Full text of Federal Reserve Bulletin : March 1917

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FEDERAL RESERVE
BULLETIN




ISSUED BY THE

FEDERAL RESERVE BOARD
AT WASHINGTON

MARCH, 1917

WASHINGTON
GOVERNMENT FEINTING OFFICE
1917

FEDERAL RESERVE BOARD.
EX OFfriCIO MEMBER8.
WILUAM G MOADOO,

Secretary of the Treasury,
Chairman.
JOHN SKELTON WILLIAMS,




Comptroller of (he Currency.

W. P. 6 . HARDING, Governor.
PAUL M. WARBURG, Vice Governor.
FRBDBRIO A. DELANO.
ADOLPH G. MILLER.
CHARLES S. HAMLIN.
H. PARKER WILLIS, Secretary.

SHERMAN ALLEN, Assistant Secretary and Fiscal
Agent.
M. 0. ELLIOTT, Counsel.




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in

TABLE OF CONTENTS.
Page.

Review of the month
Loans on United States bonds or notes
:
Letter from a Texas banker on operation of the Federal Reserve Act
Statements for the press:
Message of Gov. Harding to North Carolina business men, bankers, etc
Compilation of national bank returns by 'the Comptroller of the Currency
Clearing and collection operations at Boston
Regulations under which national banks may act as insurance and real estate agents
Fiduciary powers granted
New national bank charters
Commercial failures in January
Experience with Reserve Bank agency at Memphis
Operation of clearing plan
Synopsis of annual report of the Comptroller of the Currency
Bank agency at Paris, France
Gold settlement fund
Amendments to Federal Reserve Act:
Comparative Senate and House bills
Senate and House reports
*
Informal rulings of the Federal Reserve Board
Law department
Business conditions throughout the Federal Reserve districts
Discount operations of Federal Reserve Banks
Acceptances
'.
:
Resources and liabilities of Federal Reserve Banks
Federal Reserve note account of Federal Reserve Banks and agents
Gold imports and exports
Earnings on investments of Federal Reserve Banks
Discount rates in effect
Charts:
Net deposit liabilities, reserves held in vault and with Federal Reserve Banks
Gold holdings of Treasury, national banks. Federal Reserve Banks, and Federal Reserve agents
Statement showing condition of four leading European banks of issue
IV




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FEDERAL RESERVE BULLETIN
VOL.

MARCH 1, 1917.

3
REVIEW OF THE MONTH.

Further discussion and development of pending legislation amendatory of
Amendatory
^ n e Federal Reserve Act has
Legislation.
received substantial attention
during the month of February.
Gov. Harding attended several sessions of the
Senate Banking and Currency Committee prior
to the action of that committee in reporting the
amendatory measure, and set forth fully the
views entertained by the Federal Reserve
Board with respect to necessary changes in the
Act. Elsewhere in this issue are printed in
comparative form the House and Senate drafts
of the amendatory measure with, the substantial facts regarding each as set forth in the committee reports. The pressure of business
always characteristic of a short session of
Congress, and very urgent international affairs
that have occupied the attention of all branches
of the Government have naturally retarded the
progress of these amendments. It will be
noted that in the House of Representatives
there have been inserted a number of provisions additional to those suggested by the
Board, notable among them one relating to the
method of organizing branches of Federal
Reserve Banks and of establishing foreign connections for such banks. Sundry changes have
also been made in the Senate draft of the bill.
In view of the congestion of business it will
probably be impossible to secure action upon
these amendments by the present Congress.
In general the attitude of the public with respect to the amendments, so far as they have
received serious discussion, has been favorable,
and those mindful of our present economic conditions and the impending vast financial prob- i




No. 3

lems, both domestic and foreign, realize the
great importance of seeing these amendments
enacted into law without any delay.
The country's stock of gold has increased by
$43,138,000 through net imNet Gold
ports between January 13 and
Imports.
February 16, 1917, total gold
imports for this period amounting to $60,766,000 and total gold exports to
$17,628,000. The net gain in the country's
stock of gold through net imports since August
1, 1914, is shown in the following table:
Gold imports and exports of the United States from August
1, 19U, to February 16, 1917.
[In thousands of dollars, i.e., 000's omitted.]
Excess of
Imports, j Exports. imports
over
exports.

Total

104,972
31,426
155.793
30,057

-81,719
420.529
529,952
82,410

il,273,420 ! 323,398

Aug. 1 to Dec. 31,1914
Jan. 1 to Dec. 31,1915
Jan. 1 to Dec. 31,1916
Jan. 1 to Feb. 16,1917

951,172

23,253
451,955
685,745
! 112,467

a Excess of exports over imports.

Larger offerings of commercial and bankers' bills at favorable rates
Operations of
account mainly for the conReserve Banks.
siderable increase in investment operations of the Federal
Reserve Banks during the month of February.
Between February 2 and February 23 total
investments held by the Federal Reserve
Banks increased from $169,680,000 to $209,474,000, or 23.5 per cent. Of the total increase,
over 77 per cent is represented by the increase
in the amount of purchased acceptances held
in the banks' portfolios.
Other classes of investments except United
States bonds and notes show moderate gains
153

154

FEDERAL BESEEVE BULLETIN.

during the same period, the increase in discounted paper on hand being due chiefly to
the larger amount of member banks7 collateral
notes held by the Federal Reserve Banks at
the later date.
The following table shows the holdings of
bills for each Federal Reserve Bank, and the
holdings of other investments for all the banks
on February 2 and 23:
Feb. 2,
1917.

Feb. 23,
1917.

Increase.

Boston
$12,709,000 §15,718,000
New York
| 27,072,000 35,450,000
Philadelphia
I 11,845,000 15,434,000
Cleveland
j 6.832,000 12,447,000
Richmond
; 8,023,000 10.391,000
Atlanta, including New Orleans |
branch
! 5,708,000 5,663,000
Chicago
8,239,000 11,887,000
St. Louis
5,521,000 9,002,000
!
9,407,000
Minneapolis
7,484,000
3,342,000 5,459,000
Kansas City.
Dallas
2,469,000 3,658,000
San Francisco.
8,575,000 9,716,000

S3,009,0C0
8,378,000
3,589,000
5,615,000
2,368,000

Total bills
!l07,819,000 144,232,000
Total municipal warrants
12,664,000 17,124,000
Total United States bonds and
notes
49,197,000 48,118,000

36,413,000
4,460,000
a 1,079,000

Total investments on hand. 169,680,000 209,474,000

39,794,000

a 45,000
3,648,000
3,481,000
1,923,000
2,117,000
1,189,000
1,141,000

a Decrease.

As the result of larger investment operations
during the month under review
Reserve
the reserve position of the
Conditions.
greater banks in the principal
eastern cities is less favorable
than at the end of January. Thus the reserve
percentage of the 60 banks forming the New
York Clearing House Association—as indicated
by the ratio of their total reserves to their net
demand deposits—declined from 25 on January
27 to 22.9 on February 10, and February 17.
Similarly the reserve percentage of all trust
companies in Greater New York, as computed
by the State banking department, declined
during the same period from 27.5 to 25.3. The
reserve ratio for the State banks in Greater
New York, representing, however, a relatively
small proportion of the greater city's banking
resources, increased during the same period
from 26.1 to 29.3 per cent.
The average excess reserves of the 41 national
banks and trust companies constituting the




MARCH 1, 1917.

Philadelphia Clearing House Association, from
$44,406,000 for the week ending January 20,
and $48,543,000 for the week ending January
27, declined steadily during the remainder of
the period, reaching the low level at $29,910,000
for the week ending February 17. Like figures
for the associated 10 national banks and the
Old Colony Trust Co., of Boston, all members
of the. Federal Reserve System, show an increase of excess reserves from $35,938,000 for
the week ending January 27 to $38,697,000 for
the week ending February 3 and a drop to
$23,649,000 for the week ending February 10.
The report for the week ending February 17
shows an increase in the total excess reserves
of these banks to $26,110,000.
Pursuant to its policy of conservatism in
the investments of Federal Reserve Banks
announced in the last issue of the Bulletin,
the Board has advised the reserve banks that
it believes in adherence to a policy of distinct
moderation in connection with the purchase
of warrants. Such investments should be
encouraged during periods of great ease of
money and when rediscounts from member
banks and offers of bankers7 acceptances are
not expected to be heavy. At a moment,
however, when indications are that requirements for commercial credit may be heavy and
when Federal Reserve Banks must be prepared
to meet heavy demands upon them by their
member banks, the Board thinks that it is
inadvisable to invest the funds of Federal
reserve banks in warrants.
There have recently been in various parts of
the country slight "flurries,"
Withdrawals by d i r e c t i y t h e outgrowth of anxForeign Deposiety with respect to the internaitors.
tional situation, or of special
local conditions. In various eastern districts
there were at times considerable withdrawals
of deposits from banks in industrial centers
where a large foreign population was concentrated. The situation was promptly met by
the Federal Reserve Banks in every case where
aid was asked for, and the Department of
State relieved the underlying anxiety of foreign

MARCH 1,1017.

FEDERAL RESERVE BULLETIN.

depositors by giving to the press on February
8 the following statement:
It having been reported to him that there is
anxiety in some quarters on the part of persons residing in this country who are the subjects of foreign states lest their bank deposits
or other property should be seized in the event
of war between the United States and a foreign
nation, the President authorizes the statement
that all such fears are entirely unfounded.
The Government of the United States will in
no circumstances take advantage of a state of
war to take possession of property to which international understandings and the recognized
law of the land give it no just claim or title.
It will scrupulously respect all private rights
alike of its own citizens and of tie subjects of
foreign states.
In Seattle, Wash., three small State institutions closed their doors Janua r y 1 8 3 0 a n d 3 1 a s t h e r e s u l t of
> '
a temporary "flurry" which
subjected them to a stress they were not prepared
to meet. There was temporary fear that the
situation in Seattle might become more serious
through the spreading of anxiety concerning
the condition of the local banks. Such fears
were promptly set at rest through the action of
the Federal Reserve Bank of San Francisco in
dispatching a member of its staff to Seattle
and in letting it be known that an abundant
supply of gold, credit, or notes was available
and that the entire resources of the Federal
Reserve Bank were at the disposal of the member banks for the purpose of converting their
eligible assets into means of immediate payment. Events in Seattle have tended to
strengthen the demands of bankers in the
Pacific Northwest for the establishment of a
branch of the Federal Reserve Bank of San
Francisco which should be more immediately
within their reach than the parent office itself
can under existing conditions be. Subsequent
reports from practically all Federal Reserve
districts indicate that such sudden anxiety as
may have been aroused by the development of
unexpected international conditions has been
in very large measure allayed. There appears
to be no general or widespread apprehension in
any part of the country.




155

The Federal Reserve Banks to-day possess a
note-issuing capacity estimated
Reserve Banks'
Note-Issue Power. in round numbers at about
$1,000,000,000. They hold reserve money to the extent of $512,000,000.
Their necessary reserve holdings against deposits are, roughly speaking, $237,000,000.
They have thus $275,000,000 of free gold
which can be used as a 40 per cent reserve
against notes, thereby permitting an issue of
$687,500,000. In addition to this they hold
to-day over $112,000,000 of free commercial
paper available as collateral for the issuance
of Federal Reserve notes over and above the
paper now pledged to protect outstanding
notes. By withdrawing from Federal Reserve
Agents an equal amount of the gold held by the
latter and putting this paper in the place of it,
they would, after deducting the reserves required by law to be held against notes already
outstanding, be able to issue fully $168,000,000
more. Inasmuch as there would still remain
a sum in gold amounting to nearly $191,000,000
in the hands of Federal Reserve Agents, a considerable portion of which could be released
and used under favorable conditions as a basis
for notes, there may safely be added another
$250,000,000 to the sum of $687,500,000 and
$168,000,000 already enumerated, thus raising
the potential issue power of the banks to fully
one thousand million dollars. Figures such as
these have little meaning in and of themselves,
but it may be noted by way of comparison that
during the year 1914, when the modified Aldrich-Vreeland law was called into active operation, the issue of notes to the banks was less
than $400,000,000 for the country as a whole,
while additional issues of clearing-house certificates were less than $150,000,000. In round
numbers we may say that notes available to-day
are double in amount the total of emergency
issues called for at any single time in the past.
The Federal Reserve Board, recognizing the
importance that is being curFacilitating Note rently attached to the question
Distribution.
of note issue, has arranged to
make full use of the provisions
of the Federal Reserve Act which facilitate their

156

FEDERAL KESEBVE BULLETIN.

issue. The original Aldrich-Vreeland law made
provision for the printing and holding in stock of
some $500,000,000 of what was called emergency currency. This was an outgrowth of
previous experience which had emphasized the
difficulty of getting bank notes under the
older system with the speed that was required
in times of emergency, some three weeks or
more being necessary for the printing and
seasoning of the new circulation before it
could be issued. Therefore, when the Federal Reserve Board was first organized, it
directed the printing of $500,000,000 of notes.
Later this amount was increased to some
$700,000,000 because of the large demand for
these notes in exchange for gold. Very recently it has been decided to raise the total note
issue to $900,000,000, this sum, of course,
being in addition to the notes now outstanding. The Bureau of Engraving and Printing
at Washington is working at full speed upon
the new currency, so as to keep well abreast
of any conceivable demand that maybe made.
There is to-day in the vaults at Washington and
in the hands of Federal Reserve Agents and
Federal Reserve Banks an accumulated supply of not less than $450,000,000 in notes.
It has also been found in times past that a
serious difficulty lay in the time required to
transmit notes from Washington. Delays
were inevitable, due to the necessity of sending the notes under guard or with special precaution for their safety, or due to the limitations placed by the forwarding companies
upon the transmission of large consignments
of notes. For many reasons, therefore, it
has been properly felt that every center of
note issue should have its reserve stock readily available at near-by points and in abundant
supply. This was intended by the framers of
the Federal Reserve Act, who foresaw this necessity, and therefore provided that the notes to
be printed might be stored in the subtreasuries or mints nearest the reserve banks at
which they were to be issued, but until recently it has been deemed wise to keep the
great bulk of this supply in Washington.




MARCH 1,

1917.

During the past month the Federal Reserve
Board has given careful attenForeign Exchange
tion to communications reProblems.
ceived from various firms and
corporations engaged in trade with some of the
smaller European countries, particularly with
Spain and Sweden. The facts in the exchange
situation as affecting these countries appear to
be that notwithstanding a heavy balance of
trade in favor of the United States, exchange
quotations were very decidedly against this
country, the dollar possessing a smaller purchasing power over local currency than for
many years past. Investigation has shown
that in some countries a distinct attempt to
discourage the importation of gold is evidently
being made. An unfavorable rate for the purchase of gold at official establishments is fixed,
while in other cases it would appear that transportation and insurance companies had been
requested not to facilitate the movement of
gold toward the countries in question. A similar situation apparently has grown up in certain South American countries, and at sundry
points in the Orient. It would seem to be attributable partly to the desire of the Governments of the countries affected to avoid the
stimulation of exports, the maintenance of a
rate of exchange unfavorable to foreign buyers
being intended to withhold from them encouragement to make further purchases. The situation is also in part the result of the dependence
of these countries upon markets other than
their own, so that their exchange relationships
with the United States can not be studied individually, but only in the light of their general
trade position. While the Federal Reserve
Board has been ready to do all that properly
lay within its power to relieve American traders
engaged in business with these countries by
holding out the facilities of the Federal Reserve
Banks as holders of "earmarked" gold, thus
enabling foreign banking institutions to receive
and hold at Federal Reserve Banks in this
country such payments in gold as they might
be willing to accept, it has not seen any way
by which it could with success bring about the

FEDEEAL KESERVE BULLETIN".

MARCH 1,1917.

157

establishment of better or more favorable quo- appears to have been made. This is the case,
tations, and has so advised those who have pre- for instance, in some portions of New England.
sented the matter to it. The unfavorable con- Retention of the open-account system and the
dition affecting foreign trade with the countries plan of borrowing on single-name notes seems
referred to, is part of the general and anomalous to be a phase of the conditions produced by
situation in international business which pre- abundance of funds and lack of necessity for
vails throughout the world to-day*
rediscounting. Elsewhere progressive firms are
While it is true that in some directions the introducing the use of the trade acceptance, revariations in foreign exchange are extremely gardless of their own immediate necessities and
injurious to the consumer, it is also the case habituating their customers to this form of setthat in other directions these fluctuations tlement. While there has not been a noticeable
temporarily favor him. Thus, for example, increase in the volume of trade acceptances
in connection with olive oil, an important coming to the Federal Reserve Banks, this fact
article of importation from southern Europe, does not indicate that no progress in the matter
it is interesting to note that the importations is being made, but merely that acceptance
of olive oil from Italy amounted, in the years paper is readily discounted and held by both
1914, 1915, and 1916, to $5,552,098, $6,089,646, member and nonmember banks as a desirable
and $6,730,646, respectively, while from Spain element in their portfolios. In bringing about
we imported during the same years $370,053, this condition effective work has been done by
$487,081, and $1,343,660. We imported in various trade associations, but there has ap1915 about ten times as much olive oil from peared of late some tendency to misconception
Italy as we did from Spain, and in 1916 about of the true function of the trade acceptance,
four times as much. Thus, while the unfa- some persons being inclined to represent it as a
vorable quotations of exchange on Spain un- means of settling or adjusting accounts that had
doubtedly affect American buyers of oil inju- proved, or were likely to prove, "slow." In
riously, it is also true that the fact that the some of the literature that has been circulated
lira has fallen from 19.3 cents to 14.6 cents ; with regard to bankers' acceptances, a similar
from June, 1914, to December, 1916—that is, ! suggestion has been made. The Board feels
25 per cent—as against a rise of the Spanish | that too much emphasis can scarcely be placed
exchange for the same period from 18.6 cents | upon the fact that the trade acceptance, in
to 20.9 cents—that is, 11 per cent—would | order to be successful, must be regarded as
redound to the benefit of the consumer in a I representative of the more active and liquid
I of the commercial accounts of the country,
much larger degree.
The past month has seen steady progress in I and at no time should be taken as representthe interest generally felt with ing renewal obligations or accounts of long
Trade Acceptance »
, ° -,
,
standing. Its principal purpose is that of
Situation
reference to trade acceptances, substituting a written obligation for an open
many new inquiries being re- account whose goodness is unmistakable,
ceived both by the Board and the Federal Re- thereby rendering the account available as aserve Banks with reference to the proper form basis for discount. The presence of an element
of acceptance to be employed by prospective of undesirable paper among the trade acceptusers, and reports concerning the more general ances of the country could not help giving
application of acceptances being received from to the trade acceptance a character entirely
time to time. In some parts of the country different from that originally contemplated or
where money has been very abundant during from that which is possessed by it in European
the past year or more, it is reported that little countries.
progress in introducing the trade acceptance




82341—17

2

158

FEDERAL KESEKVE BULLETIN.

Bound Copies of the 1916 Bulletin.
A very small number of bound copies of the
Federal Reserve Bulletin for 1916 are available
for sale at $5 per copy. Except for the numbers contained in these bound volumes, the
supply of the January, 1916, number of the
Bulletin is exhausted. Checks should be made
payable to the Federal Reserve Board, and
orders will be filled by mail.

State Banks Admitted.
The Commonwealth Trust Co., of Boston,
Mass., and the Bank of Montclair, Montclair*
N. J., were admitted to the Federal Reserve
System during the month of February, the
number of State institutions which have now
joined the system being 40.

Loans on United States Bonds or Notes.
That Federal Reserve Banks may be fully
advised as to the methods by which they
may make advances to member banks for the
purpose of enabling them or their customers
to carry or trade in bonds or notes of the
United States, the Governor of the Federal Reserve Board sent out on February 16 the following letter:
The Board deems it advisable that the Federal Reserve Banks should understand clearly
what they may and may not do in the way of
rediscounts or loans based upon United States
Government bonds or notes. For your information, therefore, a memorandum which has
been prepared by counsel and which has been
approved by the Board is sent to you herewith,
as follows:
Section 13 of the Federal Reserve Act provides two methods whereby Federal Reserve
Banks may make advances to their member
banks for the purpose of enabling them or their
customers to carry or trade in bonds or notes of
the United States.
Paragraph 2 of section 13 provides that upon
the indorsement of a member bank a Federal
Reserve Bank may discount notes, drafts, and
bills of exchange arising out of actual commercial transactions, which may or may not be se-




MAIICH 1,

1917.

cured by staple agricultural products or other
goods, wares, or merchandise. The law then
states that "such definition" of eligible paper
shall not include notes, drafts, or bills of exchange drawn for the purpose of " carrying or
trading in stocks, bonds, or other investment
securities except bonds and notes of the Government of the United States." This is equivalent
to an affirmative declaration that a Federal
Reserve Bank may discount a note, draft, or bill
of exchange indorsed by a member bank which
is issued or drawn for the purpose of carrying
or trading in bonds or notes of the United
States. This clause, however, does not permit
of the discount for a member bank of one of
its own bills pa}rable, since the requirement
that the note or bill must be indorsed by a
member bank precludes the possibility of
applying this provision to the discount of anything but customers' paper.
The amendment to section 13, approved September 7, 1916, provides, on the other hand,
that a Federal Reserve Bank may make advances to its member banks on their promissory
notes for a period not exceeding 15 days, provided such notes are secured by certain specified classes of paper or " by a deposit or pledge
of bonds or notes of the United States." It
is evident, therefore, that a member bank may
borrow directly from its Federal Reserve Bank
on the security of Government obligations, but
not for a period longer than 15 days.
Under the provisions of section 14, subsection (b), Federal Reserve Banks are authorized
" to buy and sell at home and abroad bonds and
notes of the United States," and under authority of this section member banks owning Government obligations may properly sell them to
any Federal Reserve Bank desiring to make the
purchase.
SUMMARY.

I. Any member bank which has loaned
money to any of its customers for the purpose of carrying or trading in bonds or notes
of the United States, may rediscount with its
Federal Reserve Bank the bill or note of its
customer, provided, such bill -or note
(a) Has a maturity at the time of discount
of not more than 90 days, exclusive of days of grace; and
(&) Has the indorsement of the member
bank.
Such bill or note, however, need not necessarily be secured and need not be drawn for a
commercial purpose other than for the purpose of carrying or trading in notes or bonds of
the United States.

FEDERAL RESERVE BULLETIN.

MARCH 1,1917.

II. Any member bank which lias itselt
purchased obligations of the United States
may procure advances from its Federal Reserve Bank, for not exceeding 15 days, on its
own promissory note, provided such note is
secured by a deposit or pledge of bonds or
notes of the United States.
III. Any member bank owning bonds or
notes of the United States may, under authority of section 14, subsection (b), sell such
bonds or notes to any Federal Reserve Bank
desiring to make the purchase.
FEBRUARY 16,

1917.

A Texas Banker's Letter.
The following letter, received by the governor of the Federal Reserve Bank of Dallas
and by him forwarded to the Federal Reserve
Board, is given as showing the kind of interest
taken by a country banker in Texas in the
Federal Reserve Act and its operation:
" I have tried to keep in touch with the purposes and objects of the Federal Reserve Act as
well as a busy man could who was not charged
with the administration of any part of it.
There is no question in my mind but that the
system will eventually prove to be one of the
very best bank acts in the world, after it has
been seasoned and amended by years of experience.
"In view of the fact that the present is an
epoch-making period in the history of our
country (and particularly so in a financial
way) I am deeply interested both as a banker
and citizen in making use of every instrument
at command for fortifying ourselves against
the coming evil day.
""It occurs to me that just at this time the
thing of most pressing importance is the getting
under the control of the Federal Reserve Banks
as large a percentage as possible of all the gold
in the United States where it can be advantageously used to protect the Government as well
as the business interests of the country in an
economic way. The recent amendments to the
Federal Reserve Act as recommended by the
Federal Reserve Board would materially aid in
accomplishing this.
4
'Another thing which, in my judgment, w^ould
help to place the country, and particularly
Texas, on a sounder, safer basis, m a business
way, would be the liberal use of both trade and
bankers' acceptances in domestic and foreign




159

transactions. Notwithstanding the information industriously circulated by the Federal
Reserve Banks, very few country merchants
and country bankers have ever given the matter, so far as I am able to judge, any serious
thought or tried to make use of them, and but
few of the wholesalers, jobbers, grain dealers,
oil mills, lumbermen, and manufacturers in the
State have made general use of either. If they
were in general use I believe a broad market for
such bills would soon develop and if country bankers could buy prime bills for, thirty,
sixty, and ninety days7 maturity from their
correspondents in Texas or from brokers in. the
principal Texas cities, a lot of these short maturities would be taken by country banks at
any rate in advance of the usual 2 per cent on
balances. In this way a lot of us fellows could
loan much closer and at the same time always
have paper that could be quickly rediscounted
with our Federal Reserve Bank if some emergency should arise. I understand, of course,
that these bills can be bought at this time in
New York, but I want to see Texas business
men make use of all the good things going and
Texas finance herself in so far as is possible.7'

Statements for the Press.
The following message has been sent by
Hon. W. P. G. Harding, Governor of the Federal
Reserve Board, to the North Carolina State
convention of commercial secretaries, farm
demonstrators, bankers, and other business
men, held at Gastonia, February 5-8, in lieu of
an address which Mr. Harding was to have
delivered at a meeting held at noon February 6:
" I t was with keen regret that I felt obliged
to telegraph you this morning that I could not
go to Gastonia to-night in order to be present at
the most interesting occasion in your city tomorrow. I had looked forward with much pleasure to the privilege of meeting and addressing the
merchants, farmers, and bankers of the Carolmas,
and was particularly anxious to avail myself
of the opportunity of pointing out to them the
very great value, especially in times like the
present, of the Federal Reserve System, which
has enabled the country to withstand without
the slightest financial tremor all of the shocks
and sensations that it has experienced during
the past two years, many of which would
doubtless, under old conditions, have been followed by serious consequences. Our prepared-

160

FEDERAL RESERVE BULLETIN.

ness from a military and naval standpoint is
now engrossing the attention of Congress and
of the Nation, but I wish you would inform the
audience which I expected to address that,
from a financial standpoint, the country is
already fully prepared and is ready to meet any
contingency that is likely to arise, so that there
need be no uneasiness whatsoever on that score.
"I. had desired particularly to say a few
words to the farmers by way of urging them
not to become nervous or alarmed because of
any threatened temporary interference with
ocean transportation. I wished to point out
to them that while in these fateful times, when
it is beyond human power to forecast even the
immediate future, we should remember that
after all the only real wealth comes from the
soil.

selling at $100 a bale and more. The College of Agriculture of the University of Kansas
pointed out at the time these prices were
effective that while cotton had advanced in
price it advanced merely in terms of gold, and
it made an interesting comparison as to its
price in terms of other commodities. It estimated the purchasing power of cotton in an
ordinary year, and on the basis of $100 per
bale, and it demonstrated statistically that
even at $100 per bale the southern cotton
planter who had not planted in a manner to
provide for his necessities in the way of foodstuffs was in a sorry plight, for a bale of cotton
will buy, in an average year, with cotton at
from $50 to $60 per bale—
89 bushels of potatoes, at 70 cents.
750 pounds of lard, at 8 cents.
22 barrels of flour, at $4.50.
375 pounds of bacon, at 16 cents.
6 tons of hay, at $10.
30 pairs of shoes, at $2.
720 yards of cotton cloth.
100 bushels of corn, at 60 cents.

CALL FOR LARGE CROPS.

"A character in Greek mythology is Antseus,
of whom it is said that he could not be overcome in wrestling, for whenever he was brought
to his knees he received renewed strength
from his mother, Earth, and was enabled
thereby to arise in his might and overcome his
adversary. Throughout the world millions of
men have been withdrawn from their ordinary
avocations and arc devoting themselves entirely
to military duties. It seems to me it is clearly
the duty of the farmers of the United States,
in the planting season fast approaching, to
prepare for the largest crops of all kinds that
it is possible to produce. No farmer should
devote himself to a single crop alone, but he
should diversify, with the idea of growing as
far as possible on his own land everything
necessary for the sustenance of his family and
of his domestic animals. Three years have
elapsed since our fertilizers have contained an
adequate supply of potash, and under present
conditions it is hardly probable that an excessive supply of the South/s greatest staple crop,
cotton, can be produced. Virginia, North and
South Carolina, Georgia, and Alabama are now
great cotton-manufacturing States, and their
annual consumption of raw cotton approaches
that of England and is greater than that
of New England and Canada combined. If
the farmers of the South will practice diversification they need have no fear as to the price
of cotton, for any condition which will make
exports of cotton impossible will likewise render
impracticable exports of foodstuffs. It follows, therefore, that if the price of cotton should
decline, the price of cereals, grain, and hay,
will decline also. A few weeks aw cotton was




MARCH 1, 1917.

and this year, at $100 a bale, it will buy
44 bushels of potatoes, at $2.25.
555 pounds of lard, at 18 cents.
10 barrels of flour, at $10.
333 pounds of bacon, at 30 cents.
5 tons of hay, at $20.
20 pairs of shoes, at $5.
666 yards of cotton cloth.
83 bushels of com, at $1.20.
DIVERSIFICATION.
1

' The subject of nutrition has been reduced to
a science, and the importance of a well-balanced
diet is now well understood. Some foods are
rich in nitrates, others in carbohydrates, and
others in proteins. No family can keep itself
healthy ii it lives entirely on meat or entirely on
potatoes, or entirely on peas, or altogether on
eggs and milk. A scientific combination of
these foods is essential for the best results. So
likewise with farming. No State can prosper
if its farmers devote their energies to the cultivation of a single crop, be it cotton or be it
grain or hay, and to obtain the best results
diversification is necessary. The farmer should
be impressed with the necessity of rotation of
crops in order that their soil may not be impoverished, and if they plant several products
they are not affected by the price of any one of
them. It is not possible to advise a farmer intelligently as to the amount of cotton he should
plant. In some cases live acres to the plow
would seem best, and there may be other instances where eight or ten acres to the plow

MARCH 1, 1017

FI-iPKRAL RESERVE BULLETIN.

161

greater than the present aggregate resources
of all national banks in the central i^eserye
cities of New York, Chicago, and St. Louis,
which aggregate $3,946,000,000.
The following are the principal changes
shown in the condition of national banks
December 27, 1916, as compared with the previous call of November 17, 1916, and the
corresponding call a year ago.
Resources, 15,333 million dollars, a decrease
of 1S6 million as compared with November 17,
1916; and as compared with December 31,
1915, an increase of 1,865 million dollars.
Loans and discounts, 8,340 million dollars,
a decrease from November 17, 1916, of 5 million and an increase over December 31, 1915,
FEBRUARY 6, 1917.
of 982 million.
Cash on hand and due from Federal Reserve
Banks, $1,493,443,000, an increase over NovemSTATEMENT BY THE OFFICE OF THE COMPTROL- ber 17, 1916, of $55,928,000, and over December 31, 1915, of $281,579,000.
LER OF THE CURRENCY.
Due from banks and bankers other than
The compilation of national bank returns as Federal Reserve Banks, December 27, 1916,
of December 27, 1916, just completed, show $1,844,702,000, a decrease from November 17,
total resources of 15,333 million dollars, a 1916, of $174,064,000, and an increase over
reduction of 186 million dollars from the call December 31, 1915, of $311,389,000.
of November 17, 1916, but this decline is
Securities other than United States bonds,
wholly due to a shrinkage in the resources of 1,725 million dollars, an increase over Novemthe national banks in the central reserve and ber 17, 1916, of 15 million, and over December
other reserve cities, for the country banks show 31, 1915, of 350 million.
an aggregate growth in resources as compared
Deposits, December 27, 1916, $12,264,662,with the November call of $79,(300,000, their 000, a decrease from November 17, 1916, of
resources December 27, 1916, being greater $223,227,000, but an increase from December
than on any previous call.
31, 1915, of $1,884,971,000.
The resources of the country banks on
As compared with the November 17, 1916,
December 27,1916, amounted to approximately statement, time deposits increased December
7 billion dollars, showing that the country 27, 1916, 38 million, while balances due to
banks now hold more than the total resources banks and bankers decreased 87 million, and
of all the national banks, including the vast demand deposits shrunk 174 million. Of the
accumulations in all the reserve and central 1,884 million dollars increase shown since Dereserve cities, plus the country banks, as late cember 31,1915, 437 million were time deposits,
as the year 1904.
924 million demand deposits, and 523 millions
Since May 1, 1916, the country banks have in amounts due banks and bankers.
increased their resources 759 million dollars,
Surplus and profits December 27, 1916, 1,106
or 12 per cent. In the same period the re- million, an increase since November 17, 1916,
soxirccs of national banks in the central reserve of 16 million, and since December 31, 1915, of
cities declined 77 million dollars, or 2 per cent, | 87 million.
and the resources of the national banks in other ! The amount of acceptances based on imports
reserve cities increased 455 million dollars, or and exports was 100 million dollars December
11 per cent.
27, 1917, an increase since November 17, 1916,
These figures indicate that the tendency, of $2,111,000.
noted for some time past, toward a wider difCash letters of credit, 35 million, an increase
fusion of the banking resources of the country since November 17, 1916, of $3,637,000.
continues.
Bills payable and rediscounts, December 27,
The figures show that there has been added 1916, 89 million, an increase since November
to the resources of the national banks since 17, 1916, of 16 million, but a reduction since
January 13, 1914, $4,037,000,000, an amount December 31, 1915, of 8 million.

may be planted; but in no case, particularly in
times like the present, should the farmer entrust all his eggs to one basket and risk his solvency upon a single crop.
" I n my opinion, the greatest service that the
farmers of the South can render their section,
their country, and the world in general is to coax
from the soil during the year 1917 as great an
abundance as possible of crops of all kinds.
"Please say to the members of the Chamber
of Commerce of Gastonia, and to the bankers of
your city, that I highly appreciate their kind
invitation, and express to them again my deep
regret at being obliged, at the last moment, to
forego the pleasure of meeting them.'7




162

FEDERAL RESERVE BULLETIN.

MARCH 1,

1917.

Changes in resources between calls by States I Reserve district were accustomed to the pracand reserve cities: Between the calls of Novem- | tice of direct sending of checks and the coverber 17, 1916, and December 27, 1916, the | ing of same by remittance upon receipt. When
national banks in New York City reduced their
resources 200 million dollars, in Chicago 15 j the foreign department of the Boston Clearing
million, and in St. Louis 5 million. The reduc- House Association was established, a considtion for the same period in Boston was 15 mil- erable percentage of the country banks were
lion, Philadelphia 22 million, and San Francisco making a charge when remitting, but by dili7 million.
gent and persistent efforts these exchange
The largest increase for reserve cities was charges were gradually eliminated in the case
shown at Louisville, 5 million. Des Moines
and Salt Lake City increased about 4 million of most banks, so that in July, 1916, there
each. The increases in other reserve cities were in New England 632 banks outside of
were for smaller amounts.
the Boston Clearing House, 391 of which were
Among the country banks Pennsylvania leads national banks and 241 State banks and trust
with an increase of 20 million, followed by Iowa
with 12 million and Illinois with 10 million. companies, and of these all remitted at par
The country banks in Ohio and New Jersey to the Boston Clearing House except 54 naincreased about 8 million dollars each, Kansas tional banks and 35 State banks and trust
7 million; Connecticut, West Virginia, and companies.
Florida about 5 million each; Virginia, KenRESERVE COLLECTION PLAN.
tucky, and California about 4 million each, and
Louisiana, Indiana, and Wisconsin 3 million
The check collection plan which the Federal
each.
Reserve Bank proposed to put into operation
The States in which the banks showed a
decline between the two calls were New York July 15, 1916, was in most respects so simi10 million dollars, Texas 8 million, Georgia 7 lar to that in successful operation in the
million, and Oklahoma and North Dakota Boston Clearing House that negotiations
about 3 million each.
were entered upon with the Clearing House
FEBRUARY 9, 1917.
Association looking to taking over the operations of their foreign department. The Boston Clearing House Association has from the
Clearing and Collection at Boston.
first shown the greatest courtesy and interest
Clearing and collection at Boston, because in cooperating with the Federal Reserve Bank,
of conditions more favorable than those in and an agreement was entered into by which,
other Federal Reserve districts, has been of upon the date of the beginning of check collecmore than ordinary interest as a record of tion operations in the Reserve Bank, the Bosprogress. The Boston Clearing House was ton Clearing House should discontinue the optaken over by the Federal Reserve Bank on eration of its foreign department, the Federal
July 15, 1916. The cost of collection for the Reserve Bank agreeing to take over the staff
last month was 0.0065 cent per item. There of the Boston Clearing House and to assume the
follows a report prepared by Alfred L. Aiken, lease of the rooms occupied by it, with the regovernor of the Boston bank, for the Federal sult that, so far as the relations with the banks
Reserve Board, which summarizes the clearing in this district outside of Boston were concerned, there was no break in the already existand collection operations:
ing methods, except in some minor details, and
In 1898 the Boston Clearing House Association organized its so-called foreign department, the Federal Reserve Bank was immediately
and practically ever since that time the mem- provided with suitable rooms for the carrying
bers of the Boston Clearing House Association on of its check collection operations and with
have been collecting checks drawn upon all the a thoroughly trained staff.
Upon the beginning of the check collection
New England banks through that agency, with
the result that all the banks in this Federal operations through the Federal Reserve Bank,




MAECH 1,1917.

