. Indeed, the extent to which we can now export
to foreign countries which have lately been
belligerent will depend upon their ability to
finance their own needs, or to obtain adequate
assistance in such financing from American
banks and bankers. Undoubtedly such assistance will be forthcoming in considerable measure, but it can hardly be expected that so
tremendous a flow of goods out of the United
States will be maintained as has been true for
a long time past, giving us during the years
1916-1918 a favorable merchandise balance of
about $9,000,000,000. So far as it is thus
maintained, the result will be accomplished
only through action on the part of Americans
looking to the purpose of financing foreign
buyers in their purchases. This, in other
words, means that the United States, in order
to continue as a great exporter, must also
continue as a great investor in foreign countries,
and that to the extent she is able to do so her
selling power will be correspondingly developed
and sustained. I t must soon become a question, therefore, through what agency and methods the American investor can best be reached
in entering the field of foreign investment.
A special situation had developed early in
March in connection with
French exFrench exchange. The most
change situation.
striking feature of these occurrences was a marked decline in the international
value of the franc—French francs being quoted
on March 18 at 5.80 per dollar, since when the
quotation has fallen below 6 francs. The
decline of the French franc has been variously
.attributed to developments in connection with
French Government financing, to a deliberate
^relaxation of the control or "pegging" of
French exchange by the Government of
France, and to other factors. The truth of




APRIL 1, 1919.

the situation is that our payments to France,
both through Government loans and through
disbursements for the Army on the spot, have
greatly fallen off. New credits opened by the
United States Treasury to the French Government since the armistice and up to the end of
March amount to only $285,000,000, while the
withdrawal of fully half of our troops and their
transfer back to the United States has correspondingly decreased the amount expended
for soldiers' pay and expenses. France has
not and will not for some time to come be in
a position to export effectively, and the destruction of much of her northern industrial region,
and the disorganization of other producing
sections, as well as the delay caused by the
necessity of converting her war plants to peace
uses, will necessarily retard still further the
development of her power to" ship salable
goods. France must therefore contemplate
for a considerable time to come a situation in
which she must either purchase less abroad or
must expect in the absence of artificial control
an unfavorable state of the exchanges. The removal of the restrictions by France upon the
movement of gold would involve the shipment
out of the country of a considerable volume of the
metal for the purpose of equalizing exchanges,
and this makes it less probable that there will
be such a restoration of the free movement of
gold in the immediate future.
From the standpoint of the United States,
the continuance of large exports of grain and
foodstuffs which have kept the record of
January, February, and the early part of
March fully up to that of any corresponding
period in the past, means that foreign countries
will be under the continued necessity of finding
satisfactory means of settling with the United
States for goods which they are not in position
to offset by means of corresponding exports
to the United States. This suggests that the
exchange problem may become more pressing.
Both it and the question of gold embargoes
will need to be considered at an early date.
Meantime, it is worth while to note that the
Treasury still has limited powers of extending
financial accommodation to foreign countries.

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

During the month ending March 10 the net
inward movement of gold was
and exPortimP°rtS $3,879,000, as compared with
a net outward movement of
$2,125,000 for the month ending February 10.
The gain in the country's stock of gold since
August 1, 1914, was $1,073,330,000, as may be
seen from the following exhibit:
[In thousands of dollars; i. e., 000 omitted.]

Imports.

Aug. l t o Dec. 31, 1914
Jan. l t o Dec. 31,1915
Jan. 1 to Dec. 31,1916
Jan. l t o Dec.31,1917
Jan. 1 to Dec. 31,1918
Jim. 1 to Mar. 10,1919
Total

Excess
Exports. imports
over
exports.

23,253
451,955
685,745
553,713
61,950
9,137

104,972
31,426
155,793
372,171
40,848
7,213

181,719
420,529
529,952
181,542
21,102
1,924

1,785,753

712,423

1,073,330

* Excess of exports over imports.

Of the gold imports for the month, amounting
to $6,501,000, receipts of $5,000,000 came from
Hongkong, the remainder coming largely from
Canada and Mexico. Gold exports amounting
to $2,622,000 were consigned chiefly to Venezuela, Mexico, and Colombia.
On March 20-22 occurred a three-day conference in Washington between
C eS 8 t t h e F e d e r a l
Was°wSn .
Reserve Board,
the governors of the Federal
Reserve Banks, and the executive committee
of the Federal Advisory Council. The meeting was fully attended and the time was given
chiefly to a discussion of current problems




313

connected with the financing and development
of the Federal Reserve System. Special attention was given to the question of discount
and interest rates and to railroad financing.
The current announcement of withdrawal of
Government control of exchange rates led to
a thorough interchange of views regarding the
international situation produced by this change
of policy, and to a discussion of the question of
gold embargoes. Various internal problems
relating to the operations of the Federal Reserve Banks were also considered. There was
also an exchange of views relating to the forthcoming Victory loan and related questions,
but it did not appear that there would grow
out of the meeting any recommendations looking to an immediate change of discount policy.
Among other matters discussed was that of
permanent quarters for Federal Reserve Banks.
Several of the banks have acquired properties
upon which they will either construct new
buildings or remodel existing structures, but
no definite action was taken in this respect,
and the Board will not undertake to approve
plans in this connection until the needs of the
several banks have been more carefully studied
and analyzed. To assist it in this work provision has been made for the employment of a
consulting architect, whose function it shall be
to consult with the several banks as to their
needs regarding the matter of permanent
quarters and to arrange with them the details
of their building plans.

314

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

BUSINESS AND FINANCIAL CONDITIONS DURING MARCH, 1919.
Improvement in general business conditions
and the continuance of an undertone of confidence in the essential strength and soundness of
the country's economic position are indicated
by the reports of Federal Reserve agents as
representative of the business situation toward
the close of March. The actual situation itself
has not changed very fundamentally, but there
are symptoms pointing to improvement in future prospects and to a more complete readjustment of business to normal conditions.
According to the report from the First Dis'trict, "satisfactory progress is being made
* * * in adjusting business to prevailing
conditions,7' retail trade being generally good,
savings deposits increasing, and stagnant businesses beginning to recover. In the Second
District there is " a general belief that fundamental conditions are sound," although
there is still a waiting attitude and uncertainty as to prices. In the Third District declines in prices during the past few weeks
have "improved the business situation and
indicate that progress is being made in the
process of readjustment." In the Fourth District "industry may be said to be 'looking up/
that is, it is glancing upward toward greater
activity, rather than downward, as formerly,
to a further period of stagnation, depression,
and decline. The optimism which has been
constantly in evidence, during the whole
period of transition, is being slowly but surely
substantiated by facts." The Fifth District
states that "while reports still show crosscurrents from dullness and uncertainty, there
are very few that do not indicate some improvement, present or prospective, and the
spirit generally is confident of overcoming
difficulties." In District No. 6 "no great
progress has been made during the past few
weeks toward a return to normal conditions,"
but the general status of business is fairly
satisfactory and it is felt that "as soon as
cotton begins to move at a satisfactory price,
trade in all lines will revive." In District No.
7, business men, "while proceeding along con-




servative lines, reflect less apprehension regarding the immediate future than a month
ago." It is also stated that "there is every
reason to expect increased activity all through
the Middle West." In District No. 8 "business is rapidly resuming a normal basis in
many lines." District No. 9 reports that
"trade in all the principal wholesale lines is
satisfactory, and retail trade is likewise good.
Collections are good." In District No. 10
"reports from all sections * * * point to a
year of activity and prosperity, while business
is far less inclined than heretofore to wait for
the development of new conditions." In District No. 11 no changes of importance have
occurred in the general trade situation during
the past 30 days, but "further progress is evident in the readjustment period, and less is
heard of the uncertainties following the turn
of the new year." In District No. 12 "manufacturing and industry have been, on the
whole, fair," while prospects are good, exports
the largest ever reported, and the principal
source of anxiety is due to the labor situation.
From all Federal Reserve districts it is
reported that the price situation is still the
controlling factor in business conditions and
outlook. Several developments of importance
are evident in this connection. There has
been a continuous though moderate decline
of prices. Practically all of the standard
index numbers show a falling off. Bradstreet's
number for March 1 was $17.2244, a decrease
of 2-&- per cent from February 1; Dun's
index number was $217,037 on March 1, as
compared with $220,050 on February 1, a
decline of l^r per cent. Sauerbeck's British
index number indicates a parallel falling off
of about 2 per cent. The general index number of the Bureau of Labor Statistics for the
month ending February 28 has decreased 5
points, from 202 to 197. The Board's compilation of index numbers showing the situation up to March 1, indicates that during February the prices of consumers' goods decreased
10 points, the number for the month of Feb-

APRIL 1,

FEDERAL RESERVE BULLETIN.

1919.

315

ruary standing at 202. Smaller decreases were in January, while a year ago average prices
shown on producers' goods, from 194 to 191, ranged around $85.
Cotton prices have continued to decline
and for raw materials, from 195 to 192, the
decline in the latter being due largely to the somewhat during the early part of the month,
decline in the index number for farm products, but the prospects of a resumption of free export
from 232 to 222. Reports since received indi- trade have materially strengthened them.
cate that the decline in prices has been mod- According to the prevailing opinion in most
districts, rapid and general decline of the
erately continued in some lines.
Almost equally important with the decline prices of local products are not to be expected.
in prices is the fact that the public at large Very great diversity of conditions exists in the
has apparently given up expectations of manufacturing field. From Philadelphia it is
immediate and decisive declines. From some reported that in a number of lines conditions
districts it is reported that, in the opinion of are still unsettled at mills. This is distinctly
the local business community, " Whatever true of cotton manufacturing and of iron and
change in prices is yet to come will come steel. The iron and steel output is still relaslowly/7 and that in consequence the busi- tively small and probably does not exceed
ness community has decided that further more than 60 to 66 per cent of capacity in the
postponement of activity, in the belief that case of the independent mills, although the
drastic declines will occur, is not warranted. United States Steel Corporation reports about
During the latter part of March there were 95 per cent of full operation for February, as
further downward revisions of prices in impor- compared with 97 per cent for January. Durtant lines. The steel industry sent a repre- ing March conditions have improved somewhat,
sentative committee to Washington which, as shown by reports received by the Board
in consultation with a board representing the from some of the principal producing districts.
Government, agreed upon standard quota- Pig iron production during February amounted
tions for the principal steel products, repre- to 2,940,168 tons, as compared with 3,302,260
senting a reduction of about $5 per ton. Some tons during January, and 2,319,399 tons a year
further revision in copper and other metal ago, the respective index numbers being 136,
prices has likewise occurred. The problem 143, and 107. Steel ingot production likewise
of working off the Governments surplus copper shows a decline from 3,082,427 tons in January
stocks is still unsettled or only partially set- to 2,688,011 tons in February, as compared,
tled. The Wrar Department announced, that however, with 2,273,741 tons a year ago, the
under a tentative agreement reached with respective index numbers being 129, 120, and
90 per cent of the copper producers, the latter 102. The unfilled orders of the United States
will sell the Government surplus at the market Steel Corporation have continued their decline,
price, charging the Government actual cost the figure at the close of February being
for so doing. Producers will distribute it in 6,010,787 tons, as compared with 6,684,268
connection with their own product, a mini- tons at the close of January, the respective
mum monthly amount being fixed and the 1 index numbers being 114 and 127, while the
actual amount disposed of being a certain | figure at the close of February, 1918, was
percentage of their total sales, if it exceeds 9,288,453 tons, corresponding to an index
the minimum amount. The copper is to be number of 176.
distributed in 15 months. Prices for lead are
In general manufacturing the situation is
expected not to be advanced from their reported as "somewhat mixed/7 Manufaccurrent low figure until existing overstock has turers of boots and shoes report from various
been largely disposed of. Lead ores averaged districts that their business is almost normal
$51.95 in February, as compared with
and in some cases up to capacity. In groceries




111260—19

3

316

FEDERAL RESERVE BULLETIN.

retailers are buying slowly, while large stocks
on hand have caused sharp declines in price.
In some parts of the country, however, wholesalers find business improving. In the Middle
West activity in many lines is all that could be
asked, while elsewhere production is still far
from normal. Woolen mill production has
reached its lowest point and is beginning to
improve. The American Woolen Co., in consequence of the cut in prices inaugurated some
time ago, has, it is believed, succeeded in booking a considerable volume of orders and has
adopted a policy of aggressive bidding for new
business. In miscellaneous lines there is a
very variable situation. The demand for
jewelry, automobiles, and other luxuries appears to be brisk in many districts. Purchases
of gold at the assay office in New York for the
purpose of manufacturing jewelry were greater
in January and February than during any
preceding month since October, 1916. In the
case of materials and in some cases clothing,
which has been affected by the unusual weather
conditions, demand is unsatisfactory and manufacturing low. Production of anthracite coal
has reached a low level, due to the falling off of
demand consequent upon extraordinarily mild
weather in most parts of the country, and the
production of bituminous coal and of coke has
likewise decreased, although recent reports
show a tendency to an upward movement.
In connection with the manufacturing situation there is to be noted a distinct improvement in the labor and employment outlook.
From District No. 1 it is reported that except
in certain centers where strikes have been in
progress conditions are not alarming, while
many of those who have been released from
war work are finding it comparatively easy to
shift into other occupations. In Chicago the
employment situation is noticeably improving.
Returning soldiers are being generally reemployed, although there is difficulty in placing
those who desire higher wages and better
appointment than they had before entering the
Army. In the agricultural districts a large demand for labor is now opening, due to the prospects of excellent crops. On the Pacific coast




APRIL I, 1919.

the problem of unemployment is still serious,
but in various parts of the district the surplus
of unemployed is beginning to decline and in
some sections it is believed that by May 1 the
entire labor surplus will have been absorbed.
In New York City, although the supply is only
about equal to demand, considerable labor
trouble still exists, with a number of strikes
in progress.
Reports from the producing districts continue to be very satisfactory. In the West
and Middle West it is stated that the condition
of winter wheat is excellent and in some quarters the best that has ever been recorded for
the month of March. In the Tenth District it
is reported that crop prospects "are brighter
at this time than at the winter break-up of any
of the last 10 years." From the Chicago district it is reported that crop conditions are
excellent and that an unprecedentedly small
amount of complaint of crop damage is heard
from planting districts. In the South there
has been a reduction of cotton acreage, but
prospects for production are good, while the
other crops of the South and Southwest are
selling at high prices and have produced at least
a fair yield.
Grain movements have considerably declined
during the past month. This has been noticeable for each of the five principal grains.
Stocks on hand at the close of the month also
show a relatively slight decline in each case.
Flour production likewise shows a decrease to
7,736,000 barrels during February, as compared
with 12,994,000 barrels in the previous month.
While the stocks of flour have increased from
3,341,000 at the close of January to 3,544,000
at the close of February, conditions as a whole
are dull, and there is a disposition to await
further developments.
In the live-stock market the situation is
reported as bright. The average price of cattle has advanced very considerably over a
year ago, while sheep and lambs for February
averaged about the same. The price of meats
has advanced; while there has been a slight
decrease in the stocks of meats, there has been
a 50 per cent increase in the stock of lard.

APRIL 1,1919.

The trend of prices for live hogs for Chicago
during February and early March has been
higher than a year ago. Receipts of cattle
and calves at 15 principal markets have decreased considerably from last month, respective figures being 1,656,046 and 1,096,118 head,
corresponding to index numbers of 164 and
116. The February figure, however, is almost
as large as that for a year ago. A decrease
has likewise occurred in the receipts of hogs,
the figures for the two months being 4,603,335
and 3,451,894, corresponding to index numbers of 209 and 168. The receipts during
February, 1919, are approximately the same
as receipts for a year ago, while receipts of
sheep have decreased considerably from the
January figures. They are, however, somewhat larger than the February, 1918, figures.
The figure for February, 1919, is 744,891 head,
as compared with 1,079,377 during January, the
index number having decreased from 79 to 61,
while the figure for February, 1918, is 733,895
head, corresponding to an index number of 58.
Receipts, meltings, and stocks of sugar at
the close of February show a considerable
increase, both over the figures for the previous
month, and over the same month in 1918, the
increase in receipts, and especially in stocks,
having been considerably greater, however,
than the increase in meltings.
Interest and discount rates have not varied
materially in any of the markets during the
month of March. The Board's reports show
minor variations at different points. In the
New York market occasional increases in both
call and time funds have been followed by
fully offsetting declines. No definite trend is
to be noticed in any of the principal financial
markets of the month. The Board's figures,
showing debits to deposit accounts, both of
individuals and banks, register a moderate
decline during the first half of March, the high
point (based on daily averages) having been
reached during the last week in February.
Rates at Federal Reserve Banks have been
stable. Banking conditions as a whole have
been satisfactory, with some operations of




317

FEDERAL, RESERVE BULLETIN.

considerable size successfully completed.
Prominent among these was the Belgian
industrial credit for $50,000,000, while other
operations have been undertaken and are in
progress. There has again been an increase
in Federal reserve note circulation, the total
advance for the period between February 28
and March 28 amounting to $49,469,000.
SPECIAL REPORTS.
REPORTED BY DISTRICT NO. 1.

Unlike woolen mills, whose raw material
was all held by the Government, cotton mills
had anticipated their needs for several months
ahead on the basis of full production before
the armistice was signed. Curtailment of
production through reduction in working
hours per week or through shut-downs has
made these stocks of cotton last almost twice
as long as had been anticipated. As a consequence, there is no demand for raw cotton on
the part of the New England mills.
Probably mill production has increased
slightly over a month ago. In one case it has
been reported that several mills which were
closed for a number of weeks are now running
three days each week. Some mills, to keep
their organization intact, have solicited orders
for future delivery without fixing the actual
sales prices. Should the market take a sudden
drop, the purchaser of these goods would be
protected and the mill would have to stand a
loss. However, the mill agents have such confidence in future values that they are willing to
undertake this kind of business. Curtailment
has made possible the making of much needed
repairs and rearrangement of machinery on a
more efficient basis, which could not be done
with the mills running to their full capacity.
The leather market shows considerably more
activity, with prices somewhat firmer. Shipments are going forward to an increased number of foreign countries* from which import
restrictions have been lifted, although in most
cases it is still necessary to obtain import permits.
With continued buying on the part of foreign countries and only limited shipments of
hides coming from South America through the
port of Montevideo, there is no prospect of any
reduction in the price of_ leather. Prices for
shoes for fall deliveries are therefore being
fixed with the expectation that there will be
no further advance in the cost of production.

318

FEDERAL RESERVE BULLETIN.

Slight reductions in the cost of findings are
looked for and will offset any advances in the
leather market which might possibly occur.
Domestic sales of shoes, both in number of
pairs and in value, greatly exceed those of last
year. Dealers are using more care in placing
orders and buy only those styles which manufacturers are likely to carry for their own retail
stores. In this way their limited capital can
be used to better advantage through frequent
reorders. In general, factories are running
well up to capacity, which, due to less efficiency
on the part of labor, is not nearly as great as
previously.
REPORTED BY DISTRICT NO. 2.

The commercial paper market continued
rather quiet during the period under review,
with a comparatively small amount of paper
being offered. After the beginning of March
there was some increase in the supply of paper
and a greater activity in the market. While
the rate remained unchanged at 5J per cent,
with an occasional sale of prime paper of short
maturity at b\ per cent, there was an undertone
of increasing firmness. Toward the end of the
period some small purchases of prime paper
were reported at 5f per cent. The demand
was reported as fairly strong, especially toward
the end of the period, and well distributed over
the country, being somewhat weaker at New
York than in the country as a whole.
The acceptance market has been fairly active,
with the supply of bills too small, however, to
meet the demand, which has been comparatively
strong. Toward the end of the period there
was an increased demand for bills, and also
commercial paper, of very short maturities.
The rate remained unchanged at 4J per cent
for 90-day bills, except for an advance of onesixteenth per cent by a single house for one day
only.
Call money has been relatively easy during
the entire period, tke renewal rate touching
6 per cent only twice and running at 5 per cent
or lower most of the time. Time money of all
maturities, for use in the Street, has been scarce
and firm at 5|- per cent, with demand light at
that figure. It is reported that the brokers
now have a comparatively satisfactory proportion of their borrowings on the time basis,
and that, despite the increased volume of trade
in stocks and the higher level of prices, they
have not materially increased their total borrowings.




APRIL 1,

1919.

Rates charged by banks to customers on
commercial loans are slightly firmer than a
month ago.
Bank clearings at New York for February
totaled $1,185,528,393, and were 20 per cent
below those of January but were 15.7 per cent
above those of February, 1918. Weekly clearings for the period under review were as follows:
Week ending—
Feb. 20
Feb. 27
Mar. 6
Mar. 13

$3, 705,468,000
3,437, 309,000
3, 979,487,000
3, 551, 032,000

The weekly clearing-house statement of
March 15, on the other hand, shows an expansion of some $113,000,000 in the item of
loans, discounts, and investments as compared
with the preceding Friday, and of about
$120,000,000 as compared with February 15.
Net demand deposits increased $110,000,000
over the preceding Friday and about $181,000,000 over February 15. Out-of-town banks
report that the deposits in their savings
accounts show an increase both in numbers
and in amounts. The demand for loans at
these banks up to a period shortly before
March 15 was not large, but was expected to
increase as the final date for tax payments
drew near. Loans, discounts, and investments of the Federal Reserve Bank decreased
steadily after March 11, and on March 15 they
were in round numbers $814,000,000 as compared with $882,000,000 on February 15.
There has been a decided upward trend in
stock prices throughout the last month, with
the volume of trading large, 1,000,000 share
days occurring several times. Bonds in contrast to stocks have tended toward lower
levels, while the volume of trading has been
small. The Annalist record of the average
prices of 50 representative stocks was 73.15
on February 15, as compared with 76.84 on
March 15; and of 40 representative bonds,
78.07 on February 17, as compared with 76.55
on March 15.
Most of the exchanges moved in favor of
New York during the four weeks ending March
15, and during the week following that date
there was a decided fall in rates on France,
England, and Italy. On March 17, when it
was stated hj the press that the French Government had suspended purchases of francs
in New York and that further French credits
would not be available in London, the demand
rate fell from 5.55 to 5.705. On March 20, it
was announced that the British Government

APRIL 1,1919.

FEDERAL RESERVE BULLETIN,

319

had suspended purchases of sterling exchange, . From inquiries made of commercial paper
and the demand rate on London fell from 4.7565 dealers as to the results shown by statements
to 4.69. Concurrently the rate on Paris, covering last year's business we learn that in
which had recovered somewhat and wasa large number of cases the statements show
quoted at 5.65 on March 19, receded again to reduced inventories, as the result of drastic
5.71. On March 21, following the removal of | liquidations, in order to avoid heavy losses
restrictions on dealings in Italian exchange, in a falling market. For this reason, borrowings
the rate on Italy fell from 6.375 to 7.05. The have been light and concerns are using their
daily movements of these rates from March 15 ! brokers and their banks much less than is usual
to March 21 are shown below:
at this time of year. Quite satisfactory profits
were realized in the majority of instances, and
very few cases of a decrease in net worth are
England. France.
Italy.
recorded. Due to a careful pricing of inventory
4,7570
5.550
6.365 | and heavy depreciation charges on merchanMar. 15
Mar. 17
4.7570
5.705
6.365 ! dise, plants, and machinery, the profits shown
Mar. 18
4.7570
5.740
6.375
Mar. 19
4.7565
5.650
6.375 arc not as large as the actual results.
Mar. 20
4.6900
ft. 710
6.375
There has been no change in money market
Mar. 21
4.6900
5.710
7.050
| conditions in the district. Borrowings at the
I Federal Reserve Bank have been largo, total
REPORTED BY DISTRICT NO. 3.
loans and investment operations in February
amounting to $643,150,000, compared with
Slow but steady improvement is shown in $683,722,000 the previous month. In February
knit goods, buying having been stimulated to 322 member banks were accommodated through
some extent by the fact that the closing down the discount of paper, compared with 351 in
of many mills and the operating of many January.
others on part time threatened a scarcity in
some lines. Jobbers manifest more confidence
REPORTED BY DISTRICT NO. 4.
as it becomes apparent that retail business
now is approximately normal. Further reConditions in the steel market remain unsatductions in prices are expected, but on account isfactory but not discouraging. I t is an open
of the recent cost of material and labor, they secret that the plans of Secretary Redfield for
are not expected to be drastic.
discussing a substantial cut in iron and steel
There is a good demand for novelties and prices have found a warm welcome at the hands
specialties, notably in sweater coats. There of the industries involved. Iron and steel men*
has been moderate buying for next fall, but give evidence of unanimity of opinion in believthis has been retarded to some extent by the ing that some reductions must be immedimild winter, making it appear that merchants ately made to stimulate demand, and that
feel they will have a possible carry-over of small cuts, constantly occurring, are demoralizheavy weights. A stronger demand for hosiery ing, while one substantial reduction will make
and underwear has developed, some manufac- for confidence and stability even though operaturers selling in good volume, and there is tions must be carried on temporarily at a small
increasing interest in the domestic market. margin of profit. The Pittsburgh district
As to the remainder of the year, the outlook is reports continued inactivity in steel with a
more promising than at any time since the number of plants, previously shut down, which
have not yet resumed operations. I t is also
signing of the armistice.
The course of prices at the recent auction reported that a considerable portion of the pressales of Government wool indicate that the ent small Pittsburgh production is going into
values established are based upon an immediate stock and in replenishing warehouse supplies,
and urgent demand from the mills to cover against the day when there will be a genuine
orders already booked. Within the past revival in consumptive demand.
Increased operations in the tin plate and
fortnight a big business has been placed with
sheet mills act as an offset to stagnant condithe mills.
A very large manufacturer of woolens tions prevailing in other lines. Prices on
reports that business is running ahead of last finished steel are maintained, and it is also
year, and that his customers all over the interesting to note that the automobile industry
country seem to be busy and look forward to is making a rather vigorous demand for sheet
products, the sheet mills being operated at
the future with confidence.




320

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

and by unsettled conditions prevailing over
the district.
Although pig-iron furnaces were not fully
in operation, the output of pig iron was greater
in February, compared with January, by over
11,000 tons. This increase is largely due to
the elimination of inexperienced labor, as many
of those working in this line before the war
have returned. An increased tonnage per man
has resulted, which materially reduces the cost
of production. The present demand for pig
iron is light.
The steel plants are busy and have enough
orders booked to keep them at full speed for
many months. The shipbuilding plants in the
South will need large quantities of steel, and
the steel fabricating plants, when completed,
will use a large steel tonnage. The unfilled
steel tonnage of the United States Steel Corporation is reported at 6,010,787 tons, as
against 6,684,268 on January 31, a reduction of
673,481 tons. Trade conditions, both in iron
and steel, are not up to the standard, as far as
demand is concerned, but hope is entertained
that both commodities will soon be stabilized
and a greater demand result. Labor conditions have improved to some extent in this
industry, both as to quantity and efficiency.
It is felt all over the district that as soon as
cotton begins to move at a satisfactory price
trade in all lines will revive, collections improve,
and bank deposits show material increases.
While the expected downward trend of prices
has not materialized, it is encouraging to note
REPORTED BY DISTRICT NO. 5.
reductions in prices of a few standard articles
Cotton mills report the market unsettled for of food during the month.
their goods, and a drastic reduction in prices
REPORTED BY DISTRICT NO. 7.
has greatly disturbed confidence. Jobbers and
retailers have been very cautious in placing
Crop conditions throughout the Seventh
new orders. Further reduction in operating Federal Reserve District, and in fact all
time is reported, with suggestions of possible through the Middle West, are excellent. The
closing. Mills, however, are hoping for a re- only growing crop, of course, is winter wheat,
vival of confidence and believe this would and this has come through the winter with
come if labor, instead of making unreasonable little, if any, damage, and while the plant
demands, would display the same spirit of co- seems backward, the prospects are for a rapid
operation which is expected from industries in growth with the advent of warm weather.
meeting changed conditions and bringing about Absence of any considerable amount of snow
the readjustments necessary to restore normal during the winter caused some apprehension of
business conditions. If this were accom- "winter killing" of wheat, but the remarkably
plished, the channels of trade would be opened even temperature in the Middle West during
up, and it is confidently believed that it would the winter months apparently eliminated the
soon be found that more goods are needed than disastrous effects upon the growing plants of
can be made and that there will be a very alternate freezing and thawing. It is remarkactive demand for them for some time to come. able how little complaint of damage is heard in
the correspondence with business men in the vaREPORTED BY DISTRICT NO. 6.
rious channels of trade throughout the district.
Cotton mills and pipe plants are not active.
With the arrival of spring, soil conditions are
Their operations are injured by lack of orders regarded as splendid. So great has been the

about 80 per cent of capacity. There is also a
small increase in demand for boiler tubes.
General sluggishness characterizes the wire
and wire-nail trades, and where sales are reported they are made at greatly reduced
prices. Makers of structural material see little
of encouragement in prospect owing to the fact
that new orders are not being received, inquiries likewise being scarce.
Pending financial relief to the railroads,
which assistance the last Congress failed to
provide, it is thought that no substantial
improvement can be looked for in that branch
of the steel industry which ordinarily supplies
the needs of the Nation's carriers.
The tin-plate mills look forward to the immediate future with considerable optimism.
This is said to be due to large oil developments
and bumper crops which are expected.
The outstanding feature of the month is
'undoubtedly the sentiment, which has been
steadily crystallizing for the past 30 days, that
cuts to as near bedrock as possible are necessary
before better things can really be expected.
While the cut, which it is thought will be announced shortly, will undoubtedly not be final,
it is confidently believed that the prices named
will obtain for a sufficient period to create a
lively as well as a healthy demand. The sentiment being unanimous that a cut is indispensable, manufacturers are hopeful that Secretary
Redfield's plan will afford the most effective
means of successful accomplishment.




APRIL 1,

1910.

FEDERAL RESERVE BULLETIN.

321

precipitation in the last few weeks that the concern stating that the demand is fully up
roads have been practically impassable in most to its ability to supply. A large dry-goods
parts of the district. While this has kept the company states that its factories are working
agricultural element at home and has been a full time and that its sales for the past four
factor in the curtailment of sales at the retail months are even with last year. Both cotton
stores, which has been reflected to some extent and woolen goods are said to have declined
in wholesale lines, yet the abundance of mois- about 25 per cent. A large wholesale grocery
ture in the ground generally is a prerequisite of concern states that its business is now about
a bountiful crop production. Plowing may be normal and that there is a good demand for its
delayed somewhat owing to the wet soil, but products. Reports indicate that certain
the month of March usually is given over to branches of the iron and steel industry are still
spring work and repairs about the farm. | below normal, but that increased activity is
Farmers are well supplied with funds, and the ' anticipated. The demand for automobiles,
large demand for wire fencing and farm equip- trucks, garages, etc., is said to be helping this
ment indicates that at least a normal amount line materially. Manufacturers of farm impleof this class of work is under way, notwith- ments report a good demand for all kinds of
standing the effect of the uncertainty as to the farm machinery. Considerable improvement
future prices of iron and steel on other lines of is noted in the electrical line, one large concern
industry.
stating that it expects a record business for the
Development in the live-stock industry and next three months. The drug line is active and
the course of the market price of corn has done there is a good demand for fixtures, soda founmuch to reassure the farmer and stimulate tains, etc.
maximum production. This concern regardREPORTED BY DISTRICT NO. 9.
ing future prices of farm products was reflected
in the large receipt of hogs at the primary
There are indications of a 10 per cent increase
markets last month compared with a year ago. in wheat acreage in the eastern half of North
The average price of cattle for the month of Dakota and in Minnesota, while in South
February advanced very considerably com- Dakota and Wisconsin last year's wheat acrepared with a year ago, while the sheep and age will undoubtedly hold its own. In the
lambs taken together averaged about the same. eastern portions of the two Dakotas, and
There was an advance in the price of meats, throughout Minnesota and Wisconsin, there
notwithstanding that the receipts of two will be a substantial increase in the barley acreclasses of live stock showed a considerable age. The prospective acreage of other crops
increase in the first two months of 1919 com- will be approximately the same, excepting that
pared with January and February, 1918.
with an ample supply of good seed, there are
While there has been a slight decrease re- strong indications of a heavier planting of corn.
ported in the stocks of meats, there has been a | In the western half of the district some winter
50 per cent increase in the stock of lard as comthe loss
pared with a year ago, but the demand has wheat has been killed out, but prove to is not
unusual or serious enough to
be a
been good, both for export and domestic trade. factor. In the same territory the indications
The trend of prices for live hogs at Chicago for spring wheat planting are very good. Over
during the last month has been higher than a
the whole district present moisture
year ago. Attention is called to an unusual practically are excellent.
development in the case of cut meats. The conditions
stock declined at some of the central points
REPORTED BY DISTRICT NO. 10.
during February, 1,713,312 pounds, as compared with an increase of 88,000,000 pounds
Removal this month of restrictions on exduring the corresponding period in 1918. The ports of hog products to allied countries,
trade in by-products, such as fertilizer, greases, taken in connection with the abandonment of
and oleo oil, has been slow, but there has been the agreement between the Government and
a tendency in the price of wool and also sheep- the packers to maintain minimum prices, has
skins to advance, while the hide and leather resulted in an advance of about 75 cents per
market is rather unsettled, waiting, and hesi- hundred pounds on live hogs within the past
tating. Prices for leather goods are steady.
week. But at the same time the hog market,
stabilized for several months by the Food AdREFORTED BY DISTRICT NO. 8.
ministration's guarantee of prices and marketManufacturers of boots and shoes report that ing regulations, is in an unsettled condition.
their business is practically normal, one large In consequence of the enlarged field of trade




322

FEDERAL RESERVE BULLETIN".

APRIL 1,1919.

and a limited hog supply it is freely predicted The excellent crop prospects fully justify the
that prices of hogs and pork may for some prediction of a satisfactory business during the
time remain higher than the stabilized prices spring and early summer months, and we see
that were maintained. Prices of both cattle no reason why the situation should not conand sheep have, to an extent, been influenced tinue intrinsically sound. There is no imby the new conditions that have come to theprovement in the cotton situation. Large lots
are held at interior points, and at the risk
hog market.
Packing hogs for the week ending March 15 of repetition it may be stated that until it is
were selling at $18.85 to $19.10 per hundred marketed the restoration of normal times can
pounds, as compared with $16.90 to $17.60 in not be expected. The wheat and oat crop
February, which is a shade higher than at this looks very fine in practically every part of
time last year while the war was on. Cattle the district. During the past two weeks heavy
prices have been maintained at $2 to $4.50 winds have prevailed in southwest and west
per hundred pounds above the prices of a year Texas and reduced the moisture in the ground.
ago, top prices on steers reaching $18.50 in There is much activity in farm work preparaFebruary, as compared with $13.75 in Feb- tions, however, and the district will unquesruary of last year, other classes and grades of tionably produce one of the largest grain crops
cattle being relatively high. Top prices of in its history. The campaign for a reduced
lambs, w^hicli in January dropped to $16.95 per cotton acreage is having a good effect, and we
hundred pounds or 30 cents' below the top of believe, with few exceptions, is being enthusilambs in January, 1918, rose to $18.60 in Feb- astically received. The reduced acreage will
ruary, and on March 4 sales were made at a automatically increase the area planted in
new record price of $19.50 per hundred pounds, diversified crops, such as corn and other foodthe latter being 50 cents higher than the peak stuffs.
war price of March, 1918.
REPORTED BY DISTRICT NO. 12.
THe movement of meat animals to the marThe
of 40,000 shipyard workers in
kets is running ahead of this time last year, as Seattle strike Tacoma, which commenced on
the following figures of receipts at the six mar- January and
21, was ended March 11 by a referenkets of the district show:
dum vote of the workers. The men are returning to work, but it will require approxiFebruary.
Two months.
mately two weeks before the yards will be in a
position to reemploy the same number as at the
1919
1919
1918
1918
time the strike was called. I t is expected that
when this readjustment is accomplished the
Cattle.
393,438 403,445
890,849
954,579
23,038
13,900
Calves
59,114
35,841 steel shipyards will be employing practically
v „,„
—
Hogs..
1,029,542 ' 964,575 2,446,144 1,938,716 the same number of men as on November 11,
403,800
384,609
Sheep.
855,123
935,351
but there will be a reduction of from 15 to 50
per cent in the number employed in the shipIndications of a decided slump in live-stock
marketing, as compared with the heavy war- yards building w^ooden ships. Approximately
10,000 craftsmen, mostly machinists,
time rush of food animals to the markets, are San Francisco Bay district are now in the
unemdisclosed in the receipts, which are running ployed on account of their refusal to work on
lighter in March than in March of last year.
Saturday afternoons. Reports from
Packers' operations in February were mate- yards in Portland show that there the shipare now
rially reduced from the heavy operations main- 24,314 men employed as compared with 28,600
tained for the previous five or six months. on November 11. In
reports
Purchases of animals for slaughter at the six seven shipyards show California employedfrom
40,094
at
markets in February were 218,000 cattle, present, as compared with 41,395 when|the
900,000 hogs, and 243,000 sheep, as compared
with the record for February, 1918, of 241,000 armistice was signed.
The problem of unemployment is still serious
cattle, 849,000 hogs, and 240,000 sheep.
throughout the district. In California there
are approximately 19,600 out of work, aside
REPORTED BY DISTRICT NO. 11.
from the 10,000 shipyard strikers. In Oregon
The crop outlook is more encouraging, fur- there is an estimated surplus of 8,985 made up
ther progress is evident in the readjustment of 2,185 skilled and the remainder unskilled
period, and less is heard of the uncertainties laborers. The number is, however, decreasing
noticeable following the turn of the new year. rapidly on account of new public improve-




Al'KIL 1,

323

FEDERAL RESERVE BULLETIN.

The provincial banks absorbed by the
ments and increased work on farms and in
lumber camps. In Washington the total London institutions did not (with the excepnumber of unemployed is between 10,000 and tion of the Metropolitan Bank of England and
12,000, about one-third being in Seattle. Wales) show cash in hand and at bankers
The number has been decreasing rapidly during separately from mone.y at call and short notice;
the past 10 days. It has been stated that by in the above table, therefore, under the year
May 1 the entire surplus will be absorbed in 1913 the amount of cash is overstated and of
Oregon and Washington. In Utah there are loans and advances understated by the sum
approximately 5,000 unemployed, mostly un- lent, at call and short notice by those banks.
skilled laborers, and in Nevada there are now If the proportion of money at call and short
3,500 miners out of work. Reports from Ari- notice to cash in hand and at bankers was the
zona place the total in that State at 7,250, same for these banks as it was for the banks
made up of 3,750 miners, 2,500 unskilled la- which distinguished between the two items, the
borers, 1,000 miscellaneous. Figures from sum involved is about £3,500,000. On this
Idaho show 1,310 without employment, classi- assumption the table would read as follows:
fied as follows: Agricultural workers, 350;
unskilled laborers, 485; miners, 350; miscellaCash in
Discounts,
Current and
Investhand and
loans, and
deposit
neous, 125.
ments.
at bankers.
advances.1
accounts.
Bank Credits in War.
(From the London Economist, TVb. 8, 1919.)

Now that the report of Lloyds Bank has
appeared, it is possible to group together the
figures of the Big Five banks, and see what has
happened to them during the-war period. We
can thus, by taking the experience of these
most important members of our banking machine, anticipate with some confidence what
is likely to be shown when in our banking
number, that will appear in May, the complete
figures for the United Kingdom can be assembled and a full comparison can be made
between the years 1918 and 1913. As usual,
the comparison is complicated by the lack of
uniformity in banking accounts, which affects
the figures of some of the concerns that have
been absorbed by the Big Five. One of the
advantages of the amalgamation process has
been its effect in the direction of greater fullness and candor in statements, as the London
standard has boon applied to provincial banks
that lagged behind it and have boon absorbed.
We subjoin a statement of the chief liabilities
and assets of the group as at December 31,
1918 and 1913.

Five London
b:m!«:
11)18
£1,305,095.000 £237.499,000 £258,933,000 £850,038,000
057,030) 000

]i)13

Lierea-'O-.
Increase, p c r
cent
1

100', 300,000

91,254,000

507, S75,000

C47.105,000

131.199,000

104,254,000

348. 1<".3, 000

9;

125

173

Including money at call and short notice.

If the experience of these five groat banks is
repeated by the other banks of the United
Kingdom wo may expect to find that the
to till amount that the public had to its credit
with its bankers, apart from the Bank of
England, will have grown from 1,033 millions
at the end of 1913 (as shown by our banking
number of May, 1914) to something like 2,000
millions last December. It is amusing now
to remember that in the early years of the
war the rapid growth of bank deposits was
hailed as an astonishing proof of the growth
of the nation's wealth during a time when an
ever-increasing portion of its energy was being
devoted to destruction. This hallucination is
now not nearly so common, though it is still
cherished by some earnest believers. Actually
the growth of bank deposits is largely a measure of the extent to which the facilities offered
by an almost perfect banking system have
been abused by our financial rulers during
Cm-rent iind i Cash in j
Discounts,
deposit
; hand and ]
loons, arid
the war. Because they had not the pluck to
account.*. ! at bankers, i
advances. 1
| tax as they ought to have.taxed, or the wit to
~r
Five London
i
I induce or compel us to meet the war cost by
bank;:
{ 1.305,095.000!£ 237,499.00!) £ 25S, 933,000 £ S5I>, 038,000 | subscription of saved money to loans, they
•
1913 3
'057,930,000= l(W,.S()0',000|
91, W.)7,000 504,370,000
wore obliged to meet the gap between receipts
Increase..
C>17,105,000 127, (199,000 j 101,251,000 351,003,000 and expenditure by the creation of banking
Increase, per
97
117;
173
70 credits and paper money.
cent
Instead of taking
or getting money from us, and so reducing our
^Includes money at call and short notice.
2 Includes all banks subsequently absorbed in the 5 London banks buying power as fast as theirs had to grow,
except Nevile, Reid & Co. (acquired by Barclays in 1914), for which no
they made new buying power, so reducing its
figures arc available.




111260—19

4

324

FEDERAL RESERVE BULLETIN.

effectiveness, and that of ours, through the
consequent rise in prices, which incidentally
added enormously to the cost of the war, and
to the suspicion and discontent among the
workers, of which we are now beginning to
reap the fruits. If every purchase by the
Government had been balanced by a restriction of the spending power of the individual
citizens, the whole finance of the war would
have had a different aspect. The debt would
have been much smaller, the adverse trade
balance would have been less formidable, the
opportunities for profiteering by employers
and workers would have been greatly reduced,
and there would have been less of the consequent demoralization which is now terminating
a war for liberty and justice, with a sordid
scramble for spoils.
If we look at the growth in the assets which
has accompanied the growth in deposits, the
process by which the latter has been produced
is clearly evident. Discounts, loans, and
advances have risen by about 350 millions,
in a period during which the volume of commercial bills has been greatly reduced, and
general business has been, to a much greater
extent than before, on a cash basis. This
paradox is explained by the inclusion of
Treasury bills in the discount item in the
balance sheets of certain banks, and b}^ the
advances made by the banks to customers, in
order that they might take up war loans and
war bonds. To the extent that the Government has sold securities during the war to
bankers or llinvestors" who borrowed from
their bankers in order to subscribe, the war
was financed by additions to banking credits,
since every loan and every investment made
by a bank creates a new deposit for itself or
for another bank. The big increase in the
investments held by the banks, amounting to
164J millions, may be largely attributed to the
use of this form of inflation. t Finally, the
item of cash in hand and at the Bank of
England, which shows so satisfactory an
increase, has been swollen by the activity of
the printing press, which has enriched the
country with over 300 million Bradbury
notes, and of the Bank of England's creditmaking energy, which has added 165 millions
to its holding of securities, as shown in its
weekly returns.
By these processes there has been achieved
the "enormous increase above recorded in the
claims to wealth which bank deposits ultimately mean. As the wealth of the country
has in the meantime been reduced by the sale




APRIL 1,

1819.

of our best foreign securities, and by the lack
of upkeep which is shown, for example, by
the puddles in every street, the effect of this
great multiplication of claims to wealth is
naturally the depreciation of their value as
reflected in higher prices of goods. It has
been a silly business, for which the bankers
were in no way responsible. They were
bound in war time to support the financial
measures taken by the Government, and the
figures given are at once a measure of the
efficiency of the bankers and of the ineptitude
of the Governments. In excuse of the latter,
it must be remembered that they probably
did not understand the working of the machine that they were using, or abusing, and
also that they were always deluded by the
conviction that the war could not last another
six months. This conviction lasted until
just about the time when it became true,
when it was abandoned in official circles.

Federal Reserve Banks and the Fourth Liberty
Loan.

In the following tabulation are shown principal changes in the condition of Federal Reserve Banks between October 18, 1918, and
January 31, 1919, covering practically the
period of the placing of the fourth Liberty
loan, i. e., from the time the first 10 per cent
pa^onent on the loan was due to the time when
the last 30 per cent installment became
payable.
During the period under discussion the Government issued $6,989,047,000 of fourth loan
bonds, $794,172,500 of tax certificates, and
$3,225,099,500 of Treasury certificates in anticipation of the fifth loan, or a total of $11,008,319,000, and redeemed all the seven series of
certificates aggregating $4,659,820,000 issued
in anticipation of the fourth Liberty loan.
The net result of these operations was to
supply the Government with additional funds
of $6,348,499,000.
It will be seen that notwithstanding the
huge loan operations handled b}' the Federal
Reserve Banks and the enormous amounts of
funds and credits placed at the disposal of the
Government, the reserve position of the banks

APE 11,1, 1919.

325

FEDEEAL RESERVE BULLETIN.

at the end of the period was stronger than at
the beginning of the period. This was due in
the first place to a gain of nearly 92 millions
in reserves, largely gold, and a decrease in
Federal Reserve note circulation of 51.8
millions, more than offset, however, by an
increase of net deposits of 78.7 millions.
During the period of intense Government
financing the Federal Reserve Banks report
an increase of 94.8 millions in their holdings

of war paper, i. e., bills secured by United
States war obligations, as against decreases of
182.3 millions in their other discounts and of
88.8 millions in the holdings of bills purchased
in the open market.
The excess of actual reserves over the amount
required against deposit and note liabilities
(so-called free gold) increased 85.2 millions,
adding about 213 millions to the note-issuing
power of the banks.

Changes in condition of Federal Reserve Banks.
[In millions of dollars.]
Oct.. 18,
1018.

* n c r e a s c - ! Decrease.

O '
W

Total cash reserves
Bills secured by Government obligations.
Bills otherwise secured
Bills bought in open market

2,087.7
1. 202.8
425.8
370.1

2,179.6 I

Total bills
Government securities
Net deposits
Federal Reserve notes in circulation
Federal Reserve bank notes in circulation
Net deposit and Federal Reserve note liability
Reserve required
Total cash reserves
;
Free gold
Note-lending power
Per cent cash reserves to total liability
Federal Reserve agents' note security:
Gold
/
Paper
Excess of paper
Banks' redemption fund
Total gold reserves against Federal Reserve notes
Vault reserve, including gold with foreign agencies
Gold settlement fund

2,058.7
Do. 9
1.580.8
2; 502.5
55.7
4,083.3
1,554.3
2,087.7
533.4
1,333.5
51.1

1,882.4
294.8
1,059.5
2.450.7
' 129.4
4,110.2
1,501.0 i

1,173.5
2,012.9
519.4
57.4
1,230.9
440.4
410.4

1.253.3 i
i;823.5 !.
373.4 .

1,357.fi !
243.5 i.
281.3 j .

2,179. (i i
018.0 '
1,54(5.5'
53.0 :

91.3
1,344.6
412.2
422.7

i
j
I.
;

91.9
94.8

182.3
88.8
198. 9
78.7
73.7
26.9 I
6.7
91.9
85.2
213.0
1.9

176.3
51.8

79.8
33.9
113.7

189.4
146.0
28.2

6.3

Liquidating the War Paper of Member Banks. per cent of the loans in the Federal Reserve
Bank and of loans discounted by that bank
In preparing their annual reports, Federal with other Federal Reserve Banks were against
Reserve agents were asked by the Federal Government securities. As early as possible
Reserve Board to include a statement of their means should be taken to encourage liquidaviews regarding the policy to be pursued in tion of such loans. The most effective means
of
restoring the liquidity of banks throughout the would appear to be the gradual increasing on
the Federal Reserve Bank's discount rate
country. Practically all Federal Reserve bond-secured loans. How fast and how far
agents have complied with this request. The this rate should be increased will depend on
following compilation is a review of their its effect on the future offering of Government
securities and the rate at which such securities
answers on this important topic:
are offered. No other method than by rate
increase seems practicable, although banks
BOSTON.
should be urged to bring some pressure on their
As the industries of this district when hos- borrowers of this class, either by increasing
tilities ceased were largely given to Govern- rates or by demanding an additional margin of
ment work, the cancellation of war orders will collateral. How soon this war paper can be
probably bring about a considerable reduction liquidated, it is difficult to say. If liquidation
m commercialloans. Banks of the district are comes in commercial loans, banks may liquicarrying a very large volume of loans against date their Federal Reserve Bank borrowings,
Liberty bonds, and "on December 31 about 75 but as soon as the Government's requirements




326

FEDERAL RESERVE BULLETIN.

