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FEDERAL RESERVE
BULLETIN




ISSUED BY THE

FEDERAL RESERVE BOARD
AT WASHINGTON

NOVEMBER, 1915

WASHINGTON
GOVEENMENT PRINTING OFFICE
1915

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




CHARLES S. HAMLIN, Governor.
FREDERIC A. DELANO, Vice Governor.
PAUL AI. WARBURG.
W. P. G. HARDING.
ADOLPH C. MILLER.
H. PARKER WILLIS, Secretary.
SHERMAN ALLEN, Assistant Secretary.
Af. 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.
when it will be required.

Foreign postage should be added

Remittances should be made to the

Federal Reserve Board.




m

TABLE OF CONTENTS.
Work of the Federal Reserve Board
Service to member banks
Foreign agencies
*
Earnings and expenditures of Federal Reserve Banks
Interdistrict movement of Federal Reserve notes
Addresss by Hon. P . M. Warburg
Franking of Federal Reserve notes
Allotment of United States bonds
Conference of Governors in Minneapolis
Gold settlement fund
Discount rates
Informal rulings of the Federal Reserve Board
Law department
Fiduciary powers granted
,
Intradistrict clearing system
Report of Federal Reserve Agents' Committee on Clearances
General business conditions
Distribution of discounts
Acceptances
Federal Reserve Bank statements
Gold imports and exports
IV




,

..

Page.
345
346
348
349
351
352
355
355
35$
357
359
360
363367
367
369
373
381
385
387
390

FEDERAL RESERVE BULLETIN
VOL.

1

NOVEMBER 1, 1915
WORK OP THE BOARD.

During the month of October the work of
the Federal Reserve Board has included the
following principal elements:
(1) Investigation and formulation of policy
regarding the question of foreign agencies of
Federal Reserve Banks in South America and
elsewhere. ;
'
(2) Adoption of a policy with respect to
open-market operations by Federal Reserve
Banks as embodied in a letter of October 8
transmitted to Federal Reserve Agents.
, (3) Investigation into petitions of Louisiana
banks for. transfer from the eleventh to the
sixth reserve district.
; (4) Decision of, policy with respect to allotment of offers of bonds to Federal Reserve
Banks on behalf of member banks.
(5) Investigation of conditions regarding
examination of member banks.
Further development of the system of clearance under the gold-settlement fund has proceeded during the month, four Federal Reserve
Agents having opened regular accounts in the
Federal Reserve Agents' fund. The total
amount in gold-order certificates held in the
two funds on October 21 was 876,670.000.
Dming the month transit managers of Federal Reserve Banks held a conference at Chicago
for the purpose of considering methods of enlarging and improving the existing system of
clearing checks through Federal Reserve Banks.
Governors of Federal Reserve Banks held a
regular quarterly meeting at Minneapolis on
October 21-23. Two members of the Board,
Mr. Warburg and Mr. Harding, were in attendance during the sessions, in response to invitation, for the purpose of consultation and
general exchange of ideas as to the progress of
the work at the several banks. The Federal
Reserve Agents' Clearance Committee held a




No. 7

session in Boston and adopted a report with
reference to the general question of clearing
checks, which will be found on page 369.
Applications of State banks and trust companies for membership in the system have continued at about the same rate as during the
preceding month, a total of 30 applications
having been favorably acted upon up to October 25.
Applications for fiduciary powers have continued numerous, and a considerable number
have been favorably acted upon. In not a few
instances, however, it has been found necessary
to defer action pending the elimination of objectionable conditions by the applying banks,
or the fulfillment of requirements that seem to
be advisable as a preliminary to the granting of
the desired powers.
The Board has received numerous questions
from member banks with respect to the conditions under which elections of directors designed to fill places falling vacant at the close
of the present year are to be held, and in reply
it named November 16 as the date of formally
opening' the polls for the election of such
directors, giving to Federal Reserve Agents
instructions necessary for their guidance in securing nominations of electors, and in carrying
through the choice of candidates for the vacant
positions. The process of conducting the
election of new directors to fill vacant appointments is now going on. Results probably can
be announced early in December.
In accordance with the provisions of the
Federal Reserve Act, the Board has directed
Federal Reserve Banks to make a call upon
their members for another installment of reserves, such installment to be due and payable on November 16. This will be one-twelfth
of the total reserves required from country
banks, and one-fifteenth of the total reserves
required from city banks, there being, of course,
345

346

FEDERAL EESEBVE BULLETIN.

no further call upon central reserve city institutions. Such reserves are payable in any
form that may be determined by the Federal
Reserve Banks themselves, and attention has
been directed to the provision of the Federal
Reserve Act authorizing Federal Reserve
Banks to receive one-half of the installment if
so desired in the form of rediscounted paper of
eligible varieties.
Permission has been granted to the National
City Bank of New York to establish a branch
in Valparaiso, Chile, with sub-branches at Antofagasta and Santiago in the same country.

SERVICE TO MEMBER BANKS.

Following is the substance of a letter lately
sent to all Federal Reserve Agents on behalf
of the Board:
Under recent date the Federal Reserve
Board received a letter from Governor Strong
of the Federal Reserve Bank of New York,
inquiring whether a Federal Reserve Bank may
undertake to perform the following services
for its member banks:
(1) Collect notes and drafts.
(2) Collect items not covered by the present
collection system.
(3) Collect items drawn on banks which are
not members of the Federal Reserve System.
(4) Execute orders for securities.
(5) Answer inquiries as to credits.
(6) Purchase commercial paper.
These questions have had the careful attention of the Board, and it has been thought that
the matters referred to were of such large interest as to warrant a general letter addressed
to each Federal Reserve Agent. I have the
honor, therefore, to advise you as follows:
(1) Collect notes and drafts?

There is no doubt whatever that a Federal
Reserve Bank may collect notes and drafts
sent to it by its member banks for collection
and credit, such collection being a necessary
incident to the power of a Federal Reserve
Bank to receive deposits from a member bank.




NOVEMBER 1,

1915.

(2) Collect items not covered by tlie present collection system?

By items not covered by the present collection system, Mr. Strong evidently contemplates the collection of coupons, etc., and the
legal principles discussed under the first question will apply equally well to the collection
of such other items. It seems, therefore, that
the second question should be answered in the
affirmative.
(3) Collect items draum on banks which are
not members of the Federal Reserve System?

The Board has already held that Federal Reserve Banks may collect items drawn on nonmember banks, there being no difference whatever between the first question and this one
as far as the legal rights are concerned. A
Federal Reserve Bank could not, of course,
accept checks drawn on nonmember banks for
immediate credit, because such nonmember
banks do not and can not legally have a deposit with the Federal Reserve Bank against
which such items could be immediately
charged; but there is no legal objection to the
Federal Reserve Bank collecting such items
from nonmember banks and crediting them
when collected to the account of the member
bank for which the service was performed.
(4) Execute orders for securities?

There does not. seem to be any provision of
the Federal Reserve Act which gives to the
Federal Reserve Banks either express or implied authority to execute orders for securities
for member banks. It is true that a Federal
Reserve Bank may, in an exceptional case
where commercial paper also has the additional security of stocks and bonds, have to
sell such stocks or bonds to realize on the
security in case of default. But the right to
sell securities on such an occasion as that does
not imply a power to act as an agent for a
member bank in the execution of general orders for the purchase or sale of securities.
In connection with this matter the Board
wishes, however, to suggest that it would be
possible for Federal Reserve Banks acting on
behalf of their members to transmit such orders to certain brokers, requesting such bro-

NOVEMBER 1, 1915.

FEDERAL RESERVE BULLETIN.

kers to^ confirm their transactions direct to the
member banks. It would not be proper for
Federal Reserve Banks to give orders in their
own name and to execute them on a commission basis. Federal Reserve Banks should not
secure any revenue from such orders.
(5) Answer inquiries as to credits?
There is no express provision in the Act
relating to the answer of inquiries as to credits,
but inasmuch as the regulations of the Federal
Reserve Board reasonably contemplate that
member banks maintain credit files and
certify in each application for rediscount of
paper by a Federal Reserve Bank that statements as to the credit of the borrowers are
on file, it would seem clear that each Federal
Reserve Bank might advise its member banks
in advance as to the credit of various borrowers
in its district. Such advice, however, must
be considered merely as advice and not as a
guaranty on the part of the Federal Reserve
Bank. It must be carefully considered, however, that the Federal Reserve Banks receive
from their members confidential reports which
they may not divulge and that this may lead
to embarrassment.

347

must not be underestimated. Difficulties will
arise; paper which has been bought with the
greatest care and in the best possible faith will
turn out to be bad, or it might happen that
the bank examiner might criticize paper
bought by the Federal Reserve Bank, or which
has been bought upon the strength of information received from a Federal Reserve Bank.
However, it may be possible to find a mode of
accommodating the banks, and the object
might be achieved by the banks simply acting
as intermediaries in the matter, turning over
the information as received from others to the
member banks, and, when purchasing paper,
forwarding the same with tho letter of the
broker through whom it has been purchased,
the letter being addressed direct to the purchasing member bank. Federal Reserve Banks
should not indorse paper to their member
banks, or turn over paper which they had
previously bought. They should act distinctly only as intermediaries in the matter,
without taking any responsibility or appearing
as contractors.
The questions here raised might well be discussed at the conferences of Governors and
Federal Reserve Agents, and the Board will
(6) Purchase commercial paper?
be pleased to receive their reports and recomWhile there is no express authority given in mendations.
the Act permitting Federal Reserve Banks to
Meeting of Reserve Agents.
act as agents for their member banks in the
purchase of commercial paper, nevertheless,
Federal Reserve Agents of the twelve Federal
there is no doubt that a Federal Reserve Bank Reserve Banks have been invited by the
might, under the provisions of section 14, Federal Reserve Board to meet in Washington
purchase bills of exchange of the kinds and on Thursday, November 4. These gentlemen,
maturities made eligible under section 13, and who are the chairmen of the boards of directors
sell such paper to one of its member banks of the banks, will discuss with each other and
under an agreement made prior to the trans- with the Board problems, which have arisen or
action. There does not seem, however, to be are anticipated, not to be solved through corresany power vested in a Federal Reserve Bank pondence.
which would permit of its buying promissory
State Banks Admitted.
notes for its member banks. The only express
authority given for the purchase of bills of
The following State banks have been adexchange in such a manner is in section 14 mitted to the Federal Reserve System during
which makes no mention of promissory notes. the month of October, the number of such
The Board desires to emphasize in dealing institutions which have joined the system now
with this question the fact that the task of being 30: Bank of Hartsville, Hartsville, S. C :
advising and purchasing paper for member Commercial Trust & Savings Bank, Joliet, 111.;
banks will involve a moral responsibility which Commercial & Savings Bank, Albion, Mich.




348

FEDERAL KESERVE BULLETIN",

FOREIGN AGENCIES.

The following press statement was issued by
the Board on October 12:
At the meeting of the Federal Reserve Board
this morning there came up for consideration
and discussion the report of a committee of
the Board, to whom had been referred the subject of banking relations with the South American and Central American countries, as recommended by the Secretary of the Treasury in
correspondence transmitted to the Board
October 6.
. The committee report expressed the view
that Federal Reserve Banks, being the custodians of the reserve money of the member
banks, should not be permitted to do pioneer
work in Latin American countries, granting
credit facilities which would lead to a lockup
of reserve money in loans which, in most of
the cases, would be subject to wide fluctuations of foreign exchange. Secretary McAdoo
stated that his recommendations about joint
agencies for Federal Reserve Banks did not
contemplate this character of operation.
The report reminded the Board of the policy
pursued for generations by the large government banks of Europe, which do not go into
foreign fields, except that they hold as secondary reserves foreign bills on the most important
European countries where large discount marT
kets exist and where the gold standard is
established beyond question. In those countries these government banks maintain correspondents, and the committee believes that
when normal conditions shall have been
restored in Europe joint agencies or correspondents could be used to good advantage
there. The committee also called attention to
the fact that England, Germany, and France
have established independent banks or branch
banks of deposit banks in Latin American
countries to do pioneer work, and that the
United States should pursue the same course,
inasmuch as it is necessary for banks going
into this field to have the widest possible range
of activity in order to be able to compete with
the local banks and the branches of the foreign
banks already established in these fields. Federal Reserve Banks being properly restricted
to certain transactions, and such as may not
interfere with the absolute liquidity of their




NOVEMBER 1,

1915.

condition, could not compete successfully in
this respect, whereas it should be their function to do all in their power to assist American
banks which enter the Latin American field.
The committee favored, and the Board and
Secretary McAdoo concurred in, suggesting an
amendment of the Federal Reserve Act which
would enable American member banks to cooperate for the purpose of jointly owning and
operating foreign banks. The contribution of
the Federal Reserve Banks in this development in Latin America would primarily consist
in providing conditions so favorable for American acceptances that the American banks willing to oner credit facilities there will be materially assisted in meeting the European rates
which, at the present time and probably for
some time to come, will compare unfavorably
with the American discount rate.
Wherever the Federal Reserve Banks can
help in the development of American banking
by establishing direct connections in Latin
American countries for the purpose of facilitating discount operations of this kind it will
be, in the opinion of the committee, the proper
function of Federal Reserve Banks to do s^>.
The committee took the position that American banks entering this field ought to be permitted to develop the opportunities first, but
that in trade centers where American banks
are not established it might be proper for the
Federal Reserve Banks to appoint joint correspondents or agents in order to facilitate the
development of American acceptances in such
places.
The Board expressed itself as in entire agreement with these views of the committee. The
Secretary of the Treasury, who was present at
the meeting, announced himself as also in full
accord. The Secretary stated that he agreed
with the Board that the resources of the
Federal Reserve Banks should not be invested
in nonliquid loans in Latin American countries,
and that he was in hearty accord with any
measure that the Board might ultimately
evolve which would have as a result the development of American banking, in Latin
American countries.
The committee hopes to make its final report
early in November, alter recommendations shall
have been received from the conference of
Governors of Federal Reserve Banks which is
to take place at Minneapolis on October 20
and the conference of Federal Reserve Agents
which is to take place in Washington on
November 4.

NOVEMBER 1,

FEDERAL RESERVE BULLETIN.

1915.

349

The earnings for oach of the three months
EARNINGS AND EXPENDITURES OF FEDERAL RESERVE BANKS, JULY 1 TO SEP- show increasing totals, while the monthly current expenses show declining totals, with the
TEMBER 30, 1915.
There are presented below detailed figures
of earnings and expenditures of each of the
Federal Reserve Banks for the quarter ending
September 30, 1915, in continuation of like
figures published in the August Bulletin for
the period November 16,1914, to June 30,1915.
The combined earnings of the Federal
Reserve System for the three months ending
. September 30 are given as 8599,813.16, and
the total expenditures as 8807,620.10. The
latter are composed of current expenses,
$394,730.21, the cost of printing and shipping
Federal Reserve notes, §363,057.97, and the
cost of equipment, $49,831.92. No account
is taken in the above expenditures of amortization charges, which are reported separately
only for the New York Federal Reserve Bank.
The total excess of earnings over current
expenses for the quarter was $205,082.95,
or at the rate of about 1.8 per cent on an
average paid-in capital of 854,462,000. The
more active southern banks report more
favorable results of operation. Thus, Richmond shows net earnings from operation for
the 3 months of 371,282.58, or at the rate of
8.5 per cent per annum on an average estimated capital for the quarter of S3,361,000;
Atlanta's net earnings for the same period
were 834,540.61, or at the rate of about 5.7
per cent per annum on an average capital
of 82,417,000; while the net earnings of the
Dallas bank, 852,362.81, were at the rate of
about 7.6 per cent per annum on an average
estimated capital of §2,761,000. Four banks,
viz, Philadelphia, Cleveland, St. Louis, and
Minneapolis, are shown not to have earned
their current expenses for the quarter.
11672^15




2

result that the total not earnings of the system
from 840,655.79 in July increased to $71,666.04
in August and to $92,761.12 in September.
Of the total earnings for the quarter, 56.5 per
cent was from bills discounted, 21.7 per cent
from municipal warrants, about 11.3 per cent
from bankers' acceptances, less than 8 per cent
from United States bonds, and the remainder
from sundry operations, mainly commissions
and exchange. These percentages vary considerably by banks and groups of banks. Thus
the earnings of the southern banks for the
quarter were derived almost exclusively from
the discounting of notes. The New York bank
derived its main revenue from bankers7 acceptances and warrants, while the Chicago bank
reports over 35 per cent of its total earnings
from United States bonds, and only 25 per
cent from discounts.
Of the current expenses, about 30 per cent
went as compensation to bank officers and over
24 per cent as salaries to the clerical staff of the
banks. The next largest item is the quarterly
assessment for the running expenses of the
Board, §54,142.13, or 13.7 per cent of the banks7
total current expenses. Rent constituted
slightly over 10 per cent. Other specified
expense items for the quarter in excess of
S10,000 wero "printing and stationery,7' "postago/7 and " directors' fees/7
The cost of Federal Reserve notes prepared
during the quarter was 8363,057.97. Over 65
per cent of this quarterly expense is charged to
the New York bank. The cost of equipment,
comprising mainly vaults and machinery, was
$49^831, of which over 60 per cent represents
the cost of vaults installed at the Minneapolis
and Dallas Federal Reserve Banks.

Earnings ind expenditures of the Federal Reserve Banks for the quarter from July 1 to Sept. 3C >, 1915.

Boston.
(1) Earnings for quarter ending Sept. 30,
1915:
Bills discounted (members)
13ills bought (bankers' acceptances).
InvestmentsUnited States bonds
Municipal warrants
Sundry profits

New York.

Philadolphia.

§2,853.21
12,9*27.33

$5,216.23
30,202.67

56,155.51
8,351.07

$6,899.91
2,164.02

1,663.05
2,500.00
19,359.44 " 45," 893." 03* 15,102.48
602.48
6,635.14
1,564.81

4,872.42
12,300.23
623.48

Cleveland. Richmond.

595,611.07
83.33

MinneapoSt. Louis.
lis.

Kansas
City.

O
Dallas.

Son
Francisco.

Total.

$81,843.85

$19 t 388.58
3,425.72

$339,184.20
67,746.00

Atlanta.

Chicago.

857,954.37

$15,855.71
4,554.80

$12,550.66
2,149.04

$19,066.45
1,259.98

$15,188.65
2,628.04

1,225.00
5,313.88

5,134.39
4,163.80
547.40

5,088.06
4,104.55
64.21

63.14

5,050.00
8,501.62
1,071.05

46,995.55
130,344.90
15,542.51

29.75

860.30

21,402.63
15,599.87
3,420.75

39,204.79

87,947.07

31,934.59

26,8G6.06

95,724.15

58,814.67

00,893.76

21,238.58

30,772.02

07,073.51

81,906.99

37,436.97

599,813.16

4,804.93
55.00
1,350.00
300.00

10,920.30
500.00
1,590.00

5,261.75
56.50
610.00
2,011.65

5,950.30

3,354.90

2,376.65
10.00
980.00
375.00

2,964.24

2,755.60

3,935.60

820.00
503.62

6,013.20
30.00
520.00
250.00

2,788.86

460.00

2,415.80
40.00
1,635.00
150.00

580.00
800.00

440.00
38.75

290.00

54,142.13
691.50
10,105.00
4,429.02

8,474.98
4,470.81
46.00

19,549.96
18,393.63
500.70

8,999.98
9,066.18
1,356.57

7,500.00
8,835.79
220.00

6,883.29
6,412.07
200.00
309.25

7,503.91
6,154.27
595.99

12,500.00
10,201.79
1,175.50
774.00

12,700.12
7,907.50
420.00
300.00

6,750.00
4,683.26
392.15
30.85

6,750.00
7,115.77
620.00

8,624.95
7,187.70
229.00
1,155.25

11,541.67
5,017.50
33.00

117,838.88
95,512.27
6,788.91
2,569.95

285,75
I'M: 73
350.00
250.33
14.30
536.28
59.70
3,125.01

540.00
535.89
430.00
518.24
69.91
1,063.51
138.79
9,779.99

247.03
280.00
'
342.35
140.52
49C. 70
193.08
2,124.99

446.25
445.94
300.00
187.83
59.65
801.81
26.03
1,573.08

378.47
177.85
380.00
73.24
26.73
698.25
779.28
1,000.00

767.37
262.10
322.50
96.77
28.22
958.42
2.18
1,806.71

404.47
300.39
200.00
278.16
49.75
986.03
29.97
6,643.76

203.60
364.44
200.00
188.97
109.10
1,105.05
118.20
3,990.00

448.60
451.98
270.00
133.74
45.36
380.68
765.03
1,250.01

497.10
672.65
290.35
450.66
302.00
896.00
106.07
120. 79
105.23
79.48
951.18
2,482.26
1,858.84
534.36
2,124.99 . 2,524.50

613.52
90.00
74.39
17.60
349.30
&06
3,795.00

4,891.29
4,023.85
4,020.60
2,371.48
745.85
11,409.50
4,514.12
39,738.04

Light, heat, and power
Printing and stationery
Repairs and alterations
All other expenses n. o. s

175.79
248.82
.490.49
45.92
1,071.84

168.67
204.57
1,120.92
10.00
4,241.62

244.38

3,742.72
213.50
3,417.64

694.70
25.74
956.65

16.54
90.76
1,482.66
44.06
810.60

289.36
3.10
900.80
57.60
217.96

75.18
272.87
718.43
51.56
745.09

Total curront expenses

26,292.68

72,534.81

36,933.08

28,728.15

24,441.57

24,274.06

42,826.75

Total
(2) Current expenses for quarter ending
Sent. 30, 1915:
Quarterly assessment for expenses of
Foderal Reserve Board
Fedoral Advisory Council
Directors'fees
Legal fees

SalariesBank officers
Clerical stall
Special officers and watchmen...
Other
Traveling expensesOfficers and clerks
Per diem allowance of directors
Telephone . . .
Telegraph

•.

