Full text of Federal Reserve Bulletin : February 1917

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ISSUED.BY THE

AT WASHINGTON

FEBRUARY, 1917

WASHINGTON
GOVERNMENT PRINTING OFFICE
1917

FEDERAL RESERVE BOARD.
EX OFFIOIO MEMBERS.
WILLIAM G. M C A D O O ,
Secretary of the Treasury,
Chairman.
JOHN SKELTON WILLIAMS,
Comptroller of the Currency.




W. P. G. HARDING, Governor.
PAUL M. WARBURG, Vice Governor.
FREDERIC A. DELANO.
ADOLPH 0. MILLER.
CHARLES S. HAMLIN.
H. PARKER WILLIS, Secretary.
SHERMAN ALLEN, Assistant Secretary and Fiscal
Agent.
M. C. ELLIOTT, Counsel,




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in

TABLE OF CONTENTS.
Page.

Review of the month
Immediate availability of drafts
New national bank examiner appointed
Status of clearance system
Purchase of United States bonds
Securities of foreign governments, policy of Board concerning
Shipment of unfit Federal Reserve notes for redemption
New form showing change in reserve position
Advantages to State banks entering the Federal Reserve System
Receipts and disbursements of the Federal Reserve Board
Earnings and expenses of Federal Reserve Banks
Gold settlement fund
Proposed amendments to Federal Reserve Act
Recommendations of Federal Advisory Council on proposed amendments
Amendment as to reserve provisions
Relation of subtreasuries to Federal Reserve Banks
Commercial failures in 1916
Informal rulings of the Board
National bank charters granted
Operation of clearing plan
Fiduciary powers granted
Law department
Business conditions throughout the Federal Reserve districts
Distribution of discounted paper
Acceptances, distribution of
Federal Reserve Bank statements
Gold imports and exports
Earnings on investments of Federal Reserve Banks
Discount rates in effect




IV

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149
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152

VOL. 3

FEBRUARY 1, 1917.
REVIEW OF THE MONTH.

No. 2

net gold imports $19,316,000. The detailed
figures for the movement since the opening of
Proposed amendments to the Federal Rethe war are as follows:
serve Act have been completed, several not at
first included in the Board's program have been Gold imports and exports of the United States from Augt
added to those finally submitted; the annual
1, 1914, to Jan. 12, 1917.
report has been completed and is now in the
[In thousands of dollars.]
hands of the printer. A complete review of
Excess
the working of the Federal Reserve System for
Imports. Exports. imports
over
the year, including a report from the chairman
exports.
of each Federal Reserve Bank, has been prepared and put into form for publication in con- Aner. 1 to Dec.31 ,1014
23,253 104,972
81,719
1 to Dec.
1915
451,955
31,426
420,529
nection with the annual report itself, during the Jan. 1 to Dec. 31, 1016
Jan.
31,
685,745 155,793
529,952
51,712
13,015
38,007
past month. In explanation of the suggested Jan. 1 to Jan. 12, 1917
Total..
1,212,065 305,800
906,859
amendments Governor Harding has been given
three formal hearings by the Committee on
Banking and Currency of the House of RepreThese importations have been drawn from
sentatives, and has arranged for similar con- a variety of sources. They have been primaferences with the Committee on Banking and rily due to the continuing balance of trade in
Currency of the Senate. Elsewhere in this favor of the United States. New foreign
issue is printed the complete text of the amend- loans since offered have furnished additional
ments to the act as recommended by the Board means of checking further gold movements
and as introduced in Congress, together with for the present at least. Current announcean explanatory statement made public at the ments indicate that these loans are to be cast
time the amendments were introduced. The in an investment form. It is therefore to be
recommendations thus made constitute, as a expected that investments in the now securities
whole, the Board's program of policies de- offering will be made with the clear undersigned to provide a means of dealing with the standing, on the part of the community that
gold situation, as affected by the supplies of they can not properly be regarded as reprethe metal which continue to be so largely senting commercial banking resources immediimported.
ately convertible into cash.
The question of what general policy should
The inward gold movement has continued
unabated during the four weeks be pursued by the banks of the country, and
ending January 12, 1917, total particularly by the Federal Keserve Banks,
gold imports for the period— in view of the gold situation and the con$131,907,000—exceeding the gold exports by tinued expansion of bank loans promises to
$112,357,000. The corresponding figures for continue to be a mattter of first importance for
1916 are: Total gold imports $29,769,000 and some time to come. The Board's view of the
75




76

FEDERAL KESEEVE BULLETIN.

FEBRUARY 1, 1917.

general situation has been fully set forth along those lines with very good results, and
during the past few weeks, and its program acceptances and rediscounts have been reof action with respect to legislation lias been duced by about $40,000,000 since they reached
made clear. It is evident, however, that the their highest point, early in December. So
immediate policy of the Federal Reserve Banks long as the present ease continues there should
in regard to discounts and open market opera- be little difficulty in continuing the present
tions must be shaped in consonance with the polic}7. By permitting the open market to
Board's ideas as to the general situation.
absorb the bankers7 acceptances, the additional
In view of the fact that tire rate for bank- object is gained of acquainting member banks
ers' acceptances recently main- with dealing in acceptances and their becoming
teined
accustomed to investing in them.
* * » Federal Reserve
Investment operations of the Federal ReBanks has been somewhat highserve Banks for the four weeks
er than the open-market rate, the holdings of
Transactions at
acceptances by the Federal Reserve Banks Reserve Banks. ending January 19 were, in
have been materially reduced during the past
accord with the policy just outweeks. During the month, December 12 to Jan- lined, on a considerably smaller scale than for the
uary 12, as already seen, the net gold imports four weeks immediately preceding. This may be
into the United States amounted to about seen from a comparison of the figures of total
$112,000,000. Excess reserves have materi- earning assets held by the banks on December
ally increased in consequence. It may be 29, 1916, $222,082,000, and on January 26,
assumed that this plethora of gold is not en- 1917, §181,426,000. The net liquidation'in all
tirely a natural one and that much of it will be classes of investments for the four weeks under
absorbed in consequence of issues of new securi- discussion amounts to $40,656,000. Liquidaties, after which the country will probably wit- tion of bills discounted and bought in open
ness again the same development that has been market was even greater, as indicated by the
characteristic of similar periods in the recent following table showing the total holdings of
past—a condition in which the deposit and bills by each Federal Reserve Bank on Decemloan structure will again expand so as to absorb ber 29, 1916, and January 26, 1917:
largo portions of the new gold.
There is general agreement that this continJan. 20,1917. Decrease.
I Doc. 29,191C.
uous and rapid growth of deposits and loans is
not without danger. With the present ease Boston
816,452,000
¥14,2S8,000
92,104,000
48,525,000
29,100,000
19,419,000
of money, it would appear, therefore, to be a New York
9,520,000
Philadelphia
! 10,603,000
7,143,000
7,831,000 1 3,122,000
Cleveland
| 10,953,000
wise policy to permit the earning assets of Richmond
7,838,000
1,265,000
|
6,573,000
0,031,000
1,013,000
Atlanta
I
7,044,000
the Federal Reserve Banks to be reduced |1 Chicago
9,358,000
I 14,028,000
5,270,000
6,099,000
1,990,000
St. Louis
I
8,095,000
by a substantial percentage, and thereby to Minneapolis
7,78.1,000
321,000
I
8,10.2,000
3,508,000
Kansas City
•
4,400, 000
838,000
absorb, temporarily at least, an equivalent Dallas ."
2,579,000
i
3,020,000
441,000
9,409,000
San Francisco
12,632,000
3,223,000
amount of the newly imported gold. Of course
157,093,000
113,408,000
44,285,000
Total.
such a policy will be carried out in a careful
1
way, and no definite figure to which the inIncrease.
vestments of the Federal Reserve Banks should
Gains of §3,274,000 shown in the amount
be reduced can be set. Changes in conditions
may occur at any moment which may render of municipal warrants ami of $355,000 in the
it necessary to reverse such a policy or to apply amount of United States securities owned
it even more energetically. During the past account for the smaller total decrease in total
few weeks Federal Reserve Banks have operated investments shown above.




F E B U C A U Y 1,

ii)il

FEDEBAL RESERVE BULLETIN.

77

In continuation of similar statements, there Great Britain. The exchange situation bc„
are herewith {riven the most twceii the United States arid various foreign
Reserve condi, -, .
i
.
,
countries has, however, developed in such a
jora
recent aata showing changes way as to make further action at an early date
t
during January, 1917, in the desirable. This situation has found special illusreserve condition of banks in the principal east- tration in quotations for exchange on certain
ern cities. On the whole the position of these South American countries, as well as on. Spain,
banks about the end of January appears and in a lesser degree, in oriental exchange restronger than a month before. Thus the lationships. The policy which is being recomreserve percentage of the 60 banks forming the mended by the Board for the purpose of imNew York Clearing House Association—as proving those conditions is that of receiving
indicated by the ratio of their total reserves gold at Federal Reserve Banks, for account of
to their net demand deposits—rose from 20.5 designated foreign institutions of the countries
per cent on December 23, 1916, to 22.3 per with which such exchange relationships are
cent on January 6, and to 25.2 per cent on established. Gold so received is "eax-markJanuary 20, 1917. These percentages are od"—that is to say, it is held as a special or
based upon returns from 31 banks which are trust fund, remaining thus the property of the
members of the Federal Reserve System and foreign institution by which deposited, and
29 nonraembers. Similarly, reports of the being' hold to avoid unnecessary, costly, or
New York State Banking Department for the dangerous transportation in the belief that
State banks in Greater New York indicate a eventually every purpose will bo served by regradual rise of the reserve percentage from 26 taining it in the United States. An extension
per cent on December 30, 1916, to 28 per cent of those relationships with foreign banks is
on January 13, followed by a decline to 26.6 per probable as soon as conditions permit, the
cent on January 20, 1917. Reports for the Board's policy in this regard being the same
trust companies in Greater New York are even us that already announced when similar probmore favorable, the reserve percentages show- lems have been under consideration on former
ing a steady rise for the four weeks from 21.7 occasions.
to 26.9 per cent.
As already stated in a previous number of
The average excess reserves of the 34 national
the Federal Keserve Bulletin,
banks and 7 trust companies, constituting the Work Hinder the
certain appeals made to the
Philadelphia Clearing House Association, dur- Clayton Act.
Board under the terms of the
ing the same period, steadily increased from
Clayton Act had been only temporarily settled
§19,323,000 to 844,406,000, while like figures
during the early autumn, it being understood
for the associated 10 national banks and the
the Old Colony Trust Company of Boston, all that further action might bo taken with respect
members of the Federal Reserve System, to the directorships the status of which was thus
show an increase for the four weeks from in doubt, after more opportunity had been
afforded for investigation and discussion. It
$25,886,000 to $42,314,000.
was agreed that the matter should be reconsidFurther effort has been made by the Federal
Reserve Board during the past ered on or about January 1, 1917. The cases in
Connections
,
, ,-, c « \
~
v1
abroad
month toward the envelop- question were those of certain directors attached
ment of its policy with re- to large institutions whose operations covered a
spect to foreign connections. This would in wide extent of territory, and which might, thereany event be a logical continuance of the policy fore, be theoretically considered to be in comalready announced and exemplified in the pro- petition with one another at some point or
jected arrangement with the Bank of England points in their common field. Further inveswhereby the latter institution would act as for- tigation of the matter convinced the Board
eign agent of the Federal Reserve System in that the situation was one that was likely, in




78

FEDEEAL RESERVE BULLETIN.

FEBRUARY 1,1917.

some degree at least, to be affected by the proc- bank, the vacant directorship at which is soon
ess of shifting reserves from city correspond- to be filled. Salary readjustments for the
ents to Federal Reserve Banks, which, under year 1917 have been approved and notice in
provisions of existing law, is to be consum- accordance therewith sent to the Federal Remated on November 16, 1917, or sooner should j serve Agents to be communicated to the rethe amendments recommended by the Board spective boards of directors. All existing
be enacted. It was, therefore, thought best designations of Federal Reserve Agents and
to continue for not to exceed another year, the Deputy Federal Reserve Agents not altered
tentative approval which had been given to the through the retirement of former incumbents
retention of these directorships by the directors and the appointment of new ones, have been
making applications, though it was indicated renewed and confirmed for the 3^ear 1917.
in each case that the consent so accorded was Reserve bank dividend liabilities, which have
tentative only, and that further investigation been a matter of discussion and consequently
would bo undertaken for the purpose of ar- unsettled, as a result of the transfer of member
riving at a final conclusion. In fact, here, as banks from one district to another, have been
elsewhere, the Board's work with reference to adjusted upon conditions arrived at hy disthe application of the Kern amendment to the cussion and mutual agreement between the
Clayton Act must be regarded as a continuing Federal Reserve Banks affected by such
operation which can never be definitely fin- changes.
ished. New facts or evidence bearing upon the
The application of the. First National Bank
business of given institutions may at any time j of Boston to open a branch at Buenos Aires,
develop, or the natural growth of the business | Argentine Republic, was granted by the Board
of given institutions may be such as to bring j on January 29.
them into substantial competition, although j
they were not previously regarded as being so.
Immediate Availability of Drafts.
It will, therefore, naturally be necessary from
Acting upon a report submitted by a comtime to time to revise the decisions already
made, or conditions may be such as to neces- mittee appointed by governors of Federal Resitate the revocation of permission already serve Banks, the Federal Reserve Board on
granted in certain cases, in order to deal ap- Januar3^ 23 approved a plan for making immepropriately with new conditions without at the diately available at par drafts drawn b}^ memsame time subjecting some directors to a rule ber banks on Federal Reserve Banks. While
different from that applied in the cases of others. it was recommended by the committee of govVarious conferences have ernors that at the outset the privilege of drawInternal affairs of fe h ^ fe ^ p d
j R
ing such drafts should be limited to country
the system.
/ , .
banks, or, in other words, to those carrying a
serve Board auring the past 12 per cent reserve, the Board suggested that
month with representatives of Federal Reserve all member banks be permitted to participate
Banks. On January 22-23 a special commit- in the arrangement, with a limitation of $10,000
tee of five, selected from the governors of the per day as the total that may be drawn by any
banks, held a session at Washington for the one bank. The letter of the Governor of the
purpose of considering the matter of immedi- Board to the chairman of the committee, sent
ate credit between Federal Reserve Banks for out on January 25, is given below. Following
checks drawn on Federal Reserve Banks. it is the report submitted by the committee.
Other conferences relating to special matters In addition to the committee, Gov. Aiken, of
of pending interest have been held from time Boston, was present at the conference.
The Federal Reserve Board this afternoon
to time with representatives of the various
approved and adopted the report of the combanks. The choice of Class C directors has
mittee of governors in the matter of making
been completed with the exception of one




FEDERAL RESERVE BULLETIN.

FEBRUARY 1, 1917

immediately available at par drafts drawn by
member banks against Federal Keserve Banks,
with one modification, to wit, that all member
banks and not merely those which are country
banks, may be allowed to participate in the
arrangement, the limitation, however, in all
cases to remain at $10,000 per day as the total
that may be drawn by any one bank.
The Board regards the plan suggested by the
governors' committee as the first and essential
step that must be taken, and suggests that the
circular which you propose to send out state
clearly that it is proposed to develop the plan
and that the limitation adopted is not intended
to be permanent, but only a temporary safeguard. It might be well to point out also that
as the limitation to $10,000 per day would to a
great extent prevent the larger banks in the
cities from making use of the new facilities, the
country banks will be the immediate beneficiaries. The Board would suggest that the
circular, which should contain a facsimile of the
proposed form of draft, be issued as soon as it
can be prepared, and that the plan be made
effective as early as possible, and not later than
April 1st. The Board feels it is important that
Federal Reserve Banks should get themselves
in readiness to extend to their members more
of the facilities which have hitherto been given
by city banks to their country correspondents,
such as the collection of drafts and maturing
paper, and the Board believes that it would be
well for a statement regarding this to be made
in the circular. It is understood that the circular will be prepared and signed by the committee of governors who made the report and
that copies of it will be sent by the committee
to each of the Federal Reserve Banks for distribution.
The Board will be obliged if you would
kindly have a draft of the circular sent to it for
its information before it is made public or
distributed.
A meeting of the committee for discussion of the
plan to make drafts upon Federal lleserve
Bamlcs accei)taMe to immediate availability at
var in all Federal lleserve Banks.
Meeting
held Monday, January 22, 1917, Washington,
I). C, at 10.25 o'clock a. m.

Present: Messrs. Treman (chairman), McDougal, Seay, Ithoads, Fancher, McKay, and
Hendricks. Mr. Heudricks was appointed secretary to the meeting.
77593—17




2

79

At the last conference of governors there was
a joint session with members of the Federal Reserve Board, at which the above-mentioned
topic was discussed, and at that time the following vote was adopted:
" Voted: That the chairman be authorized to
appoint a committee of five to confer with the
Federal Reserve Board and assist in preparing
a plan in connection with the immediate availability of drafts on Federal Reserve Banks."
After informal discussion of the plan as outlined by Gov. Seay, it was the unanimous opinion of this committee that when the final transfer of reserves becomes effective, in accordance
with the amendment which is now before Congress, some machinery should be in readiness to
provide for the transfer of funds for such banks
as have been in the habit of using drafts on central reserve cities; and in conformity with this
view the committee unanimously agreed upon
the following plan:
(1) That the privilege of drawing "Federal
Reserve exchange" drafts should be limited to
the country banks, or, in other words, to those
banks carrying a 12 per cent reserve;
(2) That the drafts should be limited as to
the amount drawn in any one day by a member
bank to $10,000;
(3) That the drafts should be drawn by member banks upon their own Federal Reserve
Bank and made receivable for immediate availability at par at any one Federal Reserve Bank
specified in the draft;
(4) That a special uniform form of draft be
adopted by all the Federal Reserve Banks, such
drafts when drawn upon this form to be the
only ones which arc receivable for immediate
credit at par;
(5) That the drawing bank be required to
give immediate advice to its Federal Reserve
Bank of all "Federal Reserve exchange" drafts
drawn, and that such drafts be immediately
charged to the member bank's account on receipt of advice;
(6) That this plan become operative when
the final transfer of reserves has become effective and be made available to such member
banks as may agree to terras formulated by the
Federal Reserve Bank.
The committee then discussed whether it
would be necessary to immediatelv inaugurate
daily settlements in the gold-settlement fund,
and, on motion by Gov. Seay, it was moved and
carried that, in the opinion of the committee,
under the existing conditions and the terms

80

FEDERAL RESERVE BULLETIN.

above recited, there would be no necessity for
daily settlements through the gold-settlement
fund at the present time.
The committee next considered the advisability of putting into operation at this time the
Gidney plan of a silver and legal fund. After
discussion, on motion of Gov. Seay, it was
moved and carried that, under existing conditions, there is no necessity for establishing such
a fund at this time.
National Bank Examiner at New York.

Hon. William P. Malburn, Assistant Secretary of the Treasury, in charge of fiscal
bureaus, resigned on January 24 to accept
appointment as chief national bank examiner
for the Second Federal Reserve District, with
headquarters at New York. Mr. Malburn, who
takes the place of Mr. Charles Starek, was
appointed Assistant Secretary of the Treasury
in March, 1914, and prior to that time practised law in Denver, Colo.
Status of the Clearance System.

In answer to a letter of inquiry from a leading
western firm doing a large wholesale dry goods
business, the following statement of the present
status of the collection system under the
Federal Reserve Act has been transmitted by
a member of the Federal Reserve Board:
The check clearing and collection plan which
was established by the Board last year and
which began operations on July 15, has so far
fulfilled the expectations of the Board, and
has, I think, demonstrated its feasibility and
usefulness.
The collection system is not yet complete, as
the Federal Reserve Banks do not handle
checks on all State banks and trust companies,
although the total number of banks on their
lists now aggregates more than 15,000. The
Board has, however, formulated a plan which
is dependent somewhat upon the effect of a
proposed amendment which it has transmitted
to the Committee on Banking and Currency
in the Senate and House, which will enable
the Federal Reserve Banks to collect checks
drawn upon any bank or trust company in




FEBRUARY 1,1917.

the United States, and we hope that within
90 days the check clearing system will be
comprehensive and all embracing. It is only
fair to say that a number of banks, particularly those in the smaller towns, are not yet
reconciled to the check clearing provisions of
section 16 of the Federal Reserve Act which
the Board has endeavored to put into full
operation. It has been the custom of these
banks to make an exchange charge in remitting for checks drawn on themselves, while
under the new system they are obliged to
remit to Federal Reserve Banks at par. It
is a fact, however, that in most cases country
banks, in order to receive these checks from
the city institutions where they are concentrated, have been obliged to carry deposit
accounts with the city banks upon which, as
a rule, they receive interest at the rate of
2 per cent per annum. A considerable portion
of the available funds of the country banks
are therefore invested at this low rate of
interest, in order to enable them to hold the
collection business. Under the system provided for in the Federal Reserve Act it will
no longer be necessary for any bank to carry
an account with a larger bank in order to
control collections, and thus the funds which
are now represented by these accounts with
city banks will be available to the country
banks for loans to their own customers at
home at much higher rates, of course, than
2 per cent per annum. While it is only natural
that the country banks should object to the
loss of a direct profit to which they have been
accustomed, I can not but feel that if the new
plan is given a fair trial, matters will adjust
themselves naturally, and that by reason of the
ability of the country banks to make a greater
volume of loans at home their profits will not
be materially decreased, and in many instances
may actually show an increase.

Purchase of United States Bonds.

In an announcement made on January 9,
the Federal Reserve Board advised the 12
Federal Reserve Banks that it will not require
them to purchase during the year 1917 more
than $15,000,000 of United States bonds offered
for sale by member banks through the Treasurer of the United States. It will require
banks to purchase on April 1, 1917, the full

FEBRUARY 1,

1917.

FEDERAL RESERVE BULLETIN.

amount of this $15,000,000, or so much
thereof as may be offered for sale for that
quarter by member banks through the Treasurer of the United States.
Under the provisions of section 18 Federal
Reserve Banks are not permitted to purchase
from member banks through the Treasurer
more than $25,000,000 of bonds in any one
3rear, less the amount of bonds bearing the
circulation privilege acquired in the open
market during that year. There is no limit
imposed by law on the amount of bonds which
may be purchased in the open market by
Federal Reserve Banks.
There were purchased and exchanged by
Federal Reserve Banks for the quarter ending
December 31, 1916, $18,597,200, divided into
$9,301,000 of one-year 3 per cent notes, and
$9,306,600 in thirty-year 3 per cent conversion
bonds. This amount of conversions was made
possible through the announcement of the
Board that it would approve for conversion
all, or any portion, of the banks' full annual
allotment as of January 1, 1917, or the beginning of any other quarterly period.
A circular relating to this subject sent out
by one of the banks is reprinted below:
Section 18 of the Federal Reserve Act provides that any member bank desiring to retire
the whole or any part of its circulating notes
may file with the Treasurer of the United
States an application to sell for its account at
par and accrued interest United States bonds
securing circulation to be retired.
It seems appropriate at this time to issue
blank forms for the use of member banks in
this district in making applications during the
year 1917, together with suggestions concerning the procedure to be followed. In making
applications member banks should bear in
mind the following points:
1. The only bonds that are eligible for sale
in this manner are United States bonds which
at the time of application are actually securing
circulation of national-bank notes to be retired.
2. The application should be forwarded directly to the Treasurer of the United States,
Washington, D. C.
Special attention is called to the fact that
national banks are not required to maintain a
minimum amount of bonds on deposit with the




81

Treasurer of the United States, when such bonds
are sold through the Treasurer of the United
States under the provisions of section 18.
3. The applications must be received by the
Treasurer of the United States at least 10 days
before the end of the quarterly period at which
the sale is desired to be made. Therefore for
the quarter ending March 31, 1917, applications should be received by the Treasurer of
the United States on or before March 21, 1917.
4. It is optional with the Federal Reserve
Board whether or not it shall require the Federal Reserve Banks to purchase the bonds
offered for sale.
5. If the Federal Reserve Banks are required by the Federal Reserve Board to purchase the bonds, the price will necessarily be
par and accrued interest.
6. The aggregate amount of such bonds
which the Federal Reserve Banks can be required or permitted to purchase is limited to
$25,000,000 in any one year, but this aggregate
amount may furthermore be reduced by the
amount of bonds bearing the circulation privilege purchased during the same year by the
Federal Reserve Banks in the open market.
The Federal Reserve Board has announced
that it will not require Federal Reserve Banks
to purchase during the year 1917 more than
$15,000,000 of bonds offered for sale by member banks through the Treasurer of the United
States. It will, however, require Federal
Reserve Banks to purchase on April 1, 1917,,
so much of that amount of bonds as may be
offered for sale through the Treasurer on or
before March 21, 1917, provided such bonds,
added to the amount of bonds bearing the
circulation privilege purchased by Federal
Reserve Banks in the open market during the
first quarter do not exceed $25,000,000.
Though there is no legal limit on the amount
of bonds which may be bought by Federal
Reserve Banks in the open market, in order
that member banks may have an opportunity
to sell the maximum amount of bonds under
section 18, the Federal Reserve Banks will
refrain from purchasing 2 per cent bonds in the
open market until after March 1, 1917, but will
thereafter feel at liberty to make such purchases
in the open market. Therefore it is suggested
that member banks desiring to retire their
circulation during the year 1917, under the
provisions of section 18 of the act, file their
applications with the Treasurer of the United
States before March 1, 1917, and at the same
time advise the Federal Reserve Bank of their

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FEDERAL RESERVE BULLETIN.

district the amount of each application to the
Treasurer in order that the Federal Reserve
Banks may have prompt knowledge of the
total amount of bonds offered to the Treasurer
of the .United States, and thus be enabled to
arrange their open market purchases with
regard to the best interests of member banks.
There are inclosed herewith original and
duplicate forms of appKcation to the Treasurer
of the United States, for the sale of United
States bonds; also blank form of resolution
authorizing application for such sale and the
retirement of circulation secured thereby.
The original application and copy of resolution, certified under seal, should be sent direct
to : the ^Treasurer of the United States, Washington^lD. C. Duplicate form of application
should be filled out and signed and forwarded
to this bank.

FEBRUARY 1,1917.

strengthening of the general banking situation—
a question concerning which it felt the banks
were entitled to a knowledge of its opinion.
The powers of national banks, however, are
clearly"*defined by law, and the Board's statement is in no sense a regulation controlling the
action of individual banks whose directors are
authorized, within the limitations of law, to
determine the character and volume of their
investments. It is assumed, however, that
any well-managed bank in making investments
will have due regard to its ability to respond
to all demands which may be made upon it in
the ordinary course of business or which may
reasonably be expected to arise in the future.
JANUARY 13,

1917.

Shipment of Unfit Notes.

The Federal Reserve Board and the Treasury Department have agreed upon a plan, the
details of which are set forth in the following
There is reprinted below for the information
letter, whereby Federal Reserve Banks may
of banks and the public a letter sent out by the
forward unfit Federal Reserve notes of other
Governor of the Federal Reserve Board in reply
Federal Reserve Banks directly to Washingto an inquiry received from a national bank on
ton for redemption:
the Pacific Coast as to the Board's policy conIn January, 1916, a plan was formulated to
cerning obligations of foreign governments:
permit Federal Reserve Banks to forward
Your letter of the 6th instant was duly their own unfit Federal Reserve notes direct
received and has been considered by the Fed- to the Treasurer of the United States for reeral Reserve Board. You ask whether the demption. That plan, however, did not perstatement of the Board to which you refer was mit a Federal Reserve Bank to ship to the
intended merely to call the attention of the Treasurer Federal Reserve notes issued by any
banks to the possibility that certain foreign other Federal Reserve Bank.
bills although short-term on their face, might
Section 16 of the Federal Reserve Act probe subject to renewal or might be refunded into vides in part that, whenever a Federal Reserve
long-time obligations; or whether, on the other Bank receives Federal Reserve notes issued by
hand, the statement was intended to express another Federal Reserve Bank such note shall
absolute disapproval of all such investments. be returned to the Federal Reserve Bank of
You state, further, for the information of the issue for credit or redemption. In order to avoid
Board, that your bank is contemplating the a roundabout shipment of Federal Reserve
purchase of a small block of foreign govern- notes, first, from a receiving Federal Reserve
ment securities with funds that you can not Bank to the reserve bank of issue, and then from
very well employ otherwise at present, with the bank of issue on to Washington for redempthe expectation of reselling if you should need tion, the following plan which permits a receivfunds for other purposes.
ing Federal Reserve Bank, under power of
In reply I would say that there has been sent attorney, to forward unfit Federal Reserve
to j you a copy of the Federal Reserve Bulletin notes of another Federal Reserve Bank direct
for December, 1916, containing the statement to the Treasurer for redemption, has been apof the Board to which you refer, from which you proved by the Treasury Department and the
will see that the statement was intended as an j Federal Reserve Board.
expression of the Board's views on a question
1. Each Federal Reserve Bank shall give to
of a broad policy touching the protection and each other Federal Reserve Bank a power of
Securities of Foreign Governments.




FEBRUARY 1,1917.

FEDEBAL RESERVE BULLETIN".

83

!
attorney authorizing such other bank to act I (c) As soon as the Richmond bank makes
as its agent in forwarding any of its unfit j the shipment described in paragraph (b) it
Federal Reserve notes to the Treasurer of the I charges the account of the Federal Reserve
United States for redemption. This power of | Bank and so notifies Chicago.
attorney may be in any form agreed upon by i (d) Upon receipt of the notice forwarded
the respective Federal Reserve Banks and may under paragraph (c) Chicago credits the
define the standard to guide the forwarding account of the Richmond bank and increases
bank in determining what Federal Reserve I on its books the item " Mutilated currency
notes of the issuing bank shall be considered i forwarded for redemption."
unfit. The forwarding bank shall, at the time I (e) The Treasurer, on receipt of the notes
of shipment, notify the issuing bank that the I shipped by Richmond, will acknowledge receipt
shipment has been made for and in its name to i to Richmond, will advise both Chicago and
the Treasurer, and shall charge the account of ; its Federal Reserve Agent simultaneously that
the issuing bank for the amount of notes thus | the notes have been received for the account of
shipped. The issuing bank shall then credit | the Chicago bank, and will redeem such notes
the account of the forwarding bank, and shall I just as if they had been sent by the Federal
increase on its books the item, "Mutilated I Reserve Bank of Chicago direct to the Treascurrency forwarded for redemption," just as : u r e r for redemption.
if it itself had sent unfit notes direct to the I (/) Upon receipt of the advice forwarded by
Treasurer for redemption,
| the Treasurer, as provided in paragraph (e)
2. The Treasurer, on receiving such notes, | the Federal Reserve Bank of Chicago and its
will advise the forwarding banks of their Federal Reserve Agent will record the transreceipt.
action in the manner outlined in a circular
3. The Treasurer will then complete the letter from the board dated March 24, 1916,
transaction just as if the notes had been for- hereto attached.
warded to him for redemption direct by the
(g) When the notes have been redeemed the
bank of issue, under the plan approved by the Treasurer will deliver them to the Comptroller
Treasury Department and the Federal Reserve of the Currency in the name of the Federal
Board in January, 1916. In accordance with Reserve Agent at Chicago and for his credit.
the provisions of that plan, the Treasurer
(h) The Comptroller of the Currency, upon
will immediately advise both the Federal receipt of the notes from the Treasurer, will
Reserve Bank of issue and its Federal Reserve notify the Federal Reserve Agent that they
Agent of the receipt of the notes sent to him have been received for destruction, will arrange
for redemption, and will redeem the notes for for their cancellation and destruction, and will
the account of the bank of issue, not for the credit the account of the Federal Reserve
account of the forwarding bank.
Agent of Chicago with the amount of the notes
4. After the notes have been redeemed the when destroyed.
Treasurer, acting under the powers of attorney
JANUARY 15, 1917.
provided for in the plan governing the redemption of unfit notes shipped direct by the Federal
Reserve Bank of issue, will forward such notes
to the Comptroller of the Currency for cancelReserve Position at Boston.
lation and destruction, advising the Federal
Reserve Agent of this action.
| This statement was given to the press on
By way of illustration, a specific transaction I January 9:
would be conducted as follows:
(a) The Federal Reserve Bank of Richmond I The Boston clearing-house banks have
receives from one of its member banks a deposit ! adopted a new form designed to show the
of unfit notes of the Federal Reserve Bank of change in their reserve position from week to
Chicago.
week, as given at the bottom of their usual
(&) Acting under the power of attorney clearing-house bank statement. In the past
given to it by the Chicago bank, the Richmond bank forwards these unfit notes to the they have announced the deficiency or excess
Treasurer for redemption for and in behalf of of their vault cash, and also their deficiency or
excess with the Federal Reserve Bank.
the. Chicago bank.




84

FEDERAL RESERVE BULLETIN.

Since the adoption of the ruling making it
optional with member banks to keep reserves
in vault or in the Federal Reserve Bank, -the
Boston banks have shown a deficiency in their
vault fcash and an excess with the Federal Reserve Bank. It has been felt that these items
might properly be consolidated, just as similar
figures are combined in English bank statements, and that such consolidation would be a
final recognition on the part of the clearing
house that deposits with the Federal Reserve
Bank are practically interchangeable (so far as
reserve availability is concerned) with cash in
vault. When the matter was recently called
to the attention of the clearing-house committee
in Boston, the members acquiesced in the suggested change. This is regarded as a further
indication of the desire of the larger New England banks to cooperate with the Federal Reserve Bank in every way possible.
State Banks as Members of the Federal Reserve
System.
The following letter sent by an officer of one
of the reserve banks to a State institution
which had made inquiry with respect to the
advisability of entering the Federal Reserve
System, is herewith published as furnishing a
useful summary of the present situation regarding membership of State banks:
I have received your favor of
, and I
assure you that it will give me great pleasure to
give you my views on the subject of the advantages of " a State bank entering the Federal Reserve System." In order to do so, however, I
will take the liberty of changing the form of your
question. I williussume that I am the responsible head of a bank doing business under a
State charter, and have been called upon to
state my reasons for advising my board of
directors to apply for membership in the
Federal Reserve Bank in whose district my
bank is located. Stated as briefly as possible,
my reasons for advising this action would be
as follows:
First. After careful consideration and study
of the subject, I am satisfied that the establishment of the Federal Reserve System has




FEBRUARY 1.1017.

transformed (or rather is in the process of
transforming), what was undoubtedly the
worst and most inadequate banking system in
existence in any great civilized country, into
one of the best and most adequate systems
which has ever been devised.
I know perfectly well that up to the present
time my bank has been in a position to obtain
(as far as it has had occasion to use them) all
of the benefits of the system without being
called upon to contribute to its support, and
without being required to assume any of the
responsibilities placed by law upon national
banks.
ARGUMENT BASED ON SELF-INTEREST.

As this is purely a business proposition, I
am making no appeal upon the grounds of
sentiment. I am raising no ethical question
of our right to continue "to reap where we
have not sown, and gather where we have not
strewn/' but I base my argument solely on the
grounds of intelligent self-interest.
Since the Federal Reserve System was established, there has been an abundance of money.
Every bank doing a reasonably large business
has had as much money as it could use to
advantage, and many have had more. Under
these circumstances, there has been little or no
occasion for discrimination. There has been
little or no reason why members of the Federal
Reserve System should attempt to limit the
benefits of the system to themselves. As a
matter of fact, with resources so abundant,
the necessities of the nonmember banks have
been a much needed source of profit to member
banks.
In addition to this, up to the present time,
the Federal Reserve Banks have found no way
to extend their fullest possible facilities to
their member banks, and at the same time to
confine the fruits of the system to the exclusive
use of member banks. But, will these conditions continue indefinitely ?
I do not think so. No system of banking
has ever been devised, and, in my opinion, no
system of banking can be devised which will
prevent business depressions, periods of stringency, or even panics. These are caused by
activities outside of the banking business,
over which, in many cases, organizable human
agencies have but limited control.
If the time ever comes in which there is not a
sufficiency of the good things to go all around,
I am confident that the supply furnished by the

FEBRUARY 1,1917.

FEDERAL RESERVE BULLETIN.

