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FEDERAL RESERVE
BULLETIN

ISSUED BY THE
FEDERAL RESERVE BOARD

AT WASHINGTON

JU N E , 1915

WASHINGTON
GOVERNM ENT PRIN TING OFFICE

1915

SUBSCRIPTION PRICE OF BULLETIN,
May and June issues of the Federal Reserve Bulletin have
been distributed without charge.

This distribution will be con

tinued to member banks of the system and to the officers and
directors of Federal Reserve Banks.

In sending the Bulletin

to others the Federal Reserve Board feels that a subscription
price should be required.
at $2 per annum.

It has accordingly fixed this^price

Single copies will be sold at 20 cents.

Remittances should be made to the Federal Reserve Board.

T A B L E O F CONTENTS.
Page.

Work of the Federal Reserve Board........... ..................................................................................................................
65
Address by Hon. W. P. G. Harding...............................................................................................................................
66
Informal rulings of the Federal Reserve Board............................................................................................................
72
Imports and exports of gold................................................................ ...........................................................................
76
Circulars and regulations.................................................................................................................................................
78
Distribution of Aldrich-Vreeland currency..................................................................................................................
80
Gold settlement fund........................
82
Acceptances..................................................................................................................................................................... 71, 84
Redistricting decision.....................................................................................................................................................
85
Law department.........................................................................................................................................................
91
General business conditions.....................................................................................................................
Resources and liabilities of Federal reserve banks........................................................................................................
112

106

FEDERAL RESERVE BULLETIN
V ol.

JUNE 1, 1915
WORK OF THE BOARD.

During the month of May the work of the
Federal Reserve Board has included four
important elements:
(1) The development and perfecting of the
system of clearance between Federal Reserve
Banks through the establishment of a gold
settlement fund at Washington.
(2) The working out and perfecting of a
circular relating to the conditions of admission
of State banks into the Federal reserve system,
shortly to be issued.
(3) Visits to several of the reserve banks
by members of the Board, followed by con
ferences with the officers of these institutions
while the visiting members of the Board were
on the ground.
(4) Participation in the Pan American Finan
cial Conference which convened at Washington
on May 24.
In addition to these principal lines of
activity, the Board has, of course, been carry
ing on the usual routine work of administration,
and has been granting applications for the
right to exercise the functions of trustee,
executor, etc., as well as requests for authority
to accept drafts and bills of exchange running
not more than six months, up to an amount
not to exceed 100 per cent of the capital and
surplus of the applying bank.
An especially interesting feature of the
month’s work has been the announcement of
the decision of the Board in the redistricting
cases which had been appealed to it from the
Reserve Bank Organization Committee. The
work of preparing the decisions in these cases
had been accomplished before the beginning
of May, but the publication of them occurred
on May 4.
In the course of carrying to completion the
work of drafting provisions for the gold settle
ment fund, there occurred at Washington on

No. 2

May 6-7 a conference with governors of Federal
Reserve Banks constituting a committee on
clearance, who had been interested in the
preparation of the plan of settlement and its
going into operation on a satisfactory basis.
During this conference further discussion of
the technical details of the settlement plan
occurred between members of the Federal
Reserve Board and representatives of the
several banks. The success of the plan was
therefore assured, in advance, by reason of the
hearty cooperation of the governors of the Fed
eral Reserve Banks who had been interested in it.
On May 27 the Board, in further develop
ment of the plans for the gold settlement fund,
adopted a resolution providing as follows:
Whereas Under the provisions of Regula
tion L, series of 1915, adopted by the Federal
Reserve Board, it is necessary, in order to
transfer title to the gold order certificates deosited in the Gold Settlement Fund, that they
e indorsed by the Federal Reserve Board;
Now therefore be it resolved, That this in
dorsement by the Federal Reserve Board, to
be valid and binding, must have the signatures
of two members of said Board, and
Be it further resolved, That the Governor and
Vice Governor, or in the absence of either or
both of them, Mr. Warburg, Mr. Harding, or
Mr. Miller, in their place or stead, be and they
are hereby authorized to indorse such gold
order certificates, for and in behalf of the
Federal Reserve Board.
The Pan American Conference began on
May 24 and proceeded during the succeeding
week. An analysis of the results of this con
ference will be made in a later number of the
Bulletin.
During the month the printing of the
additional supply of Federal reserve notes,
authorized some time ago, proceeded rapidly,
and the stock of such notes in the hands of the
Board is rapidly approaching the prescribed
figure.

OPERATION OP FEDERAL RESERVE
SYSTEM.
Hon. W. P. G. Harding, a member of the
Federal Reserve Board, delivered the following
address before the Texas Bankers’ Association
Convention, at Waco, Tex., on May 18, 1915:
I shall not attempt any discussion of the
Federal reserve act from its broadest view
points, but shall confine myself to certain
phases of its operation that are of paiticular
mterest to member banks, and in endeavoring
to stress some of the benefits of the system, I
shall not seek to evade a discussion of certain
features to which objection has been made,
particularly*by the smaller banks.
The profits arising from exchange charges
have always been dear to the hearts of bankers,
for the reason that transactions against which
these charges are made are quickly closed up
and involve no long tying up of funds. Profits
from this source, however, are constantly be
coming smaller, so that in the case of many
banks, in the larger towns especially, they have
so diminished that the exchange account shows
a loss instead of a gain. I can remember the
time when banks in Alabama charged a pre
mium of one-half of 1 per cent for their checks
upon financial centers, while they would buy
at the same time sight drafts upon the same
cities at the same rate of discount, thus netting
a clear 1 per cent. I presume that there was a
time when rates equally as high prevailed in
Texas. Some of these same banks are, now
glad to make a net profit of one-tenth of 1 per
cent, and in many cases this profit is derived
only from the purchase of bills drawn against
cotton when that commodity is moving ac
tively, or from the collection of and remittance
for bills-of-lading drafts drawn against ship
ments of goods.
Theoretically, exchange may be defined as
the rate at which the documentary transfer of
funds is made, so that if the debits reciprocally
due by two places be equal, the exchange will
be at par, but when greater in one than in the
other, the exchange will be against that place
which has the larger remittances to make and
in favor of the other. It is customary for the
seller of goods to forward them at the expense
of the purchaser, who is supposed 'to pay for
them in funds current at the place of residence
of the seller. Thirty years ago it was the prac
tice for settlements to be made between parties
living in different towns, by draft on New York
or some other financial center, by post office

money order, or by shipments of currency by
express. In those days the rate of exchange
was governed to a great extent by express
rates, especially when the amount involved
was large, for the remitter would not pay a
bank a higher rate for its check than it would
cost him to forward the actual funds by express.
Merchants would go to their local bank and
purchase drafts in favor of their creditors,
paying the bank the agreed premium. AlS the
business of the country developed, the local
merchant gradually acquired the habit of send
ing his own check, drawn upon his local bank,
to his creditor in New York, Chicago, or St.
Louis, who would deposit the check in his own
bank, which would, in turn, forward it for pay
ment. The local merchant found that by do
ing this he could avoid paying a premium for a
bank draft drawn upon the city where his debt
was due. The city dealer found that he could
in most cases, prevail upon his own bank to
accept his country checks on deposit without
making any deduction, so he soon became ac
customed to this method of settlement. In
the course of time, when many remittances were
being- made in this way, the burden upon the
banks in the financial centers became very
reat, and to protect themselves, the crediting
ank would impose a charge on country checks
deposited with it, so that the cost of remitting
funds for settlement of goods purchased had
been shifted from the local merchant to the
dealer or jobber in the cities. In many cases,
however, this cost is borne by neither of the
arties to the transaction, but is Still absorbed
y the city bank which has the dealer’s account,
although there seems hardly more reason for
it to be taxed with the cost of transfer of funds
from the buyer to the seller, than for it to pay
freight upon the goods purchased.
The banker in the smaller towns naturally
looks with favor upon this method of settle
ment, as he exacts his exchange charge from
the bank from which he receives the check,
and his bank has enjoyed an increased deposit
during the time the check has been outstand
ing. Many abuses have crept in, however,
and it frequently happens, particularly where
the drawer knows that his check will be out
standing four or five days, that he will forward
it before he actually has funds in bank to
meet it, relying upon his ability to make the
account good by the time the check is returned
for payment. The merchant in the small
town, therefore, prefers to continue this method
of settlement, as it frequently saves him an
interest charge. It often happens also that

in cases where the bank in the larger city makes
a charge against its depositor more than
ample to cover actual cost of collecting a
country check, that it seeks to retain all or a
part of this as a net profit, and is frequently
enabled to do so by taking advantage of
competitive conditions in an intermediate
town where it has a reciprocal account, so that
the expense is in many cases borne by a
bank in some local center which is willing to
take business at a loss to prevent a com
petitor from getting it. The ideal arrange
ment which the bank in the small town, or
the real country bank, likes to make, and one
which it is frequently able to make, is to charge
its correspondent bank located in a financial
center of its own State, exchange at the rate
of 25 cents per hundred on all checks received
for collection, at the same time clearing
through the same correspondent all checks
payable outside of is own town without any
expense whatever. I believe, however, that
arrangements of this kind are becoming harder
to make, and that the greater part of exchange
charges now being made in this country are
borne by the sellers of goods. It may be
that their profits are sufficient to admit of
their bearing this expense, and I have always
been impressed with the logic of a contention
made by a country merchant when I was a
bank clerk in Alabama more than 30 years
ago.
It seems that on one occasion he sent his
own check on the local bank to a New Orleans
merchant in payment of some sugar, instead
of following what was then the prevailing
custom of going to the bank and buying its
draft on New Orleans. This check was
deposited in a New Orleans bank, who sent it
for collection to the rival bank so that the bank
on which the check was drawn made no profit
out of the transaction. The cashier asked
this merchant what he meant by sending his
local check as far away as New Orleans, and sug
gested that he come in as usual and buy a bank
draft. The merchant replied that whenever
the New Orleans merchants would pay the
freight on their goods shipped to him that he
would be willing to pay the freight on their
money. Sellers of goods all over the country
have for several yeai's past been paying freight
on the money paid them for their goods, and
the volume of local checks that are transmitted
in the mails every day now reaches enormous
proportions; certainly $200,000,000 would not
be a high estimate. When the Federal reserve
act was being debated in Congress, representa

tives of those who have been paying exchange
charges on checks sent them in payment of
goods sold exerted their influence in favor of
free check collections, and shortly afterwards
representatives of more than 2,000 country
banks went to Washington and appeared
before the committee having the bill in charge
and entered a vigorous protest against being
deprived of what they regarded as a legitimate
profit. The result was that this paragraph
was included in section 16 of the bill as enacted,
and is now part of the law:
u Every Federal Reserve Bank shall receive
on deposit at par from member banks or from
Federal Reserve Banks checks and drafts
drawn upon any of its depositors, and when
remitted by a Federal Reserve Bank checks
and drafts drawn by any depositor in any other
Federal Reserve Bank or member bank upon
funds to the credit of said depositor in said
Reserve Bank or member bank. Nothing here
in contained shall be construed as prohibiting
a member bank from charging its actual ex
pense incurred in collecting and remitting
funds or for exchange sold to its patrons.
The Federal Reserve Board shall, by rule, fix
the charges to be collected by the member
banks from its patrons whose checks are cleared
through the Federal Reserve Bank, and the
charge which may be imposed for the service
of clearing or collection rendered by the Fed
eral Reserve Bank.”
It seems to have been the idea in Congress
that country banks would be appeased by the
provision that they might make a charge
against those of their patrons whose checks
were cleared through the Federal Reserve Bank.
In other words, if Mr. Brown, of Abilene, should
draw his check upon the Citizens National
Bank of Abilene, in favor of Smith & Co., of
Chicago, for $100, and that check should Ipe
returned to the Abilene bank for payment
through the Federal Reserve Bank of Dallas,
it was thought that the Abilene bank could
charge Mr. Brown 15 cents for having paid his
check in Chicago funds. The fact, however,
was evidently overlooked that Mr. Brown
would not look with favor upon this charge,
which, if persisted in, would result in the loss
by the Citizens National Bank of Mr. Brown’s
account. Neither is the permission given u to
charge for exchange sold to patrons” any more
satisfactory to the small bank, for the reason
that their patrons have long since gotten out
of the habit of buying bank drafts and make a
practice of remitting their own checks. It
seems, therefore, in actual practice that the

only charge allowed is for “ the actual expense
ittcufred m collecting and remitting funds,”
wliich must seem a mere pittance to banks that
have been charging 25 cents per hundred. Yet
the Federal Reserve Banks are required to
Receive on deposit at par from member banks
or "from Federal Reserve Banks checks and
drafts draWn upon any of its depositors,” and
the Federal Reserve Board is charged with the
duty of carrying out the law.
It has been the earnest desire of the Board
to cause as little hardship as possible in making
these changes, and after a careful study of the
whole subject, and after many conferences
with representatives of ail Federal Reserve
Banks and officers of member banks, a plan has
been agreed upon which will, be* gradual in its
operation, and which will, it is thought, in the
course of time prove effective. Each Federal
Reserve Bank, in accordance with this plan,
has notified its member banks that a cneck
clearing system will be establishd, but that
for the present the system will be a voluntary
one, and no bank will be required to be a party
to it except of its own free will and accord. In
order best to describe the workings of this plan,
I will assume that the member banks in Dallas,
Fort Wortn, Waco, Austin, Houston, San
Antonio, Paris, Galveston, Sherman, and El
Paso assent, and agree to permit the Federal
Reserve Bank of Dallas to charge against their
respective accounts as soon as received checks
upon each bank which may come into the
hands of the reserve bank. Such checks will be
immediately forwarded to banks upon which
drawn, for credit, and any checks not good are
to be returned to the Federal Reserve Bank
and recredited by it. Each of the banks
agreeing to the plan must carry with the
Federal Reserve Bank, in addition to its re
quired reserve, an amount sufficient to provide
for the debiting against its account of these
checks. We wifi assume that there are 40
banks which agree to this plan at the start.
Any one of these 40 banks having checks upon
the other 39 banks will forward them all to the
Federal Reserve Bank of Dallas, and receive
immediate credit. It will, of course, have to
stand an immediate debit on tiie books of the
Federal Reserve Bank of all checks drawn
upon itself received by the Reserve Bank from
the other 39 banks, so that the net result to
any one bank is merely a balance, and it will at
the same time have been convenienced by
having to write only one remittance letter
instead of a great many, and by receiving only

one incoming letter from the Federal Reserve
Bank, instead of perhaps 39.
Parties receiving checks upon any of these
40 banks will soon appreciate the fact that
they are collectible at once, without change,
ana, therefore, are as desirable as checks on
New York, Chicago, or St. Louis have been
hitherto. There will thus be established a
preference for checks drawn on these banks,
and parties remitting in payment of bills
checks on banks not connected with this clear
ing plan will soon be brought to realize that
checks drawn on banks in the clearing system
are preferred. If a merchant in Sherman finds
that by reason of his bank being a member of
the clearing system that his checks are received
without question, he will appreciate the facil
ity given him, but if a merchant in Texar
kana, for instance, finds that by reason of his
bank not being a member of the clearing sys
tem, he is charged exchange upon the checks
that he sends out, while his competitor in
Sherman or Waco is exempt from such charge,
he will soon, no doubt, exert enough pressure
upon his own bank to induce it to become a
member of the clearing system. If Galveston,
Austin, and Fort Wortn, as well as Dallas,
should all be members of the clearing system,
merchants in all these towns would enjoy the
same advantage, and in the course of time the
banks in Amarillo; for instance, would find
that they would lose business by remaining
out, and would, I think, as a matter of busi
ness necessity, finally become members of the
clearing system. The Federal reserve act does
not, of course, become entirely effective as far
as its reserve requirements are concerned until
three years from November 16, 1914, or until
November 16, 1917, after which time the entire
reserve of a member bank must be partly in its
own vaults and partly with the Federal reserve
bank of its district. It is thought that during
this time there will be a gradual accession to
the number of banks assenting to the new
clearing plan, and after the fall of 1917 it is not
believed that many banks who have customers
sending their checks to distant points will fail
to become members of the clearing section. As
balances with other member banks will then
no longer count as reserve, surplus funds will
be loaned, rather than kept with other banks
to control collections.
We ought to look this matter squarely in the
face, and should realize that we must give and
take, that we could not in any event have ex
pected permanently to be able to make a

charge of from 15 to 25 cents per hundred on
checks sent us for collection, at the same time
collecting all of our out-of-town checks without
any cost whatever. The banks in the smaller
towns will learn, as the city banks have already
learned, to make up losses in exchange by add
ing to their volume of business, and while at
first thought many of you may feel that there
is little chance of increasing the volume of
business in your own towns, I am sure that as
the workings of the Federal Reserve System
become better known, and the safeguards it
offers are more fully appreciated, that any
money now being hoarded in your communities
will come into sight and be deposited with you,
and with the development of your section
your business will expand in a healthy way.
You have been given facilities, whether you
borrow your money from the Federal Reserve
Bank or not, of getting all the rediscounts to
which you are entitled at lower rates than
ever before. You will soon realize that there
is no longer occasion for you to hoard money
by carrying abnormally large reserves, and
before the new reserve requirements under the
act are fully effective I am sure that you will
all have found that you can more than recoup
your losses in the way of exchange profits by
the gains derived through a greater volume of
business.
What I have just said relates to the clearing
of checks between banks in the same Federal
reserve district, but the broader question of
exchanges between the respective Federal
Reserve Banks has also been considered by the
Federal Reserve Board. It is proposed to obvi
ate as far as possible the necessity for an actual
transfer of currency from one Federal reserve
district to another, and I think we have seen for
the last time the stringency which has been
recurring every fall during the active cropmoving period. Member banks will no longer
be obliged to undergo the expense of nor to
suffer the inconvenience due to delays attached
to shipping in currency from the old reserve
cities, but their currency requirements will
instead be abundantly and quickly supplied at
a minimum cost by their Federal Reserve Bank.
The money that you will use in handling the
crop next fall will consist largely of Federal
reserve notes, which will stay in circulation as
long as needed, and when the crop movement is
over and the notes become redundant they will
find their way back to the Federal Reserve
Bank, where they will be retired., The abnor
mally high rates to which we have become
accustomed during the closing months of the
64995— 15------ 2

year will no longer obtain, nor will there be the
usual demoralization of rates in the early spring
due to the heavy flow of redundant currency
into the great financial centers. Your cotton
drafts can, if you wish, still continue to take
their usual course, and I presume that you will
prefer to send them direct in order to avoid
delays in transit. You can, however, instruct
your correspondent bank to make deposit with
the nearest Federal Reserve Bank for the credit
of your Federal Reserve Bank for your use, and
you can order Federal reserve notes from your
own Federal Reserve Bank against such depos
its as made. Many years will doubtless elapse
before uniform interest rates prevail throughout
the country. Under present conditions money
will continue to command higher rates in Hous
ton, Dallas, and Waco than it will in New York,
Chicago, or Boston, but the rates will certainly
be stabilized and extreme fluctuations will
cease.
Section 16 of the Federal reserve act pro
vides that—
“ The Federal Reserve Board shall make and
promulgate from time to time regulations gov
erning the transfer of funds and charges there
for among Federal Reserve Banks and their
branches, and may, at its discretion, exercise
the functions of a clearing house for such Fed
eral Reserve Banks, or may designate a Federal
Reserve Bank to exercise such functions, and
may also require each such bank to exercise
the functions of a clearing house for its member
banks.”
The Board has accordingly, after conferences
with the Federal reserve agents and the gov
ernors of the several Federal Reserve Banks,
decided to establish a gold settlement fund, to
be carried in the Treasury at Washington, and
to which each Federal Reserve Bank shall
contribute $1,000,000 in gold, gold certificates,
or gold order certificates, in addition to an
amount at least equal to the net indebtedness
due to all Federal Reserve Banks as of May 24.
Each Federal Reserve Bank will be required to
keep at all times in this fund a balance of not
less than $1,000,000, and this balance will count
as a part of its lawful reserve. At the close of
business each Wednesday night (or when
Wednesday is a holiday, Tuesday night) each
Federal Reserve Bank will telegraph to the
Federal Reserve Board the amounts, in'even
thousands, due to the other Federal Reserve
Banks as of that date, and on each Thursday
the settling agent of the Federal Reserve Board
will make the proper debits and credits in the

accounts of each Federal Reserve Bank with
the fund, telegraphing each bank the amounts,
in even thousands, of credits to its settlement
account, giving the names of each bank from
whom received, and also giving the net debit
or credit balance in the weekly settlement.
Proper debits and credits will tnen be made
upon the books of each Federal Reserve Bank.
In case the debit settlement balance of any
Federal Reserve Bank should be in excess of
the amount to its credit in the gold settlement
fund, such deficiency must be immediately
covered either by the deposit of gold, gold
certificates, or gold order certificates in the
Treasury or any subtreasury, or by credit
operations, which term includes rediscounts
with other Federal Reserve Banks which have
an excess balance in the gold settlement fund.
Excess balances may remain in the fund to
the credit of the banks to whom they are due,
or they may, if desired, be refunded by the
return to the reserve bank of gold order certifi
cates, properly indorsed, or of gold certifi
cates payable to bearer, and, whenever practi
cable, payments will be made by the nearest
subtreasury.
I am violating no confidence when I say that
the Federal Reserve Board dosires earnestly to
have the State banks become members of the
Federal Reserve System. The Board feels that
the membership of the State institutions is es
sential to the coordinated banking system that
it wishes to establish, and realizes that there
can be but one credit system of nation-wide
extent. It fully appreciates that the strength
of the Federal Reserve System must be gauged
by the q u a l i t y of its members, rather than by
number, and it will use all the broad discre
tionary powers vested in it by the Federal re
serve act to bring about this coordination. It
seeks to establish only such reasonable stand
ards of admission as will be generally recog
nized as necessary to protect the Federal Re
serve System against the admission of banks
which would be a source of weakness rather
than of strength, and it intends to prescribe
only such regulations governing their conduct
as members as will insure a reasonable con
formity to the fundamental principles deemed
essential to the success of the new banking sys
tem. The banks of this country are beginning
to realize that membership in the Federal Re
serve System carries with it privileges and
guaranties of great value, not only to them
selves but to their customers as well. It is
believed that membership in the system will
come to be regarded as a test of banking solid

