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FEDERAL RESERVE
BULLETIN




ISSUED BY THE

FEDERAL RESERVE BOARD
AT WASHINGTON

MARCH, 1910

WASHINGTON
GOVERNMENT FEINTING OFFICE
1916




FEDERAL RESERVE BOARD.
EX OPPICIO MEMBERS.
WILLIAM G. MCADOO,

Secretary of the Treasury,
Chairman.
JOHN SKELTON WILLIAMS,

Comptroller of the Currency.

CHARLES S. HAMLIN, Governor.

FREDERIC A« DELANO, Vice Governor.
PAUL M. WARBURG,
W. P. G. HARDING.
ADOLPH C. MILLER.
H. PARKER WILLIS, Secretary.

SHERMAN ALLEN, Assistant Secretary.
M. 0. ELLIOTT, Counsel.




SUBSCRIPTION PRICE OF BULLETIN,
The Federal Reserve Bulletin is distributed without charge
to member banks of the system and to the officers and directors
of Federal Reserve Banks.

In sending the Bulletin to others the

Board feels that a subscription should be required.

It has

accordingly fixed a subscription price of $2 per annum.

Single

copies will be sold at 20 cents.

Foreign postage should be added

when it will be required.

Remittances should be made to the

Federal Reserve Board.

Member banks desiring to have the

Bulletin supplied to their directors may have it sent to not less
than ten names at a subscription price of $1 per year.

TABLE OF CONTENTS.
Work of the Board
....
Meeting of Advisory Council
Information on trade acceptances
i.,
Address b y Hon. P . M. Warburg
Gold settlement fund
Discount rates
Informal rulings of t h e Board
Law department.
Statements for t h e press
Fiduciary powers granted
Additions to and withdrawals from intradistrict clearing system
Cost of b a n k examinations
Chart showing paid-in capital and reserve deposits of Federal Reserve Banks
Business conditions throughout t h e 12 Federal Reserve districts
Distribution of discounts, b y sizes and maturities
Acceptances
Federal Reserve Bank statements
Gold imports and exports
Earnings on investments of Federal Reserve Banks
IV




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99
100
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Ill
114
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141
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149

FEDERAL RESERVE BULLETIN
VOL.

2

MARCH 1, 1916
WORK OF THE BOARD.

The Board has had under advisement during
the past month the question of statements to be
madeby Statebankmembers andhas determined
that in all cases where the form of statement
prescribed by State banking departments is
satisfactory and the member bank so advised,
it shall be regarded as fulfilling the requirements of the Federal Reserve Act with reference to a statement, the Comptroller of the
Currency concurring in this view. Whenever,
therefore, a call is simultaneously made by the
Comptroller of the Currency and the State
banking department, the State member banks
merely prepare a, copy of the statement and
forward it under oath to the Comptroller of the
Currency. In those cases where the call for
condition made by the State banking department falls upon a date different from that
made by the Comptroller, the State member
banks may fill out a blank identical with that
prescribed by the State banking department under the conditions hereinbefore stated. Effort
is, however, being made to obtain simultaneous
action by State banking departments in order
that Federal and State calls may fall on the
same date whenever possible.
The question of refunding Government 2 per
cent bonds into 3 per cent bonds has received
further and detailed investigation during the
month and has been carefully studied by the
officers of the Treasury Department with a view
to developing a policy to be jointly adopted by
the Treasury Department and the Federal Reserve Banks. A definite announcement on the
subject will be made in the near future, March
31 being the date at which actual allotment of
bonds under the $25,000,000 provision of the
Federal Reserve Act must be made to Federal
Reserve Banks, while the question of refunding
will become of immediate and urgent interest
directly after such allotment has been made.




No. 3

Completion and publication of its second
annual report, including in the volume the reports of Federal Reserve Agents and full statistics regarding the activities of the several
banks during the past year, have occupied the
attention of the Board during the early part of
the month of February, the advance copy of
the report being released for publication on the
12fch of the month, while the completed issue
was distributed on the 25th.
The Board has prepared and made ready for
publication a revised draft in simplified form
of its regulations relating to rediscounts on behalf of member banks, and its instructions
governing the conduct of member banks in so
far as established by the Federal Reserve Act.
These revised regulations will be th& first number of the series of 1916, and will supersede all
other regulations relating to the same subject.
The text of amendments to the Federal Reserve Act, designed to put into effect the recommendations made in the report to Congress,
have been carefully considered and tentatively
adopted by the Board.
Further consideration has been given to the
development of the system of check clearance
and collection pending the receipt of an opinion from the Attorney General of the United
States in answer to the questions put to him
by the Board. A definite ruling with reference
to the question of clearances and collections
will probably be issued at an early date.
On February 25 the Board, after having
given careful consideration to the petition of
certain banks in Louisiana to be transferred
from the Federal Reserve Bank of Dallas to
the New Orleans Branch of the Federal
Reserve Bank of Atlanta, passed the following
resolution:
Resolved, That all of Louisiana north of the
parishes of Vernon, Rapides, and Avoyelles
remain in the Eleventh Federal Reserve District, and that the remaining part of the State of
99

100

FEDERAL RESERVE BULLETIN.

Louisiana now in the eleventh district be
transferred to the Sixth Federal Reserve District, and the banks therein allotted to the
New Orleans Branch of the Federal Reserve
Bank of Atlanta.
Mr. W. B. Newsome, of Dallas, has been
elected a class C director and designated as
deputy Federal reserve agent at Dallas, Tex.
Meeting of Advisory Council.

Members of the Advisory Council of the Federal Reserve Board held the first meeting for
1916 in the Board room on February 15. This
gathering was preceded by a meeting of the
executive committee held on February 14.
The Federal Reserve Board met with the council on the afternoon of February 15 and received its report and suggestions.
The interesting development of the meeting
of the council was a reconsideration of its action at the last previous meeting when it went
upon record as favoring a reduction of the capital stock of Federal Reserve Banks. There have
been changes in the membership of the council, and when the matter of reduction of stock
was again considered a recommendation was
made to the board that for the present no reduction should be urged. A minority report
was, however, presented. Reports of conditions in the several districts as to industrial
activity and the banking situation werejorally
made.
Those members of the council present at the
meeting were: Mr. Daniel G. Wing, Boston;
Mr. Levi L. Rue, Philadelphia; Mr. W. S. Rowe,
Cleveland; Mr. J. W. Norwood, Richmond;
Mr. Charles A. Lyerly, Atlanta; Mr. J. B. Forgan, Chicago; Mr. C. T. Jaffray, Minneapolis;
Mr. E. F. Swinney, Kansas City; Mr. T. J.
Record, Dallas; Mr. Herbert Fleishacker, S^an
Francisco.
Appointment of Bank Examiner.

J. K. Doughton, of North Carolina, was on
February 7 appointed chief national bank examiner for the Sixth Federal Reserve District, with headquarters at Atlanta. Ga.




MARCH 1,1916.

Information on Trade Acceptances.

There was sent out by the Federal Reserve
Bank of Cleveland under date of January 20,
a printed letter on trade acceptances which so
well covers the matter that it is reprinted
below.
Since the Federal Reserve Board issued its
circular and regulation relating to "trade acceptances/' constantly increasing interest in
this form of commercial paper is being manifested by alert and resourceful bankers, manufacturers, wholesalers, and dealers.
Briefly, the "trade acceptance7' is a draft of
definite maturity, drawn, to order on a buyer
by a seller, and bearing across the face of the
instrument the signed acceptance of the buyer,
without qualification or conditions.
There can be no question of the desirability
of developing this class of credits in the United
States, in the interests of banking, commerce,
and industry. In all modern banking systems,
the acceptance is the most desirable form of
investment, and it is the most satisfactory
method of settlement in the business world.
The directors of the National Association of
Credit Men have recorded their belief "that
trade acceptances present conveniences, and
economies which should appeal to the encouragement and support of commercial credit
grantors/' and that "the trade acceptance
system would eliminate certain serious evils
which have developed with the increase of
commercial credits on an open-account system
and of which the unearned discounts, the
abuse of sales terms, and the assignment of
accounts receivable are the more prominent."
Acceptance is of benefit to the seller of goods
in a great many ways, among which the following are noteworthy:
(1) It completes the transaction, joining the
payment with the shipment or invoice;
(2) I t eliminates open-book accounts, and
substitutes bills receivable, or actual cash from
discounted bills, in the assets of the seller;
(3) It gives to the seller additional credit
facilities, in that such business paper discounted does not necessarily count in the
amount of credit extended or authorized;
(4) By reason of its "double name" aspect,
it has a broader and better market, and lessens
interest rates for the seller;
(5) It assures promptness and avoids unjustified extensions;
(6) It promotes economy and efficiency of
operation by establishing cooperation.

MARCH 1,1916.

Acceptances are advantageous to the purchaser—
(1) In eliminating open accounts;
(2) In closing the transaction at the time of
purchase;
(3) In providing payment coincident with
purchase;
(4) In facilitating adjustments and settlements.
Among the plans which have been suggested
by banks and business institutions for developing "trade acceptances" the following detailed
method is given as an example/from which
other means, suitable to special conditions, will
be apparent:
The manufacturer or wholesaler, upon making shipment of goods, sends with the invoice a
draft according to his terms of credit (e. g.,
1 per cent discount for payment in 10 days, 60
days net) accompanied by a letter to the purchaser, explaining the draft, emphasizing its
advantages, and requesting the purchaser, if he
desires the credit to run for its agreed term, to
accept and return it. The purchaser will enter
the acceptance upon his books and arrange for
payment upon presentation either at his place
of business, or, preferably, at his bank, and return the acceptance to the seller, who will enter
it upon his books and place it in his note files,
unless he desires to discount it at his bank at
once. If he does not need the proceeds at once,
the seller will deliver the bill to his bank for
collection as it approaches maturity, and it will
then become a banking transaction, the same
as other items forwarded for collection.
Bankers and business men are urged to exert
earnest efforts in the development and establishment of this most desirable improvement in
our credit machinery, and are assured that such
action is in accord with the best thought of the
financial and commercial world.
By encouraging customers to send such
drafts with their invoices, accompanied by an
explanation of their advantages, member banks
can secure perhaps the most liquid class of investments, available at any moment for immediate rediscount at the Federal Reserve Bank,
at the most favorable rates.
The trade acceptance eligible for rediscount
is more fully defined in Regulation P, accompanying circular No. 16 of the Federal Reserve
Board, series of 1915, which has been sent you
by this bank.
As samples, there are inclosed two blank
forms of drafts, satisfactory for use in this
Federal Reserve district, which meet the requirements of the Federal Reserve Board as
set forth in the circular and regulation men-




101

FEDERAL RESERVE BULLETIN.

tioned. Form No. 1 is for use directly between the seller and the purchaser, as outlined
above; form No. 2, for use where a different
payee than the drawer is desired.
The Federal Reserve Bank of Cleveland
stands ready to render any assistance within
its power in this work.
FEDERAL RESERVE BANK
OF CLEVELAND,
E. R. FANCHER, Governor.

With the letter the Cleveland Federal
Reserve Bank included two acceptance forms
which are also reproduced.
FORM NO. 1.

No

. . . . . . . . . . . . . . 191.. $ . . . . . . . .

Thirty 1
[date
Sixty > days after <
pay to the order of ourselves
Ninety J
[sight
..

.

.

Dollars.

The obligation of the acceptor hereof arises out of the
purchase of goods from the drawer.
To

FORM NO. 2.

NO
..

- 191..
.after

$....,...

.pay to the order of

„ Dollars.
The obligation of the acceptor hereof arises out of the
purchase of goods from the drawer.
To

(Across face.)

Accepted

191..

Payable at
(Designate bank or
place of payment.)
(Signature of acceptor.)

102

FEDERAL RESERVE BULLETIN.

SOME ECONOMIC PROBLEMS OF THE exports and for other credit operations, while simultaneously our own American bankers' acceptances sprang
DAY.
into existence. They are being drawn to-day from South
There is given below an address made by
Hon. Paul M. Warburg, member of the Federal
Reserve Board, on January 25 before the New
York Credit Men's Association, meeting in New
York.
Our country is passing at present through a period of
economic development the scope and rapidity of which
have never been paralleled. Originally opened and developed by foreign enterprise, and, until the fall of 1914,
still dependent upon Europe for the financing of its foreign
trade, and, to a certain extent, its crops, and its industrial
undertakings, this great continent in less than two years
has not only asserted its complete financial emancipation
but has become, for the present at least, the world's
banker.
Two factors have cooperated in bringing about this
result: The European conflagration and the opening of
the Federal Reserve banking system. It may, therefore,
be interesting and timely to consider to-night some of the
phases of the interplay of these two forces and the policy
and methods best to be pursued in meeting and directing
their influence at this momentous juncture, marking, as
it does, the turning point in our economic history.
The far-reaching effects of the war, as they have worked
in favor of the United States and to the disadvantage of
Europe, are apparent to all. The effects of the opening of
the Federal Reserve Banks are not quite as easily discernible to the casual observer.
The Federal Reserve System has created a condition of
health and strength which is accepted by many as a process
of nature without thinking of the men whose thought and
energies brought into life, at almost a providential moment,
this remarkable piece of banking machinery. It is true,
none the less, that without the steadying influence of this
system, without the new machinery that it provided for
the financing of our foreign trade, we should have sunk
lower and should not have risen so far and so fast. Had
it not been for this feeling of safety this country could
not, at one and the same time, have absorbed its own
securities and granted foreign loans estimated to aggregate together the staggering amount of one billion and a
half to two billion dollars, and while these imposing transactions were being carried through crops were moved at
the lowest rates ever known. Without the usual seasonal
fluctuations in interest rates and without a ripple of financial difficulty we passed through political situations which,
in years gone by, might have caused violent financial disturbances. Panics, such as we had become accustomed to
expect as things inevitable, have become phenomena of
the past. At the same time some hundreds of millions of
dollars were provided to pay off the long bills our bankers
formerly drew on Europe for the moving of our imports and




America, the Far East, and from Europe for the purpose
of financing not only our own trade but also that of foreign
nations.
It has been suggested, however, that these results have
been achieved as an indirect incident of the existence of
rather than as the direct effect of the operations of the
Federal Reserve System. We do not deny this fact, but we
might well ask these critics whether they would measure
the degree of efficiency of a municipal administration by the
large number of murderers sent to the electric chair or
rather by the small number of crimes committed?
After all, what is the real object of the Federal Reserve
System? Stripping the problem of many important side
issues is it not, in substance, to increase the safety of our
banking structure and to bring about stability and, as far
as possible, equalization of interest rates in the various
sections of the country?
The service rendered by the Federal Reserve System
must never be measured by the volume of its own business
or by the amount of its earnings, but by the degree of
success with which it obtains its aims. Can you see in
your mind's eye the curve representing the fluctuations of
our past interest rates? You will find it to be a wild, zigzag line rapidly moving up and down between more than
100 per cent and 1 per cent; Teach the country to watch
that curve in the future; the straighter the line, the smaller
its fluctuations, the greater will be the beneficent effect
of our system.
There appears to be a great deal of confusion of thought
about the proper functions of Federal Reserve Banks and
the policy to be pursued by them in attaining the ends
for which they have been organized, particularly about
the question whether or not Federal Reserve Banks
should or should not avoid competition with the national
and State banks and trust companies.
The policy of Federal Reserve Banks must be guided
by one single consideration, which is the public interest.
Federal Reserve Banks must neither fail to engage in
transactions—which would redound to the benefit of the
country—for the reason that these might entail expense
or loss; nor must they, on the other hand, enter on transactions on account of the earnings to be derived, should
those transactions or functions run counter to the public
interest, or should they lessen the ultimate ability of the
Federal Reserve Banks to render the largest service for
the general benefit of the country.
In carrying out their policy they must neither compete
for the sake of competition nor omit competing for the sake
of avoiding competition. In performing functions with
which they are charged by the law, they must compete
or not compete as the public interest requires.
The present maximum lending power of the entire
Federal Reserve System on a gold-reserve basis of 40 per
cent is about $600,000,000. The total loans and invest-

MARCH 1,1916.

FEDERAL RESERVE BULLETIN.

ments by national banks amount at present to about
$9,000,000,000; those of State banks and trust companies
(including savings banks) are estimated at about $13,000,000,000. It is obvious that it can not possibly be the object of the Federal Reserve System, by competition, to
substitute a lending and investing power of $600,000,000
for that of all the banks of the country, amounting to
about $22,000,000,000. The aim of the system must rather
be to keep this gigantic structure of loans and investments, which is largely carried by bank deposits, both
from overcontracting, and, as well, from overexpanding,
so that, as the natural and inevitable result, it may not
be forced to overcontract.
Effectively to deal with the fluctuations of so gigantic a
total is a vast undertaking. If the task is to be accomplished successfully, it can not be by operations which
are continuous and of equal force at all times, but only by
carrying out a very definite policy which will not only
employ funds with vigor at certain times, but, with equal
determination, will refuse to employ funds at others.
That during periods of actual employment the Federal
Reserve Banks will make large earnings, and that during
periods when a restriction in the activity of Federal Reserve Banks is indicated by general conditions their
earnings will or should be smaller, are incidents which
have no bearing upon the measure of their usefulness.
Federal Reserve Banks when accumulating and keeping
idle their funds are exercising as useful a function as when
they are employing them. If safety and the stabilization
of rates form the soundest foundation for general prosper
ity, everything that the Federal Reserve Banks do in
avoiding excessive rates—whether these be too high or too
l0w—will result to the benefit of the Nation. If the potential or actual employment of $600,000,000 can have this
effect upon loans and investments of $22,000,000,000 (of
which $16,000,000,000 are loans and discounts), the usefulness oi the Federal Reserve system is proven. That does
not mean that we shall ever have to contemplate conditions such that the.entire funds of the Federal Reserve
Banks will lie idle. A certain proportion ^ill and must
always remain in active service as a regulatory force. As
their field of operations increases and as the circulation
issued by the national banks is reduced doubt about their
ability to earn their running expenses will disappear.
Ultimately Federal Reserve Banks will have no difficulty
in earning their dividends, too—-when once they occupy
their proper position and when they have had the opportunity of averaging their operations over a reasonable
period. But a fair time must be given them for reaching
this condition.
We must not forget that it took the European large central banks many years, often generations, to secure their
to-day's dominating strategic position. And we must
furthermore be mindful oi the fact that the Federal Reserve
System at present is operating in a period when the curve
showing our interest rates must be considered as strongly
subnormal, thus clearly indicating for Federal Reserve
Banks a policy of conservatism.
28520—16
2




103

The lending power of the Federal Reserve Banks though
very large, and though in emergencies it can be vastly
increased by the Board's power to reduce or suspend reserve requirements, is, after all, definitely limited. Moreover, constituting as it does the reserve power of the
country, it can not be drawn upon beyond a certain point
without creating alarm.
The regulative influence of the increase or decrease in
interest rates must therefore be applied from time to time,
and the more readily bankers and business men cooperate
in the policy thus indicated by the Federal Reserve Banks
the smaller will be the variations to be expected, excepting of course periods of extraordinary disturbances at home
or abroad, when more drastic measures may be needful.
To bring about stability of interest rates two things are
necessary: First, judicious withholding, and in turn judicious employment by Federal Reserve Banks, of their lending power, and, second, recognition by banker and business
man that the measure of success to be achieved by the
Federal Reserve System will to a certain extent depend
upon the degree of their own cooperation with the policy
of the Federal Reserve Banks.
And this leads me to a phase of the problem concerning
which I am particularly anxious to speak to you to-night.
That is the cooperation of the business community in
bringing to the fullest fruition the service to be rendered
by the Federal Reserve Banks.
Until now we have been laying the foundation and
installing the machinery for future operations, I believe
we have now fairly finished this first part of our task, and
further development will from now on depend to a large
degree upon the banks and the public.
In order to remain liquid and deservng of the unqualified confidence they require, Reserve Banks must employ
their funds in investments of the most liquid character
only. The larger the amount of such paper that is available the larger willbe the field of operation open to these
banks and the better can they perform the function of
either employing their funds freely or. with equal freedom,
collecting their maturing paper and keeping their funds
idle when that course is indicated. In order effectively
to develop their operations, Federal Reserve Banks can
not depend upon the borrowing requirements of their
member banks alone since that, in many districts, would
be a wholly inadequate field for their activities. The
first year's experience has already shown that they must
look largely to open-market operations, such as purchases
of bankers' acceptances, bills of exchange, warrants, United
States bonds, etc., in order to secure their share of business
and influence.
Their most important field, in this respect, is the bankers' acceptance, the use of which it is confidently hoped
will, from now on, steadily increase. Unfortunately, the
development of this method of financing importations and
exportations has thus far been comparatively slow.
Either the merchant, or the banks, or both, lack the full
appreciation of their opportunities—we might say of their
national duties—in this respect. While great headway

104

FEDERAL RESERVE BULLETIN.

has already been made and while it is realized that real
progress must be gradual and that some of the foreign
banks now occupying the field are blocking our way as far
as they can, we ought, nevertheless, to be further advanced
in this direction than we are to-day. With our acceptance discount rate at about 2 per cent against the British
discount rate of about 5 per cent, with our exchange for
dollars high and secure, while European exchanges are
low and unstable, we ought to-day to be doing a larger
acceptance business. A few of our banks have been very
energetic, others have been wholly inactive, partly because of ignorance of the methods to be employed, partly
because of their inability or unwillingness to secure men
who are expert in this business. Some banks, I suspect,
prefer at this time to make cash advances rather than to
grant acceptance credits, because they wish to employ
their own funds. That, however, is short-sighted policy.
Every effort ought to be bent at this time, both at home
and all over the world, to introduce the use of our bankers'
acceptances. It is inevitable that at the end of this unfortunate war we shall be the one nation to which logically
the world will look for credit facilities. To grant these
acceptance credits will be one of the functions which, from
now on, we shall be called upon to perform in a constantly
growing measure. Not only is it wise for the accepting
firms to take up with energy this branch of banking, but,
for the future of the Federal Reserve System, it is of the
utmost importance that our banks should hold as an asset
hundreds of millions of this most liquid paper which, at
any time, they can dispose of to the Federal Reserve Banks.
This will not only widen the field of operation open to our
Federal Reserve Banks, but will prove a source of safety
for us in our international financial relations. Incidentally, I am looking forward to the time when even country
banks will carry these bankers' acceptances as quick assets rather than demand balances with other banks.
The Federal Reserve Board hopes that we may succeed
in securing a broadening of the powers of national banks
so as to permit them to accept, not only against transactions involving the importation or exportation of goods,
but also against domestic transactions secured by the
pledge of readily marketable staples, by goods actually
sold, or by shipping documents covering goods in course
of transportation. It is easy to see the great influence
that such an amendment to the present law would have
in equalizing rates. If cotton, properly warehoused in
Texas, can be pledged to an accepting bank in Texas,
Chicago, or New York, the proceeds of the acceptance at
the discount rate of, let us say, 2 per cent, would flow
from whatever would be the lowest discount market into
Texas and relieve the banks in that district.
And here we touch upon a point that I would wish to
impress upon your minds, namely: Equalization of discount rates is dependent upon standardization of credit,
and it can not be brought about by legislative enactment
or Government machinery, but only by the action of the
banks and business men themselves. Farmer Jones may




MARCH 1,

1916.

be able to secure money from his bank on his own note
only at 6, 7, or 8 per cent, but if he can store his grain or
cotton with a properly organized warehouse and secure
the acceptance of a good bank the bill will sell at the lowest
rate, provided the accepting bank is sound. It does not
matter whether money at that time be higher at New
Orleans or Minneapolis than at Chicago or New York; if
the New Orleans or Minneapolis bank's acceptances are
good they will sell substantially at the same low rate as
those of the banks in Chicago and New York. Raise the
standard of banking and warehousing—use modern banking methods—and equalization of interest rates must
follow automatically. No law will ever remove the difference between good and bad. There are different grades
in cotton and grains and, similarly, there are different
grades in credit. We can not equalize credits, but we
can bring about equalization of interest rates for similar
grades of credit all over the country.
And now a word about trade acceptances. I have read
with the keenest interest the very intelligent articles that
you have published in the Bulletin of the National Association of Credit Men, and the speeches made by your officers
concerning this topic, and I congratulate you upon the excellent work that you are doing in the matter. You have
clearly pointed out that the trade acceptance offers the great
advantage of converting a nonnegotiable book account into
a live liquid asset, and you are doing a most valuable work
of education when you teach the merchant or manufacturer
that, under the present system, having sold his goods, he
has to borrow on his own promissory note, using his own
credit, while, if he adopted the system of trade acceptances
securing the obligation of the customer purchasing the
goods, he would be selling an asset instead of incurring a
debt. You have so forcibly pressed home all the arguments concerning this problem that I should not know
how to add to them. I can only express my great satisfaction at finding myself in such complete accord with
you. When it comes to the question of the eligibility of
single-name paper for rediscount with Federal Reserve
Banks, I always have a kind of David Harum feeling:
"Yes an' no, mebbe an' mebbe not." Because of this
doubt, we have felt that we had to ask for evidence in order
to be certain that such a bill complied with the law as to the
use. of its proceeds. The trade acceptance, on the other
hand, unless it be fraudulent paper, carries on its face the
assurance of its legitimacy—it evidences a definite debt
of the purchaser to the seller, to be liquidated on a definite
date. The board has, therefore, encouraged reserve banks
and their customers to offer for this kind of paper a rate of
discount lower than that for single-name promissory notes.
It is greatly to be hoped that its free use will grow. National
banks may indorse these trade acceptances without limit,
while the indorsement of single-name paper to banks or
individuals other than Federal Reserve Banks would,
under the National Bank Act, count as a liability which,
as you know, is limited for national banks to 100 per cent
of capital. As our system further develops, good trade

MARCH 1, 191f>.

