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FEDERAL RESERVE
BULLETIN




ISSUED BY THE

FEDERAL RESERVE BOARD
AT WASHINGTON

JUNE, 1918

WASHINGTON
GOVERNMENT PRINTING OFFICE
191S




FEDERAL RESERVE BOARD.
EX OFFICIO MEMBERS.
WILLIAM G. MCADOO,
Secretary of the Treasury,
Chairman.
JOHN SKELTON WILLIAMS,
Comptroller of the Currency.

W. P. G. HARDING, Governor.
PAUL M. WARBURG, Vice Governor.
FREDERIC A. DELANO.
ADOLPH C. MILLER.
CHARLES S. HAMLIN.

H. PARKER WILLIS, Secretary.
L. C. ADELSON,
Assistant Secretary.

M. C. ELLIOTT, Counsel.




SUBSCRIPTION PRICE OF BULLETIN,
The Federal Reserve Bulletin is distributed without charge
to member banks of the system and to the officers and directors
of Federal Reserve Banks. In sending the Bulletin to others the
Board feels that a subscription should be required. It has
accordingly fixed a subscription price of $2 per annum. Single
copies will be sold at 20 cents. Foreign postage should be added
when it will be required. Remittances should be made to the
Federal Reserve Board. Member banks desiring to have the
Bulletin supplied to their officers and directors may have it sent
to not less than ten names at a subscription price of $1 per annum.
No complete sets of the Bulletin for 1915 or 1916 are
available. Bound copies of the Bulletin for 1917 may be had at
$5 per copy.
in

TABLE OF CONTENTS.
Page.

The President on thrift and the purchase of securities
Review of the month
„
Indexes of business conditions
Class C director named for Federal Reserve Bank of Richmond.
Meeting of Federal Advisory Council
Banks granted authority to accept up to 100 per cent of capital and surplus
Fiduciary powers granted to national banks
Progress in retiring silver certificates
Work of the Capital Issues Committee
Special deposits of public moneys
Operations of the War Finance Corporation
Additional taxation
Act authorizing national banks to subscribe to the Red Cross
Control of coin, bullion, and currency movement
Deposits, loans, and discounts, and total investments of national banks, 1914-1918
Chart showing
Movement of prices, 1914-1918
Chart showing
Amounts of money held in the Treasury and the Federal Reserve Banks and amounts held by other banks and
the public
State banks and trust companies admitted to the Federal Reserve system
The third Liberty loan
Charters issued to national banks during the month
Commercial failures reported
State banks and trust companies entering the Federal Reserve system
List of Liberty bonds lost or stolen
Conversion of Liberty bonds
New issue of Treasury certificates of indebtedness
r
Report on revision of law and practice relating to checks, by tho Central Executive Council of the International
High Commission
Amounts of paper currency outstanding
Informal rulings of the Federal Reserve Board
Law department
Business conditions throughout the Federal Reserve districts
Gold settlement fund transactions
Operation of the check clearing and collection system
Average rate and maturity of paper discounted by the Federal Reserve Banks each month
discount operations of the Federal Reserve Banks
Resources and liabilities of tho Federal Reserve Banks
Federal Reserve note accounts of Federal Reserve Banks and agents
Member bank condition statement
Earnings on investments of Federal Reserve Banks
Gold imports and exports
Discount rates
Digest and index of informal rulings of the Board, Jan., 1917-Apr. 1918




IV

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FEDERAL RESERVE BULLETIN
VOL. 4

J U N E 1, 1918.

No. 6

STATEMENT OF THE PRESIDENT ON THE NEED OP THRIFT AND THE PURCHASE
OF SECURITIES.
This war is one of nations—not of armies—and all of our 100,000,000 people must be
economically and industrially adjusted to war conditions if this Nation is to play its full part
in the conflict. The problem before us is not primarily a financial problem, but rather a problem
of increased production of war essentials and the saving of the materials and the labor necessary for the support and equipment of our Army and Navy. Thoughtless expenditure of
money for nonessentials uses up the labor of men, the products of the farm, mines, and factories,
and overburdens transportation, all of which must be used to the utmost and at their best for
war purposes.
The great results which we seek can be obtained only by the participation of every member of the Nation, young and old, in a national concerted thrift movement. I therefore urge
that our people everywhere pledge themselves, as suggested by the Secretary of the Treasury, to
the practice of thrift; to serve the Government to their utmost in increasing production in all
fields necessary to the winning of the war; to conserve food and fuel and useful materials of
every kind; to devote their labor only to the most necessary tasks, and to buy only those things
which are essential to individual health and efficiency; and that the people, as evidence of their
loyalty, invest all that they can save in Liberty bonds and war-savings stamps. The securities
issued by the [Treasury Department are so many of them within the reach of everyone that
the door of opportunity in this matter is wide open to all of us. To practice thrift in peace
times is a virtue and brings great benefit to the individual at all times; with the desperate
need of the civilized world to-day for materials and labor with which to end the war, the practice
of individual thrift is a patriotic duty and a necessity*
I appeal to all who now own either Liberty bonds or war-savings stamps to continue tc>
practice economy and thrift and to appeal to all who do not own Government securities to do
likewise and purchase them to the extent of their means. The man who buys Government
securities transfers the purchasing power of his money to the United States Government until
after this war, and to that same degree does not buy in competition with the Government.
I earnestly appeal to every man, woman, and child to pledge themselves on or before
the 28th of June to save constantly and to buy as regularly as possible the securities of the Government, and to do this as far as possible through membership in war-savings societies. The
28th of June ends this special period of enlistment in the great volunteer army of production
and saving here at home. May there be none unenlisted on that day,
(Signed)
WOODROW WILSON.
MAY 29, 1918.




483

484

FEDERAL BESERVE BULLETIN.

REVIEW OF THE MONTH.

Federal Eeserve Bank.

Final figures for subscriptions to the third
Liberty loan show an aggregate
<* $4,170 019,650, the total
number 01 subscriptions, as
already announced, being not far from 17,000,000. This satisfactory result was achieved notwithstanding the fact that the country will
have had to meet, since the second Liberty
loan and to and including the month of June,
income and excess-profits taxes to an estimated amount of approximately $3,000,000,000, making a total to accrue to the Treasury,
from such taxes and from the third Liberty
loan, of approximately $7,000,000,000. In
the first campaign, conducted one year ago,
bonds were sold to approximately 4,500,000
people; the second Liberty loan was taken
by about 9,500,000 people; and these figures are now again increased to 17,000,000.
Detailed returns showing the actual subscriptions and the percentage of the quota assigned
to each district, that has been taken therein,
are as follows:
District.
Minneapolis
Kansas City
St. Louis
Atlanta
Philadelphia
Dallas
Chicago
Richmond
Boston
San Francisco
Cleveland
New York
United States Treasury
Total

Quota in
millions.
105
130
130
90
250
80
425
130
250
210
300
900

3,000

Subscriptions.
3180,826,350
202,301,050
199,085,900
136,653,350
361,963,500
115,395,200
608,878,600
185,966,950
354,537,250
286,577,450
404,988,200
1,114,930,700
17,9.15,150

Percentage
of quota.
172
156
153
151
144
144
143
143
142
136
135
124

4,170,019,650

The foregoing figures are subject to slight
modifications upon receipt of final audited
figures from the several districts. Any such
adjustments will not materially affect the
total.
The following figures, also, are interesting as
showing the distribution of final allotments by
districts, during the three loans, viz:




JUNE 1,1918.

First loan. Second loan. Third loan.

Total.

Boston
$265,478,000 S407, 714,000 $354,537,250 $1,027,729,250
New York
593,987,000 1,151,185,000 1,114,930,700 2,860,102,700
Philadelphia... 164,760,000 295, 127,000 361,963,500 821,850,500
201,977,000 409, 787,000 404,988,200 1,016,752,200
Cleveland
Kichmond
88,594,000 182; 582,000 185,966,950 457,142,950
82; 943,000 136,653,350 265,879,350
Atlanta..
46,283,000
Chicago..
272,702,000 525. 956,000 608,878,600 1,407,536,600
65,029,000 150i 122,000 199,085,900 414,236,900
St. Louis
53,759.000 131; 972,000 180,826,350 366,557,350
Minneapolis
Kansas City.... 62,183,000 136; 549,000 202,301,050 401,033,050
36.663; 000
Dallas
74, 567,000 115,395,200 226,625,200
San Francisco.. 149^045,000 260; 262,000 286,577,450 695,884,450
Total
2,000,000,000
3,808,766,000 4,170,019,650 9,978,785,650

What is perhaps even more encouraging
. f
„ than the wide distribution and
The banks and ,
, . ,.
-,
the loan
neavy oversubscription shown
by the returns of the third
Liberty loan is the fact that there has been,
so far as present indications go, gratifyingly
little use of bank accommodations in the
taking of the bonds. Of the entire amount of
subscription received, it is estimated that
more than 80 per cent is already fully paid.
Returns from Federal Reserve Banks embodied in the weekly statement of the Federal
Reserve Board bear out the belief that the
recourse to the Reserve Banks in connection
with the placing of the third Liberty loan has
thus far been comparatively slight. Detailed
statistics are not yet available to show the
amount of bonds that is being carried through the
aid of advances from the banks, but informal
reports from the various Federal Reserve districts indicate that the reliance upon the Federal Reserve Banks for rediscounts intended
to carry Government bonds is smaller than has
been supposed and that the various member
banks have not been called upon unduly to assist individual subscribers. Taken in conjunction with general and apparently well-founded
reports to the effect that the process of paying income and excess-profits taxes will involve
much less inconvenience than had been supposed, the bank situation as respects the third
Liberty loan is encouraging. There may easily
be an increase in the applications for rediscounts,
protected by Government obligations, in some
Federal Reserve districts, as the pressure upon
ml_

JUNK 1. 191.8.

FEDERAL RESERVE BULLETIN.

the several banks for loan funds increases with
the advance of the season. This indeed is
already predicted by some careful observers
in the several localities. There seems, however, to be little ground for thinking that such
applications will be unduly heavy. The whole
experience is expected to demonstrate that
the process of selling the certificates will have
operated to bring in these large sums with a
minimum of inconvenience. The certificates
have been very widely distributed among the
larger taxpayers. The prosperous condition of
business in general and the high returns obtained by producers in practically every- line of
business have enabled the small taxpayers, in
a very large percentage of cases, to provide for
the payment of their taxes even at this early
date, while the larger taxpayers, as already suggested, will be materially assisted by the use
of the certificates which they have acquired.
The outcome of the Treasury operations deUse of certifi- signed to anticipate the procates of indebted- ceeds of the third Liberty loan
ness.
through the issue of certificates
of indebtedness has already been described in
the issue of the FEDERAL RESERVE BULLETIN
for May 1. As there set forth, the total amount
of certificates already issued and not liquidated
aggregated about $2,610,000,000. This left, of
the proceeds of the third Liberty loan, $1,560,000,000 available for current uses. Since that
date the two issues of certificates of indebtedness maturing on May 9 and 28, amounting to
$500,000,000 each, have been redeemed. On
the other hand, the Treasury has placed during
the month $183,767,000 of tax certificates, the
issue being closed on May 31. Balances
on hand in the several Federal Reserve
Banks and in special depositaries, as of May
24, amounted to $1,486,000,000. Inasmuch as
the current expenditures of the Government
of the United States, as shown by Treasury returns, are now running at the rate of $1,500,000,000 per month, a resumption of the issue
of certificates of indebtedness in the comparatively near future may naturally be expected. Experience is again showing the




485

desirability of this method of anticipating the
proceeds of loans, and suggests that when carefully employed it has the effect of producing a
steady flow of available free funds into the
hands of the Government, there to be as
steadily used and disbursed for current expenses on account of salaries and commodities.
Of the old issues of certificates there still remain (on May 31) to be liquidated $1,624,000,000, while of the proceeds of income and
excess-profits taxes available during June and
estimated at $3,000,000,000 to $4,000,000,000,
there have been already paid, through the purchase of the so-called tax certificates issued
in, anticipation of revenues, approximately
$1,500,000,000.
More and more as the Government's financing
proceeds, it becomes evident
The question of t h a t success will be best if not
saving.

only secured through the development of a systematic policy of saving in consumption accompanied by the curtailment of
credit to the less essential industries. The
Board has, by every means in its power, endeavored to impress upon Federal Reserve Banks
and, through them, upon member banks of the
system, the desirability of endeavoring, by every
conservative and legitimate means, to bring
about the reduction of borrowing and of capital
investment for businesses which, while entirely
desirable and perhaps even beneficial in themselves, are not necessarily connected with or
conducive to the success of the war. The matter was thoroughly discussed at the meeting of
the Federal Advisory Council on May 20 and
21, and the Board was then advised that decided progress is being made in a number of
districts. In other districts there is a lessmarked appreciation of the necessity of cooperation. The belief that business may go on as
usual still maintains its hold upon mam7
minds, with the result that some establishments
are still endeavoring, in not a few parts of the
country, to maintain the volume of their sales
and to encourage lavish buying on the part of
their customers. Manufacturers in many lines
are, however, exhibiting an appreciation of the

486

FEDERAL RESERVE BULLETIN.

real necessities of the case and are seeking in
numerous instances to convert their plants—
at least in part—to the production of articles
of an unmistakably essential character, curtailing the output of the luxury trades, while
abandoning certain lines altogether. It would
now seem that some of the principal obstacles
to progress in this important movement are
found in the disposition of some, who are employed at higher wages than ever before, to
maintain or even to enlarge purchases of luxuries as well as of necessaries.
The President, in his statement with reference to thrift, printed on the
&*t P a S e o f t h e P r e s e n t . n u m ~
ber, has expressed in unmistakable terms the necessity of saving as a means
of advancing our war objects. The fundamental basis of the theory which underlies the
doctrine of thrift is being better and better
understood by the public. Some phases of the
situation, however, are still subjects of discussion or not generally admitted. It should be
evident, however, that the needs of the Government are reducible to a requirement for
present services and commodities, and that it
can obtain these only in so far as a surplus of
both is produced over and above the amount
consumed or required for other purposes.
Wide distribution of the third Liberty loan,
attained with only a moderate recourse to bank
credit, shows that a large proportion of the
population is actually cooperating in the task
of paying the cost of the war out of current
earnings and savings by reducing its consumption of dispensable goods. The requirements
of the Government are, however, steadily on the
increase, as shown by the fact that estimated
expenditures for the coming fiscal year 1918-19
are now about $24,000,000,000. There is no
sound basis for the belief that it is possible
to obtain these needed funds through loans
placed with banks or through taxation of a
character that would result in compelling taxpayers to rely upon banks for the means with
which to meet their dues to the Government




JUNE 1,

1918.

without producing undesirabla consequences.
Creation of additional bank credit, for the purpose of buying bonds or paying taxes by obtaining bank accommodations rather than by
saving, results only in a technical increase of
purchasing power, since it is not based upon
a commensurate increase in the production of
goods—in other words, is not offset by genuine
savings. The consequence of making such
additions to bank credits is necessarily an in
creased tendency toward the bidding up of prices,
and results in the menace called "inflation."
Whenever the volume of current purchasing
power, in terms of money,
w h e t h e r i n t h e f o r m of

actual

currency or in the form of
credit, grows or is increased faster than the
volume of current and available goods, the resulting situation may be ascribed to the excess
of currency or credit, or both, above normal requirements, or, more briefly, to the distention
of currency and credit. This alteration of the
proportion between existing goods and purchasing power eventually results in increase of
prices, not necessarily in the exact degree in
which the volume of purchasing power has been
increased but in the degree in which it is
actively used to effect the purchase and transfer of goods. When loans are made by
banks upon the security of bonds or other
claims to the product of future industry
or its share in fixed capital, the tendency
is to advance prices. Funds obtained by
the Government, in the form of such credits,
result therefore in the bidding up of the
prices of commodities, especially of those
for which the Government has most need.
Such advance in prices, in so far as relates to the
necessaries of life, almost unavoidably leads to
an advance in wages, and when such advances
in wages are again used in enlarging consumption, the tendency toward price advances is
still further aggravated. Saving, on the other
hand, results in placing at the disposal of the
Government, either directly or indirectly, the
surplus of goods produced over goods consumed and enables the Government to provide

FEDERAL RESERVE BULLETIN.

JUNK 1,1918.

itself with the articles it requires without disturbing the basis of prices.
The necessity of a well-distributed system
of taxation, both as a method of obtaining
additional revenues and as a measure of preventing inflation and avoiding waste, was set
forth by the President in an address to Congress on May 27, from which is here quoted
the following paragraph:
Additional revenues must manifestly be provided for.
It would be a most unsound policy to raise too large a proportion of them by loans, and it is evident that the four
billions now provided for by taxation will not of themselves
sustain the greatly enlarged budget to which we must
immediately look forward. We can not in fairness wait
until the end of the fiscal year is at hand to apprise our
people of the taxes they must pay on their earnings of the
present calendar year, whose accountings and expenditures
will then be closed. We can not get increased taxes unless the country knows what they are to be and practices
the necessary economy to make them available. * * *
Enormous loans freely spent in the stimulation of industry
of almost every sort produce inflations and extravagances
which presently make the whole economic structure questionable and insecure and the very basis of credit is cut
away. Only fair, equitably distributed taxation of the
widest incidence and drawn chiefly from the sources
which would be likely to demoralize credit by their very
abundance can prevent inflation and keep our industrial
system free of speculation and waste. We shall naturally
turn, therefore, I suppose, to war profits and incomes and
luxuries for the additional taxes.

During May important changes in rates of
discount occurred at two banks
Rates of disonly—Kansas City and Richcount.
mond—the general rate schedule determined upon during April continuing
in effect at all others. The question of rates
of discount is of primary importance at the
present time, but market conditions are anomalous owing to the fact that all changes must be
made, upon full consideration of the necessity
of facilitating Government financing, so that it
is not possible to regulate rates upon a strictly
commercial basis. The advances in rates at
Kansas City and Richmond were made upon
the request of the Federal Reserve Banks of
those cities, because of the heavy volume of paper which was steadily offering itself for rediscount at those points. It was the belief of the
Board that the applications should be granted




62161—18

2

487

as a caution to member banks, even though the
volume of applications for rediscount might not
be very materially reduced as far as dependent
merely upon seasonal needs and requirements.
Under the Federal Reserve system, as has been
previously explained, it is the Board's policy to
make, so far as practicable, an adjustment of
paper among Federal Reserve Banks such as
will bring about a relatively uniform reserve
condition at all Federal Reserve Banks. The
tendency of so doing is to promote greater
equalization among the banking reserves of the
several Federal Reserve districts. The success of this policy, however, is based upon the
adoption of similar standards of rediscounting
in each Federal Reserve district, and upon the
regulation of rediscount applications in such a
way as to prevent applicants in any one district from gaming the advantage of those elsewhere located by reason of access to an undue
share of reserve funds. The Federal Reserve
system necessarity counts largely upon the cooperation of its member banks to keep rediscount obligations to the minimum that will
enable such banks to comply with their ordinary requirements. The raising of rates at
Kansas City and Richmond served the purpose
of giving notice to the members of this need for
cooperation but did not prevent them from
getting assistance whenever their condition or
legitimate demands called for it.
Material progress has been made, since the
adoption of the act providing
Silver
situafor the breaking up of the silver
tion.
dollars held behind silver certificates, in carrying out the operations therein
authorized. With a view to being ready for
any eventuality growing out of these transactions, orders have been placed for the printing
of Federal Reserve bank notes in the $1 denomination in the amount of $200,000,000 and in
the $2 denomination in the amount of $50,000,000. The designs for these notes have been
approved and the making of the plates has
been practically completed, so that it may be
expected that a full supply of $1 and $2 bank
notes will soon be available to make good
any deficiency that may result from the retire-

488

FEDEEAL RESERVE BULLETIN.

mont of the old silver certificates. These notes
have been allotted to the several Federal Reserve Banks upon a pro rata basis previously
determined with respect to the printing of notes
of the $5 denomination. In order further to
facilitate the process of withdrawing silver certificates from circulation, the Board moreover
suggested to the Federal Reserve Banks the
sending out of a letter to member banks, asking
that they cooperate with the Government by
turning in their present suppfy of $5 silver certificates and suggesting that at a later time,
when the new $1 and $2 notes are available, a
similar request would be made with respect to
silver certificates of these lower face values.
Cooperating still further with the efforts of the
Treasury Department in'this matter, the Gold
Export Committee of the Federal Reserve
Board has, moreover, endeavored to induce
applicants for permission to carry paper currency out of the country to take United States
notes of the $1 and $2 denominations, whenever
possible, rather than silver certificates, thereby
retaining as many of the latter within reach as
conditions would permit.
For the four weeks ending May 17 the net
outward gold movement totaled
^Movement of $509,000, as compared with
gold.
$987,000 for the preceding five
weeks. Gold imports for the four weeks
totaling $2,213,000 came largely from Canada,
Mexico, and Colombia, while gold exports
totaling $2,722,000 were consigned chiefly to
Mexico, Venezuela, and Canada.
The gain in the country's stock of gold since
August 1, 1914, was $1,046,623,000, as may
be seen from the following exhibit:
[000 omitted.!

Excess of

Imports. | Exports. imports
over

exports.

...
Aug. 1 to Dec. 31, 1914
Jan. 1 f o Dec. 31, 1915
Jan. 1 to Dec. 31,1916
Jan. i to Dee. 31, 1917
Tan. 1 to May 17, 1918
Total




.
•
:
!

i
:

.
$23,253 ! $104,972
451,955 i 31,426
685,745 I 155,793
553,713 ! 372,171
12,774 \ 16,407

i 1,727,440 j 680,769
1

Excess of exports over imports.

i?81,719
420,529
529,952
181,542
13,633
1,046,671

JUNE 1, IU18.

During the four weeks between April 26 and
Operations of M a F 2 4 operations of the Fedthe Reserve era! Keserve Banks continued
Banks.
practically on an even scale,
the total earning assets on the last named date
1,277.2 millions being slightly below the corresponding total of 1,286.2 millions shown for
the initial date.
On May 10, the Friday following the consummation of the third Liberty loan, total
investments reached the record total of 1,373.8
millions, nearly 45 per cent of which was composed of war loan paper, i. e., paper directly
traceable to war loan financing operations and
comprising member banks7 collateral notes
and customers' paper, supported by United
States war bonds or certificates of indebtedness.
Total discounts on hand rose from 901.7
millions on April 26 to 939 millions on May 10,
and stood at 923.3 millions two weeks later.
Practically the same development is shown by
the New York Reserve Bank, which reports
an increase in the holdings of discounted bills
from 434.3 millions on April 26 to 450 millions on May 10 and a slight decrease to 442.2
millions on May 24. The largest relative increases in discount operations during the
month are shown for the Minneapolis and
Kansas City banks, the former increasing its
holdings of discounted paper from 14.6 to 24
millions and the latter from 43.9 millions to
71.6 millions. War loan paper, as defined
above, constituted about 65 per cent of the
total discounts held on May 24, as against over
70 per cent on April 26. At the New York
bank this proportion was considerably higher,
ranging between 83 per cent on May 10 and
87 per cent on April 26.
Total acceptances on hand likewise show a
slight though continuous decrease, all the
banks except those at Boston and New York
reporting reductions in the amounts of purchased paper held, thus causing a further concentration of this class of paper at the New
York bank from about 40 per cent on April
26 to nearly 50 per cent on May 24.
But little change is shown in the total of
United States bonds held by the banks, while

FEDERAL RESERVE BULLETIN".

3, 10J 8.

the banks7 holdings of United States notes
and certificates show a reduction from 37.4 to
32.5 millions.
During the period under review the banks7
gold reserves increased from 1.827 to 1,898
millions while their net deposits, following
practically the same course as the banks7 total
investments, show about the same figures for
the beginning and end of the four-week period,
viz, 1,556.3 and 1,557.6 millions. Federal Reserve notes in circulation increased from 1,526.2
to 1,578.6 millions, or by 18.6 millions less
than the banks7 gold reserves. The result is
seen, in the rise of the ratio of total reserves to
aggregate net deposit and Federal Reserve
note liabilities from 61.3 to 62.4 per cent.
In the following table are shown the changes
between April 26 and May 24, 1918, in the
totals of discounted and purchased bills held
by each of the Federal Reserve Banks, also
changes between the two dates in the total
holdings of other classes of investments:
[In thousands of dollars: i. e., 000 omitted.]
Federal Reserve Bank.
Boston. .
Now York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas....
San Francisco
Total
United States long-term
securities
United States short-term
securities
Other earning assets
Total investments
held

Apr. 26.

May 24.

70,913
555,283
6.1,654
78,840
52,510
29,403
136,555
55,037
26,137
51,044
30.722
56,489

63,591
581.158
64,128
64', 845
48,552
28,383
121.782
37, 769
28,796
73,023
28,930
60,563

1,204,587

42,067

37.407
2,722
1,286,162

:
25,875 :
2,474 ;
i
i
i
j

1,201.520

41,446

Net
i Net
increase. 1 decrease.

1
2,659 i
21,979 !
!
4,074 1

7,322
13,995
3,958
1,020
14.773
17,268
1,792

i
!

3,067

32,476
1,151

I

4,931

i

1,571

1,277,214

I

8,948

621

Some indication as to the part taken by the
banks of the country in the
membirbanks. f e n c i n g of the Government's
more recent loan operations,
culminating in the third Liberty loan, is afforded by the reports from member banks in
about 100 leading cities showing their principal
assets and liabilities each week between April
19 and May 17.




489

Considerable changes are shown in the holdings of United States bonds (other than circulation bonds) and of certificates of indebtedness,
the former showing an increase of 294.4 millions
and the latter a decrease of 344.6 millions.
Circulation bonds show a decrease of about 1
million, while total United States security
holdings declined from 2,106.8 to 2,055.5 millions. As against this decrease the banks
report an increase of their loans secured by
United States war bonds and certificates of
indebtedness from 320.2 to 501.6 millions.
Corresponding figures for 120 banks in the
three central reserve cities indicate practically
no change in their holdings of circulation bonds,
a net increase of 164.2 millions in other United
States bonds, mainly Liberty bonds, net liquidation of 216.9 millions of certificates of indebtedness and an increase of 124.1 millions in
loans secured by United States war obligations.
For the member banks in Greater New York
increases of 120.4 millions in the holdings of
Liberty bonds and of 121.7 millions in loans
supported by United States war securities are
shown, as against a reduction of over 187 millions in Treasury certificates of indebtedness.
Aggregate holdings of United States securities (exclusive of circulation bonds) and loans
supported by such securities show an increase
for the four weeks from 2,159,1 to 2,290.3
millions. During the same period member
banks in Greater New York show an increase
of these items from 1,269.9 to 1,324.9 millions.
If it is remembered that the figures of reserve
carried b}^ reporting banks constitute about
78 per cent of the total members' reserve
deposits shown by the Federal Reserve Banks
for corresponding dates, some idea may be
had of the amount of war securities and war
paper held at present by the banks of the
country and the relative share of the New
York banks in the total holdings.
Total loans and investments of reporting
banks, exclusive of permanent investments,
show an increase from 12,412.7 to 12,608.7
millions, while the share of war securities and

490

FEDERAL RESERVE BULLETIN.

loans supported by such securities in the total
just given rose from 17.4 to 18.2 per cent. For
the Greater New York banks total loans and
investments show an increase from 4,979 to
5,048.7 millions, while the proportion of war
securities and war paper to total investments
of these banks rose from 25.5 to 26.2 per cent.
Immediately following the close of the third
Liberty loan a considerable decline in net
demand deposits is noted, the May 17 total,
8,922.6 millions, being 324.9 millions below
the corresponding April 19 total. For the
Greater New York banks the decrease was
118.2 millions and for the member banks in all
three central reserve cities, 173.1 millions.
Time deposits of all reporting banks show but
a slight decline, from 1,397.5 to 1,386.7 millions, the corresponding decrease for central reserve city banks being from 444.3 to 412.4 millions. On the other hand, Government deposits
at all reporting banks rose from 633.6 to 1,284.1
millions, at central reserve city banks, from
386.4 to 744.1 millions, and at the New York
banks alone, from 329.9 to 593.7 millions.
Reserves of all reporting banks (all with
the Federal Reserve Banks) declined from
1,167.2 to 1,148.1 millions, while cash in vault
gained slightly from 370.4 to 373.1 millions.
For all reporting banks the ratio of combined vault cash and reserve to total, including
Government deposits, works out at 13.6 per
cent on April 19, compared with 13.5 per cent
for May 17. For the central reserve city
banks this ratio shows a decline from 14.8 to
14.2 per cent. Excess reserves, in the calculation of which no account is taken of Government deposits, stood at 61.6 millions on
April 19 and after some fluctuations reached
a total of 161.5 millions on May 10, when total
investments as well as reserves were at their
highest. At the end of the following week, as
the result mainly of reductions in reserves and
cash in vault, excess reserves fell off to 88.3
millions. For the central reserve city banks




JUNE 1,1918.

similar fluctuations are noted, the maximum
of 109.5 millions on May 10 being followed by
a decline to 49.2 millions on May 17.
On May 20-21 occurred the regular quarterly
meeting of the Federal Advisor C o u n
^
^ all members being
present with the exception of
Mr. Norwood, the representative of the fifth
district. Two joint sessions were held with the
Federal Reserve Board and much attention was
given to a discussion of the question of the restriction of the less essential credits and the
problem of rediscount rates, as well as of general
borrowing and financial conditions in the several districts. The Federal Advisory Council
also held a joint session with the directors of
the new War Finance Corporation. There was
agreement throughout these sessions that,
while a condition of general activity and full
employment existed throughout the country,
it would be necessary to press the campaign for
restriction of credit and for individual saving to
the utmost. The banking situation was pronounced entirely sound, due largely to the
hearty response, on the part of the public, to
the demands for general absorption of Liberty
loan obligations by private purchasers with as
little aid from the banks as practicable. An
especially interesting feature of the discussion
was the review of legislation on banking now
pending in both Houses of Congress. The
Council expressed the opinion that there was no
occasion for the adoption of the proposed measure relating to the guaranty of bank deposits.
The Board adheres to the view expressed by
it in the past that needed relief against the
hardships, which depositors of failed banks now
suffer, would be adequately provided if a fund
were established to secure the prompt and effective liquidation of the sound assets of failed
banks. Such a fund would enable the depositors of failed banks to receive without delay a
cash distribution for a substantial proportion
of their claims, pending final liquidation.

JUNE 1,

1918.

FEDERAL RESEBVE BULLETIN.

Indexes of Business Conditions.

491

Meeting of Advisory Council.

Rapid changes are now going on in every
The usual quarterly meeting of the Federal
department of industry in consequence of the Advisory Council was held in Washington on
reorganization necessary for war and in prepa- May 20 and 21. A series of topics relating to
ration for future development of trade. Many existing financial and banking conditions was
of these bid fair to continue after the close of taken up for consideration and, after discusthe war itself. There is thus an increasing need sion, opinions were expressed by the Council
for the development of some method of meas- and formerly reported to the Board. The
uring in an authoritative way changes in busi- topics discussed and the conclusions arraived
ness conditions, movements of prices, and other at were as follows, viz:
alterations in the commercial outlook occurring j Topic No. 1.—Curtailment of unnecessary credits.
from time to time, especially in their relation to | Recommendation: The Federal Advisory Council conbanking and credit. The Federal Reserve | curs in the principle laid down and the recommendations
Board, therefore, has in contemplation plans for ! made by the Federal Reserve Board in regard to the conof
upon the bankers of the
the extension of its statistical and reporting servationthe credits, and we urge their hearty cooperation
country
great importance of
service, with a view of establishing a series of in the adoption of the policy as outlined by the Federal
indexes of industrial, business, and financial Reserve Board in its April Bulletin.
conditions. It is desired that these indexes be
Topic No. 2.—The proper means of extending banking
as nearly scientific and authoritative as they can operations in foreign countries. This should involve a
be made. The Board will endeavor to expand discussion of foreign branches of national banks having a
million dollars or more of capital and surplus, and banks
and coordinate the statistical service of the organized to do a foreign banking business in which
several Federal Reserve Banks in accordance national banks are stockholders to an amount not exceeding
with a general plan on some common basis de- 10 per cent of their capital and surplus.
Recommendations: The Council believes that member
signed to adapt itself to the special conditions
obtaining in each of the several districts. This banks and banks authorized to do a foreign business in
which member banks are stockholders should be encourgeneral statistical or reporting service will be aged to take care of the foreign business of the country
under the direction of the Board in order that during the continuance of the war.
uniformity and harmony of results may be obThe Council reaffirms its statement made on February
tained. Further details of the plan will be an- 19, 1917, as follows: "The Council recommends that the
foreign business of the Federal Reserve Banks should for
nounced at an early date.
Class C Director Named for Richmond Bank.

The Federal Reserve Board on May 24
elected Howard Bruce, of Baltimore, as a class
C director of the Federal Reserve Bank of
Richmond. Mr. Bruce succeeds Mr. Gouverneur, of North Carolina, resigned.
Mr. Bruce is a native Virginian, a graduate of
the Virginia Military Institute. For the past
16 years he has been connected with the
Bartlett-Haward Co., of Baltimore, probably
the largest employers of labor in Baltimore,
and is now president and principal owner of
that company. In the third Liberty campaign
every employee of this company, numbering
over 12,000, were buyers of Liberty bonds.




the present be conducted through correspondents, and
that neither agencies nor branches should be established
in foreign countries by any Federal Reserve Bank until
world conditions are more settled and until the efficiency
of the service rendered by correspondents be thoroughly
tested."
Topic No. 3.—Foreign agencies of Federal Reserve
Banks and the proposition to establish a Government foreign exchange bank. On this subject an interesting
report has been submitted by a committee of the Chamber
of Commerce of the United States, of which I presume you
have a copy.
Recommendation: The Council is of the opinion that it
would be unwise under present conditions to establish a
Government foreign exchange bank or for the Federal
Reserve Board to undertake to regulate foreign exchange
operations further than it is now doing in connection with
the Treasury Department. We unanimously indorse the
recommendations of the Federal Reserve Board that Federal charters be granted to banks which are now engaged

492

FEDERAL RESERVE BULLETIN.

JU.NK 1, 15)18.

in foreign banking business the stock of which is owned
DISTRICT NO. 1.
by member banks.
Topic No. 4.—Senate bill No. 4426 which the Board Trustee, executor, administrator, and registrar of stocks
and bonds:
understands has been favorably reported by the Senate
Blackstone National Bank, Uxbridge, Mass.
Committee on Banking and Currency.
DISTRICT NO. 3.
Recommendation: We are opposed to the guaranty of
bank deposits in any form, believing it to be wrong in
Trustee, executor, and administrator:
principle. Inasmuch as the official report of the CompAtglen National Bank, Atglen, Pa.
troller of the*Currency shows the Joss to depositors in failed Trustee, executor, administrator, and registrar of stocks
and bonds:
national banks to be less than three one-thousandths of 1
South Bethlehem National Bank, South Bethlehem,
per cent during the last three years and with the GovernPa.
ment offering the highest possible security to induce the
DISTRICT No. 4.
use of hoarded funds the necessity of such legislation is
not apparent. The Council reaffirms its declaration of Registrar of stocks and bonds:
April IS, which said: "A plan might, however, be devised
Northern National Bank, Toledo, Ohio.
by the Federal Reserve Board which would provide for
prompt relief to be given depositors of failed member
DISTRICT NO. 5.
banks."
Trustee, executor, and administrator:
(Passed with one dissenting vote.)
First National Bank, Harrisonburg, Va.
Topic No. 5.—Bankers' acceptances.
DISTRICT No. 7.
Recommendation: This Council is of opinion that the
use of bankers' acceptances should be encouraged and Trustee, executor, administrator, and registrar of stocks
and bonds:
developed as it will be of great service to the country in
Farmers National Bank, Edinburg, Ind.
meeting its necessary financial, requirements, particularly
First National Exchange Bank, Port Huron, Mich.
during the period of the war. In order to accomplish this
legislation may be necessary granting the banks greater
DISTRICT NO. 8.
accepting power. Every effort should be made to encourage and develop a broad open discount market for Trustee, executor, and administrator:
First National Bank, Paducah, Ky.
these acceptances.
Topic No. 6.—Discount rates.
DISTRICT NO. 9.
Recommendation: It is the opinion of the Council that
in view of the large payments for taxes and Government Trustee, executor, and administrator:
First National Bank, Forman, N. Dak.
bonds which will be made shortly it is undesirable at this
time to change the discount rates at the Federal Reserve
DISTRICT NO. 10.
Ban Irs.
Trustee, executor, administrator, and registrar of stocks
and bonds:
Acceptances to 100 Per Cent.
Stock Growers National Bank. Cheyenne, "Wyo.

Since the issue of the May BULLETIN the
following banks have been authorized to accept
drafts and bills of exchange up to 100 per cent
of their capital and surplus:

Progress m Retiring Silver Certificates.

Since the adoption of the act of April 23,
authorizing the retirement of silver certificates
First National Bank, Terrell, Tex.
and the breaking up of silver dollars held beBeacon Trust Co., Boston, Mass.
Hamilton National Bank, Chattanooga, Tenn.
hind them in order to supply bullion for export, the authorities of the Treasury Department have been making steady progress in the
Fiduciary Powers.
application of the law. In this the Federal
The applications of the following banks for Reserve Board has cooperated. Two probpermission to act under section ll-(k) of the lems require solution; first, the actual retireFederal Reserve Act have been approved since ment of the silver certificates themselves, and
second, the preparation and issuance of Fedthe issue of the May BULLETIN :




3. 1918.

FEDERAL EESEKVE BULLETIN.

eral Reserve bank notes to take their place.
In connection with the issuance of Federal
Reserve bank notes it was necessary to prepare new plates and to determine upon the distribution of the issues upon some pro rata basis
between Federal Reserve Banks. It was decided to apportion the notes among the banks
upon the same basis as Federal Reserve notes
and to enlist the assistance of Federal Reserve
and member banks in undertaking the withdrawal of silver certificates, first in the higher
denominations and later when the new bills had
been prepared in the denominations of one
and two dollars.
The following letter, transmitted by Gov.
Harding to Federal Reserve Banks on May
24, furnished instructions regarding the first
steps in the operation of retiring the old notes
and substituting the new ones in their place:
MAY 24, 1918.
DEAR SIR : For your information there is inclosed a copy
of a statement issued by the Division of Loans and Currency of the Treasury, showing silver certificates withdrawn from circulation and canceled, and silver dollars
melted or broken up during the week ended May 17.
You will notice that as a result of these operations the
circulating medium has been decreased by $37,881,374.
In order to avoid any shortage in small bills, the Board
is of the opinion that Federal Eeserve Banks should, acting together as a system, replace withdrawals of silver
dollars and silver certificates by the issue of Federal Eeserve bank notes. It is the intention of the Board to keep
the Federal Eeserve Banks informed each week of the
amount of silver and silver certificates withdrawn and to
allot to each Federal Eeserve Bank its proper proportion
of Federal Reserve bank notes as nearly as possible on the
basis of distribution outlined in its letter of April 29th,
X-917.
It is desirable that Federal Eeserve Banks should get
their Federal Eeserve bank notes as received into circulation before issuing additional Federal Eeserve notes.
For the present it will not be possible, however, to adhere
strictly to the basis of distribution outlined in the letter
of April 29, because the amount of Federal Eeserve bank
notes available in the various districts is not uniform, and
three of the Federal Eeserve Banks have no bank notes
available at all. A statement is inclosed showing the
amount of Federal Eeserve bank notes available for each
bank on May 20.
It has been deemed advisable that Federal Eeserve
Banks should first deposit their one-year 3 per cent notes
as security for their Federal Eeserve bank notes and that
they give power of attorney to the Federal Eeserve Board




493

to request the Secretary of the Treasury from time to time
to deposit with the Treasurer of the United States, through
the Comptroller of the Currency for account of the respective banks, such amounts of United States certificates of
indebtedness as may be necessary to secure, after all the
one-year 3 per cent notes have been deposited, the Federal
Eeserve bank notes which will be issued in substitution
for silver certificates withdrawn. The Treasurer of the
United States can thereupon charge the account of each
Federal Eeserve Bank, as a deposit in his general account,
with the amount of the purchase price of the certificates.
In order to carry out this plan the Board requests the
Federal Eeserve Banks to call for Federal Eeserve bank
notes in the amounts indicated below and to deposit as
security with the Comptroller of the Currency an equivalent amount in one-year 3 per cent Treasury notes:
Philadelphia
$1,000,000
Cleveland
2,660,000
Richmond
1,000,000
Atlanta
1,141, 000
Chicago
2, 962, 000
Minneapolis
880.000
Kansas City
1, 374.000
Dallas
1,307; 000
San Francisco
1, 500,. 000
As soon as Federal Eeserve bank notes for all of the
banks are available the Board will make the proper adjustment between the banks.

Following is a typical letter that is being
sent to member banks by Federal Reserve
Banks:
To the cashier of the hank addressed:

DEAR SIR: For the purpose of conserving the Nation's
gold supply, permitting the settlement in silver, where
practicable, of adverse trade balances, providing silver
for subsidiary coinage and commercial use, and assisting
Allied Governments in the war against Germany, Congress
has recently authorized 3350,000,000 of the silver dollars
held in the United States Treasury to be broken up and
sold as bullion. As most of the silver thus held is represented by silver certificates in circulation, it can only be
obtained by the return of silver certificates to the Treasury
for cancellation.
The withdrawal of silver certificates from circulation is
not intended to be permanent, as the act provides that
the Director of the Mint, as soon as practicable after a
sale of silver bullion has been made, shall purchase a like
quantity of silver to take the place of the bullion sold.
To provide temporarily the necessary circulating medium
during the interim between the withdrawal of the silver
certificates and their subsequent reissue when the silver
supply has been replenished by purchases of silver,
Federal Reserve Banks will issue Federal Reserve bank
notes in denominations of $1, $2, $5, and upward. These
notes will be obligations of the Federal Reserve Banks
secured by United States certificates of indebtedness or
bonds and similar otherwise to national-bank notes.

494

JUNE 1,1918.

FEDEEAL RESERVE BULLETIN.

We ask the banks of this district to cooperate with the departments of the Federal Government, the
Government by furnishing us with their present supply leading stock exchanges, the American Bankers'
of $5 silver certificates, which can be replaced in circula- Association and the Investment Bankers' Assotion at once by Federal Reserve notes, Federal Reserve ciation of America.
bank notes, or United States notes. In a few weeks,
Detailed report made by the committee is as
when Federal Reserve bank notes of the $1 and $2 denom- follows:
inations are ready, a request will also be made that silver
certificates in these denominations be sent in.
Public
Municipal.
Industrial.
Tola].
utility.
Will you not, therefore, please sort out of your cash and
forward to us, at our expense, all silver certificates of $5
Number considered
192
62
107
361
and upward which you may have on hand or receive from Number approved.
140
60
78
278
N u m b e r disaptime to time, in return for which we will either—
o
34
24
60
proved .
0
18
5
23
(a) Furnish you, free of expense, other currency of the N umber curtailed..
Amount considered $86,878,512 §172,069,605 8219,510,269 8478,458,386
same or larger denominations, as you may prefer; or
A m o u n t disap19,791,665
6,000,000 39,900,000
65,691,665
proved
(6) Place the amount to your credit in this bank, if a
member bank, or in any designated bank in this district. Aggregate approved. 67,086.847 166,069,605 179,610,269 412,766,721
We feel confident that you will be willing to cooperate Less "refunding".. 21,392,312 125,860,284 311,411,900 258,664,496
new
with the Government in furnishing it the silver it needs Aggregate
45,G94,534
40,209,321
68,198,369 154,102,224
issues
for its own requirements and those of the Allies.
New issues last
Governor.

Work of the Capital Issues Committee.

The following statement was issued on May
22 by the Capital Issues Committee:
Applications for the issue of securities aggregating $478,458,386 were considered by the
Capital Issues Committee of the Federal
Reserve Board. The Committee's existence
ceased upon the taking of office on May 17 of
the Capital Issues Committee created by the
War Finance Corporation Act. While it approved three issues during the period January
12 to February 1, the committee was not
organized and under way until February 1.
Of the total issues considered, the committee
approved $412,766,721, of which $258,664,496
were for the purpose of refunding obligations
previously incurred. New issues approved,
therefore, aggregated $154,102,224. New issues
for the same period last year were $504,211,624,
so that a comparative saving has been effected
of $350,109,399. This saving by action of the
committee does not include the saving of
$19,865,000 effected through the informal postponement for the period of the war secured
through the efforts of the committee or its
agencies. In addition, however, there is an
immeasurable saving caused by the wide
publicity given to the committee's aims and
purposes which has discouraged at the very
source issues clearly incompatible with the
national interest at this time.
The committee attributes this success to the
splendid cooperation and loyal support it has
received from State and municipal authorities,




year, same period. 108,952,865 107,504., 075 287,754,684 504,211,624
issues approved:
Amount original applications
65,486,199
46,209,321 108,098,369 219,793,889
Amount aDproved
40,209,321
68,198,369 154,102,224
45,694,534
Curtailment ef19,791,665
6,000,000 39,900,000
65,691,665
fected
Analysis of applications inlorm a l l v discouraged:
8
3
6
17
Number
Amount

$8,915,000

§7,360,000

$3,590,000

$19,865,000

Special Deposits of Public Moneys.

The following circular relating to special
deposits of public moneys under the act of
Congress approved September 24, 1917, as
amended by the act of Congress approved
April 4, 1918, was issued by the Treasury Department on May 29:
To Federal Reserve Banks and other banks and trust companies incorporated under the laws of the United States or
of any State.

Department Circular No. 92, dated October 6,1917. and
the supplement thereto, dated April 10, 1918, in relation
to special deposits of Government funds in connection
with subscriptions for bonds and certificates of indebtedness of the United States issued under the act of Congress
approved September 24, 1917, are hereby further supplemented as follows:
The provisions of the said circular and supplement are
extended, subject to the provisions hereof, to deposits of
moneys, arising from the payment of income and excess
profits taxes, made under the act of Congress approved
September 24, 1917, as amended by the act of Congress
approved April 4, 1918. Applications hereafter made for
deposits of public moneys under said acts should be. and
all applications for such deposits made on and after

JUNE 1,1918.

June 5, 1918, must be, in Form H3 hereto attached, and
be accompanied by a certified copy of resolutions duly
adopted by the board of directors of the applicant in
Form J3 hereto attached.
Depositaries already qualified to a sufficient amount pursuant to Department Circular No. 92, or pursuant to said
circular as amended and supplemented under date of
April 10, 1918, will not be required to file anew formal
applications or resolutions in connection with deposits of
moneys arising from the payment of income and excess
profits taxes, but, if they desire to receive deposits hereunder must so notify the Federal Reserve Bank of the district in which they are located by letter or telegram; and
they will thereby and by the acceptance of such deposits,
be conclusively presumed to have assented to all the terms
and provisions hereof. The words "qualified depositaries" in this circular refer exclusively to depositaries
qualified under Department Circular No. 92 and supplements thereto.
Collateral security pledged or to be pledged by qualified
depositaries will be conclusively deemed to be pledged
as collateral security for deposits of public moneys made
under Department Circular No. 92 and supplements
thereto, whether arising from the sale of bonds or certificates of indebtedness of the United States or arising from
the payment of income and excess profits taxes.
Payment of income and excess profits taxes can not be
made by credit.
It is intended, out of any unexpended cash proceeds
arising from the payment of income and excess profits
taxes, to make deposits, through the Federal Reserve
Banks, under direction of the Secretary of the Treasury,
with qualified depositaries throughout the United States,
as nearly as may be proportionately, having regard to the
following three determining factors: (1) The amount of
checks, received by collectors of internal revenue on
and after June 10, 1918, and until further notice, drawn
upon and paid by such depositaries, respectively, in payment of income and excess profits taxes; (2) the amount of
Treasury certificates of indebtedness of all issues maturing
June 25, 1918, sold to and through such depositaries, respectively; and (3) the amount for which such depositaries, respectively, shall be qualified in excess of existing deposits. It is the intention that such deposits shall,
as nearly as may be, be made simultaneously with the
payment of checks drawn upon such depositaries, respectively, in payment of such taxes. Appropriate instructions will be given to collectors of internal revenue
and to Federal Reserve Banks.
All deposits will be subject to withdrawal on demand
and will bear interest at the rate of 2 per cent per annum,
as provided in the above-mentioned circular and supplement. Deposits made hereunder shall be credited to the
"War Loan Deposit Account."
A principal object of the issue of the United States
Treasury certificates of indebtedness maturing June 25,
1918, was to prevent unnecessary dislocation of funds, and
this object would be defeated if such certificates held by
62161—18
3




495

FEDERAL RESERVE BULLETIN.

taxpayers were not turned in in payment of their taxes,
but were either sold or hypothecated by the taxpayers and
in consequence were presented for payment in cash. In
view of the fact that the aggregate amount of these certificates now issued exceeds $1,500,000,000 this is important,
and banks and trust companies are required to cooperate
by advising their customers to turn in certificates, to the
extent that they have taxes to pay, in payment of such
taxes. No deposit of moneys arising from the payment
of income and excess profits taxes will be made with any
depositary which disregards this requirement.
W. G. MCADOO,

Secretary of the Treastunj.
[Form 113—Public Moneys.]
APPLICATION" 70R DEPOSITS.

To the Federal Reserve Bank of

, fiscal agent of the United States:

The undersigned bank or trust company, in accordance with the
provisions of Treasury Department Circular No. 92, dated October 6,
1917, as amended and supplemented April 10,1918, and May 29,1918, and
pursuant to due action of its board of directors, hereby makes application
for the deposit of public moneys with it from time to time under the act
of Congress approved September 24, 1917, as amended by the act approved April 4,1918, the aggregate amount of such deposits not to exceed at any one time S
; and assigns and agrees to pledge, from
time to time, to and with the Federal Reserve Bank of
,
asfiscalagent of the United States, as collateral security for such deposits
as may be made from time to time pursuant to this application, securities
of the character and amount required by said circular.
President (Vice President).
Street
City or town
State

[Form J3—Public Moneys.]
RESOLUTIONS AUTHORIZING APPLICATION POR DEPOSITS.

I hereby certify that the following resolutions were duly adopted at a
meeting of the board of directors of the below-named bank (trust company), which meeting was duly called and duly held on the
day
of
, 191.., a quorum being present, and that the said resolutions
were spread upon the minutes of said meeting:
Resolved, That in accordance with the provisions of Treasury Department Circular No. 92, dated October 6, 19.17, as amended and supplemented April 10, 1918, and May 29, 1918, this bank (trust company)
makes application for the deposit of public moneys with it from time
to time under the act of Congress approved September 24, 1917, as
amended by the act approved April 4, 1918, the aggregate amount of
such deposits not to exceed at any one time S
; and assign
and agree to pledge from time to time to and with the Federal Reserve
Bank of
, as fiscal agent of the United
States, as collateral security for such deposits as may be made from time
to time pursuant to such application, securities of the character and
amount required by said circular; and
Resolved, That the president, or any vice president, or cashier, or secretary, of the undersigned bank (trust company) is hereby authorized to
make application, assignment, and agreement as aforesaid and from
time to time to deliver to and pledge with said Federal Reserve Bank,
or any custodian or custodians appointed by it, securities of the undersigned bank (trust company) of a character and amount at least sufficient to secure such deposits according to the terms of said Treasury
Department circular as amended and supplemented as aforesaid, and
from time to time to withdraw securities and to substitute other securities and to pledge and deposit additional securities.
In witness whereof I have hereunto signed my name and affixed the
seal of the
of
Cashier (Secretary).

496

FEDEBAL RESERVE BULLETIN.

Operations of the War Finance Corporation.
The War Finance Corporation, on May 28,
authorized the following statement:
In view of the applications for direct advance
which have been filled with the War Finance
Corporation, the directors wish to point out
that an erroneous impression seems to exist in
certain quarters that the Corporation is intended primarily to make direct advances to
borrowers under the "exceptional cases" clause
of the act. This, however, is not the purpose
of the act, which was designed primarily to
enable credit to be extended by the War Finance Corporation through the banks of the
country to "war industries"—that is, to those
industries whose operations are necessary or
contributory to the war. In other words, the
resources of the War Finance Corporation are
not intended to be loaned directly to war industries unless in an exceptional case, but only
indirectly through the banks. As the Secretary of the Treasury stated before the committees of Congress when the bill was under
consideration, "the provision of the bill permitting direct loans by the corporation, in exceptional cases, is intended to provide for those
rare instances where it may be made to appear
to the Corporation that a meritorious borrower
is being unwisely discriminated against by the
banks." In the progress of the bill through
Congress advances under the exceptional cases
clause were further restricted both as to security and as to the amount which could be
advanced—thus indicating the intention of
Congress that in order to obtain an advance
under this clause the borrower must show some
exceptional circumstances clearly entitling him
to relief.
In no circumstances was it the intention that
the War Finance Corporation should make
loans except upon adequate security.
It is expected that the greatest usefulness of
the War Finance Corporation will be found in
its operations through the banks. As the
Secretary of the Treasury stated before the
Senate Finance Committee, the organization of
the War Finance Corporation should be regarded "primarily as a measure to enable the
banks, * * * " to continue to furnish essen"
tial credits for war industries and enterprises
which are necessary or contributory to the prosecution of the war. In Europe central banks,
which correspond to our Federal Reserve Banks
in a sense, are permitted to grant to banks and
bankers loans upon stocks and bonds upon
certain well-defined terms; but here the Federal




rxE 1, 11)18.

