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ISSUED BY THE

AT WASHINGTON

JUKE, 1917

WASHINGTON
GOV&iiNMENT FEINTING
1917

FEDERAL 1ESERVE BOABD,
E X O FF1CIO M E M B E It 8 .
WILLIAM G. MCADOO,
Secretary of the Treasury,
Chairman
JOiI.5f S K ELTON WlJiLIAMS,
Comptroller of the Currency,




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




SUBSCRIPTION PRICE OF BULLETIN.

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The Federal Reserve Bulletin is distributed without charge
to member banks of the system and to the officers and directors
of Federal Reserve Banks. In sending the Bulletin to others the
Board feels that a subscription should be required. It has
accordingly fixed a subscription price of $2 per annum. Single
copies will be sold at 20 cents. Foreign postage should be added
when it will be required. Remittances should be made to the
Federal Reserve Board. Member banks desiring to have the
Bulletin supplied to their officers and directors may have it sent
to not less than 10 names at a subscription price of $1 per annum.
No complete sets of the Bulletin for 1915 are available.
Bound copies of the Bulletin for 1916 may be had at $5 per copy.
in

TABLE OF CONTENTS.
Page.

Review of the month
Rediscount of notes secured by Liberty Loan bonds
Transactions with alien enemies
Circulars relating to Liberty Loan.,
Personnel of Liberty Loan committees
Cooperation of American Bankers' Association in connection with Liberty Loan
Use of Government frank on correspondence relating to Liberty Loan
Cost of telegrams relating to bond issue
Branch bank in Baltimore
Abrasion of gold coin caused by use of coin-counting machines
Fiduciary powers granted during month
Commercial failures reported for month of April
Amendments to Federal Reserve Act as passed by House and Senate
New national-bank charters granted
Amendment to act proposed by Board relative to banks engaging in foreign trade
Gold settlement fund
Operation of the Federal Reserve clearing system
Informal rulings of the Federal Reserve Board
Law department
Business conditions throughout the Federal Reserve districts
Actual and required reserves of national banks, 1915 to 1917
Chart showing
Discount operations of the Federal Reserve Banks
Acceptances
Resources and liabilities of the Federal Reserve Banks
Federal Reserve note accounts of Federal Reserve Banks and agents
Earnings on investments of Federal Reserve Banks
Discount rates in effect
Gold imports and exports




IV

423
429
431
432
437
438
439
439
440
440
440
44.1
441
450
450
454
455
450
458
460
483
484
485
487
491
493
495
496
496

JUNE 1, 1917.

VOL. 3
REVIEW OF THE MONTH.

The Federal .Reserve Banks during the month
of May have definitely assumed
C e ie unc
" ^ f t i ° n s of fiscal agents of
the Government of the United
States, acting in accordance with instructions
issued by the Secretary of the Treasury under
date of May 14 in which he designated them as
"fiscal agents of the United States to collate
applications and. to give notices of the allotments which the Secretary of the Treasury will
eventually make to subscribers and to issue
interim certificates for payments made on loan
subscriptions/' The amount of the Liberty
Loan offered by the Government of the United
States for the conduct of the war with Germany,
in which it is now engaged, was fixed in the
prospectus issued on May 14 at $2,000,000,000,
the issue to consist of fifteen-thirty year 3-| per
cent gold bonds. Further details of the conditions under which the loan is offered to the
public are furnished in the prospectus itself,
which is elsewhere reprinted in this issue. The
function of fiscal agent in connection with the
new loan places upon the Federal Reserve
Banks duties of first importance, particularly
in view of the conditions by which the Nation
is now confronted. The banks have actively
entered upon the performance of the functions
with which they are thus charged, and in their
new undertaking have been effectively assisted
by committees of business men and bankers
established through the cooperation of the
Federal Reserve Banks and of the local financial community in each of the Federal Reserve
cities. The effort of these local committees,
whose personnel is elsewhere given in detail, has
been to bring about a general popular understanding and interest in the new Government
loan and to enlist the aid of the various banks,
bond distributors, investment houses, and




No. 6

commercial and industrial concerns in bringing
the loan to the attention of the public at large
and in inducing and aiding the small investor
to subscribe and pay for such amount of new
bonds as he is able to absorb. On May 17 a
conference of representatives of these several
committees was held in Washington and the
details relating to the work of the local committees were agreed upon in order that future
steps might be taken harmoniously and simultaneously in all of the several districts. Circulars definitely stating the conditions under
which subscriptions may be made and the
disposition of the proceeds of the loan as well
as the conditions governing deposits thereof in
banks, were issued by the Treasury Department
under date of May 14, and are reprinted elsewhere in this issue.
Prior to the issue of the last Federal Reserve
Bulletin an issue of $250,000,ttfiStes" 0 0 ° o f s h o r t - t e r m certificates of
indebtedness had been placed
upon the market by the Treasury Department
for the purpose of anticipating the proceeds of
the sale of the new bonds under the Liberty
Loan. Subsequent issues have since then
taken place at varying rates of interest, as
follows:
Date.
..._.
Apr. 25
May 10
May 25

; Subscriptions. : Allotments.
_
_
'
:
i

8251,116,500 :
200,000.000 !
281,266,000 !

5250.000,000
200.000,000
200,000;ooo

It is intended to continue the policy thus
inaugurated by marketing at approximately
biweekly intervals issues somewhat similar in
amount.
The proceeds of these issues have been received in current funds and have immediately
been applied to the requirements of the new
Government financing. Advances to the rep423

424

FEDEEAL EESERVE BULLETIN".

JUNE 1,

1917.

resontatives of the belligerent- nations of them as depositaries) or immediately disbursEurope with which the United States is now ing them for expenses, under this plan it has
been possible to avoid any disturbance to the
allied have been agreed upon, as follows:
Great Britain
$400,000,000 money market. Inasmuch as such certificates
France
100,000,000 of indebtedness are payable at any Federal
Italy
100,000, 000 Reserve Bank, the banks and trust companies,
Russia
100,000,000 acting upon the plan referred to, gradually and
Belgium
45,000,000 without disturbing the money market acquire
By the adoption of this policy of gradual exchange in the place where subscriptions are
issue of short-term certificates the Treasury to be placed, besides securing, as already noted,
receives a regular flow of funds which are trans- an adequate interest return upon their money.
ferred to it from the banks end individuals who This enables them to settle the problem of loss
take up the certificates, the moneys thus com- of interest for themselves and their customers
ing in being steadily- applied to the require- to the extent of the certificates of indebtedness
ments of the Government in various directions. acquired by making payment in full for bonds
As the certificates are receivable in payment allotted without previous notice if desired.
It has been recognized by the Federal Refor subscriptions to the long-term bonds when
serve Board from the outset
prepared, it is thus possible to draw off from
the market a portion of the available funds, Policy of Federal that the commercial banks of
Reserve Board.
the country in handling this
which are then expended and returned to commercial channels practically as received, there- loan ought to act as distributors, following the
by avoiding considerable withdrawals at any principles laid down in the Board's statements
one time and making the loan operation a grad- of November 28, 1916, and March 8, 1917,
ual process of withdrawal of funds which are rather than to absorb and hold the bonds
subsequently funded into the new bonds. Sub- themselves except as a temporary matter and
scriptions for the certificates naturally come in such moderate and reasonable amounts as
primarily from the banks, which aro thus given may be taken by them as permanent investa short-term investment for their spare rands ments. This conclusion, dictated by well known
while they are sure of reimbursements out of theoretical considerations, has been amply rethe proceeds of the long-term securities, within inforced by the experience of foreign countries
in financing the present war, notably by that
60 days or less.
The certificates have been freely taken up of Great Britain. The current effort, therefore,
by institutions throughout the country, which is to place as much of the loan as possible in the
have recognized that the plan not only pro- hands of the ultimate holder, both because of
vided for the immediate needs of the Treasury the better influence upon credit conditions proand for its advances to the allied goveniments, duced by this policy and because of the fact
but was also likely to be far less disturbing to that the bonds thus placed would be more
financial conditions in general than any plan firmly held and loss likely to come upon the
of subscription and cash payment, even where market at an early date. It has been recogthe proceeds were to be left on deposit with the nized, however, that in this process of selling
institutions from which they were originally the bonds to those who must pay for them out
drawn, The plan, moreover, makes it possible of current or existing savings or earnings, it
to obtain interest upon funds subscribed for would be necessary to have the assistance of the
Government use from the moment when they banks in temporarily financing or carrying the
are actually placed at the disposal of the securities. This necessary assistance includes
Treasury, there being no intermediate period both the requirement of loans to individual cusof waiting for the issue of long-term bonds tomers of banks who require accommodation
By holding the funds in the banks (appointing for a period during which they are engaged in




JUNE 1,

1917.

FEDEEAL RESERVE BULLETIN.

paying for their bonds and possibly accommodation to these banks through rediscount at
Federal Reserve Banks designed to assist such
banks to extend aid to thoir customers. The
Board, therefore, recently took under consideration the question of establishing a rate of
discount for the short-term notes of member
banks secured by liberty Loan bonds or by
short-term certificates as collateral as well as
the question of a favorable rate of rediscount
for customers' notes collatoraled by such bonds
or certificates and offered, by the member
banks to the reserve banks with thoir own indorsement.
In dealing with this matter the Board first
considered the question of the
rates of discount, establishment ot a preferential
rate in favor of the short-term
notes of member banks collateraled by Government obligations of the kinds referred to. It
adopted the policy of granting a 3 per cent rate
upon 15-day notes of this description to all
Federal Reserve Banks that requested it, those
thus acted, upon during the month being Minneapolis; Kansas City, Chicago, and Cleveland,
while other banks have the matter under consideration. In some cases, as at Philadelphia, a
rate of 3 per cent was fixed for member banks7
15-day notes secured by bonds or certificates
as such, while in other cases the 3 per cent rate
was made applicable to 15-day notes of all
classes. Carrying further the policy thus
begun, the Board on May 22 issued to all Federal Reserve Banks a circular letter descriptive
of its attitude in regard to the matter and
informing them that it would ratify a rate of
3£ per cent, effective at all Federal Reserve
Banks that might desire to establish such a
rate for the rediscount of customers' loans collateraled by Government bonds or Treasury
short-term certificates. 'Phis step was taken
with a view to facilitating the operations of
the member banks in placing the bonds in
the hands of actual investors who might not
be in possession of the funds necessary to pay
their subscriptions in full at the time of receiving the bonds. It was thought that with
this rate of rediscount in operation, the com-




425

mercial banks would feel free to assist wouldbe bond buyers, knowing that they could
protect themselves if necessary by rediscounting the paper with the reserve bank of thoir
district. In explanation of its position on the
matter the Board, said in. the statciy-.cnt of
May 22:
"To meet temporary shortages which may
arise here and there, however, the Federal
Reserve System should freely render assistance
as needed, and it is suggested, therefore, that
when the time for the payment of the installments draws near Federal Reserve Banks establish or maintain liberal rates of discount
at which member banks may, by rediscounting
with the Federal Reserve Banks, recoup themselves for any unusual withdrawals they may
have to meet.
"The facilities offered by Federal Reserve
Banks for the rediscount of 15-day member
bank collateral notes, secured by commercial
paper or Government securities, should prove
of great value in meeting such withdrawals.
The rates now established for this class of paper
are low, varying between 3 and 3J- per cent in
the various districts. Banks should realize
that, under present circumstances, it will
be their patriotic duty freely to avail themselves of these facilities. They will thus be
able to keep money rates easy. Member banks
should also be impressed with the importance
of making their rediscount arrangements in
advance of the dates of payment of the various
installments.
"The Board has been advised that many
corporations, including savings banks, have
agreed to subscribe to substantial amounts
of the Liberty Loan, carrying the bonds for
their employees subject to payment in small
installments. It has been suggested that it
would be helpful to the banks m placing the
Liberty Loan, and particularly in assisting
corporations which make subscriptions of this
character, if Federal Reserve Banks were
authorized to establish a special Liberty Loan
rate of 3^ per cent for notes, drafts, and bills
of exchange drawn by customers of the banks,
including savings banks, having a maturity
not in excess of 90 days, and secured by
Liberty Loan bonds or United States Treasury
certificates of indebtedness. The Board has
given this matter its careful consideration and
has determined that it will grant such a rate
to any Federal Reserve Banks requesting it ;
good until countermanded or modified."

426

FEDERAL RESERVE BULLETIN.

JUNK 1,

1017.

Banks and trust companies which arc not the loan is, however, taken up by small investmembers of the Federal Ee-1 ors, it is to be expected that the latter will to
Relations with serve System are playing an; some extent draw upon their accounts with
iionmember banks, important part in the flotation savings institutions for the purpose of liquidatof the new loan and must be ing their subscriptions. It is not desirable that
relied upon to a considerable extent to assist j the savings banks should be so heavily drawn
in the placing of the bonds with the ultimate | upon as to compel them to sell or liquidate coninvestors, just as is true in the case of mem- ; siderable amounts of the old securities which
ber banks. The Federal Reserve Act pro-1 they have been holding in order to put themhibits member banks from obtaining redis- j selves into position to meet such demands from
counts at Federal Reserve Banks for or in their depositors. Were they to do so the effect
behalf of nonineinbers unloss authorized to do would be to produce an unwholesome market
so by the Federal Reserve Board. In order to condition, due to the sudden or enforced sale
give them access to the rediscount facilities of of the old securities held by the savings banks,
the Federal Reserve Banks, the Board, there- or else to place upon the commercial banks of
fore, in the same circular letter to which refer- the country the necessity of making advances
ence has already been made authorized Federal to the savings institutions, collateraled by the
Reserve Banks to discount paper received from old bonds which constitute the staple of the
members for a limited time and when secured investments of the latter. For reasons already
by Government securities, as stated below, stated, it is thought desirable that the savwhen the latter present it as agents for non- ings banks should direct their efforts to the
member institutions. On this subject the work of converting the future savings of
their own customers, as rapidly as the latter
Board stated its view as follows:
"While the law provides that member banks desire, into bonds. Savings banks, therefore,
may not, except with the special permission of have been assured by the Board that they will
the Board, act as agents in rediscounting for be given access to the rediscount facilities of
nonmember banks, the Board feels that, in the Federal Reserve Banks in the way already
view of the magnitude of the task imposed indicated, and that in return it is hoped they
upon all banks of the country, member banks
should be permitted to rediscount for non- will exert themselves to assist depositors and
member banks, including the savings banks, customers in taking up and paying for bonds
whenever the proceeds have been or will be to the extent that they may desire to subscribe
used in meeting demands caused by subscrip- therefor. Inasmuch as the rate of interest altions to the Liberty Loan. From June 15 to lowed by the savings banks in many parts of
July 15, 1917, subject to further notice. Federal
Reserve Banks are, therefore, authorized, for the country is 3i per cent or 4 per cent, there
such purposes, to rediscount such nonmember will be no interest inducement tending to lead
bank paper, indorsed by member banks and depositors at such banks to shift their holdings
otherwise eligible, without any further per- out of savings accounts and into the new bonds,
mission from this Board. It is left to the dis- but such subscriptions as they may make will
cretion of the Federal Reserve Banks to withhold the facilities whenever they believe that be the result of desire to assist in the flotation
assistance is requested for other than the large of the loan for patriotic and public reasons.
objects and purposes to be carried out at this
Further continuing the effort to avoid distime."
turbance of the money market,
ion of the Secretary of the Treasury
The savings banks of the country have a
special problem of their own in funds in banks. announced on May 16 that
banks and trust companies havProblem of sav- connection with the flotation
ings banks.
Some of them, as ing payments to make on account of subscripof t h e loan.
well as some of the trust com- tions for $100,000 or more bonds, and which
panies, are likely to become considerable in- shall have qualified as depositaries, may make
vestors in and holders, of the new bonds. As payment upon such subscriptions on June 28




JUNE 1,

FEDERAL RESERVE BULLETIN.

1917.

(as to any amounts not paid in Treasury certificates of indebtedness) by credit on their
books to the account of the Treasurer of the
United States, notice of the amount of such
credit to be given in duplicate to the Treasurer
and to the Federal Reserve Bank of the district on or before June 28. The amounts so
credited are to be withdrawn from time to time
when and as required. How long they may be
permitted to remain will depend in large measure on the extent to which the privilege of
prepayment for the bonds of the Liberty Loan
on or before June 28 is availed of. It will be
necessary that the early installments paid upon
subscriptions to the loan be devoted largely to
the payment of the short-term Treasury certificates of indebtedness which have been and
will be placed throughout the country chiefly
for making loans to Governments engaged in
making war against Germany, and in part to
meet unusual war expenditures of our own
Government. As, however, practically all the
proceeds of the Liberty Loan, whether advanced to foreign Governments or expended
directly by departments of the United States
Government, will be spent in this country in
payment of indebtedness heretofore or hereafter incurred, the bank resources of the United
States as a whole will not be diminished and the
operation involves only a shifting of credits.
Because of the great amount of work involved
in passing upon the qualifications and securities of the banks and trust companies which
will have payments to make, it has been
deemed necessary by the Treasury, until after
July 1, to limit to those banks and trust companies having payments to make on subscriptions for $100,000 or more bonds, the
provision for making payment by credit—the
object in providing for payment by credit
being to avoid any disturbance in the money
position which might result from large payments being made from June 28 to Monday,
July 2, a period when there is customarily a
heavy movement of funds due to corporate
interest and other payments. As soon after
July 2 as practicable, the qualifications and
securities of other banks and trust companies
desiring to participate in redeposits will be




100250—17

2

427

passed upon, and after provision has been
made for the immediate disbursements which
the United States will have to make up to and
including July 1, the proceeds of the loan
received from time to time, in full or installment payments, will be redeposited with
qualified banks and trust companies in a proportion, yet to be determined, based upon the
amounts of bonds of the Liberty Loan for
which subscriptions are filed by and through
them, and upon the amount of Treasury certificates of indebtedness acquired by them and
utilized in payment on or before June 28.
Such deposits will, of course, be subject to call.
Clearing-house reports received from principal eastern cities during the
« r i y ? a r t o f <** month show
reductions in reserve which may
be traced largely to the Government's loan operations during April and the early part of May.
Thus the reserve percentage for the 60 members
of the New York Clearing House Association
(indicating the ratio of total reserves to net
demand deposits) declined from 21.9 on April
21 to 20.4 on May 5. Subsequent foreign
Government deposits with the leading New
York banks apparently account for the improved reserve situation of the New Yorkbanks shown in the May 12 and 19 reports, the
reserve percentage for the latter date—22.6
per cent—indicating a return to the relatively
favorable condition disclosed by the April 7
report. Computations of the New York State
Banking Department disclose a similar decline
of the reserve percentage for all trust companies in Greater New York from 25.8 on April
21, to 23.5 on. May 5, and a subsequent rise to
25.6 on May 19. The reserve ratio of the
State banks in the Greater City likewise shows
a decline from 28.1 per cent to 26.1 per cent
on May 5 and a rise since that date to 28,5
per cent on the most recent available date.
During the week ending May 11 foreign gold
amounting to $48,900,000 was imported.
Average excess reserves of the Boston
Clearing House banks show a continuous
decline of excess reserves from $47,646,000 on
April 21 to $28,458,000 on May 12, as the
result of reductions in vault reserve and in

428

FEDERAL RESERVE BULLETIN.

amounts due from the Federal Reserve Bank
and approved reserve agents. The May 19
statement indicates a gain of about 2.1 millions
in excess reserve held in vault and with the
Federal Reserve Bank, though a further
decline by over $100,000 in total excess reserves. Philadelphia Clearing House banks
and trust companies indicate a steady decline
from $31,186,000 on April 21 to $17,303,000
on May 12, and an increase to $19,627,000 at
the end of the following week. A similar
development is shown for the 12 banks and
trust companies constituting the Cleveland
Clearing House Association.
Classified figures of earning assets for April
20 and May 18 reflect someOperations oi re- i , ,-,
, «
. ,
, , .,
what the amount oi assistance
serve osiiKi3.
erve

rendered by the 1 ederal Reserve
Banks during the four weeks ending May 18 in
placing with investors short-term United States
certificates of indebtedness. An increase of
about 42.4 millions is shown in the total bill
holdings, largely in the amounts of acceptances
bought in open market. Some of the banks,
notably Philadelphia and Richmond, report
large increases in the holdings of 15-day paper,
chiefly member banks' collateral notes. United
States securities on hand show an increase of
about 4.8 millions, as the result of temporary
investment by some of the reserve banks in
3 per cent certificates of indebtedness. There
were practically no additional purchases by the
Federal Reserve Banks of municipal warrants.
The following exhibit shows the bill holdings
of each Federal Reserve Bank on the two
dates above mentioned:
(000's omitted.)
Federal Reserve Bank.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
' Minneapolis
Kansas City
Dallas
San Francisco
Total, bills
Total municipal warrants
Total United States securities.
Total investments held




April
20.
$16,

May
18.

Net in- Net decrease.

$15,734
30,988 $14,188
21,544 10,251
9,985 2,587
15,576
3,165
5,284
594
10,877
4,381
7,053 2,725
9,534
i
4,361
2,450 I
4,082
806 I
10,065
2,720 j

102,662 145,023 42,361
15,163 14,639
109,575 114,390 4,815

.'227,400 274,052

46,652

$940

566
%

524

JUNE 1,

1917.

"For the five weeks ending May 18 the total
net inward gold movement

Gold imports and
exports.

^ i r . r n o ~°
, -, .
,
&19>563>000, gold imports
during the period, chiefly from
Canada, amounting to $55,192,000 and gold
exports during the same period, mainly to the
Far East, to $35,629,000. The increase of the
country's stock of gold through net gold imports since August 1, 1914, is shown in the
following exhibit:
Was

Gold imports and exports of the United States from Aug. 1,
1914, to May 18, 1917.
[000 omitted.]

Imports. Exports.

Total

451,955
685,745
385,304

8104,972
31,426
155,793
107,227

1,546,257

Aug. 1 to Dec. 31,1914.
Jan. 1 to Dec. 31,1915..
Jan. 1 to Dec. 31,1916..
Jan. 1 to May 18,1917..

399,418

$23,253

Excess
imports
over
exports.
i $81,719
420,529
529,952
278,077
1,146,8

i Excess oi exports over imports.

Favorable action was taken by the House
of Representatives on May 5
Amendments to ^ ^ r e f e r e n c e t(> t h e b m e m _
Federal Reserve
bodying the amendments to the
Federal Reserve Act which had
been recommended by the Board, and by the
Senate in a somewhat different form on May 9.
The conferences between the two Houses,
intended to reconcile the House and Senate
forms of the bill, were in progress during the two
weeks ending May 25. The Senate and House
bills taken together include practically everything that had been recommended by the
Federal Reserve Board, and also add thereto
a new feature which had been urged in one form
or another both in the House and Senate,
but which was not recommended by the Board.
This took shape in the so-called "Hardwick
amendment" whereby it was originally provided
that an exchange charge of not to exceed onetenth of 1 per cent might be levied upon the
aggregate face value of all checks presented at
any one time for collection. The exchange
provision is the outgrowth of the work done by
the " committee of twenty-five " of the American
Bankers' Association which has been opposing

•TUNIS 1,

1917.

FEDERAL RESERVE BULLETIN.

429

the development of the collection system estab- by the National Bank Act for the organization
lished by the Federal Reserve Board. Except of banks in cities of specified population. Elsefor this addition to the bill, the new legislation where a movement toward membership has
is regarded by the Board as strengthening the more largely affected the larger institutions than
Federal Reserve Act in ways which are con- it has those of smaller capitalization, but the
sidered to be particularly essential at the present steady growth of membership now appears to
time in view of the necessities of the Govern- be definitely assured, granting satisfactory adment for assistance through large loans. Some ministration and other reasonably favorable
important administrative changes and improve- conditions.
On May 18 a party including the Secretary
ments will be rendered possible in consequence
of the Treasury and Governor
of the legislation. The conference committee
%Sl
Harding, of the Federal Rehas not yet reported the result of its work,
serve Board, left Washington
and the final form of the bill remains, therefore,
for an extended journey in behalf of the
in doubt.
The movement of State institutions into the Liberty Loan. Visits were made to Chicagof
Membership of F e d e r a l Reserve System has Milwaukee, St. Paul, Minneapolis, Des Moines,
State banks.
continued during the month. Denver, St. Joseph, Omaha, Topeka, Kansas
The Commerce Trust Co., of City, Kans., Kansas City, Mo., and ColumKansas City, was admitted on May 19, and the bus, Ohio. At each point addresses were
Mississippi Valley Trust Co., of St. Louis, on made by Mr. McAdoo and Mr. Harding, the
May 10, while arrangements for the admission latter dealing primarily with the banking asof several other large banks are in progress and pects of the proposed loan and the duties and
will doubtless be completed as soon as the relationship of the bankers of the coimtry to
amendments to the Federal Reserve Act, now the undertaking. Great interest and enthusipending, are enacted. A number of State asm were manifested by the public throughout
institutions are either in process of examination the entire journey and the heartiest pledges of
or passing through the preliminary stages of cooperation and aid were received. In order
the process of admission to the system. The to further the development of the plans for the
State banks generally have viewed with approval placing of the loan a similar trip, beginning on
the amendments to the Federal Reserve Act June 4 and lasting for nine days, has been pronow pending in Congress, particularly in so far jected. On this it is planned to visit New Engas these have reference to the status of State land and southwestern points, the journey
institutions in the system. The financial con- extending as far as New Orleans. Mr. Hamlin
ditions growing out of the war have likewise will be a member of the party during the visit
impressed them with their obligations to the to New England and Governor Harding will
general banking organization of the country and join it during the time spent in the South and
have undoubtedly led many to look at the ques- West.
tion of membership with a seriousness that
they otherwise perhaps would not have felt.
Rediscount of Notes Secured by Bonds.
In the main, however, the influence operating
On May 22, after consideration of the questo extend the membership of the system is the
tion how the Federal Reserve Banks could best
general recognition of the benefits that may
be directly derived from it by institutions of participate in furthering the progress of the
all classes. Among the small State banks of the Liberty Loan, the Federal Reserve Board deWest and Northwest there has been a wide- termined upon the establishment of a rate of
spread demand for a modification of the Federal 3i per cent for the rediscount of customers'
Reserve Act designed to.permit the admission notes of not to exceed 90 days' maturity, seof banks with capital smaller than that required I cured by Treasury certificates or Liberty Loan




430

FEDERAL RESERVE BULLETIN.

bonds, such rate to be approved for any Federal
Reserve Bank which might see fit to establish
it. The Board's view of the matter was set
forth in a letter addressed to all Federal
Reserve Banks, and transmitted under date
of May 22, as follows:
The task of developing an organization for
the successful flotation of the Liberty Loan
through the agency of the Federal Reserve
Banks has made satisfactory progress. All
districts report that the committees organized
by the Federal Reserve Banks are actively at
work with very encouraging results.
At its meeting to-day the Federal Reserve
Board considered the question how Federal
Reserve Banks may use their credit facilities
to assist in the placing of the loan, and it was
determined that this could be brought about
by establishing a special rate for notes secured
by Liberty Loan bonds and United States
Treasury certificates of indebtedness and by a
special ruling applying to facilities to be
granted to member banks rediscounting such
notes for nonmember banks.
In order that the installments due on the
Liberty Loan may be steadily and gradually
anticipated, the Board believes that all the
banks of the country should cooperate in accumulating United States Treasury certificates
of indebtedness. The purchase of these certificates in advance of the dates on which the
Liberty Loan installments fall due, combined
with the plan of redeposit outlined hy the
Secretary of the Treasury in Circular No. 79,
dated May 16, 1917, will, it is thought, reduce
to a minimum any disturbance of the money
market that might result from the transfer of
the large sums of money employed in paying
for the Liberty Loan.
As far as possible all moneys paid in will be
returned to the market without delay, in order
that there may be no substantial withdrawal
of funds from general use. With this policy
in operation, it is hoped to avoid any appreciable shortage or contraction of banking
funds, even though some time be required for
the return of the funds to the usual channels.
To meet temporary shortages which may
arise here and there, however, the Federal
Reserve System should freely render assistance
as needed, and it is suggested, therefore, that
when the time for the payment of the installments draws near Federal Reserve Banks
establish or maintain liberal rates of discount
at which member banks may, hj rediscounting
with the Federal Reserve Banks, recoup them-




JUNE 1,

1917.

selves for any unusual withdrawals they may
have to meet.
The facilities offered by Federal Reserve
Banks for the rediscount of 15-day member
bank collateral notes, secured by commercial
paper or Government securities, should prove
of great value in meeting such withdrawals.
The rates now established for this class of paper
are low, varying between 3 and 3J per cent in
the various districts. Banks should realize
that, under present circumstances, it will be
their patriotic duty freely to avail themselves
of these facilities. They will thus be able to
keep money rates easy. Member banks should
also be impressed with the importance of
making their rediscount arrangements in advance of the dates of payment of the various
installments.
The Board has been advised that many
corporations, including savings banks, have
agreed to subscribe to substantial amounts of
the Liberty Loan, carrying the bonds for their
employees subject to payment in small installments. It has been suggested that it
would be helpful to the banks in placing the
Liberty Loan, and particularly in assisting
corporations which make subscriptions of this
character, if Federal Reserve Banks were authorized to establish a special Liberty Loan
rate of 3J per cent for notes, drafts, and bills
of exchange drawn by customers of the banks,
including savings banks, having a maturity not
in excess of 90 days, and secured by Liberty
Loan bonds or United States Treasury certificates of indebtedness. The Board has given
this matter its careful consideration and has
determined that it will grant such a rate to any
Federal Reserve Banks requesting it, good until
countermanded or modified.
Consideration has also been given to the
needs of nonmember banks under present conditions. While the law provides that member
banks may not, except with the special permission of the Board, act as agents in rediscounting for nonmember banks, the Board feels
that, in view of the magnitude of the task imposed upon all banks of the country, member
banks should be permitted to rediscount for
nonmember banks, including the savings banks,
whenever the proceeds have been or will be used
in meeting demands caused by subscriptions to
the Liberty Loan. From June 15 to July 15,
1917, subject to further notice, Federal Reserve
Banks are therefore authorized, for such purposes, to rediscount such nonmember bank
paper, indorsed by member banks and otherwise eligible, without any further permission

FEDBBAL BBSE.RVE BULLETIN.

JUNK 1,

from this Board. It is left to the discretion
of the Federal liescrve Banks to withhold the
facilities whenever they believe that assistance
is requested for other than the large objects and
purposes to be carried out at this time.
Transactions With Alien Enemies,
The Federal Reserve Board, acting upon advices received from the Department of State,
has transmitted to Federal Reserve Banks for
retransmission to member and other banks in
the several districts for their guidance a letter
relating to transactions of American banks
which involve dealings with alien enemies.
The letter is as follows:
The Board is in receipt of a letter from the
Counselor for the Department of State, calling
its attention to the desirability of guarding
against transfers of banking credits to neutral
countries for account of alien enemies, and
against the use of domestic credits for similar
purposes.
The Board is informed that the State Department is not concerned in the ordinary commercial transactions and routine bank accounts
of aliens of whatsoever nationality, resident in
the United States, with banks situated therein.
It is suggested by the department, however,
that each banker doing business in this country
should scrutinize with particular care such accounts as may be held by his bank for any resident alien enemy, and in the event any suspicious transactions occur in connection with
such accounts, that they be reported immediately to the Board for transmission to the
proper department,
IMPORTANT TRANSACTIONS.

431

otherwise to neutral countries in Europe for
the account of alien enemies.
It is, of course, difficult for a bank to determine offhand whether or not a transfer is
for the account of alien enemies, when it is
asked by an individual or corporation in this
country to make a transfer to a bank in a
neutral country.
The Board is advised, however, that the
State Department is anxious that bankers
throughout the country should be warned that
they should scrutinize most carefully every
application made to them involving the transfers of funds to neutral European countries,
which transfers seem intended to give aid to
the enemies of this country, either directly or
indirectly.
The Board is further advised that the State
Department is interested in banking transactions between this country and Mexico or
other Latin-American countries, as there is
some evidence in its possession that alien enemies operating either as individuals or through
the instrumentality of an American corporation, or otherwise, are desirous of fomenting
trouble between this country and other Re^
publics of this hemisphere, and in order to
further their plans they must rely upon financial assistance through the form of credits
opened in their behalf in this country. It is,
of course, true that many accounts held by
banks in this country for the benefit of alien
enemies resident in countries adjacent to the
United States are ordinary commercial accounts, and up to the present time the State
Department has disclaimed any disposition to
interfere with the free operation of such accounts, being interested only in such transactions as may appear to the bankers who a're
requested to facilitate the same as being of a
suspicious character.
The Board is of the opinion that, in view of
your intimate contact with member banks in
your district, you are in a position to secure
their cooperation in scrutinizing and supervising financial transactions made or attempted
to be made for the benefit of alien enemies.
Reports of suspicious transactions coming to
the notice of banks should be made to the
Board by wire, in order that the officials of
the proper department may be advised and
immediately make investigations.

The transactions which are interesting to the
State Department may bo divided into three
classes:
1. Foreign exchange transactions between
banks in this country and banks in neutral
countries in Europe;
2. Ordinary banking transactions such as the
obtaining of credits by alien enemies resident
in the United States;
3. Banking transactions between this country and Mexico, or Central American and South
NONMEMBER BANKS.
American countries.
There are, of course, many trust companies,
The State Department is especially interested in preventing all transfers of money by State banks, and private bankers with which
cable, by draft, or by shipments of currency or your bank has no intimate relationship. The




432

FEDERAL RESERVE BULLETIN.

Board believes, however, that if an appeal
should be made to these banks and bankers
they would readily observe such precautionary methods as you may, with the approval of
the Board, ask your member banks to comply
with. Express companies and telegraph companies doing a banking business in transmitting
currency or credits by express or by wire should
also be" asked to cooperate on the lines suggested above.
The attention of the Comptroller of the
Currency has been called to this letter and he
has been asked to enlist the cooperation of the
large force of national-bank examiners working
under his supervision. It is believed that
their assistance will be of great value in securing
the information desired and in further enlisting
the cooperation of the banks with which they
come in contact in their work. You are requested to urge the banking departments of
the States in your district to cooperate in the
same manner through their bank examiners.
It is requested by the Board that a copy of
this letter be sent to all banks and trust companies in your district, in order that they may
understand that, while innocent transactions
of a domestic character with alien enemies are
unobjectionable, no business of a nature calculated to give aid or comfort to the enemy
directly or indirectly will be countenanced.
MAY 10, 1917.
Flotation of Liberty Loan.
Following are the circulars and communications issued by the Treasury Department with
respect to the new Liberty Loan. They are reprinted here for convenience of reference and
also as a matter of record. Later documents
relating to the same matter will be published
from time to time in order that the complete
series may be available to readers of the FEDERAL RESERVE BULLETIN in consecutive form.
On May 14 a prospectus or general description was sent out as follows:
LIBERTY LOAN.
1917.
Department Circular No. 78.
(Liberty Loan Circular No. 1.)
Loans and Currency.

TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, May 14,1917.
The Secretary of the Treasury invites subscriptions at par and accrued interest from the




JUNE 1,

1917.

people of the United States of America for
$2,000,000,000 of the 15/30 year 3-J- per cent
gold bonds of an issue authorized by act of
Congress approved April 24, 1917.
DESCRIPTION OF BONDS.

Bearer bonds, with interest coupons attached,
will be issued in denominations of "*""* """"
$500, and $1,000. Bonds registered as to principal and interest will be issued in denominations of $100, $500, $1,000, $5,000, $10,000,
$50,000, and $100,000. Provision will be made
for the interchange of bonds of different denominations and of coupon and registered
bonds, upon payment, if the Secretary of the
Treasury shall require, of a charge not"exceeding $1 for each new bond issued upon such exchange. Transfers of registered bonds and
exchanges of registered and coupon bonds and
of bonds of different denominations will not be
made until October 1, 1917, or such later date
as may be designated by the Secretary of the
Treasury.
The bonds will be dated June 15, 1917, and
will bear interest at the rate of 3J per centum
per annum from that date, payable semiannually on December 15 and June 15. The bonds
will mature June 15,1947, but the issue may be
redeemed on or after June 15,1932, in whole or
in part, at par and accrued interest, on three
months' published notice, on any interest day;
in case of partial redemption the bonds to be
redeemed to be determined by lot by such
method as may be prescribed by the Secretary
of the Treasury. The principal and interest
of the bonds will be payable in United States
gold coin of the present standard of value, and
the bonds will be exempt, both as to principal
and interest, from all taxation, except estate
or inheritance taxes, imposed by authority of
the United States or its possessions, or by any
State or local taxing authorities. The bonds
will not bear the circulation privilege, but will
be receivable as security for deposits of public
money.
If any subsequent series of bonds (not including Treasury certificates of indebtedness and
other short-term obligations) shall be issued by
the United States at a higher rate of interest
than three and one-half per centum per annum
before the termination of the war between the
United States of America and the Imperial
German Government (the date of such termination to be fixed by a proclamation of the President of the United States), the holders of any
of the bonds of the present issue shall have the
privilege of converting the same, within such
period and upon such further terms and condi-

JUNE 1,

1917.

tions covering matters of detail as the Secretary
of the Treasury may prescribe, into an equal
par amount of bonds bearing such higher rate
of interest and substantially identical with the
bonds of such new series, except that the bonds
issued upon such conversion are to be identical
with the bonds of the present series as to maturity of principal and interest and terms of
redemption.
APPLICATIONS.