AiTtiL 1, 1919.

have been met, liquidation should be steadily liquidation. If there is one policy which
.and consistently forced by the Federal Reserve appears to be unquestionably desirable in the
difficult period of readjustment that immediBank increasing its rates.
ately confronts us, it would seem to be that
PHILADELPHIA.
of encouraging by all possible means the continuation of saving and the thorough absorpIt is difficult to estimate the probable time tion of the Government securities, which can
in which members can clear up all their "war not now be said to be fully digested; and it is
paper77 at the reserve bank. Not very much equally certain that all of the influences that
progress can be made until the Government can be brought to bear to that end will be
has completed its war financing. If prior to none too potent.
the next bond issue considerable liquidation
RICHMOND.
in business should take place, it would release
funds for investment in United States certifiThose banks which purchased bonds themcates of indebtedness and possibly prevent
material increase in the loans of the bank. selves and induced their customers to do so by
In pursuance of the policy of banking insti- agreeing to carry them, have, as a rule, gone as
tutions, loans not essential to the prosecution far in this direction as is judicious. At present
of the war were very largely curtailed, while prices, liquidation of war paper would entail
loans for war purposes were greatly expanded, considerable losses, and public sentiment does
and it is the latter class of loans in which there not approve of forced liquidation under such
is the possibility of considerable contraction circumstances. This is particularly true in
view of the coming campaign for the fifth loan.
owing to the cessation of the war.
In the meantime it should be the policy of The terms of this loan will have an important
the Federal Reserve Bank to use every effort bearing on present bank war obligations. This
to bring about as rapidly as possible the will necessarily delay liquidation of the present
liquidation of war paper and at the same time situation. Under these conditions, the Federal
do everything it can to encourage legitimate Reserve Bank must shape its policy toward
business by extending as far as possible neces- member banks as daily conditions may arise.
These being unknown, it is problematical as to
sary credit facilities.
how soon war paper can be cleared up. The
volume of this paper, together with cotton
CLEVELAND.
paper, is so large that it will probably need the
Iii practically every community of District No. proceeds of another crop to relieve the indiges4, with one or two exceptions, the Government tion.
securities appear to have been subscribed alATLANTA.
most completely by individuals and corporaIt would be very difficult to say at what time
tions, and few subscriptions,comparatively,were
made by the banks for their own account. The we may expect member banks to clear up their
proportion of loans to subscribers for carrying war paper. This is due largely to the fact that
bonds of the fourth Liberty loan, however, is the main products in this section, such as cotlarge and it is evident that some of the sub- ton, cotton seed, peanuts, rosin, and turpenscribers intended to carry loans on their bonds tine, of this year's crop, have not yet been sold.
for at least a year. Reports indicate, however, The decrease in the price of cotton in the fall
that few agreements have been made by banks created a disposition in the minds of the proin the district to carry loans on fourth Liberty ducers to hold their products for a better price;
loan bonds at the coupon rate for longer than and, with increased prices, liquidation will set
90 days, and this bank has encouraged the in from that source. This, in turn, will restore
banks of the district in the policy of an increas- the liquidity of the banks and will enable them
ing rate to stimulate liquidation at as early a to settle their loans secured by Liberty bonds
date as possible. It is our own policy to and United States Treasury certificates.
accept ordinarily one renewal of a member
The policy of the Federal Reserve Bank of
bank's own 15-day collateral note secured by this district will be to aid these member banks
Government securities, at the special rate of by carrying their discounts for them until such
4 per cent, but to make any subsequent time as this liquidation will materially set in,
renewals bear the 90-day rate of 4J per cent; which it is expected will be during the months
and it is the judgment of our directors that of January, February, and the early part of
with all due liberality of policy, every proper March. We are extending to member banks
influence should be exerted" toward early the facilities of this bank in every way.




AIMHI, 1,

FEDERAL RESERVE BULLETIN.

1010.

CHICAGO.

Necessarily the commercial banks of the
district not only felt the effects of the demands
of the Government upon their resources in the
matter of purchasing Government securities,
hut also they have felt the effect of the high
prices of practically all raw materials. Naturally these high,prices made it necessary for
borrowers to use much more money for the
same volume of business than was needed before the war. These two elements have caused
the banks generally throughout the district
to borrow liberally from the Federal Reserve
Bank of Chicago.
The effect of war financing on commercial
paper from the standpoint of the banks naturally would be that of subjecting makers to a
more careful scrutiny of the credit risk. Credits extended before the armistice was signed
were based primarily upon their essential character to a very considerable extent, whereas
after the armistice was signed and war needs
relaxed, credits were viewed from the standpoint of ability to get back to a safe and profitable peace basis. The consequence of this
shift in viewpoint necessarily has contributed
to a most careful examination of credits, Avhich
in the war period were regarded as the
strongest. Notwithstanding the heavy war
demands, the banks in the Seventh Federal
Reserve District are believed to be in a relatively strong position and hence able to care
for all reasonable demands of general business.
In the performance' of the functions for
which it is created, the Federal Reserve Bank
of Chicago will continue to meet the situations
as they arise, extending to deserving member
banks its facilities of discounting with a view
to aiding them in caring for credit requirements of general business, and at the same time
conserving credits to the extent necessary for
the furtherance of Government financing yetto be done.
ST. LOUIS.

In Federal Reserve District No. 8 a total of
$710,804,500 was sold of all four issues of
Liberty bonds. The total amount of certificates of indebtedness taken by this district in
anticipation of all Liberty loans was $444,543,500, but of these certificates $353,454,000 have
matured and been paid by the Government,
leaving $91,089,500 outstanding. Of this $91,089,500 of certificates, some were used in making payments on fourth Liberty bonds, so that
the amount actually outstanding is less than
$91,000,000. Assuming, however, that the




327

amount is $91,000,000, this, added to the1
$710,804,500 of Liberty bonds, gives a total of
approximately $800,000,000 of war obligations
taken by this district and outstanding at the/
end of 1918.
The banks in the live centers of this district r
St. Louis, Louisville, Memphis, Little liock,
and Evansvillo, at the close of 1918 held approximately $40,000,000 of Liberty bond'sand approximately $35,000,000 of certificates
of indebtedness, or an aggregate of $75,000,000
of war obligations. This would indicate that
out of the $800,000,000 of war obligations
taken and outstanding in this district, a very
large amount, probably five to seven hundred
millions of dollars, was absorbed by the general
public. Under the circumstances, this indicates a not unsatisfactory condition in this
district.
At the end of this year the member banks
had. discounted with the Federal Reserve Bank
a total of $53,117,641.50 of war obligations,
showing the extent to which the Federal Reserve Bank has been called on to give assistance. Due to this assistance the support
rendered by the banks to the Government has
had little effect on the general business in this
district. At the request of the Federal Reserve Board many banks discriminated against
loans for nonossontial purposes, but legitimate
essential business demands have been taken
care of by the banks without hesitation at a
fair rate of interest.
The following figures show the assistance
given member banks during the period of the
war: On April 1,1917, just prior to the entrance
of the United States into the war, the bills rediscounted by the Federal Reserve Bank of
vSt. Louis for member banks amounted to only
$251,806.43, and the advances made to member banks on their 15-day collateral notes
amounted to only $1,310,000.. On December
31, 1918, after a year and eight months of war
financing, the bills discounted for member
banks amounted to $21,249,353.85, of which
$3,904,341.50 was secured by Liberty bonds
and Treasury certificates of indebtedness, and:
the advances to member banks on their 15-day
collateral notes amounted to §49,453,300, of
which $49,213,300 was secured by such Government securities. Thus from our entrance
into the war to the close of 1918, member
banks' paper discounted by the Federal Reserve Bank of St. Louis increased from
$1,561,806.43 to $70,702,653.85, of which
$53,117,641.50 was secured by war obligations.
The effect of war financing on commercial
paper in this district has been very noticeable,.

328

FEDERAL RESERVE BULLETIN.

The market has been considerably below normal. Slight revivals have occurred between
the Liberty loan campaigns, but on the whole
the commercial paper business has been quiet.
The rate on commercial paper during 1918
remained at practically 6 per cent until December, when a downward tendency became
apparent.
MINNEAPOLIS.

The policy of the Federal Reserve Bank
from the beginning of the war has been to vigorously discourage bank investments in Liberty
bonds, believing that it was highly necessary
that all banking institutions give especial care
to the preservation of their ability to promptly
take care of their customers and assist in the
problems of war financing in their home communities. The banks of the district have
therefore avoided large holdings of their own.
The amount of Liberty bonds taken on
through failure to complete deferred payments
was insignificant as compared with the total.
At the end of the year the commercial banks
of the district were not holders of Liberty
bonds to a large extent or to a degree appreciably threatening their liquidity.
During the period in which Liberty bonds
can not be readily liquidated at par the policy
of the Federal Reserve Bank will be to accept
Government obligations as collateral for loans
upon a minimum rate basis, enabling member
banks to convert such holdings into cash or
credit, as occasion may demand.
KANSAS CITY.

APRIL 1,

1919.

DALLAS.

Any statement as to the period of carrying
"war paper" or paper secured by Government war obligations would be hazardous.
We do not think many banks will desire to
carry this paper for long periods, as most of the
banks make such loans at low rates of interest,
and mainly through patriotic motives. Of
course, the time required for the resumption of
normal conditions will be an important factor,
for, if money matters are not unduly strained
and conditions return to normal within a reasonable time, the banks will soon be able to get
rid of most of their "war paper." The period
of one year could probably be conservatively
fixed as the time for liquidating paper of the
character referred to. We believe the general
public appreciate the importance of holding
their Liberty bonds and paying therefor out of
their earnings. In extreme cases the assistance of banks will be sought.
This bank's p\olicy toward banks which have
assisted in the extensive financial program of
the Government will continue to be one of service, and the facilities of this institution will be
freely extended in every way consistent with
sound banking principles. At the same time
it ha-? been the practice of our officials to discourage undue expansion and restrict advances
to legitimate neech until the return of normal
conditions. We desire to assist the banks in
the period of financial readjustment upon
which they are now entering, and confidently
expect the transition to be made without undue disturbance.

The winter wheat crop to be marketed in the
spring and the cattle which will come on the
SAN FRANCISCO.
market at that time will have a tendency to
As the products of this district are primarily
ease the situation to some extent, but this will
be largely offset by the fifth Liberty loan to be agricultural, the sale for which has been cersold at that time. With fair crops, consider- tain, and as there has been some tendency to
able liquidation should be possible in the fall shorten the time of commercial credit and enforce prompt payment, part of the loans of the
of 1919.
The policy of the Federal Reserve Bank banks in this district will liquidate rapidly.
must obviously be liberal when special condi- Borrowing upon Government obligations has
tions require it, but interest rates should be extended to considerable proportions, but these
held firm and incline upward in order to prevent loans are being gradually liquidated. In prothe already apparent tendenc}^ for banks to I portion to their total resources, investments by
extend themselves imprudently for new business \ banks in Liberty bonds are comparatively
and profits.
| small, those of all national banks, through
With the Government guaranty of price for j which practically half of the subscriptions were
wheat and the abnormally large acreage which I received, amounting to $56,854,000 on Novemhas been seeded, and with the present ideal I ber 1, 1918, as compared with $1,360,534,000
weather conditions, the feeling is justified that ji total resources, S691,176,000 total loans and
next year should help materially in restoring discounts, and $321,723,000 securities held.
the liquidity of banks in this district.
j Liberty bonds held by national banks represent




APIIIL 1,

FEDERAL RESERVE BULLETIN.

1010.

329

only 4.9 per cent of $1,154,345,850 of Liberty loan was issued by the Treasury Department
bonds sold in this district.
on March 7:
The rate at which banks are liquidating their
borrowings is shown by the reduction in redis- By virtue of the authority conferred upon the Secretary
counts of commercial paper held by the Fed- of the Treasury by section o of the Victory Liberty Loan
eral Reserve Bank from $49,289,000 on Sep- act, approved March 3, 1919, the privilege of converting,
tember 13 to $39,337,000 on November 8, to 4 per cent bonds of 1932-1947 of the first Liberty loan
$30,038,000 on November 30, and $33,732,000 converted and 4 per cent bonds of 1927-1942 of the second
on December 31. This compares with $23,- Liberty loan into 4{ per cent bonds., which, privilege arose
464,000 held on January 1, 1918. Similarly, on May 9,1918, and expired on November 9,1918, is hereby
borrowings on Government obligations are be- extended, subject to the provisions of this circular, for the
ing reduced, member banks7 collateral notes, period beginning March 7, 1919, and ending at such date
practically all secured by Government obliga- as may be fixed by the Secretary of the Treasury on six
tions held by the Federal Reserve Bank, de- months' public notice given in such manner as he shall
creasing from $61,561,000 on October 10 to prescribe. Said conversion privilege is described in
$44,136,000 on November 30 and $45,027,000 Department Circular No. 114, dated May 9, 1918, and the
provisions of Titles I, IX, X, and XI of said circular,
on December 31.
If the next Liberty loan is not offered before except as herein otherwise provided, shall apply to and
April or May, it seems probable that the prin- govern said conversion privilege as hereby extended.
cipal part of the Federal Reserve Banks7 pres- This circular does not apply to any conversion privient loans based on Liberty bonds will be liqui- lege which arose in favor of the 3} per cent bonds of 1932dated by that time. But meanwhile new loans 1947 of the first Liberty loan.
will presumably appear based on the succeeding Conversions in the exercise of the conversion privilege
issues of certificates of indebtedness. It seems as hereby extended may be effected by presentation and
probable, therefore, that borrowings from the surrender of 4 per cent bonds of the First Liberty loan
federal Reserve Bank on paper secured by converted, and 4 per cent bonds of the Second Liberty
Government obligations will continue in sub- loan, to the respective Federal Reserve Banks in Boston,
stantial amount until after the next Liberty j New York, Philadelphia, Cleveland, Richmond, Atlanta,
loan and that there will be steady liquidation Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and
of such paper thereafter. There seems reason San Francisco, or to the Secretary of the Treasury, Divito expect that they will be practically elimi- sion of Loans and Currency, Washington. Such bonds
so presented and surrendered for conversion must be
nated" during the coming year.
It is and has steadily been the policy of the accompanied by "Request for conversion" in the form
Federal Reserve Bank to assist its member prescribed by the Secretary of the Treasury (Form L. & C.
banks in meeting the special demands made 25 A hereto attached, copies of which may be obtained
upon them. This has been particularly true in from any Federal Reserve Bank or from the Secretary of
connection with unusual requirements for han- the Treasury), signed with the respective autograph signadling crops. Rarely has it been necessary to tures of the holders of the bonds presented for conversion.
criticise the attitude of a rediscounting bank. Registered bonds will be delivered upon conversion of
An occasional bank, however, has shown a de- coupon bonds if written request therefor be submitted
liberate determination to use Federal Reserve with request for conversion. Coupon bonds will be deBank funds for extending its business by tak- livered upon conversion of registered bonds if the regising on new loans much as if funds obtained by tered bonds presented for conversion are duly assigned to
rediscount were new deposits. In such cases "The Secretary of the Treasury for conversion and exthe desirable course is pointed out, with such change for coupon bonds" on the form appearing on the
back thereof; such assignments must be duly executed in
insistence as the case seems to require.

Extension of Conversion Privilege to First Liberty
Loan.

The following circular addressed to holders
of 4 per cent gold bonds of 1932-1947 of the
first Liberty loan converted and 4 per cent
gold bonds of 1927-1942 of the second Liberty




the presence of an officer authorized to witness assignments
of United States registered bonds. Bonds will be delivered
so far as practicable in like denominations as the bonds
upon the conversion of which they are respectively issued,
unless written request for delivery in other denominations
be submitted with request for conversion. Changes of
ownership will be permitted upon conversions of registered,
bonds if the registered bonds presented for conversion have
been duly assigned for transfer in accordance with the
regulations governing assignments of United States registered bonds. Changes of ownership of registered bonds,

330

FEDERAL RESERVE BULLETIN.

Antir. 1, 1910.

however, can not be effected when the transfer books for I directly to the holders of the bonds surrendered for conthe loan in question are closed, and requests for conversion j version at the time of such surrender, or in the absence of
involving such changes of ownership received during any j other written instructions and remittances to cover exsuch period when the transfer books are closed will be penses, will be expressed at the owners' risk and expense.
effective during such period only as presentations for con- Registered bonds to be delivered upon conversions, unless
version, and the changes of ownership will not be effected | delivered directly to the registered owner or his duly
until the reopening of the transfer books. The transfer I authorized representative, will be delivered by registered
books for the first Liberty loan converted will be closed mail without expense to, but at the risk of, the registered
from May 16 to June 15 and from November 16 to December owner, unless otherwise directed in writing. As the cost
.15, and for the second Liberty loan from October 16 to ! of transportation of coupon bonds by express is greater
November 15 and from April 16 to May 15, in each year, in than by registered mail insured, holders of coupon bonds
desiring to present them for conversion are advised to coneacli case both dates inclusive.
For the purpose cf computing the amount of interest sult with their own banks or trust companies, for arrangepayable, bonds presented for conversion under this circular ments may be made, as between Federal Reserve Banks
shall be deemed to be converted on the dates for the pay- and incorporated banks and trust companies, for transporment of the semiannual interest on the respective bonds so tation to and from Federal Reserve Banks by registered
presented for conversion next succeeding the date of such mail insured of the bonds to be converted and of the bonds
presentation. Interest will be paid on registered bonds to be issued upon conversions, the charges in .each case to
presented for conversion at the rate of 4 per cent per an- be paid by the respective holders and to be remitted by
num to the semiannual interest payment date next suc- the incorporated banks and trust companies to the Federal
ceeding the date of presentation for conversion, to the Reserve Banks. Information concerning any such, arrangeregistered owner of the bonds presented for conversion, or ments will be furnished by Federal Reserve Banks to inin case change of ownership has been effected upon the corporated banks and trust companies.
conversion before the closing of the transfer books in anticiThe Secretary of the Treasury reserves the right at any
pation of such semiannual interest payment, to the regis- time to suspend or terminate the extension of the convertered owner of the bonds issued upon such conversion. sion privilege made by this circular upon six months'
Registered bonds issued upon conversion will bear interest public notice given in such manner as he shall prescribe.
at the rate of 4J per cent per annum from the semiannual The right is also reserved to make from time to time any
interest payment date next succeeding the date of presen- supplementary or amendatory rules and regulations govtation for conversion. In the case of coupon bonds pre- erning the exercise of the conversion privilege hereby
sented for conversion, all coupons maturing on or before the extended, information as to which may be obtained from
semiannual interest payment date next succeeding the the Treasury Department or through any Federal Reserve
date of presentation for conversion must be detached and Bank.
collected in ordinary course when due. All subsequent
CARTER GLASS,
coupons must be attached. Coupon bonds issued upon
Secretary of the Treasury.
conversion will bear interest at the rate of 4£ per cent per
annum from the semiannual interest payment date next [Treasury Department. Loans and Currency. Form L. and C. 25 A.
BEQUEST FOE, CONVERSION.
succeeding the date of presentation for conversion, and
will have interest coupons attached thereto covering semi- Only one series of bonds may be entered on this form., and separate form]
must also be used for (1) coupon bonds, and (2) registered bonds.
annual interest payments up to and including the respecDated
,19 .
tive maturities of such bonds: Provided, however, That
until June 15, 1920, in the case of bonds of the first Liberty To the Secretary o) the Treasury:
The undersigned herewith presents and surrenders—
loan converted, and until May 15,1920, in the case of bonds 4 per cent gold bonds of 1932-47 of the first Liberty loan converted, S
of the second Liberty loan, coupon bonds issued upon con- 4 per cent gold bonds of 1927-42 of the second Liberty loan, S
version will have coupons attached thereto covering semi- in {rcifcjfojjed} * o n n » a n d requests that the same be converted into an
annual interest payments only uj) to and including June equal face amount of 4-1 per cent gold bonds according to the terms of
Treasury Department Circulars No. 114, dated May 9, 1918, and No.
15, 1920, and May 15, 1920, respectively, the bonds so 137, dated March 7, 1010. Special instructions, if any, are given by the
undersigned on the back hereof.
delivered being exchangeable on and after said dates,
respectively, into a new bond or bonds having coupons Autograph signature of holder in full
attached thereto covering semiannual interest payments Address, number and street
(For delivery of bonds.)
up to and including the respective maturities of such
City or town
bonds.
State
No adjustments of interest will be required upon con- County
1. Registered bonds will be issued upon conversion of coupon, bondsversions of either registered or coupon bonds under this I and bonds will be delivered in a different denomination or denominations from the bond or bonds surrendered, if the appropriate form of
circular.
request appearing on the back hereof is duly executed.
be issued upon conversion registered bonds
Transportation charges upon bonds presented for con- if 2. Coupon bonds will presented for conversion areofduly assigned to
the registered bonds
version must be paid by the holders. Coupon bonds to be "The Secretary of the Treasury for conversion and exchange for coupon
bonds'' in the presence of an officer duly authorized to witness assigns
delivered upon conversions will either be delivered ments of United States registered bonds.




APRIL 1,1019.

FEDERAL RESERVE BULLETIN.

3. Changes of ownership will he permitted, subject to the provisions
of said circular No. 137, upon conversions of registered bonds if the
registered bonds presented for conversion have been duly assigned for
transfer in the presence of an officer duly authorized to witness assignments of United States registered bonds.
Following forms to be used only for giving special instructions:
1. If registered bonds are desired upon conversion of coupon bonds use
this form.
Referring to S
, face amount, of coupon bonds surrendered herewith for conversion, the undersigned hereby requests the issue of registered bonds inscribed in the name of
(Mr., Mrs., or (First name in full.) (Middle name or (Last name.)
Miss.)
initial.)
(Or complete legal name of corporation, partnership, or other person.)
Address for interest checks
(Give full address.) (Number.) (Street.)
(City!)
(State.")"
Signature of person signing request for conversion
2. If delivery is desired of bonds in a different denomination or denominations from the bond or bonds surrendered use this form.
Referring to $
,l face amount, of bonds surrendered for conversion
herewith, the undersigned hereby requests delivery of bonds upon
conversion as follows:
Number Denominations. !
of bonds.
SoO
100
500
1,000
",000
10,000
250,000
2
100:000

...
...
...
;
...
i...
,.
j.
:.

Total.

331

ily available, it has been believed desirable in
the following pages to present brief descriptions of the more prominent systems of indexes of business conditions which have been
developed. As is well known, both the Babson
and the Brookmiro services were instituted
several years ago and represent pioneer work
in the field. Both are attempts to select certain data believed to possess peculiar significance for the study of business conditions and
to combine these data so as to afford a composite picture of general business conditions.
On the other hand, both of the recent studies
of Profs. Persons and Michell have thus far
been confined to the former phase of the work,
no attempt at combination being made.
BABSON'S BUSINESS BAROMETER.

The Babson composite plotis based upon three
classes of data, designed to show (1) mercantile
conditions, (2) monetary conditions, and (3)
investment conditions. The first named comTotal (1)
I $..
prises statistics of immigration (designed to
1
These amounts must be the same; otherwise request may be disre- show unskilled-labor conditions), value of
garded.
2
building permits, liabilities of failures (deCoupon bonds are not issued in these denominations.
signed to show condition of retail trade), and
Signature of person signing request for conversion
bank clearings. The monetary group includes
Bradstreet's index number of commodity
prices (designed to show domestic requireIndexes of Business Conditions.
ments for money), total foreign trade, foreign
official bank
of the
During past months the Federal Reserve moneyof rates (theBank of France,rates ReichsBank England,
and
Board has devoted considerable attention to bank being averaged), and domestic money
the construction of a series of indexes of general rates (designed to show the confidence of the
business conditions. Careful selection has been banking community). The investment group
made from among the data available, and ef- includes crop yields, based upon corn, wheat,
and cotton,
railforts made to remedy deficiencies in the exist- roads, and gross earnings of 10 leadingbased
stock-market conditions,
ing material. The results have been pre- upon monthly averages of high and low quotasented from time to time in the FEDERAL R E - j tions for 20 railroads and 20 industrial stocks.
SERVE BULLETIN as the various indexes have j As the above statistics are expressed in many
been developed. Of late, considerable atten- i different units, for example, bank clearings in
tion has been directed to the general subject of | dollars, cotton production in bales, etc., an intermediate set of "scale figures" has been
business indexes, the most recent system to be de- introduced. The scale figures are constructed
veloped being that of Prof. W.M. Persons for the as follows: Figures for a certain month for the
Harvard University Committee on Economic years 1898 to 1908 are compared, and the
Research. The Canadian Bureau of Statistics highest and lowest are selected. Deciles are
then calculated for the interval; that
also undertook a preliminary investigation of ference between highest and lowest is, the diffigures is
available indexes of business conditions in divided by 10 and the figure thus obtained
Canada during the past year. Inasmuch as added, successively, to the lowest figure and
the results of these investigations are not read- figures derived therefrom. The scale figures




:
|

1

111260—19

5

332

FEDERAL RESERVE BULLETIN.

APBIL 1,

1919.

Both seasonal variation and secular trend
obtained in this manner for successive months
are set in rows, one row for each month, and are mathematically eliminated from the data
zero is placed over the column whose average used in the final presentation before they enter
most closely approximates conditions in 1903-4. into the Brookmire barometric chart. The inPositive index figures, increasing by tens, are dex of seasonal variation is determined by diplaced above the larger amounts; negative viding the figures for any given month, "M,"
index figures above the smaller amounts. Such for N number of years by the figure for the averscale figures and accompanying index figures age month in N years. To eliminate seasonal
are calculated for each of the items noted variation in any given month the figure for the
above. Actual figures for the present period month is divided by the seasonal index for that
are compared with scale figures and an index | particular month. In order to eliminate secufigure calculated, expressing the position which j lar trend from any given factor, the rate of
figures for the present month would assume in secular trend (R) is first determined by dividing
the algebraic sum of increases or decreases for
the scale.
A separate summary figure is next obtained N years by the sum of the total factor for (N — 1)
for mercantile, monetary, and investment con- years (the year omitted being the final one).
ditions. The index figures for each of the To eliminate secular trend from any given year,
n
items included in a group are added, and the the actual figure is then divided by (1+R) .
Of the barometric charts, more than 100 in
sum divided by the number of items. It
should be mentioned however that bank clear- number, which have been constructed, in seekings, domestic money rates, and stock market ing statistical measures which move prior to
conditions are each assigned double weight. many factors which an economic service seeks
The sum of the three summary figures is then to forecast in its regular work, only the most
divided by 3, giving a final summary index fig- comprehensive, the United States barometer
ure which appears on the composite plot. The chart, is described here as an example of the
latter is made up each week on the basis of the method employed. This chart contains three
latest figures obtainable on each subject, and factors: (1) The index of banking funds; (2) the
thus monthly revision of the figures is made. index of security prices; (3) the index of general
Inasmuch as a considerable percentage of business.
all statistical factors show a tendency to in- j It is stated that these three graphs move in
crease or decrease from one year to the next; chronological order, the banking index rising
that is, a secular trend is noted in a large num- first, followed by the stock market index, and
ber of cases, allowance for this factor must be finally by the business index. A great rise in
made, in order that the fundamental move- the business index in turn produces a fall in
ment may not be obscured by the tendency of the banking index, and this is followed in turn
two lines to diverge where the secular trend is by the stock market index, and the business
different. In order to accomplish this, the index, and the cycle is ready to start again.
The banking index is based upon (a) the
secular trend is computed each year, although
it is not eliminated before combining the vari- total cash and reserves of New York Clearing
ous series. The determination of the slope of House banks; (b) the percentage of these rethe line of secular trend, which thus changes serves to loans; (c) the percentage of loans to
from year to year, is based on the assumption deposits; (d) the rate on first class commerthat areas above and below this line must be cial paper in New York. The purpose of this
index is to show the liquid funds available for
equal.
speculation in securities, or for working capital
THE BROOKMIRE ECONOMIC SERVICE.
in business.
The stock market index is based upon an
It is stated that the theory of forecasting average of 20 industrial and 20 railroad stocks.
upon which the methods followed by the The reason for using this index is twofold.
Brookmire Economic Service are based, postu- First, to show to the stock market purchaser
lates a chronological sequence of business events. just how much of prosperity or depression is
The data for most of the barometric indexes being discounted by current stock prices, and
constructed by this service have therefore been in the second place, since it moves after the
selected because movement in them occurs in banking index and before the business index,
point of time prior to some price or other sta- to afford the business man a reliable secondary
tistical factor which it is desired to forecast, indicator as to the time when a change in the
rather than in an attempt to portray the entire average of business levels and commodity
field of business conditions.
prices may be expected.




APRIL 1, 1910.

FEDERAL RESERVE BULLETIN.

The business index is composed of the following factors:
(a) Pig iron production.
(b) Building permits.
(c) Unfilled steel tonnage. (United States
Steel Corporation.)
(d) Merchandise imports.
(e) Bank clearings of the United States.
(f) Bank clearings outside of New York.
The purpose of this graph is to give a composite picture of the movement of actual conditions in trade and manufacturing as distinguished from bank and investment conditions
of the country. This index is also stated to be
a forecaster of coming periods of low or high
money rates, for its rise rapidly exhausts the
supply of liquid capital, while its fall releases
its capital again, so that the business index
forms a forecaster for coming movements of
the banking index.

333

3. Bank clearings outside of New York City.
4. Bradstreets' index of commodity prices.
5. Imports of merchandise into United
States, values.
6. Values of building permits issued for 20
leading cities.
7. Gross earnings of 10 leading railroads.
8. Number of shares sold on the New York
Stock Exchange.
9. Unfilled orders of United States Steel
Corporation.
10. Tonnage, less lake traffic, of vessels
entered in the foreign commerce of the United
States.
11. Bradstreets' number of business failures.
12. Rate of interest on 10 American railroad
bonds.
13. Rate of interest on four to six months
commercial paper.
14. Rate of interest on 60 to 90 day commercial paper in New York.
THE WORK OF PROF. PERSONS.
15. Rate of interest on call loans at the New
The December (1916) issue of the American York Stock Exchange.
Economic Review contained an article by
The first step in the analysis is the isolation
Prof. Warren M. Persons on the construction | of the various types of fluctuation which are
of a business barometer based upon actual found in the data. As a working hypothesis,
data. Prof. Persons has since continued his these are considered as fourfold: (1) A longwork, and the first number of the Review of time tendency, which in technical language is
Economic Statistics (January, 1919) contains termed the secular trend; (2) a cyclical movean exhaustive discussion of certain phases of ment superimposed upon the first, the extremes
the work, more particularly with reference to being found in periods of prosperity and dethe question of method to be employed in pression; (3) a seasonal movement within the
treating the data.
year; and (4) residual variations. The four
The work represents an attempt to apply to types of fluctuation are, however, not uniform
statistical series believed to afford an indica- in the different series, and in consequence indition of business .conditions the refined methods vidual treatment of each series is required. I t
which have been developed, largely since the becomes necessary first to measure the secular
opening of the present century, and which have trend. This is best accomplished in the authus far found their use largely in other fields, thor's opinion by fitting a straight line or curve
being employed in particular by the English to the graph representing the original series.
biometricians. This at the outset limits the It is recognized, however, that this can be dechoice of data, as it is necessary in order to termined only for the past period, and in cerapply these methods to obtain such figures, tain cases may by no means afford a good basis
both annual and monthly, for a considerable for estimating future trend. This appears to
period of time. An investigation of this char- be true for certain series at the present time.
acter then becomes an examination of the The determination of normal seasonal variamovements of data for certain wrell-known tion in the data is next undertaken. The
items which have usually been selected as process is involved and inay conveniently be •
indexes of business conditions. In the earlier divided into the following steps: (1) Relative
study, based upon yearly data, 25 series were figures are first calculated expressing the absoconsidered, while in the present investigation lute figure for each month as a percentage of the
only 17 series of annual data for the years 1879- absolute figure for the previous month; (2)
1913 and 15 series of monthly data for the medians of the month-to-month percentages
years 1903-1916 were included. The 15 series are then calculated for each of the 12 months;
(3) the medians are expressed as a continuous
are as follows:
series using January as base; (4) they are then
1. Bank clearings of New York City.
2. Tonnage of pig iron produced in United adjusted so that the discrepancy between consecutive January relatives (due to the secular
States.




334

FEDERAL RESERVE BULLETIN.

APRIL 1, 1019.

tread) is zero; (5) they are changed to a new CANADIAN INDEXES OF BUSINESS CONDITIONS.
base by dividing each item in the fourth series
During the summer of 1918 a preliminary
by the arithmetic average of that series. The
problem then remains of measuring cyclical and survey of available indexes of business condiresidual fluctuations. Inasmuch as the theory tions in Canada was undertaken for the
of the periodicity of business cycles is rejected, Dominion Bureau of Statistics by Prof. II.
and hence no fixed length of line may be set, it is Michell, of Queen's University, Kingston,
concluded that cyclical fluctuations can not be Ontario, Canada. Inasmuch as Canadian conisolated by statistical methods from the irregu- ditions, while on the whole bearing considerable
resemblance to those prevailing in this country,
lar fluctuations.
The next step is to correct the original data have not been the subject of the same amount
for secular trend and seasonal variation. This of study, it is* believed that a somewhat more
is done as follows: Each of the monthly ordi- detailed account of the investigation will prove
nates of the secular trend is multiplied by the of interest.
The investigation was concerned primarily
index of seasonal variation for that month,
obtained in the manner stated above. The with an examination of the movements of Canaresulting product is subtracted from the cor- dian data for certain of the well-known items
responding item of the original series, and the which have usually been selected as indexes
differences are expressed as percentages of the of business conditions. The field of choice
respective ordinates of the secular trend. was necessarily somewhat limited, due to the
Finally the percentage deviations of the various fact that even for certain of these series data
series thus obtained are expressed in terms of were not available for the entire period since
their respective standard deviations, in order 1905, which had been chosen for the purpose
that the deviations for different series may be in hand; also the fact that certain data, such as
copper and pig-iron production, do not possess
expressed in comparable terms.
The question then remains as to the signifi- significance for Canadian economic life in any
cance of the various series. For example, on measure comparable with their importance in
the basis of past experience, what series have the United States.
Of the 16 series examined the following
constituted good indexes of general business
conditions % Again, have movements in cer- nine were, tentatively accepted as affording
tain series preceded movements in other series, satisfactay indexes, no attempt being made
and if so, in what degree ? This problem was to combine the series mentioned:
1. Stock prices.
attacked in the earlier article in which yearly
2. Commercial failures.
data were used. The method employed was
3. Immigration.
to measure, by means of the Pearsonian coeffi4. Imports into Canada.
cient of correlation, the degree of correspond5. Railroad gross earnings.
ence between various series and wholesale
prices, which was chosen " because of the con- 6. Savings deposits.
7. Bank clearings.
sensus of opinion of writers on business cycles
8. Building permits.
that such cycles are preeminently characterized
9. Wholesale prices.
by price movements." It was found that the
It will be seen that the period examined is
following series fluctuated concurrently with
of sufficient length to illustrate each of the
wholesale prices:
phases of the business cycle, though especial
1. Gross receipts of railroads.
interest of course attaches to conditions since
2. Net earnings of railroads.
the outbreak of the war in 1914.
3. Coal produced.
Special attention has been directed in the
4. Exports from the United States.
study to the sensitiveness of the various series,
5. Imports into the United States.
and their consequent albility to afford an early
6. Pig iron produced.
indication of changes in general business con7. Price of pig iron.
ditions. From this point of view, a series
8. Immigration.
It should be noted, however, that these gen- obtained from quotations for 10 standard
eralizations are based only upon yearly not Canadian stocks, representative of various
1
monthly data, and that moreover the question important industries, likewise a series of
still remains of the applicability of these statistics of business failures, appear to have
generalizations based upon past data to the 1 One steel, one milling, and one textile company are represented, the
present.
remainder being banking, transportation and public utility enterprises.




A P R I L 1, 1011).

FEDERAL RESERVE BULLETIN.

ranked highest. The decline of the former
commenced in September, 1912, the rise of the
latter shortly thereafter, while the reverse
movements commenced in May and April,
1915, respectively. Similar conditions obtained in 1907, highest and lowest points for
the stock prices series being in February and
November, respectively, while for failures the
increase commenced in October, 1908, and
continued until August, 1908, the greatest
rate of increase being in the latter months of
1907. Bank clearings have also shown a considerable degree of sensitiveness, commencing
to fall soon after the opening of 1913, and to
rise again in May, 1915. The same is true of
building permits in the four western Provinces.
Such operations are evidently more speculative in nature, and more sensitive to change,
both actual and anticipated, in general conditions, in the western than in the eastern Provinces. The decline in the former commenced
in October, 1913, exactly one year before the
eastern figures, and the checking of the decline
in 1915 is remarked in the western figures
several months prior to the eastern. Moreover, western building, which prior to 1913
was considerably in excess of eastern, fell
until in 1915 it'was practically negligible in
amount, while figures of eastern building still
continued around the $25,000,000 mark.
This marked divergence between eastern and
western figures opens up an interesting and
important field of investigation, and if a comprehensive series could be constructed for the
agricultural west as opposed to the industrial
east, valuable results might be arrived at.
Unfortunately this is not possible, but several
highly significant series of statistical tables
are available, notably in bank clearings. Here
the same phenomenon as was seen in building
permits presents itself, the western figures
showing more sensitiveness than the eastern.
Thus in January, 1919, while the eastern clearings still show a fair degree of buoyancy, the
western figures are beginning to drop, notably
for the Winnipeg clearing house. Steps are
being taken to push this investigation further
by taking the figures for the two representative
houses in east and west, Montreal and Winnipeg, as far back as possible by months commencing with January, 1894. Gross earnings
of the three large Canadian railroad systems
reached their high level in June, 1913, and
continued to decline until April, 1915. While
imports commenced to decline in September,




335

1907, reaching their low level the middle of
the following year, and the fall in 1913 in
March, the rise commenced again in March,
1915, prior to the increase in certain of the
other items noted above. Although figures
of imports, in the opinion of the author of the
report, in general may be accepted as affording
an indication of business conditions within a
country superior to that afforded by figures of
exports, it is conceded that it appears open to
doubt whether this still obtains with the change
which has taken place since 1915 in the relative values of imports and exports. Prior to
1914 the latter figures were comparatively
inelastic, but the phenomenal rise since that
time, as well as the fall since September, 1917,
have been far greater than in the case of imports. Export figures, however, are subject
to a much wider margin of error, and conclusions based upon tnem must therefore be
accepted with extreme caution. Figures of
immigration and of savings are also found to
fluctuate in conformity with business conditions, though in the case of the latter variation
is relatively slight, and appears practically
only in the rate of growth. The other series
examined were rejected as less satisfactory
for the purpose in hand, and mention of them
is omitted here.
It is interesting to note that, while the above
series moved in considerable harmony with each
other up to approximately last year, of late
there has been considerable diversity exhibited,
certain of the series continuing upward, while
others, accorded equal recognition as guides to
general business conditions, have moved in the
reverse direction. In other words, in passing
from the phases which may conveniently be
termed historical to a consideration of the
present situation, the difficulties multiply and
the part played by judgment increases greatly.
This, of course, is no more true of Canadian than
of American experience. Our series have
shown similar diversities in direction of movement. On the whole, it appears that Canadian
parallels American experience somewhat closely.
In the case of certain of the data, the correspondence is seen also in the seasonal variations.
To mention but a single instance, the similarity
is especially pronounced for exports,^ both
countries having a heavy movement of agricultural products toward the close of the year,
though in the case of Canada there is also a rush
to get grain to the seaboard in advance of the
closing of navigation for the winter.

336

FEDERAL RESERVE BULLETIN".

APRIL 1;

1919.

The investigation is still under way, and the
Another feature of the computation requires
foregoing results are merely tentative. A de- explanation. Such raw materials as rice and
tailed mathematical analysis of the data is now potatoes are used for the most part in their
being made, more particularly for the purpose | original state, whereas other articles like
of measuring the divergence of the yearly and | wheat, cotton, and pig iron undergo a manumonthly figures from the normal secular facturing process before entering into contrend, and a full and detailed report on the sumption. Not to take account of this fact
subject will be published in due course by the would give a disproportionate importance to
Dominion Bureau of Statistics at Ottawa.
the agricultural staples. A series of " fabricating factors," based on the 1914 Census of
Manufactures, was therefore prepared. These
Increase In the Production of Raw Materials, factors represent the percentage borne by the
value added by manufacture to the cost of
1913-1918.1
materials. The value added by manufacture
Much interest attaches to the problem how as defined by the Bureau of the Census is the
far the rapidly expanding volume of business in difference between the value of the manufacthe last six years has been due to an increase tured product and the value of the materials
in the volume of physical goods produced and entering into manufacture. While these fachow far it represents merely a rise in prices.
tors have a wide margin of uncertainty it was
On account of the scantiness of statistics of considered better to use rather rough estimates
production this problem can not be studied than, to introduce no correction whatever
in a thoroughly satisfactory manner. The under this head.
best line of attack in view of the material availBeside the index number of the available
able is to take production and import figures supply of raw materials, there was calculated
of staple raw materials and interpret the from data for the same 90 articles, an index
results on the assumption that the total amount of the increase of prices, in which prices of
of all goods produced varies roughly as the each year were weighted by production plus
quantity of these raw materials produced in, imports in 1917. Finally, an index of the
or imported into, the United States.
current annual values of the raw materials
In the preparation of the subjoined tables produced and imported was computed. In
estimates of production, or imports, or pro- this series, the annual supply of each staple
duction plus imports, as the case required, by was multiplied by the annual price.
years, 1913-1918, inclusive, were secured for
In all three series of indices the commodities
90 staples, and in calculating the index number were classified as coming from farms, forests,
from these figures the supply available each or mines. The actual figures in millions of
year was weighted by the average price in 1917. dollars have little significance, except as raw
These 1917 weights were applied without material for the index numbers, which were
change to the production figures of each of the computed with 1913 as the basis.
six years covered. The year 1917 was chosen
In the table for "all commodities" the genas the base year for weighting because the eral result of the study is indicated in the
present computation was made in connection form of three sets of index numbers. The
with the investigation into prices during the first set, showing an increase from 100 for
war, conducted by the Price Section of the 1913 to 116 for 1918, indicates the increase in
War Industries Board.
the physical volume of output, the second set,
In this larger investigation the prices of all showing an increase for the same period from.
the commodities included—some 1,450 in 100 to 192, indicates the rise in prices, while
number—were weighted by production plus the third set, showing an increase from 100 to
imports in 1917, in order to reflect war-time 225, reflects the combined effect of increase in
conditions.
output and rise in prices for the period under
i Contributed by Wesley C. Mitchell, of the War Industries Board. review.




APEIL 1,

FEDERAL EESEEVE BULLETIN.

1910.

Index numbers of the production of raw materials, of the
prices of raw materials, and of the annual value of raio
materials produced, by years, 1913-1918.

337

War Operations of the Bank of France.

The last annual report of the Bank of France,
on which the present review is based, contains
an account not only of the operations of the
ALL COMMODITIES (90 COMMODITIES).
bank for the }xear 1918 but also summarizes in
an interesting account the operations of the
bank during the entire period of the war.
Aggregate value.
Index numbers.
On December 24, 1918, the date of the balance sheet presented in its last annual report,
Yearly
Yearly
Yearly
Yearly
prices
produc- Yearly
prices
the Bank of France held a total amount of gold
prices
times
tion
times
times
tlmos
yearly
times
yearly I and silver in Paris,, at its branch offices, and
times
1917 propro1917
™£f 1917t ipro- pro- I abroad of 5,796 million francs. This amount
dut on
prices. duction. duction. prices. '
- duction. |
| consisted of 3,440 million francs of gold and 318
1913.
100 I million francs of silver in vault and of 2,037
S?30,375 $19,973 517,390 I
100
100
1914.
30,207
99
98 ' million francs of gold held abroad, 1,955 millions
96
19,224
16,694 !
1915.
32,482
107
106
21,418
18,455
107
191633,700
111
This gold held
23,363
22,785
131 of which was held in England.
117
1917.
3-1,748
114
31,748
34,748
200
174
1918.
35,169
116
38,251 i 39,153
225 in England represents loans by the bank to
192
the British Exchequer and the Bank of England, to be repaid gradually as French obligaFARM PRODUCTS—VEGETABLE (25 COMMODITIES).
tions to England for supplies and other materials are liquidated. Among the bank's
1913.
100
$14,151
100 1
10!) assets there is also shown an item of 1,036 mil$8,798 , $8,096
1914.
8,351
99
15,053
8,051
95 j
106
1915.
10,326 i 8,900
111 lion francs standing to the credit of the bank
15,818
112
117
1916.
114
9,781 . 9,189
14,142
100
111
1917.
188 on the books of the United States Treasury.
15,188 i 15,188
15,188
107
173 !
1918.
206 Other credits held abroad amounted to 1,300
14,997
16,843 1 16,694
191 |
106
million francs. The largest asset item is represented by the 17,150 million francs advanced
FARM PRODUCTS—ANIMAL (13 COMMODITIES).
to the French Government and the 3,526 mil1913.
$S,011 ! $5,618
985
100 lion francs of short-term government securi100 '
100
1914.
7,987 ; 5,785
100 1
102 ties advanced by the French Treasury to allied
;,
> 091
103
1915.
8,600
5,707
107 i
108
102
• > 387
1916.
9,116 I 6,461
Of
114 '
129 governments and discounted by the bank.
115
455
6,
1917.
9,021 ; 9,021
181
113 !
9!021
161
1918.
10,105 " 10,869
246 the total assets shown as 34,114 million francs
126 i
12,249
193
the amount of Government securities held by
the bank was no less than 60 per cent. Nearly
FOREST PRODUCTS (23 COMMODITIES).
90 per cent of the total liabilities of the bank is
represented by the 30,250 million francs of
S941
1913-... .
$982 !
100
SI, 329
100
100 bank notes in circulation.
The only other
1914....
1,285
889 i
877
97
93 i
91
1915....
1,281
878 j
92 !
870
96
89 liabilities of any magnitude were current and
1916....
1,126
1,521
1,229 !
114
120
125 deposit accounts in Paris and at the branch
1917....
1.481
1,481
157
1,481 !
111
151
1918....
1,635
174 :
i;3i3
1,445 !
99
147 offices amounting to 2,366 million francs, and
the current account of the Treasury, amounting
to 112 million francs.
MINE PRODUCTS (27 COMMODITIES).
In the early months of 1914 the bank's dis1913... - S6, 834
counts had fallen as low as 200 million francs
84,591
1914...
4,183
5,839
as the result of slackened business activity and
1915...
4,485
6,733
1916....
5,959
8 871
the prevalence of payments in cash. In 1917
1917...
8,993
8,993
1918...
8,828 !
8,695
the average discounts had risen to 606 million
and in 1918 to 1,086 million francs.
At the time of the declaration of the moraFISHERIES PRODUCTS (2 COMMODITIES).
torium at the outbreak of the war the total
i
debts affected amounted to 4,476 million francs.
1913....
$50 i
$25
S20
100
100
100
1914....
43 i
28
19
86
112
95 This amount was reduced to 1,028 million
1915....
5® •
30
23
100
120
115
1916....
50 i
36
27
100
144
135 francs by December 24, 1918. The decrease is
1917....
65 •
65
65
130
260
325 due largely to the decree of December 29, 1917,
1918....
59
76
70
118
304
350
and the law of July 26, 1918, which lifted




[Millions of dollars.]

;

!

r>

!

;

338

FEDERAL RESERVE BULLETIN.

the moratorium for beneficiaries of war profits
and for residents in the interior of the country
who had been able to continue agricultural
operations. A further lifting of the moratorium as conditions permit is recommended
by the bank.
Advances on securities, which were 729 millions during 1913, rose during the first two
years of the war to 1,222 millions in 1916, but
owing to an abundance of liquid funds, declined to about 1,000 millions during 1918.
The foreign exchange activities of the bank
may be summarized as follows: During the
first months of the war the bank bought foreign
exchange in order to assist exporters in realizing on their foreign accounts, but after this first
period the bank became a large seller of foreign
exchange. A representative of the bank was a
member of the commission to the United States
in 1915 which, jointly with England, arranged
for the loan of 500 million dollars. In 1916 an
agreement was made with England which
caused a decline of the premium on sterling
exchange from 13$ to 3 per cent and of dollar
exchange from 16 to 5 per cent between 1916
and the present time. Premiums on neutral
exchanges remain high, however, ranging from
10 to 14 per cent.
No gold has been exported since the United
States entered the war. The total loss of gold
in vault during the war amounted to 3,022
million francs, of which 1,955 million was
loaned to England, as explained above. A
first repayment of 58 million francs has been
made on account. Shipments of gold to the
United States prior to 1917 helped to create an
easy money market in that country, enabled
the bank to borrow money at lower rates in
the United States and to buy, during the
period of the war, about 9,000 million francs of
foreign exchange, mostly in England. The
outflow of gold prior to 1917 was offset in part
by deposits of the public, and during the early
months of the war by some purchases of gold
abroad, the total additions amounting to
about 2,400 million francs. The total gold
stock of the bank, including the 1,955 million
lent to England, was 5,477 millions at the end
of December, 1918, as compared with 4,141
millions on July 30, 1914.
Loans to the Government, which had been
authorized by Parliament up to a maximum
of 21,000 millions, had actually reached a total
of 17,150 millions at the end of 1918. During
the war the Government was able to reduce
its debt to the bank bty 8,850 millions from the
proceeds of the great popular loans and by




APRIL 1, 1919.

transfer of a 200 million dollar credit on the
books of the United States Treasury in August, 1918. The bank attaches great importance to the American credit as a valuable
reserve.
In addition to the 17,150 millions of loans to
the French Government the bank carried, as
mentioned above, 3,526 millions of loans to
foreign governments, the two items amounting
thus to over 20,500 millions of immobilized
assets. The bank considers it its main duty
now to reduce these enormous unliquid assets.
The bank states that it realized from the
beginning the dangers of large note issues but
it had no alternative, and, pinning its hopes to
victory, it issued sufficient notes to cover the
Government's requirements, the total notes in
circulation on December 24, 1918, being 30,250
million francs.1
Great activity was shown by the bank in
cooperation with the Government in the floatation of war bonds, a,nd the total amount of war
bonds sold through the bank was about 33,000
million francs, in addition to which 25,000
millions of short-term war paper were placed
through the bank. Of the 30,000 millions of
the last loan, 45 per cent or over 13,000 millions
were subscribed through the bank. The bank
received 1,520,000 subscriptions, and the
amount actually realized was 9,479 millions,
representing 535 millions of " rente" or annual
interest. The issue of the fourth loan increased the gold reserves by 25 million francs
and enabled the Treasury to redeem 2,500
millions of its obligations to the bank. This
resulted in a decrease of the note circulation by
2,087 million francs between November 7 and
December 5 of the past year.
By a law passed December 20, 1918, the
bank's privilege to issue notes has been extended for 25 3^ears beginning January 1, 1921.
By the agreement of September 21, 1914,
ratified by the act of December 26 of the same
year, interest on the loans to the Government
will rise from 1 to 3 per cent after one year
following cessation of hostilities, the proceeds
from this interest to be applied to an amortization fund. The extension of the bank's charter
provides that the bank make a special contribution, in lieu of war-profit taxes, to be applied to
the amortization fund, this contribution to con1

This amount compares with the following:

Mar. 26,1914 (minimum for the year)
Bee. 24, 1914
Dec. 24,1915
Bee. 23,1916
Bee. 22, 1917
'.