Reserve Banks are not permitted to do that,
the Federal Reserve Act having specifically contemplated advances of that character only upon
what we call liquid or commercial paper, and
therefore the Federal Reserve Banks are not
permitted to rediscount any paper for their
banks which is secured by fixed investments.
The Federal Reserve Act does not provide for
this, and the War Finance Corporation is designed as a war emergency to fill this gap."
The Corporation was organized to provide
an instrumentality to which the banks of the
country could resort to obtain accommodation
on advances made by them to war industries
upon a character of security not available for
rediscount at a Federal Reserve Bank. It is
hoped that as need arises the banks of the
country will' avail themselves of the facilities
thus afforded, so that they may be amply able
to extend credit to those industries of the
country which are necessary or contributory to
the prosecution of the war.
From the applications received by the War
Finance Corporation there seems to be an impression in certain quarters that the Corporation was specially designed to provide funds for
meeting maturing obligations, particularly those
of public-utility companies. The law expressly
provides that the Corporation shall not make
direct advances to provide funds to meet such
maturing obligations except possibly in some
rare case which could clearly be brought within
the "exceptional cases clause." Of course the
Corporation will stand ready to lend its assistance to banks and bankers in proper cases
where they have themselves made advances to
war industries whether for the purpose of meeting maturing obligations or otherwise, and
direct advances in deserving cases that come
clearly within the provisions of the law.
Holders of maturing obligations, whether of
public utilities or of other concerns which may
find themselves unable because of temporary
conditions to meet their commitments punctually, should consider whether in the public
interest as well as their own they should not
cooperate by consenting to reasonable renewals.
Public-utility companies particularly, in cooperation with the communities in which they
operate, should have the opportunity of adjusting themselves to the changed conditions
brought about by the war.
No machinery has been specially provided
for direct purchases of obligations of the public
utilities whether to meet maturities or otherwise, either through the War Finance Corporation or through any other governmental agency.
The situation of these public utility companies

JUNE 1,1918.

FEDERAL BESEEVE BULLETIN.

is therefore quite different from that of the
railroads, where Congress has made specific
provision for the purchase of their securities
by the Government in certain exigencies, yet
even the railroads are expected, wherever possible, to meet their own maturities and to pay
what the money is worth to accomplish that
end. It must be remembered that the railroads are under Federal operation, and their
rates are subject to Federal control, and that
the Government is therefore in a position to
see to it that their charges shall be sufficient to
meet the cost of the service rendered, in the
case, however, of the public utilities, neither
their operations nor their rates are subject to
Federal control. Wherever the charges do not
amount to adequate compensation for the
services rendered, relief can be had only
through the appropriate local authorities, and
time is essential to enable the companies and
the communities in which they operate to
reach a satisfactory solution of this important
problem. It is not a problem which can be
disposed of by having the Federal Government
through the War Finance Corporation assume
the burden of financing the operations of these
local companies except in exceptional circumstances wnich may make it a matter of national
importance that advances should be made.
The local authorities will no doubt respond as
promptly as possible in cases where relief is
needed because of changed conditions, as it is
clear that the soundness and efficiency of
public utilities is intimately connected with a
vigorous and successful prosecution of the war.
A New Measure of Taxation.
The President, on May 27, delivered, before
Congress the following address which is reprinted here because of its direct bearing upon
general banking and financial conditions:
Gentlemen of the Congress: It is with unaffected
reluctance that I come to ask you to prolong your session
long enough to provide more adequate resources for the
Treasury for the conduct of the war. I have reason to
appreciate as fully as you do how arduous the session has
been. Your labors have been severe and protracted.
You have passed a long series of measures which required
the debate of many doubtful questions of judgment and
many exceedingly difficult questions of principle as well
as of practice. The summer is upon us in which labor and
counsel are twice arduous and are constantly apt to be
impaired by lassitude and fatigue.
The elections are at hand, and. we ought as soon as possible to go and render an intimate account of our trusteeship
to the people who delegated us to act for them in the




497

weighty and anxious matters that crowd upon us in these
days of critical choice and action. But we dare not go
to the elections until we have done cur duty to the full.
These are days when duty stands stark and naked, and
even with closed eyes we know it is there. Excuses are
unavailing. We have either done our duty or we have
not. The fact will be as gross and plain as the duty
itself. In such a case lassitude and fatigue seem negligible
enough. The facts are tonic and suffice to freshen the
labor.
And the facts are these: Additional revenues must
manifestly be provided for. It would be a most unsound
policy to raise too large a proportion of them by loan,
and it is evident that the four billions now provided for
by taxation will not of themselves sustain the greatly
enlarged budget to which we must immediately look
forward. We can not in fairness wait until the end of the
fiscal year is at hand to apprise our people of the taxes
they must pay on their earnings of the present calendar
year, whose accountings and expenditures will then be
closed. We can not get increased taxes unless the country
knows what they are to be and practices the necessary
economy to make them available. Definiteness, early
denniteness. as to what its tasks are to be is absolutely
necessary for the successful administration of the Treasury;
it can not frame fair and workable regulations in haste;
and it must frame its regulations in haste if it is not to
know its exact task until the very eve of its performance.
The present tax laws are marred, moreover, by inequities
which ought to be remedied. Indisputable facts, every
one: and we can not alter or blink them. To state them
is argument enough.
And yet perhaps you will permit me to dwell for a
moment upon the situation they disclose. Enormous
loans freely spent in the stimulation of industry of almost
every sort produce inflations and extravagances which
presently make the whole economic structure questionable
and insecure and the very basis of credit is cut away.
Only fair, equitably distributed taxation, of the widest
incidence and drawing chiefly from the sources which
would be likely to demoralize credit by their very abundance, can prevent inflation and keep our industrial system
free of speculation and waste. We shall naturally turn,
therefore, I suppose, to war profits and incomes and luxuries for the additional taxes. But the war profits and
incomes upon which the increased taxes will be levied will
be the profits and incomes of the calendar year 1918. It
would be manifestly unfair to wait until the early months
of 1919 to say what they are to be. It might be difficult,
I should imagine, to run the mill with water that had already gone over the wheel.
Moreover, taxes of that sort will not be paid until the
June of next year, and the Treasury must anticipate them.
It must use the money they are to produce before it is due.
It must sell short-time certificates of indebtedness. In
the autumn a much larger sale of long-time bonds must be
effected than has yet been attempted. What are the
bankers to think of the certificates if they do not certainly

498

FEDERAL RESERVE BULLETIN.

know where the money is to come from which is to take
them up? And how are investors to approach the purchase of bonds with any sort of confidence or knowledge
of their own affairs if they do not know what taxes they are
to pay and what economies and adjustments of their
business they must effect? I can not assure the country
of a successful administration of the Treasury in 1918 if
the question of further taxation is to be left undecided
until 1919.
The consideration that dominates every other now, and
makes every other seem trivial and negligible, is the
winning of the war. We are not only in the midst of the
war, we are at the very peak and crisis of it. Hundreds
of thousands of our men, carrying our hearts with them
and our fortunes, are in the field, and ships are crowding
faster and faster to the ports of France and England with
regiment after regiment, thousand after thousand, to join
them until the enemy shall be beaten and brought to a
reckoning with mankind. There can be no pause or intermission. The great enterprise must, on the contrary, be
pushed with greater and greater energy. The volume of
our might must steadily and rapidly be augumented until
there can be no question of resisting it. If that is to be
accomplished, gentlemen, money must sustain it to the
utmost. Our financial program must no more be left in
doubt or suffered to lag than our ordnance program or our
ship program or our munitions program or our program for
making millions of men ready. These others are not
programs, indeed, but mere plans upon paper, unless there
is to be an unquestionable supply of money.
That is the situation, and it is the situation which creates
the duty, no choice or preference of ours. There is only
one way to meet that duty. We must meet it without
selfishness or fear of consequences. Politics is adjourned.
The elections will go to those who think least of it; to those
who go to the constituencies without explanations or excuses, with a plain record of duty faithfully and disinterestedly performed. I, for one, am always confident that
the people of this country will give a just verdict upon the
service of the men who act for them when the facts are
such that no man can disguise or conceal them. There is
no danger of deceit now. An intense and pitiless light
beats upon every man and every action in this tragic plot
of war that is now upon the stage. If lobbyists hurry to
Washington to attempt to turn what you do in the matter
of taxation to their protection or advantage, the light will
beat also upon them. There is abundant fuel for the light
in the records of the Treasury with regard to profits of every
sort. The profiteering that can not be got at by the restraints of conscience and love of country can be got at by
taxation. There is such profiteering now and the information with regard to it is available and indisputable.
I am advising you to act upon this matter of taxation
now, gentlemen, not because I do not know that you can
see and interpret the facts and the duty they impose, just
as well and with as clear a perception of the obligations involved as I can, but because there is a certain solemn satisfaction in sharing with you the responsibilities of such a




JUNE 1,1918.

time. The world never stood in such case before. Men
never before had so clear or so moving a vision of duty. I
know that you will begrudge the work to be done here by
us no more than the men begrudge us theirs who lie in the
trenches and sally forth to their death. There is a stimulating comradeship knitting us all together. And this task
to which I invite your immediate consideration will be
performed under favorable influences if we will look to
what the country is thinking and expecting and care nothing at all for what is being said and believed in the lobbies
of Washington hotels, where the atmosphere seems to make
it possible to believe what is believed nowhere else.
Have you not felt the spirit of the Nation rise and its
thought become a single and common thought since these
eventful days came in which we have been sending our
boys to the other side? I think you must read that thought
as I do, to mean this, that the people of this country are not
only united in the resolute purpose to win this war, but are
ready and willing to bear any burden and undergo any
sacrifice that may be necessary for them to bear in order to
win it. We need not be afraid to tax them, if we lay taxes
justly. They know that the war must be paid for and that
it is they who must pay for it, and if the burden is justly
distributed and the sacrifice made a common sacrifice from
which none escapes who can bear it at all, they will carry
it cheerfully and with a sort of solemn pride. I have
always been proud to be an American, and was never more
proud than now, when all that we have said and all that we
have foreseen about our people is coming true.
The great days have come when the only thing that they
ask for or admire is duty greatly and adequately done;
when their only wish for America is that she may share the
freedom she enjoys; when a great compelling sympathy
wells up in their hearts for men everywhere who suffer and
are oppressed, and when they see at last the high uses for
which their wealth has been piled up and their mighty
power accumulated and, counting neither blood nor treasure now that their final day of opportunity has come, rejoice to spend and to be spent through a long night of
suffering and terror in order that they and men everywhere
may see the dawn of a day of righteousness and justice and
peace. Shall we grow weary when they bid us act?

Contributions to the Eed Cross.
The act authorizing national banks to contribute to the American Eed Cross was signed
by the President on May 23. The text of the
act follows:
[S. 3911.]
A BILL Authorizing national banks to subscribe to the American
National Red Cross.

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That
during the continuance of the state of war now existing it
shall be lawful for any national banking association to con-

499

FEDERAL RESERVE BULLETIN.

JUNE 1, 1918.

tribute to the American National Red Cross, out of any
net profits otherwise available under the law for the
declaration of dividends, such sum or sums as the directors
of said association shall deem expedient. Each association shall report to the Comptroller of the Currency within
ten days after the making of any such contribution the
amount of such contribution and the amount of net earnings in excess of such contribution. Such report shall be
attested by the president or cashier of the association in
like manner as the report of the declaration of any
dividend.
SEC. 2. That all sums so contributed shall be utilized
by the American National Red Cross in furnishing volunteer aid to the sick and wounded of the combatant armies,
the voluntary relief of the Army and Navy of the United
States, and the relief and mitigation of the suffering caused
by the war to the people of the United States and their
allied nations.

exportation for which a license is desired will be compatible with the public interest.
2. Each Federal Reserve Bank shall keep a record copy
of each application filed with it under the provisions of
this regulation and shall forward the original application
and a duplicate to the Federal Reserve Board at Washington, together with such information or suggestions as it
may believe proper in the circumstances,' and shall in
addition make a formal recommendation as to whether or
not in its opinion the exportation should be permitted.
3. The Federal Reserve Board, subject to the approval
of the Secretary of the Treasury, is hereby authorized and
empowered upon receipt of such application and the
recommendation of the Federal Reserve Bank to make
such ruling as it may deem proper in the circumstances
and if in its opinion the exportation in question be compatible with the public interest, to permit said exportation to be made; otherwise to refuse it.
WOODROW WILSON.
THE WHITE HOUSE, September 7, 1917.
BY THE PRESIDENT OF THE UNITED STATES OF AMERICA,
A PROCLAMATION.

enacted, and
President has
Control of Coin, Bullion, and Currency Movement. onWhereas Congress has 1917, approvedthelaw, which conthe 15th day of Jane,
a
The work of the Federal Reserve Board in tains the following provisions:
Whenever during the
rhall
applying the gold embargo provided under the find that the public safetypresentsowar the President make
shall require, and shall
Executive order of September 7, 1917, has proclamation thereof, it shall be unlawful to export from
or
or take
any counresulted, up to the present time, in the exami- tryship from in such out of the United States to or articles
named
proclamation any article
nation and consideration of 2,020 applications mentioned in such proclamation, except at such time or
orders, and subject
for licenses to export coin, bullion, and cur- times, and under such regulations and the President shall
to such limitations and exceptions as
rency out of the country. Some minor modi- prescribe, until otherwise ordered by the President or by
Congress: Provided,
no preference shall be
fications of the regulations relating to this phase given to the ports of Jiowcver, That those of another.
one State over
of the Board's work have in practice become
Any person who shall export, ship, or take out, or deliver
to deliver
necessary, particularly in the section relating or attempt in violationfor export, shipment, or taking out
any article
of this title, or of any regulation or
to funds carried by travelers. The Executive order made hereunder, shall be fined not more than $10,000,
natural
for not more than two
order governing the exportation of coin, bul- or, if aor both; person, imprisoned delivered or exported,
years,
and any article so
lion, and currency is as follows:
shipped, or taken out, or attempted to be so delivered or
EXECUTIVE ORDER.

By virtue of the authority vested in me, I direct that
the regulations, orders, limitations, and exceptions prescribed in relation to the exportation of coin, bullion, and
currency shall be administered by and under the authority
of the Secretary of the Treasury; and upon the recommendation of the Secretary of the Treasury I hereby prescribe the following regulations in relation thereto:
1. Any individual, firm, or corporation desiring to export from the United States or any of its Territorial possessions to any foreign country named in the proclamation
dated September 7, 1917, any com, bullion, or currency,
shall first file an application in triplicate with the Federal
Reserve Bank of the district in which such individual,
firm, or corporation is located, such application to state
under oath and in detail the nature of the transaction, the
amount involved, the parties directly and indirectly interested, and such other information as may be of assistance
to the proper authorities in determining whether the
62161—18
3*




exported, shipped, or taken out, shall be seized and forfeited to the United States; and any officer, director, or
agent of a corporation who participates in any such violation shall be liable to like fine or imprisonment, or both.
Whenever there is reasonable cause to believe that any
vessel, domestic or foreign, is about to carry out of the
United States any article or articles in violation of the provisions of this title, the collector of customs for the district
in which such vessel is located is hereby authorized and
empowered, subject to review by the Secretary of Commerce, to refuse clearance to any such vessel, domestic or
foreign, for which clearance is required by law, and by
| formal notice served upon the owners, master, or person or
persons in command or charge of any domestic vessel foi
which clearance is not required by law to forbid the departure of such vessel from the port, and it shall thereupon
be unlawful for such vessel to depart. Whoever, in viola| tion of any of the provisions of this section shall take, or
j attempt to take, or authorize the taking of any such vessel
out of port or from the jurisdiction of the United States,
shall be fined not more than $10,000 or imprisoned not
more than two years, or both; and, in addition, such vessel,
j her tackle, apparel, furniture, equipment, and her forbid I den cargo shall be forfeited to the United States.

500

FEDERAL BESEEVE BULLETIN.

And whereas the President has heretofore by proclamation, under date of the 27th day of August in the year
1917, declared certain exports in time of war unlawful.
and the President finds that the public safety requires
that such proclamation be amended and supplemented
in respect to the articles hereinafter mentioned:
Now, therefore, I Woodrow Wilson, President of the
United States of America, do hereby proclaim to all whom
it may concern, that the public safety requires that,
except at such time or times, and under such regulations
and orders, and subject to such limitations and exceptions
as the President shall prescribe, until otherwise ordered
by the President or by Congress, the following articles,
namely: Coin, bullion, and currency shall not, on and
after the 10th day of September, in the year 1917, be
exported from or shipped from or taken out of the United
States or its territorial possessions to Albania, AustriaHungary, Belgium, Bulgaria, Denmark, her colonies,
possessions or protectorates, Germany, her colonies, possessions, or protectorates, Greece, Leichtenstein, Luxembourg, The Kingdom of the Netherlands, Norway, Spain,
her colonies, possessions, or protectorates, Sweden, Switzerland or Turkey, Abyssinia, Afghanistan, Argentina,
Bolivia, Brazil, China, Chile, Colombia, Costa Rica,
Cuba, Dominican Republic, Ecuador, Egypt, France,
her colonies, possessions, or protectorates, Guatemala, |
Haiti, Honduras, Italy, her colonies, possessions, or protectorates, Great Britain, her colonies, possessions, or protectorates, Japan, Liberia, Mexico, Monaco, Montenegro,
Morocco, Nepal, Nicaragua, the colonies, possessions, or
protectorates of The Netherlands, Oman, Panama, Paraguay, Persia, Peru, Portugal, her colonies, possessions, or
protectorates, Roumania, Russia, Salvador, San Marino,
Serbia, Siam, Uruguay, or Venezuela.
The regulations, orders, limitations, and exceptions
prescribed will be administered by and under the authority of the Secretary of the Treasury, from whom licenses
in conformity with said regulations, orders, limitations,
and exceptions will issue.
Except as hereby amended and supplemented, the
above-mentioned proclamation under date of August 27,
1917, shall continue in full force and effect.
In witness whereof I have hereunto set my hand and
caused the seal of the United States of America to be
affixed.
Done at the city of Washington this 7th day of September, in the year of our Lord 1917, and of the independence
of the United States of America the 142d.

JUNE 1, 1918.

must file an application with the Federal Reserve Bank of
the district in which the applicant resides or where the
transaction requiring the shipment originates. These
applications must be made on a standard form, which has
been furnished to all Federal Reserve Banks.
EXPORTS OF GOLD.

It will be the general policy of the Board not to authorize the exportation of gold unless the shipment applied for is shown to be connected in a direct and definite way with a corresponding importation of merchandise for consumption in the United States, but in any
case authorization will be granted only where the exportation of gold in payment for such merchandise is found
to be compatible with the public interest. In reaching
its conclusions, however, the Board will consider all attending circumstances in each particular case.
SHIPMENTS OF CANADIAN SILVER COIN AND CURRENCY.

Until further notice the Board will approve all applications for the exportation of Canadian silver coin and
currency to Canada, and of Mexican paper currency to
Mexico, without limitation. The Treasury Department
has instructed collectors of customs to pass such shipments when approved by the Federal Reserve Bank of the
district from which the shipments are made. Continuous
permits for shipments of Canadian silver coin and currency
and of Mexican paper currency, without requiring an application in each case, may be granted by Federal Reserve
Banks upon condition that each transaction will be reported to it without delay. The Federal Reserve Banks
will transmit to the Board weekly reports of all applications of every kind passed upon by them, showing the
amount of each shipment.
EXPORTS OF SILVER BULLION AND SILVER COIN OF FOREIGN
MINTAGE.

Applications for the exportation of silver bullion and
silver coin of foreign mintage will in general be approved
by the Federal Reserve Board upon recommendation of
the Federal Reserve Bank with which the application is
filed.
UNITED STATES NOTES, NATIONAL BANK NOTES, FEDERAL
RESERVE NOTES, AND FEDERAL RESERVE BANK NOTES.

The administrative procedure under this
order is now as follows:

Applications for the exportation of United States notes,
national bank notes, Federal Reserve notes, and Federal
Reserve Bank notes will as a rule be approved by the
Federal Reserve Board, but each application must come
before the Board for its determination before shipment is
made, unless authority to pass upon such applications
locally has been delegated by the Board to the respective
Federal Reserve Banks.

ADMINISTRATIVE PROCEDURE.

TRAVELERS LEAVING THE COUNTRY.

METHOD OF MAKING APPLICATION.

Instructions have been issued by the Treasury Department to collectors of customs to permit travelers leaving
the country to carry on their persons or in their baggage:

WOODROW WILSON.

By the President:
ROBERT LANSING,
Secretary of State.

Individuals, firms, and corporations desiring to obtain
licenses for the exportation of coin, bullion, and currency




501

FEDERAL RESERVE BULLETIN.

JUNE 1, 1918.

(a) United States notes, national-bank notes, Federal customs at the port from which the applicant expects to
Reserve notes, or-Federal Reserve Bank notes not to ex- leave the United States, and collectors of customs have
been notified that in dealing with travelers to whom such
ceed $1,000 for each adult.
(6) Subsidiary silver coins not to exceed $100 for each licenses have been issued they may act without communiadult, such coin to be in lieu of a like amount of notes cating with the Federal Reserve Board.
under (a) above.
GENERAL.
Collectors of customs have been informed that in dealing
with travelers they may act in accordance with these reguShipments of coin or currency which appear to be or are
lations, without communicating with the Federal Reserve suspected of being for enemy account or for the benefit
Board or with the Federal Reserve Bank of their district. of the enemy will not be permitted. These regulations are
Travelers who desire to take with them silver dollars or issued subject to change without notice, and no applicagold coin, or gold or silver certificates in any amount, tion granted will be regarded as constituting a precedent.
must obtain a license from the Federal Reserve Bank of
Following is a summarized statement of the
their district, from which application blanks may be obshipments of coin, bullion, and currency which
tained. Whenever such licenses are issued, the Federal
Reserve Bank will give due notice to the collector of I the Board has authorized up to the present date:
Amounts of licenses granted by the Federal Reserve Board during the period Sept. 7, 1917, io May 24, 1918, covering exports from the United States of coin, bullion, and currency.
«ilver

Gold.

United Kingdom
France
Italy
Russia
Netherlands
Sweden
Norway
Spain
Switzerland
Canada
Newfoundland
Mexico
Guatemala
Honduras
Nicaragua. . .
Salvador
Cuba..
Porto Rico
Dominican Republic .
Haiti
:.
British West Indies...
Dutch West Indies
Panama
Argentina
Brazil
Chile
Colombia
Bolivia
Ecuador.
Peru
Venezuela
Uruguay
British Guina
Dutch G uina
China. .
Japan
India
Dutch East indies .
British West Africa
All other
Total

Silver

a n d

; currency.

200
70
300,000
2 000 000

919,561,371
812,500

$202,400

1,276,884

44,508

11,364

84,(555

20,000

iSl,725

::::.::::.::

2 225
7,329,290
26,706,462
228

200
23,237,020
50
2,331,560

$600, 111
3,349,600
160,000

12,999

. .

1,273
40,000
38,245

20
62,000
695
10,274,398
876,165
300,000
1,241,090
554,420
216,000

Miscellaneous.

Currency.

5,000
7,377

980,000
200,000
6,342
57

32,666

8,666 :

713,437

8,105,669
50,000 i
540,200 !
20,500
28,000
18,881,000
386,200
942,000 i
20,000
68,000
50

3 3,000
3 116.000
'.....

<600
&36.200

4,539
10,000
160,000
72,500
5,000

6490,000

12,000

2,990,000
881,615
3,300,000
1,538,000
500
151,150

4,580
1,669
26,338,263
560,000
79,884,819
1,100,000
13,300
250

7 58,740,182

155,237,725

2,700
48,000

50,000
5,328 110

' 30,382.703

647,526

Total.
$19,768,426
814,225
200
1,321,462
300.000
2,000,000
31,364
225
8,200
31,882,858
50
40,609,291
50,228
700,200
20,500
28,000
18,895,872
1,402,400
1,182,000
20,000
112,587
127
5,000
105,938
10,695
10,274,398
1,036,165
300,000
72,500
1,736,090
569,420
210,000
4,580
J,609
29,330, 983
1,489.615
2*3,184)819
2,63X, 000
13,800
201,400
250,336,245

In the above table amounts of silver stated in terms of Mexican currency were converted to United States equivalents at the rate of 50 cents
per peso.
1
Currency, silver, and gold.
2
3 Does not include §1,250,000 gold for which the Board has issued licenses permitting either export or earmarking in trade with Spain.
Gold and silver.
*
5 Copper.
Cents and dimes.
6
7 Nickel coin.
Exclusive of £600 to the Fanning Islands and £9.000 to Canada.
s Exclusive of currency as follows: Russian rouble's to Japan, 15,080; to the United Kingdom .1,600; 4,000 guilders to the Netherlands; 6,000
kroner to Sweden; 5,000francs to Switzerland.




502

FEDERAL RESERVE BULLETIN.

Deposits, Loans and Discounts, and Total
Investments of National Banks, 1914-1918,
Changes in the volume of deposits in connection with the loan and investment operations
of the national banks since the outbreak of the
war are presented in the following table and
accompanying diagram. In the first column
are shown figures of gross deposits, including
unpaid dividends, Government and so-called
"individual" deposits, postal-savings deposits,
and gross amount due to banks and bankers
(i. e., without deduction of offsetting amounts
due from banks and bankers, clearing house
exchanges and checks on banks in the same
place). In the third column are shown the
figures of net deposits, based on the Comptroller's reserve computations. To the amounts
shown in the Comptroller's abstracts have been
added uniformly amounts of Government deposits, which were disregarded by the Comptroller's office in computing reserve under calls
subsequent to the passage of the act of April
24, 1917, which exempted Government deposits from reserve requirements. In column
5 are shown combined figures of "gross individual and Government deposits, exclusive of
amounts due to banks and bankers.
Because of the much larger balances carried
by the banks with approved correspondents
prior to the enactment of the June 21, 1917,
amendment the figures for the earlier period of

JUNE 1, 1018.

net deposits as shown in column 3 are considerably in excess of the combined gross individual and Government deposits as shown in
column 5. The latter indicate a slow, and
with few exceptions, steady progress, the June,
1915, showing an increase of 418 millions over
those of June, 1914, as against a decrease of 212
millions in the net deposit figures.
Figures of loans and discounts (column 7) on
the whole show a fairly parallel movement
with those of net deposits, though the depression of 1914-15 is reflected more clearly in
the heavy decreases of net deposits than in the
reduction of loans and discounts. In column
9 are shown the figures of total investments,
exclusive of those of a fixed character. Prior
to the entrance of the United States into the
war the relative growth of this item differed
but little from that shown for loans and investments, as may be seen from a comparison
of the corresponding index figures to March 5,
1917. Since then, owing to the considerable
investments by banks in Government securities,
largely certificates of indebtedness, the rate of
growth for aggregate investments has been
considerably larger than for loans and discounts.
In addition to the absolute figures, percentages are given for each set of items calculated
on the amounts reported under the June 30,
1914, call,

Movement of the several classes of deposits, also of loans and investments of national banks, June SO, 1914, to Mar. 4,1918.
Gross deposits.
1.

June 30,1914..
Sept. 12,1914..
Oct. 31,1914...
Dec. 31,1914...
Mar. 4,1915...,
Mav 1,1915....
Jane 23,1915.
Sept. 2,1915..
Nov. 10,1915.
Doc. 31,1915..
Mar. 7,1916...
May 1,1916...
June 20,1916..
Sept. 12,1916.
Nov. 17,1916..
Dec. 27,1916..
Mar. 5,1917...
May 1,1917...
June 20, 1917..
Sept. 11,1917.
Nov. 20,1917.,
Dec. 31,1917..
Mar. 4,1918...

Individual and
Government
deposits.

Net, including
Government
deposits.
3.

~

\

5.

6.

Loans and discounts, including
overdrafts .i
7.

Loans and investments. 2
9.

10.

Millions of
Millions of
Millions of
Millions of
Millions of
dollars.
Per cent, dollars.
Per cent, dollars.
Per cent
dollars.
Per cent, dollars.
Per cent.
8,564
7,495
100.0
100.0
100.0
6,197 I 100.0
6,446
8,347
100.0
8,188
7,293
95. ft
99.6
97.3
6,238 ! 100.7
6,418
8,637 I
103.5
8,076
7,167
94.3
98.3
95.6
6,185 I
99.8
6,335
8,635 '
103.5
8,235
6,668
96.2
98.7
89.0
6,366 | 102.7
6,363
8,437
101.1
8,593
7,066
100.3
100.9
94.2
6,350
102.5
6,507
8,471
101.5
8,891
7,198
103.8
103.2
96.0
6,665
107.5
6,650
8,600
103.0
8,821
7,283
103.0
103.4
97.2
6,613
106.7
6,865
8,639
103.5
9,229
7,523
107.8
104.9
100,4
6,763
109.1
6,762
8,823
105.7
10,157
8,257
118.6
112.3
110.2
7,448
120.2
7,211
9,471
113.5
10,402
8,366
121.5
114.2
111.6
7,664
123.7
7,384
9,651 |
115.6
10,792
8,783
126.0
116.3
117.2
7,718
121.5
7,495
9,869 i
118.2
11,135
8,782
130.0
118.1
117.2
8,140
131.3
7,613
10,046 |
120.4
10,877
8,702
127.0
119.2
116.1
8,164
131.7
7,685
10,101 !
121.0
11,363
9,202
132.7
122.1
122.3
8,447
136.3
7,868
10,417
124.8
12,489
9,977
145.8
129.6
133.2
9,110
147.5
8,355
10,958
131.3
12,266
9,929
143.2
129.6
132.5
9,005
145.3
8,351
10,963
131.3
12,958
10,489
151.3
135.3
140.0
9,275
149.7
8,720
11,365
136.2
13,080
10,283
152.7
135.9
137.2
9,701
156.5
8,760
11,550
138.4
12,772
10' 306
149.1
137.0
137.5
9,746
157.3
8,828
11,946
143.1
13,230
10,293
140.6
137.4
10.185
164.3
9,005
12,292
154.5
147.3
14,794
11,701
148.2
156.1
ll'f691 . 188.7
9,551
14,029
172.7
168.1
14,442
11,074
145.9
147.7
11,252 i 181.6
9,406
13,180
157.9
168.6
14,435
11,115
142.0
148.7
11,137 ! 179.7
9,153
13,375
160.1
168.6

1 Beginning with Sept. 12, 1916, notes and bills rediscounted are not included among loans and discounts, as was the previous practice.
2 Exclusive of fixed investments, i. e., banking house, real estate, furniture and fixtures, also stock of Federal Reserve Banks.




503

FBDEBAL RESERVE BULLETIN.

JUNE 1,1918.

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504

FEDERAL RESERVE BULLETIN.

MOVEMENT OF PRICES, 1914-1918.

Changes in the general price level are indicated by the course of index numbers, presented by governmental and other authoritative agencies. In the following tabulation
and accompanying diagram the attempt was
made to relate the monthly price changes to
the price level existing on or about July 1,
1914, when market conditions may be said to
have been relatively normal. This was done
by shifting the bases used by the original compilers to a uniform base—the beginning of
July, 1914. In making this shift the July
index number shown by the original compilers
was taken as equal to 100, and subsequent
index numbers were restated in terms of the
new base b}r dividing these numbers by the
original index number for July, 1914. It is
realized that the use of this short-cut method
does not yield entirely accurate results,1 but
it is believed that the errors in results obtained are not large enough to alter materially
the general picture of price development shown
in the table and diagram.
It is generally conceded—and this is brought
out in the tabulation—that the general rise of
prices since July, 1914, has been greater in
Great Britain than in this country, and it has
been suggested that the shortage of tonnage
and the consequent rise of freights is largely
responsible for the greater rise of prices since
July, 1914, observed in Great Britain than in
the United States and Canada since the outbreak of the war.2
Besides the four columns showing the course
of wholesale prices in the United States and in
Great Britain, there is presented in column 5
the course of relative retail prices of important
articles of food as computed by the United
States Bureau of Labor Statistics and printed
on pages 100-101 of the Februray, 1918, number of the Bureau's Monthly Review. As in
the ease of the relative wholesale prices, the
figures given in the original compilation have
been changed b}^ shifting the base to the July
1
Sec Wesley O. Mitchell; index Numbers of Wholesale Prices in the
United States and Foreign Countries, in Bulletin of the U. S. Bureau of
Labor Statistics No. 173: July, 1915, p. 39 and foil.
»This explanation apparently assumes a general price level equally
high in the three countries for the initial period, an assumption which is
not proved. If. for argument's sake, it is admitted that the general
level of wholesale prices in Great Britain, as reflected in the Economist's
and Statist's index numbers, was lower before the war than in this
country and in Canada, and that as the result of the elimination of
British trade with the greater part of Europe greater reliance had to be
placed upon America as a source of supply, it follows that wholesale
prices in Great Britain for the more recent period must show a relatively larger advance than in this country and in Canada, even if no
account is taken of the large rise in freights. See A.. O. Pigou: The
proportion of British price changes that is due to local causes, in Economic Journal, December, 1917, p. 481 and foil.




JUNK 1,1918.

quotation and recomputing the subsequent
numbers on the new basis.
A comparison of the course of wholesale and
retail prices shows a considerably smaller rise of
retail prices. But it is well to remember that in
the tables wholesale prices cover a much wider
field than retail prices, which cover merely a certain number of important food articles. It may
also be noted that the increase in retail prices
indicates the increase in the cost of living only
on the assumption that there has been no
change in the relative quantities of the several
articles used throughout the entire war period,
so that the relative weight given to the articles
in the construction of the general index number
continues to correspond more or less closely
to the relative importance of these articles in
the typical family budget.
Movement of prices 1914 to 19IS.

July 1,1914
E n d of July, 1014
August, 1914
September, 1914..
October, 1914
November, 1914
December, 1914
January, 1915
February, 1915
March, 1915
April, 1915
May, 1915
June, 1915
July, 1915
August, 1915
September, 1915
October, 1915
November, 1915
December, 1915
January, 1916
Februarv, 1916
March, 1916
April, 1916
May, 1916
June, 1916
July, 1916
August, 1916
September, 1916
October, 1916
|
November, 1916
j
December, 1916
1
January, 1917
j
!
February, 1917
March, 1917
Apnl, 1917
May, 1917
June, 1917
July, 1917
August, 1917
September, 1917
End of October, 1917....
November, 1917
December, 1917
January, 1918
February, 1918
March, 1918
April, 1918

100.0
100.5
105.7
108.9
107.1
108.2
109.8
117.9
122.7
129.5
130.5
130. 5
127.3
128.4
129.1
130.7 i
131.6 !
137.1 !
142.3 j
150.5 i
157.1 |
157.2 I
163.1 !
169.2 I
105.1 !
163.1 i
171.3
173.2 !
180.0 |
187.2 !
192.2 |
194.1 i
198.7 I
207.7
210.8 |
212.1
221.2 i
219.3 !
221.6 I
220.8
223.3
226.0
228.2
226. 6
227.9
229.8
233.1

100.0
101.5
108.2
109.9
110.6
109.4
112.8
118.7
124.2
127.7
130.4
132.0
131.0
131.0
131.7
132.7
135.5
139.3
145.8
152.2
156.4
160.6
165.4
166.7
161.3
160.7
165.6
165.5
174.3
185.7
190.9
196.2
201.9
208.1
213.1
215.5
222.2
217.8
216.4
217.2
222.4
225.2
227.9
229.3
230.7
231.5

100.0
100.6
112.7
106.7
102.3
104.4
105.6
111.6
111.1
112.8
113.1
112.5
113.9
113.4
113.1
115.2
119.8
122.9
126.1
128.6
131.4 ,
135. 8 i
135.6 i
134.9 I
133.1 !
132.2 j
136.0 !
139.0 i
147.8 I
157.7 I
158.5 I
160.9 i
163.3 i
168.3 I
174.6 I
178.6 |
185.6 !
189.4 J
192.1 !
195.3 !
197.5 j
205.6 !
207.4 '
208.8
208.7
213.3
218.3

103.0
104.0
100.0
99.0
98.0
99.0
101.0
100.0
100.0
101.0 I
IOO.O s
102.0 I
IOI.O !
99.0 i
102.0 i
103.0 !
106.1 !
111.1 I
112.1 !
115.2
117.2
119.2
119.2
120.2
124.2
128.3
134.3
144.4
147. 5
151.5
156.6
161.6
172.7
182.8
185.9
186. 9
185.9
183.8
181.8
183.8
182.8

104.9
104.9
102.9
102.9
102.9
101. C
99.0
96.1
97.1
98. G
98. G
98.0
98. C
99.0
101. C
102.0
102.9
104.9
103.9
104.9
106.9
106.9
109.8
108.8
110.8
115.7
118.6
123.5
123.5
125.4
130.4
130.4
142.2
148.0
149.0
143.1
146.1
150.0
153.9
152. G
153.9
156.9
157.8
151.0

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506

FEDERAL RESERVE BULLETIN.

Amounts of Money Held by the Treasury and
the Federal Reserve Banks and Amounts
Held by Other Banks and the General Public.
As showing the effect of the law of June 20,
1917, upon the monetary situation, especially
with regard to the concentration of gold at the
Federal Reserve Banks, the following tables
have been constructed by combining the figures
of the Treasury's monthly circulation statement, beginning with July 1, 1917, with corresponding figures of the various classes of
money held by the Federal Reserve Banks and
agents. It will be noted that between July 1,
1917, and May 1, 1918, the Federal Reserve
system showed a gain of $424,728,417 in gold
coin and of $104,742,455 in gold certificates.
As stated in the footnote to the table, the

JUNB 1, 1918.

totals of gold coin include the amounts standing to the credit of the Federal Reserve Banks
and agents in the gold settlement fund, held
in the Treasury, the total gains in gold coin
fairly corresponding to the growth of the gold
settlement fund during the same period.
Standard silver dollars and Treasury notes of
1890 are not shown separately in the Federal
Reserve Banks7 reports. Such amounts as
they hold are shown combined with "Subsidiary silver77 and "United States notes/ 7
respectively.
Some changes from the figures printed in
the Treasure's circulation statement are due
to the revision of the items by the banks
themselves following the dispatch of telegraphic data which are used in the compilation of the Treasury statement.

Estimated general stock of money, money held by the Treasury and by the Federal Reserve system,, and all other money in the
United States.
July 1,1917.

Aug. 1, 1917.

Held in the
General stock United
States
of money in Treasury
the United as assets of
States.
the Governments
Gold coin «
Gold certificates
Standard silver dollars
Silver certificates
Subsidiary silver
Treasury notes of 1890
United States notes
Federal Reserve notes
Federal Reserve bank notes
National bank notes

Held outside
Held in the
outside
Held by or the United General stock United
Held by or Held United
the
for Federal
States
States
of money in Treasury as for Federal States TreasReserve
Treasury and the United
Reserve
the
Banks and the Federal
assets of the Banks and ury andReStates.
Federal
agents.
Reserve
Governagents.
serve System.
System.
ments

83,090,607,703 $202,325,168

8700,280,235 $593,961,921 $3,086,218,498
501,12S,580 1.092,911,799
179,078
71,650,883 "568,"276,"66i"
8,741,521
468,765,615
194,415,104
199,470,157
1,970,414
23,313,705
312,938,149
346,681,616
36,671,860
508,077,355
584,169,800
8.991.020
3,708,640
12,699,440
1,574,715
697,057,676
715;783,922

"" 588," 270,'061" "i6,"962*556"
198,832,889

4,417,785

346,681,016
547,407,960
12,790,245
715; 420,010

10,429,162
2.658,745
90,585
16,787,619

r

$188,163,487 $769,688,709
518,050,060
"2L0i2,"643"
187,488
14,978,021
4,494,741
10,546,308
3.002,855
69,710
20,978,581

37,332,565
46,334,460
7,395,100
2,024,325

$592,897,113
1,017,427,129
71,622.687
458,510; 027
194;975,416
1,959,195
298; 802,143
534,832,485
5,234,630
692,781,016

5,480,009,884 253,671,814 1,280,880,714 3,945,457; 556 5,513,292,894 248,268,325 1,395,982,728 3,869,041,841
Total
Amount per capita outside the
United States Treasury and the
Federal Reserve System
37.88
37.10
Sept. 1, 1917.

Oct. 1, 1917.

Held in the
Held outside
! Heldin the
Held outside
Held by or
the United General stockj "qS}*®?
Held by or
the United
General stock United
States
for Federal
States
for Federal
States
of money in Treasury
Reserve
Treasury and of money in [ rp^sury
Reserve
Treasury and
the United as assets of Banks and the Federal
Banks and the Federal
States.
b
the Governagents.
Reserve
* !the GovernReserve
agents.
ments
System.
System.
1 mentS
Gold coin a
Gold certificates
Standard silver dollars
Silver certificates
Subsidiary silver
Treasury notes of 1890
United States notes
Federal Reserve notes
Federal Reserve bank notes
National bank notes

$3,062,614,285 3183,441,694

$716,260,274
553,680,940
153,400
14,090,470

$624,987,248 $3,035,390,720 $196,370,317 $703,960,384
984,244,129
621,226,710
72,355.084
588,269,513 15,381,213
75,360
458,210', 298
13,021,515
197,076,174
204,044,123
1,982,226
1,946,466
301,673,851
346,681,016
5,797,485
35,568,738
758,869,242
595,657,549
5; 148,900
52,626,970
12,406,860
8,504,220
73,610
2,000,000
716,603,382 17,715,276
695,364,807
942,755

$589,734,050
924,099,259
73,864,790
463,990,324
202,061,897
1,936,311
305,314,793
701,093,372
10,333,250
697,945,351

Total
5,553,681,154 239,654,267 1,373,987,061 3,940,019,826 5,642,264,856 242,469,027 1,429,422,432
Amount per capita outside the
United States Treasury and the
Federal Reserve System
37.73

3,970,373,397

568,270,061

21,514,343

200,837,387

3,761,213

346,681,016
644,911,800
12,608,890
717,737,715

6,611,049
2,801,345
127,670
21,366,953

38,366,116
48,452,906
3,977,000
1,005,955

37.97

a Includes balances in gold settlement fund standing to the credit of the Federal Reserve Banks and agents.
& Includes reserve funds against issues of United States notes and Treasury notes of 1890, and redemption funds held against issues of national
bank notes, Federal Reserve notes, and Federal Reserve bank notes.




JUNE 1,1918.

507

FEDERAL RESERVE BULLETIN.

Estimated general stock of money, money held by the Treasury and by the Federal Reserve system, and all other money in the
United
States—Continued.
Nov. 1, 1917.
Held outside
Heldin the
Held by or the United General stock
General stock United
States
States
. for Federal
of money in Treasury
of money in
Reserve
the United as assets of Banks and Treasury and the United
the Federal
States.
States.
Reserve
the Governagents.
System.
ment. &
Gold coin a
Gold certificates
Standard silver dollars
Silver certificates
Subsidiary silver
Treasury notes of 1890 . . . .
United States notes
Federal Reserve notes
Federal Reserve bank notes
National bank notes

Dec. 1, 1917.
Held in the
field outside
United
Held by or the United
States
for Federal
States
Treasury
Reserve
Treasury and
as assets of Banks and the Federal
the Governagents.
Reserve
ment. &
System.

S3,041,549,041 3197,533,851 5780,497.258 §581,756,083 $3,040,472,040 $192,279,247 8881,402,795 §572,978,029
641,827,450
751,984,519
647,615,670 834,146,179
188,839
76,626,468
568,269,513 13,958,993
75,763,241 568,269,513 15,074,742
177,017
16,602,714
457,864,691
14,036,210 462,413,261
212,502,353
209,864,245 1,980,121
207,884,124 214,465,300 1,962,947
1,912,059
1 920 791
37,69f), 989
302,156,136
34.6,681,016 6,706,982
37,310,425 302,063.609 346,681,016 6,828,891
65,301,509 1,043,483,096
928,243,720 7,355,240
62,591,775 858,296; 705 1,126,344,610 17,560,005
86,480
10,024,485
2,732,400
12,970,425
10,178,705
2,732.400
12,843,365
59,320
701,655,179
716,276,375 14,670,870
1,022,050
1,163; 936 700,441,569 717,052,065 14,374,836

Total
5,823,854,335 242,265,377 1,516,124,691 4,035,464,267 6,026,127,909 248,167,148 1,646,773,746 4,131,187,015
Amount per capita outside the
United States Treasury and the
Federal Reserve System
38.54
39-40
Jan. I, 1918.

Feb. 1, 1918.

Held in the
Held outside
Held outside
Held in the
Held by or the United
Held by or the United General stock United
General stock United
States
for Federal
States
States
States
for Federal
of money in Treasury
of money in Treasury
Reserve
Reserve
the United as assets of Banks and Treasury and the United as assets of Banks and Treasury and
the Federal
the .Federal
States.
States.
the Governagents.
Reserve
Reserve
the Govern- agents.
ment, b
System.
System.
ment, b
Gold coin a
Gold certificates
Standard silver dollars
Silver certificates
Subsiding silver
Treasury notes of 1890
United States notes
Federal Reserve notes
Federal Reserve bank notes
National bank notes

§3,040,439,343 §212,230,998 5915,104,237 3569,946,034 $3,038,545,652 $232,211,663 8996,031,422 3520,744,467
626,490,935
643,012,390 700,145,684
657,067,165
476,432
77,637,669 " "568," 269*513* 28,366*981"
""568,"269,*oi3" "i6,"366*52i*
231,684
76,546,043
19,164,158
14,272,909 457,918,667
441,821,401
216,434,729 221,081,713 6,465,587
214,616,126
218,226,579 1,791,850
1,90S, 063
1,900,498
38,708,255
294,123,273
346,681,016 8,781,228
34,715.268 303,184,520 346,681,016 i3,849,488
1.350,764,025 23.577,065
99,633; 475 1,227,553,485 el,366,858,445 27,961,820 127,932,700 cl, 210,963,925
2,732,900
9,486,875
113,7J0
12,605,165
' 69,240
9,803,525
12,333,485
2,732,400
22,565,806
671.654,533
719,212,630 14,292,456
13,867,928 691,052,246 717,833,215 23,612,876

Total
6,256,198,271 277,043,358 1,723,570,291 4,255,584,622 0,271,603,039 332,576,125 1,834,102,608 4,104,924,306
Amount per capita outside the
United States^Trcasuryandthe
Federal Reserve System
39.04
40.53
i
Mar. 1,1918.
Held in the
Held outside
Held by or the United General stock
General stock United
States
for Federal
States
of money in Treasury
of money in
Reserve
the United as assets of Banks and Treasury and the United
the Federal
States.
States.
the GovernReserve
agents.
ments
System.
Gold coin a
Gold certificates
Standard silver dollars
Silver certificates
Subsidiary silver
Treasury notes of 1890
United States notes
Federal Reserve notes
Federal Reserve bank notes
National bank notes

Apr. 1, 1918.
Held outside
Held in the
Held by or the united
United
for Federal
States
States
Reserve
Treasury and
Treasury
as assets of Banks and the, Federal
agents.
I/if serve
the GovernSystem.
ments

$3,041,643,270 $230,905,330 $1,034,706,053 $520,929,003 53,042,708,319 $234,610,242 51,076,734,540 §509,375,655
603,582 982
619,001,585 636,101,299
618,404,900
76,010,049 568,269,513 36,482,080
585,305
750,271
76,360,709
568,269,513 30,368,823
433,392,773
20,951,501 438,476,445
19,408,991
215,303,987
214,412,531 225,971,720 10,607,733
222,805,182 8.392,651
1,874,689
1,876,790
296,122,152
39,073,486
38,280,520 294,482,390 346,681,016 11,485,378
346,681,016 13,918,100
90,963,412 1,320,431,563 1,563,969,405 31,449,191 100,664,403 1,431,855,811
1,442,088,335 30,693,360
8,840,565
9,149,335
2,753,920
2,732,900
11,662,045
67,570
12,020,735
138,500
690,091,406
15,733,621
19,904,932 681,624,661 720,919,507 15,094,480
718,040,005 16,510,412

Total
6,351,548,050 330,927,170 1,827,126,208 4,193,494,672 0,480,181,525 339,856,674 1,873,524,132 4,266,800,719
Amount per capita outside the
United States Treasury and the
40.47
"Federal Reserve System
39 83

a Includes balances in gold settlement fund standing to the credit of the Federal Reserve Banks and agents.
o Includes reserve funds against issues of United States notes and Treasury notes of 1890, and redemption funds held against issues of national
bank notes, Federal Reserve notes, and Federal Reserve bank notes.
c Amended figure.




508

FEDERAL RESERVE BULLETIN.

JUNK 1, 1018.

Estimated general stock of mov,eyy money held by the Treasury and by^ the Federal Reserve system, and all other money in the
United States—Continued.
!

M.ny 1, 1918.

General stock
of money in
the United
States.

GoldTcoin a
G old certificates
Standard silver dollars
Silver certificates
Subsidiary silver
Treasury notes ofl890
United States notes
Federal Reserve notes
Federal Reserve bank notes
National bank notes

j S3,042,711,222
•
- - - -i
538,532,139
i
i
228,034,831
1
I
340,681,016
j 1,650,964,290
11,742,955
722,288,177

Total
Amount per capita outside the United States Treasury and the Federal Reserve
System

6,540,954,630 J

Held in the
United
States
Treasury as
assets of the
Governments
5239, 947,082

Held outside
the United
States
Treasury and
the Federal
Reserve
System.

Held by or
for Federal
Reserve
Banks and
agents.

,125,008,652
605,871,035

334,715
480,570
101,570
549,875

43,084,494.
99,128.870
2,917; 900
15,747,399

573,584,614
76,846,075
425,635,508
215;262,506
1,868,061
294,661,807
1,525,354,850
8,663,485
689,990,903

321,192,308

1,909,594,674

4,310,167,648

16, 946,171

802,092
16,434,232

12,772,325

40.82

a Includes balances in gold settlement fund standing to the credit of the Federal Reserve Banks and agents.
& Includes reserve funds against issues of united States notes and Treasury notes of 1890, and redemption funds held against issues of national
bank notes, Federal Reserve notes, and Federal Reserve bank notes.

State Banks and Trust Companies Admitted. |

State banks admitted—Continued.

[

The following list shows the State banks '
and trust companies which have been admitted to membership in the Federal Reserve
system during the month of May:
State banks admitted.
Capital.
Tillamook County Bank, Tillamook, Ores- -. -*
Fremont County Bank, Sugar
City, Idaho...;
...,
Molson State Bank, "Molson, Wash.
Farmers State Guaranty Bank,
Valliant, Okla
\
First State Bank, Grand Prairie,
First State Bank of Reagan, Reagan, Tex
The Guaranty State Bank, Mount
Pleasant, Tex
The First State Bank, Paducah,
Tex
Farmers State Bank, Itforo, Oreg-State Bank of Geneva, Geneva,
III
Stock Growers State Bank, Timber Lake, S. Dak
The Minster State Bank, Minster,
Ohio
Bank of Commerce & Trust Co.,
Memphis, Term
1.
Bay City Bank, Bay City, Mich...
The Central State Bank, White
Sulphur Springs, Mont
Coalgatc State Bank, Coalgatc,
Okla
Alto State Bank, Alto, Tex
First Guaranty State Bank, Jacksonville, Tex
Alpine State Bank, Alpine, T e x . . .
Lake Providence Bank, Lake
Providence, La
Chattanooga Savings Bank, Chattanooga, Term




Surplus. !

