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FEDERAL RESERVE
BULLETIN




ISSUED BY THE

FEDERAL RESERVE BOARD
AT WASHINGTON

OCTOBER, 1916

WASHINGTON
GOVERNMENT PRINTING OFFICE
1916

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




W. P. G. HARDING, Governor.
PAUL M. WARBURG, Vice Governor.
FREDERIC A. DELANO,
ADOLPH 0. MILLER.
CHARLES S. HAMLIN,
H. PARKER WILLIS, Secretary.
SHERMAN ALLEN, Assistant Secretary and Fiscal
Agent.
M. C. ELLIOTT, Counsel.




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

In sending the Bulletin to others the

Board feels that a subscription should be required.

It has

accordingly fixed a subscription price of $2 per annum.

Single

copies will be sold at 20 cents.

Foreign postage should be added

when it will be required.

Remittances should be made to the

Federal Reserve Board.

Member banks desiring to have the

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

in

TABLE OF CONTENTS.
Page.

Work of the Board
Election of directors of Federal Reserve Banks
Payment of dividends
.
Operation of clearing plan
_
Repeal of war tax
Federal Reserve note policy
Conversion of United States bonds
,
Establishment of rates on promissory notes of member banks
Fees of directors of national banks
Press statement in connection with the action of Board on Clayton Act
Commercial failures during August
New national bank charters
Uniform bills of lading act
Gold Settlement Fund
_
Informal rulings of the Board
Law department
Circulars and regulations
Summary of business conditions
Business conditions throughout the 12 Federal Reserve districts
Distribution of discounted paper
Acceptances
.
Federal Reserve Bank statements
Gold imports and exports
.
Earnings on investments of Federal Reserve Banks
Discount rates in effect




IV

.

.
-

—

507
510
511
511
512
512
512
513
514
514
515
515
515
520
523
526
529
544
545
571
576
579
583
585
585

FEDERAL RESERVE BULLETIN
VOL.

2

OCTOBER 1, 1916
WORK OF THE BOARD.

Much of the time of the Federal Eeserve
Board during September has been devoted to
the consideration of, and action upon, applications for permission under the Kern amendment to the Clayton Act for the same person to
serve at the same time as an officer, director, or
employee of a member bank and not more than
two other banks which are not in substantial
competition with the member bank. These applications were received with the recommendation of the Federal Eeserve Agent for the district from which they came and were first
given examination and recommendation of a
subcommittee appointed by the Board. They
were then taken up by a committee of members
of the Board on the Clayton Act, through
which course they were presented for Board
action.
The Kern amendment, it is to be noted, is
drawn in broad terms. It prescribes no fixed
procedure to be observed by the Board in
reaching its conclusions, and it lays down no
rules of investigation. It leaves the Board
to determine for itself, on its own judgment
and in its own way, whether or not in any
given case banks are, on a consideration of all
the relevant facts and circumstances, to be regarded as in substantial competition. It is to
be noted, however, that while the Board has
full discretion to determine what shall constitute evidence of the existence or of the extent of competition between banks, there its
discretion ends—wherever "substantial" competition is found to exist between banks, the
prohibition of the law becomes automatically
operative. Clearly, therefore, the Board's responsibility begins and ends with the determination of the fact and the degree of competition.




No. 10

Broadly speaking, each case has had to be
investigated and considered by the Board essentially on its own merits. It should, however, be stated that the Board has taken the
position that what is commonly regarded as
potential competition, as well as actually existing competition, must properly be considered as a factor in cases where the resources
of the banks concerned are of such magnitude
or of such character that the ability of the
banks jointly to grant or to withhold credit
or otherwise to influence the conditions under
which credit could be obtained should fairly
be held to constitute such banks a dominant
factor in the general loan market.
Applications of 707 officers, directors, and
employees have been approved and 113 applications disapproved by the Board to September 26. Where received in time to permit of
early action by the Board, these approvals
and disapprovals were sent out on September
15, thus giving the banks, the applications of
whose officers, directors, or employees were not
granted, a month in which to hold new elections. During the consideration of the applications the Board requested the presence in
Washington of several of the Federal Reserve Agents, in order that the situation of the
banks involved in the applications might be
better understood. Where the Board finds that
there is substantial competition, it is not within
its power to grant consent. It desires, however, to offer every opportunity to applicants
to present additional facts or arguments bearing upon the subject and will therefore grant
hearings upon the petition of applicants. The
first of these hearings will occur on October 3.
Amendments to the Federal Eeserve Act,
which were printed in the September Bulletin,
with the announcement that they had been
agreed to by both Houses of Congress, were
507

508

FEDERAL RESERVE BULLETIN.

approved by the President and became effective on September 7,1916. In revising the conference report upon the amendments there was
inadvertently omitted from the amendments,
as printed in the Bulletin, the reenactment of
the authority given to the Board on March 3,
1915, to permit member banks to accept bills
and drafts based upon the importation and ex.
portation of goods to the amount of 100 per
cent of their capital and surplus. The amendments as printed in the Bulletin should therefore be changed by striking out the last six
lines of the second paragraph on page 440. In
explanation of the situation created by this
omission the Governor of the Federal Reserve
Board sent out, under date of September 8,
1916, the following letter:
"Amendments to the Federal Reserve Act,
as printed in the September number of the
Federal Reserve Bulletin, were signed by the
President on September 7, and are therefore
law.
" I n this connection your attention is called
to the fact that the following words, comprising the last six lines of the second paragraph
on page 440 of the Bulletin, were, through error, omitted by the conference committee: ' except by authority of the Federal Reserve
Board, under such general regulations as said
Board may prescribe, but not to exceed the
capital stock and surplus of such bank, and
such regulations shall apply to all banks alike,
regardless of the amount of capital stock and
surplus.'
" The Board discovered the omission when
the bill was referred to it for approval, and,
although effort was made, it was found impossible to correct the mistake during the closing hours of Congress. The matter will therefore be left in abeyance until Congress reconvenes in December, when there is every reason
to hope and believe that the correction will
be made.
"Pending such correction, the Federal Reserve Board will be unable to grant any new
requests from member banks for permission to
accept to 100 per cent, under the powers above
quoted."

OCTOBER 1,1916.

carry in Federal Reserve Bank any portion of
their reserves now required to be held in their
own vaults. Acting upon this authority, the
Board, on September 11, took action, notice
of which was sent to Federal Reserve Banks
in the following letter :
" The recent amendments to the Federal Reserve Act provide in part that the Federal
Reserve Board shall have power, 'by general
ruling covering all districts alike, to permit
member banks to carry in the Federal Reserve
Banks of their respective districts any portion
of their reserves now required by section 19
of this Act to be held in their own vaults.'
" In pursuance of the authority vested in it
by this section the Board hereby rules that,
effective September 18, 1916, and until further
notice, any member bank so desiring shall be
permitted to carry in the Federal Reserve
Bank of its district any portion of its reserves
now required by law to be held in its own
vaults.
" Please inform the officers of your bank that
they may advise the member banks of your
district."

The 1916 series of circulars and regulations
of the Board was sent out to Federal Reserve
Banks September 20 and are reprinted in this
Bulletin. The issuance of these circulars and
regulations was delayed in order that the
changes made necessary by reason of the
amendments to the Federal Reserve Act might
be incorporated. With the issue of 1916 the
Board has adopted the plan of consolidating
the circulars and regulations. Only one new
circular had been issued prior to the sending
out of the compilation, that covering clearing
and collection of checks, Circular No. 1, of
May 1, 1916 (reissued as Regulation J ) .
A dividend was declared by the Federal
Reserve Bank of Dallas on September 15, with
the approval of the Federal Reserve Board,
the payment completing the full 6 per cent to
December 31, 1915. The Federal Reserve
Bank of San Francisco, after charging off all
expenses of organization, furniture, and equipOne of the amendments to the Act provides ment, paid on September 20 a dividend of 6
that the Board may, by general ruling affect- per cent to January 1,1915. The rule has now
ing all districts alike, permit member banks to been adopted by the Board that books of Fed-




OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

eral Eeserve Banks shall hereafter be closed
and dividends credited on June 30 or December
31, or both.
Final conversions by Federal Eeserve Banks
of the thirty million of United States 2 per
cent consols into United States 3 per cent 30year bonds and 3 per cent 1-year Treasury
notes, in equal amounts, for the year will be
completed on October 1, 1916. Two banks did
not take the entire amount of their allotments,
and the bonds to which they were entitled
were distributed among other banks which desired more than their allotments.
Elections to fill expiring terms of class A
and B directors of Federal Eeserve Banks
will be held in November, the polls opening
on November 21 and closing 15 days thereafter.
The letter sent out to Federal Eeserve Agents
outlining the procedure in connection with
these elections is reprinted elsewhere in the
Bulletin, with a list of directors whose terms
expire. The appointment of class C directors
will, under the law, be made by the Federal
Eeserve Board. Terms of directors expire on
December 31.
Announcement was made by the Board on
September 15 of elections to fill two vacancies
in class C directors at the Federal Eeserve
Bank of Philadelphia. Henry B. Thompson,
of Wilmington, Del., was elected in the place
of George W. Norris, Philadelphia, resigned
upon appointment as a member of the Farm
Loan Board, and J. Davis Brodhead, of South
Bethlehem, Pa., was elected in place of Vance
C. McCormick, of Harrisburg, Pa., also resigned. Mr. Thompson was designated by the
Board as Deputy Federal Eeserve Agent. His
term will expire on December 31, 1916. The
term of Mr. Brodhead expires on December 31,
1918.
Threatened interference with the operation
of railroads by the impending strike of employees resulted in sudden and heavy demands
for Federal Eeserve notes by member banks
upon Federal Eeserve Banks in several districts, which were in turn reflected in demands
upon the reserve stock of notes in Washington




509

and at the subtreasuries. All of these demands were promptly met, thus giving an indication of the effectiveness of the machinery of
the Federal Eeserve Act in this particular.
It may be noted in this connection that arrangements were in readiness for the rediscount by other Federal Eeserve Banks of the
paper of any Federal Eeserve Banks which
might be subjected to discount demands from
their member banks in excess of their ability
to care for them out of their own resources
alone. At no time was there any doubt of the
ability of the Federal Eeserve system easily to
take care of any demands for credit and currency which might arise because of interruption of transportation at a season when the
movement of staple crops was under way.
Federal Eeserve Banks have adopted, during the month of September, rates for promissory notes of member banks running 15 days,
and for 15-day commercial paper. These rates
vary from 3 per cent to 3£ per cent and 4 per
cent. The Federal Eeserve Bank of Chicago,
on August 31, decreased its rate for 60-day
paper from 4^ to 4 per cent. Boston, on September 29, established a rate for domestic acceptances from 3 to 4 per cent.
A quarterly meeting of the Federal Advisory
Council was held in Washington on September
18 and 19. All of the members of the council
attended and reported, among other things,
that while business is very active, there is no
immediate prospect that a change of discount
rates will be desirable.
There has been substantial progress in the
collection of checks and the system is working
more smoothly with its continued operation.
Federal Eeserve Banks are collecting at par
from 417 more banks than on the date of the
report printed in the* September Bulletin. On
another page of the Bulletin are given details of the operation of the 12 banks under the
clearing plan. The supplement to the par list
showing additions and withdrawals was sent
out on September 15.
Governor Harding, Vice Governor Warburg,
and Comptroller Williams attended sessions of

510

FEDERAL RESERVE BULLETIN.

the American Bankers' Association in Kansas
City the latter part of the month and addressed
meetings of the association. Mr. Warburg also
made an address before the American Institute
of Banking at Cincinnati, Ohio, on September 22.
Mr. Hamlin addressed the Ohio Bankers'
Association at Columbus, Ohio, on September
14 and the American Association of Public Accountants in New York City on September 21.

OCTOBER 1,-1916.

of the Organization Committee. When these
certificates have been returned by the banks
the electors should be listed and the preferential ballot prepared.
Under the provisions of section 4 this ballot
need not show the name of the bank placing
in nomination any candidate, but if not on the
ballot a separate list should be prepared showing by whom each candidate is nominated. If
this is done, the ballot form used will be somewhat simplified, since the voting columns,
showing the first, second, and third choice of
the elector, can appear on the same page as the
name of the candidate.
Section 4 of the Federal Eeserve Act provides that—
"Every elector shall, within 15 days after
the receipt of the said list, certify to the chairman his first, second, and other choices."
The polls for the election of directors would
therefore close 15 days after November 21, and
in consequence, arrangements should be made
to have the ballots in the hands of the electors
not later than November 21.

Election of Directors.
Elections to fill expiring terms and vacancies
in classes A and B directors of Federal Eeserve
Banks will be held in November and December,
the polls opening on November 21 and closing
15 d&js thereafter. Below is given the letter
of instructions as to the procedure to be followed, sent out by the Federal Eeserve Board
on September 11 to the 12 Federal Eeserve LIST OF OFFICEES AND DIEECTOES OF FEDEEAL BESEEVE
BANKS WHOSE TEEMS EXPIEE IN 1916.
Banks, and a list of the directors whose terms
expire on December 31, 1916. The class C District No. 1—Boston:
directors whose names are also given are, unClass C—Walter S. Hackney, Providence, R. I.
der the law, appointed by the Federal Eeserve
Glass A—O. G. Sanford, Bridgeport, Conn.
Class B—E. R. Morse, Proctor, Vt.
Board.
Inasmuch as the term of office of one class A
director and one class B director of your bank
will expire on December 31, 1916, 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.
The Board has fixed November 21 as the date
for opening the polls. You should accordingly
arrange to have printed: (a) Certificate of
election of district reserve elector; (6) certificate of nomination for class A director; (c)
certificate of nomination for class B director.
These certificates, as printed last year, contain form of resolution to be adopted by the
member banks. A sufficient number should be
prepared and mailed to each member bank in
the group which elected the director whose
term expires on December 31, 1916. It will be
necessary, therefore, for you, as chairman of
the board, to group the banks in your district
in accordance with the act, following the general lines of the plan set forth in the circular




District No. 2—New York:
Class C—Pierre Jay, New York, N. Y.
Class A—William Woodward, New York, N. Y.
Class B—H. R. Towne, New York, N. Y.
District No. 3—Philadelphia:
Class C—Henry B. Thompson, Wilmington, Del.
Class A—M. J. Murphy, Scranton, Pa.
Class B—A. B. Johnson, Philadelphia, Pa.
District No. 4—Cleveland:
Class C—Lyman H. Treadway, Cleveland, Ohio.
Class A—W. S. Rowe, Cincinnati, Ohio.
Class B—C. H. Bagley, Corry, Pa.
District No. 5—Richmond:
Class C—James A. Moncure, Richmond, Va.
Class A—J. F. Bruton, Wilson, N. C.
Class B—J. F. Oyster, Washington, D. C.
District No. 6—Atlanta:
Class C—W. H. Kettig, Birmingham, Ala.
Class A—F. W. Foote, Hattiesburg, Miss.
Class B—W. H. Hartford, Nashville, Tenn.
District No. 7—Chicago:
Class C—Charles H. Bosworth, Chicago, 111.
Class A—J. B. Forgan, Chicago, 111.
Class B—Henry B. Joy, Detroit, Mich.

FEDERAL RESERVE BULLETIN.

OCTOBER 1, 1916.

District No. 8—St. Louis:
Class C—T. C. Tupper, St. Louis, Mo.
Class A—Oscar Fenley, Louisville, Ky.
Class B—W. B. Plunkett, Little Rock, Ark.
District No. 9—Minneapolis:
Class C—John W. Black, Houghton, Mich.
Class A—E. W. Decker, Minneapolis, Minn.
Class B—F. K. Bigelow, St. Paul, Minn.
District No. 10—Kansas City:
Class C—F. W. Fleming, Kansas City, Mo.
Class A—W. J. Bailey, Atchison, Kans.
Class B—M. L. McClure, Kansas City, Mo.
District No. 11—Dallas:
Class C—H. O. Wooten, Abilene, Tex.
Class A—B. A. McKinney, Durant, Okla.
Class B—Marion Sansom, Fort Worth, Tex.
District No. 12—San Francisco:
Class C—Claud Gatch, San Francisco, Cal.
Class A—-C. K. Mclntosh, San Francisco, Cal.
Class B—E. H. Cox, Madera, Cal.

Payment of Dividends.

511

Boston recently, and will not in the future be
disposed to give its assent to dividend payments except at the appropriate time in June
and December.
Please bring this to the attention of your
directors at the next meeting.

Operation of the Clearing Plan.
Eeports for the period from August 16 to
September 15, 1916, show a large increase in
the number of items and average amount of
daily clearings under the interdistrict clearing
system.
The average amount of daily clearing was
materially larger iii all Federal Eeserve districts. The total of banks from which Federal Eeserve Banks are collecting at par increased from 14,656 to 15,067. The total
number of State banks from which collections
are being made at par increased 417.
The average amount of daily clearings for
the 12 banks from July 16 to August 15 was
$59,301,695. This increased from August 16
to September 15 to $78,559,703. The Federal
Eeserve Bank of New York is making collections at a cost of 1 cent per item. The table
showing the detail of operations at the 12
banks is given below.

Books of Federal Eeserve Banks will be
closed and dividend payments hereafter made
as of June 30 or December 31, or both. This
matter has been under consideration by the
Federal Keserve Board, and in this connection
it has had the benefit of an investigation by a
committee of the governors of Federal Eeserve
Banks which reported to a meeting of the
governors held in Boston in August. The letter carrying this direction into effect was sent
out on September 18, 1916, and is given below: Operations of the Federal Reserve interdistrict clearing system, Aug. 16 to Sept. 15, 1916.
You are advised that in the opinion of the
Federal Eeserve Board it is desirable that any
Average
Average
Member
State
number
dividends declared by Federal Eeserve Banks
amount
banks in banks
of items
Bank.
of daily
the dis- remitting
should be with a view to their payment at reghandled
clearing.
trict.
at par.
daily.
ular intervals, and that the books of the banks
should be closed on June 30 or December 31,
402
31,937 $7y602,340.09
Boston
1241
as the case may be, so that each member bank New York
626
30,436 17,463,481.93
29
630
21,414 10,357,717.00
Philadelphia....
135
may be credited with its proportion of the Cleveland
756
11,915 5,371,006.85
473
520
12,685 4,871,323.00
257
dividend not later than the following day. Richmond
391
10,127 2,734,585.02
462
While the Board has not so far adhered to this Atlanta
993
21,195 9,822,884.00
Chicago
1,314
469
7,780 4,330,971.40
St. Louis
•.
763
policy strictly, having yielded to the wishes of Minneapolis
750
7,591 7,849,627.38
1,100
939
10,311 4,782,630.15
1,392
the management of the Federal Eeserve Banks Kansas City..'...
•622
8,443 2,683,162.00
241
in some instances, it concurs fully in the mat- Dallas
520
3,563 1,049,975.00
San Francisco...
1,042
ter of dividend payments with the committee
Total
i 177,397 78,559,703.82
7,618
7,449
of governors of the Federal Eeserve Banks api All State banks in district.
pointed at the conference of governors held in




62049—16

2

512

FEDERAL RESERVE BULLETIN.

Repeal of War Taxes.
It has been held by the Commissioner of Internal Revenue that the repeal of taxes under
schedules A and B of the emergency-revenue
act of October 2,1914, was effective after midnight, Friday, September 8, 1916. The ruling
in this connection is reprinted below:
In reply to your inquiry, you are advised
that the act of September 8, 1916, repealed the
taxes under schedules A and B of the emergency-revenue act of October 22, 1914, including taxes on bonds, stock transfers, sale agreements on produce exchanges, promissory notes,
bills of lading, telegraph and telephone messages, indemnity bonds, certificates, brokers'
contracts, conveyances, customhouse entries,
insurance policies, passage tickets, powers of
attorney, protests, and parlor-car seats, and
sleeping berths; and also taxes on perfumery,
chewing-gum, and cosmetics, and other similar articles, the repeal being effective after
midnight Friday night, September 8.

Federal Reserve Note Policy.
It having come to the attention of the Federal Reserve Board that one of the Federal
Reserve Banks was meeting currency demands
in its district by paying out gold certificates
and legal tender instead of using its own
Federal Reserve notes, for the reason that the
former could be obtained more cheaply than
the latter, the Governor of the Federal Reserve Board, on September 11, addressed the
following letter to the bank for the district
in which this expedient was adopted, sending
copies of the letter to all other Federal Reserve
Agents:
The Board has received the letter of your
bank, dated September 7, which confirms your
code telegram instructing the withdrawal from
the gold settlement fund of $1,000,000 and the
deposit of same amount with the Treasurer of
the United States for your bank's credit. This
states that the object in having this deposit
made was to provide for the shipment to your
bank by the Treasurer of the United States of
the same amount in gold certificates and




OCTOBER l,

1916.

United States notes of small denominations,
enabling you to supply the demand which you
anticipate will be made upon you by member
banks. It further states that you may have
occasion to make similar requests in the future.
It is noted that you prefer, " for the time being
at least, to put in circulation in our district
United States currency, which we can obtain
at a cost to ourselves of approximately 20 cents
per thousand, rather than issue our notes at a
considerably greater expense to us."
While the board recognizes the importance
of small economies in the operation and administration of the Federal Reserve Banks, it
feels, nevertheless, that it is unwise to lose
sight of the larger objects to be attained. It
is of the opinion that it is highly desirable that
there be held in the vaults of the Federal Reserve Banks of the United States Treasury
and subtreasuries as large an amount of gold
as possible, and it deprecates the use of gold
certificates and legal-tender notes for cropmoving purposes. Silver certificates in small
denominations and national-bank notes will
naturally form a substantial part of the circulating medium, but the Board would prefer
to have Federal Reserve notes used wherever
possible and is anxious to see this policy
adopted by the Federal Reserve Banks. It
hopes, therefore, that your bank will not let a
desire to save a small expense influence it in
this respect and that whenever it can issue Federal Reserve notes it will do so, thereby helping
to concentrate gold certificates in the vaults
of the Federal Reserve Banks and to put in
circulation currency of an elastic character,
which will be withdrawn automatically as soon
as the demand for it ceases.

Conversions of United States Bonds.
All of the $30,000,000 of United States 2
per cent bonds which may be converted by the
12 Federal Reserve Banks into 30-year 3 per
cent bonds and 1-year 3 per cent" notes, under
section 18 of the Federal Reserve Act during
the year ending September 30, 1916, have been
exchanged. The conversions have been on
three dates, the first covering two quarterly
periods. Approximately $2,000,000 in conversion bonds and notes were declined and taken

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

by other banks than those to which they were
originally allotted.
Owing to the fact that Federal Reserve
Banks were known to have purchased more
than the required amount of $25,000,000 in 2
per cent bonds during the year, there was but
a small offering of bonds by member banks for
sale to Federal Reserve Banks through the
Treasurer of the United States on September 21.
The following resolution was passed by the
Board on September 22, 1916:
.Whereas it appears that the 12 Federal Reserve Banks have purchased in the open
market bonds in excess of the amount which
might have been allotted to such banks at
the end of this quarterly period on the basis
heretofore determined upon and announced
by the Board: Now, therefore, be it
Resolved, That it is the sense of the Board
that no necessity exists for enforcing the requirement provided for under section 18 of the
Federal Reserve Act at the end of this quarterly period ending October 1, 1916, and that
it will not, therefore, at this time require the
Federal Reserve Banks to purchase any of the
bonds which are offered for sale by member
banks through the Treasurer of the United
States under the provisions of section 18: Be
it further
Resolved, That the Secretary be instructed
to send a copy of this resolution to the various
Federal Reserve Banks and to the member
banks which have offered bonds for sale in
order that they may be notified of the action of
the Board in the premises.
Supplements to Par List.
In order to relieve the Federal Reserve
Banks of the necessity of sending out supplements to the par list to member banks of the
system, the Federal Reserve Board will try,
on November 1, the plan of sending out the
supplement to the par list to member banks
with the Federal Reserve Bulletin. Changes
in the list should reach Washington on October 20.




513

State Bank Admitted.
The Bankers' Loan & Trust Co. of Sioux
City, Iowa, was admitted to the Federal Reserve system during the month of September,
the number of State institutions which have
now joined the system being 37.

