Full text of Federal Reserve Bulletin : August 1915
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FEDERAL RESERVE BULLETIN ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON AUGUST, 1915 WASHINGTON GOVERNMENT PRINTING OFFICE 1915 FEDERAL RESERVE BOARD. EX OFFICIO MEMBERS. WILLIAM G. MCADOO, Secretary of the Treasury, CHARLES S. HAMLIN, Governor. FREDERIC A. DELANO, Vice Governor. P A U L M. WARBURG. W. P Chairman. G. HARDING. ADOLPH C. MILLER, JOHN SKELTON WILLIAMS, Comptroller of the Currency. H . P A R K E R WILLIS, Secretary. SHERMAN ALLEN, Assistant Secretary. M". C- ELLIOTT, Counsel. TABLE OF CONTENTS. Page. Work of the board Earnings and expenditures of Federal reserve banks The cotton situation State bank membership in Federal reserve system Gold settlement fund Address by Mr. John Perrin, of the Federal Reserve Bank of San Francisco. Address by Mr. D. C. Wills, of the Federal Reserve Bank of Cleveland Clearance system, establishment of Informal rulings of the board Circular and regulations Conference of bank examiners Law department General business conditions '. Movement of principal assets and liabilities of Federal reserve banks Gold imports and exports Acceptances Paper currency outstanding Distribution of rediscounts Resources and liabilities of Federal reserve banks. Federal reserve agents' accounts -. 173 175 176 180 182 183 186 189 192 211 215 217 218 225 233 236 240 241 242 246 248 FEDERAL RESERVE BULLETIN VOL. AUGUST 1, 1915 1 WORK OF THE BOARD. The work of the Federal Reserve Board during the month of July has included the following principal elements: (1) The preparation and issue of new regulations relating to trade acceptances, designed to facilitate the discounting of bills of exchange drawn against sales of goods and accepted by purchasers. (2) The preparation and issue of complete regulations (in conjunction with the Treasury Department) governing the redemption and return of worn and mutilated Federal reserve notes. (3) Investigation of conditions as to the moving of crops, the holding of conferences relating thereto, and the issue of special instructions to Federal reserve agents thereon. (4) Review of conditions relating to the granting of trustee and executor powers, and the establishment of a definite policy regarding the same. (5) Study of methods for obtaining full information regarding the condition of member banks, for use by Federal reserve banks in passing upon rediscount applications, and the holding of conferences relating thereto. Pursuant to the announcement made some months ago, the Board has compiled a complete tabular showing of the expenses and earnings of the Federal reserve banks from the date of their organization to the close of business on June 30, 1915, and presents the figures in this issue (p. 176). Further steps have been taken toward the organization of the New Orleans branch of the Federal Reserve Bank of Atlanta by electing directors and making tentative plans with respect to the undertaking of business. Three directors have been chosen by the Federal Reserve Board, as follows: 'Mr. P. H. Saunders, of New Orleans, La. Mr. Albert P. Bush, of Mobile, Ala. Mr. James E. Zunts, of New Orleans, La. No. 4 Three directors have been chosen by the Federal Reserve Bank of Atlanta, as follows: Mr. Sol. P. Wexler, of New Orleans, La. Mr. John EL Fulton, of New Orleans, La. Mr. W. J. Davis, of Jackson, Miss. One additional director remains to be chosen by the Federal Reserve Bank of Atlanta, and this director will act as manager of the bank. During the month the board has had under very careful consideration the question of time and conditions under which Federal reserve banks should begin to act as fiscal agents of the United States Government in accordance with the provisions of the Federal reserve act. Considerable work has been done during the month by the committee on State banks and the division of audit and examination in making the necessary arrangements for the admission of State banks applying for membership in the Federal reserve system, in arranging with State bank authorities for the supplying of the necessary information, and in investigating the status of the various applicants for admission. The procedure now in force with reference to admission is, in brief, as follows: 1. After approval by the committee on admission of State banks, a letter or telegram, with the necessary instructions, is to be sent to the Federal reserve agent. 2. After receipt of an application from the Federal reserve agent, reports, digest, and recommendation are to be submitted (a) to the committee on admission of State banks for approval; (6) to counsel for approval as to legal form of application and as to the legality of suggested conditions; (c) to.the Board for final approval. During the month of July members of the Board have with its approval accepted invitations to appear before various gatherings of bankers and to address them on questions relating to the Federal reserve system. This is in pursuance of the policy of the Board of keeping in touch with the various organizations and informing them of the Board's attitude as to pending problems. 175 176 AUGUST 1,1915, FEDERAL EESEBVE BULLETIN". EARNINGS AND EXPENDITURES OF FEDERAL RESERVE BANKS. Several months ago the Federal Reserve Board authorized the publication of a comparative statement of earnings and expenses of all Federal reserve banks for the period terminating at the close of business June 30, 1915, the banks having been opened on November 16, 1914. It was directed that the statement of earnings and expenses be published periodically thenceforward. Accordingly there is herewith presented a comparative statement of earnings and expenses for the period November 16, 1914-June 30, 1915. The classification employed was submitted to the governors of reserve banks at their recent meeting in Chicago, on June 14, 1915, and has since then been informally considered with other operating officers. The statements of expenses and earnings of the 12 Federal reserve banks, submitted by the banks at the request of the Federal Reserve Board as of June 30, 1915, show that the system is paying current expenses and carrying a surplus to its organization, equipment, and cost-of-notes accounts. The earnings of the system from November 16, 1914, when the banks were opened, to June 30, 1915, were $918,588.59, or about $25,000 over current expenses. During that period expenditures of about $1,777,000 were incurred, but of this sum $378,922 was for organization expenses, $202,136 for equipment, and $302,159 was the cost of preparing Federal reserve notes. These expenditures should be distributed over a period of perhaps several years of operation. Current expenses during the seven and one-half months were $894,117. The first order placed for Federal reserve notes was for $250,000,000. After consultation with the operating officers of the Federal reserve banks a second order for a similar amount was given, making the total of such notes prepared 8500,000,000. The earnings of the system during the month of June were $163,747.07, or more than onethird greater than the average monthly earn- ings for the seven and one-half months since November 16, 1914, Current expenses for June were, however, only $122,473.92, which is less than 3 per cent in excess of the average monthly current expenses of the banks to June 30. These figures furnish a basis of comparison between conditions at this time and the average for the entire period covered by the statements of expenses and earnings. The statement, a complete detailed analysis of which follows, shows average earnings for what may be roughly termed the first one-half year of the operation of the system of 4.3 per cent on capital, against an average percentage of current expenses to capital of 4.2 per cent. The Federal Reserve Bank of Richmond reports 7.5 per cent of net earnings, by which is meant total earnings less current expenses, and the Federal Reserve Bank of Atlanta earnings of 6.1 per cent. The net earnings of the Federal Reserve Bank of Dallas for the same period are 2.4 per cent. Gradual growth in the financial strength of the banks is seen in the fact that for June earnings in excess of current expenses were shown by the Federal reserve banks of Boston and San Francisco, besides the three southern banks and the New York and Chicago banks, which show excess of earnings over current expenses for the entire period under consideration. . . I. EARNINGS. The total earnings of the Federal reserve banks from November 16, 1914, the day the banks were opened for business, to June 30, 1915, amounted to $918,588.59. Of this total about 59 per cent was from notes discounted, over 24 per cent from municipal warrants, a little over 10 per cent from acceptances, about 6 per cent from United States bonds, and less than 1 per cent from miscellaneous, mainly exchange, operations. Over 37 per cent of the total earnings are credited to the three southern banks, the earnings of the Richmond bank being exceeded only AUGUST 1,1915. by those of the New York bank, whose paid-in capital is, however, almost 25 per cent in excess of the combined paid-in capital of the three southern banks. In all four banks, viz, New York, Richmond, Chicago, and Atlanta, each report over $100,000 of total earnings for the seven and one-half months under discussion. These four banks, as well as Dallas, show an excess of earnings over current expenses. While nearly 60 per cent of the total earnings of all the banks is derived from rediscounts of commercial paper, this percentage is very close to 100 in the case of the three southern banks, and much less for the eastern banks, whose principal earnings are from funds invested in municipal warrants. This is particularly true of the New York bank, whose earnings from investments in the latter class of paper constituted over 60 per cent of its total earnings. The Boston and Philadelphia banks report about 50 per cent and Cleveland over 42 per cent of all earnings from this class of business. The western banks, including San Francisco, show, without exception, larger earnings from investments in United States bonds than from investments in municipal paper, which is issued mainly by eastern cities. Thus, the Chicago bank reports 25.6 per cent of its total earnings under the head of United States bonds, as against 25.5 per cent under the head of " Warrants"; St. Louis, over 16 per cent from investments in United States bonds, as against less than 5 per cent from warrants. Minneapolis shows relatively larger earnings from warrants, having purchased late in December of last year a relatively large amount of shortterm notes of the State of Minnesota. As a rule, the western banks purchase these warrants through the eastern banks. Cleveland is the only eastern bank to report any earnings under the head of United States bonds. Of the $92,000 earned from acceptances the share of the eastern banks is over 73 per cent. Of the western banks Chicago and San Francisco only report substantial earnings from this class of business, a large portion of which comes to them through the Federal Reserve Bank of New York. 177 FEDERAL RESERVE BULLETIN. II.—EXPENDITURES. A—Current expenses. Of a total expenditure for the system of about $1,777,000 incurred to June 30, 1915, the current expenses of the banks since November 16, 1914, constituted about 56 per cent. Over 63 per cent of the current expenses of the banks went as compensation for personal services and over 55 per cent as salaries to officers and the clerical staff of the banks. This percentage, while varying from bank to bank, shows, however, but little variation by geographic sections, the four eastern banks, for instance, indicating the same percentage of officers' and clerks7 salaries as the four western banks, viz, 55 per cent as against 53 per cent shown for the three southern, more active, banks. Over 11 per cent of the total current expenses is represented by the item "Rent/* and about 7 per cent by the item "Printing and stationery." The operating ratio of the banks, i. e., the per cent relation of the total current expenses to earnings shows a falling tendency, this ratio being 97 per cent for the period since November 16, 1914, and less than 75 per cent for the month of June. B—Organization expenses. The organization expenses of the banks consist in the first place of amounts contributed by the banks to defray the expenses of the Federal Reserve Board, the total for the period since November 16 being $191,921.94, These contributions, beginning with July 1, 1915, will be included among the current expenses of the banks. Over $187,000 expended for local requirements by the banks prior to November 16, 1914, are also classed as organization expenses. C—Equipment Expenditures of a non-recurring character made in the purchase of furniture, safes, machines, and the cost of installing fixtures, vaults, etc., have been brought together under the above common head. This expenditure results in the acquisition of a more permanent form of assets which should be spread as an 17.8 FEDERAL BESERVE BULLETIN. expense over the entire period of use, and not number of days in each of the three periods, merely over the first fiscal year. and the sum of the three products for each bank was divided by 227, the number of days from D—Cost of Federal reserve notes. November 16, 1914, to June 30, 1915. In this For similar reasons the cost of printing and manner a weighted average capital was obshipping the Federal reserve notes has been tained, which, it is believed, is sufficiently acset up separately and will be charged only in curate for the purpose of calculating the per part to the first year's expenditures. cent relations between earnings and capital and expenses and capital. These latter perEARNINGS AND CURRENT EXPENSES RELATED centages were obtained by using the weighted TO AVERAGE CAPITAL. capital of each bank as divisor, and the earnThe earnings and current expenses of the sev- ings and expenses as dividends. The quoeral banks have been related,to the average cap- tients thus obtained were multiplied by the ital of these banks. This average was obtained fraction f-§-fby using for the periods of November 16, 1914, The following table shows the amounts of to February 1, February 2 to May 1, and May 2 capital used for each of the three periods, the to June 30,-the amounts of capital reported for weighted average capital, and the percentages -each bank as at close of business on November of earnings and expenses to the capital of each 19, February 4, and May 7, respectively. These reserve bank for the period November 16,1914, figures were multiplied by 78, 89, and 60, the to June 30, 1915: Earnings and current expenses of the Federal reserve banks related to their average capital. [In thousands of dollars.] Capital reported at close of business on Fridays. Federal reserve banks. Nov. 19, 1914. Feb. 4, 1915. May 7, 1915. Boston New York.... Philadelphia.. Cleveland Richmond Atlanta....... Chicago.. St. Louis , Minneapolis.., Kansas City.. Dallas San Francisco 1,620 3,322 2,088 2,026 1,089 787 2,195 935 808 935 957 1,296 3,184 6,633 4,084 3,997 2,072 1,427 4,300 1,824 1,602 1,773 1,690 2,537 4,781 9,944 6,188 5,959 3,252 2,257 6,559 2,774 2,345 2,754 2,780 Total... 18,058 35,123 53,487 Days Weighted X average capital [OOO's omit- capital. ted). Percentage of current earnings to capital. Percentage of current expenses to capital. 1,446,093 897,620 871,301 464,470 323,809 947,450 401,706 346,302 395,967 391,856 560,521 3,069 6,371 3 954 3 838 2 046 1 426 4 174 1770 1525 1744 1726 2,469 Percent. 1.9 4.3 2.2 1.9 11.6 11.6 4.8 3.0 3.4 2.2 8.8 3.5 Percent. 3.2 3.2 2.7 3.1 4.1 5.5 4.2 8.4 5.3 6.5 6.4 4.7 7,743,691 34,112 4.3 4.2 Earnings and expenditures of each of the Federal reserve banks prior to and since November 16,1914, to June SO, 1915. New York. Philadelphia. Cleveland. Richmond $5,989.52 12,976.66 $28,212.43 37,165.46 $14,080.37 11,602.13 $18,163.77 $146,540.14 $102,631.57 5,781.88 18,424.38 63.21 104,003.82 1,115.65 1,541.14 18,885.25 169.18 292.40 453.75 184.58 31,826.25 31,938.16 2,827.94 1,650.71 5,597.51 11.55 7,480.5G 10,643.26 75.48 6,894.68 1,056.39 37,453.80 170,497.36 26,017.71 1,480.30 53,180.71 44,541.22 147,280.29 102,816.15 124,744.54 33,474.44 32,332.59 23,338.71 95,075.11 • 5,480.00 2,250.00 338.54 2,970.00 300.00 380.00 1,610.00 1,025.00 2,2S0.00 500.00 250.00 4,575.00 1,004.10 160.00 1,620.00 500.00 2,720.00 60.00 1,915.00 1,173.75 283.60 2,110.00 551.20 39,299.89 31,936.43 21,617.76 17,869.19 18,600.16 23,541.90 16,502.87 12,764.94 13,860.07 12,163.02 31,250.02 26,821.84 34,170.83 23,439.06 17,253.31 11,852.07 2,449.09 3,644.57 980.46 950.84 365.55 700.00 478.69 438.10 2,022.64 1,488.15 5,489.56 680.44 830.50 1,216.98 2,952.18 2,447.50 957.62 758.35 2,000.24 1,725.81 1,090.00 694.81 2,660.25 1,829.90 618.03 3,781.89 1,542.98 810.83 1,550.00 195.38 220.90 2,155.35 2,243.07 3,481.25 1,389.55 1,429.63 1,309.11 128.56 295.511 1,609.61 1,700.00 4,062.52 454.78 35.54 2,270.39 27.50 1,570.40 1,478.58 I,5i6.79 780.00 7?J. 35 430.30 3,344.19 2,015.24 14,666.66 2,410.69 807.55 8,784.10 1,186.39 4,637.07 Boston. I. Earnings, Nov. 16.1914. to Juno 30,1915: Bills discounted; Acceptances InvestmentsUnited States bonds Warrants Sundry profits Total II. Current expenses, Nov. 16,1914, to June 30,1915: 310.00 Federal advisory council (fees).. 6,377.85 Directors1 fees 600.25 Legalfeea Salaries18,216.60 Bank officers 13,149.57 Clerical stall Special officers and watchmen 275.00 Other Traveling expenses1,199.02 Directors. 1,087.74 Officers and clerks 680.00 Per diem allowance of directors. 614.56 Telephone 111.86 Telegraph 847.96 Postage Exprossaeo... . . . . . . . . . . . . 1,653.87 7,733.35 Rent Insurance and premiums on 821.18 fidelity bonds 485,71 Light, heat, and power 4,384.99 Printing and stationery 389.34 Repairs and alterations 3,006.36 Another 2m. so 2,175.55 926.40 1,620.00 715.50 242.45 1,250.35 700.69 26,083.30 5,492.01 2,608.49 735.72 2,720.04 678.12 1,396.82 0,087.80 m. io 999.47 382.52 1,523.86 953.72 2,139.52 74,022.28 Atlanta. 1,175.76 5,369.23 61,945.21 127,433.15 67,699.24 III. Current earnings, June, 1915... 10,121.45 19,928.84 7,820.39 8,683.33 17,240.20 9,262.38 V. Organization expenses: Assessments for general expenses of the Federal Reserve Board Nov. 10,1914, to June 30t1915 17,265.02 Miscellaneous expenses incurred 12,999.57 prior to Nov. 16,1914 35,434.18 30,766.13 30,265.19 ... 9,455,79 7,167.35 Chicago. $46,942.48 11,209.71 St. Louis. Minneapolis. Kansas City. $24,788.02 $12,103.12 $12,464.15 1,426.65 2,030.17 2,923.49 Dallas. San Francisco. Totals for the system. $95,074.17 $34,685.82 $541,675.76 92,085.26 6,969.11 8,331.31 3,861.43 57,724.05 220,720.31 6,382.61 53,847.67 918,588.59 300.00 960.00 93.50 2,140.00 2,0S2.14 34,757.85 7,997.80 16,820.82 18,879.67 19,498.25 15,094.24 23,066.67 19,416.35 270,057.25 226,928.28 1,161.99 685.22 675.00 813.33 718.50 2,374.50 57.00 14,694.37 9,156.36 768.59 2,020.30 1,620.00 421.93 424.22 3,420.11 626.41 10,503.40 532.53 1,452.02 830.00 333.95 235.87 1,410.45 1,106.16 3,250.02 3,259.23 1,192.50 2,375.00 334.44 407.34 5,633.39 1,149.67 5,288.87 1,116.80 552.83 860.00 321.31 188.89 2,058.38 3,022.80 6,279.65 168.00 2,702.10 210.00 247.50 337.10 1,325. 40 2G5.75 10,550.44 16,587.91 15,818.50 13,178.10 5,260.01 5,992.84 26,907.73 16,589.84 101,170.91 1,753.90 830.37 838.50 7,256.25 4,394.27 7,301.84 122.80 945.48 2,505.17 98.58 3,508.13 506.09 779.10 8,187.26 78.24 2,115.45 1,2S6.92 1S4.35 3,017.16 3,913.39 2,112.31 20,556.11 3,568.47 62,423.60 7,755.59 32,634.30 894,117.9G 2,351.98 .94 51,663.60 48,906.31 10S, 618.45 91,9S3.84 50,649.41 71,051.16 68,214.87 71,930.44 7,640.77 | 30,207.10 16,918.30 17,G82.48 4,897.73 6,741.82 5,740.38 23,6S6.06 12,325.75 8,063.94 7,802.31 13,236.30 10,802.74 • 7,253.90 10,228.93 10,172.96 7,639.92 21,511.14 11,555.93 8,342.05 23,307.05 9,S48.55 8,557.98 9,879.48 10,163.92 13,817. OS 191,921.91 14,893.00 15.SG6.42 12,011.92 13,867.87 16,472.59 5,S54.30 13,204.70 15,60S. OS 14,556.13 20,809.41 187,001.02 66,200.31 37,131.90 37,377.56 23,507.85 22,209.92 39,779.64 15,702.85 21,762.68 25,578.46 24,720.05 34,026.49 378,922.96 0,963.99 4,20S.2S 3,702.71 1,160.99 5,479.60 4,561.14 7,037.00 3,039.61 6,762.20 370.54 5,656.50 15,105.35 1,591.25 49.00 5,324.27 15,071.41 11,184.70 14,056.28 2,381.90 115.00 932.35 3,930.75 9,382.89 9,290.30 6,900.00 0,879.68 2,478. 75 9,S17.52 552.84 4,632.44 9,532.80 3,390.77 910. 79 6,724.38 3,365.02 63,5S7.04 46,784.50 53,22S.42 38,536.77 10,008.63 20,283.63 14,252.02 18,472.80 10,799.71 4,200.00 25, COS. 73 16,950.20 22,402.10 45,636,GG 9,221.28 ! 4,300.37 202,136.79 VII. Cost of Federal reserve notes... 20,297.51 09,983.44 27,798. (M 26,888.86 11,566.18 11,566.18 29,133.75 16,625.75 11,142.02 12,349.32 11,536.14 ; 17,271.32 w .d 122,473.92 22,238.96 I 163,747.07 12,087.01 w B 302,159.11 Total IV. Current expenses, June, 1915.... Total VI. Equipment: Furniture and fixtures Vaults Machines Other Total • — . , .. - ; . CO 180 AUGUST 1,1915. FEDERAL BESEBVE BULLETIN. THE COTTON SITUATION. On June 30 the Federal Reserve Board, with a view to informing itself thoroughly regarding the situation in the cotton States and the problems to be met in moving the cotton crop this year, appointed a special committee to investigate and report on the status. That the Federal reserve agents might be advised of the desire of the Board and might furnish such data as were in their possession, Mr. W. P. G, Harding, member of the Board and chairman of the special committee, issued the following letter to the Federal reserve agents in the cotton region: The Federal Reserve Board, realizing the possibility of congestion of stocks of cotton this fall due to abnormal conditions in our export trade, desires full information regarding the facilities in your district for warehousing and financing the cotton which would under ordinary conditions be exported. The Board has, therefore, appointed a committee to study the question and gather data on the subject. The Board feels that in view of the large surplus reserves now held by the banks throughout the country there should be no difficulty, so far as the financial ability of the country is concerned, in providing for necessary advances upon that part of the crop which will eventually be shipped abroad. It appears from data in hand that the demand for our domestic manufactures of cotton goods is increasing, and it seems to the Board's committee that there is no occasion whatever for a depression in the price of raw cotton such as was experienced last fall. The committee believes that arrangements should be made to assure producers of cotton of the cooperation of merchants and bankers in the proper handling of the crop. In this connection attention is called to the estimate by the Department of Agriculture that the South has a warehouse capacity of 9 ; 664 r 000 bales. If proper use is made of this capacity and of the loanable resources of the banks, including both members and nonmembers of the Federal Reserve system, a gradual marketing of the crop will be entirely possible, and any danger of a repetition of last year's conditions will be averted. The writer, as chairman of the board's committee, would be glad to have your views on this subject, and is anxious to secure your cooperation in formulating plans to reassure and protect the farmers, merchants, and others interested in our cotton-growing industry. Subsequently a committee of the board held a conference at the Federal Reserve Bank of New York on July 16, which was participated in by a number of New York bankers having close connection with the cotton States. The general feeling as to the prospect for the coming autumn was optimistic, the bankers taking the view that all funds needed for crop moving would be readily forthcoming. Mr. Harding has analyzed the cotton crop conditions now prevailing as compared with those of a year ago, as follows: In view of the apprehension manifested by some of the southern farmers and business men regarding the marketing of the cotton crop now approaching maturity, it is well to make comparison between the conditions affecting the cotton market that prevailed last August and those existing at the present time. For the sake of greater clearness this comparison will be made in parallel columns. July, 1915. August, 1914. The war continues, the number of belligerents being increased by the addition of Turkey on the side of the Teutonic allies and by Italy on that of the Entente powers. Germany's and Austria's war ships confined in the North Sea, Baltic, and Adriatic. Their commerce-destroying cruisers in other seas have been either destroyed or interned. German and Austrian merchant vessels interned in various ports throughout the world. The sea area surrounding the British Ieles declared a war zone and blockaded by German submarines. About 90 per cent of all trans-Atlantic commerce carried in British bottoms. Current indebtedness of America abroad entirely liquidated. Trade balance in our favor for fiscal year ended June 30 more than $1,000,000,000. Excess of old imports over exports anuary 1, 1915, to June 30, 1915, $140,070,000. Moderate corn crop and Very large southern crop good wheat crop in the of corn in sight, and inWest. creased crops of other grains. Large corn and wheat crops in the West. Federal reserve banks Federal reserve banks in not yet organized. operation. The shock resulting from the sudden outbreak of war between Great Britain, Russia, France, Servia, and Japan on one side and Germany and Austria-Hungary on the other created a financial crisis throughout the world and paralyzed ocean transportation at a time when grain and other crops were moving to the ports for shipment abroad. Bankers and merchants in the XJnited States owed England and the Continent on current account about $450,000,000, Owing to lack of shipping facilities this indebtedness could not be liquidated in a normal manner by exporting commodities, and. in many cases gold settlements were demanded, BO that the excess of our gold exports over imports from June 1 to December 30,1914, amounted to $156,287,254. Maturing grain crops in the South insufficient for home consumption. f AUGUST l, 1915. Cotton and stock exchanges closed, and all financial centers in fear of an avalanche of stocks, bonds, and mortgages returned to this country by Europe for sale. Lack of ability or disposition to make loans on cotton. FEDERAL RESERVE BULLETIN. All exchanges doing active business in a normal way. Lual Gradi absorption at advancing prices of American securities held in Europe. Such sales by Europe not " * ' ' discouraged and perhaps necessary as a basis for credits here for purchases of foodstuffs, cotton, and supplies. Money rates abnormally low, and banks* generally report large surplus of loanable funds. Interest rates throughout the country abnormally high, and while there was no longer a call loan market, rates on what had been call loans at 2 and 2£ per cent were advanced to 6 and 8 per cent. Textile trade fairly good. Trade in textiles dull; Some complaint of lack of demand poor. dyestuffs. Agitation for manufacture of dyes in this country. General industrial depresImproved business condision, closing of mills, cur- tions; mills reopened; labor tailment of production, and well employed. much labor without employment. Railroad earnings inRailroad earnings decreasing, with good proscreased rapidly. Unusually large use of pects for the remainder of fertilizer, and heavy bor- the year. Steel mills acrowings on cotton crop in tive. Better business in advance of its preparation. coal and iron. Cotton acreage 31,535,000 Cotton acreage 37,400,000 acres, which produced, in- acres. Estimates on growcluding linters, approxi- ing crop run from 11,000,000 mately 17,000,000 bales. to 13,000;000 bales, with the probabilities favoring the lower figure. Under the most adverse conditions conceivable, with demoralization in every money market, with high interest rates, with emergency currency being issued daily in large volume, with enormous gold shipments abroad, with crippled shipping facilities, without adequate insurance protection, and with ocean freights three to five times normal, we began in August, 1914, to market a crop of nearly 17,000,000 bales of cotton. Financial institutions, already hard pressed and fearing all manner of unforeseen contingencies, were unable and unwilling to make advances on cotton. In addition to this the southern farmers, who have this year planted record-breaking food crops, were faced with a deficiency in home-raised foodstuffs, and were in many cases forced to sell cotton to pay off pressing indebtedness and to secure adequate food supplies. Attention is called to the fact that the high prices for cotton now prevailing in Germany and Russia, about 30 cents a pound, will attract cotton to those countries in spite of ap- 181 parently insurmountable obstacles, just as high prices paid for cotton abroad during the Civil War made blockade running a steady business. There seems to be no question that ample funds can be obtained to finance in a normal way a much larger volume of cotton than was taken care of last year, and that even if Germany and Austria-Hungary should be forced to suspend cotton manufacturing entirely statistics show that the mills of the United States, Great Britain, Spain, Russia, Italy, Japan, China, and India have spindles sufficient to absorb every bale of cotton that is likely to be cultivated. It should be noted that the reduction in American cotton acreage this vear amounts to more than 5,000,000 acres, and that Egypt and India have also made radical reductions in cotton acreage. It is probable that the world's cotton crop, based on an average vield an acre, will be about 5,000,000 bales less than last year. Of course it is desirable that as broad a market as possible for cotton be established. That it is the earnest desire of the President, born in the South and a resident of that section in youth, during the period of life when one's tenderest ties and most enduring friendships are formed, to assist his native section in solving the problems now confronting it, can not be doubted, as the South's cotton problem is essentially national. But it should be remembered that the President owes a higher duty to the South, to the whole country, and to mankind at this juncture than the establishment of cotton prices. Serious complications between this country and any great foreign power would certainly not ennance cotton values. No man is as familiar with the great world problems of to-day and the relationship of this country to them as is the President, and he may be trusted to do his duty as he sees it, regardless of private appeals or public clamor. Cotton, unlike grain, is a commodity the market value of which depreciates in time of war, and the South as aproducer of that commodity has suffered. The actual position of cotton, however, is so much stronger than was the case a year ago, and financial and other conditions are so very much more favorable, that there can be no doubt that if the South will keep cool and will refrain from merely weakening its own position by unwise action, the present nervousness regarding the market for the growing crop will soon disappear. Even in the face of all the adverse conditions during the last 12 months the average price of cotton has been about what might FEDERAL RESERVE BULLETIN. 182 have been expected for a 17,000,000-bale crop had there been no war, and there is every reason to believe that the average price of cotton during the next 12 months will be higher. The real question is, Will southern merchants and southern bankers, and all others interested in southern trade, cooperate in securing for the cotton producers the benefit of this average price, and will the cotton producers themselves do their part? My knowledge of southern character and of southern business conditions justifies a confident belief that an affirmative answer will be given. The cotton tragedy of 1914 will be succeeded in 1915 by nothing more serious than a drama. State Bank Membership in Federal Reserve System. The following States have passed laws expressly authorizing State banks to become member banks: Idaho. Iowa. Kentucky. Maine. Massachusetts, Michigan. Minnesota. Mississippi. Missouri. Montana, Nebraska. New Jersey. New York. North Dakota. Ohio. Oregon, South Carolina. South Dakota. Texas. Utah. Virginia. Washington. In the following States there has been no specific legislation, but the State authorities have ruled that State banks may subscribe for stock in the Federal reserve bank of the district in which they are located: Alabama. Arizona. Arkansas. California. Delaware. Georgia. Illinois. Indiana, Kansas. Louisiana. Maryland, New Mexico,1 North Carolina. Rhode Island,3 Tennessee. Vermont. West Virginia. Wisconsin. In the following States the State authorities have filed opinions to the effect that State banks can not subscribe for stock in a Federal reserve bank: Connecticut. 1 J Nevada, Wyoming. As to trust companies but not as to other banks. Only as to trust companies and not as to State banks. AUGUST 1,1915, In Pennsylvania, Mr. William Hargust, second deputy attorney general wrote, in reply to a telegram from Secretary McAdoo, that he was unable to state positively whether or not State banks could subscribe for stock in a Federal reserve bank. The counsel for the Cleveland bank has filed an opinion that all State banks in Pennsylvania can probably subscribe for stock in a Federal reserve bank though the question is not free from doubt. The counsel of the Federal Reserve Bank of Philadelphia has filed an opinion to the effect that it is probably all right as to trust companies located in Pennsylvania, but not as to other banks. The attorney general of Oklahoma has filed an opinion to the effect that the laws of Oklahoma are not sufficiently clear to enable him to determine whether or not a State bank located in Oklahoma can subscribe for stock in a Federal reserve bank. The attorney general of Colorado has filed an opinion stating that a strict interpretation of the laws of that State would prohibit State banks from becoming members, but that such laws were passed prior to the passage of the Federal reserve act and that the legislature could not have intended to prohibit State banks from becoming members of a Federal reserve bank. He predicts favorable action by the Colorado Legislature, but we have no report that such action has been taken. In Florida and New Hampshire the State authorities have made no ruling one way or the other, but the counsel of the Federal Reserve Bank of Atlanta has filed an opinion stating that trust companies but not State banks may subscribe for stock in a Federal reserve bank, and the counsel for the Federal Reserve Bank of Boston has expressed his opinion to* the effect that the right of trust companies located in New Hampshire to subscribe for stock must be determined by the charter of each individual trust company, there being no general incorporation law for trust companies. AUGUST 1, 1915. GOLD SETTLEMENT FUND, The gold settlement fund has, since the issuance of the last Bulletin, shown a notable increase in gold deposits, which have now reached a net total of $50,300,000 (as of July 26). The number of transfersfcbetween the banks has also been increasing. The first withdrawal from the fund was made on July 14, the Federal Reserve Bank of Chicago having on that date requested that S2,000,000 be paid to it through the subtreasury at Chicago. Its telegram was filed at 10.30 a. m.7 and at 2.30 p. m. of the same day the Assistant Treasurer of the United States at Chicago advised the bank of his readiness to make the payment requested. The transaction is an excellent illustration of the mobility and ready availability of the moneys held in the gold settlement fund. In order to meet the wishes of the Federal reserve banks, the Board has made provision for the inclusion of overdrafts between the Federal reserve banks in the weekly settlement, the following letter having been sent to all banks on July 8; and the plan has been in operation at three weekly settlements with satisfactory results: " Beginning with the weekly settlement of July 15th, you are requested to include in your telegram of Wednesday evening the amounts of overdrawn balances in your accounts "Due to" other Federal Reserve Banks and also in your accounts •"Due from77 other Federal reserve banks. The overdrafts reported will be included in the weekly settlement, the figures given by the bank reporting an overdraft m its account "Due from7' being used. That is to SSLJ, a bank which acknowledges an overdraft in its account with another bank arising from its having issued drafts or made transfers to amounts m excess of the balance created by its remittances to the second bank, will be charged at the settlement with the amount which it acknowledges owing in its "Due from" account. This will of course be in addition to the amount which it now reports "Due to*7 the second bank in the account arising from remittances received from the latter. /'This plan, it is thought, will frequently eliminate the necessity of special transfers on the books of the gold settlement fund and will at the same time continue the present practice 183 FEDERAL RESERVE BULLETIN. of having charges made against the account of any bank with the fund only upon specific authorization from such bank. It is adopted as a tentative measure. The board will be glad to have your views or suggestions as regards the matter. " I t is not to be understood, however, that the adoption of this plan is intended to do away with transfers between banks on the books of the gold settlement fund. Such transfers should be made whenever occasion arises in which a transfer of this kind will facilitate the transaction of the reserve bank7s exchange or investment business and where the nature of the transaction between the banks is such that an immediate transfer of funds should be made without waiting for the weekly settlement/7 In proposing a plan for a gold-settlement fund such as that which is now in operation, the Preliminary Organization Committee pointed out, in a report of June, 1914, that, with the establishment of a central fund and weekly settlements, the normal clearing effected by the interchange of ordinary business transactions would render unnecessary the transfer of large sums of money in the payment of balances arising between Federal reserve banks. Although it is still very early to draw conclusions as to the extent to which this clearing has been operative, it is interesting to examine the figures now available, covering 10 weeks of operations, with a view to ascertaining the extent to which it has operated and to which balances between the different banks have served to extinguish each other. The following table gives the total clearings at each settlement from May 20 to July 22, inclusive, amounting in all to $231,996,000, and the balances at these clearings ^mounting to §50,496,000. Settlement of— May 20 May 27 June 3 . * . . June 10 June 17 June 24 Julvl JulyS July 15 July 22 1915. 