ity, and that membership, giving as it does full
access to the facilities and resources of the sys
tem, will add to the prestige of even the strong
est institutions, so that in the course of time
the public will, instead of drawing a distinction
as heretofore between national banks and State
hanks, will distinguish rather between banks
which belong to the Federal Reserve System and
the banks which do. not belong, so that ulti
mately little importance will attach to the
terms “ National banks” and “ State banks,”
and banks will be classified as “ member banks”
or “ nonmember banks.”
Section 9 of the Federal reserve act requires
that State banks becoming members of the
Federal Reserve System must comply with cer
tain general requirements which now apply
to national banks. The minimum capital per
mitted is $25,000, and this requirement as to
capital-is raised according to the population of
the town in which the bank is located, so that
in cities of more than 50,000 inhabitants the
minimum capital allowed will be $200,000.
State banks becoming members must also con
form to the provisions of law governing na
tional banks regarding the limitation of liabil
ity which may be incurred by any person,
firm, or corporation to such banks, the prohi
bition of purchases of or loans upon their own
stock, the withdrawal or impairment of cap
ital, and the payment of unearned dividends.
The Board is not disposed to make any hard
and fast rules respecting loans upon real estate
or mortgages by State banks who wish to be
come members. It will seek rather to provide
reasonable limitations, so that loans or invest
ments of this character will not be so excessive
in amount as to endanger the bank’s liquid
condition.
The important question of examinations has
been fully considered by the Board. As ad
mission to the system will be regarded as evi
dence of a bank’s strength, the Board must
necessarily have accurate and reliable informa
tion regarding the condition of an applying
bank and the character of its management.
Examinations must, therefore, be under the
direction of the Board, but it will as far as
possible avoid imposing additional expense
upon a bank by adopting a method of joint or
supplementary examination in cooperation with
State banking authorities. It will use ex
aminers and auditors in the employ of the
respective Federal Reserve Banks in supple
menting the examinations conducted by the
banking departments of the several States,
and in .passing upon applications for member

ship the Board will appreciate the cooperation
of the State banking authorities.
The membership of State banking institu
tions in the Federal Reserve System differs
from that of national banks in being optional,
and the Board has felt from the start that the
directors of State banks should be given the
right to terminate their banks’ membership in
case they should deem it advantageous to do
so. The Board does not believe that State
banks after becoming members will wish to
withdraw from the system which offers so
many advantages, but at the same time it
recognizes the responsibilities attached to the
management of the State banks, and having
received ample assurances from high legal
authorities as to its powers it will, I think,
reach the conclusion that the State bank mem
bers may, with reasonable limitations as to the
maximum withdrawal of capital and reserves
during any one year, surrender their member
ship should they elect to do so. I am sure
that the Board will define its position in this
matter clearly within a very short time.
Permit me, in closing, to impress upon you
all the fact that we are living in a critical period
of the world’s history. The sun never sets
upon the lands that are sending troops to en
gage in the most stupendous conflict of all the
ages, and the toll in human lives and in destruc
tion of property is enormous. The money cost
of this war and the indebtedness of the nations
party to it are beyond the comprehension of the
average mind. No one can predict the duration
of this titanic struggle nor its ultimate out
come, nor can we foretell what readjustments
of capital must be made between the nations
after the restoration of peace. We were able
last summer to withstand the shock occasioned
by the outbreak of war by putting into circula
tion over $300,000,000 of emergency currency,
now practically all retired or in process of retire
ment. After June 30, however, the law will
no longer permit such issues, and such currency
expansion as may be necessary in future will be
in the form of Federal reserve notes. The
Federal Reserve Banks can ultimately provide,
even without the State banks as members, an
emergency issue more than three times as large
as the maximum outstanding last year, but it
can extend direct aid to member banks only.
Those of you who control the destinies of State
banks are earnestly invited to bring your insti
tutions under the protecting aegis of the Federal
Reserve System, and I confidently believe that
in doing so not only will you promote your own
interests but you will perform at the same time
a patriotic act by adding to the power of the
world’s strongest banking system.

Form for Discount Rates.
That the recommendations in connection
with discount rates from the 12 Federal Reserve
Banks may be uniform, the Federal Reserve
Board has prepared the following form for such
recommendations. It is to be forwarded to
reach the Board not later than Thursday morn
ing of each week:
D a te --------- , 1915.
Federal R eserve B oard,

Washington, D . C.

Sir : I have the honor to forward the recommendation
that no change be made in the existing discount rates for
the Federal Reserve Bank o f --------- for the week ending
Thursday--------- , 1915.
Respectfully,

Federal Reserve Agent.
I have the honor to request that the following rates be
approved by the Federal Reserve Board for the Federal
Reserve Bank o f --------- to become effective Friday morn
ing, --------- , 1915:
RECOMMENDED RATES.
Maturities, in days.
30.

31 to 60.

61 to 90.

Agricultural
and live-stock
paper over
90.

Acceptances.

PRESENT RATES.

Respectfully,

Federal Reserve Agent.

Acceptances to 100 per cent.
Below is given a list of member banks
authorized to accept up to 100 per cent of
their capital and surplus under circular 12,
regulation K :
First National Bank, Boston, Mass.
National Shawmut Bank, Boston, Mass.
American Exchange National Bank, New York City.
Merchants Exchange National Bank, New York City.
Bank of New York, N. B. A., New York City.
Merchants National Bank, Richmond, Va.
Commercial National Bank, New Orleans, La.
First National Bank, Chicago, 111.
Anglo and London Paris National Bank, San Francisco,
Cal.
Bank of California, N. A., San Francisco, Cal.
Crocker National Bank, San Francisco, Cal.
First National Bank, San Francisco, Cal.
Wells-Fargo Nevada National Bank, San Francisco, Cal.

INFORMAL RULINGS OF THE BOARD.
• Below are reproduced letters sent out from
time to time over the signatures of the offi
cers of the Federal Reserve Board, which con
tain information believed to be of general
interest to Federal Reserve Banks and member
banks of the system:
Paper o f Financing Companies.

In answer to your letter of November 17
and subsequent communication of November
20, you are advised that the question, how to
deal with paper issued by finance companies,
has been carefully considered and that the
Board is of opinion that collateral trust notes
of the kind you describe ought not to be ac
cepted by Federal Reserve Banks as a basis
for discounts.
The Board feels that paper of the kind
referred to does not afford sufficient evidence
of the nature of the transaction which gave
rise to it, while the obligation itself presented
by one of these finance companies is cer
tainly not inherently a commercial one. You
are therefore informed that it is not considered
desirable to encourage the offering of such
paper by member banks.
D ecember 18, 1914.

Loans for Agricultural Purposes.

You are right in supposing that the 25 per
cent limit applies only to the proceeds of loans
used for agricultural purposes or based on live
stock, provided the maturities of these notes ex
ceed three months. In other words, the limi
tation applies only to paper having maturity
in excess of 90 days.
As to the question whether notes bearing the
indorsement of nonmember banks are eligible
for rediscount, you are advised that the matter
is one that is now under very careful considera
tion for the purpose of establishing general reg
ulations regarding the relation of State banks
to the new system in various connections.
The question you raise as to whether the
direct note of a member bank can be redis
counted has already been fully covered in
other connections, as I believe that we have
sent you copies of replies to other Federal
reserve agents dealing with this point— the

answer being in the negative, i. e., that such
direct notes can not be rediscounted.
Live stock, the Board thinks, should include
not only beef cattle, but horses and mules.
January 2, 1915.

Agricultural Loan M ortgages.

You are advised that in the opinion of the
Board the Federal reserve act certainly does
not require the taking of chattel mortgages as
security for loans based on agricultural opera
tions. In the dealings of the Federal Reserve
Banks with member banks, the statement
of the member bank that the loan is desired for
agricultural operations must, under ordinary
circumstances at least, necessarily be accepted
as to the purpose for which the funds are
acquired. So, also, from the standpoint of the
member bank itself, it would seem clear that if
the act is to be of any real service to the agri
cultural community, it would not seem prac
ticable to enter into an exhaustive inquiry
as to whether any minute part of the loan has
been or may be used directly or indirectly for
the support of the farmer while preparing the
soil for cultivation or for feeding his cattle.
It would, on the contrary, seem to be sufficient
if the direct primary purpose of the loan is for
the purpose of carrying on the ordinary opera
tions of agriculture.
You further ask wdiether in section 13 of the
Federal reserve act, in dealing with six-months’
agricultural paper, the words “ based on ”
should be considered synonymous with “ se
cured by.” The language of the act is—
“ provided that notes, drafts, and bills drawn
or issued for agricultural purposes or based on
live stock,” etc.
The Board does not understand that such
agricultural paper must be directly secured by
agricultural products. It would seem to be
sufficient if they are genuinely based upon
transactions entered into for the purposes of
agricultural operations.
In conclusion, I would state that these
questions must be handled with general bank
ing prudence, using all the knowledge of local
conditions which the directors of the bank
must possess.
January 9, 1915.

Cotton-mill Paper.

At a meeting of the Board yesterday Mr.
----------brought up the matter of discounts by
your bank, upon the indorsement of member
banks, of notes made by cotton mills whose
statements do not show an excess of quick as
sets over current liabilities.
I am authorized and directed by the Board
to say that, the new discount regulations were
not intended to reverse the ruling previously
made by the Board in the matter of discounts
of cotton-mill paper by your bank, and your
directors are authorized to discount such paper
as heretofore where general conditions are sat
isfactory, and where the statement of the cot
ton mill shows that the plant is not mortgaged,
and that the deficiency between capital and
plant account does not amount to more than $5
per spindle.
F ebruary 11, 1915.

which were accepted by the depositor at the
time the account was opened under which the
depositor may be required by the bank to give
notice of intended withdrawal not less than
30 days before the withdrawal is made.
The pass book which you inclosed refers to
accounts which may be classed as savings
accounts, provided that such deposits are not
subject to check. If, however, the depositor
has the privilege of drawing checks on the
account in your interest department, under
regulation E issued by the board, your bank
will be required to carry full 12 per cent
reserve against such accounts. If withdrawals
can only be made upon the presentation of
pass books, such accounts may be classed as
“ time savings accounts” upon which it will be
necessary to carry but 5 per cent reserve.
F ebruary 4, 1915.
Stock Notice to Banks.

Tim e Deposits and Savings Accounts.

Receipt is acknowledged of your letter of
February 2, referring to the interpretation of
the term “ Time deposits.”
In your letter you quote from Circular No. 6,’
series 1915. In this connection your atten
tion is called to regulation E, which was
attached to the circular above referred to, and
in which the distinction between time deposits,
time certificates of deposit, and savings
accounts is made clear.
All deposits are subject to full reserve except
the following:
1. “ Time deposits— open accounts.” This
refers to accounts which are subject to check
but that under written agreement “ neither the
whole or any part of such deposit” may be
withdrawn except on a given date on written
notice given in advance, in no case less than
30 days. In this connection it will be noted
that the date of payment must be fixed before
such accounts may be classed as time deposits.
2. “ Time certificates of deposits” refers to
those deposits which are evidenced by cer
tificates (a) which have a fixed maturity; (6)
which are payable after lapse of specified num
ber of days; (c) or upon written notice given
at least 30 days before the date of repayment.
3. “ Savings accounts.” This item refers to
accounts which are evidenced by (a) pass book,
certificate of deposit, or similar form of receipt,
which must be presented to the bank whenever
a deposit or withdrawal is made; and (i ) which
accounts are subject to printed regulations

It is believed that a system of notifying mem
ber banks of the approval of applications for
stock which will be more satisfactory to the
Federal Reserve Banks can be adopted. It has
heretofore been the practice of the Federal Re
serve Board to send a notice of call for the pay
ment of the first installment of subscription
directly to the member bank, and at the same
time advising the Federal reserve agent of the
district of this action. This system will be
more satisfactory to all if the member banks
receive notice of the approval of their applica
tions for stock directly from the Federal Re
serve Banks, and to accomplish this the follow
ing procedure will in the future be observed:
Under the law new banks can be required to
pay one-half of their subscription at the time
of taking out stock. Upon the receipt of notice
from the Board of the allotment of stock to such
banks the Federal reserve agents can notify the
banks and require the necessary payments to
place them on the same footing as those which
originally entered the system, until May 2,
1915, when the third installment is payable,
and then require payment in full of the required
3 per cent.
The Board has been advised that in the issu
ance of additional stock member banks very
frequently prefer to pay one-half of their sub
scription at the time the stock is issued, thereby
avoiding the inconvenience of three small pay
ments. Under the law this can not be re
quired, but the option should, it would seem,
be given. Therefore, upon receipt of notice
from the Board of allotment of additional stock,

the Federal reserve agents should advise the ap
plicant banks and extend to them the option
of paying the installment necessary to place it
on the same footing as other stock held by them.
It is believed if tne foregoing procedure is fol
lowed, so *that all stock will be upon the same
footing as regards payments, the work of keep
ing accounts will be greatly simplified both for
the Federal Reserve Banks and tor the Federal
Reserve Board.
M arch 10, 1915.

Adjustment of Stock Ledgers.
In order to obviate the necessity for daily
adjustment of the stock ledger accounts ana
the consequent confusion which results from
continuous changes in the stock holdings of
member banks occasioned by the increase or
decrease of their capital or surplus, you will
please request all member banks to file their
applications quarterly— that is, on the 1st
day of January, Apnl, July, and October of
each year— in all cases where additional stock
is to be applied for, or where member banks
desire to surrender and cancel a part of the
stock held.
In making applications for additional stock
or for surrender of stock, banks should exercise
care to see that the blanks are properly filled
in, using as a basis the total capital and surplus
at the time of their last previous stock allot
ment, and stating the total of all increases and
decreases in capital or surplus, separately, so
that the total at the date o f the prior allotment
plus the increases and less the decreases, will
equal the total capital and surplus as of date
oi application.
Those national banks which have increased
or decreased their surplus since the last report
of condition to the Comptroller of the Currency,
should send a certificate to that effect to the
Comptroller contemporaneously with filingtheir
applications with the Federal Reserve Bank,
in order that the records of the Comptroller’s
office may be in accord with those of the Federal
Reserve Board.
In the case of changes in capital, this addi
tional certificate will be unnecessary, in view
of the fact that the Comptroller’s approval must
be obtained prior to any such change, and the
records of his office must necessarily conform
in such case.
M arch 13, 1915.

Mortgages Secured by Live Stock.
The Federal Reserve Board has received a
letter under date of March 9 from Mr. R. L.
Van Zandt, in which he asks whether paragraph
3 of Circular No. 3 covers a bill specifically
secured by a chattel mortgage on cattle.
The Board is of the opmion that there is
nothing to require a mortgage on cattle, and
that the question whether such paper is selfliquidating when so secured is a matter that
can be settled very much better at your bank
than here, inasmuch as it is a matter of local
usage and custom as to which we have no
reliable information. The requirement in the
case is merely that the general principles of the
regulation referred to Be observed according
to the best judgment of the officers in charge.
M arch 17,1915.

Discount of Renewal Notes.
Your letter of March 15 raises a very inter
esting question of principle in the operation
of a Reserve Bank, to wit, the question whether
it is proper for a Reserve Bank to discount a
note which is obviously a renewal. Broadly
stated, the question can not be answered by an
invariable “ yes” or “ no.” A renewal as
such is neither “ eligible” nor “ ineligible.”
There are good renewals and bad renewals;
and it is a matter for banking judgment to
determine the merits of each particular case
by a knowledge of the circumstances in which
both the original loan and the renewal have
been made. It is clear that paper successively
jmnftwp.d for the, purpose of pjxmding-~a^permanenlL addition to^ wxukiag capital^M^ior-the
purpose.of financing jixgd investments is not
eligible for rediscount by a Federal Reserve
Bank; on the other hand, paper that is_j2Hr
questionably, self-liquidating, even though the
'transaction which gives rise to it does not
liquidate itself within the limits of a 90-day
maturity, might be discounted by a Federal
Reserve Bank even though it appeared that
it was renewal paper. There are many proc
esses of production which take a longer time
than 90 days; and while no Federal Reserve
Bank should ever enter into an agreement for
the renewal of discounted paper, nevertheless
in cases where the “ process oi production and
distribution ” covers a period longer than 90
days there is no reason why a borrower should
not renew his 90-day borrowing; and, in such

case, there is no reason why a member bank
should not purchase the paper and a Federal
Reserve Bank discount it if it is otherwise sat
isfactory and at the then prevailing rate. It
would be a mistake for a Federal Reserve Bank
as a matter of principle to refuse to buy paper
based on transactions of this kind. At the
same time they must be counseled to exercise
great care in scrutinizing the paper and trans
actions that have given rise to it, in order to
determine whether it is of the character above
described as legitimate and notjusefLaa^a.scre^u
for financing fixed.invesfm pn ts or for the pur
pose of providing additional working capital.
As the circulars and regulations of the Federal
Reserve Board have undertaken to state the
fundamental principle, it is the liquidity of the
paper that must be looked to to determine its
eligibility, and liquidity should not be tested
by standards that are too narrow, arbitrary, or
inflexible. Such mechanical rules must not be
allowed to take the place of a discriminating
banking judgment.
A p r i l 27, 1915.

reserve agent. It is, however, permitted under
the terms of the Federal reserve act to carry
part of its required reserve with approved re
serve agents; but this is optional with a bank
and not mandatory upon it. I quote the fol
lowing from an opinion of counsel of the Federal
Reserve Board:
“ If the laws of South Carolina permit or re
quire State banks to carry a part of their re
serve with national banks, reserve so carried in
accordance with the State law may be counted
as reserve under the Federal reserve act, and
it is unnecessary for the State bank to have
such national bank approved as its reserve
agent unless the laws o f South Carolina so re
quire. If the laws of South Carolina do not
permit or require State banks to carry a part
of their reserve with national banks a State
bank might, under the previous paragraphs of
section 19, have a national bank in a reserve
or central reserve city approved as its reserve
agent and balances carried with such approved
reserve agent might be counted as reserve
under the Federal reserve act, but might not
be treated as reserve by the State authorities.
“ It, therefore, seems unnecessary for a State
Undivided Interests as Security.
bank to have a national bank approved as its
In answer to your letter of May 3, relative to reserve agent unless the laws of the State in
a loan secured by a mortgage upon one share which it is incorporated make this requirement.”
May 15, 1915.
of an undivided interest in a piece of farm
property, you are advised that the Board
agrees with the views you have expressed.
—
j
The mortgage on such share of an undivided N otes for Commercial Fertilizer.
interest would be very hard to reduce to
One of the Georgia member banks has made
possession in case it should become necessary to the Federal Reserve Board the following
to sell out the collateral, and moreover, the suggestion:
question would have to be investigated pretty
I learn that the Reserve Board has under
carefully whether the remaining nine-tenths consideration the question of admitting to
of the holders could not mortgage the property, rediscount notes given by farmers for com
provided that as we take it, it is now un mercial fertilizer, and having more than three
encumbered.
but less than six months to run.
These cases must, of course, be judged on
I want to suggest that unless a note given
their own merits, but looking at the question by a farmer for commercial fertilizer, to be used
merely as a matter of principle, as it is brought under his growing crop, constitutes an agri
before the Board, to lend on this type of paper cultural paper under the terms of the reserve
does not appear to be advisable.
bank act, I can not understand what character
May 7, 1915.
of paper would come under such description.
Below is the decision of the Board in the
matter:
Approved Reserve Agents.
I inclose you a copy of a letter with the sug
Replying to your letter of April 20 as to gestion that you transmit to the writer a reply
whether or not it is necessary for State banks indicating that the Board’s feeling is that a
which are members of a Federal reserve bank farmer’s six-months’ note of the kind herein
to have approved reserve agents, I beg to ad referred to, discounted and indorsed by a
vise you that there is nothing in the Federal member bank, is to be regarded as agricultural
reserve act which requires a member bank to paper eligible for rediscount by Federal Re
carry any part of its reserves with an approved serve Banks.

IMPORTS AND EXPORTS OF GOLD.
The Federal Reserve Board since January
1 of the present year has been in receipt of
weekly telegraphic reports from collectors of
customs showing the imports and exports of
gold ore, bullion, and coin. The tables below
show the totals, for the 17 weeks from January
1 to April 30 (brought into accord with the
figures of the Bureau of Foreign and Domestic
Commerce), and in addition for each of the
three weeks during the month of May, for
which telegraphic advices have been received.
Of the total of about 79.5 million dollars of
gold imported into this country during the first
20 weeks of the present year, 39.5 millions are
shown to have come by way of Ogdensburg (St.
Lawrence district), 18.7 millions via New York,
and 14.5 millions by way of San Francisco, the
imports through these three gateways consti
tuting almost 92 per cent of the total gold imports into this country. Comparisons with
previous years are possible only for the first
four months of the year.

The Bureau of Foreign and Domestic Com
merce gives the total gold imports during
January-April, 1915, as 61.4 million dollars,
compared with 25.0 million dollars during the
same period in 1914 and 19.9 million dollars in
1913. Over 60 per cent (37.7 million dollars) of
the imported gold came from Canada, about 5.6
millions from European countries, 5.5 millions
from Japan, 5.1 millions from China, and 3.3
millions from Mexico.
The exports of gold during the first 20 weeks
of the present year are shown to have been less
than 4.5 million dollars in value, almost 95 per
cent leaving the country via New York. Gold
exports for the first 4 months of the present
year totaled less than 3.5 million dollars, com
pared with 19.0 million dollars exported during
the corresponding period in 1914 and 50.7
million dollars in 1913. Practically all the
1gold exported was consigned to Central
|America, the West Indies, and South American
! countries, over two-thirds of the total gold
] exports going to Cuba.

