Full text of Federal Reserve Bulletin : May 1917
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FEDERAL RESERVE BULLETIN ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON MAY, 1917 WASHINGTON GOVERNMENT POINTING OFFICE 2917 FEDERAL RESERVE BOARD. EX OPFICIO MEMBERS. w ., n \**K ™ WILLIAM G. MCADOO, ^ . -.7 W. P. G. HARDING, Governor. PAUL M. WARBURG, Vice Governor. _^ _ ' FREDERIC A. DELANO. m Secretary of the Treasury, Chairman. JOHN SKELTON WILLIAMS, | Comptroller of the Currency. . _. ADOLPH C C H A R U S S _ _ H . PARKER WILLIS, Secretary. SHERMAN ALLEN, Assistant Secretary and Fiscal Agent. M. C. ELLIOTT. Counsel. SUBSCRIPTION PRICE OF BULLETIN. The Federal Reserve Bulletin is distributed without; charge to member banks of the system and to the officers and directors of Federal Reserve Banks. In sending the Bulletin to others the Board feels that a subscription should be required. It has accordingly fixed a subscription price of $2 per annum. Single copies will be sold at 20 cents. Foreign postage should be added when it will be required. Remittances should be made to the Federal Reserve Board. Member banks desiring to have the Bulletin supplied to their officers and directors may have it sent to not less than 10 names at a subscription price of $1 per annum. No complete sets of the Bulletin for 1915 are available. Bound copies of the Bulletin for 1916 may be had at $5 per copy. TABLE OF CONTENTS. Pago. Review of the month War financing Text of the war-bond act Conference of governors of Federal Reserve Banks Forms of Federal .Reserve drafts Foreign war loans Growth of the acceptance business German war loans Substitution of collateral 335 340 • 345 347 347 349 350 350 351 a National banks and the war Gold-settlement fund Operation, of the clearing system Experience of State banks in the Federal Reserve System Press statements issued by the Comptroller of the Currency New national-bank charters Payment for national-bank examinations Commercial failures throughout the United States The progress of inflation (reprinted from the London Economist) Informal rulings of the Federal Reserve Board Law department " Business conditions throughout the Federal Reserve districts Foreign exchange rates in belligerent, neutral, and silver-standard countries Charts showing 'Discount operations of the Federal Reserve Banks Acceptances Resources and liabilities of Federal Reserve Banks Federal Reserve note accounts of Federal Reserve Banks and agents Earnings on investments of Federal Reserve Banks Discount rates in effect Gold imports and exports IV ; 351 353 354 355 372 374 374 374 375 378 380 382 404 406 407 412 416 418 420 421 422 FEDERAL RESERVE BULLETIN VOL. 3 MAY l, 1917. No. 5 It remains true, however, that the weak point in the financial preparaThe action of Congress on April 6 in forie tion of the COUP.try is the fact mnllv declaring the existence that the Federal Reserve Sys^Preparation for o f ft ^ ^ ()f ^ Gcrmany tem includes up to date less than 50 banks other found the Federal .Reserve Systhan those in the national system, arid that it tem with little in the way of preparation still therefore, comprises hanking capital and surto be accomplished. As set forth, in previous plus equal in the aggregate only to about onenumbers of the Federal Reserve Bulletin, prehalf of the total of the country at large. In cautions had. already been taken, in view of the this situation it has been well understood that evident disturbance of international conditions, should stringency or banking difficulties set \n to insure the maintenance of the Federal lieat any time it would be necessary for the banks serve Bonks m a highly liquid state. Notwithof the Federal Reserve System indirectly, even standing that they were already strong- in gold though not directly, to ''carry" the State banks and lawful money, they had been early in the by the extension of assistance to member brinks, year urged to curtail the aggregate amounts which in their turn would aid. the less well proof the investments they were carrying, so tected State institutions., This condition has that the total earning assets at the beginning been fully recognized by many intelligent and of the war had been, reduced, to $167,994,000 public-spirited State bankers, who have adfrom S221,898,000 at the beginning of the- year. mitted the obligation resting upon them of Dining the first quarter of 1.917 large orders for lending their support to the establishment of a Federal Reserve notes were placed with the universal plan of cooperation inclusive of pracBureau, of Engraving and Printing, and the tically all of the eligible banks of the coimtiy. notes when prepared were shipped to the SuhOn April 10 the executive committee of the treasurios and. Mints throughout the country I trust company section of the American Bankso that they would be readily available in the j ers' Association, at a meeting in Now York, event of need. The declaration, of war, thereadopted the following resolution: fore, found the financial system of the United States, so far as the holding of its reserve funds Resolved, That this committee urgently recommend to are concerned, in strong position. No now the trust- companies of the United States that immediate policies or precautions wore therefore called for. stops be taken to secure amendments, where necessary, to the State laws in order that the trust- companies may be The condition of the member banks as reported. permitted to carry their gold reserves on deposit with the by the Comptroller of the Currency is strong Federal Reserve Banks in their several districts, and that generally throughout the country. For these as soon as such action can be legally taken the trust comreasons, among others, the actual announce- panies offer to deposit, these reserves with, the Federal ment of the entry of the United States into the Reserve Banks. war has produced no real disturbance on the The delay on the part of some in indicating a part of the -financial community, and none, so desire to enter the system has been in a raeasule far as can be perceived, among the. members of I due to the belief that some changes desired by the Federal Reserve Svstom. i them in the Federal Reserve Act would uu* 335 REVIEW OF THE MONTH. 336 FEDERAL RESERVE BULLETIN. doubtedly be made at an early date, and also in a measure to the feeling that conditions throughout the country were generally sound, and that they might, without prejudice to the welfare of the community, postpone the date when they would apply for admission. But such conditions are, or at least may be, fundamentally altered by war, and there has been within, the past month a very decided impetus among the stronger State banks toward obtaining membership in the Federal Reserve System. Among those which have applied for and actually been granted membership during the month are: The Peoples Bank, of St. PaulMinn.; The Cleveland Trust Co., of Cleveland Ohio; The St. Louis Union Bank of St. Louis, Mo.; The Farmers State Bank, of Kasson, Minn. A number of other leading State institutions have informed the Board of their intention to apply for membership within a short time, waiting only for the completion of certain necessary formalities. It would seem, therefore, that the early extension of the Federal Reserve System, to include a considerable proportion of the largest and best-conducted State institutions in the country, is a foregone conclusion. This result, when attained, will insure the combination of the country's resources of reserve money under joint management and consequently their use in the most economical and effective way in sustaining the industrial and commercial interests as well as the public finances of the Nation during the conflict upon which it has entered. With a view to securing the enactment of legislation that would render P ° s s i b I e t h e consolidation of the banking resources of the country in the most effective form, the Board has again transmitted to Congress the amendments to the Federal Reserve Act which it recommended at the regular session of last winter. These amendments have already been taken up by the Banking and Currency Committees of the two Houses, and are included in the list of necessary legislation whose enact- MAY 1. 1917. ment is to be undertaken during the present special session. The amendments follow the same general lines as when last recommended to Congress, but there has been added to them a provision designed to incorporate into law the essential features of the Board's already existing regulations with reference to the membership of State banks in the Federal Reserve System. This, if adopted, will give to prospective members substantially the same privileges already enjoyed by member State banks, but will furnish the greater assurance of freedom from change that is afforded by the fact that the conditions of membership have been formally embodied in a Federal statute. Included among the amendments, as before, is a provision authorizing State banks and trust companies to maintain funds on deposit with Federal Reserve Banks, without becoming full members, and to derive certain corresponding benefits from the operation of the system. The Board has so often expressed its opinion with reference to the whole body of amendments thus offered, and has so frequently set forth their essential features, that it is not necessary at this time to review the basic ideas presented by them, except to note that the emergency conditions of financial strain, against which the amendments were intended to guard, are now directly facing the country. It is not too late to adopt the remedies which have already been indicated as a mode of protection against dangers arising from such sources. In continuation of the policy already instiInvestments of t u t e d > investment operations the banks during of the Federal Reserve Banks Apri! * d u r i n g t h e last week of March a n d t h e first t h r e e weeks in April, as gauged b y c o m p a r a t i v e figures of e a r n i n g assets for March; 30 and April 20, indicate b u t m o d e r a t e activity of t h e b a n k s in t h e discount and acceptance fields and practical suspension of i n v e s t m e n t s in municipal w a r r a n t s . Increases are shown in t h e holdings of Gove r n m e n t securities following t h e t a k i n g over b y t h e F e d e r a l Reserve B a n k s of $50,000,000 of MAY 1, 1917. FEDERAL RESERVE BULLETIN. 337 90-day 2 per cent United States certificates of and financial machinery of the country in indebtedness about the end of March and the order to make the loan an immediate success allotment to the banks, about the same date, and to draw off the proceeds without embarof $10,877,500 of 2 per cent bonds offered for rassing commercial and industrial interests will sale by member banks through the Treasury be required. Department. The result of these operations The Secretary of the Treasury, in a public was to restore the Federal Reserve Banks to the statement April 21, described the policy to be general investment level they had reached pursued as to these funds, as follows: before the policy of reduction of outstanding j "The Secretary appreciates the desirability lines already sketched was adopted. j of avoiding any derangement of the money market, and in the financial operations in Net Net which the Government is about to engage it Mar. 30. '• Apr. 20. Federal Reserve Bank. increase. decrease. will be his purpose to adjust receipts and disBoston $17,314,000 1816,674,000 I .1640,000 bursements in such a way that as far as possible New York 19,781,000 1 16,780,000 3,001,000 Philadelphia 12,204,000 11,293,000 911,000 money paid in will be promptly returned to the Cleveland 6,7(53,000 7,378,000 $615,000 10,130,000 12,411,000 2,281,000 ! Richmond market. The contemplated sale of Treasury 5,707,000 4,690,000 Atlanta 1,017,000 9,469,000 6,496,000 Chicago Should | 2,973,000 certificates is in line with this policy. 5,473,000 4,328,000 St. Louis 1,145,000 5,128,000 10,100,000 4*972,"666"j. the banks during the next few weeks absorb Minneapolis 2,863,000 1,911,000 Kansas City "952," 666 several hundred million dollars of these certifi3,084,000 3,256,000 Dallas 172,000 !. 6,663,000 7,345,000 San Francisco 682,000 j . cates, the proceeds being paid out in the course Total bills 104,579,000 102,662,000 1,917,000 of business, the brinks will possess ready means Total municipal warrants | 552,000 15,715,000 15,163,000 with which to meet withdrawals made later by Total United States bonds, Treasury notes, depositors in paying for bond subscriptions. and certificates of in47,700,000 109,575,000 61,875,000 \. debtedness.. The result of this method will be a gradual Total investments anticipation of payment on account of bonds 167,994,000 ;227,400,000 59,406,000 held with a steady and continuous return to the The adoption by Congress of a bill author- banks of the moneys paid in." The Federal Reserve Banks as holders of the izing the raising of $7,000,000,Treasury fi- 000 for the conduct of the war liquid cash resources of the Nation can, of nances. with Germany is an unprece- course, be expected to be actual subscribers to dented financial event, provid- the bonds only in a very small measure, and ing, as it does, for one of the largest, and in some it is the view of the Federal Reserve Board aspects the largest, of public-lending operations that the member banks should themselves act during modern times. In its immediate effect chiefly as distributors. A Treasury loan of $50,000,000 in short-term the act is also of very great interest to the banks of the country, and especially to the Federal Re- Short-term certifi- certificates (payable June 30) bearing interest at the rate of serve Banks. The conditions upon which the cates. 2 per cent per annum, was new bonds will be offered to the public have i not been decided, the measure adopted by j offered by the Secretary of the Treasury to Congress leaving to the discretion of the Sec- Federal Reserve Banks on March 31, and retary of the Treasury the determination of was entirely taken up by the reserve banks all of the details of this matter. Whether upon the same day upon which it was offered. the new bonds be issued in larger or smaller These subscriptions were in general distributed installments, however, it is generally agreed j roughly, according to the capitalization of rethat the use of all of the available banking serve banks, and were made with a view of holding 838 FEDERAL EESEKVE BULLETIN. MAY I, 1JM7. the funds until the maturity of this short-period ba: kh g fur:ds. The harks of the country by loan. The proceeds were in part used to meet absorbing these certificates in advance of the the obligation of the United States for the issue of the war loans will possess themselves of ready means with which to meet withdrawals purchase of the Danish West Indies and in i made by depositors for the purpose of paying ! part to meet the current needs of the Treasury, for bond subscriptions and they will thereby the loans being thus practically in anticipation i assist in. an effective manner in paving the way ;; of the income tax, due at the close of the cur- for the successful flotation of our war ioai s. rent fiscal year. Subsequent to the passage Clearing-house reports received from New by both Houses of the general bond bill proYork City indicate reductions viding for the financial conduct of the war, Changes in re- j n r e s e r T e s a s the result of loan although prior to the final ratification of the serves. . work of the conference committee, another expansion and loss oi casn ocsum of $200,000,000 was offered to the banks twoen the weeks ending March. 17 and 31, when of the country at 3 per cent. At the request of reserve percentages for the 60 banks, which the Secretary of the Treasury, this loan was compose the membership of the New York offered through the Federal Reserve Banks, Clearing House Association, declined from acting as distributors, and was by them placed 23.7 to 21.5. A slight improvement in the with the member banks all over the country, reserve situation of these banks is shown for the response being prompt and satisfactory, the week ending April 7, since when, the reserve especially in Now York. Many subscriptions percentages have again moved, downward, in excess of the amount asked were received. reaching 21.9 per cent on April 21, or four It was announced that the certificates issued points above the low level touched on the last representing this loan would be acceptable in of March. Smaller declines are shown by the part payment of subscriptions to the war State Banking Department for the trust combonds, whose sale is expected to be announced panies and. State banks in Greater New York. within a comparatively short time. It is interesting to note in this connection that The Board's policy in regard, to this operation the two weeks ending March 30 and April 6 was set forth by Governor Harding in a letter witnessed heavy importations of gold into this to Federal Reserve Banks, dated April 20, in country, most of which was directed to New which he said in part: York City. Average excess reserves of the Boston Clear''ID view of the large issues of United States bonds which will be offered in the near future ing House banks declined, from 840,293,000 for and which it is hoped will be subscribed for to the week ending March 17, to $37,940,000 for a great extent by investors, large and small, the week ending March 24, but showed increases whose funds arc now on deposit in banks, the Board regards an investment by banks in for the following weeks. Figures for the week United States Treasury certificates of indebt- ending April 21 are 847,646,000, a gain for the edness having a short maturity and which are week of over 7.3 millions. receivable in payment of subscriptions to Similar figures for the 34 national banks and United States bonds, as a highly desirable trust companies composing the Philadelphia investment for them. The Secretary of the Treasury has announced his intention, in the Clearing House Association show but little in arcial operations in. which the Government change during March, but considerable gains is about to ergage, to adjust receipts arid dis- for the first two weeks in April, the reported bursements in such a way that as far as pos- excess reserves of the clearing-house banks for sible money paid in. will be promptly returned the week ending April 14 being $37,061,000. to the market and the Federal Reserve Banks may be counted upon by offerirg liberal terms The report for the week ending April 21 indiof rediscount-ing to do their utmost in counter- cates some reduction in the reserves of the acting any effect of temporary dislocation of Philadelphia national banks, the combined excess reserves of all the clearing-house insti- FEDERAL MAY 1, 191.7. RESERVE'BULLETIN. 339 tutions standing now at $31,186,000, compared past year, and the reduction of surplus stocks with $30,186,000, the average for the week to a point which leaves the country practically dependent upon the current output for ending March 24. For the four weeks ending April 13, the total support. That this shortage will bo in some Gold imports and n e t i n w a r d £ o l d movement was measure overcome or offset by organized acexports. $61,330,000, gold imports, tivities which have been undertaken with a chiefly from Canada, amount- view to maintaining supplies of grain and ing to $82,071,000 and gold exports to $20,- other agricultural products is to be hoped, 741,000. The increase in the country's stock but the facts already developed make it clear of gold through net gold imports since August 1 f that no such result can be achieved without earnest and persistent effort, while general 1914, is shown0in the following exhibit: curtailment of unnecessary consumption must Gold imports and exports of the United States from Aug. 1, occur if the supplies of food are to be made 1914, to Apr. 13, 1917. sufficient for both local and foreign necessifOOO's omitted.] ties. In short, the country is in tho unusual I i Excess im- position of being unprecedentedly strong in a I Imports. Exports. | ports over banking and financial way, and abnormally I exports. 1 active industrially, at the same time that it ! 823,253 8104, 972 o -$81,719 faces most unusual problems in * supplying Aug. 1 to Dec. 31, 1914 451,955 Jan. 1 to Dec. 31,1915. 420,529 31, 420 i 085,745 Jan. 1 to Dec. 31, 1916 793 ! 529,952 itself with food and other necessary articles. 330,112 Jan. 1 to Apr. 13, 1917 598 ! 258,514 This is in many respects a reversal of condi! Total 1,491,0G5 303,789 I 1,127,276 tions that have existed in former periods of a Excess of exports over imports. stress. The upward course of prices, already The reports on general business conditions, very marked, has now become a primary sympfurnished to the Board by Fed- tom of the general conditions that are to be General busi- era ]_ Reserve Agents in the sev- faced during the coming months. In another to iiess conditions. column we reproduce an article from the Lonera! districts, are corroborated don Economist, which traces the experience of by other evidence from various quarters and Great Britain since the outbreak of the present show that, despite the fact that the country war in this connection, and may serve to indihas entered upon a war status, there has been cate some of the dangers which the United little or no disturbance of underlying condi- States is called upon to avoid at the present tions. The probability .that war would be time. begun had, in fact, been largely discounted in advance, and not only the financial but the in- An important extension of the Federal Reserve System has been deterdustrial preparation of the country was such as m " ^ d upon by the Federal to render the effect of the declaration far less Reserve Bank of San Franimportant than would have been true under 1 cisco, which with the approval of the Board, ordinary conditions. With the heavy foreign • has voted to establish three branches in the demand for American goods, sustained as it is ; Pacific Northwest, one at Seattle, one at now to be by the credit of the United States, | Portland, and one at Spokane, Wash. The the condition of high prices and urgent call for practically every article that the country i branch at the last-named place will probably is capable of manufacturing is assured. The be the first to be opened, the others to follow outstanding feature of the situation is seen in as rapidly as possible and to be established the unusual and extreme shortage of food ; upon the same conditions as that at Spokane. products, due to the large exportation of the: The Board has been advised that the State i 93720—17 2 340 FEDERAL RESERVE BULLETIN. banks in Spokane will immediately apply for membership in the Federal Reserve System as a condition precedent to the establishment of a branch at that point. For some time past it has been evident that, owing to the great distances included in the Twelfth Federal Reserve District, the creation of branches or agencies at various points would probably be necessary in order to afford to the member banks throughout the district immediate access to the facilities of the Federal Reserve System. This need was emphasized during the slight banking disturbance which occurred in Seattle some weeks ago when there was an immediate call for Federal Reserve notes for the use of the member banks at that point. The new branches will not only afford immediate access to the discount facilities of the system, but will also greatly tend to facilitate the 'prompt collection of checks. This whole question of branches in the Pacific Northwest was carefully considered by the Federal Reserve Bank of San Francisco late in March, when Mr. A. C. Miller, member of the Federal Reserve Board, visited the bank, and hearings were held at which Portland, Seattle, and Spokane bankers appeared and presented argument covering all phases of the situation. The details of the plan for the organization and management of the branches will be worked out as soon ais possible and will then be made known. Meantime the Board has been giving careful consideratiin to the question of branches in other districts where member banks have indicated a strong desire for the extension of facilities in this way. In every such case the problem to be met is whether a full fledged branch organized under the provisions of the Act, involving the expense which necessarily goes with such an organization, is called for or whether a more simply organized agency will meet the requirements of the situation. The answer to this question depends in each instance upon the character and volume of business developing at the point to be served and the support to be expected from the bankers of the community to be served by the branch. MAY 1,19.17. The Federal Advisory Council met in Washington on April 16 and 17, havin S advanced its meeting about a month in order to consider pending financial and banking problems. The session was devoted largely to consideration of questions relating to Government loans, the Board's proposed amendments to the Federal Reserve Act, and kindred matters. Indorsement was given to the amendments to the act proposed by the Board with one or two minor modifications, thus in part altering the position assumed .by the Council in December, 1916. The Council assured the Board that every effort would be made to render aid in carrying into effect the plans for meeting the necessities of the Government in the financing now in prospect, and the general interchange of views indicated that banking conditions the country over were excellent. It was stated that ven^ small withdrawals in some parts of the country had occurred, due to uncertainty or doubt on the part of foreign depositors with reference to the safety and freedom from disturbance of their deposited funds. These fears have been in large measure allayed, and there have been no manifestations of general suspicion or anxiety with reference to the condition of affairs. The meeting was attended by all members of the Advisory Council except the chairman, Mr. Forgan, who was detained in the South in consequence of illness. War Financing. War financing of record magnitude has been authorized for the United States during the latter part of April. Without a dissenting vote in either House of Congress authority has been given for the issue by the Secretary of the Treasury of $7,000,000,000 in war bonds and shorter term certificates of indebtedness. The figures of this initial authorization dwarf the early war financing of European countries. Anticipating an agreement by the two Houses of Congress over the details of the bill authorizing bonds and certificates of indebtedness to be issued, the Secretary of the Treas- MA* 1, 1017. FEDERAL RESERVE BULLETIN. 341 bonds subsequently acquired by the Federal Reserve Banks into bonds paying a higher rate of interest. The Board no doubt will ultimately ask for such an amendment. From the best information obtainable it is unlikely that Congress will at this session pass any legislation except that coming within the classification of war measures. It is fully understood that unless such an amendment is obtained Federal Reserve Banks will not be disposed to purchase 2 per cent bonds and to offer them for conversion into 3 per cent bonds and notes, and the Board would not require such purchase if the 3 per cent bonds are below par and a conversion could not be made without a loss to the Federal Reserve Banks. Before determining whether an effort should be made at this time to obtain the desired amendment, or whether this action should be POSITION OF OUTSTANDING BONDS. deferred until Congress reconvenes in DecemFederal Reserve Banks are holders of a con- ber, the Board will be glad to have the views of the governors on the following questions: siderable amount of 2 per cent United States (1) Will the probable demands for currency consols and 3 per cent 30-year bonds and 1- during the period of the war make it advisable year certificates of indebtedness. Considcra" to discourage curtailment of national-banktion was given by the Federal Reserve Board note circulation by discontinuing all conversion to the position of these bonds in view of the of 2 per cent bonds having the circulating privifor bonds or notes without the circulating proposed new issue at an interest rate of 3J lege privilege ? In other words, is it probable that per cent. Upon the question whether au- Federal Reserve notes can be issued in sufficient thority for the conversion of the above-named volume to take care of current needs, or will it securities into 3 | per cent bonds should be probably be necessary for Federal Reserve requested of Congress in an amendment to the Banks to use any 2 per cent bonds acquired as a basis of issue for Federal Reserve Bank war-bond legislation, the Federal Reserve notes in order to supplement circulation Board sent out the following letter: outstanding ? (2) x^ssuming that there will be no redunTelegrams have been received from a majordancy of circulation if retirement of nationality of the governors of the Federal Reserve Banks calling attention to the fact that the bank notes is not encouraged, would it not be bill which recently passed the House authoriz- advisable to defer any effort to obtain an ing the United States to issue and sell 3.| per amendment to section 18, which might have cent bonds, contains no prevision for the con- a tendency to encourage the conversion of version of the 3 per cent bonds held.by the bonds having the circulating privilege for bonds without this privilege ? several Federal Reserve Banks. The Board has already given consideration ; The Secretary of the Treasury has made no to this matter, realizing that the issuance of \ announcement of his position in this matter. $5,000,000,000 worth of 3J per cent bonds FIRST OFFERING OF CERTIFICATES. would naturally have a tendency to depreciate j the market value of the 3 per cent bonds held ! Below is given the announcement of the by the Federal Reserve Banks. The amount i Secretary of the Treasury, given to the press now held by such banks, namely, about 1 on April 20, stating his purpose to make the $7,000,000, is, however, relatively small and the Board is undecided whether it would be justi- :1 first offering of certificates of indebtedness fied at this time in asking for an amendment under the war loan act of $200,000,000: to section 18 authorizing the conversion of the | Secretary McAdoo stated to-day that as soon 3 per cent bonds now held and the 2 per cent i as the war loan bill becomes a law he intends ury on April 20 announced that as soon as the bill became law he would sell $200,000,000 of certificates of indebtedness to meet the requirements of the Treasury and the war situation, pending the sale of Government bondsIn this connection it was stated that the offering of bonds would probably require about 60 days. After testing the sentiment as to the interest rate at which the certificates should be issued, 3 per cent was determined upon and the amount increased to $250,000,000. These certificates are payable on June 30. Subscriptions for this $250,000,000 were obtained in a remarkably short time through the agency of the 12 Federal Reserve Banks. 34 FEDERAL RESERVE BULLETIN. MAY 1, 1917. to sell such amounts of Treasury certificates of DUTY OF RESERVE BANKS. indebtedness as may be necessary to meet the On the day the above statement was issued requirements of the Treasury and the war situaGovernor Harding sent to Federal Reserve tion pending the sale of Government bonds. It will probably require about 60 days to Banks the following letter: make a public offering of bonds. Meanwhile Your attention is directed to a statement certificates of indebtedness maturing June 30, issued to the press this afternoon by the Secand receivable with accrued interest, in pay- retary of the Treasury. In view of the large ment of subscriptions for bonds, will be sold. issues of United State; bonds which will be The Secretary appreciates the desirability of offered in the near future and which it is hoped avoiding any derangement of the money mar- will be subscribed for to a great extent by inket, and in the financial operations in which the vestors, large and small, v/hose funds are now Government is about to engage it will be his on deposit in banks, the Board regards an purpose to adjust receipts and disbursements investment by banks in United States Treasury in such a way that as far as possible money paid certificates of indebtedness having a short in will be promptly returned to the market. maturity and which are receivable in payment The contemplated sale of Treasury certificates of subscriptions to United States bonds, as a is in line with this policy. Should the banks highly desirable investment for them. The during the next few weeks absorb several hun- Secretary of the Treasury has announced his dred million dollars of these certificates, the intention, in the financial operations in which proceeds being paid out in the course of busi- the Government is about to engage, to adjust ness, the banks will possess ready means with receipts and disbursements in such a way that which to meet withdrawals made later by de- as far as possible money paid in will be positors in paying for bond subscriptions. The promptly returned to the market and the result of this method will be a gradual antici- Federal Reserve Banks may be counted upon pation of payment on account of bonds with a by offering liberal terms of rediscounting to do steady and continuous return to the banks of their utmost in counteracting any effect of the moneys paid in. temporary dislocation of banking funds. The The Secretary sounded the market yesterday banks of the country by absorbing these certifiwith respect to temporary borrowings and met cates in advance of the issue of the war loans, with a very satisfactory response on the part of will possess themselves of ready means with important banks and bankers in financial cen- which to meet withdrawals made by depositors ters, especially in New York City. TheSecretary for the purpose of paying for bond subscripwas assured that reasonable immediate re- tions and they will thereby assist in an effective quirements could be met by a sale of certifi- manner in paving the way for the successful cates bearing as low a rate as 2\ per cent in- flotation of our war loans. terest, but that there would be no doubt about The Board does not doubt that you will the sale of the largest amount of such debt cer- impress upon the banks of your district, both tificates and that a wide market for the same national and State, the importance of this could be created if they were offered at 3 per offer, and that you will enlist their hearty cent interest. cooperation in this plan of preparing the field The Secretary feels that in order to carry out and preparing themselves. the policy above outlined, temporary borrow- This press statement wasjggued on April 21: ing ought to be done on a basis that will enable The Federal Reserve Board to-day telegraphed banks generally throughout the country— State banks and trust companies as well as all Federal Reserve Banks that payments for member banks of the Federal Reserve Sys- the new issue of certificates of indebtedness tem—to have a thoroughly liquid asset in their under the war financing act, subscriptions for vaults and at the same time to be able to avail which have been taken by Federal Reserve themselves of the opportunity of preparing for Banks, will probably be called for by the Secrethe large bond issue. Therefore, as soon as the tary of the Treasury April 25 or 26. Remitwar loan bill becomes a law, the Secretary pur- tances will be made by subscribers to theFederal poses to authorize Federal Reserve Banks to Reserve Banks of their districts and placed to receive applications for Treasury certificates of the credit of the Treasurer of the United States. indebtedness, payable June 30 next, and bearEXISTING INDEBTEDNESS. _ _ I ing interest at the rate of 3 per cent per annum. The Treasury Statement of March 31, 1917, The first offering of such certiiLutes will probably be $200,000,000. showed the interest-bearing debt of the United MAY 1, 19.17. 348 FEDERAL RESERVE BULLETIN. States to be §1,023,357,250. This included the $50,000,000 in certificates of indebtedness issued as of April 1, but does not include the $200,000,000, announcement of the intention to issue which was made on April 20. There is authority under legislation existing prior to the passage of the war financing law for the issue of $495,569,000 in bonds and $320,000,000 in certificates of indebt- edness. This does not include the authorization to issue bonds or notes to maintain the gold reserve or for the i-sue of postal savings bonds. Below is given a table showing the authorization, rate, and amounts of the bonds and certificates of indebtedness which make up the present interest-bearing debt of the United States: Interest-bearing debt, payable on or after specified future dates. [Treasury statement of Mar. 31,1917.] Title of loan. Authorizing act- Consols of 1930 Loan of 1908-1918 Loan of 1925 Panama Canal loan: Series 1906 Rate. I When ! issued. 2 per cent. 3 per cent. 4 per cent. i Mar. 14,1900 June 13,1898 ' Jan. 14,1875 Conversion bonds '\ One-year Treasury notes Certificates of indebtedness June 28.1902; Dec. 21, 2 per cent. 1906 1905. ' 1908 ...do do i Aug. 5, 1909; Feb. 4, ' 3 per cent. 1911 i. 1910; Mar. 2,1911. 1916-17 Dec. 23,1913 ...do : do Mar. 3,1917 Postal savings bonds (1st to 11th : J u n e 25,1910 series). i Postal savings bonds 1917-1937 (12th i : series). do ite of interest-bearing Amount issued. 1900 . Payable after Apr. 1,1930 |i $(>4G, 250,150 after Aug. 1,1908... '198,792,660 1898 ./Redeemable ;\Payable Aug. 1,1918 ; 1895-96 Payable after Feb. 1,1925... '162,315,400 : Series 1908 Scries 1911 When redeemable or payable. : . Outstanding j Mar. 31,1917. ! i/Redeemable after Aug. 1,1910...\\ 4 -,4 (m Q™ ! : \Payable Aug. 1,1936 \) ° ' b6i>9viv) ;! /Redeemable after Nov. 1,1918... i\ * on ftfVI AA,, M uw ^Payable Nov. 1,1938 if * '"^ i Payable June 1,1961 j 50,000,000 §000,288,850 03,945,400 113,489,900 49,817,480 20,178,000 50,000,000 Payable 30 years from date of 25,057,200 ; 25,057,200 issue. 1916-17 I Payable 1 year from date of issue. 23,540,000 "•.23,540,000 ...do 1917 !: Payable June 29, 1917 , .50,000,000: 50,000,000 2 per cent. .(Redeemable after 1 year from ' . I date of issue 9,151,800 ; 9,151,800 2\ per cent 1911-16 |iI Payable 20 years from date of I issue. i/Redeemable after Jan. 1,1918.... \ ftfi7 ; 2\ per cent! IQI7 191 887 ' ;\Payable Jan. 1,1937. j/ ' : ; i i 11,250,027,150 1,023,357,250 1 Of this amount §21,266,300 have been, con verted into conversion bonds and 818,695,000 into one-year Treasury notes. 2 Of this original amount issued $132,449,900 have been refunded into the 2 per cent consols of 1930, and $2,390,800 have been purchased for t h e sinking fund and canceled, and S500 have otherwise been purchased and canceled. s Of this original amount issued 343,825,500 have been purchased for the sinking fund and canceled. * Of this original amount issued 81,886,500 have been converted into conversion bonds and $2,928,000 i n t o one-year Treasury notes. o Of this original amount issue* §1,904,400 have been converted into conversion bonds and £1,917,000 into one-year Treasury notes. There is presented below a list of the existSUBSCRIPTIONS IN 1898. ing legislation, exclusive of the War Loan Act, For subscriptions to the $200,000,000 war under which the Government of the United bond issue of 1898, 31 days were allowed. In States may issue bonds and certificates. this period the Treasury Department received Amount subscriptions numbering 320,226 for $1,500,Issued. ! Rat< authorized. 000,000. It is interesting, in view of the P. ct. 1. Panama ("anal bonds, act Aug. 5,1909.!| 3 S295,569,000 S5o,ooo,ooo authorized issue of war bonds, of which it is 2. Panama Canal bonds, issue for nitrate 3 120,000,000 None. I anticipated that individuals will take a good plant, act oi" June 3, 1916 3. Panama Canal bonds, issue for nier- >. None. I part, to note the number of subscribers for chant marine, act of Aug. 5, 1909... 3 | 150,000,000 4. For extraordinary expenditures, rev- i small amounts to the loan of 1898, as shown | enue act Mar. 3, 1917 (Mexican ex- ' penditures, armor-plate plant, . ! by the table given below: Alaskan raihyay, purchase of Dan- • ish West Indies, etc.) i 5. Expediting naval construction, act * of Mar. 3. 1917 (i. Certificates of indebtedness, act of • Mar. 3,1917 '•• 7. Certificates of indebtedness, act June . 2.-, 1910. I 1 3 j 100,000,000 None. 3 i 130,000.000 None. I o ! 300,000,000 o j 50.000,000 20,000,000 Included in 1. Legislation authorizing the issue of bonds or notes to maintain the gold reserve and parity, and lor issue <if post.;;; savings bonds, is not included in the abovn list. Subscriptions: For less than $100. $100 to $180.. $200 to $280 ! $300 to $380 §400 to $480 S500 only ' 11,483 14,974 9,902 : 7, 594 7, 698 180, 573 344 Subscriptions—Continued, $520 to $980 $1,000 to $1,980 $2,000 to $2,980 $3,000 to $3,980 $4,000 to $4,400 $4,500 only More than $4,500 FEDERAL BESEKVE BULLETIN. MAY 1, 1917. notes of 1864 and 1865, which were payable in lawful money, contained any statement as to the kind of money in which they should be paid. The bonds of 1898 are redeemable after August 1, 1908, and payable August 1, 1918. The first bonds payable specifically in United States gold coin were the 2 per cent Total 320,226 consols of 1930, the act providing for which : was approved by the President on March 14, Individual purchases of the loan of 1898 1900. The amount of the issue was $646,250,were not confined to ai>y section of the coun150. Of this issue there have been converted try. The subscriptions for $500 or less numby Federal Reserve Banks $24,648,100 into 3 bered 232,224. These were accompanied by per cent 30-year conversion bonds, and $21,full payment, the total of subscriptions of $500 878,000 into 3 per cent one-year Treasury or less being $100,444,560. notes. A considerable part of these conEvery opportunity was given for subscrip- verted bonds and notes has been sold. The tion to this issue by individuals. News- bonds thus converted were purchased by papers were supplied with information rela- Federal Reserve Banks either in the open martive to the bonds, and with few exceptions ket or through offerings made by member their aid was given without charge. In addi- banks of the system through the Treasurer tion, circulars and forms for subscription of the United States under section 18 of the were supplied to the 22,000 money order post act. The total of 2 per cent consols thus reoffices, to express offices, and to banks. | tired is $46,526,100. Small subscribers were given the preference, and those who had asked for as much as $4,500 ! BOND HOLDING OF FEDERAL RESERVE BANKS. received only a prorated award, on a basis of $1,300 each. The bonds were dated August 1, ! The United States bond holding of Federal 1898; and delivery to smaller subscribers was | Reserve Banks on March 31, 1917, was as completed about September 1. Delivery to the ! follows: larger subscribers continued for some time after that date, receipts of the proceeds for this loan j Amount of United States bonds, certificates indebtedness and notes without circulaextending to April 1, 1899, although the bulk of I! oftion privilege: subscriptions was fully paid within the first four | 3 per cent of 1961 $900 months. Of the total amount, nearly $125,3 per cent conversion 3, 634, 300 3 per cent 1-year notes 20,567,000 000,000 was remitted by means of checks on l 2 per cent certificates of indebtedness... 48,000,000 banks in all parts of the country. Of the reTotal 72,202, 200 mainder, paid in cash into the offices of the Treasury more than one-third was in tenders Amounts of United States bonds with circula. of gold, although no preference for one kind tion privilege: 2 per cent 20.049,910 of money over another was made. 3 per cent 7,491,740 The bonds bore interest at 3 per cent and 4 per cent 5,168,450 to the time of their issue the Government had Total 32,710,100 never put out bonds payable by their terms, either principal or interest, in gold coin or in Grand total 104,912, 300 silver coin. None of the civil war bonds ex182,000,000 of United States certificates of indebtedness entered on cept certificates of temporary loan and the books Apr. 2, 1917. 11,862 25,152 10, 349 5,165 5, 223 1,875 28,376 i MAY 1, 1917. FEDERAL EESERVE BULLETIN. 