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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
Mar. 30.'•Apr. 20. increase. decrease. which the Government is about to engage it
Federal Reserve Bank.
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
demand for American goods, sustained as it is• has voted to establish three branches in the
now to be by the credit of the United States, ; Pacific Northwest, one at Seattle, one at
the condition of high prices and urgent call | Portland, and one at Spokane, Wash. The
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 priviproposed new issue at an interest rate of 3J lege for bonds or notes without the circulating
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
for Federal Reserve Bank
war-bond legislation, the Federal Reserve notesbasis of issue to supplement circulation
in order
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- : first offering of certificates of indebtedness
1
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
1898 ./Redeemable after Aug. 1,1908... '198,792,660
;\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 ftfVIuw ;
AA,,
M
^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.
ftfi7
; 2\ per cent! IQI7 i/Redeemable after Jan. 1,1918.... j\ /
191
887
'
;\Payable Jan. 1,1937.
'
:
;

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.!|
o o
3 S295,569,000 S5o, oo, oo 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
extending to April 1, 1899, although the bulk of I of indebtedness and notes without circula! tion 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
2 per cent certificates of indebtedness... l 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
cept certificates of temporary loan and the books Apr. 2,of United States certificates of indebtedness entered on
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
their obligations hereafter
for an issue of bonds for the various expenses of the United States,same rate of interest and
issued, bearing the
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

5
5
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 bel
the
( <*>- 28 > 1 9 1 7 )
isted below7payable by you on advice f
d i from th Federal R
d l Reserve Bank !
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
banks
100,342
98,231
101,485
growth of the bank acceptance business in the All nationalTrust Co., BosOld Colony
ton
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 banks and trust com0)
0)
3,308
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
money
tember-October, 1916.
j Reserve gold or lawfulto make with the Federal
Agents, or
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
purpose of collection. This
the same.
| paper for the the note issuing capacity of the
process impairs
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
therefore
of smaller subscribers (with subscriptions of authorized to turn over Agents arenotes and
maturing
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
Number of sub- In- amount sub- 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 |
clearings and
Federal
previous settlement having been on March 22, | Amount of Mar. 23, 1917, transfers, 19, 1917, Reserve Banks,
from
to Apr
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 \
March 31, for 2 per cent bonds purchased by j Settlement of—
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. ! From Mar. 23, 1917, to Apr. 19,1917, inclusive.1 : May 20, 1915, to
1
| 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 o—
f

:

Total

' 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

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

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 j Total net I Total
|
Credit, d e b i t s
dobits
credits. ! credits. • business.
;

Gold.
Balance
Iaststatej ment, Mar.
WithDepos22,1917.
drawn. : ited.

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 United on Treasurer of MemUnited States
States) (daily
(daily average). ber
average).
bank's
in district.
NumNumNumNumNum.-1
Amount.
ber.
ber. Amount. ber. Amount. ber. Amount.
bcr. j Amount.

Items drawn on Items drawn on
district
banks in Federal banks inFederal
outside
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
255l
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
have
in the system
Federal Reserve System was likely to affect |i and feel publicbanks confidence members and
that
who are
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 of the Federal Reserve Board have
the Federal Reserve Board have interferred interfered 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
and most conclusively replied to on the basis greatyet elastic operations demanded a sound
and
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
financial loss at
permission was subsequently granted. Other should it mean somefind the law perfect, first.
We did not expect to
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
way hampered or curtailed by our member- have invested in the stock of the St. Louis
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.
The advantages we have found from our from We have found the following advantages
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
obtained, the certainty of currency shipments been reduced from 20 to 15 requirements have
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. a member bank in the Federal Re(4) As
soever from our membership in it.
serve System, our acceptances will sell at a
We have not found our charter powers in any
way hampered or curtailed by our membership. lower rate than they would if we were outside
the system.
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
very large
son of our membership in the Federal Reserve amount ofare obliged to carry athe Federal
good money with
System.
which no
is
The regulations of the Federal Reserve Reserve Bank upon of money interest we paid.
(2) The mount
which
can
Board have not interfered with our business or loan to any individual, firm or corporation, is 10
our methods of doing business.
capital and
When generally adopted, the collection per cent of our laws it was 20surplus, whereas
under our State
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
director in a competing
joining are that we would certainly advise you banking can be a in the same city.
institution
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

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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,
i
5, 1917, amounted to 1,770 millions dollars, an ; 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
There may be some doubt about the corrcet- advance drafts in question are merely drawn in
ness of the statement in your form that the contract of the actual shipment of goods under,
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
under the provisions of section 13 of the Federal Reserve tion on the part of the buyer to use such funds
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.

Money rates

Increase over last
eai
m.