1 Total clearings. Balances. $43,522,000 . 19,644,000 18,985,000 25,354,000 26,458,000 IS,419,000 21,3S9,000 35,011,000 17,192,000 17,022,000 $6,382,000 5,433,000 3,901,000 4,625,000 6,450,000 2,405,000 3,342,000 12,145,000 2,783,000 3,030,000 231,996,000 50,496,000 184 ADGDST 1,1915. FEDERAL RESERVE BULLETIN. Thus by the process of offsetting the amounts which each Federal reserve bank owes against the amount which the other banks owe it, the payment necessary to settle the obligations is only about 21.76 per cent of the total amount of the obligations; but the operations of the gold-settlement fund during the past 10 weeks show clearly that even this relatively small transfer of funds does not have to be made in full, as the net change in the ownership of the moneys comprising the fund, shown in the following table, has been only $12,054,000, or approximately 5.2 per cent of the total obligations which have been settled through the fund. Total net deposits. Boston Ne^rYork Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Total Balance, July 22, 1915. Increase. $3,230,000 $7,707,000 $4,477,000 15,000,000 9,651,000 3,500,000 171,000 2,630,000 4,256,000 1,626,000 2,320,000 2,812,000 492,000 260,000 1,304,000 1,044,000 5,770,000 9,329,000 3,559,000 3,220,000 1,657,000 1,000,000 1,187,000 is7,"666" , . . 3,480,000 3,611,000 131,000 3,160,000 3,698,000 538,000 2,830,000 1,017,000 46,400,000 46,400,000 12,054,000 Decrease. $5,349,000 3,329,000 1,563,000 1,813,000 12,054,000 Considering the relatively short time which the fund has been in operation and during which the process of normal clearing has been operative, this showing is very favorable, as for a longer period, say of a year, the percentage of money transfer necessary to settle the total obligations would probably be much smaller. The experience of the past 10 weeks indicates that a reserve bank which is a creditor at the clearings one week may be and often is a debtor the following week; and this suggests the conclusion that during a period of a year, in which the various factors affecting movements of money and exchange shall have completed a cycle, the relative change in the ownership of the fund will be even smaller in proportion to the total transactions, although just how small can more accurately be determined from the experience of the coming year. A continuation of the summary of transactions given in the last issue of the Bulletin follows, the form having been slightly changed in order to facilitate the inclusion of figures for gold withdrawals and transfers between Federal reserve banks. Gold settlement fund—Summary of transactions June 17,1915, to July 82,1915. Gold— Federal Reserve Bank Balance last statement, of— June 17,1915. Boston New York Philadelphia Cleveland Richmond.. • Atlanta Chicago S t Louis Kansas City Dallas.....' San Francisco Total $3,574,000 3,599 000 1.780 000 2,695000 2,416 000 1,749 000 5,013 000 1,869 000 1,286 000 2,514 000 1,622 000 1,253,000 29,370,000 Withdrawn. •: Settlement of June 24,1915. Transfers— Deposited. From— To— Net debits. Total debits. Total credits. 5200,000 , 8355,000 $2,841,000 $2,486,000 3,479,000 4,358,000 917,000 2,512,000 1,595,000 171,000 164,000 7,000 $600,000 717,000 610,000 107,000 417,000 249,000 168,000 528,000 3,982,000 3,454,000 2,928,000 3,172,000 339,000 156,000 183,666 562,000 1,198,000 305,000 951,000 166,000 26,000 570,000 $200,000 £46,666 1,170,000 200,000: 200,000 2,405,000 18,419,000 18,419,000 Net credits. 8879,000 244,000 636,000 646,000 2,405,000 Balance in fund after clearing, June 24, 1915. $3,419,000 4,478,000 863,000 3,288,000 2,309,000 1 581,000 4,485,000 2,113,000 1,103,000 3,150,000 2,268,000 1,483,000 30,540,000 AUGUST 1, 1915. 185 FEDERAL RESERVE BULLETIN. Gold settlement fund—Summary of transactions June 17,19151 to July ggt 1915—Continued. Gold. Federal Reserve Bank of— Balance last statement, June 24,1915. Boston 53,419,000 4,478,000 863,000 3,288,000 2,309,000 1,581,000 4,485,000 2,113,000 1,103,000 3,150,000 2,268,000 1,483,000 30,540,000 Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis.. Kansas City San Francisco Total Balance, last statement, July 1, 1915. Federal Reserve Bank of— Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas'City Dallas......... " " San Francisco Total Federal Reserve Bank of— Balance last statement, July 8,1915. Total Federal Reserve Bank of— Boston New Y o r k . . . . ; ; : ; ; ; ; Philadelphia Cleveland .... Richmond... Atlanta ""*" Chicago St. Louis" Minneapolis"..^ Deposited. Balance last statement, July 15, 1915. $480,000 — .. 1,300,000 Gold. Withdrawn. Settlement of July 1,1915. Net debits. 480,000 480,000 From— To— 3,342,000 21,389,000 Net debits. Total debits. $10,510,000 863,000 50,000 193,000 416,000 163,000 Transfers. Deposited. 500,000 60,000 320,000 "$2,~666"666" ****42O,"666" 150,000 2,000,000 6,450,000 5SS.01" San Francisco • Total 45,340,000 500,000 Net debits. $179,000 "1*629*666" Deposited. From— 1,208,000 To- *$i,'is3*666' $500,000 $183,000 1,060,000 1,000,000 1,560,000 1,183,000 4,000 552,000 645,000 44,000 $3,817,000 2,356,000 1,822,000 3,520,000 2,095,000 1,640,000 5,837,000 1,384,000 1,107,000 3,702,000 2,913,000 1,047,000 3,342,000 31,840,000 232,000 86,000 59,000 1,322,000 Net credits. $5,475,000 $2,657,000 7,508,000 4,871,000 207,000 63,000 1,215,000 264,000 361,000 11,465,000 8,131,000 2,080,000 271,000 210,000 244,000 613,000 249,000 701,000 571;000 35,011,000 12,145,000 Total debits. Total credits. "$333," 666' 575,000 2,783,000 Transfers. Gold.Withdrawn. 'MY.'.""'.'. 1,208,000 Total credits. $2,478,000 $3,445,000 5,144,000 4811,000 2,026,000 1,451,000 173,000 '831,000 951,000 1,106,000 522,000 506,000 46," 000* *i,*743*666' 2,971 000 1,228,000 132,000 1,949,000 1,817,000 24,000 121,000 460,000 . 618,000 489,000 933,000 5,000 245,000 $200,000 962,000 *i5,*666,'66o* 21,389,000 $398,000 Settlement of July 15,1915. To- From— $2,818,000 18,018,000 5,734,000 144,000 951,000 554,000 3,334,000 2,490,000 61,000 407f000 364,000 130,000 35,011,000 12,145,000 9,050 000 Withdrawn. Balance U fund after clearing, Net credits July 1,1915. Settlement of July 8,1915. $9,000,000 Gold. Total credits. $2,845,000 $3,243,000 7,170,000 4,598,000 3,095,000 3,054,000 123,000 355,000 680,000 706,000 403,000 462,000 3,399,000 4,721,000 729,000 2,830,000 2,101,000 269,000 273,000 438,000 990,000 134,000 779,000 3,000 47,000 Transfers. Deposited. Total debits. $450,000 §2,572,666 41,000 30,000 $7,641,000 6 475,000 884,000 4,351,000 3,434,000 1,511,000 . . 10,271,000 1,256,000 1,235,000 3,697,000 3,756,000 ""'$566*666* 829,000 To— 300,000 3,162,000 1,618,000 40,890,000 From— $1,000,000 . 53,817,000 . 2,356,000 . 1,822,000 3 520 000 . 2,095,000 . 1,640,000 5 837.000 . 1384,000 1 107 00n 3'702,000 . 2,913,000 . 1,047,000 31,840,000 Boston........ 16,474,000 New York !""." 846,000 Philadelphia 959,000 Cleveland 3,633,000 Richmond 2,959,000 Atlanta 1,447,000 Chicago " 13,968,000 St. Louis """. 968,000 Minneapolis...*"... 1,317,000 Dallas........ San Francisco.. " . . . Withdrawn. Transfers. 1,183,000 17,192,000 17,192,000 Net credits. $967,000 Total debits. Total credits. $3,256,000 $3,322,000" 3,962,000 5,955,000 2,739,000 1,526,000 604,000 699,000 772,000 1,394,000 486,000 510,000 2,146,000 1,204,000 1,254,000 1,655,000 118,000 166,000 48*666" 499,000 • 413,000 86,000 831,000 389,000 136,000 8,000 $1,213,000 95,000 622,000 24,000 942,000 3,030,000 17,022,000 17,022,000 $0,474,000 846,000 959,000 3,633,000 2,959,000 1,447,000 13,968,000 968,000 1,317,000 3,539,000 3,162,000 1,618,000 40,890,000 Balance in fund after clearing, July 15, 1915. 97,000 158,000 444,000 260,000 $7,641,000 6,475,000 884,000 4,351,000 3,434,000 1,511,000 10,271,000 1,256,000 1,235,000 3,697,000 3,756,000 829,000 2,783,000 45,340,000 658,000 155,000 64,000 Settlement of July 22,1915. Net debits. Balance in fund after clearing, July 8, 1915. Net credits. $66,000 1,993,000 Balance in fund after clearing, July 22, 1015. 442,000 128,000 $7,707,000 9,651,000 171,000 4,256,000 2,812,000 1,304,000 9,329,000 1,657,000 1,187,000 3,611,000 3,698,000 1,017,000 3,030,000 46,400,000 401,000 186 FEDERAL RESERVE BANK OF SAN FRANCISCO. Mr, John Perrin, chairman of the board of directors of the Federal Reserve Bank of San Francisco, delivered the following address before the convention of the National Association of Supervisors of State Banks, Oakland, Cal., May 28, 1915. A State banking department is an expression on the part of the State that the prosperity of its commerce and indus' try is of paramount material importance, and because o this, that supervision should be had of banking to make certain that banking methods will be such as to conduce most to the development and maintenance of that prosperity. If a surer safeguarding and a broader prosperity for that commerce and industry may be had through the development of one great banking system, unified under Federal control, the State's interest will obviously lie that way. Banking is not a separate business of itself. It is only an incidental part of the great commercial mechanism. Banks have no independent right of existence; their service to commerce is the sole measure of the justification of their being. It is therefore in the interest both of banks and of general business that the way should be opened for banks to render greatest service. To restrict them in the opportunity of sendee, whether by limitation of legitimate activity or by debarring from assured support, is to handicap commerce. Banks are of two general classes, commercial and savings. This discussion will refer to commercial banks, and I trust that I may be pardoned if I ask this gathering of banking experts to bear with me for indulging in some very elementary statements; these will be preliminary to certain conclusions which I hope may not seem illogical. The transactions of a retail merchant are in far larger proportion money transactions than are those of a bank. The peanut vendor's transactions, for instance, are onehalf peanuts and one-half money. In summing up the total of a bank's transactions—receiving deposits, paying checks, making loans, receiving payment of loans—it is found that not over one-tenth are actual money transactions. In more than nine-tenths no money is used, only promises to pay money. One having made a deposit may say, " I have money in the bank." That is not the fact. In the first place, very little money is deposited. More than 90 per cent of the funds offered for deposit are checks—promises to pay money. In the second place, whether money or checks are used, a deposit is simply the purchase of the right to draw on the bank. Money or checks deposited become the property of the bank. The depositor has no money in the bank, but has bought the bank's promise to pay money. AUGUST 1, PEDEKAL RESERVE BULLETIN, Nor does a bank lend money. The truth of this statement is easily illustrated. Suppose that .A and B are customers of the same bank, and that A owes B §1,000. A negotiates a loan from the bank, receives 50 $20 gold pieces as the proceeds of his loan, and cancels his debt to B by paying this gold to him. B then redeposits these gold pieces in the same bank. Can it be contended that the bank has loaned the gold pieces to A? It still has his note for $1,000 running at interest, and it also has the gold pieces in its possession.; AVhat really has happened is that A's promise to pay $1,000 has been shifted from B to the bank. The money used in the transaction was simply the instrument for transferring the credit. A check or a simple entry on the books of the bank would have been simpler and safer and would have served the same end. If a bank does not lend money, what is the real nature of a loan transaction? It is this: A borrower gives to the bank his promise to pay money at a future date and receives in exchange the bank's promise to pay money on demand. It is an exchange of promises to pay money. The bank's promise is usually given in the form of a deposit credit and the borrower thereby acquires the same right to draw upon the bank for any part or all of the amount as if he had bought the right to draw with a deposit of gold or checks. What I have sought to make clear is that a bank's business deals very little with money but to the extent of more than 90 per cent deals with promises to pay money, which is another way of describing credit—the wonderful and economical device which has made large commerce possible, A bank keeps in money only such small percentage of its deposit liabilities as experience demonstrates is necessary to enable it to make good its promises to pay depositors in money when they demand it. This is its money reserve. A BANK'S FUNCTION. A bank's function is to gather the funds temporarily unemployed and lend them for short periods to those who can use them profitably. Thus, half a dozen people, each having a temporary surplus of $100, would, through the instrumentality of the bank, provide the grain dealer with funds to buy a carload of wheat. By selling to the mill the grain dealer would be enabled to repay such a temporary advance. The bank is the employment agency for idle funds. An ideal employment agency for men would place every man in that employment in which his efforts would be most productive. There would be no unemployment and there would be maximum product. In like manner that banking machinery would constitute the best employment agency for money which would keep all available funds uninterruptedly employed in the most productive commerce. It seems a fair statement, then, that the fundamental purpose of a commercial banking system should be to bring all temporarily idle funds into the most productive use in such a way as to most fully safeguard commerce against interruption. DEFECT IN FORMER SYSTEM. What has been the defect in our banking system? Of all forms of money there is a total of nearly §4,000,000,000 in this country, including that in the United States Treasury, in the pockets of the people, and in the vaults of banks. The deposit liabilities of banks aggregate $18,500,000,000. Obviously, if the banks had all the money in the country they could not pay one-quarter of their deposits in money if all depositors made simultaneous demand. Banks actually hold only about $1,600,000,000 of money in all forms, so as a matter of fact banks could not pay 10 per cent in money if all depositors should demand it at the same time. The banks have loans, however, of $20,000,000,000. These have been mad^ to the people, and really on behalf of the people, being made through banks as their employment agencies for idle funds. Frightened depositors clamoring for payment in money, which they wish to hoard, in effect demand that their neighbors, to whom $20,000,000,000 have been loaned, shall stop the processes of production and commercial activity. The lack of reason is clear, but panic is a temporary paralysis of reasoning power. In a threatening situation the law of self-preservation has impelled each bank to try to fortify itself by adding to its stock of money. This it would try to do by calling for payment of loans and by withdrawing in money the amounts due to it from other banks. Once such a process has been started a general scramble has ensued with cumulative violence. There was no way of quickly or importantly increasing the volume of money, and the total amount in the country could not satisfy such a demand. The inevitable result has been that banks have ceased making payments in money and have discontinued other major functions until the apprehensions of depositors subsided. The struggle of each individual bank wa3 a perfectly natural one. It regarded its obligations as sacred. It would move Heaven and earth to avoid default. But no bank could fortify itself by adding to its stock of money except by correpondingly weakening other banks. Each was for itself against all the rest. Cooperation was lacking. We had no banking system, merely a vast number of individual units. The tendency to mutual destruction under stress has been the main defect of our banking. The losses through disruption of the processes of production and trade by such a panic as that of 1907 would amount to billions. Nothing has been of greater commercial importance than to find and adopt the best method of averting such crises. [E REMEDY. The difficulty has not been confined to our own country, but we have been the last of all the commercial countries to apply the remedy. The principle of the remedy is very simple, although not recognized until about the middle of the last century when England and France first came to understand it. Since then practically every commercial 2098—15 3 is1; FEDERAL RESERVE BULLETIN. AUGUST 1,1915. country has incorporated in one form or another the same principle into its banking, the Federal reserve act giving it to this country. The remedy lies in gathering into a central agency or agencies a portion of the money reserves of the banks, to be used for their common protection, in order that they may continuously perform their functions and thus safeguard general business. Whether under governmental direction, as in some countries, or under private direction, as in others, whether voluntary or by legal requirement, such an agency with large money reserves operating not primarily for profit, but for protection, achieves the same economic result. Obviously no solvent bank need fear any demands made for payment if it can at any time convert its loans into means with which to pay. The maintenance of the ability to pay eliminates depostors' apprehensions. The certainty of replenishing its paying power eliminates the bank's fears. The cause of panic is thus removed. A FEDERAL RESERVE BANK. Stripped of statutory specification a Federal reserve bank is a cooperative agency, in which the member banks, for common protection, pool about one-third of the money previously held in their vaults. If a member bank becomes inadvertently overloaned, so that its money reserve is too low, it sells a portion of its shortly maturing loans to this cooperative agency, the Federal reserve bank. The member bank is thereby kept in easy condition and enabled to render fullest service to its community without the disastrous interruptions hitherto suffered. The payment of the loans at maturity replenishes the money of the Federal reserve bank so that like service may be performed for other banks. If the offering of loans for sale becomes too insistent, the Federal reserve bank imposes a check by advancing the rates it charges. If the demand is extraordinary in one district, the Federal reserve banks of the other districts share the load. In this way the varying seasonal or local loads are distributed over the broad base of the combined reserves of all the Federal reserve banks. The member banks are thus linked into a real system guided by the broad general policies of the Federal Reserve Board, which are determined not by local considerations but by a national and international view. FEDERAL RESERVE NOTES. To assure greatest power to help and consequently the greatest general stability, it is necessary for the Federal reserve bank to avoid important drain upon its gold, which is the final reserve money. This is accomplished by the use of Federal reserve notes, which are in fact simply the Federal reserve bank's promises to pay money, indorsed by the Government. They serve every purpose of money in ordinary trade transactions. The mechanical operation is simple. A member bank sells loans to the Federal reserve bank, thereby establishing a deposit credit. Against this it withdraws Federal 188 FEDERAL BESERVE BULLETIN, reserve notes, thus receiving means to pay its debts. The Federal reserve notes drift back anji are presented to the Federal reserve bank for redemption through deposit or otherwise. The means for their payment are provided by the payment of maturing loans, which the Federal reserve bank has bought. The process is in effect an exchange, through the instrumentality of the Federal reserve bank, of the promissory note of the member bank's customer which will not pass current for Federal reserve notes which pass current. Such a currency appears only in response to a commercial demand—a demand upon a member bank for payment of money. When such bank notes are presented for redemption to the Federal reserve bank, they are paid and cease to exist just as paid checks cease to exist. The volume of such a currency automatically adjusts itself to trade requirements, there is no redundancy, there is no scarcity, A currency famine is inconceivable. ECONOMY OF ELASTIC CURRENCY. The way in which the use of such a currency protects the gold reserve from dispersion, and introduces into money transactions the same element of economy as the check, may be illustrated by an extreme case: Assume that a bank has deposits of $1,000,000 with $250,000 money reserve. Suppose it owed one depositor $300,000 which he had occasion to pay to another individual. If he sought to draw $300,000 of gold to make the payment, he would ''break " the bank, that is, though perfectly solvent, the bank could not make good its promise to that depositor to pay his deposit in money on demand. If, however, he should take a cashier's check for $300,000 and the one to whom he transferred it should return it to the issuing bank for deposit, the transfer would not occasion the slightest disturbance of the bank's money reserve. Federal reserve notes are in essence cashier's checks of the Federal reserve bank in currency denominations. They perform the service of transferring credit in the same economical way as does a check, without disturbing the reserve. Payments in money, hitherto, inevitably depleted the money reserve, and such drain could not proceed far without gravest financial disturbance. ADVANTAGE OF UNIFIED SYSTEM. A great tendency to uniformity of banking practice' throughout the country would obviously result if all banks were parts of one great system. This would be of some incidental convenience, but is not vital. The fundamentally important reason for unification is that the larger the proportion of banking reserves centralized in a reserve agency the higher the ratio of potential fortification of business to its total volume. Only through the issue of Federal reserve notes can there be any speedy or important increase in the total volume of our currency, which must meet the requirements for the use of all banks, State and National, and the requirements for the use of all the people. In a crisis, when a vast volume of payments in money is required, the AUGUST l, 1015, amount of notes available for issue will be exactly in proportion to the amount of the gold reserve of the Federal reserve banks. To illustrate: $400,000,000 gold constitutes the required 40 per cent reserve against $1,000,000,000 Federal reserve notes; $800,000,000 would provide a like proportion of reserve against $2,000,000,000 Federal reserve notes. Clearly, to link all banks into one system, thereby increasing correspondingly the gold reserve centralized in the reserve-holding and note-issuing agency, would add to the security of all banks, and, what is more vital, would give proportionately greater insurance to the stability of the entire business activities of the whole people. If every citizen were trained as a soldier, the potential defense would be the entire physical force of a nation. If only one-fourth of the citizens were so trained, they might fight with equal valor, but the power of defense would be only one-fourth. Some have contended that crises could be averted by increasing the requirement of money reserves. For individual banks to have gold reserves in large enough proportion to be always adequate for all demands would result in a tremendous restriction of commerce through the necessary reduction in loans. But we have found to our sorrow that only slight inadequacy of reserves has involved incredible disaster. In the hands of an individual bank gold will pay debts only to its par value. Experience, however, has demonstrated the fact that the credit of a great, strong reserve-holding agency will pass current instead of money, so that one dollar of gold in possession of a Federal reserve bank is a basis for providing a member bank with means of settling two and a half dollars of debt. In this lies the extraordinary power which a Federal reserve bank has for fortifying its member banks. It might be said that as the mythical Antaeus renewed his strength by touching Mother Earth, so a member bank renews its strength by "touching" the Federal reserve bank. Under our past banking methods money in vault and balances with other banks have constituted the banking reserves. Under the Federal reserve system the chief reserves of member banks will be the rediscountable paper in their portfolios, and the day will doubtless come when, as in other countries, the law will not specify any stated proportion of money reserves. Nonmember State banks can not safely operate thus, since they would have no unfailing place of rediscount, the Federal reserve banks not being open to them even through the medium of correspondent member banks. No reserve agency but one under Federal authority would have conferred upon it this magic power of converting one dollar of gold into means of paying two and a half dollars of debt. The opportunity for financial life insurance through the fortification by a Federal reserve bank and the selfish desire for profit, which is the one constant factor in all business, will be potent influences to induce State banks to become members of the Federal reserve system. As the importance and bearing of these factors become fully under- AUGUST 1,1915. FEDEEAL RESEBVE BULLETIN. stood, it seems reasonable to expect that a steadily increasing proportion of State banks will become constituent parts of a system which will steadily grow in strength and unification, its members exercising all functions incident to banking; and it seems also true that State banks will ultimately be influenced to such participation both by State authority and by public opinion as it becomes more and more fully realized that the security and prosperity of the State's commerce will be thereby best attained. It was a wonderful achievement to enact the Federal reserve act. Legislation under our form of government is necessarily a series of compromises. It is no ground for disapproval of the act that certain features have not been as carefully worked out as in the laws of some States. If true, that fact offers a great opportunity for perfecting aid from those skilled through State experience. The point of paramount importance is that the Federal reserve act has incorporated into our banking the fundamentally vital principles of centralized reserves and credit currency. Benefits will inure incidentally to banks, but in largest sense will flow to general business in every State through the new and broader opportunities and through the added security. There is no proper ground for contention between State banking departments and the Federal reserve system. The fundamental purpose of both is to attain the greatest security and prosperity of industry and commerce. THE WORK OF FEDERAL RESERVE BANKS. Mr. D. Ct Wills, chairman of the board, Federal Reserve Bank of Cleveland, delivered the following address on June 2, 1915, at Lexington, Ky.: The officers and directors of the Federal Eeserve Bank of Cleveland have been more than pleased with the cooperation received from the member banks in this district. In such a departure from the plan and methods under which we have been accustomed to operate, there was bound to be some hesitation and inquiry. The banking business itself develops, in those who are charged with its management, a tendency not to accept new propositions at their face value. This is proper. One of l i e strongest recommendations in determining credit is that a business has been established and in existence for a considerable length of time. In other words, it is a point in favor of any business or proposition if it has been in existence long enough to prove its worth. In view of this necessary attitude of bankers in their daily dealings with their customers, it is surprising that there has been so little antagonism or apathy toward the new Federal reserve bank system. However, the Federal reserve bank act, while new in America, represents in its fundamentals the experience of the ages applied to the needs of this country, and its principles generally are those of scientific banking. The act is not perfect, but it has 189 been estimated by economists and practical bankers to be from 75 to 90 per cent good. That being the case, it deserves a thorough trial by those whom it was intended to benefit. Our attitude toward any proposition is usually measured by our understanding and interest. To understand a matter involves information, which information must be accurate and complete, else there is misunderstanding. Our interest has more sides to it, and may be selfish and shortsighted. In deciding- how much we are interested or where our real interest lies, we may be mistaken and narrow. Even with all the information at hand, we may not recognize our true course; blessings and benefits frequently wear a disguise. These observations are made to introduce a discussion to-day of the Federal reserve system with special reference to its operation in district No. 4. Some bankers are concluding that the new system is inadequate and not applicable to conditions in this country, and especially not useful or beneficial to the particular banker offering the objection. This criticism of the system is made, to some extent at least, in the home of its friends, or those who should be its friends. Those of us who have to do with the management of this bank realize that this criticism is sincere and honest. We appreciate it is not wanton. Yet, we are just as sure that it is bound to disappear when the understanding is increased, and when it is shown that the new system is for the better interests of the banker as well as the business man. Now, what is the purpose of the Federal reserve act?, It contemplates in the membership of the Federal reserve banks all the well-managed banks in the United States doing a commercial business. It was not intended as a haven for a bank with the bulk of its deposits payable on demand and the bulk of its assets-in permanent loans. Nor was it intended to furnish facilities to a bank whose owners and managers were using the capital, as well as the amount intrusted to them by depositors, in the flotation of speculative enterprises, in which the owners and man-, agers are personally interested. It was not intended to place its stamp of approval on banking methods that would include the making of loans to borrowers without obtaining accurate and complete information on the financial condition of* those borrowers, or the continuous renewal of the paper of a large number of borrowers from year to year, without even attempting to ob'tain an occasional payment and to insure the solvency of these borrowers and test their ability and willingness to pay. Several stated objections to the system have come to our notice, and the ones most frequently urged appear to be aB follows: 1. Keserve balances now compulsory at the Federal reserve bank from its members do not bear interest, entailing a loss to member banks of revenue previously received. 2. The law and regulations are such that banks, especially country banks and institutions in small towns, have no eligible paper. 190 FEDERAL RESERVE BULLETIN. 3. The intention to have member banks collect items on themselves at par deprives these banks of an exchange income previously received without offsetting advantage. 4. The requirement that member banks obtain in writing statements from all their important borrowers is a hardship which may entail the loss of trade, and while practicable in larger centers can not be followed in the smaller centers. Answering objection No. 1, as to interest on reserve de- posits.—The reduction of reserves from 25 per cent to 15 per cent in reserve cities, and from 15 per cent to 12 per cent in other communities, means that the additional loanable funds will produce a revenue equal to, if not exceeding the amount of interest previously received on reserve balances with correspondents. This calculation is based on the total amount of reserve balance required to be carried in the Federal reserve bank at the end of the three-year period. For instance, at the end of three years a bank with $100,000 on deposit will carry with this bank $5,000; 2£ per cent on this amount is $125. The reduction in reserve—3 per cent on $100,000—is $3,000; the interest on §2,000 at 5 per cent is $150. The absolute ability to obtain currency in any emergency enables a bank under the new system to operate safely without excess reserve. Heretofore, banks realizing that in a crisis they might have to depend on their own resources, carried excess reserve. It should be noted that the 5 per cent reserve requirement for savings and time deposits is an additional profitproducing feature of the new act intended to benefit . especially the banker in the smaller community. The May circular issued by the National City Bank of New York contains the following interesting paragraph on the payment of interest on balances by a central reserve institution: *' There is no dissent the world over, in scientific opinion, from the conclusion that a central institution which carries the final reserves of the country, and upon which the banking system as a whole relies for ready cash, should not pay . interest on deposits. The reason is that the payment of interest compels a bank to actively employ a larger proportion of its resources than is advisable under such responsibilities. On the other hand, the maintenance of large reserves by a central institution, together with the power of note issue, enables the member banks to carry smaller reserves than otherwise would be safe, so that they actually lose nothing in earning power by supporting a central institution." Answering objection No, 2, as to eligible paper.