Promissory Notes of Member Banks.
Upon the approval by the President of the
recent amendments to the Federal Reserve Act
this letter was sent out by the Governor of the
Board to the chairmen of the boards of the 12
Federal Reserve Banks:
The amendments to the Federal Reserve Act
approved on September 7, 1916, provide in
part that—
"Any Federal reserve bank may make advances to its member banks on their promissory notes for a period not exceeding fifteen
days at rates to be established by such Federal
reserve banks, subject to the review and determination of the Federal Reserve Board,
provided such promissory notes are secured
by such notes, drafts, bills of exchange or
bankers' acceptances as are eligible for rediscount or for purchase by Federal reserve banks
under the provisions of this Act, or by the
deposit or pledge of bonds or notes of the
United States."
The Federal Reserve Board does not deem
it necessary to promulgate any special ruling
relating to the exercise of the powers conferred
by this amendment, but it is expected that each
Federal Reserve Bank will establish rates, to
be approved by the Federal Reserve Board, at
which it will make advances on promissory
notes of member banks properly secured. It
is suggested, however, that those banks which
have established a 10-day discount rate on
commercial paper abolish the 10-day rate and
make a uniform 15-day rate for both commercial and member bank paper rather than a 10day rate for commercial paper and a 15-day
rate for advances on collateral notes of member
banks.
As soon as such rates are established and
approved you will no doubt inform your mem-

514

FEDERAL RESERVE BULLETIN".

ber banks of the facilities afforded under the
provisions of this amendment, stating the rate
at which you are prepared to make advances
on their promissory notes, and calling their attention to the fact that such notes must be
secured either by such notes, drafts, bills of
exchange, or bankers' acceptances as are eligible for rediscount or purchase by Federal
Eeserve Banks or by the deposit or pledge of
bonds or notes of the United States.
Fees of Directors of National Banks.
Nearly one-half of the national banks in the
United States pay no fees to their directors.
These are, however, principally country banks.
Eeports obtained by the Comptroller of the
Currency of the fees paid to the directors of
about 7,500 out of 7,600 national banks show
that the fees paid to 3,708, per meeting, are as
follows:
Banks paying directors' fees of less than $1 (all
being country banks)
34
$1, but less than $2
681
$2 to $3
1,179
$3, but less than $5
402
$5
,
997
More than $5, but less than $10___
51
$10
268
Over $10
•
96
Total

3, 708

There were only 43 banks in the reserve and
central reserve cities which reported paying
their directors less than $5 per meeting, and
of the 96 banks paying more than $10 per meeting, 18 were located in central reserve cities, 8
in other reserve cities, and 70 were country
banks.
Press Statement.
The following statement to the press, in connection with the action of the Board on the
Clayton Act as amended, was issued on September 19:
The Clayton Act as originally enacted prohibited directors of member banks of the Federal Eeserve System from serving as directors
in other banking institutions, except in certain




OCTOBER 1,1916.

specific cases, the purpose of the Act being, in
the language of the Judiciary Committee of
the House, " to prevent, as far as possible, control of great aggregations of money and capital through the medium of common directors
between banks and banking associations, the
object being to prevent the concentration of
money or its distribution through a system of
interlocking directorates."
The Kern amendment to the Clayton Act
provides that with the consent of the Federal
Eeserve Board an officer, director, or employee
of a member bank may serve as officer, director, or employee of not more than two other
banks, if such other bank or banks are not in
"substantial competition55 with such member
bank. In passing upon the applications the
Board has given careful consideration to the
facts submitted by the applicants and to the
reports and recommendations of the Federal
Eeserve Agents of the respective districts.
The Board has considered each case on its
own merits, but has taken the general position
that the mere purchase by two banks of commercial paper in the open market, or the making of time or demand loans on collateral securities having a wide market, or the purchasing of such securities need not necessarily or
invariably be considered as indicating "substantial competition55 within the meaning of
the Kern amendment. It is, however, the view
of the Board that " substantial competition5?
must be held to exist in cases where the resources of the banks are of such magnitude or
of such character that the ability of the banks
jointly to grant or to withhold credit, or
otherwise to influence the conditions under
which credit may be obtained, might constitute them a dominant factor in the general
loan market, even though the character of the
deposits carried by the institutions in question
might be quite different.
In drawing the distinction in various cities
no fixed rule as to amount of assets could be
applied, as different lines of demarcation had
to be observed, suggested by the relative importance of the financial institutions involved
and the character and scope of the markets in
which they operate.
The Board has up to this time passed on
669 applications; 556 favorably and 113 adversely.
All applications granted are, in accordance
with the terms of the Kern amendment, subject to revocation by the Federal Eeserve
Board.

OCTOBSS 1,1916.

515

FEDERAL RESERVE BULLETIN.

Full Acceptance Powers Granted.

New charters issued to
With capital of
Increase of capital approved for
With new capital of
__„

Banks.
9

$395, 000
The American Exchange National Bank, of
7
Dallas, Tex., was authorized to accept drafts
327, 500
or bills of exchange to 100 per cent of its capiAggregate number of new charters and
tal and surplus, under the act and regulations,
banks increasing capital
16
in September. This application was received With aggregate of new capital authorized
722, 500
and acted upon by the Board on September 6.
Number of banks liquidating (other
than those consolidating with other
national banks)
1
Capital of same banks___
,
Number of banks reducing capital
None.
Reduction of capital

Commercial Failures.
Commercial failures in the United States
during August, according to statistics compiled by R. G. Dun & Co., were 1,394, as
against 1,395 in the same month of 1915. Liabilities were $20,128,709 and substantially
larger than those in 1915. The comparison
with the same month in 1914, when there were
1,272 failures, is more favorable as to numbers,
but the liabilities for August, 1914, were $43,468,116.
* The figures are separated, so as to show the
number of failures in each of the Federal Keserve districts and the amount of liabilities.
Districts.
No. 1. . .
No. 2
No. 3.
No. 4
No. 5
No 6
No. 7
No. 8. ..
No. 9
No. 10. ..
No. 11
No. 12....

Number.

Liabilities.

153
190
71
97
69
173
182
74
45
80
70
190

Total, 1916

1915
1914
1913..

$1,190,798
2,260,360
674,016
3,212,846
574,958
1,788,516
1,238,809
622 435
417,706
3,888,607
1,029,149
3,230,509

1,394
1,395
1,272

20,128,709
17,733,552
43,468,116
20,848,916

New National Bank Charters.
The Comptroller of the Currency reports the
following increases and reductions in the number of national banks and the capital of
rational banks during the period from August
26 to September 22, 1916, inclusive:




Total number of banks going into liquidation or reducing capital (other than
those consolidating with other national banks)
. .
Aggregate capital reduction

1
._

50, 000
None.

50, 000

The foregoing statement shows the aggregate
of increased capital for the period of the
banks embraced in statement was
722, 500
Against this there was a reduction of capital
owing to liquidations (other than for consolidation wTith other national banks) and
reductions of capital of
50, 000
Net increase

672, 500

Uniform Bills of Lading.
A uniform bill of lading act passed by Congress was approved by the President on
August 29. Because of the interest of banks
in this law, which gives them additional protection as to loans secured upon the evidence
of shipping documents, the act is here reprinted.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That bills of lading issued by any
common carrier for the transportation of goods in any
Territory of the United States, or the District of Columbia, or from a place in a State to a place in a
foreign country, or from a place in one State to a
place in another State, or from a place in one State
•to a place in the same State through another State or
foreign country, shall be governed by this Act.
SEC. 2. That a bill in which it is stated that the
goods are consigned or destined to a specified person
is a straight bill.

516

FEDERAL RESERVE BULLETIN.

SEC. 3. That a bill in which it is stated that the
goods are consigned or destined to the order of any
person named in such bill is an order bill. Any provision in such a bill or in any notice, contract, rule,
regulation, or tariff that it is nonnegotiable shall be
null and void and shall not affect its negotiability
within the meaning of this Act unless upon its face
and in writing agreed to by the shipper.
SEC. 4. That order bills issued in a State for the
transportation of goods to any place in the United
States on the Continent of North America, except
Alaska and Panama, shall not be issued in parts or
sets. If so issued, the carrier issuing them shall be
liable for failure to deliver the goods described therein
to anyone who purchases a part for value in good
faith, even though the purchase be after the delivery
of the goods by the carrier to a holder of one of the
other parts: Provided, however, That nothing contained in this section shall be interpreted or construed
to forbid the issuing of order bills in parts or sets
for such transportation of goods to Alaska, Panama,
Porto Rico, the Philippines, Hawaii, or foreign countries, or to impose the liabilities set forth in this section for so doing.
SEC. 5. That when more than one order bill is issued
in a State for the same goods to be transported to
any place in the United States on the Continent of
North America, except Alaska and Panama, the word
" duplicate," or some other word or words indicating
that the document is not an original bill, shall be
placed plainly upon the face of every such bill except
the one first issued. A carrier shall be liable for the
damage caused by his failure so to do to anyone who
has purchased the bill for value in good faith as an
original, even though the purchase be after the delivery of the goods by the carrier to the holder of the
original bill: Provided, however, That nothing contained in this section shall in such case for such
transportation of goods to Alaska, Panama, Porto
Rico, the Philippines, Hawaii, or foreign countries be
interpreted or construed so as to require the placing
of the word " duplicate" thereon, or to impose the
liabilities set forth in this section for failure so to do.
SEC. 6., That a straight bill shall have placed plainly
upon its face by the carrier issuing it " nonnegotiable "
or "not negotiable."
This section shall not apply, howover, to memoranda or acknowledgments of an informal character.
SEC. 7. That the insertion in an order bill of the
name of a person to be notified of the arrival of the
goods shall not limit the negotiability of the bill or
constitute notice to a purchaser thereof of any rights
or equities of such person in the goods.
SEC. 8. That a carrier, in the absence of some lawful
excuse, is bound to deliver goods upon a demand
made either by the consignee named in the bill for




OCTOBER 1,1916.

the goods or, if the bill is an order bill by the holder
thereof, if such a demand is accompanied by—
(a) An offer in good faith to satisfy the carrier's
lawful lien upon the goods;
(b) Possession of the bill of lading and an offer in
good faith to surrender, properly indorsed, the bill
which was issued for the goods, if the bill is an order
bill; and
(c) A readiness and willingness to sign, when the
goods are delivered, an acknowledgment that they
have been delivered, if such signature is requested by
the carrier.
In case the carrier refuses or fails to deliver the
goods, in compliance with a demand by the consignee
oi holder so accompanied, the burden shall be upon
the carrier to establish the existence of a lawful excuse for such refusal or failure.
SEC. 9. That a carrier is justified, subject to the
provisions of the three following sections, in delivering goods to one who is—
(a) A person lawfully entitled to the possession of
the goods, or
(b) The consignee named in a straight bill for the
goods, or
(c) A person in possession of an order bill for the
goods, by the terms of which the goods are deliverable
to his order; or which has been indorsed to him, or
in blank by the consignee, or by the mediate of immediate indorsee of the consignee.
SEC. 10. That where a carrier delivers goods to one
who is not lawfully entitled to the possession of them,
the carrier shall be liable to anyone having a right
of property or possession in the goods if he delivered
the goods otherwise than as authorized by subdivisions (b) and (c) of the preceding section; and,
though he delivered the goods as authorized by either
of said subdivisions, he shall be so liable if prior to
such delivery he—
(a) Had been requested, by or on behalf of a person having a right of property or possession in the
goods, not to make such delivery, or
(b) Had information at the time of the delivery
that it was to a person not lawfully entitled to the
possession of the goods.
Such request or information, to be effective within
the meaning of this section, must be given to an officer
or agent of the carrier, the actual or apparent scope
of whose duties includes action upon such a request
or information, and must be given in time to enable
the officer or agent to whom it is given, acting with
reasonable diligence, to stop delivery of the goods.
SEC. 11. That except as provided in section twentysix, and except when compelled by legal process, if a
carrier delivers goods for which an order bill had
been issued, the negotiation of which would transfer
the right to the possession of the goods, and fails to

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

517

SEC. 16. That no title to goods or right to their postake up and cancel the bill, such carrier shall be liable for failure to deliver the goods to anyone who session asserted by a carrier for his own benefit shall
for value and in good faith purchases such bill, excuse him from liability for refusing to deliver the
whether such purchaser acquired title to the bill be- goods according to the terms of a bill issued for them,
fore or after the delivery of the goods by the carrier unless such title or right is derived directly or indiand notwithstanding delivery was made to the person rectly from a transfer made by the consignor or consignee after the shipment, or from the carrier's lien.
entitled thereto.
SEC. 17. That if more than one person claim the
SEC. 12. That except as provided in section twentysix, and except when compelled by legal process, if a title or possession of goods, the carrier may require
carrier delivers part of the goods for which an order all known claimants to interplead, either as a defense
to an action brought against him for nondelivery of
bill had been issued and fails either—
the goods or as an original suit, whichever is appro(a) To take up and cancel the bill, or
(b) To place plainly upon it a statement that a priate.
portion of the goods has been delivered with a descripSEC. 18. That if some one other than the consignee
tion which may be in general terms either of the goods or the person in possession of the bill has a claim to
or packages that have been so delivered or of the the title or possession of the goods, and the carrier
goods or packages which still remain in the carrier's has information of such claim, the carrier shall be
possession, he shall be liable for failure to deliver all excu'sed from liability for refusing to deliver the
the goods specified in the bill to anyone who for value goods, either to the consignee or person in possession
and in good faith purchases it, whether such pur- of the bill or to the adverse claimant, until the carchaser acquired title to it before or after the delivery rier has had a reasonable time to ascertain the validof any portion of the goods by the carrier, and not- ity of the adverse claim or to bring legal proceedings
withstanding such delivery was made to the person to compel all claimants to interplead.
entitled thereto.
SEC. 19. That except as provided in the two precedSEC. 13. That any alteration, addition, or erasure ing sections and in section nine, no right or title of
in a bill after its issue without authority from the a third person, unless enforced by legal process, shall
carrier issuing the same, either in writing or noted be a defense to an action brought by the consignee of
on the bill, shall be void, whatever be the nature and a straight bill or by the holder of an order bill against
purpose of the change, and the bill shall be enforceable the carrier for failure to deliver the goods on demand.
according to its original tenor.
SEC. 20. That when goods are loaded by a carrier
SEC. 14. That where an order bill has been lost, such carrier shall count the packages of goods, if
stolen, or destroyed a court of competent jurisdiction package freight, and ascertain the kind and quantity
may order the delivery of the goods upon satisfactory if bulk freight, and such carrier shall not, in such
proof of such loss, theft, or destruction and upon the cases, insert in the bill of lading or in any notice,
giving of a bond, with sufficient surety, to be ap- receipt, contract, rule, regulation, or tariff, " Shipproved by the court, to protect the carrier or any per's weight, load, and count," or other words of like
person injured by such delivery from any liability or purport, indicating that the goods were loaded by
loss incurred by reason of the original bill remaining the shipper and the description of them made by him
outstanding. The court may also in its discretion or in case of bulk freight and freight not concealed
order the payment of the carrier's reasonable costs by packages the description made by him. If so inand counsel fees: Provided, a voluntary indemnifying serted, contrary to the provisions of this section, said
bond without order of court shall be binding on the words shall be treated as null and void and as if not
parties thereto.
inserted therein.
The delivery of the goods under an order of the
SEC. 21. That when package freight or bulk freight
court, as provided in this section, shall not relieve the is loaded by a shipper and the goods are described in
carrier from liability to a person to whom the order a bill of lading merely by a statement of marks or
bill has been or shall be negotiated for value without labels upon them or upon packages containing them,
notice of the proceedings or of the delivery of the or by a statement that the goods are said to be goods
goods.
of a certain kind or quantity, or in a certain condiSEC. 15. That a bill, upon the face of which the tion, or it is stated in the bill of lading that packages
word "duplicate" or some other word or words indi- are said to contain goods of a certain kind or quantity
cating that the document is not an original bill is or in a certain condition, or that the contents or conplaced, plainly shall impose upon the carrier issuing dition of the contents of packages are unknown, or
the same the liability of one who represents and war- words of like purport are contained in the bill of ladrants that such bill is an accurate copy of an original ing, such statements, if true, shall not make liable the
bill properly issued, but no other liability.
carrier issuing the bill of lading, although the goods




518

FEDERAL RESERVE BULLETIN.

are not of the kind or quantity or in the condition
which the marks or labels upon them indicate, or of
the kind or quantity or in the condition they were said
to be by the consignor. The carrier may also by inserting in the bill of lading the words " Shipper's
weight, load, and count," or other words of like purport indicate that the goods were loaded by the shipper and the description of them made by him; and if
such statement be true, the carrier shall not be liable
for damages caused by the improper loading or by the
nonreceipt or by the misdescription of the goods described in the bill of lading: Provided, however,
Where the shipper of bulk freight installs and maintains adequate facilities for weighing such freight,
and the same are available to the carrier, then the
carrier, upon written request of such shipper and when
given a reasonable opportunity so to do, shall ascertain the kind and quantity of bulk freight within a
reasonable time after such written request, and the
. carriers shall not in such cases insert in the bill of
lading the words " Shipper's weight," or other words
of like purport, and if so inserted contrary to the provisions of this section, said words shall be treated as
null and void and as if not inserted therein.
SEC. 22. That if a bill of lading has been issued by
a carrier or on his behalf by an agent or employee
the scope of whose actual or apparent authority includes the receiving of goods and issuing bills of lading
therefor for transportation in commerce among the
several States and with foreign nations, the carrier
shall be liable to (a) the owner of goods covered by
a straight bill subject to existing right of stoppage
in transitu or (b) the holder of an order bill, who
has given value in good faith, relying upon the description therein of the goods, for damages caused by
the nonreceipt by the carrier of all or part of the
goods or their failure to correspond with the description thereof in the bill at the time of its issue.
SEC. 23. That if goods are delivered to a carrier
by the owner or by a person whose act in conveying
the title to them to a purchaser for value in good faith
would bind the owner, and an order bill is issued for
them, they can not thereafter, while in the possession
of the carrier, be attached by garnishment or otherwise or be levied upon under an execution unless
the bill be first surrendered to the carrier or its negotiation enjoined. The carrier shall in no such case
be compelled to deliver the actual possession of the
goods until the bill is surrendered to him or impounded by the court.
SEC. 24. That a creditor whose debtor is the owner
of an order bill shall be entitled to such aid from
courts of appropriate jurisdiction by injunction and
otherwise in attaching such bill or in satisfying the
claim by means thereof as is allowed at law or in
equity in regard to property which can not readily
be attached or levied upon by ordinary legal process.




OCTOBER 1,1916.

SEC. 25. That if an order bill is issued the carrier
shall have a lien on the goods therein mentioned for
all charges on those goods for freight, storage, demurrage and terminal charges, and expenses necessary for the preservation of the goods or incident to
their transportation subsequent to the date of the bill
and all other charges incurred in transportation and
delivery, unless the bill expressly enumerates other
charges for which a lien is claimed. In such case
there shall also be a lien for the charges enumerated
so far as they are allowed by law and the contract between the consignor and the carrier.
SEC. 26. That after goods have been lawfully sold to
satisfy a carrier's lien, or because they have not been
claimed, or because they are perishable or hazardous,
the carrier shall not thereafter be liable for failure
to deliver the goods themselves to the consignee or
owner of the goods, or to a holder of the bill given
for the goods when they were shipped, even if such bill
be an order bill.
SEC. 27. That an order bill may be negotiated by
delivery where, by the terms of the bill, the carrier
undertakes to deliver the goods to the order of a specified person, and such person or a subsequent indorsee
of the bill has indorsed it in blank.
SEC. 28. That an order bill may be negotiated by
the indorsement of the person to whose order the goods
are deliverable by the tenor of the bill. Such indorsement may be in blank or to a specified person. If
indorsed to a specified person, it may be negotiated
again by the indorsement of such person in blank or
to another specified person. Subsequent negotiation
may be made in like manner.
SEC. 29.. That a bill may be transferred by the holder
by delivery, accompanied with an agreement, express
or implied, to transfer the title to the bill or to the
goods represented thereby. A straight bill can not
be negotiated free from existing equities, and the indorsement of such a bill gives the transferee no additional right.
SEC. 30. That an order bill may be negotiated by
any person in possession of the same, however such
possession may have been acquired, if by the terms
of the bill the carrier undertakes to deliver the goods
to the order of such person, or if at the time of negotiation the bill is in such form that it may be negotiated by delivery.
SEC. 31. That a person to whom an order bill has
been duly negotiated acquires thereby—
(a) Such title to the goods as the person negotiating the bill to him had or had ability to convey to
a purchaser in good faith for value, and also such
title to the goods as the consignee and consignor had
or had power to convey to a purchaser in good faith
for value; and
(b) The direct obligation of the carrier to hold possession of the goods for him according to the terms

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

of the bill as fully as if the carrier had contracted
directly with him.
SEC. 32. That a person to whom a bill has been
transferred, but not negotiated, acquires thereby as
against the transferor the title to the goods, subject
to the terms of any agreenient with the transferor.
If the bill is a straight bill such person also acquires
the right to notify the carrier of the transfer to him
of such bill and thereby to become the direct obligee
of whatever obligations the carrier owed to the transferor of the bill immediately before the notification.
Prior to the notification of the carrier by the transferor or transferee of a straight bill the title of the
transferee to the goods and the right to acquire the
obligation of the carrier may be defeated by garnishment or by attachment or execution upon the goods
by a creditor of the transferor, or by a notification to
the carrier by the transferor or a subsequent purchaser from the transferor of a subsequent sale of
the goods by the transferor.
A carrier has not received notification within the
meaning of this section unless an officer or agent of
the carrier, the actual or apparent scope of whose
duties includes action upon such a notification, has
been notified; and no notification shall be effective
until the officer or agent to whom it is given has had
time, with the exercise of reasonable diligence, to
communicate with the agent or agents having actual
possession or control of the goods.
SEC. 33. That where an order bill is transferred for
value by delivery, and the indorsement of the transferor is essential for negotiation, the transferee acquires a right against the transferor to compel him to
indorse the bill, unless a contrary intention appears.
The negotiation shall take effect as of the time when
the indorsement is actually made. This obligation
may be specifically enforced.
SEC. 34. That a person who negotiates or transfers
for value a bill by indorsement or delivery, unless a
contrary intention appears, warrants—
(a) That the bill is genuine;
(b) That he has a legal right to transfer it;
(c) That he has knowledge of no fact which would
impair the validity or worth of the bill;
(d) That he has a right to transfer the title to the
goods, and that the goods are merchantable or fit for
a particular purpose whenever such warranties would
have been implied if the contract of the parties had
been to transfer without a bill the goods represented
thereby.
SEC. 35. That the indorsement of a bill shall not
make the indorser liable for any failure on the part
of the carrier or previous indorsers of the bill to
fulfill their respective obligations.
SEC. 36. That a mortgagee or pledgee or other
holder of a bill for security who in good faith de62049—-16-—3




519

mands or receives payment of the debt for which such
bill is security, whether from a party to a draft drawn
for such debt or from any other person, shall not be
deemed by so doing to represent or warrant the
genuineness of such bill or the quantity or quality of
the goods therein described.
SEC. 37. That the validity of the negotiation of a
bill is not impaired by the fact that such negotiation
was a breach of duty on the part of the person making the negotiation, or by the fact that the owner of
the bill was deprived of the possession of the same by
fraud, accident, mistake, duress, loss, theft, or conversion, if the person to whom the bill was negotiated,
or a person to whom the bill was subsequently negotiated, gave value therefor in good faith, without
notice of the breach of duty, or fraud, accident, mistake, duress, loss, theft, or conversion.
SEC. 38. That where a person, having sold, mortgaged, or pledged goods which are in a carrier's possession and for which an order bill has been issued,
or having sold, mortgaged, or pledged the order bill
representing such goods, continues in possession of the
order bill, the subsequent negotiation thereof by that
person under any sale, pledge, or other disposition
thereof to any person receiving the same in good
faith, for value and without notice of the previous
sale, shall have the same effect as if the first purchaser of the goods or bill had expressly authorized
the subsequent negotiation.
SEC. 39. That where an order bill has been issued
for goods no seller's lien or right of stoppage in
transitu shall defeat the rights of any purchaser for
value in good faith to whom such bill has been nego*
tiated, whether such negotiation be prior or subsequent to the notification to the carrier who issued
such bill of the seller's claim to a lien or right of
stoppage in transitu. Nor shall the carrier be obliged
to deliver or justified in delivering the goods to an
unpaid seller unless such bill is first surrendered for
cancellation.
SEC. 40. That, except as provided in section thirtynine, nothing in this Act shall limit the rights and
remedies of a mortgagee or lien holder whose mortgage or lien on goods would be valid, apart from this
Act, as against one who for value and in good faith
purchased from the owner, immediately prior to the
time of their delivery to the carrier, the goods which
are subject to the mortgage or lien and obtained
possession of them.
SEC. 41. That any person who, knowingly or with
intent to defraud, falsely makes, alters, forges, counterfeits, prints or photographs any bill of lading purporting to represent goods received for shipment
among the several States or with foreign nations, or
with like intent utters or publishes as true and genuine any such falsely altered, forged, counterfeited,

520

FEDERAL RESERVE BULLETIN.

falsely printed or photographed bill of lading, knowing it to be falsely altered, forged, counterfeited,
falsely printed or photographed, or aids in making,
altering, forging, counterfeiting, printing or photographing, or uttering or publishing the same, or issues
or aids in issuing or procuring the issue of, or negotiates or transfers for value a bill which contains a
false statement as to the receipt of the goods, or as
to any other matter, or who, with intent to defraud,
violates, or fails to comply with, or aids in any violation of, or failure to comply with any provision of
this Act, shall be guilty of a misdemeanor, and, upon
conviction, shall be punished for each offense by imprisonment not exceeding five years, or by a fine not
exceeding $5,000, or both.
SEC. 42. First. That in this Act, unless the context
of subject matter otherwise requires—
" Action " includes counterclaim, set-off, and suit in
equity.
" Bill" means bill of lading governed by this Act.
" Consignee " means the person named in the bill as
the person to whom delivery of the goods is to be
made.
" Consignor " means the person named in the bill as
the person from whom the goods have been received
for shipment.
" Goods " means merchandise or chattels in course
of transportation or which have been or are about to
be transported.
" Holder " of a bill means a person who has both
actual possession of such bill and a right of property
therein.
" Order" means an order by indorsement on the
bill.
" Person " includes a corporation or partnership, or
two or more persons having a joint or common interest.
To "purchase" includes to take as mortgagee and
to take as pledgee.
" State" includes any Territory, District, insular
possession, or isthmian possession.
SEC. 43. That the provisions of this Act do not apply to bills made and delivered prior to the taking
effect thereof.
SEC. 44. That the provisions and each part thereof
and the sections and each part thereof of this Act
are independent and severable, and the declaring of
any provision or part thereof, or provisions or part
thereof, or section or part thereof, or sections or part
thereof, unconstitutional shall not impair or render
unconstitutional any other provision or part thereof
or section or part thereof.
SEC. 45. That this Act shall take effect and be in
force on and after the first day of January next after
its passage.
Approved, August 29, 1916.