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.

i Backward
j Fair.

Active.

i Active and pros- Active and run- \ Active,
perous.
ning on full time.!

Active.

Shortage of labor.. Fairly settled

Favorable but uncertain.

•

Good...

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 • —--••- r a t e promode
crop 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.

Steady

Outlook..

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.

Increased.

Labor conditions

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

Commercial paper
higher.
Bank
rates steady.
Increase

Increase over last
year; decrease
from last month.

Limited.

! Continues active.. Good

Increase

Railroad, post office,
and other receipts.

District No. 10—
Kansas City.

Good volume

Active

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...
Bank clearings.

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.

Very active.

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 earnings of } 'Slight increase
Decreased,
slight increase; i r a i l r o a d s de- j|
R. K. receipts, < creasing; P. O. ;
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.

Increased

Fair to good..

;

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
shares.. •
18,516,944 + 5,202,569
month to about the level of two months ago New York Stock Exchange
New York Stock Exchange
bonds.. •
'
$73,297,000 - §3,998,000
Pig-iron
tons.. •
3,260,757
86,934
and bond prices have fallen to the lowest point 'i, Unfilled production
orders, United States Steel
Corporation
11,711,644
since October, 1915. Bond sales from March I Building permits. New York City tons..;; §12,353,422 4- 2,380,643
- 81,302,650
:
S3,387,047 •f- $280,123
25 to April 21 were $87,977,500 and stock I: Postal receipts, New York City
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 ! New incorporations, Eastern States
i
> 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
but closed at 24 per cent. Commercial paper w a r-™i a ontranco of the ITnited States into the
] s
caused advances in prices, greater
rates advanced from 4-44 on March 31 to
5 on April 25.
pl
demand for goods, and greater scarcity in
4J-5
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
oan
than last year, and farmers are slow to con- L bankss—P h i ladelphia $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 a seh s ereserve—Federal
R
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
omme
Department store trade.—Department stores C percentr c i a l paper,
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,
| and the greatly increased cost of fertilizing
General business in this Federal Reserve district 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 de'
nary 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
i 34.2
1
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-




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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 this past month in these lines has been of satisfacI
line, 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.




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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.




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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
$14,126,997, an increase of $644,824 in amount, | the 1,500 miles of Washington, Oregon and
| California sea coast, and any householder havor 5 per cent, over same month of 1916.
Cool weather during April has affected retail i ing a few square feet of ground may protect
trade. Easter buying, while good, was below himself by growing his own green vegetables.
normal on account of the unseasonable weather. It is stated, however, that vegetables constitute 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 :
year over the corresponding month last year, i gether with free use of a large amount of equipAt this time of war preparation, when there j ment and horses for farming the land, making
should be supreme effort to gather effectively i it necessary for the Government to furnish
the Nation's energies in men, materials, and; only the men and the seed.
money, California's method of collecting tax : If such a spirit becomes general and if
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
,
!
< 85375
l
8493
i 4.
! 4,
S125
4 80
• ••!.80
i 47856
" -1.
j 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.

Percent.

87.04
87.04
86.27
85.51
85.51
85.51
85.13
96.20
96.20

:;.

94.78
94.57
93.94
91.18
90.54
92.77
92.77
102.31
100.40

Average
price for
1913—
.60458
cents=
100.

Percent.
97.72 SO.56879
97.72
.55201
98.87
.53159
.50555
.49630
.50145

$64.00
64.00
64.75

.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.

57.00
57.00
56.50
56.00
56.00
56.00
55.75
63.00
63.00

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

§




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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

!
Total
440:25,277;! 492 84,8S2: 588269,900 718,530,996 8411,461,722. 620,2,578,038 1 334 2,808,780 251 8,619,442:4,284 16,379,037!
1.7....!
3.2 . . . .
Percent
; 0.2 ...! O.5....
8.9....:
15.7;....
17.2;....
52.6;
I
100.0J100.0
Member b k ' colM b
banks' l
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
254,802 1,054,582
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.

Number
of
banks
accommodated
during
quarter
ending
Mar. 31.

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
329,669
775,639
528,125
613,350
50,000
100,100

37,977
46,420
269,243
40,567

i

79 I 1,796,883 j

382

1,046 !

37,873 j

l

i
I
;.
!.

is ;
SO ;
20 .

59

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 !

•-

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

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

'

13,545 ! 7,204,934

|
I
ij
;

192,209
73,874
635,532
POO, UOA
15,579

5,586,096

59,406 |

2,206,4(54 i 2,214,875

1,186,277

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




:

Total
commercial
paper discounted.

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.

From
16 to 30
days.

Within
15 days.

350,382
66 •
157

316
195
354
76
105

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

Maturities.