Postage
Expressage
Rent...
Insurance and premiums on fidelity
bonds

Amounts amortized
(3) Excess of earnings over current expenses
(4) Cost of Federal reserve notes
(5) Equipment:
Furniture and fixtures
Vaults
Machines
Other
Total
(6) Total expenditures, exclusive of
amortization charges




830.00

-

-9100

237.95

441.06
18.17
308.01

141.50
995,51
77.81
1,541.22

63.09
1.30
651.73
14.10
1,746.84

01.05
- 849.50
115.55
' 612.12

1,399.56
1,023.97
12,902.86
704.01
15,907.54

32,786.08

20,111.15

28,947.24

29,544.18

27,309.86

394,730.21

460.55
802.34

39,801.59

39,801.59
12,912.11
18,978.87

15,412.26
204,426.15

-4,998.4$

-1,862.09

71,282.58

34,540.61

10,864.93

16,636.43

10,263.30

8,780.75
570.85
550.00
456.00
35.44

18,067.01 -11,548.10

10,060.87

31,935.39

13,211.42

8,498.56

45.20

132.97

202.50
11,473.88
2,091.20

-1,873.73
6,060.73

52,362.81
8,896.89

10,127.11

205,082.95

17,604.55

363,057.97
3,329.95
.30,872.34
14,738.33
891.30

76.75

721.51

291.19

3,760.63
737.51

1,539.62

272.80
7.00
975.10
88.42

582.53

911.00
1,017.75

5,219.68

1,830.81

1,343.32

582.53

1,612.29

529.05

3,385.87

13,827.58

332.93

19,215.11

935.00

49,831.92

.40,289.30

282,180.64

55,628.82

46,707.90

35,287.40

34,667.10

75,291.19

49,383.97

42,437.29

36,240.90

57,656.18

45,849.41

807,620.10

483." 85' •""3,*25i.*25"
. 1.65

373.65
18,841.46
301*68*
28.25

935.00

I

Earnings and current expenses of the Federal Reserve Banks for each of the months of July, August, and September, 1915.
Boston.

Now York.

Philadelphia.

$10,886.69
12,673.44
15,644.66

$21,260.39
29,521.67
37,165.11

$9,388.63
10,794.96
11,751.00

$7,906.34
9,095.01
9,864.71

Current expenses for July
Current expenses for August
Current expenses for September

9,206.71
8,505.68
8,530.29

24,749.18
24,590.73
23,194.90

15,983.37
10,839.73
10,109.98

NOTE.—Advanoo payments by Federal
Reserve Banks for maintenance of Federal Reserve Board from Oct. 1 to Dec.
31, 1916.

4,804.93

10,920.30

5,261.75

Earnings for July
Earnings for August
Earnings for Soptombor

Atlanta.

Chicago.

St. Louis.

Minneapolis.

Kansas
City.

Dallas.

Son Francisco.

Total.

$30,961.22
33,194.76
31,568.17

$19,086.26
18, M6.84
21 t 181.58

$18,451.70
20,155.58
22,286.48

$5,940.20
7,077.45
8,220.93

$9,038.91
10,766.40
10,966.71

$6,910.10
8,950.82
11,212.59

$26,563.43
27,171.88
28,171.68

$13,651.15
12,121.94
11,763.88

$179,945.01
200,070.65
219,797.60

9,748.13
9,693.29
9,286.73

7,941.17
8,019.47
8,480.93

6,874.16
8,247.12
9,152.78

14,960.06
13,602.92
14,263.77

11,601.54
10,202.57
10,982.57

7,518.11
6,132.44
6,460.60

11,608.25
8,894.50
8,444.49

9,787.59
10,937.80
8,818.70

9,310.95
8,738.27
9,260.64

13n,2S9.22
128,404.61
127,036.38

5,950.30

3,354.90

2,415.80

6,613.20

2,788.24

2,376.65

2,964.24

2,755.60

3,935.60

54,141.51

Cleveland. Richmond.

CD
M

Amortization charges of tho New York bank, which have beon disregarded In the forogoing statement, are made up as follows: (1) Organization expenses, Including expenses of the Federal Reserve
Board prior to July 1,1915, $5,856.08; (2) cost of Federal reserve notes, $32,000.67; <3) cost of equipment, $1,938.84; total amortization charges, $39,801.59.

INTERDISTRICT MOVEMENT OF FEDERAL RESERVE NOTES.
Amounts of Federal Reserve notes received from and returned to other Federal Reserve Banks for redemption or credit by each Federal Reserve' Bank during the period
Nov. 16, 1914, to Sept. SO, 1915.
DIst. No. 3— Dist. No. 4—
Philadelphia. Cleveland.

Dlst. No. 5— Dist.No.6— Dist. No. 7—
Richmond.
Atlanta.
Chicago.

DIst. No. 8— Dist. No. 9— DIst. No. 1 0 - DIst. No. 11— Dist. No. 12—
San FranMinneapolis. Kansas City.
St. Louis.
Dallas.
cisco.

Total.

1
11,090
10,315
35,865
15,800
10,925
1^770
10,305

Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls.
295
535 9,255
33, M0
105
10,690 10,010 9,405
.
120,290 GS1,310108,185 11,750 915.560 17,630 226) 390 3-1, 775
1,295
335 195,520 1,225 10,635 "
23,655
750
875
4,050
405
335 23,655
10,735 108,185
875 4,700
6, 860 44,805
14,195 915,605 4,225 193,5S0
54,080 8,410
510
35,210 331,105 1,535 26,500 1,135
185 21,195 1,215
19,735
50,195 4,010 7,490 12,2S0 1,205
83,800
170 55,05.5
12,260
9S5
85
25,395 1,265 2,510 0,655
34,500
175
30 1,2S5
60
440
3,765
115
42,085
440
215
435
610
42U
380
3R5
45 3,490
40,555
2,620
950 2,23010,600
580
720
275
55 8,325
2,175 107,8J5
20 6,530
12,080
155
80
95,785 1,725 4,020 3,975
5G,4S0

i,

Dolls.
10,925
40,665
7,325
1,285
185
1,350
23,780
1,425
455
400
5,60o

Dolls. Dolls. Dolls.
Dolls. Dolls Dolls. Dolls. Dolls.
60
25 5,435
8,780
1,400 1,770
1,205 9,125
81,200 25; 395
30,500 40,235 440 37,130 I,G20 101,335
40 3,490
45
8,325
1,400 3,4S0
4,040 2,510
3S0
3S5
85
500
440 115
6,055
12,280
215
010
175 130
14,155
170
950
19,735
C90
85
610 120,910
67,810 1,285
27,925 1,185
455
26,02(1 OS,'7951,485 72,4-fO
72,180
20,155
2501 ,070,455
20,155
4,935 115182,455
"'
470
490
80
9,575
115
95,795
3,375
490 470
72,770
250 231,440
60,180 1,0-fOl ,163,330
215 225 2,215 3,375
310
13,315
2,770 7,750 305 7,830
18,895 1,315

Dolls.
3,205
93,695
4,020
SO
20
155
18,895
2,320
1,640
70
215
340
2,385
10O
190

Dolls.
15
2,435
65
275
5SO
4,415
400

Dolls.
Dolls.
Dolls.
3,850 522,905 101,420
43,1801,820,1001,330,265
* — 950,455 142,140
1,723
19,000 167,465
3,975
28,4351,274,200
14,3S5
"~ ""*
9,930 217,830 493,160
5,605 421,370 111,180
54,450
1,3451,395,055
2,795 175,310
11,180
9,055 309,710
10,070
:,
17,630 . 0,9901 381,960
119,215 125,705

90,310 535,565 1,330,880 1,950,935 144,205 001,635 IGG,94O2O,43O 1,278,270 30,420 345,630 06,640 105,400 417,375 51,6501,563,800 103,925 3,435312,780 8,260 1,400,23512,005122,990122,8755,516,265 5,727,085




CO

352
SOME

FEDERAL BESERVE' BULLETIN.

NOVEMBER 1,

1015.

PROBLEMS OF THE FEDERAL send it to Delphi. Now there was a scarcity of gold in the
city, and the magistrates knew not whence it could be had.
RESERVE BANKING SYSTEM.

Hon. Paul M. Warburg,. member of the
Federal Reserve Board, offered the following
remarks at the conference of Governors of
Federal Reserve Banks held at Minneapolis
October 22, 1915:
In these times, when we are so deeply stirred and bewildered by the unhappy fate that has overtaken Europe,
when it is so hard and well-nigh impossible to understand
the path along which man is progressing, nothing will
help us more toward finding our bearings than the study
of ancient history. The more fully we understand that,
for thousands of years, human problems have remained
fundamentally the same, the more nearly we succeed in
attaining a judicial and sympathetic understanding of the
tragic struggle of our race. Human problems and human
nature, indeed, do not appear to have changed since the
time of Themistocles' speech on "national preparedness,"
delivered 2,400 years ago, of which Plutarch tells us, urging the building of a strong navy, or since his confidential
message to.the Persian King, Xerxes, informing him after
the battle of Salamis, that the "allies" were going to attack the Dardanelles. We are told this message caused
Xerxes to evacuate Greece in order to rush back for the
protection of his bridge across the Hellespont.
When reading a sketch of the life of Lucullus, I was surprised to find myself suddenly thinking of the Federal
Reserve Act. Lucullus had been sent to Egypt, Libya,
and Crete, Plutarch tells us:
"He also made Cyrene, and finding it in confusion
* * * he restored it to order, and fixed its constitution,
* * *. They asked him, it would seem, to write laws for
them, and to mold their people into some form of sound government, whereupon he said that it was hard to be a lawgiver for them when they were having such good fortune.
In fact, nothing is more ungovernable than a man reputed
to be prosperous; and, on the other hand, nothing is more
receptive of authority than a man who ia humbled by
misfortune."
So, you see, even in those days they required a 1907 in
order to be ready for some sound legislation.
The following evening, I took up the life of Camillus,
and came upon this incident:
After a protracted siege, Camillus had taken the city of
Veii. He had vowed that, if he should take the city, he
would consecrate the tenth part of the booty to the Delphian god. But, after the city had been taken, he apparently forgot his vow. At a later time, however, he
referred the matter to the senate, and, the seers announcing
that the gods were angry, the senate voted that every
soldier under oath should return one-tenth of his share:
"The soldiers were filled with indignation * * *.
However, all of them brought in the necessary portion,
and it was decided to make a bowl of massive gold and




So the women, of their own accord, determined to give
the gold ornaments which they wore upon their persons
for the offering, and these amounted to eight talents weight.
The women were fittingly rewarded by the senate, which
voted that thereafter, when women died, a suitable eulogy
should be spoken over them, as over men. For it was not
customary before that time, when a woman died, that a
public encomium should be pronounced."
When I read this chapter, it struck me that the "votes
for women" movement was already showing strength in
the year 376 B. C, The Romans, however, were by far
shrewder than the men of our generation, inasmuch as
they at least secured a good and valid consideration for
what they conceded.
The next thought that came to me in connection with
this story was that even the question of the "gold reserve1'
is not modern, but that 2,000 years ago the same problem,
how to withdraw gold from circulation and use it for the
general good, confronted our forefathers. Seriously
speaking, the incident can not but remind us of the gold
now being given up to the Banque de France and the
Reichsbank by the people of France and Germany.
Like Lucullus in Cyrene, the advent of the Federal
Reserve System came at a time of acute adversity. Its
operation, however, had so excellent an effect and the
resulting changes were developed with such speed that
many are now forgetful of its benefits. When, some
months ago, we were near the brink of a most serious international complication, few people stopped to consider the
fact that we were not then subjected, through fear of
panic, to any convulsions, such as we should inevitably
have experienced before the establishment of the Federal
Reserve Banks. I shall not tire you by enumerating
the benefits of the system. I believe that those who
think already know them; while those who do not think
will learn to know them from actual experience. That
will be conspicuously the case when excess reserves
are next reduced and when higher rates for money again
prevail.
I could wish, for many reasons, that it might have been
possible to open the Federal Reserve Banks before the
war began and that they might have furnished the about
$380,000,000 of notea that were issued under the AldrichVreeland Act, as amended by the Federal Reserve Act.
The functions of Federal Reserve Banks in general and
our present policy would then be better understood and
there would be less talk about our earning capacity and
the necessity of preserving the prestige of our Federal Reserve Banks by earning dividends. Had the Federal
Reserve Banks been in operation when the war began and
had they issued all the currency required last autumn, the
rediscounts underlying these notes, at 5 per cent interest,
would have produced a return of about $4,500,000, or
about the sum required to cover running expenses and
dividends of all Federal Reserve Banks for a year.

NOVEMBEU 1, 1 9 1 5 .

FEDERAL RESERVE BULLETIN.

If the. Federal Reserve Banks had put out this circulation and secured this return, would anyone suggest at this
time that our banks should now make efforts to employ
their money? Would not everyone agree that this present
period of excessive ease of money was the proper moment
for the reserve banks to withdraw their reserve money
from active employment?
Earning capacity must never be considered the test of
the efficiency of Federal Reserve Banks. Personally I
should have felt heartily ashamed had all our banks, considering the circumstances under which they began operations, earned their dividends in the past year. Such an
earning, with all it implied, would have been a proof that
they had completely misunderstood their proper functions
and obligations. It must be conceded, however, that only
men who have been trained in banking or who have given
close study to the question will fully understand that
failure to earn dividends does not mean the impairment
of the prestige of a Federal Reserve Bank as it would that
of a member bank. It can not, moreover, be denied that
the banking instincts of those in charge of the banks will
always remain—if only subconsciously—sensitive on this
score.
For these reasons it may well prove advisable to reduce
the proportion of the paid-in capital of the Federal Reserve
Banks so as to reduce, as far as possible, the conscious and
subconscious pressure to force the funds of Federal Reserve
Banks into actual employment at times when these funds
should properly be withdrawn or held idle. Unless in
times of great ease of money Federal Reserve Banks withdraw the bulk of their money from actual employment,
they can not possibly be prepared to have their funds
available at the turn of the tide when their beneficial
powers should make themselves felt.
It is apparent, therefore, that the smaller we can consistently make the dividend requirement and the operating
expenses of the Federal Reserve Banks the better protected the system will be in time of trial.
But, on the other hand, we dare not consider the item
of expense when it involves questions of safety. One of
the heavy items of expense, for instance, is that of printing
Federal Reserve notes. A large supply of such notes,
ready whenever required, is, however, a most fundamental
safeguard, and the steady issue of Federal Reserve notes
resulting in an accumulation of gold and gold certificates
in the hands of Federal Reserve Agents will form an important element of strength in times of need.
The Federal Reserve Banks have now in the hands of
Federal Reserve Agents some $135,000,000 of gold and lawful money which, in case of a growing demand for rediscount by the member banks, may be freed by a process of
redemption and substitution of commercial paper. This
gold may be turned, as a free asset, into the vaults of the
Federal Reserve Banks and may thus form the basis for
an additional note issue of $200,000,000. It has been
claimed by some of our critics that this process spells inflation. Nothing could be more unwarranted than such




353

assertion. As long as there are deposited with the Federal
Reserve Agents $10 of gold for each $10 issued in Federal
Reserve notes there is neither inflation nor contraction,
but simply a substitution of one gold certificate for another.
But the beneficial effect will be shown when demand will
spring up for additional circulation, when, as a result, this
demand will be satisfied, not by paying out currency
which may serve as reserve, but by issuing the Federal
Reserve note which has been created for this very purpose.
This process ought to be furthered by all member banks
and even nonmember banks, for it is being carried on for
their own protection. There is no such thing as the interest of a Federal Reserve Bank as against the interest of
member banks. As yet, I fear, this is not sufficiently
understood. The Federal Reserve Bank is the member
banks'; it is your bank, your fire engine, constructed for
your greater protection. You have paid for it and you are
operating it. We are to be considered as your fire marshals. It is our function to see to it that the machinery
is in good order and that conditions are such that fires may
not too easily occur or spread too fast and too far. . But
yours is the engine, and yours is the fire.
It is to your interest that your engine should not become
rusty or obsolete, but that it remain a well-oiled and
efficient instrument. In other words, Federal Reserve
Banks must remain active banks operating in certain
fields with a varying degree,of intensity.
If they are to exert+se. effectually the functions for
which they have been created, access to these fields of
operations must be given them ungrudgingly. They can
not protect you unless they can secure for themselves the
strategic position without which they can not act as
regulators warding off interest rates both too high and too
low and creating for the entire country a basis for a healthy
development on a safe and solid foundation.
It is to your interest to see the Federal Reserve Banks
ag strong as they possibly can be. It staggers the imagination to think what the future may have in store for the
development of American banking. With Europe's
foremost financial powers limited to their own field, with
the United States turned into a creditor nation of all the
world, the boundaries of the field that lies open for ua are
determined only by our own power of safe expansion.
The scope of our banking facilities will ultimately be
limited by the amount of gold that we can muster as the
foundation of our banking and credit structure. Gold that
is carried in the pockets of the people, gold that accumulates as excess reserves in the member banks' vaults, does
not afford the maximum service that the country is
entitled to expect. Excess balances and idle gold should
accumulate in the Federal Reserve Banks. They should
not control $300,000,000 of gold, as they do now, or $450,000,000, as they will after another year, but they should
control a billion or two of gold. The stronger the Federal
Reserve Banks become, the stronger will be the country
and the greater its chance to fulfill with safety and
efficiency the functions of a world banker. The basis of

354

FEDERAL RESERVE BULLETIN".

NOVEMBEH 1 , 1 0 1 5 .

this development must be confidence. Unless the mem- may be safe to say that they will find that many will then
ber banks are profoundly convinced that their balances come in after the next period of anxiety. This is not
are as safe with the Federal Reserve Banks as they are in meant aa a threat, but I am afraid it will be a physical
their own vaults—besides being more useful and efficient impossibility to take them all in during such a period of
there—and unless they are convinced that the Federal stress. Examinations take time, and many State banks
Reserve Banks will not abuse their vast resources for will not look as strong during a critical period as they may
inflation of credit or for the purpose of aggressively com- look to-day. Moreover, the Federal Reserve Banks will
peting with the member banks, the full growth of the find it difficult, in fairness to their own members, then
system, and with that the full growth of American bank- to burden themselves with banks that might add an
element of weakness, remembering that in times of
ing, can not be developed.
I believe that I may say with confidence that both the sunshine and peace such institutions had refused to
Federal Reserve Banks and the Federal Reserve Board contribute their share to the work of protecting the entire
are fully alive to the duty and responsibility that rest upon community.
And now permit me to relate to you one last reminiscence
them in this respect and that they will do their share of
the work as they trust not only the member banks but from ancient history. Aristotle, in defining the elements
of liberty, gives us this definition: ' * One element of liberty
those not now members will do theirs.
Believing in the bankers1 sense of public duty and ani- is to govern and in turn to be governed. The other is, to
mated by the motive of creating the broadest possible live according to one's inclinations." I do not think that
foundation for the development of a strong and united any modern writer has ever given a more interesting or a
banking system in the United States, the Board has gone more original definition of liberty. Liberty without reto the utmost limits of liberality in determining conditions striction is anarchy; submission to restriction arbitrarily
for the admission of State institutions. In order to achieve imposed produces a slavish surrender of human rights.
this aim, it found itself in the difficult position of having Between the two lies true liberty, which means the exerto concede to these State banks and trust companies con- cise of our own free will and powers within the limitations
ditions which, in certain respects, give them a distinct which, for the protection of our liberty, we have agreed to
advantage over national-bank members. It is the hope | impose and enforce amongst ourselves.
&nd aim of the Board to see the powers of national banks
Our Federal ReBerve System is to be considered from
beralized; still, for the t ime being, it remains a fact that this point of view. For your own safety and liberty you
State institutions entering our system are at an advantage. have created this law and created the necessary organizaSuch of them as are strong and conservative may come in tion for its enforcement. You have elected your governpractically with all the powers now enjoyed by them, ment and appointed your directors and officers. Do not
and, in addition, may leave the system if they do not like think now of these administrative organs as something
t. Still they he3itate. As Lucuilus said, " I n times of imposed upon you by others, but only as something of
prosperity it is hard to legislate," and Walter Bagehot, the your own creation. This system, permitting you *' to govBritish economist, expresses the same thought in slightly ern and in turn to be governed," as Aristotle puts it, is an
more.modern language when he says: "Political economy expression and a safeguard of liberty.
ia only an absorbing topic when a nation is, financially and
You create your own traffic laws and clothe the traffic
industrially, uneasy.11
policeman with authority. As long as we obey the law, we
Let me ask those of the State institutions that are proud consider him a means of protection and we resent him as
of their independent standing: Is it quite fair to let your a restraining influence, only when we exceed the speed
neighbors pay for the expense of the fire department when? limit. While the Federal Reserve System is in its early
incase of fire, you know you will count on the benefits of stages, there must of necessity be a great deal of regulatory
the general protection, and when, as a matter of fact, you work. But I sincerely hope that the writing of regulations
enjoy every day the advantage of the greater security pro- will soon become an occasional or incidental function of the
vided by your neighbors? Let me tell them, at the same Federal Reserve Board and that traffic rules in banking
time, that insurance companies are generally willing to will have become no more unusual or irritating than the
take risks while applicants are young and conditions raising of the hand of the traffic policeman.
As for myself, I am not in accord with the school of
serene, but are not very eager to write new insurance when
the "quake" is on. Let me ask you, too, is it conservative thought that believes that law and government's sole funcbanking for State banks to reduce reserve requirements, tion is to regulate. I believe that the function of governas authorized by many State laws in consequence of the ment is not only to regulate but to construct, and I believe
establishment of the Federal Reserve System, if these that I am expressing the feelings of my colleagues of the
State banks do not enter the Bystem? Should not State Federal Reserve Board and of the men in charge of the
banks remaining outside the system, as a matter of pru- Federal Reserve Banks when I say that we are looking
dence, continue to observe the old reserve requirements? forward to the time when all our energies may be applied,
The thought IB often expressed that "at the time of the not to regulation, but to helpful cooperation in the general
next crisis the State banks will all come in." I think it j work of construction.