OCTOBER 1,1916.

GOLD SETTLEMENT FUND.
With the growth of the Federal Eeserve
Banks' check collection operations there has
come, as a necessary consequence, a very heavy
increase in the volume of transactions settled
through the Gold Settlement Fund. In the
last issue of the Bulletin a record clearing of
$103,761,000 on August 24 was reported, but
since that date each weekly settlement has
been larger than the one preceding, that of
September 21 amounting to $158,558,000, with
net balances to be settled by transfers of ownership of gold of only $9,539,000, or approximately 6 per cent.
During the four weeks from August 25 to
September 21 $30,720,000 was transferred from
the credit of the Federal Eeserve Bank of
New York to other Federal Reserve Banks, this
movement being due in large part to demands
for Federal Reserve notes for crop moving.
Between August 25 and September 23 the
amount of gold held by the Federal Reserve
Agents against Federal Reserve notes in circulation increased $29,276,000, of which $9,524,000 represented the increase in the holdings of the Federal Reserve Agent at New
York.
The Gold Settlement Fund now stands at
$121,230,000 and the Federal Reserve Agents'
Fund at $48,830,000, a total of $170,060,000.
Amount of clearings and transfers, Federal Reserve
Banks, from Aug. 25, 1916, to Sept. 21, 1916, inclu[In thousands of dollars.]

Total
clearings.

Balances.

Transfers.

Settlement of—
Aug. 31,1916
Sept. 7,1916
Sept. 14,1916
Sept. 21,1916..

110,592
125,694
125,928
158,558

6,277
22,416
10,889
9,539

5,530
3,400
1,554
2,700

Total
Previously reported

520,772
2,146,296

49,121
217,959

13,184
79,386

Totals since Jan. 1,1916
Total transfers, 1916.
Total for 1915, (including transfers)

2,667,068
92,570
1,052,649

267,080

92,570

Total clearings and transfers
May 20,1915, to July 20,1916..

3,812,287

521

FEDERAL RESERVE BULLETIN.

OCTOBER 1, 1916.

Changes in ownership of gold.
[In thousands of dollars.]

To Aug. 24,1916.

From Aug. 25,1916, to Sept. 21,1916.1

Balance to
credit Aug.
24,1916, plus
Decrease. Increase. net deposits
of gold since
that date.

Federal Reserve Bank o—
f

8,683
4,031
21,278
14,881
29,381

16,466
40,577
16,571
8,578
10,127
3
-2,592
16,579
4,483
3,431
7,345.5
3
- 2 , 716.5
2,381

176,084

121,230

17, 736

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

160,423

15,66*i

176,084

Total

Balance
Sept. 21,
1916.

45,59i
9,158
13,557
11,788

15,815
9,857
17,179
11, 431
13,065
2,870
21,631
2,258
3,525
11,738.5
5,148.5
6, 712
121,230

Total change from
May 20, 1915, t o
Spet. 21,1916.2

Decrease. Increase. Decrease. Increase.

651
30,720

2,225

33,596

17,085
608
2,853
2,938
5,462
5,052

191,143

10,609

94
4,393
7,865
4,331
33,596 . 201,752

46,199
12,011
16,495
17,250
6,458
4,125
25,671
22,746
33, 712
201,752

1
Changes in ownership of gold during period
2
Total changes in ownership of gold equal 5.3
3

Aug. 25,1916, to Sept. 21,1916, equal 6.29 per cent of obligations settled.
per cent of total obligations settled.
Withdrawals have exceeded balance plus deposits.

Gold Settlement Fund—Summary

of transactions, Aug. 25,1916, to Sept. 21,1916.

[In thousands of dollars.]

Federal Reserve Bank
of—

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

16,466
10,577
17,251
9,318
11,507
1,058
16,579
4,343
3,431
11,345.5
4,403.5
4,921

. .

111,200

Total

Federal Reserve Bank
o—
f

Boston
New York
Philadelphia
Cleveland
Atlanta
St Lonis
Kansas Citv
Dallas
San Franci^soo
Total




Balance
last statement,
Aug. 24,
1916.

Balance
last state^
ment,
Aug. 31,
1916.
15,744
11,135
15,773
10,983
11,008
1,259
17,663
3,173
2 774
10,828.5
3,025.5
5,324

- -- 108,690

Transfers.

Gold.
Withdrawn.

Deposited.

Net
Debit. Credit. debits.
3,000

120
200

80
130

1,000
1,500

2,000
3,530

2,972
1,478

2,000
1,170
657

500
30
100

2,820

310

Deposited.

20,000

6,277

22,416

2,900

900
500
240
500

2,400
1,180
1,800
7,080

2,000
20,240

3,400

3,400

Total
debits.

Total
credits.

6,686
21,069
15,336
8,354
7,634
4,938
15,856
13,019
3,670
8,175
3,370
2,485

6,964
18,097
13,857
10,059
9,205
5,139
16,940
11,849
3,013
9,158
3,522
2,788

110,592

110,592

278
1,705
1,571
201
1,084
983
152
303
6,277

15,744
11,135
15,773
10,983
11,008
1,259
17,663
3,173
2,774
10,828.5
3,025.5
5,324
108,690

722
558

1,478
429
1,170
657

4,456

1,705
201
1,084
483
122
303
4,45G

Change in ownerSept. 7,
ship of gold.
1916, balance in
Net fund after
credits. clearing. Decrease. Increase.

Settlement of Sept. 7,1916.

Net
Debit. Credit. debits.

1,200
400
100

5,530

Transfers.

Gold.
Withdrawn.

5,530

Change in ownerAug. 31,
ship of gold.
1916, balance in
Net fund after
credits. clearing. Decrease. Increase,

Settlement of Aug. 31,1916.

22,416

Total
debits.

Total
credits.

9,095
40,289
16,614
7,292
7,283
3,315
15,745
9,870
2,807
7,407
3,322
2,655

9,615
17,873
17,186
9,083
8,793
6,409
17,775
12,047
4,987
12,205
4,719
5,002

572
1,791
1,510
3,094
2,030
2,177
2,180
4,798
1,397
2,347

125,694

125,694

22,416

520

16,264
5,819.
16,345
12,774
11,318
4,853
20,193
5,490
4,454
13,226.5
5,242.5
5,871
121,850

25,316

25,316

520
572
1,791
1,510
3,994
2,530
2,177
1,680
4,798
3,397
2,347
25,316

522

FEDERAL RESERVE BULLETIN.

OCTOBER 1, 1916.

€fold Settlement Fund—Summary of transactions, Aug. 25, 1916, to Sept. 21, 1916—Continued.
Balance
last statement,
Sept. 7,
1916.

Federal Reserve Bank
of—

16,264
5 819
16,345
12,774
11,318
4,853
20,193
5,490
4,454
13 226 5
5,242.5
5,871

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

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

.

.

Balance
last statement,
Sept. 14,
1916.
.

15,787
11,247
16,890
12,287
12 463
3,343
24,180
6,030
2,747
11 311 5
6,294.5
3,590
126,170

Deposited.

Withdrawn.

Total
debits.
8,995
29,531
19,090
9,325
9,446
4,964
13,518
12,074
4,403
9,333
3,040
2,209

10,018
23,405
20,315
9,338
10,521
5,454
17,505
12,668
2,696
7,718
5,522
768

10,889

125,928

125,928

6,126

1,554

70

2," 666"

54
1,707
1,615

300
1,430
1,000

160
10,230

1,554

1,554

Transfers.

Gold.
Deposited.

Withdrawn.

Net
Debit. Credit. debits.

500

1,172
1,890
656

1,500

5,160

Total
debits.

220
1,000

3,549
2,272

1 000

300
3,010

200
2,700

220

1,023
1,225
13
1,075
490
3,987
594
2,482
10,889

15,787
11,247
16,890
12,287
12,463
3,343
24,180
6,030
2,747
11,311.5
6,294.5
3,590

477
4,572

1,707
1,615

1,225
13
1,075
490
3,987
540
2,482

1,441

126,170

9,812

9,812

Changes in ownerSept. 21,
ship of gold.
1916, balance in
Net fund after
credits. clearing. Decrease. Increase.

Settlement of Sept. 21,1916.

j. 200

200
400
1,250

Total
credits.

1,441

1,500

Changes in ownerSept. 14,
ship of gold.
1916, balance in
Net fund after
credits. clearing. Decrease. Increase.

Settlement of Sept. 14,1916.

Net
Debit. Credit. debits.

10,000

680
500

5,910

121,850

Federal Reserve Bank
of—

Transfers.

Gold.

2,700

9,539

Total
credits.

10,695
32,560
20,498
11,419
10,180
5,755
26,278
17,496
5,422
10,300
5,005
2,950

9,523
30,670
20,787
10,763
10,962
6,532
22,729
15,224
6,200
12,027
6,869
6,272

778
1,727
1,864
3,322

158,558

158,558

9,539

289
782

in

28

15,815
9,857
17,179
11,431
13,065
2,870
21,631
2,258
3,525
11,738 5
5,148.5
6,712

1,390
656
2,549
3,772

8,367

121,230

289
782
111
778
727
1,864
3,122
8,367

Federal Reserve Agents' Fund—Summary of transactions Aug. 25, 1916, to Sept. 21, 1916, inclusive.
[In thousands of dollars.]

Federal Reserve Agent at—

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




Week ending Aug. 31,
1916.
Aug. 24,
1916,
balance. With- Depos- Baldrawn. ited.
ance.
2,890
4,000 '•"'366' " " 2 6 6 *
8,400 2,500
3,080
3 050
1,350
5,700
""i,666"
330
"266" 1,300
9,100
37,900

3,000

2,500

Week ending Sept. 7,
1916.
With- Deposdrawn. ited.

2,890
3,900
""i,'266"
5,900
400
3,080
3,050
240
1,350
6,700
*"2*466"
1,430 """366*
100
9 100
800
37,400

540

4,900

Balance.

Week ending Sept. 14,
1916.
With- Deposdrawn. ited.

150
2,890
680
5,100
6,300
'"i,"666"
3,080
2,810
1,350
9,100 """266" """"366"
1,230
1,300
9,900
160
41,760

510

3,280

Week ending Sept. 21,
1916.

With- DeposBalance. drawn. ited.
3,420
5,100
7,300
3,080
2,810
1,350
9,200
2,530
9,740

100

44,530

100

400
1,250

"366"

2,450

4,400

Balance.
3,420
5,500
8,550
3,080
2,710
1,350
9,500
4,980
9,740
48,830

OCTOBEE 1, 1916.

FEDERAL RESERVE BULLETIN.

523

INFORMAL RULINGS OF THE BOARD.
Below are reproduced letters sent out from
time to time over the signatures of the officers
or members of the "Federal Reserve Board
which contain information believed to be of
general interest to Federal Reserve Banks and
member banks of the system:
State Laws and Fiduciary Powers.
In reference to your letter of August 22, relating to the right of national banks to exercise
fiduciary powers in the various States, our
counsel has advised me that the following
States have enacted laws expressly authorizing
national banks to exercise trust powers: Colorado, Indiana, Iowa, Ohio (trustee and registrar only, and then only for over $100,000
capital), South Dakota, Vermont, Virginia,
Washington ($50,000 paid-up capital necessary).
The Federal Reserve Board, however,
adopted the policy a year ago last July of authorizing national banks, otherwise qualified,
to exercise the powers conferred by section
11 (k), unless there is an express provision of
the State law either directly or by necessary
implication prohibiting a national bank from
exercising these powers. In pursuance of that
policy the Board, upon advice of its counsel,
has determined that it would not be in contravention of the laws of the following States, in
addition to those "already mentioned, for a national bank to exercise the fiduciary powers
authorized by section 11 (k).
Alabama, Arizona, Arkansas, California
(registrar only), Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho,
Illinois, Kansas, Kentucky Louisiana, Maine
(trustee, executor, and registrar), Maryland,
Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New
Hampshire (trustee and registrar), New Jersey (if organized prior to Mar. 24, 1899), New
Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island,
South Carolina, Tennessee, Texas, West Virginia, Wisconsin, Wyoming, Utah.

"staples" within the meaning of Regulation
Q, series of 1915.
The term " staples " as used in that regulation is sufficiently comprehensive to include
manufactured goods as well as raw materials
provided the goods in question are nonperishable goods which have a wide ready market.
They must be goods generally produced and
well established in commerce, not an extraordinary or unusual commodity for which there is
no ready market.
The Board is of the opinion that cotton
yarns and flour are " staples " of the kind in*
tended by Regulation Q,
SEPTEMBER 7, 1916.

Fiscal Year and Clayton Act.

I wish to acknowledge receipt of your letter
of September 8 relating to the construction of
section 8 of the Clayton Antitrust Act.
The counsel for the Board is of the opinion
that the term "fiscal year" as used in paragraph 1 of section 8 of the Clayton Act refers
to the fiscal year of the institution of which
the person in question is a director.
If, as I presume, the fiscal year of the member bank under consideration is the calendar
year, the amount of resources of that bank for
the purposes of the Clayton Act is determined
by the average amount of its deposits, capital,
surplus, and undivided profits for the preceding calendar year. If, therefore, the average
resources during the year 1915 were less than
$5,000,000, a director elected in January, 1916,
would be eligible to serve until January, 1917,
provided, of course, there is no other reason
why he should be disqualified.
The provision that if eligible when elected a
director may lawfully continue to serve for
one year after election, even though the resources of the bank increased beyond the
$5,000,000 limit in the meantime, was intended
to cover just such a case as this.
In reference to the second question contained
in your letter, there is nothing in section 8 of
AUGUST 26, 1916.
the Clayton Act which prohibits a person who
is a director or officer of a national bank with
« Staples " Defined.
total resources exceeding $5,000,000 from servI wish to acknowledge receipt of your letter ing at the same time as a director of a State
of September 2 asking whether manufactured institution with resources less than that
goods such as cotton yarns and flour are amount, provided (1) that the State institu-




524

FEDERAL RESERVE BULLETIN.

tion is not a member of the Federal Reserve
system, and (2) 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
less than 200,000 inhabitants.
You are, of course, aware of the fact that a
director of a national bank with resources aggregating more than $5,000,000 can not, under
the terms of the original Clayton Act, serve
at the same time as a director of another member bank. The Kern amendment, however, authorizes the Federal Reserve Board to permit
such a director to serve on the boards of not
more than two other banks which come within
the prohibitions of the original Act, provided
they are not in substantial competition with
the member bank.
SEPTEMBER 13,

OCTOBER 1,1916.

" Believing that trade acceptances are of assistance to the buyer and seller alike, we invite
our customers to cooperate with us in their
use. We offer our regular cash discount to customers who, immediately on receipt of goods,
send us their 30-day acceptances on the form
attached, which has been approved by the Federal Reserve Banks."
This is the kind of a campaign of education
which, as it spreads, will ultimately produce a
considerable effect in revising borrowing practices away from one-name paper to the highly
desirable trade acceptance.
SEPTEMBER 20,

1916.

1916.
Simple Written Indorsement by Member Banks.

Bonds Maturing in Six Months.

Receipt is acknowledged of your letter of
September 5, inquiring whether bonds of your
city, maturing April 1, 1917, could be purchased by the Federal Reserve Bank on or after
October 1, notwithstanding the fact that these
bonds, when originally issued, had a maturity
of more than six months. You are advised
that the Board ruled in August, 1915, that the
mere fact that a bond had a maturity of more
than six months when issued would not bar the
investment in such bond by a Federal Reserve
Bank if at the time of purchase its maturity
is less than six months, provided that such
bond complies with the terms of the said ruling, which you will find on page 221 of the
1915 issue of the Federal Reserve Bulletin.
SEPTEMBER 14,

1916.

Trade Acceptances.

Knowing the interest you and the governor of
your bank have felt in the development of trade
acceptance paper, I thought you would be interested in hearing that large commercial concerns in other parts of the country are initiating a practice similar to that of a warehouse
and lumber company in your district, of allowing a discount where settlement is, made by
trade acceptance. I quote for your information
from the circular of a New York company,
which has recently come to hand, as follows:
"Our terms are 1 per cent for cash in 10
days or 1 per cent for 30 days' trade acceptance, in your option, otherwise strictly net.




Question has been raised as to whether the
recent amendment to the Federal Reserve Act
reading in part as follows:
" Upon the indorsement of any of its member banks, which shall be deemed a waiver of
demand, notice, and protest by such bank as to
its own indorsement exclusively, any Federal
Reserve Bank may discount notes, drafts, and
bills of exchange arising out of actual commercial transactions; * * *"
means that hereafter nothing will be required
of member banks in the way of indorsement
upon paper offered for discount except their
simple written indorsement.
You are advised, for your information and
the information of any member banks which
may be in doubt as to the procedure, that such
simple written indorsement will be regarded as
satisfactory and as coming within the terms
of the law.
SEPTEMBER 27,

1916.

Minimum Loan Price on Cotton.

I have your letter of the 18th instant, inclosing copy of a communication in which the
suggestion is made that legislation should be
had fixing or empowering the Federal Reserve
Board to fix a minimum price for cotton as a
basis for loans secured by that commodity.
You ask for an expression of opinion as to the
practicability of this suggestion.

OCTOBER 1,

1916.

I take it, of course, that it is not contemplated to attempt to compel financial institutions to make loans on cotton at a stated price,
as it would be impossible to force private corporations to lend money on paper which they
might regard as being inadequately secured,
so I presume that the proposition really is that
the Federal Reserve Act be amended so as to
compel Federal Eeserve Banks to make loans
on cotton direct to producers on an arbitrary
valuation, to be fixed without reference to actual market quotations.
Without reference to the economic aspects
of the case, I think that such legislation would
lead to endless complications, as growers of
tobacco and other staple crops, coal operators^
lumbermen, and manufacturers would press
their claims for similar favors; and without
doubt many member banks, which would feel
that the possibility of a wholesale investment
of the reserve funds of the country in a valorization scheme would be perilous in the extreme, as well as an utter perversion of the
underlying principles of the Federal Eeserve
Act, would withdraw and the Federal Eeserve
System would be disintegrated at the outset.
While, as you know, I have every sympathy
with the cotton grower and am anxious at all
times to see farmers receive fair prices for
their products, I do not believe that any attempt at valorization of cotton or any other
staple commodity can possibly succeed unless
production, should be regulated most rigidly
by legislation. I do not believe that such action would command popular support, nor
would I regard it as at all consistent with our
principles of government, and I will say
frankly that the suggestion seems to me to be
economically unsound and thoroughly impracticable. The price of cotton or of any other
commodity must inevitably be controlled by
the laws of supply and demand. What your
correspondent seems desirous of accomplishing
is to effect some way by which an arbitrary
minimum market value or price may be created
by governmental interference. Even though
it were possible to establish a minimum price
at which cotton might be taken as security for
loans, the result would be directly opposite
from that desired, for, should the minimum
valuation for loans be fixed at a point low
enough to make them reasonably safe, the
effect would probably be to depreciate the




525

FEDERAL RESERVE BULLETIN.

market value of cotton; and if, on the other
hand, the price should be fixed at a point high
enough to give the grower what he would consider a fair margin of profit above the cost of
production, there would undoubtedly be times
when the Federal Eeserve Banks would be the
virtual owners of large amounts of cotton,
which they could not dispose of except at a
heavy loss, which might, and probably would,
result in the insolvency of the Federal Eeserve
Banks.
The fallacy of the idea that prices can be
fixed by legislation has been demonstrated in
the recent history of this country. We remember the persistent efforts that were made
for a score of years to sustain the price of
silver through governmental aid. From the
year 1875, when the market price of silver
began to fall below its coinage value, up to
1896 a large part of the American people were
obsessed with the idea that the price of silver
could be maintained by legislation. First we
had the Bland Act, in 1878, under which silver
bullion was purchased in amounts sufficient
for the coinage of $2,000,000 per month, and,
that device having proved futile, we had next
the act of July 14, 1890, commonly known as
the Sherman silver-purchase law, under which
4,500,000 ounces of silver bullion were purchased each month, being paid for by issues
of legal-tender coin certificates. Yet it is a
matter of common knowledge that, in spite of
these heroic efforts to overcome the inflexible
law of supply and demand, the price of silver
steadily declined from $1.29 per ounce to about
47 cents per ounce and that it did not advance
again until long after all attempts to support
the market artificially had been abandoned
and the economic law which governs the price
of silver, as well as that of all other commodities, was given a free hand to exert itself.
I think that lack of adequate transportation
facilities and high ocean freights react against
the farmers and affect the prices that they receive for cotton, and it seems to me that we
should endeavor to increase our carrying capacity; but I can see no merit whatever in any
plan which contemplates establishing by law
a minimum value as a basis for loans, and
earnestly hope, therefore, that no serious attempt will be made to legislate along the lines
suggested.
SEPTEMBER 20,

1916.

526

FEDERAL RESERVE BULLETIN.

OCTOBER 1,1916.

LAW DEPARTMENT.
The following opinions of counsel have been
If the maker of this note used the proceeds
authorized for publication by the Board since to purchase millet seed which he intends to
the last edition of the Bulletin:
sell to others, his purpose was purely commercial and not agricultural, although the seed
Agricultural Products or Implements.
may ultimately be intended for use in agriculThe purchase or sale of an agricultural product, or
of implements or other commodities used in agricul- ture. The purchase and sale of an agriculture, constitutes a commercial transaction. Where tural product or of implements or other comthe proceeds of a note made by a merchant are used modities used in agriculture constitute a comto purchase millet seed to be later retailed or sold, mercial transaction.
such a note can not be treated as one given for an
In the present case, therefore, the fact that
agricultural purpose and can not be discounted by a
the proceeds were used to purchase millet seed
Federal Reserve Bank if it has a maturity at time of
would not make the note in question eligible for
discount of more than 90 days.
discount with a maturity of more than 90 days
if, as the correspondence indicates, the millet
SEPTEMBER 15. 1916,
SIR: The opinion of this office has been re- seed was purchased with the view of selling it
quested on the question of whether or not a later to others.
Eespectfully,
note given by a merchant for $2,500, the proM. C. ELLIOTT, Counsel.
ceeds of which were used to purchase millet
To Hon. W. P. G. HARDING,
seed, may be treated as having been drawn for
Governor Federal Reserve Board,
agricultural purposes and may, therefore, be
discounted with a maturity at time of discount
of more than 90 days.
Clayton Act.
Section 13 of the Federal Eeserve Act proA State bank or trust company which is incorpovides in part that—
rated under the laws of a State, but which is doing
* * * Any Federal Eeserve Bank may business in the District of Columbia, subject to limitadiscount notes, drafts, and bills of exchange tions and restrictions imposed by the acts of Congress,
arising out of actual commercial transactions; is subject to the provisions of section 8 of the Claythat is, notes, drafts, and bills of exchange ton Act which relate to banks organized or operating
issued or drawn for agricultural, industrial, or under the laws of the United States.
commercial purposes * * *. Notes, drafts,
SEPTEMBER 12, 1916.
and bills admitted to discount under the terms
SIR: There has been referred to this office
of this paragraph must have a maturity at the
time of discount of not more than ninety days: for an opinion the question of whether a perProvided, That notes, drafts, and bills drawn son may, under the Clayton Antitrust Act and
or issued for agricultural purposes or based on
live stock and having a maturity not exceeding the Kern amendment thereto, serve at the same
six months may be discounted in an amount to time as an officer, director, or employee of two
be limited to a percentage of the capital of the nonmember banks or trust companies doing
Federal Eeserve Bank, to be ascertained and business in the city of Washington, D. C, and
fixed by the Federal Eeserve Board.
organized either under the Code of Law for
The only question to be determined, there- the District of Columbia or under the laws of
fore, appears to be whether the proceeds of some State of the Union.
this note were used or are to be used for an
Section 8 of the original Clayton Act proagricultural purpose or whether they were hibits a person from serving at the same time
used or are to be used for a commercial pur- as an officer, director, or employee of a bank,
pose.
banking association, or trust company "organ-




OCTOBER 1,

FEDERAL RESERVE BULLETIN.