Imports o f gold, by customs districts, Jan. 1 to May 21,1915.

50 10,582

28
3
2 !........
1

538
184

524

1,591

1,343

524

82
80

162

192

350
358
22
2,282

192

3,012

149

1,952
31,210
495

33,657

56
640

=====

1
640 !.........

2,246
20

2,430 •••.

I
5 !
3 .... 1

81 ___

7
42
146
56 . . . 1
311 1,099 490 ! 6,256 . . . .
21
....j
8,224

1,484
368
6

1,744

457 1,155 490

1,858

1,753

14,543

153 ___
80

9
80

54
660

1
660 39.520 |

251
984
2,501
504
4,240

10,835

5,223
2,592
36,433
495

61,446

272
251
10,257
55

5,223

1
8 ...J

3,566
13,896
34,333
9,651

1,297 | 1,338 80
288
5
6 ,
i............

498

30 .
3
;=— -■=
73 1 6
20 1 14
93

Total.

| Vermont.

1
St. Lawrence.

Michigan.

i
Dakota.

----------- 1

11,494

Buffalo.

Alaska.

Washington.

!
1
El Paso.

42
5,951
21
5,480

Southern Cali
fornia.

141 ! 45 I 42
' 289 .1,082 490
1
7
10 .......i......... 1......... ,
24 141 j 334 1,124 490

Ore and base bullion.............
2
15
3
Bullion, refined......................,.........
219
United States coin.................!.........
2,501
Foreign coin_______________!_____
6
1
Total............................. 1
3 15
2,728
=
For week ending Mag 14 .
Ore and base bullion.............
3
Bullion, refined......................I.........
140
United States coin...........................
22
Foreign coin........................... ..........
36
Total.............................
|
3
198
For week ending May 2 t
Ore and base bullion.............
9
Bullion, refined......................
167
United States coin.................
5,030
Foreign coin...........................
i 50
i
Total.............................
50 5,211
ja n . 1 to May %i.
1
1 60
1
Ore and base bullion.............
159
Bullion, refined......................
........ |4,363
10
____ 110.633 "*i"!
United States coin.................
A!
Foreign coin...........................
100 i 3,663 — j 10
1
Total.............................
1 100 |18,719
27 159

1 Arizona.
1

j
49
3,837
3,080
3,616

San Francisco.

Jan. 1 to Apr. SO.
1
Ore and base bullion.............
Bullion, refined____________
United States coin...........................
Foreign coin_______________1_____
Total.............................
I
1
F/Vm
fnrfi/nn
jr
Ti WCClwC
ivililly J\rn*i
jfJMy 7/• 1

1
1

Porto Rico.

i l l
!a*
1

Florida.

New York.

I f

Maryland.

■ I§

New Orleans.

j
i
i
j

[In thousands of dollars.]

4,439
15,489
47,112
12,439

3I 79,533

Exports of gold, by customs districts, Jan. 1 to May 21, 1915.
[In thousands of dollars.!
Maine
and
San
New Hawaii.
New
Alaska. Fran
Hamp York.
cisco.
shire.

Du
luth
and
Su
perior.

Michi
Wash
ington. Buffalo. gan.

St.
Law
rence.

Ver
mont.

4
2
4

119
7
32
2,385
940

3,483

Total.

Jan . 1 to A p r . SO.

118

2
31

3
17
3
5

151

U nited States mint, nr assav office bars......................

2
United States coin.........................................
.................... ........................
Total

.............................................

2,328
935

3,263

646

Foreign coin
3

1
1

F or week ending M ay 7.

United States coin.........................................

648

F or week ending M ay 14 .

United States coin..........................................

175

132

177

F or week ending M ay 21.

United States mint or assay office bars.......
United States coin.........................................
Total

.............................................

1
142

143

' Jan . 1 to M a y 21.
Ore and base bullion.....................................
United States mint or assay office bars........
"Bullion refined ..........................................
U nited States coin _
Foreign coin

Total

..................................

.........................

................................................

3,281
935

4,216

118

3
17

3
5

151

5
2

119
8
6

4
1

3,352
940
6

4,451

Standing Committees, Federal Reserve Board.
(1) Committee on Federal Reserve Board Organization and
Expenditures.
Mr. D elano, Chairman; Mr. H arding, Mr. Miller.
(a) Subcommittee, Organization and Staff:
Mr. Delano, Mr. Harding.
(b) Subcommittee, Budget and Expenditures:
Mr. Delano, Mr. Miller.
(2) Committee on Audit and Examination.
Mr. W illiams, Chairman; Mr. D elano, Mr. W arburg.
(3) Committee on Operation o f Federal Reserve Banks.
Mr. H amlin, Chairman; Mr. W arburg, Mr. H arding,
Mr. Delano, Mr. Miller.
(a) Subcommittee on Operation: Mr. Hamlin, Mr.
Warburg, Mr. Harding, Mr. Miller,Mr. Delano.
(b) Subcommittee on Discount Operations: Mr.
Warburg, Mr. Delano, Mr. Harding, Mr. Miller.
(4) Committee on Reports and Statistics.
Mr. Miller, Chairman; Mr. D elano, Mr. W illiams.
(5) Committee on Legal Matters.
Mr. H amlin, Chairman; Mr. W arburg, Mr. H arding.
(6) Committee on Admission o f State Banks.
Mr. H arding, Chairman; Mr. W illiams, Mr. W ar
burg.
94995— 15------3

*
(7) Committee on Issue and Redemption.
Mr. D elano, Chairman; Mr. W illiams, Mr. Miller.
(8) Executive Committee.
The Governor, the V ice Governor, Mr. W arburg.

Government Rate for Official Telegrams.
Both the Postal Telegraph Cable Co. and
the Western Union Telegraph Co. will accept
telegrams from Federal reserve agents when
they relate to the official business of the Fed
eral Reserve Board. Such telegrams should
be indorsed “ Official business, Government
rate, charge Federal Reserve Board.”
Messages from Federal Reserve Banks will
be accepted by the telegraph companies at
Government rates when indorsed “ Official
business, Government rate, collect.” Such
messages will be billed to the Federal Reserve
Board at Washington, D. C.

CIRCULARS AND REGULATIONS.
The circular and regulation given below
were issued by the Board on May 8.
CIRCULAR N O . 13, SERIES OF 1915.
W

a s h in g t o n ,

May 8,1915,

CLEARINGS BETWEEN FEDERAL RESERVE BANES.

Section 16 of the Federal reserve act authorizes the
Federal Reserve Board, at its discretion, to exercise the
functions of a clearing house for the Federal Reserve
Banks.
Pursuant to the authority of this section the Federal
Reserve Board has dev'sed a plan for the establishment
of a gold fund for the weekly settlement of balances arising
out of transactions among the 12 Federal Reserve Banks,
to be operated under the direction of the Federal Reserve
Board with the cooperation of the Treasury Department.
The regulation governing the establishment and opera
tion of this fund is issued herewith.

REGULATION L, SERIES OF 1915.
W

a s h in g t o n ,

May 8, 1915.

CLEARINGS BETWEEN FEDERAL RESERVE BANKS.

I. Statutory provisions under section 16.
“ The Federal Reserve Board shall make and promul
gate from time to time regulations governing the transfer
of funds and charges therefor among Federal Reserve
Banks and their branches, and may at its discretion exer
cise the functions of a clearing house for such Federal
Reserve Banks, or may designate a Federal Reserve Bank
to exercise such functions, and may also require each
such bank to exercise the functions of a clearing house for
its member banks.”
II. General provisions.
In the exercise of the functions of the clearing house
authorized under the provisions of section 16, quoted
above, the Federal Reserve Board and the Federal Re
serve Banks will be governed by and subject to the fol
lowing regulations and the Federal Reserve Board will be
the custodian of the funds hereinafter termed the “ gold
settlement fund.’ ’ The Board will appoint a settling
agent, who shall keep the necessary records and accounts.

certificates, and, in addition, an amount at least equal to
its net indebtedness due to all Federal Reserve Banks.
(h) The Treasurer of the United States or Assistant
Treasurer will, in accordance with arrangements made
with the Treasury Department, advise the Federal Reserve
Board, by mail or telegraph, of the receipt of all funds
deposited on account of the gold settlement fund, and the
Treasurer will issue and deliver to the Federal Reserve
Board gold order certificates made “ payable to the order
of the Federal Reserve Board” covering the sum so
deposited.
(c) Each Federal Reserve Bank shall maintain a balance
in the gold settlement fund of not less than $1,000,000.
(d) Excess balances may, at the convenience of each
Federal Reserve Bank, remain deposited with the gold
settlement fund.
IV. Custody o f funds.
(a) A safe in the Treasury vault will be set apart for the
exclusive use of the Federal Reserve Board.
(b) To open the Treasury vault, the presence of two per
sons designated by the Secretary of the Treasury is
required. The combination of the safe-set apart for the
use of the Board will be controlled by two persons desig
nated by the Board.
(c) A vault record shall be kept, giving a memorandum
of all entrances to the safe, by whom made, for what pur
pose, and the certificates deposited or withdrawn. Each
entry on the vault record book shall be signed by the
persons having access to the safe.
V. Accounts.
In its relations with other Federal Reserve Banks each
Federal Reserve Bank shall keep an account showing
balances “ due t o ” other Federal Reserve Banks repre
senting the proceeds of items which it has actually col
lected, and payments and transfers which have been made
to it for the account of such other Federal Reserve Banks;
and an account showing balances “ due from ” other Fed
eral Reserve Banks representing the proceeds of items
which it has sent to such other Federal Reserve Banks,
and payments and transfers which have been made to such
other Federal Reserve Banks for it account.
V I. Procedure.

(a) At the close of business each Wednesday night, each
Federal Reserve Bank shall telegraph to the Federal
Reserve Board, confirming such telegram by mail, the
amounts in even thousands due to each other Federal
III. Deposits in the gold settlement fund.
Reserve Bank as of that date, as indicated by its “ due to ”
(a)
Each Federal Reser\e Bank shall, not later thanaccount provided for in Rule V. If Wednesday is a
May 24, 1915, forward to the Treasury or the nearest sub- holiday in the State in which a Federal Reserve Bank is
treasury, for credit to the account of the gold settlement located, then such bank shall telegraph as herein provided
fund, $1,000,000 in gold, gold certificates, or gold order on Tuesday, at the close of business.

(6) The settling agent shall, on each Thursday, make to ship from one point to another in order to have the gold
the proper debits and credits in the accounts of each or gold certificates available at the sub treasury to which
Federal Reserve Bank with the gold settlement fund, such gold order certificates are presented, the Federal
and shall telegraph to each bank the amounts, in even Reserve Board will, for the account of the gold settlement
thousands, of credits to its settlement account, giving the fund, refund any expense incurred by the Treasury in
name of each Federal Reserve Bank from which each of making such shipments.
its credits was received and also its net debit or credit
IX . Reserve.
balance in the weekly settlement.
(c)
Each Federal Reserve Bank shall, on receipt of the
Each Federal Reserve Bank shall count as a part of its
telegram from the settling agent, debit the “ due to ”
legal reserve the funds standing to the credit of its account
Federal Reserve Banks’ accounts, and shall credit the
on the books of the gold settlement fund.
gold settlement fund; and shall credit the “ due from ”
Federal Reserve Banks’ accounts and charge the gold
X . Expenses.
settlement fund. The difference between the total debits
and credits shall equal the net debit or credit to the gold
Cost of operation of and shipment of currency by the
settlement fund, as advised in the telegram from the gold settlement fund shall be apportioned b y a semiannual
settling agent.
accounting among the 12 Federal Reserve Banks on a basis
V II. Deficits.
to be hereafter determined b y the Board after consultation
with the Federal Reserve Banks.
(a) Should the debit settlement balance of any Federal
Reserve Bank be in excess of the amount of its credit in
X I . Audit.
the gold settlement fund, such deficit must be immediately
A t least once in each three months an audit shall be made
covered either b y the deposit of gold, gold certificates, or
gold order certificates in the Treasury or nearest sub of the gold settlement fund b y a representative of the '
treasury, or by credit operations with other Federal Federal Reserve Board and a representative appointed
Reserve Banks which have an excess balance with the b y the Federal Reserve Banks.
gold settlement fund. Any delay in covering such deficit
shall be subject to such charge as the Federal Reserve
Board may impose.
(b) As required in III (c) of this regulation, each Federal
Reserve Bank shall maintain a balance in the gold settle
ment fund of not less than $1,000,000. Should the credit
balance of any Federal Reserve Bank in such fund fall
below $1,000,000, such bank shall restore its balance
to that amount in either manner indicated under V II (a)
of this regulation on or before Tuesday of the following
week.
V III. Excess balances.
Any excess balance shall, on request, either by telegraph
or letter, of the Federal Reserve Bank to which it is due,
be refunded by the return to the Reserve Bank of the
gold order certificates held by the gold settlement fund,
properly indorsed, or b y the indorsement and delivery
to the Treasurer of a like amount of such certificates, for
which he will give in exchange bearer gold certificates,
which the Federal Reserve Board may send by registered
mail, insured, to the banks, if they want funds other than
gold order certificates, or in lieu of such payment, the
Treasurer may by wire or mail direct payment to be made
by a subtreasury office through the medium of the general
account, provided funds are held in such office available
for the purpose. Gold order certificates will, when pre
sented at the office of the Treasurer of the United States
or any sub treasury, bearing the signatures of duly author
ized officers of the Federal Reserve Bank, be payable in
gold or gold certificates. If the Treasury finds it necessary

X II.
The Federal Reserve Board reserves the right to add to,
alter, or amend these regulations.

Aldrich-Vreeland Currency Outstanding.
There was on May 20 Aldrich-Vreeland cur
rency outstanding to the amount of $3,539,600.78. States in which the currency is held,
with the amounts, are as follows:
Alabama..........
California........
Florida............
Iowa.................
Kentucky.......
Louisiana........
Missouri...........
New Jersey___
New M exico...
North Carolina,
Pennsylvania..
South Carolina
Tennessee.......
Texas...............
Wisconsin........
Total

$214, 250.00
361.140.00
264, 000.00
433.150.00
25, 000.00
245, 450.00
30, 000.00
35, 000.00
85, 950.00
72, 500. 00
413, 872. 98
308, 787.80
150, 000.00
875, 500.00
25, 000.00
3, 539, 600. 78

DISTRIBUTION OF ALDRICH-VREELAND CURRENCY.
(Compiled by the Comptroller of the Currency.)

Aldrich- Vreeland Act circulation approved, classified as to kind o f security— Original applications.
Portions secured b y -

States.

Maine...................
New Hampshire..
Vermont..............
Massachusetts....
Rhode Island......
Connecticut.........
Total New England States.
New Y e tk ......... .
New York City.,
New Jersey...............
Pennsylvania.

Delaware.......................
Maryland.......................
District of Columbia___
Total Eastern States..
Virginia............
West Virginia . .
North Carolina.
South Carolina.
Georgia.............
Florida..............
Alabama...........
Mississippi........
Louisiana..........
Texas................
Arkansas...........
Kentucky.........
Tennessee.........
Total Southern States.
Ohio.........
Indiana___
Illinois. . . .
Michigan...
Wisconsin.
Minnesota.
Iowa.........
Missouri...
Total Middle States.
North Dakota.
South Dakota.
Nebraska.........
Kansas............
Montana.........
Wyoming........
Colorado.........
New Mexico...
Oklahoma.......
Total Western States.
Washington.
Oregon.........
California___
Idaho...........
Utah............
Nevada........
Arizona........
Alaska.........

Circulation
approved.

State and
Per
Per Miscellaneous Per
cent. county bonds. cent. securities.
cent.

9352,000

986,500

9175,500

990,000

’ 28,’ 674’ 506'

*3,’ 338,*266'

i2,324,050

*i3‘ 6i2,*256

46
49

**” 645*666'

” * 606,’ 666'

30,277,500

3,424,700

13,144,550

12,708,250

11,564,000
144,975,960
1,980,000
24,451,730

1,408,230
24,458,176
854,000
944,845

5,088,050
55,294,153
810,000
13,351,905

5,067,720
65,223,631
316.000
10,155,000

*’i*446*766'

**5,*i6i,'i6o'

” i*25i'666'

” *M6i,oo6'
637,000

268,000

Warehouse
receipts.

Per
cent.

364.000

191,777,710

29,297,451

76,252,808

86,227,451

6.458.100
323.000
4,037,450
3,285,380
6,289,625
1,368,500
4.662.400
1.572.000
4.155.000
18,136,300
624.000
5.150.400
4.968.100

937,950

708,100

732,600
410,750

41,625
69,350
6,200
10,500
181,000
129,000
414,750
346,0.50
43,750
1,214,200
607,200

72
100
57
79
87
58
75
37
69
91
74
63
80

$105,000

1,166,565
111,900
355.000
296.000
892,650
838,125
518,765
1,068,950

4,707,050
323,000
2,315,535
2,596,230
5.478.650
778.875
3,486,150
580.875
2,830,485
16,477,200
464,250
3,203,600
3.943.650

513,725
507,900
449,775
283,125
102,600
24,000
391,000
244,100
116,000

13
16
8
21
2
2
9
1
19

61,030,255

7,329,255

3,771,725

47,185,550

2,743,725

16.984.500
719,500
27.825.000
2.414.000
4.864.000
12.416.500
3,018,400
13.173.000

3.669.000
121,334
5,114,500
1.310.000
720,100
737.500
143.500
448,000

1,965,600
225.000
3,996,500

11,349,900
373,166
18.714.000
1.098.000
2.948.000
5.874.000
2,829,900
12.163.000

81,414,900

12,263,934

13,801,000

6,000

1,195,900
5,805,000
45,000
562.000
16

150,000
2,083,000
842,000

54.000
63.000

1,395,000
297,500
1,313,700

*ii9,’666'

” i 6*206'

6,081,200

561,875

772,900

530,000
2,053,000
13,110,250

245.000
895,904
212.000

325,875

10,000
23

746,700

1,186,750

55,349,966
150,000

100

2,029,000
769,000

322,425
297,500
1,146,500

23
100

32,000

4,714,425

32,000

127,500

” 4i*906'

41,900

Total Pacific States..

15,862,650

1,352,904

386,444,215

54,230,119

109,386,633

100

100
13,281,096

1,228,650
14

6,500

285,000
1,157,096
11,711,500

127,500

Total United States.

Commercial Per
cent.
paper.

220,466,678

57*

2,360,785

Aldrich- Vreeland Act circulation approved., by States and reserve cities.

States.

Total Banks
num receiv
ing
ber of circu
banks. lation.

By States.

Connecticut.. ....................

69
56
48
172
19
76

Total Northeastern
States.....................

440

30,277,500

New York City...................
New York...........................
New Jersey.........................
Pennsylvania......................
Delaware..... .......................
Maryland.............................
District of Columbia..........

38
441
202
837
25
101
13

32
39
7
54

144,975,960
11,564,000
1,980,000
24,451,750

18
12

8,169,000
637,000

Total
Eastern
States.....................

1,657

162

191,777,710

Virginia...............................
West Virginia.....................
North Carolina...................
South Carolina....................
Georgia................................
Florida................................
Alabama.............................
Mississippi...........................
Louisiana............................
Texas...................................
Arkansas.............................
Kentucky...........................
Tennessee............................

135
118
75
55
114
53
90
38
32
519
58
142
116

40
3
48
52
79
13
65
18
19
353
8
41
40

6,458,100
323,000
4,037,450
3,285,380
6,289,625
1,368,500
4,662,400
1.572.000
4.155.000
18,136,300
624,000
5,150,400
4,968,100

Total S o u t h e r n
States.....................

1,545

779

61,030,255

Maine..................................
Vermont _
............
Massachusetts.....................

$352,000

28,674,500

1,251,000

By reserve
cities.

States.

Ohio....................................
Indiana...............................
Illinois.................................
$24,944,500 , Michigan.............................
Wisconsin...........................
Minnesota...........................
Iowa....................................
Missouri..............................
24,944,500
Total Middle States..
144,975,960
3,045,000 North Dakota.....................
South Dakota ...................
21,957,750 Nebraska............................
Kansas...................... ..........
7,888,000 Montana..............................
637,000 Wyoming............................
Colorado..............................
New M exico.......................
178,503,710 Oklahoma...........................
3,271,000

3,150,000

2.370.000
6.349.000
2,947,000

18,087,000

Total Banks
num receiv
ing
ber of circu
banks. lation.

By States.

By reserve
cities.

377
254
465
100
131
274
343
130

57
9
20
7
16
18
56
24

$16,984,500
719,500
27,825,000
2.414.000
4.864.000
12,416,500
3,018,400
13,173,000

$11,834,000

2,074

207

81,414,900

71,037,000

149
106
220
213
61
32
125
38
346

150,000

12
13

2,083,000
842,000

1,994,000
469,500

5
7
52

i, 395,000
297,500
1,313,700

1,395,000

6,081,200

4,041,000

530,000
2,053,000
13,110,250

490,000
1,770,000
10,435,000

27.070.000
1.926.000
3.960.000
11.861.000
1.410.000
12,976,000

182,500

Total Western States. . .

1,290

Washington........................
Oregon................................
California............................
Idaho...................................
Utah...................................
Nevada................................
Arizona...............................
Alaska.................................

78
84
262
55
23
10
13
2

2
9
48;
2
1

41,900

15,862,650

12,695,000

1,363

386,444,215

309,308,210

Total Pacific States..

527

Hawaii...............................

Total United States..

7,538

127,500

Gold Settlement Fund.

