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, SUBSCRIPTION PRICE OF BULLETIN. The Federal Reserve Bulletin is distributed without charge to member banks of the system and to the officers and directors of Federal Reserve Banks. In sending the Bulletin to others the Board feels that a subscription should be required. It has accordingly fixed a subscription price of $2 per annum. Single copies will be sold at 20 cents. Foreign postage should be added when it will be required. Remittances should be made to the Federal Reserve Board. Member banks desiring to have the Bulletin supplied to their directors may have it sent to not less than ten names at a subscription price of $1 per year. 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 75 78 80 80 80 82 82 83 84 87 89 94 98 106 109 110 113 114 115 115 115 116 119 135 141 145 149 151 152 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 82 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