Total

$40,000

80,000

§523,473

25,000
25,000

1,000
4,000

172,325
228,077

40,000

11,000

528,992

30,000

14,000

250,239

25,000

7,000

109,183

00,000

15,000

577,619

50,000
25,000

50,000
1,250

452,900
156,884

50,000
579,230
25,000

14,000

25,000

15,000

210,619
1,500,000
25,000
80,000 I

1,000,000
25,000
15,000

350,645
20,009,436
4,028,232
323,444

50,000 !
25,000 I

12,500
7,500

553,985
219,012

50,000 '
30,000

8,000
30,000

526,128
281,822

25,000

5,000

328,946

750,000

225,000

5,578,950

Capital.
North-Western Trust & Savings
Bank, Chicago, 111
8500,000
First State Bank of Post City,
Post City, Tex
25,000
The Commercial Savings Bank !
& Trust Co., Toledo, Ohio
200,000
The Trust Company of New
J ersey, Hobo ken, N. J
600,000
The St. Joseph Loan & Trust Co.,
200,000
South Bend, Tnd
The Southern Bank & Trust Co.,
100,000
Miami, Fla
Bank of Sturgeon Bav, Sturgeon
50,000
Bay, Wis...
."
'
Dcnison Bank <fe Trust Co., Peni100,000
son, Tex
Drovers State Bank, South St.
100,000
Paul, Minn
Blackfoot City Bank, Blackfoot,
50,000
Idaho
The Alpena County Savings
100,000
Bank, Alpena, Mich*
The .Exchange Bank of Talla50,000
hassee, Fla
500,000
Valley Bank, Phoenix, Ariz
25,000
Bank of Commerce, Sinton, Tex..
Oenesoo County Savings Bank,
500,000
Flint, Mich
The First State Bank, Ilillsboro,
150,000
Tex
The Hillsboro State Bank, Plant
50,000
City, Fla
Security Trust Co., Lexington,
500,000
Ivy
Bank of Stanwood, Stan wood,
25,000
Wash
The Farmers and Merchants State
25,000
Bank, Hecla, S. Dak
The Citizens State Bank, Frost,
Tex
25,000
The "Scandinavian "American"
1,000,000
Bank, Seattle, Wash

Surplus.

Total
resources.

I
8250,000 I 87,403,456
63,27*3
50,000

4,676,812

550,000

24,540,757

100,000

3,036,868

10,000

1,293,906

23,000

1,732,622

845,895

50,000

898,862

10,000

663,707

125,000

3,268,260

2,500

260,772
4,265,975

7,000
300,000
15,000
50,000
150,000
10,000
5,000
25,000
500,000

161,663
8,541,690
766,303
552,653
1,927,766
561,026
266,824
240,557
16,123,767

Changes of names.—State institutions, members of the Federal Reserve
System, have changed their names as follows:
German Savings Institution, St. Louis, Mo., to Liberty Bank.
German-American Bank, St. Louis, Mo., to United States Bank.
German Insurance Bank, Louisville, Ky., to Liberty Insurance Bank.

JUNE 1,1918.

509

FEDEKAL BESERVE BULLETIN.

Four hundred and eighty-six State institutions are now members of the system, having
a total capital of $272,422,800, total surplus
of $348,100,495, and total resources of
$5,988,031,582.
The Third Liberty Loan.
Secretary McAdoo on May 18 issued the following statement:
In response to the Treasury's invitation for
subscriptions to $3,000,000,000 United States
of America 4-| per cent gold bonds of 1928 of
the third Liberty loan there have been received
subscriptions to the amount of $4,170,019,650
from about 17,000,000 subscribers. This is
the most successful loan the United States
has offered both in number of subscribers and
in the amount realized. Every subscription
was made with full knowledge that allotment
in full was to be expected, unlike the first loan,
when allotments were limited to $2,000,000,000,
and the second loan, when allotments were
limited to one-half the oversubscription.

PerQuota
centin mil- Subscriptions. age of
lions.
quota.

District.

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

'

165
130
130
90
250
80
425
130
250
210
300
900

§180,826,350
202,301,050
199,085,900
136,653,350
361,963,500
115,395,200
608,878,600
185,966,950
354,537,250
286,577,450
404,988,200
1,114,930,700
17,915,150

3,000

4,170,019,650

172
156
153
151
144
144
143
143
142
136
135
124

The foregoing figures are subject to slight
modifications upon receipt of final audited figures from the several districts. Any such
adjustment will not materially affect the total.
1 congratulate the country on this wonderful
result which is irrefutable evidence of the
strength, patriotism, and determination of the
American people.
New National Bank Charters.

The Comptroller of the Currency reports the
following increases and reductions in the numThis great result was achieved, notwith- ber of national banks and the capital of nastanding the fact that the country has been tional banks during the period from April 27,
called upon to pay since the second Liberty 1918, to May 31, 1918, inclusive:
loan and to and including the month of June
Banks.
income and excess-profits taxes to the amount New charters issued to
15
of approximately $3,000,000,000, which will With capital of
§640,000
make a total amount turned into the Treasury Increase of capital approved for
15
of the United States from such taxes and the With new capital of
1,020,000
third Liberty loan of about $7,000,000,000.
In the first campaign, which started just Aggregate number of new charters and
banks increasing capital
30
one year ago, bonds were sold to approximately
1,660,000
4,500,000 people, and the country was amazed With aggregate of new capital authorized
at this wonderful evidence of public interest. Number of banks liquidating (other than
those consolidating with other national
In October about 9,500,000 people bought
banks)
3
Liberty bonds, and now, with an even more
680,000
effective organization and an intense spirit of Capital of same banks
patriotism throughout the country, approxi- Number of banks reducing capital
0
mately 17,000,000 people purchased bonds of Reduction of capital
0
the tnird Liberty loan. This equals approxi- Total number of banks going into liquidamately one-sixth of our total population.
tion or reducing capital (other than those
LOAN AND TAXES TOTAL $7,000,000,000.

REPORT BY DISTRICTS.

consolidating with other national banks)« 3
Aggregate capital reduction

680,000

The report by districts, arranged in order The foregoing statement shows the aggregate of
of their percentage of oversubscriptions, is as increased capital for the period of the banks
embraced in statementaa was
1, 660,000
follows:




510

.TUNE 3, 1918.

FEDEBAL RESERVE BULLETIN.

Against this there was a reduction of capital
owing to liquidation (other than for consolidation with other national banks) and
reductions of capital of

State Banks and Trust Companies Entering the
Federal Reserve System.1
By BRECKINBIDGE JONES.

980,000

Net increase.

$680,000

When Congress, at the recommendation of
the Federal Reserve Board, on June 21, 1917,
passed amendments to the Federal Reserve
act, it was done with the hope that thereby
all reasonable objections the State banks and
trust companies had to entering the system
would be removed.
When I had the honor of addressing your
convention in April, 1915, I attempted to set
out clearly what those objections were. At
Atlantic City, last September, in a paper read
before the Trust Company Section of the
American Bankers' Association, an effort was
made to show how those amendments had met
those objections, with the single exception of
not remedying the defects of section 22 of the
Federal Reserve act. I say this single exception, because, as I see it, the two or three other
objections that are urged are not to radical
defects in the Federal Reserve act itself, but
rather to (1) a misapprehension of how a State
institution would be affected, if it were to come
into the system, and (2) objections that can.
and will be remedied by the Federal Reserve
Board.

Commercial Failures Reported.
That the economic readjustments occasioned
by war conditions have caused no general or
conspicuous disturbance in business is demonstrated by the continued reduction in the
country's commercial mortality, only 604 failures, exclusive of banking and other fiduciary
suspensions, being reported to R. G. Dun &
Co. in three weeks of May, as against 871 in
the corresponding period of last year. The
returns for April, the latest month for which
complete statistics are available, disclose 905
defaults for §14,271,849, in comparison with
1,069 insolvencies in April, 1917, for $12,587,213, While the April liabilities are 13.4
per cent in excess of the April, 1917, total,
they are the lightest for the month, with the
exception noted, in over a decade, and the
number is not only less than in any month
since September, 1911, but is also the smallest
for April back to 1907. Separated according to
Federal Reserve districts, the April statement
shows fewer failures than last year in all of
the 12 districts, aside from the first, ninth, and
tenth, whereas the indebtedness is larger in
in all instances, except in the first, third, fifth,
and sixth districts.
Failures during April.
Number.

Liabilities.

District.
1918
No. 1—Boston
No. 2—New Y o r k . . .
No. 3-Philadelphia,
No. 4r-ClevelandL...
No. 5—Richmond...
No. 6—Atlanta.
No. 7—Chicago
No. 8—St. Louis.
No. 9.—Minneapolis
No. 10—Kansas C i t y . . .
No. 11—Dallas
No. 12—San Francisco.
Total.




129

1917

1918

122 §1,405.975
201 4,610,726
47
535,628
90 1,460,787
57
74
271,667
159 1,597,477
54
447,362
24
268,785
41
392,835
44
251,858
156 2,659,920

905 i 1,069

14,271,

1917
81,643,235
4,005,078
1,249,883
1,180,192
553,992
914,200
856,910
208,438
207,200
260,208
228,577
1,279,300
12,587,213

MINOR OBJECTIONS.

After quite extensive correspondence with
State institutions that have pot entered the
system, I find that the objections are reduced
to a few oft-repeated points.
OBJECTION OF LOSS OF INTEREST ON RESERVE
ACCOUNTS.

First, and oftener than all the others, is the
objection that a State institution would lose
interest on balances that it might transfer from,
its present correspondents to the Federal Reserve Bank. As an abstract proposition, that
objection is well taken, but the results of such
loss of interest, I think, are fully offset and are
not so serious as is so often asserted. Many
State bankers think that Federal Reserve Banks
should allow interest on reserve accounts. That
conclusion is inconsistent with the very nature
of the Federal Reserve Banks. Those banks
are reserve banks, established not primarily for
money-making purposes, but for the protection
1
Part of an address delivered before the convention of
the State Bankers of Kansas, at Topeka, Kans., May 7,
1918.

of the country at large. If they paid interest on
their reserves, then they woula have to make
those reserves profitable by lending them out
and not having them as a means of accommodating member banks, and, moreover, bringing
these large Government instrumentalities in
direct and hurtful competition with the member banks, for whose aid and not for whose
injury, in part, the Federal Reserve Banks
were established. Moreover, while a member
bank receives no interest on its reserves with
the Federal Reserve Bank, yet through the
recognized right of prompt rediscount which
the member bank has with the Federal Reserve
Bank, the member bank is enabled to greatly
reduce the reserves which it had been enforced
to carry before it entered the system. A member bank can get along with much less actual
cash in its own office, and with less balances
with its correspondents in reserve, and central
reserve cities. I know this not only theoretically, but as a matter of practical experience
in the institution with which I am connected, as
well as from numerous statements to this effect
from other State institutions which have become member banks. Yesterday I received
from a country banker, and will read to you, a
letter that expresses well the present trend of
thought:
THE MONTICELLO BANKING CO.,

Monticello, Ky.. May 4, 1918.
Mr. BBECKINRIDGE JONES,

President Mississippi Valley Trust Co., St. Louis, Mo.
MY DEAR SIR: On the 22d ult. I wrote you in regard to
the controlling factors which have kept us out of the
Federal Reserve system. Since that time I have figured
a little more closely and I find that the argument I made
in my letter to you was considerably one-sided in that it
did not contemplate the full use of the system.
I find on going further into the matter that instead of
operating under the system at a loss of enough to declare
a 3J or 4 per cent dividend as I stated in my letter, we can,
by using a part of the reserve we now carry, make enough
to offset the loss mentioned and in addition make for our
stockholders 7 or 8 per cent.
It has been our policy to carry a very heavy reserve,
averaging a little over 40 per cent. I find that, without
abandoning this policy entirely, we can reduce this reserve
one-half and invest it in good commercial paper or bank
acceptances, using this class of paper as a secondary
reserve, it being readily discountable at the Federal Reserve Bank on short notice and agreeable terms, makes it
a very nice secondary reserve in case of need. The extra
earnings from this source would make us the per cent of
profit mentioned above.
Of course, our small capital and comparatively large
deposits makes this possible for us when it would not be
so to such an extent with many other banks.
I have argued the matter before a recent meeting of our
board of directors and I find after presenting it in this way
62161—18
5




511

FEDERAL RESERVE BULLETIN.

JUNE 1,1918.

they are very favorably impressed with it and I believe
they will soon join the Federal Reserve system. There
was some prejudice but no argument against it and it was
admitted by them that it would pay.
Yours, very truly,
L. D. JONES,

Assistant Cashier.
ADVANTAGE OF CENTRALIZING RESERVES
FEDERAL RESERVE BANK.

IN

It is frequently urged that the reserves that
would be carried in the Federal Reserve Bank
would have to be withdrawn from present balances with some member bank, so the question
is asked what is to be gained by making the
transfer ? The answer is, first, the balance now
kept with the member bank correspondent is
in the reserves of that correspondent as a unit,
where it can be applied only for the uses of that
unit, and may remain dormant if that unit has
no direct need for it, whereas if the balance were
in the Federal Reserve Bank it would be in the
general reservoir that is ready to go to the aid
of any district in need and t>e readily changed
from time to time, as the nieds of the several
districts change—and, second, this balance
with the city correspondent may be performing
no public service, whereas if the balance were
in the Federal Reserve Bank it might be, with
only 40 per cent gold reserve, the basis for issue
by the Federal Reserve Bank of two and onehalf times the amount in Federal Reserve notes.
If you will consider the large aggregate of the
balances of the eligible State banks and trust
companies, and the great demand that may be
put upon the Federal Reserve Banks as the
result of war conditions, the importance of
cooperation of the eligible State banks and
trust companies is evident.
ELIGIBLE BANKS IN KANSAS AND IN UNITED
STATES.

In Kansas there are 313 eligible State banks
and trust companies with a capital of $13,381,000, surplus $5,900,000, and total resources of
$156,182,000, while in the United States at
large there are approximately 8,000 eligible
State banks and trust companies, not including
those that have already joined. The aggregate
capital of these nonmember banks and trust
companies is approximately $695,000,000, surplus $425,000,000, and total resources $ 7 r
596,000,000.

512

FEDERAL RESERVE BULLETIN.

PRESENT NUMBER OF STATE MEMBER BANKS.

On April 30 there were 444 State institutions
that were members, with an approximate
aggregate capital of $266,000,000, surplus
$345,000,000, and total resources of $5,883,000,000.
Moreover, there are various means by which
a member bank can adequately compensate
itself for this loss of interest on the reserves
kept with the Federal Reserve Bank. I have
yet to hear any complaint on this score from a
single member bank that has had experience in
the system,
LOSS OF INTEREST ON RESERVES UNIMPORTANT
WHEN COMPARED TO SACRIFICES MADE BY
OTHERS.

And again, even if there were some small loss
to the State institutions on this account, can
that small loss be urged as of deciding importance in these war times? We are giving the
lives of our boys, and let every man here who
has a heart or "a soul relaize what that means,
without further elaboration. The railroads
have not been left to discuss whether some little
thing would take something from their profits,
but the Government has taken over all the
operations of railroads as a war measure.
Within the week the Steel Corporation offered
the use of all its manufacturing resources,
giving priority in its manufacture to the needs
of the Government, to the exclusion of its
profits on private contracts, and its president,
the president of the Associated Steel Industries
of the United States, requested all that association's 1,500 members, by formal resolution, to
do likewise; yet, within a few days thereafter,
the Government commandeered for Government uses, to such an extent as needed, the
entire output of all the iron and steel industries
in the United States. The people of the United
States, in every State and in every town, have
joined in subscribing for billions and billions of
Government bonds, at 3 | , 4, and 4§ per cent
interest, when all of these subscribers could
readily have invested their money at a much
higher rate. Appeals for the Eed Cross,
Young Men's Christian Association, and Knights
of Columbus have met with the response of tens
of millions of dollars from patriotic, openhearted American citizens. Shall it be left
only to the State banks and trust companies
throughout this fair land, in its year of distress
and trial, to put forward the slacker excuse—
they will not join in meeting the direct and
urgent appeal of the President of the United




JUNEI,

1918.

States that they join the system—I say, to
put forward the slacker excuse that they will
not cooperate in this respect because of some
fancied, or even if it were an actual, loss of 2
or 2§ or possibly 3 per cent or not to exceed, in
any case, 15 per cent of their deposits ?
OBJECTION OF LOSS OF COLLECTION INCOME.

The same line of thought might apply to the
objection, frequently urged, that if a State
bank or trust company should join the system
it would lose some of its collection income.
This subject has had so much discussion from
time to time that I will not make any elaboration of it here, merely suggesting that most
State banks and trust companies have as competitors national banks in their communities.
These national banks are living and prospering under the Federal Reserve system and not
making complaint on this score. The feared
loss of income from this source, if a State bank
should come into the system, is more imaginary
than real, and I think we might as well reconcile ourselves to the system because it is within
the power of the Federal Reserve Board to
make regulations that would take care of this
matter so as to put us on the same basis as the
national banks, and it will be the duty of the
Federal Reserve Board to make such regulations, if the State banks and trust companies
are arbitrary on this question and remain out
of the system on that account.
OBJECTION THAT SO FEW INSTITUTIONS
MEMBERS.

ARE

By correspondence with some of the eligible
banks, it develops that a number of them remain out just because they are out and have
not taken the pains to look closely into the
matter and say, "Well, so long as out of the
thousands of eligible State banks and trust
companies less than 500 have come in, those
that stay out must have some good reason for
it, and we will just wait and see what happens."
That is the argument of the sluggard and of the
man who has not the spirit nor the force to be
an independent factor in dealing with the great
national questions immediately incident to his
own business—a business in which the people
in his community recognize him as a leader.
Instead of being impressed with the number
of State banks and trust companies that have
not come in, might it not be more reasonable
for him to look to the character of those that
have come in and their experience since they
have come in ?

JUNE 1,1018.

FEDEBAL RESERVE BULLETIN.

OBJECTION OF NECESSITY OF ADDITIONAL STATEMENTS.

A number of State institutions still say that
they do not wish to be bothered with the enormous and intricate statements that have to
be made out by national banks, forgetting that
under the amendments to the Federal Reserve
Act, passed last June, they reserve all of their
powers under their State charters, and remain
under the bank commissioner of their own
State, and are in no sense under the Comptroller of the Currency at Washington.
A number say they can not serve two masters
and do not wish to be subject to dual control,
also forgetting the point just mentioned, and
not realizing the fact that no member bank has
experienced any difficulty in this regard.
THE SOLUTION OF THE DIFFICULTY.

As to these various objections, let me suggest
that the State banker study the question, confer
with the Federal Reserve agent of his district,
and correspond with the State institutions that
have joined the system, and he will find that
he will get rid of a great many of his cobwebs.
I felt an obligation to accept the invitation of
your committee and come and talk to you on
this subject, because when I spoke to you
three years ago, I centered my thought on the
objections to the Federal Reserve system.
When I found that Congress was about to pass
the amendments that would remove all of my
objections, save the one connected with section
22, the institution of which I am president
joined the system I am now speaking after a
year's actual experience in the system. I say
to you frankly that if we were not now in, we
could not adequately meet the demands that
now come on us, either in the way of facilitating
the governmental matters that come up, or in
accommodating our customers. We would not
for a moment consider going out.

513

member bank across the street ? I asked myself these questions and was bound to answer
No. Then I asked myself are not my customers as wise and as careful as I am ? Yes.
Then how can I expect them to continue to do
what I would not be willing to do myself? We
joined the system.
PRINCIPAL OBJECTION, SECTION 22.

Now, referring back to section 22 of the
Federal Reserve Act, I think there is in the
law as it now stands a serious objection; but
this objection, I trust, will soon be remedied,
and I ask your careful consideration of what is
said on that subject in the hope that this
convention will pass a resolution and communicate with your Senators, by wire, asking them
to cooperate in securing the passage of that
part of House bill 11283 that proposes to
amend section 22 of the Federal Reserve Act.
I would like to discuss that question in rather
close detail, because of its importance.
The Federal Reserve Act was passed in
December, 1913. In discussing it in May, 1914,
before the Alabama Bankers' Convention, I
made certain comments as to section 22, ajid
these comments were repeated as still holding
good when I addressed you a year later.
They were brought to the attention of the
Federal Reserve Board. I refer to them here to
preserve the continuity of thought, and to let
them be the basis for a further discussion and
an appeal to you to help make them effective.
I believe that if Congress will reasonably
amend this section 22 they will have removed
the last fundamental objection to the form of
the Federal Reserve Act that can be urged at
this time by the State banks and trust companies.
SECTION 22 AS ORIGINALLY ENACTED.

OF THE MEMBER BANK TO MEET
UNUSUAL REQUIREMENTS.

Now, what are the facts about section 22 ?
As originally enacted, that paragraph that is
objectionable was as follows:

One special point I should like to make.
Would you, as a nonmember bank, consider
keeping all of your reserves with nonmember
banks and expect to depend entirely on such
nonmember correspondents in time of stress?
Would you feel that you had the right to hold
a large part of the deposits of the people of
your community and not be as well protected
in taking care of them as is your competitor

Other than the usual salary or directors' fee paid to any
officer, director, or employee of a member bank, and other
than a reasonable fee paid by such bank to such officer,
director, or employee 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. * * * Any person violating any provision of
this section shall be punished by fine of not exceeding
$5,000 or by imprisonment of not exceeding one year, or
both.

ABILITY




514

FEDP^RAL RESERVE BULLETIN.

JUNE 1, 1918.

In a published memorandum of the Federal j directors of a bank and talk to him about a
Reserve Board, under date of April 26, 1915, | loan on a farm. The director of the bank
they said, "No ruling or interpretation by the j would arrange to lend the farmer at from 8 to
Federal Reserve Board would afford any pro- 10 per cent interest and then take the loan
tection to a person subsequently indicted by a over to the bank and get the money at, say,
Federal grand jury for any such violation" of 6 per cent, the bank furnishing all the money
this section. Therefore, only a court could that went to the farmer, the director making
make a final determination on the meaning of j the difference in interest.
that section. As yet, no court has construed it.
(2) In the cities especially it had been
Therefore, as any violation of the provisions of claimed that a director of a bank would use
section 22 by officers, directors, employees, or his position as a director to make the bank
attorneys of a member bank constitutes a take participations in the purchase of large
crime, punishable by fine and imprisonment, it underwritings of bonds, or buy other securities
becomes important to see just what that section or property in the sale of which the director
means.
was interested and had a personal profit, or
(3) A director would use his position as
director of the bank to buy, at a lower price
PRINCIPLES OF LAW APPLYING TO BANK
than others could buy from the bank, securiDIRECTOR.
ties or other property owned by the bank; and
(4) It* was urged when the Comptroller and
It is important to inquire what are the fundamental principles that apply to a director of a bank examiner or stockholders found that a
bank—this independent of any statute pro- director was thus making a misuse of his posivision. We can then see what the evils were tion as a director, there was no direct statute
that were to be remedied; then, as no court making the director personally liable and no
has construed this section, see what construc- way to protect stockholders and depositors
tion the courts have given to other acts of without going into the merits of the divers
practically the same purport; then see what individual transactions and attacking the
amendments Congress is now proposing to this director in court, and generally the grasping
director was of such high position and influence
section.
in the community that the ordinary man
*
*
*
*
*
It is important to have in mind that in the hesitated to raise the question.
So Congress passed this section 22, providing
event a question came up between a trustee
and a beneficiary of a trust, it was the option that other than the usual salary or directors'
of the beneficiary whether to raise the question fee, and pay for services rendered, no officer,
of setting the transaction aside; so with the director, employee, or attorney in any bank
director of a bank, where the question was shall be the beneficiary of or receive, directly
that the director had made unfair use of his or indirectly, any fee, commission, gift, or other
position, it was at the option of the bank or its consideration for, or in connection with, any
stockholders, or any third party in interest, transaction or business of the bank, and proto raise the question. The contract was not viding fine and imprisonment for violation.
void absolutely, but was voidable at the in- To say that he should not directly or indirectly
stance of the injured party. But, as a prac- be the beneficiary, etc., of any consideration
tical matter, it was found that directors many arising out of any business of the bank is just as
times did take unfair advantage of their posi- broad as saying that he should not be directly
tion and no one raised the question in a or indirectly interested in any business of the
bank.
public way.
*
*
*
*
*
WAYS IN WHICH A DIRECTOR MISUSED HIS
Frequently when the Comptroller, or a bank
POSITION.
commissioner, or a clearing-house examiner
finds a bank in bad condition he calls the diAs to the kinds of transactions that were rectors together and arranges with them to buy
most frequently mentioned:
from the bank certain bad or questionable
(1) Out through the rural districts, it was assets, and yet, under this section 22, if the
claimed that when an application was made to directors did so come to the relief of the bank,
a bank for a loan, some director would charge they would be subject to fine and imprisonment.
a commission, getting the bank to make the
Banks usually try to have as their directors
loan; or, a farmer would go to one of the men of large means and varied interests and




JUNE 1,1918.

FEDERAL RESERVE BULLETIN.

put them on their boards so that they can
nave the influence and business of sucli men
for the bank. If section 22 remains as it is,
the tendency will be to drive from the board
of directors of the State banks and trust companies such active successful men, the very
men whose experience, familiarity with current
affairs and natural strength make them most
valuable as directors, and put in their places
men of less value, or probably dummies. It
is evident that if this section 22 remains unamended there is in it a fundamental objection
to State banks and trust companies becoming
member banks and thereby making its provisions applicable to them.
PROPOSED AMENDMENTS NOW BEFORE SENATE.

But the Federal Reserve Board, thoroughly
awake to the objections to section 22, even as
amended above, after the fullest consideration,
has recommended to Congress an amendment
to section 22, this amendment now being a part
of House bill 11283, passed by the House of
Representatives at Washington on April 24,
and now before the Banking and Currency
Committee in the Senate.
As indicated above, I trust that this convention will indorse this amendment and request
your Senators to see that it becomes law.
Prompt action is required, as the Senate committee is liable at any time to report the bill.
With that one remaining primal objection
to the Federal Reserve Act removed, as I
sincerely hope it soon will be, then it will be
left to be said that the State banks and trust
companies are the most sluggish of all institutions in America in arising to the performance
of a patriotic duty. I am sure it will not be
left to be so said, in Kansas, a State of historic
loyalty—a State that has so cordially responded
to every other appeal to stand by our beloved
country in these fateful times of war.
PRESIDENT WILSON'S APPEAL.

I can close this talk, already too long, in no
more fitting way than to quote the following
words taken from a formal public appeal made
by President Wilson last October:
May I not, therefore, urge upon the officers and directors
of all nonmember State banks and trust companies which




515

have the required amount of capital and surplus to make
them eligible for membership to unite with the Federal
Reserve system now and thereby contribute their share
to the consolidated gold reserves of the country? I feel
sure that as member banks they will aid to a greater degree
than is possible otherwise in promoting the national welfare, and at the same time, by securing for themselves the
customers. I believe that cooperation on the part of the
banks is a patriotic duty at this time, and that membership
in the Federal Reserve system is a distinct and significant
evidence of patriotism.
RESOLUTION PASSED BY CONVENTION.

After the reading of the paper the convention unanimously passed the following resolution :
Whereas section 22 of the Federal Reserve Act, as now
existing, is unreasonably drastic and stands as a serious
objection on the part of the State banks and trust companies against then* entering the Federal Reserve system,
and
Whereas there is now pending in the United States
Senate House bill 11283, which, as passed in the House of
Representatives, amends section 22 so as to make it
reasonably free from objection, yet effective to remedy the
evils aimed at: Therefore be it
Resolved, That the Senators from Kansas be, and they
are hereby, urged to use their best endeavors to have become a law, unchanged as it came from the House, that
part of House bill 11283 relating to said section 22 of the
Federal Reserve Act; and
Resolved further, That the president of this convention
forward this preamble and resolution, by wire, to our
Senators.

Liberty Bonds Lost or Stolen.
The Federal Reserve Board has been advised of more or less extensive losses or thefts
of Liberty bonds, occurring at various banks
throughout the country, and has undertaken,
on behalf of the Protective Department of the
American Bankers Association, to print
monthly a list showing the numbers and values
of the bonds referred to. Banks to which
any of these bonds, or coupons belonging to
them, are presented, are requested to write,
telephone, or telegraph to L. W. Gammon,
Manager, Protective Department, American
Bankers' Association, 5 Nassau Street, New
York City.
The first list of bonds, supplied by Mr. Gam
mon, is as follows:

516

JUNE 1,1918.

FEDERAL RESERVE BULLETIN.

SECOND 4 PER CENT BONDS, DUE 1942—Continued.

FIRST 3£ PER CENT BONDS, DUE 1947

50
50
50
50
50
50
50
50
50

ggg

140086..
140087.. ..
140095..
140096
140097..
140098
14C099
140100.. ..
140101
140102
140103
140104
140105.. .
140106
140107..
140108
140109.
140110... .
140111
140112
140113

ggggggggg

Number. Amount.

Number.

Amount.

140114...
140115
140116
1031339
1031347
1031355
1031356
65533
65534 .
65535
65536 65537
65538
65539 ..
65540
65541
65542 .. . .
65543
65544 ..
65545
65546 ..

S50
50
50
50
50
50
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100

Number. Amount.

Number. Amount.

$100
500
500
500
500
500
500
500
500
500
500
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000

8100 !
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
TOO
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

65547..
19070..
19071.,
19072..
19073.
19074.
19075..
19076.
19077.
19078.
134655
223003
223004
223005
223006
223007
223008
223009
223010
223011
223012

888847..

888851.
888853.
888854.
88S857.

888861.

FIRST 4 PER CENT CONVERTED, DUE 1947.
S50
50
sn

ggg

540340
54034 1 ..
5*0342
540343
540344
540345

5*0346 .
540347.. ..
540348
540349..
586570
586571

850
50
50
50
100
100

99192 ..
99193
99194...
99195

S500
500
500
500
888871.
888873...
888874...
888875...

SECOND 4 PER CENT BONDS, DUE 1942.

888877.
477236
679526
679596
1493898
1493899
1493900
1493901
1493902
1493903
1493904
1493905
1493906
1493907
1493908
1433909
3369978
3369979
3494044
3685957
3665980
4419625
5446705
5446706
5446707
5446708
5446709....
5446710
5446711....
5446712
5446713....
5446714....
5446715....
5446716
5446717
5446718
5446719....
5446720....
5446721
5446722
5446723....
5446724
5446725
6955067
6955068
6955069
6955070
6955071
6955072
8955073
.
1




S50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50

6955074
6955075
6955076.....
6955077
6955078
6955079
6955080
6955081
6955082
6955083
8955084
6955085
6955086
6955087
6955088
6955089
69,55090
6955091
6955092
6955093
6955094
6955095
6955096
6955097
6955098
6955099
6955100
6955101
6955102
6955103
6955104
6955105
6955106
6955107
6955108
6955109
6955110
6955111
6955112....
6955113
6955114
6955115
6955116
6955117 ...
6955118
6955119
6955120 ...
6955121....
6955122

50 ! 6955123
50 6955124
50 ! 6955125
50 i 6955120
50 1 6955127
50 ! 6955128
50 | 6955129
50 6955130
50 6955131
50 6955132
50 888801
50 88S802
50 888803
50 888804
50 888805
50 888806
50 888807
50 888808
50 888809
50 888810
50 888811
50 888812
50 888813......
50 88SS14
50 888815
50 888818
50 888817
50 888818
50 888819
50 888820
50 888821
50 888822
50 888S23
50 888824
50 888825
50 888826
50 888827
50 8S8S28
50 888829
50 888830
50 88883.1
50 888832
50 888833
50 888834
50 S88S35
50 888836
50 888837
50 888838
50 888839

50
50
50
50
50
50
50
50
50
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

888893

993419..
993420..
993421..
993422..
993423..
993424..
993425..
993426..
993427..
993428..
993430..
993431..
993432..
2038879.
2086701.
2086702.
2086703.
2086704.
2086739.
2088747.
2086748.
2086749.
2086750.
2086751.
2236081.
2327984.

Number.
2327985..

2327987..
2327988..
3262431..
3262435..
3262437..
3265438..
4585384..
4585385..
4585386..
4585387..
4585388..
4585389..
4585390..
4585391..
4585393..
4585394..
4585395..
4585396..
4585397..
4585398..
4585399..
4585400..
4585401..
4585402..
4585403..
4585404..
4585405..
4585406..
4585407..
4585408..
4585409..
4585410..
4585411..
4585412..
4585413..
4585414..
4585415..
4585416..
4585417..
4585418..
4585419..
4585420..
4585421..
4585422..
4585423..
4585424..
4585425..
4585426..
4585427..
4585428..
4585429..
4585430..
4585431..
4585432..
4585433..
45S5434..
4585435..
4585436..
4585437..
4585438..
4585439..
4585440..
4585441..
4585442..
4585443..
4585444..
4585445..
4585446..
4585447..
4585448..
4585449..
4585450..
4585451..
4585452..
4585453..
4585454..
4585455..
4585456..
4585457..
4585458..
4585459..
4585460..
4585461..
4585462..
4585463..

Amount.

Number. Amount.

S100 4585464
100 4585465
100 I 4585466
100 i 4585467
ioo ; 4585468
100 4585469
100 4585470
100 4585471
100 4585472
100 4585473
100 4585474
100 i 4585475
100 148664.
100 148665.
100 148666.
100 148667.
100
100
100 148670.
100 .168511.
100 168512.
100 168513.
100 168514.
100 176262.
100 206571.
100 206572.
100 206573.
100 206574.
100 283350.
100 327153.
100 327154.
100 327155.
100 327156.
100 327157.
100 327158.
100 352814.
100 352838.
100 352839.
100 352840.
100 352841.
100 352842.
100 352843.
100 352844.
100 352845.
100 352846.
100 352847.
100 352848.
100 352849.
100 352850.
100 637936.
100 637937.
100 637938.
100 637940.
100 637941.
100 637942.
100 637943.
100 037944.
100 637945.
100 637946.
100 637947.
100 637948.
100 637949.
100 663204.
100 663205.
100 663206.
•ioo ! 663207.
ioo i
100 i 663209.
ioo ! 663211.
100 I 663213.
100 663214.
100 663215.
100 663216.
100 1 663217.
1
100 663218.
100 663219.
100 76337..
100 76338..
100 158527.
100 158528.
100 158529.
100 158530.
100 158531.
100 158532.
100 158533.
100 158534.
100 158535.
100 158536 .

S100
100
100
100
100
100
100
100
100
100
100
100
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
i.ooo
1,000
1,000

JUNE 1,

FEDERAL RESERVE BULLETIN.

1918.

SECOND 4 P E R CENT BONDS, D U E 1942—Continued.
Number.

Amount.

158537 . . .
395982
395983..
396235
396236
396237. . .
412151

$1,000
1,000
1,000
1,000
1,000
1,000
1,000

Number.
412152
1608469
1608470
1608471
1608472
1609473
1609474

! Amount.
:
•
!
1

i

§1,000
1,000
1,000
1,000 I
1,000 i
1,000 !
1,000 i
'

Number.
1609475
1609476
1609477
1628865
1628866

Amount.
SI, 000
1,000
1,000
1,000
1,000

T H I R D 41 P E R CENT BONDS, D U E 1928.
705896
705949
705950

.

850
50
50

385330. . .
385331
385353

S100
100
100

385369
385373
4620 . .

S100
100
500

Conversion of Liberty Bonds.
Secretary McAdoo on May 10, 1918, authorized the following announcement:
Three and one-half per cent bonds of the
first Liberty loan, 4 per cent bonds of the
first Liberty loan converted, and 4 per cent
bonds of the second Liberty loan may be converted into 41 per cent bonds during the six
months' period beginning May 9 and ending
November 9, 1918.
It will not be practicable to make deliveries
prior to July 1, 1918, of 4J per cent conversion
bonds, and as under the act approved April 4,
1918, holders of 4 per cent bonds of the first
Liberty loan converted and of 4 per cent
bonds of the second Liberty loan presenting
their bonds for conversion after July 1 but
not after November 9, 1918, will be entitled
to the benefit of the increased interest rate
from June 15 and May 15, respectively, without adjustment of interest, it is hoped that
holders of such bonds will not present their
bonds for conversion until after July 1, 1918.
In the case, however, of holders of such bonds
who prefer to present their bonds for conversion on or before July 1, 1918, an adjustment of interest will be made. This interest
adjustment in the case of bonds of the first
Liberty loan converted will be in favor of the
bondholder if such bonds are presented for
conversion before June 15, 1918, and will be
in favor of the United States if such bonds are
presented for conversion after June 15 and
on or before July 1, 1918. In the case of bonds
of the second Liberty loan this interest adjustment will be in favor of the bondholder if
such bonds are presented for conversion before
May 15, 1918, and will be in favor of the
United States if such bonds are presented for
conversion after May 15 and on or before




517

July 1, 1918. Bonds presented for conversion
on or before July 1 will be retained and a nonnegotiable receipt will be issued therefor, and
adjustment of interest will be completed at
the time of delivery of conversion bonds.
After November 9 no further rights of conversion will attach or accrue to 4 per cent bonds
of the first Liberty loan converted or to 4
per cent bonds of the second Liberty loan, and
after that date 3£ per cent bonds of the first
Liberty loan will have no further conversion
rights with respect to the conversion privilege
now arising, but any unconverted 3J per cent
bonds will have a recurrent right of conversion
in the event of any further bond issue at a
higher rate than 3£ per cent before the termination of the war. All 4 | per cent bonds, including bonds issued upon conversions, are noncocvertible.
Bonds may be presented and surrendered
for conversion at any Federal Reserve Bank or
at the Treasury Department. Registered
bonds presented for conversion must be assigned to the Secretary of the Treasury for
conversion. Such assignments, however, need
not be witnessed. On conversion of registered
bonds, registered bonds only will be delivered,
neither change of ownership nor delivery of
coupon bonds on conversion of registered bonds
being permitted. Registered bonds, however,
may be delivered upon conversion of coupon
bonds if request therefor is submitted. Coupon
bonds presented for conversion must have May
15 or June 15 coupons detached and coupons
maturing November 15 or December 15 and all
subsequent coupons attached. Interest on
registered bonds will be paid on May 15 or
June 15 without regard to conversion. The
coupon bonds issued upon conversion will have
four interest coupons attached, and on and
after the final interest payment date covered
thereby such bonds must be exchanged for
new bonds with all subsequent interest coupons
attached.
Bonds issued upon conversion of 3-| per cent
bonds and of 4 per cent bonds of the first
Liberty loan converted will be dated May 9
and will carry interest at 4-| per cent from
June 15. Bonds issued upon conversion of
4 per cent bonds of the second Liberty loan
will be dated May 9, and will carry interest at
4£ per cent from May 15.
The registered and coupon bonds issued upon
conversions will be issued in the same denominations as the bonds of the third Liberty loan
and, except for the dates of maturity of prin-

518

FEDERAL RESERVE BULLETIN.

cipal, the dates for payment of interest and the
terms of redemption, which will remain the
same as for the original issues, the terms of
such 4 | per cent issued upon conversion will
be identical with the bonds of the third Liberty
loan, including tax exemptions, nonconvertibility, receivability for Federal inheritance
taxes. They will not carry the circulation
privilege, they will be receivable as security
for public deposits, and may participate in the
benefit of the bond-purchase fund.

Certificates of Indebtedness.

The Treasury Department, on May 14,
issued the following statement:
United States Treasury certificates of indebtedness dated May 15, 1918, maturing June 25,
1918, acceptable in payment of income and
excess-profits taxes, bearing interest at the rate
of 4 per cent per annum, and in all respects
identical with the certificates dated April 15,
1918, except as to the date of issue and from
which they bear interest, will be made available promptly. In the meanwhile Federal Reserve Banks are authorized to issue interim
receipts calling for definitive Treasury certificates dated May 15 as above instead of certificates dated April 15. This will relieve subscribers for certificates of this character of the
necessity of paying so much on account of
accrued interest. Subscriptions for these certificates at par and accrued interest will be
received by Federal Reserve Banks and they
are authorized until further notice to make
allotment in full and receive payment with the
subscription. More than §70,000,000 of the
certificates dated April 15 have been sold to
date, making the total amount of certificates
maturing June 25, 1918, to date about
$1,430,000,000.

Press Statement.

The following statement for the press was
issued by the Treasury Department on May 12:




JUNE 1,

1918.

The Central Executive Council of the International
High Commission, of which Secretary McAdoo is chairman, has, during recent months, been devoting special
attention to securing greater uniformity in the commercial
legislation of the Republics of America. Recent effort
has been concentrated on the law relating to notes and bills
of exchange concerning which an extensive report was
published a short time ago. This report is now being
made the basis for concrete legislative effort by the several
national sections of the International High Commission.
A further step in the same direction has now been taken
by the Central Executive Council in the publication of a
report on the law and practice relating to checks. Owing
to the wide diversity of practice in different sections of
the continent, the difficulty^ of securing uniformity of
legislation relating to checks is considerably greater than
in the matter of notes and bills of exchange. The report
just issued by the Central Executive Council of the International High Commission is the first step in the difficult
process of securing greater uniformity of law and practice.
After a careful analysis of existing legislation and study
of the development of the proposed Hague Rules on
Checks (1912), the Council has come to the conclusion
that of all the instrumentalities of international commerce
the legislation in regard to checks stands in greatest need
of a revision toward greater uniformity amongst the
American Republics.
The report, which is issued in the Spanish language,
deals with the following topics:
I. The theory of the check.
II. Material concerning the history and present importance of the check.
III. The check at The Hague Conference on Bills of
Exchange.
IV. The questionnaire circulated by the Government of
the Netherlands concerning the check (1912.)
V. The discussions of the Central Committee of The
Hague Conference upon the Rules to Govern the
Check.
VI. The preliminary resolutions of The Hague Conference on the Law of Checks (1912).
VII. The check in the legislation of American Republics.
VIII. Appendix:
A. The Principles of Check Legislation, by Dr.
Octavio Morato.
B. Project of a Uniform Law on Checks, prepared by Dr. Octavio Morato.
An elementary and detailed examination of the history,
kinds, and present uses of checks was felt to be. desirable
in Latin America, in view of the slight acquaintance with
this negotiable instrument outside of one or two large
commercial countries.
The studies by Dr. Morato, who is professor at the
University of Montevideo and an active member of the
commission, were especially prepared for the Council.
The uniformity of law and practice with reference to
checks is one of the important questions in the program
of the International High Commission, and it is confidently expected that it will soon be possible to record
further definite steps toward the attainment of this
purpose.

519

FEDERAL RESERVE BULLETIN.

JUNE 1, 1918.

Paper Currency Outstanding.
Statement issued by the Treasury Department showing the amount of paper currency of each denomination outstanding
'Apr. 30, 1918.
United
States
notes.

Denominations.

One dollar
Two dollars
Five dollars
Ten dollars
Twenty dollars
Fifty dollars
One hundred dollars
Five hundred dollars
One thousand dollars
Five thousand dollars
Ten thousand dollars
Fractional parts

$25,329,845
26,447,823
217,819,260
53,139,971
10,914,042
1,246,275
2,011,800
,
1,540,000
9,222,000

Net-




Federal
Nationalreserve
bank notes. bank notes.

$227,251,160
567,833,000
596,174,930
114,155,100
145,554,100

$3,252,725
4,665,890
3,824,340

$342,072
163,392
111,399.260
297,503,210
248,385,960
30,400,900
34,905,900
88,000
21,000

1,650,968,290

11,742,955

723,267,132

1,877,321,669

455,888,000

5,068,742,062

161,570

"16* 549,* 875

697,866,020

13,818,260

1,000,000
763,215,949

""64*666"

10,000

Total
347,681,016
Deduct:
Unknown, destroyed
1,000,000
Held in Treasury
8,334,715
Held by Federal Reserve Banks
and Federal Reserve agents:..
Redeemed but not assorted by
denominations
338,346,301

62161—18

$332,321
207,596
459,643
488,940
220,650
9,250
90,600

Federal Reserve notes.

26,480,570

Treasury
notes of
1890.

6

Gold certificates.

$352,591,845
283,394,894
74,611,030
104,654,900
27,759,500
133,359,500
142,660.000
758,290,000

57,438
1,873,000

Silver certificates.

$225,271,052 $251,275,290
83,324,121
56,505,310
697,038,200
136,856,152
14,525,301 1,290,748,157
14,724,230 1,157,639,046
228,125,990
7,703,435
287,488,320
271 020
29,403,000
15,500
142.682,500
16,000
142:660,000
758,300,000
57,438

342,129,745

241,869,780

100,259,965
978,955
1,868,061

1,524,227,755

11,581,385

705,738,302

Total.

978,955
937,585,869

442,069,740

3,961,417,413

520

FEDERAL RESERVE BULLETIN.

1918.

INFORMAL RULINGS OF THE BOAR®.
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:
Rediscount of Paper Indorsed by Nonmember Bank.
(To a Federal Reserve Bank.)

Receipt is acknowledged of your letter of
the 26th ultimo in further reference to the
rediscount by a Federal Reserve Bank for a
member bank of eligible paper bearing the
indorsement of the Bank of
.
It appears from your letter that the Bank of
is not a member bank. You ask
whether this fact would alter the ruling of the
Federal Reserve Board contained in letter to
you dated April 24.
In reply you are advised that in the opinion
of the Board the limitations contained in section 13 of the Federal Reserve Act on the
rediscount of paper bearing the signature or
indorsement of any one borrower should not
be held to refer to the indorsement of a nonmember bank on paper rediscounted with a
member bank.
It is true that in such case the nonmember
bank is contingently liable if the paper is not
paid at maturity, but the Board is inclined to
the view that this language refers to paper
bearing the signature or indorsement of borrowers or customers of the member bank and
not to the indorsement of other banks. A
nonmember bank could not, of course, obtain
indirect accommodation from the Federal
Reserve Bank through the medium or agency
of a member bank except with the permission
of the Federal Reserve Board, but if a member
bank had acquired eligible paper in due course
by rediscount from a nonmember bank the
member bank should hardly be precluded from
rediscounting this paper with the Federal
Reserve Bank because it bears the indorsement
of the nonmember bank.
The fact that this inquiry is submitted by
the Bank of
, a nonmember bank, may




indicate a desire on its part to obtain accommodation from the Federal Reserve Bank
through one of its correspondent member
banks. This being true, it may be well to
call its attention to the fact that if this is its
purpose it will be necessay to obtain the consent of the Federal Reserve Board.
MAY 1, 1918.
Acceptance of Drafts Against Sugar in Bond.
(To a Federal Reserve Bank.)

Your telegram. It is the understanding of
this office that sugar referred to is placed in
bond under transit entry and warehouse
receipt issued by collector in negotiable form,
but sugar can not be withdrawn for domestic
sale or consumption without special permission of Treasury Department. Board is of
opinion that member banks may legally accept
drafts drawn against security of such warehouse receipt properly assigned.
MAY 7, 1918.
Bills Payable Elsewhere Than in the United States.
(To a Federal Reserve Bank.)

I have received JOXIT letter of May 8, 1918,
asking whether or not Federal Reserve Banks
are authorized to purchase bankers' acceptances payable elsewhere than in the United
States.
You are advised that under the regulations
of the Federal Reserve Board defining bankers'
acceptances, any bill which is payable elsewhere than in the United States would not be
eligible for purchase as a bankers' acceptance,
under the provisions of regulations A and B,
series of 1917, even though eligible in all other
respects.
The acceptance to which you refer, however,
might properly be purchased as a bill of exchange payable in a'foreign country in accordance with the provisions of Special instructions
No. 2 of 1916, subsection (b), printed on page
529 and 530 of the October, 1916, Bulletin.
MAY 11, 1918.

FEDERAL BESEKVE BULLETIN.

JUNE 1,1918.

Discount of Acceptances Not Paid at Federal Reserve
Bank.
(To Federal Reserve Banks.)

The discount committee of the Federal Reserve Board has reported that, in its opinion,
"Federal Reserve Banks should insist that
acceptances when due should be paid by checks
on the local Federal Reserve Bank, in order
that they may be charged to the account of the
acceptor on the day of maturity, or else that
acceptances should be paid by checks through
the clearings. If an arrangement on these lines
can not be perfected, Federal Reserve Banks
ought to be required to add one day to the
actual number of days the acceptance has to
run when bought, so as to make up for the loss
of interest incurred in collecting in this manner."
This report has been agreed to by the Board,
and your bank is requested, in buying acceptances, to charge discount for one additional
day, except in cases where satisfactory arrangements are made to make actual cash payment at the Federal Reserve Bank on the day
of maturity.
MAY 7, 1918.
Date for Payment of Dividend.
(To Federal Reserve Banks.)

The Board ruled some time ago that the
books of Federal Reserve Banks could be
closed for the purpose of paying dividends on
the last business day of June and December of
each year. Section 7 of the act provides that
"after all necessary expenses of a bank have
been paid or provided for, the stockholders
shall be entitled to receive an annual dividend
of 6 per cent on the paid-in capital stock, which
dividend shall be cumulative." Dividends are
permitted to be paid at this rate semiannually
for the greater convenience of the member
banks, and the Board holds that this does not
require that payment to the Government be
made at the semiannual dividend periods.
Therefore, in making your dividend distributions, either current or cumulative, on June




521

30, no addition should be made to the surplus
of your bank and no return need be made to
the Government. These matters can be adjusted on the last business day of December, at
which time all depreciation can be provided
for and the proper amounts carried to the
surplus fund and paid over to the Government. It is, of course, understood that at
your semiannual dividend period in June you
should charge off the expense account as
shown by your books, as well as any ascertained
losses, in order that no dividends may be
paid which have not actually been earned.
MAY 1, 1918.
Use of the Word "Reserve."
(To a Federal Reserve Bank.)

Your letter of the 10th instant, asking
whether the Board would approve a change of
the name of the American Savings Bank and
Trust Company of
to "The American
Reserve Bank," has been duly considered by
the Board.
You are requested to call the attention of
this bank to the informal ruling of the Board
on a similar question which involved the use
of the word "Federal" as part of the name of
a bank not a Federal Reserve Bank, under
date of July 21, 1917 (vol. 3, p. 615, Federal
Reserve Bulletin), in which it was stated that
"it is decidedly against the policy of the Federal
Reserve Board to encourage the use of the
word 'Federal7 as part of the title of member
banks."
The Board is of the opinion that there is just
as much objection to the use of the term
"Reserve," especially when coupled with the
term "American" so as to read "American
Reserve Bank," as there is to the term "Federal" as part of the title of an ordinary bank.
You are therefore requested to advise the
bank that the Board would not approve a
change of its name to "The American Reserve
Bank."
MAY 18, 1918.

522

FEDERAL RESERVE BULLETIN.

JUNK 1,1918.

LAW DEPARTMENT.
The following opinions of counsel have been treating the branch and the parent bank as
authorized for publication by the Board since separate entities.
the last edition of the Bulletin:
Respectfully,
M. C. ELLIOTT, Counsel.
Membership of Branch of State Bank.
Where a branch of a State bank becoming a member of
the Federal Reserve system is located in a different district from its parent bank, it is not necessary for the branch
bank to become a member of the Federal Keserve Bank of
the district where it is located; since the operations of the
branch are the operations of the parent bank, and the
branch and parent banks are not separate entities.
A P R I L 24,

1918.

SIR: From the accompanying letter of the
chairman of the board of a Federal Reserve
Bank, it appears that a State bank recently
admitted to membership in a Federal Reserve Bank has a branch in another city,
which is located in a different Federal Reserve
district.
The question is raised whether this branch
shall be treated as a separate entity and be
required to carry a deposit with the Federal
Reserve Bank of the district where it is located, or whether all of its operations shall be
conducted through the Federal Reserve Bank
of which the parent bank is a member.
In the opinion of this office, the operations
of the branch are the operations of the parent
bank. The reserve to be maintained by the
parent bank with the Federal Reserve Bank
of which it is a member should, therefore, be
based upon the aggregate deposits of the
parent bank and the branch. If it becomes
necessary to do so, there would seem to be no
objection to having the branch send items for
collection through the Federal Reserve Bank
of the district where it is located for credit to
the account of the member bank with the
Federal Reserve Bank of which the parent
bank is a member; but there is Mot, in the
opinion of this office, any justification for




To HON. W. P. G. HARDING,

Governor, Federal Reserve Board.
Decision of Supreme Court of Illinois in the Case of The
People ex rel. First National Bank of Joliet v.
Andrew Russell, Auditor of Public Accounts.