345 governments, the Secretary of the Treasury, with the approval of the President, is hereby For purposes of reference there is herewith authorized, on behalf of the United States, to reprinted the text of the act signed by the purchase, at par, from, such foreign governPresident on April 24, intended to provide ments then engaged in war with the enemies the United States, their obligations hereafter for an issue of bonds for the various expenses of issued, bearing the same rate of interest and connected with the present state of war. containing in their essentials the same terms and conditions as those of the United States An Act To authorize an issue of bonds to meet expenditures issued under authority of this act: to enter for the national security and defense, and for the purpose of assisting in the prosecution of the war, to extend into such arrangements as may be necessary or credit to foreign governments, and for other purposes. desirable for establishing such credits and for purchasing such obligations of foreign governBe it enacted by the Senate and House of Rep- ments and for the subsequent payment thereof resentatives of the United States of America in before maturity, but such arrangements shall Congress assembled, That the Secretary of theprovide that if any of the bonds of the United Treasury, with the approval of the President, States issued and used for the purchase of such is hereby authorized to borrow, from time to foreign obligations shall thereafter be contime, on the credit of the United States for the verted into other bonds of the United States purposes of this Act, and to meet expenditures bearing a higher rate of interest than three and authorized for the national security and de- one-half per centum per annum under the profense and other public purposes authorized by visions of section five of this act, then and in law not exceeding in the aggregate $5,000,- that event the obligations of such foreign gov000,000, exclusive of the sums authorized by ernments held by the United States shall be, section four of this Act, and to issue therefor by such foreign governments, converted in bonds of the United States. like manner and extent into obligations bearThe bonds herein authorized shall be in ing the same rate of interest as the bonds of such form and subject to such terms and con- the United States issued under the provisions ditions of issue, conversion, redemption, ma- of section five of this act. For the purposes turities, payment, and rate and time of pay- of this section there is appropriated, out of ment of interest, not exceeding three and one- any money in the Treasury not otherwise aphalf per centum per annum, as the Secretary propriated, the sum of $3,000,000,000, or so of the Treasury may prescribe. The principal much thereof as may be necessary: Provided, and interest thereof shall be payable in United That the authority granted by this section to States gold coin of the present standard of value the Secretary of the Treasury to purchase and shall be exempt, both as to principal and bonds from foreign governments, as aforesaid, interest, from all taxation, except estate or shall cease upon the termination of the war inheritance taxes, imposed by authority of the between the United States and the Imperial United States, or its possessions, or by any German Government. State or local taxing authority; but such bonds SEC. 3. That the Secretary of the Treasury, shall not bear the circulation privilege. under such terms and conditions as he may preThe bonds herein authorized shall first be scribe, is hereby authorized to receive on or beoffered at not less than par as a popular loan, fore maturity payment for any obligations of under such regulations prescribed by the Secre- such foreign governments purchased on behalf tary of the Treasury as will give all citizens of of the United States, and to sell at not less the United States an equal opportunity to than the purchase price any of such obligations participate therein; and any portion of the and to apply the proceeds thereof, and any bonds so offered and not subscribed for may payments made by foreign governments on acbe otherwise disposed of at not less than par count of their said obligations to the redempby the Secretary of the Treasury; but no com- tion or purchase at not more than par and acmissions shall be allowed or pjaia on any bonds crued interest of any bonds of the United States issued under authority of this act. issued under authority of this act; and if such SEC. 2. That for the purpose of more effect- bonds are not available for this purpose the ually providing for the national security and Secretary of the Treasury shall redeem or purdefense and prosecuting the war by establish- chase any other outstanding interest-bearing ing credits in the United States for foreign obligations of the United States which may at WAR BOND ACT. 346 FEDERAL UJiSEBVE BULLETIN. MAY 1, 1917. such time be subject to call or which may be Secretary of the Treasmy may prescribe, be purchased at not more than par and accrued convertible into bonds bearing a higher rate interest. of interest than the rate at which the same SEC. 4. That the Secretary of the Treasury, were issued if any subsequent series of bonds in his discretion, is hereby authorized to issue shall be issued at a higher rate of interest the bonds not already issued heretofore au- ! before the termination of the war between the thorized by section thirty-nine of the act ap- I United States and the Imperial German Govproved August fifth, nineteen hundred and ernment, the date of such termination to be nine, entitled "An act to provide revenue, fixed by a proclamation of the President of the equalize duties, and encourage the industries United States. of the United States, and for other purposes77; SEC. 6. That in addition to the bonds ausection one hundred and twenty-four of the thorized b\^ sections one and four of this act, act approved June third, nineteen hundred and the Secretary of the Treasury is authorized to sixteen, entitled "An act for making further borrow from time to time, on the credit of and more effectual provision for the national the United States, for the purposes of this act defense, and for other purposes'7; section thir- and to meet public expenditures authorized by teen of the act of September seventh, nineteen law, such sum or sums as, in his judgment, hundred and sixteen, entitled "An act to es- may be necessary, and to issue therefor certablish a United States shipping board for the tificates of indebtedness at not less than par purpose of encouraging, developing, and cre- in such form and subject to such terms and ating a naval auxiliary and a naval reserve and conditions and at such rate of interest, not a merchant marine to meet the requirements exceeding three and one-half per centum per of the commerce of the United States with its annum, as he may prescribe; and each certifiTerritories and possessions and with foreign cate so issued shall be payable, with the countries, to regulate carriers by water engaged interest accrued thereon, at such time, not in the foreign and interstate commerce of the exceeding one year from the date of its issue, United States, and for other purposes77; section as the Secretary of the Treasury may prescribe. four hundred of the act approved March third, Certificates of indebtedness herein authorized nineteen hundred and seventeen, entitled "An shall not bear the circulation privilege, and the act to provide increased revenue to defray the sum of such certificates outstanding shall at expenses of the increased appropriations for no time exceed in the aggregate $2,000,000,000, the Army and Navy and the extensions of forti- and such certificates shall be exempt, both as fications, and for other purposes77; and the pub- to principal and interest, from all taxation, lic resolution approved March fourth, nineteen except estate or inheritance taxes, imposed by hundred and seventeen, entitled " Joint resolu- authority of the United States, or its possestion to expedite the delivery of materials, sions, or by smy State or local taxing authority. equipment, and munitions and to secure more SEC. 7. That the Secretary of the Treasury, expeditious construction of ships,77 in the in his discretion, is hereby authorized to demanner and under the terms and conditions posit in such banks and trust companies as he prescribed in section one of this act. may designate the proceeds or any part thereof That the Secretary of the Treasury is hereby arising from the sale of the bonds and certifiauthorized to borrow on the credit of the cates of indebtedness authorized by this act, United States from time to time, in addition or the bonds previously authorized as described to the sum authorized in section one of this in section four of this act, and such deposits act, such additional amount, not exceeding may bear such rate of interest and be subject to $63,945,460, as may be necessary to redeem such terms and conditions as the Secretary of the three per cent loan of nineteen hundred the Treasury may prescribe: Provided, That and eight to nineteen hundred and eighteen, the amount so deposited shall not in any case maturing August first, nineteen hundred and exceed the amount withdrawn from any such eighteen, and to issue therefor bonds of the bank or trust company and invested in such United States in the manner and under the bonds or certificates of indebtedness plus the terms and conditions prescribed in section one amount so invested by such bank or trust company, and such deposits shall be secured in the of this act. SEC. 5. That any series of bonds issued under manner required for other deposits by section authority of sections one and four of this act fifty-one hundred and fifty-three, Revised may, under such terms and conditions as the Statutes, and amendments thereto: Provided MAY 1, 1917. FEDERAL RESERVE BULLETIN. further, That the provisions of section fifty-one hundred and ninety-one of the Kevised Statutes, as amended by the Federal Reserve Act and the amendments thereof; with reference to the reserves required to be kept by national banking associations and other member banks of the Federal Reserve System, shall not apply to deposits of public moneys by the United States in designated depositaries. SEC. 8. That in order to pay all necessary expenses, including rent, connected with any operations under this act, a sum not exceeding one-tenth of one per centum of the amount of bonds and one-tenth of one per centum ol the amount of certificates of indebtedness herein authorized is hereby appropriated, or as much thereof as may be necessary, out of any money in the Treasury not otherwise appropriated, to be expended as the Secretary of the Treasury may direct: Provided, That, in addition to the reports now required by law, the Secretary of the Treasury shall, on the first Monday in December, nineteen hundred and seventeen, and annually thereafter, transmit to the Congress a detailed statement of all expenditures under this act. Conference of Governors. 347 eminent; reports of reserves by member banks; real-estate loans; Federal Reserve Bank drafts; Federal reserve district numbers on checks; establishment of collection department by Federal Reserve Banks; transit time schedules and domestic exchanges; establishment of branches and agencies; problems of collection and clearances; proposed amendments to Federal Reserve Act; abrasion of gold; direct redemption of unfit Federal Reserve notes; joint custody of funds held by Federal Reserve agents; purchase of acceptances; enlistment by Federal Reserve Bank employees in military forces of the United States; surety bonds held by Federal Reserve Banks; abstracts of clearing house figures and trade acceptances. The conference adjourned subject to call of the chairman without definite time or place being fixed for next meeting. State Banks Admitted. The following State banks have been admitted to membership in the Federal Reserve System during the month of April, 1917: Cleveland Trust Co., Cleveland, Ohio; St. Louis Union Bank, St. Louis, Mo.; Farmers State Bank, Kasson, Minn.; Peoples Bank, St. Paul, Minn. The tenth conference of the governors of the Federal Reserve Banks was held at the Shoreham Hotel, April 4 to 6, inclusive. There were present: Governor A. L. Aiken, of Boston, chairman; Governor Seay, of Richmond; Governor Rhoads, of Philadelphia; Governor Wold, of Minneapolis; Governor McCord, of Atlanta; Federal Reserve Drafts. Governor Van Zandt, of Dallas; Governor Forms of special drafts on Federal Reserve Fancher, of Cleveland; Governor McDougal, of Chicago; Deputy Governor Treman, of New Banks have been prepared and sent with the York; Deputy Governor Calkins, of San Fran- necessary suggestions as to their use to the 12 Federal Reserve Banks. Use of these drafts cisco; and Mr. J. F. Curtis, secretary. The Federal Reserve Banks of St. Louis and will begin on May 21. They are the result of Kansas City were the only banks not repre- careful study of the question of transfers by the Board and the banks. sented. Drafts drawn by member banks on their own The governors held several conferences with the Federal Reserve Board during the course Federal Reserve Bank immediately available at par at any Federal Reserve Bank but actually of their meeting. Among the subjects discussed were: Delays payable only at the Federal Reserve Bank on in the mails; direct interdistrict routing of which drawn are, for the present, limited to items; disposition of Government bonds; Fed- sums not exceeding $250. Transfer drafts eral Reserve Banks as fiscal agents of the Gov- | payable on advice at any Federal Reserve 93720—17 3 348 FEDERAL RESERVE BULLETIN. Bank specified are limited to sums in excess of $250. Advice to the drawee Federal Reserve Bank by the member bank is required in either case. Extracts from the instructions issued to Federal Reserve Banks under date of April 24 are given below: FEDERAL RESERVE DRAFTS. There shall be two special forms of drafts on each Federal Reserve Bank which will be available for immediate credit at other Federal Reserve Banks. The privilege of drawing these drafts shall be extended to all member banks complying with the regulations to be formulated by their Federal Reserve Banks. The drawing of these drafts shall not interfere with member banks drawing the ordinary checks on their Federal Reserve Banks. The special drafts provided for in this circular must be drawn on forms approved by the Federal Reserve Bank of which the drawing bank is a member. The forms are to be similar to the specimens embodied herewith. Any Federal Reserve Bank may, if in the judgment of its officers it becomes necessary, make a reasonable charge against member banks drawing these drafts for the purpose of effecting transfers of funds, such charge not to exceed the rate for transfers prevailing at the time the drafts are drawn. All of these drafts shall be immediately charged to the drawing member bank's account on receipt of advice by the drawee Federal Reserve Bank. Specimen forms of advice are inclosed with this circular. The two kinds of drafts shall be known as "Federal Reserve Exchange77 and "Federal Reserve Transfer" drafts. FEDERAL RESERVE EXCHANGE DRAFT. The "Federal Reserve Exchange" drafts shall be the draft drawn by a member bank upon its own Federal Reserve Bank and made receivable for immediate availability at par at any Federal Reserve Bank, but actually payable only at the drawee Federal Reserve Bank. They shall, for the present and until otherwise provided, be drawn for amounts not in excess of $250. MAY 1, 1917. The drawing bank shall be required to give advice by mai] to its Federal Reserve Bank of the total amount of drafts drawn each day. These drafts on a Federal Reserve Bank when received for immediate availability by another shall be listed in a special letter and forwarded to the drawee Federal Reserve Bank for credit. If the total of the letter justifies there can be an advice by wire and entries made on the day the letter goes forward. FEDERAL RESERVE TRANSFER DRAFT. The "Federal Reserve Transfer" draft shall be the draft drawn by a member bank upon its own Federal Reserve Bank and made payable on advice of the drawee at any Federal Reserve Bank specified in the draft. They shall, for the present, be drawn for amounts in excess of $250. The drawing bank shall be required to give advice by mail to its Federal Reserve Bank of the numbers, amounts, and total made payable at each Federal Reserve Bank of drafts drawn each day. This advice shall be under an authorized signature and a duplicate shall be forwarded to the Federal Reserve Bank at which the drafts are made payable, the duplicate advice to contain the signature in ink of officers signing the drafts. The drawee Federal Reserve Bank shall, upon receipt of advice from the drawing member bank, telegraph the Federal Reserve Bank at which the drafts were made payable, confirming the advice * * *. Under existing regulations governing the gold settlement fund any Federal Reserve Bank can at any time obtain a settlement on a net balance c(ue from another Federal Reserve Bank. This plan shall become operative on the 21st day of May, 1917. [Inclosures.] FIRST NATIONAL BANK. WACO, TEX., To Federal Reserve Bank of Dallas. GENTLEMEN: We have this day drawn checks on Federal Reserve Exchange form, the total amount of which is $ dollars. Charge our account to cover. R. P. DUPEEE, Cashier. FEDERAL RESERVE MAY 1, 10.17. 349 BULLETIN. FIRST NATIONAL, .RANK. ! WACO, T E X . , . . . To Federal Reserve Bank of Dallas. \i\ We have this day drawn checks on Federal Reserve Transfer form as • listed below, payable on advice from you at the Federal Reserve Bank j u No 48-1 ! FIRST NATIONAL BANK. WA co, TEXAS, Pay to the order of 55 Dollars. of To Federal Reserve Ban!: of Dallas 32-8 Number. f Amount. Number. Amount. Cashier. The Federal Reserve Hank of. will pay this check upon advice of drawee- | Foreign War Loans. i Total.... | Charge our account with total and arrange for payment. Respectfully, FIRST NATIONAL BANK. Cashier. WACO, T E X . , . . . I The following condensed statement showing I approximate amounts of war loans raised by I the principal belligerent countries since August | 1, 1914, has been compiled by the division of \ statistics of the Federal Reserve Board in anI swer to inquiries on the subject: To Federal Reserve Bank of | United Kingdom (Mar. 31, 1917) We have this day drawn checks on Federal Reserve Transfer form as F r a n c e F listed below7payable by you on advice the Federal Reserve Bank ( <*>- 28 > 1 9 1 7 ) isted bel d i ffrom th d l R Bk ! of Dallas. * Germany (Dec. 31, 1916) Number. Number. Amount. Amount. Russia (Dec. 31, 1916) Italy (Dec. 31, 1916) Austria (Dec. 31, 1916) Hungary (Dec. 31, 1916) Total 1 l 1 518, 805,000,000 2 10, 500, 000, 000 11,226,000,000 7,896,000,000 3 2, 520,000,000 4 5,880,000,000 1, 730,000,000 « 53,113,000,000 I Figures for the United Kingdom are apparently exclusive of $704,| 120.000 of currency notes issued by the Government and secured to the i extent of 19.7 per cent by gold. ; 2 Subscriptions to the sixth German war loan have recently been comi pleted. This loan is reported to have yielded over 3 billions of dollars, i i In addition to the funded debt, the Government at the end of February y i Total.... ; 1917, had outstanding over 80 million dollars of Treasury notes, about 800 i i million dollars of war loan bank notes, and an unknown amount of (Signature in ink and title of officers signing any of the checks above I T r c a s u r y t,m s listed') 3 Includes 154 millions of treasury notes secured to the extent of 12.8 per cent by a metallic reserve held in the Government treasury. * A considerable proportion of the loans of the Austrian Government was obtained in the shape of temporary advances from the Austro(Form of draft.) Hungarian Bank at nominal rates of interest. The amount thus obtained is given on page 330 of the April Federal Reserve Bulletin as 48-1 No $1,304,250,000. FIRST NATIONAL BANK. 6 The total includes the advances made by the United Kingdom and WACO, TEXAS, . France to the smaller belligerent countries allied with them. No figures Pay to the order of. are available showing the additional amounts received through domestic loans by the Governments of the smaller countries, such as Roumania, Dollars. Servia, and Belgium on the one hand and Turkey and Bulgaria on the To Federal Reserve Bank oj Dallas 82-3 other. Figures shown for Germany and Austria are apparently exclusive of the advances made to Turkey and Bulgaria, regarding which Cashier. no official information has been published. Neither do these figures include the considerable amounts raised through loans by the British Any Federal Reserve Bank will receive this check for immedominions and colonies: e. g., Canada, Australia, New Zealand, South diate availability at par. Africa, and British India. i 850 FEDEKAL EESEKVE B U L L E T I N . Growth of the Bank Acceptance Business. MAY 1, 1917. ning of March, 1917, are as follows (in thousands of dollars): In continuation of similar figures shown on page 590 of the October Bulletin, there are preNov. 17,1916. Dec. 27,1916. Mar 5,1917. sented below data indicating to some extent the national banks 100,342 98,231 101,485 growth of the bank acceptance business in the All Old Colony Trust Co., Boston 2,685 6,162 5,443 United States since November, 1916. It is seen Other trust companies in Boston 1,063 that while the reported acceptance liabilities State 0) 0) banks and trust com3,308 3,330 3,973 of the national banks have grown but little panies in Maryland between November, 1916, and March, 1917, Trust companies in Greater Nov. 29,1916. Dec. SO, 1916. Feb .28,1917. 78,631 95,480 those of the trust companies and State banks New York 79,400 State banks in Greater New 4,773 in Greater New York have increased over 20 York 6,546 2,095 Trust companies in State of per cent during the same period. It should be New York 136 486 State banks in State of New l noted, however, in this connection that figures York 22 12 () of acceptance liabilities of national banks for 187,786 191,972 213,845 Total. November and December in some cases are i No data. inclusive of amounts of the reporting banks7 The totals just given are exclusive of data own acceptances held as investments by the accepting institutions, while March, 1917, fig-for the larger private banking firms and Ameriures are exclusive of such amounts. On can branches or agencies of foreign banks, March 5, the national banks in New York City which make no reports of their acceptance held over 30 million of their own acceptances, liabilities either to State or Federal authorities. while like holdings of New York City trust The Federal Reserve Banks report aggregate companies and State banks at the. end of holdings of bills accepted by private bankers as February amounted to about 8 million dollars 13.8 millions about November 20, 1916, and as The volume of outstanding acceptances re- 20.5 millions about March 5, 1917. Estimates ported by the latter is slightly larger than the of the amounts of outstanding bills accepted by volume shown for all national banks in the jprivate banking firms vary between 30 and 50 latest report of the Comptroller of the Cur- j millions, while a recent estimate of the New rency. ; York Commercial gives the amount of bills accepted by American branches and agencies Acceptance liabilities of national banks in principal cities of j of foreign banks as about 20 million dollars. the United States at specified dates. j A certain amount should also be added for ac[In thousands of dollars; i. e., 000's omitted.] ceptances of trust companies and State banks outside of Boston, New York and Maryland. I Nov. 17, Dec. 27, Mar. 5, 1916. ! 1916. 1917. No definite information was obtainable regarding acceptance operations of nonmember banks 53,116 50,720 New York j 55,312 18,407 21,835 other than those shown in the above table. It Boston | 15,263 8,309 8,640 8,849 Philadelphia. 520 482 463 is probable, however, that the total acceptance Baltimore 3,411 4,101 1,962 New Orleans 1,250 1,224 1,300 liabilities of all banks and bankers in the United Charleston, S. C. 2,356 1,859 1,480 Chicago 2,401 ! 695 4,272 States exceed at present 300 million dollars. Minneapolis 3,738 ! 3,696 2,869 San Francisco... Allother Total 6,959 ! 98,231 6,834 ! 100,342 7,735 101,485 German War Loans. In continuation of similar figures on page 14 Available data regarding acceptance liabilities of American banking institutions about the of the January, 1917, Bulletin there are shown end of the calendar year 1916 and the begin- below the classified number of subscribers and MAT FEDEEAL RESERVE BULLETIN. 1, 1917. 351 amounts subscribed to the fourth and fifth , The Board understands that it has been the German war loans issued in March and Sep- Ipractice hitherto for Federal Reserve Banks to deposit gold or lawful money with the Federal tember-October, 1916. j Reserve Agents, or to make substitutions of The total number of subscribers to the fifth other paper with him, for commercial paper loan was 27.9 per cent less than the number of iheld as security for Federal Reserve notes subscribers to the fourth loan, while the aggre- j about 10 days in advance of maturity, in order gate of subscriptions received is practically ; that the banks may have possession of the for the purpose of collection. This the same. | paper process impairs the note issuing capacity of the A comparison of the classified subscription | banks, and as counsel is of the opinion that a data for the two loans discloses the interesting I Federal Reserve Agent may designate as his fact that any increases in the subscription \ collecting agent the Federal Reserve Bank from figures of the fifth loan are limited entirely to jwhich he has received notes and bills as collateral security for Federal Reserve notes, the the higher groups. From the table below it •Board has ruled that henceforth Federal Remay be seen that the number of large sub- serve Banks need not make substitutions of scribers to the fifth loan (i. e., with subscrip- paper or deposits of gold or lawful money with tions of 100,000 marks and over) increased 16 the Federal Reserve Agent until the actual due per cent and the amount of large subscriptions date of the paper originally pledged to secure notes. 23 per cent. On the other hand the number The Federal Reserve Agents are therefore of smaller subscribers (with subscriptions of authorized to turn over maturing notes and less than 100,000 marks) shows a decrease of bills to their respective Federal Reserve Banks 28 per cent and the aggregate of their sub- for collection upon the execution by the bank of a receipt reciting the fact that the notes and scriptions a decrease of 19.5 per cent. bills are taken for collection only, settlement to be made with the Federal Reserve Agent in Total gold or lawful money on the dates the notes and subNumber of sub- In- amount In- bills fall due unless other eligible paper has been scribed (in scribers. crease millions of creas substituted already for the maturing paper. (+)or marks). (+)or Size of subscriptions. dede- Such notes or bills should be indorsed to the crease crease Federal Reserve Bank "for collection for ac1 Fourth Fifth Fourth Fifth loan. count of the Federal Reserve Agent," or a rider loan. loan, j loan. may be attached to them showing that they 1" P.ct. . ct. are delivered to the Federal Reserve Bank for 1-200 marks 2,406,118 1,794,084 - 2 5 . 4 201 154 - 2 3 . 4 967,929 681,027 - 2 9 . 6 407 200-500 marks 293 - 2 8 . 1 collection, in order that any banks used by the 794 885,491 605,494 - 3 1 . 6 552 500-1,000 marks 30.5 Federal Reserve Bank in making the collection 792 467,724 301,869 - 3 5 . 5 1,000-2,000 marks 520 - 3 3 . 4 347,725 245,873 - 2 9 . 3 1,247 2,000-5,000 marks 911 —27.0 may be on notice. 5,000-10,000 m a r k s . . . . 10,000-20,000 m a r k s . . . 20,000-50,000 m a r k s . . . 50,000-100,000 marks.. 100,000-500,000 marks.. 500,000-1,000,000 marks Over 1,000,000 m a r k s . . Total. 113,927 42,158 30,361 9,100 6,308 780 574 93,189 40,571 28,500 9,748 7,870 1,032 725 -18.2 - 3.8 — 6.1 + 7.1 + 24.8 +32.4 +20.4 907 666 980 734 1,531 041 1,812 763 - 1 5 . 9 651 - 2.3 982 810 +io."4 1,710 + 11.7 853 1+33.1 2,448 +35.1 5,279,645 3,809,976 - 2 7 . 9 10,712 i 10,647 | - .6 Substitution of Collateral. For the assistance of Federal Reserve Agents in making substitions of paper or deposits of gold or lawful money when the original pledge is collectible, the Federal Reserve Board on April 12 sent out the following letter providing for substitution of securities: National Banks and the War. National banks of the United States are taking an important part in the various activities incident to the entry of the United States into the war. Much literature furthering various plans has been issued by banks and by banking associations. Most of the circulars are unusual in their appeal and indicate an admirable patriotic spirit. As indicating the general line of matter which is being sent out, there is reprinted below a copy of a letter issued by the 352 FEDERAL RESERVE BULLETIN. MAY .1, 11)17. Ohio Bankers7 Association on April 10 to its I employees who go into active service; we can | provide for those dependent upon such emmembers: ployees while they are in the service, and we To the ever-present question, "What can we I can agree to continue to help if they fail to bankers do to help?" one of the officers of our come back. We can make it plain to every association attending the last meeting of our customer who comes to our desks that when council of administration offered an answer we must refuse accommodation it will be, first which seemed so much to the point that the of all, to thoste who attach more importance to council requested that it be reduced to writing their own private interests than they do to tbof'se of their country. and mailed to all members. It follows: First of all we can face the facts. Without We can preach economy in time and otit; waiting for unpleasant events to focus our at- we can practice economy of the most rigid kind tention and possibly bring us vain regrets, we both at home and in the bank; we can concan look the situation squarely in the face and stantly remind ourselves and others that wastes know it for what it is. This war is our war. of every kind increase the burdens of all; that It is not just anybody's war. It is the war of every hour of time, every stroke of labor, every every American citizen. War means sacrifice dollar of money that" can be saved helps some and hardship, and our war means our sacrifice one some way, and that extravagance, always and our hardship. From this time on there a vice, has now become almost an act of are to be but three kinds of people in this treason. country—those who bear the burdens; those Between the frenzied hysteria which, miswho would but can not; those who can but taking itself for high patriotism, spends itself would not. And of these three the last will be in vocalizing the superlatives of our language, disloyal citizens; disloyal ones of whom the and the wilful indifference which, parading in most disloyal will be those who add to the the solemn garb of 'common sense, denies the crime of evading burdens that of seeking to seriousness of our crisis, there is a sound attitake a money toll from the travail of the tude of mind which means readiness to underoccasion. stand, willingness to sacrifice, and promptness Next, we can run our banks with an eye to do. This attitude it can bo our privilege to single to safety and public service. We can take and unswervingly maintain. forget for the time that "we are in business And lastly, we can be vigilant in our watch to make money." We can remember that | for opportunities to serve in new ways. Of there is a fiscal as well as a physical firing line, ; all men we should be among the first to know and that if most of us are too old or too infirm | opportunity at sight, to seize it boldly, and to fight, substantially all of us can render im- to act upon it promptly. portant service in the civil legion. We can Then, having done all of these things, and request authority from our directors to go to having done them cheerfully and with the most the limit of safety in extending preferential cordial good will, we can remember that what credit to governments and to all others en- i we have done is as nothing compared with gaged in activities that directly affect the issue. j what those who go into active service have We can hold places open for any and all of our I shown themselves ready to do. MAY 353 FEDERAL RESERVE BULLETIN", 1. 1917. The figures below cover the period between the settlements of March 22 and April 19. Holdings of gold by Federal Ecserve Banks They show obligations settled amounting to and Federal Reserve Agents in the gold settle- $1,186,772,000 by means of the weekly settlement fund of the Federal Reserve Board ment, and $28,122,500 by means of transfers reached the sum of $355,040,000 on April 19. between the banks during the week. Changes This amount exceeded figures previously pub- Iin ownership in the fund amounted to 4.37 per lished in the Bulletin by §30,440,000. This j cent of the total obligations settled. Chicago, maximum was accompanied by a settlement j Cleveland, Philadelphia, and Boston show the on April 19, amounting to $338,894,000. It j largest increases. was the heaviest settlement made, the largest | of clearings and transfers, Federal Reserve Banks, previous settlement having been on March 22, | Amount from Mar. 23, 1917, to Apr 19, 1917, inclusive. when the transactions liquidated amounted to [000 omitted.] $297,765,000. Balances j TransTotal Payment was made to the Treasury Depart- j clearings. adjusted. | fers. ment through the gold settlement fund on \ of— March 31, for 2 per cent bonds purchased by j Settlement Mar. 29, 1917 S294,766 §13,359 86,800 12,080 259,606 Apr. 5, 1917 300 member banks under section 18, amounting to 293,506 23,904 Apr. 12, 1917 1,622 338,894 18,772 19,400.5 $10,884,090.15. In addition there was depos- | Apr. 19, 1917 68,115 28,122.5 Total 1,186,772 ited on the same date for two Federal Reserve j 3,221,868 182,871 70,482 Banks $1,732,000, covering 3 per cent 1-year Previously reported for 1917. 4,408,640 Total since Jan. 1,1917 250,986 98,604.5 certificates of indebtedness which had been j Total transfers Jan. 1,1917, to date . 98,604.5 Total for 1916, including transfers... 5,633,966 sold by the banks, payment of which had to be j Total for 1915, including transfers.. 1,052,649 provided for through the Treasurer of the j Total clearings and transfers May 20,1915, to Apr. 19,1917. 11,193,859.5 United States. I GOLD SETTLEMENT FUND. Changes in ownership of gold. [000 omitted.] ! J Total changes from Total to Mar. 22,1917. !1 From Mar. 23, 1917, to Apr. 19,1917, inclusive.1 : May 20, 1915, to | Apr. 19,1917.2 ...._ j Federal Reserve Bank of— Decrease. Boston New York.... Philadelphia.. Cleveland Richmond Atlanta Chicago St. Louis Minneapolis.. Kansas City.. Dallas. San Francisco. Total.- Balance to credit, Mar. 22,1917, Balance, plus net Apr. 19, Increase. deposits of 1917. gold since that date. S34,785 3358,759 358,7f>9 74,631 32,607 21,785 21,891 21,310 5,880 9,521 52,675 31,935 51,739 358,759 813,957 71,219 11,042 18,742 17,203 3,625 24,928 2,936 5,148 22,807.5 7,353.5 8,269 $20,552 21,992 18,071 30,753 15,325 5,631 41, 752 5,973 6,351 25,258 5,345 10,227 207,230 207,230 Decrease. Increase. ! Decrease. Increase. §6,595 G 997 7,029 12,011 1,878 .1 2,008.5 |. 53,113.5 $407,986 2,006 10,824 3,037 1,203 2,450.5 1,958 53.113.5 407,986 Changes in ownership of gold daring period Mar. 20, 1917, to Apr. 19, 1917, equal 4.37 per cent of obligations settled. Total changes in ownership of gold since May 20,1915, equal 3.64 per cent of total obligations settled. $41,380 81,660 44,618 19,907 23,897 38,134 8,917 10,724 55,125.5 29,926.5 53,697 407,986 854 M A Y 1, 19.1.7. FEDERAL RESERVE BULLETIN. Gold settlement fund—Summary of transactions from Mar. 23, 1917. to Apr. 19, 1917, inclusive. [000 omitted.] Federal Reserve Bank of— Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco : Total Weeklv settlements from Mar. 23,1917. to Apr. 19, Apr. 19, 1917. 1917, balance in j fund at Total | Total not I close of rwiit | Total net I Total Credit, j d e b i t s dobits credits. ! credits. •; business. Gold. Balance Iaststatej ment, Mar. WithDepos22,1917. drawn. : ited. ' 821,015 i 20,241 I 17,441 j 26,017 17,085 ! 4,431 i 43,870 i 4.240 ; 8,6 -11 •• 26,152.5 ! 7,567.5 j 14,509 $7,058 ; 4, 022 6.699 ' 7,375 : 1.712 . L566 . 18,942 '•• 1,584 ; 3,493 3,345 564 6.500 i ! 211,270 62,860 S3,757 31,527 1,586 485 666 1,177 18,918 3.425 '693 1,349 1,833 $103,633 306,646 177,742 80,022 72,008 38,239 160.301 99;903 23.420 69.766 29,039 26; 053 5,115 ' 1,186,772 i | 820,552 21.992 18', 071 30.753 15,325 5,631 41,752 5,973 6,351 25,258 5,345 10,227 ! j ! I 1,186,772 : 68,115 I 207,230 Federal Reserve Agents1 fund—Summary of transactions, Mar. 23, 1917, to Apr. 19, 1917, inclusive. [000 omitted.] ! Balance Federal Reserve Agent at— Philadelphia Cleveland Richmond Atlanta.... Chicago.... St. Louis.. Balance i! WithDedrawn. posited. Apr. 19, |; 1917.. $15,890 ! S900 4,000 9', 000 1,900 13,420 1,450 20,290 7S0 6', 050 $5,600 \ $20,590 9.500 5.500 i SilOO 1,000 I 1,060 j 13,030 17.480 j 37,770 6,270 1.000 ! i Balance to credit Mar. 22, 1917. Federal Reserve Agent at— Minneapolis Kansas City Dallas San Francisco ! I I ! Total S3,130 17,660 8', 880 15.010 j 113,330 Operations of the Federal Reserve clearing system, Mar. 16 to Apr. 15, 1917. Total (exclusive of Items drawn items drawn on Treasurer of Treasurer of United on United States MemStates) (daily (daily average). ber average). bank's in district. NumNumNumNumNum.-1 Amount. ber. ber. Amount. ber. Amount. ber. Amount. bcr. j Amount. drawn on Items drawn on Items in district banks in Federal banks outside Federal reserve city reserve city (daily average). (daily average). Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 1,947 156,715,272 32,963 3,554 Jl8,031.017 23.844 10,566 I 9,272; 452 17,526 960 2,035,347 14,289 1,027 2.078,065 13,263 1.021 783,322 9,806 4,699 8.261.217 12.692 1,486 4,281,367 8; 524 2,166 3', 759,821 10,734 1,960 3,021,787 9,727 1,036 1,096,666 10,481 740 951,609 4,758 Items drawn on banks in other districts (daily average). S3,556,484 2,570 5,178,543 15,560 2,141.881 6,479 5.902.736 1,083 3,520', 200 1,539 1,691,239 1,599 2,579,641 1,469 1,656,781 175 '815,900 573 1.672,610 560 3;158,095 322 762; 849 79 $4,083,393 8,184,337 7,203,515 1,095,993 2,513,869 1,431,303 4.889,274 I', 545.007 597,932 2,584,646 509.154 25,119 Total: Mar. 16 to Apr. 15,1917 31,162 60,288,002 168,607,32,666,959 32,008 34,693,542 Feb. 16 to Mar. 15,1917... Jan. 16 to Feb. 15,1917.... Dec. 16,1916, to Jan. 15,1917. Nov. 16 to Dec. 15,1916... Oct. 16 to Nov. 15,1916... Sept. 16 to Oct. 15,1916... Aug. 16 to Sept. 15.1916 Julv 16 to Aug. 15,1916... 37,480 14,355,149 42,958 31,393,897 34,571 18,617,848 16,332 9,034,076 15,829 8,142,134 12,426 3,905,864 18,860 15,730,132 10,185 7,483,155 13,473 5,203,653 12,247 7,279,043 11,839 4,763,915 5,577 1,739,637 231,777 234,475 220,421 241,933 236,038 227,489 204,891 177,397 133,113 Nonmember banks from which checks arc collected at par. 1,107 $111,600 5,266 1,712,348 673 85,343 248 23,429 176 20.190 175 21,937 2.901 275, 743 1, 171,329 255 £ l 21,257 382 48.281 7,980 12 143.961 215 393 625 632 753 519 382 1,046 468 721 940 622 524 248 424 242 505 271 397 1,611 851 1,035 1,395 339 1,289 127,648,503 12,582 2,643,408 116,404,430 110,188,028 121.814; 589 125,603,732 115,061.224 • 97,666,107 I 78,559.704 I 59.301,696 i 7,625 7,630 7,630 7,622 7,627 7,623 7,618 7,618 7,624 8,607 8,007 8,086 8,130 8,065 8,059 7.459 7,449 7,032 MAY 1,1917. FEDERAL SESEBVE BULLETIN. 355 Experience of State Banks in Federal Reserve ! [No. 1. Bankers Loan & Trust Co., Sioux City, Iowa.] System. Question 2. What advantages have you In order to ascertain more exactly how the ! found from your membership in it ? We find that the public have confidence in the system Federal Reserve System was likely to affect |i and feel that banks who are members and the interests of State banks, questions were ' under Federal supervision are being managed some time ago transmitted by a private in- ! safely. This is quite an asset to a bank and quirer, who wrote of his own motion without | especially to a new institution. knowledge of the Federal Reserve Board, to all ; Question. 3. What disadvantages have you | found from your membership in it ? There is a State banks which had been granted member- loss of interest on the balance carried with 'the ship in the Federal Reserve System, as follows: Federal Reserve Bank. The examination fees 1. What was the fundamental reason which and extra published statements; and the question of dividends on your stock. impelled you to join the system ? Question 4. Have you found your charter 2. What advantages have you found from powers in any way hampered or curtailed by your membership in it ? your membership? Our State laws permit 3. What disadvantages have you found from banking institutions to make/ loans equal to membership in it ? 20 per cent of their capital and surplus. The 4. Have you found your charter powers in Federal Reserve Banks permit but 10 per cent, any way hampered or curtailed by your mem- which is the same as required of national banks by Federal statute. bership ? Question 5. Have you found that member5. Have you found that the membership ship gives you any new powers which your gives you any new powers which your charter charter or State laws did not confer upon you or State laws did not confer upon you before? before? No; our State laws are quite liberal. Question 6. .Have you found that the regu6. Have you found that the regulations of lations the Federal Reserve Board have the Federal Reserve Board have interferred interferedof with your business or your methods with your business or methods of doing of doing business? No; the officers of the business ? Chicago bank are not at all dictatorial; they 7. In what way has the Federal Reserve seem anxious to cooperate in every way possible with their member banks and show a Bank collection system affected you? desire to transact their business in such a way 8. What are your general views on the ad- as to cause as little delay and "red tape" as visability of joining? can be reasonably expected, and frequently Replies to these questions have been ob- ask for opinions as to how the system may be tained from a majority of State member banks, changed to be more beneficial and equitable. Questions 1 and 8. No. 1. What was the and have been brought to the attention of the fundamental reason which impelled you to Federal Reserve Board. Those thus furnished, join the system? No. 8. What are your genwhether favorable or unfavorable, are here re- eral views on the advisability of joining? We published in full, without exception, as afford- felt that our financial system was very weak ing the answers to questions that are frequently and faulty. That when established it was put before the Board, and which can be best expected to be but temporary, and that our financial operations demanded a sound and most conclusively replied to on the basis great and yet elastic system to meet requirements of the actual experience of banks which have during troublous times. Therefore, we felt been members of the system. that the present system should be given a fair The names of the banks sending in these trial, and in order that such a trial be had it replies are furnished only in those cases where seemed that banks should cooperate even it mean some financial loss at first. permission was subsequently granted. Other should We did not expect to find the law perfect, but banks are merely designated by number with- we had, and still have, faith that the defects out reference to any principle of classification, and weaknesses will be perfected and strengthened as they are discovered by actual testing. such as location, capitalization, or the like. 93720—17 4 356 FEDERAL RESERVE BULLETIN. A bank can get along very nicely without being a member of the system during prosperous times, but should financial troubles loom up on account of labor trouble, general depression, war, etc., we shall feel safer for the membership we hold uniting us in a financial way with Uncle Sam, and having this feeling we are willing to make the required slight sacrifice during prosperous times. MAY 1, 1917. not granted by State laws, but, with the exception of the loan and reserve limits, we have not found the Federal requirements irksome. There has been some advantage to us in using the facilities of the reserve city clearing houses, by which we are enabled to get immediate use of funds that we have on deposit in other reserve cities. We have about come to the conclusion that the loss of interest on the reserve balances [No. 2. First State Bank, Dallas, Texas.] which we are compelled to carry with the Federal Reserve Bank and also the loss of interest Our fundamental reasons for joining the on the amount we have invested in the capital Federal Reserve System were because our stock of this Federal Reserve Bank are rather belief in its power to strengthen the financial high for the benefits which have accrued to us. situation all over the country, to enable us to borrow money at more reasonable rates' [No. 3. The Savings Bank of Richmond, Va.] and on shorter notice than we had been able to do with out correspondents, and for the At the time of our joining we were satisfied advertising feature which we expected to that it would not be a money-making venture accrue because of the fact that we were a State on our part, because we are not doing a combank and could also advertise that we were a mercial business, and during our experience member of the Federal Reserve System. of 28 years in business we have never redisThe advantages which we have actually counted a note. derived from this membership have been prin1. We look upon the Federal Reserve Syscipally in the fact that we are now enabled to tem as a financial umbrella, that in time of handle many collection points through the trouble may prove to be very useful. We also Federal Reserve System at a cost of 1J cents per believe that it is for the benefit of the entire item, whereas we formerly had to pay exchange banking interest of this country if it was on these points. brought under one government. Also, we have, to a certain extent, derived 2. None up to this time financially, but we some benefit through being able to advertise believe a large per cent of the people with that we were a member of the Federal Reserve whom we do business are not familiar with System. We have not found that there has banking matters and it is an additional inducebeen material advantage in being enabled to ment for that class of people who do business execute bills payable to the Federal Reserve with institutions who are under Government Bank and, in fact, have used this privilege supervision. very little. 