FEDERAL KESEKVE BULLETIN.

acceptances will, therefore, become an investment preferred by member banks and selling at a rate lower than
enjoyed by single-name paper. The more good paper of
this kind is developed, the more will it be used by the
banks as a secondary reserve, and the more general will
become the habit of rediscounting this paper—particularly
for short maturities—with the Federal Reserve Banks.
It is the first duty of Federal Reserve Banks to be liquid.
Therefore they must invest only in the better grades of
paper offering through their acceptances or indorsements
satisfactory guaranty as to prompt payment upon maturity.
The more freely these trade acceptances are indorsed and
standardized the wider, therefore, will become the field
of operation of Federal Reserve Banks. Under the lav/
Federal Reserve Banks are permitted to buy this doublename paper even without the indorsement of a member
bank. Personally I should not be surprised to see a gradual establishment of rates favoring trade acceptances as
against promissory notes even to a further degree than in
the past.
You may therefore feel certain that the work you are
doing in encouraging the use of trade acceptances is of
great value to the growth of the Federal Reserve System
and of sound credit and banking.
In actual operation the problem of the Federal Reserve
System is, like your own, largely one of analysis. Success or failure in banking and business are largely dependent upon careful analysis both of the individual statement and the conditions of the entire Nation, indeed, of
all the world.
The Federal Reserve System is a structure essentially
based on gold and confidence (that is, credit), and in
order to be safe and sound it must be possessed of an effecttive machinery for judging credits from the smallest to
the largest units. You can therefore readily see how important for us is the work of credit analysis done by the
members of your association. Your efforts and those of
our banks in many respects run in the same direction.
The Federal Reserve System, like you, believes in and
insists upon frankness. Our member banks are required
by law to make full statements. We think that an ounce
of prevention is better than a pound of cure. If our
Federal Reserve Banks carefully study the statements
made by their member banks, we shall, as we go forward,
avoid serious trouble by detecting and correcting it in its
early inception. This same principle we strive to have
applied by our member banks in dealing with their own
customers, and our insistence on their receiving statements will render it easier for them to overcome resistence in this respect on the part of their customers. There
is safety—not only in numbers—but also in frankness! On
the whole, I suppose it is your experience, as it has been
mine, that if a man says that he is too proud to show his
statement, the statement generally is not one to be proud
of. Your call for frank and intelligent credit statements
and your ability to draw proper conclusions therefrom will
prove of the very greatest importance for the safety of our
banking system.




105

When from the individual statement we turn our attention to the credit statement of our country and to that of
the entire world, we must confess to great perplexity. It
is the duty of every conscientious captain of banking or
industry to look ahead and ascertain as nearly as possible
the future course of the two great forces of demand and
supply. But the standards of past experience can not be
applied in the present unprecedented situation and our
economic future will depend on many factors which we
must still consider as hopelessly unknown. One of the
most important items in the equation will be the degree
in which the unfortunate nations now involved in a death
struggle shall become exhausted; and this in turn will depend upon the time over which the contest shall be prolonged. We can, therefore, safely speak only of the
broadest aspects of the subject. What we may say with
confidence is that if our creditor position be not weakened,
the end of the war, no matter when it may come, will
find us so greatly strengthened as compared with the leading European powers, that we shall almost inevitably take
our place as the world's banker. It will probably fall to
us to finance these nations, at least to a certain extent,
and for a time, on the other hand, there is the danger that
this new business that has come to us owing to extraordinary conditions may mislead us into building an expanded credit structure upon an unstable foundation of
shifting gold—some of which we may not be able to hold
permanently—and a heavy industrial structure upon a basis
of ephemeral demands. This danger is real, and so we
find at present two schools of thought, one looking into
the future with unbounded confidence and the other anticipating drastic reaction and collapse. But, if this
danger exists, as no doubt it does, do we, like the old
Greeks, believe in an inexorable fate, and must we bend
our necks and patiently await the blow? Or is it not
worth our while to deal with the problem of our economic
future as science has dealt with the yellow fever and with
cholera? In other words, can we not, by scientific research, recognize the elements of the problem and find
the means of warding off the danger?
Turning first, then, to an analysis of our banking problem, we should bear in mind that added lending power—
be it by decreased reserve requirements or by an influx of
gold—does not automatically bring about the increased
opportunity for making safe local loans. Only gradually
and only as we shall recognize it for the support of our permanent and solid growth of business—not the mushroom
kind—shall we be able to use it. The danger of a rapidly
and abnormally increased lending power is tl^at it makes
for plethora of money, for too easy rates, exasperating alike
the banker and the investor, and that consequently
it brings forth the tendency of encouraging unhealthy expansion and of making poor investments at home and
abroad. Such conditions have always been the breeders
of economic disasters.
We must furthermore bear in mind the old rule that between countries of fairly equal credits low interest rates
will have the tendency of driving gold to that center where

106

FEDERAL RESERVE BULLETIN.

it can earn the highest interest return. While abnormal
conditions have for the present destroyed the power of interest rates to direct the flow of gold, sooner or later normal
laws of economics will again assert themselves and we
must then expect that, owing to the inflation of currency
created in almost every country involved in the war. the
demand for our gold will be very keen and determined.
We may then have to part with very large sums of gold, but
we must so direct our course as to be able to control this
outflow and let it take place without creating disturbances
in our own economic life.
In order to avoid unfortunate developments we must then
first of all "keep our powder dry;" that is, hold in reserve
the essential strength of the Federal Reserve Banks, not
only to be prepared for possible drain or emergency, but
also, so far as practicable, to offer a check to inflation.
Impatience by the public or by the Federal Reserve
Banks themselves to quickly show results by large profits
must not be permitted to lure us from a safe course.
Strange as it may seem, the words of Milton, when he
said "They also serve who only stand and wait," may be
aptly applied to so modern an organization as the Federal
Reserve System. To stand and wait is often the hardest
of all duties, requiring more courage than to follow one's
impulses in "letting go."
Second, we must greatly increase the degree of our
control over our current gold supply by assembling, so
far as practicable, the gold now wastefully carried in the
pockets of the public, substituting for it our new elastic
reserve notes.
Third, we must take the utmost care not to destroy at
this time the basis of our future lending power. Whatever
foreign loans we may make during the war ought to be of
reasonably short maturity, so that we may keep control of
our gold in case we should later wish to have it at our call.
That will give us a strategic position at the end of the war
so strong that we shall be able effectively to face the
various duties that will confront us, not only toward our
own country, but also toward the world at large.
Fourth, while short loans are advisable in dealing with
foreign countries, this is the time for us to set our own
house in order and arrange for the financing of our healthy
home enterprises on a permanent basis.
Fifth, our banks have so far acted wisely. They have
not considered the reserve now prescribed by the Federal
Reserve Act as the actual limit of their reserve condition.
They have, generally speaking, held reserves in excess of
that limit. It is, however, true that with some this is not
due solely to prudence but partly to the fact that the
great ease of money made it practically impossible for
them to invest a large percentage of their available means.
Increased activity might bring about a change in this respect; but I believe that it should be impressed upon all
the banks that, rain or shine, they should under present
conditions continue to keep their reserves far in excess of
the present legal requirements and that they should not
forget that, on balance, this year they will have to pay




MARCH 1,

1016.

into the Federal Reserve system roughly $110,000,000 and
that if the old standard of reserve requirements were in
force to-day the reserves now shown would be reduced by
about §500,000,000.
If a policy of general conservatism, such as I have outlined, can be systematically followed, thereby maintaining
the strength of our banking position, we shall, in due
course, reap our reward.
I do not by any means intend to suggest undue restriction
upon legitimate industries. I recommend, however, a
careful discrimination between that portion of business and
industry which is solid and permanent and that which is
of a purely ephemeral or a speculative character. The
former should be advanced and fostered by every means in
our power, and it is the duty of our bankers and of the
Federal Reserve system to supply it with its due share of
credit. There is no reason why the regular business of
this country should view the future with alarm. While,
as I have stated, it is to be expected that at the conclusion
of the war Europe will make great efforts to reestablish her
industries and to reopen her markets, it is equally true
that Europe is short of raw materials and that before the
full force of her industries can be brought to bear upon our
markets she must buy many of these raw products largely
from us. Moreover, it will take time to reorganize her
industries, which now, to a large extent, have been turned
into factories producing those articles that are required by
a nation at war. It is therefore not to be feared that the
reaction will come immediately upon the conclusion of
peace, and therein lies a protection which is an important
consideration to be borne in mind by our business men
when dealing with the problems of our home consumption.
American prosperity is of a self-igniting character; one
branch of business reacts upon the other, and the increase
in activity reacts again on the very forces that first acted
as the moving influence. The present wave of prosperity
in the United States appears too powerful to be easily
rolled back or resisted, and there would seem to be no
reason why business, so far as relates to our own normal
demand and consumption, should not continue to be
brisk. I believe that we may say with reasonable assurance to the business men and manufacturers dealing with
our own local requirements, " Be not afraid, and go ahead."
The case is quite different with those industries that
are temporarily over-stimulated by passing conditions
and are using their resources to extend their plants in
order to cope with these extraordinary demands. Very
possibly such plants, in many instances, are built from
profits, and their owners may be well able to afford to
"scrap" them upon the arrival of peace. They will not.
however, adopt so heroic a course, and we must therefore
recognize in these investments, containing, as they do.
possibilities of over-production, the seeds of grave danger.
To those who are engaged in such industries the banking
and business community might well utter a word of
warning. Lot, them use their profits, not in expanding
beyond the limits of prudence, but rather iu developing

1, 191G.

FEDERAL EESERVE BULLETIN.

their existing facilities to the highest possible pitch of
efficiency.
Has not last year's experience shown us the excellent
results that concerted effort can produce in dealing with
problems of this land? The educational campaign for a
divcraifi cation of the crops, which resulted in a largely
reduced output of cotton in the fall of 3915, brought prosperity to the South, while another large cotton crop on
top of that of 1914 might have proved fatal. May we not
hope that we may be able to deal scientifically with questions of manufacture as well as those of agriculture? The
country will need its highest degree of efficiency most
urgently when, after the war is over, we must meet the
competition of European manufacturers forced by necessity to strain every nerve in producing at the lowest possible figure, and under the heavy handicap of weakened
exchange standards, strained or exhausted credits, and
high taxes.
If we are prudent and avoid both banking and industrial
inflation, if we use this period of affluence and unexpected
protection to increase our efficiency and complete our
organization, I do not see why we should not calmly trust
our ability and intelligence in meeting any emergency the
future may have in store for us. It is with this point in
view that I so strongly urge our bankers not to lose this
opportunity of perfecting our banking machinery for the
purpose of developing relations with foreign countries.
The only distinct effort in this direction has been made in
Now York and, to a certain extent, in Boston and Philadelphia, for the rest of the country appears to be so busy
making money that apparently it has not found the time to
provide for the future.
Our opportunity for successful foreign trade has been
vastly increased because foreign business is carried on
largely with credit, and in granting credit the United
States will, after this war, be stronger than any other
country. There is a close interrelation between loans to
foreign nations and business transactions in those foreign
countries. It is true that foreign loans stimulate foreign
trade, but it is equally true that it is impossible to place
large loans unless there exists in the creditor country an
intimate knowledge of the condition of the debtor nation.
If thousands of our merchants know South America or the
Far East, and spread their knowledge in our country, they
will create that atmosphere of intimacy and confidence
without which it is absolutely impossible to create an
extensive investment market for foreign securities. In
the past we have not conquered foreign markets to a greater
extent largely because we have been too prosperous at
home and because we did not think it worth while to
accommodate ourselves to foreign methods or to grant
credits in far-away countries.
The enormous lending power that we shall enjoy will
give us a tremendous advantage in the future. It will be
for the American business man and investor to decide to
what degree the United States shall become a nation of
world bankers. Our great prosperity should not make us
forget those opportunities almost beyond measure, lying




107

at our door, and which, on account of our present prosperity, we should not be guilty of neglecting.
I am very grateful to you, gentlemen, for having permitted me to discuss with you to-night some of the problems as they touch your own individual work, that of the
Federal Reserve System and the larger aspects of these
questions as they affect the entire Nation.
The ultimate outcome of the most gigantic of all struggles
ever fought is still shrouded in mystery. But, out of the
mist, our future looms large, resplendent with opportunities yet burdened with serious obligations. Simply to wax
prosperous through the misfortunes of others can not be
the destiny of this great country. Sometime and somehow the future must bring us an opportunity of giving
back to the world in service what fate is now lavishly
throwing into our laps. Whatever our tasks and duties
then may be. I know that you, business men of the United
States, will meet them in the same broad and helpful
spirit that has guided you in the past in struggling with the
problems of our country.

Extra Copies of Bulletins.
There has been a very steady demand for
back numbers of the Federal Reserve Bulletin
and they are now practically exhausted.
It will very soon be impossible to obtain such
numbers.
Class C Director at Dallas.
W. B. Ncwsome, Dallas, Tex., was on February 10 named by the Federal Reserve Board
as class C director tor the Federal Reserve
Bank of Dalks and designated as deputy
chairman and deputy Federal Reserve Agent.
Mr. Newsome fills the place made vacant by
the withdrawal of Edward Rotan.
Mr. Newsome was formerly president of the
Collin County National Bank of McKinney,
Tex., but has now retired from active business,
although retaining his interest and directorships in various enterprises such as the Texas
Cotton Mills, McKinney; Collin County Mill
& Elevator Co., McKinney; Burroughs Mill
& Elevator Co., Fort Worth; Morton Milling
Co., Dallas; and the Simmons-Newsome Grocery Co., Dallas.
He is in close relationship with the industrial
and commercial life of the Southwest and
especially with cotton and grain, which are large
products in that section.

108

FEDERAL RESERVE BULLETIN.

MARCH 1, .1916.

Amount of clearings and transfers, Federal Reserve Banks,
GOLD SETTLEMENT FUND.
from Jan. 1, 1916.
Total clearings and transfers through the
gold settlement fund from January 1 to FebTotal
Balances.
Transfers.
clearings.
ruary 24, 1916, amounted to $387,591,000,
and the net change in ownership of the gold Previously reported
$133,168,000 $14,218,000
$7,001,000
held in the fund increased during the period Settlement of—
Jan. 27,1916
54,646,000
5,961,000
350,000
Feb. 3,1916
46,004,000
4,114,000
1,000,000
from $85,697,000 to $96,638,000, or $10,941,000,
Feb. 10,1916
48,211,000
6,838,000
2,264,000
Feb. 17,1916
42,985,000
5,665,000
1,256,000
this increase being 2.82 per cent of the obligaFeb. 24,1916
50,224,000
4,996,000
382,000
tions settled during the period. The total
Total
12,253,000
375,238,000 41,792,000
clearings and transfers since May 20, 1915,
have been $1,440,240,000, arid the total net
change in ownership of gold has been 6.71 per
cent of this amount.
Changes in ownership of gold.

Federal Reserve
Bank of—
Decrease.

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

Balance to
credit Dec. 31,
Balance
1915, plus net Feb. 24,1916.
deposits of gold
since that date.

Increase.

85,697,000

$5,435,000
5,968,000

9,852,000
6,955,000
6,254,000
11,478,000
10,950,000
85,697,000

76,510,000

76,510,000

15,747,000

1

Decrease.

Increase.

$3,344,000
5,749,000
6,289,000
11,713,000
10,675,000
5,736,000
10,769,000
2,621,000
4,049,000
2,075,000
9,501,000
3/989,000

"*9,"245*666'
8,112,000
10,765,000
11,037,000

4,414,000

Decrease.

$8,779,000
11,717,000
2,595,000
10,892,000
9,685,000
3,597,000
11,356,000
5,072,000
5,355,000
334,000
8/848,000
1-1,720,000

$1,049,000
$81,283,000

Total change from May 20,
1915, to Feb. 24,1916.

From Jan. 1,1916, to Feb. 24,1916.

To Dec. 31,1915.

Increase.

$4,386,000
87,251.000
$3,694,000
821,000
990,000
2,139,000

587,000
2,451,000
1,306,000

$12,939,000
8,933,000
11,755,000
13,176,000
5,001,000

1,741,000
653,000
5,709,000
15,747,000

96,638,000

7,l,666
5,649,000
7,995,000
12,131,000
16,659,000
96,638,000

Withdrawals have exceeded balance and deposits.

Gold settlement fund—Summary of transactions Jan. 20,1916, to Feb. 24, 1916.
•

Federal Reserve
Bank of—

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chics, £?o
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total




Balance
last statement, Jan.
20,1916.

Gold.
Withdrawn.

Deposited.

$1,000,000
$1,270,000
10,326,000
1,500,000
5,513,000
130,000
11,892,000 ***§34O,"666"
280,000
11,934,000
500,000
220,000
3,360,000
11,859,000
4,766,000
3,641,000
3,114,000
25o,"666"
8,967,000
10,000
7,588,000 2,820,000
84,230,000

3,920,000

3,130,000

Transfers.
Debit.

Credit.

Settlement of Jan. 27,1916.
Net debits.

Total
debits.

Total
credits.

Jan. 27,
1916, balance in
Net credits. fund after
clearing.

$6,839,000 $6,446,000
14,172,000 15,192,000 $1,020,000
7,689,000 3,676,000
999,000
847,000
7,179,000 6,073,000
2,922,000 3,226,000
3O4,"666"
7,547,000 9,840,000 2,293,000
5,353,000 6,119,000
766,000
441,000
144,000
297,000
1,035,000 1,466,000
431,000
309,000
689,000
380,000
161,000
928,000
767,000

$393,000

4,013,000
152,000
1,106,000
$350,000
$350,000
350,000

350,000

5,961,000

54,646,000

54,646,000

5,961,000

$1,877,000
11,346,000
3,000,000
11,530,000
10,608,000
3,884,000
14,152,000
5,882,000
3,344,000
3,295,000
8,987,000
5,535,000
83,440,000

109

FEDERAL RESERVE BULLETIN.

MARCH 1,1916.

,
.
Gold settlement fund—Summary of transactions Jan. 20 1916, to Feb. 20, 1916—Continued.
Federal Reserve
Bank of—

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

Federal Reserve
Bank of—

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

Federal Reserve
Bank of—

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

Federal Reserve
Bank of—

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




•
Balance
last statement, Jan.
27, 1916.

$1.877,000
11,346,000
3,000,000
11,530,000
10,608,000
3,884,000
14,152,000
5,882,000
3,344,000
3,295,000
8,987,000
5,535,000
83,440,000

Balance
last statement, Feb.
3, 1916.

Withdrawn.

Deposited.

1,000,000

$740,000
60,000

1,330,000

1,860,000

Withdrawn.

83,970,000

1,980,000

Deposited.

1,000,000

1,000,000

$500,000

200,000

2,280,000

Deposited.

2,160,000

$1,753,000
8,505,000
2,971,000
11,498,000
11.149,000
5,949,000
11,951,000
2,566,000
4,023,000
4,089,000
9,230,000
6,496,000

2,000,000
10,000
3,000,000

80,180,000

5,800,000

Deposited.

474,000
588,000
263,000

$2,022,000
13,664,000
1,766,000
11,696,000
12,078,000
3,600,000
12,467,000
3,842,000
4,133,000
3,769,000
9,075,000
5,858,000

46,004,000

4,114,000

83,970,000

$1,386,000
4,764,000

$5,880,000
16,059,000
6,131,000
849,000
5,838,000
1,708,000
6,330,000
3,975,000
107,000
883,000
375,000
76,000
48,211,000

102,000
131,000
412,000
43,000

64,000
2,264,000

6,838,000

Debit.

Credit.
$86,000
970,000

$620,000
86,000

Net debits.

Total
debits.

Total
credits.

$469,000
3,429,000

$6,056,000
14,820,000
5,551,000
724,000
6,020,000
1,448,000
3,923,000
3,433,000
145,000
597,000
216,000
52,000

$5,587,000
11,391,000
6,881,000
1,048,000
5,184,000
2,231,000
4,538,000
2,569,000
78,000
704,000
407,000
2,367,000

42,985,000

1,256,000

Debit.

Credit.

5,665,000

Net debits.
$409,000
3,138,000

253,666

1,182,000
14,000
$382,000
382,000

382,000

84,270,000

Feb.17,1916
balance in
fund after
Net credits. clearing.

107,000
191,000
2,315,000

$1,753,000
8,505,000
2,971,000
11,498,000
11,149,000
5,949,000
11,951,000
2,566,000
4,023,000
4,089,000
9,230,000
6,496,000

5,665,000

80,180,000

$1,330,000
324,000
783,000
615,000

Settlement of Feb. 24, 1916.

90,000
40,000

6,838,000

377,000
2,092,000

42,985,000

864,000
67,000

550,000
1,256,000

13,000
578,000
303,000

$1,136,000
10,964,000
6,641,000
11,794,000
12,635,000
5,692,000
10,136,000
3,430,000
4,090,000
3,982,000
9,589,000
4,181,000

$3,475,000

Settlement of Feb. 17,1916.

836,000
200,000

Total
credits.

Feb.10,1916,
balance in
fund after
Net credits. clearing.

48,211,000

200,000

2,264,000

196,000
1,030,000

$4,494,000
11,295,000
9,606,000
747,000
6,215,000
3,800,000
6,199,000
3,563,000
64,000
896,000
953,000
379,000

$382,000

2,130,000

$145,000
1,418,000

Net debits.

$2,000,000

$790,000

$5,575,000
13,641,000
5,707,000
680,000
8,279,000
2,094,000
4,456,000
2,841,000
139,000
1,387,000
873,000
332,000

Credit.

Transfers.

Gold.

$5,430,000
12,223,000
6,941,000
484,000
7,249,000
2,438,000
5,741,000
3,881,000
350,000
913,000
285,000
69,000

Settlement of Feb. 10,1916.