163

FEDERAL RESERVE BULLETIN".

54 national banks that had previously declined previously handled by the Boston Clearing
to remit at par automatically went on the par House Association, as is shown by the following
list, and within a few days after that date all table. In this table the figures from July 15,
the nonmember banks and trust companies had 1916, to August 31, 1916, are not included, as
also agreed to remit to the Federal Reserve they were not analyzed by months, and covered
Bank at Boston at par upon receipt for checks a period of about six and a half weeks:
sent them drawn upon themselves. The nonClearings and collections.
par banks in some of the larger centers were
[000 omitted from all figures.]
advised that if they preferred such an arrangement, the Federal Reserve Bank would make
New
Checks on Checks onoutside
England
arrangements to present checks drawn upon
Boston.
Boston.
them at their respective counters for payment
in cash, but they all agreed to remit and forego
Amount. Number. Amount.
their exchange charges. The result has been
755
1916
$65,592
$67,668
that practically ever since the opening of our Sept.,1916
822
86,701
Oct..
76,593
813
103,417
Nov., 1916
75,921
check collection department the Federal Re- D e c , 1916
102,851
864
78,962
94,411
885
82,347
Jan., 1917
serve Bank of Boston has been able to collect
at par checks drawn upon all banks both memChecks on other districts.
ber and nonmember within this Federal Reserve district.
Sent by Federal
Sent direct.
Total.
Reserve Banks.

CHANGES IN PRACTICE.
No.

Amount.

No.

Amount.

No.

Amount.

It had been the practice of the Boston Clear41
14
§27,712
27 S18.705
$9,007
1916....
ing House Association to make a charge based Sept., 1916
19
56
12,378
35,898
37
23,520
Oct.,
27
13,015
60
35,643
33
22,628
1916....
on the volume in dollars of business handled. Nov., 1916
36
14,438
75
37,306
39
22,868
Dec,
32
13,790
73
33,715
41
19,925
The change from the per thousand basis to the Jan., 1917
per item basis caused some criticism at first,
but in most instances the change has been
The steady increase in the volume of New
looked upon favorably and is considered a England items handled by this bank, and also
more equitable basis of distribution of the ex- in the volume of collections upon New England
pense than the old basis upon the volume in points outside of Boston handled by the forthousands of dollars.
eign department of the Boston Clearing House
Soon after the Federal Reserve Bank of Association during the preceding year in. the
Boston took over the foreign department of months corresponding to those for which the
the Boston Clearing House, the Boston Clearing figures are given in the foregoing table, are
House Association changed its rules, and put worthy of note, as shown hereunder.
upon the discretionary list all points in this
foreign department
Federal Reserve district that could be collected New Englandthechecks collected through theAssociation.
of
Boston Clearing House
at par through the Federal Reserve Bank of
$35,900,578
Boston, with the result that ever since that September, 1915
39,749,785
date a considerable volume of checks that were October, 1915
November, 1915
40,548,772
previously collected through various collection December, 1915
39,000,679
centers outside of New England have come to January, 1916
40, 303,292
New England banks, and have been collected
COOPERATION OF BANKS.
by them through the Federal Reserve Bank.
The volume of collections through the Fed- The difficulties that we have encountered
eral Reserve Bank has shown a marked and have not been many, as most of the banks in
steady increase as compared with the volume this district, both member and nonmember,




164

FEDERAL EESERVE BULLETIN.

have been disposed to cooperate with us in
every way possible, though we should not have
received the increasing volume of business had
not the banks availing themselves of our facilities been satisfied that this method of collection
was more economical and satisfactory for them
than any other method, and the increasing
volume is the best evidence of the growing
favor of the method that we are cany ing on.
The principal obstacle that we have to contend with arises from the fact that while we
receive for collection practically all the checks
drawn upon member banks in this district that
circulate out of the immediate neighborhood of
the bank, these banks find it difficult to provide
an offset, because of the fact that nonmember
banks in other districts have not been willing
to remit for their checks at par to the Federal
Reserve Banks in their district. When it is
possible to collect all checks, both member and
nonmember, through the Federal Reserve
Banks, I look for a very rapid increase in the
volume that will come through this Federal
Reserve Bank.
The handling cost of our business is approximately 0.9 cent per item, although with the
exception of one month it has been slightly
less than this amount. We are confident that
with our increasing volume it is a question of
a comparatively short time when we shall be
able to reduce the per item charge.
MEMBERSHIP 1ST CLEARING HOUSE.

Upon the opening of the Federal Reserve
Banks in November, 1914, the Federal Reserve
Bank of Boston was admitted to limited membership in the Clearing House Association, and
immediately thereafter the Boston Clearing
House Association agreed to settle daily balances at the clearing house by checks upon the
Federal Reserve Bank, which was easily done
because of the fact that all the clearing house
members were members of the Federal Reserve
System. Further than this, at the present
time all of the operations of the Boston Clearing
House are carried on on the premises and by
the staff of the Federal Reserve Bank. The
necessity of handling large amounts of money




MARCH 1,

1917.

in the settlement of balances has been entirely
done away with, and the cost of cit}^ clearings
has been greatly reduced. Our local situation
is apparently giving satisfaction to all the banks
that are parties to it, and for this satisfactory
state of affairs, the Federal Reserve Bank of
Boston is greatly indebted to the interest and
hearty cooperation of the Boston Clearing
House Association.
FEBRUARY 20,

1917.

Banks as Insurance Agents.
Regulations under which national banks may
act as insurance agents and as brokers or
agents in making or procuring loans on real
estate under the amendment covering such
action passed by Congress in 1916 have been
issued from the office of the Comptroller of the
Currency. They are given below for the information of Federal Reserve and member banks:
To all National Banks:
An amendment to the Federal Reserve Act approved
September 7, 1916, provides:
"That in addition to the powers now vested by law in
national-banking associations organized under the laws of
the United States, any such association located and doing
business in any place, the population of which does not
exceed five thousand inhabitants, as shown by the last
preceding decennial census, may, under such rules and
regulations as may be prescribed by the Comptroller of the
Currency, act as the agent for any fire, life, or other insurance company authorized by the authorities of the State
in which said bank is located to do business in said State,
j by soliciting and selling insurance and collecting pre! miums on policies issued by such company; and may
receive for services so rendered such fees or commissions
as may be agreed upon between the said association and
the insurance company for which it may act as agent; and
may also act as the broker or agent for others in making or
procuring loans on real estate located within one hundred
miles of the place in which said bank may be located,
receiving for such services a reasonable fee or commission:
Provided, hovjever, That no such bank shall in any case
guarantee either the principal or interest of any such loans
or assume or guarantee the payment of any premium on
insurance policies issued through its agency by its principal: And provided further, That the bank shall not
guarantee the truth of any statement made by an assured
in filing his application for insurance."
All national banks acting or proposing to act under the
provisions of the foregoing law are requested to observe
strictly the following regulations:

MARCH 1,1917.

FEDERAL RESERVE BULLETIN.

WHERE A NATIONAL BANK ACTS AS INSURANCE AGENT.

165

bank to act as its agent, setting forth that the bank does
not guarantee the payment of any premium on insurance
policies issued through its agency by its principal, and
stating that the bank is not to be held responsible for the
truth of any statement made by an assured in filing his
application for insurance.
(d) Copies of all reports made by the agent bank to each
insurance company which it represents.
4. The bank will be required to keep a record as to each
company for which it acts as agent, showing: For fire insurance: The amount of each policy, the rate and premium,
date of commencement, term, and date of expiration, as
well as a description of property insured, with name of
assured, and to whom loss is payable. As to life insurance:
Amount and date of policy, with premium, and a statement
as to under what form the insurance is written, giving also
name of assured and beneficiary. As to any and all other
forms of insurance: The fullest possible particulars as to
amounts, dates, rates, premiums, and what is insured by
the policy, and of collection of all premiums collected for
account of the company, refunds made, the proportion of
premium credited to the profits of the bank under its
agreement with the company, the proportion due the company, the amounts and dates of all remittances made to the
insurance company on account of premiums collected, and
the balance, if any, due from the bank to the insurance
company.
5. The bank will be required to carry on its general
ledger an account which will, at all times, show the amount
due to insurance companies for which it is acting as agent,
on account of premiums collected but not remitted, and
this liability must be shown in reports of condition and in
the published statements of the bank under the heading
"Other liabilities—on account of insurance premiums collected and not remitted," unless specifically provided for
in the report.
6. The bank should also keep such records as may be
required by each insurance company in the manner and
under the forms prescribed by the various companies; all
of which should be available for inspection by the examiner
on request.
7. The agent bank must not assume any responsibility
or liability for either the adjustment, settlement, or payment of losses under any policy issued by or through its
agency.
8. The records of all profits derived from the insurance
agency should be carried in a separate account on the
books of the bank, and the records should be so kept as
to enable the examiner readily to trace to the source all
items of profit derived in this connection.

It will be seen from the above that in order to avail
itself of the provisions of this act relative to acting as agent
for an insurance company:
(a) The bank must be located in a place the population of which does not exceed 5,000 as shown by the las*
preceding decennial census.
(b) The insurance company for which the bank acts as
agent must have been authorized by the authorities of
the State in which the bank is located to do business in
that State.
(c) The activities of the bank as such agent must be
restricted to the soliciting and selling of insurance and
the collection of premiums on policies issued by the
insurance company.
(d) The bank may receive for services so rendered such
lawful fees or commissions as may be agreed upon between
the bank and the insurance company for which it may act
as agent.
(e) The bank is prohibited from assuming or guaranteeing the payment of any premium on insurance policies
issued, through its agency, by its principal.
(/) The bank is prohibited from guaranteeing the truth
of any statement made by an assured in filing his application for insurance.
(g) The powers conferred are to be exercised under
such regulations as may be prescribed by the Comptroller
of the Currency.
In pursuance of the foregoing amendment the following
regulations are hereby prescribed for national banks
which may undertake to act as agents for insurance
companies:
1. Each contract of agency must be formally accepted
by the board of directors of the agent bank by a resolution spread upon the minutes in the following form:
"Be it resolved that the contract of agency entered
into on
191.. between the
insurance company and the
national bank of
, by
president (or vice president) and
cashier, a copy
of which is on file in this bank, is hereby ratified and
approved."
2. A certified copy of such resolution, attested by the
president or vice president and by the cashier and by a
majority of the directors of the bank, must be forwarded
to this office on forms to be furnished by this office.
3. There should be on file in the bank, available for
inspection by the examiner, the following documents:
(a) An authoritative statement showing the population
of the town according to the last preceding decennial
census.
(b) A proper certificate from the authorities of the State WHERE A NATIONAL BANK ACTS AS BROKER OR AGENT IN
in which the bank is located showing as to each insurance
MAKING OR PROCURING LOANS ON REAL ESTATE.
company for which the bank is acting as agent that such
In order to avail itself of this privilege:
company has received authority from the said State to
(a) The bank must be located in a place the population
transact business in that State.
(c) A proper certificate or other writing of each insur- of which does not exceed 5,000 as shown by the last preance company for which the bank acts authorizing the ceding decennial census.
82341—17
3




166

FEDERAL RESERVE BULLETIN.

(6) The real estate by which the loans negotiated are
secured must be located within 100 miles of the place in
which the negotiating bank is located.
(c) The bank may receive for such services a reasonable
fee or commission.
(d) The bank shall in no case guarantee either the principal or interest of any such loans.
(e) The powers conferred are to be exercised under such
regulations as may be prescribed by the Comptroller of
the Currency.
The following regulations are prescribed for national
banks which may undertake to act as agents or brokers
in making or procuring loans on real estate.
1. A bank intending to avail itself of this provision of
the law must adopt by its board of directors a resolution
in the following form:
"Be it resolved, That the officers of the
National
Bank of —
are hereby authorized and empowered on
behalf of this bank, as broker or agent, to accept from
customers of this bank deposits of funds to be invested
for account of said customers, in loans secured by real
estate, and to procure, as broker or agent, for customers
of this bank loans which shall be secured by real estate,
under the provisions of the act approved September 7,
1916: Provided, That the investment of such funds as
stated, and all such procuring of loans or lending of funds
for clients shall be undertaken only under written instructions from the customer for whom this bank, through its
officers, may act as broker or agent," such written instructions in each case to be first delivered to an officer of this
bank. Such instructions shall, in all cases, state clearly
that the bank in acting as broker or agent in no way
guarantees payment of either the principal or interest of
any loan so negotiated."
2. A certified copy of such resolution, attested by the
president or vice president and cashier and by a majority
of the directors of the bank, must be forwarded to this
office, on forms to be furnished by this office.
3. No bank shall charge more than one commission or
brokerage on the making of any loan; that is to say, if it
shall charge a brokerage or commission to the party borrowing the money, it shall not charge a brokerage or commissjon to the party for whom money is so loaned, and
vice versa.
4. Each bank acting under this provision of law will be
required to keep a record showing as to each loan negotiated by the bank—
(a) The name and address of the principal for whom
the bank is acting,
(6) Date of written instructions from the principal,
(c) Name and address of maker of note,
(d) Date of note,
(e) Date of maturity of note,
(/) Brief description of property securing note, showing
location and distance from place in which bank is located,
(g) Character of improvements, etc.,
(h) Name and address of party to whom note was trans,
f erred or delivered by the bank,




MARCH 1,

1917.

(i) Date of such transfer or delivery,
(j) Amount of principal of note,
(£) Kate of interest or discount,
(I) Rate of commission or brokerage charged by bank
for acting as broker or agent, and
(m) Amount of such commission or brokerage, and
whether said commission was paid by borrower of the
money or by the party for whom it was loaned.
5. A book should be kept showing the date on which
each mortgage or deed of trust negotiated by the bank has
been admitted to record, the court in which the same is
recorded, and the recordation fees paid in each case.
6. The records of all profits derived from acting as broker
or agent in negotiating loans on real estate should be carried in a separate account on the books of the bank, and
the records should be so kept as to enable the examiner
readily to trace to the source all items of profit derived in
this connection.
7. Deposits of money received by the bank as broker or
agent to be invested in loans secured by real estate as prescribed by law, must be treated as trust funds and kept
separate and apart from the other assets of the bank. Such
funds must in no case be permitted to pass from the possession of the bank until the loan for which they are to be
paid out is formally accepted by or in behalf of the party
for whose account negotiated;
8. No bank shall advance or use its own funds in connection with real estate loans negotiated as broker or agent.
9. No loans secured by real estate, which the bank has
negotiated as broker or agent, should become a part of the
assets of the bank even temporarily, unless such loans conform to the provisions of section 24 of the Federal Reserve
Act, as amended.
10. There should be available in the bank for inspection
by the national-bank examiner—
(a) An authoritative statement showing the population
of the town according to the last preceding decennial
census.
(6) All records pertaining to the negotiation of real
estate loans as broker or agent.
National banks acting as broker for the placing of loans
should prepare blank forms of application to be executed
by applicants for loans. These applications should show—
(a) Location of property.
(6) Acreage.
(c) Assessed valuation.
(d) Estimated present value.
(e) Brief descriptions of buildings thereon and estimated
I value of them.
(/) Whether buildings are insured, and, if so, for what
amounts and in what companies.
(g) Whether property is already encumbered, and, if so,
for what amount.
(h) If property is farm property applicant should state
whether or not the dwelling is provided with sanitary
arrangements approved by the local board of health, and,
if not. what, sanitary arrangements there are.

167

FEDERAL RESERVE BULLETIN.

.MARCH 3,1917.

At the foot of this application should be printed below
the signature of the applicant a statement to the effect that
"The statements in the foregoing application have been
submitted to this bank by the applicant for the loan, but
this bank does not undertake to guarantee the correctness
of any of the statements made by the applicant."
If any applicant for a loan makes statements in hie application which any officers of the bank .before whom the
application may come may have reason to think are not
correct, the attention of the applicant should be called to
the possible discrepancy.

Fiduciary Powers,

Banks.

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

13
$575,000
25
3,030,000

Aggregate number of new charters and
banks increasing capital._.-.
38
With aggregate of new capital authorized
3,605,000
Number of banks liquidating (other than
those consolidating with other national
banks)
Capital of same .bank
Number of banks reducing capital
Reduction of capital.

5
557,500
2

The applications of the following banks for Total number of banks going into liquidapermission to act under section 11-k of the tion or reducing capital (other than those 7
consolidating with other national banks).
Federal Reserve Act have been approved since Aggregate capital reduction
the issue of the February Bulletin:

213,000

770,500

The foregoing statement shows the aggregate of
increased capital for the period of the banks
embraced in statement was
3,605,000
Registrar of stocks and bonds:
Against this there was a reduction of capital
Mechanics and Metals.National Bank, New York City.
owing to liquidations (other than for conDISTRICT NO. 3.
solidation with other national banks) and reductions of capital of. .->,
770,500
Trustee, executor, administrator, and registrar of stocks
and bonds:
Net increase
2,834,500
National State Bank. Camden, N. J.
Second National Bank, Wilkes-Barre, Pa.
DISTRICT No. 2.

DISTRICT No. 9.

Trustee, executor, administrator, and registrar of stocks
and bonds:
First National Bank, Arlington, S. Dak.
Minnehaha National Bank, Sioux Falls, S. Dak.
DISTRICT NO. 10.

Trustee, executor, administrator, and registrar of stocks
and bonds:
First National Bank, Ord, Nebr.
DISTRICT NO. 12.

Registrar of stocks and bonds:
First National Bank, Marshfield, Oreg.

New National Bank Charters.

The Comptroller of the Currency reports the
following increases and reductions in the number of national* banks and the capital of
national banks during the period from January
20, 1917, to February 23, 1917, inclusive:




Commercial Failures in January,

Business reverses in the United States during January were more numerous and involved
a larger indebtedness than in December, 1916,
yet the increase in both respects was less than
in nearly a decade. Commercial defaults last
month, as reported to R. G. Dun & Co., numbered 1,540, with liabilities of $18,283,120,
against 1,252 for §16,745,274 in December,
2,009 last year for $25,863,286, and 2,848 for
$49,640,575 in January, 1915, the maximum
point on record. The number of January
failures was the smallest far the period since
1910, while the sum of money owed was the
smallest of any year back to 1909.
Separation of statistics hy Federal Reserve
districts discloses fewer insolvencies than last
year in every instance, with the single exception of the tenth district where there was a
; slight increase. Numerically, the improve--

168

FEDERAL RESERVE. BULLETIN.

ment was especially marked in the eleventh,
eighth, fifth, and third districts, while the
liabilities, apart from the'first and third districts, were smaller in every case, and notably
so in the fifth, ninth, eleventh, sixth, and second districts.
The number of commercial failures and liabilities in each district for the month of January,
this year and last, are compared below:
Jan., 1917.

Districts.

Jan., 1916.

hNumber. Liabilities.
!

Number. Liabilities. I

176 82,201,296
241 4,446,073
77 1,702,861
129
990,378
104
549,458
161 1,486,533

No.l
No. 2
No. 3
No. 4
No. 5
No. 6
No. 7
No. 8
No. 9
No. 10
No.U
No. 12

. . .

181
68
54
73

58
213

United States

1,540

2,954,773
1,422,831
447,077
310,284
498,256
•1*, 273,300
18,283,120

191
329
120
163
171
186
209
141
66
75
129

81,645,500
8,810,900
988,240
1,442,950
1,427,400
2,490,200
2,966,600
1,475,000
988,400
350,900
1,292,696
1,984,500

2,009

25,863,286

i

Experience with a Reserve Bank Agency.

During the past summer the Federal Reserve
Bank of St. Louis established an office at
Memphis, Tenn., for the purpose of better
meeting the convenience of the member banks
of district No. 8 during the crop-moving season.
The following report of the experience with
the office at Memphis, prepared by Chairman
Wm. McC. Martin, sets forth the details with
regard to the operation of the Memphis office,
and furnishes the essential forms which were
found necessary there. This experience is
likely to prove of distinct help should an
office of the same character be established by
some other Federal Eeserve Bank in the future.
Mr. Martin reviews the Memphis experience as
follows:
POLICY DURING COTTON MOVEMENT.

In the cotton movement period during the
first year of this bank's existence, it did everything in its power to enable member banks to
avail themselves of the rediscount privileges
when they were needed. We made especial
efforts to help out those banks that had to




MARCH 1,1917.

bear the burden of the cotton movement. We
were of considerable assistance to some banks
in Arkansas and Mississippi, but the Memphis
banks, while getting some aid from us through
rediscounts, did not exercise their full privileges. During the months of September,
October, and November, 1915, Memphis member banks rediscounted considerable paper with
us, but practically none of it was secured by
cotton collateral. The reason of this was that
the board of directors of this bank did not feel
that it was sound banking to rediscount a
cotton loan and allow the warehouse receipts
to remain in the hands of the borrowing bank.
The Memphis banks advised us that this was
the custom of the New York and Boston banks.
We, of course, thoroughly understood that it
was impracticable for a bank to rediscount a
loan secured by cotton warehouse receipts and
send the receipts out of the locality, making it
difficult to allow substitutions. We, therefore,
suggested that when one bank rediscounted
with us a loan secured by cotton warehouse
receipts, it turn over the receipts to another
designated member bank, which would hold
them under a trust agreement with us and
permit the necessary substitutions. This
method was objected to on the ground that the
banks were all competitors, and no bank cared
to have a competitor, through holding cotton
warehouse receipts, get information in regard
to its customers. The same objection was
made to having a State bank or trust company
hold the collateral. This bank felt that, while
it was not necessary for the cotton warehouse
receipt collateral to be in its hands in St. Louis,
it should be either in its possession or in the
possession of some properly constituted agent
who would hold the collateral on its behalf.
Those banks in Arkansas and Mississippi that
we helped with their cotton loans during 1915
agreed to an arrangement whereby the cotton
collateral was held in those localities where
there were two or more member banks, by
another member bank and in those localities
where there was only one member bank by
some State institution in the same town that

MARCH 1,1917.

the Federal Reserve Bank found satisfactory.
Such an arrangement, however, was not satisfactory in Memphis.
This was also the situation at the beginning
of the cotton movement in 1916. Our board
of directors insisted that the borrowing bank
should not retain custod}^ of the collateral to
loans rediscounted by it, and the Memphis
bankers did not consider it wise for them to
hold each other's cotton receipts.
MEMPHIS AGENCY PLAN.

However, the Memphis banks were anxious
to use the rediscount facilities of this bank, and
as the Federal Reserve Bank always wishes to
be of help to member banks when they desire it,
a plan was worked out which was satisfactory
to both the Memphis banks and this bank. We
sent one of our own men from this office to open
an agency at Memphis at the request of, and
for the purpose of aiding, member banks in
handling the cotton situation. On September
25, 1916, Mr. T. C. Tupper, deputy Federal
Reserve Agent and manager of our credit department, went to Memphis and rented an office
and the necessary safe deposit space. Only a
small office was needed with room for two desks,
and this was found on the fourteenth floor of
the Central-State Bank Building. Two large
boxes in one of the conveniently-located safe
deposit vaults were all the other equipment
necessary. On October 11, 1916, Mr. W. H.
Glasgow, assistant to the Federal Reserve
Agent, relieved Mr. Tupper and remained in
charge of the office until it was closed on January 20, 1917.
CONTRACT COVERING SAFE DEPOSIT BOXES.

Such safe deposit boxes as were needed were
rented in the name of the Federal Reserve Bank
of St. Louis, and instructions given by the bank
to the effect that access was to be allowed to
our representative only when accompanied
by one of certain designated persons representing the bonding company which was on
our employee's bond. The boxes were to be
both opened and closed in the presence of these
two persons.




169

FEDERAL RESERVE BULLETIN.

REPRESENTATIVE OF THE BONDING COMPANY.

So many substitutions of cotton warehouse
receipts were necessary that it was found convenient to have the bonding company designate
a man to represent it, who occupied one of the
desks in our Memphis office and gave his entire
time to this business. While this man was
entirely subject to the orders of the bonding
company, this bank paid his salary.
METHOD OF OBTAINING REDISCOUNTS.

When a bank desired to rediscount paper
with the Federal Reserve Bank of St. Louis, it
called up our representative, who promptly
went to the bank. The bank then told him
that it wanted to rediscount, say, $100,000 of
paper secured by cotton warehouse receipts,
and frequently discussed with him the basis
on which the collateral would be acceptable.
He, of course, had received instructions from
this bank as to the amount per bale at which
we would accept the cotton as collateral.
Being on the ground, he knew the general
standing of the factors and buyers and the
character of cotton they handled as a rule.
The bank then sent over to our Memphis office
warehouse receipts covering the cotton proposed to be pledged. There they were counted,
and our representative delivered a receipt to
the bank in the following form:
No. 101.

MEMPHIS, TENN.,
[Date.]

Received of the National Bank of Prosperity Memphis
Terminal Corporation Warehouse Receipts for 1,538 bales
of cotton pledged as security for loan to John Doe & Co.
for One Hundred Thousand Dollars.
Substitution of receipts for cotton of like value to be
made on order of above-named bank. Receipts to be surrendered on payment of loan and delivery of this receipt
to undersigned.
FEDERAL RESERVE BANK OF ST. LOUIS.

By

.

The bank then filled out a regular application for a rediscount with the Federal Reserve
Bank of St. Louis, properly indorsed the note,
and attached to it the above-described receipt
signed by bur representative, and forwarded
the loan to this bank for consideration. If

170

FEDERAL RESERVE BULLETIN.

MARCH 1, 1917.

the loan was accepted, its proceeds were receipts held by you as collateral on paper made by them
credited to the Memphis bank, and the col- and rediscounted with you by us.
This authorization to remain in force and effect until
lateral was in the hands of our representative you are advised by us in writing to the contrary, and
in such shape that substitutions could be easily j receipts of acknowledgment from you of such advice.
Yours, truly,
made. If for any reason the note should be j
NATIONAL BANK,
declined, it was returned to the bank and the i
By
, Cashier.
bank in turn presented the receipt attached to j
our representative, who took up the receipt j
MODE OF MAKING SUBSTITUTIONS.
and redelivered the collateral.
j
i
By the above plan the cotton buyer was saved
RECEIPTS FOR COLLATERAL.
the necessity of going to the bank that originally
In order that this bank might be fully ad-i granted the loan each time that he wanted to
vised at the close of each day's business, our make a substitution. Instead, he went straight
representative wrote a letter covering the to our office in Memphis. Our representative
and the representative ot the bonding company
receipts for collateral he had issued during the
then accompanied the representative of the
day. The form of this letter was as follows:
borrower to the safe-deposit vaults. There,
MEMPHIS, TENN.,
.
in the presence of all three, the substitutions of
[Date.]
i
new receipts for those desired occurred and the
FEDERAL RESERVE BANK,
j
proper entries made. This system worked
. St. Louis, Mo.
GENTLEMEN : I have to-day issued the following receipts smoothly and satisfactorily, and both the
to the National Bank of Prosperity:
member banks and the Federal Reserve Bank
Receipt No. 101, for 1,538 bales, $100,000, loan John were fully protected.
Doe & Co.;
As above stated, this agency was opened on
Receipt No. 102, for 100 bales, $6,000, loan Smith & Co. ;
Receipt No. 103, for 215 bales, $15,000, loan John Jones.; September 25, 1916, and closed on January 20,
Receipt No. 104, for 700 bales, $42,000, loan Brown & 1917.
During that period of time we redisCo.—2,553 bales, securing $163,000.
counted loans for the Memphis banks amountYours, truly,
ing to $1,782,450. This, however, is not the
full measure of help we have given the Memphis
SUBSTITUTIONS.
banks, since on closing the office, through this
As the loan had originally been made by the agency, we succeeded in having the Memphis
member bank to a cotton buyer or a factor, and banks agree to allow each other to hold cotton
the latter had turned the collateral over to the collateral. Since the closing of this office on
bank, which in turn had turned it over to us, January 20 to February 15, 1917, we have
in order to be fully protected in any substitu- rediscounted paper for the Memphis banks
tions that we allowed, each of the banks re- amounting to $383,920, making a total of
discounting with us gave us the following rediscounts from September 25, 1916, to date
authority:
of $2,146,370.
MEMPHIS, TENN.,
= .
—
In some accounts the substitutions were
[Date.]
FEDERAL RESERVE BANK,
much more active than in others. The most
St. Louis, Mo.
active account had pledged in the custody of
GENTLEMEN: In order to facilitate the substitution of
our representative a daily average of 1,429.2
warehouse receipts held hy our representative in Memphis,
Tenn., securing loans rediscounted by us with the Federal bales of cotton. The number of substitutions
Reserve Bank of St. Louis, and in.order to relieve the in this account for the period from October 16,
owner .of such receipts, desiring to make substitutions, 1916, to January 20, 1917, was 11,021 bales;
from presenting same to us, we direct that you accept such that is, the number of bales substituted was
receipts bearing the name of the Memphis Terminal Cor7.7 times the average cotton on hand daily as
poration, issued or purported to be issued by it, when
collateral to its loans. Perhaps it will make
tendered to you by any of our customers in substitution of




171

FEDERAL RESERVE BULLETIN.

MARCH 1,1917.

this clearer to say that though during the above
period 11,021 bales passed through the hands
of our representative, the collateral at any one
time to the loans was 1,429.2 bales on the
average.
The number of substitutions ranged from
this down. The least active account had in it
a daily average of 278 bales, and during the
period from October 26, 1916, to January 20,
1917, there were only 17 changes of collateral.
Up to January 20, 1917, when we closed the
Memphis office, there had been deposited as
collateral 22,369 bales of cotton. From
October 16, 1916, the date we commenced
keeping a record of the number of substitutions,
to January 20, 1917, there had been 40,041
substitutions.
EARNINGS.

For the period from the opening of the office
on September 25, 1916, to the time it was
closed on January 20, 1917, the statement of
the earnings and expenses of the Memphis
agency is as follows:

System by the cotton interests, the banks, and
the public in general. Confidence created by
the existence of the system was the basis of
unafraid business activity.
(4) As for the results accomplished, the following quotation is given from a letter written
by one of the large cotton factors and commission merchants in Memphis to our representative just before the Memphis agency was
closed:
u
We think that the Federal Reserve Banks
have saved the* day for the South this year.
Under the old monetary system we think it
would have been an impossibility to maintain
prices of cotton like has been done this fall.
Under the old system we think the rates of
interest would have been very high, and prices
could not have been maintained."

Operation of the Clearing Plan.

The following table shows briefly the clearing operations of the Federal Reserve system
Discount earned
$7, 574.42
for the monthly period ending February 15,
Expenses (including salary of our representative for the time he was in Memphis)
1, 710.00 1917, with comparative figures for each of the
six preceding months:
Net earnings

:

5, 864.42

CONCLUSIONS.

(1) Through this agency established at
Memphis the Federal Reserve Bank of St. Louis
was able to take care of all of the needs of the
Memphis banks and to give them as quick
service as they desired.
(2) At no time during the existence of this
agency did any need of member banks arise
which could have been handled more satisfactorily than through this agency had a branch
bank been established there instead. Offerings put in the mail at night reached us the
next morning, were passed on, and the proceeds
put to the credit of the bank rediscounting
generally before noon. We were in daily intimate contact with not only our member banks,
but knew the entire situation as it existed in
their territory.
(3) Our representative found the keenest
interest manifested in the Federal Eeserve




Operation of the Federal Reserve interdistrict clearing system, January 16 to February 15, 1917.

Average
numj ber
of items
handled
daily.

Bank.

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

..

Average
amount
of daily
clearing.

35,234 811,153,187
41,342 26,702,153
i 30,416 16,171,405
15,239 7,598,641
15,756 7,613,435
11,956 3,734,742
j 19J761 • 12,717,528
6,553,987
! 10,329
5,310,106
! 11,980
6,590,800
! 11,387
4,539,320
! 11,710
,j 5,311 | 1,502,724

Total, Jan. 16 to Feb. 15,1917..
Dec. 16,1916, to Jan. 15,
1917
Nov. 16, 1916, to Dec.
15,1916
Oct. 16 to Nov. 15, 1916.
Sept. 16 to Oct. 15,1916.
Aug. 16 to Sept. 15,1916.
July 16 to Aug. 15, 1916.

Member
banks
in the
district.

402
625
632
752
521
389
1,045
468
715
943
. 618
520

Nonmember
banks
from
which
checks
are collected
at par.
242
310
235
488
286
411
1,413
87?
1,100
1,405
219
1,105

220,421 1110,188,028

7,630

241,933 |l21,8l4,589

7,622

8,130

236,038
227,489
204,891
177,397
133,113

7,627
7,623
7,618
7,618

8,065
8,059
7,459
7,449
7,032

il25,603,732
115,061,224
97,666,107
78,559,704
59,301,696

172

FEDERAL RESERVE BULLETIN.

MARCH 1,

1917.

Synopsis of Report of the Comptroller of the banks increasing their capital was 453 and the new capital
authorized, $43,227,200.
Currency.

The following is a condensed synopsis or
summary of some of the main features of the
Annual Report of the Comptroller of the Currency (vol. 1—202 pp.) for the 12 months
ending October 31, 1916, which, in accordance
with section 333 of the Revised Statutes, was
submitted to Congress on February 5. The
synopsis was prepared and given out from the
Comptroller's office.
Unusual Combination of Great Business Activity and
Easy Money:
With the greatest prosperity and business activity the
country has ever known, requiring the use of many hundreds of millions of additional accommodations from
banks, says the report, the business men of the country
have at the same time enjoyed the most favorable interest
rates ever seen.
Figures showing the decentralization of banking capital and the wholesome effects of the operations of the Federal Reserve System in all sections are given.
The national banks are described as " the backbone and
substance of the Federal Reserve System," and it is shown
that on November 17, 1916, of the 7,614 members of the
Federal Reserve System, 7,577 were national banks and
that of $15,980,000,000 of resources, the resources of
national bank members amounted to $15,513,000,000.
Deposits in National Banks Increasing Faster than in
State Institutions:
In the 10 years preceding the inauguration of the Fedreal Reserve System the deposits in State banks and trust
companies had shown a greater ratio of increase than the
deposits in national banks, but from June, 1913, to June,
1916, the deposits of the national banks increased 33J per
cent, while the deposits in State banks and trust companies increased only about 29 per cent.
National Bank Resources Double in 10 Years:
The resources of the national banks have doubled in 10
years, growing from 7,670 million dollars in April, 1906,
to 15,520 million on November 17, 1916. The resources
of the national banks on November 17, 1916, exceeded
the total resources of all reporting State banks, savings
banks, private banks, and loan and trust companies
throughout the country at the time of the beginning of
the Federal Reserve System two years ago.
National Banks Increase in Numbers as well as in Capital
and Resources:
From the opening of the Reserve Banks November 16,
1914, to November 15, 1916, the Comptroller of the Currency issued charters to 264 new national banks with an
aggregate capital of §16,109,500, and during the same
period 189 national banks increased their capital by
$27,117,700. The aggregate of new charters issued and




Since the opening of the Reserve System, excluding
banks consolidating with other national banks, the number
of new banks chartered plus the number of existing
national banks which increased their capital exceeds by
257 the number of national banks going into liquidation or
reducing their capital, and the capital of the newly
chartered banks plus the increased capital of existing
banks exceeds by $26,514,200 the capital of all national
banks which have gone into liquidation or reduced their
capital during this period, other than those consolidating
with other national banks. There were on hand on October
31, 1916, 46 additional applications for the organization
of national banks approved by the Comptroller of the
Currency, and 87 for new charters under consideration.
"These facts," the comptroller eays, "furnish a conclusive reply to suggestions which have been occasionally
made that there has been any general tendency toward the
withdrawal of banks from the National Banking System."
Wider Diffusion of Banking Wealth:
The 100 largest national banks are now shown to be scattered through 22 different States and in 33 cities representing every section of the country, and not concentrated in
a few centers as heretofore.

Reduction in Number and Liabilities of Banks Failing,
Since the Opening of Federal Reserve System:
In the fiscal year ending June 30,1916, the first comptlee
fiscal year under the new system there Were 15 national
bank failures with aggregate liabilities of only $3,838,415,
as compared with 19 failures with $39,952,000 liabilities
for the year ending June 30, 1914, the last fiscal year preceding the opening of the new system—ten times.as large
as for the past year.
Unprecedented Growth in National Bank Resources:
For the twelve months from November 10, 1915, to
November 17, 1916, as shown by their sworn statements,
the resources of the national banks increased $2,326,000,000
the greatest increase ever shown in a similar period.
Increases in Twenty-Year Period:
Tables presented illustrate the growth of national bank
deposits at five-year intervals since 1896, and show that
the deposits November 17, 1916, were 12,489 million
dollars, as compared with 6,031 million dollars in November, 1906, and only 2,029 million dollars in October, 1896.
The deposits of the national banks to-day are therefore
six times as great as they were only twenty years ago.
Reserves:
The surplus or excess reserves held by the national
banks November 17, 1916, amounted to 1,016 million
dollars, this excess exceeding the total of all reserves held
as late as September, 1901.
Geographical Location of Excess Reserves:
Reports of November 17, 1916, show, says the Comptroller, that the greatest excess of reserves are now held

MARCH 1,1917.