Federal Reserve System will be confined, with
much more care, to its member banks than has
been the case up to this time. The most that
can be expected of any banking system is to
ameliorate the effects of business depressions
(when they come), to prevent unnecessary panics, and to afford to the banks identified with
the system full and adequate protection to the
extent to which the system is capable of affording such protection.
POSTPONEMENT OF ACTION.

Some may say that it will be time enough to
join the system when trouble comes, but that
is not my view of the case. We know that
trouble is coming at some time in the future.
We do not know how suddenly the real army
will follow the first scouts. We know that
now, while money is plentiful and conditions
are favorable, the Federal Reserve System is
welcoming the State banks, and even urging
them to join. We do not know what the attitude of the system will be, or, in fact, what
position it may be compelled to take in the face
of radically changed conditions. Beyond all
question, if a considerable number of banks
should apply for admission at the same time
many of them would be obliged to wait. The
necessary formalities incident to admission
take time, and it could not be expected that
these formalities would be waived or the vigilance of the officers passing upon applications
relaxed in the face of alarming condition.
When the bill proposing the establishment
of a central bank was drawn, it was proposed
to confine the membership to national banks,
and violent protests were made in all parts of
the country by and on behalf of the State banks.
If the bill embodying the Federal Reserve Act
had contained a similar provision, excluding
State banks from membership, the protest
would have been, if anything, more vehement.
While at present they do not seem disposed to
enter, we know that they would fight against
the establishment of any system which did not
ive them the privilege to enter. Down in oar
earts we all know that it would be better in
every respect if all of the banks were united in
one cooperative system. And we know that
our failure to enter limits the power, usefulness,
and even the most economical operation of the
system. Therefore, why should we not join
that system at a time when we are sure not
only of' our ability to do so, but also of a prompt
and cordial welcome.

f




85

REVOLUTION IN BANKING.

Second. I have said that the establishment
of the Federal Reserve System is working a
beneficient revolution in the banking business
of this country. I do not think that the revolution has been entirely accomplished, because
the system can not be ideal and complete until
it embraces all, or practically all, of the eligible
banking institutions in the country. The collection and clearing system—the most vexatious problem of banking—could be solved
without difficulty if the State banks were in
the system, and upon a basis which would
work out the greatest economy possible to the
banks and the country.
I am not willing for my bank to wait until
after the majority of the State banks have
joined, for the reason that I have not the right
to expect another State bank to do what I
would be unwilling to do myself, or to be willing
to do it any sooner than I am willing to ,do it.
We do not conduct the internal business of our
bank on this principle, and we should not
expect to derive benefits from this method in
any other direction. Manifestly, if every
State bank waits for all of the others to set an
example nothing will be done till the end of
time. In addition to these considerations, I
have pride in my bank, and I would far rather
see it reasonably near to the head of the procession than straggling in, a late comer, at the
tail end.
RESTRICTIONS ON STATE BANKS.

Third. I have examined carefully the provisions of the Federal Reserve Act with reference to State banks applying for membership
in the system, and. I have also carefully considered the regulations of the Federal Reserve
Board, made under authority of the Act. I
realize that in joining the system a State bank
will surrender, at least in theory, certain
privileges which it enjoys as a nonmember;
that it will be required to do certain things
which nonmembers are not required to do, and
that it will be governed by a few restrictions
not applicable to nonmembers. I have not the
slightest objection to the requirements and
restrictions, because they are founded upon
principles which every prudent banker should
indorse, and which any well-managed bank
would have no difficulty in observing, if it does
not already observe them without compulsion.
Moreover, it is the violation of just those prin-

86

FEDERAL RESERVE BULLETIN.

ciples that has caused most of the trouble in
banks in which serious trouble has arisen.
Moreover, if the time ever comes (and I think
it will) when the public (which consists largely
of our customers, and the customers of other
banks) begins to make intelligent discrimination in the selection of institutions with which
to do business, I would like for the public to be
assured that this bank is observing all of the
principles referred to; and being a State bank,
and subject only to the restrictions and requirements laid down in the State law, there is only
one test by which an actual or prospective customer can toll with absolute certainty that we
are observing, and will continue to observe,
those principles, and that is, whether or not we
have agreed to do so by becoming members of
the Federal Reserve System. In my opinion,
the requirements, at which I understand some
State banks have balked, can thus be turned
into an armor of defense by those banks that
become members of the system.
RELATIONS WITH BOARD.

FKIJRUAKY 1,

1017.

QUESTION OF ELIGIBILITY.

Fourth. It is understood on all sides that a
general standing invitation is extended to all
State banks to join the system. Anyone
familiar, however, with banking conditions in
this district, and in fact, throughout the South
(to say nothing of the districts which cover the
rest of the country), knows perfectly well that
there are many State banks that could not
possibly join the system. It will not be necessary for me to enumerate all of my reasons for
saying this. I will only mention limitation of
capital and character of business. An examination of the published statements of many of
the banks, and a casual reading of the regulations referring to State bank membership will
make the matter plain to the veriest tyro in the
banking business.
It is a fact, however, not so generally known,
that there are many State banks apparently
qualified to join the system but to which
admission would be denied upon the required
preliminary examination. I am perfectly satisfied that my bank would be qualified to join the
system, and would be admitted promptly
and without objection. I would like, nowever,
for the customers and the prospective customers of my bank to be entirely assured of the
correctness of my opinion, and there is just one
way in which they can receive this assurance
beyond the possibility of question.

The fact that the Federal Reserve Board has
the power to alter, or amend, the regulations
with reference to State banks gives me no concern whatever. So far the regulations for State
member banks have been, if anything, more
lenient than the regulations applicable to national banks. It has been suggested that the
Federal Reserve Board should give to the nonmember banks some assurance that the regulaVALUE OF INDORSEMENT.
tions will remain unchanged. This, in my
opinion, is not only impracticable, but would
This practical indorsement of the Federal
be unwise, if it were practicable. The law and Reserve System which I would like to have
the regulations, as they stand, provide that in may seem of comparatively little value under
certain definite respects the State bank mem- existing conditions, but, as I have already said,
bers shall conform to the requirement fixed for I do not think that the Federal Reserve System
national banks. In other respects the Federal is a panacea for panics or periods of business
Reserve Board has, under existing arrange- depression, although it unquestionably posments, the power to exercise a certain degree sesses the power to aid its member banks to
of liberality to State bank members. Any law weather such storms, while the State banks
which would curtail the power to regulate, have no such resource. When the next season
would necessarily limit the power to exercise of trouble comes along, I am satisfied that the
discretion in other directions, and the nonmem- protecting wing of the Federal Reserve System
ber banks have always this safeguard—they ' will afford a comfortable, if not an absolutely
have the privilege of withdrawing from the sys- ! necessary, shelter. The public in all parts of
tem upon 12 months' notice. The existence of i our broad country has taken much interest in
this privilege alone, without any consideration ! the system. They believe in it to a greater
of fairness or prudence on the part of the i extent than the banks do, chiefly because they
Federal Reserve Board (which fairness and i are the ones who have always 'suffered most,
prudence have been conspicuous in all of its ! and they, therefore, know better how to apprerulings), would effectively prevent the Board | ciate relief. They have faith in it in some
from imposing any unreasonable, or unfair, ; directions to an extent which I can not help
restrictions upon State bank members of the ! feeling is, if anything, excessive under present
system.
. conditions, while State banks, which far out




87

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

number member banks, remain out of the system. When the next storm cloud puts in its
appearance, and such an appearance is entirely
possible at or soon after the close of the
European war, is it not reasonable to assume
that the "public will begin to ask, "Are the
banks with which we are doing business in a
position to obtain the benefits to be expected
from our new banking system?"
Although this letter has already exceeded
the limits of ordinary correspondence, I can not
help feeling that it has, nevertheless, inadequately covered the subject, which is as broad
as the banking business itself.

transfers of credit authorized and directed by
the auditor on the books of the Treasury Department. The term "commitments" where
used covers all obligations entered into by the
Board for the periods stated.
RECEIPTS.

Unexpended balance Jan. 1,
1916
§37, 289. 77
Assessments
192,153. 60
Bulletin, subscriptions t o . . . .
1,024. 70
Reimbursements
10, 487. 26
Total available

DISBURSEMENTS.
Receipts and Disbursements of Federal Reserve
Board.
By fiscal agent
199,436. 35
Auditor's settlements
27, 501. 02
There is here given a statement of receipts
Total disbursements
and expenditures of the Federal Reserve Board
Balances, Dec. 31, 1916, with
in 1916. The total expense of the Board for
Treasurer of United States
the calendar year 1916 is shown on the detailed to credit of—
statement of commitments to have been $212,Fiscal agent
2,832.46
477.02. This figure includes a number of items
Federal Reserve Board...
11,175. 50
which have of necessity been estimated.
Under the Federal Reserve Act the Federal
Reserve Board is authorized to make semiGENERAL STATEMENT.
annual assessments upon Federal Reserve
240, 945. 33
Banks to cover its expenses. The first assess- Total available
Receipts account of reimbursment for this purpose was made on November
able commitments
10,487. 26
2, 1914.
Total available for general expenses,
The funds of the Board are carried in a
Federal Reserve Board
special account with the Treasurer of the
Commitments for general exUnited States, and transfers are made by the penses, 1916
$212,477. 02
Governor of the Board to the credit of the fiscal Commitments 1915 paid in
8, 720. 56
agent as necessary. The accounts of the Board 1916
pass through the hands of the Auditor for the
Unencumbered balance Jan. 1,1917...
State and Other Departments and are given the
Unpaid commitments Dec. 31, 1916...
official examination required by the GovernBalance to credit reimbursable account.
ment. The term " auditor's settlement" under
7
Unexpended balance
"Disbursements ' covers settlements made by

77593—17




3

$240,945. 33

226,937. 37

14,007. 96
240, 945. 33

230,458.07

221,197. 58
9, 260. 49
3,808. 80
938. 67
14, 007. 96

88

FEEEEAL EESERVE BULLETIN".

FEBRUARY 1,1917.

Detailed statement of commitments.
January.
Personal services:
Board and its clerks
Secretary's office
nnnnenl's office
Counsel's nffififi

!
j $7,374. _ _
2,516.65
"
! 1,866.66
1,466.66

.
Division of audit and examination,
Division of reports and statistics.
Division of issue
Messengers
Charwomen
Total

February.

March.

April.

May.

§7,374.98
2,516.65
1,866.67
1,254.16
707.33
717.00
315.00
60.00

810,977.76
2,433.32
1,866.67
1.254.16
878.66
791.66
315.00
60.00

$7,374.98
2,258.32
2,066.66
1,254.16

S7,354.15
1,683.32
2,066.67
1,254.16
866.66
646.66
315.00
60.00

June.
$7,374.99
1,683.32
2,066.67
1,254.16
866.66

i 14,934.94

Nonpersonal services:
Transportation and subsistence of personsBoard and its clerks.
Secretary's office
Division of audit and examination.,
Division of reports and statistics.
Counsel's office
Messengers (car fare).
Communication service:
Telephone.
Telegraph.
Postage
Printing, binding, etc.
Contract repairs
Electricity (light and power).
Steam (heat)
Other (nonpersonal service).
Supplies:
Stationery.
Periodicals.
Other.,
Equipment:
Furniture and office equipment.
Books.
10,562.96

July.
Personal services:
Board and its clerks
Secretary's office
Counsel's office
Division of audit and examination.
Division of reports and statistics...
Division of issue
Charwomen.
Total
Nonpersonal services:
Transportation and subsistence of personsBoard and its clerks
Secretary's office
Division of audit and examination
Division of reports and statistics
Counsel's office..
Communication service:
Telephone
Telegraph
Postage
Printing, binding, etc
Contract repairs
Electricity (light and power)
Steam (heat)
Other (nonpersonal service)
Supplies:
Stationery
Periodicals
Other
Furniture and office equipment.
Books
Total
Grand total.




August.

September. October.

37,374.98
1,958.33
2,006.66
1,338.33
905.00
658.33
365.00
60.00

§7,374.98
1,958.33
2,000.67
1,338.33
905.00
728.33
365.00
58.67

$7,425.04
1,983.34
2,060.67
1,338.34
905.00
728.34
338.00
00.00

14,726.63

14,795.31

703.10
19.20

110.06
425.94

45.07
315.81

1,027.33
.82
30.00

1,050.46
28.75
30.00

56.42
318.43
20.00
1,165.31
9.87
30.00

3.00

45.15

19.75 i

115.58
16.60

44.88
14.50
17.16

65.15
73.00
90.30

189.57
19.00
05.39

154.76
39.80
15.20

20.54

1,241.08
298.30
545.70

39.40

121.31

661.29

427.80
3.15

220.15
108.00

22.90
5.00

2,840.11
189.20

3,077.34

2,018.20

3,081.79

2,310.10

;0,298.40

17,152.86 j 17,922.07

17,803.99

18,437.74

17,749.83

212,477.02

November.

December.

$7,374.98
2,563.33
2,006.00
1,338.33
825.83
691.00
327.00
58.6G

$7,375.05
2,577.23
2,000.00
1,338.34
926.06
648.34
365.00
58.67

87,375.04
2,051.07
2,060.07
1,338.34
930.07
648.34
305.00
58.00

$92,131.91
20,783.81
24,199.99
15,707.47
10,273.46
8,272.98
4,035.00
714.00

14,844.73

15,245.79

15,355.95

15,439.73

182,178.02

97.47

224.70

144.86

337.40

154.58

213.34
25.05
811.15

21.05

"540.* 99"

1,115.55
94.05
5,G83.40
83.75
344.97
35.00

59.48
412.08

• 55.98
266.30

02.51
330.09

1,100.31

1,127.06

1,221.44
3.25
30.00
15.00
43.49

5.00

2,496.63
17,223.26

5.00

2,357.55 |

.90
30.00

30.00
15.00

11.08

345.78
04.55
51.40
5.00

61.50

Total.

690.27
3,988.00
65.00
09.91
360.00
90.00
200.82

FEBRUARY 1,1017.

FEDERAL RESERVE BULLETIN.

EARNINGS AND EXPENSES OF THE
.FEDERAL RESERVE BANKS.
Total earnings of the Federal Reserve Banks
for the calendar year 1916 were $4,955,343,
while total current expenses for the same period
were $2,495,835. Of this total $291,491 represents the estimated expenses of the transit
department for the period July 15 to December 31 of the past year. This amount is returned to the Federal Reserve Banks through
special charges assessed against member banks
which forward checks to the Federal Reserve
Bank for collection. Aggregate net earnings
of the banks, i. e., total earnings, less current
expenses of the banks proper,, were thus
$2,750,999, or at the rate of almost 5 per cent
on an estimated yearly average paid-in capital
of $55,178,000.
Three banks report net earnings in excess
of 6 per cent on their average paid-in capital;
five banks show a rate in excess of 5 per cent,
but less than 6 per cent, while two more banks
show net earnings in excess of 4 per cent, but
below 5 per cent. Total current expenses are
composed of $1,975,992, expenses of operation;
$298,007, the cost (including insurance, expressage, etc.) of Federal Reserve currency
issued, returned, and retired during 1916;
$192,940, depreciation charges; and $28,896, the
excess of disbursements of the transit departments over net service charges received.
Of the total net earnings of $2,750,999, the
banks applied §494,314 to charge off the balance of organization expenses carried over from
1915; $8,441 to pay dividends accrued on
stock surrendered or canceled during the year;
and $1,487,402 in payment of dividends to
their members during the past year. The
remainder, $760,842, was carried to profit and
loss. This amount, combined with the adjusted
total of $135,392 for January 1, 1916, gives a
total profit and loss of $896,234 carried to
January 1, 1917.
Of the total earnings for the year 20.7 per
cent was from bills discounted for member




89

banks; 31.5 per cent from acceptances bought
in open market; 22.3 per cent from United
States bonds and Treasury notes, and 14.3 per
cent from municipal warrants, while 6.1 per
cent represents profits realized from the sale
and appreciation of United States securities
owned. The remainder, 5.1 per cent, represents commissions earned on acceptances and
warrants bought for other Federal Reserve
Banks, charges for transfers of funds for
member and nonmember banks, penalties and
interest on deficient reserves, and sundry smaller
profits.
Of the total expenses of operation, $559,949,
or 28.3 per cent, went as compensation to the
clerical staff and $495,560, or 25.1 per cent, as
salaries to bank officers. Nearly 10 per cent of
total expenses of operation, or $192,277, is represented by the contributions of the banks for
the support of the Federal Reserve Board.
Rent paid by all banks, except Dallas, totaled
$164,965, or 8.3 per cent of the total expenses
of operation. Postage and printing, including
stationery, are the two other items next in
importance in the expense budget of the banks.
Current expenses are exclusive of $170,697
expended during the year in the purchase of
additional furniture and equipment. The total
written off this account during the year is
$185,440, leaving a balance on January 1, 1917,
of $255,249.
Dallas owns a banking house, while Richmond and Atlanta own ground for the erection
of bank buildings. The total amount invested
in bank premises by these three banks is given
as $368,222,
During 1916 a total of $230,778 was paid for
the printing and shipping of Federal Reserve
notes, while the total cost of notes issued to the
banks and charged to current expenses was
$270,743. From November, 1914, to December 31, 1916, the banks have paid $1,035,483
for printing and shipping Federal Reserve notes
and have charged off during the same period a
total of $533,161 for notes issued, leaving thus
a balance of $502,322 at the beginning of 1917.

Earnings

CO

and expenses of each Federal Reserve Bank and of the system as a whole for the calendar year ending Dec. 31, 1916.

o

EARNINGS.

Boston.

Bills discounted—members..
Bills bought in open market..
Investments:
U. S. bonds and notes
Warrants
Commissions received
Profits realized on United
States securities
Sundry profits
Total earnings

New York.

Philadelphia.

Cleveland. Richmond.

! Atlanta
i (including
New
i Orleans
i branch).

Chicago.

St. Louis.

Minneapolis.

City.

$205,232
10,880

843,303
230,857

§37,368
530,484

828,391
198,243

818,004
100,993

3214,857 :
29,171 |

§141,774 ! §124,452
52,474 ! 101,186

§40,041
81,599

§00,938
50,099

§84,572
29,001

57,194
78,578
10,559

81,645
214,122
42,387

81,081
09,183

144,844
110,925

39,175 I
3,495 i

40,725 ! 204,051
5,102 i
90,700
154 \.

70,302
31,019

69,200
34,207

186,411
14,300

43,515
1,128

35,034
5,407

37,229
5,101

12,517
12,543

1,530 I
20,186 |

00,175
60,419

21,050
34,887

23,539

950,049

417,939

429,156

311,758

040,983

286,158

238,109

20,575 j
3,148 i

450,214

201,945 ;

|
I San Francisco.

Dallas.

48,872 1.
1,145 I
304,907 '

Total.

S20.083
133,331

81,025,675
1,500,918

64,570
737 |

07,530
49,773

1,100,800
708,807
53,100

25,450

14,487
4,780

302,184
197,739

300,875 !

290,590 |

4,955,343

CURRENT EXPENSES.
Expenses of operation:
Assessment account expensesFederalReserve Board,
Federal Advisory Council
(fees and traveling expenses)
Governors'
conferences
(incl.traveling expenses).
Federal Reserve Agents'
conferences, incl. traveling expenses
Salaries:
Bank officers
Clerical staff
Special
officers
and
watchmen
Allothcr
Directors' fees
Directors' per diem allowance
Directors' traveling expenses
(Xilicers' and clerks' traveling expenses
Legal foes
Rent
Telephone
Telegraph
Postage
Expressage
Insurance and premiums
on fidelity bonds
Light, heat, and power
Printing and stationery
Repairs and alterations
All other expenses, not
specified

Total expenses of operation
....




$17,704

$20,825

839,029 j

818,362

401

1,103 I

30G

555

915

2,885 |

749

1,580

611,743

a

§23,329

810,575

§9,065

§192,277

150

358
1,096

§8,902
743

300

753

150

0,075

1,392

1,245

1,301

2,90G

17,718

793

1,445

§9,750

1,208

$8,547

313,780

519

321

183

393

417

423

014

1,044

5,473

33,910
43,109

92,050
103,099

39,100
52,398

39,707
39,044

31,428
38,388

31,867
39,738

52,385
05,311

46,099
37,2G4

26,625
29,277

25,973
40,223

33,942 j
37,885 [

41,208
33,553

495,500
559,949

7,248
11,737
3,930

0,012

048
1,774
3,700

5,840
4,198
2,030

1,020
1,200
4,3G0

1,311
78
3,100

805
1,599
3,705

1,771 |
2,835 !
1,655

123

3,220

710
170

3,258

3,820

1,850

29,358
23,597
30,100

1,840

2,038

080

1,040

990

2,385

1,210

2,505

2,251

1,018

1,155

1,486

3,028

1,394 j

407
1,425
0,034
391
220
7,404
1,255

1,840
1,400
12,845
302
573
7,934
604

595
2,521
26,588
1,382
398
11,315
582

598

1,145
1,500
6,955
568
299
8,157
533

033
000
8,500
•500
352
10,851
825

1,234 '
2,422 !

14,900
877
255
7,704 .
745 !

332

1,120

048

1,040

772

059

1,020

1,245

1,993
2,225
15,139
1,492
180
10,081
2,839

820

45,£16
1,985
700
12,940
1,048

1,880

558
2,000
9,250
1,231
12
8,174
3,378

1,288
913
2,500
7,212
1,017
2P" •

0,81

2,790

299 j

940
083
0,139
11 123

400

!
|
.
!

14,583
17,637

1,164
2,421
11,732
460
507
4,787
7,595

11,745
19,014
164,965
11,223
4,553
102,421
31,256

1,701
1,490
8,480
731

3,415
1,147
0, (.48
087

2,393 i
31
12,246 I

1,041
1,260
6,852
241

1,192
100
5,473
200

5,904
2,242
9,964
1,201

2,199 !

1,731

20,067
200

5,278 i
347 j

0,198
719

1,300
1,118
4,301
301

599 '
1,378 !
2,900 •
,
228 |

1,227
432
8,472
5,133

26,433
9,264
96,939
10,452

8,779

25,537

0,041

3,334 i

3,025

8,823

12,585

3,151 j

3,109

4,422 |

6,612 |

3,322

' 89,400

105,355

i
124,042 I

142,338

1,975,992

157,285

3,125

378,077

164,983

144,354 !

124,769

133,604

232,096

141,200 j

127,289 |

a.
Szi

Cost of Federal Reserve notes
issued, including exprossa^o etc
Miscellaneous charges, account Federal Reserve
note issues
Miscellaneous charges, account Federal Reserve
hank note issues, includ-

100,320

207,004

2,495,835

19,497

28,525

291,491

139,978

M0, S29

179,079

2,204,344

O

224,989

100,040

111,511

2,750,999

fcd

7.45

0.14

2. 84

4.99

2 f,fi 77$
OfiJ707

131,920

52 358
43^730

2 494 314
1,487^ 402

150,213

270,698

157,031

320,574

355,219

17,570

20,921

11,890

17,008

15,241

125,187

132,637

243,777

145,141

103,500

180,571

129,308

403,200

141,017

134,003

4.92

5.57

5.26

0.05

5.05

5.22

55 774
143,237

197,922

198,840

300,040

97,169
31,100

32 341
57, 720

2,879

670

21,852

70,707

15,653

8,097

18,248

14,776

4,000

421

194,953

571,738

202,239

158,742

146,498

40,674

35,153

34,241

23,394

21,311

Current expenses of b a n t
proper, exclusive of amortization charges, account organization expenses

154,279

530,585

167,998

135,348

Net earnings for year 1910

295,935

414,004

249,941

293,80S

5.19

3.01

4.78

123 770
127,113

31 517
128.458

12,167

9,866

20,436

14,443

5,791

furniture

Disbursements of transit department in excess of not
service charges received




28,896

100

2 132

Total

2,665

7,967

1,003

1? a lance of net earnings carried to profit and loss account
Profit and loss account, Jan.
1, 1016
Profit and loss account, .Tan.
I, 1917

i 192,940

3,355

12 938

Disposition of net earnings:
Organization e x p e n ? e s
charged oft in full
Dividends paid
Dividends " accrued a n d
"
paid on surrendered and
cancelled stock

12,589

25,000

075

Per cent of average paid-in
capital

19,907

1,050

3,738

Total current expenses,
exclusive of amortization charges, account 0 organization
expense "
Less disbursements of transit
department

981

522

16,600

of

270,743

10,720

95,240

Depreciation

49,031

5,113

15,141

34 603

2

4,514

4,442

-1,033

2,804
37,107

250,889

159,975

199,011

258,528

163,175

89,966

94,797

—111
258,528

163,064

197,922

-It,

Sol

23,015
89,966

94,797

11,664

201, 719

-72,411
2

5,353

4,350

7,357

1,500
1

17,028

8,441

2,088

301,319

128,209

90,061

133,483

134,008

90,094

1,990,157

41,887

12,748

44,542

91,500

32.038

15,417

700,842

82,532

20 091

10,121

01,978

i Includes $7,500 depreciation of bank premises.

2 135 3Q2

9 805
12,748

44,542

i)l,5(.)i"

41,003

15,417

890,235

i
W

d

E
a

CO

Profit and loss account of each Federal Reserve Bank and of the system as a whole for the calendar year 1916.

to
Boston.

New York.

Philadelphia.

Cleveland. Richmond.

Atlanta.

Chicago.

St. Louis.

Minneapolis.

Kansas
City.

Dallas.

San Francisco.

Total.

Earnings
Current expenses of bank
proper

$450,214

$950,649

$417,939

§429,156

$311,758

$261,945

$646,983

$286,158

$238,109

$364,967

$306,875

$290,590

154,279

536,585

167,998

135,348

125,187

132,637

243,777

145,141

103,506

139,978

140,829

179,079

2,204,344

Net earnings for year
Deduct organization expenses

295,935
34,603

414,064
1123,776

249,941
31,517

293,808
55,774

186,571

129,308

403,206

141,017
97,169

134,603
32,341

224,989
2
66,776

166,046

111,511
52,358

2,750,999
1494,314

Net profits for year available for dividends
Profit and loss account Jan.
1,1916

261,332

290,288

218,424

238,034

186,571

129,308

403,206

43,848

102,262

158,213

166,046

59,153

2,256,685

23,015

2 82,532

20,091

Total net profits available for dividends...

lit
261,332

218,424

238,034

209,586

211,840

423,297

43,848

102,262

158,213

175,911

59,153

2,392,077

127,113

128,458

143,2137

197,922

198,840

360,649

31,100

57,720

66,707

131,920

43,736

1,487,402

2,879

670

197,922

201,719

361,319

31,100

57,720

66,707

134,008

43,736

1,495,843

94,797

11,664

10,121

61,978

12,748

44,542

91,506

41,903

15,417

896,234

6-30-15

10-31-16

6-30-16

12-31-15

3-31-15

6-30-15

6-30-15

4-30-16

3-31-15

2,804

Total dividends paid
during year

2,S04

127,113

128,458

143,237

258,528

163,064

89,966

3-31-15

6-30-15




135,392

9,865

290,177

Di v inds paid
Dividends accrued and paid
on surrendered and canceled stock

Profit and loss account r Jan.
1,1917.
Dividends declared during
1916 and approved for payment after Jan. 1, 1917
For period ending
Dividends paid to

$4,955,343

246,931
12-31-15

8,441

2,088

246,931

i Difference between figures marked and corresponding figures shown in the 1915 annual report due to slight adjustments after Jan. 1,1916.

w

cj

Cost of furniture and equipment, including vaults, also bank premises.

Boston.

Balance as reported Jan. 1,
1916
Additional purchases during
calendar voar ending Dec.
31 1916
Total
Depreciation charged during
calendar year ending Dec.
31 1916

$9,595

New York.

S26,980

Atlanta
Thila- . Cleveland. Richmond. (including
New
delphia.
Orleans
branch).

$18,491

$20,187

$9,500

Chicago.

$6,228

St. Louis.

$23,000

$20,346

Minneapolis.

$54,159

Kansas
City.

$41,829

Dallas.

$33,255

San Francisco.

66,422

Total.

$269,992

12,257

43,727

12,572

8,074

7,014

10,496

30,305

11,698

10,468

4,482

13,437

6,167

170,697

21,852

70,707

31,063

28,261

16,514

16,724

53,305

32,044

64,627

46,311

46,692

12,589

440,689

21,852

70,707

12,5S9

15,653

8,097

4,514

4,442

25,000

3,355

5,353

4,350

9,528

15,410

20,164

12,000

12,282

28,305

28,689

59,274

41,961

37,164

255,249

121,476

Balance Jan. 1,1917 .

102,500

i 144,246

368,222

Bank Dremisos

185,440

S
Cost of unissued Federal Reserve notes.
Balance as reported Jan. 1,
1916
Additional coat during calendar year ending Dec. 31,
1916'

$38,633

$232,087

$43,172

$42,758

$17,36S

$9,502

$60,380

$22,363

$19,933

$11,252

$9,924

$34,915

$542,287

5,738

98,752

1,136

524

10,235

22,980

12,691

8,120

6,228

36,799

13,459

14,116

230,778

Total..
. .
Cost of Federal reser v o notes
issued and charged to current expenses during calendar year ending Dec. 31,
1916
.-

44,371

330,839

44,308

43,282

27,603

32,482

73,071

30,483

2Q, 161

48,051

23,383

49,031

773,065

15,141

95,210

16,600

3,738

18,248

12,167

5,113

10,720

9,866

20,436

14,443

49,031

270,743

Balance, Jan. 1,1917...

29,230

235,599

27,708

39,544

9,355

20,315

67,958

19,763

16,295

27,615

8,940




3
w

1

502,322

Net amount, less depreciation of $7,500 on banking house included among current expenses.

CD
CO

94

FEDERAL RESERVE BULLETIN.

FEBRUARY 1, 1917.

The Federal Reserve Board voted on January 18 to charge this amount against the
assessment made upon Federal Reserve Banks
for the expenses of the Board.
The expense of operation of the fund for the
first six months, which included organization
expenses, was $1,037.30. The expense of the
second six months, bringing the fund down, to
May 20, 1916, was $453.74!

GOLD SETTLEMENT FUND.
EXPENSES OF FUND.

The operation of the gold-settlement fund
from May 20, 1916, when the expense was last
computed, to December 31, 1916, has been at
an expense of $874.70. It has not been
necessary to make any charge in connection
with the operation of the fund for shipments
SUMMARY OF TRANSACTIONS.
of currency.
Amount of clearings and transfers, Federal Reserve Banks,
Settlements through the gold-settlement
from Dec. 22, 1916, to Jan. 25, 1917.
fund began in May, 1915, and the expense of
[In thousands of dollars.]
its first year was computed on May 20, 1916.
Total
The present statement brings the expense of
clearings. ! Balances. Transfers.
operation from May 20 to December 31, 1916,
and these expenses will hereafter be carried Settlement of—
Dec. 28, 1916.
89,361
$6,100
8183,203
Jan. 4,1917...
229,085 " 30,207
1,700
to the end of each calendar year. During the
Jan. 11,1917 .
284,263
12,053
16,417
Jan. 18, 1917..
270,845 ; 13,111
6,990
eight months covered in this statement, the
Jan. 25,1917.
266,911 ' 11,755
1,995
items of cost have been as follows:
Total
33,202
1,234,307
76,487
Telegrams
Printing, etc
Additional salary to deputy settling agent
Total

$563.17
6.01
305.52
874.70

Previously reported.

5,290,718

472,702

153,945

Total since Jan. 1,1916
Total transfers Jan. 1,1916, to d a t e . . .
Total for 1915, including transfers

6.525,025
187,147
1,052,649

549,189

187,147

Total clearings and transfers, May 20,
1915, to Jan. 25,1917
.*

7,764,821 :

Changes in ownership of gold.
[In thousands of dollars.]

To Dec. 21,1916.

Federal Reserve Bank of—

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




Balance to
credit Dec. !
21,1916, plus ' Balance
Decrease. Increase. net deposits j Jan. 25,
1917.
of gold since •
that date.
22,376
306,574

1,882

308,456
1
2

From Dec. 22,1916, to Jan. 25,1917, inclusive.!

57,935
19,364
31,981
29,239
12,349
12,062
39,907
40,271
42,972
308,458

18,606
52,426
3,805
17,234
22,251
32,428
3.149
11,062
18,334.
15,283.
8,802
213,350

| Decrease.1 Increase. Decrease. .Increase.

15,032
50,897
15,117
25,552
17,965
2,912
33,504
3,468 |
6}316
27,054.5
10,628.5
4,904
j 213,350

Total changes from
May 20, 1915, to
Jan. 25, 1917.2

3,574 i
1,529 I
!

18,802
11,312
8,318

308,103

4,286 '
7,057!
i 1,076
!
319
4,746 I
8,720
4,655 :i
3,898
29,745 i

29,745

* 69,'247
27,682
27,695
22,182
12,668
7,316
48,627
35,616
39,074

308,909

Changes in ownership of gold during period Dec. 22, 1916, to Jan. 25, ]917, equal 2.3-1 per eon- of obligations settled.
X
Total a l i a s e s in ownership of gold equal 3.98 por cont of total obligations settfod.

308,909

95

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

Deposits and withdrawals by Federal Reserve Banks, and where made, Jan. 1, 1916, to Dec. 30, 1916.
[OOO's omitted.]
Federal Reserve Bank of—
Treasury, Subtreasurv,
or mint at—

Boston.

New York.

Philadelphia.

Cleveland.

Richmond.

Atlanta.

Chicago.

With- Depos- With- Depos- With- Depos- With- Depos- With- Depos- With- Depos- With- Deposdrawn. ited. drawn. ited. drawn. ited. drawn. ited. drawn. ited. drawn. ited. drawn. ited.
Boston
New York
Philadelphia
"Washington
Chicago
New Orleans

$7,500

$4,500

$239,665
$2,000

4,000

541,500
3,100

$2,500

$890 $16,190 $10,140 $15,200

$5,750

$560

$500
5,000

Total

11,500

4,500

2,000

239,000

2,500

44,600

5,750

890

16,190

10,140

15,200

1,490

$34,800

5,500

930

34,800

Federal Reserve Bank of—
Treasury, Subtreasury, or mint at—

Withdrawn.
Boston
New York
Philadelphia.
Washington
Chicago
St. Louis
New Orleans
.San iFrancisco

Minneapolis.

St. Louis.
Deposited.

Withdrawn.

Deposited.

Kansas City.
Withdrawn.

Dallas.

San Francisco.

Withdrawn.

Deposited.

$100
30
16,667.5

Deposited.

$2,666

Withdrawn.

Deposited.

!
. ..
S650

$3,960
S50

§13,522.5
i

Total

3,960

50 i

13,522.5

650

Gold settlement fund—Summary

2,730

370

$1,570

10
50
30
60

$2,730

•

16,947.5

26,480
28,050

2,370

$3,100
3,100

By all banks.
Withdrawn.

Deposited.

$7,500
100
41,530
83,110
5,000
10
50
26,510
60

$4,500
241,000
2,500
11,960
34,800
2,780
930
3,100

163,870

301,570

of transactions from Dec. 22,1916, to Jan. 25, 1917, inclusive.
[In thousands of dollars.]

FederaliJReserve
Bank of—

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

18,606
17,426
15,105
17,434
20,181
5,939
32,428
3,149
6,562
18,064.5
13,573.5
10,092
178,560

77593—17-




Transfers.

Gold.
Balance
last statement,
Doc. 21,
With- ! De1916.
drawn, i posited.

Debit.

Credit.

Net
debits.
3,869

3,100

3,000
2,063
481

5,000
1,720
250
2,000

130
3,000

1,245

200
1,000
1,000 !
9,970

1
1,330 I

3,100 i
6,100

Changes in ownerDec. 28.
ship of gold.
1916, balance in
fund after
Net
credits. clearing. Decrease. Increase.

Settlement of Dec. 28,1916.