1916.

ized or operating under the laws of the United
States" in a city of over 200,000 inhabitants
and as an officer, director, or employee of any
other bank, banking association, or trust company located in the same place.
As Washington is a city of over 200,000 inhabitants, this prohibition would apply, provided nonmember banks or trust companies
doing business therein and organized either
under the laws of the District of Columbia or
of some State are banks or trust companies
" organized or operating under the laws of the
United States" within the meaning of the
Clayton Act.
As the Code of Law for the District of Columbia is an act of Congress approved March
3, 1901, and amended by subsequent acts of
Congress, banks and trust companies organized
and operating thereunder would clearly be organized and operating under the laws of the
United States.
Subchapter XI, section 747, of the Code of
the District of Columbia, provides that—
No corporation or company organized by
virtue of the laws of any of the States of this
Union and having its principal place of business within the District of Columbia shall
carry on in the District of Columbia any of
the kinds of business named in this subchapter
without strict compliance in all particulars
with the provisions of this subchapter for the
government of such corporations formed under
it, and each one of the officers of the corporation or company so offending shall be punished
by fine not exceeding one year, or by both fine
and imprisonment, in the discretion of the
court.
Subchapter X I deals specifically with the
business of trust companies, and it is clear that
such companies, whether organized under State
or Federal law, are subject in their operations
to the laws of the District, and are, therefore,
" operating under the laws of the United
States" within the meaning of the Clayton
Act.




62049—16

£

527

Subchapter X, sections 713 and 714, of the
Code of the District of Columbia, provides in
part as follows:
SEC. 713. All savings banks, or savings companies, or trust companies, or other banking
institutions, organized under authority of any
act of Congress to do business in the District
of Columbia, or organized by virtue of the laws
of any of the States of this Union, and having
an office or banking house located within the
District of Columbia where deposits or savings
are received, shall be, and are hereby, required
to make to the Comptroller of the Currency
and to publish all the reports which national
banking associations are required to make and
publish * * *. And the comptroller shall
have power, when in his opinion it is necessary,
to take possession of any such bank or company, for the reasons and in the manner and
to the same extent as are provided in the laws
of the United States with respect to national
banks.
SEC. 714. The Comptroller of the Currency,
in addition to the powers now conferred upon
him by law for the examination of national
banks, is hereby further authorized, whenever
he may deem it useful, to cause examination to
be made into the condition of any bank mentioned in the preceding section. It is apparent, therefore^ that savings companies and other banking institutions organized under the laws of any of the States of the
Union and doing business in the District of
Columbia are subject to certain laws of the
United States. It is true that such banks derive their corporate powers from the States in
which they are created, but in conducting their
operations in the District of Columbia they are
subject to the laws of the United States which
apply to such institutions. Their status is
therefore similar to that of State banks and
trust companies which become members of the
Federal Reserve System and which exercise
powers granted them by the States in which
they are domiciled, subject, however, to the
limitations and restrictions imposed by the
Federal Reserve Act on member banks, and

528

FEDERAL RESERVE BULLETIN.

which to this extent may be said to be operating under the laws of the United States.
It will be recalled that the Clayton Act applies to banks which are either organized or
which are operating under the laws of the
United States and, in the opinion of this office,
savings banks, trust companies, or other banking institutions doing business in the District
of Columbia are subject to the provisions of
the Clayton Act.
The Kern amendment provides that—
Nothing in this Act shall prohibit any officer,
director, or employee of any member bank or
class A director of a Federal Reserve Bank,
who shall first procure the consent of the Federal Reserve Board * * *•• from being an
officer, director, or employee of not more than
two other banks * * *, whether organized
under the laws of the United States or any
State, if such other bank * * * is not in




OCTOBER 1,1916.

substantial competition with such member
bank.
It will be observed that this amendment relates specifically to member banks, and while
a director of a member bank in the city of
Washington might, with the consent of the
Federal Reserve Board, serve on not more than
two other banks in this city, provided such
banks are not in substantial competition with
a member bank, the Board could not give its
consent to an officer or director of a nonmember bank to serve at the same time with another
nonmember bank if both are located in the city
of Washington.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. W. P. G. HARDING,

Governor Federal Reserve Board.

OCTOBER 1, 1916.

FEDERAL KESEEVE BULLETIN.

529

CIRCULARS AND REGULATIONS.
SPECIAL INSTRUCTIONS NO. 2 OF 1916.

WASHINGTON, September 15, 1916.
SPECIAL INSTRUCTIONS TO FEDERAL RESERVE BANKS AND
TO FEDERAL RESERVE AGENTS.

For the convenience of the Federal Reserve Banks
and member banks, all regulations issued for the guidance of member banks have been consolidated and
issued by the Board with Circular No. 2, series of
1916. While this circular and the regulations which
accompany it will govern the operations of Federal
Reserve Banks with their members, they contain only
such regulations as are of interest to member banks
or to the general public and carry none of the special
instructions intended solely for the guidance of Federal Reserve Banks. They are, therefore, supplemented by the special instructions and regulations
herein contained.
A. Discount and purchase of bankers' acceptances.
(a) Bankers' acceptances, other than those of a
member bank, whether foreign or domestic, shall be
eligible for discount or purchase, under sections 13 or
14, respectively, only after the acceptors shall have
agreed in writing to furnish the Federal Reserve
Bank of their respective districts, upon request, information concerning the nature of the transactions
against which acceptances have been made.
(b) The aggregate of bills, domestic and foreign, of
any one drawer, drawn on and accepted by any bank
or trust company and purchased or discounted by a
Federal Reserve Bank, shall at no time exceed 10
per cent of the unimpaired capital and surplus of
such bank or trust company, but this restriction shall
not apply to the purchase or discount of bills drawn
in good faith against actually existing values; that
is, bills the acceptor of which is secured by a lien on
or by a transfer of title to the goods to be transported, or by other adequate security, such as a warehouse receipt, or the pledge of goods actually sold.
(c) The aggregate of bills, domestic and foreign, of
any one drawer, drawn on and accepted by any firm,
person, company, or corporation (other than a bank
or trust company), engaged in the business of discounting or accepting, and purchased or discounted by
a Federal Reserve Bank, shall at no time exceed a
sum equal to a definite percentage of the paid-in
capital of such Federal Reserve Bank, such percentage to be fixed from time to time by the Federal Reserve Board; but this restriction shall not apply "to




the purchase or discount of bills drawn in good faith
against actually existing values; that is, bills the acceptor of which is secured by a lien on or by a transfer of title to the goods to be transported or by other
adequate security, such as a warehouse receipt, or
the pledge of goods actually sold.
{d) The aggregate of bankers' acceptances, domestic and foreign, made by any one firm, person, company, or corporation (other than a bank or trust company) engaged in the business of discounting or accepting, discounted or purchased by a Federal Reserve Bank without the indorsement of a member
bank, shall at no time exceed a sum equal to a definite percentage of the paid-in capital of such Federal
Reserve Bank; such percentage to be fixed from time
to time by the Federal Reserve Board.
(e) No Federal Reserve Bank shall purchase a domestic or foreign acceptance of a " banker" other
than a member bank which does not bear the indorse?*
ment of a member bank, unless there is furnished a
satisfactory statement of the financial condition of
the acceptor in form to be approved by the Federal
Reserve Board.
(/) In purchasing or discounting bankers' acceptances or other bills which are secured by warehouse
receipts, etc., the Federal Reserve Bank should make
sure that the receipt is issued by a warehouse which
is independent of the borrower.
(g) Federal Reserve Banks should bear in mind
that preference should be given wherever possible to
acceptances indorsed by a member bank, discounted
under section 13, because of the additional protection
that such indorsement affords.
B. Purchase of cable transfers and foreign' bills of
exchange.
In order to carry on open-market transactions in
cable transfers and foreign bills of exchange (including foreign bankers' acceptances)—that is, payments
to be made in, or bills payable in, foreign countries—
it will be necessary for Federal Reserve Banks to
open accounts with correspondents or establish agencies in foreign countries. Such bills of exchange arid
foreign acceptances must comply with the applicable
requirements of sections 13 and 14. Inasmuch as
the law prescribes that these foreign accounts and
accounts opened by Federal Reserve Banks for such
foreign correspondents or agents are to be established
only with the consent of the Federal Reserve Board,
Federal Reserve Banks will be required to communicate with the Federal Reserve Board whenever they
are ready to enter these foreign fields.

530

FEDERAL RESERVE BULLETIN.

The Federal Reserve Board realizes that in dealing
in foreign exchange the Federal Reserve Banks must
necessarily have wide discretion in determining the
rates at which they will buy or sell. It is not necessary that foreign bills shall have been actually accepted at the time of purchase. The Federal Reserve
Board, however, will require that unaccepted " long
bills," payable in foreign countries, when purchased,
unless secured by documents, shall bear one satisfactory indorsement other than those of the drawer
or acceptor, preferably that of a banker. Federal Reserve Banks should exercise due caution in dealing
in foreign bills, and boards of directors should fix a
limit within which the acceptances or bills of a single
firm may be taken.
C. Purchase of domestic bills of exchange.
(a) Before purchasing domestic bills of exchange
under the provisions of section 14, the Federal Reserve
Bank must secure statements concerning the condition and standing of the drawer of the paper, and, if
possible, also of the acceptor of the* bill, sufficient to
satisfy the bank as to the nature and quality of the
paper to be purchased.
(b) No Federal Reserve Bank will be permitted
to purchase bills of any one drawer, or issued upon any
one maker to an amount to exceed in the aggregate a
percentage of its capital, to be fixed from time to time
by the Federal Reserve Board, except when secured
by approved warehouse receipts, bills of lading, or
other such documents covering readily marketable
goods. The aggregate amount drawn on any one acceptor, purchased by Federal Reserve Banks, shall
not exceed a reasonable percentage of the stated net
worth of the parties whose names appear upon the
paper.
D. Rediscounts of agricultural paper.
Any Federal Reserve Bank may discount notes,
drafts, and bills drawn or issued for agricultural
purposes or based on live stock and having a maturity
not exceeding six months, exclusive of days of grace,
up to an amount not exceeding 5 per cent of its assets.
Should any such bank desire to discount such paper
in excess of that amount it should file with the Federal
Reserve Board an application stating the limit desired
and the necessity for an increase in the percentage
fixed above.
Regulation L, series of 1915, governing clearings
between Federal Reserve Banks (i. e., gold-settlement fund), remains in force as previously issued.
Regulation Oi series of 1915, containing instructions to Federal Reserve Agents in the matter of issuance and redemption of Federal Reserve notes, will
be reissued in a somewhat modified form.




OCTOBER 1,1916.

CIRCULAR NO. 2,1 SERIES OF 1916.
WASHINGTON, September 15, 1916.

The accompanying revision of the Federal Reserve
Board's regulations, which has been delayed by the
desire to incorporate all changes occasioned by amendment of the Federal Reserve Act, is, for the greater
convenience of member banks, now issued in pamphlet
form, and is a compendium of all regulations applicable to the transactions of member banks. All previous issues of regulations are superseded by the present
issue, to which alone reference will hereafter be made.
Instructions which concern only Federal Reserve
Agents or Federal Reserve Banks will be covered in
separate letters or regulations.
W. P. G. HARDING, Governor.
SHERMAN ALLEN, Assistant Secretary.

REGULATION A, SERIES OF 1916.
(Superseding Regulations B, C, P, Q, and R of 1915.)
REDISCOUNTS UNDER SECTION 13.
A. NOTES, DRAFTS, AND BILLS OF EXCHANGE.

I. General statutory provisions.
Any Federal Reserve Bank may discount for any
of its member banks any note, draft, or bill of exchange provided—
(a) It has a maturity at the time of discount of
not more than 90 days, exclusive of days of grace;
but if drawn or issued for agricultural purposes or
based on live stock, it may have a maturity at the
time of discount of not more than six months, exclusive of days of grace.
(b) It arose out of actual commercial transactions;
that is, it must be a note, draft, or bill of exchange
which has been issued or drawn for agricultural, industrial, or commercial purposes, or the proceeds of
which have been used or are to be used for such
purposes*
(c) It was not issued for carrying or trading in
stocks, bonds, or other investment securities, except
bonds and notes of the Government of the United
States.
(d) The aggregate of notes, drafts, and bills bearing the signature or indorsement of any one borrower, whether a person, company, firm, or corporation rediscounted for any one member bank shall at
no time exceed 10 per cent of the unimpaired capital
i Circular No. 1 of May 1, 1916, Check Clearing and Collection, in slightly modified form, is reissued herein as Regulation J.

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

and surplus of such bank; but this restriction shall
not apply to the discount of bills of exchange drawn
in good faith against actually existing values.
(e) It is indorsed by a member bank.
(/) It conforms to all applicable provisions of this
regulation.

531

liabilities. The member bank shall certify in its application whether the note offered for rediscount has
been discounted for a depositor or another member
bank or whether it has been purchased from a nondepositor. It must also certify whether a financial
statement of the borrower is on file.
Such financial statements must be on file with reII. General character of notes, drafts, and bills of ex- spect to all notes offered for rediscount which have
change eligible.
been purchased from sources other than a depositor
or a member bank. With respect to any other note
The Federal Reserve Board, exercising its statu- offered for rediscount, if no statement is on file, a Fedtory right to define the character of a note, draft, or eral Reserve Bank shall use its discretion in taking
bill of exchange eligible for rediscount at a Federal the steps necessary to satisfy itself as to eligibility.
Reserve Bank, has determined that—
It is authorized to waive the requirement of a state(a) It must be a note, draft, or bill of exchange ment with respect to any note discounted by a memthe proceeds of which have been used or are to be ber bank for a depositor or another member bank—
used in producing, purchasing, carrying, or marketing
(1) If it is secured by a warehouse, terminal,. or
goods* in one or more of the steps of the process of other similar receipt covering goods in storage.
production, manufacture, or distribution.
(2) If the aggregate of obligations of the borrower
(&) It must not be a note, draft, or bill of ex- rediscounted and offered for rediscount at the Fedchange the proceeds of which have been used or are eral Reserve Bank is less than a sum equal to 10 per
to be used for permanent or fixed investments of any cent of the paid-in capital of the member bank and
kind, such as land, buildings, or machinery.
does not exceed $5,000.
(c) It must not be a note, draft, or bill of exchange
the proceeds of which have been used or are to be
V. Drafts, bills of exchange, and trade acceptances.
used for investments of a purely speculative char(a) Definition,—A draft or bill of exchange, within
acter.
(d) It may be secured by the pledge of goods or the meaning of this regulation, is defined as an unconditional order in writing, addressed by one person to
collateral, provided it is otherwise eligible.
another other than a banker as defined under B (&),
signed by the person giving it, requiring the person to
III. Applications for rediscount.
whom it is addressed, to pay, in the United States,
All applications for the rediscount of notes, drafts, at a fixed or determinable future time, a sum certain
or bills of exchange must contain a certificate of the in dollars to the order of a specified person; and a
member bank, in form to be prescribed by the Fed- trade acceptance is defined as a draft or bill of exeral Reserve Bank, that, to the best of its knowledge change drawn by the seller on the purchaser of goods
and belief, such notes, drafts, or bills of exchange sold and accepted by such purchaser.
have been issued for one or more of the purposes men(&:) Evidence of eligibility.—A Federal Reserve
tioned in II (a).
Bank shall take such steps as it deems necessary to
satisfy itself as to the eligibility of the draft or bill
IV. Promissory notes.
offered for rediscount, unless it presents prima facie
(a) Definition.—A promissory note, within the evidence thereof or bears a stamp or certificate affixed
by the acceptor or drawer showing that it is a trade
meaning of this regulation, is defined as an uncondiacceptance.
tional promise, in writing, signed by the maker, to
VI. Six months' agricultural paper.
pay, in the United States, at a fixed or determinable
future time, a sum certain in dollars to order or to
(a) Definition—Six
months' agricultural paper,
bearer.
within the meaning of this regulation, is defined as a
(b) Evidence of eligibility and requirement of state- note, draft, bill of exchange, or trade acceptance
ments.—A Federal Reserve Bank must be satisfied by drawn or issued for agricultural purposes, or based
reference to the note or otherwise that it is eligible on live stock; that is, a note, draft, bill of exchange,
for rediscount. Compliance of a note with II (b) may or trade acceptance the proceeds of which have been
be evidenced by a statement of the borrower show- used, or are to be used, for agricultural purposes, ining a reasonable excess of quick assets over current eluding the breeding, raising, fattening, or marketing
1
When used in this regulation the word " goods " shall be of live stock, and which has a maturity at the time
construed to include goods, wares, merchandise, or agricul- of discount of not more than six months, exclusive of
tural products, including live stock.
days of grace.




532

FEDERAL RESEEVE BULLETIN.

OCTOBEH 1, 1916.

{b) Eligibility.—To be eligible for rediscount six
months' agricultural paper, whether a note, draft,
bill of exchange, or trade acceptance, must comply
with the respective sections of this regulation which
would apply to it if its maturity were 90 days or less.

the shipment of goods between the United States and
any foreign country, or between the United States and
any of its dependencies or insular possessions, or between -foreign countries, or (2) the domestic shipment of goods, provided shipping documents are attached at the time of acceptance; or it must be a bill
which is secured at the time of acceptance by a wareVII. Commodity paper.
house receipt or other such document conveying or
(a) Definition.—Commodity paper within the mean- securing title covering readily marketable staples.
ing of this regulation is defined as a note, draft, bill Any Federal Reserve Bank may also • acquire drafts
of exchange, or trade acceptance accompanied and or bills drawn by a bank or banker in a foreign counsecured by shipping documents or by a warehouse, try or dependency or insular possession of the United
terminal, or other similar receipt covering approved States for the purpose of furnishing dollar exchange
and readily marketable, nonperishable staples prop- and accepted by a member bank in accordance with
erly insured.
the provisions of Regulation O, page 7. Such drafts
(6) Eligibility.—To be eligible for rediscount at the or bills may be acquired prior to acceptance provided
special rates authorized to be established for com- they have the indorsement of a member bank,
modity paper, such a note, draft, bill of exchange, or
(d) Evidence of eligibility.—A Federal Reserve
trade acceptance must also comply with the respec- Bank must be satisfied, either by reference to the
tive sections of this regulation applicable to it, must acceptance itself or otherwise, that it is eligible for
conform to the requirements of the Federal Reserve rediscount. Satisfactory evidence of eligibility may
Bank relating to shipping documents, receipts, insur- consist of a stamp or certificate affixed by the acceptor
ance, etc., and must be a note, draft, bill of exchange, in form satisfactory to the Federal Reserve Bank.
or trade acceptance on which the rate of interest or
discount—including commission—charged the maker,
does not exceed 6 per cent per annum.
REGULATION B, SERIES OF 1916.
B. BANKERS' ACCEPTANCES.

(Superseding Regulations S and T of 1915.)

(a) General statutory provisions.—Any Federal Reserve Bank may discount for any of its member banks OPEN-MARKET PURCHASES OF BILLS OF EXCHANGE, TRADE
ACCEPTANCES, AND BANKERS' ACCEPTANCES UNDER SECbankers' acceptances which have a maturity at the
TION 14.
time of discount of not more than three months' sight,
exclusive of days of grace, which are indorsed by at
I. General statutory provisions.
least one member bank, and which grow out of trans- •
actions involving the importation or exportation of
Section 14 of the Federal Reserve Act permits Fedgoods; or which grow out of transactions involving eral Reserve Banks, under rules and regulations to be
the domestic shipment of goods, providing shipping prescribed by the Federal Reserve Board, to purchase
documents are attached at the time of acceptance; or and sell in the open market from banks, firms, corwhich are secured at the time of acceptance by a porations, or individuals bankers' acceptances and
warehouse receipt or other such document conveying bills of exchange of the kinds and maturities made
or securing title covering readily marketable staples. eligible by the * act for rediscount, with or without
Any Federal Reserve Bank may also acquire drafts the indorsement of a member bank.
or bills of exchange drawn on member banks by banks
or bankers in foreign countries or dependencies or II. General character of bills and acceptances eligible.
insular possessions of the United States for the purThe Federal Reserve Board, exercising its statutory
pose of furnishing dollar exchange.
(b) Definition.—A banker's acceptance within the right to regulate the purchase of bills of exchange and
meaning of this regulation is denned as a draft or acceptances, has determined that a bill of exchange or
bill of exchange of which the acceptor is a bank or . acceptance, to be eligible for purchase by Federal Retrust company, or a firm, person, company, or cor- serve Banks under section 14—
(a) Must not have been issued for carrying or tradporation engaged in the business of granting bankers'
ing in stocks* bonds, or other investment securities,
acceptance credits.
(c) Eligibility.—To be eligible for rediscount the except bonds and notes of the Government of the
bill must have been drawn under a credit opened for United States.
.(&•) Must not be a bill the proceeds of which have
the purpose of conducting, or settling accounts resulting from, a transaction or transactions involving (1) been used or are to be used for permanent or fixed




OCTOBER 1,

1916.

FEDEBAL RESEBVE BULLETIN.

investments of any kind, such as land, buildings, or
machinery, or for investments of a merely speculative
character.
(c) Must have been accepted by the drawee prior
to purchase by a Federal Reserve Bank unless it; is
accompanied and secured by shipping documents or
by a warehouse, terminal, or other similar receipt
conveying security title.
(d) May be secured by the pledge of goods 1 or collateral, provided it is otherwise eligible.
In addition to the above general requirements, each
bill of exchange and trade acceptance purchased under
the terms of this regulation must also conform to the
more specific requirements set forth under III, and
each banker's acceptance must also conform to the
more specific requirements set forth under IV.

533

factory statement has been furnished of the financial
condition of one or more of the parties thereto.
IV. Bankers1 acceptances.

(a) Definition.—A bankers' acceptance, within the
meaning of this regulation, is a bill of exchange of
which the acceptor is a bank or trust company, or a
firm, person, company, or corporation engaged in the
business of granting bankers' acceptance credits.
(b) Eligibility.—To be eligible for purchase the bill,
which must have a maturity at time of purchase of
not more than three months, exclusive of days of
grace, must have been drawn under a credit opened
for the purpose of conducting, or settling accounts resulting from, a transaction or transactions involving—
(1) The shipments of goods between the United
States and any foreign country or between
the United States and any of its dependencies
III. Bills of exchange and trade acceptances,
or insular possessions, or between foreign
countries, or
(2) The shipment of goods within the United States,
(a) Definition.—A bill of exchange, within the
provided the bill at the time of its acceptance
meaning of this regulation, is defined as an unconis accompanied by shipping documents, or
ditional order in writing, addressed by one person
(3) The storage within the United States of readily
to another, other than a banker as defined under
marketable goods, provided the acceptor of
IV (a), signed by the person giving it, requiring the
the bill is secured by warehouse, terminal, or
person to whom it is addressed to pay in the United
other similar receipt, or
States, at a fixed or determinable future time, a sum
(4) The storage within the United States of goods
certain in dollars to the order of a specified person;
which have been actually sold, provided the
and a trade acceptance is defined as a bill of exchange
acceptor of the blil is secured by the pledge
drawn by the seller on the purchaser of goods sold and
of such goods;
accepted by such purchaser.
or it must be a bill drawn by a bank or banker
(6.) Eligibility.—To be eligible for purchase the bill
must have arisen out of an actual commercial trans- in a foreign country or dependency or insular possesaction, domestic or foreign; that is, it must be a bill sion of the United States for the purpose of furnishwhich has been issued or drawn for agricultural, in- ing dollar exchange. In this latter case the bank or
dustrial, or commercial purposes or the proceeds of banker drawing the bill must be in a country, dewhich have been used or are to be used for the pur- pendency, or possession whose usages of trade have
pose of producing, purchasing, carrying or marketing been determined by the Federal Reserve Board to regoods in one or more of the steps of the process of quire the drawing of bills of this character.
(c) Evidence of eligibility.—A Federal Reserve
production, manufacture, or distribution. It must
have a maturity at time of purchase of not more Bank must be satisfied either by reference to the acceptance itself, or otherwise, that it is eligible for
than ninety days, exclusive of days of grace.
(c) Evidence of eligibility.—A Federal Reserve purchase. Satisfactory evidence of eligibility may
Bank shall take such steps as it deems necessary to consist of a stamp or certificate affixed by the acsatisfy itself as to the eligibility of the bill offered ceptor, in form satisfactory to the Federal Reserve
for purchase, unless it presents prima facie evidence Bank., No evidence of eligibility is required with rethereof or bears a stamp or certificate affixed by the spect to a bill accepted by a national bank.
(d) Statements.—Bankers' acceptances, other than
acceptor or drawer showing that it is a trade acthose accepted or indorsed by member banks, shall be
ceptance.
(d) Statements.—Unless indorsed by a member eligible for purchase only after the acceptor has furbank, a bill is not eligible for purchase until a satis- nished a satisfactory statement of financial condition
in form to be approved by the Federal Reserve Board
1
When used in this regulation the word " goods " shall be and has agreed in writing with a Federal Reserve
construed to include goods, wares, merchandise, or agricul- Bank to inform it upon request concerning the transtural products, including live stock.
actions underlying such acceptances.




534

OCTOBER 1,1916.

FEDERAL RESERVE BULLETIN.

REGULATION C, SERIES OF 1916.

REGULATION D, SERIES OF 1916.

ACCEPTANCE BY MEMBER BANKS OF DRAFTS DRAWN TO
FURNISH DOLLAR EXCHANGE.

(Superseding Regulation E of 1915.)
TIME DEPOSITS AND SAVINGS ACCOUNTS.

I. Statutory

provisions.