FEDEBAL EESERVE BULLETIN.

in those sections of the country which before the institution of the Federal Reserve System were generally regarded
as the borrowing sections. He points out that the Southern
States held 127 per cent more reserve than they were re- j
quired by law to hold; the Western States 158 per cent
more; Pacific States 127 per cent more than their requirements, while reserves held in the Eastern States were
41 per cent more than necessary, and the Middle States 67
per cent more, and the New England States 59 per cent
more than required.

173

To limit investment in bank building.
To authorize United States Treasurer to sell bonds securing circulation 30 days after a bank goes into liquidation.
Riggs National Bank Charter, Etc.:
The Riggs National Bank controversy is briefly summed
up and a synopsis of the decision of the Supreme Court of
the District of Columbia upholding the comptroller's right
to all the information and reports of every sort demanded
of the bank is included in the report.

Cash Reserves and Balances in the Reserve Banks:
State Bank and Trust Company Statistics:
The banks had cash in their own vaults and in reserve
The report also contains the usual statistical tables as to
banks amounting to $1,437,515,000, as compared with
State banks, loan and trust companies, and savings banks,
$1,212,960,000 in November, 1915, and $925,553,000 on
both mutual and joint stock, for the past fiscal year, and
October 31, 1914.
for a period of years.
"Acceptances" Aiding Foreign Trade:
The aggregate resources of loan and trust companies inFigures are given showing the growth of "acceptances" creased from $5,873,000,000 June, 1915, to $7,028,000,000
by national banks, based on imports and exports. They June 30, 1916.
increased from $13,077,000 September, 1915, to $76,608,000
Banking Power of the United States:
September, 1916.
The banking power of the United States as expressed
Gigantic Growth in Resources of all Reporting Banks and by the input of capital, surplus and profits, deposits, and
Trust Companies in One Year:
circulation of all banks, amounted on June 30, 1916, to
Tables presented show an increase in resources in all $29,353,000,000, an increase over the previous year of
banks, National and State, including trust companies, from $3,956,000,000, or 15.57 per cent.
June 23, 1915, to June 30, 1916, of 4,710 million dollars.
Money in all Reporting Banks: •
Between June 30, 1916, and November 17, 1916, the naThe cash in national, State, savings, private banks,
tional bank resources increased an additional $1,593,337,and loan and trust companies plus the cash held by the
000, so that the resources of all reporting banks between
Federal Reserve Banks on June 30, 1916, was reported at
June and November, 1916, assuming that the State banks
81,911,717,000, being an increase over June, 1915, of
(whose reports are received only once a year) were the
$141,856,000, or 8 per cent. These cash holdings have,
same on November 17 that they were on June 30, have
of course, been greatly increased since July 1 by large
increased to $34,489,531,000.
importations of foreign gold.
Increase in Total Resources of ail Banks since 1908:
The total resources of all reporting banks in the United Foreign Securities held by National Banks:
The report shows that the amount of foreign government
States June 30, 1916, are given at $32,896,000,000 as comand other foreign securities owned by national banks on
pared with $19,583,000,000 in 1908. The number of bankDecember 27, 1916, was $321,993,000. The reports reing institutions in the same period increased from 21,346 ceived from national banks in 100 cities, including all
to 27,525.
Reserve cities and all cities with a population of 75,000
Abatement of Usury:
or more, show that the national banks in these cities (exThe Comptroller shows there has been a material reduc. clusive of about 10 per cent of them still to be heard from)
tion in the excessive rates charged by national bankg were lending on December 27, 1916, to merchants and
throughout the country. In September, 1915, 1,022 na- other borrowers in foreign countries, on direct loans, the
tional banks admitted average rates of 10 per cent or more, sum of S136,669,000.
This makes the total investments of our national banks on
while on November 17, 1916, the total number of such
the date mentioned (as far as reported) in foreign Governbanks had been reduced to 558.
ment and other foreign securities and loans placed in forLegislation Recommended:
eign countries by national banks in the cities indicated,
The Comptroller repeats all of his recommendations for $458,662,000, and is equal to 42.82 percent of the capital
amendments to the national bank act as contained in the of the national banks, 21.22 per cent of their capital,
last annual report, and adds several additional ones as surplus, and undivided profits, or 2.96 per cent of their
follows:
total resources, as reported November 17, 1916.
To provide a penalty for making false financial stateOf the money loaned by national banks in foreign counments for the purpose of obtaining credit from national tries, $100,000,000 was loaned by the national banks of
New York City, and about 828,000,000 by the national
banks.
To provide punishment for breaking and entering a na- banks in Chicago, St. Louis, San Francisco, Philadelphia,
and Boston.
tional bank for the purpose of theft or robbery.
82341—17
4




174

FEDERAL EESEEVE BULLETIN.

The report also shows that the national banks held on
November 17, 1916, $297,236,000 of foreign securities,
representing 17.38 per cent of the $1,709,956,000 total
securities held by them at that time other than United
States Government bonds.
Salaries of Bank Officers and Employees.
In September, 1916, there were 66,394 officers and employees of national banks, their average salary being $110
per month. In March, 1916, the national banks with
capital of $50,000 or less, which paid salaries to their
presidents, paid their presidents on an average $l,008'per
annum. National banks with capital of $5,000,000 or
more were paying an average of $44,400 per annum to their
presidents.
The comptroller recommends that the national banks
consider furnishing their clerks and other employees receiving small salaries life insurance policies equal to their
salaries for one year, so that in the event of death the
families of the employees may at least be temporarily
provided for.

MARCH 1,

1917.

Financially Prepared.
"From present indications it is probable that we will
be required to finance not only our own enterprises, our
preparations to make ourselves a formidable and therefore
a respected power, and the commerce which is unfolding
for us on this hemisphere, but also the endless complications and demands of readjustment and reestablishment
that will follow the close of the great war.
"To meet these enormous drafts and strains on our
resources, the most tremendous requirements and the widest opportunity that any nation in the world's history has
ever faced, we are now strong and ready.

Six Billion Increase in 16 Months.
"We have gained in a year and four months, from June
23, 1915, to November 17, 1916, over $6,000,000,000 in the
resources of our banks, counting all banks. This means
that we have added to the resources of*our banks in this
brief space of time an amount exceeding by a billion dollars the entire resources, as recently reported, of those
citadels of financial strength, the Bank of England and the
Bank of France combined. As a further comparison the
Currency Issued and Redeemed through Comptroller's increase for this period also represents an amount twice
Office.
as great as the total resources of the Reichsbank of GerDuring the year ending October 31, 1916, the comptrol- many, plus the resources of the Bank of Italy, according
ler's office received for cancellation $411,950,890 of national to their latest reports.
bank currency, and shipped to the national banks new
national bank notes amounting to $356,300,750. The stock Fortified by Federal Reserve and Federal Farm Loan Acts:
"We have now the Federal Reserve System, which we
of national bank notes in the custody of the Comptroller of
the Currency November 1,1916, amounted to $413,977,860. believe assures us against panics andf ears such as have in
the past, at intervals, disturbed our commerce and
Revenue Derived by Government from Operations of paralyzed our industries. The Rural Credits, or Federal
Farm Loan System, will aid in securing permanent comComptroller's Office.
The report shows that the net revenue derived by the mercial strength and safety based on the sure foundations
Government through the operations of the comptroller's of prosperous and thriving communities of farmers, held
office for the past fiscal year arising primarily from the | to the soil by ties of ownership and encouraged and aided
taxation on bond-secured circulation] after the payment | to secure constantly increasing results per man, per acre,
| and per day.
of all expenses, amounted to $3,258,435.10.
j "In reviewing our banking and fiscal situations we seem
Our International Position.
! now to be intrenched financially almost as firmly as it is
The report concludes with a reference to this country's j possible for any human government to be. We are well
financial preparedness and its readiness to encounter and prepared for preparedness, and ready and able to provide
deal with all financial, domestic, and international prob- for whatever increases of Army and Navy the Congress
lems, as follows:
may think to be necessary.
"Since the beginning of the European war, a little over
two years ago, our country has passed swiftly and defi- A Leading English Newspaper on America's Financial
Supremacy:
nitely from the ranks of the debtor countries and has be"Our preponderating power in world finance is fast
come the most potential of the creditor nations. Pracbeing recognized in all countries. As an illustration of
tically the whole world is in debt to us and steadily
the opinions now held abroad as to this country, it may
increasing its obligations.
not be amiss to quote in conclusion the following extract
"Our financial condition in relation to other peoples from an editorial entitled 'American banks and the future/
and the world at large becomes stronger from week to week which appeared recently in one of the leading English
and from month to month. As the figures show so con- newspapers, the Manchester Guardian:
clusively, our wealth is piling up with wonderful rapidity;
" 'European financiers in general would be well advised
but to do our proper work in the world and to protect and to face the fact that the war has radically transformed the
enlarge our own interests we may before long need every relations between the United States and Europe. The
dollar of these resources, gigantic and inexhaustible as American Comptroller of Currency in his latest report indithey now seem to be.
cates how greatly American banks have developed in




1,1917.

recent years. Their resources on November 17, amounted
to 3,104 million pounds. They have grown by 800 millions
since 1913 and doubled since 1906.
"'The Federal Reserve Act and other legislation under
Mr. Wilson's auspices have given them, for the first time
in their history, a really sound organization. The United
States has wiped out, or by the end of this war will have
wiped out, most of its debt to foreign investors. It will
have a currency of unimpeachable soundness, fortified by
a gold reserve of unprecedented magnitude.
"'The American bankers will have acquired the experience they have hitherto lacked in the international
money market. And all this strengthened financial fabric
will rest upon an economic fabric which the war will have
much expanded. It can hardly be doubted that under
these circumstances New York will enter the lists for the
financial leadership of the world.'"

Bank Agency at Paris, France.

The following statement was issued by the
Federal Reserve Board on February 28:
Pursuant to the policy already made known
in connection with the Bank of England on
December 26, 1916, at which time it was
stated that the Board had had under consideration the advisability of authorizing Federal
Reserve Banks to establish correspondents or
agencies in Europe, the Federal Reserve Board
has announced that it has passed a resolution
approving the application of the Federal Reserve Bank of New York for authority to
establish an agency with the Bank of France,
of Paris, France.
This action is taken under the provisions of
section 14, paragraph (e) of the Federal Reserve Act, which authorizes any Federal Reserve Bank, with the consent of the Federal
Reserve Board, to "open and maintain banking accounts in foreign countries, appoint correspondents, and establish agencies in such
countries wheresoever it may deem best for
the purpose of purchasing, selling, and collect-,
ing bills of exchange, and to buy and sell, with
or without its indorsement, through such correspondents or agencies, bills of exchange arising out of actual commercial transactions
* * * and to open and maintain banking
accounts for such foreign correspondents or
agencies."




175

FEDERAL RESERVE BULLETIN.

Other Federal Reserve Banks may participate in the agency relationship with the Bank
of France, when established, upon the same
terms and conditions that will govern the
Federal Reserve Bank of New York, if they so
desire.
GOLD-SETTLEMENT FUND.
There has been continued growth and activity in the gold-settlement fund during February, a record clearing having been made on
February 8, when the amount of the weekly
settlement was $287,677,000. There has been
more than ordinary activity in transfers and
payments for banks.
The figures given below cover the period
from January 26 to February 23, inclusive,
during which period obligations were settled
amounting to SI, 117,505,000, with changes in
ownership of only 1.90 per cent. The greatest
relative increase in gold holdings in the fund
by settlements and transfers has been by the
banks of Boston and San Francisco, but New
York and Chicago have also made considerable
gains.
In order to save space in the Federal Reserve Bulletin, there is given this month a consolidation of the figures which have heretofore
been printed covering the transactions of each
week:
Amount

of clearings and transfers, Federal Reserve
from Jan. 26, 1917, to Feb. 23, 1917.

Banks,

[000 omitted.]
Total
clearings.
Settlement of—
Feb. 1,1917...
Feb. 8,1917...
Feb. 15,1917..
Feb. 23, 1917..

§265,436
287,677
268,137
268,714

Total
Previously reported for 1917.

1,089,964
1,051,104

Total since Jan. 1,1917
Total transfers Jan. 1,1917, to date
Total for 1916, including transfers
Total for 1915, including transfers

2.141,068
' 54,643
5,633,966
1,052,649

Total clearings and transfers,
May 20,1915, to Feb. 23,1917.

8,882,326

T

Balances.

s

I
S12,924
15,474
12,121
13,391

i
i
I
I

S3,100
4,200
12,662
7,579

53,910 :
67,126 |

27,541
27,102

121,036

54,643

176

FEDERAL RESERVE BULLETIN".

M A R C H 1, 1917.

Changes in ownership of gold.
[000 omitted.]

To Jan. 25,1917.

Balance
to credit,
Jan. 25, Balance
Decrease. Increase. 1917, plus Feb. 23, Decrease. Increase. Decrease. Increase.
net de1917.
posits of
gold since
that date.

Federal Reserve Bank of—

Boston....
New Y o r k . . . .
Philadelphia
Cleveland....
Richmond
Atlanta
Chicago....
St. Louis..
Minneapolis
Kansas City
Dallas...
San Francisco

Total changes from
May 20, 1915, to
Feb. 23,1917.2

From Jan. 26, 1917, to 1Feb. 23, 1917,
inclusive.

8308,103

. .
806

....

Total

308,909

$18,802 311,032
$17,825
50,897
53,768
69,247 14,667
10,855
$3,812
27,682 25,352
26,460
27,695 21,415
16,826
4,589
4,422
22,182
5,197
28,934
32,694
9,348
1,802
12.668
*""7,"546*
6,316
4,457
7,316
1,859
48,627 27,234.5 27,357.5
7,659.5
35', 616 11,158.5
3,499
2,534
8,409
39,074

$6,793
2,871 "$360," 232*

308,909 213,310

21,305

213,310

21,305

$25,595
65,435
28,790
23,106
22,957
2,954
5,122
5,457
48,750
32,117
44,949

1,108
775
3,760
123
5,875
305,232

305,232

1 Changes in ownership of gold during period Jan. 26,1917, to Feb. 23,1917, equal 1.90 per cent of obligations settled.
2
Total changes in ownership of gold equal 3.43 per cent of total obligations settled.

Gold settlement fund—Summary

of transactions from Jan. 26, 1917, to Feb. 23, 1917, inclusive.
[000 omitted.]
Gold.

Balance
Jan. 25,
1917.

Federal Reserve Bank of—

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

§15,032
50,897
15,117
^5,552
17,965
2,912
33,504
3,468
6,316
27,054.5
10,628.5
4,904

Total

213,350

Withdrawn.

Deposited.

Debit.

;4,000
£7,600
1,000
200
200
500
6,300
500

§550
3,650
2,010
1, 730
6,380

120 i
220 i
3,350 I
16,390

Weekly settlements from Jan. 26,1917,
to Feb. 23,1917.

Transfers.

300
750
16,350

Credit.

85,062
12,100

3,505
2,500
107
500
3,600
2,440
2,850
1,739
2,700

27,541

1,000
40
6,200
500 i

Total
debits.

Total
net
credits.

Total
credits.
892.029
292', 957
154,297
71,519
63,718
37,100
145,362
90,098
24,749
62,402
26,484
29,249

16,372
10,086
6,711
4,039
426
3,837
10,666
615
1,315
3,379
. 528
5,936

$17,825
53,768
10,855
26,460
16,826
5,197
32,694
1,802
4,457
27,357.5
7,659.5
8,409

53,910 1,089,964 jl, 089,964

53,910

213,310

S4,641
11,715
10,523
426
2,515
2,995
12,606
4,561
734
906
2,288

2,639"

27,541

Total
net
debits.

Feb. 23,
balance
in fund
at close
of busi-

§90,298
294,586
158,109
67,906
65,807
36,258
147,302
94,044
24,168
59,929
28,244
23,313

I
Federal Reserve Agents' Fund—Summary

of transactions, Jan. 26, 1917, to Feb. 23, 1917, inclusive.
[000 omitted.]

Balance
to credit
Jan. 25,

Federal Reserve Agent at—

Withdrawn.

Deposited.

1917.
Philadelphia
Richmond
Atlanta
Chicago
St. Louis
Minneapolis




I
!
I
:
'

$12,280
12,900
13,850
7,010
6,510
3,250

SI,150
2.900
'900
100
580

$1,000
500
6,300
500

Balance
Feb. 23,
1917.

Federal Reserve Agent at—

$12,130 Kansas City..,
10,000 Dallas
13,450 San Francisco.
13,210
Total...
6,430
3,250

Balance
to credit
Jan. 25,

Withdrawn.

Deposited.

1917.

Balance
Feb. 23,
1917.

$13,960
10,130
14,120

$700
800
580

1,840

$13,380
9,330
15,380

94,010

7,710

10,260

96,560

$120

I

177

FEDERAL RESERVE BULLETIN.

MARCH 1,1917.

PROPOSED AMENDMENTS TO FEDERAL RESERVE ACT.
SENATE BILL.

HOUSE BILL.

[Sixty-fourth Congress, second session. Calendar No. 947. S. 8259- [Sixty-fourth Congress, second session. Union Calendar No. 443. H»
Report No. 1059. In the Senate of the United States, February 14
R. 20661. Report No. 1406. In the House of Representatives, Jan(calendar day, February 15), 1917. Mr. Owen introduced the followuary 31, 1917. Mr. Glass introduced the following bill; which was
ing bill; which was read twice and referred to the Committee on
referred to the Committee on Banking and Currency and ordered to
Banking and Currency. February 14 (calendar day, February 16),
be printed. February 2, 1917. Committed to the Committee of the
1917. Reported by Mr. Owen, without amendment.]
Whole House on the state of the Union and ordered to be printed.]

A BILL To amend the Act approved December twenty- A BILL To amend the Act approved December twentythird, nineteen hundred and thirteen, known as the
third, nineteen hundred and thirteen, known as the
Federal reserve Act, as amended by the Acts of August
Federal reserve Act, as amended by the Acts of August
fourth, nineteen hundred and fourteen; August fifteenth,
fourth, nineteen hundred and fourteen, August fifteenth,
nineteen hundred and fourteen; March third, nineteen
nineteen hundred and fourteen, March third, nineteen
hundred and fifteen; and September seventh, nineteen
hundred and fifteen, and September seventh, nineteen
hundred and sixteen.
hundred and sixteen.

Be it enacted by the Senate and House of Representatives of the United States of America in
Congress assembled, That section four of the
Act approved December twenty-third, nineteen
hundred and thirteen, known as the Federal
reserve Act, be amended by striking out the
sentence reading as follows: "One of the directors of Class C, who shall be a person of tested
banking experience, shall be appointed by the
Federal Reserve Board as deputy chairman and
deputy Federal reserve agent, to exercise the
powers of the chairman of the board and Federal reserve agent in 7
case of absence or disability of his principal/ and by adding in place
thereof the following:
"Subject to the approval of the Federal
Reserve Board, the Federal reserve agent shall
appoint one or more assistants. Such assistants, who shall be persons of tested banking
experience, shall assist the Federal reserve
agent in the performance of his duties and shall
also have power to act in his name and stead
during his absence or disability. The Federal
reserve agent may require such bonds of his
assistants as he may deem necessary for his
own protection. Assistants to the Federal
reserve agent shall receive an annual compensation to be fixed and paid in the same manner
as that of the Federal reserve agent. One of
the directors of class C shall be appointed by
the Federal Reserve Board as vice chairman to
exercise the powers of the chairman of the
board in case of the absence or disability of the
Federal reserve agent; in case of the absence of
the chairman and vice chairman the third class
C director shall preside at meetings of the
board."




Be it enacted by the Senate and House of Representatives of the United States of America in
Congres.s assembled, That section four of the
Act approved December twenty-third, nineteen
hundred and thirteen, known as the Federal
reserve Act, be amended in the paragraph
relating to the appointment of class C directors
and prescribing their duties so as to read as
follows:
" Class C directors shall be appointed by the
Federal Reserve Board. They snail have been
for at least two years residents of the district
for which they are appointed, one of .whom
shall be designated by said board as chairman
of the board of directors of the Federal reserve
bank and as 'Federal reserve agent.' He shall
be a person of tested banking experience, and
in addition to his duties as chairman of the
board of directors of the Federal reserve bank
he shall be required to maintain under regulations to be established by the Federal Reserve
Board a local office of said board on the premises of the Federal reserve bank. He shall
make regular reports to the Federal Reserve
Board and shall act as its official representative
for the performance of the functions conferred
upon it by this Act. He shall receive an
annual compensation to be fixed by the Federal
Reserve Board and paid monthly by the Federal reserve bank to which he is designated.
One of the directors of class C, who shall be a
person of tested banking experience, shall be
appointed by the Federal Reserve Board as
deputy chairman' to exercise the powers of the
chairman of the board when necessary.
"Subject to the approval of the Federal
Reserve Board, the Federal reserve agent shall
appoint one or more assistants. Such assistants, who shall be persons of tested banking
experience, shall assist the Federal reserve
agent in the performance of his duties and shall
also have power to act in his name and stead

178

FEDERAL RESERVE BULLETIN,
SENATE' BILL.

MARCH 1,

1917

HOUSE BILL.

during his absence or disability. The Federal
reserve agent may require such bonds of his
i assistants as he may deem necessary for his
i own protection. Assistants to the Federal
I reserve agent shall receive an annual compenI sation, to be fixed and paid in the same manner
j as that of the Federal reserve agent."
SEC. 2. That the first paragraph of section
SEC. 2. That the first paragraph of section
thirteen be amended so as to read as follows: thirteen be further amended so as to read as
"Any Federal reserve bank may receive from follows:
"Any Federal reserve bank may receive from
any of its member banks, and from the United
States, deposits of current funds in lawful any of its member banks, and from the United
money, national-bank notes, Federal reserve States, deposits of current funds in lawful
notes, or checks, and drafts, payable upon money, national-bank notes, Federal reserve
presentation, and also, for collection, maturing notes, or checks and drafts, payable upon
notes and bills; or, solely for purposes of ex- presentation, and also for collection, maturing
change or of collection, may receive from other notes and bills; or, solely for purposes of exFederal reserve banks deposits of current funds change or of collection, may receive from other
in lawful money, national-bank notes, or checks Federal reserve banks deposits of current funds
upon other Federal reserve banks, and checks in lawful money, national-bank notes, or checks
and drafts, payable upon* presentation within upon other Federal reserve banks, and checks
its district, and maturing notes and bills pay- and drafts, payable upon presentation within
able within its district; or, solely for the pur- its district, and maturing notes and bills payposes of exchange or of collection, may receive able within its district; or, solely for the purfrom any nonmember bank or trust company poses of exchange or of collection, may receive
deposits of current funds in lawful money, from any nonmember bank or trust company
national-bank notes, Federal reserve notes, deposits of current funds in lawful money,
checks and drafts payable upon presentation, national-bank notes, Federal reserve notes,
or maturing notes and bills: Provided, Such non- checks and drafts payable upon presentation,
member bank or trust company maintains with or maturing notes and bills: Provided, That
the Federal reserve bank of its district a such nonmember bank or trust company mainbalance in an amount to be determined by the tains with the Federal reserve bank of its
Federal Reserve Board under such rules and district a balance in an amount to be determined by the Federal Reserve Board under
regulations as it may prescribe."
such rules and regulations as it may prescribe.
SEC. 3. That the fifth paragraph of section
SEC. 3. That the fifth paragraph of section
thirteen be, and is hereby, amended so as to thirteen be, and is hereby, amended further so
read as follows:
as to read as follows:
"Any member bank may accept drafts or
"Any member bank may accept drafts or
bills oi exchange drawn upon it having not bills of exchange drawn upon it having not more
more than six months sight to run, exclusive than six months sight to run, exclusive of days
of days of grace, which grow out of transactions of grace, which grow out of transactions ininvolving the importation or exportation of volving the importation or exportation of
goods; or which grow out of transactions in- goods; or which" grow out of transactions involving the domestic shipment of goods pro- volving the domestic shipment of goods provided shipping documents conveying or secur- vided shipping documents conveying or securing title are attached at the time of acceptance; ing title are attached at the time of acceptance;
or which are secured at the time of acceptance or which are secured at the time of acceptance
by a warehouse receipt or other such document by a warehouse receipt or other such document
conveying or securing title covering readily conveying or securing title covering readily
marketable staples. No member bank shall marketable staples. No member bank shall
accept, whether in a foreign or domestic trans- accept, whether in a foreign or domestic transaction, for any one person, company, firm, or action, for any one person, company, firm, or
corporation to an amount equal at^ any time corporation to an amount equal at any time in




179

FEDERAL RESERVE BULLETIN.

MARCH 1,1917.

SENATE BILL.

HOUSE BILL.

in the aggregate to more than ten per centum the aggregate to more than ten per centum of
of its paid-up and unimpaired capital stock its paid-up and unimpaired capital stock and
and surplus, unless the bank is secured either surplus, unless the bank is secured either by
by attached documents or by some other actual attached documents or by some other actual
security growing out of the same transaction security growing, out of the same transaction
as the acceptance; and no bank shall accept as the acceptance; and no bank shall accept
such bills to an amount equal at any time in such bills to an amount equal at any time in the
the aggregateto more than one-half oi its paid- aggregate to more than one-half oi its paid-up
up and unimpaired capital stock and surplus: and unimpaired capital stock and surplus:
Provided, however, That the Federal Reserve Provided, however. That the Federal Reserve
Board, under such general regulations as it may Board, under such general regulations as it may
prescribe, which shall apply to all banks alike prescribe, which shall apply to all banks alike
regardless of the amount of capital stock and regardless of the amount of capital stock and
surplus, may authorize any member bank to surplus, may authorize any member bank to
accept such bills to an amount not exceeding | accept such bills to an amount not exceeding
at any time in the aggregate one hundred per at any time in the aggregate one hundred per
centum of its paid-up and unimpaired capital centum of its paid-up and unimpaired capital
stock and surplus: Provided, however7 That the stock and surplus: Provided, however, That the
aggregate of acceptances growing out of aggregate of acceptances growing out of
domestic transactions shall in no event exceed domestic transactions shall in no event exceed
fifty per .centum of such capital stock and fifty per centum of such capital stock and
surplus: Providedfurther, That in no event shall surplus."
a bank accept for any one person, company,
firm, or corporation to an amount equal at any
time in the aggregate to more than twenty per
centum of its paid-up and unimpaired capital
stock and surplus."
SEC. 4. That section sixteen, paragraphs
two, three, four, five, six, and seven, be
amended and reenacted so as to read as follows:
"Any Federal reserve bank may make application to the local Federal reserve agent for
such amount of the Federal reserve notes
hereinbefore provided for as it may require.
Such application shall be accompanied with a
tender to the local Federal reserve agent of collateral in amount equal to the sum of the
Federal reserve notes thus applied for and
issued Dursuant to such application. The
collateral security thus offered shall be notes,
drafts, bills of exchange, or acceptances rediscounted under the provisions of section
thirteen of this Act, or bills of exchange indorsed by a member bank of any Federal reserve district and purchased under the provisions of section fourteen of this Act, or
bankers' acceptaaces purchased under the
provisions of said section fourteen, or gold or
gold certificates; but in no event shall such
collateral security, whether gold, gold certificates, or eligible paper, be less than the
amount of Federal reserve notes applied for.
The Federal reserve agent shall each day
notify the Federal Reserve Board of all issues
and withdrawals of Federal reserve notes to




180

FEDEEAL RESERVE BULLETIN.
SENATE BILL.

and by the Federal reserve bank to which he
is accredited. The said Federal Eeserve Board
may at any time call upon a Federal reserve
bank for additional security to protect the
Federal reserve notes issued to it.
" Every Federal reserve bank shall maintain
reserves in gold or lawful money of not less
than thirty-five per centum against its deposits and reserves in gold of not less than
forty per centum against its Federal reserve
notes in actual circulation: Provided, however,
That when the Federal reserve agent holds
gold or gold certificates as collateral for Federal
reserve notes issued to the bank such gold or
gold certificates shall be counted as part of
the gold reserve which such bank is required
to maintain against its Federal reserve notes in
actual circulation. Notes so paid out shall
bear upon their faces a distinctive letter and
serial number, which shall be assigned by
the Federal Reserve Board to each Federal
reserve bank. Whenever Federal reserve notes
issued through one Federal reserve bank shall
be received by another Federal reserve bank
they shall be promptly returned for credit or
redemption to the Federal reserve bank
through which they were originally issued or,
upon direction of such Federal reserve bank,
they shall be forwarded direct to the Treasurer
of the United States to be retired. No
Federal reserve bank shall pay out notes issued
through another under penalty of a tax of
ten percentum upon the face value of notes so
paid out. Notes presented for redemption
at the Treasury of the United States shall be
paid out of the redemption fund and returned
to the Federal reserve banks through which
they were originally issued, and thereupon
such Federal reserve bank shall, upon demand
of the Secretary of the Treasury, reimburse
such redemption fund in lawful money or, if
such Federal reserve notes have been redeemed
by the Treasurer in gold or gold certificates,
then such funds shall be reimbursed to the
extent deemed necessary by the Secretary of
the Treasury in gold or gold certificates, and
such Federal reserve bank shall, so long as
any of its Federal reserve notes remain outstanding, maintain with the Treasurer in gold
an amount sufficient in the judgment of the
Secretary to provide for all redemptions to be
made by the Treasurer. Federal reserve
notes received by the Treasurer otherwise than
for redemption may be exchanged for gold out
of the redemption fund hereinafter provided




MARGH 1,

HOUSE BILL.

1917.

SENATE BILL.

and returned to the reserve bank through
which they were originally issued, or they may
be returned to such bank for the credit of the
United States. Federal reserve notes unfit
for circulation shall be returned by the Federal !j
reserve agents to the Comptroller of the Currency for cancellation and destruction.
"The Federal Reserve Board shall require
each Federal reserve bank to maintain on deposit in the Treasury of the United States a
sum in gold sufficient in the judgment of the
Secretary of the Treasury for the redemption
of the Federal reserve notes issued to such
bank, but in no event less than five per centum
of the total amount of notes issued less the
amount of gold or gold certificates held by the
Federal reserve agent as collateral security;
but such deposit of gold shall be counted and
included as part of the forty per centum reservo hereinbefore required. The board shall
have the right, acting through the Federal reserve agent, to grant, in whole or in part, or to
reject entirely the application of any Federal
reserve bank for Federal reserve notes; but to
the extent that such application may be
granted the Federal Reserve Board shall,
through its local Federal reserve agent, supply
Federal reserve notes to the bank so applying,
and such bank shall be charged with the amount
of notes issued to it and shall pay such rate of
interest as may be established by the Federal
Reserve Board on only that amount of such
notes which equals the total amount of its outstanding Federal reserve notes less the amount
of gold or gold certificates held by the Federal
reserve agent as collateral security. Federal
reserve notes issued to any such bank shall,
upon delivery, together with such notes of such
Federal reserve bank as may be issued under
section eighteen of this Act upon security of
United States two per centum Government
bonds, become a first and paramount lien on
all the assets of such bank.
"Any Federal reserve bank may at an^y time
reduce its liability for outstanding Federal reserve notes by depositing with the Federal reserve agent its Federal reserve notes, gold, gold
certificates, or lawful money of the United
States. Federal reserve notes so deposited
shall not be reissued, except upon compliance
with the conditions of an original issue.
"The Federal reserve agent shall hold such
gold, gold certificates, or lawful money available exclusively for exchange for the outstanding Federal reserve notes when offered by the




82341—17

181

FEDERAL RESERVE BULLETIN.

MARCH 1,1917.

5

HOUSE BILL.

182

FEDERAL KESE&VE BULLETIN.
SENATE BILL.

reserve bank of which he is a director. Upon
the request of the Secretary of the Treasury
the Federal Reserve Board shall require the
Federal reserve agent to transmit to the Treasurer of the United States so much of the gold
held by him as collateral security for Federal
reserve notes as may be required for the exclusive purpose of the redemption of such Federal
reserve notes, but such gold when deposited
with the Treasurer shall be counted and considered as if collateral security on deposit with
the Federal reserve agent.
"Any Federal reserve bank may at its discretion withdraw collateral deposited with the
local Federal reserve agent for the protection
of its Federal reserve notes issued to it and shall
at the same time substitute therefor other
collateral of equal amount with the approval
of the Federal reserve agent under regulations
to be prescribed by the Federal Reserve Board.
Any Federal reserve bank may retire any of
its Federal reserve notes by depositing them
with the Federal reserve agent or with the
Treasurer of the United. States, and such
Federal reserve bank shall thereupon be entitled to receive back the collateral deposited
with the Federal reserve agent for the security
of such notes. Federal reserve banks shall not
be required to maintain the reserve or the
redemption fund heretofore provided for
against Federal reserve notes which have been
retired. Federal reserve notes so deposited
shall not be reissued except upon compliance
with the conditions of an original issue."
SEC. 5. That section sixteen be further
amended by adding at the end. of the section
the following:
"That the. Secretary of the Treasury-is hereby authorized and directed to receive deposits
oi: gold coin or of gold certificates with the
Treasurer or any Assistant Treasurer of the
United States when tendered by any Federal
reserve bank or Federal reserve agent for
credit to its or his account with the Federal
Reserve Board. The Secretary shall prescribe
by regulation the form of receipt to be issued
by the Treasurer or Assistant Treasurer to the
Federal reserve bank or Federal reserve agent
making the deposit, and a duplicate of such
receipt shall be delivered to the Federal Reserve Board by the Treasurer at Washington
upon proper advices from any Assistant
Treasurer that such deposit lias been made.
Deposits so made shall be held subject to the
orders of the Federal Reserve Board and shall




MARCH 1,

HOUSE BILL.

1917.

MAIICH 1,

183

FEDERAL RESERVE BULLETIN".

1917.

SENATE BILL.

HOUSE BILL.

be payable in gold coin or gold certificates on
the order of the Federal Reserve Board to any
Federal reserve bank or Federal reserve agent
at the Treasury or at the Sub treasury; of the
United States nearest the place of business of
such Federal reserve bank or such Federal
reserve agent: Provided, however, That any
expense incurred in shipping gold to or from
the Treasury or Subtreasuries in order to make
such payments, or as a result of making such
payments, shall be paid by the Federal Reserve
Board and assessed against the Federal reserve
banks. The order used by the Federal Reserve
Board in making such payments-shall be signed
by the governor or vice governor, or such other
officers or members as the board may by regulation prescribe. The form of such order shall
be approved by the Secretary of the Treasury.
"The expenses necessarily incurred in carrying out these provisions, including the cost of
the certificates or receipts issued for deposits
received, and all expenses incident to the handling of such deposits shall be paid by the Federal
Reserve Board and included in its assessments
against the several Federal reserve banks.
j
"Gold deposits standing to the credit of any |
Federal reserve bank with the Federal Reserve I
Board shall, at the option of said bank, be |
counted as part of the lawful reserve which il |
is required to maintain against outstanding
Federal reserve notes, or as a part of the
reserve it is required to maintain against
deposits.
'•'Nothing in this section shall be construed
as amending section six of the Act of March
fourteenth, nineteen hundred, as amended by
the Acts of March fourth, nineteen hundred and
seven, March second, nineteen hundred and
eleven, and June twelfth, nineteen hundred and
sixteen, nor shall the provisions of this section i
be construed to apply to the deposits made ;
or to the receipts or certificates issued under
this section."
SEC. 6. That section seventeen be, and 'is
SEC. 4. That section seventeen be, and is
hereby, amended so as to read as follows:
hereby, amended so as to read as follows:
. "SEC. 17. So much of the provisions of sec"SEC. 17. So much of the provisions of section fifty-one hundred and fifty-nine of the tion fifty-one hundred and fifty-nine of the
Revised Statutes of the United States and sec- Revised Statutes of the United States and section four of the Act of June twentieth, eighteen tion four of the Act of June twentieth, eighteen
hundred and seventy-four, and section eight hundred and seventy-four, and section eight of
of the Act of July twelfth, eighteen hundred the Act of July twelfth, eighteen hundred and
and eighty- two, and of any other provisions of eighty-two, and of any other provisions of exexisting statutes as require that* before any isting statutes as require that before any
national banking associations shall be author- national banking associations shall be authorized to commence banking business it shall ized to commence banking business it shall




184

FEDERAL RESERVE BULLETIN.

MARCH 1,

1917.

SENATE BILL.