3. The larger reserve required may have The principal disadvantages that we have caused us a little loss in profits. found in being members of the system have 4. None whatever. been due to the fact that we are compelled to 5. No. carry approximately $110,000 on deposit with 6. No. the Federal Reserve Bank here on which we 7. Not being a commercial bank, we are not draw no interest. Had this money been placed affected by the collecting system. with one of our reserve agents it would at least 8. I think that what I have stated in the pay us $2,200 per annum. outset covers the answer to this question. Another disadvantage has been that while under the State laws our loan limit is 25 per [No. 4. Bank of Montclair, Montclair, N. J.] cent of our capital stock, under the Federal Reserve System we are not allowed to lend 1. We believe that in union there is strength. more than 10 per cent of our capital and sur2. There are a number of advantages, not plus. As our capital and surplus is only the least of which is the effect upon the minds $278,000, we have at times found this limit too of our depositors; the principle one, however, small to take care of some of our larger cus- is no doubt the right of rediscount. tomers. 3. There appear as yet to be no disadvanOur membership in the Federal Reserve tages beyond the loss of interest on balance carBank has given us no new powers which are ried with Federal Reserve Bank. MAY FEDERAL RESERVE BULLETIN. 4. The New Jersey law did not limit amount of loans on collateral, whereas the Federal Reserve Act limits them to 10 per cent of capital and fixed surplus. At first this seemed a handicap, but we now think it a good thing. 5. Perhaps the only addition to our powers is that of rediscounting referred to under question 2. 6. The regulations have not interfered with our method of doing business in any way worth noticing, except perhaps to a slight degree in the requirements as to separation of the various kinds of money. 7. The Federal Reserve Bank collection system we regard as perfectly splendid, as it reduces our labor considerably and gives us much quicker returns on items. 8. We believe every bank in the country should become a member and are really surprised that we delayed joining as long as we 357 The minds of our bank's management now feel easy, as we now consider our bank to be in an independent position. Previous to membership, besides the carrying of a liberal cash reserve at all times, we depended upon banks with whom we carried balances for assistance in times of business depression. Our experience has been that such dependence is unreliable, for when money was tight with us money was just as scarce, if not more so, with them. The disadvantages that we have found from our membership in the Federal Reserve System are— Some additional work caused by our being required to make reports of bank's condition both to the State Department and the Comptroller of the Currency. We are not required to publish the national form of statement if the call for a statement is made by the State Department for the same date called by the comptroller. [No. 5. German American Bank, Minneapolis, Minn.] The Minnesota banking laws permit its banks The fundamental reasons which impelled our to loan to any one individual, firm, or corporabank to join thcFederal Reserve System were— tion a sum not exceeding 15 per cent of the To provide our bank with facilities to help bank's capital and surplus, whereas the naitself in tight times and to relieve itself from tional-banking law permits loans not exceeding 10 per cent of the same. We have not found dependence upon other banks. To do our part toward establishing a bank- this to be a disadvantage, as we seldom made ing organization in the United States which loans of over 10 per cent of our capital and will, as nearly as is possible, meet the demands surplus, believing the 10 per cent rate to be the of our country in all kinds of business condi- better banking. The Minnesota bank reserve requirements tions. To gain the advantage that accrues to banks are more liberal than those of the Federal sysunder national supervision as against banks tem. This is not a disadvantage to us, because under State supervision, by reason that the we have always found it necessary to carry a public regards the national supervision and greater reserve than the minimum required by control better and stricter than, that of a State. either of the banking systems. We have not found our charter powers in any The advantages and benefits that we have found from our membership in the Federal way hampered or curtailed by our membership, as the Federal Reserve Board permits a Reserve System are as follows: Being a State bank, we advertised the fact State bank to retain and use the powers of our membership in the Federal System. granted to it by its State charter unless same Our membership began August 30, 1915. Our ( has powers which are in conflict with prudent bank's total deposits on that date were j banking. We have found that the regulations give us $2,883,000. On March 5, 1917 (called statement), our deposits were $4,142,000, a gain, rediscount privileges and currency whenever needed. since membership, of $1,259,000. The regulations of the Federal Reserve By reason of our ability to secure funds by rediscounting at the Federal Reserve Bank we Board have not interfered in such a manner as are now able to run on a much lower cash is objectionable to us, with our business, or reserve than formerly. The difference of re- our methods of doing business. We are perserve necessary is of sufficient amount that mitted to do and are doing our business in the this amount loaned more than makes up the same way and manner as before membership, loss of interest on our balance at the Federal excepting that our reserves must be kept according to the laws of the Federal system and Reserve Bank. 358 FEDERAL RESERVE BULLETIN. MAY 1, 1917. that our limit for loans to any one person, etc., [Bank No. 6.] has been reduced from 15 per cent to 10 per cent of our capital and surplus, all of which is Our reasons for joining are, first, that our not objectionable to us, as explained under a competitor here is a national bank, and being previous answer in the foregoing. a rather small town they were using this feaThe Federal Reserve Bank collection system ture largely as an advertising scheme. Second, in the fall of 1914, with cotton our has affected us in that it costs us less to collect out-of-town items. The Minneapolis banks, main product selling at 5 and 6 cents and for previous to the time the Federal Reserve Bank quite a time not selling at all, it looked like we made collections, did not charge exchange on might need the advantages of a system that their own checks unless eastern exchange was would handle any eligible paper we might necessary or requested in payment. As the desire to discount, and our correspondents, Federal Reserve Bank now receives many of like us, could not make any promises. Again, our checks, therefore we now use less eastern we had been discounting paper at 6 per cent exchange, hence need to carry a smaller bal- (the usual charge) which after allowing the ance in our eastern connections, which lessens interest in advance really run to about 6J per our operating reserve requirements. We are cent, whereas the Federal Reserve Bank was taking commodity paper at 4J per cent. gainers by the arrangement. Our general views on the advisability of!! The advantages we find as a member of the joining the Federal Reserve System are that Federal Reserve System are that they will we believe the Federal Reserve Banking Sys- take any amount of eligible paper we might tem to be the best banking system ever care to discount at the prevailing rate, which devised by the United States or any other is at all times nearly 2 per cent under the country for the service and protection of the regular charge of the large city banks in Texas. financial and business interests of our country, We feel no uneasiness as to how the present its people, and for the protection of the member international situation might affect financial bank itself. interests. We are assured that any reasonIt must be admitted that the banking situa- able accommodation will be immediately tion as it now exists in the United States granted, and conditions could possibly reach a where there are as many banking systems, you stage where the large city banks in our dismight say, as there are States—none of the trict might not feel justified in discounting the State systems equipped to assist their members paper we might offer. We look upon the sysin times of pressure, and the fact that a great tem as not only being advantageous at all part of the banks of our country both in num- times, but especially so under present prevailber and resources are State banks not members ing conditions. of the Federal system—is not the most deThe only disadvantages we find is that on sirable condition for our country to be in should the amount of Federal stock owned by our it be visited with war or business depression. bank we only receive 5 per cent per annum, We therefore believe it our duty, not only to whereas we usually get considerably more. do our part toward building up one great, That is, so far we have received this amount in strong, efficient banking system in our country, dividends. We understand that only a few of but also to provide our depositors with every the Federal Reserve Banks are paying divifacility possible to secure for their service and dends. protection, which the Federal Reserve System Our charter powers have in no way been affords. We think that membership in the hampered or curtailed. Federal system should be especially desired The new powers we receive under the Fedby every State bank that is following the best eral Reserve membership are that, before banking methods. We believe membership joining, our State banking laws required us to would be profitable to any bank. We know keep 25 per cent of our deposits in reserve, that membership is profitable to us. Even whereas State banks in Texas who are memthough membership would not cause a money bers of the Federal Reserve System are allowed profit, even if there be a moderate loss in to maintain the same reserve as do national income, the better service and protection to ! banks, which is 12 per cent. depositors and the "easy feeling" of a bank's j State banks in Texas who are not members management by reason of its membership, are are required to keep at least 10 per cent of their worth a great deal. deposits in cash on hand in the bank. MAY 1, 1917. FEDERAL KESEEVE BULLETIN. 359 This is not so bad, "but quite often 25 per cent department of the system, which in our case of our deposits in cash seemed excessive, as we have been very satisfactory. It is impossible had no use of this much but could not lend it to state what effect the fact of a bank being a out. Especially is this so during the fall season member of the Federal Reserve System has on and up to May, when our deposits are high. the public mind. I do feel, however, that it During this time we could lend on 60, 90, and can not be injurious, and in a time of stress the 120 days part of the 25 per cent if we had been public naturally would be liable to select an institution which they knew had the facilities permitted to. The regulations of the Federal Reserve to rediscount. In reply; to your third question, wo have Board have not interfered with our business in any way. It is true that a ruling cut out all found no disadvantages from joining. None of exchange, but it would have affected us just our charter powers have been hampered or curthe same if we had not joined, as all collections tailed, neither have we found that our memberwould have finally come through our com- ship has given us any new powers that our petitor, and the exchange would have been lost charter or State powers did not confer on us. We have not found that the regulations of the in this manner. Another instance where we have been bene- Federal Reserve Board have interfered with fited is that a small bank down here that our methods of doing business in any way. borrows from May to September is required to In reply to your seventh question, as I stated maintain a good balance with their corre- before, the Federal Reserve collection system spondents as the borrowing power was based has saved us money, as we now receive quicker on the balance maintained with reserve banks. returns on our foreign items and we have outIn our case possibly a S5,000 loan >yould be all standing two or three million dollars less than we would need in one month, all of which was we did before this system was started, which left with the correspondent. Now, instead of amount we are able to loan at very fair rates. borrowing in large sums, we simpty fill out an Hoping this letter will encourage you to look application for rediscount for smaller amounts, fully into this subject, and that you and your thus saving the interest on larger sums that directors will certainly see the advantages of perhaps we did not use for some time. We joining it, as I agree with you the present internow discount $1,500 or $2,000 at a time as national situation warrants all institutions needed. standing behind the Federal Reserve System. So far we have had no trouble, and the only real disadvantage we have met with is the low [No. 8. Sullivan Bank & Trust Co.,Montgomery, Ala.] rate of interest received on our Federal Reserve We had reason to believe that the Federal stock and the amount of reserve we keep with the Federal Reserve Bank which does not draw Reserve System would be a great improveinterest, but this we figure is overcome by the ment on the banking system then prevailing. low rate of interest we can discount our paper ! We look with favor on anything that seems to at and in the small amounts we discount at ; be in line with normal development. If this I system had been in operation when war broke now. I upon us, hundreds of millions of dollars would [No. 7. Corn Exchange Bank, New York City.] i have been saved to this section of the country. I In the minds of a great many people, State The principal reason why we joined was that I banks have not stood as well as national banks, we felt, being the largest State bank in this coun- and it was our purpose to retain our charter try, it was our duty to join with the other large privileges, and at the same time get the adbanks in trying to make the Federal Reserve vantage in the public mind of the dual superSystem a success; also the fact that when we vision of the National and State governments. were considering the subject we ascertained all It has been, however, a great comfort to the objections to the system were of a picayune us to know that it was there if we wanted to nature and not of sufficient importance to use it—like we pay for the use of water in the warrant our not joining. pipe, although we may not use it. The comYou ask us what advantages have we found modity loan facilities" have been worth a great from membership in it. I can safely say that deal to the cotton country. we have enlarged our earning capacity oy our Under this head you might class the addiability to loan a larger per cent of our deposits. tional labor and the trouble of reports which We have all the advantages of the collection we have to make. Though, after all, they re- 360 FEDERAL RESERVE BULLETIN. MAY 1, 1917. suit in better supervision and more careful rediscount with the Federal Reserve Bank than with a bank which had no such right, as our management. Under State laws, we could loan more than State banks and trust companies have not, 10 per cent of the capital and surplus, provided unless they become members. The advantage we have found from memberthe loan was well secured and approved by a majority of the directors. Now we are limited ship, outside of a feeling of complete security, to 10 per cent, as the national banks arc. It is has been that our acceptance sells in the possible that our loans on real estate may be market at a better rate than the acceptances somewhat curtailed, though we have been of other State banks or trust companies, which perhaps are in equally good standing with us careful to keep them on a proper basis. The only advantage under that section we but are not members, the difference being, as recall is the privilege of having postal savings a rule, one-eighth per cent. As for its dis| advantages, I know of none whatsoever. deposits. So far, regulations have not materially in- j Since joining, we have continued to do exI actly the same business as before, the differterfered with our methods. It has cost us some money, as we had several | ence being that instead of keeping so much excellent collection connections which we have i cash in our own vaults, part of it is on deposit with the Federal Reserve Bank. lost. I know of no new powers which membership On the principle that "The Lord takes care of those who take care of themselves/7 we be- gives us, except the right to rediscount. In lieve that it is advisable to be a member, and I this connection I may say that immediately therefore able to take care of ourselves directly, j upon becoming a member we began to purchase and not through somebody else, especially at in the open market the acceptances of other such times as we arc passing through, although banks and sell, or rediscount them with the our other connections have always been most Federal Reserve Bank, and have continued : this practice ever since. This is the source dependable and liberal. I of some little profit to us and accustoms the [No. 9. Broadway Trust Co., New York City.] j Federal Reserve Bank to handle the paper we I give to it. None of us have forgotten the effect panics I The Federal Reserve Board's regulations have always had, nor the upset which follows I have not hampered us in any way. As a the issuance of clearing-house certificates, | matter of fact we have found them disposed which was the only remedy we could apply | to use every possible means of making our when the banks in central reserve cities had | membership pleasant. For instance, the exexhausted the amount of credit which they | animations made of this company by the might legally expand, but, notwithstanding | Federal Reserve Bank are made at the same the effect upon the domestic exchange situa- j time as the superintendent of banks of this tion of the issuance of clearing-house certifi- | State visits us; that is, these two examinations cates, this always tended to calm the excite- | are made as one. ment among the depositors of the banks, as the j The collection system of the Federal Redepositors realized then that if the funds at j serve Bank has affected us only to the extent the command of the banks gave out, they I that we now collect through them some of the could obtain a new supply through the issu- territory formerly collected for us by local ance of the clearing-house certificates. This banks. While possibly we have lost some reis the situation which has been created by the ! ciprocal business on account of this change, I Federal Reserve Banks. If the funds of a j find the collections are made more quickly and member bank run short, for any reason what- ; handled to our entire satisfaction. soever, the member bank has the legal right to | I, of course, think all banks should join the call upon the Federal Reserve Bank to place i system. Before actually joining it ourselves, I them in funds, either credit or currency, in I called on practically every bank in New York exchange for part of their assets. j City to obtain their ideas, and also upon a The above probably answers jom question : number of banks in Philadelphia, Boston, and No. 1, as the fundamental reason in my mind ! other cities. I found a well-defined prejudice for joining. Putting myself in a depositor's in the minds of many national-bank men, as place I feel that in time of financial pressure I well as State-bank men, but the prejudice would be-more satisfied to have my money on seemed to me to be based on a dislike" of or deposit with a bank which had the right to : lack of faith in the powers that be at Wash- MAY .1, 19.17. FEDERAL RESERVE BULLETIN. 361 ington, and have to admit that in many cases j our membership causes this or not, but we give I found a great lack of information concerning j it the credit for it. the terms of the act and the workings of the j 8. We _ are well pleased indeed. We see no Federal system. In any event, I have never I reason for staying out and the soundest reasons heard from any source * anything that I can for coming in. construe as a good reason for not joining, un[No. 12. Mercantile Trust Co., St. Louis, Mo.] less it bo the loss of earnings due to the factthat the Federal Reserve Bank pays no 1. The fundamental reason impelling us to interest on the balances on deposit with it. On this point I feel that this loss may properly join the Federal Reserve System was because be considered as the premium on safety j it gives us national supervision and the advaninsurance. j tage of discounting our paper whenever we might find it necessary. 2. The advantages thus far found from mem[No. 10'. Commercial Trust & Savings Bank, Joliet, 111.] j I bership have been practically nil, because since Replying to your communication relative to | the organization of the Federal Reserve System benefits of the Federal Reserve System will I there has been such an abundance of money say, as to the fundamental reason for joining | throughout the United States, occasioned by the system, our desire to avail ourselves of the j the European war, that we have made no use prestige which attaches to national banks as j of discounting privileges offered by the Federal distinguished from State institutions. j Reserve System. We have, however, inspired We feel that we have received an indirect i confidence in our institution by our memberbenefit. ! ship. We have discovered no disadvantages from | 3. We have had no disadvantage whatever from membership, beyond the fact that we have our having joined the system. We have not found our charter powers in any not received a dividend upon the money we in the stock of the St. Louis way hampered or curtailed by our member- have invested Federal'1 Reserve Bank, but that dividend is ship. Our membership gives us the privilege of cumulative and certainly will be earned in the availing ourselves of the courtesies and accom- near future and will pay 6 per cent; so we do not find any objection to the deferred dividend. modations extended through the system. 4. We are in no way hampered or curtailed It has increased our clerical work slightly. We have not felt the need of availing our- by our membership in so far as our charter selves of the Federal Reserve Bank collection powers are concerned, except that we are obliged to carry the same reserve as any of system. There may be some localities where the sys- our nonmerabcr bank competitors and also that tem is not of much advantage, but we feel that we are restricted to loaning not more than 10 there is an indirect benefit to be derived from per cent of our capital and surplus to any one a connection of this character where the popu- borrower. I believe in a restriction, myself, and I believe 10 per cent is enough for any corlation is made up largely of foreign born. poration, firm, or individual to borrow from one institution; so, therefore, while we are [No. 11. Merchants & Farmers Bank, Oheraw, S. C ] technically curtailed, we have never exercised 1. The certainty of rediscount, if needed and the privilege to loan a greater amount. when, and at reasonable rates. 5. No; membership does not give us any new 2. As mentioned in No. 1. Also we believe powers, because our power under the State the institution is placed in a higher "atmos- charter is very broad. phere" and is of practical benefit as an adver6. There is no rule or regulation made by the tisement. Federal Reserve Board which can in any way 3. Absolute!v none. interfere with our business or our method of 4. No. doing business. 5. No. 7. We .find their system of collecting checks 6. Certainly not adversely. saves us and our customers a great deal of 7. We have to credit their items on us at par money and will save more when the system is on receipt, but will say that since joining the better understood. system our premiums and exchange show a 8. If you are doing a business of depositing material improvement. We do not know if and discounting, if you are taking checking 362 FEDERAL RESERVE BULLETIN. accounts and loaning your money out on commercial paper, it is inconceivable to me why your institution and any other doing such business, does not go into the system; first, because it is your duty as patriotic citizens to help build up the Federal Reserve System; and, second, in times of stress, which are bound to come, the Federal Reserve System may be the haven of rest which you may need in later years. MAY 1, 1917. members of the Federal Reserve System at that time, we could have rediscounted our customers' commercial paper as well as our outside commercial paper and should probably have felt much easier than we did. Of course we could go to our correspondents and borrow of them, but my experience has been that when we need money they generally need it too, and we do not like to be in the position of asking for a loan. By joining the Federal Reserve System the rediscount privilege be[No. 13. Bank of Wisconsin, Madison, Wis.] comes a right which we are entitled to and a function which is welcomed by the officials in The fundamental reason which impelled us this city. In other words, when we rediscount to join the Federal Reserve System was the with them, we do not feel that we are asking a security to individual banks afforded by the favor. system. 2. We have found the following advantages The advantages we have found from our from our membership: membership in it are the right to discount (1) Rediscount privilege. paper when needed, the low rate of interest (2) Reserves: Our reserve requirements have obtained, the certainty of currency shipments been reduced from 20 to 15 per cent. when needed, and the collection system which (3) We have the right to open foreign is in process of development. We have found no disadvantages what- branches. (4) As a member bank in the Federal Resoever from our membership in it. serve System, our acceptances will sell at a We have not found our charter powers in any lower rate way hampered or curtailed by our membership. the system.than they would if we were outside We have not found that our membership 3. We have found the following disadgives us any new powers under our charter, but vantages from our membership: we believe greater strength is given us by rea(1) We obliged to carry a very large son of our membership in the Federal Reserve amount ofaregood money with the Federal System. Reserve Bank upon which no interest is paid. The regulations of the Federal Reserve (2) The mount of money which we can Board have not interfered with our business or loan to any individual, firm or corporation, is 10 our methods of doing business. cent of our capital and surplus, whereas When generally adopted, the collection per under our State laws it was 20 per cent. system will be of advantage to us. (3) No director in a bank belonging to the Our general views on the advisability of system be a director in a competing joining are that we would certainly advise you banking can institution in the same city. to join, and to do so at once. (4) For the time being we will lose some mone}^ through joining the system. [No. 14. Commonwealth Trust Co., Boston, Mass.] 4. Our charter powers have been curtailed 1. The principal reason we had for joining through the reduction of the amount we can the system was the rediscount privilege. We loan to any individual, firm, or corporation. have a very large commercial business and a | Our legal limit was $300,000; now it is $150,000. great many of our customers are borrowers However, we have lost practically no business and at times the demands on us are very large. on this account, and it is sometimes a great At the beginning of the war our call loans advantage to us to be able to say that we can could not be called and our securities could not lend more than $150,000. 5. Membership gives us the right to estabnot be sold, as the stock exchanges were closed. The demands from our customers were greater lish branch offices in foreign countries, a power than ever before, and our deposits decreased which has not been conferred upon us before rapidly. The best asset we had was our out- either by our charter or by our State laws. side commercial paper which was paid at ma6. We have not found that the regulations turity and the proceeds used in taking care of of the Federal Reserve Board have interfered our extraordinary demand. Had we been with our business or methods of doing business. MAY FEDERAL RESERVE BULLETIN. 1, 1917. 363 Cash.—We are allowed to carry all kinds of I It is our feeling that if you have a very large cash as reserve. j commercial business and your fluctuations in Comptroller's call.—When the comptroller j deposits are large, it would be well for you to makes "a call, we make out two additional consider seriously joining the system. It may copies, one of which is sent to the Federal cost you some money to do it, out it is a great Reserve Agent here, one to the comptroller, ! source of satisfaction to us to feel that we can and one to our State banking department, j rediscount if we want to in times of trouble. Examinations.—In the matter of examina- j If, however, you are doing a strictly trust busitions, the Federal Reserve Agent here has ! ness and your loans are all upon collateral, I can made arrangements with the State banking j see no great advantage in joining, department whereby one of his men assists the [No. 15. Central State Bank, Dallas, Tex.] State department and takes what data he needs so that there is no inconvenience from In reply to your letter of the loth, beg to say this. There must, however, be two examina- that the real reason why we joined the Federal tions made during the year. Reserve Bank was that one of our competitors 7. Up to the present time we have not taken was the first State bank in the United Slates to advantage of all the Federal Reserve Bank col- join the Federal Reserve System, and they lection facilities. Prior to entering the system featured that fact in all their advertising, and we had arrangements with a number of banks the question was asked our officers often why which involved good accounts with us and we we did not also join the Federal Reserve Bank, are feeling our way along carefully because we as the other State bank in Dallas was a member do not want to lose this business. Where it is and were making capital of that fact in their distinctly profitable to us to use the Federal j advertising, so that was the main reason for Reserve collection facilities we are doing so. our joining. However, since that time we have As an illustration of this would state that yes- u a ( j n o se rious reason to regret it. terday we had checks on Philadelphia amountOur bank being located in a reserve city, ing to S2,500,000, which under ordinary cir- membership with the Federal Reserve Bank cumstances it would have taken us at least two put us on a par with the national banks in days to collect and probably more. We de- j reserve cities- It has been considerable adposited these with the Federal Reserve Bank j vantage to us in pairing checks for our country and to-day they are available to us in paying j bank customers/ our clearing-house balances. In answer to your question No. 3, will say 8. We gave the matter of entering the system that the greatest disadvantage has been the very careful consideration, and it seemed to us, amount ot cash that they require us to mainin view of the very uncertain times ahead of tain with them. us, that the need of a unified banking system Answer to question No. 4, will say that we in this country is greater than ever before, as have found our powers curtailed; for instance, only through all of the commercial banking in- I the State banks""in Texas have a loan limit of stitutions entering into it can the greatest and j 25 per cent. Membership with the Federal best development of it be realized. Conse- j Reserve Bank lessens this to 10 per cent, which quently in joining the system we felt we were . I think is a good law. However, I would say doing what little we could toward bringing the j that if I contemplated a change now to the proper conditions about. j Federal Reserve System, I would nationalize Our relations with the bank have been ex- my bank instead of operating,.under both the ceedingly pleasant. There has been absolutely State bank and the Federal charters. It is no red tape to go through in connection with cheaper. rediscounts, the only thing required being that Answer to question No. 6: No. the notes shall come due within 90 days and Answer to question No. 7: It has been a represent a commercial transaction and that we benefit to us. We have saved money by their have a statement of the concern making the collection system. note in our files. My general ideas are that it is a good thing The officers of the bank in this city are trained to belong to if you are a commercial Institution! bank men and have a great deal of ability and We have found it very convenient to rediscount are more than anxious to do anything they can our notes with them when we need to. The for the various members. Too much can not rate of interest is very satisfactory, and we have be said in praise of their work. found our paper, in nearly every case, accep- 93720—17 5 364 FEDERAL RESERVE BULLETIN. MAI- 1, U)17. table to them. As I said before, however, I 2. We are confident that our membership would not join under the State charter. I has proven an advantage to us in helping create would nationalize if I were to become a member. a public opinion favorable to our institution. We have had numerous cases of new business [No. 16. First State Bank, Bonham, Tex.] which has come to us on account of our Federal Reserve membership, and definite evidence of The fundamental reason which impelled us favorable comment on all sides. While we do to join the system was the ease with which not by any means believe that our Federal Remoney might be borrowed on class of paper serve membership is directly responsible to any carried by this bank. Patriotic motive also. great extent for this increase, we do believe The advantages we have found from our that it has aided all our other efforts for new membership in the system are the ease and business and that it would have been difficult the quickness in rediscounting notes. for us to have made the progress we have withThe disadvantage we find from our member- out it. * * * ship is having to keep large reserve without 3. We have experienced no disadvantage interest. from our membership. Our charter powers have not in any way 4. Our charter powers are in no way hambeen hampered or curtailed by our member- pered or curtailed by our membership. In ship. some unimportant particulars we have to conWe find that membership gives us no new form to provisions which are somewhat differpowers which our charter 'or' State laws did ent from the provisions of the State law. The not confer upon us before. most important of these is that we are limited The regulations of the Federal Reserve in our loans to any one person or firm to 10 per Board have not interfered with, our business cent of our capital and surplus, just as national or our methods of doing business. banks are, instead of 20 per cent, which is alThe Federal .Reserve Bank collection system lowed under our State laws. In our opinion has reduced our exchange earnings to almost this change is distinctly beneficial and decidnothing. edly in the interest of safe banking. I think it doubtful whether the advantages 5. The only new power given us which we outweigh the disadvantages, In times of did not enjoy under the State laws is the right stringency our connection would, I believe, to accept drafts drawn against imports or exbe very advantageous. ports. While the State laws do not prohibit [No. .17. Guardian Trust & Savings Bank, Toledo, Ohio.] a State bank from accepting drafts of this character or any others, there is no enabling statute 1. There are two fundamental reasons which and there is at least a question as to whether impelled us to join the Federal Reserve System. we would have the power, unless it were given (a) Believing that the system was basically us under the Federal Reserve statute. 6. None of the regulations of the Federal Recorrect, that it would be permanent and that tactically all State banks would sooner or j serve Board have hampered us in any way in ater become members, we thought it wise, be- ; transaction of our business, and the attitude of ing a new institution, to join promptly, so that j the Federal Reserve Bank of Cleveland toward our business could be developed and our poli- us has always been marked with courtesy and cies established in accordance with the sys- ! a desire to cooperate in every way. 7. So far, the Federal Reserve collection sjstem7s requirements instead of adjusting our business and our policy to those requirements tem has not appreciably affected us. 8. We are of the opinion that the underlying with more or less difficulty later on. (5) We believed that there was a distinct ad- | principles of the Federal Reserve statute are in vantage to us in being the first State bank in ; the main correct, and that it is of the highest this Federal Reserve district to become a mem- j importance, on account of the necessity of conber of the system, that it could not help I centrating the reserves of the country as a basis but give us prestige, differentiate us from all for credit and currency, that the system, with other State banks in a favorable way, add to \ perhaps some modifications, become permanent. our strength and standing in the eyes of the '•To this end we believe that it is the duty of all public, and be of great value to us in many : bankers to extend their aid and cooperation, although, of course, it is equally the duty of other respects. I MAY 1, 1917. FEDERAL RESERVE BULLETIN. 