Reserve Notes Not Frankable.
Federal Reserve notes may not be sent
through the mails under penalty envelopes or
labels canying the frank of the Federal Reserve Board. A ruling to this effect was first
made by the Post Office Department. Desiring to use every effort to obtain the privilege,
the Federal Reserve Board requested the Post
Office Department to submit the question of
franking Federal Reserve notes to the Attorney
General. This was done the latter part of
August, and on October 5 the following opinion
of the Attorney General was sent to the Postmaster General, and by him forwarded to the
Federal Reserve Board:
1 have the honor to acknowledge your letter
of August 24, 1915, wheiein you request my
opinion as to whether Federal Reserve notes
can be sent through the mails under penalty
envelopes or labels by the members of the
Federal Reserve Board.
The solution of the question depends alone
upon the correct interpretation of the act of
December 23, 1913 (U. S. Stat. L., Advance
Pamphlet, p. 251), commonly referred to as
the Federal Reserve Act, the material portion
whereof reads:
"When such (Federal Reserve) notes have
been prepared, they shall be deposited in the
Treasury, or in the sub treasury or mint of the
United States nearest the place of business of
each Federal Reserve Bank^ and shall be held
for the use of such bank subject to the order of
the Comptroller of the Currency for their delivery, as provided by this Act. * * *, and
the expenses necessarily incurred in executing
the laws relating to the procuring of such notes,
and all other expenses incidental to their issue
and retirement, shall be paid by the Federal
Reserve Banks, and the Federal Reserve Board
shall include in its estimate of expenses levied
against the Federal Reserve Banks a sufficient
amount to cover the expenses herein provided
for. 11

. •

This language plainly imposes upon the Federal Reserve Banks all expenses involved in the
procurement, issuance, and retirement of Federal Reserve notes. As the shipment of these
notes to the subtreasury, etc., and ultimately
to the bank applying for them, is necessarily a
step precedent to their issuance, it follows that
the expense of such shipment is one "incidental
to their (the notes) issue," and under the terms
of the act must be borne by the banks.




355

FEDERAL BESBBVE BULLETIN.

NOVEMBEQ 1, 1 9 1 5 .

Numerous other provisions of the Act, not
necessary to be here set forth in detail, manifest
the purpose of Congress to impose upon the
banks all expenses connected with its administration.
Having reached the conclusion that the Federal Reserve Act imposes the expense of shipment upon the reserve banks, I deem it unnecessary to pass upon the additional reason
assigned by your solicitor, viz, that these notes
do not relate "exclusively to the business of the
United States," and therefore, regardless of the
Federal Reserve Act, could not enjoy the benefit
of the free carriage provision of the Act of
March 3, 1877 (19 Stat., 319, 335).
Allotment of Bonds*
Much interest h as been apparent on the part
of Federal Reserve Banks and member banks
of the system in the retirement of bonds under
section 18 of the Federal Reserve Act.
In response to certain of these inquiries there
was sent by the Federal Reserve Board to the
Conference of Governors, opened in Minneapolis
on October 20, a letter containing the results of
its consideration of the matter.
The principal points raised are as follows:
" 1 . In the allotment of bonds at the end of
each quarter, wil
e limitation of $25,000,000
be divided by four and the amount of bonds
purchased by the reserve banks in that quarter
be deducted from the quarterly amount?"
As to this the Board has had passed the following resolution:
Resolved, That until further notice, in requiring Federal
Reserve Banks to purchase United States bonds offered for
sale by member Banks under the provisions of section 18,
the Federal Reserve Board will not allot to any one Federal
Reserve Bank in any one quarter more than one-fourth of
its pro rata share of the bonds to be purchased during the
calendar year under the provisions of this section.

"2. In case the applications received exceed
the amount to be allotted, will the allotments
be based upon the order of receipt of the applications, or upon the pro rata share of each
applying bank?"
It would seem that if the applications filed
with the Treasurer exceed the amount to be
allotted in any one quarter, the allotments

356

FEDERAL RESERVE BULLETIN.

should b e based n o t u p o n the order of receipt
of such applications b u t rather u p o n the pro
r a t a share of each applying bank. The A c t
evidently contemplates t h a t any b a n k which
has its application on file 10 days prior to the
end of the quarterly period will be on an equal
footing with a n y other b a n k which has filed a
similar application, and the order in which such
applications are received would seem to b e immaterial as long as they are filed before t h a t
10-day period.
" 3 . Will a n y mention be made of bonds
securing circulation other t h a n the 2 per cent V
Bonds made eligible for sale b y member banks
under section 18 are n o t limited to 2 per cent
bonds b u t r a t h e r to a n y United States bonds
which are securing circulation. T h a t excludes
the 3 per cent P a n a m a bonds, series 1911, b u t
the 1908-1918 3 per cent bonds and also the
4 per cent bonds, loan of 1925, are eligible if
they, as a m a t t e r of fact, are securing circulation.
" 4 . To w h a t date will the accrued interest on
the bonds t h a t are sold be figured V
There is nothing definite in the A c t to indicate w h a t date shall be fixed to determine the
amount of accrued interest on the bonds sold
under section 18, b u t all provisions of t h a t section, as read together, would seem to justify the
conclusion t h a t the accrued interest should bb
figured as of the date on which the lawful
money to cover the purchase price of such
bonds is deposited with the Treasurer of t h e
United States.
" 5 . If an application to sell bonds is n o t
granted in full a t one quarter day, will it be
considered as continuing in effect for the< balance a t the n e x t quarter day, and so on, until
the sale is completed?"
The Board believes t h a t banks whose applications have n o t been granted in!full a t one
'quarter day should reapply.
<'
••:•:••,
Mr. Strong raises again the question whether
or n o t the limitation of $25,000,000 contained
in the proviso of section IS prohibits the p u r chase b y Federal Reserve Banks of bonds in




XOVEMBEE l,

1915.

the open m a r k e t . T h e Board h a s already ruled
on two or three occasions t h a t t h a t proviso is

not intended to and does not apply to or restrict
the purchase of Government bonds under the
provisions of section 14 of the Act.
Conference of Governors,

The fifth conference of Governors of Federal
Reserve Banks was held in Minneapolis, opening on October 20. There were present at the
meeting, Governors Benjamin Strong, jr., Federal Reserve Bank of New York; A. L. Aiken,
of the Federal Reserve Bank of Boston; C. J.
Rhoads, of the Federal Reserve Bank of Philadelphia; J. B. McDougal, of the Federal Reserve
Bank of Chicago; A. C. Kains, of the Federal
Reserve Bank of San Francisco; George J,
Seay, of the Federal Reserve Bank of Richmond; E. R. Fancher, of the Federal Reserve
Bank of Cleveland; Theodore Wold, of the
Federal Reserve Bank of Minneapolis; R. L.
Van Zandt, of the Federal Reserve Bank of
Dallas; C, M. Sawyer, of the Federal Reserve
Bank of Kansas City; W. W. Hoxton, Deputy
Governor of the Federal Reserve Bank of St.
Louis; F. W, Foote, a director of the Federal
Reserve Bank of Atlanta; C. R. McKay, of
Chicago, with L. H. Hendricks and J. F,
Curtis, of New York.
For the last two days Hon. Paul M. Warburg
and Hon. W. P. G. Harding, of the Federal Reserve Board, were present at the conference.
This is the second conference of the governors
that has been held away from the city of Washington, the first one having been held in Chicago
last June.
Governor Strong, who is chairman of the
conference for the current year, presided at the
meeting. During the course of the four-day
session about 70 topics were discussed. Among
them were the following:
Directors' profits in dealing with member
banks.
Appointment of representative to examine
Federal Reserve notes sent to Washington for
destruction,
.Periodic reports of reserves by member
banks. .
;

NOVEMBER 1, 1915.

Report of the executive committee of the
conference, composed of Mr. Mc-Dougal, chairman, and Messrs. Aiken, Strong, Rhoads,
Fancher, and Seay.
Reports of conference of auditors and
accountants of the reserve banks held at
Washington last summer.
Report of a conference of transit managers
of the banks held in Chicago early in the month.
Report of committee on method of.computing dividends.
Collections and clearances.
Gold settlement fund, daily settlements.
Functions to be exercised in behalf of member
banks.
Cost of Federal Reserve notes.
Cost of returning Federal Reserve notes to
bank of issue.
Retirement of national-bank notes and purchases of Government bonds.
Reserves of member banks.
Cooperation with national-bank examiners.
Standard form 6i trade acceptance.
Domestic acceptances.
Commodity rates.
Advisability of limited open market transactions.
Discussions were also had with respect to the
advisability of recommending the enactment of
amendments to the Federal Reserve Act on
the following topics:
Date of transfer of reserves for member banks.
Elimination of designation of capital for
foreign branches of national banks.
Direct authorization of domestic branches
for national banks.
Par collections.
Domestic acceptances.
Loans on real estate.
Savings bank membership.
The conference adjourned to meet in about
two months, probably in the city of Washington in order to be accessible to the Federal
Reserve Board.
11672—15




357

FEDERAL RESERVE BULLETIN.

-3

GOLD SETTLEMENT FUND.

Total deposits of the Federal Reserve Banks
with the gold settlement fund have decreased
slightly since the issuance of the last Bulletin,
the amount now held being $55,470,000. During the same period, however, the deposits of
the Federal Reserve Agents have been materially increased and now stand at §21,200,000, as
shown in the table giving summary of transactions for the account of Federal Reserve
Agents from September 8 to October 21.
Tables showing the amount of total clearings
to and including October 21, and the balances
at the clearings are given below, also a table
showing net changes in ownership of gold held
in the fund, from which it appears that such
changes have amounted to 5.94 per cent of the
total clearings.
Amount of clearings.
Total
clearings.

Balances.

Previously reported,
Settlement of—
Sept. 30
,
Oct.7
Oct. 14
Oct. 21

$428,600,000

$87,355,000

25,739,000
30,640,000
24,400,000
38,874,000

6,542,000
8,060,000
4,120,000
4,643,000

Total...

548,163,000

110,720,000

Changes in ovmership of gold.
Federal Reserve
Bank.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas*
San Francisco

Total

. Total net
deposits.

Balance,
Oct. 14,
1915.

Increase.

53,230,000 •52,620,000
3,734,000
23,000,000
6,950,000 2,339,000
2,580,000 4,597,000 *S2*6i7,'666"
1,500,000 6,901,000 5,404,000
1—3,240,000 2,736,000 5,976,000
5,098.000
5,770,000 10,863,000
1,220,000 4,054,000 2,834,000
1,400,000 5,125,000 3,725,000
3,330,000 2,748,000
1—1,250,000 6,062,000 7,312,000
5,930,000 3,683,000
65,470,000

55,470,000

Decrease.

$610,000
24,266,000
4,611,000

552,000
2,297,000

32,366,000 1 32,366,000

i The withdrawals of the Federal Reserve Bank of Atlanta and the
Federal Reserve Bank of Dallas have exceeded the amounts of the gold
deposit made by them.
.

358

FEDERAL RESERVE BULLETIN,

Gold settlement fund-nummary

Federal Reserve
Bank o—
f

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

Federal Reserve
Bank o—
f

Boston
New York
Philadelrjhla
Cleveland
Atlanta
St. Lonls
Minneapolis
Kansas City
Dallas
Total

Federal Reserve
Bank o—
f

Boston
New York
Philadelphia.
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
KansasCity
Dallas
San Francisco
Total

Federal Reserve
Bank o—
f

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

Balance
last statement,
Sept. 23,
1915.

S3,228,000
8,789,000
2, SOS, 000
4,813,000
6,396,000
2,483,000
12,454,000
5 124,000
2.658,000
3,028,000
5 053,000
1,916,000
58,750,000

Balance
last statement,
Sept. 30,
1015.

Withdrawn.

Deposited.

"$5,*666,'666"

Balance
last statement,
Oct. 7,
1915.
$3,257,000
1,954,000
3 497,000
Z, 850,000
7,217,000
2,548,000
14,111,000
5,032,000
3 733,000
2,711,000
5,789,000
2,851,000
56,550,000

Balance
last statement.
Oct. 14,
1915.

$5,000,000

Total
debits.

Total
credits.

$2,929,000
9,256,000
3,364,000
433,000
876,000
604,000
3,153,000
2,952,000
170,000
1,422,000
568,000
12,000

$1,847,000
5,499,000
6,025,000
480,000
2,095,000
1,820,000
3,739,000
1,550,000
663,000
1,115,000
1,351,000
549,000

25,739,000

25,739,000

$5,600,000
230,000

»900,000
12,000,000

1,396,000
307,000
1,500,000
9,400,000

5,230,000

Gold.
Withdrawn.

Deposited.

1,080,000

3,050,000

Gold.
Withdrawn.

Deposited.

5,600,000

5,600,000

6,542,000

Credit.

Debit.

$872,000

Net
debits.

$6,350,000
'138,'000

$872,000

872,000

872,000

8,060,000

.

Transfers.

Debit.

Credit.

$264,000

Net
debits.
$945,000
944,000
158,000
149,000

i$900,000
tl,000,000
1,576,000

$264,666

348,000
*53O,666
2,430,000

264,000

Gold.
Withdrawn.

Deposited.

3,650,000

5,000,000

264,000

4,120,000

Credit.

Net
debits.

$300 000
$21,000

21," 666*
21,000

321,666

$2,540,000
1,021,000

1,082,000
34,000

34,666
376,000

376,000

4,643,000

Sept. 30,
1915, balance in
fund after
clearing.

783,000
537,000

$2,146,000
4,432,000
5,069,000
4,860,000
6,945,000
1,699,000
13,040,000
3,728,000
3,151,000
2,721,000
4,336,000
2,453,000

6,542,000

54,5S0,000

$1,661,000
47 000
1,219,000
1,216,000
586,000
493,000

Oct. 7,
1915, balance in
fund after
clearing.

Total
debits.

Total
credits.

Net
credits.

$4,050,000
10,061,000
3,650,000
454,000
1,187,000
875 000
5,132,000
2,630,000
145 000
1,306,000
493,000
57,000

$5,161,000
4,311,000
2,078,000
310,000
2,159,000
1,724,000
6,203,000
3,934,000
727,000
1,446,000
2,126,000
455,000

$1,111,000

972,000
849,000
1,071,000.
1,304,000
582,000
140,000
1,633,000
398,000

$3,257,000
1,954,000
3,497,000
3,850,000
7,217,000
2,548,000
14,111,000
5,032,000
3,733,000
2,711,000
5,789 000
2,851,000

30,640,000

30,640,000

8,060,000

56,550,000

Settlement of Oct. 14,1915.
Total
debits.

Total
credits.

$3,384,000
7,600,000
3,203,000
539 000
1,620,000
1,198,000
3,406,000
1,153,000
103,000
1,603,000
467,000
4,000

$2,439,000
6,716,000
3,045,000
390,000
3,022,000
1,213,000
1,830,000
2,150,000
613,000
1,315,000
1,072,000
595,000

24,400,000

24,400,000

Net
credits.

Total
debits.

Total
credits.

$5,954,000
12,471,000
5,439,000
812,000
2,992,000
964,000
4,933,000
3,772,000
129,000
997,000
398,000
13,000

$5,962,000
9,931,000
4,418,000
1,708,000
3,277,000
2,137,000
3,851,000
3,797,000
1,011,000
1,348,000
1,180,000
254,000

38,874,000

38,874,000

Oct. 14.
1915, balance in
fund after
clearing.

605,666
591,000

$2,312,000
1,274,000
3,339,000
3,701,000
7,719,000
1,563,000
12,271,000
6,029,000
4,243,000
2,363,000
5,804,000
3,442,000

4,120,000

54,120,000

$1,402,000
15,000
997,000
510,000

Settlement of Oct. 21,1915.

Transfers.

Debit.

Net
credits.

Settlement of Oct. 7,1915.

Transfers.

.

* Transfer to Federal Reserve Agent.




Net
debits.
$1,082,000
3,757,000

$5,600,000

$2,312,000
$5,000,000
1,274,000
3,339,000
3,701,000
7,719,000 i $1,100,000
1,563,000
12,271,000
6,029,000 "2,*666,*666*
4,243,000
2,353,000
5
5,804,000
550,000
3,442,000
54,120,000

Settlement of Sept. 30,1915.

Credit.

Debit.

$2,146,000
4432)000
$3,000,000
5 069,000
4,850,000
6 945,000 "»"$700"000"
1.699,000
13,040,000
3.72S, 000
3,151,000
200,000
50,000
2,721,000
1 336,000
180,000
2,453,000
54,580,000

of transactions Sept. $0,1915, to Oct. 21, 1915.
Transfers,

Gold.

NOVEMBER 1, 1915.

Net
credits.

Oct. 21,
1915, balance in
fund after
clearing.

25,000
882,000
351,000
782,000
241,000

$2,620,000
3,734,000
2,339,000
4,597,000
6,904,000
2,736,000
10,868,000
4,054,000
5,125,000
2,748,000
6,062,000
3,683,000

4,643,000

55,470,000

$8,000
896,000
285,000
1,173,000

*$500,000 transferred to Federal Reserve Agent.

NOVEMBER 1,

1915.

359

FEDERAL RESERVE BULLETIN.

Federal Reserve Agents' fund—-Summary
Week ending Sept. 9,
1915.

of transactions Sept. 8,1915, to Oct. 21,1915.
"Week ending Sept. 16,
1915.

Week ending Sept. 23,
1915.

Week ending Sept. 30,
1915.

Deposited.

Depositod.

Balance.

Depositod.

$2,600,000 $2,000,000 $1,100,000
2,000,000 4,500,000 1,000,000

$3,700,000
5,500,000

$900,000
2,000,000

$4,600,000
7,500,000

7,100,000

9,200,000

2,000,000

12,100,000

Federal Reserve Apont at—
Deposited.
Richmond
Atlanta

Balance.

$2,500,666 $2,500,000

Total

2,500,000

2,500,000

4,600,000

Balance.

Week ending Oct. 7,
1915.

2,100,000

Week ending Oct. 14,
1915.

Balance.

Woelr ending Oct. 21,
1915.

Federal Reserve Agent at—
Deposited.
Richmond
Atlanta
Dallas..
Total

$700,000

700,000

.."..'

Balance.

Deposited.

Balance.

$5,300,000
7,500,000

$900,000 SG,200,000
1,000,000 8,500,000
500,000
500,000

$1,100,000
500,000
4,400,000

$7,300,000
S, 500,000
1,000,000
4,400,000

12,S00,000

2,400,000

15,200,000

6,000,000

21,200,000

Balance.

Deposited.

DISCOUNT RATES.
Discount rates of each Federal Reserve Bank in effect Oct. 28', 1915.

Maturities Maturities Maturities
of over 10 of over 30
of 10 days to 30 days, to 60 days,
and less. inclusive inclusive.

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

Trade acceptances.
AgriculMaturities tural and
of over 60 live-stock
to 90 days, paper over To 60 days, Over 60 to
90 days,
inclusive.
90 days. inclusive. inclusive.

Commodity
paper.

13
3

3

(*)

i Rate for commodity paper maturing within 90 days.
* Rate for commodity paper maturing within 30 days, 31 per cent; over 30 to 60 days, 4 per cent ;over 60 to 90 days, 4J per cent; over 90 days,
5 per cent.
.
Authorized rate of acceptances, 2 to 4 per cent.
•
••
.
On March 10 the Federal Reserve Board fixed the following rates for rediscounts between Federal Reserve Banks:
3J per cent for maturities of 30 days or less; 4 per cent for maturities of over 30 days to 90 days, inclusive.




360

PEDEBAL BESEBVE BULLETIK.

NOVEMBER 1,

1015.

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

The Federal Reserve Banks are empowered
under section 14 of the Federal Reserve Act,
subject to rules and regulations prescribed
by the Federal Reserve Board, to—
"purchase and sell in the open market, at
home or abroad, either from or to domestic
or foreign banks, firms, corporations or individuals, cable transfers and bankers' acceptances
and bills of exchange of the kinds and maturities by this Act made eligible for rediscount,
with or without the indorsement of a member
bank."
The Board has already issued regulations
covering the purchase in the open market
of bankers' acceptances, of United States
Government bonds, and of municipal warrants,
but it has not yet issued regulations relating
to "cable transfers" or to the purchase of
"bills of exchange of the kinds and maturities by this Act made eligible for rediscount."
The original bill for the establishment of
Federal jReserve Banks, etc., permitted the
purchase in the open market of "notes, drafts,
and bills of exchange," but in the bill as
finally enacted the words "notes and drafts"
were stricken out in section 14, although
they are retained in section 13, which relates
to discount operations for member banks.
After careful study and investigation the
Board has reached the conclusion, in which
it is sustained by opinion of Counsel, that
Congress beyond question drew a distinction
in sections 13 and 14 between the several
forms of commercial paper, and that promissory
notes, even though bearing an additional
indorsement, must be regarded as excluded
from open-market purchases under section
14. There remain then, as eligible for purchases under this section, "cable transfers"
and "bills of exchange" of two kinds, (1)
so-called foreign bills of exchange, and (2)
domestic bills of exchange (other than bankers' acceptances) drawn by one party on
another, as by a seller of goods upon the
purchaser, such as have been classified by the
Board as "trade acceptances," either accepted or not accepted at the time of purchase.




In view of the abnormal conditions prevailing in Europe, the Board feels that the banks
should be more than usually cautious in any
foreign exchange operations entered into at this
time. As to open-market dealings in "domestic
bills," while the special rate authorized for this
class of paper may prove in the future a helpful
factor in developing its freer use, the Board has
been informed that the supply of desirable
paper is still very limited. There are also other
objections that may be urged against openmarket operations in "domestic bills" at this
time. However, the Federal Reserve Board
recognizes that the Federal Reserve Banks have
the right to engage in open-market operations
in bills of exchange and that the decision
whether the Federal Reserve Banks should
engage in such open-market transactions rests
entirely with them, severally, and not with the
Federal Reserve Board. Should the transactions engaged in by any bank assume very
large proportions or develop along lines which
would make regulation appear desirable, the
Federal Reserve Board will exercise its right at
any time to regulate such transactions, but at
present the Board deems it best to leave each
Federal Reserve Bank free to exercise the authority granted under section 14, with respect
to bills of exchange, without governing or restricting regulations, it being understood, of
course, that any Federal Reserve Bank; desiring to establish an open-market rate for domestic bills of exchange by this Act made eligible for rediscount will submit such rate to the
Board for approval and determination in the
customary way. You are cautioned that no
bill may be bought in the open market which,
even if indorsed by a member bank, would be
ineligible for rediscount under section 13.
The Board appends opinions of Counsel bearing upon the subject of open-market transactions.
Please call this letter to the attention of your
board of directors.
OCTOBER 8,

1915.

Election of Directors.
Inasmuch as the term of office of one Class A
director and one Class B director of your bank
will expire December 31, 1915, arrangements
should be made to hold an election of directors
to succeed those whose terms expire, such new
directors to serve for terms of three years each.
For your information and guidance there are
inclosed copies of forms used by the Reserve

NOVEMBER l f

1915.

FEDERAL RESERVE BULLETIN.