HOUSE BILL.

transfer and deliver to the Treasurer of the
United States a stated amount of United States
registered bonds, and so much of those provisions or of any other provisions of existing
statutes as require any national banking associations now or hereafter organized to maintain
a minimum deposit of such bonds with the
Treasurer is hereby repealed."
SEC. 7. That section nineteen be amended
and reenacted so as to read as follows:
"SEC. 19. Demand deposits within the meaning of this Act shall comprise all deposits payable within thirty days, and time deposits
shall comprise all deposits payable after thirty
days, all savings accounts and certificates of
deposit which are subject to not less than
thirty days' notice before payment, and all
postal savings deposits.
"Every bank, banking association, or trust
company which is or which becomes a member
of any Federal reserve bank shall establish and
maintain with its Federal reserve bank reserves
as follows:
" (a) If not in a reserve or central reserve
city, as now or hereafter defined, it shall hold
and maintain with the Federal reserve bank of
its district actual net reserves equal to not less
than six per centum of the aggregate amount
of its demand deposits and three per centum
of its time deposits.
" (b) If in a reserve city, as now or hereafter
defined, it shall hold and maintain with the
Federal reserve bank of its district actual net
reserves equal to not less than ten per centum
of the aggregate amount of its demand deposits
and three per centum of its time deposits.

transfer and deliver to the Treasurer of the
United States a stated amount of United States
registered bonds, and so much of those provisions or of any other provisons of existing
statutes as require any national banking associations now or hereafter organized to maintain
a minimum deposit of such bonds with the
Treasurer is hereby repealed/7
SEC. 5. That section nineteen be further
amended and reenacted so as to read as follows:
" SEC. 19. Demand deposits within the meaning of this Act shall comprise all deposits pay*
able within thirty days, and time deposits
shall comprise all deposits payable after thirty
days, all savings accounts and certificates of
deposit which are subject to not less than thirty
days' notice before payment, and all postal
savings deposits.
"Every bank, banking association, or trust
company which is or which becomes a member
of any Federal reserve bank shall establish and
maintain reserve balances with its Federal
reserve bank as follows:
" (a) If not in a reserve or central reserve city,
as now or hereafter defined, it shall hold and
maintain with the Federal reserve bank of its
district an actual net balance equal to not less
than seven per centum of the aggregate amount
of its demand deposits and three per centum of
its time deposits.
" (b) If in a reserve city, as now or hereafter
defined, it shall hold and maintain with the
Federal reserve bank of its district an actual
net balance equal to not less than ten per
centum of the aggregate amount of its demand
deposits and three per centum of its time deposits.
" (c) If in a central reserve city, as now or
hereafter defined it shall hold and maintain
with the Federal reserve bank of its district
an actual net balance equal to not less than
thirteen per centum of the aggregate amount
of its demand deposits and three per centum
of its time deposits.

" (c) If in a central reserve city, as now or
hereafter defined it shall hold and maintain
with the Federal reserve bank of its district an
actual net reserve equal to not less than thirteen per centum of the aggregate amount of
its demand deposits and three per centum of
its time deposits.
"Every member bank shall maintain in its
own vaults an amount of specie or currency
equal to at least four per centum of its demand
deposits less the amount of those reserves with
the Federal reserve bank which are in excess
of the minimum reserves required by this
section.
" No member bank shall keep on deposit with
" No member bank shall keep on deposit with
any nonmember bank a sum in excess of ten any nonmember bank a sum in excess of ten
per centum of its own paid-up capital and per centum of its own paid-up capital and sursurplus. No member bank shall act as the plus. No member bank shall act as the me-




185

FEDERAL RESERVE BULLETIN.

MARCH 1,1917.

SENATE BILL.

HOUSE BILL.

medium or agent of a nonrnember bank in dium or agent of a nonmember bank in applyapplying for or receiving discounts from a ing for or receiving discounts from a Federal
Federal reserve bank under the provisions of reserve bank under the provisions of this Act,
this Act except by permission of the Federal except by permission of the Federal Reserve
Reserve Board.
Board.
" The reserve carried by a member bank with
"The required balance carried by a member
a Federal reserve bank may, under the regula- bank with a Federal reserve bank may, under
tions and subject to such penalties as may be the regulations and subject to such penalties
prescribed by the Federal Reserve Board, be as may be prescribed by the Federal Reserve
checked against and withdrawn by such mem- Board, be checked against and withdrawn by
ber bank for the purpose of meeting existing such member bank for the purpose of meeting
liabilities: Provided, however, That no bank existing liabilities: Provided, however, That no
shall at any time make now loans or shall pay bank shall at any time make new loans or shall
any dividends unless and until the total reserve pay any dividends unless and until the total
required by law is fully restored.
balance required by law is fully restored.
"In estimating the reserves and the cash in
"In estimating the balances required by this
vault required by this Act, the net balance of Act, the net difference of amounts due to and
amounts due to and from other banks shall be from other banks shall be taken as the basis for
taken as the basis for ascertaining the deposits ascertaining the deposits against which reagainst which reserves with Federal reserve quired balances with Federal reserve banks
banks and cash in vault shall be determined. shall be determined.
"National banks, or banks organized under
"National banks, or banks organized under
local laws, located in Alaska or in a dependency local laws, located in Alaska or in a dependency
or insular possession or any part of the United or insular possession or any part of tho United
States outside the continental United States States outside the continental United States
may remain nonmember banks, and shall in may remain nonmember banks, and shall in
that event maintain reserves and comply with that event maintain reserves and comply with
all the conditions now provided by law regu- all the conditions now provided by law regulating them; or said banks except in the Phil- lating them; or said banks may, with the conippine Islands may, with the consent of the sent of the Reserve Board, become member
Federal Reserve Board, become member banks banks of any one of the reserve districts, and
of any one of the reserve districts, and shall in shall in that event take stock, maintain rethat event take stock, maintain reserves, and serves, and be subject to all the other provisions
be subject to all the other provisions of this of this Act,"
Act,"
SEC* 8. That that part of section twenty-two
SEC, 6. That that part of section twenty-two
which reads as follows: "Other than the usual which reads as follows: "Other than the usual
salary or director's fees paid to any officer, di- salary or director's fees paid to any officer,
rector, or employee of a member bank and director, or employee of a member bank and
other than a reasonable fee paid by said bank other than a reasonable fee paid by said bank to
to such officer, director, or employee for serv- such officer, director, or employee for services
ices rendered to such bank, no officer, director, rendered to such bank, no officer, director, ememployee, or attorney of a member bank shall ployee, or attorney of a member bank shall be
be a beneficiary of or receive, directly or indi- a beneficiary of or receive, directly or indirectly,
r
rectly, any fee, commission, gift, or other con- an} fee, commission, gift, or business of the
sideration for or in connection with any transac- bank," be, and hereby is, amended and reention or business of the bank,", be, and hereby acted so as to read as follows:
is, amended and reenacted so as to read as
follows:
"Other than the usual salary or fee paid to
"Other than the usual salary or director's
fee paid to any officer, director, employee, or | any officer, director, employee, or attorney of a
attorney of a member bank, and other than a member bank, and other than a reasonable fee
reasonable fee paid by said bank to such officer, paid by said bank to such officer, director, emdirector, employee, or attorney for services ren- ployee, or attorney for services rendered to
dered to such bank, no officer, director, em- such bank, no officer, director, employee, or




186

FEDERAL RESERVE BULLETIN.

MARCH 1, 191.7.

SENATE BILL.

HOUSE BILL.

ployee, or attorney of a member bank shall be
a beneficiary of or receive, directly or indirectly,
any fee, commission, gift, or other consideration-for or in connection with any transaction
or business of the bank: Provided, however,
That nothing in this Act contained shall be construed to prohibit a director, officer, or employee from receiving the same rate of interest
paid to other depositors for similar deposits
made with such bank: And provided further,
That notes, drafts, bills of exchange, or other
evidences of debt executed or indorsed by directors of a member bank may be discounted
with such member bank on the same terms and
conditions as other notes, drafts, bills of exchange, or evidences of debt upon the affirmative vote or written assent of at least threefourths of the members of the board of directors
of such member bank.

attorney of a member bank shall be a beneficiary of or receive, directly or indirectly, any
fee, commission, gift, or other consideration fo"r
or in connection with any transaction-or business of the bank: Provided, however, That nothing in this Act contained shall be construed to
prohibit a director, officer, or employee from
receiving the same rate of interest paid to other
depositors for similar deposits made with such'
bank: And provided further, That notes, drafts,
bills of exchange, or other evidences of debt
executed or indorsed by directors of a member
bank may be discounted with such member
bank on the same terms and conditions as other
notes, drafts, bills of exchange, or evidences of
debt upon the affirmative vote or written assent
of a* majority of the board of directors of such
member bank.




SEC. 7. That section three of the Act be
amended and reonactcd so as to read as follows :
"SEC. 3. The Federal Reserve Board may
permit or require any Federal reserve bank to
establish branch banks within the Federal
reserve district in which it is located or within
the district of any Federal reserve bank which
may have been suspended. Such branches,
subject to such rules and regulations as the
Federal Reserve Board may prescribe, shall
be operated under the supervision of a board
of directors to consist of not more than seven
nor loss than three directors, of whom a majority of one shall be appointed by the Federal
reserve bank of the district, and the remaining
directors by the Federal Reserve Board.
Directors of branch banks shall hold office
during the pleasure of the Federal Reserve
Board."
SEC. 8. That section fourteen, subsection
(e), of the Act be.amended and reenacted so
as to read as follows:
" (e) To establish accounts with other Federal reserve banks for exchange purposes and,
with the consent or upon the order and direction of the Federal Reserve Board, and, under
regulations to be prescribed by said board, to
open and maintain accounts in foreign countries, appoint correspondents, and establish
agencies in such countries wheresoever it may
be deemed best for the purpose of purchasing,
selling, and collecting bills of exchange, and to
buy and sell, with or without its indorsement,
through such correspondents or agencies, bills
of exchange (or acceptances) arising out of

MARCH 1,1017.




187

FEDERAL RESERVE BULLETIN.
SENATE BILL.

i'

HOUSE BILL.

i actual commercial transactions which have
| not more than ninety days to run, exclusive
\ of days of grace, and which bear the signature
i of two or more responsible parties, and, with
the consent of the Federal Reserve Board, to
open and maintain banking accounts for such
foreign correspondents or agencies. Whenever any such account has been opened or
agency or correspondent has been appointed
by a Federal reserve bank, with the consent
i of or under the order and direction of the
I Federal Reserve Board, any other Federal
I reserve bank may, with the consent and
: approval of the Federal Reserve Board, be
• permitted to curry on or conduct, through
i the Federal reserve bank opening such account
j or appointing such agency or correspondent,
i any transact ion authorized by this section
' under rules and regulations to be proscribed
• by the board."
1

•
:
!
',

Sixty-fourth Congress, second session. II. K. 20540. In the House of
Jie'presoiUatives", January 26, 1917. Mr. Glass introduced the following bill: which was referred'to the Commit,Ice on Banking and Currericy and ordered to be printed.]

A BILL TO authorize national banking associations to
establish branches.

' Be it enacted by the Senate and House of
I Representatives of the United States of America
I in Congress assembled, That the Act approved
i December twenty-third, nineteen hundred and
I and thirteen, known as the Federal reserve
| Act, be ; and the same hereby is, amended by
! adding a new section as follows:
.

"DOMESTIC BRANCHES.

i "SEC. 25a. That any member bank located
! in a city or incorporated town of more than
i one hundred thousand inhabitants and posj sossing a capital and surplus of $1,000,000 or
more may, under such rules and regulations
!
as the Federal Reserve Board may prescribe,
| establish branches, not to exceed ton in
I number, within the corporate limits of the
i city or town in which it is located: Provided}
I That no such branch, shall be established in
!
any State in which neither State banks nor
trust companies may lawfully establish
I branches: And provided further, That the
! number of branches which a member bank
! may establish shall not exceed the number
of branches which the laws of the State in
''• which, said bank is situated permit a State
\ bank or trust company to establish within
i the corporate limits of said city or town."

188

FEDERAL RESERVE BULLETIN.

SENATE REPORT.
[Sixty-fourth Congress, second session. Calendar No. 947. Senate Be
port No. 1059. FEBRUAKY 14 (calendar day, FEBRUARY 16). 1917.—
Ordered to be printed. Mr. Owen, from the Committee on Banking
and Currency, submitted the following report, to accompany S. 8259.J

MARCH I, 1917.

man and vice chairman, the third class C director
shall preside at meetings of the Board."

The first section abolishes the office of deputy
chairman and Deputy Federal Reserve Agent
The Committee on Banking and Currency, to and substitutes therefor an assistant to be
which was referred the bill (S. 8259) to amend appointed by the Federal Reserve Agent under
the Federal Reserve Act, having considered the bond to the agent, at a salary to be fixed and
same, report it back without amendment and paid in the same manner as that of the Federal
Reserve Agent. Existing law provides that in
recommend its passage.
The amendments to the Federal Reserve Act! the absence of the Federal Reserve Agent, the
contained in this bill are strongly recommended | Deputy Reserve Agent acts in his place. The
by the Federal Reserve Board, Gov. Harding, j Board has had much difficulty in obtaining
of the Board, having appeared in person before !• from class C directors men qualified to fill the
the committee to explain the necessity for this ! position of Deputy Reserve Agent. This officer is required to have the same qualifications
proposed legislation.
as
have
The several sections of the bill are separately hadthe Federal Reserve Agent; he must be an
banking experience and must not
discussed in the following report, and for the
or
in any bank.
convenience of the Senate each section proposed officer, director, not stockholderofficer, and his
As a rule, he is
a salaried
to be amended is printed so as to show existing only
paid directly
law and the proposed change in existing law. upon compensation is the fees although he is
attendance of meetings,
The existing law is shown in roman type, that compelled to be prepared at all times to assume
portion of existing law which is to be stricken the duties of Federal Reserve Agent in case of
out is shown in line type, and new matter is the absence or disability of that officer. This
shown by italics.
involves a transfer and auditing of securities,
and the deputy reserve agent would find it
SECTION 1.—ASSISTANTS TO RESERVE AGENTS.
most inconvenient to leave his business and reThat section four of the act approved De- port immediately to the bank on short notice.
cember twenty-third, nineteen hundred and The adoption of the amendment will more
thirteen, known as the Federal Reserve Act, definitely fix the responsibility for the funds
be amended by striking out the sentence and operates to give the board more latitude
reading as follows: "One of the directors of in the selection of class C directors.
class C, who shall be a person of tested banking The amendment in this section further proexperience, shall be appointed by the Federal vides that one of the directors of class C shall
Reserve Board as deputy chairman and dep- be appointed by the Reserve Board as vice
uty Federal Reserve Agent, to exercise the chairman to exercise the powers of chairman
powers of the chairman of the Board and of the Board in case of the absence or disaFederal Reserve Agent in case of absence or bility of the Federal Reserve Agent. Under
disability of his principal," and by adding in existing law the Deputy Reserve Agent is also
place thereof the following:
deputy chairman.
"Subject to the approval of the Federal Reserve
Board, the Federal Reserve Agent shall appoint
one or more assistants. Such assistants, who
shall be persons of tested banking experience, shall
assist the Federal Reserve Agent in the performance of his duties and shall also have povjer to act
in his name and stead during his absence or disability. The Federal Reserve Agent may require
such bonds of his assistants as he may deem
necessary for his own protection. Assistants to
the Federal Reserve Agent.shall receive am annual
compensation to be fixed and paid in the same
manner as that of the Federal Reserve Agent.
One of the directors of class C shall be appointed
by the Federal Reserve Board as vice chairman to
exercise the powers of the chairman of the Board
in case of the absence or disability of the Federal
Reserve Agent; in case of the absence of the chair-




SECTION 2. EXTENDING CLEARING AND COLLECTION FACILITIES TO NOXMEMBER BANKS.

The following shows the proposed change in
existing law:
SEC. 2. That the first paragraph of section
thirteen be amended so as to read as follows:
*
#
*
#
[See Section 2 of Senate bill, printed above.]
Section 2 proposes to amend the first paragraph
of section 13 of the Federal Reserve Act so as to
permit nonmember banks or trust companies to
deposit funds in Federal Reserve Banks solely
for the purposes of exchange or collection. This
privilege is to be extended only in the event that
such nonmember bank or trust company maintains with the Federal Reserve Bank of its district

MARCH 1,1917.

FEDEBAL RESERVE BULLETIN.

such a balance as in the judgment of the Federal
Keserve Board may be deemed necessary.
Any clearing and collection plan to be effective must be comprehensive enough to include
all checks. The following statement from the
members of the Federal Reserve Board is in
justification of this proposed amendment:
It is contemplated that the compensating balances vrhich
nonmember banks participating in the clearing plan vill
be required to keep vdth "Federal Reserve Banks will be
sufficiently large to protect member banks and justify
Federal Reserve Banks in undertaking the service. Any
clearing and collection j>lan to be effective must be so
comprehensive as to include all checks. At present the
par lists of the Federal Reserve Banks include the names
of banks checks on which can be collected in any circumstances at a minimum of time and expense, but do not
embrace a large number of tov.-ns in every State where
there are no member banks; and in order to make collections on such points many banks are obliged to maintain
accounts in addition to their reserve accounts with the
Federal Reserve Banks. A necessary factor in any successful clearing plan is the offset whereby balances only
require settlement instead of the total volume of transactions. As long as the clearing system does not embrace
all of the banks, this offset is lost in a corresponding degree
and the value of the system diminished in proportion.
SECTION 3. FOREIGN ACCEPTANCES.

SEC. 3. That the fifth paragraph of section
thirteen be, and is hereby, amended so as to
read as follows:
*
*
*
#
[See section 3 of Senate bill, printed above.]
Section 3 proposes to amend the fifth paragraph of section 13 of the Reserve Act so as to
permit the Federal Reserve Board to authorize
member banks to accept foreign bills of exchange growing out of transactions involving
the importation or exportation of goods to an
amount not exceeding 100 per cent of its paidup and unimpaired capital and surplus. The
acceptance for any one person, company, or
firm, is restricted, however, to not more than
20 per cent of the bank's paid-up and unimpaired capital and surplus.
SECTION 4. GOLD AND GOLD CERTIFICATES AS
COLLATERAL SECURITY FOR THE ISSUANCE OF
FEDERAL RESERVE NOTES.

SEC. 4. That section sixteen, paragraphs
two, three, four, five, six, and seven, be further
amended and reenacted so as to read as follows:
*
*
*
*
[See section 4 of Senate bill, printed above.]
The amendment to section 16 will permit the
Federal Reserve Banks to receive gold coin and
gold certificates in exchange for Federal Reserve notes, which is now done by indirection.
It is of great importance to the Federal Reserve System to attract to the Federal Reserve




82341—17

6

189

Banks a large amount of gold which now serves
no very useful purpose in the pockets of the
people or as till money in the member banks.
The adoption of this proposal would result in
causing the gravitation into Federal Reserve
Banks of probably §200,000,000 of gold. It
would strengthen the potentiality of the bank
in accommodating our national commerce by
giving to these banks the power, in case the
exigency should ever arise, and to the extent
that this gold should be attracted into the custody of the Federal Reserve Banks, to issue
Federal Reserve notes against qualified commercial paper at par, and would have- the effect
of magnifying the power of the banks and
strengthening public confidence in the Federal
Reserve System.
The Imperial Bank of Germany has demonstrated the value of the system of issuing legaltender notes against commercial bills of a qualified class. It has had a very great stabilizing
effect upon Germany's finance, industry, and
commerce.
The Bank of England has on occasion, by a
ministerial permit, authorized the issuance of
legal-tendo/notcs against commercial bills.
The Federal Reserve System has been very
much more conservative than either of these
plans, requiring as security for Federal Reserve
notes 100 per cent in qualified commercial
bills plus 40 per cent gold, besides the security
of tlie entire banking system of the United
States, which is, of course, behind these notes,
with its capital, surplus, and double liability
of stockholders.
The effect of the proposed amendment is to
permit the Federal Reserve Banks, if the occasion should ever arise, to issue to the limited
extent that it has received gold in lieu of Federal Reserve notes—to that extent and to that
extent only—Federal Reserve notes against 100
per cent of qualified commercial bills of short
maturities, underwritten by member banks, as
required by statute.
Your committee regards this as an important improvement in the system.
SECTION 5. PERMITTING DEPOSITS OF GOLD
COIN AND GOLD CERTIFICATES WITH THE
TREASURER AND SUBTREASURER TO THE
CREDIT OF THE FEDERAL RESERVE BOARD.

SEC. 5. That section sixteen be further
amended by adding at the end of the section
the following:
*
*
*
*
*
[See section 5 of Senate bill, printed above.]
This is added for the convenience of the
Federal Reserve Board in making its adjust-

190

FEDERAL RESERVE BULLETIN.

ments of gold and gold certificates, so as to
permit these adjustments to be made by a
system of bookkeeping rather than by the
actual physical transfer of the gold and gold
certificates.
SECTION 6. RELIEVING NATIONAL BANKS OF THE
NECESSITY OF KEEPING ON DEPOSIT UNITED
STATES BONDS WITH THE TREASURER.

SEC. 6. That section seventeen be, and is
hereby, amended so as to read as follows:
"SEC. 17. So much of the provisions of section fifty-one hundred and lifty-nine of the
Revised Statutes of the United States, and
section four of the Act of June twentieth,
eighteen hundred and seventy-four, and section
eight of the Act of July twelfth, eighteen hundred and eighty-two, and of any other provisions of existing statutes as require that before
any national banking associations shall be
authorized to commence banking business it
shall transfer and deliver to the Treasurer of
the United States a stated amount of United
States registered bonds, and so much of those
provisions or of any other provisions^ of existing
statutes as require any national hanking associations now or hereafter organized to maintain a
minimum deposit of such honds with the Treasurer

is hereby repealed."
This proposed amendment merely obviates a
practice no longer required under the Federal
Reserve Act of compelling national banks to
keep a minimum deposit of United States
bonds with the Treasurer of the United States.
National banks are no longer required to
keep outstanding a minimum amount of circulating notes and a newly organized bank is
not obliged to purchase or carry any bonds of
the United States; but there are a number of
national banks, organized before the passage
of the Federal Reserve Act, which have retired
their national bank circulation in full, yet they
are, under a construction of the old law, required to keep on deposit with the Treasurer
of the United States a certain minimum of
United States bonds. The committee believes
that these banks should be relieved of further
obligation in this matter.
SECTION 7. RESERVES.

SEC. 7. That section nineteen be amended
and reenacted so as to read as follows:
[See section 7 of Senate bill, printed above.]
This section provides for a readjustment and
decrease in the reserves required of the member




MARCH 1,

1917.

banks. The object of the amendment is twofold. First, to increase the gold holdings of the
Federal Reserve System, and thus strengthen
the system against any exigency that may result from the European war, and secondly, to
decrease the amount of reserves required of
member banks. The amendment would add
approximately §200,000,000 of gold to the present holdings' of the Federal Reserve Banks.
The amendment also proposes to require the
member banks to maintain in their own vaults,
for till money, an amount equal at least to 4 per
cent of its demand deposits.
SECTION 8. PERMITTING DIRECTORS, OFFICERS,
OR EMPLOYEES OF MEMBER BANKS TO RECEIVE INTEREST ON DEPOSITS AND TO OBTAIN
ACCOMMODATIONS UNDER CERTAIN RESTRICTIONS.

SEC. 8. That that part of section twenty-two
which reads as follows: "Other than the usual
salary or director's fees paid to any officer,
director, or employee of a member bank and
other than a reasonable fee paid by said bank
to such officer, director, or employee for services rendered to such bank, no officer, director,
employee, or attorney of a member bank shall
be a beneficiary of or receive, directly or indirectly, any fee, commission, gift, or other consideration for or in connection with any transaction or business of the bank," be, and hereby
is, amended and reenacted so as to read as
follows:
"Other than the usual salary or director's
feesfee paid to any officer, director, e^ employee,
or attorney of a member bank, and other than a
reasonable fee paid by said bank to such officer,
director, e? employee, or attorney for services
rendered to such bank, no officer, director, employee, or attorney of a member bank shall be
a beneficiary of or receive, directly or indirectly,
any fee, commission, gift, or other consideration for or in connection with any transaction
or business of the bank: Provided, however.
That nothing in this Act contained shall he construed to prohibit a director, officer, or employee
from receiving the same rate of interest paid to
other depositors for similar deposits made with
such hanlc: And provided, further. That notes,
drafts, hills of exchange, or other evidences of debt
executed or indorsed by directors of a member hanlc
may he discounted with such member bank on the
same terms and conditions as other notes, drafts,
hills of exchange, or evidences of debt upon the
affirmative vote or written assent of at least threefourths of the members of the hoard of directors of
such member hank.

MARCH 1,1917.

FEDERAL EESEEVE BULLETIN.

191

This amendment removes an evident hard- posed change will operate to fix responsibility
ship imposed upon directors, officers, and em- more definitely and will give the Board more
ployees "of member banks, who, under existing j latitude in the selection of class C directors.
law, are precluded from drawing interest on | Section 2 of the bill proposes an amendment
their deposits and prevented from obtaining i to section 13 of the Federal Reserve Act to
accommodations in their own bank. The j permit nonmember State banks and trust comamendment very properly provides for restric- j panies, even though too small to be eligible for
tions upon such loans which, in the judgment j membership in the Federal Reserve Banks, to
of the Federal Reserve Board and of your com- avail themselves of the clearing and collection
mittee, properly insures the bank against fraud facilities of the Federal Reserve System, proand incident loss.
vided they cover at par checks on themselves
sent for collection by the Federal Reserve
Bank, and provided further that they keep a
HOUSE REPORT.
compensating balance with the Federal Re[Sixty-fourth Congress, second session. House of Representatives. serve Banks in an amount to be determined
Report No. 1406. February 2, 1917.—Committed to the Committee under the rules prescribed by the Federal
of the Whole House on the state of the Union and ordered to be printed. Reserve Board.
On this point the Federal
Mr. Glass, from the Committee on Banking and Currency, submitted
Reserve Board says:
the following Report, to accompany II. R. 20601.]
It is contemplated that the compensating balances which
The Committee on Banking and Currency, nonmember banks participating in the clearing plan will
to which was referred II. It. 20661, to amend be required to keep with Federal Reserve Banks will be
the* act approved December 23, 1913, known sufficiently large to protect member banks and justify
Any
as the Federal Reserve Act, as amended by the Federal Reserve Banks in undertaking the service. be so
clearing and collection plan to
must
acts of August 4, 1914, August 15, 1914, March comprehensive as to include all be effective present the
checks. At
3, 1915, and September 7, 1916, report the bill par lists of the Federal Reserve Banks include the names of
banks checks on which can be collected in any circumwith the recommendation that it do pass.
minimum of time and
but
The modifications of the Federal Reserve stances ata alarge number of towns inexpense,State do not
embrace
every
where
Act proposed by this bill were all suggested there are no member banks; and in order to make coland are strongly recommended by the Federal lections on such points many banks are obliged to maintain
Reserve Board and, in large measure, are ap- accounts in addition to their reserve accounts with the
Reserve Banks. A necessary factor in any sucproved by the advisory counsel to the Federal Federalclearing plan is the offset whereby balances only
cessful
Reserve Board.
require settlement instead of the total volume of transThe suggestion in the first provision of the | actions. As long as the clearing system does not embrace
bill to abolish the title and office of Deputy I all of the banks, this offset is lost in a corresponding degree
Federal Reserve Agent and to authorize the j and the value of the system diminished in proportion.
Federal Reserve Agent to appoint one or more j Section 3 of the bill is an amendment of secassistants qualified to act for the Federal j tion 13 of the Federal Reserve Act designed to
Reserve Agent, when necessary, was suggested restore the provision which was, by error,
by the Federal Reserve Board for the reason stricken from the act in the amendments of
that the practical administration of the act September 7, 1916, thus restoring to national
has developed the fact that there has been banks, with the approval of the Federal
much difficulty in filling the office of Deputy Reserve Board, the right to accept up to 100
Federal Reserve Agent from the class C per cent of their capital and surplus m transdirectors. This officer is required to have the actions based upon the exportation and imsame qualifications as the Federal Reserve portation of goods.
Agent; lie must have had. banking experience
Section 4 of the bill proposes an amendment
and must not bo an officer, director, or stock- to section 17 of the Federal Reserve Act to
holder in any bank. At the same time lie is make clear the intention of the act to cancel
not, as a rule, a salaried officer and receives all provisions of the national-bank act which
only tho customary fees paid directly for require national banks to maintain a minimum
attendance upon meetings. He is obliged' to be deposit of Government bonds with the Treasprepared to assume the duties of the federal urer of the United States. National banks are
Reserve Agent in case of absence or disability no longer required to keep outstanding a miniof that officer, which involve a transfer and mum amount of circulating notes, and a newly
audit of securities and accounts. The Federal organized bank is not obliged to purchase or
Reserve Board suggests, and the Committee on carry any bonds of the United States; but
Banking and Currency believes, that the pro- there are a number of national banks organized




192

FEDERAL EESEEVE BULLETIN.

before the passage of the Federal Reserve Act
which have retired their national-bank circulation in full, yet they are, under a construction
of the old law, required to keep on deposit with
the Treasurer of the United States*a certain
minimum of United States bonds. The Federal Reserve Board feels, and the committee
agrees, that it is just to these banks that they
be relieved of this obligation.
Section 5 of the bill proposes to amend and
reenact section 19 of the Federal Reserve Act
so as to reduce the statutory reserves of member banks and to require all of the reserves of
these banks to be deposited in the Federal
Reserve Banks. The primary purpose of the
proposed change is to increase the gold holdings
of the Federal Reserve System so as to enable
the system the better to withstand any exigency that may ensue by reason of conditions
.that might arise out of the European war. The
amendment suggested would add approximately $300,000,000 of gold to the present
holdings of the Federal Reserve Banks, while
slightly reducing rather than increasing the
reserve requirements of member banks. The
law thus modified would leave to the business
judgment and discretion of member banks the
determination of the amount of currency they
should carry in their own vaults to meet their
daily business requirements. Respecting this
amendment the Federal Reserve Board says:
The control of gold by Federal Reserve Banks in times
of abundance, such as at present will decrease the danger
of inflation of domestic credits and at the same time will
enable the country when the tide turns to part v;ith large
sums of gold with less inconvenience or shock, thus enabling us more safely and effectively to proceed with the
development of our foreign trade and to give the necessary
credit facilities for its extension. The United States
should be in a position to face conditions which may call




MARCH 1,

1917.

for an outflow of gold without any disturbances of our own
or to the world's business, and without making necessary
drastic changes in our interest or discount rates. The
amendments suggested by the board are designed to enable
the Federal Keserve Banks to withdraw gold from actual
circulation while enabling member banks at the same time
to release gold which at present is tied up in their own
vaults. The amendments are based upon the theory
that all of the individual banks should strengthen the gold
holdings of the Federal Reserve Banks. The country's
holdings of gold are not used most effectively when they
are in the vaults of a large number of banks scattered all
over the country, but its greatest use would come from concentrating it to "a greater degree in the vaults of the Federal
Reserve Banks, where it can be effectively protected when
not required and effectively used when needed. The
member bank does not require gold with which to supply
the ordinary demands of its depositors so much as currency.

Section 6 of the bill proposing an amendment to the penal section of the Federal
Reserve Act is intended to define more clearly
the rights and limitations of directors of member
banks in the matter of accepting fees and compensation other than the ordinary fees paid
for legitimate services rendered in the regular
course of business, the performance of which
service is not incumbent upon them in their
capacity of directors,
Sections 7 and 8 of the bill propose modifications of the Federal Reserve Act in the matter
of establishing domestic and foreign branches.
Under existing law Federal Reserve Banks are
required to establish domestic branches; section 8 of this bill simply empowers the Federal
Reserve Board to enforce this provision of
existing law. In the matter of foreign branches
existing law confides the sole discretion to the
reserve banks, whereas the bill under consideration empowers the Federal Reserve
Board to permit or require Federal Reserve
Banks to establish connections abroad.

193

FEDERAL EESEEVE BTJLLEIIK.

MARCH 1,1017.

INFORMAL RULINGS OF THE BOARD.
Below are reproduced letters sent out from
time to time over the signatures of the officers
or members of the Federal Reserve Board
which contain information believed to be of
general interest to Federal Reserve Banks and
member banks of the system:
Purchase of Nonnegotiablc Warrants.
(To a Federal Reserve Bank.)

The Board has given due consideration to
your letter of January 17, with which you sent
a copy of your counsel's letter of January 16,
in reference to warrants issued by the city of
. I quote below our counsel's opinion,
in which the Board concurs:
"The Board has heretofore consistently
adhered to its policy of not undertaking to pass
upon the legality of issue of any municipal
securities. There are so many technical questions involved that it would be impossible for
this office to give an opinion of value as to the
legality of any issue. To do so would require
a careful analysis of the laws of the State in
each case and an examination of the records of
the city or town issuing such securities in order
to determine whether the laws had been strictly
and technically complied with. You will recall
that for this reason the Board requires the opinion of recognized counsel or of counsel for the
city or town issuing the securities as a condition
precedent to their purchase by a Federal
Reserve Bank. I agree with counsel for the
bank that, assuming that these warrants have
been legally issued, it would be necessary for
the Board to waive that provision of its regulation which requires taxes to be payable before
the maturity of the warrant in order for your
Federal Reserve Bank to purchase any of these
warrants."
The Board is further of the opinion that a
Federal Reserve Bank should not buy a nonnegotiable warrant, and it would suggest further that in considering the purchase of warrants issued by a municipality it would be well
to ascertain what the sinking fund requirements are with reference to bonded obligations
of the municipality and whether or not these
requirements are being complied with.
FEBRUARY 13,




1917.

Acceptances.
(To a member bank.)

You ask me for a letter that would guide
you in your efforts to finance the cotton business of your clients by acceptances, and you
wish me to illustrate, step by step, how I would
do it if I were president of your bank, with
a capital and surplus of $300^000, in handling
acceptances for a cotton firm to the amount
of, say, 8100,000.
If the financing of this one firm to the extent
of SI00,000 were your only problem there would
be no difficulty at all. Your customer—let me
call him Smith for the sake of convenience—
would draw upon you at 90 days' sight, securing
you by the pledge of cotton properly stored
in a ware house independent of himself. Smith
would then proceed to sell this acceptance,
which lie could do either by going to a local
bank in your city or you could send it for him
to & St. Louis bank, or to the Federal Reserve
Bank in St. Louis, which would buy your acceptance, provided your bank commands a sufficient credit, at the rate for private discounts—
at present about 3£ per cent. Inasmuch as
you accept, for one borrower in excess of 10
per cent of your capital and surplus you could
not yourself buy the paper from your customer,
because, in that case, you would be making
him a loan and the 10 per cent limit would
apply. (Sec Federal Reserve Bulletin, Decemb e r / 1916, p. 682.) The total limit up to
which your bank can accept is $150,000, and
inasmuch as there are, I suppose, other customers in addition to Smith, for whom you
wish to undertake to finance cotton holdings,
I suggest that you arrange with a bank having
a greater capital and surplus, either in St. Louis
or elsewhere, to participate with you in any
large acceptance proposition which presents
itself. For instance, take the case of Smith.
You might properly accept for $30,000 and
let the bank with which you have an arrangement accept for the balance of the $100,000,
authorizing you to act as its agent in holding
and supervising the collateral security after
acceptance and compensating you for that
service.
I hope that this letter answers your question
and shall be glad to give you any further
information that you might wish.
FEBRUARY 19,

1917.

194

FEDERAL RESERVE BULLETIN.

MAECH 1,

1917.

Our attention has been called to section 150
of the act of March 4, 1909, which provides
in part that—
Recently there have come to the Board some
"* * * Whoever shall print, photograph,
requests of Federal Reserve Banks for ap- • or in any other manner make or execute, or
proval of purchases of warrants in excess of I cause to be printed, photographed, made or
the 25 per cent limit.
! executed, or shall aid in printing, photograph-'
The object of this letter is to inform you that ; ing, making, or executing any- engraving, phothe Board does not believe that it would be | tograph, print, or impression in the likeness of
ood policy at this time for Federal Reserve | any such obligation or other security, or any
lanks to invest in warrants. Such invest- | part thereof, * * * except by direction
ments should be encouraged during periods of ; of some proper officer of the United States
great ease of money and when rediscounts i * * * shall be fined not more than $5,000,
from member banks and offers of bankers' I or imprisoned not more than 15 years, or both."
acceptances are not expected to be heavy. ! The counsel is of the opinion that under a
At the moment, however, when indications are I literal interpretation of this act your bank
that rates are likely to harden and when ' could not engrave, photograph, print, or inake
Federal Reserve Banks must be prepared to j an impression of any part of a Federal Reserve
meet heavy demands upon them by their j note, which is an obligation of the United
member banks, the Board thinks that it is States, without violating this statute.
inadvisable to invest the funds of the Federal
It seems, however, that the Secretary of the
Reserve Banks in warrants.
Treasury has authority under the act to auFEBRUARY 20, 1917.
thorize the use of this emblem, and it is suggested that you communicate with him, making the request specifically, with a reference
Use of Note Emblem.
at the same time to the correspondence with
[To a Federal Reserve Bank.]
this office.
Your letter of January 19 asking if there is
JANUARY 31, 1917.
any legal objection to the use on the stationery
of your bank of the emblem appearing on your
The Secretary of the Treasury, with whom
Federal Reserve notes, has been duly consid- the matter was taken up, deemed such use. of
ered by the Board and by its counsel
the emblem inadvisable.
Purchases of Warrants.