Transfers.

Gold.

Withdrawn.

4,114,000

Total
credits.

Total
debits.

$2,200,000

6,250,000

344,000
1,285,000
1,040,000
211,000

180,000

?--.-.

Withdrawn.

$1,234,000

Total
debits.

"$2,*O64,"666"

Debit.

Feb. 3,1916,
balance in
fund after
Net credits. clearing.

46,004,000

Net debits.

566,666

1,400,000

$1,136,000
$1,000,000
10,964,000
6,641,000 *$5,"666*666"
11,794,000
12,635,000 """756*666" """166*666"
5,692,000
500,000
60,000
10,136,000
1,000,000
3,430,000
4,090,000
3,982,000
9,589,000
4,181,000

Balance
last statement, Feb.
17,1916.

""$566," 666' """166," 666"

Transfers.

Gold.

$1,980,000

84,270,000

Credit.

1,000,000
60,000

$2,022,000
13,664,000
1,766,000
11,696,000
12,078,000
3,600 000
12,467,000
3,842,000
4,133,000
3,769,000
9,075,000
5,858,000

Balance
last statement, Feb.
10,1916.

Debit.

$900,000
$30,000
300,000

Settlement of Feb. 3,1916.

Transfers.

Gold.

4,996,000

Total
debits.

Total
credits.

$6,960,000 $6,551,000
15,403,000 12,265,000
7,436,000
4,118,000
1,456,000 1,581,000
5,703,000 6,019,000
1,851,000
2,104,000
8,316,000 7,134,000
4,950,000
4,895,000
183,000
157,000
787,000
801,000
909,000
246,000
558,000
65,000
50,224,000

50,224,000

Feb.24,1916,
balance in
fund after
Net credits. clearing.

663,000
493,000

$3,344,000
5,749,000
6,289,000
11,713,000
10,675,000
5,736,000
10,769,000
2,621,000
4,049,000
2,075,000
9,501,000
3,989,000

4,996,000

76,510,000

$3,318,000
125,000
316,000
55,000
26,000

110

FEDERAL RESERVE BULLETIN,

M A R C H 1?

1016.

Federal Reserve Agents- fund—Summary of transactions Jan. 20, 1916, to Feb. 24, 1916.
| J a n . 20,1916.;
Balance.

\ Withdrawn.

Deposited.

§5,000,000
S, 860,000
13,700,000
4,200,000
5,000,000
4,000,000
7,000,000
1,900,000
- -~~ —

!
'
!
,
!
!..;
i

Week ending Feb. 3,1916.

Week ending Tan. 27,1916.

Federal Reserve Agent at—

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

|
i
;
i
|
'

:

8500,000
500,000

8,310,000 :

San Francisco.
Total....

58,030,000 i
Week ending Feb. 10,1910. I

1,000,000

|

Withdrawn.

Balance.

84,500,000
S, 360,000
13,700,000
4,200,000
5,000,000
4,000,000
7,000,000
1,900,000
*2,820,000 ! 11,130,000
2,820,000 ,

Deposited, j Balance.
84,500,000
8,660,000
12,990,000
4,260,000
4,560,000
2,350,000
6,500,000
1,900,000
11,070,000

$300,000
§710,000
1,650,000 i
500,000 I
60,000 !.
3,300,000 |

59,850,000

Week ending F e b . 17,1916.

300,000 |

56,790,000

Week ending F e b . 24,1916.

Federal Reserve Agent at—
Withdrawn.
Philadelphia
Richmond
Atlanta
Chicago
St. Louis

Balance.

8400,000

710,000 i
290,000 \

§4,100,000 j
8,660,000 j
12,990,000 |
4,260,000
4,560,000
2,350,000
6,500,000
1,190,000
10,780,000

1,400,000 i

55,390,000 |

j

Minneapolis
Kansas City
Dallas
San Francisco
Total.

Withdrawn.

i
•I

Deposited.

$40,000

§500,000

40.000

500,000 !

Balance.

(Withdrawn.

$4,100,000
8,660,000
13,450,000
4,260,000
4,560,000
2,350,000
6,500,000
1,190,000
10,780,000 !..

Deposited.

Balance,

500,000
20,000

550,000

55,$50,000 j

100,000
630.000
45OJ00O
760,000
540,000
350,000
500,000
190,000
780,000
55.300,000

DISCOUNT RATES.
Discount rates of each Federal Reserve Bank in effect Feb. 24, 1916.

Maturities Maturities Maturities
of over 10 of over 30 of over 60

Agrieul-

Trade acceptances.

live-stock
to 30 days, to C days, to 90 days, paper over To 60 d a y s , Over 60 t o
O
inclusive. inclusive. inclusive.
90 d a y s ,
90 days.
inclusive.
inclusive.

Boston
New York.

Philadelphia
Cleveland.
Richmond

Atlanta
Atlanta (New Orleans branch)
Chicago
St. Louis
Minneapolis
Kansas City
Dallas.. .
San Francisco
1
2

3
3
3-1,-

3'

34
3

314"
4
4
4
4
4
4
4
4
4
3?.-

4
4

i

5
5

f5

i
\
4
4
4
4
4
4

1

4- -

4"
41
4
4

4?.-

ry

5
5
5

n

modity
paper.

3
31
3~

3
3"
4

13

3?/

4
31

13
3

2 3-2-4"

»3J

3 3i

3J

Zh
3T

3~

3
3
3
3

31

Rate for commodity paper maturing within 90 days.
Rate for trade acceptances bought in open market without member bank indorsement.
3 A rate of 2 to 4 per pent for bills with or without member bank indorsement has been authorized.
4 Rate for commodity paper maturing within 30 days, 3A per cent; over 30 to 60 days, 4 per cent; over 60 to 90 days, 4.1 per cent; over 90 days.
5 per cent.




Ill

FEDERAL RESERVE BULLETIN.

MARCH 1, 1916.

INFORMAL RULINGS OF THE BOARD.
Below are reproduced letters sent out from
time to time over the signatures of the officers
of the Federal Reserve Board which contain
information believed to be of general interest to
Federal Reserve Banks and member banks of
the system:
Trade Acceptances.

The Federal Reserve Board is in receipt of a
letter, copy of which is herewith inclosed,
suggesting as a temporary modification of Regulation T that the statement required under
paragraph V, in regard to bills indorsed by
banks and bankers, in certain cases, be considered as applying to- the. banks or bankers,
rather than To the drawers and acceptors of
bills.
After due consideration the Board expects
to meet this request, and when reissuing the
regulations for the year 1916 intends to make
the corresponding change. Pending that, you
are authorized to buy such bills of exchange
drawn in foreign countries on American
acceptors, provided, however, that where it
may prove impossible to secure information
from the acceptor or drawer, it will be necessary that a satisfactory statement from the
indorsing bank or banker should be previously
obtained covering the financial condition of
said indorsing bank or banker. Such bills
may be taken at rates within 7 the range fixed
from time to time for bankers acceptances.
JANUARY 21,

A considerable volume of trade
acceptances is coming forward from the Orient,
drawn by sellers of goods in the Orient upon
well-known importing and manufacturing concerns in the United States. These are purchased in the Orient by the branches of leading
banking institutions and other similar banks
and bankers. The branches of these banks in
the United States receive the bills from the
Orient, have them accepted, and then sell them
in the open market with their indorsement.
Such bills sell at a rate equal to or approximating closely the rate for bankers' acceptances.
Regulation'T provides that " before purchasing domestic bills of exchange, the Federal
DEAR SIRS:




JANUARY 13,

1916.

1916.
[Inclosure.]

28520—16

Reserve Bank must secure statements concerning the condition and standing of the drawer of
the paper, and, if possible, also of the acceptor
of the bill, sufficient to satisfy the bank as to
the nature and quality of the paper to be purchased."
In the case of bills of the kind I have described it would be manifestly impossible for us
to secure statements of the drawer and we feel
that it would be impracticable lor the present,
at least, to obtain statements from the acceptors, since they have no interest in what becomes of the bill. Yet it seems to us of importance that we should be able to buy such
drafts when indorsed by responsible banks or
bankers (from whom we could obtain satisfactory statements of conditions).
Possibly in the forthcoming regulation in
cases where such bills are indorsed by banks
or bankers and are sold on their credit, the
statement required might be that of the bank
or banker. We are anxious, however, to make
progress in the matter promptly, and I am
writing to inquire whether it would not be possible for the Board to advise Federal Reserve
Banks, as a temporary modification of Regulation T, that the statement required under paragraph V, in regard to bills indorsed by banks
or bankers, might be considered as applying
to the banks or bankers, rather than to the
drawers and acceptors of bills.

3

Rates for Domestic Acceptances.

In reply to your letter of January 24 inquiring whether your rate on bankers' acceptances
includes domestic acceptances, I am instructed
to say that the Board considers domestic acceptances to be included.
JANUARY 27,

1916.

Eetarn of Federal Keserve Note's.

By direction of the Federal Reserve Board,
you are advised that it is the intent of the
Board to add to Regulation O the following
amendment:
" Whenever any Federal Reserve Bank receives the notes of any other Federal Reserve
Bank it shall promptly return them for redemp-

112

FEDERAL RESERVE BULLETIN".

tion to the issuing bank, all charges incident to
the return of such notes to be borne by the
issuing bank."
Pending the issuance of revised regulations
on this subject, you are authorized to act in
accordance with the amendment thus indicated.
JANUARY 28,

1916.

Loans on Bills Payable.

I have your letter of January 27. Under section 5202, Revised Statutes, a national bank
may not borrow as bills payable an amount in
excess of its capital stock. Under the Federal
Reserve Act, however, it may rediscount actual items of paper in its possession to any
amount that the Federal Reserve Bank of its
district is willing.
JANUARY 29,

1916.

Direct Discounts.

Your letter of January 28 is received, and in
reply you are informed that Federal Reserve
Banks can not discount commodity paper
directly for mercantile firms. This paper must
come to the banks through and bearing the
indorsement of member banks.
FEBRUARY 1,1916.
Drafts Purchased in Open Market.

MARCH 1,

1916.

acceptance. The bill was accepted by the
bank and not by the land company, which
appeared on the bill merely as an indorser. It
was therefore not eligible for purchase by you
as a trade acceptance under Regulation P,
series of 1915, which requires a bill to be accepted by the company, firm, corporation, or
person upon whom it is drawn. It is suggested,
therefore, that you make arrangements with
the parties in question to have the bill drawn
in such form as will conform to the regulations
of the Board.
If it is desired that the acceptance be made
by the bank, the land company should make
arrangements with such bank in advance and
the bill should be drawn on that bank and not
on the land company. The bank as drawee
could then properly make an acceptance eligible for purchase as a banker's acceptance. If
the company drawing the draft desires the
credit of the land company, in addition to that
of the bank, they should arrange to have such
company sign as indorser.
FEBRUARY 1,

1915.

Cattle Paper.

I beg to acknowledge receipt of your letter of
February 9, inquiring in substance whether or
not a note issued by a farmer, the proceeds of
which are to be used for the purchase of cows,
would be eligible within the regulation of the
Board.
In connection with the question you state
you ''must assume that these cows will be used
as dairy cattle which will be retained for a considerable length of time to produce milk, butter, cheese, etc., and that the loan is not made,
strictly speaking, for the /breeding, raising, fattening, and marketing of live stock.' "
Replying to this question the Board instructs
me to state that as the Act defines agricultural
paper as "notes, drafts, and bills drawn or
issued for agricultural purposes or based on
live stock," and as there is no doubt that "live
stock" includes cows, it would appear, therefore, that, unless for banking reasons concerning which the Federal Reserve Board must
exercise its own discretion, there would not be
any objection to the notes mentioned by you.
FEBRUARY 15,1916.

I wish to acknowledge receipt of your letter
of January 25, inclosing a copy of a draft drawn
by a certain company and purchased by you
in the open market as a banker's acceptance.
You are advised that this draft does not come
within the definition of a banker's acceptance
as set forth in paragraph I, Regulation S,
series of 1915. It is accepted by the bank
and not by the land company which is the
drawee. Under the requirements -of the regulations of the Board, a draft to be eligible as
an acceptance must be accepted by the drawee
and not by anyone else. You are advised,
therefore, that the paper in question is not a
banker's acceptance within the meaning of the
regulations of the Board and is not eligible for
purchase as such by you.
It is ineligible for purchase as a trade acceptance for the same reason. The fact that the Advisory Council.
land company has stamped the bill a trade
In answer to your letter of February 9 I beg
acceptance and has signed such statement as to say that the question you raise has been
"acceptor" does not in itself make it a trade considered by the Federal Reserve Board. It




MARCH 1,

is the opinion of the Board that Advisory Council members should sit with boards of directors
of Federal Reserve Banks only at the invitation of the latter, and not as a matter of
course. In some cases it may be desirable to
have the local member of the Advisory Council
attend a board meeting for consultation or
report, but this is believed to be the exception
rather than the rule.
FEBRUARY 16,

1916.

Cotton Loan Paper.

Your letter of January 24 has been under
advisement by the Federal Reserve Board, and
this letter is written in accordance with the
instructions of the Board. In your letter
you say:
"A cotton broker who is a depositor of the
bank desires to finance cotton for various
mills. He finances the same by giving to the
bank his note secured by the warehouse receipt
of the mill indorsed in Blank, for cotton stored
in his name and properly insured, but sold to
the mill for a specific amount to be paid at a
specific time, as per sales note attached. Sample copies of the above papers are inclosed.
"The money is deposited to the credit of the
broker, who in turn, we understand, charges
the mill interest on the same, and the loan is
paid by the broker only when he receives
notice from the mill that the mill desires to use
and pay for the cotton. Would such loans
taken from one broker in excess of the 10 per
cent of the capital and the surplus of the bank
be an excess loan under the Federal Reserve
Act, if the financing for each individual mill
and the accepted sales note held of said mill
were not in excess of said 10 per cent?"
Referring to this point, counsel of the Board
says:
" I t will be observed that the transaction in
form is merely a discount of single name negotiable paper secured by so many bales of cotton. The fact that the maker of the note has
entered into an agreement with a mill to sell
the collateral at a future date, does not alter




113

FEDERAL RESERVE BULLETIN.

1916.

the form of the transaction. There is no
privity of contract as between the bank or the
holder of the note and the mill. Should the
mill refuse to purchase the cotton under the
agreement referred to, the bank might, if the
broker assigned his contract, possibly be subrogated to the rights of the broker and might,
in this case, sue the mill for damages arising
out of the breach of contract, but if the bank
has this right, it merely enhances the value
of the collateral and does not affect the form
of the transaction. Such notes would, therefore, in the opinion of this office, clearly come
within the provisions of section 5200 of the
Revised Statutes, -and no national or member
bank could discount an aggregate amount of
more than 10 per cent of its capital and surplus
without violating the provisions of this section.
"The language of section 13 of the Federal
Reserve Act is still more comprehensive, and
no Federal Reserve Bank could, in the opinion
of this office, rediscount such notes bearing the
name of one broker for an aggregate amount
in excess of 10 per cent of the capital and
surplus of the member bank without violating
the provisions of section 13 of the Federal
Reserve Act.
"A different situation would result if the
broker should draw a bill of exchange on the
mill accompanied by the necessary documents
and the mill should accept this bill of exchange*
In such case, if the bank discounted it, it would
hold the direct obligation of the mill as
acceptor; would have the security of the
broker's obligation as drawer of the bill, and
would also nave the security of the cotton
pledged as collateral. In this form the transaction would come within the proviso of section
5200 of the Revised Statutes, which excepts
from its operation 'the discount of bills of exchange drawn in good faith against actually
existing values.'"
The matter has been submitted to the Comptroller of the Currency, who states that he fully
concurs in the view expressed by counsel as set
forth above.
FEBRUARY 9,

1916.

114

FEDERAL RESERVE BULLETIN.

MARCH 1,

1916.

LAW DEPARTMENT.
The following opinions of counsel have been in detail and under appropriate heads, the reauthorized for publication by the Board since sources and liabilities of the association. It
the last edition of the Bulletin:
would seem, therefore, that if the form of
Reports of Condition of State Banks and Trust Companies. report prescribed by any of the State authorities shows under appropriate heads the reThe Comptroller of the. Currency may, under the provisions of the Federal Reserve Act, accept from member sources and liabilities of State banks and trust
State banks and trust companies the form of report of con- companies which are members of the Federal
dition prescribed by the State authorities, provided such Reserve System, when such form has been
report exhibits the resources and liabilities of such banks approved and adopted by the Comptroller,
or trust companies under appropriate heads.
section 5211, Revised Statutes, will have been
JANUARY 29, 1916.
complied with.
SIR: The following questions have been reSection 5211 further provides that—
ferred to this office for an opinion:
The Comptroller shall also have power to- call
(1) Can the Comptroller of the Currency, for special reports from any particular assounder the provisions of the Federal Reserve ciation whenever in his judgment the same are
Act, accept reports of condition of State banks necessary to a full and complete knowledge of
and trust companies on forms prescribed by its condition.
the State authorities ?
This section gives the Comptroller the right
(2) Can the Comptroller of the.Currency auto call for additional information from any parthorize State banks and trust companies making reports of conditions to fill out only the ticular bank and precludes the assumption that
first page of form used by national banks and all reports must be in the same form.
exempt them from furnishing all or any part of
Since State banks and trust companies are
the details called for on subsequent pages of not limited by law to the same class and charsuch form ?
acter of investments as national banks, their
Section 9 of the Federal Reserve Act, which resources and liabilities may differ in some
relates to State banks as members of the Fed- particulars from the resources and liabilities of
eral Reserve System, requires such banks to national banks, and there is nothing in the Act
comply with the provisions of sections 5211 and to indicate that the form of report used by
5212, Revised Statutes.
such State banks and trust companies should
Section 5211 requires each national bank to be identical with the form used by national
make not less than five reports during each banks.
year on a form to be prescribed by the CompIn answer to the specific questions submitted,
troller. This section provides in part that— this office is of the opinion that the Comptroller
Each such report shall exhibit, in detail and may adopt the form prescribed by State authorunder appropriate heads, the resources and lia- ities if, in his opinion, it exhibits the resources
bilities of the association at the close of business
and liabilities under proper heads, or he may
on any past day by him specified.
adopt so much of the form used by national
Section 5212 provides that—
banks as he considers appropriate and necesIn addition to the reports required by the pre- sary, and may prescribe this as the form to
ceding section, each association shall report to
Comptroller of the Currency, within ten days be used by State banks and trust companies
after declaring any dividend, the amount of which become members of the Federal Reserve
such dividend, and the amount of net earnings System.
in excess of such dividend.
Respectfully,
M. C. ELLIOTT, Counsel.
It will be observed that the form of the
To Hon. C. S. HAMLIN,
report is left to the Comptroller, the statute
Governor Federal Reserve Board.
merely providing that such report shall exhibit,




MARCH 1,

1916.

FEDERAL BESEBVE BULLETIN.

Deposits of Unfit Currency.
Any Federal Beserve Bank may properly refuse to accept deposits of unfit currency which are offered to it for
the purpose of imposing on it the expense of shipment to
Washington for redemption.
JANUARY?31, 1916.

SIE: The attached letter raises the question
whether a Federal Reserve Bank may charge
a member bank for the expense involved in
shipping to Washington unfit United States currency which such member bank has deposited
with the Federal Reserve Bank.
The Federal Reserve Act provides in section 13 that—
Any Federal Reserve Bank may receive
from any of its member banks and from the
United States, deposits of current funds in lawful money, national-bank notes, Federal Reserve notes, etc.
The word "may," as used in the Federa*
Reserve Act, has generally been construed to
confer a privilege rather than to impose an
obligation, and Congress all through the Act
has made a clear distinction between that word
and "shall." It seems, therefore, that a Federal Reserve Bank is not required under all circumstances to accept for deposit currency
offered to it, regardless of the purpose for
which the deposit is being made.
Section 4 provides that the board of directors
of each Federal Reserve Bank-—
Shall administer the affairs of said bank
fairly and impartially and without discrimination in favor of or against any member bank or
banks, and shall, subject to the provisions'^ of
law and the orders of the Federal Reserve
Board, extend to each member bank such discounts, advancements, and accommodations as
may be safely and reasonably made with due
regard for the claims and demands of other
member banks.
Under the provisions of this section no
Federal Reserve Bank could legitimately discriminate against any particular member bank,
nor could it, without reason, refuse to extend
to one member bank privileges which it offers
to others,,
It seems clear, however, that any Federal Reserve Bank may refuse to accept deposits of




115

currency from any member, bank in a case
where such member bank accumulates unfit
currency and offers it for deposit for the purpose of imposing on the Federal Reserve
Bank the expense of shipment to Washington
for redemption. Such a refusal is not such a
discrimination as is prohibited by section 4.
It is also evident that any Federal Reserve
Bank may, if it accepts such deposits, charge
the depositing bank for the expense involved
in shipping to Washington, provided that it has
given previous notice that such a charge would
be made.
Nothing in this memorandum should be construed to apply to Federal Reserve notes,
which are by law made redeemable " a t any
Federal Reserve Bank.77
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. C. S. HAMLIN,

Governor Federal Reserve Board.
Pennsylvania Escheat Law.
The act of June 7, 1915, of the Pennsylvania State
Legislature, providing for the escheat to the State of all
deposits which have not been increased or decreased for
a period of 14 years, does not apply to such deposits in
national banks.
JANUARY 27, 1916.

SIR: On June 7, 1915, the Pennsylvania
State Legislature passed an act which provides
in part as follows:
Be it enacted, etc., That every person, bank,
safe deposit company, trust company and
corporation, organized or doing business under
the laws of this Commonwealth, except mutual
saving-fund societies not having a capital
stock represented by shares, which receives or
has received deposits of moneys, shall make a
report to the auditor general, under oath, in
the month of January of each year hereafter,
of such deposits of money which shall have not
been increased or decreased, or, if not increased
or decreased, on which interest shall not have
been credited in the pass book, at the request
of the depositor, within fourteen or more consecutive years next preceding the first day of
said month.
It will be observed that under the terms of
this act all banks organized or doing business

116

FEDERAL EESERVE BULLETIN.

under the laws of the State of Pennsylvania
will be required to make a report to the auditor
general, under oath, during this month of all
deposits of money which have not been inincreased or decreased within the preceding
14 or more consecutive years. A severe penalty is prescribed by the act for failure to
make this report.
The deputy attorney general of Pennsylvania has given an opinion to the auditor
general that this statute applies to national
as well as State banks. Some of the national
banks have asked for a ruling of the Federal
Reserve Board on this question and the matter
has been submitted to this office for an opinion.
Before discussing the legal questions involved
it seems proper to call to the attention of the
Board the fact that this being a State statute
no ruling of the Board would protect a national
bank refusing to make this report from incurring the penalty prescribed if a court% of
competent jurisdiction should subsequently
find that the statute legally applies to national
banks. The Board should, therefore, not
undertake to rule officially that national banks
need not make this report, but for reasons
hereinafter set forth it is respectfully suggested
that the Board recommend to national banks
in the State of Pennsylvania that the return be
made under protest. The deposits in question
will not be immediately escheated to the State
in any event, and it is assumed that the question
will be submitted to the courts for determination.
The question under consideration is not
whether the State of Pennsylvania may constitutionally pass an act providing for the
escheat to the State of unclaimed deposits or
debts of national banks but whether the act
of June 7, 1915, was intended to apply, and
does apply, to national banks as well as State
banks. The title of this act provides in part
as follows:
Providing for the escheat of deposits of
money or property of another received for
storage or safe-keeping; the dividends, profits,
debts, and interest on debts of corporations,
companies, banks, trust companies, insurance




MARCH 1,

1916.

companies, limited partnerships, and partnership associations, organized under the laws of
this Commonwealth.
This title clearly indicates an intention on
the part of the legislature to limit this act to
banks organized under the laws of Pennsylvania.
The constitution of the State of Pennsylvania as amended in 1864 provides (section 3,
article 3) that—
No bill, except general appropriation bills,
shall be passed containing more than one subject which shall be clearly expressed in its
title.
It is true that the Pennsylvania courts have,
in construing this provision of the constitution, said that it was not intended to mean
that "the title should be a full index of the
law/ 7 and the courts have accordingly sustained certain* provisions which were more or
less incidental to the subject set forth in the
title. (See Commonwealth v. Green, 58 Pa.
State, 222-233; Yeager and German v. Weaver?
64 Pa. State, 425-428.)
It can hardly be contended, however, that
the subject of banks organized under the laws
of Pennsylvania can be said to include national
banks as incidental to this subject, nor is the
language of the act itself indicative of an intention on the part of the legislature to include
national banks. It is true that the act is made
applicable to banks organized or doing business
under the laws of the Commonwealth. National
banks, however, are organized under the laws
of the United States and exercise all of their
corporate powers under authority of the laws
of the United States. The fact that they are
doing "Business within the geographical limits of
a State does not alter the fact that they are
doing business under the laws of the United
States and not under the laws of the State.
The deputy attorney general, in support of
his opinion that this act applies to national
banks, quotes from the case of the First National Bank v. Kentucky, 9 Wall., 353, as follows:
The salary of a Federal officer may not be
taxed; he may be exempted from any personal

MARCH 1,1916.