The agencies designated by the Secretary of
the Treasury to receive applications for the
bonds now offered are the Treasury Department
in Washington, D. C, and the Federal Reserve
Banks in Boston, New York, Philadelphia,
Cleveland, Richmond, Atlanta (with branch at
New Orleans), Chicago, St. Louis, Minneapolis,
Kansas City, Dallas, and San Francisco. Said
banks have been designated also, as fiscal agents
of the United States, to collate applications and
to give notices of the allotments which the Secretary of the Treasury will eventually make to
subscribers and to issue interim certificates for
payments made on allotted subscriptions.
Large numbers of National banks, State
banks and trust companies, private bankers,
express companies, newspapers, department
stores, and other private corporations, firms,
and organizations, have patriotically offered to
receive and transmit applications for the Liberty Loan without expense to the United States
or to the applicants. The Secretary of the
Treasury, appreciating the value of these offers,
will have application blanks widely distributed
throughout the country to these private institutions and also to trie post offices and subtreasuries. Individual subscribers may use
these conveniences or may send their applications directly to the Treasury Department at
Washington and to the Federal Reserve Banks.
As the law prohibits the allowance or payment of
commissions on subscriptions, all those through
whom applications are made render service
as a patriotic duty without compensation.
All applications^ must be in the form prescribed by the Secretary of the Treasury and
be accompanied by a payment of 2 per centum
of the amount of bonds applied for. Applications must be for $50 or any multiple thereof,
but any application for one $50 or $100 bond
until further notice may be allotted at once and
payment in full accepted against delivery of an
interim certificate. Applications must reach
the Treasury Department or a Federal Reserve
Bank not later than noon, June 15, 1917, the
right being reserved by the Secretary of the
Treasury to close the subscription * on any
earlier date.




433

FEDERAL RESERVE BULLETIN.

ALLOTMENTS.

Allotments will be made as soon after June
15 as possible. The Secretary of the Treasury
reserves the right to reject any subscriptions,
or to make allotment of part of the amount
subscribed for, and to allot in full upon applications" for smaller amounts of bonds even
though it may be necessary to reduce allotments on applications for larger amounts,
should any such action be deemed by him to
be in the public interest; and his decision in
these respects will be final. In any case of the
rejection of an application, the accompanying
payment of 2 per centum of the amount applied
for will be returned. In case of partial'allotment the 2 per centum payment will be retained
and any excess applied upon the next installment. Upon allotment of bonds by the Secretary of the Treasury, the subscriber will
receive notice thereof signed by or on behalf
of the Federal Reserve Bank of his district.
Unless and until payment in full has been made,
further payments must be made when and as
below provided under penalty of forfeiture of
any and all installments previously paid and of
all right or interest in the bonds allotted.
PAYMENTS.

The dates for payment in installments are as
follows:
Two per centum on application;
Eighteen per centum'on June 28, 1917;
Twenty per centum on July 30, 1917;
Thirty per centum on August 15, 1917;
Thirty per centum on August 30,1917.

It is strongly recommended that subscribers
avail themselves of the assistance of their own
banks and trust companies. In cases where
they do not do so, subscribers should make
payment, either in cash to the Treasury Department in Washington or one of the Federal
Reserve Banks, or by bank draft, check, postoffice money order, or express company money
order, made payable to the order of the Treasurer of the United States if the application is
filed with the Treasury Department in Washington (thus: "Treasurer of the United States,
Liberty Loan Account"), or, if the application
is filed elsewhere, made payable to the order
of the Federal Reserve Bank of the district in
which the application is filed (thus: "Federal
Reserve Bank of
, Liberty Loan Account "). All checks must be certified. United
States certificates of indebtedness issued under
the act of April 24, 1917, will be received at
par and accrued interest to date of settlement
m making payment in full or in installments.

434

FEDERAL RESERVE BULLETIN.

Interim certificates for installment payments
due on or after June 28 will be issued by or
on behalf of the Federal Reserve Banks as
fiscal agents of the United States, and delivered as far as practicable in accordance with
written instructions given by subscribers.
Upon payment of the installment due June
28, theWtice of allotment must be surrendered,
and upon payment of each subsequent installment the interim certificate must be presented
to the Federal Reserve Bank which issued the
certificate for notation thereon of the fact of
such payment, or for exchange for a new certificate. After full payment such certificates
must be surrendered In exchange for the bonds
when prepared.
Payments of installments must be made
upon the dates above stated until full payment
has been made. Payment in full may be
made on and after allotment and before August 30, 1917, if two weeks' prior notice in
writing of the intention to make such payment,
stating the date upon which such payment will
be made, shall have been filed with the Federal
Reserve Bank of the district in which the subscriber will make payment; but such notice
shall not be required in case of any allotment
of not exceeding $10,000 bonds or when payment is to be made in Treasury certificates of
indebtedness.
As the bonds will carry six months7 interest
payable December 15, 1917, interest accruing
on the bonds allotted, from June 15, 1917, to
the date of full and final payment, must be
added to the last payment, credit being given
for interest at the like rate upon the several
installment payments as follows: As to 2 per
centum of the amount of bonds allotted upon
application, from June 15, 1917, and, as to
subsequent installments duly paid, from the
respective dates upon which payment thereof
is required to be made as above provided.
Tables showing the amount of accrued interest
payable on August 30 in case payment is made
in installments, and the amount of accrued
interest payable upon various dates in case
payment is made in full prior to August 30 as
herein permitted, will be prepared and furnished through the Treasury Department in
Washington and the Federal Reserve Banks.
Within the United States and its Territories
and insular possessions, bonds when prepared
will be delivered so far as practicable in accordance with the written instructions of the
holders of the interim certificates upon surrender to the Treasury Department in Washington, or the Federal Reserve Bank which
issued the certificate, of interim certificates




JUNE 1,

1917.

full-paid or accompanied by payment of the
final installment. The expense of delivery will
be borne by the United States. Delivery of
definitive bonds to holders of full-paid interim
certificates will commence as soon as practicable after June 28.
Further details may be announced by the
Secretary of the Treasury from time to time,
information as to which as well as forms for
applications may be obtained from the Treasury Department and any Subtreasury or Federal Reserve Bank.
W. G. MOADOO,

Secretary of the Treasury.
This was followed on May 16 by a letter
or circular relating to the retention of subscriptions in banks as follows:
LIBERTY LOAN.
PURCHASE OF TREASURY CERTIFICATES OF INDEBTEDNESS AND DEPOSITS OF GOVERNMENT
FUNDS IN CONNECTION WITH THE LIBERTY
LOAN.
1917.
Department Circular No. 79.
Liberty Loan Circular No. 2.
Division of Public Moneys.

TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, May 16, 1917.
To incorporated Banlcs and Trust Companies in
the United States:
Referring to Treasury Circular No. 78, dated
May 14, 1917, inviting subscriptions for bonds
of the Liberty Loan:
In order to avoid, even temporarily, a
derangement of the money situation, the Secretary of the Treasury earnestly requests that all
banks and trust companies, which have or
expect to have payments to make for themselves, or others, on account of subscriptions to
the loan, acquire, as and when offered from
time to time, Treasury certificates of indebtedness, issued under the act approved April 24,
1917, to as large an amount as practicable and
at least equal to 50 per cent of the payments
which they will have to make from time to
time on account of subscriptions, and that they
utilize such certificates of indebtedness in
making payment. Inasmuch as such certificates of indebtedness are payable at any
Federal Reserve Bank, banks and trust companies in acting upon this request will, gradually and without disturbing the money
market, acquire exchange payable in the place
where subscriptions arc to be paid, and meanwhile will secure an adequate interest return

JUNE 1,

FEDERAL RESERVE BULLETIN.

1917.

upon their money, and the privilege for themselves and their customers, to the extent of the
certificates of indebtedness acquired, of making
payment in full for bonds allotted, without
previous notice, if desired.
As a further precaution, the Secretary of the
Treasury has determined that banks and trust
companies having payments to make on account of subscriptions for $100,000 or more
bonds, and which shall have qualified as depositaries, may make payment upon such
subscriptions on June 28 (as to any amounts
not paid in Treasury certificates of indebtedness) by credit on their books to the account of
the Treasurer of the United States, of which
credit and of the amount thereof notice shall
be given in duplicate to the Treasurer and to
the Federal Reserve Bank of the district on or
before June 28. The amounts so credited will
be withdrawn from time to time when and as
required. How long they may be permitted
to remain will depend on large measure on the
extent to which the privilege of prepayment
for the bonds of the Liberty Loan on or before
June 28 is availed of. It will be necessary that
the early installments paid upon subscriptions
to the loan be devoted largely to the payment
of the short-term Treasury certificates of indebtedness, which have been and will be placed
throughout the country chiefly for making
loans to Governments engaged in making war
against Germany, and in part to meet unusual
war expenditures of our own Government.
As, however, practically all the proceeds of the
Liberty Loan, whether advanced to foreign
Governments or expended directly by departments of the United States, vail be spent in
this country in payment of indebtedness heretofore or hereafter incurred, the bank resources
of the United States as a whole will not be diminished and the operation involves only a
shifting of credits.
Because of the great amount of work involved in passing upon the qualifications and
securities of the banks and trust companies
which will have payments to make, it is deemed
necessary, until after July 1, to limit to those
banks and trust companies having payments
to make on subscriptions for $100,000 or more
bonds, the provision for making payment by
credit—the object in providing for payment by
credit being to avoid any disturbance in the
money position which might result from large
payments being made from June 28 to Monday, July 2, a period when there is customarily
a heavy movement of funds due to corporate




100256—17

3

435

interest and other payments. As soon after
July 2 as practicable the qualifications and
securities of other banks and trust companies
desiring to participate in redeposits will be
passed upon, and after provision has been made
for the immediate disbursements which the
United States will have to make up to and
including July 1, the proceeds of the loan received from time to time, in full or installment
payments, will be redeposited with qualified
banks and trust companies in a proportion,
yet to be determined, based upon the amounts
of bonds of the Liberty Loan for which subscriptions are filed by and through them, and
upon the amount of Treasury certificates of
indebtedness acquired by them and utilized in
payment thereupon on or before June 28.
Such deposits will, of course, be subject to call.
Interest at the rate of 2 per cent per annum
is to be allowed by the banks upon the amounts
credited and redisposited from time to time.
A statement as to the formalities of qualification for the purpose of making payment by
credit, and of receiving redeposit of funds, and
of the securities acceptable for such purposes,
will be promptly furnished. The furnishing of
security for such deposits is required by section
7 of the act approved April 24, 1917, under
which the Liberty Loan is issued, and section
5153 of the Revised Statutes and amendments
thereto. Each bank or trust company should
at the earliest possible date make report to
the Federal Reserve Bank of its district of
the character and amount of the securities
which it will offer as security. These will be
reported to the Secretary of the Treasury, and,
when his approval shall have been obtained,
notification thereof will be made to the banks
and trust companies, respectively.
The Secretary feels that he can not too
strongly urge upon the banks and trust companies of the country that it is their patriotic
duty to prepare for the payments which they
will have to make on account of the Liberty
Loan, first, by the acquisition of certificates of
indebtedness, and, second, by qualifying under
the act so as to be in a position to make payment by credit if the subscriptions by and
through them are likely to amount to $100,000
or more bonds. Bearing in mind the enormous
amount of work involved on the part of the
Treasury Department and Federal Reserve
Banks, he particularly urges that action in
these matters be taken as promptly as possible
by the banks and trust companies, inasmuch as
it may be physically impossible to pass upon

436

FEDERAL RESERVE BULLETIN.

the qualifications of Late applicants if many applications are long delayed, and the object of
permitting payment in certificates of indebtedness—to avoid accumulation of great cash payments within a few days—will in large measure
be defeated if such purchases are long postponed.
W. G. MCADOO,

JUNE 1, 1917.

money orders, drawn to the above order, will
be accepted.
5. After this procedure has been followed the
organization has no further responsibility, the
subscriber having entered into direct relations
with the Federal Reserve Bank, and subsequent communications will be with the subscriber direct.

W. G. MCADOO,
Secretary of the Treasury.
Secretary of the Treasury.
The following letter conveying suggestions
The following is the form of application for
as to the methods by which organizations and
bonds sent out by the Treasury Department for
enterprises might work in behalf of the loan
the use of prospective subscribers:
was transmitted on May 15, as follows:

LIBERTY LOAN.

Treasury T.) epar tin en t,
1917 Liberty Loan—Form No. 1.

SUGGESTIONS AS TO METHODS OF RECEIVING
AND FILING SUBSCRIPTIONS BY ORGANIZATIONS OTHER THAN BANKS OR TRUST COMPANIES.

Loans and Currency.

Treasury Department,
1917 Liberty Loan.
Circular Letter No. 1.
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY,

Washington, D. C, May 15, 1917.
Referring to your highly appreciated offer
of services in connection with the distribution
of the Liberty Loan, I desire to suggest the
method of procedure whoroby such services
may be rendered with a minimum of effort on
the part of your organization and with a maximum of efficiency.
1. The organization solicits subscriptions in
its own way from its readers, customers, and
the public in general, by methods to be devised by the organization.
2. Subscriptions received should be on Form
1,'a copy of which is inclosed herewith, or on
a facsimile thereof which you may print yourself, or additional copies can be obtained by
application to the Federal Reserve Bank in
your district or to the Secretary of the Treasury, Division of Loans and Currency, Washington, D. C.
3. The organization should file from time to
time with the Federal Reserve Bank of its district (see map inclosed) each individual application received by it.
4. Checks accompanying the applications
should be drawn to the order of "Federal Reserve Bank of (here insert name of city where
bank is located), Liberty Loan Account."
All checks must be certified. Bank drafts,
post-office money orders, or express-company




LIBERTY LOAN.
APPLICATION FOB BONDS.

This application should be transmitted
through the subscriber's bank, trust company,
or other agency acting on his behalf, or it may
be filed direct with the Federal Reserve Bank
of his district or the Treasury Department at
Washington.
Dated
.
To t h e SECRETARY OF T H E T R E A S U R Y :

According to t h e terms of Treasury D e p a r t m e n t Circular
No. 78, dated May 14, 1917, t h e undersigned h e r e b y a p p l y
for %—•
p a r value of t h e 15-30 year 3J per cent gold
bonds of t h e United States, a n d agree to p a y p a r a n d
accrued interest for a n y bonds allotted on this application.
The sum of %
is inclosed, being 2 per cent on t h e
amount of bonds applied for (or p a y m e n t i n full for t h e
one §50 or t h e one $100 bond applied for).
Signature of subscriber, in full,
.
Address—Number a n d street,
.
City or town,
.
County,
. State,
.
N O T E . — I t is desirable t h a t t h e following information
be furnished b y t h e applicant:
1. If full p a y m e n t is to b e made before final installment
date indicated in t h e circular, w h a t will b e t h e date of
such full p a y m e n t ?
.
2. If i t is expected t h a t future p a y m e n t s will b e made
b y check, upon what bank or trust company will such
checks probably b e drawn?
Name of bank or trust company:
—.
Address:
.
3. What, if a n y , particular denominations of interim
certificates are desired?
.
4. Through what, if a n y , b a n k or other agency is this
application transmitted?
.

By way of illustrating the work that has
been done by Federal Reserve Banks in pursuance of their efforts to further the flotation
of the loan, there is appended hereto the circular letter on the subject sent out by the
Federal Reserve Bank of Chicago. This is

1, 1017.

presented merely as an illustration of the
material that has been distributed, other
Federal Reserve Banks having undertaken the
circulation of matter of the same description:
FEDERAL, RESERVE BANK,
OF CHICAGO,

79 West Monroe Street
To the Banks and Bankers in the Seventh
Federal Reserve District:
The Government of the United States must
rely upon you to place successfully the Liberty
Loan. Ordinary investors will take care of the
first billion. The second billion must come
from the wage earner, the farmer, and the
merchant.
We have already forwarded to you the
official prospectus and a number of official
subscription blanks. More of these can be
obtained at once by wiring or writing to the
Publicity Loan Committee, La Salle and Monroe Streets, Chicago. We will forward to you
shortly a sample of a very attractive poster.
Additional copies of this poster can be obtained
from the same place. Put these in your office,
in prominent places in your city, in factories,
hotels, and stores.
We offer the following suggestions:
If you have not already done so, call a meeting of your banks at once and organize by
counties, for the purpose of promoting the
Liberty Loan. Telegraph to the " Liberty
Loan Distribution Committee/' care of this
bank, just as soon as your local committee is
organized; tell them what you have done and
what you want. They are prepared to furnish sample circulars and other selling data,
organizers, and speakers, and will suggest
methods to committees already organized.
Second. Go to your local press and solicit
their cooperation and support. Get them to
put stirring, spicy appeals in their editorial columns, and, if possible, in their advertising
columns.
Every movie theater in Chicago is displaying
patriotic signs urging subscription to the Liberty Loan, and spicy speeches are being delivered in these places.
Go to your ministers. Ask them to appeal
to their parishioners from the pulpit to support
the Government in this emergency by subscribing to the bonds.
Call in all employers of labor. Ask them to
organize Liberty Loan clubs amongst their employees. Many large employers in Chicago
have already done this, subscribing direct for
a round amount of bonds and allowing their




437

EEDEKAL RESERVE BULLETIN.

employees to pay for them on the installment
plan. Arrange yourselves to carry small subscribers on the installment plan, carrying the
bonds as collateral until they complete their
payments. Ask each employer to stamp in red
on his pay envelope: u D o YOUR PATRIOTIC
DUTY.
BOND."

SUBSCRIBE FOR A

LIBERTY

LOAN

By all means make a personal appeal to the
farmer. His cattle, hogs, corn, and wheat have
been bringing fabulous prices. He has profited
because of the war. Appeal to him to support
his Government by contributing a small part
of his profits to aid the Government in winning
this struggle.
It is suggested that each bank inclose with
its June 1st statement envelopes a slip urging
each depositor to buy Liberty Loan Bonds,
this recommendation to be signed by the
president of the bank.
The Government has entered the most gigantic struggle in the world's history. Its motives
are unselfish. It is fighting for liberty and for
the preservation of human rights. Put your
shoulder to the wheel and help.
All banks and bankers are authorized to
receive subscriptions. Let each appeal include
the following: "Go TO YOUR BANK AND
SUBSCRIBE."
CHICAGO, May 19,

1917.

Personnel of Liberty Loan Committees.
The following Liberty Loan committees have
been established in the several Federal Reserve districts:
DISTRICT NO. 1—BOSTON.

Alfred L. Aiken, chairman; N. Penrose Hallbwell, vice
chairman; Jacob A. Barbey, Frederic H. Curtiss, Jere A.
Downs, John R. Macomber, Henry Parkman, Frank W.
Remick, Philip Stockton, Daniel G. Wing.
DISTRICT NO. 2—NEW YORK.

Benjamin Strong, chairman: Arthur M. Anderson, executive manager; James S. Alexander, George C. Baker,
Allen B. Forbes, Gates W. McGarrah, Seward Prosser,
Charles H. Sabin, Jacob II. Schiff, Frank A. Yanderlip,
Albert II. Wiggin, William Woodward.
Committee on distribution.—Allen B. Forbes, chairman;
Franklin Q. Brown, James Brown, Clarence Dillon,
Plinky Fisk, N. D. Jay, G. H. Kinnicutt, 0. E. Mitchell,
C. S. Sargent, A. J. Sheldon, Frederick H. Strauss, F. M.
Weld.
Committee on budget.—Benjamin Strong, George L.
Baker, Gates W. McGarrah.

438

FEDERAL RESERVE BULLETIN.

Committee on bond department.—William Woodward,
chairman.
Committee on publicity.—F. A. Vanderlip, chairman.
DISTRICT NO. 3—PHILADELPHIA.

L. L. Rue, E. F. Shanbacker, W. D. Grange, John H.
Mason, William P. Gest, George H. Frazier, E. B. Morris,
F. T. Chandler, Edward B. Smith, Richard Y. Cook,
E. T. Stotesbury, E. W. Clark. Governor of Federal
Reserve Bank and Federal Reserve Agent are ex officio
members of the committee.

JUNE 1, 1017.

DISTRICT NO. 9—MINNEAPOLIS.

John H. Rich, chairman; Curtis L. Mosher, Theodore
Wold, Arthur R. Rogers.
In Montana, North and South Dakota, Wisconsin, and
northern Michigan the directors of the Federal Reserve
Bank have been designated as State chairman.
In Minnesota the State Bankers' Association will constitute the campaign committee, employing its group
organizations in various parts of the State.
The clearing houses of Minneapolis, St. Paul, and
Duluth have taken charge of their respective cities.

DISTRICT NO. 4—CLEVELAND.

DISTRICT NO. 10—KANSAS CITY.

D. C. Wills, chairman, Cleveland, Ohio; E. R. Fancher,
Cleveland, Ohio; Geo. D. Bates, Akron, Ohio; Robert C.
Dalzell, Wheeling, W. Va.; M. E. Dennison, Youngstown,
Ohio; Clarence Kiefer, Dayton, Ohio; H. C. McEldowney,
Pittsburgh, Pa.; Chas. Messenkopf, Erie, Pa.; C. A. Paine,
Cleveland, Ohio; Henry W. Harter, Canton, Ohio; J. J.
Rowe, Cincinnati, Ohio; P. L. Schneider, Columbus,
Ohio; H. I. Shepherd, Toledo, Ohio; J. W. Stoll, Lexington, Ky.; Geo. W. Winger, Springfield, Ohio.
Executive committee—E. R. Fancher, chairman; D. C.
Wills, C. A. Paine, H. C. McEldowney; L. B. William,
executive manager; F. F. Wilkinson, executive secretary.

J. Z. Miller, jr., governor of Federal Reserve Bank,
chairman; G. S. Hovey, E. F. Swinney, J. W. Perry, J. F.
Downing, George T. Tremble, Thornton Cooke, G. M.
Smith, H. L. Jarboe, jr., C. W. Watson, P. E. Goebel.
DISTRICT NO. 11—DALLAS.

K. M. Van Zandt, Fort Worth, Tex.; Alex. Sanger, Dallas,
Tex.; J. A. Kemp, Wichita Falls, Tex.; Wm. J. Bayersdoriler, Shreveport, La.; S. H. H. Shear, Waco, Tex.;
J. W. Butler, Clifton, Tex.; Edward Rotan, Waco, Tex.;
Jake Easton, Antlers, Okla.; Charles 0. Austin (State
banking commission), Austin, Tex.; Jesse H. Jones, Houston, Tex.; Geo. T. Jester, Corsicana, Tex.; Dr. E. P.
DISTRICT NO. 5—RICHMOND.
Wilmot, Austin, Tex.; F. F. Downs, Temple, Tex.; John
Sealy, Galveston, Tex.; Royal A. Ferris, Dallas, Tex.,
Executives.—Richard H. Smith, chairman; H. W. Jack- Louis Lipsitz, Dallas, Tex.; W. R. Brentz, Sherman, Tex.;
son, vice chairman; E. P. McConnell, secretary; W. T. Henry James, Abilene, Tex.; W. H. Patrick, Clarendon,
Dabney, executive manager; E. L. Bemiss, John Kerr Tex.; E. 0. Tenison, Dallas, Tex.; Gus F. Taylor, Tyler,
Branch, W. M. Addison.
Tex.; D. C. Giddings, Brenham, Tex.
Other members.—W. M. Habliston, Fred W. Scott, Julian
DISTRICT NO. 12—SAN FRANCISCO.
H. Hill, Oliver J. Sands, L. Z. Morris, John T. Wilson,
H. N. Phillips, Charles Hutzler, Oscar E. Parrish, A. L.
Archibald Kains, chairman; G. K. Weeks, executive
Adamson, H. R. Pollard, jr., G. W. Call, J. L. Davis,
L. M. Williams, F. E. Nolting, Coleman Wortham, Henry manager; Henry T. Scott, I. W. Hellmari, sr., Herbert
Fleishhacker, Frank B. Anderson, W. H. Crocker, Rudolph
L. Cabell, Henry S. Hutzler.
Spreckles, A. P. Gianinni, John S. Drum, George Tourny,
R. M. Tobin, John A. Britton.
DISTRICT NO. 6—-ATLANTA.
Federal Reserve Bank officers and Mell R. Wilkinson,
Fred J. Paxon, W. C. Wardlaw, Ivan E. Allen, J. Epps Cooperation of American Bankers Association.
Brown.
DISTRICT NO. 7—CHICAGO.

James B. McDougal, governor Federal Reserve Bank,
chairman; W. A. Heath, Federal Reserve Agent; vice
chairman; E. K. Boisot, Arthur Reynolds, John E. Blunt,
jr., Howard W. Fenton, Charles H. Schweppe, H. L.
Stuart.
DISTRICT NO. 8—ST. LOUIS.

Rolla Wells, chairman; W. W. Hoxton, secretary; and
23 members of clearing houses.




Replying to a resolution adopted by the
American Bankers Association offering its services in connection with the Liberty Loan, Secretary McAdoo on May 9 sent the following
telegram to Peter W. Goebel, president of the
association:
Please assure American Bankers Association of my deep appreciation of the patriotic
resolution just adopted and communicated to

JUNK 1,

1917.

FEDERAL RESERVE BULLETIN.

me by wire pledging the unqualified and untiring support of the American Bankers Association in any direction where the Government
may find such support of value in the great
affairs which are engaging the attention of the
Nation. I shall avail myself of this support
because I know it can be tremendously valuable in the large financial operations in which
the Government must engage until this war
for liberty has been successfully won. May I
at the same time take advantage of this occasion to urge upon the American Bankers Association the superlative importance of still
further strengthening the organization of the
banking system of the United States by using
its great influence to induce the State banks
to join the national banks in making the Federal Reserve system an instrument of unquestionable power to meet any emergency
with which the Nation may in the future be
faced. I regard this as one of the supremely
patriotic duties of the hour. The time may
come when the financial resources of the country will not be commensurate with the national
purpose if the Nation remains half State bank
and half national bank in its organization.
The State banks will find greater security for
themselves if disaster should threaten if they
are members of the Federal Reserve system,
and the Federal Reserve system itself will be
irresistibly strong if the State banks unite
with the national banks in making it a supremely useful national instrument. I commend this question to your earnest and patriotic consideration, with the sincere hope that
love of our common country may surmount
every other consideration and bring about this
extremely desirable result.

Frank on Correspondence Relating to Bonds.

The following letter, received from the Post
Office Department by the Federal Reserve
Board, states the position of the department
with reference to the use of franked envelopes
in correspondence relating to Government
loans:
Receipt is acknowledged of your letter of
to-day, suggesting that postmasters of the
cities in which Federal Reserve Banks are
located be authorized to accept from such
banks free of postage under the penalty privilege matter mailed by them in connection with
the flotation of the Liberty Loan of 1917.




439

In reply I have to say, as pointed out in
previous correspondence, that Federal Reserve
Banks are not entitled under the law to use
penalty envelopes to send matter in the mails
free of postage, and, therefore, this department
is without authority to instruct postmasters to
accept for mailing free of postage under penalty
envelopes matter mailed by such banks.
MAY 8, 1917.
Cost of Telegrams Relating to Bond Issue.
The Federal Reserve Board has transmitted
to Federal Reserve Banks messages sent to
telegraph companies by the Treasury Department relative to charges on messages relating
to loan operations as follows:
Secretary of Treasury requests you notify
your managers in all Federal Reserve Bank
cities—New York, Philadelphia, Richmond,
Cleveland, Atlanta, Dallas, St. Louis, Kansas
City, Chicago, Minneapolis, and San Francisco—that great many telegrams relating to the
forthcoming bond issue will be filed by abovenamed banks and that such telegrams should
be transmitted at Government rates and bills
sent to Treasury Department. Banks will be
notified to indorse all such messages " Official
business—Government rate," charge Treasury
Department. Please notify your agents as
soon as possible.
Please instruct your representatives in
Federal Reserve Bank cities that Treasury
Department request of 3rd instant as to
charging to this department telegrams relating
to the bond issue filed by Federal Reserve
Banks is intended to include collect messages
from other banks to Federal Reserve Banks or
Federal Reserve Agents. Please acknowledge.
State Banks Admitted.
The following. State institutions were admitted to membership in the Federal Reserve
System during the month of May: Mississippi
Valley Trust Co., St. Louis, Mo.; Hettinger
State Bank, Hettinger, N. Dak.; Commerce
Trust Co., Kansas City, Mo.; and the Winchester Trust Co., Winchester, Mass.; the number of State institutions which have now joined
the system being 48.

440

FEDERAL RESERVE BULLETIN.

Plan for Issue of Federal Reserve Drafts.
The following letter was sent to Federal Reserve Banks under date of May 12, 1917:
Referring to my letter of April 25, inclosing
uniform plan for the issue of Federal Reserve
exchange drafts, to become operative on May
21, you are advised that, in view of the vast
amount of detail work imposed upon Federal
Reserve Banks in connection with the flotation
of the Liberty Loan, the Board has decided
that it would be advisable to postpone the date
on which this plan is to become effective to
June 1, 1917.

UNI: 1. 191.7.

against the enforcement of any order forbidding
or discouraging the use of their machines for
counting gold coin, but when the matter is explained to them they ought to see the importance of protecting the country's gold supply and discouraging the wasteful use of gold
for pay rolls, especially when it is remembered
that the recipient of gold coin would in most
cases much prefer paper money. Of course,
it is unnecessary to say that coin counting
machines are very valuable in counting silver
money, and their use in this .way is in no way
objected to, silver coinage being accepted by
tale and not by weight.
It is suggested that the banks of your district
be invited to point out to corporations or firms
of their district using these coin counting machines that they should forego the slightest
advantage or greater convenience derived from
the use of gold in making up their pay rolls, in
view of the loss such use causes to the country
by the abrasion involved and by the keeping in
circulation of gold which if held by the Federal
Reserve Banks would add to the greater credit
power of the country.

Branch in Baltimore*
The Federal Reserve Board has had under
consideration the approval of a plan submitted
by the Federal Reserve Bank of Richmond to
establish a branch in Baltimore. It has informally reached agreement that it will take
favorable action upon the proposal, but has
deferred formal decision until such time as it
is advised of the action of Congress with reference to the amendments to the Federal Reserve
Fiduciary Powers.
Act now pending before that body, inasmuch as
The applications of the following banks for
these amendments have a direct bearing upon permission to act under section ll(k) of the
the case of other cities, the establishment of Federal Reserve Act have been approved since
branches in which is under consideration.
the issue of the May Bulletin:
Use of Coin Counting Machines.
Learning that considerable sums in gold are
regularly withdrawn from banks in various
places for pay-roll purposes, the Federal Reserve
Board on May 15 sent the following letter to ail
Federal Reserve Agents.
The use of gold coin in machines for counting
money has proved that there is quite a serious
abrasion of the coin. This draws attention to
the fact that in our own county, as well as in
Europe, the use of gold coin as currency in
the hands of the people is disappearing. The
public does not want to carry gold coin, and
its use leads to rapid abrasion and consequent
loss of value. In the United States it may be
truly said that as a practical matter coined
gold is only used as security behind gold certificates, or for foreign exchange purposes
where nothing else can be used in adjusting
international balances.
The manufacturers of coin counting machines
will undoubtedly make a strenuous protest




DISTRICT NO. 1.

Trustee, executor, and administrator:
Capital National Bank, Windsor, Vt.
DISTRICT NO. 4.

Trustee and registrar of stocks and bonds:
First-Second National Bank, Akron, Ohio.
First National Bank, Cleveland, Ohio.
DISTRICT No. 7.

Trustee, executor, administrator, and registrar of stocks
and bonds:
Citizens National Bank, Crawfordsville, Ind.
First National Bank, Dubuque, Iowa.
Emmetsburg National Bank, Emmetsburg, Iowa.
DISTRICT No.

8.

Trustee, executor, administrator, and registrar of stocks
and bonds:
First National Bank, Fordyce, Ark.
National Bank of Commerce in St. Louis, St. Louis, Mo.
DISTRICT NO. 12.

Registrar of stocks and bonds:
Boise City National Bank, Boise, Idaho.

JUNK 1.

Failures by Federal Reserve Districts.
The reduction in ike country's mortality,
which has been a conspicuous feature for many
months, continues, 371 commercial failures
being reported to II. G. Dun & Co. for three
weeks of May, as against 1,015 in the same
period of 1916. With only .1,069 defaults, the
record for April, the latest month for which
complete returns are available, is the best in
point of number of any month back to June,
1912, and the liabilities, $12,587,213, are the
smallest since last October and compare with
$18,382,637 in April, 1916. As contrasted
with the high point for the period—April,
1915—the numerical decrease is 48 per cent
and the contraction in amount over 70 per
cent. Excepting the first and twelfth districts, where there were increases of 5 and 4
insolvencies, respectively, and the fourth district, where no change occurred, failures during April were less numerous than last year
in every Federal Reserve district and the improvement was marked in nearly all instances.
An equally good showing appears in respect
to the liabilities, which were smaller in all
districts, aside from fourth and twelfth, the
expansion in the latter alone being of any size,
The figures for two years are compared below:
Failures during April.
Districts.

Seventh

. . . .

Viijhth

Ninth
Tenth
E leventli
Twelfth
Total

Liabilities.

Nnrr .ber.
1917

First.
Second
Third...
Fourth
Fifth ....
Sixth

122
201
47
90
57
74
359
54
24
41
4\
136

1,039

1916

1917

;

191(5

117 £I,(H3,235
4,005,0; 8
243
3',240,883
97
1,180.192
90
85
014,200
163
850,910
3 73
208,438
64
56
207,200
79
260.208
228,577
80
352
1,279,300

.1,805.3") 7
4,3.12,886
1,8*3,363
1,345,629
811,502
1,590,744
3,477,(>o8
548,185
408,975
645,268
1,023,010
805,000

12,587,213

18,382,637

1,399

Amendments to the Federal Reserve Act.
The bill carrying amendments to the Federal
Reserve Act, which has been for some time
past before Congress, was adopted by the
House of Representatives on May 5 and by the
Senate on May 9. During the week ending
May 25 the measure was under consideration




441

FEDERAL RESERVE BULLETIN.

1917

in conference committee, and it had been expected that a definite conclusion would be
arrived at for the purpose of reconciling the
differences between the Senate and House
drafts of the bill. Unexpected delays having
occurred, the bill is herewith reprintod in its
latest form, with the measure as passed by
the House and then stricken, out by the Senate
first presented, followed by the Senate draft.
[65th Congress, 1st session. 11. R. 3673. In the House of Representatives. May 10, 1917. Ordered to be printed with the amendment of
the Senate.]

AN ACT To amend the act approved December twentythird, nineteen hundred and thirteen, known as the
Federal reserve act, as amended by the acts of August
fourth, nineteen hundred and fourteen, August fifteenth,
nineteen hundred and fourteen, March third, nineteen
hundred and fifteen, and September seventh, nineteen
hundred and sixteen.
HOUSE BILL.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That

section four of the act approved December twenty-third,
nineteen hundred and thirteen, known as the Federal
reserve act, be amended in the paragraph relating to the
appointment of class C directors and prescribing their
duties so as to read as follows:
"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
one of whom shall be designated by said board as chairman
of the board of directors of the Federal reserve bank and as
'Federal reserve agent.' He shall be a person of tested
banking experience, and in addition to his duties as chairman of the board of directors of the Federal reserve bank,
he shall be required to maintain, under regulations to be
established by the Federal Reserve Board, a local office of
said board on the premises of the Federal reserve bank
He shall make regular reports to the Federal Reserve
Board and shall act as its official representative for the performance of the functions conferred upon it by this act,
He shall receive an annual compensation to be fixed by the
Federal Reserve Board and paid monthly by the Federal
reserve bank to which he is designated. One of the directors of class 0, who shall be a person of tested banking experience, shall be appointed by the Federal Reserve Board
as deputy chairman to exercise the powers of the chairman
of the board when necessary.
"Subject to the approval of the Federal Reserve Board,
the Federal reserve agent shall appoint one or more assistants. Such assistants, who shall be persons of tested banking experience, shall assist the Federal reserve agent in the
performance of his duties and shall also have power to act
in his name and stead during his absence or disability.

442

FEDERAL BE&ERVE BULLETIN.

1, 1917.