(To Federal Reserve Banks.)

f




MARCH 1,1917.

FEDERAL RESERVE BULLETIN.

195

LAW DEPARTMENT.
The following opinions of counsel have been
The question to be considered is not whether
authorized for publication by the Board since i the obligation is in form a bill of exchange but
the last edition of the Bulletin:
whether, under given circumstances, such a
I bill of exchange may be said to have been
Bills of Exchange Drawn Against Actually Existing j drawn against actually existing values. This
YaJue.
;
A bill of exchange discounted before acceptance may be ! is a question of fact to be determined in each
said to be drawn against actually existing value, within case, and it would seem to be advisable for the
the meaning of section 13 of the Federal Reserve Act* Board to prescribe by regulation, or to suggest
when and only when it is accompanied by shipping by circular to Federal Reserve Banks, what
documents, warehouse receipts, or other papers securing factors should be considered in determining
title to the goods sold. An accepted bill of exchange,
unaccompanied by shipping documents or other such whether a bill of exchange has been drawn
papers, may be considered as drawn against actually against actually existing values.
existing value if drawn against the drawee at the time of,
Section 5200, Revised Statutes, which limits
or within a reasonable time after, the shipment or delivery the amount that any one person may become
of the goods sold. In this latter case there must be reason- liable to a national bank for money borrowed,
able grounds to believe th?t the goods are in existence in
the hands of the drawee either in their original form or in contains the following proviso:
the shape of the proceeds of their sale.

"But the discount of bills of exchange drawn
in good faith against actually existing values,
NOVEMBER 27, 1916.
and the discount of commercial or business
Sm: Section 13 of the Federal Reserve Act, paper actually owned by the person negotiating
after providing for the rediscount of notes, the same shall not be considered as money
drafts, and bills of exchange by Federal Reserve borrowed."
Banks for member banks, contains the followAs commercial or business paper is not
ing provision:
included in that part of section 13 of the
"The aggregate of such notes and bills Federal Reserve Act which is quoted above, it
bearing the signature or indorsement of any is evident that Congress intended to permit
one person, company, firm, or corporation
rediscounted for any one bank shall at no time Federal reserve banks to rediscount without
exceed ten per centum of the unimpaired limit "bills of exchange drawn against actually
capital and surplus of said bank; but this existing values" acquired by member banks
restriction shall not apply to the discount of under section 5200 but did not intend to exempt
bills of exchange drawn in good faith against from the limitations of section 13 that more
actually existing values."
comprehensive class of negotiable paper reThis office has been asked for an opinion on ferred to as "commercial or business paper
the question of whether or not a trade accept- actually owned by the person negotiating the
ance as defined by the regulations of the Board same." This latter class maybe said to inmay be treated as a bill of exchange drawn clude a note, draft, bill of exchange or other
against actually existing values when offered evidence of debt given in a. commercial or
for rediscount to a Federal Reserve Bank by a business transaction if the person negotiating
it is the actual owner of the debt evidenced by
member bank.
In Regulation " B , " series of 1916, a trade the instrument in question.
Congress, however, authorized Federal
acceptance is defined as "A bill of exchange
drawn by the seller on the purchaser of goods Reserve Banks to discount without limit only
that class of commercial or business paper
sold, and accepted by such purchaser."
It is clear that a bill of exchange does not which consists of bills of exchange drawn
lose its characteristics as such when it is against actually existing values. This being
true, it is necessary to determine whether the
accepted by the drawee.




196

FEDERAL RESERVE BULLETIN.

MARCH 1, 39J7.

language "actually existing values" when ap- ! The question to be determined, therefore, is
plied to trade acceptances may be said to refer | whether such an instrument may be said to be
to the value of the commodity sold and for i drawn against actually existing values.
which the bill of exchange is drawn, or can be I While section 5200 has been in force since
said to refer to the financial responsibility of ! June 3, 1864, I have been unable to find any
adjudicated case in which the language "actuthe purchaser or drawee.
The former view has been adopted by the? ally existing values" as used in the statute has
office of the Comptroller as the more reasonable been construed by the United States courts.
interpretation. This seems clearly justifiable, The question was considered, however, in the
(a) since it is unlikely that Congress would case of The Second National Bank of Oswego v.
have used the language "existing values" if it Burt, 93 N. Y. 233, when in construing the
had intended to refer merely to the financial language of section 5200, under consideration,
responsibility of an individual, firm, or corpora- the court said:
tion, and (6) because the drawee against whom
"We think it entirely immaterial whether
the bill is drawn is not legally bound to pay it such bills are accompanied by a specific bill of
until the bill is accepted.
lading in each case or are drawn against propIn other words, if such bills were excepted erty previously consigned, and existing either
in its original form or in the shape of proceeds
from the limitations of section 5200 because the of sales in the hands of the consignees. In
bank has recourse against some existing values either case the funds have already been proand is not dependent solely upon the responsi- vided by the drawer in the hands of the drawees
bility of the drawer or indorsor who discounts to meet the requirements of the obligation.
"Tho object of this provision of the Currency
it, the bank must be in a position to enforce
act was to guard national banks from the hazthis claim legally against whatever constitutes ard of loaning money in improvident amounts
the existing value against which the bill is upon speculative and accommodation paper,
drawn and must, therefore, have a lien in some but it contemplated and permitted to an unlimform evidenced by a bill of lading, warehouse ited amount the discount of paper used and
receipt, or some other documentary evidence required in facilitating the transfer of property
and money in the transaction of the legitimate
securing the bank if it discounts a "bill of ex- business of the country."
change" before it is accepted and desires to
Under this decision the test appears to be
treat it as drawn against actually existing value.
whether the drawer of the bill has furnished
In the case of trade acceptances it is understood by this office that shipping documents, to the drawee some commodity of value which
warehouse receipts, or other similar papers when converted into money will enable the
do not usually accompany the draft or bill drawee to pay the bill at maturity and whether
this commodity is in existence either in its
of exchange. It has been suggested that the
original form or in the shape of proceeds of sale
principal use of a trade acceptance is to in the hands of the drawee at the time the bill
enable the seller of goods to put in negotiable drawn.
form a claim against the purchaser for the purIf this is adopted as the true test the regulachase price of the commodity sold, which claim tions or instructions of the Board should promight otherwise be carried as a balance due on vide that a bill to be treated as drawn against
open account, and that it is customary for the | actually existing values must be drawn conseller to make a direct shipment to the pur- ! temporaneously with or within a reasonable
chaser of goods sold to him and to draw on him time after the shipment or delivery -of the
for the purchase price. When the drawee ac- goods sold and must be for the whole or part
cepts such a draft or bill of exchange, the in- of the purchase price.
strument, under the regulations of the Board,
Drafts for balances due on open accounts
drawn indiscriminately against debtors and
becomes a trade acceptance.




MARCH 1,1917.

197

FEDERAL RESERVE BULLETIN.

accepted by the drawees should not be treated existing value, and that part of the opinion just
as bills of exchange drawn against "actually above quoted was intended to point out the
existing values/ 7 but only those bills drawn fact that so far as section 5200 is concerned
at, or within % reasonable time after, the ship- it is immaterial whether an accepted bill be
ment of the goods to the consignee should be treated as a bill of exchange drawn against
existing value or commercial or business paper
considered within this class.
It is manifest that unless drafts or bills of owned by the person negotiating it, since both
exchange excopted from the limitations of classes are excepted from the limitations of
section 13 of the Federal Reserve Act are section 5200.
As commercial or business paper is not exrestricted to those which represent independent
transactions this form of paper might be used ceptod from the limitations of section 13, unmerely to evade the limitations of section 5200. less it is in form a bill of exchange drawn
In discussing section 5200 in an opinion against existing value, it is necessary to conof this office dated October 27, 1916, the follow- sider the effect that acceptance has on such a
bill.
ing statement was made:
It is clear, therefore, that a bill secured by
shipping documents, or by the pledge of goods
actually sold, might be discounted by a momber bank before acceptance without being
subject to the limitations imposed by section
5200, since this would constitute a bill drawn
in good faith against actually existing value,
When such bill has been accepted by the
drawee, and the documents attached' have
been removed, though the direct obligation
of the drawee to pay such bill at maturity

., ° n

u

this

]lc

P o i n t \Ms

ods o r th

office

f ot'^

opimonikat

t g°
e proceeds of the sale of the
goods are in the hands of the drawee, and the
draft or bill of exchange is drawn by the seller
a ! ? a r a s t t n e purchaser'for the purchase price,
s ch a b l l l a l t e r
?
.
acceptance may be treated as
drawn
against existing value.
To summarize the conclusions reached:
(1) A bill of exchange discounted before
acceptance must be accompanied by shipping
i

drawn, nevertheless, when . discounted by a
bona fide owner for value, its discount would
not be subject to the limitations of section
5200 since it would still come within the classification of "commercial or business paper
actually owned by the person negotiating the
same/'7
It lias been suggested that according to this
opinion no bill of exchange can be treated as
drawn against "actually existing values;? unless it is accompanied by shipping documents;
warehouse receipts, or some other documents
securing title to the goods sold, and that when
such a bill is accepted it ceases to be a bill
of exchange drawn against actually existing
values and becomes subject to the limitations
of section 13 of the Federal Reserve Act,
although it is not subject to the limitations
of section 5200, Revised Statutes.
A bill of exchange accompanied by shipping
documents was referred to in that opinion
merely as an example of one drawn against




securing title to the goods sold if it is to be
treated as drawn against existing value.
(2) If the bill is discounted after acceptance
it may be treated as drawn against existing
value if drawn against the drawee at the time
of, or within a reasonable time after, the shipment or delivery of the goods sold. There
must bo reasonable grounds to believe at the
time the bill is drawn that the goods are in
existence in the hands of the drawee either in
their original form or in the shape of the proceeds of their sale.
Respectfully,
M. C. ELLIOTT, Counsel.
Hon.

W. P. G. HARDING,

Governor Federal Reserve Board.
Secured by or Issued for Purposes of
Trading in Bonds or Notes of the United States.
A n y m e m b e r b a n k m a y r e d i s c o u n t with
itB F e d e r a i
Reserve Bank a note, draft, or bill drawn for the purpose
Discounfc of P a p e r

198

FEDERAL RESERVE BULLETIN.

M A R C H 1?

1017.

of carrying or trading in bonds or notes of the United j
The particular question under consideration
States, and may also procure advances from its Federal was whether a branch of a national bank could
Reserve Bank on its own promissory note secured "by a !
make loans to one person under authority of
deposit of or pledge of bonds or notes of the United States.

section 5200, Revised Statutes,, to the extent
[The text of this opinion will be found on ! of 10 per cent of the capital and surplus of the
pages 158-9.]
; parent bank, or only to the extent of 10 per
cent of the capital assigned for the business of
the branch. The Attorney General held that
Branch Banks.
j
loans could be made by the branch to one perA foreign branch established by a national bank is not ! son to an amount equal to 10 per cent of the
an independent corporation, and the creditors of the ;
branch are general creditors of the parent bank.
! capital and surplus of the parent bank.
The position taken by the Attorney General
FEBRUARY 8, 1917.
,
as to the status of the branch is in accordance
SIR: The following question has been sub- with the decisions of State courts in a number
mitted to this office for an opinion: "In the! of cases which deal with this subject. For
event of the failure of a national bank having : example, it has been held that the principal
branches in foreign countries, would the ! bank and branches together constitute but one
creditors of the branches become general j corporation, and consequently every contract
creditors of the bank or only creditors of the ! entered into by the branch is in contemplation
branch with which they were doing business?" ; of law the act of the bank itself. (Brown v.
The authority of a national bank to estab- ; Bank of the State, 5 Ark., 235, cited with aplish a foreign branch is contained in section 25 ; proval in Wallace v. State Bank, 7 Ark., 61, 65.)
of the Federal Reserve Act. Comparatively j In the case of Brown v. The Bank of the
few branches have been established, and there j State, supra, the court said:
has been no decision of any court dealing with j "We are, therefore, bound to know judicially
their status. Prior to the passage of the Federal j that there is a branch of said bank at Arkansas,
Reserve Act national banks were not permitted i and that it is but a portion or integral part of
to establish branches, but State banks having ' said corporation; consequently, every thing
branches which were converted into national I done by or to those intrusted with, the manageits business at said
banks under authority of section 5154, Revised : ment of must be considered branch in respect
thereto,
as done by or to
Statutes, were authorized to retain and to con- the corporation; because, being but an integral
tinue to operate such branches. The status of part of the whole, it can have no existence
these branches was considered in an opinion of j separate from, and independent of, the corthe Attorney General dated September 15, 1909 poration, of which it is a member only, and
(see Op. A. G., 601). In this opinion it was >therefore those who act therein can not act for,
; or as the agents of, that particular branch only,
said:
but must act for, and as agents of, the whole
I
corporation,
may
"The branch banks have no separate exist- be restricted notwithstanding their powersreferso that they can only act in
ence. * * * The parent bank with its. ence
of the
branches is one association, as contemplated j shall to such portion at that business thereof as
be transacted
particular branch
in these laws, with one set of directors or stock- \ or place."
holders, and all transactions are regarded as !
those of one corporation or institution."
j Following out this line of cases, it has also
In another part of the same opinion, he said: j been held that a delivery to a branch is tantamount to a delivery to the principal institution
"'Inasmuch as depositors, including the itself (Murphy v. State Bank, 7 Ark. 57), and
United States, in any of the branch banks have j that payment to the mother bank of a debt
the protection of the whole capital, surplus, j
and undivided profits of the mother bank, irre- j due to it, though it may have arisen from disspective of how it may be divided, there is no j counting a note by a branch bank is a discharge
question of public policy involved in the con- j of the debt. (Smith v. Lawson, 18 West Va.
straction of the law as here expressed."
; 212, 241.)




MAUCH 1,

FEDERAL RESERVE BULLETIN.

1917.

Section 25 of the Federal Reserve Act, as
amended by the Act approved September 7,
1916, provides that:
Any national banking association possessing
a capital and surplus of 81,000.000 or more
may file application with the Federal Reserve
Board for permission to exercise, upon such
conditions and under such regulations as may
be prescribed hj the said Board, either or both
of the following powers: •
First. To establish branches in foreign countries or dependencies or insular possessions of
the United States for the furtherance of the
foreign commerce of the United States, and to
act, if required to do so, as fiscal agents of the
United States.
>£

*

%

*

%

Such application shall specify the name and
capital of the banking association filing it, the
powers applied for, and the place or places
where the banking operations proposed are to
carried on. * * *
Every such national banking association
shall conduct the accounts of each foreign
branch independently of the accounts of other
foreign branches established hj it and of its
home office, and shall at the end of each fiscal
period transfer to its general ledger the profit
or loss accrued at each branch as a separate
item.
There is nothing in this language to indicate
that branches established in foreign countries
are to have a separate existence and constitute
separate corporations. On the contrary, it is
clear that the parent bank is merely to engage
in certain foreign transactions through its
foreign branch. This viow is substantiated by
the fact that the profit and loss accruing to each
bank is to be entered on the general ledger of
the parent bank at the end of each fiscal year.
The status of all claims against insolvent
national banks is fixed by sections 5235 and
5236, Revised Statutes. These sections provide in part as follows:
SEC. 5235. The comptroller shall, upon appointing a receiver, cause notice to be given, by
advertisement in such newspapers as he may
direct, for throe consecutive months, calling on
all persons who may have claims against such
association to present the same, and to make
legal proof thereof.




199

SEC. 5236. From time to time, after full provision has boon first made for refunding to the
United States any deficiency in redeeming the
notes of such association, the comptroller shall
make a ratable dividend of the money so paid
over to him by such receiver onfall such claims
as may have been proved to his satisfaction or
adjudicated in a court of competent jurisdiction. * * *
It will be observed that in case of insolvency
of a national bank all claims against the estate
of the bank are paid rat ably except the claim
of the United States for any deficiency in the
security deposited as collateral for the circulating notes of the bank.
As no priorities are recognized by the statute
the creditors of a branch of a national bank
would, in the opinion of this office, bo general
creditors of the parent bank and would be permitted to prove their claims in the same manner as local creditors.
Respectfully,
M. C. ELLIOTT, Counsel.
Hon. W. P. G. HARDING,

Governor Federal Reserve Board.
Transfer of Federal Reserve Bank Stock.
A national bank acquiring assets of another national
bank in liquidation is not entitled to have transferred to
it the Federal Reserve Bank stock held by the liquidating
bank.
FEBRUARY 3, 1917.

SIR: From the attached correspondence it
appears that a certain national bank A went
into voluntary liquidation, and its assets were
apparently taken over by the B National Bank,
the name of the latter bank being changed to
the A-B National Bank. The cash-paid subscriptions of the A National Bank were returned
to the liquidating agent, but claim is now made
for accrued dividends on these subscriptions.
Counsel for the Federal Reserve Bank has advised that bank that under the law it is not
authorized to pay an amount in excess of the
book value of the stock held by the A National
Bank at the time that it went into liquidation.
This is entirely in accord with the views of
this office as expressed in numerous opinions.

200

FEDERAL RESERVE BULLETIN".

MARCH 1,

1917.

The language of the Act is clear and unam- Drafts Payable with Interest.
biguous. As pointed out by counsel, it pro- A provision in a draft or bill of exchange that it is payable "with interest at the rate of — per cent per annum
vides that in case of voluntary liquidation—
after maturity if payment is delayed " does not; affect the
"* * * ^ e shares surrendered shall be negotiability of the instrument.
cancelled and the member bank shall receive
FEBRUARY 19, 1917.
in payment therefor, * * * a s u m equal
to its cash-paid subscriptions * * * and
SIR: The attached form of trade acceptance,
one-half of 1 per centum a month from the which provides that payment shall be "in
period of the last dividend, not to exceed the funds current in or with exchange upon
book value thereof."
Chicago, 111., or New York, N. Y., and with
This statute fixes the cash surrender value interest at the rate of — per cent per annum
of stock held by a bank which withdraws from | after maturity if payment is delayed; value
the system by going into voluntary liquida- i received out of the purchase of machinery or
tion. The status of such bank is changed from | other goods, wares, and merchandise from us;
that of stockholder to that of creditor to the j and charge the same to our account," has been
extent of this cash surrender value. The stock ; submitted to this office for consideration.
in question can not be transferred or hypotheApparently the only disputed question is
cated. It is not possible, therefore, under the whether the words "with interest at the rate
terms of this Act for the National Bank A in of — per cent per annum after maturity if payliquidation to transfer its rights to the A-B : ment is delayed77 destroy the negotiability of
National Bank, which is a separate and dis- I the draft on the ground that it would not be
tinct corporation. This situation is substan- payable in a sum certain in money as required
tially similar to that of a national bank going by section 1 of the Negotiable Instruments
into liquidation, its assets being taken over by ! Law.
a State bank and the State bank entering the ! Section 2 of that Act provides that "the
system. This situation was considered in an I sum payable is a sum certain within the meanopinion filed with the Board and published on ing of this Act, although it is to be paid (1) with
page 117 of the February, 1917, Federal
interest; * * * (4) with exchange, whether
Reserve Bulletin.
at a fixed rate or at the current rate/ 7 etc. It
If the National Bank Act provided for the is evident, therefore, that a draft payable in a
consolidation of two banks so as to obviate the I definite sum plus interest is a draft payable in
necessity of one going into liquidation, a differ- a sum certain in money, even though the exact
ent situation might result but the mere fact amount due at maturity must be figured by an
that the assets of the liquidating bank are addition of the amount prescribed on the face
taken over by another does not, within the of the bill and the interest based on that
terms of the statute, give the liquidating bank amount for the duration of the draft.
the right to transfer its stock to the new bank.
The acceptance under consideration is even
Respectfully,
I more definite than that which is thus shown to
M. C. ELLIOTT^ Counsel. ; be permissible under the Negotiable Instru| ments Law, because it is payable at maturity
Hon. W. P. G. HARDING,
j in the sum fixed on the face of the instrument,
Governor Federal Reserve Board,




MARCH 1,1917.

FEDERAL RESERVE BULLETIN.

201

and the question of interest arises only if the i jectionable than the stipulation concerning
1
draft is not paid when due and applies only to attorney fees, which was considered in the case
the time elapsing between the date of maturity |1 of Seaton v. Scovill (18 Kans., 433), for there
the amount was not fixed and named, but the
and actual payment.
i stipulation was for reasonable attorney fees.
It is generally held by the courts that a pro- : (See also 1 Daniel on Neg. Insts., sees. 53, 54,
vision in a bill or note that in case of nonpay- : 61, 62: Tholen v. Duffy, 7 Kans., 410: Goulds.
ment at maturity a certain specified rate of Bishop Hill Co., 35 HI., 325.)"
interest shall be paid from the date of the note I The clause in the acceptance under considdoes not make the amount to be paid at" | eration differs from that discussed above only
maturity uncertain. (See Norton on Bills and • in that interest applies from the date of maNotes, 4th ed., p. 76, note 17, and cases cited.) turity instead of from the date of the instruIn the case of Parker v. Plymell (23 Kans., : merit. To that extent it would seem to be all
402) the court considered the negotiability of i the less uncertain, and it is, therefore, the
a note containing the words "If this iaote is not opinion of this office that the acceptance in
paid at maturity the same shall bear 12 per question is not rendered ineligible because of
cent interest from date/' and it was said:
the provision for the payment of interest if the
"Clearly these words do not destroy the acceptance is not paid at maturity.
negotiability of the paper. They do not leave
In an opinion printed on page 458 of the
uncertain either the fact, the time, or the September, 1916, Federal Reserve Bulletin,
amount of payment. Indeed, up to and including the maturity of the notes, they are jit was shown that a bill payable "with cxentirely without force. They become opera- | change'' is payable in a sum certain within the
tive only after the notes are dishonored and meaning of the Negotiable Instruments Law,
have ceased to be negotiable, and then there is so that question need not be discussed here.
no uncertainty in the manner or extent of their
Respectfully,
operation. They create, as it were, a penalty
M. C. ELLIOTT, Counsel.
for nonpayment at maturity, and a penalty
the amount of which is definite, certain, and
Hon. W. P. G. HARDING,
fixed. In this respect they are even less obGovernor Federal Reserve Board.




202

MARCH -1, 1.9.17.

FEDERAL RESERVE BULLETIN.

SUMMARY OF BUSINESS CONDITIONS FEB. 23, 1917.
District No. 1—
Boston.
G eneral business

District No. 2—
New York.

Large volume being
transacted.

Good; larger than
a year ago.

Crops:
Condition.
Outlook.
Industries of the district,

Busy mainly on old
orders.

Construction, building and engineering.

Busy.

Foreign trade

New record.

Bank clearings.

Little change.

Money rates

Increasing.

Railroad, post-office,
and other receipts.

.do.

Labor conditions

.' Fully employed

Outlook..

I Moderately good,
i but much hesita| tion.
Business in general
is awaiting outcome of international situation.

Remarks.

i
District Mo. 7—
Chicago.
General business
Crops:
Condition.
Outlook...
Industries of the district.
Construction, building, and engineering.

Active; some uncertainty.
Good

District No. 3—
Philadelphia.
Good.

Active

! Quiet but good

Good.

: Highly satisfactory

Uncertain.

I

Fair
i Must have more
moisture.
Busv

Busv despite rail- ''• Active...
road difficulties. :
Prospects good
" Increase..

Active.
Quiet..

I Increase

Money rates.

Increasing

j Steady to firm

Railroad, post-office,
and oilier receipts.

Post-office receipts j Increase
increasing.

Labor conditions

• Slight increases..

Good

Steady

Increase
Unchanged,

I About the same... Increase

Fully employed at! Fair to good
high wages.
j
' Favorable
G eneral 1 y favorable. Favorable

Doubt as to the out- Wheatneedsmois- '
come of the foreign I ture and snow
situation is a re- ! protection,
straining influence. |

Very promising
Active

Favorable if sufficient rain.

! Hampered by lack

of transportation.

I l a m p e r e d b y Decrease over 1918:! 70 per cent increase
with good wca-' j over correspondweather condiIher expected j ing month last
tions.
Less activity.

Decreasing




. Good, but affected Some slowing up,
by embargoes
but very satisj and lack of fuel, i tory.

District No. 6—
Atlanta.

j District No. 8— ! District No. 9— ! District No. 10— District No. 11— j District No. 12—
j Ksmsas City.
!
Pallas.
i San Francisco.
1
St. Louis.
. Minneapolis.

Bank clearings.

Remarks.

District No. 5—
Richmond.

! Limited truck Fair.
| shipments bring| ing good prices.
j Extensive prepDo.
i orations.
Active, but ham- Very busy.
above
As active as trans- i Operating full on Continue
pered by freight
normal.
portation and j profitable basis.
fuel conditions
congestion.
permit.
Less than a year : Increased cost and Plans for future Interference by- Fair.
ago.
' scarcitjr of labor
contemplate inbad
weather,
and materials
creased activity.
b u t outlook
deterrent factors.
good.
Larger in Janu- i Still very large. No report
In good volume, Limited.
ary; imports ; Lack of ocean
but congested at
growing; retard- !: tonnage continports.
ed this month, j ues.
Increased
: C l e a r i n g s far Substantially in- 13 per cent in- Continue to inI ahead of last
creased. *
• crease.
crease.
year.
All higher; very i Hardening tend- S t e a d y , w i t h ! 4 per cent to 6 per Stiffening slightly.
firm for time j ency.
cent; increasing
higher tendenloans.
!
demand for new
cies.
i crops.
Increased volume.;! Continue
high, Good.
Increased
' Increase..
with some inI
i creases.
Well employed; ••Scarcity of help in i Good, with active .. Fully employed Fair.
scarcity on railnearly all lines I demand for all ; at good wage's.
roads.
of business. m \ kinds of skilled, j
Unsettled
; Favorable..
Consensus of opin- ! Hopeful
Good.
ion is that out- i
look is good.
|
Restrained, waitEmbargoes by : General conditions
ing attitude in
railroads and hi- ! throughout the
general business;
adequate fuel j district sound.
good prospects
supply
have '
for
domestic
been deterring j
spring trade.
influence in all i
lines.
;

Foreien trade...

Outlook

District No. 4
Cleveland.

| Satisfactory.
I Promising

I

above normal, j year.
Increase
I Large increase in
exports.
38perccntincrease I 50 per cent increase
over correspondfor January over
1916.
*
I ing month in
1916.
Rates easy, no cyi- j Easy.
donee of material j
change.
j
Railroad increase j Increasing.
over 1916; post |
office, 18 per :
cent increase. I
"Well employed; Fairly settled.
.good demand for
laborers.
Very promising. Favorable.
Spring trade,
though early,
very good.
No change in the Business is at a
generally good
high tide of prosbusiness* condiperity.
tion.

MAECH 1,1917.

FEDERAL EESEEVE BULLETIN.

203

GENERAL BUSINESS CONDITIONS.
There is given on the preceding page a sum- ! The cotton goods industry is quieter, with
mary of business conditions in the United '.new buying orders very limited. Mills are
States by Federal Reserve districts. The re- busy on old advance contracts. The demand
ports are furnished by the Federal Reserve for goods for future delivery which was so
Agents, who are the chairmen of the boards of j urgent a few months ago has practically subdirectors for the Reserve Banks of the several, sided. Buyers are apparently waiting for
districts. Below are the detailed reports as of lower prices or clearer general conditions
approximately February 23:
before entering into new commitments.
Money rates in this district are firm. ComDISTRICT NO. 1—BOSTON.
mercial paper handled by brokers is moving
While business continues in large volume, so slowly and many merchants who are acmuch uncertainty exists regarding the future customed to sell their paper in the open
that merchants and manufacturers are await- market are now going to their own banks.
ing further developments before entering into Call money, 4 per cent; time money, 4* per
new commitments. Apprehension regarding cent upward for four to six months; year
international conditions is the predominant money, 4 | per cent; town notes are selling as
feature of the present situation. Mills and high as 4 per cent for fall maturities. Notes
factories, however, appear to have sold their of Massachusetts municipalities, exempt from
output so far ahead that, despite the feeling of Massachusetts taxes and duo soon after April 1
hesitation, they are being run as nearly at (tax day), are selling at 2\ per cent discount
capacity as labor and material conditions will upward as compared with par plus a premium
at this time last year. Bankers acceptances,
permit.
There has been much, press comment of late 3J per cent indorsed, 3-| per cent upwards
regarding railroad embargoes, but this has unindorsed.
applied rather to other lines east of Chicago
Loans and deposits of the Boston Clearing
than to those entering this district, the em- House banks have within the last two weeks
bargoes in force here being but a trifle more reached a new high point, while excess reserves
restrictive than last month. It is expected have decreased to a point far below the high
that with the advent of warmer weather records made in October, 1915. Loans and.
freight conditions will be much improved.
discounts on February 17, 1917, amounted to
Leather prices are firmer, due partly to the- $472,293,000 as compared with 8449,217,000
fact that inasmuch as our imports of hides are last month and 8397,580,000 on February 12,
greater than our exports of leather, any cur- 1916. Deposits on February 17, 1917, totaled
tailment of our exports and imports would $366,275,000 as compared with 8366,139,000
tend to cause a shortage in that commodity. on January 20, 1917, and $336,748,000 on
The between-seasoiis period in the boot and February 12, 1916. The amount "due to
shoe, industry has caused a decrease in the banks" on February 17 was 3146,432,000 as
activities of shoe factories.
compared with $149,955,000 on January 20.
There is little change in the woolen and The excess reserve of these banks decreased
worsted industry. Mills continue very bus}" from $42,314,000 on January 20 to $26,110,000
with orders booked well, ahead. Wool prices on February 17.
are still advancing. There is little or no
Exchanges of the Boston Clearing House for
domestic wool in the market and it will be some the week ending February 17, 1917, were
months before any considerable part of the $231,906,304, compared with. $217,128,678 for
new wool, already contracted for on the sheep's the corresponding week last year and $261,back, will be received.
325,917 for the week ending February 10, 1917.




204

FEDERAL RESERVE BULLETIN.

Building and engineering operations in New
England from January 1 to February 14, 1917,
amounted to $20,167,000 as compared with
$17,767,000 for the corresponding period of
1916 and $21,168,000 for the same period in
1914, the highest previous year on record.
Imports and exports of the port of Boston
for January, 1917, established new high records. Exports amounted to $24,193,104 as
compared with $21,669,660 for December, 1916
(the largest amount previously recorded) and
$8,322,467 for January, 1916.
Imports amounted to $32,419,881 as compared with $19,381,587 for December, 1916,
and $22,258,716 for January, 1916. The previous high record of imports was $28,581,611
made in February, 1916.
The principal exports were horses, munitions, wheat, and leather, while the imports
consisted to a large extent of wool and hides.
The receipts of the Boston post office for
January, 1917, show an increase of $80,476 or
about 11 per cent over January, 1916. For
the first 15 days of February, 1917, receipts
were about 6 per cent, or $21,940 more than
for the corresponding period last }^ear.
Boston & Maine Railroad reports net operating income, after taxes, for December, 1916,
as $1,078,648 as compared with $917,548 for
the corresponding month of 1915. New York,
New Haven & Hartford Railroad reports net
operating income, after taxes, for December,
1916, as $1,786,359 as compared with $1,463,078
for the same month last year.
DISTRICT NO. 2—NEW YORK.
Business in general manifested but little
disquiet over the recent serious change in
American foreign relations.
More conservative tendencies and caution
in making long commitments had been apparent for some time and, thus, commerce and
industry were in a measure prepared for the
unexpected developments.
Sharp declines in prices of listed securities
were quickly followed by substantial recoveries and a dull, comparatively steady market.




MARCH 1,

1017.

Uneasiness among the foreign element caused
withdrawals of small deposits in isolated instances, particularly in the larger cities, but that
lasted only a few days.
To meet the increasing demands for currency, this bank issued Federal reserve notes
for $32,500,000, from February 1 to 19,
inclusive, against §9,800,000 paid out during
the preceding month and S6,250,500 in February a year ago.
Low rates for money prevailed in the open
market from the beginning of the year until
February 1. The market then became narrower and much firmer, particularly for all
time loans and rates generally advanced h to
1£ per cent. Prime commercial paper, which
sold at 3 per cent in January, is now 4J per
cent. Bankers7 acceptances, sold in the open
market at 2f per cent a few weeks ago, are now
offered at 3f per cent.
There is a growing demand for commercial
loans, created in part by borrowers who, in
these uncertain times, prefer to anticipate
future requirements, but chiefly the- result of
continued activity in trade and industry, high
and rising costs of goods and materials, and
the congestion of freight.
The greatest handicap to domestic and foreign trade is the transportation problem. For
over a year the railroads have been unable to
handle promptly the enormous movement of
merchandise. The situation has been made
more serious during the last few weeks by
extremely cold weather and postponed sailings of ships. Railway lines and terminals
are crowded with unloaded cars; mills and
factories can not get prompt deliveries of fuel
and raw materials.
Notwithstanding all the drawbacks and the
more restrained, waiting attitude of business
in general, reports indicate a large volume of
spring trade, satisfactory payments and continued activity in the production and sale of
goods.
The New York Clearing House banks on
February 17, 1917, reported loans, etc.,
83,466,662,000, deposits $3,706,146,000, and

MARCH 1,1917.

FEDERAL RESERVE BULLETIN.

205

excess reserves §165,715,220. Since Decem- good margin on the increased costs of producber 30, 1916, these totals have increased as tion.
follows:
Goal.—There is a heavy demand for coal at
a time of limited output at the mines. Prices
Loans, etc
$127,212,000
Deposits
212, 089, 000 are extraordinarily high and scarcity in yard
Excess reserves
48,379,530 labor, severe weather conditions and abnormal
Large additional imports of gold have been demands have caused much embarrassment to
received recently, bringing the total inflow, anthracite dealers. Both wholesalers and retailers have been overrun with orders for
since January 1, up to $101,500,000.
quick deliveries to fill consumers7 needs.
DISTRICT NO. 3.—PHILADELPHIA.
Prices of bituminous coal have hardened
According to reports received from all parts recently, car shortage still being the disturbing
of this district, the difficulties of the railroads factor. There is about a 20 per cent deficiency
and steamship companies in moving goods in the supply of coke, due also to car shortage.
promptly, the scarcity and inefficiency of
Cotton yarns.—Extreme quiet prevails in the
labor, and the increased cost and inadequate local cotton-yarn market. The slackening in
supply of coal and other materials, are some- the demand for yarns has been due to the dewhat curtailing production. Activity contin- cline in the price of cotton and to the fact that
ues in practically all industrial and other lines of manufacturers are well stocked up for three to
business, and no difficulty is experienced in dis- five months ahead.
posing of products, and orders in hand insure
Dry goods and notions.—Good business is rethe operation of mills for months to come.
ported by the wholesale dry goods houses, with
In some localities, there is much conserva- prices generally remaining firm. Buyers are
tism in the placing of new orders. Quite a assuming a conservative attitude. In the dressnumber of important industrial concerns are goods trade fall lines have been entirely sold out
enlarging their plants. Collections are gen- in many cases and withdrawn from the market.
erally reported to be satisfactory.
Glass.—The plants are running at as near
There is a general feeling of confidence and capacity as possible. Orders in some cases
optimism as to the future, but on account of the have been refused, owing to inability to increase
extraordinary conditions and the uncertainty production. The labor situation is serious.
of the foreign situation, it appears that busiGroceries.—Prices of groceries have generally
ness is being conducted in a conservative way. advanced. Canned goods are higher and scarce.
Automobiles.—The automobile pleasure car Sugar is being shipped from New York and Bosbusiness is usually dull during the winter ton for temporary needs. It is thought that
months. This winter, however, business has the strike situation in the refineries in this city
been good. Costs of materials have greatly will be satisfactorily adjusted within a short
increased, and they are not altogether offset time. There is no famine here. Prices were
by increases in selling prices. A leading pro- forced up because all consumers were trying to
ducer of trucks reports sales ahead of last year, buy much more than their normal amount bewith prospect for continued heavy demand. No cause of the fear of a shortage.
early falling off in the cost of labor and materials
Hardware.—Scarcity in many lines continues
is expected. Rapid expansion has not been and prices are firm. The volume of business is
possible because of the inability to procure suffi- satisfactory.
cient labor, machinery, and other materials.
Iron and steel.—General conditions among the
Cement—The cement plants are reported to ! iron and steel industries are reported to be quite
be busy and prospects for the future are good. satisfactory as to prices and volume of business;
Selling prices are high enough to return a operating conditions, however, arc not satisfac-




206

FEDERAL RESERVE BULLETIN.