Millions
of francs.
f>,743
10 043
13,216
16,580
22,336

stitute 50 per cent of the 1 per cent interest on
the loans to the French Government and 85 per
cent on the interest received on loans to foreign
governments. This law has been made retroactive, as of January 1, 1918. The amount to
be contributed by the bank toward the amortization fund prior to 1918—that is, for the period
August 1,1914, to December 31,1917—has been
arbitrarily fixed at 200 million, francs. Since
the passage of the law of December 20, 1918,
the bank has begun to make the prescribed
payments, and on the balance sheet of December 24 the amortization fund figures at 437
million francs. By this arrangement the bank
may be obliged to pay war-profit taxes for many
years after other enterprises will have become
exempt from payment of such taxes. The
agreement also carries a progressive scale of
taxes on circulation. (See text of act of Dec.
20, 1918, on p. 340.) The bank is also to pay
to the treasury an amount equivalent to the
total outstanding circulation of obsolete type
(blue without pink background), and of the
small notes of 20 and 25 francs issued prior to
1888. Furthermore, the bank is to pay the
Government the equivalent of any excess
dividend above 240 francs per share of stock
(of the par value of 1,000 francs).1 The
amount paid over to the Government as a tax
on circulation and as a surtax on dividends will
be applied by the Government to credit operations that will facilitate the industrial rehabilitation of the country.
Law Renewing the Charter of the Bank of France.
The Senate and Chamber of Deputies have passed and
the President of the Republic promulgates the following
law:
Article 1. The privilege granted to the Bank of France
by the laws of the 24 Germinal, year XI, April 22, 1806,
June 30,1840, June 9,1857, and November 17, 1897, is extended for 25 years, beginning January 1, 1921, and ending December 31, 1945.
Article 2. The agreement made on October 26, 1917, and
supplement thereto dated March 11, 1918, also supplementary agreements made on March 11 and July 26, 1918,
between the minister of finance and the governor of the
Bank of France are hereby ratified. The agreements are
exempt from stamp and registration taxes.
Article 3. The proceeds of the additional contributions
imposed by Article 4 of the agreement of October 26, 1917,
as well as the portion of profits eventually to be paid to the
Government in accordance with the supplementary agreement of July 26,1918, shall be used each year for purposes
of agricultural credit up to an amount required by the




339

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

i Quoted in the market at 5,550.

111260—19

6

laws of November 17, 1897, and December 29, 1911. The
excess shall be treated as a reserve and credited to a special
account of the treasury until legislative action shall have
been taken to fix the terms under which the fund is to be
used for credit purposes.
Article 4. No regent of the Bank of France shall be an
administrator of financial companies of the countries at
war with France.
Done in Paris, December 20, 1918.
APPENDICES.

Agreement of October £6, 1917.

The undersigned, L. L. Klotz, deputy, minister of
finance, on behalf of the Government, party of the first
part, and Georges Pallain, governor of the Bank of
France, authorized by order of the general council of the
Bank of France of October 25, 1917, party of the second
part, have agreed on the following arrangements, which
will become effective when ratified by a law renewing the
charter of the Bank of France for 25 years beginning
January 1, 1921:
Article 1. The benefits of discount operations provided
for by the organic statutes of the bank (article 9 of the
decree of January 16, 1908) are extended to apply to mutual credit societies (socie*tes de caution mutuels) engaged
in commerce and industry on a small or moderately large
Article 2. Beginning with the fiscal year 1918 there
shall be paid to the Government the following percentages of the extraordinary earnings from the discount of
French Treasury notes for the benefit of foreign governments and from the interest on advances to the Government: 85 per 100 of the net earnings from treasury notes
for the benefit of foreign governments and 50 per 100 of
the interest on advances to the Government, after deducting the supplementary interest of 2 per 100 provided for
by articles 4 and 5 of the agreement of September 21, 1914,
ratified by the law of December 26, 1914, said interest to
be credited in its entirety to the reserve and amortization
account provided for by article 5 of the said agreement.
No further payment shall be due on account of the abovementioned items, nor shall the respective amounts be
included with the productive circulation.
The amount of the payment fixed in this manner shall
be credited to the special reserve and amortization fund
in proportion as the earnings from the above items are received by the bank.
For the period between August 1,1914, and the end of the
year 1917 the bank shall credit to this account, as soon as
the law ratifying the present agreement shall have been
made public, the sum of 200 million francs in liquidation
of the amount chargeable to the year 1917 on the interest
described in paragraph one of this article.
This payment of 200 millions for the period before 1918
and the payments prescribed in the first part of this
article for subsequent years shall take the place of the
general war profit tax.

340

FEDERAL RESERVE BULLETIN.

Article 3. Article 5 of the agreement of September 21,
1914, is modified as follows:
"The special account shall he charged with the capital
amounts of the unpaid bills held immobilized as the result
of the extension of maturity dates as fast as the bank, after
discontinuing the extension of maturities, shall transfer
the amounts to account of defaulted prewar bills.
" The account shall likewise be debited with the capital
amount of defaulted credits resulting from payments
made to allied and neutral correspondents in counterpart
of settlement in France through the intermediary of the
bank of bills or transactions antedating August 4, 1914.
"The bank shall continue to administer the portfolio
of defaulted bills and credits and shall credit the above
account with such subsequent payments of principal as it
may be able to collect thereon.1
"At no time shall the total credit to this account be
in excess of the total of extended bills and credits described above. The excess as well as all other amounts
which ultimately are to be credited to the special account
shall be applied in reduction of the Government debt,
or be directly credited to the treasury account when the
Government debt shall have been repaid."
Article 4. In calculating the payments provided by
article 5 of the law of November 17, 1897, there shall be
added to the amount obtained by multiplying the average
productive circulation by the discount rate, after deduction is made of the sums, if any, divided between
the bank and the Government in accordance with article
12 of the said law, the total interest received by the bank
from securities extended under moratorium; and to the
sum thus obtained shall be applied a rate of 5 per 100.
If during any period the discount rate shall exceed 3.5,
4, or 4.5 per 100, this proportion for a corresponding period
shall be 7.5, 10, and 12.5 per 100, respectively.
On the basis of the proceeds of the bank's productive
operations determined as above, there shall be levied
each year, after deducting the payments explained above,
a supplementary charge of 20 per 100. In this calculation all amounts up to 50 million shall be reckoned only
at one-fourth of their actual amounts; amounts between
50 and 75 million, at three-eighths; amounts between 75
and 100 million, at four-eighths; amounts between 100
and 125 million, at five-eighths; amounts between 125
and 150 million, at six-eighths; and amounts between
150 and 175 million, at seven-eighths.2
These ordinary and supplementary payments shall in
no way take the place of taxes imposed on the bank by
existing law. Any increase of these taxes or the creation
of new taxes which might apply to the operations subject to the above payments shall be reduced by the amount
of the latter, and only the excess, if any, shall be collected.
1 This provision is designed to recoup the bank for losses, aggregating
about 500 million francs, representing Russian credits guaranteed by
the Russian State Bank and Government as well as the Bank of France.
2 The purpose of the provision is to make the payments increase
progressively as earnings increase. When earnings exceed 175 million
francs, the full rate of 20 per cent applies; for lesser amounts a lower
rate in effect applies, for example, 10 per cent on earnings of 75 to 100
millions.—Editor.




APRIL 1, 1919.

These provisions shall become effective as of January 1,
1918.
Article 5. The permanent advances of the Bank of France
to the Government, resulting from the agreements of June
10, 1857, March. 29, 1878, October 31, 1896? November 11,
1911, and amounting together to 200 million francs, are
extended to the time of the expiration of the charter.
These advances shall bear no interest. To guarantee their
payment there shall be given to the Bank of France a
treasury bond of a maturity coincident with the maturity
of these advances.
Article 6. The bank shall continue the existence of
branches, offices, and agencies (villes rattachees) established beyond the obligations imposed by the law of
November 17, 1897, and the agreement of November 11,
1911.
Within 10 years following the promulgation of the law
ratifying this agreement, 12 branches and 25 offices shall
also be opened.
The bank undertakes moreover to extend its collection
service to 50 points (villes rattachees), which shall include
the administrative centers of all arrondissements and of
cantons, having 6,000 or more inhabitants, that have no
bank service.
Article 7. The Bank of France shall continue to effect
gratuitously payments of checks and transfer drafts for
account of the treasury drawn by treasury agents, and to
lend gratuitous aid to the Government upon terms fixed
by existing decrees in facilitating the settlement through
transfer of drafts, approved and found correct, in favor of
creditors of the treasury and departments having open
accounts either at the Bank of France or with some
banking house that in its turn has an account with the
Bank of France.
It shall also lend gratuitous aid to the treasury on the
same conditions in effecting the settlement through transfer
for account of treasury agents of drafts drawn by communes
and public bodies for the benefit of their creditors having
open accounts at the Bank of France or some other banking
house which in its turn has an account with the Bank of
France.
It shall also undertake without charge the collection of
checks drawn or indorsed to the order of treasury agents
or of the Government monopolies.
Article 8. The Bank of France undertakes to collect for
all its customers without commission all bankers' checks
(cheques barres) drawn on banking points and checks
drawn on banks belonging to a clearing house or on their
correspondents.
It undertakes to pay and settle over its counters without expense all bills of its customers, and also to effect
transfers without expense between customers residing in
different places.
Article 9. This agreement is exempt from stamp and
registration taxes.
Done in duplicate in Paris the 26th of October, 1917.
Read and approved.
(Signed)

GEORGES PALLAIN.

Read and approved.
(Signed)

L. L. KLOTZ.

341

FEDERAL RESERVE BULLETIN.

1919.

Amendment to the agreement of October 26, 1917, between
provided that the net profit received by the treasury shall
the minister of finance and the governor of the Bank of not fall below the 5 million francs paid in accordance with
France.
the agreement of November 21, 1911.
Article 3. The present agreement is exempt from stamp
The undersigned, L. L. Kiotz, deputy, minister of
and registration taxes.
finance, representing the Government, party of the first
Done in Paris the 11th of March, 1918.
part, and Georges Pallain, governor of the Bank of France,
Read and approved.
authorized by order of the council of the bank, dated
February 28, 19.1.8. party of the second part, agree:
Article 1. Article 3 of the agreement of October 26,1917,
is amended by adding the following:
"The bank will credit the amortization account with
interest calculated at the net rate of the advances to the
Government, after deducting the stamp tax and the payments provided for in article 2 of said agreement.
'' This interest shall be credited to a memorandum account on the last day of each semester.
{
* At the time of the final liquidation of the amortization
account a summary statement shall be prepared of the
amounts successively applied to amortization or credited
to the Government on this account.
"The bank shall pay to the treasury a portion of the
amount stated in the memorandum account proportional
to the total amounts credited to the Government in accordance with the above-described summary statement."
Article 2. The present act is exempt from stamp and
registration taxes.
Done in duplicate in Paris, March 11, 1918.
Read and approved.
(Signed)

GEORGES PALLAIN.

(Signed)

GEORGES PALLAIN.

Read and approved.
(Signed)

L. L. KLOTZ.

Supplementary agreement to the agreement of October 26,1917.
The undersigned, L. L. Klotz, deputy, minister of
finance, on behalf of the Government, party of the first
part, and Georges Pallain, governor of the Bank of France,
authorized by order of the general council of the Bank of
France of October 25,1917, party of the second part, have
agreed as follows:
Article 1. Beginning with the fiscal year 1918 all distribution of annual dividends above 240 francs per share
net above taxes will obligate the bank to pay to the Government an amount equal to the net excess dividend.
Article 2. The present agreement is exempt from stamp
and registration taxes.
Done in Paris the 26th of July, 1918, in duplicate.
Read and approved.
(Signed)

GEORGES PALLAIN,

Read and approved.
(Signed)

L. L. KLOTZ.

Read and approved.

Examined as an addition to the law of December 26.7
1918, discussed and passed by the Senate and Chamber of
Supplementary agreement of March 11, 1918.
Deputies.
Done in Paris, December 20, 1918.
The undersigned, L. L. Klotz. deputy, minister of
The President of the French Republic,
finance, on behalf of the Government, party of the first
it. POINCARE.
part, and Georges Pallain, governor of the Bank of
Countersigned by:
France, authorized by order of the general council of the
The Minister of Finance,
Bank of France of October 25, 1917, party of the second
(Signed)

L. L. KLOTZ.

part, have agreed as follows:
Article 1. In accordance with the general principle that
the Government alone has the right to benefit from the
failure by holders of notes to redeem them, the Bank of
France will pay to the treasury, on dates fixed hereafter,
an amount corresponding to that of all outstanding obsolete
notes, engraved in blue without the pink background, and
of all small notes of 20 and 25 francs issued before 1888 and
still in circulation.
A payment of 5 million francs having been made on
account in accordance with the agreement of November 28,
1911, a further sum of equal amount shall be paid to the
treasury during the month following the ratification of
this agreement. The balance shall be paid on January 2,
1923.
Article 2. When the amount of these notes in circulation
shall have been reduced below the amounts paid in to the
treasury, the Government shall undertake the redemption
of such notes as will be ultimately presented for payment,




L. L. KLOTZ.

New Plan of Price Stabilization.

The new Industrial Board of the Department
of Commerce, which has been appointed with
the approval of the President of the United
States, has issued to the press the following
statement of its organization and purpose,
together with a review of the conditions which
have led up to its appointment at the present
time. The intention of the board to work in
close cooperation with industries, and with organizations properly authorized to speak on behalf of their respective industries, is made clear
by this general statement.

342

FEDERAL BESBRVE BULLETIN.

The personnel of the new Industrial Board
is as follows:
George N. Peek, chairman; formerly vice
president Deere & Co., Moline, 111.; formerly
commissioner of finished products and acting
vice chairman War Industries Board.
Samuel P. Bush, president Buckeye Steel
Casting Co., Columbus, Ohio; formerly director of Facilities Division and Chief of Forgings,
Guns, Small Arms, and Ammunition Section,
War Industries Board.
Anthony Caminetti, Commissioner General
of Immigration, Department of Labor, Washington, D. C.
Thomas K. Glenn, president Atlantic Steel
Co., Atlanta, Ga.
George K,. James, president Wm. R. Moore
Dry Goods Co., Memphis, Tenn.; formerly
chief of Cotton and Cotton Linters Section,
War Industries Board.
T. C. Powell, director Capital Expenditures,
United States Railroad Administration; formerly representative of Railroad Administration on War Industries Board, and formerly
vice president Southern Railway Co., Cincinnati, Ohio.
William M. Bitter, of West Virginia, president W. M. Ritter Lumber Co.; formerly division chief and assistant to the Commissioner of
Finished Products, War Industries Board.
STATEMENT OF THE INDUSTRIAL BOARD.

The President has authorized the appointment of a
board to address post-war stagnation in commerce and
industry. The condition, its cause, its remedy, the results
to be expected and the objections to the course purposed
are briefly analyzed below:
I. The condition :
(a) Although—
1. Commercial stocks are depleted.
2. There is plenty of money.
3. Building and construction are several years in
arrears of necessity.
4. A long period of enforced economy is greatly
relieved.
5. Markets are in prospect in all parts of the
world.
(b) Still—
1. Buying is timid and has been decreasing in
volume.
2. Money is also timid and remains in bank.




APRIL 1, 1919,

I. The condition—Continued.
(6) Still—Continued.
3. Some mills and factories are idle—few are
running full.
4. Construction of public and private works has
not begun.
5. Nonemployment is spreading.
II. The cause:
(a) War required production abnormally increased
generally and abortively increased respecting certain commodities specially needed for war. This irregular increase
was secured by enormously increased prices. Consequently the sudden termination of war left a highly inflated
and very irregular market which is generally far above
what the peace demand will support and which is not
homogeneous, many prices being abortively above their
place in the normal pattern.
(6) This situation was originally created by the abnormal operation of the law of supply and demand, stimulated
by the great need of the European countries for war materials before this country entered the war, but after we
entered the war the law of supply and demand was adjourned and was replaced by such new and powerful forces
as priority certificates, compulsory and commandeering
orders, export and import restrictions, and price fixing.
These forces worked through comprehensive agreements
and cooperation between the Government and industry.
Therefore, it may fairly be stated that the existing condition was not brought about by the normal operation of the
law of supply and demand.
(c) The normal operation of the law of supply and demand can not cure what it did not cause, first, because it
can not operate until buying begins, and, second, because
buying can not begin until we have a more normal, stable
and homogeneous market.
(d) Everybody knows that some prices must fall. No
one dares buy until they do fall and even then everybody
will wait to see how far they fall. Individual action in
lowering selling prices is therefore timid, unscientific, and
long drawn out. It can not render the market uniform or
stable, but on the contrary renders it unstable, dangerous
and panicky. The law of supply and demand would cure
the situation eventually, but can we afford to wait, first,
through a period of suspicion and uncertainty, then
through a panicky crash in all markets, and then through
chaotic readjustment? By sane and temperate action all
this can be avoided and the law of supply and demand
helped over the gap between hold-over war prices and a
stable level.
(e) Some uncertainty results from governmental accumulation of facilities and raw, finished, and partly finished
materials, which must be fed very carefully into the market. This situation requires the cooperation and advice
of industry.
III. The remedy:
(a) The condition must be cured as it was caused. It
was not ocaused by the normal operation of the law of supply

APRIL 1,

1910.

FEDERAL RESERVE BULLETIN.

343-

and demand but by general, comprehensive cooperation
V. Objections to governmental purpose shortly anand agreement between industry and government. It swered :
must be cured by the some kind of cooperation and agreeObjection (a): Business resents governmental interferment—a consummation possible only at the instance and ence and control, which is to be avoided rather than enwith the approval of government.
couraged. Let conditions alone, and the law of supply
(6) Wholesome cooperation in American business at and demand will cure all evils.
governmental instance was proved in the War Industries
Answer: The war developed a new thing in governBoard (W. I. B.). Governmental control as practiced by ment—cooperation and mutual help between government
the W. I. B. is no longer necessary, but cooperation and and industry in which government appeared not as a
agreement in industry at governmental instance and with policeman, and not as a jealous guardian of a suspicious
governmental approval is necessary to bring the law of character, but as a friend and helper. This idea proved
supply and demand back into normal operation and to let itself. What is proposed is not governmental control..
loose prosperity.
The board has no power of control. It is proposed to pro(c) To this end the President has authorized a board, vide a forum in which industry can meet and agree on a
largely of W. I. B. men, operating on W. I. B. ideals, minus policy for itself at the instance and with the approval of
W. I. B. control, to call industry together, group by group, government, which will help the law of supply and demand
and let them decide on prices to be offered to the Nation over the gap between hold-over war prices and a stableas the governmentally approved judgment of assembled level.
industry on a price scale low enough to be stable, homoObjection (b): Business and industry will not come into a
geneous throughout the whole fabric, and founded so governmental conference unless there is a power of comsolidly on a comprehensive review of conditions as to en- pulsion.
courage general buying, including that of the railroads and
Answer: The experience of the War Industries Board
other governmental agencies, and the resumption of normal utterly disproves the criticism. It has been argued that
activities.
patriotism impelled business and industry to the WarIV. Results to be achieved:
Industries Board. Patriotism is not adjourned with the
(a) Basic commodities such as steel, building materials, closing of the war.
textiles, and food will be considered first and brought to
Objection (c): War prices were fixed at such a level as
a stable basis. The governmental policy, as expressed by to insure the production of many high-cost and inefficient
the bill to authorize purchase by the Government of wheat producers. What is proposed would shut off this proat the guaranteed price and resale of it at the world price, duction.
is to assist in bringing prices of basic commodities to norAnswer: This production is not needed in peace. The
mality by bringing down the cost of living. It is hoped American people can not be expected to support ineffithat these steps alone will automatically operate to reduce ciency in the enterprises that serve them with the necesthe price of fabricated articles. If they do not do so in any saries of life or to maintain production not normally
particular case, the industry affected will be invited into needed. Inflated production above that which would
conference.
be supported by the law of supply and demand must(6) As soon as a stable and wholesome scale of prices is cease, and will do so eventually, whether or not the
achieved, the cost of living will have so far been reduced proposed x>lan is adopted.
as to create automatically reductions in the price of labor
Objection (d): Such readjustment must necessarily rewithout interfering with American standards and ideals ! quire redistribution and readjustment of labor.
for the treatment and living conditions of labor, and thus I Answer: This is quite true. It is necessary. The diethe last inflating element will have been withdrawn from | tribution and allocation of labor to war industries has
prices. It is believed that industry will agree that the ' upset the normal pattern in this country for four years..
cost of living must be substantially reduced before labor ! What is proposed is a stimulated peace industry which.
should be asked to accept lower wrages and thus industry | will employ as much or more labor as did war industriesshould stand the first shock of readjustment.
especially considering the loss of man power, due to
(c) The assurance to the country of a market stabilized decreased immigration, loss by influenza, war, and probr
at the lowest reasonably expected level will loosen such a ably increased Army and Navy. That it will employ them'
flood of buying for the re-creation of stocks, the making up in different places and at different tasks is inevitable,
of arrears in the building program, the feeding of needs whether the proposed step is taken or not.
long starved by economy, and the invasion of world marObjection (e): A general reduction in selling prices now
kets as may stand unprecedented in this country. From will force industry and commerce to take a loss on products,
the stable level thus reached by cooperation we may ex- purchased at war prices.
pect a healthy and normal condition created by the comAnswer: This is true and inevitable whether the pro
plete and unhampered operation of the law of supply and posed plan is attempted or not, but under the pro-posed!
demand.
| plan better adjustments are possible;, buying will begiii




344

FEDERAL RESERVE BULLETIN.

immediately, the overhead of continuing high-cost operations through a period of stagnation is eliminated, and
finally much of the loss will be recouped by buying at
fair prices and selling in the inevitably increasing market
that will result from the normal operation of the law of
supply and demand under prosperous conditions.
VI. In conclusion:
It is expected that the activities of the board will be
temporary and are intended only to give governmental
assistance to aid the law of supply and demand in resuming its normal functions.
The splendid cooperation of American industry during
the war leads to the belief that it may continue and carry
us safely through the trying period of readjustment.
Surely, with our fundamental conditions so sound, there
is every reason to believe that we may bridge the gap
between war and peace with the same courage and
fortitude that always mark the American business man
in his dealings with large affairs, and thus escape the unfortunate depressions which the country has suffered
following previous wars.
THE INDUSTRIAL BOARD.
GEORGE N. PEEK, Chairman.

Explaining the action taken with reference
to the revision of prices in the iron and steel
industry, the two following statements were
made public on March 21 by the Industrial
Board, the former on behalf of the board, the
latter on behalf of the iron and steel industry:
. MARCH 21,

1919.

In giving its approval to the schedule of prices just
decided upon for the principal articles of iron and steel
the Industrial Board of the Department of Commerce,
carrying out the purpose for which it was created, believes
that a level has been reached below which the public
should not expect to buy during the current year. The
purpose of the board is to bring about such a lower level
of prices as will effect stability and stimulate trade, to the
end that business and industry can proceed and build up
with confidence and provide maximum employment.
In its effort to effect cooperation between the Government, representing the public, and capital and labor, it
has in view a due and just regard for all of these interests
and therefore, in giving its approval to these prices and
others which it will consider immediately, it will endeavor
to strike a balance which, while calling sooner or later for
some sacrifice or adjustments on the part of all, yet will
not subject any of these interests to undue hardship.
The board is asking industry to cooperate in taking the
first step and voluntarily make temporary sacrifices in the
interest of all, and has asked the iron and steel industry
because of its fundamental importance to be the first to
act, and the board is highly gratified with the spirit in
which it has responded.
It is fully understood and expected that the present
wage rates or agreements will not be interfered with, the
approved prices having this in view.




APRIL 1, 1010.

The reduction in the price lists may involve the necessity of some high-cost plants either shutting down temporarily or running at a loss for a period, but it is expected
that with an increased volume of business soon to be
developed a reasonable return to the average and better
than average producers will be afforded. In view of the
higher costs developed throughout the world as a result
of the war, a return to anything like pre-war prices is
regarded as out of the question. It is expected that other
industries as well as the consuming public and labor will
recognize their obligations in the circumstances and
cooperate in the same generous spirit as has the steel
industry.
MARCH 21,

1919.

"After careful consideration and full discussion relating
to cost of production and all other facts and circumstances
relating to the iron and steel industry, representatives of
the industry submitted to the industrial Board of the Department of Commerce a schedule of proposed reduced
prices of the principal iron and steel products, which, with
modifications suggested by the board and accepted by the
industry, has been approved by the board.
"The objects to be secured are a revival and stabilization of business by establishing a reasonably low basis of
prices which would be satisfactory to the consuming
public, and yet, so far as practicable, would yield a moderate and reasonable return to the investors where they
are entitled to it in the application of sound business
principles, and at the same time would not disturb wage
rates or interfere with wage agreements; and further,
having determined upon prices which it is expected
will not be reduced during this year, it is believed that the
volume of business will be promptly increased and that
furnaces and mills will be operating at a largely increased
capacity, thus giving employment to a correspondingly
increased number of employees.
" I t has been necessary to ascertain and scrutinize all
the facts and figures in order to prevent any injustice, and
this has been the occasion for considerable discussion and
some differences, but as a final result of the conferences
which have taken place during the last two days and before, the committee appointed to represent the entire
iron and steel industries joined in the report which was
made to the Industrial Board.
"While in the opinion of some of the manufacturers
the board has insisted upon some changes in the schedule
submitted before approving the same, yet the iron and steel
committee are convinced that the members of the board
have been governed solely with the intention of protecting and promoting the best interests of the public, the investors of capital, and the employees without discrimination, and that the action of the board has been wise and
just.
"The iron and steel industry was the first called upon
by the board to meet the business situation and to lend
its energies and assistance in bringing about readjustment
and restoration of the good business conditions, and
therefore was the first called upon to make the necessary
sacrifice in profits; but those connected with, the trade

APRIL 1,

FEDERAL RESERVE BULLETIN.

1919.

believe that as a result for the year as a whole they will be
compensated and that if other lines of industry show the
same disposition, as they undoubtedly will, we may expect great business progress and prosperity in the near
future.
"The price list and reductions submitted and approved
bv the Industrial Board is as follows:

! Nov. n
l price.

Pi? iron, basic
Billets:
4-inch
2-inch
Sheet bars
Slabs
Skolp:
Sheared
Universal
Grooved
Merchant bar, base..
Sheared plates
Structural base
Wire rod
Plain wire
Nails.
Black sheets, 28pound
Blue annealed, 10pound.
Galvanized sheets,
28-pound
Tin plate, 100-pound j
box
!
Tubular products ;
Hoops, base
!
Light rails
i
Rails:
j
Standard .Besse- j
mcr
!
Standard O. II..!

i §33.00
M7.50
151.00
151.00
150.00

Present New
price. price.

§30.00 j S25,
5.75 !
43.50 !
47.00 !
47.00
46.00 '
i

38.50
42.00
42.00
41.00

2 3.25
3.15
8 2.90
*2.90
2
3.25
8 3.00
157.00
2
3.25
2
3.50

2.80
57.00
3.25
3.50

2 5.00

4.70

4.35

2

4.25

3.90 I

3.55

2 6.25

6.05 j

5.70

7.75
()

7.35

7.00

3.30 ;
2.70

3.05
2.45

2

23.0O
23.OO

155.00
157.00

3.00 i
2.90 !
2.70
2.70 I
3.00 :

55.00
57.00

I
!
i
I

2.65
2.55
2.45
2.35
2.65
2.45
52.00
3.25
3.25

45.00
47.00

345

because the chief export, coffee, was mostly to England.
European credits are usually 90 days; in the United States
30, 60, and 90 days, and drawings accordingly. These are
usually sold to one of the local banks or private bankers.
HOW EXCHANGE IS QUOTED.

Exchange rates are locally quoted at so many colones
to the dollar, pound sterling, mark, franc, etc.; e. g., when
the dollar is quoted at, say, 115 per cent premium, it means
Reductions.
that every $100 is worth 21.5 colones, or when it is quoted
From
From
at 260 per cent premium, it means that every $100 is worth
Nov. 11. present.
360 colones. When sterling is quoted at, say, 140 per cent,
it is understood that every £20 is worth 240 colones, and
$7.25
84.25
so on. These bills are customarily domiciled at New York,
9.00
5.00 San Francisco, London, Paris, and Hamburg.
9.00
5.00
9.00
5.00
All banks and bankers are kept advised by their cor9.00
5.00
respondents of discount and exchange rates at New York.
3 12.00
3 7.00
Drafts and currency are converted into local currency
"12.00
3 7.00
8 9.00
3 5.00 at the ruling rates of the day, which are regulated much by
3 7.00
8 11.00
3 7.00 the supply and the demand. Exchange tables are pub3 12.00
3 7.00
Ul.OO
5.00 lished in the local papers. Forward rates of New York
5.00
3 5.00 discount are not quoted.
3 5.00
3 5.00
3 5.00
The margin or profit usually calculated in the purchase
3 7.00
of first-class commercial bills is one to two points. The
8 13.00
3 7.00 New York discount rate is taken as a basis.
3 14.00
No discrimination exists in favor of bills of other coun3 7.00
3 11.00
3 7.00 I tries. In normal times the bulk of the trade being with
3 15.00
3 7.00 i Europe there is naturally more demand for European
3 9.00
3 5.00
3 11.00
3 5.00 exchange than for bills on the United States, although
when the rates are favorable in New York many mer10.00
10.00 I chants purchase New York exchange and buy in New
10.00
10.00 !
York whatever European exchange they may require.

1
Gross ton. 2 Hundredweight. 3 Net ton. 4 3* points olf card.
Ore, no change
Basint; points and differentials unchanged. Prices effective at once.

COMMISSIONS AND STAMP CHARGES—PROTEST

PRACTICES.

In the import trade the commission for collecting clean
items on this city is -J- per cent, documentary items the
same; clean items and documentary items on various other
Practice of Handling Bills of Exchange in Foreign cities, I per cent. The commission for obtaining acceptance if bill is not to be left for collection is J per cent.
Countries.1
The bill stamp charges in Costa Rica are: For clean
COSTA RICA.
items, 2 centavos (§0.009); for documentary items, 20
[Consul Benjamin F. Chase, San Jose.]
centavos ($0,093). It is customary for these charges to
Exports to the United States are financed by 30, 60, and j be paid by the drawee of the bills. Deductions for stamp
90 day bills. The local seller, at times, draws on a credit charges are never made from remittance in payment of
opened by the American importer, but generally against such collections. No charge is made for stamps on checks
bill of lading. This credit is ordinarily open in the United remitted in payment of collections.
States on 1 per cent acceptance commission and 6 per cent
Protest charges are 6.50 cokmea (S3.02). These charges
interest. Bills drawn in dollars on New York always find are collected from the drawee, if payment is made after
a ready sale. The currency in which the local exporters' protest.
bills are drawn depends on the destination of the goods; if
The charge or expense beyond the protest fees connected
for Europe, generally in sterling, but even some of that with the return of dishonored items is J per cent false
trade is in dollars. Before the war most was in sterling, commission. Payment of such charge or expense should
be made by a deposit with the New York bankers of the
1
From Commerce Reports, No. 37, Feb. 13,1919; No. 59, Mar. 12,1919 !
house or bank returning the dishonored item.
1
[NOTE.—This is the iirst ol a series to be published in the near future j Protest laws and practices are very similar to those in
on the practice of handling bills of exchange in the import and export :
trade and other features. The series which follow will include reports j common use. Protest must be made within two days of
from Mexico, South America, Europe, Africa, and the Far East.]
' default by one notary and two witnesses or by two notaries,




346

FEDERAL RESERVE BULLETIN.

between 8 a . m. and 6 p. m. In counting the two days,
holidays are excluded. Day and hour of presentation
must be shown.
It is customary for the maker of the draft to pay the
collection and banking charges, and not for the importer
to bear these charges, or to assume any other supplementary payments or charges.

APRIL 1,1919.

PROCEDURE FOR SALE OR RETURN OF GOODS.

When the client desires to sell the goods the local bank
or banker attends the sale, if authorized to do so.
If instructions are given to have the goods returned,
storage or customhouse charges and reshipping charges
must be paid after first giving the Government notice of
the intention to return the goods. They must first be
ACCEPTANCE OF CONSIGNMENTS.
cleared, but no duty need be paid, only the other charges.
Local banks do not guarantee the payment of drafts If the merchandise is returned to the country of shipment
after duty has been paid a refund is obtainable, less posaccepted by any firms.
The local banker giving the information does not sibly some small charge.
accept the consignment of goods. Parcels may be sent
PHRASEOLOGY OF DRAFTS.
for delivery, with the usual charge of J per cent on city
The customary phrase to be included in drafts drawn on
items and | per cent on out-of-town items, upon payment
Costa Rica in United States dollars (or any other foreign
or acceptance of draft.
currency)} in order to enable a remittance of the full face
CUSTOMHOUSE PRACTICES—DRAYAGE AND STORAGE
amount of such bills is, "All charges for account of
CHARGES.
drawee." By using this phrase all collection charges and
One month is allowed for making entry of the goods at all interest is understood to be collectible from the drawee
the customhouse, except matches, gasoline, kerosene, and to be remitted by the local bank. If not included in
powder, and other dangerous or explosive goods, when 48 the draft as drawn the phrase may be added in writing
hours are allowed. No fine is imposed but a storage thereon.
If a bill is drawn on Costa Rica in other than Costa
charge of 60 centavos ($0.28) per 100 kilos (220.46 pounds)
per month, or fraction thereof, for five months for ordinary Rican currency, sometimes the drawee pays such bill by
goods. A storage charge of 10 centavos ($0.0465) per lrilo a draft purchased from another bank here. But the holder
(2.2 pounds) for each 24 hours or fraction thereof, beyond of the bill so drawn is under no obligation to accept any
the 48 hours, is charged for dangerous or explosive articles other bank's draft in payment thereof.
Where drafts are drawn in a foreign currency, there is
as noted. It is customary for the consignee eventually
to pay these charges. The goods are sold at auction if not no provision of law nor trade custom as to the rate of
entered within six months from date of arrival at the exchange that shall be applied on such bills.
If the maker of the draft has not given specific instruccustomhouse. The Government has no regular storage
house but makes charges as above for the time the goods tions, no allowance for interest is made to acceptors for
retiring bills before maturity. The rate is not fixed by
remain under its charge.
The bank does not arrange for storing the goods while law, but is 10 and 12 per cent here; when any allowance
awaiting clearance. Drayage charges are subject to bar- is made on foreign bills the rate is usually 6 per cent.
gain, rates are from 25 centavos ($0,116) to one colon
GUATEMALA.
($0,465) for a single package. No insurance is available
[Consul Samuel C. Reat, Guatemala City.]
for goods in the customhouse in San Jose. The customer
Exports to the United States are financed by attaching
generally pays all charges imposed by delay in entering
draft to the shipping documents. Often a portion of the
the goods.
payment for the goods is drawable in advance, but only
INVOICES AND OTHER DOCUMENTS NEEDED.
when the bank has been advised by the American imWhen goods arrive in advance of the related documents porter, and then there is a charge made for the accommothey may be entered by giving a satisfactory bond to the dation. In certain cases the exporter is able to draw for
Government. There are usually no expenses connected the full amount from a credit opened by the importer.
with this procedure. Documents almost invariably pre- The credit is generally opened with the correspondent of
cede the goods.
the bank in New York or San Francisco upon terms that
Consular invoices, a bill of lading, and a commercial are mutually agreed upon there.
invoice are necessary for all shipments made to this counAs all of the bills drawn in the country are in dollar extry. It is not customary to permit examination of goods change there is no possibility of a comparison with bills
by the consignee without permission of the consignor. If in other exchange. No exchange tables of dollars into
the bill of lading is made out " to order," it is possible for local currency are published.
the consignee, by giving satisfactory bond to the GovernThe ordinary method of arranging a credit is for the imment, to obtain possession of the goods without producing porter to establish a credit with some certain bank or
the bill of lading. This is also true if the bills of lading banking house in the United States, who then notifies the
are made out to the order of the consignee. Bills of lading exporter's bank in Guatemala that upon presentation of
should be made to the order of a bank or banker to give shipping documents of any certain article the exporter is
consignor absolute control of the merchandise.
to be given the privilege of drawing at such and such a.




APEIL 1, 1919.

FEDERAL RESERVE BULLETIN.

rate per quantity. The usance on such bills is generally
50 points below the rate of exchange on the day of drawing. They are negotiated through the banks, banking
houses, and money brokers, who will quote the day's rate
of exchange upon request. The bills are domiciled in
New York, New Orleans, and San Francisco. The banks
receive daily cables of the New York rate of discount and
exchange. "Forward" rates of New York discount are
quoted at 6 per cent.
No fixed margin of profit is calculated in the purchase of
first-class commercial bills; their purchase is competitive
between the various banks, banking houses, and brokers.
COMMISSIONS AND STAMP CHARGES.

In the import, trade the commission charged for collecting clean or documentary items on Guatemala City varies
in different institutions from one-half to 1 per cent. This
commission is the total cost attaching to collection of any
item drawn on the country, as there are no banks in other
parts of the Republic, other than branches of those established here in the capital. The commission for obtaining
acceptance if the bill is not left with the bank for collection is 1 per cent, but this very seldom happens.
The stamp charges on both clean and documentary
items is 50 centavos per $1,000 (equal at present exchange
to about 'JJ cents gold). This charge is paid by the
acceptor or consignee. No deductions are ever made for
stamps by the banks here on the amounts collected or
on checks remitted by them in payment.
RULES GOVERNING PROTESTED ITEMS.

In case a draft is marked "To be protested if not paid,"
the charges for the protest are $2.50 gold, which charge
is paid by the acceptor. There are no other fees on dishonored items. The law of the country covering protest
ot items provides simply that the bank hands the draft
to a licensed attorney, who presents the item to the
person on whom it is drawn. If the party says that he
has not the money for payment ot the item or refuses to
accept it for any reason, the attorney then draws up a
statement of the facts on stamped paper, attaches it to
the draft, and returns it to the bank. Nothing else is
done, except that the bank, for itself or on account of
the drawee, may bring suit and obtain judgment..
CUSTOMS REGARDING PAYMENT OF CHARGES—GUARANTEES
OF PAYMENT.

347

and with no protest. No local bank or banking house
will guarantee the payment of a draft drawn against any
firm in the Republic, even after it is accepted. None
of the banks in Guatemala accept goods on consignment
or aid the importer in any way. The only service they
render to the American exporter for the charges they
make is the holding of the documents attached to the
draft until it is paid; and the only protection they offer
for his goods is the holding of the documents necessary
to obtain the goods from the customhouse until the draft
is iully paid. Consequently the only way that the
American exporter can bo sure of having his draft paid,
after it is accepted, is to make the draft a sight draft and
instruct the bank to hold the documents until it is paid;
or, if a G or 90 day draft i3 attached, to instruct the bank
O
to demand guarantee that it will be paid at maturity.
Of course, with the first merchants and importers, the
bank will willingly accept the guarantee of the firm or
importer, who most likely is a client and depositor.
CUSTOMHOUSE PROCEDURE—STORAGE OF GOODS.

The time allowed by the customhouse for entry of goods
is one month after the arrival of the steamer in port. As it
takes from 3 to 10 days for the goods to arrive at the customhouse in Guatemala City after the arrival of the steamer,
the time elapsing in railroad transit is lost to the importer.
After the passing of one month from the date of arrival of
the steamer the customhouse authorities impose a fine
against the goods to the amount of 8 centavos per 100 kilos
(220.46 pounds) or part thereof per day; one-half of the
fine is payable in gold and the other half in the currency of
the country, so that it amounts at present rate of exchange
to about 4.9 cents gold per day. This charge is paid by the
consignee, should he eventually take the goods out of customs: but should he fail to accept the goods within the time
limit of six months the customhouse authorities then advertise the goods for sale, making announcement in a daily
paper and soiling at public auction to the highest bidder
for 75 per cent or more oi the local market value at the moment, not the invoiced value. The proceeds are kept by
the Government. The Government does not undertake to
store goods longer than the time stated above and does not
have a bonded warehouse for any class of goods.
The banks of the country do not undertake to store goods
of any description upon request of the American exporter,
nor are there any arrangements possible whereby goods
may be covered by insurance other than that written in the
United States.
Should the goods arrive before the related documents, it
is possible for the importer, if a responsible firm or individual, to obtain the goods from the customhouse after
paying the duty and giving guaranty that the bills will be
presented upon their arrival.

It is the custom in Guatemala for the merchant or
importer to pay the collection charges on all items drawn
against him. However, he always objects to doing so,
making strong protest. Whether or not the collection
charges should be paid by the importer should be a matter
of arrangement and agreement between the American INVOICES NEEDED—INSPECTION OF GOODS BY CONSIGNEE.
exporter and the Guatemalan importer; and in many
It is necessary to obtain consular invoices for all goods
cases it i? arranged in such a manner that the importer
is relieved of these charges. All other supplementary and shipped to the Republic of Guatemala, except for those
subsequent charges are paid by the importer willingly goods that are free, such as samples, etc., but it is better
111260—19
7




348

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

even in those cases to obtain an invoice on account of the ! There is very little market here for other than New York
difficulty of knowing exactly what is free and what is not. | bills, and most local exporters' bills are drawn in American
No other documents are necessary.
j dollars.
Inspection of goods in the warehouses of the customhouse ; The exporter is likely to be an importer also. The credit
is allowed by the authorities when made in the presence of which he gets for his shipments is applied on bills for goods
an inspector; but under no circumstances are the goods bought in the United States. For this reason bills of exallowed out of the hands of the customhouse authorities for change can hardly be said to exist. It is not customary for
examination. If the goods are damaged or unsatisfactory, the American importer to open credit for the Honduras
exporter with whom he does business.
they may be refused by the consignees.
Local exchange rates are based on the value of local
It is not possible for the consignee to obtain possession of
the goods in any manner except as stated above. The bills j coin in terms of the gold dollar. Foreign money is figured
of lading must be produced, or bond given for their presen- at its American gold value, and then converted into local
tation later or for the presentation of copies in duplicate. coin. New York quotations are only received by mail,
Facilities are such that shipments should not be consigned and so have little effect on local transactions Local banks
do not keep posted on daily fluctuations of exchange rates.
"to order."
Dollar bills, drafts, etc., are converted into local currency
PROCEDURE FOR SALE OR RETURN OF GOODS SHIPPED.
on the basis of local supply and demand. Exchange
In case the American exporter desires to sell the goods to tables are not published in this country, and "forward"
others than the consignee the banks here do not attend to rates of New York discount are not quoted. There is
that business, but might turn the matter over to some practically no business done in the purchase of commercial
commission house to handle; or should the American ex- bills, either American or foreign.
porter through his bank instruct the bank here to return
COMMISSIONS AND STAMP CHARGES—FEES ON PROTESTED
the goods to the shipper, special arrangements would have
ITEMS.
to be made with the director of customs by which the
In the matter of imports to Honduras the banks charge a
goods would not have to be cleared through the customhouse, and no duties would have to be paid; but no refund commission of £ per cent for collecting clean or documentary items on this city. The same charge is made for
pertains on duties already paid.
obtaining acceptance if the bill is not left for collection.
PHRASEOLOGY OF DRAFTS.
There are no stamp charges of any kind on either clean or
In order to assure the remittance of the full amount of a documentary items.
draft drawn by an American bank for goods shipped to
The amount charged in case of protest is about $8 gold,
this country there is no extraordinary wording used in and this is paid by the drawee. The American exporter is
drawing up the draft, but sometimes one of the banking held responsible for collection and banking charges, except
houses here instructs its correspondents in the United in case of difficult collections, when the importer pays.
States to have the words "plus J per cent" added to inOTHER BANK SERVICES.
sure the collection charges. This added, assures the
Local banks will not usually guarantee payment of
drawee of the full amount, without deduction for collection
and interest. Interest is very seldom added to a draft, drafts, and it is not advisable to consign goods to them,
however, even when drawn for 60, 90, or 120 days. The because the fact becomes known and no one will then pay
banks and banking houses all undertake to remit collec- what the goods are worth.
Banks will accept parcels to be delivered to consignee
tions of drafts in American gold, and the words " American
against payment or acceptance of draft, if such parcels are
gold " are generally written in the draft.
No draft is ever drawn on this country in the currency shipped by mail. The charge in such instances is 1 per
of Guatemala, but should one be drawn in currency other cent. Parcels sent by freight are not accepted for delivery.
than American dollars, the person upon whom it is drawn
CUSTOMHOUSE ENTRY AND STORAGE FEES.
pays it with bank check, American gold, at the current
One month is allowed after arrival of goods for making
rate of exchange, or with another draft, approved, written
in American gold. There being no provision of law as to customhouse entry. Storage at a per diem rate is charged
the rate of exchange in such a case mentioned, it is the rate against the goods after the lapse of this period. Goods not
current of the day. The banks of Guatemala do not allow taken from the customhouse after two years are sold at
the acceptor any interest reduction for retirement before auction. The storage charge after the first 30 days' free
storage is 2 cents per half kilo (1.1 pounds) for the next
maturity.
month, and double this charge for each additional month
HONDURAS.
or fraction thereof. It is customary for the consignee to
[Consul Francis J. Dyer, Tegucigalpa.]
Exports to the United States are financed through banks pay these charges, but disputes often arise. There is no
by drafts at three or four months' sight with documents organized private storage business here.
attached against acceptance. Goods are generally shipped
Arrangements can be made for insurance while in wareto commission houses to the credit of the shipper.
house, if desired. The rates range from f to 1J per cent.




APRIL 1,1919.

FEDERAL RESERVE BULLETIN.

The charges of both storage and insurance are borne by
the goods.
Goods never arrive here before the related documents.
But in case of loss of documents they can be replaced.
DOCUMENTS NEEDED—EXAMINATION OP GOODS—HOW TO
PHRASE BILLS OF LADING.

349

importer, but as the exports decrease in volume the
practice decreases. Moreover, considerable difficulty is
encountered in disposing of drafts which are not bank
drafts. This has had a tendency to discourage the practice
of making drafts on importers rather than on banks.
Credit is ordinarily opened in New York, and also in
San Francisco. The terms vary to such a degree that
nothing can be definitely stated.
Before credit is granted an intimate knowledge of the
financial standing of the client is obtained; then satisfactory arrangements are made.

Consular invoice, bill of lading, and original invoice
showing the f. o. b. value of the goods in an American port
are needed for all shipments made to Honduras except
those coming by parcel post, in which case consular invoice
is unnecessary.
EXCHANGE RATES AND QUOTATIONS.
All packages must be opened in the customhouse before
delivery to the drawee, hence there is no difficulty about
The common usance of bills of exchange is 30 days; in
the drawee's examining the goods.
j some instances 60 and 90 days. All bills are negotiated
If bills of lading are made to the order of the consignee | directly, as there are no brokers. Exchange rates are
he may obtain the goods without producing the bills of | quoted at so many cordobas (1 cordoba=$l) for each
lading, but this can not be done if they are made "to pound sterling, or $1.00, etc. These bills are customarily
order." To give the exporter absolute control of the goods domiciled in New York, San Francisco, London, and Paris.
the bills of lading should be made out "to order," indorsed
Cable advices from New York to the local banks keep
in blank, and kept in bank with proper instructions.
them posted on the daily fluctuations of exchange rates
It is not the general policy here to undertake the sale of in the principal financial centers of the world. Possibly
the goods, but it can be done, without making any guaran- upon this advice, although no quotations on New York
tees. Goods will be returned if all expenses are met, but are current, dollar bills and drafts offered to local banks
the excessive freights render this course inadvisable. are converted into local currency. Exchange tables are
Also, the goods must be cleared through the customhouse not necessary, for American money is legal tender, and the
and duty paid, and no duties already paid will be refunded. cordoba is maintained at par with the American dollar.
Local banks receive quotations of discount rates reguPHRASEOLOGY OP DRAFTS.
larly from New York, but "forward" rates of New York
To make possible a remittance of the full face value of discount are not quoted.
drafts, they should be made '' Payable at the bank selling- j The margin of profit usually calculated in the purchase
rate for sight drafts, in New York, plus bank collection j of first-class commercial bills is dependent upon circumcharges." It is not customary to have remittance cover j stances. The base for such calculations is the local rate.
collection charges or interest. If this is desired, however, i There is no discrimination in favor of bills of other
an explanation of the proposed charge should be added to | countries.
the above clause.
j
If a bill is drawn on a Honduras bank in other than the j COMMISSIONS CHARGED FOR COLLECTIONS- -NO STAMP
CHARGES.
local currency it is customary for the drawee to make payment by draft purchased from another Honduras bank.
In the import trade, the commission for collecting clean
But neither law nor custom provides any rate of exchange bills of exchange by the Commercial Bank of Spanish
when drafts are drawn in a foreign currency.
America (Ltd.), and the National Bank of Nicaragua (Inc.)
From 4 to 6 per cent interest is generally allowed accept- is 1 per cent in the cities of Managua, Leon, and Granada,
ors for retiring drafts before maturity. But this is not with a minimum charge of 25 cents; elsewhere in Nicaragua
fixed by law. In addition to the fees mentioned above, a the commission is 1} per cent, and the minimum, 50 cents.
false commission is allowed in case of protests. Payment The rates of the Anglo-Central American Commercial Bank
of such charges is made to the New York correspondent of (Ltd.) are a little higher.
the Honduras bank or is deducted from the next remitWhen collections are returned unpaid or unaccepted the
tance.
rates are one-half of the above-mentioned rates with the
NICARAGUA,
minimum as stated. Such rates include postage charges.
[Consul Andrew J. McConnico, Corinto.]
Protest for nonacceptance or nonpayment is not underExports to the United States are financed either by taken. The commission for obtaining acceptance, if the
advances made against the shipments by the local banks bill is not to be left with the local bank for collection, is
of Nicaragua or by means of credits issued to local shippers one-half of the tariff charges.
There are no bill stamps or charges for clean and docuby various commission and banking houses in the United
mentary items drawn on this country. Nor is there a
States.
During the season of heaviest exports local sellers, in a charge made for stamps on checks remitted in payment of
large measure, draw under a credit opened by an American foreign collections.




350

FEDERAL RESERVE BULLETIN.
PROTEST OF BILLS EXPENSIVE.

Protest of bills of exchange and drafts in Nicaragua is
very rare. Generally it is expensive, depending upon the
^amount involved, and little is to be gained by undertaking
such a measure. Banks recommend it only in rare cases.
In the event of a bill being paid after protest it is doubtful
whether the charges may be collected from the drawee.
Protest must be made by public document. Protest for
nonacceptance dispenses with protest for nonpayment
except in a few special cases. Most of the bills of exchange
sent to Nicaragua for collection bear the following printed
or written instruction: "If unpaid, do not protest."
BEST METHODS OF RECOVERING COLLECTION

CHARGES.