The operation of the gold settlement fund
in Washington became an actuality with set
tlements between the twelve Federal Reserve
Banks made on Thursday, May 27. At this
time the gold deposits, as represented by
receipts from the Treasurer of the United
States for the fund, were $18,450,000.
Earlier in the month the Federal Reserve
Board had sent out to the twelve banks the
following letter:
The Board herewith encloses a regulation
concerning the operation of the gold settle
ment fund, and also instructions containing
a list of dates on which the various steps are to
be taken leading up to the establishment and
the beginning of the operations of this fund.
The question of transfers between Federal
Reserve Banks has been fully discussed with a
committee of governors on “ clearings” and the
report of that committee, dated May 6, 1915,
isnereto appended. The Board is in accord
with the prmciples and recommendations con
tained in this report and suggests that each
bank proceed promptly to prepare the nec
essary schedules and whatever instructions
may be thought appropriate for its own
member banks.
Forms to be used for the transfers are in
course of preparation by the above-named
committee ana will be transmitted to you in
due course.
Inclosed, herewith, is a revised time schedule
regulating the time allowance to be applied in
crediting or debiting accounts in connection
with transfers between member banks.
The documents referred to in the letter
follow :—
Instructions to Federal Reserve Banks rela
tive to the establishment of the gold settlement
fund:
(1) At close of business Wednesday, May 19,
1915, each Federal Reserve Bank will telegraph
to the Federal Reserve Board the amounts in
even thousands due to each other Federal
Reserve Bank as of that date.
(2) Thursday, May 20, settling agent will
telegraph to each bank the amounts of credits
to its settlement account, giving the name of
each bank from which such credits were re
ceived, also net debit or credit balance in
settlement. A confirmation will be sent bv
mail.

(3)
Each bank will be expected to forward
to the nearest subtreasury not later than Mon
day, May 24, 1915, in gold, gold certificates, or
fold order certificates properly indorsed, at
east $1,000,000, and in addition an amount
equal to its net debit balance as telegraphed
by the settling agent. Transfers of gold or
gold certificates should be credited to the ac
count of “ Gold bullion and U. S. coin” and
“ U. S.jgold certificates,” and charged to the
item “ Gold settlement fund” on the books of
the Federal Reserve Banks.
(4)
As soon as all transfers have been effected
each Federal Reserve Bank will be advised by
telegraph, at which time the transfer entries
should be made on the books of the bank.
Each Federal Reserve Bank will then debit the
due to Federal Reserve Banks’ accounts and
credit the settlement fund, and will credit the
due from Federal Reserve Banks’ accounts and
charge the settlement fund.
(5)
The second settlement will be made on
May 27 and figures telegraphed as at close of
business on May 26, and at weekly intervals
thereafter.

{

May 8, 1915.
REPORT OF THE COMMITTEE OF GOVERNORS.
W a s h i n g t o n , D . C ., May 6, 1915.
To the Federal Reserve Board:
The committee of governors, appointed to
consider collection matters, believes that, in
the interest of sound banking practice, trans
fers of funds by member banks through the
Federal Reserve Banks should be encouraged,
and that it will both induce and facilitate such
transfers if standard forms be prepared by all
the Federal Reserve Banks and distributed
among their members for general use. They
recommend that such forms be prepared, and,
if desired, suggestions for these forms will be
submitted by the committee.1
The committee on clearing further recom
mends that no stated charge be fixed for inter
district mail transfers to be made by Federal
Reserve Banks for their members, but that,
inasmuch as conditions vary greatly in the
several districts, and will fluctuate with the
seasons, each Federal Reserve Bank be allowed
to arrange its own schedule of charges to be
based upon the cost of the service rendered,
and adequate to protect it in its dealings with
its members. The cost of such transfers should
i A joint committee of the Board and the Federal Reserve Banks
has since prepared a set of forms which will be sent out shortly.

not exceed the expense of shipping currency to
the nearest subtreasury city.
It further recommends that a protective
charge is advisable upon all telegraphic trans
fers for members, and that such charge, when
made, shall include cost of telegraphing and the
interest on the sum transferred at a minimum
rate of 2 per cent, for the time required by a
Reserve Bank to make the transfer by mail in
accordance with the schedule hereto annexed.
Whenever a charge for mail transfers is im
posed, the protective charge for telegraphic
transfer shall be in addition thereto.
(Signed)

district n o .

First National Bank, Anniston, Ala.
LaGrange National Bank, LaGrange, Ga.
National City Bank, Mobile, Ala.
district n o .

Chairman.

Rockford National Bank, Rockford, 111.
Farmers National Bank, Valparaiso, Ind.
district n o .

Henderson National Bank, Henderson, K y.
Morganfield National Bank, Morganfield, Ky.
Citizens National Bank, Tell City, Ind.
district n o .

J. B. M cD ougal ,

10.

Colorado National Bank, Denver, Colo.
New England National Bank, Kansas City, Mo.

Average time (in days) to destination between Federal Re
serve Banks.

Trustee.

‘ ii*
i l •‘ 2*
12 2 *2*
12
1 2 ” 2
12
2
2
2
2
2
12
2
12
2
2
2
13
3
3
2
6
5 6
5

3
2
2
2
2
2
1
1
2

3
3
3
3
3
2
2
2
3
2

12*
4 *4

San Francisco.

2 2 3
2 2 2
2 2 2
i l 12 2
2 2 2
12 12 2
il
1
i*i‘
2
il ” 2
il il "2
12 12 3
14 14 4

[ Dallas.

Kansas City.

3
2
2
2
2

St. Louis.

Atlanta.

2
1
1
2

Chicago.

2
2
1

Minneapolis.

il
U

Richmond.

Philadelphia.

il
il
‘
i
i’
U
12 12
12 i l
13 12
12 12
12 12
13 12
13 12
13 13
6 16

Cleveland.

B oston................
New York..........
Philadelphia.......
Cleveland............
Richmond..........
Atlanta...............
Chicago...............
St. L o u is............
Minneapolis.......
Kansas City.......
Dallas.................
San Francisco...

New York.

Boston.

district n o .

6
6
6
6
6
6
4
4
4
4
4

....

i Indicates that items on the point at the top of the column may, at
the option of the Federal Reserve Bank, be taken for immediate credit
at par or at the market rate of exchange.

Trustee Powers.
Applications from the following banks for
permission to act under section 11 (k) of the
Federal reserve act have been approved since
the May issue of this Bulletin, as follows:
Trustee, executor, administrator, and registrar o f stocks and
bonds.
DISTRICT NO. 1.

Merchants National Bank, New Haven, Conn.
National Tradesmens Bank, New Haven, Conn.
Massasoit-Pocasset Bank, Fall River, Mass.
Peoples National Bank, Marlborough, Mass.
Mechanics National Bank, New Bedford, Mass.
Agricultural National Bank, Pittsfield, Mass.
Peoples National Bank, Brattleboro, Vt.
Citizens National Bank, Poultney, Vt.
district n o .

Peoples National Bank, Charleston, S. C.
National Bank of Charlottesville, Charlottesville, Va.
Citizens National Bank, Covington, Va.

Old Lowell National Bank, Lowell, Mass.
district n o .

Colquitt National Bank, Colquitt, Ga.
(Trustee for sinking fund of City of Colquitt, Ga.)
Trustee, executor, and administrator.
DISTRICT NO. 1.

Indian Head National Bank, Nashua, N. H.
district n o .

First National Bank, Quitman, Ga.
district n o .

First National Bank, Boyne City, Mich.
district n o .

Nokomis National Bank, Nokomis, 111.
Registrar o f stocks and bonds.
district n o .

First National Bank, Albany, N. Y .
Nassau National Bank, Brooklyn, N. Y.
Bank of New York, N. B. A., New York City.
Chase National Bank, New York City.
First National Bank, Saratoga Springs, N. Y.
National Newark Banking Co., Newark, N. J.
Trustee and registrar o f stocks and bonds.
DISTRICT NO. 4.

Huntington National Bank, Columbus, Ohio.
Trustee and executor.
DISTRICT NO. 11.

First National Bank, Bonham, Tex.
First National Bank, Granger, Tex.
Trustee, executor, and registrar o f stocks and bonds.
DISTRICT NO. 11.

First National Bank, Mexia, Tex.

ACCEPTANCES.
Acceptances, by classes, held by the Federal reserve banks each week.

Member
banks'
accept
ances.

Date.

1915.
May 3.............................. . ............................................................................................... $5,038,000
May 10................................................................................................ ...........................
5.226.000
May 1 7 . . . . . . . . : . . . . ......................................................................................................
5.784.000
May 24..............................................................................................................
5.144.000

Nonmember banks'
acceptances.
Trust
companies.

Private
bankers. -

Total.

$110,000
110,000
110,000
110,000

$13,347,000
10.713.000
11.485.000
9,286,000

State
banks.

$10,000
10,000
10,000
10,000

$8,189,000
5.367.000
5.601.000
4.022.000

Acceptances indorsed by member banks: Member bank acceptances, $596,000; trust company acceptances, $52,000; total, 1648,000.

Grand total......................

106

Per cent of total...............

$494,054 137 $2,272,041
638,933 119 2,188,451
l
10,046
20,000
6
89,896

381,309| 152 1.152,987 263 4,560,434
3.32;r... 1

10.04

Amount.

Total.
Number of
pieces.

* Amount.

Number of
pieces.

Amount.

Over $50,000 Over $100,000.
to $100,000.
Number of
pieces.

Amount.

Over $25,000
to $50,000.
Number of 1
pieces.
|

Amount.

Number of
pieces.

Amount.

Number of
pieces.

$173,174 ‘ 62
208,135 88

Over $10,000
to $2o,000.

45
61

Over $5,000
to $10,000.

1
Member banks...........................
Trust companies.................... '..
State banks................................
Private banks.................... *.___

Amount.

Class of acceptors.

Number of
pieces.

To $5,000.

44 $1,619,468
35 1,296,196

11
13

$943,172
962,064

2
2

1
1 V
*
79|2,915,664

$272,000 301 $5,773,909
298,130 318 5,591,909
1
10,046
s
109,896

24 1,905,236

570,130 628 11,485,760

39.70 ....[

25.39 . . . J

16.59

4.96

Per cent of total.

Distribution o f acceptances held by Federal reserve banks, as per schedules received by (he Federal Reserve Board, on May 17 ,
1915, by classes o f acceptors and sizes.

50. 27
48.68
.09
.96

100.00

Amounts o f acceptances held by the several Federal reserve banks at close o f business on the following Fridays: Apr. SO,
May 7, May 14, and May 21, 1915.

[In thousands of dollars.]

THE REDISTRICTING DECISION.
Shortly after its organization, the" Federal
Reserve Board received petitions from banks
located in several of the Federal reserve dis
tricts, asking the transfer of designated por
tions thereof to other districts. These peti
tions were filed under section 1 of the Federal
reserve act, which provides for an appeal from
the decision of the Organization Committee to
the Board, in the following language:
As soon as practicable * * * the Re
serve Bank Organization Committee shall desig
nate not less than eight nor more than twelve
cities to be known as Federal reserve cities,
and shall divide the continental United States,
excluding Alaska, into districts, each district
to contain only one of such Federal reserve
cities. The determination of said organization
committee shall not be subject to review ex
cept by the Federal Reserve Board when
organized: Provided, That the districts shall
be apportioned with due regard to the con
venience and customary course of business and
shall not necessarily be coterminous with any
State or States. The districts thus created
may be readjusted and new districts may from
time to time be created by the Federal Reserve
Board, not to exceed twelve in all. * * *
The Board, recognizing the general desire for
the establishment of the Federal reserve banks
at as early a date as practicable, determined to
defer the investigation and hearing of these
petitions until a later date, announcing, how
ever, that the action taken with reference to
the banks would not prejudice the decision to
be arrived at later, when the petitions should
come up for definite determination.
When the first pressure of work attending
the organization of the banks was over, dates
were set for the hearing of the petitions, and
during the months of January and February,
1915, all that had then been filed wire heard
by counsel. A detailed list of the dates set for
the hearings and a statement of other facts
relating to the proceedings were printed in
the First Annual Report of the Board (p. 192).
Subsequently the petition of certain banks in
Tennessee for transfer from district No. 6 to
district No. 5 was withdrawn, at least for the
94995— 15------ 4

time being. This left the following cases
pending before the Board.
(1) The petition of certain banks in northern
New Jersey for transfer from district No. 3 to
district No. 2.
(2) The petition of certain banks in West
Virginia for the transfer of the counties of Wetzb\ and Tyler from district No. 5 to No. 4.
(3) The petition of certain banks in Okla
homa for transfer from district No. 11 to dis
trict No. 10.
(4) The petition of certain banks in Ne
braska and Wyoming for transfer from district
No. 10 to No. 7.
(5) The petition of the city of Baltimore to
be designated as the headquarters of district
No. 5 in place of Richmond, Va.
(6) The petition of the city of Pittsburgh to
be designated as the headquarters of district
No. 4 in place of Cleveland, Ohio.
Meantime, on March 13, certain banks in
southern Wisconsin had filed a petition for
transfer from district No. 9 to district No. 7,
and still more recently, on May 10, certain
banks in Connecticut filed a petition for trans
fer from district No. 1 to district No. 2. These
last two petitions, however, were received at a
time when the Board had either decided or was
on the point of deciding the cases already pre
sented. They were consequently not included
in the action finally taken, but were reserved for
later hearing and adjudication.
When the arguments and briefs relating to
the petitions already enumerated were in hand,
they were apportioned to committees of the
Board. These committees reviewed the testi
mony and filed reports making recommenda
tions with regard to the best method of dis
posing of the subjects referred to them.
Action would then have been taken had it not
been for the necessary absence of some mem
bers of the Board. This necessitated a post
ponement of action during the latter part of
March and the whole of April. It was then
voted to take definite action respecting the
pending cases which had been heard at some
time during the week beginning May 3. In

accordance with this determination the Board
on May 4 passed the following resolution:
B e it resolved, That the recommendations of
the respective committees be adopted and
approved, and that the petitions of the banks
in southern Oklahoma, northern New Jersey,
Tyler and Wetzel Counties, West Virginia, be
granted; and,
Be it also resolved, That the petition of tKe
banks of Wyoming and Nebraska be denied;
and,
Be it further resolved, That action on other
pending petitions be deferred until further ex
perience m the actual operation of the several
districts, especially in the light of the new
clearing system which is about to go into effect,
and of the extent to which State banks take
membership in the Federal reserve system,
shall have provided the Board with the neces
sary data for a conclusion, it being the opinion
of the Board that action on petitions relating
to changes in cities designated as the location
of Federal reserve banks should be deferred
until the Board shall have reached a conclu
sion from experience as to any further read
justments in the boundaries of the several dis
tricts, or in the number of districts, which may
be desirable in the operation and development
of the Federal reserve system.
It will be seen that the Board in this decision
denied one of the petitions— that of Nebraska
and Wyoming— deferred action on two, those
of the cities of Baltimore and Pittsburgh, for
future consideration, and granted three, those
of the banks of New Jersey, West Virginia, and
Oklahoma.
In order to make plain exactly what changes
in the previous districts were made effective
by the granting of these three petitions, the
accompanying map has been drawn, and is
herewith presented for the purpose of showing
the boundaries of the twelve districts as they
stand to-day. Inasmuch as the map is drawn
upon too small a scale to admit of the clear
representation of counties, there is hereto
appended a list of counties in each of the States
affected by the redistricting.
The names and capitalization of the banks in
these transferred territories are likewise given.

N E W JE R S E Y .

Counties transferred to district No. 2.
Bergen.
Essex.
Hudson.
Hunterdon.
Middlesex.
Monmouth.

Morris.
Passaic.
Somerset.
Sussex.
Union.
Warren.

Counties remaining in district No,
Gloucester.
Mercer.
Ocean.
Salem.

Atlantic*
Burlington.
Camden.
Cape May.
Cumberland.

OKLAHOMA.

Counties transferred to district No.
Beckham.
Caddo.
Carter.
Comanche.
Custer.
Garvin.
Grady.
Greer.
Harmon.
Haskell.
Hughes.
Jackson.
Jefferson.

Kiowa.
Latimer.
Le Flore.
Love.
McClain.
Murray.
Pittsburg.
Pontotoc.
Roger Mills.
Stephens.
Tillman.
Washita.

Counties remaining in district No.
Johnston.
McCurtain.
Marshall.
Pushmataha.

Atoka.
Bryan.
Choctaw.
Coal.

W E S T V IR G IN IA .

In West Virginia the counties of Wetzel and Tyler were
transferred from district No. 5 to district No. 4.
N EW JERSEY.

List o f banks transferred to district No. 2.
Name of bank.

Farmers National.................
First National......................
Seacoast National.................
Atlantic Highlands National
First National......................
Do...................................
Belvidere National...............
Warren County National—

Location.
Allentown..............
Arlington...............
Asbury Park..........
Atlantic Highlands
Beleville.................
Belmar...................
Bellvidere..............
...... d o .....................

Capital and
surplus.

$100,000

81,000
175.000

100.000

225.000
75,000
175.000
100.000

n ew

jersey

—continued.

new

List o f banks transferred to district No. 2—Continued.

Name of bank.

Bernardsville National...................
First National................................
Peoples National............................
Bloomfield National......................
Citizens National............................
Boonton National...........................
Bound Brook National..................
First National................................
D o.............................................
D o............................................
D o.............................................
Citizens National............................
Caldwell National...........................
Califon National.............................
Carlstadt National.........................
Clinton National............................
First National.................................
D o ............................................
Closter National.............................
National Union..............................
First National.................................
D o.............................................
D o.............................................
D o.............................................
National State................................
Citizens National............................
First National.................................
Flemington National......................
Hunterton County National..........
First National................................
Central National.............................
First National................................
National Freehold Banking Co___
Union National..............................
First National................................
Do.............................................
Hackensack National.....................
Peoples National............................
Hackettstown National.................
Peoples National............................
Hardyston National.......................
First National................................
Do.............................................
Second National.............................
First National................................
Irvington National.........................
First National................................
Do.............................................
Hudson County National..............
Merchants National.......................
Keansburg National.......................
Peoples National...........................
Amwell National............................
Lambertville National...................
Little Falls National......................
First National................................
Citizens National............................
First National................................
Do.............................................
Do.............................................
Manasquan National......................
Farmers & Merchants National__
Metuchen National.........................
First National................................
D o ............................................
Essex National...............................
First National................................
National Iron.................................
First National................................
Citizens National............................
American National.........................
Broad-Market National.................
Essex County National.................
Manufacturers National.................
Merchants National... ...................
National Newark Banking Co.......
National State Bank......................
North Ward National....................
Union National..............................
National Bank of New Jersey.......
Peoples National............................
Merchants National........................
Sussex National..............................
Ocean Grove National....................
Orange National.............................
Second National.............................

Location.

Capital and
surplus.

Bernardsville..
Blairstown......
.......d o ..............
Bloomfield......
Bloomsbury...
Boonton..........
Bound Brook..
.......d o ..............
Bradley Beach.
Branchville__
Butler.............
Caldwell..........
.......d o..............
Califon.............
Carlstadt.........
Clinton............
___ do..............
Cranbury........
Closter.............
Dover..............
Dunellen.........
East Newark...
Eatontown......
Edgewater.......
Elizabeth........
Englewood___
Englishtown...
Flemington___
___ d o..............
Fort Lee..........
Freehold..........
___ d o..............
___ d o..............
Frenchtown....
Garfield...........
Guttenburg..
Hackensack.,
.do.
Hackettstown..
.......do..............
Hamburg........
High Bridge...
Hoboken.........
.......do..............
Hope...............
Irvington........
Jamesburg.......
Jersey City___

$50,000
50.000
75.000
150.000
25.000

. .d o.................
Keansburg..........
Keyport.............
Lambertville......
..d o .................
Little Falls.........
Lodi....................
Long Branch___
Lyndhurst..........
Madison..............
Manasquan.........
Matawan............
Metuchen...........
Milford...............
Milburn..............
Montclair............
..d o .................
Morristown.........
..d o .................
Netcong..............
Newark...............
..d o .................
.do.................
..d o .................
.d o .................
. .d o .................
..d o .................
..d o .................
.d o .................
New Brunswick..
..do.................
Newton...............
..do..................
Ocean Grove.......
Orange................
. .do.................

200.000

60.000
125.000
27.500
50.000
110.000
41.000
50.000
31.000
60.000
150.000
70.000
150.000
50.000
375.000
40.000
35.000
33.000
50.000
1 , 000,000

150.000
58.500
200.000
200,000

49.000
100,000

150.000
100.000
160,doo

64.000
75.000

200,000

300,000
250.000

jersey

—

continued.

List o f banks transferred to district No. 2—Continued.
Name of bank.

Location.

Passaic National............................
First National................................
Paterson National.........................
Second National.............................
First National................................
Phillipsburg National....................
Second National.............................
City National.................................
First National................................
Rahway National...........................
First National................................
Second National.............................
First National................................
D o............. ...............................
D o.............................................
D o.............................................
D o.............................................
Rutherford National......................
First National................................
D o.............................................
D o.............................................
Second National.............................
First National................................
D o.............................................
D o.............................................
D o.............................................
Farmers National...........................
First National.................................
D o.............................................
D o.............................................
National Bank...............................
Peoples National............................
National Bank of North Hudson..
First National................................
D o.............................................
D o.............................................
D o.............................................

Passaic.......................
Paterson......................
.......do..........................
.......do..........................
Perth Amboy.............
Phillipsburg...............
.......do..........................
Plainfield....................
.......do..........................
Rahway......................
Ramsey............. .........
Red Bank..................
Ridgefield Park
Ridgewood...
Rockaway..
Roosevelt.. .
Roselle..........
Rutherford...............
Sea Bright__
Secaucus____
Somerville__
.......do............
South Amboy.
South River.T._
Spring Lake...
Summit.. ..
Sussex.......................
Tenafly.......................
Town of Union. .
Washington..
Westfield....................
.......do______ _______
West Hoboken............
West Orange. . .
Westwood.................
Whitehouse Station...
Woodbridge... .

Capital and
surplus.
$550,000
1, 100,000
600,000
350.000
300.000
500.000
150.000
300.000
300.000
150.000
45.000
225.000
60.000
110.000
30.000
50.000
65.000
150.000
32,500
25.000
250.000
100.000
125.000
125.000
75.000
100.000
200,000
50.000
125.000
250.000
123,948
80.000
115.000
120.000
47.000
47.000
40.000

Total.....................................