—Under date of March 31,1915, the Federal Reserve Bank of Cleveland sent to its members the following letter: "Through correspondence and interviews, I have become convinced that a considerable number of bankers are still under the impression that the only kind of paper eligible for rediscount at the Federal reserve bank, is what is known as 'business paper' given by a buyer to a seller "In order that you may not be under any misapprehension, I wish to assure you that the following kinds of notes AUGUST l, 1915. are eligible if conforming to the credit requirements of the Federal Reserve Board, provided the purpose of the loans is not permanent or speculative: '(1) Single name paper of your own customers, who may be tradesmen, manufacturers, jobbers, storekeepers, etc, "(2) Single name paper of your farmer depositors. "(3) Paper similar to above, but containing one or more accommodation indorsements as additional security, "(4) Commercial paper as sold by note brokers, "(5) Business notes given by a buyer to a seller in settlement of a commercial'operation. '(6) Accepted drafts drawn on a consignee by a shipper of merchandise. !< (7) Notes secured by warehouse receipts for staple agricultural products or other goods, wares, or merchandise. "We can also purchase with the indorsement of member banks: (a) Bankers' acceptances based on the importation or exportation of goods, and (6) warrants of cities, towns, and communities, when conforming with Circular No. 7 of the Federal Reserve Board." This letter, in our opinion, states in a concrete way what is possible under the broad interpretation of the act by the Federal Reserve Board. Surely any well-managed bank ought to have sufficient eligible paper under one or all of these holdings to avail itself of the rediscounting facilities of the Federal reserve bank. A number of ways suggest themselves for gradually increasing the amount of eligible paper; for instance, if a part of a borrower's loan is to pay for a permanent investment and part for a commercial, industrial, or agricultural current operation, the obligation can be divided into two notes. Borrowers whose asseta are real estate, who have been carrying their loans for a long period without payment, and who can liquidate their obligations only through the sale of their real estate can be induced and requested to place a lien on the property and pay off the obligation. While primarily renewals are not recognized as strictly commercial paper, yet, under the ruling of the Board, a note is prima facie a commercial one if the quick assets of the borrower show a sufficient margin over his current liabilities; and in such case a renewal is acceptable, since there are commercial and industrial transactions that require a longer period than ninety days to finish the operation, and under certain conditions six months might not be long enough for a farmer to raise and market a crop orfinishthe feeding, fattening, and disposing of his live stock. Why the law insists on liquid paper and that loans must have a definite maturity was illustrated a short time ago in our district. It was discovered that the managing officer of a member bank had victimized his bank almost to the extent of wiping out its entire surplus. The information became public, and a run started. When an attempt was made to realize or collect on a portion of the bank's assets it was found that 40 per cent of the loans were drawn on demand and have been carried continuously without asking for payments except aa borrowers offered to pay, that time notes were nearly all drawn for long periods, AUGUST 1,1915. FEDERAL KESERYE BULLETIN. and that the paper of early maturities was inconsiderable. It was found, too, that not a single record was kept of the responsibility of the borrowers, the information being solely in the hands of the cashier who had gone wrong. The directors, when questioned as to the responsibility of certain debtors, did not agree on the worth of any single man and often did not know which Jones it was that drew the note. The ability of that bank to cope with the emergency and protect the interests of its depositors and shareholders was at a minimum, and I am sure that banks in that neighborhood will not hereafter require much explanation as to the necessity of having realizable assets to meet liabilities that are subject to demand and payment at any time. 191 compensate for the loss of exchange on par checks. One of the Federal reserve banks has already announced to Us members that it has employed at its expense a committee of experts for the purpose of inquiring into and analyzing the statements and methods of a number of typical banks for the purpose of ascertaining whether the revenues or profits may be increased and the expenses and cost diminished. The results of this investigation will probably be available to member banks throughout the whole system. If not, the Federal Reserve Bank of Cleveland will, I think, make a similar investigation for the benefit of its own members. Answering objection No. 4t as to statements of borrow- ers.—I think it is the experience of every banker that his Answering objection No. 3, as to check collection and customers and depositors often cooperate with him to a exchange charges.—The immediate effect of a bank's col-larger extent than he estimated. I do not believe any lecting at par checks drawn on itself is a loss of exchange. borrower who is entitled to credit will refrain from placI am confident, however, that the country bank's portion ing in the hands of his banker information in order that of the benefits to be derived from a universal doing away the banker may determine the borrower's right to credit. with exchange and the collection of checks at cost will The following paragraph is from a recent folder of the more than offset this apparent immediate disadvantage. Credit Men's Association: Having a check on Dry Ridge pass current in district No. 4, "Good credit in the markets of the world enables the the same as a check on Cincinnati, Cleveland, or Pitts- merchant to add to his ability to do business. It gives burgh, will insure at least that no funds will be transferred him the use of enlarged capital, thus enabling him to carry out of the community to par centers, and concerns or a more complete stock, increase his sales, and magnify hia individuals that have been accustomed to intrust the profits. A merchant's capital is the sum of his net available smaller and unprofitable portion of their business to the resources plus his credit. The giver of credit is a contribulocal bank and their larger and more remunerative trade tor of capital and becomes, in a certain sense, a partner of to a bank in a center in order to have their checks pass at the debtor and as such has a perfect right to .complete par may conclude to do the bulk of their business with information of the debtor's condition at all times. local institutions. "Credit is given a merchant because of the confidence Checks now settle 95 per cent of all obligations in this reposed in him. Requesting information when credit fe country; but in developing its use as rapidly as we have— asked is not a reflection on one's character, honesty, or far more rapidly and extensively than in any other coun- business ability but is done to secure information to enable try—many difficulties have been encountered, and many business to be conducted intelligently. evils and bad practices have arisen. Mr. McKay, perhaps "A merchant who desires to serve his own best mterests the foremost practical authority on this subject, sum- shoUld recognize that his most valuable possession apart from marized these evils as follows at the recent conference of his actual assets, is a sound, substantial, and unquestioned reputation as a credit risk, and that, under the prevailing reserve city bankers: conditions and demands of business, the most effective "First. Excessive exchange charges. "Second. Absorption of exchange charges by the col- and eminently the best way to prove his basis for credit is to be willing to submit a statement of his financial lecting banks. "Third. Indirect routing of checks to avoid exchange condition." In an interview with the president of an Ohio bank, most charges, chiefly caused by clearing-house rules governing of whose business is with farmers, we were informed a few exchange charges. "Fourth. The maintenance of reserve balances with days ago that he had encountered very little difficulty in banks for the sole purpose of getting items on which to obtaining written statements from those who were parties to his loans. He stated that when the regulations of the charge exchange. "Fifth. The carrying of compensating balances with Federal Reserve Board came out he recognized that they collecting banks solely for the purpose of obtaining par were not only sound but workable and immediately began t he education of his borrowers by requesting them to territory. furnish him with statements. He had received over 100 "Sixth. Paying interest on uncollected funds. statements, practically all of which confirmed his esti"Seventh. Paying checks drawn against uncollected mate of the worth of the borrowers. In one or two unds. instances, however, he was surprised to find unrecorded "Eighth. Padding of reserves with items in transit." mortgn£?s and borrowings in neighboring banks, of which The Federal reserve bank, too, will probably offer he ktr;w nothing. The probable saving of loss in these another service to its member banks, which ought to 192 FEDERAL RESERVE BULLETIN. instances justified him, in his opinion, in obtaining the statements. He also noted with satisfaction the cooperation given by the borrowers themselves, many of whom for the first time had made an accurate schedule of their assets and liabilities; in all cases he furnished a^opy of the statement to them and requested that it be kept and used again by the borrowers for comparison when they filed another statement at the next period. It eeems hardly possible that the experience of this banker in a farming district is any different than the experience will be of any banker who will sincerely and intelligently test this requirement. While there is only part of the State of Kentucky belonging to district No. 4, and while the amount of the capital owned and reserve deposits received from these banks is relatively small compared with the States of Ohio and Pennsylvania, yet, according to our estimate of the situation, the Federal Reserve Bank of Cleveland ought to be particularly helpful to the banks of northern Kentucky. Our attention has been drawn to this district for a number of reasons. It is farthest away from the location of the bank, and has problems and difficulties that differ from those of the northern banks. Kentucky, too, is well represented on our board of directors in the persons of Senator Combs and Mr. Patrick, and I have never yet seen a man from Kentucky who did not seek the advancement of his State and call attention to its virtues and possibilities. Our Kentucky directors are no exception. The State of Kentucky owns 18 per cent of the capital stock of this bank and is represented in 3 per cent of its deposits, while of the $700,000 loaned to member banks, $315,000 is loaned to banks in Kentucky. This indicates the willingness of the Federal Reserve Bank of Cleveland to furnish facilities for the special condition existing at this time in this part of the district. In order that the system may be as fully a success as the framers of the act intended, and in order to mobilize gold reserves of sufficient size to protect the credit of this country against any emergency, it is essential that State banks become members. The regulations of the Federal Reserve Board on tho admission of State banks will shortly be issued. I have seen the tentative circular, and the requirements are going to be so liberal that every bank should give the matter prompt consideration; in my opinion the way has been opened for all well-managed commercial State banks to join. The great benefits to be derived by all banks from having the majority of the banks of the country in the system justify the liberal terms to be offered the State banks. Their joining will be hastened by a work of indorsement from the banks already in the system. AUGUST 1,1915. ESTABLISHMENT OF INTRADISTRICT CLEARANCE SYSTEM. On July 9 the Federal Reserve Board transmitted to the Federal reserve banks the following letter of inquiry regarding the status of the intradistrict clearance system, already established by the several banks, as set forth in the Federal Reserve Bulletin for May, 1915 (pp. 6-9): The Federal Reserve Board desires to prepare for the August 1 Bulletin a brief statement of the progress which has been made under the voluntary clearing plan in the various districts, so as to show, say, as of July 16 ta 20, the situation in the various districts. In order to assist us in formulating data, we shall be glad if you will respond to the following questions: 1. Number of banks which have come in, 2. Percentage of capital in your bank repre,sented by the assenting banks. 3. What is the average number of items cleared daily ? 4. What do you estimate cost directly chargeable to this work ? 5. Percentage of clearing banks showing overdrafts (exhaustion of balances). 6. Number of men employed in your transit department. 7. How is the voluntary plan working, in your estimation % 8. Wu%it be necessary or desirable that the board issue a mandatory order before the work can be successfully carried through ? 9. Is the clearing of checks accepted as a valuable service by your members, or is there still much opposition to it ? 10. Is it gaining in friends ? The answers to the first six questions contained in the list are susceptible of tabulation, and the substance of them is set forth as follows: AUGUST 1,1015. 193 FEDERAL RESEHVE BULLETIN. Questions sent to and answers receivedfrom each Federal reserve bank regarding the working of the intradistrict clearance system. Question. Boston. 1. What number of banks have come New York. 4,976 cleared daily? 4. What do you esti- 2 clerks whose sal- About 59,100, based mate cost directly aries aggregate upon an estichargeable to this Sl,500p.a. This mated daily cost of $25.30. This is exclusive of work? printing, station- estimate includes ery, machines, only salaries of and overhead ex- clerks working directly upon colpense. lections, a l s o postage and stationery, but is exclusive of the cost of superintendence, rent, or other overhead charges. •5 ^ V*hat TDercentaco of 195 clearing banks show overdrafts? c G Givo numb or of men o employed in your transit d e p a r t ment. . • .; 1 "Whiit S9 71. 55 17 45 44.3. 1,713 3,070 About 195.* 4,9771 , Salaries, S5,SS0 p . a.;postage,Sl,950 p . a.; total, ?7,S30 p. a., exclusive of stationery, the cost of machines, and of erecting and equipping special gallery to accommodate department. , 7.2 Estimated yearly direct cost Salaries, ?2,SS0 p . Estimated total including a.; postage, S900 cost, p. a.; stationery, salaries, postage, postage per day, $300 p. a.; total, and percentage of 84,0$0 p . a., ex- rent, light, etc., S4.43. clusis*e of book- Sl,200p.a. keeping and overhead charges. 35,815.38; averago 83 0.5 1 bank.* 6 men exclusively, 4, and occasional 4 with some assist- services of 3 othance from filing ers. department and ofiice boys. Kansas City. Minneapolis. Two-thirds of time of i man. Dallas. San Francisco. 366 1 ' 106..! 951 93 110. 90 TinTnbcr of banks have come in? '2 What nercMitape of capital in the Federal reserve bank is represented by the a s s e n t i n g banks? 3. What is the average. number of items cleared daily? 120 St. Louis. Chicago. . Question. Atlanta. 46.7 in? 2. What percentage of 27... capital in the Federal reserve bank is represented by the a s s e n t i n g banks? 3. What is the average 1,200 Richmond. Cleveland. 125 115 50 Philadelphia. 44 100 31 40. • 1.156, including No data.* items on Dallas passed through the Dallas clear• ing-house e x changes. cost 32,256 p . a., viz: No data. 6 Estimated cost Salary of transit Estimated $24,000 p . a., inSalary manager 515,000 p. a., ex- man, 32,000 p. a., clusive of admin- who also has cluding pro-rata transit departistration expense. charge of the rent, postage, de- m e n t , Sl,500; clerk, 3600; stamail. Estimate preciation, etc. tionery, 372 (estidoes not include mated) ; excess cost of printing, postage, SS4., stationery, etc. cost 4. What do vou esti- Estimated mate cost directly $30,000 p. a., estichargeable lo this mated on the basis of § cent per work? item for Chicago banks, 1 cent per item for suburban banks, and 1§ cents per item for out of town banks. 4g« v. vviuib percentage oi clearing banks show overdrafts? 6. Give number of men 7 regularly and 4 14 employed in your extra about 2 transit depart- hours each afterment. noon. 5,714 About 3 No data. 5 1 overdraft 2 1; see answer to question 4. 11; some perform- 2 men; see also No data.* ing duties out- answer to quesside the transit tion 4. . department. i High, 6,517 on July 7; low, 2,735 on June 15. * All outside of Atlanta. a On a basis of 7 days' operations. * Covered by New York exchange. * System to commence operations Aug. 1. * On a basis of 4 days' operations. 194 FEDERAL RESERVE BULLETIN. Not all the banks have submitted full responses to questions 7, S, 9, and 10, and some while replying to these questions, have not furnished a definite expression of opinion. The substance of the answers can, however, be briefly stated. On the question of a mandatory system as opposed to a nonmandatory, reports show that 11 districts now have nonmandatory, and one a mandatory system of check collections. Of those districts whose S3Tstem is not now mandatory, three distinctly state that they believe the introduction of a mandatory system would be undesirable; while seven express themselves, in some cases with more or less qualification, in favor of the introduction of a mandatory system, most of the banks regarding this as necessary if the plan is to become fully effective. Among the expressions on this subject are the following, each paragraph being the expression of one bank: " I t will certainly be necessary for the Board to issue a mandatory order before even the present plan would be of sufficient scope to reach a moderate point of efficiemrf. Many of the banks have indicated to us that they would not come in unless compelled to do so, and would not accept the mandatory order kindly by reason of the great loss of exchange/' "We think it will be necessary" (i. e., for the Board to issue a mandatory order before the work can be successfully carried through) "before all the banks join the system, but working along the present plan, I believe that we can in time secure at least 50 per cent of them," t "* * * it would seem that, if the system is to be a success, the Board will have to issue a mandatory order requiring all member banks to clear through the Federal reserve banks of their respective districts. It will be impossible for Federal reserve banks to enter into relations with each other for the clearing of checks on their respective members untu all the members of oacn district are members of the clearing system of that particular . district." a* * * t | 10 v o ) u n tary collection system should bo given about six months more to operate before deciding as to whether it is successful or not. Banks which have joined it are now advertising the fact that checks on ACGUST 1, 1915. them are par in —. We believe this action will oblige other banks to join the collection system, and that economic pressure will come from depositors of the banks and from the merchants who now have to pay exchange charges which will influence more banks to assent to the collection system." "A great many banks have written us that under no circumstances would they join the system until it is made compulsory, and all banks come in at the same time. It would appear, therefore, that it will be necessary that the Board issue a mandatory order before the work could be carried through successfully." " I feel that only in the presence of a mandatory regulation will we be able successfully to give effect to the plan." " I t may be necessary, and, in my opinion, will likely be desirable, that the Board make the plan compulsory before success is assured." "We believe that it will be necessary that the Board issue a mandatory order compelling banks to join the check-collection system in order that the member banks may realize the full benefit of the arrangement. Member banks generally expected to be compelled to join the check-collection system, and when the voluntary plan was offered a large majority preferred to defer joining until they could observe the effects of the operation of the plan with such banks as decided to join. We believe that if the plan were made mandatory it would in a reasonable time commend itself to our member banks, but for the present the fear of the necessity of maintaining excess balances, on which no interest is allowed, and the disinclination -to relinquish exchange profits deters many country banks from entering the voluntary system." . "We have been, and are, of the decided opinion that the Federal Reserve Board should issue a mandatory order compelling all member banks in each district to become clearing members, thus extending the facilities for the clearance of checks to the entire field of industrial and commercial activities, as we believe was contemplated by the Congress in the enactment of the Federal reserve act." The following is a list of the various member banks which have joined the intradistrict clearance system. The system did not take effect at the same date in all districts, and it has not been practicable to correct the lists up to the same date for all. All banks included in the several districts up to July 1, 1915, are, AUGUST 1, 1915. however, listed below, while in some districts additional banks have joined the system, notwithstanding that their names do not appear in the attached list, and a very few of those listed may have withdrawn. The several States in each district have been arranged alphabetically, and the cities in which the clearing banks are located have then been alphabetically grouped. Where more than one bank in a given city or town is a member of the system, such banks are then grouped alphabetically. The latest returns show that the clearing system comprises a total of 2,373 banks, taking all districts as an aggregate* List of member tanks which have joined ike collection system of the Federal reserve banks. DISTRICT No. 1. Name of bank. City or town. Transit number. CONNECTICUT. First Bridgeport National.... Clinton National Danbury National Greenwich National First National do 51-32 51-270 51-125 51-146 51-9 51-235 First National 52-168 First National Bridgeport Clinton Danbury Greenwich New Haven Suffield 53-284 5-32 5-56 5-39 5-12 5-13 5-2 5-3 5-107 MAINE. Boothbay Harbor MASSACHUSETTS. Attleboro Boston Do Do Do Do Do Do Do Commercial National First National ... Fourth-Atlantic National Merchants National National Union National Old Boston National Peoples National Bank -of Roxbury. Second National Wobster & Atlas National.... Broadway National Cape Ann National First National Hudson National Park National Hopkinton National Manufactures National First National Peoples National Millbury National Mechanics National Merchants National Northborough National Norwood National Plymouth National ---• Mount Wollaston National... Chicopee National Springfield National Ware National •-.-•.Hampden National Merchants National Worcester National Do Do Chelsea Gloucester Haverhill Hudson Holyoke Hopkinton Do MOlbury.... New Bedford Newburyport Northborough Norwood Plymouth "" ^ Do Ware Westfield Worcester Do 5-17 5-25 53-222 53-254 53-167 53-451 53-141 53-548 53-86 53-324 53-323 53-520 53-69 53-311 53-584 53-587 53-361 53-214 53-95 53-104 53-405 53-288 53-4 53-1 NEW HAMPSHIRE. Claremont Manchester Do Portsmouth 195 FEDERAL RESERVE BULLETIN. Claremont National Amoskeag National Merchants National First National I r 2098—15 4 54-73 54-6 54-3 54-47 List of member banks that have joined the collection system of the Federal reserve banks—Continued. DISTRICT No. 1.—Continued. City or town. Name of bank. Transit number. RHODE ISLAND. Providence National Exchange. 57-2 VERMONT. Bellows Falls Montpelier North BonnLngton. St. Johnsbury Windsor National Bank of Bellows Falls. First National ..do. Merchants National. State National 58-60 58-43 58-113 58-38 58-84 DISTRICT No. 2. NEW JEESET. Allentown Arlington BernardsviUe.... Blairs town Bound Brook.... Clinton Edgewater EngHshtown Flemington Freehold Carfield Hackensack Hoboken Do Hope Lvndhurst Manasquan Matawan Newark Do Lo New Brunswick.. Orange Paterson Do Do Plainfield Do RidgefieldPark.. Ridgewood Somerville Do Tenafly Westfield West Orange.. Farmers National , The First National Bernarclsvillc National First National Bound Brook National, Clinton National First National do Flemington National The National Freehold Banking Co. First National Peoples National First National Second National First National ..do. Manasqtian National Farmers & Merchants National Manufacturers National National Newark Banking Co. National State National Bank of New Jersey. Second National First National Paterson National Second National City National The First National First National .do. do Secorfd National First National The National Bank of Westfield. First National 55-367 55-368 55-374 55-365 55-335 55-363 55-351 55-302 55-350 First National National Commercial New York State National First National .do. Gramatan National First National Greenpoint National Nassau National National City Peoples National. Central National Marine National Third National Cazenovia National Dundee National Second National Merchants National National Bank of Far Rocka* way. First National National Bank oi Glens Falls.. Washington County National, First National 29-8 29-7 20-1 50-135 50-903 50-668 1-356 1-3S9 1-118 1-352 1-585 10-24 10-2 10-6 50-685 50-607 50-108 50-110 1-436 55-340 55-395 55-216 55-108 55-110 55-159 55-469 55-411 55-412 55-8 55-1 55-2 55-179 55-171 55-55 55-60 55-56 55-193 55-191 55-433 55-294 55-312 55-314 55-446 55-2S2 55-150 NEW YORK* Albany Do Do Amsterdam Bay Shore Bronxville Brooklyn Do , Do Do Do Buffalo Do Do Caienovia , Dundee Elmira , Do FarRockaway., Glens Falls Do GranviUe Greenwich 50-256 50-255 50-484 50-748 AUGUST I , FEDERAL BESEBVE BULLETIN. 196 1915. List of member banks which have joined the collection system List of member banks which have joined the collection system of the Federal reserve blanks—Continued. of the Federal reserve banks—Continued. DISTRICT No. 3—Continued. DISTRICT Mo. 2—Continued, City or town. Name of bant. Transit number. Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Do Nyack Ogdensburg. Osslning _ Do , Perry Port Chester.., Port Jefferson.. Ridgewood Rochester , Rye Schenectady,.. Do , Stapleton , Syracuse Do Troy Tuckahoe Westfield White Plains.. Peoples National Firrst National Tompkins County National... First National Larchmont National N ational Exchange . . . . . . . . Highland National American Exchange National. Bank of New York National Banking Association. Battery Park National Bronx National Chase National Chatham & Pbenix National.. Chemical National Citizens Central National Coal & Iron National East River National Fifth National Fiist National .-. Garfield National Gotham National Hanover National Importers *c Traders National. f Irving National Liberty National Lincoln National Market & Fulton National.... Mechanics «c Metals National.. f Merchants Exchange National. Merchants National National Bank of Commerce... National Butchers <c Drovers.. f National City National Park Now York County National... Seaboard National Second National Union Exchange National.... Nyack National National Bank of Ogdensburg. Osslning National Fiist National do do ...do RMgewood National Traders National R3 e National Union National Mohawk National Richmond Borough National. First National Salt Springs National Manufacurers National First National National Bank of Westfield... First National 50-435 50-262 50-261 1-431 50-776 50-223 50-174 1-21 1-1 Pitman Point Pleasant., PortNorris Princeton Swedesboro Toms River Williamstown... 1-232 1-416 1-74 1-30 1-12 1-36 1-99 1-59 1-82 1-S5 1-81 1-244 1-33 1-53 1-67 1-91 1-80 1-42 Alientown, Do Do Altoona Do Blue Ball , Bradford Canton Catasauqua Chambersburg,, 1-13 1-3 1-23 1-15 1-8 1-54 1-71 1-85 1-63 1-100 50-457 50-240 50-319 50-318 50-463 50-281 50-555 1-437 50-8 50-845 50-90 50-88 1-454 50-36 50-34 50-64 50-941 50-523 50-234 DISTRICT No. 3. Deimar. Seaford. Fin t National. -io 62-48 62-35 NEW JERSEY. Atlantic City.: Berlin Blackwood Bordentown Camden Do Clayton Haddon Heights Millville..... Moorestown Mount Holly Pedricktown Name of bank. Transit number. NEW JERSET—continued. NEW TORE—continued. Hudson Falls. Ithaca Do Jamaica Larchmont Lockport New Burgh.... Hew Y o r k . . . . Do City or town. Boa rdwalk National Berlin National Fir? t National .do. Can iden National First National Clapton National H a l d o n Heights National.,, Mechanics National Moorestown National , Union National First National 55-146 55-373 55-376 55-333 55-88 55-86 55-472 55-400 55-238 55-345 55-290 55-424 Pitman National Ocean County National. First National do. Swedesboro National.. First National ....do 55-428 55-430 55-457 55-305 55-445 55-353 55-454 PENNSYLVANIA. Clarks Summit. Coatesville Collegeville.-, SanvSic Danville Do Duncannon Do Dunmore East Berlin Fawn Grove Freeland Girardville Glenside Hamburg Hazleton Honey Brook Howard Huntingdon Lancaster Do LandisvMe Lansdale Lehighton Lemasters Lewistown Liverpool McConnellsburg.. Marietta MillersvIUe Milton Mount Jewett.... Mount Joy Mount Union Mountville Nazareth Norristown North Wales Philadelphia Do... Do Do Do Do,.. Do Do Do Do. Do., Do., Do., Do.. Do.. Do.. Do., Do., Do., Do.. Allentown National, Merchants National. Second National First National Second National Blue Ball National.. Bradford National.. Farmers National... National Bank of Catasauqua.. National Bank of Chambersburg. Abington National National Bank of Chester ValCoflegeville National Coplay National , Danville National , First National , Duncannon National Peoples National FirstNational East Berlin National , FirstNational do FirstNational Glenside National. FirstNational.... ....do .....do .....do ....do Northern National Peoples National, FirstNational < ....do ....do Lemasters National. Citizens National FirstNational do. Exchange National MillersvIUe National.... Milton National Mount Jewett National. FirstNational do.. Mountville National Nazareth National Peoples National North Wales National Bank of North America Centennial National Central National , Corn Exchange National Eighth National Farmers & Mechanics National First National Fourth Street National Franklin National Girard National Kensington National Manufacturers National Market Street National National Bank of Germantown National Bank of the Northern Liberties. National Security Ninth National.. Northern National Northwestern National Penn National Philadelphia National 60-128 60-131 60-129 60-116 60-118 60-1091 60-366 60-961 60-726 60-427 60-1430 60-452 60-1115 60-1121 60-573 60-574 60-978 60-979 60-313 60-1040 60-1157 60-652 60-1171 60-1174 60-895 60-233 60-1192 60-1198 60-616 60-143 60-144 60-1213 60-801 60-717 60-1220 60-536 60-1226 60-1051 60-915 60-1253 60-581 60-1262 60-907 60-819 60-1265 60-765 60-219 60-1284 3-2 3-29 3-26 3-18 3-25 3-3 3-20 3-39 3-44 3-13 3-8 3-11 3-40 3-53 3-6 3-2S 3-33 3-43 3-36 3-9 3-1 197 FEDEEAL EESEBVB BULLETIN. AUGUST 1,1915. List of'member banks which have joined the collection system of the Federal reserve banks—Continued. List of member banks which have joined (he collection system DISTRICT No. 3—Continued. DISTRICT No. 4—Continued. City or town. Name of bank. Transit number. . ;.... Watsontown Waynesboro. Wellsboro West Chester Do........... Williamsport Do York Do Do Quaker City National Sixth National Southwark National Southwestern National Tenth National Textile National Third National Tradesmens National Union National — National Bank of Phoenixville. Miners National Pennsylvania National. Quakertown National First National. National Union First National Third National Traders National Fanners National Peoples National First National Terre Hill National Tremont National Grange National Bank of Bradford County. Farmers National Citizens National Peoples National. • First National. do National Bank of C h e s t e r CountyFirst National... West Branch National Central National First National York National 3-42 3-23 3-7 3-37 3-34 3-45 3-21 3-14 3-19 60-465 60-247 60-248 60-770 60-1311 60-36 60-1 60-4 60-8 60-981 60-812 60-197 60-1367 60-917 60-1005 60-939 60-602 60-600 60-830 60-439 6O-43S 60-197 60-196 60-165 60-155 60-153 DISTRICT No. 4. KENTUCKY. Brooksville Covington.. Georgetown Ludlow Maysville , , Do Mount Sterling O;;;;;; Newport Pikeville Russell..... Somerset Winchester First National Citizens National Georgetown National First National Bank of Maysville, National Banking Association. State National Mount Sterling National Traders National Montgomery National German National First National ..do.. ..do. Clark County National., 73-382 73-18 73-139 73-145 73-100 73-102 73-149 73-150 73-151 73-27 73-26S 73-5SS 73-142 73-90 OHIO. Arcanum Baltimore... Bellevue Blanchester. Bluflton... Bucyrua... Cardington. Celina Cincinnati. Do Do Do Do Do. Do Do Circleville Cleveland Do Name of bank. Transit number. OHIO—continued. PENNSYLVANIA—COntd. Philadelphia Do... Do Do Do Do Do Do Do Fhoenbcville Pottsville Do Quakertown Ralston Reading.. Scranton Do... Do Selins Grove Shippensburg Tamaqua Terre Hill Tremont Troy City or town. First National.... do ../..do do do Second National First National. do Atlas National.. Citizens National..Fifty-third National First National Fourth National German National Market National .. Second National First National Bank of Commerce, N. A.. Central National 56-70$ 56-881 56-472 56-642 56-623 S 56-710 56-544 13-35 13-29 13-31 13-1 13-4 13-24 13-36 13-2 56-395 6-3 6-4 Cleveland Do Do Do Do Columbus Do Do Do Do Do Do Do Coshocton Dayton Defiance Dillonvale Elyria Fostoria Franklin Fremont Georgetown Greenwich Hamilton Do HiUsboro Do Lewis ville London Lorain Marietta Massillon Milford Mount SterlingMount Vernon... Do New Concord Norwood Do Plqua Powhatan Point. Ravenna Sandusky Do Springfield Do Spring Valley.... Toledo. Do Do YVadsworth.. Wapakoneta. Wefisville.... Youngstown. Do Cleveland National First National National City — National Commercial Union National Central National City National Commercial National Hayden-Clinton National Huntington National National Bank of Commerce... New First National Ohio National Coshocton National City National Merchants National First National The National Bank of Elyria.. Union National Franklin National First National do do do Second National Farmers and Traders National Merchants National First National Madison National National Bank of Commerce... Citizens National Merchants National Milford National First National do New Knox National First National do Norwood National Citizens National First National Ravenna National Commercial National Third National Exchange Fanners National First National Spring Valley National Tiffin National First National Northern National Second National First National Auglaize National Peoples National..... Commercial National First National - 6-5 6-10 6-12 6-8 6-15 25-16 25-3 25-5 25-7 25-2 25-12 25-4 25-1 56-279 56-28 56-358 56-943 56-197 56-285 56-572 56-272 56-673 56-790 56-91 56-92 56-501 56-500 56-1019 56-538 56-110 56-249 56-213 56-712 56-740 56-298 56-297 56-1069 56-180 56-181 56-219 56-1116 56-464 56-164 56-162 56-673 56-81 56-1162 56-253 56-1 56-4 56-2 56-556 5G-461 56-349 56-46 56-44 Farmers National Citizens National Braddock National... First National Merchants National.. Springs National Peoples National. First National..., Marine National. First National-.. do Union National. 60-422 60-648 60-267 60-930 60-244 60-975 60-774 60-71 60-73 60-966 60-1266 60-519 60-192 8-1 8-22 8-24 8-19 8-20 8-2 8-11 8-9 8-27 PENNSYLVANIA. Beaver Falls Bellevue Braddock Bridgeville........ Butler Cambridge Springs. EllwoodCity Erie Do Ligonier MunhalL New Brighton..Newcastle Pittsburgh Do Do. Do. Do. Do. DoDo. Do. Bank oYpittsburghVN. A Columbia NationaL Commercial NationaL Diamond National Duquesne National Exchange National.... Farmers Deposit NationaL First-Second National Keystone National , 198 FEDERAL RESERVE BULLETIK. AUGUST l t 1915. List of member banks which have joined the collection system List of member banks which have joined the collection system of the Federal reserve banks—Continued. of the Federal reserve banks—Continued. DISTRICT No. 5—Continued. DISTRICT No. 4—Continued. City or town. Name of bank. Transit number. SOUTH CAROLINA—COntd. PENNSYLVANIA—<JOntd. Pittsburgh Do Do Do Do Do Do Plumville Tarentum Titusville Turtle Creek Uniontown Washington Mellon National Monongahela National People's National Second National Bank of Allegheny. Third National Union National Western National First National Peoples National. Second National First National. Second National Citizens National 8-26 8-21 8-13 8-83 8-10 S-12 8-23 60-1306 G0-587 60-511 60-735 60-683 60-294 DISTRICT No. 5. DISTRICT OF COLUMBIA. WashingtonDo Do Columbia National., District National... Franklin National.. 