The Federal Reserve Board shall require such bonds of the surplus: Provided, however, That the aggregate of acceptassistant Federal reserve agents as they may deem neces- ances growing out of domestic transactions shall in no
sary for their own protection. Assistants to the Federal event exceed fifty per centum of such capital stock and
reserve agent shall receive an annual compensation, to be surplus."
fixed and paid in the same manner as that of the Federal
SEC. 4. That section seventeen be, and is hereby,
reserve agent."
amended so as to read as follows:
SEC. 2. That the first paragraph of section thirteen be
"SEC. 17. So much of the provisions of section fifty-one
further amended so as to read as follows:
hundred and fifty-nine of the Revised Statutes of the
"Any Federal reserve bank may receive from any of United States and section four of the act of June twentieth,
its member banks, and from the United States, deposits eighteen hundred and seventy-four, and section eight of
of current funds in lawful money, national bank notes, the act of July twelfth, eighteen hundred and eighty-two,
Federal reserve notes, or checks and drafts, payable upon and of any other provisions of existing statutes as require
presentation, and also for collection, maturing notes and that before any national banking association shall be aubills; or, solely for purposes of exchange or of collection, thorized to commence banking business it shall transfer
may receive from other Federal reserve banks deposits of and deliver to the Treasurer of the "United States a stated
current funds in lawful money, national bank notes, or amount of United States registered bonds, and so much of
checks upon other Federal reserve banks, and checks and those provisions or of any other provisions of existing
drafts, payable upon presentation within its district, and statutes as require any national banking association now
maturing notes and bills payable within its district; or, or hereafter organized to maintain a minimum deposit of
solely for the purposes of exchange or of collection, may such bonds with the Treasurer is hereby repealed."
receive from any nonmember bank or trust company deSEC. 5. That section nineteen be further amended and
posits of current funds in lawful money, national bank reenacted so as to read as follows:
note3, Federal reserve notes, checks and drafts payable
"SEC. 19. Demand deposits within the meaning of this
upon presentation, or maturing notes and bills: Provided, I act shall comprise all deposits payable within thirty days,
That such nonmember bank or trust company maintains ! and time deposits shall comprise all deposits payable after
with the Federal reserve bank of its district a balance in thirty days, all savings accounts and certificates of deposit
an amount to be determined by the Federal Reserve Board which are subject to not less than thirty days' notice before
under such rules and regulations as it may prescribe."
payment, and all postal savings deposits.
SEC. 3. That the fifth paragraph of section thirteen be,
"Every bank, banking association, or trust company
and is hereby, amended further so as to read as follows: which is or which becomes a member of any Federal reserve
'' Any member bank may accept drafts or bills of exchange bank shall establish and maintain reserve balances with its
drawn upon it having not more than six months sight to Federal reserve bank as follows:
run, exclusive of days of grace, which grow out of trans" (a) If not in a reserve or central reserve city, as now
actions involving the importation or exportation of goods; or hereafter defined, it shall hold and maintain with the
or which grow out of transactions involving the domestic Federal reserve bank of its district an actual net balance
shipment of goods provided shipping documents con- equal to not less than seven per centum of the aggregate
veying or securing title are attached at the time of accept- amount of its demand deposits and three per centum of its
ance; or which are secured at the time of acceptance by time deposits.
a warehouse receipt or other such document conveying
" (b) If in a reserve city, as now or hereafter defined,
or securing title covering readily marketable staples. No it shall hold and maintain with the Federal reserve bank
member bank shall accept, whether in a foreign or domes- of its district an actual net balance equal to not less
tic transaction, for any one person, company, firm, or than ten per centum of the aggregate amount of its demand
corporation to an amount equal at any time in the aggre- deposits and three per centum of its time deposits.
gate to more than ten per centum of its paid-up and un"(c) If in a central reserve city, as now or hereafter deimpaired capital stock and surplus, unless the bank is fined, it shall hold and maintain with the Federal reserve
secured either by attached documents or by some other bank of its district an actual net balance equal to not less
actual security growing out of the same transaction as the than thirteen per centum of the aggregate amount of its
acceptance; and no bank shall accept such bills to an demand deposits and three per centum of its time deposits.
amount equal at any time in the aggregate to more than
No member bank shall keep on deposit with any nonone-half of its paid up and unimpaired capital stock and j member bank a sum in excess of ten per centum of its own
surplus: Provided, however, That the Federal Reserve • paid up capital and surplus. No member bank shall act
Board, under such general regulations as it may prescribe, as the medium or agent of a nonmember bank in applying
which shall apply to all banks alike regardless of the for or receiving discounts from a Federal reserve bank
amount of capital. stock and surplus, may authorize any under the provisions of this act, except by permission of
member bank to accept such bills to an amount not ex- the Federal Reserve Board.
ceeding at any time in the aggregate one hundred per
"The required balance carried by a member bank with
centum of its paid-up and unimpaired capital stock and a Federal reserve bank may, under the regulations and




JUNE 1,

1917.

FEDERAL RESERVE BULLETIN.

443

subject to such penalties as may be prescribed by the within the Federal reserve district in which it is located or
Federal Reserve Board, be checked against and withdrawn within the district of any Federal reserve bank which may
by such member bank for the purpose of meeting existing have been suspended. Such branches, subject to such
liabilities: Provided, however, That no bank shall at any rules and regulations as the Federal Reserve Board may
time make new loans or shall pay any dividends unless prescribe, shall be operated under the supervision of a
and until the total balance required by law is fully re- board of directors to consist of not more than seven nor less
than three directors, of whom a majority of one shall be apstored.
" I n estimating the balances required by this act, the net pointed by the Federal reserve bank of the district, and
difference of amounts due to and from other banks shall the remaining directors by the Federal Reserve Board.
be taken as the basis for ascertaining the deposits against Directors of branch banks shall hold office during the
which required balances with Federal reserve banks shall pleasure of the Federal Reserve Board."
be determined.
SEC. 8. That section fourteen, subsection (c), of the
"National banks, or banks organized under local laws, act be amended and reenacted so as to read as follows:
(e) "To establish accounts with other Federal reserve
located in Alaska or in a dependency or insular possession
or any part of the United States outside the continental banksfor exchange purposes and, with the consent or upon
United States may remain nonmember banks, and shall in the order and direction of the Federal Reserve Board and
that event maintain reserves and comply with all the con- under regulations to be prescribed by said board, to open
ditions now provided by law regulating them; or said and maintain accounts in foreign conutries, appoint corbanks may, with the consent of the Reserve Board, be- respondents, and establish agencies in such countries
come member banks of any one of the reserve districts, wheresoever it may be deemed best for the purpose of
and shall in that event take stock, maintain reserves, and purchasing, selling, and collecting bills of exchange, and
to buy, and sell, with or without its indorsement, through
be subject to all the other provisions of this Act."
SEC. 6. That that part of section twenty-two which such correspondents or agencies, bills of exchange (or acreads as follows: " Other than the usual salary or director's ceptancies) arising out of actual commercial transactions
fees paid to any officer, director, or employee of a member which have not more than ninety days to run, exclusive
bank and other than a reasonable fee paid by said bank to of days of grace, and which bear the signature of two or
such officer, director, or employee for services rendered to more responsible parties, and, with the consent of the
such bank no officer, director, employee, or attorney of a Federal Reserve Board, to open and maintain banking
member bank shall be a beneficiary of or receive, directly accounts for such foreign correspondents or agencies.
or indirectly, any fee, commission, gift, or business of the Whenever any such account has been opened or agency or
bank," be, and hereby is, amended and reenacted so as to correspondent has been appointed by a Federal reserve
bank, with the consent of or under the order and direction
read as follows:
"Other than the usual salary or fee paid to any officer, of the Federal Reserve Board, any other Federal reserve
director, employee, or attorney of a member bank, and bank may, with the consent and approval of the Federal
other than a reasonable fee paid by said bank to such Reserve Board, be permitted to carry on or conduct,
officer, director, employee, or attorney for services ren- through the Federal reserve bank opening such account
dered to such bank, no officer, director, employee, or or appointing such agency or correspondent, any transacattorney of a member bank shall be a beneficiary of or tion authorized by this section under rules and regulations
receive, directly or indirectly, any fee, commission, gift, to be prescribed by the board."
or other consideration for or in connection with any
SEC. 9. That section nine of the Federal reserve act be
transaction or business of the bank: Provided, however, amended to read as follows:
That nothing in this act contained shall be construed to
"SEC. 9. Any bank incorporated by special law of any
prohibit a director, officer, or employee from receiving State, or organized under the general laws of any State or
the same rate of interest paid to other depositors for similar of the United States, desiring to become a member of the
deposits made with such bank: And'providedfurther, That Federal Reserve System, may make application to the
notes, drafts, bills of exchange, or other evidences of debt Federal Reserve Board for the right to subscribe to the
executed or indorsed by directors of a member bank may stock of the Federal reserve bank organized within the
be discounted with such member bank on the same terms district in which the applying bank is located. Such apand conditions as other notes, drafts, bills of exchange, or plication shall be for the same amount of stock that the
evidences of debt upon the affirmative vote or written applying bank would be required to subscribe to as a
assent of a majority of the board of directors of such member national bank. The Federal Reserve Board, in accordbank."
ance with such rules and regulations, and subject to such
SEC. 7. That section three of the act be amended and conditions as it may prescribe, may permit the applying
bank to become a stockholder of such Federal reserve bank.
reenacted so as to read as follows:
"In acting upon such applications the Federal Reserve
"SEC. 3. The Federal Reserve Board may permit or require any Federal reserve bank to establish branch banks Board shall consider the financial condition of the apply100256-17 —4




444

FEDERAL RESERVE BULLETIN.

JUNE 1,

1917.

ing bank, the general character of its management, and
"Any State bank or trust company desiring to withdraw
whether or not the corporate powers exercised are con- from membership in a Federal reserve bank may do so,
sistent with the purposes of this act.
after six months' written notice shall have been filed with
"Whenever the Federal Reserve Board shall permit the the Federal Reserve Board, upon the surrender and canapplying bank to become a stockholder in the Federal cellation of all of its holdings of capital stock in the Fedreserve bank of the district its stock subscription shall be eral reserve bank: Provided, however, That no Federal
payable on call of the Federal Reserve Board, and stock reserve bank shall, except under express authority of the
issued to it shall be held subject to the provisions of this Federal Reserve Board, cancel within the same calendar
act.
year more than ten per centum of its capital stock for the
"All banks admitted to membership under authority purpose of effecting voluntary withdrawals during that
of this section shall be required to comply with the reserve year. All such applications shall be dealt with in the
and capital requirements of this act and to conform to order in which they are filed with the board. Whenever
those provisions of law imposed on national banks which a member bank shall surrender its stock holdings in a
prohibit such banks from lending on or purchasing their Federal reserve bank, or shall be ordered to do so by the
own stock, which relate to the withdrawal or impairment Federal Reserve Board, under authority of law, all of its
of their capital stock, and which relate to the payment of rights and privileges as a member bank shall thereupon
unearned dividends. Such banks and the officers, agents, cease and determine, and after due provision has been
and employees thereof shall also be subject to the provi- made for any indebtedness due or to become due to the
sions of and to the penalties prescribed by section fifty- Federal reserve bank it shall be entitled to a refund of its
two hundred and nine of the Revised Statutes, and shall cash paid subscription with interest at the rate of onebe required to make reports of condition and of the pay- half of one per centum per month from date of last diviment of dividends to the Federal reserve bank of which dend, if earned, the amount refunded in no event to exthey become a member. Not less than three of such ceed the book value of the stock at that time, and shall
reports shall be made annually on call of the Federal likewise be entitled to repayment of deposits and of any
reserve bank on dates to be fixed by the Federal Reserve other balance due from the Federal reserve bank.
Board. Failure to make such reports within ten days
"No applying bank shall be admitted to membership
after the date they are called for shall subject the ofiend- in a Federal reserve bank unless it possesses a paid up
ing bank to a penalty of $100 a day for each day that it unimpaired capital sufficient to entitle it to become a
fails to transmit such report; such penalty to be collected national banking association in the place where it is situby the Federal reserve bank by suit or otherwise.
ated under the provisions of the national bank Act.
"As a condition of membership such banks shall like"Banks becoming members of the Federal reserve syswise be subject to examinations made by direction of the tem under authority of this section shall be subject to the
Federal Reserve Board or of the Federal reserve bank by provisions of this section and to those of this act which
examiners selected or approved by the Federal Reserve relate specifically to member banks, but shall not be subBoard.
ject to examination under the provisions of the first two
"Whenever the directors of the Federal reserve bank paragraphs of section fifty-two hundred and forty of the
shall approve the examinations made by the State au- Revised Statutes as amended by section twenty-one of
thorities, such examinations and the reports thereof may this act. Subject to the provisions of this act and to the
be accepted in lieu of examinations made by examiners regulations of the board made pursuant thereto, any bank
selected or approved by the Federal Reserve Board: Pro- becoming a member of the Federal Reserve System shall
vided, however, That when it deems it necessary the board retain its full charter and statutory rights as a State bank or
may order special examinations by examiners of its own trust company, and may continue to exercise all corporate
selection and shall in all cases approve the form of the powers granted it by the State in which it was created, and
report. The expenses of all examinations, other than those shall be entitled to all privileges of member bants: Promade by State authorities, shall be assessed against and vided, however, That no Federal reserve bank shall be perpaid by the banks examined in the same manner and at mitted to discount for any State bank or trust company
the same rate that national banks are assessed for such notes, drafts, or bills of exchange of any one borrower who
expenses.
is liable for borrowed money to such State bank or trust
"If at any time it shall appear to the Federal Reserve company in an amount greater than ten per centum of the
Board that a member bank has failed to comply with the capital and surplus of such State bank or trust company,
provisions of this section or the regulations of the Federal but the discount of bills of exchange drawn against actually
Reserve Board made pursuant thereto, it shall be within existing value shall not be considered as borrowed money
the power of the board after hearing to require such bank within the meaning of this section. The Federal reserve
to surrender its stock in the Federal reserve bank and to bank, as a condition of the discount of notes, drafts, and
forfeit all rights and privileges of membership. The Fed- bills of exchange for such State bank or trust company
eral Reserve Board may restore membership upon due shall require a certificate or guarantee to the effect that tho
proof of compliance with the conditions imposed fey tki* borrower is not liable to such bank in excess of the amount
section.
provided by this section, and will a@t bo powittod to




JUXB 1,

FEDERAL RESERVE BULLETIN.

1917.

become liable in excess of this amount while such notes,
drafts, or bills of exchange are under discount with the
Federal reserve bank.
" I t shall be unlawful for any officer, clerk, or agent of
any bank admitted to membership under authority of this
section to certify any check drawn upon such bank unless
the person or company drawing the check has on deposit
therewith at the time such check is certified an amount of
money equal to the amount specified in such check. Any
check so certified by duly authorized officers shall be a
good and valid obligation against such bank, but the act
of any such officer, clerk, or agent in violation of this section may subject such bank to a forfeiture of its membership in the Federal Reserve System upon hearing by the
Federal Reserve Board."
SENATE BILL.
That section four of the act approved December twentythird, nineteen hundred and thirteen, known as the Federal reserve act, be amended by striking out the sentence
reading as follows: "One of the directors of class C, who
shall be a person of tested banking experience, shall be
appointed by the Federal Reserve Board as deputy chairman and deputy Federal reserve agent, to exercise the
powers of the chairman of the board and Federal reserve
agent in case of absence or disability of his principal," and
by adding in place thereof the following:
"Subject to the approval of the Federal Reserve Board,
the Federal reserve agent shall appoint one or more assistants. Such assistants, who shall be persons of tested banking experience, shall assist the Federal reserve agent in
the performance of his duties and shall also have power to
act in his name and stead during his absence or disability.
The Federal reserve agent may require such bonds of his
assistants as he may deem necessary for his own protection. Assistants to the Federal reserve agent shall, receive
an annual compensation to be fixed and paid in the same
manner as that of the Federal reserve agent. One of the
directors of class 0 shall be appointed by the Federal Reserve Board as vice chairman to exercise the powers of
the chairman of the board in case of the absence or disability of the Federal reserve agent; in case of the absence
of the chairman and vice chairman, the third class G
director shall preside at meetings of the board."
SEC. 2. That section nine of the Federal reserve act be
amended to read as follows:
"SEC. 9. Any bank incorporated by special law of any
State, or organized under the general laws of any State or
of the United States, desiring to become a member of the
Federal Reserve System, may make application to the
Federal Reserve Board under such rules and regulations
as it may prescribe for the right to subscribe to the stock
of the Federal reserve bank organized within the district
in which the applying bank is located. Such application
shall be for the same amount of stock that the applying
bank would be required to subscribe to as a national bank.
The Federal Reserve Board, subject to such conditions as




445

it may prescribe, may permit the applying bank to become
a stockholder of such Federal reserve bank.
" In acting upon such applications the Federal Reserve
Board shall consider the financial condition of the applying bank, the general character of its management, and
whether or not the corporate powers exercised are consistent with the purposes of this act.
"Whenever the Federal Reserve Board shall permit the
applying bank to become a stockholder in the Federal
reserve bank of the district its stock subscription shall be
payable on call of the Federal Reserve Board, and stock
issued to it shall be held subject to the provisions of this
act.
"All banks admitted to membership under authority of
this section shall be required to comply with the reserve
and capital requirements of this act and to conform to
those provisions of law imposed on national banks which
prohibit such banks from lending on or purchasing their
own stock, which relate to the withdrawal or impairment
of their capital stock, and which relate to the payment of
unearned dividends. Such banks and the officers, agents,
and employees thereof shall also be subject to the provisions of and to the penalties prescribed by section fifty-two
hundred and nine of the Revised Statutes, and shall be
required to make reports of condition and of the payment
of dividends to the Federal reserve bank of which they
become a member. Not less than three of such reports
shall be made annually on call of the Federal reserve bank
on dates to be fixed by the Federal Reserve Board. Failure to make such reports within ten days after the date
they are called for shall subject the offending bank to a
penalty of $100 a day for each day that it fails to transmit
such report; such penalty to be collected by the Federal
reserve bank by suit or otherwise.
' 'As a condition of membership such banks shall likewise
be subject to examinations made by direction of the Federal Reserve Board or of the Federal reserve bank by examiners selected or approved by the Federal Reserve Board.
"Whenever the directors of the Federal reserve bank
shall approve the examinations made by the State authorities, such examinations and the reports thereof may be
accepted in lieu of examinations made by examiners
selected or approved by the Federal Reserve Board: Provided, however, That when it deems it necessary the board
may order special examinations by examiners of its own
selection and shall in all cases approve the form of the report. The expenses of all examinations, other than those
made by State authorities, shall be assessed against and
paid by the banks examined.
"If at any time it shall appear to the Federal Reserve
Board that a member bank has failed to comply with the
provisions of this section or the regulations of the Federal
Reserve Board made pursuant thereto, it shall be within
the power of the board after hearing to require such bank
to surrender its stock in the Federal reserve bank and to
forfeit all rights and privileges of membership. The Federal Reserve Board may restore membership upon due

446

FEDERAL RESERVE BULLETIN.

JUNE 1,

1917.

proof of compliance with the conditions imposed by this Federal reserve bank, as a condition of the discount of
notes, drafts, and bills of exchange for such State bank or
section.
"Any State bank or trust company desiring to with- trust company, shall require a certificate or guarantee to
draw from membership in a Federal reserve bank may the effect that the borrower is not liable to such bank in
do so, after six months' written notice shall have been filed ixcess of the amount provided by this section, and will not
with the Federal Reserve Board, upon the surrender and be permitted to become liable in excess of this amount
cancellation of all of its holdings of capital stock in the while such notes, drafts, or bills of exchange are under
Federal reserve bank: Provided, however, That no Federaldiscount with the Federal reserve bank.
reserve bank shall, except under express authority of the
" I t shall be unlawful for any officer, clerk, or agent of
Federal Reserve Board, cancel within the same calendar any bank admitted to membership under authority of this
year more than twenty-live per centum of its capital stock section to certify any check drawn upon such bank unless
for the purpose of effecting voluntary withdrawals during the person or company drawing the check has on deposit
that year. All such applications shall be dealt with in therewith at the time such check is certified an amount of
the order in which they are filed with the board. When- money equal to the amount specified in such check. Any
ever a member bank shall surrender its stock holdings in a check so certified by duly authorized officers shall be a
Federal reserve bank, or shall be ordered to do so by the good and valid obligation against such bank, but the act
Federal Reserve Board, under authority of law, all of its of any such officer, clerk, or agent in violation of this secrights and privileges as a member bank shall thereupon tion may subject such bank to a forfeiture of its membercease and determine, and after due provision has been ship in the Federal Reserve System upon hearing by the
made for any indebtedness due or to become due to the Federal Reserve Board."
Federal reserve bank it shall be entitled to a refund of its
SEC. 3. That the first paragraph of section thirteen be
cash paid subscription with interest at the rate of one-half amended so as to read as follows:
of one per centum per month from date of last dividend,
"Any Federal reserve bank may receive from any of its
if earned, the amount refunded in no event to exceed the member banks, and from the United States, deposits of
book value of the stock at that time, and shall likewise current funds in lawful money, national-bank notes, Fedbe entitled to repayment of deposits and of any other eral reserve notes, or checks and drafts payable upon
balance due from the Federal reserve bank.
presentation, and also, for collection, maturing notes and
" No applying bank shall be admitted to membership in bills; or, solely for purposes of exchange or of collection,
a Federal reserve bank unless it possesses a paid-up unim- may receive from other Federal reserve banks deposits of
paired capital sufficient to entitle it to become a national current funds in lawful money, national-bank notes, or
banking association in the place where it is situated under checks upon other Federal reserve banks, and checks and
drafts payable upon presentation within its district, and
the provisions of the national bank act.
"Banks becoming members of the Federal reserve maturing notes and bills payable within its district; or,
system under authority of this section shall be subject to solely for the purposes of exchange or of collection, may
the provisions of this section and to those of this act which receive from any nonmember bank or trust company derelate specifically to member banks, but shall not be posits of current funds in lawful money, national-bank
subject to examination under the provisions of the first notes, Federal reserve notes, checks and drafts payable
two paragraphs of section fifty-two hundred and forty of upon presentation, or maturing notes and bills: Provided,
the Revised Statutes as amended by section twenty-one Such nonmember bank or trust company maintains with
of this act. Subj ect to the provisions of this act and to the the Federal reserve bank of its district a balance sufficient
regulations of the board made pursuant thereto, any bank to offset the items in transit held for its account by the
becoming a member of the Federal Reserve System shall Federal reserve bank: Provided further, That nothing in
retain its full charter and statutory rights as a State bank this or any other section of this act shall be construed as
or trust company, and may continue to exercise all cor- prohibiting a member or nonmember bank from making
porate powers granted it by the State in which it was reasonable charges, in no case to exceed 10 cents per $100
created, and shall be entitled to all privileges of member or fraction thereof, based on the total of checks and drafts
banks: Provided, hmvever, That no Federal reserve bank presented at any one time, for collection or payment of
shall be permitted to discount for any State bank or trust checks and drafts and remission therefor by exchange or
company notes, drafts, or bills of exchange of any one otherwise."
borrower who is liable for borrowed money to such State
SEC. 4. That the fifth paragraph of section thirteen be,
bank or trust company in an amount greater than ten per and is hereby, amended so as to read as follows:
centum of the capital and surplus of such State bank or
"Any member bank may accept drafts or bills of extrust company, but the discount of bills of exchange change drawn upon it having not more than six months'
drawn against actually existing value and the discount of sight to run, exclusive of days of grace, which grow out of
commercial or business paper actually owned by the transactions involving the importation or exportation of
person negotiating the same shall not be considered as goods; or which grow out of transactions involving the
borrowed money within the meaning of this section. The domestic shipment of goods provided shipping documents




JUNE 1,

1917.

FEDERAL RESERVE BULLETIN.

447

conveying or securing title are attached at the time of reserve agent holds gold or gold certificates as collateral for
acceptance; or which are secured at the time of acceptance Federal reserve notes issued to the bank such gold or gold
by a warehouse receipt or other such document conveying certificates shall be counted as part of the gold reserve
or securing title covering readily marketable staples. No which such bank is required to maintain against its Fedmember bank shall accept, whether in a foreign or do- eral reserve notes in actual circulation. Notes so paid
mestic transaction, for any one person, company, firm, or out shall bear upon their faces a distinctive letter and
corporation to an amount equal at any time in the aggre- serial number, which shall be assigned by the Federal
gate to more than ten per centum of its paid-up and unim- Reserve Board to each Federal reserve bank. Whenever
paired capital stock and surplus, unless the bank is secured Federal reserve notes issued through one Federal reserve
either by attached documents or by some other actual bank shall be received by another Federal reserve bank,
security growing out of the same transaction as the accept- they shall be promptly returned for credit or redemption
ance; and no bank shall accept such bills to an amount to the Federal reserve bank through which they were
equal at any time in the aggregate to more than one-half originally issued or, upon direction of such Federal reserve
of its paid-up and unimpaired capital stock and surplus: bank, they shall be forwarded direct to the Treasurer of
Provided, however, That the Federal Reserve Board, un- the United States to be retired. No Federal reserve bank
der such general regulations as it may prescribe, which shall pay out notes issued through another under penalty
shall apply to all banks alike regardless of the amount of of a tax of ten per centum upon the face value of notes so
capital stock and surplus, may authorize any member paid out. Notes presented for redemption at the Treasury of
bank to accept such bills to an amount not exceeding at the United States shall be paid out of the redemption fund
any time in the aggregate one hundred per centum of its and returned to the Federal reserve banks through which
paid-up and unimpaired capital stock and surplus: Pro- they were originally issued, and thereupon such Federal
vided further, That in no event shall a bank accept for any reserve bank shall, upon demand of the Secretary of the
one person, company, firm, or corporation to an amount Treasury, reimburse such redemption fund in lawful
equal at any time in the aggregate to more than twenty money or, if such Federal reserve notes have been reper centum of its paid-up and unimpaired capital stock deemed by the Treasurer in gold or gold certificates, then
such funds shall be reimbursed to the extent deemed
and surplus."
SEC. 5. That section sixteen, paragraphs two, three, necessary by the Secretary of the Treasury in gold or gold
four, five, six, and seven, be further amended and re- certificates, and such Federal reserve bank shall, so long
as any of its Federal reserve notes remain outstanding,
enacted so as to read as follows:
"Any Federal reserve bank may make application to maintain with the Treasurer in gold an amount sufficient
the local Federal reserve agent for such amount of the in the judgment of the Secretary to provide for all redempFederal reserve notes hereinbefore provided for as it may tions to be made by the Treasurer. Federal reserve notes
require. Such application shall be accompanied with a received by the Treasurer otherwise than for redemption
tender to the local Federal reserve agent of collateral in may be exchanged for gold out of the redemption fund
amount equal to the sum of the Federal reserve notes thus hereinafter provided and returned to the reserve bank
applied for and issued pursuant to such application. The through which they were originally issued, or they may
collateral security thus offered shall be notes, drafts, bills be returned to such bank for the credit of the United
of exchange, or acceptances acquired under the provisions States. Federal reserve notes unfit for circulation shall
of section thirteen of this act, or bills of exchange indorsed be returned by the Federal reserve agents to the Compby a member bank of any Federal reserve district and troller of the Currency for cancellation and destruction.
purchased under the provisions of section fourteen of this
act, or bankers' acceptances purchased under the provisions of said section fourteen, or gold or gold certificates;
but in no event shall such collateral security, whether
gold, gold certificates, or eligible paper, be less than the
amount of Federal reserve notes applied for. The Federal
reserve agent shall each day notify the Federal Reserve
Board of all issues and withdrawals of Federal reserve
notes to and by the Federal reserve bank to which he is
accredited. The said Federal Reserve Board may at any
time call upon a Federal reserve bank for additional
security to protect the Federal reserve notes issued to it.
"Every Federal reserve bank shall maintain reserves in
gold or lawful money of not less than thirty-five per centum
against its deposits and reserves in gold of not less than
forty per centum against its Federal reserve notes in actual
circulation: Provided, however, That when the Federal




"The Federal Reserve Board shall require each Federal
reserve bank to maintain on deposit in the Treasury of the
United States a sum in gold sufficient in the judgment of the
Secretary of the Treasury for the redemption of the Federal
reserve notes issued to such bank, but in no event less than
five per centum of the total amount of notes issued less the
amount of gold or gold certificates held by the Federal
reserve agent as collateral security; but such deposit of
gold shall be counted and included as part of the forty per
centum reserve hereinbefore required. The board shall
have the right, acting through the Federal reserve agent,
to grant, in whole or in part, or to reject entirely the application of any Federal reserve bank for Federal reserve
notes; but to the extent that such application may be
granted the Federal Reserve Board shall, through its local
Federal reserve agent, supply Federal reserve notes to the
banks so applying, and such bank shall be charged with

448

FEDERAL RESERVE BULLETIN.

the amount of notes issued to it and shall pay such rate of
interest as may be established by the Federal Reserve
Board on only that amount of such notes which equals the
total amount of its outstanding Federal reserve notes less
the amount of gold or gold certificates held by the Federal
reserve agent as collateral security. Federal reserve notes
issued to any such bank shall, upon delivery, together
with such notes of such Federal reserve bank as may be
issued under section eighteen of this act upon security of
United States two per centum Government bonds, become
a first and paramount lien on all the assets of such
bank.
"Any Federal reserve bank may at any time reduce its
liability for outstanding Federal reserve notes by depositing with the Federal reserve agent its Federal reserve
notes, gold, gold certificates, or lawful money of the
United States. Federal reserve notes so deposited shall
not be reissued, except upon compliance with the conditions of an original issue.
"The Federal reserve agent shall hold such gold, gold
certificates or lawful money available exclusively for exchange for the outstanding Federal reserve notes when
offered by the reserve bank of which he is a director.
Upon the request of the Secretary of the Treasury the
Federal Reserve Board shall require the Federal reserve
agent to transmit to the Treasurer of the United States so
much of the gold held by him as collateral security for
Federal reserve notes as may be required for the exclusive
purpose of the redemption of such Federal reserve notes,
but such gold when deposited with the Treasurer shall be
counted and considered as if collateral security on deposit
with the Federal reserve agent.
"Any Federal reserve bank may at its discretion withdraw collateral deposited with the local Federal reserve
agent for the protection of its Federal reserve notes issued
to it and shall at the same time substitute therefor other
collateral of equal amount with the approval of the Federal
reserve agent under regulations to be prescribed by the
Federal Reserve Board. Any Federal reserve bank may
retire any of its Federal reserve notes by depositing them
with the Federal reserve agent or with the Treasurer of
the United States, and such Federal reserve bank shall
thereupon be entitled to receive back the collateral deposited with the Federal reserve agent for the security of
such notes. Federal reserve banks shall not be required
to maintain the reserve or the redemption fund heretofore
provided for against Federal reserve notes which have
been retired. Federal reserve notes so deposited shall not
be reissued except upon compliance with the conditions
of an original issue."
All Federal reserve notes and all gold, gold certificates,
and lawful money issued to or deposited with any Federal
reserve agent under the provisions of the Federal reserve
act shall hereafter be held for such agent, under such rules
and regulations as the Federal Reserve Board may prescribe, in the joint custody of himself and the Federal
reserve bank to which he is accredited. Such agent and
such Federal reserve bank shall be jointly liable for the




JUNB 1,1917.

safe-keeping of such Federal reserve notes, gold, gold certificates, and lawful money. Nothing herein contained,
however, shall be construed to prohibit a Federal reserve
agent from depositing gold or gold certificates with the
Federal Reserve Board, to be held by such board subject
to his order, or with the Treasurer of the United States for
the purposes authorized by law.
SEC. 6. That section sixteen be further amended by
adding at the end of the section the following:
"That the Secretary of the Treasury is hereby authorized and directed to receive deposits of gold coin or of gold
certificates with the Treasurer or any assistant treasurer of
the United States when tendered by any Federal reserve
bank or Federal reserve agent for credit to its or his account
with the Federal Reserve Board. The Secretary shall prescribe by regulation the form or receipt to be issued by the
Treasurer or Assistant Treasurer to the Federal reserve
bank or Federal reserve agent making the deposit, and a
duplicate of such receipt shall be delivered to the Federal
Reserve Board by the Treasurer at Washington upon
proper advices from any assistant treasurer that such deposit has been made. Deposits so made shall be held
subject to the orders of the Federal Reserve Board and
shall be payable in gold coin or gold certificates on the
order of the Federal Reserve Board to any Federal reserve
bank or Federal reserve agent at the Treasury or at the
Subtreasury of the United States nearest the place of business of such Federal reserve bank or such Federal reserve
agent: Provided, however, That any expense incurred in
shipping gold to or from the Treasury or Subtreasuries in
order to make such payments, or as a result of making such
payments, shall be paid by the Federal Reserve Board and
assessed against the Federal reserve banks. The order
used by the Federal Reserve Board in making such payments shall be signed by the governor or vice governor,
or such other officers or members as the board may by regulation prescribe. The form of such order shall be approved
by the Secretary of the Treasury.
"The expenses necessarily incurred in carrying out these
provisions, including the cost of the certificates or receipts
issued for deposits received, and all expenses incident to
the handling of such deposits shall be paid by the Federal
Reserve Board and included in its assessments against the
several Federal reserve banks.
"Gold deposits standing to the credit of any Federal
reserve bank with the Federal Reserve Board shall, at the
option of said bank, be counted as part of the lawful reserve
which it is required to maintain against outstanding
Federal reserve notes, or as a part of the reserve it is required to maintain against deposits.
"Nothing in this section shall be construed as amending
section six of the act of March fourteenth, nineteen hundred, as amended by the acts of March fourth, nineteen
hundred and seven, March second, nineteen hundred and
eleven, and June twelfth, nineteen hundred and sixteen,
nor shall the provisions of this section be construed to
apply to the deposits made or to the receipts or certificates
issued under those acts."

JUNI 1,

1317.

FEDERAL EESEEVE BULLETIN.

Sue. 7. That section seventeen be, and is hereby,
amended so as to read as follows:
"SEC. 17. So much of the provisions of section fifty-one
hundred and fifty-nine of the Revised Statutes of the
United States, and section four of the act of June twentieth,
eighteen hundred and seventy-four, and section eight of
the act of July twelfth, eighteen hundred and eighty-two,
and of any other provisions of existing statutes as require
that before any national banking association shall be authorized to commence banking business it shall transfer
and deliver to the Treasurer of the United States a stated
amount of United States registered bonds, and so much of
those provisions or of any other provisions of existing statutes as require any national banking association now or
hereafter organized to maintain a minimum deposit of
such bonds with the Treasurer is hereby repealed."
SEC. 8. That section nineteen be amended and reenacted so as to read as follows:
"SEC. 19. Demand deposits within the meaning of this
act shall comprise all deposits payable within thirty days,
and time deposits shall comprise all deposits payable after
thirty days, all savings accounts and certificates of deposit which are subject to not less than thirty days' notice
before payment, and all postal savings deposits.
"Every bank, banking association, or trust company
which is or which becomes a member of any Federal re•erve bank shall establish and maintain with its Federal
reserve bank reserves as follows:
"(a) If not in a reserve or central reserve city, as now
or hereafter denned, it shall hold and maintain with the
Federal reserve bank of its district actual net reserves
equal to not less than six per centum of the aggregate
amount of its demand deposits and three per centum of
its time deposits.
"(&) If in a reserve city, ns now or hereafter defined, it
shall hold and maintain with the Federal reserve bank of
its district actual net reserves equal to not less than ten
per centum of the aggregate amount of its demand deposits
and three per centum of its time deposits.
. "(c) If in a central reserve city, as now or hereafter
denned, it shall hold and maintain with the Federal reserve
bank of its district an actual net reserve equal to not less
than thirteen per centum of the aggregate amounlof its demand deposits and three per centum of its time deposits.
"Every member bank shall maintain in its own vaults
an amount of specie or currency equal to at least four per
centum of its demand deposits less the amount of those
reserves with the Federal, reserve bank which are in excess
© the minimum reserves required by this section.
f
"No member bank shall keep on deposit with any nonmember bank a sum in excess of ten per centum of its
•irn paid-up capital and surplus. No member bank shall
act as the medium or agent of a nonmember bank in applying for or receiving discounts from a Federal reserve bank
under the provisions of this Act except by permission of
the Federal Reserve Board.
"The required balance carried by a member bank with
a Federal reserve bank may, under the regulations and




449

subject to such penalties as may be prescribed by the
Federal Reserve Board, be checked against and withdrawn by such member bank for the purpose of meeting
existing liabilities: Provided, however, That no bank shall
at any time make new loans or shall pay any dividends
unless and until the total reserve requirccl by law ib fully
restored.
'•'In estimating the reserves and the cash in vault required by this act, the net balance of amounts due to and
from other banks shall be taken as the basis for ascertaining the bank deposits against which reserves with
Federal reserve banks and cash in vault shall be determined.
"National banks or banks organized under local laws
located in Alaska or in a dependency or insular possession
or any part of the United States outside the continental
United States may remain nonmember banks,, and shall
in that event maintain reserves and comply with all the
conditions now provided by law regulating them; or said
banks except in the Philippine Islands may, with the
consent of the Federal Reserve Board, become member
banks of any one of the reserve districts, and shall, in
that event, take stock, maintain reserves, and be subject
to all the other provisions of this act."
SEC. 9. That that part of section twenty-two which
reads as follows: " Other than the usual salary or director's
fees paid to any officer, director, or employee of a member
bank and other than a reasonable fee paid by said bank to
such officer, director, or employee for service rendered to
such bank, no officer, director, employee, or attorney of a
member bank shall be a beneficiary of or receive, directly
or indirectly, any fee, commission, gift, or other consideration for or in connection with any transaction or business
of the bank," be, and hereby is, amended and reenacted
so as to read as follows:
" Other than the usual salary or director's fee paid to
any officer, director, employee, or attorney of a member
bank, and other than a reasonable fee paid by said bank to
such officer, director, employee, or attorney for services
rendered to such bank, no officer, director, employee, or
attorney of a member bank shall be a beneficiary of or
receive, directly or indirectly, any fee, commission, gift, or
other consideration for or in connection with any transaction or business of the bank: Provided, however, That
nothing in this act contained shall be construed to prohibit a director, officer, employee, or attorney from receiving the same rate of interest paid to other depositors for
similar deposits made with such bank: And provided
further, That notes, drafts, bills of exchange, or other
evidences of debt executed or indorsed by directors or
attorneys of a member bank may be discounted with such
member bank on the same terms and conditions as other
notes, drafts, bills of exchange, or evidences of debt upon
the affirmative vote or written assent of at least threefourths of the members of the board of directors of such
member bank."
Passed the House of Representatives May 5, 1917.
Passed the Senate with an amendment May 9, 1917,

450

FEDERAL RESERVE BULLETIN".