In a former proceeding before the Illinois
Supreme Court, the First National Bank of
Joliet petitioned the Supreme Court of Illinois
for a mandamus to require the auditor of
public accounts to issue to it a license under the
State law, authorizing it to exercise trust
powers.
This petition was refused by the court, which
held that the exercise of trust powers would
contravene the laws of Illinois and that the act
of Congress vesting these powers in national
banks was unconstitutional. The same question was involved in a suit instituted in the
State of Michigan, in which case the Supreme
Court of that State held the act of Congress to
be unconstitutional. This case was appealed
to the Supreme Court of the United States,
which reversed the Supreme Court of Michigan
and sustained the constitutionality of the act.
The present proceedings against the auditor
of public accounts were instituted in the
Supreme Court of Illinois after the Supreme
Court of the United States had sustained the
constitutionality of the act. In the present
case, the Illinois Supreme Court, in referring
to its previous decision refusing the writ of
mandamus applied for, says:
Under the decisions of the Supreme Court of the United
States, our judgment was erroneous, but the conclusiveness
of a judgment upon the parties to it, does not depend upon

JUNE 1.

1918.

FEDERAL RESERVE BULLETIN.

whether it is erroneous. (Case v. Beauregard, 101 U. S.
688.) Although it may be based upon unsound principles,
it is binding on the parties and on the court rendering it
unless reversed or set aside, and it is unaffected by the fact
that in another case another court has rendered a different
judgment upon the same issues of law or fact. We do
not understand that we have the power to entertain, hear,
and determine this case so long as our judgment in the same
case rendered at a former term is in full force and effect.

The petition of the First National Bank of
Joliet was accordingly denied.
The full text of the opinion is as follows:
Mr. Justice Farmer delivered the opinion of the court:
This is an original petition filed in this court, on the
relation of the First National Bank of Joliet, for a peremptory writ of mandamus against the State auditor of
public accounts, commanding him to forthwith issue to
relator a certificate of qualification under the trust act of
Illinois, whereby it might lawfully act as trustee, executor, administrator, or registrar of stocks and bonds and in
such other trust capacities as provided by the trust act.
Relator alleges it is a national banking association incorporated under an act of Congress; that pursuant to regulations prescribed by the Reserve Bank Organization Committee created by act of Congress entitled "An act to provide for the establishment of Federal Reserve Banks," etc.,
commonly called the Federal Reserve Act, the relator became a member of the Federal Reserve Bank of Chicago
and still continues to be such member; that said Federal
Reserve Act provides that the Federal Reserve Board
created by the act may grant special permits to national
banks applying therefor, when not in contravention of
State or local law, to act as trustees, executors, administrators, or registrars of stocks and bonds, under such rules
and regulations as said board might prescribe. The petition alleges that upon its application to the Federal Reserve Board said board granted relator permission to act
as trustee, executor, administrator, or registrar of stocks
and bonds; that thereafter relator applied to the auditor
of public accounts of the State of Illinois for a certificate
of authority, stating therein that relator had complied
with the Illinois act entitled "An act to provide for and
regulate the administration of trusts and trust companies,"
approved June 15, 1887, and subsequent amendatory and
supplementary acts. The petition alleges that at the time
of making said application to the auditor, relator offered
to comply with ail the requirements of the Illinois act,
but the auditor refused to issue said certificate of qualification, whereby relator has been and is prevented from
exercising the rights, privileges and franchises conferred
by the Trust Act of the State of Illinois.
At a former term of this court this same relator filed a
precisely similar petition praying the same relief. The
only difference is that then James J. Brady was the incumbent in the office of auditor of public accounts while
now Andrew J. Russell is the incumbent. Three issues of




523

law were raised by demurrer to the former petition, which
we considered on their merits in an opinion filed at the
December term, 1915, denying the writ (People v. Brady,
271 111., 100). One question was the contention of the
Attorney General that section Ilk of the Federal Reserve
Act is a delegation of legislative power by Congress to the
Federal Reserve Board, in violation of the Constitution of
the United States. We did not sustain that contention.
The second and third questions were (2) if it be held section Ilk is not a delegation of legislative power but is a
general grant by Congress to national banks of power to
act as trustees, executors, administrators, or registrars of
stocks and bonds, it is void for want of power in Congress
to grant such a franchise to a national bank; and (3) that
to permit national banks to act as trustees, executors,
administrators, or registrars of stocks and bonds in Illinois
would be in contravention of the laws of Illinois. Upon
the second question we expressed our understanding of the
decisions of the Supreme Court of the United States, especially McCulloch v. State of Maryland, 4 Wheat. 316,
and Osborn v. United States Bank, 9 id. 738, to be as
follows:
"The basis upon which the authorities rest that Congress
has power to create a banking corporation and authorize
it to carry on a general banking business is that such institutions are necessary and appropriate agencies for the carrying out of certain governmental functions, and while
they are authorized to engage in a general banking business (U. S. Rev. Stat., sec. 5136) such authority is necessary to their continued existence and the exercise of such
power is necessary to enable the corporations to serve the
purpose of their creation. The power to create them was
never sustained on the ground that Congress had the right
to charter a corporation for the purpose, alone, of engaging
in the private trade of banking, but the power of such
corporation to engage in such trade or business was sustained as necessary to perpetuate the life of the corporation created as an instrument or agent for carrying out the
objects and purposes of the Government."
We further were of opinion that as Congress had no
express authority to create a corporation for the purpose
of engaging in the business of acting as trustee, executor
of wills, or administrator of estates, it had no implied
power to authorize a national banking corporation to act
in those capacities, because in our view such powers
could not be made useful instrumentalities in carrying
out governmental functions and their exercise is not
necessary to the life or existence of the bank. We further
were of opinion the business of acting as trustee, executor,
and administrator appertains to private-property rights
under the laws of the several States, their devolution,
descent, and distribution, and therefore subjects of regulation by the States. Upon the third question we were
of opinion, from an examination of the large powers conferred by the Illinois statute upon the auditor of public
accounts of examination, regulation, and control of corporations authorized to administer trusts in this State,
that the Federal Reserve Act in this respect, or section
Ilk, is "in contravention of State or local law." No

524

FEDERAL RESERVE BULLETIN.

appeal was prosecuted or writ of error sued out to reverse
that judgment, rendered more than two years before this
petition was filed, and it still remains in full force and
effect. Now, the same relator files a precisely similar petition against the same public officer, asking the same
relief upon the same grounds as in the former case. There
is identity in the thing sued for, the cause of action,
parties to the action, and quality in the person for and
against whom the claim is made. This court had jurisdiction of the subject matter and of the parties, and the
decision, whether erroneous or not, was based on the
merits of the case. The judgment of a court of competent
jurisdiction, although it may be erroneous, is binding
upon the parties until reversed and can not be collaterally
assailed. It is a complete bar to a subsequent suit between the same parties on the same demand or cause of
action. Johnson Co. v. Wharton, 152 U. S., 252; Smyth
v. Neff, 123 111., 310; Baum v. Hartmann, 238 id., 519;
3 Cyc, 493; 15 R. 0. L., 959.
The reason given by the relator for bringing the same
suit again is, that since our decision in the case when it
was before us the first time the Supreme Court of the
United States has considered the same question on writ
of error to the Supreme Court of Michigan (National Bank
of Bay City v. Fellows, 37 Sup. Ct. Rep., 734), and in an
opinion filed June 11, 1917, sustained the validity of
section Ilk of the Federal Reserve Act and the power of
the Federal Reserve Board under said act to clothe a
national bank with authority to act as trustee, executor,
or administrator, and it is, in substance, contended that
we should disregard or ignore our former judgment in this
case and award the peremptory writ. We willingly and
cheerfully yield obedience to the authority of decisions
of the United States Supreme Court when we have any
liberty of choice in the matter, but we do not understand
that in this case we have the power to adopt the view of
the United States Supreme Court and render a judgment
granting the relief prayed. If that court had been asked
to review our decision, it would have had the power to
reverse and set it aside, but we do not understand the
reversal of the judgment of the Supreme Court of Michigan
in any way disturbed or affected the conclusiveness of the
judgment of this court as a bar to a second suit between
the same parties on the same cause of action. Under the
decisions of the Supreme Court of the United States our
judgment was erroneous, but the conclusiveness of a judgment upon the parties to it does not depend upon whether
it is erroneous. (Case v. Beauregard, 101 U. S., 688.) Although, it may be based upon unsound principles, it is
binding on the parties and on the court rendering it
unless reversed or set aside, and it is unaffected by the j
fact that in another case another court has rendered a I
different judgment upon the same issues of law or fact, j
We do not understand that we have the power to enter- j
tain, hear, and determine this case so long as our judgment in the same case rendered at a former term, is in




JUNE 1,1918.

full force and eSect. For these reasons we feel compelled
to deny the writ.
(Writ denied.)

The Board has been unofficial advised that,
in view of the foregoing opinion of the Supreme
court of Illinois, the auditor of public accounts
will grant to national banks holding permits
of the Federal Reserve Board the necessary
license to exercise trust powers in Illinois.

Amendments to New York Banking Laws.

The definition of " reserves on deposit" in
section 3 of the New York banking law was
amended by the 1918 legislature (Laws of 1918,
chap. 92) so as to exclude from the meaning
of the term deposits maintained with a Federal
Reserve Bank located in the State. The
definition now reads as follows:
Reserves on deposit. The term, " Reserves on deposit,"
when used in this chapter, means the reserves against
deposits maintained by any individual or corporation
pursuant to this chapter in reserve depositaries, other than
a Federal Reserve Bank located in this State, and not in
excess of the amount authorized by this chapter.

Section 112, relating to the reserves of banks,
and section 197, relating to the reserves of trust
companies, were amended (Laws of 1918, chap.
92) so as to permit banks and trust companies
becoming members of a Federal Reserve Bank
to carry or deposit with that Federal Reserve
Bank such portion of their total reserves as is
required of members, as reserves on hand instead of reserves on deposit. In addition, the
requirement that member banks, located in
New York City, must carry the remainder of
their total reserves as reserves on hand was
omitted from section 112 as so amended.
Section 112 now reads as follows:
Reserves against deposits. Every bank shall maintain
total reserves against its aggregate demand deposits as follows:
1. Eighteen per centum of such deposits if such bank
has an office in a borough having a population of two
millions or over; and at least twelve per centum of such
deposits shall be maintained as reserves on hand, except
as otherwise provided in this section.

JUNE 1,

1918.

FEDERAL RESERVE BULLETIN.

2. Fifteen per centum of such deposits, if such bank is
located in a borough having a population of one million
or over and less than two millions, and has not an office in
a borough specified in subdivision one of this section; and
at least ten per centum of such deposits shall be maintained
as reserves on hand.
3. Twelve per centum of such deposits if such bank is
located elsewhere in the State; and at least four per centum of such deposits shall be maintained as reserves on
hand.
Any part of the reserves on hand in excess of four per
centum of such deposits may be deposited, subject to call,
with a Federal Reserve Bank in the district in which such
bank is located, and the reserves on hand not so deposited
shall consist of gold, gold bullion, gold coin, United States
gold certificates, United States notes or any form of currency authorized by the laws of the United States; but, if
any bank shall have become a member of a Federal Reserve
Bank, it may maintain as reserves on hand with such
Federal Reserve Bank such portion of its total reserves as
shall be required of members of such Federal Reserve
Bank.
If any bank shall fail to maintain its total reserves in the
manner authorized by this section, it shall be liable to, and
shall pay the assessment or assessments provided for in
section thirty of this chapter.

525

bankers' acceptances and bills of exchange,
subject to certain restrictions. The following
subdivision was added to the list of securities
in which savings banks might invest such funds:
11. Bankers' acceptances and bills of exchange of the
kind and maturities made eligible by law for rediscount
with Federal Reserve Banks, provided the same are
accepted by a bank, national banking association or trust
company, incorporated under the laws of the State of New
York or under the laws of the United States and having its
principal place of business in the State of New York. Not
more than twenty per centum of the assets of any savings
bank less the amount of the available fund held pursuant
to the provisions of section two hundred fifty-one of this
chapter, shall be invested in such acceptances. The aggregate amount of the liability of any bank, national banking
association or trust company to any savings bank for
acceptances held by such savings bank and deposits made
with it shall not exceed twenty-five per centum, of the paidup capital and surplus of such bank, national banking
association or trust company and not more than five per
centum of the aggregate amount credited to the depositors
of any savings bank shall be invested in the acceptances
of or deposited with a bank, national banking association
or trust company of which a trustee of such savings bank
is a director.

Sections 108 and 190, restricting loans and
investments by banks and trust companies,
Subdivision 5 of the same section, relating
respectively, were amended (Laws of 1918, to investments by savings banks of their deeh. 94) by adding to each a new subdivision posits and guaranty funds in stocks or bonds
reading as follows:
of incorporated cities, counties, villages or
None of the limitations or restrictions contained in the towns located in adjoining States, was also
previous subdivisions of this section shall apply to loans, amended (Laws of 1918, ch. 96); and two
discounts or other extensions of credit secured by Liberty paragraphs authorizing savings banks to invest
bonds or by other bonds or securities issued by the United
States Government for war purposes, if the market value such funds in promissory notes secured by first
of such Liberty bonds or other securities exceeds by teD mortgages on New York real estate or by
per centum the amount of any such loan, discount or other pledges of pass books of New York savings
extension of credit.
banks were added to subdivision 8 (Laws of
Section 238 relating to the powers of savings 1918, ch. 95).
Subdivision 5 of section 106 was amended
banks was amended (Laws of 1918, ch. 176)
so as to authorize savings banks to receive (Laws of 1918, chap. 98) so as to enable banks
deposits of Liberty bonds for safe-keeping. A to own, to an amount not exceeding 10 per cent
new subdivision is added, which reads as fol- of their own capital and surplus, the capital
stock of any investment company qualified to
lows :
8. To receive as depository, or as bailee for safe-keeping accept drafts, issue letters of credit and disand storage, Liberty bonds or other bonds or securities count commercial paper, and the capital stock
issued by the United States Government for war purposes of any foreign banking corporation licensed to
or otherwise.
do business in the State.
Subdivision 10 of section 190 was amended
Section 239 was amended (Laws of 1918,
(Laws of 1918, chap. 98) so as to remove from
ch. 270) so as to enable savings banks to
invest their deposits and guaranty funds in the restrictions on the amount of stock of other




526

FEDERAL RESERVE BULLETIN.

corporations which might be owned by trust
companies the ownership of stock in investment companies qualified to accept drafts,
issue letters of credit and discount commercial
paper, and the capital stock of foreign banking
corporations licensed to do business in the
State.
The following sections were also amended:
Section 109, subdivision 5, and section 194,
subdivision 5, relating to accounts of court
funds on deposit to be kept by banks and trust
companies, respectively (Laws of 1918, chap.
93).
Section 454, subdivision 7, relating to loans
by credit unions to their members (Laws of
1918, chap. 97).
Section 293, subdivision 3, relating to deposits of securities by investment companies
receiving deposits (Laws of 1918, chap. 98).
Section 294, subdivision 1, restricting the
powers of investment companies (Laws of 1918,
chap. 98).
Penal Law, section 1293, relating to obtaining money by fraudulent order (Laws of 1918,
chap. 314).
And a new section, 1292a, was added to the
Penal Law, providing a penalty for issuing
fraudulent checks, drafts, or orders (Laws of
1918, chap. 314).

JUNE 1,1918.

to accept bills of exchange and issue letters of
credit, and to provide that the discount and
purchase of certain commercial paper should
not be considered as borrowed money within
the meaning of the limitation on loans to one
person, firm, or corporation.
Section 579 of Carroll's Kentucky Statutes,
as so amended, provides in part as follows:
Any bank or trust company may accept for payment at
a future date drafts or bills of exchange drawn upon H by
its customers and issue letters of credit authorizing the
holders thereof to draw drafts upon it or its correspondents
at sight or on time, not exceeding one year, and may also
accept drafts or bills of exchange drawn upon it, having
not more than six months sight to run, growing out of transactions involving the importation and exportation of
goods; and any bank or trust company may discount
acceptances which are based upon the importation or
exportation of goods and which have a maturity at time
of discount of not more than three months and are endorsed
by at least one other bank or trust company; but no bank
or trust company shall accept such drafts or bills of exchange to an amount equal at any time in the aggregate to
more than one-half of its paid up and unimpaired capital
stock and surplus, except by authority of the banking
commissioner under such general regulations as said commissioner may prescribe, and in no event to an amount
exceeding the capital stock and surplus of such bank or
trust company; and such regulations shall apply to all
banks and trust companies alike regardless of the amount
of capital stock and surplus.

Amendments to Kentucky Banking Laws.

Section 583 was amended by adding to it the
following provision:
Provided, that the discount of bills of exchange drawn

In addition to the amendments noted on
page 315 of the April Bulletin, the Kentucky
Legislature recently amended certain other
sections of the banking laws of that State so as
to authorize State banks and trust companies

against actually existing value and the purchase or discounting of commercial or business paper actually owned
by the person negotiating the same shall not be considered
as borrowed money, within the meaning of this section
in fixing the limit of indebtedness of any person, firm, or
corporation, selling or negotiating said paper to the bank.




SUMMARY OF BUSINESS CONDITIONS, MAY 23, 1918.
General
business.

District.

Industries of the Construction, 1 wilding,
and engineering.
district.

Crop condition.

,. Busy

No. 1—Boston

Good

Normal

No. 2—Now York

Active.

Favorable; plant- Very active.
i u g vr v 11 a d vaiiccd.

Good

No. 3—Philadelphia.. Good

Foreign trade.

Railroad, post office,
and other receipts.

Money rates.

Labor conditions.
Well
employed;
wages high.

Inactive

Slight decrease...

Mixed

Extremely l i g h t , ex- Imports much restricted; exports
cept s h i p b i:i il d i n g
and factory construcother than Govtion lor Government
ernment matework.
rial light, but
aggregate very
heavy.

Firm; no material
change.

Increase in post office In great demand;
much shifting.
receipts 20,66 percent
over last year; street
railroad r e c e i p t s
lower than last year;
steam railroads show
increase over last
year.

Very firm.

Increasing

Inadequate supply
of competent
labor.

Very firm.

Increase

Scarce; wages increased.

; Very little

Stilllarge.

No. 4—(Cleveland

Satisfactory..

Good

No. 5—Richmond

Satisfactory..

Satisfactory and
promising.

Active; profitably
employed.

Private building negligible; Government
work active.

R e s t r i c t e d bylack of tonnage.

Good demand; 6
per cent; increasing.

Railroad, irregular; Inadequate and
unsatisfactory.
post oilice, volume
large;
reflect increased rates.

(rood

Active

Very inactive.

Unsatisfactory

Steady.

Stationary

Scarce and
paid.

Inactive..

Firm...

Increase

Generally good.

No. 6—Atlanta

. Very busy.

Dull.

well

No. 7—Chicago

Good

Excellent

Generally at capacity.

No. 8—St. Louis

Good

Good

Generally active-. Quiet

Firm

Increase in postal receipts.

Improving.

No. 9—Minneapolis.. Good

Good

Active

Firm

Good

Fair.

No. 10—Kansas City. Good

Much improved...! Active
!

Substantial increase

Settled.

No. 11—Dallas

Fair to good

!

Railroad, increase; post
of lice, 60.1 per cent
increase for April at
larger cities.

Unsatisfactory;
scarcity in all
branches.

Good

[

| Satisfactory.




I

Improving, but below
normal.

i Increasing

Active

Building fairly active,
though not as heavy
as last year.

Only fair.

Very active

Decreasing.

Large volume

I
No. 12—San Franci;col Active
I

Slow

|

Unchanged; firm
to steady.

| Firm

, Increasing

More settled.

to

528

FEDEKAL RESERVE BULLETIN.

JUXK 1,

1018.

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

Conditions in similar lines of business vary
widely in different parts of the district, due to
local factors, but on the whole general business,
while good, is following the same trend that
has been apparent for several months and is
settling down to a war basis.
All business, no matter what its nature, has
encountered new and in most cases unprecedented conditions. The manufacturers of
products required by the Government are
delaying distant future commitments for civilian purposes until war needs are provided for.
The demand for labor for war requisites has
forced up wages to a point where overhead
costs make it more and more unprofitable for
some dealers and manufacturers to continue
business.
On the other hand, an excellent demand for
clothing and dry goods of the better grades is
being made by employees earning larger wages.
There is a decrease in the inquiry for cheaper
goods ordinarily purchased by this same class.
In some sections wage earners are said to be
spending their money as fast as received,
while in others savings deposits are showing
satisfactory increases. Nevertheless, a large
number have become Liberty bond owners
who, up to a few months ago, did not know
what a security was and had never saved.
Deposits in savings banks have been very
little affected and much less than in past
Liberty loans by the third campaign, and the
large number of individual subscriptions for
small amounts indicate that many bonds are
being paid for out of earnings.




The Capital Issues Committee has been
effective in its influence in cutting down
unnecessary expenditures, both by municipalities and industries, and this has resulted in
the release of much labor and raw material in
addition to the capital saved.
Boot and shoe manufacturers are finding
collections good. The early warm weather
has advanced the season for summer shoes,
with a consequent large retail demand, especially in women's lines. Retailers are not carrying large stocks and are therefore able to
meet maturing obligations promptly. Many
manufacturers have enough civilian orders,
taken in conjunction with Government con
tracts, to keep them busy until fall.
The Government regulation of the wool
trade practically prohibits dealers from doing
business. The entire crop has been taken
over by the Government, dealers having been
asked to handle, on a percentage basis, that
part which is to be allotted for civilian needs.
Some of the larger dealers estimate that by
doing this they will be able to keep their
organizations in good form until after the war,
but that it will leave no profit after overhead
expenses. The National Association of Wool
Manufacturers report, under date of May 16,
indicates that all but a very small percentage
of machinery is in use and that approximately
50 per cent of the spinning spindles in this
district are employed on American war orders.
Cotton mills producing fine goods have had
a considerable demand in the last week or
two, but are unwilling to accept new business
until at least a part of that already booked is
finished. !Mills find that with Government
business and shortage of labor, they will be
unable to make deliveries until a month or
two later than originally planned and this
extends some commitments into the late fall.
The prices for print cloth have developed some
strength with the demand good. Wages in
New Bedford mills have been increased 72
per cent in the last two and one-half years, but

.FT X K 1 . . 1 0 I S .

FEDERAL RESERVE BULLETIN.

in spite of this employees are again threatening
to strike unless granted a further increase.
This, in addition to the increase that is anticipated in taxes, is causing mill owners considerable apprehension as to future not earnings.
The United States Department of Agriculture estimates that about the average
amount of plowing and planting was finished
May 1. The spring has been favorable for
farm work, the season being about normal.
While labor has been hard to obtain, the
fanners are doing their utmost, and a good
crop is expected.
The money market is very quiet, with tone
easier than last month. No large demand for
loans to pay taxes has become evident and
as the due date approaches less uneasiness is
apparent. Banks, however, are not anxious
to loan for long maturities and credits are
being closely scanned. There is only a limited
market for outside paper, but banks are in a
position to meet comfortably the demands of
their customers which are apparently less in
volume owing to Government payments being
more prompt. The sales of commercial paper
being made are out-of-town and mostly at
6 per cent. Call money, 5 to 5-J- per cent;
time money, 5£ to 6 per cent, with exceptions
at 5£ per cent, but only for short maturities.
The exchanges of the Boston Clearing House
for the week ending May 18, 1918, were
§317,154,340, compared with $228,733,906 for
the corresponding week last year and
§307,496,431 for the week ending May 11, 1918.
Building and engineering operations in New
England from January 1 to May 16, 1918,
amounted to 855,198,000, as compared with
869,073,000 for the corresponding period of
1917.
The receipts of the Boston post office for
April, 1918, show an increase of $113,612.09,
or about 15 per cent more than April, 1917.
For the first 15 days of May, 1918, receipts
were about 11 per cent, or §41,192.53 more
than for the corresponding period of last year.
The Boston & Maine Railroad reports net
operating income, after taxes, for March, 1918,




529

of 817,456, as compared with $215,588 for the
corresponding month of 1917.
For March, 1918, the New York, New
Haven & Hartford Railroad reports operating
income, after taxes, of SI,153,488, compared
with SI,647,490 for March, 1917. For the first
three months of this year operating income,
after taxes, of the four principal New England
roads was §229,518, as compared with
$6,932,622 for last year.
Loans and discounts of the Boston Clearing
House banks on May, 1918, amounted to
§503,733,000, as compared with $491,471,000
last month and $457,051,000 on May 19, 1917.
Demand deposits on May 18, 1918, amounted
to $464,336,000, as compared with $430,780,000
on April 20, 1918, and 1351,006,000 on May 19,
1917. Time deposits on May 18, 1918, totaled
116,179,000, as compared with $19,755,000 on
April 20, 1918, and $33,750,000 on May 19,
1917. The amount "duo to banks'7 on May
18, 1918, was $129,078,000, as compared with
8140,747,000 on April 20, 1918.
DISTRICT NO. 2—NEW YORK.
Business and industry continue very active
in this district. Manufacturers of chemicals,
potteries, lead, paper, tableware, sewing machines, silks, and knit goods report good business. Dealers in building materials report
business as only a fraction of the usual volume.
Heavy orders recently placed by the Government are causing shoe factories to run at maximum capacity. The copper industry is exceedingly active, with approximately 90 to 95
per cent of the entire production being manufactured into articles required by our Government and its Allies. Smelting companies report that the value of copper and other metals
in transit between western smelters and eastern
refineries is about one-third of what it was in
the middle of March. Factories producing
electrical machinery are working at maximum
capacity. Shirt and collar manufactures show
decided failing off in production. Glove manuufacturers, though hampered by shortage of
skins, are maintaining a volume of business

530

FEDERAL RESERVE BULLETIN,

about equal to that of last year. Contracts
for 30,000 steel cars, to cost $80,000,000, and
1,025 locomotives, to cost $60,000,000, have
been let by the Railroad Administration.
The adaptation of factories of various kinds
to Government work is the most notable feature of the industrial situation. An example
of the changes going on is the recent utilization of 50 per cent of the capacity of a phonograph factory in this way. A company which
before the war made auto parts, motor-truck
frames, and sporting rifles and pistols is now
making machine guns and light ordnance, has
5,000 employees, as compared with 1,500 in
1915, and a volume of business over eight times
that of 1915. Demand for sporting ammunition is much smaller than before the war. A
storage-battery plant is devoting 85 per cent
of its capacity to Government work.
Department stores and retailers report good
business in medium-priced furniture, kitchen
ware, cotton piece goods, ready-to-wear garments, men's furnishings, shoes, hosiery and
knit underwear, gloves, millinery, handkerchiefs, notions and ribbons, food and tobacco,
but reports indicate a decrease in sales of highgrade silks, woolen dress goods, laces and embroidery, high-grade furniture, jewelry, and
other less essential goods. Collections are
good.
Labor, both skilled and unskilled, is in strong
demand at advancing wages. Factories in
the State of New York report 1.2 per cent
more employees and 19.9 per cent larger wage
volume in March, 1918, than in March, 1917,
and 12 per cent more employees and 50 per
cent larger wage volume than in March, 1916.
Wage payments in the metal goods and chemical industries, both of which include the manufacture of munitions, as well as in printing,
textiles, clothing, and food manufacturing,
are larger than ever before. War conditions
have caused a shortage of needle-trade workers, as it is estimated that an average of 10 to
15 per cent leave the trade yearly to engage in
other pursuits, and the loss has not, as in normal times, been made good by immigration.




JUNE I, 1918,

Because of the large demand for summer furs,
workers in this trade now find employment
the entire year, where formerly their dull season extended from January until July. New
York and St. Louis are said to have displaced
London, for the time being, at least, as the
world's largest fur market.
Improvement in freight conditions in the
eastern territory is indicated by figures made
public by the Regional Director of Railroads.
The accumulation of export freight in carload
lots on the eastern seaboard wTas as follows:
Jan. 1, 1918. "Nfay 1,1918.
In oars..
On piers and warehouses
Unloaded on ground
Total

11,092
7,659
22,451

S, 042
6,290
13,256

41,202

o 28,5S8

a Includes 24,109 cars of export freight for ocr Government and its
Allies.

Exclusive of grain and coal, 28,600 cars of
export freight arrived at north Atlantic ports
and 27,890 cars were delivered to steamers
during the month of April. The estimated
export tonnage represented by these cars for
April was 17.8 per cent greater than that
handled during March, and exceeded the export volume in the same months of previous
years by the following percentages: 1913,
111.6 per cent; 1914, 139.3 per cent; 1915,
65.1 per cent; 1916,14.8 per cent. In the eastern territory there were 34,791 cars in transit
May 9 above normal traffic conditions, as compared with 160,904 on February 6, at the time
of the most severe freight congestion.
The New York State barge canal was officiall}7 opened May 15, after 13 years in building,
the total cost having been $233,695,350. The
work consisted of the enlargement of the Erie
and three other existing canals, and changing
portions of the Mohawk and other rivers into
navigable canals. The entire system covers
a distance of 352 miles, and connects New
York Harbor by water with the Great Lakes.
The canal will be controlled by the Government Railroad Administration. Fifteen tugs
have been employed for towing purposes, 165

J U N E l , 1918.

FEDERAL RESERVE BULLETIN.

T

old barges have been leased, and orders placed
for 75 new barges, deliveries to commence in
two months.
The crop outlook for the district is favorable,
with planting well advanced on large acreage.
The use of farm tractors is in some measure
making up for shortage of farm labor. Demand for fertilizers during the past three
years has increased considerably because of
high prices of farm products and abnormal
export demand for food crops. In the potatogrowing sections demand for fertilizers is
somewhat decreased because of low price of
potatoes caused by the heavy production in
1917. Reports received by the New York
State Department of Agriculture indicate some
reduction in potato acreage and some increase
in the acreages of corn and tomatoes. Lower
prices have stimulated consumption of milk,
the supply having been greater than the demand because of the season and limited
facilities for the export of condensed milk.
Between low price of milk and high cost of
feed the dairymen have had very narrow
profits and many have actually run behind.
Recent weeks have seen a striking advance in
bond and stock prices, rails and industrials
being alike affected. Activity was greatest in
the week ending May 18, when stock sales exceeded 7,000,000 shares, more than 1,750,000
being sold in one day alone. The level of
stock prices on that date was about 14 points
above that of the low point in December, and
average bond prices are over 3 points above
the same low point. Money rates continue
firm, commercial paper selling at 6 per cent,
with some sales at 5f- per cent. Call money
fluctuated considerably, touching 6 per cent
occasionally, with the average at about 5 per
cent.
DISTRICT NO. 3—PHILADELPHIA.
The industries of the district are adjusting
themselves to meet the war requirements of the
Nation, the output in many lines being almost
entirely devoted to filling Government orders.
The concentration of all the energies of the




531

business life on the problems of the war is gradually resulting in a more smoothly running machine of production.
Retail trade is reported to be about 40 per
cent ahead of last year in volume of business,
wage earners on account of their very large
earnings being large consumers of goods. Seasonable lines are in particularly good demand.
Manufacturers, as a rule, are extremely busy,
but considerable embarrassment is being caused
by the scarcity of many kinds of raw materials
and the inadequate supply of competent labor.
The transportation situation has shown great
improvement. Railroad freight car movements over the Pennsylvania Railroad at
Lewistown Junction for April totaled 188.000
cars, compared to 176,000 in March and 185,000
in April, 1917. The necessity for equipment of
all kinds, however, is very urgent. Motor
trucks as a means of transportation are coming
more and more into use, and shipments are
being made on regular schedules between Philadelphia, New York, Baltimore, and other cities.
Little change is noted in the iron and steel
situation, Government requirements being paramount and increasing in volume. Some mills
are reported as running at 95 per cent of capacity. Orders have been placed which will keep
them busy for months to come. Material for
civilian use is hard to obtain and demands upon
manufacturers are most urgent. Shipyards are
taking the largest percentage of output, and
manufacturers of locomotives are calling for
large amounts, while considerable material is
going to Europe. The coke situation is reported somewhat improved.
The Anthracite Bureau of Information estimates shipments of anthracite coal during
April at 6.368,372 tons. This compares with
7,276,777 in March, which was the record
month, and 5,592,299 tons in April, 1917.
Bituminous coal production is steadily increasing, due to a better supply of cars and more
favorable operating conditions.
The huge Government demand for cotton
goods has displaced other orders in maiw lines,
and it will be some time before any large

532

FEDERAL RESERVE BULLETIN.

amount of goods of certain kinds can go to
civilian consumers. Manufacturers of cotton
yarns ..nd textiles are working at full blast.
It is reported that of 34 breweries in Philadelphia, all but 7 show a decrease in output as
compared with last year. Owing to the restriction of materials used, output for the current year is estimated at 40 per cent less than
last year.
Business failures are at a very low ebb, while
the record totals of bank clearings for this
period of the year reflect unusual business
activity.
A firm money market prevailed during the
past month, 6 per cent being asked on both
call and time loans. Commercial paper ranged
from 5 | to 6 per cent, with but little paper
selling under the higher rate.
While loan and investment operations of
the Federal Reserve Bank averaged about
$2,000,000 per day during April, and more
than §2,500,000 during the first three weeks
of Ma}r, borrowings by member banks have
not been as heavy- as had been anticipated,
and it is apparent that the third Libert}7 loan
has been floated thus far without any undue
strain on the money market. The bulk of the
discounting has been in the form of notes
secured by Government obligations. Such
loans amounted to $35,100,000 in April,
compared with $21,100,000 in March, and
3,500,000 from May 1 to May 21, inclusive.
DISTRICT NO. 4.—CLEVELAND.

The restrictions placed upon nonessential
industries are reducing the output very decidedly. The situation is accepted for the
most part with cheerful acquiescence, and the
energies of the industries affected are turned
to lines more needful under the circumstances.
Generally throughout, the district business is
in a healthy condition.
Manufacturing.—The manufacture of steel
approaches closely, if it does not equal, its
high record, and Government orders are said
to be in such volume that few domestic orders
are taken and in consequence small manu-




JUXE 1, 1018.

facturers have difficulty in securing a supply.
The pig-iron output, while greatly increased
during the past month and comparing favorably with other active periods, is not equal to
the demands, and investigations are in progress
on the theory that considerable basic iron is
being devoted to the manufacture of nonessential products.
Tin-plate mills are running at maximum
capacity to meet the expected demand during
the canning season for food containers.
Face-brick manufacturers report that there
has been little change in the line in the last
30 days. Production is being adjusted to the
curtailment of 50 per cent of the average of
the years 1915, 1916, and 1917.
Unusual sales of draintile for use in draining
swamp lands is reported. Very little change
is noted in production by glass plants. Restrictions keep the output of this line in much
the same condition as heretofore. Dullness in
the building trades is also a drawback, and
curtailment in these quarters is to be expected.
Owing to the heavy demand for coal for
domestic use, occasioned by last year's shortage, the general demand is stronger than usual
for this season. In some quarters the volume
of production is discouraging, and some complaint is made of miners disregarding their
agreements. However, it is believed that coal
production for the district is equal to the same
period of last year.
Agriculture.—In the northern part of the district, in localities where last month the condition of wheat was reported not up to the
average, this month, owing to favorable
I weather and rain, the condition is reported as
very materially improved. In the " blue grass "
section this crop is said to be in better condition than ever in its history at this time of year,
and generally throughout the district the acreage is large and a good yield is expected.
In many parts the areas being planted in
corn is larger than ever before. In some localities planting in the lowlands has been
delayed on account of wet weather, but, generally speaking, it is progressing favorably.

JUNE 1,1918.

FEDERAL BESEBYE BULLETIN.

The burley tobacco growers report an abundance of plants in beds to be transplanted within
the next few days. Last year's crop having
been sold at such attractive prices, it is expected that the acreage will be increased.
The number of war gardens over last year is
very much increased, and in one large center
it is estimated that fully 2,000 acres are being
cultivated, exclusive of those in the adjoining
suburbs. It is thought that last year's experience will be a great benefit and that increased yields will result.
Labor.—Farmers still complain of serious
labor shortage, but this apparently has not
resulted in curtailing their operations. The
inadequate supply of farm labor is being met
by the use of tractors. Already over 600
tractors of an inexpensive type are in use in the
State of Ohio.
A shortage is reported from all manufacturing centers, but here again there appears to be
no definite curtailment of output in consequence. Many lines of labor are receiving the
maximum prices. The small manufacturing
centers appear to be suffering more than larger
ones from an insufficient supply. Nonessential
industries which have been closed for a short
time find it very difficult to obtain a new force.
While labor is exacting in its terms, and
apprehension for the future is apparent, yet
there is a general feeling that labor'will to the
extent of its power meet the demands laid
upon it.
Mercantile lines.—Complaint is still made by
the mercantile trade of delayed delivery of
stocks of merchandise owing to delayed freight
shipments. It is generally reported by the
jobbing trade that business for the past month
has been in large volume and in excess of expectations, which gives evidence that merchants have confidence in the future. In the
retail line in some quarters it is reported that
this is the first month since the beginning of
the war that business has not increased, but
even these authorities say that business has
equalled the same period last year and that
the lack of increase is probably due to weather




533

conditions and to the increased interest of the
wage earner in the Liberty loan campaign.
Merchants say that the volume of business
in dollars is satisfactory, but that the amount
of merchandise delivered is smaller in comparison with the same period last year. It is
thought that the increased prices for merchandise affect to some extent the purchasing power
of the public.
Collections.—Collections continue good, and
while in some quarters recessions are reported
yet in others increased cash sales are said to
offset any deficiencies. It is believed that the
wide distribution of the third Liberty loan
among wage earners has affected collections
somewhat, but in general the credit conditions
are good.
Transportation.—Transportation facilities are
thought to be generally improving, although
they are still unable to do all that is required
of them. However, the complaints in this regard have considerably lessened and acquiesence in the situation is shown. It is believed
that the improvement has been such that
almost every line of industry is being taken
care of to a fair extent. Shortage of labor and
equipment still continues to handicap the traffic
situation.
Money and investments.—The demand for
money still continues very active. Since the
initial payments on the third Liberty loan bank
balances are building up and in some quarters
marked recovery is noted. While an increased
demand for funds is expected during the coming month, little trouble is anticipated in fully
meeting the situation,
Building.—The building trade shows little
change from its previous condition and, for
other than Government work, is almost at a
standstill. In. several quarters rents are being
increased, and in districts where new plants
are being located the housing problem is a
matter of concern,
DISTRICT NO, 5—RICHMOND.
The third Liberty loan has been the allabsorbing point of interest recently. With

534

FEDERAL BESEBVE BULLETIN.

our increasing war activities, the public has
become more widely impressed with the necessities of the case and has rallied with increasing
enthusiasm to the support of the cause. When
the campaign closed on May 4 it was found
that subscriptions had reached $180,000,000,
which is §56,000,000 over the quota of $130,000,000 allotted to this district. The result
speaks for itself and there has been a widespread feeling of gratification throughout the
district.
The bond campaign has been followed by a
week's campaign for the Red Cross, which
promises to result in an overwhelming success,
as was the case with the campaign for the
Liberty bonds.
Aside from these matters, no others of great
importance have transpired since our last
report, and changes have been so slight that a
report of them constitutes rather a monotonous
repetition.
The readjustment of the railroad situation of
the country, regulation of food and coal supplies, and efforts by State and National Government to relieve the labor situation hold conspicuous attention in the public eye.
There has been some unfavorable weather,
crop reports generally are favorable, and the
condition of winter wheat is said to be above
the average. The acreage in summer crops is
not expected to exceed, if it equals, that of
last year. Cotton, corn, and rice reports, on
the whole, are favorable. Every effort is being
made to secure maximum results, as these are
most important factors in backing our own
men and our allies in achieving victor}7 as early
as possible.
Foodstuffs are in demand. Retail trade is
fair in goods of all kinds, including clothing,
shoes, and other articles.
Government requirements in all lines are the
most important factor, particularly as regards
lumber, metals, wagons, and all manufactured
products of the district.
Notwithstanding the reduction in private
building to a negligible quantity and disturbing limitations placed on many lines of busi-




JUNE 1, 1918.

ness, there is a decided tone of cheerfulness
and even optimism in all circles.
Continued cooperation with the Capital
Issues Committee in the conservative limitation of new issues and elimination of unnecessary expenditures is helping to limit capital
demands without serious interference with trade
activities.
A 40 per cent increase in clearings over last
year reflects a growing vol'ime of business,
resulting, however, largely from exceedingly
high prices. The credit demands naturally
attendant on Government financing, coupled
with the more than normal seasonal demands,
are due particularly to the high prices and are
making unprecedented calls on bank resources.
Bank rates are firm at 6 per cent, and some of
the larger banks particularly report that they
are overloaned on United States securities and
facing strong demands from regular customers. The supply of outside liquid paper accumulated during the winter, when funds were
plentiful, has been pretty freely collected or
rediscounted. These conditions have been
reflected by unusually heavy offerings at the
Federal Reserve Bank, and while conditions
are sound, indeed unusually prosperous, further demands must be met before permanent
relief can naturally be expected from the harvesting and marketing of the growing crops.
Some holders of cotton who have apparently
overstayed the high market and suffered from
the recent decline are hardly entitled to much
sympathy. The marketing of the remainder
of the present crop and clearing decks for the
coming one would apparently be wise.
There is a cheerful acceptance of and adaptation to the requirements of present conditions, and an earnest determination to overcome successfully all difficulties, local and
national, without any other thought than the
winning of the present struggle.
DISTRICT NO. 6—ATLANTA.
Business activities were somewhat displaced
by the all-absorbing interest centered in the
third Liberty loan campaign during the past

JUNE 1,

1918.

FEDERAL RESERVE BULLETIN.

month. The campaign started with bright
prospects, and though daily results lagged during the middle, the final outcome was in excess
of the most optimistic expectations, the subscriptions totaling $137,649,450, against an
allotment of $90,000,000. Only a limited
number of large subscriptions were received,
the great majority being from wage earners,
salaried people, and farmers; the most striking
factor in the campaign being the large subscriptions received from the smaller towns and
rural communities. In the first and second
Liberty loans some difficulty was experienced
in selling to farmers, but in the campaign just
closed this class of citizens fully subscribed
its share.
Current reports from throughout the district indicate that business generally has not
been materially affected by the Liberty loan
campaigns; though when installments begin to
fall due on monthly payments on subscriptions
to the third Liberty loan personal economy
will play a stronger part, especially in retail
lines. Conditions in dry goods continue brisk,
with a good sprinkling of fill-in orders. Early
fall orders have been coming in steadily.
Jobbers and retailers report especially good
business for this season of the year, with indications that the public is beginning to economize in purchases—more noticeably in the
high-class trade.
Clearings continue to show a monthly increase and deposits are increasing. Deposits
in the five larger banks of Birmingham show
an increase of approximately $3,500,000 during the past two months. Reports of the
Birmingham clearing house for the year ending April 30, 1918, show an increase of
$43,526,287 over previous year; and, while
allowances must be made for extremely high
prices, these increases and clearings reflect the
continued business activity in this section.
The cool weather prevailing during the first
half of the month was followed by more seasonable temperatures, and agricultural conditions are very promising. Acreage in cotton




535

as well as foodstuffs has been largely increased
over previous years. The season is about two
weeks later than last year, and while farmers
are fairly well up with their work the labor test
will come in the crop-gathering season. There
has been a considerable increase in the sale of
mules and farm implements. Most of the
farmers are able to take care of their own requirements, but with money easily obtainable
the merchants are willing to provide for those
who need help.
A good stand of cotton is reported throughout the district, and if cultivation of the crop
continues as at present there is not much likelihood that there will have to be much replanting. Practically all the cotton in the south
half of the district has been sided up and
chopped out, and a good deal of the acreage is
being plowed the second time. Male labor is
very scarce in some cottonfields, and it is not
uncommon to see women plowing and children
hoeing. The final outcome of the crop value
depends largely on the solution of the labor
situation.
About 3 per cent of the Alabama acreage
sown to wheat last fall will not be harvested
mainly on account of winter killing. This leaves
approximately 140,000 acres to be harvested
in grain as compared with 93,000 acres cut
last year. Wheat in Georgia, in spite of the
winter killing, will be equal to last year's production. In Tennessee the abandoned acreage
will be about 32 per cent, compared with 35
per cent last year. The State's estimated
production of grain is 10,192,000 bushels, compared with 4,830,000 last year.
Last year's production of hay in the sixth
district was the largest on record, arid there is
an unusually large hay reserve, partially caused
by the increased production of peanut hay and
velvet beans. It is too early to predict this
year's hay crop, but indications point to a
slight increase.
There will be a decided increase in the citrusfruit acreage on account of the large number of
3roung trees coming into bearing. Several

536

FEDERAL RESERVE BULLETIN.

hundred cars of peaches have already been
shipped from Georgia points to markets of
the North and East. The Mayflower peaches
have never been placed on the eastern markets
at an earlier date, and the crop of this particular variety is far the largest this State has
ever known. Revised estimates of the total
peach crop for the year now place the number
of cars at 7/300.
The public in endeavoring to prevent a recurrence of the coal famine is beginning to
store coal, which is creating a demand on the
output, notwithstanding new mines are being
opened from time to time. A new deposit of
zinc sulphide has been discovered in Hancock
County, Tenn. The field covers approximately 10,000 acres, largely controlled by one
corporation which is at present on the field
preparing for the mining of this ore.
The industrial situation continues satisfactory, the only difficulty being the result of
labor conditions, and especially the inefficiency
due to the scarcity of labor. Negro inefficiency
is increasing, due to the growing independence
brought about by high wages and corresponding tendency to "lay off a few days/' thereby
decreasing production in some industrial lines.
Industrial leaders look forward to a mighty
boom for this section after the war. Many
industries heretofore unknown in this part of
the Nation are being built up and plans for
expansion and larger operations are being
considered by almost every industry.
The Federal Reserve Bank of Atlanta has
had under consideration the applications of
the cities of Birmingham, Jacksonville, and
Nashville for the establishment of branch
banks in those centers. The matter was referred to the Federal Reserve Board, at which
place a hearing was held on May 18.
DISTRICT NO. 7—CHICAGO.
The third Liberty loan has been successfully
placed. The banks, though prepared to subscribe to a far greater extent, were not called
upon to do so, and the resulting reserve position is a promising augury of their ability to




JUNE 1,

1018.

finance business and to assist in the flotation
of future loans.
While there has been some reduction in
deposits in this district on account of the loan,
this has not resulted in seriously crippling the
banks, as many had anticipated withdrawals
and had kept their assets in liquid condition.
Owing to the intense pace of industry, money
will rapidly find its way back to the usual channels, though, of course, the rapidity with which
this operation will take place in a given locality is
dependent upon the character of its industries.
Though complete figures are hot yet available, it is generally understood that the farming communities have figured prominently as
subscribers to the last loan. In this connection, several references are made to the strong
cash position of farmers on account of the
unprecedented prices they have received for
their products. We are told that comparatively few new farm loans are being placed and
that maturities are being met in an unusual
number of cases.
Belief in a growing conservatism among business men finds foundation in the exhibit of
total commercial failures reported to R. G.
Dun & Co. Throughout the United States for
the four weeks ending May 16, failures numbered 810, while for the same period in 1917 the
total was 1,154. In the West, covering the
district of the Chicago Federal Reserve Bank,
1918 figures were 217 for the four weeks ending
May 16 as compared with 259 for a like period
in 1917. This reduction in failures for the
entire country of practically 30 per cent and
for the West of over 16 per cent is a satisfactory
showing.
Labor is quite scarce in most lines. Wages
and salaries paid are said to be the highest in
history. There are only isolated cases of labor
unrest. Notwithstanding, however, the general full employment, the situation of building
trades employees is said to be serious on account
of the marked cessation of building and construction. Authorities stated a few weeks ago
that there were in the neighborhood of 50,000
men idle in these trades in Chicago.

r.sK 1, 101.8.

FEDERAL KESEKVE BULLETIN,

Prices continue to advance in practically all
lines. Price regulation has been extended to
the leather industry. Textiles are being
eagerly bought on an ever-advancing market
with the scarcity of manufactured articles for
civilian consumption becoming more acute.
There is considerable buying for future needs
against further advances and greater scarcity.
Money rates are hard but banks are accommodating their deserving customers. Distant
maturities are not in favor, six months paper
being about the limit on which banks are willing to loan even their best customers.
Nothing has occurred to mar the brilliant
prospects for a large crop of wheat. Michigan
alone reports unfavorably in this connection,
hard freezes during the winter causing considerable damage to the wheat. There is a large
acreage of spring wheat which is coming along
in fine shape. Corn is practically all in the
ground and under continued favorable weather
conditions should be a fair crop. There is
much speculation as to the germination of seed
corn, of which there was an acute scarcity in
the desirable grades, and the farmers are awaiting with some concern the quality of the stand.
Oats acreage is large and, like wheat, has had a
very auspicious start.
The investment market has somewhat revived. Miscellaneous securities are in small
supply and strong demand. Brokers look for
a good resumption of business if certain approaching maturities are refunded in the usual
market. We find investment bankers hopeful
for a fair business in three to five year industrials at attractive rates. There is some interest on the part of investors in longer term
bonds.
Agricultural implement manufacturers are
able to dispose of all the products they can turn
out under the existing conditions of scarcity
of labor, material, and transportation. Orders
are far in excess of their ability to supply.
Manufacturers of passenger automobiles now
working under a voluntary curtailment of output to the extent of 30 per cent are said to be
facing a curtailment of 75 per cent based on the




537

steel requirements of the United States and her
Allies. Production of 2,000,000 cars during
1918 as proposed by manufacturers is said to
represent sufficient steel to build 9,000,000
dead weight tons of shipping. What is to be
the decision of the Government is not yet
known, but reliable opinion seems to be that
nothing will be done that will operate to the
permanent serious injury of the industry.
Comparative figures of building permits
granted in April, 1918, and their value, with
those granted in April, 1917, reveal a marked
contrast. In April of this year Chicago permits
numbered 396, valued at $2,767,900, while in
April of last year permits numbered 652, valued
at $9,524,450. This reveals a percentage loss
of 70 per cent. Fifteen of the largest cities in
the district including Chicago report a falling
off of 65 per cent in valuation of buildings for
which permits were granted. Total values involved were for April, 1918, 86,733,149, for
April, 1917, $19,755,583. Only two cities in
the entire district report an increase in building
operations. This may be attributed to excessive cost of materials, and scarcity of the same,
together with unwillingness of individuals to
tie up their resources in capital expenditures at
this time and a like indisposition on the part of
banks to finance such investments.
Mines are employed at capacity due to
domestic demands, despite the fact that railroads have not yet made contracts for their
yearly supply of coal. Coal miners expect a
larger production during May than in April.
Distillers are feeling a good demand for
bonded whiskys which will continue until exhaustion of stocks on hand. Certain distilleries
are availing themselves of the adaptability of
their plants to corn drying and milling of cattle
feed. Maltsters report grave difficulty in securing the necessary labor to carry on their business. Large orders contracted during the embargo period are being filled with great effort
necessitating day and night labor.
There is no recession in the demand for dry
goods. The market is still soaring. Probably
due to the Liberty Loan, retail business was

538
retarded somewhat during April, but May
promises much activity. Stocks in jobbers'
hands are lower both in money value and actual
merchandise, while retailers have been pretty
well stocked up. Possible Government action
in the way of requisition and regulation is
ground for much uncertainty. Collections
have been excellent.
Furniture manufacturers report increases in
volume over past periods, part of which are
due to higher prices and part to the anxiety of
retailers as to ability to secure stock in the
future. Collections are good and transportation facilities more satisfactory.
Excellent credit condition is an outstanding
feature of the grocery business. Correspondents say collections are better than pre-war
period. Conservation is being practiced and
the distribution of goods is carefully made.
Volume is good, despite restrictions on flour
and sugar, and light movement of canned goods.
Hardware dealers face a scarcity of goods on
account of pledge to the Government by steel
mills of 100 per cent of their product. Building
hardware reflects the slump in building operations while other departments show a healthy
increase in volume. A very satisfactory credit
condition exists.
Maximum prices have been established in the
leather industry on the price of raw hides,
skins, and leathers. There has been increased
activity in the leather market in the last few
weeks on account of civilian, Government, and
Allied demands. Dealers are naturally not
desirous of selling under the Government maximum prices and in view of present volume
quotations will hover quite close to if they do
not reach the maximum. Collections are good.
Receipts of beef cattle have fallen off and
authorities anticipate short runs for some time
to come. Other live stock are coming to market in normal volume. Incoming stock is said
to be of excellent quality. Poor pasturage is
apprehended as forecasting light receipts during the summer. Comparative receipts of live
stock at Chicago for the four weeks ending May
18, 1918, and a corresponding period in 1917:




VE BULLETIN.

J U N E 1,1918.

I Cattle.

Calves.

Hogs.

Sheep.