APRIL 1,1919.

consignee presents all necessary documents and pays all
charges accruing before the time of sale at public auction,
he may take delivery of the goods.
The expenses and charges incident to storage by the
customhouse are as follows: For each 100 kilos or fraction
thereof, \ cent per day for the first 30 days; for the second
month, 1 cent per day; for the third and fourth months,
1J cents per day; and for the fifth and sixth months, 2J
cents per day for each 100 kilos or fraction thereof. The
consignee is compelled to pay such charges; otherwise the
goods will be sold at public auction by the customhouse
at the expiration of six months in order to meet the charges
and expenses.
All goods are stored in the customs warehouse till the
duties are paid and entry made. In case goods are stored
in private warehouses after entry is made, the premium
varies from \\ per cent to 3 per cent. The insurance and
storage charges in such cases are agreed upon by the
interested parties.

Generally there is difficulty and annoyance when bills
of exchange are marked "with all collection and banking
charges.'' Bankers of Nicaragua strongly recommend that
these items be included by the shipper in his invoice, and
draft upon the importer here be made out for an amount
WHARFAGE AND INSURANCE RATES—PROCEDURE IF DOCUcorresponding to the invoice.
MENTS ARE DELAYED.
Whether the importer pays the collection and banking
charges on bills drawn on him is all a matter of arrangeGoods imported at Corinto are assessed with wharfage
ment. It is difficult, if not impossible, to cause the im- charges at $1.60 per ton. This includes dray age. Most of
porter to assume any supplementary charges for which the imported articles are insured in the countries from
arrangements have not been made.
which they are exported. This insurance usually covers
the articles while remaining in the customs warehouses,
PAYMENTS RARELY GUARANTEED—DELIVERY THROUGH
or till they reach their destination at interior points. The
BANKS DISCOURAGED.
rates of insurance depend upon the class of goods.
Ordinarily, local banks do not assume responsibility or
In the event of the goods arriving before related docuguarantee payment of drafts accepted by approved firms. ments, if the manifest shows to whom the goods are conExceptions are made in a few cases, in which the importer signed, the consignee is allowed under sufficient bond to
has arrangements with the banks. For the convenience file entry and take delivery of the goods,, after making a
of clients local banks have what they term "Importa- written promise on the face of the entry to produce the bill
tion departments,'' but consignments are not recommended of lading and consular invoice, if the latter be required,
until after consultation as to whether the class of goods is within a specified time. The time limit for bills of lading
suitable for this country. The sales commission is 2\ per is six months from any part of the world; for consular incent, del credere, subject to arrangement.
voices, three months from any part of North or South
Local banks do not encourage the sending to them of America and five months from other parts of the world.
parcels to be delivered to consignees. It entails too much The time to produce these documents may, under unusual
work, and in such cases the banks have to advance funds circumstances, be extended by the collector general of
for customs purposes, etc. The amounts involved are customs of Nicaragua.
generally so small that they do not care to undertake busiIn the absence of documents,, if the manifest does not
ness of that class. Banks recommend that parcels be sent show to whom the goods are consigned, the agents of the
against "cash with order." The importer then has to pay vessel on which the goods are imported may have them
the duties and take delivery.
placed in bond pending receipt of documents; but such
agents can not take delivery of the goods. Or the agents
CUSTOMHOUSE TINES AND STORAGE CHARGES.
of the vessel may make written request to the collector of
The time allowed after arrival by the customhouse for customs that the person claiming the goods be allowed to
making the entry of goods is 15 days. If the entry is not place them in bond, which request is granted if the person
made within the limited time a fine is imposed equal to j in question has the necessary bonds on file.
25 per cent of the duty, if the goods are dutiable; if not
If the bill of lading is not eventually produced the condutiable, the fine imposed is equivalent to 25 per cent of signee is required to pay a fine equal to the value of the
the value of the goods.
goods. If the consular invoice, when such is required, is
The consignee is compelled to pay the fine; otherwise not produced a fine of $1 is imposed in addition to a fine
delivery will not be made to him. Usually the goods are equivalent to 50 per cent of the duties, if the goods are
held for six months by the customhouse, after which, under dutiable. If the goods are not dutiable, then the fine is
the law, they may be sold at public auction. But if the $1 in addition to 50 per cent of the value of the goods.




APEIL 1, 1919.

351

FEDERAL RESERVE BULLETIN.

DOCUMENTS EEQUIRED—PARTIAL EXAMINATION OF GOODS
PERMITTED.

A consular invoice is required for goods regularly imported or sent by parcel post if they are valued at $50 or
over. In addition to bills of lading and consular invoices,
certificates of origin are required in connection with any
shipments upon which rebates are allowed.
Examination of imported goods by the drawee is permitted in a limited way. If he has the necessary documents, the customs authorities, being satisfied that he is
the owner of the goods, will permit him to examine at least
one package.
It is impossible for the consignee to obtain possession of
goods without bills of lading, whether the bills of lading
are made out "to order," or to his order. In order that
the shipper may have absolute control of the goods the
bill of lading should be made out "to order" with the
necessary instructions to agents or banks in this country.
PROVISIONS FOR SALE OR RETURN OF GOODS UNDELIVERED.

In the event of the sale of goods at the instance of clients
of American banks, agents of local banks no doubt would
attend such sales, if so instructed. It all depends upon
arrangements entered upon by the banks concerned.
In case instructions are received by a local agent to return the goods, the importer must notify the customhouse
authorities that he will not receive the goods. The exporter in the United States usually has an agent, and
through that agent the goods may be returned to the port
of shipment. The agent must, however, turn the bill of
lading over to the customhouse before he is allowed to
reship the goods.
Such returned goods have to be cleared through the
customhouse as follows:
The goods are placed in bond by the filing of a bond
entry. If necessary, they may immediately thereafter be
taken out of bond and placed on board ship by the filing
of another bond or entry known as an Entry of Reembarque. No duty is required in such a case, but if the
duty haa been paid and it is afterwards decided to return
the goods to the United States it is not possible to obtain
a refund of the duty.
PHRASEOLOGY OF DRAFTS AND BILLS OF EXCHANGE.

currency at collecting bank's rate of exchange for sight
drafts on New York."
To remit the face amount of the bill plus collection
charges and interest the wording should be: "Payable,
together with collection charges and interest at the rate
p e r annum from
to date of payment, in
of
currency at collecting bank's rate of exchange for sight
drafts on New York."
Local banks undertake to remit proceeds of bills of
exchange in United States dollars without loss of exchange
if the bills include the following clause: "Payable in
currency at collecting bank's rate of exchange for sight
drafts on New York." At times, but the practice is not
general, local banks extend courtesies to their customers
by way of allowing them to pay a bill drawn upon them
in other than local currency by purchasing a draft from
another bank in the country.
No difficulty would arise if clauses such as those recommended above be used, substituting, of course,"London,"
"Paris," etc., for "New York," as the individual case
requires.
Exporters in the United States and elsewhere occasionally instruct local bankers to allow interest on bills
of exchange, if paid before maturity, the rate in such
cases being G per cent per annum. This rate is not,
however, fixed by law.
FEES FOR PROTESTS AND RETURN OF DISHONORED ITEMS.

' When dishonored items are returned to American
banks one-half of the usual tariff rates for collections
are charged by the local banks. If the additional expense of protesting a bill of exchange is incurred by a
local bank, such expenses plus one-half the usual tariff
charges are exacted by the local banks. The manner of
obtaining such charges is all a matter of arrangement
between the American and Nicaraguan banks.
DENMARK.
[Consul General E. D. Winslow, Copenhagen.]

,

Practically all foreign and domestic business is done by
acceptances. These documents are drafts drawn by the
seller of goods on the purchaser, who agrees to pay them
on a given date or arranges to have a bank or firm, by accepting the draft, contract to make the payments for him.
Bearing on their face the evidence that they are based upon
actual commercial transactions or attesting this fact
through bills of lading attached, they become prime mercantile papers, and an American bank that had an office
here might be able to do some business along these lines
and issue bankers' acceptance to buyers of American
goods. I am informed that this method of doing business
is a new departure for American banks.

Nicaraguan banks recommend that the following phrase
be included in drafts drawn on Nicaragua in United
States dollars, or any other foreign currency, in order to
enable them to remit to the shipper the face amount of
such bills without any deduction whatever: "Payable in
currency at collecting bank's rate of exchange for sight
drafts on New York." The face amount of the draft is
then remitted, the only reduction being the commission GOODS SHIPPED UNDER DRAFT ON ACCEPTANCE TERMS.
for collecting the draft.
The open-credit method of doing business prevailing in
For a local bank to be enabled to remit the face amount
of a bill plus the collection charges this phrase is recom- the United States, whereby goods are shipped and billed
mended: "Payable, together with collection charges, in with discounts for cash or net at 30 or 60 days, is not in




352

FEDERAL RESERVE BULLETIN.

favor with experienced exporters. Manufacturers familiar
with foreign fields and possessed of good selling connections
abroad usually grant time to their overseas customers by
shipping goods under draft on acceptance terms. The
customer gets the controlling documents upon accepting
the draft and thereafter secures the shipment itself. The
important feature of such an accepted draft lies in the fact
that it forms a definite acknowledgment of indebtedness
recognized as such by law.
In Denmark acceptances are far simpler to collect than
open accounts. With an accepted draft in evidence it becomes unnecessary to prove indebtedness item by item in
case of litigation. The acceptance carries a definite maturity date. It virtually becomes the acceptor's promise
to pay at a definite time. Ordinarily, to neglect payment
of an accepted draft is to bankrupt the credit standing of
the foreign firm involved, according to the standards of
business practice prevailing. The matter is so serious that
the average foreign firm will go to extremes to avoid dishonor of accepted drafts.
ADVANTAGES OF THIS METHOD TO THE SELLER.

In open credit, trading payments may be neglected or
deferred, a condition encouraged by the indefinite time
element of open accounts. Legal recourse in such event
calls for submission of definite proof of indebtedness and
involves troubles multiplied by difference in legal procedure, language, and the distance between seller and the
defendant buyer. An unpaid acceptance, on the other
hand, means that protest can be entered forthwith and
debtors called to account without further difficulty.
The safety and consequent popularity of draft for
acceptance terms of dealing with foreign customers are in
three factors: The definite maturity date of the obligation, the ease of discounting good acceptance paper, and
the simplicity of legal recourse if such ever becomes necessary. The indefinite terms of settlement in open account
trading force the seller to carry his customers' credit,
thereby restricting the seller's working capital and his
own line of credit. The acceptance system means that
definite credit can be extended abroad and such paper
discounted at a lower rate than is granted any other commercial paper. In view of the fact that foreign customers
invariably pay costs of discounting to secure the necessary credit, acceptances are the favored instruments of
export dealings from the customer's viewpoint.
ACCEPTANCE DRAFTS ISSUED ONLY ON ACTUAL TRANSACTIONS.

For years the acceptance system has prevailed in Denmark, both for domestic and overseas trade financing.
The characteristic of such acceptances has been that they
have been issued for trade purposes, based on actual commercial transactions. This in contrast to the promissory
note system better known in America, under which notes
may be issued as accommodation paper, regardless of
whether based on actual business transactions.




APRIL 1, 1919.

ENGLAND.

[Consul General Robert P. Skinner, London.]

Exports to the United States are most frequently
financed by the establishment of a banker's credit by the
importer, against which the exporter draws a bill of exchange. Very often remittances are made by check, and
also frequently there are open credits with periodical
settlements. The credits are almost invariably opened
in London, against which the exporter draws on terms
"cash against documents," these documents being the
bill of lading, the consular invoice, and perhaps other
special papers.
The market for sterling bills payable in London is freer
than that for dollar bills, hence local exporters naturally
draw chiefly in terms of sterling.
The American importer ordinarily deals with his
American banker who, in turn, arranges with his London
correspondent to pay the exporter against the presentation of the bill drawn on the American firm, accompanied
by the usual documents. Most bills of American importers are drawn at 60 days after sight.
The negotiation of bills of exchange in London, except
as provided for in special contracts, is accomplished
through brokers. Exchange rates are quoted in London
in dollars per pound sterling. All financial transactions
in the United Kingdom naturally center at London.
DAILY QUOTATIONS OF NEW YORK EXCHANGE.

New York rates of exchange and discount are quoted
daily in all the newspapers of any standing, and are made
public in this country during practically every business
hour of the day. Local banks receive direct quotations
from many exchange centers and are provided with tape
machines. In fact, the system is about as it is in New
York. The New York discount rate is always taken as a
basis when purchasing the bill in the United States. No
discrimination exists against American bills of exchange.
COLLECTION CHARGES AND STAMP DUTIES.

Consul Ingram, of Bradford, states, on the authority of
the Bradford Bankers' Clearing House, that there is no
agreement in Bradford upon a tariff for collecting clean
and documentary items, the circumstances governing the
charge in each particular case. The commission for clean
collections is usually lower than that for documentary
collections, the charges probably ranging from 6d. per cent
to 2s. 6d. per cent, according to the labor and other details
involved. It is equally impossible to give the cost of
collecting clean and documentary items in various cities,
this being governed by complex arrangements which exist
between the banks and their agents at various centers,
and also affected by the terms of the account with the
persons for whom the collections are made. However,
the usual charge for collecting clean items would be Is.
($0.24) per bill unless a yearly charge for services rendered
had previously been arranged.

APRIL 1, 1910.

FEDERAL RESERVE BULLETIN.

No distinction is made in the stamp duty on clean and
documentary items. On bills payable on demand or at
sight or presentation, or at a period not exceeding three
days .after date or sight, the duty is Id. This duty also
prevails on any other bill or note drawn for an amount not
in excess of £5. When the amount exceeds £5 but does
not exceed £10, the charge is 2d, and 3d. on amounts
over £10 but not exceeding £25. For bills drawn for
higher amounts the additional charge is 3d. for each £25
or fraction thereof. By the finance act of 1899 the duty
on a bill of exchange drawn and expressed to be payable
out of the United Kingdom, when actually paid or indorsed
or in any manner negotiated in the United Kingdom,
shall, when the amount for which the bill is drawn exceeds
£50, be reduced to 6d. for each £100 or fraction thereof.
It is not the custom for the drawee to pay these charges
directly, but it is possible that an adjustment as to bill
stamps may be made in the trading account of the persons
drawing and accepting the bills. Deductions for stamp
charges are made by local banks from remittances in payment of collections. There is no charge made for stamps
on checks remitted in payment of collections.
RULES REGARDING PROTEST.

In case of protest the amount of charges is 7s. 6d. ($1.82),
plus mileage. In the event of the item being paid after
protest, the charges are collected from the drawee.
"With respect to the protest of items, foreign bills which
have not been accepted and/or paid should be noted on
the day of dishonor—cost, Is. 6d. (§0.363) London. 2s. 6d.
($0,606) Bradford. Subsequently protest can be extended, and it should accompany the bill if returned
abroad. If the bill remains in town it is not necessary to
extend protest at once, as this may be done late if required.
The collection and banking charges on bills drawn upon
merchants should be borne by the person for whom the
item is collected. Collection and banking charges may,
as in the case of stamp duties, be dealt with in the account
between the drawer and drawee of the bill.
Banks in Bradford only guarantee payment when the
drafts are drawn under credit opened by local banks.
There is no set charge for opening credits, and they vary
probably from one-fourth to one-half per cent, and in
some special cases they are as little as one-eighth per cent.
BANKS ACCEPT SHIPPING DOCUMENTS AGAINST PAYMENT
BY CONSIGNEE.

353

City & Midland Bank (Ltd.) makes no charge for these
services, but the Bank of Liverpool (Ltd.) states that the
charge is 2s. per cent ($0,486 per $486.65) for isolated transactions. When the transactions are for substantial
amounts and the aggregate turnover is considerable the
charge would not exceed half this rate.
CUSTOMHOUSE AND PORT REGULATIONS.

The customs law of England requires that the entry of
goods must be made within 21 days after the arrival of the
ship, but the regulations of the port authority at Liverpool
require goods to be removed from the quay in 72 hours.
Otherwise, penalty rent is incurred amounting to 5s.
($1.21) per hour for the first 24 hours and 10s. ($2.43) per
hour thereafter. Penalty rent is often reduced by the
dock board, however, to special rent and fixed according
to the circumstances of the case. These penalties are not
paid by the consignee unless due to his own negligence,
but are charged by him aganist the goods when he renders
his account to the consignor.
If the goods are not claimed, the shipowner passes the
necessary customs entries and causes the goods to be
stored, and all expenses thus incurred are claimed before
delivery is obtained.
BANKS WILL ARRANGE STORAGE AND INSURANCE.

When requested to do so by American banking correspondents, the banks in England will arrange for the storage
of goods and otherwise take steps to protect the American
banking house against loss to its clients through the failure
or neglect of the consignee to take up the bill of lading.
Rates for draying and storage in such cases vary with the
goods.
Whenever the bank attends to storage it will ordinarily
attend also to fire insurance, but otherwise this is left to
the consignee. The premium in such instances is entered
as a charge against the goods. The premium varies greatly,
according to the kind of policy—floating or specific—the
character of the goods, and the location of the warehouse.
The Liverpool & London & Globe Insurance Co. (Ltd.),
1 Dale Street, Liverpool, publish in card or pamphlet form
the complete schedule of rates for various ports. It is customary for the consignee to pay the insurance charges and
to recoup himself out of the proceeds of sale of the goods.
In the event of the goods arriving in advance of the
related documents, they may be obtained from the shipping company against an indemnity and letter of undertaking which is signed jointly by the consignee and his
own banker. Liverpool banks make no charge for this
service, but some London banks charge one-sixteenth
per cent.

The facts stated in the succeeding paragraphs embody
procedure pertaining at Liverpool, but except when otherwise stated they hold good, in the main, for all English
ports. This information was furnished by Consul Horace
Lee Washington.
DOCUMENTS NEEDED.
Banks do not act as the consignee of goods shipped, but
parcels may be sent to them by banking correspondents
There is no statutory requirements specifying what docuin America. In this case the shipping documents are ments are needed in shipments to England. Commercial
sent to the bank to be delivered to a specified consignee practice requires in addition to the bill or bills of lading
against payment of an amount indicated. The London a marine insurance policy or certificate.




354

FEDERAL RESERVE BULLETIN.

AntiL 1, 1010.

Banking institutions in Paris doing a fairly large AmeriIt is not usual except under extraordinary circumstances
and for satisfactory reasons to permit examination of goods can business naturally keep themselves fully informed as
without specific instructions to that effect from the con- to New York discount rates. The exchange rates are
quoted regularly and published daily, and local banks
signor.
keep themselves posted by cable on fluctuations of exHOW BILLS OF LADING SHOULD BE MADE OUT.
change throughout the world.
As regards margin of profit, there is no fixed rule, and
The consignee can not obtain the goods without producing the bills of lading, except by a banker's indemnity, there are practically no bills on the member banks of
whether the bills are made out "to order" or to the order the Federal Reserve System in the market, although the
of the consignee. To give the exporter absolute control rediscount rate of the Federal reserve bank unquestionof the goods the bills of lading should be made out "to ably would be a ruling factor in determining the rate on
order," and then indorsed in blank by the party in whose such bills.
favor they are made out.
In the past all the bills on other countries have been
drawn on London because of the negotiability and stability
ARRANGEMENTS FOR SALE OR RETURN OF GOODS.
of the pound sterling. But the dollar market has now
The information which follows was furnished by Consul assumed such importance that with the full normal resumption of international business bills drawn in dollars
Calvin M. Hitch, of Nottingham.
In case the client of the American bank desires to sell will find a good market.
goods shipped, it is exceptional for banks here to attend COMMISSIONS FOR COLLECTIONS—BILL STAMP CHARGES.
to such sale. If requested to do so they would employ a
The commission for collecting documentary items on
broker. If requested to have the goods returned they
this city never exceeds one-half mill; clean items colwould hand the documents to a shipping company with
proper instructions. Inward freight and charges, and lected free. For collecting clean items on various other
possibly return freight and insurance, would have to be cities: If large centers, free, with one to five days' interest
paid before the shipping company would act. The goods collected; documentary items, up to 1 mill on big centers,
would not need to be cleared through the customhouse and from one-half mill to 2 per cent on long banking
nor duty paid; and refund could be obtained on duty places. No commission is usually charged for obtaining
acceptance of bills not left with the bank for collection.
already paid.
The bill stamp charges for clean and documentary
PHRASEOLOGY OF DRAFTS.
items drawn on this country are one-half mill. It is
To enable the British bank to remit the face amount customary to charge this to the drawer of the bill, the
of the bill the draft should include the phrase, " Payable charge being debited to the account of the institution for
at the selling rate for demand drafts." This phrase would which the collection is made.
also cover any collection or interest charges, since these
The charge in case of protest is five-eighths per cent, and
should be included in the amount of the bill.
generally when the item is paid after protest this is colIf a bill is drawn on this country in a foreign currency lected from the drawee.
the drawee sometimes pays with a draft purchased from
As a rule merchants here will not pay collection and
another bank in this country; but this is not an estab- banking charges on bills drawn against them nor assume
lished custom.
any other supplementary charges. Any such arrangement
Acceptors retiring drafts before maturity are, by com- must be the result of special agreement between buyer and
mercial custom, allowed a rate of interest one-half per cent seller.
above the ruling deposit rate of interest fixed by the
London joint-stock banks; that is, if the drafts are drawn HOW CONSIGNMENTS AND PARCELS ARE HANDLED—DOCKING, WAREHOUSE, AND INSURANCE FEES.
with documents against maturity. The interest for retiring clean items is a matter of arrangement between the
Local banks will indorse drafts accepted by approved
acceptor and the collecting bank.
firms, taking a commission. In general, banks do not
Any charges connected with the return of dishonored accept consignments nor handle parcels to be delivered
items, over the protest fees, are a matter of arrangement, to consignee against payment. Such transactions could
and would be debited in account.
doubtless be handled through transportation companies.
Clearance of goods may be made as soon as the captain
FRANCE.
has entered his ship and the goods are landed. There is
Consul General Alexander M. Thackara, Paris.]
no maximum time limit in which to make entry. The
Exports to the United States are financed by credits only expenses are watching, dock, and warehousing dues.
opened through the Paris correspondent of the American When goods are not promptly cleared through the customs
banking institution. The drafts or the documents are they are sent to the Government bonded warehouse, and
likely to be drawn "to order" and indorsed in blank, all costs for cartage, warehousing, and insurance are for
or simply drawn to the order of the financing institution. account of goods, the consignee eventually paying these
They may be at sight or at 30 or 60 days' sight.
charges.




APRIL 1,1919.

After goods have been cleared through customs a transportation company will arrange storage, if desired. The
rates are not fixed, even among the different companies
operating in the same town, and no schedule of charges
can be given.
In Government warehouses the insurance is imposed
and covered by a Government insurance contractor, the
value being estimated by the warehouse people. But if
the consignee orders goods to the Government warehouse,
he may also indicate the correct value for insurance. The
charge is usually 50 centimes ($0.0865) per 1,000 francs
($193) per month.
DOCUMENTS NEEDED—HOW TO MAKE OUT BILLS OF LADING.

In the event of the goods arriving before the related
documents, they may be obtained by presenting a banker's
guaranty. The cost of this does not exceed one-fourth
per cent.
Consular invoices are not required on shipments to
France.
Consignee may examine the goods in the customs only
when instructions have been given by the shipper to that
effect.
The consignee can not obtain possession of the goods
without the bill of lading if it is made out "to order" or
to the order of the consignee unless he produces a banker's
guaranty. To obtain absolute control, bills should be
made out or indorsed to the order of the collecting bank,
although, generally speaking, bills come through made out
"to order7' and indorsed in blank.
PROCEDURE FOR RETURN OF GOODS.

It is unusual for banks to attend the sale of goods. If
goods are to be returned to shipper, the procedure is quite
similar to that in the United States for a like transaction.
A regular customs entry is necessary, and the goods are
reforwarded in bond to port. Goods in bond need not
be cleared through the customhouse, hence there is no
duty. But if duty has already been paid, there is no refund, unless duty was paid on drawback or on "Consignation de droits" (deposit of customs duty), which is
only allowed on certain classes of goods.
PHRASEOLOGY OF DRAFTS.

The customary phrase to be included in drafts to enable
a remittance of the full face amount of the bill without
any deduction is: "Payable for this amount plus all
charges." This phrase must be embodied in the bill.
If the remittance is also to include collection charges,
these charges are usually indicated in the amount of the
bill, and the phrase is: "Payable for the face amount,
plus §
, collection charges, as indicated above, and
any other bank charges."
If interest is also to be paid, add to the above phrase:
" And interest at the rate of
from
to
."
On bills drawn on France in other than French currency
the drawee is at liberty to purchase his cover where he




355

FEDERAL RESERVE BULLETIN.

There is no legal provision governing the rate
of exchange on drafts drawn in foreign currency. Nor
is there a rate fixed either by law or custom governing
the interest allowed to acceptors for retiring drafts before
maturity. Cedents should be consulted.
In addition to the protest fees connected with the
return of dishonored items, a commission of one-half mill,
plus 6 francs ($1.16) per protest is made. This is usually
debited in account.
PORTUGAL.
[Consul Genera] W. L. Lowrie, Lisbon.]

Exports to the United States are financed through
banking credits or commercial drafts, with bill of lading
attached. Credit is opened in Lisbon or London, less
frequently in New York, against bill of lading and insurance policies. The market for bills drawn in dollars on
New York is comparatively small. Most local exporters'
bills are drawn in pounds sterling or francs. The buyer
opens a credit in a local or French or English bank, sending a letter of credit to the seller, or having him advised
by the local bank that the credit is open for the amount
of the invoice of the goods purchased for payment against
shipping documents. Bills are negotiated through the
bank where credit has been established. Exchange rates
are quoted through the banks. Bills are customarily
domiciled in Lisbon or Oporto, London or Paris.
DAILY QUOTATIONS OF NEW YORK RATES.

New York rates of discount and exchange are quoted
each day by the banks. They keep themselves posted by
telegrams on fluctuations in the principal financial centers
of the world. Dollar exchange tables are not published;
sterling and francs are. Regular quotations of discount
rates from New York or other American banks would be
of no use here. The present rate of the Bank of Portugal
is 5J per cent; market discount, 5 to 7 per cent. "Forward" rates of New York are not quoted. Margin of
profit on the purchase of first-class commercial bills is
calculated on 5 to 10 points (about one-fourth and one-half
per cent). Interest is figured at 5 to 7 per cent, if New
York rates are not above that. Bills on London are those
which sell most readily and all parities are calculated
through the London rates of exchange.
COLLECTION AND BILL CHARGES—PROTEST FEES.

The commission charged by local banks for collecting
clean items on this city is one-tenth per cent; documentary items, one-tenth to one-eighth per cent. The same
commissions prevail for collecting items on Oporto and
Lisbon, but items on other cities are charged one-fourth
to one-half per cent extra. No commission is charged for
obtaining acceptance of a bill not to be left for collection.
The bill-stamp charges for clean and documentary items
drawn on this country amount to 10 centavos ($0,108) per
100 escudos ($108.05), or one-tenth per cent. It is customary for the drawee to pay these charges, together with

356

FEDERAL RESERVE BULLETIN".

postage costs, and they are deducted from the local bank's
remittance to the American bank in payment of such collections. No charge is made for stamps on checks remitted
in payment of collections.
The amount of the charges in case of protest is 1.30
escudos ($1,304). When the item is paid after protest the
charges are collected from the drawee. The law provides
that protest must be made within two banking days after
due date.
It is not customary for the Portuguese importer to pay
any collection, banking, or other supplementary charges—
nothing but the face amount of the bill.
HOW PARCELS SHOULD BE SENT—CUSTOMHOUSE ENTRY.

APRIL 1,1919.

goods without producing the bills of lading. If they are
made out to the order of the consignee their production is
not necessary for him to obtain the goods. To give the
shipper absolute control of merchandise, the bills of lading
should be made out to order and indorsed either to the
banker or in blank.
Local banks will attend to the sale of goods if desired
through an agent or a recommended merchant. If asked
to return goods the local bank will give reshipping instruction to an official customhouse clerk. If entry has
not yet been made duty need not be paid, and there is no
reexport duty. But if goods have been entered refund is
improbable.
HOW DRAFTS SHOULD BE DRAWN.

While it is not the rule for local banks to guarantee payment of drafts accepted by approved firms this is sometimes done, the terms being 1 to 2 per cent. Banks will
accept the consignment of parcels, but the conditions
would have to be adjusted between the parties concerned.
They will also accept parcels for delivery, the shipper
being responsible for the payment of customhouse duties,
which must be settled before parcels are delivered.
Two years are allowed after the arrival of goods in which
to make entry at the customhouse. No fines are assessed
for exceeding this limit, but whenever the storage fees
become sufficient to exceed the estimated value of the
goods they are sold by the Government at public auction.
Similar disposal of the goods is made if at the expiration of
the two years they remain unentered.
STORAGE AND INSURANCE RATES.

The storage rate on bags and bales is 30 centavos (10.324)
per ton for the first month and 27 centavos (§0.29) per ton
for each succeeding month. The rate on cases is 27 centavos per ton for the first, and 22 centavos ($0,237) for each
succeeding month. The consignee eventually pays these
charges. If removal of goods is desired, arrangements for
storing can be made with a customhouse broker, the rates
varying according to circumstances. Banks will arrange
for insurance while in warehouse, the premium varying
with the character of the goods and being paid eventually
by the consignee.
If goods arrive before the related documents, they are
stored ex officio by the customhouse, the expense varying
with the merchandise.

To enable local bank to remit the face amount of the bill
without any deductions whatever, the draft should read:
" Payable at the rate of exchange of the day of payment."
Collection, stamp, and interest charges must be paid by
the indorser, since the drawee can with difficulty be made
to assume them.
Bills drawn on Portugal in other than local currency are
payable at the rate of exchange ruling on the day previous
to maturity, and it is not customary to pay them by drafts
drawn on other banks in this country.
The customary but not legally fixed rate of interest allowed acceptors for retiring drafts before maturity is 5 to 6
per cent.
The small additional charges of commission and postage
over the protest fees for the return of dishonored items
are put to account or paid over to the New York correspondents of the local banking house.
SPAIN.
[Consul General Carl Barley Hurst, Barcelona.]

Spanish exports to the United States are usually financed
through London or Paris banks, and the local seller
also draws under a credit opened by the American importer. Where a local bank is called upon to cover balances in New York it purchases exchange on London and
sells this exchange in the United States. Drafts on New
York are sent to the United States and exchanged for gold,
which is then brought back to Spain.
New York rates of discount and exchange are well
known to parties interested, and local banks are advised
of daily fluctuations by telegraph.
Local banks get regular quotations of discount rates from
DOCUMENTS REQUIRED FOR SHIPMENTS—HOW BILLS OP
New York and other American banks, and "forward"
LADING SHOULD BE MADE OUT.
rates of New York discount are quoted here. All purConsular invoice must be obtained for all shipments to chases of first-class commercial bills are based on the LonPortugal. No other documents are required by law, but don and Paris parities, and no discrimination exists in favor
custom requires bill of lading, invoice, and insurance of bills on other countries.
policies in addition to the consular invoice.
BANK COMMISSIONS AND STAMP CHARGES.
Examination of goods by drawee is allowed without authorization from the exporter by abusive custom rather
The commission for collecting documentary items in this
than by legal right.
city is about one-half per mil, and the total cost for collectIf bills of lading are made out " to order," the consignee ing clean items in various cities differs but slightly from
may, under proper guaranty, obtain possession of the that of Barcelona. The total cost of collecting documen-




APEIL 1,1919.

357

FEDERAL RESERVE BULLETIN.

tary items in various cities depends upon the instructions
to be carried out. One-half the collecting commission is
charged for obtaining acceptance of bill not left with the
banker for collection.
Various arrangements are made by Spanish bankers with
the drawee as to the payment of stamp charges, sometimes
the stamp charge being deducted from the remittance made
in payment for collection. A charge of 10 centimos ($0,019)
is made for stamps on checks remitted in payment of collections. When an item is paid after protest the charges
are collected from the drawee if possible. The drawer
usually bears the banking charges, but such arrangements
are matters for adjustment between the buyer and seller.
Local banks do not generally guarantee the payment of
drafts accepted by approved firms. Banks accept the
consignment of goods on various conditions. Parcels to be
delivered to consignee against payment or acceptance of
drafts should be handled by a customhouse broker, who
would make entry of the goods within the required time
limit.
STORAGE CHARGES—CONSULAR INVOICE NEEDED.

Foreign Branches.

There is given below a list of foreign branches
of national banks and banks doing business
under agreement with the Federal Reserve
Board, which were open for business on April 1,
1919.
NATIONAL BANKS.

1. National City Bank, 55 Wall Street, New York City:
Buenos Xires, Argentina.
Bahia, Brazil.
Rio de Janeiro, Brazil.
Santos, Brazil.
Sao Paulo, Brazil.
Santiago, Chile.
Valparaiso, Chile.
Cardenas, Cuba.
Cienfuegos, Cuba.
Havana, Cuba.
Matanzas, Cuba.
Sagua la Grande, Cuba.
Santiago, Cuba.
Genoa, Italy.
San Juan, Porto Rico.
Montevideo, Uruguay.
Caracas, Venezuela.
Vladivostok, Russia.
Temporarily closed—
Moscow, Russia.
Petrograd, Russia.
2. First National Bank, 70 Federal Street, Boston, Mass.:
Buenos Aires, Argentina.

The usual insurance premium for the storage of goods in
warehouses is reasonable and depends on the nature of the
goods, arrangements as to the payment of such charges
being made between the consignor and consignee. Generally all goods are submitted to examination by the customhouse authorities. It is possible for the consignee to
AGREEMENT WITH FEDERAL
obtain possession of the goods without producing the bill BANKS DOING BUSINESS UNDER BOARD.
RESERVE
of lading made out "to order," as well as when made to the
1. American Foreign
order of the consignee. Although it is important to get Street, New York City: Banking Corporation, 56 Wall
absolute control of the merchandise, there is recourse
Cristobal, Canal Zone.
against the shipowner for improper delivery. In case a
Havana, Cuba.
Panama, Republic of Panama.
bank's clients desire to sell goods, an agent would be emPort au Prince, Haiti.
ployed. In case goods are to be returned to the shipper,
Rio de Janeiro, Brazil.
a shipping agent should be employed.
2. Mercantile Bank of the Americas, 44 Pine Street,
Where drafts are drawn in a foreign currency the rate of New York City:
Paris, France.
exchange of date of payment is applied on such bills. The
Barcelona, Spain.
rate of interest allowed acceptors for retiring drafts before
Affiliated institutions—
maturity is a matter of arrangement with the banker, as is
Banco Mercantil Americano de Cuba:
Havana, Cuba.
also any charge or expense beyond the protest fees conBanco Mercantil Americano de Colombia:
nected with the return of dishonored items.
Bogota, Barranquilla, Cartagena, Medellin,
Manizales, Girardot, Cali, Honda, Colombia.
Banco Mercantil Americano del Peru:
I
Lima, Arequipa, Chiclayo, Callao, Peru.
Acceptances to 100 Per Cent.
|
Banco Mercantil Americano de Caracas:
!
Caracas, La Guayra, Venezuela.
American Mercantile Bank of Brazil:
Since the issue of the March BULLETIN the
Para, Pernambuco, Brazil.
following banks have been authorized by the
National Bank of Nicaragua:
Federal Reserve Board to accept drafts and
Managua, Bluefields, Leon, Granada,
bills of exchange up to 100 per cent of their
Nicaragua.
Banco Atlantida:
capital and surplus:
La Ceiba, Tegucigalpa, San Pedro Sula,
Corn Exchange National Bank, Philadelphia, Pa.
Puerto Cortez, Honduras.
Guardian Trust & Savings Bank, Toledo, Ohio.
3. Asia Banking Corporation, 66 liberty Street, New
Live Stock Exchange National Bank, Chicago, 111.
York City:
Fifth Avenue Bank, New York City.
Shanghai, China.
Paterson National Bank, Paterson, N. J.
Hankow, China.




358

FEDERAL RESERVE BULLETIN".

APRIL 1,1919.

4. International Banking Corporation, 55 Wall Street, Against this there was a reduction of capital
owing to liquidation (other than for conNew York City:
solidation with other national banks under
Batavia, Java.
the act of June 3, 1864) and reductions of
Bombay, India.
capital of
$290,000
Calcutta, India.
Canton, China.
Net increase
2, 790,000
Cebu, Philippine Islands.
Colon, Republic of Panama.
Hankow, China.
Hongkong, China.
Kobe, Japan.
State Banks and Trust Companies Admitted.
London, England.
Manila, Philippine Islands.
The following list shows the State banks and
Medellin, Colombia.
Panama, Republic of Panama.
trust companies which have been admitted to
Peking, China.
membership in the Federal Reserve System
Puerto Plata, Dominican Republic.
during the month of March.
San Pedro de Macoris, Dominican Republic.
Nine hundred and eighty-seven State instiSantiago, Dominican Republic.
Santo Domingo, Dominican Republic.
tutions are now members of the system,
Shanghai, China.
having a total capital "of $353,862,051, total
Singapore, Straits Settlements.
surplus of $404,415,242, and total resources of
Soerabaya, Java.
$7,395,042,168.
Tientsin, China.
Yokohama, Japan.
(The International Banking Corporation also maintains
Total
a branch office in San Francisco, Calif.)
Capital. Surplus. resources.
The First National Corporation, 70 Federal Street,
I
Boston, Mass., has opened no foreign branches. A branch
District No. 3.
office of this corporation is maintained at 14 Wall Street,
New York Citv.
825,000 S35.000 8913,051
Milford Trust Co., Milford, Bel
The Union Banking & Trust Co., Du
Bois, Pa

New National Bank Charters.

The Comptroller of the Currency reports the
following increases and reductions in the number of national banks and the capital of national banks during the period from March 1,
1919, to March 28, 1919, inclusive:
Banks.

New charters issued to
With capital of
Increase of capital approved for
With new capital of1
Aggregate number of new charters and banks
increasing capital
With aggregate of new capital authorized
Number of banks liquidating (other than
those consolidating with other national
banks under the act of June 3, 1864)
Capital of same banks
Number of banks reducing capital
Reduction of capital
.,
Total number of banks going into liquidation
or reducing capital (other than those consolidating with other national banks under
the act of June 3, 1864)
Aggregate capital reduction
Consolidation of national banks under the
act of Nov. 7, 1918
Capital
The foregoing statement shows the aggregate
of increased capital for the period of the
banks embraced in statement was

44

5
0

5

The Conneaut Mutual Loan & Trust
Co., Conneaut, Ohio

175,000 2,145,601

100,000

65,000 1,621,598

25,000

137,951

District No. 6.

Bank of Grayson, Grayson, Ga

$745,000
2, 335, 000
3,080,000

0

W. B. Worthen Co., Bankers, Little
200,000
Kock, Ark
Union Trust & Savings Bank, East St.
200,000
Louis, 111
Clay County State Bank, Louisville, 111. 25,000

5,000

475,869

200,000 1,876,494
50,000 2,470,781
7,500
192,067

District No. 9.
25,000

3,000

180,418

50,000

10,000

373,006

25,000
30,000

10,000
15,000

145,062
171,254

25,000

10,000

229,007

100,000
60,000

2,500
15,000

814,010
494,648

District No. 10.

Capital City Bank, Santa Fe, N. Mex...
District No. 11.

First Guaranty State Bank, Valley
View, Tex
The First State Bank, Loraine, Tex

290,000

30,000

District No. 8.

State Bank of Nashau, Nashau, Mont...

290,000

4,

District No. 7.

Farmers Savings Bank, Lytton, Iowa...

16
28

125,000

District No. 4.

District No. 12.

Farmers Commercial & Savings Bank,
3
Oakley, Idaho
1,450,000 Farmers & Merchants Bank, Provo,
Utah
Bank of Vernal, Vernal, Utah

3,080,000

NOTE.—The Fidelity Trust Co., Tacoma, Wash., has been purchased
i Includes two increases of capital aggregating §250,000 incident to con- by the Bank of California, N. A., and its assets have been taken over by
the Tacoma branch of that bank.
solidations under the act of Nov. 7,1918.




359

FEDERAL RESERVE BULLETIN.

APKIL 1,1919.

Commercial Failures Reported.

DISTRICT No.

1.

Trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, assignee, receiver, committee
of estates of lunatics:
Brockton National Bank, Brockton, Mass.
Cape Anne National Bank, Gloucester, Mass.
County National Bank, Bennington, Vt.
Bristol National Bank, Bristol, Oonn.
New Britain National Bank, New Britain, Conn.
Merchants National Bank, New Haven, Conn.
Guardian of estates, assignee, receiver, committee of estates of lunatics:
People's National Bank, Brattleboro, Vt.
Trustee, executor, administrator, guardian of estates,
assignee, receiver, committee of estates of lunatics:
Ansonia National Bank, Ansonia, Conn.
Trustee, executor, administrator, guardian of estates,
receiver, committee of estates of lunatics:
New London City National Bank, New London, Conn.
Trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, assignee, receiver:
Torrington National Bank, Torrington, Conn.

Numbering only 430 in three weeks of
March, against 747 in the corresponding period
of 1918, commercial failures in the X:nited
States, as reported to R. G. Dun & Co., still
make a highly gratifying exhibit. With but
602 defaults, exclusive of receiverships of
three traction, light, and power companies in
the South, involving upward of $20,000,000,
the statement for February (the latest month
for which complete statistics are available) is
the best, in number of insolvencies, of any
month since last November, and marks the
most favorable showing of any February of
which there is record. Moreover, the February liabilities of $11,489,183, while somewhat above those of January, are less than in
any other month since last August, and are
DISTRICT No. 2.
the lightest of any February back to 1907.
executor, administrator, registrar of
Aside from the sixth district, where a small Trustee, guardian of estates, assignee, receiver, stocks and
committee
increase appears, and in the eleventh district, bonds, of lunatics:
of estates
where no change is shown, fewer failures
First National Bank, Canton, N. Y.
Harriman National Bank, New York City.
occurred during February in all of the 12
First National Bank, Jersey City, N. J.
Federal Reserve districts than in the same
Orange National Bank, Orange, N. J.
month of 1918, the reductions being proIllion National Bank, Illion, N. Y.
nounced in most instances. In respect to the
Merchants National Bank, Dunkirk, N. Y.
Herkimer National Bank, Herkimer, N. Y.
indebtedness, increases and decreases were
Second National Bank, Cooperstown, N. Y.
equall^v divided, but the smaller totals than
First National Bank, Perth Amboy, N. J.
last year in the first, third, fourth, fifth, ninth,
Garfield National Bank, New York City.
and tenth districts more than offset the ex- Trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, receiver, committee of espansion elsewhere.
Failures during February.
!

i

Number.

!

Liabilities.

Districts.
1919
First
Second
Third
Fourth....
Fifth
Sixth
Seventh...
Eighth....
Ninth
Tenth
Eleventh.
Twelfth...

64
102
37
40
27
4«
87
36
10
28
41
81

1918
139
153
65
93
51
IS
161
07
30
32
41
105

1919

2

S933, 961

; 08(5,546

447,770
845,343
381,910
623. «S81
802,884
424,740
118,400
265.103
930; 894
027,751

tates of lunatics:
First Bridgeport National Bank, Bridgeport, Conn.
City National Bank, Danbury, Conn.
Danbury National Bank, Danbury, Conn.
First National Bank, Ridgefield, Conn.
First National Bank, Stamford, Conn.
DISTRICT No.

1918
538,100
685,010
639,038
903.625
631,509
279.9.S9
1,814' 311
423,386
298,000
308,987
288,227
1,016.000

3.

Trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, assignee, receiver, committee of estates of lunatics:
Salem National Banking Co., Salem, N. J.
Mechanics National Bank, Trenton, N. J.
Lehign Valley National Bank, Bethlehem, Pa.
Union National Bank, Huntingdon, Pa.
Corn Exchange National Bank, Philadelphia, Pa.
Williamsport National Bank, Williamsport, Pa.




602

980 ! 11,489,183 j 12,829,182 Trustee,
!

DISTRICT NO. 4.

executor, administrator, registrar of stocks and
bonds, guardian of estates, assignee, receiver, committee
of estates of lunatics:
Lamberton National Bank, Franklin, Pa.
Fiduciary Powers Granted to National Banks.
Punxsutawney National Bank, Punxsutawney, Pa.
|
Second National Bank of Allegheny, Pittsburgh, Pa.
The applications of the following banks for j Trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, receiver, committee of estates
permission to act under section ll(k) of the of lunatics:
Federal Reserve Act have been approved by
First National Bank, Meadville, Pa.
the Federal Reserve Board during March:
First National Bank, Paris, Ky.
Total.

360

FEDERAL RESERVE

APRIL 1,1919.

Trustee under a will, registrar of stocks and bonds, trustee Guardian of estates, assignee, receiver, committee of
under a mortgage securing an issue of bonds, and such*
estates of lunatics:
other trust capacities, if any, as the proper courts in
First National Bank, Hopkinsville, Ky.
Ohio may authorize:
Citizens National Bank, El Dorado, Ark.
Trustee, executor, administrator, registrar of stocks and
National City Bank, Akron, Ohio.
bonds, guardian of estates, assignee, receiver:
Commercial National Bank, Coshocton, Ohio.
First National Bank, Batesville, Ark.
DISTRICT No. 5.

DISTRICT No. 9.
Trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, assignee, receiver, committee
Trustee, executor, administrator, registrar of stocks
of estates of lunatics:
and bonds, guardian of estates, assignee, receiver,
Merchants & Farmers National Bank, Charlotte, N. C.
committee of estates of lunatics:
First & Citizens National Bank, Elizabeth City, N. C.
First National Bank, Stillwater, Minn.
First National Bank, Abingdon, Va.
Winona National Bank, Winona, Minn.
Second National Bank, Hagerstown, Md.
Merchants National Bank, Crookston, Minn.
Wayne National Bank, Goldsboro, N. C.
Montana National Bank, Billings, Mont.
National Union Bank, Rock Hill, S. C.
Trustee, executor, administrator, registrar of stocks and
First National Bank, Huntington, W. Va.
bonds, guardian of estates, assignee, receiver:
Guardian of estates, assignee, receiver, committee of esFirst National Bank, Austin, Minn.
tates of lunatics:
Trustee, executor, administrator, registrar of stocks and
National Exchange Bank, Roanoke, Va.
bonds:
DISTRICT NO. 6.
First National Bank, Kalispell, Mont.
Trustee, executor, administrator, registrar of stocks and
DISTRICT N O . 10.
bonds, guardian of estates, assignee, receiver, comIJmittee of estates of lunatics:
Trustee, executor, administrator, registrar of stocks
First National Bank, Laurel, Miss.
and bonds, guardian of estates, assignee, receiver,
Citizens National Bank, Dickson, Tenn.
committee of estates of lunatics:
Guardian of estates, assignee, receiver, committee of
Colorado National Bank, Denver, Colo.
estates of lunatics:
Denver National Bank, Denver, Colo.
First National Bank, Meridian, Miss.
First National Bank, Denver, Colo.
First National Bank, Alexandria, La.
United States National Bank, Denver, Colo.
Trustee, executor, administrator, registrar of stocks and
Farmers National Bank, Sterling, Colo.
bonds, guardian of estates, assignee, receiver:
Citizens National Bank, Cheyenne, Wyo.
Third National Bank, Atlanta, Ga.
First National Bank, Powell, Wyo.
First National Bank, Rawlins, Wyo.
DISTRICT No. 7.
Trustee, executor, administrator, registrar of stocks and
Registrar of stocks and bonds:
bonds, guardian of estates, assignee, receiver:
Corn Exchange National Bank, Chicago, 111.
Citizens' National Bank, Boulder, Colo.
Trustee, executor, administrator, registrar of stocks and
First National Bank, Basin, Wyo.
bonds, guardian of estates, assignee, receiver, committee Registrar of stocks and bonds, guardian of estates, assignee,
of estates of lunatics:
receiver, committee of estates of lunatics:
Second National Bank, Charleston, 111.
Exchange National Bank, Colorado Springs, Colo.
State National Bank, Mattoon, 111.
Marion National Bank, Marion, Ind.
DISTRICT NO. 11.
Old National Bank, Fort Wayne, Ind.
Elston National Bank, Crawfordsville, Ind.
Trustee, executor, administrator, registrar of stocks and
First National Bank, Newcastle, Ind.
bonds, guardian of estates, assignee, receiver, committee
First National Bank, Council Bluffs, Iowa.
of estates of lunatics:
First National Bank, Marinette, Wis.
City National Bank, Dallas, Tex.
Guardian of estates, assignee, receiver, committee of
Western National Bank, San Angelo, Tex.
estates of lunatics:
First National Bank, San Angelo, Tex.
Commercial National Bank, Fond du Lac, Wis.
City National Bank, Wichita Falls, Tex.
Trustee, executor, administrator, guardian of estates,
assignee, receiver, committee of estates of lunatics:
DISTRICT NO. 12.
First National Bank, Rippey, Iowa.
Trustee, executor, administrator, registrar of stocks and
DISTRICT No. 8.
bonds, guardian of estates, assignee, receiver, committee
Trustee, executor, administrator, registrar of stocks
of estates of lunatics:
and bonds, guardian of estates, assignee, receiver,
Butte County National Bank, Chico, Calif.
committee of estates of lunatics:
Capital National Bank, Sacramento, Calif.
First National Bank, Santa Barbara, Calif.
State National Bank, Texarkana, Ark.
First National Bank, Everett, Wash.
State National Bank, St. Louis, Mo.
Dexter Hprton National Bank, Seattle, Wash.
First National Bank, Vandalia, 111.
First National Bank, Oroville, Wash.
Old State National Bank, Evansville, Ind.
Trustee, executor, administrator, guardian of estates, reFirst National Bank, Seymour, Ind.
ceiver, committee of estates of lunatics:
Citizens National Bank, Danville, Ky.
First 'National Bank of San Mateo County, Redwood
First Hardin National Bank, Elizabethtown, Ky.
City, Calif.
First National Bank, O'Fallon, 111.
Trustee, executor, administrator:
City National Bank, Paducah, Ky.
Hailey National Bank, Hailey, Idaho.
First National Bank, Carrollton, Mo.




APBIL 1,1919.

FEDERAL RESERVE BULLETIN.

361

RULINGS OF THE FEDERAL RESERVE BOARD.
Below are published rulings made by the
Federal Reserve Board which are believed to
be of interest to Federal Reserve Banks and
member banks.
Rediscount of paper secured by Government obligations
as authorized by the act approved March 3,1919.