15-1 15-12 15-84 MARYLAND. Annapolis Baltimore Do Do Do Do, Do Do, Do Do Do. Catonsville Cumberland Frostburg Hagerstown Hancock Oakland Sykesyille Farmers National , Farmers & Merchants National. First National Merchants-Mechanics National, National Bank of National Bank of Commerce.., National Exchange National Marine :... Old Town National Second National Western National First National Third National Citizens National Peoples National First National Garrett National , Sykesville National , 65-35 7-7 7-14 7-11 7-1 7-4 7-16 7-10 7-17 7-6 7-13 65-148 65-2 65-53 65-21 65-119 65-97 65-128 First National City National National Bank of Sumter First National 68-109 68-108 68-321 68-131 68-356 68-136 68-269 68-219 68-237 68-72 68-73 68-75 68-240 68-85 6S-6 68-30 68-25 *68-l 68-113 68-4 68-5 68-2 68-62 68-54 68-56 68-226 68-225 68-227 First National Charleston National.. Citizens National First National do 69-36 69-68 69-177 69-217 VIRGINIA, Alexandria Do Broadway........... Charlottesville Fairfax Fredericksburg Gate City Leesburg Luray Lyncnburg Do Do Manassas............. Petersburg Richmond. Do Do Do Do Do Do Do Roanoke Do Do Warrenton Do Waynesb oro WEST VIRGINIA. Bluefield Charleston... Martinsburg. St. Marys West Union.. DISTRICT No. 6. National Bank of. do. Farmers National First National do .do. Commercial National.. Murchison National... First National Merchants National... Peoples National 66-123 66-153 66-511 66-223 66-172 66-90 66-140 66-2 66-111 66-50 66-48 SOUTH CAROLINA. Aiken Anderson Bennettsville. Bishopville... Charleston Do Columbia Do Do Do Do Conway Florence Greenville Laurens Lexington Newberry Orangeburg... Rock Hill Spartanburg.. 67-33 67-65 67-54 67-195 Alexandria National.. Citizens National First National National Bank of do. Planters National First National... Peoples National Page Valley National., First National Lynchburg National.. Peoples National National Bank of Virginia National American National.... Broadway National... Central National First National Manchester National. Merchants National National State & City. Planters National American National First National National Exchange Peoples National .. Fauquier National First National Spartanburg Sumter Do Waterboro NORTH CAROLINA. Goldsboro Greenville Louisburg Do Oxford Salisbury Statesviile Wilmington '. Wilson Winston-Salem Do Transit number. Name of bank. City or town. First National Citizens National Planters National First National Germania National Peoples National National Loan & Exchange. National State Palmetto National Peoples National Union National Peoples National First National Fourth National Enterprise National Home National National Bank of Edisto National National Union Central National 67-136 67-60 67-155 67-391 67-16 67-3 67-26 67-24 67-25 67-30 67-28 67-454 67-80 67-51 67-117 67-264 67-109 67-92 67-71 67-35 ALABAMA. Armistnn First National do do do Traders National First National. Bank of Mobile, National Banking Association. First National do Isbell National Talladega National Athens Atraore Birmingham Do Luverne Mobile Prattville Talladega Do FLORIDA. Pensacola .,, National Bank of Commerce... Peoples National GEORGIA. Atlanta Do Do Do Do Do Cordele Cornelia Dawson Dublin Do American National Atlanta National Fourth National Fulton National Lowry National ThlrdNational Cordele National First National Dawson National City National First National • 199 FEDERAL EESERVE BULLETIN. AUGUST 1,1915. List of member hanks which have joined the collection system List of member banks which have joined the collection system of the Federal reserve banks—Continued. of the Federal reserve banks—Continued. DISTRICT No. 7—Continued. DISTRICT No. 6—Continued. City or town. Name of bank. Transit number. First National American National Citizens National Fourth National Macon National First National do .do.., .do... .do., .do.. National Bank of Savannah.. Merchants National Hlbernia National New Orleans National.. First National Citizens National do. First National Hamilton National Phoenix National First National National Bank of Franklin Peoples National City National TJnaka National Holston National Third National Union National First National American National Lebanon National First National American National Broadway National Cumberland Valley National.. Fourth and First National Tennessee Hermitage National Peoples National First National Peoples National First National ILLINOIS. DoDo. Do. Do. Do. Do.... Do.... Do.... Do.... Do.... Do.... Do.... Clifton.... DeLand.. Divemon. Findlay... Galena Harvey... Joliet Do.... State National Calumet National Central Trust Company of Illinois. Continental & Commercial National. Corn Exchange National Drovers National FirstNational First National Bank of Englewood. Fort D earborn National Live Stock Exchange National. National Bank of the Republic. National City National Produce Ravenswood National Washington Park National FirstNational do. ..do. .do. Galena National. FirstNational.... do Joliet National... 70-685 70-602 70-207 70-76S 70-720 70-S47 70-1491 70-9 70-1 70-1 70-44 70-40 70-39 70-1603 70-452 •70-763 National Exchange. FirstNational do. RIddcll National National Brookville. FirstNational do ..do. German American National. FirstNational Citizens German National... FirstNational do. Citizens National Merchants National First National Dearborn National First National Citizens National FirstNational Rush County National. Rushville National Farmers National Citizens National Valparaiso National 71-73 71-374 71-620 71-222 71-463 71-405 71-268 71-4S5 71-27 71-520 71-S5 71-83 71-704 71-139 71-09 71-179 71-394 71-125 71-362 71-172 71-357 71-356 71-203 71-587 71-276 FirstNational , Merchants National. FirstNational Merchants National. Farmers National... FirstNational do .do., .do.. .do., .do.. ..do.. ..do.. Continental National.... FirstNational Northwestern National. FirstNational ....do .. ....do ....do 72-905 72^54 72-377 72-47 72-445 72-261 72-1081 72-722 72-257 72-1833 72-209 72-988 72-1071 41-62 41-5 41-3 72-387 72-31 72-276 72-166 IOWA. DISTRICT No. 7. Bloomington. Chicago , Do Transit number. INDIANA. Anderson Aurora Boswell Brazil Brookville Columbia City Conners ville Covington Fort Wayne Greenwood Hammond Do Kirklin Kokomo Lafayette La Porte Lawrenceburg Logansport Martins ville Peru Rushville Do Shelbyville Tipton.. Va TENNESSEE, Centerville Do Chattanooga... Do Do Columbia Etowah Franklin Gallatin..."I;... Johnson City... Do Knoxvffle Do Do Lawrenceburg.. Lebanon Bo Murfreesboro. - Nashville Do Do Do Do Shelbyville,.... Springfield^ Woodbury . . . Farmers National Lewistown National , National Bank of Mattoon , First National ....do Neoga National Newman National Central National Commercial German National. First National Forest City National Third National Winnebajro National First National Sycamore National mal Farmers Kansas Lewistown Mattoon Milford Moweaqua Neoga. Newman Peoria Do Do Rockford Do Do Steward Sycamore Warren LOUISIANA. New OrleansDo Name of bank. ILLTNOIS—continued. GEOEGIA—continued. Fort Valley.. Macon....... Do Do Do Milledgeville. Quitman Sandersville.. Sparta Sylvester..... Valdosta Savannah.... Do City or town. 70-105 2-105 2-23 2-3 2-5 2-103 2-1 2-109 2-12 2-147 2-13 2-22 2-59 2*206 2-144 70-1013 70-1059 70-125S 70-1297 70-420 70-309 70-59 70-61 Armstrong...-, Burlington Clarion Clinton Corning Estervfile Galva Gowrie , Independence.. Mapleton , Newton Peterson Renwick ... Sioux City Do Do Villisca Waterloo Waverly Webster City.. MICHIGAN. Alpena Detroit Do Do Grand Rapids Kalamazoo Morenci Port Huron Reed City Saginaw Vassar .... Alpena National First and Old Detroit National Merchants National National Bank of Commerce.. Grand Rapids National City.. Kalamazoo National FirstNational First National Exchange FirstNational Second National Vassar National 74-122 9-1 9-27 9-24 74-2 74-45 74-396 74-91 74-369 74-22 74-375 200 AUGUST 1,1915. FEDERAL RESERVE BULLETIN. List of member banks which have joined the collection system of the Federal reserve banks—Continued, List of member banks which have joined the collection system of the Federal reserue banks—Continued. DISTRICT No. 7—Continued. DISTRICT No. 8—Continued. City or totorn. Name of bank* Transit number. First National Bank of Wisconsin First National National Exchange Wisconsin National First National . . . . do . . . . do Wisconsin National First National Rio Watertown White Water 79-65 79-50 12-2 12-4 12-7 79-206 79-243 79-394 79-127 79-232 DISTRICT No. 8. ARKANSAS. Batesville Benton Bentonville Do Berryville Cotton P l a n t De Queen -• DeWitt Eureka Springs Fayetteville.. Do Forrest City Fort Smith Do Do Do Gravette Green Forest Hope HuntsviUe Jonesboro Judsonia Lewisville Morrillton gould ., Pine Bluff Prairie Grove.,, Rogers Siloam Springs.. Springdale Stuttgart , Texarkana , Van Buren , Waldron Walnut Ridge.. First National, do. Benton County National First National do. do. ....do ....do ....do Arkansas National. First National do. American National City National First National Merchants National First National .do. Citizens National., First National.... ,do .do. .do. -do., .do.. National Bank of Commerce. Simmons National First National .do.. do do do State National. First National.. do do Sl-115 81-295 81-170 81-171 81-251 81-22S 81-167 81-246 81-335 81-S8 81-89 81-142 81-33 81-38 81-31 81-32 81-270 81-550 81-110 81-263 81-68 81-373 81-383 81-554 81-79 81-80 81-43 81-255 81-123 81-146 81-189 81-55S 81-75 81-102 81-240 81-17* Albion National.., First National Farmers National. First National ... .do.. Alton National Citizens National., Anna National First National .do.. do. National Bank of Benld. First National , —do ;;.., ,do ,...,. do Brookport National. First National do.. Alexander County National!'. Cairo National... Carbondale National..." \ First National CarlinvilleNational . . . . First National "" 70-777 70-776 70-1796 ILLINOIS. Albion Do Allendale Do Altamont Alton Do Anna Do D Barry Belleville Benld Benton Breese Bridgeport Brighton Brookport Brownstown Bunker Hill Cairo Do Carbondale Do D Carllnville Carlyle Name of bank. Transit number. ILLINOIS—continued. WISCONSIN, Kenosha Madison Milwaukee Do Do Monroe City or town. 70-1130 70-765 70-152 70-154 70-526 70-525 70^694 70-138 70-1169 70-541 70-628 70-537 70-1021 70-740 70-1192 70-857 70-173 70-175 70-381 70-379 70-466 70-650 Carmi Do Carriers Mills Carrollton Carterville Centralia Christopher Cobden Colleen Collinsville Columbia Crossville Dahlgren Dongola Duquoin East St. Louis Do Edwardsville Effingham Eldorado Equality Fairfield Do Farmersville Flora Freeburg GiUespie Golconda Goreville Gorham Grand Tower Granite City Do Grayyille "Do Greenfield Greenville Griggsville Harrisburg Herrin Do Highland Hillsboro Do Irving Jacksonville Jersey ville Kinmundy............. Lawrencevllle Litchfield Do .,. McLeansboro I Do Madison Marine Marion Marissa Mascoutah Metropolis Do Do Millstadt Mound City Mounds Mount Carmel Do Mount Olive Mount Sterling Mount Vernon Do Murphysboro Do Nashville Do National Stock Yards Nebo Nokomis :... DO ; Norris City Oblong Odin... O'Fallon First National National Bank of Canni First National Greene County National First National. Old National First National .do.. Cofieen National. First National.... ....do do..... ....do First National. .do. Drovers National Southern Illinois National First National .do. do..... do Fairfield National., First National ....do ....do ....do Gillespie National.. First National do .do. .do. .do. Granite City National.. Farmers National First National .do. Bradford National... Griggsville National. City National N a i l do First National ..,.do Hillsboro National Peoples National Irving National Ayers National National Bank of Jerseyville... First National ....do ....do ;. Litchfleld National First National Peoples National First National.., do do ....do ....do City National..,, First National... National State.**. First National.., do do American National.. First National do. .do; Ham National ! Third National City National First National Farmers & Merchants National. First National ;. National Stock Yards National. | First National Farmers National Nokomis National I First National Oil Belt National First National ....do ' .. 70-522 70-523 70-707 70-600 70-514 70-235 70-1221 70-1230 70-873 70-294 70-1232 70-1242 70-1005 70-1703 70-370 70-20 70-17 70-408 70-455 70-484 70-1283 70-572 70-571 70-1696 70-535 70-1310 70-609 70-837 70-1324 70-1302 70-1328 70-225 70-226 70-655 70-654 70-811 70-501 70-783 70-385 70-330 70-328 70-542 70-480 70-481 70-1376 70-164 70-444 70-868 70-494 70-352 70-354 70-^81 70-680 70-404 70-1852 70-317 70-646 70-1441 70-428 70-426 70-427 70-1463 70-521 70-1821 70-323 70-322 70-475 70-648 70-272 70-273 70-287 70-286 70-627 70-626 70-1480 70-1729 70-663 70-662 70-853 70-733 70-1503 70-1504 201 FEDERAL EBSEEVE BULLETIK, AUGUST 1,1915. List of member banks which have joined the collection system of the Federal reserve banks—Continued. List of member banks which have joined the collection system of the Federal reserve banks—Continued. DISTRICT No. 8—Continued. DISTRICT No. 8—Continued. City or town. Name of bank. Transit number. Shawneetown. Sparta Staunton Stunner Tamaroa Trenton Ullin Vandalia Vienna Waterloo Waverly Wayne Cil West! ..... West Salem.. White Hall. Do Witt Do Worden First National. ....do ....do do Quincy National. Ricker National.. First National... do .do. .do. .do. Salem National. First National., doCity National.. First National. ,do .do. .do. ..do. .do., .do. .do. .do. .do. .do. .do. .do. do White Hall National. Oland National Witt National , Wall National Bedford Do BIcknell Birdseye BoonviUe Do Cannelton Do Carlisle Charlestown . Corydon Do , Evansville Do . Do Fort Branch Holland Huntingburg... Jasonvifle Jeffersonville... Llnton Loogootee Lynnville Madison.. Do MiUtown. Mount Vernon.. Do New Albany Do.. New Harmony.. Odon Orleans ; Owensville Patoka Petersburg , Poseyville Do Princeton , Rockport Seymour Do Shelburn Sullivan Tell City Do Bedford National Citizens National First National Birdseye National City National Farmers & Merchants National. Cannelton National First National do ....do Corydon National First National Citizens National City National Old State National Farmers & Merchants National Holland National First National .....do ....do .....do do Lynnville National. First National National Branch First National do. Mount Vernon National. New Albany National... Second National First National do. National Bank of Orleans... First National Patoka National First National Bozeman-Waters National.. First National Farmers National First National do. Seymour National First National National Bant of Sullivan.. Citizens National , Tell City National Name of bank. Transit number. INDIANA—continued. ILLINOIS—continued. Olney Palestine Pinckneyville.. Pittsfield Quincy Do Raymond Roodhouse St. Elmo St. Francisville. St. Peter Salem Sandoval City or town. 70-412 70-749 70-534 70-636 70-51 70-49 70-914 70-616 70-794 70-753 70-1111 70-545 70-706 70-1577 70-667 70-506 70-401 70-747 70-900 70-690 70-1632 70-511 70-826 70-1747 70-710 70-1651 70-630 70-967 70-519 70-518 70-1673 70-1770 70-1678 71-240 71-239 71-422 71-683 71-390 71-391 71-480 71-481 71-015 71 S11 71-510 71-5U 71-4 71-2 71-1 71-575 71-782 71-438 71-791 71-185 71-312 71-475 71-816 71-282 71-281 71-834 71-316 71-317 71-89 71-90 71-564 71-870 71-544 71-559 71-880 71-462 71-630 71-631 71-294 71-427 71-297 71-298 71-908 71-383 71-411 71-410 Vevay Vincennes... Do. Do Wadesville... Washington. Do ;. Wlnslow First National. do. German National Second National Farmers National..... Peoples National Washington National. First National 71-555 71-153 71-154 71-165 71-936 71-263 71-262 71-958 Bardwell Bowling Green.. Do Campbellsville., Carrollton Do Columbia Danville Fulton Glasgow Do....' Do , Harrodsburg..., Do Henderson , Hodgenville.... Do Hopkins v i l l e . . . Lawrenceburg.. Do Lebanon Louisville Do Do Do Do Do Do Do Madisonville... Mayfield Do Montlcello Morganfield.... Owensboro Do Do O wenton Paducah Princeton Providence.... Eussellville Do Scottsville Do Sebree Springfield WIckliffe First National American National.. Citizens National.... Taylor National Carrollton National. First National .do.. Citizens National First National Farmers National First National Trigg National First National Mercer National Henderson National Farmers National La Rue National First National Anderson National Lawrenceburg National Citizens National American National Citizens National First National Louisville National Banking Co, National Bank t>f Commerce.., National Bank of Kentucky.... Southern National Union National.Farmers National ..doFirst National Citizens National Morganfield National.... First National National Deposit United States National. First National ..do. Farmers National Union National -. Citizens National National Deposit Allen County NationalFirst National • ....do do ....do 73-303 73-74 73-73 73-281 73-220 73-219 73-310 73-124 73-189 73-197 73-196 73-195 73-164 73-165 First National National Bank of Commerce. Citizens National First National do... 86-201 85^7 85-110 85-109 85-128 First National..^ do Central National. First National. - ..do.. do 80-507 80-343 80-203 80-592 80-394 80-582 80-551 80-309 80-298 80-105 80-236 80-^587 80-316 80-322 7^n5O 73-338 73-339 73-70 73-223 73-224 73-170 21-24 21-10 21-5 21-20 21-3 21-1 21-11 21-23 73-136 73-112 73-108 73-259 73-186 73-41 73-42 73-47 73-306 73-34 73-177 73-212 73-169 73-168 73-263 73-264 73-244 73-260 73-638 MISSISSIPPI. Ackerman Columbus Corinth Do Tupelo — MISSOURI. AppletonCity Bolivar Boonville Bosworth Brunswick Cabool Cainesville California Canton Cape Girardeau Carrollton Cassville Centralia Chaffee dO ;• Monlteau National. First National .....do do do 202 AUGUST 1,1315. FEDEEAL EESEEVE BULLETIN. List of member hanks which have joined the collection system IAst of member banks which have joined the collection system of the Federal reserve banks—Continued, of the Federal reserve banks—Continued. DISTRICT No. 9—Continued. DISTRICT No. 8—Continued, City or town. Name of bank. Transit number. Citizens National First N a t i o n a l . . . . . . . . . . Clinton National Peoples National Boone County National.. Exchange National First National American National. City National First National. Hannibal National First National Peoples National First National Citizens National. First National do.. Farmers National, First National.... do. Scotland County National First National do. ..do.. ..do.. ..do.. ..do.. .do., .do,, .do., .do.. Central National Mechanics-American National. Mercantile National Mercantile Trust Co Merchants-Laclede National..'National Bank of Commerce. State National Third National First National Citizens National Third National Peoples National McDaniel National Union National F irst National Trenton National Marshall National National Bank of Unionville.. First National peoples National First National do . ...do ;;... . ...do ,. Purdy. Rid, St, __ St. Louis Do Do Do Do. Do Do Do Salem Sedalia Do Seymour Bpringfleld Do Steelville Trenton Unlonville Do Versailles Warrensburg Washington Wellston....... West Plains Windsor 80-139 80-138 80-180 80-181 80-85 80-86 80-276 80-562 80-563 80-378 SIMS 80-1412 80-321 80-61 80-132 80-1414 80-742 80-767 SO-768 80-465 80-339 . 80-148 60-299 80-207 80-383 80-307 80-328 80-698 80-1175 80-564 80-98 4-6 4-32 4-20 4-21 4-19 4-26 4-28 4-29 80-371 80-53 80-55 80-665 80-29 80-8 80-589 80-158 80-331 80-332 80-398 80-194 80-220 80-110 80.-255 80-295 TENNESSEE. Brownsville Covington Jackson Do DO Memphis Do Do Do Paris Ripley Union City * ... ;;;... " ... "*.., ""... "*"... First National .... do ,... Second National Security National..:... Central State National. First National Mercantile National National City First National do Third National 87-141 87-567 87-59 87-60 87-65 26-7 26-2 26-6 26-65 87-112 87-554 87-102 DISTRICT No. 9. MICHIGAN, L'Anse Munising.......... MINNESOTA. Ada Aitkin Transit number. MINNESOTA—continued. MISSOUBI—continued. Chillicothe Do Clinton Do Columbia Do Eldorado Springs Green City Do. Hamilton Hannibal Holden Jackson Jefferson City Kirksville Lebanon Linn Creek Ludlow , Bo Marshfield Memphis , Mexico Milan Monett Mountain Grove Palmyra Pierce City Polo Name of bank. City or town. Baraga County National First National Bank of Alger County. Ada National First National 74-704 74-317 75-1192 75-261 Alexandria Amboy Anoka Atwater Belle Plaine Blackduck Braham Ceylon Crookston Do Deer River Elbow Lake Foley Grand Rapids Halstad Hawley Hendncks. Do Hopkins... Hutchinson... Jackson Do Lake P a r k . . . Lanesboro..., LeRoy Litehfleld.... Little Falls... Long Prairie. Luverne Do Mankato Do Do Minneapolis.. Do Do Do .do do Anoka NationalFirst National... ..do. ..do. ,.do. ..do. , ,,..do Merchants National. First National ..do. .do. ..do. ..do. ..do. ..do. _.Ao. Farmers National First National Bank of West Minneapolis. Farmers National First National Jackson National First National .do, ..do. ..do. German-American National First National Farmers National National Bank of Luverne First National National Bank of Commerce... National Citizens , First & Security National Metropolitan National Northwestern National Scandinavian-American National. First National Moorhead National First National Peoples First National First National do ....do Fanners National. First National do. American National Capital National First National Merchants National National Bank of Commerce. First National Moorhead Do New Prague 75-157 75-539 75-141 75-480 75-317 75-S62 75-665 75-587 75-78 75-77 75-711 75-419 75-137 75-199 75-519 75-139 75-411 75-548 75-549 75-160 75-1035 75-216 75-217 75-430 75-359 75-441 75-188 75-109 75-306 75-176 75-177 75-33 75-37 75-34 17-2 17-62 17-1 17-7 75-130 75-131 75-271 National Bank of Wheaton..., First National Olivia Osakis Parkers Prairie., Princeton Ked Lake Falls. R u s h City Rushmore St. Paul Do Do Do Do Sleepy E y e Springfield Stephen Tyler Waterville Wheaton Willmar 75-362 75-353 75-567 75-265 75-240 75-361 75-611 22-7 22-5 22-1 22-3 22-8 75-107 75-278 75-465 75-471 75-297 75-296 75-138 Anaconda National First National Yellowstone National National Bank of Gallatin Val- 93-304 93-38 93-60 First'National United States National First National do. Glasgow National.. First National ....do ....do ....do. _,. Conrad National. First National... do ....do 93-103 93-77 93-93 93-95 93-96 93-15 93-84 93-201 93-208 93-48 93-73 93-137 93-21 do ..do. ..do. ..do. .• MONTANA. Anaconda Baker Billings Bozeman Conrad Deer Lodge. Forsyth..... Glasgow Do Great Falls., Hamilton... Harlem Ismay Kalispell..-. Lewis town.. Malta Missoula , 93-35 203 FEDERAL RESERVE BULLETIN. AUGUST 1,1915. List of member banks which have joined the collection system of the Federal reserve banks—Continued. List of member banks which have joined the collection system of the Federal reserve banks—Continued. DISTRICT No. 9—Continued. DISTRICT No. 9-Continued. Transit number. Name of bank. City or town. MONTANA—continued. 93-121 93-146 93-112 93-111 First National ....do .do. .do. .do. Cando National. First National.., ....do ....do ..-.do Dakota National. First National... .do. ..-.do Fargo National First National Merchants National. First National -do. .do. ..do. Farmers & Merchants National First National Hope National First National Farmers National First National .V .do.do... .....do do.. Milnor National... Citizens National. First National.... do .do. .do. .do. ..do. ..do. ..do. ..do. 77-29 77-91 77-229 77-432 77-527 77-89 77-88 77-235 77-380 77-34 77-49 77-190 •77-565 77-88 77-3 77-1 77-2 77-211 77-205 77-15 77-347 77-153 77-136 77-129 77-287 77-115 77-227 77-172 77-805 77-45 77-651 77-174 77-135 77-398 77-113 77-265 77-270 77-203 77-484 77-245 77-216 77-709 NORTH DAKOTA. Bismarck Bottineau Bowman Brinsmade Buffalo Cando Do Churehs Ferry. Crary... Devils Lake... Dickinson Drayton East Fairvie new. Ellendale. Fargo..... Do Flngal , Finley Grand Forks-.., Hampden Hatten . Hettinger Hope Hunter..... Lidgerwood. Litchville Linton McVille Mandan Mannarth Milnor Northwood Osnabrock Park River Reynolds Rolette St. Thomas.... Sentinel Butte. Sheyenne Steele Tower City SOUTH DAKOTA. Arlington Bridge water. Castlewood.. Clear Lake... Hot Springs. Mclntosh Milbank..... Do Mitchell Do Do Oldham Parkston Pierre. Sioux Vienna Watertown.. ."Woonsocket. First National. ..-.do do ... .do Peoples National.. First National..., ..do. Merchants National. First National Mitchell National.•Western National... First National -. do. Pierre National First National Scandinavian-American tional. First National do ....do Na- 78-190 78-173 78-236 78-203 78-72 78-333 78-78 78-76 78-29 7S-30 78-32 78-363 78-159 78-53 78-44 78^8 78-296 78-23 78-149 WISCONSIN. Eau Claire Grantsburg Manitowoc Neillsville Phillips Union National • First National • National Bank of Manitowoc., First National do 2098—15 Name of bank. Transit number. WISCONSIN—continued. First National, do -do. .do. Moore Ronan Three Forks. Townsend... City or town. 5 79-78 79^390 79-113 79-292 79-294 Rice Lake Shawano Do Superior Waupaca Wausau Do Weyauwega First National. do.. Gorman*American National. United States National Old National First National National German-American. First National DISTRICT No. 10. COLORADO. Akron Alamosa Do Arvada Ault Do Berthoud Do Boulder Do Do Brighton Brush Do Buena Vista Canon City Do Carbondale Castle Rock • Cedaredge Center Central City Do.. Colorado City Colorado Springs.. Do Do Do Cortez Crate Do Cripple Creek Delta Do Denver Do Do Do Do.. Durango Do Eads Eagle Eaton • Do Englewood Florence Fort Collins. Do Do Fort Morgan Do ,..,-. Fountain. Fowler -» Fruita Glenwood Springs.. Do Golden Granada... -. Grand Junction.... Greeley * First National Alamosa National American National First National Farmers National First National Berthoud National First National Boulder National First National National State First National.... do. Stockmens National... do.. .do.. Fremont County National First National First National of Douglas County. First National .do.. .do.. Rocky Mountain National... First National Colorado Springs National.... El Paso National Exchange National First National Montezuma Valley National. Craig National First National .do.. Delta National....... First National Colorado National Denver National Federal National First National Hamilton National United States National Burns National •— First National First National .. First National Bank of Eagle County. Eaton National First National. .....do... do.... *•-. do .... •*-Fort Collins National...... Poudre Valley National. -. First National Morgan County National.. First National .do.. do... Citizens National First National -•• Woods-Rubey National. First National Grand Valley National.. First National 79-216 79-219 79-250 79-4 79-256 79-89 79-90 79-365 204 FEDERAL RESERVE BULLETIN. AUGUST 1,1915. List of member banks which have joined the collection system List of member banks which have joined the collection system of the Federal reserve banks—Continued. of the Federal reserve banks—Continued. DISTRICT No. 10—Continued. DISTRICT No. 10—Continued. City or town. Name of bank* COLOBADO—continued. Greeley Do Gunnlson. Hayden , Holly Holyoke Hotchklss Hugo Idaho Springs Do Johnstown Julesburg Do Lafayette LaJara La Junta Ltunar,.... Do Las Animas Leadville Do Littleton Longmont Do Loveland Do Mancos Meeker Monte Vista Montrose Do O lathe Ordway Palisades Paonia Platteville Pueblo Do Bine Rocky Ford , Do Saguache Salida Do Sedgwick Silverton Steamboat Springs Sterling...... Do Do Telluride Trinidad Do Walsenburg Wellington Windsor Wray Do Yuma KANSAS. City or town. Name of bank. KANSAS—continued. Greeley National., Union National.., First National .do.. ..do.. ..do., .do.. ..do.. .do.. Merchants and Miners NationalFirst National Citizens National. Firs t National do. .do.. ..do.. ..do.. .••• Lamar National First National , American National... Carbonate National.. First National , Farmers National..., Longmont National.. Firs! National , Loveland National.. First National do ....do Montrose National. First National do ....do Palisades National First National Plattevtlle National First National Western National First National do Rocky Ford National... First'National Commercial National First National do do do Farmers National First National Logan County National. First National do.. Trinidad National.. First National do do ,.:..d.... The National Bank of.. First National Abilene ,., Do Alma Do ; Almena Anthony....... Do Arkansas City...... Do ......... Ashland Atchison...; Do .. Attica Atwood Augusta Barnard Baxter Springs Bcattie. ; . . . . . . . „ . Belleville Do Transit number. Abilene National Bank Fanners National Bank Alma National Bank Farmers National Bank; First National Bank Cititens National Bank First National Bank Home National Bank Security National Bank Stockgrowers National Bank.. Exchange National Bank.^.... First National Bank., do. Farmers National Bank First National Bank , do : Baxter National Bank , First National Bank The National Bank of Belleville. Peoples National Bank Beloit.. Do. Bonner Springs. Burlingame Burlington Do Burr Oak Caney Cedar Vale.'!!!!! Do Centralia Chanute Cherokee Cherryvale Clay Center Do Clifton Coffeyville Do Coldwater. Columbus Concordia Conway Springs.., Cotton wood Falls. Do Council Grove Delphos Dlghten Dodge City Edmond Edna El Dorado Do ElkCIty Ellsworth Emporia. Do Englewood Eureka Do Do Formosa Fort Leavenworth. Fort Scott Fowler...... Galena Garden City Do Garnett Gaylord Girard Glasco Goff Goodland Do Great Bend Do Greensburg Gypsum Hamilton Harper.... Hartford Havensville Hays City Herington.. ... Hiawatha.. Highland Hillsboro.Hoislngton Holton. Horton Howard Do Hoxie Humboldt.. Hutchlnson. Do First National Bank German National Bank of Northern Kansas. First National Bank do Fanners National Bank Peoples National B a n k . . . . . . . Jewell County National Bank. Caney Valley National Bank.. Home National Bank Cedar Vale National Bank Dosbaugh National Bank First National Bank do. .do. Montgomery County National Bank. First National Bank , Peoples National Bank First National Bank Condon National Bank First National Bank , Cold water National Bank First National Bank ..do. ..do. Chase County National Bank.. Exchange National Bank Council Grove National Bank. First National Bank do. National Bank of Commerce. First National Bank do. El Dorado National Bank Farmers <c Merchants National f Bank. First National Bank Central National Bank Citizens National , Emporia National , First National Citizens National . First National Home National First National , Army National Citizens National.. , First National .-..., Galena National , First National........... Garden City National National Bank of Commerce... First National do .do. ....do Farmers National • First National. -. Citizens National First National Farmers National Gypsum Valley National . First National The National Bank of Harper. Hartford National First National, .do. .do. ..do. ..do. .do. ....do ....do do. do. Howard National First National.-. Humboldt National... Commercial National. First National Transit number. 205 FEDERAL RESEBVE BULLETIN. AUGUST 1,191ft. List of member banks which have joined the collection system of the Federal reserve banks—Continued. List of member banks which have joined the collection system of the Federal reserve bante—Continued. DISTRICT No. 10—Continued. DISTRICT No. 10—Continued. City or town. KANSAS—continued. Independence Do Do Iola Jewell City Junction City Do Kansas City Do Kensington Kingman Kingsley Kiowa LaHarpe Larned Lawrence , go Do Leavenworth Do Do Lebanon LeRoy Liberal Lincoln Lfndsborg. Logan Longton Lucas Luray Lyndon Lyons Madison Manhattan...... Do Mankato Marlon ... Marysville...... Mayetta Meade Medicine Lodge. Minneapolis Do Moline Do Mount H o p e . . . . Natoma Neodesha Do Ness City Do Newton Do Norcatur.. Norton .. Nortonville..... Oakley Oberlin... Do Olathe Osborne Do...: Do.... Ottawa ..... Do Overbrook Paola _ Do Parsons Peabody Phillipsburg Pittsburg Do Do Plainvffle.... Pleasanton... Prairie View. Platte Sabetha...... St. John Do Name of bank. Citizens National Commercial National. First National Northrup National First National Central National First National Commercial National. Peoples National First National do. The National Bank of Kingsley. First National First National Bank Moffett Bros. National Bank., Lawrence National Bank Merchants National Bank Watkins National Bank First National Bank Leavenworth National Bank.. Manufacturers National Bank, First National Bank do, .do. Farmers National Bank. First National Bank do. Home National Bank. First National Bank., do .do. Lyons National Bank. First National Bank.. do. Union National Bank Mankato National Bank. Marion National B a n k . . . First National Bank do ..do. .do. Citizens National Bank Minneapolis National Bank. First National Bank Moline National Bank First National Bank dO '; .do. Neodesha National Bank.... Citizens National Bank The National Bank of Ness City First National Bank Midland National Bank First National Bank .do. .do. .do. Farmers National Bank... Oberlin National Bank.... First National Bank Exchange National Bank. Farmers National Bank... First National do. Peoples National First National Miami County National. Peoples National First National do..... ..do. .do. National Bank of Pittsburg.. _ Pittsburg National Bank of Commerce. First National do National Bank of., do First National.... St. John National. Transit number. City or town. KANSAS—continued. St. Marys.. Salina Do Scott City. Sedan Seneci ieca. Do Smith Center. Solomon Spearville....*. Stafford Sterling Stockton Do Syracuse Tbayer Topeka Do Do Toronto Troy Victoria Wamego Washington... Do Waverly Wellington.... Do Wetmore White City... Wichita Do Do Do Winfield go Do MISSOURI. Adrian Albany Burlington Junction. Cameron Cartersville Carthage Do Do Excelsior Springs Fairview Golden City Do. Grant City Harrison ville Independence Joplin Do Do Kansas City.. go . Do Do Do Do Do Do Do Do Do Do King City,. Do Lamar Lathrop...Liberty^. Marys ville Neosho Nevada • Do North Kansas City.. Plattsburg Name of bank. First National Farmers National National Bank of America.. First National .do. Ao National Bank of.. First National Solomon National.. First National Farmers National.. First National National State Stockton National. First National do. Central National Fanners National... Merchants National. First National do. German National. First National.... ..do. Washington National First National National Bank of Commerce. Wellington National First National .do. Fourth National Kansas National National Bank of Commerce. Union Stock Yards National. Cowley County National..... First National Winfield National First National.., —do .do., .do.. .do.. Carthage National., Central National... First National .do... do Citizens National.., First National .do.., Citizens National.., First National do.. Cunningham National First National Joplin National Commonwealth National Drovers National First National Gate City National Inter-State National National Reserve New England National. Park National Security National Southwest National Bank of Commerce. Stockyards National Traders NationalCitizens National. First National .do.., .do., ..do.. ..do.. ..do.. do Thornton National.. National Bank of.... First National Transit number. 