32,071,448

100.000

85.000
30.000
660,000
400.000
32.000
145.000
75.000

OKLAHOM A.

List o f banks transferred to district No. 10.

1, 200,000

750.000
250.000
27.500
60.000
157.000
200.000

Name of bank.

The First National Bank...............
Merchants & Planters National__
First National.............1..................
Do.............................................
Do............................................
City National.................................
First National................................
D o ............................................
National Bank of............................
First National..:............................
D o ............................................
Ardmore National.........................
First National.................................
State National................................
First National.................................
D o ............................................
D o ............................................
Calvin National..............................
First National.................................
2,000,000 The Chickasha National................
750.000 Citizens National............................
First National.................................
1, 000,000
2 , 000,000 Oklahoma National.......................
750.000 First National................................
500.000 Oklahoma State National..............
3,000,000' First National.................................
500.000 Cordell National...........................
250.000 Farmers National...........................
190.000 State National................................
400.000 First Natipnal.........; ...................
50.000 Peoples State National............,___
300.000 First National................................
300.000 Citv National.................................
30.000
35.000
250.000
150.000
55.000
85.000
75.000
150.000
55.000
45.000
87.000
187,500
150.000
250.000
400.000
50.000
375.000
270.000

Location.

Ada..............................
.......do...........................
Addington..................
Alex............................
Allen.....................
Altus..............
.......do..........
Anadarko__
... .do..........
Apache..
Aranaho..
Ardmore........
.......do.............
.......do.......................
Berwyn.............
Bterir.......................
Blanchard................
Calvin......................
.......do.......................
Chickasha................
.......do.......................
.......do.......................
.......do..........................
C l i n t o n ........................

.......do..........................
C om an ch e............
C ordell..................

....... do..........................
........ d o ..........................
Custer City...............
.......do..........................
Davis.......................
Duncan.......................

Capital and
surplus.
$60,000
60,000
26,722
45.000
30.000
54.500
67,250
60.000
30.000
30.000
30.000
120,000
200.000
110,000
30.000
29.000
50.000
28.000
30.000
113,500
90.000
260,000
125,000
35.000
27,750
30.000
35.000
28.500
33.500
30.000
30.000
60.000
42,000

llA * ’

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MAP SHOWING FEDERAL R E SER VE D ISTR IC

JTH CHANGES B Y FE D E R A L RE SER VE BOARD.

b o s t 0 '*

Oklahoma — continued,

Oklahoma — continued.

List o f banks transferred to district N o. 10— Continued,

Name of bank.

Location.

Dunaan National............................
First National.................................
D o .............................................
D o ............................................
Francis National.............................
First National.................................
National Bank of Commerce.........
First NationrfL..............................
D o ............... .............................
Fanners National...........................
First National.................................
National Bank of...........................
First National.................................
State National................................
City National..................................
Fanners & Merchants National....
First National.................................
American National............. .....
Fanners National...........................
First National................................
City National.........'......................
National Bank of Commerce.......
State National................................
Farmers National...........................
First National................................
Keota National...............................
First National................................
Peoples National............................
City National..................................
First National................................
First National................................
Do.............................................
Do.............................................
Mangum National..........................
First National........T.......................
Marietta National...........................
The National Bank of....................
State National................................
Farmers National...........................
First National................................
American National.........................
City National..................................
First National................................
Do.............................................
Do.............................................
Do.............................................
Do.............................................
Do.............................................
National Bank of Commerce.........
Pauls Valley National...................
First National................................
National Bank o f...........................
The Chickasaw National...............
Union National..............................
First National................................
Do.............................................
Farmers & Merchants National....
First National.................................
Do.............................................
Do.............................................
Beckham County National............
First National................................
D o.............................................
Do.............................................
Do.............................................

Duncan. ...........
. : . . .do................
Eldorado...........
Elk City............
Francis..............
Frederick..........
.......do................
Gotedo...............
Grandfield.........
Hammon...........
Hartshorne........
Hastings............
Heavoner...........
.....d o ................
Hobart...............
.....d o ................
----- d o ....*.........
Holdenville.......
>.-.. .d o .* * ,. . . . . .
. . . . d o . . . . . .......
H o llis.............
___ d o................
___ d o ................
Hydro...............
___d o................
Keota.................
Kiowa...............
— d o................
Lawton.............
— d o................
Lindsay.............
Lone W olf.........
Mangum............
___ do................
Marietta............
___d o................
Marlow..............
— d o................
Maysville..........
___do................
McAlester..........
___d o................
___ d o................
Minco.................
Mountain View.
New Wilson___
Olustee..............
Pauls Valley___
___d o................
— do................
Poteau...............
— d o................
Percell...............
— d o................
Quinton............
Ringing............

First National................................
Do.............................................
D o.............................................
D o.............................................
Park National.................................
First National.................................
Temple National............................
First National.................................
First National.................................
National Bank of.
First National........
Walters National..
First National........
D o ...................
Waurika National.

.......do..........................
Stonewall....................
Stratford......................
Stuart..........................
Sulphur.......................
Talmina......................
Temple........................
Thomas.......................
Verden........................
___do...........
Walters........
___do...........
Washington.
Waurika.......
___do...........

___do................
Rush Springs...
Ryan.................
Sayre.................
___do................
Sentinel.............
Snyder...............
Spiro.................

Capital and
surplus.
$50,000
60,000
40.000
56.000
30.000
72.000
90.000
27,700
30.000
27,650
75.000
28.500
31.000 I
25.000
33.500
60.000
30.000
30.000
27.500

25.000
25,050
27.500
28.500
36.000
27.500
100,000
110,000

50.000
34.000
75.000
80.000
75.000
100,000

29,200
26,750
27.500
32.500
125.000
55.000
135.000
30.000
30.000
25.000
30.000
150.000
60.000
30.000
42.500
60.000
75.000
33.000
30.000
50,400
37.500
36.000
36.000
60.000
27.500
32.500
27.500
27.500
29.000
30.000
60.000
42.000
27.500
29.000
30.000
26,250
27.500
30.000
26.500
30.000
30.000
40.000
26.000
27,650
25.500

List o f banks transferred to district No. 10— Continued.
Name of bank.

Location.

First National.................................
German National...........................
American National.........................
First National.................................
Latimer County National..............
First National.................................
Southern National:___ *................

Weatherford...............
....... do..........................
Wetumka....................
....... do..........................
Wilburton...................
Wvnnewood...............

Capital and
surplus.
$28,500
60,000
30.000
35,500
29.000

100,000

...............

80.000

Total.....................................

5,994,873

W E S T V IR G IN IA .

List o f banks transferred to district No. 4.
Name of bank.

Location.

First National................................
Do.............................................
Farmers and Producers National..
First National.................................
Peoples National............................

Middleboume.............
New Martinsville
Sistersville...................
.......do..........................
....... do..........................

Total.....................................

Capital and
surplus.
$39,500
75,000
136.000
165.000
115.000
530,500

The pending cases divide themselves into
two broadly distinguishable classes, the one
involving extensive revision of the work al
ready done and requiring for its elucidation and
proper determination knowledge which could
come only from experience and observation of
the actual working of the several Federal re
serve banks; the other involving simpler and
less extensive interests and requiring less de
tailed information as to the whole problem
of districting.
The Board's announcement on the whole
subject, while going as far as it has been deemed
practicable under existing conditions to take
action, is not at all to be regarded as final and
was not intended to be so. The right to act
further on the matter is reserved for future ex
ercise as that may be necessary and at any
time. Although there has been no express
statement to that effect, it is a clear inference
from the opinion handed down that future action
will depend very much upon the course of
events in the districts as they are now made
up, and will be determined by the conditions
that are disclosed in the operations of the banks.

LAW DEPARTMENT.
The following opinions of counsel for the out of the context, expressly, or by necessary
Federal Reserve Board have been authorized implication. The words are to be taken in
for publication by the Board since the last their natural and obvious sense, and not in a
edition of the Bulletin.
sense unreasonably restricted or enlarged.”
In accordance with the decisions in these and
Discount o f Acceptances “ Based on the Importation or
other
cases, unless such a result is absurd or
Exportation of G oods.”
obviously
contrary to the intent of Congress,
Federal reserve banks may, under section 13 of the
Federal reserve act, discount acceptances based on the as shown by other parts of the act, the natural
shipment of goods (a) between the United States and and usual significance must be attached to the
any foreign country, (b) between any two or more foreign words “ importation ” and “ exportation.”
The
countries, and (c) between the continental United States
question,
therefore,
arises,
what
is
their
ordi
and Porto Rico, the Philippines, or the Canal Zone; but
not acceptances based on the shipment of goods between nary and popular meaning ?
In discussing this subject the corelative
the continental United States and Hawaii or between any
two parts.of the continental United States.
terms, “ export,” “ exportation,” “ import,”
Sir : I have been asked for an opinion on the “ importation,” and the like will be treated as
proper interpretation of that part of section 13 synonymous.
of the Federal reserve act which reads: “ Any
The Century Dictionary and Cyclopedia de
Federal reserve bank may discount accept fines “ export” as “ That which is exported, a
ances which are based on the importation or commodity carried from one place or country
exportation of goods,” with a view to deter to another,” and “ exportation” as, “ The act
mining whether the words “ importation or of conveying or sending to a distance, especially
exportation of goods” include (1) shipments to another state or country commodities in the
between countries other than the United course of commerce.” The same authority de
States, and (2) shipments between the con fines “ exporter” as, “ One who ships goods,
tinental United States and possessions of the wares, and merchandise of any kind to a for
United States.
eign country or distant place for sale.” The
The first principles of statutory construction New Standard Dictionary defines “ export” as,
require that language which is clear and un “ That which is exported; in general, goods or
ambiguous be given its ordinary and natural any article of trade or merchandise sent from
significance. The legislative meaning is first one country to another; properly, as used in
to be sought in the words used and if they are the United States Constitution, goods sent to
clear, the letter of the law controls, unless in a foreign country.”
If these broad definitions are applied, it is
extraordinary cases such a natural construction
would result in an obvious or absurd error. manifest that the words “ importation” and
United States v. Goldenberg, 168 U. S. 95, 102; “ exportation” will include shipments between
United States v. Union Pacific Railroad Co., countries other than the United States. It is
91 U. S. 72, 79; Lake County v. Rollins, 130 necessary, therefore, to determine whether the
U. S. 662. “ The legislature must be presumed natural significance of these terms must be re
to use words in the known and ordinary signi stricted because of the judicial construction of
fication, unless that sense be repelled by the similar words as used in the Federal Constitu
context,” Levy v. McCartee, 6 Peters, 102, 110- tion and in various acts of Congress.
The word “ import,” as used in tariff stat
In Martin v. Hunter, 1 Wheat. 304, 326, it is
said that “ where a power is expressly given, utes of the United States, invariably refers to
in general terms, it is not to be restrained to imports to the United States from a foreign
particular cases unless that construction grow country, and it might be argued that when the

words “ exportation” and “ importation” are
used in the Federal reserve act they must be
given a corresponding significance— that is,
they must be held to refer only to exports from
and imports into the United States from a for
eign country, and not also to shipments be
tween countries other than the United States.
This argument, however, is not convincing,
because of the fact that the word “ import” as
used in tariff laws must necessarily refer to
shipments into the United States. “ The power
of Congress to levy and collect taxes, duties,
and excises is co-extensive with the United
States,” Loughborough v. Blake, 5 Wheat, 317.
To levy a duty or tax of any sort, a soverign
must have jurisdiction over the article taxed.
This narrower construction of the word “ im
port” was, therefore, necessary, in order to
give the tariff laws any effective operation.
The United States could have no possible juris
diction over a transaction between Buenos Aires
and London, for instance, and to attempt to
tax such an import would be ineffectual.
But even in these tariff laws where the mean
ing of “ im port” must necessarily be limited to
imports into the United States, Congress has
almost invariably provided in terms that the
imports be from a foreign country into the
United States. In the first tariff act, passed
by Congress on July 4, 1789, it was enacted,
“ That
*
*
*
duties
*
*
*
be
levied on the following goods, wares, and mer
chandise imported into the United States from
any foreign port or place,” and it is to be noted
that practically every tariff law passed by Con
gress since that time has contained some simi
lar provision.
It might be contended that this restriction,
limiting dutiable imports to articles brought
from a foreign country , to the United States
was intended to preclude any consideration of
articles imported into one State from another
State of the Union. But such intention is re
butted by the fact that the Constitution as
construed by the Supreme Court of the United
States, does not give Congress the power to
lay an impost on goods imported from another

State. The Constitution gives to Congress the
general power “ to levy and collect taxes, du
ties, imposts, and exercises,” but “ imposts”
has been construed in Woodruff v. Parham, 8
Wall., 123, to mean a duty, custom, or tax
levied on articles brought into the United States
and the words “ imports” and “ exports” as
used in the Constitution, are uniformly held to
refer only to goods imported from foreign
countries into the United States, and not to ar
ticles carried from one State to another. Pitts
burgh Coal Co. v.’ Louisiana, 156, U. S. 590,
600; Brown v. Houston, 114 U. S. 622, 628.
It seems clear, therefore, that “ import” or
“ export” as used in Federal tariff statutes
must of necessity refer to transactions to or
from the United States.
On the other hand, in the Federal reserve
act—which is not a tariff measure, but wdiich
is, on the contrary, a law in which the words
“ importation” and “ exportation” could con
sistently refer to transactions between two for
eign countries other than the United States—
Congress has failed to put any restrictive limi
tation, evidently intending that the words used
be given their normal and natural significance,
the meaning generally *understood when used
in ordinary commercial parlance. The lexicons
all agree in defining “ export” as an article or
commodity carried from one country to an
other, and nowhere except in cases construing
the Constitution and the tariff laws is there any
suggestion that “ import” necessarily means
an article shipped from a foreign country to
the country or jurisdiction of the person or
legislature using the word.
When used in the Federal Constitution or in
the tariff laws made in pursuance thereof, the
words “ import” and “ export” must neces
sarily be given the narrower construction, for
the reason already stated; that is, the United
States has no jurisdiction to impose a tax or
impost on any article not within the confines
of the United States. But in the case of a Fed
eral banking law, where there is nothing in the
context nor in the spirit of the act to demand
a narrower or limited interpretation, the words

should be given their full significance. All the
cases previously cited on the laws of statutory
construction demand this result.
But even if the literal meaning of the phrase
“ importation or exportation” be considered
doubtful, a liberal construction in accordance
with the general intent of Congress would neces
sitate this same result. It must be remembered
that the Federal reserve act is remedial and
constructive legislation by which Congress
clearly intended to eliminate certain patent
evils in conditions as they existed at the time
of enactment, and to establish on a broad,
comprehensive, and firm basis a unified system
of banking. The language “ to furnish an elas
tic currency, to afford means of rediscounting
commercial paper, to establish a more effective
supervision of banking in the United States,
and for other purposes,” contained in the title
of the act, shows that it is remedial, and as such
should be broadly and liberally construed in
order to accomplish the advancement of the
remedies contemplated. (24 Am. and Eng.
Enel. 887, and cases cited.)
It may be reasonably assumed that Congress
not only wanted to create a discount market for
acceptances, but at the same time intended to
establish a system which would facilitate the
trade and commerce of the people of the United
States, no matter where that trade or com
merce originated or what its destination.
Acceptances having become a recognized inci
dent of trade as between nations the establish
ment of a wider market in this country for such
paper was apparently one of the objects of the
act.
Both the Senate bill and the conference
agreement permitted the discount of accept
ances, based not only on foreign but also on
domestic shipments. The latter, however,
were struck out on the floor, probably because
of the fear that a general domestic acceptance
business might be abused by the smaller banks
which were unfamiliar with this class of invest
ment and that for the present at least, such
investments might prove a detriment not only
to such banks but to the entire system. The
elimination, however, of acceptances based on

domestic shipments could not have been in
tended to restrict or limit the field of accept
ances based on the “ importation or exporta
tion of goods,” that phrase remaining precisely
the same as it was prior to the elimination of
domestic acceptances and just as it read when
the intent was to include acceptances based on
shipments of any kind.
It seems, therefore, that by all the ordinary
rules of statutory construction, giving to the
words the natural and ordinary import, which
is strongly corroborated by the purposes, spirit,
and history of the act, this portion of section 13
was intended to, and actually does, permit the
discount of acceptances based on the impor
tation and exportation of goods, not only to
and from the United States, but also between
other countries, separate and apart therefrom.
SH IPM EN TS B E T W E E N TH E C O N T IN E N T A L U N ITE D STATES
A N D ITS P O SS E SS IO N S.

The second question raised is whether the
clause “ acceptances which are based on the
importation or exportation of goods,” should
include acceptances based on shipments be
tween the continental United States and its
possessions, viz, Porto Rico, Hawaii, Canal
Zone, and the Philippines.
It is, of course, not to be disputed that if, as
contended above, imports and exports to and
from countries other than the United States are
a satisfactory basis for acceptances, then
acceptances based on shipments between any of
these possessions and another country, other
than the United States are eligible, a fortiori.
This leaves to be considered the one question
just stated.
The definitions given in the standard dic
tionaries refer to shipments from one country
to another country or to a “ distant place,” and
such a general understanding of the words in
question would certainly seem to be sufficiently
comprehensive to include transactions between
the United States and any of its island posses
sions, though they are not foreign territory in a
political sense.
To permit the discount of acceptances based
on the importation or exportation of goods

from and to the possessions of the United
States, it must be shown (1) that these words,
as generally known and understood and as
intended by the Federal reserve act, do not
necessarily refer to shipments to and from a
foreign country, and (2) that shipments to and
from these possessions are not domestic
shipments.
As already shown, the word “ import” as
used in the Constitution and tariff laws, has
been construed by the Supreme Court to refer
to imports from foreign countries. In the
tariff laws this has necessarily been so because
these laws specifically require that the imports
be from a foreign country.
The word as used
in the Constitution, however, not being ex
pressly limited, has been construed to refer to
imports from a foreign country and not to arti
cles shipped from one State to another, for
various reasons. A study of the discussions in
the Constitutional Conventions and of the his
tory of the formation of the Constitution
showed that there was no intention in the
minds of the framers of that instrument to
refer to anything but foreign imports and
exports, and the Supreme Court has, in various
decisions reciting the history and development
of the Constitution and the evils to be obviated
by it, decided that “ export” and “ import”
mean exports and imports to and from foreign
countries and not between States. But in all
those cases the particular circumstances under
which the words were used were stated at
length to show why this narrower interpreta
tion was necessary in each instance. Wood
ruff v. Parham 8 Wall. 123; Brown v. Houston,
114 U. S. 622. In other words, the burden of
limiting the natural meaning of the words was
clearly recognized by the court. Justice
Brown in referring to this well-settled construc
tion of the words as used in the Constitution,
said, in Dooley v. United States, 183 U. S. 151,
153:

While the words “ import” and “ export”
are sometimes used to denote goods passing
from one State to another, the word “ import,”
in connection with the provision of the Con
stitution that “ no State shall levy any imports

or duties on imports or exports,” was held in
Woodruff v. Parham, 8 Wall. 123, to apply only
to articles imported from foreign countries into
the United States,

thus implying that they are used in other
than the constitutional sense. As previously
explained, there is no necessity for forcing a
restricted construction on this phrase as used
in the Federal reserve act, and in consequence
there would seem to be no justification for
reading the word “ foreign” into its definition
as applied to this act.
It might be contended that to follow out this
argument logically would lead to the conclusion
that a shipment of goods from one State of the
United States to another State of the United
States would be an “ importation or exporta
tion of goods,” a result clearly not contem
plated by Congress. The answer is found in the
history and development of the act before its
passage.
The House bill provided for the discount of
acceptances based on the “ exportation or im
portation of goods.” The Senate bill amended
this provision to read “ importation or expor
tation or domestic shipment of goods,” evi
dently intending to cover shipments to and
from any points wherever located. As the act
read when finally passed, “ domestic shipments”
were eliminated. It is evident, therefore, that
Congress intended to make eligible acceptances
based on all except domestic shipment of
goods.
This raises the second point: Is a shipment
from the Continental United States to one of
the island possessions of the United States a
domestic shipment? The Century Dictionary
and Cyclopedia defines “ domestic commerce”
as “ commercial transactions within the limits
of one nation or State,” and in 14 Cyc. 829,
quoting In re Roofing Contractors Association,
9 Pa. Dist. 569, 570, domestic trade is referred
to as, “ the exchange or buying or selling of
goods within a country.” The difficulty, how
ever, is that the term “ United States” has
various different meanings dependent upon
whether it is used in a geographical, commercial,
or governmental sense, or whether it is in-

tended to describe the States of the Union as
such.
The term uUnited States” as used in the
uniformity clause of the Constitution has been
held in the insular cases not to extend to the
unorganized territorial possessions of the
United States. On the other hand, in dealing
with foreign sovereignties it is generally under
stood to have a broader meaning than when
used in the Constitution. It then includes all
territories subject to the jurisdiction of the
Federal Government, whether it is merely ter
ritory appurtenant to the United States or
whether it is an incorporated part of the
United States.
This question of the status of our territorial
possessions has been the subject of extended
discussions before the Supreme Court, and
though it is now generally admitted that these
possessions are not foreign in an international
sense, nevertheless they may be foreign to the
United States in a domestic sense. Downes v.
Bidwell, 182 U. S. 244. In the case of Dorr v.
United States, 195 U. S. 138, 143, the Supreme
Court, in speaking of the extent and limitations
of the Constitution as applied to our posses
sions, said:

The limitations which are to be applied in
any given case involving territorial government
must depend upon the relation of the particular
territory to the United States concerning
which Congress is exercising the power con
ferred by the Constitution. That the United
States may have territory which is not incor
porated into the United States as a body politic
we think was recognized by the framers of the
Constitution in enacting the article already
considered, giving power over the Territories,
and is sanctioned by the opinions of the justices
concurring in the judgment in Downes v. Bidwell, supra.
In other words, the United States may own
territory which is subject to the control of
Congress under the territorial clause of the
Constitution but which is not an integral part
of the United States until Congress sees fit to
make it such and to extend to it the operation
of the Constitution and laws of the United
States. The doctrine that the Constitution

does not follow the flag, ipso facto, seems well
settled now by numerous cases of the Supreme
Court. See Downes v. Bidwell, supra; Hawaii
v. Mankichi, 190 U. S. 197. It is, of course,
admitted in all these cases that Congress may,
if it chooses, incorporate into the Union any
Territories belonging to the United States.
Until it does so, however, it seems', from the
cases cited, that Territories of the United
States, though subject to the jurisdiction of
Congress, are not domestic in a national sense,
and that shipments to and from such Territo
ries are not to be considered domestic ship
ments within the meaning of the Federal
reserve act.