361

Bank Organization Committee and letters of
instruction sent at that time setting forth the
procedure in such cases. The Board has fixed
November 16 as the date for opening the polls.
You should accordingly arrange to have printed:
(a) Certificate of election of district reserve
elector.
(b) Certificate of nomination for Class A

twelfths, and for each succeeding 6 months an
additional one-twelfth"
of 12 per cent of the aggregate amount of its
demand deposits, and of 5 per cent of its time
deposits. Similar language is used with reference to the banks in reserve cities.
The "said date" referred to is the date officially announced by the Secretary of the Treasdirector. -»f
.-i ':••''•
ury for the establishment of a Federal Reserve
(c) Certificate of nomination for Class B Bank in any district. That date was Novemdirector.
. :r
ber 16, 1914.
These certificates, copies of :which are inIt therefore fol^ys that on November 16,
closed, contain form of resolution to be adopted 1915, country banks and banks in reserve cities
by the member banks. < A sufficient number of will be required to pay their Federal Reserve
these certificates should be prepared and mailed Bank an additional installment of reserves.
to each member bank in the group which elected The amount thus to be paid by them will be
the director whose term expires on December for country banks one-twelfth of 12 per cent
31, 1915. It will be necessary, therefore, for of their demand deposits, as held on and after
you, as chairman of the board, to group the November 16, plus one-twelfth of 5 per cent
banks in your district in accordance with the of their time deposits; and for banks in reserve
Act, following the general lines of the plan set cities one-fifteenth of 15 per cent of their demand
forth in the circular of the Organization Com- deposits, plus one-fifteenth of 5 per cent of their
mittee,'herewith inclosed. When these cer- time deposits.
tificates have been returned by the banks the
It is suggested that each Federal Reserve
electors should be listed and the preferential Bank call the attention of each member bank
ballot prepared. A copy of the form used in to the date upon which the transfer of reserves
the first election is also inclosed for your above referred to is due, and that it arrange
information.
•" ;
such additional details with 'member banks
Under the provisions of section 4 this ballot as may seem desirable. The Board recomneed not show the name of the bank placing in mends that the member banks be called upon
nomination any candidate, but a separate list to pay their own express charges unless there
may, at the option of the chairman, be pre- is some good reason why the Federal Reserve
pared showing by w k ° m each candidate is Bank of the district thinks it best to bear these
nominated. If this is done the ballot form express charges itself. The form in which payused will be somewhat simplified, since the ment is to be made may be suggested by the
voting columns, showing the first, second, and Federal Reserve Bank in such circular or notice
third choice of the elector, can appear on the as it may send out, and it will be well to make
same page as the name of the candidate.
some reference to the provision of the Act that
Arrangements should be made to have the any Federal Reserve Bank may receive from
ballots in the hands of the electors by=Novem- its member banks as reserves "not exceeding
ber 1. The polls will be closed after 15 days one-half of each installment eligible paper as
from November 16.
described in section 13, properly indorsed and
acceptable to the said Federal Reserve Bank*
SEPTEMBER 30,1915.
Payment of Reserves,
Inasmuch as the date when the next installment of reserves will be payable by member
banks to Federal Reserve Banks is approaching, the Federal Reserve Board has directed
the transmission of this letter for the purpose
of securing uniform action with reference to
such payments.
Section 19 of the Federal Reserve Act requires each member bank not in a reserve or
central reserve city to keep—*
"in the Federal Reserve Bank of its district
for a period of 12 months after said date two-




OCTOBER 1, 1915.

"Federal" Not Now Prohibited.

You are advised that there is no provision
of the Banking Act or of the Federal Reserve
Act which prohibits the use of the word
"Federal" by a State institution as a part of
its name.
Section 5243 of the Revised Statutes of the
United States forbids the use of the word
11
National" as a part of the name of a bank
not. organized under the national currency
laws, and the matter is now being considered

362

FEDERAL RESERVE BULLETIN.

of asking Congress to amend this section so as
to include the word " Federal."
The Board is glad to have this information, as
it may prove helpful in obtaining the desired
legislation.
OCTOBER 4,

1915,

Eligible Acceptors.
I have received your letter of October 2, and
h&ve submitted the same to the Board.
Your letter contains the following paragraph:
"The point on which he desires information
is, whether or not a firm, person, company, or
corporation referred to in said subdivision (b)
must be engaged exclusively in banking, or the
business of accepting or discounting before its
acceptances can be handled by Federal Reserve
Banks, In other words, a commission house
at Fort Worth, as incident to their main business, are engaged in the business of accepting
and discounting; such is not their sole business,
but they are engaged in that business in a
limited degree. Now, the point upon which I
desire information is, whether or not the Federal Reserve Bank may handle acceptances of
concerns who do some accepting and discounting, but who do not engage exclusively in that
business, or in the banking or trust company
business?"
On this point I am directed to cite to you the
provisions of the acceptance regulation, and to
say that the question of determining the eligibility of an acceptor under the regulation is left
to tne discretion of Federal Reserve Banks
themselves. It is, of course, understood that
the Board would not wish to see concerns
regarded as eligible acceptors which are not in




the habit of carrying on some acceptance business regularly and are not generally of such
character and standing as to qualify their
acceptance as a "banker's acceptance,"
OCTOBER 8,1915.

1915.

Compensation of Deputy Reserve Agents.
At a meeting of the Federal Reserve Board,
held this morning, October 6, I was instructed
to inform the respective Federal Reserve
Agents and directors of Federal Reserve Banks
that, where the compensation of the Deputy
Federal Reserve Agent is fixed upon a per
diem basis and no regular duties have been
assigned to him by the Federal Reserve Agent
or by the respective boards of directors, no
payment of compensation should be made to
such deputy agents except for official services
rendored to the banks at the request, in writing,
of said Federal Reserve Agents or of said
boards of directors. This ruling is not intended
to prevent the payment of directors' fees for
attendance at meetings of the board.
OCTOBER 6,

NOVEMBER l p 1 U 1 5 .

Member Banks Not Receivers*
I wish to acknowledge receipt of your letter
of October 8, relating to the question of national
banks acting as receivers.
The Board has received a number of inquiries
of this nature and has ruled that section 11 (k)
does not confer upon it the authority to authorize national banks to act as receiver, the powers
referred to in that section being limited to
trustee, executor, administrator, and registrar
of stocks and bonds.
OCTOBER 11,

1915.

Clayton Act Interpretation.

I wish to acknowledge receipt of your letter
of October 12, relating to the question of your
eligibility to serve as a director of both a
national bank and a savings bank organized
and operating under the laws of your State.
You are advised that there is nothing in
section 8 of the Clayton Act which prohibits
a person who is a director and officer of a
national bank with total resources exceeding
$5,000,000 from serving at the same time as a
director of a State institution with resources
less than that amount, provided, first, that
tho State institution is not a member of the
Federal Reservo System, and second, that the
State institution is not located in the same city
as the national bank, or, if in the same city,
that the city has loss than 200,000 inhabitants.
Under the facts as stated by you it is evident
that you are eligible to qualify as a director of
both institutions mentioned in your letter.
OCTOBER 14,

1915.

Window Advertising.

Your letter of October 6 has been received
and placed before the Board, and by it referred
to a special committee. The opinion was expressed that member banks should be discouraged from placing signs on their windows
reading "Deposits have Government protection," or "This bank has Government protection." It was suggested rather that a sign
reading "Member of Federal Reserve System
offers depositors all the protection and facilities
afforded by membership."
OCTOBER 15,

1915.

NOVEMBKB 1 , 1 9 1 5 .

FEDEEAL BESEBVE BULLETIN.

363

LAW DEPARTMENT.
The following opinions of counsel have been
A mortgage, on the other hand, is more than
authorized for publication by the Board since either of these, for it is in no way dependent
the last edition of the Bulletin:
~~ upon possession and legal title vests in the
mortgagee outright, the mortgagor retaining a
Pledges of Collateral Security.
Kediscounts held by a Federal Reserve Agent as secur- mere equity of redemption. In the case of the
ity for Federal Reserve notes, and gold order certificates pledge, however, the general property or title
deposited with a Federal Reserve Agent for the purpose of remains in the pledgor, the pledgee obtaining
reducing the liability of a Federal Reserve Bank for its a specific property merely for the security of
outstanding Federal Reserve notes, must be so indorsed the obligation. (Jones v. Baldwin, 12 Pick.
as to enable such agent to realize on such securities or to
(Mass.), 316; Thompson v. Dolliver, 132
convert such certificates into gold if necessary.
Mass., 103; Parshalv. Eggart, 52 Bab. (N. Y.)
367.)
JUNE 28, 1915.
There is au exception or qualification to this
Sm: The following question has been regeneral distinction between mortgages and
ferred to this office|for an opinion:
(1) Must rediscounts hold by a Federal Re- pledges, regarding the transfer of title, in the
serve Agent as collateral for Federal Reserve case of choses in action or negotiable instruments. (Jones on Collateral Securities and
notes be indorsed payable to such agent?
Pledges, 3d ed., p. 14.) This exception is a
The term "collateral security" or "collateral" has been defined in Jones on Collateral natural result of the fact that a negotiable inSecurities and Pledges to mean "a pledge of strument usually can not be pledged without a
transfer of title necessarily resulting from the
incorporeal property assignod or transferred
transfer of possession. The'fact that the title
and delivered by a debtor * * * to a
does pass in such a case does not of itself make
creditor as security for the payment of a debt
the transaction a mortgage. (2 N. Y. 443.)
or the fulfillment of an obligation/'
In discussing this point in Gay v. Moss, 34
In consequence, section 16, in providing that
Cal. 125, 132, the court said:
a Federal Reserve Bank shall deposit collateral
"The
with the Federal Reserve Agent as security for the thingassignment was absolute in form, but
assigned is a chose in action, and the
Federal Reserve notes, impliedly requires that assignment and delivery are necessary to give
notes and bills made eligible for this purpose the pledgee the full authority to readily control
it, and afford a prompt means of making the
be pledged with the Federal Reserve Agent.
In order, therefore, to determine what steps pledge available. For these reasons the fact
that the
in form by
must be taken to effect a valid pledge of the in case oftitle passes action, doesthe assignment,
a chose in
not necessarily
securities deposited with the Federal Reserve make it a mortgage. It is a pledge * * *."
Agent as collateral for Federal Reserve notes,
On page 15 of Collateral Securities and
it is necessary to discuss briefly the legal points Pledges, supra, it is stated that—
involved in the law of pledges.
the pledge (of negotiable paper)
A pledge is more than a lien. Both depend an"To makesecurity, it is necessary that the
effectual
upon a continuance of possession by the pledgee should have the legal title. * * "*
pledgee or lienee and, generally speaking, title A transfer of the title to such incorporeal propremains in the debtor in both cases. But the erty is generally an essential part of the depledgee, unlike the lienee, has an implied livery of it in pledge. An absolute transfer of
property as security
power of sale, and this is the main distin- suchnot a mortgage. The for a debt is a pledge
and
general property may
guishing feature between the two. (Doane vm be regarded as remaining in the debtor, though
Russell, 3 Gray (Mass.), 382; First National the legal title may be transferred to the
creditor."
Bank v. Harkness, 42 W. Va., 156, 164.)




364

FEDERAL RESERVE BULLETIN.

It would seem, therefore, that a Federal Reserve Bank, in transferring eligible paper to a
Federal Reserve Agent as collateral security for
Federal Reserve notes, should indorse such
paper in some manner—to be discussed hereafter—such as will give to the agent the legal
right to realize directly on this security whenever it is necessary.
It is true that negotiable paper made payable to order, may be pledged by the delivery
of possession without indorsement, but in
such case the pledgee obtains a mere equitable security, good as between him and the
pledgor. The pledgor retains legal title, and
though the pledgee could maintain a suit upon
it in the name of the pledgor—and in some
States in his own name—nevertheless, in such
action he would be subject to any equitable
defense against the pledgor set up by the
defendant.
There is a further objection in the fact that
the mere possession of such paper when not
indorsed to the Federal Reserve Agent is not
sufficient evidence that he is holding it in
pledge. In such a case there must be some
further evidence of a contract of pledge before
the holder could be declared a pledgee. (Jones
on Collatoral Securities and Pledges, p. I l l ;
Sharmer v. Mclntosh, 43 Nebr., 509.) In this
latter case two notes were delivered to the
pledgee, under exactly similar circumstances.
One was indorsed, the other unindorsed. The
court held that the indorsed note was a valid
pledge, under the facts, but that the unindorsed
note was not, because there was no evidence of
an actual contract of pledge. There must be,
of course, a contract, either expressed or implied, in all cases. The general rule is that a
mere delivery of the property, without any
writing, constitutes a valid pledge, the contract
being implied in law, but tho delivery of an
.unindorsed negotiable note is not of itself
sufficient evidence.
A collateral agreement giving the Federal
Reserve Agent power of attorney to collect
on all paper in his possession would give him
only the right to sue on tho paper in the name
of the Federal Reserve Bank, and he would




NOVBMBEK 1,

1915.

be subject to all equities or offsets which could
be made against the bank itself.
Because of these objections, it seems a far
safer and wiser course to require Federal
Reserve Banks to make a valid legal pledge
of paper deposited with the Federal Reserve
Agent as collateral security," and in order to do
this, it is necessary that an indorsement be
made which would make the note payable to
the Federal Reserve Agent, giving to him the
legal right to realize directly, and without
danger of equitable defenses, on the security
in his possession. It is suggested, therefore,
that in any case where the paper is not indorsed in blank by the member bank, the indorsement by the Federal Reserve Bank may
be made in any one of the three following ways:
(1) The Federal Reserve Bank may indorse
the rediscounts in blank;
(2) It may indorse them to the order of the
Federal Reserve Agent; or
(3) It may indorse them, "Pay to the order
of any bank or banker or to the Federal Reserve Agent, or to ourselves/'
It is to be noted, however, that if eligible
paper is tendered to the Federal Reserve Agent
as collateral security indorsed in blank by the
member bank which secured the rediscount, or
if the paper is indorsed to the order of the Federal Reserve Bank or the Federal Reserve
Agent, it will not be necessary for the Federal
Reserve Bank to make any further indorsement in order to vest the proper title in the
Federal Reserve Agent. In such case, however, the list of rediscounts filed with the Federal Reserve Agent showing securities deposited
as collateral for Federal Reserve notes should
contain a full description of all such items in
order that they may be identified, if necessary,
as a part of such collateral security.
It has been suggested by some of the Federal
Reserve Banks that they would prefer not to
reindorse rediscounts p payable to the Federal
Reserve Agent, because such an indorsement
would indicate that this paper had been used
as the basis of a note issue; but, if the indorsement suggested above—that is, an indorsement payable "to the order of any bank or

NOVEMBEtt 1, 1 9 1 5 .

FEDERAL RESERVE BULLETIK.

365

banker, or to the Federal Reserve Agent, or to Single Name Paper.
ourselves/' be made, there will be no indication Any Federal Reserve Bank may, under the provisions
on the paper that it has actually been used as of section 14 of the Federal Reserve Act, purchase acceptthe basis of a note issue and at the same time ances and bills of exchange of certain kinds and maturities in the open market, but promissory
as disthe legal right due the reserve agent will have tinguished from bills of exchange, whether notes or more
one
been afforded. Under such an indorsement he names, are not eligible for such purchase.
could collect direct on any rediscounts deposOCTOBER 8, 1915.
ited with him for security of note issues.
SIR: The question has been raised whether
Another question presented is:
Federal Reserve Banks may, under the pro(2) Must gold order certificates made pay- visions of section 14 of the Federal Reserve
able to the Federal Reserve Bank be indorsed
to the Federal Reserve Agent by such bank Act, purchase single-name paper in the open
when such certificates are deposited with the market.
Federal Reserve Agent for the purpose of
Section 14 provides in part that—
reducing liability on outstanding note issues ?
"Any Federal Reserve Bank may, under
It is suggested that when gold order certifi- rules and regulations prescribed by the Federal
cates which are made payable to the order of Reserve Board, purchase and sell in the open
the Federal Reserve Banks are deposited with market, at home or abroad, either from or
the Federal Reserve Agent for the purpose of to domestic or foreign banks, firms, corporations, or individuals, cable transfers, and
reducing liability on outstanding note issues, bankers' acceptances and bills of exchange of
the reserve bank should indorse such certifi- the kinds and maturities by this act made
cates payable "to the order of the Federal Re- eligible for rediscount, with or without the
serve Agent or to the order of ourselves." Of indorsement of a member bank."
course, if gold order certificates are issued payUnder the provisions of this section a Fedable "to the order of the Federal Reserve Bank eral Reserve Bank may purchase bills of
or the Federal Reserve Agent/' no further in- exchange (that is, orders drawn by one perdorsement will be necessary.
son on another to pay on demand, or at a
It is true that these certificates are deposited fixed or determinate future time, a sum cerwith the Federal Reserve Agent, to be held by tain in money to order or to bearer), whether
him until the Federal Reserve Bank offers in before or after acceptance, provided they are
exchange its Federal Reserve notes, and it may of the kinds and maturities made eligible for
be contended, therefore, that it is not necessary rediscount under section 13.
to vest the legal title to such certificates in the
It is clear, however, that promissory notes,
Federal Reserve Agent.
as distinguished from bills of exchange, are
From a practical standpoint, however, he not eligible for purchase under section 14,
may be called upon to transfer some part of the irrespective of the number of names thereon.
gold represented by such certificates to tfo
Respectfully,
Treasurer for redemption of notes at the TreasM. C. ELLIOTT, Counsel.
ury, or he may be called upon to deliver to th
To Hon. CHARLES S. HAMLIK,
Federal Reserve Bank only a part of the gold
Governor Federal Reserve Board.
so held; and so he must be placed in a position
to convert such certificates into gold or into
gold certificates, in denominations that will enable him to meet either of these two contin- Election of Directors.
Any person coming within the inhibitions of Bection 8
gencies.
of the act generally known as the Clayton Antitrust Act,
Respectfully,
who is elected a director at the annual election in January,
M. C. ELLIOTT, Counsel. 1916, may serve in that capacity until October 15,1916.
To Hon. CHAKLES S. HAMLIN,

Governor Federal Reserve Board.
1167^-15 4




The vacancy occurring in such case on October 15, 1916,
may be filled by the remaining directors.

366

FEDERAL EESBEVE BULLETIN.

OCTOBER 12,

1915.

SIR: In an opinion published on page 222 of
the August, issue of the Federal Reserve Bulletin this office discussed the following question
which had been submitted to it for consideration:
"If a director of a national bank having deposits, capital, surplus, and undivided profits
aggregating more than §5,000,000 is elected at
the annual meeting in January, 1916, may he,
without violating section 8 of the act referred
to, continue to serve until January, 1917, and
at the same time serve as a director of another
national bank?7'
It had been suggested that directors under
such circumstances, elected in January, 1916,
could serve until January, 1917, by reason of
that provision of the act, generally known as
the Clayton Act, which reads as follows:
"* * * when a director, officer, or employee has been elected or selected in accordance with the provisions of this act it shall be
lawful for him to contiaue as such for one year
thereafter under said election or employment."
In the opinion referred to, however, after reviewing the general provisions of the act in
question, the conclusion was reached that a
person who is a director or other officer of a
bank having aggregate resources of more than
$5,000,000 will be ineligible to serve as a director on the board of another national bank
or of a State bank or trust company which is
a member of the Federal Reservo System after
October 15, 1916, although elected at a meeting held in January, 1916.
From letters subsequently submitted to this
office for consideration it appears that this
opinion has been interpreted to mean that no
bank can elect a director at the meeting to be
held in January, 1916, if, after October 15,
1916, such director will become ineligible, and
this specific question has been submitted to
this office for consideration.




NOVEMBER l ,

1915.

Section 5145, Revised Statutes, provides in
part that directors of national banks shall be
elected—
1
' * * * at meetings to be held on such day
in January of each year as is specified therefor
in the articles of association. The directors
shall hold office for one year and until their
successors arc elected and have qualified."
Section 5146, Revised Statutes, provides in
part that—
"Any director who ceases to be the owner of
the required number of shares of the stock, or
who becomes in any other manner disqualified,
shall thereby vacate his place."
Section 5148, Revised Statutes, provides
that—
"Any vacancy in the board shall be filled by
appointment by tho remaining directors, and
any director so appointed shall hold his place
until the next election."
In view of these provisions it seems clear that
directors who will be ineligible to serve after
October 15, 1916, may be elected at the annual
meetings to bo held in January, 1916; that they
will become disqualified to servo on October 15,
1916, and that their offices will thereupon become vacant and their successors may be appointed by the remaining directors, who shall
serve until the next election.
In the case of State banks or trust companies
which are members of the Federal Reserve
System, but which are not subject to the provisions of tho Revised Statutes above quoted,
successors to directors becoming disqualified on
October 15, 1916, should be elected in accordance with the charters and by-laws of such
associations and in conformity with any State
laws which provide for filling vacancies on
boards of directors of such State banks or trust
companies.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon.

CHARLES S- HAMLIN,

Governor Federal Reserve Board.

NOVEMBER 1, 1915.

FEDERAL RESERVE BULLETIN.

Fiduciary Powers Granted.

367

Intradistrict Clearing System.

Applications from the following banks for
Immediate credit at par has since October 4,
permission to act under section 11 (k) of the 1915, been given by the Federal Reserve Bank
Federal Reserve Act have been approved since of New York to drafts on the Federal Reserve
the issue of the October Bulletin, as follows: Bank of Richmond, Va. Notice of this arrangement was given in the following letter:
DISTRICT No. 1.
Trustee, executor, administrator, and registrar of stocks
RICHMOND, VA., October 4t
and bonds:
First National Bank, Brandon, Vt.
To members of the Federal Reserve Bank of RichTrustee, executor, and registrar of stocks and bonds:
mond:
Norway National Bank, Norway, Me.
This is to advise you that, from this date,
DISTRICT No. 3.

Trustee, executor, administrator, and registrar of stocks
and bonds:
Deposit National Bank, Dubois, Pa.
Peoples National Bank, Laurel, Del,
DISTRICT No. 4.

Trustee, executor, administrator, and registrar of stocks
and bonds:
First National Bank, Greenville, Pa.
McDowell National Bank, Sharon, Pa.
Trustee and registrar of stocks and bonds:
German National Bank, Marietta, Ohio.
DISTRICT No. 7.

Trustee, executor, administrator, and registrar of stocks
and bonds:
Franklin County National Bank, Brookville, Ind.
DISTRICT NO. 9.