365 each banker to decide how such coopera- sary, to issue currency and in other ways extion can be adjusted to meet the needs and pand credit at a time when it is needed, when interest of his own institution. otherwise it would be contracted. It seems to me that bankers all over the However, there are other advantages, among country, national as well as State, have lost them being that whereas our borrowing in New sight of the great benefits of the system through York is always based on 20 per cent balances not being able to lose sight for a moment of the ! being maintained, this phase of the question is direct disadvantage to them: i. e., the loss of ! not considered by the reserve bank in extendinterest on that portion of their reserve which I ing credit. The only requirement along this they keep with the Federal "Reserve Bank. i line that is made is that a member bank is Perhaps we should have specified this as a dis- I required to keep five-twelfths of its reserve advantage resulting from our membership in I with the reserve bank at no interest. This response to your question No. 3, for, of course, ! arrangement works to the member bank's we could easily estimate quite a monetary ! benefit, whereas the New York requirement loss from this source. There will be times, j operates against them, as they require the high however, when undoubtedly we can loan closer |! balances to be maintained ' at a, time when to our reserve limit on account of our ability deposits are low and the consequent demand to rediscount when the necessity arises, but I for loans arises, while with the reserve bank: probably at all times there will be a loss in this is not the carte since, when the deposits revenue which would .not occur "under the old shrink, the reserve requirement with them also s}^stem of reserves. We are convinced, how- \ decreases proportionately and that is iko time ever, that the old. national bank reserve system, ' when the loan is wanted. was unscientific and in every way improper, I The main disadvantages, if such they can for we do not believe that an. interest-bearing; • be called, are in having to maintain the same balance can ever be a real bank reserve, and ; reserve that is required of national banks. in our opinion the education of the present- ; restricting loans that are secured by real day banker to look upon an interest-bearing . estate to 25 T>er cent of the bank's capital, not balance as a reserve has done incalculable | being allowed to loan on your own stock, and. harm and we will not obtain proper coopera- 1 in having to furnish a copy of your called tion for the building up of the Federal Reserve ! statements to both the Comptroller of the System until bankers become convinced that j Currency and to the State banking departsue!: a reserve is not a proper one and recon- | ment. cile themselves to some loss of revenue in • We have lost some exchange charges, but order to obtain a real reserve. : this-has been more than offset by the wider I par list that the system gives. [Bank No. 18.] We feel that it is the duty of every bank,, especially at a time such as we are facing, to I believe that the real fundamental reason j join the system and thus strengthen it both for our decision to become a member of the | by its membership and cooperation. system was to place our borrowing and rediscotiiiting capacity on a more stable basis. We [No. 19. Bank of Eufaula, Eufaula, Ala.] had never experienced any difficulty in borrowIn reply to the first question: In the South. ing what we wanted in New York (except during the early fall of 1914 when the European during the summer months it is necessary for war commenced); at the same time there was us to rediscount about the same amount of always the feeling that it was optional with . aper that we have capital. We have never New York as to whether they would handle our j ad any trouble with our New York correpaper or not, and we wished to be removed spondents along this line. In fact, they have from the danger of having our credit restricted been very liberal with their rediscounts to us. at a time when it was most needed. Our under- At the same time, there were times when we standing of the Federal Reserve law is that it felt that we were not getting the rates that we is obligatory on a reserve bank to rediscount | could have gotten had wo been entirely indefor its memoers at any time desired such paper | pendent. Every courtesy in fact, was exas is eligible under their rules. In times of a tended to us by our New York connection. At financial strain this proves a bulwark for the the same time, we never knew just exactly smaller banks to lean upon, inasmuch as the what we could expect in times of panic or Federal Reserve Board has the power, if neces- distress from our connections in New York, 366 FSDEEAL RESERVE BULLETIN, For this reason, we did not feel that we, ourselves, were always safe, and that we were not protecting the people that were doing business with us as we could should we join the Federal Reserve System. Answering question No. 2: Nearly 50 per cent of our loans are made upon commodities. The commodity rate made by the Federal Reserve Bank has been ruling most of the year around 3 per cent, and for a few months in the summer at 3J per cent. Our rediscounts with the Federal Reserve Bank at this time on commodities amount to $200,000. Their rate of interest on commercial paper we also find to be on an average about one-half of 1 per cent less. Answering No. 3: There has been no disadtage arising from our membership in the Federal Reserve System. Answering No. 4: The only difference where the Federal laws and the State of Alabama laws vary is in the reserve. Alabama requires 15 per cent; 6 per cent shall be carried in the vault and 9 per cent with the reserve agents. The Federal Reserve law, as you know, requires 12 per cent total, and does not stipulate any particular amount to be carried in the vault. No. 5: I do not think that the Federal Reserve connection gives us any new powers that our charter under the State did not give us. No. 6: The Federal Reserve Bank takes the examination of the examiners of the State of Alabama. We were examined before we were admitted, and again about six months later, by Federal Reserve examiners. Since the time, the ruling relative to the Alabama examinations was made. No. 7: The bank collection system, inaugurated by the Federal Reserve, has benefited us for this reason: Our business is largely commercial, and we handle a great many out-oftown checks ourselves, that we were having to pay collection charges on. We are now getting these collected practically without cost, and it more than offsets what we lose by having to remit at par. No. 8: We would not under any circumstances try to operate a bank in this section outside of the Federal Reserve association. There is only one difference that we know of relative to the laws for lending as laid down by the Federal Reserve Board and the State of Alabama. This affects real-estate loans. Jnder the Federal law we are allowed to lend 25 per cent of our capital and surplus. Under the State laws there is no limit. For a bank doing a commercial business, however, it has always MAY 1, 1917. been my idea that loans on real estate should not be made. One of the greatest conveniences offered by the Federal Reserve Bank we find to be a trade acceptance, a copy of which we are inclosing. Under the State laws we can lend more than 10 per cent of our capital and surplus to one party, provided the loan is passed upon by the board of directors in writing. Under the Federal law you can lend the full amount of your capital and surplus on commodities attached to trade acceptances. [No. 20. Fort Scott State Bank, Fort Scott, Kans.] Question 1. What was the fundamental reason which impelled you to join the system ? Answer. Our desire to make our bank as safe as possible in time of financial stringency or panic, and to furnish every possible protection for our depositors. We thought that as a member of the system we would have closer connection and probably receive more prompt and adequate assistance should it ever become necessary for us to obtain funds to pay our depositors. Question 2. What advantages have you found from your membership in it ? Answer. We have been allowed to keep postal savings deposits of about $15,000, which would have been withdrawn had we not joined the system. We did not anticipate any other advantages under normal financial conditions. Question 3. What disadvantages have you found from membership in it? Answer. Was very burdensome until the order of the Federal Reserve Board and the Comptroller, under date of May 3, 1916, relieved us from filling out all schedules in the national-bank statement except as to the ordinary statement of resources and liabilities. In addition to this burden we have the additional expense of the printer's charges for printing the national-bank statements. Question 4. Have you found your charter powers in any way hampered or curtailed by your membership ? Answer. As a member bank we are now limited to loans of 10 per cent of our capital stock and surplus to any one individual or firm, whereas, under our State law, we were allowed to loan 15 per cent. The Federal Reserve law also places a limit upon our real-estate loans, but this has not affected the amount of such loans as we carry. MAY I, 1917. FEDEKAL RESERVE BULLETIN. Question 5. Have you found that the membership gives you any new powers which your charter or State laws did not confer upon you before ? Answer. At the time we joined the Federal Reserve System our State laws required us to carry a reserve of 25 per cent against our deposits, but since that time our State law has been amended so that it now requires the same reserve, viz, 12 per cent for us, as required by the Federal Reserve law. Question 6. Have you found that the regulations of the Federal Reserve Bank have interfered with your business or methods of doing business ? Answer. No. However, we have considered it good policy to have statements made by borrowers'" on blanks furnished us by the Federal Reserve Bank, which contain more information than our ordinary requirements for such statements. We hardly consider this a burden, but really prefer the Federal Reserve blanks to the ones we had used prior to our joining the system. Question 7. In what way has the Federal Reserve Bank collection system affected you? Answer. It has reduced our income on exchange that we had collected on checks drawn on other banks in this city about $25 per month. Of course this loss of income has affected nonmember banks as well as member banks. Question 8. What are your general views on the advisability of joining? Answer. We believe that the reorganization of our banking system along the present lines has resulted in satisfying the general public that the banking business is now on a sound and safe basis. This feeling of security among the depositors and the public in general makes the chance of a panic very remote. The relief from anxiety among the bankers themselves, including nonmembers of the system, in our opinion, more than offsets any burdens and disadvantages of the system. [No. 21. Bank of Lewellen, Lewellen, Nebr.] 367 realized that our banking system was very defective. After the act was passed creating the Federal Reserve System, I examined the law carefully and made a trip to Kansas City and became acquainted with the officers of that bank and their manner of doing business. I felt that the act was a long step in the right direction and judged it a public duty for those engaged in the banking business to join and lend their best efforts to support the system and also to help cure the delects, if any existed. We joined about two years ago and have never regretted doing so. Some of the advantages are: (1) A feeling of security because you have an extra place where you can place your notes and secure accommodation. (2) A lower rate of discount in times when we needed extra funds. (3) It is a very good advertisement in a town like ours where there are two State banks. We have had no trouble or red tape in getting notes rediscounted whenever we needed extra funds. The disadvantages are making four extra reports a year and giving a more detailed account of interest charges, etc., than the State requires. (4) To your fourth question, will say that our right to make loans to one individual or firm was reduced from 20 per cent to 10 per cent of our capital and surplus. We have continued to exercise our right under the State laws and the Reserve System has made no objection. (5) Membership gives no new powers. (6) Rules and regulations of the Federal Reserve Board have not interfered with our business or manner of doing business. (7) It has not materially changed our collection system or affected the income from exchange out here. In conclusion, will say that we are the only State bank in Nebraska that has become a member of the system and, while it is sometimes annoying to be in a, class different from your neighbors and business associates, we have never for one moment regretted joining the Federal Reserve System, It gives me pleasure to answer your favor of the 17th instant requesting reasons why we i [Bank No. 22.] became a member of the Federal Reserve Sys- j tern. I have spent over 50 years in active | At the time the question of our joining the business, at different times interested in banks. | system arose, we figured to a certain extent During those years I have at times been a de- | that it was the patriotic duty of all of the banks positor and at other times a heavy borrower. ! to voluntarily join, and we anticipated that the In the experiences of those years, especially dur- release of a certain percentage of our reserve ing the years of 1873, 1884, 1893, and 1907, I for loaning purposes^ would offset the loss of 368 FEDERAL RESERVE BULLETIN. MAY 1,1 Oil by to keep in Chicago, on which we receive no reserve account with the Federal Reserve Bank. interest. However, this is not serious and We also felt that this was in a way insurance we feel that in a way this is an asset to us. both for ourselves and for our depositors, guarThe Federal Reserve Board accepts the anteeing that our customers' legitimate wants examination of our State bankir.g department would always be taken care of. In addition I and the same report made to the banking we felt that a certain volume of business i department of the State is also furnished to would be attracted by our membership. \ the Federal Reserve Bank and the Comptroller No particular advantages have been found j of the Currency at Washington. and we know of no additional business received. \ We have not felt that our charter powers Wo, of course, have under present conditions j are in any way curtailed by our membership. sustained a loss on account of maintaining a We have found that the required reserve is reserve without interest, Our exchange profit less for the Federal Reserve than for the State, has been very materially reduced. We have We feel that the State department lias been been put to additional expense and serious ! mellowed in many of its rulings through the inconvenience on account of the voluminous j influence of the Federal Reserve System. We and complicated reports called for by the\ are not yet clearing checks for the Federal Comptroller. j Reserve System, but we expect to offer them Our charter powers have in no way been | this service from now on. This is another affected by our membership. j matter, we feel, that is going to be encouraged Regulations have in no way interfered with i by the Federal Reserve System and will be our business, except at the time of joining the I universal within a few years. system we were called on to sell various stocks \ Our board fceis the disadvantages are very which we held and which were very profitable ; small and that the prospects of the system's Investments. growing to be a very large factor; we are perThe collection system has made no material j fectly satisfied with our membership. change in our method of handling items. We j have always maintained and still have a large j [No. 24. Central Trust Co. of Illinois, Chicago, 111. j list of direct connections in otir territory, ! At the time the Federal Reserve System was through which we prefer to handle our items. Personally, I think that if the matter was inaugurated the matter came up for discustaken up at this time our company would not sion by our board of directors and we felt that, join the system, and I think that most of our inasmuch as this was to be a very large factor in the banking business of this country, it was, other officers feel the same way about it. in a way, a patriotic duty of State institutions to join with the national banks in making the [Bank No. 23.J system a success. In addition to this feeling, The fundamental reason for our joining the by joining the Federal Reserve System we system was the matter of postal savings. We would then be able to go directly to tne Federal have no national bank in the city and owing Reserve Banks for funds or currency in time to the large foreign population and conse- of stress, rather than be obliged to work quently large postal savings deposit, we were , through a national bank, as was the case under unable to obtain the same without belonging j the old Aldrich law. This latter, of course, is to the Federal Reserve System. • the great benefit to be derived from memberAs to the advantages from our membership, | ship in the Federal Reserve System, acting as a will say that outside of belonging to the sys- !] sort of insurance against times of financial tern, which we feel is bound to become the difficulty. mainstay of the financial interest of the conn- i The operation of the law does not curtail in try, we have received no large advantage, j any material respect the advantages which we At the time we considered going into toe: enjoy under our State charter. Being in a system we consulted with our State banking ; central reserve city we are obliged, of course, department and they stated to us that they j to maintain the same cash reserves that are felt that the time was not far distant when all :j maintained by national banks, but this is not a banks would be under the national system, serious disadvantage, as we naturally would and we have the same feeling. carry about the same amount of money on In regard to the disadvantages, the only -. hand in the ordinary course of business. There one is in the matter of reserve, which we had I are few, if any, new powers granted to us under MAT :l ; HM7. FEDERAL RESERVE BULLETIN. the new system, outside of the ability to discount with the Federal Reserve Bank and to secure currency directly whenever necessity might arise. Up to this time the regulations of the Federal Reserve Board have not in any way interfered with our business, although, of course, they have the right through the Federal Reserve Bank of Chicago to require an examination in the regular order of business. They now accept the reports which we make to the auditor of public accounts of the State of Illinois, and also accept the regular reports made by the bank examiner, who generally comes in twice each. year. We make a report direct to the Comptroller of the Currency and to the Federal Reserve Bank of Chicago at such times as a call is made for a statement by the national banks of the country. We, of course, are members of the Federal Reserve collection system and have been using the system to a considerable extent. This has been, of course, somewhat experimental in character and no one knows as yet just whether the collection system will be of real advantage to the banks under its present method of operation. Wo feel satisfied that membership in the Federal Reserve System is of a real advantage and believe that it is the right thing for the State institutions to join with the national banks in making the Federal Reserve System the basic system for the country. The idea of consolidating the reserves in the Federal Reserve Banks seems to me correct in principle and for the best interests of the country. The burden of maintaining cash reserves should be borne equally by all banking institutions and each bank, therefore, should be willing to perform its part of this service. We find that there is considerable prestige attached to membership in the Federal Reserve System, and our own customers seem to regard our action as an additional safeguard for their own interests. As you perhaps know, we are the only State institution in Chicago which is a member of the Federal Reserve System, and we have in no sense regretted our membership. [No. 25. First State Bank, Hamlin, Tex.] No. 1. Under the delusion that wo would be able to rediscount our bills receivable, in case vvo had to borrow money, at a better rate than we "would )>o able to get it from our cord 369 No. 2. It might be worth something in the way of advertising. No. 3. It forces us to make two reports at every "call," one to the State and one to Washington, as national banks do. The Federal Reserve Bank does not pay the usual 2 per cent on daily balances, as our other correspondents. We are required to keep live-twelfths of our reserve with them at all times, and in case we fall below for one day we are subject to a slight penalty, for every offense. Owing to the clearing system inaugurated not long since, this is likely to occur, for everything comes through the Federal Reserve Bank, they charge you with the collection letter at the time it leaves them. In our case, it takes a letter two days to come from Dallas to llamlin and two days to go. It is possible for us to be below the required reserve five or five days before we could possibly restore it. To protect ourselves against probable penalties, we are forced to keep a greater balance with the reserve bank than we would otherwise do, inasmuch as they pay no interest on daily balances. No. 4. No. No. 5. We are permitted to take over commercial paper and bills of exchange, from our customers, like national banks do, that is, there is no special limit. Under our State charter we could only take an amount equal to 10 per cent of our capital and surplus. No. 6. No. No. 7. It has affected our revenue in way of exchange seriousl}r. This would be the case, however, if we did not belong to the system, for everything comes through the Federal Reserve Bank, at Dallas, and they would send all items, on us, to the national bank, at this place. No. 8. Under normal conditions internationally I do not see much benefit to State banks becoming members of the Federal System, but as you suggest, owing to the international situation which has arisen and for the purpose of consolidating the financial strength* of the country, that puts another phase to the question. I have tried to give you, in my feeble way, our experience with the system. Conditions and environments in your part of the country might be quite different than with us. I don't feel quite equal to the occasion of passing on this, and for that reason you will consider what 370 FEDERAL RESERVE BULLETIN. MAY 1, 1917. I have said as applying to our individual Atlanta without interest, whereas if we had case only. this money with our correspondents we would have enjoyed interest at the rate of 2 per cent [Bank No. 26.] per annum upon our balances. L A desire to contribute our share toward 4. Our charter powers have not been hamthe upbuilding of a better system of finance and pered or curtailed in any way by reason of our banking. membership. 2. Practically none. 5. As our charter was exceedingly broad, 3. The tying up of about 6 per cent of our I have found no new powers granted us under capital and surplus, on which we get 6 per cent the Federal Reserve System. dividends, and the tying up of the reserve re6. The regulations of the Federal Reserve quired, on which we get no income. Our ex- Board have not interfered with our former perience is that we derive about 1| per cent on methods of doing business. the amount really invested. 7. The par collection of checks under the 4. We have not been materially affected. Federal Reserve Act has occasioned us some 5. Nothing except the privilege of borrowing losses in that we do not now receive the revenue direct, which with us has proven of no mani- in remittance of items which we formerly refest advantage. We have been given the ceived before the system put into operation privilege of lending on commodities to all, not the parring of items. excluding our officers, and this is not regarded 8. Whatever feeling of disapproval and disexcessive lending. trust of the S3Tstem we may have had, it has 6. No. been put aside in a much larger view that the 7. This, our experience shows, is a positive Federal Reserve System has come to stay, and hardship to the banks deriving a fair return for it becomes a duty not to oppose it, but to coservices rendered, and for us member banks to operate to its improvement. This we believe tie up additional funds above the required can best be done by a full membership, and our reserves in order that we may not have to bear motives in joining were to contribute our share the interest charge of 6 per cent on all defi- to its resources and to associate ourselves with ciency in required reserve forces us to incur the other leading banks of the country in deadditional loss. veloping the system, and I therefore suggest that I believe you will find it to your interest [No. 27. American Trust & Savings Bank, Birmingham, and advantage to become a member of the Ala.] system, so that you will be in a position to render service not excelled by any other instiOur institution applied last July, and was tution, be it a State bank or national bank. admitted as a member of the Federal Eeserve System, we retaining our State charter. [No. 28. Old Colony Trust Co., Boston, Mass.] In answer to your questions as follows: 1. Our board of directors considered the sub1. We joined the Federal Reserve System on ject for six months before definitely applying account of the rediscount privilege, the adverfor membership. They were of the opinion tising, and the general desire to help along a that it would be better for the general business plan which seemed essential to the safety of interests of the country for all institutions to our country's financial stability. join the system, thereby insuring the successful 2. The only advantage we have so far gained operation of the great advantages to our busi- is the fact that our acceptances sell at a better ness interests and insuring the absence in the rate than those of the other trust companies of future of financial panics. the United States who are not members. This 2. As far as I can see the only advantage we means quite a little financial advantage. We have received to-day in being a member of the also have the contingent advantage of being system is that it has been a good advertisement able to lend more freely and not pay quite so for us, and possibly has brought business to us much attention to secondary reserve, relying that would not have come to us should we have somewhat upon the ability to rediscount, of only remained as a State banking institution which we have not yet availed ourself, preferwithout the membership in the Federal system. ring to sell acceptances in the open market. 3. The only disadvantage is that we are 3. We have found absolutely no disadvanlosing interest on the necessary balances we are tage from our membership, except the slight carrying with the Federal Reserve Bank in work involved in furnishing the Comptroller of FEDERAL RESERVE BULLETIN. MAY 1.1917. the Currency with five reports annually. These reports, however, are practically duplicates of the reports furnished to our State, and in Massachusetts the Federal Reserve Board have agreed with us that our State examination will be sufficient for their purposes. 4. Our charter power is curtailed by joining to the extent that our lending capacity was reduced from 20 per cent to 10 per cent of our capital and surplus. Confidentially, we welcomed this. 5. Membership gives us power to invest in foreign securities, which is not given to our State banks, and it makes a much better market for our acceptances. 6. No. 7. We are using the Federal Reserve Bank to a considerable extent for collections; but this is because the Boston Clearing House Association voluntarily turned over to the Federal Reserve Bank its New England clearing system. 8. We find many advantages from belonging, including that of much greater safety, and find no disadvantages worth mentioning. From your point of view, of course, we can not advise, as no doubt you have many local reasons for joining or not joining. Of "course, you understand we have the privilege of withdrawal upon a year's notice, and the Federal Reserve Bank is obligated to buy back our stock. [Bank No. 29.] Our reason for joining the system was for protection in case of panic. We have felt no advantages from our membership, as we have had no occasion to use it, and we feel that we have lost nothing. The disadvantage we have found from our membership was the making of extra reports. We have not found our charter powers in any way hampered or curtailed by our membership. We have found that membership, according to national charter, gives us new powers. The regulations of the Federal Reserve Board have not interfered with our business or our methods of doing business. Wo have not been affected in any way by the Federal Reserve Bank collection system. We think that the Federal Reserve Bank collection system is a safe protection and concentration of funds. We think you have the proper view of the whole matter in a nutshell. 93720—17 6 371 [First Guaranty State Bank, Pittsburg, Tex.] The fundamental reasons which impelled us to join the system were chat we felt that to belong to the reserve system would give us additional strength, and that in stringent times we would be able to rediscount our paper at a low rate of discount. We have found no advantages whatever from membership in the system. The disadvantages we have found from our membership in it have been a considerable increase in clerical work and. a great deal of unnecessary red tape. Our charter powers have not been hampered by our membership. Our membership gave us no new powers which our charter or State laws did not confer upon us before. In fact, it really curtailed our powers as far as handling land paper and loan limit is concerned. The regulations of the Federal Reserve Board have not interfered with our business or methods of doing business. The Federal Reserve Bank collection system has affected us by reducing our net profits about $500 per annum. Our general views on the advisability of joining the system are that) while we regard the system very highly, we candidly think that a bank desiring to go into the system should take the whole deal and take out a charter under the national banking laws. Feeling that we derived no direct benefits from our membership in the reserve system and the compliance with the regulations creating quite an increase in our clerical work, we withdrew from, the system on January 18, 1917. The Federal Reserve System is th.3 greatest piece of legislation enacted in recent years and it is entitled to our hearty support, but it is an unnecessary expense and trouble to try and belong to both systems at the same time. (Citizens State Bank, Memphis, Tex.] The advantage we have found from our membership in the Federal Reserve System is our ability to use our rediscount privileges more fully. The disadvantage we have found from our membership in the Federal Reserve System is that the loan limit to individuals or firms .is reduced. 372 FEDERAL RESERVE BULLETIN. We have found that membership gives us no new powers which our charter or State laws did not confer upon us before. The regulations of the Federal Reserve Board have not interfered with our business nor our methods of doing business. The Federal Reserve Bank collection system has caused us loss of exchange. Our general views on the advisability of joining are that if in country where rediscount privileges were not needed freely, we would not join. We are in a country where there is great demand and we can get better rate from Federal Reserve than corresponding banks. This is new developing country and requires plenty of the cheapest money obtainable*. [Bank No. 32.] I have noted very carefully your most welcome letter of recent date, in which you ask us to furnish you with an expression as to the reasons for joining and the advantages and benefits we derive from the Federal Reserve System. "The following are the answers to the questions in your letter: 1. We did not think that we were getting the right kind of treatment from the large city banks which have been supplying us small institutions with funds, in their rate of interests and time. 2. Since we have been admitted we have had the finest kind of services offered us by these same city banks. 3. None whatever. 4. Positively no. 5. We are offered great advantages through the Federal Reserve banks and their member banks, by helps through hard seasons. 6. No." 7. Very satisfactory. 8. Our advice would be for banks and bankers to join hands, as we think that there are no better means to success than standing together and unity. We now believe this much of the Federal Reserve System: Banks who are not members are to banks who are members as the fiber is to the cable—one tiny fiber is very weak, while when united with many others— that is, under the system of many others—-maki ag one in unity and power, one under one Head. MAY A, j917. Press Statements. These statements to the press have been issued by the Comptroller of the Currency on the dates given: The reports of condition of the national banks of the United States just compiled show that, on the date of the last call, March 5, 1917, the reserves of these banks amounted to 2,642 million dollars, exceeding by 169 million dollars the greatest reserves ever previously held. Tne excess or surplus reserve held by the banks, beyond the amount they are required by law to hold, amounted to 1,109 million dollars, being 92 million dollars more than ever before, the largest surplus reserve previously held having been shown on November 17, "l916, and amounted at that time to 1,017 million dollars. The total resources of the national ban s March 5, 1917, amounted to 15,979. million dollars, and exceeding by 645 million dollars the assets held at tfi.e time of the last call December 27, 1916, and were 2,140 million dollars more than the resources of the banks in March a year ago. The total deposits March 5, 1917, aggregated 12,957 million dollars, exceeding by 469 million dbllars the greatest deposits ever previously reached and were an increase of 692 million dollars over the deposits of December 27, 1916, and an increase of 2,166 million dollars over the deposits of March 77 1916. Of this 692 million dollars increase, 271 millions were in individual deposits and 421 millions in deposits from other banks. Loans and discounts March 5, 1917, were 8,712 million dollars, an increase since December 27 last of 372 millions, and were 1,222 million dollars more than on March 7, 1916. The amount of loans made by national banks March 5, 1917, directly secured by warehouse receipts for cotton was 92 million dollars. This compared with 44 million dollars June 30, 1916, and 48 million dollars September 12,1916. The records of the comptroller's office do not show the total amount of loans made by national banks on warehouse receipts for cotton for intermediate dates between September 12,1916, and March 5, 1917, and the above figures are exclusive of other loans made by national banks on cotton but not secured directly by warehouse receipts. Specie, specie certificates, and balance on hand with Federal Reserve Banks March 5, 1917, amounted to 1,456 million dollars, being MAY 1. 1917. FEDERAL RESERVE BULLETIN. 373 an increase since December 27, 1916, of 72 | The States whose country banks showed the million dollars, and an increase as compared : largest percentage of reserves were Colorado, with March 7, 1916, of 316 million dollars. ; 41.01 per cent; Nebraska, 40.67 per cent; Borrowed money as represented by bills Montana, 39.35 per cent; Kansas, 39.30 per payable and rediscounts March 5, 1917, was ; cent; Iowa, 36.76 per cent; Louisiana, 36.54 only 69 million dollars, a reduction as com- ; per cent; Kentucky, 36.49 per cent; Oregon, jjared with December 27, 1916, of 20 million : 35.50 per cent; and Texas, 35.49 per cent. Among the reserve cities, those whose banks Hollars and an increase, as compared with held the largest percentage of reserve were March 7, a year ago, of 7 million dollars. United States bonds owned amounted to 714 ; Galveston, 47.47 per cent; Des Moines, 34.43 million dollars March 5, 1917, a reduction as per cent; Louisville and Tacoma each, 33.51 compared with December 27 last of 2 million per cent; San Antonio, 33.15 per cent; Housdollars and a decline of 39 million dollars as ton, 31.71 per cent; Dubuque, 31.68 per cent; Birmingham, 30,93 per cent; Seattle, 30.23 compared with March 7, 1916, Bonds other than united States bonds March '! per cent: Cincinnati, 30.14 per cent; Waco, 5, 1917, amounted to 1,770 millions dollars, an ;i 30.01 per cent. The reserve cities outside of increase of 44 million dollars over December 27, the central reserve cities which showed the 1916, and an increase of 305 million dollars as lowest percentage of reserves were Charleston, 17.75 per cent; Minneapolis, 18.33 per cent; compared with March 7, a year ago. The amount due from banks other than Fed-.! Richmond and Atlanta each, 19.47 per cent; era! Reserve Banks was 2,016 million dollars .; and Muskogee, 19.18 per cent. The central March 5, 1917, an increase of 172 million dollars '. reserve cities showed: New York, 22.03 per as compared with December 27, 1916, and an ,• cent; Chicago, 18.73 per cent; and St. Louis, increase of 221 million dollars as compared with ;; 19.72 per cent. March 7, 1916. The States whose country banks showed the lowest percentage of reserves were Rhode APRIL 7, 1917. Island, 20.57 per cent; South Carolina, 20.94 The Comptroller of the Currency gave out ; per cent; Massachusetts, 20.99 per cent; New to-day the following statement concerning the ; York, 21.01 per cent. location of the reserves and surplus reserves :; The total amount of reserve held in the vaults held by national banks March 5, 1917: I: of the national banks or with their Federal Of the 2,642 million dollars of reserves held ; Reserve Banks amounted to 1,564 million dolby national banks March 5, 1917, the banks in i: lars. The reserve held with approved reserve the central reserve cities held 647 million dol- agents was 1,078 million. As the total relars, or 100 million more than the amount re- \ serve required was only 1,533 million dollars, quired by law. Other reserve cities held 750 : it is seen that the banks now hold in their own million dollars, or 290 million more than was : vaults and in the Federal Reserve Banks in the required, while country banks held 1,245 mil- ! aggregate an amount greater than the total lion, being 718 million more than necessary. ; reserves which they are required to hold, so The percentage of reserve to deposits held i that the total of 1,078 million dollars held with by central reserve city banks was 21.31, I the reserve agents, plus 31 million of the cash against the requirement of 18 per cent. Other in vaults may all be regarded as excess or surreserve cities held 24.48 per cent, against a re- plus reserve. Under these conditions it is evident that no quirement of 15 per cent, while the country banks which were only required to hold 12 per inconvenience or hardship would result if the cent, held 28.36 per centof their deposits in amendment recommended by the Federal Reserve Board and the comptroller's office lookreserve. Among the country banks the heaviest re- ing to the anticipation of the time when the serves were shown in the Western States, entire reserves must be kept in their own where the average reserve held was 35.10 per I vaults or with the reserve banks should be cent. The Southern States held 30.57 per ; passed by Congress. The law as it now stands cent, Pacific States 30.32 per cent, Middle : permits country banks until November, 1917, States 29.89 per cent, Eastern States 24.11 ! to carry a portion of their reserves with the per cent, and the New England States 22.63 i central reserve and reserve cities. : APRIL 11, 1917. per cent. 374 FEDERAL RESERVE BULLETIN. 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 March 24, 1917, to April 20, 1917, inclusive: Banks. New charters issued to With capital of Increase of capital approved for With new capital of 15 1635, 000 17 4, 790,000 Aggregate number of new charters and * banks increasing capital 32 With aggregate of new capital, authorized 5, 425,000 Number of banks liquidating (other than those consolidating with other national banks) 4 Capital of same banks Number of banks reducing capital 2 Reduction of capital Total number of banks going into liquidation or reducing capital (other than those consolidating with other national banks). Aggregate capital reduction :l, 1917. of the Comptroller of the Currency, to the credit of the Treasurer of the United States, the amount of the bill. The Federal Reserve Board is desirous of cooperating with the Comptroller in this matter, and has instructed me to advise Federal Reserve Banks that they should receive these deposits as they are tendered, and issue one certificate of deposit, in triplicate, covering all deposits on account of examinations, made by national banks in each district for that day, the certificate to contain an itemized list of the deposits made by each national bank. One copy of the certificate should be forwarded each day, as deposits are made, by the Federal Reserve Bank to the office of the Comptroller of the Currency, another to the Treasurer of the United States, and the third to the Secretary of the Treasury. 200,000 Commercial Failures. 175,000 Commercial failures in the United States as reported by R. G. Dun & Co. continue to make a favorable comparison with the corresponding period last year. For the three weeks of April the number was 760, as compared with 1,046 for the three vvreeks of April in 1916. For the month of March, the latest period for which complete returns are available, the number is 1,232, compared with 1,690 in March, 1916. Owing to more numerous suspensions in March of exceptional magnitude, the amount of liabilities—$17,406,096— shows a moderate gain over the $16,885,295, occurring during the corresponding month in 1916. As regards number, there is a substantial decrease as contrasted with every year back to 1913, when there were 1,190 insolvencies, while the liabilities were smaller than in any March since 1910. Separating these failures into Federal reserve districts shows that aside from the ninth and eleventh, where the numbers increased 4 and 10, respectively, there was marked contraction in almost every district, with especial improvement in the first, where there were 60 less defaults; the second, 143; the third, 49; the eighth, 41; and the twelfth, 74, as compared with the same month a year ago. On the other hand, there were five districts show- 375, 000 The foregoing statement shows the aggregate of increased capital for the period of the banks embraced in statement was 5,425,000 Against this there was a reduction of capital owing to liquidations (other than for consolidation with other national banks) and reductions of capital of 375,000 Net increase 5, 050,000 In addition to the changes noted above, ono bank, with a capital of $25,000, was placed in the hands of a receiver during this period. National-Bank Examinations. The following letter, regarding payment for national-bank examinations, was sent to Federal Reserve Banks and agents on April 26: The Comptroller of the Currency has instructed all national-bank examiners to leave with each national bank upon the completion of its examination, a bill covering its assessment for the examination, with instructions that the national banks deposit with the Federal Reserve Bank of their district, in the name MAY 1, 1917. 375 FEDERAL RESERVE BULLETIN. living. The Swiss Bankverein, in its " Financial and Commercial Review for 1916," which is even more interesting than usual, with its survey of war conditions, gives a table setting forth as follows the increase in the gold holdings and paper circulations of the chief warring powers between the end of June, 1914, and the end of December, 1916: ing gains in liabilities, the first approximately $603,000; the second, $2,039,000; the fourth, $451,000; the fifth, $26,000; and the seventh, $752,000. The most favorable exhibit in respect to liabilities was made by the sixth district, with a falling off of $877,000, though very favorable comparisons were also made by the third, with a decrease of $656,000; the tenth, $503,000; the eleventh, $493,000; and the twelfth, $489,000. The figures for two years are compared below: Gold. Month of Marcli. ; Number. Liabilities. Districts. '•• 1 9 1 7 First Second. Third Fourth Fifth Sixth Seventh Eighth Ninth Tenth Eleventh Twelfth • I; nited States 102 175 54 93 98 138 194 80 56 42 80 120 1,232 | 1917 1916 , 1910 162 $1,729,943 81,126,319 318 5,801,781 ! 3,762,231 103 398,014 1,054,934 126 1,307,390 : 856,829 113 916,299 : 890,399 167 1,315,107 2,192,100 195 2,009,431 . 1.857,144 121 462,190 ' 738,291 52 430,678 476,213 69 392,014 905,785 70 310,418 803,714 194 3,732,831 2,221,336 1,690 17,406,096 16,885,295 Fiduciary Powers. The application of the following bank for permission to act under section 11 (k) of the Federal Reserve Act has been approved since the issue of the April Bulletin: DISTRICT N O . 2. Registrar of stocks and bonds: Atlantic National Bank, New York, N. Y. The Progress of Inflation.1 We have frequently called attention to the extent of the inflation that has been produced in this country and all over the world by the multiplication, during the course of the war, of legal-tender paper money and banking credits, and the effect of this inflation in helping to increase the rise in. prices which is adding so enormously to the cost of the war and to the cost of 1 From the London Economist, Mar. 10,1917, p. 464. !! Great Britain France ! Italy ! Russia i Japan : Germany ! Austria-Hungary.. 42,719 40,730 i 12,897 184,678 11,006 60,716 Total.. 327,552 j 1 Per cent. 106.6 25.1 i 26.3 104.0 53.0 93.0 160,036 425,107 90,112 695,834 16,278 432,404 ! 183,119 ' 57.6 2,002,890 544. G 175.6 144.6 426.0 49.7 359.3 189.0 268.0 Decrease. It should bo noted that the figures given for Great Britain include the gold held and the paper issued under our new system of currency notes. According to this table, we hold a position of eminence as having worked the printing press relatively harder than any other belligerent. We think that this comparison does us an injustice, because in our case a large part of the paper issued has taken the place of gold that was in circulation or held by the banks other than the Bank of England. In the old days most people with an income at or above a certain level carried a few sovereigns in their pockets. Now they carry paper. So that the actual net increase of currency by note issue has been, we believe, relatively less in our case than this table implies. Nevertheless, when all allowance is made for this consideration, the fact remains that the Government has by its note issue increased considerably the amount of legal tender available. But besides the note issue our banking development gives us other means. We can also produce currency, in the shape of the right to draw a check by banking book entries. The Bank of England's note issue, which has only risen pan passu with its holding of gold. -i* 378 FEDERAL RESERVE BULLETIN. included in the above figures; but its banking department has also been busy. In the same period—end June, 1914, to end December, 1916—we find that this department's figures have altered as follows: MAY .3, 1917. up, and that the pound sterling should bo depreciated when measured in the currencies of foreign countries. As we all know, prices have risen enormously, and all the neutral exchanges are strongly against us. It is surely safe to suspect that our currency policy has had July ly 1914. Capital and rest £17, 810,000 | something to do with both these unfavorable Deposits 71,622,000 results. One does not usually improve the Securities 60, 698,000 value of a thing by multiplying its volume, and Reserve 28, 748,000 when we see the value of the pound lower, | whether measured by its buying power over Dec. 27, 1916. Capital and rest 17, 863,000 commodities or by its exchange value, its Deposits 178,843,000 multiplication surely becomes questionable. Securities 163, 649,000 Mr. Robert Benson traversed this argument in Reserve... 