L
W18
1917

I 228,250
1 202,812
i

84 783
70,800

615,374
545,9S2

214,971
202,403

There is nothing approaching general activity
in the lumber business. A volume reaching 50
per cent of normal is exceptional. Very few
dwellings are being built. The bulk of the
trade comes from rebuilding and repairing requirements. Collections are fair.
Except in foodstuffs and products containing
sugar, mail-order houses continue to record increased sales over last year. Educational measures designed to promote conservation have
effected noticeable reductions in the items mentioned. Collections are good.
m Pianos, player pianos, and talking machines
are reported in unusual demand by retailers,
owing to the recent publicity given the statement that manufacturers would voluntarily
curtail output. The latter are far behind in
filling orders and freely exercise their prerogative of choosing whom they shall sell, on the
basis of past credit experience. Collections
continue very good.
Shipbuilders are, of course, pushed to capacity by the Government needs for ships and
are being assisted at every hand to obtain
necessary material and labor. Steel business
is in the same situation, with Government requirements gradually crowding from consideration the demand for domestic consumption.
Though commonplace on account of frequent repetition, the continuance of the
urgent demand for watches and chronometers
of every description compels capacity operation of watch factories. Retailers attribute
large sales gains to purchases of precious
stones and watches.
Wool markets are featureless. While consignments find their way to central markets,
Government prohibition prevents their sale.
Committees on valuation will soon be established, when available stocks will be distributed and military needs first met.
Clearings in Chicago for the first 17 business
days of May were $1,459,000,000, being $42 r

JUNK 1,

1918.

FEDERAL RESERVE BULLETIN.

000,000 less than for the corresponding 17
business days in May, 1917. Clearings reported by 22 cities in the district outside of
Chicago amounted to §322,000,000 for the first
15 days of May, 1918, as compared with $318,000,000 for the first 15 days of May, 1917.
Deposits in the 12 central reserve city member
banks in Chicago were $878,000,000 at the
close of business May 20, 1918, and loans were
$584,000,000. Deposits show an increase of
approximately $14,000,000 over last month,
and loans an increase of approximately
$5,000,000.
DISTRICT NO. 8—ST. LOUIS.
The outlook in this district is greatly
strengthened by the favorable crop conditions.
From reports received throughout the district,
it appears that the crops generally are in good
condition. On May 1 the condition of the
winter wheat in the States included in this
district was estimated by the Government to
be 94.7 per cent, which is 10 per cent better
than the 10-year average. The acreage in
winter wheat is also considerably more than
last year, and a large output is anticipated.
The oats, rye, ha}r, and alfalfa crops are also
reported to be progressing satisfactorily. The
planting of corn has been retarded by the
recent rains, and in some sections it will be
late. However, the indications point to a
good crop. The cotton and tobacco crops are
also somewhat behind, but they are said to be
improving. The fruit has been damaged in
some portions of the district, and our correspondents state that there will be very few
peaches. There seems to be an increased
diversification of crops in this district and a
general tendency to produce an abundance of
food.
Business in this district continues active,
especially in those lines contributing articles
necessary for the prosecution of the war.
Manufacturers are more and more engaging in
Government work, and some are now doing
practically nothing else. Iron and steel manufacturers report increased activity, and manu-




539

facturers of boots and shoes, clothing, etc., are
also busy. Packers report a large increase in
business over this time last year. Some decline in the electrical line is noted, due to the
fact that very little building or extensions by
public utilities is going on. Flour mills also
report a dull business, on account of their
inability to get a sufficient supply of wheat.
Wholesalers and jobbers of dry goods report
a good business, as do also department stores
and retail merchants generally. The grocery
trade is said to be steady, but the demand for
many articles is falling off on account of the
numerous gardens. Dealers in jewelry report
a decline in their business in some directions,
while in other directions it is holding its own.
The demand for jewelry is said to come largely
from those who, by reason of a change in fortune, find themselves short of jewels and long
in cash. The reports state, as a rule, that collections are good, and some indicate that cash
transactions are increasing.
During the past month a fur sale was held
in St. Louis, the total sales amounting to
$6,250,000. It is said that in quantity of furs
presented, in the number of active buyers, and
in the actual cash returns this was the largest
fur sale ever held.
The scarcity of materials for civilian use is
affecting practically all lines, and is causing
many buyers to place orders for future delivery, believing that they will be unable to
get the goods at all later or else at higher
prices. Some concerns are restricting sales
for future delivery. Government needs are
receiving first consideration, and there is a
growing sense of responsibility among business
men to cooperate to win the war.
The transportation situation continues to
improve, but complaints are still heard on
account of delays in shipments of goods, which
is having a deterrent effect on business.
Outside of St. Louis there is very little disturbance in the labor situation in this district.
In St. Louis the situation is improving, and
with the aid of Government mediators, it is
anticipated that practically all strikas will be

540

FEDERAL RESERVE BULLETIN.

settled in the near future. Labor is well employed, and there is a good demand for both
skilled and unskilled workmen.
According to the report of the St. Louis
National Stock Yards, there was a decided
falling off in the receipts and shipments of
horses and mules during April. The receipts
and shipments of hogs and sheep were also
less than the previous month. However,
there were substantial increases both in the
receipts and shipments of cattle. In comparison with April of last year, the report also
shows increases in the receipts and shipments
of cattle, and increases in the receipts of hogs
and the sales of horses and mules, but decreases in the receipts of sheep, horses, and
mules and in the sales of hogs and sheep.
Reports from the leading cities in this district for the month of April indicate a slight
increase in building operations over the previous month, but perceptible decreases in
comparison with April of last year. Little
building is going on in this district except that
which is absolutely necessary.
Postal receipts in St. Louis, Louisville, Memphis, and Little Rock, during April, all show
decreases in comparison with the previous
month, but in comparison with April of last
year, substantial increases are shown.
The demand for money in this district has
continued good during the past month. The
bank rate to customers is still 6 per cent in
the large centers and slightly higher in the
outlying districts.
Very few of the banks in the large centers
are in the market for commercial paper, though
there is a fair demand from the country banks.
The commercial paper rate, as a rule, is 6 per
cent for all maturities. Brokers report that
the demand is mostly for short-term paper,
which is readily available for rediscount at the
Federal Reserve Bank.
Bankers and business men are now making
arrangements to meet the payment of the
excess-profits tax, which is due June 15. The
burden on the banks is expected to be greatly
relieved by the fact that many individuals




JUNK 1,

1018.

and concerns have purchased United States
Treasury certificates with which to pay this
tax.
DISTRICT NO. 9—MINNEAPOLIS.

With a favorable season crop production in
the Ninth District should roach record figures. A very large acreage of all small grains
and especially wheat has been planted, and all
crops have obtained an excellent start. Corn
and flax acreages will be less than a year ago,
and farmers have wisely devoted a part of the
usual corn ground, which they were not able
to plant because of the shortage of good seed,
to the equally important item of wheat. This
in part explains a very substantial increase
over the normal wheat planting.
Moisture conditions from the beginning of
the season have been entirely satisfactory,
especially in western North Dakota and Montana, where the crop a year ago was a failure.
A large amount of new land has been put under
plow in that portion of the district.
The very favorable crop outlook and the
fact that the moisture now in the ground is
sufficient to carry the crop well into June has
had a favorable influence upon all lines of
business, and trade at local points is good.
Banking conditions show little change.
The demand is active and rates are firm without much fluctuation from the conditions a
month ago.
No serious shortage of labor has yet developed, although good labor is scarce and most
large employers are having some difficulty in
meeting their demands. There is a prospect
that as the season advances there will be
difficulty in supplying labor both for commercial and agricultural activities.
The soundness of underlying conditions
throughout the district was well demonstrated hy the extremely liberal response of all
classes of labor to the third Liberty loan, resulting in a very heavy oversubscription and
in the oversubscription by each one of the
more than 300 different counties in this
district.

JUNE 1, 19:18.

DISTRICT NO. 10—KANSAS CITY.

FEDERAL RESERVE BULLETIN.

541

owing to liberal receipts and the promising
Agriculture.—The present agricultural out- start of the new crop. The visible supplies of
look is very promising. General weather con- corn on the four chief markets decreased about
ditions in this district continue favorable for j one-tenth during April.
the development of crops. There has been | The Government is now contracting for the
ample rain for the immediate needs of the balance of the pinto bean crop, and when this
wheat sections, and these States report that movement is over fully 50,000,000 pounds of
winter wheat has made an excellent growth pintos will have been shipped to eastern
during the past month, and the condition has markets. It is estimated that 400,000 acres
improved steadily. The old wheat supplies of these beans will be planted in Colorado
will be more thoroughly cleaned up than ever alone this spring, and indications are that the
before, and a determined effort is being made pinto will prove a valued asset to the whole
hy the Food Administration to use every avail- Southwest.
able bushel, so that the new crop season will
Live stock.—The remarkable and recordbegin with empty bins. The season has breaking advance in prices for beef steers,
started favorably for spring sown crops, j which began with the opening of the month
though cool weather has made corn develop- and continued until almost the close, is mainly
ment a little backward.
responsible for the large movement of cattle
Practically all the mills in this region con- to market. When the prices for all classes of
tinue to operate on Government orders either fat cattle reached these new high levels, shipfor the Army or for export, and have therefore pers sent in all stock they could secure to
produced little flour available for domestic | meet the strong demand, and a large part of
use. The people, however, have willingly used j the corn-fed cattle were marketed. Accordsubstitutes, and this unusual shortage in the j ingly, stocks of meat have so materially
domestic supply has caused remarkably little j increased that with incoming supplies they
comment or complaint. Mills are grinding will amply cover the demand until the incomwheat as fast as they can secure it, but reports ing of grass-fed cattle in July. Since the
from 67 in this district showed they were run- cattle movement from Texas north is about
ning at only 40 per cent of capacity during j completed, the demand for loans to finance
April as against 80 per cent a year ago, with a cattle for grazing and fattening purposes is not
resultant decrease of nearly one-half in the so strong.
flour output. Wheat stocks on the four prinThe hog market continues at a high record
cipal grain markets decreased 72 per cent level for this time of year. Receipts at the
during the past month. Local market re- seven district markets increased 30 per cent
ceipts were less than one-eighth and ship- over April, 1917. The general quality of
ments less than one-fourteenth of those last offerings was good and the weight of hogs on
year.
five markets averaged 218 pounds, as compared
The marketing of corn and oats continues with 203 pounds last year. Slaughterings were
larger than usual for this season of the year. 7 per cent in excess of those a year ago.
Receipts of corn on the local market for the
Prices on sheep and lambs during the past
past month increased two-thirds over the cor- month on the local market reached record
responding period last year and shipments were heights. Feeding and breeding stocks were in
nearly three times as great. The demand for strong favor, with but a very limited suppl}r.
corn as a wheat substitute has been sufficiently Spring lambs were exceedingly scarce, while
heavy to maintain extraordinary high prices the receipts of sheep have been below the
considering the volume of supplies. The prices demand. Conditions were generally favorable
on oats, however, have declined moderately and up to the close of the month the prevailing




542

FEDERAL RESERVE BULLETIN.

JUNE 1,

1918.

tone of the market was strong. Sheep receipts
Oil.—There were 122 more wells completed
for the seven chief centers were reported 11 in Kansas during April than in the previous
per cent greater than those a year ago.
month. Because of the fact that no so-called
Mining.—Conditions in the metal mining "freak" wells—that is, wells with 10,000 or
industry of Colorado have changed very little 15,000 barrels initial production—were brought
during the past month. The increased price in, a falling off in new production was shown,
of silver, brought about by the passage of the the decrease being 44 per cent from March.
silver bill providing for the melting of 350, However, the month proved good from the
000,000 silver dollars now in the Treasury, has standpoint that the wells completed should be
resulted in renewed inquiry for silver proper- longer and better producing ones than those of
ties, and some stimulation of this industry is freak character. High prices of crude have
expected. It is reported that shipments of caused remewed activity and interest in the
manganese ores, used in the manufacture of old fields. The estimated total production of
paint, glass, and chemical products, have the State was 84 per cent greater than that of
increased and will continue to gain steadily April, 1917.
throughout the summer, if prices remain high.
Oklahoma completions during the month of
Inquiries are being made in this State regard- April numbered 784, an increase of 75 over
ing deposits and production of chrome and March. The new production, however, made
pyrite, both iron products for use in connec- a slight decrease of less than 1,000 barrels, or
tion with the war.
3 per cent. Gushers were not plentiful and
The month of April showed a distinct slow- there were but few wells that started better
ing down in the mining industry of the Mis- than 1,000 barrels a day. The total estimated
souri-Kansas-Oklahoma district. The average production of the State was larger than that of
price on all grades of zinc blende dropped from the previous month, but still continues slightly
$45 per ton, as quoted in March, to $42. This under last year. Stocks of crude petroleum in
decrease in zinc ore prices contributed largely the Oklahoma-Kansas field at the end of
to a curtailment of producing operations, and March were about 500,000 barrels less than in
also to an increase in surplus stocks. Govern- February and have decreased nearly 7,000,000
ment cooperation has encouraged the operators barrels, or 6 per cent, since March, 1917.
A severe storm curtailed nearly all field
to some extent. A price of $75 per ton has
been set for the high grade ores, thus assuring operations in Wyoming. But 12 wells were
producers a fair profit. Government and completed during the month, with a new daily
allied contracts will probably be placed in the production of 795 barrels, as against 17 comnear future. The production of the district pletions in March with production of 1,000
for the first four months of this year as com- barrels per day. It is reported that large
pared with the corresponding period last year companies have become interested in the
decreased nearly 14 per cent and the value of Wyoming fields and are investing great sums
of money to develop the deposits. An inthis output decreased over 40 per cent.
The lead ore market has also shown some creased future production is looked for in that
decline, opening at $85 per ton and closing by State.
the end of the month at $80. Surplus stocks I Lumber and construction.—Conditions are
decreased slightly during April. The total j very uncertain in the lumber market at present,
output of lead gained 9 per cent for the first i but there is a steady and strong demand for
four months this year over the same period in I all kinds of lumber, which is not noticeably
1917, but the value decreased about 18 per I retarded by the high prices. It is reported
1
that from the standpoint of wholesale dealers
cent.




JUNEl, 1918.

FEDERAL RESERVE BULLETIN.

conditions were never more favorable. They
advise that the bulk of orders are from the
country yards, and as crop conditions have
greatly improved, the demand from the rural
districts is expected to be heavy. Shipments
from the mills continue quite slow and uncertain, although the car situation is greatly
improved. This is attributed to the facts that
the mills are still running on reduced operations
and that long-standing orders from eastern
points are being filled. Reports indicate that
most of the retail dealers are carrying normal
stocks.
Building permits issued in the 10 largestcities of this district for April were nearly onefourth less in volume than those issued during
the same month last year. The estimated cost
of such proposed constructions was about
$2,500,000, an increase over the preceding
month but a decrease of 35 per cent from
April, 1917. Only 3 cities showed a gain in
this month's building valuations as compared
with those of the corresponding month a year
ago.
Labor.—Labor conditions have been very
quiet and settled. But a few small strikes
were reported during th e past month. Government cooperation has been extended to the
State free employment bureaus. Although
the demand for farm labor is steady and insistent, it is predicted that all needed hands
will be secured. However, Kansas alone is
reported in need of 85,000 men for farm work
in the harvest season. All cities in that State
are to be requested to furnish a census of their
man power and its availability for a farm draft.
In Nebraska, under a new law, all men over
16 years of age must register the first week in
June and become liable to farm labor.
Mercantile.—General merch andise activities
for the 3'ear ending April 1, 1918, compared
very favorably with the annual period ending
April 1, 1917. The seven States (wholly or
partially within this district) show an average
increase of over 2 per cent in purchases, a small
decrease in indebtedness, and a gain in payment activity averaging 3.2 per cent.




54$

The Government now plans to take over the
implement control, and all dealers will go under
license June 20. General reports indicate that
except for harvesting machine^ the present
demand for farm implements is exceptionally
light.
Manufacturing is active. Jobbers in all lines
advise that trade is very good with a steady
call for seasonable goods, greatly stimulated by
warm weather. Merchants are purchasing
goods for future delivery from the wholesalers.
Sales of shoes are large, with higher prices
predicted for next fall. Trade in groceries and
drugs is normal and orders continue in good
volume. Failures are few and collections fair
to good.
Financial.—Receipts at the post offices in 11
of the largest cities in the district for the
month of April as compared with the corresponding month last year showed a substantial
increase of 28 per cent.
Bank clearings as reported in the 17 principal
cities for the past month gained 47 per cent
over April, 1917. The clearings at Omaha were
81.2 per cent in excess of those a year ago, the
second largest increase in the entire United
States.
The third Liberty loan was a great success,,
with a subscription of over $4,000,000,000 from
17,000,000 persons. The Kansas City district,
| with a quota of $130,000,000, subscribed over
| $200,000,000, or 156 per cent of its quota, and
j was credited second among the 12 Federal
j Reserve districts.
Demands for money continue strong. Rates
of discount have advanced and a new schedule
with increased rates went into effect May 20.
DISTRICT NO. II—DALLAS.

The generally favorable features which for
some time past have characterized the commercial situation in this district still obtain,
and with few exceptions our correspondents
are optimistic concerning the business outlook
in the immediate future. Farming conditions
show a further improvement in the past 30 days, .
the result of good rains over practically all of

544

FEDERAL RESERVE BULLETIN".

the agricultural belt, and the drought seems to
have been broken over a large portion of the territory which has suffered for many months past.
Reports as to lack of sufficient moisture are the
exception at this time, rather than the rule.
Farmers have planted seed and cotton and are
getting fairly good stands. Corn and other
feed crops are, for the most part, in good condition. The season is late on account of dry
weather and the fact that the month of April
was unseasonably cold. The small-grain crop
shows great improvement with the fine rains,
and while actual figures as to the condition of
this crop at this time, as compared with 30 days
ago are not at hand, we believe that the improvement will make the yield fully up to, if
not exceeding, expectations.
From the rice-growing belt of south Texas
our correspondents advise that the planting
season has been ideal, and with anything like
normal conditions the yield of rice will be
unusually heavy.
Onion shipments from the Laredo section
have so far aggregated about 1,200 cars. Last
year's shipments amounted to about 1,800 cars.
Recent rains there have damaged the crop
remaining unshipped and a great many of the
shipments are going to market in bad condition. The cost of production this year has
been heavier than formerly, and but few of the
growers will make money; many of them will
sustain large losses.
Our correspondent at Nogales reports that
the first shipments of chick peas (garbanzo)
have arrived at that interior port, and as this
is the money crop of the west coast of Mexico,
and most of the growers carry their accounts
with banks in that section, it will mean a considerable activity in business there. The crop
of chick peas this year will be unusually large,
and it is expected will be sold at satisfactory
prices.
The first warm weather of the season has obtained during this month, and as the result retailers of summer merchandise have enjoyed a
good business. Retail trade in other lines is
also in good volume, and fully up to expecta-




JUNE 1,1918.

tions. Wholesale lines, such as dry goods and
notions, are in good demand, and wholesalers
and jobbers have all the orders they can conveniently handle. In seasonal lines, such as
seeds, farm implements, harvest supplies, etc.,
trade is unusually brisk. Activities with all
manufacturing industries are well maintained,
and their operations are restricted only by the
continued scarcity of labor and uncertainty in
delivery of raw materials. Collections are fair
to good.
Subscriptions to the third Liberty loan will
run slightly more than $115,000,000. The
banking institutions of this district have demonstrated their patriotism in this great movement, and notwithstanding that we are approaching the borrowing season, they have
responded unselfishly to the war demands.
An early analysis of the reports of conditions
from the comptroller's call of May 10 shows a
decrease of deposits and increase in loans.
Demand with this bank continues unusually
heavy, our loans showing an increase of some
$3,000,000 in the past 30 days. Interest rates
are steady to firm. Within the past 30 days a
large portion of the $5,000,000 special Government fund for drought-relief purposes has been
distributed in the west and southwestern portions, and the deposits have been of great relief
to the banking institutions there. The demand with banks in the west and southwest,
where the drought was so serious, already
heavy, has been further increased by the good
rains over that territory and the necessity of
financing farmers and stock men to get a new
start.
The Red Cross campaign is now actively
under way and we confidently believe the
quota of this district will be fully raised, if not
largely oversubscribed. This statement is
based on the previous unselfish and patriotic
response of banking institutions, firms, and
individuals in this district to the Government's
program.
At the risk, probably, of repetition, it may
be stated that the building industry is generally
inactive and below normal, a decrease in val-

JUNE 1,1918.

FEDERAL BESERVE BULLETIN".

uation of 29 per cent in permits issued being
shown at the principal cities in the month of
April. Construction of ships at Orange and
Beaumont, however, has made an unusual
activity at these places, and business in all
lines there is at capacity, reports indicating
that it is difficult to provide proper housing
facilities for the influx of workmen and their
families.
Reports from New Mexico indicate that
cattle and sheep are in poor condition, and
there will be a small crop of calves and lambs.
Practically all of the range country in Texas
has had good rains and the present outlook
in the cattle industry in such sections is more
encouraging than for some time past. Large
sales of steers have been made in Arizona for
June and July delivery, and with the reduction
in the amount of feed necessary, the result
of good rains, cattle men are more optimistic
concerning the immediate future in the industry.
Post-office receipts at the principal cities of
the district show an increase of 60.1 per cent
for the month of April over the same month
last year. This is the largest increase reported
in several months.
The recent rains have created an active
demand for farm labor and the shortage
which has existed for several months past has
grown more acute. There is no material
change in the situation as regards skilled lines.
There is also a fairly good demand for carpenters and other building mechanics. The
general situation as regards labor in this
district is indeed serious. Practically every
line of business is suffering from the shortage
of help, and as the harvest season approaches
the situation will be intensified.
Our correspondent at Tucson reports that
producers of copper in that section of Arizona
are complaining on account of the maximum
price of 23J cents per pound which has been
set on that metal. Owing to the increased
cost of production, they claim this price leaves
them no profit.




545

Trade with Mexico is improving, and were
export and passport regulations not so rigid
business would be much better. Merchants at
border points are handicapped by these export
regulations. This has had a tendency to reduce their volume of business, on account of
the difficulty experienced in securing export
licenses.
Texas lumber manufacturers report that
conditions at the sawmills are such that they
are able to produce only about 50 or 60
per cent of their normal capacity. Cars are
in fairly good supply and very little complaint
is being made on account of lack of equipment.
The demand for lumber is largely in excess of
production and has been for some weeks.
Excepting for the scarcity of labor essential
to the output of the mills, the situation in
Texas lumber trade is in fairly good condition.
The lumber mills of New Mexico are working
to their full capacity and have more orders
than they can fill.
DISTRICT NO. 12—SAN FRANCISCO.

The condition of grain in all parts of the district, except in California, is good. A larger
acreage was seeded, and the increase in production will be considerable. On May 1 the condition of winter wheat in Washington, Oregon,
and Idaho was better than the average for the
past five years. In California wheat acreage
on May 1 was 416,000, with an estimated production of 7,076,000 bushels, or 349,000 bushels
less than last year, the decrease being due to
lack of spring rains. In the Imperial Valley
harvesting of wheat and barley has started,
100,000 tons of barley and 10,000 tons of wheat
being the estimated production. Recent rains
in Oregon, Washington, and Idaho have greatly
improved the condition of all grains. The
winter wheat acreage is estimated at 1,850,000
in Washington and 553,000 in Oregon. About
50,000 acres are planted to rye in Washington,
Oregon, and Idaho, from which 896,000 bushels
are expected. Hay acreage is about the same
as last year and the condition is normal.

546

FEDERAL RESERVE BULLETIN.

Ranges in the Pacific Northwest are in good
condition, but in California, Arizona, and Nevada are rapidly drying.
Almonds, pe4aches7 and apricots were damaged by frost in some localities, but a yield of
deciduous fruit better than the average is expected. In Washington apples are in good
condition, a heavy crop of most varieties being
indicated. The navel orange season just closed
in California was the lightest in several years,
only 10,727 cars having been shipped from November 1, 1917, to April 29, 1918. Valencias
are now being shipped. The crop is about
three-quarters normal, and it is estimated that
12,000 cars will be shipped by October 31, 1918,
bringing total shipments of citrus fruits for the
season to 27,000 cars compared to 50,077 cars
last season. The orange groves now have a
very heavy bloom, and with favorable weather
next season's crop is expected to equal if not
exceed the 1916-17 bumper crop.
It is estimated that 120,000 acres will be
sown to rice in California this year, compared to
90,000 acres in 1917.
Reports indicate that there will be little if
any shortage of water for irrigation during the
summer.
The wool markets of the district have been
very unsettled, due to the uncertainty of the
Government's action. The situation has
cleared since May 1, through the announcement that the Government would take the
entire clip at the prices prevailing in the Boston wool market last July. This will net
growers from 45 to 60 cents per pound, according to the quality. The absence of speculators and buyers from the market during the
past winter placed the whole burden of financing
woolgrowers upon the banks, who, fortunately,
through the facilities for rediscount afforded
by the Federal Reserve Bank, were able to
care for their requirements. The growers generally are satisfied with the prices, and wool is
beginning to move in considerable quantities.
The flocks came through the winter in excellent shape and a high percentage of iambs was
saved. The Government report of January 1,




JUNE 1,1918.

1918, showed an increase in flocks in Oregon,
Idaho, and Washington of 2\ per cent during
1917.
Alaska salmon packers expect a normal pack
of about 6,000,000 cases. The pack of red
salmon on Puget Sound, Columbia River, and
in British Columbia is expected to be less than
1,000,000 cases.
Conditions in the lumber industry have
improved. The car supply at present is adequate, but lumbermen anticipate another car
shortage in July. Two months of operation
under the eight-hour law have shown 9.81 per
cent decrease in output and 25 per cent increase
in cost of production. The placing of 10,000
soldiers in various Oregon and Washington
lumber camps had a very stabilizing influence.
Agitators are not so much in evidence, and the
attitude of the laborers is said to be more favorable to increased production. The placing
of the Government's order for 100,000 box
cars, 3,000 of which will be built in Oregon
and Washington, will utilize considerable lumber from this district.
The control exercised by the United States
Shipping Board over the movements of vessels
and Government requisition have swept the
ports of the district practically clear of vessels
available for charter. The agreement with
Japan whereby the Government obtains 250,000
tons of ships in exchange for an equal tonnage
of ship steel will create a shortage of tonnage
for oriental trade, as most of the Japanese
ships will go to the Atlantic to carry men and
supplies to Europe.
Steel and wooden shipbuilding continues to
lead all other industries in the district. Launchings are of almost weekly occurrence, and several shipbuilding records have been broken
recently. Such achievements, apart from their
importance in aiding the early increase in
available tonnage, illustrate the improved
spirit of the workmen in the shipyards, for it
is on their efforts that the shipbuilding program depends for results.
The concrete steamer Faith had a successful
ocean trial trip on May 15 and will go to sea

JUNE 1,

1918.

FEDERAL RESERVE BULLETIN.

loaded about May 20. The large production
of cement on the Pacific coast, the California
production in 1916 being 5,299,507 barrels,
and the location of steel mills in each of the
coast States for rolling the necessary reinforcing material make possible the economical
construction of concrete ships on a large scale
on this coast.
Petroleum production in California during
April was 8,294,137 barrels, an increase over
March of 262,260 barrels. April consumption
was 8,623,006 barrels. Storage stocks decreased 328,869 barrels to 30,502,447 barrels.
The successful development of a process for
extracting potash from the brine of Searles
Lake, San Bernardino County, is claimed and
a large plant has been erected. The previous
dependence of America on Germany for this
salt is shown by the following figures of
imports: 1913, 267,970 tons, average price,
$38 per ton; 1916, 10,628 tons, average price,
$400 per ton.
American production in 1916 was 9,720
tons. Other sources of potash in California




547

are Owens Lake, Inyo County, and extensive
beds of kelp off the southern California coast.
April bank clearings for 20 principal cities
of the district increased 21.9 per cent over the
corresponding month of 1917. The greatest
gain was shown by Tacoma with 71.1 per cent,
followed by Seattle with 64.2 per cent, and
Portland with 41.4 per cent.
Building permits for the same cities declined
22.3 per cent.
The district's quota for the third Liberty
loan was $210,000,000, which was oversubscribed nearly 40 per cent. The total number
of subscribers was far in excess of previous
loans, showing a wide distribution of the
bonds, and demonstrating that the people of
the district are loyally supporting the conduct
of the war. The position of the banks is
strengthened by the heavy disbursements of
the Shipping Board and other Government
departments in the district, which amount to
nearly $50,000,000 per month.
The situation throughout the district is one
of great industrial and agricultural activity.

548

FEDERAL RESERVE BULLETIN.

GOLD SETTLEMENT FUND.

JUNE 1, 1018.

Total deposits of gold in the two funds
from April 18 to May 16, principally by the
Chicago and San Francisco banks and the
Federal Reserve agent at Boston, amounted
to $69,668,700 against total withdrawals of
gold of $7,640,600, resulting in a net gain of
$62,028,100 in the combined funds. The combined banks' and agents' balances crossed the
billion dollar mark oil May 3, aggregate holdings at the close of business on that day
amounting to $1,004,331,200. On May 16
the total of the two funds was $1,036,495,500, an increase of 28.2 per cent since
January 1, 1918.
Below are given figures showing changes in
the fund between April 19 and May 16, both
inclusive.

Operations through the gold settlement
fund for the four-week period from April 18
to May 16, 1918, were the heaviest of any period during the current year, due largely to
Government fiscal operations, including transfers of funds largely for the payment of the
second issue of certificates of indebtedness
maturing on May 9, and also to payment in New
York exchange for Liberty loan bonds. Combined clearings and transfers for the four-week
period amounted to $3,785,405,000, averaging
$946,351,250 per week, compared with a like
average of $846,448,000 for the preceding four
weeks, an increase of 11.8 per cent in the volume of average weekly transactions. Transfers of funds between the banks amounted to
$443,300,000, 67 per cent of the total represent- Amounts of clearings and transfers through the gold settlement fund by Federal Reserve Banks from Apr. 19 to May
ing transfers to the account of the New York
16, 1918, both inclusive.
bank, mainly for the credit of the Government,
[In thousands of dollars.]
while transfers from New York comprised
Total
Balances
about 24 per cent of the total transfers made.
clearings. adjusted. Transfers.
Of the aggregate transfer transactions about
91 per cent affect New York's account.
Settlement o—
f
897,166
75,000
74,319
Apr. 25
769,773
136,000
65,998
Changes in the ownership of gold in the
May 2
819,746
81,600
64,189
May 9
855,420
63,530
150,700
banks7 fund through transfers and settlement
May 16
443,300
3,342,105
268,036
Total
during the four-week period amounted to
11,021,954
1,161,595.
849,263
1.45 per cent of the total obligations settled, Previously reported for 1918
14,364,059 1,117,299 1,604,895
Total since Jan. 1,1918
24,319,200 2,154,721 2,835,504.5
Total for 1917
as against 3.08 per cent for the preceding fourweek period. Net changes in the ownership
Clearings
of gold since the commencement of the operaand
transfers.
tion of the fund May 20, 1915, to May 16, 1918,
amount to 1.22 of the total obligations settled Total for 191S to date
15,968,954
27,154,704.5
Total for 1917
during the period. St. Louis and Cleveland Total for 1916
5,533,966
1,052,649
show the largest gains through the shift- Total for 1915
Total clearings and transfers from May 20, 191.5, to
ing of credits in the fund, while New York and
49,710,273.5
May 16,1918
Atlanta show large decreases.




549

FEDERAL RESERVE BULLETIN.

JUNE 1,1918.

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

Federal Reserve Bank.
Decrease.

B oston...
NewYork
Philadelphia
Cleveland....
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas......
San Francisco....

570,487

. . . .

4,388
. .

Balance
to credit
Ar>r. 18,
1918, plus
Increase. net deposits
of gold
since that
date.

Total.

574,875

Balance
Mav 16,
1918.

Decrease.

61,348
53,025
60,802
44,444.7
9.107.4
17;679
86,322
18,212
12,180
39,619.2
1,924.9
15,950

48,979
73,251
25,602
17,122
51,259.5
16,382.5
87,901
574,875

63,885
22,336
55,729
60,754.7
6,850.4
8,993
81,739
37,421
18,572
35,848.2
7,397.9
21,088

420,614.2

58,463
90,258
105,657

.

Total changes from
Mav 20, 1915, to May
16,1918.

From Apr. 19,1918, to May 16,1918, both
inclusive.

Total to Apr. 18,1918.

420,614.2

Increase.

Decrease.

2.537

30,689
5,073

16,310

2,257
8,686
4,583

Increase.

61,000

601,176

85,185
121,967

6,645

40,293
68,668
44,811
23,514
47,488.5
21,855.5
93,039

19,209
6,392

3,771

5,473
5,138

55,059

55,059

607,821

607,821

Gold settlement fund—Summary of transactions from Apr. 19, 1918, to May 16, 1918, both inclusive.
[In thousands of dollars.]

Federal Reserve
Bank o—
f

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

Aggregate
Transfers.
deposits
Balance
Gold
and
last
drawals
Gold
statement, with- deposits.
and
transfers
Apr. 18, drawals.
transfers
from
to agent's agent's
1918.
Debit. Credit.
fund.
fund.
66,990
88,670
51,164
500
41,289.5 1,227.3
7,501.9
2.5
12,635
100
59,093
100
18,368.4
994.2
7,480
29,975.8
6,918.7
516.6
15,533

5,516.6
35,000

4,358
4,355
12,138
4,382.5
4,108
14,394
42,809
8,837.8
4,700
9,643.4
522.8
15,417

405,619.3 3,440.6

Total

4,358
4,355
5,753
4,382.5
4,108
1,894
15,907
1,028
700
1,643.4
522.8
15,017
59,668.7

110,730.6

125,725.5

10,000
40,000
2,500
1,227.3
2,502.5
9,350
15,640
8,994.2

Weekly settlements, Apr. 25 to May
16,1918, both inclusive.
Net
debits.

Total
debits.

12,000
104,800 297,000
18,000 | 12,000
62,000 I.
27,000 ! 10,000
500 I.
112,000 ! 50,000
13,300
""i"666"| 4,000
i,
51,000
7,000
4,000
60,000 41,000

10,475
222,889
12,912

276,873
1,141,629
375,352
234,755
154,495
122,143
424,826
218,759
107,535
122,950
58,220
104,568

267,410
918,740
376,279
313,065
169,238
113,957
482,243
224,668
110,927
170;179
66,693
128,706

443,300

268,036

3,342,105

3,342,105

443,300

10,267
6,797
4,696

Total
credits.

Balance
in fund at
close of
business
Net
May 16,
credits.
1018.
1,012
13,839
78,310
14,743
2,081
57,417
12,706
8,088
47,229
8,473
24,138

63,885
22,336
55,729
60,754.7
6,850.4
8,993
81,739
37,421
18,572
35,848.2
7,397.9
21,088

263,036 ! 420,614.2

Federal Reserve agents1 fund—Summary of transactions from April 19, 1918, to May 16, 1918, both inclusive.
[In thousands of dollars.]

Federal Reserve agent at—

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




WithDeposits
Balance
Gold
drawals through
Gold
last statewithment, Apr. drawals. deposits. for trans- transfers
fer to
from
18,1918.
bank.
bank.
10,000

11,500
25,000
80,619
70,000
27,000
37,670
160,315.5
34,903.6
24,500
42,360
584
54,396

1,000
500

568,848.1 |

4,200

6,385

500

12,500
26,962
7,809.8
4,000
8,000

1,000
1,200

400

10,000

66,056.8

10,000
40,000
2,000
2,500
9,250
15,540
8,000
5,000
15,000 |

Total
Total
withdrawals. deposits.

6,885
13,500
27,462
7,809.8
5,000
8,000
1,600

107,290 | 70,256.8

Balance at
close of
business
May 16,
1918.

5,000
15,000

31,500
65.000
75^734
70,000
29,500
33,420
148,393.5
35,093.8
19,500
34,360
5,584
67,796

117,290

615,881.3

20,000
40,000
2,000 i
2,50©
9,250
15,540
8,000

550

FEDERAL RESERVE BULLETIN.

JUNE 1,1918.

OPERATION OF THE FEDERAL RESERVE CLEARING SYSTEM, APRIL 16 TO MAY 15,1918.
Items drawn on banks Items drawn on banks Items drawn on banks
in district outside Fedin Federal Reserve city
in other districts (daily
eral Reserve city (daily
(daily average).
average).
Number.

Amount.

Number.

Amount.

Number.

Amount.

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
S t. Louis
Minneapolis
Kansas City
Pallas
San Francisco

5,214
7,850
13,631
2,021
1,524
1,809
8,538
2,055
2,422
2,084
1,050
1,371

§17,029,311
77,676,088
20,779,211
5,074,976
4,866,762
3,060,882
23,131,000
7,576,754
6,974,504
7,751,273
1,326,810
3,124,814

42,795
50,353
24,702
27,358
26,260
13,069
24,362
16,605
13,203
17,432
13,184
17,738

S6,165,182
40,995,148
3,759,149
19,592,562
7,179,808
2,931,285
6,916,000
5,192,516
1,429,761
9,629,021
4,898,863
5,410,225

4,710
26,704
11,845
2,294
2,439
1,807
2,131
176
916
841
507
518

$7,795,226
16,349,400
12,356,958
4,281,935
4,739,295
3,719,786
924,000
1,421,098
1,299,722
3,414,888
892,401
1,228,654

Totals:
Apr. 16 to May 15,1918
Mar. 16 to Apr. 15,1918
Feb. 16 to Mar. 15,1918
Jan. 16 to Feb. 15,1918
Dec. 16,1917, to Jan. 15,1918
Nov. 16 to Dec. 15,1917
Oct. 16 to Nov. 15,1917
Sept. 16 to Oct. 15,1917
Aug. 16 to Sept. 15,1917
July 16 to Aug. 15,1917
June 16 to July 15,1917
May 16 to June 15,1917
Apr. 16 to May 15,1917
Mar. 16 to Apr. 15,1917

49,569
55,034
51,408
46,207
48,549
47,678
47,574
40,591
36,306
36,727
38,476
37,898
33,767
31,162

178,372,385
159,441,188
153,701,375
153,847,568
148,033,108
171,723,439
166,552,773
128,271,466
100,331,694
98,075,919
109,722,256
97,322,883
87,370,859
60,288,002

287,061
271,506
259,531
227,312
253,458
240,756
232,723
212,935
182.191
175;625
182,622
179,193
171,093
168,607

114,099,520
98,201,962
113,134,162
80,248,466
89,065,135
84,440,761
64,296,210
47,476,204
41,323,621
40,353,278
41,004,720
3S,599,461
36,473,163
32,666,959

54,888
53,725
51,259
44,654
49,342
46,353
45,393
40,216
32,564
31,273
33,941
33,150
33,428
32,008

58,513,363
53,391,691
48,556,709
42,852,372
52,175,578
58,458,952
53,089,827
44,984,581
40,648,168
37,981,022
46,762,698
38,314,393
36,836,934
34,693,542

Items handled by both
bank a n d branches
(daily average).

Number.
Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas City...
Dallas
San Francisco.
Totals:
Apr. 16 to May 15,1918
Mar. 16 to Apr. 15,1918
Feb. 16 to Mar. 15,1918
Jan. 16 to Feb. 15,1918
Dec. 16,1917, to Jan, 15,1918.
Nov. 16 to Dec. 15,1917
Oct. 16 to Nov. 15,1917
Sept. 16 to Oct. 15,1917
Aug. 16 to Sept. 15,1917
July 16 to Aug. 15,1917
June 16 to July 15,1917
May 16 to June 15,1917
Apr. 16 to May 15,1917
Mar. 16 to Apr. 15,1917




Total (exclusive of items
drawn on Treasurer of
United States) (daily)
average).
Number.

1,214
429
289
160
228

Amount.

$7,927,197
1,524,419
174,229
348,000
409,213

3,240

3,675,041

"2 ,"734"

*1," 083," 505"

8,294
7,793
7,700
7,128
7,718

15,141,604
8,942,976
6,413,071
5,836,958
3,402,035

Amount.

Items drawn on Treasurer of United States Number of Number of
(daily average).
member
nonmembanks in ber banks
district. on par list.
Number.
Amount.

52,719
84,907
50,178
32,887
30,652
16,974
35,191
19,064
16,541
23,597
14,741
22,361

§30,989,719
135,020,636
36,895,318
36,876,670
18,310,284
9,886,182
31,319,000
14,599,581
9,703,987
24,470,223
7,208,074
10,847,198

§2,729,112
4,855
31,418
12,547,349
4,500
1,848,904
1,029
858,082
1,136
351,544
2,240
2,408,636
5,952 I
2,320,000
4,027 i
757,370
407 I
84,942
2,588 I
430,470
1,131 I
288,811
1,488 !
6,302,965

414
684
627
775
540
397
1,156
484
808
967
675

249
365
319
628
287
320
2,284
1,002
1,070
1,559
269
1,123

399,812
388,058
369,898
325,301
359,067
334,787
325,690
293,742
251,061
243,625
255,039
250,241
238,288
231,777

365,126,872
319,977,817
321,805,317
282,785,364
292,585,856
314,623,152
283,938,810
220,732,251
182,303,483
176,410,219
197,489,674
174,236,737
160,680,956
127,648,503

60,771
59,228
58,991
48,224
38,130

8,113
8,059
8,013
7,972
7,909
7,823
7,826
7,747
7,718
7,683
7,666
7,651
7,634
7,625

9,475
9,450
9,425
9,319
9,268
9,321
9,210
9,052
8,934

33,806 I

30,426
26,797
23,492
19,533
19,100
16,344 i
15,925 I
12,582 I

30,928,185
31,563,675
25,827,757
21,316,033
•21,116,293
27,179,053
17,496,974
13,518,566
11,006,515
9,701,569
11,637,899
4,414,508
3,597,865
2,643,408

8,789
8,926
8,607

.TUNE 1,1918.

FEDERAL RESERVE BULLETIN.

551

DISCOUNT OPERATIONS OF THE FEDERAL RESERVE BANKS.
Discount operations at the Federal Reserve
Banks for the month of April totaled $2,178,410,479, compared with $759,112,515 for March
and $2,681,165,854 for October, 1917, the
month preceding the closing of the second
Liberty loan. Of the total discounts for the
month under review, $1,811,419,864, or 83.2 per
cent, was represented by war paper, including
members7 collateral notes and customers' paper
secured by Government war obligations, or considerably less than the corresponding amount
in October of 1917. Of the total amount of
war paper discounted by the banks 75 per cent
is reported by the New York bank.
Discounts of member banks' notes secured
by eligible paper totaled §34,233,979, the
Federal Reserve Banks at Chicago and Kansas
City accounting for $29,052,395, or about
85 per cent, of the total shown. Trade
acceptances discounted during the month
aggregated $10,171,425, nearly all in the domestic trade, reported by 11 banks. Other
discounts not secured by Government obligations totaled $323,359,411, the New York and
Richmond banks reporting about 54 per cent
of the total. Fifteen-day paper, i. e., paper
maturing within 15 days from date of discount
with the Federal Reserve Bank, aggregated
$2,027,048,792, or about 93 per cent of the
total discounts for the month.
By far the greater portion of the paper,
namely, 86.8 per cent, was discounted at 4
per cent, which was the uniform rate charged
by all the banks during the month on 15-day
war paper, while the calculated, average rate
on paper discounted during the month b}^ all
Federal Reserve Banks was 4.23 per cent, the
lowest average rate, 4.05 per cent, working
out for the New York bank and the highest
rate, 4.88 per cent, for the Minneapolis
bank. Owing largely to the short average




maturity of the paper discounted by the
New York bank, 7.22 days, the like average
for all the banks works out at 11.25 days only,
the Minneapolis bank, as in the case of the
average discount rate, showing the highest average under this head. Further particulars
along these lines, also discussion of method used
in computing these averages, are found on p.
553 of this BULLETIN.
On the last Friday of the month the banks
held a total of 901.7 millions of discounted
paper, as against an aggregate of 583.2 millions held on the last Friday in March and of
35 millions held on the corresponding date in
1917. Of the total discounts on hand the
share of war paper, i. e., member banks7 collateral notes and customers' paper secured by
United States war obligations, was 70.8 per
cent. At the Boston bank this share was about
82 per cent and at the New York bank as high
as 87.5 per cent. In addition to the discounted
war paper, four banks report also about 4.2
millions of certificates of indebtedness and Liberty bonds held under 15-day repurchase agreements with nonmember institutions and
included with other holdings of United States
securities.
Trade acceptances on hand about the end
of April show the record total of 19.2 millions7
of which about 1.5 millions represent the holdings of discounted foreign-trade acceptances.
All the banks except Dallas report holdings of
domestic trade acceptances, the Cleveland and
St. Louis banks leading in the amounts held.
Agricultural paper of all maturities totaled
about 9.4 millions, or about 1 per cent of the
total discounts held, while live-stock paper aggregated 30.1 millions, over one-half of this amount
being reported by the Kansas City bank.

552

EEDEEAL RESERVE BULLETIN.

JUNE 1,1918.

Bills discounted during April, 1918, distributed by classes.
Member banks' collateral
notes.
Customers1
paper secured
by Liberty Secured by
bonds or
United States Liberty bonds Otherwise
or United
t certificates of
States cersecured.
I indebtedness. tificates of
indebtedness.

Federal Reserve Banks.

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

S3, 746,698

816,372,800
11,237,688 1,355,966,810
886,401
28,176,700
1,
4, 704,362
54,229,800
472,498
82,804,243
15,
29,847
20.192,300
743,493
83,077,500
180,034
37,593,791
8,141
9,751,600
133,516
35,695,725
357,989
29,286,550
19,695,300
76.078

Total

! 38,576,745 * 1,772,843,119

i Including §221,104 in the foreign trade.

2

Trade
acceptances.

SI, 523,850
825,000
485.000
1,634,500
51,000
25,902,310
400.234
3,150,085
262,000

S287,007
12,696,793
762.997
1,890,014
1,063.149
436,300
314,103
1,630,990
28,039
378,147

34,233,979

Includes $771,700 rediscounted for nonmember banks.

3

All other
discounts.

S3,563,599
89,955,026
11,556,490
28,970,605
84,081,663
13.159,086
15,645,774
23,588,072
7,695,738
15,111,288
6,464,010
17,793,860

Total.

330,493,954
.,460,681,317
42,382,588
90,279,781
185,056,053
33,868,533
125,683,180
62,992,887
17,883,752
54,774,500
36,370,549
37,943,385

10,171,425 3322,585,211 2,178,410,479

Includes SI,554,459 of bankers' acceptances.

Amounts of discounted paper, including member banks' collateral notes, held by each Federal Reserve Bank on the last
Friday in April, 1918, distributed by classes.
[In thousands of dollars; i. e., 000 omitted.]

Agricultural
paper.

Banks.

Live-stock
paper.

Customers'
paper secured by
Liberty
bonds or
United States
certificates
of indebtedness.

Boston
Philadelphia .
Pichmond
Atlanta
Chicago .
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
Per cent

.

9,379
1.0

.

1

. .

64
23
953
210
3,261
90
1,188
624
1,530
1,436

Secured by
Liberty
bonds or
United States Otherwise
secured.
certificates
of indebtedness.

68
25
189
427
96
3,064
15,355
5,347
5,577

34,462
81,914
12,177
6,726
3,490
54
5,924
1,772
143
239
415
315

10,133
297,933
15 629
21,802
21,430
10 223
47,5Q8
22 924
4 867
14,745
13 033
10,904

30,148
3.3

147,631
16.4

491,221
54.5

Includes 8287,000 in the foreign trade.

During the month, largely as the result of
accession to membership of State banks and
trust companies, the number of member banks
increased from 8,083 to 8,149. The total number of member banks accommodated through
discounts during April was 2,100, or 25.8 per
cent of the total number of members reported
at the end of the month. The following exhibit gives the number of member banks by
Federal Reserve districts at the end of April
and the number of discounting members for
the same month:




Member banks' collateral
notes.

2

500
154
95
494
20
15,954
2,319
105

Trade acceptances.

11,284
2 3,324
1 383
4,050
1,772
873
610
2 974
71
2,154
696

19,641
2.2

19,171
2.1

All other
discounts.

Total.

7,928
50,931
6,118
25,448
19,169
8,837
14,779
15,800
5 258
8,476
5,737
16,071

54,307
434,256
35 351
58,212
47,333
20 406
88,553
43 656
14 591
43,912
26 167
34,999

184,552
20.5

901,743
100.0

Includes $1,220,000 in the foreign trade.

Federal reserve district.

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

Number of Number of
member banks disbanks on counting
during
Apr. 30.
April.
416
684
647
773
542
400
1,157
488
810
974
673
585

138
278
135
118
181
112
237
112
174
221
234
160

8,149

2,100

JUNE 1,1918.

553

FEDERAL RESERVE BULLETIN.

AVERAGE RATE AND MATURITY OF PAPER DISCOUNTED BY THE RESERVE BANKS.
Following the installation of tabulating machines, the Board is able for the first time to
show average maturities and average discount
rates of bills discounted during the month at
all Federal Reserve Banks. For the purpose of calculating these averages the total
discounts for the month were arranged into
eight groups, according to rates of discount
charged, and in each group the amounts of
paper discounted and the corresponding unearned discount were shown. For any such
group the total unearned discount multiplied
by the number of days in the year (365 in the
case of the New York and Boston banks and
360 in the case of the other banks), divided by
the rate gives the equivalent amount, which
discounted at the specified rate for one day,
yields the given discount. Having found for
each rate group the equivalent amount when
discounted for one day, the sum of these respective amounts is the like equivalent of the
total discounts at each bank and the system.
Dividing this sum by the total paper discounted

the average maturity in days is obtained. The
average rate is calculated by means of the
formula:
Amount X rate X maturity (in days) ,.

dz^Wf^T

~ = dlsCount

whence,
, ,
discount X days in year
N
rate ^average; - a m o u n t x m a t u r i t y (foT5^)
Recalling that the amount discounted multiplied by the average maturity equals the
equivalent amount discounted for one day, the
formula becomes:
.
v
discount X days in year
to
equivalent amount discounted
for one day.
In case the average maturity of the discounts
included in any discount rate group is desired,
it may evidently be derived by dividing the
equivalent amount, which discounted at the
given rate for one day yields the discount for
that group, by the corresponding total discount,
the result being the average maturity in days.

Bills discounted by each Federal Reserve Bank during April, 1918, distributed by rales of discount; also average maturity
and rate of bills discounted by each bank during the month.
Federal Reserve
Bank.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
Federal Reserve
Bank.
Boston
New YorkPhiladelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas City.
Dallas
.".
San Francisco
Total

3£ per cent.
Amount.

4 per cent.

Discount.

|S2,692,000 S3,993.33
j 49,175.918 60,914.18
3,541.55
2,442,400
4,267.63
3,037,500
10,296,150 11, 978. 83
2,663.41
1,837,162
7,903.29
5,866,079
6,819.70
4,683,000
230.88
289,000
7,061.72
4,886,253
17,410.84
12,101,000
7,157.42
5,018,000_
108,324,462 139,942.78

Amount.
820,599,223
1,393,836,866
36,418,786
60,729,862
112,416,982
28,241,776
J.05,670, 485
47,850, 033
10,887,102
34,957,739
17,915,144
22,145,206
1,891,669,204

5 per cent.

Discount,

5J per cent.

5£- per cent.

Discount, i Amount, Discount, Amount.

|

3814,752
60,519
2,454
13,761
231,943
190,939
3,582,178

87,374.89
1,833.98
53.41
204.39
5,285.87
4,125.31
37,926.19

1,311,420
4,962,781
! 2,190,182
!
j 13,360,929

13,557.99
103,613.21
30,425.01
204,400.25 j

Discount.

535,053.48 12,508,591 519,068.87
963,091.20 4,413,015 40,713.94
4,941.31
51,294.47
555,281
79,153.81 12,441,985 24,935.32
61,713.25 41,687,665 26,026.89
45,522.95
130.69
27,748
167,007.71
4,889.64
631,292
76,493. 75
1,103.58
133,034
18,580.33
87.46
8,14.1
50,692.49
149.69
28,000
28,009.06
1,078.33
101,541
36,073.16
1,610,685.66 62,536,293 123,125.72

! Amount.

834,034

Discount.

8637.33

§457,518 38,946.58
40,980
890.16
1,580,028 ! 39,577.45
3,150
37,184

4J per cent.

4J per cent.
Amount.

84.22
721.55

591,139 !, 13,201.05
W® 800 3656638
4,299,465 ; 99,181.62

Amount.

Discount.

3296,807 82,252.61
17,391.50
2,739,292
9,042.70
1,120,515
6,259,884 48,274.30
19,523.25
2,541,263
7,219.59
1,328.295
9,614.99
1,639;393
19,259.83
3,136,196
7,723.06
1,386,406
20,910.74
3,417,736
20,050.08
2,624,875
_lJ780,251_ 14,266.17
28,270,913" 195,528. 82
Total.
Amount.