Trustee, executor, administrator, and registrar of stocks
and bonds:
Aberdeen National Bank, Aberdeen, S. Dak.

your drafts on this bank will be received by the
Federal Reserve Bank of New York from members of its collection system, until further notice
for immediate credit at par.
Up to the present time drafts on Federal
Reserve Banks have been received by other
Federal Reserve Banks subject to deferred
credit, according to a prearranged schedule.
The deferred credit perioa between the
Federal Reserve Bank of New York and this
bank has been one day, being the time of
transit.
The arrangement now made will have practically the enect of giving the currency of New
York exchange to your drafts on this bank.
We further advise you that by arrangement
with the Federal Reserve Bank of New York,
checks and drafts on all Richmond banks and
trust companies, both members and nonmembers, will also be received by that bank from
members of its collection system, until further
notice, for immediate credit at par.
Very truly, yours,
GEO. J.SEAY, Governor.

DISTRICT No. 11.

Trustee, executor, administrator, and registrar of stocks
and bonds:
Marshall National Bank, Marshall, Tex.
DISTRICT NO. 12,

The total number of banks which have
joined the intradistrict clearing system is 2,456,
shown by districts as follows:
District No. 1
50

Trustee, executor, administrator, and registrar of stocks District No. 2
District No. 3
and bonds:
District No. 4
First National Bank, Milton, Oreg.
District No. 5
American National Bank, Pendleton, Oreg.
District No. 6
First National Bank, Pendleton, Oreg.
District No. 7
First National Bank, Portland, Oreg.
District No. 8
Seattle National Bank, Seattle, Wash.
District No. 9
Trustee, executor, and administrator:
District No. 10
First National Bank, Harrisburg, Oreg.
DistrctNo.il
Executor and administrator:
District No. 12
First National Bank, Ontario, Oreg.
Eegistrar of stocks and bonds:
Total
Nevada First National Bank, Tonopah, Nev.




126
120
123
91
74
116
365
184
951
96
160
2,456

368.

FEDERAL RESERVE BULLETIK.

NOVEMBEU 1,

1915.

DISTRICT NO. 8.
Additions to and withdrawals from the sysAdditions:
tem since the publication of the lists in preFirst National Bank, Clarksville, Ark.
vious issues of the Bulletin are as follows:
National Bank of Arkansas, Pine Bluff, Ark.
DISTRICT NO. 1.

Additions:
Old Colony Trust Co., Boston, Mass.
First National Bank, Greenfield, Mass.
Withdrawals:
First National Bank, Suffield, Conn.
DISTRICT NO. 2.

Additions:
First National Bank, East Newark, N. J.
First National Bank, Morristown, N. J.
Withdrawals:
National Bank of Westfield, Westfield, N. J.
First National Bank, Tuckahoe, N. Y.
DISTRICT No. 3.

Additions:
Elk County National Bank, Ridgway, Pa.
Withdrawals:
Farmers National Bank, Watsontown, Pa.

DISTRICT NO. 9.

Additions:
Farmers National Bank, Aitkin, Minn.
German-American Bank, Minneapolis, Minn.
Stockmen's National Bank, Fort Benton, Mont.
Commercial National Bank. Great Falls, Mont.
Great Falls National Bank, Great Falls, Mont.
DISTRICT NO. 11.

Withdrawals:
First National Bank, Jacksonville, Tex.
First National Bank, Mount Calm, Tex.
First National Bank, Omaha, Tex.
First National Bank, Sulphur Springs, Tex.
DISTRICT NO.

12.

Additions:
Northern California National Bank, Redding, Cal.
First National Bank, St. Maries, Idaho.
First National Bank, Brigham City, Utah.

DISTRICT NO. 4.

Additions:
First National Bank, St. Paris, Ohio.
Withdrawals:
Merchants National Bank, Butler, Pa,
Spring Valley National Bank, Spring Valley, Ohio.
DISTRICT NO. 5,

Additions:
First National Bank, Rocky Mount, N. C.
First National Bank, Sumter, S. C.
DISTRICT NO. 6.

Additions:
First National Bank, Daytona, Fla.
First National Bank, Statesboro, Ga.
First National Bank, Waynesboro, Ga.
Citizens National Bank, Dickson, Tenn.
Withdrawals:
First National Bank, Aimiston, Ala.
Cordele National Bank, Cordele, Ga.
First National Bank, Sandersville, Ga.
National Bank of Tifton, Tifton, Ga.
First National Bank, Valdosta, Ga.
First National Bank, Woodbury, Tenn.
DISTRICT NO. 7.

Additions:
Mills County National Bank, Glenwood, Iowa.
Withdrawals:
Rush County National Bank, Rushville, Ind.




Balances as Reserves.

The question whether State banks which are
members of the Federal Reserve System may
count as part of their reserves balances carried
with other State banks and trust companies
has been under advisement by the Counsel of
the Federal Reserve Board.
Counsel now holds that, although the
Illinois law is silent on the question, the
Auditor of Public Accounts has specifically
ruled that banks located in Illinois may count
as part of their legal reserve, balances due from
other State banks or trust companies, and it
would seem to be entirely consistent with the
purpose and intent of the Act for the Federal
Reserve Board to permit State banks or trust
companies located in Illinois, which become
members of the Federal Reserve System, to
count as part of their reserve balances due from
other State banks or trust companies for a
period of three years from the establishment of
the Federal Reserve Bank of Chicago. The
Board has approved Counsel's opinion in the
matter.

NOVEMBER 1,

1915.

FEDERAL EESERVE BULLETIN.

369

REPORT OF FEDERAL RESERVE AGENTS' checks constitutes a restriction. Membership
in the collection system requires them to carry
COMMITTEE ON CLEARINGS.

larger reserves, tho burden of which will bo felt
increasingly as more and more of their reserves
In this report it is suggested that each dis- are transferred to Federal Reserve Banks.
trict be allowed to handle the clearing situation CHECKS ARE NOT COUNTED AS RESERVES AND
in the way that seems best suited to meet its
RESERVES PAY THE COST OF COLLECTIONS.
local conditions. It allows an immediate credit
and immediate debit basis, or a deferred credit
One of the purposes of the Federal Resorve
and deferred debit basis. It also suggests that System is to concentrate reserves and put an
each Federal Reserve Bank may carry such end to the pyramided reserves which the
portion of its float as it feels that the needs of National Bank Act has permitted. An inits member banks warrant. It also suggests evitable accompaniment of this reform is tho
that the intradistrict and interdistrict systems elimination of checks-in-transit from the reof clearings can bo developed simultaneously.
serves of member banks. Such checks, forIn addition to what the report sets out, per- warded by one bank to another for collection
sonally, I believe:
and counted in its reserve before either credit
First. That whatever system is adopted by or remittance for them has been received, conthe respective Federal Reserve Banks, it should stitute a so-called u float" of large proportion^
be made mandatory on the member banks of the natural volume of which is often further
each district. A positive stand on the part of increased by indirect routing and delayed
each Federal Reserve Bank, it seems to me, remittance arrangements.
will help the banks to overcome their spirit of
In many cases tho same check-in-transit
hesitation and inspire a spirit of confidence in serves as a reserve for both a country bank
what is being done.
and its reserve city correspondent. These two
Second. That whatever system is adopted, classes of banks are able to use their balances
the ultimate aim should be an immediate credit with reserve agents to compensate tho latter
and immediate debit basis, as this, in my judg- for their services in collecting checks. Not
ment, is the soundest banking method, one that only do they receive immediate credit for checks
will correct the present evil of drawing checks they deposit with reserve agents, but checks
against anticipated balances, and is less liable drawn upon them are seldom charged against
to other abuses.
their accounts; usually they are given several
days in which to remit for them. Receiving
Yours, respectfully,
immediate credit themselves for foreign items,
WM. MCC. MARTIN,
they in turn do likewise for their depositors,
Chairman Federal Reserve Agents'
although a collection charge is sometimes
Clearing Committee.
made. In this way the circulation of checks
outside the place of origin is encouraged and is
ST. LOUIS, MO., October IS, 1915.
constantly increasing. The desire to convert
SIRS : As requested, the committee on clearings of the Federal Reserve Agents has had such checks promptly into reserves has created
two meetings and respectfully presents the the present transit and reserve problem.
following report:
SITUATION WHEN RESERVES WELL NO LONGER
The extension of the present collection faciliPAY FOR COLLECTIONS.
ties of Federal Reserve Banks is more of a
The Federal Reserve Act gradually requires
reserve than a transit problem. In its transit
aspects it opens a privilege to member banks, the reserves to be transferred from present rebut in its reserve aspects the collection of their serve agents to the reserve banks. With this
(Presented to Federal Reserve Board Oct. 18.)




370

FEDERAL RESERVE BULLETIN,

transfer the tangle of reciprocal collection arrangements which the competition of half a century has developed will be unraveled and ended.
Country and reserve city banks will, therefore,
be brought face to face for the first time with
the problem of collecting their foreign items.
Reserves with reserve agents will no longer
provide and pay for their service. Clearly the
service can not be had for nothing; some one
must pay the cost. Checks now count as
reserves and the reserves carry the cost, but
when the reserves have been completely transferred this will not be so. The cost will fall
primarily on the bank which receives the foreign item on deposit. If the bank is unwilling
to bear the cost, it must obviously impose it
upon the person depositing the foreign item
by either exacting a charge, deducting interest,
or compelling a larger balance to be kept.
Now that the cost of collecting foreign items
is to bo shifted from the reserve agent to the
bank of original deposit, the latter must do
just what the former has done—analyze its
accounts and requiro those who deposit foreign
items to keep compensating balances.
FEDERAL RESERVE BANKS MUST PROVIDE COLLECTION SYSTEM.

NOVEMBER 1, 1915.

The first step has been taken within each
district. The need for an extension of the
present system across district lines and to include state bank items and noncash items will
become more pressing as more and more
reserves are transferred and member banks'
ability to collect through reserve agents is
correspondingly curtailed. The approaching
transfer of reserves on November 16 suggests
the desirability of prompt action looking toward the establishment of a general system
for the collection of all items. Such a system
should be planned on lines of unquestioned
soundness, assuring the most direct collections,
and guarding as far as possible against inflation, manipulation of domestic exchange, and
the purchase of "float" by reserve banks.
Not only should existing unsound practices
developed, under competitive conditions be
eliminated, but a constant watch should be
kept for new elements of unsoundness to which
new conditions may open the door.
The practice now inaugurated, of figuring
the reserves of member banks from the books
of the reserve banks is sound and prevents
checks in the mail from counting as reserve
before they reach the reserve bank. I t is,
however, not thoroughly understood by the
member banks and as long as the Comptroller
figures reserve from their books it will be
difficult to change this long-established custom. Consequently, the 'reserve banks find
themselves now carrying a considerable amount
of float, although they have announced that it
is against their policy to do so. In the Federal
Reserve Bank of New York during August,
reserves of member banks of the collection
system outside of Now York City averaged
about one million dollars under the legal
requirements.

Clearly, if the Federal Reserve System
deprives member banks of their present collection facilities, it must provide a substitute;
not only must it do this as a matter of both
justice and law, but it should do it as a matter
of policy as well. For in a majority of the districts rediscounting has brought and probably
will bring but a few of the member banks into
active relations with their reserve banks. At
best the relationship through rediscounting is
occasional. But the daily depositing of checks
and drawing of drafts will foster a close and
normal relationship between the reserve bank EFFECT OF CALCULATING RESERVES FROM BOOKS
OF RESERVE BANKS,
and its members and will be constant evidence
both to them and to the public that the system
If all member banks joined the collection
is doing something for them; nor will the effect system and did business only with the reserve
of this be lost on the State banks.
bank, each country and reserve city bank




NOVEMBER 1,

1915.

FEDERAL BESERVE BULLETIN.

would be required to increase the reserves carried to an amount sufficient to offset the uncollected checks which are now constantly in
transit to its reserve agents and are counted by
it as reserves.
It is clear that the assumption of such a
float will entail a distinct hardship on the
country and reserve city banks. The hardship
will be felt by them not only because it will reduce their loanable fund and their earnings,
but because it will handicap them in competing
with State banks. It is probable that until
they have had time to adjust themselves and
educate their depositors to carry their float
the reserve banks will find it necessary to be
somewhat lenient and share such portion of the
burden as their resources will permit. It seems
clear, however, that the development of the
Federal Reserve collection systems will inevitably, by prompt collections, materially reduce the proportions of the present float.
SUGGESTED METHOD OF ELIMINATING CHECKS
FROM RESERVES.

Having for so many years been able to count
this float as reserve, it is probable that the
complete assumption of it by the member
banks can only be brought about by ruling of
the Comptroller or by the imposition of the
penalty for deficient reserves authorized by
the Federal Reserve Act. The latter method
would doubtless cause great dissatisfaction.
The former is, therefore, to be preferred, but, in
our opinion, it should not be attempted until
the Comptroller has secured an agreement with
all or nearly all State bank supervisors to make
a joint ruling, effective after reasonable notice.
At the same time, a study might profitably be
made of what should constitute "net deposits"
in calculating reserves, for adoption uniformly
by supervising authorities. It is our belief
that the excessive reserves now held by the
banks make the present an especially favorable
time to endeavor to effect this reform.




371

THE CHECK IS NOT LIKELT TO BE SUPERSEDED
BY THE BANK TRANSFER.

If remittances to distant points could be
made by means of bank transfer checks, the
problem of the "float" would be substantially
eliminated, but the individual check is an
instrument of such convenience and value to
the user, carrying, as it doe3, its receipt for
the payment, that it is not likely to be superseded; in fact, through the use of voucher and
other receipt forms of checks, receipting of
bills and invoices is being quite generally
abandoned.
EVENTUALLY THE DEPOSITOR MUST CARRY HIS
FLOAT.

While it is undoubtedly sound to charge a
depositor for paying his checks which he sends
out of town in preference to buying a bank
draft, yet member banks feel that this is an.
impracticable charge to impose. The practice
even has some advantages to the member
bank, for its reserve is not reached by its
depositor's check as promptly as by its own
draft. But for a depositor to draw against
foreign items deposited, before the bank has
collected or received credit for them, is obviously unsound. A bank may properly compensate itself for assuming the float which such a
depositor, by accepting foreign items in payment of bills, creates either by charging for
collecting such items or by requiring the
depositor to maintain an increased average
balance sufficient to carry them.
EXPLANATIONS WHICH SHOULD BE MADE.

* In developing the present systems and extending them across district lines, it is suggested that each reserve bank should make to
its member banks a frank statement of the
reserve requirements of the Act and of the
effect which the operation of the collection

372

FEDERAL RESERVE BULLETIN.

system will have upon their reserves. Also
that it should explain to the member banks the
desirability of analyzing the accounts at least
of those customers who deposit out-of-town
items and should offer its services to member
banks to assist them in inaugurating such
work. Also that the proposed development
and extension of the collection system should
be explained to the commercial, industrial,
and agricultural interests of the country
through appropriate organizations in order that
they may understand the service which the
Federal Reserve System is undertaking, largely
for their benefit, and be prepared to bear their
proper share of the burden.
RECOMMENDATIONS.

In view of the foregoing considerations, the
committee recommends:
1. That as soon as practicable, and under
arrangements which will make clear and restrict its use to the purposes for which it was
established, settlements through the gold settlement fund should be made daily.
2. That tho Federal Reserve Banks should
soon arrange to undertake the collection of
notes and drafts, and of items drawn on nonmember banks upon the most favorable terms
which can be arranged in the respective districts.
3. That the Comptroller should be asked to
endeavor to arrive at an agreement with all
state bank supervisors that on and after a
given date checks in the mail shall not bo
counted as reserve,
4. That through mutual agreements, each
Federal Reserve Bank should receive checks
drawn on members of the collection system of
every other Federal Reserve Bank, deferring




NOVEMBER 1,

1915.

credit for them a sufficient number of days to
allow them to reach the Federal Reserve Bank
of the district of origin, plus the number of
days, if any, allowed by such Federal Reserve
Bank to reach the paying bank; and further
5. That through mutual agreement, any
Federal Reserve Bank may receive for immediate credit checks drawn on members of the
collection system of any other Federal Reserve
Bank; and that whenever it is both practicable and more direct, member banks in such
collection systems may send direct to the Federal Reserve Bank of the district of origin instead of to their own Federal Reserve Bank,
6. That the development of inter-district
collecting need not await the completion of the
intra-district collection systems,
7. That in extending the collection system
both within and across district lines uniformity
need not prevail but instead there should be
freedom and flexibility of rules and requirements in order that each reservo bank may
best meet the conditions and needs of its member banks.
8. That each Federal Reserve Bank should
retain the right to change immediate credit
points to deferred credit points, to assess upon
members the cost of its collection service, to
make charges against its member banks for
using their balances to create exchange on
other districts, and generally to make such
rules and regulations as will enable it promptly
to safeguard its position and protect itself
against unsound developments.
Respectfully submitted.
WM. MCC. MARTIN,
FREDERIC H. CURTISS,
PIERRE JAT,

Committee.

NOVEMBER 1,

1915.

FEDERAL RESERVE BULLETIN.

373

1914, the largest volume with two exceptions
during the past 15 years.
Exports for September to the port of Boston, 1915, $7,177,360; 1914, §4,185,524. Imports for September to the port of Boston,
1915, $12,246,533; 1914, $11,426,000.
Receipts of the Boston post office for the
month of September, 1915, show an increase
DISTRICT NO. 1—BOSTON.
of $30,000 over the corresponding month last
There is considerable improvement in com- year, and in increase of $130,000 over August,
mercial activities throughout the district and 1915.
.
the reports coming from the different lines of
Net operating revenues of the New York,
trade are not only cheerful but decidedly New Haven & Hartford Railroad: August,
optimistic for the future. While it is difficult 1915, $2,095,039; August, 1914, $1,632,239.
to differentiate between the normal seasonal
Net operating revenues of the Boston &
demand and the unusual demand for European Maine Railroad: August, 1915, $1,270,930;
deliveries, or between the direct and indirect August, 1914, $921,607.
stimulus those orders have given to general
The demand for monoy is below normal, and
business, still the domestic demand is daily rates continue much tho same as during the
becoming more and more a factor.
previous month. There is a strong demand for
Money conditions, on the other hand, show good mercantile paper with but a limited
little if any improvement over the preceding amount in the hands of the brokers. Call
month, and while the financing of the Anglo- loans, 3 per cent, with a slightly better demand
French loan, which was freely subscribed for from tho brokers; time money, 3 J to 4 per cent;
in this district, was expected to strengthen town notes, 2.10 per cent for shorter maturities
money rates, as yet no apparent change has and 2.40 per cent to 2.50 per cent up to six
manifested itself. While the loans and dis- months; bankers' acceptances, 2 ^ to 2% per
counts reported by the Boston, banks show cent.
.
an increase over the preceding month, on the
Tho woolen mills are busy, and the worsted
other hand, there is shown a heavy increase in mills are doing a fair amount of business. The
the surplus reserves. The statistics for the reports of the wool trade show that the demand
month as compared with the previous month is a little better if anything than the previous
are as follows:
month, and prices are about the same.
Excess reserve of Boston banks:
The boot and shoe industry shows a marked
Oct. 16, 1915
§78,831,000 improvement over the previous month. OrSept. 18,1915
:
56,027,000
ders are said to bo coming in freely from tho
Due to banks:
South and West, and many of the larger conOct. 16,1915
141,529,000
Sept. 18, 1915
125,194,000 cerns are not only running full time, but are
Demand deposits:
having more trouble filling orders than getting
Oct. 16, 1915....
324,482,000 them. Tho wholesaler and tho retailer have
Sept. 18, 1915
282,551,000
been running with a low stock of goods on hand
Exchanges for the week ending—
Oct. 16, 1915
203,064,782 for some time, and the present demand has cre.
Sept.18, 1915
.- 144,404,908 ated a largo amount of orders to refurnish stock.
* Oct. 16, 1914
134,223,120 The reports from the shoe business would indiBuilding and engineering operations in cate that business in that trade is better than it
New England for the 10 months to October has been at any time during the past 18 months.
Tho cotton-mill situation is much the same.
13, 1915, 5138,808,000, as compared with
$134,219,000 in the corresponding period of The fine-goods mills in New Bedford are doing
GENERAL BUSINESS CONDITIONS.

General business and banking conditions are
described in reports made by Federal Reserve
Agents for the 12 Federal Reserve Districts.
Below are given in detail digests of conditions
in the various districts substantially as reported
by Federal Reserve Agents.




374

FEDERAL BESEKVE BULLETIN.

a good business, and those mills manufacturing
coarse goods are showing a steady improvement. Mills are buying cotton from "hand to
mouth," being loath to buy cotton at 13 cents
when they had bought that commodity a year
ago at 7 cents. Those mills who bought heavily of cotton last year at low prices are showing
good profits, as the price of goods is not only
firm but is steadily going up, and it is felt that
it will not be long before the goods will advance
so that even at the present price of the staple a
satisfactory profit will be shown.
The dye situation is still acute, and it is being
felt to a considerable extent by the print mills,
many of whom have been obliged to refuse orders and reduce their operations. Wood dyes
and other substitutes are being used, but the
operations of such mills have been considerably
curtailed. While there is still some disturbance
from labor, it is largely confined to industries
working on foreign orders.
The bond houses are reporting a good demand
for the higher grade of railroad bonds; in fact,
the demand is exceeding the supply, thus creating higher prices. Savings-bank deposits in
the district are increasing, and savings banks
are purchasers of high-class securities, many of
which are coming into this market showing evidence of former foreign ownership.
DISTRICT NO. 2—NEW YORK.