33,079,000 the course of his interesting speech at the MerHere we see a round 100 millions added to chants7 Trust meeting on March 2. He the Bank of England's holding of securities thinks that "the effect upon prices of variations and a consequent increase of 100 millions in the in the supply of credit lias become more and " deposits," book entries which can either be more negligible/7 and he quoted as an answer drawn against by the Government or considered to the theory that an increase in the supply as "cash" by the other banks. of money or credit raises the price of goods, a The other British banks have also "done saying by a professor of political economy at their bit," though on a relatively modest scale. Oxford, that "goods and services are not By subscribing in the first two war loans and really exchanged for pounds sterling, but for other Government securities they have in- other goods and services/7 This is quite true creased their holding of investments by over in most cases, but money is still the measure 230 millions between the end of 1913 and the in each exchange, and a multiplication of the end of 1916, while, thanks to the flood of new measuring units has an unfortunate effect on cash created for them by the Bank of England those whose incomes for one reason or another and the Government, their cash on hand, at has not kept pace with the increase in their call, and at short notice has risen by over 130 volume. millions in the same period. On the other side It also has a most unfortunate effect on the of the account their deposits, representing finances of the Government which borrows potential currency in the hands of their cus- money and spends it at a time when it is decustomers, rose by over 330 millions. We preciated, and will pay interest on it and repay take these figures, which are partly estimated, it in time to come, when we hope that its buying from Mr. Drummond Fraser's interesting pam- power will have achieved some recovery. This phlet on "Finance after the War" (Herald and being so, we can not agree with Mr. Benson's Walker, Manchester). We shall not be sur- evident regret concerning the failure of a proprised if, when the complete figures are shown posal that the trust companies should subscribe in our Banking Number that will appear (if for 100,000,000 of war loans, borrowing we have enough paper) in May, the increase in 80,000,000 from the banks. There could have the bank deposits is shown to be even greater. been no question of their paying the banks off Here, then, is an enormous mass of new cur- out of any savings of their own; and the operrency, in the form of legal tender and banking ation would have simply resulted in a further credit, that has been created at a time when it increase in inflation. We can not find goods is most undesirable that prices should be forced and services needed for the war by manufac- MAY l. 11)17. FEDERAL RESERVE BULLETIN. turing credits, but only by saving, and so going without goods and services, which are thereby placed at the disposal of the Government. Hence it is that every one who has borrowed from his bank to take up war loan will have done his country no real good until he has saved the sum borrowed and paid off his advance from his bank. But inflation is always attractive; it seems so simple to pay for things by just manufacturing more money. Hence we hear of various schemes afloat for issues of interest-bearing certificates that could also be used as currency. We sincerely hope that such schemes will be pitched straight into the wastepaper basket. What we want is not more currency, but less. What we want more of is work and stuff. We believe that inflation has already done much harm by raising discontent in the country and increasing the cost of the war, owing to the rise in prices that it has helped to cause and that everything should be done to check it. We can not see why the issue of Treasury notes should be allowed to grow without limit. It was created to meet a banking emergency, and was to be taken out in the form of a loan by the banks. Now it is handed out, apparently, ad libitum to any bank which pays for it out of its balance at the Bank of England. It is time that the system was overhauled and modified. The volume of notes outstanding has decreased lately, probably owing to war-loan payments, and we see no reason why it should be allowed to swell again. It is sometimes maintained that higher prices demand a continuing increase in the supply of currency; but what if the increase in the supply of currency is the 377 cause of the rise in prices ? It is also desirable that the manufacture of credit by the Bank of England should be set in motion as little as possible, and that its bloated holding of securities should be gradually reduced. If the war is to be soundly financed, the Government should aim at getting money out of the pockets of the citizens before it spends it, instead of taking the easy line of using banking credits, and so putting up prices against itself and everybody else. These measures, if adopted, with the gradual caution that all economic changes require, need produce no return of stringency. In fact, as we have frequently urged, such stringency as has been artificially created by special measures was only necessitated because no attempt was made to divorce the prices of home and foreign money. Since the desirability of this change is now being much discussed, it is perhaps opportune to point out that to pay one rate to neutrals and another to home lenders, is a thing that can only be done in time of war, when exceptional knowledge of monetary movements is in the hands of the Government, or those who represent it in the city, that it would, if started earlier, have saved us many millions a year in our after-war debt charge; but that it would not, of course, be desirable to leave the price of home money unregulated and uncontrolled, or to allow its lowering to be made the basis of speculation in securities. If it gave cheaper money to the Government for the war, and to the exporter and the grower and producer of necessaries, it would be a highly beneficent measure. 378 FEDERAL RESERVE BULLETIN. MAY 1, 1917. INFORMAL RULINGS OF THE BOARD. Below are reproduced letters sent out from proved for several manufacturing concerns and time to time over the signatures of the officers which may be of interest to you in adopting or members of the Federal Reserve Board a form for general use in your district. APRIL 19, 1917. which contain information believed to be of [Enclosure.] general interest to Federal Reserve Banks and X. Y. Z. Co. member banks of the system: Paper for Rediscount. [To an individual.] No BlNGHAMTON, N . Y., ,191 after date pay to the order of ourselves Your letter of April 12, addressed to the SecDollars in settlement of the purchase oi' retary of the Treasury, has been referred to the goods as billed in our invoice No dated Federal Reserve Board for consideration. Goods received. Section 13 of the Federal Reserve Act proX.Y.Z.CO. vides that a bill, in order to be eligible for redisBy count by a Federal Reserve Bank, must have I To Cashier. a maturity at the time of discount of not more than 90 days. The Federal Reserve Board has, therefore, ruled that a demand note or bill is not eligible under the provisions of the act, Acceptances. (To a Federal Reserve Bank.) since it is not in terms payable within the pre- | Your letter of March 20, submitting an scribed 90 days, but, at the option of the inquiry of one of your member banks as to holder, may not be presented for payment until after that time. The trade acceptance sub-1 whether or not it could accept clean drafts mitted by you would very probably be con-! drawn by an exporter in Chile for the purpose strued by the courts to be a demand bill, since j of providing funds with which to purchase no definite maturity is fixed. It merely states j beans, peas, etc., from farmers in Chile, has that '-in the ordinary course of business pre- been received and considered. In reply you are advised that unless the sentment will.be made 60 days from date," but the holder is not required to present it Chilean exporter is under contract to ship the peas, beans, etc., purchased from the farmers within that time. If the bill were altered so as to read "on or in that country, to some other country, and the before 60 days from date pay to the order of member bank has a guarantee to this effect, the ourselves," etc., it would come within the transaction would not seem to be one which terms of the law and would be eligible for redis- involves the importation or exportation^ of count. In such case the holder would have the goods. The mere fact that the Chilean exporter inright to present it for payment before the expiration of 60 days, but could not defer present- tends to sell these goods in a foreign country ment until after that time without releasing would not be sufficient, but there must exist some actual contract of sale, and it must appear the indorsers. that the drafts in question are merely drawn in There may be some doubt about the corrcet- advance the actual shipment of goods under, ness of the statement in your form that the contract of of sale. obligation of the acceptor arises out of the pur- | MARCH 24, 1917. chase of goods if it is intended to have that acceptance cover future purchases. It is not clear from your letter whether this is intended. Cattle Paper. (To a member of Congress.) The bill, in order to be a trade acceptance, must arise out of the purchase of goods, and I have your letter of the 3d instant, and unless that purchase is either consummated or would state that in two of the Federal Keserve actually contracted for at the time the bill is districts—Kansas City and Dallas—a considdrawn it is doubtful whether you can properly erable business is being done in loans to farmers say that the obligation arises out of the pur- running six months, secured by chattel mortchase of goods. gages on cattle. Under the Federal Reserve I am inclosing for your information a form of Act, a loan made by a member bank in good acceptance which the board has already ap- faith to a farmer, for the purpose of assisting MAY 1,1917. him to produce a crop, or to fatten his cattle, would be eligible for discount by a Federal Reserve Bank whether secured by a mortgage or not, but most of the farmers' notes which have been discounted with Federal Reserve Banks for member banks are secured by chattel mortgages. In Texas, Oklahoma, and Kansas this business is done on a large scale, and is thoroughly understood, and 1 would suggest that if any banks in your district are interested in extending credits of this kind, it might be well for them to correspond with the Federal Reserve Bank at Kansas City, or the Federal Reserve Bank at Dallas, for information as to details. The Board is informed that many of the member banks in the three States named regard cattle paper properly secured as being as desirable an investment as they can make, and the Federal Reserve Banks do not hesitate to rediscount such paper freely for them. APRIL 4, 379 FEDERAL RESERVE BULLETIN. 1917. Place of Payment of Acceptance. (To a Federal Reserve Bank.) In reply to yours of April 9, I am inclosing copy of the Federal Reserve Bulletin for April, 1917, on pages 289-290 of which you will find an opinion of counsel, approved by the Board, which deals with the subject under consideration. You ask whether a bank in accepting a draft of its customer may make it payable eisewnere than at its banking house. Under the opinion referred to it would seem that the drawer of the draft might make it payable either at the bank against which it is drawn or at some other place, and, when accepted, it would be payable according to its terms, namely, either at the banking house of the drawee or at the other designated place. If the terms of the original draft make it payable at the banking house of the drawee the drawee may nevertheless accept it payable elsewhere—as, for example, at a Federal Reserve Bank—provided the acceptance does not stipulate in terms that it is payable only at the Federal Reserve Bank and not eisewnere. opinion received by me to-day from counsel, which is self-explanatory. (Inclosure.) In the attached letter the managing director of the New Orleans branch of the Federal Reserve Bank of Atlanta has asked whether the funds of the farm loan bank about to be established at New Orleans will be deposited with the New Orleans branch of the Federal Reserve Bank of Atlanta. Federal Reserve Banks are not authorized by the Federal Reserve Act to receive deposits except from the United States Government and from member banks, and I find no provision in the farm loan act authorizing farm loan banks to make deposits in Federal Reserve Banks. The only provision on this subject appears to be in subsection 5 of section 13 of the farm loan act. Section 13 defines the powers of Federal land banks, and among these is that contained in section 5 which reads "to deposit its securities and its current funds . subject to check with any member bank of the Federal Reserve System and receive interest on the same as may be agreed.77 Under the circumstances, I am of the opinion that it would require a somewhat forced construction of the act to reach the conclusion that farm loan banks may deposit their funds with Federal Reserve Banks. APRIL 6, 1917. Paper of Equity Exchange. (To an individual.) The letter addressed to you by Mr. , and forwarded by you to the Federal Reserve Board, has been duly considered, and I am directed to. inform you that paper of these equity exchanges, to which the writer refers, if first discounted by a member bank would be in form eligible for rediscount at the Federal Reserve Bank, provided its maturity at the time of discount does not exceed 90 days. Furthermore, if the loan were made by the member bank at 6 per cent or less such paper could be rediscounted with the Federal Reserve Bank as commodity paper, provided that it is properly secured. The writer seems to be under the impression APRIL 11, 1917. that these equity exchanges can deal directly with their Federal Reserve Bank, but under the Farm Loan Bank Deposits. Federal Reserve Act their paper must first (To a Federal Reserve Bank.) have been discounted with a member bank and Referring to your letter of the 19th ultimo, the member bank alone would have the right with reference to the deposit of funds of the to rediscount this paper with the Federal New Orleans Farm Loan Bank with your Reserve Bank. MARCH 7. 1917. institution, 1 hand you herewith copy of an 380 FEDERAL RESERVE BULLETIN. MAI* 1, 1917. LAW DEPARTMENT. The following opinion of counsel has been Where the purchaser of goods draws upon authorized for publication by the Board since his own bank and offers a bill of lading as security for the draft, he may or may not use the last edition of the Bulletin: the proceeds derived from the draft to pay for Domestic Bankers' Acceptances. the goods bought. The bank, in that case, A draft drawn by the purchaser of goods against a nacould not assume that there was any obligational bank is not eligible for acceptance by that bank tion on the part of the buyer to use such funds under the provisions of section 13 of the Federal Reserve Act merely because it is secured by a bill of lading cover- to liquidate the debt contracted in the puring the goods bought. chase of the goods. The transaction, in substance, is merely a straight loan to the drawer A P R I L 21, 1917. SIB: The following case has been submitted secured by a bill of lading, and as such it to this office for an opinion: The seller ships would not seem to come within the spirit of goods which have been sold and mails the bill the provisions of section 13 authorizing naof lading to the purchaser. On arrival of the tional banks to accept drafts which grow out bill of lading the purchaser draws on his own of the domestic shipment of goods. bank, attaching the bill of lading to the draft Congress evidently intended to prevent the as security and offers it for acceptance. May possibility of abuse of the domestic acceptance the bank execute such an acceptance ? privilege by requiring not merely that the Section 13 of the Federal Reserve Act, as draft should grow out of a transaction involvamended by the Act of September 7, 1916, au- ing the domestic shipment of goods, but also thorizes any member bank to accept drafts or that the bill of lading should be attached. It bills of exchange "which grow out of transac- could not have been contemplated that this tions involving the domestic shipment of goods, privilege should be construed to permit anyprovided shipping documents conveying or se- one possessing a bill of lading to borrow on its curing title are attached at the time of accept- security regardless of the use to which the proceeds of the draft might be put. Ordinarily ance." The question presented for determination the seller in a domestic transaction draws therefore, is whether the sole fact that the bill either on the purchaser or on the purchaser's of lading is the collateral security for the draft bank. In either case the seller is assured of presented for acceptance is sufficient to make the proceeds of the draft, but it could not have the transaction comply with the requirement been intended by the Act that the purchasery that the draft must grow out of a transaction on receipt of a bill of lading, should be able to use that bill as the basis of a domestic bankinvolving a shipment of goods. It is evident that this provision of the law er's acceptance to obtain a credit for any purcontemplated some actual connection between pose he may see fit to use it, Respectfully, the acceptance of the draft and the transaction involving the sale and shipment of the goods— M. C. ELLIOTT, Counsel. that is, it was evidently intended that the draft To Hon. W. P. G. HARDING, should be drawn to finance that transaction. Governor Federal Reserve Board. 381 FEDEBAI. EESERVE BULLETIN. MAY 1,1917, SUMMARY OF BUSINESS CONDITIONS APR. 23, 1917. District No. 2— New York. District No. IBoston. General business Crops: Condition Outlook Good District No. 3— Philadelphia. j Active; r i s i n g prices creating increased volume. Larger areas being planted. Very good Backward Hopeful Fair Fair Industries of the dis- ; ".Busy.. trict. i Construction, building and engineering. Foreign trade Bank clearings Money rates Railroad, post office, and other receipts. I^abor conditions Outlook Remarks. Active District No. 8— St. Louis. Very active. Bank clearings. Money rates Increase over last eai m. Outlook.. Favorable but uncertain. Remarks. High prices are affecting sales in some lines, but general business reports satisfactory condition. Favorable • On the whole, favorable. j Some irregularity owing to specific conditions; generally satisfactory. ! Decreased cotton a c r e a g e ; increased f o o ds tuffs. DistrictNo.il— ! District No. 1 2 Dallas. J San Francisco. Good... i Backward j Fair. Active. i Active and pros- Active and run- \ Active, perous. ning on full time.! Active. Increased volume. Building a c t i v e j Slight decrease. and normal for ! the season. ' Limited.. Increase over a j Exports increase; year ago. imports decrease. Substantial In- Show a 29 per cent Increase over last crease. increase. ; year. ; Steady, *rtth indi- No change over 30 Steady. c a t i o n s of days ago; easy. strengthening. Increased volume. Railroad good in- Increasing. crease over 191G: post office, 15 per cent increase. Shortage apparent. Labor well em- Fairly settled; supployed; exporply deficient. tation of unskilled men to the North seriously felt hereSatisfactory, ex- Bright Favorable. cept for wheat crop. I Rains are becom- Campaign for in- j Prospects for only ing general and c r e a s e d food • —--••m o d e r a t e procrop prospects crops sure to be duction of food are much imeffective, and is stuffs this year. proved. meeting an unselfish response on part of farmers. Increased Fair to good.. ; Continued de- Normal. mand for crop purposes. | Normal; railroad | Good, expenses show | increase, with i tendency to re- | duction of net. j Fully employed... Scarcity of labor. j Active. Steady Shortage of labor.. Fairly settled Con g c s t i o n at Small. ports; but exports in good volume. Continue to show Increasing. slight increase. ! Improved I Oniyfair Increased. Labor conditions Limited. ! Continues active.. Good Commercial paper higher. Bank rates steady. Increase Increase over last year; decrease from last month. District No. 10— Kansas City. Good volume Active Increase Railroad, post office, and other receipts. District No. 6— Atlanta. I Much improved...] Rather backward.j Work behind. — ! Promising ! Full p l a n t i n g ; | Limited planting. i I fruit reported j ! riamctfxnrl damaged. Running to capa- Active; labor Working full; labor city, with labor I demand. shortage. shortage. District No. 9— Minneapolis. Winter wheat poor Other crops have Fair a favorable prospect. Industries of the dis- Volume of busi- Busy... ness well maintrict. tained. Retarded, due to Decrease in some Construction, buildlines. cost of construcing and engineering. tion. Foreign trade... District No. f>Richmond. ; Active and pros- i Some irregularity, j Extremely good. I: perous. , but holding up j j well. i A c t i v c ; c o m - Very busy plaints of scarcity and high cost of labor and materials. Smaller than last Decrease i Satisfactory; inSlight; doorcase year. I j creases in home from last year. | ! construction. Increased o v e r Imports active; 50 ; Heavy decrease in : exports c o m per cent over last year. ! pared to preFebruary. i th vious month. : Increasing Increase over last j Increase Substantial i n year. Decrease crease. from last month, i Strengthening | Steady Firmer; commcr- I Firm and tendcial paper rate i ency to increase. increasing. } P. O. receipts, I Net Decreased, of | 'Slight increase slight increase; i r a i learnings r o a d s deR. K. receipts, < creasing; P. O. ;j marked i n - , receipts increas- ! crease. i ing. i Fully employed... Labor s c a r c e ; ! Scarcity in many : Generally good wages rising. j Sines. : ,; Satisfactory. For more normal Continuation of j Good present condi- i conditions. tions, with ris- ! ing prices. ; Business awaiting | No impediments more definite inexcept lack of formation readequate labor garding war and and car shortGovernment age. needs. District No. 7— Chicago. General business.. Crops: Condition Outlook District No. 4— Cleveland. Very good., | Generally good I 382 FEDERAL RESERVE BULLETIN. MAY 1. 191T. GENERAL BUSINESS CONDITIONS. There is given on the preceding page a sum- factor in costs of production. That economy mary of business conditions in the United is being practiced is becoming more evident States by Federal Reserve districts. The re- each day, the increase in the cost of living, all ports are furnished by the Federal Reserve out of proportion to the average increase in Agents, who are the chairmen of the boards of wages, making such action necessary. directors for the Reserve Banks of the several There has been no sign of financial disturbdistricts. Below are the detailed reports as of ance of any kind in this district, but all the approximately April 23: banks are keeping their assets as liquid as possible as a precautionary measure and in anDISTRICT NO. I—BOSTON. ticipation of the coming Government financing. The declaration of war and the uncertainty During the past month wool dealers in regarding the nature of the participation by Boston suspended business for about 10 days the United States and its effect on our domestic in order that the wool held by them might be life have pervaded the whole commercial and offered to the Government if needed. An financial atmosphere. While preparedness and inventory of the wool held by the trade as of safety committees have sprung up on every April 3 showed an estimated total of clean hand it seems probable that as the first shock wool of approximately 60,000,000 pounds. As of war wears off conditions will return to more the Government was unable to take advantage nearly normal. of the offer, trading was resumed and prices Meantime prices of commodities continue continued to advance, this in spite of the fact to rise and evidences of the hoarding of food that wool on hand as disclosed by the invensupplies are on every hand, many householders tory showed a considerably larger stock than stocking up with large amounts of flour, sugar, most dealers had estimated. The future course canned goods, etc. Reports in the press of a of wool prices is a matter of considerable coming food shortage have served to aggravate difference of opinion in the trade. The principal arguments against extremely high prices this situation. Farmers are planting larger areas than ever are the possibility of the release of a large before, and even in the cities vacant land is amount of Australian wool by England or the being cultivated. It is yet too early to know making of an early peace. Woolen and anything definite regarding crop prospects in worsted mills continue busy, the sold-up conthis district. The steady cold of the winter, dition of the woolen mills being reflected in with no very severe temperatures, has probably the worsted situation. The boot and shoe industry continues busy, allowed most fruits to come through in fair condition. Pastures went into the winter with and some orders for Government shoes have a good growth for protection, and the late been booked. Production costs, however, are snows will probably help toward a good start. very high and a number of factories in Lynn There is a general shortage of seed which, taken have closed, stating that with the present in conjunction with the severe shortage of scarcity and high price of leather it was imfarm labor and with unsatisfactory fertilizer, possible to operate at a profit. Orders for tends to restrict the large increase in acreage men's shoes are not coming in as briskly as lastwhich the high prices of food would otherwise year, due to the fact that many retailers overstocked at that time aijd that high prices are cause. The shortage in coal and the rise in price of tending to restrict buying by the consumer. that commodity has become an important Orders for ladies7 shoes are coming in satisfac* MAY 1, 191.7. FEDERAL RESERVE BULLETIN. torily. Style influences this businessfcoa large extent, and retailers only buy for their current needs, not stocking up in advance. Leather of all kinds continues in good demand with prices high. Collections are reported to be good. Cotton mills continue extremely busy -with orders, in many cases booked through the summer and in some mills even, until late iali. The high cost of production, especially the cost of cotton, coal, and labor, is causing prices to advance, but, notwithstanding this fact, buyers are anxious to place orders. G-overnmoat agents are reported to be buying various cloths for military purposes, such as low count goods for bandages and marquisettes for mosquito netting. A shortage of labor is looked for, due to war enlistments, and there is some anxiety oi.« the part of buyers as to the fate of their orders in case the mill machinery is Deeded for Government work. The money market is considerably firmer than last month, especially for longer dates, arid Boston banks are buying only a limited amount of outside paper and then only at attractive rates. Most banks are not adverse to going as long of cash as possible at this time with the possibility of large demands from their customers in connection with Government needs. Call money 3J to 4 per cent; time money 4J to 5 per cent for six months, 4f per cent upward for one year. Town notes, 4 per cent upward for fall maturities. Bankers' acceptances, 3 per cent upward. Loans and discounts on April 14, 1917, amounted to $463,184,000, as compared with $465,298,000 last month, and $410,745,000 on April 15, 1916. Deposits on April 14, 1917, totaled $364,406,000, as compared with $371,143,000 on March 17, 1917, and $340,159,000 on April 15, 1916. The amount "Due to banks" on April 14 was $147,630,000, as compared with 3146,369,000 on March 17. The excess reserve of these banks increased from $40,293,000 on March 17 to 140,428,000 on April 14. Exchanges of the Boston Clearing House for the week ending April 14. 1917, were $227,- 383 048,842, as compared with $219,284,696 for the corresponding week last year, and $277,025,268 for the week ending April 7, 1917. Building and engineering operations in New England from January 1 to April 11, 1917, amounted to $45,387,000, as compared with §46,892,000 for the corresponding period, of 1916, the highest previous year recorded. Exports from the port of Boston for March, 1917. amounted to $19,707,013, as compared with 822,390.613 for February, 1917." and $11,506,025 for March, 1916. Imports amounted to $24,816,006, as compared with $21,743,471 for February, 1917, and $21,451,229 for March, 1916. The receipts of the Boston post office for March, 1917, show an increase of $48,431.79, or about 6 per cent more than March, 1916. For the first 15 days of April, 1917, receipts wore about 2 per cent, or §8,581.92, less than for the corresponding period last year. Boston & Maine Railroad reports net operating income, after taxes, for February, 1917, as 5413,733, as compared with $1,044,122 for the corresponding month of 1916. New York, New Haven & Hartford Railroad reports net operating income, after taxes, for February, 1917, as $1,009,015, as compared with $1,198,374 for the same month last year, DISTRICT NO. 2—NEW YORK. The outstanding developments resulting from our entrance into the war have been the very keen interest on the part of banks and bankers, particularly those in New York City, in the prospective sale of Government bonds and Treasury notes, determined efforts throughout the entire district to increase the food supply, and a speeding up of many branches of industry as a result of Government buying. In lines which are not directly affected by war preparations conditions do not appear to have been greatly altered, although in some quarters a feeling of conservatism is in evidence. Government purchases, which have received precedence over all others, have been at prices much below those paid by other buyers, the action of 384 FEDERAL RESERVE BULLETIN. copper producers in contracting to deliver copper below the market price having been followed by steel companies and food jobbers. Banks and bankers are offering their services without compensation in connection with subscriptions to the loan. Evidence of the spirit of the New York banks and bankers was shown by tentative subscriptions of over $100,000,000 to the first offering of Treasury notes due June 30. Much corporate financing has been deferred to avoid interference with the Government's issue. Security prices have been somewhat weakened by uncertainties as to the new issues, and also by the possibility that State and municipal bonds, hitherto tax exempt, may be subjected to Federal income tax. Particular attention is being directed to the production of an increased food supply, as the relatively small stocks of foodstuffs which are reported from various sources and the unsatisfactory condition of the winter wheat crop make prompt and vigorous measures along this line essential. In New York State plans fostered by State and city officials are going forward to organize corps of "farm cadets" to assist in planting and to have city employees spend their vacations doing farm work. The development of home gardens is also receiving attention. Prices continue to rise. Dun's index number for wholesale commodity prices for April 1 was $190,012, which represents a net gain of 2 per cent over March 1 and contrasts with $145,690 on April 1, 1916. The increase since the beginning of the war has been 57 per cent. The Annalist index number for the cost of living for the third week in April was.270 as against 240 a month previous and 155 two years ago. From every side come reports of scarcity of labor and of increased wages. Wages paid to workers in New York State industries in March were 5 per cent greater than those paid in February, the number of employees having increased but 1 per cent, while as compared with March of a year ago there was an increase MAY 1, 1917, of 9 per cent in number of employees and 23 per cent in the aggregate of wages. Similar comparison with March two years ago shows increases of 30 per cent and 62 per cent, respectively. Kailroad gross earnings show an increase of about 10 per cent over those of a year ago, but increased expenses threaten serious impairment of net earnings. Substantial improvement in manufacturing conditions in the iron and steel industry has come at an opportune time and the advent of war finds the industry thoroughly prepared. Better transportation facilities and a more normal supply of coke have resulted in a considerable increase in pig-iron production. The total, in March, amounted to 3,250,757 tons, an increase of 605,510 tons over the previous month's output. Coal production and deliveries have improved somewhat, but increased demands are expected during the coming year with little prospect of larger output. Manufacturers of machinery report a volume of business in excess of that of a year ago and at satisfactory prices. There is an immense demand for electrical machinery for industrial plants and an unusually heavy demand for larger power apparatus for the equipment of central stations furnishing electricity. The machine tool trade is very active. Reports indicate that business is being secured more uniformly from the entire country and the total is made up of a large number of satisfactory small transactions with the regular consuming trade rather than special contracts as in past years. In the rubber trade the demand for footwear and tires has been very large and the volume of business in the mechanical rubber goods is from 20 per cent to 25 per cent over that of last year. Textile and clothing industries report business as steady and in some cases increasing in value of transactions. Shortage of labor in eastern cotton mills has caused curtailment of production estimated at 10 per cent to 35 per cent, and cotton goods stocks in the hands of MAY 1,1917. FEDERAL KESEBVE BULLETIN. 385 the mills are lower than at any time since the Foreign commerce has recovered from the low point in February, the imports at New beginning of the war. In the dry-goods trade the appeal for j York during March being $50,000,000 greater economy in dress is having an increasing in- j than those for February and almost $32,000,000 fluence on retail sales. Stocks on hand are j greater than those of a year ago, while exports low. An auction sale by a large rug and carpet ] were §34,500,000 greater than those for Februmanufacturing company in New York brought j ary. Particularly heavy increases appear in such, low bids that the company has announced | imports from countries of North and South it will reduce the output of its mills by one-half, j America. Dealings in hides are active at increasing ! The following statistics have been obtained prices. Orders from retailers for footwear are ! from reliable sources: slow, retailers reporting quiet trade due to efforts toward economy. ! Changes from Mardl 1917 » - March, 1916. The prices of stocks on the New York: Stock Exchange have declined during the ! Bank clearings, New York City 514,229,127,260 SI,681,252,750 York Stock Exchange shares.. • 18,516,944 + 5,202,569 month to about the level of two months ago New New York Stock Exchange bonds.. •' $73,297,000 - §3,998,000 Pig-iron production tons.. • 3,260,757 86,934 and bond prices have fallen to the lowest point 'i, Unfilled orders, United States Steel Corporation tons..; 11,711,644 4- 2,380,643 since October, 1915. Bond sales from March I Building permits. New York City ; §12,353,422 - 81,302,650 receipts, New York City : S3,387,047 •f- $280,123 25 to April 21 were $87,977,500 and stock I: Postal Merchandise exports at New York : §258,020,108 +825,291,200 Merchandise imports at New York ! §147,901,883 +831,707,922 sales 18,736,413 shares, an increase of !i New incorporations, Eastern States > 6281,000,000 +§86,250,000 $6,861,850 and 7,829,267 shares, respectively, : American railroads ana industrial ! over the same period a year ago. corporations ; $312,115,800 +337,468,000 Call and time money rates have been steady during April with a slight upward tendency. D I S T E I C T N a 3-PHILABELPHIA. Call rates on April 25 touched 4 per cent T of the ITnited States into the but closed at 24 per cent. Commercial paper w a r-™] i a ontranco s caused advances in prices, greater rates advanced from 4-44 on March 31 to 5 p l demand for goods, and greater scarcity in 4J-5 on April 25. Between March 17 and April 20 deposits of ; materials in many lines of trade. ManufacturNew York clearing house banks show increases | ing plants throughout this district are running of $7O7OOO>OOO in net deposits, $110,000,000 in j as fully as the supply of labor and materials loans, and a decrease of $25,000,000 in excess | will permit. The problem of deliveries in reserves, the amount of the excess on the | many cases has been very annoying because of latter date being $120,000,000. Fifteen banks the limitation of output and troublesome transwhich are members of the New York Clear- portation conditions. The labor situation has become very acute. ing House Association and also of the FedIt hampers not only the manufacturers, who are eral Reserve System have arranged with the Federal Reserve Bank of New York to receive j under the necessity of turning out iron and or pay on their behalf the amount of their steel, ammunition, clothing, textiles, and other daily balances at the clearing house. There products in greater quantity than ever before, has been continued demand for large quantities j but it is also greatly retarding the basic inof paper currency in the district, and the Federal jdustries, such as agriculture and mining. Reserve Bank of New York increased its circu-! The condition of the winter-wheat crop, lation by $34,500,000 between March 21 and • according to local and Government reports, April 20, against which a similar amount of j is at least 15 per cent below normal. The gold has been lodged with the Federal Reserve season is late and spring plowing and planting agent. has been delayed. Farmers report less stock 386 FEDERAL RESERVE BULLETIN. MAY 1, 1917. on the farm than for many years, and all kinds tremely good, in some instances sales being the largest of any March in their history, but since of feed except hay are scarce and high. Reports show that there is a patriotic desire Easter, trade has fallen off very much, and on the part of the people in the agricultural there is a feeling that this is largely due to the sections to do their full duty toward producing practicing of economy on the part of the public, the maximum amount of foodstuffs and there which has been so earnestly recommended. Is evidence that they intend to make the effort, Groceries.—The wholesale grocery trade is but on account of the high price and scarcity having difficulty because of excess demand for of fertilizers, the high price of seed, and the goods. Consumers have been anticipating scarcity and high wages of labor, it appears their needs hj making unusually large purthat the acreage planted to food crops can not chases. Wholesalers generally are adopting be materially increased. the policy of scaling orders in accordance with Some large coal companies are offering their the size of the retailer and his actual need. lands to their employees for cultivation, and There is said to be plenty of goods to go round are holding out inducements toward this end, if it were not for so much anticipation. and throughout the district generally the Metal industries,—The fundamental condiattempt is being made to have people put forth tions in these industries remain unchanged. extra efforts in planting vegetable gardens for The continued high price of coal is having a their own account. marked effect upon the cost of iron and steel Owing to enlistments, the transfer of labor production. The national situation is causing from the farming and suburban districts to many companies to refuse general orders, as the much more lucrative employment in muni- preference is being given to Government tion and other manufacturing plants, and the inquiries. action of local contractors in paying S3 and Money.—Rates for money in the active $3.25 per day for men, the farm labor shortage manufacturing districts are somewhat better; has become so acute that unless some national throughout the rest of the district the demand organized effort is made at once to provide for money is only normal. The imminent prosagricultural labor, it not only-will be impossible pect of large Government borrowings is causto increase the acreage under cultivation, but ing hesitation in the investment of funds. there is grave doubt whether or not it will be Sales of all kinds of securities have fallen off and possible to cultivate and harvest an acreage prices have declined. equal to that of last year. Financial indicators. Canning.—Ganners have disposed of most of their old pack and prices have been advancing. Previous Previous Apr. 20,1917. In one section, canners are reported as offering month. year. $13.50 a ton for tomatoes, which is $3.30 more o a n s—P h i ladelphia than last year, and farmers are slow to con- L banks $550,714,000 $553,267,000 §504,361,000 tract at that price. Unless the price is higher, Deposits —Philadelphia I banks ! 688,213,000 664,257,000 625,197,000 the acreage to be planted in tomatoes will, of Surplus reserve—Phila- ! delphia banks ! 37,061,000 29,572,000 42,740,000 necessity, be much less than last year because Discounts and collateral ! l o a n s—F e d e r a 1 I of the shortage in farm help, since tomatoes Reserve Bank I 1,163,000 1,819,000 573,000 have to be picked promptly when they are C aRseh s ereserve—Federal rve Bank, percent 73 76 ripe. A good crop of berries for canning is 90-day discount r a t e Federal Reserve Bank, promised. 4j percent o m m e r c i a l paper, Department store trade.—Department stores C percent 4 report that business during March was ex- MAY 1,1917. FEDEEAL RESERVE BULLETIN. Financial indicators—Continued. 387 to the employment of all available labor at the highest wage ever known, the large supply of March, 1917. \February, 1917. March. 1910. money, and the consequent demand of the wage earner for better living conditions, better Bank clearings in Phila! delphia :31,467,017,000 1*1,251,517,000 81,013,193,000 | grades of food, and the like, causing lessened Bank clearings elsewhere ' j in district ; 97,276,000 I 83,802,000 81.550.000 ! supplies. Total clearings in i j Crops.—-The movement for increased prodistrict i 1,564,293,000 i 1,335.319,000 1.094,748,000 Exports at Philadelphia. i '38,814,000 •: 57', 685,000 ' 15,568,000 duction of foodstuffs has gathered considerable Imports at Philadelphia.; 7,488,000 : 9,042,000 Building permits in i 9,625,000 force, and, in many localities, is being organPhiladelphia I 3,487,000 ; 4,042,000 Post-office receipts in ! 4,591,000 ized in such a way as to insure good results. Philadelphia... ! 911,000 | 764,000 j Csmmercial failures in I 849,000 j Home gardening, use of vacant lots, and indistrict (per Brad- ! street's) ! 61 ! 101 j creased efforts on the part of the farmer are 51 \ being extensively undertaken. By reason of DISTRICT NO. 4—CLEVELAND. i the very high wages demanded by farm hands, | General business in this Federal Reserve dis- and the greatly increased cost of fertilizing trict has improved during the past month. j materials and seeds, the farmer is hesitating The transportation situation is very much to undertake more extensive cultivation, bebetter. Labor conditions in the industries are ! cause he can see that without a minimum as good as possible, in view of the inadequate | guaranteed price for his product he may face supply. The situation could scarcely be better ! a loss. It would be well promptly to give to | the farmers such an assurance as would enable under the circumstances. Bankers report a readiness to lend full sup- | them to make intelligent plans. This is not port to any Government loans, and the brokers j throughout one of the most important agriand investment houses generally promptly I cultural districts, although it has wonderful showed their willingness to assist without I possibilities in many lines. The successful charge in the flotation of securities. When the farmer who counts his costs may not enter into subscriptions are opened the community served the proposed scheme for feeding the world by this Federal Reserve Bank will respond in without some definite knowledge that he will more than its relative proportion. There are | at least be protected in his expenditures for evidences of economy indicative of the desire I excess crops. of people who otherwise would not have Industries.—In general, all of the industries thought of making permanent investments, in this district are in better condition than a looking to subscriptions to the Government month ago. The labor situation has been reloan. Were it not for the present very high lieved by better weather and voluntary adcost of foodstuffs and other articles entering vances in wages in some linos. The transporinto ordinary daily living, the popular response tation facilities for both raw materials and to the Government call would be tremendous. finished goods have greatly improved, although Figures are not available, but it is a fact still below normal and very much less than that the visible supply of foodstuffs throughout the requirements. The Government's entry this district is much below the average, and in into the industrial field for its own needs, some ordinary articles the supply is practically actual and prospective, has upset a good deal exhausted. This necessarily has tended to of domestic business, because nearly all the price advances all along the line, and to-day plants give a Government order precedence the cost of living is so great that a year ago it over all other business, and there is considerawould have been thought prohibitive. The ble evidence that quotations are withheld for whole condition, though, is attributable mainly materials which might be required by tho ! 