Discount.

§30,493,954
397,796.31
1,460,681,317 1,162,644.46
42,382,588
77,974.03
90,279,781
223,561.75
185,056,053
203,912.01
33,868,533
74,456.40
276,861.12
125,683,180
146,952.66
62,992,887
17,883,752
92,133.40
54,774,500
234,850.75
114,650.87
•36,370,549
153,553.73
37,943,385
2,178,410,479 2,859,347.54

4f per cent.
Amount.

Discount

33,582,581 $30,053.13
10.455,707 72,699.66
9,100.64
l'843,152
66,088.97
7,762,755
79,383.92
11,882,050
14,794.45
2,242,613
40,572.72
7,836,235
42,385.64
7,149,644
14,376.23
2,421,655
6,521,991 52,422.90
4,476.50
846.668
59,406.38
69,912,029 485,761.14
Average
maturity
in days.
27.16
7.22
18.08
20.61
9.12
18.83
18.63
19.83
38.01
33.61
24.78
31.69
11.25

Average
rate(per
cent).
4.31
4.05
4.12
4.33
4.33
4.20
4.26
4.24
4.88
4.59
4.39
4.60
14.23

i Average discount rate on all paper discounted works out at 4.20 per cent, if calculated on a uniform 360-day basis, and at 4.26, if calculated on
a uniform 365-day basis.




554

JUNE 1,19.18.

FEDERAL RESERVE BULLETIN.

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

Bankers' acceptances.

Date.

Nonmember State
banks.

$7,820,000
5,267,000
4,898,000

810,000

15,494,000
21,000,000
32,989,000
37,798,000

1915.
Feb. 22.
Apr. 5..
July 3 . .
Oct. 4 . .

Nonmember
trust
companies.

Member
banks.

S93,000 !
3,653,000 j
4,342,000
9,000,000

Foreign
bank
branches
and
agencies.

Private
banks.

Total.

Trade
acceptances
Total
bought in
acceptances.
open
market.

132,000

3110,000
161,000
343,000

§93,000
11,593,000
9,770,000
14,373,000

7,160,000
13,572,000
18,921,000
21,782,000

362,000
473,000
471,000
712,000

822,000
3,262,000
11,830,000
9,944,000

23,838,000
38,308,000
64,211,000
70,236,000

$722,000
3,422,000
2,306,000

23,838,000
39,030,000
67,633', 000
72,542,000

66,803,000
43,979,000
108,597,000
131,997,000
227,717,000

34,625,000
20,328,000
30,390,000
14,987,000
8,163,000

1,502,000
689,000
3,333,000
2,193,000
3,179,000

18,224,000
16,830,000
38,082,000
21,708,000
20,137,000

8200,000
3,805,000
2,286,000
7,657,000

121,154,000
82,026,000
184,785,000
173,171,000
266,853,000

4,585,000
1,144,000
4,660,000
6,942,000
6,383,000

125,739,000
83,170,000
189,445,000
180,113,000
273,236,000

240,259,000
252,747,000
275,144,000
248,390,000

5,547,000
1,648,000
1,360,000
654,000

3,522,000
3,856,000
1,884,000
2,907,000

22,099,000
28,419,000
31,779,000
25,921,000

6,947,000
7,097,000
8,562,000
10,304,000

278,374,000
6,363,000
293,767,000
5,456,000
318,729,000
8,015,000
288,176,000 19,279,000

284,737,000
299,223,000
326,744,000
297,455,000

893,000
11,593,000
9,770,000
14,373,000

1916.
Jan. 3..
Apr. 3.
July 3.
Oct. 2.
1917.
Jan. 1
Apr. 2
July 14-16.
Sept. 29...
Dec. 3 1 . . . .
1918.
Jan. 31..
Feb. 28.
Mar. 31.
Apr. 30.

1

Includes 8128,000 of acceptances in the domestic trade.

Acceptances bought in open market and held by each Federal Reserve Bank on Apr. SO, 1918, distributed by classes of accepting
institutions.
[In thousands of dollars; i. e., 000 omitted.]

Federal reserve bank.

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




NonmemMember ber trust Nonmem- Private
ber State
combanks.
banks.
banks.
panies.

Foreign
banks,
branches,
and
agencies.

14,293
SO,775
23.036
18; 025
4,933
<S,112
46,177
10.097
10' 995
5,140
4,455
11,852

30
156
50
200

2,028
346

200

25
50
375

8

83

1,119

218

248,390

654

2,907

25,921

10,304

16

1,834
19,780
670
700

575
8,716
315
480

261
1,211
299
47

Trade acceptances bought in
open market.
Total.
Domestic. Foreign.
16,732
120,455
25,317
19,405
4 933
8 398
47,63S
11,371
11 052
5 140
4,455
13,280
288,176

844
1,476
27
177

Total
acceptances.

Total.
844
1,476
79
253

6,627

52
76

6,627

17,576
121,931
25,396
19,658
4,933
.8,398
47,638
11,371
11.052
5,140
4,455
19,907

9,151

9,279

297,455

f

128

555

FEDERAL RESERVE BULLETIN.

JUNE 1, 1918.

Amounts of bills discounted and acceptances and warrants bought by each Federal Reserve Bank during Aprilt 1918,
distributed by maturities.
30-day maturities.

15-day maturities.
Discounts.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total

Acceptances. Warrants.

§22,463,915
1,435,115,707
38,470,531
65,175,448
169,529,130
29,866,109
111,405,740
52,177,346
11,170,601
39,610,458
29,774,697
28,114,110

§399,472
1,336,022

| 2,032,873,792 |

2,882,790

62,247
200,000
200,000
510,000
25,049
150,000

Total

Discounts.

522,863,387
1,436,451,729
38,470,531
65,237,695
169,729,130
30,066,109
111,915,740
52,202,395
11,170,601
39,610,458
29,924,697
28,114,110

SI, 679,924
3,508,531
1,169,662
2,418,578
2,797,187
1,001,917
2,649,097
3,702,334
669,191
1,713,413
655,946
518,980

2,035,756,582

Acceptances. Warrants.

22,484,760

Acceptances. Warrants.

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

81,805,733
8,996,623
999,088
5,304,905
7,074,651
1,655,560
7,125,084
3,772,113
3,121,582
3.921,187
i;683,212
1,886,004

63,888,423
9,688,863
5,231,332
779,533
3,339,849
1,744,451
1,098,500
628,866
1,090,293

Total...

47,345,742

10,453,273

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

S567,062 3555,000
63,115
82,454
443,000
378,923
30,309
334,614
667,500
190,071
243,075
457,518 1,600,000
101,446
22,265
1,593,515
4,961,454
150,000
1,334,390
1,632,949

Total.... 11,697,511 3,711,149




Warrants.

Total.

Discounts.

Acceptances. Warrants.

1,475,000
2,551,610

S3,977,320
12,997,341
1,660,853
17,001,927
5,320,471
1,154.876
4,045; 741
3,239,648
1,328,863
4,587,988
2,922,304
5,791,342

31,516,720

78,862,462

64,008,674 i 68,950,438)

S3,699,479
43,192,866 |
4,096,995
2,483,023 I
3,302,269 I
1,341,198
4,505,164 !
811,794
485,000 I
100,000 i
1,370,000 i
3,562,650 i

Total.
Total.

Discounts.

830,493,954
81,122,062
63,115 1,450,681,317
42.382,588
525,454
90)279,781
409,232
185,056,053
1,002,114
33,868,533
433,146
125,683, ISO
2,057,518
62,992,887
123,711
17,883,752
1,593,515
54,774,500
5,111,454
36,370,549
1,334,390
37,943,385
1,632,949
15,408,660

2,178,410,479

32,970,303

90-day maturities.

35,694,156
18,685,486
6,230,420
6,084,438
10,414,500
3,400,011
8,223,584
4,400,979
4,211,875
3,921,187
3,158,212
4,437,614

Over 90-day maturities.

32,270

285,000
1,470,252

60-day maturities.
Discounts.

532,270

82,076,614
7,243,534
2,219,662
2,627,664
4,292,394
1,164,187
3,620,597
3,995,615
1,086,445
1,713,413
940,946
1,989,232

§396,690

3,735,003
1,050,000
209,086
1,495,207
130,000
971,500
293,281
417,254

Total

§7,676,799
56,190,207
5,757,848
19,484,950
8,622,740
2,522,074
8,550,905
4,051,442
1,813,863
4,667,988
4,292,304
9,353,992

26,000 j 132,985,112
Per cent.

WarAcceptances. rants.
88,939,064
57,952,754
10,821,327
3,564,198
9,004,825
3,658,724 §58,270
8,685,164
1,781,255
1,992,547
250,000
3,280,000
7,584,512
117,514,370

326,000 i

Total.

58,270

Total.

Dis- A ecept- Warcounts. ances. rants.

839,433,018
1,518,634,071
53,203,915
93,843,979
194,060,878
37,585,527
134,368,344
64,774,142
19,876,299
55,024,500
39,650,549
45 .127.897

77.3
96.2
79.7
96.2
95.4
90.1
93.5
97.3
90.0
99.5
91.7
83.3

2,295,983,119

94.9 1

22.7
3.8
20.3
3.8
4.6
9.7
6.5
2.7
10.0
.5
8.3
16.7
5.1

.2

Total.
100
100
100
100
100
100
100
100
100
100
100
100
100

556

FEDERAL EESERVE BULLETIN.

JUNE 1,1918.

Maturities of discounts, acceptances, and municipal warrants held by each Federal Reserve Bank on Apr. 26, 1918.
1 to 15 days.
Bills discounted.

Acceptances
bought.

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

$15,997
387,656
20,892
30,649
29,339
15,630
73,713
31,602
7, 132
22,311
15,369
18,679
618,969

Municipal
warrants.

32,071
10,790
5,949
7,133
2,078
3,259
5,030
2,879
2,512
4, 72S
1,350
6,703

Total.
Percent

16 to 30 days.

54,482

Total.

Bills discounted.

bought.

$35
5

$27,891
58,606
10,149
9,236
6,551
1,974
4,362
3,638
1,35S
5,445
2,040
3,644

40
55.9

673,491

134,894

58,957 \.

Municipal j
p
warrants
'

S9,580
59,919
9,601
6,591
1,043
2,711
22,720
4,632
3,366
185
1,925
7,579

Total..
Percent

87,685

129,852

T




Total.

Bills discounted.

Accept- ! Municipal i
ances
warrants, i
bought.

10,994
7,060
6,462
6,151
13,975

82,565
10,652
1,100
7,211
3,355
662
6,000
2,007
1,153
4,267
3,277
4,626

S3,011
35,288
4,104
2,150
1,342
1,222
7,518
906
485
250
520
2,757

218,050

46,875

59,553

24,694

486

Bills dis- Acceptances
counted. bought.
$54,307
434,256
35,351
58,212
47,333
20,406
88,553
43,656
14,591
43,912
26,167
34,999

$1
52
2
30
242
181
2,504
47
1,254
t*
5,612
1,741
1,654

1.1

j

Total.

$5,576
45,940
5,204
9,361
4,697
1,884
13,518
2,913
1,638
4,517
3,797
7,383
8.8 I

106,428

Total.

Over 90 days.

13,320

t

$17,433
87,209
12,809
17,677
8,889
4,697

513
18.1

Total.
Per c e n t . . .

193,851

16.1

$27

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

829,835
73,636
16,798
13,990
7,265
3,779
17,096
6,602
6,541
7,414
2,800
8,095

61 to 90 days.

$7,853
27,290
3,208
11,086
7,846
1,959
1,974
6,362
3,694
6,277
3,740
6,396

Municipal warrants.

Total.

SI,944 I
15,030 |
6,649 |
4,754
714
1,805
12,734
2,964
5,183
1,969
760
4,451

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

Bills dis- Acceptances
counted. bought.

Municipal
warrants.

$18,068
348,446
26-841
37,782
31,417
18,924
78,748
34,481
9,644
27,039
16,719
25,382

31 to 60 days.
Bills discounted.

Acceptances
bought.

13,321

901,743

$16,606
121,027
26,303
20,628
5,177
8,997
48,002
11,381
11,546
7,132
4,555
21,490
302,844

Municipal warrants.

Total.

Bills dis- Acceptances
counted. bought.

Municipal war- Total.
rants.

$70,913
555,283
61,654
78,840
52,510
29,466
130,560
55,037
26,137
51,044
31,208
56,489

76.6
78.2
57.3
73.8
90.1
69.3
64.8
79.3
55.8
86.0
83.8
62.0

23.4
21.8
42.7
26.2
9.9
30.5
35.2
20.7
44,2
14,0
14,6
38.0

0.2

554 1,205,141
100

74.8

25.1

0.1

$63
5

1.6

100
100
100
100
100
100
100
100
100
100
100
100
100

JUNE 1,

557

FEDERAL RESERVE BULLETIN.

1918.

Liberty loan bonds and United States certificates of indebtedness purchased under repurchase agreements during the month oj
April, 1918.
[Figures included with United States securities in table showing total investment operations.]
Philadelphia.

New York.

Liberty bonds
Certificates of indebtedness 5232,020,000
Total

$5245,000
4,573,000 86,724,000
4,818,000

232,020,000

Atlanta.

Cleveland.

Minneapolis.

Chicago.

$1,844,800
2,205,100 11825,733,200 §2,131,000

6,724,000

4,049,900

25,733,200

2,131,000

Kansas
City.

Dallas.

$17,000 $763,000
17,000

763,000

San
FranCisco.

Total.

§2,089,800
S62,500 1274,228,800
62,500

276,318,600

i Includes Liberty bonds purchased by the Chicago bank under repurchase agreements.

Total investment operations of each Federal Reserve Bank during the month of April, 1918 and 1917.

Federal Reserve Bank.

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

,

,
,

,

Total, April, 1918
Total, April, 1917

Bills bought in open market.
Bills discounted for members
and Federal
Trade
Bankers'
accept.ReserveBanks. acceptances.
Total.
830,493,954
1,460,681,317
42,382,588
90,279,781
185,056,053
33,868,533
125,683,180
62,992,887
17,883,752
54,774,500
36,370,549
37,943,385

88,939,064
57,209,781
10,742,322
3,384,061
9,004,825
3,658,724
8,685,164
1,781,255
1,992,547
250,000
3,280,000
4,604,045

2,178,410,479
50,055,801

113,531,788
41,019,251

Municipal warrants.

City.

State.

S32,270

$26,000

$58,270

2,980,467
3,982,582
293,440

117,514,370
41,312,691

32,270
266,433

26,000
13,853

58,270
280,286

Total investment operations.

United
1-year
States
Treasury, certificates
notes.
of indebtedness.

Federal Reserve Bank.
3 per
cent.

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
".
San Francisco
Total, 1918.
Total, 1917.




31- per
cent.

4 per
cent.

$467,000

1,577,900
,
j
671,150 |
272,850
5,250

82,867,040

1 $31,824 in the domestic trade.
2
§109,345 in the domestic trade.

S3,000

Total.

§232,088,000 8232,088,000
7,957,500
7,712,500
9,214,500
9,214,500

§245,000

745,100

Total.

$8,939,064
57,952,754
10,821,327
3,564,198
9,004,823
3,658,724
8,685,164
1,781,255
1,992,547
250,000
3,280,000
7,584,512

§742,973
179,005
2 180,137

United States securities.

2 per cent.

All other.

400 I
2,494,450 i

i 2,205,100
i 425,888,200
i 32,970.000
1,334;500
973,000
j 3,019,500

4,250,000
25,888,200

I 315,411,300

318,650,850
4,090,040

j SI, 220,000 \

33,920,000
1,334,500
973,000
3,025,150

April, 1918.

$39,433,018
,750,722,071
(51,161,415
103,058,479
194,060,878
41,835,527
160,255,544
64,774,142
53,793,299
56,359,000
40,623,549
48,553,047
2,614,633,969

3 Exclusive of purchases of United States certificates of indebtedness.
* Includes United States bonds purchased under repurchase agreements.

April, 1917.*

194,509
126,638
780,935
367,954
850,227
638,069
113,932
,188,527
177,577
089,700
333,321
,877,429
95,738,818

558

JUNK 1,1018.

FEDERAL RESERVE BULLETIN.

United States securities held by each Federal Reserve Bank on Apr. 30, 1918, distributed by maturities.
O ther United States securities including 1 year Treasury Notes and
Treasury Certificates of Indebtedness available as security for
Federal Reserve bank notes under Silver Act of April 23,1918.

United States bonds with circulation
privilege.
Federal Reserve
Banks.

2 per I

cent | 3 per cent 4 per cent
2 per cent
loan of
consols Panamas j loan of
of
1936-1938.!

of 1930.

1918.

1925.

Treasury
3 per 31> per cent 4 per cent certificates
Liberty
Liberty
cent
of
loan of
loan of
loan of
1961.
1947.
1942-1947. indebtedness.

3 per cent 3 per cent
conver1-year
sion
bonds of Treasury
notes.
1946-47.

Total.

-|

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

!
i

$750
50

,

,
,

Total

$100
915,100
440,600
1,862,500
100
304,300
7,155,850
2,450,900
2,428,750

237,000
21,000
367,300
i6,260
22,240
281,500

15,558,900 i 945,400

i

§60,000
268,250
11,850
1,966,900
42,850
13,650

8141,450
15,003
1,419,250
374,550
37,750
241,750
83,050

500

109,500
7,500
1,100
21,500

45,550
13,100
2,500
10,850

900

§1,416,000
2,226,000
1,537,000
2,660,000
1,513,000
I6,"3o6" 1,141,000
2,962,000
427,400
511,000
1,153,300
880,000
114,800
1,374,000
838,500
1,430,000
1,233,600
1,500,000

2,501,100

3529,000
1,255,400
549,200
2,"653," 660* I "S2,*378," 2o6" 414,800

So6,666 j

2,581,000
1,080,000
1,199,180

1,768,000

7,563,840

5,177,450

2 , 5
825,000

6,526,300

$400

19,150,000

$2,152,200
3,907,700
5,914,900
18,892,110
2,755,700
1,953,300
11,850,650
2,744,400
3,522,840
646,500
3,276,000 13,512,190
1,202,000
6,601,600
4,434,100
473,000
85,000

93,000
2,397,500
8,444,000
10,000
85,000
1
1,799,000

2,384,800 j 18,431,000

78,241,690

i Includes United States bonds purchased from banks under 15-day repurchase agreements. Total United States bonds with circulation
privilege, §29,245,590. Other United States securities, §43,996,100.

Number of banks and of other subscribers, also amounts subscribed, to the 6 issues of certificates of indebtedness preceding the
third Liberty loan.
State banks.

National banks.
Federal Reserve
Bank.

Boston
New York

Philadelohia

Cleveland
Richmond..
Atlanta
Chicago...
St Louis
Minneapolis
Kansas City
Dallas
•San Francisco
Total

NumPer
ber sub- cent of
scrib- total in
ing. district.

Amount.

Num- Per
ber sub- cent of
scrib- total in
ing. district.

3136 172 500
90.83
723,314,500
208
123 319 500
787
139,810,500
94.36
448
34.57
43,115,000
52.43
44,019,000
843
159,931,000
1,623
74.04
64,025,500
40.55
54,223,500
1,178
80,274,500
67.63
2,066
65,964,000
""*497" "*92."72"
93,969,500 """823" " "67." 96" "
350
579
578
737
342
332
914
458
469
838

88.16
92.94
90 31
98.53
64.04
87.36
77.85
97.03
60.91
89.53

Trust companies.

Amount.

Num- Per
ber sub- cent of
scrib- total in
ing. district.

36,204,000
15,521,000
34,502,000
46,194,000
32,468,000
33,781,500
"50," 566," 500"

176

372 472,500
407,380,000
61 990 000
60,636,50C
17,058,000
713,500
1
159,875,000
20,281,500

52

61.90

8,593,000
122,790,500
23,145,000

182
200

219
71
7

3,627

72" "77." 42*

Individuals, corporations, etc.
Federal Reserve Bank.

SNumber
subscribing.

Boston.. .
New York

12
170
14 8
49

Philadelphia

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

8
14
189
18

164
502
228

Total
2

50.85

119

25 709 000
10,660,000
8 685 000

2,566,500

........
2,740,500
30,361,000

Total.
Number
of indiof banks Per cent viduals,
corporasubscrib- of total.
tions,
ing.
etc., subscribing.
Number

Amount.

$63,000
23,720,500
2,505,500
1,382,500
135,500
338,500
5,549,000
517,000
2,498,000
5,875,500
9,430,000
5,109,500
57,124,500

1

17 16
39.66
45 56

70

71
MO

854,935,500 ....

339,470,000

1,718,139,000

Num- Per
ber sub- cent of Amount.
scrib- total in
ing. district.

Amount.

75.40
91.92
68 26
94.80
36.41
70.00
84.17
78.22

193

§90,233,000

Other banks.

613
1,040
896
1,743
1,182
4,541
2,376
1,647
2,958

57.77
84.63
75.17
96.14
40.52
82.43
82.82
76 07
44.83
72.53

12
170
148
49
8
14
189
18
.,164
502

1,392

75.65

228

861

Amount.

3214,417,000

1,255,308,600

196,500,000
238,033,500
75,829,500
79 573 000
325,355,000
133 584 500
2 89,350,000
128,524,500
90,925,000
172,790,500
3,000,190,500

Include figures for State banks.
Includes 3160,500 purchased by the Federal Reserve Bank of Minneapolis.
NOTE.—Figures by the several classes of banks are only approximately correct, since in some States no distinction is made between the several
•classes of banks operating under State laws.




559

FEDERAL BEBEEVE BULLETIN.

JUNE 1,1918.

RESOURCES AND LIABILITIES OF FEDERAL RESERVE BANKS.
Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system at close of business on Fridays, May 3
to 24, 1918.
RESOURCES.
[In thousands of dollars; i. e., 000 omitted.]

Boston.

Gold coin and certificates in vault:
May 3
May 10
May 17
May 24
Gold settlement land,
Federal R e s e r v e
Board:
MayS
May 10
May 17
May 24
Gold with foreign
agencies:
Mav3
May 10
May 17
,
May 24
Gold with Federal
Reserve agents:
May 3
May 10
,
May 17
,
May 24
,
Gold redemption fund:
May 3
May 10
May 17
May 24
Total gold reserves:
May3
May 10
May 17
May 24
Legal tender notes,
silver, etc.:
May 3
May 10
May 17
May 24
Total cash reserves:
May 3
May 10
May 17
May 24
Bills discounted for
members and Federal Reserve Banks:
May 3
May 10
May 17
May 24
Bills bought in open
market:
May3
May 10
May 17
May 24
United States Government long-term
securities:
May 3
May 10
May 17
May24
United States Government short-term
securities:
May 3
May 10
May 17
May 24




York.

Philadelphia.

Cleveland.

Richmond.

AtSt.
lanta. Chicago. Louis.

Minneapolis.

Kansas
City.

San
Francisco.

Dallas.

Total.

9,688
10,393
5,276
2,879

345,677
345,459
348,267
351,319

9,176
9,285
9,190
9,167

26,547
23,050
24,645
25,633

6,369
6,417
6,336
6,369

6,490
6,604
6,615
6,633

30,053
30,622
28,878
28,276

1.604
2;019
2,212
1,906

14,027
11,857
10,738
8,371

358
337
554
360

5,063
5,153
5,205
5,405

27,780
29,384
31,613
32,142

482,832
480,58C
479,529

60,554
61,046
60 985
60,927

78,084
68,797
39,336
39,583

53,022
57,572
52,729
40,537

51,805
49,274
60,844
54,514

9,388
14,710
18,710
23,224

13,903
11,162
10,008
15,224

81,512
61,036
80,016
81,869

18,537
23,118
32,421
23,784

11,184
14,098
18,572
18,520

32,730
45,793
21,371
23,344

6,135
7,054
7,397
8,438

20,917
23,784
15,888
17,773

437,771
437,444
418,337
407,767

3,675
3,675
3,675
3,675

18,112
18,112
18,112
18,112

3,675
3,675
3,675
3,675

4,725
4,725
4,725
4,725

1,837
1,837
1,837
1,837

1,575
1,575
1,575
1,575

7,350
7,350
7; 350
7,350

2,100
2,100
2 100
2,100

2,100
2,100
2,100
2,100

2,625
2,625
2,625
2,625

1,838
1,838
1,838
1,838

2,888
2,888
2,888
2,888

52,500
52,500
52,500
52,50()

48,166
48,116
63,213
63,163

238,514
248,154
247,839
247,502

82,702
83,735
82.796
83;661

95,940
100,073
98,204
107,630

31,321
31,200
31,096
32,957

31,369
33,354
37,345
37,838

141,601
146,376
148,713
152,251

29,734
29,037
42,003
41,131

35,007
34,875
34,804.
34,672

45,126
37,032
36,979
36,936

14,248
19,220
19,193
19,163

68,568
73,855
73,351
73,277

862,290
885,027
915,536
930,181

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

9,945
12,500
12,500
12,500

2,500
2,500
3,000
3,000

553
1,177

996
917
855
755

1,543
1,685
1,048
1,799

1,665
1.768
11986
2,090

1,537
1,529
1,722
1,715

1,702
1,773
1,902
1,984

788
777
758

1,263
1,262
1,260
1,259

29
167
16
78

24,541
27,584
28,502
29,115

124,083
125,230
135,149
132,644

690,332
693,022
666,054
669,016

151,075
156,767
151,390
140,040

179,570
177,817
189,254
193,709

49,911
55,081
58,834
65,142

54,880
54,380
57,251
63,069

262,181
247,152
266,943
271,836

53,512
57,803
80,458
70,636

64,020
64,703
68,116
65,647

81,647
86,575
62,306
64,023

28,547
34,527
34,893
36,103

120,182
130,078
123,756
126,158

1,859,940
1,883,135
1,894,404
1,898,023

2,067
2,484
2,561
2,709

44,796
42,881
42,865
41,658

1,585
1,469
1,324
1,291

500
549
629
482

374
398
426
441

863
802
717
942

4,485
5,572
4,520
4,980

1,853
1,835
1,692
1,771

70
105
67
133

347
296
294
415

2,797
2,778
2,850
2,909

126,150
127,714
137,710
135,353

735,128
735,903
708,919
710,674

152,660
158,236
152,714
141,331

180,070
178,366
189,883
104,191

50,285
55,479
59,260
65,583

55,743
55,182
57,968
64,011

266,636
252,72-i
271,463
276,816

55,365
59,638
82,150
72,407

64,090
64,808
68,183
65,780

81,994
86,871
02,600
64,438

31,344 120,488 1,919,983
37,305 130,274 1,942,500
37,743 124,119 1,952,712
39,012 126,460 1,956,050

52,082
50,265
36,049
41,277

401,092
450,024
368,714
442,175

39,308
38,429
36,276
40,690

54.888
So] 149
64,104
54,018

51,201
51,637
46,333
46,058

24,194
24,073
21,303
23,814

83,868
87,882
83,989
80,771

40,245
43,852
29,150
30,814

17,058
20,910
22,024
24,051

46,404
51,325
69,067
71,577

26,518
27,705
27,133
28,160 I

18,618
18,862
21,037
22,314

124,463
126,650
130,439
138,983

23,933
25,727
26,956
23,438

18,022
14,417
13,480
10,827

5,020
5,695
1,893
2,494

8,027
6,885
5,567
4,569

47,356
45,665
42,627
41,011

10,944
8,999
7,697
6,955

10,684
10,128
7,116
4,745

731
616
616
616

1,586
1,577
1,575
2,756

1,905
1,347
1,347
1,347

7,7b»
1,233
7,800
1,234
7,800 I 1,234
1,234
7,800

727
726
730

7,691
7,161
7,335
7,200

2,233
2,233
2,233
2,233

1,421
1,421
1,421
1,421

2,519
77,335
43,475
3,475

3,409
2,390
2,330
2,321

1,314
1,324
1,205
1,205

3,638
3,517
3,165
3,189

511
511
511
511

11,211
9,337
9,387
9,822

1,523
1,523
1,523
1,523

' 196
363

478,460

60,043
59,365
58,308
58,033

36,584
37,790
38,123
39,894

873,442
939,041
842,265
923.299

3,507
2,604
2,041
1,446

4,960 21,495
1,555 18,849
845 ! 20,188
770 20,669

297,029
286,036
279,886
278,221

1,996
1,915
1,869
1,845

8,863
8,865
8,864

3,969
3,981
3,981
3,981

!
I
!
i

2,461
2,461
3,461
3,461

41,183
40,110
41,041
42,067

1,490
1,217
1,430
1,314

4,644
4,571
4,433
4,398

2,632
1,896 !
1,936 I
1,750 I

2,060
1,720
2,227
1.547

36,378
106,762
73,043
32,476

560

EEDEEAL BESERVE BULLETIN".

JUNK 1, 1018,

Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system at close of business on Fridays, May S
to 24, 1918—Continued.
RESOURCES—Continued.
[In thousands of dollars; i. e., 000 omitted.]

m

New
York.

Boston.

Philadelphia.

Cleveland.

Richmond.

Atlanta.

Chicago.

St.
Louis.

Minneapolis.

Kansas Dallas.
City.

San
Fran-

Total.

All! other earning
May 3
May 10
May 17
May 24
Total earning assets:
May 10
May 17
May 24
Due from other Federal Reserve Banks, !
net:
May 3
May 10
May 17
May 24
Uncollected items:
May 3
May 10
i
May 17
|
May 24
|
Total deductions from !
gross deposits:
i
May3
1
May 10
i
May 17
j
May 24
j
>er cent redemption I

72,852
71,164
59,123
85,628

218
152
122

90

72
35
23
23

1,432
1,135
1,131
823

61
35
39
20

2,537
1,844
1,492
1,151

34,345
33,263
28,854
30,371

142,799
144,456
137,116
132,261

54,358
55,796
39,715
40,571

31,452
34,322
32,561
32,039

63,490
67,400
84,428
86,308

39,511
36,272

62,661
60,855
64,038
65,591

1,250,569
1,373,799
1,237,727
1,277,214

4,403
21,599
7,870
12,897

4,130

8,816
10,159

7,280
7,972
6,420
1,570

529,660
655,586
544,203
587,389

68,555
67,893
66,909
67,796

427

1,856
10,484

5,959

3,767
6,281
4,032
2,263

85,105
77,358
73,208
69,355

48,278
42,860
40,818
42,869

33,397
49,701
37,171
42,338

27,955
41,194
27,884

27,247
29,175
21,201
23,558

51,027
50,307
45,854
41,269

36,078
49,643
43,383
30,190

10,392
14,638
8,423
9,599

19,276
38.104
16', 728
22,218

16,761
18,072
15,915
17', 864

17,643
27,952
19,983
17.488

399,585
482,220
384,391
365,440

85,105
77,358
73,635
69,355

48,278
42.860
42i674
53,353

33.397
57; 903
37,171
42,338

29,638
41,194
27; 884
26,186

' 27,247
37,991
31,360
23,558

55,430
71,906
53,724
54,168

40,208
58;139
43,383
36,149

14,159
20,9.19
12,455
11,862

26,556
46,076
23.148
23; 788

16,761
18,072
15,915
17,864

17,643
27,952
20,246
17,488

376,605
455,726
382,509
351,407

91,909
86,703
94,771
82,467

821

58,977
60,089
50,983
51,309

1,683
8,202

3,746 i
26,526
23,216
33,843
22,506
27,147
24,914
33,843
26.252

!
i
i
!

Reserve bank notes:!
';
May 3
j
L.
May 10
1
L.
May 17
1
!..
May 24
1
;..
All other resources:
I
May3
!
i..
May 10
i
!..
May 17
!
L.
May 24
j
j..
Total resources:
!
I
May3
i 226,149 |1,I
May 10
1 223,792 {1,46S,847
Mav 17
: 230,676 j 1,326,757
Mav24
! 227,233 i 1,367,418

Banks.

246
231

425
201
124
58

55
53
53

400
267
393
400

35,484

23,080
6,494
1.882
1
1 4 ; 033
1

537
404
530
537

137
137
137
137

329
66
77

318
65
77
269,311
269.054
262', 374
262.569

305,376
322,972
321,825
318; 996

138,900
156,762
138,127
143,078

117,340
126,437
118,182

46-1,895
469,086
462,303
463;243

149,931
173.573
165', 248
149,127

109,701
120,049
113,199
109,681

172,440
200,614
170.569
174;934

87,753
91,783
88,821
92,497

200,792
219,081
208,403
209,539

3,548,023
3,772,495
3,573,555
3,585.303

ierence between net amounts due from and net amounts duo to other Federal Reserve Banks = net amount due to other Federal Reserve




JUNE 1,

561

FEDERAL RESERVE BULLETIN.

1918.

Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system, at close of business on Fridays, May S

to 24, 1918—Continued.
LIABILITIES.
[In thousands of dollars; i. e., 000 omitted.]
New
York.

I Boston.

Philadelphia.

Cleveland.

Atlanta.

Richmond.

St. I Minne- ; Kansas
Louis. I apolis. ! City.

Chicago.

I
Capital paid in:
May3
May 10
,
May 17
May 24
Surplus:
May 3
May 10
,
May 17
,
May 24
Government deposits:
May3
May 10
May 17
May24
Due to members—rcsorve account:
May 3
May 10
May 17
May 24
Collection items:
May 3
May 10
May 17
May 24
Due to other Federal
Reserve Banks, net:
May 3
May 10
May 17
May 24
Other deposits, including foreign government credits:
May 3
,
May 10
May 17
May 24
Total gross deposits:
May 3
May 10
May 17
May. 24
Federal Reserve notes
in actual circulation:
May 3
May 10
May 17
May 24
Federal Reserve bank
notes in circulationnet liability:
Mays
May 10
May 17
May 24
Ail other liabilities:
May 3
MaylO
May 17
May 24
Total liabilities:
May 3
MaylO
May 17
May 24




6,458
6,400
6,460
6,466
.„
75
75
75

,
i
I
!

6,909
6,909
6,938

7,496
33,028
2,074
12,142

3,801
3,803
3,811
3,811

94,399
94,501
92,892
17,972
18,129
22,434
17,734

12,415
1,945
1,428
10,696

61,047
57,052
59,039
54,145

i
i
|
I

22,091
62,457

38,520
23,183
31,332
27,810
285
1,992

37,552 i

i
'••
i
|

259
266
244
174

116,248 : 816,168 I 138,818
114.291 930,238 | 136,904
120,834 790,968 ; 128,746
117.292 832,668 i 127,217
102,547
102,484
102,818
102,898

141,306
145,092
142,917
150,987

!
|
'
.

124,084
125,241
126,690
128,414

37,369
40,386
38,428
37,398

189,007
192,555
184,337
185,287

12,471
21,069
14,211
14,377

24,920
23,546
26,265
22.563

391 I.
1,657 j .
6,892 I

5,877
20,670
4,369
12,615

;

.
!
j
I

5,105
3,544
8,886
9,879

2,928
2,938
2,950
2,967

3,786
6,807
3,674
9,818

3,516
834
2!294
7 717
-

I
i
|
i

57,605
57,490
57,952
57,780

j
i
!
j

13,208
45,223
14,593
13,644

24,705
34,913
33,977
21,374

i 5,062
i 11,177
j 7,414
! 4,094

!
I
!
!

229,526
230,506
230,818
231,690

5,496
6,963
8,373
7,394

2,592 I
3,955 i
4,109 !
3,679 I

20 ;
81 !
469 I
35 !

10,582
13,739
15,119
13,263

489
502
226,149
223,792
230,676
227,233

4,818 j
7,220 I
7,560
8,005
1,319,893 269,811
1,468,847 ! 269,054
1,326,757 I 262,374
i;367,418 I 262,569

703
635
703 I
844 !
305,376
322,972
321,825
318,996

114
106
300
121

1 138,900
I 156,762
I 138,127
i 143,078

993
1,092 :
1,141 I
1,098 I
117,346
126,437
118,182
117,940

464,895
469,086
462,303
463,243

I
!
;
!

257,593
309,773
282', 475
242,488

4,787 !
.
763 !
.
68 !

3.683
4; 459
4,377
4,192

81,750 j 51,820
62,467
105,304
55,820
96,779
52,606
81,708
64,124
64,198
64,446
63,276

i
i
I
j

54,779
54,440
54,213
53,887

i 91,563
i 110,611
! 114.596
I 107J903

49,349
53,916
51,433
55,666

94,463
108,510
96.208
95^681

il, 897,562
|2,107,050
jl, 906,962
11,909,025

70,531 • 35,207
71.741 : 34,740
72', 112 ' 34,131
72,299 : 33,557

101,833
106,024
107,541
109,210

1,556,660
1,569,618
1,569,445
1,578,621

89,546
116,667
85,943
90,163

7,980
7,878
7,878
7,764

7,878 i.
7^764 i.

821

! 73,888
i 138,529
! 48,753
' 122,350

72,552
37,745 i 70,117 il, 474,518
64,637
41,164
75,493 -1,548,137
67,676 i 38,657
71,698 ! 1,461', 138
66,701 I 36,876 j 68,234 jl, 436,284

224,445
227,565
220,398
220,502

66,558
66,658
67,981
68,281

5,314
14,056
5,014
9,924

! 51,148 ! 41,648
| 49,680 I 42,706
! 49,339 i 39,503
! 47,884 ; 33,614

1,803
3,214
5,336
3,154

i 56,736
! 65,930
! 57,174
! 57,096

75,049
75,118
75,315
75,465
1,134
1,134
1,134
1.134

412

68,311
86.079
65'919
70,749

4,308
4,312
4,330
4,332

!
!
i
|

8,625 i.

177
5
16
17

|
!
j
!

154,863
168,737
169,669
158,629

508,560
511,004
507,826
506,342

8,715
8,250
4,460
9,498

38
38
38
38

3,472
3,471
3,490
3,500

13,540
15,260
2,349

3,278

85,627
102,566
104,137
100,312

24,234
22,990
31,003
28,728

5,050
4,470
4,519
4,892

2,771
2,773
2,777 !
2,782 j

216
216
216
216

19,376
31,789
20,715
17,362

639,907
87,598 i 108,305
675,135 109,784 | 117,703
625,718
95,986 I 113,581
628,517 | 88,711 108,184

4.0
40
40
40

i

3,520 |
3,524 !
3,523 |
3,623 i

9,715
9,707
9,730
9,737

44,723
44,413
43,323
42,248 j

8,525
27,778
9,581
19,194

2,965
2,977
3,016
3,019

4,212
9,486
224
4,247

649
649
649
649

3,877 i
1,661 I
2,230 |
11,728 I

8,504
8,508
8,536
8,536

116
116
116
116

19,698
19,736
19,754
19,754

Total.

537
547
500
520

284
331
351

149,931
173,573
165,248
149,127

109,701
120,049
113,199
109,681

911 ;
857 :
1,146 ;
1,208 •
172,440
200,614
170,569
174,934

!
:
i
i

192
307
307

188
235
324
316

11,897
12,821
13,294

87,753
91,786
88.821
92;497

200.792
219; 081
208,403
209,539

3,548,023
3,772,495
3,573,555
3,585,303

562

FEDERAL RESERVE BULLETIN.

JUNE 1, 1938.

FEDERAL RESERVE NOTES.
Federal Reserve note account of each Federal Reserve Bank at close of business on Fridays, May 3 to 24,1918,
[In thousands of dollars; i. e., 000 omitted.]

Boston.

FederalReserve notes
received from a g e n t net:
May3
May 10
May 17
May 24
Federal Reserve notes
held by banks:
May 3
May 10
May 37
May 24
Federal Reserve notes
in actual circulation:
May3
May 10
May 17
May 24
Gold deposited with .
or to credit of Fed- !
era] Reserve agent: I
May 3
j
May 10
i
May 17
May 24
Paper delivered to j
Federal
Reserve
agent:
May3
May 10
May 17
May 24




New
York.

Philadelphia

Cleveland.

Richmond.

106,166
107,556
107,863
107,813

553,988
569,018
565,212
56G,156

129,422
137,855
136,916
138,281

149,740
153,373
152,804
159,250

77,635 | 59,610
77,480 59,446
78,674 60,007
79,868 59,719

245,776
250,551
252,888
256,426

67,826
67,129
69,435
68,563

|
5,338
45,428
58,044 12,634
57386 ! 10,226
57,386 10226
59,834 i 9,867

8,434
8,083
9,887
8,263

11,077
10,822
10,693
11,587

2,005
1,956
2,055
1,939

36,250
20,045
22,070
24,736

102,547 508,560 124,084
102,484 531,004 125,241
102,818 507,826 326,690
102,898 506,342 I 128,414

141,306
145,092
142,937
150,987

66,558
66, 658
67,981
68,281

3,619
5,072
5,045
4,915

St.
Louis.

Minne- Kansas
apolis.
City.

Dallas.

55,853
56,021
56,150
56,018

76,914
77,862
77,921
77,964

35,686
35,462
34,675
33,806

112.552
115', 939
117,695
120,821

1,671,168
1,707,522
1,710,240
1,724,685

3,702
2,931
4,989
5,287

1,074
1,581
1,937
2,131

6,383
6,121
5,809
5,665

479
722
544
249

10,719
9,915
10,154
11,611

114,508
137,904
140,795
146,064:

57,605
57,490 230,506
57, 952 230,838
57,780 231,690

64,124
64,198
64,446
63,276

54,779
54,440
54,213
53,887

70,531
71,741
72,112
72,299

35,207
34,740
34,131
33,557

101,833
106,024
107,541
109,210

1,556,660
1,569,618
1,569,445
1,578,621

Atlanta.

Total.

I

i
48,166
48,116
63,213
63,163

238,514
248,154
247,839
247,502

82,702
83,735
82,796
83,661

95,940
100 073
98,204
107,630

31,321
31,200
31,096
32,957

31,369
33,354
37, 345
37,838

341,601
346,376
148,733
152,251

29,734
29.037
42; 003
41,131

35,007
34,875
34,804
34,672

45,126
37,032
36,979
36,936

14/248
19,220
19,193
19,163

68,568
885,027
73,855
73,351 915,536
73,277 ! 930,181

70,700
69,127
57,086
63,591

525,555
576,674
499,153
581,158

60,240
58,406
56,411
58,959

72,910
69,556
77,584
64,845

55,055
57,051
45,479
47,867

28,679
26,533
22,746
22,675

120,460
124,237
121,289
114,040

46,232
44,670
30,827
29,424

26,383
27,752
27,992
25,385

34,763
49,170
66,263
68,476

31,478
29,260
27,978
28,930

45,554
45,620
48,287
50,527

1,118,009
1,178,056
1,081,095
1,155,877

JCJNH 1,1918.

563

FEDERAL RESERVE BULLETIN,

Federal Reserve note account of each Federal Reserve agent at close of business on Friday% May S to 24, 1918,
[In thousands of dollars; i. e., 000 omitted.]
New
York.

St.
Atlanta. Chicago. Louis.

Richmond.

Phila- Clevedelphia. land.

Minneapolis.

Kansas
City.

Dallas.

San
Francisco.

Total.

FEDERAL RESERVE
NOTES.

Received from Comptroller:
May 3
149,560
149,560
May 10
149,560
May 17
152,580
May 24
Returned to Comptroller:
May3
26,474
27,084
May 10
27,777
May 17
28,827
May 24
Chargeable to Federal
Reserve agent:
123,086
May3
122,476
May 10
121,783
May 17
123,753
May 24
In hands of Federal
Reserve agent:
16,920
May 3..*.
May 10
i 14,920
May 17
i 13,920
May 24
j 15,940
Issued to Federal Re- j
serve Bank, less |
amount returned to
Federal R e s e r v e
agent for redemption:
106,166
May 3
107,556
May 10
107,863
May 17
107,813
May 24
Collateral held as security for outstanding notes:
Gold coin and cert i n c a t e s on
hand—
31,000
May3
31,000
May 10
16,000
May 17
12,000
May 24
In'" gold redemption fund—
5,666
May 3
5,616
May 10
5,713
May 17
5,663
May24
Gold settlement
fund, Federal
Reserve Board—
11,500
MayS
11,500
May 10
41,500
May 17
45,500
May 24
E l i g i b l e paper,
m i n i m u m required1—
58,000
May 3
59,440
May 10
44,650
May 17
44,650
May 24
Total:
106,166
MayS
107,556
May 10
107,863
May 17
107,813
Kay 24




102,860
103,060
105,060
106,860

91,620
91,620
92,020
92,740

304,920
312,320
313,320
317,520

88,900
88,900
88,900
92,200

73,980
73,980
73,980
73,980

100,700
101,700
101,700
101,700

68,500
68,500
68,500
68,500

121,280
124,880
127,140
130,340

2,309,560
2,335,760
2.362,820
2,382,660

14,180 I 19,575
14,547 19,870
14,916 | 20,186
15,490 | 20,792

15,315
15,629
15,888
16,896

14,584
15,289
15,953
18,974

12,444
13,141
13,175
14,047

12,632
12,764
12,835
13,307

16,026
16,328
16,469
17,026

15,014
15,238
15,325
15,394

8,728
8,941
9,445
9,519

360,102
369,468
377,381
389,075

156,362
155,395 169,413 I 83,190
160,456 171,244 84,874
159,321 174,270 ~

76,305
75,991
76,132
75,844

290,336
297,031
297,367
300,546

76,456
75,759
75,725
78,153

61,348
61,216
61,145
60,673

84,674
85,372
85,231
84,674

112,552 1,949,458
53,262 115,939 1,986,292
53,175 117,695 1,985,439
53.105 120,821 1,993,585

5,650 16,695
5,710 18,545
6,200 j 16,125
6,200 ' 16,125

44,560
46,480
44,479
44,120

8,630
8,630
6,290
9,590

5,495
5,195
4,995
4,655

7,760
7,510
7,310
8,710

17,800
17,800
18,500
19,300

245,776
250,551
252,888
256,428

67,826
67,129
69,435
68,563

55,853
58,021
56,150
56,018

76,914
77,862
77,921
77,964

35,686
35,462
34,675
33,806

841,480 184,200
184,200
866,280 190,200
866,280 190,200
177,292
181,832
185,668
189,924
664,188
671,248
680,612
676,356

27,838
28,805
29,744
30,879

181,560
183,960
186,160
189,760

110,200
102,200
115,400
110,200

26,940
17,540
23,540
21,040

17,640
16,240
18,440
15,020

553,988
569,048
565,212
568,156

129,422
137,855
136,916
138,281

149,740
153,173
152,804
159,250

I
I
I
|

77,635
77,480
78,674
79,888

i
!
I
I

18,518
22,018
20,517
19,518

173,251
173,248
173,247
169,745

59,610
59,446
60,007
59,719

2,503
2,503
T503

13,102
13,102
13,102
13,102

2,503

278,290
238,770
275,199
268,900

112,552
115,939
117,695
120,821

1,671,168
1,707,522
1,710,240
1,724,685

11,581
11,581 I
! 11,581 I
I 11,581 !
2,768 |
2,672
2,619
2,576

249,955
253,452
236,950
228,449

10,263
9,906
9,592
12,757

6,743
6,646
7,062
6,957

7,422
8,055
7,687
8,112

1,821
1,700
1,596
1,457

1,996
1,681
2,422
2,415

248
548
319
112

1,976
1,943
1,909
2,182

2,405
2,273
2,202
2,070

55,000
65,000
65,000
65,000

75,959
77,089
75,734
76,704

70,000
70,000
70,000
80,000

29,500
29,500
29,500
31,500

26,870
29,170
32,420
32,920

141,353
145,828
148,394
152,139

27,758
27,094
40,094

19,500
19,500
19,500
19,500

42,360
34,360
34,360
34,360

! 584
! 5,584
j 5,58-1
I 5,584

315,474
320,894
317,373
318,654

46,720
54,120
54,120
54,620

53,800
53,100
54,600
51,620

46,314
46,280
47,578
46,911

28,241
26,092
22,662
21,881

104,175
104,175
104,175
104,175

38,092
27,432
27,432

20,846
21,146
21,346
21,346

31,788
40,830
40,942
41,028

21,438
16,242
15,482
14,643

43,984
42,084
44,344
47,544

808,872
822,495
794,704
794,504

129,422 149,740
137,855 153,173
136,916 152,804
138,281 159,250

77,635
77,480
78,674
79,868

59,610
59,446
60,007
59,719

245,776
250,551
252,888
256,426

67,826
67,129
69,435
68,563

55,853
56,021
56,150
56,018

76,914
77,882
77,921
77,964 |

35,686
35,462
34,675
33,800

112,552
115,939
117,695
120,821

1,671,168
1,707,522
1,710,240
1,724,685

553,988
569,048
565,212
566,156

j
!
!
i

i For actual amounts see item " Paper delivered to Federal Reserve agent," on p. 562,

2,083 j 5,672
2,055 ! 5,459
2,028 I 6,855
1,998 ! 3,781

49,061
48,554
50,004
53,080

563,280
583,021
628,582
648,652

564

FEDERAL RESERVE BULLETIN.

JUNE 1,1918,

MEMBEU BANK CONDITION STATEMENT.
Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities, as at close of
business on Fridays from Apr. 26 to May 17, 1918.
1. TOTAL FOR ALL REPORTING BANKS.
i In thousands of dollars; i. e.. 000 omitted.]

Number of reporting \
banks:
=
Apr. 26
!
May3
i
May 10
1
May 17
!
United States bonds !
to secure circulation: |
Apr. 26
j
May3
1
Mav 10
...i
May 17
|
Other "United States j
bands, i n c l u d i n g !
Liberty bonds:
j
Apr. 26
MayS
!
May 10
1
May 17
1
United/ States eertifi- j
cates of indebted- j
ness:
!
Apr. 26
!
MayS
!
May 10
:
May 17
=
Total United States :;
securities owned:
Apr. 26
:
May 3
May 10
May 17

98

i

!
32 !I
32
31
30

i
;
!
I

79

98

49
49
49
49

14,621
14,621
14,121
14,621

50,667
50,809
50,817
50,917

12,976
12,975
12,975
12,978

i
!
!
i

42,519
42,907
42,887
43,016

22,876
21,978
23,818
21,599

14,700
13,545
14,695
14,785

19,241
19,642
19,642
19,142

17,374
17,392
17,393
17,437

5,747
5,747
5,744
5,642

13,135
16,376
18;939
17,644

167,335
166,624
317,294
304,658

13,805 |
14,056 !
31,475 |
23.758 i

39,124
38,703
79,050
73,719

18,891
18,729
25,173
22,891

15,692
18,026
25,622
22,465

36,603
36,610
83,973
81,226

12,985
14,402
24,833
21,692

7,617
8,916
10,280
9,499

i
i
!
j

79,447
81,827
39,146 i
37,826 1

22,812
23,466
18,971
16,334

!

i
64,579
64,173
67,962
60,824

39

41 |
40;
42 !

64
37

681

47
47 j
48 i
47!

688

14,012
14,012
14,012
14,014

17,561
17,312
13,979
17,559

35,399
35,299
35,399
35,055

267,693
266,23S
268,482
266,765

10,646
10,636
20,980
19,940

10,461
9,527
16,591
16,998

15,896
15,473
21,241

362,190
368,078
677,090
635,731

27,686 102,967
25.224 100,265
22; 218 56,721
55,152
22,853

41,753
19,139 ! 38,489
38,470
18,560 j 42,166
32,685 ! 12,833
30,159
32,622 i 11,721 j 27,920

20,308
20,579
17,589
18,857

52,996
52,514
41,170
40,320

1,548,369
1,526,329
1,165,26?
1,153,048

58,078 158,811
56,795 156,517
62,535 j 160,336
60,103 ! 155,520
i
i

72,112 32,503 !
70,264 i 33,223 !
74,911 j 28,857 I
71,751 ! 26,862 i

63,147
68,814
65,151
61,874

48,330
47,418
51,159
53,414

104,291
103,286
99,449
96,616

12,178,252
:2,160,646
2,110,838
i2,055,543

3,007
3,252
3,997
4,332

3,609
3,895
5,226
5,088

4,367
4,448
8,391
6,244

!
I
!
!

i

49,273 11,023.646 69,853
44,868 1,011^648 66,742
24,859 822,386 i 46,530
29,089 814,876 " 45,478
.
1

!