206 FEDERAL RESERVE BULLETIN. AUGUST 1,1915, List of member banks which have joined the collection system of the Federal reserve banks—Continued. List of member banks which have joined the collection system of the Federal reserve banks—Continued. DISTRICT No. lO—Continued. DISTRICT No. 10—Continued. Transit number. Name of bank. City or town. NEBRASKA—continued. MISS OUBI—continued. Fullerton Do G enoa Bo Gering Do Gordon , . . Farmers National Burnes National First National German-American National— Tootle-Lemon National First National do.... do Pleasant Hill St.Joseph go Do Do Sarcoxle Savannah Tarkio Webb City .... do Do Grcoley •. National Bank of Gresham Hampton NEBRASKA. Adams Ainsworth Albion Do Allen Alliance Do Amherst Ansley Arlington Ashland Atkinson Auburn Do Aurora Do Do Bancroft Bayard Bazile Mills Beatrice Do " Beemer Belden Benedict Bertrand Blair Blue Hill Bradshaw Bridgeport Bursrell - . Broken Bow Brunswick Butte Callaway Carroll Central City Chadron Chappell Clarke Coleridge Do Columbus Do Do Craig frawtoffl Creighton Crete Do Crofton David City Do Do Decatur Dodge Elgin Elwood Emerson Fairbury Do First National National Bank of Albion National First National do . Alliance National First National do . . . . do do National Bank of. First National Carson National First National Aurora National Fidelity National First National do ....do ...do Beatrice National First National ....do ....do ....do ....do ....do ....do ....do ....do ....do Custer National First National do... do do • do...... Central City National First National . . . . do . . . . do Coleridge National First National...., Commercial National First National German National First National , •Polio plfTT- Fremont Do Do Do Friend Transit number. Name of bank. City or town. .... ...... — ; Creighton National City National First National First National Central Nebraska National City National First National do : ,. do :. do , do do Fanners & Merchants National. First National Commercial National Farmers & Merchants National. First National Fremont National First National First National Fullerton National First National Genoa National. First National , . Germs National First National .do Grand Island National First National do .do. .do d o . do Hartington National Exchange National First National . . German National . . First National .....do do . . . . .do. .- . . .... •.' Do Hastings Do „ Do Havelock..,.. Hayes Center. Hav SDrintrs Heminpford Holdredge. .do ' Hooper Humboldt National Bank of Humphrey First National.. Imperial „ ,i.:. do Johnson ..... do Do ... German National Kearney Central National Do : City National. Laurel First National Do.,.. _ Laurel National .-. Leigh First National -,-,•...... Lexington . . . . . Dawson County National Do First National ........ Litchfield . . . . First National. Lincoln Central N a t i o n a l . . . . . . . . . . . . . Do City National...-. Do First National...... _ • Do National Bank of Commerce ; Loomis First National LoupCity. ...i.do... Lynch • . . , ; . : . . . .do... do Madison Farmers National Do First National Do Madison National Marquette . . . . First National ... McCook Citizens National Do First National Do McCook National Minden First National Do Minden Exchange National Mitchell First National Morrill do. Naper ....do......: Nebraska City Merchants National Do Nebraska City National Do , . Otoe County National Neligh National Neligh First National Newman Grove Citizens National Norfolk Norfolk National. Do First National North Bend ..do North Platte Oakland Farmers & Merchants National. Do . . . , First National Omaha... City National Do Corn Exchange National Do.. First National Do Merchants National Do Nebraska National Do Omaha National • Do United States National First National O'Neill Do " " . . O'Neill National First National Ord ..do Osceola ....do Oshkosh ....do... Pender „ AUGUST l f 1915. 207 FEDERAL RESERVE BULLETIN. List of member banks which have joined the collection system of the Federal reserve banks—Continued. List of member banks which have joined the collection system of the Federal reserve banks—Continued. DISTRICT No. 10—Continued. DISTRICT No. 10—Continued. City or town. Transit number. Name of bank. NEBRASKA—continued. Pilger., Plainview.. :.... Plattsraouth Randolph. Do. Rushville St. Edward Do ;. Schuyler Do Scottsbluff. Do .....;.. Scribner --•... Seward .* Do Shelby „ Sidney South Omaha Do Do Spe n c e r . . . . . . . . . . . . . . — Stanton....".............. Do Stromsburg Stuart -.-.. Syracuse.. Tecumseh Do..... Tekamah Tilden Do... Trenton. University Place. Utica Valentine..........'.'...'.: Wahoo Do Wakefield Do Walthill Do Wausa Do Wayne. Do.. Weeping Water Do . West Point Do Wllber Wilcox Winnebago Wisner Do Wood River Wymore. Wynet York Do ... Name of bank. OKLAHOMA—continued. Farmers National.. First National..... ....do ....do ....do Security National Stockmen's National First National Smith National First National. Schuyler National First National Scottsbluff National.. First National do. Jones National.... 1.. First National.. do Live Stock National. Packers National Stockyards National. First National do. Stanton National. First National.... •do ..do. Citizens National.... Tecumseh National. First National .do. Tilden National., First National... .do. .do. .do. .do. Saunders County National. Farmers National . First National do. Walthill National..... Commercial National.. First National Citizens National First National. City N a t i o n a l . . . . . . . . . First National. .do. West Point National. National Bank of First National do ".. Citizens National . First National .do. .-do. City National First National. N E W MEXICO. Cimarron.... Clayton Farmington., Do Las Vegas.... Do Raton Do Santa Fe First N a t i o n a l . : . . . . . . . . . . . do do.. -...., San Juan County National...., First National San Miguel National , First National National Bank of New Mexico. First National; Ada... Do...... Adding ton.. Afton*. Alex........ Allen First National M. & P. N a t i o n a l . . . . . . . . . . . . . First National do. City or town. -...do ....do..-:. .... Altus Do Alva Anadarko.... Do Apache , Arcadia , Arapaho Ardmore Do Do , Bartlesville., Do Do Beggs Do Berwyn Bixby. Blackwell... Blair Blanchard... Blue Jacket. Bovnton Braggs. Bram&n... Bristow Do Broken Arrow. Do Buffalo Calvin. . Do Carmen Cashion . Centralia Chandler Do Checotah Do Do Chelsea Cherokee Do Claremore... Do Cleveland... Do Chickasha... Do Do Do Clinton Do Collinsville.. Do Comanche... Cordell. Do Do Coweta Do Commerce... Cushing Do CusterCity.. Do Davis Dewey...... Do Drumright.. Duncan Do Do Edmond Do El Dorado.. Elk City..... El Reno Do Enid Do City National.. First National. ....do. do National Bank of., First National .do. ...do Ardmore National First National State National Bartlesville National. First National Union National Farmers National First National do .do. .do. .do. .do. .do. .do. .do. .do. Bristow National. First National.... Citizens National. First National.... .do. ....do Calvin National... Carmen National. First National .do. ....do -Union National Commercial National First National Peoples National First National Alfalfa County National Farmers National First National National Bank of Cleveland National. First National Chickasha National Citizens National First National Oklahoma National First National Oklahoma State National Collinsville National First National .do. Cordell National Fanners National State National First National National Bank of Commerce. First National Farmers National First National ..do.. Peoples State National.. First National do Security National First National City National Duncan National First National Citizens National First National .do. do ......... Citkens National First National Enid National First National. Transit number. 208 AUGUST 1,1915. FEDEBAL BESERVE BULLETIN. List of member banks which have joined the collection system of the Federal reserve banks—Continued. List of member banks which have joined the collection system of the Federal reserve banks—Continued. DISTRICT No. 10—Continued. DISTRICT No. 10—Continued. Name of bank. City or town. OKLAHOMA—continued. Do Do Fairfax . Do Fhirland Fatrview Foraker Fort Gibson Do Francis Frederick Do Geary Gotebo . Grandfield Grove Guthrie Guymon Do Hammon Harrah Hartshorne Haskell Do Hastings Heavener Do.... Henessey Do ... Do Hobart Do Do Holdenvillo Do Do Hollis Do Do Hominy Do Hooker Hulbert Hydro Do KawCIty Do geota Kiowa Do Kingfisher Do Konawa Do Lahoma Lawton Do Lenapah Lindsav Lone Wolfe Luther Mangum Do Marietta Do Marlow Do Maud Maysville Do McAUester Do Do McLoud Medford... Kiami Do Minco Morris Mounds , Eufaula National FirstNational State National Fairfax National First National do Farmers and Merchants First National Citizens National Farmers National Francis National FirstNational National Bank of Commerce.. FirstNational do .... do First National do City National FirstNational :. Farmers National FirstNational do . ...do Haskell National National Bank of FirstNational State National Farmers and Merchants First National do Miners National City National Farmers and Merchants Nationa FirstNational American National Farmers National FirstNational City National National Bank of Commerce . State National FirstNational National Bank of Commerce.. First National do Farmers National FirstNational Farmers National National Bank of Keota National First National Peoples National FirstNational Peoples National First National Konawa National FirstNational City National First National Lenapah National First National do do ..Mangum National ..do FirstNational Marietta National National Bank of State National First National Farmers National First National American National ., City National First National .do .do .do Ottawa County National FirstNational ....do Transit number. Name of bank. City or town. OKLAHOMA—continued. FirstNational do American National Commercial National Exchange National First National Muskogee National Eastman National FirstNational .....do .....do Farmers National First National Commercial National First National Do Nowata National Do First National. Okemah.............. Okemah National Do Citizens National, Okmulgee .... First National Do: American National Oklahoma City Farmers National Do. Oklahoma Stockyards NaDo............... tional. Security N a t i o n a l . . . . . . . . . . . . . . Do State National. .-...• Do .Western National DO .......:.-. Oktaha .- First National do Olustee....... do Owasso Mountain View Muldrow Muskogee Do. Do Do Do Newkirk Do New Wilson Noble Norman. Do. National Bank of Commerce... Pauls Valley National American National Citizens National... First National Arkansas Valley National . . . . . . . FirstNational Pawnee National. FirstNational ...... Farmers National.. ; ..• . . . Germania National Farmers National „•_• First National do National Bank of Commerce... Do First National Poteau National Bank of Do First National Prague Prague National First National Pry or Creek..., Chickasha National Purcell Union National Do First National Quinton Ralston Ringling ...do Farmers and Mechanics NaRoff............ tional. 1 ! First National Do ....do ....do ; Rush Springs do ' ' Citizens National Sallisaw Merchants National Do American National Sapulpa First National Do Do Do Pawhuska Do..... Do Pawnee Do Do Perry PoncaCity Do.... Pond Creek Porter Do Soiling Sentinel . . Shattuck Shawnee Do Do Skiatock Do Snyder Spiro Stillwater ....do Beckham County National First National ....do . . . . ....do Shattuck National National Bank of Commerce... Shawnee National State National First National Oklahoma National First National 1 do Transit number. 209 FEDERAL RESERVE BULLETIN. AUGUST 1,1915. List of member banks which have joined the collection system of the Federal reserve banks—Continued. List of member banks which have joined the collection system of the Federal reserve banks—Continued. DISTRICT No. 10—Continued. DISTRICT No. 10—Continued. City or town. Name of bank. OKLAHOMA—continued. Stillwater.,... Stigler DO Stilwell Stonewall Stratford Stroud Do Stuart Sulphur Tahlequah.... Do Talihina Taloga Tecumseh Do Do Temple : Thomas Tonkawa Texhoma Tulsa Do Do Do Do Do ... Tyrone Verden Do Vian Vinita Do Wagoner :. Walters Do Wanette Do Washington... Watonga Waukomis.... Waurika Do Waynoka Weatherford.. Do Webber Falls. Weleetka Wellston WestvUle Wetumka Do Wewoka Wilburton.... Woodward.... Wynnewood.. Do Yale Do Yukon Do Buffalo Do Cheyenne Do Do Codv Do Douglas Do Evanston Do Green River Kemmerer Lander LaramleCity Transit number. City or town. Name of bank. WYOMING—continued. Stillwater National. American National. First National ....do ....do ....do do Stroud National., First National... Park National... Central National. First National... ....do do Farmers National. First National Tecumseh National Temple National First National Tonkawa National First National American National Central National Exchange National First National Liberty National.! National Bank of Commerce. First National do.. National Bank of.. First National .do.. Vinita National. First National... do... Walters National.. First National.... State National.... First National..... do.. Waukomis National... First National Waurika National First National .do.. German National. First National ....do ....do ....do American National First National Farmers National Latimer County National. First National do.. Southern National. First National Farmers National.. First National Yukon National.... First National Casper National Stockmans National Wyoming National Citizens National First National Stock Growers National.. First National Shoshone National Douglas National First National . Evanston National First National do .do. .do. County Nalonalt.. Albany Laramie City. Meeteetse Newcastle Powell. Do... Rawlins.., Do. Do Kock Springs. Do Sheridan Do Shoshoni Thermopolis.. Torrington Worland. First National.. do. do. ,do. Powell National First National Rawlins National Stock Growers National.. First National Rock Springs National... First National Sheridan National First National do do do DISTRICT No. I I . Calcasleu National... First National Commercial National. First National Lake Charles.. Do Shreveport Do. OKLAHOMA. Achille Antlers Aylesworth Bochito Boswell Caddo Colbert Durant Do Hugo Idabel Kenefic Kingston TIshomingo . First N a t i o n a l . . . . . . . Antlers National..... First National ....do ,...do Security National First National Durant National First National ....do ....do ....do ....do Tishomingo National.. TEXAS. Alpine Arlington Athens Canton Clyde Coleman Commerce Corpus Christl Dallas Do Do Do Do Do Eagle Lake Ennls Do Floresville Fort Worth Do Do Do Do..... Do Gainesville Do. Galveston. Garland Glen Rose Gonzales Granbury Do Granger Hempstead First National Citizens National First National ....do ....do. Coleman National. First National Corpus Christl National American Exchange National, City National -. First State Merchants National National Bank of Commerce.. Security National First National Citizens National Ennis National City National American National. Farmers & Mechanics National. First National Fort Worth National Stockyards National Western National First National... Lindsay National First National... Citizens National. First National Farmers National City National First National do Farmers National Transit number. 210 FEDERAL RESERVE BULLETIN, AUGUST 1,1915. List of member banks which have joined the collection system List of member banks which have joined the collection system of the Federal reserve banks—Continued. of the Federal reserve banks—Continued. DISTRICT No. 12—Continued. DISTRICT No. 11—Continued. Name of bank. City or town. Name of bank. City or town. CALIFORNIA—continued. TEXAS—continued. Hillsboro Houston Do... Do Do Jacksonville KarnesCity Kemp Marshall McKinney - . . . „ , Do Memphis Mexia. Moore! Mount Calm Mount Pleasant Ochiltree Omaha Paris „ Do Pecos San Antonio Do San Marcos SanSaba Sealy Sherman Sonora Sulphur Springs Taylor Troup Weatherford Do... Wichita Falls.... Wills Point Whitney Transit number. •.,. , , , Citizens National First National Houston National Exchange... Lumbermans National National Bank of Commerce... First National Karnes County National First National Marshall National Collin County National First National Hall County National First National Moore National First National do .do. do City National.. First National, do. National Bank of Commerce... Groos National First National do. Sealy National Merchants & Planters National. First National Taylor National , First National , Citizens National , First National , do Van Zandt County National... Citizens National , IDAHO. Salmon Twin Falls...: Citizens National , FirstNational Arlington Condon Corvallis Forest Grove... Hood River Junction City. La Grande Pendleton. Do St. Johns Sheridan The Dalles.... Arlington National Condon National FirstNational Forest Grove National. FirstNational do. United States NationalAmerican National First National Peninsula National FirstNational do FirstNational. Tempe National. CALIFORNIA. Antioch Artesia Claremont Coachella Dinuba Glendora Healdsburg Hollywood National. First National City National , First National Central National.. Ontario National.. National Bank of.. First National do , .do. National Bank of D. O. Mills.., Bank of California N. A Seaboard National Wells Fargo Nevada National.. Union National: Santa Barbara County National FirstNational .do., do do do National Bank of. FirstNational Murray. DISTRICT No. 12. Tempe.. Los Angeles (Hollywood Station). Inglewood Long Beach , Mountain View Oakland.. Ontario Orange Redlands Richmond Rio Vista K Sacramento San FTancisco Do Do San Luis Obispo Santa Barbara South Pasadena Torrance Tulare Vacaville Visalia Do YubaCity First National. ,do. Claremont National First National United States NationalFirst National Healdsburg National.... WASHINGTON. Port Angeles.. Reardon Rosalia Snohomish.... Tacoma Citizens National Reardon National Whitman County National.. FirstNational National Bank of Transit number. AOGUST 1,1015. FEDERAL BESERVE BULLETIN. 211 INFORMAL RULINGS OF THE BOARD. Below are reproduced letters sent out from time to time over the signatures of the officers of the Federal Reserve Board, which contain information believed to be of general interest to Federal reserve banks and member banks of the system: held exempt from the special tax provided for by section 3 of the act of October 22, 1014. Duplicates of Capital Stock Certificates. For tho convenience of the Board will you kindly have certificates of increase of capital stock, Form 58, and certificates of decrease of capital stock, Form 59, made in duplicate, Annual Election of Directors. mailing one copy to the Comptroller of tho By direction-of the Federal Reservo Board, Currency and one to tho Federal Reservo I transmit outline of a plan relating to the Board. annual election of directors of Federal reserve banks, and the procedure to be followed therein, Committee Action on Trustee Applications. for such comment or suggestion as vou may For your information there is inclosed copy see fit to furnish. The proposed plan is as of a letter sent to Federal Reserve Agent follows: of the Federal Reservo Bank of . (1) The annual election will be fixed for the (Indosure.J third Tuesday in November, which in the case Will you accept recommendation of our of this year will be the 16th of November, 1915. executive committee on member banks' appli(2) The Federal Reserve Board will issue cations to act as trustee or must they be instructions for the grouping of banks in each passed upon by full board. district in groups of one, two, and three, and designate what groups are to elect directors. Reply: Recommendation of executive committee Except in* the case of death or resignation, there will be only one class A and one class B considered sufficient. director to be elected in each district each year, Time and Savings Deposits. to hold office for three years, or in the case of filling- a vacancy, for the unexpired term of his The Board's attitude in the past has beon that, where banks receive savings deposits predecessor. (3) The returns from the elections of class subject to enforcement of the 60-3ay notice, A and class B directors will be in and announced and where such right of enforcement was defiDecember 1, or as soon thereafter as possible, nitely made known to the depositors in the and at the same time the Federal Reserve way indicated, the deposits in question are Board will announce the name of the class C subject to 5 per cent reservo. TJbat appears to be the case with the deposits described by director named by it to fill the vacancy. (4) The Federal Reserve Board will notify you. Of course, if "the depositor is led to believe the Federal reserve banks to have a meeting for the organization of its board of directors by advertisement or printed rule" that he can and the election of officers at the first conveni- in fact get his money without notice, tho deent date within the first 15 days of January, posit does not fall within the intent of tho regulation. Nevertheless, it is true that, 1916. under the Board's ruling, banks are allo%ved to pay money to depositors without exacting Application of Internal-Revenue Tax. the enforcement of tho notice. In other Under a ruling by the Solicitor of Internal words, the notice is merely waived as a matter Revenue, dated February 15, 1915, all docu- of courtesy; and the definite understanding is ments, instruments, and things mentioned in that it may be applied at any time. Otherschedule A of the act approved October 22, wise, the deposits are in reality demand de1914, when issued by the Federal reserve posits. banks, are subject to the tax imposed by that act. A copy of the act is inclosed, and your Composition of Executive Committee. attention is directed to schedule A, appearing The Board recently received the following onpages 16 et seq. This opinion has no connection with the letter: "A short time before the opening of the opinion rendered November 28, 1914, by the you sent us a Solicitor of Internal Revenue, under which Federal Reserve Bank of the capital stock of Federal reserve banks is form of by-laws, the adoption of which at the 212 FEDEEAL EESEEVE BULLETIN. AUGUST I , 1915. . time we thought desirable. In the form sent suggest that advice be made to Goy. that, in the opinion of the Board, while it may us the following paragraph appeared: "'There shall be an executive committee be desirable for the banks not to close their consisting of the governor, the Federal reserve books until December 31, 1915, no objection agent, and one or more directors chosen from should be raised should the Federal reserve banks desire to close their books on June 30, classes A o r B ' * * * "From its reading it would be inferred that with a view to conforming to banking custom a class C director was not at any time ex- in the district." pected to serve as a third member of the executive committee. I understand, how- Eligibility of Small State Banks. ever, that in several of the banks class C In view of the provision of section 9 of the directors have the same standing and privi- Federal reserve act which requires that "'No. leges as to serving on the executive committee applying bank shall be admitted to memberas do classes A and B. ship in a Federal reserve bank unless it pos" Now since all our directors of classes A and sesses a paid-up unimpaired capital sufficient B have served as members of that committee, to entitle it to become a national banking assowe request that you inform us if there is any ciation in the place where it is situated, under reason why a class C director should not assume the provisions of the national banking act," the responsibilities connected with service it appears that the Board will be compelled to on our executive committee as a third member. refuse membership to the -——— — bank, unless it should increase its capital stock to Reply was sent as follows: 4 * Your letter of July 10, respecting the com- $200,000, which is the minimum for a national . No way position of the executive committee of your bank in a city the size of board, has been received and duly considered suggests itself oy which the Board cojiild admit this bank with its present capitalization by the Federal Reserve Board. " I am instructed to say that the board sees no reason why your board should not, if Eligibility of Building and Loan Associations. it chooses, amend its by-laws in such a way The Board,fully appreciates the vaiue of the as to permit a class C director to serve as a building and loan association, and recognizes third member of the executive committee," it as having a distinct and important place in the financial field. At the present time, howDate of Closing Books. ever, there seems to be considerable doubt With reference to your letter of July 13 whether building and loan associations would regarding the closing of books as of June 30, be held to be banks within the meaning of the 1915, you are advised that the Board's chief Federal reserve act. Assuming that they are examiner has submitted the following memo- not, it would appear that such associations randum, which appears to cover the question would not be eligible for membership in the raised: Federal reserve bank of any district where the "A number of institutions have closed out required capital has been provided through their current earnings and expense accounts subscriptions made by banks. No doubt you and established a net balance under the head- are aware that mortgages held by building and ing 'Profit and lo^s account/ This was done loan associations when liquidated by monthly in line with the general custom of banking payments extending over a period of years, institutions to close their accounts on June 30 would not be eligible for rediscount at a Federal and December 31 of each year, reserve bank. " I t would appear that Mr. Elliott is of the The changes in the conditions of membership opinion that it would be better to defer the which you suggest would require a modificaclosing out of accounts until the end of the tion of the Federal reserve act, which, of course, calendar year. is not feasible just now, Congress not being in "Personally, I believe that the question is session, even if all other concutions were favorone of policy, and it would be better to have able. uniform practice among the Federal reserve banks. At the same time, in case the banks prefer the first-mentioned method, there is Mule and Cattle Paper. no good reason why they should not be perNotes made by mule and cattle dealers should mitted to do so, so long as monthly reports be classed as mercantile rather than agricul are made to the Board as to expenses and tural paper. We take it that a note made by a earnings on the forms prescribed. Would dealer in agricultural implements would not be AUGUST 1,1915. FEDERAL RESERVE BULLETIN. regarded as agricultural paper, although the implements themselves are used for agricultural purposes, just as mules are. In fact, agricultural implements are used less frequently off the farm than are mules, which animals are often used in cities, by contractors, and for war purposes. We can see no reason, however, why a note made by a farmer in payment, or part payment, for a mule to be used in farm work should not be classed as agricultural paper, but dealers in mules and cattle are merely jobbers in merchandise, and as they generally have a mercantile rating their paper is classed as mercantile paper in the ordinary acceptation of the term. There seems to be no reason why they should be given the benefit of six months' maturities, particularly when such action would reduce your lines of long-time paper open to those engaged in purely agricultural pursuits. Interpretation of Regulation B as to Borrower's Statements. In three cases, specifically enumerated, the regulation permits waiving as to statements of the borrower's financial condition, but it is expressly stipulated, however, that the applying bank "shall certify to these conditions on the application blank m a manner to be designated by the respective Federal reserve banks." It seems clear that the Federal reserve banks have full option as to discounting or declining to discount any paper offered them, but nothing in the regulation requires a member bank to keep on file a borrower's financial statement relating to paper offered for discount. In certain cases it is provided that the Federal reserve bank can not accept such paper for discount unless statements are on file with the member bank, and in the three cases above enumerated the option is given Federal reserve banks of rediscounting paper even where a borrower's statement is not on file in the member bank. Quoting again from Paragraph III of the regulation—* " I t is recommended that every member bank maintain a file which shall contain original signed statements of the financial condition of borrowers, or true copies thereof, etc." "Member banks shall certify in their letters of application for rediscount whether the paper offered for rediscount is depositor's or purchased paper, or paper rediscounted for other member banks, and whether statements are on file. When it does not appear that such statements are on file, except as hereinafter 213 provided, * * * the Federal reserve bank shall satisfy itself as to the eligibility of the paper offered for rediscount, and member banks will be expected to use such statement forms, identifying stamps, etc., as may be prescribed by the respective Federal reserve banks." From this it would appear that the option in respect to waiving the requirement that a borrower's financial statement shall be on file rests with the member bank. Rediscounting for Nonmember Banks. Your letter of July 21, asking as to the rediscount with a Federal reserve bank of notes held by a bank not a member of the system, is received. The question, which you raise, has already had the consideration of the Board in connection with the request for an interpretation of that part of section 19 of the Federal reserve act which reads as follows: No member bank shall act as the medium or agent of a nonmember bank in applying for or receiving discounts from a Federal reserve bank under the provisions of this act except by permission of the Federal Reserve Board. Assuming that the paper offered by a member bank for rediscount is eligible under the regulations prescribed by the Board, it would be necessary in each case for the officers of the Federal reserve bank to determine whether or not the proceeds of such discount are to be used for the purpose of making a loan to a nonmember bank. If the money thus borrowed is to be re-lent to a nonmember bank, rediscount should not be accepted without the permission of the Federal Reserve Board. If, on the other hand, a member bank had in good faith acquired from a nonmember bank by rediscount notes which are eligible under the regulations of the Board for rediscount with the Federal reserve bank, and such notes were held as a part of the assets of the member bank, there would seem to be no objection to the Federal reserve bank's accepting such rediscounts, provided the officers are satisfied that the transaction is a bonafidetransaction and that the member bank did not extend accommodation to the nonmember bank with a view of rediscounting notes so acquired with the Federal reserve bank. This is one of the cases which must be left very largely to the judgment and discretion of the Federal reserve hank officers; and a determination must be reached by them on the facts in each case. AUGUST 1,1915, FEDERAL RESERVE BULLETIN. 214 DISTRICT No. 8. Trustee Powers. Trustee, executor, administrator, and registrar of stocks and bonds: . Applications from the following banks for Farmers National permission to act under section 11 (k) of the Trustee, executor, andBank, Glasgow, Ky. administrator: First National Bank, Versailles, Mo. Federal reserve act have been approved since the July issue of the Bulletin, as follows: DISTRICT NO, 10. DISTRICT NO, 1. Trustee, executor, administrator, and registrar of stocks and bonds: Yale National Bank, New Haven, Conn. Northampton National Bank, Northampton, Mass. Trustee and registrar of stocks and bonds: Citizens National Bank, Newport, N. H. Wolfeboro National Bank, Wolfeboro, N. H. DISTRICT No. 2. Begistrar of stocks and bonds: American Exchange National Bank, New York City. Irving National Bank, New York City. DISTRICT No. 3. Registrar of stocks and bonds: Third National Bank, Scranton, Pa. Trustee, executor, administrator, and registrar of stocks and bonds: Annville National Bank, Annville, Pa. First National Bank, Huntingdon, Pa. First National Bank, Johnstown, Pa. •First National Bank, Lansdale, Pa. First National Bank, Newville, Pa. Southwark National Bank, Philadelphia, Pa. National Bank of Chester County, West Chester, Pa. Trustee, executor, and administrator: Jenkintown National Bank, Jenkintown, Pa. DISTRICT NO. 4. Trustee and registrar of stocks and bonds: Ohio National Bank, Columbus, Ohio. Trustee: National Exchange Bank, Steubenville, Ohio. Citizens National Bank, Urbana, Ohio. DISTRICT NO. 5. Trustee, executor, administrator, and registrar of stocks and bonds: American National Bank, Roanoke, Va. Trustee, executor, administrator, and registrar of stocks and bonds: . Fremont County National Bank, Canon City, Colo. First National Bank, Colorado Springs, Colo. Trustee, executor, and administrator: First National Bank, Neosho, Mo. First National Bank, Lyons, Nebr. DISTRICT N O , 11. Trustee and executor: Citizens National Bank, Abilene, Tex. Trustee, executor, and registrar of stocks and bonds: First National Bank, Port Arthur, Tex. Sealy National Bank, Sealy, Tex. DISTRICT NO. 12. Registrar of stocks and bonds: Central National Bank, Oakland, Cal. Trustee, executor, and administrator: First National Bank, Mount Vernon, AVash. Trustee, executor, administrator, and registrar of stocks and bonds. Vancouver National Bank, Vancouver, Wash. Discount Rates. Discount rates of each Federal reserve bank in effect 1915. July 28, Maturities of over 60 to 90 days, inclusive. Agricultural and live-stock paper over 90 days. ? 5 5 5 5 5 5 5 5 5 5 5 6 Bank. Date of last change of rate. Boston New York Philadelphia...Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco... July 3 June 25 ...do.... Feb. 6 June 25 Apr, 30 Jan. 23 June 25 May 18 June 18 Feb. 4 June 25 MaturiMaturi- ties of ties of over JO 10 days days to and 30 days, less. inclusive. 3 3 3 3" 3" . 1 i % I t i l t I I i Maturities of over 30 to 60 days, inclusive. 4£ 4 4 4 4 4 4 i! •? 4£ 4| DISTRICT NO. 7. Authorized rate of acceptances, 2 to 4 per cent. Trustee, executor, and administrator: On March 10 the Federal Reserve Board fixed the folFarmers National Bank, Wilkinson, Ind. lowing rates for rediscounts between Federal reserve Trustee, executor, administrator, and registrar of stocks banks: 3J per cent for maturities of 30 days or less; 4 per and bonds: cent for maturities of over 30 days to 90 days, inclusive. Franklin National Bank, Franklin, Ind. On July 22 the Federal Reserve Board approved a rate First National Bank, Fonda, Iowa. of 3£ per cent for rediscount of trade acceptances at the First National Bank, Rochester, Mich. Federal Reserve Bank of New York. ACIGUST 1, 1915. FEDERAL RESERVE BULLETIN. 215 CIRCULARS AND REGULATIONS. The circulars and regulations given below amount of such notes to be retired less a ratable proportion were issued by the Board since the July issue of the amount of money standing to its credit in the gold redemption fund with the Treasurer of the United States. of the Bulletin: REGULATION O, SERIES OF 1915. WASHINGTON, July 6, 1915. REGULATIONS TOR THE GUIDANCE OF FEDERAL RESERVE AGENTS IN THE MATTER OF ISSUANCE AND REDEMPTION OF FEDERAL RESERVE NOTES. 1. Federal reserve agents in making requisitions for Federal reserve notes to meet applications of Federal reserve banks, shall use form 45. 2. A Federal reserve bank in making application for an issue of Federal reserve notes shall accompany the application with a tender of the requisite collateral, UBing for this purpose form BD 21-1. 3. The Federal reserve agent shall receipt for all collateral accepted by him as fulfilling the requirements of sections 13 and 16 of the Federal reserve act and the regulations and instructions of the Federal Reserve Board made pursuant thereto, using for this purpose the appropriate form (either BD 21-2 or BD 22-2), and shall promptly notify the Federal Reserve Board of the colateral accepted, using for this, purpose the appropriate form (either BD 21-3 or BD 22-3); and shall, furthermore, report to the Federal Reserve Board each day all notea issued to and withdrawn by said bank, using form FRA 5. 4. Upon receipt of the said collateral and upon being satisfied that the bank has the required gold reserve to protect its notes, and has, furthermore, taken appropriate steps to transmit to the Treasurer of the United States the requisite gold redemption fund, at present fixed at 5 per cent of the net amount of notes issued to the bank, lees the amount of gold and lawful money in the hands of the Federal reserve agent, the latter will issue Federal reserve notes to said bank within such limits as the Federal Reserve Board may have fixed, and immediately notify the Federal Reserve Board of said issue on form supplied for this purpose. 