JUNE 1,1917.

[A bill to amend the act approved Dec. 23, 1913, known
as the Federal Reserve Act.]

New National Bank Charters.

The Comptroller of the Currency reports the
following increases and reductions in the number of national banks and the capital of
national banks during the period from April
21, 1917, to May 25,1917, inclusive:

Be it enacted ly the Senate and, House of
Representatives of the United States of America
in Congress assembled. That the Act approved
December 23, 1913, known as the Federal Reserve Act, be amended by adding a new section as follows:

Banks.

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

BANKING CORPORATIONS AUTHORIZED TO DO
FOREIGN BANKING BUSINESS.
$1,095,000
17
SECTION 25 (a). That banking corporations
2,565,000 for carrying on the business of international
24

Aggregate number of new charters and
banks increasing capital
41
With aggregate of new capital authorized
3,660,000
Number of banks liquidating (other than
those consolidating with other national
banks)
10
Capital of same banks
Number of banks reducing capital
0
Reduction of capital
Total number of banks going into liquidation or reducing capital (other than those
consolidating with other national banks). 10
Aggregate capital reduction

680,000
0

680,000

The foregoing statement shows the aggregate of
increased capital for the period of the banks
embraced in statement was
3,660,000
Against this there was a reduction of capital
owing to liquidations (other than for consolidation with other national banks) and
reductions of capital of
680,000
Net increase

2,980,000

Foreign Trade Banks.
In view of the demand for legislation authorizing the granting of Federal charters to banks
organized for the purpose of engaging in foreign trade and intending to exercise the functions already provided in the existing legislation, the Federal Reserve Board has renewed
an earlier recommendation to Congress for the
adoption of an act authorizing the granting
of such charters. The bill as transmitted to
the Banking and Currency Committees of the
two Houses with the approval of the Board is
as follows:




banking and banking in foreign countries and
(or) in the dependencies and (or) insular possessions of the United States, and in aid of
commerce between the United States, its dependencies, insular possessions, and foreign
countries, and to act when required as fiscal
agents of the United States, may be formed by
any number, not less than three, of persons,
firms, companies, or corporations; for which
purpose they shall enter into articles of association, in such form and containing such rules
and regulations with respect to and governing
the conduct of the business of the proposed
corporation as may be prescribed by the Federal Reserve Board. Such articles of association shall, in general terms, specify the objects
for which the banking corporation is formed,
and may contain any other provisions for the
regulation and conduct of the business and
affairs of the corporation not inconsistent with
the provisions of this act or with any other law
of the United States which may be deemed
proper. Such articles of association shall be
signed by all of the persons, firms, companies,
or corporations intending to participate in the
organization of the said banking corporation
and, thereafter, shall be forwarded to the Federal Reserve Board and shall be filed and preserved in its office.
The persons, firms, companies, or corporations signing the said articles of association
shall also make an organization certificate
which shall specify—
First. The name assumed by such corporation, which shall be subject to the approval of
the Federal Reserve Board.
Second. The foreign country, countries, and
(or) the dependency, dependencies, colony, or
colonies thereof, and (or) the dependency or
dependencies, insular possession or insular
possessions of the United States where its
operations are to be carried on.
Third. The place in the United States where
its home office is to be located.

Fourth. The amount of its capital stock and
the number of shares into which the same shall
be divided.
Fifth. The name and place of business of
each person, firm, company, or corporation
executing such certificate, and the number of
shares which each has subscribed or agreed to
take.
Sixth. A declaration that said certificate is
made to enable the persons, linns, companies,
and corporations subscribing the same, and
all other persons, firms, companies, and corporations, who or which may thereafter subscribe to or purchase shares of the capital stock
of such corporation, to avail themselves of the
advantages of this section.
CREATION OF CORPORATION.

The persons, firms, companies, and corporations, respectively, signing the said organization certificate shall duly acknowledge the execution thereof before a judge of some court of
record or notary public, who shall certify thereto under the seal of such court or notary, and
thereafter the certificate shall be forwarded to
the Federal Reserve Board to be filed and preserved in its office. From the date of the filing
of the organization certificate the corporation
therein mentioned shall become and be a body
corporate, and as such, and in the name designated therein, shall have power to adopt and
use a corporate seal, which may be changed at
the pleasure of its board of directors; to have
succession for a period of twenty years, unless
sooner dissolved by an act of Congress or unless
its franchises become forfeited by some violation of lav/; to .make contracts; to sue and be
sued, complain and defend in any court of law
or equity; to elect or appoint directors, a majority of whom shall be citizens of the United
States; and, through its board of directors, to
appoint such officers and employees as may be
deemed proper, define their authority and duties, require security for the faithful performance of their duties from such thereof and in
such amounts as may be deemed proper, dismiss them, or any thereof, at pleasure, and appoint others to fill their places; to prescribe, by
its board of directors, by-laws not inconsistent
with law or with the regulations of the Federal
Reserve Board, specifying the manner in which
its stock shall be transferred, its directors
chosen, its officers and employees selected, its
property transferred, its general business conducted, and its privileges exercised and onjoyed.




100256—17

451

FEDERAL RESERVE BULLETIN.

JUNE 1, 1917.

5

POWERS GRANTED.

Each corporation so organized shall also
have power:
(a) To purchase, sell, discount, and negotiate
notes, drafts, checks, bills of exchange, acceptances, including bankers' acceptances, and
other evidences of indebtedness; to purchase
and sell securities, including the obligations of
the United States or of any State thereof; to
accept bills or drafts drawn upon it; to issue
letters of credit, to purchase and sell exchange,
coin, and bullion; to borrow money, to lend
money on real or personal security or without
security; to receive deposits; and generally to
exercise such powers and to do such things as
are incidental to the banking business or as
may be usual in connection therewith, as the
same may be conducted in the country or
countries, colonies, dependencies, or possessions in which it shall transact business.
(5) To establish and maintain branches or
agencies in foreign countries, their dependencies or colonies, and in the dependencies or
insular possessions of the United States, at
such places as may be approved by the Federal
Reserve Board and under such rules and regulations as it may prescribe; and the number of
places where branches or agencies may be
established and maintained may, from time to
time, with the consent of the Federal Reserve
Board, and under such rules and regulations
as it may prescribe, be increased or decreased.
(c) To purchase and hold stock or other certificates of interest or ownership in any other
banking corporation or association, organized
under the provisions of this section, or under
the laws of any foreign country or a colony or
dependency thereof, or under the laws of any
State, dependency, or insular possession of the
United States, which banking corporation,
or association, shall not be transacting business in the United States, except to such extent
as may be incidental to its international or
foreign business: Provided, lioioever, That without the consent of the Federal Reserve Board
no corporation organized hereunder shall invest in any ono banking corporation an amount
in excess of twenty per centum of its own capital and surplus: And 'provided further. That,
without the consent of the Federal Reserve
Board, no corporation organized hereunder
shall purchase stock in an^y other corporation
organized under the provisions of this section
or under the laws of any State of the United
States or of any dependency or possession

452

FEDERAL RESERVE BULLETIN.

JUNE 1,1917.

thereof. So much of section 7 of the actNo national bank or other member of a
approved October 15, 1914, entitled "An. act to Federal Reserve Bank shall subscribe for or
supplement existing laws against unlawful re- hold stock in banking corporations organized
straints and monopolies, and for other pur- under the provisions of this section aggregating
poses, " as maybe in conflict with the provisions more than ten per centum of the paid-in capital
of this paragraph, is hereby amended in such and surplus of the subscribing bank.
manner that the provisions thereof shall not
Shareholders in such corporations shall not
apply to a corporation organized hereunder.
be liable for the contracts, debts, and engage\d) To exercise, through its board of direc- ments of such corporations except to the
tors or duly constituted officers or agents, all extent of their unpaid stock subscriptions.
Any member bank may act as agent for any
powers not herein expressly granted, which
shall be incidental to such expressly granted corporation organized under the provisions of
powers and which shall be necessary for the this section for the purpose of dealing with any
purpose of carrying on the business of banking Federal Reserve Bank and the Federal. Reserve
authorized by law: Provided, liowever, That no Board shall establish and promulgate rules and
corporation organized under this section shall regulations defining and governing transactions
carry on any part of its business in the "United which corporations organized hereunder may
States except such as, in the judgment of the have with Federal Reserve Banks, either
Federal Reserve Board, shall bo incidental to directly or through the agency of a member
"bank. " No corporation organized hereunder
shall, however, become a member of any
and preliminary to its organization no such Federal Reserve Bank.
corporation shall transact any business until
Every corporation organized hereunder shall
it has been dxily authorized by the Federal hold a meeting of its stockholders annually
Reserve Board to commence business as a cor- upon a date fixed in its by-laws, at which
poration organized under the provisions of directors, or such number thereof as the bythis section.
laws may require, shall be elected to serve until
No corporation shall be organized under the their successors are elected and qualified, which
provisions of this section with a capital stock meetings shall be held at its home office in the
of less than $1,000,000, one quarter of which United States. At every meeting of stockmust be paid in before the corporation may be holders, each shareholder shall be entitled to
authorized to begin business. The capital cast, in person or by proxy, one vote for each
stock of any such corporation may be increased share held. Every such corporation shall
at any time, with the approval of the Federal keep at its home office books containing the
Reserve Board, b}^ a vote of two-thirds of its names of all stockholders thereof, and the
shareholders, or by unanimous consent in names and addresses of the members of its
writing of the shareholders without a meeting board of directors, together with copies of all
and without a formal vote; and may be re- reports made by it to the Federal Reserve
duced in like manner, provided that, in no Board; and each such corporation shall make
reports to the Federal Reserve Board at such
event, shall it be lass than $1,000,000.
times and hi such form as it may require; and
shall be subject to examinations whenever
OWNERSHIP OF SHARES.
deemed necessary by the Federal Reserve
A majority of the shares of the capital stock Board which examinations shall be conducted
of any such corporation shall be held and by examiners appointed by the Federal Reserve
owned by citizens of the United States, by cor- Board, the cost of such examinations, including
porations chartered under the laws of the the compensation of the examiners, to be fixed
United States or of a State of the United States by the Federal Reserve Board and to be paid
or by firms or companies, the controlling inter- by the corporation examined.
est in which is owned by citizens of the
Should any corporation organized hereunder
United States or of a State thereof. The pro- fail to comply with any of the provisions of the
visions of section eight of the act approved laws of the United States, all of its rights, priviOctober 15, 1914, entitled "An act to supple- leges, and franchises derived herefrom may
ment existing laws against unlawful restraints thereby be forfeited. Before any such corand monopolies, and for other purposes," shall poration shall be declared dissolved, or its
not be construed to apply to the directors, other rights, privileges, and franchises forfeited, any
officers, agents, or employees of corporations noncompliance with, or violation of such laws
organized under the provisions of this section. shall, however, be determined and adjudged by




JUNE 1,

1917.

FEDERAL RESERVE BULLETIN.

a court of the United States of competent
jurisdiction, in a suit brought for that purpose
in the district or territory in which the home
office of such corporation's located, which suit
shall be brought by the United States at the
instance of the Federal Reserve Board. Upon
adjudication of such noncompiiance- or violation, each director and officer who participated
in, or assented to, the illegal act or acts/shall
be liable in his personal or individual capacity
for all damages which the said corporation shall
have sustained in consequence thereof. No
dissolution shall take away or impair any
remedy against the corporation, its stockholders, or officers for any liability or penalty
previously incurred.




453

Any such corporation may go into voluntary
liquidation and be closed and woundup by a vote
of its shareholders holding two-thirds of its stock.
Whenever the Federal Reserve Board shall
become satisfied of the insolvency of any such
corporation it may appoint a receiver thereof,
who shall take possession of all of the property
and assets of the corporation and exercise the
same rights, privileges, powers, and authority
with respect thereto as "are now exercised by
receivers of national banks appointed by the
Comptroller of the Currency of the United
States; provided, however, that the assets of
the corporation subject to the laws of other
countries or jurisdictions shall be dealt with in
accordance with such laws,

454

FEDERAL RESERVE BULLETIN.

JUNE 1,

1917.

Below are given the figures covering the
transactions which took place in the fund
between the settlements of April 19 and May
17. Total obligations settled, including the
four weekly settlements and ordinary transfers
between banks, amounted to $l,837,019;000, an
increase of 8622,124,500 over the totals of the
previous four weeks. Changes in ownership in
the fund amounted to only 2.01 per cent of
the obligations settled. New York, San Francisco, and Boston show the only increases.

GOLD SETTLEMENT FUND.

Since the last published statement of the
fund, in the Bulletin of May 1, each weekly
settlement has produced increased totals, exceeding in each week the previous high record
of $338?894,000; the total of the obligations
liquidated in the settlement of April 19. The
settlement of May 17 showed totals liquidated
of $412,103,000, the largest amount for any
one week in the history of the fund.
Transfers between Federal Reserve Banks
through the fund were also large, amounting Amount of clearings and transfers, Federal Reserve Banks,
from Apr. 20, 1917, to May 17, 1917, inclusive.
during the four weeks beginning April 20, to
$282,009,000. These transfers represent, in the
L000 omitted.]
main, the shifting of credits of the Treasurer of
Total clear- Balances Transthe United States with the various Federal
ings.
adjusted.
fers.
Reserve Banks to the Federal Reserve Bank of
New York. These new credits were brought Settlement; of—
£370,440
A p r 26,1917
$20,703 $65,731
404,804
M a v 3, 1917.
.
. . .
about through the subscriptions by the banks
64,554
17, (500
307,867
May 10.1917
89,938
18,878
M a v 17,' 1917
412,103
to the recently issued United States certificates
53,684 108,740
Total
of indebtedness, and were transferred from the
1.555,014
157,879 282,009
4,408,740
Previously reported Tor 1917
250,986
98,00-1.5
other Federal Reserve Banks to that of New
Total since Jan. 1,1917
5,963,754
403,865 380,613.5
York in order that the Treasurer might have Total transfers Jan. 1,1917,to date. . 380,613.5
Total for 1916, including transfers... 5,633,960
funds in New York which he could use in mak- Total for 1915, including transfers j 1,052,649
ing large payments due from the United States
Total clearings and transfers, ;
May 20,1915, to May 17,1917. i 13,030,982.5
Government.
Changes in ownership of gold.
[000 omitted.]
Total to Apr. 19,
1917.

Federal Reserve Bank of—

841,380

Richmond
Atlanta

Chicago
St. Louis
Minneapolis
Kansas City
Dallas.....'
San Francisco

.

.

.

.

.

.

.

§407,980

81,660
44,618
19,907
23,897
38,134
8,917
: : : : : : : : : : 10, 724
55,125.5
29,926.5
53,697
•

Total




407,986 407,986
1
2

Total changes from
Apr. 20, 1917, to
May 17,1917.2

Balance to
credit Apr.
19,1917, plus Balance Hay Decrease.
Decrease. Increase. net deposits
Increase. Decrease. Increase.
17,1917.
of gold since
that date.

Boston
N o w VorV
.
Philadelphia
Cleveland

From Apr. 20, 1917, to Majr 17, 1917, inclusive. 1

$16,552
16,992
18,451
27,453
19,055
5,961
33,212
9,773
8,551
24,508
7,575
1,777

§22,316
37,809
4,854
19,296
13,655
4,973
30,208
7,242
7,923
22,233
7, .175
12,176

$13,597
8,157
o,400
988
3,004
2.531
'628
2,275
400

189,860

189,860

36,980

$5,704
-$4.7,144
20,817 'S387,"l69"
68,063
36,461
i
14,507
22,909
i *
35,130
6,386
10,096
52,850.5
29,526.5
10 3Q9
64,096
36,980

387,169

Changes in ownership of gold during period Apr. 20,1917, to May 17,1917, equal 2.01 per cent of obligations settled.
Total changes in ownership of gold since May 20,1915, equal 2.97 per cent of total obligations settled.

387,169

455

EEDEBAL RESERVE BULLETIN".

JUNE 1, 1917.

Gold settlement fund—Summary

of transactions from Apr. 20, 1917, to May 17, 1917, inclusive.
[000 omitted.]

I
Balance
last
statement,
Apr. 19,
1917.

Federal Reserve Bank o—
f

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

j
!
I
j

Gold.
"Deposited.

833,500

58,613
26,300
33,170
10,625
10,000
58,200
15,000
3,600
17,500
9,001
6,500
41,810

Federal Reserve Agents' fund—Summary

Weekly settlements from Apr. 20, 1917, to
May 17, 1917.

May 17,
1917,
balance
in fund
after
Total ! Net
credits, j credits. clearing.

Credit.

Debit.

~r

320,552
21,992
18,071
30,753
15,325
5,631
41,752
5,973
6,351
25,258
5,345
10,227
207,230

Total

Transfers.

282,009

Net
debits.

Total
debits.

S870
218,850

SI, 639
139', 420
2,919

S139,224 ! $40,033
8100,830
373,473 !
512,893
m 413 ! 212,116 j 15,622
99!632 i
124,645 ! 25,013
5', 910
80,570 I
85,795 i
5,628
49,568 ,
49,567 j
17,12.1
189,182 i
204,378
7,419
127,261.
134,680 i
1,905
34,709
34,681 !
15,607
77,510 i
92,734
8,601
33,026 !
41,627
50,420 I
62,094
15,020

S22,316
37,809
4,854
19,296
13,055
4,073
30;208
7,242
7.923
22,233
7,175
12,176

1,555,014 I 1,555,014 | 157,879

189,860

9,013
40,000
5,050
3,000
5,225

685*
5,629
1,925
1,933 j
383
3,346 |

282,009 j 157,879

of transactions, Apr. 20, 1917, to May 17, 1917, inclusive.
[000 omitted.]

I Balance
Federal Reserve Agent at—
1917."
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis

; $20,590
\
9,500
\ 8,100
' 13,030
; 37,770
i
6,270

Withdrawn.

Deposited.

S400

S4,120
3,000
1,500
450
10,700

3,600

ieo'

1

Balance
May 17,
1917.

! Balance
Federal Reserve Agent at—
1017!

524,310 ; Minneapolis
12,500 i Kansas City
6,000 ' Dallas
13,480 San Francisco
48,310
Total
6,270

:
i
\
!

Withdrawn.

So, 720
20,360
8,360
IS, 110
147,810 j

82,500
500
2,720

Balance
Deposited. ! May 17,
1917.

3,000

9,880 \

S3,220
20,560
5,640
21,110

23,470

161,400

$700

Operations of the Federal Reserve clearing system Apr. 16, to May 15, 1917.
Items drawn on Items drawn on
district
banks in Federal banks inFederal
outside
Reserve city
"Reserve city
(daily average). (daily average).

Member
ly avenge). banks
in district.
Number. : Amount.

Nonmember
banks
from
which
chocks
M'Q collected,
at par.

392
970 i §176,295
2,883 i$5,213,161 41,559 S17,749,701
624
16,448 1 9,863,679 43,417 50,328,494 7,352 '1,536,436
632
950 I 157,804
6,728 8,166,939 33,185 21,720,854
754
205 i 24,918
1,023 1,222,683 17,719 10,528,324
521
196 j 23,508
1,602 2,843,000 16,472 9,208,893
382
547 1 54,794
1,555 1,707,116 13,073 4,766,147
684,632 19,508 15,000,868 2,225 i 323,552 1,044
1,375
469
169 1,977,438 10,337 8,713,749 2,242 I 318,699
721
830,559 13,591 5,986,169
173 ! 19,309
629
941
814 I 58,547
593 3,592,025 12,248 9,067,300
625
328
318
703,674 11,086 5,203,930
14 i
526
32,028 6,093 2,406,527
237 ! 903,675
105

2-48
] 425
242
542
270
387
1,801
863
1,028
1,510
221
1,289

Items drawn on
banks in other
districts (daily
average).

NumNumNumNumber. Amount. ber. Amount. ber. Amount. i ber.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chi c ago
St. Louis
Minneapolis
Kansas City
Dallas....."
San Francisco

j 1,852 88,560,546
; 4,465 31,130,454
ill, 093 11,215,899
j 1,114 2,601,931
]
1,107 2,486,723
j 1,209 1,102,922
,5,273 11,570,270
i 1,673 5,008,976
! 2,220 4,258,335
i 1,955 3,800,394
! 981 1,108,054
\ 825 1,463,35.5

T

36,824 i-13,975,994
22,504 I 6,334,361
15,364 2,338,016
15,582 6,700,710
13,763 3,879,170
10,309 1,896,109
! 12,860 2,745,966
I 8,495 1,727,335
! 10,742
897,275
1
9 700 1,674,881
9,787 3,392,202
911,144
5,163

Amount.

Total:
j
Apr. 16 to May 15.1917
:33,767 87,370,859 171,093 36,473,163 33,428 136,836,934 238,288 160,680,956 15,925 |3,597,865 7,634
7,625
1231,777 127,618,503
Mar. 16 to Apr. 15. 1917
7,630
.234,475 116,401,430
Feb. 16 to Mar. 15', 1917
7,630
.220,421 110,188,028
Jan. 16 to Feb. 15, .1917
7,622
.[241,933 121,814,589
Dec. 16.1916. to Jan. 15,1917...
7,627
-!236,038 125,603,732
Nov. 16to Dec.15.1916
i
7,623
.1227,489 115,061,224
Oct. 16 to Nov. 15.1916
i
7,618
.1204,891 97,660,107
Sept. 16 to Oct. 15.1916
|
7,618
177,397 78,559,704
A u s . l 6 t o Sept. 15,1916
j
7,624
133,113 59,301,696
July 15 to Aug. 15.1916
j




1

Including banks from which collections arc made through express companies.

1

8,926
8,607
8,007
8,130
8,065
8.059
7; 459
7,419
7,032

456

FEDERAL RESERVE BULLETIN.

.TONE 1, 1017.

INFORMAL RULINGS OF THE BOARD.
Below are reproduced letters sent out from
time to time over the signatures of the officers
or members of the Federal Reserve Board
which contain information believed to be of
general interest to Federal Reserve Banks and
member banks of the system:
Paper Secured by Warehouse Receipts.
(To a Member of Congress.)

Your letter of April 26, inclosing letter from
; president of the Equity Cooperative
Association of
, has been received.7
It is not entirely clear from Mr.
s letter for just what purpose it is desired to use the
proceeds of the loans he has in mind.
Where the proceeds of loans made by member
banks are used for any industrial, agricultural,
or commercial purpose the notes, drafts, and
bills of exchange evidencing such loans are
eligible for rediscount with a Federal Reserve
Bank. Where the proceeds are used merely
for speculative purposes such notes are not
eligible. A member bank may, of course, discount the note of a farmer whether secured or
unsecured. Under the terms of the act the
nature of the collateral security accepted is not
the determining factor in reaching a conclusion
as to whether or not the note is eligible.
If the members of his association intend to
use the proceeds of loans secured by warehouse
receipts for agricultural, industrial, or commercial purposes, there would seem to be no difficulty about such notes being rediscounted
with a Federal Reserve Bank if they comply
with the regulations of the Federal Reserve
Board, If, however, they are used for the purpose of purchasing grain, with the view of holding it for a higher price, merely as a matter of
speculation, the Federal Reserve Banks would
not be authorized to rediscount such notes.
For your information I beg to advise that the
regulations of the Board which deal with this
subject are as follows:
"TheFederalReserveBoard, exorcisingits statutory rights to define the character of a note,
draft, or bill of exchange eligible for rediscount
at 11
aFederal Reserve Bank,hasdetcrmined that—
(a) It must be a note, draft, or bill of exchange the proceeds of which have been used
or are to be used in producing, purchasing, carrying, or marketing goods in one or more of the
steps of the process of production, manufacture,
or distribution.
"(b) It must not be a note, draft, or bill of
exchange, the proceeds of which have been used




or are to be used for permanent or fixed investments of any kind, such as land, buildings, or
machinery.
"(c) It must not be a note, draft, or bill of
exchange the proceeds of which have been
used or are to be used for investments of a
purely speculative character.
"(d) It may be secured by the pledge of
goods or collateral, provided it is otherwise
eligible.7'
APRIL 28,

1917.

Bonds Secured by Real Estate.
(To a Federal Reserve Bank.)

Your letter of April 24 was duly received,
and inasmuch as the matter referred to therein
is one which would properly come under the
jurisdiction of the Comptroller of the Currency,
the question was referred to that office. I now
quote below for your information a memorandum received by the Board from the Deputy
Comptroller of the Currency on the subject:
"The bonds referred to in the attached correspondence aggregate $1,200,000 and are
issued on three buildings made up of a hotel,
apartment house, and stores, valued by the
advertiser at $2,100,000. The owner of the
property values it at $2,500,000. These bonds
are issued by an individual on the security of
this real estate, and are therefore real estate
loans, subject to the provisions of section 24
of the Federal Reserve Act and to the limit
prescribed by section 5200, Revised Statutes.
If the owner's valuation of his property is correct, the bonds would come within the 50 per
cent requirement, but if the company advertising them for sale is correct, the total issue
of bonds exceed 50 per cent of the value of the
property and they would be unlawful investments for a national bank.
" I t is also noted that the bonds are dated
January 1, 1917, and that the first maturity
date is January 1, 1919, the maturities of portions of the issue running up to 1923. At this
time, therefore, none oi the bonds would be
lawful investments, as they all run for more
than one year and are secured by city property.
"In cases of this kind this office would advise
the bank that the bonds are loans subject to
section 24 of the Federal Reserve Act and also
section 5200, Revised Statutes, and as none of
them conform to section 24, relative to time
for which they may run, they would constitute
illegal investments and should not be taken."
MAY 10, 1917.

Surrender cf Stock by Liquidated Bank.
(To a Federal Reserve Bank.)

In reply to your letter cf May 12, 1917, I
wish to advise you that the Board has ruled on
several occasions that the adjustment of accounts incident to the repayment of stock subscriptions to a member bank which has either
liquidated or gone into the hands of a receiver
must be as of the date on which the bank went
into liquidation or was declared insolvent and
a receiver appointed.
The Federal Reserve Act provides that when
a member bank voluntarily liquidates, or when
it is declared insolvent and a receiver appointed, the stock held by it in the Federal
Reserve Bank must be surrendered for cancellation. A failure to comply with this provision of the law can not give to a member bank
any rights greater than those which would
inure to its benefit had it complied with the
terms of the law.
MAY 14, 1917.
Discount of Farmers' Paper.
(To a Member of Congress.)

I have your letter of the 2d instant in closing
telegram from Mr.
, which I have noted
and return to you herewith.
I presume that Mr.
is anxious to perfect some arrangement by which the Federal
Reserve Banks can discount notes for farmers
direct, without the intermediation of member
banks. The Federal Reserve Banks are authorized, under section 14 of the Federal Reserve Act, "under rules and regulations prescribed by the Federal Reserve Board, to purchase and sell in the open market, at home or
abroad, either from or to domestic or foreign
banks, fens, corporations, or individuals, cable
transfers and bankers7 acceptances and bills of
exchange of the kinds and maturities by this
act made eligible for rediscount, with or without the indorsement of a member bank."
No power is given, however, to the Board to
compel such operations on the part of Federal
Reserve Banks, which are allowed to exercise
their discretion.
MAY 3, 1917.
Indorsement on Bill of Exchange.
(To a Federal Reserve Bank.)

Referring to your letter of May 1, 1917, the
Federal Reserve Board is of the opinion that
an indorsement on a bill of exchange which
expressly exempts the indorser from any responsibility for the validity or genuineness of an
accompanying bill of lading or other paper or




457

FEDERAL BESBBVB BULLETIN.

JUNE 1, 1917.

for the quality, quantity, or delivery of goods
covered thereby, does not render the bill nonnegotiable or ineligible for purchase by a Federal Reserve Bank.
An indorsement of this character is not a
restrictive or qualified indorsement within the
meaning of the negotiable instruments law. It
passes complete legal title and makes indorser
liable on the instrument, just as if there were
no qualifications relative to accompanying
papers. In other words, the Board Tbelieves
that the provision in question is nothing but an
independent collateral statement denying liability on another separate and distinctcontract
and in no way relates to or affects the nature of
the indorsement or the indorsees liability on the
contract contained in the bill of exchange.
It is suggested, however, that even though
the provision in question does not affect tfte
validity of the bill of exchange it is superfluous in view of the provisions of section 36 of
the uniform bills of lading act passed by Congress and approved by the President on August
29, 1916, which provides:
"That a mortgagee or pledgee or other
holder of a bill for security who in good faith
demands or receives payment of the debt for
which such bill is security, whether from, a party
to a draft drawn for such debt or from any
other person, shall not be deemed by so doing
to represent or warrant the genuineness of such
bill or the quantity or quality of the goods
therein described."'
MAY 16, 1917.
Treasury Certificates and Bonds as Security for Rediscount.
(To an individual.)

Your letter of April 28, asking to be informed
if the Treasury certificates of indebtedness
and the bonds about to be issued by the Government will be accepted as security for rediscount in the Federal Reserve Banks, is received. The question of the eligibility of oblifations of the United States for rediscount at
'edoral Reserve Banks is covered by an amendment to the Federal Reserve Act, approved
September 7, 1916, as follows:
'Any Federal Reserve Bank may make advances to its member banks on tlieir promissory notes for a period not exceeding 15 days
at rates to be established by such Federal
Reserve Banks, subject to the review and determination of the Federal Reserve Board, provided such promissory notes are secured hj
* * * the deposit or pledge of bonds or
notes of the United States."
APRIL 30,

1917,

458

FEDERAL RESERVE BULLETIN.

JUNE 1.

1917.

LAW DEPARTMENT.
The following opinions of counsel have been raises this question whether Federal Reserve
authorized for publication by the Board since Banks are included in the inquiry submitted.
the last edition of the Bulletin :
The act, however, specifically refers to national
banks and member banks and could not reasonReserves Against Government Deposits.
Under the provisions of section 7 of the act approved ably be construed to repeal any of the proviApril 24, 1917, national banks and member banks are not sions of the Federal Reserve Act, which require
required to maintain reserves against Government deposits Federal Reserve Banks to maintain reserves
regardless of the source of the funds deposited. This section, however, does not apply to Federal Reserve Banks. against deposits.
Respectfully,
MAY 5, 1917.
M. C. ELLIOTT, Counsel.
SIR: Section 7 of the act approved April 24,
To Hon. W. P. G. HARDING,
1917, which is an act "to authorize an issue of
Governor Federal Reserve Board.
bonds to meet expenditures for the national security and defense, and for the purpose of Eligible Paper Secured by Real Estate Mortgage.
assisting in the prosecution of the war, to ex- A note, draft, or bill of exchange drawn for commercial
tend credit to foreign Governments, and for purposes and otherwise eligible for rediscount under the
other purposes/7 COB tains the following proviso: provisions of section 13 of the Federal Reserve Act is not
rendered ineligible merely because it is secured by a
Provided further. That the provisions of sec- mortgage on real estate.
tion fifty-one hundred and ninety-one of the
MAY 3, 1917.
Revised Statutes, as amended by the Federal
SIR: The question has been raised whether a
Reserve Act and the amendments thereof, with
reference to the reserves required to be kept by note, draft, or bill of exchange secured by a
national banking associations and other mem- mortgage on real estate is eligible for redisber banks of the Federal Reserve system, shall count by a Federal Reserve Bank.
not apply to deposits of public moneys by the
Section 13 of the Federal Reserve Act auUnited States in designated depositaries.
thorizes any Federal Reserve Bank to redisYou have asked whether, in the opinion of count for its member banks notes, drafts, or
this office, this proviso is intended to apply bills of exchange drawn for agricultural, indusonly to deposits of funds realized from the trial, or commercial purposes. If, therefore, a
sale of bonds authorized by this act or to all note, draft, or bill of exchange is tendered by a
Government deposits. There does not appear member bank for rediscount with its Federal
to be any ambiguity in the language used, Reserve Bank, and it appears that its proceeds
which in effect repeals all statutes which refer have been or are to be used for one of the purto reserves required to be maintained by poses above specified, it should be considered
national banking associations and other mem- as eligible, provided it conforms to the other
ber banks of the Federal Reserve System in so provisions of law and the regulations of the
far as such statutes relate to deposits of public Board. The fact that such a note, draft, or
moneys by the United States in designated bill of exchange is secured by a mortgage on
depositaries. In the opinion of this office, real estate does not of itself affect its eligibility.
This office lies previously advised the Board
therefore, national banks and member banks,
that, in its opinion, a note or bill which conunder existing laws, are not required to mainforms to the requirements of the law relating
tain reserves against any deposits made by the
to eligible commercial paper is not rendered
United States in designated depositaries, reineligible merely because it is secured by stocks
gardless of the source of the funds deposited. or bonds. The same principle applies to the
I understand that the Comptroller of the case under consideration.
Currency has already advised national banks
Respectfully,
to this effect.
M. C. ELLIOTT, Counsel.
It is not entirely clear from the letter of the
To Hon. W. P. G. HARDING,
governor of the Federal Reserve Bank who
Governor Federal Reserve Board.




JUNM 1,

Notes and Bills Drawn for the Purpose of Carrying or
Trading in Government Obligations.
Notes, drafts, and bills of exchange drawn for the purpose of carrying or trading in bonds or notes of the United
States and rediscounted uuder the provisions oi section 1.3
are eligible as collateral security for the issue of Federal
.Reserve notes.
MAY 31, 1917.

Sm: Section 16 of the Federal Reserve Act
provides that the collateral offered by Federal
Reserve Banks as security for the issue of
Federal Reserve notes shall be "notes, drafts,
bills of exchange, or acceptances rediscounted
under the provisions of section 13 of this act,"
etc.
If, therefore, a Federal Reserve Bank rediscounts for any member bank, as it is authorized to do under the provisions of section 13,
any notes, drafts, or bills of exchange drawn
for the purpose of carrying or trading in bonds
or notes of the United States, such notes,
drafts, or bills of exchange are clearly eligible
as collateral security for Federal Reserve notes.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. W. P. G. HARDING,

Governor Federal Reserve Board.
Taxability of Income from Investments in Liberty Bonds.

The following ruling has been made by the
Acting Commissioner of Internal Revenue to
the effect that the income from investments
in Liberty Bonds is exempt from the income
tax and from the excess-profits tax:
TREASURY DEPARTMENT,

Washington, May 26, 1917.
SIR: This office is in receipt of your letter of
the 9th instant, in which, you submit for consideration and ruling the following inquiry:
"If a national bank invests $200,000 in 3J
per cent bonds issued as part of the Liberty
Loan authorized by the recent act of Congress,
would it be exempt (a) from income, tax on the
37,000 derived from its investment in the
Liberty Loan; (5) from excess-profits tax on
the $7,000?"
In reply, you are informed that in view of
the following specific provision of the act under




459

FEDERAL RESERVE BULLETIN.

1917.

which these bonds are issued, namoly, the act
approved April 24, 1917:
"The principal and interest thereof wluill bo
payable in United States gold coin of the pros
cnt standard of value and shell be exempt both
as to principal and interest from all taxation,
except estate and inheritance taxes, imposed
by authority of the United States or its possessions, or by any State or local taxing
authority."
This office holds that the income derived by
way of interest on tlio Liberty Loan bonds is
exempt from the tax imposed by the in com otax law (Title I of the act of Sept. 8, 1916) and
the excoss-profits tax law (Title II of the act
of Mar. 3, 1917).
Section 4 of Titlo I of the act of September
8, 1916, specifically exempts from liability to
the tax thereby imposed: *
"interest upon the obligations of a State or any
political subdivision thereof or^.upon the obligations of the United States or its possessions."
Section 203 of the excess-profits tax law provides:
"that the tax herein imposed on corporations
and partnerships shall be computed upon the
basis of net income shown by their income tax
returns," etc.
The income from United States bonds being
excluded from "the net income as shown by
their income-tax returns" it necessarily follows
that this income is excluded from the income for
the purpose of excess-profits tax. These bonds,
being obligations of the United States, the
income derived therefrom is exempt from both
forms of taxation hereinbefore referred to,
while under the act authorizing the issuing of
these bonds, they are exempt as to both principal and interest from "all taxation except estate
or inheritance taxes."
Therefore, this office holds that in the case
you submit, the $7,000 derived from an investment of $200,000 in Liberty Loan bonds would
be exempt from both the income and excess
profits tax.
Respectfully,
DAVID A. GATES,

Acting Commissioner.