1,703

6,100

9,361

Total j Total
debits. | credits.
15,649
35,353
26,795
13,664
14,479
5,367
26,370
19,801
4,214
12,480
5,312
3,719

11,780
38,597
24,732
13,183
15,304
6,367
25,125
20,047
4,716
15,651
5,685
2,016

3,244

14,737
20,570
8,042
16,953
19,416

3,144
2,063
481
825
1,000

1,000
246
502
3,171
373

26,183
3,595
7,064
21,235.5
14,946.5
10,489

183,203 ] 183,203 I 9,361 169,920

4,245 !

10,658

246
502
3,171
373
1,397
10,658

96

FEDERAL RESERVE BULLETIN.

FEBRUARY 1, 1917.

Gold settlement fund—Summary of transactions from Dec. 22, 1916, to Jan. 25, 1917, inclusive—Continued.
[In thousands of dollars.]

Gold.
Balance
last statement,
Dec. 28,
WithDe1916.
drawn. posited.

Federal Reserve
Bank o—
f

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis

...

Dallas
Total

Fedoral Reserve
Bank of—

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

Fed ral Reserve
Bank of—

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




14.737
20.570
S. 042
16,953
19,416
6,689
26,183
3,595
. 7,064
21,235.5
14,946.5
10,489
169,920

190,980

20
980

207,710

Credit.

750

1,700
1,500 j
10

22,270

1,700

5,"666"
100

160

3 000
7oo'
5,100

21,830

1,370
2,630

40
1,350

300
20
4,320

4,540
1,533

1,700

30,207

Transfers.

Debit.

15,000
2,000
10,917

16,417

221
4,588
44
35
9
40
4,709
5,730
75

Net
debits.

6,683

i,55i
2,866
953

925*
41
16,417

12,053

Transfers.

Debit.

Total
debits.

Total
credits.

15,451
67,662
35,432
17; 519
15,576
7,193
29,668
21,377
6,761
1,359
7 199
3,888
229,085

4,548

19,999
50,861
40,262
21,390
13,400
5,405
31,796
16,837
5,228
15,768
3,830
4. ana
229,085

19,285
23,769
12,872
20,824
17,220
4,671
2,128 30,011
1,145*
5,331
14,409 35,644.5
11,587.5
*42i* 10,910
4,830
3,871

30,207 190,980

Settlement of Jan. 11,1917.

Credit.

2,000

3,000
990

i,"3o6"

io"

1,700

15,000

970
2,000

2,176
1,788

3 369

20

1,210

Net
debits.

i6,80i

200

Gold.
Balance
last statement,
Jan. 11,
WithDe1917.
drawn. posited.
20,708
36,674
13,456
22.440
16,176
I 4.i3n
31,854
5.159
7 4~»3
26,381.5
13,618.5
9,660

Debit.

Changes in ownerJan. 4,
ship of gold.
1917, balance in
fund after
Net
credits. clearing. Decrease. Increase.

Settlement of Jan. 4,1917.

20,000

Gold.
Balance
last statement,
Jan. 4,
WithDe1917.
drawn. posited.
19,285
23,769
12,872
20,824
17,220
4,671
30,011
11,145
5,331
35,644
11,587
10,910

Transfers.

Total
debits.

Total
credits.

17,840
72,649
40,999
17,215
17,733
9,656
41,911
28,171
7,357
16,986
7 539
M67

19,042
65,966
46,539
18,896
18,020
8,105
39,045
28,745
6,404
18,640
7,945
6,876

284,263

284,263

Net
credits.
1,202
5,540
1,681
287
574
1,654
406
709

Credit.

3,000
3,000

Net
debits.
3,262

977
3,475

1,666

2,000

990

663
28
1,746
2,960

6,990

6,990

13,111

1 Overdrawn.

Total
debits.

Total
credits.

19,691
70,935
43,502
15,218
16,926
10,715
36,097
22,315
4,681
15,957
.8,216
6,592

16,429
74,905
47,247
16,605
15,949
7,240
39,225
23,196
4,018
15,929
6,470
3,632

270,845

270,845

Net
credits.

2,176
1,788
4,540
3,233
3 369
'.....
31,907

4,548
4,830
3,871
3,828
14,409
42i
31,907

Balance Changes in ownership of gold.
in fund
after
clearing,
Jan. 11, Decrease. Increase.
1917.
20,708
36,674
13,456
22,440
16,176
4,130
31,854
5,159
7,453
26,381.5
13,618.5
9,660

12,053 207,710

Settlement of Jan. 18,1917.

16,801

2,095
i,204
1,511
157
878
9,263
1,250
16,358

1,423
5,584
1,716

6,304
1,331
16,358

Balance Changes in ownership of gold.
in fund
after
clearing,
Jan. 18, Decrease. Increase.
1917.

17,446
40,644
17,911
23,827
15,569
3,285
3,128 34,982
6,040
881
6,790
26,653.5
11,882.5
5,650

3,970
3,745
1,387

13,111 210,680

3,262

1,977
3,475
663
28
1,746 i
3,970
15,121

3,970
5,755
1,3S7
3,128
881

15,121'

97

FEDERAL RESERVE BULLETIN.

FEBRUARY 1, 1917.

Gold settlement fund—Summary of transactions from Dec. 22, 1916, to Jan. 25, 1917, inclusive—Continued.
[In thousands of dollars.]

Federal Reserve
Bank of—

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

Balance
last statement,
Jan. 18,
1917.

Gold.

Withdrawn.

17,446
40,044
17,911
23,827
15,509
3,2S5
34,982
6,040
0,790
26,053.5
11,882.5
5,050

Total

Settlement of Jan. 25,1917.

Transfers.

Deposited.

Net
debits.

Credit.

Debit.

100
1,000

i50
50

490

2,514

1,100

895

1,244
291

22,039
59,005
38,083
17,285
10,910
9,037
39,088
20,381
0,402
10,211
8,002
5,402

1,995

1,995

11,755

200,911

1,899

895
50
2,150
900

30
10
250

210,080

Total
debits.

3,160

1,283
1,478
2,572
474

Total
credits.
20,125
08,858
30,784
19,110
17,162
8,354
38,210
23,809
5,928
16,042
0,818
5,111
200,911

Net
credits.

Balance Changes in ownership of gold.
in fund
after
clearing,
Jan. 25, Decrease.
Increase.
1917.

15,032
50,897
15,117
1,825 25,552
240 17,905
2,912
33,504
3,408
0,316
43i" 27,054.5
10,628.5
4,904

2,414

9,253

11,755 213,350

10,253
2,794
1,825
240
1,283
1,478
2,572
474
431
1,244
490
12,755

12,755

Federal reserve agents' fund—Summary of transactions, Dec. 22, 1916, to Jan. 25, 1917, inclusive.
[In thousands of dollars.]
Dec. 21,
1916.
Federal reserve
agent at—

Philadelphia
Richmond
Atlanta
Chicago
St Louis
Minneapolis
Kansas City..
Dallas
San Francisco.....




Balance.
11,180
15,750
15,970
5,010
0,710
0,250
14,200
11,930
14,320
101,380

Week ending Dec. 28,
1910.

Withdrawn.

Deposited.

250
250
2,000
200
1,000
1,200

Balance.
11,180
10,000
10,220
7,010
0 510
0,250
14.200
10,930
14,320

2,500 102,080

Week ending Jan. 4,
1917.
With- Deposdrawn. ited.

500

100
100

Balance.
11,180
16,000
16,720
7,010
6 510
6,250
14,260
10,830
14,320

500 103,080

Week ending
Jan. 11,1917:
With- : Haldrawn, ance.
;
i
970
. ...

Week ending Jan. 18,
1917.
With- Deposdrawn. ited.

11,180
16.000
IS 750
7.010
0,510
3,250
3,000
14.200
700 j 10,130
. . . . ; 14,320

200
900
1,400

4,070

3,000

98,410

Balance.

......

12,280
15,100
14,350
7,010
0 510
3,250
13,900
10,130
14,120

1,300

9«,710

1,300

300
200

Week ending Jan. 25,
1917.
With- Deposdrawn. ited.

2,200
500

2,700

Balance.
J2,280
12,900
13,850
7,010
0,510
3,250
13,900
10,130
14,120
04,010

98

FEDEKAL RESERVE BULLETIN.

Amendments to the Federal Reserve Act.
After having given careful consideration to
amendments suggested by the operation of the
Federal Reserve Act, the Federal Reserve Board
submitted in December last suggestions as to
such amendments to the chairmen of the Committees on Banking and Currency of the House
and Senate. When these amendments had
been introduced, the Board thought it desirable
that some explanation should be made, and it
accordingly issued on January 14 a statement
showing what it desires to accomplish. This
statement is reprinted below, and following it
willjbe found the text of'the amendments as
introduced in Congress:

FEBRUARY 1,

1917.

tion and concentration of the gold holdings of
the United States so that the flow of gold back
into Europe, or to South America or to the
Orient, may be arranged without forcing any
violent contraction of loans or causing undue
disturbance to legitimate business.
Of approximately two and three-quarter
billions of gold in this country there are held
or controlled by Federal Reserve Banks about
$736,000,000, of which Federal Reserve Agents
hold $283,000,000 as security for Federal Reserve notes outstanding, anil $453,000,000 is
reserve money and must therefore be used conservatively. But even assuming that the Federal Reserve Banks were willing to reduce their
gold reserves to 40 per cent of their deposits
and note liability (which would be regarded
as a minimum and in normal times would be
inadequate) the amount of free gold—i. e.,
the amount of gold that the Federal Reserve
Banks would lose before reaching this 40 per
cent minimum—would be a little more than
$375,000,000. While this is a very large sum,
its sufficiency can not safely be assumed when
we consider the wide scope of our transactions
in world finance and the phenomenal growth
of our own credit structure.
It is estimated that there are now in the
hands of the public, i. e., outside the Treasury
and the banks, over $800,000,000 in gold and
gold certificates, and that there are at present
held in the vaults of member banks about
$815,000,000 of reserve money of which $540,000,000 is gold coin or gold certificates. There
should be added to this estimate about $600,000,000 of lawful money in the vaults of nonmember State banks and trust companies.

After having given much attention to the
problem of controlling and regulating the gold
supply of the United States and to the question
of bank reserves in general, the Federal Reserve
Board has prepared and transmitted to the
chairmen of the Committees on Banking and
Currency of the Senate and House of Representatives recommendations for the amendment of the Federal Reserve Act. While it is
not deemed desirable to give out the text of
the amendments transmitted, since they will
probably soon be introduced in Congress, the
following general statement concerning them
is made public:
When the Federal Reserve Act was drafted
its principal object was to deal with national
problems of banking and currency. Since its
enactment financial and economic conditions
in the United States have undergone far- ii
NOTE AMENDMENT.
reaching changes which were not foreseen three |
years ago. The United States has grown to be I The Federal Reserve note, which is an oblia world power in financial affairs and it seems | gation of the United States secured by an ample
necessary that the act, which has proved of reserve of gold and commercial paper, is
such great value in the treatment of our accepted as willingly by the public as a national
domestic problems, should now be amended in bank note or as any other form of currency,
order to enable us to deal effectively with the | and the public does not discriminate between
new international problems which seem des- • different forms of United States currency.
;
tined to play so important a part in our eco- j Federal Reserve note circulation has been subnomic life. The banking system of the United i stituted for gold certificates to the extent of
States should be prepared to meet effectively | about $300,000,000.
two conditions of opposite character—one, the
Under the present law this gold is deposited
excessive and uncontrolled inflow of gold, the with the Federal Reserve Agents in redemption
other the excessive and unregulated outflow of of the Federal Reserve notes issued against it.
gold. The amendments proposed are designed The note so provided for thereby in effect ceases
to provide means of controlling an over- to be an obligation of the Federal Reserve
extension of loans based on new accretions to Bank; but as the gold does not figure as an
our gold stock and to provide for the mobiliza- asset of the Federal Reserve Banks, the Federal




FEBRUARY l,

1917.

FEDERAL RESERVE BULLETIN.

99

Reserve Banks are unable to show the greater Banks. Hence the Board believes that ultistrength which might be evidenced if the law mately the law should require of member banks
permitted, as proposed in the amendments, the no more than that they should maintain speciissuance of Federal Reserve notes not only j fied balances with the Federal Reserve Banks
against commercial paper, but also against j in amounts adequate to supply the necessary
gold or against either, provided always that j reserve basis, and that the Federal Reserve
every Federal Reserve note must be covered j Banks must have sufficient reserves of gold
by at least 100 per cent of commercial paper or I with which to protect all obligations, but that
gold and that there must always be a gold j there should, however, be no legal requirement
reserve of not less than 40 per cent against all !j as to the amount of currency that a member
outstanding Federal Reserve notes.
bank should cany in its own vault. This is a
matter of business judgment that might well
RESERVES.
be left to the discretion of each member bank.
It was thought, however, that if this principle
The control of gold by Federal Reserve Banks \ were carried into full effect at this time, the
in times of abundance such as at present, will j step might be considered too extreme, particudecrease the danger of inflation of domestic larly under present conditions, and nothing
credits and at the same time will enable the should be done that might tend to a further
country when the tide turns to part with large release of reserve money.
sums of gold with, less inconvenience or shock,
A minimum amount of currency that the
thus enabling us more safely and effectively to j member banks should be required to keep in
proceed with the development of our foreign j their vaults is, therefore, prescribed. The
trade and to give the necessary crecjit facilities [ amount suggested is 5 per cent of the demand
for its extension. The United States should ! deposits, so that the total requirements—cash
be in a position to face conditions which may • and reserve—will remain practically uncall for an outflow of gold without any disturb- I changed. While the effect of some of the proances of our own or to the world's business, and ; posed changes will be to reduce somewhat the
without making necessary drastic changes in reserve requirements, the reserves will be inour interest or discount rates. The amend- creased by the abrogation of the practice
ments suggested by the Board are designed to hitherto observed of counting items in transit
enable the Federal Reserve Banks to withdraw or "float" as reserve. The permission given
gold from actual circulation while enabling member banks to use their own discretion as
member banks at the same time to release gold | to the character of currency in their vaults,
which at present is tied up in their own vaults, j will enable them to release the gold they now
The amendments are based upon the theory I hold, with the important result that the subthat all of the individual banks should j stitution of Federal Reserve notes for gold and
strengthen the gold holdings of the Federal j gold certificates will be facilitated by this
Reserve Banks. The co.untry;s holdings of j change in the law. Without some such change
gold are not used most effectively when they member banks will continue to ask for gold
are in the vaults of a large number of banks certificates in small denominations, because as
scattered all over the country, but its greatest long as they must have gold or lawful money
use would come from concentrating it to a to count as reserve it would be impossible for
greater degree in the vaults of the Federal the banks to exchange them for Federal ReReserve Banks, where it can be effectively pro- serve notes.
tected when not required and effectively used j
when needed. The member bank does not j
OTHER PROPOSED AMENDMENTS.
require gold with which to supply the ordinary j
Besides the proposed changes relating to
demands of its depositors so much as currency.
It is from this point of view that the Federal note issues and to reserves the Board has sugReserve Board has proposed that Congress in- gested also the following:
crease the required reserves to be maintained j Amendment of section 11 so as to permit the
by member banks with the Federal Reserve ! Federal Reserve Board to raise reserve requireBanks. On November 17, 1916, the cash ments in emergencies, just as it is now empowholdings of all member banks were about ered in certain contingencies of a different kind
$815,000,000. Under the proposed amend- to lower those requirements.
ment of section 19, $250,000,000 of this amount
This provision would, if adopted, enable the
would be transferred to the Federal Reserve Federal Reserve Board in prolonged periods of




100

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,

1917.

extreme ease in the money market to check any j thus restoring to national banks, with the aptendency toward excessive loans or other forms . proval of the Federal Reserve Board, the right
of undue extensions of credit.
I to accept up to 100 per cent of their capital
Amendment of section 16 to permit nonmem- ' and surplus in transactions involving imports
ber State banks and trust companies, even ! or exports.
though too small to be eligible for membership
Amendment of section 17 to cancel the proin* the Federal Reserve Banks, to avail them-I vision of the national bank act which requires
selves of the clearing and collection facilities of ; national banks to maintain a minimum dethe Federal Reserve Banks, provided that they j posit of Government bonds with the Treasurer
cover at par checks on themselves sent for col- of the United States. National banks are no
lection by the Federal Reserve Bank, and pro- i longer required to keep outstanding a minimum
vided further that they keep a compensating \ amount of circulating notes, and a newly orbalance with the Federal Reserve Bank in an i ganized bank is not obliged to purchase or
amount to be determined under rules prescribed carry any bonds of the United States; but
by the Federal Reserve Board. This is not there are a number of national banks organized
intended to operate as an extension of any of before the passage of the Federal reserve act
the privileges of the Federal Reserve System to which have retired their national-bank circunonmember banks at the expense of members, lation in full, yet they are, under a construction
but on the contrary the amendment is proposed of the old law, required to keep on deposit
primarly for the convenience of the public and with the Treasurer of the United States a cerincidentally for the benefit of the member tain minimum of United States bonds. The
banks. It is contemplated that the compen- Board feels that it is just to these banks that
sating balances which nonmember banks par- they be relieved of this obligation.
ticipating in the clearing plan will be required
Amendment of section 25 to authorize memto keep with Federal Reserve Banks, will be ber banks located in cities of more than 100,000
sufficiently large to protect member banks and population and which have a capital and surjustify Federal Reserve Banks in undertaking plus of more than $1,000,000 to establish
the service. Any clearing and collection plan branches in the same city, provided the State
to be effective must be so comprehensive as to laws do not prohibit State banks and trust
include all checks. At present the par lists of companies from establishing branches.
the Federal Reserve Banks include the names
Amendment of section 9 to authorize mutual
of banks checks on which can be collected in savings banks not having capital stock to beany circumstances at a minimum of time and come associated members of the Federal Reexpense, but do not embrace a large number of serve System under certain prescribed conditowns in every State where there are no member tions. The principal beneficiaries, of this amendbanks; and in order to make collections on such ment would be the mutual savings banks of the
points many banks are obliged to maintain Eastern and New England States, which, can
accounts in addition to their reserve accounts not become members of the Federal Reserve
with the Federal Reserve Banks. A necessary System under the present law owing to the lack
factor in any successful clearing plan is the of any provision enabling them to subscribe for
offset, whereby balances only require settle- capital stock of a Federal Reserve Bank, as they
ment instead of the total volume of transac- have no capitalization of their own upon which
tions. As long as the clearing system does not a percentage could be based. They would be
embrace all of the banks this offset is lost in a required to carry a reserve balance with the
corresponding degree and the value of the sys- Federal Reserve Bank against their time detem diminished in proportion.
posits in the same proportion as member banks;
Amendment of section 22—the penal stat- and the accommodations proposed for mutual
ute—so as to define more clearly the rights and savings banks are limited strictly to the dislimitations of directors in the matter of accept- count of their 30-day obligations properly
ing fees or compensation other than the ordi- secured.
nary fees paid directors for legitimate services
Amendment of section 18 so as to give to
rendered in the regular course of business, the United States one-year 3 per cent gold notes
performance of winch service is not incumbent in the hands of Federal Reserve Banks the cirupon them in their capacity as directors.
culation privilege for the issuance of Federal
Amendment of section 13 to restore the pro- Reserve Bank notes, such circulation to be taxed
vision which was by error stricken from the at the same rate as circulating notes, which are
act in the amendments of September 7, 1916, secured by 3 per cent bonds of the United




FEBRUARY 1,1917.

FEDERAL RESERVE BULLETIN.

States. In the opinion of the Board it is desirable to extend this privilege to the Federal
Reserve Banks in order that they may' have
additional moans of protecting themselves at
times when there is an unusual demand for
currency.
Amendment of section 4 to abolish the title
and office of Deputy Federal Reserve Agent,
thus having two unattached class C directors
instead of one as at present, and to create the
position of Assistant Federal Reserve Agent,
who shall not be a director of the bank, but who
shall be a salaried bonded officer in the Federal
Reserve Agent's department, serving at all
times as an assistant to the Federal Reserve
Agent and qualified to act for the agent in his
absence. Experience has shown that there is
difficulty in filling the office of Deputy Federal
Reserve Agent. This officer is required to have
the same qualifications as the Federal Reserve
Agent; he must have had banking experience
and he must not be an officer, director, or
stockholder in any bank. At the same time
he is not as a rule a salaried officer, and receives only the customary fees paid directors
for attendance upon meetings, and he is
obliged to be prepared to assume the duties of
the Federal Reserve Agent in case of the absence or disability of that officer, wind 1 involves a transfer and audit of securities and
accounts. It is believed that the change suggested will operate to fix responsibility more
definitely and will give the Board more latitude
in the selection of the class C directors other
than the Federal Reserve Agent.

101

absence or disability of his principal/' and by
adding in place thereof the following:
"Subject to the approval of the Federal
Reserve Board, the Federal reserve agent shall
appoint one or more assistants. Such assistants, who shall be persons of tested banking experience, shall assist the Federal reserve agent
in the performance of his duties and shall also
have power to act in his name and stead during
his absence or disability. The Federal reserve
agent may require such bonds of his assistants as
he may deem necessary for his own protection.
Assistants to the Federal reserve agent shall
receive an annual compensation to be fixed
and paid in the same manner as that of the
Federal reserve agent."
SEC. 2. That section nine be amended by
adding a subsection (a) to read as follows:
"SEC. 9a. That any mutual savings bank or
association operating under the laws of any
State may make application to the Federal
Reserve Board for the right to become an associate member of the Federal reserve bank of the
district in which such savings batik or association is located.
"The Federal Reserve Board, under such
rules and regulations as it may prescribe, may
permit such bank or association to become an
associate member of the Federal reserve bank,
but such board, before granting any application, shall require satisfactory evidence that the
laws of the State in which the applying bank or
association is located authorize such bank or
association to engage in the business of a mutual savings bank and provide for a proper
supervision over the operations of such bank or
TEXT OF AMENDMENTS.
association.
A BILL To amend the Act approved December twenty"Any mutual savings bank or association
third, nineteen hundred and thirteen, known as the
Federal reserve Act, as amended by the Acts of Augnst which becomes an associate member of a Fedfourth, nineteen hundred and fourteen, August fifteen, eral reserve bank shall agree to comply with all
nineteen hundred and fourteen, March third, nineteen the provisions of section nineteen of this Act.
hundred and fifteen, and September seven, nineteen Such associate members shall be entitled to all
hundred and sixteen.
the clearing privileges granted to member
Be it enacted by the Senate and House of banks, and Federal reserve banks shall be
Representatives of the United States of America authorized to discount the promissory notes of
in Congress assembled, That section four of thesuch associate members having a maturity of
Act approved December twenty-third, nineteen not more than thirty days and which are
hundred and thirteen, known as the Federal secured (a) by paper eligible for rediscount
reserve Act, be amended by striking out the under section thirteen of the Federal reserve
sentence reading as follows: "One of the di- Act; (b) by United States bonds; (c) by such
rectors of Class C, who shall be a person of municipal warrants as Federal reserve banks
tested banking experience, shall be appointed are authorized to purchase under the provisions
by the Federal Reserve Board as deputy chair- of section fourteen of the Federal reserve Act;
man and deputy Federal reserve agent, to or (d) by commercial paper or bankers7 acceptexercise the powers of the chairman of the ances bearing the signature of not less than
board and Federal reserve agent in case of three persons, firms, or corporations."




102

FEDEBAL EESERVE BULLETIN.

FEBRUARY 1,1917,

SEC. 3. That clause (c) of section eleven be, tached at the time of acceptance; or which are
and is hereby amended by adding at the end secured at the time of acceptance by a warethereof the following sentence:
house receipt or other such document convey"The Federal Reserve Board shall also have ing or securing title covering readily market,
power, Ayhenever extraordinary conditions jus- able staples. No member bank shall accept,
tify, to increase from time to time for periods whether in a foreign or domestic transactionnot exceeding thirty days, on the affirmative for any one person, company, firm, or corporavote of five of its members, the amount of tion to an amount equal at any time in the
balances required by this Act to be maintained aggregate to more than ten per centum of its
by member banks with their respective Federal paid-up and unimpaired capital stock and surreserve banks: Provided, Such increase shall plus, unless the bank is secured either by atat no time exceed twenty per centum of such tached documents or by some other actual sebalances and shall be at the same rate for all curity growing out of the same]-transaction as
member banks of any one district: And pro- the acceptance; and no bank shall accept such
vided further, That the Federal Reserve Board bills to an amount equal at any time in the agshall make a report to Congress in writing gregate to more than one-half of its paid-up and
setting forth the conditions on which such unimpaired capital stock and surplus: Provided,
action is based.7'
however, That thegFederal Reserve Board, under
SEC. 4. That the first paragraph of section such general regulations as it may prescribe, which
thirteen be further amended so as to read as shall apply to all banks alike regardless of the
amount of capital stock and surplus, may authorfollows:
"Any Federal reserve bank may receive ize any member bank to accept such bills to an
from any of its member banks, and*from the amount not exceeding at any time in the aggregate
United States, deposits of current funds in one hundred per centum of its paid-up and unim,lawful money, national-bank notes, Federal paired capital stock and surplus: Provided, howreserve notes, or checks, and drafts, payable ever, Tliat the aggregate of acceptances growing out
upon presentation, and also, for collection, of domestic transactions shall in no event exceed
maturing notes and bills; or, solely for purposes fifty per centum of such capital stock and surplus"
of exchange or of collection, may receive from
SEC. 6. That section sixteen, paragraphs
other Federal reserve banks deposits of current two, three, four, five, six, and seven, be
funds in lawful money, national-bank notes, further amended and reenacted so as to read
or checks upon other Federal reserve banks, as follows:
and checks and drafts, payable upon presenta"Any Federal reserve bank may make applition within its district, and maturing notes and cation to the local Federal reserve agent for
bills payable within its district; or, solely for the such amount of the Federal reserve notes
purposes of exchange or of collection, may receive
hereinbefore provided for as it may require.
from any nonmember hank or trust company Such application shall be accompanied with a
deposits of current funds in lawful money, tender to the local Federal reserve agent of
national-bank notes, Federal reserve notes, checks
collateral in amount equal to the sum of the
and drafts payable upon presentation, or maturing Federal reserve notes thus applied for and
notes and bills: Provided, Such nonmember bank issued pursuant to such application. The
or trust company maintains with the Federal collateral security thus offered shall be notes,
reserve bank of its district a balance i% an amount
drafts, bills of exchange, or acceptances redisto be determined by the Federal Reserve Board counted under the provisions of section thirteen
under such rules and regulations as it may of this Act, or bills of exchange indorsed by
prescribe"
a member bank of any Federal reserve district
SEC. 5. That the fifth paragraph of section and purchased under the provisions of section
thirteen be, and is hereby, further amended so as fourteen of this Act, or bankers' acceptances
to read as follows:
purchased under the provisions of said section
"Any member bank may accept drafts or bills fourteen, or gold or gold certificates; but in no
of exchange drawn upon it having not more event shall such collateral security, whether gold,
than six months sight to run, exclusive of days gold certificates, or eligible paper, be less than
of grace, which grow out of transactions involv- the amount of Federal reserve notes applied for.
ing the importation or exportation of goods; or The Federal reserve agent shall each day
which grow out of transactions involving the notify the Federal Reserve Board of all issues
domestic shipment of goods provided shipping and withdrawals of Federal reserve notes to
documents conveying or securing title are at- and by the Federal reserve bank to which he




FSDEEAL EESBBVE BULLETIN".

FEBRUARY 1,1917.

is accredited. The said Federal Reserve Board
may at any time call upon a Federal reserve
bank for additional security to protect the
Federal reserve notes issued to it.
"Every Federal reserve bank shall maintain
reserves in gold or lawful money of not less than
thirty-five per centum against its deposits and
reserves in gold of not less than forty per centum against its Federal reserve notes in actual
circulation: Provided, however, That when the
Federal reserve agent holds gold or gold certificates
as collateral for Federal reserve notes issued to
the lank such gold or gold certificates shall he
counted as part of the gold reserve which such
bank is required to maintain against its Federal
reserve notes in actual circulation aad-not-efeet
•lawful-money deposited with the
te¥Federal roacr¥e-agea&. N<
Notes so paid out shall
bear upon their faces a distinctive letter and
serial number, which shall be assigned by the
Federal Reserve Board to each Federal reserve
bank. Whenever Federal reserve notes issued
through one Federal reserve bank shall be
received by another Federal reserve bank they
shall be promptly returned for credit or redemption to the Federal reserve bank through
which they were originally issued or, upon direction of such Federal reserve banlc, they shall
he forwarded direct to the Treasurer of the United
States to he retired. No Federal reserve bank
shall pay out notes issued through another
under penalty of a tax of ten per centum upon
the face value of notes so paid out. Notes presented for redemption at the Treasury of the
United States shall be paid out of the redemption fund and returned to the Federal reserve
banks through which they were originally
issued, and thereupon such Federal reserve
bank shall, upon demand of the Secretary of
the Treasury, reimburse such redemption fund
in lawful money or, if such Federal reserve
notes have been redeemed by the Treasurer in
gold or gold certificates, then such funds shall
be reimbursed to the extent deemed necessary
by the Secretary of the Treasury in gold or
gold certificates, and such Federal reserve
banks shall, so long as any of its Federal reserve
notes remain outstanding, maintain with the
Treasurer in gold an amount sufficient in the
judgment of the Secretary to provide for all
redemptions to be made by the Treasurer.
Federal reserve notes received by the Treasurer
otherwise than for redemption may be exchanged for gold^out of the redemption fund
hereinafter provided and returned to the reserve bank through which they were originally




77593—17-

5

103

issued, or they may be returned to such bank
for the credit of the United States. Federal
reserve notes unfit for circulation shall be
returned by the Federal reserve agents to the
Comptroller of the Currency for cancellation
and destruction.
"The Federal Reserve Board shall require
each Federal reserve bank to maintain on
deposit in the Treasury of the United States
a sum in gold sufficient in the judgment of the
Secretary of the Treasury for the redemption
of the Federal reserve notes issued to such
bank, but in no event less than five per centum
of the total amount of notes issued less the amount
of gold or gold certificates held by the Federal
reserve agent as collateral security; b u t such
deposit of gold shall be counted and included
as part of the forty per centum reserve hereinbefore required. The board shall have the
right, acting through the Federal reserve
agent, to grant, in whole or in part, or to
reject entirely the application of any Federal reserve bank for Federal reserve notes; but to the
extent that such application may be granted
the Federal Reserve Board shall, through its
local Federal reserve agent, supply Federal
reserve notes to the bank so applying, and
such bank shall be charged with the amount of
s^efe notes issued to it and shall pay such rate of
interest oft-sa^-amoun^ as may be established
y
d d th
fc
by the Federal Reserve Board and tho
ef auch on only that amount of such notes which
equals the total amount of its outstanding Federal
reserve notes less the amount of gold or gold
certificates held by the Federal reserve agent as
collateral security. Federal reserve notes so
issued to any such bank shall, upon delivery,
together with such notes of such Federal
reserve bank as may be issued under section
eighteen of this Act upon security of United
States two per centum Government bonds,,
become a first and paramount lien on all the
assets of such bank.
ajr4ime
i
Federal
its liability for
roaorvo -no^oa by
y
reserve
money
so d

Upon

104

FEDERAL BESEBVE BULLETIN.

FEBRUARY 1,1917.

the request of the Secretary of the Treasury j SEC. 8. That paragraph five of section
the Federal Reserve Board shall require the I eighteen be, and is hereby, amended so as to
Federal reserve agent to transmit so nraefe-ef read as follows:
?'
fee-paid gold to the Treasurer of the United
"Upon the deposit with the Treasurer of the
States so much of the gold held by him as collateral
United States of bonds so purchased, or any
security for Federal reserve notes as may be j bonds with the circulating privilege acquired
required for the exclusive purpose of the I under section four of this Act, or any three per
redemption of such eetes Federal reserve notes,centum one-year gold notes issued in accordance
but such gold when deposited with the Treasurer with the provisions of this section, any Federal
shall be counted and considered as if collateral reserve bank making such deposit in the mansecurity on deposit with the Federal reserve ner provided by existing law for the deposit by
agent.
national banks oi bonds bearing the circulating
"Any Federal reserve bank may at its dis- | privilege, shall be entitled to receive from the
cretion withdraw collateral deposited with the j Comptroller of the Currency circulating notes
local Federal reserve agent for the protection • in blank, registered and countersigned as proof its Federal reserve notes d p e i £ d w i 4 f e i £ ! vided by law, equal in amount to the par value
issued to it and shall at the same time substi- | of the notes or bonds so deposited. Such cirtute therefor other like collateral of equal j culating notes shall be obligations of the Federal
amount with the approval of the Federal! reserve bank procuring the same, and shall be
reserve agent under regulations to be pre- j in form prescribed by the Secretary of the
scribed by the Federal Reserve Board. Any j Treasury, and to the same tenor and effect as
Federal reserve bank may retire any of its \ national bank notes now provided by law.
Federal reserve notes by depositing them vjith the They shall be issued and redeemed under the
j
Federal reserve agent or with the Treasurer of same terms and conditions as national bank
the United States, and such Federal reserve banknotes, except that they shall not be limited to
I
shall thereupon be entitled to receive back the jthe amount of the capital stock of the Federal
collateral deposited with the Federal reserve reserve bank issuing them. Circulating notes
agent for the security of such notes. Federal of Federal reserve banks secured by three per
reserve banks shall not be required to maintain centum one-year gold notes shall be subject to the
same tax imposed by law on circulating notes
the reserve or the redemption fund heretofore provided for against Federal reserve notes which which are secured by three per centum bonds of
have been retired; nor shall they be further liable the United States."
to pay any interest charge vjhich may have been SEC. 9. That section ninete'en be further
imposed thereon by the Federal Reserve Board. | amended and reenacted so as to read as
Federal reserve notes so deposited shall not be jfollows:
reissued except upon compliance with the con" SEC. 19. Demand deposits within the meanditions of an original issue"
ing of this Act shall comprise all deposits paySEC. 7. That section seventeen be, and is able within thirty days, and time deposits shall
comprise all deposits payable after thirty days,
hereby, amended so as to read as follows:
"SEC. 17. So much oi the provisions of sec- ftBtd all savings accounts and certificates of
deposit h i h
b j t to
t less than
h
tion fifty-one hundred and. fifty-nine of the d i t which are subject t not l
Revised Statutes of the United States and sec- thirty days' notice before payment, and all
tion four of the Act of June twentieth, eighteen postal savings deposits.
—When the Secrctray d-4hc Treasury shall
hundred and seventy-four, and section eight of
the Act of July twelfth, eighteen hundred and have officially aa&e&aeed, in .Quch manner as
eighty-two, and of any other provisions of ex- ho ma^risting statutes as require that before any
national banking associations shall be author- I momfeer Every bank, banking association, or
ized to commence banking business it shall j trust company which is or which becomes a
transfer and deliver to the Treasurer of the j member of any Federal reserve bank shall estabUnited States a stated amount of United States j lish and maintain reserve balances with its Fedregistered bonds, and so much of those provi- Ieral reserve bank reserves as follows:
" (a) If a-baafe not in a reserve or central resions or of any other provisions of existing
statutes as require any national banking associa- serve city, as now or hereafter defined, it shall
tions now or hereafter organized to maintain a hold and maintain with the Federal reserve bank
minimum deposit of such bonds with the Treas- of its district an actual net balance reserves equal
urer is hereby repealed."
to not less than twelve seven per centum of the




105

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

thirteen per centum of the aggreaggregate amount of its demand deposits and ! than
tliree per centum of its time depositsy—as • gate amount of its demand deposits and five
fellews-:. *
i three per centum of its time deposits-as-fellews-:.
p
for a—eegied of tk-igty-sijg i -^fcMtiM^a^ItsH^^
£fete
-geeseg^pe baafe
^

of

" Every member bank shall maintain in its
•wkiek-sh&ll, own vaults an amount of specie or currency equal
' to at leastfi.veper centum of its demand, deposits
less the amount of those balances with the Federal
reserve bank which are in excess of the minimum
balances required by this section.

one

said-date

hi

in
}

^

p

7

ex-keg—tha**—^kese---feeFei-H:bei:er-e--re
^
^

" (b) If Qrb&Bk in a reserve city, as now or
hereafter defined, it shall hold and maintain
with the Federal reserve bank of its district an
actual net balance goaorves equal to not less than
fifteen ten per centum of the aggregate amount
of its demand deposits and frre three per centum
of its time depositsy-as-feHews-r.
'In i t l
f
id
for a pogied—ef—thirty sist
thorcoiV
s after

five

No member bank shall keep
-tfee-date ! on deposit with an}" nonmenber bank a sum in
5T-aB:4-fe-r-eaek i excess of ten percentum of its own paid-up
-eae capital and surplus. No member bank shall
six
aa
act as the medium or agent of a nonmember
bank in applying for or receiving discounts
be
from a Federal reserve bank under the provisions of this Act, except by pemiission of the
a pcried of tkirt}^
Federal Reserve Board.
4ate-4ke-balaaee of tk
"The ?eseFre required balance carried by a
-ewft-^=ault9, or m the Federal reserve
in
in resegye-eg-eea- member bank with a Federal reserve bank may,
under the regulations and subject to such penalties asjiiay be prescribed by the Federal
said thirty six m
sa-id
exeept—-4feese—hege»befege—ge Reserve Board, be checked against and withdrawn by such member bank for the purpose
of meeting existing liabilities: Provided, howt^ of the Federal ever, That no bank shall at any time make new
loans or shall pay any dividends unless and
or
bankr
until the total gese-Fre balance required by law
" (c) If a-baak in a central reserve city, as is fully restored.
"In estimating the reserves balances and
now or hereafter defined it shall hold a,nd maintain with the Federal reserve bank of its d/isirict the cash in vault required by this Act, the net
an actual net balance gesegve equal to not less
difference of amounts due to find from




106

FEDERAL RESERVE BULLETIN.