Section 3 of an act approved March 3, 1919,
amends section 11 of the Federal Reserve Act
by the substitution of a new subsection (m),
which reads as follows:
"(m) Upon the affirmative vote of not less
than five of its members the Federal Reserve
Board shall have power to permit Federal Reserve Banks to discount for any member bank
notes, drafts, or bills of exchange bearing the
signature or indorsement of any one borrower
in excess of the amount permitted by section
nine and section thirteen of this act, but in no
case to exceed twenty per centum of the member bank's capital and surplus: Provided, however, That all such notes, drafts, or bills of exchange discounted for any member bank in excess of the amount permitted under such sections shall be secured by not less than a like
face amount of bonds or notes of the United
States issued since April twenty-fourth, nineteen hundred and seventeen, or certificates of
indebtedness of the United States: Provided
further, That the provisions of this subsection
(m) shall not be operative after December
thirty-first, nineteen hundred anditwenty."
Under the provisions of this section Federal
Reserve Banks are permitted upon the affirmative vote of not less than five members of the
Federal Reserve Board, to rediscount for any
one member bank, notes, drafts, or bills of exchange of any one borrower in excess of those
limits now imposed by sections 9 and 13 of the
Federal Reserve Act, provided that the aggregate in no case shall exceed 20 per cent, and
provided that any rediscounts over and above
10 per cent shall be secured by Government
obligations of the kinds specified.
The interpretation of this amendment is very
clear as to rediscounts for national member
banks, and the only question which might arise




is as to whether or not the power to rediscount
an additional 10 per cent of paper secured by
the proper Government obligations applies to
the oase of a State member bank which under
the State law has already loaned under the regular line of credit in excess of 10 per cent to one
borrower. Section 9, independent of the
amendment, provides in substance that if a
State bank has loaned in excess of 10 per cent
to any one borrower, the Federal Reserve
Bank can not rediscount for that bank any of
the paper of that borrower, but if, on the other
hand, it has not loaned in excess of 10 per cent,
then the State member bank shall be afforded
the regular rediscount privileges conferred by
section 13 up to the limits set forth in section 13.
The amendment of March 3, 1919, confers
powers "in excess of the amount" set forth in
sections 9 and 13 so that in order to give full
force to that part of the language which refers
to section 9 it must be interpreted to mean that
even though the State member bank has
loaned in excess of 10 per cent to one borrower
under his regular line of credit, nevertheless the
Federal Reserve Bank may rediscount paper of
that borrower which is secured by Government
obligations of the kinds specified, provided
that the aggregate of all rediscounts does not
exceed 20 per cent of the member bank's
capital and surplus.
If it were intended to authorize State member
banks to rediscount with their Federal Reserve
Banks, paper secured by Government obligations only in the case where the State bank has
loaned less than 10 per cent under its regular
line of credit, there could have been no purpose
in referring to section 9 in the amendment.
The Board therefore rules, under authority
granted in this amendment, that the Federal
Reserve Banks may rediscount, until December 31, 1920, for national and State member
banks, paper secured by not less than a like
face amount of bonds or notes of the United
States issued since April 24, 1917, or certifi-

362

FEDERAL RESERVE BULLETIN.

cates of indebtedness of the United States,
without regard to the amount the borrowing
bank may already have loaned to its borrower
under his regular line of credit; provided, however, that the aggregate of all rediscounts must
in no case exceed 20 per centum of the capital
and surplus of the member bank.
Illustration.—The result in a specific case
would be as follows: State member bank A has
loaned 15 per cent to X on his regular line of
credit and 15 per cent to X on the security of
Government obligations of the kinds specified
above. What and how much might the reserve
bank rediscount of these items? The regular
line being in excess of 10 per cent, section 9 applies and none of that paper may be rediscount ed but the amendment of March 3, 1919,
authorizes the rediscount of paper in tl excess"
of what could have been rediscounted heretofore under section 9 provided, first, that the excess be secured by Government obligations of
the kinds specified and provided, second, that
the aggregate in no event shall exceed 20 per
cent. In the case supposed, therefore, the
reserve bank could take all 15 per cent of the
paper secured hy the Government obligations
but none of the paper taken in X's regular line
of credit. If the commercial line had been 9 per
cent, for instance, the reserve bank could rediscount all of the 9 per cent, and in addition 11
per cent of the paper secured by Government
obligations, making a total of 20 per cent of the
capital and surplus of the member bank.

APRIL 1,1919.

Security covering acceptances in excess of 10 per cent
limitation of section 13.

Under the provisions of section 13 a member
bank may accept for any one customer in excess
of 10 per cent of its capital and surplus, provided it is secured by attached documents or
by some other actual security growing out of
the same transaction as to all acceptances in
excess of the 10 per cent limitation.
[See opinion of General Counsel in Law Department, p. 364.]

Loans by branch banks upon the security of growing
sugar crops.

The Federal Reserve Board is of the opinion
that the branch of a national bank located in
a sugar-producing country- may properly make
loans to sugar growers upon the security of
growing sugar crops conveyed to the bank for
that purpose, in accordance with the usual
banking custom of the locality in which the
branch is situated. Although the conveyance
may be absolute in form, nevertheless, because
of the custom of the country and the understanding between the parties title passes in
equity solely for the securit}^ of the loan. The
Board is of the opinion that under such circumstances the transaction does not constitute an
ultra vires purchase of a sugar crop. It is
rather a legitimate loan upon the security of a
growing crop conveyed solely for that purpose.
As a sugar crop is generally considered frucius
indusiriales as distinguished from frucius naiurales, a loan secured by such a crop is not subject to the limitations imposed by section 24 of
the Federal Reserve Act relating to loans upon
Section 11 (k) of the Federal Reserve Act.
real estate. It should be understood, however,
Under the provisions of section ll(k), as
amended by the act of September 26, 1918, the that it is subject to the limitations imposed by
Federal Reserve Board may properly permit section 5200 of the Revised Statutes.
any national bank to exercise any of the
fiduciary powers authorized by that section, Applicability of section 8 of the Clayton Antitrust Act to
banks located in suburban districts.
unless there is some express provision of the
Any bank located within the corporate limits
laws of the State in which such bank is located
which either directly or by necessary implica- of any city of more than 200,000 inhabitants
tion prohibits national banks from exercising comes within the prohibitions of section 8 of
such powers, and even if there is such an ex- the Clayton Antitrust Act, even though it be
press statute, the Board may issue its permit located in a suburban district. If the bank is
if any State bank, trust company, or other actually located within the corporate limits of
competing corporation in tKat State is per- the city it comes within that part of the promitted to exercise the powers applied for by visions of section 8 of the act which relates to
banks located in cities of more than 200,000
the national bank.
inhabitants.
[See opinion of General Counsel in Law Department, p. 363.]




APKIL 1,1919.

FEDERAL RESERVE BULLETIN.

363

LAW DEPARTMENT.
The following opinions of General Counsel tions are authorized to exercise those powers.
have been authorized for publication by the In other words, in a State where State banks
Board since the last edition of the BULLETIN: or trust companies may exercise all of these
eight powers with the exception of "adminisSection ll(k) of the Federal Reserve Act.
7
Under the provisions of section ll(k), as amended by trator/ for instance, may national banks lothe act of September 2G, 1918, the Federal Reserve Board cated in that State be permitted to act in that
may properly permit any national bank to exercise any capacity ?
of the fiduciary powers authorized by that section, unless
Under the interpretation of the term "when
there is some express provision of the laws of the State in
not in contravention of State or local law" as
which such bank is located which either directly or by
necessary implication prohibits national banks from ex- construed before the amendment of September
ercising such powers and even if there is such an express 26, 1918, and as generally followed by the
statute, the Board may issue its permit if any State bank, Federal Reserve Board prior to that date,
trust company, or other competing corporation in that there is no doubt that the Board may permit a
State is permitted to exercise the powers applied for by
national bank in such a case to act as '' administhe national bank.
trator" if there is no express provision in the
MARCH 31, 1919.
laws of the State which either directly or by
An opinion has been asked with reference necessary implication prohibits national banks
to the construction of section ll(k) of the from acting in that capacity.
Federal Eeserve Act as amended by the act of
It may be argued that the second paragraph
September 26, 1918. That section as amended
quoted above was intended to make a complete
provides in part that the Federal Reserve
and exclusive definition of what constitutes
Board shall be authorized and empowered:
"when not in contravention of State or local
"To grant by special permit to national law" and that even though there is no express
banks applying therefor, when not in contra- provision of the State law which prohibits
vention of State or local law, the right to act
as trustees, executor, administrator, registrar national banks from exercising any particular
of stocks and bonds, guardian of estates, as- fiduciary power, nevertheless such banks shall
signee, receiver, committee on estates of luna- not be permitted to act in any fiduciary
tics, or in any other fiduciary capacity in which capacity in which a State bank, trust company,
State banks, trust companies, or other corpora- or other competing corporation can not act.
tions which come into competition with national banks are permitted to act under the It does not appear, however, that this conlaws of the State in which the national bank struction can properly be supported nor that
is located.
it is consistent with the purposes for which the
"Whenever the laws of such State authorize amendment was enacted.
or permit the exercise of any or all of the foreThe phrase "when not in contravention of
going powers by State banks, trust companies,
State or local law" is the only restrictive
or other corporations which compete with national banks, the granting to and the exercise clause applicable in this discussion, for it is
of such powers by national banks shall not be apparent that the succeeding paragraph is
deemed to be in contravention of State or locaJ permissive rather than restrictive and operates
law within the meaning of this act."
solely as an exception to the restrictive clause
The question for determination is whether a of the first paragraph. The purpose of this
national bank may exercise any of the eight exception was merely to insure to a national
powers expressly set forth in the law quoted bank the right to exercise fiduciary powers in
above in any case where neither State banks, any case where a State bank, trust company,
trust companies, nor other competing corpora- or other competing corporation is permitted




364

FEDERAL RESERVE BULLETIN.

APRIL 1,

1919.

under the State law to exercise those powers, I by section 11 (k) unless there is an express
even if the State laws should contain an statute of the State in which the national
express provision either directly or by neces- bank is located which either directly or by
sary implication prohibiting national banks necessary implication prohibits a national bank
from exercising those powers, and that even in
from doing so.
In other words, the sole fact that Congress the case where there is such an express statute,
expressly provided that it is not in contraven- the Board may approve the application if any
tion of State law within the meaning of the State bank, trust company, or other competing
first paragraph of section 11 (k) for a national corporation in that State is permitted to exerbank to exercise any fiduciary power which a cise the powers applied for by the national
State bank or trust company may exercise, bank. That, I believe, wTas the intention of
can not of itself reasonably be construed to Congress and the purpose of the law as
imply that it is in contravention of State law amended.
for a national bank to exercise a fiduciary
power which a State bank or trust company | Security covering acceptances in excess of 10 per cent
limitation of section 13.
can not exercise. If that had been the inten- '
tion of Congress the term "when not in contra- Under the provisions of section 13 a member bank may
vention of State or local law" would have been accept for any one customer in excess of 10 per cent of its
omitted from the first paragraph and the capital and surplus, provided it is secured by attached
documents or by some other actual security growing out
second paragraph w^ould have been made to of the same transaction as to all acceptances in excess of
read substantially as follows:
that 10 per cent limitation.
"No national bank shall be permitted to
APRIL 1, 1919.
exercise any of the foregoing powers which
In an opinion of this office, printed on
neither State banks, trust companies, nor
other competing corporations are permitted page 254 of the March, 1919, BULLETIN, it was
stated that although section 13 of the Federal
to exercise under the State law."
Reserve Act authorizes member banks to
That, however, was not done. The restric- accept drafts drawn in domestic transactions
tive phrase "when not in contravention of only when secured at the time of acceptance,
State or local law^" was retained in the first nevertheless, the security may properly be
paragraph without change and the second and released after acceptance, provided, however,
supplementary paragraph was inserted solely that in any case where the total amount acto protect national banks from any possible cepted for any one customer exceeds 10 per
discrimination on the part of State legislators. cent of the capital and surplus of the accepting
In short, while giving to the legislature of each bank the security can not be released unless
State in the first paragraph, the right expressly some other actual security growing out of the
to prohibit national banks from exercising same transaction is substituted therefor.
fiduciary powers, Congress, in the second paraThe question has since been raised whether
graph, eliminates the possibility of discrimithe accepting bank may release the security
nation against national banks by providing, as
against drafts aggregating 10-per cent of the
a rule of law, that no State statute shall be
capital and surplus of the bank in a case where
construed to prohibit a national bank from
the total amount of drafts accepted for one
exercising any fiduciary power which a State
customer and outstanding at one time is in
bank, trust company, or other competing
excess of that limit.
corporation can exercise.
Section 13 provides in part that:
It is respectfully submitted, therefore, that
"No
shall accept, whether
the Federal Reserve Board may legally ap- foreign member bank transaction, for any in a
or domestic
one
prove the application of any national bank to person, company, firm, or corporation "to an
exercise any of the fiduciary powers authorized amount equal at any time in the aggregate to




APRIL 1,

1910.

FEDERAL EESERVE BULLETIN.

more than ten per centum of its paid-up and
unimpaired capital stock and surplus, unless
the bank is secured either by attached documents or by some other actual security growing
out of the same transaction as the acceptance;
and no bank shall accept such bills to an
amount equal at any time in the aggregate to
more than one-half of its paid-up and unimpaired capital stock and surplus.77
The question under consideration involving
a construction of this paragraph may present
itself in either one of two ways:
First. Under the provisions of the section
quoted above, a bank may properly accept for
one individual at one time drafts aggregating
as much as 50 per cent of its capital and surplus if the bank is secured either by attached
documents or by some other actual security
growing out of the same transaction as the
acceptance. In such a case may the bank
after acceptance release the security covering
drafts aggregating 10 per cent of its capital and
surplus if it retains the security covering the
balance of the drafts ?
Second. Under the provisions of the section
quoted above, a bank may properly accept for
one individual drafts aggregating 10 per cent
of its capital and surplus and immediately
thereafter release the security against that 10
per cent. The question then is whether the
bank may properly accept additional drafts
for the customer before the first drafts have
been liquidated if the bank holds some actual
security to cover those additional acceptances ?
A careful consideration of the provisions ol
the law indicates that Congress intended that
the accepting bank may properly rely upon
the general credit of the customer in acceptance
transactions up to 10 per cent of its capital
and surplus; but that for any acceptance liability in excess of that amount, incurred for
that same customer, it must hold some actual
security.
In the second case mentioned above, therefore, where a bank has accepted for a customer
drafts aggregating 10 per cent of its capital and
surplus, it may accept additional drafts for
that same customer even before the first drafts
have been liquidated and even though it no
longer holds any security against those first




365

drafts; provided, of course, that it holds some
actual security against the additional drafts.
It seems certain that Congress did not intend in any case of that character entirely to
prohibit the additional acceptances, but that
it intended to authorize them only if the accepting bank retains some actual security
against those additional acceptances so long as
they constitute an acceptance liability in excess of 10 per cent of its capital and surplus.
If this were not the proper construction of the
law, a bank which unquestionably might have
accepted ior one customer drafts aggregating
even as much as 50 per cent of its capital and
surplus wiien secured, would be limited to 10
per cent for that same customer if it had outstanding any acceptances of the customer, no
matter how small in amount^ against which it
had already released the security. Or to put
it another way—a bank which had accepted
for one customer unsecured drafts aggregating
10 per cent of its capital and surplus growing
out of an export transaction w^ould not be permitted to accept any domestic drafts whatever
for that same customer, unless the law is construed, to mean that the security provided
for in the section quoted above is required only
as to the amount over and above the 10 per
cent limitation.
I believe that both the letter and the spirit
of the law authorize the accepting bank to rely
upon the general credit of the customer on its
acceptance liabilities up to an amount equal
to 10 per cent of its capital and surplus, and
that in the first case described above it may
release the security against drafts aggregating that amount, provided that it holds some
actual security against the balance of the drafts
accepted for that customer, and that in the
second case described above it may accept
the additional drafts over and above the 10
per cent limit, even though it has previously
released the security against the first drafts,
provided that it retains some actual security
against those additional drafts as long as they
constitute an acceptance liability in excess of
10 per cent of the bank's capital and surplus.

366

FEDERAL KESERVE BULLETIN.

APRIL 1,

1919.

Carolina so as to authorize State banks joining
the Federal Reserve system to carry the same
The Federal Reserve Board may properly authorize reserves as are required of other member banks
national banks located in Hawaii to exercise the fiduciary by the Federal Reserve Act. As so reenacted
powers authorized by section ll(k) of the Federal (by an act, House Bill 399, Senate Bill 556;
ratified February 19, 1919), section 231 reads
Reserve Act.
as follows:
MARCH 13, 1919.
Right of national banks located in Hawaii to exercise
fiduciary powers.

An opinion has been asked on the question
whether the Federal Reserve Board may, under
the provisions of section 11 (k) of the Federal
Reserve Act, authorize a national bank located
in Hawaii to exercise fiduciary powers, even
though such banks are not stockholders in any
Federal Reserve Bank.
Section 11 (k) authorizes the Board to issue
its permit "to national banks applying therefor,
when not in contravention of State or local law."
The authority of the Board conferred by this
section is not limited to those national banks
which are member banks, so that the fact that
national banks located in Hawaii may not be
members of the Federal Reserve System does
not of itself restrict the right of the Federal
Reserve Board to issue its permit under this
section of the law.
The sole question for determination, therefore, is whether the exercise of fiduciary powers
by a national bank would be in contravention
of the local laws of Hawaii within the meaning
of the Act. Inasmuch as there does not appear
to be any express provisions of the laws of that
territory which either directly or by necessary
implication prohibits a national bank located
there from exercising such powers, it is the
opinion of this office that it would not be in
contravention of those laws for a national bank
to exercise any of the powers permitted by
section 11 (k) and that the Federal Reserve
Board may, therefore, properly issue its permit.
Amendments to State Banking Laws.

The following recent enactments of various
State Legislatures which amend the State banking laws are published for the information of
the Federal Reserve Banks and member banks.
NORTH CAROLINA.

The General Assembly of North Carolina
recently amended and reenacted section 231
of chapter 7 of the Revised Code of North*




Every bank or banking and trust company doing business and engaging in banking, trust, fiduciary or surety
business and dealing in real estate, shall at all times have
on hand as reserve in available funds an amount equal
to at least fifteen per cent of the aggregate amount oi its
demand deposits and five per cent on time deposits. But
no reserve shall be required on deposits secured by United
States bonds or North Carolina State bonds.
Demand deposits within the meaning of this act shall
comprise all deposits payable within thirty days, and time
deposits shall comprise all deposits payable after thirty
days, all savings accounts and certificates of deposit which
are subject to not less than thirty days' notice before payment and all postal savings deposits.
Any bank that is now or may hereafter become a member
of a Federal Reserve system, shall maintain the same
reserves with respect to deposits as shall be required of
other members of such Federal Reserve system.

Another act passed by the same assembly
and ratified February 24, 1919 (House Bill
221, Senate Bill. 327) authorizes banks and
trust companies to accept drafts or bills of
exchange drawn upon them. This act is similar to the corresponding provisions of the
Federal Reserve Act, except that it expressly
authorizes State banks and trust companies,
to endorse bills of exchange drawn upon
another and except that it docs not require
drafts drawn in domestic transactions to be
secured at the time of acceptance by shipping
documents or warehouse receipts. The accepting bank, however, must be secured in any
case where the aggregate amount accepted for
any one person, company, firm, or corporation
exceeds ten per cent of the bank's capital and
surplus. This act reads, in part, as follows:
Section 1. Banking corporations and banking and trust
companies doing a fiduciary business shall have power to
accept drafts of bills or exchange drawn upon them, and
to endorse drafts or bills of exchange drawn upon another
having not more than six months' sight to run, exclusive
of days of grace, which grow out of transactions involving
the importation or exportation of goods, or which grow
out of transactions involving the domestic shipment of
goods: Provided, no such banking corporation or banking
and trust company, doing a fiduciary business shall accept
or endorse, whether in a foreign or domestic transaction,
for any one person, company, firm or corporation to an
amount equal at any time in the aggregate to more than
ten per centum of its paid up and unimpaired capital
stock and surplus, unless the banking corporation or banking and trust company doing a fiduciary business is
secured, either by attached documents or by some other
actual security growing out of the same transaction as
the acceptance; and no such banking corporation or
banking and trust company doing a fiduciary business
shall accept or endorse such bills or drafts to an amount
equal at any one time in the aggregate to more than one-

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

half of its paid up and unimpaired capital stock and
surplus: Provided, however, that the Corporation Commission under such general regulations as it may prescribe,
which shall apply to all banking corporations or banking
and trust companies doing a fiduciary business alike
regardless of the amount of capital stock and surplus,
may authorize any banking corporation or banking and
trust company doing a fiduciary business to accept or
endorse such bills or drafts to an amount not exceeding at
any time in the aggregate one hundred per centum of its
paid up and unimpaired capital stock and surplus; Provided further, that the aggregate of acceptances growing
out of domestic transactions shall in no event exceed
fifty per centum of such capital stock and surplus.

SOUTH DAKOTA.
The South Dakota Legislature recently enacted the following law (senate bill 196) permitting State banks and trust companies which
become members of the Federal Reserve System
to be examined by the Federal Reserve Board
and authorizing the State authorities to disclose to the Federal Reserve Board all information in reference to the affairs of such banks
and trust companies:
Any bank or trust company that is now or hereafter
becomes a member of the Federal ^Reserve System shall
continue to be subject to the supervision and examination
required by the laws of this State, except that the Federal
Reserve Board shall have the right, if it deems necessary,
to make examinations; and the authorities of this State
having supervision over such bank or trust company may
disclose to the Federal Reserve Board, or to examiners
duly appointed by it, all information in reference to the
affairs of any bank or trust company which has become,
or desires to become, a member of a Federal Reserve Bank.

367

SEC. 3. Be it further enacted, That any bank or trust company incorporated under the laws of this State which is,
or which becomes, a member of a Federal Reserve Bank
is by this act vested with all powers conferred upon member banks of the Federal Reserve Banks by the terms of the
Federal Reserve Act as fully and completely as if such
powers were specifically enumerated and described herein,
and all such powers shall be exercised subject to all
restrictions and limitations imposed by the Federal
Reserve Act, or by regulations of the Federal Reserve
Board made pursuant thereto. The right, however, is
expressly reserved to revoke or to amend the powers
herein conferred.
SEC. 4. Be it further enacted, That a compliance on the
part of any such bank or trust company with the reserve
requirements of the Federal Reserve Act shall be held
to be a full compliance with those provisions of the laws
of this State which require banks or trust companies to
maintain cash balances in their vaults or with other banks,
and no such bank or trust company shall be required to
carry or maintain reserve other than such as is required
under the terms of the Federal Reserve Act.
SEC. 5. Be it further enacted, that any such bank or
trust company shall continue to be subject to the supervision and examinations required by the laws of this
State, except that the Federal Reserve Board shall have
the right, if it deems necessary, to make examinations; and
the authorities of this State having supervision over such
bank or trust company may disclose to the Federal Reserve
Board, or to examiners duly appointed by it, all information in reference to the affairs of any bank or trust company
which has become, or desires to become, a member of
a Federal Reserve Bank.
SEC. 6. Be it further enacted, That all acts and parts of
acts inconsistent herewith are hereby repealed, and that
this act take effect from and after its passage, the public
welfare requiring it.

The General Assembly of Tennessee also recently enacted the following act (Public Acts,
1919, chap. 31) authorizing State banks and
TENNESSEE.
trust companies to accept drafts and issue bills
The General Assembly of Tennessee recently of exchange:
enacted with some modifications an act recom- SECTION 1. Be it enacted by the General Assembly of the
mended by the Federal Reserve Board to State of Tennessee: That all banks and trust companies
bring about greater coordination in the powers organized and doing business under the laws of this State
authorized
of State and national banks and to promote be and they are herebythem and toto accept timeofbills of
exchange drawn upon
issue letters
credit
uniformity in State and Federal banking laws. authorizing holders thereof to draw drafts upon them or
their correspondents at sight or on time not exceeding
The Tennessee act reads as follows:

one year.
SECTION 1. Be it enacted by the General Assembly of the
WEST VIRGINIA.
State of Tennessee, That the words "Federal Reserve Act"
as herein used shall be held to mean and to include the
The Federal Reserve Board has been advised
act of Congress of the United States approved December
23, 1913, as heretofore and hereafter amended. The that the West Virginia Legislature recently enwords "Federal Reserve Board" shall be held to mean the acted an act recommended by the Federal
Federal Reserve Board created and described in the
Federal Reserve Act. The words "Federal Reserve Reserve Board to bring about greater coorBank" shall be held to mean the Federal Reserve Banks dination in the powers of State and national
created and organized under authority of the Federal banks and to promote uniformity in State
Reserve Act. The words "Member bank" shall be held
to mean any National bank, State bank, or banking and and Federal banking laws. No printed copy
trust company which has become or which becomes a of this act as enacted in West Virginia has
member of one of the Federal Reserve Banks created by been received by the Board, but the draft
the Federal Reserve Act.
recommended by the Board reads, in part,
SEC. 2. Be it further enacted, That any bank or trust as follows:
company incorporated under the laws of this State shall
have the power to subscribe to the capital stock and become
SECTION 1. The words "Federal Reserve Act" as herein
a member of a Federal Reserve Bank.
used shall be held to mean and to include the act of Con-




368

FEDERAL RESERVE BULLETIN.

gress of the United States approved December 23, 1913, as
heretofore and hereafter amended.
The words "'Federal Reserve Board" shall be held to
mean the Federal Reserve Board created and described
in the Federal Reserve Act.
The words ''Federal Reserve Bank" shall be held to'
mean the Federal Reserve Banks created and organized
under authority of the Federal.Reserve Act.
The words "member bank" shall be held to mean any
national bank, State bank or banking and trust company
which has become or which becomes a member of one of
the Federal Reserve Banks created bv the Federal Reserve
Act.
SEC. 2. That any bank or trust company incorporated
under the laws of this Commonwealth shall have the power
to subscribe to the capital stock and become a member of
a Federal Reserve Bank.
SEC. 3. Any bank or trust company incorporated under
the laws of this Commonwealth which is, or which becomes,
a member of a Federal Reserve Bank, is by this act vested
with all powers conferred upon member banks of the
Federal Reserve Banks by the terms of the Federal Reserve Act as fully and completely as if such powers were
specifically enumerated and described herein, and all
such powers shall be exercised subject to all restrictions
and limitations imposed by the Federal Reserve Act, or
by regulations of the Federal Reserve Board made pursuant thereto. The right, however, is expressly reserved
to revoke or to amend "the powers herein conferred.
SEC. 4. A compliance on the part of any such bank or
trust company with the reserve requirements of the Federal Reserve Act shall be held to be a full compliance
with those provisions of the laws of this State which require
banks or trust companies to maintain cash balances in
their vaults or with other banks, and no such bank or
trust company shall be required to carry or maintain reserve other than such as is required under the terms of
the Federal Reserve Act.
SEC. 5. Any such bank or trust company shall be subject to the examinations required under the terms of the
Federal Reserve Act, and the authorities of this State
having supervision over such bank may, in their discretion, accept such examination in lieu of the examination
required under the laws of this Commonwealth. Such
authorities, their agents and employees, may furnish to
the Federal Reserve Board, the Federal Reserve Banks,
or to examiners duly appointed by the Federal Reserve
Board, or the Federal Reserve Banks, copies of all examinations made and may disclose to such Federal Re-




APRIL 1,1919.

serve Board, Federal Reserve Banks, or examiner, any
information with reference to the condition or affairs of
State banks or trust companies organized under the laws
of this State which become members of a Federal Reserve
Bank, or which apply for membership in a Federal Reserve Bank.
SEC. 6. All acts and tho parts of acts inconsistent herewith are hereby repealed.

The West Virginia Legislature has also recently amended the banking laws of that State
so as to authorize State banks to accept drafts.
Barnes' Code, chapter 4, section 78, as so
amended, reads as follows:
SEC. 78. Every such bank may exercise, under the laws
of this State, all such incidental powers as may be necessary to carry on the business of banking, by discounting
promissory notes, negotiating drafts, bills of exchange, and
other evidences of indebtedness, receiving deposits, buying and selling exchange, bank notes, bullion, or coin,
and by loaning money on personal or other security. Any
banking institution may accent for payment at a future
date drafts drawn upon it by its customers, and to issue
letters of credit authorizing the holders thereof to draw
drafts upon it or its correspondents, at sight or on time,
not exceeding one year.
WYOMING.

The Legislature of Wyoming recently enacted
the following la,w (act 21, 15th Legislature,,
approved Feb. 19, 1919) authorizing State
banks and trust companies to become members
of the Federal Reserve system:
SECTION 1. The words "Federal Reserve Act" as herein
used shall be held to mean and to include the act of Congress of the United States approved December 23 d, 1913,
as heretofore and hereafter amended.
The words "Federal Reserve Bank" shall be held to
mean the Federal Reserve Banks created and organized
under authority of the Federal Reserve Act.
SEC . 2. That any bank or trust company incorporated
under the laws of this State shall have the power to subscribe to the capital stock and become a member of a
Federal Reserve Bank.

APHI-L 1,

369

FEDERAL RESERVE BULLETIN.

1919.

BANK TRANSACTIONS DURING FEBRUARY-MARCH.

Debits to individual account reported by
clearing-house banks in 152 leading cities for
the four weeks ending March 19 averaged about
2 per cent larger than for the preceding four
weeks. This increase was due, however, exclusively to the large total for the week ending
March 19, when over 1 billion of tax payments were made, largely in the form of bank
checks and drafts. The smallest total is shown
for the week ending February 26, which covers

only five days7 operations owing to the general
observance of February 22 as a legal holiday.
Weekly totals of debits to bank account,
while moving in the same direction, show,
however, smaller changes, especially for the
week ending March 19.
Figures of reporting clearing-house centers
by Federal Reserve districts are shown as
follows:

Weeklyfiguresof clearing-house bank debits to deposit accounts.
[In thousands of dollars; i. c , 000 omitted.]
Debits to individual account.

Debits to banks' and bankers' account.

District.
eb. 26.
No. 1—Boston:
Bangor
Boston
Fall River
Hartford
Holyoke
Lowell
New Bedford
New Haven
Providence
Springfield
Waterbury
Worcester
No. 2—New York:
Albany
Binghamton
Buffalo
New York
Passaic
Rochester
Syracuse
No. 3—Philadelphia:
Altoona.
Chester
Harrisburg
Johnstown
Lancaster
Philadelphia
Reading
Scranton
Trenton
Wilkes-Barre
Williamsport
Wilmington
York....
No. 4—Cleveland:
Akron
Cincinnati
Cleveland
Columbus
Dayton
Erie
Greenburg, Pa
Lexington
Oil City
Pittsburgh
Springfield
Toledo
Wheeling
Youngstown
No. 5—Richmond:
Baltimore
Charleston
Charlotte...
Columbia
Norfolk
Raleigh
Richmond




Mar. 5.

Feb. 26.

Mar. 5.

Mar. 12.

Mar. 19.

2,364
208,786
4,926
14,353
2,089
3,578
4,895
13,884
20,988
9,739
6,400
10,512

2,675
253,984
5,601
20,784
2,894
4,217
5,177
14,770
25,850
12,457
6,110
13,487

2,512
225,792
4,895
17,190
2,437
4,301
5,214
14,531
24,610
11,300
5,063
11,590

3,016
271,524
6,514
22,354
2,608
4,397
6,336
15,841
30,763
12,871
6,715
14,049

301
157,058
205
1,103
568
258
1,391
343
433
857

316
189,793
262
1,583
475
308
163
372
1,572
390
386
1,472

20,082
2,298
43,320
513,436
2,566
20,267
9,386

20,586
3,344
54,718
3,979,552
2,944
24,930
13,619

17,907
2,644
44,165
1,587,911
' 2,652
22,042
10,348

16,016
2,940
56,413
4.325,624
3,152
27,611
15,365

10;,834

10,482

8,130

9,337

8,344
1,386', 758
'298
465
271

7,815
1,666,278
345
634
486

9,035
1,467,603
216
727
675

9,432
1,633,776
211
589
479

2,071
4,104
4.577
2; 737
3,338
246,140
3,229
11,954
7,603
5,100
2,547
10,084
2,380
12,976
47,460
99,871
19,888
9,972
5,700
2,068
8,516
2,212
151,457
2,814
20,906
6,058
11,880

2,416
4,694
5,290
3,136
4,321
279,281
3,605
9,911
8,891
6,703
3,039
8,800
2,928
18,420
50,809
121,148
22,545
11,594
5,783
2,587
9,607
2,312
192,185
3,981
18,451
7,864
12,862

2,315
3,901
5,240
2,735
4,316
281,940
3,618
11,194
8,319
5,187
2,732
7,968
3,063

2,446
4,035
3,750
3,117
4,603
304,806
4,155
9,005
8,566
5,998
3,312
9,985
3,380

292
222
301,586

66
15
154
51
341,765

5
3
224
217
289,376

56
3
168
37
133,469

2,032
232
60
165

1,804
204
82
634

2,027
228
102
870

16,550
46,376
103,730
23,546
10,384
5,510
2,165
8,303
2,345
128,181
2,931
21,363
7,392
13,176

16,320
65,100
152,003
9,897
6,576
1,985
6,900
2,382
176,862
3,116
25,274
8,271
10,765

6,600
2,542
280,159
2,272
6,216

63,366
6,521
5,061
4,635
16,455
5,200
21,318

78,332
8,370
5,500
6,148
16,613
4,500
23,160

62,744
6,802
3,600
6,359
15,125
2,500
20,520

80,319
7,102
6,200
6,427
16,661
5,250
23,471

1,527
113
238

478
165,489
554
1,561
506
242
190
373
1,350
351
347
1,172

181,471
470
1,459
542
296
170
955

1,500
529
605
1,445

"53"

61

90

79

36,300
92,747
2,699
627
101

122
33,540
113,345
4,219
597
54

115
48,316
107,804
3,752
462
54

55
50,000
122,839

4,709
2,121
306,732
2,215

559

6,950
2,655
404,570
2,415
7,549
7,724
901

4,224
2,682
409,567
2,174
11,502
7,482
318

33,310
2,527
7,385
3,213
20,580
3,000
61,048

41,527
2,758
7,300
3,060
21,842
3,900
65,168

34,859
2,876
4,100
3,049
21,773
2,500
56,345

'601

79

39,660
3,170
9,100
3,231
19,795
4,000
60,822

370

FEDERAL RESERVE BULLETIN.

AFKIL 1, 1910.

Weeklyfiguresof clearing-house bank debits to deposit accounts—Continued.
Debits to individual account.

Debits to banks' and bankers' account.

District.
Feb. 26.

19,538
6,247
13,439
6,943
9,911
4,059
5,626
6,012
2,951
19,972
58,810
1,868
10,096
4,439
1,565




23,753
6,569
13,563
8,448
11,519
5,213
5,080
6,930
3,865
20,293
54,300
2,045
10,869
4,600
1,985

22,321
5,331
12,105
8,625
8,983
5,068
4,613
5,912
4,324
19,359
60,361
2,453
11,104
4,622
1 741

2,243
2,088
4,124
511,115
7,872
2,416
14,182
89,557
1,707
6,072
4,533
16,559
24,501
2,406
3,227
41,523
10,942
3,928
15,948
2,465
2,589
2,422

2,542
5,015
5,915
611,728
9,036
4,318
25,551
97,504
2,200
5,553
5,143
14,224
30,941
3,070
3,906
47,817
10,047
5,904
14,233
2,832
7,321
4,101

2,848
5,553
500,124
6,160
3,045
25,266
84,809
2,360
5,725
4,625
17,279
25,278
2,645
3,625
47,352
8,756
5,129
16,684
4,800
4,685
3,443

3,501
6,678
36,376
34,674
109,286

4,513
7,627
53,765
27,026
128,590

1,616
9,575
1,765
946
2,412
2,249
54,292
32,507
1,578
826

No. 6—Atlanta:
Atlanta
Augusta
Birmingham
Chattanooga
Jacksonville
Knoxville
Macon
Mobile
Montgomery
Nashville
New Orleans
Pensacola
Savannah
Tampa
Vicksburg
No. 7—Chicago:
Bay City
Bloomington
Cedar Rapids
Chicago
Davenport
Decatur
DesMoines
Detroit
Dubuque
Flint
Fort Wayne
Grand Rapids
Indianapolis
Kalamazoo
Lansing
Milwaukee
Peoria
Rockford,Ill
Sioux City
South Bend
Springfield
Waterloo, Iowa
No. 8—St. Louis—
Evansville
Little Rock
Louisville
Memphis
St. Louis
No. 9—Minneapolis:
Aberdeen
Billings
Duluth
Fargo
Grand Forks
Great Falls
Helena
Minneapolis
St. Paul
Superior
Winona
No. 10—Kansas City:
Atchison
Bartlesville, Okla-..
Colorado Springs - - Denver
Joplin
Kansas City, Kans Kansas City, Mo-..
Muskogec, Okla
Oklahoma City
Omaha
Pueblo
St. Joseph
Topeka
Tulsa
Wichita
No. 11—Dallas:
Albuquerque
Austin
Beaumont
Dallas. ..i
El Paso
Fort Worth
Galveston
Houston
San Antonio

Mar. 5.

Mar. 12.

Mar. 19. Feb. 26.

26,131
6,212
13,461
12,218
10,713
6,088
5,358
5,995
4,160
21,104
65,970
2,089
12,570
5,061
1,671
3,310
2,659
4,423
576,649
7,344
3,369
19,699
121,607
2,000
6,300
4,120
15,955
28,136
3,258
4,277
65,137
11,407
4,484
14,823

Mar. 5.

19,128
1,600
4,917
3,792
7,578
1,604
1,936
649
458
11,544
30,913
849
6,238
1,405
172

Mar. 12.

Mar. 19.

21,699
2,119
5,309
4,032
8,768
1,539
2,627
753
480
13,382
34,925
841
9,156
1,613
130

22,062
2,318
4,666
4,030
10,106
1,542
2,983
889
554
16,226
• 35,503
1,342
7,031
1,584
143

32,890
2,203
4,849
4,681
9,299
1,637
8,255
800
652
17,265
35,264
1,042
8,466
2,953
179

275
2,222
13,814
636,196
2,755
1,149
56,576
41,629
1,760
51
2,569
3,-808
30,479
434
186

M98
1,005

1,463
2,764
1,868

4,771
6,408
43,646
27,967
114,632

4,069
7,791
38,097
26,100
152,869

1,147
5,942
36,710
21,747
108,723

1,433
6,189
49,905
24,180
126,268

1,387
5,679
45,456
23,467
123,647

420
1,249
11,901
600,361
2,108
833
43,514
51,539
4,027
64
1,810
4,187
21,990
473
244
32,415
3,159
233
17,970
2,104
1,206
1,573
M
3,370
6,546
41,020
24,085
132,037

1,224
2,765
12,893
2,214
1,621
2,178
2,299
62,299
36,824
2,020
931

1,233
2,030
11,393
2,057
"1,268
1,926
2,653
62,783
32,162
1,730
922

1,159
1,947
13,205
3,728
1,050
2,142
1,899
71,174
34,943
1,208
812

697
836
3,250
2,040
750
3,166
2,451
51,744
35,431
121
6T8

814
846
3,676
2,168
989
2,961
2,651
67,433
44,097
165
1,085

881
871
4,010
2,062
1,016
2,349
2,350
71,370
42,635
119
1,209

970
812
3,963
2,765
940
2,499
2,591
74,516
40,878
100
1?261

872
1,436
1,718
21,426
2,869
2,680
83,918
2,833
10,838
56,947
3,250
22,743
3,842
16,062
8,225

1,119
2,504
2,745
32,000
2,986
2,713
118,209
2,582
11,641
64,322
2,895
25,059
5,390
18,839
8,876

1,901
2,071
26,497
2,951
3,183
84,079
3,587
12,073
61,068
3,550
13,476
4,328
18,001
10,290

943
2,116
2,556
26,682
2,918
3,136
90,691
3,424
11,436
65,236
3,206
17,674
5,806
18,336
10,695

432
51
720
17,759
399
4,378
155,785
1,746
8,469
54,744
598
16,152
1,414
7,974
10,282

661
76
882
22,821
607
5,629
154,285
2,348
11,596
85,035
823
10,695
1,711
8,430
12,468

725
77
617
25,112
559
5,976
180,326
1,683
10,524
99,306
1,261
16,371
1.916
8,664
12,302

520
43
1,109
25,958
619
5,329
166,336
2,174
9,292
78,112
1,137
19,633
1,892
9,080
11,953

1,296
2,523
3,678
24,942
6,074
15,935
5.040
19,305
15,449
1

4,606
3,045

485
1,414
16,471
610,552
2,334
846
58,603
41,619
1,787
29
2,293
3,807
23,636
549
148
29,829
3,777
389
26,327
2,300
1,502
2,215

1,052
2,550
3,555
28,754
6,853
14,795
4,712
19,871
15,827

1,361
3,572
3,804
29,879
7,574
16,426
5,432
25,924
^,830

1,438
5,791
3,447
30,679
6,121
16,920
4,927
22,818
l
6,396

2,983
2,388
354
52,806
7,453
33,539
4,168
40,300

2,608
2,290
306
62,757
7,140
30,584
2,978
38,640

3,514
4,052
475
62,633
8,221
39,093
4,135
45,711

4,095
3,368
396
56,657
7,967
39,661
5,399
47,041

1,099
7,712
486,194
1,645
443
30,977
36,490
1,000
24
1,565
3,438
20,539
351
181
23,692
1,935
153
14,637
1.454

Figures comprise debits to individual as well as to banks and bankers' account.

4,900
360

371

FEDERAL RESERVE BULLETIN.

APBIL 1, 1919.

WeeJdyfiguresof clearing-house debits to deposit accounts—Continued.
Debits to banks' and bankers' account.
District.
Mar. 12. ! Mar. 19. ! Feb. 26.
No. 11—Dallas—Continued.
Shrevcport
Texar kana
Tucson
Waco
No. 12—San Francisco:
Boise
Fresno
Long Beach
Los Angeles
Oakland
Ogdcn
Pasadena
Portland

:

I
i
I
•

:
;

:

Reno

•

Sacramento
Bait Late City
San Diego
San Francisco
San Jose
Seattle
Spokane
Stockton
Tacoma
Yafcixna

•
;
i
j
I

Mar. 5.

Mar. 12.

3,908
96S
1,551
3,291

3,977
1,076
1,808
3,553

4,959 1
1,384 ;
1,818 !
3,345

4,319
1,683
1,821
2,549

3,594
403
1,409
2,230

2,G98

201
1,385
1,563

3,427
328
1,312
2,704

1,580
4,69S
2.542
61' 088
10,199
3,076
2,678
29,215

2,184
5,691
3,355
73,802
13,206
3,766
3,421
37,407
1,887
13,316
15,292
5,292
185,091
3,506
40,795
8,077
4,376
9,342
1,994

2,096 !
5,512 !
2,994 i
58,196 i
12,582 i
3,630 j
2,892 !
34,501 !
2,009 i
10,470 :
14,038
4,842 i
135.969 i
3', 440 i
36,604 !
8,537:
3.702 i
13;726 i
2,299 j

1,795
6,447
2,966
63,039
12,005
3,569
2.923
40; 864
1,901
11,086
13,478
5,035
172,927
3,544
49,003
10,135
4,675
11,832
2,354

4,646
2,658
92
32,087
2,198
4,391
364
18,032
1,288
5,320
15,949
219
88,449
1,132
17,135
5,588
2,442
6,116
377

4,686
3,154
115
42,980
2,749
5,978
717
22,320
1,459
5,819
20,007
469
107,339
1,869
22,389
7,114
3.125
71476
513

5,382
3,350
137
41,795
2,890
4,514
273
20,981
1,325
5,266
19,119
318
98,687
1,622
21,031
6,738
2,592
7,408
524

1 j 531

9,063
12,007
3,986
139,634
3.317
34', 293
6,963
3,357
7,132
1,785

Mar. 19.

322
1,465
1,819
3,421
246
42,133
3,059
5,619
225
22,448
1,440
4,442

19,678
422
107,697
2,114
13,517
7,711
2,939
7,639
4S0

Recapitulation showing figures for clearing-house centers reporting for each of the four weeks.
[In thousands of dollars; i. e., 000 omitted.]

District.

No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.

Number
of centers
included.




Debits to banks' and bankers' account.

152

Feb. 26. I Mar. 5. \ Mar. 12.

Mar. 19. i Feb. 26. ! Mar. 5.

302.514 i 368,006
3,611,355 ! I 4,099,693
343,015
305,864
381,890 i 457,603
122,556 i 142,623
171,476 i 179,032
772,419 j 918,901
190.515 ! 221,521
108,654 j 127,268
239,659 1 301,880
98,383
93,960 !
338,124 ! 431,800

1—Boston
2—New York
3—Philadelphia...
4—Cleveland
5—Richmond
6—Atlanta
7—Chicago
8—St. Louis
9—Minneapolis
10—Kansas C i t y . . .
11—Dallas
12—San Francisco.
Grand total.

Debits to individual account.

329,435
3,687,669
342,528
368,406
117,650
176,922
782,480
197,424
120,157
247,GOO
112,308
358,039

396,988
163,165
4,447,121 1,406,970
367,158
304,100
485,451
435,049
145,430
131,063
198,801
92,783
909,306
636,564
228,926 j 174,269
133,267
101,164
264,855
280,953
108,909
151,627
419,578

197,092
172,613
189,832
1,686,040 1,486,386
1,653,824
344,601
292,640
337,040
580,422
488,795
611,615
145,555
125,502
139,778
107,373 ! ! 110,979 I
130,435
854,446
830,912
803,380
207,975
199,636
207, OSS
120,885
128,872
131,295
318,067
365,419
333,187
153,450
175,605
171,242
260,278
243,952
250,214

6,638,986 | 7,689,725

6,840,918

8,105,790

4,982,184 i 4,621,311

4,086,190

4,958,900

372

FEDERAL RESERVE BUIiETIK.

WHOLESALE PRICES,
In continuation of figures shown in the March
there are presented below monthly
index numbers of wholesale prices for the period
July, 1918, to February, 1919, compared with
like figures for February of previous years, also
for July, 1914, the month immediately preceding the outbreak of the great war, and index
numbers for the years 1914 to 1918, inclusive.
The general index number is that of the United
States Bureau of Labor Statistics. In addition
there are presented separate numbers for certain particular classes of commodities in accordance with plans announced in previous issues of the BULLETIN.
Quotations for six commodities, namely,
hemlock (Pennsylvania and West Virginia
stock, New York), brick (common, salmon, run
of kiln, Chicago), prunes (California,New York),
salmon (canned, Alaska red, New York), hosiery (men's seamless cashmere), and underwear (merino shirts and drawers), which had
been dropped temporarily, have been secured
for the months of January and February, and
the commodities again included in the calculation of the index number for the latter month.
Quotations for another grade of flour in Minneapolis, namely, first clear, have also been employed, the weight previously assigned to standard patent flour in Minneapolis now being divided between the two grades. Index numbers
for January are provisional, due to the fact that
certain data were not received in time to render
them available for use in the calculations.
During February the considerable fall in
prices remarked between December and January has continued. The general index number
of the Bureau of Labor Statistics has decreased
from 202 to 197. The decrease has again been
general, as is shown by the fact that the index
number for each of the three groups of commodities has fallen. The decrease, however,
has been greatest in the case of consumers1
goods, the index number for which has fallen
from 212 to 202. Increases occurred only in
several cases among commodities included in
the group, most prominent among these being
apples, lard, lamb, and illuminating oil (for export). While the quotation for standard patent flour in Minneapolis increased slightly, corresponding decreases occurred in the case of
certain of the other flour quotations. Considerable decreases occurred for an extended list
of commodities. Most prominent were certain
foodstuffs, such as butter, cheese, milk and
beans, potatoes, peanuts, corn meal,
BULLETIN




APRIL 1,1919.

oranges, and certain pork products (in particular hams), as well as cotton textiles, among
which may be mentioned especially print
cloths, sheetings, shirtings, flannels, ginghams,
drillings, and underwear.
The index number for the group of raw materials has decreased from 195 to 192. Considerable diversity, however, is exhibited by
the movements oi the index numbers for the
several subgroups. The index number for the
animal-products group has increased from 207
to 208, at which figure it stood during the
months of November and December. While
the prices of several classes of wool decreased,
these decreases were more than offset by increases in the prices of calfskins, hogs, sheep
and poultry, and silk. The index number for
the forest-products subgroup likewise shows
an increase, from 147 to 148. A decrease in
the price of white pine has been more than
offset by increases m the prices of plain and
quartered oak, yellow pine, and poplar. On
the other hand, the index number for the group
of mineral products has again decreased, from
177 to 174. While the prices of various classes
of bituminous coal on the whole increased
slightly, considerable decreases occurred in. the
prices of coke and copper, and slight decreases
in the prices of lead and spelter. The greatest
decrease, however, is exhibited by the group
of farm products, the index number for which
fell from 232 to 222, due largely to decreases
in the prices of cotton, certain grains, in particular corn and oats, and hay. Lesser decreases in price are shown for barley and rye,
while slight decreases in the price of winter
wheat were partly offset by an increase in the
price of spring wheat. A considerable increase
in the price of tobacco was also noted.
The index number for the group of producers' goods has again declined, from 194 to
191. While increases in price occurred in the
case of several commodities included in the
group, in particular cement, various grades of
leather, and rope, decreases occurred for an
extended list of commodities, among which
may be noted cotton and worsted yarns, certain
metal products, such as copper wire, bar iron
and cast-iron pipe, wood pulp, naval stores,
jute, linseed oil, and certain chemicals.
Index numbers for the various groups for the
year 1918 are now available. While the general index number of the Bureau of Labor Statistics increased from 175 to 196, the increase
was by no means uniform for the three groups of
commodities. The greatest increase occurred
in the case of the number for the consumers'

373

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

goods group, namely, from 172 to 202. The tively. The monthly index number for the
monthly index number for this group increased former increased steadily thorughout the two
steadily throughout both 1917 and 1918, reach- years, reaching a high point of 255 in Septeming its high figure of 216 in December, 1918. ber, 1918, while the highest mark reached by
Certain vegetables, such as potatoes and beans, the latter was 219 in the same month, though
were the only important commodities included previously there had been recession from a figin the group whose average price during the ure of 195 reached in September, 1917. Wheat,
year 1918 was lower than during 1917. The corn, and hides were the only important comsmallest increase occurred in the case of pro- modities included in these groups, for which the
ducers' goods, the index numbers for the years average price during the year 1918 was lower
1917 and 1918 standing at 187 and 196, res- than during the year 1917, while this is true of
pectively. The highest level reached by the none of the commodities included in the forest
monthly number for this group was 212 in products subgroup. The index number for the
July, 1917, though steady increase was shown latter increased from 118 in 1917 to 132 in 1918,
from December, 1917, until October 1918, the monthly number increasing steadily
when the number reached 205. Due largely to throughout the two years, and reaching its
the institution of price fixing, the average highest point in November and December,
prices during the year 1918 were lower than 1918. On the other hand, the index number for
during 1917 for a considerable list of commodi- the mineral products subgroup for the year 1918
ties, among which may be mentioned leather, stands at 176, a decrease of 3 points from the
wood pulp, and certain metal products, in par- 1917 figure. The highest level reached by the
ticular steel billets and plates, structural steel, monthly number for the group was 205 in
copper wire, and tin plate, although increase in June, 1917, though steady increase during 1918
price occurred in the case of steel rails. Great after the sharp fall to 150 in October, 1917,
diversit}^ is exhibited by the numbers for the resulted in a figure of 183 in November, 1918.
various subgroups included in the group of Though the average prices of anthracite coal,
raw materials. The increase in the number for pig tin, and iron ore in 1918 were higher than
the latter group, from 173 to 193, was due in 1917, the reverse was true in the case of pig
largely to the increase in the numbers for the iron, lead, copper ingots, and spelter, thus
farm products and animal products subgroups, accounting for the decrease in the number for
from 210 to 240 and from* 169 to 199, respec- the group.
Index numbers of wholesale prices in the United Stales for principal classes of commodities.
[Average price for 1913=100.]
Raw materials.
Year and month.