It may be well to consider, separately and
briefly, the cases of Porto Rico, the Philip
pines, Canal Zone, and Hawaii to determine
whether Congress has so acted as to make
them an integral part of the United States.

Porto Rico.— Porto Rico is not foreign terri
tory within the meaning of the Dingley Tariff
Act, approved July 24, 1897, taxing articles
imported into the United States from “ foreign
countries.” De Lima v. Bidwell, 182 U. S. 1,
decided May 27, 1901. In another case—
Downes v. Bidwell— decided the same day,
the Supreme Court held that the Foraker Act
of April 12, 1900, which levied certain duties
on articles coming into the United States from
Porto Rico, and on goods shipped from the
United States to Porto Rico, was valid— even
though a tax or burden on shipments between
different parts of the United States is uncon
stitutional—because “ Porto Rico is a terri
tory appurtenant and belonging to the United
States, but not a part of the United States
within the revenue clauses of the Constitution.”
The duties in question are no longer levied;
they were only a temporary assessment, but
the status of Porto Rico remains the same, no act
of Congress having been passed since then to make
it an integral part of the Union. Inasmuch,
therefore, as Porto Rico is not a part of the
United States, it does not seem, for the rea
sons considered above, that a shipment be
tween Porto Rico and the United States is a

domestic shipment in the generally accepted
meaning of that term^-a shipment from one
part of the country to another.
Philippine Islands.— In the case of Four
teen Diamond Rings v. United States, 183 U.
S. 176, it was held that the Philippines are not
a “ foreign country” in the meaning of the
tariff act of 1897, imposing a duty on imports
from foreign countries. The court went on to
say that “ In this respect there is no distinc
tion between the Philippines and the Islands
of Porto Rico. Neither of them is a foreign
country within the terms of that act.”
In the later case of Dorr v. United States,
supra, it was held that the Philippines were
not incorporated into the United States by
the mere treaty of cession, and, as the court
said:
.
The legislation upon the subject shows that
not only has Congress hitherto refrained from
incorporating the Philippines into the United
States, but m the act of 1902, providing for
temporary civil government (32 Stat. 691),
there is express provision that section eighteen
hundred and ninety-one of the Revised Stat
utes of 1878 shall not apply to the Philippine
Islands. This is the section giving force and
effect to the Constitution and laws of the
United States, not locally inapplicable, within
all the organized Territories, and every Terri
tory thereafter organized, as elsewhere within
the United States.
The Philippines, like Porto Rico, are there
fore not an integral part of the United States,
and, as Justice White said in Downes v. Bidwell, supra, “ it is foreign to the United States
in a domestic sense because not incorporated
into the United States.” Being generally
understood to be foreign to the United States
in every sense except an international one,
there is no justification for the conclusion that
shipments to and from the Philippines are
domestic.
Hawaii.— Though the Hawaiian Islands were
not made an integral part of the United States
by the mere act of Congress annexing them
(30 Stat. 750, Hawaii v. Mankichi, supra),
nevertheless, by the act of Congress of June
14, 1900, 31 Stat. 141, they were formally

incorporated. B y |this act (the Constitution
and Jail Federal laws were given “ the s&me
force and effect in Hawaii as;elsewherd in the
United States,” and Justice White, in the case
cited, said that by this act “ the islands iyere
undoubtedly made a part of, the United States
in the fullest sense.”
This distinction between Hawaii and the
Philippines and Porto R ico is recognized by
all the branches of the Government. Porto
Rico and the Philippines are under the juris
diction 4 f:th # Bureau of Insular Affairs in the
War Department, but Hawaii is not. Hawaii,
like Alaska^ is represented in Congress by a
Territorial Delegate, whereas the Philippines
and Porto R ico merely send ‘ ‘ Resident Com
missioners” to Washington.
Under all the facts, therefore, Hawaii must
be considered as an integral part of the United
States. Consequently any shipment between
Hawaii and the continental United States
must be considered a domestic shipment, and
as such can not form the basis of an acceptance
eligible for discount by Federal Reserve
Banks. In other words, it does not seem pos
sible to differentiate transactions with Hawaii
from those with any part of the continental
United States. Hawaii’s relation to the United
States seems precisely analogous to that of
Alaska.
Canal Zone.— The status of the Canal Zone
is unique. The United States has, in effect,
an easement 10 miles wide across the Republic
of Panama. It is foreign territory, subject to
the control and supervision of this Govern
ment. The tariff act of 1913, imposing duties
on imports “ into the United States or into any
of its possessions (except the Philippine Is
lands and the islands of Guam and Tutuila)”
does not apply to the Panama Canal, even
though it is not expressly excepted from the
term “ possessions,” as is the case with the
Philippines. By an act dated March 2, 1905,
33 Stat. 843, Congress specifically stated that
“ all laws affecting imports of articles, goods,
wares, and merchandise, and entry of persons
into the United States from foreign countries,

shall apply to articles, etc., coming from the
Canal Zone and seeking entry into any State or
Territory of the United States or the District
of Columbia/7 showing that in no way is the
Canal Zone considered an integral part of the
United States. Indeed it is not even terri
tory owned by the United States, but rather
territory merely under its jurisdiction and
control. Strictly speaking, it is a depend
ency. As such it is less a part of the United
States than Porto Rico, and shipments to and
from it could hardly be considered domestic
shipments in the light of the previous discus
sion.
To summarize, it would seem that the Fed
eral Reserve Banks may, under section 13,
discount acceptances based on the shipment
of goods (a) between the United States and
any foreign country, (6) between any two or
more foreign countries, and (c) between the
continental United States and Porto Rico, the
Philippines, or the Canal Zone; but not accept
ances based on the shipment of goods between
the continental United States and Hawaii or
between any two parts of the continental
United States.

Respectfully,

M. C. E lliott, C ou n sel.

To Hon. C. S. H amlin,

G overn or F ed era l R eserve B o a r d

Forward Discount Rates.

Federal Reserve Banks may, under the established right
to fix discount rates for acceptances or other eligible paper,
fix a forward rate; that is, a rate to apply at a future time.
Such a rate is calculated to accommodate trade and com
merce as required by the act, and will tend to obviate
speculation due to fluctuating rates.

May 18, 1915.
Sir : The question of the right of Federal
Reserve Banks to establish forward discount
rates to cover acceptances or other eligible
paper has been duly considered by this office,
as requested.
In an opiniona filed with the Board dated
November 19, 1914, the question of the right
aSee Federal Reserve Bulletin, May 1, 1915.

of Federal Reserve Banks to establish discount
rates, subject to review by the Federal Reserve
Board, was considered at some length.
It is not deemed necessary to review in
detail the conclusions reached in that opinion,
but so far as pertinent to the question now
under consideration authorities were cited to
show that Congress has the power to delegate
the right to fix discount rates to an adminis
trative body and that this right has been vested
in the Federal Reserve Banks subject to review
and determination by the Federal Reserve
Board.
The provisions of law which it is necessary
to consider in determining the question under
consideration are as follows :
Section 14, subsection (d), in defining o^^ A
the powers of Federal Reserve BanU, provides
as follows:
To establish from time to time, subject to
review and determination of the Federal
Reserve Board, rates of discount to be charged
by the Federal Reserve Bank for each class of
paper, which shall be fixed with a view of
accommodating commerce and business.
Section 4 provides in part as follows:
Every Federal Reserve Bank shall be con
ducted under the supervision and control of a
board of directors. The board of directors
shall perform the duties usually appertaining
to the office of directors of banking associations
and all such duties as are prescribed by law.
Said board shall administer the affairs of said
bank fairly and impartially and without dis
crimination in favor of or against any member
bank or banks, and shall, subject to the provi
sions of law and the orders oi the Federal Re
serve Board, extend to each member bank such
discounts, advancements and accommodations
as may be safely and reasonably made with due
regard for the claims and demands of other
member banks.
Analyzing these provisions, it appears that
the only limitations to which discount rates are
subject are as follows:
(a) That they shall be fixed by the Federal
Reserve Bank with the view of accommodating
trade and commerce.
(&)
That there shall be no discrimination as
between member banks.

(c) That they shall be subject to review and
determination by the Federal Reserve Board.
Considering the question submitted in the
light of these restrictions, it appears—
(1) That the purpose of fixing a forward rate,
that is, a rate to apply at softie future date, is
primarily to accommodate trade and commerce
and to prevent those dealing in legitimate trans
actions from being subject to the speculative
influence of fluctuating rates. For example,
a commercial transaction may be safely en
gaged in if the purchaser, or one who is assisting
the purchaser to finance such a transaction,
can have the assurance that an acceptance or
other eligible paper possessing the necessary
qualifications can be discounted or sold at a fu
ture date at a fixed rate, whereas if the rate
is undetermined the element of speculation
necessarily enters into the transaction.
(2) If the rate is so fixed as to be equally ap
plicable to all member banks, no element of
discrimination is involved.
(3) If the Federal Reserve Bank fixes a rate
at which it will discount or purchase various
classes of paper at the present time and in so
doing announces that the rate on any particular
class of paper will not be increased beyond a
fixed maximum for a specified number of days,
and if the Board approves such rate, or if the
maximum thus fixed by the Federal Reserve
Bank is no greater than the maximum rate pre
viously approved by the Board, it will have
exercised its right of review and the rates will
thereupon become definitely established in ac
cordance with the provisions of law applicable
thereto.
Respectfully,
M. C . E l l i o t t , Counsel.
To Hon. C h a r l e s S. H a m l i n ,
Governor Federal Reserve Board.

D iscou n t o f A cceptances Indorsed by M em ber Banks
Located in Another D istrict.

Federal Reserve Banks may, Under the provisions of
section 13, discount acceptances based on the importation
or exportation of goods, provided they have a maturity at
time of discount of not more than three months, and pro
vided further, that they are indorsed by a least one mem

ber bank. It is immaterial whether this member bank is
located in the district of the Federal Reserve Bank which
is making the discount or in any other district, the term
“ member bank” being broad enough to include member
banks wherever located.
Such discounts, being made under the provisions of
section 13, are eligible as collateral security for Federal
reserve notes issued under the provisions of section 16.
A p r i l 30, 1915.
Sir : The question has been raised whether a
Federal Reserve Bank may, under section 13
of the Federal reserve act, discount acceptances
indorsed by a member bank located in a dis
trict other than that of such reserve bank; and,
if so, is the paper thus discounted eligible to be
used as collateral security for Federal reserve
notes issued under section 16.
The act provides that—
Any Federal Reserve Bank may discount
acceptances which are based on the importa
tion or exportation of goods and which have a
maturity at time of discount of not more than
three months, and indorsed by at least one
member bank.
It is to be noted that an acceptance to be
eligible for discount under this provision, of the
act must (1) be based on the importation or
exportation of goods, (2) have a maturity at
time of discount of not more than three months,
and (3) be indorsed by at least one member
bank.
The third requirement is the one to be
specially considered in this connection. Does
“ member bank” mean a member of the par
ticular Federal Reserve Bank, or does it
import a more general significance and mean a
bank which is a member of the Federal reserve
system ? If it is the latter, then no doubt any
Federal Reserve Bank may discount accept
ances for any member bank, irrespective of the
district in which it is located.
Section 1 of the Federal reserve act states
that—
The term “ member bank” shall be held to
mean any national bank, State bank, or bank
or trust company which has become a member
of one of the reserve banks created by this
act,
and, ‘ applying this definition to the .section in
question, it would seem clear that in consider

ing the eligibility of acceptances for discount
by a particular Federal Reserve Bank, it is
immaterial in what district the indorsing mem
ber bank is located. As long as it is a member
of some one Federal Reserve Bank, it is a
“ member bank” as defined by the act itself.
This conclusion is further supported by the
fact that Congress, in defining eligible paper
other than acceptances, required specifically
that the indorsement must be by “ any of its
member banks,” thus expressly referring to
the members of a certain Federal Reserve Bank.
The fact that this restriction was omitted in
fixing the qualities of eligible acceptances indi
cates that Congress intended that there should
be a broad market for this class of paper and
that a Federal Reserve Bank should not be
limited to acceptances indorsed by its own
member banks.
The same construction of the term “ mem
ber bank” has been accepted by the Board in
relation to the power of a Federal Reserve Bank
to receive deposits of “ checks and drafts upon
solvent member banks.”
Granting, therefore, that a Federal Reserve
Bank may, under the provisions of section 13,
discount acceptances indorsed by a member
bank of another district, may such paper be
put up as collateral for Federal reserve notes ?
It is clear that paper bought in the open mar
ket under the provisions of section 14 is not
eligible as collateral security unless it conforms
to the provisions of section 16, defining eligi
ble collateral. That section provides in part
that—
The collateral security thus offered shall be
notes and bills accepted for rediscount under
the provisions of section 13 of this act.

that the same paper might have been purchased
in the open market, with or without the in
dorsement of a member bank, is immaterial
if in fact the paper was accepted for discount
under section 13.
As previously’ indicated, acceptances in
dorsed by a member bank of another district
may be so discounted, and if so they may be
put up as collateral security under the terms
of section 16, which define eligible collateral.
Respectfully,
M. C. E l l i o t t , Counsel.

To Hon. C. S. H

a m l in ,

Governor Federal Reserve Board.
P urch ase o f U nited States B on ds by F ederal R eserve
B a n k s.

Federal Reserve Banks have an unlimited right to pur
chase United States bonds in the open market. They may
also, under the provisions of section 18, be permitted or
required, after December 23, 1915, to purchase bonds
bearing the circulation privilege, up to an amount not
exceeding $25,000,000 a year, from member banks which
make proper application to the Treasurer of the United
States. In order to determine the amount any one reserve
bank shall buy under section 18 in any one year, it is nec
essary to allot to each bank its own proportionate share of
the entire sum offered for sale through the Treasurer and
deduct therefrom the amount of bonds bearing the circu
lation privilege bought b y such bank in the open market
within that year.
A

p r il

22, 1915.

There are two separate and distinct
methods provided in the Federal reserve act
for the purchase by Federal Reserve Banks of
Government bonds.
Under paragraph b of section 14 of the
reserve act such banks are authorized to buy
and sell bonds and notes of the United States
in the open market. There is no restriction
placed in that section upon the kind or amount
of bonds eligible for purchase in that manner.
The authority is absolute and unlimited except
in so far as the Federal Reserve Board may make
restrictions under its powers to regulate such
purchases.
Sir :

If, therefore, a Federal Reserve Bank receives
acceptances for discount under the provisions of
section 13 in the manner indicated above, such
paper may be used as collateral for Federal
reserve notes. The sole requirement is that
the collateral shall be notes and bills—terms
which are broad enough to include acceptances
Under the provisions of section 18 the Board
in this connection— accepted for rediscount may, in its discretion, require the Federal
under the provisions of section 13. The fact Reserve Banks to purchase United States bonds

bearing the circulation privilege up to an
amount not to exceed $25,000,000 a year from
member banks which have made application
for such sale with the Treasurer of the United
States. This section becomes effective Decem
ber 23, 1915.
When bonds are offered for sale in this man
ner each Federal Reserve Bank may be re
quired or permitted to purchase such propor
tion thereof as its capital and surplus bears
to the aggregate capital and surplus of all Fed
eral Reserve Banks: Provided, however, That
if a Federal Reserve Bank has acquired bonds
under section 4 within the same year then such
bank shall deduct the amount thus acquired
from its proportionate share of the allotment
in order to determine the actual amount to be
purchased by such bank.
Should the bonds acquired by a Federal
Reserve Bank under the general authority of
section 4 to exercise powers prescribed in the
act—-or, more specifically, bonds acquired in
the open market under section 14—-exceed the
amount to which such bank would be entitled
under the proportionate allotment, then it can
not be required or permitted to purchase any of
the bonds offered for sale undfcr section 18.
The disqualification of this particular bank
however, would have no effect on the rights
and obligations of the other Federal Reserve
Banks. Each bank is apportioned a certain
definite percentage, determined by the propor
tion which its capital and surplus bears to the
aggregate capital and surplus of all the Federal
Reserve Banks, and each individual bank
must, if directed by the Board, purchase this,
amount, no more and no less, unless it can be
shown that it has acquired bonds under sec
tion 4 in the manner previously indicated.
It is clear that this $25,000,000 limitation
imposed by section 18 refers only to those
bonds offered for sale by member banks through
the Treasurer and has no effect whatever on
the continuing power of the Federal Reserve
Banks to purchase bonds up to any amount in
open market. The only consideration to be
given in this connection to bonds bought in the
open market is that they are merely one of the

elements in determining the amount of bonds
which Federal Reserve Banks may be required
or permitted to buy under section 18.
It might be noted that there is no specific
provision in section 4 for the purchase of any
Government bonds, but, in enumerating the
powers of a Federal Reserve Bank, under para
graph 7, it is provided that it has authority—
To exercise by its board of directors, or duly
authorized officers or agents, all powers spe
cifically granted by the provisions of this act
and such incidental powers as shall be neces
sary to carry on the business of banking within
the limitations prescribed by this act,
and the reference in section 18 to bonds ac
quired under, section 4 evidently contemplated
bonds purchased in the open market under this
general authority to exercise the powers specif
ically conferred by section 14, since there is no
other provision in section 4 which can be said
to relate to the purchase of bonds.
This might raise the question whether 3 per
cent bonds, or bonds not bearing the circula
tion privilege, bought under section 14, should
be included in determining the amount of bonds
to be purchased by each bank under section 18.
This conclusion does not seem necessary,
because it is not believed that bonds not bear
ing the circulation privilege were intended to
be considered in making the deduction which
is to determine this amount. Section 18 is
intended only to afford a market for bonds
bearing the circulation privilege, and the pur
pose there manifested is to provide a means
for the absorption of such bonds by Federal
Reserve Banks. The fact that a Reserve
Bank may have bought 3 per cent bonds not
bearing the circulation privilege in the open
market has no relation to and could not be
intended to be considered in connection with
this question of the absorption or concentra
tion of bonds having that privilege.
To summarize: In order to determine the
amount any one reserve bank may be required
or permitted to buy under section 18, take the
entire sum offered for sale in this manner,
allot to each bank its proportionate share, and
deduct therefrom the amount of bonds bearing

the circulation privilege bought by such bank
in the open market within the year.
Let X equal the amount to be bought by
Reserve Bank A,
then
rCapital and'
surplus of A.
[Total
egate
= amount X <Aggr
capital and
[for sale.
surplus of all
. banks.

X {

Amount of bonds
bearing circula
tion privilege
bought in open
market by A
. within the year.

Respectfully,

To Hon. C. S.

M. C. E lliott, Counsel.
H amlin ,

Governor Federal Reserve Board.
Exchange o f two per cent bonds for one-year gold notes
and three per cent bonds.

That part of section 18 which provides that the Secre
tary of the Treasury may, upon application of any Federal
Reserve Bank approved by the Board, issue, in exchange
for 2 per cent bonds, one-year gold notes and 3 per cent
bonds, the gold notes not to exceed one-half of the 2 per
cent bonds offered for exchange, becomes effective at
once and not after two years fromthe passage of the act, as
is provided for other paragraphs of section 18.
January 4, 1915.
Sir : I have your letter of January 2 and have

carefully examined that part of section 18 of
the Federal reserve act which relates to the
exchange of United States bonds with the cir
culating privilege for one-year gold notes of the
United States and 30-year 3 per cent gold
bonds without the circulating privilege.
After analyzing this whole section and after
considering all the circumstances I am inclined
to the view that technically the Federal Re
serve Board has the right at this time to author
ize this exchange and that the opening sentence
of this section making certain provisions effect-,
ive only after two years from the passage of the
act, does not relate to the provision under con
sideration.
As heretofore advised the power to purchase
bonds having the circulation privilege and to
issue national currency against such bonds is
specifically given to the Federal Reserve Banks
by other sections of the act.
When section 18 was incorporated in the act
it was originally intended, as its title implies, to

provide a method for gradually refunding bonds
held at the time by the various national banks.
This matter was very carefully considered by
the committee of the House and the committee
of the Senate and a number of plans were sub
mitted having for their object the ultimate re
tirement of national bank circulation and the
substitution of other notes. At the time of the
passage of the act there was approximately
$750,000,000 in national bank circulation out
standing. The bonds securing this circulation
mature at the pleasure of the United States
Government after 30 years from the date of
issue, and it was accordingly estimated that if
the Federal Reserve Banks could acquire a
minimum of $25,000,000 a year, they would
have in their possession at the maturity of
these bonds approximately the entire issue, and
the Government would have to deal only with
the Federal Reserve Banks instead of with the
several thousand national banks in refunding
such bonds.
It was recognized, however, that unless the
national banks desired to retire their circu
lation the Federal Reserve Banks would be
unable to procure the bonds, and this method
was provided of having those national banks
desiring to retire the whole or any part of their
circulation make application through the
Treasurer to sell the bonds for their account,
and the Federal Reserve Board was empowered
to require Federal Reserve Banks to purchase
bonds so offered, and, as suggested by you, it
was originally contemplated that the Federal
Reserve Banks should thereupon be required
to issue Federal Reserve Bank notes against
such bonds.
In view of the arguments presented to the
committee that this circulation becomes re
dundant at certain times, it was later deter
mined to permit the exchange of bonds thus
acquired with the circulating privilege for ob
ligations of the United States without the cir
culating privilege.
As stated, this section was originally in
tended to deal only with the bonds acquired
from national banks desiring to retire in whole
or in part their national-bank circulation.