,1917.

other banks shall be taken as the basis for chase or sale of such securities or other investascertaining the deposits against which fe- ments must be by an affirmative vote or written
sorvos required balances with Federal reserve assent of at least three-fourths of the members of
banks and cash in vault shall be deter- the board exclusive of the director interested and
mined. Bftiaaooa in reserve basks due te must be recorded in the minutes of the meeting
of said board, such minutes to specify the name
member baaks shall to the extcnt-horcin
vidod-bo counted aa reserves-.
of the director and the firm or corporation with
''National banks, or banks organized under which he is connected, if any, through which
local laws, located in Alaska or in a dependency such order is to be executed, together with the
or insular possession or any part of^ the United amount of the fee or commission to be paid on
States outside the continental United States each transaction: And provided further, That
may remain nonmember banks, and shall in notes, drafts, bills of exchange, or other evidences
that event maintain reserves and comply with of debt executed or indorsed by directors or attorall the conditions now provided by law regu- neys of a member bank may be discounted with
lating them; or said banks cxccp^-m-^he-Phili- such member bank on the same terms and condipine Iala&eb may, with the consent of the tions as other notes, drafts, bills of exchange, or
Reserve Board, become member banks of any evidences of debt upon the affirmative vote or
one of the reserve districts, and shall in that written assent of at least three-fourths of the
event take stock, maintain reserves, and be sub- members of the board of directors of such member
ject to all the other provisions of this Act."
bank.

SEC. 10. That that part of section twentySEC. 11. That section twenty-five be
two which reads as follows: "Other than the amended by adding a subsection (a) to read
usual salary or director's fee paid to any officer, as follows:
director, or employee of a member bank and
''SEC. 25a. That any member bank located
other than a reasonable fee paid by said bank in a city or incorporated town of more than
to such officer, director, or employee for ser- one hundred thousand inhabitants and posservices rendered such bank, no officer, direc- sessing a capital and surplus of §1,000,000 or
tor, employee, or attorney of a member bank more may, under such rules and regulations
shall be a beneficiary of or receive, directly or as the Federal Reserve Board may prescribe,
indirectly, any fee, commission, gift, or other establish branches, not to exceed ten in number,
consideration for or in connection with any within the corporate limits of the cit}~ or town
transaction or business of the bank," be, and in which it is located: Provided, That no such
hereby is, amended and reenacted so as to read branch shall be established in any State in
as follows:
which neither State banks nor trust companies
"Other than the usual salary or director's may lawfully establish branches.7'
fee paid to any officer, director, O? employee,
3
or attorney of a member bank, and other than
a reasonable fee paid by said bank to such
Press Statement.
officer, director, or- employee, or attorney for
services rendered to such bank, no officer,
The Federal Reserve Board to-day made
director, employee, or attorney of a member public the text of a memorandum transmitted
bank shall be a beneficiaiy of or receive,
directly or indirectly, any fee, commission, to it by Mi*. James B. Forgan, president of the
gift, or other consideration for or in connection | Federal Advisory Council, expressing the views
with any transaction or business of the bank: | of that body with reference to the proposed
Provided, however, TJiat nothing in this Act amendments to the Federal reserve act recontained shall be construed to prohibit a director, cently submitted to the Banking and Currency
officer, employee or attorney from receiving the
same rate of interest paid to other depositors for Committees of the two Houses of Congress by
similar deposits made with such bank, or to pro- the Federal Reserve Board.
hibit an attorney or director who is not an officer
It will be noted that the council unanimously
or employee from receiving, directly or indi- approved the proposed note-issue amendment
rectly, the usual and customary commissions or which has been stricken out by the House
fees for services rendered in buying and selling
securities or other investments for or on account Committee on Banking and Currency; and that
of such bank; but 'in- this latter case the action| the council has suggested a modification of the
of the board of directors in directing each -pur- | proposed reserves to be carried by member




FEBRUARY 1 , 1 9 1 7 .

FEDEEAL KESEEVE BULLETIN.

107

banks with the Federal Reserve Banks. In standpoint, however, of a practical working
view of the fact, however, that the House basis the council doubts if so much as is procommittee struck out all requirements for j posed of the member banks' available cash
vault cash, the Board believes that the sug- | should be arbitrarily tied up in the form of
gested reserves of 7, 10, and 13 per cent, re- ! compulsory balances with the Federal Reserve
spectively, for country banks, reserve city I Banks.
banks, and central reserve city banks should
The council at its meeting of September 19
be retained.
last, drew the Board's attention to the fact that
The advisory council's memorandum, dated ! until the State banks join the system and daily
January 25, is as follows:
j clearing-house balances can be settled by checks
on the Federal Reserve Banks the member
RECOMMENDATIONS BY THE FEDERAL ADVISORY
I banks, especially in the large cities, must keep
COUNCIL IN REGARD TO THE AMENDMENTS
TO THE FEDERAL RESERVE ACT PROPOSED BY | a sufficient supply of gold or lawful money on
THE FEDERAL RESERVE BOARD, JANUARY, 1917.hand for the settlement of such balances as well
No. 1. Amendment to section 16, which as for their counter use. Besides this it would
be a conservative policy for the member banks
provides—
to keep in their own vaults a reasonable amount
(a) For the issue of Federal Reserve notes
of gold or lawful money proportionate to their
directly against the deposit of 100 per cent
gold, or .100 per cent of paper, or both; demand deposits. Banks located in Federal
(b) For the counting of gold held by the reserve cities now receive from the Federal ReFederal Reserve agents as security for notes serve Banks late in the afternoon checks on
as part of the gold reserve required to be held themselves in large volume and amount which
by the bank against such Federal Reserve
have accumulated during the day and have
notes—
been charged against their legal reserve balmeets with the approval of the Federal AdJ ances in such large volume and amount as to
visory Council.
hamper them in maintaining their legal reserve
No. 2. In re amendment of section 19, ab- balances. In our opinion 5 per cent cash on
breviating and simplifying the clauses in section 19 which relate to reserve requirements. hand would not be sufficient for these purposes,
This provides that all member banks shall and from a practical standpoint it would facilimaintain reserves in the Federal Reserve Bank, tate the operations of the member banks if the
as follows:
minimum compulsory balances to be kept by
them with the Federal Reserve Banks against
Against- i Against
I demmid : time detheir demand deposits were at least reduced
:loposiis.'. posits.
| 1 per cent in each class and the percentage of
Per call. ! Per c'.-n
! the till money correspondingly increased in the
(a) Country ba-iks
(/)) "Reserve city lianas
j case of the reserve city and central reserve city
(c) Centra] reserve oily banks
banks, the increase in till money in the case of
And in addition every member bank is re- the country banks being unnecessary. The
quired to keep in its own vault for till money council's recommendation is therefore as folan amount of specie or currency (not necessarily gold or lawful money) equal to 5 per cent lows:
of its demand deposits, less the amount of net
Deposit's Deposits
balance with Federal Reserve Banks in excess
in Fed- io Federal
eral
of the minimum above stipulated.
lieservo Reserve
Till
Hanks
Banks
money.
This amendment is in harmony with one of
against
against
(lorn a rid
time
the basic principles of the Federal Reserve Act
deposits. deposits.
to the effect that the bulk of the gold held as
Per crnf. Per cent. Per cent.
banks
0
reserves for bank deposits should be mobilized Country city "ban '•<$
"Reserve
3
f
9
Centra] reserve city
3 i
h
12
-n the Federal Reserve Banks. From the




108

FEDEBAL BESEBVE BULLETIN.

FEBRUARY 1,1917.

No. 3. Amendment of section 11, so as to
The council would recommend that the propermit the Federal Reserve Board to raise posed addition to section 22 commencing with
reserve requirements in emergencies, just as it uProvided, hovjever, That nothing in this act
is now empowered in certain contingencies of a
contained7' should, be amended as follows:
different kind to lower those requirements.
Provided, hovjever, That nothing in this act
The council is of opinion that it would be
| contained shall be construed to prohibit a direcundesirable and unnecessary to grant such tor, officer, or employee from receiving the
power to the Federal Reserve Board. The same rate of interest paid to other depositors for
Board would only take action under such power similar deposits made with such bank, or to
when member banks are overburdened with prohibit a director, who is not an officer or emsurplus cash reserves and its action then could ployee from receiving, directly or indirectly, the
usual and customary commissions or fees for
only apply to member banks. The effect services rendered in buying and selling securiwould therefore be that member banks would ties or other investments for or on account of
be compelled to increase their noninterest- such bank,
bearing balances with the Federal Reserve
7
Banks while nonmember hanks would have the
offfbteferseerei4ao3or fe^
ttsfe—be—fey
free use of their funds. It would place another
stumbling block in the way of State banks
joining the system.
-Aftd but each such transaction must
j be recorded in the minutes of the meeting of
No. 4. Amendment of section 13, to permit
nonmember State banks and trust companies, said Board, such minutes to specify the name
or corporation with
even though too small to be eligible for mem- j of the director and the firm any, through which
which he is connected, if
bership in the Federal Reserve Banks,' to avail I such order is £e-fee executed together with the
themselves of the clearing and collection facilities of the Federal Reserve Banks, provided |I amount of the fee or commission £e-fee paid on
each
provided
that they cover at par checks on themselves I notes,transaction: And exchange, further, That
drafts, bills of
sent for collection by the Federal Reserve dences of debt executed or indorsedor other eviby directors
Bank and provided further that they keep of a member bank may be discounted with such
a compensating balance with the Federal Reserve Bank in an amount to be determined member bank on the same terms and conditions
under rules prescribed by the Federal Reserve as other notes, drafts, bills of exchange, or
evidences of debt
Board.
gs—e£--4ke—keafd of- dreeetora of suek
This might work to the mutual advantage
bk
of the member banks in connection with the
check-collection system and of nonmember
The council makes this recommendation
banks willing to conform to the rules prescribed because, in its judgment, an affirmative vote or
by the Federal Reserve Board as well as to that written assent of at least three-fourths of the
of the Federal Reserve Banks through the members of the Board is an unnecessary restriccompensating balances. The experiment might tion in connection with such services by a direcbe worth trying.
tor as the buying and selling of securities and
inasmuch as notes, drafts, bills of exchange, or
No. 5. Amendment of section 22—the penal
statute—so as to define more clearly the rights other evidences of debt executed or indorsed by
and limitations of directors in the matter of bank directors are as a rule the very best of
accepting fees or compensation other than the their class, the placing of special restrictions on
ordinary fees paid directors for legitimate serv- the discounting of such instruments for direcices rendered in the regular course of business,
the performance of which services is r.ot in- tors would only unnecessarily and unwarrantcumbent upon them in their capacity as ably impede legitimate business or force it into
directors.
other banks.




FEBRUARY 1,1917.

FEDERAL RESERVE BULLETIN.

109

privilege for the issuance of Federal Reserve
bank notes that the law providing for the exchange- of 2 per cent gold bonds bearing the
circulation privilege, but against which no circulation is outstanding, for one-year gold notes
to an amount not exceeding one-half of the
2 per cent bonds so tendered for exchange, be
so amended as to do away with the one-year
The council approves this amendment.
| gold notes entirely and provide that the 2 per
No. 7, Amendment of section 17, to cancel cent gold bonds may bo exchanged for an equal
the provision of The National Bank Act which
T
requires national banks to maintain a minimum amount of thirty-3 ear 3 per cent gold bonds
deposit of Government bonds with the Treas- without the circulation privilege.
urer of the United States.
No. 11. Amendment of section 4, to abolish
the title and office of Deputy Federal Reserve
The council approves this amendment.
Agent, thus having two unattached class C
No. S. Amendment of section 25 to authorize ! directors instead of one as at present, and to
member banks located in cities of more than ! create the position of Assistant Federal Re100.000 population and which have a capital ' serve Agent, who shall not be a director of the
and surplus of more than $1,000,000 to estab- • bank, but who shall be a salaried bonded
lish branches in the same city, provided the I officer in the Federal Reserve Agent's departState laws do not prohibit State banks and ment serving at all times as an assistant to
trust companies from establishing branches.
the Federal Reserve Agent and qualified to
act for the agent in his absence.
The council has already advised the Board
As member banks and others doing business
that it approves the authorization of member
with the Federal Reserve Agent and his assistbanks located in cities of more than 100,000
population and which have a capital and. sur- ant would not necessarily be charged with
plus of more than SI,000,000 to establish knowledge of the absence or disability of the
branches in the same citjy but disapproves the Federal Reserve Agent, the restricted power of
granting of such a privilege to the banks in his assistant to act in his name and stead only
some States while it is withheld from banks in during his absence or disability should for their
other States irrespective of State laws affecting protection be removed by striking out the
State banks and trust companies in regard to words " during his absence or disability" occurring in the last paragraph of the proposed
the establishment of branches by them.
amendment. If the assistant should act in
No. 9. Amendment of section 9, to authorize any matter of importance during the presence
mutual savings banks not having a capital or disability of the agent to act for himself his
stock to become associate members of the
Federal Reserve System under certain pre- action would be null and void. Otherwise the
council sees no objection to the amendment.
scribed cond itions.

No. 6. Amendment of section 13 to restore
the provision which was by error stricken from
the act in the amendments of September 7,
1016, thus restoring to national banks, with the
approval of the Federal Reserve Board, the
right to accept up to 100 per cent of their capital
and surplus in transactions involving imports
and exports.

JANUARY 29,
1917.
The council approves this amendment.
No. 10. Amendment of section 18, so as to
give to United States one-year 3 per cent gold
Amendment as to Reserve Provisions.
notes in the hands of Federal Reserve Banks
the circulation privilege for the issuance of
The following computation, prepared for the
Federal Reserve bank notes.
House Banking and Currency Committee,
The council would recommend that instead serves to illustrate the effect of the amendof amending section 18 so as to give United ment to section 19 of the Act, proposed by the
States one-year 3 per cent gold notes in the Board, upon the deposits with Federal Reserve
hands of Federal Reserve Banks the circulation Banks by showing comparatively the amount




110

FEDERAL BESERVE BULLETIN.

of the deposits which member banks are now
required to maintain with the Federal Reserve
Banks, namely, $547,707,000. and the amount
they would be required to maintain were the
amendment enacted, or $901,910,000. The
total amount of reserve required, which is now
$1,369,315,000, would be slightly reduced, to
$1,332,986,000, the principal part of the reduction being in the requirements for country
banks. The figures used are those given in the
Comptroller of the Currency's summary of reports for national banks at close of business
November 17, 1916, and the formula for computing reserves prescribed by the comptroller
has been used, with the exception that the
requirements are computed as they will be
after balances with correspondents shall have
ceased to count as legal reserve.
[Tn thousands of dollars.!

As of Nov. 17,1916.

Due to banks. .

-

....

Less—due from banks

Central
reserve
city
banks.
1,553,234

285,619

|

^ ^ j

Country

Total.

4,935 i
4.IRQ
1,358,274 428,120
1,363,209
788,380

432,309
944,767

Total . .
Dividends unpaid
Demand deposits

1,267,615 574,829
105
284
1,001
1,960,610 2,015,082 3,346,996

Total

3,228,330 2,590,195 13,347,997

Deductions allowed:
Checks on other banks in
same place
Exchanges for clearing
house
Total

!
8,287

7,600 |

392,921

106,511 i

17,273

401,208

114,111

29,678

32,405

Net demand deposits
2.827,122 2,476,084 3,318,319
Time deposits
76; 272 287,922 1,452,252
Reserve required to be in
Federal Reservfe Bank:
13-10-7% on demand deposits
367,526 247,608 232,282
3% on time deposits
. 8,638
43,568
2,288

847,416
54,494

369,814

Total reserve required, new
basis (18-15-12%, 3% on
time deposits)
Total reserve required, present basis (18-15-12%, 5% on
time deposits)




256,246

275,850

901,910

197,898

148,505

165,916

512,379

1,525

5,758

28,045

35,328

199,423

On present basis:
7-C-5% on demand deposits
•
Approximately 2% on
time deposits

154,323

193,961

547,707

511,170

380,050

441,766

1,332,986

512,696

385,809

470,810

1,369,315

FEBRUARY 1,1917.

Subtreasuries and-Federal Reserve Banks.
There is herewith reprinted the letter of the
Secretary of the Treasury, dated December
16, 1916, transmitting a report relative to the
United States subtreasuries and their relation
to the Federal Reserve Banks to the Speaker
of the House of Representatives, as follows:
SIR: In the legislative, executive, and judicia
appropriation act approved May 10, 1916, it is
provided that—
"The Secretary of the Treasury is authorized
and directed to report to Congress at the beginning of its next session which of the subtreasuries, if any, should be continued after the
end of the fiscal year 1917, and if, in his opinion,
any should be continued, the reasons in full
for such continuance; also if any or all of said
subtreasuries may be discontinued what legislation will be necessary in order to transfer
their duties and functions to some other branch
of the public service or to the Federal Reserve
Banks/ 7
In accordance with the above authorization
and direction, I have the honor to report as
follows:
There are nine subtreasuries located, respectively, in the cities of Boston, Mass.; New
York City, N. Y.; Philadelphia, Pa.; Baltimore, Md.; Cincinnati, Ohio; Chicago, 111.; St.
Louis, Mo.; New Orleans, La.; and San Francisco, Cal. The subtreasury system was authorized by the act of August 6, 1846, and subsequent acts amendatory thereof.
The duties and functions of the subtreasuries
may be stated generally as follows:
Issue of gold order certificates on gold
deposits.
Acceptance of gold coins for exchange.
Acceptance of standard silver dollars for
exchange.
Acceptance of fractional silver for redemption.
Acceptance of minor coins for redemption.
Acceptance of United States notes for redemption.
Acceptance of Treasury notes for redemption.
Acceptance offgold and silver certificates for
redemption.
Cancellation (before shipment to Washington) of unfit currency.
Laundering of unfit currency which permits
of this process.

FEBRUARY 1,19.1.7.

FEDERAL BESBBVE BULLETIN.

Exchange of various kinds of money for
other kinds that may be requested.
Remittances from United States depositary
banks of their surplus deposits of internalrevenue, customs, money-order, postal, and
similar funds.
Deposits of postal savings funds direct.
Deposits of money-order funds direct and
indirect.
Deposits of post-offi.ce funds direct and
indirect.
Deposits on account of 5 per cent redemption
fund.
Deposits of interest on public deposits.
Deposits of funds belonging to disbursing
officers.
Funds deposited for transfer to some other
point through a payment by a subtreasury
located thereat.
Encashment of checks, warrants, and drafts
drawn against the Treasurer of the United
States and presented at a subtreasury for
payment.
The payment of United States coupons and
interest checks.
In addition to the foregoing the subtreasuries
have the custody of a large part of the reserve
and trust funds, consisting of the gold coin and
bullion and silver dollars deposited to secure
gold and silver certificates and greenbacks.
The receiving of deposits and payment of
checks has been assumed to a large extent
since the establishment of the Federal reserve
system by the designation of Federal Reserve
Banks as Government depositaries in those
subtreasury cities where Federal Reserve
Banks are located. Federal Reserve Banks
are located in the subtreasury cities of Boston,
New York, Philadelphia, Chicago, St. Louis,
and San Francisco. New Orleans has a
branch of the Federal Reserve Bank of Atlanta,
while neither Baltimore nor Cincinnati has a
Federal Reserve Bank.
It has always been deemed advisable to deposit the gold reserve and trust funds of the
Government in several places rather than to
concentrate them in one, for reasons of security
as well as public convenience.
The Federal Reserve Act does not expressly
or by implication contemplate the substitution of the Federal Reserve'Banks for the subtreasuries, nor would it in my opinion be possible, or advisable if possible, to attempt such
a substitution. While the general or current
fund of the Treasury may, in the discretion of
the Secretary, be deposited in the Federal




Ill

Reserve Banks, the reserve and trust funds of
the Government, viz, gold coin and bullion
and silver dollars held in trust by the Government against outstanding gold and silver certificates and greenbacks, are not included in
this authorization. The gold coin and bullion
hold against gold certificates, amounting at
present' to more than $2,000,000,000, a "considerable part of which is deposited in the subtreasuries, should not, in my opinion, be committed to the custody of any private corporations (and the Federal Reserve Banks are
private corporations), but should be in the
physical control of the Government itself. This
applies with equal force to the $152,979,025 of
gold reserve held against United States notes
and Treasury notes of 1890 and the silver dollars held against silver certificates. If, however, it should be deemed advisable to transfer
the custody of these trust funds to Federal Reserve Banks or to any other private corporation
or corporations, it would be necessary to make a
special deposit of such funds in vaults especially
constructed for the purpose and to maintain a
Federal guard or some form of adequate Government control over such vaults.
Since the Federal Reserve Banks are, as I
have already stated, private corporations, just
as are the national banks, the duty of providing
the necessary storage vaults and of assuming
the custody and control of these trust funds
could not be imposed upon the Federal Reserve
Banks by legislation. It could only be accomplished by negotiation and agreement, involving, necessarily, compensation for the service
performed. Whether or not arrangements
could be made with Federal Reserve" Banks
or any private institutions for the custody of
these trust funds upon terms and under conditions satisfactory to the Government and
at a saving in cost over the subtreasury methods, while, at the same time, providing all of
the conveniences in handling these funds and
the same measure of security as now afforded
by the subtreasury system, is a matter upon
which I am unable to express an opinion .x I
desire to repeat, however, my earnest conviction that it would be unwise to commit the
custody of these trust funds to any private
institution or institutions. The custody of
these trust funds, their maintenance, direction,
control, and administration are distinctly a
governmental function, and should be exercised only by the Government.
Aside from the custody of the trust funds of
the Government, the subtreasuries perform a

112

FEDEEAL EESERVE BULLETIN.

highly useful service to the public in making
exchanges of money, supplying money and
coin where needed, and reducing the cost and
expense of shipments of money and coin from
a common center. It is necessary to maintain
the facilities and conveniences provided by
the sub treasuries in the large centers of bxisiness in the country, such as the cities in which
the subtreasuries are now located. Even if
these particular functions could be transferred
to Federal Reserve Banks where they exist, the
services rendered by the substituted agencies
would have to be compensated for. This
would involve expense to the Government,
while, at the same time, the facilities provided
might not be as thorough and satisfactory as
those supplied by the subtreasuries themselves.
It has been suggested that the subtreasuries
are merely conveniences and not necessities,
and that their duties might be performed
entirely by the Treasury in Washington. This
is in a sense true, but the cost of handling all
the business from a common center, in a
country so extensive as the United States,
might be greater than the expense of the subtreasury system, whereas the delays and
inconveniences which the public would have
to suffer might prove a very serious handicap
upon business. It could with equal force be
argued that internal revenue offices throughout
the United States could be abolished and all
of the work done at Washington, and, in like
manner, that many of the customs offices
throughout the country could be abolished and
all of the work done from Washington. It is
the duty of the Government to provide
adequate facilities to meet the convenience
and necessities of the public in all parts of the
country, and the problem must be considered
as a whole and not merely in detail.
It may be possible to reduce the expense of
administration of some, or all, of the subtreasuries. It has been only one year since
the Federal Reserve Banks were made Government depositaries and fiscal agencies, and the
current or general funds of the Government
in such cities transferred to Federal Reserve
Banks. About that time I appointed an improvement committee (described in my annual
report of 1915) to make a careful study of
departmental methods in all directions and to
report upon the best means of improving the
general administration of the Treasury service
in its various important branches. The administration of the subtreasuries is one of the
subjects for investigation, and I sincerely hope
that within another year it may be found




FEBRUARY 1.1917.

possible to reduce the expense of operating
these institutions in some, if not in all, of the
cities where they are now located.
The amount of the Government funds in
each subtreasury, the volume of the total
transactions annually performed by them, and
the cost of maintaining these institutions are
set forth in the following table:
Subtreasury.

Baltimore
Boston
Chicago
Cincinnati
New Orleans
New York
Philadelphia
St. Louis
San Francisco
Total

Expense
of maintenance,
fiscal vear
1916.

Government
funds held
June 30,1916.

Total transactions, fiscal
year 1916.

812,573,371.07
34,452,695.24
120,537,589.79
31,388,654.90
31,917,751.13
329,402,485.45
26,183,266.27
48,629,847.19
99,088,010.01

§108,215,675.59
217,020,680.17
597,365,033.95
105,703,081.30
73,990,519.44
2,464,715,492.12
473,623,903.18
193,370,692.54
291,058,033.53

$33,749.53
52,051.29
84,325.04
28,819.14
27,481.22
187,587.75
57,792. 76
37,385.63
25,812.27

734,173,671.05

4,525,063,111.82

535,004.63

It will be seen that the cost of maintaining
these institutions, treating the subtreasury
system as a whole, is only one one-hundredth
of 1 per cent, approximately, on the total
transactions involved—an insignificant sum
compared with business done, the important
service performed, and the conveniences afforded to the public. Aside from New York,
the cost of maintaining the other eight subtreasiiries is $347,416.88, which is a comparatively small sum to pay for the service and
convenience they provide. If these institutions were abolished, the total cost of operating them would not be saved, as a counter
expenditure by the office of the Treasurer in
Washington, resulting from the increased work
that would be thrown upon that office, would
be entailed.
I am of the opinion that it would be inadvisable at this time to abolish all, or any, of the
subtreasuries. It is an important matter and
should be considered deliberately. With the
test of further experience it may develop that
the functions of the subtreasuries, or some of
them, may be transferred to Washington, or
to some other agency, but action should not be
taken hastily or inadvisedly.
I regret exceedingly that my necessary
absence from Washington, in connection with
the establishment of the Federal farm loan
banks and other public business, made it impossible for me to submit this report to the
Congress at an earlier date.
Respectfully,
W. G. MOADOO, Secretary.

FEBRUARY 1,1917.

118

FEDERAL RESERVE BULLETIN,

Commercial Failures in 1916.

were $16,745,274, against $19,605,274 in the
previous year and $30,899,162 in 1914.

Analysis of the failure statistics compiled by
Failures in 1916 by Federal Reserve districts.
R. G. Dun & Co. shows that the reduction in
the commercial mortality during 1916, as comTotal commercial failures.
Manufacturing.
pared with recent years, was generally shared
Districts.
by the different Federal Reserve Bank districts.
NumLiabilities. I
Assets.
ber.
They were 16,993 suspensions, involving
$196,212,256, last year. Of this aggregate,
$6,035,280 $15,304,555 i 597 $6,957,850
1,639
1,639, or 9.1 per cent, occurred in thefirstdis- No. 1
No.2
2,834
20,805,153 47,407,166 1,078 20,915,996
No.3
974
6,407,292 11,032,593
200
5,236,501
trict; 2,834, or 16.8 per cent, in the second; No.4..
14,282,736
17,683,783
1,278
328 ! 5,256,429
No.o
7,255,180
11,028,457
1,096
190 I 3,978,364
974, or 5.7 per cent, in the third; 1,278, or 7.5 No.6
15,681,930 22,056,677
1,707
209 I 4,948,258
13,535,940 23,117,920
2,174
552
8,679,723
per cent, in the fourth; 1,096, or 6.6 per cent, No. 7
1,042
5,580,537
153 ! 2,101,383
No.8
8,888,513
3,439,258
113 ! 1,365,816
540
No.9
4,724,399
in the fifth; 1,707, or 10 per cent, in the sixth; No. 10
147 ; 4,955,525
802
6,038,015
8,808,637
82 | 2,444,331
4,205,768
No. 11
870
8,571,775
2,174, or 10.9 per cent, in the seventh; 1,042, or No. 12
487 ! 6,159,404
2,028
10,331,937 17,587,781
6.5 per cent, in the eighth; 540, or 3.2 per cent, United States...! 16,993 113,599,026 196,212,256 4,196 I 72,999,580
1915
22,15(5 183,453,785 302,2S6,148 I 5,116 | 112,026,484
in the ninth; 802, or 5.8 per cent, in the tenth:
1914
18,280 205,293,046 357,908,850 ! 4,620 ! 135,636,279
16,037 174,688,151 272,672,288 ! 4,243 : 123,122,528
1913
870, or 5.1 per cent, in the eleventh; and 2,028
1912
- I 15; 452 136,538,168 203,117,391 I 3,839 • 86,719,8,32
.
in the twelfth district.
Other commercial.; Bank failures.
Trading.
The liabilities, as usual, show rather wide
variation, although in each instance there is a Districts.
NumNumNumsubstantial falling off from previous years.
ber. Liabilities. ber. Liabilities. ber. Liabilities.
J_
The second district, which includes New York
124 §1,744,099 !
918 S6,602,606
S175,000
City and tributary territory, provides the larg- No. 1
1,589 18,438,428
8,052,742
176
No.2
1,200,000
607
4,782,736.
1,013,356 :
47
No. 3
100,000
est total, with $47,407,166. In the seventh No.4
879
6,094,593
6,332, 761
71
972,601
873
5,819,165
1,230,928
33
No.o
480,000
district the indebtedness was $23,117,920; in No.6
1,440 11,492,300
5,616,119 .
58
3,489,178
1,510 10,037,399
4,400,798 i
112
1,311,000
the sixth, $22,056,677; in the fourth, $17,683,- No. 7
840 i 6,181,980
49
605,150 !
No.8
965,000
408 ! 3,179,689
19
178.894 !.
No.9
783; in the twelfth, $17,587,781.
Smaller No. 10...
610 i 3,132,948
45
720,164
65,000
758
30
485,950
1,489,000
amounts were supplied by other districts, the No. 11... 1,431 ;! 5,641,494 !' 110 1,457,887 I!
9,970,490
No. 12...
150,000
ninth reporting only $4,724,399.
United
874
91,373,828
50 ! 10,396,779
There were 50 banking failures, with liabili- States. 11,923 150,233,647 1,010 31,838,848 133 1 37,223,334
16,030
40,026,017
1915.
809 56,407,728
12,851 :'1O5,864,852
1914.
212 56,005,107
ties of $10,396,779, in 1916. Sixteen, involving
649 34,434,548
11,145 ,115,115,212
1913.
120 31,546,314
79 24,219,522
$3,489,178, occurred in the sixth district; 9 in 1912. 11,011 ! 91,779,905 602 24,617,594
the seventh for $1,311,000; 6 in the eleventh
Failures during December.
for $1,489,000; 1 in the second for $1,200,000;
6 in the fourth for $972,601; 4 in the eighth for
District.
Number. Liabilities.
$965,000; and 2 in the fifth for $480,000. In
Ill
8952,201
1
the six other districts banking defaults were in- No. 2
204
No
2,448,872
65
1,514,179
No. 3 . . .
significant, in no instance exceeding $175,000, No. 4
105
4,465,564
5
1,494,709
76
while in the twelfth district none were reported. No. 6 . .
142
No.
1,601,960
1,393,976
193
No. 7
Since the latest returns afford the best indi- No.8
84
85S,932
43
295,002
No.9
cation of present conditions, there is much that No 10 . . .
54
2S7, C4
-G
40
254,222
No. 11
is gratifying in the statistics of December fail- No. 1 2 . . .
1,177,945
145
ures. Commercial defaults last month numTotal. 191 fi . . . . .
. 1,252
16,745,274
1915
1,704
19,605,274
bered only 1,252, the smallest both in numbers
•30,890,162
1914
1,938
1913
31,480,961
and indebtedness for the period of any year
1,514
18,164,589
1912
1,311
back to 1911 and comparing with 1,704 in 1915
1911
1,226
17,659,602
1910
1,128
17,039,081
and 1,938 in 1914. The liabilities for the month




!

114

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,19 IT,

INFORMAL RULINGS OF THE BOARD.
Below are reproduced letters sent out from
time to time over the signatures of the officers
or members of the Federal Reserve Board
which contain information believed to be of
general interest to Federal Reserve Banks and
member banks of the system:
Bill of Lading Drafts.
(To a Federal Reserve Bank.)

I have received your letter of December 26,
asking that you be advised in what manner
you might properly handle bill of lading
drafts forwarded to you for collection by
your member banks.
This class of business has been undertaken by several of the Federal Reserve
Banks as a collection transaction. The drafts
are credited upon receipt and when paid the
sending bank is charged interest at the published rate for the time the draft is outstanding
plus the actual cost of collection.
^ F o r your information I am sending you
herewith a copy of circular issued by the
Federal Reserve Bank of Minneapolis to its
member banks, setting forth the terms and
conditions under which it accepts bill of lading
drafts for collection.
DECEMBER 29,

1916.

Agricultural and Live-Stock Paper.
(To Federal Reserve Agent3 and Banks.)

In answer to inquiries received from some
banks as to proper methods of classifying the
discount material on hand under the several
heads shown in the lower portion of Form 38,
especially under the head of "Agricultural and
live-stock paper," I would say that it is the
desire of the Board that the Federal Reserve
Banks ascertain in all cases whether the original
loan has been obtained from the rediscounting
member bank for agricultural, industrial, or
commercial purposes so that all discount items
of the Federal Reserve Bank might be reported to the Board properly classified.
In classifying the discount material the Federal Reserve Banks should in the first place be
guided by the stated purpose of the original
loan, as reported by the rediscounting member
bank. In case this purpose is stated only in
general terms, as e. g., "in accordance with
section 13," the occupation of the borrower
should be used as a guide in classification.
Thus, if John Smith, a merchant, who is also




engaged in farming, gives an unsecured note
to Henry Jones, engaged in the fertilizer business, it would seem entirely proper to report
the item as "Unsecured commercial and industrial paper," unless there is information on
hand which makes it clear that Jones was to
use the proceeds of the loan for agricultural
purposes. In case the note was secured by
20 bales of cotton, it would be proper to report
it as "commercial and industrial paper—
secured," unless the purpose of the loan was
clearly stated to be agricultural. Nor would
it make any difference in classification were
the payee of the note reported as "farmer."
In case Farmer Smith gives to Richard Jones
a note secured by a lien on 25 steers (documents
attached to note or not), it would be proper to
report the item as live-stock paper, unless
there is information to the effect that the proceeds of the loan have been or are to be used
for agricultural purposes.
It is clear that all six-month paper is to be
reported either as agricultural or live-stock
paper. Item " Total Ibills discounted," shown
in the lower half of Form 38, should, of course,
equal total of subdivision 1 (Bills discounted—
members), in the upper half of the form.
It is realized that the above explanations
by no means exhaust all possible combinations,
but it is thought that they will prove helpful
to your discount department in the preparation of the weekly statement on Form 38.
JANUARY 17,

1917.

Acceptances for Advertising.
(To Federal Reserve Agents and banks.)