July, 1914
February, 1915
February, 1916
February, 1917
February, 1918
July, 1918
August, 1918
September, 1918
October, 1918
November, 1918
December, 1918
January, 1919
February, 1919
Average for year 1914.
1915.
191G..
1917.
1918.

Farm
products.

102
116
115
157
242
237
246
255
240
234
237
232
222
103
111
128
210
240

Animal
products.

106
95
106
145
176
209
215
219
209
208
208
207
208
104
100
119
169
199

All commodities
Producers' Consumers' (Bureau of
goods.
Labor Stagoods.
Forest | Mineral
Total raw
tistics index
products, j products, i materials.
number).
97
94
96
100
131
14®
143
143
143
150 I
150
147
148
97
93
96
118
132

88
87
111
185
172
180
180
180
181
183
182
177
174
90
91
123
179
176

98
98
108
151
184
196
200
204
198
197
198
195
192
99
99
118
173
193

92
95
123
168
184
196
199
203
205
205
199
194
191
95
100
140
187
196

103
104
111
155
193
202
205
209
210
214
216
212
202
101
102
123
172
202

99
100
111
155
187
198
202
207
204
206
206
202
197
99
100
123
175
196

Tn order to give a more concrete illustration j for certain commodities of a basic character,
of actual price movements there are also pre- I The actual average monthly prices shown in
sented in the following table monthly actual j the table have been abstracted from the records
and relative figures covering the same period | of the United States Bureau of Labor Statistics.




874

FEDERAL RESERVE BULLETIN.

APRIL 1, 11)19.

Average monthly 'wholesale prices of commodities.
[Average price for 1913=100.]

Year and month.

i

Average
price per
bushel.

|

Relative
price.

Average
price per
pound.

Relative
price.

Average
price per
bushel.

Relative
price.

SO. 7044
.7460
.7385
1.0053
1.6375
1. 5900
1.6225
1. 5313
1.3270
1. 2675
1.4290
1.3750
1.2763

July, 1911
February, 1015.
February, 1916.
February, 1917.
February, 1918.
July, 1918
August, 1918.-..
September, 1918.
October, 1918...
November, 1918.
December, 1918.
J a n u a r y , 1919...
February, 1919.

Wheat, No. 2,
red winter,
Chicago.

Wheat,
Cotton, middling, northern No. 1,
spring,
New Orleans.
Minneapolis.

Corn, No. 3,
Chicago.

114
121
120
163
266
258
264
249
216
206
232
223
207

SO. 1331
.0804
.1142
.1708
.3097
. 2945
. 3038
. 3578
.3150
.3007
.2958
. 2850
. 2694

105
63
90
134
244
232
239
282
248
237
233
223
212

SO. 8971
1.5135
1.2825
1.8080
2.1700
2.1700
2. 2231
2. 2169
2. 2155
2. 2206
2. 2205
2. 2225
2.2350

103
173
147
207
248
248
255
254
254
254
254
254
256

Hogs, light,
Chicago.

Wool, Ohio, Higrades, scoured.

Hemlock,
New York.

Cattle, steers,
good to choice,
Chicago.

.Hides, packers',
heavy native
steers, Chicago.

Average ! Relaprice per I tive
bushel. I price.

Average
price per
100
pounds.

Relative
price.

Average
price per
pound.

83
163
128
182
220
228
226
227
227
227
234
241

$9. 2188
8.1750
8. 4688
11.1313
13.0750
17. 6250
17. 8250
18.4100
17.8563
18.1563
18.3600
18.4.125
18.4688

108
96
100
131
154
207
210
216
210
213
216
216
217

SO. 1938
.2350
. 2375
.3175
.2925
.3240
.3000
.3000
.3000
.2900
. 2900
.2800

SO. 8210
1.6091
1. 2585
1. 7969
2.1700
2.2470
2. 2325
2. 2363
2.2345
2. 2375
2.3088
2.3788
2.3450

Yellow pine,
flooring,
New York.

Relative
price.
105
128
129
173
159
176
163
163
163
158
158
152
152

Coal, anthracite, Coal, bituminous,
! stove, New York
run of mine,
I
tidewater.
Cincinnati.

Year and month.
iVyerago

pounds.
July, 1914
February, 1915
February, 1916
February, 1917
February, 1918
July, 1918
August, 1918
September, 1918
October, 1918
November, 1918
December, 1918
January, 1919
February, 1919

!
;
i
\
,
'
j

S8.7563
6.7281
8.1375
12. 2063
16.6938
18.0000
19.7750
20.0700
| 18.0938
17.7063
| 17.4400
!
17.4125
i 17.4888

Reia- I Average • Relative j price per ! tive
price. | pound. l price.

i

104
80
96
144
197
213
234
237
214
209
206
206
207

i

! SO. 4444 !
j . 5429 !
! .6571 !
! . 8286 !
| 1.4545 i
1.4365 i
; 1.4365 •
' 1. 4365
1.
1
1
l!
1

4365
4365
4365
1200
0909

Average
price per
M foot.

94 $24.5000
115 24.2500
140 22. 2500
176 25.5000
309 30. 5000
305 34. 5000
305
305
305
305
305
255 36.0000
232 36.0000

Coal, Pocahontas, Norfolk.

Coke, Connellsviile.

Average j Rclaprico per
live
long ton. price.

Average ! RolaX)rice per • tive
!
short ton. price.

Rela- Average
tive i price per
price. | Mfeet.

101
100
92
105
126
142

149
149

Copper, ingot,
electrolytic,
Now York.

$42.0000 I
41. 0000
40.0000 i
41. 5000
57.0000
60.0000
63.0000
63.0000
63.0000
63. 0000
63.0000
63.0000
64.0000

Rela- Average Rela- Average Relative price per tive price per tive
price. long ton price. short ton. price.
94
92
90
93
128
135
141
141
141
141
141
141
144

Lead, pig,
desilverized,
New York.

34.9726
5.1866
5. 2588
5.6826
6.5000
6. 5968
6. 5992
6. 9000
6. 9000
7.8071
7.9500
7.9500
7.9500

102
104
112
128
130
130
136
136
140
143
143
157

$2. 2000
2.2000
2. 2000
5.0000
3.6000
4.1000
4.1000
4.1000
4.1000
4.1000
4.1000
4.1000
4.0000

100
100
100
227
164
186
186
186
186
186
186
186
182

Petroleum, crude.i
Pennsylvania, ' Pig iron, basic,
at wells.

Year and m o n t h .

July, 1914
February, 1915..
February, 1916..
February, 1917..
February, 1918..
July, 1918
August, 1918
September, 1918.
October, 1918....
November, 1918.
December, 1918..
January, 1919....
February, 1919..




S3. 0000
2. 8500
3.0000
6.5000
4.4120
4. 6320
4.6320
4.6320
4. 6320
4. 6320
4.6320
4.6320
4. 6320

100
95
100
217
147
154
154
154
154
154
154
154
154

SI. 8750
1. 5750
2.6250
7.5000
6.0000
6.0000
6.0000
6.0000
6.0000
6.0000
6.0000
5. 7813
5.2188

j
i
j
!
!

65
108
307
216
216
246
246
246
246
24.6
237
214

Average
price per

Relative

pound.

price.

SO. 1340
.1475
. 2538
. 3300
.2350
. 2550
.2600
.2600
.2600
.2600
.2540
. 2038
.1731

85
94
161
210
149
162
165
165
165
165
161
130
110

Average j Rolaprice per I live
pound. | price.
SO. 0390 i
.0380 i
.0610 i
.0850 i
. 0706 |
.0802 i
.0805 i
.0805
.0805 I
.0805 I
. 0667
. 0558
.0508

89
86
139
193
160
182
183
183
183
183
152
127
115

Average Relaprice per tive
barrel. price.
SI. 7500
1.5000
2.3500
3.0500
3.9375
4.0000
4.0000
4.0000
4.0000
4.0000
4. 0000
4.0000
4.0000

Average j Relaprice per • tivo
long ton. ; price.

71 S13.0000
Ci
12.5000
96
17.6900
124 30.0000
161 33. 0000
163 32.0000
163 32.0000
163 32.0000
163 33.0000
163 33.0000
163 33.0000
163 30.0000
163 30.0000

88
85
120
204
224
218
218
218
224
224
224
204
204

APEIL 1,

375

FEDERAL EESERYE BULLETIN.

1919.

Average monthly wholesale prices of commodities—Continued.
Cotton yarns
northern cones,
10/1.

Steel, billets,
Bessemer,
Pittsburgh.

Leather, sole,
hemlock No. 1.

Steel, plates,
t a n k , I'ittsburgh,

i Steel, rails, open
!
hearth,
i
Pittsburgh.

Worsted yarns,
2-32's crossbred'.

Year and month.
Average j Relaprice per ! Live
"pound. | price.

.Inly, 1914
February, 1915...
February, 1916...
February, 1917...
February, 1918...
July, 1918
August, 1918
September, 1918.
October, 1918....
November, 1918..
December, 1918..
January, 1919
February, 1919...

!
j
i
i
|
j
I
i

$0.2150 |
.1650
.2250 I
.3200 i
.5536 !
.6412 !
. 6400 ;
•
.Gioo ;
.6100 |
.5927 !
.5500
.5000
.4200

Average
price per
pound.
SO. 3050

102
149
250
290
289
276
276
26S
249
226
190

*"".*3256'
. 5S00
. 4900
.4900
.4900
.4900
. 4900
.4900
.4900
.4900
.4900

Rcla- i Average Relative | price per tive
price.
ton.
price.

Average
price per

74
76
130
252
184
184
184
1S4
184
184
175
169
169

SO. 0113
.0110
. 0225
.0438
.0325
. 0325
. 0325
. 0325
. 0325
. 0325
. 0310
.0300
.0300

10S j $19.0000
I 19.5000
33.5000
115
206 ! 610000
174 ! 47.5000
174 i 47.5000
174 ; 47.5000
174 ; 47.5000
174 ! 47.5000
174 I 47.5000
174 ; 45.1000
174 i 43.5000
174; 43.5000

pound.

Relative
price,

price per
long ton.

Average
price per
pound.
SO. 6500
. 6200
.8800
1.2500
2.0071
2.1500
2.1500
2.1500
2.1500
2.1500
2.0000
1. 7500
1.7000

Relative
price.
84
SO
115
161
258
277
277
277
277
277
257
225
219

!
Beef carcass,
good native
steers., Chicago.

Year and month.
Average Kelaprice DOT tivc
'pound.
price.
July, 1914
February, 1915...
February, 1916...
February, 1917...
February, 1918...
July, 1918
August, 1918
September, 1918.
October, 1918....
November, 1918..
December, 1918..
January, 1919
February, 1919...




SO.1350
.1213
. 1375
. 1413
. 1750
. 2400
. 2420
. 2430
. 2450
.2450
. 2450
. 2450
. 2450

104
94
106
109
135
1S5
187
189
189
189
189
1*9
189

Flour, wheat,
standard patents
Coffee, Rio No. 7. 1914-1917, 1919,
standard war.
1918, Minneapolis.!

Ko
Chicago.

XewYork.'

Sugar, pranulatcd,
New York.

Average
price per
pound.

Relative
price.

Average
price per
pound.

SO. 0S82
. 0S25
.0825
. 1000
. 0*33
. 0855
. 0X53
. 0959
. 1040
. 1069
. 1725
. 1547
. 1544

79
74
74
90
75
77
77
86
93
96
155
139
139

?0.0420
. 0554
. 0597
. 06S6
. 0730
. 0735
. 0735
. 0845
. 0882
.0S82
. 0S82
. 0882

Relative
price.

130
140
161
171
172
172
198
207
207
207
207
207

376

FEDERAL RESERVE BULLETIN.

DISCOUNT AND INTEREST RATES.
In the following tables are presented actual
discount and interest rates prevailing in the
various cities in which the several Federal Reserve Banks and their branches are located during the 30-day periods ending February 15 and
March 15, 1919. Quotations are given for
prime commercial paper, both customers' and
purchased in the open market, interbank loans,
bankers' acceptances, and paper secured by
prime stock exchange or other current collateral. Separate rates are quoted for paper of
longer or shorter maturities in the first-named
and last-named classes. In addition quotations are given for commodity paper secured by
warehouse receipts and for cattle loans, as reported from centers in which such paper is
current.
Quotations are also given of rates charged on
ordinary loans to customers secured by Liberty
bonds and certificates of indebtedness. Assistance to customers to enable them to purchase
such Government obligations has generally
been extended at lower rates, either at the rate
borne hj such obligations or at a rate slightly
higher. The table also shows quotations in




APRIL 1,

1919,

New York for demand paper secured by prime
bankers7 acceptances, a type of paper which
made its appearance in the New York market
several months ago. Quotations for new types
of paper will be added from time to time as
deemed of interest.
There have been no marked changes in rates
during the period under review. While there
is little indication of general increase or decrease in rates in any of the centers, it is reported that in certain centers there has been a
tendency toward greater firmness. Changes in
rates for various types of paper likewise are not
marked, instances of increase and decrease in
such rates being about equal in number. In
the case of prime commercial paper purchased
in the open market there appears to be a
tendency for the range within which fluctuations occur to diminish, as is shown by decrease
in the high rates and increase in the low rates.
Customary rates for such paper running 30 to
90 days have increased somewhat in certain
centers. A tendency may also be remarked
toward increase in the rates charged on demand
paper secured by prime stock exchange or other
current collateral. Rates for the other types of
paper shown remain practically unchanged.

Discount and interest rates prevailing in various centers.
DURING 30-DAY PERIOD ENDING FEB. 15, 1919.
Prime commercial paper.
District!

Collateral loans—stock exchange or

City.

No. 1... Boston
No. 2... New York a...
No. 3... Philadelphia..
No. 4... Cleveland
Pittsburgh
Cincinnati
No. 5.L. Richmond
Baltimore
No. 6... Atlanta
Birmingham..
Jacksonville...
Now Orleans..
No. 7... Chicago
Detroit
No. 8... St. Louis
Louisville
Memphis
No. 9...| Minneapolis...
No. 10.. | Kansas City...
Omaha
Denver
No.ll.J Dallas
El Paso
No. 12.. | San Francisco. 6
Portland
8
Seattle
Spokane
Salt Lake City




Bankers' acceptances,
60 to 90 days.

!

Cattle
loans.

; Secured by
Secured by ; Liberty "
warehouse i bonds and
receipts, certificates
etc.
of indebtedness.

H. L. a
5
\
4.} 5-5i
5 5"
5 5
6 G
5 51
5J 54

6"
51
5
6

G 6
fi G
8
51 5 5-5--V G 5 5.1-54 0
5} 5 5} 6 0 5-V 6
oi 5 G 01 5 6 6
7
6
51 5
5
8

5 6
51 6£

6
5
G
6
6
6

6
7
5
G
6
6
6

Rates for demand paper secured by prime bankers' acceptances, high 5-1, low 4|, customary 4S-4J.

CO

Discount and interest rates prevailing in various centers—Continued.

CO

DURING 30-DAY PERIOD ENDING MAR. 15, 1919.
Prime commercial paper.

5

fi
fi" fi
6
7
fi
51-6

51-6 6
6 fi

?

?
?
5

(j

6
r

i>-

5}-

a IT. L. a
51 51 5 . 51
6
5 5-1-51
51
5 51
51 51 5 6"
5i 51
6 6 6
6"
51 51 ft1i

?

r

l

Vfi
fi
8
5* 6
51 5 51

51 51

f
6

6
6
6
6

5.

6

51,5'

5

5

5-1 5

?
6
5}

1
5

5f

> i- 51 s.r
51
^ fi
fi'
5
6
6
6
5
4
5 1 51
5" 6
r :

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6
5
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(\
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7
7

fi
g
6
fi
6
7
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5
5

if

41

6
fi
6
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5*
41
6"
6
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??
6
6
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a

fi

ft

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fi

41 4A

51 6
5

g
6
6
6 6
rp.
6* 6
5 fi
fi
6
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"

41

4A

6

5*
6
6
7

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fi
6
6

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41

6™

6

G

5

41
5"

6

4:1:

6

4g

5
5

4A

41 6

4*«

?

6
6

fi

41
5"

6

5

fi

5

a

I

6
fi

f,
^
fi6
6

6
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fi
fi
6
7

6 5
61 6
fi
fi
8
7
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6
6
fi
8
6
8
6
8

6

5

L.
51

8
6
fi
8
8

r>

C)

5

3 months.
IT.
6
6
6
(\
6

Cy

6
5
6
5
fi
5
(\
6
6
6

6
6
fi
fi
fi-7 8
6
8
6
8
()
8
8
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6
fi
8

61
7

a.

51 51
4.151-5J
5
6
5 fi
51 6
61 G 6
fi fi fi
fi •V- fi
•
>
(S < fi
8 6
6
7 6
ft
fi
6
51

?

%

L.

8
8

f5

5
>
fi
G
5
6
5
fi
5
5
g
6
6
6

IT
6
6
G
fi
6
61
(\~
C,

fi
8
7
fi
6
Q
fi
51 6
6
6
fi
fi
fi-7 8

L. C.
II. L.
51 51
51-6
5
51 6
5 fi
51 6
6
6
(>
fi
51 Q
fi 6
6
6
6
7
fi
6

f5

5
-,
"

fi

7

8
6
«

8

a Rates lor demand paper secured by prime bankers' acceptances, high 6, low 4J^, customary ij/2-

11. L. C.

6
6
6*6

6
6

6
6
6
8
7
6

6
6
6
6
7
6

6 61-7 6
6
6

6
6
6
6
6
6

51 51
5
5

6
G

fi - 7

s
6

fi
7
7
7

C.

6
6
6

61 6
5
6
6
5
8
ft ^
5
ft

ooo

fi
5

61
8 51 5

5l

51 5 .51

fi fi
8
5 5:1-1 6 i
5

6
6

5
«>

t

Demand.

(7.
6
4i' 4 A
4V-43

COOC 00

5

fi

6
5
6
6
fi

II.

oooocr

f

5
51 5
5
6
5|

6*

f6 S*
5

6

fi fi 7
51
5"
6
5
51
0
fi"
C) 8
8
5 6
fi
fi
6

r^

?

Unindorsed.

Secured by
Secured by
Liberty
warehouse bonds and
receipts, certificates
etc.
of indebtedness.

Cattle
loans.

3 to 6
months.

O OOO CC

6
6
fi

fi

Indorsed.

a II. L.
jj 51 4143
5 5-51 41:
5
41 f,
5
51

IT. X.

Collateral loans—stock exchange or
other currcn t.

oooo

6
6
51
fi
5 1 fi
fi-7 8
ff
6
51
7
5
6
5
8
fi
6*
(\ 8
8
6
5 6
i\ fi
7
8
6 6
8
6 7
6
8
8

'">•'-

f

5
5
5
!-

4 to 6
months.

o

8
fi
6
8
8
8
8

if

fi
7
8
7

6

ooo




I*

R - fi
f)1- p,
6
6
6
7
^

51

L.

Bankers' acceptances,
60 to 90 days.

Interbank

ooo Tr

No, 11 .
No. 12..

f

OOOOcC

No. 9...
No. 10..

5
45
5
5
51 6
51 6
5* fi
1

77.
6 '
5
51
6
5 51-6 6
6
fi 5 51 51
fi"
ft fi

OOOOcC

No. 7...
No. 8...

6
6
6
fi
6
6
fi
fi
7
8
7
ft
6
ft
6
6
(\
8
6
7

30 to 90
days.

oco

No 5
No 6

Boston
New York a...
Philadelphia..
Cleveland
Pittsburgh....
Cincinnati
Richmond
Baltimore
Atlanta ..
Birmingham..
Jacksonville...
New Orleans
Chicago
Detroit
St. Louis
Louisville
Memphis.
Little Rock...
Minneapolis...
Kansas City...
Omaha
Denver
Dallas
El Paso
San Francisco.
Portland .
Seattle
Spokane
Salt Lake City

4 to 6
months.

nCiCi

No. 1...
No. 2...
No. 3...
No. 4 .

30 to 90
days.
II. L. C.

OSCiOi

City.

District

Open market.

Customers.

OO

7
7
7

6
8
8
8
10
10

6
fi
6
6
8

7-8
7
6
8
8

51 6

8

51 6-7

6

6

6

ii. L. a
5 41 4H
6
6
6
6
5

4 41-5
4f "41
6
6
51 51
41- 4-'v

8 4? . . .
8 6
6 41

6
5

6"
6
6
6
8
51
8
7
8
6
8
6
6
6
8

6''
51
5
5t
6
5-1
6
6
6
6
8
6
6
6
6

4b
4\U
41
51
5
5
41
41
6
7
4!
4£
6
4V

APRIL 1,

379

FEDERAL BESERYE BULLETIN".

1019.

!
January
1

PHYSICAL VOLUME OF TRADE.
In continuation of tables in the March
there are presented in the following tables certain data
relative to the physical volume of trade. The
FEDERAL RESERVE BULLETIN

issue contains a description of the
methods employed in the compilation of the
• data and the construction oi the accompany! ing index numbers. Additional material will
i be presented from time to time as reliable
; figures are obtained.

Lir-c-iitovh •movements.
[TlurciHi of Markets.]
Receipts.
; C;>! fie ami
1

Oil-lve?. 00

i markets.
1918.

!

February

Pheep, 60 ;JTorsrs
markets. • in.ui.es.

Hnjjs, CO

; 1,490,940

TTc.ad.

4,521,455

3,113.281
2,470.190 !
2.380.475 1
3,421,041 !;
4,005,158
5,509,350 :
!
5.801.685
2,111.704
1440329 j 4,404,751 i

Jnlv
August
September
October
November
December

I 2,110.835
i 2,009:744
I 2.799,913
:
2,832'. 022
l
2.025,381
2,132,491

1919.

January
February

A 1

Cattieand
markets.

I
markets.

Ucn. 7_
7,238. 489

Bend.
1,008,150

e.

244
381
544
70!
9()8
083

9 .051 413
7 ;059,411

Total all

-ft
'• market??.

murkots.

1

1 082,208

•

Head.

Head.

Shipments.

1
2
3
3
o
1

585,735
129,325
303.955
234,026
535,115
040,305

I
!

:
'
i
i

Head.
820

143,

5 1 , 393
80, 122
124, 201
140. 072
135'. 344
7 2 , 471

i

1 507,013 •!
1, 131,805 I

310.

411

8 2 , 526

*'
...

801
6 ;095
8 ,014
9 , 033
fi ,900
9 .414

Total, all
kinds.

Sheep, 54
markets.

nrnlfis, 44
markets.

2 749,074

Head.
907,327

Head.
137,001

Head.
4,802,152

005.800
850;303
1.219:333
1,300.084
1,532,771
785,770

949,301
849,0.18
780,917
89(5.258
-. 210,800
1 429,251

734.539
1,198,091
2,059,990
2,009,057
1)4-10)523
710,100

45,549
76,053
114,023
140,845
131,308
71,243

2,395,189
2,975,325
4,180,203
4,400,244
4,027,402
3,002,304

761,168
528,326

1 540,875

008,016
418,827,

106,459
76,512

3,022,518
2,311,799

mad.

288,134

1

Receipts and. shipments of live stock at 15 ices tern markets.
[Chicago. Kansas City, Oklahoma Citv, Omaha, St. Louis, St. Joseph, St. Paul, Sioux Citv, Cincinnati, Cleveland, Denver, Fcrt Worth, Indianapolis,
Louisville, Wichita.] *
RECEIPTS.
[Monthly average, 1911-1913=100.]
Cattle and calves.
Head.

Relative.

Hogs.
Head,

Sheep.
Head.

i Relative,

! Horses and mules.

Relative.

, Head.

Relotive.

Total, all kinds.
Head.

Relative.

i

1918.

I

"February

1,133,116

120

3,452.072 !

108

733,895

58 !

78,708

183

5,397,791

125

July

1,097,103
1,588,553
2,240,017
2, 207,534
2,053,359
1,700,945

.108
158
223
225
204
109

2.530,414
1)970,080
1,775,812
2,570.525
3,431)782
4,197,313

115
90
81
1)7
150
191

1,141,488
1,424,077
2)408,009
2,357,524
1,077,537
1,114,701

84 :
104
170 i
173 ;
123
82 •

30,782
54.271
82)050
83,574
04,482
30,153

80
118
180
182
140
79

5,405,877
5,037,587
6,516,124
7,279,157
7,227,100
7,055,172

117
109
141
158
156
156

1,050,0-10
1,090,118

104
.110

4,003,335
3,451,894

209
108

1,079.377
774,891

79 '
61 ;

56,031
48,780

123
114

7,395,419
5,371,079

160
125

^oi^i'o'Tiber

October
November
December
January
February

1919.

j
'
i
:
!
:
!

SHIPMENTS.

February

1918.

July
August.
September
October
November
Beneniber
January
February--




!
300,971 |
-

1919.
j

495,211 i
052,410 I
932,131 j
994,943 j
821,831 i
588,425 |
!
580,302 |
404,290 j

95

849,008

188 •

199.

100
229
245
227
145

002,728
599,577
488,298
486) 400
059,432
787,401

137 \ 483,151
124 :
751.; 880
101 : 1,426,120
100 , 1,479,774
130 ' 903,283
.103
445,987

145
107

988,035
883,507

20-1
395

200,455

357,380
240,81

l\

201

1,548,132

116

31,379 i
51.923 !
74)473 I
84,393 i
03,589 !
37,072 !

70
127
182
200
155
90

1,072.409
2,055)827
2,921,022
3,045,570
2,548.135
1,858)945

116
143
197
212
177
129

50,282 i
47,829 i

138
125

1,091,005 j
1,574,447 I

139
118

00 i

96 !
149 i
205 !
294 '
179 i
89 !
!
I
71 i
51 i

380

FEDERAL RESERVE BULLETIN".

A P R I L 1,

1919.

Grain and flour.
[U. S. Food Administration.]
GRAIN MOVEMENT.
[In thousands of bushels; i. e., 000 omitted.]
Wheat.

Corn.
Stocks at
close of
month.

Receipts. Shipments.

Oats.
Stocks at
close of
month.

Stocks fit ;

close of
Receipts, Shipments,
month. :

Receipts. Shipments.

1918.

Juno
July
August
September.
October
November.
December..

196,060
287,652
286,200
241,260
155,665
178,916

12,415
81,422
163,027
246,690
286,169
254,474
253,767

94,823
160,162
150,636
150,077
138,438
127,612

59,466
48,131
62,137
59,437
47,024
59,237

54,792
42,999
46,453
47,501
41,886
50,312

37,794
31,919
25,559
28,522
25,727
21,646
23,427

245,683
219,306

98.648
36;663

79,935
37,601

30,448 :
27,365 (

i
i
.
i

90,006
177,324
126,138
110,620
86,871
80,199

:

j
•

87,893
124,597
102,510
107,693
95,008
81,220

102,887
57,599

:
I
|
|
j

89,613
58,920

39,097
37,923
86,030
101,739
103,943
88,300

1919.

January...
February.

129,998
60,047

80,495
51,662 j
Barley.

Total grains.

Rye.
Stocks at
close of
month.

Receipts. '.Shipments.

85,811
82,025

|
I Stocks at
Receipts, j Shipments.] close of
I month.

Stocks at
close of
month.

Receipts. Shipments.!

1918.

June
July
August
September.
October
November.
December-.

14,285
21,340
27,002
23,889
22,697
23,255

7,077
9,923
15,295
19,843
21,153
22,287

10,606
16,9S4
27,174
37,782
40,670
39,991
40,320

3,474
8,422
16,092
20,667
17,521
15,721

2,024 I
4,449 '
7,409
15,047
13,552
8,721

2,181
2,912
«, 128
12,854
17,309
19,199
25,779

363,291 i
542,869 !
517,569
455,873
329,778
357,328

246,609;
342,130
322,303 i
340,161 |
310,037
290,152 !

102,093
171,160
307,918
430,587
473,818
423,610
428,656

27,687 i
16,432 ;

27,130
17,231

40,673
38,8S6

16,086 I
7^857 \

10,201
9,419

30,031
27,966

178,59S |

287,374:
174,833 |

432,646
395,548

1919.

January...
February.

WHEAT FLOUR PRODUCTION.
[In thousands of barrels; i. e., 000 omitted.]
Production.

June
July
August..
September
October
November..

Stocks at ;
mills at close
of month. ;

1918.

.'i
1 109 ! ' Tippomhar
] (506
2 386 !
3'064 i January
3 422 Fpbruarv
3', 387 !

6,780
10,391
11,835
11,752
11,175

Stocks at
mills at close
of month.

Production.
1918.

11,759

3,260

12,994
7,736

1919.

3,341
3,544

California shipments of cur us and deciduous fruits.
< Total
Oranges.
!

Total citrus fruits.

Lemons.

Carloads. | Relative, j Carloads.

j decirluovis
i
fruits.

Relative. ' Carloads. I Relative, j Carloads.
_.....

February..

1018.

July
August
September.
October
November.
December..
January...
February.




372 i

1,035
914
767
549
485
1,125
3,585

37
31
22
20
46
146

I

!
i

561
732
275
639
676
722

3,120
3,180

128 !
139;

531
658

1
;

1,407

;

53
29
39
63
150

128 !
144 j

i

08 •

i
,

158
167 '
17S •

1,475
1,499
824
1,124
1,801
4.2S7

131
174

3,051
3,833

I
j

!

53 ,

99 ,
139
181

:

:
!
j
I
j

j

1910.

3.753
9,126
5,879
7, Mo
1,044
267

109
198

381

FEDERAL RESERVE BULLETIN.

APUIL 1, 1919.

Sugar.
\ [Data of International Sugar Committee for ports of Boston, New York, Philadelphia, Savannah, New Orleans, Galveston, San Francisco.]
[Tons of 2,240 pounds.]
I Raw stocks
; at close of
month.

Meltings.

Receipts.

1918.
288,449
218.090
170,807
242,912
138,141

July
August
September
October
November

Receipts.

December

135,001
100,392
50/078
77,233
50,989

320,908
203,383
210,745
207,500
172,528

January
February

Haw slocks
at close of
month.

Meltings.

1918.

[

123,091

13,774

243,800 |
389,815 i

197,145
337,420

00,189
122,757

92,785

1919.

[Data for ports of New York, Boston, Philadelphia.]
[Weekly Statistical Sugar Trade Journal.]
[Tons of 2,240 pounds. Monthly average 1911-1913= 100.]
Voitincre
Meltings.

Receipts.

;

R a w stocks at |
. 1

Tons.

Relative.

Rela- i
tive. |

Tons.

To n s
i

-

Rela- !
tive.
.......

179,708

Julv
August
September
October

180,225
159,252
145,555
151,703

105

110

188,000

j

221,000
175,000
139,000
150,000

120
95
70
85

1
!
j
i

Relative.

Tons.

Relative.

Tons.

Relative.

Tons.

....i

i
18

55,322
39,375
40,809
42,522

1918.
November
December

139,343
58,751

70
32

139,000
92,000

76
50

43,112
11,490

25
7

1919.
January
February

3L2G2

172,054
2S3,172

93
105

147,000
229,000

80
134

30,544
90,710

21
53

32 !

i

101
87
79
82

Raw stocks at
close of month.

Meltings.

i

!

1918.
February

Receipts.

c l o s o o I m o n t h

i

I
2o

••;

Lumber.
[From reports of manufacturers' associations.]
[M feet.]
Southern pine.
No.
of
mills.

Douglas fir.

"Western pine.

Produc- Ship- *> ! Production. ments. ing.! t t a n -

Shipments.

~Lf- j Produc-1 Shipmills. t i o n - ! m e n t s -

Eastern white pine.
| Produc-!

tion.

mills.

j North Carolina pine.

Ship-

i monts.

mills.

Produc-1 Shiption. ments.

—i-

1918.
February

383,954

3S4,923

24,45

73,147

00,603

July
August
September
October
November
December

201 412,002
202 391,048
190 340,009
202 321,214
194 312,126
204 310,008

453,786
437,770
350,028
353,206
353,810
322,831

42, 45
4.4, 47
45
42, 47
38, 46
27, 46

147,533
151,150
130,029
121,850
90,078
(53,315

1919.
January
February

200
195

325,241
309.494

21, 49
24, 48

40,354
46,037

j

112,915
109,402

187

131

302,400 1 208,500

123 209,100 2GG.300
130 292,200 275,000
248,000
,59 i 100 310,000
79;701 I 115 350,487 324,080
74,103 ; 121201,189 240,986
03,823 ! 127222,389 1 221,720

|
I
330,137
328,009

08,910 I
71,103 i

122 225,088 1 227,129
122 ! 228,031 I 238,035

26 | 21,365
26 ' 80,658
26 ! 95,942
26
72,937 j
27,21 ! 32,787 ;
16 23.529 !
11 ! '799 j

i

27,306 j

59,412
51,327
51327
38,711
38711
20,152
23,828
14,176

i

13 . 7,565 !i 15,172 I
15 j 6,802 17,081 !

20

19,299 j 14,605
31,517 34,815
24,118 I 34,377
31,908 I 34,903
27,912 ! 36,478
32,596 36,012
26,728 I 21,570

i

23,869
28,629 | 18,034
25,806 !

R E C E I P T S A N D S H I P M E N T S O F L U M B E R AT CHICAGO.
[Chicago Board of Trade.]
[Monthly average 1911-1913= 100.1

Receipts.
M feet.

Shipments.

Relative.

M feet.

Rela- !
tive.

M feet.
1918.

1918.

February

133,436

07

July
August
September
October

243,598
208,963
171,515
130,503

115




Receipts.

I

255

84

98,145
78,707
08,133
70,590

128
103
89

GO,

November
December
1919.
January
February

Relative.

Shipments.
M feet.

Relative.

I
I
i

142,230
103,908

72,723
GO,831

95
79

i
!
|

134,004
97,511

47,922
45,585

62
64

882

FEDERAL RESERVE BULLETIN.

APRIL 1, 1919.

Coal and coke.
[Bituminous COPJ and coke, U. S. Geological Survey; anthracite coal, Anthracite Bureau of Information.!
[Monthly average 1911-1013=100.]
Bituminous coal, estimated monthly production.
Short tons.

February

Coke, estimated monthly production.

A n t h r a c i t e coal,
shipments over 9
roads.

Beehive.

By-product.

Total.

Relative, j Long tons. Relative, j Short tons. Relative. | Short tons. Relative. | Short tons. Relative.

1918.
44,384,937

July
August
September
October
November
December

128 ! 5,812,082

I

55,387,312
55,732,092
51,757,334
52,885,813
44,386.987
40,634'. 525

150
150
140
143
120
110

!
i
!
i
|
;

7,084,775
7,180.923
0.234', 395
0) 280,306
5.270.059
5', 730', 200

92

1.502,056

190 | 3,796,337

110

126
128
111
112
94
102

2,81.3,910
2,057,072
2,570,238
2,011,885
2,339,197
2,255,290

108
102
98
100
89
8G

2,300,673
2,387,075
2,410,798
2,503)183
2,523,740
2,502,048

201
271
274
291
287
291

5.114,583
5)044,747
4,981,030
5.175,008
4i862)943
4,817,344

146
144
143
148
139
138

105
74

2.401,507
1)822)894

92

2,441,433

277

4,843,000

139

111 j 2,234,281

1919.
January
February

41.473,000
31; 492'. 500

5,934,241
3.871)932 |

112
91

Movement of crude petroleum in United States.
[U. S. Geological Survey.]
[Barrels of 42 gallons each.l
I Stocks at
i
end of
i month.

Marketed.

Barrels.
1918.
February
July
August
September
October

;
j
I

I Relativ

\
25,753,000 j
30,301,000 j
29,211,000
28,074,000
30)592,000 i

!

!

i

Stocks at
end of
month.

Marketed.

Barrels.

Barrels.
1918.

134

148,129,000 | November.

158
152
150
100

141,475,000 ! December..
139.472,000
1919.
135.080,000
134)838,000 January
February

Relative

Barrels.

28,347,000

148

131,295,000

28,071,000

146

128,311,000

29,869,000
19,041,000

156

129,558,000
96,239,000

Total output of oil refineries in United States.
[Bureau of Mines.]
Crude oil run
(barrels).

February

1918.

Kerosene
(gallons).

1919.

23,380,070

234,324,019 I 121,218,320

29,170,718
28,534,275
28,300,431
29,237,707
27.411,030
20,958,157

July
August
September.
October
November.
December..
January.,

Gasoline
(gallons).

332,022,095
330,335,040
314,595,959
314,251,318
312,968,040
291,744,465

150,828,820
149,078,850
104,903,798
104,928,040
109,278,105
101,742,713

Gas and fuel
(gallons).

510,105,397

I 058,439,082

Lubricating
(gallons).

58,300,914

071,113,871
053,085,050
001,780,441
604,403,494
587,873,987

79,303,107
72,892,879
70,593,079
72,244,633
72,178,602
64,987,842

20,907.332 j 303,710,556 j 158,501,200

589,630,050

68.304,613

Slocks at the dose of month.
Feb. 28..

191S.
11,033,411 | 518,794,G09

Jan. 31.




411,150,157

502,040,087

150,259,653

14,020,525 ! 349,928.004
13,940,595 j 235,446,538
14.402,100 I 209,772,723
15'. 438.570 I 250)328.309
15', 222) 401 270,072)011
15,749,771 297,320,983

July 31..
Aug. 31..
Sept. 30.
Oct. 31..
Nov. 30..
Dec. 31..

432,807,129
424,281,4S1
430,028,907
419,409,944
397,804,012
380,117,829

519,012.839
500, OK)'. 413
583)407,709
590,116,351
583,777,918
059,001,357

136,460,207
137,490,980
147,425,556
135,196,542'
132.923,478
138)853,574

383,212,692

332,393,181

:6,411,414

158,370,431

1919.
15,380,185

A P K I L 1,

383

FEDERAL RESERVE BULLETIN.

1919.

Iron and steel,
[Pig iron production, Iron Age; steel ingot production, American Iron and Steel Institute.]
[Monthly average, 1911-1913=100; iron ore, monthly average, May-Nov., 1911-1913=100.]

Pig iron production,

Gross tons.

i Steel ingot production.

Unfilled orders U . S.
Steel Corporation at
close of month.

.Relative, i Gross tons, i Relative. Gross tons.

Relative.

191S.

February...

9,288,453 ;

1919.

January..,
February.,

3,113, (.35
3,083,080
3,197,058
3.352,190
3;000,154
2,992,300

3,302,200
2,940,108

170

8,883,801 i
8,759,042 |
8,297.905 i
8,353;293 i
8,12.1,003 !
7,379,152 |

109
166
157
158
154
140

|
0,084,208 i
0,010,787 !

3,420,988
3,389,585
3.41S,270
3,480,941
3.35-1,074
3)433,617

July
August
September..
October
November..
December..

127
114

Imports of'pigtin.
[Department of Commerce.]
[Monthly average, 1911-1913=100.]
Pounds,

j Relative, ij

Pounds.

Relative.

191.8.

1918.
February...

89

7,584,403

July
August
September..
October

m

15,507,007 j
10,317,437 j
10, ()30.000 !
9,885,984

180
117
109

November.
December..

10,734,179
5,887,003
8,401, 444
0,271,977

1919.

January
February

118
05
93
74

Textiles.
[Silk, Department ol Commerce; cotton, "Bureau of the Census: wool, Bureau of Markets; idle machinery, Jan.-Sept., 1918, inclusive , National Association of AVool Manufacturers.]
[Cotton, monthly average crop years 1912-1914=100: silk, monthly average 1911-1913=100.]

Cotton consumption.

Bales.

Percentage of idle woolen machinery on first of month
to total reported.
Cotton
spindles
active
during
month.

Imports of raw silk.
Looms.

"Wool consumption
(pounds).

Spinning spindles.

Under
Wider
than 50- 50-inch
inch reed reed
space.
space.

Relative.

cards,

"Woolon.

1918.
February..

510,084

33,502,222

52,890,535 j

S.I

S.4

5.1 |

July
August
September
October
November
December

541,792
531,914
490,779
440)833
157,370
472,941

120
119
109
98
102
105

33,074,890
33,040,811
33,524,275
32,700,023
33,121,507
33,052,012

50,951,651
51:510,457
47,648,413
48,092,509
3S,282.723
32,355' 081

10.4
12.2
13. 8
18.3
21.1
22.5

10.2
14.3
15.1
24.3
26. 8
24.9

1919.
January
February..,
March

556,721
433,516

124
103

33,850,472
33,282,593

32,573,970
23,180,818

40.3
52.3
58.1

32.6
41. 5
42.4

5.9 '
6.0 i
7.0 i
9.3 !
11.1 i
13.8 !
i
32.2 '
38.7 !
39.1 i

i

Pounds. ! Relative.

7.9

4.9

11.6

1,000,620

84

10.5 |
10.2 '
13.2 I
12.5 j
23.8 i
17.8 i

<>. 5
0.0

8.'8
11.9
16.1

13.2
15.3
20. 2
18.8
30.1
27.4

1,997,314
3,813,595
3,973,754
2,814,270
2,330,345
2,080,863

98
186
194
138
114
131

|
30.7 I
39.8 i
47.8 i

30. 5
41.1
41.8

37.5
48.6
52.7

1,461,827
1,742,812

71
91

E.—Figures of idle wool machinery for Nov. 1 and Dec. 1 are not entirely comparable with previous figures, due to fact that later figures are
NOTE.
l>or
for numbt of machines running on single shift, while earlier figures count as two a machine running double time. The ellect is, however, small.




384

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

Production of wood pulp and paper.
[Federal Trade Commission.]
[Net tons.]
Wood | News
pulp, i print.

Paper
board.

Wrapping.

Fine.

103,348
262,377 113,826
246,741 ! 99,528
237,624 I 88,155
270,849 ! 97,693

1918.
July
August
September...
October
November...

Book.

69,458
76,439
66,581
60,743
67,262

177,931
192,810
168,384
143,373
152,321

70,526
71,249
61,390
56,903
61,681

34,609
36,910
37,833
28,533
33,429

Wood
pulp.

News
print.

Book.

Paper
board.

Wrapping.

Fino.

December.

273,973

107,129

64,501

134,103

51,947

29,975

1919.
January...
February..

283,270
238,228

116,289
106,159

73,809
61,673

142,764
127,917

52,226
44,524

29,407
23,995

1918.

Tax-paid manufactured tobacco products in the United States (excluding Porto Rico and Philippine Islands.)
[Commissioner of Internal Revenue.]
Cigars.

I
Large.

Cigarettes.
Small.

Small.

1918.
February

Number.
555,137,877

Number.
• Number.
66,306,271 12,716,702,135

July
August
September
October

634,609,533
624,491,239 |
585,400,449 j
594,764,527 I

79,237,849
60,880,910
60,556,000
63,111,160

'3,796,878,822
3,442,446,234
13,403,205,736
3,027,300,975

j

Cigars.

Chewing |!
andsmok- ||
ing tobacco, ij

Cigarettes.

I
j

Large.

Small.

Pounds. \
1918.
Number.
537,794,904
35,520,128 | November..
December.. 527,586,098
!
36,607,578
1919.
40,764,853 !
37,803,818 | ; January
i 518,700,482 !
39,440,893 j February

Small.

Chewing

an(j

gjnojj.

! i n S tobacco.

Number.
, Number,
j
63,177,200 2,986,775,643 j
59,139,250 2,788,379,210 '

Pounds.
32,618,009
25,276,695

72,458,974 3,079,212,253 !

29,308,616

Output of locomotives and cars.
[Locomotives, United States Railroad Administration; cars, Railway Car Manufacturers' Association.]
Output of cars.

Locomotives.

Domestic.

Domestic!
shipped. |

July
August
September.,
October

214
267
295

77
213
313

3,312
2,437

Domestic Foreign
comshipped. pleted.

4,410 I
4,847 i
3,564 j
2,6S1 !

7,722
7,284
6,230
7,236

1918.
November.
December..

Domes-

Number.

Foreign. ! Total.

Number. \ Number. Number. Number. • Number.
5,944
3,010 |
8,954

1918.
February....

Output of cars.

Locomotives.

j
Number. I Number. Number.
«,093
6,743 |
2,330
11,278
7,876 j
3,402

224
281

1919.
January....
February..

282
135

Number.
252
177
84 |
164 !

Foreign.

8,172 I
6,623 i

3,635
4,657

Total.

11,807
11,280

Vessels built in United States, including those for foreign nations, and officially numbered by the Bureau of Navigation.
[Monthly average 1911-1913=100.]
Gross
tonnage. i R e l a t i v e .

Number.

February
July
August
September
October




1918.
S4 j
193
177
170
202

j
i
i
!

117,601 j

521

220,931 !
295,349 |
308,470 I
357,532 !

951
1,222
1,276
1,479

Number.

November
December

Gross
tonnage.

Relative.

1918,
171
153

357,660
283,359

1,480
1,173

132
135

264,346
271,430

1,094
1,203

1919,
January
February

APBILI, 1919.

385

FEDERAL RESERVE BULLETIN.

Tonnage of vessels cleared in the foreign trade.
[Department of Commerce.]
[Monthly average 1911-1913=100.]
Net tonnage.

American.; Foreign.

1918.
February..
July
August
September..
October

757,141 | 1,511,845
2,093,310
2,332,577
2,009,194
1,875,947

! 2,941,171
! 2.808,466
j 2; 290,872
I 2,163,383

Total.

2,268,986
5,034,481
5,141,013
4,300,066
4,039,330

Net tonnage.

Percentage
of
RelaJRel; Ameri- tive.
Rela- can to
tive. total.

63 I
129
132
111
104

33.4

41.6
45.4
46.7
46.4

132.

American. Foreign.

1918.
November.
December..

164
179
1919.
185 January
184 I February..

Net ton-miles, revenue and

Total.

1,770,935 1,991,725 3,762,660
1,141,319 2,053,517 3,194,836
1,166,391
1,262,487

1,896,123 3,062,514 I
1,671,070 2,933,557 j

Percentage
Relaof
tive.
Rela- ! Ameritive. can to
total.

47.1
35.7

186
141

78 I 38.1
75 j 43-0

151
170

97 !

nonrevenue.

[United States Railroad Administration.]
1918.

•
;

February

|

July
August
Seotember
October

j
|
;
\




29,217,552,000 I November
December
38,761,291,000
38,469,847,000 '•
38,592,137,000 January
39,548,562,000 February

1918.

35,533,026,000
33,659,507,000

2919.

30,383,169,000
25,681,943,000

386

FEDERAL, BESERVE BULLETIN.

APRIL 1,

1919.

NUMBER OF DISCOUNTING MEMBER BANKS.
(See diagram on p. 387.)

Between January 1, 1917, and the end of maximum. On the whole the number of borFebruary, 1919, the number of member banks rowing institutions has been steadily increasing
of the Federal Reserve System increased from during the entire war period, recessions in these
7,624 to 8,748, while the number of member totals being relatively slight. The largest debanks accommodated through the discount of creases in the number of borrowing institutions
paper rose from 309 in January, 1917, to 3,091 are shown for January, 1918, in the interval
in February of the present year. The first between war finance operations in connection
large increase from 590 to 900 in the number of with the second and the third loans, and for
borrowing members is shown for the month of December, 1918, the month following the conJune, 1917, when the first Liberty loan was clusion of the armistice.
placed. In November, when the first installHand in hand with the increase in the numment of the second war loan fell due, the number of discounting institutions goes the inber of borrowers increased to 1,574. In May,
1918, when 20 per cent of subscriptions of the crease in the amount of discounted paper carthird loan were payable, the number of bor- ried for their members by the Federal Reserve
rowing members was 2,793, increasing gradu- Banks. Reductions in loans are shown for
ally to 3,671 in August, the largest number July and August, 1917, following the placing
shown, and over 43 per cent of the total mem- of the first war loan, in February, 1918, in the
bership reported at the close of that month. interval between the second and third loans,
The financing of the fourth loan and its con- and in the two months following the armistice
summation in October, 1918, apparently did declaration. The largest average monthly
not add to this number, though the November i amount of discounts held, $1,768,745,862, is
total of 3,667 nearly approaches the August I shown for November, 1918.

Months.