Section 13 of the Federal Reserve Act provides that
any member bank may accept drafts or bills of exchange drawn upon it having not more than three
months' sight to run, exclusive of days of grace,
drawn, under regulations to be prescribed by the Federal Reserve Board, by banks or bankers in foreign
countries or dependencies Or insular possessions of
the United States for the purpose of furnishing dollar
exchange as required by the usages of trade in the
respective countries, dependencies, or insular possessions.
No member bank shall accept such drafts or bills
of exchange for any one bank to an amount exceeding
in the aggregate 10 per centum of the paid-up ana
unimpaired capital and surplus of the accepting bank
unless the draft or bill of exchange is accompanied
by documents conveying or securing title or by some
other adequate security. No member bank shall
accept such drafts or bills in ah amount exceeding at
any time in the aggregate one-half of its paid-up and
unimpaired capital and surplus.
II. Regulations.
Any member bank desiring to accept drafts drawn
by banks or bankers in foreign countries or dependencies or insular possessions of the United States for
the purpose of furnishing dollar exchange shall first
make an application to the Federal Reserve Board
setting forth the usages of trade in the respective
countries, dependencies, or insular possessions in
which such banks or bankers are located.
If the Federal Reserve Board should determine that
the usages of trade in such countries, dependencies,
or possessions require the granting of the acceptance
facilities applied for, it will notify the applying bank
of its approval and will also publish in the Federal
Reserve Bulletin the name or names of those countries, dependencies, or possessions in which banks or
bankers are authorized to draw on member banks
whose applications have been approved for the purpose of furnishing • dollar exchange.
The Federal Reserve Board reserves the right to
modify or on 90 days* notice to revoke its approval
either as to any particular member bank or as to any
foreign country or dependency or insular possession
of the United States in which it has authorized banks
or bankers to draw on member banks for the purpose
of furnishing dollar exchange.




Section 19 of the Federal Reserve Act provides, in
part, as follows:
Demand deposits, within the meaning of this act,
shall comprise all deposits payable within 30 days,
and time deposits shall comprise all deposits payable
after 30 days, and all savings accounts and certificates
of deposit which are subject to not less than 30 days'
notice before payment.
Time deposits, open accounts.
The term " time deposits, open accounts " shall be
held to include all accounts, not evidenced by certificates of deposit or savings pass books, in respect to
which a written contract is entered into with the depositor at the time the deposit is made that neither
the whole nor any part of such deposit may be withdrawn by check or otherwise, except on a given date
or on written notice given by the depositor a certain
specific number of days in advance, in no case less
than 30 days.
Savings

accounts.

The term '** savings accounts" shall be held to include those accounts of the bank in respect to which,
by its printed regulations, accepted by the depositor
at the time the account is opened—
(a) The pass book, certificate, or other similar
form of receipt must be presented to the bank whenever a deposit or withdrawal is made, and
(&) The depositor may at any time be required by
the bank to. give notice of an intended withdrawal
not less than 30 days before a withdrawal is made.
Time certificates of deposit.
A " time certificate of deposit-" is defined as an
instrument evidencing the deposit with a bank, either
with or without interest, of a certain sum specified
on the face of the certificate payable in whole or in
part to the depositor or on his order—
(a) On a certain date, specified on the certificate,
not less than 30 days after the date of the deposit, or
(&) After the lapse of a certain specified time subsequent to the date of the certificate, in no case less
than 30 days, or
(c) Upon written notice given a certain specified
number of days, not less than 30 days before the date
of repayment, and
(d) In all cases only upon presentation of the certificate at each withdrawal for proper indorsement or
surrender.

FEDERAL RESERVE BULLETIN.

OCTOBER 1,1916.

REGULATION E, SERIES OF 1916.

(Superseding Regulation F of 1915.)
PURCHASE OF WARRANTS.

Statutory requirements.
Section 14 of the Federal Reserve Act reads in part
as follows:
Every Federal Reserve Bank shall have power—
(&) To buy and sell, at home or abroad, bonds and
notes of the United States, and bills, notes, revenue
bonds, and warrants with a maturity from date of
purchase of not exceeding six months, issued in anticipation of the collection of taxes or in anticipation
of the receipt of assured revenues by any State,
county, district, political subdivision, or municipality
in the continental United States, including irrigation,
drainage, and reclamation districts, such purchases to
be made in accordance with rules and regulations prescribed by the Federal Reserve Board.
For brevity's sake, the term " warrant" when used
in this regulation shall be construed to mean "bills,
notes, revenue bonds, and warrants with a maturity
from date of purchase of not exceeding six months,"
and the term " municipality " shall be construed to
mean " State, county, district, political subdivision, or
municipality in the continental United'States, including irrigation, drainage, and reclamation districts."
Regulation.
I. Any Federal Reserve Bank may purchase warrants issued by a municipality in anticipation of the
collection of taxes or in anticipation of the receipt of
assured revenues, provided—
(a) They are the general obligations of the entire
municipality; it being intended to exclude as ineligible for purchase all such obligations as are payable
from " local benefit" and " special assessment" taxes
when the municipality at large is not directly or ultimately liable;
(&) They are issued in anticipation of taxes or
revenues which are due and payable on or before the
date of maturity of such warrants; but the Federal
Reserve Board may waive this condition in specific
cases. For the purposes of this regulation, taxes
shall be considered as due and payable on the last day
on which they may be paid without penalty;
(c) They are issued by a municipality—
(1) Which has been in existence1 for a period of
10 years;
(2) Which for a period of 10 years previous to
the purchase has not defaulted1 for longer than 15
days in the payment of any part of either principal
or interest of any funded debt authorized to be contracted by it;




62049—16

5

535

(3) Whose net funded indebtedness1 does not exceed 10 per centum of the valuation of its taxable
property, to be ascertained by the last preceding valuation of property for the assessment of taxes.
II. Except with the approval of the Federal Reserve Board, no Federal Reserve Bank shall purchase
and hold an amount in excess of 25 per centum of the
total amount of warrants outstanding at any time
and issued in conformity with provisions of section 14
(b) above quoted, and actually sold by a municipality.
III. Except with the approval of the Federal Reserve Board, the aggregate amount invested by any
Federal Reserve Bank in warrants of all kinds shall
not exceed at the time of purchase a sum equal to 10,
per centum of the deposits kept by its member bante,
with such Federal Reserve Bank.
IV. Except with the approval of the Federal Reserve Board, the maximum amount which may be
invested at the time, of purchase by any Federal Reserve Bank in warrants of any single municipality
shall be limited to the following percentages of the
deposits kept in such Federal Reserve Bank by its
member banks:
Five per centum of such deposits in warrants of a.
municipality of 50,000 population or over;
Three per centum of such deposits in warrants of
a municipality of over 30,000 population, but less than
50,000;
One per centum of such deposits in warrants of a
municipality of over 10,000 population, but less than
30,000.
V. Warrants of a municipality of 10,000 population
or less shall be purchased only with the special approval of the Board.
The population of a municipality shall be determined by the last Federal or State census. Where it
can not be exactly determined the Board will make
special rulings.
VI. Opinion of recognized counsel on municipal
issues or of the regularly appointed counsel of the
municipality as to the legality of the issue shall be
secured and approved in each case by counsel for the
Federal Reserve Bank.
VII. Any Federal Reserve Bank may purchase from
any of its member banks warrants of any municipality, indorsed by such member bank, with waiver of
demand, notice, and protest, up to an amount not to
exceed 10 per centum of the aggregate capital and
surplus of such member bank: Provided, however,
That such warrants comply with provisions I and
III of these regulations, except that where a period of
10 years is mentioned in I (c?) hereof a period of 5
years shall be substituted for the purposes of this
clause.
1

See appendix to this regulation.

536

FEDERAL RESERVE BULLETIN.

APPENDIX TO REGULATION E.
" NET FUNDED INDEBTEDNESS."

The term " net funded indebtedness " is hereby defined to mean the legal gross indebtedness of the
municipality (including the amount of any school district or other bonds which depend for their redemption upon taxes levied upon property within the municipality) less the aggregate of the following items:
(1) The amount of outstanding bonds or other debt
obligations made payable from current revenues;
(2) The amount of outstanding bonds issued for
the purpose of providing the inhabitants of a municipality with public utilities, such as waterworks, docks,
electric plants, transportation facilities, etc.: Provided, That evidence is submitted showing .that the
income from such utilities is sufficient for maintenance, for payment of interest on such bonds, and
for the accumulation of a sinking fund for their redemption ;
(3) The amount of outstanding improvement bonds,
issued under laws which provide for the levying of
special assessments against abutting property in
amounts sufficient to insure the payment of interest
on the bonds and the redemption thereof: Provided,
That such bonds are direct obligations of the municipality and included in the gross indebtedness of the
municipality;
(4) The total of all sinking funds accumulated for
the redemption of the gross indebtedness of the municipality, except sinking funds applicable to bonds
just described in (1), (2), and (3) above.
" EXISTENCE " AND " NONDEFAULT."

Warrants will be construed to comply with that
part of I (c) of Regulation E relative to term of
existence and nondefault under the following conditions :
(1) Warrants issued by or in behalf of any municipality which was, subsequent to the issuance of such
warrants, consolidated with or merged into an existing political division which meets the requirements of
these regulations, will be deemed to be the warrants
of such political division: Provided, That such warrants were assumed by such political division under
statutes and appropriate proceedings the effect of
which is to make such warrants general obligations of
such assuming political division and payable, either
directly or ultimately, without limitation to a special
fund from the proceeds of taxes levied upon all the
taxable real and personal property within its territorial limits.
(2) Warrants issued by or in behalf of any municipality which was, subsequent to the issuance of such




OCTOBER 1,1916.

warrants, wholly succeeded by a newly organized
political division whose term of existence, added to
that of such original political division or of any other
political division so succeeded, is equal to a period of
10 years will be deemed to be warrants of such succeeding political division: Provided, That during such
period none of such political divisions shall have defaulted for a period exceeding 15 days in the payment of any part of either principal or interest of
any funded debt authorized to be contracted by it:
And provided further, That such warrants were assumed by such new political division under statutes
and appropriate proceedings the effect of which is to
make such warrants general obligations of such assuming political division and payable, either directly
or ultimately, without limitation to a special fund
from the proceeds of taxes levied upon all the taxable
real and personal property within its territorial limits.
(3) Warrants issued by or in behalf of any municipality which, prior to such issuance, became the successor of one or more, or was formed by the consolidation or merger of two or more, preexisting political
divisions, the term of existence of one or more of
which, added to that of such succeeding or consolidated political division, is equal to a period of 10
years, will be deemed to be warrants of a political
division which has been in existence for a period of
10 years: Provided, That during such period _ none of
such original, succeeding, or consolidated political
divisions shall have defaulted for a period exceeding
15 days in the payment of any part of either principal
or interest of any funded debt authorized to be contracted by it.
REGULATION F, SERIES OF 1916.
(Superseding Regulation H of 1915.)
TRUST POWERS OF NATIONAL BANKS.

I. Statutory provisions.
The Federal Reserve Act provides:
SEC. 11. The Federal Reserve Board shall be authorized and empowered:
(k) To grant by special permit to national banks
applying therefor, when not in contravention of State
or local law, the right to act as trustee, executor, administrator, or registrar of stocks and bonds, under
such rules and regulations as the said Board may
prescribe.
II. Applications.
A national bank desiring to exercise any or all of the
privileges authorized by section 11, subsection (fc),
of the Federal Reserve Act, shall make application
to the Federal Reserve Board on a form approved by
said Board (Form No. 61). Such application shall
be forwarded by the applying bank to the chairman

OCTOBER 1, 1916.

FEDERAL RESERVE BULLETIN.

537

of the board of directors of the Federal Reserve good faith under regulations in effect at the time the
Bank of its district, and shall thereupon be trans- obligation was assumed.
mitted to the Federal Reserve Board with his recommendations.
REGULATION G, SERIES OF 1916.
III. Separate departments.
(Superseding Regulation I of 1915.)
Every national bank permitted to act under this
section shall establish a separate trust department,
LOANS ON FARM LAND AND OTHER EEAL ESTATE.
and shall place such department under the management of an officer or officers, whose duties shall be
Section 24 of the Federal Reserve Act provides in
prescribed by the board of directors of the bank.
part that—
Any national banking association not situated in a
central reserve city may make loans secured by imIV. Provision for keeping trust funds.
proved and unencumbered farm land situated within
its
within a radius of
The funds, securities, and investments held in each one Federal reserveofdistrict or in which such bank
hundred miles
the place
trust shall be held separate and distinct from the gen- is located, irrespective of district lines, and may also
eral funds and securities of the bank, and separate make loans secured by improved and unencumbered
and distinct one from another. The ledgers and real estate located within one hundred miles of the
which such
located, irrespective of
other books kept for the trust department shall be place in lines; but nobank ismade upon the security
district
loan
entirely separate and apart from the other books and of such farm land shall be made for a longer time
than five years, and no loan made upon the security
records of the bank.
of such real estate as distinguished from farm land
shall be made for a longer time than one year, nor
V. Examinations.
shall the amount of any such loan, whether upon
such farm land or upon such real estate, exceed fifty
Examiners appointed by the Comptroller of the per centum of the actual value of the property offered
as security. Any
may make
Currency or designated by the Federal Reserve Board whether secured by such bank land or suchsuch loans,
such farm
real estate
will hereafter be instructed to make thorough and in an aggregate sum equal to twenty-five per centum
complete audits of the cash, securities, accounts, and of its capital and surplus or to one-third of its time
investments of the trust department of every bank at deposits, and such banks may continue hereafter as
the same time that examination is made of the bank- heretofore to receive time deposits and to pay interest
on the same.
ing department.
National banks not located in central reserve cities
may, therefore, legally make loans secured by imVI. Conformity with State laws.
proved and unencumbered farm land or other real
Nothing in these regulations shall be construed to estate as provided by this section.
Certain conditions and restrictions must, however,
give to a national bank doing business as trustee,
executor, administrator, or registrar of stocks and be observed—
{a) There must be no prior lien on the land; that
bonds under section 11 (7c) of the Federal Reserve
xlct any rights or privileges in contravention of the is, the lending bank must hold an absolute first mortgage or deed of trust.
laws of the State in which the bank is located.
(b) The amount of the loan must not exceed 50
per cent of the actual value of the land by which it
VII. Revocation of permits.
is secured.
The Federal Reserve Board reserves the right to
(c) The maximum amount of loans which a national
revoke permits granted under these regulations in bank may make on real estate, whether on farm land
any case where in the opinion of the Board a bank or on other real estate as distinguished from farm
has willfully violated the provisions of these regula- land, is limited under the terms of the act to an
tions or the laws of any State relating to the opera- amount not in excess of one-third of its time deposits
tions of such bank when acting as trustee, executor, at the time of the making of the loan, and not in exadministrator, or registrar of stocks and bonds.
cess of one-third of its average time deposits during
the preceding calendar year: Provided, however, That
if one-third of such time deposits as of the date of
VIII. Changes in rules.
making the loan or one-third of the average time deThese regulations are subject to change by the posits for the preceding calendar year, is less than oneFederal Reserve Board: Provided, however, That no fourth of the capital and surplus of the bank as of
such change shall prejudice obligations undertaken in the date of making the loan, the bank in such event




538

FEDERAL RESERVE BULLETIN.

shall have authority to make loans upon real estate
under the terms of the Act to the extent of one-fourth
of the bank's capital and surplus as of that date.
(d) Farm land to be eligible as security for a loan
by a national bank must be situated within the Federal Reserve district in which such bank is located
or within a radius of 100 miles of such bank, irrespective of district lines.
(e) Real estate, as distinguished from farm land,
to be eligible as security for a loan by a national bank
must be located within a radius of 100 miles of such
bank, irrespective of district lines.
(/•) The right of a national bank to " make loans "
under section 24 includes the right to purchase or discount loans already made, as well as the right to make
such loans in the first instance: Provided, however,
That no loan secured by farm land shall have a maturity of more than five years from ti\& date on which
it was purchased or made by the national bank, and
that no loan secured by other real estate shall have
a maturity of more than one year from such date.
In order that real estate loans held by a bank may
be readily classified, a statement signed by the officers
making a loan and having knowledge of the facts
upon which it is based must be attached to each note
secured by a first mortgage on the land by which the
loan is secured, certifying in detail as of the date of
the loan that all of the requirements of law have been
duly observed.

OCTOBER l, 1916.

In cities or towns exceeding 3,000 but not exceeding
6,000 inhabitants, $50,000.
In cities or towns exceeding 6,000 but not exceeding
50,000 inhabitants, $100,000.
In cities exceeding 50,000 inhabitants, $200,000.
III. Application for membership.
Any eligible State bank or trust company may make
application on Form 83, made a part of this regulation, to the Federal Reserve Agent of its district for
an amount of capital stock in the Federal Reserve
Bank of such district equal to 6 per cent of the
paid-up capital stock and surplus of such State bank
or trust company.1
Upon receipt of such application the Federal Reserve Agent shall submit the same to a committee
composed of the Federal Reserve Agent, the governor
of the Federal Reserve Bank, and at least one other
member of the board of directors of such bank, to be
appointed by such board, but no class A director
whose bank is in the same city or town as the applying bank or trust company shall be a member of such
committee. This committee shall, after receiving the
report of such examination as may be required by
the Federal Reserve Bank in pursuance of directions
from the Federal Reserve Board, consider the application and transmit it to the Federal Reserve Board,
with its report and recommendations.
IV. Approval of application.

REGULATION H, SERIES OF 1916.
(Superseding Regulation M of 1915.)
MEMBERSHIP OF STATE BANKS AND TRUST COMPANIES.

I. Statutory requirements.
Specific provisions of the Federal Reserve Act
applicable to State banks and trust companies which
become member banks are quoted in the appendix to
this regulation.
II. Banks eligible for membership.
A State bank or a trust company to be eligible for
membership in a Federal Reserve Bank must comply
with the following conditions:
(1) It must have been incorporated under a special
or general law of the State or district in which it is
located.
(2) It must have a minimum paid-up unimpaired
capital stock as follows:
In cities or towns not exceeding 3,000 inhabitants,
$25,000.




In passing upon an application the Federal Reserve
Board will consider especially—
(1) The financial condition of the applying bank or
trust company and the general character of its management.
(2) Whether the nature of the powers exercised
by the said bank or trust company and its charter
provisions are consistent with the proper conduct of
the business of banking and with membership in the
Federal Reserve Bank.
(3) Whether the laws of the State or district in
which the applying bank or trust company is located
contain provisions likely to prevent proper compliance
with the provisions of the Federal Reserve Act and
the regulations of the Federal Reserve Board made
in conformity therewith.
If, in the judgment of the Federal Reserve Board,
an applying bank or trust company conforms to all
the requirements of the Federal Reserve Act and
these regulations, and is otherwise qualified for mem1
Three per cent has already been called from national and
other member banks, but the remainder of the subscription or
any part of it shall be subject to call if deemed necessary by
the Federal Reserve Board.

FEDERAL RESERVE BULLETIN.

OCTOBER 1,1916.

bership, the Board will issue a certificate of approval.
Whenever the Board may deem it necessary, it will
impose such conditions as will insure compliance with
the act and these regulations. When the certificate
of approval and any conditions contained therein
have been accepted by the applying bank or trust
company, stock in the Federal Reserve Bank of the
district in which the applying bank or trust company
is located shall be issued and paid for under the regulations of the Federal Reserve Act provided for national banks which become stockholders in the Federal Reserve Banks.
V. Powers and restrictions.
Every State bank or trust company while a member
of the Federal Reserve System—
(1) Shall retain its full charter and statutory rights
as a State bank or trust company, and may continue
to exercise the same functions as before admission,
except as provided in the Federal Reserve Act and
the Regulations of the Federal Reserve Board, including any conditions embodied in the certificate of
approval.
(2) Shall invest only in loans on real estate or
mortgages of a character and to an extent which, considering the nature of its liabilities, will not impair
its ability to meet current or maturing obligations.
(3) Shall adjust, to conform with the requirements
of the Federal Reserve Act and these regulations,
within such reasonable time as may be determined by
the Board in each case, any loans it may have at the
time of its admission to membership which are secured by its own stock, or any loans to one person,
firm, or corporation aggregating more than 10 per cent
of its capital and surplus or more than 30 per cent
of its capital, or any real estate loans which, in the
judgment of the Federal Reserve Board, impair its
ability to meet current or maturing obligations.
(4) Shall maintain such improvements and changes
in its banking practice as^nay have been specifically
required of it by the Federal Reserve Board as a condition of its admission, and shall not lower the standard of banking then required of it; and
(5) Shall enjoy all the privileges and observe all
those requirements of the Federal Reserve Act and
of the regulations of the Federal Reserve Board made
in conformity therewith which are applicable to State
banks and trust companies which have become member
banks.
VI. Withdrawals,
Any State bank or trust company desiring to withdraw from membership in a Federal Reserve Bank
may do so 12 months after written notice of its in-




539

tention to withdraw shall have been filed with the
Federal Reserve Board. The Board will immediately
notify the Federal Reserve Bank of the receipt of
such notice. At the expiration of said 12 months
such bank or trust company shall surrender all of
its holdings of capital stock in the Federal Reserve
Bank, which stock shall then be canceled and the
withdrawing bank or trust company shall thereupon
be released from its stock subscription not previously
called. Such bank or trust company shall, immediately upon the cancellation of its stock, cease to be
a member of the Federal Reserve Bank, and the Federal Reserve Bank shall then refund to such bank or
trust company a sum equal to the cash-paid subscription on the shares surrendered, with interest at the
rate of one-half of 1 per cent per month computed
from the last dividend, if earned, not to exceed the
book value thereof, and the reserve deposits, less any
liability of such member to the Federal Reserve
Bank: Provided, That no Federal Reserve Bank shall,
except by the specific authority of the Federal Reserve Board, cancel within the same calendar year
more than 10 per cent of its capital stock for the purpose of effecting voluntary withdrawals during that
year. All applications, including \therein any on
which action may have been deferred because in excess of the aforesaid 10 per cent limitation, will be
dealt with in the order in which they were originally
filed with the Board.
Any State bank or trust company desiring to withdraw from membership at the expiration of the 12
months' notice, notwithstanding the fact that the Federal Reserve Bank has previously canceled 10 per cent
of its stock during the same calendar year, may do so.
In such case, however, the Federal Reserve Bank
shall not be required to repay to the withdrawing
bank or trust company the sums due as above until
such time as its stock would have been canceled had
it not exercised this option. The Federal Reserve
Bank shall, however, give a receipt for the stock surrendered.
VII. Examinations.
Every State bank or trust company, while a member of the Federal Reserve System, shall be subject
to such examinations as may be prescribed by the
Federal Reserve Board in pursuance of the provisions
of the Federal Reserve Act.
In order to avoid duplication, the Board will exercise the broad discretion vested in it by the act in
accepting examinations of State banks and trust companies made by State authorities wherever these are
satisfactory to the Board and are found to be of the
same standard of thoroughness as national bank examinations and where, in addition, satisfactory arrangements for cooperation in the matter of examination between the designated examiners of the Board

540

FEDERAL RESERVE BULLETIN.

and those of the States already exist or can be
effected with State authorities. Examiners from the
staff of the Board or of the Federal Reserve Banks
will, whenever desirable, be designated by the Board
to act with the examination staff of the State in order
that uniformity in the standard of examination may
be assured.
VIII. Future regulations.
The Federal Reserve Board reserves the right to
make such amendments and adopt and issue, from
time to time, such further regulations authorized by
the act as it may deem necessary, but no amendment
of Section VI of these regulations, relating to voluntary withdrawals, shall take effect until six months
after its adoption and issue by the Board.
APPENDIX TO KEGT7LATION H .