A number of letters have been addressed to
tlie Federal Reserve Board, raising the question
whether a trade acceptance, which is defined in
the Board's regulations as " a draft or bill of
exchange drawn by the seller on the purchaser
of goods sold and accepted by such purchaser,"
includes a draft or bill of exchange based on the
purchase of advertising space.
The term "goods " as used in the regulations of
the Board includes goods, wares, merchandise, or
agricultural products, including live stock, and
because of the doubts raised as to whether this
term is broad enough to include advertising
space?i the Board has ruled that aTdraft or bill
of exchange drawn by a publisher/ or other advertising agency, on the purchaser of advertising space and accepted* by sucKgpurchaser

115

FEDEBAL BESEBVE BULLETIN.

FEBRUARY 1,1917.

shall be considered a trade acceptance, proOperation of the Clearing Plan.
vided the advertisement on which the draft or
The following table shows briefly the clearbill is based is for the purpose of promoting or
facilitating the production, manufacture, dis- ing operations of the Federal Reserve system
tribution, or sale of goods, wares, merchandise, | for the monthly period ending January 15,
or agricultural products, including live stock; | 1917, with comparative figures for each of the
and provided further that such advertisement j
is not illegal and is not for the purpose of pro- five preceding months:
moting or facilitating any transaction which is
interdisirict clearing system
prohibited by the laws of the State in which it j Operations of the Federal ReserveJan. 15, 1917.
Dec. 16, 1916, to
is to be consummated.
j
Each Federal Reserve Bank should take such
iNonmemsteps as it deems iiecessar}' to satisfy itself that;
jber banks
Average Average
Member
from
a trade acceptance covering the sale of adver- '
number amount; of
which
Bank.
banks
of items
tising space is of the character described in this
daily
checks
in the
handled
clearing. district. are coldaily.
letter.
lected at
JANUARY 23,

par.

1917.
Boston
New York
Philadelphia..,
Cleveland
,
Richmond
Atlanta
,
Chicago
,
St. Louis
Minneapolis
Kansas City....
Dallas
,
San Francisco.

New National Bank Charters.

The Comptroller of the Currency reports the
following increases and reductions in the number of national banks and the capital of national banks during the period from December
23,1916, to January 19, 1917, inclusive:

Total, Dec. 16 to Jan. 15..
Nov. 10 to Dec. 15.
Oct. 16 to Nov. 15.
Sept. 16 to Oct. 15.
Aug. 16 to Sept. 15.
July 15 to Aug. 15..

Banks.

New charters issued to
With capital of
Increase of capital approved for
With new capital of

39,975 !S11,479,644
43,333 23,437,362
31,468 17,143,755
17.496 9,072,701
16)993 8,057,983 j
14,133 4,153,361
20,016 13,522,793
8,174,589
9,701
15,256 6,554,245
13,910 8,152,072
13,348 5,443,251
6,304 1,617,333

13
$980.000
18

241,933
236,038
227,489
204,891
177,397
133,113

1121,814,589
1125,603,732 '
1115,001,224 i
i 97,666,107 I
i 78,559,704
i 59,301,696

402

752
521
389
1,044
468
707
943
619
522

242
313
232
492
286
416
1,429
883
1,100
1.408
'221
1,108

7,622
7,627
7,623
7,618
7,618
7,624 i

8,130
8,065
8,059
7,459
7,449
7,032

2,140,000

;
Aggregate number of new charters and
banks increasing capital
31
;
With aggregate of new capital authorized
3,120, 000

Fiduciary Powers.

The applications of the following banks for
j permission to act under section 11 (k) of the
! Federal Reserve Act have been approved since
i the issue of the January Bulletin:

Number of banks liquidating (other than
those consolidating with other national
banks)
13
Capital of same bank
1,175, 000
DISTRICT N O . 1.
Number of banks reducing capital
3
Reduction of capital
125. 000 I Trustee, executor, administrator, and registrar of stocks
and bonds:
Total number of banks going into liquidaMerrimack National Bank, Ilaverhill, Mass.
tion or reducing capital (other than those
First National Bank, Bar Harbor, Me.
consolidating with other national banks). 16
Aggregate capital reduction

], 300,000

DISTRICT NO. 4.

Trustee:
The foregoing statement shows the aggregate of
First National Bank, New Cumberland, W. Va.
increased capital for the period of the banks
embraced in statement was
3,120, 000 Registrar of stocks and bonds:
Union National Bank, Cleveland, Ohio.
Against this there was a reduction of capital
owing to liquidations (other than for conDISTRICT NO. 5.
solidation with other national banks) and reTrustee:
ductions of capital of
1,300,000
First National Bank, Appalachia, Va.
Net increase
1,820,000
DISTRICT NO. 7.
In addition to the changes noted above, two banks
with an aggregate capital of $1,050,000 were placed in the Trustee, executor, and administrator:
hands of receivers during this period.
First National Bank, Kanawha, Iowa.




116.

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

LAW DEPARTMENT.
The following opinions of counsel have been There does not seem to be any doubt, therefore,
authorized for publication by the Board since that a note or a bill the proceeds of which have
been used or are to be used in the payment for
'the last edition of the Bulletin:
advertising space is a note or bill eligible for
Trade Acceptances Based on Advertising Space.
rediscount under the provisions of section 13
The Federal Reserve Board may properly rule that a
draft or bill of exchange drawn by the seller on the pur- of the Federal Reserve Act.
chaser of advertising space and accepted by such purchaser
The question remaining for consideration is
is a trade acceptance.
whether such an acceptance, though unJ A N U A R Y 9, 1917.
doubtedly eligible for rediscount as a bill of
SIR: The question has been raised whether exchange, is a trade acceptance which is entitled
a bill drawn by the seller of advertising space to the special discount rate authorized by the
and accepted by the purchaser is eligible for Federal Reserve Board for that class of paper.
rediscount by Federal Reserve Banks under
Section 14 authorizes Federal Reserve Banks
the provisions of sections 13; and if so, whether "to establish from time to time, subject to
it is a trade acceptance within the meaning of review and determination of the Federal Rethe regulations of the Federal Reserve Board. serve Board, rates of discount to be charged
There is no provision of the Federal Reserve by the Federal Reserve llsmkfor each class of
Act which in terms authorizes the rediscount paper," and the Board, in the exercise of the
of trade acceptances or any accepted bills of authority conferred upon it, has determined
exchange other than bankers' acceptances. that a trade acceptance, entitled to the trade
That right, however, is included in the right acceptance rate, is "a draft or bill of exchange
to rediscount bills of exchange, since a bill does drawn by the seller on the purchaser of goods
not cease to be such merely because it has been sold and accepted by such purchaser."
accepted. Section 13 authorizes any Federal
If advertising space may properly be conReserve Bank to—
sidered goods—that is, as defined by the Board
"discount notes, drafts, and bills of exchange itself, "goods,wares, merchandise, or agricultural
arising out of actual commercial transactions;
7
that is, notes, drafts, and bills of exchange products '—it clearly comes within the present
77
issued or drawn for agricultural, industrial, or definition of the term "trade acceptance.
Advertising rates are ordinarily based upon
commercial purposes, or the proceeds of which
have been used, or are to be used, for such the amount of space employed, that is to say,
7;
purposes.
the number of inches sold to the person seeking
The Federal Reserve Board, in exercising advertisement. The sale of this space, whether
the right vested in it to define the character of in a publication or elsewhere, may, therefore,
the paper eligible for discount, has determined be treated as analogous to the sale of so many
in regulation A, series of 1916, that a bill of printed posters, cards, or circulars which would
exchange, to be eligible for rediscount, must come within the classification of goods, wares,
be one "the.proceeds of which have been used and merchandise, though it is probable that the
or are to be used in producing, purchasing, car- change made is based very largely on the servrying, or marketing goods, wares, merchandise, ices rendered in printing and distributing the
or agricultural products in one or more of the advertisement.
steps of the process of production, manufacWhether space sold is treated as goods,
ture, or distribution.7'
wares, or merchandise within the meaning of
Advertising has become one of the most the Board7s regulation or whether the conclugeneral and effective means of providing a sion is reached that advertising rates are based
market for goods and is clearly and reasonably primarily upon services rendered is, however,
a natural step in the process of distribution as relatively unimportant, since the Board may
contemplated by this regulation of the Board. amend its regulation if it deems this necessary




FEBRUARY 1,1917.

117

FEDERAL RESEBVE BULLETIN.

Under the provisions of the National Bank
Act no national bank can terminate its corporate existence as a national bank without
first going into liquidation, and the laws of New
York, which provide that a "national bank
may become a State bank/' contemplate the
dissolution of the national bank and provide
merely the manner in which the State corporation may organize contemporaneously with the
dissolution of the national bank. There is and
can be no "conversion77 of a national bank into
a State bank in the sense that the original corM. C. ELLIOTT, Counsel.
poration continues to exist under a changed or
To Hon. W. P. G. HARDING,
new jurisdiction. The fact that the national
Governor Federal Reserve Board.
bank is compelled to liquidate before it can
Rights of Liquidating National Bank to Accrued Dividends, i reorganize as a State bank precludes the posAny national bank which liquidates and reorganizes as | sibility of such a construction of the transaction,
a State bank forfeits its rights to accrued dividends from j The laws of New York provide that "all the
its Federal Reserve Bank. Such rights do not survive in j p r o p e r t y of t } le dissolved national banking asso-

in order to give the trade acceptance rate to
this class of acceptances.
It is the opinion of this office that the question whether such an acceptance is entitled to
the special rate given to trade acceptances is
one not of law but solely of regulation by the
Board. The Board may legally either construe
its present regulation to include such an acceptance or may amend that regulation so as
expressly to include it.
Respectfully,

f a v o r o f s u c h S t a t e b a n k e v e n t h o u g h i t i m m e d i a t e l y b e - i ".

.

i

n

- v , •>

/

v

-i N

<?

i c i a t l O n s n a 1 1 immediately (upon dissolution of
DECEMBER 28, 1916.
• the national bank and beginning of the corSra: The attached letter raises the question j porate existence of the State bank) by act of
whether a national bank which is a member of j law and without any conveyance or transfer be
the Federal Reserve Bank of New York and ; vested in and become the property of such
which reorganizes as a State bank and imme- ! State bank." This language can hardly be
diately becomes a member of the Federal Re- . construed to mean that the State bank's existserve System,, may retain the rights of the I ence is a continuation of that of the national
liquidated national bank to accrued dividends, j "bank. On the contrary, the separate existence
There are numerous decisions of the State j o f t h e t w o corporations is specifically recognized
and Federal courts to the effect, that any State \ a n d ^ i s manifestly contemplated that the State
bank which converts into a national bank under j b a n k i s i n l e § a l e f f e c t a n e w a n d independent
the provisions of the national banking laws, re- j corporation organized for the purpose of
tains the identity of the original State corpora- j taking over the assets of a dissolved corporation and is a continuation of the same corporate j t i o n - T h e f a c t t h a t t h e national banking laws
body under a changed or new jurisdiction. If, require the liquidation of the national bank
however, a State bank is forced to liquidate, before it can reorganize as a State bank
under the laws of the State in which it operates, necessarily requires that construction.
In an opinion, published on page 17 of the
before it becomes a national bank, it can not
properly be " converted" into a national bank. ; January, 1916, Bulletin, the conclusion was
It is necessary under such circumstances that it j reached that a member bank which goes into
"reorganize" as a national bank. If a State I voluntary liquidation relinquishes its right to
bank first liquidates and then reorganizes as a | accrued dividends from its Federal Reserve
national bank, the corporate existence of the \ Bank and is entitled to receive back only its
original institution terminates and a new and I cash-paid subscriptions "and one-half of one
separate corporation is organized. The fact j per cent a month from the period of the last
that the new institution may purchase all the dividend, not to exceed the book value thereof,
assets of the liquidating bank can in no way \ loss any liability of such member bank to the
legally affect the independent organization; Federal Reserve Bank.77 Upon liquidation
of the new bank.
• the member bank must surrender its Federal

becomes a member bank.




118

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

Reserve Bank stock for cancellation. The new officer of the bank in the performance of any of
State bank, if it desires to become a member the duties generally assigned to an officer,
bank, would have to subscribe for new stock they should be considered "officers77 within
and become a member under the provisions the meaning of the Clayton Act, irrespective of
of section 9 of the Federal Reserve Act. As whether or not they receive any compensation
such it would acquire no greater rights than for their services.
any other State bank becoming a member bank.
On the other hand, if they are paid any salIn the opinion of this office, therefore, a ary, fee, or compensation for their services,
liquidating national bank can not assign its whether for the performance of any special or
rights to dividends which have accrued on its routine duty of the bank, or for the benefit of
Federal Reserve Bank stock to any other their suggestions or advice in the conduct of the
corporation, because such rights cease to exist business or operations of the bank, they would
j at least come within the classification of
immediately upon liquidation.
! "employees77 under the settled decisions of the
Respectfully submitted.
courts on this subject.
M. C. ELLIOTT, Counsel.
To Hon. W. P. G. HARDING,
I If, however, the members of the advisory
; committee are not assigned and actually do not
Governor Federal Reserve Board,
| perform any duty usually performed by an
Advisory Committee of Member Banks.
i officer of the bank, and if no salary, fee, or comThe members of an advisory committee of a national i pensation is paid to them, then the mere fact
bank are not necessarily officers, directors, or employees of j that they give the bank, its directors or its
such bank "within the meaning of section 8 of the Clayton | officers, the benefit of their advice as to, the
Antitrust Act. They can not be directors unless elected
by the shareholders; and whether they are officers or em- | general policy of the bank's business should
77
ployees depends entirely on the scope of the rights and i not of itself make them " officers or employees
\ of the bank; and, as above shown, they can
duties assigned to them by the board of directors.
not be considered "directors,77 unless regJANUARY 22. 1917.
SIR: YOU have asked whether or not a person ularly elected by the shareholders. This adwho is appointed a member of an advisory com- vice, however, should be confined to quesmittee of a national bank is an " officer, director, tions of general policy and should not become
or employee77 of such bank within the meaning so specific as to make their service substantially
that of an officer employed by the directors to
of section 8 of the Clayton Antitrust Act.
A determination of this question depends so perform the specific and detailed duty of
much upon the facts of each case that it is passing on concrete questions which arise in the
7
impossible to make any general ruling on the ordinary course of the bank s business.
It is the opinion of this office therefore that,
subject. It is clear, however, that members of
under certain circumstances, the members of
an advisory committee appointed by the board
an advisory committee appointed by the board
of directors of a national bank can not act as
of directors may not be held to be directors,
7
nor be considered "directors'' of that bank.
officers, or employees of the bank within the
Section 3145 of the Revised Statutes requires
meaning of section 8 of the Clayton Act. Each
that directors be elected at the regular stockcase, however, should be carefully considered
holders7 meeting in January and not by the
on its own facts in order to determine whether
existing board of directors, except when it is the rights and powers of the advisory commitnecessary to fill a vacancy.
tee are such as to make its members, in subWhether or not they are "officers or em- stance, if not technically, officers or employees.
ployees77 would seem to depend on the scope of
Respectfully,
the rights and duties assigned to them by the
M. C. ELLIOTT, Counsel.
board of directors. If they are given authority
To Hon. W. P. G. HARDING,
to pass on loans or to act for the bank or any
Governor Federal Reserve Board.




119

FEDERAL RESERVE BULLETIN.

FESBUABY 1,1917.

SUMMARY OF BUSINESS CONDITIONS JAN. 23, 1917.
District No. 1—
Boston.

District No. 2—
New York.

District No. 3—
Philadelphia.

Good, with few j Very good
new
commit- ;
ments.

General businessCrops:
Condition.

Good.,

Outlook.
Industries of district.. Busy, with mills : Busy
well sold in ad- '
vance.
Construction, build- Increased
; Fairly busy.
ing, and engineering.
Increased
Increased
Foreign trade

Busy

Increased

Money rates

Tendency downward.

Considerable red u c t i o n and
easier tendency.

Railroad, post office,
and other receipts.

Little change

Increased

Labor conditions

Well employed

District No. 7
—
Chicago.
General business

..do.

j Generally greater

Decreasing

!
I
!
:
'

j Active

District No. 8—
St. Louis.

i Lower

Net railroad earn- Above average
ings continue to
decrease. Post
office gross receipts increasing.
Unsettled
Some unrest.

Prosperous but
quiet.

Good

Crops:
Condition
Winter wheat good Satisfactory
Encouraging
Outlook
Industries of district.. Busy; many at ca- Active
pacity.
Construction, bi u iding, Slow at this season
and engineering.

District No. 9—
Minneapolis.

Active

Decrease.

Limited by cold
weather."

Little change.

Foreign trade

Bank clearings

Increasing...

Increase.

Money rates.

Steady

Easy and
changed.

Railroad, post office,
and other receipts.

Increasing.

Increase

Increases

Good

Well employed;
wages high.*
Encouraging

Labor fully employed.
Good

Labor conditions

i

Outlook

Good

Remarks.

Outlook good except as affected :
by s i t u a t i o n |
abroad.
|




un-

Steady

Spring prospects
considered very
favorable.

District No. 5—
Richmond.
Continues
factory.

satis-

District No. 6 Atlanta.
Good.

Seasonal winter... Monetary y i e l d Fruit good.
60 per cent above
1915.
Extensive Drepa- Winter grain fair.
rations for next
crop.
| Very active.
Running full' at Good.
profitable prices.

Increase

! Continued high
I wages and full
| employment. •
M o d e r a t e l y C o n s e r v a t i v e , ! Apparently good;
b u t generally i but possibility
satisfactory.
of peace has
favorable.
added u n I certainty.
Good business ex- ;
pected to last \
for s e v e r a l
months.
;

Remarks..

Exceptionally
prosperous.

Number of per- Normal.
mits decreasing. I
Very large

Bank clearings..

Outlook.

District No. 4—
Cleveland.

Increasing
activity.
Still showing large
percentage of increase.
10 per cent increase.
4 to 6 per cent.
Some demand
in evidence for
pitching n e w
crops.
Continued
increases.

Not very active at
present.
Slight increase.
Increase.
Slight increase.

Increasing.

Fully employed
at good wages.

Fair.

Promising

Encouraging

Good.

Car and n a t u r a l
gas shortage.

General business
conditions good.

District No. 10—
Kansas City.

District No. 11—
Dallas.

District No. 12—
San Francisco.

Good.

Post-holiday lull,
all lines; good
prospects.

Active.

Fair
.....do
Active

Good.
Very good
, Generally active.. Hampered by lack
of transportation
facilities".
Less activity
Usual amount for 20 per cent increase
midwinter seaover year 1915.
son.
Exports from Gal- Increasing.
veston show increase of 127 per
cent for December over 1915.
General increase.. 21 per cent increase j 32 per cent increase
for December; 23
over month in
per cent increase
1915.
for year.
Unchanged
Rates easy; siiglit
evidence of in- Easing.
crease,
i
Increasing
Railroad: Increase i
over 1915 and \ Increasing.
above normal for j
this season. Post |
office: 17 per cent'
increase.
Better than nor- Labor fairly well Well employed;
mal lor season.
employed.
wages advancing.
Promising
Unemployment Favorable.
amoug building
trades.
Conservatism ow- 1916 set new roc- Rains assure good
ing to uncertainords; optimism
crops; anticipate
general; m u c h
ties of the fua prosperous
d e p e n d s on
ture.
year.
crops.

120

FEDERAL RESERVE BULLETIN,

FEBRUARY 1,1917.

GENERAL BUSINESS CONDITIONS.
There is given on the preceding page a summary of business conditions in the United
States by Federal Reserve districts. The reports are furnished by the Federal Reserve
Agents, who are the chairmen of the boards of
directors for the several districts. Below are
the detailed reports as of approximately January 23:
DISTRICT NO. 1—BOSTON.

Manufacturers in this district are sold far
ahead and except for danger of cancellation
in case of a break in the market for their particular commodity, have little interest in current domestic developments, being concerned
only in those international factors which affect
the more distant future.
The exchanges of the Boston Clearing House,
however, show plainly that business is being
transacted on a large scale. These clearings
for the week ending January 20,1917, amounted
to $239,287,699, an increase of about 9J per
cent, 68 per cent, and 45 per cent, respectively,
over the corresponding weeks of 1916,1915, and
1914. While a part of this increase is probably
due to the advanced cost of all products, there
is no doubt that it indicates a greatly increased
volume of business as compared with the years
previous to 1915.
Boot and shoe manufacturers are nearing
the completion of their spring and summer contracts and the next month or two will be devoted to clearing up these orders and starting
on fall and winter goods. Retailers have
placed orders heavily and at prices much
higher than those of a year ago. On the whole,
consumers are making little complaint about
the advances which they in turn must pay and
retail business is reported good, especially in
heavy shoes. Leather prices are no firmer
with domestic demand light.
Woolen and worsted mills continue busy,
with their production sold well in advance.
This is particularly true of the woolen mills.




Worsted mills have keenly felt advances in
costs of raw materials, and this is serving to
restrict their output. Wool prices are strong,
with demand somewhat quieter. Prices are
now approaching, or have passed, the high
record made in 1871-72, and there is much
diversity of opinion among brokers as to future
prices. Wool is being bought in the West on
the sheep's back at unprecedented prices for
delivery next summer.
Cotton mills are finding buyers more anxious
for quick deliveries and less inclined to make
distant future contracts than they were three
or four months ago. Mills, for the most part,
are well sold up and, therefore, are booking
little new business. The print cloth market is
dull. In fine and fancy goods production costs
are too high to allow of much cutting in prices,
especially as the long cotton necessary for this
kind of goods is still selling near the prices
quoted when the cotton market was at its
highest.
Money rates reflect the heavy excess reserves
in New York, the tendency being downward.
Although the surplus reserves of the Boston
banks for the week ending January 20
amounted to $42,314,000. this was a decrease
of about $2,800,000 from the previous week
and about the same as it was on the first of
October. The total excess reserve reported
on October 23, 1915 (the highest point recorded since the inauguration of the Federal
Reserve System), was $81,597,000, or nearly
double the present amount.
Demand money continues free at 3 per cent,
but only because the larger banks refuse to
reduce the rate below that figure, preferring to
carry their balances in New York at 2 per cent
or to invest their surplus in bankers' acceptances. Banks are charging their commercial
depositors 3J and 4 per cent, with some shading of the lower rate. Outside commercial
paper ranges from 3J to 3J per cent, and year
money is 4J per cent. Town notes have sold as

FEBRUARY 1,1917.

FEDERAL RESERVE BULLETIN.

121

low as 1 per cent, owing to the demand for those DISTRICT NO. 2—NEW YORK.
Manufacturers and distributors of goods resecurities by corporations to escape taxation.
Bankers' acceptances, 3i per cent upward unin- port a satisfactory volume of business for this
dorsed, 3 per cent indorsed. These, however, season of the year and, as a rule, they foresee
are the rates established by this bank, and the from orders booked ahead a continuance of
going rates in the open market are somewhat active trade for several months. There is evident, however, a growing disposition to exercise
lower.
Loans and discounts of the Boston Clearing greater caution in making commitments for
T
House banks on January 20, 1917, show an in- later in the 3 ear. Present indications are that
crease of 88,657,000 over last month, while de- buying, except for actual contracts and known
mand deposits have decreased 8422,000 in the requirements, will be on a conservative scale
same period. The amount "due to banks' 7 on until the outlook for fall trade, both domestic
January 20 was §149,955,000 as compared and foreign, is clearer and the trend of prices
with $121,753,000 on December 16, 1916. less uncertain.
The excess reserve of these banks increased
A wholesome • decline in speculation is apfrom $25,816,000 on December 16, 1916, to parent. Large earnings during the last year
$42,314,000 on January 20.
are shown in the annual statements of corporaIt is too early in the JGELT for building and tions and business concerns now being issued.
j
engineering statistics to have much value as | Activity is sustained in retail trade by the
compared with other years, inasmuch as one present general prosperity, the full employor two large contracts would change them ma- ment of labor at continued high wages, and the
terially. These operations in New England, usual winter clearance sales. Collections are
however, from January 1 to January 17, 1917, reported to be generally prompt and satisamounted to $8,287,000 as compared with factory.
$7,307,000 for the corresponding period of 1916
An improvement has taken place in the
and $10,973,000 for the same period in 1914, freight situation, the car shortage on January 1
the highest previous year on record.
being 59,892 cars, as compared with a shortExports from the port of Boston for Decem- age of 107,778 cars a month earlier. Comber, 1916, amounted to $21,669,660 as com- plaints arc fewer, but the congestion of freight
pared with $16,329,327 for November, 1916, and slow deliveries are still a hindrance to
and $10,805,886 for December, 1915. Imports business.
for December, 1916, amounted to $19,381,587,
The statement of the New York Clearing
an increase of $8,323,340 over November, 1916, House members dated January 20, 1917,
and $476,007 over December, 1915.
showed loans, etc., $3,441,422,000, deposits
The receipts of the Boston post office for $3,728,479,000, and excess reserves $202,December, 1916, show an increase of $66,569, 472,630. Since December 2, 1916, these figor only about 7 per cent over December, 1915. ures show the following changes: Loans, etc.,
For the first 15 days of January, 1917, receipts increased $71,324,000, deposits increased $280,were about 2 per cent, or $5,917, less than the 016,000, and excess reserves increased $161,corresponding period last year.
471,320.
Recent figures of bank clearings, railway
The Boston & Maine Railroad reports net
operating income, after taxes, for November, and postal receipts are higher than those of a
1916, as $1,079,945, as compared with $1,062,- year ago, while fewer failures are reported.
359 for the corresponding month of 1915. The
Money rates have been considerably reduced
New York, New Haven & Hartford Railroad by the rapid increase in deposits and reserves;
reports net operating income, after taxes, for commercial paper, now ranging from 3 to 3J
November, 1916, as $2,077,456, as compared per cent, is 1 per cent lower than a month ago.
with $2,047,317 for the same month last year* Call loans at If and 2 per cent show a reduction




122

FEDEBAL BESERVE BULLETIN.

of 50 per cent from the rates prevailing during
the last two weeks in December. The open
market rates for bankers' acceptances have
also declined about f per cent.
The figures of the foreign trade at the port
of New York from January 1 to 13, compared
with the corresponding period a year ago, are
as follows: Exports, $117,569,312, an increase
of $1,754,859; imports, $62,736,916, an increase
of $16,526,479.
The new British loan to be issued February
1, 1917, will consist of one and two year 5-|per cent secured notes for $250,000,000. It is
reported that the Government of Uruguay has
arranged in New York for a loan of 2.500,000
pesos at 6 per cent. A branch of the National
City Bank of New York has been opened at
Petrograd, Russia.

The year 1916 was one of comparatively low
crop production, but the prices obtained for
most of the crops were extraordinarily high.
In this district, although there was a slight
decrease in the production of the leading crops,
the prices of the products show a gain of about
44 per cent for 1916 over 1915.
The tobacco crop of Pennsylvania totaled
49,096,000 pounds in 1916, as compared to
42,390,000 pounds the previous year. Very
little of the 1915 Lancaster County tobacco
crop is now on the market. It has been selling
as high as 25\ cents per pound. Some of the
new crop has brought 22J cents, the highest
price in many years.
The following table summarizes the results
of the most important crops in Delaware, New
Jersey, and Pennsylvania, as reported by the
United States Department of Agriculture:

DISTRICT NO. 3—PHILADELPHIA.
While an excellent undertone to general
business conditions still prevails in this disCrop.
trict, the possibility of peace has caused hesi- j
tation, with one or two exceptions, in all lines j
of business, and has developed a spirit of i
caution on the part of buyers in contracting j Buckwheat
Corn
for goods in excess of immediate wants.
j Oats
Potatoes (sweet)
Potatoes (white)
Commercial failures in this district were i Rye
fewer in number last year than during the Winter wheat...
Total
preceding year, and the liabilities of the companies involved were less in amount. Reference to the following tabulation shows that
Crop.
94 per cent of the concerns failing were conducting business with less than $5,000 capital.
Bradstreet's report of commercial failures in this district,
Buckwheat
classified as to capital employed.
1916

Corn
Oats
Potatoes (sweet)
35,000 35,000 820,000 850,000 I §100,000
and
to I to i to
to
Total. Potatoes (white)
Rye
320,000. $50,000. 8100,000. | 3500,000.
winter wheat...

I

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




4
2
2
8
2
5
2
0
7
1 |
869 i

30!

96
103
101
67
-IS
50
57
65
73
S7
86
926

FEBRUARY 1,1917.

Total

Acreage
(OOO's omitted).

Yield per acre.

1916

1916

1915

Bushels.
14.3
38.6
30.9
104.3
82.6
17.4
17.8

Bushels.
21.0
37.7
37.6
149,8
86.0
IS. 7
17.5

1915

288
1,925
1,203
29
307
331
2,139

273
2,015
1,214
29
384
346
2,093

6,282

6,354

Total production
(OOOVomitted).
1916

I

1915

Total farm value
(000's omitted).
1916

1915

Bushels. Bushels, !j
r
4,122
^
74; 320
75,965
37,220
45,729
3,025
4,345
33,295
30,310
5,765 ! 6,468
38,225 ' 36,752
.

S4,571
71,857
21,304
3,401
45,378
6,392
62,845

53,187
20,221
2,993
24,972
5,465
3S.419

192,987 i 208,280

215,748

349,732

Rates for money in this district are easier
than a month ago. The call loan rate, which
reached 5 per cent before the close of the year,
has been marked down recently to 3£ per cent,
which was the ruling rate during the previous
October and November.

FEDEBAL BESEBVE BULLETIN.

FEBRUARY 1,1917.

123

The accompanying chart of the reserve condi- I esting to note the fluctuation in the excess
tion of members of the Philadelphia Clearing : reserve. During the last two years deposits
House Association during the past two years \ have increased steadily, and the excess reserve
is probably indicative of reserve conditions I now (January 20) amounts to $44,000,000.
throughout the district, and it may be inter- |
"B £ 5 £
OF- PHILADELPHIA CLEANING HOUSE: ASSOCIATION

DISTRICT NO. 4—CLEVELAND.

The only untoward circumstances in basic
conditions|during the last month have been
the continuation'of car shortage and the cutting
down of the supply of natural gas available for
manufacturing purposes. All reports received




are of the optimistic type, except in regard|to
transportation and the fuel situation. All
lines of commerce and industry seem to be
enjoying the fullest measure of activity,
and have satisfying expectations for the year's
business.

124

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

Agriculture.—Weather conditions have not
Permits
Per
Valuations.
issued.
been unfavorable, since there has been concent
Increase intinuous seasonable winter for more than a
crease
or
or
decrease.
Dec. Dec,
Dec,
Dec,
month. It is not likely that this condition has
de1916.
1915.
1916.
1915.
crease.
been injurious in any part of the district. The
sales of tobacco in the southern section of the Akron, Ohio
238
170 S648,115 8566,425
881,690
14.4
Ohio.
998,345 1,113,110
district have been at unprecedented prices, Cincinnati,Ohio.. 947 1,121 3,080,980 2,985,825 1114,765 110.3
Cleveland,
687
95,155
3.1
707
Columbus, Ohio..
111
242,340
150,340
92,000
61.1
99
and the demand continues very active.
Dayton, Ohio
141
341,278
120,195
221,083
183.9
62
59
132,805
104,523
28,282
67
Industries.—In the iron and steel trades Erie, Pa Pa... 188 268 1,199,916 2,995,596 11,795.680 i 27.0
Pittsburgh,
59.9
Toledo, Ohio
184
441,194
350,425
90,769
25.9
158
favorable conditions are reported generally. Y o u n g s t o w n ,
75
54
336,125 1121,295 136.0
214,830
The demand continues insistent, and good Ohio
Total
2,630 2,706 7,299,803 8,722,564 11,422,761 U6.3
prices 'are maintained in all branches. Glass
and pottery plants are running to capacity.
i Decrease.
Shoe factories are busy filling orders for spring
deliveries with indication of advancing prices.
Bank clearings.—The bank clearings for the
The withdrawals of Kentucky whisky were nine principal cities in the district for Janheavier in 1916 than ever known in the history uary 1 to 15, show an increase of nearly 40
of the business, and prices higher. Oil andper cen tover the same period last year. The
coal producers report splendid business to the following table gives the comparative figures in
extent that deliveries can be made. All other detail:
manufacturing lines, including automobiles,
automobile parts, tires, wearing apparel, clay
Jan. 1 to 15, inclusive.
products, electrical appliances, etc., make
Per cent
Increase.
increase.
optimistic reports.
1917
1916
Mercantile business.—Jobbers and distribu95.1
Akron, Ohio
tors report great activity, and all retailers show Cincinnati) Ohio. $10,941,000 So, 606,000 85,335,000
22. g
16,153,049
86,980,299
70,827,250
58.5
Cleveland,
unprecedented volume of business for the sea- Columbus, Ohio... 146,664,370 92,501,751 54,162,619
28.9
4,880,400
21,757,900
16,877,500
Ohio
29.4
2,139,627
9,402,956
7,263,329
son. Generally the year 1916 is characterized Dayton, Ohio
22.4
681,245
3,721,664
3,040,419
Erie, Pa
24.4
31,180,541
127,653,737
Pittsburgh, P a . . . 158,834,278
as a banner year in all branches.
24.4
4,388,384
22,347,910
17,959,526
Toledo, Ohio
Both the wholesaler and retailer report a Young s t o w n , 9,699,135 4,204,941 5,494,194
130.6
Ohio
very satisfactory condition in reference to col35.9
124,415,059
315,934,453
470,349,512
Total
lections.
Construction.—In all building lines the reMoney rates.—The end of the year witnessed
ports indicate improved feeling for the spring
season, and the demand for all classes of struc- exceedingly heavy deposits in the banks, and
tural material continues very heavy. In some for the first 15 days in January money condiparts of the district housing facilities are inade- tions throughout the district were very easy,
quate and open weather will usher in greater | the demand being light and rates exceptionally
activity in building lines. The comparison of low for prime loans. It may be stated that
valuations of building permits for the month of even up to nearly the end of the month in pracDecember, 1916, with the same month of 1915, tically all of the centers there was an unusual
in the nine larger cities of the district shows a jexcess of loanable funds.
net increase of more than 16 per cent. The
The demand for high-grade investment seollowing table shows permits issued and curities is very active, and the fluctuations in
valuations:
basic prices have been nominal.




FEBRUARY 1,1917.

FEDERAL RESERVE BULLETIN.

125

Post-office receipts.—The activities in the ! South Carolina, notwithstanding very serious
Postal Service in the nine larger cities are indi- | flood damage, and spotted crop conditions,
cated below.
; makes a remarkable showing. Her industrial
:
: products reach a valuation of $168,000,000, an
Per cent increase of $43,000,000 over 1915, and her
December, December, Increase increase
or
1916.
1915.
or
decrease. decrease. : agricultural products reach a valuation of
• $192,400,000, also an increase of $43,000,000
Akron, Ohio
S79,074
870,044
$9,030
12.8 i over the previous year.
Cincinnati, Ohio
319,024
319,905
1881
i 2
The resources of the national banks of the
Cleveland, Ohio
397,359
366,154
31,205
8.5 |
Columbus. Ohio
127,277
114,178
13,099
11.4 1
Fifth Federal Reserve District show an increase
Davton. Ohio
70,113
70,884
i'771
i 1.0
Eric Pa
32,408
29,243
3,165
10.8
458,985
Pittsburgh, Pa
420,951
38,034
9.0 ; in total resources frgm $630,000,000, Decem121,524
Toledo, Ohio
116,108
5,416
4.6
35,921
Younsjstown, Ohio
30,160
5,761
19.1 ber 31, 1915, to $733,000,000, November 17,
Total
1,641,685 1,537,627 104.058
6.7 i 1916, an increase of 16 per cent, Virginia
I leading with an increase of 23 per cent in
1
Decrease.
: totals.
The increase in wealth in the district extends
Labor conditions.—There is still an acute
to all lines—banking and production in every
demand for labor of all grades, yet on account
of the car shortage in the coal regions there is ' line of agriculture and manufacture—with a
some restlessness because of inability to con- corresponding natural increase in distribuI tion. The volume of general trade has been
tinue employed full time.
I abnormal, collections very much above the
In general the conditions in District No. 4
j average, and manufacturing has been prosare unquestionably sound and promising.
perous, particularly among the cotton mills
DISTRICT NO. 5—RICHMOND.
I which are well sold ahead at profitable prices.
Recent figures of the value of farm products
Exports, bank clearings, railroad earnings,
in the Southern States, including Oklahoma, and postal receipts have shown large increases,
give a total valuation of $4,650,000,000, which and continue in full volume at the end of the
is about 40 per cent of the entire value of farm year.
products in the whole country. This, notA number of banks in this district, particuwithstanding the fact that the South contains larly in the rural sections, have failed to realize
only about one-third of our total population. the usual percentage of profits during the pastThese products consist of cotton, cotton seed, year. This has been due, in a large measure,
corn, wheat, oats, rice and other grains, bay, to the circumstance that many of the country
tobacco, live-stock products, fruits, potatoes banks, relying on a generous revenue derived
and other vegetables, the diversification of from exchange charged on their own checks,
crops being more widespread than ever before have, because of the competition of banks
in the history of this section.
similarly situated, allowed themselves to drift
The States of the Fifth Federal Reserve into the custom of paying interest on deposits
District have produced the following values, under conditions and at rates which preclude
comparison being made with 1915:
the possibility of making safe loans at a reasonable profit. This matter is receiving consider1915
1916
ation in many quarters and it is confidently
believed that more and more of our member
§55,000,000 §87,000,000
Maryland
09,000,000 87,000,000 banks are realizing the necessity for adjusting
West Virginia...
152,000,000 215,000,000
Virginia
197,000,000 274,000,000 themselves to the more logical, and therefore
North Carolina..
148,000,000 192,000,000
South Carolina..
sounder, conditions resulting from the opera521,000,000 855,000,000
tion of the Federal Reserve System.