460

FEDERAL EESEEVE BULLETIN".

JUNE 1,1917.

SUMMARY OF BUSINESS CONDITIONS MAY 23, 1917.
! District No. 1Boston.
General business
• Hesitating
Crops:
I
Condition
! Much planting
Outlook
Industries of the dis- Busy
trict.

District No. 2—
New York.

Money rates

Good

Steady

Fair
Good
Very busy

Improved
Good
Active in all lines.

Conflicting.

Labor conditions

Very well
ployed.

Outlook..
Remarks.

Uncertain

em-

District No. 7Chicago.
General business..
Crops:
Condition
Outlook
Industries of the district.
Construction, building
anu engineering.
Foreign trade...,
Bank clearings..
Money rates,'...

Decrease
compared with year
ago.
Very large

District No. &St. Louis.

District No. 9—
Minneapolis.

Fairly active...

Good..

Winter wheat poor
Good for spring
grains.
Operating satisfactorily.
Decrease

Fair
.do..
Favorable..
Improved.
Conservatively ac- Active
tive.
Somewhat retardSlight 'Jeerease
ed by prices of
material a n d
labor.

Good..

j Increase
Increased
•
do
Slight hardening.
Railroad, post office,
Somewhat smaller
Increased
and other receipts, j
Labor conditions
; Shortage of labor.. Satisfactory
Fair

Outlook..
Remarks.




Increasing
Strong..,'
Decrease.

Satisfactory
! Good
Waiting attitude C r o p s , except
in many lines;
wheat,
good.
underlying conBusiness more
ditions sound.
conservative.

Good

District No. 6—
Atlanta.

Conditions sound.. Good.

Season little l a t e . .
Normal
Active; labor in
continued demand.
Retarded by un- Building restricted
seasonable
by high cost of
labor and supweather.
plies.
Exports in excess
of last year.
Increased.
Increase

Decrease
compared with previous month; increase over last
year.
Firm; slight easing Increasing
Firm and higher., 5 to 6 per cent
tendency.
Railroad, heavy; Decreasing com- Increased
Normal; railroad
pared with pre- !
expenses showpostal, increased.
vious month.
j
increase.
Good; labor scarce. Labor well em- } Fair
Negro
laborers
ployed.
!
leaving for higher wages elsewhere.
Encouraging
Favorable
I Favorable
Good....
| Some uncertainty Some irregularity,
i and hesitancy in
owing to specific
I big business as
conditions; gento operations of
erally satisfacI draft and war tory.
revenue measures.
month.
Steady at figure
much over last
year.

; Increasing.

Railroad, post office,
and other receipts.

District No, 5—
Richmond.

Late season
Larger acreage.
Active

Ij Small change ! Slightly below last
| Increased.

District No. 4—
Cleveland.

Active

Construction, building, Good, but not as j Building activity
and engineering.
| large as lost year, j decreasing.

Jb'oreJgn trade
Bank clearings

District No. 3—
Philadelphia.

District No. 10—
Kansas City.

District No. 11—
Dallas.

Good..

Satisfactory

Do.
Encouraging.
Operating full time.
Slow.
Small.
Increasing.

Slight increase.
Good.
Growing worse.

Bright.

District No. 12—
San Francisco.
Active.

Generally good
Good.
Improved
Increased acreage. Promising
B/unning full time. Unusually active.. Very active.
Slackening apparent.
Increase
Stiffening
Good volume

Building operations active.

Increase.

Do,
Do,
Increase
No change in rates; Firmer.
,
easy.
Increasing.
Increase

High prices caus- Conditions satisfactory.
ing unrest; general shortage.
Promising
Promising
Will be some uncertainty in business until Government plans
are fully known.

Fully employed;
some shortage.
Favorable.
Great activity and
high prices seem
in prospect.

FEDERAL RESERVE BULLETIN.

JOKB 1, 1017.

461

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

So many conflicting factors are entering into
the situation that business men are uncertain
as to their proper course. Raw material prices
are high and in many cases are increasing each
week. Wages have risen, labor is scarce, and
it is expected that the operation of the selective draft will cause an even greater scarcity,
although women are already being used in some
places to take the place of men.
A wave of economy has caused consumers to
retrench, at least until something more definite
as to the future course of wages and commodity
prices is disclosed. In addition, it is thought
many are economizing to invest in the Liberty
Loan or to pay for supplies of one kind or
another which they are hoarding. The season
has been late and continued cold weather has
caused a postponement of spring buying. How
long this period of hesitation will last it is impossible to estimate.
The coal situation is very bad, both in anthracite and bituminous. The anthracite shortage
is caused by a lack of supply, while in bituminous it is due to the largely increased demands
of mills and factories. Any exportation of
bituminous coal and reduction of the New
England supply would cause a very serious
situation. Manufacturers in their anxiety to
be sure of a supply have bid prices up, and these
in comparison with former years are now very
high.
Prices for wool continue to increase, and it is
felt that unless the English Government releases some wool from Australia the supply for
domestic and Government needs will not be
sufficient, Negotiations for a release of Aus-




tralian wool have been in progress for some
time past, but lack of shipping facilities will be
a serious problem to the .importer. Woolen
and worsted mills, especially the former, continue very busy. Domestic business is being
"sidetracked" as far as possible in order that
Government orders may be given the preference.
The boot and shoe industry is feeling the
effects of the large business of last year. At
that time retailers bought YQTJ heavily, anticipating rising prices and a large demand. Many
dealers have found it hard to carry a large stock
with their limited capital. With the present
economy movement, they are more inclined to
reduce their stock, as they can do at a good
profit, than to place additional orders. For
this reason manufacturers are finding new
business rather unsatisfactory. Business in
leather has been very quiet, although prices
have remained firm, and with Government
orders to be placed these will probably continue so.
The dry goods business has been adversely
affected by the late spring, continued cold
weather, and the unsettlement caused by our
entering the war. However, it is expected
that with the coining of more seasonable
weather the demand for summer merchandise
will be good.
Fine cotton cloth mills are feeling a reaction,
and the demand for goods for future delivery
is light. Manufacturers have plenty of advance orders and expect good business again
before they reach the end of those now in hand,
although possibly the need of econony may restrict business in high-priced goods turning it
toward the cheaper lines. Mills are running
as nearly full as they can with the supply of
labor, and the news from Washington that the
first draft of men for the Army would not come
until September was very welcome. The Government orders placed in Fall River for lowcount cloths has caused activity and strength
in that market with a slight advance in prices.
Money is much firmer than a month ago with
banks restricting their business to a large ex-

462

FEDERAL RESERVE BULLETIN.

tent to their own people, although, during the
past few days the tone has been easier. Call
money is 4^ per cent, with exceptions at 5 per
cent. Time money 5 per cent for practically
all dates, with the best grade of commercial
paper quoted at that rate; town notes, 4 | per
cent upward for fall maturities; bankers' acceptances, 3 | per cent upward.
Loans and discounts on May 19, 1917,
amounted to $457,051,000, as compared with
$463,184,000 last month and $416,934,000 on
May 20, 1916. Deposits on May 19, 1917, totaled $351,006,000, as compared with $364,406,000 on April 14, 1917, and $339,196,000 on
May 20, 1916. The amount "Due to banks77
on May 19 was §137,273,000, as compared with
$147,630,000 on April 14. The excess reserve
of these banks decreased from $40,428,000 on
April 14 to $22,662,000 on May 19.
Exchanges of the Boston Clearing House for
the week ending May 19, 1917, were $228,733,906, compared with $210,413,870 for the
corresponding week last year, and $227,048,842
for the week ending April 14, 1917.
Building and engineering operations in New
England from January 1 to May 16, 1917,
amounted to $69,073,000, as compared with
$72,393,000 for the corresponding period of
1916, the highest previous year recorded.
Imports to the port of Boston for April, 1917,
amounted to $23,864,180, as compared with
$24,816,006 for March, 1917, and $23,683,251
for April, 1916.
The receipts of the Boston post office for
April, 1917, show an increase of $35,143.13, or
about 5 per cent more than April, 1916. For
the first 15 days of May, 1917, receipts were
about 4 per cent, or $16,561.20 more than for
the corresponding period last year.
Boston & Maine Railroad reports net operating income, after taxes, for March, 1917, as
$724,514, as compared with $1,089,104 for the
corresponding month of 1916. New York,
New Haven & Hartford Railroad reports net
operating income, after taxes, for March, 1917,
as $1,647,490, as compared with $1,338,120 for
the same month, last year.




JUNE 1, 1917.

DISTRICT NO, 2—NEW YORK.

The aggregate of business activity in this
district continues at a high level. Readjustments incident to the transition to war footing
are stimulating activity and production in
staple and basic lines, but have curtailed to a
marked extent the retail sales of commodities
not the object of pressing day-to-day demand.
The public's purchases of clothing, dry goods,
silks, jewelry, and articles of like nature have
decreased very materially since the declaration
of war, due primarily to the practice of economy, although the lateness of the season has
been a contributing factor. Business in men's
and women's clothing and dry goods is perhaps as much disturbed as in any line, being
hampered by uncertainties as to the course of
styles, supply and price of goods, and probable
buying demand during the next few months,
as well as by rising prices and Government
demand.
Though manufacturers in the textile industries report slightly decreased sales to the
trade, orders are in most cases being received, as
fast as they can be handled. Woolen mills
have heavy demand for fall goods and are running to capacity, Government orders making
up an important part of the business. Cotton
mills have sold their product for several months
ahead and have received, large Government
orders for duck, khaki, and heavy cotton goods.
Demand for burlaps and jute is active with
prices firm, difficulties of ocean transportation
hindering the importation of material from
India and Great Britain.
The volume of business in the hide and
leather trade has decreased slightly, some hesitation being observed in buying demand.
Boots and shoes are selling in slightly smaller
volume, apparently because of high prices, but
manufacturers have orders covering their
output into the early winter.
Drugs and chemicals have commanded increasing prices, and though sales to retailors
have been slightly reduced, the total volume of
business clone has increased. Conditions in the
dyes tuffs industry have improved both as to

.TUNE 1,

1017.

FEDERAL RESERVE BULLETIN.

quantity and quality of output. Manufacturers of rubber tires and other rubber products
report continued heavy buying demand and
higher manufacturing costs due to increased
cost of labor, cotton fabrics and chemicals.
The volume of business done by manufacturers of machinery represents maximum
capacity of output with prices rising. Buying
is very largely intended to provide equipment
for turning out supplies for the Government.
Sales of pleasure automobiles have decreased,
but the demand for motor trucks continues
normal. Orders for cars and other railway
equipment have been small. The volume of
"business in general railway supplies, such as
castings, forgings, bar iron, wheels, and other
articles for repairs, is fair.
Buying demand for metals such as lead,
brass, zinc, and copper has been slightly less
active, a larger proportion of the output going
to domestic buyers. The production of zinc
or spelter is near the highest point in the history
of the industry and prices are now much lower
than during 1916, though still about 50 per
cent above those ruling before the war.
Great activity in the steel trade is reflected by
pig-iron prices now about twice those of a year
ago, and by the increase of 471,439 tons in
unfilled orders of the United States Steel Corporation, between March 31 and April 30, the
amount on the latter date being 12,183,083
tons, or about 80 per cent of the total annual
capacity of the plants. Pig-iron production for
April was greater than in any previous month
except October, 1916.
Activity in building trades, hampered by
scarcity and high prices of labor and materials,
is declining. Building permits in greater New
York for April were only $8,036,709, as compared with $14,786,078 a year ago.
Collections continue good for the most part,
but reports indicate that there are now several
lines in which they are not as good as a month,
ago.
Merchandise imports at New York for April
were approximately $21,000,000 less than those
for March, though still over $11,000,000 greater
than those for April, 1916. Some exporters




463

report a decrease in business for April, due to
decreased demand by foreign customers, to
difficulties in obtaining goods for export, and to
lack of ocean tonnage and to high rates for
freight and insurance, but total exports through
the port were slightly greater than those for
March.
Provisions have continued to increase in
price, though somewhat less rapidly than immediately following the declaration of wax.
Wholesale grocers are doing a larger volume of
business than last year, but are seeking to dissuade patrons from buying more than actual
immediate requirements, the demand being
mostly for staples such as sugar, flour, cereals,
dried and canned vegetables, and dried and
canned fruit. Coal dealers have orders larger
than are usual at this season, and have had to
pay premiums for prompt delivery.
Letters received from bankers in all parts of
the district show the existence of keen and
active interest in the problem of increasing production of food crops, and indicate that despite
shortage of labor and high price of seed the
acreage of land planted is much larger than
last year. Cool, damp weather prevailed up
to the middle of May and delayed planting in
some sections, but warmer weather has come
and the delay was not great enough to be
dangerous.
The freight traffic situation has continued to
improve, and reports of freight movements
indicate effective use of railway equipment.
That the situation is still serious, however, is
shown by increase in net shortage of freight
cars from 130,082 on March 1 to 143,059 on
April 1, and by the continuance of embargoes
on shipments.
Borrowing operations of American industrial
and railroad corporations for April show a
heavy decrease, the total being $130,141,500
as compared with $312,115,800 for March and
with $221,598,500 for April last year.
The market for stocks and bonds during the
last week of April and early part of May was
weak, due apparently to preparations for subscriptions to forthcoming issues of Government
bonds, and sales were lighter than for the same

464

FEDERAL EESEBVE BULLETIN.

period a year ago. Prices showed a marked
downward trend, reaching the level of October,
1915, but reacted about the middle of May on
the announcement of the Government's advance of $100,000,000 to the Russian Government. There has been a distinct strengthening
of security prices on the London Stock Exchange.
Call money on April 25, the date of the Government's issue of 3 per cent Treasury certificates, touched 4 per cent, dropping back next
day. Again, from May 1 to May 7, the ruling
rate was from 3 to 4 per cent with a high of 4J
per cent on May 3. Imports of gold and disbursements b}^ the Government have since
brought about an easing tendency, and rates
have been steady at moderate levels, the Government's arrangements for redepositing with
banks funds received on account of loans preventing undue or serious disturbance.
Excess reserves of New York Clearing House
banks fell from $111,642,220 on April 28 to
$90,478,070 on May 5, but rose again to $147,199,000 on May 12, and on May 17 stood at
$146,754,420.
DISTRICT NO. 3—PHILADELPHIA.

Manufacturing plants in this district have
continued to operate as nearly to capacity as
the supply of labor and materials would permit
since the entrance of the United States into the
war. A slowing down is noticeable, however,
in retail trade and among the jobbers of wearing apparel of all kinds, due to extremely high
prices, unseasonable weather, the economy
campaign, and the fact that most consumers
are pretty well supplied. Some of the department stores have been compelled to reduce
their staffs of employees because of curtailed
sales.
Business men are not greatly perturbed over
the war situation, although they fully realize
its seriousness. Demand for iron and steel,
arms and munitions, food and clothing, ships,
and other products necessary for the maintenance of armies and the transportation of supplies must continue. When domestic demand
becomes lighter in such lines as wearing apparel,




JUNE 1,1917.

it is more than offset by the Government requirements. The mills are kept running and
labor remains fully employed. The sufferers
from the change are the wholesale and retail
distributing houses.
Cotton.—Cotton trade has been quiet during
the past month, due to the economy movement
and the high prices of cotton goods. Jobbers
and retailers are just now beginning to feel the
full effect of high-priced cotton. The rise has
practically all been within the past year, and
until recently goods still in the process of
manufacture and distribution wore made from
lower-priced yarns, of which some manufacturers had considerable quantities on hand at
the time the rise began. Practically all of
those stocks have now been consumed, so the
manufacturer is now offering to the retailer and
jobber goods for fall delivery at prices based
on the present yarn values. It is doubtful
whether the retailer will buy in any quantity
at such prices, and if he does, it is doubtful
whether the goods can be passed on to the consumer, whose purchasing power has been curtailed by the high prices of foodstuffs. Local
dealers regard the situation with confidence,
however, and believe that the manufacturer
who is not buying needed yarns now will pay
even a higher price for them at a later date.
Crops.—The increase of our food supply continues to be a most important question throughout the district. Unseasonable weather has
retarded the farmer in his spring work and has
checked the growth of crops. Weather conditions are better now than they were during the
early spring. The Pennsylvania State Department of Agriculture estimated the condition of
winter wheat to be 90 per cent of normal on
April 1, and rye 92 per cent. It is estimated
that the potato acreage in Pennsylvania is 108
per cent in comparison to the acreage last year.
In New Jersey, also, a large acreage of potatoes
has been planted. Efforts are being made to
furnish the farmer with the labor necessary to
obtain maximum production. Schools and colleges are dismissing students who agree to work
on the farms. Local committees in many places
are working to see that every available acre

JUNE 1, 1917.

EEDERAL BESEBVE BULLETIN.

465

is used for some productive purpose. Such that there will be a paper shortage by midsumefforts will undoubtedly be helpful as a means mer. Advancing prices are expected. The
of bringing production as nearly to normal as margin of profit has been dwindling because of
possible. It is too late to result in increased increased expenses in all directions.
Textiles.—Manufacturers of hosiery, underacreage in wheat, grains, and other staple products, but the acreage planted will receive bet- wear, and men's wear of all kinds are busy on
ter care and will, yield more because of the extra Government orders. In other branches of the
help placed on the farms. More vegetables will textile trade, business is quiet. Manufacturers
be raised also, and fruit orchards, which have of carpets, towels, lace curtains, and tapestries
been neglected by many farmers in the past, do not have enough orders to warrant more
will now be well cared for; all of which is com- than 50 per cent operation. Underwear and
mendable as a tendency toward intensive hosiery manufacturers are well sold up on domestic and Government business. Stocks in
farming.
Groceries.—Business is good in the wholesale the jobbers' hands arc very low, but it is
grocery trade; there is a good demand from the thought that the retailers have larger supplies
retailer for goods to satisfy the abnormal de- on hand than is usual at this time of the year.
mands of the consumers who are storing gro- Cool weather is retarding the movement of
ceries. There is a scarcity in canned goods and seasonable goods to the consumer. Silk manusome other staples, but for the most part there facturers are busy filling orders but they are
would be plenty of goods to go around if buy- not now receiving many new orders from jobing were restricted to real needs. There is fear bers and retailers whose trade has been hurt
among some of the local houses that heavy by the advocacy of economy.
losses will be sustained on goods furnished the
Tobacco.—Cold weather is seriously retarding
Government. They have been notified to de- the Lancaster County tobacco crop. The seed
liver certain goods at prices later to be deter- beds were planted two weeks later than usual
mined and if the Government bases its prices and the crop can not be planted now before the
on original production costs instead of the cost middle of June. Growers are not contracting
to the wholesaler when he bought the goods, this year's crop but they expect the buying to
heavy losses will result.
begin around 15 or 16 cents, the prices at
Leather.—Vast quantities of sole leather are which most of last year's crop was sold.
being purchased by the Government and reWool.—Trading in wool is largely of a specuquirements promise to continue large. There lative nature, prices being bid up at a very
is considerable export demand but it is not an rapid rate. Some manufacturers who must
important factor in the business just now. have wool to fill present needs are in the marDomestic trade in belting leather is very good ket and have to buy regardless of price, but
but demand from shoe manufacturers is very they are not buying ahead at the prevaillight. The economy movement has particu- ing figures. Supplies of wool are very light,
larly affected manufacturers of high grade wo- considering the needs of the Government for
men's and misses' shoes. They have very little clothing, blankets, etc. Manufacturers of all
to do at present; the retailers are well stocked kinds of woolen goods are very busy. Governand the goods are not moving from the shelves ment business is of course given precedence
as fast as they should.
and has caused either the cancellation or long
Paper.—The outlook for dealers in paper is postponement of deliveries of domestic orders
disquieting because of difficulty in obtaining in many cases.
raw materials. The small cut of wood in CanMoney.—Deposits of Philadelphia banks
ada last winter, due to scarcity of labor and have declined approximately $30,000,000 dursevere weather, can not be corrected until next ing the past month while surplus reserves have
winter, and it is the opinion of large dealers decreased $20,000,000. Money rates have stif-




466

FEDERAL RESERVE BULLETIN.

fened considerably, call money advancingjfrom
3-J- to 4 per cent. Commercial paper is not now
being bought below 5 per cent. Considerable
rediscounting with the Federal Reserve Bank
is being done, especially by the Philadelphia
banks.
Financial indicators.
Per cent increase
or decrease compared with—
May 15, 1917.

Philadelphia banks:
.Loans
Deposits
Surplus reserve
Federal Reserve Bank:
Discounts and collateral loans.
Per cent cash reserve
90-day d iseoimt rato.per cent..
Commercial paper
per cent..

S566,933,000

058,866,000
17,303; 000
8,637,000
51
4
5

April, 1917.
Bank clearings:
in Philadelphia
Elsewhere in district

i
' SI, 410,313,000
I
101,560,000

Total.

-1-688
- 22
()

2 44

10.7
6.8
51

+1,200
8
C1)
*3£

Previous Year ago.
month.

- 3.9
+ 4.4
- 3.4

+41
+12.8

+3

-1-43
-1-44.2

+13
— 2
-19.3

846,000

-

7.2

+ 8.5

56

-

8

-16

1,511,873,000

Port of Philadelphia:
Exports
Imports
Building permits in Philadelphia.
Post-olRce receipts in Philadelphia
".
Commercial failures in district
(per Bradstreet's)

+ 2.9 j +
~ 4.3 I +
- 53 i -

39,889,000
11,103,000
5,0.10,000

i No change.

2

+38.5

Actual.

DISTRICT NO. 4—CLEVELAND.

General conditions in this district, as reported for the preceding month, are favorable
in most lines of activity. There have been no
unusual developments tending to make an unfavorable impression. In some branches hesitancy and uncertainty continue to some extent, due largely to local problems, the outcome
of the present high rate of production and
activity in industry, which have been present
for some time. The transportation situation
has somewhat improved.
Liberty Loan.—That this district will exceed
its share in subscribing for the Liberty Loan is
now apparent. The organization of the campaign for publicity and distribution is already
far enough advanced to indicate a widespread
general response by the people. Much educa-




JUNE 1,1917,

tional work is, of course, necessary; but the
many men who make up the volunteer organization are fully alive to the magnitude of the
task, and we feel most hopeful of the necessary
public response.
Agriculture.—The various organizations advocating increased food production and economies in the utilization of foodstuffs have done
excellent work, and results are noticeable.
The reports indicate that there is approximately 25 to 30 per cent more plowed area in
the country districts than at any previous
time; and, with a number of agencies providing men for farm work, the production of
staple articles will be very much increased in
this district, provided, of course, seasonable
weather obtains. The long, cold winter was
not broken until a week ago, but with only
one week of spring the conditions have greatly
improved and the prospects are much better.
The movement for city gardening has had a
decided effect, and all of the cities, towns,
and villages report a great number of garden
plots. It is, of course, to be expected that
the results obtained will not be proportionate
to the work and material employed, and that,
to a large extent, the inexperienced and inefficient laborer will not produce crops commensurate with his outlay; but there can be
no question that the large amount of work
being expended will later result in a very considerably lessoned demand for vegetables and
other foodstuffs in the cities.
One important farming region reports that
farm lands are now selling higher than everknown, and that farmers have been able to
liquidate materially owing to good prices for
stock and farm products during the past eight
months.
Industries.—Practically all plants and factories report "business as usual." In the iron
and steel trade, demand and prices are maintained at the highest point ever reached.
Lack of available transportation, both for raw
materials and finished products (although this
condition is now improved), is curtailing operations to some extent and in some localities
inadequacy of labor has a detrimental effect.

Improvements are noted in methods of production, which offset largely the labor shortage,
and the reports indicate proposed plant extensions, especially for plates for shipbuilding.
Ice in the upper lake regions has retarded
the movement of ore and coal, but the reports
show that this avenue of transportation is beginning to be used, and another record season
is anticipated.
In the brick, fireproofing, clay products, and
pottery lines there is some hesitancy, and perhaps a falling off in business, due largely to
the labor situation and greatly increased cost
to the consumer, which causes a lessened
demand.
The rubber industry is working to full capacity, with every indication of continued
activity.
Automobile factories producing both pleasure cars and trucks are giving renewed effort
to the manufacturing of trucks, and there has
been a general tendency to substantial increases in price of cars by reason of increased
cost of materials and fabrication.
There can be no question that the industrial
situation generally in this district is strong and
that the outlook is as good as could well be
expected.
Building.—There are inadequate housing facilities in all of the larger cities and industrial
centers. Efforts are being made to improve
the situation, but the high cost of labor and
material is a very deterrent factor. The decrease in number of permits and valuations in
all of the cities except two, as indicated in the
following table, is due to the late spring:
Permits
issued.

April,
1917.

April
1916.

885 499!$2,431,21.3!$l,340,
Akron, Ohio
l,280j 1,7091 1,039,7801 1,156,165
Cincinnati, Ohio
l,303i 1.533' 2,441,500! 2,625,055
Cleveland; Ohio.
'184! '1471 215,204! 259,370
Dayton, Ohio...
324;
393i 532,0001 1,166,840
Columbus, Ohio.
200!
689,099! 282,429
230;
Erie, Pa
413 482| 1,094,1091 1,250,762
Pittsburgh, P a . .
611 1,176,969: 1,188,467
506
Toledo, Ohio
1721 349,675 • 373,001
Youngstown, Ohio.




5,308j 5,746 9,969,549; 9,642,948
1

Decrease.

Banking and investments.—Banking conditions are excellent. There has been an increased demand in the country for implements and planting, and. the cities have also
experienced some increased demand, though,
in general, the market is easy. Investment
conditions are entirely in a waiting attitude,
and the markets are quiet. Money rates are
firm to higher, time commercial paper now being offered at J per cent to 1 per cent advance.
So-called "call loans" in some parts of this
district are being discouraged by bankers, and
speculative commitments have been largely
avoided.
The following table indicates increases in
bank clearings over the corresponding period
of the preceding year in nine of the principal
cities:
April 16 to May 15,
inclusive.
Increase.

Per cent
increase.

1917

1916

Akron, Ohio
Cincinnati, Ohio..
Cleveland, Ohio..
Dayton, Ohio
Columbus, Ohio..
Erie, Pa
Pittsburgh. P a . . .
Toledo, Ohio
Youngstown, Ohio

823,046,000
166,942,492
294,297,527
3,912,391
43,500,400
7,915,301
333,273,297
48,520,795
13,733,934

$15,316,000
134,781,300
102,698.522
3,503; 919
37,006,400
5,823,813
272,054,897
38,054.653
10,390,343

87,730,000
32,161,192
131,599,006
408,472
6,494,000
2,091,487
61,218,401
10,400.141
3,343,591

50.5
23.9
80.8
11.7
17.5
35.9
22.5
27.5
32.2

Total

935,202,137

679,089,847

255,512,290

37.6

The following table indicates the comparison
of the post-office receipts in the nine principal
cities for April:

Akron, Ohio
Cincinnati, Ohio
Cleveland, Ohio...
Dayton, Ohio
Columbus, Ohio...,
Erie, Pa
Pittsburgh, Pa....
Toledo, Ohio
Youngstown, Ohio

Valuations.

April, April.
1917. 1916.

Total.

467

FEDERAL BESEEVE BULLETIN.

JUNE 3,1917.

Total..

862,624
267,608
332,915
65,676
110,991
22,891
364,744
94,850
26,569

S85.271
278,176
355'. 899
60,213
116,661
24,111
348,219
106,681
26,679
1,401,940

10,509
22,984
i 5,433
5,670
1.220
i 16i525
11.830
110

36.3
3.9
6.9
18.3
5.1
5.3
i 4.5
12.5
.4

1,3 ;,868 | 53,073

3.9

* Decrease.

3.5

Mercantile lines.—The demand throughout
this district for nonessential articles has noticeably decreased, and the activities of the wholesaler and retailer both have been lessened to a

468

FEDERAL KESEEVE BULLETIN.

marked extent. Whether this condition is
due to unseasonable weather or to the practice
of economy is not established. The movement
of necessities is at its highest, and the increased
cost probably continues the total of values of
trade at high points.
The percentage of slow accounts has increased during the period covered by this report
and collections generally are not as good as a
month ago.
Labor.—Labor conditions continue as good
as could be expected in general, although in
some locations there have been evidences of
unrest, and it is apparent that the selective
service act will further deplete the supply.
Voluntary increases of salaries and wages by
employers have extended to practically all
forces except clerical, and even in the clerical
lines the supply is inadequate for the needs
of the district at advanced salaries.
DISTRICT NO. 5—RICHMOND.

Liberty Loan.—Our financial preparation for
war, including the assistance to be extended
directly to our allies, has naturally been the
overshadowing factor during the past month.
The uncertainties naturally attending this
unexpected situation have produced some
hesitancy in every business and vocation.
This district has for years been steadily
growing in wealth and prosperity, particularly
in recent years, but the field of development
has been so wide and the demand so great
that its resources have gone back to the soil—
have gone into agricultural improvements, or
additions to manufacturing and other plants.
The result has been that while the aggregate
of increasing wealth has been steady and rapid,
the demand for capital has taxed the resources
of its banks and drawn largely upon wealthier
sections of the country. The liquid wealth
of the district is therefore relatively limited.
There is a widespread and patriotic effort and
desire in the district to meet liberally the
national call for financing. The district is
being organized in every direction.
General conditions.—General business conditions are regarded as sound, but there is
some slowing up.




JUNJB 1,1917.

Jobbers in some lines report that purchases
are not being freely made, and there is some
complaint of slow collections. Furniture and
hardware dealers, including general dealers in
building supplies, report less activity. Dealers
in tobacco report a good volume of trade.
Lumber has improved considerably in price,
but this is offset by the reduced output, which
is curtailed by labor and shipping conditions.
Transportation difficulties, both in securing materials and moving manufactured products, and
the difficulty many manufacturing plants are
encountering in securing an adequate supply of
coal even at present high prices, are important
factors in the situation. One jobber calls attention to the fact that his tonnage was 25 to 33J
per cent less a year ago, but high prices have
increased his capital requirements and his risks,
resulting in a decreased percentage of profits.
Barildng.—Unusual demands in increasing
volume are coming from farmers for agricultural purposes, owing to universal efforts for a
maximum production, accelerated by the high
cost of supplies, fertilizers, labor, and general
expenses. Although there has been considerable shrinkage in deposits and an average increase in rates of at least 1 per cent in the larger
centers of the district, all reasonable demands
are being promptly met by the banks, either
from their own resources or through rediscounts principally with the Federal Reserve
Bank.
Clearings, exports, postal receipts and railroads.—Bank clearings show an increase of 16
per cent. Exports continue to show an increase
notwithstanding freight embargoes. Postal
receipts show a slight increase. Railroad
receipts show an increase in gross, but are
seriously affected by the increased cost of
operation. The situation of the railroads is
regarded by many as perhaps the most serious
domestic question confronting us. Railroad
borrowings have about reached the limits of
credit from every point of view, there is general
complaint with regard to transportation conditions, and business which the roads are unable
to handle is knocking at their doors. It would
seem a self-evident proposition that the roads

JUNB 1, 1917.

FEDERAL RESERVE BULLETIN.

can only meet this situation and render the efficient service, which is imperatively demanded
by shippers and our people generally, by an
allowance of increased rates. Inquiry in the
district indicates a recognition of this necessity
and a willingness on the part of manufacturers
and others to an increase in rates, in order that
they may secure efficient shipping facilities.
It is recognized that the ultimate consumer
"pays the freight/' and that reasonable prosperity can only be attained and maintained by
a maximum, production, the prompt transportation of which from the producer and manufacturer to the consumer is an essential function.
There is a widespread demand for the necessary
increase of rates and the prompt solution of the
transportation question.
Farming.—The season generally is backward,
and in striking contrast with the wet season of
last year, there has been some lack of moisture.
Strenuous efforts are being made to get a full
crop, food products receiving more widespread
attention, and the yield of garden products
promises to be beyond anything ever before
attained. Grain, while more widely planted,
is below the average condition; the same may
be said of cotton, the acreage of which is estimated to be about the same as last year. Reports as to acreage in tobacco vary, but the
average would probably be about the same as
last season. Agricultural implements are scarce
and deliveries are behind. The peanut crop of
the past season was very profitable. The
farmers' supply has been disposed of, leaving
only limited stocks in the hands of cleaners and
jobbers. Fruit prospects, including berries and
peaches, are favorable. The production of
truck crops along the seaboard, particularly
potatoes, has been unusually heavy and profitable. Many banks are advertising to help
especially those who are planting food crops.
Increased facilities for canning excess vegetable
crops are quite extensive and are an important
step in food conservation.
Milling.—Cotton mills continue to operate on
full time, are paying increased wages, offering
bonuses for efficiency, and continuing to obtain
good profits. Woolen mills, on the contrary,




469

report business somewhat slow and conditions
unsatisfactory.
Labor.—There has been some disorganization
on account of volunteering for Government
service and widespread deportation of negro
laborers from the district, induced to leave by
high wages in the northern States, it being
estimated that as many as 75,000 to 100,000
have left the district in the last few months.
The high price of food has borne heavily on the
poorer classes and has been an important factor
in this situation.
DISTRICT NO. 6—ATLANTA.

Business conditions in the Sixth Federal
Reserve District were not as good in May as
during the months of March and April. The
high prices of food and the agitation in connection with the war had a weakening effect.
Interest in the Liberty bond issue is growing
more earnest. The Federal Reserve Bank of
Atlanta has inaugurated a campaign of subscription and education with.a central Liberty
Loan Committee composed of the officers of the
bank and a number of business men of exceptional ability. Each State in the district is in
charge of a local State chairman with a compact organization extending into every line of
commercial, agricultural, and industrial fields.
Five hundred of the most prominent men of
the city of Atlanta attended the first public
meeting. Bankers, bond houses, large corporations, and many individuals have volunteered
their services in connection with the sale of
Liberty bonds, and are devoting their advertising space to the cause. The Southern Bell
Telephone & Telegraph Co. have placed at the
disposal of the Liberty Loan Committee their
contracted advertising space in 60 daily newspapers in 26 cities in the district without cost.
With a clearer understanding of the advantages
of owning a Liberty Loan bond, it is thought
that the number of individual subscribers will
be large.
The general agricultural conditions are very
encouraging, and this is especially true of foodstuffs. With reasonably favorable seasons, the
corn crop will be the largest ever produced and

470

FEDERAL RESERVE BULLETIN.

reports indicate an increase of from 100 per
cent to 300 per cent in general foodstuffs, such
as potatoes, peanuts, velvet beans, soy beans,
peas, sweet potatoes, etc. Also there is a decided increase in sorghum for sirup making and
large increases in all forage and feed crops.
Care is being taken to conserve breeding animals, especially cattle and hogs, though in a
few localities high prices have resulted in the
farmer selling animals that should have been
retained as breeders. There will be an exceedingly large production of garden truck and
movements are on foot all over the district to
conserve the supply. In almost every county
there is an organization preparing to take care
of the marketing of and canning of foodstuffs.
In numerous places civic organizations have
guaranteed the farmer a minimum price for
his products and are making arrangements for
sales warehouses for the disposal of his products. In this connection the Southern Kailway and other railways in the district are
making a special effort to collect information
as to the products and bring the seller and
producer in close touch. They are doing this
through personal representatives, public meetings, and bulletins, and in addition are conducting an intensive campaign on the best
methods of soil preparation, planting, and
cultivation of food crops.
The Florida Citrus Fruit Exchange, having
a large and complete selling force in the North,
has offered its services to the Government for
the handling of food products, and has just
notified its four or five thousand members in
Florida that they are prepared to handle their
vegetables and all other produce shipments.
The purpose of this activity is to keep down
speculation.
The shortage of cans is still serious, and no
great improvement is looked for. In view of
this, the agricultural departments of the various States and the various organizations
cooperating in the increased food production
campaign are drawing attention to practical
methods of fruit and vegetable drying. Large
quantities of fruit that drop and rot under the




JUNE 1,1P17,

trees can also be saved in this way, and many
vegetables left on the vine to dry. In addition
to the saving of sugar and labor, the drying
method will aid materially in relieving the can
shortage.
Cotton is late. The dry weather in April
resulted in seeding under unfavorable conditions with insufficient moisture for rapid
germination. In the northern part of the district there has been little, if any, decrease in
cotton acreage, and southeast Georgia has
planted heavily. In southwest Georgia and
southern Alabama there has been a large decrease in cotton acreage owing to the boll
weevil. In Georgia it is estimated the crop
will be from 10 per cent to 15 per cent less than
last year; in Alabama probably 30 per cent;
in Mississippi, 20 per cent; in Louisiana, 10 per
cent; and Tennessee and Florida, light cottonraising States, about normal. The general
decrease in cotton acreage will probably be
augmented by a smaller production due to
shortage in negro labor.
The labor situation continues to grow worse.
There is a scarcity of unskilled labor around
the coal mines, ore mines and furnaces, and
while plants in the district, in general, are
operating full time, unless some means are
found to retain labor, production will be largely
curtailed; and this will likewise be true in the
harvest and cotton-picking season.
The shortage of cars continues, and this has
caused some few plants to operate on short
time for a period of several days. This condition has especially affected the lumber business. Lumber dealers state the section of the
country between the Mississippi River and a
line drawn north through Atlanta from the
Gulf seems to be in worse condition, so far as
car supply is concerned, than any other section of the country. Lumber prices are firm and
on new high levels, with the demand very heavy.
There is an increased activity in shipbuilding, though handicapped somewhat by lack of
ship carpenters, ship joiners, boiler makers,
and machinists. Steel ships as well as wooden
ships are being built.