The Federal Reserve Act provides:
SEC. 9. Any bank incorporated by special law of any
State, or organized under the general laws of any
State or of the United States, may make application
to the reserve bank organization committee, pending
organization, and thereafter to the Federal Reserve
Board for the right to subscribe to the stock of the
Federal Reserve Bank organized or to be organized
within the Federal Reserve district where the applicant is located. The organization committee or the
Federal Reserve Board, under such rules and regulations as it may prescribe, subject to the provisions of
this section, may permit the applying bank to become
a stockholder in the Federal Reserve Bank of the
district in which the applying bank is located. Whenever the organization committee or the Federal Reserve Board shall permit the applying bank to become
a stockholder in the Federal Reserve Bank of the
district, stock shall be issued and paid for under the
rules and regulations in this act provided for national
banks which become stockholders in Federal Reserve
Banks.
The organization committee or the Federal Reserve
Board shall establish by-laws for the general government of its conduct in acting upon applications made
by the State banks and banking associations and trust
companies for stock ownership in Federal Reserve
Banks. Such by-laws shall require applying banks
not organized under Federal law to comply with the
reserve and capital requirements and to submit to
the examination and regulations prescribed by the
organization committee or by the Federal Reserve
Board. No applying bank shall be admitted to membership in a Federal Reserve Bank unless it possesses
a paid-up, unimpaired capital sufficient to entitle it
to become a national banking association in the place
where it is situated, under the provisions of the national banking act.
Any bank becoming a member of a Federal Reserve
Bank under the provisions of this section shall, in
addition to the regulations and restrictions hereinbefore provided, be required to conform to the provisions of law imposed on the national banks respecting the limitation of liability which may be incurred
by any person, firm, or corporation to such banks, the
prohibition against making purchase of or loans on




OCTOBER l, 1916.

stock of such banks, and the withdrawal or impairment of capital, or the payment of unearned dividends,
and to such rules and regulations as the Federal Reserve Board may, in pursuance thereof, prescribe.
Such banks, and the officers, agents, and employees
thereof, shall also be subject to the provisions of and
to the penalties prescribed by sections fifty-one hundred and ninety-eight, fifty-two hundred, fifty-two hundred and one, and fifty-two hundred and eight, and
fifty-two hundred and nine of the Revised Statutes.
The member banks shall also be required to make
reports of the conditions and of the payments of dividends to the comptroller, as provided in sections fiftytwo hundred and eleven and fifty-two hundred and
twelve of the Revised Statutes, and shall be subject
to the penalties prescribed by section fifty-two hundred and thirteen for the failure to make such report.
If at any time it shall appear to the Federal Reserve Board that a member bank has failed to comply
with the provisions of this section or the regulations
of the Federal Reserve Board, it shall be within the
power of the said board, after hearing, to require
such bank to surrender its stock in the Federal Reserve Bank; upon such surrender the Federal Reserve
Bank shall pay the cash-paid subscriptions to the said
stock with interest at the rate of one-half of one per
centum per month, computed from the last dividend,
if earned, not to exceed the book value thereof, less
any liability to said Federal Reserve Bank, except the
subscription liability not previously called, which
shall be canceled, and said Federal Reserve Bank
shall, upon notice from the Federal Reserve Board, be
required to suspend said bank from further privileges
of membership, and shall within thirty days of such
notice cancel and retire its stock and make payment
therefor in the manner herein provided. The Federal
Reserve Board may restore membership upon due
proof of compliance with the conditions imposed by
this section.
SEC. 19. If a State bank or trust company is required or permitted by the law of its State to keep its
reserves either in its own vaults or with another State
bank or trust company or with a national bank, such
reserve deposits so kept in such State bank or trust
company or national bank shall be construed, within
the meaning of this section, as if they were reserve
deposits in a national bank in a reserve or central
reserve city for a period of three years after the
Secretary of the Treasury shall have officially announced the establishment of a Federal Reserve Bank
in the district in which such State bank or trust company is situate. Except as thus provided, no member
bank shall keep on deposit with any nonmember bank
a sum in excess of ten per centum of its own paid-up
capital and surplus. No member bank shall act as
the medium or agent of a nonmember bank in applying for or receiving discounts from a Federal Reserve
Bank under the provisions of this Act except by permission of the Federal Reserve Board.
SEC. 21. The Comptroller of the Currency, with the
approval of the Secretary of the Treasury, shall appoint examiners, who shall examine every member
bank at least twice in each calendar year and oftener
if considered necessary: Provided, however, That the
Federal Reserve Board may authorize examination by
the State authorities to be accepted in the case of
State banks and trust companies, and may at any
time direct the holding of a special examination of
State banks or trust companies that are stockholders
in any Federal Reserve Bank. The examiner making

OCTOBER 1,1916.

FEDERAL RESERVE BULLETIN.

the examination of any national bank, or of any other
member bank, shall have power to make a thorough
examination of all the affairs of the bank, and in
doing so he shall have power to administer oaths and
to examine any of the officers and agents thereof
under oath, and shall make a full and detailed report
of the condition of said bank to the Comptroller of
the Currency.
The Federal Reserve Board, upon the recommendation of the Comptroller of the Currency, shall fix the
salaries of all bank examiners and make report
thereof to Congress. The expense of the examinations
herein provided for shall be assessed by the Comptroller of the Currency upon the banks examined in
proportion to assets or resources held by the banks
upon the dates of examination of the various banks.
In addition to the examinations made and conducted by the Comptroller of the Currency, every
Federal Reserve Bank may, with the approval of the
Federal Reserve Agent or the Federal Reserve Board,
provide for special examination of member banks
within its district. The expense of such examinations
shall be borne by the bank examined. Such examinations shall be so conducted as to inform the Federal
Reserve Bank of the condition of its member banks
and of the lines of credit which are being extended by
them. Every Federal Reserve Bank shall at all times
furnish to the Federal Reserve Board such information as may be demanded concerning the condition of
any member bank within the district of the said Federal Reserve Bank.
No bank shall be subject to any visitatorial powers
other than such as are authorized by law or vested
in the courts of justice, or such as shall be or shall
have been exercised or directed by Congress, or by
either House thereof, or by any committee of Congress or of either House duly authorized.
The Federal Reserve Board shall, at least once each
year, order an examination of each Federal Reserve
Bank, and upon joint application of ten member banks
the Federal Reserve Board shall order a special examination and report of the condition of any Federal
Reserve Bank.
REGULATION I, SERIES OF 1916.
(Superseding Regulation N of 1915.)
INCREASE OR DECREASE OF CAPITAL STOCK OF FEDERAL
RESERVE BANKS.

Increase of capital stock.
Whenever the capital stock of any Federal Reserve
Bank shall be increased by new banks becoming members, or by the increase of capital or surplus of any
member bank and the allotment of additional capital
stock to such bank, the board of directors of such
Federal Reserve Bank shall certify such increase to
the Comptroller of the Currency on Form 58, which is
made a part of this regulation.
Decrease of capital stock.
I. Whenever a member bank reduces its capital
stock or surplus, and, in the case of reduction of its
capital, such reduction has been approved by the
Comptroller of the Currency and by the Federal Re-




541

serve Board in accordance with the provisions of section 28 of the Federal Reserve Act, it shall file with
the Federal Reserve Bank of which it is a member
an application on Form 60, which is made a part of
this regulation. When this application has been approved, the Federal Reserve Bank shall take up and
cancel the receipt issued to such bank for cash payments made on its subscription and shall issue in
lieu thereof a new receipt after refunding to the member bank the proportionate amount due such bank on
account of the subscription canceled. The receipt so
issued shall show the date of original issue, so that
dividends may be calculated thereon.
II. Whenever a member bank shall be declared insolvent and a receiver appointed by the proper authorities, such receiver shall file with the Federal Reserve
Bank of which the insolvent bank is a member an
application on Form 87, which is made a part of this
regulation, for the surrender and cancellation of the
stock held by, and for the refund of all balances due
to such insolvent member bank. Upon approval of
this application by the Federal Reserve Agent the
Federal Reserve Bank shall accept and cancel the
stock surrendered, and shall adjust accounts between
the member bank and the Federal Reserve Bank by
applying to the indebtedness of the insolvent member
bank to such Federal Reserve Bank all cash-paid
subscriptions made by it on the stock canceled with
one-half of 1 per centum per month from the period
of last dividend, if earned, not to exceed the book
value thereof, and the balance, if any, shall be paid
to the duly authorized receiver of such insolvent member bank.
III. Whenever a member bank goes into voluntary
liquidation and a liquidating agent is appointed, such
agent shall file with the Federal Reserve Bank of
which it is a member an application on Form 86,
which is made a part of this regulation, for the surrender and cancellation of the stock held by and for
the refund of all balances due to such liquidating
member bank. Upon approval of this application by
the Federal Reserve Agent the Federal Reserve Bank
shall accept and cancel the stock surrendered, and
shall adjust accounts between the liquidating member bank and the Federal Reserve Bank by applying
to the indebtedness of the liquidating member bank
to such Federal Reserve Bank all cash-paid subscriptions made by it on the stock canceled with one-half
of 1 per centum per month from the period of last dividend, if earned, not to exceed the book value thereof,
and the balance, if any, shall be paid to the duly authorized liquidating agent of such liquidating member
bank.
IV. Whenever the stock of a Federal Reserve Bank
shall be reduced in the manner provided in Paragraphs
I, II, or III of this regulation the board of directors

542

FEDEBAL EESEBVE BULLETIN.

OCTOBER 1,1916.

of such Federal Reserve Bank shall, in accordance until sufficient time has elapsed within which to rewith the provisions of section 6, file with the Comp- ceive advice of payment.
(3) In the selection of collecting agents for
troller of the Currency a certificate of such reduction
handling checks on nonmember banks member banks
on Form 59, which is made a part of this regulation.
will be given the preference.
(4) Under this plan Federal Reserve Banks will
receive at par from their member banks checks on all
REGULATION J, SERIES OF 1916.
member banks and on nonmember banks whose checks
can be collected at par by any Federal Reserve Bank.
(Superseding Circular No. 1 of 1916.)
Member banks will be required by the Federal Reserve Board to provide funds to cover at par all
CHECK CLEAEING AND COLLECTION.
checks received from or for the account of their FedThe Federal Reserve Board is empowered, under eral Reserve Banks: Provided, however, That a memsection 16 of the Federal Reserve Act, to require each ber bank may ship lawful money or Federal Reserve
notes from its own vaults at the expense of its FedFederal Reserve Bank to—
"Exercise the function of a clearing house for its eral Reserve Bank to cover any deficiency which may
arise because of and only in the case of inability to
member banks."
In pursuance of the authority vested in it under the provide items to offset checks received from or for
provisions of this section, the Federal Reserve Board, the account of its Federal Reserve Bank.
(5) Section 19 of the Federal Reserve Act provides
desiring to afford to both the public and the various
member banks a direct, expeditious, and economical that—
system of check collection and settlement of balances,
The reserve carried by a member bank with a Fedhereby requires all Federal Reserve Banks to exerunder
regulations,
cise the functions of a clearing house for their re- eral Reserve Bank may, as may the prescribed by and
subject to such penalties
be
the
spective member banks under the following general Federal Reserve Board, be checked against and withterms and conditions:
drawn by such member bank for the purpose of
Each Federal Reserve Bank will receive at par from meeting existing liabilities: Provided, however, That
shall at
its member banks checks1 drawn on all member banks, no bank dividendsany time make new loans or shall
pay any
unless and until the total reserve
whether in its own district or other districts, and required by law is fully restored.
checks drawn upon nonmember banks when such
checks can be collected by the Federal Reserve Banks
It is manifest that items in process of collection
at par.
can not lawfully be counted as part of the minimum
Each Federal Reserve Bank will receive at par reserve to be carried by a member bank with its Fedfrom other Federal Reserve Banks checks drawn upon eral Reserve Bank. Therefore, should a member bank
all member banks of its district and upon all non- draw against such items the draft would be charged
member banks whose checks can be collected at par against its reserve if such reserve were sufficient in
by the Federal Reserve Bank. The Federal Reserve amount to pay it; but any resulting impairment of
Banks will prepare a par list of all nonmember banks, reserves would be subject to all the penalties provided
to be revised from time to time, which will be fur- by the act.
nished to member banks.
Inasmuch as it is essential that the law in respect
Immediate credit entry upon receipt subject to final to the maintenance by member banks of the required
payment will be made for all such items upon the minimum reserve shall be strictly complied with, the
books of the Federal Reserve Bank at full face value, Federal Reserve Board, under authority vested in it by
but the proceeds will not be counted as part of the section 19 of the act, hereby prescribes as the penalty
minimum reserve nor become available to meet checks for any deficiency in reserves a sum equivalent to an
drawn until actually collected in accordance with the interest charge on the amount of the deficiency of 2
best practice now prevailing.
per cent per annum above the ninety-day discount
(2) Checks received by a Federal Reserve Bank rate of the Federal Reserve Bank of the district in
on its member banks will be forwarded direct to such which the member bank is located. The Board remember banks and will not be charged to their ac- serves the right to increase this penalty whenever
counts until advice of payment has been received or conditions require it.
Member banks can at all times arrange to keep their
*A check is generally defined as a draft or order upon a reserves intact by rediscounting with their Federal
bank or banking house, purporting to be drawn upon a deposit of funds, for the payment at all events of a certain Reserve Bank.
(6) Each Federal Reserve Bank will determine by
sum of money to a certain person therein named, or to him
or his order, or to bearer, and payable instantly on demand. analysis the amounts of uncollected funds appearing




FEDERAL RESEBVE BULLETIN.

OCTOBER 1, 1 9 1 6 .

on its books to the credit of each member bank. Such
analysis will show the true status of the reserve held
by the Federal Reserve Bank for each member bank
and will enable it to apply the penalty,for impairment
of reserve.
A schedule of the time required within which to
collect checks will be furnished to each member bank
to enable it to determine the time at which any item
sent to its Federal Reserve Bank will be counted as
reserve and become available to meet any checks
drawn.
(7) In handling items for member banks, a Federal Reserve Bank will act as agent only. The Board
will require that each member bank authorize its
Federal Reserve Bank to send checks for collection




62049—16

6

543

to banks on which checks are drawn, and, except for
negligence, such Federal Reserve Bank will assume
no liability. Any further requirements that the Board
may deem necessary will be set forth by the Federal
Reserve Banks in their letters of instruction to their
member banks.
(8) The cost of collecting and clearing checks must
necessarily be borne by the banks receiving the benefit
and in proportion to the service rendered. An accurate account will be kept by each reserve bank of the
cost of performing this service and the Federal Reserve Board will, by rule, fix the charge, at so much
per item, which may be imposed for the service of
clearing or collection rendered by the reserve banks,
as provided in section 16 of the Federal Reserve Act.

544

FEDERAL EESEEVE BULLETIN.

OCTOBER l, 1916.

SUMMARY OF BUSINESS CONDITIONS SEPT. 23, 1916.
District No. 1—
Boston.

District No. 2—
New York.

General business... Very good .
Expanding
Crops:
Average , ...I Less than average
Conditions
I yield.
Fair
Outlook
Industries of the Busy
Sustained activity.
district.
C o n s t r u c t i o n , Value greater than Busy..
building.
for many years.
Foreign trade..... J Exports increased; Increased.
i m p o r t s decreased.
Bank clearings
j Increased
do...,.

Dull and spotty; Unchanged
easier if any
change.

Money rates*.

Railroad, post-of- Increased
fice, and other
receipts.

Increased.

Labor conditions..! Well employed at | Labor scarce; two
high wages.
large strikes.
! Scarce.
Outlook
! Bright
Good
t

1

Remarks.

|

District No. 7—
Chicago.

Sharp rise in commodities and securities, growing
confidence in
business outlook.
District No. 8—
St. Louis.

District No. 3—
Philadelphia.

Crops:
Condition
Outlook.
Industries of the
district.
Construction,
building.
Foreign trade
Bank clearings
Money rates
Railroad, postoffice, and other
receipts.
Labor conditions.,
Outlook..
Remarks.




District No. 5—
Richmond.

Very good
Very satisfactory..
Slightly below 10- Good for tobacco..
year average.
Only fair
Fair for grain
Full activity in Working to capacity.
most lines.
Fairly active
j Slower, especially in
! residences. About
! 7 per cent increase
o\er August, 1915.
Large increase in
exports.
Sept. 1-35 shows inIncreasing..
j crease of 40 per
i cent over same
! period last year
•i and 3 per cent over
j last month.
Easy
I Money easy, with
rates practically
unchanged.

Most satisfactory
Maturing well
Promising
Excellent, except
lumber; improving.
Building improved,
otherwise normal.
Most satisfactory

District No. 6 Atlanta.
Good.
Short crop good;
account
high
prices.
Working to full
capacity. Labor
satisfactory.
Fail-.
Do-

Increased at every Increase.
point oxer same
month last year. I

4 to 6 per cent. Fair Rates unchanged.
demand; high
prices making
money easy.
Post-office receipts Railroad and postal Increasing.
Increasing..
show increase of
both normal.
11.2 per cent over
August, 1915, for 6
cities in district.
Acute scarcity of Shortage still pre- Well employed and Satisfactory.
labor.
in demand; high
vails.
wages.
All things consid- Promising, except Most satisfactory Bright for fall and
ered, good.
crops in some secand bright.
winter business.
tions.
Shortage of-railroad
cars is affecting
manufacturers and
coal and coke concerns.
District No. 9—
Minneapolis.

General business... Sustained activity

Very active.
in i n d u s t r i a l
lines.
Fair
Fair

'District No. 4Clev eland.

District No. 10—
Kansas City.
Remains active

Grain poor.

District No. 11—
Dallas.
. Good..

District No. 12—
San Francisco.
Continues good.

Harvest volume
subnormal; returns large.
High prices pre- Corn and flax Fair to good
Favorable for citPromising
.....do..
good.
vailing.
rus fruit.
Very active
Active
Prospering; oil and Condition satisfac- Active except lumActive.
zinc affected by
ber.
tory.
lower prices.
Increase in value 32 per cent increase
Fairly a c t i v e ; Building permits
over 1915.
Fine increase; active. and number.
do
some large build- increase.
ings planned.
Good in practically Increasing.
Above normal
all lines.
Chicago, increase; Increase
Moderate in- Decided increases.. 33 per cent increase.. 30 per cent increase
country,
increases.
over 1915.
crease.
Steady
...., No change; money Steady
Stationary
Easy; unchanged.
Easy
Increasing..
Increase..
Increased
Increase of from 10 Increasing.
to 25 per cent.
Good
Quiet; help in de- Less disturbance, Labor well em- Little unemployUnsettled.
mand.
but shortage.
ployed; satisfacment.
tory; scarcity in
farming sections.
Satisfactory....... Bright
Promising...,
Very promising
Promising.
Good..
Business condi- Trade brisk
General conditions High prices for cot- Continued develtions generally
highly satisfacton and cotton
opment and sitsatisfactory.
tory.
seed have stimuuation generally
lated b u s i n e s s .
favorable.
More general liquidations, especially
by farmers and
merchants, than
for several years
past.
Good, except corn.

.do.

OCTOBER 1,1016.

ETEDEKAL RESERVE BULLETIN.

545

GENERAL BUSINESS CONDITIONS.
There is given on the preceding page a summary of business conditions in the United
States by Federal Beserve districts. The reports are furnished by the Federal Reserve
Agents, who are the chairmen of the boards of
directors for the several districts. Below are
the detailed reports as of approximately September 23:
DISTRICT NO. 1—BOSTON.
Business in general is in much the same state
that it was at the beginning of the summer
season. During the hot weather and vacation
period many lines did not retain the activity
experienced earlier in the year. This to a
large extent applied to the placing of new orders, buyers during the summer appearing reluctant to make purchases for delivery too far
in advance. Manufacturers and producers, on
the other hand, were well sold ahead, and were
unable to take contracts for deliveries except
for distant dates. All through the summer
concerns having future contracts have run at as
full capacity as labor conditions and the congestion of the railroads would permit, and by
the end of the summer many were getting their
production to a point where deliveries could
be promised within a reasonable time. There
is little doubt but what this temporary reaction
has been beneficial to business, so that with the
coming of the fall, even with rising prices, the
activity experienced last spring is again becoming evident.
Continued ease in the money market, due to
the large imports of gold into this country, is
no small factor in present conditions, and as
long as this influx continues money rates will
probably remain on the present basis. The
high and increasing cost of foodstuffs and commodities in general and the continued unrest
in labor are disturbing elements. That the
general public has confidence that our present
prosperity will continue for some time is best
evidenced by the interest taken and the ascending prices of stocks, both on and off the ex-




changes. It would be necessary to go back
some years to find a corresponding period when
so many new issues, both with and without
merit, have been floated.
The money market in this district is dull
and spotty, there being considerable difference
in the situation of banks in the various centers
in New England. There also is a difference
in the conditions of banks in the same city,
some banks being amply supplied with funds
while others are not in a position to increase
their loans materially. The commercial paper
market is influenced to a large extent by rates
in other large centers. If there is any change
in rates over last month it is toward a slightly
easier tendency. Call money is 3 per cent;
time money 3§ per cent upward, with possible
exceptions at 3|- per cent; year money 4J to 4-|
per cent; town notes 3 per cent upward; 90day bankers' acceptances 2f per cent upward
indorsed, 2-J per cent upward unindorsed.
Loans and discounts of the Boston Clearing
House banks on September 16, 1916, show an
increase of $11,245,000 over last month, and
demand deposits have increased $10,396,000 in
the same period. The amount " due to banks "
on September 16 was $130,044,000, as compared
with $126,133,000 on August 19. The excess
reserve of these banks decreased from $30,464,000 on August 19 to $26,940,000 on September 16.
Exchanges of the Boston Clearing House for
the week ending September 1.6 were $186,433,957 as compared with $144,404,908 for the corresponding week last year and $161,661,144 for
the week ending August 19,1916.
Building and engineering operations in New
England are still substantially in excess of any
previous year. From January 1 to September
21, 1916, these contracts amounted to $149,954,000, compared with $128,543,000 for the
corresponding period of 1915 and $142,071,000
| for the same period in 1912, the best year here! tofore recorded.

546

FEDERAL BESEBVE BULLETIN.

Exports from the port of Boston for August,
1916, were larger than for any month for many
years, and amounted to $17,678,230, as compared with $15,549,466 for July, 1916, and $8,696,114 for August, 1915.
Imports for August, 1916, amounted to
$12,072,884, a decrease of $405,843 from July,
1916, and a decrease of $1,231,631 from August, 1915.
Receipts of the Boston post office for August,
1916, show an increase of $95,000, or about
16£-per cent over August, 1915, and the receipts for the first 15 days of September were
$35,000, or about 11^ per cent over the same
period last year.
New York, New Haven & Hartford Eailroad reports net operating income, after taxes,
for July, 1916, as $2,377,193, compared with
$2,174,760 for July, 1915.
Eeports from different sections of this district would indicate that on the whole crops
will show an average yield. Farmers are having difficulty in securing harvest help, and
wages are high. The weather has been too
hot and dry in some sections to give a large
potato yield, but the crop will be fair, and,
with prices high, the farmer will get a good
return for his production. The hay crop is
well above the average and in some sections it
is claimed that it will be the largest for many
years. The quality, however, is not up to
normal. Tobacco and onions will show an
average yield, with the prices good. The corn
crop is probably as much as 25 per cent below
normal, with other grains about the average.
Pasturage is about normal, but is declining,
due to the lighter rains. The apple crop will
be better than last year, but below many previous years, with the quality below normal.
The prosperity which the boot and shoe
trade has enjoyed for some time still continues,
despite the rising costs of manufacturing, and
it is expected that this industry will continue
busy.
Woolen and worsted mills are running as
near capacity as the supply of experienced
labor will permit. Mills manufacturing lower




OCTOBER 1,1916.

priced materials are very well supplied with
business, but new orders for high-priced goods
have, for the most part, been disappointing.
Many buyers purchased heavily of standard
materials at lower prices in anticipation of a
rise, and much of these goods are now being
used, thus reducing considerably the amount
of new business being placed.
The only market in which wool for import
can be purchased is that of South America, the
English embargo cutting off all exports from
her dependencies and colonies to this country.
There is a great deal of uncertainty as to how
much this embargo will be lifted this season,
and the feeling is that we will receive very little wool from these sources. Coupled with
this embargo there has been sufficient demand
from manufacturers to keep prices firm, with
the tendency higher.
The statement of the National Association
of Wool Manufacturers as of September 1
shows an increase in the percentage of idle
looms and spindles as compared with June 1,
but a decrease as compared with September 1
last year. *
The cotton-goods industry continues good,
but the difficulty in securing skilled labor is to
some extent retarding production. Contracts
for fine and f ancy goods and for print cloths are
being made for deliveries in the first quarter
of next year, and in some cases even as far
ahead as May. Prices are rising steadily, but
in spite of this the demand continues, and retailers are adding the advanced cost to prices
asked of their customers* The increase in
prices has tempted converters to resell gray
goods bought at considerably lower prices, and
some evidences on this profit taking have been
seen recently.
The activity and rising prices of stocks, both
on and off of the exchanges, are being reflected
to a marked degree in the local bond market,
which of late has broadened perceptibly. Savings accounts in banks in manufacturing centers have been increasing with the general prosperity of the laboring class. The low rates for
commercial paper and short loans have forced

OCTOBER 1,1916.

FEDERAL RESERVE BULLETIN.