MABCH 1, 1917.

tory because of labor conditions in mills and gestion is serious, and the fact that many people
mines, scarcity of materials, and the inability prefer to pay demurrage charges rather than
of the railroads to handle the business.
store the goods in warehouses at higher figures
Leather.—The leather market is active; aggravates the situation.
prices are firm and rising, although there is
Silk.—The broad silk business is active and
considerable recent uncertainty. Manufactur- absorbing production as fast as the product
ers are proceeding slowly in filling orders, espe- can be delivered. The ribbon business has
cially for export business, in order that they revived and is better than for some time.
may be in a better position to fill Government Present unsettled international conditions have
needs in case of military necessity. Stocks on not affected the supply of raw materials, as
hand are small, and raw skins are still scarce. they come chiefly through Japanese sources.
Locomotives.—A leading producer of locomo- Mills are being run to capacity and parts of
tives reports unprecedentedly favorable condi- some plants are being worked both day andtions as to the future, inasmuch as business in night. Several factories are being enlarged.
hand is sufficient to operate the plant to its
Textiles.—The textile industries are active,
maximum capacity during the greater part of having abundant orders on hand with no finthe year 1917.
ished stock and prospects are generally good.
Payer.—Paper mills report great difficulty in Operations are somewhat curtailed owing to
obtaining wood pulp, and the price is the high- scarcity of operators. Mills manufacturing
est ever known. Paper dealers are experienc- lace curtains have been hampered to some
ing the usual lull after the first of the year, but degree because of the shortage of certain supat this time it is more pronounced than usual, plies which come from England. Cotton-goods
because of the phenomenal business prior to the plants are running at full "capacity. Business
first of the year. Stocks are below normal and in the hosiery trade is good, but high prices of
no break in prices is expected.
yarns and scarcity of labor are disturbing
Retail trade.—Retail business is very satis- factors. One large textile mill reports that
factory and the general opinion is that war more caution .and conservatism has been noted
complications will have no immediate effect among their customers within the past 60 days,
on present conditions. Buyers are providing which they attribute partly to the uncertain
only for reasonable needs. Manufacturers tell international situation and partly to the
them that if they do not place orders now to recognition that prices are very high. This
cover requirements throughout the year, no condition has decidedly checked speculative
goods will be available; but there is a disposi- buying. Since it is difficult in most localities
tion to regard this as an effort to entice them to secure sufficient labor to operate at more
to stock up at current high prices. People than 80 per cent of capacity, this condition
continue to buy with care and are buying more is automatically tending to restrict overdurable goods. Some of the large stores report production.
that they are not making many more transWool.—In the local wool market, prices
actions than last year, but the transactions have advanced 7|- to 15 per cent in the last
amount to more in dollars. e
month. A decrease in imports from abroad,
Railroads.—The railroads in the district are the levying of duties on exports from South
not buying equipment to any appreciable America, high insurance rates, and the possiextent, but one road is making an effort to bility of a war demand make for an uncertain
reserve space in the steel mills for supplies market. There is a shortage in yarns, and
which will be needed at the end of the year. orders could be taken in much greater volume
Repair shops are very busy. The freight con- if they could be filled.




MARCH 1 , 1 9 1 7 .

207

FEDEBAL BESEBVE BULLETIN

DISTRICT NO. 4—CLEVELAND.

to secure proper supplies of raw materials and
General embargoes by the railroads; car to move out finished products. From nearly all
shortages, and lack of adequate fuel (gas and sections in which these industries are leading
coal) supplies, aggravated by continued ex- ones, the closing down of plants is reported.
Rubber goods.—In this district all of the factremely cold weather, have caused a marked
lessening of activities and tempering of op- tories are running to capacity, with continued
timism in industrial pursuits throughout the demands greater than their ability to supply.
district. From all sections the reports indi- Conditions in this industry appear to be more
cate inability to secure fuel to maintain oper- satisfactory than in any other lines.
Automobiles and parts.—As far as reported,
ations, as well as cars to move out finished
products or to bring in raw materials. The the activity in these lines continues unabated,
outlook for early improvement of this situa- though somewhat checked by car shortage and
tion is. however, now at least hopeful, if not fuel inadequacy. Some factories are receiving
promising.
freight rather more freely than they would if
Iron and steel trades,—The demand for all it were not that they wished the cars for outlands of iron and steel products continues going freight.
Mercantile business.—The reports indicate
insistent, and prices are firm to higher. Inadequate fuel supply has caused several blast continued activity in all mercantile pursuits,
furnaces and mills to cease operations, and money values of sales being greater than ever
lack of available cars has seriously impeded and collections normal, or better. Foodstuffs
deliveries. Billet, bar, sheet, plate, and rail are at the highest prices ever known throughproduction continues to the fullest extent out the district. Stocks in all lines are low,
possible in view of the fuel situation.
and the inclination seems to be to pursue the
Finished steel.—The embargoes have affected "hand-to-mouth" policy.
Building operations.—As is to be expected,
quite seriously the manufacturers of finished
steel in all branches, and the fuel situation the extremely cold weather has caused a fallhas curtailed operations generally. There does ing off in actual construction work, but the
not seen to be any reduction in demand, and reports indicate that the plans for the current
the general market tone is good. Factories year show steady enlargement, particularly in
are engaged in stocking up nearby customers, respect of business properties. In most of the
so as to be better enabled to handle outside communities there is indicated a considerable
business when transportation becomes available. increase in residence construction. The folCoal and other fuels.—There has been a slight lowing table gives the permits and values for
increase in the production of coal at the mines the month of January, 1917, as compared with
during the month, but it still is considerably 1916:
below normal, due largely to inadequacy of
Permits
Valuations.
issued.
labor. The natural gas supply seems to have
_l Increase | Per
fallen off materially, and, owing to the exI
Jan- I Jan- January, January, I decrease.! cent.
uary, ; uary, 1917.
1916.
tremely cold weather, its use in industrial pur1917. | 1916.
suits has been greatly curtailed. In numerous
!
5272,355! 194
Akron, Ohio
! 270 15S £560,785
oo
163,210; 137
445,895;
865
609,105
localities there has been some suffering among Cincinnati, Ohio
°
1,600,8951 211,655 2 14
620j 1,389,240
614,
Cleveland, Ohio
86,405i 2 39
223,415|
129!
137,010
the people b}7 reason of the lack of fuel, and Columbus, O hio
79
117,459 1101
115,645i
32
233,104
92
78,209
116,171'
63
194,380
drastic action by municipal authorities, such Dayton. Ohio
86
Erie, Pa
344,944
390,179 U13
95
735,123
159:
Pittsburgh, Pa
560,875
471,232 184
165 1,032,107
as confiscation of coal, has been reported.
193:
Toiedo, Ohio
96,345
55
169,980
73,635 175
67
Youngstown, Ohio.. .j
Glass, -potteryt and clay products.—Rather
5,060,8341 3,792,615; 1,268,219 38.4
2,443' 2,:
Total..
serious curtailments in these industries are rea Decrease.
ported by reason of lack of fuel and inability
1 Increase.




101

ft

;

!

!

2

2

;

208

FEDERAL RESERVE BULLETIN.

MARCH i,

1917.

Money and investments.—The general bank- will probably see general business in all lines
ing situation is still in the best of condition, in this district resume at high speed.
with plenty of loanable funds; rates generally
DISTRICT NO. 5—RICHMOND.
unchanged—in some communities fractionally
General conditions continue sound and proshigher. A scarcity of currency in pay roil
perous, and the outlook for the future is redenominations became apparent during the
middle of February and was met by issuance | garded as encouraging. There has been some
of Federal Reserve notes to the amount of slowing up in exports, although actual figures
$3,200,000. Investment securities markets for last month still show an increase. This
have recently been marking time only with recession is occasioned by the scarcity of oceanslightly lower prices. Bank clearings show freight room due to interference with neutral
substantial increases, as indicated by the fol- shipping by submarines. But for this condiowing table, giving the figures for the month, tion the movement of freight to the ports for
from January 16 to February 15, as compared export would have resulted in larger increases
in their volume. The accumulation of goods
with the same period of last year:
intended for export is further evidenced by a
very considerable volume of bankers' acceptJan. 16 to Feb. 15, incluPer
sive.
ances which are being issued for their financing,
cent
Increase.
increase*. pending actual export and payment for same.
1916
1917
Postal revenues, clearing-house returns, and
321,520,000 812,664,000
Akron, Ohio
38,856.000
70
railroad earnings continue at or above recent
175,044,498 134,911,200
Cincinnati, Ohio
40,133,298
29
260,982,067 163,034,294
Cleveland, Ohio
97,947,773
59
maximums, excepting some railroad returns,
43,918,400
35,058,200
Columbus, Ohio
8,860,200
25
16,116,023
12,694,953
Dayton, Ohio
3,421,070
24
which indicate a falling off in revenues from
6,822,822
5,040,446
Erie, Pa
1,782,376
35
318,093,345 245,023,356
Pittsburgh, Pa
73,089,989
30
coal traffic. This has been interfered with
46,447,879
34,698,428
Toledo, Ohio
11,749,451
34
13,984,121
7,991,024
Youngstown, Ohio
5,993,097
75
particularly by car shortage, and coal is bringTotal
902,929,155
651,115,901 251,833,254
38.6 ing record high prices.
Trade in all lines continues good, although a
Post-office receipts.—The postal receipts in little slackening in some lines is noted in comthe nine larger cities of the district for the parison with recent months. This is due to
month of January as compared with January, high prices, which are inducing conservatism
1916, are as follows:
in purchases among dealers and consumers.
The increased difficulty in the movement of
Per
freight and the consequent delay and uncerJanuary,
January,
cent
Increase.
1917.
1916.
increase. tainty are additional causes operating in the
same direction. Collections, notwithstanding,
Akron, Ohio
869,403.55
550,002.44 $19,401.11
are reported as good, and dealers generally are
Cincinnati, Ohio
266,261.63
248,450.77
17,810.86
7.1
343,313.81
Cleveland, Ohio
259,935.65
83,378.16
32.7 looking forward to continued good business.
127,961.49
Columbus, Ohio
117,360.90
10,600.59
9.0
Dayton, Ohio
60,275.26
52,248.09
8,027.17
15.3
Building is reported in lair volume, some
26,196.89
22,550.41
Erie,Pa
3,646.48
16.2
333,504.10
Pittsburgh, Pa
351,991.56
18,487.46
5.5 points showing a very considerable percentage
85,873.53
98,517.95
12,644.42
Toledo, Ohio
14.7
25,957.92
5,067.65
Youngstown, Ohio...
31,025.57
19.5 of increase. Manufacturers of vehicles, furniTotal
1,374,947.71 1,195,883.81 179,063.90
14.9 ture, and other lines report stocks of goods as
limited and the demand excellent. The lumLabor conditions.—-There is no disturbance ber business has improved appreciably and is
or unrest in the labor situation reported. The apparently only limited by the inadequate
demand for all grades of skilled labor is greater freight facilities and consequent congestion.
than the supply.
Farmers are prosperous from the returns
Warmer weather, resumption of foreign of the past season, and preparations for plantshipping, and betterment in the car conditions ing are on a large scale for new crops, but the




MARCH 1,1917.

FEDERAL RESERVE BULLETIN".

209

bad weather has prevented much actual head- no cancellations being reported and prompt
way in preparations. Staple crops are in delivery of goods on old orders being urged.
contemplation at normal or increased acre-1 Most of the mills are reported to have ample
ages, and reports indicate a growing extension supplies of cotton on hand to protect sales
in the diversification of small crops for home and to meet requirements for some time to
supplies.
come.
The demand for fertilizers has been strong
Some banks are still reporting unusual ease
and some of the largest manufacturers report in financial conditions, but reports more genbeing oversold and having withdrawn their erally indicate some natural decrease in desalesmen from the market.
posits at this season of the year with an inBoll weevil are reported having advanced creased demand for money, particularly for
nearly to the southern border of South Caro- crop preparations. Railroad lines indicate
lina. This menace is receiving the attention unprecedented southern travel, some of this
of the Government and State authorities, as due to an increasing number of home seekers
well as the urgent attention of the business in the district.
interests of the territory menaced. It is DISTRICT NO. 6—ATLANTA.
hoped that by prompt and efficient attention
There is apparently no uneasiness due to the
the possible damage from this pest will be at possible entry of the United States into the
least reduced to a minimum.
war. It is the consensus of opinion that conWhile farmers generally have been pros- tinued prosperity will obtain in this district for
perous, some reports indicate that tenant the next year, whether our nation is at peace or
farmers who raise chiefly staple crops for market war and that unless shipping facilities are furhave suffered by necessity of purchasing ther interrupted business will be extended.
family supplies at present high figures.
Never in its history has the South been in posiThe recent unprecedented cold weather tion more easily to afford a broadening-out
which swept over the Southern Atlantic sea- policy in industrial and agricultural affairs.
board did considerable damage to garden Money is plentiful with rates stiffening a little.
truck and small crops, but reports of damage Loans indicate a healthy condition, being
in such cases are frequently exaggerated, and largely of a commodity nature to carry prodsteps are being taken at once to, as far as possi- ucts, and little, if to any extent, for liquidation
ble, remedy this condition.
of past indebtedness.
The good roads movement is receiving
The only anticipated handicap is one of
efficient attention in the district, with the labor. With no immigration and a neglible
prospect of steady improvement. Labor is migration of labor from other States, a conwell employed; in fact, there is considerable tinued movement of negro laborers to northern
scarcity, notwithstanding which many small fields will present a serious shortage of labor
new industries are planned and in contempla- not only in agricultural but in industrial and
tion throughout the district.
public work lines.
Much attention continues to be given to
Atlanta has just closed the southeastern
stock raising, the high prices for hogs and land show, an exhibition of products and adcattle stimulating improved breeding by the vertisement of the advantages of lands in the
importation of blooded stock.
States in this district. Considerable publicity
The reports from cotton mills are somewhat work of this nature has been carried on during
mixed, some falling off in new orders being the past year with a view of attracting'settlers
reported, while others indicate that the de- from other States.
mands have held up remarkably well, considVarying reports have been received with
ering the uncertainty of our foreign relations, regard to the damage done oats and wheat by




210

FEDEBAL BESEBVE BULLETIN.

1IA2CH 1, 1917.

the freeze during the early part of February. factory and on this account some trouble is
Oats planted during January, and which had experienced in shipping spring orders complete.
just come up will be almost a total loss, but While sales are good, retail merchants are
grain sowed during October, November, and buying rather conservatively. The weather
December, while somewhat damaged, is by no ; has been unfavorable for men on the road,
means a total loss and the outcome may be I somewhat reducing the volume of orders as
better than early reports indicated.
compared with January this year. Wholesale
The February cold "spell" was unusual for millinery houses in the trade centers have had
this section and cost the farmers of the South their openings of spring merchandise and
several millions of dollars. Early vegetables of report a healthy trade this season.
all kinds were seriously damaged or destroyed.
Shoe manufacturers report a slowing-down
Fortunately a large per cent of the citrus fruits in the industry, due at first to peace talk and
had been picked in Florida, and of the crop of later to the break with Germany. There was a
grape fruit and oranges approximately 70 per tendency to overbuy so long as prices continued
cent were frozen. The estimated loss is to increase and most factories had sold ahead
1,500,000 boxes of oranges and 500,000 boxes | beyond their ability to procure needful material
of grape fruit.
I at prices allowing a legitimate profit. The
In the coal and iron fields domestic ship- I pause will give manufacturers a chance to
ments have been extremely heavy, with high | catch up on orders and tend to check high
prices continuing. Coal mines report increased I prices. While prices have not advanced to
output. Keen interest is shown in the war | any great extent during the past six weeks there
situation, and while iron manufacturers are has likewise been no material decline except in
not disturbed they are watching events a few grades of raw material.
closely. In the graphite fields of Alabama
The season for trapping is now closed in
about 20 additional plants or mines are being Tennessee and dealers report a very satisoperated and in course of construction, and j factory fur trade, especially in skunk and
within 60 days there will probably be a 40 per | possum pelts. The Tennessee wool markets
cent increase of output.
are quiet, stocks having been cleaned up, and
New Orleans reports the organization of the dealers are now looking forward to the new
world's greatest live-stock farm with a capital season. It is thought there will be about a
of $1,500,000, its headquarters being at Morgan normal wool clipping, though high prices have
City, La., where it owns 16,000 acres of land j tempted many farmers to sell sheep.
in pasturage and forage crops. As an indiResin exports show a very favorable gain for
cation of the widespread interest in the cattle the first eight months of the naval stores seaindustry in Mississippi, as a result of the son. While the trade is seriously missing the
State-wide tick-eradication law, recently former shipments with Germany and Hungary,
passed, 4,500 dipping vats will be put into which approximated 650,000 barrels annually,
commission in that State about March 1, and exports for the first eight months were 18,377
experts predict that Mississippi will be rid of barrels greater than for the same period last
the tick at the close of 1917.
year. The recent cold "spell" caused conThe retail trade in Atlanta is quiet, at siderable damage in the turpentine fields, and
Savannah light. New Orleans and Nashville hundreds of crops of cups were burst.
report satisfactory conditions, and Florida and
Indications are that the district will use an
Gulf Coast towns report trade good as result increased amount of fertilizer for the growing
of large tourist travel.
of the crops of 1917. Conservative estimates
The wholesale houses report deliveries from place this increase at about 15 per cent. An
manufacturers and mills still remain unsatis- Atlanta concern recently closed a contract for




MARCH 1,1917.

FEDERAL RESERVE BULLETIN.

fertilizer with the Netherlands Government
involving $2,500,000.
Comparing the fertilizer prices with the season of 1915-16 the advance is about 10-per cent
to 15 per cent over the past year, ^hich manufacturers claim does not represent the actual
difference in cost to the manufacturer of the
materials purchased in operation of the industry.
DISTRICT NO. 7.—CHICAGO.

Basic business conditions in this district have
not changed to any marked degree since last
month. The banks are well supplied with
funds, for which there appears to be a better
demand, and in some instances heavy reserves
are being held to provide against contingencies.
From one or two sources it is understood that
minor quantities of gold have been withdrawn
by depositors, but the amount has been small
and the tendency of short duration. Farm
loans continue in good demand, with low rates
and high valuations, but the bond market has
been inactive owing to general uncertainty
and the apparent desire of investors to hold
their funds liquid.
Railroad embargoes and car shortages have
affected almost every line of industry, and
country banks are frequently called upon to
finance the storage of farm products in elevators pending shipping facilities. Collections
have been unfavorably affected, due to the
same causes. Manufacturers are finding difficulty in securing raw materials and coal, and
also in many instances have been compelled to
warehouse their finished product in large quantities until the railroad situation clears up.
The consensus of opinion is that while labor
is well employed at this time a further demand
for help will develop and that a shortage may
result in the spring.
Agricultural implements are in good demand
at high prices, but the transportation question
as affecting deliveries is serious. Coal mines
have been active, but reports indicate some interference with their operations during the past
month on account of the extremely cold




211

weather. This fact, together with the heavy
demand and the railroad troubles has brought
about high prices and a serious shortage in
some manufacturing centers.
Some of the distilleries, while reporting good
business, feel that the prohibition laws may
result in destroying the value of their plants
and equipment.
Dry goods merchants are finding spring business in excess of a year ago, but recent developments give evidence of a more conservative
buying policy, both on the part of the retailers
and the public.
The grain markets have passed through a
rather trying period, but a number of authorities believe that the prices are basically sound
and that the foreign demand can be counted
upon to maintain the values regardless of war
or peace. This opinion is predicated on the reported Argentine shortage and the presumed
requirements of the foreign nations. While
Australia has approximately 100,000,000 to
135,000,000 bushels of wheat for export, and
Argentina about 40,000,000 bushels, shipments
from the Southern Hemisphere are very much
restricted, owing to the difficulties of ocean
transportation and the length of the trip. I t
is estimated that as high as 60,000,000 bushels
of wheat have been bought in the United States
by the allies for shipment during February,
March, and April, and the Chicago elevators at
this time are holding approximately 30,000,000
bushels of grain, a large share of which has
been sold to go forward, although the movement
has been delayed owing to the inability of the
railroads to furnish equipment.
The grocery business is fair and hardware
good, although in the latter line one manufacturer reports that shortly after the German
peace proposals orders fell off 50 per cent within
three days. The volume of business at the
present is satisfactory. The leather industry
has been retarded somewhat. Packing houses
state there is a good demand for their products
at substantial prices.
The past winter has been a good one for the
lumbering industry in northern Wisconsin, but

212

FEDERAL EESERVE BULLETIN".

wholesalers and manufacturers are finding
business only moderately active, with collections fair. Piano concerns report a good volume
of orders and active operation in their plants to
care of the new business, as well as the unfilled
orders from last year.
Shipbuilders have their equipment well employed. Steel prices are higher than before
with no let-up in demand. Wool is quoted
several cents higher than last month, and
woolen manufacturers appear to have a good
quantity of business, in fact, are inclined to go
slow in taking on further orders until the future
outlook for this industry is more clearly defined.
Clearings in Chicago for the first 19 days of
February were $1,205,000,000, being $236,000,000 more than for the corresponding 19
days in February, 1916. Clearings reported
by 21 cities in the district outside of Chicago
amounted to $241,000,000 for the first 15 days
of February, 1917, as compared with $186,000,000 for the first 15 days of February, 1916,
Deposits in eight central reserve city member
banks in Chicago were $743,000,000 at the close
of business February 17, 1917, and loans were
$510,000,000. Deposits show an increase of
approximately $5,000,000 and loans an increase of approximately $22,000,000 over last
month.

MAECH 1,

1917.

The iron and allied interests report heavy
increases in sales with sufficient contracts on
hand to insure capacity operations for some
months.
Six weeks or two months ago the paper industries reported a decrease in business and at that
time this was attributed to a feeling that prices
would be lower. No concessions were granted,
however. Buyers are again in the market and
this has resulted in an increased activity in all
paper lines in the last 10 days.
The Missouri State Board of Agriculture
reports a decrease in the wheat acreage in
Missouri of 7^ per cent, the acreage planted
being smaller than for several years. Reports
indicate that the condition of the crop is not
entirely satisfactory, due to severe weather and
lack of moisture and snow protection.
Reports from Little Rock and Memphis indicate exceedingly prosperous conditions in
the southern portions of the district. The
stock of factors7 cotton in Memphis is the
largest known in the history of the Memphis
Cotton Exchange, and the entire tendency
seems to be to hold this cotton for prices
approximating the high level of the season.
A month ago it was expected that the high
price of cotton would tend largely to increase
the acreage this season. Reports from private sources in the cotton sections of the disDISTRICT NO. 8.—ST. LOUIS.
Business activity in this district continues trict indicate that the high price of fodder,
unabated. Wholesalers of dry goods, boots | foodstuffs, etc., will tend to limit the cotton
and shoes, hardware, and other necessities acreage, and it is not now expected that the
report increases in shipments and the outlook acreage this year will exceed that of 1916.
Provisions generally show an increase in
for spring is favorable. In general the stocks
price from week to week, and this is reflected
of merchandise in the hands of both wholesalers and retailers are larger than they were in all index figures of the cost of living. The
a year ago. This expansion has been noted in increase in potatoes, onions, and cabbage are
all lines. Seasonable winter weather through- especially notable, with eggs, which are slightly
out the district has stimulated retail distribu- lower, as the exception.
Reports from the St. Louis National Stock
tion of wearing apparel, particularly underwear,
Yards for January show an increase in the
hosiery, and ready to wear clothing for men
and women. Collections keep pace with sales. receipts of cattle and a decrease in the receipts
The January fur sale in St. Louis was approx- of hogs, sheep, horses, and mules. The hog
imately three times the January, 1916, sale, market has shown high records from week to
while prices realized averaged approximately week, hogs last week selling at $12.65. It is
reported that foreign buyers have withdrawn
10 per cent above those of a year ago.




MARCH 1,1917.

FEDERAL RESERVE BULLETIN.

213

from the horse and mule market, due to the DISTRICT NO. 9—MINNEAPOLIS.
increased difficulties of ocean transportation.
Traffic difficulties, due to the severe cold and
The St. Louis clearings for January were the to the effects of the car blockade, have had a
largest ever recorded in the history of the very serious effect on Northwestern business.
clearing house. Clearings in all of the prin- It has been variously estimated that there are
cipal cities of the district for the week ending from 14,000,000 to 18,000,000 bushels of wheat
February 10 show increases ranging from in storage in Minneapolis alone under contract,
22T% to 46^- per cent.
some of it for November and December deThe gross railroad earnings for December for livery, that can not be moved, together with
the roads operating in this district continue to an immense tonnage of flour, feed and mill
show the substantial increases which have been stuffs. Manufacturing concerns that are under
so noticeable for the past 18 months. Net contract for deliveries in the East are having
earnings for this period, however, do not show the greatest difficulty in obtaining cars. The
the same percentage of increases, two of the recent car relief measures promise some imroads operating in this district showing an provement in the situation, but expert authoractual decrease in net. It is believed that this ities predict that the difficulties will continue
is due to the marked increase in operating ex- throughout the spring, and that it will be well
penses and to the high price of all supplies into the summer before conditions can get back
and equipment.
to normal.
Car shortage has had a tendency to hamper
Severe cold has prevailed during the month,
business activity, and owing to recently im- and the snowfall in the Northwestern States
posed embargoes may cause further difficul- has been unusually heavy. Heavy winds have
ties. The movement of live stock and perish- accompanied some of the storms, blockading
able freight is about normal. There is little railway lines, and seriously interfering with the
difficulty in handling shipments of any kind movement of trains on branch lines.
to and from the South and West, but the
Coal shortages have been avoided, but only
movement of freight to the East is seriously because of the vigorous efforts of both the raildelayed. The movement of cotton has been ways and distributing companies. Coal disseriously hampered by embargoes on New tributing concerns in the larger centers have
England points and export. These same con- had no difficulty in securing delivery at terminals
ditions have made both the receipt and ship- of sufficient coal for their local requirements,
ment of grain difficult and the grain business but the congestion has been so great that it has
has slowed down. The stock of grain in ele- been very difficult to get cars switched to the
vators is reported to be about normal.
coal docks and to keep the supply available
St. Louis, Memphis, and Little Rock show a to the delivery forces.
gain in building permits for January, the gain
There was a very heavy falling off of shipin St. Louis being especially noticeable. Louis- ments of flour and mill feed in January, and
ville building permits show a decrease for Jan- February shows no improvement. The prouary of this year. St. Louis and Memphis duction has been very sharply curtailed, and
postal receipts show gains for January.
will not get back to normal until a considerMoney for legitimate business is plentiful, ably larger movement of empty cars from the
but banks in the larger cities, particularly in East can be brought about.
St. Louis, are careful to . maintain adequate j
Business during the month has been rather
reserves and remain in a liquid condition.
quiet, but still satisfactory. The serious interCommercial paper is now quoted at 4 to 4J
national situation does not seem to have proper cent as against 3 | to 3^ per cent a month
duced any perceptible change, either in the
ago, with an active demand from country
volume of trade or.in the sentiment of business
banks. Bank rates to customers show no
men, who look for favorable conditions, at least
change.




214

FEDERAL SESERVE BULLETIN.

MARCH 1.

1917.

More than usual interest attached to the
into the spring months. Country banks are in
very good shape, and are making no unusual report of the Kansas State Agricultural College
demands. Banks at the larger cities show concerning the development of a pure-bred
excess reserves, with the prospect that any hard winter wheat designated as P-762, a
relief of the car situation will improve their single head having originally been selected
figures hj easing the burden of financing, which from a plot planted to Crimean seed imported
the congested traffic situation has brought from the Don territory of Russia. Fifty-nine
about. The conditions that have prevailed tests on 29 different farms have resulted in the
since the first of the year have influenced statement that had this wheat been generally
business men in all lines to exercise more than sown in Kansas the past three seasons the value
ordinary care and prudence. The general opin- of the production of that State would have been
ion is that the Northwest is in a.very good posi- increased by almost $63,000,000.
tion to meet any situation that may develop.
Live stock.—Top prices for 14 classifications
Bank rates at the larger centers are firm at a of stock on the local market for the week ending
minimum of 4^ per cent. Kates at country February 10 made an average gain over the
points show no change. Collections continue same top prices.a year ago of $2.62 per hundred
pounds, hogs being $4.10 higher that week than
fairly good.
Spring construction will be somewhat cur- the same week a year ago. There has been a
tailed by high labor costs and the high price of vigorous midwinter demand for desirable stock
steel and of all building materials. While labor cattle and feeding steers at the highest prices
conditions are satisfactory at the present time, ever prevailing. The conviction is growing
there is a growing prospect of disturbances, and that the heavy cattle receipts at the markets
it is considered probable that strikes in several must result in at least a comparative shortage
trades will signalize the breaking up of the and that the potential supply of beef makers is
being sacrificed in order to take advantage of
winter.
While the business of this Federal Reserve high prices. The January cattle receipts at
Bank shows no evidences of any unusual con- the four largest markets in the district showed
dition in the district, the volume of redis- an increase of almost 70,000 over January,
counted paper is larger than a month ago and 1916, a considerable increase in the receipt of
indicates a substantial increase as compared sheep but a falling off in hogs. Profits now
with the same dates a year ago. The currency being realized on short-fed cattle and hogs,
demand, although somewhat heavier during despite high-priced corn, are gratifying. There
the month, is far short of what may be expected has been a slight decline both in the killing
and packing of hogs.
during a period of real apprehension.
Mining.—Record prices for minerals have
Bank clearings at the chief centers of the
district show little change, although they ex- caused many large companies to engage serihibit a slight increase as compared with a year ously in reworking old mines, many of which
| have been idle since 1893. Colorado fields
ago.
report January as a record-breaking month in
DISTRICT NO. 10—KANSAS CITY.
the volume of production. Cold weather has
Eeports would indicate that the new winter hampered operations to some extent. Many
wheat crop will be cut short owing to the dry I of the larger mines have planned extensive
season, though a wet spring may improve the operations at greater depth. Early in Februoutlook. The need of moisture is general in I ary, in the Missouri-Kansas-Oklahoma district,
the southwest. Nebraska, Kansas, Missouri, 75 per cent of the mines were either badly
and Oklahoma have shown a marked deficiency I crippled or completely frozen up because of
in precipitation for the past seven months, below zero weather, but subsequent moderations have improved this situation. Much
January being particularly dry.




1,1917.

FEDERAL RESERVE BULLETIN.

215

activity is reported from the new potash fields buyers from replenishing stocks which are low.
An early return of activity is anticipated.
in Nebraska.
The automobile industry is easily surpassing
Oil.—Prices of crude oil remain unchanged
since last month's report. Throughout the this season last year, assembling plants and
fields of the mid-continent regions there is a dealers being pushed to capacity. Oklahoma
general slump in operations, owing to the fact reports a gain of 116 per cent in automobile
that water for steam-making purposes has been I registration for 1916 over the previous year,
difficult to obtain. In addition, the shortage surpassed by but one State in the Union.
of pipe and casing and the general high cost of
The prices of necessities continue upward and
materials have had their effects. Cold weather, the situation in this respect is anything but
combined with other factors has caused a reassuring. As an instance of this, one point
sharp decline in production. The program for in the district reports that wholesalers are offerpipe-line laying during the present year is the ing $2.75 per bushel for Irish potatoes and find
greatest in the history of the industry. Much the response scant.
interest is manifested in what is known as
Freight congestion in the East has resulted
"casinghead" gasoline, produced from gas by in embargoes by several railway lines serving
forcing it through pipes under heavy pressure, this territory, and, as a consequence, there are
heating and cooling and .finally condensing into many reports of congestion in the yards, and
a, liquid which, when mixed wTith naphtha, freight officials do not anticipate an immediate
results in a high-grade gasoline, the gas itself betterment. It is estimated that there are
being sent back to the wells where it serves a 30,000 cars on western roads destined east
variety of purposes.
which can not be moved. Fortunately these
Wholesale and retail.—The volume of spring embargoes do not include perishable goods,
business in implements is said to have reached food, fuel, live-stock, and oil shipments, but
such a point that wholesalers will need no this situation, coupled with the car shortage,
second-order business to exceed the total volume is a serious deterrent to business in many lines.
of spring business last season. The only conLumber.—The car shortage also continues to
cern has to do with obtaining cars for delivery. hamper this industry, and has curtailed shipGeneral retail stores report a steady increase ments anywhere from 25 to 50 per cent,
of sales since January 1 over the corresponding depending upon the line on which mills are
located, and this has had a tendency toward
period last year.
The new year has started briskly in whole- higher prices. The steady increase in building
sale drugs—one of the largest houses in the permits has been lessened in some quarters
district reporting sales during January 33 J per by reason of unfavorable weather, which has
naturally affected the wholesale and retail
cent above those of last year.
In dry goods and clothing the markets are lumber trade. Contract work out for bids has
taking on a decidedly market-buying aspect, been favorable in totals, but few large jobs
and high prices are evidently not retarding are reported, the greater number being medium
freedom in buying. There has been marked sized projects. Much work of importance is
activity in staple merchandise, including cotton under contemplation and the future would
dress goods, sheetings, and various domestic seem unusually favorable.
Labor.—Very few labor disturbances are
lines. Wholesalers have taken the precaution
to cam' the fullest possible stocks.
reported, and those affect but small numbers
Flour mills are running at about two-thirds and are strictly local.
capacity, and are largely engaged in filling
Financial.—If there has been any disturbearlier sales. Current business is reported light ance of the money situation due to existing
by reason of the erratic wheat markets and international complications, it is not sufficient
violent changes in prices which appear to deter to cause uneasiness. Banks in this district




216

FEDERAL RESERVE BULLETIN.

are in a strong position and well fortified to
meet any unusual development. Discount
rates remain practically the same.
There is doubtless no better indication of
general business activities than reports of bank
clearings, and that the year has opened with a
flying start is evidenced by the fact that the
total clearings for January in the 15 most
important cities in Federal Reserve District
No. 10 showed an average increase of 55.5
per cent over the month of January, 1916, the
lowest percentage in the list being 24.4 per
cent and the highest 145.6 per cent. Reports
at hand show further noticeable increases in
postal receipts as compared with last year.
DISTRICT NO. 11—DALLAS.

MARCH 1,

1917.

southwestern section and much damage was
done to the winter truck crops. Such crops
were a total loss. Although replanting will
be done, it will be some 60 days before conditions are normal.
Reports vary as to the damage done . to
citrus fruit. One of our correspondents reports that the damage to citrus fruit was
fully 90 per cent and the crop was practically
destroyed. The cabbage crop of the Brownsville country was damaged probably 50 per
cent by the freeze of early February, and the
onion crop likewise suffered. All parts of the
district report that farmers are giving considerable attention to diversification, and the
outlook for the- present season, so far as
farming interests are concerned, is extremely
favorable. In the Rio Grande Valley the
planting of potatoes, beans, and tomatoes for
spring shipment is heavy, and the outlook for
market conditions is the best the growers ever
had. In answer to an inquiry, one of our
correspondents in Oklahoma, probably the
largest wholesale grocery firm in that section,
replied as follows:

Wholesale trade particularly has been rather
active during the past 30 days through the
inauguration of trade excursions, and the
larger markets of the district have been
crowded by out-of-town buyers. Inform action is that spring trade up to this time has
been unusually good and heavier than last
year. Wholesalers advise that there is some
disposition among merchants to proceed cautiously on account of European conditions; Business conditions in Oklahoma were never better
than they are at present. Farmers are all in good shape.
also continued difficulty is experienced in Lots of new land is being put into cultivation in this
obtaining satisfactory stocks of goods from section. Farmers generally are planting lots of feedstuffs
northern and eastern mills. Manufacturers this year and are not going in so heavy on cotton. We
have booked all the orders they can handle, feel much encouraged over the present outlook.
and are therefore reluctant to make contracts
There is some evidence that demand with
very far in advance. Collections continue banks is getting more active, especially in the.
very satisfactory and above normal.
cattle-raising sections. Rates remain easy
There have been no notable changes in and unchanged over a month ago. There has
general commercial conditions in the district been some increased activity with this bank
in the past 30 days. The lull in trade incident in the way of offerings for rediscount by
to the midseason is still apparent, and if any member banks in the past 30 days. Within
changes are to be noted they are mainly in the another month seasonal demands of our memmore advanced sale of spring lines and the ber banks will undoubtedly be felt. Bank
preparation for the coming season's business. clearings for the cities of Austin, Dallas, Fort
Farming operations are well advanced for Worth, Galveston, and Houston for the
the season and beyond normal in connection month of January show an increase of 38 per
with preparing the soil for the coming season. cent over 1916, the figures for January this
During the past 30 days the district experi- j year being $205,717,950 and for 1916, $149,enced the coldest weather of the winter, which | 064,641, or an increase of $56,653,309. The
materially affected agricultural conditions. larger banks of the district still confront the
Freezing weather was felt even to the extreme problem of seeking satisfactory investments




MARCH 1,1917.