JUNE 1,

1917.

FEDEBAL 'RESERVE BULLETIN.

The unseasonably cool weather in connection
with scarcity of labor on turpentine farms is
seriously interfering with naval stores productions, and receipts at the ports show a decrease
as compared with the same period last year.
Foreign demand is much less than a year ago,
but the movement to domestic consumers has
been excellent.
Phosphate mines in the district are working
only about 50 per cent of capacity, owing to
inability to get box cars for loading to interior
points. Operators claim to be receiving only
about 20 per cent of requirements. Fertilizer
plants are anxious for phosphate rock, but
railroads can not furnish equipment. One
company states that they were short 300 cars
for loading in the second week of May and
would require 600 cars for the third week
loading.
Bank deposits continue to show large increases.
DISTRICT NO. 7—CHICAGO.

Business conditions in the Seventh Federal
Reserve Bank District are, on the whole,
satisfactory, although there is considerable
evidence of a waiting attitude among business
men in certain lines. The call for personal
economy is having its effect upon those retailers who handle other than the necessities
of life, and many are waiting to see the results
of the Government's taxation policy and its
effect upon their individual incomes. Manufacturing establishments report a good volume
of trade, with the labor question growing more
serious and the car situation somewhat alleviated. In the banking field there is but little
activity; deposits are holding up well, and
discount rates are firm. Financial institutions
as well as the bond houses are working for
the success of the Liberty Loan, and an active
campaign toward this end is being conducted
throughout this district. Since the money to
be derived from the sale of these bonds will be
spent almost entirely in the purchase of supplies in this country, there can hardly fail to
be great business activity, accompanied by
some shifting in bank deposits without any
decrease in their aggregate.




471

Crop prospects are unsatisfactory, and with
but a small winter-wheat crop it is difficult to
believe that even favorable weather conditions
will produce crops of spring wheat, oats, and
corn sufficient to meet the requirements of this
country, when it is taken into consideration
that Europe will call upon us for wheat alone
to an amount estimated at 250,000,000 bushels,
Foreign Governments are reported to have
been heavy buyers of futures in wheat, in
order to protect their requirements. Weather
conditions during the past month have been
reasonably satisfactory, although cold weather
has retarded the growth of all small grains. A
large acreage of corn and oats is indicated by
the reports up to date.
Agricultural implements.—Manufacturers report a satisfactory volume of orders and difficulty in securing the necessary material and
labor; also a lack of railroad equipment with
which to make deliveries of farm machinery.
Automobiles.—Concerns in this line are
experiencing a decrease in shipments and, in
some cases, have curtailed production and
decreased working forces. The increased cost
of construction has reduced profits and,
according to some authorities, retarded sales.
This industry is seriously disturbed over the
prospects of an excess-profits tax. Collections
are somewhat slower. Trucks are reported in
good demand.
Building and building materials.—Building
enterprises have been uniformly curtailed,
due to the future uncertainties and the high
cost of all structural materials. April showed
a decrease in building and it is believed that
May will show a still greater decline. The
cement-business was good up to a short time
ago, but the difficulty in securing shipments of
stone, gravel, brick, sand, etc., will seriously
affect sales in this line. Collections are good.
The brick business is not as active as during
the same period last year, and the piincipal
difficulty seems to be a shortage of freight cars.
Coal—-There is an insistent demand from all
quarters for coal with consumption a little in
excess of production. Public retail orders at
this time are being accepted subject to delivery

472

FEDERAL RESERVE BULLETIN.

JUNI 1,1917.

within the course of the next few months, and
Hardware.—There is some indication of a
present shipments are being distributed with slowing up in business, but on the whole cona view to placing the available tonnage over ditions are satisfactory, and the high cost ot
as wide a territory as possible.
goods has not materially affected the demand.
Distilling and brewing.—Distilleries are oper- In a number of lines goods are difficult to seating only part time, in view of the movement cure and prices continue to advance without
toward prohibition, but the sale of whiskies is any prospect of a change as long as the war
reported exceptionally good, caused partly by lasts. Collections are fair.
the fact that many States will prohibit the
Leather.—There is very little activity in the
sale of liquor after July 1. Withdrawals from shoe and leather trade and many customers
the bonded warehouses for the fiscal year 1917 are restricting their purchases to immediate
are expected to be heavy. Breweries have needs. Labor is scarce, and some large conexperienced a quiet business owing to the cold cerns are forced to curtail their production.
weather, and this, together with the increased The prospects are for quiet business for the
cost of material and prospective taxes, makes next few months.
for a poor showing in earnings.
Live stock and packing.—Live-stock receipts
Dry goods.—Immediate business has suffered are running about normal and prices are strong.
during the past few weeks, due to the high cost This condition is bringing to market a good supof food and provisions, unseasonable weather, ply of cattle, and those who wish to secure cattle
and the tendency toward economy. Collec- to put on pasture are experiencing some diffitions are fairly good. Orders for fall are sat- culty. The immediate demand for packers'
isfactory, but the retail merchants seem to products is light, clue to the stocked-up conhave heavy stocks of goods which it will be dition of the trade and the present wave of
necessary for them to dispose of, and until this economy. The foreign demand is strong.
is accomplished their purchases will probably By-products are in good demand with the exbe of the hand-to-mouth variety. Whole- ception of glue, sheepskin, and leather.
salers do not care to quote prices for next year,
Lumber.—The decrease in building operations
owing to the difficulty in forecasting the has had its effect upon this line, but prices are
situation.
strong. On the whole, a satisfactory condition
Furniture.—Orders are scarce, and one report seems to exist in this territory, and, while a
states that the unfilled orders on hand with temporary easing up is apparent, the prosmembers of the Furniture Association are the pects are fayorable.
lowest they have been for the past year.
Mail orders.—Sales in this district continue to
Grain.—The grain exchanges are in consid- show an increase.
erably better shape than before regulations
Pianos.—Sales have dropped off considerwent into effect which stopped speculative ably, due to the prospects of taxation and the
accumulation.
economy propaganda. Materials and labor are
Groceries.—Sales, measured both in quantity scarce, and collections normal.
of merchandise and money, show a substantial
Shipbuilding.—This line is very active, with
increase over previous figures. Collections are capacity bookings for this year and through
good and being followed closely by the whole- 1918. The principal difficulty is encountered
salers on account of the high cost of goods, in securing the necessary labor and materials.
which necessitates the use of a larger capital
Steel.—The domestic demand for steel conthan ever before to finance even a small busi- tinues active with prices strong. Mills are
ness. The present volume is attributed to pushed to capacity and Government orders are
speculative purchases on the part of the public, being given preference. This may delay shipand a decrease in business with recession of ments to some of the regular customers who
prices is looked upon as a probability after the will not get their allotments as promptly as
present movement subsides.
desired.




JUNE 1, 1917.

FEDERAL RESERVE BULLETIN.

Watches and jewelry.—Sales are reported
considerably ahead of last year, and manufacturers and importers find difficulty in keeping
up with their sales. There is a satisfactory
volume of business in sight but there is considerable question as to the profit, owing to
taxes and increased overhead expenses.
Wool and woolens.—There appears to be a
shortage in raw wool, and this, together with
the heavy demands for military purposes, has
created an active market at extremely high
prices. Mills are busy, and Government requirements have forced the cancellation of
many trade orders. Labor shortage and decreasing wool supplies are interfering with the
knit goods manufacturers.
Clearings in Chicago for the first 21 days of
May were $1,583,000,000, being $385,000,000
more than for the corresponding 21 days in May,
1816. Clearings reported by 18 cities in the
district outside of Chicago amounted to $304,000,000 for the first 15 days of May, 1917, as
compared with $223,000,000 for the first 15
days of May, 1916. Deposits in the eight central reserve city member banks in Chicago
were $728,000,000 at the close of business May
21, 1917, and loans were $496,000,000. Deposits show a decrease of approximately
$12,000,000 over last month and loans a decrease of approximately $4,000,000.
DISTRICT NO. 8—ST. LOUIS.

Business interests in this district have held
their own in the face of the preparations for our
active participation in the war. Reports from
all lines of business, other than those directly
connected with war munitions, indicate a somewhat quieter condition than has been reported
for the past few months. Reports all indicate
a very healthy condition, and there is a remarkable feeling of confidence in the future, but at
the same time war preparations have had a
sobering effect. Business men are operating on
a somewhat more conservative basis.
The certificates of indebtedness which were
subscribed for by member and nonmember
banks in this district have been to a very large




473

extent distributed to the general public and
should materially assist in floating the Liberty
Loan.
Details of the Liberty Loan were announced
a few days previous to this writing. The organization of the banking interests of the district
has now been completed; the necessary steps
have been taken to organize other interests
throughout the district, and a campaign for the
success of the loan, under the motto, "A Liberty Bond in Every Home," which originated
in f3t. Louis, is welt under way. One month
ago mention was made of various campaigns
then being conducted with a view to larger
production of foodstuffs, and it is felt that considerable progress has been made. Other campaigns have now been inaugurated for the conservation of food supplies. Meatless days have
been introduced in the restaurants and hotels
of St. Louis, and there has been a general appeal
to the public for elimination of waste.
The volume of sales in all wholesale lines continues to be very large, but increases noted this
month are smaller than those reported for a
number of months past. This is attributed, in
the lines supplying what may be called the
necessities of life, to a general feeling of conservatism and in part to the cold and rainy
weather which was prevalent throughout the
district up to the middle of May. Dry goods
jobbers report that the demand for merchandise
is not so insistent as it has been for months
past. Wholesale millinery houses have been
affected by the cold, wet spring. Manufacturers of women's and men's ready-to-wear
garments have had a very satisfactory season,
but the distribution of this merchandise to the
general public has been delayed. The hardware interests report a strong and active trade.
Retail merchants in all lines seem to have been
affected by unseasonable weather up to the
middle of May, but business since that date is
reported to be extremely satisfactory, and sales
for May will show increases over a year ago.
The gains in dollars now reported seem to be
entirely due to the increased cost of merchandise and not to an increase in the quantity

474

FEDERAL RESERVE BULLETIN.

shipped. The buying power of the general
public continues at a high level, but high prices
are beginning to have their effect on sales, particularly on articles that the public can conveniently <lo without.
To sum up, it may be said that there has been
a slight slackening in general business, due in
part to the unseasonable weather, in part to
the increased cost of merchandise, and in part
to the campaign for economy. Index figures
on the cost of living again show an advance.
Reports from Louisville indicate that the
lumber trade has been somewhat handicapped
by high prices, but manufacturers of ax handles, etc., report heavy orders on hand, although
this is usually their dull season.
The temperature for the last half of April and
the first half of May was below the normal
throughout the entire district. The rainfall
during this same period, generally speaking,
was above the normal. The agricultural development has accordingly been somewhat retarded, but rain was needed for sufficient subsoil moisture and with favorable weather conditions from now on it is believed that the agricultural outlook will improve.
On May 8 the Government issued its report
of condition of crops as of May 1. The wheat
report showed an unusually large percentage
of acreage abandoned and an unusually low
percentage of condition for the country at large.
The reports on the wheat crop in the States
wholly or in part within this district were somewhat more encouraging than the reports from
other sections of the country. The percentage
of acreage abandoned in the large wheat-producing sections of the district was on the average smaller than in other sections of the country; the percentage of condition showed an
improvement as compared to the April 1 report; and the forecast for the 1917 harvest
from the May 1 condition was larger than the
final estimate for 1916. It can not be said that
the condition of the wheat crop is satisfactory
in this district; at the same time it is believed
that the prospects are better than have been
hitherto supposed.




JUNE 1,1917.

Favorable reports are received from the
tobacco districts of Kentucky and Tennessee.
The cotton crop in the belt is undoubtedly
two or three weeks later than usual. Cultivation has been retarded. In some sections replanting is necessary and the high cost of seed
makes this a hardship. In an effort to overcome the ravages of the boll weevil, farmers
have endeavored to plant a large percentage of
their acreage in early maturing varieties. The
high cost of provisions and the scarcity of labor
will undoubtedly increase the cost of production of the 1917 crop, and this may be a factor
affecting the acreage planted, although present
prices are very tempting to planters. Reports
on business in general in the cotton belt are
satisfactory, one correspondent writing as follows: "We are glad to report that our farmers
are planting a good part of their land ingrain,
and, notwithstanding the abnormal conditions
which confront us, we feel safe in giving liberal
credit to our customers, as we have done in
former years." The stock of cotton on hand in
Memphis on May 18 is still unusually large for
this time of the year. The stock on this date
amounts to 297,000 bales as compared to
136,000 on the same date in 1916, 120,000 in
1915, and 60,000 in 1914.
The May 1 condition of rye as reported in
the Government crop report of May 8, is satisfactory. The acreage planted this year in the
States within this district is generally larger
than that harvested in 1916; the percentage
of condition is fairly satisfactory, showing an
improvement as compared to April 1.
Spring plowing and spring planting is well
advanced, the percentages for the States within
this district being generally above the 10-year
average.
Reports indicate that the corn crop is developing satisfactorily. South of the Missouri
River considerable corn is up, and in some sections fields have been once worked over. The
cold, wet weather, which was prevalent up to a
few days ago, has retarded the growth. Some
counties report that corn had rotted in the
ground and replanting was necessary. In an

J U N E 1, 1<>17.

FEDERAL RESERVE BULLETIN.

effort to increase the production of foodstuffs,
the growing of alfalfa on cut-over stump land
in Arkansas is being introduced with considerable success.
A large acreage of potatoes has been planted
and the crop is coming up well. Truck gardens
are not so far advanced as is usual at this time
of the year. With seasonable weather from
now on they should develop rapidly. The
movement of the strawberry crop is now in full
swing. Shipments from the Arkansas district
are very large and shipments from Tennessee,
Kentucky, and the southern sections of Missouri are now beginning to appear in volume.
Lettuce, cabbages, onions, and other truck-farm
products are being shipped from the southern
portions of the district. The outlook for the
small-fruit crops is generally good, the apple
outlook being particularly bright.
The St. Louis National Stock Yards reports
an increase in the receipts of cattle and hogs
for the month of April and a decrease in the
receipts of sheep and horses and mules. For
the first time in several months the price of hogs
has not shown a material increase.
Building permits in Louisville, Little Rock,
and Memphis show a decrease for the month of
April as compared with April, 1916, while St.
Louis shows an increase for the same month.
The high cost of building materials is having a
deterrent effect on building activity, and that
in turn has affected the business of those supplying building materials.
Postal receipts in the four large cities of the
district confirm the general slacking up of
business, Little Rock, Louisville, and St. Louis
showing a decrease as compared to a year ago
and Memphis showing a slight increase.
Compilations of gross and net railroad earnings which are now available again show the
discrepancy between the increase of gross and
net earnings. The increased cost of material
and labor is affecting the net earning of many
of the railroads. Railroads in this district have
joined in the national movement to conserve
their resources and equipment for Government
purposes. Rules and regulations with that
object in view are now being put into effect.




475

The bond market is very quiet. Investors
as well as bankers have practically withdrawn
from the market. Bond houses in the district
have offered their services to the Government
and the efforts of these organizations are being
expended on the Liberty Loan. Commercialpaper rates have advanced again. Best names
are now quoted at 5 per cent and other names
at 5J, as compared to 4-J to 4f a month ago.
There is a fair supply of paper on the market,
and in fact the supply seems to exceed the
demand. Although a large amount of commercial paper will have to be refinanced within
the next 30 days, brokers generally report a
quiet business. City banks are not buying, and
country banks are buying only in small quantities. Bank deposits have fallen off somewhat
in the past 30 days, and banks generally seem
to be husbanding their resources in an effort to
aid the Government by liberally subscribing to
the various issues of temporary Treasury certificates and by their desire to help place the
Liberty Loan. Bank rates to customers have
accordingly advanced, prime demand loans in
St. Louis now being quoted at approximately
5 per cent with rates in other smaller centers in
the district somewhat higher.
DISTRICT NO. 9.—MINNEAPOLIS.

The appeal to the farmers of the Ninth Federal Reserve District to plant heavily and secure a record-breaking acreage this year met
with a prompt and effective response. Seeding
during the last half of April was interfered with
by bad weather and was somewhat delayed;
during the first half of May conditions were very
favorable, and the farmers were able to accomplish a very large amount of work. Reports
now coming in indicate that wheat acreage of
Minnesota, North and South Dakota, and Montana will be very close to normal in spite of
severe damage from hail, rust, and hot weather
last year.
Organized work to encourage heavy planting
was especially successful in North Dakota.
Banks everywhere throughout the district have
been very liberal with farmers and active in encouraging them to take a personal interest in
increased crop production,

476

FEDERAL RESERVE BULLETIN.

There will be a large increase in barley and
oats, and it is probable that the final reports on
flax will show an increased acreage. Corn
planting is actively in progress in Minnesota
and South Dakota, and an increase of 20 per
cent to 30 per cent in acreage is predicted.
Winter rye is in fine condition. Wheat is obtaining a very favorable start, and although the
cool nights have retarded the germination of
the seed to some extent conditions have been
right to give the plant a good start, and the
roots have gone deep into the ground instead
of spreading along the surface.
Planting in southern Minnesota and South
Dakota is from a week to 10 days late, but
throughout the remainder of Minnesota and
North Dakota and Montana grain has gone into
the ground at about the same season as in previous years. The crop outlook is generally
favorable, and with satisfactory weather conditions large yields should be obtained this
year.
Business conditions the district over have
been generally satisfactory. There has been
some hardening of rates, and country banks
have been experiencing quite a heavy demand
as a result of the appeal to plant larger acreages. This demand has reflected itself on city
institutions, but funds have been promptly provided where needed and farmers have had liberal support from their banks.
The business outlook is favorable, and
although construction has been somewhat retarded by the high price of materials the general opinion is that prosperity will continue and
that the district will enjoy a good year.
DISTRICT NO. 10—KANSAS CITY.

Agriculture.—The labors of the various State
committees for the conservation of agricultural
products are meeting with enthusiastic response
from all quarters. Publicity bureaus in charge
of experts are reaching all classes through the
press and by direct propaganda. The past month
has been abnormally cold and wet,retardingf arm
work, but some improvement in growing crops
is noted. Brief reviews from various States
wholly or partly within this district follow:




1, 1917.

Colorado,—Winter wheat is generally good
and recent moisture has benefited all crops.
A materially increased acreage is being cultivated. Sugar beet planting is well under way
and conditions are favorable.
Kansas,—April rainfall was almost as much
as during the five previous months combined,
causing a general improvement in all crops.
State and Government estimates on this year's
wheat production agree upon approximately
40,000,000 bushels. The highest estimate received is 60,000,000 as against last year's final
estimate of 97,500,000. Sunshine and warmth
are the greatest needs at the present time.
Alfalfa is looking well in the eastern half of the
State and getting started in the western. Authorities claim that there is a good supply of
seed for this season. The gardening area is said
to have been doubled.
Missouri.—The abandoned wheat acreage
will probably amount to between 15 and 20 per
cent, while indications are that the corn acreage
being planted is 40 per cent above the average,
being approximately 7,368,000, an area greater
than the whole of Belgium. The wheat forecast on May 1 exceeded last year's final estimate
by approximately 3,000,000 bushels.
Nebraska.—Winter wheat has improved.
Reliable estimates are that not to exceed 50
per cent has been killed, whereas earlier estimates ran as high as 75 per cent. In many
localities tractors are being operated 24 hours
a day by two or three shifts. The acreage of
spring crops has been increased from 15 to 20
per cent over all past seasons.
New Mexico.—The commissioner of public
lands has granted a permit to eveiy holder of a
lease of State lands for grazing purposes to use
such lands for general farming without increase
in rental during the period of the war, covering
roughly the right to farm 7,000,000 acres of
land, a large portion of which is adapted to
some form of cultivation. Liberal permits have
also been granted for the farming of tracts in
the United States timber reserves.
OMalioma.—Only 15 per cent of the wheat
acreage has been abandoned, and there has

JUNE 1,

1917.

FEDEBAL RESERVE BULLETIN.

been material improvement in the crop remaining to be harvested, the growing condition of
which, on May l,was 71 per cent, or 7 points
lower than at the same time last year. Indications are, however, that Oklahoma will produce
31,800,000 bushels of wheat this year as against
29,585,000 last year.
Wyoming,—The supply of snow remaining in
the mountains at the close of April was unusually large, the depth averaging 42.6 inches, or
75 per cent greater than a year ago, assuring
an abundant flow of irrigation water if weather
conditions for early summer are normal. There
is an improved prospect in winter wheat, and
it is now estimated that only 10 or 15 per cent
of the crop will be plowed up.
Live stock,—The general trend of prices
for all classes has been upward, the highest
level ever known prevailing. The movement
to the markets increased materially and will
unquestionably be reflected in smaller receipts
later in the season. Unseasonable weather has
caused a severe lamb loss in Wyoming, while
many of those surviving are in poor condition.
Wool brought the highest price ever paid, from
45 to 50 cents a pound. There has been noticeable betterment in grazing conditions. Local
supplies of cut meats on May 1 showed a decrease from 50,000,000 pounds on May 1, 1916,
to 46,500,000 pounds. Practically every packing center shows a decrease in hog packing for
the past two months as compared with the same
period last year.
Mining.—Colorado mines producing base
metals made a record production during the
month of April, gold and tungsten showing
some falling off, owing to the increasing cost of
production. In the Missouxi-Kansas-Oklahoma
field operators are claiming that unless materially advanced prices occur soon, there will be
many shutdowns because of the increasing
prices of everything that enters into production. However, if the remaining eight months
prove as productive as the first four, all records
will be broken in the production and valuation of zinc, lead, and calamine ores in this
field for the current year.




47'

Oil.—Contrary to predictions, the price of
crude oil in the mid-continent field remains
unchanged, while the shortage of casing and
scarcity of rigs lias reached an acute stage,
causing a number of shutdowns. Both Kansas and Oklahoma reported increases in completed wells in April over March, but a net
loss in new production. Rapid development
in Wyoming continues.
Lumber and construction.—Lumbermen are
predicting a shortage for the retail trade, due
to the great demand of the Government for
building material for ships and Army barracks,
but some insist that there is plenty of lumber
at producing points and that the supply will
continue adequate regardless of the Government's requirements, the real problem being the
question of transportation. There is a healthy
and insistent demand for yard stock for general building purposes. Many large firms have
withdrawn from the market because they can
not furnish the stock. Order files are the
largest ever known, and until most of these
book orders are filled but little new business
can be handled. Local sash and door factories
are running full force, but orders are not
quite so heavy as they were 30 days ago.
Seven of the twelve important cities reporting
show slight decreases in valuation of building
permits for April, as compared with the same
month last year. However, the six cities
showing increases, in some cases important,
comprise the largest cities in the district.
"Unquestionably, general building operations
are not so active, due to the scarcity of
material.
Labor.—In spite of the fact that the past
month has witnessed an unusual number of
voluntary wage increases and bonuses in various lines of industry, there have been increasing demands on the part of labor, by reason of
the increasing cost of necessities, with a number
of strikes and rumors of others. The disturbances reported, however, are scattered
and do not affect any considerable number of
men in any instance. The shortage of labor
is becoming more and more apparent and the

478

FEDERAL RESERVE BULLETIN.

farm Labor problem particularly is receiving
much attention. It is estimated that 20,000
harvest hands will soon be needed for Kansas
and Oklahoma.
Wholesale and retail.—Flour mills are m
active operation and current shipments of
products in April were far above normal for
the season, the activity being due to excessive
buying of flour by housewives, which has now
fallen off to some extent by reason of high
prices and the fact that millers are discouraging new buying as much as possible.
Local distributors of automobiles report that
from many quarters dealers have been taking
more cars than called for by their contracts, in
spite of the diminished crop prospects and the
fact that practically all cars represented in
this territory have raised their prices, some of
them two or three times in the past year.
The widespread economy propaganda has
undoubtedly had its effect upon dealers in dry
goods, while unseasonable weather has had a
further depressing tendency. Wholesalers report a good increase in orders for fall delivery.
A well-organized movement to increase the
cultivated area, together with the abandonment of considerable wheat acreage, has
resulted in the greatest demand for corn-tillage
tools ever experienced, with a decided shortage quite apparent. Many houses report having shipped out as much or more of second
order goods as they did upon the original
contracts.
General April purchasing activities are reported as practically stationary with April of
last year, with a slight decrease from March of
this year, while collections continue satisfactory.
Financial.—While reports indicate a most
satisfactory increase in the gross earnings of
railways, the effect of rising expenses is revealed in decreases in net earnings in several
instances.
Well-maintained business activity is reflected
by the largest total clearings ever recorded for
April, with gains of from 10.2 to 178.6 per
cent, the average for the 15 most important




JUNE 1,

1917,

centers being 50.2 per cent, the greatest gains
occurring in Oklahoma. Post-office receipts
are reported in satisfactory volume. Bank deposits show a healthy gain over the same period
a year ago, while the largest city banks show
something of a decrease in deposits and an increase in loans since March 5, as is usual in the
spring of the year. Desirable loans continue
in demand throughout the district, but there
is evidence of a stiffening in discount rates,
General.—The claim of a shortage of foodstuffs and the efforts put forth to induce
economy are said by many to have been carried to extremes, and critics of this policy,
believing that legitimate business has been unfavorably affected, axe urging the plan of
"Business as usual." There has been no discernible abatement in the volume of general
business, as indicated by bank clearings and
other business barometers, and the attitude
of commercial interests is by no means one of
apprehension. Government purchases in various directions are adding materially to the
normal COD sumption.
DISTRICT NO. II—DALLAS.

Since our April letter there has been a considerable change in business conditions throughout the district, and while not particularly
serious the situation is materially affected by
the war. All sections report the growth of
conservatism. The uncertainty of conditions
very far ahead has promoted economy among
the people. The extraordinarily high prices
of practically every commodity, especially
foodstuffs, have caused many people to restrict their purchases, and in the main expenditures are being confined to the necessities
of life, rather than luxuries. Summed up,
therefore, general business conditions are less
favorable than a month ago. For at least a
month after war was declared "business as
usual7' seemed to be the prevailing principle.
The latter part of May has shown a slowing
down in many lines.
Unseasonable weather the early part of the
month has caused a curtailment of retail trade.

JUNE 1,

1917.

FEDERAL RESEKVE BULLETIN.

and it is below normal. Retailers are hopeful
that with warm weather the trade will again
become active.
The wheat belt of the district was benefitted
by a heavy snow and good rains on May 6.
Unusually cold weather prevailed, but the
moisture materially helped grain. According
to reports, the condition of the wheat and oat
crop has materially improved within the last
two weeks, and at this time prospects are excellent for a good yield. In our April letter
we estimated that Texas would produce
20,000,000 bushels of wheat: 25,000,000 bushels of oats, and 150,000,000 bushels of corn.
After carefully analyzing the reports received
we believe these figures conservative.
Cotton has been retarded by the cold, backward spring and cold nights. As it is particularly a hot-weather plant the condition of
the crop at the present time is not especially
encouraging. Our advices are that much of
the staple has died because of unfavorable
weather, and that replanting has been necessary
in many sections, especially Oklahoma. There
is an increased acreage in cotton over 1916, but
with the heavy acreage planted this season in
diversified crops and foodstuffs farmers will be
more self-supporting than in many years past,
and be less dependent upon returns from
cotton.
The markets of the district are well supplied
with vegetables, for which there is an excellent
demand at good prices. The effects of the
home gardening campaign are now being felt,
and the producer is getting good returns from
his efforts in this direction.
Uncertainty as to war conditions is affecting
wholesale lines. There is a tendency to buy
very conservatively, and high prices prevent
any buying of unusually large stocks. The
volume of trade, according to reports, is about
equal to last year. ^ There is some slowing up
in collections in the trade.
Government financing has taken precedence
over other matters in banking circles in the
past 30 days, and the flotation of Liberty
bonds, and the distribution of the Treassmy




479

certificates of indebtedness, have been of first
importance in finance. The banks and individuals are responding to the call of the Government in the present situation, and all seem
disposed to do their best in making the bond
issue a success. Demand with member banks
is rather active, and their loan account shows
a steady increase. The seasonal slump in deposits is at hand, and a corresponding decrease
in reserves is noted. Notwithstanding the active demand for money, there is no evidence of
any stiffening of rates, and they remain easy.
The sale of the Government's bonds has had
the effect of causing inactivity in other bond
offerings, and dealers report few inquiries and
little trading.
Demand with this bank is increasing daily,
and within the past month our loans show an
increase of some $800,000. The larger part of
the paper offered consists of notes of farmers',
fall maturity, and live stock paper. Bank
clearings for April show an increase of 36 per
cent over the same month last year, and continue at record figures. The totals for April at
the principal cities were, 1916, $134,601,572;
1917, $182,257,831.
Lumber continues in good demand, at advanced prices. The car situation, already serious for several months past, shows no improvement. Building operations, as reported
by the principal cities of the district, for April
show a decrease in number, but an increase of
36 per cent in the valuation of permits issued.
The most unfavorable feature in the oil industry at this time is the high price and
scarcity of materials necessary in production.
The declaration of war had the effect of temporarily suspending export shipments from
Gulf ports, but this has practically all been
made up by heavier shipments later. Loadings of refinery products by the Gulf Refining
Co. alone, in the first half of April, amounted
to 992,384 barrels; a gain of 344,789 barrels
over the company's deliveries from its refinery
to vessels in the corresponding period in March.
A great deal of the oil was for export. Operations in the Petrolia and Holiday fields are

480

FEDERAL RESERVE BULLETIN.

curtailed to a very great extent by the shortage of water.
There is no evidence of any unemployment
of labor. The high cost of living, and the advanced prices of all necessities has been generally recognized by employers throughout
this section. With the harvesting season near
at hand, and the unusual demand for men for
that work, there should be no unemployment
in the near future.
DISTRICT NO. 12—SAN FRANCISCO.

The offering of $2,000,000,000 Liberty Loan
bonds has commanded chief attention in the
past month. If each person in the United
States made equal subscription, the share of
each man, woman, and child would be $20, or,
on the average, $100 for each family. If apportioned according to the amount of deposits
in banks, each bank would sell to its customers
an amount approximately equal to 10 per cent
of its deposits (excluding deposits from banks).
This would aggregate $42,000,000 for San Francisco, $18,200,000 for Los Angeles, $8,000,000
for Seattle, $6,000,000 for Portland, $3,300,000
for Spokane, $2,200,000 for Tacoma, and a total of $166,000,000 for the Twelfth Federal
Reserve District.
Apprehension that bank deposits will shrink
as a result of such financing seems ill founded.
Bonds will be paid for chiefly by checks on
banks, being a transfer of balances now at the
credit of individuals to the credit of the Government. When disbursed by the Government
for services and materials the amounts will
reappear as deposits of individuals. Such a
process will inevitably increase, not diminish,
the total of bank deposits. No export of gold
is involved. That payment for bonds may be
a mere transfer of bank balances from one account to another and not a transaction in actual money is well illustrated by the fact that
when the Federal Reserve Bank of San Francisco recently received payment from banks
and individuals of $20,000,000 for Treasury
certificates sold them, the reserve bank had
3,000 less gold at the close of business that




JUNE 1, .1.917.

day than before the $20,000,000 was paid to it,
payments having been made in eastern exchange.
Our hazard would appear to be not that
bank deposits may diminish under war financing but that they may expand too greatly,
enhancing the difficulty of readjustment after
the war. If, for illustration, we assume that
our total expenditures last year were $25,000,000,000, and the Government now is to spend
$10,000,000,000 this year for war, this latter
sum could be supplied either by curtailing our
expenditures to three-fifths those of last year,
viz, to $15,000,000,000, and giving two-fiffchs,
viz, $10,000,000,000, to the Government, leaving the combined Government and private expenditures the same as last year; or, we could
avoid curtailment and lend the Government
$10,000,000,000, bringing the combined Government and private expenditures up to
$35,000,000,000. This latter course would
mean that we would this year pay $35,000,000,000 for the total products of all the labor of
the country which were paid for with $25,000,000,000 last year, the total products probably
varying but little in quantity. In other words,
this would advance prices on the average 40
per cent. To curtail two-fifths would be a tax
equal to 40 per cent of all expenditures, but
the price level would not be advanced and there
would be no Government debt. To increase
the price level 40 per cent by disbursement of
Government borrowings with undiminished
private expenditure would likewise impose a
tax of two-fifths, since as a consequence a dollar
would on the average buy only 60 per cent as
much as before. Besides this the resulting
Government debt would entail }rears of heavy
taxation to pay interest and principal, and the
higher price level would intensify the difficulties of the period of contraction and readjustment inevitably to follow the expansion.
A middle course has been chosen, providing
war funds partly by taxation and partly by
bond issues.
"Business as usual" would aggravate every
evil growing out of a period of expansion,

JUNE 1,

1917.

FEDERAL RESERVE BULLETIN.

481

causing the Government to receive least value spring has been so cold and backward that it
for its expenditures and hampering it at every has prevented planting a full acreage of spring
point in the conduct of the war. Every econ- wheat. Private estimates indicate a total crop
omy in the use of the product of labor and every perhaps 30 per cent below normal in amount.
increase in the efficiency and output of labor
The acreage in beans has been increased
can not fail to be directly helpful to the Govern- about 50 per cent over last year, that in Caliment in its war efforts and will render easier fornia alone being estimated at 400,000 acres.
the industrial and commercial readjustment Last year over 260,000 acres were in sugar
after the war. There is no danger of unem- beets. The acreage this year has been largely
ployment but it is inevitable that the diver- increased in Idaho and Utah. Last year Oresion of effort from channels of peace to those gon and Washington produced about 10,000,000
of war will occasion individual hardships.
bushels of corn. This year 190,000 acres have
Credit is easy and conditions are generally been planted as compared with 121,000 last
favorable for the flotation of this district's year. A recent survey in California shows the
share of Government loans. With such huge wheat crop about 90 per cent of normal, pasfinancing, temporary dislocations of funds can ture grasses 75 per cent, rice 130 per cent, and
hardly fail to appear here and there, but the potatoes about normal.
Secretary of the Treasury will deposit in
A report from Idaho estimates that 120,000
member and nonmember banks the proceeds of acres in that State are planted in fruit, 115,000
payments on Liberty Loan bonds, withdrawing acres being in apples. Prospects for deciduous
the funds as needed. Banks generally have fruits are for only moderate crops. Apricots
exceptionally heavy reserves, but rediscounting and almonds have suffered from frost. Generwith the Federal Reserve Bank should unhesi- ally speaking, the increase of new acreage
tatingly be availed of when required.
coming into bearing will to a considerable
Both to extend its service and as a safe- extent offset losses by frost.
guard, it has been determined to establish
Railroads are preparing to provide cars for
branches of the Federal Reserve Bank at large shipments of fruit from California, 15,000
Seattle, Portland, and Spokane. Plans for to 18,000 being the estimate for deciduous
the branch at Spokane are well forward. The fruit, 14,000 to 15,000 for Valencia oranges
eligible State banks of that city have given (2,000 more than in any previous year), besides
assurance of their intention to make appli- 10,000 for cantaloupes.
cation for membership and the clearing-house
A large salmon catch is anticipated this year
banks have offered to employ the branch to because of the quadrennial run of the sockeye
conduct the examinations hitherto conducted and the biennial run of humpback varieties.
by the clearing house examiner, paying the
It is said that 315,000 head of sheep are
branch for this service an amount equal to the grazing on the Humboldt National Forest in
present cost of conducting such examinations, Nevada, the largest number on any single
it being assumed that the clearing house ex- national forest, while the largest number of
aminer will be appointed branch manager. It cattle, 76,000 head, is found on the Tonto in
is anticipated that Seattle and Portland will Arizona. Both cattle and sheep are commandoffer similar cooperation.
ing extraordinary prices, and wool contracts
The May 1 Government report estimates the have been made at 50 to 52J cents.
winter wheat crop for this district at 39,2*50,000
Potash, formerly obtained from Germany, is
bushels, against 53,330,000 last year and a five now being obtained from the kelp along the
year average of 62,235,000. According to re- California coast, and while this means a much
ports from the Spokane section last fall was higher cost, the availability commercially has
unfavorable for planting winter wheat and this been demonstrated.




482

FEDERAL RESERVE BULLETIN.