FEDERAL RESERVE BULLETIN".

service which interferes with the discharge of
his official duties, because those exemptions are
essential to enable him to perform those duties.
But he is subject to all the laws of the State
which affect his family or social relations or his
property, and he is liable to punishment for
crime, though that punishment be imprisonment or death. So of the banks. They are
subject to the laws of the State, and are governed in their daily course of business far more
by the laws of the State than of the Nation.
All their contracts are governed and construed
by State laws. Their acquisition and transfer
oi property, their right to collect their debts,
and their liability to be sued for debts, are all
based on State law. It is only when the State
law incapacitates the banks from discharging
their duties to the Government that it becomes
unconstitutional.
It is true that national banks enter into contractual relations with others and that such
contracts are subject to some extent to the
laws of the State in which they are made. The
question under consideration, however, is not
whether State laws can be made to apply to
debts due by national banks, but merely
whether the language used in the act under consideration indicates a clear intention on the
part of the Pennsylvania Legislature to make
the provisions of the act applicable to national
banks.
The deputy attorney general in his opinion
says:
It has been suggested that this language does
not include national banks. I do riot think the
suggestionjfis tenable. National banks are not
organized under the laws of the Commonwealth
and are not doing business under the laws of
the Commonwealth, in so far as the right to do
business is concerned, but in a broader sense
they are doing business under the laws of the
Commonwealth.
With all due deference it is respectfully submitted that the conclusion reached by the attorney general, namely, that national banks are
doing business in a sense which makes the act
under consideration applicable, is not sustained
by the authorities.
The case cited by the attorney general arose
in Kentucky and the question involved was the
right of the State to tax the shares of stock of a
national bank. Section 5219 of the Revised




117

Statutes specifically provides that such stock
may be taxed as the personal property of the
owner or holder. The court merely sustained
the right of the State to tax the stock as the
personal property of the owner.
The question now under consideration,
namely, whether the language used in the
statute may reasonably be said to apply to national banks, has been considered and determined by the Supreme Court of Pennsylvania
on more than one occasion.
In the case of Commonwealth ex rel Torrey
v. Ketner (92 Pa. St. 372-376), the language of
the act under consideration was much broader
in its terms than the act of June 7, 1915. In
the Torrey case the act prescribed and punished
the offense of embezzlement by any person
" being an officer, director, or member of any
bank or other body corporate or public company." In considering this act and its several
amendments, the court said, on page 375:
We are spared further comment upon these
acts for the reason that they have no application to national banks. Neither of them refers
to national banks in terms, and we must presume, that when the legislature used the words
"any bank" that it referred to banks created
under and by virtue of the laws of Pennsylvania. The national banks are the creatures of
another sovereignty.
The case of Commonwealth ex rel Torrey v.
Ketner, supra, was affirmed in Allen's Appeal,
119 Pa. St., 192* In the case of Allen's Appeal
a Pennsylvania statute provided:
If any cashier of any bank in this commonwealth shall engage directly or indirectly in the
purchase or sale of stock, or in any other profession, occupation, or calling other than that
of his duty as cashier, he shall be guilty of a
misdemeanor. * * *
e
The court held that the act did not apply to
cashiers of national banks.
In the case of Commonwealth v. T. & P.
Railroad Company, 98 Pa. St., 90, it was contended that the language "foreign corporation" as used in a revenue act, included national banks. The court after holding that
such banks were not foreign corporations in
the ordinary sense, said in reply to the argu-

118

FEDERAL RESERVE BULLETIN.

ment that this language was intended by the
legislature to include national banks, that—
This might be so if there was anything in the
act itself indicative of an intent to use the word
in that sense; but there is not. On the contrary, in the 5th section, which imposes a tax on
limited partnerships, etc., they are described as
"partnerships organized under or pursuant to
the laws of this State, or of any other State or
Territory, or of the United States, or under the
laws of any foreign State, Kingdom, or Government"; thus clearly showing that when the
legislature intended to tax associations created
by the General Government they used apt words
oi description for that purpose.
Applying this rule to the present case it may
be reasonably assumed that had the Legislature
of Pennsylvania intended to make the provissions of the act of June 7, 1915, applicable to
national banks it would, as the court expressed
it, have "used apt words of description for that
purpose."
In the opinion of this office this act was not
intended to apply, and does not apply, to national banks. It is, therefore, unnecessary to
consider the question of whether or not the
Pennsylvania Legislature had the constitutional right to make this act applicable to national banks.
As above stated, it is respectfully suggested
that the Federal Reserve Board recommend to
those national banks in Pennsylvania which
have asked for a ruling on this question that the
report called for be made to the auditor general
under protest, accompanied by the statement
that it is made out of deference to the opinion of
the deputy attorney general and without any
admission of liability on the part of such banks.
Respectfully,
M. C. ELLIOTT, Counsel.
# To

Hon. C. S. HAMLIN,

Governor Federal Reserve Board.
Savings and Loan Associations.
A savings and loan association is a bank within the
meaning of that part of section 8 of the Clayton Act which
relates to interlocking bank directorates.
FEBRUARY

3,

1916.

SIR: The attached letter raises the question
whether a savings and loan association is a




MARCH 1,1916.

bank within the meaning of that part of
section 8 of the Clayton Act which provides
that:
No private banker or person who is a director
in any bank or trust company, organized and
operating under the laws of a State, having
deposits, capital, surplus, and undivided profits
rgregating more than $5,000,000, shall be
eligible to be a director in any bank or banking
association organized or operating under the
laws of the United States.
It has generally been understood by this
office that savings and loan associations are
banks within the purview of this section.
Although it is true that Congress did not
undertake to define the word "bank" in the
Clayton Act, nevertheless, common usuage as
well as other acts of Congress have given it a
signification sufficiently broad to include such
associations.
The American and English Encyclopaedie,
volume 3, page 790, states that—
Banks are of three kinds: Banks of deposit,
banks of discount, and banks of circulation;
and comprise national, State, savings, and
private banks, and, in a popular sense, loan and
trust companies.
The Century Dictionary defines a bank as—
An institution for receiving and lending
money. The banking institutions of the United
States may be classed as national and State
banks, savings banks, private banks or bankers,
and loan and trust companies.
It is a well accepted rule of statutory construction that the ordinary and popular meaning shall be given to words used by the legislature unless a contrary intent is clearly indicated
or unless such a construction would be obviously absurd. Dwarris on Statutes, 573;
Selden v. Equitable Trust Co. (94 U. S. 419,
421). There is nothing in the purpose or context of the Clayton Act to deprive the word
"bank" of its usual significance.
It may also be noted that both section 3407,
United States Revised Statutes, and section 3 '
of the Act of Congress approved October 22,
1914, entitled "An Act to increase internal revenue and for other purposes," in defining the

MARCH 1,1916.

FEDERAL RESERVE BULLETIN.

word "bank" or "banker/ 7 provide that every
person, firm, or company and every incorporated or other bank " having a place of business
where credits are opened by the deposit or
collection of money or currency, subject to be
paid or remitted upon draft, check, or order,
or where money is advanced or loaned on
stocks, bonds, bullion, bills of exchange, or
promissory notes, or where stocks, bonds, bullion, bills of exchange, or promissory notes are
received for discount or for sale," shall be
regarded as a bank or as a banker within the
meaning of those acts.
It is obvious, therefore, that a savings and
loan association is a bank not only in the ordinary acceptation of the word but also as
defined by Congress itself in other statutes
relating to banks and bankers, and any person
who is a director of any such association, which
has resources aggregating more than $5,000,000
will, under the provisions of section 8 of the
Clayton Act, become ineligible to serve at the
same time as a director of any national bank
on October 15, 1916.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. C. S. HAMLIN,

Governor Federal Reserve Board.

Liquidation ©f a Member Bank.
A vote of more than two-thirds of the stockholders of
a national bank ratifying a sale of its assets to another
corporation is not a vote to go into liquidation as required
by the Revised Statutes of the United States. A Federal
Reserve Bank can not, under those facts, cancel the
shares of its stock held by such member bank, nor can it
refund to the member bank the amount of its cash-paid
subscriptions to such stock.
JANUARY 20,

1916.

SIR: The attached papers raise the question whether a vote of two-thirds of the stockholders of a national bank ratifying the action
of its board of directors in selling all of its
assets to another national bank is equivalent
to a vote to go into liquidation as required by
the Eevised Statutes, and whether under such
facts a Federal Reserve Bank can refund to




28520—16

119

such national bank the amount of its cash-paid
subscriptions to the capital stock of such
Federal Reserve Bank.
Section 5220 of the Revised Statutes provides that—
Any association may go into liquidation
and be closed by the vote of its shareholders
owning two-thirds of its stock.
Section 5221 provides that—
Whenever a vote is taken to go into liquidation it shall be the duty of the board of directors
to provide a certificate to that effect to the
Comptroller, and to publish notice in certain
newspapers for a period of two months notifying the holders of its notes and other creditors
to present the notes and other claims against
the association for payment.
The law is very specific in its requirement
that no national bank may be liquidated until
it passes this resolution to go into liquidation.
The national bank in question has not only
not passed that resolution, but declines to do
so on the ground that the resolution ratifying
the sale of its assets is sufficient.
That is an erroneous assumption, because it
is possible for a corporation to continue in
existence as such, even though all its assets be
sold to another corporation, and there have been
many cases in which national banks, after the
sale of their assets, have been revived and
recommenced a regular banking business.
It seems, therefore, that though this national
bank has sold its assets to another national
bank, nevertheless it is legally a corporation,
though not doing any business, and as such it
is legally possible for it to start business again
at any time it sees fit. That being the fact, it
can not reasonably be said to be nonexistent.
Under the circumstances the Federal Reserve
Bank would have no authority to cancel its
shares of stock held by the bank in question or
to refund its cash-paid subscriptions until it
has been liquidated in the manner required
by law.
Respectfully,
M. 0. ELLIOTT, Counsel*
To Hon. 0. S. HAMLIN,

Governor Federal Reserve Board.

120

FEDERAL RESERVE BULLETIN.

MARCH 1, 1916.

to make them in the first instance to the owner
of the property.
Any national bank may, under the provisions of section
The question is also submitted whether or
24 of the Federal Eeserve Act, purchase or discount loans
secured by improved and unincumbered farm land as not a statement signed by the officer of the
well as make such loans in the first instance.
bank, as of the date of the purchase or discount of a farm loan already made, would be
F E B R U A R Y 10,
1916.
SIR: This office has been requested to give considered as a compliance with regulation 1.
an opinion on the question whether or not This regulation provides that—
"A statement signed by the officer making
national banks can, under the provisions of
section 24 of the Federal Reserve Act, pur- the loan and having knowledge of the facts
which it is
must be attached to
chase and discount loans already made that upon note secured based, first mortgage on imeach
by a
are secured by improved and unincumbered proved farm land, certifying in detail as of the
farm land, provided said loans meet all of the date of the loan that all of the requirements
have been duly observed."
requirements of section 24.
Section 24 provides in part that—
In answer to the specific question submitted, it seems clear that where a bank pur"Any national banking association not situated in a central reserve city may make loans chases or discounts a farm loan, and one of its
secured by improved and unincumbered farm officers certifies as of the date of such purland, situated within its Federal Reserve chase or discount that the requirements of law
District.''
have been complied with, this certificate would
It will be observed that the statute does not constitute a substantial compliance with reguprovide that loans must be made to the lation 1 since the date of purchase or discount
owner of the farm land but that such loans is, in effect, the date that the loan is made by
may be made upon the security of farm land. the purchasing bank on the security of the
If, therefore, the loan complies with the other farm land in question.
conditions and limitations of the section a naRespectfully,
tional bank would, in the opinion of this ofM. C. ELLIOTT, Counsel.
fice, be authorized and empowered to purchase
To Hon. CHARLES S. HAMLLNT,
or discount such loans already made as well as
Governor Federal Reserve Board.

Purchase and Discount of Loans Secured by Farm Land.




121

FEDERAL RESERVE BULLETIN.

MARCH 1,1916.

STATEMENTS FOR THE PRESS.

National Government which might produce a
tendency to legislate downward as to banking
standards, or create conditions of uncertainty
rather than safety for the mere purpose of
making one system more attractive from the
profit-making standpoint than the other.
As stated above, the interest of both is the
same; that is, to stand for the highest possible
banking standards, and to promote the greatest
possible degree of safety and banking efficiency.

In answer to inquiries received from national
banks in Pennsylvania, the Federal Reserve
Board makes the following announcement:
The act of June 15, 1915, passed by the Pennsylvania ^Legislature, which provides for the
escheat to the State of certain unclaimed deposits held by banks was, in the opinion oi its
counsel, not intended to apply and does not
apply to national banks. In deference to the
FEBRUARY 5, 1916.
opinion of the deputy attorney general of
Pennsylvania, however, the Board has recomIntradistrict Clearing System.
mended to such banks that the report which
is required to be made to the auditor general
Additions to and withdrawals from the sysunder the terms of this act be made under pro- tem since the publication of the lists in pretest and without admission of any obligation vious issues of the Bulletin are as follows:
on the part of national banks to make such
DISTRICT No. 3.
report.
Withdrawals:
JANUARY 28,

1916.

The Board, from the beginning, has taken
the attitude that it does not desire to interfere
in any way with matters of State legislation or
State organization. What the Board is trying
to bring about is the cooperation between national and States banks on a fair and equitable
basis, and the Board regrets, therefore, that
there should be felt in any State a disposition
to create further cleavage between these banks
such as would result from a plan for breaking
up the bankers7 association of such State into
two separate organizations, one for the national
banks and one for State banks. It appears to
the Board that a common ground for both
groups of banks should be sought rather than
ground for separation.
The States, as such, do not give up any of
their privileges with respect to their banks by
encouraging these banks to join the Federal
Reserve System, and the Board has gone to the
limit of its powers in keeping intact the powers
of State banks which may join the system.
The States have the same interest as the
National Government in the maintenance of
high banking standards. It is to be hoped
that wise counsel will prevail, the conviction
gradually asserting itself that there should be
no feeling of competition between State and




Abington National Bank, Glarks Summit, Pa.
Manufacturers National Bank, Philadelphia, Pa.
National Bank of the Northern Liberties, Philadelphia, Pa.
• DISTRICT No. 4.

Withdrawals:
Second National Bank, Toledo, Ohio.
First National Bank, Baltimore, Ohio.
DISTRICT No. 6.

Addition:
First National Bank, Woodbury, Tenn.
Withdrawal:
Manufacturers National Bank, Harriman, Tenn.
DISTRICT No. 7.

Additions:
Farmers National Bank, Knoxville, 111.
Rockford National Bank, Rockford, 111.
Withdrawals:
Citizens German National Bank, Hammond, Ind.
First National Bank, Kirklin, Ind.
Merchants National Bank, La Fayette, Ind.
DISTRICT NO. 8.

Additions:
Peoples National Bank, Harrison, Ark.
First National Bank, Wynne, Ark.
Withdrawal:
Citizens National Bank, Bowling Green, Ky.
DISTRICT NO. 11.

Withdrawals:
Farmers and Merchants National Bank, Achille, Okla,
First National Bank, Glen Rose, Tex.
DISTRICT NO. 12.

Withdrawal:
National Bank of Coalinga, Coalinga, Cal.

122

FEDERAL RESERVE BULLETIN.

Fiduciary Powers.
Applications from the following banks for
permission to act under section 11 (k) of the
Federal Reserve Act have been approved since
the issue of the December Bulletin, as follows:
DISTRICT No.

2.

Trustee, executor, administrator, and registrar of stocks
and bonds;:
First National Bank, Bound Brook, N. J.
DISTRICT No.

3.

Trustee, executor, administrator, and registrar of stocks
and bonds:
First National Bank, Patton, Pa.
First National Bank, Seaford, Del.
Nazareth National Bank, Nazareth, Pa.
DISTRICT No.

4.

Kegistrar of stocks and bonds:
Commercial National Bank, Columbus, Ohio.
DISTRICT No.

6.

Trustee, executor, administrator, and registrar of stocks
and bonds:
Broadway National Bank, Nashville, Tenn.
DISTRICT No.

Cost of Bank Examinations,
A good many questions have been asked as
to the cost of examination of banks under
the old system prior to the Federal Reserve
Act and under the new system. Under the
old system the cost of examination varied
somewhat in different sections of the country,
but a very large section of the country was
embodied under one general rule, in which
section the cost of examination varied in
central reserve and reserve cities on the one
hand and country-bank districts on the other.
The maximum charge for examination in
country-banks districts was $75.
Under the new system, described in section 21 of the Federal Reserve Act, nationalbank examiners were put on a salary basis
instead of a fee basis, and a charge for examination stipulated in the Act was required to
"be assessed by the Comptroller of the Currency upon the banks examined in proportion
to assets or resources held by the banks upon
the dates of examination of the various banks."
The subjoined table, therefore, shows in
parallel columns the cost of examination
before the Federal Reserve Act and since.

7.

Trustee, executor, administrator, and registrar of stocks
and bonds:
First National Exchange Bank, Port Huron, Mich.
Michigan National Bank, St. Clair Heights, Mich.
First National Bank, South Bend, Ind.
DISTRICT No.

MARCH 1, 1916.

Size of
bank
Size of "bank expressed expressed
in capital stock.
in total
resources.

New sys- Before
tem.
act.

Old system.

8.
(2) [Less than 8100,000..

Trustee, executor, and administrator:
Bedford National Bank, Bedford, Ind.
DISTRICT NO. 10.

Trustee, executor, administrator, and registrar of stocks
and bonds:
Farmers National Bank, Goodland, Kans.
Drovers National Bank, Kansas City, Mo.
DISTRICT NO. 11.

Trustee, executor, administrator, and registrar of stocks
and bonds:
First National Bank, Shreveport, La.

(3)1
f

(4)kl00,000 and under J
(5)f

wooo

Banks in central
reserve and
Country banks.
reserve cities.

1
I

$50,000
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000

$50.50
51.00
52.00
53.00
54.00
55.00
56.00
57.00
58.00
59.00

(6) $300,000 and under
1,000,000 70.00
$400,000
(7) $400,000 and under
1,500,000 75.00
$500,000
(8) $500,000 and under
2,000,000 100.00
$600,000
(9) $600,000 and under
$750,000
3,000,000 110.00
(10) $750,000 and under
$1,000,000
5,000,000 150.00
(11) $1,000,000
1,500,000 195.00
(12) $2,000,000
10,000,000 230.00
(13)15,000,000
25,000,000 410.00
(14) $10,000,000
50,000,000 710.00

After
act.

Before
act.

J2&00 $20.00
26.50 20.00
28.50 20.00
30.50 20.00
32.50 20.00
34.50 20.00
36.50 25.00
38.50 25.00
40.50 25.00
42.50 25.00

After
act.
$26.00
26.50
28.50
30.50
32.50
34.50
36.50
38.50
40.50
42.50

44.50

35.00

44.50

54.50

40.00

54.50

64.50

50.00

64.50

84.50

75.00

84.50

124.50
174.50
224.50
524.50
1,024.50

75.00
75.00
75.00
75.00
75.00

124.50
174.50
224.50
524.50
1,024.50

State Bank Admitted.
The Peoples Bank of Sumter, S. C, was adRegistrar of stocks and bonds:
mitted to the Federal Reserve System during
Capital National Bank, Sacramento, Cal.
Trustee, executor, administrator, and registrar of stocks the month of February, the number of State
institutions which have now joined the system
and bonds:
being 33.
First National Bank, Eugene, Oreg.




DISTRICT NO. 12.

MARCH 1,1916.




FEDERAL RESERVE BULLETIN.

Total paid-in capital and reserve deposits of Federal Reserve Banks as
of January 28,1916. (Paid-in capital and reserve deposits, $479,556,000. >

Total paid-in capital of Federal Reserve Banks .as of January 28, 1916.
(Paid-in capital, $54,892,000.)

128

124

FEDERAL BESEBVE BULLETIN.

GENERAL BUSINESS CONDITIONS.
General business and banking conditions are
described in reports made by Federal Reserve
Agents for the 12 Federal Reserve Districts, as
of approximately February 21, substantially as
follows:
DISTRICT NO. 1.—BOSTON.

Activity in general trade has continued
throughout the month, and in practically every
line exceptionally good business is reported.
Uncertainty as to the effect of any change in
the European situation has a restraining influence against undue expansion. Manufacturers and wholesalers everywhere are keeping
their business well in hand. Disturbing factors
in some lines are the increasing cost of raw
material and the unrest of labor. The latter
is beginning to be felt in some of the mill
centers. In New Bedford, although the mills
have made some advances in wages recently,
the operatives are not satisfied and strike
agitation continues.
The money market continues dull, with rates
fully as low as last month, but these rates do
not reflect the condition of the majority of the
banks in this district. Prevailing money rates
in New York and Chicago are strong influences
toward keeping rates in this district down.
Call money, 3 per cent; commercial paper, 2\
to 3 per cent for short dates, 3 to 4 per cent for
six months, and 4 to 41 per cent for a year;
town notes, 2 to 21 per cent for six months, 2J
to 3 per cent for longer periods; bankers' acceptances, 90 days, 2 per cent upward.
Loans and discounts of the Boston Clearing
House banks show an increase of $9,788,000
over last month, and demand deposits have
increased $12,817,000 during the same time.
The amount "Due to other banks" on February
12 was $130,373,000, an increase of $2,365,000
during the last month. The excess reserve of
these banks has increased from $43,329,000 on
January 15, 1916, to $53,865,000 on February
12, 1916. This increase was practically all in
three banks. For the most part, the other




MARCH 1,

1916.

banks' reserves were somewhat reduced during
this period.
Exchanges of the Boston Clearing House for
the week ending February 12, 1916, were
$189,306,940, as compared with $136,621,441
the corresponding week last year and $197,134,000 for the week ending January 15, 1916.
The country banks are large borrowers
from the city banks, the December 31, 1915,
call of the Comptroller of the Currency showing a decided increase in such borrowing over
the November 10, 1915, call, and the largest
for the year 1915.
Building and engineering operations in New
England from January 1 to February 16,1916,
were $17,767,000, the largest with one exception for over 15 years and an increase of
$3,048,000 over the average for the same
period in the last 7 years.
Exports at the port of Boston for January,
1916, were $8,322,467, a decrease,of $2,951,781,
as compared with January, 1915, and an increase of $2,707,988 over the corresponding
month of 1914. Imports at the port of Boston
during January, 1916, were $22,258,716, an
increase of $13,092,755 over the same month
last year and an increase of $7,480,617 over
January, 1914.
Receipts of the Boston Post Office for January, 1916, show an increase of $47,299.23, or
about 9 per cent, over January, 1915. The first
15 days of February, 1916, show an increase
over the same period last year of $57,209.49,
or about 19 per cent.
The Boston & Maine Railroad and the New
York, New Haven & Hartford Railroad show
an increase in "net after taxes/ 7 for the six
months ending January 1, 1916, of $2,217,252
and $3,441,619, respectively, over the corresponding period of 1915.
There were 191 failures with liabilities of
$1,645,500 in this district during January, 1916,
as compared with 246 failures with liabilities of
$2,639,700 during the same month last year.
Business in boots and shoes continues good;
factories are running at full capacity and manufacturers are well sold up. There seems to be

MARCH 1,1916.