5. If at any time the Federal reserve agent deems it necessary to require changes in either the amount or the character of collateral deposited to secure notes, he shall, acting for the Federal Reserve Board, call upon the Federal reserve bank for additional or new collateral to be added to or substituted for that which is deemed unsatisfactory; issuing receipt therefor on the appropriate form (either BD 21-2 or BD 22-2), and shall notify the Federal Reserve Board on the appropriate form (either BD 21-3 or BD22-3). 6. A Federal reserve bank may reduce its liability on account of outstanding Federal reserve notes by depositing with the Federal reserve agent its-own notes, or gold, gold certificates, or lawful money of the United States to the In either case a proportionate amount of the collateral deposited by the bank shall be returned to it by the Federal reserve agent. Forme BD 28-1, 2, 3, will bo used. 7. A Federal reserve bank may, through its Federal reserve agent, exchange notes that are unfit for circulation, or may exchange notes of one denomination for those of another. Every such transaction shall bo reported to the Federal Reserve Board by the Federal reserve agent in daily report of transactions in Federal reserve notes. 8. Federal reserve notes unfit for circulation accumulated by any Federal reserve agent shall be assorted, strapped, canceled, and bundled in the manner now proscribed by the Treasury Department for unfit United States currency which is remitted by subtreasuriea to Washington, and the same standard of fitness shall be imposed. These shall be shipped to the Comptroller of the Currency, Division of Federal Reserve Note Redemption, Washington, D. C. Special instructions accompanied by "dummies" exhibiting the methods to be employed will be furnished upon request to each Federal reserve agent. NOTE.—The Board expects later to issue instructions under which notes which are soiled, but otherwise fit for circulation, may be forwarded to Washington for laundering and renovating. 9. Whenever Federal reserve noteB issued by one Federal reserve bank are received by another Federal reserve bank, they shall, if fit for circulation, be immediately returned to the issuing bank for credit or redemption. However, if such notes are unfit for circulation, the issuing bank shall be advised of the amount and the notes shall be delivered to the local Federal reserve agent, who will forward them to the Treasury Department in the manner provided in paragraph 8 for the treatment of unfit; notes returned by the issuing bank. Upon receipt of such notice the bank of issue may make a demand upon the local Federal reserve agent for credit or for the issue of new notes to replace the unfit notes forwarded to the department for destruction. All transactions in these respects must be reported immediately to the Federal Reserve Board. 10. If at any time the gold reserve required by law to be held by a Federal reserve bank against Federal reserve notes issued to it falls below 40 per cent (including therein the gold redemption fund required to be maintained in the Treasury) the Federal reserve agent shall at once notify the Federal Reserve Board, and thereupon until otherwise directed by the Federal Reserve Board, a graduated tax upon such deficiency as provided in section 11 of the Federal reserve act shall be established and shall be computed for the present as follows: When reserves fall below 40 per cent but are in excess of 32J per cent, the tax upon the deficiency shall be at the rate of 1 per cent per annum. 216 FEDERAL EESEBVE BULLETIN, When reserves fall below 32J per cent but are in excess of 30 per cent, the tax upon the entire deficiency below 40 per cent shall be at the rate of 2* per cent per annum. When reserves fall below 30 per cent but exceed 27$ per cent, the tax upon the entire deficiency below 40 per cent shall be at the rate of 4 per cent per annum; and so on, increasing at the rate of 1J per cent with each reduction in reserve amounting to 2£ per cent or any fraction thereof. This is otherwise expressed in the following table: Penalty tax on defiGold reserves against Federal reserve notes: ciency in reserves. 40 per cent (legal minimum, including redemption fund) Nopenalty, 37J up to 40per cent 1 percent. 35 up to 37£ per cent 1 percent. 32J up to 35 per cent 1 percent. 30 up to 32^ per cent 2J per cent. 27J up to 30 per cent 4 percent. 25up to 27£per cent 5$ percent. 22J up to 25 per cent 7 percent, 20 up to 22J per cent 8fc per cent. 17| up to 20 per cent 10 percent. 15 up to 17J per cent 11J per cent. 12J up to 15 per cent 13 percent. 10 up to 121 per cent 14$ per cent. 71 up to 10 per cent 16 percent. 5 up to 71 per cent 17J per cent. 2} up to 5 per cent 19 percent. 0to21percent 2O4p e rcent. 11. At the close of business on the last day of each month each Federal reserve agent shall furnish the Federal Reserve Board with a consolidated statement of— (a) All transactions in Federal reserve notes during the month, showing for each denomination the number of notes on hand at the beginning of the month. (b) The number received from the Comptroller of the Currency during the month, the number returned by the Federal reserve bank, and the number issued to the Federal reserve bank. (c) The number returned during the month to the Comptroller of the Currency for cancellation and destruction, (d) The number on hand at the close of the month. Agents are required to show in addition: (e) The total amount of notes in circulation at the end of the month, (/) The total amount of each kind of money of the United States in hand for retirement of notes. (g) The amounts transmitted during the month to the Treasurer, upon direction of the Federal Reserve Board, at the request of the Secretary of the Treasury, (h) The amount of gold on deposit, with the Treasurer of the United States at the end of the month, for the redemption of outstanding notes. (i) The amount of gold reserve hold by the bank, other than the gold redemption fund deposited with the Treasurer of the United States. The information in paragraphs t to % inclusive, also is required to be furnished by telegram immediately at the close of business on the last day of each month for inclu- AUGUST 1,1915. sion in the Treasury Department's circulation statement. A consolidation of each month's reports from all the Federal reserve agents will be furnished by the Federal Reserve Board to the Secretary of the Treasury. 12. The Federal Reserve Board will maintain a continuous record of: (a) The aggregate amounts of orders for notes transmitted by the Comptroller of the Currency for the engraving and printing of Federal reserve notes. (b) Each delivery of Federal reserve notes to Federal reserve agents. (c) The stock of notes on hand in the Treasury of the United States available for shipment. (d) The amounts of Federal reserve notes issued through Federal reserve agents to their respective Federal reserve banks. (e) The amount of notes fit and unfit for circulation which are in the possession of each Federal reserve agent. (/) The amount of notes unfit for circulation which have been returned to the Comptroller of the Currency and destroyed, CHARLES S. HAMUN, Governor. H. PARKER WILLIS, Secretary. CIRCULAR NO. 16, SERIES OF 1915. WASHINGTON, July 15, 1915, BILLS OF EXCHANGE DRAWN AGAINST SALES OP GOODS AND ACCEPTED BY PURCHASERS, HEREINAFTER REFERRED TO AS "TRADE ACCEPTANCES." By Regulation B, Series of 1915, the Board has prescribed the conditions upon which commercial paper may be rediscounted with Federal reserve banks, and, by Regulation J, Series of 1915, rules have been promulgated covering operations in bankers' acceptances. The attached regulation is to deal with "trade acceptances" as a distinct class of commercial paper, for which the Board is ready to approve the establishment of a discount rate somewhat lower than that applicable to other commercial paper. These trade acceptances are more particularly defined in the appended Regulation P, Series of 1915, and in promulgating it the Board expresses the belief that it will considerably enlarge the scope of service of Federal reserve banks and, incidentally, assist in developing a class of "double-name" paper, which has shown itself in so many countries a desirable form of investment and an important factor in modern commercial banking systems. CHARLES S. HAMLIN, Governor, H. PARKER WILLIS, Secretary. AUGUST l f 1915. FEDERAL RESEBVE BULLETIN. REGULATION P, SERIES OP 1915. WASHINGTON, July 15,1915. BILLS OF EXCHANGE DRAWN AGAINST SALES OP GOODS AND ACCEPTED BY PURCHASERS, HEREINAFTER REFERRED TO AS "TRADE ACCEPTANCES." I. In this regulation the term "trade acceptance" is defined as a bill of exchange of the character hereinafter described, drawn to order, having a definite maturity and payable in dollars in the United States, the obligation to pay which has been accepted by an acknowledgment, written or stamped, and signed across the face of the instrument by the company, firm, corporation, or person upon whom it is drawn; such agreement to be to the effect that the acceptor will pay at maturity, according to its tenor, such draft or bill without qualifying conditions. n. CHARACTER OF PAPER ELIGIBLE. A trade acceptance to be eligible for rediscount, under section 13, with a Federal reserve bank at the rate to be established for trade acceptances— (a) Must be indorsed by a member bank, accompanied by waiver of demand notice and protest. (b) Must have a maturity at the time of discount of not more than 90 days. (c) Must be accepted by the purchaser of goods sold to him by the drawer of the bill, and the bill must have been drawn against indebtedness expressly incurred by the acceptor in the purchase of such goods. HI. 217 Conference of Chief Bank Examiners. There was held on July 12-14 at the offico of the Comptroller of the Currency the first general conference of chief national bank examiners, of whom there are 12—one for each of the 12 Federal reserve districts. The following chief examiners were present: Jas. D. Brennan, Boston. Chas. Starek, New York. E. I. Johnson, Philadelphia. Silas H. L. Cooper, Cleveland. Thos. P. Howard, Richmond. C. H. Abbott, Atlanta. Sherrill Smith, Chicago. C. E. French, St. Louis. Peter M. Kerst, Minneapolis. J. D. Rising, Kansas City. J. C. Chidsey, Dallas. The only absentee was Chief Examiner Gatch, of the San Francisco district. The chief examiners were directed to cooperate as closely as possible with the Federal reserve banks of their respective districts in matters calculated to increase the safety and promote the welfare of the member banks. The chief examiners were directed, upon their return to their respective districts, to call a conference of the examiners of each district with a view to informing them individually of the matters discussed at the Washington conference. METHOD OF CERTIFYING ELIGIBILITY. A trade acceptance must bear on its face or be accompanied by evidence in form satisfactory to the Federal reserve bank that it was drawn by the Beller of the goods on the purchaser of such goods. Such evidence may consist of a certificate on or accompanying the acceptance, to the following effect: "The obligation of the acceptor of this bill arises out of the purchase of goods from the drawer." Such certificate may be accepted by the Federal reserve bank aa sufficient evidence; provided, however, that the Federal reserve bank, in its discretion, may inquire into the exact nature of the transaction underlying the acceptance. CHARLES S. HAMLIN, Governor. H. PARKER WILLIS, Secretary, Purchase of Government Bonds* The Federal Reserve Board has reached the conclusion that Government bonds, bought by Federal reserve banks prior to December 31, 1915, shall not count as a part of the sum of $25,000,000, which the Federal Reserve Board may, in its discretion, under the provisions of Section 18 of the Federal reserve act, annually require Federal reserve banks to purchase from the member banks whose applications for sale of their bonds have been filed with the Treasurer of the United States. 218 FEDERAL BESEBVE BULLETIN. AUGUST 1,1915. LAW DEPARTMENT. Right of State Banks and Trust Companies to Subscribe for Stock in a Federal Reserve Bank. Since the publication of the last issue of the Bulletin, it has been learned that Louisiana passed a law hi 1914 authorizing State banks, savings banks, and trust companies to subscribe to stock in a Federal reserve bank. A revised list of those States which have enacted laws expressly authorizing any State bank to become a member bank follows: Idaho, Iowa, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New York, North Dakota, Ohio, Oregon, South Carolina, South Dakota, Texas, Utah, Virginia, Washington. In the following States, though there has been no express enabling legislation, the State authorities have ruled that any State bank may subscribe for stock in a Federal reserve bank: Alabama, Arizona, Arkansas, California, Delaware, Georgia, Illinois, Indiana, Kansas, Maryland, North Carolina, Tennessee, Vermont, West Virginia, and Wisconsin. The State authorites have ruled in New Mexico and Rhode Island that trust companies, as distinct from State banks, are eligible to subscribe to stock in a Federal reserve bank. The following opinions of counsel for the Federal Reserve Board have been authorized for publication by the-Board'since'the last edition of the Bulletin: Surrender of Stock by a Member Bank Reducing Its Surplus. The Federal reserve act does not require that a member bank necessarily surrender a proportionate part of its stock in the Federal reserve bank of which it is a member when it reduces its surplus. 'Such surrender is left to the dis. cretion of the Federal reserve bank, subject to the approval of the Federal Reserve Board. JUNE 17, 1915. SIR: The question has been raised whether a member bank which reduces its surplus is required by law to surrender a proportionate amount of the stock held by it in the Federal reserve bank of its district, or whether such Federal reserve bank may, at its option, permit the stock representing 6 per cent of such decrease in surplus of a member bank to remain outstanding. The Federal reserve act provides hi section 2 that— Every national banking association * * * shall be required * *. * to subscribe to the capital stock of such Federal reserve bank in a sum equal to 6 per cent of the paid-up capital stock and surplus of such bank. Section 5, in providing for the admission of a bank after the organization of the system, contains a provision that such a bank— Must subscribe for an amount of the capital stock of the Federal reserve bank equal to 6 per cent of the paid-up capital stock and surplus of said applicant bank. It is to be noted that in both of these sections an applying bank must subscribe for an amount equal to 6 per cent of its capital stock and surplus. Section 5 further provides that— "When a member bank increases its capital stock or surplus it shall thereupon subscribe for an additional amount of capital stock," It is thus clear that when a member bank increases either its capital stock or its surplus it must subscribe for additional stock. This conclusion is corroborated by the requirement that the outstanding capital stock of a Federal reserve bank " shall be increased from time to time as member banks increase their capital stock and surplus/' In dealing with the question of reduction in the capital stock of a Federal reserve bank, however, the act contains no mandatory provision for decrease of such stock on account of reduction hi the surplus of a member bank. The specific language used in section 5 in reference to this subject is as follows: The capital stock of each Federal reserve bank shall be divided into shares of $100 each. The outstanding capital stock shall be increased from time to time as member banks increase their capital stock and surplus or as additional AUGUST l, 1915. FEDERAL RESERVE BULLETIN. 219 banks become members, and may be decreased ! Rediscount of Drafts Payable on Condition. as member banks reduce their capital stock or A draft made "payable on arrival of car" is nonnegotisurplus or cease to be members. able, not being payable at a doterminablo future time, and is therefore ineligible for rediscount by a Federal This section further provides that— reservo bank. When a member bank reduces its capital FEBRUARY 23, 1915. stock it shall surrender a proportionate amount SIR: The question has been raised whether of its holdings in the capital stock of said Federal reserve bank. drafts "payable on arrival of car" are eligible A distinction is therefore made between the for rediscount by Federal reserve banks. Section 13 of tho Federal reservo act proreduction of the capital stock and the reducvides that any Federal reserve bank may distion of the surplus of a member,bank. An examination of the bill as it passed the count "notes, drafts, and bills of exchange 1 House shows that stock of Federal reserve banks arising out of actual commercial transactions, * was to be increased only on account of an in- and, though this language does not in express crease in the number of member banks, or on terms demand that the paper be negotiable, it account of an increase in the capital stock of must bo so construed because of tho whole member banks, and was to be reduced on ac- spirit and purpose of the act. The act evidently contemplates that title to count of decrease in the number of member eligible paper must pass with it and that in banks or a decrease in the capital stock of such event of nonpayment a Federal reserve bank banks. In the Senate this section was amended so as must be able to sue in its own name on such to require an increase of the capital stock of paper. To secure these rights the paper must Federal reserve banks whenever member banks be negotiable, otherwise the transfer would conincreased either their capital stock or surplus, stitute a mere assignment and the holder would but this amendment did not specifically require have to sue in the name of the payee. It must a Federal reserve bank to reduce its capital also be noted that if the paper is not negotiable stock whenever the surplus of a member bank a Federal reserve bank rediscounting it would is reduced. That part of the section above hold it subject to the equities existing between quoted which makes such decrease discretionary the original parties to the bill. The same limiwith the Federal reserve bank was added by tations would be imposed on the Federal reserve the Senate committee and was adopted in the agent holding such paper as security for Federal reserve notes. The natural construction conference agreement. I t seems reasonable to assume, therefore, that of the act, therefore, is that paper must be negoCongress contemplated that a reduction in the tiable in order to be eligible for rediscount. The question here presented is whether a surplus of a member bank might be merely draft "payable on arrival of car" is negotiable. temporary and accordingly vested a discretion in the Federal reserve bank to cancel a propor- A draft to be negotiable must be an unconditionate amount of the capital stock held by a tional order to pay to the bearer or order a defimember bank the surplus of which is reduced, nite sum of money on demand or at a deteror to permit such stock to remain outstanding. minable future time. The drafts referred to I am, therefore, of the opinion that the Fed- above do not seem to comply with these condieral reserve banks may, with the approval of tions. Should the car fail to arrive, for any cause whatever, the draft would not be paythe Federal Reserve Board, legally exercise this able. The event or contingency upon which discretion. payment depends must be one which must necRespectfully, essarily happen in the natural course of the M. C. ELLIOTT, Counsel. laws of nature. (Weidler & Carpenter v. To Hon. CHARLES S. HAMLIN, Kauffman, 14 Ohio, 455.) Governor Federal Beserve Board. 220 FEDERAL RESERVE BULLETIN. The negotiable instruments law, section 4, which is based on settled decisions, provides that— An instrument is payable at a determinable future time, within the meaning of this act, which is expressed to be payable— (3) On or at a fixed period after the occurrence of a specific event, which is certain to happen, though the time of happening be uncertain. In the case of Colehan v. Cooke (Willes, 393), a note payable ten days after the death of the maker's father was held good on the ground that the father must die at some time and payment, therefore, was not dependent on the happening of an event which might fail to occur. But in the case under consideration— that is, drafts "payable on arrival of car"— there is no certainty whatever that the car will arrive, and such paper would probably be held to be nonnegotiable on two grounds: First, that it is not an unconditional promise to pay; and second, that the time of payment is not fixed and certain, because of the fact that the event by which it is determinable need not necessarily ever occur. In all the cases examined on this point there seems to be only one exception to this general rule, that the note or bill must be payable at all events. That case is an English one decided some time ago. (Andrews v. Franklin, 1 Strange, 24.) A note payable two months after a certain ship was paid off was held negotiable even though the event was not necessarily bound to occur. The court in this case, however, admitted that paying off the ship was a contingency which would ordinarily make the note nonnegotiable, but went on to explain that because this ship was a Government one, the payment was a Government obligation which must be performed. But even on this ground, the case has always been discredited by courts in which it has been cited. It seems, therefore, that a note or draft "payable on arrival of car/7 which may or may not arrive, would very probably be held ADGDSX 1,1915. nonnegotiable, both at common law and under the Negotiable Instruments Law. Respectfully, M. C, ELLIOTT, Counsel. To Hon. C S, HAMLIN, Governor Federal Reserve Board. Payment of Dividends by Federal Reserve Banks. Federal reserve banks should not at this time undertake to pay semiannual dividends or to carry any profits to surplus account before the end of the fiscal year. JlTNE 25, 1915. SIR: The question has been raised whether a Federal reserve bank may declare a dividend as of June 30, at the rate of 6 per cent per annum, for the time elapsed between November 16, 1914, and June 30, 1915. It appears from the provisions of section 7 of the Federal reserve act that Congress intended that dividends should be paid annually and not in semiannual instalments. It is conceivable that a bank might show a surplus as the result of the first six months' operations and a loss for the last six months. If, therefore, a dividend should be declared at the end of six months an impairment of capital might be shown according to the books at the end of the year which would not have resulted except for the payment of the dividend. After the dividend has been paid and the required amount has been carried to the surplus account, the balance of earnings resulting from the year's operations is payable to the United States as a franchise tax. The amount of this tax can not be determined until the end of the year. Banks should, therefore, carry all net earnings in the account of Undivided Profits until the end of the fiscal year and should then declare a dividend, and the balance, if any, should be paid half to the United States as a franchise tax and half into the surplus fund, as provided by section 7. When the banks have been in operation for a sufficient length of time to enable them to estimate with reasonable accuracy their annual earnings and expenses, the Board might, in case AUGUST 1, 1915. FEDEEAL RESERVE BULLETIN. the Undivided Profit Account shows a sufficient amount to cover all contingencies, authorize the payment of the dividend in semiannual instalments, but until that time the letter of the statute should be followed strictly in order to avoid probable complications. Respectfully, M. C. ELLIOTT, Counsel. To Hon. C. S. HAMLIN, Governor, Federal Reserve Board, Interpretation of Regulation F» Series 1915. The term "taxable property" as used in Regulation F - I - ( c ) - 3 7 Series 1915, includes franchises in cases where such franchises are actually taxed upon the valuation set forth in the municipality's return of taxable property. That part of section 14 which provides that "revenue bonds * * * with a maturity from date of purchase of not exceeding six months" may be purchased, contemplates that such bonds might at the date of issue have a maturity of longer than six months. Bonds are eligible for purchase under this Bection if at the time of issue provision is made for the establishment of a redemption fund which will be sufficient and available for the payment of the bonds at maturity, provided, of course, that at the time of purchase the bonds have not more than six months to run. Certified copies of opinions of counsel on municipal issues may be used by Federal reserve banks under the provisions of this regulation irrespective of which bank obtained the original opinion. FEBRUARY 9, 1915. SIR: The following questions have been referred to this office by the Board for an opinion: (1) Under regulations F-(I)-(c)-3, does the term "taxable property" include franchises where such franchises are actually taxed upon the valuation set forth in the city's return of taxable property % (2) Under section 14 of the Federal reserve act, subsection (6) where the Federal reserve bank is authorized to "buy and sell * * * bilk, notes, revenue bonds and warrants with a maturity from date of purchase of not exceeding six months/' does this language permit the purchase of bonds having long maturities but which are acquired by a Federal 221 reserve bank within six months of the date of maturity; and if so, under what circumstances may such purchases be made ? In answer to question (1), regulation F reads in part as follows: I. A. Federal reserve bank may purchase such warrants as are issued by a municipality. * * * (c) 3. Whose net funded indebtedness does not exceed ten per centum of the valuation of its taxable property, to bo ascertained by the last preceding valuation of property for the assessment of taxes. This provision is not contained in the statute but is a matter of regulation. The language to be construed is accordingly that of the Board, and it is within its discretion to determine whether or not the term "taxable property" shall include franchises. The courts have generally construed a franchise to be property subject to taxation and so giving the language "taxable property" its ordinary interpretation it would seem clear that franchises which are actually taxed and which are included in the city's return of taxable property should be taken into consideration in determining the net funded indebtedness as provided in Regulation F* In the case of the West River Bridge Company v. Dix et al (6 How. (U. S.), 507-533), the court said: A franchise is property, and nothing more: it is incorporeal property, and is so defined by Justice Blackstone when treating in his second volume. (Ch. 3, p. 20) of the Rights of Things. In the case of Society for Savings v. Coite (6 Wall (U. S.), 594-606), the court holds that the franchise of a private corporation is a legitimate subject of taxation. This doctrine is affirmed in the case of Provident Institution v. Massachusetts (6 Wall (U, &), 611-623), and again in the case of Hamilton Company v. Massachusetts (6 Wall (U. S.), 632-638). In answer to the second inquiry submitted, the act provides that "revenue bonds * * * with a maturity from date of purchase of not exceeding sLx months" may be purchased. The provision that such bonds must mature 222 FEDERAL RESERVE BULLETIN. within six months from the "date of purchase" clearly indicates that Congress contemplated that such bonds might have a maturity of longer than six months at the date of issue. It is true that the term "revenue bonds" is sometimes construed to refer to short-term bonds or warrants issued by municipalities to defray expenses for a short period prior to the collection of taxes. The word "revenue," however, does not of itself limit the term of a bond to that of a fixed maximum maturity but instead refers to the character or nature of the bond rather than to the time of its maturity. In other words, giving the language its ordinary interpretation, it would seem merely to indicate bonds of any maturity, payment of which is guaranteed out of the collection of taxes or assured revenues. The act specifically provides that such bonds must be issued in anticipation of the collection of taxes or assured revenues, but does not prescribe how long in advance of collection of such taxes the bonds may be issued. The provisions of the act would seem to be complied with if at the time of issue provision is made for the establishment of a redemption or sinking fund which will be sufficient and available for the payment of the bonds at maturity and at the time of their purchase they may be said, by reason of such sinking fund, to be self-liquidating at the expiration of six months. It i3, of course, understood that all other provisions of regulation F, series 1915, must be complied with before such bonds may be purchased. In this connection I beg to call attention to Paragraph VI, regulation F, which is as follows: "Opinion of recognized counsel on municipal issues or of the regularly appointed counsel of the municipality as to the legality of the issue shall be secured and approved in each case by counsel for the Federal reserve bank," The Board has ruled that where such opinions have been procured and approved by counsel for a Federal reserve bank, any other Federal reserve bank shall be deemed to have complied AUGUST 1,1915. with the requirement of this paragraph if it secures a certified copy of such opinion and approval. Respectfully, (Signed) M. C. ELLIOTT, Counsel* To Hon, CHARLES S, HAMLIN, Governor Federal Reserve Board. Interpretation of Clayton Act. The counsel of the Federal Reserve Board has prepared the following opinion in answer to a number of letters received by the Board and referred to him for consideration which involve an interpretation of section 8 of the act approved October 15, 1914, and generally described as the Clayton Act. While the provisions of section 8 do not, under the terms of the act, become operative until two years from the date of its passage—that is to say, until October 15, 1916—it appears to be necessary for the banks to obtain rulings on certain questions in order to arrange for the personnel of their boards of directors after this time. The two questions which are the subject of most of the letters referred to are as follows: (1) If a director of a national bank having deposits, capital, surplus, and undivided profits aggregating more than $5,000,000 is elected at the annual meeting in January, 1916, may he, without violating section 8 of the act referred to, continue to serve until January, 1917, and at the same time serve as a director of another national bank ? (2) Can a director of a State bank or trust company having deposits, capital, surplus, and undivided profits aggregating mork than $5,000,000 serve after October 15, 1916, a3 a director of another State bank or trust company which is a member of a Federal reserve bank? Both of these questions involve a consideration of that part of section 8 of the act referred to which reads as follows: That from and after two years from the date of the approval of this act no person shall at the same time be a director or other officer or employee of more than one bank, banking associa- AUGUST 1,1915. FEDERAL KESEBVE BULLETIN. tion or trust company, organized or operating under the laws of the United States, either of which has deposits, capital, surplus, and undivided profits aggregating more than $5,000,000; and no private banker or person who is a director in any bank or trust company, organized and operating under the laws of a State, having deposits, capital, surplus, and undivided profits aggregating more than $5,000,000 shall be eligible to be a director in any bank or banking association organized or operating under the laws of the United States. The eligibility of a director, officer or employee under the foregoing provisions shall be determined by the average amount of deposits, capital, surplus, and undivided profits as shown in the official statements of such bank, banking association, or trust company filed as provided by law during the fiscal year next preceding the date set for the annual election of directors, and when a director, officer, or employee has been elected or selected in' accordance with the provisions of this act it shall be lawful for him to continue as such for one year thereafter under said election or employment. This act became a law on October 15, 1914. As above shown, it provides in terms that after two years from that date (that is to say, Oct. 15,1916) "no person shall at the same time be a director * * •* of more than one bank * * * organized or operating under the laws of the United States, either of which has deposits, capital, surplus, and undivided profits aggregating more than $5,000,000/' This language is free from ambiguity and makes it entirely clear that after October 15, 1916, a person who -is a director of a bank with aggregate resources of more than $5,000,000, organized or operating under the laws of the United States or under the laws of any State, shall be ineligible to serve as a director of any other bank organized under the laws of the United States. In determining whether a bank has aggregate resources of more than $5,000,000, the act provides that the aggregate amount of deposits capital, surplus, and undivided profits of such bank, as shown in the official statement filed during the fiscal year next preceding the date set for the annual election of officers, shall be taken as a basis, and then provides that— When a director has been elected in accordance with the provisions of this act it shall be 223 lawful for him to continue as such for one year thereafter under said election or employment. The obvious purpose of this provision is to permit a director to serve out his term if the bank has aggregate resources of less than 85,000,000 at the time of his election but subsequently the resources are increased to an amount in excess of §5,000,000. It has been suggested that by reason of this provision directors elected in January, 1916, may continue to serve until January, 1917, although they would be ineligible if elected after October 15,1916. It will be observed, however that the language quoted is "a part of the same sentence which fixes the time for calculating the aggregate resources of the bank in order to determine the eligibility of such director, and following the ordinary rules of interpretation of statutes it is necessary to consider the context in order to determine when a director has been elected in accordance with the provisions of the act. Considering this sentence as a whole it seems clear that if a bank has aggregate resources of more than $5,000,000 on January 1, 1916, the stockholders are charged with notice that after October 15, 1916, a director of such bank will be ineligible to serve on the board of any other bank organized or operating under the laws of the United States. While Congress manifestly intended to give banks two years from the date of the passage of the act to adjust the personnel of their boards of directors in order to conform to the requirements of the act referred to, it is equally manifest that it did not intend to allow more than two years for this purpose and the first question should, in the opinion of this office, be answered in the negative. The determination of the second question depends upon the construction to be placed upon the language "organized or operating under the laws of the United States." As above shown, a person who is a director of a national bank, State bank, or trust company having aggregate resources of more than $5,000,000 is ineligible to serve on the board 224 FEDERAL KESEBVE BULLETIN. of directors of another bank organized or operating under the laws of the United States. State banks and trust companies are organized under the laws of the State in which they are incorporated and exercise those corporate powers which are granted them by the laws of the State, or which are incidental to the powers thu3 granted. In a certain sense, therefore, they may be said to be both organized and operating under the laws of the State. On the other hand, when such banks become members of the Federal reserve system they subject themselves to certain Federal laws. For example, they must maintain reserve required by the Federal reserve act; they are subject to examination