The section was amended, however, in con
ference, so that it now provider—
(a) For the issuance of Federal Reserve
Brink notes against bonds acquired under other
provisions of the act as well as against bonds
acquired under this section; and
(i) For the exchange of . any United States
2 per cent gold bonds bearing the circulation
privilege, but against which no circulation is
outstanding for one-year gold notes of the
United States without the circulation privi
lege to an amount not to exceed one-half of the
2 per cent bonds so tendered for exchange and
the 30-year 3 per cent gold bonds, without the
circulating privilege, for the remainder of the
bonds so tendered.
It is significant that in the first two para
graphs of this section in referring to the bonds
which the Federal Reserve Banks may be re
quired to purchase, Congress uses-the words'
“ such bonds,” manifestly referring to bonds
which a national bank desires to sell through
the Treasurer in order to reduce its circulation.
In the fifth paragraph of this section, how
ever, it is provided:

States bonds with the circulating privilege,
against which no circulation is outstanding,
would seem to indicate that the Federal Re
serve Board may, in its discretion, authorize
the exchange of any such bonds bearing this
privilege acquired in any manner by the
Federal Reserve Banks, provided such bonds
are not deposited as security for circulating
notes.
Respectfully,
M . C . E l l i o t t , Counsel.
To Hon.

S. H a m l i n ,
.Governor Federal Reserve Board.

Ch arles

Rights of Member Banks in Northern New Jersey.
Member blanks located in that part of New Jersey which
is to be transferred from the Philadelphia district to the
New York district not later than July 1,1915, remain mem
bers of the Federal Reserve Bank of Philadelphia until the
transfer is actually effected, and as such are entitled to
all the privileges extended other members of that bank.
All rediscounts made for member banks located in the
region to be transferred may be held b y the Federal Reserve
Bank of Philadelphia until they mature, even though the
date of maturity is subsequent to July 1,1915, or they may
be rediscounted with the Federal Reserve Bank of New
York.

M a y 21, 1915.
Upon the deposit with the Treasurer of the
Sir : As requested, I have read and consid
United States of bonds so purchased or any
bonds with the circulating privilege acquired ered the attached letter from the Federal Re
under section 4 of this act, any Federal reserve serve Bank of Philadelphia, dated May 5, 1915,
bank
* * * shall be entitled to re
ceive * * * circulating notes * * * equal submitting the following inquiry:
In case any banks in northern New Jersey
in amount to the par value of the bonds so de
posited.
apply to us for rediscounts between now and
July 1 ,1 would inquire whether, in your judg
In this paragraph the section for the first ment, we should accommodate them, and I
time refers to bonds other than those acquired would also inquire whether it would be satis
from banks desiring to reduce their circulation, factory to let us carry any rediscounts which
and in the following paragraph the language of we may have for northern New Jersey banks
which mature after July 1 until the notes
the act is—
run off.
Upon application of any Federal reserve
While the order has not yet been formally
bank, approved by the Federal Reserve Board,
entered,
it is my understanding that the trans
the Secretary of the Treasury may issue in
exchange for United States 2 per cent gold fer of membership from Philadelphia to New
bonds bearing the circulation privilege, but York of those banks located in the district to
against which no circulation is outstanding be assigned to New York is to be made not later
one-year gold notes, etc.
than July 1. This being true, the banks in
The failure, therefore, to restrict this para northern New Jersey will continue to be mem
graph by any qualifying clause as to the bonds bers of the Federal Reserve Bank of Philadel
which may be exchanged other than the quali phia until that time and will be entitled to any
fication that they shall be 2 per cent United privileges extended to other members.

As to the rediscounts carried at the time
that such banks cease to be members of the
Federal Reserve Bank of Philadelphia, while
the act makes no specific provision in regard
to this situation, I can see no legal objection
to the Federal Reserve Bank of Philadelphia
continuing to hold such rediscounts until they
mature. Where a member bank rediscounts
with a Federal Reserve Bank eligible paper
held by it, the Federal Reserve Bank becomes
the owner of such paper and the member bank
is contingently liable as indorser. This being
true, there would seem to be no justification for
assuming that a change in the status of a mem
ber bank in its relation to the Federal Reserve
Bank should in any way affect the legality of
such rediscounts. For example, if a member
bank should go into liquidation, the Federal
Reserve Bank would have the right to hold
and collect any rediscounts held by it and
would have a claim against the estate of such
liquidating bank for any loss suffered, under
the contract of the indorser.
I am of the opinion, therefore, that the Fed
eral Reserve Bank of Philadelphia will be fully
justified under the law in extending the privi
lege of rediscount to the banks referred to as
long as they remain members of that bank, and
that any rediscounts held at the time when they
cease to be members may be retained until col
lected, or they may be rediscounted by the
Federal Reserve Bank of New York for the
Federal Reserve Bank of Philadelphia. This
latter course would from many aspects seem
to be the more desirable since in this case ad
justment at maturity by payment or by sub
stitution of other paper could be arranged
directly with the Federal Reserve Bank of New
York and it would be unnecessary for the Fed
eral Reserve Bank of Philadelphia to send on
for collection any rediscounts held.
Respectfully,
M. C. E lliott, Counsel.
To Hon. Charles S. H amlin,
Governor Federal Reserve Board.

by a change in the geographical limits of his district which
results in making him a resident of another district.

May 11, 1915.
This office has been requested to give
an opinion on the question of whether or not
Mr. La Monte, one of the class C directors ap
pointed by the Board for the Federal Reserve
Bank of Philadelphia, may continue to serve
after that part of New Jersey in which he re
sides has been transferred to district No. 2.
Section 4 of the Federal reserve act provides
in part that—
Class C directors shall be appointed by the
Federal Reserve Board. They shall have been
for at least two years residents of the district
for which they are appointed.
Mr. La Monte had been for W o years a resi
dent of district No. 3 at the time he was ap
pointed. The question, therefore, arises whether
the fact that after July 1 he will be a resident
of district No. 2 renders him ineligible to com
plete his term of office which expires January 1,
1915.
The term “ residence” is not synonomous
with that of “ domicile” or “ citizenship.” It
has been defined by the courts as “ the abiding
or dwelling in a place for some continuance of
time. There must be a settled, fixed abode or
intention to remain permanently at least for a
time, for business or other purposes, to consti
tute a residence.” (See American and English
Encyclopedia, vol. 24, p. 693, for collec
tion of cases.) It is, however, susceptible of
various meanings which depend largely upon
circumstances under which the term is used.
Its definition has been held to be a mixed ques
tion of law and fact. (Munroe v. Williams, 37
S. C. 81.) The term “ to reside” was held in
the case of People v. Owens, 29 Colo. 535, to
have different meanings as used in different
parts of the same instrument.
In order, therefore, to determine the sig
nificance to be given to that part of the act
above quoted, it is necessary to consider the
context and the purpose of this requirement.
The class C directors are selected by the
Federal Reserve Board but as directors have
Qualifications o f Federal Reserve Bank Directors.
A director possessing necessary qualifications at the time the same powers and duties as directors of
of his election is not made ineligible to serve out his term classes A and B. The qualification that such

Si r :

directors “ shall have been for two years resi
dents of the district for which they are ap
pointed” was manifestly incorporated in order
that those selected should be familiar with the
local conditions of such district. Mr. La Monte
having been qualified in this respect at the time
of his election there would seem to be no reason
for declaring him ineligible to serve out his
term because his residence after July 1 may
be technically said to be in district No. 2
instead of district No. 3.
The act does not provide in terms nor by
necessary implication that a director shall con
tinue throughout his term of office to be a
resident of the district in which the Federal
Reserve Bank is located, and there does not
appear to be any reason for,assuming that this
technical change in Mr. La Monte’s residence
can in any way prove prejudicial to the inter
ests of the Federal Reserve Bank of Philadel
phia.
I am, therefore, of the opinion that he may
legally continue to serve as a class C director
until January 1, 1916.
Respectfully,
M. C. E lliott, Counsel.
To Hon. Charles S. H amlin ,
Governor Federal Reserve Board.

Federal Reserve Banks as Collecting Agents.

Although there is no express provision in the Federal
reserve act authorizing a Federal Reserve Bank to act as
agent for another Federal Reserve Bank in the collection
of bills, notes, etc., nevertheless section 4, subsection 7,
in granting the right to exercise “ incidental powers,”
impliedly authorizes this power, the collection of bills,
notes, etc., being incidental to the power to receive de
posits, as authorized by section 13.
D ecember 30, 1914.
Sir : I have your letter of the 30th instant,

in which you ask for an opinion on the followinp questions:
Whether or not a Federal Reserve Bank is
empowered under the provision of the Federal
reserve act to act as agent for another Federal
Reserve Bank in the collection of maturing
notes, drafts, bills of exchange and other evi
dences of debt purchased under the provisions

of the act by the Federal Reserve Bank, which
items are payable within the district of the
Federal Reserve Bank to which they are sent.
The exercise of this power would require
the collecting bank to act as agent for the
forwarding bank in the collection of the items
mentioned in your letter sinfce, in such case
under the uniform decisions of the court, the
agency continues until the items are collected.
This right is not specifically included in the
powers oHihe Federal Reserve Banks enumer
ated in the Federal reserve act. Section 13, in
dealing with the subject of collections, pro
vides:

Any Federal Reserve Bank may receive from
any of its member banks, and from the United
States, deposits of current funds in lawful
money, national-bank notes, Federal reserve
notes, or checks and drafts upon solvent mem
ber banks, payable upon presentation; or,
solely for exchange purposes, may receive
from other Federal Reserve Banks deposits of
current funds in lawful money, national-bank
notes, or checks and drafts upon solvent mem
ber of other Federal Reserve Banks, payable
upon presentation.
It will be observed that the language used
in the section above qu6ted does not specifically
include notes, drafts and bills of exchange but
Federal Reserve Banks are authorized to re
ceive deposits of current funds in lawful
money, national-bank notes, or checks and
drafts upon solvent member or other Federal
Reserve Banks, payable upon presentation.
The question therefore arises, whether or not
such notes, drafts, and bills of exchange may
be accepted by Federal Reserve Banks in the
capacity of agent for other Federal Reserve
Banks and the determination of this question
is dependent upon whether or not this power
may be said to be incidental to those powers
which are specifically granted. Section 4, sub
section 7, of the Federal reserve act, in defining
some of the corporate powers of Federal Re
serve Banks, reads as follows:
To exercise by its board of directors, or duly
authorized officers or agents, all powers spe
cifically granted by the provisions of this act,
and such incidental powers as shall be neces

sary to carry on the business of banking within
the limitations prescribed by this act.
This language is substantially similar to the
language used in section 5136 of the Revised
Statutes which deals with the corporate powers
of national banks. Section 7 of this section
reads as follows:
To exercise by its board of directors or duly
authorized officers or agents, subject to law, all
such incidental powers as shall be necessary to
carry on the business of banking; by discount
ing and negotiating promissory notes, drafts,
bins of exchange, and other evidences of debt;
by receiving deposits; by buying and selling
exchange, coin, and bullion; by loaning money
on personal security; and by obtaining, issuing,
and circulating notes according to the pro
visions of this title.
It will be observed that in defining the powers
of national banks, as well as in defining the
powers^ of Federal Reserve Banks, Congress
has not specifically authorized such banks to act
as agent for other banks. The powers enum
erated, however, in both instances, are what
may be termed contractural powers of a Fed
eral Reserve Bank or a national bank; that is
to say, the act defines and limits under what
conditions such banks may become indebted to
others or may permit others to become indebted
to such banks.
In the matter of collection of items mentioned
in your letter, however, the relation of debtor
and creditor is not established as between the
forwarding bank and the collecting bank until
the item sent for collection is actually collected;
and where the instructions of the forwarding
bank are to collect and remit the bank receiving
such items has this single duty to perform and
the proceeds are not credited to the forwarding
bank after collection but are remitted to such
bank. If the instructions accompanying such

items are to collect and credit, then the collect
ing bank collects from the drawee of the draft
or the obligor of the note funds which it may re
ceive on deposit, and, consequently, when its
agency terminates it exercises a power spe
cifically granted to it, namely, the power to re
ceive deposits. Accordingly, it seems clear
that the collection of items referred to by you
may be said to be incidental to the power to re
ceive deposits.
Banks very generally act as agents for other
banks in making collections of this sort and the
right of national banks to perform this duty
has, so far as I have been able to learn, never
been questioned; on the contrary, there are a
number of cases holding that in the matter of
collection of items banks, as stated, act only as
agents until the item has been actually col
lected.
This is true even in the case of deposit of
checks by individuals with national banks.
The courts have held that even though credit
may be given in the pass book for the check
upon its deposit, the bank continues as the
agent of the depositor until the check has been
collected.
It seems to me, therefore, that unless as a
matter of policy the Board determines that the
Federal Reserve Banks are not ready to act as
collecting agents for other Federal Reserve
Banks in the collection of the items enumerated
by you, there is no reason why this power
should not be exercised without exceeding the
corporate powers granted jby statute, and those
incidental to the specific powers granted.
Respectfully,
M. C. E lliott, Counsel.
To Hon. Charles S. H amlin ,
Governor Federal Reserve Board.

GENERAL BUSINESS CONDITIONS.
General business and banking conditions are
described in reports made by Federal reserve
agents for the 12 Federal reserve districts.
Below are given in detail digests of condi
tions in the various districts substantially as
reported by Federal reserve agents.
D IS T R IC T N O . 1— B O S T O N .

Since the 1st of the month there has been a
slight hardening tendency in the money market,
but this is largely due to the hesitation of
banks to invest their money too closely rather
than to any appreciable decrease in the supply.
A comparison, however, of the statements of
the Boston Clearing House shows an increase
in loans over the previous month and a decrease
in due from reserve agents. The country bank
situation is much the same, and those banks
are still rediscounting to a considerable extent
and show very little change in their condition
from the previous month. The savings-bank
deposits in this district continue showing in
creases, which is an evidence of better business
conditions.
Money rates are as follows: Banks commer
cial customers up to six months, 4 to 4J per
cent, with some exceptions below 4 per cent;
demand loans to brokers, 3 per cent; note
brokers’ commercial paper, 3J to 4J per cent,
largely 4 per cent; year notes, 4J per cent;
savings-bank mortgages, 4£ to 5 per cent; 90day bank acceptances, 2J to
per cent; town
notes, 3 to 3J per cent; Boston bank rates to
country banks, 4 per cent; Federal Reserve
Bank of Boston rates, 4 per cent up to 60 days,
4J per cent 60 to 90 days.
Exports and imports for the port of Boston
for the month of April are as follows: Imports,
free, $15,219,245; dutiable, $2,786,559. Ex
ports, domestic, $10,577,596; foreign, $12,586.

There is a general feeling of optimism in all
lines of business in this district, and a slight
improvement in most lines, with the possible
exception of the shoe and leather trade.
Foreign government orders are reported to be
coming into this market almost daily and

trades directly influenced are doing a good
business.
The situation in the shoe and leather trade
has not improved to any noticeable extent
since last month. In all sections, very limited
trade is reported from regular domestic sources
and while the general outlook is for improve
ment, no marked improvement has yet mani
fested itself. In this trade war orders are still
the principal factor.
There has been considerable improvement in
the wool and woolen industries over the past
month and, in fact, even apart from war orders
the general situation seems to be improved
somewhat, both from the mill end as well as in
goods, and the general situation in this line is
ahead of a year ago. This is noticeably so in
worsteds, which have been dull for several
months.
The cotton-mill situation seems to be^lightly
but steadily improving. Most of the mills are
running on full time and while the volume of
business is reported to be satisfactory there is
still room for an improvement in profits,
although many mills are reporting a satis
factory profit, having purchased their raw
material at lower rates than the present market.
D IS T R IC T N O . 2— N E W Y O R K .

Throughout New York State farmers, fruit
growers, and dairymen anticipate a good
season. Factories producing goods for do
mestic use are not busy and new orders come
in slowly. The manufacture of war supplies
continues above capacity and is extending to
plants normally engaged otherwise, thus partly
offsetting slack domestic trade.
Shipments from the port of New York since
January 1 are $112,000,000 ahead of the corre
sponding period last year. Builders, realestate and renting agents find business better.
Textiles, dry goods, and mercantile lines gener
ally are in better demand, but it is evident that
domestic markets of nearly all kinds, while
improving in tendency, are subject to the ups
and downs in sentiment as the European war
continues.

The number of unemployed is substantially
reduced, but many are still out of work.
Figures of new incorporations compared with
recent years show a considerable falling off.
Failures in this district since the first of the
year compared with the same period last year
havfc increased 50 per cent in number and 56
per cent in amount. There is less activity in
the stock market.
Excess reserves of the New York Clearing
House banks on May 15 were $173,000,000, an
increase of $3,000,000 since May 1. During the
same period deposits decreased $4,000,000 and
loans $2,000,000. Demand for loans is gener
ally light. Rates continue at 3 J to 4 per cent
for the best commercial paper.
D IS T R IC T N O . 3— P H IL A D E L P H IA .

War orders and their influence are un
doubtedly helping many industries. General
trade, however, upon which in the long run we
must depend for our prosperity, is still dull and
much below normal. Collections are fair. Re
tail trade is picking up in some lines, due to less
unemployment and to increasing working hours
giving increased purchasing power to labor, and
also to favorable weather conditions. On the
whole, in district No. 3, business is hesitating
and concerned over the outlook. Some lines,
producing for domestic consumption, are im
proving very slowly.
Rates for money are easy and loanable funds
are plentiful, both call and time money being
quoted at from 3J to 4 per cent; the supply of
commercial paper is limited, and a moderate
amount is being sold at from 3£ to 4J per cent.
The outlook is so uncertain there seems to be a
disposition on the part of financial institutions
not to lock up their funds in long-time invest
ments. Short maturities are readily taken, but
there is little demand for longer dates. Be
cause of trade conditions and depression a large
excess of reserves is reported \fy the banks. A
general spirit of caution and economy still per
sists on the part of producers and consumers of
goods and of investors.
Evidence of recovery is given by the decrease
in the number of idle cars and increasing freight

business by the railroads, the placing of fair
sized railroad equipment orders) and the ready
sale under unfavorable conditions of the Argen
tine loan and a large bond issue for the Penn
sylvania Railroad.
The effect of the war is most conspicuous in
the iron and steel industries, and improvement
continues. The Delaware River shipyards are
running at full capacity. The automobile trade
is brisk. The anthracite coal output is slightly
under last month’s record production, while
the bituminous output is not up to normal.
Building operations are increasing, but the
lumber business has fallen off. Paints, chem
icals, drugs, and wall-paper industries are good
and improving.
The hardware business and sales of electrical
supplies continue to increase. Leather is quiet,
with prices high and firm; footwear is very
quiet, with small sales. In wearing apparel (in
cluding knit goods, underwear, and dress goods)
manufacturers are fairly busy, with the excep
tion of men’s and boys’ clothing.
The dyestuffs situation is still critical with
cloth, carpet, and rug mills, and business in
these lines is poor.
Cotton-trade conditions are unsettled, while
cotton spinners report increased business.
Wool and woolen yarns are much below normal.
Silk mills are running full.
Crop conditions are reported good and the
outlook satisfactory.
D IS T R IC T N O . 4— C L E V E L A N D

Improvement of conditions in district No. 4,
as reported in April, is being held, but no addi
tional advance is noted. While our advices
seem to indicate no recession in business,
there is a slight pause, with fewer orders for
new business. Pay rolls are approximately
the same as a month ago. Steel mills are
running about 5 per cent increase of ingot
capacity over 30 days ago. Now that the
transportation companies, which consume onethird of the total tonnage of finished iron and
steel in the United States, have come back into
the market, the indications are that a normal
degree of activity should continue in that trade
for some months.

The lake season opened a little later than
usual, and now that the accumulation of grain
in the Northwest has been brought on, it is
found there are more vessels than can be sup
plied with grain, ore, and coal tonnage. Some
independent lake carriers will be compelled to
dock a number of their vessels unless these
conditions improve.

conditions show material improvement over
those of three months ago.
The demand for bank credit is very quiet
and modest in amount, with the result that
local institutions are apparently comfortably
able to care for it without recourse to borrow
ing. Bank loans as a whole reflect mofe a
desire to shift transactions already open than
The settlement of the coal strike in eastern a demand for fresh credit.
Manufacturers and exporters of goods for
Ohio, permitting the return to work of 14,000
miners, is a favorable item in the coal trade, war purposes are, of course, an exception to
the general rule. Diplomatic developments,
but prices are still unsatisfactory.
The marked decrease in idle cars and the in apparently, have had no effect either upon
creased volume of railroad traffic, east of Chi credit conditions or the; demand for funds, for
cago are items of improvement in the railroad which fact it is possible the presence of the
Federal reserve act may in large measure be
situation.
The business situation in the extreme south responsible.
ern part of this district is not participating in
the general improvement throughout the dis D IS T R IC T N O . 6— A T L A N T A .
trict, except in certain lines having war orders.
Conditions in the sixth district are generally
Weather conditions still continue to favor a good. The outlook is brighter than at any
normal crop of farm products.
time since the European war began.
Money has a firmer tendency, but there has
Collections are good over the district and the
been no increase in rates.
banks report a considerable decrease in re
newal of paper. The city banks have ample
D IS T R IC T N O . 5— R IC H M O N D .
loanable funds and are seeking loans. In the
There has been very little change in general mercantile lines, owing to the fact that jobbers
business conditions in the fifth reserve district and wholesalers did a small volume of business
during May. Agriculturally, the month was during the past fall and winter, it has had a
one of preparation. Hope for the future has marked effect on the decreased demand for
been increased in the presence of timely rains loans. However, commercial men report trade
and the knowledge that the close of the plant good; that the merchants’ stocks are somewhat
ing season shows that there is material diversi depleted, and jobbers and wholesalers are look
fication, especially in sections heretofore al ing forward to heavy buying in the summer and
most entirely given over to cotton. The recent fall. The clearings in Atlanta show, for the
softening in the price of this staple has some first time this year, a slight increase over the
what checked liquidation, which however had same time one year ago.
proceeded far enough to be of great help not
The cotton mills of the district are running
only to the debtors themselves but to their full force, and many overtime, with heavy or
creditor jobbers and merchants. Economy ders on hand. Reports indicate conditions
seems to be the watchword, and its practice, rapidly assuming normal in the Birmingham
while ultimately most beneficial to consumers, iron district.
has not contributed to the profits of those min
The naval-stores line appears rather slow in
istering to their wants.
regaining former prices, although the move
In consequence, most lines, including re ment is very good. Railroad conditions are im
tailers, report in comparison with last year this proving, but rather slowly. Pay rolls of the
time, a materially diminished volume of busi various industrial and manufacturing concerns
ness, although from almost every direction are, generally speaking, normal.