Number of member banks in |i Number of member banks ac- Average amount of discounted paper held during
month.
system at end of month. I coinmodated each month
through discount of paper.
1917

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




7.624 !
7.625j
7,625 :
7,634
7,651
7,657
7,681
7,733
7,748
7,783
7,846
7,882

978
031
083
,149
105
218
323
453
533
617
668
711

1917

1919

1918
I
I
!
!
I
!
i
i
j
|

i

8,713 j
8,748
I
i
i
j
!
i

j

309
262
315
381
590
900
960 j
990 I
953
1,140
1,574
1,701

1918
1,432
1,353
1,568
2,100
2,793
3,021
3,462
3,671
3,464
3,610
3,667
3,288

1919
3,316
3,091

1917
§20,876,802
17,900,040
18,190,709
24,902,567
42,710,392
151,233,725
147,797,115
134,987,615
182,439,407
313,771,389
568,352,241
664,153,799

1918
S611, 235,224
531, 541333
,541,333
567,
,474,932
769,
,259,187
902,
,101,974
938,
,441,907
165
1,165,649,422
, , 701,494
1,337, 152,988
1,603, 766,375
1,709, 745,862
1,768, 155,925
1,749,

1919
SI,734,600,017
1,763' 226,458
,
,
,
!
i
|
j

00
CO

TOTAL NUMBER OF MEMBER BANKS AND NUMBER
OF MEMBERS DISCOUNTING. ALSO AVERAGE DISCOUNTS
HELD BY ALL ER.BANKS DURING EACH MONTH, 1917-1919.

il p
PQ
PS

g




Chrpe I: Member of Jternbet-JBarif® at end ofeajch,?non£;h.
Czirpe Z.Mmderof'Member j&mfo*Sksamn£cM during eacfvmonths.
Carve 3: Jfveragejf7ri0un£c^!Di$€0ii?i£s ]tel&

2000 tarn
1900
1600 sooo
1700
1600 §00)
ISOO
1400 7000
1300
1200 6000
JIOO
1000 sooo
900
600 4000

JOOOO EGOO

ieoo

//
/
(
*-*
/
/
t
V
A

/

f

f

/

600 3000
SOO
400 2000
300
200 1000
0

3000 MOO
1700
SOOO 1600
ISOO
7000 1400
1300
0000 1200

—i

700

100
0

1?

K

)

/
s

\s

/ /
<
4

/

Pi

noo
sooo /ooo
SOO
800
700
3000 600
SOO
2000 400
300
1000 ZOO
d/YY)
riAAs
e

p*—<
ymmmm4

o

\t 1 % .1917 § § M U 1111111S1 § 13J9.
11II
U
L2L8

100
Q .

388

FEDERAL BESERVE BULLETIN.

APRII i 1, 1919.

DISCOUNT AND OPEN-MARKET OPERA- $1,601,128,000 on the last Friday in January,
TIONS OF THE FEDERAL RESERVE and $509,534,000 on the corresponding date
in 1918. Of the total discounts held the share
BANKS.

For the month of February discount operations of the Federal Reserve Banks totaled
$4,980,935,514, compared with $5,994,382,265
for January and $762,439,698 for the month of
February of the past year. Nearly the entire
decrease since January is due to the reduction
in the amount of war paper discounted,
especially by the New York Federal Reserve
Bank. Of the total discounts for the month
under review the share of war paper was 95.2
per cent, or only slightly less than the month
before, compared with 52 per cent shown for
February, 1918. About 54 per cent of the
total discounts and of the discounts of war
paper are reported by the New York bank.
With the exception of Dallas and San Francisco all Federal Reserve Banks show smaller
discount operations than during the first month
of the year.
Other discounts for the month comprise
$24,299,755 of member banks' notes secured
by eligible paper, $8,879,930 of trade acceptances based largely upon domestic trade transactions, also $737,420 of bankers7 acceptances.
Over 97 per cent of the total discounts for
the month was composed of 15-day paper,
i. e., bills maturing within 15 days from date
of discount with the Federal Reserve Bank.
The average maturity of the paper for the system works out at 10.71 days, compared with
10.34 days the month before. All the banks
except Kansas City and Dallas—which report
among their total discounts relatively large
amounts of 6-month paper—show average maturities below 20 days, and New York and
Philadelphia average maturities below 10 days.
Owing to the large preponderance of war paper
discounted at the preferential rate the average
rate of discount for the month was 4.15 per
cent, compared with 4.18 per cent for January.
On the last Friday of the month the Federal
Reserve Banks held a record total of $1,879,820,000 of all classes of discounts, as against




of war paper was 88.7 per cent, compared with
84.8 the month before and 52.8 per cent about
a year previous. For the three eastern banks
and Chicago this share was in excess of 90 per
cent, while for the Kansas City and Dallas
banks the proportion was below 50 per cent.
Holdings of live-stock paper totaled $31,345,000, compared with $28,710,000 on the
last Friday in January, practically the entire
amount being reported by the Kansas City,
Dallas, and San Francisco banks. Agricultural
paper on hand totaled $32,572,000, of. which
over 55 per cent was the share of the Chicago
and Dallas banks.
During the month under review the membership increased from 8,713 to 8,748 banks. The
number of discounting members declined from
3,316 to 3,091, largely in the Boston, Chicago,
and Minneapolis districts, as may be seen from
the following exhibit giving the number of
member banks at the end of the last two months
as well as the number of banks discounting
during these two months:

Federal Reserve Bank.

Number of member Number oi" member
banks accommobanks in district.
dated.
Jan. 31. | Feb. 28.

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

January. February.

424
724
663
817
066
425
1,338
511
868
994
733
650

423
722
663
821
568
427
1,353
512
873
996
737
653

191
395
351
153
242
245
416
176
168
334
419
226

152
403
322
143
266
236
301
167
128
313
403
257

8,713

8,748

3,316

3.091

Bills bought during February in open market,
either directly or through the intermediary of
the New York bank, totaled $147,410,093. By
far the larger portion of this paper, viz,%$143,135,749, was composed of bankers7 acceptances.
Of the smaller total, $81,258,204 represented
bankers' bills based upon foreign trade trans-

APRIL 1,

389

FEDERAL RESERVE BULLETIN".

1919.

actions, and $61,877,545 like bills based upon
domestic trade transactions. Trade acceptances bought in open market by three banks
totaled $2,805,364, of which $2,255,982 represented trade acceptances based upon foreign
trade transactions. In addition a total of
$1,468,980 of finance bills was bought during
the month. The average maturity of all bills
bought works out at 44.85 days, ranging between 33.29 days for bills bought by the
Boston bank and 73.56 days for bills bought
by the Atlanta bank. About 92 per cent
of the total amount was purchased at rates

from 4 to 4£ per cent, the average on a 365
days' basis working out at 4.23 per cent.
Holdings of bankers' acceptances by the
Federal
Reserve Banks declined from
$275,683,000 on the last Friday in January to
$271,488,000 on the last Friday in February.
Holdings of trade acceptances originally purchased in the open market likewise show a
decline for the month from $5,610,000 to
$4,421,000. The average rate of earnings
from all classes of acceptances for the month
of February was 4.25 per cent, compared with
3.79 per cent for February, 1918.

Total investment operations of each Federal Reserve Bank during iheinonths of February, 1919 and 1918.
Total investment operations.

United States securities.
Federal Reserve
Bank.

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total, February, 1919
Total, February, 1918

Bills discounted for
members.

Bills
Municibought in pal war- j
open
rants. \ 3& per
market.
centbonds.

bonds.

j 41-per United States
cent I certificates of
bonds, i indebtedness.

I

I

Total.

§3,000,000 8379,081,553
317,375,500 3,041,498,231
1,000,000
643,150,003
1,550,000
212,424,705
279,254,369
76,000
111,680,376
1,146,000
276,621,470
127,923,659
18,047,882
90,856,720
93,354,695
180,925,144

§355,740,459 820,341,094
,
2,667,770,967 56,351,764
640,608,351 1,541,652
197,596,593 13,278,112
276,675,719 2,502,650
108,716,487 1,817,889
263,047,705 13,573,765
115,577,865 11.345,794
12,489,980 4,563,902
87,500,062 3,190,558
92,411,695
943,000
162,799,631 17,959,913j

$146,000

$3, 000,000!
317 375,5001
000,000i
1, 550,000,
76,0001
1, 000,000

100

,000,000
994,000
166,000

ioo

165,500

4,980,935,514147,410,093'

146,200

326,327,000

326,473,2

518,192,000

532,938,700

J<

762,444,698148,275,106 S136,549 SI, 679,300 S13,067,400

February,
1919.

February,
1918.
$76,830,912
808,039,215
42,052,051
110,832,074
126,376,985
22,425,412
138,201,608
34,016,112
14,008,540
21,669,881
12,652,185
36,690,078

5,454,818,807
1,443,795,053

Total 2 months
ending Feb.
28,1919
10,975,317,779 348,901,799
1,000
1,000,0001 160,375 1,154,774,000 1,155,934,375 12,480,153,953
),000|
Total 2 months
ending Feb.
J 2,969,779,782
28,1918
l,630,674,317 278,894: 615J1,392,512 2,773,400| 26,310,938
11,549,214,000 1,058,818,338




I

i Includes 8520,000 of one-year Treasury notes.

390

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

Average amount of earning assets held by each Federal Reserve Bank during February, 1919, earnings from each class of earning
assets and annual rates of earnings on basis of February, 1919, returns.
Average balances for the month of the several classes of earning
Federal Reserve Bank.
Discounted
bills.
'

Total, February, 1919
Total, February, 1918

8142,420,149
734,456,855
185,697,842
98,136,063
91,829,939
74,524,548
158,132,792
! 51,105,261
| 18,848,000
68,737,839
51,646,075
87,690,495

813,460,610
54,309,086
2,232,553
60,381,053
7,458,218
8,873,346
32,728,217
13,625,847
28,660,000
12,780,194
2,396,607
39,181,750

$10,989,464
65,724,780
12,631,829
12,431,432
6,557,628
7,443,912
21,589,357
8,453,543
9,392,000
14,294,287
8,172,842
8,690,771

54,000

$166,870,223
854,490,721
200,562,224
170,948,548
105,845,785
90,845,806
212,450,366
73,184,651
56,900,000
95,812,320
62,216,124
135,563,016

il, 763,226,458 ! 276,087,481
I 531,541,333 | 289,071,546

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

Purchased
bills.

186,371,845
180,516,005

4,000
824,723

2,225,689,784
1,001,953,607

Earnings from—
Federal Reserve Bank.

Discounted,
bills.

Total, February, 1919
Total, February, 1918

842,396 $17,297
175,003 121,784
7,279
21,433
196,025
21,530
20,562 i 10,265
31,019
11,521
37,689
107,943
13,827
43,449
21,895
92,200
24,290
43,143
14,332
8,651
15,028
120,018

5,652,919
II, 638,446

899,688
841,259

330,891
449,846

Total.

Calculated annual rates of earnings from—

PurUnited Municichased States se- pal warbills. ! curities.
rants.

$446,162
12,277,507
| 584,112
j 314,467
j 297,061
I 240,958
j 521,476
! 162,571
j 64,226
! 251,179
188,062
305,138

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
4
San Francisco

United States Municipal
securities. warrants.

Total.

$505,855
2,574,294
612,824
532,022
333,888
815 283,513
667,108
219,847
178,321
318,612
211,045 i
446,184
15 6,883,513
2,362 2,931,913

Discounted
bills.

Purchased
bills.

United
MuniciStates se- pal warcurities.
rants.

Total.

Per cent. Per cent. Per cent. Per cent. Per cent.
4.08
4.11
2.05
3.95
4.04
4.20
2.41
3.09
4.10
4.25
2.21
3.98
4.18
4.23
2.26
4.06
4.22
4.64
2.04
4.11
4.22
4.56
2.02
4.07
4.94
4.28
4.30
2.28
4.09
4.15
4.16
2.13
3.92
4.44
4.19
3.04
4.08
4.76
4,40
2.22
4.33
4.74
4.70
2.28
4.42
4.54
4.19
2.25
4.29
4.18
4.02

4.25
3.79

2.31
3.25

4.94
3.73

4.03
3.81

Bills discounted for member banks during the month of February, 1919, distributed by classes; also average rates and matu
rities of bills discounted by each Federal Reserve Bank.

Federal Reserve Bank.

Trade ac-

$31,255,392 $304,998,300 813,182,000 1 $1,211,748
36,894,814 2,518,274,955
2 3,907,288
20,450,724 596,245,257
113,663
7,484,120 181,619,800
693,731
5,858,837 264,232,811
7,500
56S,851
1,138,803
99,313,600
371,794
65,000
2,782,685 246,929,273
237,317
1,849,670
966,087
370,525
107,401,737
42,031
9,631
5,000
11,986,700
2,220,993
540,233
66,605,343 8,527.585
533,504
145,391
79,109,964
663;000
709,758
2,199,766
150.389,070

Boston
New York
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City....
Dallas
San Francisco.,
Total February, 1919
Total January, 1919




Member banks' collateral
notes.
Customers
paper secured by
GovernSecured by
ment war Government Otherwise
obligations. war obligasecured.
tions.

1

I l l , 827,756 14,627,106,810
192,141,173 15,519,031,646

Includes $928,23.5 in the foreign trade.

24,299,755
20,114,004

Bankers 3 All other
accept- discounts.
ances.

Total.

Average
Average rate (365day
maturity
in days. basis) per
cent.

$81,215 $5,011,804 8355,740,459
267,840 108,426,070 2,667,770,967
23,798,707
640,608,351
7,798,942
197,596,593
6,007,720
276,675,719
7,827,290
108,716,487
263,047,705
11,248,760
115,577,865
6,458,516
381,000
12,489,980
446,618
87,500,062
9,605,908
92,411,695
11,959,836
162,799,631
""7,"365' 9,493,672

12.44
8.68
8.46
14.84
10.75
17.15
15.95
13.42
17.09
22.26
23.07
15.74

4.13
4.03
4.08
4.13
4.28
4.18
4.14
4.15
4.28
4.68
4.52
4.50

8,879,930
737,420 208,083,843 14,980,935.514
10,903,033 1,577,514 250,614,895 |5,994,382,265

10.71
10.34

4.15
4.18

2

Includes $845,553 in the foreign trade.

APKIL 1,1919.

391

FEDERAL RESERVE BULLETIN.

Bankers and trade acceptances in the foreign and domestic trade and finance bills purchased during February, 1919; also
average rates and maturities of total bills purchased by each Federal Reserve Bank.
Trade acceptances.

Bankers' acceptances.
Federal Reserve Bank.
Total.

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

$7,412,034 .§12,929,060 -120,341,094
21,915,888 i 32,470,077 54,385,965
579,770 I
1,441,652
861,882
6,273,559
6,422,126 12,695,685
1,503,650
999,000 2,502,650
1,684,667
133,222
1,817,889
7,962,194 5,560,586 13,522,780
5,438,242
5,431,844 1 10,870,086
I
1,689.682 2,874,220
4,563,902
925,642 2,264,916 3,190,558
200,000
743,000
943,000
6,292,217 10,568,271 16,860,488
i 61,877,545

81,258,204 |143,135,749

In the
domestic
trade.

In the foreign trade.

Average
Finance
Mils.

Total.

§492,853

$810,659

$1,303,512

56,529

375,898

432,427

519,382

2,255,982

1,069,425 | 1,069,425

Total pur- Average j
chased bills.

$20,341,094
$662,287 56,351,764
100,000 1,541,652
150,000 13,278,112
2,502,650
1,817,889
50,985 13,573,765
475,708 11,345,794
4,563,902
3,190,558
943,000
30,000 17,959,913
147,410,093

2,805,364

33.29 !
36.58 I
33.88 I
51.93 i
65.48
73.56
58.39
48.63
57.56
53.01
62.80
54.71

4.17
4.18
4.13
4.22
4.56
4.56
4.26
4.21
4.21
4.19
4.67
4.29

44.85

4.23

Discounted bills, including member banks1 collateral notes, held by each Federal Reserve Bank on the last Friday in
1919, distributed by classes.

February,

[In thousands of dollars; i. e., 000 omitted.!

Federal Reserve Bank.

Boston
New York.....
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis....
Kansas City....
Dallas
San Francisco..
Total.
Per cent
Total, February, 1918
Per cent




Agricultural
paper.

Member banks' collateral notes.
Customers'
paper seLive-stock cured by
paper.
Govern- Secured by
Govern- Otherwise
ment war
obligations. ment war
secured.
obligations.
52,441 |.
660,750 j .
147,162 j .
91,148 I.

Trade acceptances.

159
124
19
3,011
2,421
9,346
91
666
3,880
8,785
4,070

133
610
16,937
9,130
4,265

87,400
81,229
29,828
10.061
12;354
5,885
7,104
2,156
49
765
1,239
3,883

1,583

32,572

31,345

241,953

1,426,013 I

7,302

13,400

1.7
3,735
0.7

1.7
17,502
3.4

12.9
146,838
28.8

75.8 1
122,332 !
:
24.0

.4
22,337
4.4

.7
18,678
3.7

56
3
211

77,282 j .

56,923 j
155,604 I
47,126 '.
15,675 j .
31,657 i
23,143 !
67,102 !.

781
6,094
422

1,987
3,188
343
1,092
1,279
1,234
1,055
692
10
937

Bankers'
acceptances.

363
17

All other
discounts.

Total.

12

4,011
41,695
12,614
5,153
6,620
8,881
4,679
7,513
490
8,002
13,869
12,530

146,202
787,038
190,071
107,529
100,549
75,560
178,569
58,497
17,500
68,272
56,588
93,445

1,178

126,057

1,879,820

6.7
178,112
35.0

100.0
509.53-i
100.0

786

392

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

Acceptances purchased and held by each Federal Reserve Bank on Feb. 28,1919, distributed by classes of accepting

institutions.

[In thousands of dollars; i. e., 000 omitted.]
Non-

Trade acceptances.

NonMember member member
trust
banks.
State
com-

Private
banks.

Foreign
bank
branches
and

2,287

175
3,988

1,140
5,155

362
3,649

53

5,117

7,823

2,134

100 !
716 j
875 |
645 i

578
784
997
202

50
1,050
336
525

3,494 j

5,383

5,480

9,242
41,028
1,967
60,371
7,134
7,603
32,676
17,455
1
30,361
14,411
1,758
4S,493

22,062
22,163
19,740
28,419
20,389

13,586
15,119
12,994
7,097
677

271,488
275,683
2S0,244
293,767
118,136

banks.

panies.

B oston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Totals:
Feb.
Jan.
Dec.
Feb.
Feb.

7,565
25,949
1,967
45,244
7,134
7,603
31,948
15,005
28,153
12,989
1,758
34,108

28,1919..
31,1919..
31,1918..
28,1918..
26,1917..

219,423
224,237
234,323
252,747
59,498

15,110
11,986
10,442
3,856
1,094

2,418
2,178
2,545
1,648
36,478

Total.

Total.

Domestic.

Foreign.

1,816
21
176

480
250

330

Total.

2,297
21
426

330

1,348
730
1,871
2,536

3,691
3,739
4,388

4,421
5,610
6,924
5,456
5,068

9,242
43,325
1,988
60,797
7,134
7,603
32,676
17,455
30,361
14,741
1,758
49,840
276,920
281,293
287,168
299,223
123,204

Bills discounted by each Federal Reserve Bank during the three months ending February 28,1919, distributed by rates of discount; also average maturity and rates of bills discounted by each bank during the three months.
4 per cent.

4£ per cent.

Amount.
$1,036,981,903
9,870,122,386
1,802,782,689
514,912,743
235,329,439
356,251,355
770,445,747
365,796,369
33,452,990
1,027,045
209,639,881

Boston
New York
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas City...
Dallas
San Francisco.

Discount.
j$1,133,752
| 6,209,864
j 1,700,991
678,873
295,276
596,747
1,260,501
502,313
!
52,208
i
4,385
j 335,118

5 per cent.
Amount.

Total.




5i per cent.

Discount. Amount.

$996,201
1,326
16,469

44,154
5,311

5,090
453,441 j
23,771,607 j 209,117
14,597,732 i 160,109
25,956,773 236,637
72,131,027

677,374

$23,449

Discount. Amount. Discount.
$20,303
27,671
3,879
13,906
13,280
18,957
81,361
17,066
872
60,176
9,788

$11,719,653
11,890,984
2,867,001
5,242,794
15,244,341
21,733,408
31,567,916
12,594,239
1,027,279
2,004,897
16,772,246
1,933,266

$90,879
93,914
19,203
31,041
83,146
163,851
203,648
100,754
5,092
12,327
93,631

4,093,037 105,670,232

267,259 134,598,024

915,383

5£ per cent.

Discount. Amount.

Discount,

$445
$2,588,666
116,406
880,447
8,925,898

10,098,424 j 215,761
4,042,810
10,121,873

Amount.

4f per cent.

$356,222 $3,395,319
1,305,950 3,948,798
626,451
265,211
322,177 2,397,728
5,618,352
109,837 2,405,708
65,407 43,985,008
23,070 6,870,110
6,252
481,312
337,599 31,929,497
23,980 4,011,949
714,250

$16,442
239
275

6,044,185
293,293

Discount.

837,824,431
162,269,596
29,052,925
138,314,190
563,655,704
58,845,578
7,369,471
3,046,693
3,420,513
197,535,379
4,960,572
442,288,328

15,202,742,547 \ 12,770,028

Total.

Boston
New York
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas City...
Dallas
San Francisco.

Amount.

4£ per cent.

216,206 16,554,227

$55,940
2,505
19,328
189,733
87,596

Total.
Amount.

Average
Average rate (365maturity
(per
Discount. in days.
cent).

$1,090,917,507 $1,617,598
1Q, 054,233,090
7,637,638
1,835,345,535 1,989,559
660,8(57,455 1,045,997
825,915,470
999,383
439,529,342
894,703
855,956,808 1,666,857
388,423,817
615,708
39,715,982
265,194,323
813,337
260,080,804
838,387
474,221,177 1,056,380

355,102 17,190,401,310 j 19,294,389

13.19
6.85
9.66
13.75
10.27
17.59
16.89
14.50
30.42
23.46
25.53
17.84

4.10
4.19
4.15
4.20
4.30
4.22
4.21
4.18
4.43
4.77
4.61
4.56

23.42

4.19

APRIL 1,1919.

FEDERAL RESERVE BULLETIN.

393

RESOURCES AND LIABILITIES OF THE FEDERAL RESERVE BANKS.

As the result of Government finance opera- | acceptances constitute nearly one-half of the
tions, including mainly the. placing of the bank's investments, exceeding the amount of
seventh and eighth series of Treasury certifi- war paper held by that bank.
cates in anticipation of the Victory loan, the
United States bonds on hand declined about
Federal Reserve Banks show a further increase 1 million, while United States short-term securiin their holdings of war paper from 1,596.5 ties show a steadjr increase from 147.1 to 172.5
millions on February 20 to 1,691.7 millions on millions, the increase representing in part addiMarch 21. Large increases under this head tional investments by the banks in one-year
appear in the February 28 and March 7 state- 2 per cent certificates- deposited with the
ments following the issue of the seventh certifi- Treasury to secure Federal Reserve bank-note
cate series, the high level being reached on circulation, and to a smaller extent temporary
March 14, when a total of 1,702.4 millions of purchases, largely from nonmember banks, of
war paper on hand is shown. Other discounts 4J per cent certificates. Total earning assets
on hand declined 32.1 millions during the period show an increase for the period of 79.6 millions
under review. As a result the share of war and on March 21 stood at 2,343.2 millions.
paper in the total discounts held shows a
Gold reserves of the banks show an increase
further rise from 88 to nearly 90 per cent, larger from 2,125 to 2,140.8 millions, while net depercentages obtaining for the eastern banks.
posits went up from 1,730.8 to 1,768.6 millions.
Additional interbank rediscounting may be Federal Reserve notes in circulation increased
noted, the Federal Reserve Banks of Phila- during the four weeks from 2,466.2 to 2,510.7
delphia, Richmond, and Dallas reporting an millions, or at the rate of slightly over 11
aggregate increase in their contingent liabilities millions per week. It is notable that while
on such rediscounts of about 28 millions during Boston, Chicago, and especially New York, rethe same period. The Boston bank was able port substantial increases in their circulation,
to reduce its rediscount liability by about 17 the other banks show either nominal increases
millions, so that the aggregate liability of the only or small decreases. Shipments of Fedfour banks shows a net increase for the four eral Reserve notes for the use of the American
weeks of over 11 millions. In addition, con- troops returning from France, also exports in
siderable amounts of acceptances were sold to some volume to the West Indies, chiefly Cuba,
other Federal Reserve Banks, without indorse- account for some of the increase of 48.7 millions
ment, by the New York bank during the month reported by the New York bank. Aggregate
liabilities of the banks on Federal Reserve bank
under review.
Acceptances on hand declined about 8 notes show a slow though steady increase from
millions. Direct purchases from the New 133.5 to 142.4 millions. The banks7 reserve
York bank account for the gains in the accept- percentage in consequence of the increase in
ance holdings of the Chicago and Minneapolis both deposit and note liabilities shows a debanks. In the case of the Minneapolis bank cline from 52.2 to 51.6 per cent.




394

FEDERAL RESERVE BULLETIN.

APRIL 1,1910.

Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system at close of business on Fridays,
Feb. 28, 1919, to Mar. 21, 1919.
RESOURCES.
[In thousands, of dollars; i. e., 000 omitted.}
!
ton.
Gold coin and certificates:
Feb. 28
Mar.7
Mar.14
Mar.21
Gold settlement fund, Federal
Reserve Board:
Feb. 28
Mar.7
Mar.14
Mar.21
Gold with foreign agencies:
Feb. 28
Mar.7
Mar.14
Mar.21
Gold with Federal Reserve
agents:
Feb. 28
Mar.7
Mar.14
Mar.21
Gold redemption fund:
Feb. 28
Mar.7
Mar.14
Mar.21
Total gold reserve:
Feb.28
Mar.7
Mar.14
i
Mar.21
Legal-tender notes, silver, etc.:
Feb. 28
Mar.7
Mar.14
Mar.21
Total cash reserves:
Feb. 28
Mar.7
Mar.14
Mar.21
Bills discounted:
Secured by Government
war obligations—
Feb. 28
Mar.7
Mar.14
Mar.21
All other—
Feb. 28
Mar.7
Mar.14
Mar.21
Bills bought in open market:
Feb. 28
Mar.7
Mar. 14
Mar.21
United States Government
long-term securities:
Feb. 28
Mar.7
Mar. 14
Mar.21
United States Government
short-term securities:
Feb. 28
Mar.7
Mar.14
Mar.21
All other earning assets:
Feb. 28
Mar. 7
Mar. 14
Mar.21
Total earning assets:
Feb. 28
Mar.7
Mar.14
Mar.21




New
York.

2,802
3,104
3,272
3,598

260,524
260,434
245,713
244,721

51,026
43,537
37,625
31,381

43,870
53,226
106,615
187,527

41,112
46,862
43,263
41,377

70,291
66,152
55,125
66,222

408
408
408
408

2,011
2,011
2,011
2,011

408
408
408
408

525
525
525
525

48,954
48,648
56,681
55,604

257,256
256,181
269,783
269,230

68,566
65,073
61,533
59,059

15,567
17,064
9,459
11,368

Phila- Clevedelphia. land.

280 17,529
214 14,440
132 21,444
205 21,746

24,627 19,082
24,627 22,104
25,000 25,021
24,918 27,071

Chicago.

162
92
115
106

6,013
6,018
6,047
6,085

12,259
11,068
10,774
7,780

345,762
341,070
332,749
329,741

16,439 17,756 97,959 22,594
29,341 21,435 121,461 22,919
33,749 16512 101,502 16,109
16,512 101502
41,092 9,312 98,751 16,634

28,793
26,372
17,033
10,444

39,645
29,654
26,202
25,118

7,464
14,325
11,687
8,140

26,535
35,943
35,656
30,866

463,484
511,227
501,078

233
233
233

291
291
291
291

204
204
204
204

321
321
321
321

5,829
5,829
5,829
5,829

296,589 68,316
296,094 64,436
296,878 62,425
265,433 42,163

54,563
54,035
53,192
52,877

48,101
46,759
45,359
39,622

19,765 101,739
19,052 91,212
18,406 92,390
18,041 96,609

1,187,760
1,163,840
1,170,601
1,112,938

4,339
3,104
3,940
5,084

4,759
5,165
5,937
6,067

3,692
4,923
6,205
3,359

224,920 72,246 72,089 448,346 99,782
218,791 84,455 75,426 464,602 95,017
208,602 87,864 70,195 447,052 86,908
222,308 94,779 63,100 416,088 68,374

96,630
94,073
84,671
77,910

204
204
204
204

175
175
175
175

135,947 47,374
136,625 45,079
130,781 43,327
132,060 42,104

40,590
40,646
39,846
40,136

1,049
727
1,755

5,964
7,572
8,440
9,199

23,024
22,555
22,539
22,732

816
816
816
816

5,246 29,958
4,877 23,676
5,570 25,317
5,438 28,356

129,448
134,661
130,357
128,120

5,880
6,328
6,566
6,334

50,980
51,015
52/091
52,429

211
308
356

1,082
1,203
1,083
1,101

253
236
159
433

962
883
877

1,376
1,113
1,214
1,421

124,637
119,089
114,011

639,268
647,494
701,213
780,836

129,751
134,872
130,665
128,476

226,002
220,054
209,685
223,409

72,499
84,691
88,023
95,212

73.077
76,388
71.078
63,977

449,722
! 465,715
448,266
417,509

139,841
143,801
144,517
136,864

741,979
775,574
761,365
676,608

17G,990
178,403
178,171
169,255

101,209
96,969
110,674
114,661

89,636
78,761
77,348
86,799

62,808 162,708
64,722 155,544
64,905 1152,165
65,423 191,704

45,059 13,081
29,157 9,331
11,536
32,052 13,020

4,934
4,503
3,654

10,913
11,671
10,649
11,898

12,752 15,861
11,905 15,219
12,318 13,33(i
12,621 14,903
7, fiO3 32,076
7,504 32,580
7,398 51,802
7,223 49,253

9,241
10,393
9,816
10,572

43,325
40,088
16,897
27,158

1,987
1,(358
1,332
2,291

00,797
57,648
51,183
47,231

7,134
6.568
e;6io
6,932

538
538
538
538

1,391
1,389
1,390
1,390

1,385
1,385
1,385
1,385

1,084
1,083
1,083
1,083

1,234
1,234
1,234
1,234

378
378
378
378

12,416
12,416
14,416
14', 416

58,747
59,707
63,462
64,436

11,781
12,281
13,780
15,280

11,341
12,342
12,842
13,457

5,375
5,375
5,375
5,375

7,464
7,464
7,964
8,474

4,510
4,476
4,477
4,476

233
233
233

2,205
2,305
2,310
2,198

171
193
112
102

1,880
2,048
2,606
2,173

4,421
1,304
1,055
.082

120,163
117,513
119,277
125,470

91,891 35,326 145,275
81,719 41,647 139,848
78,172 38,950 140,196
68,496 34,643 136,258

2,122,998
2,139,479
2,129,534
2,140,842

188
148
232
124

1,980
1,948
2,056
2,127

319
201
189
234

65,725
65,983
67,203
67,736

101,987 96,801 92,079
97,322 94,266 81,867
89,218 84,783 78,404
70,572 78,012 68,620

37,306
43,595
41,000
36,770

145,594
140,109
140,385
136,492

2,188,723
2,205,462
2,196,737
2,208,578

49,282 15,724 32,421 24,382 70,985
54,968 16,285 37,445 23,058 75,897
57,931 21,144 40,880 20,921 72,324
77,274 27,356 50,589 21,158 73,987

1,667,965
1,701,487
1,702,351
1,691,678

9,215
8,343
8,197
8,627

1,776
1,486
1,400
1,404

35,851
30,018
38,348
38,088

17,455 30,361 14,741
17,943 33,711 14,136
17,366 36,332 14,143
14,278 .33,611 13,751

32,206
30,738
j 29,798
| 29,380

22,460
21,232
19,448
17,923

211,855
186,240
184,012
189,861

j 1,75849,841
1,958 49,300
1,558 47,702
1,803 47,821

270,919
273,493
202,139
201,924

1,154
1,154
1,153
1,153

117
117
117
117

8,868
8,808
8,808
8,808

*3,967
3,967
3,907
3,907

2,468
2,408
2,633
2,033

27,094
27,057
27,223
27,222

16,612 I 8,068
16,612! 8,068
16,612 8,068
16,612

9,139
9,709
9,595

5,510
6,030
6,120

3,900
4,400
4,400
4,400

5,329
5,425
5,714
5,547

155,688
159,835
108,348
172,473

4
4
4
4

890,501
905,915
872,348
801,644

205,224
203,118
206,204
201,831

Total.

8,282
8,268
8,276
8,289

8,322
8,293
8,092
8,039

588,288
596,479
649,122
728,407

168,397
173,354
174,532
167,475

San
Francisco.

4,300
4,325
4,201
4,260

2,265
2,259
2,144
2,180

118,757
112,761
107,445
102,359

6,361
6,206
5,245
5,085

Minne- Kansas
St.
Louis. apolis. City. Dallas.

180,751
172,976
180,285
180,086

114,292
103,609
101,216
112,238

91,009
91,977
92,967
94,123

4
4
232,367 85,174 57,117
224,437 90,476 61,308
238,392 92,715 68,588
276,948 110,400 71,826

97,397
102,503
108,365
117,964

66,213
64,121
60,644
60,714

151,083 2,339,525
154,322 2,348,116
147,821 2,344,077
147,911 2,343,160

395

FEDERAL RESERVE BULLETIN.

APBIL 1,1919.

Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system at close of business on Fridays,
Feb. 28, 1919, to Mar. 21, 1919—-Continued.
RESOURCES—Continued.
[In thousands of dollars; i. e., 000 omitted.]
Boston.
Bank premises:
Feb. 28
Mar.7
Mar. 14
Mar.21
Uncollected items and other deductions from gross deposits:
Feb. 28
Mar.7
Mar. 14
Mar.21
5 per cent redemption fund
apainst Federal Reserve bank
notes:
Feb. 28
Mar.7
Mar. 14
Mar.21
All other resources:
Feb.28
Mar.7
Mar. 14
Mar.21
Total resources:
Feb.28
Mar.7
,
Mar. 14
Mar.21

800
800
800
800
52,246
47,706
56,891
77,164

New
York.

3,302
3,302
3,302

Phila- Cleve- RichChidelphia. land. mond. Atlanta. cago.

500
500
500
500

163,406 76,917
145,811 60,109
172,196 61,541
180,933 72,273

San
St.
Minne- Kansas
Louis. apolis. City. Dallas. Francisco.

2,936
2,944
2,944
2,936

541
540
541
540

52,447 43,387 31,917 74,327
47,784 40,862 26,302 74,657
57,000 44,292 32,970 93,566
66,420 55,924 43,810 95,820

42,817
42,155
43,066
43,996

15,196
12,273
13,226
19,072

100
100
100
100

296
296
295
295

217
217
217
217

400
400
400
400

Total.

221
221
221
221

400
400
409
400

9,713
9,720
9,720
9,711

57,018 19,549
56,659 19,406
52,882 21,591
61,287 43,258

24,238
25,473
33,796
37,346

653,465
599,197
683,017
797,303

6,813
7,429
6,745
6,901

556
1,269
616
716

1,830
1,812
1,836
1,819

600
625
700
700

572
544
576
623

190
162
98
315

375
393
377
426

775
731
621
408

309
305
337
259

241
227
199
254

685

335

356
356
356

365
188
255
224

2,297
2,133
1 771
1,701

894
852
" 892
1,389

589
528
440
537

274
621
499
448

385
273
249
273

1,059
965
888
657

450
314
311
307

95
124
123
114

444
463
502
405

790
770
709

959
807
1,008

347,001
342,406
347,105
355,072

1,700,604
1,706,467
1,752,666
1,770,235

413,886
400,076
400,502
405,169

460,461
441,986
448,086
471,175

230,938
230,241
234,423
264,432

196,980
195,550
197,858
202,826

761,186
769,449
784,677
794.278

231,278
231,112
226.188
226,074

169,450
168,198
166,919
169,278

248,023
242,582
241,247
249,366

124,399
128,448
124,567
142,007

322,530
321,619
323,565
323,513

8,497
8,210
7,507
7,772
5,206,736
5,178,134
5,247,803
5,373,425

324
315

LIABILITIES.
Capital paid in:
Feb.28
Mar.7
Mar. 14
Mar.21
Surplus fund:
Feb.28
Mar.7
Mar.14
Mar.21
Government deposits:
Feb.28
Mar.7
Mar.14
Mar.21
Due to members—reserve account:
Feb.28
Mar. 7
Mar.14
Mar.21
Deferred availability items:
Feb.28
Mar.7
Mar.14
Mar.21
Other deposits, including foreign government credits:
Teb.28
Mar.7
Mar.14
Mar.21
Total gross deposits:
Feb.28....
Mar.7
Mar.14
Mar.21
Federal Reserve notes in actual
circulation:
Feb.28
Mar.7
Mar.14..
Mar.21




6,773
6,772
6,775
6,775

20,925
20,927
20,927
20,927

1,535
2,996
2,996
2,996

21,117
21,117
21,117

26,124
23,062
18,217
39,241

7,577
7,577
7,577
7,576

9,215
9,220
9,218
9,218

4,110
4,114
4,114
4,114

3,177
3,177
3,180
3,180

11,290
11,278
11,350
11,372

3,823
3,824
3,805
3,825

2,948
2,950
2,959
2,969

3,735
3,737
3,738
3,738

3,200
3,202
3,198
3,198

4,679
4,712
4,721
4,720

81,452
81,490
81,562
81,612

1,304
2,608
2,608

1,776
3,552
3,552
3,552

1,156
2,196
2,196
2,196

775
1,510
1,510
1,510

3,316
6,416
6,416
6,416

801
1,603
1,603
1,603

1,415
1,415
1,415

1,211
2,421
2,421
2,421

592
1,184
1,184
1,184

1,224
2,448
2,448
2,448

22,738
49,466
49,466
49,466

25,530 13,953 14,043 15,289 7,863
28,803 13,098 12,244 10,719 8,602
23,675 9,942 9,530 10,645 9,023
42,219 12,094 6,375 22,517 12,040

14,246
16,816
12,739
17,502

210,547
195,559
150,783
285,785

33,543 17,674
32,054 17,149
15,063 10,663
43,766 20,771

95,750
98,517
94,186
85,311

671,818
678,210
715,361
687,643

92,912
96,460
102,767
87,351

42,844
36,073
46,608
39,856

120,541
110,762
122,338
130,978

68,763
52,235
54,907
65,225

106
271
616
170

113,744
112,562
105,704
107,714

851
562
744
643

164,824
157,923
159,627
164,578

939,646
933,588
958,466
970,101

159,552
160,876
163,142
165,338

677,619
689,212
710,002
715,569

27,102 5,943 9,237
21,169 2,048 9,795
15,295 4,213 11,778
27,474 28,078 13,708
129,957
128,111
132,499
130,663

52,671
55,171
54,001
50,397

44,889
42,634
42,900
44,221

233,097
230,740
232,801
221,429

58,638 48,792
61,630 48,781
59,383 49,255
59,656 49,434

75,371
69,100
73,131
71,617

38,715
38,321
39,463
39,406

78,362
78,401
79,298
77,591

1,620,972
1,626,076
1,675,045
1,604,719

45,534 31,315 19,318
36,751 31,979 18,488
44,856 36,007 20,121
57,026 45,826 19,444

53,236
55,234
70,680
69,926

36,497 8,384
34,225 8,887
35,079 9,703
32,987 15,136

35,707
40,733
35,778
34,252

15,129 17,385
18,710 12,212
13,846 19,189
28,385 16,342

494,653
456,289
509,112
555,383

1,634
2,003
1,928
3,172

402
512
510

185
180
323
419

102
715
678
182

66
43
62
164

6,423
6,325
6,509
6,619

124,032
123,363
117,522
120,062

180,200
166,406
169,081
173,990

202,914
73,664 313,497
186,194 89,277 70,975 316,780
192,963 94,303 74,850 329,084
215,460 124,391 77,455 336,746

109,414
109,355
104,916
105,247

71,404
70,092
68,811
71,364

126,469
121,267
120,232
128,568

61,773
65,676
62,394
79,995

116,416
113,754
117,735
118,054

2,450,204
2,401,287
2,452,462
2,565,949

210,768
210,099
206,956
205,885

233,069
230,950
229,761
229,590

108,838
108,431
107,708
107,025

88,159
88,106
87,972
87,662

101,609
101,269
100,856
100,435

51,167
51,200
50,551
50,279

191,340
192,888
190,770
190,262

2,472,307
2,488,537
2,503,095
2,510,687

321
163
313
297

220
58
51

128,595
128,544
127,679
127,441

110,785
111,823
110,087
112,269

410,806
415,139
417,611
418,932

396

FEDEEAL RESERVE BULLETIN.

APRIL 1,1919.

Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system at close of business on Fridays,
Feb. 28, 1919, to Mar. 21, 1919—Continued.
LIABILITIES—Continued.
[In thousands of dollars; i. e., 000 omitted.]
Boston.

New
York.

ChiPhila- Cleve- Richdelphia. land. mond. Atlanta. cago.

Federal Reserve bank notes in
circulation—net liability:
34,628 11,311 10,422 5,204 7,165 17,547
Feb. 28..
10,573
7,327 18,043
34,248 11,816 10,708 5,189
Mar. 7
11,552
7,440 18,315
34,371 12,653 11,178 5,151
Mar. 14
12,251
7,556 18,711
34,236 13,355 11,799 5,218
Mar.21
13,034
All other liabilities:
19,464 2,726 3,065 1,890 1,414
4,730
Feb. 28
3,744
7,375 1,570
921
738 1,793
1,362
Mar. 7
2,287
980
791
7,783 1,627 ! 1,414
1,901
Mar. 14
2,314
856 2,101
8,285 1,755
1,556
Mar.21
2,351
1,072
Total liabilities:
196,980 761,186
347,001 1,700,604 413,886 460,461
Feb. 28
342,406 1,706,467 400,076 441,986 230,241 195,550 769,449
Mar. 7
347,105 1,752,666 400,502 448,086 234,423 197,858 784,677
Mar.14
355,072 1,770,235 405,169 471,175 264,432 202,826 794,278
Mar.21

St.
Minne- Kansas
Louis. apolis. City. Dallas. Francisco.

Total.

6,925
7,181
7,413
7,536

5,036
5,098
5,183
5,243

12,685
12,743
12,787
12,918

6,212
6,279
6,316
6,396

6,334
6,407
6,421
6,440

134,042
136,591
139,479
142,442

1,477
718
743

1,177
537
579

2,314
1,145
1,213
1,286

1,455
907
924
955

2,537
1,410
1,470
1,589

45,993
20,763
21,739

231,278
231,112
226,188
226,074

169,450 248,023 124,399 322,530 5,206,736
168,198 242,582 128,448 321,619 5,178,134
166,919 241,247 124,567 323,565 5,247,803
142,007 323,513 5,373,425
169,278

Maturities of bills discounted and bought, United States Government short-term securities, and municipal

warrants.

[In thousands of dollars, i. e., 000 omitted.]
Within 15
days.
Bills discounted:
Feb. 28..
Mar. 7
Mar. 14...
Mar.21
Bills bought:
Feb. 28
Mar. 7
Mar. 14
Mar. 21
United States short-term securities:
Feb. 28
Mar. 7
Mar.14
Mar.21
Municipal warrants:
Feb. 28
Mar.7
Mar. 14..
Mar. 21




16 to 30
days.

31 to 60
days.

61 to 90
days.

Over 90
days.

Total.

1,511,355
1,530,432
1,525,076
1,529,079

57,883
54,691
55,292
58,574

202,040
207,151
225,629
221,949

86,221
74,323
59,319 j
50,922

22,321
21.130
21.047
21.015

82,025
83,799
99,651
87,157

76,479
81,948
68,850
72,289

93,348
90,833
76,312
81,343

25,067 I
16,913 !
17,326
21,135

'..

18,714
19,745
23,503
24,242

1
1

202
202
221
1
4
3
3

350
2,816
2,815
6,466

136,624
137,072
141,828
141,542

3

!

:

1.879.820
1,887,727
1,886,363
1,881,539
276,919
273,493
262,139
261,924
155,688
159,835
168,348
172,471
4
4
4
4

APRIL 1,1919.

397

FEDERAL RESERVE BULLETIN.

FEDERAL RESERVE NOTES.
Federal Reserve note account of each Federal Reserve Bank at close of business on Fridays, Feb. 28 to Mar. 21, 1919.
[In thousands of dollars; i. e., 000 omitted.]
San
St.
Minne- Kansas
FranLouis. apolis. City. Dallas. cisco.

Boston.

Federal Reserve notes received
from agent—net:
Feb. 28
Mar. 7
Mar. 14
Mar.21
Federal Reserve notes held by
bank:
Feb. 28
Mar. 7
Mar. 14
Mar.21
Federal Reserve notes in actual
circulation:
Feb. 28
Mar. 7
Mar. 14
Mar.21
Gold deposited with or to credit
of Federal Reserve agent:
Feb. 28
Mar.7
Mar. 14
Mar.21
Paper delivered to Federal Reserve agent:
Feb. 28.
Mar. 7
Mar. 14
Mar.21




New
York.

Phila- Cleve- RichAtdelphia land. mond. lanta.

Chicago.

163,221
165,915
167,948
168,871

772,365
765,451
779,951
798,778

222,894
221,001
219,361
218,287

248,940
246,618
244,274
244,182

132,862
131,458
130,770
130,618

115,341
115,197
113,757
115,507

436,724
436,228
437,013
435,568

121,366
121,515
120,314
119,707

3,669
5,039
4,806
3,533

94,746
76,239
69,949
83,209

12,126
10,902
12,405
12,402

15,871
15,668
14,513
14,592

4,2<>7
2,914
3,091
3,177

4,556
3,374
3,670
3,238

25,918
21,089
i 19,402
16,636

12,528
13,084
12,606
12,682

159,552
160,876
163,142
165,338

677,619
689,212
710,002
715,569

210,768
210,099
206,956
205,885

233,069
230,950
229,761
229,590

i128,595
128,544
127,679
127,441

110,785
111,823
110,087
112,269

410,806
415,139
417,611
418,932

108,838
108,431
107,708
107,025

48,954
48,648
56,681
55,604

257,256
256,181
269,783
269,230

68,566
65,073
61,533
59,059

135,947
136,625
130,781
132,060

47,374
45,079
43,327
42,104

40,590
40,646
39,846
40,136

296,589 68,316
296,094 64,436
296,878 62,425
265,433 42,163

155,443
160,400
159,578
152,521

830,363
844,819
807,496
735,818

156,559
159,098
160,433
164,274

167,619
158,365
165,453
164,804

102,968
94,974
89,491
102,533

80,834
78,630
78,852
77,007

211,245
203,349
217,303
255,860

Total.

52,704
52,527
51,605
51,541

213,663
217,336
216,814
217,373

2,678,606
2,670,903
2,679,021
2,696,544

7,348
6,847
7,060
6,184

1,537
1,327
1,054
1,262

22,323
24,448
26,044
27,111

206,299
182,366
175,926
185,857

88,159 101,609
88,106 ^01,269
87,972 00,856
87,662 LOO,435

51,167
51,200
50,551
50,279

108,957
1,541 108,116
1.298 107,916
106,619
1,410
1,435
1,326
1,831

54,563
54,035
53,192
52,877

48,101
46,759
45,359
39,622

64,259 46,924 83,013
75,907 50,615 87,599
70.092 58,714 93,377
93,100 60,047 103,028

191,340 2,472,307
192,888 2,488,537
190,770 2,503,095
190,262 2,510,687

19,765 101,739
19,052 91,212
18,406 92,390
18,041

1,187,760
1,163,840
1,170,601
1,112,938

58,346
53,796
52,277
52,347

2,099,999
2,101,419
2,080,990
2,084,708

142,426
133,867
127,924
123,369

398

APRIL 1,1919.

FEDERAL RESERVE BULLETIN.

Federal Reserve note account of each Federal Reserve agent at close of business on Fridays, February 28 to March 21, 1919.
(In thousands of dollars; i. e., 000 omitted.)

Boston.

Received from Comptroller:
Feb. 28
Mar.7
Mar.14
Mar. 21
Returned to Comptroller:
Feb. 28....
Mar.7
Mar.14
Mar.21
Chargeable to Federal Reserve
Feb. 28
Mar.7
Mar.14
Mar.21
In hands of Federal Reserve
agent:
Feb. 28
Mar.7
Mar.14
Mar.21
Issued to Federal Reserve
Bank, less amount returned
to Federal Reserve agent for
redemption:
Feb. 28
Mar.7
Mar.14
Mar.21
Collateral held as security for
outstanding notes:
Gold coin and certificates
on hand—
Feb. 28
Mar.7
Mar.14
Mar.21
Gold redemption fund—
Feb. 28
Mar.7
Mar.14
Mar.21
Gold settlement fund, Federal Reserve Board—
Feb. 28
Mar.7
Mar.14
Mar.21
Eligible paper, minimum
required i—
Feb. 28
Mar. 7
Mar.14
Mar.21




New
York.

262,000
262,880
269,040
271,360

1,344,680
1,355,680
1,380,480
1,393,080

Phila- Cleve- Richdelphia. land. mond.

335,420
335,420
341,420
341,420

414,915 90,426
437,829 93,919
456,929 97,459
462,702

73,458
75,765
77,732
79,809
188,542
187,115
191,308
191,551

929,765
917,851
923,551
930,378

25,320
21,200
23,360
22,680

157,400
152,400
143,600
131,600

163,221
165,915
167,948
168,871

772,365
765,451
779,951
798,778

MinneSt.
Louis. apolis.

City.

171,420
171,720
171,800
174,920

124,480
124,880
124,880
124,880

158,700
158,700
159,700
159,700

78,156
82,331
84,547
87,952

38,689
39,570
41,581
42,843

23,311
23,839
24,682
24,997

35,223
36,564
37,964
38,701

Atlanta.

Chicago.

204,560
204,960
204,960
206,960

563,160
563,560
563,560
564,280

52,130 48,393 33,493
54,452 50,687 35,438
57,296 52,440 36,238
59,018 53,662 36,948

333,840
333,840
334,060
335,060

204,820
205,220
212,520
213,020

San
Dallas. Francisco.

101,960
101,960
101,960
101,960

Total.