#

126

FEDEEAL EESERVE BULLETIN.

FEBRUARY 1,1917c

The port cities of the district have on the DISTRICT NO. 6—ATLANTA.
whole experienced better rates for loans, and
Trade conditions were satisfactory during
many of the banks at these pointsfhave found the month of January. Manufacturers have
profitable use for|bank| acceptances in the orders booked far in advance. Adding to this
financing of heavy!exports.
the splendid financial outcome of agricultural
Advance orders for agricultural implements operations, there appears little prospect of
are for greater quantities than usual, with ! the usual midwinter dullness.
requests for prompt shipment, and liberal
Bank deposits continue on the increase, a
re-orders are coming in from most sections. A ! condition that is not confined to any particular
larger acreage of ground has been turned than j financial center, but is the result of returns
last year, and preparations for increased crops i from the large volume of domestic and foreign
are well under way. There is a jgood demand j business. The steadying influence of fairer
for fertilizers at fairly profitable prices. Di- interest rates is now being felt by the banks
versification of crops is being systematically and there is less cause for complaint than
pursued and the production of home supplies ! prevailed some time ago. The Heard National
is being given earnest consideration and effi- j Bank of Jacksonville, Fla., was closed on
cient attention.
January 16, by order of its directors. It is
The lumber trade, which is probably the only | stated that depositors will ultimately be paid
line continuing to show depression, is looking I in full and that losses will fall principally upon
up, prices indicating an improvement and the j stockholders.
demands being better, shipments, however, be- | As estimated b}^ the United States Departing somewhat restricted owing to car shortage, j ment of.Agriculture, as of December 1, 1916,
Jobbing and retailing in all lines show some ! the total value of all crops (which does not
recession as usual from the extreme of Christ- j include live-stock products) for 1915 and 1916
mas trade, but are still in healthy volume, j for the States in the Sixth District was as
Prices, particularly of materials, are regarded j follows:
as dangerously high and buyers are cautious, j
The canners of the district report that goods in
1915
1916
their line are cleaned up and they are looking
8158,469,000
§158,260,000
Alabama.
for a ready market for this year's products.
60,495,000
43,122,000
Florida..,
348,924,000
234,147,000
Building continues in unusual volume for Georgia..
182)845,000
112,940,000
Louisiana
190,674,000
150,327,000
this season of the year, and there are no evi- Mississippi
145,977,000
Tennessee
j 220,888,000
dences yet of lower prices for materials, which
are still scarce.
As indicated, all these States show heavy
Cotton is still being held to some extent in
the district, but will undoubtedly be disposed gains with the exception of Alabama, where,
of at good prices before the next crop becomes notwithstanding the heavy floods and the presence of boll weevil, the value of the 1916 crops
available.
Prohibition, which became effective in Vir- is slightly more than that of the 1915 crops.
Reports from Florida put the estimate of the
ginia on November 1, 1916, does not appear to
have affected business adversely and the new | season's fruit crops at a slightly larger figure
condition of things has been accepted in good | than the previous season. The rice crop of
spirit and with veiy little friction.
j the district is estimated to be worth $11,000,000
There is throughout the district a tone of more than that of 1915. The lumber trade
conservative optimism, and apparently well- has made considerable recovery from the holidirected efforts toward development and im- day quiet. Hardwoods are advancing in price,
Drovement in all lines of endeavor are on foot. I the demand is good and movement active.




FEBRUARY 1,1917.

FEDERAL RESERVE BULLETIN.

127

Naval stores remain steady, demand good and
Industrial conditions are excellent over the
prices slightly advanced.
] entire district. Labor is fully employed at
In the wholesale dry goods market jobbers | good wages, and the production of all manuare beginning to make large shipments of spring facturing concerns is sure to create new recmerchandise. Salesmen are active in all spring ords for 1917.
Biloxi reports that the Gulf Coast industries
and summer lines and report liberal orders.
are doing well and that the sea-food packing
The outlook is very promising.
Flour business has been fairly active and houses are well supplied with orders. The
mills anticipate a constant steady demand winter visitors this season are more numerous
the balance of the season, based on the fact j and demand more luxurious accommodations
that owing to high prices southern flour dealers j than heretofore.'
are carrying minimum stocks and order freLouisiana has fared well with a total farm
quently and constantly rather than on a output of $182,845,000, as compared with
speculative basis. Higher-priced flour is pre- \ $112,940,000 for 1915. Its farmers realized
$69,905,000 more than during the previous
dieted.
The demand for tobacco has been exceed- year, a 64 per cent" increase. In this respect
ingly strong, and it is estimated that 90 per Louisiana has fared better than any other State.
cent of the crop has been sold at prices the Not only did it enjoy the advantages of higher
highest since 1897. The percentage of leaf prices, but larger crops also, particularly such
tobacco is much larger than in usual crops, staples as cotton, cane, and rice. With this
being probably 75. Present prices are from stimulus, it is natural that great encourage75 to 100 per cent higher than quotations of j ment should be held out to the farmers for the
18 months ago.
| next .year; and the promise is for still greater
The mining industry in the Birmingham • acreage under cultivation.
district is now regarded as satisfactory to the
The efforts of agricultural experts, colleges,
operators. The car shortage is greatly les- | and others are directed to prevent the farmers
sened. Consumers are in the market for ! from returning to the fallacy of the past of raisrenewal of contracts that expire in the main ! ing a single crop because prices have been high,
on July 1, the contract period. There is a j and thus by overproduction destroying or
great demand for all miners and mine laborers, | checking the growth in diversified farming so
not only in coal mining but in ore, limestone, ! marked during the year,
and quarries. Some laborers are still leaving j
the district for northern labor markets. Pros- ' DISTRICT NO. 7-CHICAGO.
pects for profits in the coal industry are better, Reports from bankers, manufacturers, and
merchants] all give evidence of great business
than for many years.
The New Orleans branch of the Federal Re- activity, and annual reports which have come
to hand show the favorable results of last year's
serve Bank of Atlanta reports:
Land values throughout this district have operations. The banks throughout the disrisen and an unusual interest is manifested re- trict have increased deposits and heavy regarding agriculture and stock raising. In the serves, and the investment of these funds is a
last 30 days more buyers have come to the serious problem, since in many instances the
front than for the past five years, all of which local demand is far short of the supply. Intends toward an increase of farm products for terest rates continue low, and some of the counthe future and a corresponding revival of busi- try banks, which ordinarily have a good outlet
ness generally.
at home for their money, are buying brokersCredit men report more satisfactory collec- paper in spite of its low return.
tions and the paying up of long-standing
Bond houses are enjoying a good volume of
balances.
sales, and authorities in this line are of the




128

FEDERAL RESERVE BULLETIN.

opinion that the investor is in a strong position
and is only waiting for some definite assurance
as to the future before making commitments.
One feature militating against a strong demand
for local securities is the large volume of foreign
Government obligations offered in this market
at attractive, interest rates. First-mortgage
farm loans are paying the lowest rate of interest
in their history, and the amount loaned per
acre is said to be the highest, caused by the
entry into this field of the insurance companies
and Eastern banks and the call from investors
for a good home security.
The railroad situation is one of the most
serious problems before the district and the car
shortage has not been alleviated to any great
extent. Comments on this subject come in
from all sides, and the coal industry claims that
it is unable to make deliveries owing to inability to secure cars to move the coal from
the mines. In certain sections the farmers
have been unable to secure cars to ship grain
to market, and the delay has brought about
slowness in collections where the payments
were dependent upon the marketing of the
crop.
The grain markets, with the exception of a
speculative flurry, have been strong. The
crop in this country was of only fair volume,
and there is some indication that the farmers
are holding back grain for-speculative purposes. Another element tending to support
the market is the Argentine grain situation
and the heavy requirements from abroad.
Live stock has come to market in a liberal way
during the past month, realizing high prices.
The cattle are generally in good condition but
the hogs are frequently light in weight. It is
reported that the supply of animals throughout the country is showing an increase, the
domestic demand for packers7 products is fair,
and the export demand good. By-products
are well taken at substantial prices.
All labor is well employed at this time and,
while a shortage is being felt, it is believed by
many that the trouble will be more acute in
the spring when those who are now working
inside resume their open-air employment in




FEBRUARY 1,1917.

such lines as building, etc. Wages are generally in accordance with the value of the services and this has brought about a somewhat
better feeling and less discontent than existed
several months ago. Reports from manufacturers and others indicate that collections
in this district are satisfactory, the different
localities naturally showing varying degrees of
promptness in meeting their obligations.
Throughout Illinois and Indiana money is
easy and payments satisfactory. Collections
in Iowa, Michigan, and Wisconsin are generally
prompt, but certain communities are suffering
from inability to dispose of their crops, due to
car shortage, while others are overstocked in
some lines. These conditions, however, are
not general, and the situation on the whole is
satisfactory.
The steel companies are rushed with work,
and the manufacturers dependent. upon them
find difficulty in securing prompt deliveries in
spite of the substantial prices paid. The high
cost of raw materials is still looked upon as a
possible deterrent to future buying, but this
has not made itself felt in the results to date.
Dry goods distributors and merchants look
forward to a good spring business, and this
year's sales to date are considerably ahead of
last year. This, however, is offset by the fact
that heavier stocks are carried, in some instances 15 to 30 per cent larger than in January, 1916. This is an element which will bear
watching. Wool is strong in price, but there
are some reactionary signs. Mills are running
to full capacity, and it is expected the high
prices and active business will continue for
some time to come. The lumber industry is
quiet, and those concerns dependent for their
supply upon oversea shipments are naturally
suffering from lack of available bottoms.
Pianos are in good demand considering the
time of year. Leather prices are not quite as
strong as last month, with the exception of
sole leather. Shoe factories are running full
time with favorable prospects.
Clearings in Chicago for the first 20 days of
January were $1,402,000,000, being $397,000,000 more than for the corresponding 20

FEBRUARY 1,1917,

FEDEKAL RESERVE BULLETIN.

days in January, 1916. Clearings reported by
19 cities in the district outside of Chicago
amounted to $283,000,000 for the first 15 days
of January, 1917, as compared with $203,000,000 for the first 15 days of January, 1916.
Deposits in 8 central reserve city member
banks in Chicago were $738,000,000 at the
close of business January 22, 1917, and loans
were $488,000,000. Deposits show an increase of approximately $36,000,000 and loans
an increase of approximately $6,000,000 over
last month.

129

In several instances it is reported that merchants are buying well ahead of their actual
needs and are being allowed to do so, but such
does not seem to be the general rule in this district. The general attitude seems to be conservative on the part of both the seller and
the buyer, and the general public, while buying
freely, is not reckless, but is beginning to think
of price before buying.
Throughout all sections of this district reports just received indicate that the last quarter of 1916 was record breaking. Those who
report say uniformly that agricultural and
DISTRICT NO. 8—ST. LOUIS.
other conditions are good, and that the present
It is the general rule that after the holiday prospect is that there will be a good business
buying business pauses for a rest. But this throughout all this year, though as large a busiyear the dullness following the Christmas sea- ness as was done during 1916 does not seem to
son has not been pronounced. This, too, in be anticipated.
spite of the fact that this district did a recordAccording to the report of the St. Louis
breaking seasonal business.
National Stock Yards, during December there
Prices on the whole are still increasing, but was a considerable increase in the receipts and
seem at last to have reached a point where shipments of live stock over the corresponding
buyers are thinking carefully over their pur- month of 1915, with the exception of sheep, for
chases. In the latter part of last year the which the market has been quiet.
public desired the best and seemed not to think
Building operations in this district have not
of price. There are now indications to the been so active during the past 30 days, and
effect that while the public is still satisfying its j reports would indicate that the activity is
desires without much hesitation, at the same i even somewhat less than it was this time a
time, before buying, it considers whether a | year ago.
cheaper article will not serve the same purpose I There have been substantial increases in the
as the more expensive one.
amounts of postal receipts for December, 1916,
It is reported that retailers are not hesitating over the corresponding month of the previous
to buy to care for their estimated ordinary year in all the principal cities of this district.
demands, but they are conservative as to this
Money continues plentiful. In St. Louis
estimate and, as a rule, not buying more. It the rate to customers, as a rule, ranges from
would seem that speculative buying has prac- 4 to 4J per cent, and in other sections of the
tically been eliminated from this district.
district it is somewhat higher.
A number of our large manufacturers and
wholesalers are not urging customers to buy DISTRICT NO. 9—MINNEAPOLIS.
Over the district, as a whole, business is ungoods, but are rather discouraging the buying
of more goods than the customer is certain dergoing the usual midwinter lull. While the
of selling. One large manufacturer explained I situation is favorable, trade is quiet.
that his concern did not want to have its cus- ! Serious disturbances occurred in the northtomers burdened with its product at the pre- I ern lumber camps in Minnesota during the
vailing high prices, with the possibility of their i early part of the month and were overcome
having to suffer a loss later on. Some houses with difficulty. Quiet again prevails and timare not selling for delivery at a date later than ber concerns are able to go ahead at their
scattered camps, many oft which were closed
May.




130

EEDEKAL EESERVE BULLETIN.

FEBRUARY 1,1917.

during the disturbances because of the in- ments. Interest rates remain practically untimidation of men and trouble caused by wan- changed, but competition is close for shorttime loans of certain liquidity. All reports
dering bands of agitators.
Industrial operations are continuing on continue to show increases in bank clearings,
about the same scale as a month ago. Labor deposits, and post-office receipts. Thirteen
is fully employed, and most concerns are en- important cities in the district show an average
increase in clearings of 44.5 per cent for the
joying a brisk business.
Clearings show some small fluctuation, but year 1916 over the year 1915. Abstracts of
remain approximately the same. Collections reports now being received from the banking
are uniformly good. Banks at country points departments of States within this district
report a fairly good demand, with rates un- show deposit increases in State banks running
changed. At the urban centers the demand is into huge figures, and there is every indication
somewhat lighter, with rates, if anything, a that these increases in all banks will continue
to expand.
trifle easier.
Agriculture.—Every State in whole or in
There has been some slight improvement in
part within this district shows a noticeable inthe car situation, but the shortage is still severe, and is hampering many lines of business. crease in the total estimated value of the
Mining operations for the coming season 13 principal crops for the year 1916 over 1915,
Varying reports are being received with
will be very active. Northern Minnesota conregard to the condition of the winter wheat,
cerns are holding their forces together as well
as they can by employing men on stripping but the promise is not far from normal. In
work and other winter operations in anticipa- some sections of the district heavy snows have
tion of a record season. In the copper-mining fallen and will be of great value, but in
districts of northern Michigan and Montana other localities precipitation has been deficient
production is still maintaining record figures, and some complaints of damage have been
and the mines expect during 1917 to make a received.
large increase over the remarkable figures of
Live stock.—General conditions, in spite of
last year.
the scarcity and high price of feed, are said
Cold weather and storms have interfered with to be favorable for the live-stock feeder.
Eecord high prices for cattle and scarcity of
traffic to some extent.
The amount of incoming wheat at the Min- feed, with attendant increased cost, has stimunesota and Duluth terminals is comparatively lated the movement of short-fed stock. Prossmall. Deliveries at country points are very perity in western sheep circles has received
light on account of the condition of the high- an additional impetus in the earlier contracting
ways. Prices still continue to hold a very of wool at unprecedented prices. There are
high level.
some indications of an increased demand for
January snows have covered the greater loans on live stock, and stockmen of this section
part of the grain territory and are an addi- are securing a greater portion of their accomtional and valuable guaranty of proper modations from local banks than for many
moisture conditions in the spring.
I years, which condition may be attributed,
in part at least, to the provisions of the Federal
DISTRICT NO. 10—KANSAS CITY.
| Reserve Act permitting the discount of six
Conservatism in banking is apparent from months paper secured by live stock.
the healthy reserves maintained by the majorMining.—Colorado's metal output for 1916
ity of institutions. While this may, in part, sets a new record for the industry in that State.
be due to lack of demand, there is unques- The value of five metals only, i. e., gold,
tionably a feeling that the uncertainty of the silver, copper, lead, and spelter, exceeded the
future demands a VJose scrutiny of invest- value of 1915 by more than 25 per cent,




FEBRUARY 1,1917.

FEDERAL RESERVE BULLETIN.

I

131

although the past season was not favorable to per cent, causing earlier orders to avoid future
the production of gold, the cost of mining per price increases.
The gradual shifting of the automobile busiounce, placers excepted, being rated at the
highest in the annals of the industry. Reliable ness from a summer business to an all-yearfigures show that the value of zinc, lead, and round line is more and more apparent, the
calamine ores produced in the Missouri-Kansas- month of December having been almost as
Okiahoma district for 1918 exceeds the total profitable as the month of June. Local auof 1915 by 34 per cent. The new year opens thorities declare that §50,000,000 worth of
auspiciously for continued prosperity in the motor cars have been distributed in this termining industry with active work in the ritory during 1916.
developing of prospects.
Cement dealers report a ver^y gratifying inOil.—Rapid advances in the price of crude crease of 15 per cent in 1916 over 1915, with
oil in the Kansas and Oklahoma fields have the outlook bright.
The wholesale furniture business showed an
continued, the quotation now standing at
$1.70 per barrel with expectation of further increase of 20 per cent in 1916 over 1915, an
increases. The present price is the highest average of 15 per cent of which was probably
ever posted in these fields. Owing to this in- due to advance in prices, and approximately 5
crease much new work is being planned, but is per cent to increase in the actual volume of
seriously delayed by lack of water for drilling furniture sold. Losses are about one-half what
they were in 1915.
purposes. Leasing is exceedingly active.
The mail-order business reports one of the
Manufacturing. —Although the manufacturing industry in this district is in its infancy and smoothest operating years in its history, havdoes not compare in volume with that of the ing at no time been hindered through the geneastern districts, the past year has shown a eral labor shortage. Salaries have been insubstantial growth, not onty in the volume of creased not less than 10 per cent, in addition to
business turned out, but in the construction a general distribution of extra compensation
of new factories and increased facilities to meet because of increased cost of living. Factory
holdings show an increase of from 35 per cent
the growing demands of trade.
Wholesale and retail.—The completion of in- to 38 per cent in all lines, despite unstable and
ventories has accentuated the unprecedented difficult merchandizing conditions.
Flour mills report a restriction of trade in
volume of mercantile business transacted during 1916. The usual post-holiday quiet has both domestic and export channels. Local
been less marked than in previous years. Col- mills are not selling anywhere near the volume
of flour they are turning out.
lections continue uncommonly good.
The average percentage of increase in values
Business in dry goods and garment lines has
of building permits issued in eight important
been of good volume, slowness of business due
to previous mild weather having since been off- cities in this district for the year 1916 over the
set by the demand produced through generally year 1915 was 24.4 per cent.
Labor.—Complaints of labor shortage a e
lower temperatures.
now uncommon, in fact, in the larger cities emClothiers have enjoyed a most successful
year. Customers are demanding better mer- ployment bureaus are unable to supply jobs for
chandise, allowing good profits in spite of in- all applicants, but this is probably the natural
result of the season and of the usual influx to
creased costs.
In implements, jobbers declare that their the cities during the winter months. There
has been some threatened disturbance among
suggestions for early shipments have met with
the laborers in the coal fields in Colorado, but
a ready response from the trade. The main
this is purely local in character. Labor concomplaint is in getting factory shipments. The
ditions may be said to be better than normal
new year started with general advances of 10 for this season of the year.




132

FEDERAL BESERVE BULLETIN.

DISTRICT NO. 11—DALLAS.

The new year has brought the usual lull in
business which follows the holiday season, and
this condition will probably continue for some
60 or 90 days, or until the spring trade opens.
This dullness has been less marked than in
previous years. Reports from all sections of
the district confirm the earlier predictions of
an unprecedented holiday trade. The year just
closed established new records in the business
history of this section.
Retail trade has been made rather active by
the inauguration by merchants of special clearance sales. Wholesalers and jobbers are preparing to start their salesmen and are stocking
up for the coming season. Collections in all
lines continue good.
Considering the midwinter season, building
operations are more than holding their own and
demand for materials is all that could be expected. The car situation, from reports received, is considerably improved over 30 days
ago, though restrictions are still placed on
shipments to northern and eastern territory.
The recent heavy snow over most of the district brought an end to a drought of some 60
days7 duration. The snow was unusually
heavy in Texas and insures a fine season for the
preparation of the spring crops. From the extreme southwestern portion of the district,
where farming is engaged in practically the
year round, the winter truck crops are reported
to be in good condition. Carload shipments of
cabbage are being made from the Brownsville
section, and within the next 30 days it is expected that the crop movement will be well
under way.
Some decrease in bank deposits is noted by
the reports made on the comptroller's call of
December 27, as compared with the November
17 call. Otherwise, the banking situation has
been about the same as 30 days ago. Demand
is light and rates easy. There seems to be a
disposition on the part of most bankers to
maintain their strong position and proceed
with some caution, to await conditions that
may develop after the first few months of the
year.




FEBRUARY 1,1917.

Clearings at the principal cities continue at
record figures and for the month of December,
1916, were $236,762,578, while for the same
period of last year they were $195,718,070, or
an increase of $41,044,508, or 21 per cent.
For the year 1916 the aggregate amount of
clearings in the cities reporting was $2,190,754,725, and for the year 1915 the aggregate
was $1,784,204,441, or an increase of $406,550,284, or 23 per cent.
The demand for lumber and building materials has been light. Dealers are taking stock
and closing their books on last year's business.
Collections are reported good. The car situation in this line is much improved. Manufacturers of brick, tile, and similar building materials advise that orders are being booked for
1917 delivery and that they anticipate a good
trade when the building season opens in about
60 days. Building permits issued in December, 1916, in the cities reporting—Austin, Dallas, Galveston, Houston, San Antonio, and
Waco—aggregate in amount $2,072,598, and
for a year ago the aggregate was $1,539,394, or
an increase of $533,204 or 35 per cent. The
aggregate amount of building permits issued in
the named cities in 1916 was $12,837,100, an
increase of $1,792,539, or 16 per cent over 1915.
Post-office receipts for the cities reporting—
Austin, Dallas, El Paso, Fort Worth, Galveston,
Houston, Shreveport, and Waco—for the
month of December, 1916, aggregate $384,638,
and for a similar period of 1915 the sum of
$329,236, or an increase of $55,402, or 17 per
cent. For the year 1916 the post-office receipts of the listed cities aggregated the sum of
$3,540,355, while for 1915 the aggregate was
$3,047,102, showing an increase in the former
year's business of $493,233, or 16 per cent.
Exports from the port of Galveston for December, 1916, were $40,488,984, while for December, 1915, the total was $17,796,672, showing an increase of $22,692,312, or 127 per cent.
This increase was made up principally of shipments of cotton to England, France, Italy,
Spain, and other foreign countries. Exports
to Mexico also showed a heavy increase over
a year ago.

'FEBRUARY 1,1917.

FEDERAL RESERVE BULLETIN.

133

Rains and snow over the cattle-raising sec- sequential. Several increases in wages rangtion of the district have made range conditions ing from 10 per cent to 50 cents per day in
good. The dry weather had caused grass to be different branches of labor over the district
short over a large part of the range territory have served to satisfy workmen and keep
and necessitated considerable feeding by cattle- down strikes and lockouts. There is no evimen. Our reports are that there have been dence but that the new year will be equally as
few losses on account of cold weather and that prosperous as the year just closed. In any
cattle have thus far gone through the winter event, business men in all lines of endeavor
well. Reports from Arizona especially are anticipate this condition and a genuine tone of
that the cattle industry in that section is un- optimism prevails in all lines.
usually prosperous. Prices are good for anything marketable, and there is demand for DISTRICT NO. 12—SAN FRANCISCO.
steers for spring delivery at advanced prices.
No material change is apparent in the busiWith the recent announcement by the Gov- ness of this district during the last 30 days.
ernment of the designation of Fort Sam Hous- Retail trade shows reaction from the activity
ton, San Antonio, as a remount station and the of the holidays. The outlook is regarded as
concentration of several thousand head of promising.
horses and mules for Army use, there should be
Money is easy and there is but small demand
an excellent demand for this class of stock.
for rediscounts at this bank. While this situaThe advance in the prices of crude petroleum tion is not without its accompanying hazard of
has stimulated business in the oil fields, and possible over-expansion, little evidence of such
conditions are reported satisfactory. The a condition is found.
movement of refined oil from Port Arthur in
It is reported that a new line of ships is to be
December was heavier than in the month pre- put in service from Seattle to the Orient, convious and has contributed to make an unusually sisting of four vessels to be built in Yokohama by
profitable season at that port. The scarcity Norwegian interests.
of coal continues to be felt and has caused a
The Southern Pacific is reported as having
heavy advance in prices. Reports from Okla- taken over the railroad now building from
homa are that a few of the mines have opened Yuma, Ariz., to San Diego, thus entering terriand it is believed that the remainder will soon tory hitherto served only by the Santa Fe.
do so. It is expected that the controversy over This should be of considerable advantage both
the wage situation will soon be settled and nor- to the Imperial Valley, through which the road
mal conditions in the mining districts resumed. passes, as well as to Arizona and San Diego. It
Failures over the district from December 16, is rumored that the Hill interests have secured
1916, to January 15, 1917, were in number 45, an entrance into San Francisco over the Newith liabilities aggregating $433,520, and for a vada-California-Oregon lino.
similar period a year ago aggregated in number I .Conditions in the lumbering industry are
35, and in liabilities $436,998, showing an in- I reported as growing more favorable.
crease in number of 10, but a decrease in I Bank clearings for 19 principal cities in this
amount of $3,778, or less than 1 per cent i district in December, 1916, show an increase of
| 32 per cent over those of December, 1915.
decrease in amount of liabilities.
The employment of labor is normal in all Spokane's percentage of increase was 45;
branches and the outlook is quite satisfactory Seattle, 39; and San Francisco, 37. Clearings
for the first half of 1917, especially in the build- | for the year of 1916 show a gain of 26 per cent
ing trades. There have been no labor disturb- i over those of 1915. Between December 31,
ances in recent months and the number of i 1915, and the last comptroller's call, December
strikes and laborers involved has been incon- 27, 1916, deposits of national banks in the




134

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

7 reserve cities of this district increased 24 this crop will be much larger than those from
per cent, while loans and investments increased last year's crop; 13,000 cars already shipped
26 per cent. Building permits for the same 19 have averaged. $700 per car.
cities in 1916 show an increase of 20 per cent
Stocks of canned goods in first hands are
over 1915.
almost sold out, and that which remains is soilCalifornia is one of the few States which have ing at very high prices. It is thought that
not adopted the uniform negotiable-instru- there will be practically no carry-over to the
ments law. This has been proposed in the 1917 season.
legislature now in session.
The total fruit crop of Oregon in 1916 is
A similar law is already in force in every reported as yielding $9,000,000 net to the
growers, which is $1,000,000 more than in
other State of this district.
The gap between production, and shipments any previous year. Two new industries have
of petroleum reached the maximum for the year recently been introduced into Oregon—the
in December, with a daily production of growing of flax and of cranberries. The cran255,983 barrels and daily shipments of 316,563 berry crop in 1916 amounted to only 2,000 barbarrels, a difference or withdrawal from stored rels, netting the grower $8 per barrel, but the
stocks of 60,580 barrels daily. The shipments crop of the coming year promises to be larger.
record a new high level. Total crude oil stocks
Live-stock conditions continue to be most
on December 31, 1916, were 44,036,190 barrels, favorable. Nevada reports the highest prices
showing a reduction of 13,110,861 barrels ever paid for lambs, averaging $5 each for the
during the year.
| 600,000 lambs sold this year.
Exports from the Pacific coast ports during
The salmon catch of 1916 for the Pacific
the month of December, 1916, show an increase coast of the United States and Alaska is reof 75 per cent over those of December, 1915, ported as 7,121,000 cases of 48 one-pound cans.
and the imports for the same mouth this year This is above the average, though below the
show an increase of 20 per cent over the cor 1915 catch. The catch was heavy in Alaska,
responding month last year.
but below normal in the Puget Sound and the
The bean, crop in California for 1916 is esti- Columbia River districts. The prices for salmated at 163,000 tons, with the prospect.of a mon have reached the highest point in years,
much larger crop in 1917. Final figures for the value of the 1916 pack being estimated at
the 1916 prune crop of the Pacific coast place $40,000,000.
it at 93,000 tons, valued at $10,000,000.
The value of the mineral production in the
The crop of rice (a new product in Califor- district for 1916 exceeded $420,000,000—copnia) is now estimated at 1,250,000 sacks from per about $285,000,000; petroleum, $49,000,000;
60,000 acres as against an estimate of 1,800,000 gold, $40,000,000; and silver, $23,000,000.,
sacks earlier in the season. This change is due Ten mines in Arizona paid $34,000,000 in diviin part to the failure of a considerable portion | dends during the past year, and the mines of
of the late plantings to mature. Sales have five western States paid over $100,000,000 in
been made at about SI.75 per 100 pounds.
dividends. Alaska's mineral production in
The apple crop of the Pacific Northwest is 1916 was over $50,000,000.
approximately 19,000 cars. The returns from




FEBRUARY 1,1917.

FEDERAL EESEKVE BULLETIN.

DISTRIBUTION OF DISCOUNTED PAPER
BY CLASSES, SIZES, AND MATURITIES.
Commercial paper discounted by the Federal "Reserve Banks during December, 1916,
totaled §63,716,300, "by far the largest monthly
total reported since the opening of the banks.
Considerable increases in discount operations
are shown for all the banks except Kansas City,
Dallas, and San Francisco, though the principal increases are shown for the three eastern
seaboard banks, where the immediate effects
of the late disturbance in the call money market
were chiefly felt and where some of the leading
local member banks for the first time availed
themselves of rediscount privileges with their
Federal Keserve Banks. Of the total amount
of paper discounted during the month more
than 70 per cent represents the share of the
three eastern banks, as against over 60 per cent
for November, 1916, and less than 3 per cent
for December the year before. Discount operations of the three southern banks, which reported over 62 per cent of the December, 1915,
total, were about 10 per cent of the total reported for the month under discussion.
Discounts of the Federal Reserve Banks for
the year 1916 totaled $207,870,800, compared
with $161,353,000 for the year 1915.
Of the total discounts for the month, $29,892,400 is represented by member banks' collateral notes secured by commercial paper;
$1,085,600 by trade acceptances (two-name
paper), and $817,000 by commodity paper.
The total of these three classes of paper, discounted at preferential, i. e., lower than ordinary rates, is $31,795,000, or about 50 per cent
of the total discounts for the month. All the
banks, except San Francisco, report advances
upon member banks7 collateral notes, though
nearly 75 per cent of the total of nearly
$30,000,000 was advanced mainly to local city
members by the Philadelphia, New York, and
Chicago banks.
Discounts for the month of trade acceptances
for the first time exceeded $1,000,000, nearly
80 per cent representing the combined share




135

of the Richmond and Atlanta I banks, including the New Orleans branch. ;The total of
two-name paper discounted during the past
year by all the 12 banks was over five millions,
over 60 per "cent of which was ^handled ;by the
two southern banks named, and over 20 per
cent by the St. Louis and Boston banks.
Only three banks report the discount during
the month of commodity paper, the total for
December being about 42 per cent below the
monthly average for the year. It is also notable that the aggregate discounts of commodity
paper for the four months since September 1,
$6,421,000, were about 38 per cent less than
the amount discounted during the corresponding period in 1915.
The number of bills discounted during the
month, 4,601, was largely in excess of the
number shown for each of the two last months,
while the average size of the paper discounted,
about $13,800, was far in excess of like monthly
averages heretofore recorded. Over 82 per
cent of the amount of bills discounted during
the month is represented by largest-size bills
(of over $10,000 each), these percentages being
much larger for the New York, Cleveland,
Philadelphia, and Boston banks. About 9 per
cent of the discounts for the month was medium-sized paper (in denomination of over
$1,000 to $5,000) as against 17 per cent the
month before and nearly 50 per cent in December, 1915. Small notes (in amounts up to
$250) constituted over 12 per cent of the total
number, though only slightly above 0.1 per
cent of the amount of bills discounted during
the month. The Philadelphia bank reports by
far the largest number of these small bills,
mainly trade acceptances.
Over 36 per cent of the bills discounted during December was 10-day paper, i. e., maturing within 10 day's from the date of discount
by the Federal Reserve Banks, these shares
being much larger in the case of the Boston,
Philadelphia, and Richmond banks. The share
of 30-day paper was 54 per cent; that of 60day paper, 4.3 per cent; and that of 90-clay

136

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,191T..

paper, 4.7 per cent. December discounts of ! cember 30, 1915, is represented by the holdi ngs
agricultural and live-stock paper maturing i of the three southern banks.
after 90 days from date of rediscount with the I Of the 7,627 member banks reported at the
Federal Reserve Bank (6-month paper) were end of the month only 314, or slightly over 4
only $444,700, compared with a monthly aver- per cent, availed themselves of their rediscount
age for the present year of over 1.4 millions of privileges during December. Considerable increases in the number of accommodated memthis class of discounts.
On the last Friday of the month the banks ber banks are shown for the Boston, New
held a total of $30,196,700 of discounted paper, York, and Philadelphia districts, where a numas against $20,499,600 about the end of No- i ber of the leading city banks initiated redisvember, and $32,371,600 on the corresponding | count operations with their Federal Reserve
date in 1915. About 22 per cent of the total j Banks during the early part of the month
discounts held, as against 63 per cent on De- I under discussion.
Commercial paper, exclusive of bankers7 acceptances, discounted by each Federal Reserve Bank during the month
December, 1916, distributed by sizes.

of

NUMBER OF PIECES AND AMOUNTS.
[In thousands of dollars.]
1

Over

S260 Over 5500 0'ver §1,000 Over 82,500 Over $5,000
to 81,000. to §2,500. ! toS5,000. to S10,000.

To §100.
'S250.

Bants.

rs

ill 1 1

Over

Total.

810,000.

Per cent.

• 1-2 ©

s ,j

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta (including New
Orleans branch)
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
*
San Francisco
Total




0.7

.1

16.1
6.5
21.1
8.6
49.7

30. Oi
8.41
50.2j
14.l!
87. 6|

38
33
91
19
133

75.5! 2911,418.2| 189,1,821.8 245 11,443.0, 87614,810.1 19.01 23.2.516,90069.5| 2611,240.0l 9911,053.7 14015,598.3 57017,978.0 12.41 28.2; 31,500
284.3 4810,927.8! 61011,917.7 13.3 18.7! 19,500
161.5! 1021 458.61
3,327.8! 172 3,653.8 3.7! 5.71 21,200'
38.6! 13
51.6 22! 205.2!
6.1 6,300
2,843.0, 607 3.852.0
225.5'1 94 3S3.9 34| 250.0

7.0 631 24.5
6612.1! 99 38.1
16.7
4.0:
5.0"! 43 17. 2i
3.7!
3.5 ! 431 18.3
51 1.6
7
!