FEDERAL RESERVE BULLETIN.

no speculation in anticipation of higher prices,
although retailers are carrying somewhat larger
stocks than for some time past.
The woolen and worsted mills are prosperous
and have all the business they can handle. It
is even reported that some mills will have difficulty in filling orders already taken.
The cotton mills are well sold up and many
are running overtime in some departments.
There is a large demand for fine and fancy
goods for late spring and summer delivery.
The demand for coarser grades is not so strong,
and some of this business is going to southern
mills at lower prices than the New England
mills care to make. The labor troubles in
New Bedford are tending to make manufacturers cautious about extending too far ahead
and are to some extent restricting advance orders. There is no relief in sight for the dyestuffs shortage, and this is hampering the activities of the mills manufacturing goods requiring
dyes.
The demand for bonds in this district is not
as good as last month, and savings banks are
scrutinizing their purchases more closely. Several new issues have been oversubscribed, but
in spite of this there is a feeling that there is not
so much money seeking investment as a month
or two ago.
DISTRICT NO. 2—NEW YORK.

A recent compilation of the Industrial Commission shows record industrial activity in
New York State. There are more products,
and workers, and wages paid than ever before.
The greatest increases in production were shown
by concerns manufacturing automobiles, tools,
firearms, and by rolling mills.
Buyers of general merchandise are visiting this market earlier in the season and in
greater numbers than usual. In view of the
growing scarcity of raw materials and the
heavy volume of orders, some houses anticipate
a shortage in merchandise stocks. Retail trade
continued good in January despite some unseasonable weather. Collections are generally satisfactory.




125

Garment making and allied industries operate
more factories and employ more labor than any
other industrial group in this district. A strike
of the Waist and Dress Makers' Union, involving
about 50,000 employees, began February 9
over wages, hours, and other questions. Arbitrators effected partial settlements that caused
most of the members to return to work within
a week, and an early full settlement is expected.
Steel and metal industries are operating at
capacity, with heavy demands continuing.
Activity in shoe factories is necessitating steady
production at the tanneries, and leather prices
are firm.
The real estate situation in New York City
is improving, more confidence being displayed
in mortgages, buying, and renting.
The New York Clearing House banks on
February 11, 1916, reported aggregate loans,
etc., $3,327,547,000; deposits, $3,570,041,000,
and excess reserves, $168,822,950. These figures show increases since January 1 as follows:
Loans,etc.,$69,941,000; deposits, $103,321,000;
excess reserves, $22,871,820.
Other statistics for January, 1916, compared
with January, 1915, are the following: Exchanges through the New York Clearing House,
$12,326,802,227, an increase of $5,039,109,694,
Transactions on the New York Stock Exchange,
par value of bonds sold $113,129,000, an increase of $56,271,500. On January 19 Govern*
ment 2 per cent bonds sold at par for the first
time since July, 1913. An issue of New York
State 4 per cent Barge Canal bonds for
$25,000,000 was made at 103.27. Announce^
ment has been made of the purchase by New
York bankers of Argentine Government notes
for $18,500,000 maturing February 21, 1917.
Number of shares of stock sold, 15,901,215, an
increase of 10,873,202. This market continues
to absorb a substantial volume of American
securities from abroad.
New incorporations in the Eastern States of
companies capitalized at $1,000,000 or over,
$270,995,000, an increase of $219,845,000.
New York St&te failures, 300, with liabilities
$7,692,700, a decrease of 103 in number but an

126

FEDERAL RESERVE BULLETIN.

increase of $615,103 in liabilities. New York
City building permits, $10,972,645, a decrease
of $1,116,620. Building operations are increasing at several places in this district.
In January call money rates were: High 2\
per cent, low \\ per cent, and the ruling rate
for renewals If per cent. Time loans on collateral for 60 days to 4 months were quoted
from 2\ to Z\ per cent, and for longer periods
3 to 4 per cent. Rates on bankers' acceptances
remained unchanged at 2 to 2f per cent. Commercial paper sold at 2 | to 3J per cent, with
prime names easily marketable at 3 per cent.
The closing rate for demand sterling on January 3 was 4.73f. A firm market at higher
rates continued throughout the month. The
quotation on January 31 was 4.76J. Paris
checks declined from 5.85J to 5.88J. German
exchange receded from 76 to 74. Guilders
strengthened from 43.37 to 45.12 and declined
to 42.75 at the end of the month.
DISTRICT NO. 3—PHILADELPHIA.

All reports received indicate favorable conditions in practically all lines of business, and
during the month general business showed a
steady and substantial increase throughout
this district. An idea of conditions may be
had from the following reports received: Wilmington, large orders coming in and prospects
continue good. Camden, general conditions,
fully up to normal and some large industries
unusually behind in deliveries. Millville, all
plants running full capacity and have lots of
unfilled orders. Trenton, all lines moving along
very satisfactorily; outlook good and most factories have orders to keep them busy for sometime to come. Allentown, some industries
working overtime; outlook good. Altoona,
business conditions show steady improvement
and wholesale and jobbing interests are busy;
shortage of materials in railroad shops chief
handicap. Bradford, all lines continue to improve. Chambersburg, all business on very
profitable basis. Agricultural prospects never
better. Chester, almost every line working
full. Hazleton, silk and textile mills working




MARCH 1,

1916.

to capacity. Huntingdon, business in every
line excellent. Lancaster, all industrial plants
seem to be running at full capacity. Norristown, great activity among manufacturers;
some factories running overtime and ail night;
unrest among mechanics. Pottsville, industries only limited by lack of labor. Reading,
business of all kinds active and profitable.
Scranton, conditions more favorable than formerly; less unemployed. Steelton, increasing
business along all lines; steel never better.
Wilkes-Barre, general conditions improved and
outlook good if coal strike can be averted, as
expected. Williamsport, industries working
full time and outlook encouraging. York,
factories well filled with orders at good prices;
payments good and outlook excellent.
There seems to be a general shortage of
merchandise in all parts of the district.
Prices of most commodities are rising and supplies are scarce. Labor is hard to obtain and
wages are high. The lack of suitable dyestuffs continues to be a matter of concern to all
who are dependent upon them. Raw materials
in nearly all lines of manufacture are advancing
in price.
Many new plants in various lines are being
erected, and there is less talk of the uncertain
character of the present industrial activity.
Many concerns are sold ahead for months to
come, and conditions are improving in the
matter of railroad embargoes.
Steel mills are mot showing keen interest in
the matter of booking new business. Prices
are firm, with an upward tendency. The railroads are buying liberally and the shipyards
are having the greatest activity in their
history. Nearly all yards have sufficient work
on hand to last for two years or more. Most of
the ships are either for the American merchant
marine, the United States Navy, or for large
American corporations.
Wool is scarce and high, and the strong
demand tends to increase prices, which have
reached the highest point in 50 years. Marking time is the general order of business in the
cotton yarn market, and buyers are inclined to

MARCH 1,1916.

wait until present high prices recede. The
export trade in cotton goods is growing and
woolen and cotton mills are working to
capacity.
The silk industry continues to gain momentum, and prices of artificial silks have advanced.
In hosiery and underwear, orders are in excess
of mill capacity, and prices are advancing.
Scarcity of raw materials and lack of dyes and
bleaches make deliveries uncertain. The manufacturers of knit goods are working to
capacity.
Carpet and rug manufacturers are busy, and
the outlook for continued prosperity is conceded to be good. Finished goods are quoted
on an " a t value 7 ' basis; that is, they are subject to quotations in force on the date of
delivery. Recently, 20 carpet mills in Philadelphia granted wage increases, ranging from
10 to 12 per cent, the hands affected numbering about 1,500 men.
Conditions in the glass industry are good.
New furnaces are being built, and prices are
rising for both raw materials and finished
products. Drugs and chemicals are also seeking higher levels, and concerns engaged in the
manufacture of chemicals are reporting unprecedented earnings.
Glazed-kid prices are rising with the demand
and goatskins and finishing materials are scarce*
The sole-leather supply is short. Shoe manufacturers are doing a highly satisfactory business, the best for many months.
The Trenton potteries have sufficient orders
to keep them running for some time. Their
present prosperity is due to the revival of business and building operations.
The scarcity of raw materials, especially
bleaching and dyeing supplies, forces paper
manufacturers to go slow on taking orders for
late delivery. Mills are swamped with orders
and the export business, especially to South
America, is increasing.
Lumber has improved greatly and the demand is strong. Many grades are $3 and $4
per thousand feet higher to-day than a year
ago, and it is believed that the activity in lum-




127

FEDEKAL RESERVE BULLETIN.

ber is going to continue. Builders are looking
forward to a good year.
Coal-mining operations have been affected
during the past month by the weather and car
shortage. Prices have receded somewhat from
the high point of the previous month. Anthracite collieries are working to full capacity.
The oil business is in a prosperous condition.
The price of crude petroleum is increasing, and
unless the supply of crude oil is increased there
will be a considerable advance in prices of refined products.
The railroads are still carrying very heavy
traffic. Embargoes have been renewed on certain classes of freight. Railroad shops are
busy, many having enough work on hand to
keep them employed well into 1917.
Labor conditions are satisfactory. There is
an abundance of work, and increases in wages
are being announced. Occasionally, there is
some unrest and strikes for increased pay.
Money is abundant, and there is no immediate prospect of a hardening in rates. Commercial paper is scarce, and the little that is
offered is quickly absorbed at rates so low as to
be almost prohibitive from the bankers' standpoint. Clearings of Philadelphia banks for the
first 10 business days in February of this year
amounted to $403,862,859, compared with
$260,150,038 for the corresponding period last
year.
The following figures are taken from the
statements of members of the Philadelphia
Clearing House:
Date.

Loans.

Deposits.

Feb. 11,1916.. $481,708,000 $512,300,000
512,637,000
Jan. 8,1916... 472,705,000
391,365,000
Feb. 13.1915.. 395,604,000

Reserves.
1109,242,000
115,972,000
85,162,000

Excess
reserves.
$36,498,000
43,544,000
28,824,000

DISTRICT NO. 4—CLEVELAND.

Noteworthy features in the trade situation
in this district for the last month are a general
advance in wages and a shortage of common
labor. The latter phase of the. situation in
several industries is regarded as critical. The

128

FEDERAL RESERVE BULLETIN.

high levels of business activity reported for
January are being maintained.
General conditions in the steel trade are, if
possible, stronger than at any time since the
demand began. New output, present and contemplated, which is of large volume, has all
been taken up. The trend in prices is steadily
upward. No such prices have obtained since
the early eighties. The pig iron market is dull
but strong.
Shipment of coke from the Connellsville
region continues uncertain. The production in
the upper and lower Connellsville regions for
the week ending February 12 was 441,309 tons
as against 433,182 tons for the week previous
and compared with 442,616 tons for the last
week in January.
Conditions in the coal trade have changed
but little since last month's report. The inability of the railroads to place cars upon the
sidings of the coal companies has had a tendency to restrict output and to stiffen prices.
It should be understood that the present
situation in the coal market is not a norpial one,
as numerous concerns are stocking coal in fear
of a suspension, at least during the month of
April.
Extensive additions to manufacturing plants
are being made or arranged.
Collections are, generally speaking, quite
good, one large company reporting more customers discounting than ever before. The
usual seasonal slump in certain mercantile lines
has occurred, but the volume continues greater
than it was last year at this time.
Money conditions are unchanged. Funds are
plentiful at low rates. A spirited demand for
investment funds has developed, and considerable dealings in previously inactive issues of
industrial and public-service securities are
recorded.
Farmers are making active preparations for
an increased acreage of corn. More activity
in farm lands than for two or three years is
reported. Numerous farms are changing hands
at an increase of from 10 to 15 per cent over
values of last year or year before.




MARCH 1, 1916.

Clearing figures in the 6 large cities of this
district for the first 15 business days in February are given below:
February,
1916.
Cleveland
Cincinnati
Columbus.
Pittsburgh
Toledo
Youngstown
Total

February,
1915.

Increase.

Per cent
of increase.

$53,379,954 130,038,197
60,192,800 15,249,000
13,336,400 3,698,300
121,825,450 34,629,726
14,597,683 5,284,351
2,782,240 1,079,022

56.2
25.3
27.7
28.4
36.2
38.7

356,093,123 266,114,527 89,978,596

33.8

$83,418,151
75,441,800
17,034,700
156,455,176
19,882,034
3,861,262

The approximate figures in commercial failures in this district are $1,442,951 for January,
1916, as compared with $2,224,240 for January,
1915.
Building permits as reported by the six
large cities of the district numbered 1,929 for
January, against 1,601 for the same month
last year. The valuation of $3,272,369 is an
increase of 20 per cent over January of last
year.
Post-office receipts for the same cities show
a larger percentage of increase for January
than for December, but not so large in total.
The percentage of increase over last year is
15.6 per cent. Totals in January were $1,117,071.61, January, 1915, $966,472.79, December,
1915, $1,357,018.47.
There has been considerable movement of
tobacco from the burley section and large
sales, also shipments of same to the various
manufacturing centers, and liquidation of loans
in the tobacco districts.
DISTRICT NO. 5—RICHMOND.
With railroad earnings reported good, the
organization and construction of several new
short lines reported from North Carolina, the
apparently healthful increased activities in
manufactures, reasonable liquidation of debts,
and new credits rendered available, the general
business condition of this district is good.
On account of the rather open winter, farmers are reported well advanced in soil preparation. The indications are that the cotton

MARCH 1,

1916.

FEDERAL BESEEVE BULLETIN.

acreage will be slightly increased, though the
diversification idea will not be dropped, and
most farmers will endeavor to raise the bulk
of their provisions on the farm. High prices
and the scarcity of potash fertilizer will again
seriously curtail the use of fertilizers, though
the expenditure for these materials will be
greater than last year.
The apple crop of West Virginia, a part of
which is under normal conditions, shipped
abroad, has found domestic markets, with a
lowering of prices. This crop has brought
little, if any, profit to growers.
Lumber has advanced sharply, in some cases
$7 to $8 per 1,000 feet, with a broadening
domestic market. Orders for future delivery
are more freely offered to than accepted by
manufacturers. Dry stocks are not large, and
in some quarters confidence in the early resumption of foreign shipments tends toward
the expectation of a strong market for several
months to come.
The furniture manufacturers of North Carolina are reported doing a very large business,
with receipts of heavy orders for future delivery at good prices.
Cotton has been moving more freely, and the
disposition to hold for higher prices is not so
strong as 60 days ago. A number of small
mills are expanding, and some new cotton-oil
mills are organizing. The cotton mills of the
Carolina's are reported to be in better general
condition than for some time past.
Coal production shows large tonnage with
satisfactory sales, both in volume and price.
Grain movements show little improvement
over last month, and shippers are still suffering because of terminal congestion and lack of
ocean transportation.
Collections are generally good. Member
banks are borrowing a little less both from the
Federal Reserve Bank and their northern correspondent banks. Their cash reserves are
generaUy higher, a condition which may reasonably be expected to continue until the usual
spring planting calls for loans.




129

DISTRICT NO. 6—ATLANTA.

Although February is normally a quiet
month in this district, there appeared to be
very little lessening in the business activity of
the past few months. There is practically no
change in the cotton situation. The general
tendency in the tobacco market is for better
prices with the prospect of planting a larger
crop than in 1915. There is no inclination,
apparently, to sell cotton, and the high price of
fertilizers indicates that a smaller acreage will
be planted.
The steel and iron interests in the Birmingham district continue operating at full capacity,
with day and night shifts. At Gadsden, Ala.,
the Gulf States Steel Co. are erecting a large
by-product plant, to cost, approximately,
$750,000. At Anniston, Ala., the Anniston
Ordnance Co. have started operations with
orders sufficient to keep the plant running for
a year.
Lumber exports to Mobile and other points
show a considerable gain, with prices a shade
higher, but no material change is noted in the
retail lumber business. No variation is noted
in the naval-stores situation, the trade awaiting
proper shipping facilities.
The Alabama Great Southern Eailroad has
let contracts on the double tracking of its line
from Chattanooga to Birmingham.
General conditions in and around New
Orleans have shown very little change during
the past 30 days. Money is plentiful and is
offered at low rates. January imports show
an increase of $2,000,000, as compared to the
same month last year. The monthly report
issued through the office of collector of the
port shows the value of exports from New
Orleans to be $18,190,570, compared to
$23,133,666 last year. Exports included cotton valued at $6,424,902, wheat valued at
$3,285,982, flour valued at $1,287,118, leaf
tobacco to the value of $181,110. Cotton,
wheat, and flour show a decrease while tobacco shows an increase of 935,917 pounds
over corresponding month last year.

180

FEDERAL RESERVE BULLETIN.

In the section surrounding Jackson, Miss.,
conditions are reported to be better than for
many years, due to decrease in cotton
acreage and increase in grain and foodstuff.
More attention has been paid to live stock,
and there has been a decided improvement
both in number and character of cattle found
in this territory.
Vicksburg reports better conditions than for
years, notwithstanding their cotton crop was
largely damaged by the bollweevil.
The yellow-pine district around Lumberton,
Miss., reports an advance in the price of yellow-pine lumber and the by-products.
Most of the sawmills in the Lumberton and
Gulfport, Miss., sections which have been idle
for the past year have resumed operations.
The mills in this section usually cut for the export trade but in view of the demoralization of
shipping and the high ocean freight rates, the
mills are now cutting for interior trade.
There is a good demand for car-building material at satisfactory prices.
DISTRICT NO. 7—CHICAGO.

Scarcity of certain basic raw materials and
the resultant high prices are receiving the earnest attention of the manufacturing industries
dependent upon these materials. The demand
for steel continues in excess of the mill capacity
and this is delaying, to some extent, construction and building which otherwise would now
be under way. Building statistics show increases over the corresponding month last year
and activity throughout the year is anticipated
by a number of authorities. While the cement
companies can hardly expect to run their plants
full this year, due to the excess of producing
capacity above any consuming ability which
has heretofore been developed, nevertheless an
increase in building will benefit their sales.
The agricultural-implement business is dependent upon the grain acreage and the prosperity of the farming communities. Reports
at hand show a decreased acreage of wheat for
1916, but an increased purchasing power among
the farming classes which may offset this unfavorable comment. Authorities in this line




MARCH 1,

1918.

look forward to a normal business. Increased
cost of the finished product may necessitate
higher prices to the consumer. Some of the
large companies believe that higher prices will
cause decreased sales, although a maintenance
of the present high prices for grain may to a
certain extent enable the farmer to absorb the
usual amount of farm implements.
The automobile industry maintains its record
pace with factories at capacity and increasing
their production. The raw material situation
is again commented on, and also the lack of
shipping facilities, but the sale of cars through
this territory will unquestionably exceed by a
large margin last year's figures. The distillers
report a substantial demand. Whisky has
shown an improvement both in price and in
demand. Brewing interests report a decrease
in sales.
The dry goods situation has not changed
perceptibly in the past month. The wholesalers still enjoy considerable activity, to some
extent based upon purchases in anticipation
of an increase in price. This may result in
decreased sales later, particularly if the retailer id overbuying, of which there is some
evidence. The scarcity in dyestuffs is becoming more acute, and the wool situation is very
strong.
Woolen mills are reported busy and prosperous, with advancing prices. There is a
slight falling off in the furniture line. The
market values of northern lumber show a
tendency to become firmer, and other woods
also are in stronger demand. There has been
a seasonal recession in the piano business
recently. Grain has been moving rather slowly
from the interior points owing to bad weather
and lack of equipment. The quality of wheat
is reported improved, owing to the fact that
producers marketed their poor quality first.
Corn is being brought into the local centers
throughout Illinois and parts of Iowa.
The demand for live stock continues strong
with heavy shipments of heaithy stock, prices
are well maintained, and no epidemic of importance reported. The large mail-order
houses claim a satisfactory business improve-

MARCH 1,1916.

FEDERAL KESEEVE BULLETIN.

ment with an outlook for the continuation of
reasonably good business for some time to
come. There is little change in the grocery
business. The watch business shows improvement over the same period a year ago. Leather
is commanding substantial prices, the manufacturers are working to capacity, and the shoe
manufacturers report a good demand. Leather
belting is being sold in considerable quantity
to mills and factories, particularly in machinery
and metal working lines.
Banks report substantial deposit increases
without proportionate demand for loans. The
eight central reserve city member banks in
Chicago report deposits of $652,000,000, and
loans of $426,000,000, on February 17, as
against deposits of $571,000,000 and loans of
$399,000,000, December 31, 1915. This proportionately greater increase in deposits is explained by some as the result of better collections and a more independent position of the
concerns which formerly were dependent upon
borrowed capital. Bank clearings for the first
15 days of February for the city of Chicago are
$35,000,000 less than for the first 15 days of
January, but $108,000,000 more than for the
first 15 days of February, 1915. Clearings reported by 18 cities in the district outside of
Chicago amount to $194,000,000 for the first
15 days of February, as against $201,000,000
for the first 15 days in January and $154,000,000
for-the first 15 days in February, 1915. Commercial paper brokers advise that they have
more paper outstanding now than at the same
period last year.
The general situation throughout the district shows business activity, optimism, and
satisfactory collection conditions, with the possible exception of certain sections affected by
local conditions. Transportation difficulties
and the lack of certain raw materials are the
only unfavorable features.
DISTRICT NO. 8—ST. LOUIS.