77,029 il,241,648 i
• 75,865 1,229.081 I
! 57,919 1.190.497 '
\ 61,354 ii;i70'.451 •

Loans secured by ;;
United States bonds
and certificates:
;
Apr. 26
i
MayS
i
May 10
i
May 17
j
Other loans and in- ;
•
vestments:
|
Apr. 26
i
May 3
j
May 10
i
Apr. 17
|
Total loans and in- |
vestments:
"•
Apr. 26
,
MayS
May 10
May 17
Reserve with Federal
Reserve Banks:
Apr. 26
May 3
May 10
May 17
Cash in vault:
Apr. 20.,
Mav3
Mav 10
May 17
,
Net demand deposits
on which reserve is
computed:
Apr. 26
MayS
May 10..
,
Mav 17
,
Time deposits:
Apr. 26
Mav 3
MavlO
May 17..




j

San j
Fran- I Total,
cisco. I

St.
Atlanta.! Chicago. Louis.

New
i Boston. \ York. IPhiladel-i: Clevephia.
land.

31,919 ; 153,160 !
33,582 i 148,207 !
56,492 j 264,809 !
60,223 ! 280,334 I

I

96,634 ! 161,090 i
93,773 i 163,437 \
90,980 I 161,083 I
82,214 ! 154,561 i

21,213
27,653
36,376
34,795

|
"
|
.

I

37,203 i 12,412
37,867 | 12,273
42,697 ! 15,824
15,551
44,166

5,176
6,516
6,416
6,403

335,995
324,372
349,106
324,293

271,042
251,564
267,004
271,680

722.222
772', 229
775.529
792', 825

|4,006,751 • 611,090 j 923,808
!4,00l|30l ! 614,794 : 928,965
14,051,094 ;j 622,068 !j 928,100
14,024,953 627,410 937,115

831,170
881,676
889,940
914,402

5,401,559!
5|378.589 i
5,506.400 i
5,475;73Sj
!

62,851
66,720
65,643
66,564
26,069
27.782
28; 446
27.909

638,079
G62.882
629,429
066,122

728,937
736,220
749,424
744,419

;
j
.
i

20,419
20,230
20.319
20,727

|4,331,488!
14,428,836 \
14,245,365 i
14,271,156 i

587,163
584,884
592', 722
588.079

79.210 i 320,821
98'. 879 284,790
95', 600 j 277,896
97;017 i 270,524

i
!
i
i

29,633
35,764
31.457
35,622

! 595,666
\ 709,801
| 673:313
I 670'.090

14,965 I 222., 649
15,490 I .228,335 i
14.426 ! 227;748 '
13,903 J 277,753

27,071
26,778
27,214
25; 581 !

25,107
23,528
27,545
25,081

33,577
23,240
27.771
26; 857

|
11,331,674
j 1,351,613
il,357,373
'1,346,945

14,812
14,628

2,316
2,627
3,179
3,461

!
!
!
!

316,352
311,937
483,736
501,556

450,967
455,188
454,161
462,436

176,254
171,802
169,243
173,426

483,381
482,565
487,434
484,511

;9,907,521
9,959,763
10,065,235
110,051,628

1,524,062 445,897
1,531,370 450,623
1,545,480 457,604
! 1,529,322 461,297

263,764
269,238
266,024
260,914

517,121
525,254
523,309
528,641

228,193
223,115
225,628
231,928

592,039
590,299
595,274
587,371

112,402,125
12,432,346
112,659,810
!12,6OS;72S

! 142,995 33,477 i 19,073
I 145,081
35,526 1 19,502
! 143,464 33,349 i 20,242
I 139,171 32,241 ! 17,401

42,011
44,054
44,460
39,744

16,382
16,782
17,705
15,911

42,625
45,515
43,993
46,728

ll, 180,827
il, 162,521
jl, 223,127
|1,148,U1

10,125 j 16,977
9,691
17,034
9,488
17,031
8,943
15,546

11,107
11,090
11,774
11,460

20,477
19,662
21,268
19,219

I
I
I
•

153,511
151,595
140,773
141,965

374,827
382,290
370,780
378,627

;9,100, OSS
9,269,625
18,935.572
|8,922; 611

24,541
24,090
23,175
24,840

103,845
102,205
103,499
102,282

1,421,900
1,419,056
11,398,264
11,386)698

64,121
63,937

365,392 I 228,945
371,982 j 233,388

13,555
14,663
14,754
13,403

263,760 j 204,201 1,053,322 240,125 183,402
256,037 186,741 11,050,156 272,869 I 185;881
267,650 192,606 1,024,429 252,270 1 171,088
243,175 194,964 998,254 251,343 ! 162,583
45,519 I 79,868
43,337 ! 74.253
44,669
81;868
39,136
- —

!
!
:
!

233,988
230,591

61,574
I 13,669 ! 64,157
13,224

15,48-4
15.029
15;568 j
14,845 !

8,393
8,377
12,558
14,103

370,135
375,443

1,122,101 412,986 334,296
11,130,269 400,818 i 314,875
ll,131,880 432,892 ! 335,955
1,135,842 400,668 I 338,186

631,551 j 57,349 ! 80,335
599,641 ! 55,040 I 84,354
650^252 ; 68,131 ! 81.129
595; 479 ! 62,794 i 81', 416
I 130.245
! 127; 320
I 130,375
I 126,896

!
I
'
|

349,264

347,103
347,362

75,548
75,659
74,634
74'610 I

384,545
399,653
375,147
356,247

47,058 ! 58,606
46,350 I 56,799
45,040
62,606
44! 936 I 62', 433

369,334
375,646
379.413
373,135

Principal

565

FEDERAL RESERVE BULLETIN.

JUNE 1, 1918.

resources and liabilities of member banks located in central reserve, reserve, and other selected cities, as at close of
business on Fridays from Apr. 26 to May 17, 19 IS—Continued.
1. TOTAL FOR ALL REPORTING BANKS—Continued.
[In thousands of dollars; i. e.f 000 omitted.]
Philadel-j Clevephia. ! land.

New
j Boston. I York.
!
Total net deposits on
which reserve is computed:
Apr. 2G
May 3
May 10
May 17
Government deposits:
Apr.26
May 3
May 10
May 17

st

Richmond.

Atlanta.

229,954
210,329
219,005
221,313

668,169
701,609
666,862
704,338

4,411,780
4,498,589
4,315,876
4,340,047

592,452
590,325
597,831
592,972

i 764,551
I 780,402
! 743,699
| 740,484

279,293
270,899
282,942
256,261

39,777
43,342
113,562
114,355

407.993
342', 067
379,927
650,035

43,756
43,372
37,729
83,851

I 56,341
| 56,690
i 68,531
! 104,044

5,595
10,358
24,092

-

<

11,149,056 259,642
1,152,105 292,490
1,120,057 271,621
1,093,941 270,684

13,864 45,443
11,360 42,785
32,425 47,474
29,759 119,260

i Minne- • Kansas
j apo]is> ! c i t y >

Dallas.

San
Francisco.

TotaJ.

200,367
202,579
187,277
178,744

402,127
416,693
393,929
374,977

161,499
159,371
148,338
150,037

405,980
412,951
401,830
409,311

9,524,870
9,688,342
|9,349,267
|9,333,109

11,298
11,862
20,378
25,976

10,918
10,067
29,896
30,202

7,379
6,647
7,917
18,898

2,595
3,639
12,520
21,168

| 669,352
I 606,020
i 826,989
11,284,081

24,393
23,831
52,538
65,904

2. MEMBER BANKS IN CENTRAL RESERVE CITIES.
CENTRAL RESERVE
CITIES.

Number of reporting
banks:
Apr.26
May 3
May 10
May 17
United States bonds to
secure circulation:
Apr.26
May 3
May 10
May 17
Other United States
bonds including Liberty bonds:
Apr.26
May 3
May 10
May 17
United States certificates of indebtedness:
Apr.26
May 3
May 10
May 17
Total United States
securities owned:
Apr.26
May 3
May 10
May 17
Loans secured by
United States bonds
and certificates:
Apr.26
May 3
May 10
May 17
Other loans and investments:
Apr.26
May 3
May 10
May 17
Total loans and investments:
Apr.26
Mav 3
,
May 10
May 17
Reserve with Federal
Reserve Banks:
A or. 2G
May 3
May 10
i
May 37.
'




120
120
120
120
36,323
36,465
36,473
36,573

151,687
148,690
275,527
268,676

10,374
10,392
10,393
10,392

48,139
48,300
48,309
48,408

15,615 i 8,649
15,491 i 10,016
52,371 18,450
50.875 14,802

175.951
174', 197
346,348
334,353

1.442
1.443
1,443
1,443

:
i
j
i

805,879
798,990

65,045
62.470
29,707
30,006

34,392 i
31.847 !
28,123
28,350

1,100.205
1,083', 307
' 863,709
857,346

1,188,778
1,174,145
1,117,879
1,104,239

82,102
79,404
83,521
82.324

53.415
52,255
56,9(56
53,544

1,324,295
1,305,804
1,258; 366
1,240,107

1,000,768

i
135,271
130,549
242,321
257.273
3,671,200
3,671,101
3,700,416
3,687,226
4,995,249 !
j
4,975,795
5,060,616
5,048,738
004,353
571;677
023.574
567;161

164,735
149.167
268,131
284,143

22,772
6,692 i
12,145
6,473 i
15,713 | 10,097 !
15,671 i 11,199

I815,898

.14,746,306
.14,750,143
.14,785.917
.14; 777; 405

259.208 '
815,348 263,694
820,741 264,760
821,154 269,025

: 920,772
• 903.879
"
i 919'. 975
;
919^149

319,315 !.
322;422 I.
381,823 '
.
333.768 .
.

99,435 25,747 i
101,588 1 27,334 :
101,742 i 24,820 j
96,322 ! 24,686 :

.16,235,336
.;6,205,114
.:G; 312,414
.6.301,655
I
i
I
j

i
!

I

729,535
700,599
750,136
. . 088,169
.!

566

FEDEKAL RESERVE BULLETIN".

JUNE 1, 1918.

Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities, as at close of
business on Fridays from Apr. 26 to May 17, 1918—Continued.
2. MEMBER BANKS IN CENTRAL RESERVE CITIES—Continued.
[In thousands of dollars; i. e., 000 omitted.]

Boston.

New
York.

Richmond.

Philadel- Cleveland.
phia.

St.
Atlanta. Chicago. Louis.

Minneapolis.

Kansas
City.

Dallas.

San
Francisco.

Total.

CENTRAL RESERVE

CITIES—contd.

Cash in vault:
Apr. 26
May 3
May 10
May 17
Net demand deposits
on which reserve is
computed:
Apr. 26
May 3
May 10
May 17
Time deposits:
A pr. 26
May 3
May 10
May 17
Total net deposits on
which reserve is computed:
Apr. 26 .
May 3
May 10
May 17
Government deposits:
\nr 26
May 3
May 10
May 17

38,229
38,9H
39,184
37,650

7,490
7,592
8,288
7,663

163.849
161', 411
164,399
158,743

4,045,438
4,121.824
3,960,888
3,968,140

707,196
717,866
683,451
668,880

161,103
193,920
180,871
182,857

4,913,737
5,033,610
4,831,210
4,819,877

277,779
243,395
234,825
226,747

135,035
133,372
130,630
130,899

56.528
55;466
54,724
54,712

469,342
432,233
420,179
412,358

118,130
114,908
116 927
113,430

!
:::::::: *:::::::::

i

4J09,541
4,177,992
4,015,078
4,020,466

1

738,358
748,644
719,596
699,087

174,148
206,720
193,500
195,483

5,022,047
5,133,356
4,928,174
4,915,036

392,820
326,006
352,707
593,741

!
i
I

33,371
32,115
36,082
96,221

20,646
19;904
41,691
54,184

446,837
378,025
430,480
744,146

j

3. MEMBER BANKS IN R E S E R V E CITIES.
BBSEKYB CITIES.

Number of reporting
banks:
Apr. 26
May 3
May 10
May 17
United States bonds to
secure circulation:
Apr. 26
May 3
May 10
May 17
Other United States
b o n d s , including
Liberty bonds:
Apr. 26
May 3
May 10
May 17
United States certificates of indebtedaess:
Apr. 28
May3
May 10
May 17
Total United States
securities owned:
Apr. 26
May 3
May 10
May 17
Loans s e c u r e d b y
United States bonds
and certificates:
Apr. 26
May 3
May 10...
May 17..




33
33
32
33

60

42

8,965 34,863
8,985 ! 35,230
8,965 35,230
3,968 35,359

13,694
13,691
13,694
13,684

12,170
11,085
11,865
12,255

17,449
17,449
17,449
16,949

5,330
5,330
5,330

3,240

14,012
14,012
14,012
14,014

3,290
3,290

15,133
15, 128
14, 526
15 106

35,399
35,299
35,399
35,055 i

8,738
8,625
14,206
14,984

15,898 ! 154,977
15,473 j 161,441
22,880 279,211
21,241 I 253,082

38,489
42,166
30,159
27,920

17,678
17,955
15,437
16,809

52,996
52,514
41,170
40,320

394,303
388,900
262,235
258,293

22,915
23,701
20,834
19,285

63,147
66,814
65,151
61,874

41,549
41,706
44,169
46,899

104,291
103,286
99,449
96,616

721,879
722,095
713,500
683,829

2,191
2,501
3,004
3,175

3,007
3,252
3,997
4,331

3,440
3,727
5,056
4,928

4,367
4,448
8,391
8,244

131,966
141,408
187,031
188,968

4,498
4,498
4,498
4,498

7,796
7,796
7,796
7,796

10,916
13,663
11,795

7,132
8,830
25,566
21,448

10,770
10,958
27,231
20,049

36,381
38,140
74,684
69,324

13,263
13,322
15,536
15,170

14,205
16,685
22,410
19,275

20,267
19,421
29,813
28,352

j 3,302
I 3,143
I 4,461
I 4,361

5,981
7,259
7,781
7,143

10,646
10,633
20,980
19,940

38,863
32,736
18,156
21,040

11,26-4
11,239
7,604
7,454

| 63,832
i 60,436
| 41,758
| 40,859

72,881
75,332
35,137
33,862

18,477
19,036
15,358
14,263

23,008
22,018
18,077
18,962

37,448
36,991
26,384
24,756

5,943
5,325
3,234
3,146

13,644
13,152
9,763
8,902

51,757
48,150
38,317
37.333

83,367
25,192 ' 80,359
27,895 77,952
40,966
69,876
36,698

144,105
148,702
145,051
138,545

45,434
46,052
44,588
43,117

49,383
49,768
52,352

75,164
73,861
73,646
70,057

14,575
13,801
13,025
12,837

26,195
28,320
47,023
50,627

8,858
8,874
10,593
11,361

36,391
37,059
41,798
43,264

10,363
10,243
13,414
13,774

4,845
6,247
5,912
5,952

10,566
10,643
11,497
10,545

1,299
1,463
1,892
1,870

j

20,444
26,631
34,454
32,897 !

416
418
419
422

j
!
i
i

172,599
171,754
172,054
172,254

587

FEDERAL RESERVE BULLETIN".

JUNE 1,1918.

Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities, as at close of
business on Fridays from Apr. 26 to May 11, 1918—Continued.
3. MEMBER BANKS IN RESERVE CITIES—Continued.
[In thousands of dollars; i. e., 000 omitted.
New
York.

Boston.

Philadol-i Clove- j Richphia. I land. I mond.
!

RESERVE CITIES—COn.

Other loans and investments:
Apr. 26
Mav3
May 10
May 17
Total loans and investments:
Apr. 26
Mav3
M> 1
May 17
Reserve with Federal
Reserve Banks:
Apr.26
May3
May 10
May 17
Gash in vault:
Apr.26
May3
May 10
May 17
Net demand deposits
on which reserve is
conrouted:
Apr. 28
May 3
May 10
May 17
Time deposits:
i
Apr.26
i
Mav3
May 10
!
May 17
|
Total net deposits on I
which reserve is !
computed:
!
Apr.26
1
May 3
j
May 10
i
May 17
j
Government deposits:!
A.pr. 26
1
May3
i
May 10
May 17

543,586
545,382
556,551
567,102

146,487
142,789
146,309
146,196

542,726
545,949
552,799
559,583

621,538
619,852
639,891
655,062

181,537
179,558
197,868
194,255

648,537
652,939
665,205
662,356

52,088
53,617
52,255
52,779

13,900
15,063
14,182
15,910

19,153
19,052
19,570
18,777

4,836
4,927
5,544
5,850

508,426
505,057
477,089
504,506

130,917
128,824
115,908
129,943

30,017
27,525
26,146

!

St.
Atlanta. Chicago. Louis. I MinneI arcolis.

City.

450,967
455,188
454,181
462,436

149,220 483,381 4,417,271
147,635 482,565 4,439,562
142,095 487,434 4,468,14.6
147,165 484,511 4,494,002

98,779 196,855
100,688 202,900
98,112 1 203,362
97,919 I 197,726

517,121
525,254
523,309
528,641

194,209
193,008
191,320
198,992

592,039
590,299
595,274
587,371

5,271,116
5,303,065
5,368,677
5,366,599

42,011
44,054
44,4.60
39,744

14,528
14,873
15,842
13,942

42,625
45,515
43,993
48,728

401,516
411,295
420,396
408,818

9,840 ! 20,477
9,372 j 19,662
......
10,029 j 21,268
9,958 | 19,219

173,002
178,157
178,017
178,383

|
i
i
|

299,858
302,870
308,322
304,612

294,046
284,040
292,375
297,347

596,979
610,102
610,683
595,383

21,288
21,811
21,205
20,876

23,282
21,998
25,475
23,103

43,171
42,675
40,870
41,969

6,313
6,908
7,340
5,942

12,040
11,878
13,228
13,302

23,137
24,701
24,429
25,769

5,041 ! 8,763 18,977
5,627 ! 6,319 17,034
17,034.
5,213 '• 6,303
17,031 !
4,426 6,051 15,546 |

1,031,618
1,040.895
1,042^56
1,046.935
75,158 1
79,151 I
75,738 j
76,774;

517,814 632,792 194,631 182.358 342,513
513,894 | 646,792 :i 196,717 170)389 323,720
525,886 j 613,217 193,948 170,696 325,859
174,987 320,200
519,592 | 608,688 ; 187,024

17,562 I 8,747
16,772 i 9,311
16,632
8,350
17,086
8,289

517,431
513,574
485,347
512,349

136,188
133,856
120,898
135,069

520,438
516,687
528,391
522,079

34,950
36,680
97,773
98,274

6,286
7,462
9,420
28,498

41,729
41,347
36,129
79,323

Total.

171,749
176,698
179,524
175,266

82,905
85,424
83,195
83,212

17,184 | 26,001! 11,753
16,291 i 31,454 i 11,540
16,834 27,261 ! 11,307
16,512 31,130
11,843

!
I
!
I

San
Fran-

1"
851,122 244,061 239,818 511,249
857,134 246,575 228,625 525,598
856,107 250,320 234,111 525,540
865,126 247,721 240,903 514,781

51,722 '
49,739!
62,195 i
57,039 I

Dallas.

!
!
!
i

62,371
62,355
55,748
54,574

15,430
15,893
16.841
14; 010

142,131
144,710
134,231
126,191

384,545
399,853
375,147
I 356,247

131,358
131,219
119,918
120,955

i 374,827
! 382,290
! 370,780
;378,627

3,604,681
3,805,620
3.478,427
3; 481,514

i 103,845
!102,205
I103,499
! 102,282

791,535
808,523
796,819
795,15S

65,924
64,045
67,573
88,073

211,867
231,439
212,258
212,259

13,063
14,251
14,083
14,096

58,806
"* —
56,799
•
62.806
62', 433

19,677
19.821
18; 407
20,020

694,710 ! 203,908 202,135
710,393 " 205,375 189,602
.
678,729 ! 202,935
672,183 j 195,628 195,409

406,073
393,152
389,536
383,878

66,290 I 149,805 402,127
68,630 152,099 413,693
59,973 ! 141,497 393,929
58,803 | 133,416 374,977

137,259
137,165
125440
125,440
126,961

208,393
212,002
211,708
211,716

!
.
I
:

30,922
28,860
29,958
28,674

55,449 ! 4,584
55,988 i 8,223
67,135 ! 16,247
102,593 ! 14,933

11,983
9,076
28,319
25,571

11,823
10,381
11,100
22,643

3,083
3,286
8,157
8,889

24,912 !I
24,629
24,220
24,084

I
!
1
|

10,575
10,301
18,432
23,749

405,980 3,842,142
412,951 3,848,177
401830
401,830 3,717,473
i 409,311 3,720,061

10,918 | 8,712 : 2,595
10,067 ! 6,083 I 3,639
29,896 j 7,499 ; 12,520
30,202
17,178 j 21,168

200,687
202,493
342,627
473,021

4. MEMBER BANKS OUTSTDE RESERVE CITIES.
COUNTRY BANKS.

Number of reporting
banks:
Apr.26
May 3
May 10
May 17
United States bonds
to secure circulation:
Apr.26
May 3
May 10
May 17
Other United States
b o n d s including
Liberty bonds:
Apr. 26
May3
May 10
May 17




25
25
25
25
10,123
10,123
9,623
10,123

6,548
6,548
6,548
6,548

4,011
4,010
4,010
4,010

4,739
5,460
5 276
5,849

8,516
9,074
16,201
14,534

3,035
3,098
4,244
3,709

24
24
30
22

7
7
8
7

3
5
5
5

6
6
6
6

17
17
16
16

8
7
3
8

145
148
154
148

7,656
7,677
7,657
7,657

9,182
8,284
10,124
7,915

2,530
2,480
2,830
2,530

350
750
750
750

1,670
1 670
1,670
1,715

2,457
2 457
2,454
2,402

2,428
2,186
2,453
2,453

46,955
46,185
48,119
46,103

2,743
2,563
4,366
4,395

5,628
5,407
9,637
7,721

1,487
1,341
3,212
3,190

721
1,698
1,789
1,999

1,034
1,240
1,922
2,529

1,636
1 657
2,499
2,356

1,723
902
2,385
2,014

31,262
32,440
51,531
43,296

13
13
13
13

568

FEDERAL BESEEVE BULLETIN.

JDNE 1, 1018.

Principal resources and liabilities of member^ banks located in central reserve, reserve, and other selected cities, as at close of
business on Fridays from Apr. 26 to May 17, 1918—Continued.
4. MEMBER BANKS OUTSIDE RESERVE CITIES—Continued.
[In thousands of dollars; i. e., 000 omitted.]
I

New Philadel- CleveBoston. York. phia.
land.
COUNTRY BANKS—
continued.
United States certificates of indebtedness:
Apr. 26
May 3
May 10
May 17
Total United States
securities owned:
Apr. 26
May 3
May 10
May 17
Loans s e c u r e d by
United States bonds
and certificates:
Apr. 26
May3
MavlO
May 17
Other loans and investments:
Apr. 26
May 3
May 10
May 17
Total loans and investments:
Apr. 26
May 3
May 10
May 17
Reserve with Federal
Reserve Bank:
Apr. 26
May 3
May 10
May 17
Cash in vault:
Apr. 26
May 3
May 10
May 17
Net demand deposits
on which reserve is
computed:
Apr. 26
May 3
May 10
May 17
Time deposits:
Apr. 26
Mav3
May 10
May 17
Total net deposits on
w h i c h reserve is
computed:
Apr. 26
May 3
May 10
May 17
Government deposits:
Apr. 26
May 3
Mav 10
May 17




10,410
12,132
6,703
8,049

11,614
11,419
8,903
8,432

6,221
6,206
4,774
4,619

25,272
27,715
21,602
24,021

26,678
27,041
31,652
29,514

13,267
13,414
13,028
12,338

5,724
7,262
9,469
9,596

9,031
8,784
11,895
11,700

178,636
226,847
218,978
225 723

RichSt.
Minnemond. Atlanta. Chicago. Louis. j apolis.

6,586 !
6,495 !
4,009 I
3.964
3,964 I

4,335
4,430
3,613
2,071

4,678
3,206
4,141
3,891

474
804
630
390

1,418 i
1
1,328
l|l26

5,495
5,408
3,070
2,819

16,985
16,735
16,032
16,016

19,145
18,121
23,374
17,707

8,695
7,027
10,183
9,611

1,545
3,252
3,169
3,139

4,122
4,208 !
4,920
5,370

769
1,022
1,922
1,898

812

331

902

2,0-19
2,030
2,410
1,777

504
451

452
561
641

189,064
187,411
204,369
191,531

68,364
68,845
69,269
67,827

72,686
71,831
71,993
71,989

91,934
77,797
98,786
76,572

31,224
22,939
32,893
30,777

209,632
261,824
250.049
259)340

224,773
223,236
247,916
232,745

82,400
83,281
84,219

90,483
89,374
88,924
88,907

113,128
! 97,948
! 124,570
. 96,056

10,763
13,103
13,388
13,785

13,298
12,901
12,496
12,408

5,627
5,301
5,936
5,755

5,177
5,203
5,391
4,642

7,279
3,235
7,485
3,939
7,904 | 3,485
7 616 ! 4,215

City.

6,916
8,730
8,876
9,132

129,653
157,825
152,340
161,616

155,133
176,188
168,569
173,073

49,199
70,490
68,075
70,871

Dallas.

Fran- Total.
Cisco. I

25,4S0
24,623
26,439
26,691

2,624
2,152
2,048

53,861
54,122
39,323
37,409

9,522
8,023
7,577

6,781
5,712
6,990
6,515

132,078
132,747
i 138,973
i 131,808

402
441
569
1,034

125
126
175

169
168
170
160

19,651
21,362
28,574
28,445

4,527
10,667
11,092
11,010

23,279
22,864
22,180
23,206

57,196
56,690
54,464
55,325

27,034
24,167
27,148
26,261

743,944
770,058
811,172
780,221

40,250
30,235
43,580
40,839

6,311
14,371
14,822
14,790

27,803
27,513
27,669
29,610

66,909
66,338
62,662
63,188

33,984
»™5
30,047
34,308
32,936

895,673
924,167
978 719
940,474

5,783
4,967
6,009
4,705

1,825
1,530
2,070
1,978

818
852
880

1,417
1,286
1,189
1,613

!
|
I
|

3,643
3,609
3,401

49,776
50,627
52,595
51,120

3,632
4,310
4,196
4,492

3,731
3,489
4,261
3,002

1,629
1,346
1,584
1,326

208
545
508
518

1,024 |
1,444
1,253
1,314

3,362
3,372
3,185
2,892

1,854
1,909
1,' "
1,'
1,467
1,418
1,745
1,502

69,349
70,990
66,836
68,487

62,874
63,009
60,096
61,428

69,129
59,320
73,702
56,151

21,843 i
16,352 i
21,910 !
19,977 |

3,613
8,570
9,119
9,174

16,651
16,594
15,651
13,912

41,271
41,171
36,857
36,392

22,155
20,376
20,855
21,010

591,671
630,395
625,935
621,220

6,218
6,179
6,076
5 614

I
!
I
I

2,630

16,256
16,333
16,040
16,037

14,597
14,477
14,711
10,462

13,944 I

2,362
4,058
4,215
4,204

5,957
5,942
5,827
5,802

22,146
21,721
20,820
20,852

4,864
4,269
4 768
4,820

161,023
178 300
181 266
179,182

10,208 !
14,295
13,829

32,483
36,078
36,997

I

150,738
188,0*5
181,515
191,989
4,827
6,682
15,789
16,081

8,887
8,599
17,800
27,796

72,014
73,638
69,440
70,893

166,053
186,741
179,900
184,512
|
!
!
i

69,841
70,009
66,970
68,301

75,385
65,524
80,007
60,635

27,819
20,727
28,037
25,904

4,625
10,309
10,925
10,976

19,204
19,140
18,148
16,398

50,762
50,480
45,780
45,328

24,240
22,206
i 22,898
23,076

660,681
706,809
703,620
698,012

2,027
2,025
1,600
4,528

892
722
1,396
1,451

1,011
2,135
7,845
5,696

1,881
2,284
4,106
4,188

249
289
292

664
641
2,690
2,831

723
1,561
1,946
2,227

667
564
418
1,720

21,828
25,502
53 882
66,914

JCNE 1,1918.

569

FEDEBA.L RESEBVE BULLETIN.

EARNINGS ON INVESTMENTS OF FEDERAL RESERVE BANKS.
Average amount of earning assets held by each Federal Reserve Bank during April, 1918, earnings from each class of earning
assets, and annual rates of earnings on basis of April, 1918, returns.
Average balances for the month of the several classes of earning assets.
Bills discounted for
members
and Federal
Reserve
Banks.

Bills bought
in open
market.

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

355,877,376
357,051,485
29,444,642
50,381,548
40,136,106
16,953,525
75,494,942
38,715,606
10,180,000
38,747,575
23,958,330
32,318,052

$14,283,035
121,813,274
23,873,444
24,537,826
8,838,033
9,600,674
45,687,505
11,571,591
11,257,000
10,946,378
5,178,892
24,390,553

Total....

7-39,259,187

311,984,205

Banks.

Bills disHills
counted for
bought
members
and Federal in open
market.
Reserve
Banks.

Municipal warrants.

Total,

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




8194,203
1,166,930
98,800
175,702
136,546
60,225
266,082
131,023
39,422
147,338
81,920
117,488

849,232
409,805
80,109
83,523
31,122
33,107
171,329
37,951
38,191
37,472
18,413
80,978

2,615,679 1,071,232

$6, 547

219, 547
33, 531
65, 952
5, 979
14, 899 .
24, 812
5, 945 !
15, 730
33, 988
16, 358
12, 240
455,528

82, 403,195 j

68, 287,272
,
10,
22, 362,697
519,327
2, 782,000
4,
10, 974,927
2, 293,383
5, 744,400
693,000
12, 981,640
7, 005,113
5, 541,533
155,588,487

Total.

i
|

§72,563,606
547,152,031
63,680,783
97,438,701
51,756,139
31,578,424
131,475,830
53,031,597
27,130,000
62,675,593
36,628,737
62,256,138

849,298

486,402
535,700

1,237,367,579

Calculated annual rates of earnings from—

Earnings from-

Banks.

United
| Municipal l
securities. j warrants. !

8194

1,621
1,815

S249,982
1,796,282
212,440
325,177
173,647
108,425
462,223
174,919
93,343
218,798
118,312
210,706
4,144,254

Bills discounted
Bills
for mem- bought
United
Municbers and in open
States j ipal warFederal market. securities, rants.
Reserve
Banks.

Total.

Per cent. Per cent. Per cent. \ Per cent. Per cent.
3.85
4.06
3.21
4.09
4.09
3.99
3.97
3.91
4.08
4.05
4. OS
3.93
4.14
4.24
3.56
4.06
4.28
4.14
2.61
4.08
4.06
4.62
4.18
3.53
4.04
4.41
4.15
4.14
2.84 !
3.99
4.12
4 01
2.64 i
4.13
4.71
3.36
4.19
4.06
4.63
3.19
4.23
4.32
4.16
2.84 ;
4.06
3.93
4.04
4.42
2.65
4.12
4.14

4.18

3.56

4.12 I

4.07

570

FEDERAL RESERVE BULLETIN'.

JUNE 1.1918.

GOLD IMPORTS AND EXPORTS.
Gold imports and exports into and from the United States.
[In thousands of dollars; i. e., 000 omitted.]
Week e n d i n g Apr. 26,
1918.

May 3,
1918.

Mav 10,
1918.

May 17,
1918.

Total
since
Jan. 1,
1918.

Total for
corresponding period
in 1917.

IMPORTS.

100

177

109

137

4,023

576

Or© and base bullion
United States mint or assav office bars
Bullion refined
United States coin . .
Foreign coin

628

234

241
1

6,ii8

2,491
142

5,754
9
250,554
52,077
76,910

379

12,774

385,304

10
121

99
14,096
1 549
86,612

10
686

805

590

100
928

30
4
368

562

42
151
3 374
12,533

590

1,034

402

693

16,100

102,356

1

Total

1

1

307

31
4,840

343

EXPORTS.

Domestic:
Ore and base bullion
United States mint or assay office bars.
Bullion refined
Coin

6

Total
Foreign:
Bullion refined
Coin

.

1

1

1

591

1,035

403

Total
Total exports

307

4,871

16,407

693

107,227

Excess of gold exports over imports since Jan. 1, 1918, §3,633; excess of gold imports over exports since Aug. 1, 1914, $1,046,671.

DISCOUNT RATES.
Discount rates of each Federal reserve bank approved by the Federal Reserve Board up to May 31, 1918.
Maturities.
Discounts.

Federal reserve bank.

Within 15
days,
including
member
banks'
collateral
notes.

16 to 60
days.

61 to 90
days.

Agricultural and
live-stock
paper
over 90
days.

Trade acceptances.
Secured by U. S. certificates of indebtedness or Liberty loan
bonds.
Within 15
days, including
member
banks'
collateral
notes.

Ito60
days,
inclusive.

61 to 90
days,
inclusive.

16 to 90
days.

Boston
New Y o r k i . . .
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas City...
Dallas
San Francisco.
1

I
Rate of 3 to 4J per cent for 1-day discounts in connection with the loan operations of the Government.

NOT?: 1.—Acceptances purchased in open market, minimum rate 4 per cent.
NOTE 2.—Rates for commodity paper have been merged with those" for commercial paper of corresponding maturities.
NOTE 3.—In case the 60-day trade acceptance rate is higher than the 15-day discount rate, trade acceptances maturing within 15 days will be
taken at the lower rate.
NOTE 4.—Whenever application is made by member banks for renewal of 15-day paper, the Federal reserve banks may charge a rate not
exceeding that for 90-day paper of the same class.




FEDEBAL SESEKVE BULLETIN,,

JUNE 1,1918.

DIGEST AND INDEX.
In 1917 the Federal Reserve Board published
a " Digest and Index of Opinions of Counsel,
Informal Eulings of the Federal Eeserve Board,
and Matter Relating Thereto." This was
compiled from the Federal Reserve Bulletin
and covered the opinions and rulings for the
year 1915-16. There is herewith presented a
similar digest for the year 1917 and the year
1918 to and including April, 1918. The matter
has been arranged under the same topics as
were employed in the original Digest and Index.
ACCEPTANCES.
OPINIONS OF COUNSEL.

Acceptances, Where Payable.
An acceptance to pay at a particular place different
from the residence of the acceptor is a general acceptance,
unless it expressly states that the bill is to be paid there
and not elsewhere, and does not render the bill nonnegotiable.
(Page 289, April, 1917, Bulletin.)
Acceptances by Correspondents—When a Direct
Liability.
Drafts accepted by foreign correspondents at the request, and under the guarantee of a national bank in the
United States, should be reported as a direct liability of
such national bank, and should be treated as subject to
the limitations imposed by the Federal Reserve Act on
the acceptance power of national banks.
(Page. 311, April, 1918, Bulletin.)
Bankers' "Dollar Exchange" Acceptances.
The 50 per cent limit imposed upon the amount of drafts
which a member bank may accept for the purpose of furnishing dollar exchange is separate and distinct from and
not included in the limits imposed by section 13 upon the
amount of drafts or bills of exchange drawn against the
shipment of goods or against warehouse receipts covering
readily marketable staples, which a member bank may
accept.
(Page 528, July, 1917, Bulletin.)
Bankers' Acceptances Without Documents, as "Accommodation."
The acceptance of a draft by a member bank against an
acceptance agreement which purports to assign to the
bank certain collateral security, but which does not specifically mention any security as assigned, is an ordinary
accommodation acceptance, and is not authorized by law.
(Page 311, April, 1918, Bulletin.)
Bankers' Domestic Acceptances, Eligibility of.
A draft drawn by the purchaser of goods against a national bank is not eligible for acceptance by that bank
under the provisions of section 13 of the Federal Reserve
Act merely because it is secured by a bill of lading covering the goods bought. (Page 380, May, 1917, Bulletin.)




571

Bankers' Export Acceptances Defined.
Where a dealer is engaged in purchasing the same character of goods for export and for domestic use, a member
bank accepting his draft drawn to finance an export transaction should require proper assurances that proceeds of
draft are to be used in connection with such export transaction and that the acceptance will be paid out of proceeds of sale of goods exported.
(Page 314, April, 1918, Bulletin.)
Bills, Demand and Sight, When to be Presented.
Demand and- sight bills of exchange must be presented
for payment by the holder within a reasonable time.
Demand and sight bills become due and payable on the
date on which they are presented for acceptance.
If a member bank holds demand and sight drafts for
more than a reasonable time after acceptance, they must
be classed as overdue paper and considered in substance
as promissory notes of the acceptor subject to the limitations imposed by section 5200.
(Page 31, Jan., 1917, Bulletin.}
Bills Drawn Against Actually Existing Value.
A bill of exchange discounted before acceptance may be
said to be drawn against actually existing value, within
the meaning of section 13 of the Federal Keserve Act.
when and only when it is accompanied by shipping
documents, warehouse receipts, or other papers securing
title to the goods sold. An accepted bill of exchange,
unaccompanied by shipping documents or other such
papers, may be considered as drawn against actually
existing value if drawn against the drawee at the time of,
or within a reasonable time after, the shipment or delivery
of the goods sold. In this latter case there must be reasonable grounds to believe that the goods are in existence in
the hands of the drawee either in their original form or in
the shape of the proceeds of their sale.
(Page 195, Mar., 1917, Bulletin.)
Bills Payable to the Order of the Drawee.
A bill made payable to the order of the drawee is not
negotiable "until the drawee as payee has indorsed it.
When it has been accepted and indorsed by the drawee
it is a valid negotiable instrument in the hands of a third
party, and the drawer is not released, since the terms of
his order have been specifically complied with.
(Page 110, Feb., 1918, Bulletin.)
Drafts with Documents Attached—Conveyance of Title,
Under the provision of section 13, which authorizes
any member bank to accept drafts based upon domestic
shipment of goods, provided shipping documents conveying or securing title are attached, such documents
must be made out or indorsed so as to convey or secure
title to the accepting bank.
(Page 198, Mar., 1918, Bulletin.)
Drafts, Interest on.
A provision in a draft or bill of exchange that it is payable "with interest at the rate of — per cent per annum
after maturity if payment is delayed " does not affect the
negotiability of the instrument.
(Page 200, Mar., 1917, Bulletin,)

572

FEDERAL RESERVE BULLETIN.

Drafts Payable on or Before Certain Date.
Drafts payable "ninety'days from date or before on five
days after demand (i. e.s on live days' notice) by the holder
hereof" are negotiable and eligible for discount with a
Federal Reserve Bank.
(Page 291, Apr., 1917, Bulletin.)

I

JUNEI, 192 8.

Trust Receipts as Actual Security for Acceptance Transactions.
If an acceptance is secured by shipping documents
which are surrendered by the acceptor for a trust receipt
which permits the purchaser of the goods to retain control
of the goods, the accepting bank can not be said to be
secured "by some other actual security" as provided in
section 13 of the Federal Reserve Act. A trust receipt,
however, which does not permit the purchaser to procure
control of the goods, may properly be said to be actual
security within the meaning of the act.
(Page 881, Nov., 1917, Bulletin.)

Drafts to Finance Sales to the United States Government.
Drafts drawn in connection with sales to the United
States Government of lumber or other material can not be
treated as bills of exchange drawn against actually existing
value and are subject to the limitations of section 5200,
Revised Statutes, when discounted by national banks.
Such drafts do not conform to the requirements of comINFORMAL RULINGS.
modity paper as defined by the Federal Reserve Board and
should not be discounted at the rate prescribed for such Acceptance Given by Acceptance House or Broker.
paper.
(Page 32, Jan., 1918, Bulletin.)
The note of an acceptance house or broker could not
Drafts Drawn on Sales Corporations.
be said to have been used for an industrial, agricultural,
A draft drawn by a lumber corporation UJJOII a sales cor- or commercial purpose, since the business of such acceptporation which it and a number of other lumber concerns ance house or broker is not such as to come within any of
have organized will, when accepted, become a trade these classifications. The fact that the note is secured
acceptance, even though the selling corporation is a stock- by eligible paper is immaterial if the proceeds are not
holder of the sales corporation, provided the latter is used for one of the purposes mentioned.
organized in good faith and not merely to act as an agent
(Page 108, Feb., 1918, Bulletin.)
for the purpose of evading the law.
Acceptances—Exports Defined.
(Page 33, Jan., 1918, Bulletin.)
Drafts with Documents Attached—Definition.
A provision of section 13 which authorizes any member
bank to accept drafts based upon the domestic shipment
of goods, provided shipping documents are ''attached,"
should not be construed so as to require that the documents
be physically fastened to the draft. It is sufficient if
the accepting bank has possession of the documents at
the time of acceptance. (Page 765, Oct., 1917, Bulletin.)

Clean drafts drawn by an exporter in Chile for the purpose of providing funds with which to purchase beans,
peas, etc., from farmers in Chile, are ineligible unless the
Chilean exporter is under contract to ship the peas, beans,
etc., purchased from the farmers in that country, to some
other country, and the member bank has a guarantee to
this effect. "
(Page 378, May, 1917, Bulletin.)

Bankers' Acceptances Drawn Against Future Importations.
Member Banks' Acceptances, Status of.
An acceptance which has been purchased by the
A national bank may properly accept a draft drawn for
accepting bank and subsequently rediscounted with its the purpose of importing goods whether or not the sale
Federal Reserve Bank is not subject to the limitations of of the goods under consideration has actually been consection 5200 of the Revised Statutes.
summated at the time of the acceptance of the draft,
(Page 696, Sept., 1917, Bulletin.)
(Page 527, July, 1917, Bulletin,)
Trade Acceptances Based on Advertising Space.
The Federal Reserve Board may properly rule that a Bankers' Acceptances—When Drawn Against Exports.
draft or bill of exchange drawn by the seller on the purNo national bank can legally accept a draft drawn upon
chaser of advertising space and accepted by such purchaser it by an acceptance house which pledges as collateral
is a trade acceptance. (Page 116, Feb., 1917, Bulletin.)
security for the bill an acceptance based upon a transaction involving the importation or exportation of goods.
Trade Acceptance Providing for Discount if Paid at
(Page 28, Jan., 1917, Bulletin.)
Maturity.
A trade acceptance which consists of an order to pay
a certain amount, which is the amount of the debt minus Bankers' Acceptances Drawn Against Shipment of Goods
from a Corporation to its Agent.
a discount for prompt payment at maturity, or, if not
paid at maturity, to pay a greater amount, which is the
A member bank may properly accept a draft drawn
amount of the debt without any discount, is an order to against the shipment of goods from a corporation to its
pay a sum certain and is negotiable.
agent or branch even though no sale of the goods is involved
(Page 200; Z-.I&r., 1918, Bulletin.)
in the transaction.
(Page 690, Sept., 1917, Bulletin.)




1, 1918.

FEDEEAL RESERVE BULLETIN.

Bankers' Acceptances Against Bullion.
Gold bars may be properly considered as goods, and
accordingly 60-day bills when accepted by banks and
bankers against such a shipment would be eligible for
purchase by Federal Reserve Banks as based upon or
involving the exportation of goods.
(Page 29, Jan., 1917, Bulletin.)

!

573

Drafts Drawn "On or Before 90 Days After Sight."
Bills drawn "on or before 90 days after sight" should
not be encouraged or countenanced.
(Page 949, Dec, 1917, Bulletin.)

Draft, Form of.
A draft made payable at sight and accepted by the
drawee is negotiable even if it contains the following provision: "With interest at the rate of 6 per cent per annum
Bankers' Acceptances —Security Therefor.
if payment is delayed."
There is no objection to permitting the mills to substitute
(Page 109, Feb., 1918, Bulletin.)
other warehouse receipts for cotton receipts during the life
of the acceptance. In purchasing or discounting bankers' Limitations Under Section 5200 E. S.
acceptances or other bills which are secured hy warehouse
Where a national bank has already loaned 10 per cent of
receipts, etc., Federal Reserve Banks should make sure its capita] and surplus to a certain company, it may. while
that the receipt is issued hy a warehouse which is inde- the loan is still outstanding, obligate itself as acceptor
pendent of the borrower. If the credit were granted before on a draft drawn by that same company. The limitations
the importation took place, there would be no objection of section 5200 on the amount of money which may be
to continuing or renewing the acceptance while the goods borrowed from a member bank are separate and distinct
are on the docks.
(Page 30, Jan., 1917, Bulletin.)
from and in no way restrict the limitations "of section 13
of the Federal Reserve Act on the amount of drafts which
Bank's Own Acceptances, Purchase of.
a member bank might accept for any one firm or corporaA member bank's own acceptances purchased by it tion.
(Page 197, Mar., 1918, Bulletin.)
must be treated as loans and as such are subject to the
Limitations Imposed by Section IS of Act.
10 per cent limitation. (Page 28, Jan., 1917, Bulletin.)
In any case where shipping documents or warehouse
The right of the bank to resell or reissue such acceptances is, in the opinion of counsel, fully recognized by the receipts are held by the acceptor the 10 per cent limit does
authorities, and where this is done they may be treated as not apply; so also in any case where the acceptor holds a
trust receipt which does not enable the borrower to obtain
acceptances outstanding and not as loans.
the goods for his own use, the 10 per cent limit does not
(Page 691, Sept., 1917, Bulletin.)
apply; but in any case where the bank holds merely the
Bills Drawn Against Coin.
ordinary trust receipt which gives it only a lien on the
Gold coin is "goods" within the meaning of section 13 goods in the hands of the purchaser or on their proceeds,
of the Federal Reserve Act, and therefore a bill of exchange the 10 per cent limit should apply.
(Page 286. Apr., 1917. Bulletin.)
drawn to finance a shipment of gold coin from this country
either to Europe or to Canada is eligible for purchase by a Syndicate Acceptance Credits.
Federal Reserve Bank if otherwise in conformity with
The Board has authorized expression of its views in
the provisions of law and the regulations of the Federal Reaccordance with the principles outlined in a memorandum
serve Board.
(Page 29, Jan., 1917, Bulletin.)
attached. The banks of New York may, during a period
which can be declared ended at any time, proceed upon
Differential as to Acceptances.
the basis of this memorandum. The essential principles
There is no objection to a moderate differential, say
may be summed up as follows:
one-fourth of 1 per cent, to apply between member-bank
(1) Acceptance credits opened for periods in excess of
acceptances and the acceptances of large nonmember
institutions well known throughout the country and 90 days should only, in exceptional cases, extend over a
period of more than one year, and in no case for a time
whose acceptances necessarily have a broad market.
exceeding two years.
(Page 28, Jan., 1917, Bulletin.)
(2) Banks which are members of groups opening these
Drafts Drawn to Finance Sale of Goods to Allied Pur- credits should not buy their own acceptances, and where
chasing Commissions.
an agreement is made with the drawer for purchase of acEven if this transaction did not involve the exportation ceptances for future delivery, the rate should not be a fixed
of goods a member bank might accept a draft drawn for the one, but should be based upon the rate ruling at the time
purpose of financing it if it involved a domestic shipment of the sale.
(3) Transactions covered by these credits should be of a
of goods and if the shipping documents are attached at the
time of acceptance. An acceptance of that character legitimate commercial nature, and acceptances must be
would seem to be permissible in any case where the goods eligible according to the rules and regulations of the Board.
(4) Whenever syndicates are formed for the purpose of
are shipped from the interior to the seaboard preparatory
granting acceptance credits for more than moderate
to exportation.
(Page 878r Nov.. 1917, Bulletin.)




574

FEDERAL RESERVE BULLETIN.

amounts, Federal Reserve Banks should be consulted with
regard, to the transaction. The question of eligibility,
bothjfrom the standpoint of the character of the bill and
of the amount involved, will be passed upon by the Federal Reserve Bank subject to the approval in each case of
the Federal Reserve Board.
(Page 257, Apr., 1918, Bulletin.)
Trade Acceptances Defined.
Only those trade acceptances which are drawn at the
time of, or within a reasonable time after, the shipment or
delivery of goods sold can be treated as bills of exchange
drawn against actually existing value.
(Page 287, Apr v 1917., Bulletin.)

JUNE 1,1918.

Insurance Premium—Trade Acceptance Against Insurance.
A draft drawn by a casualty company against a policy
holder for premiums could hardly be said to be a draft by
the seller on the purchaser of goods sold and would not,
in the opinion of the Board, come within the Board's
present definition of a trade acceptance.
(Page 309, Apr., 1918, Bulletin.)
Trade Acceptances, Conference on.
On March 9 the National Credit Men's Association held
a conference on trade acceptances at the Hotel Astor, in
New York City, at which the trade acceptance question
was discussed from a variety of angles. Extracts from the
addresses of some of the speakers are presented.
(Page 243, Apr., 1917, Bulletin.)
Warehouse Receipts,
Warehouse receipts offered as security for bills accepted
by member banks under authority of section 13 of the
Federal Preserve Act must be issued by warehouses which
are independent of the borrower. The corporation issuing
such receipt must be organized in good faith as an independent corporation, and its affairs must be administered by duly authorized officers and agents independent
of the borrower in order to comply with the rulings of the
Board referred to.
(Page 31, Jan., 1918, Bulletin.,)

Trade Acceptances for Advertising.
A draft or bill of exchange drawn by a publisher, or
other advertising agency, on the purchaser of advertising
space and accepted by such purchaser shall be considered
a trade acceptance, provided the advertisement on which
the draft or bill is based is for the purpose of promoting or
facilitating the production, manufacture, distribution, or
sale of goods, wares, merchandise, or agricultural products,
including live stock; and provided further that such
advertisement is not illegal and is not for the purpose of
promoting or facilitating any transaction which is prohibited by the laws of the State in which it is to be conACCOUNTING.
summated.
(Page 114. Feb., 1917, Bulletin.)
Accounts, Uniformity of.
Trade Acceptance, Where Payable.
| A tentative proposal submitted by the Federal Reserve
Board for the consideration of banks, bankers, and banking
If the terms of the original draft make it payable at the
associations; of merchants, manufacturers, and associations
banking house of the drawee the drawee may nevertheless
of manufacturers; and of auditors, accountants, and assoaccept it payable elsewhere—as, for example, at a Federal
ciations. The problem naturally subdivides itself into
Reserve Bank—provided the acceptance does not stiputwo parts. (1) The improvement in standardization of
late in terms that it is payable only at the Federal Reserve
the forms of statements; (2) the adoption of methods which
Bank and not elsewhere.
will insure greater care in compiling the statements and
(Page 379, May, 1917, Bulletin.)
the proper verification thereof.
Trade Acceptances of Retailers.
(Page 270, Apr., 1917, Bulletin.)
A bill of exchange drawn by the seller of goods and Basis for Figuring Interest for Rediscount Transactions.
accepted by the purchaser of those goods is a trade acceptIn connection with rediscounts with Federal Reserve
ance, regardless of whether or not the purchaser intends Banks, the point has been raised by one bank that it is
to resell the goods or to use them for his own purpose.
its habit to figure discounts on a basis of 360 days to the
(Page 30, Jan., 1918, Bulletin.)
year. It has been decided that for rediscounts on transactions between Federal Reserve Banks the basis of 365
Trade Acceptance Against Costs of Installation.
days to the year should be applied.
It is customary for the seller of certain goods to contract
(Page 109, Feb., 1918, Bulletin.)
for their installation and to include the cost of installation
in the selling price. In the opinion of the Board an ac- Discount, Method of Computing.
Aside from the fact that New York and Boston Federal
ceptance drawn for the purchase price, including cost of
installation, would come within the Board's definition of Reserve Banks figure discount on a 365-day basis while all
the other Federal Reserve Banks use 360 days, the methods
a trade acceptance.
(Page 310, Apr., 1918, Bulletin.)
used by the Federal Reserve Banks do not vary. Discount
Trade Acceptances, Eligibility of, for Hediscount.
is computed on the actual number of days the paper has
The trade acceptance is an instrument which carries to run, the date of payment of course varying in different
upon its face the evidence of the commercial character of States in accordance with the laws regarding holidays in
the transaction which gave it birth.
force in the different jurisdictions.
(Page 109, Feb., 1918, Bulletin.)
(Page 951, Dec, 1917, Bulletin.)




JUNE 1, 1918.

FEDERAL RESERVE BULLETIN.

ADVISORY COUNCIL, MEETINGS OF.
Meeting of Federal Advisory Council, Apr. 16,1917.
(Pago*340. May, 1917, Bulletin.)
Meeting of Federal Advisory Council, Nov. 19, 1917.
(Page 921, Dec, 1917, Bulletin.)
Meeting of Federal Advisory Council, Feb. 18, 1918.
(Page 160, Mar... 1918, Bulletin.)
AMENDMENTS TO THE FEDERAL RESERVE ACT.
Te"xt of amendments to Federal Reserve Act as introduced in Congress, 1917, and statements relating thereto.
(Page 98, Feb., 1917, Bulletin.)
Text of a memorandum transmitted to it by Mr. James
B. Forgan, president of the Federal Advisory Council,
expressing the views of that body with reference to the
proposed amendments to the Federal Reserve Act, 1917.
(Page 106, Feb., 1917, Bulletin.)
Comparative Senate and House bills amending Federal
Reserve Act, 1917.
(Page 177, Mar., 1917, Bulletin.)
Senate report on amendments, 1917.
(Page 188, Mar., 1917, Bulletin.)
House report on amendments, 1917.
(Page 191, Mar., 1917, Bulletin.)
Bill authorizing the granting of Federal charters to banks
organized for the purpose of engaging in foreign trade.
(Page 450, June, 1917, Bulletin.)
Amendments as passed by House and stricken out in
Senate.
(Page 441, June, 1917, Bulletin.)
Synopsis of amendments to Federal Reserve Act as
approved June 21, 1917.
(Page 509, July, 1917, Bulletin.)
Text of amendments to Federal Reserve Act as approved
June 21,1917.
(Page 511, July, 1917, Bulletin.)