53.3|
78.6
33.71
63.11
17.7.
43.21
7.2.!

90
102
32
111
15
47
12

160.9;
176.2;
48.61
162.5!
24.3,
78.2!
20.0.

4.8 401
1.6 1G|
9.6 65
4.5 211
,711.. 2 128

91
52
17
52
3
14
3

367.7
213.8
70.0
210.9
10.2|
51.9
12.2|

356.1
190.2|
198.5!
295. 5
5.1
24.5
6.

1

1,596.71
4,997.5.
882.7|
737.2
85. 8j
70.0i

433
477
200
366
62
192
36

2.566.1 9.4;
5,706.9 10.4
1,254.2 4.4!
1,491.5 7.9j
147.8
289.7 4.2
48.5
.8

4.0 5,900
9.0 11,900
2.0! 6,200
2.3 4,100'
•2l 2,400
, ..
.5 4,100'
.1
"
1,300

! 210 8.3 354 65.0 568!222.1 633 487. l| 723jl, 241.3| 993 4,492.0j 508J4,691.7j 612 52,508.8;4,601 63,716.3 100.0'100.0 13,80C

i

I

137

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

Commercial paper, exclusive of open-market purchases, discounted during December by each Federal Reserve Bank, distributed by States and maturities as of date of discount.
[In thousands of dollars.]
]Maturities

Total
Number Number
of
of banks
cial paper
member accom- Within From 11 From 31 From 61
After
disto 30
to 60
banks. modated. 10 days.
to 90
90 days. counted.
days.
days.
days.

Districts and States.

District No. 1—Boston:
Connecticut
Maine
Massachusetts .
New Hampshire
Rhode Island
Vermont
Total
District No. 2—New York:
Connecticut
New Jersey.
New York
Total

.

.

....

29

7,239.3

6,876.1
7.4

21.9

2

22.1

13.6
7,216.5

135.9

121.3

1

14,330.7
22.4

14,810.1

5.0

7,336.4

416.9

114.0

101.3
15.0

40.1

=

=

=

130
480

4
18

23.0
5.0
5,544.8

636.7
10,495.0

2.4
517.2

1.9
752.0

23.0
646.0
17,309.0

625

23

5,572.8

11,131.7

519.6

753.9

17,978.0

24
72
535

9
19

83.3
5,337.8

380.7
5,744.6

262.8
53.7

3i.7

16.8

6.3

758 5
11,159.2

631

28

5,421.1

6,125.3

316.5

48.5

6.3

11,917.7

68
373
299
13

1
7

1,633.8

1,911.8

1.4
52.2

2.1

7.7

9.6
3.6

1.6

1

1.4
3,639.0
13.4

753

9

1,633.8

1,943.9

61.3

13.2

15
96
81
79
146
103

3
3
16
14
4
1

96.5
16.8
157.5
417.3

244 5
12.3
126.8
120.9
1.7

153.4
12.3
201.5
174.4
12.1

520

....

.

.

South Carolina.
Virginia
West Virginia
Total

.

.

. . .

. .

41

93
55
109
22
18
92
389
316
195

353
76

Iowa
Michigan
Wisconsin
Total




320.0

35

15

.

West Virginia
Total
District No. 5—Richmond:
District of Columbia
Maryland
North Carolina

District No. 8-St. Louis:
Arkansas
Illinois
Indiana
Kentucky .
..
MississiDDi
Missouri
Tennessee
Total

75.0

48

Ohio

Louisiana
Mississippi
Tennessee
Total
District No. 7—Chicago:
Illinois

3

399

District No. 3—Philadelphia:
Delaware
New Jersey. .. .
Pennsylvania
Total
District No. 4—Cleveland:
Kentucky.

District No. 6—Atlanta:
Alabama
Florida
Georgia .
. . . .

55
67
156
56
17

::::::::::

.

3.5

3,852.0

2.0

690.1

506.2

553.7

127.0
111.4
82.4
8.8

167.5
90.3
242.0
464.2

47.5

80.9

9.6

436.9
317.8
658.2
973.0
15.0
165.2

377.1

1,044.9

9.6

2,566.1

75.3

4*

4.5

66.6
116.1
333.8
500.0
15.0
22.7

54

80.3

1,054.2

13

209.0

4.810.1

7
22
1

2
5

269.7
1.0

64.7
10 2

2.3

58.5
19.2
91.8

26.9
49.9

5,157.2
54.4
484.1
11 2

5,081.8

152.5

169.5

81.1

5,706.9

3.6
6.0

5.0
8.0

2.0
2.9

34.7

9.3

14 9
43.6

1.0

0
43

157
61

...

494 4
41.4
525.6
914 8
1,873.8

75.8

67

.

1.3
2.2

2,098.5

S

52

.

3,653.8

2.0

12
3
1
14

16

992

..

38.5
200.0
1,860.0

1.6

222.0

67
17

3
1

27.2

81
20

6
2

520.0
128.3

2 5
1.2
271.2

8.6
153.4

19.1
35.0

ie.i

470

19

675.5

284.5

167.8

101.0

25.4

g

3.5

87

30 7
12 1
565.0
587.9
1,264.2

138

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

Commercial paper, exclusive of open-market purchases, discounted during December by each Federal Reserve Bank, distributed by States and maturities as of date of discount—Continued.
[In thousands of dollars.]
Maturities.
Number Number
of banks
of
member accom- Within
banks. modated. 10

Districts and States.

**M

!

;

District No. 9—Minneapolis:
Michigan
.

•.-.-. » .

..

. . .- .
........

....

Total

-

. . .

31

1
4
1
2

943

Total
District No. 10—Kansas City:
Colorado
Kansas
.
Missouri
NebraskaNew Mexico
-.
Oklahoma
Wyomin" 1

763.9
25.0

122
224
54
193
9
305
36

. . . .

1
18
7
5

764

Montana
North Dakota
South Dakota
Wisconsin

32
285
78
155
125
89

:

9

District No. 11—Dallas:
Ari7OIl£L

- .

••-•-.---•-.-....----•.-----

New Mexico

Total

ciai pauer
F
rom 11 From 31 From 61
After
dis-'
to 90
to 60
90 days. counted.
days.
clays.
da!£

10.0
415.5

10.0
43.7

80.9

20.0
1,304.0

.7
15.1

6.0
25.4

50.9
44.4

82.6
84.9

788.9

441.3

85.1

17fi.2

1,491.5

.S

1.0

6.3

fi. 7

12.9

30.4
3.4
.5

50.0
38.5
3.4
20.1

50.0

. .....
35.8

1

50.0

36.6

i

35.8
19.2

7.7

34.3

147.8

6

11
28
33
542

Total

i$

20.0

75.6

57.0

32.8

104.9

289.7

620

Texas

16

20.0

75.0

57.0

32.8

104.9

289.7

16.1

1.8

48.5

16.1

1.8

48.5

District No. 12—San Francisco:

1
6

"Nevada.
Oregon
XJ.tah
"\Vashincrton

.. . . . . .
..........................
•

. -

Total

263
58
10
82
23
78

6

15.8

14.8 I

521

California

6

15.8

14.8

i

RECAPITULATION.
[In thousands of dollars.]
Maturities
Districts and cities.

n

No
No
No
Xo.
No
No
No
Nn
Ko.
No
No.

2 New York
3 Philadelphia
4 Cleveland
5—Richmond
6 Atlanta
7 Chicago.
8 St Louis
Q Minneapolis
10—Kansas City
11 Dallas
12 San Francisco

Total
Per cent
Total for January December, 1916
Total for January-December, 1915




Number Number
of banks
of
member accom- Within
banks. modated. 10 days.
399
625
631
753
520
389
992
470
764
943
620
521
7,627

Total
commercial Per cent.
paper
After
90 days. discounted.

From
11 to 30
days.

From
31 to 60
days.

From
61 to 90
days.

7,216.5
11,131.7
6,125.3
1,943.9
690.1
1,054.2
5,081.8
284.5
788.9
36.6
75.0
15.8

121.3
519.6
316.5
61.3
506.2
377.1
152.5
167.8
441.3
7.7
57.0
14.8

135.9
753.9
48.5
13.2
553.7
1,044.9
169.5
101.0
85.1
19.2
32.8
16.1

6.3
1.6
3.5
9.6
81.1
25.4
176.2
34.3
104.9
1.8

314 23,110.4
4.1
36.3

34,444.3
54.0

2,743.1
4.3

2,973.8
4.7

444.7
.7

63,716.3

45,850.8

69,196.8

34,425.9

41,578.6

16,818.4

207,870.5

57,837.4

57,322.4

19,684.0

161,353.0

35
23
28
9
41
54
43
19
31
9
16
6

7,336.4
5,572.8
5,421.1
1,633.8
2,098.5
80.3
222.0
675.5
50.0
20.0

26,509.2

14,810 1
17,978.0
11,917.7
3,653.S
3,852.0
2,566.1
5,706.9
1,254.2
1,491 5
147.8
289.7
48.5

23 2
28 2
18 7
5.7
6.1
4.0
9.0
20
23
.2
.5
.1
100.0

FEBRUARY 1,1917.

189

FEDERAL RESERVE BULLETIN.

Member banks1 collateral notes discounted by each Federal Reserve Bank from Sept. 11, 1916, date when first special rate
became effective, to Dec. 81, 1916.

December,
1916.

Federal Reserve Bank.

Total Sep- !
tomber- '
December,
1916.

$1,227,100
7,484,500
10,366,800
2,000,000
2,427,500
790,000
4,242,500

$1,882,100 !
7,939,500 !
13,644,300 j
2,385,000 !
3,483,500 |
1,512,350 |
5,417,500 !

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta (including New Orleans branch)
Chicago

! Total Sep. ,
j December, \ tember|
1916. ! December,
1916.

Federal Reserve Bank.

I

St. Louis
Minneapolis
KansasCity
Dallas

§667,500 , 31,302,500
543,200: 1,056,000
85,800!
115,800
57,500 |
287,500

Total

I 29,892,400

:

39,026,050

Trade acceptances discounted by each Federal Reserve Bank from Sept. 12, 1915, date of first discount to Dec. 31, 1916.

Federal Reserve Bank.

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta (including New Orleans
branch)
Chicago

Dec. 31,
1915.

Total for
1916.

1916.

4,900
450,500

8,200
1,400
218,800

1,007,100

643,000

$167,800

St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

1,591,000
8) 200

T

T>PP <n°

December.

1915.

$429,200
166,600
74,800
175,200
1,507,200

$113,900
§5,700

Federal Reserve Bank.

87,800 !
160,800 I
74,200 I

Total..

1,958,800

Total for
191G.

859,200
41,100

S626,400

1,085,600

5,113,500

41,700
190,900
2-18,900
53,400

Commodity paper discounted by each Federal Reserve Bank from Sept 8, 1915, date of first discount to Dec. 31, 1916.

Federal Reserve Bank.

Total to
Dec. 31,
1915.

December,
191G.

Total for
1916.

Federal Reserve Bank.

§237,500 | 87,026,100 | KansasCity
Dallas
393,500
7,500,400 San Francisco
186,000 I 1,534,000 ,,
:
19,800 ij
Total
i
:]

Richmond
$2,881,400
Atlanta (including New Orleans
7,032,300
branch)
99,800
St. Louis
25,300
Minneapolis

Total to
Dec. 31,
1915.

December,
1916.

Total for
1916.

$360,000
225,200
148,000

§239,100
37,200
•
,
,
j 10,315,100 j $817,000;
i
l
l

16,813,500

Commodity paper discounted by each Federal Reserve Bank during 1916, distributed by classes.
i

Atlanta j
(including
New
| St. Louis. MinneapoRichmond.
lis.
Orleans )
branch), j

Class.

4

Beans
Bran
Coffee
Cotton
Cotton seed
Flax
Hay
Hops
Maize
Oats .
Oil
Peanuts
Prunes
Raisins
Sugar...
.
Wheat
Miscellaneous
Total




— i

Dallas.

San Francisco.

146 666 !

26,400
24,000

$500
6,800
125,000
14,420,300
9,500
3,000
140,000
400
64,200
2,900
29,200
387,500
47,100
5,000
7, G O
O
31,000
1,037,300
496,200

148,000 |

16,813,50,

:

j

8218,200

i

$300

§3,666!
. . . . . . . . . . . . i . . . . . . . . . . . .

400 I

64,200

. . . . ] . . . .

1

2.onn ;

. . .

29,200 1
. .

41,100

§360,000

6,666 ii
'

7,000

20,500
5,000
7, GOO

3i,666 '

n

6,100
7,026,100

994 100 !
6,100 .

Total.

-

$500 j
6,800 '
125,000 i
0,148,900 $1,074,000
9^500 ! . . . . . . . . . . . .

§6,978,900

Kansas
City.

4G0,000

7,500,400 | 1,534,000

16,800
19,800

360,000

225,200

140

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

Discounted paper held by each Federal Reserve Bank on Dec. 29 y 1916, distributed by maturities.
Maturities.
Federal Reserve Bank.

Boston
Bston
"
" "
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
Per cent
Amounts held on Dec. 30,1915
Per cent




Within 10
days.

11 to 30
days.

31 to 60
days.

$2,425,700
' 422,100
2,325,700
850,200
819,100
962,000
778,900
461,800
592,000
80,400
153,400
55,600

8899,700
5,372,300
500,300
141,600
843,300
2,305,900
526,600
378,000
129,700
162,500
94,200

§356,800
1,134,800
204,000
68,500
828,300
761,300
666,300
205,900
442,600
105,700
150,500
81,400

9,926,900
32.9

11,793,500
39.1

5,006,100
16.6

5,229.9
16.2

9,011.7
27.8

9,354.2
28.9

439,400

61 to 90 • After 90
'

$44,500 '.
139,000 .
25,200 :
19,000 i
377,000
890,600 i
406,200
99,100 !
148,000
97,100 i
161,700 "
.
15,900 i

$6,300
3,000
11,000
36,600
258,900
17,400
413,900
103,300
190,700
5,800

Total.

$3,726,700
7,068,200
3,061,500
1,082,300
2,878,700
3,089,900
4,416,200
1,310,800
1,974,500
516,200
818,800
252,900

8.0 !

1,046,900
3.4

30,196,700

4,693.4 :
14.5 i

4,082.4
12.6

32,371,6
100.0

2,423,300 :

Per cent.

12.4
23.4
10.1
3.6
9.5
10.2
14.6
4.4
6.6
1.7
2.7
.8
100.0

141

FEDEBAL SESEEVE BULLETIN.

FEBEUART 1,1917.

ACCEPTANCES.
Acceptances bought in open market and held by Federal Reserve Banlcs as per schedules on file on dates specified, distributed
by classes of accepting institutions.
[In thousands of dollars.!
Bankers' acceptances.

Date.

1915.
Feb. 22
Apr. 5
May 3
Juno 7
July 3
Aug. 2
Sept. 6
Oct.4
Nov.l
Dec. 6

S

1916.

Jan. 3
Jan. 10
Jan.17
Jan. 24
Jan. 31
Feb. 7
Feb. 14
Feb. 21
Feb. 28
Mar. 6
Mar. 13
Mar. 20
Mar. 27
Apr. 3
Apr. 10
Apr. 17..
Apr. 24
May 1
May 8
May 15
May 22
May 29
Juneo

Bankers' acceptances.

Trade
accept- Total
Nonmember banks.
ances
bought acceptin open ances.
ber
Total.
Trust
market.
banks. compa- State Private
banks. banks.
nies.

93
3,653
5,038
5,242
4,342
5,350
6,087
9,000
8,477
12,311

7,820
8,189
4,516
5,267
5,407
6,305
4,898
4,331
5,172

15,494
16.492
16,908
16,348
15,834
15,681
17,581
17,661
17,436
17,182
20,323
20,563
21,128
21,000
22,239
22,135
23,566
24,875
25,058
26,633
26,639
26,104
24,080

7,160
8,057
7,655
8,070
8,174
7,876
7,985
8,194
8,755
8,670
10,032
11,280
12,864
13,573
14,864
15,028
15,196
15,400
15,750
15.372
16,490
16,541
17,029

20
20
132
253
275

110
110
192
161
352
472
343
204
396

93
11,593
13,347
9,960
9,770
11,129
12,884
14,373
13,265
18,154

93
11,593
13,347
9,960
9,770
11,129
12,884
14,373
13,265
18,154

362
370
425
363
356
336
347
392
408
408
470
408
411
473
476
564
584
585
671
773
690
690
644

822
938
L,010
L,441
]L,510
L,456
L,851
L, 841
L,841
1,781
L,631
2,467
3,078
3,262
5,405
3,442
3,504
3,430
3,493
1,960
3,038
5,895
7,007

23,838
25,857
25,998
26,222
25,874
25,349
27,764
28,088
28,440
28,041
32,456
34,718
37,481
38,308
40,984
41,169
42,850
44,290
44,972
47,738
49,857
49,230
49,360

23,838
25,857
180 26,178
180 26,402
180 27,054
489 25,838
528 28,292
460 28,548
460 28,900
462 28,503
546 33,002
678 35,396
629 38,110
722 39,030
874 41,858
1,321 42,490
1,438 44,288
1,477 45,767
1,518 46,490
1,635 49,373
2,006 51,863
2,037 51,267
2,208 51,568

10
10
10

•

Date.

Trade
accept- Total
ances
bought accoptMember
Total. in open ances.
market.
banks. c Trust - State Privato
o m p a banks. banks.
nies.
Nonmember banks.

1916.
June 12
June 19
June 26
July 3
July 10
July 17
July 24
July 31
Aug. 7
Aug. 14
Aug. 21
Aug. 28
Sept.4
Sept. 11
Sept. 18
Sept. 25
Oct.2
Oct. 9
Oct. 16
Oct. 23
Oct. 30
Nov. 6
Nov. 13
Nov. 20
Nov. 27
Dec. 4
Dec. 11
Doc. 18
Dec. 25

27,354
32,011
33,155*
32,989
34,144
40,497
41,514
41,395
39,695
41,536
43,058
43,061
41,413
39,766
42,533
40,309
37,798
36,957
37,655
39,694
37,993
37,770
39,494
43,173
46,118
47,748
55,671
61,029
64,975

19,209
19,490
18,722
18,921
20,201
22,309
22,327
21,437
19,060
18,144
19,849
20,716
20,356
20,747
22,105
22.636
21,'782
23,195
23,684
26,281
27,951
29,474
28,434
31,237
32,527
33,232
35,466
36,220
35,874

622
560
552
471
620
593
610
724
738
754
736
734
726
760
743
711
712
705
784
867
733
1,014
1,383
1,670
1,704
1,630
1,635
1,514
1,539

7,865
9,067
11,009
11,830
11,827
13,193
12,977
13,619
13,940
13,443
12,623
12,673
12,491
11,531
11,443
10,795
9,944
10,251
10,230
10,718
11,829
12,147
12,802
13,854
14,636
16,069
17,291
17,349
18,113

55,050
61,128
63,438
64,211
66,792
76,592
77,428
77,175
73,433
73,877
76,266
77,184
.74,986
72,847
76,824
74,451
70,236
71,108
72,353
77,560
78,506
80,405
82,113
89,934
94,985
98,679
110,063
116,112
120,501

2,310
2,054
1,958
3,422
3,052
3.685
3,651
3,722
4,225
4,387
3,748
3,815
3,673
2,676
2,673
2,796
2,306
2,048
1,897
1,723
2,468
2,378
3,425
3,721
3,979
4,487
4,896
4,634
4,500

57,360
63,182
65,396
67,633
69,844
80,277
81,079
80,897
77,658
78,264
80,014
80,999
78,659
75,523
79,497
77,247
72,542
73,156
74,250
79,283
80,974
82,783
85,538
93,655
98,964
103,166
114,959
120,746
125,001

1917.
Jan.l
Jan. 8
Jan. 15
Jan. 22

66,803
60,066
59,710
56,334

34,625
32,467
30,691
26,286

1,502
1,325
1,245
1,146

18,224 121,154
16,915 110,773
15,862 107,508
14,119 97,885

4,585
4,249
4,386
4,102

125,739
115,022
111,894
101,987

Acceptances held by each Federal Reserve Bank at close of business on Fridays, Dec. 29\ 1916, to Jan. 19, 1917, distributed
by maturities.
.
[In thousands of dollars.]
Acceptances maturing—
Within 10 days:
Dec. 29, 1910
Within 15 days:

New
PhilaRich' Boston/ York. idelphia. Cleve- i mond.
land. I

Atlanta.

Chicago.

0,114

2,560

1,953

1,515

G79

1,538 !

Jan. 5,1917
tf" Jan. 12, 1917
P Jan. 19, 1917

1,052 j 7;096
1,139 i 8,101
1,673 ! 8,477

3,850
3,055
1,320

1,805
1,859
1,899

773
1,108
1,435

901
9G5
1,218 !

1,974 I
1,008 I
1920
1,920 |

From 11 to 30 days:
Dec. 29, lOlf.
From 16 to 30 days:

1,598 , 10,359

4,105 i 2,185

2,301 i o, ozo
3,029 :
3,442 ! 7,203
7,224
G,358
5,598 ,
4,330 !

Jan. 5, 1917
Jan. 12,1917
Jan. 19, 1917

From 31 to G days:
O
Dec. 29,191C
'
Jan. 5, 1917
rc Jan. 12,1917
'
Jan. 19, 1917
From 61 days to 3 months:
Dec. 29, 1910
Jan. 5, 1917
Jan. 12, 1917
Jan. 10,1917
Total acceptances held:
Dec. 29,191G
Jan. 5, 1917
Jan. 12,1917
Jan. 19,1917




649

1,084
1,513
1, G94

108

799
85G

624
366
449 I

423 i 1,085
523 I 3,208
875 I 3,226

21,653
24,304
25,042

725 j 3,413

29,720

809 I 3,237
079 1,972
206 1,200

24,855
22,382
19,577

748
570
402
745 !

3,857 I
3,054 ;
4,074 I
5,101 i

42,706
42,082
42,085
44,256

020 •
489 !
510
207

2,000 !
~ '"' "
2,464 i
2,099 j
1,097 :

34,GS2
"~ " *
32,617
""
27,208
19,572

G40 j 555

1,320
2,088
2,222

1,899
1,329
1,087

965
81G

1,075
950
400

1,920 I 1,094
2;271 !
1,928 ! 751

597 I
739 !
736 i

3,897
4,459
3,432
3,983

3,081
3,100
3,007
3,037

363
513
428
573

1,734
1,141
1,243
1,261

3,400 ;
3,233 ;
3,111 i
3,270

3,254 ' 10,458
3,500
9,354
4,001
7,086
4,221
4,638

3,040
2,504
2,420
lJOGS

2,G52
3,027
2,356
1,004

1,108
1,143
1,108
1,150

692
1,045
928
1,171

2,942
2,992
2,385
2,910
2,291 : 2,093
1,984 • 1,785 I 2,039.
1,065
1,220
1,006

41,457
38,417
35,109
31,797

13,602
12,199
11,001
9,493

9,871
9,891
9,151
8,227

3,694
3,394
3,400 !
4;138 |

4,554
4,102
4,086
4,110

12,725
13,277
13,827
13,066

10,212 •
10,043 •
8,974 I
8,189

6,784
7,132
0,785
0,423

Total.

731

2,333 I 1,650 !

1,005:
2,200 |
2,084
2,972 !

Dallas.! Francisco.

896 j

708 I 1,449

6,125
14,526
13,439
12,779
12,557

I San

I<
Minne-!
^'
St.
Louis. a ? o l i s - | C i t y .

450
503
380

671
1,000 I
872
3,017 :
1,599
3,068
3,657
2,104

6,128
G,290
0,645
6,475

1,933
1,065
820
219
3,890
3,011
3,294
3,212

I

2,201
2,351
2,174
2,033

2,503

12,379 127,497
11,040 121,807
11,413 115,979
10,684 i 108,447

142

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917..

Distribution by maturities of acceptances bought in oven market by each Federal Reserve Bank during calendar years 1915
and 1916.
[In thousands of dollars.]

Acceptances maturing—

New
Boston. York.

Within 30 days:
Calendar year, 1915
6 months ending June, 1916....
July,1916
August, 1916
September, 1916
October, 1916
November, 1916
December, 1916

Philadelphia.

j Atlanta.
Chica- ; St. | Minnc- Kansas
Cleve- j Rich- j
land.
!
go.
Louis. : apolis. City. Dallas.
I branch).

j

695
4,552
754
983
634
231
1,171
1,997

101
322
402
41
20

579
905
400
1,781

710

1,258 ! 11,444

10,322

1,500

2,137 | 2,377
1,433 j 5,063
4 i 1,169
"
87 1,101
723 1,227
100
1,233
1,943
3,823
'887
2,343

1,464
4,016
739

746
1,267
406
855
489
846
550
881

961
62
46
749
375
16
272

11,566

5,294

2,481 I

2,006

6,095

3,963

5,406
10,959
3,556
2,069
4,023
3,981
3,276
3,370

2,116
5,472
2,855
1,257
2,278
2,344
2,173
4,371

250

585
102
1,935

46
2,126
404
666
1,190
1,977
979
1,062

4,810
5,389
1,948
1,390
1,696
2,772
1,689
4,069

1,324
4,321
2,036
1,335
1,561
1,781
1,578
3,332

Total for 12 months, 1916.... 45,928 I 96,003 31,234 20,750
Total acceptances bought:
14,105 ! 25,834 7,565
2,963
Calendar year, 1915
7,061
6 months ending June, 1916.... 25,832 • 44,226 19,527
3,663
1,395 " """
14,368 5,049
July,1916
2,153
4,340 8,086 3,661
August, 1916
6,591
2,787
4,673
September, 1916
3,190
2,280 11,793 5,962
October, 1916
2,728
8,630 18,620 5,670
November, 1916
December, 1916
, 5,213 17,829 6,662 5,962

3,157

8,404

18,953 | 15,944 j 10,929

250
1,540
1,205
446
2,827
960
368
3,967

72
2,657
412
916
2,146
2,320
1 967
2,082

52,363 ' 123,406 53,122 27,544
I

11,313

12,500

Total for 12 months, 1916...
After 30 but within 60 days:
Calendar year, 1915
6 months ending June, 1916 ..
July,1916
August, 1916
September, 1916
October, 1916
November, 1916
,
December, 1916.....

Total for 12 months, 1916.... 5,177 ! 15,
After 60 days, but within 3 months:
11,47J 22;211
Calendar year, 1915
6 months ending June, 1916... 24,049 34,435
1,391 11,161
July,1916
4,062
5,508
August, 1916
3,787
September, 1916
2,180 10,405
October, 1916
6,205 13,842
November ,1916
4,254 I 13,712
December, 1916

Total for 12 months, 1916




609

1,934
1,750
1,223
1,295

7
270

156 !
133 j
480 I
300

250
1,760

617
253
398
552

5,675

2,090

2,013

653

19
261
8
250
339
90
590

816
1,840

374
1,151 |
294 !
382
887
441
413
395

216
299
338
392
601

238
297

103 |

"ill

496

231

21
750
202

65

590

657

2,132

38,399

191

183
459
311
187
138
27
226

34
444

750
2,299
619
759
474
1,009
387
784

9,057
19,380
4,219
4,97S
8,179
6,82&
9,431
10,588

2,545

1,348

836

6,331

63,601

1,219
2,500
1,262
827
702
1,035
1,052
3,551

1,536
1,635
787
248
942
608
2,033

500
405
776

2,419
5,847
2,628
1,349
2,068
4,981
2,814
4,625

52,808
96,733
27,479
19,750
24,790
33,351
34,723
47,090

6,253

2,049

24,312

283,916

64,845
127,66636,50a
28,447
37,087
40,894
48,567
66,752
385,916

50

ill:

149
227

31 !
582

871 |
148 I

5,782
7,362
3,277
1,752
2,867
2,920
2,124
6,759

1,801 !
5 472 |
2,401 |
1,717
2,448
2,222
1,991 i
4,309

27,061 I 20,560

Total
for
system.

2,980'
11,553
4,805
3,719
4,118
717
4,413
9,074

\

*402"!

849 I
362 j

San
Francisco.

1,455
3,151
1,334
1,053
1,032
1,373
1 444
4,152

61
539
152
468

1,788
2,103

50

1,098
463
1,137
635
2,755

649
227
726
439
1,451

3,230
8,685
3,399
2,576
2,542
6,011
3,951
5,611

13,539 I 8,191

3,542

32,775

FEBRUARY 1,1917.

143

FEDERAL RESERVE BULLETIN.

Short-term investments (municipal

warrants) held by each Federal Reserve Bank at dose of business on Fridays, Dec. 29,1916,
to Jan. 19, 1917, distributed by maturities.
[In thousands of dollars.]

New PhilaRichBoston. York. delphia. Cleve- mond.
land.

Warrants maturing—

Within 10 days:
Doc. 29, 1916. . .
Within 15 days:
Jan. 5,1917
Jan. 12, 1917
Jan. 19,1917..
From 11 to 30 days:
Dec. 29, 1916
From 16 to 30 days:
Jan. 5, 1917
Jan. 12, 1917..
Jan. 19, 1917
From 31 to 60 days:
Dec. 29,1916

74

695
537
77

152

60

255
145
163
323

335
360
254
249

56
56
25
5

366
187
76

83
82
25

278
117
117
117
117

195
1,186
1,186
2,127

82
82
336
1,343

40
53
37

25
50
25

466
272
67

2,008
1,586
1,177

391

35

40

50

466

2,101

76
76
25

78
75
40

38
50
25

25.

67
67

1,870
1,058
417

182
114
145
145-

76
25
33
34

91
55
49
338

63
25
6

2
2
2

67
41
78
78

1,645
1,086
1,848
2 146

95
406
436
436

34
59
25
25

338
322
304

6
30
30
30

50
50
50

129
113
76
101

2 226
1,820
1,638
1,100

4
2
5

489
106
868
868

75
50
304
404

25
25
25
25

55
25
76
76

75
25
76
76

75
351
355
330

1,413
1,951
3,730
5,756

402
400
400
402

167
46
451
451

972
1,988
1,988
2,949

465
274
528
1,480

2,685
1,867
2,040
1,528

76

°

1,587

10
35
75

2
2

913
50
146
82

890
831
806
700

Jan. 5,1917...
J a n . 12, 1917
J a n . 19, 1917 .

52
197
854
918

171
51
51
51

Over 90 days:
Dec. 29, 1916
Jan. 5, 1917...
Jan. 12, 1917
Jan. 19, 1917
Total:
Dec. 29, 1916

30
56

^03
308.
290
120

J a n . 5 1917 . .
J a n . 12,1917
J a n . 19, 1917

442
365
371
131

81

152
152
57
152

879
52

77
177
290

_ San
Total
St.
Minne- Kansas
lor
Louis. apolis. City. Dallas. Fran- system.
cisco.

408
1
1
278

61
61
61

1,326
921
1,682
1,531

576
576
625
564

570
488
488
478

164
164
215
174

127
127
178
153

737
1,039
848
576

8,975
8,736
9,859
10,596

720

76
76

195
125
10

From 61 to 90 days:
Dec 29, 1916

Chicago.

833

60
61
76

187

J a n . 5, 1917
J a n . 12, 1917..
J a n . 19,1917

Distribution

191

132
177
196

Atlanta.

278
278
61

61
61
61
61

2

by sizes of acceptances bought in open market by all the Federal Reserve Banks during the month of December, and
for the 12 months ending Dec. 31, 1916.
T o §5,000.

j

T o §10,000.

T o S25,000.

Acceptances bought in
open market.

T o S50,000.

T o £100,000.

Over §100,000.!

Total.

8 I

B
D e c e m b e r , 1916:

Bankers'acceptancos..
Trade acceptances

Total
Percent
November, 1916
October, 1916...
September, 1916.
August, 1916
July, 1916.
June, 1916.
May, 1916.
April, 1916.
March, 1916
February, 1916
January, 1916

805*6,352,204 1,321821,031,093 40i.SU>, 543,350 131 §10,087,005
324,228
443,0181
3
114,394!
34J 280,870 21
13511,011,833
812 2,349,906j 839 6,(539,0741,342 22,074,111 404i 10,602,7501
33.1
!
24.9 . . . J
16.5
3.6!
§2,285,434
24t\
64,472

288
207'
1941

847,351
941,9081
789,675.
546,959'

Total acceptances
b o u g h t during 12 !
months ending Decem-1
bor, 1916
]5,2:
127-15.203,153 5,02GJ40,674,810

15,614,427!
12,333.597!
11,194,706 :
7,835,547!
12,830,111
13,739,638
5,960,425
5,420,116
6,578,432
3,548,32(5
4,113,720

271,
205i
165
131 i
*°=
185
191 j
108
94!
109
49i
47

11,290,050
12,142,475
6,835,609
5,340,003
7,662,059
8,209,613
3,262,880
3.896,184
4,539,071
1,830.851
1,857,477

1
40 §7, 322,909| 3,486. ?64,827,G01
691,8841
91 a 1,924,866
5

45

6.772,7411
8,844,327
2,963,522
0,990.915
7,197,162|
6,830,652
(5,721,6101
5, 744,10(5
5,065,021 29 5,286,083
6,763,220 37 5,913,336
fi2| 5,f.98,417 23 4,221,630
' ~ " ""
32! 2,697,334 11 3,332,850i
62' 5,095,263 22 3,779,223!
21 1,613,614! 15 3,326,375j
17 l,284,593j

2.520 48,567,131
2,228 40,893,093
1,909 37,086,508
1,216 28,440,405
2,112 36,503,6431
2,403 42,397,149
1,059! 21,911,467
1,000 18,499,11(5)
1,071 22,918,0511
707 12,410,830)
695 9,523,513

I
170 121,243,162 2,019, S3,529,022 807*67,645,301| 308 57,529,92?;20,5571385,915,973

:
I
I
i
I
* Of the above total, bankers' acceptances totaling $55,548,576 wero based on imports and exports, and ?9,279,025 on domestic trade
transactions.
2 Of the above total, trado acceptances totaling $96,670 wore based upon domestic trade transactions, and SI, 198,196 were drawn abroad on
impo]
•orters in the United States and indorsed by foreign banks.




144

FEDERAL EESEBVE BULLETIN.

Total investment

FEBRUARY 1,1917.

operations of each Federal Reserve Bank during the month of December and 12 months ending Dec. SI,
1916 and 1915.
[In thousands of dollars.]

Bank.

Bills bought in open
market.
Bills discounted
I
i for
'••
! member Bankers3 T r a d e
banks, accept- accept-! Total.
ances.

14,810.1 5,213.1
I
Boston
168.8!
New York.... 17,978.0 17,660.4
10.7.
Philadelphia.. 11,917.7 6,651.1
76.8!1
3,653.8; 5,885.1
Cleveland
3,852.0 3,966.8
.Richmond
96.7 i
Atlanta
, 2,560.1 1,984.7
5,706.9 6,417.9 341. l!
Chicago
St. Louis
, 1,254.2. 4,308.7
Minneapolis... 1,491.5 4,152.0
Kansas City..
147.8 2,755.6
Dallas
289.7-. 1,451.6
San Francisco.
48.5 4,380.6 1,230.8.'

Municipal warrants bought. United States bonds and Treasury notes. Total investment
operations.

City.

All
State. other. Total.

5,213.1'
17,829.3 1,950.2!
6,661.8| 194.2|
5,961.9' 261.3!

10.2|
6.2

3,966.8

2,081.4:
6,759.0;
4,308.7|
4,152.0!
2,755.5
1,451.6
5,611.4

|
335.31
227.11
106.3;
50.3!
50.
212.

2.6!
1
i

2 per
cent.

1,950.2! 950.0
204.4!.
267.5;.
1,916.25
2.6: 500.0
335.31 1,575.0
227.1
106.3'
50.3 250.0
50.3
57.5
212.2

3 per
cent.