547

banks to invest more and more of their money
Freight carriers on the Great Lakes are
in bonds. This, coupled with the investment promised ample cargoes for the remainder of
inquiries of individuals, has created a better de- the season.
mand for securities than for several months.
Collections are good in most lines, but some
of the provisions dealers and suppliers of
DISTRICT NO. 2—NEW YORK.
building materials find payments overdue, and
I t is apparent that confidence in the general in several of the country districts, as is usual
business outlook has grown considerably of at this time of year, there are complaints of
late. This is evidenced by the increasing activ- slow payments.
ity of practically all mercantile lines in the
The labor situation has been more unsettled
face of a strong upturn in prices, which has during the past month, particularly among
raised the average price of commodities to the leather goods workers and employees on the
highest level ever recorded.
traction lines in New York City.
Producers of goods are working under presNew York State savings banks reported on
sure to fill winter and spring orders. The July 1, 1916, an increase in deposits of $91,industrial situation is unchanged save for a 717,602 over July 1, 1915, and a gain of 6.2
slightly better supply of raw materials. Most per cent over 1914, 9.1 over 1913, and 35 per
reports still emphasize the shortage of help cent over 1907.
in factories and mills.
On September 16,1916, members of the New
All the metal trades are active. Production York Clearing House reported loans, etc.,
of pig iron fell off from the high records of $3,301,358,000; deposits, $3,415,067,000; and
recent months, but equals the large tonnage excess reserve, $88,947,950. Since August 5
of early months of the year and greatly exceeds last loans and deposits have increased $78,536,that of a year ago. Manufacturers of auto- 000 and $64,890,000, respectively, and excess
mobiles and parts report business better than reserves decreased $23,363,830.
ever.
The New York Stock Exchange business has
Agricultural staples, stoves, and heating ap- been exceedingly active recently, with sharp
pliances are in good demand. Furniture man- advances in the general list.
ufacturing is increasing, with prices reported
Compared with the corresponding period
to be 15 per cent higher than a year ago. A last year, the August figures show large in.great volume of business continues in textile creases in New York City bank clearings, exlines.
ports and imports, new incorporations, and
Shoe manufacturers report an exceptionally postal receipts. Building permits decreased
heavy demand for winter goods. Importations in New York and there were fewer failures in
of raw hides during the last fiscal year were this district.
the largest on record, but the domestic and
Authorities state that the real estate condiforeign demand for finished leather and leather tions in New York City have improved congoods increased in even greater ratio, so that siderably. Offices and apartments are easily
stocks have not accumulated.
rented. While there are few sales of property,
Wholesale and jobbing houses report an ex- prices are firm.
panding trade on fall and winter goods. DeCall money rates ruled from 2 to 2 | per cent
partment stores, mail-order houses, and chain in August, but have been firmer at about 3 per
stores are doing an active and improving busi- cent since early in September. Time loans on
ness. One of the latter published figures of collateral are also firmer than last month.
August sales showing an increase of 14 per Rates for bankers' acceptances are practically
cent over last year.
unchanged. Commercial paper declined about




548

FEDERAL BESERVE BULLETIN.

one-half per cent in August to a ruling rate of
3f, which continues at present, with a small
volume of short paper selling at lower rates.
In the foreign exchanges there was a sharp
advance in rubles, more strength in francs, a
slight decline in guilders, a new low price for
marks, and practically no change in sterling.
Imports of gold are continuing in large
amounts, which have reached the total of $307,000,000 since May 11 last.
DISTRICT NO. 3—PHILADELPHIA.
There does not appear to be any falling off
of orders or of business immediately in prospect in this district. The community, however, is ever confronted with the fact that business is being done under abnormal conditions,
with the possibility of events taking place that
will in due time restore business to normal conditions. This, together with the unsatisfactory crop reports, is inducing business men to
act conservative!}^.
Trade reports are becoming monotonous
reading, because they tell the familiar story
of mills and factories extended to the limit,
prices rising to new heights, and profits that
surpass all former records.
Merchants and manufacturers are encouraged by the brisk demand for fall merchandise.
The preliminary retail demand has shown an
improvement that augurs well for the future,
and wholesale distribution continues in large
volume. Notable activity is still the most
prominent feature in manufacturing departments, and though every effort is being made
by the plants and mills to keep pace with
orders, there is much complaint that an inadequate supply of labor renders it difficult
to make deliveries as promptly as desired.
There is a growing shortage of all kinds of
labor, which is embarrassing many manufacturers in their efforts to complete their contracts. It is also a chief element of uncertainty in arranging new commitments. The
return to schools and colleges of many students who have worked during the summer
months will aggravate the situation.




OCTOBER l,

1916.

Iron and steel plants are working at full
capacity, with orders which will carry them
well into the coming year. Plate mills are
generally sold up, the already heavy demand
took a fresh spurt, and inquiries for large
quantities are being received. It is assumed
that consumers are seeking to cover their future
requirements as a protection against the heavy
demands of the Government naval program.
Steel bars and structural material are scarce,,
and prices are firm. The steel supply seems
inadequate to meet the demand, and there is
a continuing firmness of prices in all lines.
Pig iron prices, in which an increasing tendency has been noted for some weeks, were
advanced in all grades by Philadelphia houses.
The coal and coke markets are strong, and
steel concerns are among the heaviest inquirers
for bituminous coal. There is an active and5
increasing demand, in part owing to the prosperous conditions in industrial lines, but also
to the desire on the part of numerous consumers to stock up in advance of requirements
because of reports that the shortage of labor
in the mining regions is keeping down production, and that later on there may be a deficiency
in supplies. Prices are very firm, and most business is on a spot basis. Foreign inquiry is
active, but an acute lack of bottoms, which has
ruled for some time, is keeping shipments at a
minimum. Coke production generally is far
below the demand.
The Lancaster County tobacco crop was hurt
by hail in some sections, but prevailing high
prices and large yields practically guarantee
the best returns, as a whole, to growers in
years.
Generally speaking, the textile industries
have an abundance of orders to fill, and steady
employment for the winter is assured. In
nearly all instances a restricted supply of labor
is cutting down the volume of possible output*
Following is a table showing the results of
replies made to inquiries of large concerns in
this district as to industrial and business conditions.

549

FEDERAL RESERVE BULLETIN.

OCTOBER 1, 1916.

9

Is there
any letup in
Replies trade?
received.

Will ending of
war curtail your
business?

Approximate
percentage
of increase
in costs
of production during
past year?

Outlook

Ex-

Un-

T-n

presHave profits Withhigh
ent
proportionately with
costs of
production
during past
J. i
yeo

wages and
better
working
conditions
is labor as
efficient as
a year ago?

Within last
Are new two years
products
have imbeing
provements
developed to property
to meet
or replaceafter-war
ments of
competition equipment
by foreign been demanufac- ferred which
turers in under northis or
mal condiforeign
tions would
markets? have been
made?

In

mate- Yes. No. Yes. No. Yes. No. Yes. No.
Yes. No. Yes. No. cel- Good. Fair. cer- Poor m
lent.
tain.
wages. rials.

Agricultural i m p l e ments
Automobiles and parts.
Carpets, rugs, oilcloth,
and linoleum. . .
Cement, lime, etc
Chemicals (fertilizers,
drugs, soaps, etc.)
Coal and coal mining..
Confectionery
C o t t o n and cotton
goods
Dental specialties
Department stores
Dry goods, notions, etc.
Dyeing and finishing..
Electrical supplies and
apparatus
Flour and grist mill
products .
Furniture
Groceries and food
products
Hardware
Hosiery and knit goods
Iron and stee^
Leather, glazed kid,
and shoes
Lumber and millwork,
Machinery, foundry
products, and locomotives
Meters and gas apparaPaints and coloring
matter
Paper and paper products . . . .
.
Petroleum and refining
Pianos
Plumbers' supplies
Pottery, pressed brick,
etc goods
Rubber .. .
Silks, laces, etc
Slaughtering and packing
Tobacco and cigars
Wearing apparel
Wire
. . . .
Woolens and worsteds.
Miscellaneous ( b a t s ,
watches, toys, pens,
cordage, explosives).
Total




6
5

2
0

4
5

o
0

5
4

o
1

3
1

0
1

2
2

0
0

18
15

69
28

0
1

Q

4

1
3

5
2

o
0

5

1
1

4
4

7
4

5
0

2
4

3
0

2
4

o
0

1
2

3
2

3
0

o
0

16
26

50
42

1
2

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2

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4

o
1

7
3

3
2

"3

16
8
4

5
0
0

11
8
4

7
0
1

9
7
3

2
0
1

6
4
1

4
3
2

4
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0

18
12
9

57
29
18

7
0

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8
8
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3

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7
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11
0
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o
o

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9
5
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15
16

25
18
5
22
68

1
1
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0
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41

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3

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1 •

o
o
o

18

3
3

8
17

45
25

1

• 2
1

2
2

•I

o

0
3

2
3

1

2
3

0

10
q

M

o
o
3

0
1
1

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1

2

2

1

o

o
3

2

o

2
3

2
5

4
2

2
6

7
3

4 14
10 13

12
16

4
6

2
3

7
10

9
6

1
4

o
o
0
0
1
1

o
o
o
o

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o
o
0
0
0

2
1
2

o
0
1
2

0

1

o

2

o

12
31

17
51
106
47

4
3
7
9

5
4

0
2

0
o

15
21

4
5

8
5

11
13

8
4

2
4

10
3

7
20

3
3

12
19

10
6

6
5
8
17

5
5

15
10

1
2

14
8

8
3

7

7

3
1

3
5

4
1

4
3

0
0

48
13

73
23

8
4

6
6

4
6

11
4

0

o

11
10

7
3

8
7

39

13

24

8

26

7

14

3

14

0

24

58

5

32

12

26

5

28

19

18

2

1

1

1

1

1

o

o

1

0

22

26

1

1

1

1

o

2

0

2

3

1

2

1

2

o

2

1

o

23

31

1

2

2

1

1

2

2

1

6
o
2

9
2
2
2

6
0

4
1
1
1

4
0

1
0

2
1

o
1

124
40
6
44

7
1
2
4

5
1
1
2

5
1
1
2

2
0

o
2

28
15
4
16

3
1

o
0

3
1
2
1

o
o
0
o
0

7
2
2
2

1
1
0
2

1
2
2

4
4
2

3
2
14

2
3
7

3
3

1
o
2

1
2
8

3
2
3

2
2
4

o
o
o

22
26
16

61
51
44

o
1

7
5
7

o
2
7

7
3
9

1

9

o
2

6
5
11

2
2
3

5
4
12

o
1

0
1
1
1
13

4
5
8
3
3

o
0
4

2
2
4
3
3

0
0
1
1
0

1
2
2

o
0

o
9

4
5
11
4
8

o
12

o
1

9
13
13
33
19

29
23
24
65
79

1
1
2
1
2

3
5
9
3
15

1
2
7
1
6

2
4
4
3
10

0
0
1
1
0

4
6
7
3
13

0
3
2
3
7

4
3
9
1
7

1

5

5

1

1

3

1

1

0

20

39

2

4

3

2

1

4

1

5

117 154

44

113

54

80

1

117

143

84

205

115

176

32

217

99

188

10
2
2
4
7

fi

17
4
6
11
4
17
6
300

0

75 221

o
2

o
1

0

i Approximate averages.

o
0

o
0

550

FEDERAL RESERVE BULLETIK.

OCTOBER 1,1916.

The activity in business is reflected in the
A comparison of these replies, with replies
to similar questions made six months and a operations of the Philadelphia post office for
year ago, is as follows:
August, which are as follows:
Septem- March,
ber, 1916. 1916
Percentage of concerns reporting business—
Good, or excellent
Fair..
Uncertain.Poor..
Number of concerns reporting outlook
to be either fair, uncertain, or poor

54
19
27
.3

September, 1915.

75
17
• 8
None.
83

137

42
22
15
21
217

These replies also indicate that production
costs continued to increase during the past
year, showing an average gain of about 18 per
cent for labor and 44 per cent for materials,
against 11 per cent and 46 per cent, respectively, the previous year. It is also noted that
some manufacturers have deferred making improvements to property or replacements of
equipment which, under normal conditions,
probably would have been made.
In spite of the large amount of business
being done throughout this district, the number of commercial failures during August is
in excess of the number reported for any
month since April. It should be noted, however, that most of these failures affect the concerns with relatively small capital, and this
condition of business has been referred to
recently by the Federal Trade Commission,
which reported that the leading industrial
establishments usually make money and are
continually improving manufacturing and
working conditions, which the small trader is
apparently unable to do.

August,
1916.
Total postal receipts(stamps,box rents, etc.) - Domestic money orders:
65,914
Numberissued
$584,861
. Amount
168,112
Number paid and repaid
1,205,160
Amount
International money orders:
3,816
Numberissued
$55,235
Amount
991
Number paid and repaid
19,380
Amount

August,
1915.
$594,804
55,486
$494,900
146,604
985,090
4,284
$58*204
861
11,917

The commissioners of navigation report that
during the month of August exports from the
port of Philadelphia amounted to $36,000,000,
the largest in its history, and a gain over
August, 1915, of $27,000,000; $20,505,911 of
these exports were war materials.
Imports for the month amounted to $8,221,037, compared with $4,955,059 a year ago. The
article showing the largest increase was raw
sugar.
A gratifying feature of the port's business
was the large number of American vessels reported, 31 vessels flying the American flag
arriving from foreign ports and 22 sailing.
The increase in business activity of this district is reflected in the following table of bank
clearings:
Bank clearings.
August—
City.

Percent
increase
or decrease.

1916

1915

Altoona
Chester
Harrisburg..
Lancaster
Norristown..
Philadelphia.
Reading
Scranton
Trenton
Wilkes-Barre
Wilmington..
York

32,523,086
5,204,832
8,188,894
6,976,693
2,021,880
998,420,106
8,776,158
12,954,878
8,242,785
7,481,135
11,740,322
4,340,052

$2,140,570
3,281,629
7,131,231
5,791,176
1,879,313
655,855,938
7,323,093
12,884,658
8,063,208
7,230,609
9,538,384
3,662,424

+ .5
+ 2.2
+ 3.5
+23.1
+18.5

Total...

1,076,870,821

724,782,233

Average
+19.8

Bradstreefs report of commercial failures in this district, classified as to capital employed.
1916
January
February...
March
April
May
June
July
August




$5,000 $5,000to $20,000 to $50,000 to $100,000 to
and less. $20,000. $50,000. $100,000. $500,000. Total.
90
95
96
64
44
46
55
60

4
7
4
2
2
3
2
5

1

1
1

1
1
1

2

96
103
101
67
48
50
57
65

+17.9
+58.6
+14.8
+20.5
+ 7.6
+50.7
+19.9

OCTOBER 1,

First eight months—
City.
1916

1915

Per cent
increase
or decrease.

Altoona
Chester
Harrisbufg..
Lancaster
Norristown..
Philadelphia.
Reading
Scranton.
Trenton.....
Wilkes-Barre
Wilmington.
York

$20,291,715 $18,189,016
22,885,482
39,609,808
55,556,646
64,729,780
56,280,471
66,693,765
16,420,713
19,509,011
8,128,805,617 5,314,034,556
61,199,538
77,354,294
105,983,004 109,441,060
62,466,009
75,371,929
55,938,311
59,803,926
65,112,505
96,237,174
31,052,624
34,734,718

+11.6
+73.1
+16.5
+18.5
+18.8
+53.0
+26.4
- 3.2
+20.7
+ 6.9
+47.8
+11.9

Total..

8,789,124,741 5,868,576,931

Average
+25.2

The money market presents no special
features. Money is abundant, and rates show
a tendency toward lower figures.
DISTRICT NO. 4—CLEVELAND.
In determining the trend of business in district No. 4, conditions in the steel trade furnish the principal barometer. In July and
August there was some hesitancy among steel
product makers in placing orders with producers because of uncertainty that the present
level of prices would continue. Now that hesitancy has given way to confidence, and buying
by manufacturers is insistent. The situation
that existed between producers and manufacturers is now noticed between manufacturers
and jobbers. The latter are not as confident in
their buying as manufacturers assert they will
be in a month.
One favorable feature of the present situation is that for the last eight months the steel
trade has been without fluctuations that are
ordinarily so disturbing. One large company
reports that in spite of large shipments during
that period their obligations have not varied
100,000 tons up and down. This indicates the
consuming power of the country and the consistent demand during all this period. The
iron and steel situation, therefore, remains
fully as strong as a month ago. Practically
every plant in this district is sold up into next
year. Owing to increased foreign demand and




551

FEDEEAL BESEBVE BULLETIN.

1916.

widespread domestic buying, steel manufacturers are expecting a general advance in wire,
plates, bars, and other products of the mills.
Business conditions in general throughout the
entire district are exceedingly favorable, with
anticipated continued improvement throughout the balance of the year. Some changes are
reported in industrial conditions, largely due
to the strain on railroads, inability to move
freight, and shortage of labor.
The retail mercantile trade is slightly less in
volume. Interest in fall wear has increased,
and better business is expected. Wholesalers
report satisfactory business generally, and are
looking forward to a good fall trade.
The glass trade in the Pittsburgh district is
operating to capacity of available labor, and
glassmen throughout the district are looking
forward to a good business.
The pig-iron market is strong and running
at a maximum pace. Sales are on a large scale,
with prices stiffening. The following table
Shows a comparison of prices, using Pittsburgh
quotations:
Billets.
Two years ago
One year ago
Week ending Sept. 16,1916.

§21.00
26.00
45.00

Basic pig.
$14.00
16.00
19.00

Manufacturers of tin plate have reserved
considerable tonnage for shipment next season,
but no prices for 1917 delivery have been
named. A general advance of 50 cents per ton
has been realized in the Cincinnati iron and
steel scrap market.
The electrical business is keeping up in good
volume, orders and contracts being above normal. Delays in making prompt shipment,
due to difficulty in receiving raw material, are
still being experienced, but collections continue
good.
Building operations are slower, especially in
the way of residences, owing to the high cost
of materials. In the six largest cities in this
district there were 391 more building permits

552

FEDERAL RESERVE BULLETIN.

issued during August than during July, 1916,
with an increase of $1,060,136 in valuations for
the same period. The following tables show
a comparison of building operations for the
month of August and for the year ending
August 31, 1916:

August,
1916.
Cincinnati...
Cleveland...
Columbus
Pittsburgh..
Toledo
Youngstown
Total..

Permits issued.

cent
August, Increase. Per of
1915.
increase.

$232,480 $218,776
313,565 275,733
94,385
99,796
313,391 272,340
81,616
90,947
22,849
24,399
1,074,578

965,699

$13,704
37,832
5,411
41,051
9,331
1,550
108,879

6.2
13.7
5.7
15.0
•11.4

6.7
11.2

Valuations.

August, August, August,
1916.
1916.
1915.

Increase Per cent
increase
or
or
August, decrease.
decrease.
1915.

Cincinnati..
Cleveland...
Columbus...
Pittsburgh..
Toledo
Youngstown

1,546
1,370
284
376
398
150

1,384 $1,328,490 $3,048,475 i$l,719,985
1,287 2,752,445 1,987,520 764,925
270 548,720 544,895
3,825
278 1,442,467 740,265 702,202
229 1,348,197 747,083 601,114
88 293,500
154,815 138,685

Total..

4,124

3,536 7,713,819 7,223,053

Permits issued, Valuations for year
year e n d i n g endingAugust August August
31,1916. 31,1915. 31,1916.

August
31,1915.

490,766

156.4
38.4
.7
94.8
80.1
89.5
6.7

Increase Per cent
increase
or
or
decrease. decrease.

Cincinnati..
Cleveland...
Columbus...
Pittsburgh..
Toledo
Youngstown

16,347
13,555
3,107
3,978
3,968
1,248

15,237 $11,421,539 Sll,604,337 U82,798
13,848 30,072,561 29,554,719 517,842
2,590 6,666,325 6,058,870 607,455
3,730(16,350,011 13,341,668 3,008,343
2,595 9,659,808 6,342,218 3,317,590
1,029 3,184,284 2,305,990 878,294

il.5
1.7
10.0
22.5
52.3
38.0

Total..

42,203

39,029 77,354,528 69,207,802 8,146,726

11.7

1

Decrease.

The lumber business, which has been unsatisfactory during the summer, is better.
Both hardwood and yellow-pine dealers are
reporting increased sales and better prices.
Paper manufacturers report a strong demand for finished goods, orders running away
ahead of production. Raw material is scarce,
hard to get, and high in price.
Soap manufacturers are doing a tremendous
business, especially those making glycerine and
like products. One concern is reported to be
doing a business of $100,000,000 gross this
year, this being an increase of $25,000,000 over
last year.
Post-office receipts of the six largest cities
in this district show an increase of 2.4 per
cent for the month of August over July, 1916,
and an increase of 11.2 per cent over August,
1915. Table of post-office receipts follows:




OCTOBER 1, 1916.

Traction traffic is improving. Reports from
traction companies show earnings far in excess
of a year ago. Suburban railroad traffic remains normal, but without marked improvement. Loads billed in this district on all the
principal trunk lines during August show an
increase of 27.1 per cent over August, 1915,
and an increase of 10.9 per cent as compared
with July, 1916. The car situation is unsatisfactory in the larger shipping centers, forcing slower movement of raw materials and
manufactured articles. Railroads report that
all available cars are being used, and it is possible that additional contracts for new cars will
be made. It is stated that the shortage will
probably be aggravated during the next two or
three months, partly on account of inability of
receivers to obtain sufficient labor promptly to
unload freights.
Manufacturers report labor scarce, and competition between some industrial concerns is
adding to the acuteness of the situation. It is
reported that as high as $4 a day, in some cases,
is being paid for the best common labor.
Farming communities also complain of lack of
help in harvesting crops.
High-class horses in the Blue Grass region of
Kentucky are now selling at the old-time high
prices. Present prices for hogs, ranging
almost 11 cents per pound, has resulted in unprecedented prosperity for the farmers.
Although the rains improved the crop situation somewhat, they were a little late. Some
sections report the crops will not be more than
three-fourths of what they were last year. The
Burley tobacco section reports a magnificent
crop, both as to volume and quality, and it is
probably the best crop that section has ever

FEDERAL RESERVE BULLETIN.

OCTOBER 1, 1916.

raised. Sales of Burley this winter are estimated to reach maximum figures, both as to
quantity and prices.
Banks throughout the district report deposits holding up well, and in several of the
larger cities record deposits are indicated.
Eecord pay rolls are also reported in several
centers. A number of localities have an active |
demand for money, but taking the district as a j
whole money is easy, with rates practically un- '
changed. Clearings in the six largest cities in
the district for the first half of September
show an increase of 3.3 per cent over the same
period in August, 1916, and an increase of 40.1
per cent over the same period last year. Table
of clearing house statistics follows:
September 1-15.

Increase.
1916.
Cincinnati
Cleveland
Columbus
Pittsburgh
Toledo
Youngstown
Total

1915.

Per cent
of
increase.

$70,486,900
108,004,326
19,799,500
121,810,782
19,677,457
6,220,522

$52,326,300 $18,160,600
63,336,189 44,668,137
14,388,200
5,411,300
99,634,897 22,175,885
14,130,217
5,547,240
3,171,279
3,049,243

32.7
70.5
37.6
22.2
39.2
96.1

345,999,487

246,987,082

40.1

99,012,405

The supply of railroad cars for coal shipments in western Pennsylvania is much scarcer
than last month. A slight car shortage is also
being experienced in other coal and coke regions throughout the district. The scarcity of
coal miners and mine labor has driven many
companies in the fields to send special agents
out for help. Coal mining is heavier, and the
ovens are producing all the coke possible with
forces available. The coke market is active.
Coal is in good demand, and prices hold firm.
The shortage of labor and cars has a tendency
to stiffen prices and cause the consumer to be
anxious for his supply, taking all the coal in
sight. Eiver tonnage of coal is at high levels,
while the rail tonnage is also large.
DISTRICT NO. 5—RICHMOND.
While the final results from crops in this
district depend to some extent on weather con-




553

ditions for an assured future, reports indicate
general optimism.
Collections are reported as generally improved, and increased postal receipts and bank
clearings indicate a steady, healthful condition. Bank balances are large and the demand
for money light. A general feeling of optimism is very evident, and there appears no
serious disposition to consider the immediate
future in any but a hopeful light. A modification of this opinion with due consideration
of the probability of retrenchment in the future would, however, not come amiss.
Corn.—Virginia reports a shorter yield of
corn than that of last year. The early plantings produced very good crops. In North
Carolina weather conditions caused marked deterioration of late corn, while the early crop
was much better than the average. The shortage for the State, however, is large. Conservative authorities expect not more than twothirds of the normal crop. In South Carolina
a very short crop is expected on account of
storms and floods in July. Higher prices will
perhaps equalize the damage.
Cotton.—Widely varying conditions as to
cotton are reported from South Carolina. On
account of an unusually heavy rainfall, gravel
cotton lands are naturally favored. In many
counties the high prices now prevalent will not
offset the loss. The crop varies greatly. Cotton seed has sold as high as $50 a ton, and
the demand is good. Central North Carolina
reports that the yield in that section will prove
better than recent reports would indicate.
Fruit.—Virginia reports about one-half of
normal crop of fruit, with good prices, probably high enough to offset shortage in quantity. Farmers and buyers alike hesitate in
trading at this tiriie in orchard lots. West Virginia and. North Carolina report good crops of
apples. The peach crop is short.
Hay and grain.—The consensus of opinion
indicates a full hay crop, with slightly lower
prices. West Virginia reports a shortage in
oats, while the rest of the district in which

554

FEDERAL BESERVE BULLETIN.

such grain is grown will probably have a normal crop.
Potatoes.—West Virginia reports a reduced
production of nearly a million bushels of potatoes, with prices nearly double those of last
year. Western North Carolina reports good
crops at satisfactory prices.
Tobacco.—Splendid results may be expected
in the tobacco sections of this district. In
Virginia, with smaller crops, leaf tobacco is
practically 50 per cent higher in value. West
Virginia reports an increased production of
about 2,500,000 pounds, with grades unusually
high and with splendid curing weather. Central North Carolina should realize much above
normal, not only in prices but in average
pounds per acre. The grading in South Carolina may not be as high as usual, but the prices
will be considerably higher than for several
years.
Live stock.—An increase in live stock for
nearly all the sections of this district is reported. Not only have the farmers acquired
more cattle and hogs, evidently in a desire to
profit by the plan of diversification, but the
importation of beef stock has been reported,
and an increased demand for improved stock.
This has led to some activity in lands suitable
for grazing. Cattle bring higher prices than
ever known, with large sales already closed.
Considerable attention has been drawn to
the packing industry in this section. Establishments, or incorporations, of packing houses
are reported for Wilmington, N. C, and Greenville and Orangeburg, S. C, with the combined
capitalization of approximately $400,000.
Goal.—West Virginia reports a good improvement in prices for coal, and the tendency
of buyers, both foreign and domestic, is to bid
for longer contracts. Three-year contracts
have been closed at advanced prices. There appear to be many inquiries from Mediterranean
and South American ports. Some difficulty has
been experienced in obtaining sufficient labor,
and the demand for miners is on the increase.
Steel and iron.—Continued activity is reported by manufacturers of steel and iron, and




OCTOBER 1,1916*

while the costs of raw materials are, if anything, higher than ever, prices obtained for
finished products leave a very satisfactory margin of profits. Heavy increases in exports of
manufactured metals are reported from our
Atlantic ports.
Textiles.—Mills making textiles are almost
uniformly busy, a great many running to capacity. Orders at good prices are plenty, and
while costs are high, sales should leave a very
comfortable margin. Several new mills are reported either under construction or in the
process of organization in North Carolina.
Colored cottons are in good demand, and notwithstanding the unsatisfactory situation in
regard to dyestuffs, realizations in sales are
very satisfactory. There are gradually being
established in the South an increasing number
of silk mills, and the outlook for the industry
is most encouraging.
General manufacturing.—With, the exception of the western part of North Carolina
and the eastern part of South Carolina, where
the floods and storms of the earlier season
caused considerable damage, there appears to
be a healthful increase in general manufactures. While. the flood conditions imposed
heavy losses and damaged plants, the majority
have been reestablished with at least a normal
volume of orders. In our principal furniture
manufacturing- city unusual activity is reported. The glass industry in West Virginia
is reported at high tide, with sales deliverable
into 1918.
Labor.—The calls for help from the Northern States have without a doubt attracted there
considerable labor, with the natural result that
employers are encountering more or less difficulty in keeping up their maximum output.
A few unimportant strikes in textile plants are
reported. There has been some agitation
against employment agents in their endeavors
to encourage the withdrawal of labor to other
sections.
Railroads.—As is usual at this season of the
year, the generally inconvenient shortage of
freight cars is being experienced. Passenger?