In California $2,000,000 worth of quicksilver
was produced in 1916.
A Los Angeles shipyard has received an order
for eight steel vessels of 8,800 tons each.
The lumber output of this district during the
past year has amounted to. 9,070,000,000 feet,
about 1,500,000,000 more than last year.
Production of petroleum in California in
April amounted to 269,085 barrels daily, shipments being 309,001 barrels. On April 30,
1917, stored stocks were 39,976,386 barrels compared with 60,820,315 barrels on April 30, 1915.
Pacific coast banks, particularity those of San
Francisco, are steadily expanding their acceptance business. From April 1 to May 15 the




JUNE 1,

1917.

Federal Eeserve Bank bought their acceptances
covering the following importations: Rice from
China and South America; beans, raw silk,
pongee, curios, surgical instruments, and buttons from Japan; rubber from Java; cocoanut
oil, hemp, buttons, hats, and cigars from the
Philippines; tea, cotton goods, toj^s, walnuts,
carpets, and peanuts from China.
Loans and deposits of member banks in reserve cities in this district each expanded more
than 25 per cent from May 1, 1916, to May 1,
1917.
The prospects at this time are for maximum
industrial activity, but for only moderate crops,
with generally high prices.

JUNK 1,

1917.

FEDERAL RESERVE BULLETIN.

483

ACTUAL AND REQUIRED RESERVES OF NATIONAL BANKS, 1915 TO 1917.
Tlio tables below and accompanying diagrams
are based upon data shown in the Comptroller's
abstracts of condition of national banks beginning with December 31, 1914, the date of call
following the opening of the Federal Reserve
Banks. As is known, the Federal Reserve Act
prescribed certain minimum percentages of reserve which member banks were required to
keep in vault and with the Federal Reserve
Banks, varying according to whether the banks
were located in central reserve cities (New
York, Chicago, and St. Louis), reserve cities
(present number fifty-two), or in places not so
designated. Between November 16, 1914, and
November 16, 1916, the percentages of reserve
which member banks outside of central reserve
cities had to maintain at the Federal Reserve
Banks were increased three times. Since September, 1916, member banks have been permitted to carry in the Federal Reserve Banks
any portion of their reserve formerly required
to be held in their own vaults. These provisions, in combination with the considerable
growth of net deposits, account for the almost
continuous increases shown in the amounts due
from the Federal Reserve Banks to all three
groups of national banks. Those amounts have
more than doubled in the case of central reserve
city banks, and have nearly quadrupled in the
case of national banks outside these cities.
Vault reserves show considerable increases
only in the case of central reserve city banks,
national banks in reserve cities reporting practically no changes in their vault reserves, and
country banks a practically stationary condition during 1915 and but slight increases since.
The effect of the transfers of reserves is reflected
also through the changes in the amounts due
from approved reserve agents, which show large




reductions on December 31, 1915, June 30,
1916, and December 27, 1916, the dates of the
Comptroller's calls following the transfers of
reserves to the Federal Reserve Banks.
Figures of required reserve are based entirely
upon the amounts of net deposits carried by the
banks and indicate, therefore, most clearly the
degree of expansion of the several groups of
banks during the period under consideration.
On the whole, the progress of expansion is
shown to have been most pronounced for the
central reserve city banks, their required reserves being 78 per cent larger on March 5,
1917, than at the close of 1914, while in the case
of the reserve city banks the increase in required reserve is 64 per cent and in the case of
country banks only 42 per cent for the same
period. A comparison of the aggregate figures
of required reserve with the combined amounts
of vault reserve and reserve deposits with the
Federal Reserve Banks held on the several
dates indicates that except during the middle
of 1916 these amounts were but slightly below
the amounts of total reserve required, and for
the most recent dates even in excess of these
amounts. This favorable situation was due,
however, to the fact that the central reserve city
banks have been and are at present maintaining vault reserves as well as reserve deposits
with their Federal Reserve Banks largely in
excess of reserve requirements.
It is evident, however, that in case the present law is changed and a greater centralization
of reserves at the Federal Reserve Banks is
ordered, the banks outside the central reserve
cities will be able to effect transfers of reserves
to the Federal Reserve Banks without reducing materially their deposits with correspondents at the central reserve cities.

484

FEDERAL RESERVE BULLETIN,

JUNE 1,

1917.

Gold and total vault reserves, amounts due from Federal Reserve Banhs andfrom approved reserve agents; also required reserves,
by classes of national banks, 1915 to 1917.
[From Comptroller's abstracts of reports of condition of national banks. Figures expressed in millions of dollars.]
!
Gold reserve.

Other vault reserve.

U

Country Total
tralre-l m re banks.
cities.

sss.

Dec. 31,1914.
Mar. 4,1915..
Mayl, 1915..
June 23,1915.
Sept. 2, 1915.,
Nov. 10,1915.
Dec. 31,1915..
Mar.'/', 1916..,
May 1,1916..
June 30,1916.
Sept. 12,1916.
Nov. 17, 1916.
Dec. 27,1916..
Mar. 5,1917...

131
173
213
260
299
315
275
280
236
228
220
244
230
272

Il
l
115
110
117
114
115
111
120
113
113
126
134
122
131

127
125
123
126
128
134
132
138
140
140
152
150
153
152

413
446
503
541
564
518
538
489
481
498
528
505
555

Banks Banks
in cenCountral re- in re- try Total.
serve cities. banks.
cities.

Nov. 10,1915.
Dec. 31,1915.,
Mar. 7,1916...
Mayl, 1916...
June 30,1916.
Sept. 12,1916.
Nov. 17,1916.
Dec. 27,1916..
Mar. 5,1917...




239
472
246
511
237
557
252
619
244
648
253
605
271
632
287
578 . 277
553
297
542
339
585
388
584
416
646
422

295
290
277
293
294
311
334
345
349
383
416
464
492
495

Due from Federal Reserve
Banks.

Total (3+4+6).

Reserve required.

Banks
in central reserve
cities.
125
145
144
124
146
121
128
134
129
122
106
107
111
103

Due from approved reserve

Total (3+4).

Dec. 31,1914.
Mar. 4,1915...
Mayl, 1915..
June 23,1915.
Sept. 2,1915..

Total vault reserve (1+2).

923
1,008
1,025
1,102
1 157
1,212
1,210
1 264
1,204
1,233
.1,297
1437
1,492
1,563

Banks Banks I
Banks Counin cenin re- try Total. tral re- in re- !
serve banks.
serve servi
cities.
cities.
185
281
292
301
334
372
305
406
351
299
320
338
267
328

582
397
466
747
456
748
436
737
475
809
522
528
615 1,021
603
954
543
842
616
936
606 ! 1,034
678 i 945
718 ! 1,076

472
511
557
619
648
605
632
578
553
542
585
584
646

424
527
529
553
578
625
576
693
628
596
659
726
683
750

:
i
'
!
:
:

756
733
729
769
833
862
. 960
; 952
• 926
1.032
I'160
; 1,170
1,243

Banks Banks
in cen- in re- CounTotal. tral re- serve trv Total.
serve
banks.
cities. cities.
1,505
1,755
1,773
1,839
1,966
2,106
2,043
2,285
2,158
2,075
2,233
2,471
2,437
2,639

306
345
366
377
404
473
479
497
487
467
479
513
495
546

281
298
305
309
315
342
345
374
375
376
399
437
437
460

371
379
375
375
381
401
408
423
429
431
465
505
511
526

958
1,022
1,046
1,061
1,100
1,216
1,232
1,294
1 291
1 274
1,343
1,455
1 443
1,532

•TUNE 1,

1017.

FEDERAL BESEBVB BULLETIN.

485

DISCOUNT OPERATIONS OF THE FEDERAL RESERVE BANKS.
Discount operations of the Federal Reserve
Banks during April totaled $50,055,801, compared with a monthly average of $22,480,385
discounted during the first quarter of the year,
and $11,521,500 discounted during April,
1916. Of the total discounts for the month,
$19,883,579 was in the form of member banks'
collateral notes, as against a monthly average
of $10,425,973 for the first quarter of the
present year. Nearly one-quarter of the discounts for the month is reported by the Richmond Bank, about 20 per cent by the Boston
bank, and about 14 per cent by the Cleveland
bank. Fifteen-day paper constitutes over 75
per cent of the Richmond bank's, about 92
per cent of the Boston bank's, and about 96
per cent of the Cleveland bank's discounts for
the month, the greater part of the short-term
paper being in the shape of member banks'
collateral notes discounted for the larger member banks in the respective Federal Reserve
cities.
Aggregate discounts for the month include
$678,022 of trade acceptances (two-name
paper) discounted by eight reserve banks, and
$856,805 of commodity paper, practically all
based on cotton, discounted by three reserve
banks. Over three-fourths of the trade acceptances and nearly all the commodity paper are
reported by the Richmond and Atlanta banks.
The total number of bills discounted during
April, exclusive of 115 collateral notes, was
6,202, averaging in size $4,865, compared with
about $3,800 in March, 1917, and $1,640 in
April, 1916, indicating a relatively large increase in the amount of the larger-size bills
discounted during the month. As a matter of
fact, over 55 per cent of the paper rediscounted
(i. e., exclusive of collateral notes discounted
with the Federal Reserve Banks) during April
was paper in denominations of over $10,000,
chiefly 15-day paper, presented by the larger
banks with the view of securing additional
funds to subscribe to Government securities.




Medium-size bills (i. e., in denominations of
$1,000 to $5,000) constituted about 24 per
cent of the paper rediscounted during the
month, compared with about 50 per cent in
April, 1916. Small bills (in amounts up to
$250) constituted about 22 per cent of the
number, though only about one-half of 1 per
cent of the total amount of paper rediscounted
during the month, Philadelphia reporting the
largest number of these small bills, largely
trade acceptances.
About 70 per cent of all the paper, including
collateral notes, discounted during April, was
15-day paper (i. e., maturing within 15 days
from the date of discount with the Federal
Reserve Bank); less than 8 per cent was 30day paper; nearly 15 per cent, 60-day paper;
and less than 6 per cent, 90-day paper. Agricultural and live-stock paper maturing after
90 days from date of rediscount with the Federal Reserve Bank (six-month paper) figures
to the extent of $996,804, or less than 2 per
cent, in the total discounts for the month.
During the four months ending April of the
present year the Federal Reserve Banks discounted a total of about $2,592,000 of sixmonth paper, compared with $5,491,800 and
$4,320,400 of this class of paper discounted
during the same period in 1916 and 1915.
On the last Friday in April the banks held
a total of $35,042,056 of discounted paper,
compared with $20,106,182 about the end of
March, and $21,448,000 on the corresponding
date in 1916. Of the total held about the close
of the month under review, $3,135,751 was
agricultural paper, $2,194,217 live-stock paper,
$21,805,509 industrial and commercial paper,
and $7,906,579 member banks' collateral notes.
Over 60 per cent of the agricultural paper of
all maturities was held by the Richmond,
Chicago, and Dallas banks, and about 60 per
cent of the live-stock paper by the Dallas bank.
Of the 7,634 member banks reported at the
end of the month, only 384, or slightly over 5

486

FEDERAL RESERVE BULLETIN.

per cent, availed themselves of their discount
privileges during the month. The number of
member banks in the three southern Federal
Reserve 'Districts rediscounting during April

JUNE 1,

1917.

was 184, as against 312 in April, 1916. Boston,
New York, Cleveland, and San Francisco are
the only banks which report larger numbers of
discounting members than for April, 1916.

Bills discounted by each Federal Reserve Bank during April, 1917, distributed by sizes.
NUMBER OF PIECES AND AMOUNTS.
Over 85,000
to 810,000.

4,095
30,069!
2,055
31,3691
1,501,
13,573.
25,721!
35| 6,515
1591 27,264! 114! 39,510:
3|
668 14! 6,231!

31
24^352! 24
27,124i 64
6,9211 27
333,9581 241
47,240! I l l
51,4351 70
44,157} 46
51,690! 105
49,024! 30
82,610 109
11,248 29

857,534
43,219
132,919!
51,492
410,771
197,681!
122,896!
79,277!
186,095!
46,267!
181,509!
54,100!

157
62
87
73
194
84
168
141
18
119
48

$757,730
307,200
371,859
348,286
803,048
332,157
452,880
817,613
630,317
67,019
483,186
219,765

$928,530
162,2811
248,274!
431,552j
870,499)
311,950
324,956
559,942
669,495
63,055
291,859
191,323

Total
S95J33,052J 750130,183 8791335,133 836 648,653 8871,5i
1,563,7601,249 5,591,060 590 5,053,716
0.4 ....!
1.1;....
2.2....
5.2|
18.5 ....;
Percent
|
O.lL...
i6.8
Member banks' col22,700 121 110,879
lateral notes
I

i

Bills discounted during the month of April, 1917, and 1916, and the four months ending April, 1917, and 1916, distributed
by classes.
Banks.

Boston
Now York
Philadelphia.
Cleveland
Yi iohmond
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas City..

Collateral
notes.

Trade
acceptances.

32,024.000
1,027,000
1,307,7001
4,110,000!
8,936,000!
735,000!
50 000:.
1,377,8791
140,000'

All
Commodity other dispaper. counts.

S69,926
10,452
24,199
823...
323,779!* 8611,6
195,600;i 243,8
!
48,046;.
i.

Total.

87,855,496 89,949,422
1,401,7711 2,439,223
1,053,5221 2,385,421
2,860,589] 6,971,412
2,293,121112,164,509
793,389! 1,967,822
3,176,4311 3,226,431
2,507,430; 3,933,355
3,962,497j 4,102,497
344,3951 344,395

Banks.

Collateral

notes.

Com- ! All .
inodity • otherdispaper. ' counts.

Trade
acceptances.

Total,

§170,000
Dallas
:S1,696,427 81,866,427
6,000 85,197 81,363i 692,327
San Francisco
704,887
Total April, 1917.. 19,883,579 678,022i 856,80528,637,395150,055,SOT
Total April, 1916. '
240,000:1,370,700; 9,910,800:11,521,500
Total Jan.-Apr.,
1917
) 14,115,317 :59,372,23ljll7,496,9S7
Total Jan.-Apr.,
1916
1,229,233 6,747,963 !31,711,204139,688,400

1 All cotton paper.

Amounts of discounted paper, including member banks'* collateral notes, held by each Federal Reserve Bank on the last
Friday in April, 1917, distributed by classes.

Banks.

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




Agricultural
paper.

853,694
93,189
21,200
854,657
310,683
671,611
148,983

Live- Commer- Member
cial and banks'
stock : industrial collateral
paper.
notes.
paper.

Total.

i84,499,472;$1.589,000 $6,088,472
37,016! 469,757! 210,000
740,467
636,611! 802,700 1,532,500
12,836i 1,756,138' 1,230,000 3,020,174
! 3,724,905! 2,777,000 7,356,562
116,044; 1,542,082! 350,000 2,318,809
2,662! 2,066,460' . 50,000 2,790,733
81,619; 2,367,965! 717,879 3,316,446

Banks.

Minneapolis..
Kansas City..
Dallas
San Francisco
Total...
Per cent

Agricul-i Live- Commer- Member
tural I stock cial and banks'
paper, i paper. industrial collateral
paper,
notes.

Total.

I

S296,378j $330,359"S3,033,281
173,554! 322,269;
71,110
410,126! 1,298,520' 1,045,566
101,6761 22,8921 592,162

000 53,750,018
566,933
90,000 2,844,212
716,730

487

FEDERAL RESERVE BULLETIN.

JUNE 1, 1917.

Distribution, by sizes, of bills bought in open market by all Federal Reserve Banks during April, 1917, and the four months
ending April, 1917, and 1916.
To 35,000.

I

To 825,000.

| To §10,000.

Acceptances bought in
open market.

To $50,000.

To 15100,000. ; Over §100,000.

"PI

Bankers' acceptances.
Trade acceptances

732 SI, 546,440; 255:$2,038,377 639 S13,123,188: 256 $10,969,233
16
107,904! 1
33,887
42,646| 15j 109,003|
8

Total, April, 1917
74.8
Per cent
March, 1917
389
February, 1917
819
January, 1917
390
Total, 4 months ending
April, 1917.
2,346
Total, 4 months ending
April, 1916
1,018

1,589,086s
3.9!
876,506;
2,175,639;
l,023,210J

87 S7,155,097| 38 *6,186, S16|2,007!i $41,019,15li 99.3
i 40!
.7
2 293,440!

270 2,147,380) 647 13,231,092: 25711,003,120: 87 7,155,097! 38
17.3!....
32.0;....
5.2!
26.6j
6,801,912; 25
175 l,381,029| 363 6,976,406! 171 7,185,125;
777i 6,324,0181,248 22,367,962; 401 16,483,974j 180 15,273,481! 49
483! 1,706,069! 300 5,238,208; 152 6,898,412: 48 3,891,515! 11

6,186,816:2,047
lo.Oj.
4,930,66011,2091
8,012,105i3,474i
1,859,768|l, 384|

41,312,591!
28,151,
70,637,179i
20,617,180!

100.0

5,664,4411,705111,558,496!2,558 47,813,666J 981 41,570,631 401 33,122,005: 123 20,989,349!8,114| 160,718,588

I

i

i

3,125,893: 894! 7,317,5S2|l,082

19,660,600! 29912,124,183 13210,769,8041 48 10,438,448j3,473J

63,436,510

1
2

Of the above amount, bankers' acceptances totaling $31,873,550 were based on imports and exports and 89,145,601 on domestic trade transactions.
Of the above amount, trade acceptances totaling 8290,440 were drawn abroad on importers in the United States and 83,000 were based on domestic trade transactions.

Acceptances bought in open market and held by Federal Reserve Banks as per schedules on file with the Federal Reserve Board
on dates specified, distributed by classes of accepting institutions.
Bankers' acceptances.
Date.

Feb. 22
Apr. 5
May 3
June?
July 3
Aug. 2
Sept. 6
Oot. 4.
Nov. 1.,
Dec. 0
Jan. 3
Feb.' • • " - 7,
Mar. 6,
Apr. 3,
Mayl.
Juno 5.
July 3.
Aug. 7
Sept. 4
Oct. 2
Nov. 6
Dec. 4
3an. 1
Jan. 8
Jan.15
Jan.22
Jan. 29
Feb. 5
Feb. 12
Feb. 19
Feb. 20
Mai'. 5
Afar. 12
Mar. 19
Mar. 26
Apr. 2
Apr. 9
Apr. 16
Apr. 23
Apr. 30
May 7
May 14
May 21




Nonmem- Nonmember trust ber State
companies. banks.

1915.

S93,000
_, „_, ___
3,653,000 I 37,820,000
5,038,000 8,189,000
,. «™ «nn
. J 5,242,000 4,516,000
• 4,342,000 5,267,000
! 5,350,000 5,407.000
6,087,000 6,305', 000
9,000,000 4,898,000
8,477,000 4,331,000
'12,311,000 5,172,000
15,494,000
'• 15,681,000
17,182,000
21,000,000
24,875,000
24,680,000
. 32,989,000
, ,
! 39,695,000
! 41,413,000
1 37,798,000
! 37,770,000
47,748,000

1916.

1917.

'

""26/666'

66,803,000
60,066,000
59,710,000
56,334,000
52,439,000
50,361,000
54,945,000
59,165,000
59,498,000
53,288,000
50,130,000
46,171,000
43,471,000
43,979,000
42,264,000
38,865,000
41,093', 000
45,247,000
49,192,000
56,294,000
59,105,000

Private
banks.

Foreign
bank
branches
and agencies.

Total.

Trade acceptances Total acbought m ceptances.
open
market.

20,000
132,000
253,000
275,000

SI10,000
110,000
192,000
163,000
352,000
472,000
343,000
204,000
396,000

893,000
11,593,000
13,347,000
9,960,000
9,770,000
11,129,000
12,884,000
14,373,000
13,265,000
18,154,000

7,160,000
7,876,000
8,670,000
13,573,000
15,4.00,000
17,029,000
18,921,000
19,060,000
20,356,000
21,782,000
29,474,000
33,232,000

302,000
336,000
408,000
473,000
585,000
644,000
471,000
738,000
72G, 000
712,000
1,014,000
1,630,000

822,000
456,000
781,000
262,000
430,000
007,000
830,000
940,000
491,000
944,000
147,000
069,000

23,838,000
25,349,000
28,041,000
38,308,000
44,290,000
! 49,300,000
J 64,211,000
I 73,433,000
! 74,986,000
I 70,236,000
! 80,405,000
! 98,679,000

3489,000
462,000
722,000
1,477,000
2,208,000
3,422,000
4,225,000
3,673,000
2,306,000
2,378,000
4,487,000

23,838,000
25,838", 000
28,503,000
39,030,000
45,707,000
51,5(58,000
67,633,000
77,658,000
78,659,000
72,542,000
82,783,000
303,166,000

34,625,000
32,467,000
30,691,000
26,286,000
22,744,000
23,511,000
33,473,000
35,745,000
3(5,478,000
32,518,000
28,709, (K)0
24,175,000
22,525,000
20,328.000
19,424,000
15,708,000
13,473,000
13,531,000
19,650,000
24,383,00 0
23,316,000

1,502,000 18,224,000
.121,154.000
1,325,000 16,915,000 j .
. 110, v73,000
1.245,000 15,81)2,000 .
107,508,000
1,140,000 14,119,000 j .
97', 885,000
1,054,000 12,949.000
89,18fi, 000
972,000 13,775'. 000
$140,000 88,759,000
1,2(55,000 ] 7,9o2,000
668,000 1108,303,000
1,208,000 21,842,000
677,000 1118,697,000
1,094,000 20,389,000 i
677,000 118,1^1,000
1,090,000 20.581,000 i
354,000 .107,837,000
815,000 19;503,000 i
290,000 99,543,000
135,000 17,607,000 !
228,000 88,916,000
167,000 84,323,000
645,000 17,515,000 i
200,000 82,020,000
(389,000 16,830,000 i
200,000 77,996,000
681,000 15,427,000 !
200,000 69,881,000
638,000 14,470,000 i
200,000 70,764,000
495,000 15,502.000 !
344,000 76,545,000
327,000 17,090,000 '
94,000 88,349,000
236,000 19,177,000
117,000 100,096,000
385,000 18,917,000
136,000 102,699,000
320,000 19,822,000

4,585,000
4,219,000
4,380,000
4,102,000
4,041,000
4,041,000
4,890,000
4,982,000
5,068,000
2,535,000
2,359,000
1,908.000
1,295; 000
1,144,000
1,344,000
1,310,000
1,461.000
1,371 ',000
1,079,000
1,986,000
3,027,000

125,739,000
115,022,000
111,894,000
10.1,987,000
93,22/, 000
92,800,000
113,199,000
123,679,000
123,204,000
110,36o,000
101,902,000
90,824,000
85,618,000
83,170,000
79,340,000
71,197,000
72,225,000
77,916,000
90,028,000
102,082,000
105,726,000

$10,000
10,000
10,000

£93,000
11,593,000
13,347,000
9,900,000
9,770,000
11,129,000
12,884,000
14,373,000
13,265,000
18,154,000

488

FEDERAL RESERVE BULLETIN.

JUNE 1,

1917.

Amounts of bills discounted and acceptances and warrants bought by each Federal Reserve Bank during April, 1917}
distributed by maturities.
15-day maturities.
Banks.

Acceptances.

Discounts.

30-day maturities.
Total.

Warrants.

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

$9,118,209
2,316,507 31,023,023
2,164,269
43,873
6,730,998
9,250,442
131,667
&33,649
30,000
1,207,981
2,713,018 I
252,628
555,000
29,510 i
4,303
224,414
126,302 I

S9,118,269
3,339,530
2,208,142
6,730,998
9,382,109
863,649
1,207,981
2,713,018

Total....
Percent

34,967,987 |

Discounts.

36,755,853 I
40.1 I

$180,269
30,753
137.441
125;824
509,808
211,296
451,247
724,023
982,267
88,985
178,608
200,577
3,821,098

8,335,022

Acceptances.

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

$454,771
39,924
53,762
67,466
1,393,348
420,936
1,408,387
188,549
2,406,583
20,137
745,610

$775,395
3,198,013
857,957
956,385
1,867,210
456,742
730,578
479,675
2,163,150
165,107
142,422
2,161,325

Total.
Percent

7,415,839

13,953,959

Total.

$2,563

2,179,500
84,525
91,268

Discounts.

§1,230,166
3,237,937
911,719
1,023,851
3,260,558
877,678
2,138,955
668,224
4,569,733
185,244
991,798
2,402,940

§196,113
52,039
26,477
37,016
927,872
370,824
92,881
266,051
258,107
98,146
388,719
139,828

129,015 ! 21,498,813
23.6

2,854,073

$103,766
25,249

7,763 I 12,163,883
........
13.2

Warrants.
$435,057
3,680,262
3,629,819
1,705,125
513,989
257,795 j
2,018,018
948,768 |
066,430 I
460,251 !
220,706 |
1,819,600 |
16,355,820

Total.
$631,170
3,732,301
3,656,296
1,747,260
1,441,861
630,619
2,110,899
1,214,819
924,537
558,397
609,425
1,959,428

$5,119
2,000

7,119

19,217,012
20.9

1

Dis- Acceptcounts.

Warrants.

Total.

Total.
Discounts.

Accept-

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

$19,020
83,472
!$126,667
10,108 227,"l28" 1 9,722
83,039 500,000
131,117
65,935
41,714 27, 657
202,912
107,617 31,119
'"" 076
21,814 75,666

Total.,
Percent

996,804 879,924 I 136,389 12,013,117 50,055,801 41,312,591
!
2.2




$214,904
1,797,850
874,599
128,387
3,182,660
630,006
590,152
939,595
3,161,767
173,510
178,608
291,845

90-day maturities.

Warrants.

Over 90-day maturities.
Banks.

Total.

$34,635
1,767,097
737,158

60-day maturities.
Banks.

Warrants.

2,672,852
413,510
138,905
215,572

807,628
33,813
224,414
126,302

1,787,866

Acceptances.

Warrants.

$9,949,422 81,245,087
$19,020 2,439,223
130,139 2,385,421
246,958 6,971,412
583,039 12,164,509
131,117 1,967,822
65,935 3,226,431
69,371 3,933,355
202,912 4,102,497
344,395
138,736
329,076 1,866,427
704,887
96,814

9,687,415
5,268,807 $126,667
2,888,638
17,404
5,685,71S
1,158,047
7,200
2,887,501
1,671,672
5,564,080
745,305
363,128 103,766
4,147,193
25,249
280,286

Per cent.
Total.

Dis- Accept- Warcounts.
rants.

$11,194,509
12,126,638
7,780,895
9,877,454
17,850,227
3,133,069
6,113,932
5,605,027
9,666,577
1,089,700
2,333,321
4,877,329
91,648,678
100.0

11.1
79.9
67.7
29.3
31.9
36.9
47.3
29.8
57.6
68.4
15.5
85.0
54.6

45.0

Total.

4.5
0.6

100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

0.4

100.0

1.6
0.2
0.3

489

FEDERAL RESERVE BULLETIN.

JUNE 1, 1917.

Maturities of discounts, acceptances} and municipal warrants held by the Federal Reserve Banks on Friday,
Apr. 27, 1917.
[In thousands of dollars; i. e., 000 omitted.]
1 to 15 days.
Banks.

Bills discounted.

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

4,964
445
1,334
2,872
3,981
872
595
2,132
866
85
498
225

Total.
Percent

18,869

Acceptances
bought.

16 to 30 days.

Municipal
warrants.

1,898
5,106
1,948
1 078
2,645
703
985
894
2,408
510
423
555

6
175
53
69

25

Total.

Bills discounted.

Acceptances
bought.

544
136
104
36
953
291
521
635
764
56
424
122

5,726
3,335
4,019
6,626
1,583
1,611
3,051
3,274
620
921
780

1,762
4,570
1,481
840
1,688
991
1,067
542
2,093
423
209
599

38,414
31.6

19,153

Bills discounted.

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

Acceptances
bought.

Municipal
warrants.

Total.
Percent....

2,428
3,492
4,007
1,305
1,391
792
1,960
657
1,365
225
124

4
2,034
832
177
380
488

21,740

416
119
79
65
1,720
669
1,435
232
1,678
113
1,123

12,207

127
4,663
1,267
1,627

Over 90 days.
Banks.

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




61
129
1,248
15

121
160
97
49
215
154
327

152
112

i
1,167

51
20
203
1,991

Bills

ed.

2,306
4,706
1,585
878
2,641
1,282
1,588
1,177
2 857
479
685
721

54

20,905
17.2

61 to 90 days.

Total.

Bills discounted.

Acceptances
bought.

2,971
8,274
5,353
2,997
3,111
1,465
5,429
1,721
3,220
718
1,735
4,882

164
40
10
39
582
327
143
268
227
159
472
60

41,876
34.5

2,491 j

Municipal
warrants.

652
3,427
3,276
1,416
1 050
246
1,543
688
305
226
68
1,345
14,242

Total.

Bills Accept- Municdisipal
ances
count- bought. wared.
rants.

Total.

52

16,265

31 to 60 days.
Banks.

Municipal
warrants.

Total.

255

816
3,722

100

1,455
1,632
573
1,686
1,056
532
385
540
1,405

355

17,088
14.1

Percentages.

Total.
Accept- Municipal
ances
warbought. rants.
Per
Amount. cent.

Bills Accept- Municdisipal
ances
count- bought. war- Total.
ed.
rants.

6,740
16,595
10,712
4,639
6,774
2,732
5,555
2,781
6,171
1,384
824
6,493

133
5,154
1,449
2,946
15
12
2,217
1,069
177
456
560
811

12,961
22,489
13,693
10,606
14,146
5,063
10,563
7,166
10,098
2,407
4,228
8,021

10.7
18.5
11.3
8.7
11.6
4.2
8.7
5.9
8.3
2.0
3.5
6.6

47.0
3.3
11.2
28.5
52.0
45.8
26.4
46.3
37.1
23.6
67.3
8.9

52.0
73.8
78.2
43.7
47.9 |
54.0 j
52.6 i
38.8 !
61.1
57.5
19.5
81.0

1.0
22.9
10.6
27.8
.1
.2
21.0'
14.9
1.8
18.9
13.2
10.1

100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

3,158 i 35,042 71,400
2.6 ! . . . . . . . .

14,999

121,441
100.0

100.0

28.9

58.8

12.3

100.0

61
134
1,257
136
160
249
161
215
205
347
233

740
1,532
3,021
7,357
2,319
2,791
3,316
3,750
567
2,844
717

490

FEDERAL RESERVE BULLETIN.

JUNE I,

1917.

Total investment operations exclusive of purchases of 3 per cent United States certificates of indebtedness of each Federal
Reserve Bank during the months of April, 1917, and 1916, and the four months ending April} 1917, and 1916.
Bills bought in open market.

Bills
discounted
for
member
banks.

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

Bankers'
Trade
accept- I acceptances.

39,949,422
2,439,223
2,385,421
6,971,412
12,1(54,509 !
1,967,822
3,226,431
3,933,355
4,102,497
344,395
1,866,427
704,887

Federal Reserve Banks.

SI,245,087
9,673,181
5,268,807
2,888,638
5,685,718
1,155,047
2,887,501
1,671,672
5,564,080
745,305
363,128
3,870,987

50,055,801
11,521,500
117,496,957
39,688,400

Total, April, 1917
Total, April, 1916
Total, 4 months ending April, 1917..
Total, 4 months ending April, 1916..

j 41,019,151
I 17,565,600
157,860,802
! 61,308,000

Municipal warrants bought.

Total.

SI,245,087
9,687,415
5,268,807
2,888,638
5,685,718
3,000
1,158,047
2,887,501
1,671,672
5,564,080
745,305
363,128
276,200
4,147,193

814,234

293,440
933,500
2,857,785
2,128,500

Boston
New York
S40
Philadelphia
1,270,500
Cleveland
Richmond
502,000
Afclanta(including New Orleans branch)..
Chicago
583,500
St. Louis
511,000
Minneapolis
Kansas City
Dallas
San Francisco
2,807,04.0
Total, April, 1917
9,436,100
Total, April, 1916
Total, 4 months ending April, 1917.. 13,947,200
Total, 4 months ending April, 1916.. 28,013,000

SI,220,000

7,200

103,766
25,249

103,766
25,249

April,
1917.

Total.

40
2,490,500
505,000
583,500
511,000

$940,000
25,250
3,828,000

§126,667
17,404
7,200

13,853
50,600
604,030
133,000

280,280
10,361,100
14,894,471
41,044,100

Total investment operations.

3,000

3,000
53,500
114,440
2,962,380

Total.

I
S6,653 i

266,433
j 41,312,591
! 18,499,100 11,113,200 3197,300
2,040
1160,718,587 14,288,401
i 63,436,500 40,448,200 462,900

1-year
notes.

2 per cent. 3 per cent. 4 per cent.

All other.

§126,667
10,751

United States bonds and Treasury notes.
Federal Reserve Banks.

State.

City.

April,
1917.

April,
1916.

April,
1916.

Per et. Per ct.
1.1.7
8.9
12.6
26.2
8.2
10.4
13.0
9.1
18.6
7.7
3.8
5.3
6.3
12.2
6.5
2.0
10.6
2.7
1.2
4,4
2.4
6.7
5.1
4.4

11,194,509 $4,511,200
12,126,638 13,344,600
7,780,935
5,296,500
12,367,954 4,628,600
17,850,227 3,936,900
2,702,800
6,197,100
6,113,932
1,019,800
6,188,527
10,177,577 1,354,300
2,263,300
1,089,700
2,333,321 3,389,900
2,210,300
4,877,329

1,220,000 j 4.090,040 95,738,718 !
50,000 i 10,479,600
.: 50,861,300
3,558,000 17,644,890 310,754,905
50,000 34,853,380
.179,022,380

100. 0

100.0

United Stales bonds, notes, arid certificates of indebtedness held by all Federal Reserve Banks on Apr. SO, 1917, distributed
by maturities.
United States bonds with circulation privilege.
Bank.

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

2 per cent
consols
of 1930.

,

2 per cent
Panamas
of 1936-38.

£750
50
G, 400

915,100
640,600
1,862, f,00
100
323,050
i 7,105; 850
'• 2,450,900
i 2,428,750

I

Certificates of indebtncss.
2 per cent. 3 per cent. of 1946-47.

S3,000,000
20,000,000
3,500,000
* 2," 586,' 560' " 82," 369," 2003,500,000 $2,870,000
2,000,000
1,500,000 1,091,500
2,581,000
635,000
1,768,000 5,000,000
2,500,000
785,000
1,080,000
2, GOO, 000
206,250
1,194,180
2,500,000
825,000
2,000,000
900,000
2,500,000 2,690,000
S50,000 j

$100
407,200
237,000
21,000
367,300
16,260
22,240
281,500

15,734,050 I 1,412,600

7,491,740

Total United Slates bonds with circulation privilege




4 per cent
loan
of 1925.

3 per cent
loan
of 1918.

United States securities without circulation privilege.

5,168,450
$29,806,840

50,000,000

8,971,500

$529,
1,255,
549,
414,
10,
427,
1,153,
114,
838,
1,233, 600
6,526,500

notes.

S2,194,000
2,788,000
2,548,000
1,865,000
1,909,000
1,491,000
2,985,000
1,444,000
1,340,000
1,784,000
1,430,000
1,500,000
23,338,000

3 per cent
Joan
of 1961.

sioo
500

900

Total.

$5,723,750
24,093,550
6,597,300
14,079,160
5,12.1,100
4,754,500
15,626,600
6,902,400
5,195,010
13,075,590
8,296,000
9,118,750
118,643,740

Total United States securities without circulation privilege.. §88,836,900

JUNE 1,

491

FEDEKAL BESEEVE BULLETIN.

1917.

RESOURCES AND LIABILITIES.
Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve System at close of business on Fridays,
Apr. 27 to May 25, 1917.
[In thousands of dollars; i. c , 000 omitted.]
RESOURCES.
New
Boston.! York.
Gold coin and certify
catos in vault:
Apr. 27
May 4
May 11
3 Lav 18
May 25
Gold settlement fund:
Apr. 27
Mav 4
Ivloy 11
Kay 18
May 25
Gold redemption fund:
Apr. 27;
Hay 4
May 11
May 18
May 25
Legal tender notes,
silver, etc.:
Apr. 27
Mav 4
Hay 11
MavlS
May 25
Total reserve;
Apr. 27
May 4
Slav 11
MaylS
May 25
Five per cent redemption fund against
Federal
Reserve
Banknotes:

13.605
14,282
14.605
lo.126
15)619 j

Philadelphia.

Cleveland.

RichSt.
mond. Atlanta. Chicago. Louis.

l-">5,072
183,376
178,416
189,62,"}
168,255

24,580
20,995
22, !.?7
23,752
24,875

18,558
18.692
19,390
19.844
20,619 j

6,460
6,674
6,762
6.872
6)979

13.1.84 ! 75,767
30.046 S 27,345
17.907 71,493
22)421
37.809
7,069 95,376

3,872
14,992
12,240
4,854
2,217

22.845 I
27; 630
23,139 !
18,041 !
23,041 I

16.200
20)080
12,513
13,090
9,102

250
250
250
250
250

250
250
250
250
250

50 i
40 I
37 j

608
644
700
694

23.871
33; 178
29,155
20,419
30,076

556
593
430
37o
445

112
102
147
137
149

136
128
138
172
179

27.411 I 254,960
44', 820 1 244,149
33)094 I 279.314
38.015 I 248.103
23'. 252 293.957

29, 258
36,830
35,047
29,231
27,787

41,570
46', 474
42,728
38,059
43,843

23.410
27)532
20,113
20.828
16)948

34 I

Minne- j Kansas
apoiis.
City.