During September industrial activity increased, wholesale and retail trade expanded,
and collections improved. Reports almost
uniformly good have been received from many
sections of this district. A correspondent summarizes the general crop situation of New York
State as slightly below normal with prices in
general above average. The potato crop was
very poor, and in some places peaches were left
ungathered because of the low price.
The most important recent event affecting
American financial affairs was the formal agreement between the British and French Governments and a large American syndicate for the
$500,000,000 five-year 5 per cent loan, which
was underwritten at 96J, and is offered to the
public at 98, It is also announced that Ameri-




NOVEMBER 1,

1915.

can bankers are arranging to make a one-year
6 per cent loan of $25,000,000 to the Italian
Government, to provide, as in the case of the
Anglo-French loan, for purchases in this country and to stabilize exchange.
New York Clearing House banks on October
16 held deposits of $3,194,620,000, the largest
amount ever reported by the association, and
an increase of $1,269,266,000, or 65.9 per cent,
since November 14, 1914. The loans and
investments were §2,973,542,000, an increase
of 8840,372,000, or 39,4 per cent, since
November 14, 1914. Excess reserves were
$188,263,720, Compared with the statement
of August 28 last deposits have increased
$384,998,000, loans, etc., $318,168,000, and
excess reserves decreased $16,535,860.
Statistics for September, 1915, compared
with September, 1914, show the following:
Exchanges through the New York Clearing
House, $9,264,363,278, an increase of
$4,636,239,836. The Stock Exchange was
closed a year ago. New York City building
permits, 28, for structures to cost $20,739,850—•
no change in number, but increased $15,630,800
in amount. New York State failures, 204,
with liabilities of $2,543,609, a decrease of
25 in number and $9,231,300 in liabilities.
Exports of merchandise from the port of
New York, $163,608,127, an increase of
$101,712,521, and higher than any previous
month.
Record shipments of Canadian wheat are
going out through New York this fall. The
latest totals of exports from the port are
$1,120,386,269, against $670,836,494 for the
same period last year. Imports of merchandise at New York, $85,617,505, an increase of
$9,498,964. Imports, according to the latest
compilation, have reached a total of
$740,218,702, against $760,664,577 for the
same period last year. Including the
$25,000,000 in sovereigns which arrived October
19, imports of sovereigns and francs amounting
to $41,670,000 have been received at New
York since September 10.
In September, $81,661,500 par value of
bonds sold on the New York Stock Exchange,

NOVEMBER 1,

1915.

FEDERAL RESEBVE BULLETIN.

an increase of 38,600,000 over Augustj and
18,497,797 shares of stocks, a decrease of
1,936,440 from the preceding month. The
speculative character of much of the trading
has evoked some public comment.
The heavy movement of exports causes
continued weakness in foreign exchange. Sterling moved within a narrower range between
4.66J and 4.73 since it steadied after the
violent fluctuations of last month. Continental rates were also steadier. Quotations for
checks on October 21 were: Sterling, 4.66£;
francs, 5.90; marks, 82J; lire, 6.39.
DISTRICT NO. 3—PHILADELPHIA.
Improved business conditions are reported
from nearly all parts of the district. A hopeful
sign is the report of increased sales by department stores, retail clothing, dry goods, grocery,
and other concerns dealing directly with the
consumer. While domestic trade is still below
normal, for the first time this year we have
reports of a distinct betterment. Most industries and manufacturing plants are busy, and in
certain lines it is difficult to obtain merchandise,
deliveries being slow.
Labor is well employed, and from the point
of view of the laboring man conditions look
good for the fall and winter.
The textile industry, one of the most important in this district, which a few months ago
was the most depressed, now shows substantial
recovery. In this district this industry includes manufactures of all kinds of cotton,
woolen, and silk goods. It is estimated that
plants are now being operated at from'70 to
75 per cent of their capacity, as compared with
30 or 40 per cent some months ago. There is
much complaint that owing to the high cost of
raw materials manufacturers' profits are too
small. The scarcity of dyestuffs 5s a serious
detriment to this industry and is daily becoming more acute. Collections are reported good.
Railroad shops are now operating on almost
full time, being in a better condition than at
any period since 1913. Substantial increase in
the number of loaded freight cars being moved
is reported, and this movement of loaded cars




375

applies to both castbound and westbound
traffic. There are practically no good-order
ars which are idle.
Coal-mining operations continue to improve,
paper mills are busy, and glass industries are
reported to be in fair condition. Building
operations throughout the district are steadily
increasing, although the lumber trade is dull
and is still much below normal.
At the port of Philadelphia, imports, that for
a number of months have shown a steady
decline, are picking up because of importations
of iron and copper ores, nitrate of soda, and
sugar. Exports continue in large amount,
greatly exceeding the corresponding figures of
last year.
The general condition of crops is not as good
as last month, and prices are not up to the
average. Tobacco is of good quality, and good
prices are anticipated, as it is reported that all
the old tobacco has been distributed. The
cattle trade is slow—the usual purchasing of
live stock has been postponed because of the
recent prevalence of the hoof-and-mouth disease. Activity is looked for in the near future.
The exceedingly small amount of rediscounts
made by this bank for member banks is evidence that money is very plentiful in this district, and this is emphasized by the statements
of the Philadelphia Clearing House Association,
which show large increases in the excess reserves
of its banks. There is apparently no immediate prospect of any change in the low rates for
money prevailing here.
DISTRICT NO. 4—CLEVELAND.

Unprecedented conditions in the steel trade
continue to be the big factors in influencing
all business throughout this district. The report
of unfilled orders on the Steel Corporation
books for September, showing an increase of
409,153 tons, is an indication of the remarkable
situation in that industry. This means that
new business has kept up with the demands of
production—in fact, is exceeding it. One change
over last month's report is that much of the
demand now in the steel trade is domestic,
which has made contracting, even into next

376

FEDERAL BESEEVE BULLETIN.

year, quite active. : Prices of several items have
been advanced $1 per ton in finished lines, and
an uncertain advance in semifinished lines.
A barometer of industry and trade throughout
the country is the idle-car report for September, showing a decrease of 100,000 cars. The
enormous tonnage in this district, accounts for
a large part of this decrease.
Traction travel in the down-town districts of
the large cities is again on the increase. Suburban-train service demand: is also larger, but
this gain is moderate.
•••-. :
.
Building permits issued in the six large
cities of the district show §7,252,791 against
$4,531,000 for September, 1914. Post-office
receipts in five large cities reporting show an
average increase of 8 per cent over September,
1914. Retail business continues to improve,
due no doubt to the large distribution of cash
through increasing pay rolls at the mills.
Conditions in the lake trade are reflected in"
orders for two 12,000-ton steamers by the
Pittsburgh Steamship Co., and another order
for a similar-sized vessel by one independent
company.
The soft-coal business and coke industry are
much more satisfactory, and it. is nearly a
seller's markot for the first time in several
years.
,
Shoe manufacturers, shoe jobbers, wholesale
carpet and dry goods dealers, jobbers in millinery, etc., report good business—in some cases
as much as 25 to 30 per cent increase. Knitgoods and garment manufacturers report urgent
demand for their output, taxing their capacity
for early deliveries.
Correspondence from the southern portion
of the district is distinctly optimistic. The
greatest corn crop ever raised in Ohio and
Kentucky is now being marketed. Farmers
are inclined to hold their wheat for better
prices, and owing to woathor conditions it has
been more profitable to uso some small grain
crops for feeding purposes, which has resulted
in largo purchases of live stock to fatten.
Collections since the 1st of September have
been good, and while dealers seo no reason to




NOVEMBER 1,

1915,

anticipate any sudden termination of the conditions prevailing, they are nevertheless keeping
their accounts within bounds and insisting, on
customers keeping their affairs in good order,
avoiding a very strong temptation to spread
out and take on new burdens.
Money continues easy practically throughout
the whole district, with rates unchanged from
last month. There is a feeling, however, that
the lowest rates were reached during the quarter
ending September 30, and from this on there
will be slightly better demand for money at a
little improvement in rates.
DISTRICT NO, 5—RICHMOND.

After watching the slow and at times halting
development of business during several months,
it is now possible to report that this district is
experiencing much improvement.
While cotton is largely responsible, it can
fairly be said that the improvement is attributable to the fact that intelligent and very general
curtailment of acreage, while naturally having
a direct bearing upon the immediate price of the
staple, accomplished much both immediately
and it is hoped prospectively, in that the value
of diversification has been clearly demonstrated.
If the principle can be adhered to and the idea
further developed in the future, landowners in
the cotton States will soon insist; not only with
themselves but with, their tenants, that better
average results will be had in diversification
than in devoting their entire supply of energy
to the cultivation of a single crop. It, therefore,
is true that while the change in policy has
resulted in high prices for a comparatively
short crop of cotton, it also is the fact that the
acreage withdrawn from cotton has yielded
tobacco and grains of generous values, with the
result that the farmers will remember the
present year as one of plenty.
Cotton has been moving freely, permitting
generous liquidation. The movement is allowing local jobbers and merchants to replenish, with confidence, [stocks which have been
carried at low-water mark, thus materially
helping manufacturing lines. Many planters

NOVEMBER 1,

1915.

FEDEEAL EESERVE BULLETIN.

377

who have sold sufficient cotton to enable them | DISTRICT NO. 6—ATLANTA.
to pay outstanding debts are now apparently
Events of the past month have not only susdisposed to store and hold part of their crop for! tained but increased the confidence of the genprices which they hope to see even better than eral business public in the expanding activities
those prevailing at the moment* The liqui- of almost all lines. This is not confined to any
dation noted can be observed all along the particular section, but is the condition preline from a local bank or merchant to the more vailing generally throughout the Sixth Federal
or less distant bank, jobber, or manufacturer. Reserve District.
Tobacco has been of excellent quality and is
With the continued favorable development
selling at prices good for the growers.
of the cotton market, the farmer appears disVegetable and fruit packing, a large indus- posed to sell and meet his obligations, many of
try in this district, after a long period of stag- which were extensions from last year. This
nation reports conditions to be decidedly is being reflected through the wholesalers and
better than was the case two months ago.
jobbers by merchants paying off their obligaThere is noted a very much better tone to tions and the purchasing of increased stocks by
business and a very marked change for the a renewal of their credit to its former status.
better in the demand for goods, particularly The commercial travelers report a noteworthy
increase in their sales, and say that merchants'
from the cotton districts.
Lumber, always slow to recover from stag- sales are double in comparison with the same
nation, shows some real signs of improvement. time last year.
Retailers are quite generally feeling the ef- Tho entire district has grain for sale this
fect of changed conditions, while automobile year, with more cattle and hogs than any predealers, certainly in some sections, report more vious season. Cotton for the first time can be
business at the moment and prospectively classed as a somewhat " surplus-monoy crop."
than for several months, which fact, while in- The port communities were the most seridicating immediate comfort of mind, may also ously affected during the depression, but with
suggest that the resolution prompting econ- the movement of cotton, naval stores, and the
omy undertaken when in distress some months increase in lumber exports the conditions are
reported greatly improved in the past 30 days.
ago may have been forgotten.
Cotton milling is prosperous and mills are The continued improvement in the business of
running full time, taking cotton as offered lo- tho railroads is a reflection of the marked incally, though under no pressure either to buy or crease of business conditions in this district.
sell. Coal is in good position and its great ton- Bank clearings in Atlanta show an increase
nage is materially helping the railroads in car- of 42 per cent, New Orleans 33 per cent, Savaning for its territory.
nah 92 per cent, with substantial increases in
Labor seems to be fully employed and on a almost every large city in the district. Money
basis satisfactory to all interests. Public-serv- is plentiful, and with the crops moving actively
ice utilities, such as street railways, gas and the banks have not found it necessary to rediselectric concerns, report an enlarged use of count to any groat extent.
their facilities.
Banks, including most institutions located in DISTRICT NO. 7—CHICAGO.
The business situation in this district, as resections which are debtor more or less continuported by bankers in the large centers in Indiously, are in a very easy position, many of them
ana, Michigan, Wisconsin, Illinois, and Iowa,
reporting funds to spare.
can be summed up in the words of one of them
' From present indications, a very comfortable
and promising industrial situation with us at to the effect that "affairs are seemingly gradthe moment is apt to continue to be in evidence ually gaining in strength from day to day, trade
during the next three or four months at least. is giving some evidence of being on the increase




378

FEDEBAL BESERVE BULLETIN.

and a noticeable spirit of returning and increasing activity appears to be abroad."
While a few lines are operating at less than
normal activity, there is evidence of more generally restored confidence and more activity in
most lines. The weather conditions have been
favorable and this undoubtedly has had a good
influence in most branches of production and
distribution.
Increased demand has enlarged the iron and
steel outputs and there has been a further decrease in idle capacity and an enlargement in
the reeraployment of labor.
Inquiry discloses increasing business in
general merchandise, both retail and wholesale.
Capacity production in the automobile and
automobile accessory business, which is very
important in several cities in this district, continues in evidence. Improved conditions are
reported in the general manufacturing lines
and in both wholesale and retail trade at Chicago, Detroit, Indianapolis, Milwaukee, Des
Moines, and Peoria.
With all of this increased activity the banks
in the large centers show unusually large and
increasing deposits, with interest rates at a
low point. However, the banks in the smaller
communities throughout the district seem to
be well loaned up at their usual rates.
A considerable percentage of the corn crop
in this district is soft and will not grade up to
the market requirement. This will be fed to
stock, probably resulting in increased loans by
the country banks to farmers to carry live stock
for feeding purposes and will probably increase
the rediscount operations at this bank from
that source.
Another feature of the cereal situation is delayed wheat marketing. The result of this is
that elevators in Chicago are bare of new wheat
and the houses which handle this product are
heavy depositors, instead of large borrowers,
which latter condition is the ordinary situation
at this time of year.

NOVEMBER 1,

1915.

substantial gains during the past 30 days, and
there seems to be a somewhat marked feeling
of confidence among merchants. This is manifested by the adoption of a more liberal buying
policy, which is having its effect upon both
wholesalers and manufacturers. The number
of failures for the third quarter of this year
show an appreciable decrease as compared to
the two previous quarters both in number of
failures and total of liabilities.
Climatic conditions during September may
be said to have been favorable. The rainfall,
generally speaking, was below the normal for the
month, but this was counterbalanced by the
excessive precipitation in August. The temperature was somewhat above the normal, and
this seems to have aided the various crops.
The composite crop report of October 1 indicates that agricultural conditions in all the
States within this district are satisfactory, and
the harvest should be larger than either 1914
or the five-year average.
Cotton was the only crop which did not gain
in condition during the month, and this staple
shows a considerable loss as compared to previous reports. The price, however, has gone
up, and from appearances the farmer will receive an adequate return. Cotton and wheat
are both moving freely. The present reports
on the corn crop indicate an exceptional yield
in all of the States in this district. Illinois leads
with an estimated production of 372,400,000
bushels. Reports indicate that the yield of
oats, tobacco, potatoes, and other crops will
also be above the 1914 harvest and the five-year
average. The supply of small-fruit crops and
truck-farm products continues plentiful, but
the prices seem to have advanced somewhat
in the past 30 days.
Banking conditions show little change. The
demand for funds does not seem to be nearly as
arge as usual at this time of the year, and rates
are correspondingly low. Commercial paper
rates remain abnormally low, best names
quoted at 3f and 4 per cent, and little paper
DISTRICT NO. 8—ST. LOUIS.
available.
Business interests in this district show conThe improvement in general business conditinued improvement. The jobbing trade tions continues. There seem3 to be a feeling of
throughout the district appears to have made confidence among all classes of business men




NOVEMBER 1,

1915.

FEDERAL RESERVE BULLETIN.

and farmers in this section which would seem
to indicate further activity.
DISTRICT NO. 9—MINNEAPOLIS.

379

DISTRICT NO. 10—KANSAS CITY.

Financial conditions prevailing throughout
District No. 10 have not materially changed
since the date of our last report. While the
demand for money ha3 slightly increased, yet
in some sections of the district deposits are
increasing, and there seems to be an ample
amount of loanable funds in the hands of local
banks. The total deposits in Kansas State
banks and trust companies September 15 were
16 J millions more than a year ago, and loans
were 7 millions more. There are now on
deposit in Kansas banks, exclusive of national
banks, about 3130,000,000. Deposits show a
shrinkage of about 81,000,000 since June statements were published, which is largely attributed to the lateness of the wheat harvest and
the slow marketing of that crop.
Farmers are still inclined to hold their grain—
wheat, oats, and corn—on account of prevailing
prices, apparently believing that higher prices
will rule a little later. Killing frosts have not
yet visited the district, and Nebraska and
northern Kansas farmers still entertain the
hope of a bumper corn crop reaching full maturity. Cotton and cotton seed are bringing
the highest prices in many years. Receipts of
live stock, as well as prices, are below normal
for this season of the year. The horse and mule
market, while not as active as a few months
ago, is above the average.
j
The oil industry is very active on account of
the high prices prevailing. The milling industry is again becoming active, and lead and zinc
mining is experiencing an era of great prosperity. Building operations throughout the
district, and especially in the larger cities, are
very extensive, with the naturally resultant
great activity in the lumber and building
materials trade. Wholesalers, jobbers, and
retailers report active trade, with fair collections. Labor is generally employed throughout
the district.

Rainy and unsettled weather during the first
two-thirds of the month;had an adverse effect
on the marketing of grain at local points west
to the Rocky Mountains and greatly reduced
the expected arrivals at the Minneapolis and
Duluth terminals. Wheat receipts have not
more than kept pace with the milling and other
current demands. There has been difficulty in
securing a milling supply that is dry and hard,
as the arriving wheat in many cases showed
dampness. The Minneapolis mills have been
producing on an unusually active scale, and the
slow movement of the crop has been a handicap.
Wet roads and interruptions to thrashing have
been general in the wheat belt, with the result
that the movement of grain from the farm to
local elevators has been cut down materially.
Improved weather recently has brought a
sharp increase in arrivals of wheat. Unless
further rainy weather interferes, it is expected
that the crop will now begin to move and that
Minneapolis-Duluth receipts during the next
six weeks will be very heavy.
An unfortunate feature of the situation resulting from adverse weather is a material reduction in the amount of fall plowing that is
done or in progress. The period until cold
weather sets in is short. Many fields that
would ordinarily be plowed will not be touched
this year. The remaining good weather will
be largely utilized for thrashing rather than
plowing.
Collections are showing some improvement
as a result of the marketing of the crop and
will further improve as grain moves in larger
volume. Retail business is everywhere fair to
good, with an excellent outlook. Manufacturing lines show little or no change. Wholesale business is good, especially in the hardware
and grocery lines.
DISTRICT NO. 11—DALLAS.
The demand for money is not what it should
Conditions throughout the eleventh district
be, and banks generally are well fortified
against all requirements. Rates hold about as continue favorable. There is a general improvement in all lines of business and an optibefore, with little or no change.




380

FEDERAL RESERVE BULLETIN.

mistic feeling as to the fall months. At the
prices now prevailing for cotton and cottonseed products there is considerable movement, which has contributed to a general
liquidation.
Interior banks report reduction of their loans
and increasing deposits, with light demand for
accommodations,. and interest rates easier and
below normal.
Jobbing houses report a large increase in
shipments and retailers duplicating orders.
Collections show continued improvements, and
in some channels are fully normal or better.
In connection with the crop movement,
during the past month this bank has made
daily shipments to its members of currency
and silver averaging from $150,000 to $200,000.
The net reduction in the loans of this bank
for the first 15 days of October was $1,750,000,
all of this liquidation being the rediscounts of
member banks.
Live-stock interests throughout the district
report excellent conditions, with plentiful forage and feed crops, and good prices prevailing
for all classes of stock.
With the gathering and marketing of the
cotton crop there has been an increasing demand for all classes of labor.
DISTRICT NO. 12—SAN FRANCISCO.

Crops, which in this district are of great
variety, have xhis year been large. All have
not yielded equal profits, some possibly even
showing losses, but the final result will give
fair average return for labor and capital employed. The localization of certain products
in this territory is interesting. Ninety per
cent of. the lima beans of this country's commerce are grown near Ventura, Cal., because
they mature there with the pods lying on the
ground, while elsewhere poles are required to
support the vines. Eighty-five per cent of the
raisins produced in this country, amounting
to approximately 115,000 tons this year, are
grown within 50 miles of Fresno, Cal.
There is an absence of pessimism. This
seems logical, in view of the certainty of large
crops, coupled with present easy credit conditions. At least moderately good trade is an




NOVEMBER l,

1915.

inevitable result, and here and there volume
is exceeding that of the previous year.
Petroleum is one of the leading industries in
this district, with a present annual production
of approximately 100,000,000 barrels. This
general condition would seem to assure a most
favorable situation, but as a matter of fact this
industry has been greatly depressed during the
past few years and shows no present prospect
for betterment. The production, approximating 250,000 barrels per day, about balances
with current consumption, but approximately
60,000,000 barrels are in storage and there is a
considerable "shut-in" production; that is,
wells whose output would be immediately
available if desired.
Some financially strong and ably managed
corporations are operating with moderate
profit, but many are not operating. Effort is
making to consolidate more than 100 of the
smaller companies. If accomplished, the industry would be in the hands of several large
corporations whose financial strength would
give greater stability to the industry while
apparently assuring adequate competition.
Depression in lumbering continues. Mining
is exceptionally active and profitable. The
salmon-packing industry is in excellent condition. Trans-Pacific transportation has suffered
a tremendous loss in the withdrawal of the Pacific Mail steamers. Although there are reports
of a speedy increase in the number of ships of
the Japanese line, yet these will naturally seek
primarily the business of Japanese interests.
The interruption of Panama Canal traffic is
obviously a considerable loss to the Pacific
coast because of the higher rates by rail. The
railroads benefit accordingly.: However, the
congestion of transportation - earlier predicted
by many has not appeared.
Tabulation of the last published statements
of national banks shows large increases in deposits quite generally throughout this district.
It evidences conservatism that the increase in
"cash and exchange" has been approximately
equal to the increase of deposits, the loans having expanded very slightly. There seems to
exist an attitude of contented confidence, with
absence of speculative inclination.

NOVEMBER 1,

1915.

FEDERAL RESERVE BULLETIN.

381

DISTRIBUTION OF DISCOUNTS BY SIZES discounted showing an increase from 8.4 per
AND MATURITIES.
cent in August to 13.7 per cent in.September.