Agricultural conditions appear exceedingly
bright, but with a decreased cotton acreage
and quite a large reduction in the use of ferti
lizers. Seasonable weather is now prevailing
following an unusually dry spring.
D IS T R IC T J N O . 7— C H IC A G O .

Trade development in the seventh district
in May has been favorable. Moderate im
provement is jnoticed in the leading industries,
especially iron and steel and the [metal-working
branches, and at more satisfactory prices.
The continuation jof the serious (labor troubles
in the building trades at Chicago is a depressing
factor there. Movements of crude materials
and finished products of factories]show^steady
gain. The outlook for manufacturers, as a
whole, is regarded as improved.
Distributive operations maintain their re
cent advance. The jobbing centers report
increasing orders, with dry goods and collateral
lines most active at Chicago. Retail trade'Jhas
responded to more settled weather conditions
at interior points.
Winter wheat now promises a record-break
ing crop, with widespread rainfall improving
soil conditions over a large area of the grain
belt. All agricultural products continue in
demand at unusually profitable prices to grow
ers, despite lessened spot demands (from
Europe. A portion of the fruit district in
Michigan was injured by a few nights of low
temperature, grapes suffering most.
Money conditions remain easy. Commer
cial paper rates range from
to 4 per cent,
with offerings readily absorbed. Bank clear
ings indicate slight gains.
D IS T R IC T N O . 8— S T . L O U IS .

General business conditions in this district,
especially in the larger cities and manufactur
ing centers, while still below normal, indicate a
continued though slow improvement. The
manufacturing industries, except those affected
by war orders, show less improvement than
the general jobbing interests.
Crop conditions throughout the district con
tinue favorable, although the rainfall for April

was below the average and added to the de
ficiency for the }^ear. There was enough,
however, to allow the breaking of ground and
the planting of crops, so that, given sufficient
rainfall during the next two months, there is
every indication that the harvest will be
abundant. Wheat acreage has been mate
rially increased, especially in the cotton
States; in some districts more than 100 per
cent. The fruit crop is reported for the most
part in excellent shape.
There is still little demand for money. This
district, particularly the Southern States, has
gone through a period of enforced liquidation,
and it seems there will be no great demand for
funds until after the harvest. Banks as a
general rule, hold reserves largely in excess of
their legal requirements and are seeking outlets
for their surplus funds. There is little com
mercial paper of the best names available in
St. Louis, but what there is is quoted at 3J to
4 per cent. The bank loan rate in St. Louis is
about 5 per cent. Bank loans are quoted out
side of St. Louis and Louisville at 6J to 8 per
cent.
D IS T R IC T N O . 9— M IN N E A P O L IS .

Cold and rainy weather, with a snowstorm
on May 17, provoked some reports of damage
to the Northwestern grain crop. Careful in
vestigations in Minnesota and North and South
Dakota indicate that the wheat crop has
suffered no damage whatever and that injury
from frost is confined to winter rye, flax just
coming out of the ground, barley, and oats.
On the whole the frost and snow is considered
beneficial, as it has killed many of the weeds
which are common to the grain fields, and it
is not believed that the crop as a whole
has suffered any appreciable injury. A small
amount of seeding remains to be done in oats,
barley, and flax. The last half of May will be
mainly devoted to corn planting, which has
been delayed by the rains and the cold weather.
Weather conditions have been unusual, but
have had an excellent effect in giving grain
crops good root. Moisture conditions of the
entire ninth district are excellent.

Underlying business conditions of the entire
Northwest are sound. Manufacturing is some
what below normal, and the lumber business is
off as compared with previous years. Mer
chandising conditions in the local communities
are normal and the distributing houses of the
large cities are doing about the same business
as in former years. There is no evidence of
any real business depression, except in the
northern Michigan iron-mining districts and
on the iron ranges of northern Minnesota where
conditions in the steel business have reflected
themselves in a slowing down of mining opera
tion^. Northern Minnesota prospects are con
siderably better this season than a year ago,
and there is some improvement in the outlook
due to an increase in development work which
results from the action of the steel corporation
in resuming construction on the large steel
plant which is soon to be opened near Duluth.
Banks are in good condition and are meeting
the demands upon them without difficulty.
Business houses report that collections are fair
to good throughout the entire district. There
is considerable activity in the stock business
of western North and South Dakota and Mon
tana, the noticeable feature of which is the
heavy buying of horses for export to Europe
by English agents and heavy purchases of a
somewhat lighter grade of horses by agents of
the Italian Government. Quarantine condi
tions, due to the hoof-and-mouth disease,
have improved, permitting more active ship
ments from local points to Omaha and Chicago
markets.
A healthy spirit of optimism prevails through
out the district, and business men generally
are looking forward to a period of good business.
D ISTR ICT N O . 10—KANSAS CITY.

This district probably was never in better
condition so far as purely financial matters are
concerned than at the present time. Banks
throughout the district have an excess of loan
able funds, and interest rates, generally speak
ing, are below normal; in fact, many banks are
resorting to the purchase of outside commercial
paper in order to find employment for their

surplus funds, whereas in times past they have
experienced difficulty in meeting local de
mands.
"Crop conditions are promising, with an in
creased acreage of wheat and other cereals.
The recent ravages of the Hessian fly are likely
to sharply reduce the yield of wheat, and may
make a difference of millions of dollars. This
loss, however, may be substantially offset by
prices ruling higher than normal. Corn is now
being planted, with weather and soil in perfect
condition. Horticultural prospects are almost
perfect, with every promise of an abundant
yield. The live-stock market is active, with
prices steady to strong, as is also the hog and
sheep market.
The lead and zinc mining industry, on ac
count of record prices, is enjoying an unprece
dented activity, while the coal-mining industry
is normal for this season of the year.
The retail and wholesale trade is not quite
up to normal. Collections are slightly better
than normal, except such small bills as are de
pendent upon wages. Building operations are
not as extensive as a year ago, and, as a conse
quence, labor is not so fully employed. The
harvest season now approaching will probably
give employment to many who are now idle,
and the present conditions, insofar as they are
dependent upon wage earners, will undoubtedly
improve.
DISTRICT No. 11—DALLAS.

This section of the country appears to have
entered upon a period of lighter demand for
funds. There is little evidence of the pressure
which existed last fall. Wheat and oats will
soon be coming into the market and the agri
cultural promise is good. Higher prices for
cotton and' sales of cattle, horses, and mules
have brought large credits. These Jtiave liqui
dated outstanding liabilities and in many cases
left balances.
In the extreme northeastern portion of Texas
and lower Oklahoma agriculture is very prom
ising. Bank deposits are large and grain crops
will be heavy. Abundant rains have kept the
pastures and live stock in good condition.

Local commercial interests are fully up to nor
mal, but industrial plants are more or less af
fected by adverse conditions.
Eastern Texas, aside from that portion al
ready covered, has had some crop damage from
too much rain. Crops here are rather back
ward and there is demand for money. The
lumber conditions are improving. Oil produc
ers report a very low price for crude oil. Con
ditions are on the whole improving.
Bermuda onions are being shipped in large
quantities from southern Texas. Oats are
being harvested under ideal conditions. Corn
promises a large yield, and cotton, while a
little late, is growing rapidly.
There is a rather active demand for money
in western Texas. Alfalfa has just been cut
for the first time, yielding a good crop. There
is again activity in the mining section.
Central Texas has suffered from too much
rain, but on the whole agricultural conditions
are promising. The wheat outlook is excel
lent. Corn and cotton are in a favorable posi
tion.

shortly. Cattle and sheep interests are pros
pering. Wool sales are being contracted for at
good prices. The lumber industry shows no
improvement, and it is much depressed. The
petroleum industry is at least no more depressed
than a few months ago. Copper mining is very
active, and exports through Pacific coast ports
are at record figures. An interesting incident
has been the arrival of a 22,000-ton steamship
from New York with a first-cabin list of 400
passengers.
Credit conditions are easy throughout the
district. From March 4 to May 1 deposits of
national banks in the seven reserve cities
gained $12,000,000. Savings bank deposits,
likewise, show important gains. San Francisco
hotels report exceptional bookings throughout
the summer, indicating continuance of heavy
travel. The general feeling seems to be one of
mild optimism*.
Discount Rates.

Discount rate of each Federal reserve hank in effect on May
26, 1915.

D ISTRICT N O . 12—SAN FRANCISCO.
Federal reserve
bank.

Date of
last
change
of rate.

Maturi
ties of 30
days and
less.

Maturi Maturi
Agricul
ties of
ties of
tural and
over 30
over 60
live-stock
days to
days to
60 days, 90 days, paper over
inclusive. inclusive. 90 days.

Agricultural prospects throughout the twelfth
district are exceptionally bright. Unusually
late rains in California, while interfering to
Feb. 3
4
4
4|
5
some extent with early fruits, have been of Boston.................
New Y o rk ........... Feb. 18
4
4
4
5
4
Philadelphia....... Jan. 28
4
43f
5
great benefit and assure large crops. In gen Cleveland............ Feb. 6
4
4
5
Richm ond........... Feb. 19
4£
5
4£
eral, a large increase in grain acreage has been Atlanta................
4
4
Apr. 30
5
4£
Jan. 23
4
4
5
4i
stimulated by the exceptional prices. A fine Chicago................
4
St. L ouis............. Apr. 22
4
5
4£
4
Minneapolis........ May 18
4
5
5
barley crop, estimated at 1,000,000 bags, is Kansas C ity....... Jan. 28
4
4
4*
5i
4
Dallas.................. Feb. 4
4
5
4£
now being harvested in the Imperial Valley. San Francisco___ May 8
4
6
3^
4£
Early fruits, berries, and vegetables are going
Anthorized rate for acceptances 2 to 4 per cent.
to market in steadily increasing volume. A
On March 10 the Federal Reserve Board fixed the fol
considerable balance of the navel orange crop
lowing rates for rediscounts between Federal reserve
is being marketed at advancing prices, and the banks: 3£ per cent for maturities of 30 days and less; 4 per
Valencia orange crop will begin to move cent for maturities of over 30 days to 90 days, inclusive.

Resources and liabilities o f each o f the 12 Federal Reserve Banks and o f the Federal Reserve System at close o f business on
Fridays, Apr. SO to May 21.
[In thousands of dollars.]
RESOURCES:

Gold coin and certificates:
Apr. 30.......................
May 7.........................
May 14.......................
May 21.......... .............
Legal tender notes, silver
certificates, and subsid
iary coin:
Apr. 30...... ...............
May 7.........................
May 14.......................
May 21....................
Bills discounted, and
loans: a
Apr. 30.*....................
May 7.........................
May 14.......................
May 21.......................
Investments: &
Apr. 30.......................
May 7.........................
May 14...-..................
May 21.......................
Due from other Federal
Reserve Banks, net:
Apr. 30.......................
May 7.........................
May 14.......................
May 21.......................
All other resources:
Apr. 30.......................
May 7.........................
May 14.......................
May 21.......................
Total resources:
Apr. 30.......................
May 7.........................
May 14.......................
May 21.......................

Boston.

New
York.

$15,935
17,148
16,548
16,025

$91,940
95,804
96,824
98,643

1,269
1,106
1,130
1,238

15,321
21,239
24,726
25,487

Cleve Rich
land. mond. Atlanta. Chicago.

Phila
delphia.

$16,865 $16,170
16,904 17,532
16,589 17,303
18,430 17,329

3,944
3,651
3,579
3,247

729
746
742
741

$8,399
8,026
7,708
7,172

$4,745
5,027
4,705
4,485

53
75
79
96

470
245
197

2,213
2,383
2,536
2,359

6,118
5,501
4,851
4,189

2,104
1,907
1,655
1,443

1,934
1,369
1,116
1,043

6,943
6,775
6,877
7,191

1,899
1,844
2,050
2,195

8,130
9,360
9,408
9,666

2,129
2,354
2,359
2,403

1,980
2.329
2.329
2,424

1
1
1

531

15,792
8,494
4,045

667
852
1,667
459

550
453
781
1,079

3,148
2,006
3,098
2,102

21,866

140,458
142,404
142,952
140,956

22,934
23,576
22,896

199
246 :
409 .
424
25,908
25,914
26,258
26,406

$34,607 $10,382
34,360 10,905
34,567 10,905
35,858 10,912

211

4,780
4,661
4,447
4,361

2,288
4,570
3,712
3,516

San
Fran
cisco.

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

$7,535 $10,715
7,608 11,214
7,618 11,043
7,426 11,050

1,214
1,178
1,183
1,215

517
476
477
478

7
8
4
6

2,297
2,131
1,845
1,750

730
787
825
1,016

814
860
758
758

981
1,032
1,046
1,292

6,457
6,637
6,766
6,806

953
998
998
1,012

1,659
1,689
1,689
1,689

1,041
1,076
1,076
1,076

Total for
system.

$7,885 $13,050
8,372 11,134
8,715
8,538
8,233
7,813

$238,228
244,034
241,063
243,376

5
19
19

26,518
34,021
36,561
36,832

701
708
713
575

5,229
5,432
5,963
6,030

2,443
2,602
2,816
3,194

481
790
976
928

1,020
1,392
1,465

739
1,386
1,715
1,960

535
3,713
1,613

1,109
1,532
1,855
1,262

165
671
747
1,220

443
229
462
371

37
33
49
52

349
281
291
382

2,609
2,595
2,596
2,601

1,423
1,284
1,763
2,505

665
477.
367
294

650
669
647
306

572
225
52
84

21,737
22,995
22,928
22,836

15,433
15,930
16,106
15,977

11,083
11,600
11,355
11,399

48,258
50,828
53,199
52,144

15,811
16,684
17,529
17,922

10,845
11,313
11,183
11,393

13,904
14,467
14,289
14,202

14,387
14,737
15,266
14,922

36,586
35,440
34,735
34,626

i
!
j
!

1,211
1,996
2,045
2,070

25,469
28,284
28,721
29,342

1,100 1
1,648 |

9,468
10,139
13,215
6,650

689 j
677
1,456 !
1,448 ;

11,334
9,175
11,971
11,648

17,398
16,428 ,
16,151 ■
16,195

347,603
361,093
366,266
362,474

a The amounts of bills discounted for member banks exclusive of acceptances were as follows:

[In thousands of dollars.]
Boston.

New
York.

Phila- : Cleve
delphia. land.

.
Apr. 30.............................
May 7................................
May 14..............................
May 21..............................

$377
421
413
281

$382
408
403
422

Rich
mond. Atlanta. Chicago.

San
Fran
cisco.

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

Total for
system.
i

j
i

$622
$735
729
642 i
592 !
696
579 | 705

$6,943
6,775
6,877
7,191

$4,780
4,661
4,447
4,361

$760
747
798
865

$605
662
700
673

$419
506
504
536

$665
683
668
623

$1,257 !
1,416
1,774
2,036

$5,229
5,432
5,963
6,030

$22,774
23,082
23,835
24,302

For amounts of acceptances held by the several Federal Reserve Banks, see p. 84.
6 “ Investments” comprise “ United States 2 per cent and 3 per cent bonds on hand,” also “ Other investments” (municipal warrants and
kindred short term securities), as follows:
[In thousands of dollars.]
Boston.

United States 2 per cent
bonds............................
United States 3 per cent
bonds............................
Total United States
bonds on hand1__
Other investments (mu
nicipal warrants):
Apr. 30............................
May 7.........................
May 14.......................
May 21 .......................

New
York.

Phila
delphia.

Cleve- Rich Atlanta. Chicago.
land. i mond.

1
j

! San
St. . Minne- Kansas
Louis, apolis. City. Dallas.; Francisco.

i
$2,525

i
$100

$1,899
1,844
2,050
2,195

$8,139
9,360
9,408
9,666

$2,129
2,354
2,359
2,403

1,880
2.229
2.229 1
2,324

$1
1
1
1

3,525
2,932
3,112
3,241
3,281

711
756 ;
756
770 |

1 No change in figures between April 9 and May 21.

Total for
system.

:
$1,025

j
i
242 ! 1,025 :

1,000

Iftft :

$242

634
664 1
664
664

$930 ..............

$991

$5,713
1,100

991

6,813

220
I ll ............
1,005
146 ............
146 ............; 1,054
1,079
146 ............

18,656
21,471
21,908
22,529

930 ..............

Resources and liabilities o f each o f the 12 Federal Reserve Banks and o f the Federal Reserve System at close o f business on
Fridays, Apr. SO to May 21— Continued.
LIABILITIES.
i

Reserve deposits:
Apr. 30......................
May 7.........................
May 14.......................
May 21.......................
Due to other Federal re
serve banks—net:
Apr. 30.........! ...........
May 7....................... .
May 14.......................
May 21...................... .
Federal reserve notes in
circulation—net liabil
ity:
Apr. 30......................
May 7....................... .
May 14.......................
May 21.......................
Capital paid in:
Apr. 30......................
May 7....................... .
May 14.......................
May 21.......................
All other liabilities:
Apr. 30......................
May 7....................... .
May 14.......................
May 21.......................
Total liabilities:
Apr. 30.....................
May 7....................... .
May 14......................
May 21.......................

$16,105
17,801
18,501
16,876

$131,472
129,444
127,864
128,962

$21,410 $17,102
19,726 17,036
20,034 16,958
20,179 16,859

2,312
352

________________1 . . .
i

6,985
9,944
9,959
9,962

275
300

2,001
3,016
5,129
2,032
140,458
142,404
142,952
140,956

4,498
6,188
6,224
6,227

25,908
25,914
26,258
26,406

4,635
5,959
5,970
5,977

21,737
22,995
22,928
22,836

$8,951
8,968
8,809
9,010

78
:

3,449
4,781
4,800
4,804

22,934
23,576
22,896

$43,280 $13,726
44,269 13,910
46,598 14,746
45,536 15,134

$5,742
5,554
5,584
5,704

916

21,866

$7,927
7,755
7,928
8,249

5,077
4,875
4,807
4,320

3,647
3,763
3,348
3,255

2,288
3,252
3,316
3,344

1,673
2,257
2,396
2,410

42
48
55
64

21
26
27
30

15,433
15,930
16,106
15,977

11,083
11,600
11,355
11,399

4,900
6,559
6,601
6,608

2,085
2,774
2,783
2,788

1,894
2,345
2,374
2,383

$9,379
9,786
9,352
9,538

$7,618 $12,120
6,848 12,219
6,913 12,236
6,722 12,269

2,373
1,886
2,155
1,689

2,385
2,588
2,371
2,169

37
41
185

2,277
2,518
3,069
3,099

2,115
2,754
2,782
2,790

2,107
2,780
2,903
2,916

2,238
315

11,038
11,197
11,224
10,859
3,040
3,894
3,915
3,926

15,811
16,684
17,529
17,922

10,845
11,313
11,183
11,393

13,904
14,467
14,289
14,202

14,387
14,737
15,266
14,922

39,669
53,487
54,023
54,135
2,064
3,093
5,496
2,442

3
10
16
48,258
50,828
53,199
52,144

$294,832
293,316
295,523
295,038

17,398
16,428
16,157
16,195

347,603
361,093
366,266
362,474

IN D E X

Acceptances:
Page.
BankB authorized to acceptup to 100 per cen t.
71
Am ounts held by Federal reserve banks...........
84
Distribution of, b y classes of acceptors and
siz e s..............................................................................
84

Opinions of counsel of Federal Reserve Board—
Continued.
Exchange of 2 per cent bonds for one-year
gold notes and 3 per cent bonds........ ................
R igh t of member banks in

Address b y H on. W . P . G . H arding............................... 66-71

tors................................................................................

103

Federal reserve banks as collecting agents------

104

R edistricting d ecision..........................................
N o. 2 ............................................................................
N o. 2 ................................... 1......................................

Counties in Oklahoma transferred to district
N o . 10..........................................................................
Banks in Oklahom a transferred

to district

N o. 10 ..............

Counties in W est Virginia transferred to dis
trict No. 4 .................................................................

Banks in W est V irginia transferred to district
N o. 4 ............................................................................

Banks in New Jersey transferred to district

91
97
98

85-91

Counties in New Jersey transferred to district

I ll
In effect A pril 2 6 ........................................................
Em ergency currency:
Am ount outstanding..................................
79
Distribution o f................................ ..............................80-81
Gold im ports and exports ................................................ 76-77
Gold settlem ent fu n d ...................
82-83
77
Governm ent rate for telegram s.......................................
Inform al rulings of the board........... ................................ 72-75
Opinions of counsel of FederalReserve B o a rd .. . 91-105
Discount of acceptances based on im portation
or exportation of goods.........................................
Forward discount rates.............................................
Discount of acceptances indorsed b y mem ber
banks located in another d istrict...................... *
Purchase of U nited States bonds b y Federal
reserve banks.............................................................

102

Qualifications of Federal reserve bank direc

Circulars and regulations.....................................................78-79

101

northern New

J ersey ..........................................................................

Business conditions, general........................... 106-112
Committees of the Board................................................
Discount rates:
Form fo r .........................................................................

Page-

Resources and liabilities of Federal reserve banka. 112-113
Trustee powers, applications for, ap p roved ..............

W ork of the Board...............................................................

Full text of Federal Reserve Bulletin : June 1915

FRASER