and supervision by Federal authorities, and must conform to certain laws relating to investment of their funds. Accordingly, they may be said to be operating under both State and Federal law. Congress has specified certain requirements to which State banks and trust companies must conform as a condition of membership in the Federal reserve system. It is, therefore, necessary to determine whether it was the intention of Congress, by section 8 of the Clayton Act, to provide as a further condition of membership in the Federal reserve system, that the directorates of such banks shall not include any person who is a director of another bank having aggregate resources of more than $5,000,000. From an examination of the original bill introduced by Mr. Clayton on April 14, 1914, it AUGUST 1,1915. appears that the section above quoted originally read as follows: That from and after two years from the date of the approval of this act no person shall at the same time be a director * * * of more than one bank * * * organized and operating under the laws of the United States, either of which has deposits, capital, surplus and undivided profits aggregating $2,500,000 In the amended bill of May 6, 1914, the language " organized and operating under the laws of the United States" was changed to read "organized or operating under the laws of the United States" and this language was retained by the Senate, by the conferees and in the act as it became a law. The use of the word " o r " in place of the word lt and" is, therefore, significant, and in order to give it a reasonable meaning it is necessary to conclude that Congress intended this provision to apply to State banks and trust companies which, though organized under State law, operate under the laws of the United States when they become members of the Federal reserve system, as well as to national banks which are organized and operate under the laws of the United States. In the opinion of this office, therefore, a person who is a director or other officer of a bank having aggregate resources of more than $5,000,000 will be ineligible to serve on the board of directors of a State bank or trust company which is a member of the Federal reserve system after October 15, 1916. Both questions should, accordingly, be answered in the negative. AUGUST 1, 1915. GENERAL BUSINESS CONDITIONS. General business and banking conditions are described in reports made by Federal reserve agents for the 12 Federal reserve districts. Below are given in detail digests of conditions in the various districts substantially as reported by Federal reserve agents. DISTRICT NO. 1—BOSTON. There is little change in this district over last month. While the business situation, both in business and financially, is in a healthy condition, there is a general hesitancy, due to the unsettled conditions produced by the war in Europe. Although money continues to accumulate in the large cities and is freer in the country districts, banks are disinclined to put out money at the low prevailing rates, the feeling being that as the crop-moving time approaches there will be a better demand for money and an improvement in rates. There seems to be a gen. eral feeling that rates have touched bottom and that from now on an improvement may be expected. General business, except in a few lines, is dull, and orders are not coming in as freely as heretofore. No accumulation of goods is reported in any of the lines, and the high price of staples especially in leather and wool^ and the unwillingness of the merchants to increase their merchandise is responsible, no doubt, for much of the dullness. This is especially noticeable in the trades using wool and leather. Business seems to be waiting, but thereis a feeling of optimism, and it is believed that from now on an improvement may be expected, though perhaps a very slow one. The unseasonable weather and the abundance of rain have no doubt also had their effect. The summer resorts, both seashore and mountain, complain of dull business. Money conditions are about the same as last month, with perhaps a slight hardening. There is very little demand for money and rates continue very easy—call money to brokers, 3 per cent; commercial paper, 3J to 4J per cent; loans to correspondents, 3£ to 4 per cent; town 225 FEDERAL RESERVE BULLETIN. notes, 2J to 2£ per cent; bank acceptances, 2\ to 2$ per cent; excess reserve in Boston banks, $45,974,000, an increase of $10,105,000 over last month and an increase of $36,008,286 over the same date last year. The cotton mill situation in New Bedford and other fine-goods centers continues good. On the other hand, the reports from Fall River are not quite as satisfactory as before and the cotton mill situation is slightly duller, owing to the fact that mills hesitate to buy cotton to any extent, and accumulate goods. The shoe and leather trade, while reporting fewer foreign orders, shows a slight improvement in general. The high price of leather has no doubt deterred dealers from placing their usual seasonable orders, but most of the manufacturers feel that the conditions are certain to improve. The wool and woolen trade is dull. Here again the high price of wool has been a deterrent feature. Wool dealers, for the most part, have made considerable money during the past season, and are disinclined to replenish their stock at present prices and the price of this staple is no doubt affecting the mill situation as well as the goods, and a hand to mouth policy of buying is the rule. Imports and exports to July 1 compared with a year ago are as follows: Exportsfirstsix months: 1914 1915 Imports first six months: 1914 1915 . " $30,282,075 65,792,193 $99,439,188 89,139,744 Building operations up to the 1st of July as compared with the preceding years are as follows: Contracts awarded to date, June 30: 1915 1914 1913 $85,111,000 89,212,000 86,174,000 DISTRICT NO. 2—NEW YORK. Reports from bankers in New York and northern New Jersey state that crops look very well and promise large yields, but in some sections the hay crop will be under average, due to wet weather. The dairy business 226 FEDERAL EESEBVE BULLETIN. continues good. Some complaints have been received of slackness in retail trade and unsatisfactory collections. Manufacturing in steel, leather, and textile lines shows improve" ment. Great activity continues in the production of supplies for shipment to Europe Building operations are curtailed and depression is still evident in lumber, foundries, implement works, and silk mills. Strikes that were referred to a month ago are still on in southern and northern districts. Deposits generally are large, but in most sections the demand for loans is very light. During June the usual mid-year inventory time dullness prevailed in New York City. Improvement in retail trade has been reported recently. Wholesale houses state that collections are very satisfactory. More active and firmer markets have developed, largely from foreign orders, in such lines as steel, coal* leather, and wool. Purchases of cotton goods are restricted by the weakness in the price of raw cotton. Labor is more fully employed and there are strikes in some branches of the clothing trade. Real Estate agents report conditions better than a year ago and improved over the preceding month. Renting is more active, especially in the large office buildings. A comparison of various statistics for June, 1915, with June, 1914, shows the following changes: Exchanges through the New York Clearing House, $8,025,481,549, a gain of $181,278,782; building permits, 37 to cost 83,290,330, an increase of 5 in number and a decrease of 3103,320 in amount; shares sold on the New York Stock Exchange, 10,900,000, an increase of 6,916,000 over a year ago, but a decrease of 1,821,000 from the preceding month; transactions in bonds on the exchange amounted to $57,824,000, an increase of 54,330,000 over a year ago, but a decrease of $6,800,000 from the preceding month; new incorporations, $80,091,100, an increase of $34,089,000; failures, 241, for $2,018,881, a decrease of 15 in number and $13,508,090 in amount. Since January 1 exports from the port are $684,497,674, against $483,485,183; AUGUST l, 1915, imports, $488,161,854 against $523,152,001. The latest compilation of railroad earnings shows a gain in May, 1915, over May, 1914, of $1,324,785 gross and $14,619,397 net. From June 1 to July 18 the New York clearing house banks' loans increased $115,941,000, deposits increased $163,881,000, and excess reserves decreased $13,877,000, The market rates for money have remained easy and practically unchanged since the middle of June. Bankers7 acceptances command slightly easier rates of 2tV to 2f per cent and the supply is lighter. Prime commercial paper is in great demand, with light offerings at 3 J to 4 per cent with occasional sales at 3 per cent. The large import movement of gold practically stopped when the special deposits were moved from Ottawa. Sterling and continental bills of exchange declined to new low levels, quotations for checks touched 4.7625, 5.62}, and 81.50 for sterling, francs, and marks, respectively. Rates have been stronger and steadier during the past week. The London discount rate has increased and is now 5J per cent, as against 2J per cent on June 1, DISTRICT NO, 3—PHILADELPHIA. The most striking feature of the business situation in this district is the absence of encouraging reports on conditions in Philadelphia, contrasted with the reported improvement in conditions throughout the rest of the district. In the Philadelphia vicinity business in domestic lines is dull and below normai. Almost no improvement is perceptible ov:r last month. A spirit of caution and hesitation exists. The outlook is uncertain, due perhaps to uncertainty regarding the business future of certain standard industries when the war shall have been terminated. In many specialized lines, such as the iron and steel industry, abnormal conditions continue because of foreign demand. New plants are being built, new machinery installed, and several towns are experiencing boom times. As a result, the number of men out of employ- AUGUST 1, 1915. FEDERAL RESERVE BULLETIN. merit has been greatly reduced, and retail trade has increased accordingly. The exports of the port of Philadelphia are increasing, and bank clearings are higher than for several months past. Perhaps the best feature of the business situation in Philadelphia is the shipbuilding industry, which is operating at full capacity. In sections of this district outside of Philadelphia business conditions are slowly improving, and some sections are reported as prosperous. Agricultural conditions are generally favorable, although in some sections where crops are good prices are low. Manufacturing lines are improving and are doing relatively better than retail lines. Railroad shops have not yet recovered from the industrial depression, although some progress is reported. Increased numbers of loaded freight cars are moving and a decrease is shown in the number of idle cars and good order cars. The anthracite coal output is below normal. Machinery, boiler, and foundry concerns are doing well. Leather continues strong, especially as to the heavier grades. Improvement is reported in most textile lines, although the dyestuffs situation is still critical. Rates for money are abnormally easy, with no evidence of any tendency to harden. Most banks are carrying large excess balances of unemployed funds, which they are unable to loan in ways which are satisfactory to them. The purchase of commercial paper by the banks is restricted because prime commercial paper at satisfactory rates is scarce, and new names of the better grade are not appearing in the market to any extent. Purchases of paper are being made at from 3 to 4 per cent, with the most active market at 3£ per cent. There is very little demand for either call loans or time loans with collateral, the rates for both classes of loans being 3 J to 4 per cent. 227 industry (the most important in* the district) began to show a change about the middle of last December, and reached its full force within the last three or four weeks. The tinplate industry is» especially flourishing, inasmuch as the supply of canned goods was very quickly exhausted by the war demand. Generally speaking, all steel mills are running practically full, with order books filled for several months ahead. Steel men predict maximum operations for the rest of this year, and at satisfactory prices. Semifinished and finished lines have steadily improved in price until they are now -35 per ton above the lowest pomt reached during the depression of 1914. Coke business is much better because of the starting up of so many furnaces. Coal business is improved somewhat owing to shipment of coal to the lakes for consumption in the Northwest next winter. Prices still rule unsatisfactory. The lumber business is far from normal either in production or price. The damage done to crops by excessive rains and floods has not been great, except in the southern part of the district, where there may be considerable reduction in the wheat and tobacco yield. The mercantile trade has not yet felt the new impetus to business, but improvement is noted in seasonable lines, and a distinctly better feeling prevails both among wholesale and retail merchants. Manufacturers supplying the building trades report business only fair. Continued ease of money is apparent throughout the district. July 1, the usual interest date for savings accounts, witnessed lighter withdrawals than other corresponding periods for several years. Underlying conditions are healthy, due to the fact that concerns are not carrying large stocks, have passed through a period of DISTRICT NO. 4—CLEVELAND. enforced liquidation, resulting in putting variThe steel business, both in unfinished prod- ous economies into effect, and altogether there ucts and finished materials, has made a decided is a marked improvement in the industries advance since last month's report. This upon which this district depends. 228 FEDERAL EESEEVE BULLETIN, DISTRICT NO. 5—RICHMOND. In this district during July wheat and oats have been harvested at prices which, if lower than the fancy figures which prevailed last fall, have permitted substantial profit to the farmer. Planters who were moved to cut cotton acreage in favor of these cereals should be satisfied with the result of the experiment. Wheat at SI. 10 and oats at 60 cents, both sold, should look better, certainly at the moment, than cotton awaiting the possibilities of an unknown future three months distant. Packers* seasonal truck has brought prices unsatisfactory to the grower, as canners carrying large stocks from the pack of last year have entered the market only on their own terms. Potatoes, heavily overgrown, are finding low prices. Cotton, a little late, is in excellent condition, but softening prices are not comforting to the planters, who, however, this year will have at their command better facilities for financing the crop than heretofore have been offered. Building undertakings generally are limited to repair or smaller operations, and related lines are dull. Retail trade is very quiet, reflecting both unusual economy practiced by the public and general midsummer dullness. Coal seems to be in somewhat better position both with respect to movement and price. Banks in tliis district are experiencing a somewhat better demand for credit for use in meeting usual seasonal needs for expenses pending maturity of the larger staple crops. While this demand is apt to continue during August and September, it will be well scattered and its aggregate amount should not be great. Business viewed as a whole is just about holding a steady position, which probably is all that can bo expected at this season. AUGUST 1,1915. The opening of the Warrior River, affording cheaper rates of transportation to the Birmingham district and the Gulf, has given an impetus to trade development in coal, ores, and cement, and the stiffening in the price of pig iron is causing an increase of activity in that district. While the improvement of financial facilities for handling the crop has somewhat stimulated trade, forward buying by merchants and the larger movements of trade appear to be awaiting development as to the disposition and price of cotton. Cotton mills are running to full capacity and a number of new mills are reported under construction. Many of the mills are filled with rush orders for khaki cloth and tent material. Building operations throughout the district continue below normal, but there has been a considerable improvement during July as compared with preceding months. The railroads report good passenger travel, with little or no change in freight traffic. The Atlanta post office reports a falling off of 5 per cent in receipts for the year ending June 30, 1915, as compared with the year ending June 30, 1914. Agricultural prospects are reported exceedingly bright. Cotton is in fine condition, and the States in this district will produce a remarkably large grain crop. Reports indicate a 70,000,000-bushel increase in corn, wheat, and oats, with an increase in the rice crop of approximately 5,000,000 bushels. DISTRICT NO. 7—CHICAGO. General business conditions in this district continue to show 3ome signs of improvement. Distinct improvement is noticeable in various lines that are benefited by foreign demand. The war and the uncertainty incident thereto cause hesitation and caution and are responsible DISTRICT NO. 6—ATLANTA. for less noticeable increase in other lines and Marked conservatism is characteristic in the entire absence of improvement in some. The commercial and industrial affairs of the Sixth settlement of the strike in the building and Federal Reserve District, but with an optimis- construction trades at Chicago, the more seatic tone. While there is a tendency to improve- sonable weather conditions, magnificent harment, conditions do not show any material vest prospects, and easy money, all make for changes as a whole during the month of July. I good basic conditions. AUGUST 1,1915. FEDERAL RESERVE BULLETIN. Noticeable progress, due to orders for crude and finished products of the furnaces, mills, and factories, is seen at Gary, South Chicago, Pullman, Chicago Heights, Moline, Sioux City, Indianapolis, South Bend, Detroit, and Grand Eapids. This is due not merely to "war orders/' but to the demands of railroads and other interests. The general merchandise market has shown improvement, although affected by the delayed arrival of warm weather. Commercial paper rates remain at low figures—3J to 4 per cent. DISTRICT NO. 8—ST. LOUIS. There has been little change in general business conditions in this district during the month of June. The business of wholesale interests dealing in what may be called the necessities of life remains below normal, but the volume of unfilled orders on hand is more nearly normal and is an indication of an improvement this fall. The manufacturing interests appear to be in much the same condition as the general jobbing interests, with the exception of those companies whose product is available for export where an increased activity is noted. Failures in this district show an appreciable falling off for the second quarter of 1915.as compared to the first quarter. The rainfall for June was considerably above the normal, but does not seem to have materially affected agricultural development excepting in the lowlands subject to overflow, where damage has been reported. Reports indicate that the wheat crop will be larger than the fiveyear average and the immediate return of seasonable weather would seem to insure a good harvest. The cool weather and continued rains in June may have retarded the cotton crop, but seasonable weather from now on would seem to insure its favorable development. Reports indicate a reduction of 12 to 18 per cent in the cotton acreage in the States within this district. Reports on the corn, oats, and hay crops indicate that there has been little or no damage done by the rainy season. Corn, excepting in the overflowed land, has grown rap- 229 idly, and seasonable weather from now on will allow the necessary cultivation and insure a successful harvest. The rain in June has caused the tobacco plants to grow rapidly and indications are that the crop will be coarser than is desirable. Small-fruit crops appear to have suffered more damage from rain than the other agricultural products. The live-stock market in this district shows the same activity which was noted in the April and May reports. There has been little change in banking conditions in this district. Current rates for discounts remain below the normal and money continues plentiful. There is a scarcity of commercial paper of the best names at a rate to tempt the bankers. General business conditions show little change in the past 30 days. Conditions have not improved as rapidly as indications would seem to warrant, and from present appearances improvement will be slow until after the harvest. DISTRICT NO. 9—MINNEAPOLIS. No important changes have occurred during the past 30 days, except a gradual strengthening of confidence in the crop outlook, which has developed a more active demand for money during the past two weeks. The leading commercial banks are of the opinion that if the crops suffer no damage, this demand will become quite active within a very short time, continuing through August. From the Great Lakes to the eastern slope of the Rocky Mountains the condition of the small grain crop is excellent, with the exception that rye has suffered damage in North Dakota, and that theie has been some damage to wheat, due to excessive moisture, on the heavy soils of the Red River Valley and other districts. The season has been one of unusual rainfall but the damage to grain on the heavier soils due to this cause will be considerably more than offset by unusually good yields in parts of the district where a large acreage of grain has been planted on the higher and lighter soils. Montana probably never had a better crop outlook at this season of the year. With 230 FEDEEAL KESEEVE BULLETIN. the exceptions already noted, the same is true of North Dakota and Minnesota. A highly profitable element in the crop production of the ninth district is hay and forage, which under normal conditions should amount to about 25,000,000 tons. This season has been unusually favorable to the heavy growth of grasses and alfalfa, and the crop that is now being cut will probably run considerably above the normal yield and will show an unusually heavy tonnage at good prices. Minnesota and Wisconsin are the leading western States in potato production, normally affording a yield of from 60,000,000 to 65,000,000 bushels. The potato crop shows an increased acreage this year and is making an excellent growth, with the prospect of very heavy yields. July has brought some break in the continued cool and rainy weather, with an improvement in corn prospects, although it is beginning to be realized that corn wiU not be an average crop this year and that there is considerable doubt whether a good deal of it will have opportunity to fully mature. The agricultural colleges are advising the storing of corn from the 1914 crop for 1916 planting, fearing that this year's yield may not have the proper germinating qualities. A very beneficial effect of the prospect that of a corn crop, only poor to fair, has been a decided increase of activities on the part of farmers in constructing silos. Should August weather prove unfavorable, many farmers will cut their corn for ensilage and feed it. There has been a decrease during the past month in the amount of idle labor. The activities in the copper districts of northern Michigan and Montana have had a beneficial effect in this respect, and the month has witnessed heavier shipping orders at the northern Minnesota iron mines, thus improving labor and business conditions in that district. The present outlook is for heavy ore shipments for lower lake ports during the remainder of the season. Retail merchandising over the district is about normal, with collections fair. The AUGUST 1,1915. wholesale trade at the large centers is in good condition. The only lines in which there is noticeable depression are in lumber, both wholesale and retail, and certain lines of manufacturing. Many industrial plants are showing an increased volume of orders and an improved activity. The agricultural outlook over the district is excellent, and the business situation, generally speaking, is good, although quiet. The best opinion seems to agree that if present conditions continue the fall months will bring a period of very active trade with considerable prosperity to the entire district. DISTRICT NO. 10-KANSAS CITY, Although some sections of district No. 10 have been visited with wind, flood, and other storm damage while other sections are in need of rain, yet, as a whole, agricultural and horticultural conditions are about normal. The harvest yield will be less than last year's figures, but the record of 1914 was phenomenal. The wheat harvest is progressing northward, and is now centered in northern Kansas. Threshing is going on throughout the southern portion of the district, and the yield reported is a fair average of quality and quantity. Corn is doing well; there is a good stand and every indication points to a bumper crop. The production of sugar beets in this district is slightly above normal. The yield in various sections will range from 12£ to 20 tons per acre, possibly averaging 15 tons. The milling industry has experienced great activity, and the financial statements of milling concerns now in the hands of bankers show large profits. The live-stock market is active, and excessive rains have provided splendid pasturage. Grass cattle are already commencing to move, and prices are firm. During the present month the record price for 1915 and the highest price ever paid in the month of July, §10 JO, was quoted on the Kansas City market. Receipts of hogs at market centers have been rather light, with result that prices have ranged from strong to higher. The horse and mule market is very active, top prices ruling on all marketable stock. AUGUST 1,1915. FEDERAL RESERVE BULLETIN. The lead and zinc industry is still active, with prices far above normal, although not as high as 15 days ago. Coal mining is showing increased activity by reason of the demand for thrashing and storage purposes. The oil industry is quiet by reason of low prices of raw material and the limited supply accepted by the pipe lines. Wholesale and retail trade is normal, with fair collections. Much building and improvement work is noticeaWe, with many large civic projects under way. Banking business is quiet and will probably continue so until the marketing of the wheat crop actually commences. Undoubtedly, if reasonable prices are received for this year's crops, there will he heavy liquidation during August and September. In some sections of the district there is an excess of loanable funds, bank deposits are increasing, and the demand for money is negligible. In other portions the demand for money is quite active, although local bankers are amply able to meet all requirements. Generally speaking, however, the financial situation prevailing throughout District No. 10 reflects a degree of prosperity heretofore unequaled. 231 force, and within 10 days a very considerable volume will be coming into the market. First bales are now everyday occurrences. Great activity has been displayed during the past month by various committees laboring for the establishment of warehouses to take care of the oncoming cotton crop. A considerable number of houses are being constructed, and others are promised by the time cotton is actually ready for storage. It is anticipated that very large totals of bales will be held under warehouse receipt in an effort to save the market from glut and disorganization. The cotton growers of the district have not heretofore faced their real problem with so determined and serious a front. Present advices are to the effect that the crop in this State will be very materially reduced. The live stock interests of the State continue in most prosperous condition. Relatively high prices prevail, and throughout the district pasturage conditions are far above normal. The lumber industry shows slight improvement; demand has increased somewhat and prices are a shade better. The oil production of this district has grown to such a point that the price for high-grade oil has been cut to 35 cents per barrel, and even a further reduction is anticipated. It is believed, however, that this may only be temporary, since the output from the Gushing field in Oklahoma is now rapidly decreasing. Member banks report that demand with them is slightly on the increase, although far from normal; also deposits are tending to slump. Many of our reserve city members at this season last year were heavy borrowers. This year they report few or no bills payable. This condition is reflected more or less by the thinness of demand with us. General business conditions are improving; merchants report better sales with more satisfactory liquidations. DISTRICT NO. 11—DALLAS. This district is preeminently engaged in agriculture. The progress of crops, therefore, is of primary importance. Dry weather, combined with hot winds, has tended to cut short the corn over considerable areas, but spite of this, the earlier forecast of the bumper corn crop of the State remains true. The oat crop has been harvested, and barring considerable deterioration through North Texas and Oklahoma counties, on account of heavy rains, the crop is excellent. Wheat has been almost entirely harvested under favorable conditions. Both oats and wheat are now being offered freely on the market. The cotton plant has made satisfactory progress in most sections, particularly in the DISTRICT NO. 12—SAN FRANCISCO. In this district there is general abundance of southeast and central sections. Already in crops in great variety. There has already been South Texas the picking of cotton has begun in 232 FEDEKAL EESEEVE BULLETIN. much harvesting and other crops have been satisfactorily progressing to maturity. It is reported that the greatest cereal crop in the history of Oregon, Washington, and Idaho is now being gathered. In citrus fruits Valencia oranges are moving at highly satisfactory prices. Fresh fruits, melons, and vegetables are in large supply. Ordinarily such conditions would ensure prosperity; war conditions, however, introduce elements of surprising uncertainty. The lack of bottoms for exports hampers the marketing of the cereal crops; warehouses are filling, and it is probable that grain will move slowly from growers' hands. It seems reasonable to expect that delayed marketing may have a tendency to correspondingly delay trade activity. The prune crop is reported as abundant and good, with contract prices about 33$ per cent less than last year. Canners buying of such fruits as peaches and apricots are naturally proportioned to orders in hand, which are reported to be approximately 33$ per cent less than at this time last year. It is said that prices as low as S6 per ton are being paid for peaches, as against SIS per ton last year. It is asserted that more than the usual proportion of fruit will be dried, and some may even be thrown away. It is clear that large crops will not mean uniformly profitable results. A fair average, however, is had by high prices for some products offsetting low prices for others AUGUST 1, As a whole it is undeniable that this district is adding steadily and largely to its wealth. More hopeful expressions are received as to lumber, although there seems little tangible reason. One confident expression was based upon the larger activity in steel which, it was said, is always a precursor of increased activity in lumber. Chinese capitalists are said to be laying plans for a trans-Pacific line of steamers, and it has been suggested that they may buy the Pacific Mail steamers. More ships would be a great advantage to the Pacific coast. Nevertheless, during the first six months of 1915 exports from San Francisco totaled $39,000,000 as against $24,000,000 for the same period in 1914, imports increasing from §5,400,000 to $7,800,000. Bank clearings give a rough measure of trade activity. Total clearings for the four leading Pacific coast cities during the first six months of this year have been approximately 7 per cent less than for the first six months of 1914. This moderate curtailment of business is further evidenced by the considerable increase of idle funds in both national and State banks throughout the district. During this fall, as is usual each fall, there will, of course, be a considerable increase in the aggregate of loans, but there seems reason to believe that the available means of the banks of this district are such as to readily meet the requirements. AUGUST l, 1915. FEDERAL RESERVE BULLETIN. Movement of Principal Assets and Liabilities of the Federal Reserve Banks. The following diagrams illustrate the movement of the principal assets and liabilities of the reserve banks during the present calendar year. The uppermost curve in the first group of diagrams indicates the growth since January 8 of net deposits, and shows an increase from about 267.4 millions to 297.6 millions during the period to July 16* Notable gains of deposits are indicated for the second and third weeks in January, also for the second and fourth weeks in June. The latter increases were, however, offset in part by a considerable decrease shown for the first week in July. The lowest curve, indicating the movement of the total gold reserve, is shown to rise during the first week in February,. when the second installment of member banks7 payments on account of capital was due, also during the entire month of June and the first week in July. The latter rise is due in part to the gain in deposits, noted for the same period, and in addition to the liquidation of investments in municipal warrants which fell due about that time. Between January 8 and July 16 the gold reserve of the system shows a gain of 28.7 millions from 232.5 to 261.2 million dollars. The cash reserve curve runs practically parallel to the gold reserve curve and shows a gain during the same period of 37.2 millions from 250.5 to 287.7 million dollars. The second group of curves presents the movement of funds invested by the banks in commercial paper, bankers' acceptances, municipal warrants, and United States bonds. These curves, except the lowest, indicate the cumulative totals of the several classes of investments. The lowest curve shows the weekly movement of the item "Commercial paper on hand," while the uppermost curve shows the movement of all four classes of investments taken together. 233 The amount of commercial paper held by the banks (exclusive of acceptances) increased from 9.9 millions on January 8 to 28.7 on July 16. The amounts held show a practically continuous increase. The amount of acceptances held has increased rapidly since February 19, when for the first time this type of paper is shown among the assets of the banks in the weekly statement. The largest holdings are reported for April 16. The subsequent week marks the beginning of a decline which, while not continuous, resulted in a reduction of these holdings to less than 9 millions, shown in the July 16 statement. The sharp break in the two upper curves of the second group after May 21 is due chiefly to the liquidation of funds invested in warrants, a large portion of which fell due during the last week of May. The weekly statement for May 21 shows a maximum total of 28.5 million of this class of paper. Four weeks later the total had declined to almost one-third (9.7 million) and on July 16 stood at 14.4 millions. The investments in United States bonds, mainly of the 3 per cent type, show a slow though steady growth, the largest purchases dating back to the early part of the year. - The movement of all funds invested in commercial paper, acceptances, and public securities shows a practically unbroken upward trend up to May 28 when a total of $64,000,000 is shown which constituted about 142 per cent of the paid-in capital of the banks. On July 16 the total of the earning funds had decreased to about $60,000,000, which is only about 110 per cent of the total paid-in capital reported on that date. The third diagram illustrates the comparative growth of individual deposits in the several classes of banks during the period 1900 to 1914. The figures on which this diagram is based are those shown in the annual reports of the Comptroller of the Currency. COMMERCIAL PAPER, BANK ACCEPTANCES AND INVESTMENTS SINCE BEGINNING OF CALENDAR YEAR APR. MAY 1 (8 25, J. 9 jo 23 3Q 1 JUNE JULY AUGUST 1,1915. 