388 FEDERAL RESERVE BULLETIN. MAY 1, 1917 United Slates. One of our loading industrial cided falling off in retail lines. This is attribpublications makes the following comment on uted to the natural "between seasons77 lull and this condition: to economies instilled by the war. Mercantile- business.—Values and volume of Despite the great inconvenience and actual losses being sustained, consumers universally are meeting the situa- the mercantile trade are steadily increasing. tion in a spirit of broad patriotism and liberality which Collections are good, The percentage of slow greatly has helped producers to make the necessary accounts in the hands of merchants is considreadjustments. erably less than the average and seems to be Iron and steel.—All furnaces, plants and fac- improving. tories are working to the highest capacity Construction.-—Building in the,nine principal possible under the existing conditions as re- cities is now not seriously interrupted by labor gards transportation and labor. Prices of all difficulties, except in ono center, and substantial products have advanced, the advance in a increases in permits and values are reported. number of instances not being sufficient to meet The following table gives the figures: the increased cost of production. Pig iron, for instance, now at $40 a ton seems very exorbiI .Permits Per Valuations. tant, but when it is considered that the cost ! issued. cent increase inof making it has more than doubled over ordior crease •' Mar., : Mar.. ivLar., 1917.1 Mar... 191H.. decrease. or denary times by reason of the very material ! 1017: 1916." crease. increase in the cost of coke, raw materials, and labor, the net profits to the producer are not Akron. Ohio j 527 27") M, 756. 140 So21,713 81,231 234.4 Cincinnati, Ohio : 1.332 1,460 ' 1,227,305 948,500 ! 278 29.4 so great as they appear. The problems of raw Cleveland,' Ohio.! 1,311 1.1 Z\ 1.973.030 1,838,405 ! 134 7.3 Columbus, Ohio 293 '340 '571,245 '808,935 ; 297 i1 34.2 materials for future deliveries are at presen Day ton, Ohio.. 144 115 130'. 327 356.240 I! 1225 63.4 142 Enc.Ta 218,799 103 47.2 85 322,189 very serious in all industrial activities. •140 Pittsburgh. Pa. 131.2 332 1.214,590 1.767.612 I 1553. 882 Toledo, Ohio... 12.4 1,149,269 1', O22j 495 I 126: S3.4 Coal and coke.—All along prices for fuel sup- YoungstoviHjOhioj 148 100 323,475 176.313 j 147 Total 14,739 1176 j 8,807,636 7,722.074 ! 945,562 1 12.2 plies have advanced a-nd orders for fuel are very much greater than ea,ii be supplied by the i 1 .Decrease. mines and ovens. There does not seem to be any prospect of securing miners in sufficient I Banking and investments.—There is an underquantity to ameliorate the fuel situation current of hesitancy in bank circles caused by promptly, and the car movement is still unsat- the proposed Government loan and the lack isfactory. Operators, although they have-an of knowledge as to the methods to be pursued unexpirod agreement controlling the wage in placing the loan. This Las, of course, tended scale, have voluntarily advanced wages ma- to a hardening of loaning rates, and perhaps, in some instances, a curtailment of credit terially. Pottery,fireproofing,mid day products.—These which ordinarily might have been granted. industries seem to be working to the greatest In general, however, the banking situation is extent practicable, and unfilled orders indicate the best ever known. The local investment a prosperous condition. With an increased markets have slowed perceptibly. Prices have number of cars for shipment, the plants would been shaded, but the demand is not apparent. This is believed to be only a waiting for inforbe capable of turning out more tonnage. Garments.—Cleveland garment houses report mation concerning the Government financing. The table following gives the comparative that after the biggest Easter trade ever known in the country's history there has been a de- bank clearings in the nine principal cities: 3-10 MAY 1, 1917. FEDERAL RESERVE BULLETIN. Mar. 16 to Apr. 15, inclu- i sive. I 1917 1916 ,1, Per Increase or cent decrease, i increase. 06.8 14.4 63.8 11.8 24.3 22.5 35 22.3 14 Cincinnati, Ohio Cleveland, Ohio Coluinbus, Ohio .Dayton, Ohio Erie, Pa Pittsburgh, Pa Toledo, Ohio Youfijrslown, Ohio 173,096,359 287,688,886 47,215,100 16, 064", 728 •• 7,179,633 321,455,910 46,493,420 15.372.166 810,619,000 151,217,800 21,878,559 175.606.352 112,0S2,534 5.017,000 42.198.100 3,141,778 12,922,950 1,321,134 5,858,499 281.90*, 355 42,517,554 8,504,955 37,988,465 1,898; 753 13,473. 413 Total ' 044.075, 202 737,063,931 i 207.011,267 ; 28. C It would be hard to imagine a better situation in this district under all the circumstances. There must bo hesitancy and misgivings by some persons. 'Until ihe prospective war taxes shall become known a few of ilio commercial and industrial linos will be in a measure unsettled, but there is a-general and hearty support of the "pay as yon go7? -plan up to livable limits, leaving for future generations only their reasonable proportion of the burden, DISTRICT NO. 5—-RICHMOND. The European war in all of IIs phases, the effect of which has encircled the globe, has been since its very outbreak an. unending and all-absorbing subject of discussion in this district. This discussion has, with the entry of the United States as a participant, reached, its climax. In this district we are setting our faces to meet with determination the burdens assumed. It would be presumptuous to attempt more than to pay tribute to the statement of the purposes contained, in the President's proclamation of April 16, which, will take rank with the great state papers of this Nation. Without in the least minimizing the seriousness of the step taken, this part of the country has met the shock with a surprising equanimity and set to work to accomplish practical requirements promptly and efficiently. A review of our commercial and. financial growth and our fabulous increase io wealth in the last two years is unnecessary. And now, what of trade for the past month? If that grim cry, War! had not been heard. 389 it might almost have been summarized in one word—unchanged. Trade is in good volume, regardless of specific conditions and high prices: orders in wholesale jobbing plentiful for immediate shipment in all lines; provisions active; manufactures active; building supplies in demand; stocks of merchandise limited and buying cautious owing to high prices. Car shortage is still a deterrent factor, although coal receipts at the ports have shown some improvement. Many new enterprises and improvements are under way in the district, including two packing concerns at one of our ports. Charleston, W. Va.,in this district, has been selected hy the Government as the location for a greet armor plate plant, and the very logical reasons given for the location in this district are a tribute to its natural resources and manufacturing advantages. The fortincation of Cape Henry, controlling the entrance to Chesapeake Bay and its tributaries, including the approach to our National Capital, is another tribute to the importance and advantages of the tidewaters of this section. In addition to the facilities of the Newport News Ship Building & Dry Dock Co. at the mouth of the James River on Hampton Roads, enormous appropriations have been made for the • improvement of the Norfolk Navy Yard, fitting that for the erection of the largest class of battleships. The Secretary of the Navy has just recommended an appropriation of $3,000,000 for the purchase of the site of the late Jamestown Exposition, on Hampton Roads, for the purpose of equipping the property as a naval operating base, including piers, storehouses, oil fuel storage, training station, recreation grounds for the fleet, aviation, and other purposes. Aside from their importance from a military and naval standpoint, these developments indicate the importance of these waters in our future commercial development. Crop preparations are being pushed to the limit, but rains have made bad roads and a late season. Fertilizer shipments indicate a 10 per cent increase. 390 FEDERAL KESEEVE BULLETIN. MAY 1,1917.. A prompt and liberal response to the new ers in public schools"; "Are you a grasshopGovernment loan is anticipated. Banks gen- per or the provident ant?" One of our member banks has issued an erally are in good condition but report a better demand for money, and there is a gradual in- open letter to the farmers of its neighborhood, crease of discounts for agricultural purposes. j using the following interesting figures given out The cry throughout the land is food, more | originally by the College of Agriculture of the food, cheaper food. This bank has distributed University of Kansas and quoted by Hon. over 35,000 of its food circular No. 55 and the W. P. G. Harding, governor of the Federal Redemand continues. The short supply of foods serve Board, in a statement to the press, printhas been evidenced chiefly by high prices ed in the March number of the Federal Rerather than by actual want, but the high prices serve Bulletin: have made living difficult for many, salaried In an average year, with 12-eent cotton, a $60 bale can people especially, and enforced economy which buy— 86 bushels of potatoes, at 70 cents, or is trying. Our enormous export of food products is 750 pounds lard, at 8 cents, or 13 barrels flour, at $4.50, or largely responsible for these conditions, and 375 pounds bacon, at 16 cents, or these need correcting. The new war condi- 100 bushels corn, at 60 cents, or tions which must be faced require the sale of 30 pairs shoes, at $2, or our surplus to our allies and demand that we 700 yards cotton goods, at 8J cents. shall share with them what we have not only at This year, with 20-cent cotton, a $100 bale can only buy— fair prices, but, if need be, at the cost of self- 44 bushels potatoes, at $2.25, or denial. Our own harvests are not the most 500 pounds lard, at 20 cents, or promising, and yet we must prepare to share 10 barrels of flour, at $10, or particularly our standard food crops with our 333 pounds of bacon, at 30 cents, or 67 bushels corn, at $1.50, or more needy friends. 20 pairs shoes, at $5, or The slogan of increased foodstuffs has gone 666 yards cotton goods, at 15 cents. down the line. Every local organization has These striking figures are made the basis of taken up the cry, new ones are being formed an appeal for the raising of home supplies and to spread it abroad in the land, and this syslimiting cotton to the market crop for sale. tematic effort should bring material results. Every garden patch feeds the folks at home, As a sample of the crusade for home supreduces transportation, and releases the less plies, articles with the following headlines, folperishable foods for distribution where most lowed by extensive details, appeared in one needed. Potatoes in this section will be plantday in one of our daily papers: "For better ed on a scale never before approached, and gardens"; "Want jailbirds set to planting— smaller truck on a generous scale. Idlers should be made to plant potatoes on every vacant lot"; "Conference called through DISTRICT NO. 6—ATLANTA. Our Nation's entrance into the war has given chamber of commerce on agricultural conditions "; "Response to appeal—Apple grower a quickening impulse to all industries conin West Virginia plants many acres in white nected with war activity and produced little navy beans in orchard"; "Farming in the or no change in other lines, the healthy condicity—How to grow your peas, beans, and tions reported for March being well maintained. The greatest interest manifested is in inbeets"; "Banks join in fight to keep up food supply—Will base credits to farmers on re- creased food production. I have for the past two quirement that borrowers increase acreage in months endeavored, through interviews with food crops"; "Lectures on thrift—Home eco- the press and letters to the bankers of the disnomics committee will present series of speak- trict, to draw public attention to the necessity MAY 1, 1917. FEDERAL BESEKVE BULLETIN. 391 of a larger individual productiveness. The are scarce. Negro labor continues to move press has taken the matter up vigorously, and northward, and the high prices have prevented the bankers have entered into it with more many farmers from holding back any part of spirit than exhibited in any previous move- j their crops for seeding purposes. Many banks ment. Some of the States have appointed in the district are furnishing seed free and offerspecial committees on food production, but still ing prizes for the best crops and withholding more effective work is being done through local credit from farmers that are not inclined to activity with the county as a unit. Boards of | grow other crops than cotton. county commissioners, commercial clubs, and • Retailers and wholesalers of merchandise are United States farm demonstrators have joined ; considerably ahead of this time last year. hands with the bankers, and raised funds by j Bank clearings show large gains. Indications public subscription to furnish seed and fertilizer ! are that the huge Government bond offer to to the farmer for additional acreage, where the public will be quickly absorbed, and will such help is needed. President Wilson's ap- give every line of business a greater stimulus peal to the farmers of the South struck a re- On telegraphic notice from Washington the sponsive chord and awakened the producer to Federal Reserve Bank of Atlanta made inthe importance of increasing the foodstuffs as quiry throughout the district as to the probable an aid to the successful conclusion of war and 3 per cent certificate subscription, and was met as a safeguard against want at home. with a response of over $7,000,000 within a The heavy rains and cold weather delayed few days. These subscriptions came from small spring work, but with the weather more prom- towns and cities as well as large centers, and ising the farmers are turning the soil and rush- many indicated a desire to pay in the total ing work wherever possible. All indications amount of subscription immediately. point to a reduction in cotton acreage, parity The Government's proposed plan for woodenon account of the spread of the boll-weevil and ship building has caused considerable optimism the patriotic feeling awakened by the Presi- among the shipbuilders. This district is rich dent's appeal. There will be a large increase in all wood suitable to shipbuilding, and Gulf in corn, sorghum, velvet beans, cowpeas, hay, ports are turning toward ways and means to peanuts, and potatoes, as these products will take advantage of the situation. bring good prices after the summer gardens Army and Navy recruiting has fallen off in have gone. There has been a great revival, espe- the district. This is probably due to the accially among the city inhabitants, of planting tion of the press of the country in carrying home gardens; and manufacturing and min- daily headlines announcing victories by the ing companies have been urged to organize allies, which is creating the impression among their forces into garden clubs, with the result young men that the war will be over in a month that more vegetables have been planted this or two. Many young men do not care to reyear than ever before. Many boys' and girls' sign positions and interrupt their usual purcanning clubs have been formed, but some fear suits when they feel that the war is about over is felt on account of lack of experience in can™ and that volunteering is unnecessary, ning vegetables and fruits. It would be advisable that the Department of Agriculture, or DISTRICT NO. 7—CHICAGO. Members of Congress, send out literature on Since our last report the international situathe subject of canning vegetables and fruits, tion has undergone a distinct change; many of which are of especial interest at this time. the uncertainties heretofore in evidence have Prices continue to go higher and the visible been cleared up, but as the step was anticipated supply of foodstuffs grows smaller each week. it caused but little disarrangement in business There is plenty of idle land, but labor and seed i circles. Financial institutions are strongly in- 392 FEDEKAL RESERVE BULLETIN. trenched, as is evidenced by their reports and the insignificant call for rediscount facilities. Savings banks are experiencing a quiet business, with new deposits approximately equal to the withdrawals. There is. without doubt, some hoarding, but the call for funds has not been insistent, nor has it been limited to any particular nationality. Most of the withdrawals seem to be made by the uneducated foreign element and the funds so withdrawn are frequently returned within a short time. The offering of $200,000,000 Treasury certificates has been well received by banks in this district and indicates that when the war loan is offered it will receive the public support. The question of the distribution of $7,000,000,000 "United States Government bonds is receiving the serious consideration of the banks and bond houses in this district. Bond houses expect to derive an ultimate benefit from the sale of these securities, as they claim that there are only about 200,000 bond buyers in the United States at this time, and the wide distribution of the Government loan will create a more general interest in bonds 01 all kinds, thereby widening their market after the absorption of this loan. Concerns in commercial and industrial lines are actively engaged, their principal troubles coming from shortage of certain raw materials, the labor supply decreasing, due to enlistments, and the deficiency in railway equipment. The Government crop report gave evidence of a very unsatisfactory condition throughout the United States, and in our territory the situation is not all that could be desired. Since the issue of the official data weather conditions have been favorable and the condition of the crops has shown improvement. The cold weather damaged the winter wheat crop and necessarily decreased materially the expected acreage. Farmers are making every effort to take advantage of the high prices for grain and the total acreage-to be planted this year will probably be greater than in preceding seasons. The damaged winter wheat land is being plowed over and put in corn and oats. MAY 3, 1917. Agricultural implements. —Manufacturers report a good demand, particularly for corn tools, and the volume of general machinery sold is in excess of last year. Concerns in this line are finding it difficult to secure steel, and this, together with the railroad situation, will tend to hamper not only the implement manufacturers, but also the farmer, who is dependent upon these tools to properly care for the increased acreage contemplated for the coming season. Automobiles.—Current business is good, with deliveries affected by the shipping congestion in this line. Dealers are reported well stocked with cars, and there is a feeling of uncertainty as to the future, due to i-he prospective taxes and the general high cost of the necessaries of life. Building and buUdinci materials.—Construction is considerably held up, duo to the prohibitive prices of raw material, the increased cost of fireproof and other commercial building being estimated at from 30 to 40 per cent. Engineers, architects, and contractors look forward to active work should the Government require the enlargement of factories manufacturing war supplies, etc. Cement companies and brick manufacturers find a strong demand for their products, but complain of the railroad service and scarcity of labor. It is estimated that the Government requirements for cement to construct fortifications will seriously tax manufacturing establishments. Goal.—The available supply is readily taken at prices substantially above normal, some for immediate consumption and an additional amount for storage. There is no present prospect of lower prices, and mines are turning outcoal as fast as cars can be secured to make shipment. Distilling and brewing.—Concerns in these lines are naturally watching with the keenest apprehension the movement toward prohibition, and at this time the high cost of grain is tending to decrease the production of whisky. Maltsters have plenty of orders; in fact, one MAY .7, T91.7. F.EDEKAL BESEBVE BULLETIN. 393 concern is nearly 1,000 carloads behind in use has been reduced to a minimum. Collecshipments. The industry is operating to the tions vary from fair to good. Leather.—Trade has been quiet during the fullest capacity commensurate with the car supply, but the manufactured product is piling past month, and what tended to be a weak up and has forced the closing down of some market lias been supported by the expectation plants. of large Government orders. Labor is scarce, Dry (foods.—Wholesalers are finding a gen- and collections satisfactory. Live stock and packing.—Reports indicate that erally active demand, which is carrying sales above last year, although this may be due in the supply of live stock is limited and market part to the increased values. Some of the prices have increased substantially. Cattle have purchases are probably speculative, and collec- come to market in good numbers, caused by the tions are fair. In the retail trade cold weather increased value of fodder and the high prices has held back the distribution of goods, and to be realized OR their sale. Packing concerns there has been -a spirit of conservatism evi- are busy and are finding difficulty in supplying denced on the part of the consumer and the their labor requirements. By-products are well tendency to buy freely is not so evident. j taken. Furniture:—This line has had a setback since j Lumber.—A good demand has developed for the declaration of war and orders have been cut. i lumber at entirely satisfactory prices, and down, buyers apparently holding off for the • with sufficient shipping facilities in "this line purpose of analyzing the trend of the market. I lumber dealers look forward to an active trade. Collections are fairly good. : Lumber values are advancing, collections are Grain.—During the past month the markets ! satisfactory, and the general outlook is favorfor all cereals have advanced materially, and : able. There appears to be a shortage in mafollowing the Government report showing .an. | hogany and walnut. unfavorable outlook for the winter wheat crop, j Mail orders.—Sales in this line show a the quotations for this cereal have advanced to considerable gain for the same period last year the highest prices known in years. Conserva- for the states in our district. tive grain firms are curtailing their operations Piano manufacturers.—A normal trade is as much as possible on account of the great reported, but piano supply houses find a falling risk in handling grain at the present prices. off in business. Collections are good. Railroad equipment is in short supply, but this Shipbuilding.—There is no change in this situation is easing up a trifle. industry, which continues active, with indicaGroceries.—In the city of Chicago the volume tions of a similar condition for some time to is satisfactory, but the distribution through come. other centers bears only a fair comparison to Steel.—The mills are pushed to capacity to last year if the increased value of the merchan- supply the unusual demand from foreign and dise is taken into consideration. Collections are domestic consumers, prices continue to harden, generally satisfactory, but there is evidence of and some of the concerns in our district are slow pay in certain sections. A more or less booked up for the remainder of the year and ineffectual attempt is being made to curb the in some departments into next year. The speculative tendencies of the consumers who | labor supply is short and collections satisare buying in large quantities in anticipation I factory. of further rise in prices. I Watches and jewelry.—Business during the Hardware.—-A good demand still exists in thisI past month in these lines has been of satisfacline, and it appears that tin plate is being re- tory volume, and manufacturers and retailers stricted to the caimers of perishable goods for look forward to a continuing activity during making containers. The quantity for penoral ; the spring. 394 FEDERAL RESERVE BULLETIN. Wool and woolens.—The raw wool market is firm, and woolen goods houses are finding it more difficult to secure fabrics of good value, even at the increased prices. Manufacturers are operating at full volume, and retailers are covering their requirements freely. Collections arc fair. The knit goods business is extremely active, with advancing prices. Difficulty is experienced in keeping productions up to requirements, and the principal complaint appears to be the trouble experienced by the mills in supplying the demands of the tirade. Clearings in Chicago for the first 20 days of April were $1,442,000,000, being $393,000,000 more than for the corresponding 20 days in April, 1916. Clearings reported by 23 cities in the district outside of Chicago amounted to $272,000,000 for the first 15 days of April, 1917, as compared with $226,000,000 for the first 15 days of April, 1916, Deposits in the eight Central Reserve City member banks in Chicago were $740,000,000 at the close of business April 20, 1917, and loans were $500,000,000. Deposits show an increase of approximately $7,000,000 over last month, and loans a decrease of approximately $10,000,000. DISTRICT NO. 8—ST. LOUIS. The opening of war found this district well prepared against any emergency; In my April 1 report I pointed out that the uncertainty as to our foreign relations had had a healthy deterrent effect on business activity in this district. Business men throughout this district have discounted the effect of our entrance into the European war and business in general continues at a very high level. Banks in the district, especially outside of the larger cities, are reported to carry reserves in excess of their legal requirements, and there has therefore been no change in bank rates. Money continues easy. The cost of living is increasing and the rate of increase seems to have gone up since we entered the war. For a number of years the State bankers7 associations in most of the States in this dis- MAY 1, 1917. trict have carried on vigorous campaigns for diversification of crops. Farmers in this district began to realize the danger in dependence on one crop before the war and for a year or so many of them have been raising sufficient food prodxicts to care for their wants. Therefore, on the whole, the people in this district fully realize the industrial and agricultural demands which will be made on this country, and there has been an intelligent discussion of ways and means to meet such demand. The present supply of foodstuffs and the prospects for the coming crops are receiving the careful consideration of all classes of people. The press is conducting a campaign urging a larger production of food crops, and reports indicate that this campaign will have beneficial results. The State boards of agriculture, commercial clubs, and other organizations throughout the district have undertaken the work of organizing the food producers. Under the supervision of the Missouri State Board of Agriculture meetings have been called in every county in Missouri and the campaign for food preparedness is well under way in this State. The tone of all business seems to be one of conservatism, with a strong underlying feeling of confidence. In an effort to conserve the grain supply distillers in some parts of the district have agreed to shut down for the period of the war. Since April 1, we have received reports from a large number of jobbers, wholesalers, and manufacturers, located in all of the principal cities in this district. These reports covered practically every line of industry. Each line reports a heavy increase in business, unusually heavy orders for future deliveries, and satisfactory collections, with a smaller percentage of past due accounts than is usual at this period of the year. The retail lines report similar increases. Prices of general merchandise have gone up from month to month, and it now appears that gains which are reported by amounts in dollars are caused somewhat by the increase in prices rather than by the increase in quantity shipped. There is also a well defined indication that the increased MAT 1S 1917. FEDERAL RESERVE BULLETIN. 395 costs are beginning to shut off the demand for ; cate that this will limit the acreage in spite of such merchandise as may be termed luxuries ; the tempting price of cotton. There is a rather than necessities. This applies to prac- scarcity of grain in the cotton belt and protically all lines except provisions. \ visions of every kind are climbing higher. The The prices of all steel products have gone up | old-crop movement from Memphis is still devery rapidly in the past few months. Some ; layed, principally on account of car shortage. manufacturers have been hampered by ina- i The stock on hand on April 14, 1917, amounted bility to obtain raw material and others have j to 326,000 bales, as against 216,000 on the same been hampered by strikes and other labor date in 1916 and 168,000 in 1915. troubles. One or two cases have been reIt is reported that considerable ground has ported where manufacturers have made large been prepared for the corn planting and profits through reselling their contracts for some planting has already been done on the raw material to others not equally well supplied. southern sections of the district. Frequent Climatic conditions during the later part of rains the early part of April have retarded March and the first half of April, have been farm work. Plowing and planting have also more favorable than the}^ were the early been hampered by the scarcity and high cost of months of the year. Generally speaking, the seed and the lack of sufficient labor. The oats rainfall was deficient throughout January and crop appears to have been planted under favorFebruary and the ground needed moisture. able conditions. The potato acreage is larger Precipitation in the southern portions of the than usual and would be still larger were it not district was largely above the normal in March, for the almost prohibitive cost of seed. and in fact the continued rainfall has hampered The outlook for the fruit crops, except agricultural operations. The precipitation in peaches, is fair. The strawberry crop is bethe northern half of the district was approxi- ginning to bloom in the southern portions of the mately normal during the latter part of March district, but indications are that the crop is and somewhat above the normal during the material^ smaller than last year. In St. first half of this month. It is believed that Louis and other large cities provisions are genthis has improved the crop prospects. erally high, and in some cases scarce. The The Government report on the wheat crop movement of fresh provisions—cabbage, tomaissued April 7 showed that the April 1 condi- toes, asparagus, celery, strawberries, onions, tion in all of the States in this district was etc.—is later than usual. The onion movement materially below the average. The outlook from the Texas district began a few days ago for the winter wheat crop is not bright. The and is now in fair volume and some relief is crop in Missouri was badly damaged, but the anticipated. The stock of canned goods in condition is believed to be improving slowly the hands of commission merchants and wholebut steadily, particularly in the district from sale grocers is reported to be extremely low, Marion to Franklin County. The condition due in part to a shortage in the yield last year, of the wheat in Dade and Lawrence Counties, and in part to the small " carry-over " from the previous season. Prices in many instances Mo., is reported to be very poor. Reports on the new cotton crop indicate have increased in the past few months 40 to 80 that the season is two or three weeks late. The per cent. Sugar is reported to be equally cold and rainy weather in the belt has delayed scarce and the jobbing price of this staple has the planting and cultivation of the ground, so increased from 7 to 10 cents in the last few that conditions are not entirely favorable. months. Little relief in the canned goods There is a strong agitation for an increase in the situation can be looked for until the new crop production of foodstuffs, and the reports indi- comes forward in September and October. 396 FEDERAL BESERVE BULLETIN. The St. Louis National Stock Yards reports a slight decrease in the receipts of cattle, sheep, and horses and mules in March, 1917, as compared with March, 1916, and an increase in hogs during the same period. The price of hogs has gone up from month to month in this district, on April 15 being $16.40 a hundred. Building permits for March, 1917, as compared with March, 1916, show an increase in Little Rock and in Memphis, and a decrease in Louisville and St. Louis. Building generally seems to be affected by the high cost of all materials. Postal receipts for March, 1917, show satisfactory increases in Little Rock, Louisville, Memphis, and St. Louis. The registration of automobiles on April 1, 1917, for the States wholly or in part within this district, show a substantial increase as compared to April 1, 1916, Illinois having gained over 54,000 machines, Kentucky over 11,000 machines, Missouri over 34,000 machines, and Tennessee over 9,000 machines. The bond market is quiet. Banks and individuals generally are out of the market pending the announcement of the Government bond issue. It is expected that the public subscription will be large. Commercial paper rates have increased a half of 1 per cent in the past 30 days, rates now ranging from 4J to 4f per cent, with a large majority of best names offered at 4J per cent. Brokers reported a slump in business at the time of our entrance into the European war, but the market seems to have recovered its confidence. The supply of paper is ample, with country banks more active in the market than banks in the larger cities. Bank rates to customers show little or no change. DISTRICT NO. 9—MINNEAPOLIS. There are no visible signs in the district, of any adverse effect of the declaration of war. Banks, business men, and farmers alike, in the States of this district, are in excellent shape, and preparing for a busy season. The banks are meeting the spring demands of the farmers MAY 1, 1917. with unusual promptness and with a degree of liberality that speaks well for their patriotism. The Ninth Reserve Bank has entered into close cooperation with bankers, business men, and farmers in the grain-growing areas of Minnesota, North and South Dakota, and Montana, and during the last half of the month was active in the most intensive campaign this district has ever seen to increase the crop acreage at least 10 per cent and provide for record-breaking farm crops this year. Close cooperation with the railroads was secured and the bank was able to be of great service in hurrying forward delayed seed grain and agricultural implements by fast freight, and to do a large amount of work to provide seed wheat of high quality to replace inferior grain. Bankers everywhere have been advised that no honest and reliable farmer should fail to plant because of hesitation in applying to local banks for money, and the State banks of the district have joined with the utmost heartiness with the member banks in loaning freely and upon a liberal basis for the purchase of seed, feed, and for the employment of farm help. Careful investigation fails to show a single instance where any farmer worthy of credit or capable of increasing his acreage has not been able to get support from his bank, and many bankers have personally loaned money to the farmers in order to avoid showing overloans. In the grain areas of North Dakota the bankers have entered into the closest relations with their farmer customers and many of them have been devoting the larger part of their time to personal work in securing a maximum acreage. As a result it is probable that in North Dakota, where because of severe hail damage and a drought last year there was a strong prospect of less than the normal wheat acreage, that the actual crop will be increased at least 5 per cent, and probably as much as 10 per cent. It appears to be a certainty that as a result of these efforts the acreage in eastern Montana, South Dakota, and the grain sections of Minnesota will be very largely increased, while the corn planting will be on a heavier scale than in MAY 1,1917. FEDERAL RESERVE BULLETIN. any previous year. Carefully systematized and intensive organization is now in progress to carry the supervision over the increased planting campaign, down to particular townships and sections of land, and individual farmers living thereon. This has been accomplished through a simple system of district and county organization, with the responsibility delegated to local business men and bankers. Side hy side with this effort, very careful attention is being given to the live-stock situation, and arrangements are being made to bring in breeding sows and other female stock as fast as farmers equipped to handle it can be located and listed. The farm labor situation is serious and will become acute as soon as haying begins. An organization is being formed to cover the entire district and will devote itself to the handling of this problem. Industries are active and at urban centers, and over the district as a whole, the fact that winter snows have largely been saved and that the moisture has gone into the ground, has acted as a stimulus to trade and to establish better confidence in business circles. Soil conditions are excellent, and so far as the crop outlook can be determined at this time, there is little that could be desired. The demand upon commercial banks at urban centers has been active, but not greater than is usually experienced during the spring planting season. Rates maintain about the same levels as for some time past. Spring construction is in good volume and shows less reduction as a result of the extremely high prices for material than was expected. Bank clearings are generally increased, and railroad and postal receipts are large. Over the district, as a whole, the condition is extremely satisfactory. Business is on a sound footing, and banks are well prepared for any calls that may be made upon them. War conditions have been analyzed in advance, and business men everywhere have made sufficient preparation against any effects that may be anticipated in their particular line. 397 DISTRICT NO. 10—KANSAS CITY. Tho tenth district is essentially a food-producing section and, with the satisfactory production and unprecedented prices that have prevailed, enters the world-wide struggle with the knowledge that it is prepared, as never before, to do whatever may be required of it, and with the assurance that the country at large is well equipped to meet and conquer all eventualities. Practically all business continues to run ahead of the volume of last year, the only untoward features being the increasing prices of necessities; reports of a shortage in the visible supply of foodstuffs, aggravated by serious damage to the wheat crop; and the increasing complaint of the shortage of labor and materials for the prosecution of all industries in the face of attractive prices. Tho financial interests of the district, well aware of the task before them, exhibit a marked degree of optimism. Banks are not curtailing loans, but, on the other hand, are in the market for short-time liquid paper and are everywhere assisting the agriculturists in the preparation and care of crops, and are confident that their proportion of the Nation's financial requirements can be met without a disturbing advance in discount rates. Agriculture.—Rising above all items of interest is the united and determined effort put forth for the organization and mobilization of the agricultural resources of the district, the utilization of all lands not now under cultivation, and the growing of maximum crops on all lands now under cultivation, to meet food requirements in the present crisis. Committees have been or are being organized in every State to handle every phase of the situation, and the result will unquestionably be of the utmost importance. The various bankers7 associations are cooperating, and the necessary financial assistance will undoubtedly be furnished to enlarge and intensify farming operations. The importance of this movement is readily apparent, for although the general drouth seems to have been thoroughly broken, the fact remains that in Kansas and Nebraska, the two leading winter wheat growing States, the crop 398 FEDERAL RESERVE BULLETIN. MAY 1. 1017. has suffered enormous damage. Nebraska should result in the operation of the property reports a condition of 35 per cent of normal, involved upon a much more extensive scale with a decline of 50 points from the condition than ever before. The Miami field of the of December 1 last. In Kansas the condition Missouri-Kansas-Oklahoma district is expandon April 1 was 45 per cent of normal, a decline ing rapidly, this camp having become one of of 38 points since December 1. Undoubtedly the richest zinc fields in the world. much of the acreage in these States, which Oil.—The price of crude oil, contrary to the must now be abandoned, will be planted to experience of other products, has not changed, other grains and to forage crops. The supply but oil m&n are united in the belief that higher of all forage seeds is the shortest known in prices must soon arrive, as there is the greatest many years, with extremely high prices. The demand in the history of the industry and physical condition of the soil is reported as daily production is showing a decrease. The better than usual for corn planting, and, as this call to arms and response of the field workers, is a more important crop than wheat, this dis- the shortage of casing, and the scarcity of rigs trict may yet produce its full quota of the are matters of deep concern. The refining Nation's supply. situation has remained quite regular, and it is Live stock.—There was a net increase in the reported that there is probably less gasoline movement of cattle to the markets in March in storage than in the history of the midconover the same month last year, this activity tinent field at this time of the year. being really greater than anticipated in the face Lumber and construction.—Order files are reof curtailed supplies, but many continued to be ported heavy and stocks on hand are very low, prematurely marketed by reason of increasing with the market going higher ever}?- day. Car high prices and shortage of feed. The feature shortage and the broken condition of mill of the trade was the strong demand for breeding stocks continue to be deterrent features. Mancows and heifers at the highest prices ever ufacturers are much more concerned in the known. Trading in hogs was active, prices filling of orders already booked than in the exceeding all predictions. Sheep likewise addition of new business. Building and engibroke all previous price records, with the final neering operations continue active, with much value of from S3.50 to S3.75 per hundredweight work in prospect. Eleven important cities in higher than those of last year. The annual the district show an average increase in value movement of cattle from Texas and New Mex- of building permits issued for March over the ico to the long-grass districts in Kansas and same month last year of 74.5 per cent, the Oklahoma, to be fattened for the fall market, highest gain being 324 per cent and the highest is in full swing, the number probably equaling loss 10 per cent. last year. Shortage of stock water is reported Labor.—Labor is unusually well employed in some of the grazing districts, but there has at increasing wages, and there are no disturbbeen sufficient moisture to make a good start ances of importance. A scarcity is becoming of grass for grazing purposes. more and more apparent, particularly on the Mining.—Owing to the condition of the | farms and in the mines. Twenty-two of the roads incident to the usual spring break-up, the | leading coal mining companies of Colorado, tonnage of ore marketed in Colorado showed a \ affecting about 90 per cent of the coal mines slight falling off in March over previous months, I in the State, recently announced a general and the acute shortage of mine labor caused a I wage increase of approximately 10 per cent, further curtailment in production. Though I effective May 1, an action that was purely dull in other respects, March was a most event- i voluntary. ful month in the sale of Colorado mining prop- j Wholesale and retail.