The total amount of commercial paper ex- The largest figures under this head are reported
clusive of bankers' acceptances discounted by for the Atlanta district, where a relatively
the Federal Reserve Banks during September large amount of cotton and sugar paper of
was 314,405,000, compared with 812,233,700 in large denominations appears to have been disAugust and S13,23S,200 in July. The Sep- counted at the special 3 per cent rate for comtember total was about $1,000,000 in excess of modity paper.
the June total, the largest monthly total pre- Small notes (in amounts up to $250) conviously reported. Largely increased discount stituted 22.8 per cent of the total number,
operations for the month are reported by the though only slightly above 2 per cent of the
Atlanta, Chicago, Kansas City, and Dallas total amount of discounts for the month. For
banks. Of the total bills discounted 5301,400 the three southern banks, which handled about
were trade acceptances and §846,000 commod- 80 per cent of the total number of small notes,
ity paper, discounted at special, lower rates. the corresponding proportions were 26.7 percent
About 80 per cent of the former class of paper of the total number and about 2.4 per cent of
and over 88 per cent of the latter class are re- the total amount of all paper discounted by
ported from the Atlanta district. The number them during the month.
The largest increase over the August figures
of notes discounted was 9,173, compared with
9,240 in August, 10,155 in July, and 10,734 in is shown for the amount of 60-day paper
June. Of the total number of notes 67.1 per discounted, the increases being especially
cent and of the total amount 65.4 per cent marked in the case of the Atlanta and Dallas
represented the share of the three southern banks, while the amount of 10-day paper disbanks, as against 73.5 and 68.2 percent reported counted is less than half the amount discounted
in August. The total of agricultural and
the month before.
The average size of all notes discounted live-stock paper with maturities in excess of 90
during the month was Sl,570, as against Sl,324 days handled by the banks, while larger than
in August, Sl,304 in July, and $1,249 in June. the month before, constitutes a smaller perThe September average ranges from $1,217 for centage of the total monthly discounts. Over
the Boston bank to S3,069 for the Philadelphia two-thirds of this class of paper was handled
bank. The average for the three southern by the Chicago, Dallas, and Atlanta banks.
The number of banks accommodated during
banks is about §1,529.
the month was 762, compared with 693 in
Of the total number of notes . discounted
about 33 per cent and of the total amount over August and 796 in July, and constitutes less
52 per cent were notes in amounts from 81,000 than 10 per cent of the total number of member
to $5,000, as against 29 and 54.4 per cent banks. Of the total banks accommodated 416,
shown in last month's distribution. A large or about 55 per cent, were in the three southern
increase is noted in the number and amount of districts, Dallas alone reporting 160 banks
notes of over $10,000 in size, the proportion of (out of a total of 648) which availed themselves
this class of notes to the total amount of notes of the discount privilege.




382

FEDEBAL BESERVE BULLETIN.

NOVEMBEE 1,

1915.

Commercial paper, exclusive ojbankers' acceptances, rediscounted by each of the Federal Reserve Banks during the month of
September, 1915, distributed by sizes.
NUMBER OF PIECES AND AMOUNTS,
[In thousands of dollars.]
To $100. Over $100 Over $250
to $250. to $500.

Over $500
to $1,000.

Over $1,000 Over $2,500 Over$5,000
to $5,000. to $10,000.
to $2,500.

Over
$10,000.

Per cent.

Total.

Ban*.

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

1.4 22 9.0 21
15.9 74
12 2.2
8.9 21
0.1
1.8
4.5
.4
19
1.8
20316.8 425 75.8 506 204.9 468
184 14.1 245 39.6 249 97.4 213
10 .7 37 7.5 77 32.5 142
.5 30 5.1 84 31.7 58
35 5.9
54 20.5 99
.1
58 4.6 192 33.8 212 78.4 195
L80.9 453
20315.7 385 64.4
26 4.3
33 11.9
.5

15
16.5
55
61.2
15.5 22
15.9 78
386.0 453
171.4 264
117.5 200
45.8 110
68.4 89
144.5 192
336.8 433
24,0 44

75
211
110
190
226.52,459
853.81,505
42.1 569
10.2 364
328
311.1 968
341.7 2,196
121.8 198
72.0

91.3
286.2
337.6
481.3
3,537.4
3,193,4
953.1
612.0
448.4
1,337.8
2,686.5
440.0

0.8 0.6
2.3 2.0
1.2 2.3
2.1 3.3
26.8 24.6
16.4 22.2
6,2 6.6
4.0 4.3
3.6 3.1
10,5 9.3
23.9 18.6
2.2 3.1

359 2,520,8 112 1,979.2 9,173 14,405.0 100. O 100.0
J

679 53.51,41124141,780 696.51,80111,403.51,955:3,307.01,076 4,

Total.

5,4
26.3
95.5
168.5
613.5
628,4
138.2
120.8
133,2
. 126.6
344.4
120.0

33.7
25.3
95.9
84.7
98.2
45.8
143.6
141.6
799.6 3061,214.3
—
475.2 223 913.5
334.2 79 280.4
175.1 56 222.8
138.6 26 81.7
320.7
82 318.1
695.2 189 707.4
71.0 22 86.5

PERCENTAGES OF AMOUNTS OF EACH CLASS TO TOTAL.

52
4 A
5.9
ft 7
?,.7

15.3
10.8
12.5
5.5

1.7

4.8

9.7

23.0

R
5
4

01

St Louis
Minneapolis
Kansas City
Dallas
San Francisco

....

g

?1
1 2

5
4
1
1

g
g

.3
6
.1

Total

99
5 5
?6
1 1
3.4

18.1
21.4
46

3 3
10.9
5.4

12.3
7.5

5.9
36 9
9.2
33.5
28.3
29.1
35.0
30.9
^ 17.4
34.3
19.7
28.6
14.5
29.4
36.4
19.7
29.7
18.2
9.5 . . . .
23.8 . . . .
12.8
26.4
27,3
19.6

29.2 . . . .

1 3
2.5
?4
^ o

27 7
29.6 *
13.6
29.4
22.6
14.9
35.1
28.6
30.9
24.0 . . . . .
25.9
16.1

1 5

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta

17.5 . . . .

23.2
12.7
27.7

100 0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

13.7

100.0

21.3
6.4

26.7
4.4
1.7

*

Commercial paper rediscounted during September by each of the Federal Reserve Banksf distributed by States and maturities
as of date of rediscount,
[In thousands of dollars.]

Number
of member
banks.

Districts and States.

District No. 1—Boston:
Connecticut
Maine
Massachusetts
New Hampshire
Rhode Island
Vermont

73
70
170
56
18
48

New Jersey

Total




Total commercial
paper rediscounted.

4

4.9

29.2

1.5

35.6

3

4.0

10.2

14.2
41.5

....

..

,

2

9.9

18.1

9.0

4.5

9

9.9

18.1

17.9

43.9

1.5

91.3

2
11

5.1

9.2
12.1

3.8
39.1

5.0
210,8

1.1

18,0
26a 2

612

Total

Total

Paper
maturing
after 90
days.

131
481

District No. 3-Philadelphia:

District No. 4—Cleveland:
Kentucky
Ohio.:
Pennsylvania
West Virginia

Paper
maturing
after 60
days but
within
90 days.

Paper
maturing
within
10 days.

435

Total
District No. 2—New York:
New Jersey
New York

P e n n s y l v a n i a . . . . ---..

Papor
maturing
after 10
days but
within
30 days.

Paper
maturing
after 30
days but
within
60 days.

Number
of banks
accommodated.

13

5.1

21.3

42.9

215.8

1.1

286.2

24
70
533

2
12

3.9
209.6

10.8
• 14.4

5.2
23.3

21.8
315.8

627

14

1.9
68.5
70.4

213.5

25.2

28.5

337.6

72
376
301
14

4
5
10

8.4
1.6

1.8
92.8
15.7

22.8
90.1
154.7

12.5
14.5
18.3

48.1

37.1
253.9
190,3

763

19
= = = = =

10.0

110.3

267.6

45.3

48.1

481.3

NOVEMBER 1, 1015.

FEDERAL RESERVE BULLETIN".

383

Commercial paper reuiscounted during September by each of pie Federal Reserve Banks, distributed by States and maturities
as of date of rediscount—Continued.
[In thousands of dollars.]

Districts and States.

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

Number
of member
banks.

15.6
127

16.5

Paper
maturing
after 30
days but
within
60 days.

Paper
maturing
after 60
days but
within
90 days.

83.4
1.9
117.3
86.9
102.9
11.7

16.2
26.8
507.8
707.5
557.8
32.1

84.7
54.3
514.3
232.7
244.2
38.2

404.1

1,848.2

1,218.4

50.2

3,537.4

304.3
1H.6
395.5
302.3
100.0
179.5

488.6
30S.O
2S8.3
25.0
145.0
163-7

74.3
35.3
76.0
6.4

8SS.1
488.9
811.7
352.3
270.3
382.1

186.6

Paper
maturing
wlhin
lOiiays.

Taper
maturing
after 10
days but
within
30 days.

20.9
31.0
51.9
25.0
25.3
32.5

14
98
80
72
137
105
506

Total

Number
of banks
accommodated.

1,306.2

1,418.6

102,0

3,193.4

73.2
30.0
229.5
4.6
22.0

35.3
57.0
192.5

214.3
107.0
575.2
12.9
43.7

284.8

953.1

Paper
maturing
after 90
days.

3.0
32.9
13*. 9

Total commercial
paper redlscounted.

184.3
86.0
1,173.2
1,077.5
934.4
82.0

District No. 6—Atlanta: *
Alabama
Florida
Georgia
Ivouisiana
Mississippi
Tennessee
Total.-*-

385

District N o . 7—Chicago:
Illinois
Indiana
Iowa
Michigan
Wisconsin

316
197
348
75
51

11.0
3.5
16.9
1.0

94.8
16.5
136.3
8.3
20.7

987

32.4

276.6

359.3

3.0

33.6
2.9

46.7
54.6

.8
1.5

17.3
9.9

67.3
19.0
3.0
18.6
7.7
31.6
137.4

21.3
24.2
37.4
41.2

1.2
14.0

5.3

71.7

284.6

225.4

25.0

612.0

4.0
1.2
9.8
1.5
34.4

82.8
10.2
14.6
16.1
29.8

51.6
19.7
43.2
9.1
36.5

4.6
16.0

201.7
31.1
72.2
42.7
100.7

50.9

153.5

171.8

72.2

448.4

1.9
224.7
14.4
100.5

14.0
85.9
16.7
92.6

5.5
33.1
3.2
25.5

21.4
548.4
71.5
236.0

Total

'

District N o . 8—St. Louis:
Arkansas
Illinois
Indiana
Kentucky
Mississippi
Missouri
Tennessee
Total
District N o . 9—Minneapolis:
Michigan
...m.
Minnesota
Montana
North Dakota
*
South Dakota
Wisconsin
Total
District No. 10—Kansas City:
Colorado
Kansas
Missouri
Nebraska.
New Mexico
Oklahoma
Wyoming
Total
District No. 11—Dallas:
Arizona
Louisiana
N e w Mexico
Oklahoma
Texas
Total
District No. 12—San Francisco:
Alaska
Arizona.
California
Idaho
•
Nevada
Oregon
Utah
•
Washington
Total




95
55
115
5
18
97
129

156
61
68
17
80
20
462

8.0

53

31
279
64
152
115
87
728
120
217
53
210
9
308
33

43

150.6
8C3
3.0
47.9
33.1
10U 1
10U. 0

"i.*6

200.5
37.2
15.8

43

8.7

39.9

202.9

159.3

49.7

460.5

950

89

14.5

13.4

544.4

368.5

117.0

1,337.8

27
42
545

9
4
18
129

85.6
2.5
27.5
108.4

124.0
23.8
94.4
986.4

144.0
10.7
61.2
765.1

3.2
11.3
32.0
206.4

356.8
48.3
215.1
2,066.3

648

160

224.0

1,228.6

981.0

252.9

2,686.5

25.5
6.1

6.3
69.3
7.8

124.2
6.4

35.9
7.9

6.3
254.9
28.2

4.2

1
265
57
10
86
23
78

18.1

2.2

91.8

112.1

*22*2

*8*7

"7*6

"*38."5

527

71.9

94.3

230.0

H Includes New Orleans branch.

43.8

440.0

384

FEDERAL RESERVE BULLETIN.

NOTBMBEH 1, 1915.

Commercial paper rediscounted during September by each of the Federal Reserve Banks, distributed by States and maturities
as of date of r rediscount—Continued.
RECAPITULATION.
fin thousands of dollars.]

Districts and cities.

Number
Number
of banks
of member accommobanks.
dated.

No. 1—Boston
No, 2—New York
Vo g phlladplnhia
XOm 4—Cleveland
Vo 6 Atlanta
No 7—Chlcaeo
No, 8—St. Louis
fjn Q

...

Mfnneanolis

No 10—Kansas City
No 11 T) all as
No. 12—San Francisco
Total for September
Per cent for September
Percent for July
Per rent for Mav
Percent for ApriL

435
612
G27
763
506
3S5
987
462
72S
950
648
527

7,630

9
13
14
19
127
129
65
53
43
89
160
41

Paper
maturing
within 10
days.

Paper
maturing
after 10
days but
within 30
days.

Paper
maturing
after 30
davs but
within C
O
days.

Paper
maturing
after C
O
days but
within 90
days.

18.1
21.3
213.5
110.3
404.1
186.6
32.4
71.7
50.9
293.4
224.0
71.9

17.9
42.9
25.2
267.6
1,848.2
1,396.2
276.6
284.6
153.5
544.4
1,228.6
94.3

43.9
215.8
28.5
45.3
1,218.4
1,418.6
359.3
225.4
171,8
368.5
981.0
230.0

9.9
5.1

70.4
10.0
16.5
5.3
14.5

Paper
maturing
after 90
days.

Total
commercial
paper ro- Per cent.
discounted.

48.1
50.2.
192.0
284.8
25.0
72.2
117.0
252.9
43.8

91.3
286.2
337.6
481.3
3,537.4
3,193.4
953.1
612.0
448.4
1,337.8
2,686.5
440,0

(4.3
13.1
fg.3
18.6
}3.1
100.0

1.5
1.1

762

131.7

1,698.2

6,180.0

5,300.5

1,083.6

14,405.0

10.0
9.1
10.5
10.3

.9
2.6

11.8
11.3
12.2

42.9
40.8
34.1
29.1
31.4
33.9

36.8
3G.9
40.0
38.7
35.6
39.2

7,6
8.4
12.9
18.7
19.6
15.3

0.6
2.0

23
f3.3
24.6
22.2
6.6

100.0
100.0
100.0
100.0
100.0
100.0

.8
13 ,5
13 .4
11 . 0

9.4
8.1

Amount of commercial paper held by each of the Federal Reserve Banks on Friday, OcL 1, 1915, distributed by maturities.
(In thousands of dollars,]

Federal Reserve Bank.

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




Paper
maturing
within 10
days.

29.3
68.1
145.9
142.0
1,323.0

636.0
94.5
159.4
124.2
284.1
863.5
298, G
4,168.6

13.9

Paper
maturing
after 10
davs but
within 30
days.

Papflr
maturing
after 30
dava but
within 60
days.

Paper
maturing
after 60
days but
within 90
days.

26.7
117.2
34.9
328.8
2,318.4
1,516.4
275.1
374.5
287.2
771.0
1,721.3
219.1

70.1
235.5
72.4
104.9
3,135.2
2,409.2
457.9
587.9
626.6
670.2
2,789.2
359.3

31.3
38.7
16.9
39.1
925.7
1,098.2
407.1
249.2
363.0
330.8
1,110.1
265.2

8,020.6
26.7

11,518.4
38.4

4,875.3
16.2

Paper
maturing
after 90
days.

48.8
16.3
230.1
341.5
50.6
161.4
109.5
441.0
51.8
1,451.0
4.8

Total.

157,4
459.5
270.1
663.6
7,748.6
5,8S9.9
1,576.1
1,421.6
1,562.4
2,165.6
6,925.1
1,194.0
30,033.9
100.0

Per cent.

0.5
1.5
9
2.2

25.8
19.6
5.3
4.7
5.2
7.2

23.1
4.0

100.0

385

FEDERAL: RESERVE BULLETIN.

NOVEMBEE l f 1 9 1 5 .

ACCEPTANCES.
1

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

Date.

September 27
October 4 . .
October 11
October 18

1915.

Trust
companies.

7,281
9,000
8,957
9,015

.....

Private
banks.

State
bonks.

5,314
4,808
5,118
4,802

74
132
116
116

Total.

408
343
134
199

13,077
14,373
14,325
14,132

Acceptances indorsed by member banks: Private bank acceptances, 12,000.
Distribution of bankers' acceptances held by Federal Reserve Banks, according to schedules on hand Oct. 18,1915, by classes
of acceptors and sizes.
Over $5,000
to $10,000.

To $5,000.

Over 510,000

to 825,000.

Over $25,000
to $50,000.

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

Total.
Per
cent.

Class of acceptors.

I
a
Member banks....
Trust companies.
State banks
Private banks
Total..

5581,440 154 51,265,118 179 53,079,292
"'
249,091 60
446,469 64 1,223,916
48,750
67500
67,500
24,841
114,859
59,364
301

57S2 ]
2,329,559
705,861
18

$979,085
946,178

904,122 222 1,770,951 25' 4,490,567

3,035,420

26 1,925,263

S7S0,OO0 60S $9,014,494
1,225,789 245 4,802,304
116,250
199,0M

Percent

6.4

?14,132.112

100.0

11 2,005,789

1.4

13.6J...

21.5

31 8

12.5

63.8

Amounts of acceptances held by the several Federal Reserve Banks at close of business on Fridays, Sept. 24 to Oct. 22,1915.
[In thousands of dollars.]
Boston.
Acceptances maturing within 10
days:
gept 24
Oct 1
Oct 8
Oct 15
Oct 22
Acceptances maturing after 10 days
but within 30 days:
gept 24
Oct 1
Oct 8
Oct 15
...
Oct 22
••
Acceptances maturing after 30 days
but within 60 days:
Sept 24
Oct 1
Oct. 8
Oct 15
Oct 22
Acceptances maturing after 60 days
but within 3 months:
Sept 24
•
*•••
Oct. 1
Oct. 8
Oct. 15
Oct. 22
Total acceptances held:
Sept 24
*•••
OcVl
Oct.8
Oct. 15
Oct. 22




New Phila- Cleve- RichYork. delphia. land. mond.

Atlanta.

Chicago.

San
Total
Dallas. Franfor
cisco. system.

St. MinneLouis. apolis.

Kansas
City.

46
21
SO
68

1,325
1 595
'994
3,208
1,536

639
527
312
1,259
764

451
281
50
219
25

25
70
20
192
30

25
160
126
301
100

25
94
86
192
52

45
73
90
83

7

45
93
101
114
59

954
1.170
1 355
1.055
965

1.523
1,649
1.777
1,242
736

280
246
221
88
178

237
208
337
92
115

436
401
335
283
610

236
193
157
113
87

116
96
32
81
93

128
114
80
237
212

146
168
172
202
195

4,050
4,245
4 466
3,393
3,091

785
1 241
1,294
1 424
1,322

1.488
1,265
1,517
1,282
1,378

160
259
349
459
606

145
129
132
209
157

100

610
617
832
730
452

140
122
150
94
94

96
96
138
79
62

271
237
250
82
82

363
307
336
257
196

4,058
4 273
4998
4 616
4,449

626
1,433
1,201
<27
672

1,269
1,443
1,522

863
899
821

107
164
93

100
100
100

350
374
269

59
52
65

51
51
62

1,909

635

178

93
133
111
inn
171

3,619
4,733
4,346
4,259

2,435
4,095
4,038
3,969
3,390

4,919
4,884
5,128
4,991
4,787

1,759
1,685
1,441
1,454
1,444

514
571
582
587
480

13,058
14,846
14,804

70
251
188
763
431

ACfl

393
100
100
100
100
100

1,421
1,552
1,662
1,527

i;455

494
542
504
504
404

101

87

96
84
102
ins
113

316
317
325

495
495
493

605
605
631

263

440

572

Ad

ii

1 A iy?ft

13,335

386

FEDERAL BESERVE BULLETIN,

JNOYBMBBB 1, 1 9 1 5 ,

Amounts of acceptances purchased by each of the Federal Reserve Banks from Feb. 19 (date of first purchase) to June SO, and
for the months of July, August, and September, 1915, distributed by maturities.
[In thousands of dollars.]
Boston.
Acceptances maturing within 30
days:
Feb. 19 to June 30
July
August
September
,

TotaL
Acceptances maturing after 60 days
but within 3 months:
Feb. 19 to June 30
July
'.
August...
,
September
,

Chicago.

Minne- KanSt.
sas
Louis. apolis. City.

San
Dallas. Francisco.

61

141

103

109
43
42

642

194

101

141

103

39

235
17
17

1,543
276
269
38

237
121

33
18
136

310
71
35
23

226
24
18

119
13

269

2,126

726

785

304

149

117

1,876
521
140
994

732
265
115
107

162
276
87
84

178
87
61

190
202
51

713

Total.
Acceptances maturing after 30 days
but within 60 days:
Feb. 19 to June 30
July
,
August
September
,

AtNew Phila- Cleve- RichYork. delphia. land. mond. lanta.

2,899
1 046
931
756

8,145
1,977
1 443
1,557

1,524
426
593
343

TotaL

1,032
43
314

61

4;093
698
512
310

17

5,613

1,112
120
347

17,481
4,999
3,945
4,039

1,077

1,675

30,464

5,632

13,122

3,531

1,219

Total accei
Feb. 19 to June 207.
July
August
,
September
,

3,134
1,063
987
756

10,227
2,253
1,815
1,595

2,353
801
303
994

1,394
298
170
243

1,975
497
628
366

455
300
141
120

526
191
116
68

736
194
247

1,806
143
364
121

22,606
5,740
4,771
4,349

Grand total.

5,940

15,890

4,451

2,105

3,466

1,016

901

1,263

2,434

37,466

Total.




NOVEMBER 1, 1915.

387

FEDERAL KESEBVE BULLETIN.

FEDERAL RESERVE BANK STATEMENTS.
Resources and liabilities of each of the Federal Reserve Banks and of the Federal Reserve System at close of business on Fridays,
Oct. 1 to Oct. 22, 1915.
RESOURCES.
[In thousands of dollars.]

Boston.
Gold coin and certificates
in vault:
octi
...:
Oct. 8
Oct. 15
Oct. 22
Gold settlement fund:
Oct. 1
Oct. 8
'
Oct. 15
Oct.22
Gold redemption fund:
Oct. 1 . . .
Oct. 8
Oct. 15
Oct.22
Legal tender notes, silver,
etc.:
Oct.l
Oct.8
. Oct. 15
Oct.22
Total reserve:
.
Oct.l
Oct.8
Oct. 15
Oct.22
Commercial paper:
Oct. 1.
Oct.8
Oct. 15
Oct.22
Bankers' acceptances:
Octl
Oct.8
Oct. 15
Oct.22
-.
United States bonds:
Oct.l
Oct.8
Oct. 15

San
AtRichSt.
Minne- Kansas
mond. lanta. Chicago. Louis. apolis. City. Dallas. Francisco.