235 FEDERAL RESERVE BULLETIN. // /Z /3 236 FEDERAL BESEEVE BULLETIN. ADGUST 1,1915. GOLD IMPORTS AND EXPORTS. The Bureau of Foreign and Domestic Commerce in the Department of Commerce has furnished the following advance tables showing the imports and exports of gold, classified under the head of ore, bullion, and coin, also the total gold imports by countries for thefiscalyears ending June 30, 1913 to 1915. Imports and exports of gold in ore, bullion, and coin, fiscal year ending June SO,1915. Coin, Ore and base bullion- Maine and New Hampshire. Maryland New York Philadelphia Porto Rico Virginia Florida Mobile New Orleans Arizona Eagle Pass El Paso Laredo Alaska San Francisco Southern California Washington Buffalo Dakota Michigan St. Lawrence Vermont Total gold. Bullion, refined. Ounces (troy). United States* 399,836 412,421 36,795 145,359 34,631 148 168,756 6,334 3,676,759 4,421,526 141,676 1,487,915 $874 $55 468,141 2 9,417,136 * 36 16,278,052 250 1,351 504 $750 4,254 116,392 10,000 80,077 20,010 50,512 Foreign. $50,000 •4,859,498 24,000 1,028,691 "i," 372* 750' 248,920 401,493 26 100,438 4,111,207 8,166,562 447 1,987,090 300 790 1374,830 97,242 12,200 7,697,208 2,008,500 345 83,980,927 3,053 641,585 11,054,434 Total., 51,452 68,634 1,812,522 35,812,701 101,091,873 23,609,747, 287 5,798 490 1327,616 6,774,876 1,558 2,346 38,354 277,276 1,739 13,937 79,461 108 25 i 471,399 6,085 15 1,051 151,505 400,000 32,367,302 131,200 30,000 3,000 40,750 68,855 180,987 816,478 3,000 •'89*936' 25,342 I 17,520,570 481,060 f 80,909 I 498,000 $1,679 54,254 30,671,078 286 1,351 32 114,077 20,010 466,442 1,441,112 36 795 1,518,109 34 631 4,201,285 25,881,230 7,331 6,642,909 4,502 435 141 676 1,500,460 74,328,520 3,053 171,568,755 EXPORTS—DOMESTIC, Maine and New Hampshire. Massachusetts , New York New Orleans El Paso Alaska Hawaii San Francisco Washington Buffalo Duluth and Superior. Michigan St. Lawrence 11,979 Vermont. Total., 291,303 894,059 157,303 400,000 39,142 668 131 200 30,000 42,912 40,750 68,855 493,*392 2,537,015 5,091 627,517 35,129 81,111 1,639,426 2,091 517 9,700,117 81,913,617 103,769 103 I 7,803,207 20,417 18,401,708 91,729,482 7,823,727 124,536,901 143,229,912 EXPOETS—FOREIGN. Maine and New Hampshire. Massachusetts Now York Hawaii Buffalo Duluth and Superior. St. Lawrence Vermont 50 10,606 2,933,186 10 20,660 ' 20 18,550 154 2,994,236 Total., i United States mint or assay office bars. 50 10,606 2,944,186 2,994,236 20,660 18,550 154 AUGUST 1,1915. 237 FEDERAL EESEBVE BULLETIN. Imports and exports of gold by countries during the 12 months mding June 30,1913,1914, and 1915. 1913 France 1914 1915 311,552,926 51,423,251 495,234 10,020,731 25,261,153 3,100,604 20,517,203 1,203,860 4,266,401 14,845 1,817,444 813,578 254,721 Total.. $1,195,284 14,176 2,565,423 38,319,111 2,490,450 11,116,942 3,044,005 6,342,955 480,040 559,554 410,719 1,965,270 110,761,093 2,751,572 6,324,163 3,393,944 6,301,321 6,268,263 17,745,162 706,241 3,798,800 69,194,025 United Kingdom—Bngland.. Canada I, Gentral American States Mexico West Indies South America China Japan Australia and Tasmania.., All other countries 66,538,659 171,568,755 661,044 39,553,486 1,464,000 221,310 86,021,273 1,018,913 1,296,771 19,388,441 27,226,603 103,455,383 591,656 288,445 604,329 23,316,721 103,350 11,090 2 543 1,186,278 175,676 2,220,090 494,012 6,325,086 243,220 352,132 1,515,658 5,890 9,875 46,905 297,800 77,762,622 112,038,529 146,224,148 EXPORTS—FOREIGN AKD DOMESTIC. Belgium. France., Germany United Kingdom—England.. Canada West Indies: Cuba Other West Indies All other North America South America China , Hongkong All other countries Total.. 11,165,958 6,761,361 238 AUGUST 1,1915. FEDERAL BESERVE BULLETIN. Below follows statement of classified imports and exports of gold for the weeks ending June 25, July 2, 9, 16, and 23, and the cumulative period January 1 to July 23, 1915. These data were furnished the Board by collectors of customs. Imports of gold, by customs districts, Jan. 1 to July 23, 1915. Total. Vermont. St. Lawrence. Michigan. | Dakota. Buffalo. Washington. 3 Southern California. San Francisco. Alaska. Arizona. j Florida. I New Orleans. Porto Rico. ! oB Now York. h r Maryland. j 1 [In thousands of dollars.] For week ending June 25. i 19 240 5 IS 5 1 9 9 5 23 10 9 o 26 762 —. ,_ - . 23 • 7,834 9,701 158 149 200 105. 12 69S 105 12 40 130 134 70 170 134 70 94 78 18 252 776 2,307 573 545 94 78 18 3,908 39 132 227 32 — — 2,500 345 2,588 2 510 2,500 ... . 3,445 631 1,960 137 413 1,215 1,963 915 2,728 4,506 • 4 1 20 27 32 25S 2 2S Total 279 6,059 2,837 526 — 498 83 Ore and base bullion Bullion, refined TTnitPfl states oniri ForGiim coin 102 5,000 2,834 23 149 262 500 65 2 12 For week ending July 9. 240 22 4 Orft and base bullion Tltillinn rpfined United statesonin 4 15 c 6 462 Total ^ For week ending July 2. Total 26 25 414 3 Bullion, refined United States coin Foreign coin 27 5 18S 113 750 320 1 863 = = = = = For week ending July 16. 2 411 2 307 30 - 3 1 5 113 31 4 126 262 3 ,58 o 8 19 243 22 Total 31 2 750 — Ore and base bullion Bullion refined United States coin Foreitm coin... .... 1 535 For iceeb ending July S3. Ore and base bullion United States mint or assay office bars Bullion, refined Unitod States coin Foreign coin 175 - Total Total 2 98 • 50 1 3 78 3 98 252 22S 75 198 215 330 39 6,391 . . . . 10 . . . . . 17 615 1 4,003 j . . . . 50 28,278 20 227 2,282 2,956 32 1 2,384 J 1,174 7,486 = 269 1 1,154 493 21 198 19S ! 396 Jan. 1 to July 2S. Ore and base bullion Unitod States mint or assay office bars Bullion, refined Unitod States coin Foreign coin 20 193 J518 1,154 1 A 43 253 396 1,276 1,605 8 624 |l,359 1,803 7 7,183 21 11,760 19,179 1Includes $4,000 for Laredo, Tex, 946 6 498 7 3,732 67 932 2 3,106 3,108 8,131 25,938 86,556 104,257 622 " " " 3 " 16,969 49" 3,007 IT 932 98,415 3 157,758 AUGUST l, 1015. 239 FEDERAL RESERVE BULLETIN. Exports of gold, by customs districts, Jan. 1 to July 28, 1915. [In thousands of dollars.] Maine Duand San St. New Hawaii. Alaska. Fran- Wash- Buffalo. Dakota. Mich- luth New and Lawigan. cisco. ington. Hamp- York. Surence. perior* shire. Vermont. Total. For week ending June 25. B ullion, refined, domestic United States coin Foreign coin Total 1 6 1 3 1,125 1 7 1,128 1 ' 1 7 4 1,126 1,137 For week ending July 3. Ore find ba^e'bullion Bullion refined domestic! United States coin Total 1 27 2 23 1 27 52 17 3 17 3 3 15 2 i 15 1 3 2 I 27 For week ending July 9. United States mint or assay office bars Bullion refinpd domfistic United States coin 1 1 1 Total 17 1 19 For week ending July 16. r > United States coin 12 5 1 For week ending July SS. Ore and base'bullion United States mint or assay office 2 io Total 10 1 10 1 1 3 1 10 Foreign coin .1 I 11 1 10 Bullion, refined: Domestic Foreign 6 22 12 1 3 1 39 Jan. 1 to July SS. Bullion, refined; Domestic 3,377 2,574 United States coin Foreign coin Total 2 54 44 2 20 7 9 54 21S 51 8 2 * 23 5,951 23 •2 IS 5 13 2 167 1 166 United States mint or assay office 4 4 4 . 1 10 37 20 3,503 2,586 10 6,336 2 3 1 5 4 1 15 240 AUGUST 1,1915. FEDERAL EESEBVE BULLETIN. ACCEPTANCES. Acceptances, by classes, held by the Federal reserve banks each week. Nonmember hanks' acceptances. Member banks' acceptances. Bate, Private banks. Total. State banks. Trust companies. 1915. June 28 July 12 July 19...., July 26 „ $4,211,000 4,342,000 4,231,000 4,356,000 5,165,000 - , $4,801,000 5,267,000 4,618,000 4,367,000 4,832,000 $161,000 161,000 161,000 323,000 367,000 $20,000 20,000 $9,173,000 9,770,000 9,010,000 9,066,000 10,384,000 Acceptances indorsed by member banks: Trust companies' acceptances, $176,000; private banks'acceptances, $20,000; total, $196,000. Distribution of acceptances held by Federal reserve banks according to schedules on hand July 20,1915, by classes of acceptors and sizes. To $5,000. Over 55,000 to $10,000. Over $10,000 to $25,000. Class of acceptors. Member banks... Trust companies. State banks Private banks— Total. Over $25,000 to $50,000. Over $50,000 Over $100,000. to $100,000. Total. Per cent. I! $921,845 32 $1,288,061 1,351,619 27 829,453 20,000 201,845 101,065 19,890 249,549 92 136 $956,285 787,081 $588,000 204 $4,356,293 1,060,246 " " 4,367,233 20,000 322,800 48.0 48.2 ,2 3.6 2,495,309 2,218,579 1,743,366 27.5 $134,690 58 $467,412 114,859 32 223,975 24.5 1,648,246 421 9,066,326 === 18.2 100.0 F Percent Amounts of acceptances held by the several Federal reserve banks at close of business on Fridays from June %5 to July 28,1915. Jin thousands of dollars.] Boston. New Phila- Cleve- KichAtYork. delphia. land. mond. lanta. Acceptances maturing within 30 days: $959 $1,084 June 25 , 739 1,714 July 2 603 1,249 July 9 July 1G 602 979 July 23... 588 740 Acceptances maturing after 30 days but within 60 days: 582 June 25 928 470 July 2 955 July 9 . . . . , 445 2,215 July 16 , 402 2,219 July 23 399 2,349 Acceptances maturing alter 60 days but within 90 days: June 25 500 2,019 July 2 474 2,159 July9 472 1,371 July 16 605 1,415 July 23 »1,110 2,014 Total: June 25 2,041 4,631 July 2 4,828 1,683 . July9 4,835 1,520 July 16 " " 1,609 4,G13 July 23 " " 2,097 5,103 $213 452 466 308 371 $148 155 101 49 48 Chicago. S364 237 236 74 74 St. Minne. Louis. apolis. Kansas City. Dallas. San Francisco. Total. $126 120 49 25 34 403 173 132 442 574 $398 411 331 307 208 $574 260 224 124 124 54,746 4,349 3,477 2,545 2,205 191 191 27 27 $2S0 261 218 17 18 124 160 234 134 234 2,427 2,127 3,330 3,337 3,774 359 449 707 445 522 16 16 25 90 95 37 12 25 165 205 44 15 25 83 124 17 10 25 90 115 10 11 36 71 118 204 198 100 125 56 3,206 3,344 2 7S6 3,689 4,359 975 1,074 1,305 1,255 1,467 213 187 142 155 201 475 347 297 275 343 342 322 287 144 189 168 148 91 132 166 632 613 558 405 353 902 618 558 383 414 10,379 9,820 9,593 8,971 10,338 * Includes $90,500 of acceptances maturing after 90 days but within 3 months. AUGUST 1,1915. 241 FEDEEAL KESEBVE BULLETIN. Amounts of acceptances purchased by each of the Federal reserve banks from February 19 (date of first purchase) to June 30,1915, distributed by maturities. [La thousands of dollars.] New PhilaRichAtBoston. York. delphia. Cleve- mond. lanta. land. San St. Minne- Kansas Louis. apolis. City. Dallas. Francisco. Chicago. Total. Acceptances maturing within 30 February and March. April .... 371 25 2 141 June Total 84 25 39 25 141 67 10 41 61 61 814 75 2 141 539 109 64 141 67 10 41 135 29 56 15 197 456 454 436 249 508 62 57 57 33 27 50 159 74 25 201 47 14 46 12 16 45 152 281 200 1 315 871 1 280 627 235 1,543 368 598 310 226 119 61 633 4,093 1,235 520 587 557 4,435 792 411 2,507 862 412 109 493 584 116 16 16 1 245 243 100 18 44 280 87 13 17 41 259 307 27 211 543 124 234 8 893 3 072 1 5S5 3,931 Total 2,899 8,145 1,876 732 1,524 162 397 634 1,112 17,481 Grand total 3,134 10,227 2,353 1,394 1,975 455 526 736 1,806 22,60& Acceptances maturing after 30 days but within 60 davs: April May " .... Total .... Acceptances maturing after 60 days but within 3 months: April May. June . 36 1,032 PAPER CURRENCY OUTSTANDING, United States Treasurer's monthly statement of paper currency of each denomination outstanding June 30,1915. Denomination. United States Treasury Federal National notes of 1890. reserve notes. bank notes. notes. One dollar Two dollars Five dollars Ten dollars Twenty dollars.... Fifty dollars Onehundred dollars— Five hundred dollars... One thousand dollars.. Five thousand dollars.. Ten thousand dollarsFractional parts $1,819,540 1,363,613 202,123,160 107,957,996 8,092,632 2,030,375 2,983,700 2,749,000 18,551,000 Total Unknown, destroyed.. Net., Gold certificates. Silver certificates. Total. $174,838,421 59,748,881 182,868,967 24 707,751 19,159,400 31,755,660 343,420 18,500 18,000 $177,354,354 61,501,381 554,796,547 730,974,017 506,626,556 118,319,890 133,102,920 22,657,500 104,017,500 95,885,000 462,010,000 54 143 $31,379,000 28,054,060 14,837,440 4,990,000 5,000,000 5342,317 163,568 137,881,535 354,680,300 249,959,860 32,964,600 45,305,700 88,500 22,000 347,681,016 I 2,254,000 1,000,000 84,260,500 821,462,523 12,188,930 1,218,182,769 493,459,000 2,967,299,808 3,188,930 346,681,016 84,260,500 819,273,593 1,218,182,769 493,459,000 2,964,110,878 $354,076 225,319 543,885 f 633,490 291,330 11,900 116,000 78,000 10,000 $214,940,420 214,285,894 46,567,355 79,354,100 19,801,500 85,348,500 95,885,000 462,000,000 54,143 2,254,000 i Redeemed but not assorted by denominations. 242 FEDERAL KESERVE BULLETIK, AUGUST 1,1915. DISTRIBUTION OF REDISCOUNTS. The total amount of commercial paper rediscounted during the month of June was 313,404,000, or SI,258,300 in excess of the amount rediscounted during May, all of the banks, except Dallas and San Francisco, reporting increased operations. Over 76 per cent of the paper rediscounted by the four eastern banks was 60-day paper as against 32.5 per cent for the four western banks and 40 per cent for the three southern banks. The San Francisco bank reports about 33 per cent of this class of paper. Relatively large purchases by the Minneapolis bank of agricultural and live-stock paper maturing after 90 days raise the proportion of this class of paper to 3S.S per cent of the total amount of rediscounts of the four western banks and decrease the proportion of this class of paper reported by the three southern banks from about 75 per cent for the month of May to 62.4 per cent for June. While the percentages of the several classes of paper handled by all the banks during June vary but slightly from the percentages for the month of May, there are some quite material changes in the liquidity of the paper purchased by some of the banks. Thus, for example, the percentage of 30-day paper discounted by the Boston bank during the month of June increased to 47 per cent of the total from only 27 per cent of the total rediscounts handled in May. The number of banks accommodated increased from 716 in May to 785 in June and now stands at 10.3 per cent of the total number of member banks. The relative work of the discount departments is shown to some extent by the number of notes handled during each month, which is 9.55S for May and 10,734 for June. Of the total number of notes handled the share of the three southern banks was about 73 per cent in June as against 78 per cent in May, while of the total amounts handled the share of the three southern banks was about 66 per cent in June and over 68 per cent in May. The average size of the notes discounted in June by all the banks was Si,249, compared with $1,271 in the preceding month. The averages vary between $681 for the New York bank and S3,043 for the San Francisco bank. Of the total number of notes rediscounted during June about 27 per cent, and of the total amount about 53 per cent, were notes in amounts of $1,000 to S5,000. Small notes (in amounts up to §250) constituted almost 32 per cent of the total number, though only 3.6 per cent of the total amount of notes rediscounted during the month. Over 84 per cent of the entire number of notes up to $250 was discounted by the three southern banks. .AUGUST 1,1915. 243 FEDERAL RESERVE BULLETIN. Commercial paper, exclusive of acceptances, rediscounted by each of the Federal reserve banks during the month of June, 1915, distributed by sizes. NUMBER OF PIECES AND AMOUNTS. [In thousands of dollars.] To $100. Over S100 to 3250. Over S250 to S500. Over $500 to 51,000. Over $1,000 to 32,500. Over $2,500 Over $5,000 to 510,000. to $5,000. Over 310,000. Total. Bank. If Boston New York Philadelphia.. Cleveland Richmond Atlanta Chicago St. Louis Minneapolis... Kansas C i t y . . . Dallas San Francisco. 4.0 .4 .7 32.2 18.2 .8 1.1 1.0 .2 18.8 T o t a l . . . . 1,069 147 35 13 559 572 32 63 93 14 814 21 77.4 2,363 23.2 6.2: 2.3! 97.4! 99.0: 7.6 11.4 16.1! 2.6 135.3 3.4 25 104] 67j 201 622 475 89 69 1311 27 531 31 404.5; 2,191 j 11.3 37.3 25.4 7.5 246.3 177.8 35.6 26.1 48.1 10.3 190.3 11.3 | 29 57 58 29 590 319 107 56 182 40 342 20.1 39.7 45.3 23.6 484.7 249.6 86.0 45.5 129.8 29.3 253.4 36.5 21 41 51 40 513 291 138 75 1661 39| 349 69 34.6 58.1 92.8 69.1 909.4 511.0 225.9 135.6 243.4 60.5 571.4 110.7 OS. 5 32.5 77.0 8S.6 677.2 328.0 68.6 67.2 137.6 82.1 428.6 217. 2.0 347.4 120 2.1 289.5 425 3.3 454.8 273 15.0 435.21 3.2 80.6 108 273.4 3,147 4,004.3 30.1 255.0! 2,135 2,358.0 17.6 4.8 24.8 440 648.lt 400.91 3.0 10.2 311 5.9 795.0 52.6 687 30.4 170 333.5J 2.5 172.7 2,577 2,477.1! 18.5 SG0.2J 6.4 281 294.7 827.3 1,861 1,443.5 1,793 3,028.51,049 4,074.7 325 2,273.1 83 1,275.0 10,734 13,404.0| 100.0 147.3 94.7 192.7 162.8 1,283.7 719.4 198.8 103.8 166.4 118.1 706.6 180.4 65.6 PERCENTAGES OF AMOUNTS OF E A C H CLASS T O T O T A L . To $100. Boston New York . Philadelphia Cleveland. ... Richmond Atlanta Chicago.. St. Louis Minneapolis KansasCity Dallas Total. ... ., .*. ...; Over $100 to $250. Over $1,000 to $2,500. Over $500 to $1,000. Over $250 to $500. Over Over $2,500 to $5,000 to $10,000. $5,000. Over $10,000. Total. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. 33 100.0 42.4 9.9 5.8 18.9 19.7 100.0 32.7 11 2 20.1 12 9 1.4 13.7 80 100.0 20.4 3.3 17.0 42.4 9.9 5.6 1.4 100.0 15.9 5.4 18.5 20.4 37.4 1.7 .2 .5 32.1 100.0 6.8 16.9 6.2 2.4 22.7 12.1 .8 10.8 13.9 30.5 21.7 10.6 7.5 100.0 4.2 .8 .1 3.8 10.6 30.7 34.8 5.5 13.3 100.0 1.2 100.0 33.7 2.6 25.9 11.3 16.8 6.5 2.9 .3 .1 6.6 17.3 20.9 30.7 16.3 100.0 6.1 2,0 .1 9.1 24.6 35.4 18.1 8.8 100.0 . 3.1 .8 7.0 17.3 28.5 23.1 10.2 100.0 7.6 5.5 .8 100.0 34.3 25.2 13.6 4.2 21.0 1.3 .4 .6 3.0 6.2 10.7 30.4 22.6 17.0 9.5 100.0 Commercial paper rediscounted during June by each of the Federal reserve banks, distributed by States and maturities as of date of rediscount. [In thousands of dollars.] Districts and States. District No. 1—Boston: New Hampshire Vermont Total..... District No. 2—New York District No. 3—Philadelphia: Pennsylvania Total Number of member banks. Number of banks accommodated. Paper maturing within 30 days. 74 70 170 56 18 48 2 1 5 1 0 4 141.6 3.0 10.7 Paper maturing after 30 days but within 60 days. Paper maturing after 60 days but within 90 days. 18.3 8.9 70.5 4.6 13.4 4.8 10.0 3.4 Paper maturing after 90 days. Total commercial paper rediscounted. 2.9 .4 42.4 16.6 222.1 11.4 54.9 7.3 40.9 6.7 38.3 3.3 347.4 1.4 289.5 436 13 162.6 143.2 479 20 136.8 82.0 169.3 24 201 533 1 12 13 71.8 138.5 86.7 62.3 3.0 67.4 25.1 3.0 225.9 225.9 149.0 95.5 454.8 210.3 26 758 i Including 4.5 of paper, maturing within 10 days. 244 FEDERAL BESEEVE BULLETIN. AUGUST 1,1915. Corrwiercial paper rediscount^ during June by each of the Federal reserve banks, distributed by States and maturities as of date of rediscount—Continued. [In thousands of dollars,] Districts and States. District No. 4-Cleveland: Kentucky Ohio Pennsylvania West Virginia Total 760 District No, 5—Richmond: District of Columbia Maryland North Carolina South Carolina Virginia • , West Virginia , Total 508 District No. 6—Atlanta: Alabama Florida Georgia ..... Louisiana Mississippi Tennessee , 381 , Total District No. S-St. Louis: Arkansas Illinois Indiana Kentucky Mississippi Missouri.. Tennessee Total 156 61 69 17 79 20 '.. 462 District No. 9—Minneapolis: Michigan Minnesota Montana North Dakota South Dakota Wisconsin 41 163.3 144.9 125,9 1.1 183.0 196.7 50.2 5.3 435.2 123.2 8.0 357.1 463.5 280.5 62.2 50.4 12.6 661.1 526.1 377.9 39.2 .5 85,1 252.4 65.8 .8 208.8 58,1 1,192.2 1,544.8 862.7 137.7 637.9 1,294.5 1,667.3 404.6 4,004,3 75.9 86.2 226.3 101.8 16.3 208.4 11.7 325.3 100.4 349.5 402.9 4.1 39.0 196.8 13.9 294.8 492.5 915.3 24,6 62.0 578.8 199.5 725.4 1,092,7 340,4 2,358.0 47.1 34.1 68,5 2.0 53.5 52.6 100,1 6.6 42.4 17.5 167,0 146.7 113.3 362.0 25.1 1.0 55.7 151.7 212.8 227.9 648.1 3.4 27.8 13.0 12.7 27.7 30.2 15.3 41.1 14,7 50.5 .8.3 6.3 3.0 20.8 55.7 47,1 122.6 26.3 27.1 14.6 46.6 116.6 52.3 113.3 159.3 76.0 400.9 12.5 57 .3 5.0 4.0 U9.8 313 197 348 73 49 , 16.7 20.6 12.2 .7 1.3 14.1 5.0 8.1 128 87.9 51.7 56.7 .4 1.0 92 56 113 5 18 97 Total District No, 7—Chicago: Illinois Indiana Iowa Michigan Wisconsin 102 Total commercial reited. 3.7 9.1 26.4 16.5 13 100 80 71 136 108 Paper maturing after 90 days. 16.7 40.5 77.7 20.5 1.3 42.8 37 Paper maturing after 60 days but within 90 days. 35,2 37,0 88.9 302.8 138,5 35.5 72 378 301 9 Paper maturing after 30 days but within 60 days. 58.7 72.3 52.0 Number Number of banks of member accommobanks. dated. 23.2 2.5 4.9 2.9 149.9 72.6 166.6 51.6 17.2 38.7 165.8 125.5 189.2 53.1 222.7 Paper maturing within 30 days. 11.6 6.5 31 277 65 153 111 87 32.1 70.3 3.0 13.4 47,1 19.2 1.5 103.1 , 724 46.0 103,8 187.3 457.9 795.0 District No. 10—Kansas City: Colorado , Kansas , Missouri Nebraska New Mexico , Oklahoma Wyoming , 122 216 52 212 10 188 33 5.1 2.5 6.2 2.1 30.5 4,5 25.5 16,3 24.1 7.8 30.7 *ii.*4' 2.1 28.3 1.8 23.7 3.2 24.4 13.8 86.8 91.3 64.1 3.2 74.3 21.6 162.9 Q5.5 83.5 333.5 37,8 Total Total 38 District No. 11—Dallas: Arizona Louisiana New Mexico Oklahoma Texas 6 25 28 163 537 1 18 134 2.3 63.4 58.8 12.3 47.2 479.2 149.1 23.5 31.5 755.2 76.1 33.8 63.2 643.7 321.8 69.6 144.2 1,941.5 166 Total .5 103,5 597.5 959.3 814.8 2,477.1 Including 5.0 of paper, maturing within 10 days. ADGDST 1, 1915. 245 FEDERAL RESERVE BULLETIN. Commercial paper rediscounted during June by each of the Federal reserve banks, distributed by States and maturities as o date of rediscount—Continued. [In thousands of dollars.] Nevada _.._ . ...... -. Utah Washington Total 39 6 65.4 124.5 9.3 404.5 8.9 64.1 15.6 658.5 33.8 9 1 6 5 7 6.0 £4.0 22.0 25.5 40 6 15.3 20.4 2.6 2.0 3.8 70 9 46.8 50.2 527 ... Paper maturing after 60 days but within 90 days. 61 101.1 183.3 489.7 86.1 860.2 436 479 758 760 508 381 980 462 724 833 759 527 13 20 28 37 102 128 57 41 96 38 166 61 162.6 36.8 210 3 183.0 637.9 199.5 55.7 52.3 46.0 21. & 103.5 101.1 143.2 82.0 149.0 196.7 1,294.5 725.4 151.7 113.3 103.8 162.9 597.5 183.3 38.3 169.3 95 5 50.2 1,667.3 1,092.7 212.8 159.3 187.3 65.5 959.3 489.7 3.3 1.4 404.6 340.4 227.9 76.0 457.9 83.5 816.8 86.1 347.4 289.5 454 8 435.2 4,004.3 2,358.0 64a 1 400.9 795.0 333.5 2,477.1 860.2 7,607 785 10.3 1.810.3 13.5 3,903.3 29.1 5,187.2 38.7 • 2,503.2 M 7 L 13,404.0 100.0 Total Paper maturing commercial after 90 paper redays. discounted. 1 7 a. ...... Paper maturing after 30 days but within 60 days. 86 23 7S District No. 12—San Francisco: Alaska '. California Paper maturing within 30 days. Number Number of banks of member accommobanks. dated. Districts and States. . 265 57 10 BECAFtTULATlON. Districts: No. 1—Boston No. 2—New York No 3—Philadelphia No. 4—Cleveland No. 5—Richmond No. 6—Atlanta.. No. 7—Chicago No. 8—St. Louis .. No* 9—Minneapolis . No 10—Kansas City . No 11—Dallas . Total . . ..;. .... ... ... .. ... ........ ... . ... 5.3 Amounts of commercial paper held by each of the Federal reserve banks on the last Friday of the month of June, distributed by maturities. [In thousands of dollars.] Federal reserve bank. Boston New Y o r k . . . . Philadelphia.. Cleveland Richmond Atlanta Chicago St. Louis Minneapolis... Kansas City... Dallas San Francisco. Total... Percent Paper Paper Paper maturing maturing Paper after after maturing maturing within 30 days but 60 days but after within within 90 days. 30 days. 60 days. 90 days. 196.7 215.5 332.5 415.9 2,952.9 1,693.9 358.0 2S0.2 193.4 207.7 2,071.8 670.6 86.0 212.9 246.0 278.3 2,417.5 1,249.7 319.0 182.1 187.2 171.7 1,579.4 712.5 109.4 74.6 54.3 1,300.1 827.7 257.6 131.6 153.9 95.5 831.8 302.8 9,589.1 36.9 7,642.3 29.4 4,144.8 15.9 5.5 7.1 2.6 35.5 707.4 628.5 252.9 149.6 547.8 135.8 1,971.3 181.7 4,620.2 17.8 Total. 295.3 540.4 653.1 784.0 7,377.9 4,399.8 1,187.5 743.5 1,OS2.3 610.7 6,454.3 1,867.6 25,996.4 100.0 246 RESOUHCES AND LIABILITIES. AUGUST l, 1015, Resources and liabilities of each of the Federal reserve banks and of the Federal reserve system at close of business on Fridays July 2 to July 23. [In thousands of dollars.] RESOURCES. Boston. Gold coin and certificates in vault: July 2 Julj-9 July 10 July 23 Gold settlement fund: July 2 July9 Julylf, July 23 Gold redemption fund: July 2 July9 July 16 July23 Legal tender notes, silver, etc.: July2 JulyO July 10 July 23 Total reserve: July 2 JulyO July 16 July 23 Commercial paper: July 2 July9 :., Julylf* July 23 Bank acceptances: July2 July9 July 16 July 23 United States bonds: July 2 July 9 July 16 July 23 Municipal warrants: July2 July9 July 10 July 23 Due from other Federal reserve banks, net: Juiy2 J i 2 July 9 July 16 July 23 Federal reserve notes, net assets: July2 July9 July 16 July 23 All other resources: July2 July9 July 10 July 23 Total resources: July2 JulyO July 10 July23 New York. Philadelphia. Cleve- Richland. mond. San Minne- Kansas St. Louis. apolis. City. Dallas. Francisco. Atlanta, Chicago. $4,747 $3,706 4,302 3,697 4,388 3,501 4,431 3,529 S24.386 23,992 25,622 25,974 $8,091 7,600 7,654 7,650 1,384 1,384 1,256 1,657 1,107 1,317 1,235 1,187 $7,051 $6,649 7,001 6,199 6,850 6,295 6,652 6,299 $3,037 3,043 3,051 2,763 $8,151 8,079 8,G32 8,897 $231,363 218,021 213,472 214,047 3,702 3,539 3,697 3,611 2,913 3,162 3,756 3,993 1,047 1,618 1,019 367 31,840 47,106 40,680 48,450 30 30 30 30 37 37 37 37 237 268 298 313 21 21 21 21 1,080 1,116 lT036 1,076 1,050 990 974 846 4 4 4 4 471 472 490 493 565 568 17 11 11 21 24,841 22,494 20,492 25,913 32,776 10,560 41,640 10,009 38,324 9,919 38,292 10,188 8,192 8,352 8,119 7,873 10,859 10,247 10,519 10,440 6,877 •7,165 7,670 7,642 9,236 9,729 9,683 9,306 289,129 288,737 287,680 289,486 1,223 1,340 1,477 1,537 804 874 1,163 1,423 1,487 1,506 021 866 985 1,104 6,521 6,222 0,624 6,629 1,845 1,966 1,925 1,936 20,367 27,0S4 28,669 29,085 187 142 155 201 347 297 275 348 322 287 144 148 91 132 166 613 558 405 353 618 5BS 383 414 9,820 9,593 8,971 10,338 194 340 340 340 535 035 GOO 660 3,725 3,725 3,725 3,725 242 242 242 242 1,025 1,025 1,025 1,025 930 930 930 930 1,001 1,001 1,001 1,001 7,052 7,898 7,923 7,923 1,256 1,480 1,571 1,631 1,495 1,594 1,556 1,539 1,383 1,628 1,690 1,770 408 518 568 620 368 445 445 496 214 332 342 454 702 976 986 12,390 13,895 14,391 15,110 773 716 748 427 1,482 1,782 737 1,166 11,979 1,222 2,965 2,996 1,256 240 1,224 210 43 113 54 63 171 429 371 1,230 599 903 1,301 19,862 1 6,107 15,855 15,229 2,320 2,333 2,351 2,353 87 98 107 100 79 183 1,308 1,323 1,180 1,181 7,601 8,379 9,953 9,227 201 155 176 142 1,870 1,482 1,861 2,194 52 • 67 81 3,600 3,094 4,430 4,765 16,061 16,237 16,128 16,256 300,481 305,387 367.878 371,163 $9,179 9,101 8,427 8,644 $126,989 117,093 112,132 113,001 $10,021 14,778 13,909 13,241 $13,361 13,076 13,011 12,966 3,817 0,474 7,041 7,707 2,350 5,846 7,125 10,151 1,822 1,459 1,384 1,671 3.520 3,633 4,351 4,256 2,695 3,259 3,434 3,212 1,040 1,447 1,511 1,304 5,837 13,968 10,271 6 55 55 55 55 37 37 37 37 17 17 17 17 200 265 275 300 225 225 225 225 120 120 35 35 35 35 194 430 171 170 16,123 12,710 17,001 16,301 2,581 2,473 2,953 3,027 848 856 974 1,024 107 100 111 130 323 190 207 340 2,433 13,196 16,011 16,245 16,527 145,523 135,704 136,913 139,508 20,461 •18,747 18,283 17,976 17,746 17,582 18,353 18,203 7,809 7,932 8,208 8,073 5,894 5,559 5,444 5,398 430 414 403 515 629 593 585 577 560 775 727 757 703 095 7,311 7,565 8,050 8,313 4,540 4,522 4,757 4,745 1,683 1,520 1,609 2,097 4,828 4,835 4,013 5,103 1,074 1,305 1,255 1,467 si 2,234 2,292 2,297 2,404 4,269 4,630 4,936 5,160 2,516 1,736 1,779 56$ 443 430 453 2,905 3,807 5,474 4,584 39 71 53 58 160 157 188 161 126 349 582 696 194 198 295 341 20,730 22,591 22,871 22,150 153,260 149,702 152,717 155,101 24,500 23,568 23,607 23,322 204 212 120 249 215 288 103 175 108 301 1,125 1,119 310 623 100 141 137 158 244 315 281 77 22,045 16,346 10,942 22,851 16,757 10,608 22.739 16,705 10,602 23,177 17,167 10,523 9,329 3,560 2,431 2,989 53,954 15,585 11,247 52,340 13,799 11,528 50,983 14.954 11,456 51,163 14,476 11,360 373 418 345 162 520 550 616 535 23 38 69 22 13,826 13,054 14,220 14,187 13,794 13,843 14,708 14,445 * Items in transit, i. e., total amounts due from minus total amounts due to other Federal reserve banks. Total for system. 61 80 AUGUST 1,1915. 247 EESOXIRCES AND LIABILITIES. Resources and liabilities of each of the Federal reserve banks and of the Federal reserve system at close of business on Fridays, July 2 to July 28—Continued. [In thousands of dollars.] LIABILITIES. Boston. Capital paid in: July2 July 9 July 16... July 23 Reserve deposits, net: July 2 July 9 July 16 July 23 Federal reserve notes, net liability: July 2 July 9 July 16 July23 Due to other Federal reserve banks, net: July 2 July 9 July 16 July 23 All other liabilities: July 2 July 9 . . . . . . . . . July 16 July 23 Total 1: al liabilities: July Julv July July 2., 9-. 16. 23. New York. 34,778 4,778 4,778 4,802 $9,962 10,536 10,559 10,812 15,914 17,813 18,093 17,063 135,421' 135,131 136,630 141,409 Philadelphia. $6,225 5,652 5,629 5,376 Cleve- Richland. mond. Atlanta. $5,946 $3,365 $2,414 5,951 3,360 2,415 5,951 3,350 2,415 5,951 3,361 2,414 18,275 17,916 16,900 17,978 16,788 17,946 17,226 5,590 5,225 5,249 5,219 5,009 5,137 5,368 5,757 285 7,885 8,178 7,896 7,950 Chicago. $54,12S 54,104 54,135 54,170 47,3-16 45,732 44,373 44,553 297,883 295iO 297,010 301,063 2,920 2,8S8 2,837 158,260 149,762 152,717 155,lni 12,127 12,314 12,205 12,333 S,S25 10,592 9,100 i 10,591 9,033 11,003 8,937 10,901 6,412 5,891 6,204 0,003 417 178 4,479 5,140 5,700 5,587 12,797 13,375 14,212 14,521 34 26 34 37 12,797 11,011 12,164 11,463 1,673 2,100 1,SS5 1,409 340 219 46 48 50 53 1,468 1,944 1,710 1,220 20,730 22,591 22,871 22,150 Total for system. 56,608 $2,788 $2,422 I $2,817 $2,869 $3,934 6,608 2,788 2.422 I 2,8S5 2,7SG 3,923 6,610 2,790 2.423 2,937 2,770 3F923 6,610 2,794 2,423 ! 2,946 2,758 3,923 11,409 2,151 3,818 1,660 38 San Minne- Kansas Dallas. FranSt. Louis. apolis. City. cisco. 24,500 23,56S 23,607 23,322 22,645 22,851 22,739 23,177 16,346 16,757 16,705 17,167 10,942 10,60S 10,602 10,523 53,954 52,3-10 50,9S3 51,163 15,585 13,799 14,954 14,476 11,247 11,528 11,456 11,360 13,826 13,654 14,226 14,187 13,794 13,843 14,703 14,445 16,061 16,237 16,128 16,256 366,481 365,387 307,S7h 371,163 CIRCULATION OF FEDERAL RESERVE NOTES. Federal reserve notes issued to the banks: July 2 July 9 July 16 * July 23 Federal reserve notes in the hands of the banks: July 2 July 9 July 16 July 23 Federal reserve notes in circulation: July 2 July 9.. July 16 July 23 Gold and lawful money deposited with F . R. agents: July 2 . . . . July9................ July 16 .; July 23 Carried to net liabilities: July 2 July 9 July 16 July 23 Carried to net assets: Julv 2 Jllly9 July 16 July 23 S3,920 3 920 4 420 4,420 $40,500 42,900 45,320 45,320 S2,420 2,500 2,660 2,730 $4,200 4,500 4,600 4,700 $.7,750 8 050 8,200 8,300 $5,150 5,300 5,500 5,500 $4,380 4,380 4,3S0 4,380 $626 626 626 626 $3,300 3,500 3,600 3,800 $3,600 4,100 4,100 4,100 $6,695 7,315 7,915 8,215 $2,040 2,010 2,040 2,040 SS4,5S1 89,131 93,361 94,131 568 443 430 453 3,145 3,987 5,674 4,784 39 71 53 58 249 215 288 308 191 163 132 243 30S 430 4C2 513 2,320 2,333 2,351 2,353 63 87 9S 107 SO 100 79 183 223 512 401 350 266 225 265 178 l,30S 1,323 1,180 1,181 8,760 9,8*9 ll,41ti 10,711 3 352 3,477 3 990 3 967 37,355 38,913 39,646 40,536 2,381 2,429 2,607 2,672 3,951 4,285 4,312 4,392 7,559 7;8S7 8,06S 8,057 4,842 4,870 5,038 4,987 2,060 2,047 2,029 2,027 563 539 528 519 3,211 3,400 3,521 3,617 3,377 732 717 SGO 859 75,812 3,5S8 3,696 3,750 6,429 7,090 7,650 8,037 79,242 81,945 83,420 3,920 3,920 4,420 4,420 40,320 42,720 45,120 45,120 2,420 2,500 2,660 2,730 4,200 4,500 4,600 4,700 2,550 2,750 2,700 2,300 1,950 1 850 2,150 2,150 4,3S0 4,380 4,3S0 4,380 626 026 626 C26 3,300 3,500 3,600 3,800 2,960 3,410 3,410 3,410 1,950 1,950 1,050 2,450 2,040 2,040 2,040 2,040 70,616 74,246 77,650 78,120 5,009 5,137 5,36S 5,757 2,892 2,920 2,SS8 2,837 417 178 4,479 5,140 12,797 13,375 340 5,587 14,521 •• 568 443 430 453 2,965 3,807 5,474 4,584 39 71 53 5S 249 215 2SS 308 14 9.1 •> 2,320 2,333 2,351 2,353 63 87 . 9S 107 89 100 79 183 1,308 1,323 7,601 8,379 1 1 Qn Q Q^T 1,181 9,227 248 FEDERAL RESERVE AGENTS ACCOUNTS, AUGUST l t 1915. Statement of Federal reserve agents1 accounts at close of business Fridays, July 2 to July 23, (In thousands of dollars.) Boston. Federal reserve notes received from the Comptroller: July 2 July 9 $11,000 11,800 11,800 11,800 SS&::: Federal reserve notes returned to the Comptroller: July 2 July 9 '• July 16 July 23 Amount of Federal reservo notes chargeable to Federal reserve agent: July 2 July 9 July 16 July 23 Federal reserve notes in hands of agent at close of business FridayJuly 2..., July 9 July 16 July 23 ... Federal reserve notes issued to Federal reserve bant, less notes returned to agent for redemption and cancellation: July 2 July 9 Julyie July 23 Held by Federal reserve agent in reduction of liability on outstanding notes: Gold coin, and certificates— July 2 July 9 July 16 July 23 Lawful moneyJuly 2 July 9 July 16 July 23 As security for outstanding notes: Commercial paper i— July 2 July 9 July 16 July 23 $45,040 47,810 47, $40 49,840 Philadelphia, Cleve- Richland. mond. Atlanta. So,360 $6,000 $8,420 $8,500 5,360 6,000 9,160 8,500 5,340 6,400 9,160 S,500 5,340 6,400 9,160 8,500 Chicago. San St. Minne- Kansas Louis, apolis. City. Dallas. Francisco. $9,260 §3,400 $4,000 $6,000 $9,300 $3,600 9,260 3,400 4,000 6,000 9,295 3,600 9,260 3,400 4,000 6,000 9,775 3,600 9,260 3,400 5,000 6,000 9,775 10,000 Total. $H9,8S0 124,215 125,075 134,475 5 20 20 n,8oo 11,800 11,800 45,040 47,840 47,S40 49,840 5,360 5,340 5,340 5,310 6,000 6,000 6,400 6,400 8,420 9,160 9,160 9,160 8,500 S,500 8,500 8,500 9,260 9,260 9,260 9,260 3,400 3,400 3,400 3,400 4,000 4,000 4,000 5,000 6,000 6,000 6,000 6,000 9,295 9,295 9,775 9,775 3,600 3,600 3,600 10,000 119,875 124,195 125,075 134,445 7,080 7,8S0 7,3S0 7,380 4,540 4 940 2,520 4,520 2,940 2,840 2,680 2,580 1,800 1,500 1,800 1,700 670 1.110 960 5,150 3,200 3,000 3,000 4,880 4,880 4,880 4,880 2,774 2,774 2,774 2,774 700 500 400 1,200 2,400 1,900 1,900 1,900 2,600 1,980 1,860 1,560 1,560 1,560 1,560 7,960 37,094 35,064 31,714 40,314 3,920 3,920 4,420 4,420 40,500 42,900 45,320 45,320 2,420 2,500 2,660 2,730 4,200 4,500 4,600 4,700 7,750 8,050 8,200 8,300 3,350 5,300 5,500 5,500 4,3S0 4,380 4,380 4,380 626 626 626 3,300 3,500 3,600 3,800 3,600 4,100 4,100 4,100 6,695 7,315 7,915 8,215 2,040 2,040 2,040 2,040 82,781 89,131 93,361 94,131 3,920 3,920 4,420 4,420 40,320 42,720 45,120 45,120 • 2,420 2,500 2,660 2,730 4,200 4,500 4,600 4,700 2,550 2,750 2,700 2,300 1,950 1 950 2,150 2,150 4,380 4,380 54,260 24,260 626 626 626 626 3,300 3,500 3,600 3,800 2,960 3,410 3,410 3,410 1,950 1,950 1,950 2,450 2,040 2,040 2,040 2,040 70,616 74,246 77,536 78,006 5,200 5,300 5,500 6,000 1,400 3,350 3,350 3,350 640 690 4,745 5,365 5,965 5,765 7,750 8,050 8,200 8,300 3,350 5,300 5,500 5,500 3,600 4,100 4,100 4,100 6,695 7,315 7,915 8,215 5,202 5,302 5,502 6,095 3,203 3,355 3,351 3,350 640 690 690 5,867 5,598 6,182 5,985 11,000 180 180 200 200 Total— July 2... July 9... July 16.. July 23.. 3,920 3,920 4,420 4,420 i Amount of commercial paper turned over to the Federal reserve agent: July 2 July 9 July 16 July 23 •..., New York. 40,500 42,900 45,320 45,320 180 ISO 200 200 2 2,420 2,500 2,600 2r730 4,200 4,500 4,600 4,700 4,380 4,380 *4,260 M,260 626 626 626 626 3,300 3,500 3,600 3,800 Exclusive of $120,000 in the gold redemption fund with the Treasurer of the United States. 12,165 14,885 15,705 16,005 2,040 2,040 2,040 2,040 82,781 89,131 93,241 94,011 15,092 15,125 15,925 16,321 INDEX. Page. Page, Acceptances 240-241 Address by Mr. John Perrin, of Federal Reserve Bank of San Francisco 186-188 Address by Mr. D. 0. Wills, of Federal Reserve Bank of Cleveland 188-192 Business conditions, general 228-235 Circulars and regulations 215-217 Regulation O—Issuance and redemption of Federal reserve notes 214-215 Circular 16—Trade acceptances 216 Clayton Act, interpretation of 221 Conference of bank examiners 217 Cotton situation 180-182 Discount rates in effect 214 Earnings and expenditures of Federal reserve banks 176-179 Federal reserve agents* accounts, statement of 248 Gold imports and exports 236-239 Gold settlement fund 183-185 Government bonds, purchase of 217 Informal rulings of the Board 211-213 Intradiatrict clearance system, establishment of. 192-210 Law department 218-224 Right of State banks and trust companies to subscribe for stock.., 218 Surrender of stock by a member bank reducing its surplus 218 Rediscount of drafts payable on condition 219 Payment of dividends by Federal reserve banks 220 Interpretation of Regulation F 221 Interpretation of the Clayton Act 222 Movement of principal assets and liabilities of Federal reserve banks 233-235 Paper currency outstanding 241 Rediscounts, distribution of 242-245 Resources. and liabilities of Federal reserve banks 246-247 State bank membership in Federal reserve system. 182 Trustee powers, applications for, approved 214 Work of the Federal Reserve Board 175 o