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

$2,081 I
1,014,028 !
35,000 !

12
28
32
541
619

j
;
!
|
I

i!
6!
263 1
57 1
10 !
81 :
23 !

1,056,109 j 588,840 \ 1,141,919

44

i

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
662,016;
56 |

13
3

71,142

662,016 j

114,952 |

5,445

22,129
3,578

25,000

3

77 ,
518 !

83,289 i.
160,625 i $86,050
44,490 i 24,302
20,118 i 70,625
8,787 j 18,788

$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 j 6,379,223
5,185
65.5
655 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|

2.4

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

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

Foreign
bank
branches
and agencies.

Private
banks.

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
. 13,265,000
1
. 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.

!

Disj Acceptoounts. j ances.
§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

Discounts.

Acceptances.

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

: 2,773,605

Discounts.

Acceptances.

Warrants.

Total.

Discounts.

i Accepti ances.

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.

3,573,195
5,470,790
2,439,062
2,906,052
482,9 L9
1,075,323
3,311,309

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

50. 2
36.5
60.3
17.1
46.6

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

49. 8
83.5
39. 4
66.1
53.4

Total.
Per cent

! $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

41,158
43,200
71,990
26,992
25,796
59,991
244,041
21,990 1,817,170




Discounts.

Totals.

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.

i S, 506,927 2,385,185 11,746,055
•'
15. 2

5,733,322

Over 90-day maturities.
Federal Reserve Banks.

259,014

753,425
365,088
055,203
165,259
465,405
093,475
580,418
297,150
891,997
39,378
314,122
485,938

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 '.

Warrants.

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 Acdis- cept- nicTotal. count- ances ipal Total.
wared. 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

4,723
7,783
3,273
1,702
2,920
1,917
2,139
1,260
2,060
1,026
1,176
1,120

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




Bills Acdis- ceptcount- ances
ed.

i r £ m s'

825

1,238
15

1 153
j

1,945
5,879
3,865
2,250
459
894
3,254
1,011
530
531
712
2,355

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

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

Total.

Munic- Total.
;^:

i

55
42
18
16
334
431
120
71
153
76
257
81

31,099
25.8

110,690 ! 20,371
I
!

Over 90 days
Banks.

61 to 90 days.

212
51
20
203

! 2,211

316
6
1,245
100
75
223
239
91
192
292
257
3,036
2.6

Per
Per
Per
Amount. cent. Amount. cent. Amount. cent. Amount, ^ j .
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- nic- Total.
ipal
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.

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

Federal Reserve Banks.

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 !'

i 8,057,70
$3,000,000 |
j $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

50,000 !
766,000 |

25,000
83,000

I

48,000,000

i
i 11,080,160 ;
111,440 i
25,250
'
I
i 18,576,900 ] 2,908,880
2,888,000

1,882,000

48,000,000

2,338,000

!

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

350,000 j

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

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

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. ! 1936-1938.
j

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 j
conversions allotted bylj
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

3 per cent
conversion 3 per cent • 4 per cent
1-year
j loan of
bonds of
notes,
i 1925.
1946-47.1

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

Amount of United States bonds with circulation privilege:
2 per cent
3 per cent
4 per cent
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

S400

Total.

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

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.

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




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

1,590
l',224
l",775
1)775

I
i
j
1

1,643
1,668
1,852
2,408

!
:
'
.

274 : 20,106
340
17,928
385
22,009
573
29,737
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

5,961
7,007
7,007
7)007

!
|
j
'

1,491
1.491
1)491
1,491

• 1,909 j
. 1)969 !
• 1.909 !
" l)9G9 •

035
730
672
534

3,936 :
3)928 i
3,587
2)923 .

170
675
075
072

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.

2,844
3,218
2,995
2,985

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

i
891
! 1,444
! 1,444
i 1.444

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

811

•

811

•

786

-•...'

•

18,999
: 1)690 ! 16,235
; 1,497 i 22,001
20.640
1 1,796
I

'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

830

560 '
560 '.

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
1(16)960
7,915 :
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 19,350 I
28,716 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 I'm «ni
Q »7Qn
234,573
Apr. 5-6
i i15'910 170,601 3,730 10,273
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
.
1,200
1.484 i
934 ! 637 ' 1.647 682 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 ! 2,347 1,510
4,150
Apr. 13
1
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
65,000 156,500
23',000| 14,000;
4. 000!
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 5,740i
2, 795!
10,280!
8,750. 194,880:
9,500
119,470' 272,600!
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. 300i S37,500
jj.d,
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

1

S22,300:
208,900:
22,000!
10,945!:
8,750;
66,700"
474,500
831,600|
53,000

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;

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 !

Bills bought United Siai.es'
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




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