6.0i)2 j 34,107
6! 134 34.370
6) 153 34) 243
5,647 34.948
6) 108 35)889

8,899
9,895
12.718
12'. 437
11)755

21.947
24)445
2."j, 081
29,208

214 !

2.025
«'. 410
9)704
7,462
1,994
85
167
226
278
259

1,347 i
1,325 j
1)818 !
2,053 :
1,575 i

1.430
1) 273
1, 332
1,234
1,396

295
241
270
244
285

12,439
16,745
23,980
21.411
15,404

17,688
17,857
18,750
20,539
17,719

7,115
7)927
4,311
4.973

l',775 j 16,182

380 I
401
443
4^2
503

20-1
207
506

12.055
7,891.
12'. 031
7.903
7) 951
12:110
7.978
12) 122
8) 016
12,213
4,988 26,133
5,256 j 34,812
6,118 : 24,929
" ""
7,923 j 22.233
4:888 1 15.380
350
2oO |
353 i

Total.

8, 420
8,476
7,755
7. 841
8) 109

15,993
13,310
11.605
1-<:077
15,828

3M.798
336,118
336,S4I
•'550,269
334,265

9, 463
9) 786
5.206
7'. Uo
1)833

4,381.
11.; 175
9) 05S
12: 810
4,753

207,920
2UU)10
221,759
187,960
183,590

157
155
150
144
142

80
101
97 I
125 i
123 j

38
13
14
15
12

1.064
l) 098
1,278
1)278
1.273 i

?.. 518
2,669
2.687
2)754
2,905

i
512
442
1)34
418
514

883
934
944
097
14,476
lo)398
11,851
12.0o9 !

57,605
60.347
61)348
66,423
53,860

i
i
j
I
i

'21.,
'1
May 4
ATH 1 .

May 11
May 18
May 25
Bills discounted members:
6,089
Apr. 27
3,763
Mav 4
2,803
May 11
4,058
May 18
3,463
May 25
Bills bought in open
market:
6,740
Apr. 27
7,530
Mav4
May II
' 11,506
11,676
May 18
12,014
May 25
United States bonds:
530
Apr. 27
530
May 4
530
May 11
530
May 18
May 25
1-year Treasury notes:
2,194
Apr. 27
2,194
Mav4
2,194
May 11
2,19-1
May 18
May 25
! 2,194
United States certificates of indebted
ness:
3,000
Apr. 27
May 4
3,000
3,000
May 11
May 18
3,000
May 25
3; 000




San
Francisco.

Dallas.

34, 219
42,883
33) 044.
30,370
23)550

300
300
300
300
300

2,781
3,234
4,415
4,565
5,102

6,171
5,473
4,830
3,871
2,276

1,384
1,718
2,271
2,913
3,085

824
963
934
998
880

7,007 \ 2,233
7,006
2,233
7,006
2,233
7,007
2,233
7,007
2,233

1,743
1,743
1,743
1.857
1)982

8,792
8,792
8,702
8,812
8,842

3,966 I

2,985
2,985
2,985
2,9S5
2,985

1,444
1,444
1,444
1,444
1,444

1,452
1,452
1,452
1,340
1,340

5,680 | 3,235
3,205
5,005
6,261 ! 2,714
5,253 ! 2,505

2,000
2,000
2,000
2,000
2,000

2,319
2.414
2)420
2,860
3,328

2,791
2,745
3,025
2)716
3,235

16,595
24,135
27,757
29,028
34,780

10,711
11,369
12,843
12,623
12,814

4,639
5,883
7,885
10J294

6,775
6,590
6,033
6,061
5,622

2,732
2,823
2,677
2,421
2,165

5.555 •
6)219 i
7,788 '
8,161 !
9,129 j

5.844
5,844
5,844
5,844
5,844

1,152
1,152
1,152
1,152
1,152

672
672
672
672
672

1,865
1,865
1,865
1,865
1,865

1,969
1,969
1,969
1,969
1,969

1,491
1,491
1,491
1,491
1,491

4,940
5,485
4,955
3,710
3,551

2,000
2,000
2,000
2,000

2,788
2,788
2,788
2,788
2,788

20,000
27,270
20,002
20,000
20.906

549 j
549 I
549 !
549 !

549 I
2,548
2,548
2,548
2.548
2,548

3,500
3.500
3,500
3,500
3,500

2,382
2,567
2,810
2,810

.
;
•
:

!
i
!
;
I

i

i

2,500

?-' }-•;

400
400
400
400
400

2,84.4 i
3)174 i
3,021 I
3,064 I
3,5G8 !

7,356
7,528
7,424
9,515
8,772

1,306
1,306
1,306
1,305
1,307

100
100
100
100
100

567
545
1,278
1,448
2,967

3,020
2,219
1,751
1,367
3,049

552, >76
597,112
597,436
568. AM
557)652

I

2.1,

3,750
4,229
5,272
5,663
5,617

1,533
2,158
5,790
8,921
8,296

36)892

20, 513 1
(MR
23, 77i
27, 007
20, 712

19.027
19)461
14,396
16,3S0
11,338

3,317
2,792
2,876
2,488
3,806

740
3,576
3,021
1,940
651

30.340
30. 41.:i

90
88
89
300
92 i

717
773
853
806

35,043
35,916
39,534
44,846
47,587

6,493
7,934
8,216
9,250
9,216

71,400
83.871
97)155
1.00,177
107,377

3,966
3)986
3.966
3,1)66

2,429
2)429
2,429
2:420
2,429

30,223
36,222
36.222
36) 386
38,513

1,784
1,784
1,781.
.1,78-1
1,784

1,430
1,430
1,430
1,430
1,430

1,500
1,500
1,500
1,500
1,500

23,450
23,450
23,450
23.338
23)338

2,933
2,500
2,906
2,510

2,900
2,900
2,918
2,905
2,919

5,495
5,165
5,023
4,473
4,650

58,145
64,597
58,089
54,666
57,807

2,780

i
i
!
!

492

1, 191.7.

FEDERAL RESERVE BULLETIN.

Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve System at close of business on Fridays,
Apr. 27 to May 25, 1917— -Continued.
j In thousands of dollars; i. c , 000 omitted.]
RESO U ROES- Continued.

Boston.

Municipal warrants:
Apr 27
May 4
Mav 11 .
Mav 18
Mav 25..
F e d e r a 1 11 e s e r v e
notes—net:
A p r 27
Mav 4
Mav 11
Mav 18
May 25.

Due from other Feder a i R e s c r v e
Banks---net;:
Apr. 27
Mav 4
May 11
Mav 18
Mav 25
Due from depositary
banks—Fiscal Agent
account:
May 18
AJ'av 25
(Tncoilected items:
Apr 2 7 . . .
Mav 4
May 11
Mav 18
M ay 25..
All other resources:
Apr 27
May 4..
Mav 11
May 18
May 25
Total resources:
Apr.
May
Mav
Mav
May

133
127
127
127
127
9 7"2
2 432
2,280
1 913
2.051

Now
York.

5,154
5,079
5,029
5,029
5,029

Ph i liidel pi Ha.

Cleveland.

1,419
l',422
1,-122
1,422
1.422

2,947
2,.S-!3
2; 883

Richmond.

15
lo
15
15

2,'i\>o

Ali ant a. Chicago. L(.!ui.s.

2.217
2,186
2,186
2,1«6
2', 3 86

12
11
5
31

14,798
15 781
17,225

177

456

177
177
1.77
177

431
431
•431

431

Tolnl.

.811
811
811
811
811

14,999
14,755
14,688
14,039
14,675

1 008
1,789
1,051
1 691
2,010

560
560
560
508
508

320
303

20 K'32
23 56]
24,080
26 4o8
28!416

5,94.9
2,094
2.903
2 543
1,002

1 132
1 5,243
1 1,345
J 3 057

•

6,559
' 209

6,732
4,138
2,348

3 958
269

4,468
1,935
9,591
3 305

2,085
860
2,3,19
1,552

4,031

2,895
4,398
3,088
1 'Mo
809

7,575
?., 158
13,485
5 349
211

83,361
122,249

71
921

6,982
889
2,71L

2,887
3,022

3,472

975

2 ' 138

84 461
122 349

1,100
100

16,652
50,554
12,040
•10,502
22; 194 '144,413
16,147
43,445
29,615 150,535

24,357
22', 639
30,546
24,515
28,195

13,504
13', 689
11,589
16,473
15.170

9,338
9,606
10,580
9,850
11,414

10,169
8.400
8; 994
9,385
9,781

31,439
34,004
37,332
29,575
39,156

13,127
10,642
9.456
10', 597
5.302

39
51
28
22
27

854
1,237
1,341
1,332
1,475

497
574
588
1,422
919

216
100
209
311
172

120
82
61
73
72

1,138
1,001
1,034
• 740
791

797
656
789
512
721

497
460
639
407
687

117
116
85
97
93

363,925
363,664
499,769
452,112
654,933

80. 961
81.798
92; 8-33
88,689
86,030

84,410
87,564
90. 690
84,055
88,382

54,300
57.334
Si', 686
51,469
49,516

38,286
39,173
35,041
33,791
31.043

127,7.12
129,449
146,766
136,702
131.323

40,141
41,869
49.721
46.693
40'. 993

10,454
8; 0o7
11J92

4,962
5,071
5,806
6,518
7.117

72,292
80.625
80; 104
77,682
76.542

27
4
11
18
25

Sa n
Francisco.

Kansas
City.

•1,061
4,238
4 561
• 435
V
5.425

1 397
1,177
1,390
! 638
I. 099

10 974

1,06S
1.043
1.013
1,043
1,043

Minneapolis.

38,060
•U; 005
•13,137
12,062
38.321

14'. 889

6,236
6,1162
7,722
6,023
7.871

14,050
12.117
10,504
9,104
9.734

204,842
184,639
310, (185
192; 830
328,779

174
176
306
181
197

1,172
757
845
646
843

136
202
153
258
427

5,757
5,412
0.078
5,981
6,424

68,365
68,988
05.372
62'. 551
60'. 903

39,059
36* 867
36,029
33.419

59,191
59,4."2
57,214
59 <N^1
53,390

1,023,589
1,075.178
l'. 209; 162
f, 155,673
1.341.952

3.089
3,081
3.081
3; 081
3,. 150

2, 7>'3
2,744
2,747
2,718
2,754

3,935
3,035
3; 935
3,934
3., 935

50,409
50,859
56,859
50,8(58
56,991

10,726
JO,876
10,436
2,600
2,272

8,926
9,014
(>, 623
4,642
2.282

11,856
12.678
10'. 896
13;120
6,391

99,689
107,868
242,421
187,127
198,463

27,843 ! 46,926
28.7-15 ' 48,196
27', 938 : 43', 762
27,340 ! 47,983
27:084 : 47.427

22,527
23,395
22,376
22.382
22/. 763

39,042
39,436
38.958
3S;524
39.098

719,785
743; M3
740,72(5
748,499
813.326

3,179
3,050
3,080
3,641
2.875

4.212
3', 256
3,293
4,171
3,836

129,032
122,761
.134,447
336,750
170.151.

LIABILITIES.

I

Capital paid in:
• Apr. 27
May 4

.'

Mav 11
May 18
May 25
{J 0vernment depos its:
Apr. 27
May 4
Afav 11
Mav IS
Anr 25
Due to members—reserve account:
Apr. 27
May 4
May 11
Hay .1.8
May 25
Co 1! ect ion j terns:
Apr. 27
May 4
May 11
May 18
May 25.
Federal reserve n o t e s net :
Apr 27
Mav 4
May 11.
Mav 18
May 25




o, 059
5,074
o!074
5', 082
5.090

11,883
12,073
12,075
12,059
12,060

5,253
5.253
5', 253
5,263
5.205

6,2-10
6,239
(i, 240
(), 243
6.250

3,431
3.438
3; 438
3,440
3,436

2,418
2,393
2,388
2,388
2,388

7,002
7,057
7,057
7,057
7.. 057

2.945
3; 140
3,139
3,139
3,139

2.431 I

7,917
14,695
18 688
10,646
9,414

18,211
7, 779
105,532
111,493
140.431

(i, 504
9,224
15. J56
10;050
8.121

3,357
8, 780
18,247
4,150
4.810

7,546
8,305
4,548
3,236
2,316

10,988
12,594
8,5(18
6,053
4,404

8,01-1
7,895
30,076
14,244
12.897

1,795
1.821
7,643
2, 579
2,711

3,849
4,147
6,008!
4,314 ;
2,414 ;

49,115
50,840
44,290
49,277
44,157

262,369
274,673
295,148
287,071
359:645

43,532
44.91(5
47', 215
4.8,402
47.634

61,290
60,332
54,583
58,677
62.175

25,652
26,404
25,092
25,5(53
24;155

18.574
17'. 907
17', 869
18,443
17.661

97,116
99,970
96.876
9i>; 871
95.101

25,793
28,269
26,619
27.906
26'. 426

10,128
9,891
11,894
11,924
17,724

29,524
28,986
37,075
26,914
66.529

22,753
20,621
22,011
22,681
21.805

13,517
12,213
11,020
14,985
14.516

7,860
8,268
8,655
8,911
9.195

4,520
4,890
4; 908
5,490
4.821

15,580
14,527
12,757
18,530
16,268

7,499
7', 161
8,618
8,502
3,01.8

2,606:
3,063
2,787 ;
2,888 :
2,383 !

9,811
10,790
9,935
9 940
10.394

1,786
1,389
1,308
1.417
1,769

*

1,557
1,478
3,702
4 356
5.699

1,182
•2,618
3,963
4,091
3,186

2,786
1,654
2,682
2 102
2,181

2.432
2.432
2; 134
2.467

i
j
:
'

7,624
6,835
7,749
8,113
7.181

777 j
833 !

1 104
1,045
2,041
1,965 :
2,039 .

1 Difference between net amounts due from and net amounts duo to other Federal Reserve banks.

18,220
18', 974
23,975
24,648
20,201

JUNK 1,

493

FEDERAL RESERVE BULLETIN.

1917.

Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve System at close of business on Fridays,
Apr. 27 to May 25, 1917—Continued.
|7n thousands of dollars: i. <>., 000 omitted.]
LIABILITIES

Due to other Federal
Reserve Banks—net: •
Apr. 27,
May 4
May 11
May 18.
May 25.
All other liabilities,
including f o r e i gn
Govern merit credits:
Apr. 27.
May 4
May 11
May 18
May 25,
Total liabilities:
Apr. 27
May 4
Mayll
:
May 18
May 25
=

72,292
80,625
80,104
77,682
76,542

363,925 : 80,961
| 363,664 •81,798
j 499,769 ',
92,833
: 452,112 = 88,689
j 654:933 ; 86,030
\
i

84,410
87,564
90, 090
84,055
88.382

54,300
57,334
51,686
51,469
49.516

Continued.

38,286
39,173
35,041
33,791
31.043

i 127,712
i 129,449
i 146,766
: 136,702
! 131.328

38,060
41 005
43,337
42,062
38,321

40,141
41,869
49,721
46,693
40,993

I
i
i
I
!

68,365 I 39,059 j
68,988 i 39,673 !
.,.....,- ,
65,372 36,867)
62,554
30,029
60,963 33,419

59.191 1,023,580
59)482 1,075', .178
57,2.14 1,209)162
1,155.673
531390 1,341)952

FEDERAL RESERVE NOTES.
Federal Reserve note account of each Federal Reserve Bank ai close of business on Fridays, Apr. 27, lo May 25. 191.7.
[In thousands of dollars; i. e. 000 omitted.]

Boston.

Federal Reserve notes
received from a g e n t net:
Apr. 27
May 4
May 11
May 18
May 25
Federal Reserve notes
held by bank:
Apr ."27
!
May 4
'
May 11
i
May 18
:
May 25
1
Federal Reserve notes \
in circulation:
!
Apr. 27
!
Mav 4
;
May 11
:
May 18
i
May 25
1
Gold a n d l a w f u l :
money deposited j
with or to credit of !
Federal Reserve ;
Agent:
I
Apr. 27
i
!
May 4
?"" M a y l l
;
E: May 18
May 25
;
Commercial paper d.e- .
livered to Federal :
Reserve Agent:
!
Apr. 27.."
i
May 4
'•
Mayll
!
May 18
•
Mav 25




:

New
York.

21,383
21,363
21,930
21,912
22,640

193,594
198,163
201,640
205,229
208,620

2,772
2,432
2,280
1,913
2,051

10,974
13,622
14.798
15'. 7S1
17', 225

Phila,- ; Clove- 1 Richticlphia. j land, j mond.

Kansas Dallas.
City. ;

15,482
15,682
15,6.19
15,727
16,403

22,563
23.145
23;520
23,486
23,365

24,992 ; 20,563
Oil r*TT . or*, o n o
24,977
20,393
25,369
20,175
25,268 20,135
25,955 ; 19,919

4<K)
809
685
551
928

828
992
1,147
1)019
971

1,266
983
786
353
932

21,735
22,153
22,373
22)467
22,391

23.726
n, 994
24,583
2-1,915
25,023

1,433 ! 21,919
31,383 : 22,227
" "'"
31,680 ' 23,981
24,882
32,630
33,373
27,334

16.522
16', 770
17.059
161908
17,014

19,836
19,686
19,573
19,035
19,130

1,397
1,177
1,390
1,688
1,699

776
604
854
746
965

785
732
813
854
502

15,746
16,166
10,205
16;162
16,049

19,051
IS", 954
18,760
18,781
18,628

14,992
36,242
14.873
38,895
41,924' 14)934
44,490
15,176
47,051 .15,480

5,935
5l 376
(V, 270
6,222
5,655

17,265
17,565
17,452
17,364
16, 859

40,303
43,133
46,485
49,925
52?7

13,435
13,395
11,232
10,820
9,781

11,285
11,629
11,157
12,124
11,987

2,575
2,125
2,125
2,278
2^79

I
i
I 1,013 I
I 2,461 i
! 1,301
i

2,053
2,295
4,393
4,922
6,635

40,303
44,133 .
48,945 !
i
51,205
52,476 i

I

Minneapolis.

St.
Louis.

Atlanta.'Chicago.

!

San

:

Fran- • Total,
cisco. i

IS, 954
20,952
20,910
21,889
21,854

446,54-1
458.874
470; 401
478,906
488,088

I
1.361 i
1)726 !
1,098 I

808 !
729 !

4,001
5,238
7,021
6,715
5,'125

224
268
260
336

1.098 I
1)780 :
1,051 i
1,691 i
2)010 !

26,035
30,372
32,183
32,405
88,6SK

I
18,611 i 182,620
18.931 i 184,541
19* 650 ; 186,842
19.999 189,-IIS
20)5S9 191,390

20,069 :
29.657 I
30,582 :
31,822 i
32,614 i

20,522
21,050
22', 591
23,244
25,635

25.288 ; 21,019
28,003 1 22,227
27,900 , 23,981
2])912 j 205.! 229
20^720 j 24)882
.?..?., f>-10 j 2 0 8 ; 69,0 30, -163 i 27', 334

2i,S83 ! 193.59-1
21,363 ' 198)163
21', 930 i 201.640

4.136
3,390
3,790 i
2,917 !
2,917 I

!
I
i
j
!

20,553 !• 21,0-16
.
19,535 24.297
18,410 : 24)289
18,376 • 24,138
19)205 : 2-1,090 i
:
!
2,010 ;
3,610 I
5,110 :
'
5,110
A, 160 !

1,114
784
1,194
1,130
1,892

20.339
20', 125
19:915
19; 799
19,673

17,856
19.163
39)859
20,198
19,844

j
!
!
!
i

420.509
42S!">O2
43S'.E18
4461501
454)-HW

19,235 = 1S,9->1 ! 422,905
19,080
20,952 ! 433.08f>
17,874
20,910 I <i:-8)32"
17,831
2!,SS9 ' 'I!^,:*!!
17)634
21,851 i '!5f!,r>|.l

2,758
2,497 :
2,516 :
2,639 :
2)815 :

25. 981
271313
32)776

32/21
32,685

494

FEDERAL RESERVE BULLETIN.

JUNE 1, 1917.

Federal Reserve note account of each Federal Reserve Agent at close of business on Fridays, April 27 to May 25, 1917.
[In thousands of dollars; i. e., 000 omitted.]

Boston.

New
York.

phia.

At- • Ciiiland, i mond. lanta. ' cago.

St. I Mimie-1 Kansas
Louis. ! apolis. j City. Dallas.

Total.

FEDERAL RESERVE NOTES.
Received from Comptroller:
Apr. 27
39,680 333,280 43,440 32,200 29,500
May 4
i 39,680 339,280 52,140 32,200 29,500
May 11
! 39,680 345, 920 52,140 35,600 29,500
M a v 18
; 3 9.6 80 358.340 52,140 35,600 30,100
May 25
j 39; 680 383; 440 57,340 35,600 30,100
Returned to Comptroller:
i
9,778
Apr. 27
j 9,547 71,786 8,167
5,341
5,433
9,880
May 4
i 9.567 72,017 8,217
May 11
i lOiOOO 72,400 8,320 5,479 30,056
May 18
: 10.018 72,611 8,370 5,578 10,207
5,626 10,406
May 25
! 10,290 72,820
Chargeable to Federal Reserve j
Agent:
A pr. 27
30,133 261,494 35,273 26,859 19,722
May 4
30,113 267,263 43,923 i 26,76" 19,620
May 11
i 29,680 273,520 43,820 30,121 19,444
May 18
! 29,662 285,629 43.770 30,022 19,893
May 25
29,390 1310,620 48; 713 29; 974 19,694
In hands of Federal Reserve Agent:
Apr. 27
8.750 .67,000 4,840 4,940 3,200
Mav 4
! 8', 750 69,100 12,540 4,540 2,850
May 11
i 7.750 71,880 12,140 6,140 2,885
400
; 140 i o,uo 2,985
May 18
J "t, 750
May 25
6,750 102,000 15,340 | 2,640
Issued to Federal Reserve "Bank less
amount returned to Federal "Reserve Agent for redemption:
Apr. 27
;
| 21,383 193,594 80,433 | 21,919 16,522
May 4
| 21,363 198,163 3J,383 | 22,227 16,770
May 11
j 21,930 201,640 31,680 i 23.981 17,059
May 18
! 21,912 205,220 32,630 | 24,882 16,908
May 25
! 22,640 308,620 33,373 | 27,334 17,014
Amount held b y Federal Reserve
Agent:
Ln reduction of liability on outstanding n o t e s Gold coin a n d certificates
on h a n d Apr. 27
__,__. 183,881 3,730 10,313
May 4
20,260 188,678 3,730 10,457
May 11
20.800 191,538 3,730 10,238
May 18
20) 860 195,338 3,730 10,048
May 25
j 19,310 197,938 3,730 9,830
Credit balances—
'
In gold redemption i
fund—
!
1,483
435
1,106
Apr. 27
| 1,123 9,713
1,633
1,270
376
May 4
| 1,103 9,485
1,243
270
May 11
i 1,070 I©', 102 1,530
i; 680 1,334
222
May 18
j 1,052 9,891
1,623
l',504
655
May 25
1,330 10,682
With Federal Reserve
Hoard—
i 21,070 10,500 5,500
Apr. 27
! 22,640 10,500 5,000
May 4
i 22,640 12,500 6,000
May 11
! 24,310 13,500 6,000
May 18
2,000
! 25,110 16,000 5,000
May 25
As security for outstanding
notesCommercial p a p e r 10,587
4,150
Apr. 27
3,380
11,394
Mav 4
"1,780
10,789
May 11
2,910
10,686
May 18
2,910
li;359
May 25
Total—
i
Apr. 27
! 21,383 193,594 30,433 21,919 16,522
May 4
i 21,363 198,163 31,383 22,227 16,770
May 11
i 21,930 20lJ 610 31,680 23,981 17,059
May 18
21,932 1205,229 32,630 24,882 16,908
May 25
i 22,640 ~"~ '"" 33,373 27,334 17,014




36,380I I 51,080
36,380 ! 57,120
36,380 ! 60,560
36,380 i 64,020
36,380 i 65,060
5,589
5,739
5.852
5', 940
6,015

2,077
2,087
2,095
2,115
2,244

24,940 34,000
24,940 34,640
24,940 34,640
24,940 34,640
| 25,740 34,640
i 4,518
i 4,508
! 4,621
! 5,033
! 5,072

4,987
5,005
5,130
5,314
5,135

!
i
i
i
i

4,958
5,673
6,161
6^262
6,425

30,791 49,003 i 20,422 29,013 35,762
30,641 55.033 I 20,382 29,635 35.047
30,528 58;465 20,319 29,510 3< 559
30,440 61.905 19,907 29,323 34,458
30,335 62;816 20,668 29,205 j 34,295
10,055
10,955
10,955
10,805
11,205

8,700
10,900
9,520
10,700
10,310

!
I
!
I
i

19,836
19,686
19,573
19.635
19j 130

40,303
44,133
48,945
51,205
52,476

j 15.482
I 15; 682
l 15,619
i 15.727
; 10; 408

22,503
23,145
23,5?0
23.4*6
23;305

i 21.992
! 2<977
I 25; 809
i 25,268
i 25,955

6,465
6,465
4,364
4,304
3,305

13,918
13,918
13,913
13,918
13,918

I
I
I
i
i

2,897
2,897
2,S97
2,897
1,338
1,188
1,075
987
1,882

I
653
643
635
615

13,030 39,650
13,480 42,490
13,480 45, S50
13,4S0 49,310
12,080 51,990

!
I
!
i

4,940
4,700
4,700
4,180
4,260

700
660
59S
506
666

6,450 i 10.770
6,490 ! 10'. 070
5,990 i 9; 190
5,810
9.190
5,840
8; 340

015 ;
897 i
1,272 i
1,238 !
1,11" '

36,920
36,920
36,920
36,920
36,920

22,060
24,060
24,060
25,060
25,060

724,200
747,580
761,000
778,440
810,680

7,871
8,041
8,259
8,299
8,515

3,106
3,108
3,150
3,171
3,206

137,725
139,325
141,523
142,918
144,711

29,049 18,954
28,879 20,952
28,681 20,910
28,621 21,889
28,405 21,854

I 40,720
I 40,720
i 40,720
! 40,720
I 40,720

588,475
:608,255
619,537
635,522
969

139,931
149,381.
149,136
156,616
177,881

8,4:
8,486
8', 486

20,563
20,393
20,175
20,135
19,919

(HJO}

18,954
20,952
20,910
21,889
21,854

446.544
458; 874
470,401
478,906
488,088

10,110
I 10,110
' 11,110
"'""
11,110
I 11,110

253.944
258; 885
261,025
264,635
264,408

844
1,416 1,205
842
1,367 1,170
1,309 j 1.124 800
779
1,208
!.;0S4
l
l,160f-l,034 : 1,094

20,931
20,634
21,028
20.596
Z\\ 233

2,370
2.370
2;370
2,370
2,370

6.270
6J270
6,270
5,950
5,750

5,720
4,720
3,220
3,220
4,170

20,200
20,560
20,560
20,560
20,560

7.920
7'7 800
5,640
5,640
5,490

IS,110 148,030
20,110 I 153,570
20,110 i 150,270
21,110 I 163', 0*0
20,760 168,910

1,130
1,130
1,865

1,328
1,313
2,301
2,301
2,285

23,639
25,785
32,078
30,595
31,477

2,571
2,121
2,121
2,271
2,271

1,000
2,460
1,280

2,047
2,287
4,387
4,907
6,627

2,010
3,610
5.110
5,110
4,160

19,830
19,686
19.573
j19', 635
19.130

40,303
44,133
48,945
51,205
52,476

15,482
15,682
15,619
15,727
16,408

22,563
23,145
23,520
23;486

24,992
24.977
25;369
25,268
25,955

I20,563 18,954 443,544
20,393 20,952 458,574
20,175 20,910 470,4.01
20,135 21,8S9 478,906
19,919 21, 854 488,088

.TUNM 1,

495

FEDERAL BESEKVE BULLETIN".

1017.

EARNINGS ON INVESTMENTS OF FEDERAL RESERVE BANKS.
ve
f
Average amounts of earning assets held by each Federal Reserve Bank during April, 1917, earnings from each class of earning
g
y
t
d
l l f
ig s on the basis of April, 1917, returns
o
April 1917 returns.
assets, and annual rales of earnings
Average balances for the month of the several classes of earning assets.
Banks.

Bills discounted,
members,

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

i
I
!
I
!
!
I
i
|
j

:

Total

i
i

Bills bought \
in open
market.

84,067,008
1,033,473
1,212,746
2,518,798
5,017,197
2,169,949
1,354,108
1,783,253
2,522,500
633,503
2,127,217
462,817

Banks.

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




So, 723,750!
24,098,550 |
6,597,280 j
024,941
11,420,547 i
626,711 ! 5,141,000 j
052,556 i 3,555,367 !
846,811
15,260,833 i
384,044
6,330,233 I
387,300
5,188,600 I
740,938
13,128,156 I
041,662
7,576,000 j
049,525
7,002,917 I

526,996
45,479
27,794
12,774
lf>, 576
8,132
16,457
8,999
13,404
4,472
2,808
16, 798

80,192 I 200,689

111,029,233 1

8186,678
5,150,844
1,497,732
2,987,348
15,000
10,467
2,209,349
1,068,495
176,700
459,139
547,857
802,856

S20.343.502
47,5551918
20,325,854
21,957,634
16,799,908
8,788,339
25,671,101
12,566,025
13,275,100
15,961,736
11,292,736
15,318,115

15,112,465

229,855,968

Calculated annual rates of earnings from—

United
Bills disBills
Municicounted, bought
bonds
pal warmemin open
and
bers.
market. Treasury rants.
notes.

£12,120
3,018
3,695
7,588
15,884
7,031
4,676
5,627
8,565
2,550
7,860
1,578

Total.

notes.

), 366,068
',273,051

! 24,902,567 | 78,811,703
Earnings from—

J
. Municipal
| warrants.

Total.

812,120
43,468
13,478
22,495
10,162
7,331
30,432
12,750
10,143
24,551
14,550
13,585

$442 $51,678
104,629
12,664
48,569
3,602
50,738
7,881
42,665
43
40 ! 22,534
57,320
5,755
30,033
2,657
32,504
392
32,698
1,125
26,627
1,409
33,896
1,935

215,065

37,945

533,891

Bills disBills | United
counted, bought
States
memin open
sccuribers.
market.
ties.

Municipal warrants.

Total.

Per cent. Per cent. Per cent. Per cent. Per cent.
3.63
3.17
2.58
2.87
' 3.06
3.55
3.20
2.19
2.99
2.61
3.76
3.06
2.48
2.92
2.90
3.67
3.09
2.48
3.21
2.81
3.85
3.04
2.40
3.53
3.09
3.94
3.24
2.51
4.65
3.12
4.20
2.92
2.43
3.17
2.72
3.84
3.24
2.45
3.03
2.91
4.13
3.03
2.38
2.70
2.98
3.12
2.28
2.91
2.49
4.eo
3.23
2.31
3.08
3.50
4.49
2.90
2.33
2.93
2.69
4.15
3.92

3.10

2.36

3.05

2.83

496

FEDERAL RESERVE BULLETIN.

.TONE 1,

1917.

DISCOUNT SATES.
Discount rates of each Federal Reserve Bank in effect May 31, 1917.
Maturities.
Discounts.
Within 15

days, including
member
banks'
collateral
notes.

4

3
3

4
4
4
4
4

2 3?y

8

3-i
3-V

3i
34-

34
84

3.V

3i

Secured by XL S.
certificates of indebtedness or
Liberty Loan
Bonds. Within
90 days.

16 to 60 81 t o 90
davs, in- days, inclusive. clusive.

31

Boston
Now York 1
J 'hilarielpliia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
"J)iiIJas
San Francisco

Commodity paper
maturing
within 90
days.

4
4
4
41
4
41
44
4

4

4
4
4.\4
4.

I

NOTE.- -Kate for bankers' acceptances, 2h to 4 per cent.
1 Rate of 2 to 4 per cent on member banks' 1-day collateral notes in connection with the loan operations 01 the Government.
* 3 par cent for member banks' collateral notes if secured by "United States certificates of mdeble'\IIQSS.
3
3 per cent Tor member banks' collateral notes ii' secured by United States bonus, notes, or uei'tificato!:: of indebtedness.

GOLD IMPORTS AND EXPORTS.
Gold imports and exports into and from the United Slah-s.
[Tn thousands of dollars; i. 0., 000 omitted.]

!

W xi\i ending -

Apr. 20,
1917.

Aw. 27,
1917.

600

200

3*7

•J2C5

Mav 11,
1917.

irav IS,
1917.

•213

10 i 7."'

juii.

1,

206

1917.
I

IMPORTS.
r

Total for
corresponding period
during
1916.

Total
sine 3

280
2

Urnted Slatos mint or assay ofii.ce bars

4,749

932
2,433

1
18,-102

5,754
9
W7 i 2oO;554
12 ij i
52.077
70,910
30 |

953

Jro aiL(i bosp bullion

3,991

615

43,925

70S

385,304

53,122

11
1,670
128
8,815

16
2,493

4.015

2
36
942

8,256

41
8,790

99
14,096
1,549
80,012

147
4,378
4,236
22,933

4,031

980

10,622

10,872

8.836

102,356

31,694

5

332

1

31
4,840

1,438
17,025

I '11 i 1 P1"' •'••! (' fl ( P S 0 0 i l l

.Foreign coin

'

Total

30,250

18' 715
1,970
26,358

EXPORTS.

Domestic:
()re and base bullion
United States mint or assay ofTico bars
Bullion, refined
Coin
Total
Foreign:
Bullion, refined
C oin
Total
Total exports
Excess of gold imports over exports since Jan. 1,1917.
Excess of gold imports o\ er exports since Aug. 1,1914.




5

1,312

i

332

4,036

i

10,622

1
10,822

4,871

18,463

8,837

107,227

50.157

278,077
1,146,839

INDEX.
T'aiie.

Acceptances, distribution of, by classes, maturities,
etc
'.
487
Alien enemies, instructions to Federal Reserve
Banks relative to
441-441)
Amendments to Federal Reserve act as passed by
House and Senate
441
Branch bank in Baltimore, establishment of
440
Business conditions throughout the Federal Reserve districts
.'
4G0-482
("hart showing reserves of national banks, 1915-19.17.
484
Circular issued by Federal Reserve Bank of Chicago
relative to Liberty Loan
437
Circulars issued by the Treasury Department r e k i ing to Liberty Loan
432
Clearing and collection system, operation of
-455
Coin-counting machines, abrasion of gold coin
caused by use of
440
Commercial failures reported
441.
Committees, Liberty Loan, personnel of
437
Discount rates:
Establishment of rate of 3•£ per cent on notes secured by certificates of indebtedness or Liberty Loan bonds
429
I n effect
496
Discount operations of the Federal Reserve Banks. 485-490
Federal Reserve Act:
Amendment submitted by Board authorizing
granting of charters to banks organized for
purpose of engaging in foreign trade
450-458
Ame ndments to, as passed by Houseand S enat e. 441 -449
Federal Reserve agents' fund, transactions under. .
455
Federal Reserve Banks:
Earnings on investments
495
Resources and liabilities..
491
Federal Reserve drafts, plan for issue of, date postponed
4-40
Federal Reserve note accounts of Federal Reserve
Banks and agents
493-494
Fiduciary powers granted during month
440




Franking privilege in correspondence relating to
Liberty Loan
439
Gold coin, abrasion of, caused by use of coin-counting machines
440
Gold imports and exports
496
Gold settlement fund, transactions under
454
Informal rulings of the board:
Paper secured b y warehouse receipts. ^
450
Bonds secured by real estate
456
Surrender of stock by liquidated bank
457
Discount of farmers' paper
457
indorsement on bill of exchange
457
Law department:
Reserves against Government deposits
458
Eligible paper secured by real estate mortgage.
458
Notes and bills drawn for purpose of carrying
on trading in Government obligations
459
Ruling by Acting Commissioner of Internal
Revenue regarding taxability of income
from investments in Libert}' Bondjsj
459
Liberty Loan:
Circular issued by Chicago Federal Reserve
Bank relative to
437
Circulars issued b y Treasury Department relative to
432
Cooperation of American Bankers Association.
438
Cost of telegrams and use of franking privilege
439
Establishment of rate of 3J per cent .on notes
secured by bonds
429
Personnel of l i b e r t y Loan committees
437
National bank charters granted
450
Reserves of national banks, 1915-1917
483-484
Chart showing
4.84
Resources and liabilities of Federal Reserve B a n k s .
491
Review of the month
423-429
State banks admitted to system
439
Tele-grams, cost of, relating to bond issue
439
Treasury certificates of indebtedness
423


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102