251,720 4,056,760
252,920 4,071,740
253,220 4,117,600
254,420 4,141,060

24,996 27,057
25,708 29,584
26,355 30,406
26,719 31,047

940,247
985,686
1,023,629
1,044,331

281,710
279,388
276,764
276,042

156,427
154,533
160,080
159,358

171,067
169,522
168,722
170,012

485,004
481,229
479,013
476,328

132,731
132,150
130,219
132,077

101,169
101,041
100,198
99,883

123,477
122,136
121,736
120,999

76,964
76,252
75,605
75,241

224,663
223,336
222,814
223,373

3,116,513
3,086,054
3,093,971
3,096,729

22,100 32,770
20,500 32,770
24/600 32,490
23,200 31,860

23,565
23,075
29,310
28,740

55,726
54,325
54,965
54,505

48,280
45,000
42,000
40,760

11,365
10,635
9,905
12,370

11,600
11,500
10,900
10,390

14,520
14,020
13,820
14,380

24,260
23,725
24,000
23,700

11,000
6,000
6,000
6,000

437,907
415,150
414,950
400,185

132,862
131,458
130,770
130,618

115,341
115,197
113,757
115,507

436,724
436,228
437,013
435,568

121,366
121,515
120,314
119,707

108,957 52,704
;9,541 108,116 52,527
59,298 107,916 51,605
19,493 106,619 51,541

213,663
217,336
216,814
217,373

2,678,606
2,670,903
2,679,021
2,696,544

12,582
12,581
12,581
12,581

244,994
241,501
243,961
241,487

222,894
221,001
219,361
218,287

173,740
173,740
188,740
188,740

248,940
246,618
244,274
244,182

2,503
2,503
2,503
2,503

27,270
30,270
23,270
23,270

13,052
13,052
13,052
13,052

2,860

229,147
232,146
240,146
243,006

9,954
9,648
9,681
8,604

13,516 15,677
12,441 12,184
11,043 13,644
10,490 11,170

13,677
11,355
12,511
13,790

1,374
3,079
1,327
2,104

1,817
873
2,073
2,633

4,925
5,749
5,533
5,129

2,886
3,505
3,494
2,232

3,011
2.483
1,640
3,325

3,741
2,399
2,999
4,262

2,999
2,787
2,641
2,776

13,861
12,954
12,132
11,490

87,438
79,457
78,718
78,005

39,000
39,000
47,000
47,000

70,000 52,889
70,000 52,889
70,000 47,889
70,000

95,000
95,000
95,000
95,000

46,000
42,000
42,000
40,000

36,270
37,270
35,270
35,000

291,664
290,345
291,345
260,304

65,430
60,931
58,931
39,931

38,500
38,500
38,500
36,500

44,360
44,360
42,360
35,360

4,184
3,684
3,184
2,684

87,878
78.258
80,258
82,259

871,175
852,237
851,737
791,927

154,328
155,928
157,828
159,228

112,993
109,993
113,493
112,122

85,488
86,379
87,443
88,514

74,751
74,551
73,911
75,371

140,135 53,050
140,134 57,079
140,135
170,135 77,544

35,006 60,856
35,506 61,357
36,106 62,557
36,616 66,997

32,939
33,475
33,199
33,500

11,924
126,124
124,424
120,764

1,490,846
1,507,063
1,508,420
1,583,606

114,267
117,267
111,267
113,267

515,109
509,270
510,168
529,548
1

For actual amount, see "Paper delivered to Federal Reserve agent," on p. 397.

APRIL 1,1919.

FEDERAL RESERVE BULLETIN.

399

CONDITION OF MEMBER BANKS.

Two additional issues of Treasury certificates
in anticipation of the Victory Liberty loan,
aggregating over $1,000,000,000, also further
issues of tax certificates are the principal
Government fiscal operations affecting the
weekly statements of condition of 772 member
banks in leading cities for the 4-week period
February 14 to March 14, 1919. The immediate effects of the certificate issues are
seen in the considerable increases in the
certificate holdings on the two Fridays following February 27 and March 13, the dates of
issue of these certificates, and in an increase on
March 14 by 498.2 millions of the total on
hand over the 1,743 millions held on February
14. Of the total increase the share of member
banks in New York City was 171.7 millions
and that of the member banks in all Federal
Reserve cities 336 millions.
As against these considerable increases the
banks report net liquidation of 47.6 millions
in United States bonds, other than circulation
bonds (i. e., chiefly Liberty bonds), and of
51.9 millions in loans secured by United States
war obligations (so-called war paper). It is
interesting to note that whereas the bulk of
the bonds disposed of is shown for the banks
outside of New York City, curtailment of war
paper on hand is credited almost exclusively
to the New York City banks. All other loans
and investments likewise show substantial
increases on the Fridays immediately following
the dates of the two latest certificate issues and
probably reflect somewhat amounts of borrowings from reporting correspondents by nonreporting member and nonmember banks. Aggregate holdings of United States war securities
and war paper on March 14 were 4,035.3
millions as against 3,636.7 millions four weeks
earlier, and constituted 27.7 per cent of the
total loans and investments of all reporting
banks, as against 26 per cent shown on
February 14.
As bearing upon the question of the total
amount of United States war securities and




war paper held by the member banks of the
country it may be stated that on December 31,
1918, all member banks held a total of war
securities and war paper of about 4,300 millions;
that between January 1 and March 15 of the
present year the net increase in outstanding certificates, mostly held by the banks of the country, amounts to about 2,900 millions; and
that since December 27 of the past year, reporting members alone show an increase in this
total of about 978 millions. For the New
York City banks the four weeks under review brought an increase in war securities
and war paper from 1,593.9 to 1,708.4 millions
and an increase in the percentage to total loans
and investments from 30.6 to 32 per cent.
During the same period fluctuations in
Government deposits ranged between 680.1
millions on February 28 and 546.2 millions the
following week, the two largest increases again
following the dates of the two certificate issues.
Other demand deposits reached a high level of
10,311.4 millions on March 14, a gain for the
four weeks under review of 399.7 millions, of
which 316 millions represents the gain for
member banks in the 12 Federal Reserve
cities and 193.4 millions—the gain for the New
York City banks alone. It is most likely that
these considerable increases in demand deposits represent accumulations of funds by
individual depositors and nonreporting banks
for income tax payments due on March 15.
Time deposits show a steady increase during
the period from 1,624.5 to 1,663.5 millions,
the largest increases being shown by the
banks outside the Federal Reserve bank and
branch cities. In harmony with the large
gains in deposits, reserve balances (with Federal Reserve Banks) show an increase from
1,255.4 to 1,298.3 millions, the bulk of this
increase being shown for the New York City
banks. Cash in vault indicates a further
decline from 361.1 to 348.8 millions, all classes
of banks sharing in this decline.

400

FEDEEAL EESERVE BULLETIN.

APRIL 1,

1919.

Principal resources and liabilities of member banks in leading cities, including member banks located in Federal Reserve Bank
cities and in Federal Reserve branch cities as at close of business on Fridays, from Feb. 21 to Mar. 14, 1919.
1. ALL REPORTING MEMBER BANKS.
[In thousands of dollars; i. e. 000 omitted.]

Boston.

Number of reporting
banks:
Feb. 21
Feb. 28
Mar. 7 . . .
Mar. 14
United States bonds to
secure circulation:
Feb.21
Feb. 28
Mar.7
Mar. 14
Other U n i t e d S t a t e s
bonds, including Liberty bonds:
Feb. 21
Feb. 28
Mar. 7
Mar.14
United States certificates
of indebtedness:
Feb. 21
Feb. 28
Mar.7
Mar.14
Total United States securities owned:
Feb. 21
Feb. 28
Alar. 7
Mar.14
Loans secured by United
States bonds and certificates:
Feb. 21
Feb. 28
Mar.7
Mar.14
Other loans and investments:
Feb. 21
Feb. 28
Mar.7
Mar.14
Total loans and investments:
Feb. 21
Feb. 28
Mar.7
Mar.14
Reserve with Federal Reserve Bank:
Feb. 21
Feb. 28
Mar.7
Mar. 14
Cash in vault:
Feb. 21
Feb. 28
Mar.7
Mar. 14
Net demand deposits on
which reserve is computed:
Feb. 21
Feb. 28
Mar.7
Mar. 14
Time deposits:
Feb. 21
Feb. 28
Mar.7
Mar.14
Government deposits:
Feb. 21
Feb. 28
Mar.7
Feb. 14




New
York.

Philadelphia.

Cleveland.

Richmond.

San
Minn- Kansas
St.
FranLouis. eapolis. City. Dallas. cisco.

Atlanta.

106
106
106
106

101
101
101
101

772
771
771
772

76

14,402
14,402
14,402
14,402

46,001
46,606
46,889
48,140

11,497
11,597
11,597
11,597

40,982
40,982
41,182
40,982

24,989
25,090
24,949
25,190

15,265
15,265
15,265
15,265

19,861
19,911
19,911
19,911

16,908
16,708
16,908
16,908

6,466 13,805
6,469 13,959
6,769 13,969
6,820 13,984

19,012
18,895
19,990
19,736

288,879
294,686
283,850
289,943

40,456
39,505
39,335
38,010

75,530
74,856
70,837
72,644

52,570
52,293
52,629
50,233

34,552
33,381
32,711
31,711

67,474
64,574
62,034
60,322

26,450
25,208
23,176
22,319

11,778
11,723
11,377
11,134

105,265 789,453
132,655 916,493
134,784 904,528
160,389 .,011,000

109,853
126,633
124,079
140,744

151,358
167; 839
165,516
185,493

55,140
61,412
62,336
69,189

55,427
63,708
63,917
69,904

*219,344
249,149
252,498
283,357

55,495
65,511
65,581
72,176

138,679
165,952
169,176
194,527

,124,333
,257,785
,235,267
,349,083

161,806
177.735
175; on
190,351

267,870
283,677
277,535
299,119

132,699
138,795
139,914
144,612

105,244
112.354
111,893
116,880

306,679
333,634
334,443
363,590

87,051
87,630
88,550
89,239

610,442
625,345
584,489
563,976

144,521
145,429
142,891
142,916

95,898
94,860
97,337
95,922

39,320
38,476
38,106
38,920

18,689
19,212
21,013
20,644

86,244
88,209
88,891
89,921

743,789
752,769
753,012
776,541

3,890,435
3,951,808
3,661,566
3,998,556

621,408
599,381
603,281
614,739

970,559
970,540
961,438
985,465

367,006
363,958
367,984
367,609

303,629
302,743
301,545
303,365

I 969,519
11,006,351
11,010,738
11,060,307

5,625,210
5,834,938
5,781,322
5,911,615

927,735
922,545
921,183
948,006

1,334,327
1,349,077
1,336.310
1,380 506

539,025
541,229
546,004
551,141

427,562
434,309
434,451
440,889

60,292
66,985
69,555
64,892

612,784
629,970
636,803
665,035

65,510
67,036
64,361
67,219

91,489
91,169
89,399
94,744

34,239
33,307
35,237
37,097

28,977
29,308
27,675
28,685

20,573
22,799
23,254
23,257

116,935
114,328
116,188
117,605

20,124
19,705
20,700
19,400

31,800
30,820
32,200
33,123

15,570
15,907
17,451
16,708

13,571
14,807
14,633
14,555

682,449
685,824
689,841
719,038

4,581,052
4,622,354
4,622,450
4,743,088

651,966
638,823
653,853
666,588

805,158
794,644
822,061
835,498

319,399
316,302
310,701
325,795

241,231
244,520
244,605
246,760

1,187,469
1,199,664
1,214,504
1,243,732

103,946
104,901
103,664
104,763

258,574
257,057
259,034
271,547

20,808
21,354
21,581
21,822

284,412
296,360
291,697
292,048

70,502
70,898
71,269
72,638

102,283
102,416
103,452
103,371

412,433
414,249
417,893
419,470

45,773
67,244
57,261
70,639

267,558
325,845
253,057
315,258

34,649
45,747
35,914
48,681

56,415
59,308
43,227
44,799

13,229
17,656
14,274
18,404

12,964
18,139
15,193
18,251

68,044
74,392
63,867
74,140

Total.

17,979
17,929
17,929
17,931

34,605
34,605
34,605
34,605

262,760
263,523
264,375
265,735

25,554
24,637
24,104
24,186

20,486
20,243
20,344
20,574

35,935
35,677
35,245
35,283

698,676
695,678
675,632
676,095

35,050
40,996
40,947
44,902

39,419
47,196
50,486
56,217

20,597
28,420
28,885
33,693

92,777
98,646
100,699
114,118

1,729,178
1,998,658
1,994,256
2,241,182

98,853
107,427
105,665
111,403

53,294
59,188
59,093
62,856

78,778
85,792
88,559
94,387

59,062
66,592
67,158
72,198

163,317
168,928
170,549
184,006

2,690,614
2,957,859
2,934,263
3,183,012

24,235
23,914
22,556
26,396

10,247
10,404
10,493
11,448

11,232 10,300 20,321 1,158,500
11,164 8,666 20,815 1,174,124
10,362 7,950 20,555 1,133,193
10,724 7,570 20,391 1,118,007

1,363,094
1,381,063
1,388,198
1,415,896

374,060 221,878
374,400 ;226,598
380,686 225,016
384,222 228,508

510,819 9,975,131
439,561
440,487 171,208 504,048 10,039,003
444,737 172,464 509,245 10,069,172
444,002 172,130 510,526 10,201,559

1,756,017
1,802,906
1,811,532
1,869,407

497,148 :285,419
505,741 ;296,190
508,907 1294,602
522,021 302,812

529,571
537,443
543,658
549,113

238,255
246,466
247,572
251,898

694,457
693,791
700,349
714,923

13,824,245
14,170,986
14,136,628
14,502,638

156,721 41,605 21,513 44,097
163,080
21,929 45,239
165,191 41,526 23,359 42,433
165,324 43,048 23,023 43,651

18,049
17,497
18,149
17,382

50,186
48,658
48,561
48,190

1,225,462
1,253,165
1,262,249
1,298,290

8,109
8,534
8,752
8,679

18,504
18,983
19,932
20,166

336,514
337,698
346,035
348,814

153,687 420,517
153,293 415,410
155,742*412;
412,057
158,881 435,093

9,945,267
9,988,464
10,035,620
10,311,435

59,094 9,909
59,021 10,212
59,381 10,949
62,112 10,142

7,961
8,055
8,044

14,364
14,449
14,540
15,023

306,068
302,473
1307,122
|318,638

209,484
216,813
219,154
223,606

386,787
398,344
383,530
394,628

93,170
93,531
91,060
94,310

52,277
52,577
52,727
53,420

66,719
65,113
65,827
66,373

27,901
28,457
'^,607
27,930

22,899 9,601 14,492 7,010
28,716 13,219 20,030 9,809
23,003 10,419 20,091 9,884
29,550 13,079 22,878 14,560

135,760
134,319
134,820
135,825

], f-28,785
1,641,232
1,641,631
1,663,517
552,634
680,105
546,190
670,239

401

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

Principal resources and liabilities of member banks in leading cities, including member banks located in Federal Reserve Bank
cities and in Federal Reserve branch cities as at close of business on Fridays, from Feb. 21 to Mar. 14, 1919—Contd.
2. MEMBER BANKS IN FEDERAL RESERVE BANK CITIES.
|In thousands of dollars; i. e., 000 omitted.]

Boston.

Number of reporting
banks:
Feb. 21
Feb. 28
Mar. 7
Mar.14
United States bonds to
secure circulation:
Feb. 21
Feb. 28
Mar.7
Mar.14
Other United States
bonds, including Liberty bonds:
Feb. 21
Feb. 28
Mar.7
Mar.14
United States certificates
of indebtedness:
Feb. 21
Feb. 28
Mar.7
Mar.14
Total United States securities owned:
Feb. 21
Feb.28
Mar.7
Mar.14
Loans secured by United
States bonds and certificates:
Feb. 21
Feb. 28
Mar.7
Mar.14
f..
All other loans and investments:
Feb. 21
Feb. 28
Mar.7
Mar. 14
Total loans and investments:
Feb. 21
Feb. 28
Mar.7
Mar.14
Reserve with Federal
Reserve Bank:
Feb. 21
Feb. 28
Mar.7
Mar.14
Cash in vault:
Feb. 21
Feb. 28
Mar.7
Mar.14
Net demand deposits on
which reserve is corncomputed:
Feb. 21
Feb. 28
Mar.7
Mar.14
Time deposits:
Feb. 21
Feb. 28
Mar.7
Mar.14
Government deposits:
Feb. 21
Feb. 28
Mar.7
Mar.14




New
York.

Philadelphia.

Cleveland.

Richmond.

Atlanta.

San
St.
Chicago. Louis. Minne- Kansas Dallas. Franapolis. City.
cisco.

Total.

255
255
255
255
4,278
4,278
4,278
4,278

35,983
36,388
36,671
37,922

7,487
7,587
7,587
7,587

4,098
4,098
4,298
4,098

2,832
2,873
2,832
2,873

3,800
3,800
3,800
3,800

1,119 10,553
1,169 ! 10,553
1,169 i 10,553
1,169 10,553

2,387
2,390
2,690
2,741

4,591
4,745
4,755
4.745

4,060
4,060
4,060
4,060

18,500
18,500
18,500
18,500

99,688
100,441
101,193
102,326

9,097
9,045
10,126
10,046

246,814
253,679
243,350
250,593

31,151
30,429
30,260
29,099

13,880
13,458
12,907
12,139

7,723
7,611
7,916
7,928

3,861
3,626
3,553
3,355

25,385 ! 15,590
24,613 15,085
23,610 13,638
21,866 . 13,106

1,663
1,658
1,793
1,514

6,813
6,541
6,416
6,395

4,520
4,433
4,568
4,827

14,039
13,974
13,952
13,893

380,536
384,152
372,089
374,761

733,691 97,089
850,764 111,939
839,906 109,486
936,852 124,631

32,350
37,240
37,873
44,411

|
9,212 i 8,841
9,487 9,523
9,602 9,400
10,678
9,894

127,511
142,462
147,745
161,885

37,817
44,953
44,618
49,830

15,247
17,986
17,722
18,796

10,128
12,696
13,874
17,257

10,677
13,730
13,230
16,689

33,223
32,662
32,815
40,803

1,188,091
1,376,734
1,372,413
1,547,046

21,532
23,982
25,045
28,397

19,257
22,223
21,858
25,576

65,762
65,136
65,267
73,196

1,668,315
1,861,327
1,845,695
2,024,133

72,305
93,292
96,142
115,320
85,680
106,615
110,546
129,644

1,016,488
1,140,831
1,119,927
1,225,367

135,727
149,955
147,333
161,317

54,796
55,078
60,648

19,767
19,971
20,350
21,479

16,502
16,949
16,753
17,049

154,015
168,244
172,524
184,920

63,960
70,591
73,489

19,297
22,034
22,205
23,051

68,255
68,849
69,906
70,332

568,069
583,928
544,083
___,.__
520,924

139,320
140,245
137,682
1137,672
|

30,348
29,213
30,853
29,457

15,728
15,422
15,356
15,368

4,327
3,827
5,493
4,923

62,550
64,327
64,977
65,379

18,007
17,879
17,708
21,092

5,639
5,887
6,166
6,904

2,388
2,410
2,511
2,776

2,390
3,108
2,585
2,197

10,090
10,306
9,775
10,060

927,111
945,401
907,095
887,084

518,874
527,779
526,342
547,556

3,495,485
3,550,900
3,562,016
3,594,230

!o43,412
;525,570
1529,583
540,184

275,038
270,450
269,650
274,372

834,034
840,845
861,297
884,459

256,272
256,943
260,041
261,373

95,027
97,669
95,177
97,143

154,123
154,792
158,538
158,461

39,768
41,159
40,220
41,386

199,857
197,661
1194,443
195,487

6,542,139
6,592,600
6,628,077
6,725,621

672,809
703,234
706,794
747,532

5,080,042
5,275,659
5,226,026
5,340,521

j
818,459
;

355,714
354,459
355,581
364,477

106,080 I 80,493 1,050,599 338,239
105,023 j 79,987 1,073,416 345,413
108,367 i 80,355 1,098,798 346,558
108,334 81,455 1,134,758 355,954

119,963
125,590
123.548
127,'098

178,043
181,184
186,094
189,634

61,415 275,709
66,490 273,103
64,663 269,485
69,159 J278,743

9,137,565
9,399,328
9,380,867
9,636,838

46,597
53,628
55,561
49,868

578,641
597,046
603,685
629,713

59,077
60,364
58,219
61,026

4,539 ! 17,737
4,212 ! 17,970
4,438 19,202
3,979 16,936

906,944
934,608
942,004
963,972

12,632
13,913
14,450
14,212

103,594 16,156
101,078 15,993
102,612 j16,521
104,006 ! 15,866
|

815,770
814,598
839,173

521,892
522,041
522,003
557,709

4,185,174
4,224,491
4,222,288
4,338,864

1570,261
557,122
.570,700
581,891

28,393
28,381
28,144
29,630

200,472
198,370
199,695
204,241

13,012
13,430
13,477
13,568

35,472
52,800
45,987
51,587

247,631 ! 31,562
299,911 41,726
232,688 32,805
286,544 44,596

70,585 59,664
69,630 I 59,211
72,661 j 58,109
71,487 | 59,483

22,426 6,464 6,713
21,973
5,885 5.342
20,240 j 6,187 5,569
22,857 5,974 4,641

110,309
113,123
115,322
114,137

29,448
28,501
29,243
28,640

9,837
9,920
10,913
10,815

15,156
16,644
13,425
15,386

2,362
2,820
2328

36,812
35,107
35,939
36,739

5,962
6,187
6,064
5,761

2,199
2,401
2,371
2,572

3,949
4,032
4,002
4,131

1,469
1,514
1,595
1,475

4,810
4,980
5,617
5,326

198,011
196,252
200,629
202,038

176,116 j 57,658 42,564
174,584 56,274 43,133
184,481 56,190 43,751
189,044 58,084 45,558

805,959
817,851
830,644
843,932

202,095
199,400
204,697
213,776

90,256
94,191
94,942
97, 777

136,405
141,422
139,019
137,572

41,085
40,843
42,267
44,357

172,999
168,499
163,693
171,269

7,002,464
7,039,851
7,074,675
7,279,833

124,496 9,018
125,389 9,653
126,770 :! 9,870
126,833 10,100

19,480
19,047
19,622
19,610

157,972
158,659
160,154
160,297

63,206
63,589
64,157
63,846

17,959
17,682
18,087
18,176

7,826
7,131
7,344
7,167

2,806
2,992
2,982
2,926

10,686
9,927
10,108
10,138

655,326
654,250
660,410
666,532

2,467
2,429
1,651
2,304

2,422
2,588
2,090
2,166

44,688
42,793
38,856
47,446

16,334
21,401
16,826
20,661

6,793 ;! 1,273
6,885 1,342
7,595 !; 1,535
7 845 1,636

15,193 !
18,048
14,371
16,688

4,450 7,030
5,676 9,518
4,329 ! 9,446
4,774 11,504

4,022 j
5,837 I
5,579 S
10,271

411,271
502,727
404,628
498,541

402

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

Principal resources and liabilities of member banks in leading cities, including member banks located in Federal Reserve Bank
cities and in Federal Reserve branch cities as at close of business on Fridays, from Feb. 21 to Mar. 14, 1919—Contd.
3. MEMBER BANKS IN FEDERAL RESERVE BRANCH CITIES.
[In thousands of dollars; i e., 000 omitted.]
Cleveland
District.!
Number of reporting banks:
Feb. 21...
Feb. 28
Mar.7
Mar. 14
United States bonds to secure
circulation:
Feb. 21
Feb. 28
Mar.7
Mar.14
Other United States bonds, including Liberty bonds:
Feb. 21
Feb. 28
Mar.7
Mar.14
United States certificates of indebtedness:
Feb. 21
Feb. 28
:
Mar.7
Mar.14
Total United States securities
owned:
Feb. 21
Feb. 28
Mar.7
Mar.14
Loans secured by United States
bonds and certificates:
Feb. 21
Feb. 28
Mar.7
Mar.14
Other loans and investments:
Feb. 21
Feb. 28
Mar.7
Mar.14
Total loans and investments:
Feb. 21
Feb. 28
Mar.7
Mar.14
Reserve with Federal Reserve
Bank:
Feb.21
Feb. 28
,
Mar.7
Mar.14
Cash in vault:
Feb. 21
Feb. 28
Mar.7
Mar.14
Net demand deposits on which
reserve is computed:
Feb. 21
Feb. 28
Mar.7
Mar.14
Time deposits:
Feb. 21
Feb. 28
Mar.7
Mar. 14
Government deposits:
Feb. 21
Feb. 28
Mar.7
Mar.14




Richmond
District .2

Atlanta
District .3

Chicago
District.-*

St. Louis
District .s

Kansas
City 6
;rict.
Disti

Dallas
District J

San Francisco
District .8

39

Total.

28

159
159
159
160

39
23,616
23,616
23,616
23,616

4,931
4,991
4,991
5,091

5,085
5,085
5,085
5,085

1,805
1,805
1,805
1,805

5,005
4,805
5,005
5,005

4,487
4,487
4,487
4,487

1,255
1,255
1,255
1,255

8,485
8,485
8,485
8,485

54,669
54,529
54,729
54,829

48,456
48,355
44,914
47,997

8,302
8,230
8,094
8,146

15,079
14,449
14,084
13,598

19,177
18,669
18,065
17,604

9,838
9,153
8,566
8,301

8,301
7,599
8,272
8,137

2,077
2,063
2,105
2,088

14,518
14,458
14,257
14,004

125,748
122,976
118,357
119,875

93,413
101,806
98,477
109,232

21,965
24,885
24,789
28,392

31,633
37,063
37,100
40,678

48,759
59,133
57,687
68,209

15,861
18,380
18,804
20,002

15,670
18,214
19,198
20,298

1,545
2,565
2,780
3,201

45,300
50,458
51,347
55,197

274,146
312,504
310,182
345,209

165,485
173,777
167,007
180,845

35,198
38,106
37,874
41,629

51,797
56,597
56,269
59,361

69,741
79,607
77,557
87,618

30,704
32,338
32,375
33,308

28,458
30,300
31,957
32,922

4,877
5,883
6,140
6,544

68,303
73,401
74,089
77,086

454,563
490,009
483,268
519,913

55,871
55,904
56,212
56,300

11,564
11,753
11,791
11,813

9,600
10,443
10,401
10,677

9,909
9,797
9,799
9,840

4,943
4,685
3,548
3,972

391
387
384

5,394
5,481
6,406
6,019

103,730
103,968
103,596
103,938

509,851
513,050
506,885
522,735

108,050
107,547
108,065
110,938

159,159
160,402
161,447
161,359

248,795
245,237
246,019
247,439

101,818
101,641
104,774
106,868

149,188
149,149
148,674
147,848

13,957 !
13,838 i
13,980
13,786

204,049
200,436
207,431
208,227

1,494,867
1,491,300
1,497.275
1,519,200

731,207
742,731
730,104
759,880

154,812
157,406
157,730
164,380

220,556
227,442
228,117
231,397

328,445
334,641
333,375
344,897

137,465
138,664
140,697
144,148

183,726
184,963
185,683 i
185,703

19,203
20,112
20,507
20,714

277,746
279,318
287,926
291,932

2,053,160
2,085,277
2,084,139
2,143,051

52,224
53,593
53,198
54,794

12,266
12,017
13,024
13,198

15,130
16,442
14,670
16,825

20,700
22,563
21,836
22,930

11,139
9,678
11,073
13,307

14,657 I
13,918
14,359
14,515

1,213
1,199
1,290

1,883

21,053
19,737
19,181
19,431

16,128
14,417
14,920
15,712

5,139
5,488
5,214
5,413

7,024
7,413
7,641
7,268

9,993
11,441
10,544
11,690

3,279
3,405
4,181

5,441
5,217
5,189
5,421

512
628
687
565

6,814
6,806
7; 240
7,638

54,330
54,815
55,616
57,356

472,201
464,009
478,612
487,346

109,346
106,561
95,619
109,989

139,714
141,591
140,297
140,379

153,896
152,429
151,322
161,606

93,526
93,038
91,936
94,379

124,949
124.612
118; 452
129,132

11,342
11,009
10,960
11,142

157,233
156,878
157,601
170,953

1,262,207
1,250,127
1,244,799
1,304,926

89,904
99,258
93,581
93,543

13,100
13,545
13,633
14,554

49,862
50,248
50,328
50,395

161,944
162,890
164,079
165,290

23,008
22,928
19,852
23,408

36,022
36,129
36,339
36,412

5,429
5,513
5,533
5,484

94,332
93,977
94,146
93,715

473,601
484,488
477,491
482,801

34,834
33,824
22,397
20,393

5,215
7,218
5,886
8,526

7,489
11,122
9,313
11,788

12,248
18,731
13,907
14,773

6,026
6,620
5,649
8,294

3,751
5,239
5,169
5,857

1,141
1,085
1,226
996

1
Pittsburgh and Cincinnati.
* Baltimore.
s
New Orleans, Jacksonville, and Birmingham.
<Detroit.

5
6

6,080
5,5.1.4
5,052 i
4,933 |

!
i
I
|

Louisville, Memphis, and Little Rock.
Omaha and Denver.
* El Paso.
s Spokane, Portland, Seattle, and Salt Lake City.

148,382 '
149,147
148,631
156,883

70,704
83,839
63,547
70,627

403

FEDERAL EESERVE BULLETIN.

APEIL 1,1910.

IMPORTS AND EXPORTS OF GOLD AND SILVER.
Gold imports and exports into and from the United States.
[In thousands of dollars, i. c , 000 omitted.]
Ten days
ending
Feb. 20.

Eight days
ending
Feb. 28.

Ten days
ending
Mar. 10.

Total since
Jan. 1,1919.

Tota-, Jan. 1,
1918, to Mar.
8,1018.

IMPORTS.

384
99
2,558

.

Total

299
75
7

323
223
2,533

3,012
1,019
5,106

1,693
3,210
2,449
34

3,041

Ore and base bullion
Bullion, refined
United States coin

381

3,079

9,137

7,386

3,084
6,019

EXPORTS.

Domestic:
Ore and base bullion
.
United States mint or assay office bars
Bullion, refined
.
Coin
Total
Foreign coin
Total exports

961

953

707

953

707

7,193

9,149

961

. . . .

1
135
1
7,056

961

. . .

" 1
'
954

707

20
7,213

175
9,324

16

Excess of gold imports over exports since Jan. 1,1919, §1,924,000. Excess of gold imports over exports since Aug. 1,1914, §1,073,330,000.

Silver imports and exports into and from the United States.
[In thousands of dollars, i. e., 000 omitted.]
Ten days
"Eight days
ending
ending
Feb. 20,1919. Feb. 28,1919.

Total Jan. 1
to Feb. 28,
1919.

Total Jan. 1
Ten days
Total since
to Feb. 28,
ending
Mar. 10,1919. Jan. 1,1919.
1918.

IMPORTS.

2,182
125
18
207

Total

1,277
279
12
73

9,702
1,374
120
1,137

4,202
5,088
152
1,005

1,942
774
11
120

11,644
2,148
131
1,257

2,532

Ore and base bullion
Bullion, refined
United States coin
Foreign coin

1,641

12,333

10,447

2,847

15,180

3,852
9,761
135

7,371
1,103
9

31,175
19,826
242

2
7
12,034
158

6,957
3,537
57

38,132
23,363
299

EXPORTS.

Domestic:
Ore and base bullion
United States mint or assay office bars
Bullion, refined
Coin....
Total

13,748

8,483

51,243

12,201

10,551

61,794

Foreign:
Bullion, refined
Coin...

269
355

10

451
1,021

490
456

752
1,049

Total.
Total exports

624
14,372

10
8,493

1,472
52^715

946
13,147

301
28
329
10,880

1,801
63,595

Excess of silver exports over imports since Jan. 1,1919, $48,415,000. Excess of silver exports over imports since Aug. 1,1914, $328,175,000.




404

FEDERAL RESERVE BULLETIN.

Estimated general stock of money

money held by Treasury, and by the Federal Reserve system, and all other money in the
United States, Mar. 1,1919.

General stock
of money in the
United States.

«2 old coin*
Gold certificates
Standard silver dollars
Silver certificates
Subsidiary silver
Treasury notes of 1890
United States notes
Federal Reserve notes
Federal Reserve Bank notes.
National-bank notes
Total:
Mar. 1,1919..
Feb. 1,1919..
Jan. 1,1919...
Dec. 1,1918..
Nov. 1,1918..
Oct. 1,1918..
Sept. 1,1918..
Aug. 1,1918..
Julyl,191S..
Jan. 1,1918...
Apr. 1,1917..

APRIL 1, 1919.

Held in the
United States
Treasury as
assets of the
Government.i

§3,084,213,002

Held b y or for
Federal Reserve
Banks and
agents.

*242,*742,"373'

11,287,225

8,025,695
»2,994,278

346,681,016
2,678,607,950
142,840,180
721,879,473

12,866,438
36,090,813
6,196,330
60,740,275

* 54,695,510
167,232,605
8,007,285
18,658,176

$421,234,734
385,181,374
81,165,206
208,077,692
228,460,870
1,779,240
279,119,068
2,475,284,532
128,636,565
642,481,022

7,566,299,924
7,611,628,810
7,780,793,606
7,669,576,580
7.590,173,171
7,391,008,277
7,092,955,371

545,695,945
489,831,726
454,948,160
416,383,232
399,321,725
380,246,203
369,937,060
390,798,058
356,124,750
277,043,358
258,198,442

2,169,183,676
2,252,757,560
2,220,705,767
2,123,208,487
2,125,198,801
2,084,774,897
2,070,371,803
2,054,455,993
2,018,361,825
1,723,570,291
952,934,705

4,851,420,303
4,869,039,524
5,105,139,679
5,129,984,861
5,065,652,645
4,925,987,177
4,652,646,508
4,449,835,748
4,367,739,209
4,255,584,622
4,100,976,125

349,335,930

6,742,225,784
6,256,198,271
5,312,109,272

$368,226,767

Amount per
capita outside
the United
States Treasury
and the Federal Reserve
system.

Held outside the
United States
Treasury and
Federal Reserve
system.

SI, 456,092,357
453,477,770

"*"50," 288," 097"

$45.33
45.56
47-83
48.13
47.59
46.34
43.83
41.97
41.31
40.53
39.54

1
Includes reserve funds against issues of United States notes and Treasury notes of 1890 and redemption funds held against issues of nationalbank notes, Federal Reserve notes, and Federal Reserve Bank notes.
2 Includes balances in gold settlement fund standing to the credit of the Federal Reserve Banks and agents.
8
Includes standard silver dollars.
•
/
&
* Includes Treasury notes of 1890.

DISCOUNT RATES.
Discount rates of each Federal Reserve Bank approved by the Federal Reserve Board up to Mar.

81,1919.

Maturities.
Trade acceptances.

Discounts.

Federal Reserve Bank.

Within 15
days,
including
member
banks'
collateral
notes.

16 to 60
days.

61 to 90
days.

Agricultural and
live-stock
paper
over 90
days.

Secured by U. S. certificates of indebtedness or Liberty loan
bonds.
Within 15
days,
including
member
banks'
collateral
notes.

Ito60
days,
inclusive.

61 to 90
days,
inclusive.

16 to 90
days.

Boston
New York 1
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
VRates for discounted bankers' acceptances maturing within 15 days, 4 per cent; within 16 to 60 days, 4£ per cent; and within 61 to 90 days,
4£ per cent.
* Rate of 4 per cent on paper secured by fourth Liberty loan bonds where paper rediscounted has been taken by discounting member banks
at rate not exceeding interest rate on bonds.
NOTE I.—Acceptances purchased in open market, minimum rate 4 per cent.
NOTE 2.—In case the 60-day trade acceptance rate is higher than the 15-day discount rate, trade acceptances maturing within 15 days will be
taken at the lower rate.
NOTE 3.—Whenever application is made by member banks for renewal of 15-day paper, the Federal Reserve Banks may charge a rate not
exceeding that for 90-day paper of the same class.




405

FEDERAL BESEBVE BULLETIN.

APEtL 1, 1919.

OPERATION OF THE FEDERAL RESERVE CLEARING SYSTEM, FEB. 16,1919, TO MAR. 15,
1919.
Items drawn on banks
in Federal Reserve
city (daily average).

Items drawn on banks
in district outside Federal Reserve city (daily
average).

Total items drawn on
banks in own Federal
Reserve district (daily
average).

Number.

Number. ;

Number. |

Amount.
$18,819,184
54,660,662
26,087,102
6,596,556
6,270,330
2,335,283
23,574,000
8,085,305
7,449,544
9,333,274
2,410,801
2,945,336

81,422 i 810,373.266
126,919 ! 62,889,441
43,391 :
5,291,512
64,553
23,025,657
48,074
12,710,821
27,806
6,916,946
62,108
11,718,000
9,914,963
22,430
2,013,221
63,834
12,452,611
29,211 i
7,480,226
33,972
6,927,925

97,013
146,871
65,969
69,979 I
50,528 I
31,135
80,441
43,064
27,717
69,371
30,836
36,505

829,192,450
117,550,103
31,378,614
29,622,213
18,981,151
9,252,229
35,292,000
18,000,268
9,462,765
21,785,885
9,891,027
9,873,261

109,083
90,944
95,622
51,408

168,567,377
198,935,424
221,889,946
153,701,375

640,346 171,714,589
599,951 156,360,759
635,080 I 165,386,737
259,531 • 113,134,162

749,429
690,895
730,702
310,939

340,281,966
355,296,183
387,276,683
266,835,537

by
! I tern s drawn on ban ks in Items handledn k both
Darent b a
and
! other districts (daily
branches (daily averaverage).
Number.




Amount.

15,591
19,952
22,578
5,426
2,454
3,329
18,333
6,438
5,287
5,537
1,625
2,533

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas Citv
Dallas.....'
San Francisco
Totals:
Feb. 16 to Mar. 15, 1919
Jan. 16 to Feb. 15,1919
Dec. 16,1918, to Jan. 15,1919..
Feb. 16 to Mar. 15,1918

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
!
Kansas Citv
i
Dallas
".
!
S a n Francisco
;
Totals:
I
Feb. 16 to Mar. 15,1919
1
Jan. 16 to Feb. 15,1919
1
Dec. 16,1918, to Jan. 15,1919...
Feb. 16 to Mar. 15,1918....

Amount.

Amount.

Number. |

Amount.

•i-

Items drawn on Treas- \ XT
urer of United States ! -Number
of
(daily average).
member
banks in
district.
Number.
Amount.

9,618
35,859
22,970
3,616
6,005
3,277
6,428
864
1,221
6,907
3,392

89,749,614
14,712,220
8,575,328
3,960,583
4,862,273
3,040,267
1,186,000
333,550
1,085,385
5,220,395
1,575,152
1,459,792

3,069
140
3,951
333
1,197

32,133,165
215,535
1,922,406
212,000
457,090

3,040
1,178
2,139

1,833,434
184,839
2,815,800

8,995
46,452
8,340
6,539
2,836
4,800
13,881
7,598
888
5,083
3,853
5,298

100,963
89,972
00,828
51,259

55,760,559
53,431,53!)
64,079,660
48,556,709

15,047
12,807
13,662
7,700

9,774,269
11,036,400
10,080,440
6,413,071

114,563
126,051
77,282
58,991

52,723,229
20,703,209
4,422,281
1,688,235
536470
536,470
2,543,815j
4,536,000 !
1,213,919 !
239,058; !
464,704
441,353
7,234,232 !
46,746,505
63,221,002
37,753,800
25,827,757

;
!
i
i

Number
of nonmembor
banks on
par list.

Number
of nonmember
banks in
district.

568
425
1,340
513
873
995
805
639

244
321
363
801
329
237
2,599
1,275
1,233
2,193
270
1,040

244
321
425
1,129
1,518
1,566
4,175
2,571
2,842
3,227
1,209
1,201

8,7S2
8,717
8,691
8,013

10,905
10,622
10,342
9,425

20,428
20,348

424
722
656

406

FEDERAL RESERVE BULLETIN.

APRIL 1,1919.

LOANS AND DISCOUNTS OF STATE BANK MEMBERS.
Classification of loans and discounts of 930 State banks and trust companies, members of the Federal Reserve system, as shown
by their condition reports for Dec. 31, 1918.
[Tn thousands of dollars; i. e., 000 omitted.]
j
Total,
"District District District District District District District District District District District; District United
No. 8
No. 3 No. 4 No. 5 No. 6 No. 7
No. 9 No. 10 No. 11 No. 12
No. 2
i No. 1
States
(44
(54
(101
(288
i (31
(70
(27
(97
(86
(66
(37
(29
(930
banks). banks). banks). banks). banks). banks).
banks), banks). banks). banks). banks).
On demand, not secured by
collateral
23,166
On demand, secured by Liberty bonds and United
States Treasury certificates
2,800
of indebtedness
On demand, secured by other
53,819
collateral.
On time, not secured by collat151,250
eral
On time, secured by Liberty
bonds and United States
Treasury certificates of indebtedness
13,273
On time, secured by other
48,834
collateral
Secured by real estate mortgages or other real estate liens
29,257
and deeds
Acceptances of other banks
3,064
discounted
Acceptances of this bank purchased or discounted
581 |
Loans and discounts not classified

"I
32,059

9,557

10,753

20,294

1,748

2,188

5,625

23,783

856

9,541

3,085

2,256

6,147

123

130,808-

1,944

482

5,492

2,743

558

40

232

37,312

464,448 62,423 63,080

10,154

30,527 104,150

39,209

1,880

4,264

2,873 j 5,902

842,729

474,053 20,133 75,964

28,679

38,478 :268,420

60,722

20,925

18,085

10,621 •; 39,734

1,207,064

195,717

18,709 j 24,452

4,191

3,270 : 27,503

4,949

1,403

2,307

1,166 ! 3,330

300,270

262,200

16,101 I 41,848

12,408

29,155 ;138,899

44,598

12,015

17,782

15,567 | 21,288 j

i

660,695

5,215

9,275 |l38,773

19,027

11,228

5,805

56,954

4,349

65,673

48,204

146

1,318

11,159

236

744

16,166

291
208

;

710

|

2,230

362,365

805

55,702

163

192

17,597

65

259

Total loans and discounts. 325,927 il, 581,254 133,162 285,776

63,806 119,449 709,835 182,074
I

157 !

13,004

1

10

133

16,841

51,445

36,585

90,767 3,631,383

36,585

90,767 3,630,678

1,285

63,816 119,606 709,856 182,074
10

3,805

101

190 j 1,867

Total shown by reports.. 326,044 1,581,254 133,402 285,776
I^ess adjustment due to inclusion of rediscounts in loan
240
classification by some banks.
117




2,648

50,758

160

21
50,758

51,285

705

INDEX,
Acceptances:
Page.
Bankers', growth in volume of
309
Banks granted authority to accept up to 100
per cent of capital and surplus
357
Belgian acceptance credits
309
Holdings February 28, distributed by classes
of accepting institutions
392
Purchases during February, also average rates
and maturities
388, 391
Security covering acceptances in excess of 10
per cent limitation of section 13
362,364
Agricultural paper held on last Friday in February. 391
Babson's business barometer
331
Bank of France:
:^i Charter of, law renewing
339
a
l War operations of
337
Bank transactions—debits to deposit account
369-371
Belgian acceptance credits
309
Bills of exchange, practice of handling, in foreign
countries
345-357
"Bills payable" item added to weekly statement
of New York clearing house banks
311
Bonds offered for subscription by War Finance
Corporation
."
308
Branches, foreign, of American banks
357
Brookmire economic service
332
Business conditions:
Indexes of, development of
331-336
Summary of, as reported by Federal Reserve
agents
314-323
Canadian indexes of business conditions
334
Certificates of indebtedness:
Amounts of loans upon security of, carried by
banks throughout the country
306
Income tax, proceeds of, used in settling outstanding certificates
306
Issued in anticipation of fifth liberty loan
304
Chart showing number of discounting member
banks and average discounts held by all Federal
Reserve Banks, 1917-1919
387
Charters issued to national banks during March
358
Check clearing and collection system, operation of.. 405
Clayton Act, applicability of section 8 to banks
located in suburban districts
362
Clearing house bank debits
369-371
Conversion privilege extended to first Liberty loan. 329
Costa Rica, -practice of handling bills of exchange in. 345
Credits, foreign-bank, in war
323
Crops, growing, loans on, by foreign branch of
national bank
".
362
Debits to deposit accounts, weekly figures of
369-371
Denmark, practice of handling bills of exchange in.. 351
Discount and interest rates prevailing in various
cite
376-378
Disco lint operations:
December, 1918, to February, 1919, by rates
charged
392
February, by classes of paper
388-390
Number of member banks accommodated since
January, 1917
386
Chart showing
387
Discount rate3 in effect
404
Earning assets of Federal Reserve Banks, average
amount of each class held during February
390
Earnings of Federal Reserve Banks:
Anrwial rate based on February, 1919, returns.. 390
February, from each class of earning assets
390




England:
Exchange situation in
311
Practice of handling bills of exchange in
352
Failures, commercial, reported
359
Federal Advisory Council, conference of committee
of, with governors of Federal Reserve Banks
313
Federal Reserve Banks:
Addition to weekly statement of item showing
rediscounts between
311
Condition of
310, 393
During period covering fourth Liberty
loan
324
Resources and liabilities of
393-396
Federal Reserve note account of Federal Reserve
Banks and agents
397, 398
Fiduciary powers:
Granted to national banks
359, 360
Right of national banks in Hawaii to exercise.. 366
Section 11 (k) as amended, ruling on
362, 363
Foreign banks, credits in war
323
Foreign branches of American banks, list of
357
Foreign branches of national banks, loans by, upon
security of growing sugar crop
362
Foreign exchange situation
311-313
Lira exchange, restrictions revolted as to sale or
purchase of
311
France:
Bank of—
Law renewing charter of
339
War operations of
337
Exchange situation in
312
Practice of handling bills of exchange in
354
Gold imports and exports
313,403
Governors of Federal Reserve Banks, conference of,
with Board
.
313
Guatemala, practice of handling bills of exchange
in
346
Hawaii, right oS; national banks in, to exercise fiduciary powers
366
Honduras, practice of handling bills of exchange in. 34.8
Imports and exports of gold and silver
403
Income tax:
First installment paid into Treasury
306
Use of proceeds in payment of outstanding
certificates of indebtedness
306
Indexes of business conditions:
Babson's business barometer
331
Brookmire economic service
332
Persons, Prof. Warren M., work ot", on
333
Canadian indexes
334
Index numbers of production of raw materials, by
Dr. Wesley C. Mitchell
336
Index of wholesale prices
372-375
Industrial Board of Department of Commerce, statement of organization and purpose
341
Inflation of bank credit
306
Interest and discount rates prevailing in various
cities
376-378
Investment operations of Federal Reserve Banks
during February
389
Law department:
Section 11 (k) of the Federal Reserve Act
363
Security covering acceptances in excess of 10
per cent limitation of section 13
864
Right of national bank located in Hawaii to
exercise fiduciary powers
366
i

II

INDEX.

Law department—Continued.
Amendments to State banking laws relating to
State bank membership... -^
366
Liberty bonds, loans upon security of, amounts of,
carried by banks throughout the country
306
Liberty loan:
First, conversion privilege extended to
329
Fourth, condition of Federal Reserve Banks
during period of floating of
324
FifthCertificates of indebtedness issued in anticipation of
304
Notes, short-term, versus bonds
304,306
Obligation resting upon community to subscribe for new notes
305
Terms of, as announced by the Secretary
of the Treasury
303
Liquidation of war paper, reports by Federal Reserve agents relative to
310, 325-329
Lira exchange, restrictions revoked as to sale or purchase of...
311
Live stock paper held on last Friday in February.. 391
Loans and discounts of State member banks on December 31, 1918
407
London Economist, article from, on bank credits in
war
'
323
Maturities:
Average of acceptances purchased during February
389,391
Average of bills discounted during February. 388,390
Of the several classes of earning assets each
Friday
396
Member banks:
Condition reports of banks in selected
cities
310,399-402
Loans and discounts of State members, December 31, 1918
406
Number of, discounting during February
388
Number accommodated through discount operations, by months, since January, 1917
386
Chart showing
387
Number in system at end of each month, 19171919
386
Number in system February 28
388
Mitchell, Dr. Wesley C , index numbers of production and prices of raw materials prepared by. . . .
336
Money, stock of, in the United States
404
National banks:
Charters issued to, during the month
358
Fiduciary powers issued to
359-360
Nicaragua, practice of handling bills of exchange in. 349
North Carolina, amendment to banking laws of, relating to State bank membership
366
Notes, short-term, in lieu of bonds, to be offered in
fifth Liberty loan
303-305
Open-market operations—acceptances,
United
States bonds, certificates of indebtedness, and
municipal warrants purchased during February. 388, 389
Persons, Prof. Warren M., work of, in construction
of a business barometer
333
Physical volume of trade
379-385
Portugal, practice of handling bills of exchange i n . . 355
Prices:
Index of wholesale
372-375
Recession in general level of
310
Statement of Industrial Board of Department
of Commerce relative to
341
Railroads:
Aid in
financing
'.
307
Eligibility of paper of, for rediscount
308
Statement of Director General Hines relative to
financing of
307




Rediscount of paper secured by Government obligations as authorized by the act approved March
3, 1919
361
Rediscounting at Federal Reserve Banks, caution
against overdoing
311
Resources and liabilities:
Federal Reserve Banks
393-396
Member banks
399-4021
Review of the month:
The fifth Liberty loan
303-306
Notes versus bonds
-:. 304
Certificates of indebtedness
304,306
Needs of the Government
305
Proceeds of income tax turned into Treasury.. 306
Railroad
financing
307
Bonds of War Finance Corporation
308
Private
financing
308
Belgian industrial credits
309
Condition of Federal Reserve and member
banks
310
Price situation
310
Rediscounts and bills payable
311
Foreign exchange situation
311,312
Gold imports and exports
313
Conference of governors of Federal Reserve
Banks
313
Rulings of the Federal Reserve Board:
Rediscount of paper secured by Government
obligations as authorized by the act approved
March 3, 1919
361
Section 11 (k) of the Federal Reserve Act
362
Security covering acceptances in excess of 10 per
cent limitation of section 13
362
Loans by branch banks upon the security of
growing sugar crop
*
.
362
Applicability of section 8 of the Clayton Antitrust Act to banks located in suburban districts
'
362
Silver, imports and exports of
403
South Dakota, amendments to banking laws of, relating to State bank membership
.".
367
Spain, practice of handling bills of exchange in
356
State bank members, classification of loans and discounts of
406
State banks:
Admitted to system during March
358
Amendments to State laws relative to membership of
366-368
Sterling exchange, suspension of purchases by British Government
311
Sugar crop, growing, loans on, by foreign branch of
national bank.. .1
362
Tennessee, amendments to banking laws of, relating
to State bank membership
367
Trade, physical volume of
379-385
Treasury, expenditures of
307
War Finance Corporation:
Bonds offered for subscription
308
Financing of railroads by
307
War paper:
Amounts carried by banks throughout the country
\
306
Amount discounted during February
390
Amount held on last Friday in February
391
Reports of Federal Reserve agents relative to
liquidation of
310, 325-329
West Virginia, amendments to banking laws of, relating to State bank membership
367
Wholesale prices, index of
372-375
Wyoming, amendments to banking laws of, relative to State bank membership
368

o

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