Philadelphia.

Cleveland.

7,584
11,428
9,191

11,883
11,377
11,269
11,015

5,fi94
5,917
5,958

6,059
6,074
6,076
5,835

26,638
26,727
29|461
29,445

4,139
2,8U
2,376
3,925

3.3S3
2,SS4
2,227

4,260
3,850
3,701
4,597

6,645
6,517
7,219
B,104

1,699
2,548
1,563
2,736

13,040
14,111
12,271
10,863

3,72S
5,032

375
375
375
375

225
225
225
225

1J463

3,997
3,997
3,999

6,262
5,865
5,766
5,391

227,274
227,769
226,956
227,005

3,151
3,733
4,243
5,125

2,721
2,711
2,363
2,743

5,236
5,789
5,864
6,062

2,453
2,851
3,442
3.6S3

55,180
55,850
58,620
54,670

77
87
87
87

341
341
341
341

21
21
21
21

1,202
1J212
1,212
l!2l2

8
7

432
430
271
266

331
421
414
307

8,179
8,072
8,607
8,161

6,568
6,753
6,508
6,625

7,802
7,63S
.7,129
7,212

1,576
1,667
1,833
2,025

1,422
1 441
1,499
1,476

1,562
1,590
1,568
1,611

2,166
2,339
2,464
2,6-19

1,552
1,562
1,527
1 455

542
504
504
404

317
325
297

887
887
907
932

3,986
4 006
4,031

242
242
952
952

133,071
133,952
129,903
132,752

2,146
3,257
2,312
2,620

5,032
1954
6,274
3,731

3,947
3,339
2,339

6
6
6
6

55
55
55
55

37
37
37
37

164
47
1
412

10,107
15,363
13,360
28,495

2,625
2,490
2,617
2,740

991
1,001
1,005
1,003

87
90
86
84

123
14S
156
153

1,345
1,097
1,656
977

277
194
167
147

16,502
18,027
16,400
16,977

148,265
151,329
149,592
165,036

15,315
14,962
17,421
14,307

17,134
16,228
15,975
16,615

13,001
12,899
13,fi38
12,532

8,106
8,995
8,020
8,949

41,023
41 935
43,3SS
41,290

157
154
149
159

459
417

270
•218

664
5S6
534
607

7,749
7,573
7,13S
6,995

5,S90
6,587
6,273
6,475

4,095
4,03S
3,969
3,390

4,884
5,128
4,991
4,787

1,685
1 441
1,454
1,444

571
582
587
480

100
100
100
100

340
344
491
491

491
491
491
491

Oct.22

4,054
35
35
3.5
35

16,493
21,302
19,748
34,626

9,511
10,551
10,616
10,709

8,743
8,744
9,236
9,100

300,149
306,133
306,536
317,513

6,925
6,672
6,242
6,320

1,194
1,202
1,031
1,013

30,034
30,561
29,403
29,937

495
493
480
440

605
631
647
572

14,846
14,804
14,556
13,335

1,027
1,032
1,032
1,082

1,356
1,501
1,501
1,501

1,000
1,000
1,000
1,000

9,329
9,483
10,380
10,480

831
821
816
809

1,624
1,637
1 457
1,379

27,381
27,029
26,583
25,381

1,904
1,658
1,930
1,898

15,378
15,523
15 236
15,650

9,355
9,231
9,113
8,513

3,069
3,017
2,978

3,704
3,691
3,721
3,663

2,985
2,970
2,970
2,940

1,143
1,153
1,153
1,140

795
770
770
793

349
329
378

8,923
9,089
8,872
9,781

5S4
307
621
547

272
320
193
154

2,161
2,170
2,174
2,176

633
1,072
199

527
558
913
746

4,093
2,539
142
3,400

745
1,236
1,035

214
1,270

4,575
2,336
1,231
2| 483

1,559
1,628
1,316
2,344

585
493
661
' 526

178
120
125
120

266
208
64

193
224
362
220

176
152
122
134

206
212
310
184

24,003
23,159
23T2S3
23,606

21,909
21,747
21,747
21,184

14,853
16,099
14,874
16,913

58,034
56.778
57,251
56,534

13,931
14,324
14,540
146fil

1,171
512
533
507

1,318

401
418
523

391
392

979
692
458
753

26.839
27,707
25,895
25,674

172,282
175,576
174,669
188,948

26,335
23,635
23,845
24,051

•

793
967
807
1,488

%

753
527

1,924
1,087
796
1,563

1,182
1,603
1,153
1,600

Ul,194
17,723
110,160
»12,342

64
64
63
67

481
467
503
494

121
123
117
121

82
79
85
85

3,326
3,124
3,018
3,163

11,445
11,5S5
11,812
11,713

13,278
13,259
13,646
13,632

18,481
18,433
17,771
18,713

16,334
16,559
16,539
16,647

411,637
414,3S0
415,572
427,SSO

147

1 Items In transit, i. e.f total amounts due from, less total amounts duejto, other Federal reserve banks.




.

7
7
7
5

3,865
3,735
3,600
3,219

Oct.22

Total
tor
system.

4,572
4,410
4,408
4,111

14,186
14,717
14,OS7
13,909

Municipal warrants:
Oct.l
Oct.8
Oct. 15
Oct.22
Federal reserve notes,
net assets;
Oct.l
Oct.8
Oct. 15
Due from other Federal
reserve banks, net:
Oct.l
Oct.8
Oct. 15
Oct.22
All other resources:
Oct.l...
Oct.8
-..
Oct. 15
Oct.22
Total resources:
Oct.l
Oct.8
Oct.15
Oct.22

New
York.

388

FEDERAL RESERVE BULLETIN.

NOVEMBER I , 1915,

Resources and liabilities of each of the Federal Reserve Banks and of the Federal Reserve System at close of business on Fridays,
Oct. 1 to Oct. 22,1915—Continued.
LIABILITIES.
[In thousands of dollars.]

New
York.

Philadelphia.

Cleveland.

Richmond.

Atlanta.

Chicago.

5,267
5,267
5,267
5,266

5,944
5,944
5,944
5,945

3,358
3,358
3,349
3,349

2,417
2,418
2,418
2,413

6,632
6,633
6,633
6,634

5,000
5,000
5,000
5,000
7,378
7,430
7,529
7,591

5,394
5,515
4,647
5,671
1,97S
3,097
2,738
3,702

Capital paid in:

Oct.!

* ; Oct.8
*" Oct. 15
W* Oct.22
Government deposits:
Oct 1
Oct.8
Oct. 15
Reserve deposits, net:
Oct l
Oct 8
Oct 15
Oct.22
Federal reserve notes,
net liability:
Oct. 1
Oct.8
Oct 15
.
....
Oct.22
Due to other Federal roserve banks, net:
Oct 1
Oct.8
Oct. 15
Oct 22
All other liabilities:
Oct 1
Oct.8
Oct. 15
Oct.22
Total liabilities:
Oct 1
Oct.8
Oct. 15
Oct °°

5,134
5,181
5,181
5,181

21,705
22;520
20,714
20,493

10,957
10,987
10,987
11,047

152,737
157,806
161,355
170,920

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

San
Francisco,

2,764
2,765
2,765
2,767

3,931
3,932
3.933
3i 933

5,000
5,000
5,000
5.000

6,037
5,820
5.727
5,09S

Boston.

21,008
18,368
18,578
18,785

18,064
17,215
17,339
17,661

2,782
2,782
2,782
2,783

2,489
2,491
2,491
2,491

5,000
5,000

11,149
11,542
11,758
11,841

37

5,484
5 519
4,927
6,208
5,233
5,149
5,079
4,743

12,403
12,627
12,606
12,714

324,884
326,787
328,766
340,444
14,359
15,225
14,791
14,809

77

136
139
142
146

2 466
2,379
2,327
2,575
172,2S2
175,676
174,609
188,943

9,144
9,000
9,374
9,438
1,111
1,159
1,247
1,169

8,956
9,094
9,321
9,222

54,728
54,781
54,775
54,834
15,000
15,000
15,000
15,000

5,000
51,402
50.145
5o;ei8
49,900

6,092
4,404

26,839
27,707
25,895
25,674

3,023
3.023
3iO25
3,025

Total
for
system.

20,335
23,635
23,845
24,051

24,003
23,159
23.2S3
23,COS

64
69
71
72

21,909
21,747
21,747
21,1S4

14,853
16,099
14,874
lfi.iUS

2,666
2,587
2,540
2,793
58,034
56,778
57,251
56,534

13,931
14,324
14,540
14.001

11,445
11,585
11,812
11,713

13,278
13,259
13,646
13,632

18,481
18,433
17,771
IS. 718

16,334
16,559
16,539
10,647

411,637
414,380
415,872
427,880

Circulation of Federal reserve notes at close of business on Fridays, Oct. 1 to Oct. 22, 1915.
|In thousands of dollars.]

Boston.

Federal reserve notes issued to the bank:
Oct.l
Oct.8
Oct. 15
Oct, 22
Federal reserve notes in
the hands of the bank:
Oct.l
Oct.8
Oct. 15
Oct.22
Federal reserve notes in
circulation:
Oct.l
Oct.8
Oct. 15
Oct.22
Gold and lawful money
deposited with or to the
credit of the Federal reserve agent:
Oct.l
Oct.8
Oct. 15
Oct. 22
Carried to net liabilities:
Oct. 1
Oct.8
Oct. 15
Oct.22
Carried to net assets:
Oct.l
Oct,8
Oct. 15
Oct.22




New
York.

Philadelphia.

Cleveland,

Richmond.

Atlanta.

Chicago.

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

San
Francisco.

4,000
4,000
4,400
4,400

141,000
148,590
153,790
159,280

1,904
1,658
1 930
1,89$

18,718
18,268
18,025
17,711

Total
for
system.

5,120
5,320
5,320
5,420

61,620
04,020
65,520
07,920

5,030
5,390
5,830
5,760

6,600
7 400
7,600
8,000

11,300
12,100
12,700
13,400

11,280
11,450
12,550
13,150

,4,380
4,380
4,380
4,380

3,325
4,825
4,825
4 825

7,100
7,500
8,300
9,100

6,780
7,0S0
7,080
7,480

14,405
15,125
15,285
15,445

3G9
349
329
378

9,198
9,359
9,092
10,001

584
307
621
547

272
320
198
154

363
280
273
202

1,802
853
1,312
'48S

2,161
2,170
2,174
2,176

992
1,572
699
463

527
558
913
746

354
406
318
496

192
436
166
162

4,751
4,971
4,991
5,042

52,422
54,661
56,428
57,919

4,446
5,083
5,209
5,213

6,328
7 080
7,402
7,846

10,937
11,820
12,427
13,198

9,478
10,597
11,238
12,662

2,219
2,210
2,206
2,204

2,333
3,253
4,126
4,362

6,573
6,942
7,387
8,354

6,426
6,674
6,762
6,984

14,273
14,689
15,119
15f283

2,096
2 342
2,470
2,502

122,282
130,322
135,765
141,569

5,120
5,320
5,320
5,420

61,350
03,750
65,300
67,700

5,030
5,390
5,830
5,760

6,600
7 400
7,600
8,000

4,900
6,000
6,700
8,100

7,500
7,500
8,500
8,900

4,380
4,380
4,380
4 380

2,966
4,325
4,325
4,325

7,100
7,500
8,300
9,100

5,315
5,515
5,515
5,815

9,040
9,540
10,040
10,540

4,000
4,000
4,400
4,400

123,301
130,620
136,210
142,440

6,037
5,820
5,727
5,098

1,978
3,097
2,738
3,762

1,111
1,159
1,247
1,169

5,233
5,149
5,079
4,743

8,928
349
329
378

8,872
9,781

584
307
621
547

272
320
193
154

37
2,161
2 170
2,174
2,176

633
1,072
199

527
658
913
746

14,359
15,225
14,791
14,809
1,904
1,658
1,930
1,898

15,378
15,523
15,236
15,680

389

FEDERAL RESERVE BULLETIN.

NOVEMBER 1, 1915.

Statement of Federal reserve agents' accounts at close of business on Fridays, Oct. 1 to Oct. 22, 1915.
[In thousands of dollars.]

Boston.

Federal reserve notes:
Received from the
Comptroller—
Oct.l
Oct. 8
Oct. 15
Oct. 22
R e t u r n e d to t h e
Comptroller—
Oct.l
Oct. 8
,
Oct. 15
Oct. 22
Chargeable to the
Federal r e s e r v e
agent—
Oct.l
Oct. 8
Oct. 15
"» Oct.22
In the hands of the
Federal r e s e r v e
agent—
Oct.l
Oct. 8
Oct. 15
Oct.22
Issued to the Federal
reserve bank, less
amount returned to
• the Federal reserve
a sent for redemption—
Oct.l
Oct. 8
*Oct. 15
Oct. 22
Amounts held by the
Federal reserve agent:
In reduction of liability on outstanding
notesGold coin and
certificates—
Oct.l
Oct. 8
Oct. 15
Oct.22
As security for outstanding notes—
Commercial
paper—
Oct.l
Oct. 8
,
Oct. 15
Oct.22
Federal reserve agent's
credit balances:
In gold redemption
fund—
Oct.l
Oct. 8
Oct. 15.>
Oct.22
WithF.R. Board—
Oct.l
Oct. 8
Oct. 15
Oct.22
Total:
Oct.l..
Oct. 8..
Oct. 15.
Oct. 22.

Memorandum:
Total amount of comm e r c i a l paper
delivered to the
F e d e r a l reserve
agent—
Oct.l
Oct. 8
Oct. 15
Oct.22




11,800
11,800
11,800
11,800

New
York.

63,700
67,560
70,520
73,520

Philadelphia.

Cleveland.

Richmond.

9,2S0 8,000 12,800
9,280 8,000 12,500
0,280 10,000 14,100
12,480 10,000 14,100

Atlanta.

13,600
15,200
16,000
16,000

310
310
310
380

300
300
300
300

Total
for
system.

Francisco.

9,000
13,000
13,000
13,000

10,800
18,260
19,580
19,580

10,000
10,000
10,000
10,000

175,820
190,8S0
199,260
205,460

200

3,400
6,600
6,600
6,600

Dallas.

745
745
745
1,015

8,000
9,000
9,000
9,000

120
120
120
120

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

3,400
6,600
6,600
6,600

9,000
13,000
13,000
13,000

8,000
9,000
9,000
9,000

16,785
18,245
19,565
19,565

10,000
10,000
10,000
0,800

175,075
190,135
193,515
204,445

1,400
600
2,400
2,000

1,500
700
1,400
700

2,320
3,750
3,450
2,850

4,8S0
4,SS0
4,8S0
4,8S0

75
1,775
1,775
1,775

1,900
5,500
4,700
3,900

1,220
1,920
1,920
1,520

2,320
3,120
4,280
4,120

6,000
6,000
5,600
5,400

34,075
41,545
44,725
45.165

5,030
5,390
5,830
5,760

0,600
7,400
7,600
8,000

11,300
12,100
12,700
13,400

11,280
11,450
12,550
13,150

4,3S0
4,3S0
4,380
4,3S0

3,325
4,825
4,825
4,825

7.100
7,500
8,300
9,100

6,780
7,080
7,0S0
7,4SO

14,465
15,125
15,285
15,445

4,000
4,000
4,400
4,400

141,000
145,590
153,790
159,280

5,030

6,270
7,030
7,220
7,600

2,966
4,325
4,325
4,325

7,100
7,500
8 300
9,100

5,315
5,515
5,515
5,815

9,010
9,540
9,540
9,540

4,000
4,000
4,400

400

4,260
4,260
4,260
4 260

110,451
116,630
120,010
119,920

1,465
1,565
1 565
1,665

5,425
5,5S5
5,245
4,905

6,380
6,180
6,180
6,0S0

2,140
3,540
5,000
5,600

3,940
3,5S0
3,140
6,340

5,120
5,320
5,320
5,420

61,620
64,020
65,520
67,920

5,120
5,320
5,320
5,420

61,350
63,750
65,300
67,700

5 830
5^760

6,400
6,100
6 000
5,300

270
270
220
L>20

4,900

450
490
500
520

8 100
11,300
12,100
12,700
13 400

11,280
11,450
12,550
13,150

6,515
6,126
6,010
5,379

3,7S8
4,055
4,050
4,251

500
1,000

4,400

12,400
13,500
15,700
22,000

6,780
7,080
7,0S0
7,480

14,465
15,125
15,285
15,445

4,000
4000
4 400
4,400

141,000
148,590
153,790
159,2S0

1,466
1 568
1,568
1**-

5,695
5,748
5,412
4,972

7,500
7,500
8,500
8,500

60?2
6 700
6,600
7,400
7,600
8,000

17,699
17,970
17,580
6S4O

120
120
120
120

400

5,030
5,390
5 830
5,760

359
500
500
500

3,780
3,950
4,050
4,250

330
370

270
270
220
220

San

Minne- vansas
apolis. City.

13,600
15,200
16,000
16,000

63,760
67,560
70,520
73,520

61,620
64,020
65,520
07,920

9,3S0
9,3S0
9,3S0

St.
Louis.

8,970 8,000 12,800
8,970 8,000 12,800
8.970 10,000 14,100
12,100 10,000 14,100

11,500
11,500
11,500
11,500

5,120
5,320
5,320
5,420

Chicago.

4,380
4 380
4 3S0
4 3S0

3,325
4,825
4,825
4,825

359
500 j
500
500

7,100
7,500
8,300
9,100

!"M."i

13,0-33
IS,267
17,766
16,9S9

390

FEDERAL RESERVE BULLETIN.

NOVEMBER 1,

1915.

GOLD IMPORTS AND EXPORTS.
Imports o gold, by customs districts, Jan. 1 to Oct. i 5 , 1915.
I In thousands of dollars.]

For week ending Sept. £4.
Ore and base bullion
Bullion, refined
United States coin
Foreign coin
Total

40

21

213
11
516
746

Total

259
359

12
5,332

4,816
140

21

4,856
=====

For week ending Oct. t.
Ore and base bullion
United States mint or
assay office bars
Bullion, refined
United States coin
Foreign coin

29

140

10

54

17

29

sc
117

5,962

195

434
208

208
1,286

28

1*207'

42

1,261

117

195

64

58
194

101
81

12

252

182

12

7,536

58

203

46

498
1,923
6
8,479

203

40

10,906

4,038
4,083

4,038
10

208

For week ending Oct. 8,
Ore and base bullion.
Bullion, refined
United States coin....
Foreign coin
Total

54
264
1
4,730

135
2

5,049

137

1,855 |

21
150

127
1,297

.307
1,673
5,553

For week ending Oct. 15.
Ore and base bullion.
Bullion, refined
United States coin....
Foreign coin
Total

9
476
3
5,558

15

2,921

6,046

171

4,345 . . .

Jan. 1 to Oct. IS.
816
Ore and base bullion
United States mint or
assay office bars
,
8,996
Bullion, refined
48,390 ....119,869
United States coin
11,650 50 j20
j20,G74
Foreign coin
Total.
60,041
H355




332

342

142

799

450

8
363

1,328

2,871 10,885
22
36,488

792

1,478

3,144 48,194

3,213
1,775
12

4,655

114

1,318

12,015
6,920
8,131
86,557
5,254

279
49

498
114

6,923
34,730
154,920
74,680

1,318 106,863

3 283,268

NOVEMBER 1,

391

FEDERAL BESERVE BULLETIN.

1915.

Exports of gold, by customs districts, Jan. 1 to Oct. 15, 1915.
[In thousands of dollars.]

1
For week ending Sept. £4.
United States mint or assay office bats..
Bullion, rtfined, domestic
United States coin....
Foreign coin
,

50

503
11
514

Total.

72

10

21
5
51S
62
"COG

10

For week ending Oct. 1.

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

27

2S
1
6
1,307

1,300
75

Total.

34

1,300

1,417

For week ending Oct> S.

Ore and base bullion..
United States coin....
Total.
For week ending Oct. 15.
585
15

Total.

5S5
15

600

United States coin..
Foreign coin

600

Jan. 1 to Oct. 15.

Total.




270

250

16

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

70
20
9,134
4,113

19
1,805

195

10

84

195

353

3,975
2

12,780

10

24

16

S
134 ...
274

5
3
22

14

13,700

INDEX.
Page.

Acceptances
381, 382
Address by Hon. P. M. Warburg
352-354
Business conditions throughout the 12 Federal Reserve Districts
373-380
Commercial paper discounted by Federal Reserve
Banks
381-384
Conference of Governors held in Minneapolis
356
Discount rates in effect October 28, 1915
359
Discounts, distribution of
381-384
Earnings and expenses of Federal Reserve
Banks
349-351
Federal Reserve Agents' Committee on Clearance,
report of
369-372
Federal Reserve Agents, date of meeting of
347
Federal Reserve Agents7 accounts, statement of...
389
Federal Reserve Banks:
Earnings and expenses of
.
349-351
Resources and liabilities of
387,391
Services performed for member banks..
346,347
Federal Reserve notes:
Circulation of
388
Decision of Attorney General re franking privilege
355
Interdistrict movement of
351
Fiduciary powers granted to member banks
367
Foreign agencies
348
Franking of Federal Reserve notes, decision of
Attorney General relating to
355
Gold imports and exports
390,391
Gold settlement fund
357-359
• Governors, conference of, at Minneapolis
356




Page.

Informal rulings of the Federal Reserve Board.. 360-362
Open-market operations
360
Election of Class A and Class B directors
360
Payment of reserves
361
Use of word " Federal" by State banks.
361
Compensation of Deputy Federal Reserve
Agents
362
Eligibility of an acceptor under acceptance
regulation
362
No authority granted member banks to act as
receiver
362
Interpretation of section 8 of Clayton Act
362
Window advertising
362
Intradistrict clearing system
367
Interdistrict movement of Federal Reserve notes.. 351
Law department
363-366
Pledges of collateral security
363
Single-name paper
365
Election of directors under Clayton Act
365
Meeting of Federal Reserve Agents, date of
347
Report of Federal Reserve Agents' Committee on
Clearances
369-372
Resources and liabilities of Federal Reserve
Banks
387,388
Services performed for member banks by Federal
ReserveBanks
346,347
State banks admitted to system
347
Trustee, executor, etc., applications to act as, approved
367
United States bonds, purchase, etc., of, by Federal
Reserve Banks
355
Work of the Federal Reserve Board
345

o

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