4 per 1-year
cent. notes.

950.0
250.0
40.0 j

Total:
Dec, 1916... 63,716.3 64,827.6 l,924.9j 66,752.5 3,387.2J 2.6 16.4 3,406.2 5,249.75 40.0" 250.0
3,210.6 1,582.1 385.0 '• 380.0
•Dec, 1915... 15,412.0 9,869.0 2,921.0, 12,790.0
12 m o n t h s
ending Dec.
207,870.5 369,582.7 16,333.3,385,916.0 84,738.2-4,087.1 934.7 89,762.0 48,128.10 3,918.88 4,403.2
31,1916
12 m o n t h s
ending Dec.
65,859.3 11,776.35 3,167.20 770.0
31,1915
161,353.0 61,924.0 2,921.o! 64, 845.0




Total.

250.0
,916.25
500.0
,615.0

"*i.*6*
250.0
57.5

December,
1916.

December,
1915.

20,023.2
38,707.5
18,783.9
10,133.2
9,735.05
5,150.1
14,416.2
5,790.0
5,750.8
3,203.6
1,849.1
5,872.1

3,776.1
6,167.6
2,948.9
1,383.8
3,838.5
3,619.0
3,840.2
920.9
908.1
2,467.5
3,253.7
635.8

5,539.75 139,414.75
2,347.500
33,760.1
30056,750.18 740,298.68
15,713.470

307,770.77

FEBRUARY 1 , 1 9 1 7 .

145

FEDERAL RESERVE B U L L E U K .

FEDERAL RESERVE BANK STATEMENTS.
Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve System at close of business on
Dec. 29, 1916, to Jan. 19, 1917.
RESOURCES.
[In thousands of dollars.]
Now
Boston. York.

Philadelphia.

Cleveland.

Rich-

San
Total
ChicaSt.
Minne- Kansas
Franfor
Louis. apolis. City. Dallas. cisco. system,
go.

Gold coin and certificates in vault:
11,640 155,028 18,746 15,735 4,859 5,187 27,572 11,022 8,912
6,137
4,976
Dec. 29, 1916
12,199 141,431 17,411 15,762 5,365 5,435 26,155 10,983 8,972 6,198 15,117
Jan. 5, 1917
.
«
12,788 153,264 21,606 16,125 5,202 5,438 29,216 12,065 9,730
5,297
6,389
Jan. 12, 1917
14,839 136,206 24,581 16,044 5,238 5,349 31,907 13,088 10,277 6,751 5,639
Jan. 19, 1917
Gold settlement fund:
14,737 20,570 8,042 16,953 19,416 7,439 26,183
7,064 21,236 14,947
Dec. 29,1916
19,506 26,357 12,916 20,759 15,789 5,186 33,220 4,585 8,406 24,728 11,598
Jan. 5,1917
20,708 35,674 13,456 22,440 17,186 4,950 31,854 5,159 7,453 26,382 13,619
Jan. 12,1917
17,546 41,644 17,016 23,827 16,809 3,425 34,982 6,040 6,790 26,654 11,873
Jan. 19,1917
Gold redemption fund:
50
42
299
57
250
100
211
150
200
255
Dec. 29,1916
50
342
250
100
144
57
31
191
200
195
Jan. 5,1917
482
50
250
100
152
200
156
45
228
Jan. 12, 1917
100
504
250
100
150
50
200
114
40
256
Jan. 19, 1917
100
Legal-tender notes, silver, etc.:
635 12,806
521
197
253
461
136
51
857 1,381
Dec. 29,1916
164
515 10,224
818
327
1,051
512
121
175
323 1,852
Jan. 5, 1917
214
533 9,636
81
568
402
1,304
207
671
Jan. 12,1917
840 2,134
336
653 1,181 2,436
2,447
82
209
557
Jan. 19, 1917
:
430
926
Total reserve:
27,062 188,654 27,349 33,251 24,537 13,122 54,812 16,053 16,170 27,659 20,233
Dec. 29, 1916
32,270 178,262 31,478 37,064 21,466 11,781 59,898 17,615 17,622 31,245 17,099
Jan. 5,1917
34,079 1198,824 36,466 39,245 22,697 11,438 62,110 19,514 17,619 33,130 19,363
Jan. 12,1917.;
34,882 !l78,057 42,623 40,744 22,385 9,931 68,270 21,678 17,597 33,764 18,035
Jan. 19, 1917
Five per cent redemption fund
against Federal Reserve bank
notes:
300
100
Dec. 29,1916
300
100
Jan. 5,1917
300
100
Jan. 12,1917
300
100
Jan. 19,1917
,
Bills discounted—members:
3,727
,061
2,879 3,090
516
7,068
4,416 1,311 1,974
819
Dec. 29,1916
1,900
839
497
6,810
579 3,746 3,390
4,384
828
Jan. 5,1917
1 141 1,872
1,483
862
650 3 7 6 5
470
6,246
3,310 3,901
Jan. 12,1917
729 1,748
953
642
591
1,978
2,639 2,418
Jan. 19,1917
, 1,163
647 1,719
Bills bought in open market:
12,725 41,457 13,602
4,554 10,212 6,784
9,871 3,694
6,128 3,890 2,201
Dec. 29,1916
9,891 3,394
4,162 10,043 7,132 6,290
3,611 2,351
Jan. 5,1917
, 13,277 38,417 12,199
2,174
4,086 8,974 6,785 6,645 3,294
Jan. 12,1917
, 13,827 35,169 11,001 | 9,151 3,460
13,666 31,797 9,493 8,227 4,138 4,110 8,189 6,423 6,475 3,212 2,033
Jan. 19,1917
United States bonds:
1,332
4,328
1,710
8,858 2,203 2,442
1,043 1,651 i 7,361 2,192
Dec. 29,1916
1,332
1,338
522
7,360
2,160
7,413 2,203 2,443 8,493 4,328
Jan. 5,1917
1,332
1,338
534
2,160
7,367
7,413 2,203 2,443 8,493 1,328
Jan. 12,1917
1,332
534
2,160
8,493
6,165 1,338
7,413 2,203
1,913
Jan. 19,19.17
One-year United States Treasurynotes:
618 1,070
1,000
824 1,517
1,205 1,174
705
700
963
Dec. 29,1916
1,000
618 1,969
824 2,962
705
1,726 1,999
700
963
Jan. 5,1917
1,000
618 1,969
824 2,962
705
1,726 1,999
700
963
Jan. 12,1917
1,000
824 2,962
1, 726 1,999 1,820 1,969
1,230
963 1,430
891
Jan.19,1917
Municipal warrants:
164
890
972
465 2,685
402
127
61
1,326
576
570
Deo. 29,1916
,
164
831 1,988
274 1,867
400
127
61
576
921
488
Jan. 5,1917
215
806 1,988
528 2,040
61
400
625
178
1,682
488
Jan. 12,1917
174
61
564
700 2,919
1,528
402
153
1,531
478
Jan. 19,1917
Federal Reserve notes, not:
622 13,637
560
2,647
2,188
Dec. 29,1916
,
602
549 16,102
2,335
Jan. 5,1917
\
!
714
1,071 13,717
2,086
Jan. 12,1917
801
1,858
70
Jan. 19,1917
j 1,089 16,391 1,201
Due from other Federal Reserve •
Banks,net:
1,494
3,294 5,393
12,686 9,180
Dec. 29,1916
': 11,188 ! 2,5
651
7,213 2,303
652
3,829
1,853
891
169
Jan. 5,1917
58
2690 I 1,973
4,091 2,701
42
225
Jan. 12,1917
12
744
1,742
623
Jan. 19,1917
:
12,529
!
Uncollected items:
Dec. 29,1916
!
13,741 26,411 I 20,192 ' 9,933 9,639 9,561 18,165 11,495 4,755 8,305 I 4,966
Jan. 5,1917
10,433 25,042 I 16,653 ! 8,743 8,285 8,792 16,211 8,671 3,640 6,083 4,427
Jan. 12,1917
:
Jan. 19,1917
13,318 |27,207 i 16,691 j 11,954 8,419 9,218 ! 15,580 9,402 4,254 6,414 | 4,895
1
Difference between net amounts due from and net amounts due to other Federal Reserve Banks.




11,774
12,141
15,709
16,590

281,588
267,169
292,829
286,509

10,489
8,951
7,660
5,445

170,471
192,001
206,541
212,051

10
10
10
15

1,654
1,600
1,782
1,783

76
48
57
65

17,538
16,180
16,769
10,338

22,349
21,150
23,436
22,115

471,251
476,950
517,921
510,681

400
400
400
400
253
231
238
199

30,196
26,217
24,355
17,219

12,379
11,040
11,413
10,684

127,497
121,807
115,979
108,447

2,634
2,634
2,669
1,919

44,247
41,052
41,106
37,899

500
500
500
1,500

11,167
14,857
14,857
18,314

737
1,039
848
576

8,975
8,736
9,859
10,596

1,646
2,076
2,314
2,654

21,300
21,664
19,902
24,064

3,378 M6,958
933 16,666
335 111,632
873 15,354
5,466 142,629
3,866 120,846
4 764 ! 132,116

146

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve System
Dec. 29, 1916, to Jan. 19,

at close of business on

Fridays,

1917—Continued.

RESOURCES—Continued.
[In thousands of dollars.l
New
Boston. York.
All other resources:
Dec. 29, 1916...
Jan. 5,1917
Jan. 12,1917
Jan. 19,1917
Total resources:
Dec. 29,1916...
Jan. 5,1917
Jan. 12,1917
Jan. 29,1917

254
1.84
506
656
58,800
66,937
64,762
67,806

264
313
463
863

PhilaRichdel- Cleve- mond.
land.
phia.

t»

639
1,050
903
480

256,892 51,235
270,551 76,070
283,709 81,928
274,631 75,384

tlanta.

34
233
242
232

San
Total
ChicaSt.
Minne-I Kansas'
Franfor
Louis. apolis. City. Dallas. cisco. system.
go.

19
119
114
117

234
369
555
452

1,111
1,340
1,783
1,498

417
6,235
• 488 8,752
552 12,261
675
12,729

61,092 34,467 25,420 96,983 37,763 30,191
70,685 42,015 34,307 1110,606 43,447 34,941
70,908 41,817 34,786 1109,970 44,539 33,439
73,202 42,395 i 33,041 110,924 44,892 33,853

43,713
54,598
53,501
54,252

29,624
31,912
34,011
32,637

44,293 768,226
45,557 869,730
46,171 889,118
45,959 877,819

271
468
407
698

1,718
2,029
3,776
3,013

509
656
540
961

765
1,503
2,420
3,084

LIABILITIES.
[In thousands of dollars.]
Capital paid in:
Dec. 29,1916
Jan. 5,1917
Jan. 12,1917
Jan. 19,1917
Government deposits:
Dec. 29, 1916
Jan. 5,1917
Jan. 12,1917
Jan. 19,1917..
Due to members—reserve account:
Dec. 29, 1916
Jan. 5, 1917
Jan. 12, 1917
Jan. 19,1917
Member bank deposits—net:
Dec. 29,1916
Jan. 5, 1917
Jan. 12,1917
Jan. 19. 1917
Collection items:
Dec. 29, 1916
Jan. 5, 1917
Jan. 12,1917
Jan. 19,1917
Federal reserve notes—net liability:
Dec. 29,1916
J a n . 5,1917
Jan. 12,1917
i
Jan. 19,1917
Due to other Federal Reserve ,
Banks, net:
j
Dec. 29,1916
!
Jan. 5, 1917
J a n . 12,1917
Jan. 19,1917
All other liabilities:
Dec. 29,1916
Jan. 5,1917
Jan. 12, 1917
Jan. 19,1917
,
Total liabilities:
Dec. 29,1916
Jan. 5,1917
Jan. 12,1917
Jan. 19,1917




4,990
4,990
4,990
4,990

11,866
11,866
11,865
11,822

5,228
5,229
5,229
5,229

6,022
6,022
6,022
6,020

3,346
3,346
3,361
3,361

2,450
2,450
2,450
2,409

6,913
6,914
6,914

2,799
2,800
2,800
2,800

2,610
2,382
2.383
2; 400

3,074
3,074
3,074
3,074

2,696
2,694
2,689
2,693

3,929
3,929
3,929
3,930

55,695
55,695
55,706
55,642

2,165
1,671
1,037
2,337

4,111
3,579
5,346
5,020

3,184
3,133
2,909
2,688

967
962
1,054

3,062
1,822
2,067
1,469

3,850
3,716
2,719
2,781

2,256
1,320
2,657
2,094

2,979
3,033
3,644

871
2,445
2,356

261
802
558
502

1,491
1,334
1,410
1,415

3,617
1,744
2,094
2,410

28,837
25,566
27,759
28,410

47,167 222,731
48,944 235,139
45,243 234,951

46,378
49,774
45,450

54,850 25,823
56,011 26,180
54,738 25,663

15,474
16,328
14,916

90,742
92,126

25,822
25,558
25,683

656,422
680,586
669,874

51,378 240,734

41,493

54,080

25,267

15,874

88,012

43,175 23,255 36,729
44,247 24,874 37,031
45,268 23,843 36,297
38,338 22,659 36,683

13,074 21,043
9,742 24,013
12,684 22,772

20,139
23,370
16,727

8,8-16
7,913
11,390

8,835
7,396
7,666

8,081
8,815

13,285
9,657
9,790

1,136
1,112
553

2,692
2,189
2,531
3,453

j
j
!
|

62
2,509

11,256
7,267

5,198

282
783 !

267
35
49
43

181
76
79
66

194
79
87

38

58,800
66,937
64,762
67,806

256,892
270,551
2S3,709
274,631

51,235
76,070
81,928
75,384

61,092 34,467
70,685 42,015
70,903 41,817
73,202 42,395

3,220
2,719
3,606
4,120

4,277 I 2,363
25,930
25,758
25,698
26,169

7,887
S.629
8,977

3,591
2,773
2,905

5,654
4,070
3,324

3,795
2,527
3,130

3,916
3,905
3,908
3,808

593
169

2,040
1,893
1,612
1,737

1,126
834
1,179
772

26
640

14,130
13,245
13,558
13,890

1,652

507
1,347

3,102 I 118,559
3,061 111,238
3,254 109,734

347

1,332
4S4

34
oi \
50 !
08 I
25,420 96,983 37,763 30,191
34,307 110,606 43,447 34,941
34,780 109,970 44,539 33,439
33,041 110,924 44,892 33,853

43,713 29,621
54,598 31,912
53,561 34,011
51,252 32,037

44,293
45,557
46,171
45,959

778
243
271

j 708,226
869,730
j 889,118
877,819

FEBRUARY 1,1017.

147

FEDERAL RESERVE BULLETIN.

Federal Reserve note account of each Federal Reserve Bank at close of business on Fridays, Dec. 29, 1916. to Jan. 19. 1917.
[In thousands of dollars.]

Atlanta.

Federal He-serve notes issued to the
bank:
Dec 29,1916
Tan 5 1917
Tan 12,1917
Tan 19,1917
Federal Reserve notes in hands of
bank:
Dec 99 ; i9i0
Tan. 5,1917
Tan 12,1917
Tan. 19,1917
Federal Reserve notes in circulation:
Dec. 29,1916
Tan 5,1917
Tan. 12,1917
Tan. 19, 1917
Gold and lawful money deposited
with or to the credit of the Federal Reserve Agent:
Dec 29 1916
Tan. 5,1917.
Jan. 12,1917
Tan 19,1917
Carrie.L to net assets:
Dec 99,1916
Carried to :\-t liabilities:
Dec 2.-* v0"6




13,518
13 491
14,004
13,946

83?
107,004 ' 17,070
109,255 1 17 039 10
104,907 • 16,992 TO, 614
105,488 16,934
558

9

0 , 431
385
19, 194
016

0",

90

Chicago.

Minne- Kansas
St.
Louis. apolis. City. Dallas.

Q90

New
RichBoston. York. ! Phila- Cleve- mend.
delphia. land.

7, 18?

375

7,17«
7, 173
7j 100

16,890
10,854
16.828
16j782

20,484
19,462
19,438
19^907

431
442
439
539

2,188
1,407
1,831
2,570

24, 830

707

22,235 94 103
22,186 931 61Q
21,511 23, 182
21,130
098

San
Total
Fran- for syscisco. tem.

781
14' 781
14, 767
759

300,511
300,280
293,440
292,014

574
366
321

646
076
2 314
654

25,158
27,407
25,272
29,017
275,353
272,873
268,188
262,967

i
622
549
1,071
1,089

12.896 93,367 i 16,908
12.942 93,153 j 16,851
1
12,933 91,190 1 16.245
12,S57 ! 89^ 097 15,733

500
647
298
148

500
00?
714
801

13,037
104
16' 102 i
188
747
13,717 :
16,391 1 1,201
10
10
0
9

1, 138
1 041
1, 009
^i 057

1 051
059
005
511

97?

10
18 744
18 195
17j 959

21,869
24 323
94 105
190

4
4
5
5

536
843
087
308

10,459
10,412
10,3S9
10.243

18 2°0
18,055
17,607
17,337

21,735 93, 589
21,539 23, 253
21,213
801
20,982 22' 400

13 135
12 705
19,
19 008

21 049

7 183

12,513
12,507
12,481
12,435

20,484 19,695 22, 463
17,462 19,616
419
17,438 ! 19,601 91 68?
17,407 19,245 21, 028

14 781
14 781

053
POO

757

2 647
9 335
2 0«6
1 858

I

13,518
13.491
14,004
13,910
022

1.07,004 ;! 15,770
109,255 15,739
10-1,907 j 15,692
J105,488 ! 16,934

13,637

1

1 1.136
1

10 832 16 601
10 655 1 16555
10 614 15 594
10,558 14 506

1

91 004

?0 559
19,076

560

178

7 173
7,166
2,647

2 092

3,220

2,188
3,916

...

j 2,040 1 126

i-

282,523
281,292
707 274,512
11 752 273,141
1 640

21,300
14,130

148

FEDERAL RESERVE BULLETIN.

FEBRUARY 1,1917.

Federal Reserve note account of each Federal Reserve Agent at close of business on Fridays, Dec. 29, 1916, to Jan. 19, 1917.
[In thousands of dollars.]
Boston.
Federal Reserve notes:
Received from ComptrollerDec. 29,1910
J a n . 5,1917
J a n . 12, 1917
J a n . 18-19,1917
Returned t o C o m p t r o l l e r Dec. 29, 1916
J a n . 5, 1917
J a n . 12,1917
Jan. 18-19,1917
Chargeable t o Federal Reserve
AgentDec. 29,191G
Jan. 5,1917
Jan. 12,1917
Jan. 18-19, 1917
I n h a n d s of Federal Reserve
AgentDec. 29. 1916
J a n . 5,1917
J a n . 12, 1917
J a n . 18-19,1917
Issued t o Federal Reserve
Bank, n e t Dec. 29, 1916
J a n . 5,1917
J a n . 12,1917
J a n . 18-19,1917
Amounts held b y Federal Reserve
Agent:
I n reduction of liability on outstanding notes—
Gold coin and certificates
on h a n d Dec. 29, 1916
Jan. 5, 1917
J a n . 12, 1917
Jan. 18-19, 1917..
Credit balance in gold
redemption fund—
Dec. 29, 1916
Jan. 5, 19.17
J a n . 12, 1917
Jan. 18-19, 1917.1
Credit balauce with Federal Reserve Board—
Dec. 29, 1U1G
Jan. 5, 1917
|
Jan. 12, TJ17
i
Jan. 18-19, 1917
...|
As security for outstanding \
notes—
;
Commercial paper—
j
Dec. 29, 1910
J a n . 5, 1917
J a n . 12,1917
Jan. 18-19, 1917
TotalDec. 29, 1916
J a n . 5, 1917
Jan. 12, 1917
J a n . 18-19, 1917
Memorandum:
Total a m o u n t of commercial
paper delivered to Federal
Reserve Agent—
Dec. 29, 1910
J a n . 5,1917
J a n . 12, 1917
J a n . 18-19, 1917




San
Mimic-! Kansas Dallas. FranSt.
Louis. apolis. City.
cisco.

Philadelphia.

Cleveland.

Richmond.

AtChilanta. 1 cago.

180,400 30,480
1180,400 30,480
180,400 ! 30,480
180,400 30,480

17,660
17,660
17,660
17,660

29,500
29,500
29,500
29,500

35,380 11,880 22,540
35,380 11,880 22,540
35,380 11,880 22,540
35,380 11,880 22,540

New
York.

Total.

i
28,880
28,8S0
28,880
28,880

24,500
24,500
24,500
24,500

28,120
28,120
28,120
28,120

355320
35,320
35,320
35,320

17,720
17,720
17,720
17,720

462,380
462,380
462,380
462,380

896
918
942
973

2,132
2,181
2,226
2,282

4,501
4,645
4,782
4,936

1,939
1,939
1,953
1,908

94,935
95,796
101,056
103,217

7,402
7,429
7,606
7,724

53,478
53,725
58,073
59,492

0,150
6,181
6,228
6,286

3,728
3,905
3,946
4,002

6,569
6,615
0,906
7,084

3,835
3,910
3,955
4,038

1,697
1,702
i 1,707
1,714

2,610
2,646
2,672
2,718

21,478
21,451
21,214
21,156

126,924
126.075
122,327
120,908

2-4,330
24,299
24,252
21,194

13,932
13,755
13,714
13,058

22,931
22,885
22,594
22,416

31,545
31,470
31,425
31,342

10,183
10,178
10,173
10,160

19,930
19,894
19,80S
19,822

23,604
23,582
j 23,558
' 23,527

25,988
25,930
25,894
25,838

30,819
30,075
30,538
30,384

15,781
15,781
15,767
15,752

367,445
306,584
361,324
359,103

7,960
7,900
7,210
7,210

19,920
17,420
17,420
15,420

7,260
7,260
7,200
7,200

3,100
3,100
3,100
3,100

2,500
2,500
3,400
3,400

5,625
6,095
6,595
7,635

3,000
3,000
3,000
3,000

3,040
3,040
3,040
3,040

3,120
4,120
4,120
3,620

3,753
3,753
4,383
4,708

6,656
7,050
7,350
7,756

1,000
1,000
1,000
1,000

66.934
66.304
67,884
67,149

13,518
13,491
14,004
13,946

107,004
109,255
104,907
105,488

17,070
17,039
16,992
16,934

10,832
10,655
10,614
10,553

20,431
20,385
19,194
19,010

25,920
25,375
2-4,830
23,707

7, LS3
7,178
7,173

22,235 24,103 14,781
22,186 23,019 14,781
21,511 23,182 i 14,767
21,130 22,628 I 14,752

300,511
300,280
293,440
292,014

32,600 101,452
12,600 103,952
13,150 99,952
13,150 100,952

018
891
854
796

5,552
5,303
4,955
4,536

3,730 I 10,220
3,730
9,980
3,730
3,730 !

!
860 !
782 !
924

612
675
634
578

11,180
11,180 I
11,180 :
12,280 I

16,000
16,000
Vo, 100
14,100

13,518
13,491
14,004
13; 946

107,004
109,255
104,907
105,488

17,070
17,039
16,992
16,934

1,300
1,300
1,300

10,832
10,655
10,614
10,558

I

173
168
163
156

! 868 j 1,0
i

4,271
3,771
4,271
4,031

I
I20,431
20,385
19,194
19,016

25,920
25,375
24,830
23,707

4,285
3,789
4,290
4,657

164,567
100,827
162,877
163,877

1,005
1,016
971
915

1,293
1,249
1,212
1,158

461
461
4'LV
632

15,376
14,85o
14,125
13,554

6,250
3,250
3,250
3,250

14,260
14,260
14,200
13; 900

10,830
10,830
10,130
10,130

14,320
14,320
14,320
14,120

102,580
<)U,010
97,510
95,710

2,000
2,000
2,500

2,540
2,540
1,910
1,885

16.890 20,484
10;854 19,462
10,828 19,438
10,782 19,907

22,235
22,186
21.511
21,130

4,347
4,347
4,347
4,347
7,183
7,178
7,173
7,106

10,340
10,340
10,340
10,340

982
958
927

832 !
800
760

16,220 ! 7,010 ! 6,510 j
16,250 i 7,010 ' 6,510
15,750 I 7,010 :: 6,510
14,350 7,010
6,510

3,830
3,830
3,000
4', 510

1,300
1,300
1,300

5,165 '• 13,230 4,370
j 5,165 I 13,230 4,370
I 5,165 j 13,230 4,370
| 5,165 | 13,230 4,370

3,460
3,400 '
:::::! 2,900 I
2,960 I
1,969
601
555 ! 1,894
494 1,849
1,766
406

16,890 20,484
10,854 19,-462
16,828 19,438
16,782 19,907

4,351
4,351
4,348
4,348

2,000
2,000
2,500

2,545
2,544
2,208
2,208

1,700
1,200
1,500 j
1,000

17,988
! 18; 988
: 18,928
, 18,873

24,163 ! 14,781 ! 300,511
23,619 14.781 j 300,2S0
23,182 14; 707 ! 293,440
22,628 ! 14,752 ! 292,014

I
1,844 I
1.673 I
1J587 :
1,312

18,402
20,272
20,845
20,366

GOLD IMPORTS AND EXPORTS.
Imports of gold, by customs districts, Dec. 22, 1916, to Jan. 19, 1917.
[In thousands of dollars.]
San
Eagle Laredo. Fran- WashPass.
cisco. ington.

New
New
AriYork. Orleans. zona.

St.
Dakota. Michi- Alaska. Lawgan.
rence.

Buffalo.

Total.

Week ending Dec. 22, WIG.

On) and baso bullion

4
11

25
lcSl

....

6

0

4

8

15

21(5

.

31

22
191
3

Total

31

206

Foreign coin

92

34
123

20
252

55

272 :

55

24 533

273
25 100
2,434

24,533

27,807

2,434

s

4

2,526

157

33
1

17

22

32

34

17

Week ending Dec. 20. 1010.

Ore and base bullion
Oth'>r refined bullion
United States coin
Foreign coin

9

66

200

49,352
1

2.433

Total

2,4.">o

32

200

9

no i

1

40,352

j
i

Total imports for calendar VOHT*, 3916

Excess of imports for calendar year, 1916

207
49,744
4
2,433
52,3H8
085,745
529,952

Week ending Jan. o, 1917.
Ore a n d ba^e bullion
O t h e r refined bullion

.

...

Totol

. . .

50
607

100
i

100

7J7

Week ending Jan.

78

i

78

10
108

304
912

10

4

1,216

36

102
2
382
50,000
9

108

199

A.

23

02
137

13,1017.

Ore and base bullion

8

29
2

Othp-r refined bullion

"

-

233

United State? avn
Foreign coin

50,000
9

Total

2oO
Weel: ending Jan.

Ore and base bullion
Other refined bullion
"Foreign coin
Total




o

20

so or.n

23

36

10

151

62

273
208
4,807

10

02

5,348

50,495

19, 1917.
82
85

12
2

71

35
121

4,867
167

14

1

4,938

35

121

-

Exports of gold, by customs districts, Dec. 22, 1916, to Jan. 19, 1917.
[In thousands of dollars.]
Maine
and New Mary- New PhiladelHamp- land. York. phia.
shire.

GalNew
San
VirvesOrginia. Florida. ton. Mobile. leans. Alaska. Hawaii. Francisco.

St.
AVashins- Buffalo. Dakota. Michi- Lawgan. rence.
tou.

Vermont. Total.

Week ending Dec. 22,1916.

United States mint or assay
office bars
Bullion refined:
Domestic
Foreign
United Slates coin
Foreign coin
Total

1

977
5

2

975
852

500

2

2,803

500

150

1,027
852

150

1

6

3,403

1

38
6

48

!

Week ending Dec. 29, 1916.

Ore and base bi illion
United States mint or assay
office bars
Bullion refined, domestic
United States coin
Total
Total exports for calendar
year, 1916

2

1

1

976

500

356
51
2,024

506

2,472

1

37
350
790

6
300

16")

1

790

306

165

1

238
588

37

30
30

49

155,71)3

Week ending Jan. 5, 1917.

Ore and base bullion
United States mint or assay
office 1 >ars.
Bullion refined, domestic
United States coin .
Foreign coin
Total

15

15
103

i

517
33

3,247

1,150

33

638

627

2,539
16
2,555

15

700

1

16
5
750

3

15

771

3

121

103

1

u

1,150

7
753

1

61
2,933
253

G20
09
4,990
253
5,947

Week ending Jan. 12,1917.

United States mint or assay
office bars
Bullion refined domestic
United States coin
Forpiim coin

Total

627

3,650

25

3,650

25

22

16
6
7,630
16

!

7,608

Week ending Jan. 19, 1917.

United States mint or assay
office bars
Bullion refined, domestic
United States coin
:
!
Foreign coin
Total




21

ii
1,350
253
1,614

1

260

349

33

47

i

1

260

349

33

68

03

2

i

i

j

22
73
2,041
253
2,389

I

FEBRUARY 1,1917.

151

FEDERAL KESEBVE BULLETIN.

EARNINGS ON INVESTMENTS OF FEDERAL RESERVE BANKS.
Average amounts

of earning assets held by each Federal Reserve BanJc during December, 1916, earnings from each class of
earning assets, and annual rates of earnings on the basis of December, 1916, returns.
Average balances for the month of the several classes of earning assets.
Bills discounted,
members.

Bills bought
in open
market.

United
States
bonds.

One-year
Treasury
notes.

Municipal
warrants.

Total.

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

S6,436,305

6,454,118
4,437,008
1,205,755
2,584,218
2,848,801
3,571,684
1,818,527
1,512,100
580,862
910,997
284,112

$12,038,375
39,472,542
14,101,710
9,589,687
2,558,044
4,930,352
8,848,817
0,957,971
5,514,200
3,200,321
1,867,8(53
13,174,810

§1,338,250
771,279
1,654,065
7,341,821
740,997
1,569,375
8,355,842
2,208,232
2,446,100
9,113,624
4,309,137
2,633,750

81,000,000
1,205,000
1,174,000
618,000
1,070,000
824,000
1,517,000
891,000
700,000
963,000
705,000 |
500,000 !

SI,041,092
3,206,051
872,609
2,712,954
60,750
403,663
1,556,441
556,903
675,100
270,137
120,033
1,215,764

$21,854,682
51,108,990
22,239,398
21,468,217
7,014,009
10,576,191
23,849,784
12,432,033
10,847,500
14,187,944
7,913,030
17,808,466

Total...

32,644,547

122,314,728

42,482,472

11,167,000

12,692,097 I

221,300,844

Calculated annual rates of earnings from—

Earnings from—
Bills disBills
counted, bought
memin open
bers.
market.

Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas C i t y . . .
Dallas
San Francisco.
Total




United
States
bonds.

One-year MuniciTreasury pal warnotes.
rants.

Total.

§19,476
18,551
13,562
3,916
8,886
9,007
13,004
5,588
5,826
2,533
3,868
1,101

§27,972
92,479
30,908
20,941
7,013
12,764
19,493
15,256
12,200
7,811
4,945
29,024

§2,396
1,305
2,787
14,521
1,282
3,433
15,909
4,207
4,306
17,479
7,866
4,382

£2,610
3,045
2,967
1,545
2,80(>
2,136 |
3,793 I
2,252
1,750
2,447
1,782
1,250

855,329
$2,875
123,559
8,170
52,743
2,519
49,944 !
9,021
20,170 j
189
28,616 !
1,276
4,200 I 50,399 :
1,556 I 28,859
25,864
1,782
31,111
841
18,795
334
38,644
2,887

i 105,318

280,806

79,873 j

28,383 I

13,659

530,039 i

Bills
Bills discounted, bought
in open
memmarket.
bers.

United
States
bonds.

Per cent. Per cent
2.66
3.46
2.76
3.38
2.58
3. CO
2.58
3.84
3.14
3.93
2.9(5
3.64
2. (50
4.30
2.58
3.62
2.61
4.55
2.83
5.13
3.15
5.10
2.06
4.58

2.05
2.00
1.98
2.30
2.00
2.50
2.25
2.24
2.08
2.25
2.20
2.00

3.81

2.7i:

2.22 i

One-year MuniciTreasury pal warrants.
notes.

Total.

Per cent. Per cent. Per cent
3.16
2.90
2.98
3.01
2.87
3.00
3.40
2.80
2.98
3.93
2.75
3.00
3.55
3.29
3.00
3.61
3.09
2.96
3.19
2.80
3.00
3.30
2.73
2.98
3.12
2.82
2.95
3.67
2.59
3.00
3.40
2.86
3.00
2.80
2.60
3.00
3.00

3.30

2.83

152

FEDERAL RESERVE BULLETIN".

FEBRUARY 1,1917.

DISCOUNT RATES.
Discount rates of each Federal Reserve Bank in effect Jan. 29, 1917.
Maturities.
Commodity
paper
maturing

Trafle acceptances.

Discounts

Paper Member
bought banks'
Agriculin open collateral
tural
market. loans.
11 to 30 16 to 30 31 to 60 61 to 90 and live- To 30 31 to 60 61 to 90
Within Within days, in90clay^.
stock
10 days. 15 days. clusive. days, in- days, in- days, in- paper days, in- days, in- days, inclusive. clusive. clusive.
clusive. clusive. clusive.
over 90
days.
4

•

|1
4"

:

4
4

4

4

A

4
4
4
41
4
4

4
4
4i
\

5
5
44
5
41

41

V
3'
33
3"2

31

3-\
31

3J

3-'

4

U

31

31

3i

31
31

1

31-5{«

4
3
34
31,
3i

2 3;t—4

31

•1

31
4"
1

I

3-',

:

4
4
4-7.-

4^

"3

1
2
a

4
4
4
41
4
4

f

t

U
41

5

f
5

J^ 00 CO CO

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Atlanta (New Orleans
branch)
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
1

3£
3J

8
35
31
3J

3-J

8
1

3i

31
34
4
31

I5
3-5

4

31
4

Rate for bills of exchange in open-market operations.
Rate for trade acceptances bought in open market without member bank indorsement.
Rate for commodity paper maturing within 30 days, 3i per cent; over 30 to 60 days, 4 per cent; over 60 to 90 days, 41 per cent; over 90 days,
5 per cent.
NOTE.—Rate for bankers' acceptances, 2 to 4 per cent.




INDEX.
Page.

Acceptances, distribution of, by sizes, maturities, etc
Amendments to act presented to Congress
Business conditions throughout the 12 Federal Reserve districts
Clearance system:
Status of
Operation of
Commercial failures in 1910
Commercial paper, distribution of
Discount rates in effect
Drafts, immediate availability of, at par
Earnings on investments of Federal Reserve Banks
Federal Advisory Council, recommendations of, on proposed amendments to Act
Federal Reserve Banks, earnings and expenses of
Federal Reserve Bank statements
Federal Reserve Board, receipts and disbursements of
Federal Reserve Act, proposed amendments to, submitted to Congress
Federal Reserve note account of agents and banks, statement of
Federal Reserve notes for redemption, shipment of
Fiduciary powers granted
Foreign Governments, securities of, policy of Board concerning
Gold imports and exports
Gold settlement fund:
Expenses of
Summary of, for month
Informal rulings of the board:
Bill of lading drafts
Agricultural and live stock paper
Acceptances for advertising
Law Department:
Trade acceptances based on advertising space
Rights of liquidating national bank to accrued dividends
Advisory committee of member banks
Malburn, Hon. W. P., appointed chief bank examiner
National bank charters granted
Receipts and disbursements of Federal Reserve Board
Reserve provisions of Act, computation showing effect of amendment
Reserves, change in form of clearing-house bank statement showing position of
Resources and liabilities of Federal Reserve Banks
Review of the month
State banks, advantages of, in joining system, views of Federal Reserve Bank officer
Sub treasuries, relation of, to Federal Reserve Banks
United States bonds, purchase of, by Federal Reserve Banks




141-144
98-106
119-134
80
" 115
113
135-140
152
78-80
151
106-109
89-93
145-146
87, 88
98-106
147-148
82
115
82
149-150

-.

94
94-97
114
114
114
116
117
118
80
115
87, 88
109,110
83
145-146
75
84-87
110-112
80-82
i

o