Reports from various business interests in
this district indicate a degree of prosperity
which has been unknown for several years.
The dry-goods market is firm with a marked




131

scarcity in certain, lines and with a general
tendency toward higher prices. The large
wholesale dry-goods houses in St. Louis and
other cities show important gains in shipments
this January as compared to the same period
in several previous years. One house reports
a gain in shipments of over $600,000 in January; another reports a gain of $1,250,000
since December 1. Large shoe manufacturers
also report increases, one company reporting
a gain of over $500,000 in shipments in January.
The millinery, clothing, hats, woodenware, and
hardware interests report similar gains.
A large manufacturer of roofing reports that
1915 was the biggest year in the history of the
company and expects that 1916 will again
break the record. The building interests and
allied lines show the effect of the increase in
building which has been so pronounced in the
last 60 days.
Manufacturers generally report an increase
in prices of raw materials; and there is a
scarcity in many lines. The prices of drugs
have steadily increased. One of the largest
manufacturers of envelopes in the United States
is located in this district, and this company
reports a scarcity of paper available for its
product. Quotations on some grades of paper
are made by telegraph and all prices are subject
to change without notice. There has been a
marked decrease in applications for aid from
organized charities in St. Louis. Reports indicate that the charities have had only about 75
per cent of the applications for aid this winter
as compared to the winter of 1914-15.
The live-stock situation at the National
Stock Yards, East St. Louis, 111., is quieter
than it has been for some time, as foreign governments have practically withdrawn from the
market. While there have been heavy shipments of horses and mules during the past year
from this district, figures issued by the Government show that the natural production
throughout the country has more than made
good the exports.
From figures available at this date, it appears
that the winter wheat acreage has been reduced
about 15 per cent in this district. It seems

132

FEDERAL RESERVE BULLETIN.

probable that some damage has resulted from
the succession of severe cold, sleet, and rain,
but it is too early to estimate its extent.
The number of commercial failures for January, 1916, shows a decrease as compared to
January, 1914, or January, 1915, and would
seem to reflect the present healthy condition
of business. Another interesting index to
present conditions is found in the examination
of the bank clearings in the principal cities
within this district. The gain in clearings for
January, 1916, as compared to January, 1915,
is as follows: St. Louis, 20.8 per cent; Louisville, 48.5 per cent; Memphis, 12.1 per cent;
Little Rock, 17.7 per cent; Evansville, 55.7 per
cent; Paducah, 15.9 per cent.
In January, 1915, these cities cleared a total
of approximately $466,000,000, and in January
of this year their total clearings amounted to
over $577,000,000, or
a gain of over
$111,000,000.
In spite of the marked increase in all business
activity, bank reserves are still considerably
higher than is usual at this time of the year.
There has been no change in rates to customers
or in the commercial paper rate. Bank demands for suitable investments for their surplus funds continue active and its effect on the
bond market is noticeable.
DISTRICT NO. 9—MINNEAPOLIS.
Steady cold weather until mid-February
had a retarding effect on grain shipments, rail
transportation, trade at country points, and
to a considerable extent upon the lumber industry, and upon wholesale business. Country
roads are in bad shape, due to very heavy
snow, and farmers have had difficulty in marketing. Duluth reported 36.6 inches of snowfall for January, with 39 inches at the end of
the month. The aggregate in Minneapolis-St.
Paul is 33 inches. Over the state of Minnesota
the January snowfall as a whole was the heaviest in many years. The remainder of the
district has had a similarly heavy fall, which
in the grain territory is spread evenly on the
ground and guarantees excellent moisture conditions at the opening of the planting season.




MARCH 1,

1916.

Wheat has moved slowly into the terminals
during the month, and a 5-cent break in price
checked the gradual but steady advances of
previous weeks. Elevator stocks at Minneapolis and Duluth on February 12 exceeded
the figures of a year ago for the first time, and
were 26,559,000 bushels, as against last year's
25,386,000 bushels. Crop-year receipts from
September 1 were 194,119,000 bushels as
against 127,458,000 bushels a year ago. The
milling and export demand has continued
heavy and Northwestern mills are grinding at
about the usual figures, Minneapolis requiring
approximately 1,600,000 bushels per week.
The car situation is difficult. Eastern trunk
lines have been unable to release cars previously forwarded, and the shortage of ocean
tonnage has taken a considerable car capacity
out of this territory and is holding it indefinitely. Northwestern lines are unwilling to
permit loading for points off their own lines,
and grain and flour shippers are having difficulty in obtaining cars. This situation has
been further aggravated by snow and bad
weather, which has hampered and delayed
branch-line service.
The coal situation, which during the early
part of the month threatened to become
serious at many points in the Dakotas, was
relieved by higher temperatures during the
middle of the month. Duluth has stocks of
both hard and soft coal at the docks which
are believed to be ample unless there is sustained severe cold.
Wholesale trade prospects for the spring
months are excellent. A difficulty threatened
in some lines is that of obtaining sufficient
shipments with which to supply the trade.
Price advances in some lines have had the
effect of slowing down orders awaiting further
developments. Collections have slowed up
somewhat in response to the weather conditions at country points, but continue good.
Most firms report a condition of book accounts
much more favorable than a year ago.
Money rates are easy, with little or no change.
Grain trade straight paper has been issued in
considerable amounts, prime indorsed time

MARCH 1,

1916.

FEDERAL RESERVE BULLETIN.

paper bringing 4 to 4J per cent. Some of the
strong concerns are obtaining money at 3-|
per cent flat. Very little terminal elevator
paper is on the market, but where obtainable
the rate is 3 per cent.
DISTRICT NO. 10—KANSAS CITY.
Railways are being taxed beyond capacity
and a shortage of freight cars greater than at
any time in recent years has existed, owing
largely to the greatly increased shipments of
last year's grain. It is doubtless true that
many of the cars that should be in this territory are on the eastern seaboard and also in
the Gulf States where the contents are waiting
to be transferred to foreign ports. Elevators
are generally well filled. In some places it was
necessary to declare an embargo on the shipments of grain to elevators to give time for
shipments out of them.
The weather has been unusually severe.
While the temperature has not been abnormal
for this season of the year, a combination of
rain, sleet, and snow have made conditions
somewhat extraordinary. Government reports
show the wettest January on record, the excess
in moisture extending to almost every section.
A sheet of ice of from one-half inch to 2
inches in thickness in many places has caused
fears to be entertained that the wheat may be
seriously damaged. Later reports are somewhat more encouraging. Experts say that
much of the damage will be offset by the
thorough wetting which the ground has received.
Uncertainty as to the effect on demand for
American wheat of the action of foreign
governments in concentrating the buying of
grain supplies has caused more or less nervousness in the market.
Rates of discount remain unchanged, although deposits in banks are abnormally large.
Kansas bank deposits as shown by the statement of December 31, 1915, broke all records,
there being $5,000,000 more on deposit in State
banks on that date than in June, and $16,000,000 more than in December a year ago. The
statement also shows an expansion in loans of




133

122,000,000, and all items show big gains in the
business of the State and reflect general conditions in the district. Bankers report that
business for last month was better than for any
previous similar period in years.
Prosperity and a record-breaking year are
almost unanimously predicted by the heads of
wholesale firms. Increases over 1915 for the
months of January and the first third of February range from 10 to 100 per cent, and indications that this satisfactory condition will
continue throughout the season are good.
Especially large stocks are being purchased
by dry goods and shoe dealers. Collections are
far above the average, in spite of increase in
prices.
The low price of beef cattle continues, and
the question of a packers7 combine is receiving
much discussion. Packers report that they
want good beeves and are willing to pay the
price for the best in the market, but that Europe
is not buying the average grades from the
United States, these orders being filled from
South America. The price of hogs has increased slowly, choice hogs averaging about
8 cents on the Kansas City market.
The hay market continues active, but prices
are below normal owing to the unusual crop
raised in the district. Range is in greater
demand than for some time past. Pasture
land has been contracted at from $8 to $9 per
head for the season, a higher price than has
ever been paid in this territory.
Unusual prosperity is reported in the oilproduction fields, although operations have
been hampered by bad weather and road conditions. Tankage stocks are very low and
practically none of the production is being
tanked, while petroleum commands the attractive figure of $1.30 a barrel.
The opinion among lumbermen is that this
section of the country is on the verge of great
activity in all branches of that industry. The
general agricultural prosperity bids fair to produce more than a normal line of business for
retail dealers, resulting in a desirable volume
for both wholesaler and manufacturer. Stocks
in retail yards are lower than normal and heavy

134

FEDERAL RESEBVE BULLETIN.

spring buying is generally expected. The
weather conditions have materially curtailed
activity in the mills and particularly is this
true of the northwest coast country. The car
shortage has been felt considerably and deliveries have slowed up as a consequence.
The metal-mining industry continues operating at high pressure with good prices.
Labor conditions are very satisfactory in the
Tenth District, although the suggestion of railway labor troubles is somewhat disquieting.
DISTRICT NO. 11.—DALLAS.

I t is estimated that the winter oat crop was
damaged from 70 to 80 per cent by the heavy
frost in January. This frost was followed by
heavy general rains. While wheat was frozen,
it is not thought that the roots of the plants
were killed. It is believed the damage to wheat
was far less than to oats. The 1916 Texas
wheat crop is estimated at 20,000,000 bushels,
which is an excess over the average crop, but
somewhat below the 1915 yield.
This damage to crops planted in the fall increases the probability of a larger cotton
acreage, estimated at an increase of 15 per cent,
unless effective steps are taken to prevent such
a course. There has been only a slight movement of cotton the past month, and probably
15 per cent of the crop is still held.
The fruit growers of eastern Texas are much
encouraged at the present prospects for a large
crop. However, so much depends on the
weather conditions that it will be some 30 days
yet before an accurate forecast can be made as
to the yield. If the weather continues cold
until the 1st of March, or a little later, thus
preventing the trees from blossoming, the crop
should be very large. The fruit industry in
the eastern section of this district has grown to
be an important one, and in the past few years
large canning plants have been established to
care for the output.
There is an active movement of vegetables
from southern Texas, although somewhat decreased from last year. Strawberries are also
arriving from that section, and reports indicate
an unusually active shipping season.




MARCH 1,1916.

Wholesalers and jobbers are beginning to receive orders for spring goods. Purchases mad©
indicate a very satisfactory business and confirm
the earlier predictions of a good spring trade.
The banking situation is little changed.
There is a slight increase in the demand for
loans, and bills discounted show a good increase over a month ago. The character of
loans offered is about the same, with quite
substantial offerings of live-stock paper. Most
of the member banks are in easy condition,
with large reserves, and it is anticipated that
their legitimate demands will be cared for without inconvenience. Borrowing will therefore
perhaps come later than is usual.
Transportation lines report a normal business for this season, with a slight increase
in both passenger and freight traffic over a
year ago.
Eetail merchants' business for the first
month and a half of the new year is better
than the average; though somewhat below
the same period a year ago. The lull in trade
which usually follows the holdiays was noticeably shorter than usual. Collections are reported good and above the average for this
season.
Conditions prevailing in Mexico have stimulated business in all lines in the western section
of the district, particularly with mercantile
houses.
Eange conditions benefited by the general
rains in January and are good. Live stock is
commanding high prices and the demand is
active at all markets.
Lumber dealers are receiving good orders
at satisfactory prices. Mills are reported as
running on full time, which indicates that
building operations are on the increase.
DXST&ICT'NO. 12—SAN FRANCISCO.

There has been relatively little change in
business conditions in the Twelfth District.
In the Northwest many mills and logging
camps were forced by severe weather to suspend operations, causing temporary cessation
in the lumber industry. This condition has
caused prices to advance $1 per thousand, with

MARCH 1,1916.

FEDERAL EESEEVE BULLETIN,

a strong demand, and lumbermen feel* much
encouraged.
In the oil fields storms have blown down
approximately 2,000 derricks—over 20 per
cent of all derricks in California. This will
considerably [curtail production for the next
30 or 60 days, but as in the lumber industry,
the damage is offset by a further increase of
5 cents in the price of crude oil.
Sheep and cattle industries are reported in
flourishing condition. The sheepmen of Idaho
predicted a severe winter and prepared accordingly, hence losses from exposurefand lackjfof
feed have been negligible. Hay is in active
demand at profitable prices.
Wheat and other grains are moving to market slowly, with 30 to 40 per cent still onlhand.
It is estimated the acreage of winter wheat will
show a decrease of from 15 to 20 per cent, and
spring wheat of from 25 to 30 per cent, over
last year. There are approximately 200,000
sacks more beans on hand this year than usual.
Cane-sugar stocks on hand in San Francisco
are about 75,000 to 80,000 tons, double the
usual amount this time of year. The 1915
production of Hawaiian cane sugar was approximately 645,000 tons, a record breaking crop
and 29,000 tons more than 1914. The market
during the year, due to abnormal conditions,
has frequently shown sudden and violent
changes, with prices from $4.07 to $5.20 per
hundredweight, present prices being $4.58.
The minimum price at which beet sugar can
be produced is said to be $3.35 per hundredweight. There was approximately 320,000
tons production of beet sugar in Twelfth Federal Reserve District, an increase of 40,000




135

tons over 1914, and large profits for beetsugar industries. Beet-sugar stocks now on
hand in San Francisco are about 90,000 tons.
The citrus-fruit crop is reported light, but
being marketed rapidly at attractive prices,
with the probability of returns above the average to the growers.
Mining interests are active, with present
mines being enlarged and new machinery installed to increase the production; some old
mines are being reopened, and prospecting for
new ore deposits is very keen. The dividends
of the mining industries of Utah alone were
$10,000,000 in 1915, or equal to the dividends
of all national banks in the twelfth district for
the preceding year.
Regardless of the shortage in ocean
transportation facilities, exports and imports
continue to increase. The imports at San
Francisco for the moi*th of January exceeded
all previous records with a total value of
$13,000,000. Seventy per cent of this was raw
silk and wool. Seattle's commerce by sea
gained $103,182,450 during 1915, totaling
$257,792,393 exports and imports.
Seventeen clearing-house associations, including the principal cities of the district, report
total clearings for January of $555,000,000, a
gain of $58,000,000 over the same month, 1915.
The reports as of December 31,1915, of national
banks in this Federal Reserve District to the
Comptroller of the Currency show total deposits
of $675,000,000, with cash and exchange of
$267,000,000, or 38 per cent, and out of
$445,000,000 of loans and discounts $91,000,000,
or slightly over 20 per cent, are reported eligible
for rediscount with the Federal Reserve Bank.

136

FEDERAL RESERVE BULLETIN.

MARCH 1,

1916.

DISTRIBUTION OF DISCOUNTS BY SIZES of $148,800 of two-name paper bought during
the month in the open market by the Boston
AND MATURITIES.
bank and the New Orleans branch.
The total discounts of commercial paper
The total number of bills discounted during
granted by the Federal Reserve Banks during January was 6,342, or 22 per cent less than the
January, 1916, were $11,114,900, compared December total, and almost 30 per cent less
with $15,412,000 in December, 1915, and than the average number for the preceding
$13,446,100, the monthly average discounted quarter. The average size of the paper disduring the past year. While all the banks counted during the month was about $1,753,
which are more active in the discount field re- as against $1,904 in December and about $1,800
ported smaller operations than for the imme- for the last quarter in 1915. The average size
diately preceding months, the decreases are of the bills discounted by the more active
most marked in the case of the Atlanta and banks during the month varied between $1,442
Chicago banks, whose January discounts de- for Richmond, $2,074 for Kansas City, and
clined about 50 and 40 per cent below the $2,555 for Chicago,
averages for the preceding quarter. The three
Over 35 per cent of the total number of bills
southern banks are credited with 64.8 per cent and nearly one-half the entire amount of disof all the discounts handled by the system, counts handled during the month were bills
compared with 62.3 per cent for December and in denominations ranging between $1,000 and
65.6 per cent for the past calendar year; the $5,000. Bills of the larger size (i. e., in amounts
share of the Kansas City bank was 12.3 per of over $10,000) constituted about 17.5 per
cent, against 11.7 per cent for December and cent of the total discounts for the month, the
6.7 per cent for the calendar year 1915, while percentage varying between slightly over 6
Chicago's share for the report month was 8.8 per cent for the Richmond bank, nearly 25 per
per cent, as against 14.4 per cent for December cent for the Atlanta bank including its New
and 5.7 per cent for the past year. These five Orleans branch, and almost 35 per cent for the
banks handled 85.9 of all the discounts reported Kansas City bank. Small bills (in amounts up
for the month, as against 88.4 per cent in De- to $250) constituted nearly 18 per cent of the
cember and 78 per cent in the past calendar total number, though only slightly over 1.5
year.
per cent of the entire amount of the discounts
Commodity paper, practically all secured by granted during the month. The Richmond
cotton, totaled $1,863,600 and constitutes 16.8 bank reports 479 such bills, or over 20 per cent,
per cent of the total discounts for the month, and the Atlanta bank 275, or over 28 per cent
compared with 19.1 per cent for December and of the entire number of their discounts for the
over 16 per cent for the last four months in month. Of the total number and amount of
1915, during which this class of paper was small bills discounted during January about
handled. Of the total January discounts re- two-thirds was handled by these two banks.
ported by the Atlanta bank and its New OrAbout 2.4 per cent of the total amount of
leans branch over 38 per cent was commodity paper discounted was 10-day paper; 16.7 per
paper discounted at the preferential 3 per cent cent, 30-day; 30.2 per cent, 60-day; and 37.1
rate, while of the total discounts of the Rich- per cent, 90-day paper. Over 1.5 millions, or
mond bank 30 per cent was paper of this class. 13.6 per cent of the total, was agricultural
Trade acceptances discounted during the month and live-stock paper, maturing after 90 days
by seven banks aggregated $444,400, of which at the time of rediscount. The largest amount
almost 76 per cent was handled by the Rich- of 10-day paper was discounted by Philadelmond and Atlanta banks, including the latter's phia, Chicago reports the largest amount of
New Orleans branch, the t o t a l l i n g exclusive 30-day paper, Richmond the largest amounts




137

FEDERAL RESERVE BULLETIN.

MARCH 1,1916.

of 60 and 90-day paper, while Dallas leads in
the amount of 6-month paper discounted during the month.
The number of member banks accommodated during January through the discount of
paper was 614, the smallest monthly number
since April, 1915, and constituted slightly over
8 per cent of the entire number of member
banks shown at the end of the month. Over

one-half of the rediscounting banks are situated within the three southern reserve districts. Member banks in Texas secured over
1.5 million dollars of rediscounts, banks in
South Carolina over 1.4 millions, and banks in
North Carolina over 1 million, the combined
share of rediscounts secured by banks in these
three States being over 36 per cent of the total
discounts reported for the month.

Commercial paper, exclusive of bankers' acceptances, rediscounted by each of the Federal Reserve Banks during the month of
January, 1916, distributed by sizes.
NUMBER OP PIECES AND AMOUNTS.
[In thousands of dollars.]
To $100. Over $100 Over $250
to $250.
to $500.

Over $500
to $1,000.

Over $1,000
to $2,500.

Over $2,500 Over $5,000
to $5,000. to $10,000.

Over
$10,000.

Total.

Per cent.

Bank.
3 ft

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

0.4
.4
1.0
.2
9.9

18 3.5
24 4.6
42 7.4
8 1.3
367 68.6

10.1 18
13.3 22
59
19.8
17
3.7
494 196.0 519

15.0
15.3
48.5
13.1
406.2

13
17
46
34
503

22.2
25.5
80.3
62.9
877.9

8.3

176 28.4
1.
4.8
1.3
14.1
16.6
1.6

149
55
54
22
157
153

58.2
24.:
20.4
8.7
57.8
60.1
2.5

126.9
91.4
50.6
23.1
106.7
181.3
11.3

170
130
61
61
153
234
14

303.7 134
218.7 53
101.7 39
18
86.0
67
239.6
369.5 138
26.1 18

34 2.9
274 23.9

158
113
63
35
141
241

r

856 153.9 1,214 474.81,403 1,089.4 1,436 2,414.1

22.3
25.3
28.3
15.7
547.4

529.6
216.8
146.6
59.
242.3
495.6
57.7

94 131.1 1.5 1.2
117 125.6 1.S 1.1
229 242.8 3.6 2.2
14.6 78
127.9 1.2 1.2
211.0 2,370 3,417.1 37.4 30.7

409.1
155.
157.0
10.
228.4
371.0
25.2

57.6
41.2
57.5
16.4
290 1,100.1

479.8
265.0
102.5

8013,021.1 2681,995.6

21

475.0
• 348.5
45.7

966
381
269
145
658
962
73

1,944.0 15.2 17.5
973.5 6.0 8.8
4.2 5.2
583.
189.0 2.3 1.7
1,364.6 10.4 12.3
1,845.5 15.2 16.6
170.1 1.2 1.5

90 1,942.1 6,34211,114.9 100.0 100.0

PERCENTAGES OF AMOUNTS OF EACH CLASS TO TOTAL.

Bank.

To
$100.

Boston
New York
Philadelphia...
Cleveland
Richmond
Atlanta
Chicago
St. L o u i s . . . . . . .
Minneapolis
Kansas City....
Dallas
San Francisco..

0.3
.3
.4
.2
.3
.4

Total....

.2




Over
$100
to
$250.

3.1
1.0
2.0
1.5
.2
.8
.7
1.0
.9
1.0

Over
$250
to
$500.
7.7
10.6
8.2
2.9
5.7
3.0
2.5
3.5
4.6
4.2
3.3
1.5
4.3

Over
$500
to
$1,000.
11.5
12.2
19.8
10.2
11.9
6.5
9.4
8.7
12.2
7.8
9.8
6.6

Over
$1,000
to
$2,500.

Over
$2,500
to
$5,000.

Over
$5,000
to
$10,000.

Over
$10,000.

Total.

16.9
20.3
33.1
49.2
25.7
15.6
22.4
17.4
45.5
17.6
20.0
15.3

43.9
32.8
23.7
12.8
32.2
27.2
22.3
25.1
31.6
17.8
26.9
33.9

17.0
20.1
11.7
12.3
16.0
21.1
16.0
26,9
5.4
16.7
20.1
14.8

11.4
6.2
24.7
27.2
17.6
34.8
18.9
26.9

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

21.7

27.2

17.9

17.5

100.0

138

FEDERAL EESERVE BULLETIN.

MAECH 1, 1916.

Commercial paper, exclusive of bankers9 acceptances, discounted during January by each of the Federal Reserve Banks,
distributed by States and maturities as of date of discount.
[In thousands of dollars.]
Number
Number
of banks
of member accommobanks.
dated.

Districts and States.

District No. 1—Boston:
Connecticut
;
Maine
Massachusetts
New Hampshire . . . . . . . .
Rhode Island
Vermont
Total
District No. 2—New York:
New Jersey
New York
Total
District No. 3—Philadelphia:
Delaware
New Jersey
Pennsylvania .
Total

. ...

Total




4.3

29.6
44.0
7.1

2.4

26.3

13.6

1.8

50.4

31.3

36.6

41.5

19.9

1.8

131.1

2
9

31.1
6.4

• 4.2
30.3

.5
52.7

.4

35.8
89.8

11

37.5

34.5

53.2

.4

125.6

1
5
14

64.2
4.9

54.4
13.1

5.5
24.2
17.4

1.0
15.3
38.3

4.5

6.5
158.1
78.2

20

69.1

67.5

47.1

54.6

4.5

242.8

1
7
4

12.1

30.6

23.5
18.2
12.6

6.0
11.8
11.8

1.3

29.5
72.7
25.7

12

12.1

30.6

54.3

29.6

1.3

127.9

14
97
79
73
137
104

1
5
29
40
35
8

12.5
7.5

118.8
144.1
105.8
12.8

9.2
15.9
405.0
561.8
346.7
41.4

21.2
75.6
481.4
668.1
266.4
42.6

.9
59.2
19.6
.6

30.4
91.5
1,018.6
1,440.7
738.5
97.4

504

118

20.0

381.5

1,380.0

1,555.3

80.3

3,417.1

96
55
116
5
18
97

20
13
41

10.5

39.9
102.6
60.7

115.8
144.2
277.4

185.6
161.6
385.2

25.7
16.3
99.8

367.0
424.7
833.6

17.9
115.5

6.8

43.3
275.4

97

3.7
48.2
255.1

21.7
101.6

387

.

6.3

8

762

•.

3

72
375
301
14

Total

District No. 9—Minneapolis:
Michigan
Minnesota
Montana
North Dakota
South Dakota
Wisconsin

2.0

2.3

628

Total

Total

12.9

24
70
534

District No. 6—Atlanta:
Alabama
Florida
Georgia
Louisiana
.
Mississippi
Tennessee

Total

14.7
19.0
.5

615

Total

District No. 8—St. Louis:
Arkansas.
Illinois
Indiana
Kentucky
1
Mississippi
Missouri
Tennessee

25.0

132
483

Ohio......
Pennsylvania
West Virginia

District No. 7—Chicago:
Illinois... .
Indiana
Iowa
Michigan
Wisconsin

2
2
1

Paper
Total
maturing commerafter 90 cial paper
days.
discounted.