—The commercial situerties. Two very large deals were consum- | ation shows no radical change and general busimated, involving many millions of dollars, and | ness continues good, with collections entirely MAY 1, 1917. FEDERAL RESERVE BULLETIN. satisfactory. There is no reckless advance buying, indicating that dealers are operating along conservative lines. Wholesale dealers in dry goods, notions, and shoes report a satisfactory volume of business, with orders for fall delivery in excess of a year ago and reorders fair. Retail trade in seasonable merchandise has increased under the influence of warmer weather. Grocery and provision markets are unsettled as to prices, but trade is active. Flour milling has been fairly active, considering the unsettled wheat market and the very high current prices. Buyers are slow to make new commitments, but mills are running about three-fourths capacity. In implements, tractor orders have fairly swamped the jobbers, and it seems apparent that the demand will exceed the available supply. Preparation is being made for an immense demand for corn tools. Financial.—Bank deposits and post-office receipts are reported in substantial increases over last year. Reserves in banks are in a decidedly healthy condition, and it is gratifying to note from the statement of the Comptroller of the Currency that of the four States in the Union whose country banks showed the largest percentage of reserves, three of them, viz, Colorado, Nebraska, and Kansas, lie wholly within this district, holding first, second, and fourth places, respectively. Kansas State banks show deposits of double what they were five years ago at this time. Reports from bankers throughout the district are decidedly optimistic, and this feeling is admittedly based upon confidence in the Federal reserve system and its ability to meet any emergencies. The average gain in clearings for 15 cities in the district for the first three months of the current year over the same period last year is 43.1 per cent. There has been no change in discount rates, but a feeling exists that they will gradually strengthen. 399 and subsequent developments have not seriously interfered withjbusiness in the district. Prior to the formal [declaration of war there was an atmosphere of uncertainty in various industries. Some disturbing elements were noted and an undertone of caution prevailed. This condition, though still slightly apparent in some quarters, is certainly not as pronounced as expected. It is, of course, too early to adjust ourselves to the new situation of the Nation's being at war or make a forecast as to the ultimate effect on business. Up to the present writing, however, conditions following our entrance into the conflict are not disturbing. Patriotism runs high in every section, as evidenced by public demonstrations on every hand, and we may be depended upon to do our full part in furnishing men, equipment, and foodstuffs. The country-wide campaign for an increased food production is meeting with an unselfish response throughout the district. Much has been written as to the absolute necessity of an increased food production. Meetings are being held by civic organizations, bankers' associations, and various societies and clubs in ever}7- part of the district and every possible influence is being brought to bear on farmers and the people generally to grow an increased supply of foodstuffs. Throughout the district, organizations of fanners are being effected, whose members are pledging themselves to grow more food products, and a conservative estimate would be that at least onethird more land will be planted in these crops than ever before. The home-gardening propaganda and the planting of vacant city lots in garden truck is also having results, and more vegetables are being grown than in previous years. While this movement may be thought to be more sentimental than practical, at the same time the public has responded liberally to this plan. Not the least factor in these campaigns for increased food products is the cost of living. Prices of all foods are reaching DISTRICT NO. 11—DALLAS. new records from day to da}', and while it was While the crisis in our international affairs thought some time ago that the level had been was reached with the formal declaration of war reached, prices continue to rise and records are against Germany, the effect of this condition, being broken daily. 400 FEDERAL RESERVE BULLETIN. The yield of the grain crops and the large areas planted in foodstuffs will, of course, depend upon weather conditions. The grain crop in the district at the present time is in various stages of development. Recent rains over the wheat belt have been of material benefit, as up to April 1 the condition of the crop was poor. According to the Government Crop Report of April 1 there was a deterioration in Texas wheat of 11 per cent from December 1 to April 1, or from 86 to 75 per cent of a normal. Any estimate as to the probable yield of the Texas crop would be purely guesswork. Authorities state, however, that the present condition is most favorable and with a good increase in acreage, particularly in north Texas and the Panhandle section, the Texas crop should be around 25,000,000 bushels. The condition of the corn crop varies from 69.5 per cent in northwest Texas to 97 per cent in northeast and central Texas. The acreage is around 92 per cent. The poor condition of the crop in south and southwest Texas where, in fact, planting has been delayed on account of dry weather, is more than offset by the favorable condition of the crop in north and central Texas. The condition of the oat crop is around 85 per cent of a normal; acreage 92 per cent. Conservative estimates of the yield this year of grain crops would be 20,000,000 bushels of wheat, 25,000,000 bushels of oats, 150,000,000 bushels of com. When it is noted that Texas alone consumes about 30,000,000 bushels of wheat, 35,000,000 bushels of oats, and from 200,000,000 to 225,000,000 bushels of corn, and the State rarely produces that amount, the importance of growing sufficient food for our own consumption will be seen. In addition to the campaigns for increased production of grain and other foodstuffs, much interest is being taken by farmers in raising live stock and poultry. Our correspondents report that never before have farmers devoted more attention to this matter. They are raising live stock not only for home consumption but will have a surplus to ship to the markets. To sum MAY 1, 1917.. up, therefore, this district is in an excellent condition to contribute its full part toward the food supplies of the Nation and for export to the countries at war. In north, northwest, east, and central Texas the progress of the cotton crop is all that could be desired at this season. Cool nights have affected the plant and held it back. In south and southwest Texas the weather has been too dry and planting operations are backward. There is undoubtedly an increased acreage in the staple, but it is too early to make an estimate as to what it amounts to. There is little change of interest in the banking situation. Rates are unchanged; demand with member banks is normal for the season and deposits are heavy. When war was declared there were some withdrawals by foreign depositors, but our information is that this activity was only temporary. Statements of member banks disclose large reserves. Demand with this bank is light, indicating that member banks have not as yet entered theborrowing season. Banks in the cattle-raising sections of the West report that demand with them is considerably lighter than a year ago. Banks in the Panhandle, however, are having* rather an active demand. The bond market is active, especially for municipals. The recent income-tax legislation has created quite a market for this class of securities. Clearings for March were $234,489,761 and for the same period last year were $182,450,253, or an increase of $52,039,508, or 29 per cent. Building operations for April were not affected by the war, nor the scarcity of materials and the high cost of labor, and, while showing a small decrease in number of permits issued, a substantial increase in the valuation of such permits will be noted. The figures are: March, 1917.—Number, 1,095; valuation, $2,850,768. March, 1916.—Number, 1,185; valuation, $1,831,360. Decrease in number, 90; increase in valuation, $1,019,408, or an increase in valuation of 55 per cent. Lumber and other building materials are. quite active. MAY 1, 19.17. FEDERAL RESERVE BULLETIN. 401 Wholesale trade in groceries, dry goods, ration of war has greatly stirred the whole drugs, and shoes is satisfactory and collections people. A few days before our declaration of war, are good. There is a tendency in the grocery trade to overbuying, on account of rumors of when all wore expecting it, Melba sang for the scarcity of food and continued high prices. benefit of the British allies to an audience of Wholesalers are endeavoring to discourage 12,000 in the civic auditorium at San Francisco. The occasion was typical of the spirit of the this tendency. Labor continues well employed. While en- Pacific coast in its quick response and readiness listments for service the past month have been to serve. Money was showered upon the stage, active, naturally causing a withdrawal of men the gifts of the evening aggregating $20,000. The twelfth district will probably play no from business pursuits, the effect on labor is not as yet noticeable. The principal unfavor- spectacular part in this war or in the preparaable feature in the labor situation in Texas in tion for it, but nevertheless will contribute its the emigration of workmen to northern and important share. Copper particularly from eastern points, many thousand having left in Arizona and Utah and lead from Idaho are the past six months. With the crop season pouring forth in a steadily increasing stream to nearly at hand, the shortage of laborers will meet war needs; quicksilver, tungsten, mangabe seriously felt unless this movement de- nese and other rare metals from California; ship timbers from Oregon and Washington; creases. •. Post-office receipts of the principal cities of live stock and wool from Oregon, Utah, Idaho the district show an increase for the month of and Nevada, and a vast variety of food crops March over the previous year. The figures from the entire fertile district. Food is so easily produced in most parts of are: March, 1917, $396,582.94. March, 1916, this district, and during so large a part of the $345,801.27. Amount of increase, $50,781.67; year, that the increased cost of living bears per cent increase, 15. lightly here. Much sea food is available along Exports from Galveston for March were | the 1,500 miles of Washington, Oregon and $14,126,997, an increase of $644,824 in amount, | California sea coast, and any householder havor 5 per cent, over same month of 1916. i ing a few square feet of ground may protect Cool weather during April has affected retail himself by growing his own green vegetables. trade. Easter buying, while good, was below It is stated, however, that vegetables constinormal on account of the unseasonable weather. tute only 6 per cent of food in point of cost, DISTRICT NO. .12—SAN FRANCISCO. while meat, milk and eggs constitute 38 per During tho Civil War, with no transconti- cent. So the fact that magnificent green nental railroad and with an occasional ship, asparagus is now retailing here at 6 to 8 cents long en route, the chief means of communica- per pound is of small consequence compared tion with the eastern part of this country, it is with the fact that cattle and sheep have winsaid that the Pacific coast had little effective tered badly, that the ranges have scant grass, realization that a war was in progress. To and that hay is almost unobtainable, even at some extent the same is true now even with $30 to $40 per ton. present speedy communication. There is relaFood reserves have been well-nigh exhausted. tively little manufacturing in the twelfth For instance, onions are being imported from Federal Reserve district, and consequently the Australia; a single shipment of beans from fever of war is little in evidence, with an excep- Japan was valued at $1,000,000. Potatoes, tion here and there, as in shipbuilding. So the the crop of which was much below normal, are course of current affairs appears to be little in meager supply, partly because of heavy shipdifferent from normal. Nevertheless the decla- ments to the East. Stocks of canned vegetable 402 FEDERAL RESERVE BULLETIN. MAY 1, 1917. and canned fruits are practically sold out and Heavy snows, however, while causing loss of advance sales have already been made of the live stock, assure abundance of irrigation water, principal part of the coming season's pack; with corresponding certainty of crops depend100,000 cases, amounting to 30 carloads, of ent upon it. canned salmon were recently sold to the Italian Oregon reports some damage to winter wheat, Government by Seattle brokers and little re- the April 1 Government estimate for Oregon mains available of last season's pack. Similar being 84 per cent (against 96 per cent for a 10reports are made regarding certain other food year average) and 70 per cent for Washington. reserves. It is however shown by the investi- In Oregon, Washington, and Idaho about gations of the United States Department o* 2,534,000 acres were planted in winter wheat, Agriculture that on April 1 the stocks of frozen' an increase of 34,000 acres over the preceding cured and pickled meats and stocks of cheese year, but 290,000 acres less than for the winter in storage in the Pacific coast States were as of 1914-15. large, and in some instances larger, than a year Conditions in California are generally quite ago. favorable from the standpoint of considerably The autumn was early and cold, and the increased acreage and good present condition spring has been cold and backward, so that of growing crops. It is anticipated that the growth is nearly a month behind the normal. barley crop may amount to 900,000 tonsThis, coupled with damage done by frost here This would be an increase of 400,000 tons over and there to fruit and vegetables and thus far last year's crop. It is estimated that 100,000 (April 19) a generally deficient precipitation* acres will be planted to rice, as against 60,000 gives a less promise of abundant crops than last year. The acreage in beans and sugar could be desired at a time when every pound of beets is greatly increased, many tracts being food produced or saved from waste helps bring planted which had hitherto either been used for grazing or not at all. the war to an end. Apricots, peaches, and almonds have sufIn Idaho the number of cattle, sheep, and hogs available for sale this year will probably fered some damage from frost, but the outlook be 10 per cent below normal. In Nevada, par- is generally favorable for full fruit crops. In ticularly in the northern part, losses have been Washington and Oregon the backward spring heavier than at any time since the hard winter has been favorable for the fruit in avoiding of 1889-90, and may run as high as 25 per cent. frost damage. Mining continues extremely active, hampered Because of the backward spring, grass has been very slow in starting, and in consequence of somewhat by scarcity of labor and shortage of this, there may be further losses. In Utah i cars. Petroleum production in California in there has also been considerable loss because of | March averaged 263,513 barrels daily, which excessive cold and lack of feed. In eastern and was about the same as in February and comsoutheastern Oregon feed is especially short. I pared with shipments averaging 291,072 barSheep men are buying hay to feed during the | rels per day, stored stocks declining 854,333 lambing season and in some cases have shipped ! barrels to a total of 41,173,861 barrels, which it by express from the Spokane region. Much I compares with 60,820,315 barrels on May 1,1915. hay has been shipped from western Oregon to ; An 8,800-ton ship built for the Cunard Line California. One just returned from an ex- I was recently launched at Portland, the first tended tour through California reports sufficient I steel ship ever built there. The yards there feed on the ranges in this State and the cattle I are said to have a capacity of 40 ships, both in good condition. He states that the chief steel and wood. Seattle reports shipbuilding concern is not about the present feed but the I contracts now exceeding $76,000,000. One j shipbuilding concern in San Francisco is now impending great shortage next fall. MAY 1,1917. FEDERAL BESEBVE BULLETIN. 403 launching big steel steamers at the rate of one i On the other hand useful offers of patriotic every three weeks. cooperation are being made. W. H. Crocker of The "West Coast Lumbermen's Association re- ; San Francisco, as president of the Crocker Huffports that 127 mills have a balance of orders i man Land & Water Co., has offered for this year unshipped amounting to 17,475 cars. Because ; the free use of 3,000 acres of land at Merced, of car shortage 33 per cent of the mills axe not [Cal., adapted to raising corn and beans with soliciting orders in transcontinental markets. sufficient free water for making the crops. Clearings for 19 principal cities of this dis- ; Over 1,000 acres, were applied for in the first trict for the month of March, 1917, increased \ two days, chiefly in 20 acre tracts. 34 per cent over those for March, 1916, Salt \ H. G. Humphrey, as secretary of the Union Lake City leading with 59 per cent, followed by Land & Cattle Co. of Reno, Nev., has offered to Spokane with 38 per cent and San Francisco • the Government the free use of 3,000 acres or with 36 per cent. Building permits for the ; more of land, suitable for raising wheat, tosame 19 cities decreased 7 per cent for March this : gether with free use of a large amount of equipyear over the corresponding month last year, i ment and horses for farming the land, making At this time of war preparation, when there j it necessary for the Government to furnish should be supreme effort to gather effectively i only the men and the seed. the Nation's energies in men, materials, and; If such a spirit becomes general and if money, California's method of collecting tax : payments stands out in contrast, millions of j "plant the limit" is made the slogan, we shall actual gold coin being withdrawn from bank | have the surplus of food so essential for us to reserves and locked up in public treasuries. • provide for our allies. 404 FEDERAL RESERVE BULLETIN. FOREIGN EXCHANGE RATES. In the tables below and accompanying diagrams an attempt has been made to present in a uniform manner the changes in exchange rates since the outbreak of the war. The material used for the tabulation and the diagrams is made up chiefly of quotations published in the December, 1916, and April, 1917, Federal Eeserve Bulletins. These data have been arranged under three main heads: (1) Exchange rates on markets in belligerent countries. (2) Rates on markets in neutral countries in Europe and South America. In view of the considerable fall of exchange on Rio de Janeiro and the low level maintained for the period since September, 1915, it was found impracticable to plot the course of exchange rates on the Brazilian center as part of the second diagram. Iii the case of the rates on Buenos Aires, the par value of the paper peso was taken at the officially fixed rate of 44 per cent of the gold peso (96.5 cents gold), or 42.46 cents. (3) Rates on markets in silver standard countries. The markets chosen were Shanghai, the principal neutral financial and commercial market in the Far East, and Hongkong, the most important transshipping point in that MAYI, 1917. part of the world and under the political and financial control of the British Government. The rates used for the compilation and diagrams represent the high rates quoted during each month, all expressed in percentages of the American equivalents of the par or mint values of the respective monetary units. This method of presentation necessitated the reconversion of quotations of rates on Paris, Zurich, and Milan, and their restatement in terms of United States money. It is easily seen that this is the only mode of presentation which permits of any fair comparisons of the upward or downward course of exchanges on the various markets. Some difficulty was experienced in choosing a basic quotation for the silver-standard countries. The basic figure chosen was the average price of silver in London for the calendar year 1913 (60.458 cents per ounce, British standard, 0.925 fine). On this basis the average 1913 values of the Hongkong dollar and the Shanghai tael were figured and these values, 47.16 and 65.49 cents, respectively, were used as the basis for calculating the percentages shown in the tabulation and plotted in the diagram. To complete the analysis of the course of Far Eastern exchange since the outbreak of the war, there have been added figures and curve indicating the course of the silver price in London for the period under review. MAY 1, 1917. 405 EEDEKAL EESERVE BULLETIN. Movement of exchange rates {highest rates for drafts during month) on principal financial centers during period from "June, 1914, to March, 1917. 1. Rates on markets in belligerent countries. London (4.S665=100). June July August September October November December January February March. .*. April 1914. 1915. May Juno July August September October November December January February... March April May June July August September. October November.. December.. 84.891 5.50 !! 5.56 5.0625 4.98 • 4.90875 4.8925 ,! <l 85375 i 4.8493 ! 4,S125 4 80 • ••!.80 i 47856 "j -1.77125 I 4.7625 • -1.73 ! i. 725 j 4.71375 \ !. 74125 Per cent. 100.50 113.02 114.25 104.03 102.33 100.87 100.53 Paris (19.3=100). Per cent. Per cent.]! 100.62 S95.44 : 100.25 112.64 i 96.25 : 101.10 97.00 10.. 89 101.61 101.89 102.59 i 97.00 99.00 102.59 : 94.25 93.09 101.71 ! 88.62 101.40 92.50 : 97.16 $19.42 21.74 19.61 19.80 19.80 19.63 19.57 ! 98.63 98.31 98.01 97.86 97.20 97.09 96.86 97.43 19.35 ! 19.30 I 1.9.01 l '. 18.81 18.81 . 18.40 ' 18.07 ! 17.71 i 17.35 17.35 17.18 '• 17.21 : 98.22 97.94 97.91 97.91 97.86 97.79 97.79 97.79 97.97 97.75 96.94 97.75 17.15 :! 17.08 17.02 ! 16.86 16.90 ,; 16.95 .• 16.93 : 16.98 I 17.13 i 17.13 ! 17.12 : 17.14 ! 100.26 i 100.00 | 98.50 ! 97.46 ! 97.46 i 95.34 ! 93.63 ! 91.76 i 89.90 I 89.90 ! 89.02 ! 89.17 : i 88.86 ; 88.50 I 88.19 ; 87.36 ; 87.56 i 87.82 | 87.72 ! 87.98 i 88.76 ; 88.76 ! 88.70 ! 88.81 i 97.78 97.77 97.72 17.12 I 17.11 ! 17.12 ' 8S.70 j 88.65 ! 88.70 | 99.74 99.65 1916. 78 76625 765 765 7625 75875 75875 75875 7675 7569 7175 7569 Berlin (95.2=100). Petrograd (51.5=100). i ! Milan (19.3=100). ! J Vienna (20.3=100). Per cent.l \Par cent.' Percent. Sol. 56 | 100.12 • $19.37 100.36 ; $20.32, 100:10 105.75 ! 20.37 ; 100.34 51.56 ! 100.12 i 20.41 105.75 ! 20.37 ; 100.34 51.12 j 99..26 i 20.41 98.70 19.05 19.34 100.21 19.87 ! 97.88 48.00 j 93.20 18.80 97.41 17.87 ! 88.03 48.00 ! 93.20 19.12 99.07 43.00 I 83.50 18.00 88.67 i I ij. (O ! 92.83 91.71 88.50 87.05 87.45 87.05 86.40 86.66 88.50 88.50 86.00 83.77 43.50 ' 44.87 4-1.50 44.50 41.75 39.75 38.00 37.00 35.75 35.50 33.75 32.75 84.47 87.13 86.41 86.41 81.07 77.18 73.79" 71.84 69.42 68.93 65.53 63.59 18.52 j 17.70 17.33 17.38 16.93 16.50 16.05 16.18 16.08 15.55 15.35 97.31 95.96 91.71 89.79 90.05 87.72 85.49 83.16 83.83 83.32 80.57 79.53 17.50 17.35 15.87 15.55 15.70 15.18 15.18 15.20 15.55 15.55 14.70 14.10 86.21 85.47 78.18 76.60 77.3-1 74.78 74.78 74.88 76.60 76.60 72.41 69.46 76.75*; 77.50 •; 73.37 76.50 :: 78.12 77.12 : 74.50 72.37 70.94 70.56 : 70.19 : 75.25 80.62 81.41 77.07 j 80.36 ; 82.06 i 81.01 ! 78.26 | 76.02 j 74.52 ! 74.12 i 73.73 ! 79.01 ! 30.00 32.37 32.50 32.00 31.62 30.80 30.80 34.00 33.75 31.75 30.75 30.75 58.25 : 62.85 | 63.11 i 62.14 i 61.40 ! 59.81 I 59.81 i 66.02 j 65.53 ! 61.65 59.71 59.71 15.27 14.95 15.38 15.85 16.13 15.75 15.68 15.47 15.56 15.47 15.04 15.02 79.12 77.46 79.69 82.12 83.58 81.61 ! 81.24 | 80.16 ! 80.62 i 80.16 i 77.93 i 77.82 I 12.92 15.00 13.00 13.62 13.50 13.25 12.80 12.50 12.15 12.00 11.88 13.40 63.65 73.89 64.04 67.09 66.50 65.27 63.05 61.58 59.85 59.11 58.52 66.01 71.44 I 70.87 . 71.50 75.04 | 29.90 74.44 I 29.10 75.11 ! 28.60 58.06 56.50 55.53 14.52 14.12 13.11 75.23 ! 73.16 ! 67.93 ! 11.79 11.10 11.50 58.08 54.68 56.65 88.37 !• 87.31 ! 84.25 i 82.87 :! 83.25 82.87 : 82.25 ; 82.50 . 81.25 ' 84.25 : 81.87 , 18.78 I 1917. 4.7585 4.7580 4.7555 January.. February. March 2. Rates on markets in neutral countries. Zurich I (19.3-100). l_ iPer cent.. •.Per cent. .Per cent. §40.31 i 100.27 820.90 ! 100.37 §19.42 ; 100.62 I. 21.51 I 111.45 ;. 41. 25 ' 102.61 27.50 ! 102.61 42.00 104.48 : 27.50 | 102.61 41.75 20.00 !, 103.63 103.86 : . 42.50 19.88 103.01 105. 72 ;. 40.87 19.42 I 100.62 101.67 i 25.87 i 96.53 19.29 j 99.95 ±0.62 ! 101.04 : 25.25 ' 94.22 Amsterdam (40.2=100). 1914. June July August September October.... November D ecember j anuary February... March April May June July August September.. October November.. December.. Januar y February... March./.... April May June July August September . October November.. December.. January.. February. March..'.. 1915. 1916. 1917. Copenhagen (20.8=100). Madrid (19.3=100). Buenos Aires (42.45=100). Per cent. Rio de Janeiro (32.444=100). \Per cent.'- \Percenl. i 40.50 J 40.31 j 40.00 \ 39.50 ! 39.56 j 39.94 ! 40.06 i 40.31 i 40.37 i 41.50 i 42.00 I 43.50 j 100.75 i 100.27 , 99.50 ; 98.26 98.41 :: 99.35 99.65 ' 100.27 " 100.42 i 103.23 ' 104.48 : 108.21 45.87 42.62 42.75 43.25 41.87 41.75 41.44 41.44 11.12 41.19 41.00 40.87 111.10 j 27.90 i 104.10 28.25 j 105.41 106.02 29.00 ". 108.21 106.34 30.20 ! 112.69 107.59 30.80 ! 114.93 104.15 30.10 , 112.31 103.86 29.10 ! 108.58 103.08 28.70 i 107.09 103.08 27.75 : 103.54 102.29 27.40 ; 102.24 102.46 27.15 I 101.31 101.99 27.80 ! 103.73 101.67 40.81 40.75 -10.50 101.52 I 25.00 I 93.28 24.81 I 92.57 25.50 i 95.15 96. 08 25.75 25.95 , 96. 83 98. 58 26.42 26.35 ; 98.32 96. 64 25.90 25.95 ; 96. 83 26.20 97. 76 28.05 i 104..66 28.00 ': 104.48 27.70 103.36 101.37 j 27.55 ! 102.80 100.75 ! 29.60 i 110.45 19.14 j 18. 89 j 18.69 18.79 ' 18.89 ' 19.01 • 18.69 i 18.83 ; i 19.05 19.01 18. &J i 19.08 : 99.17 97. 88 96.84 97.36 97. 88 98. 50 96.84 97. 56 98.70 98.50 97.56 19. 24 19.49 19.78 20.05 i! 19.80 19.08 ' 19.23 !! 19.36 19.00 :' 19.05 19.03 • 18.90 ; 99.69 '. 100.98 . 102.49 :. 103.89 ... 102.59 . 98.86 :.. 99. 64 . 100.31 : . 98.45 98. 70 : 98.60 ': 97.93 41.55 i 42.00 j 41.75 ! 42.00 ; 19.49 i 100.98 100.05 99.43 100.21 100.05 99.07 98.13 97.83 97.88 9S.65 100.21 105.08 19.12 ; 19.25 i 19.37 I 19.65 i 19.95 i 20.70 ' 20.30.1 20.20 i 20.16 ', 20.30 ! 20.55 i 21.25 | 99.07 •; 99.74 100.36 i 101.81 : 103.37 I 107.25 I 105.18 i 104.66 i 104.46 1 105.18 i 106.48 ! 110.10 I 42.12 44.45 42.62 42.62 42.32 42.25 42.25 41.69 42.39 43.15 43.4.0 44.89 99.22 101.71 100.40 100.40 99.69 99.53 99.53 98.21 99.86 101.65 102.24 105.75 44.34 44.46 14.03 19.31 ! i 19.19 19.31 ' 19.31 19.12 18.94 18.89 18.89 19.01 19.34 20.28 20.00 | 103.63 20.00 : 103.63 19.91 I 103.32 21.25 ! 110.10 ! 21.35 I 110.62 i 21.75 • 112.69 ' 97.88 : 98.94 ; 98.35 : 98.94 23. 70 20.81 23. 75 23. 62 73. 06 73. 40 73.21 72.81 23.50 23.25 23.62 23.00 24.50 24.50 24.76 24.65 24.29 24.10 23.96 23.63 72. U 71.67 72.81 70.90 75.52 75.52 76.33 75.99 74.88 74.29 73.86 72.84 j 104.45 ! 23.57 104.73 ! 23.46 103.72 ! 23.18 72.66 72.32 71.45 ; i ! I ! 406 FEDERAL RESERVE BULLETIN. MAY 1,1917. Movement of exchange rates {highest rates for sight drafts during month) on 'principal financial centers during'periodfrom June, 1914, to March, 1917—Continued. 3. Rates on market 3 in silver countries. Shanghai (65.49=100). Hongkong (47.10=100). 1914. June Julv August September. October November December. S46.90 46.45 47.85 ::;....i 1915. . February March \pril. May June July August September October November December January February • March April May June July August September . . October November December January February March 1916. . 1917. $64.00 64.00 64.75 :;. 94.78 94.57 93.94 91.18 90.54 92.77 92.77 102.31 100.40 57.00 57.00 56.50 56.00 56.00 56.00 55.75 63.00 63.00 Average price for 1913— .60458 cents= 100. Percent. 97.72 SO.56879 97.72 .55201 98.87 .53159 .50555 .49630 .50145 Percent. 87.04 87.04 86.27 85.51 85.51 85.51 85.13 96.20 96.20 .49678 .50007 .51822 .51925 .51706 . 51035 . 49556 .49973 . 51761 .52441 .54986 .57812 82.17 82.71 85.72 85 89 85.52 84.41 81.97 82.66 85.61 86.74 90.95 95.62 i i ...! 44.70 44.60 44.30 43.00 42.70 43.75 43.75 48.25 47.35 .. . Percent. 99.45 9S.49 101.46 London price of silver. 94.0& 91.30* 87.93 83.62 82.09 82.94 100.93 47. 60 46. SO 99.24 104. 90 49. 50 56.50 119. 80 56.25 119.27 108.14 51.00 50 00 106.02 51.75 109.73 52.75 ni.ss 53.45 113.34 56.00 I 118.74 58.00 ! 122.99 63.87 68.75 67.50 76.00 80.12 72.00 72.12 73.50 75.50 76.50 87.50 89.00; 97.53 97. M 103.07 116.05 122.34 109. 94 110.12 112. 23 115.28 116. 81 133. 61 135.90 . 59099 . 59133 . 60496 . 67215 . 77989 . 88088 . 65632 . 69040 . 71469 . 70942 . 74852 .79815 97.75 97.81 100.06 111. 18 129.00 112. 62 108.56 114.19 118.21 117.34 123. 81 132.02 58 00 i 58.00 1 56.50 i i 89.00 89.50 86.50 ! 135.90 136. 66 132. 08 .80412 .82721 .79844 133.00 136. 82 132.07 122. 99 122.99 119.80 § ifjt tl9 tic RATES OH BEIXIGEREHT COUNTRIES. \EXCHANGE 1 7F (I W JIQ no JT HJ IO$ -1 m ")i RAi j 10$ / i ;• ! : 11 " I /04 JO2 h «&f G& — Of) J&9 \ hM 41\V/N \ ! A\ \ •/ 1S L0N2CW s 36 \ \ 94- \ f \ \ \ \ V \ n - >— . 1 \ / \ i- L *s>r _ &*& \ \ l\ \ \ \ _ so N \ \ i JVJ ^^ S s\ \ \ \ \ V \ \V *^ ?& - \ . } • > \ y \ \ \ «w — \ i \ \ \ \ fiff _ K \ / l 1/ f \ X— \ \ eo \ •i N \ V) \ \ 1 H 1i \ PO - ss m // yf/ A/i \ PARIS / ?6 ^*P4BERUIH _\• ?0 i : I \ "1" T: I s L N "/ \ V \ \1 s \ \T \\ N\ \ \ \\ ?8 MILAN 1 / \ &4. - 02. \ / v1 _ f&* - Ji \ 1 6* / \ / / AT& €6 • / l \ \\ 1s. ez 60 se visniiA PETRO. J3MD G4. - sa so S2 SO - 1 IBIS 93720—17. (To face page 408.) No. 1. IB 16 \ /BJP MAY 1, 1917. FEDERAL RESERVE BULLETIN. 407 DISCOUNT OPERATIONS OF THE FEDERAL RESERVE BANKS. Discount operations of the Federal Reserve Banks during March totaled $26,706,266, compared with $22,408,604 for February, 1917, and $9,387,300 for March, 1916. Over 19 per cent of the discounts for the month is reported by the Boston bank, about 16 per cent by the Richmond bank, and over 15 per cent by the Cleveland bank. More than onehalf of the paper discounted by the Richmond bank, about 75 per cent of the paper discounted by the Boston bank, and an even larger proportion of the paper discounted by the Cleveland bank was 15-day paper, of which in turn a large proportion were member banks' collateral notes. The total of these notes discounted during March was $10,327,229, or nearly 10 per cent less than the month before. The amount of trade acceptances (two-name paper) discounted during the month was $739,346, while the total of commodity paper, largely secured by cotton, was $870,753, compared with $299,000 of trade acceptances and $1,719,000 of commodity paper discounted during March, 1916. Discounts for the three months of the present year aggregated $67,441,156, compared with $28,166,900 for the corresponding period in 1916. Nearly two-thirds of the discounts for the first three months of the present year is represented by 15-day paper, handled largely by the eastern and the Richmond banks. The total number of bills discounted during March, exclusive of 79 collateral notes, was 4,284, averaging in size over $3,800, compared with about $3,000 in February. Bills of the largest size (i. e., in denominations of over $10,000), chiefly 15-day paper, constituted 52.6 per cent of the rediscounted paper, as against 41.5 per cent the month before, while mediumsize bills (in denominations of over $1,000 to $5,000) constituted but 24.6 per cent of the paper rediscounted in March, as against 31.4 per cent in February. Small bills (in amounts up to $250) constituted over 20 per cent of the number, though less than 1 per cent of the total amount of paper rediscounted during the month. Nearly 60 per cent of these small bills, largely trade acceptances, are reported by the Philadelphia bank. About 70 per cent of all the paper, including collateral notes, discounted during March was 15-day paper, i. e., paper maturing within 15 days from the date of discount with the Federal Reserve Banks; less than 9 per cent was 30-day paper; over 10 per cent 60-day paper, and about 9 per cent 90-dsbj paper. Agricultural and live-stock paper maturing after 90 days from date of rediscount with the Federal Reserve Banks (six-month paper) figures only to the extent of $532,279, or about 2 per cent in the total discounts for the month. During the three months ending March, 1917, the amount of six-month paper discounted was $1,595,415, compared with $3,724,500 for the first quarter of 1916 and $2,677,400 for the first quarter in 1915. On the last Friday in March the banks held a total of $20,106,200 of discounted paper, compared with $20,267,200 about the close of February and $21,268,400 on the corresponding date in 1916. Of the total held about the close of the month under review, $3,400,000 were member banks7 collateral notes, $3,482,258 agricultural paper, $1,893,566 live-stock paper, and $11,330,358 industrial and commercial paper proper. Over one-half of the agricultural paper was held by the Richmond and Atlanta banks, while about 80 per cent of all the live-stock paper was held by the Dallas and Kansas City banks. Of the 7,625 banks reported at the end of March, only 315, or slightly over 4 per cent, and 522, or about 7 per cent, availed themselves of their discount privileges during the month and the three months under review. The number of member banks in the three Southern Federal Reserve Districts rediscounting during the month was 162 as against 290 in March, 1916. Boston, New York, and Philadelphia are the only banks which report a larger number of rediscounting members than for March, 1916. 408 FEDERAL RESERVE BULLETIN. MAY 1, 1917. Commercial paper discounted by each Federal Reserve Bank during March, 1917, distributed by sizes. NUMBER OF PIECES AND AMOUNTS. T o §100. o Banks. OverSlOO: O v e r $250 t o §250. j t o $500. Over $500 | Over 31,000 t o §1,000. j t o §2,500. O v e r 510,000. Total. Per cent. i '&i B B B < I Boston New York Philadelphia Cleveland Richmond Atlanta (including New O r l e a n s branch) Chicago St. Louis Minneapolis... ^ Kansas City Dallas San Francisco. Over §2,500 ! Over §5,000 t o §5,000. ; t o 810,000. !6i 77; §157,319, 104! §489,960 ; 2, $160 1; $147| 16. 86,321 5. 400; 211 3,665 25! 10,018 13! 11,197' 27 53,192 31 132,500; ! ; 381.19,721! 107 27,712 83 30,457 68 51,647." 96i 191,725, HOi 459,147 3' 245! 6i 7j 5; 475; 16)940 30' 142;800! 8051 4, 1,418 24' 2,303 92116,654 172: 68, i— 222; 179,660! 239! 413,365; 1391 563,625 4' T 2: 354 48i 7,770' 757; 67,12,191 200! 16 3,091, 9^ 1,568 10: 1,000! 16i 2 9 9 9 ' 2. 131 ! 48i 8,073 1 207: 52: 86: 37 22' 24! 63! 4, 19,628) 35,4701 14,039 8,500| 8,915| 65,144! 1,292| 88 78,517 109! 86,634 20; 15,709 "" 48! 34,599 93;! 25,295 1 508 \ ft 54 §526,209! 43 $2.5,465,215! 49; 377,588, 2,187,023 237,000| '" ~~" ~~" 30! 279,300 ! 52 l,970,637i 53 450,842! 22 423,405| 1151 190,351': 781 288,499;: 49! 355,473' 21 104, 19 : 25 ! 33; 91 : 7: 169,932 32,048. 33,225 50,720' 141,560: 11,345 B 40 167,569 13 124, OOOi 19 11 ! 44,920! 3 19,510, 3 j 9 32,969;.... 18 67,628' 5 44,375i 44 164,8181 31 223,519' 15 6 23,573 4! 21,080 ' 334,526! 578,2481 38,0001 15,000! 122,293 100 ocw 237,295 10,800 329,^3,675,263, 22.4 228; 2,775,583! 16.9 959i 1,404,293. 8.6 140: 2,417,620, 14.8 963! 2,118,552 12.9 455! 1,275,1181 445; 1,174,801 111| 167,517! S3i 103,0911 160! i«nl 332,529; 387 865,865] 24 68,805! 7.8 7.3 1.0 0.6 2.0 5.3 0.4 ! 1 334 2,808,780 251 8,619,442:4,284 16,379,037! Total 440:25,277;! 492 84,8S2: 588269,900 718,530,996 8411,461,722. 620,2,578,038 1.7....! 3.2 . . . . Percent ; 0.2 ...! O.5.... 8.9....: 15.7;.... 17.2;.... 52.6; I 100.0J100.0 M b Member bbanks' k ' coll 2 10,000: 10! 81,500; 6710,235,729 79! 10,327,2291 lateral notes Member banks' collateral notes, trade acceptances, and commodity paper discounted during the month of March, 1917, and 1916, and the three months ending March, 1917, and 1916. Collateral notes. Banks. Trade acceptances. Commodity paper. Total. Trade acceptances. Collateral notes. Banks. Commodity paper. Total. !_ Boston New York Philadelphia Cleveland Richmond Atlanta (including New Orieans branch) Chicago St. Louis §1,423,500 §150,730 287,000 1,605,000 29,256 1,600,000 2,075,000 266,000 1,130,729 1,670,000 JS1,574,23O I 287,000 |1,634,256 ll, 600,000 *14i,"466' §635,740 j 2,852,206 388,355 " " 4 " 276' 227,190 j 881,545 1,130,729 11,674,276 Minneapolis Kansas City Dallas San Francisco §100.000 5,000 165,000 i §25,263 84, 775 12,048 §125,263 5,000 169,775 12,048 Total March, 1917... 10,327,229 ! 739,346 ! 870,753 11,946,328 ! 298,733 I 1,719,000 2,017,733 Total March, 1916... Total Jan.-Mar.,1917. 31,277,920 2,169,888 i 3,258,512 36,706,320 6,366,496 989,233 5,377,263 Total Jan.-Mar.,1916. Amounts of discounted paper, including member banks' collateral notes, held by each Federal Reserve Bank on the last Friday in March, 1917, distributed by classes. Banks. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago Agricultural paper. Livestock paper. Commer- Member cial and banks industrial collateral paper. notes. §3,453,240 §6,190 . 636,075 §56,683 1,001,614 85,595 1,023,660 18,019 "*"8,"986" 778,916 2,060 2,553,644 867,426 1,028,393 75,620 880,408 493,934 28,430 Total. §715,000 §4,168,240 169,000 867,948 1,087,209 1,550,665 500,000 420,000 3,754,620 151,000 2,122,439 65,000 1,467,772 Banks. Agricultural paper. Livestock paper. §59,045 §120,337 St. Louis 192,977 380,096 Minneapolis 447,184 167,513 Kansas City 1,054,582 254,802 Dallas 18,492 97,970 San Francisco... Total 3,482,258 1,893,566 Commer- Member cial and banks industrial collateral paper. notes. §82,593 SI, 275,000 425,707 15,031 5,000 233,305 100,000 157,655 11,330,358 3,400,000 Total. §1,536,975 998,780 634,728 1,642,689 274,117 20,106,182 MAY 409 FEDERAL RESERVE BULLETIN. l , 10.17 Commercial paper discounted during the three months ending March, 1917, by each Federal Reserve Bank, distributed by States and maturities as of date of discount. Districts and States. District No. 1—Boston: Connecticut Maine Massachusetts New Hampshire Rhode Island Vermont Total. District No. 2—New York: Connecticut New Jersey New York Total. District No. 3—Philadelphia: Delaware New Jersey Pennsylvania Total. District No. 4—Cleveland: Kentucky Ohio Pennsylvania West Virginia Total. District No. 5—Richmond: District of Columbia... Maryland South Carolina North Carolina Virginia West Virginia Total. District No. 6—Atlanta: Alabama Florida Georgia Louisiana Mississippi Tennessee Total. District No. 7—Chicago: Illinois I... Indiana Number of member banks at end of March. : Total commercial paper discounted. From 31 to 60 days. S i l l , 790 ! §241,932 17 48 399 31 ! 6,546,800 \ 1,415,791 | 1,402,816 15 : 132 478 • 3 7 20 025 16,500 61,366 37,085 27,300 54,101 370,702 30 | 4,583,176 : 114,951 | 452,103 24 72 536 5 i 22,927 i 24 , 4,042,009 j 144,686 255,226 298,495 j 44,973 354,205 i 86,170 | 511,081 7,286 j 4,745,556 632 29 j 4,065,596 j 399,912 652,700 | 131,143 I 7,286 j 5,250,637 475 853,787 1,321 ; 173,546 ! 5,000 I 854,262 179,867 I 68 373 I 299 13 j . 75,200 I 31,848 I 4,476,128 • l !, 6,097,854 14 ; 6,097,854 I 15 96 80 81 144 102 9 40 29 16 518 98 200,000 1,285,000 324,268 1,009,040 9,981,000 83,267 181,051 1,335,968 L, * W , UVJO 507,846 94,432 13,912 32,984 686,092 515,974 66,395 12,859,328 1,186,277 329,669 775,639 528,125 613,350 50,000 100,100 37,977 46,420 269,243 40,567 79 I 1,796,883 j 382 1,046 ! i I ;. !. is ; SO ; 20 . 59 37,873 j i l 725,837 19,061 46,706 117,934 5,000 3,839,175| 914,538| 909,377 3,798 i I ! i 3,044 ! 2,998 ! ' •- 13,545 ! 7,204,934 151,772 j 132)602 I 1,056,267 I | 783,539 I 90,695 | 448,951 ! 631,637 89,882 ! 3,492,497 i j w | I ij ; 452,135 63,420 942,400 t7i.fi, I\J\J 308760 308,760 | 91,852 j 139,860 j 1,775 I 2,878,174 1,565 i 10,234.087 3,900 93,222 ! 18,560,166 1,034,605 364,603 2,441,049 988,485 50,000 407,474 22,605 5,250 35,749 10,229 37,789 111,622 432,080 j 1.009,046 1, 270,517 1,018 21,480 3,546,160 5,586,096 59,406 | 2,206,4(54 i 2,214,875 192,209 73,874 635,532 POO, UOA 15,579 5,415 | J j 1,796 59,406 | 13,545 I 7,198,138 | I 5,000 3,900 o f\r\n ' 93 ; 55; 102 ! 22 j 18 s 92 ! 67 157 61 65 430,451 j I 753 Total From 16 to 30 days. Within 15 days. 21 6,356,069 1,291,688 j 1,040,994 3 i 85,000 i 48,230 1 ' i 15,000 3 ! 55,349 I 12,313 I 56,660 I owa Michigan Wisconsin Total. Maturities. 350,382 66 • 157 316 195 354 76 105 District No. 8—St. Louis: Arkansas Illinois Indiana Kentucky Mississippi Missouri Tennessee Number of banks accommodated during quarter ending Mar. 31. j 23,804 48,413 69,247 15,000 6,443 335,395 49,142 62,808 62,584 2,100 512,027 | 209,242; 15,392 25,159 8,107 15,768 i7,i; 5,000 : 5,256,216 1,446,871 148,867 236,195 3,746,678 59,278 162,907 > 5,637,889 953,461 52,723 40,000 i 1,125,000 ; 385,099 ! 1,000 ; 11,119 ', 150,967 j 8,000 i 35,366 | 101,706 i 18,100 i 96,848 i I i 67,100 32,685 '. 1,301,018 ! 637,772 31 I 2,461,974 j 168,378 . 187,673 i 138,823 | 55,226 • 3,012,074 410 FEDERAL RESERVE BULLETIN." MAY 1, 19 IT. Commercial paper discounted during the three months ending March, 1917, by each Federal Reserve Bank, distributed by States and maturities as of date of discount—Continued. Districts and Sta,tes. District No. 9—Minneapolis: Michigan Minnesota North Dakota South Dakota Montana Wisconsin , , , Total District No. 10—Kansas City: Colorado Kansas Missouri Nebraska New Mexico Oklahoma Wyoming Total District No. ll~Dallas: Arizona Louisiana New Mexico Oklahoma Texas Total District No. 12—San Francisco: Alaska Arizona California Idaho Nevada , Oregon Utah Washington Total Maturities. Number of banks accommodated during quarter ending ! Mar. 31. Number i of i member banks at end of March. Within ; 15 days, i 12 28 32 541 619 j ; ! | I i! 6! 263 1 57 1 10 ! 81 : 23 ! 44 i 83,289 i. 160,625 i $86,050 44,490 i 24,302 20,118 i 70,625 8,787 j 18,788 1,056,109 j 588,840 \ 1,141,919 237,309 ! 199,765 j 3,223,942 $25,263 2,894,739 136,378 119,291 41,870 6,401- 60,223 , 139,102 j 1,282 j 606 ! 2;952 j 1,621 28,742 4,552 10,464 85,000 ! 56,431 439 i 1,768 I 977 | 58,280 i 28,225 ! 606 i 8,258 i 6 252 13,877 i 51, 367 135,970 ' 145,829 ! 163,535 | 101,610 105,049 | 246,378 I 20,199 ! 293,324 43,073 52,080 20.129 348,967 i_ 32 762,401 T 43.810 56 | 13 3 662,016; 71,142 662,016 j 114,952 | 5,445 22,129 3,578 25,000 3 77 , 518 ! $2,081 I 1,014,028 ! 35,000 ! $2,388 i $17,505 569,929 i 1,064,107 14,525 | 18,061 1,998 | 26,550 14,295 1,401 5,000 j . 122 I 224 j 54 i 192 ; 9, 303 ! 36 I 940 i From 31 to 60 d 32 | 289 ! 156 i 125 I 86 ! 37 i 725 ! From 16to30 i Total | commer! cial After j paper dis90 days, j counted. From 61 to 90 days. 92,485 | 27,517 I 137,573 i 301,385 1,373 i 3,230 ! 4,601 433,232 | 454,250 ! 485,011 j 2,105,651 527,090 | 71,014 2,890 ! 19 481,767 . 25,707 73,904. ! 69,057 20,941 43,895 j 26,700 ] 211,540 51,219 4,660 3,640 I 36,190 ::::::::: 30,445 | 625,814 j 2,411,6 94,658 i 74,235 | i 298,949 MAY 1, 3 917. 411 FEDERAL RESERVE BULLETIN. Commercial paper discounted by each Federal Reserve Bank during the three months ending March, 1917, distributed bu maturities as of dale of discount—Continued. RECAPITULA TION. ; Number i of ; member ; banks. ! at end of ! March, Districts and cities. No. No. No. No. No. No. No. No. No. No. No. No. 1—Boston 2—New York 3—Philadelphia 4—Cleveland 5—Richmond 6—Atlanta 7—Chicago 8—St. Louis 9—Minneapolis 10—Kansas City 11—Dallas 12—San Francisco Maturities. Number of banks accommodated Within 15 From 16 to From31 to j From61 to! After 90 during days. 30 days. 60 days. ; 90 days. i quarter. • days. ! •: : ! ' : ! i j j Total for 3 months ending March, j 1917 :. Per cent i 625 632 753 518 382 1.046 468 725 940 619 518 31 30 29 14 98 79 59 31 44 32 56 19 7,625 522 $6,546,800 ;!: 51,415.791 81,402,816 3864,806 4,583,176 - 114,951 452,103 430,451 4,065,596 | 399,912 652,700 131,143 6,097,854 i 854,262 179,867 59,406 12,859,328 i 1,186,277 2,206,464 2,214,875 1,796,883 ' 432,080 1,009,046 1,906,585 3,839,175 914,538 512,027 209,242 2,461,974 168,378 187,673 138,823 1,056,109 588,840 1,141,919 237,309 145,829 163,535 101,610 105,049 662,016 114,952 527,090 481,767 30,445 25,707 73,904 94,658 44,145,185 5,185 j 6,379,223 665.5 55 j 94 9.4 Total for 3 months ending March, 1916 Total for 3 months ending March, 1915 8,447,219 12.5 4,425,100 $5,415 7,286 13.545 93', 222 111,622 162,907 55,226 199,765 246,378 625,814 74,235 6,874,114 | 1,595,415 10.2 i 2.4 Total eommerical paper dis- Per cent. counted. $10,230,213 5,586,096 5,256,637 7,204,934 18,560,166 5,256,216 5,637,889 3,012,074 3,223,942 762,401 2,411,639 298,949 15.2 8.3 7.8 10.7 27.5 7.8 8.3 4.5 4.8 1.1 3.6 .4 67,441,156 100.0 9,094,300 10,922,900 3,724,500 | 28,166,800 8,865,400 14,306,100 10,793,900 2,677,400 I 36,642,800 Distribution, by sizes, of bills bought in open market by all Federal Reserve Banks during March, 1917, and the three months ending March, 1917 and 1916. I T o f>5,000. To $10,000. To 825,000. To .