FEDEBAL RESERVE BULLETIN.

for their surplus funds, though conservatism
seems to be the watchword.
Notwithstanding the severest weather of the
winter there have been very few losses in
cattle and there is no evidence of unfavorable
conditions among the live-stock interests.
Receipts* at the Fort Worth market have
continued heavy and prices for all classes
high. While there is little demand for range
steers, trading in stock cattle is brisk. The
present is an off season for sheep men and no
activity is noticeable in that line. However,
when contracts are made for lambs for fall
delivery it is anticipated that prices will be
in line with the top figures of last year.
Activity is noted in lumber, cement, and
other building materials, and, as one dealer
stated, all that is necessary is good open
weather for the trade. The building permits
issued in the six largest cities of the district
reporting show, in the aggregate, an increase
in number but a decrease in valuation, the
figures being: In 1916—number, 651; valuation, $1,653,032. In 1917—number, 685;
valuation, $1,311,265.
The lumber trade has been stimulated recently by the prospects of Government purchases in large amounts along the border. The
car situation with building trades continues
serious. The post-office receipts of five of the
largest cities in the district for January of this
year aggregated $328,290 against $281,193 for
last year, or an increase of $47,097, or 17 per
cent.
Transportation business has been seriously
affected during the latter part of the month
by the embargo placed on Eastern shipments.
At the present time, the embargo extends to
the Indiana-Illinois State line and threatens
to grow quite serious. Congestion at seaboard
points through lack of shipping space and
inability to unload cars has caused this condition. Locally little difficulty is being experienced.
Failures in the district for the month of
Januar}r were 58, with liabilities of $498,256.
For the same period of 1916 there were 129,




217

with liabilities of $1,292,696. These figures
clearly indicate the general improvement of
business throughout this district.
There is no diminution in activity in the oil
fields. The daily production in the Humble,
Tex., field alone is around 20,000 barrels.
Lack of water for drilling operations is still
seriously affecting the production, though relieved to some extent by the rains of the past
month. The high prices obtained for petroleum continue and tend to stimulate operations
in the fields. The coal mines of Oklahoma
and the copper mines of Arizona and New
Mexico worked full time during January. The
mining companies of Oklahoma report that
orders for commercial coal have decreased to
some extent in the past two weeks, but that
they still have sufficient orders in sight to run
indefinitely.
DISTRICT NO. 12—SAN FRANCISCO.

Reports from all sections of this district
give evidences of generally prosperous conditions. This is largely due to unprecedented
prices for metals, live stock, and many agricultural products with abundant harvests.
Wages have been increased under the influence of active demand. There are few reports
of labor disturbances.
Cold weather in the Northwest and a general
lack of rainfall has hampered planting of many
crops and retarded the growth of others. In
California the precipitation thus far this season
has been materially below normal. However,
instead of heavy midwinter rains, with none
during the spring, it is of greater benefit to
have a smaller total precipitation, with spring
rains distributed over a considerable period.
There still remains enough of the season
classed as rainy for adequate precipitation,
but the dry season in California is so long that
sufficient moisture must be had in the rainy
season to render crops possible. Delayed precipitation consequently always tends to rouse
apprehension. Snow has covered the ground
in Idaho, preventing damage being done to
fall-sown grain by the cold weather. Except

218

FEDERAL RESERVE BULLETIN.

for unusual cold about the end of December,
Arizona reports a mild winter with sufficient
precipitation to insure early feed.
The present indications are for large crops
of both wheat and barley in this district, provided sufficient rains are forthcoming. Due
to the high prices received during 1916, there
has been a considerable increase in the acreage planted. It is predicted that the berry
crop of Washington in 1917 will be abundant.
The fall frosts have put the plants in good
condition to withstand the winter weather.
The prices of onions, cabbage, potatoes, and
some other vegetables have advanced extraordinarily.
The present market for apples is unsatisfactory. Sales have been recorded at prices as
low as $1.10 per box, with transportation
costs of 50 cents per box; there is little profit
from sales at such prices. Stocks on hand
January 1, 1917, were not as large as those
at a corresponding date last year by approximately 1,500,000 barrels.
Final figures for 1916 place the California
raisin crop at 126,000 tons, compared with
124,000 tons in 1915. The prices in 1916 were
from $15 to $20 per ton higher than those in
1915. The output of sweet wine in 1916 was
five times that of 1915 and aggregated over
19,000,000 gallons.
Laws prohibiting the sale of alcoholic beverages have gone into effect in four of the seven
states of this district, viz: Arizona, Idaho,
Oregon, and Washington, and a law of this
character has passed both houses of the legislature in Utah and has recently been signed by
the governor, becoming effective August 1,
1917. The climate and soil of California are
admirably adapted to grape culture. In this
industry and in the production of wine many
millions of dollars are invested and many thousands of people employed. Constitutional
amendments looking to prohibition, which were
voted upon at the last election, were voted
down by such moderate majorities as to lead the
interests concerned to adopt unusual courses.
It is reported that the wine producers will sever




MALICII 1,

1917.

relations with other liquor interests and endeavor to close all saloons in the State, and that
the liquor dealers in San Francisco are proposing to reform liquor selling by reducing the
number of saloons one-half and doubling the
license fee.
In 1873 the first Washington navel orange
tree was planted in southern California. The
development of the citrus-fruit industr}^ of the
State has been chiefly since that time. Now
there are approximately 205,000 acres planted
to citrus fruits, of which 130,000 acres are in
bearing, representing an investment of probably $200,000,000, with an annual product having a value of near $50,000,000. During the
past seven years the amount of California citrus
fruit consumed by the people of this country
has increased more than six times as rapidly as
has the population. At this season shipments
are going forward in large quantities and satisfactory prices are being received. The damage
to the fruit by frost in January was slight.
The shortage of cars and high producing costs
are the present dominating factors in the lumber industry. Orders are considerably above
production and some mills have found it necessary to refuse further orders until transportation facilities are available. Labor in this
industry is reported as less efficient than formerly and having a tendency to shift from place
to place.
Salmon prices continue to advance as the
stocks in the hands of the packers diminish.
The supply of the higher grades is entirety sold
out.
Daily production of petroleum for January,
1917, averaged 261,879 barrels, and shipments
averaged 293,364 barrels. The daily production during this month came nearer equaling shipments than at any time since July,
1916, the decline in stocks in January being
but 31,485 barrels daily, compared with 60,580
barrels daily in December. Total crude-oil
stocks on hand January- 31, 1917, were
43,060,154 barrels. The greatest activity in
rig building since May, 1911, was reported in
January, when 100 new rigs were constructed.

MARCH 1,1917.

FEDERAL BESEEVE BULLETIN.

219

Charter rates are reported as slightly firmer. sponding month in 1916, Los Angeles leading
During the past month, the organization of the in the percentage of increase. Real estate
Pacific Development Corporation has been an- transactions are in increasing volume and
nounced, consolidating two companies operat- greater activity is anticipated during 1917.
ing in the Orient with the purpose of expandOn January 1, 1917, there was on deposit in
ing the scope of their business.
both national and State banks in the Twelfth
Clearings of 19 principal cities of the district Federal Reserve District
approximately
during January, 1917, show an increase of 50 | $1,688,000,000 or $260 for each inhabitant of
per cent over those of January, 1916; Salt the seven States that comprise this district,
Lake City led with 63 per cent, followed by San viz, Arizona, California, Idaho, Nevada, Oregon,
Francisco with 56 per cent and Seattle with Utah, and Washington. This is $60 per capita,
50 per cent. Building permits of the same 19 more than on January 1, 1915, when there
cities increased 70 per cent over the corre- was on deposit approximately $1,265,000,000.




220

FEDERAL RESERVE BULLETIN".

MARCH 1,

1917.

DISCOUNT OPERATIONS AT THE FEDERAL RESERVE BANKS.

Total discount operations of the Federal Reserve Banks for the month of January, 1917,
amounted to $18,326,286, compared with
$11,114,900 for January, 1916, and $10,712,800
for January, 1915. Nearly 47 per cent of the
total Federal Reserve discounts for the month
is reported for the Richmond district, where
$6,667,000 of advances were made by the reserve bank on 31 member banks' collateral
notes secured by commercial paper. As against
70 per cent for December, 1916, the three eastern banks report less than 13 per cent of the
January discounts, the bulk of their operations
for the month being made up of purchases of
acceptances in the open market.
Of the total discounts for the month $9,517,329 is represented by member banks7 collateral
notes, $574,464 by trade acceptances (twoname paper) and $1,564,653 by commodity
paper. The total of these three classes of
paper, nearly all discounted at preferential (i.e.,
lower than ordinary) rates, was $11,656,446,
or over 63 per cent of the total discounts for
the month. Over one-half of the January discounts is represented by member banks' collateral notes handled by nine banks, Richmond
alone reporting about 70 per cent of this class
of paper.
Discounts for the month of trade acceptances
reported by 10 banks were much below the
total reported for the immediately preceding
month, though in excess of the average monthly
total for the past year. Over 70 per cent of
this type of paper was handled by the three
southern banks. On the other hand the
monthly total of commodity (all cotton) paper
handled exclusively by the three southern
banks shows a considerable increase over the
December, 1916, total.
The aggregate number of bills discounted
during the month, exclusive of 78 collateral
notes, was 3,408, while the average size of
theso bills was about $2,590, compared with
an average amount of about $122,000 advanced
during the month on a collateral note. Nearly
30 per cent of the rediscounted paper is repre-




sented by the largest-sized bills (of over
$10,000 each) and over 40 per cent by
medium-sized paper (in denominations of over
$1,000 to $5,000). Small notes (in amounts
up to $250) constituted almost 20 per cent of
the total number, though less than 1 per cent
of the total amount rediscounted during the
month. Over one-half of the number of these
small bills, practically all trade acceptances,
is reported by the Philadelphia bank.
Nearly 60 per cent of all the paper, including
collateral notes, discounted during January,
was 15-day paper, i. e., maturing within 15
days from the date of discount by the Federal
Reserve Banks. The share of 30-day paper
was 9.3 per cent, that of 60-day paper 14 per
cent, and that of 90-day paper 14.4 per cent,
January discounts of agricultural and livestock paper maturing after 90 days from date
of rediscount with the Federal Reserve Banks
(six-months' paper) were $591,882, compared
with over 1.5 millions for January, 1916.
Discounted paper held on the last Friday
of the month aggregated $15,711,000, as against
$30,196,700 about the end of December and
$26,900,500 on the corresponding date the year
before. Of the total holdings at the end of
January $2,672,000 were member banks' collateral notes, $4,291,254 agricultural paper, of
various maturities and types, including trade
acceptances and commodity paper, originally
discounted, with member banks to obtain
funds for agricultural purposes; $1,136,294,
live-stock paper; and $7,592,119 industrial and
commercial paper proper. Over 80 per cent
of the agricultural paper was held by the
Atlanta, Chicago, Richmond, and Minneapolis
banks, while nearly 85 per cent of the live-stock
paper was held by the Dallas, Kansas City, and
Minneapolis banks. Of the 7,631 member
banks reported at the end of the month only
310, or slightly over 4 per cent, availed themselves of their discount privileges during the
month under discussion. The number of rediscounting institutions in the three southern

MARCH 1,1917.

221

FEDEKAL RESERVE BULLETIN".

districts was 140, compared with 324 in January, the Richmond Federal Reserve district, while
1916. The largest number of member banks the smallest number is shown for the New
accommodated during the month is shown for York district.
Commercial paper discounted

by each Federal Reserve Bank during January,

1917, distributed by sizes.

NUMBER OF PIECES AND AMOUNTS.
I Over $100 Over S250 i Over S500
_

To

t 0 S250

to $500.

j to §1,000.

Over SI ,000
to $2,500.

Over $2,500
to $5,000.

Over
810,000.

Over $5,000 I
to $10,000. I

Total.
Per
cent

° .!

Banks.

fa

ft
Boston
81001 22 84L047
22
New York
916 17 3,517
Philadelphia
8, 075
304 10,673!
Cleveland
3,850
Richmond
L5,008
Atlanta (including New
New Orleans branch).
4,764
449'
Chicago...
4,257
1,551
800
St. Louis
150
2,743
Minneapolis
2,154
Kansas City
1,719
Dallas
2,"""
San Francisco
Total.

89,188 35
8,801
27,522
8,434 13
66,950 165 133; 427

§68,516
56,892
86,577
67,278
11764

19,607,
16,061
1,662
13.237
13:624
10,944

194,548
101,755
67,961
130,139
69,1191
72,4201

321,945
241,987

39,458
14,186
31,437
46,149

206,737
140,208
55,356
453,669

3,056

0.2

0.6

475,222
79,094
47,000!
188,776
5,282
132,245
34,307

98,968
357,2841
42,469]
158,508!
22,262j

369 16,165 292 53,301 514 199,086 568 445

Per cent
Member banks' collateral notes

10 §200,506 210 8749,763
1
14,668 142 328,162
550 335,122
383,60S 133 644,971
338,652 854 1
.,915; 382

$177,129
25,075
23,629
116,620
593,586

$259,307

716,307
290,000
503,137
12,498
98.768
2 20,900

434 1,793,072
"~ 774, Ib3
97 230,727
2981, ,226,753
175 191,295

8. 8
*
2.6
13.9
2.2
5.6
123,358 1.4

180

98 2,579,094 3,408 8,808,957

2511.897,965

21.5

29.3

55,000

2.3

709,462,329

Member banks' collateral notes, trade acceptances, and commodity paper discounted during
and 1916.

8.5
3.7
3.8
7.3
21.8

100,0
78 9,517,329.

the month of January,

1917,

i

Banks.

Collateral
notes.

Boston
New Y o r k . . . .
Philadelphia
Cleveland .
Richmond
Atlanta (including New
Orleans) •
Chicago

8448,699
270,000
230,000

Trade Commodacceptity,
paper.
ances.
862,433

6,667,000

1*797
240,283

769,000
520,000

75,157
8,609

$598,807
961,746

Banks.

Total.

8511,132
270,000
245,164
1,797
7,508,090
1,805,903
528,609

St Louis
Minneapolis
Kansas City
Dallas
San Francisco

notes.

| ances
1

Commodity,
paper.

$11,930
55,678
75,000
162,630 ""ftL'n'fiV """$4,"i66*
. . . . . . . . . . . ~8",850
8375,000

. . .

Total Jan. 1917
Total Jan 1916

9,517,329

574,464 11,504,653
444,400 1,863,600

Total.

$386,930
55,678
75,000
261,293
8,850
11,656,446
2,308,000

'All cotton paper.
Amounts

of discounted paper, including member banks7 collateral notes, held by each Federal Reserve Bank
1917, distributed by classes.
Agricultural
paper.

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago




Livestock
paper.

Commer- Member
cial and banks'
industrial collateral
paper,
notes.
$754,623

$19,404
60,685
54,358
923,578
1,030,878
942.624

83,329 1,534,249

456,564
434,565
1,734,754
945,222
84,316
422,424
48,138

835,000
145,000
20,000

1,'492,'665"
69,000
508,800

Total.

S789,623 I St. Louis
!
Minneapolis...
1,701,982
527,149 . Kansas Citv...
488,923 I D a l l a s . . . . ; . . . .
4,150,332 San Francisco.
2,129,416
Total
1,921,986

Agricultural
paper.
109,179
618,389
254,126
136,538
151,595

Live
stock
paper.

37,699
202,448
208,029
549,943
2,392

on Jan. 26,

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

Total.

332,309
784,321
26,462
134,237

554,187
75,000
210,000 1,815,158
523,617
35,000
902,826
82,108

52,260

206,247

J4,291,254 1,136,294 J7,611,990 2,671,908 15,711,446

222

FEDERAL RESERVE BULLETIN.

MARCH 1, 1917.

Distribution by sizes of bills bought in the open market by all the Federal Reserve Banks during January, 1917, and 1916.
To $5,000.

To 510,000.

To $25,000.

Acceptances bought in
open market.

To $50,000.

To §100,000. ! Over §100,000.

Total.

i
|

I
I

January, 1917:
Bankers' acceptances
Trade acceptances..
Total
Percent
Total acceptances
bought during January, 1916

!
10

994,090
29,120

390 1,023,210

5.0
194

546,959

474 1,640,256 1292 5,122,294 151 6,868,118

115,912

65,813 I 8

30,924

-I-

483 1,706,069 1300 5,238,206 152 6,898,412
25.4
33.5
8.3 . . . .
s Q
220 1,720,758

4,113,726

47 1,857,477

3,891,515
48 3,891,515

1,859,768 1,356 1120,376,041
28 I 2 2 4i;i39
11

18.8

98.8
1.2

1,859,768 1,384 ! 20,617,180 100.0
9.0

1,284,593

695

9,523,513

1 Of the above total, bankers' acceptances totaling 514,834,291 were based on imports and exports, and §5,541,750 on domestic trade transactions.
2
All of the above transactions were drawn abroad on importers in the United States and indorsed by foreign banks.

ACCEPTANCES.
Acceptances bought in open market and held by Federal Reserve Banks as per schedules on file on dates specified, distributed
by classes of accepting institutions.
[In thousands of dollars; i. e., 000's omitted.]
Bankers' acceptances.

Bankers' acceptances.

Date.

Trade
accept- Total
Nonmember banks.
ances
bousrht acceptMemances.
Total. in open
ber
Trust
market.
banks. compa- State Private
nies. banks. banks.

1915.
Feb.22
Apr. 5
May3
June 7
July3
Aug. 2
Sept. 6
Oct. 4
Nov. 1
Dec. 6

93
3,653
5,038
5,242
4,342
5,350
6,087
9,000
8,477
12,311

7,820
8,189
4,516
5,267
5,407
6,305
4,898
4,331
5,172

1916.
Jan. 3
Feb. 7
Mar. 6
Apr. 3
Mavl
Tune 5

15,494
15,681
17,182
21,000
24,875
24,680

7,160
7,876
8,670
13,573
15,400
17,029




20*
20
132
253
275

110
110
192
161
352
472
343
204
396

93
11,593
13,347
9,960
9,770
11,129
12,884
14,373
13,265
18,154

362
336
408
473
585
644

822
1,456
1,781
3,262
3,430
7,007

23,838
25,349
28,041
38,308
44,290
49,360

10
10
10

93
11,593
13,347
9,960
9,770
11,129
12,884
14,373
13,265
18,154

489
462
722
1,477
2,208

23,838
25,838
28,503
39,030
45,767
51,568

Trade
accept- Total
ances
bought acceptTotal. in open ances.
market.
Private

Nonmember banks.
Date.

Member
Trust
banks. compa- State
nies. banks. banks.

1916.
July3
Aug. 7
Sept. 4
Oct. 2
Nov. 6
Dec. 4

32,989
39,695
41,413
37,798
37,770
47,748

18,921
19,060
20,356
21,782
29,474
33,232

471
738
726
712
1,014
1,(530

11,830
13,940
12,491
9,944
12,147
16,069

1917.
Jan. 1
Jan. 8
Jan. 15
Jan. 22
Jan. 29
Feb. 5
Feb. 12
Feb. 19
Feb. 26

66,803 34,625
60,066 32,467
59,710 30,691
56,334 26,286
52,439 22,744
50,361 *23,511
54,945 33,473
59,165 35,745
59,498 36,478

1,502
1,325
1,245
1,146
1,054
972
1,265
1,268
1,094

18,224 121,154
4,585
16,915 110,773
4,249
15,862 107,508
4,386
14,119 97,885
4,102
12,949
4,041 93,227
13,775 4,041 192,800
17,952 4,896 2113,199
21,842 4,982 3123,679
20,389
5,068 3123,204

1 Includes §140,000 of bills accepted by foreign branches and agencies.
2 Includes 5668,000 of bills accepted by foreign branches and agencies.
3 Includes ,§677,000 of bills accepted by foreign branches and agencies.

64,211
73,433
74,986
70,236
80,405
98,679

3,422 67,633
4,225 77,658
3,673 78,659
2,306 72,542
2,378 82,783
4,487 103,166
125,739
115,022
111,894
101,987

223

FEDERAL RESERVE BULLETIN.

MARCH 1, 1917.

Amounts of paper discounted and acceptances and warrants bought by each Federal Reserve Bank during January, 1917,
distributed by maturities.
15-day maturities.

30-day maturities.

Federal Reserve Banks.
Discounts. !

Warrants.

Total.

Discounts.

Total.

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

$847,389
279,272
247,937
182,617
6,897,047
980,486
521,480
406,500
376,428
75,606
162,630
4,514

4,514 j .

10,804,495 !

177,411

$102,136
$5,096
69,457
7,299
120,203
106,300
271,658
51,666
382,399
1,308,877
142,699
52,000
337,583
108,333
73,000 :
30,000
179,316 !
5,738 !
11,630 !
25,000
7,863 ;
48,428

$107,232
76,756
226,503
323,324
1,691,276
194,699
445,916
103,000
179,316
5.738
36.630
56,291

10,981,906

§847,389
279,272
247,937
.1.
182,617 '
6,737,047 I S160,000 !.
963,075
17,411 !.
521,480 !
I.
406,500 i
376,428 i.
.1.
75,606 L
162,630 !.

1,703,682 | 1,742,999

3,446,681

Percent

23.5

7.4

60-day maturities.
Federal Reserve Banks.
Discounts.
Boston
New York
Philadelphia.
Cleveland
Richmond
:
Atlanta (including Now Orleans Branch)
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco.
Total.....

8126,008
123,129
184,102
163.128
626.129
479,583
320,909
31,546
356,354
38,780
111,350
25,569
! 2,586,587

Accept-

"Warrants.

90-day maturities.
Total.

Discounts.

Accept-

8191,728
123,129
850,008
248,707
983,212
1,301,783
426,657
195,996
381.354
100;989
;
111,350
543,518

665,906
85,579
357,083
822,200
105,748
164,450
25,000
62,209
517,949
2,871,844

8122,929
126,304
12,080
16,690
815,186
948,064
47,659
67,247
197,410
49,344
199,020
37,707

82.858,308
2,598,262
1,074,162
1,214,534
659,400
850,211
796,169
281,631
1,396.725
323;179
282,374
2,312,373

5,458,431

865,720

2,639,640

14,647,328

Per cent

I

Federal Reserve Banks.
Discounts.

1,020

$2,981,237
2,724,566
1,086,242
1,237,375
1,474,586
1,798,275
844,848
348,878
1,594,135
372,523
48i;394
2,350,080

7,171

17,294,139

86,151

Acceptances.

Warrants.

37.1

Totals.

Total.

Discounts.

Acceptances.

Warrants.

Per cent.

Total.

AcI Dis- cept- War! counts. ances. rants. Total.

84,237,301 j
Boston
!.
$109,715
8109,715 $1,198,462 L$3,038,839
New York
i
82,798,013 j 2,798,013 598,162 2,605,561 $2,798,013 6,001,736 !
565,122 2,107,327 1,268,322 3,940,771 j
Philadelphia
I
8800 260,959 1,268,322 ' 1,530,081
832,063
842,941
838,214 2,834,964 i
644,971 1,351,779
Cleveland
| 10,878
21,621 8,582,382 2,485,360
11,067,742 !
Richmond
' 21,621
Atlanta (including New j
3,000 j
31,65112,562,072 1,741,822
3,000 4,306,894
Orleans Branch)
j 28,651
1,169,634 ' 1,236,216 I 1,294,163 ; 1,010,250 1,170,704 3,475,117
Chicago
i 66,532
465,957 2,354,689
St. Louis
i 27,434 806,924
465,957 . 1,300,315 ! 605,727 i 1,283,005
151,684 i 268,929 I 1,226; 753 1,421,725
151,684 2,800,162
Minneapolis
! 117,245
152,243 ! 803,926
152,243 1 249,070 ! 266,295
Kansas City
j 96,827
385,388
121,718 i 1,087,911
121,718
295,907 ! 658,819
Dallas
i 174,189
307,374
760,645 | 3,762,753
San Francisco
I 47,705
760,645 | 808,350 ! 123,358 2,878,750




Total.

11.7
Over 90-day maturities.

Total
Percent

Warrants.

j 591,8
!

1,177,598 j 7,723,329 ; 9,492,809 |18,326,286 :20,617,180
'
;
20.3 '

7,730,500 146,673,966 ;
|
160.0 i

28.3
1.0
14.3
22.7
77.5

71.7
43.4
53.5
47.7
82.5

46.6
32.2
29.6

100.0
100.0
100.0
100.0
100.0

50.5
37.2
25.7 !
43.8 !
33.1 |
60.6 I
3.3

40.4
29.1
54.5
50.8
47.9
28.2
76.5

.1
33.7
19.8
5.4
19.0
11.2
20.2

100.0
100.0
100.0
100.0
100.0
100.0
100.0

39.2 i 44.2 i 16.6 !

224

FEDERAL RESERVE BULLETIN".

Maturities

M A R C H 1, 1917.

of bills discounted, acceptances, and municipal warrants held by the Federal Reserve Banks
January 26, 1917.

on Friday,

[In thousands of dollars, i. e., 000's omitted.]
1 to 15 days.

31 to 60 days.

16 to 30 days.

61 to 90 days.

MuMuMuMuBills
Bills Accept- niciBills
Bills
Accept- niciAccept- niciAccept- nicidis- i
disdisdispal
Total. count- ances
ances
pal
Total. count- ances
pal
Total. count-! ances
pal Total.
count- bought. warbought. warwared.
ed.
ed. bought. rants.
ed. 1 bought. warrants.
rants.
rants.

Banks.

Bosto71
New York

230
813
285
268
2,084
563
1,041
263
457
94
160
58

Cleveland
Richmond
Atlanta
Chicago

St Louis
Minneapolis
Kansas City
Dallas
San Francisco

3,029
7,152
2,088
1,329
1,217
931
2^272
839
997
595
679
1,958

125
177
76
52
61
278
57
76
75
62

6,316

Philadelphia

291
477
122
138
581
360
170
64
334
44
75
35

2,834
5,435
1,883
1,410
297
414
1,111
758
357
93
89
1,421

23,086

1,106

30,508

2,691

16,102

327

25
15
2
i

After 90 days.

3,145
6,177
2,005
1,548
878
775
1,30(5
822
706
136
166
1,456

234
311
108
58
1,005
7(59
399
142
481
103
227
54

4,580
12,962
4,144
3,730
1,425
1,730
3,898
3,731
3,766
2;329
813
4,735

19,120

20
265

67

3,384
8,142
2,449
1,649
3,362
1,772
3,370
1,178
1,529
751
839
2,083

3,951

47,843

129

5,127
13,608
4,308
4,706
2,430
2,616
4,442
3,906
4,585
2,498
1,040
4,918

2,390

54,184

313
335
56
918

117"
145
33
338
6

35
3,055
101 1 1,855
7
878
13
874
749
456 i
826
409
156
198
217
48
845
143
27
90
95
236
1,089
10

2
436
26
30
50
50

3,255
2,001
890
969
1,205
1,237
790
291
988
147
381
1,149

10,666

891

13,303

1,746

165
45
5
82

Percentages.

Total.
•

Mudis- Accept- nicipal
ances
count- bought. wared.
rants.

Banks.

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

Bills discounted.

Bills

.. .

Dallas

San Francisco

5
12
24
28
114
37
400
133
205
49
1,007

Acceptances
bought.

Municipal
warrants.

Amoimi

Per
Per
Per
cent. Amoum cent. Amount cent. Amount cent.

5
1,121
404
177
127
126
583

6
2,887
1,350
766
24
33
1,235
441
577
260
331
632

790
1,702
527
489
4,150
2,129
1,922
554
1,815
524
903
206

5.0
10.8
3.4
3.1
26.4
13.6
12.2
3.5
11.6
3.3
5.8
1.3

13,498
27,404
8,993
7,342
3,688
3,902
7,436
5,545
5,966
3,044
1,676
9,203

13.8
28.1
9.2
7.5
3.8
4.0
7.6
5.7
6.1
3.1
1.7
9.4

629
3,709
1,482
1,806
61
402
1,784
539
605
225
178
829

7,535

8,542

15,711

100.0

97,697

100.0

12,249

6
2,887
1,345
754

Total.

Total.

MuAcBills
cept- nici- Total.
dispal
count- ances wared. bought rants.

14,917
32,815
11,002
9,637
7,899
6,433
11,142
6,638
8,386
3,793
2,757
10,238

11.9
26.1
8.7
7.7
6.3
5.1
8.9
5.3
6.7
3.0
2.2
8.1

5.3
5.2
4.7
5.0
52.7
33 0
17.2
8.3
21.6
14.1
32.8
2.0

90.0
83.5
81.7
76.1
46.6
60.6
66.7
83.5
71.1
80.0
(50.8
89.9

4.7
11.3
13.6
18.9
.7
6.4
16.1
8.2
7.3
5.9
6.4
8.1

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

100.0 125,657

100.0

12.5

77.8

9.7

100.0

5.1
30.3
12.1
14.8
3.3
14.6
4.4
4.9
1.8
1.4
6.8

Conversion operations of each Federal Reserve Bank for January, 1917.

Bank.

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta

2 per cent bonds converted.
Amounts
allotted by
Federal
Reserve
Consols of j Panamas
Board.
Total.
1930.
! Of 1936-1938.

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

$2,696,200
6,412,900
2,814,200
3,227,200
1,799,100
j 1,335,500
3,722,100
1,504,600
1,281,600
1,642,900
1,451,200
2,112,500

Total....

30,000,000




880,000
900,000

1,201,900
900,100
658,100
1,445,000

$666,000
521,000
825,000
1,202,000
899,000
667,000
1,445,000

$1,332,000
1,042,000
1,651,000
2,403,900
1,799,100
1,325,100
2,890,000

1,060,000
1,642,900
1,451,200
2,000,000

530,000
821,900
726,200
1,000,000

530,000
821,000
725,000
1,000,000

1,060,000
1,642,900
1,451,200
2,000,000

18,597.200

9,296,200

9,301,000

18,597,200

$1,332,000
1,042,000
1,651,000
2,403,900
1,799,100
1,325,100
2,890,000

50,000
250,000
500,000

13,838,200 i 4,759,000

$1,252,000
142,000
1,651 000
903,900
999,100
1,205,100
2,331,000
1,010,000
1,392,900
951,200
2,000,000

1,500,000
800,000
120,000
559,000

Conversion bonds and 1-year Treas- Balance of
ury notes issued to the banks.
allotment
which
may be
Conversion Treasury
converted
Total.
notes.
in 1917.
bonds.
8666,000
521,000
826,000

SI 364 200
5,370,900
1,163,200
823,300
10,400
832,100
1,504,600
221,600
112,500
11,402,800

225

FEDERAL EESEBVE BULLETIN.

MARCH!, 1917.

Total investment operations of each Federal Reserve Bank during the month of January, 1917.

Federal Reserve Bank.

Bills
discounted
for
member
banks.

Bills bought in open market.
Bankers'
acceptances.

Trade
acceptances.

$1,198,462 $3,038,839
598 162
2,556,318
565,122
2,095,209
644,971
1,351,779
8,582,382 2485,360
2,562,072
1 736,622
, , ,
I 1,294,163
994,661
1 605,727
1,283,005
| 1,226,753
1,421,725
|
266,295
385,388 I
I
658,819
307,374 !
123,358
2,719,761

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Totals:
January, 1917..
January, 1916.

18,326,286
11,114,900

20,376,041
9,374,500

Total.

Municipal warrants bought.

City.

$3,038,839 1
2,605,561 !i 32,798,
1,268,322
2,107,327 " """
1,351,779
822,842
2,485,360
5,200 1,741,822
1,010,250 i
15,589
660,484
1,283,005 !
465,957
1,421,725 !
151,684
385,388 ; 152,243
307,374 i 121,718
760,645
2,878,750 i
158,989

State.

All other.

$49,243
12,118

241,139
149,000

20,617,180
9,523,500

7,201,908
9,507,800

§15,372

Total.

82,798,013
1 268 322
838,214

§2,040

3,000
508,180

3,000
1,170 704
465,957
151,684
152,243
121,718
760 645

2,040
236,000

526,552
62,500

7,730,500
9,806,300

Total investment
operations.

United States bonds and Treasury notes.
Federal Reserve Bank.
2 per cent. 3 per cent. | 4 per cent.
Boston
New York
Philadelphia...
Cleveland
Richmond.....
Atlanta
Chicago
St. Louis
Minneapolis
Kansas C i t y . . .
Dallas
SanjFrancisco..
Totals:
January, 1917.
January, 1916.




512,500

§60,000 |.

26,400
46,250
525 000

25,000

January,
1917.

January.
1916.

34,237,301
6,074,236
3 940,771
2,861 364
11,113,992
4,831 894
3,475,117
2354,689
2,801,402
828,926
1,087,911
5,919,680

$3,411,100
10,167,700
3,012,800
1,400,500
3,494,700
2,269,000
3,838,200
1 903,800
853,400
1,775 200
2,270,500
2674600

2,431,390 49,105,356
6,626;800

37,071,500

Total.

872,500
26,400
46,250
525,000

1,240

'i'735,'666
2,370,150
4,393,800

1-year
notes.

1,240
25,000
1,735,000

61,240 !
403,000 I 1,830,000

226

FEDEEAL EESEBVE BULLETIN.

HABCH 1, 1917.

RESOURCES AND LIABILITIES.
Resources and liabilities of each of the Federal Reserve Banks and of the Federal Reserve System
Fridays, Jan. 26 to Feb. 23, 1917.

at close of business

on

RESOURCES.
[In thousands of dollars, i. e., 000's omitted.]

Boston.

Gold coin and certificates in vault:
Jan. 25
Feb.2
Feb.9
Feb. 16
Feb. 23
Gold settlement fund:
Jan. 26
Feb. 2
Feb.9
Feb.16
Feb. 23
Gold redemption fund:
Jan. 26
Feb. 2
Feb. 9
Feb. 16
Feb. 23
Legal tender notes, silver, etc.:
Jan. 26...
Feb. 2
Feb.9
Feb.16
Feb.23
Total reserve:
Jan. 26
Feb. 2
Feb.9
Feb. 16
Feb. 23
5 per cent redemption fund
against Federal Reserve Bank
notes:
Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
Bills discounted—members:
Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
Bills bought in open market:
Jan. 26
Feb.2
Feb.9
Feb.16
Feb. 23
United States bonds:
Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
1-year Treasury notes:
Jan. 26
Feb.2
Feb. 9
Feb.16
Feb. 23
Municipal warrants:
Jan. 26
Feb.2
Feb.9
Feb.16
Feb. 23
Federal Reserve notes, net:
Jan.26
Feb.2
Feb.9
Feb.16
Feb. 23




New
York.

Phila- Cleve- Richdelphia. land. mond.

Atlanta.

Chicago.

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

L

San
Francisco.

Total.

1
14,977
13.983
12;838
12,498
12,740

145,136 23,558 16,860
156,451 23,651 j 16,711
124,074 27,792 i 16,101
128,155 28,305 15,704
138,403 24,070 15,010

5,434
5,296
5,280
5,291
5,373

6,138
5,448
5; 801
5,687
5.736

33,034
33,216
31,042
28,310
31,523

26,552 18,085
28,777 17,701
25,251 18,379
25,443 18,258
26,510 16,826

2.912
5,791
7,012
8,002
5,197

33,504
38,920
35,298
40,048
32,694

3,468
3,583
1,510
437
2,302

495
528
502
493
478

200
200
200
200
200

1,296
1,225
1,279
1,231

23,891 10,233
23,356 13,063
23,955 14,540
23,990 15,461
22,768 12,642

15,132
15,237
19,901
18,472
17; 825

50,897
39,182
46,089
56,644
53,768

15,117
14,258
8,633
3,944
10;855

50
48
50
48
50

250
250
250
250
250

100
100
100
100
100

48
40
27
25
66

1,350 !
2,158 I
152

922
840
459
158
233

974
536
408
202

204.352 39,697
197', 233 38,849
172 571 36,984
185,201 32,507
200,232 35,258

44,420
46,502
41,915
41,580
41,788

1,270
1,207
511
140
22(5
31,429
30,475
33,300
31,158
30,841

7,831 I

245
257
234
328
448
127
102
62
113
121

6,900
6,855
7,295
7,365
7,562

5,833
5,940
6,535
6,717
6,948

19,530
13,930
13,526
13,928
13,027

302,341
306,964
274,194
274,367
281,355

6,316
6,124
5,831
4,857
4,457

27,355
29,443
28,363
25,687
27,358

10,629
11,067
9,101
7,854
7,660

3,804
2,878
7,593
6,575
8,409

213,771
212,961
212,961
216,221
213,861

84
68
47
41
19

125
125
125
125
125

156
163
156
154
149

45
41
28
25
22

15
15
15
15
15

1,813
1,835
1,734
1,804
1,922

1,110
1,505
996
987
927

3,054
3,376
3,176
2,788
2,822

497
607
643
665
711

220
185
88
90
81

572
648
755
785
819

90
95
24
44
45

17,579
12,185
10,633
7,609
15,249

67,848
73,841
67,536
69,545
65,344

21,079
21,751
17,584
14,347
14,696

17,406
17,615
17,658
16,973
16,703

14,473 10,468
14,724 10,759
12,851 11,059
11,081 11,326
9,553 11,410

34,631 17,079 23,439 535,504
16,918 533,945
36,646
35,902 16,419 21,158 499,522
33,296 15,381 20,562 500,001
35,150 15,449 21,496 512,387

300
300
300
300
300
790
747
792
2,208
2,969

1,702
1,473
1,345
1,988
2,066

13,498
11,962
13,292
13,877
12,749

27,404
25,599
33,615
35,544
33,384

100
100
100
100
100

I

400
400
400
400
400

489
428
1,068
1,478
1,963

4,150
3,609
3,444
3,874
3,710

2,129
2,273
2,540
2,474
2,219

1,922
1,159
1,700
1,616
1,198

554
541
541
581
556

1,815
1,795
1,949
2,570
2,467

524
509
512
489
509

903
1,310
1,278
1,375
1,141

206
212
199
206
164

15,711
14,707
16,200
19,553
20,266

8,993
7,342
i 11,194 6,404
I 14,815 8,217
i 15,166 10,859
14,130 10,484

3,688
4,414
4,717
5,584
6,681

3,902 7,436
3,435 7,080
3,538 8,338
3,484 10,135
3,444 10,689

5,545
4,980
6,237
7,968
8,446

5,966
5,689
6,384
6,735
6,940

3,044
2,833
2,735
4,358
4.950

1,676
1,159
1,286
2,320
2,517

9,203
8,363
8,918
10,024
9,552

97,697
93,112
112,092
126,054
123,966

527
651
832
694
1,304

232
59
70
71
71

826
136

6,117
5,171
4,985
4,985
4,985

1,340
587
440
442
442

1,372
296
50
50
50

7,413
6,203
5,963
5,961
5,961

2,203
2,203
2,203
2,203
2,203

1,913
1,495
1,409
1,409
1,409

8,518
8,518
8,518
8,518
8,518

3,603
3,403
3,403
3,403
3,403

1,919
2,369
2,429
2,429
2,429

36,122
30,550
29,470
29,471
29,471

1,666
1,666
1,666
1,666
1,666

1,726
726
726
726
726

1,999
:,999
,999

1,820
1,820
1,820
1,820
1,820

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

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

2,962
2,962
2,962
2,962
2,962

891
891
891

1,230
1,230
1,230
1,230
1,230

963
963
963
963

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

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

19,647
18,647
18,647
18,647
18,647

629
504
631
621
611

3,709
4,300
4,631
5,534
5,534

,482
,406
,431
,431
1,431

1,806
1,918
2,401
2,910
2,962

61

402
124
123
124
124

1,784
1,855
2,588
2,842
2,842

539
600
924
1,127
1,127

605
555
530
515
515

225
238
340
340
492

178
199
254
254
506

829
965
965
965
965

12,249
12,664
14,833
16,678
17,124

1,069
1,070
882
1,390

18,927
18,814
16,948
16,200
14,958

1,342
627

893
934
1,018
775
859

155
220
439

2,993
2,014
2,472
2,401
2,446

27,061
25,515
23,290
22,520
22,076

110

1,695
1,665
1,739
1,315
2,738

142 I.

MARCH 1, 1917.