433

District No. 4—Cleveland:
Kentucky

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

73
70
168
56
18
48

Paper
Papter
Paper
maturing maturing maturing
Paper
after 30
after 60
maturing after 10
within 10 days but days but days but
within 30 within 60 within 90
days.
days.
days.
days.

660.7

865.8

148.6

1,944.0

317
197
348
77
51

9
11
34
1

398.8
.7
13.2

132.6
17.5
82.7
1.5

59.4
38.5
56.5
.9

19.3
38.3
112.9
.7

990

55

412.7

234.3

155.3

171.2

973.5

2.0
1.5

8.7
7.3
70.5

7.7
14.0

2.7
52.0
23.3

9.9
63.1
24.5
11.8
14.5
70.8
33.2

20.8
.3

26.3
86.4
96.5
13.3
19.8
157.6
183.8

.1
3.3

13.8

610.1
95.0
285.3
3.1

=======
64
157
61
69
17
81
20

5
9
4
2
2
12
7

42.6

2.6
14.0
84.4

469

41

42.6

104.5

164.5

227.8

44.3

583.7

31
279
68
153
119
88

16
4
9
7
.8

5.1

3.4

1.1

11.3

45.3
29.8
12.9
21.6

18.3

16.4
2.4
4.2
17.2

70.2
32.2
17.1
51.2
18.3

738

44

18.3

6.2

14.7

40.2

109.6

189.0

1.5

MARCH 1,1916.

139

FEDERAL RESERVE BULLETIN.

Commercial paper, exclusive of bankers' acceptances, discounted during January by each of the Federal Reserve Banks,
distributed by States and maturities as of date of discount—Continued.
[In thousands of dollars.]
Number
Paper
Number
of banks maturing
of member accommo- within 10
banks.
dated .
days.

Districts and States.

District No. 10.—Kansas City:
Colorado
Kansas
Missouri
Nebraska
New Mexico
Oklahoma..
Wyoming
Total

.

. . .

53
205
9

2.5

19.2
168.6
31.5
81.6

49.1
20.4
76.8

325.2

388.9

234.2

1,364.6

21.6
38.3
292.4
352.3

35.9
13.1
7.6
36.8
583.6
677.0

111.3
12.9
528.4

57.9
16 4
122.9
92.7
1,555.6

655.9

1,845.5

41 0

34 4

28 0

2.1

6.2

105.6
13.9

17.5

29.1

48.1

54.0

63.3

170.1

56.1

360.2
.4

151.2

649

109

160.3

13
4

2 2

4.0
4.7

.5

218.9
4.7

5.1

1.5

1
25

.6

3.0

3.3

2.5

529

„

7

78

•

11.7
73.2

87.4

10.2

1
2
8
9
89

Paper
Total
maturing commerafter 90 cial paper
discounted.
days.

42.2
613.0
264.2
159.1
21.0
265.1

27'.6
65.2

.8

6
27
28
42
546

58
10
86
23

8.8

25.5

74

1
7

Paper
maturing
after 60
days but
within 90
days.

131.4
200.0

945

266

Paper
maturing
rafter 30
days but
within 60
days.

20.9
25.0

20
1
26

306
33

District No. 11.—Dallas:
Arizona...
X/Ouisiana
Now M!exico .
Oklahoma
Texas
Total
District No. 12.—San Francisco:
Alaska
Arizona
California
Idaho . . . .
Nevada
Oregon
.
Utah
Washington
Total

5
17
5

119
220

Paper
maturing
after 10 <
days but
within 30
days.

2.7

50.1

2.5

RECAPITULATION.

Districts and cities.

No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.

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

Total for January
Per cent
Total for January, 1915
Per cent«




Total
Number of Number of
banks
member
accommobanks
dated.
reported.

433
615

8
11

628
762
504
387
990
469
738
945

20
12
118
97
55
41
44
74

649
529

109
25

7,649

614

7,610

398

Paper
maturing
after 10
days but
within 30
days.

Paper
maturing
after 30
days but
within 60
days.

Paper
maturing
after 60
days but
within 90
days.

36.6
37.5

2.7

41.5
34 5
47.1
54.3
1,380.0
660.7
234.3
164.5
14.7
325.2
352.3
50.1

19.9
53 2
54.6
29.6
1,555.3
865.8
155.3
227.8
40.2
388.9
677.0
54.0

4.5
1.3
80.3
148.6
171.2
44.3
109.6
234.2
655.9
63.3

131.1
125 6
242.8
127.9
3,417.1
1,944.0
973.5
583.7
189.0
1,364.6
1,845 5
170.1

1,855.4
263.3
16.7
2.4
4,109.3
38.4

3,359.2
30.2
3,627.0
33.8

4,121.6
37.1
2,365.1
, 22.1

1,515.4
13.6
611.4
5.7

11,114.9
100.0
10,712.8
100.0

Paper
maturing
within 10
days.
31.3
69. i
12.1
20.0
13.8
42.6
•18.3

56.1

0

67.5
30.6
381.5
255.1
412.7
104.5
6.2
360.2
160.3

Paper
Total
maturing commer- Per cent.
after 90 cial paper
days.
discounted.

1.8
,4

1.2

1 1
2.2
1.2
30.7
17.5
8.8
5.2
1.7
12.3
16.6
1.5

100.0

140

MARCH 1, 1916.

FEDERAL RESERVE BULLETIN.

Trade acceptances * discounted by each Federal Reserve Bank from Sept. 2, date of first discount to Dec. SI, 1915, andfor the
month of January, 1916.
Total to
Dec. 31,

Federal Reserve Bank.

1915.

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

15,700
4,900
450,500
1,007,100

January,
1916/

167,800
87,800
160,800
74,200

1

$5,700
4,900
587,800
1,209,100
8,200
200,400
135,100
172,500'
79,500

$137,300
202,000
8,200
32,600
47,300
11,700
5,300

1,958,800

Total.

Total.

444,400

2,403,200

Included in total of commercial paper shown above.

1

Commodity paper discounted by each Federal Reserve Bank from Sept. 8, date of first discount, to Dec. 31, 1915, and for
the month of January, 1916.
Total to
Dec. 31,

Commodity paper

1,863,600

12,178,700

Total.

Included in total of commercial paper shown above.

discounted by each Federal Reserve Bank during January, 1916, distributed by classes.
Richmond.

Class.

Wheat

1,300
81,900
24,000

$3,892,000
7,778,100
99,800
26,600
321,000
• 61,200

10,315,100

Total..

x

$1,010,600
745,800

1915.

Richmond
Atlanta (including New Orleans branch).
St. Louis
Minneapolis
Dallas
San Francisco
i

1

January,
1916.

$2,881,100
7,032,300
99,800
25,300
239,100
37,200

Federal Reserve Bank.

$1,000,548
10,000

.

Atlanta
(including
New Orleans).

Minneapolis.

Dallas.

$744,765

San Francisco.

$74,972

$24,003

$1,820,285
10,000
1,319
6,944
25,043

24,003

1,863,591

$1,319
6,944

1,040

Total

1,010,548
1

Total.

745,805

1,319

81,916

Included in total of commercial paper shown above.

Amounts of commercial paper, exclusive of bankers' acceptances, held by each Federal Reserve Bank on Jan. 28, 1916, distributed by maturities.

Federal Reserve Bank.

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta, including New Orleans branch
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
—
Total
Per cent... •.
*..




Paper matur- Paper matur- Paper maturPaper matur- ing after 10 ing after 30 ing after 60 Paper maturing within
days but
days but
days but
ing after 90
10 days.
within 30
within 60
within 90
days.
days.
days.

Total.

Per cent.

$35,200
45.100
52,300
48,900
1,333,200
904,000
731,200
221.300
118,500
386,700
613,800
58,200

$76,000
63,800
55,600
127,500
1.753,700
1,650,600
419,700
232,800
77,800
874.900
711,700
58,400

$64,400
67,200
59,600
130.600
2,505,200
1,683,000
941.1U0
365,200
244,400
692,500
1,139.800
147,800

$15,700
32,300
44,900
37,100
1,050,400
1,085,000
431.900
141,500
231,700
50?,700
953,400
108.800

$400
10,400
15,200
105.400
69S.200
809,100
106,300
406,900
411.200
.170,500
76,800

$191,300
208.800
222,800
359,300
6,747.900
6,080,800
3,023,000
1,067,100
1,079,300
2,W>8,000
4,592,200
450,000

25.1
22.6
11 3

4,608,400
17.1

6,105,500
22.7

8,040,800
29.9

4,635,400
17.2

3,510,400
13.1

26,900,500

100.0

0.7
.8
.8
1.3

4.0
4.0

10.6
17,1
1.7

141

FEDERAL BESEEVE BULLETIN.

MARCH 1,1916.

ACCEPTANCES.
Bankers* acceptances, by classes, held by the Federal Reserve Banks each week.
Nonmember banks.
Member
banks.

Date.

January 31,1916..
February 7,1916.
February 14,1916
February 21,1916

Private
banks.

Total.

Trust
companies.

State
banks.

$8,174,000
7,876,000
7,985,000
8,194,000

$356,000 $1,510,000
336,000
1,456,000
347,000
1,851,000
392,000
1,841,000

$15,834,000
15,681,000
17,581,000
17,661,000

$25,874,000
25,349,000
27.764,000
28; 088,000

'Acceptances indorsed by member banks: State banks, $9,000; private banks, $647,000; total, $656,000.

Amounts of acceptances held by the several Federal Reserve Banks at close of business on Fridays, Jan. 28 to Feb. 18, 1916.
[In thousands of dollars.]
Philadelphia.

Cleve- Richland. mond.

Boston.

895.3
1,202.7
753.3
716.8

724.4
773.2
663.2
1,146.0

477.9
320.3
471.0
203.2

123.3
102.4
111.4
136.8

1,596.5
1,059.6
1,696.2
2,078.3

1,759.5
1,762.9
2,750.2
2,556.3

552.4
464.2
582.7
600.2

239.2
148.2
213.9
274.4

2,561.1
3,025.6
2,366.6
2,469.7

4,572.3
6,455.2
5,343.5
5,349.0

881.6
887,1
770.1
646.6

344.1
421.0
405.0
365.0

2,366.9
2,424.6
3,766.4
3,764.6

3,398.4
2,191.5
3,460.2
3,771.7

161.5
50.1
8.5
134.5

225.2
136.9
81.8
170.0

7,419.8
7,712.5
8,582.5
9,029.4

Maturities within 10 days:
Jan. 28
Feb. 4
,
Feb. 11
Feb. 18
From 11 to 30 days:
Jan. 28
Feb. 4
Feb. 11
Feb. 18
From 31 to 60 days:
Jan. 28
Feb. 4
Feb. 11
Feb, 18
From 61 days to 3 months:
Jan. 28
Feb. 4
Feb. 11
Feb. 18
Total acceptances held:
Jan. 28
Feb.4
Feb. 11
Feb. 18.

New
York.

10,454.6
11,182.8
12,217.1
12,823.0

2,073.4
1,721.7
1,832.3
1,584.5

931.8
808.5
812.1
946.2

Atlanta.

KanSt.
Chicago. Louis. Minne- sas
apolis. City.

Dallas.

San
Total
Franfor
cisco. system.

657.5
417.1
223.6
291.6

81.4
94.6
127.1
99.3

47.0
35.6
67.0
36.3

61.9
30.7
111.3
25.5

50.0

65.0
55.4
132.8
97.9

3,133.7
3,050.6
2,679.3
2,808.5

110.2

**38.T
38.1

337.1
344.7
281.5
492.8

200.2
112.3
139.2
227.9

129.8
108.6
126.8
140.7

127.7
121.7
89.4
149.5

190.0
179.4
50. 6 160.6
210.0

5,151.0
4,301.6
6,143.9
6,878.4

150.0
150.0
150.0
50.0

45.6
45.6
57.5
207.5

914.5
1,009.8
956.8
732.8

293.7
388.3
475.5
368.2

192.2
216.1
183.4
179.5

200.8
251.9
208.4
152.6

321.9
403.4
379.4
323.4

10,477.8
13,254.0
11,296.2
10,844.3

345.2
300.0
250.0
50.0

368.4
146.6
120.5
302.0

253.6
179.0
52.7
128.4

120.6
115.6
112.1
118.7

106.6
50.8
58.5
95.2

205.2
77.9
44.6
68.8

7,551.6
5,673.0
7,955.3
8,603.9

409.4
364.2
364.2
295.6

2,277.5
1,918.2
1,582.4
1,819.2

828.9
774.2
794.5
823.8

489.6
475.9
489.3
475.2

497.0
455.1
467.6
422.8

782.1
716.1
717.4
700.1

26,314.1
26,279.2
28,074.7
29,135.1

18.6
18.6
18.6

150.0
150.0
165.3
165.3

50.0
50.0

Amounts of acceptances (in the foreign and domestic trades) purchased by each Federal Reserve Bank during the calendar yea
1915 and for the month of January, 1916, distributed by maturities.
[In thousands of dollars.]

Acceptances maturing—

Within 30 days:
Calendar year 1915
January 1916

»

Total
After 30 but within 60 days:
Calendar year 1915
Tamiarv 1916
Total
After 60 days but within 3
months:
Calendar year 1915
January, 1916
Total
Total acceptances bought:
Calendar year 1915
January, 1916
Total




Boston.

"New
York.

Philadelphia.

Cleve- Richland. mond.

Atlanta.

Chicago.

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

497
48

1,246
587

695

101
64

7

156

103

45
20

69
9

61
6

2,980
734

545

1,833

695

165

7

156

103

65

78

67

3,714

2,137
102

2,377
621

1,464
43

746
42

19

816
279

374
43

191
6

183
55

750
13

9,057
1,204

2,239

2,998

1,507

788

19

1,095

417

197

238

763

10,261

11,471
2,681

22,211
2.686

5,406
151

2,116 .
267

250

46
300

4,810
489

1,324
357

1,219
200

1,536
151

2,419
304

52,808
7,586

14,152

24,897

5,557

2,383

250

346

5,299

1,681

1,419

1,687

2,723

60 394

14,105
2,831

25,834
3,894

7,565
194

2,963
373

250

72
300

5,782
768

1,801
400

1,455
226

1,788
215

3,230
323

64,845
9,524

16,936

29,728

7,759

3,336

250

372

6,550

2,201

1,681

2,003

3,553

74,369

142

FEDEEAL EESEEVE BULLETIN".

MAECH 1 , 1 9 1 6 .

Distribution of bills bought in open market by all Federal Reserve Banks during the month of January, 1916, by classes of
acceptors and sizes.
To $5,000.
Acceptances by classes.

Total bankers' accept194
ances 1
Trade acceptances 2

$163,231
345,136
28,750
9,842

Over $25,000
to $50,000.

Over $50,000 Over $100,000.
to $100,000.

$473,718
1,224,160
22,880

$1,891,203
1,859,798
33,750
230,180
13

$1,011,527
627,568

$752,473
127,220

Total.

252 $4,292,152
396 4,183,882
10
62,500
32
836,184

45.0
43.9
.7
8.8

168,382

404,900

1,807,477
50,000

17 1,284,593

9,374,718
148,795

98.4
1.6

5.7

9,523,513 100.0

220

1,720,758 213 4,014,931
98,795

220

546,959

Total bills bougnt in
open market194

1

Over $10,000
to $25,000.

I!
I
l-k

Member b a n k s . . .
Trust companies.
State banks
Private banks

Per cent

Over $5,000
to $10,000.

1,720,758

4,113,726

1,857,477

17 1,284,593

18.1

43.2

19.5

13,5

46

100.0

Of the above total of bankers' acceptances $8,502,464 are based on Imports or exports and $872,254 on domestic trade transactions.
2 Practically all drawn abroad on importers in the United States and indorsed by foreign bankers.




MARCH 1,1916.

143

FEDERAL RESERVE BULLETIN.

FEDERAL RESERVE BANK STATEMENTS.
Resources and liabilities of each of the Federal Reserve Banks and of the Federal Reserve System at close of business on
Fridays,

Jan. 28, to Feb. 25, 1916.
RESOURCES.

[In thousands of dollars.]

Boston.

Gold coin and certificates
in vault:
Jan. 28
Feb. 4...
Feb. 11
Feb. 18
.
Feb. 25
Gold settlement fund:
Ian. 28
Feb. 4
Feb. 11
Feb. 18
Feb.25...
Gold redemption fund:
Jan. 28*
Feb. 4...
Feb. 11.
Feb. 18..
Feb.25/.
Legal-tender notes, silver,
etc.:
Jan.28..-.
Feb. 4...
.Feb. 11..
Feb. 18
Feb.25
Total reserve:
Jan.28
Feb. 4...
Feb. 11
Feb. 18....
Feb.25.......-...--..
Bills discounted—Members:
Jan.28
Feb. 4
..;...-.
Feb. 11
Feb. 18
Feb.25
Bills bought in open market:
Jan.28
Feb. 4..
Feb. 11...
Feb. 18
Feb.25
United States bonds:
Jan.28
Feb. 4...
Feb. 11
Feb. 18
Feb.25
Municipal warrants:
Jan. 28
Feb. 4
Feb. 11....
Feb. 18
.Feb.25.
Federal Reserve notes, net

New
York.

San
St.
Minne- Kansas
Chicago. Louis. apolis. City. Dallas. Francisco.

Atlanta.

4,676
4,601
4,616
4,651
4,678

5,205
5,307
5.179
5,762
5,631

31,676
33,346
35,171
30,970
33,208

3,015
3,139
3,331
3,638
5,281

3,140
2,949
2,992
3,013
3,198

8,728
8,727
8,740
8,225

4,045
4,018
4,014
4,017
4,022

4,520
4,630
4,445
3,935
6,727

263,865
255,469
255,284
255,369
262,491

11,048
12,258
12,685
10,999
10,580

3,600
5,606
5,949
5,776

14,152
10,467
10,136
11,951
10,769

5,882
3,842
3,430
2,566
2,621

4,344
4,133
4,090
4,023
4,049

3,295
3,969
3,982
4,089
2,575

8,987
8,693
9,207
8,848
9,501

5,535
5,858
4,181
6,496
3,239

84,850
85,368
83,938
81,648
76,435

281
330
330
332
320

331
333

107
106
106
103

200

21
19
19
19
1

246
245
245
245
245

10

1,146
1,167
1,120
1,300
1,512

58
80
87
101
119

192
244
223
125

1,145
822
733
804
1,665

139
156
152
150
304

263
261
453

224
245
252
236
183

592
•599
835
830
835

11
12
14
23
5

15,496
14,637
15,248
18,274
17,678

16,063
17,269 9,430
17,718 11,362
16,083 12,268
15,697 11,851

46,973
44,635
46,040
43,725
45,842

9,057
7,156
6,932
6,373
8,207

7,777
7,373
7,377
7,332
7,730

12,439
13,048
13,067
13,168
11,081

13,870 10,066
13,555 10,500
14,301 8,640
13,940 10,454
14,603 9,981

365,357
356,641
355,590
356,591
358,116

6,081
5,400
5,103
4,737
4,482

3,033
2,456
2,270
2,105
1,984

1,067

1,079

871
802

932
915

2,869
2,609
2,485
2,360
2,070

4,592
4,639
4,696
4,624
4,741

450
411
418
427
421

26,901
25,044
24,654
23,678
22,827

774
794
824
725

497
455
468
423
527

50
50
50

782
716
717
700
960

26,314
26,279
28,074
29,136
29,054

3,035
3,035
3,035
3,035
3,035

21,372
24,341
25,304
26,422
29,632

1,177
1,207
1,222
1,469

20,602
20,856
25,577
24,964
25,403

5,409
5,428
5,386
5,419
5,573

33,710
28,344
28,576

1,865
1,243
3,207
1,130
1,290

110,761
115,223
112,964
112,255
113,274

160,184
149,569
150,820
156,198
160,218

1,877
2,022
1,222
3,753
3,344

11,346
15,664
10,964
8,505
6,499

9

114
103
55
236
236

50

1,086
681
319
208
133

3,742
3,897
5,076
8,745
7,657

5,973
. 5,644
5,165
4,812

1,701
1,719
1,626
1,521
1,387

19,520
19,297
18,097
17,651
.16,739

175,386
169,233
166,915
173,684
174,610

21,643
21,737
21,495
18,538
18,027

22,897
23,408
23,646
23,375
23,748

191
170
211
217
183

209
203
174
169
167

223
219
223
221
199

359
336
296
260
217

6,748
6,696
6,934
6,755
6,646

7,420
7,713

10,454
11,183
12,217
12,823
12,556

2,073
1,721
1,832
1,585
1,544

932
809
812
946
1,009

150
150
165
165
175

360

2,278
1,918
1,583
1,819
1,955

2,991
3,215
3,215
3,365
3,465

2,882
3,138
3,351
3,411
3,621

536
1,286

25
25
43
43
43

4,830
6,122
6,202
6,252
6,252

1,666
2,794
3,309
3,339

1,474
1,510
1,647
1,797
1,797

2,188
2,221
2,221
2,363
4,513

1,295
1,295
1,295
1,295
1,295

2,977
2,688
3,188
2,987
2,989

2,789
2,421
2,947
2,933
3,115

160
78
78
82
83

331

1,482
1,348
2,380
2,347
2,587

441
737
755
743

1,174
1,067
1,407
1,192
902

349
189
478
470
470

76

9,713
9,629

25,185
22,235
16,898
16,991
13,230

658
374
317
163
135

•; 1 , 7 4 7

713
757
563

1,767
1,747
1,799
1,806

941
1,076
1,133
1,318
386

610
807

2,540
4,729
3,610
5,182
4,394

643
1,117
1,241
1,518
1,529

4,720
4,899
4,535
4,425
4,445

8,654
986
986

3,305
3,453
3,424
3,359
3,461

7,060

12,347
12,595 9,993
9,210 10,226
10,402 10,356
6,876 11,168
3,000
3,166
6,641
2,971
6,289

1,368
1,449
213
5,222
5,143

Total
for
system.

Cleve- Richland. mond.

16,548
16,591
16,553
13,687
13,259

1,025
Jan.28
1,115
Feb. 4
,.
1,182
Feb. 11
1,263
Feb. 18
1,124
Feb.25
Due from other Federal
Reserve Banks, net:
1,108
Jan.28
Feb. 4
1,184
Feb. 11
1,627
Feb. 18
2,977
Feb.25
1
Items in transit,




Philadelphia.

11,500
11,696
11,794
11,498
11,193

562
990
804
684

2,259
1,354
1,429
1,638
1,923

319

1,006
2,165
991
539
571

490
476
475

96
7
1,369
1,264
1,135
1,264
1,370

73
211

i. e., total amounts due from less total amounts due to other Federal Reserve Banks.

144

MARCH 1, 1916.

FEDERAL RESERVE BULLETIN.

Resources and liabilities of each of the Federal Reserve Banks and of the federal Reserve System at close of business on
Fridays, Jan. 28, to Feb. 25, 1916—Continued.
RESOURCES—Continued.
[In thousands of dollars.]
Boston.
All other resources:
Jan. 28.
Feb. 4
Feb. 11
Feb 18...
Feb. 25....
Total resources:
Jan. 28
Feb. 4..
Feb. 11
Feb 18 .
Feb. 25...

New
York.

504
344
305
331
169

614
3,750
4,569
395
3,941

34,059
33,078
33,972
34,464
34,293

218,908
214,302
210,486
213,691
214,133

Philadelphia.

AtCleve- Richland. mond. lanta.

San
St.
Chicago. Louis. Minne- Kansas Dallas. Franapolis. City.
cisco.

Total
for
system.