BRANCH BANKS AND AGENCIES.

575

ber banks to carry accounts with Federal Reserve Banks
for clearing or collection purposes.
(Page 879, Nov., 1917, Bulletin.)
Bill of Lading Drafts.
Undertaken by several of the Federal Reserve Banks as
a collection transaction. The drafts are credited upon
receipt and when paid the sending bank is charged interest
at the published rate for the time the draft is outstanding
plus the actual cost of collection.
(Page 114, Feb., 1917, Bulletin.)
Checks Payable in Exchange.
Federal Reserve Banks directed not to handle checks
which are drawn payable in exchange at current rates or
in any other way than an absolute and unconditional
order to pay in money. If any individual or any bank
sees fit to receive a check which is nothing more than an
order for exchange, he does so with his eyes open and with
the full knowledge that an exchange charge will be imposed.
(Page 763, Oct., 1917, Bulletin.)
| Immediate Availibility of Drafts.
I Board suggests that all member banks be permitted to
| participate in the arrangement, with a limitation of
I $10,000 per day as the total that may be drawn by any
j one bank.
(Page 78, Feb., 1917, Bulletin.)
| Federal Reserve Drafts.
i Forms of special drafts on Federal Reserve Banks prepared and sent to the 12 Federal Reserve Banks, with the
necessary suggestions as to their use.
(Page 347, May, 1917, Bulletin.)
Other Citations on Collections.
Development of the collection system.
(Page 660, Sept., 1917, Bulletin.)
Collection of notes and bills in New York.
(Page 743, Oct., 1917, Bulletin.)

Bank of England appointed as foreign agent.
CLAYTON ACT.
(Page 5, Jan., 1917, Bulletin.)
Bank of France as foreign agent.
Advisory Committee of Member Banks.
(Page 175, Mar., 1917, Bulletin.)
The members of an advisory committee of a national
Philippine National Bank as foreign agent.
bank are not necessarily officers, directors, or employees of
(Page 239, Apr., 1917, Bulletin.)
such bank within the meaning of section 8 of the Clayton
Branches of Federal Reserve Banks at New Orleans.
Antitrust Act. They can not be directors unless elected
Seattle, Portland, Spokane, Louisville, Cincinnati, Pittsby the shareholders; and whether they are officers or emburgh, Detroit, and Baltimore.
ployees depends entirely on the scope of the rights and
(Page 10, Jan., 1918, Bulletin.)
I duties assigned to them by the board of directors.
By-laws for use in branch banks.
(Page 118, Feb., 1917, Bulletin.)
(Page 586, Aug., 1917, Bulletin; page 934, Dec,
Duration of Permits.
1917, Bulletin.)
Where the Federal Reserve Board has once granted permission to a person to serve at the same time as a director
CHECK CLEARING AND COLLECTION.
of two or more institutions under the provisions of the
Advertisments of "Clearing Members."
Kern amendment to section 8 of the Clayton Act, that
A bank, in advertising, should be careful to avoid giving permission is continuing and good until revoked by the
a wrong impression, but there is no objection, legally or Federal Reserve Board.
(Page 763, Oct., 1917, Bulletin.)
morally, to its stating facts. The law authorizes nonmem- !




578

FEDERAL BESEBVE BULLETIN.

Morris Plan Bank.
Ruled that a Morris plan bank is a "bank" within the
meaning of section 8 of the Clayton Antitrust Act and that
word as used in that part of section 4 of the Federal Reserve
Act which reads as follows:
''No director of class C shall be an officer, director, or
employee, or stockholder of any bank " must be construed
to include a Morris plan bank.
(Page 527, July, 1917, Bulletin.)
"Substantial Competition" Within the Meaning of the
Clayton Act.
A director of a national bank now serving with a trust
company would not be required to resign in case the trust
company should become the purchaser of bankers' acceptances or of first-class commercial paper, but did not otherwise come into competition with the national bank.
(Page 878, Nov., 1917, Bulletin.)
Status of State Banks Under Clayton Act—Opinion of
Attorney General.
State banks or trust companies may have common officers and directors with other State banks and trust companies whether or not any of such banks or trust companies
are members of the Federal Reserve System. National
banks, however, and banks and trust companies doing
business in the District of Columbia, can not have as officers or directors, officers or directors of any other bank
or trust company which is lcated in the same city of more
than 200,000 inhabitants, or which has deposits, capital,
surplus and undivided profits aggregating more than
35,000,000, regardless of its location (unless permission
so granted by the Federal Reserve Board, under authority
if the Kern amendment to section 8 of the Clayton Act).
This is true whether or not such a State bank or trust company is a member of the Federal Reserve System.
(Page 744, Oct., 1917,"Bulletin.)

JUNE 1,

1918.

Holding Over of Federal Reserve Bank Directors.
A director of a Federal Reserve Bank has no authority
to continue to serve as such after the expiration of his
term even though his successor has not been elected.
(Page 290, Apr., 1917, Bulletin.)
DISCOUNT BATES.
Readjustment of Discount Rates.
New schedule of discount rates developed, as follows:
1. Paper maturing within 15 days, including member
banks' collateral notes.
2. Paper maturing within 18 to 60 days,
3. Paper maturing within 61 to 90 days.
4. Trade acceptances maturing within 60 days.
5. Trade acceptances maturing within 61 to 90 days.
6. Bankers' acceptances maturing within 90 days.
7. Commodity paper maturing within 90 days.
8. Agricultural and live stock paper maturing within
90 to 180 days.
(Page 241, Apr., 1917, Bulletin.)
Rediscount of Notes Secured by Bonds.
On May 22, after consideration of the question how the
Federal Reserve Banks could best participate in furthering
the progress of the Liberty loan, the Federal Reserve Board
determined upon the establishment of a rate of 3-J per cont
for the rediscount of customers' notes of not to exceed 90
days' maturity, secured by Treasury certificates or Liberty
Loan bonds.
(Page 429, June, 1917, Bulletin.)
DIVIDENDS, EARNINGS, AND EXPENSES OF
FEDERAL RESERVE BANKS.

Dividends declared by Federal Reserve Banks.
(Page 4, Jan., 1917, Bulletin; page 507, July, 1917,
Bulletin; page 5, Jan., 1918, Bulletin.)
Earnings and expenses of the Federal Reserve Banks
for the year 1916.
(Puge 89, Feb., 1917, Bulletin.)
Earnings and expenses of the Federal Reserve Banks
i
for the six months ending June 30, 1917.
(Pago 605, Aug., 1917, Bulletin.)
DIRECTORS, ELECTION OF.
|
Earnings and expenses of the Federal Reserve Banks
(Page 99, Feb., 1918, Bulletin.)
Directors of branches of Federal Reserve Banks should | for the year 1917.
be elected annually. (Page 31, Jan., 1918, Bulletin.)
Rights of Liquidating National Bank to Accrued Dividends.
Class C directors appointed for 1917.
Any national bank which liquidates and reorganizes as
(Page 7, Jan., 1917, Bulletin.)
a State bank forfeits its rights to accrued dividends from
Class A and B directors elected for 1917.
its Federal Reserve Bank. Such rights do not survive in
(Page 7, Jan., 1917, Bulletin.)
favor of such State bank, even though it immediately beList of directors whose terms expire in 1917, and in- comes a member bank.
structions for election.
(Page 117, Feb., 1917, Bulletin.)
(Page 743, Oct., 1917, Bulletin.)
EXPENSES OF FEDERAL RESERVE BOARD.
Class C directors appointed for 1918.
Assessment by the Federal Reserve Board for expenses
(Page 13, Jan., 1918, Bulletin.)
Class A and B directors elected for 1918.
from January 1 to June 30, 1917.
(Page 23, Jan., 1917, Bulletin.)
(Page 14, Jan., 1918, Bulletin.)
Directors of branch banks named.
Receipts and disbursements. Federal Reserve Board,
(Page 14, Jan., 1918, Bulletin.)
1916.
(Page 87, Feb., 1917, Bulletin.)




JUNE 1,1918.

EEDEEAL EESEKVE BULLETIN.

577

Assessment by the Federal Reserve Board for expenses Use of Note Emblem.
The act of March 4, 1909, provides in part that whoever
from July 1 to December 31, 1917.
shall print, photograph, or in any other manner make or
(Page 525, July, 1917, Bulletin.)
Assessment by Federal Reserve Board for expenses execute any engraving, photograph, print, or impression
in the likeness of any such obligation or other security, or
from January 1 to June 30, 1918.
any part thereof, except by direction of some proper officer
(Page 24, Jan., 1918, Bulletin.)
or the United States, shall be fined not more than §5,000,
or imprisoned not more than 15 years, or both.
FEDERAL RESERVE AGENTS, MEETINGS OF.
(Page 194, Mar., 1917, Bulletin..)
Meeting of Federal Reserve agents in Washington, j
December 4, 1917.
(Page 4, Jan., 1917, Bulletin.)
FIDELITY BONDS.
Meeting of Federal Reserve agents in "Washington,
February 26, 1918.
(Page 160, Mar., 1918, Bulletin.)
Bonds of Federal Reserve Agents.
In view of joint custody and control on the part of
Federal Reserve agents and Federal Reserve Banks over
FEDERAL RESERVE NOTES.
unissuedfFederal Reserve notes, and certain funds as
Custody of Gold, Lawful Money, and Federal Reserve provided;'by the Federal Reserve Act as amended June 21,
1917, the Federal Reserve Board has decided that it will
Notes.
These funds should be kept in safes, preferably with not require bonds of Federal Reserve'agentsjand assistant
two locks, each with a different combination, one in the Federal Reserve agents in as large amounts as heretofore.
control of the Federal Reserve Agent and his representa- It has prescribed as minimum bonds: For Federal Reserve
tive and the other in the control of the officers of the bank. agents, $100,000; for assistant Federal Reserve agents,
As the Federal Reserve Bank is jointly liable for the safe- 550,000. Should the directors of any Federal Reserve
keeping of funds, a joint record should, be kept of all Bank deem it desirable to require larger bonds, no objection will be made by the Board to such action.
transactions.
(Page 691, Sept., 1917, Bulletin.)
(Page 615, Aug., 1917, Bulletin.)
Redemption of Federal Reserve Notes,
Federal Reserve Banks should ask their member banks
FIDUCIARY POWERS.
to continue to pay out Federal Reserve notes as long as
they are reasonably fit for use, and to refrain from sending Litigation Involving Constitutionality of Section II (k).
notes to Washington for redemption unless they are so
The case of Grant Fellows, attorney general of Michigan,
worn or soiled as to be actually unfit for circulation.
ex rel. The Union Trust Company et al. v. The First
(Page 310, Apr., 1918, Bulletin.)
National Bank of Bay City, Mich., instituted in the Supreme Court of the State of Michigan, discussed.
Shipment of Unfit Notes.
(Page 32, Jan., 1917, Bulletin.)
The Federal Reserve Board and the Treasury Department have agreed upon a plan whereby Federal Reserve
Decision of United States Supreme Court in case brought
Banks may forward unlit Federal Reserve notes of other to test the constitutionality of section 11 (k) of the Federal
Federal Reserve Banks directly to Washington for redemp- Reserve Act.
(Page 534, July, 1917, Bulletin.)
tion.
(Page 82, Feb., 1917, Bulletin.)
Delaware—Fiduciary Authority of National Banks.
It has been decided that in the case of shipments of unfit
Bill passed by the Delaware Legislature authorizing
notes to Washington, Federal Reserve notes should be national banks to act as trustee, executor, administrator,
included with classes of currency on which the trans- and registrar of stocks and bonds.
portation charges should be assessed against the sender.
(Page 528, July, 1917, Bulletin.)
Hitherto charges have been paid by the Government on |
unfit national bank notes, Federal Reserve notes, and | Georgia Law as to Fiduciary Powers.
Federal Reserve bank notes when shipped in "collect." j Bill passed by the Georgia Legislature authorizing naA change in this plan has now been authorized by the ! tional banks located in Georgia to act as trustee, executor,
Treasury Department.
administrator, and registrar of stocks and bonds.
(Page 212, Apr., 1917, Bulletin.)
(Page 767, Oct., 1917, Bulletin.)
Substitution of Collateral.
Washington Laws Authorizing National Banks to Act as
For the assistance of Federal Reserve Agents in making
Trustees.
substitutions of paper or deposits of gold or lawful money
Act of the Legislature of the State of Washington, apwhen the original pledge is collectible, the Federal Reserve proved March 10, 1917, permitting national banks located
Board on April 12 sent out a letter providing for substitu- in Washington to exercise the powers of a trust company.
tion of securities.
(Page 351, May, 1917, Bulletin.)
(Page 697, Sept., 1917, Bulletin.N.




578

FEDEKAL RESERVE BULLETIN.

GOLD SETTLEMENT FUND.
Change in Operation of Fund.
Important changes in the operation of the gold settlement fund were made possible by the approval on June 21,
1917, of the amendments to the Federal Reserve Act.
Section 16 of the amendments was recommended to Congress for the purpose of simplifying the operation of the
fund, which has grown to such proportions as to make the
handling of the gold certificates evidencing the deposits of
Federal Reserve Banks and Federal Reserve Agents a
heavy responsibility. The fund has grown from about
$20,000,000, when its operation began in May, 1915, to
$523,410,000.
(Page 521, July, 1917, Bulletin.)

JUNBl, J918.

National-Bank Examinations.
The Comptroller of the Currency instructs national-bank
examiners to leave with each national bank upon the completion of its examination, a bill covering its assessment
for the examination, with instructions that the national
banks deposit with the Federal Reserve Bank of their district, in the name of the Comptroller of the Currency, to
the credit of the Treasurer of the United States, the amount
of the bill.
(Page 374, May, 1917, Bulletin.)

One hundred largest national banks in the United States.
(Page 19, Jan., 1917, Bulletin.)
The Comptroller of the Currency announces that in
future calls for reports of condition, national banks will
GOVERNORS, MEETINGS OF.
not be required to make detailed statements of the various
Meeting of Governors of Federal Reserve Banks in classes of money in their vaults according to the schedules
Washington, December 11, 1916.
heretofore used.
(Page 604, Aug., 1917, Bulletin.)
(Page 7, Jan., 1917, Bulletin.)
Statement of the Comptroller of the Currency regarding
Meeting of Governors of Federal Reserve Banks in bank failures.
(Page 939, Dec, 1917, Bulletin.)
Washington, April 4, 1917.
(Page 347, May, 1917, Bulletin.)
OFFICERS AND EMPLOYEES OF BANKS.
Meeting of Governors of Federal Reserve Banks in
Exemption from Military Service.
Washington, November 8, 1917.
Exemption for its own employees and those of Federal
(Page 921, Dec, 1917, Bulletin.)
Meeting of Governors of Federal Reserve Banks in Reserve Banks from military service will not be generally
asked by the Federal Reserve Board.
Washington, March 22, 1918.
(Page 591, Aug., 1917, Bulletin.)
(Page 256, Apr., 1918, Bulletin.)

Group Insurance.
NATIONAL BANKS.
There is no objection to the taking out of group insurance
Usurious Charges by National Banks.
covering the employees of Federal Reserve Banks.
Where a national bank, in addition to charging interest
(Page 28, Jan., 1917, Bulletin.)
at the highest legal rate, requires a borrower to give an
additional note, accept a certificate of deposit for a like
OPEN-MARKET TRANSACTIONS.
amount, and put up such certificate as additional collateral
Member Banks, Purchase of Warrants from.
to his entire loan the transaction appears to be usurious.
(Page 292, Apr., 1917, Bulletin.)
The fact that Paragraph VII of Regulation E, series'of
1916, authorizes any Federal Reserve Bank to purchase
Government Financing, Duty of National Banks.
warrants which comply with only Paragraphs I and III of
National banks were created primarily to assist the
Regulation E, from any of its members, provided that they
Government in the conduct of its fiscal affairs, and in
are indorsed by the member bank and do not exceed 10
performing the various services incident to the marketing
per cent of its capital and surplus, does not of itself proof Liberty bonds, war-savings stamps, thrift stamps, and
hibit a Federal Reserve Bank from purchasing warrants
any other obligations of the Government, they are carryfrom a member bank in excess of that 10 per cent limit if
ing out one of the fundamental purposes for which they
they comply with all the other provisions of Regulation E.
were created.
(Page 313, Apr., 1918, Bulletin.)
(Page 29, Jan., 1917, Bulletin.)
Banks as Insurance Agents.
Regulations under which national banks may act as Nonnegotiable Warrants, Purchase of.
The Board has consistently adhered to its policy of not
insurance agents and as brokers or agents in making or
procuring loans on real estate under the amendment cov- undertaking to pass upon the legality of issue of any muering such action passed by Congress in 1916, issued from nicipal securities. The Board is further of the opinion
the office of the Comptroller of the Currency. No such that a Federal Reserve Bank should not buy a nonnegobank shall in any case guarantee either the principal or tiable warrant, and it would suggest further that in coninterest of any such loans or assume or guarantee the sidering the purchase of warrants issued by a municipality
payment of any premium on insurance policies issued it would be well to ascertain what the sinking fund requirethrough its agency by its principal or guarantee the truth ments are with reference to bonded obligations of the
of any statement made by an assured in filing his applica- municipality and whether or not these requirements are
being complied with. (Page 193, Mar., 1917, Bulletin.)
cation for insurance. (Page 164, Mar., 1917, Bulletin.)




JUNE 1,1918.

FEDERAL RESERVE BULLETIN,

Warrants, Eligibility of.
The Federal Reserve Board may, under the provisions
of Regulation E, series of 1916, authorize Federal Reserve
Banks to purchase warrants which are issued in anticipation of the collection of taxes and which mature after the
date on which such taxes are due but before the penaltyattaches for their nonpayment, if experience has demonstrated that the due date produces sufficient taxes to pay
the warrants at maturity.
(Page 32, Jan., 1917, Bulletin.)
PAPER ELIGIBLE FOR REDISCOUNT.
Bonds or Notes of the United States as Security for Rediscounted Paper.
Any member bank may rediscount with its Federal
Reserve Bank a note, draft, or bill drawn for the purpose
of carrying or trading in bonds or notes of the United
States, and may also procure advances from its Federal
Reserve Bank on its own promissory note secured by a
deposit of or pledge of bonds or notes of the United States.
(Page 158, Mar., 1917, Bulletin.)
Demand Notes.
A note made payable "on demand, and if no demand is
made, then on
," is eligible for rediscount by a
Federal Reserve Bank, provided the date to be filled in
is not more than 90 days from the date of discount, and
provided further it conforms to the other provisions of law
and the regulations of the Board.
(Page 527, July, 1917, Bulletin.)

579

States and rediscounted under the provisions of section 13
are eligible as collateral security for the issue of Federal
Reserve notes.
(Page 459, June, 1917, Bulletin.)
Indorsement on Bill of Exchange.
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 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.
(Page 457, June, 1917, Bulletin.)
Public-Service Corporation Paper.
Notes given in payment of material or supplies which are
necessary to enable the public-service corporation to furnish goods (light, heat, or power) which it sells the public,
and for which the public will pay at- the end of 30 or 60 day
periods, might be regarded as eligible, provided the statement of the corporation shows a satisfactory proportion of
cash and accounts receivable against current liabilities.
(Page 949, Dec, 1917, Bulletin.)
Real Estate Mortgage, Eligible Paper Secured hy.
A note, draft, or bill of exchange drawn for commercial
purposes and otherwise eligible for rediscount under the
provisions of section 13 of the Federal Reserve Act is not
rendered ineligible merely because it is secured by a
mortgage on real estate. (Page 458, June, 1917, Bulletin.)
Rediscount of Participation Certificate.

Demand Paper Not Eligible for Rediscount.

There is no provision in the Federal Reserve Act which
authorizes a Federal Reserve Bank to rediscount a certificate of participation in a note, because even though the
original note is eligible for rediscount, a participation
certificate nevertheless is nothing more than the evidence
of an equitable., interest in that original note, and does
not in any way represent a legal claim against the maker
Exchange and Collection Charges, Bills Payable with, of the note. (Page 949, Dec, 1917, Bulletin.)
Not Negotiable.
A bill made payable with "collection charges" is not a Renewal of Short-Term Paper.
negotiable instrument, though the Negotiable Instruments
While the Board does not wish to prohibit the renewal of
Law provides that an instrument payable'' with exchange'' a 15-day note, it feels that the renewal should be an excepdoes not lose its negotiability.
tion rather than the rule.
(Page 880, Nov., 1917, Bulletin.)
(Page 879, Nov., 1917, Bulletin.)
Finance or Credit Companies, Notes of.
Short-Time Commercial Paper.
The note of a finance or credit company which is drawn
Short-time commercial paper to run not longer than
either directly or indirectly to finance some industrial or
commercial concern in the transaction of its business is not four instead of six months was advocated by the Federal
eligible for rediscount, even though it may be secured by Reserve Board in a letter sent to Federal Reserve Banks
on September 17, 1917.
paper which is itself eligible for rediscount.
(Page 739, Oct., 1917, Bulletin.)
(Page 197, Mar., 1918, Bulletin.)
The board has ruled that a demand note or bill is not
eligible under the provisions of the act, since it is not in
terms payable within the prescribed 90 days, but, at the
option of the holder, may not be presented for payment
until after that time. (Page 378, May, 1917, Bulletin.)

Government Obligations, Notes and Bills Drawn for Treasury Certificates and Bonds as Security for Rediscount.
Trading in.
Notes, drafts, and bills of exchange drawn for the purThe question of the eligibility of obligations of the
pose of carrying or trading in bonds or notes of the United United States for rediscount at Federal Reserve Banks




580

FEDERAL RESERVE BULLETIN.

is covered by the amendment to the Federal Reserve Act,
approved September 7, 1916.
(Page 457, June, 1917, Bulletin.)
Warehouse Receipts, Paper Secured by.
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.
(Page 456, June, 1917, Bulletin.)
Waterworks Company, Paper of.
If the proceeds of the paper have been or are to be used
to provide funds for pay roll, purchases of coal, etc.,
and if the paper is otherwise in conformity with the law
and the provisions of the Board's regulations, it is eligible
for rediscount by the Federal Reserve Bank.
(Page 527, July, 1917, Bulletin.)
AGRICULTURAL PAPER.
Live-Stock Paper.
The bill or note of a packing company, the proceeds of
which are used for the purchase of live stock which is
slaughtered upon purchase, is Dot "based on live stock"
within the meaning of section 13, and is, therefore, not
eligible for rediscount if it has a maturity in excess of 90
days.
(Page 616, Aug., 1917, Bulletin.)

ims.

Classification of Discounted Paper.
It is the desire of the Board that the Federal Reserve
Banks ascertain in all cases whether the original loan has
been obtained from the rediscounting. member bank for
agricultural, industrial, or commercial purposes so that all
discount items of the Federal Reserve Banks may be
reported to the Board properly classified.
(Page 114, Feb., 1917, Bulletin.)
| Compulsory Loans.
i

No power is given to the Board to compel open market
operations on the part of Federal Reserve Banks, which
are allowed to exercise their discretion.
(Page 457, June, 1917, Bulletin.)
Direct Loans.
Federal Reserve Banks do not make loans direct to individuals, but merely rediscount notes for member banks.
(Page 763, Oct., 1917, Bulletin.)
Paper Secured by Chattel Mortgage.
Any member bank could discount a promissory note
secured by collateral notes, in turn secured by chattel
mortgages on cattle. Such a note, however, would not be
eligible for rediscount by a Federal Reserve Bank because
of the fact that it is not drawn for an agricultural, industrial
or commercial purpose, within the meaning of section 13,
of the Federal Reserve Act.
(Page 690, Sept., 1917, Bulletin.)

Notes of Farmers for Commodities Used in Farming.
Where a farmer makes his note payable to the seller of a
Cattle Paper.
commodity and actually uses the commodity for agriculA loan made by a member bank in good faith to a farmer, tural purposes, such a note may be treated as agricultural
for the purpose of assisting him to produce a crop, or to paper, whether discounted with the member bank by the
fatten his cattle, would be eligible for discount by a farmer as the maker or by the seller as the indorser.
Federal Reserve Bank whether secured by a mortgage or
(Page 310, Apr., 1918, Bulletin.)
not, but most of the farmers' notes which have been dis- Tractor Work.
counted with Federal Reserve Banks for member banks
Where tractors are used to supplement the work of horses
are secured by chattel mortgages.
or mules or are used altogether instead of these animals,
(Page 378, May, 1917, Bulletin.)
notes given by farmers for the purchase price of tractors,
and maturing within six months, should be admitted to
Cattle as Readily Marketable Commodity.
National banks are not authorized to accept bills secured discount as agricultural paper.
(Page 309, Apr., 1918, Bulletin.)
by chattel mortgages on cattle, and Federal Reserve Banks
should consider as ineligible bills drawn against the securCOMMODITY PAPER.
ity of such chattel mortgages, whether accepted by memCommodity Rate Suspended.
ber or nonmember banks.
Staple perishable food products, such as butter, cheese,
(Page 309, Apr., 1918, Bulletin.)
eggs, poultry, frozen fish, etc., carried for seasonal periods
Commodities Used for Agricultural Purpose—Note for in cold storage under negotiable warehouse receipts, may
Purchase Price.
be eligible for rediscount with Federal Reserve Banks.
A note given for the purchase price of a commodity can In view of the fact, however, that the present time and
be classed as. agricultural paper eligible for rediscount present circumstances do not warrant preferential rates
when having a maturity in excess of 90 days, if the maker in favor of such paper, the commodity rate has been
is to use the commodity for an agricultural purpose, re- abolished for the time being and has been merged with
gardless of whether the note is discounted by the maker or the general commercial rate.
(Page 30, Jan., 1918, Bulletin.)
by the indorser.
(Page 312, Apr., 1918, Bulletin.)




UNE

1, 1918.

FEDERAL RESERVE BULLETIN.

581

Potatoes as Security—Superseding Ruling of November j vided such loans conform in all other respects to the pro10, 1915.
i visions of section 24. (Page 952, Dec, 1917, Bulletin.)
Potatoes, properly graded "and packed "and stored in a j PAPER OTHER THAN AGRICULTURAL OR COMweatherproof and responsible'warehouse, as evidenced by
MODITY.
its receipt, would undoubtedly constitute a readily mar- j
ketable, nonperishable staple within the meaning of the j Paper of Equity Exchange.
regulation. The member bank making loans against
Paper of equity exchanges, if first discounted by a memwarehouse receipts for potatoes properly insured would, ber bank, would be in form eligible for rediscount at the
of course, have to satisfy itself as to the margin of its Federal Reserve Bank, provided its maturity at the time
security and the conditions of warehousing, but after hav- of discount does not exceed 90 days. Their paper must,
ing done so, and making the loan, it could rediscount such however, first have been discounted with a member bank
paper with the Federal Reserve Bank for periods not and the member bank alone would have the right to relonger than 90 days.
discount this paper with the Federal Reserve Bank.
(Page 614, Aug., 1917, Bulletin.)
(Page 379, May, 1917, Bulletin.)
REAL ESTATE LOANS.
Bonds Secured by Real Estate.
Bonds issued by an individual on^the security of real
estate are real estate loans and are therefore subject to
section 24 of the Federal Reserve Act and also section
5200, Revised Statutes, and as the bonds in question do
not conform to section 24, relative to time for which they
may run, they would constitute illegal investments for
national banks and should not be taken.
(Page 456, June, 1917, Bulletin.)
Loans on Real Estate.
National banks are subject to the limitations imposed
by section 24 of the Federal Reserve Act, and can not
make loans on real estate except under authority of this
act, which limits the amount to an aggregate sum equal
to 25 per cent of its capital and surplus or to one-third of
its time deposits. If one-third of its time deposits exceed
25 per cent of the capital and surplus, banks are given the
benefit of this alternative maximum.
(Page 691, Sept., 1917, Bulletin.)
Loans on City Real Estate.
If the security for a trust company certificate is another
note which in turn is secured by real estate, then, under
the decisions of the Supreme Court, the loan is authorized
by law, on the ground that it is a loan on personal security,
and not a loan upon the security of real estate.
(Page 30, Jan., 1918, Bulletin.)
Loans on Improved Farm Lands.
Section 24 authorizes any national bank to loan on unencumbered and improved farm land up to 50 per cent of
its actual value. What proportion of the land used as
security must be improved or cultivated must necessarily
depend upon the facts of each case.
(Page 618, Aug., 1917, Bulletin.)
Real Estate Loans by Foreign Branches.
A branch bank of a national bank established in a foreign
country, under authority of section 25, may make loans
on real estate located within 100 miles of the branch, pro-




Rediscount of Bank's Note Given for Funds to Replace
Deposits Withdrawn to Purchase Liberty Bonds.
A note executed by Bank " A " and discounted by Bank
" B , " the proceeds of which were used to replace funds
withdrawn by customers to purchase Liberty bonds, is
not eligible for rediscount by a Federal Reserve Bank,
since the proceeds were not used for an agricultural, industrial, or commercial purpose, or for the purchase of
notes or bonds of the United States.
(Page 954, Dec, 1917, Bulletin.)
Renewal of 15-Day Notes of Member Banks.
A Federal Reserve Bank may properly renew the 15-day
notes of its member banks if properly secured, provided
that the Federal Reserve Bank does not obligate itself in
advance to make any such renewal.
(Page 765, Oct., 1917, Bulletin.)
Sunday or Legal Holidays, Maturity of Notes Due on.
In discounting any paper regardless of maturity a reserve
bank should first consult the calendar and time its actual
maturity. ' For instance, if it should on January 26 discount a note running for 90 days, it should, as far as notes
payable in Alabama, Georgia, and Florida are concerned,
mature this paper on April 27, as April 26 is a legal holiday
in these States, and it should figure discount for 91 days
instead of 90. If the paper is payable in Mississippi, it
would legally mature on April 25, and it should figure discount for 89 days. In the other States of your district
April 26 is not a legal holiday, and it should therefore
mature such paper in those States on April 26 and figure
discount for 90 days. As far as 15-day notes are concerned,
it should, in the case of a note payable in Mississippi, falling due on Sunday, mature it as of Saturday and charge
14 days' interest. In the case of a 15-day note payable
in Georgia, it should mature it if due on Sunday as of
Monday and charge 16 days' interest, and in Alabama,
Tennessee, and other States which have the negotiable
instruments law it should mature 15-day notes payable in
those States and falling due on Saturday or Sunday, as of
Monday, charging 16 or 17 days' interest, as the case may be.
(Page 108, Feb., 1918, Bulletin.)

582

FEDERAL RESERVE BULLETIN.

War Department Obligations.
Member banks in giving accommodation to holders of
Government claims as evidenced by vouchers, could take
the note of the firm or contractor with the voucher attached as collateral security. The Board holds that such
notes will be eligible for rediscount by Federal Reserve
Banks at the 15-day rate, or at the regular commercial
paper rates according to maturities. Under the present
circumstances Government officers will seek to protect the
banks which extend these accommodations to those having contracts with the Government.
(Page 288, Apr., 1917, Bulletin.)

.TUNIS J,

1918.

i Reserves of National Banks, Method of Computing.
I Reserves of national banks and the manner in which
| they should be computed (letter by Comptroller of the
I Currency to all national banks).
|
(Page 602, Aug., 1917, Bulletin.)

| Shipments of Currency to Cover Reserves.
In cases of any remittance of currency or specie in excess
of the amount due to the Federal Reserve Bank and not
offset by other items the expense of shipment of such
excess should be borne by the member bank. In order
that the expense to be assumed by the Federal Reserve
Bank may not be unnecessarily increased, member banks,
except when shipping gold, should remit currency rather
RESERVES.
than specie wherever this is practicable.
Computation of Reserves.
(Page 615, Aug., 1917, Bulletin.)
Under section 19 as amended banks are permitted to
Synopsis of State laws relating to bank reserves.
count as reserve only actual balances carried with a Fed(Page 767, Oct., 1917, Bulletin.)
eral Reserve Bank. In estimating the amount against,
RESERVE CITIES.
which reserve must be carried they are permitted to deduct balances due from banks from balances due to banks
The Board designates as reserve cities Buffalo, N. Y.,
and to carry reserve only against the net balance due to Toledo, Ohio, Memphis, Tenn., Peoria, 111., Grand Rapbanks and against other deposit liabilities.
ids, Mich., and Oakland, Cal., thus making banks in those
(Page 614, Aug., 1917, Bulletin.)
places subject to the reserve requirement of 10 per cent
against demand deposits and 3 per cent against time
Government Deposits, Reserves Against.
deposits.
(Page 921, Dec, 1917, Bulletin.)
Under the provisions of section 7 of the act approved
STATE BANKS.
April 24, 1917, national banks and member banks are not
required to maintain reserves against Government deposits Applications for Membership by State Banks Before
regardless of the source of the funds deposited. This secCommencing Business.
tion, however, does not apply to Federal Reserve Banks.
A State bank may make application for membership in
(Page 458, June, 1917, Bulletin.)
the Federal Reserve System as soon as it has been granted
a charter and is authorized to commence business.
Reserves, Deductions in Determining.
(Page 953, Dec, 1917, Bulletin.)
Member banks in determining the amount against
Conversion of a State Bank into a National Bank.
which reserves must be carried, may deduct all GovernIn view of the fact that the conversion of a State into
ment deposits, except postal savings deposits, from the
amount of gross demand deposits, and may deduct from a national bank does not destroy the corporate identity of
the amount of balances due to other banks the amount of the bank, it is hardly necessary for the State bank to file
balances due from other banks, and may include in the an application for the surrender of its stock or for the
amount due from banks checks drawn on banks located in national bank to file an application for new stock.
(Page 690, Sept., 1917, Bulletin.)
the same place and exchanges for clearing houses. The
law, however, does not permit member banks to deduct Eligibility of Mutual Savings Bank.
checks on other banks located in the same place or exA mutual savings bank without capital stock or stockchanges for clearing houses from gross demand deposits'
holders is not eligible under the law for membership in
nor does it permit cash on hand to be deducted from gross
the Federal Reserve System.
demand deposits.
(Page 692, Sept., 1917, Bulletin.)
(Page 950, Dec, 1917, Bulletin.)
Reserve Requirements Under the New Amendments.
Examination Forms.
Letter to all Federal Reserve Banks announcing that
A suggestion has been made by one of the Federal
the bill amending the Federal Reserve Act had become Reserve agents that an effort should be made to induce the
law and explaining the conditions under which the new banking departments of the various States to adopt for use
reserve requirements would be made effective.
of examiners in making reports of examination a form
(Page 508, July, 1917, Bulletin.)
used by the Federal Reserve Boards' Division of Audit




JUNE 1,1918.

FEDERAL RESERVE BULLETIN.

583

and Examination. The Board has never communicated
Act permitting State institutions in Pennsylvania to
with any of the bank commissioners regarding this matter, become members of the Federal Reserve System.
but would be pleased if each Federal Reserve agent would
(Page 666, Sept., 1917, Bulletin.)
ascertain the views upon this subject of the bank comLaw authorizing State banks and trust companies in
missioners or superintendents of the States in his own Mississippi to become member banks.
district.
(Page 310, Apr., 1918, Bulletin.)
(Page 315, Apr., 1918, Bulletin.)
Amendment of the banking laws of Kentucky.
Limitations Under Section 5200, R. S.
(Page 315, Apr., 1918, Bulletin.)
Under section 9 of the Federal Reserve Act as amended,
State banks and trust companies becoming members of
STOCK IN FEDERAL RESERVE BANKS.
the Federal Reserve System are not subject to the limitations of section 5200, but are subject only to such limita- Calculation of Dividends on Surrendered Stock.
tions as are imposed by State laws. Such banks may,
When a national bank going into voluntary liquidation
therefore, make loans to the same person, firm, or corpora- fails to promptly apply for surrender and cancellation of its
tion in any amounts permitted by the State laws. Loans stock in the Federal Reserve Bank, it is within the provto one person in excess of 10 per cent are, however, not ince of the Federal Reserve Board to allow the Federal
eligible for rediscount with a Federal Reserve Bank.
Reserve Bank to pay dividends on such stock up to the
(Page 879, Nov., 1917, Bulletin.)
date when such application was actually made, if, in the
opinion of the Board, the liquidating bank did not unPowers of State Banks Which Become Members.
reasonably delay filing such application.
A State bank which becomes a member of the Federal
(Page 201, Mar., 1918, Bulletin.)
Reserve System may continue to make loans to one customer in excess of 10 per cent of its capital and surplus, Deduction of Federal Reserve Bank Stock From Tax
provided it is authorized to do so under the laws of the
Assessments Levied on Shareholders of National
State in which it is located. The obligations of any one
Banks.
customer to whom the bank has loaned more than 10 per
An opinion rendered by Judge Sater, of the United States
cent of its capital and surplus would not, however, be eliDistrict Court, Southern District of Ohio, Western Divigible for rediscount with the Federal Reserve Bank.
sion, holds that Federal Reserve Bank stock which is held
(Page 696, Sept., 1917, Bulletin.)
by a national bank can not be deducted by such national
Private Bankers as Members.
bank in making a return of the value of its own stock for
The Federal Reserve Act does not permit a private the purpose of taxation.
(Page 955, Dec, 1917, Bulletin.)
banker to become a member bank, nor does it permit
Federal Reserve Banks to extend clearing privileges to
Stock Subscriptions.
such a banker.
(Page 693, Sept., 1917, Bulletin.)
It would not be consistent with regulations or with the
State Bank Membership.
more conservative business principles to treat applicants
If a State bank is authorized by law to invest in real for membership in the Federal Reserve System as members
estate mortgages, the fact that it has large investments of until their applications have been formally approved by
this kind would not bar the bank from membership in the the Board.
(Page 287, Apr.. 1917, Bulletin.)
Federal Reserve System.
(Page 950, Dec, 1917, Bulletin.)
Surrender of Stock by Liquidated Bank.
When a member bank voluntarily liquidates, or when
Other References to State Banks.
Abstract of State laws relating to the right of banks it is declared insolvent and a receiver appointed, the stock
created and organized under the laws of the several States held by it in the Federal Reserve Bank must be surrendered for cancellation. A failure to comply with this
to accept drafts and bills of exchange.
provision of the law can not give to a member bank any
(Page 529, July, 1917, Bulletin.)
Experience of State banks in the Federal Reserve rights greater than those which would inure to its benefit
had it complied with the terms of the law.
system.
(Page 355, May, 1917, Bulletin.)
(Page 457, June, 1917, Bulletin.)
Digest of the procedure to be followed by Federal Re
serve agents in connection with the applications of insti
Transfer of Federal Reserve Bank Stock.
tutions which desire to be considered for membership.
A national bank acquiring assets of another national
(Page 592, Aug., 1917, Bulletin.)
President's statement re membership of State institu- bank in liquidation is not entitled to have transferred to
it the Federal Reserve Bank stock held by the liquidating
tions in the Federal Reserve system.
bank.
(Page 199, Mar., 1917, Bulletin.)
(Page 827, Nov., 1917, Bulletin.)




584

FEDERAL RESERVE BULLETIN.

TIME DEPOSITS AND SAVINGS ACCOUNTS.
Deposits by Nonmember Banks in Federal Reserve Banks.
That part of section 13 as amended by the act approved
June 21, 1917, which authorizes Federal Reserve Banks
to receive deposits from nonmember banks is merelypermissive and not mandatory, and in accepting any
deposit authorized by that section a Federal Reserve
Bank may properly require the depositing bank to maintain a balance sufficient to cover checks drawn against the
depositing bank as well as items received from that bank.
(Page 617, Aug., 1917, Bulletin.)

JUXH 1,

191S.

bank and that such amendments shall be binding on
depositors.
(Page 199, Mar., 1918, Bulletin.)
UNITED STATES BONDS.
Coupons from United States Bonds.
Instructions for the handling of coupons from United
States bonds: Coupons from United States bonds are
actually payable only on presentation to the Treasurer
of the United States, to an Assistant Treasurer of the
United States, or to a Federal Reserve Bank or branch
thereof. When so paid they should be canceled by
punching a hole one-fourth inch in diameter in the middle
of the coupon and near the top thereof through the words
"United States" or immediately thereunder.
(Page 938, Dec, 1917, Bulletin.)

Deposits with Nonmember Banks.
No member bank shall keep on deposit with any State
bank or trust company which is not a member bank a sum
in excess of 10 per cent of its own paid-up capital stock
Income from Liberty Bonds Exempt from Tax.
and surplus. This applies also to State members.
The income from not to exceed $5,000 face value of
(Page 951, Dec, 1917, Bulletin.)
Liberty bonds, Treasury certificates of indebtedness, and
Farm Loan Bank Deposits.
war savings certificates authorized by the act of October
Federal Reserve Banks are not authorized by the Fed- 3, 1917, is exempt from all income and war excess profits
(Page 930, Dec, 1917, Bulletin.)
eral Reserve Act to receive deposits except from the taxes.
United States Government and from member banks.
There is no provision in the farm loan act authorizing farm Loans on United States Bonds or Notes.
Letter advising Federal Reserve Banks as to the methloan banks to make deposits in Federal Reserve Banks.
ods by which they may make advances to member banks
(Page 379, May, 1917, Bulletin.)
for the purpose of enabling them or their customers to
Federal Farm Land Bank Deposits with Federal Reserve carry or trade in bonds or notes of the United States.
(Page 158, Mar., 1917, Bulletin.)
Banks.
Federal Reserve Banks may properly receive deposits Purchase of United States Bonds.
from the various Farm Land Banks for the purpose of
Resolution of Board regarding purchase of United States
exchange or of collection or for the purpose of paying 2 per cent bonds.
(Page 5, Jan., 1917, Bulletin.)
farm loan bond coupons,
(Page 881, Nov., 1917, Bulletin.)
The Board will not require Federal Reserve Banks to
purchase during the year 1917 more than §15,000,000 of
Interest on Bank Deposits.
After a discussion of the situation as to rates of interest United States bonds offered for sale by member banks
on deposits, which lasted for several weeks, the New York through the Treasurer of the United States.
(Page 240, Apr., 1917, Bulletin.)
Clearing House Association at a special meeting held on
Offerings of 2 per cent United States bonds to June 30,
March 19, arrived at an adjustment of the pending issues.
(Page 507, July, 1917, Bulletin.)
The by-laws of the Clearing House Association were 1917.
amended by adopting a provision covering maximum rates.
This action was nearly unanimous, only three out of the
58 banks and trust companies voting on the amendment
being recorded in opposition.
(Page 285, Apr., 1918, Bulletin.)
Board's policy as to interest on deposits.
(Page 160, Mar., 1918, Bulletin.)

The Board will not, under existing circumstances, require the Federal Reserve Banks to make further purchases of United States 2 per cent bonds.
(Page 879, Nov., 1917, Bulletin.)
MISCELLANEOUS.

Alien Enemies, Transactions With.
Savings Accounts as Time Deposits.
The Federal Reserve Board, acting upon advices reSavings accounts opened under regulations which do ceived from the Department of State, has transmitted to
not specifically reserve to the bank the right to require Federal Reserve Banks for retransmission to member and
30 days' notice before a withdrawal are not savings accounts other banks in the several districts for their guidaiace a
within the definition of that term in Regulation D, series letter relating to transactions of American banks which
of 1917; even though the regulations contain a provision involve dealings with alien enemies.
that they may be amended by notices posted in the
(Page 431, June, 1917 Bulletin.)




?

JUNE 1,1918.

FEDEKAL RESERVE BULLETIN,

Compensation of Member Bank Officers.
The Federal Reserve Board has consistently maintained the position that it should not make rulings on
specific or concrete cases arising under section 22 of the
Federal Reserve Act, because of the fact that, it being
a penal statute, no ruling by the Board would afford any
protection to a person subsequently indicted for a violation of its provisions. (Page 30, Jan., 1917, Bulletin.)

585

tax. There does not seem to be anything to prevent a
bank from giving in its letter of transmittal such instructions as it may see fit as to the presentation or holding of
the draft.
(Page 31, Jan., 1918, Bulletin.)

Section 22, Federal Reserve Act, Violation of.
Any violation of the provisions of section 22 of the
Federal Reserve Act by officers, directors, or employees
of a member bank constitutes a crime, punishable by
Curtailment of Unnecessary Credits.
fine or imprisonment. No ruling or interpretation hy
Policy of Board.
(Page 260, Apr., 1918, Bulletin.)
the Federal Reserve Board would afford any protection
to a person subsequently indicted by a Federal grand
Exports of Coin, Bullion, and Currency—Embargo System.
jury for any such violation, it not being within the provRegulations governing the exportation of coin, bullion, ince of the Federal Reserve Board to make an official
and currency.
(Page 736, Oct., 1917, Bulletin.)
ruling on the provisions of this section.
(Page 694, Sept., 1917, Bulletin.)
Farm Loan Bonds.
Farm loan bonds are issued by Federal farm land banks
Stamp Tax on Acceptances.
incorporated under Federal law, and are not obligations
Acceptances originating outside but payable inside this
of the United States, so that they are not eligible as colcountry as well as acceptances originating inside but paylateral for promissory notes of member banks.
able outside are subject to stamp taxes.
(Page 32, Jan., 1918, Bulletin.)
(Page 950, Dec, 1917, Bulletin.)
Foreign Exchange Instructions.
Instructions to dealers as defined under Executive order Tax on Promissory Notes.
of the President of the United States, dated January 26,
In December, 1914, Hon. Wm. H. Osborne, who was
1918, made public by the Federal Reserve Board on Feb- then the Commissioner of Internal Revenue, advised the
ruary 3.
(Page 185, Mar., 1918, Bulletin.)
Board that the following rulings had been made by his
bureau.
Loans to Directors.
"The rediscount of a note by a bank does not involve
Assent of a board of directors to a loan under section
any tax liability.
22 of the Federal Reserve Act may be given by a resolu"A promissory note payable on demand is not held to
tion of the board of directors fixing a specific amount,
be renewed and subject to tax under the provisions of
but all loans made under such authority should be rethe internal revenue act of October 22, 1914, when acported to and ratified at a subsequent meeting of the
crued interest thereon is paid.
board.
(Page 614, Aug., 1917, Bulletin.)
"A promissory note may have interest payments inOfficers of the Federal Reserve Board.
dorsed thereon without becoming subject to tax if the
life of the note is not contingent upon payment of the
Governor and vice-governor redesignated for 1917-18.
interest and is not extended to a certain future date.
(Page 657, Sept.. 1917, Bulletin.)
"A promissory note given for a fixed period which,
Priorities in Capital Issues.
when due, is allowed to run without suit, is not held to
Statement giving details of the Board's organization for be renewed upon payment of interest. This is looked
the oversight of capital issues.
upon as a forbearance and not as a renewal; the holder not
(Page 77, Feb., 1918, Bulletin.)
relinquishing his right for any stated period, and, thereFormation of 12 local committees of Capital Issues Com- fore, no stamp is required in such cases."
mittee.
(Page 166, Mar., 1918, Bulletin.)
(Page 950, Dec, 1917, Bulletin.)
Regulation of Foreign Exchange.
Use of Coin Counting Machines.
Text of an Executive order signed by the President on
Statement, of Board discouraging the practice of using
January 26, 1918, prescribing rules and regulations under
section 5 of the trading-with-the-enemy act and supple- coin-counting machines.
(Page 440, June, 1917, Bulletin.)
menting rules and regulations heretofore prescribed under
title 7 of the espionage act.
Use of the Word "Federal."
(Page 81, Feb., 1918, Bulletin.)
It is decidedly against the policy of the Federal Reserve
Revenue Stamps on Time Drafts.
Board to encourage the use of the word " Federal" as part
Banks should have their customers draw such drafts of the title of member banks.
(Page 615, Aug., 1917, Bulletin.)
simply as demand drafts which are not subject to a stamp




586

FEDEBAL RESERVE BULLETIN.

Taxability of Income from Investments in Liberty Bonds.
A ruling 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.
(Page 459, June, 1917, Bulletin.)
War Savings Certificates as Christmas Gifts.
The attention of bankers, employers of labor, and of
individuals should be directed to the new war savings




JUNK 1,1918.

certificate plan as being an entirely suitable and patriotic
method of handling the matter.
(Page 951, Dec, 1917, Bulletin.)
War Stamp Taxes.
Reprint of Treasury decision (T. D. 2682) relating to
war stamp taxes on negotiable instruments.
(Page 316, Apr., 1918, Bulletin.)

INDEX.
Pa e
Acceptances:
sBanks granted authority to accept up to 100 per
cent of capital and surplus
492
Distribution of, statement showing.
554
Act authorizing national banks to contribute to the
Red Cross
498
Average rate and maturity of paper discounted by
the Federal Reserve Banks each month
551
Business conditions throughout the Federal Reserve districts
.
527-547
Capital Issues Committee, work of
494
Charters issued to national banks during the month. 509
Charts:
Deposits, loans, and investments of national
banks, 1914-1918
503
Movement of prices, 1914r-1918
505
Check clearing and collection system, operation of. 550
Checks, report on law and practice relating to, by
central executive council of the International
High Commission
518
Coin, bullion, and currency movement, control of..
499
Commercial failures reported
510
Currency, paper, outstanding
519
Deposits of public moneys
464
Deposits, loans, and investments of national banks,
1914-1918
502
Chart showing
„
503
Digest of informal rulings of the Board, January,
1917, to April, 1918
571-586
Director, class C, named for Federal Reserve Bank
of Richmond
491
Discount operations of the Federal Reserve Banks. 552
Discount rates in effect
570
Earnings on investments of Federal Reserve Banks. 569
Exports of coin, bullion, and currency, licenses
covering, September 7, 1917, to May 24, 1918.... 501
Federal Advisory Council, meeting of
490, 491
Federal Reserve agents' fund, transactions through. 549
Federal Reserve Banks:
Earnings on investments of
569
Resources and liabilities of
559
Federal Reserve note account of Federal Reserve
Banks and agents
562
Fiduciary powers granted to national banks
492
Gold export, control of
499
Gold imports and exports
570
Gold settlement fund, transactions through
548
Indexes of business conditions
491
Informal rulings of the Federal Reserve Board:
Rediscount of paper indorsed by nonmember
bank
520
Acceptance of draft against sugar in bond
520
Bills payable elsewhere than in the United
States
520
Discount of acceptances not paid at Federal
Reserve Bank
521




Informal rulings of the Federal Reserve Board—Continued.
Date for payment of dividend
521
Use of the word "reserve "
521
International High Commission, report of, on uniformity of law and practice with reference to
checks
518
Jones, Breckinridge, address of, on State banks entering the Federal Reserve system
510
Law department:
Membership of branch of State bank
522
Decision of Supreme Court of Illinois in fiduciary case
522
Amendments to New York and Kentucky
banking laws
524-526
Liberty bonds:
Conversion of the different issues of
517
List of, lost or stolen
515-517
Liberty loan, success of
484, 509
Member banks, statement showing condition of
564
Money, amount of, held by the Treasury, the Federal Reserve Banks, and the public
506-508
National banks, charters issued to, during the
month
509
President of the United States:
Address of, before Congress, on taxation measure. 497
Statement of, on thrift and purchase of securities 483
Prices, monthly changes in, 1914-1918
504
Chart showing
505
Red Cross, act authorizing national banks to subscribe to
498
Regulations governing the exportation of coin, bullion, and currency, revision of
499
Resources and liabilities of Federal Reserve Banks. 559
Review of the month:
Success of the third Liberty loan
484
Use of certificates of indebtedness
485
The question of saving
485
Prices, credit, and currency
486
Rates of discount
487
Silver situation
487
Movement of gold
488
Operations of the Federal Reserve Banks
488
Condition of member banks
489
Meeting of Federal Advisory Council
490
Silver certificates, progress in retiring of
493-495
State banks:
Address of Breckenridge Jones regarding membership of
510
List of, admitted to system during the month.. 508
Treasury certificates of indebtedness:
Issue of
518
Number of subscribers and amounts subscribed
to the six issues preceding the third Liberty
loan
558
War Finance Corporation, operations of
495-497

o

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