227

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. 26 to Feb. 23, 1917—Continued.
RESOURCES-Continued.
[In thousands of dollars, i. e., 000's omitted.]
New

! Phila-

Clove-

St. Minne- Kansas
Louis. apolis. City.

Chi-

York, delphia.i land.

Total.

Due from other Federal Reserve
Banks, net:
Jan. 26
Feb. 2.
Feb. 9.
Feb. 16.
Feb. 23
Uncollected items:
Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
All.other resources:
Jan. 26
Feb. 2
Feb. 9
Feb. 16
Feb. 23
Total resources:

Jan. 26
Feb. 2...
Feb. 9...
Feb. 16.
Feb. 23.

159
11,560

1,061

10,136 15,780
7,044 15,799
8,160 16,270
7,730 :17,735
14.524

26,997
15,482 • 24,292
9,387
23,640
13,660
29,918
15,257
29,590

14,497
18,613
18,319
21,275
17,133

9,266
8,917
8,823
12,055
11,731

8,575
7,212
7,321
8,261
7,969

701
779
2,343
407
313

474
621
361
298
280

737
971
168
484
266

227
147
137
128
102

2,727
2,521
1,979
1,948
2,225

|62,293 ! 285,750

69,837
74,922
74,741
79,101
73,530

75,489
73,512
72,772
77,024
77,017

43,901
41,294
43,089
44,529
44,725

33,206
32,117
33,336
32,762
31,172

=
i
...I
j
1
i

313
94 :
08 I

273,275
62,908
60,400 [ 263,064
64)674 ! 275,589
66,409 : 286,894

1,933
2,116
982

3,687
3,783
3,750
10,307

377
S3
403

539
1,804
460
509

193
55

467
14,123
3,594 U2,687
1,102 U3,255
415 17,840
1732
1,431

8,137
6,019
7,496
9,748
9,562

4,358
3,076
3,654
3,710
4,063

8,985
6,699
7,359
7,996
8,540

3,917
4,032
4,967
5,608
4,560

4,229
9,426
5,829
6,553
5,034

126,437
126,611
121,225
144,249
136,940

3,616
3,532
3,215
2,482
2.201

117
119
85
81
108

566
497
326
208
187

1,737
1,800
1,240
1,289
1,510

612
304
395
431
343

13,609
13,153
11,078
8,619
8,271

107,949 I 44,497
115,221 42,633
111,395 40,073
1116,630 39,347
1117,233 ! 39,682

34,091
33,614
33,370
33,732
33,435

57,756
57,203
56,955
56,661
59,664

31,000
31,367
31,000
31,599
30,852

45,397
45,665
44,967
45,486
45,360

880,314
881,991
860,012
894,032
890,280

2,402 ! 3,074
3,074
2,402
3,074
2,405
3,074
2,405
3,074
2,407

2,694
2,695
2,693
2,693
2,695

3,930
3,930
3,913
3,915
3,915

55,694
55,725
55,713
55,773
55,989

441
2,335 j
2,287 !
940
1,844 i
98
923 ; 2-670
632 | 140

1,492
1,578
1,070
731

2,643
2,844
2,042
1,197
1,374

25,607
23,333
15,525
10,851
13,407

1,109
970
516
769
668

LIABILITIES.
Capital paid in:
Jan. 26
Feb. 2
Feb. 9
Feb. 16
Feb. 23
Government deposits:
Jan. 26
Feb. 2
Feb.9
Feb. 16
Feb. 23
Due to mombers—Reserve account:
Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
Collection items:
Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
Federal Reserve notes, net:
Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
Due to other Federal Reserve
Banks, net:
Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
All other liabilities:
Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
Total liabilities:
Jan. 26
Feb.2
Feb.9
!
Feb. 16
Feb. 23
1

4,990
4,990
4,990
5,035
5,083

11,852 . 5,230
11,858 i 5,230
5,230
11,860
11,861 I 5,243
11,888 ; 5,259

6,020
6,020
6,020
6,020
6,087

3.361
3)363
3,363
3,363
3,412

2,410
2,417
2,420
2,418
2,419

6,932
6,947
6.946
6.947
0.950

325
- 38
2-108
2 - 89
340

3,197 ! 2,861
2,027 : 2,778
169 ! 2,077
1,817
1,616
1,191

1,157
1,140
965
1,037
1,079

2,058
1,489
1,472
1,518
1.516

2,873
2,577
2,599
2,032
1,859

1,592 ! 4,633
2,164
3,547
1,566
55 : 2 -416
416
2
-334

2

!
.
•
'
j
'

2,799
2,799
2,799
2,799
2,800

j

47,488 ! 246,548 i 46,086 58,582 ! 26,153
49,980 ' 238,015 j 48,496 56,804 : 25,778
229,947 I 46,314 ! 56,774 ! 26,181
47,658
229,110 ! 50,489 I 58,280 ! 25,206
49,243
233,368 | 46,458 j 58,202 ! 20,048
49,783

14,097
16,851
17,059
19,943
19,972

90,500
94,251
94,248
95,459
90,465

26,737
27,760
26,807
26,680
27,372

26,758 !
26,682 !
26,986 "
26,842
20,079

45,623
45,246
45,461
44,903
46,416

23,303
24,800
24,769
25,146
25r005

35,966
35,215
35,966
37,290
37,007

687,841
689,878
678,170
688,591
692,475

14,928
18,300
16,349
19,770
17,398

9,730
7,324
9,548 ; 6,820
9,013 : 6,864
11,687 ! 8,252
11,049 : 7,709

9,929
6,806
8,397
5,138
3,235

8,526
11,859
8,470
13,069
12,881*

5,587
6,180
6,958
6,699

2,596
2,243
2,135
2,836
2,178

5,839
5,476
5,502
6,665
7,147

3,117
2,294
2,468
2,642
2,130

2,784
3,599
2,963
2,998
2,979

97,374
101,232
97,207
121,218
108,826

3,749
3,530
5,209
6,190
6,040

3,897
3,466
2,861
3,077
2,935

726
992

1,824
1.535
1,845
2,689
3,181

394

457
1,847
3,086

7,023
7,458
7,778
10,063
11,107

2,421
461

18,875 ;
21,242 j
21,088 :
31,140 I
23,712 :

5,199 :
33

642 i

3,645
2,940
2,721
2,560
2,827

399

1,256
i 314

935
932
975

4,175

331
46
57
82 !
91
94

79
100
197
205

285,750
273,275
0,400 j 263,064
275,589
64,674
6,409 j 280,894
62,293

154

1,464
13,885

753

766
318

547

74
77

I 75,489
I 73,512
| 72,772
I 77,024
77,017

85
43,901
| 41,294
: 43,089
j 44,529
! 44,725

33,206
32,117
33,336
32,762
31,172

107,949
!115,221
111,395
1116,630
;117,233
I

44,497
42,633
40,073
39,347
39,682

34,091
33,614
33,370
33,732
33,435

Difference between net amounts due from and net amounts due to other Federal Reserve Banks.




387
190

90 !
118 ;
139 i
.
136
138
69,837
74,922
74,741
79,101
73,530

13,509
11,471
13,093
17,089
19,061

57,756 31,000
57,203 31,367
56,955 31,000
56,661. 31,599
59,664 30,852
2

352
304
510
522

45,397
45,665
44,967
45,486
45,360

880,314
881,991
860,012
894,032
890,280

Overdraft.

228

FEDERAL BESERVE BULLETIN.

MARCH 1, 1917.

FEDERAL RESERVE NOTES.
Federal Reserve note account of each Federal Reserve Agent at close of business on Fridays,

Jan. 26 to Feb. 28, 1917.

[In thousands of dollars; i. e., 000's omitted.]

Boston.

Federal Reserve notes:
Received from ComptrollerJan. 26
Fob. 2
Feb. 9..
Feb. 16
Feb. 23
Returned to ComptrollerJan. 26
Feb.2
Feb. 9
Feb. 16
Feb. 23
Chargeable to Federal Re- \
serve AgentJan. 26
Feb.2
Feb.9
Feb.16
Feb. 23
In hands of Federal Reserve
AgentJan. 26
Fob. 2
Feb.9
Feb. 16
Feb. 23
Issued to Federal Reserve |
Bank, net—
j
Jan. 26
Feb.2
Feb.9
Feb.16
Feb. 23
Amounts held by Federal Reserve Agent:
In reduction of liability on
outstanding notes—
Gold coin and certificates on h a n d Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
Credit balance in gold redemption fund—
Jan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
Credit balance with Federal Reserve BoardJan. 26
Feb.2
Feb.9
Feb. 16
Feb. 23
As security for outstanding
notesCommercial paperJan. 26...
Feb.2
Feb.9
Feb. 16
Feb. 23
TotalJan. 26
Feb.2
Feb.9
Feb.16
Feb.23
Memorandum:
Total amount of commercial
paper delivered to Federal
Reserve AgentJan. 26
Feb.2
Feb.9
...
Feb. 16
Feb.23




28,880
28,880
28,880
33,880
33,880
7,772
7,819
8,385
8,570
8,626

New
Phila- Cleve- RichAtYork. jdelphia. land. mond. lanta.

185,400
185,400
224,260
237,680
246,080

j 30,480 17,660
i 30,480 17,660
30,480 22,660
33,480 23,860
37,520 23,860

59,890 6,340
60,548 6,790
60,813 | 6,830
61,274 6,908
61,534 7,144

21,108
21,061
20,495
25,310
25,254

125,510
124,852
163,447
176,406
184,546

7,210*
7,210
6,710
10,560
10,560

18,020
18,020
42,680
47,200
50,000

4,046
4,099 i
4,188 j
4,220
4,728

24,140 13,614
23,690 13,561
23,650 18,472
26,572 19,640
30,376 19,132
7,260
7,260
4,860
5,760
9,240

3,100
3,100
6,800
7,600
5,900

Chicago.

St.
Minne- Kansas
Louis. apolis. City. Dallas. Fran- II Total.
Cisco.

29,500
29,500
29,500
29,500
29,500

35,380
35,380
36,380
36,380
36,380

11,880
11,880
12,680
13,680
17,680

22,540
22,540
22,540
22,540
22,540

26,500
26,500
26,500
26,500
32,000

7,402
7,736
8,018
8,235
8,375

4,089
4,186
4,360
4,430
4,580

1,719
1,724
1,734
1,737
1,847

2,737
2,767
2,824
2,844
3,273

994
1,022
1,074
1,090
1,136

22,098
21,764
21,482
21,265
21,125

31,291 10,161
31,194 10,156
32,020 10,946
31,950 11,943
31,800 15,833

4,000 8,135 3,000
4,000
8,635 I 3,000
3,900
9; 935 I 2,500
3,900 10,385 2,500
3,900 10,385 2,500

13,898
13,851
13,785
14,750
14,694

107,490 16,880 10,514 18,098 23,156 7,161
106,832 16,430 10,461 17,764 22,559 7,156
120,767 18,790 11,672 17,582 22,085 8,446
129,206 20,812 12,040 17,365 21,565 9,443
134,546 21,136 13,232 17,225 21,415 13,333

13,150
13,150
12,850
13,850
13,850

103,349
103,349
114,949
123,549
121,146

748
701
935
900
844

4,141
3,483
5,818
5,657
5,400

870
770 !
930 |
1,052
1,216 !
12,280 i.
11,930 l!
.
12,730 .
12,530 '
12,130 ;

1,400
3,500
4,060
13,898
13,851
13,785
14,750
14,694

634
581
660

5,063
5,327
5,554
5,706
5,947

104,358
106,394
108,262
109,827
112,101

19,803 25,506 25,807 30,257 15,727
19,773 25,478 25,754
16,550
19,716 25,426 25,672 29,766 16,526
19,696 25,410 25,642 29,614 16,225
19,267 30,864 26,161 29,373 16,208

365,022
363,826
407,618
429,673
449,939

3,040
3,040
3,040
3,040
3,040

5,620
5,620
5,620
5,020
10,520

4,958
5,108
4,658
3,688
3,538

1,000
8,256
8,567
8,567
8,887

13,030

4,370
4,370
4,370
4,370
4,370

13,230
13,230
13,230

I
!
i
!
!

22,271
21,737
21,199
21,047
20,486

j
j
j
!
!

10,340
10,540
10,110
10,110
10,110

i
:
;
!

1,131
1,167
1,059
1,107
1,046

151
146
136
133
123

741
711
854
834
785

878
826
1,010
96

1,231
1,149
1,119
1,038

12,900
12,900
11,000
10,000
10,000

13,850
13,700
13,900
13,450
13,450

7,010
7,010
8,310
9,310
13,210

6,510
7,010
6,810
6,810
6,430

3,250
3,250
3,250
3,250
3,250

13,660
13,260
13,260
13,260
13,380 !

4,290
4,090
5,865
6,750

4,631
4,281
3,781
3,781
3,781

4,347
3,847
3,847
3,847
3,847

2,500
2,500
2,500
3,100
3,100

1,935
1,785
2,235
3,205
3,835

4,655 1
4,304 1
3,809
3,810
3,809

73,329
73,249
99,270
108,220
118,470

i
16,763 19,886 20.849
16,733 19,858 20,646
16,676 19,806 21,014
16,656 20,390 21,954
16,227 20,344 22,623

1,715
1,618
1,444
1,374
1,224

4,649
5,953
6,778
7,263
8,119

469,380
470,220
515,880
I 539,500
i 562,040

1,993
2,010
2,034
2,335
2,352

774
717
615
565

107,490 16,880 10,514 18,098 23,156 7,161
106,832 16,430 10,461 17,764 22,559 7,156
120,767 18,790 11,672 17,582 22,085 8,446
129,206 20,812 12,040 17,365 21,565 9,443
134,546 21,136 13,232 17,225 21,415 13,333

1,401
3,502
4,062

2,313
2,366
2,448
2,478
2,559

5,165
5,165
5,165
5,165
5,165

2,960
2,960
2,960
2,960
2,960

3,730 : 9,880
3,730 ' 9,880
3,730 10,980
3,730 11,380
3,730 12,543

28,120 35,320 17,720
28,120 35,320 18,560
28,120 35,320 18,560
28,120 35,320 18,560
28,720 35,320 18,560

16,763
16,733
16,676
16,656
16,227

4,347
3,848
3,848
3,850
3,850

1,941
1,939
2,236
3,217

290,577
308,348
321,453
331,469

166,174
166,374
178,344
188,144
194,904
607
590
566
545

13,436
12,650
15,126
15,006
14,722

10,130 14,120
10,030 15,960
10,030 15,960
9,830 15,680
9,330 15,380

93,710
95,050
95,250
94,120
96,560

!
;
!
i
j

670

19,886 20,849 22,271
19,858 20,646 21,737
19,806 21,014 21,199
20,390 21,954 21,047
20,344 22,623 20,486

2,500
2,500
2,500
3,100
3,100

14,727
16,550
16,526
16,225
16,208

1,023
1,148
1,143
2,004
1,842

18,373
16,503
19,628
24,183
25,283
14,727
16,550
16,526
16,225
16,208

291,693
290,577
308,348
321,453
331,469

19,115
19,692
21,715
26,746
28,618

MARCH l ,

229

FEDERAL BESERVE BULLETIN.

1917.

Federal Reserve note account of each Federal Reserve Bank at close of business on Fridays, Jan. 26 to Feb. 23, 1917,
[In thousands of dollars; i. e., 000's omitted.]
!
|
AtPhila- Clove- ' Richdelphia. land. | mond. lanta.

Chicago.

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

18,098
17,764
17,582
17,365
17,225

23,156
22,559
22,085
21,565
21,415

7,161
7,156
8,446
9,443
13,333

16,763
16,733
16,676
16,656
16,227

893
934
1,018
775
859

541
560
656
5G0
620

734
815
920
704
846

1,695
1,665
1,739
1,315
2,738

702
907

88,563 15,538
88,018 15,803
103,819 17,847
113,006 19,159
119,588 20,162

9,621
9,527
10,654
11,265
12,373

17,557
17,204
16,926
16,805
16,605

22,422
21,744
21,165
20,861
20,569

5,466
5,491
6,707
8,128
10,595

107,490
106,832
120,767
129,206
134,546

10,514 ! 13,808 18,525
10,461 ! 13,674 18,278
11,672 i 11,717 18,304
12,040 10,615 17,784
13,232 10,565 17,634

Boston.

Federal Reserve notes issued to
banks:
Jan. 26
Feb.2
Feb.9
Feb.16
Feb. 23
Federal Reserve notes in hands
of banks:
Jan. 26
Feb.2
Feb.9
,
Feb. 16
Feb. 23
Federal Reserve notes in circulation:
Jan. 26
,
Feb.2
Feb.9
Feb.16
Feb. 23
Gold and lawful money deposited
with or to credit of Federal Reserve Agent:
Jan. 26
Feb.2
Feb.9
Feb. 16
,
Feb. 23

New
York.

13,898
13,851
13,785
14,750
14,694

107,490
106,832
120,767
129,206
134,536

16,880
16,430
18,790
20,812
21,136

10,514
10^461
11,672
12,040
13,232

1,069
1.070
'882
1,390
839

18,927
18,814
16,948
16,200
14;958

1,342
627
943
1,653
974

12,829
12,781
12,903
13.360
13;855

13,898
13,851
13,785
14,750
14,694

19,886 20,849
19,858 20,646
19,806 21,014
20,390 21,954
20,344 22,623

San
Francisco.

14,727 291,693
16,550 290,577
16,526 308,348
16,225 321,453
16,208 331,469

22,271
21,737
21,199
21.047
20,486

2,993
2,014
2,472
2,401
2,446

31,925
30,547
29,825
29,614
28,298

11,734
! 14,536
j 14,054
I 13,824
! 13,762

259,768
260,030
278,523
291,839
303,171

1,126
1,287
1,020

2,642
2,736
2,511
2,374
2,108

111
250
390
516
654

276
155
220
439
236

16,061
15,826 j|
15,550
15,369 i
15,207

17,244
17,122
17,295
18,016
18,236

20,738
20,396
20,624
21,438
21,969

21,995
21,582
20,979
20,608
20,250

17,386
17,358
17,306
17,290
17,244

18,914 21,601 i 14,727 j 273,320
18,861 21,737 ; 16,550 j 274,074
"
18,779 21;199 16,526 : 288,720
18,749 21,047 16,225 : 297,270
18,788 20,486 16,208 306,186

j

16,880
16,430
17,390
17,312
17,076

Total.

7,161 ! 12,416
7,] 56 12,886
8,446 i 12,829
9,443 12,809
13,333 ! 12,380

I

GOLD IMPORTS AND EXPORTS.
Gold imports and exports into and from the United States from Jan. 26 to Feb. 16, 1917.
[In thousands of dollars; i. e., 000's omitted.]

Feb. 16,
1917.

Feb. 9,
1917.

Jan. 26,
1917..

Feb. 2,
1917.

265

385

269

897
500

1
133
2

2
707

Total
since
Jan. 1,
1917.

Total for
corresponding
period
during
1916.

IMPORTS.

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

1,066

36,066

1,681
5
18 734
51,005
41,042

17,014

193

15 495
3

500

359

4,198
45

1,662

521

1,478

51,757

112,467

22,682

1
11
114
4,950

19
514
59
719

2,764

1
233
4,054

35
1,184
1,063
25,929

1,303

509

6,735

5,076

Total imports

1,311

3,273

4,288

28,211

8,809

1,134

31
1,815

6,130

1,134

1,840

6,130

5,422

30,057

14,939

EXPORTS.

Domestic:
Ore and ba^e bullion
United States mint or assay office bars. .
Bullion refined
Coin
Total
Foreign:
Bullion, refined
Coin

. .

Total
Total exports
Excess of gold imports over exports since Jan. 1,1917
Excess of gold imports over exports since Aug. 1, 1914




31
159
•

190
5,266

1,311

3,273

57
714

882,410
951,172

230

FEDERAL RESERVE BULLETIN.

MAKCH 1,

1917.

EARNINGS ON INVESTMENTS OF FEDERAL RESERVE BANKS.
amounts of earning assets held by each Federal Reserve Bank during January, 1917, earnings from each class of
earning assets, and annual rates of earrings on the basis of January, 1917, returns.
Average balances for the month of the several classes of
earning assets.
Bills
bought in
open
market.

United
States
bonds and
Treasury
notes.

SI.578,732 $13,443,098
3;795,495 33,033,475
766,946 10,501,050
595,783 8,718,124
3,873,734 3,663,500
2,946,127 4,242,304
3,174,927 8,840,944
781,055 6,407,550
1,809,200 6,422,500
492,445 3,354,022
845,821 2,036,426
216,537 10,911,610

$2,234,484
2,069,437
2,735,129
7,791,699
3,145,151
2,854,467
10,219,358
3,093,900
3,101,600
9,463,108
5,033,250
3,351,072

S755,711 $18,012,025
2,557,181 41,455,588
928,012 14,931,137
1,973,427 19,079,033
60,750 10,743,135
400,909
10,443,807
1,550,655 23,785,884
614,247 10,896,752
11,883,800
550,500
204,054 13,513,629
8,080,411
164,914
15,408,408
929,189

i 20,876,802 111,574,603

55,092,655

10,689,549 I 198,233,609

Bills discounted,
members.

Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas City....
Dallas
San Francisco.,
Total
Earnings from—
United
States
Bills
Bills disMunicibonds pal warcounted, bought
in open
and
memmarket. Treasury rants.
bers.
notes.

Municipal
warrants.

Total.

Calculated annual rates of earnings from—

Total.

United
Bills
States
Bills disMunicibonds pal warcounted, bought
in open
and
memmarket. Treasury rants.
bers.
notes.

$44,810
100,709
36,836
46,049
29,954
27,649
60,588
26,218
30,625
29,643
19,698
36,140

Per cent. Per cent. Per cent. Per cent. \ Per
2.96
2.81
3.82
3.09
3.00
•2.76
3.54
2.99 I
3.00
2.79
3.92
3.13 I
2.66
2.78
4.14
3.40
2.93
3.08
3.76
3.50
2.96
3.07
3.64
3.57
2.59
2.77
4.82
3.29
2.47
2.83
3.83
3.26
2.58
2.85
4.49
2.99
2.37
2.85
4.92
2.46
2.65
2.85
4.65
3.33
2.63
2.77
4.67
2.93

488,919

Total.

t

$5,617
5,314
6,981
17,693
7,815

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

$5,128
11,413
2,556
2,094
12,384
8,815
12,991
2,540
6,905
2,058
3,278
856

$32,080
77,473
24,828
20,559
9,572
10,719
20,777
15,445
15,519
8,128
4,834
25,641

22,491
6,534
6,804
19,030
11,128
7,329

$1,985
6,509
2,471
5,703
183
1,177
4,329
1,699
1,397
427
458
2,314

Total...

71,018

265,575

123,674 j

28,652




4.01

2.80

2.64

3.16

cent.
2.93
2.86
2.90
2.84
3.28
3.22
3.00
2.83
3.a3
2.58
2.93
2.76
2.90

231

FEDEKAL RESERVE BULLETIN.

MABCH 1,1917.

DISCOUNT RATES.
Discount rates of each Federal Reserve Bank in effect Feb. 28, 1917.
Maturities,
Commodity
paper
maturAgriculing
tural
within
To
31 to 60
11 to 30
to 61 90
Within Within days, in-j ; 16 to 30 i 31 in- 60 to in- and live- days,30 days, in-| I 61 to 90 days.
days,
stock
indays, in- days,
days, in- 90
10 days. 15 days. clusive, elusive. clusive. clusive. paper clusive. clusive, j elusive.
over 90
Discounts.

Trade acceptances.

Paper
bought
in open
market.

Member
banks1
collateral
loans.

j

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

31

4
3
31
3*

4
31

1

s34
(*>

i 31-51

3-5

31
31

f
31
4

i Rate for bills of exchange in open-market operations.
a Rate for trade acceptances bought in open market without member bank indorsement.
* Rate for commodity paper maturing within 30 days, 31 per cent; over 30 to 60 days, 4 per cent; over 60 to 90 days,4$ per cent; over 00 days,
5 per cent.
NOTE.—Rate for bankers' acceptances, 2 to 4 per cent.




NET DEPOSIT LIABILITIES, RESERVES HELD IN VAULTAND IV/TH FEDERAL RESERVE BANKS,
AND RESERVE PERCENTAGES BY CLASSES OF NATIONAL BANKS, /9/4 TO/9!6.
CUrvca / represent

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GxrrcaZ. represent MtuteJteserpas/tUcs
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NATIONAL BANKS IN CENTRAL RESERVE CITIES.

NATIONAL BANKS IN RESERVE CITIES.

to

COUNTRY BANKS.

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233

FEDERAL RESERVE BULLETIN.

MARCH 1,1917.

GOLD HOLDINGS IN MILLIONS OFDOLLARS
OF TREASURY, NATIONAL BANKS, FEDERAL
RESERVE BANKS,AM? FEDERAL * RESERVEAGE/iTS
IN 1314,1915,$/d/6.
Curve /. reprcsen&s Gold held, irvJreasary,
kwe ofamourtte 7ielda^axnsd6old, Qsrttf(cafes
#00

7300

k

J ^ ^ S t f ^ d J S

Curve 2. represents Gold held, i/njrcasizrif asuC JfatzorialJdctftJcs.
Curve 3. represents Gold, held. inJreasury,
JfafalJ8Jc
dS t o l
J l B
Curve4, rejvrcsents Aggregate 6otd,JfoZdcru?s

/SCO

I2OO

I2OO

//GO

IIOO

1000

/ax?

/
300

900

SCO

too

A-—'
POO

6oo

600

SCO

SOO

400

4QO

300

300

'••..I

•*
BOO

200

__

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M/iY! ^

234

FEDERAL RESERVE BULLETIN.

MARCH 1 , 1 9 1 7 .

FOREIGN BANK STATEMENTS.
Comparative statements shovring condition of the four principal European banks of issue at close of calendar years
1913 to 1916.
[Original figures have been converted into United States dollars at the
following legal equivaoents: £=$4.8665; franc=19.3 cents; ruble=51.5
cents; mark= 23.8 cents.]
[In thousands of dollars; 000 omitted.]
BANK OF ENGLAND.
[Combined data for issue and banking departments.]
[From the London Economist.]
•
Dec. 29,
1915.

Dec. 31, I Dec. 30,
1913.
I 1914.

Dec. 27,
1916.

ASSETS.

Gold and silver
170,245
Government securities:
j
Held by iss"ue department.
89,787
Held by banking department
64,233
Other securities
I 253,729
Total
LIABILITIES.

264,275

338,191

250,510

89,787

89,787

89,787

72,061
516,998

159,816
545,416

278,304
518,094

| 577,994 |l,017,037 |l,045,529

1,150,460

=

j'

i

j

RUSSIAN STATE BANK.
[From weekly statements of the Russian State Bank.]
Dec. 16/ Dee. 16/ Dec. 16/
29,1913. 29,1914. 29,1915.

Gold bullion and s p e c i e . . . . . . S780,902 $800,124 8830,046 $758,396
In vault
87,097 110,319 139,050 1,107,171
Gold abroad
31,886
24,678
18,928
59,089
Bills on ha^id ".
318,383 202,325
126,468
Shorfcterni bills of the Imperial Treasury
255,720 11,670,959 3,365,036
Advances on securities
90,790 131,036 340,939
276,749
Advances on merchandiscl.. 84,604
56,921 I 58,128
23,734
Advances to popular credit institutions
35,505
46,988 | 39,802 i 22,171
Advances to farmers
8,440
10,765 ! 11,572
9,247
Advances to manufacturers..
7,743
5,726 | 4,444
3,892
Loans to the Petrograd and
Moscow public pawnshops.
10,083 :
7,932
6,371
8,122
Protested bills
6,513 !
•
1,974
597
3,162
75,358 I 133,612
Securities owned
53,774
70,098
128,923 160,890
Due from branches and offices
189,011
7(5,316
70,627
53,581
67,399 j

Total..
70,822
1,539,811 2,057,853 :3,689,378
16,111
253,624
LIABILITIES.
616,715 Capital.
28,325
28,325
28,325
107 Current account of the Impe193,081
rial Treasury
113,426 105,134
299,476
188,425 437,736
account
111,947
Total
| 577,994 1,017,037 1,045,529 j 1,150,460 Current and time deposits
198,326 217,383
Special
deposits
188,814
Drafts and letters of credit
8,042
unpaid
12,424
3,993
BANK OF FRANCE.
Notes in circulation
859,293 1,474,880 2,731,879
61,053
Accrued nrofits an operations.! 33,630
33,218
[From weekly statements of the Bank of France.]
14333
95,444
Sundry libiliti
Sd
liabilities
• 14,333
13,211
[000 omitted.]
Total
1,539,811 2,057,853 3,689,378
Dec. 26, Dec. 10, Dec. 30, Dec. 28,
1914.1
1915.
1916.
1913.
GERMAN REICHSBANK.

Proprietors' capital
Rest (surplus)
Public deposits
Other deposits
Seven-day and other bills
Notes in circulation

70,822
15,827
49,913
297,280
I
66
| 144,086

Dec. 16/
29,1916.

70,822 i 70,822
16,118
15,978
131,067 241,755
! 623,182 544,914
;
87
116
! 175,872 171,833
:
1

6,088,657
28,325
111,247
804,603
301,002
15,643
4,424,512
230,173
173,152
6,088,677

ASSETS.

Gold in vault
Other metallic reserve
Total vault reserve
Foreign credits
Government securities:
Bonds, consols, and advances to the GovernmentPermanent
investments
Advances made since
outbreak of war
Treasury bills discounted
(advances to
foreign
governments)
Loans and discounts
Bills matured and extended..
Advances on bullion, specie,
securities, etc
Sundry assets
Total

678,856
123,532

799,359
67,750

967,950
67,953

652,885
56,910

802,388

867,109 1,035,903

709,795
326,766
159,380

203,962

57,900

57,900
694,800

965,000

41,165
702,040

121,590
82,839
354,002

149,074 2 150,686
93,064

222,320
60,674

294,607

1,397,033

3,145,224

Dec. 31, Dec. 31, Dec. 30,
1915.
1916.
1914.

$599,873
t98,0S9 S581,954
$278,453
Gold
7,633
3,884
65,886
8,774
Other metallic reserve..
Total metallicreserve.. 344,339 I 506,863 589,587
603,757
1,428,200 Imperial Treasury and Loan
Bank certificates
100,457
10,996 j 208,250 306,531
332
of other banks
745
3,038
1,264
347,400 Notes checks, and discounted
Bills,
119,599
354,798
936,903 1,381,189 2,287,124
Treasury bills
258,395
3,079
22,485
2,322
5,443
Advances on collateral
96,012
12,227
19,932
8,086
254,326 Securities
53,582
64,790
186,622
51,173
Sundry assets
86,627
885,250 1,717,1
2,358,130 3.200,546
Total
3,789,422
LIABILITIES.

35,223
35,223
35,223
35,223
Capital
8,292
8,292
8,206
Surplus incl. special reserves..
4,853
4,211
309
Dividends unpaid
2,897
33,562
77,848
34,075
Government deposits
436,223
111,038 515,687 407,970
Other deposits
1,102,715 1,927,306 2,568,801 3,219,012
Bank notes in circulation
82,922
87,165
61,694
Sundry liabilities
1,397,033

3,145,224 3,789,422

1 No data available as at end of 1914. Incomplete data for Dec. 10,
1914, taken from the annual report of the bank for 1914.
2 Advances on securities only.




Dec. 31,
1913.

57,900

LIABILITIES.

Total

[From the Deutcher Reichsanzeiger No. 3, 1915, and No. 4, 1917.]

42,840
42,840
42,840
Capital paid in
I 42,840
20,342
19,171
17,726
Surplus...
! 16,671
Notes in circulation
617,240 1,200,924 1,646,465 1,917,007
Other liabilities payable on
561,445 1,086,281
418,144
188,763
demand
134,076
38,348
88,209
19,736
Sundry liabilities
Total

885,250 1,717,982 2,358,130 3,200,546

INDEX.
rag0

Page.

-

Acceptance.?, distribution of, by sizes, maturities.
etc
*
222-224
Amendments to Federal Reserve Act:
Comparative Senate and House bills
177-187
Senate and House reports
188-192
Bank of France, agency with
175
Branch agency at Memphis, experience with
168-171
Business conditions throughout the Federal Reserve
districts
202-219
Charts:
Reserves held in vault and with Federal Reserve Banks
232
Gold holdings
233
Clearing and collection:
Operation of system
171
At Boston, Mass
162-164
Commercial failures in January
167
Commercial paper, discount of
220
Deposits, withdrawals of, by foreign depositors
154
Discount operations of the Federal Reserve Banks.. 220
Discount rates in effect
231
Earnings on investments of Federal Reserve Banks. 230
Federal Reserve Agents' fund, summary of transac176
tions
Federal Reserve Banks, investments held
153
Federal Reserve Bulletin, bound copies of
158
Federal Reserve note account of agents and banks.. 228
Federal Reserve note issues
155
Federal Reserve system, letter of a Texas banker
regarding operation cr
159
Fiduciary powers granted
167
Foreign banks, statement showing condition of
234
Foreign exchange problems
156
Gold imports, increase of
153
Gold imports and exports, statement showing
229
Gold settlement fund
175,176
Harding, Hon. W. P. G., message of, to North Carolina business men, bankers, etc
159-3 61




Informal rulings of the board:
Purchase of nonnegotiable warrants
193
Acceptances
193
Purchase of warrants in excess of 25 per cent
limit
194
Use of note emblem
194
Insurance agents, regulations under which national
banks may act as
164-166
Law department:
Discount of paper secured by United States
bonds or notes
197
Branch banks
198
Transfer of Federal Reserve Bank stock
199
Bills of exchange drawn against actually existing values
195-197
Drafts payable with interest
200
National banks:
Acting as insurance and real estate agents,'regulations governing..."
164-166
Charters granted to
167
Real estate agents, regulations under which national
banks may act as
164-166
Report, annual, of Comptroller of the Currency,
synopsis of
172-174
Reserve conditions
154
Resources and liaoilitios of Federal reserve banks. 226, 227
Review of the month
153-157
State banks admitted to system
158
Statements for the press:
Message of Hon. W. P. G. Harding to North
Carolina business men, bankers, etc
159-161
Compilation of national bank returns by office of
Comptroller of the Currency
161
Trade acceptance situation
157
United States bonds:
Conversions of, statement showing
224
Loans based upon, memorandum of board regarding
158

O