¥50,000. ! To S100,000. Over §100,000. 1 a> 8 ! S Bankers' acceptTrade acceptances. Total. ! Acceptances bought in open market* 369 20 $823,228! 53,278; 154 51,218,636 21 162,393 Total, March, i 1917 1 876,506| 175 Percent. 3.11...... February, 1917 i 819 2,175,639| 777! January, 1917 j 390 1,023,210! 483 Total, 3 months j ending March, j 4,075 355| 1,435 1917. Total, 3 months i ending March, i 1916 .'.I 749 2,278,542| 348 $6,756,3361 is 220,070: oon rwrv 164 $r, 914,0481 n 0.11 A77: 241,077;. 8&§6,801,912 171 7,185,125! 86; 6,801,912 ' 24.2 180J15,273,481 *I 8 25 $4,930,660 l,146!: i $27,474,8201 9 7 . 6 63 a 676,818| 28,151,638 303 6,976,406; 1,381,029 4.9 6,324,018 1,248 22,367,962! 300 5,238,200! 1,706,069 40116,483,974| 152 6,898,412] 9,411,316 1,91134,582,574J 724 30,567,511; 314:25,966,908; 8514,802,533 6,007; 119,405,997| 205 8,227,999! 100 8,072,470 37| 7,105,5 013! 5.012,301 7G9 14,240,484: 3,891,515 1 1 25; 4,930,660 1,209 ...I 17.5 491 8,012,105 3,474 11! 1,859,768 1,384| I 2,473i 2.4 100.0 70,637,179! 20,617,180! | 44,937.394 * Of the above amount, bankers' acceptances totaling 821,621,188 were based on imports and exports and 85,853,632 on domestic trade transactions. 2 Of the above amount, trade acceptances totaling $671,418 were drawn abroad on importers in the United States and 85,400 were based on domestic trade transactions. 412 FEDERAL RESERVE BULLETIN. MAYI, 3917. ACCEPTANCES. Acceptances bought in open market and held by Federal Reserve Banks as per schedules on file with the Federal Reserve Board on dates specified, distributed by classes of accepting institutions. Bankers' acceptances. Date. Member banks. Nonmember trust companies. Nonmenber State banks. 820,000 189,000 516,000 267,000 407,COO 305,000 898,000 331,000 172,000 $10,000 10,000 10,000 ""20*666 20,000 132,000 253,000 275,000 S110,000 110,000 192,000 161,000 352,000 472,000 343,000 204,000 396,000 7,160,000 7,876,000 8,670,000 13,573,000 15,400,000 17,029,000 18,921,000 19,060,000 20,356,000 21,782,000 29,474,000 33,232,000 362,000 336,000 408,000 473,000 585,000 644,000 471,000 738,000 726,000 712,000 1,014,000 1,630,000 822,000 1,456,000 1,781,000 3,262,000 3,430,000 7,007,000 11,830,000 13,940,000 12,491,000 9,944,000 12,147,000 16,069,000 34,625,000 32,467,000 30,691,000 26,286,000 22,744,000 23,511,000 33,473,000 35,745,000 36,478,000 32,518,000 28,769,000 24,175,000 22,525,000 20,328,000 19,424,000 15,708,000 1,502,000 1,325,000 1,245,000 1,146,000 1,054,000 972,000 1,265,000 1,268,000 1,094,000 1,090,000 845,000 735,000 645,000 689,000 681,000 638,000 18,224,000 16,915,000 15,862,000 14,119,000 12,949,000 13,775,000 17,952,000 21,842,000 20,389,000 20,581,000 19,503,000 17,607,000 17,515,000 16,830,000 15,427,000 14,470,000 Private banks. Foreign bank branches and agencies. Total. Trade acceptances bought in open market. Total acceptances. 1915. F e b . 22 Apr. 5 May 3 June 7 July 3 Aug. 2 Sept. 6 Oct. 4 Nov. 1 Dec. 6 •193,000 3,653,000 5,038,000 5,242,000 4,342,000 5,350,000 6,087,000 9,000,000 8,477,000 12,311,000 : 893,000 . 11,593,000 . 13,347,000 . 9,960,000 . 9,770,000 .: 11,129,000 . 12,884,000 .: 14,373,000 .1 13,265,000 .! 18,154,000 893,000 11,593,000 13,347,000 9,960.000 9,770,000 11,129,000 12,884,000 1 14,373,000 13,265,000 18,154,000 i 1916. 15,494,000 15; 681,000 I 17,182,000 i 21,000,000 | 24,875,000 i 24,680,000 32,989,000 j 39,695,000 ! 41,413,000 37,798,000 37,770,000 47,748,000 Jan. 3... Feb. 7.. Mar. 6.. Apr. 3 . . May 1.. June 5.. July 3 . . Aug. 7.. Sept. 4.. Oct. 2 . . Nov. 6.. Dec. 4 . . , , 1917. Jan. 1 Jan. 8 Jan. 15 Jan. 22 Jan. 29 Feb. 5 F e b . 12 F e b . 19 F e b . 26 Mar. 5 Mar. 12 Mar. 19 Mar. 26 Apr. 2 Apr. 9 Apr. 16 i i j ! j i i ! '•• 66,803,000 60,066,000 59,710,000 56,334,000 52,439,000 50,361,000 54,945,000 59,165,000 ! 59,498,000 i 53,288,000 i 50,130,000 \ 46,171,000 ! 43,471,000 ! 43,979,000 42,264,000 ,' 38,865,000 , , , ! 23,838,000 ; 25,349,000 S489,000 ! 28,041,000 I 462,000 j 38,308,000 722,000 1 44,290,000 1,477,000 49,360,000 2,208,000 64,211,000 3,422,000 73,483,000 4,225,000 ! 74,986,000 3,673,000 ! 70,236,000 2,306,000 2,378,000 I 80,405,000 I 98,679,000 4,487,000 I il21,154,000 1110,773,000 1107,508,000 i 97,885,000 89,186,000 §140,000 88,759,000 668,000 1108,303,000 677,000 '118,697,000 677,000 1118,136,000 354,000 107,837.000 296,000 99,543,000 22S, 000 88,916,000 167,000 84,323,000 200,000 82,026,000 200,000 77,996,000 200,000 69,881,000 4,585,000 4,249,000 4,386,000 4,102,000 4,041,000 4,041,000 4,896,000 4,982,000 5,068,000 2,535,000 2,359,000 1,908,000 1,295,000 1,144,000 1,344,000 1,316,000 23,838,000 25,838,000 28,503,000 39,030,000 45,767,000 51,568,000 67,633,000 77,658,000 78,659,000 72,542,000 82,78-3 000 103,166,000 125,739,000 115,022,000 111,894,000 101,987,000 93,227,000 92,800,000 113,199,000 123,679,000 123,204,000 110,366,000 101,902,000 90,824,000 85,618,000 83,170,000 79,340,000 71,197,000 413 FEDERAL RESERVE BULLETIN". MAY 1,1017 Amounts of paper discounted and acceptances and warrants bought by each Federal Reserve Bank during March, 1917, distributed by maturities. 15-day maturities. Federal Reserve Banks. Discounts. Total. Percent 13,694,658 Warrants. j AcceptI. ances. , I S3,810,628 I 2, SOL, 099 2,667,902 3,416,237 2,136,837 448,953 1,391,246 1J670J566 102,081 60,223 182,88(5 Boston New York Philadelphia Cleveland Richmond Atlanta (including New Orleans branch) Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 30-day maturities. Total. ! §298,485 23.139 74' 442 572,856 430,766 108,269 552,993 8,061 13,024 142,747 87,179 8,578 1.826,891 248,614 987,128 142,365 2,184,237 541,52 i. 1,363,796 192.109 650', 000 70,390 18,778,879 2,320,539 33.6 8,466,068 $3,816,628 ! 2,807,305 .' 2,667,902 3,416.237 136;837 526,968 391,246 i 1)670,566 i 102,081 ! 60,223 I 182,886 86,206 j ! ! 78,015 i ! ! ! i 81,221 Disj Acceptoounts. j ances. Discounts. Acceptances. Boston New York Philadelphia Cleveland Richmond Atlanta (including New Orleans branch) Chicago St. Louis Minneapolis Kansas City Dallas.....' San Francisco I $574,161 31,179,264 220,115 ! 144,973 820,693 ! 234,570 156,010 ! 9,249 634,487 ! 830,918 741,415 i 352,060 433,004 i 147,414 226,026 i 71,133 850,000 ! 41,997 j 39,378 i 314,122 472,308 ; 13,630 T ot al Per cent '. : 2,773,605 Warrants. Discounts. Acceptances. Warrants. Total. Discounts. i Accepti ances. 753,425 365,088 055,203 165,259 465,405 093,475 580,418 297,150 891,997 39,378 314,122 485,938 3409,489 52,151, 92.305 1,288, 30J769 2,585, 16,611 694, 760,054 835, 590,678 671, 141,887 1,320, 60,705 ' 183, 20,193 1,202, 35,190 75, 202,637 44, 24,007 694, Acceptances. 41,158 115,190 26,992 25,796 59,991 ! 244,041 (1,839,160 1,541,118 2,305,530 1,837,517 203,091 337,529 1,030,865 68,805 5,125 14,136,365 ! 25.3 Per cent. Warrants. Total. Total. 43.1 42.2 75.3 6.9 69.8 95.9 2.1 56.9 57.7 24.7 93.1 30.2 4.1 97.9 2,032,077 3,160,135 601,545 2,702,961 145,390 44; 458 3.242,504 Total. '82,560,596 ! 1,380,781 ! 2,616,577 ! 711,023 ! 1,595', 204 i 1,261,801 $5,125 j 1,467,147 I 244,175 ! 1,223,154 ! 110,190 I 247,095 I 718,619 3,573,195 5,470,790 2,439,062 2,906,052 482,9 L9 1,075,323 3,311,309 532,279 2,121,972 1,025,898 13,680,149 26,706,266 28.151 ! 6.6 ..'.... >5,098,763 3,062,583 3,009,293 4,017,620 4,193,552 War- I rants, j 50. 2 36.5 60.3 17.1 46.6 Total. Per cent Discounts. 49. 8 83.5 39. 4 66.1 53.4 41,158 43,200 71,990 26,992 25,796 59,991 244,041 21,990 1,817,170 ! $1,067 S216,667 82,575 ! 220,852 44,935 1,023,323 il, 070,925 | 34,977 10,786,607 19.3 S10,256,025 185,157,262 4,825,997 I 1,763,414 7, (522,164 I 4,610,296 82,575 6,073,665 i 1,037,722 1,023,323 ! 3,653,874 7, 847, 426 Boston New York Philadelphia Cleveland Richmond Atlanta (including New Orleans branch) Chicago St. Louis Minneapolis , Kansas Citv Dallas ; San Francisco SI, 067 1,610 2,667 34,977 Total. Totals. Over 90-day maturities. Federal Reserve Banks. 259,014 i S, 506,927 2,385,185 11,746,055 •' 15. 2 5,733,322 125,376 271,753 061,570 715,221 615,003 649,793 916,789 200,170 663,024 213,137 87,179 267,592 90-day maturities. 60-day maturities. Federal Reserve Banks. Total. 5,125 1,031,023 55,888.927 i.00.0 47.8 ; 50.3 i.... ! i 0.3 1 16.8 i 100.0 100.0 100.0 100.0 100.0 100. a 100.0 100.0 100.0 LOO. 0 100.0 100.0 1.9 100.0 414 FEDERAL RESERVE BULLETIN. Maturities 1, KM 7. of discounted bills, acceptances, and municipal warrants held by the Federal Reserve Banks Mar. SO, 1917. on Friday. [In thousands of dollars, i. e., 000's omitted.] 31 to 60 days. 1 to 15 days. Banks. Total Per cent MuBills Acnicdis- cept- ipal Total. countances war- Total. ed. bought. rants. ! Bills j Ac! dis- | eept; count- i ances ed. ! bought. i Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco j ' 3,152 | ' 360 I I 787 ! I 1,198 j j 1,429 | i 645 | i 934 i ; 1,317 ; : 344 i : 138 I ".! 358 I ! 28 i 110,690 ! 20,371 I ! Over 90 days Banks. Boston New York.. . Philadelphia... Cleveland Richmond Atlanta. . . Chicago St. Louis Minneapolis... Kansas City... Dallas San Francisco. Total Pjer cent 61 to 90 days. Bills Acdis- ceptcount- ances ed. i r £ m s' 825 1,238 15 1 153 j 1,763 ! 127 1,174 I 4,663 2,580 ! 1,267 607 ! 1,827 125 ! 461 1,151 782 158 152 225 380 75 411 44 558 1,716 1,945 5,879 3,865 2,250 459 894 3,254 1,011 530 531 712 2,355 31,099 25.8 1,654 10,079 111,952 23,685 19.7 Percentages. Bills discounted. Acceptances bought. Municipal warrants. Total. i 316 3 7 85 75 70 27 91 141 272 54 55 42 18 16 334 431 120 71 153 76 257 81 Total. Munic- Total. ;^: i 4,723 7,783 3,273 1,702 2,920 1,917 2,139 1,260 2,060 1,026 1,176 1,120 212 51 20 203 ! 2,211 316 6 1,245 100 75 223 239 91 192 292 257 3,036 2.6 Per Amount. Per Amount. Per Amount, ^ j . Amount. cent. cent. cent. 4,168 868 1,087 1,551 3,754 2,123 1,467 1,537 999 635 1,643 274 20.7 4.3 5.4 7.7 18.7 10.6 7.3 . 7.6 4.9 3.2 8.2 1.4 13,146 18,913 11,117 5,212 6,376 3,584 8,002 3,936 4,129 2,228 1,441 6,389 15.6 22.4 13.2 6.2 7.5 4.2 9.5 4.7 4.8 2.6 1.7 7.6 298 5,199 1,378 3,066 15 7 2,653 1,094 177 486 506 836 20,106 100.0 84,473 100.0 15,715 ! 1.9 I 33.1 8.8 ! 19.5 ! 0.1 i .0 ! 16.9 ! 7.0 I 1.0 3.1 3.2 5.4 17,612 24,980 13,582 9,829 10,145 5,714 12,122 6,567 5,305 3,349 3,590 7,499 100.0 120,294 100 0 ; MuBills Acdis- cept- nicipal Total. count- ances wared. bought. rants. i 14.6 '' 20.8 : 11.3 8.2 i 8.4 i 4.7 ! 10.0 !• 5.5 i 4.4 ; 2.8 : 3.1 6.2 23.7 3.5 8.0 15.8 37.0 37.2 12.1 23.4 18.8 19.0 45.7 3.7 1.6 75.7 81.9 53.0 62. 9 62.7 66.0 59.9 77.8 06. 5 40.1 85.2 74.7 100.0 20.8 100.0 10.1 . 100.0 100.0 31.2 100.0 0.1 100.0 0.1 100.0 21.9 100.0 16.7 100.0 3.4 100.0 14.5 100.0 14.2 100.0 11.1 : 16.7 70.2 13.1 | 100.0 100.0 MAY 1,1917. 415 FEDERAL RESERVE BULLETIN. Total investment operations of each Federal Reserve Bank during the month of March, 1917 and 1916, and the three months ending March, 1917 and 1916. Federal Reserve Banks. Bankers' 85,098,763 3,062,583 3,009,293 4,017,620 4,193,552 1,541,118 2,305,530 1,837,517 203,091 337,529 1,030,865 68,805 85,157,262 1,763,414 4,610,296 1,037,722 3,653,874 2,026,077 3,160,135 601,545 2,702,961 145,390 44,458 2,571,086 Boston New York Philadelphia Cleveland Richmond ; Atlanta (including New Orleans branch) Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Total, Total, Total, Total, March, 1917 March, 1916 3 months ending March, 1917., 3 months ending March, 1916.. Municipal warrants bought. Bills bought in open market. Bills discounted for member banks. Trade I accept- ! ances. ...j $5,157,262 i ...I 1,763,414 I 4,610,296 I 32,575 1,037,722 1,018,808 3,653,874 $5,400 2,032,077 j! 3,160,135 ! 601,545 I 2,702,961 i ! 145,390 i | 44,458 ! 671,418 i 3,242,504 • 676,818 524,000 2,564,345 564345 1,195,000 26,706,266 !! 27,474,820 9,387,300 22,394,100 67,441,156 116,841,651 28,166,900 43,742,400 i 28,151,638 I 22,918,100 119,405,997 119405997 ! 44,937,400 i 1,021,383 I 10,408,000 i 14,021,968 14021968 | 30,309,100 All other. Total. 84,515 $2,575 1,023,323 5,125 5,125 .| 9,640 1,031,023 8,700 10,425,900 2,040 ' 590,177 14,614,185 265,600 i 82,400 30,657,100 •"S9,"266"| Total investment operations. United States bonds and Treasury notes. Federal Reserve Banks. State. City. Total, | Certificates | 2 per cent. .; 3 per cent. 4 per cent. ! ofindebt- jl-yearnotes. j edness. Total. March, 1917. March, 1916. March, : March, 1917. 1916. ' ! i \ S7,295,400 15,267,200 6,542,700 2,854,100 3,621,900 Per ct. , Per ct. 12.5 ; 14.3 25.2:! 29.9 10.6 12.8 8.4 : 5.6 7.2 9.2 ; 5,543,195 i 11,932,290 i 4,939,062 i 2,951,062 I 4,077,659 i 3,638,073 j 5,811,309 ! 3,384,800 3,153,200 1,313,800 1,489,700 3,317,850 1,477,500 1,263,000 I Boston... 81,057,750 ! New York 2,440,000 I Philadelphia. j 1,098,260 i Cleveland j ! Richmond ; 710,500 ! Atlanta (including New Or- J i leans branch) j 120,000 I Chicago i 1,461,500 j St. Louis ; Minneapolis 20,010 ! Kansas City 1,094,740 • Dallas 562,750 ' San Francisco | Total, March, 1917 Total, March, 1916 Total, 3 months ending March, 1917 Total, 3 months ending March, 1916 : 8,565,510 7,400,850 !' 8,057,70 $3,000,000 | ji $4,057,750 20,000,000 SI, 532,000 i 24,022,000 ! 4,598,260 3,500,000 3,500,000 3,500,000 2,710,500 2,000,000 §50,000 1,500,000 5,000,000 2,500,000 0> $25,000 350,000 j 2,500,000 2,000,000 2,500,000 50,000 ! 766,000 | 25,000 83,000 i i 11,080,160 ; 111,440 i 25,250 ' I i 18,576,900 ] 2,908,880 2,888,000 I 48,000,000 1,882,000 48,000,000 2,338,000 1,970,000 6,461,500 2,500,000 45,010 3,594,740 2,662,750 2,500,000 814,313,775 28,847,997 12,220,424 9,578,665 10,557,926 ! 2.6 •. 6.7 6.2 2.6 2.9 6.4 2.9 2.5 ! 58,522,510 114,411,437 i i 8,249,850 i 50,981,150 j 100.0 ! 61,554,850 100.0 4.8 j 10.5 ! 4.3 : 3.6 j 3.2 5.1 ! I 24,373,780 i Certificates of indebtedness amounting to $2,000,000 received on Apr. 2. Conversion operations of each Federal Reserve Bank for April, 1917, total conversions^ since the beginning of the present calerudar year, and the balance of allotments made by the Federal Reserve Board which may be converted in 1917. 2-per cent bonds converted on Apr. 1. Conversion bonds* and 1-year i Treasury notes issued to the | banks on Apr. 1. Consols •! Panamas of of 1930. j 1936-1938. Conversion bonds. Federal Reserve Bank. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco. Total §1,057,000 ; l! 092,' 000 60,000 10,400 832,000 1,106,300 221,600 $325,000 6,200 763,300 Total. Total 1-year Treasury April connotes. versions. ! Total January conversions. Total bond Amounts jj conversions allotted byl during Federal present calendar Board" year. Board, i ml9 i7. ! 1^1,057,000 2,510,500 1,098,200 823,300 !. . '. : . 10.400 832,000 1,106,300 221,600 ! "I* •I; j 6,564,800 ; 1,094,500 I 7,659,300 $529,000 8528,000 $1,057,000 ! 31,332,000 1,255,500 1,255,000 2,510,500 1,042,000 1,651,000 549,200 549,000 1,098,200 823,300 ; 2,403,900 412,300 ! 411,000 1,799.100 16*4661 ioj-ioo"; 1,325;100 832,000 ;j 2,890,000 416,000 I 416.000 553)000 1,106.300 553,300 221,600 i 1,060,000 110,000 111,600 1,642,900 1,451,200 2,000,000 $2,389,000 $2,696,200 I $307,200 3,552.500 6,412,900 !: 2,860,400 2,749)200 2,814,200 65,000 3,227,200 3,227,200 ! 1,799,100 1,799,100 . 1,335,500 1,335,500 ! 3,722.000 3,722,100 ' 100 1,106,300 1,504,600 398,300 1,281,600 1,281,600 i 1,642,900 1,642,900 ' 1,451,200 1,451,200 2,000,000 2,112,500 : 112,500 3,837,300 I 3.822,000 j 7,659,300 | 18,597,200 26,256,500 '130,000,000 • 3,743,500 416 FEDERAL RESERVE BULLETIN. MAY 1, 1917. United States bonds, notes, and certificates of indebtedness held by all Federal Reserve Banks on Mar. 31, 1917, distributed by maturities. 2 per cent I 2 per cent consols of Panamas 1930. 1936-38. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas. San Francisco S750 2,188,550 1,092,000 26,400 915,100 170,000 1,862,500 522.900 33,650 7,105,850 2,450,900 2,428,750 18,794,350 Total. 2 per cent i i certifi! 3 per cent )3 per cent cates of loan of loan of indebted1918. 1961. ness. 83,000,000 20,000,000 3,500,000 3,500,000 "237," 666' 2,000,000 1,500,000 * "367," 3*66' 5,000,000 2,500,000 *""i6,"260" 2,500,000 j 22; 240 2,000,000 I 281,500 2,500,000 3529.000 2,600 2,586,560 2,581,000 1,080,000 1,194,180 i ""soo" 1,255,560 ! 48,000,000 i 7,491,740 I 900 Total S400 Total. S2,194,000 1,563,000 1,999,000 1,290,000 152,369,200 1,969,000 ! 1,491,000 ' 3,226,000 1,768,000 891,000 1,230,000 206,250 1,784,000 825,000 1,430,000 I 1,500,000 j §50,000 3325,000 6,260 Amount of United States bonds with circulation privilege: 2 per cent 3 per cent 4 per cent 3 per cent conversion 3 per cent • 4 per cent 1-year j loan of bonds of notes, i 1925. 1946-47.1 427, 600, 3, 838, 1,233, 3,634,300 20,567,000 So,723,750 24,123,550 6,597,260 9,774.760 5,121,100 3,161,000 15,232.600 5,593; 900 2,684,040 13,075,590 7,396,000 6,428,750 101,912,300 5,168,450 i Amount of United States bonds, certificates of indebtedness, $20,049,910 I without circulation privilege: 7,491,740 | 3 per cent of 1961 3 per cent conversion 5,168,450 j 3 per cent 1-year notes 2 per cent certificates of indebtedness 32,710,100 \ Total and notes S900 3,634,300 20,567,000 48,000,000 72,202,200 1 Amounts shown for 3 per cent conversion bonds of 1946-47 are exclusive of the conversions of Apr. 1, except for the Boston and Chicago banks. S2,000,000 of United States certificates of indebtedness entered on books Apr. 2, 1917. 2 RESOURCES AND LIABILITIES. Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve System, at close of business on Mar. 30 to Apr. Fridays, 20, 1917. RESOURCES. [In thousands of dollars, i. e., 000's omitted.] I Gold coin and certificates in vault: Mar.30 Apr. 5-6 Apr. 13 Apr.20 Gold settlement fund: Mar.30 Apr. 5-6 Apr.-13 Apr.20 Gold redemption fund: Mar.30 Apr. 5-6 Apr. 13 Apr.20 Legal-tender notes, silver, etc.: Mar.30 Apr.5-6 Apr.13 Apr.20 Total reserve: Mar.30 Apr.5-6 Apr.13 Apr.20 Five per cent redemption fund against Federal reserve bank notes: Mar.30 Apr.5-6 Apr.13 Apr.20 Chicago. San St. I Minne- Kansas Louis. | apolis. City. Dallas. Francisco. 6,207 6,128 6,171 6,139 31,808 31,053 27,361 29,557 13,132 12,815 12,526 12,070 11,811 12,890 11,913 11,975 7,809 7,844 7,943 7,750 7,811 8,166 14,817 15,034 13,502 15,000 374,903 362,472 338,369 330,152 4,019 4,345 3,168 5,631 35,129 33,457 36,979 40,752 j 6,797 5,046 2,394 5,973 11,005 10,376 8,817 6,351 26,512 24 902 26,487 25,259 7,111 6,405 6,732 5,454 12,619 8,786 7,895 10,227 200,061 200,125 198,271 206,830 155 256 255 253 168 165 167 163 77 75 74 71 15 15 15 24 2,414 2,505 2,434 .2,651 586 398 298 285 74 37 34 1,100 1,124 1,127 1,067 22 65 74 9,282 19,110 21,136 24,462 | 23,557 i 23,920 I 21,283 ' 18,864 34,563 33,029 34,500 33,300 16,231 27,473 15,354 23,900 15,744 | 21,486 14,758 i .25,337 586,660 584,212 560,210 564,095 New I Phila- : Clove- j RichJBosfcon. York. Idelphia.; land. ! mond. Atlanta. 5,730 5,766 5,792 5,984 16,093 16,248 15,819 j 15,915 j Total. ! 14,541 13,350 13,495 12,513 219,109 ! 24,065 ; 17,925 209,993 22,020 ! 17,785 189,519 I 24,072 | 18,398 180,192 i 22,749 , 17,963 20,455 15,940 19,814 20,552 16,151 26,443 27,692 21,992 ; ! i | 14,255 20,520 17,457 18,071 29,915 27,657 25,017 30,653 50 50 50 50 250 250 250 250 ' I ! I 250 250 250 250 31 25 14 271 503 2,116 13,220 14,947 18,786 199 251 236 334 78 88 94 103 35,315 29,611 33,862 33,513 237,626 249,906 232,408 221,220 38,769 43,041 42,015 41,404 47,949 45,555 43,523 48,778 407 | 396 ! 377 i 619 655 652 845 200 200 200 200 192 168 130 118 111 i 1,551 983 85 ! 994 112 ! 816 1,416 927 1,150 1,349 1,766 1,620 1,591 1,092 68,553 65,637 65,690 71,858 21,887 19,649 16,641 19,253 22,341 22,499 22,073 22,379 | i i i 12,396 12,111 10,985 .13,431 jj I ! J 7,815 .! 300 .; .! J 3oo 300 300 100 100 100 100 400 400 400 400 1, 10:! 7 417 FEDERAL BESEEVE BULLETIN. Resources and liabilities of each Federal Reserve Bant and of the Federal Reserve System at close of business on Fridays, Mar. SO to Apr. 20, 1917—Continued. RESOURCES—C! >nUrmod. [In thousands of dollars, i. e., 000's omitted.] New Phila- ; Clove- • RichI Boston.: York. Idelphia.' land. mono.. Bills discounted--Members: I Mar. 30 ! 4,168 • 868 Apr. 5-0 ' 2,002 857 Apr. 13 ' 2,703 " 740 Apr. 20 ; 6,307 1,798 Bills bought ir. open market: Mar. 30 ; 13,146 18,913 Apr.5-6 ! 11,816 18,298 ! Apr. 13 10,597 " 18,993 Apr. 20 i 10,367 14,982 United States bonds: i : Mar. 30 81 Apr. 5-6 ' 530 1,306 ; Apr. 13 530 1,306 Apr. 20 ! 530 1,306 One-year United States Treasury notes: i 31 Mar. 30 '.. 1.606 2,788 Apr.5-6 ; 2)194 Apr. 13 : 2.194 2,788 ; Apr. 20 2:194 2)788 United States cert!f.cates of indobi- [ ; : edness: Apr!! 5-6 ; 3.000 20.000 Apri] 13 ' JUttO 20,000 Apr. 20 i 3,000 20.000 Municipal warrants: ; Mar. 30 ' 298 5,199 : A or. 5-6 . 1.78' 5,174 s Apr. 11* ...' 178 5:174 Apr.20 ; 1 7 8 ! 5:i54 Federal iicservc •H)V(:s---tct:: ; Mar. 30 ; 1.754 : 10.035 1,227 10.212 2,103 Apr. 13 1,337 Apr. 20 9,6f,9 Due from other ;A>.'Jo:\i! Reserve Hanks—net: Mar. 30... 3, II4 Apr. 5-0 Apr. 13 ' 3-13 Apr. 20 L.537 UncoIIectod item.-1: Mar. 30 11.3.V5 Apr. 5-0... 12'.2S2 . 26'. 027 16',4-!S • Ti. 995 Apr. 13 A pr. 20 ' i 3-J) 140 Ail other resources: Mar. 30 Apr. 5-6 615 79 1 A p r . 13 60 Apr. 20 791 Tot»! resources: 67.703 •303,076 Mar. 30 66'. 299 335,183 Apr. 5-(> 72,037 •331.506 Apr. 13 80.8:14 !313'.385 Apr. 20 1,087 • 1,110: 1)323 974 : 11,117 11,620 • 11,226 j 10,319 ! 1,551 3,754 | 2,123 ' 1,467 I 1,537 ! 1.400 ! l',449 3.773 i 2,158 ' 1,055 • 1,326 2)719 ! 4)663 ! 2,296 : 1,220 i 1,666 ! 1)770 ! : 3,280 ; 5,756 i 2,132 873 : 1,405; 3,697 i 5,212 • 5,040 5,300 4)098 6.376 ; 3,584 8,002 ! 7,784 : 6'. 4-15 • 3,481 6'. 535 2,829 . 6,824 I 5,623 I (J', 055 2.558 i 4,985 442 549 i 6.255 1.152 549 I 5'. 8-14 l'. 152 549 I 5)814 ! I'.152 1.999 ! 2'.5!8 ! I 2)548 ' ! 2,548 I San '•• n + i St. I M i m i c - : Kansas! -r> n i -A Louis, j apolis. ; City. ;*>»"**. I r a n - Total. Chicago. Atlanta. 1,590 l',224 l",775 1)775 • 1,909 j . 1)969 ! • 1.909 ! " l)9G9 • 035 730 672 534 I i j 1 1,643 1,668 1,852 2,408 ! : ' . 274 : 20,106 340 17,928 385 22,009 573 29,737 3,936 : 3)928 i 3,587 2)923 . 84,473 82,735 80,604 72,925 2,203 2,233 2.233 2:233 29,275 36,621) 36,218 3(5,215 170 675 075 072 5,961 7,007 7,007 7)007 ! | j ' 1,491 1.491 1)491 1,491 2,844 3,218 2,995 2,985 i 891 ! 1,444 ! 1,444 i 1.444 4,129 • 2.228 ! 1,441 •• 6,389 3.902 2)256 ; 1,283 - 6,882 . 5)304 i 1.508 i 920 j 6,861 6,403 I 1)377 ' 848 ! 6,772 • i 1,454 ! 8.147 ! 3,403 2,429 : 1.735 ! 8)792 i 3,906 I 2.429 ! 1,735 8.792 : 3.966 i 2)429 • 1,735 ; 8)792 j 3'. 906 i 2,429 1.230 1)452 1.452 1)452 ! I I i 1,784 i" 1,430 >• 1.784 ! 1,430 I 1)784 I 1,430 i 1,784 ; 1,430 J 1,500 1,500 1,500 1,500 18,425 23)042 23,370 23,360 I 3.500 I 3,500 i 3,500 i 3.500 ! 3.500 i 3,500 2.000 I 1.500 2'. 000 ! 1.500 • 2!000 i 1^500 5.000 : 2,500 : 5.000 1 2.500 , 5,000 ; 2)500 • 2,000 i 2,500 ! 2.000 2.000 i 2,500 "' 2,000 2,000 ; 2,500 j 2,000 2,653 ' 1,09-1 : 2,267 [ 1,068 • 2,267 " 1.06S 2.267 . ]'.0fl8 1,378 i 3,066 1,50-1 I 2,990 1.504 2,990 1) 500 2.990 753 962 966 177 ! 177 1 177 : i 4,559 .• 1,916 : 5,878 • 6'. 216 ! 2,2o)> ' 5,065 ! 1.591 ' 5'.899 ! J.464 ..'.....' 2)619 ! : i 17.397 : 9.882 : 9.071 19'. 850 ! 9'. 064 : It)! 131 22JM7 I 2:531 10'. 113 9,715 19.969 j 70 I 73,290 83,864 85,774 80.912 i ! ! i m 1,686 : 84 •1,133 • 856 i 258 ! 571 j 734 i 1,330 ! 592 I 76,'156 78,906 81,197 85:042 44,407 •18,058 48.597 50:102 68 29,912 31,574 32.917 31'. 736 118, J 68 125,013 .125,705 126,507 830 811 • 560 ' 560 '. 811 • 786 • -•...' '482 450 306 301 165 ' 40,419 i 42,957 : 41,373 ! 41)326 <»•):•? i '< • ! I I i i J4fi 159 166 118 ! 36,911 j 3S.624 ! 38)l5S \ 38,487 | i ! I 2.019 • ' 1 8.014 9)144 9.308 8)688 : : 4.707 6:386 5)421 7,032 i i i ! I 297 : 1,172 ' 183 ; 1.227 i 163 1.898 • • 12,275 '• j.009 ' 13:41.2 , 3:271 : 1 j 1071 I l',321 : 1 2,473 1,098 • 1,457j '449 ! '437 j : "?5,7:?5 15)207 i55212 15.163 18,999 : 1)690 ! 16,235 ; 1,497 i 22,001 20.640 1 1,796 I 228 ! ! 58 i (i,192 18,806 • 8,421 ! 3,518 i 7.427 i 24)681) ! 10,503 ! 3.370 I 9,2m i 23.060 , 9,606 ' 4,271 : 8,610 i 2i:467 1 9)853 ! 4.046 ! 150 123 203 148 506 • 500 ; ! 2:987 : 5:030 > 2,327 142 I 162 ! 110 ' m j 456 j 456 ! 2,500 50.000 2,500 : 50,000 2,500 50)000 i'.006 I 1)040 i ' i 5,630 ! 132,759 7'. 549 • 146,422 8)198 ! 169'. 184 7,915 :1(16)960 462 32L 342 151 , ; ; 57,OH ; 30,633 I 46.891 i 59.839 I 33,974 i 48)931 : 6iJ'.925 , 32,999 49,280 59'. 971 I 31)142 51)080 ; 5,393 4.909 4'. 610 4) 770 914,4SO 981.131. 98:1)889 980, 74.1 LLABTLITISS. [In ihousancJs of dollars, 1. e., GOO's omitted.] : Capital paid in: Mar. 30 ' 5,068 i 1 1 , j A pr. 5-0 5,059 1 1 1 , A pr. 13 ; 5:059 ! 11 A pr. 20 i 5) 059 1 1 Government deposits: i Mar. 30 .i 1,373 Apr. 5 -0. i 'i, 902 ; Apr. 13 3,600 Apr.20 " 3,262 .Duo to members -reserve account: : Mar. 30 52,182 '254, Apr. 5-0 • 47,720 ; 2 9 i , Apr. 13 ' ' 49,698 268, Apr. 20 ' 54) 753 '267, i 1 5.260 5)260 5,260 5,259 i 6,089 i 6,0S9 i 6)240 : 6,240 1,748 i 5,241 •4'. 819 • 4)627 . 335 4,101 4.2S8 2)441 48,9-19 59,845 50,703 : oS, 464 49,877 : 60,832 47,830 : 63,513 7.001 i 2 , 7 9 5 '• 7,002 ! 2,795 : 7.002 ! 2,945 7)002 ; 2,915 : 2,416 '• 3.088 3,431 ! 2,410 ; 2.418 ! 2'. 418 ! 2)418 j 2,698 2,419 I 3.088 i 2,716 2,419 ! 3)088 : 2,722 : 2) 723 2,130 3,089 3,911 3,941 3,912 3,933 56,075 56) 100 56,408 56,411 1, 710 4.0H9 3) 169 2,701 " 2.293 I 4'. 403 i 8'. 544 ! 3)020 • 2,696 '. 420 ! 6,660 • 2.055 5,613 ' ' 6 8 8 ; ; 7,828 512 ; 1,236 1 413 ' 670 3,345 2,908 2,718 3.31.6 3,050 • 2,731 2)329 2,567 ; 2,203 1,016 3,731 3,027 3,391 20,567 40,461 42,247 41)988 25, S(>() 18,8S9 I 96,348 ^ 26,620 ' 28,231 i 47,032 '23,075 38,408 25.592 18,708 ' 98,918 i 2(),8S0 •29,793 I 47,220 : 24,028 i 38'.497 26)744 19)275 100,203 . 28,000 29,025 i 47,529 •• 23,253 38)623 20,152 • 18.478 '• 97)255 : 27,759 I 28,808 i 47,471 •23,145 I 39,838 720,411 758,219 741,542 742,584 3,428 : 3,431 ; 3,431 • Di'i'eronce between net amounts due from and net amounts due to other Federal Reserve banks. 418 MAY 1, 1917. FEDERAL RESERVE BULLETIN. Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve System at close of business on Fridays. Mar. SO to Apr. 20, 1917—Continued. LIABILITIES—Continued. [In thousands of dollars, i. e., 000's omitted.] New : PhilaBoston. York. del! phia. Collection items: i Mar. 30 Apr, 5-6 Apr.13 Apr. 20 Federal Reserve notes, net: Mar. 30 Apr. 5-6 Apr.13 Apr. 20 Due to other Federal Reserve Banks, net: Mar. 30 Apr. 5-6 Apr.13 Apr.'20 All other liabilities: Mar.30 : Apr.5-6 Apr.13 Apr. 20 Total liabilities: Mar.30 Apr. 5-6 Apr.13 Apr. 20 Cleve- Richland. mond. 21,215 ! 15,362 10,187 9,490 19,519 | 18,341 10,252 13,557 29,323 j 23,182 12,837 15,037 26,728 18,988 12,848 112 ! 128 ! 123 i 78 ; 67,703 66,299 72,037 80,844 166 171 166 122 4.431 4,064 5,650 5,180 ! i I ! 12,123 12,433 12,887 14.422 I 1,821 5,710 ! 6,345 6,478 | 7,878 .j 2J960 i -I 2,075 1 -! 2,881 ! 370 I 8,791 i i 8,697 • 1,187 ! 17,250 | 386 2,655 • | 1,190 7,753 7,720 8,562 9,940 ! ! i i ! i | ; 891 213 150 172 175 131 303,076 i 73,290 | 76,456 I 44,467 ! 29,912 335,183 83,864 | 78,906 I 48,068 \ 31,574 ;331,506 85,774 i 84,197 48,597 ! 32,917 313,385 80,912 ! 85,042 50,102 31,736 118,168 125,043 125,705 126,507 46,891 ! 914,480 48,931 ! 981,131 49,280 " FEDERAL RESERVE NOTES. Federal Reserve note account of each Federal Reserve Bank at close of business on Fridays, Mar. SO to Apr. 20, 1917. [In thousands of dollars, i. e.f 000's omitted.] Atlanta. Boston. Federal Reserve notes received from agent, net: Mar.30 Apr. 5-6 Apr. 13 Apr. 20 Federal Reserve notes held by bank: Mar.30 Apr. 5-6 Apr.13 Apr. 20 Federal Reserve notes in circulation: Mar.30 Apr.5-6 Apr.13 Apr.20 Gold and lawful money deposited with or to credit of Federal Reserve Agent: Mar.30 Apr.5-6 Apr.13 Apr.20 Commercial paper delivered to Federal Reserve Agent: Mar.30 Apr.5-6 Apr.13 Apr.20.... 17,124 17,103 19,076 19,055 165,910 176,808 188,239 191,183 1,754 1,227 2,103 1,337 10,035 10,212 11,557 9,669 25,710 15,645 16,737 20,422 27,054 17,207 16,857 19,944 30,367 19,182 16,812 20,047 30,024 21,551 16,758 19,883 1,529 1,190 2,075 1,269 962 966 1,564 818 775 687 786 942 450 601 25,139 27,052 36,681 39,434 4,559 3,836 6,918 6,216 15,370 15,876 16,973 17,718 155,875 24,181 14,892 15,919 19,480 20,580 166,596 25,864 16,245 16,082 19,494 23,216 18,216 16,125 19,446 29,763 176,682 181,514 28,755 19,987 15,972 19,314 33,218 17,124 17,103 19,076 19,055 165,910 176,808 188,239 191,183 22,360 15,645 10,209 22,904 17,207 9,737 26,217 19,182 9,647 25,874 21,551 8,094 ! J 3,390 4,189 4,186 4,186 6,728 7,200 7,712 9,143 San st. Minne- Kansas Louis. apolis. City. Dallas. Francisco. Chicago. Total. 15,010 15,955 15,877 15,557 20,271 21.248 22,229 22,686 23,223 23,688 24,437 24,748 21,156 20,593 20,662 20,661 ! 850 ' 1,586 I 1,224 j 631 589 888 1,051 1,081 1,253 932 1,084 401 124 374 180 1,741 1,685 1,491 1,796 24,799 24,188 29,979 26,182 I ; I i 16,217 382,504 17,189 400,698 18,179 431,788 18,999 440,539 I i i ! 14,160 14,369 14,653 14,926 19,682 20,360 21,178 21,605 22,395 22,435 23,505 23,664 20,755 20,469 20,288 20,481 14,476 15,504 16,688 17,203 357,765 376,510 401,809 414,357 17,591 17,513 17,416 17,312 25,139 | 25,132 I 35,641 I 39,434 i 11,663 13,108 13,530 13,210 16,971 19,338 20,719 20,676 21,818 20,019 22,663 19,743 23,228 19,716 23,722 19,428 16,219 17,194 18,185 18,999 360,668 378,450 410,796 418,538 2,856 2,456 2,644 2,581 1.941 1,056 3,352 3,300 2,860 I 1,910 2,352 ! 1.510 2,348 j 2.010 1.423 i;il4 1,216 1,040 2,001 1,894 1,918 2,518 23,050 23,554 22.594 23,826 MAY 1, 1017. 419 FEDERAL RESERVE BULLETIN. Federal Reserve note account of each Federal Reserve Agent at close of business on Fridays, Mar. 30 to Apr. 20, 1917, [In thousands of dollars, i. e. 000's omitted.] ton. FEDERAL RESERVE NOTES. New York. Philadelphia. land. Richmond. At- ! Ohilanta. j cago. San M ._-._ Kansas St. Louis. apolis. j C l t y- Dallas. Francisco. TotaL ! I Received from Comptroller: Mar. 30 ; 33,880 300,560 ! 39,120 27,460 29,500 36,380 • 32,560 23,340 32,000 37,720 I 36,120 19,060 647,700 Apr. 5-6 ! 36,880 313,600 ! 39,120 27,460 ! 29,500 36,380 ! 34,480 23,340 32,000 37,720 i 36,520 20,060 667,060 Apr. 13 j 36,880 326,640 j 42,520 29,060 i 29,500 36,380 ! 44,120 24,140 32,000 37,720 i 36,520 21,060 696,540 Apr. 20 ! 36,880 325,640 43,440 32,200 29,500 36,380 i 48,240 24,940 34;000 37,720 36,520 22,060 708,520 Returned to Comptroller: ; 3,990 3,284 3,739 7,013 2,843 127,917 Mar. 30 ' 9,156 68,970 !I 7,610 5,115 I 9,163 I 5,153 i 1,881 Apr. 5-6 , 9,177 69,272 7,666 5,153 9,243 I 5,281 1,888 4,045 4,452 3,874 ! 7,326 2,871 130,248 Apr. 13 9,504 69,641 I 7,753 ! 5,278 9,488 j 5,378 1 4,123 4,721 4,265 I 7,362 2,881 132,292 Apr. 20 ; 9,525 71,497 i 8,0P6 | 5,3 9,542 ! 5,542 1,906 ! 4,443 4,764 4,544 j 7,673 3,061 135,902 Chargeable to Federal Reserve i A sent: i Mar. 30 ; 24.724 231,590 31,510 j 22,345 20,337 ! 31,227: i 30,679 j 19,35028,716 I 33,981 I 29,107 16,217 519,783 : Apr. 5-6 27', 703 244,328 i 31,454 j 22,307 i 20,257 31,099 32,592 ! 19,295! 27,548 ! 33,846 I 29,104 17,189 536,812 Apr. 13 27,376 256,999 I 34,767 \ 23,782 20,012 ] 31,002 ! 42,221 ! 20,017 27,279 33,455 ' 29,158 18,179 564,248 Apr. 20 i 27,355 255,143 : 35,344 | 26,891 19,958 • 30,838 ; 46,334 ! 20,497 29,236 33,176 I 28,847 18,999 572,618 In hands of Federal Reserve Agent: : 137,219 Mar. 30 •: 7,600 65,680 i 5,800 i 6,700 3,600 10,805 i 5,540 i 4,340 8,445 10,758 j 7,951 136,114 Apr. 5-6 10,600 67,520 ! 4,400 ! 5,100 3,400 11,155 : 5,540 ! 3,340 6,300 10,158 8.601 132,459 Apr. 13 i 8,300 68,760 ; 4,400 j\ 4,600 3,200 10,955 : 5,540 ! 4,140 5,050 9,018 8', 496 132,079 Apr. 20 ; 8,300 63,960 I 5,320 5,340 3,200 10,955 6,900 i 4,940 6,550 8,428 I 8,186 Issued to Federal Reserve bank less amount returned to Federal Reserve Agent for redemption: Mar. 30 ; 17,124 j 165,910 I 25,710 i15,645 I 16,737 20,422 ; 25,139 ; 15,010 20,271 I 23,223 | 21,156 j 16,217 382,584 Apr. 5-6 17,103 ! 176,808 i 27,054 j17,207 ! 16,857 i 19,944 ' 27,052 '. 15,955 I 21,248 I 23,688 j 20,593 j 17,189 4001698 Apr. 13 ;; 19,076 ! 188,239 I 30,367 19,182 | ! 16,812 20,047 ; 36,681 j 15,877- j 22,229 ! 24,437 ! 20,662 I 18,179431,788 19,055 1191,183 I 30,024 :21,551 I 16; 758 ' 19,883 39,434 ! 15,557 ! 22,686 I 24 748 I 20 681 | 18,999 440.539 Apr.20 Amount held by Federal Reserve • i Agent: In reduction of liability on out- : i standing notes— : Gold coin and certificates ; on hand— Mar. 30 222,377 15,910 159,404 j 3,730 9,773 2,897! ! 5,165 13,018 2,370 10,110 e n m 170,601 I'm «ni Q »7Qn 234,573 Apr. 5-6 i i15'910 10,273 3,730 2,896 ' i 5,665 13,018 2,370 10,110 248,313 Apr. 13 : 17,910 181,001 3,730 10,213 2,896 j i 6,165 13.918 2,370 10,110 252,194 Apr.20 1 17,910 184,181 3,730 10,913 2,897! ! 6,165 13', 918 2,370 10,110 Credit balances— In gold redemption fund17,031 Mar. 30 1,214 739 1,229 I 1,188 872 i 709 i 1.774 • 548 823 1.340 ! 6,506 17,697 714 Apr. 5-6 1,193 6,207 682 -. 1,200 1.484 i 934 ! 637 ' 1.647 i;i33 1,173 905 IS,583 Apr. 13 i 1,166 7.238 1,146 1,081 671 i 615 547 i 1,550 ! 1:597 ! 1,098 18,644 . Apr.20 1,145 7,002 1,554 I 1,138 1,068 664 i 775 1,038 494 i 1,385 : 1,492 With Federal Reserve : Board— | Mar. 30 : 17,290 5.000 ! 9.500 ! 12,920 24,450 i 5,950 3,130 18.260 8,680 15,480 120,860 17,690 6,000 ! 9,100 12,970 24,450 i 6,750 5,120 19!160 8,460 16,480 126,180 Apr. 5-6 i 20,890 1 8,000 9.100 I 12,970 34,970 j 6,750 5,720 19,760 8.460 17,280 ! 143,900 Apr. 13 1 20,590 9,500 7;600 : 13.030 38,770 ! 6.270 5,720 19,860 8,250 18,110 i 147.700 Apr. 20 1 As security for outstanding notes— ! Commercial p a p e r 21,898 1,405 i 1,137 ! 3,347 3.300 6,528 i 2,831 3,350 Mar. 30 ; 22,253 850 L025 ! 7,120' 2,431 1,920 ! 2,847 1,910 4,150 Apr. 5-6 1 ! 20,998 946 1.209 j 7,165 ! 2,631 1,040 !1 2,347 1,510 4,150 Apr. 13 22,001 2,347 2,010 1,026 | 1,233 8:664 I 2,571 4,150 Apr.20 : Total— i Mar. 30 i 17.124 165,910 25,710 15,645 ! 16,737 20,422 25,139 15,010 20,271 23,223 ' 21,156 16,219 382,566 Apr. 5-8. : 17,103 176,808 27,054 H i 207 1 16,857 19,944 27,052 15,955 21,248 23,688 20,593 17.194 400,703 Apr. 13 ! 19,076 188,239 30,367 19,182 ' 16,812 20,047 36,681 15,877 22,229 24,437 20,662 18', 185 431,794 Apr 20 i 19.055 191.183 30,024 21,551 I 16,758 19,883 39,434 15,557 22.686 24,748 20,661 18,999 440,539 420 FEDERAL RESERVE BULLETIN". Amounts MAY 1, 1917. of Federal Reserve notes received from and returned to olher Federal Reserve Banhsfor the period Jan. 1 to Mar. 31, 1917. Boston. ReRcceived.; turned. : Philadelphia. ReReReceivod. i turned. | ceived. Cleveland. Richmond. ReReReturned, ceived. turned . ! Received. Atlanta. $436. : 570,695!1,481,000J4,416,215 5,234,80011,142,675 1,882,000J633,310 |J633: St. Louis. Minneapolis. Chicago. Re- ! Ee- i ReReReturned. | ceived. j turned. ceived, turned. .31,129,000: -$436,900 §89,400 S4 8,0001878,500 ! S6,700; S51,000; S9,500| S35,700 : ! : 857,000 1,445,000:241,095' 151,700! 1. 195,510" 266,0001. 069,800: 900 SI ,102,000 89,400 1,465.000" 857,000. I 62,000; 21,195i ' 148,000 7.1,750; ' 48' 000 61,000 : 24,195 78,500, 154,700 241,400' 6 2 , OOOi !. (i 700 16,240| 21,500; 12,000. 69, 750 148,00()| 21,5001 6, 500 16,240! 107,750 5i,ooo: 272,000.1. 196,200 28,750 61,000" 25,050' 1-1 200 13,500! 290,800, 101,750,. 35,700 257,3001' 0(59,800: 44,500 7,000'-1.45,500: 37! 500 64,000'3,000! 159,000' 12,2951 13,300. 604,000 ' 60,300!! 13,500 17.0001 26,950; 8' 200; 30,250! 9,500 323,245 7,875 14,400! 245,000 180,400 1 5,000 65,000 23',000| 14,000; 4. 000! 156,500 2,500! 6,50()i 17,130 4.500! 27, 400 1,900 27,800. 208,900; 22,000 3", 1001 1; 715 4,400: S, 750' 10,945 16', GOO' 22,300 3,450 22,000 2, 795! 272,600! 10,280! 8,750. 5,740i 9,500 119,470' 194,880: 23,400; 5,230 27.000 9,275 4'. 185 2,500" . 10,830 6,300| 76,945 554,800: 6,745 ! 23,600" Boston New York Philadelphia... Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas .' San Francisco.. Total New York. redemption or credit during 1" 814,200 S13. jj.d, 300i S37,500 256,900 60,300! 604,000 28,750 7,000i 44,500 27,150 12,295! 145,500 290,800 3,000; 72,000 8,350 181,000 8,350 143,000 26," 300 "225 .'666 23,850 15,000j 894; 000 68,950 4", 000 554,500 348,350 9,785 252,000 15,550 7,675 129,000 279,38011,819,725; 509,5001,995,3051,225,850 167,005 3,139,000 Kansas City. San Francisco.' Dallas. Total. ReRe- ! Re- j ReRej Re- i ReReReRe- ; Rej Re,ceived.! turned, ceived. ; turned. ceived. ! turned, ceived. turned, ceived.. turned.; ceived. : turned. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas Citv Dallas : San Francisco -'§14, '180, I 17,000 j I 9,87o! j 9,500 ! 143,000 ;225,000 |. :. n , 000: '..i 58,700! ;i60,970| 12,730: Total S8, 200 S27, 400,: S3,000 245, 000 156, 500! 65,000 13, 500 23, 000: 5,000 26, 950 17, 130 14,000 30, 250 2,500 6, 500 4.500 323, 250! 23, 850 26, 3001 891, 000 15', 000 92, 950; 11,000 92, 950!. 831, 600^ ""34,"366" "53,' 666 20, 200! 15.500 670, 50! 74, 190. 57,000 30, 850; ! 1 S22,300: 208,900: 22,000! 10,945!: 8,750; 66,700" 474,500 831,600| 53,000 S1.715: 27! 800' 1,900 3,100. 4,400 .16,6004, OOOi 58,700' 31,300' $21,600! 287,600! 22,000! 9,5001 8,750; 318,350 215,000 670,750: 15,500. 101,000 m, 045 134,470 4,700 6,240 11,280 218,630 12,035 172,970 20,200 246,370 40,175, 20,610 S23,600 554,800 27,000 6,300 2,500 16,745 129,000 30,850 57,000 11,000 19,360 SO, 520 SI, 506,200 76,945. 5, 248,8051 5,230 1, 902,000j 279,880' 9,275 516,500 6,745' 10,830 1, 223,695! 7.6751 2 , 992,000' 12', 730" 2, 299,595 246,500 74', 190 264,515; OD, 215; 763,050 40,175! 303,1951 '. S577,280 4,377,815 1.145,925 '635,615 1,829,415 2,036,560 169,255 852,575 1,370,020 2.082,530 i;764,025 878.210 842,575 2,299,600 1,370,020; 247,500 1,970,030 264,515 1,740,225. 850,550 878,155! 305,530.17,545,935;17,719,225 EARNINGS ON INVESTMENTS OF FEDERAL RESERVE BANKS. Average amounts of earning assets held by each Federal Reserve Bank during March, 1917, earnings from each class of earning assests, and annual rates of earnings on the basis of "March, 1917, returns. ' . Average"balances for t h e m o n t h of t;ie several classes of earning assets. Bills discounted, members. Boston New York Philadelphia Cleveland Richmond v A tlanta .' Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Total : ; : • ! ' 270.240 956^514 ,413,082 ,815; 861 656,100 052,823 ,73% 431 718,645 511,400 491,442 ,331,225 237.000 18,190.769 ! Siai.es' Bills bought United bonds and ! in open Treasury ! market. •notes. ! 777,748 883.711 757', 278 578.275 fi-12, 895 448,110 906'. 4=19 I 844^ 575 823.500 337', 388 913.320 913,000 99,026,249 j Municipal warrants. Total. 81,066.000 1,205,421 2.147,;S31 6:849,760 2.410,600 i l'. 625.451 8', 901,068 • 3,098.900 ; 2,6(55^500 : 9.901,810 4'. 851,403 3;929;000 i 8387.398 = 5.892;354 ; l', 400,076 3. J12,424 ; 15,000 1 10,760 = 2,692.588 : lJ0o!768 ; '320; 600 488,309 518,194 ; 898,000 551 (} 49.247.244 6,339,471 .182, 803,733 101.386 "32; 438.; 000 16, 717,767 19, 356,320 7 2, 924.601 7, 137;144 22, 236,536 10. 762; 888 io! 321,000 11. 218,949 6.14.142 11, 975'. 000 MAY!., 421 FEDERAL BESERVE BULLETIN. 1017. Average amounts of earning assets held by each Federal Reserve Bank during March, 1917, earnings from each class of earning assets', and annual rates of earnings on the basis of March, 1917, returns—Continued. nial ed annual rales of earnings from— Earnings from— Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Tots! j 87,449 j 3,016 i 4,477 | - 5,630 i 12.097 (>', 708 I 5,8-1.9 j 2,425 I 5,919 I 2,136 I 5.404 j '917 S31, 67, 30, 4 4 1 j 19, •64 ! I",', 678 9, M0 I 21, 658 ! 1.5, 696 ! l' r >i 591 j 8, 804 j 4, 720 | 16, 984 ! | 259,890 62,027 1 United States bonds and Treasury •notes." 3U1 Is disHills counted, bought memin open bers. market. Hanks. Munici- i pal war- j "rants, i £4,458 2,500 5,359 15.049 5'848 4,08! 19,279 6,(543 5,788 19,916 10.622 8,319 S].005 33;790 3,387 8; 450 53 43 7,091 2 855 797 1,236 1,353 2,222 107,862 j 42,282 Bills discounted, members. Total. $44, 8(i, 43', t 20. 53, 27, 2-X, 32. 22. 28; 472,061 United States bonds and Treasury notes. Hills bought in open market. Per cent. Per cent. 3.86 ! 3.17 3.71 I 3.18 3. 73 3.04 3.65 3.07 3. 90 3.04 3. 26 3. 85 i 2. 86 3.97 I 3.16 3.98 I 3.15 4.61 I 3.10 5.10 2.97 4. 88 2.90 4.57 Percent. 1 Per 3.00 I 2.44 2.93 2.59 2.85 2.96 2.60 2.53 2. 56 2.37 2. 63 2.54 cent. 3.05 3.01 2.84 3.20 4.15 4. 75 3.10 3.04 2.92 2.97 3.13 2.92 2. 66 3.15 3.19 4.14 Municipal warrants. Total. Per cent. 3.27 3.14 3.07 2.98 3.25 3.36 2.87 3.02 3.20 2.66 3.00 2. 80 3.14 DISCOUNT RATES. Discount rates of each Federal Reserve Bank in effect Apr. 80, 1911 Maturities. : Trade acceptances. Discount?. ! 1 Within 15 days, including in ember banks' collateral notes. Boston New Yorlc Philadolphia Cleveland "Richmond A tlanta Chicago St. Louis Minneapolis Kansas Citv Dallas San. Fran'1!sco NOTE.—Rate for bankers' acceptances, 21 to 4 per cent. 31- 1 Agricul: tural ; To 60 1 61 to 90 16 to 60 61 to 90 ! and livestock ' davs, in- i davs, indavs, in- days, in-! : paner elusive. ! elusive. : elusive. clusive. ! over 90 days. * | A 4 3.', ?>% qf 31 31 4" 4 31 •4 4 4 4 4 4 4 4 <U 4 4 4 4 4 41 i ! ! ! 4 i 4.', ! 4i '. 5 ! 4i 5 I.', 5 ! i" 4" : 41 ! 41 ! 41 i 4-jl 5 ! 1 ,- 4 31 4" 37, 31 :U !i ?,}, i i of ! • 3^ 35 37, ! 3^ V, i V, :-U i o.T, I 0 T - 1 " 3* i 4 Com mo ditv ]>aper maturincc within 90. days. ^ 1 v. 4" V. 31 4 4 31 V 422 FEDERAL RESERVE BULLETIN. MAY .1., 1017, GOLD IMPORTS AND EXPORTS. Gold imports and exports into and from the United States. [In thousands of dollars; i. e., 000's omitted.] Week ending— Mar. 23, 1917. Mar. 30, 1917. Apr. 6, 1917. Apr. 13, 1917. Total since Jan. 1, 1917. Total for corresponding period during 1916. IMPORTS. Ore and base bullion United States mint or assav office bars Bullion, refined 1 8 Tnited States coin Foreign coin Total Domestic: . EXPORTS. Ore and base bullion United States mint or assay office bar5* .Bullion, refined Coin Total Foreign: Bullion, refined Coin Total Total exports Excess of gold imports over exports since Tan. 1, 1917, S258,514. Excess of gold imports over exports since Aug. 1, 1914, $1,127,276. 436 238 652 40,332 12 2,433 54 1,142 43,015 ; 259 1 34,307 1 207 34,775 304 3,057 1,021 8,459 128 24,923 3,139 4,189 7 218,912 51,019 55,985 330,112 37,588 402 2,433 i 1,726 16 2,992 2 j 4! 3,707 ! 2,283 16 2,773 2,677 43 3,803 72 9,926 1,273 55,794 135 3,331 3,523 16,627 4,734 3,733 ! 5,072 6,523 67,065 23,616 240 137 ; 253 49 31 4,502 1,438 12,335 240 2 0 '• 137 : 253 49 4,533 13,773 3,870 ; 5,325 6,572 71,598 37,389 INDEX. Page. Acceptances: Page. Distribution of, by classes, maturities, etc 412 Governors of Federal Reserve Banks, conference of. 347 350 Growth of the acceptance business 350 Growth of the acceptance business—: Branch banks in the Pacific Northwest 339 Informal rulings of the Board: Form of trade acceptance 378 Business conditions throughout the Federal ReAcceptances 378 serve districts 381-403 • Cattle paper 378 Charts showing foreign exchange rates in belligerPlace of payment of acceptance 379 ent, neutral, and silver-standard countries 406 Farm-loan bank deposits 379 Clearing and collection system, operation of 354 Paper of equity exchange 379 Commercial failures reported 374 Discount operations of the Federal Keserve Banks. 407 Law department: Domestic bankers' acceptances 380 Discount rates in effect 421 Drafts, Federal Reserve, forms of 347-349 London Economist, reprint of article from, on "The progress of inflation " 375-377 Federal Advisory Council, meeting of 340 National-bank charters granted 374 Federal Reserve Banks: 374 Investment operations of 420 National-bank examinations, payments for Resources and liabilities of 416 Ohio Bankers' Association, circular of, on war service 351 Federal Reserve notes: Accounts of Federal Reserve Banks and agents. 418 j Press statements: Reports of condition of national banks 372 Amounts received from and returned to Federal Reserves held by national banks 373 Reserve Banks for redemption 420 Substitution of collateral 351 Resources and liabilities of Federal Reserve Banks.. 416 335-340 Fiduciary powers granted to national banks 3/5 Review of the month Foreign exchange rates in belligerent, neutral, and State banks: silver-standard countries 404-406 Admitted to system during month 347 Charts showing 406 Answers to questions as to advantages of memForeign war loans 349 bership in system 355-372 340 German war loans 350 Treasury certificates of indebtedness Gold imports and exports 422 United States bonds, issues of, for war purposes.. 340-344 War-bond act, text of 345-347 Gold settlement fund, summary of transactions 340-344 under 353-354 War bonds, issues of