701
329
390
478
340

104
33
25
35
59

1,072
1,093
839
783
1,094

244
381
558
410
546

4,212
3,824
4,465
3,962
4,258

113
105
115
119
119

1,171
1,132
1,055
683
258

711
515
274
286
289

176
118
132
147
159

9,994
11,903
12,889
7,929
11,401

32,305 32,016
31,682 32,339
30,645 32,753
32,381 32,964
31,671 33,297

25,484
25,580
26,349
25,294
25,869

18,590
18,477
18,702
18,666
18,401

63,127
63,356
64,390
63,639
65,366

18,856
18,416
19,527
18,948
19,944

17,437
17,204
17,484
17,138
17,423

20,882
20,918
20,909
20,731
20,289

20,617
20,215
20,616
20,195
20,978

22,241
22,628
22,742
22,534
22,888

517,770
513,997
513,396
509,551
513,500

372
279
162
300
169

LIABILITIES.
Capital paid in:
Jan. 28...
Feb. 4....
Feb. 11
Feb. 18
Feb. 25 .
Government deposits:
Jan. 28
Feb. 4...
Feb. 11...
Feb. 18
Feb. 25 ..
Reserve deposits, net:
Jan. 28
Feb. 4
Feb. 11
Feb. 18...
Feb. 25....
Federal Reserve notes, net
liability:
Jan. 28
Feb. 4
Feb. 11
Feb. 18.
Feb. 25
Due to other Federal Reserve Banks, net:
Jan. 28
Feb. 4 .
Feb. 11
Feb. 18
Feb. 25 .
All other liabilities:
Jan. 28
Feb 4
Feb. 11
Feb. 18
Feb. 25
Total liabilities:
Jan. 28
Feb.
Feb.
Feb.
Feb.

4
11
18
25




5,158
5,158
5,162
5,162
5,158

11,058
11,058
11,057
11,092
11,092

5,270
5,283
5,257
5,257
5,257

5,938
5,938
5,951
5,945
5,945

3,356
3,356
3,356
3,354
3,341

2,423
2,423
2,423
2,416
3,416

6,646
6,646
6,646
6,643
6,652

2,783
2,784
2,784
2,783
2,786

2,549
2,551
2,551
2,554
2,555

3,014
3,014
3,014
2,996
2,999

2,756
2,755
2,748
2,743
2,752

3,941
3,941
3,941
3,941
3,944

54,892
54,907
54,890
54,886
54,897

723
808
837
895
977

5,507
6,826
4474
6,120
7,936

597
509
190
317
302

336
444
515
588
674

5,897
6,025
6,404
6,237
6,500

6,151
5,956
5,964
5,874
6,164

893
758
i -26
382
700

1,041
1,490
1,685
2,007
2,282

170
267
375
325
412

501
641
172
206
306

5,162
5,183
5,169
5,176
5,180

782
943
1,122
819
1,068

27,760
29,850
26,881
28,946
32,501

28,178
26,237
27,973
28,407
28,158

195,591
193,095
190,200
185,445
184,817

26,438
25,890
25,198
26,807
26,112

25,742
25,957
26,287
26,431
26,678

11,301
11,393
11,773
10,981
11,330

8,175
8,185
8,627
8,880
8,358

55,588
55,952
57,770
56,614
58,014

15,032
14,142
15,058
14,158
14,876

14,718
14,386
14,558
14,259
14,456

16,247
16,186
16,665
16,516
15,867

10,136
9,970
10,139
10,218
10,024

17,518
17,744
17,679
17,774
17,876

424,664
419,137
421,927
416,490
416,566

4,895
4,771
4,778
4,682
4,653

1,735
1,811
1,585
1,396
1,358

1,120
1,077
1,058
1,013
1,117

2,563
2,307
2,136
1,998
2,258

875

6,752
3,323
4,755
11,034
10 288

424
60
764

35
35
38
40
45
34,059
33,078
33,972
34,464
34,293

218,908
214,302
210,486
213,691
214,133

10,313
9,966
9,557
9,089
9,386

32,305
31,682
30,645
32,381
31,671

32,016
32,339
32,753
32,964
33,297

106
102
103
100
105

25,484
25,580
26,349
25,294
25,869

18,590
18,477
18,702
18,666
18,401

i Overdraft.

141
137
141
140
150
63,127
63,356
64,390
" 63,639
65,366

18,856
18,416
19,527
18,948
19,944

17,437 20,882
17,204 20,918
17,484 20,909
17,138 20,731
17,423 20,289

20,617
20,215
20,616
20,195
20,978

22,241
22,628
22,742
22,534
22,888

517,770
513,997
513,396
509,551
513,500

MARCH 1, 1916.

FEDERAL RESERVE

145

BULLETIN.

Circulation of Federal Reserve notes at close of business on Fridays, Jan. 28 to Feb. 25, 1916.
[In thousands of dollars.]

Boston.

Federal Beserve notes issued to bank:
Jan. 28
Feb. 4
Feb. 11
Feb. 18
Feb. 25
-.
Federal Reserve notes in
hands of bank:
Jan. 28....
Feb. 4
Feb. 11
Feb. 18
Feb. 25
Federal Reserve notes in
circulation:
Jan. 28
Feb. 4
Feb. 11
Feb. 18.
Feb. 25
Gold and lawful moneydeposited with or to the
credit of the Federal
Reserve Agent:
Jan. 28...
Feb. 4
Feb. 11
Feb. 18
Feb. 25
Carried to net liablities:
Jan. 28
Feb. 4
Feb. 11
Feb. 18
Feb. 25
Carried to net assets:
Jan. 28
Feb. 4
Feb. 11
Feb. 18
Feb. 25

New
York.

RichAtmond. I lanta.

Chicago.

8,256
8,145
8,134
8,097

11,200
11,200
11,200
11,200
11,200

14,430 17,790
14,430 17,330
14,200 16,954
14,194 16,838
14,200 15,696

4,380
4,380
4,380
4,379
4,379

8,950
8,949
8,948

13,000
13,200
13,200
13,200
13,200

11,000
10,725
10,645
10,345
10,205

14,145
13,980
13,673
13,620
13,880

11,130
11,070
11,070
11,070
11,070

218,945
217,777
211,661
206,978
196,992

713
757
563

1,855
1,319
1,165
1,274
1,137

1,747
1,767
1,747
1,799
1,806

941
1,076
1,133
1,318
386

610
807
968
866
976

648
587

142
233
101
190
189

5,409
5,428
5,386
5,419
5,573

39,721
36,409
30,459
30,760
25,624

002 10,306 14,055 15,935
10,292 13,931 16,011
10,487 13,938 15,789
10,443 13,806 15,564
10,637 13,783 14,557

2,633
2,613
2,633
2,580
2,573

8,009
7,873
7,815

12,390

10,120
10,077
12,232 10,058
12,334 10,013
12,224 10,117

14,003
13,747
13,572
13,430
13,691

5,721
5,642
5,684
5,651
5,497

179,224
181,368
181,202
176,218
171,368

4,380
4,380
4,380
4,379
4,379

8,950

9,000
9,000
9,000
9,000
9,000

11,440
11,440
11,436
11,432
11,433

11,130
11,070
11,070
11,070
11,070

205,380
205,112

1,120
1,077
1,058
1,013
1,117

2,307
2,136
1,998
2,258

94,240
94,240
89,240
85,065
77,635

1,025
1,115
1,182
1,263
1,124

25,185
22,235
16,991
13,230

658
374
317
163
135

8,995
8,902
9,824
8,732
8,468

69,055
72,005
72,342
68,074
64,405

7,828
7,971
7,962

10,020
10,017
10,006
9,995
9,592

94,240
94,240
89,240
85,065
77,635

8,660
8,256
8,145
8,134
8,077

375
499
417

16,991
13,230

658
374
317
163
135

11,200
11,200
11,200
11,200
11,200

9,160
9,160
9,160
9,124
9,130

14,200
14,200
14,204
14,168
13,201

4,771
4,778.
4,682
4,653
25,185
22,235

Total
for
system.

Cleveland.

10,020
10,017
10,006
9,995
9,592

1,025
1,115
1,182
1,263
1,124

San
Francisco.

Philadelphia.

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

7*452

1,735
1,811
1,585
1,396
1,358
1,747
1,767
1,747
1,799
1,806

908
713
757
563

8,938
7,838

941
1,076
1,133
1,318
386

13,000
13,200
13,200
13,200
13,200

195^705
185,775
10,313
9,966
9,557
9,089

5,409
5,428
5,386
5,419
5,573

610
807
968
866
976

36,469
33,710
28,344
28,576
23,793

Statement of Federal Reserve Agents' accounts at close of business on Fridays, Jan. 28 to Feb. 25,1916.
[In thousands of dollars.]

Boston.

Federal Reserve notes:
Received from ComptrollerJan. 28
Feb. 4
Feb. 11
Feb. 18
Feb. 25
Returned to ComptrollerJan. 28
Feb. 4
Feb. 11
Feb. 18
Feb. 25
Chargeable to Federal
Reserve AgentJan. 28
Feb. 4
Feb. 11
Feb. 18
Feb. 25
In hands of Federal
Reserve AgentJan. 28
Feb. 4............
Feb. 11
Feb. 18
Feb. 25




New
York.

19,380
19,380
19,380
19,380
19,380

108,240
108,240
108,240
108,240
108,240

500
500
640
640
1,043

5,000
9,175
16,605

18,740
18,740
18,337

108,240
108,240
103,240
99,065
91,635

8,734
8,745
8,745

14,000
14,000
14,000
14,000
14,000

18,880

Philadelphia.

Cleve- Richland. mond.

15,480 13,000
15,480 13,000
15,480 13,000
15,480 13,000
15,480 13,000
640
1,040
1,140
1,140
1,290

6,180
6,184
6,195
6,206
6,093

1,680
1,680
1,680
1,600
1,560

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

20,400
20,400
20,400
20,400
20,400

9,380
9,380
9,380
9,380
9,380

1,102

120
120
120
120
120

17,000
17,000
17,000
17,000
17,000

20,400
20,400
20,400
20,400
19,298

9,260
9,260
9,260
9,260
9,260

9,600
9,600
9,600
9,600
9,600

19,000
19,000
19,000
19,000
19,000

13,000
13,000
13,000
13,000
13,000

2,570
2,570
2,800
2,806
2,800

2,610
3,070
3,446
3,562
3,602

4,880
4,880
4,880
4,881
4,881

650
651
652
662
1,762

6,000
5,800
5,800
5,800
5,800

2,000
2,275
2,355
2,655
2,795

17,000
17,000
17,000
17,000
17,000

120
120
120
200
240

14,840 12,880
14,440 12,880
14,340 12,880
14,340 12,800
14,190 12,760

Atlanta.

9,600
9,600
9,600
9,600

19,000
19,000
19,000
19,000
19,000

13,000
13,000
13,000
13,000
13,000

San
Fran-

19,580 11,360
19,580 11,360
19,580 11,360
19,580 11,360
19,580 11,360
146
176
216
286
286

Total
for
system.

275,420
275,420
275,420
275,420
275,420

230
290
290
290
290

1,756
2,246
7,526
11,851
20,976

19,434 '11,130
19,404 11,070
19,364 11,070
19,294 11,070
19,294 11,070

273,664
273,174

5,289
5,424
5,691
5,674
5,414

263,569
254,444
54,719
55,397
56,233
56,591
57,452

146

FEDERAL RESERVE BULLETIN.

MARCH 1, 1916.

Statement of Federal Reserve Agents' accounts at close of business on Fridays7 Jan. 28 to Feb. 25,1916—Continued.
[In thousands of dollars.

Boston.

Federal Reserve notes—
Continued.
Issued to Federal Reserve Bank, net-^Jan.28
Feb. 4
Feb. 1 1 . . . . . . . . . . .
Feb. 18
Feb. 25
Amounts held by Federal Reserve Agent:
In reduction of liability on outstanding notes—
Gold coin and
certificates on
hand-Jan. 2 8 . . . . . . .
Feb. 4
Feb. 11. , .
Feb. 18
Feb. 25
Credit balances,
ingoldredemp-.
tionfund—
Jan. 28
Feb. 4 . . . . . . . .
Feb. 11
Feb. 18
.
Feb. 25.......
Credit balances
with Federal
R e s er v e
BoardJan. 28
Feb. 4
Feb. 11 .
Feb. 18
Feb; 25
As security for outstanding notes—
Commercial
paperJan. 28
Feb 4
Feb. 11 . .
Feb 18
Feb. 25. . .
Total—
Jan. 28
Feb. 4
Feb. 11
Feb. 18
Feb. 25
Memorandum:
Total: amount of
commercial paper
delivered to Federal
Reserve AgentJan 28
Feb 4
Fe"b. 11
Feb 18
Feb. 25




• New
York.

Philadelphia.

Cleve- Richland. mond.

Atlanta.

14,430
14,430
14,200
14,194
14,200

17,790
17,330
16,954
16,838
15,696

San
St.
Chicago. Louis. Minne- Kansas Dallas. Franapolis. City.
cisco.

94,240
94,240
89,240
85,065
77,635

8,660
8,256
8,145
8,134
8,097-

11,200
11,200
11,200
11,200
11,200

9,510
9,510
9,410
9,410
8,910

94,240
82,900
77,900
73,958
73,958

3,660
3,660
3,560
3,560
3,530

10,640
10,640
10,640
10,640
10,640

500
500
500

510
507
596
585
682

11,340
11,340
11,107
3,677

500
496
485
474
467

560
560
560
560
560

500
500
710
500
734
464 .- 718
500
751

120
120
120
619
619

8,660
8,660
8,660
8,660
8,630

13,700
12,990
12,970
13,450
12,450

4,260
4,260
4,260
3,760
3,760

5,270
5,270
5,040
5,070
5,070
14,430
14,430
14,200
14,194
14,200

17,790
17,330
16,954
16,838
15,696

5,406
5,768
5,187
5,701
5,256

3,590
3,131
2,771
2,670
2,498

13,000
13,200
13,200
13,200
13,200

11,000
10,725
10,645
10,345
10,205

10,000
10,200
10,200
10,200
10,200

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

9,540
9,540
9,540
9,540
9,540

650

500
500
500
500

710
706
. 702
70.3

2,350
2,350
2,350
2,350
2,350

3,590
3,130
2,750
2,670
2,495

4,500
4,100
4,100
4,100
4,100

10,020
10,017
10,006
9,995
9,592

94,240
94,240
89,240
85,065
77,635

8,660
8,256
8,145
8,134
8,097

11,200
11,200
11,200
11,200
11 200

14,145 11,130
13,980 11,070
13,673 11,070
13,620 11,070
13,880 11,070

8,950
8,949
8,948
8,938
7,838

3,950
3,950
3,950
3,950
2,850

10,020
10,017
10,006
9,995
9>592

4,380
4,380
4,380
4,379
4,379

650
650
650
650

Total
for
system.

218,945
217,777
211,661
206,978
196,992

144,040
132,900
127,700
123,258
121,628

4,380
4,380
4,380
4,379
4,379

5,000
4,560
4,560
4,560
4,540

8,950
8,949
8,948
8,938
7,838

13,000
13,200
13,200
13,200
13,200

290
290
290

2,840
16,532
16,919
17>097
,9,847

7,000
6>500
6,500
6; 500
6,500

1,900 11,130
1,190 ,U,Q70.
1,190 .10,780
1,190. 10,780
1,190... 10,780

58,500
55,680
55,370
55,350
54,300

2,000
1,725
1,645
1,345
1,205

439:
438
4.28.
448

2,705
2,540
2,237
2 188
2,447

13,565
12,665
11,672
11,273
11,217

11,000
10,725
10,645
10,345
10,205

2,000
1 774
1,688
1,381
1,215

14,145 11,130
13,980 11,070
13,673 .11,070
13,620 11;070
13,880 11,070

3,794
4,224
4,173
4.253
4,171

218,945
2.17,777
211,661
206,978
196,992

14,790
14,897
13,819
14,005
13,140

147

FEDERAL BESEBVE BULLETIN.

MARCH 1,1916.

GOLD IMPORTS AND EXPORTS.
Imports of gold, by customs districts, Jan. 1 to Feb. 18, 1916.

Total.

St. Lawrence.

Michigan.

Dakota.

Buffalo.

Washington.

San Francisco.

Laredo.

El Paso.

Arizona.

New Orleans.

Florida.

New York.

Maine and New
Hampshire.

[In thousands of dollars.]

Week ending Jan. 28,1916.

Ore and base bullion
Bullion, refined
United States coin
Foreign coin
Total

5
289

31

1
g

712

9

712

36

5
2

1

1,956

85
1,011
1,956

2,245

5

31

* 36

2

5

1

7

3,053

Weekending Feb. 4,1916.

1

Ore and base bullion
United States mint or assay office
bars
Bullion, refined
Foreign coin
Total.

62

10

211
2,094

232

2,305

1

7

15

16

5

232

10

160

80

115
469
2,094

115
26
62

141

80

2,838

7

178

Week ending Feb. 11,1916.

Ore and base bullion
United States mint or assay office
bars
." .
Bullion, refined
Foreign coin
Total...

1

4

198
445
1

121

8

5
115
36

22

.

658

16

9

9

15

13

8

22

121

3

133

151

30

5

•7-

10

115
260
455

10

1,008

Weekending Feb. 18,1916.

Ore and base bullion
United States mint or assay office
bars.
Bullion, refined..
United States coin
Foreign coin
.....
Total

2

l

238

103

173

12

21

2,986

34

193

1,066

i

2,476

21

2

2

360
1
2,106

12
99
74

15

15

2

3

135

133

64

62

15

14

133

455

37

195

359
250

650

646

99
541
2
3,-lW

Jan. 1 to Feb. 18,1916.

Ore and base bullion
United States mint or assay office
bars
Bullion, refined
United States coin ..
Foreign coin
Total




1

58

9

2,497
2
17,003
1

32

5

19,560

32

69

71

25

40

1,222

14

1,355

6
11
34

193

359
4,198
' 45
17,014

17

22,682

148

FEDERAL RESERVE BULLETIN.

MARCH 1, 1916.

Exports of gold, by customs districts, Jan, 1 to Feb.

18,1916.

[In thousands of dollars.]
New
York.

Porto
Rico.

WashHawaii. San Fran- ington.
cisco.

Buffalo.

VerDakota. St. Law- mont. Total.
rence.

Week ending Jan. 28,1916.

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

1,534

1

510

1,034
500

.

2
20
1

500
10

1

250
11
261

23

750
750

2
20
501
2,045
511
3,079

Week ending Feb. 4,1916.

Ore and base bullion
United States mint or assay office bars
Bullion, refined, domestic
United States coin
Foreign coin
Total-

31

59
59

2,274

5
101
23
1,938

136

2,067

5

5
6
1,027
1,000

5

2,038

5
1

1,611
316

2

2,176

2

31

10
1,802

10

100
1

1,812

.

31
254
1
1,613
375

136

249

10

101

6

Week ending Feb. 11,1916.
United States mint or assay office bars
Bullion, refined, domestic
United States coin . . .
Foreign coin
Total

5

5

1
2
3

Week ending Feb. 18,1916.

Ore and base bullion
United States mint or assay office bars
Bullion, refined, domestic
United States coin
Foreign coin
Total

5

1
1,027
1,000
2,028

5

Jan. 1 to Feb. 18,1916.

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




..

758
1
4,872
4,814
10,445

31
15

20

701
73

15

20

774

1
3

35

26
41
2

69

1
2

504
5
1,000
1,316

3
750

57
1,303
714
6,735
6,130

3

2,825

753

14,939

149

FEDERAL RESERVE BULLETIN.

MARCH 1,1916.

EARNINGS ON INVESTMENTS OF FEDERAL RESERVE BANES.
Average amounts of earning assets held by each Federal Reserve Bank during January, 1916, earnings from each class of
earning assets and annual rates of earnings on the basis of January. 1916, returns.
Average balances for the month of the several

Earnings fron

Calculated annual rate of
earnings from—

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




$207,000 $7,245,000 $3, 265,000
210,00010,126,000 " 366,000
*n
184,000 2,367,000 361,000
415,000 981,000 816,000
7,050,000 150,000 149,000
6,971,000 233,000 330,000
3,749,000 2,354,000 337,000
1,172,000 849,000 396,000
1,130,000 545,000 960,000
311,000
3,183,000 503,000
76,000
4,387,000
398,000
420,000

2,810,000
2,501,000
25,000
4,406,000
1,251,000
1,408,000
2,164,000
1,131,000
1,822,000

,703,000
16,702,000
7,722,000
6,713,000
7,349,000
7,559,000
11,846,000
3,668,000
4,043,000
6,161,000
5,594,000
3,442,000

$694.99 $12,582.65 $6,375.48 $1,703.05 $21,356.17
>,375.
30,371.83
740.79 17,647. 6711,983.37
628.57 4,179.39 4,896.91 4,806.87 14,511.74
1,617.60 1,615.86 7,121.94 5,359.74 15,715.14
23,639.19
22,852.71
387.50 398.98
20,826.75
867.44
42.53 22,260.88
524.16
14,696.52
2,988.91 8,034.15 29,695.92
4,236.52 1,427.75 821.60 2,121.74 8,607.61
4,673.31
964.73 2,705.16 2,645.39 10,988.59
123.67 3,743.62 17,531.62
12,178.92
885.41
189.01 1,589.21 18,106.56
16,328.34
1,806.12 1,433.65 895.73 3,027.24 7,162.74

P.ct. P.ct. P.ct. P.ct.
4.03
4.23
4.03
4.59
3.89
3.46
4.70
4.26
4.87
4.59
4.46
5.16

2.08 2.34
2.09 2.26
2.08 2.44
1.94 .2.97
3.00 3.21
2.60 3.05
2.03 2.68
2.00 2.44
2.05 3.27
2.11 2.79
3.00
2."i5 2.72

2.03

2."6i

2.57

2."66

2.19
2.00
2.11
2.08
1.69
2.00

P.ct.

2.19
2.18
2.21
2.76
3.86
3.53
3.01
2.76
3.15
3.41
3.88
2.47

29,078,00026,155,00018,765,00018,504,000 92,502,000101,281.14 45,625.1139,968.20 33,073.54 219,947.99 4.18 2.09 2.56 2.14 2.85

INDEX.
Page.

Acceptances
141,142
Address of Hon. P. M. Warburg before New York
Credit Men's Association
102-107
Advisory Council, meeting of..
100
Bank Examiner, appointments of, for sixth district. 100
Bank examinations, cost of
,
122
Business conditions
124-135
Chart showing paid-in capital and reserve deposits
of Federal Reserve Banks
123
Circular letter on trade acceptances by Cleveland
Federal Reserve Bank
100-101
Class C director at Dallas, appointment of
107
Commercial paper discounted
136-139
Discount rates in effect
110
Distribution of discounts by sizes and maturities. 136-139
Earnings on investments of Federal Reserve Banks. 149
Federal Reserve Agents' accounts, statement of. *. 145
Federal Reserve Agents' fund, summary of transactions
110
Federal Reserve Bank statements
143-145
Federal Reserve notes, circulation of
145
Fiduciary powers granted by Board
122
Form, trade acceptance
101
Gold imports and exports.
147,148
Gold settlement fund..
108-110




Informal rulings of the Board
111-113
Trade acceptances
Ill
Bankers' acceptances
±
Ill
Federal Reserve notes, amendment to Regulation O
Ill
Loans on bills payable
112
Commodity paper, discount of
112
Drafts purchased in open market
112
Cotton-loan paper.
113
Intra-district clearing system, additions to and
withdrawals from
121
Law Department
114-120
Reports of conditions of State banks and trust
companies
114
Deposits of unfit currency
115
Pennsylvania escheat law
115
Savings and loan associations
118
Liquidation of a member bank
119
Purchase and discount of loans secured by farm
land
120
Press statements
121
Resources and liabilities of Federal Reserve Banks. 143-145
State bank admitted to system
122
Trade acceptances, information on
101
Work?of Board
99

o

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