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

especially excursion, business shows a rather
large increase, and this may very properly be
construed to indicate a general individual
prosperity.
Exports.—Baltimore shows a net increase in
exports over August of 1915 of practically
$15,000,000, principally in copper, iron, and
steel, and other metals, tobacco, oats, corn, and
rye. Shipments of wheat fell off approximately $2,000,000. Wilmington reports a very
heavy increase in shipments of cotton. The
total-increase- at Norfolk is in the vicinity of
$2,000,000, largely oats, cotton and linters,
manufactured iron and steel, and empty cartridge shells. Shipments in wheat, tobacco,
and lumber sh©w decreases, and the export of
horses from $3,000,000 in 1915 has dropped to
$250,000 this year.
DISTRICT NO. 6—ATLANTA.
There has been little material change in the
business conditions in this district which
awaits a more decisive crop condition as a basis
for fall and winter business. Reports from the
southern part of the district state that while
the work is probably 10 days late, picking of
cotton is progressing nicely, and the crop is
beginning to come to market. In view of the
high price prevailing very little cotton is being
held, and the indications are that as picked it
will be ginned and marketed. While an early
frost may do some damage to cotton, it is not
likely to involve any great amount, and it is
safe to assume that this year's crop will be sold
at a price nearer on a normal parity with the
price of the manufactured product than any
previous crop grown in recent years.
As indicated in previous reports, the season's cotton crop in this district will fall about
20 per cent short of the 1915 crop. However,
it is not expected that this shortage will affect
the general business of the district, in view of
the higher prices received as an offset to the
loss in crop production.
At present prices for cotton and seed, as compared with those existing at this time last year,




555

the value of the cotton crop in Alabama will
be $12,000,000 more than that of 1915. In this
estimate this year's yield is taken on a basis of
775,000 bales. The value of the 1915 crop, including seed, was approximately $64,000,000.
The value of this year's production in Alabama
will be approximately $76,000,000. The crop
of 1916 was made at a less cost and with more
attention given to diversification. The products of diversified farming are in good demand
at high prices. This is creating a greater interest in future live-stock raising.
Industrial: Activity continues in all industrial lines, with the possible exception of coal
and lumber. While there is an increased demand for coal, both steam and domestic, and
prices have advanced rapidly, the mines in the
district are not operating over half time because of a shortage of freight cars. There has
been some improvement in the lumber market
within the past 30 days. The volume of business is larger and values appear somewhat
firmer. This is to some extent offset by the
serious car shortage. Sales of lumber show a
healthy excess over production and are in excess of shipments. Production at this time is
about 10 per cent below normal and is likely
to be further curtailed.
The output of pig iron in the Birmingham
district for the month of August was the largest recorded for any one month. Prices remained practically unchanged. The demand
for steel products is still heavy.
In wholesale and retail lines sales are in
excess of this time last year and collections are
reported good. Prevailing prices are much
higher than the same season last year and
dealers report certain lines of merchandise
scarce and shipments from factories very slow.
With the high prices prevailing for agricultural products, the general outlook is very
bright for a heavy fall and winter trade.
New Orleans branch.—Notwithstanding the
feverish condition of labor and the high cost
of raw material, no particularly marked
change is noticed in the more important industries of this section.

556

FEDERAL RESERVE BULLETIN".

Agricultural conditions on the whole are
quite satisfactory. Cane, corn, cotton, and
rice are all coming well, while potatoes, onions,
beans, and kindred crops are well up to standard and are bringing good prices.
Wholesale and retail trade continues in satisfactory volume, the desirable turnover has
been realized, and as cooler weather approaches the outlook.for an increased buying
is bright. This is so general that merchants
are making extraordinary alterations and repairs to facilitate the display and handling of
goods.
The demand for loans in New Orleans continues good, with rates unchanged.
The port facilities at New Orleans are being
put to test in order to handle the enormously
increased volume of imports and exports.
Shipments in and out are from three to four
times greater than this time last year.
DISTRICT NO. 7—CHICAGO.
Business is active in almost all lines, at high
prices, with some manufacturers finding difficulty in securing the necessary raw materials.
Labor is still in short supply and a deficiency
in available cars is causing inconvenience to
shippers. Bankers report a general improvement throughout the district, and there appears less criticism of the low rates and excess
money than for some months. There still are
centers with a plethora of funds and low rates,
but even in these cases the undertone is firm
and any active demand would probably show
very promptly in the money quotations.
Fall business with jobbers and retailers,
which has been dependent on the crop situation, is increasing, due to the market value of
the produce rather than the amount harvested.
On the whole, this should prove a reasonably
prosperous year for the agricultural communities, and the manufacturing centers are reflecting this condition and also the foreign demand
in special lines.
Bond houses anticipate a revival of business
this fall. Municipal issues which have been




OCTOBER 1,1916.

stationary are now advancing, and this territory is absorbing a satisfactory volume of securities. There have been few new offerings,
except foreign loans, and in these there has
been considerable interest, particularly the collateral issues.
Crops have not improved since last month;
in fact, the expected yield of corn has probably
been decreased owing to a frost the middle of
September. However, the greater part of the
crop had so far matured that the damage in
all likelihood will be small, centering in the
northern half of Illinois where the crop was
somewhat behind the adjacent States in point
of maturity. Current prices for all grain
should be given due consideration in determining the financial outlook for the farmer,
and these are high. In Illinois spring wheat
seeding is progressing, and we understand that
the acreage will probably be greater than a
year ago. A fair corn crop is expected, with
apples and peaches in rather short supply.
Indiana promises a satisfactory yield of corn.
Preparation of wheat ground continues, and
sowing should soon be under way. The smallgrain crop in this State was poor, but hay was
abundant and is bringing a good price. Potatoes have only a fair prospect. In Iowa the
corn crop is generally safe from frosts and
should produce a good average return. Plow*
ing and seeding are in progress where the land
is not too dry. The hay crop is expected to
furnish the farmers with plentiful feed for
their live stock. Michigan corn appears 20
per cent to 30 per cent short of the normal crop.
Beans, beets, and potatoes are only in fair
quantities from present indications, but prices
are good for almost all farm produce, and the
farmer's income may be protected in this way.
Wisconsin seems to have a satisfactory tobacco
crop, a fair amount of corn in prospect, and a
poor potato supply, which is dependent upon a
long spell of hot weather to make a normal
crop.
Agricultural implements.—The situation in
this industry is gradually becoming more difficult, due to the increased cost of steel and the

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

necessarily increased selling prices. A decreased
volume is anticipated, and manufacturers seem
to be watching conditions with great care and
to be outlining their next year's policies along
conservative lines. Collections are generally
good.
Automobiles,—The demand for ears continues, although this is the usual season for a
slackening in the trade. Distribution in farming communities is good and the prosperity in
this industry is expected to continue as long as
farm products and general business activity remain at their present high levels. Collections
are good.
Building materials.—Common brick sales for
August are reported greatly in excess of August, 1915, and September should prove about
equal to the corresponding month a year ago.
Cement manufacturers enjoyed an increased
demand during August, as compared with previous months, but as building permits are almost stationary in a number of cities, little
change is anticipated in this industry during
the next few months. A car shortage and a
poor labor supply are causing some trouble.
Collections are good.
Goal.—The high lake rates and car shortage
have brought considerable activity to the Illinois and Indiana coal fields, and have stiffened
the price well above last year, with prospects
for a broad market at good figures.
Distilling and brewing.—Some new alcohol
orders have been placed with the larger distilleries, and general business seems in good shape.
The present high price of grain may, to some
extent, curtail the 1917 crop of Kentucky
whisky, and, based on the last two years' withdrawals, there is reported a four years' supply
in the Kentucky bonded warehouses at this
time. Breweries have been active during the
past few months, due to the hot weather, and
with favorable conditions during the balance
of the year a 2,000,000-barrel increase over 1915
is anticipated. Barley and malt continue firm,
with an upward tendency.
Dry goods.—Salesmen are on the road with
samples of goods for spring delivery, but it is




557

somewhat early to estimate the results. Present volume is good, both jobbers and retailers
moving their merchandise and complaining of
shortage in certain lines. Fear of a merchandise famine has resulted in some speculative
purchases, but this is by no means general, and
the situation appears sound at present, owing
to the employment of labor and the high prices
of grain and live stock.
Furniture.—This business continues quiteactive in spite of the increased prices. Labor
is difficult to obtain and collections vary with
local conditions.
Grain markets.—Demand for all kinds of
grain continues and a good foreign demand for
corn is anticipated. The car shortage delays
shipments both to and from terminals. Farmers are receiving good value for their produce.
Groceries.—Eeports from this district show
a healthy condition with a considerable volume
of merchandise moving at good prices. Higher
values are looked for, particularly in connection
with vegetables and fruits, but the consumer
appears to be in a position to pay the difference, and collections are good.
Hardware.—Trade is maintained at a high
level in spite of increased prices, nor is any falliLg off anticipated for some months to come.
Farmers are showing a disposition to buy, and
separators are in better than average demand.
Collections are generally good.
Leather.—This line has become somewhat
more active, and reports from shoe manufacturers are favorable as to prospects. Collections are fair. Leather belting sells in good
volume despite textile advances, and collections
are satisfactory.
Live stock.—Marketing has been uneven, due
to changing range conditions and the effect of
supply and demand on the prices. Heavy shipments of grass cattle are looked for during the
next few weeks. Foreign and domestic requirement of packinghouse products continues
and by-products are well taken by the trade.
Lumber.—Prices are firm, but sales decreased
in some centers during August. Eailroads and
car manufacturers are taking only their imme-

558

FEDERAL RESERVE BULLETIN.

diate needs. The high cost of building construction is probably exercising a detrimental
effect, but country sections which have held off
are beginning to come into the market. Business has been below normal, but wholesalers
report an indication of a stronger demand for
the balance of the year. Mahogany is at a high
price, due to the exorbitant ocean freight rates,
and the quotations are a handicap to volume
sales.
Mail order,—This industry is still engaged
in distributing merchandise on an increased
scale, and a satisfactory condition is reported.
Pianos.—Manufacturers are finding some
difficulty in securing the necessary raw materials and labor is scarce. Sales, however, continue to hold up well,, with the demand in certain instances ahead of the supply. Collections are generally satisfactory.
Shipbuilding —-Unusual activity is evidenced in this industry and construction work
is planned as far ahead as 1918. A good business is anticipated for-several years, due to the
tonnage destroyed in the war and the United
States naval construction program.
Steel.—Capacity is now sold by some mills
as far ahead as July 1, 1917, with premiums
offered for special deliveries. Prices are strong
with an upward tendency, indicating that manufacturers are finding it necessary to fill their
requirements at the present high quotations.
Tonnage offered is reported in excess of the
mill capacity.
Watches and jewelry.—Watch and jewelry
manufacturers are finding a good demand for
their products and retailers report increased
sales over a year ago. A big fall business is
expected and collections are good.
Wool and woolens.—Wool is still held at
good prices and manufacturers are using foreign w^ools, which they claim are cheaper.
There is some indication that a demand for
the domestic article will develop, as mills are
fully occupied, and England has placed an embargo on wool. In some instances retailers of
woolen clothing appear to have overbought,
but with a good demand these stocks may liqui-




OCTOBER 1,1916-

date themselves. Business for spring delivery
will be at advanced prices and conservative
buying is expected. The knit-goods trade is
beginning to notice the effect of Japanese competition, which produces merchandise at labor
prices that can not be approached in this country. Collections are good.
Clearings in Chicago for the first 21 days of
September were $1^181,000,000, being $272,000,000 more than the corresponding 21 days in
September, 1915. Clearings reported by 20
cities in the district outside of Chicago
amounted to $238,000,000 for the first 15 days;
of September, 1916, as compared with $168,000,000 for the first 15 days of September, 1915.
Deposits in the eight central reserve city
member banks in Chicago were $672,000,000 at
the close of business September 21, 1916, and
loans were $455,000,000. Deposits show an increase of approximately $11,000,000 and loans;
an increase of approximately $6,000,000 over
last month.
DISTRICT NO. 8—ST. LOUIS.

There has been little change in general business conditions in this district during the past
30 days, but what changes are noted indicate
an increased activity. Shipments and collections are at an unusually high level in practically all branches of industry. Business men
are optimistic as regards the fall and winter
seasons. The fall buying season has been at
its height during the last three weeks. Wholesale merchants in the large centers report an
unusually large number of buyers in the market, and sales in practically all lines have been
satisfactory, many houses reporting new records for this period. Wholesale dry goods,
shoes, millinery, men's and women's readyto-wTear clothing, and kindred lines are all
very active. Woodenware and hardware companies report similar activity. Wholesalers
and manufacturers generally report an increase in cost of merchandise for spring, and
the market in all the industrial line is at this
writing firm.
An increase in the total of building permits
in the large centers this August as compared

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

with the same month a year ago indicates activity in all building trades. The steel industry in this district reports substantial gains in
^shipments, and it is noticeable that the percentage of gains in unfilled orders on hand is
much larger than the percentage of gain in
^shipments for the corresponding period.
Packers report a steady market.for their products, and there has been a free movement, particularly in the provision division.
The demand for goods for export to belligerent nations seems to have widened in the past
six months, and the gain in the acid, chemical,
mining, and other industries, as well as those
supplying more directly munitions of war, may
be attributed at least in part to this export
demand.
Eetail trade has been greatly stimulated by
the recent cold snap, and retailers generally
report a highly satisfactory business.
From investigation it appears that the stocks
in the hands of retail merchants in the smaller
towns throughout the district are larger than
they were a few months ago, and are probably
heavier than is customary at this season of the
year. This may be attributed to the fact that
business has been good with the country merchant. There has been a steady, brisk, and
growing demand for merchandise, and, with
the high prices now prevailing for cotton,
wheat, and other farm products, there is a general feeling of confidence.
Building permits for August, 1916, as compared with August, 1915, show increases as
follows in the three largest cities of the district: Louisville, 14 per cent; Memphis, 10 per
cent; St. Louis, 12 per cent. Figures for
Little Rock are not available.
Post-office receipts for August, 1916, as compared with August, 1915, show the following
gain in the principal cities of the district:
Little Rock, 15 per cent; Louisville, 11 per
cent; Memphis, 12 per cent; St. Louis, 10 per
cent.
Figures on the gross railroad earnings for
August are now available and continue to show
the increases which have been so noticeable this




559

year. Movement of freight is exceptionally
heavy. This may be attributed in part to the
general prosperity of the district, but is also
due to the early and heavy shipments of cotton
and wheat from primary points. On August
1 the railroads of the country reported a surplus of approximately 10,000 cars, while on
September 1 the same report shows a shortage
of over 14,000 cars. The shortage of approximately 14,000 cars reported on September 1,
1916; compares with a surplus of 183,000 cars
reported on September 1,1915.
Labor conditions in this district have not
improved during the last month. Some factories report that their output is curtailed by
a scarcity of labor; other factories and industries have been hampered by strikes. Increases in wages which have been granted
have not improved the situation, and in general the labor situation is, to say the least,
unsettled.
Generally speaking, the temperature has
been somewhat below the normal in September,
to the date of this writing. The precipitation
map does not show the extremely spotted condition which was so noticeable in July and
August. The rains the latter part of August
were a great benefit to pastures and corn.
The final figures on the 1916 wheat crop are,
of course, not at present available. The high
price of wheat has, of course, stimulated the
movement from primary points, and shipments
seem to have been unusually heavy for this
time of the year. Fall plowing in the wheat
belt has progressed in a satisfactory manner in
those counties where the ground has had sufficient moisture to allow it to be worked. The
northwestern counties and a few of the eastern
counties of Missouri report the fall plowing
practically completed. Reports from other
counties in the State indicate that the ground
has been too hard and dry and little sowing
has been done.
Below is a table showing the composite conditions of all crops for the States wholly or in
part within this district, taken from the Government Crop Report of September 1. The

560

OCTOBER 1,1916~

FEDERAL RESERVE BULLETIN.

table shows a loss in condition for all States
The same conditions have affected the oats
in the district as compared with August 1, the crop in a similar manner, and we present the
decrease being especially noticeable in Missis- figures on this crop taken from the Governsippi, due to the damage to cotton, which is ment report as of September 1.
discussed more fully in a later paragraph.
OATS.
[000 omitted.]

Combined condition of all crops Sept. 1 {average, 100
per cent) and change during August.
Condition
Sept.'l.

Sept.l.

90.3
96.3
96.0
108.7
73.9
83.2
101.8

Arkansas...
Illinois
Indiana....
Kentucky..
Mississippi
Missouri...
Tennessee.

- 7.9
- 2.1
- 3.4
- 1.7
-11.6
- 3.3
- 0 8

Below are figures on the corn crop as of September 1, taken from the Government Crop Report of September 8. The report shows a further loss in condition, and the crop forecast
from the September 1 condition confirms reports of damage to the crop by drought and
heat in August. Frost has been reported from
a number of counties in the northern section
of the district, and this has probably caused
some further injury, although opinions as to
the effect of cool weather and light frosts at
this season differ widely. At this writing corn
is reported as maturing rapidly and should
be safe from damaging frosts in another week
or ten days. I t should be noted that the forecast from the September 1 condition is materially less than the final estimate for 1915 and
for the five-year average, 1910-1914.
CORN.
[000 omitted.]
Condition
Sept.l.

Change Forecast
from
from
Sept. 1
Aug. 1 condition,
10-year
1916 average. condition. 1916.
Arkansas
Illinois
Indiana
Kentucky . .
Mississippi..
Missouri
Tennessee...
Total.




62
71
79
89
65
54
87

77
78
82
82
82
72
83

- 6
— 4
- 3
- 1
- 3
- 6
0

43,474
336,740
185,784
114,345
52,385
149,085
89,158

Final estimate.

1915

Average,
1910-1914.

62,100
376,164
190,950
114,000
69,350
209,450
94,500

49,317
348,846
180,464
94,123
57,072
194,253
83,311

970,971 1,116,514

1,007,386

Final estimate.

Change in Forecast
condition from
from , Sept. 1
10-year Aug. 1. condition.
1916
average.

Change
during
August.

Illinois
Indiana
Missouri
Total

.

88
75
79

76
73
70

+1
-9
-4

1915

5-year
average
1910-1914,

169,258
55,412
35,891

195,435
65,520
31,850

139,74553,521
29,501

260,561

292,805

222,767

Figures on the cotton crop given below are
taken from the Government Crop Report of
September 1, as of August 25. The August 25
condition in every cotton-producing State in
the district is below the condition at the same
time of year both in 1915 and for the 10-year
aveirage. There is a similar loss, as shown in
the change in condition column below, in condition from July 25 to August 25. The loss in
condition is particularly noticeable in Arkansas
and Mississippi, especially in the latter State,,
where it assumes formidable proportions. Reports from correspondents in Mississippi are
pessimistic, and serious injury is reported, due
both to excessive rains and to the presence of
the boll weevil. Reports from private sources
in Arkansas are only a little less discouraging;
one report from a trustworthy source reads as
follows:
We are now receiving reports of heavy deterioration from all sections. The hill lands are shedding
young bolls and the green bolls are opening prematurely. Bottom lands are shedding and suffering from
boll rot. Boll weevil are active in central and southern
Arkansas. We will do well to make a normal crop.

The high price of cotton is, however, an encouraging factor, and under this stimulant
picking is general and the crop is moving to
market earlier and in a greater volume than in
the normal season. The effect of this early
movement is noticeable in the demand for
funds from Memphis.

OCTOBER 1,

'FEDERAL RESERVE BULLETIN.

1916.

COTTON.

Condition Aug. 25.

1916
Arkansas
Mississippi
Missouri
Tennessee

1915

10-year
average.

71
49
80
80

72
69
81
82

74
72
81
81

Change in condition July 25 to
Aug. 25.
10-year
1916 average.

—16
0
o

—6
-5
-1
-1

Reports from correspondents in Lonoke and
Arkansas Counties, Ark, report that the rice
crop is in good condition. The earlier planting is now being cut and the whole crop is
ripening nicely.
Reports from correspondents in both the
black and Burley tobacco producing counties in
Kentucky are optimistic. The season has been
favorable to tobacco planters and at this writing the crop is to a large extent housed. A
large harvest is reported from all sections, with
prices firm and farmers holding for further advances.
Pasture has suffered in sections where there
has been insufficient rainfall, but the situation
is much better than it was a month ago, and
there is now little or no indication of cattle
being forced to market on account of lack of
pasture. Silos seem to be gradually coming
into more general use.
The peach crop in this district has not been
up to the normal, and a large part of it seems
to have not been of the best quality. The river
movement of apples continues free and active
and satisfactory prices are being realized.
The quality is running good on the average.
The market for eggs, poultry, and dairy
products is firm, the supplies^ particularly of
the first quality, running lighter than usual.
Banking conditions show no change. Money
continues easy. There is the usual seasonable
demand for small notes from country banks.
There is no stringency due to the demands for
funds for crop-moving purposes, and no increase in rates in the immediate future is anticipated. Commercial paper has been in de-




561

mand by both city and country banks, the
volume of business being limited by a somewhat scanty supply. Country banks are reported as being in the market for commercial
paper at 4 per cent, while sales to city banks
have been made at 3 J per cent to. 3§ per cent
for best names. Clearings for the principal
cities of the district show important gains,
figures being as follows, for the week ending
September 9: Evansville, 16.9; St. Louis, 25.9;
Louisville, 14.5; Memphis, 80.1; Little Rock,
58.1. It should be noted that totals for the
week ending September 9 in every case are
larger than the total for the same week not
only of 1915 but also for the same week of 1914
and 1913.
DISTRICT NO. 9—MINNEAPOLIS,
Favorable progress of the flax crop in the
Northwestern States and the maturity of a considerable portion of the corn crop are important features of the agricultural developments
during the month. The yield of flax will be
about the average for the Northwestern States.
The quality will be high, and the flax harvest
is in progress under favorable conditions.
In Wisconsin and the southern half of Minnesota and South Dakota, the greater portion
of the corn crop has already matured and is of
good quality. In parts of North Dakota a
great deal of good corn will be harvested. In
the northern half of Minnesota and the northerly sections of Wisconsin there will be some
soft corn, and the yield will be uneven because
of the fact that the fields on low ground are
subject to excess moisture and have not made
the progress that was expected.
The results of threshing and the shipments
so far made to the terminal markets both indicate that the damage to wheat was not overestimated. Much of the new crop which is
now coming in is light in weight and of such
poor quality that it can not be used for milling
purposes. The available milling wheat is
therefore reduced. The same holds true to a
considerable extent as to receipts of barley,

562

FEDERAL RESERVE BULLETIN.

much of which is of light weight and so thin
that it is not available for malting purposes
and will be used for feed.
In some sections of the grain territory wheat
has been cut that will not be harvested, and in
many instances the crop showed such poor
quality that no attempt was made to cut it.
An unfortunate feature of the situation is that
many fields are overgrown with weeds, and the
farmers have not been able to do enough plowing to prevent them from maturing to a point
where the seeds will germinate. This presents
an unfavorable outlook, and the farmers will
have difficulty next year in cleaning up the
fields.
The hay crop throughout the district is unusually heavy and of good quality. Clover
and alfalfa have yielded well. There is an
immense amount of feed, which will be of assistance to farmers who have gone into stock
raising, and in districts where stock is an important factor the farmers will be prosperous
and will enter upon the winter in more favorable financial conditions. In the areas given
over to grain raising, conditions will not be so
good, although those who have held over wheat
from least year's crop have been able to market
it at very high prices, and to a considerable
extent offset the loss of revenue due to the poor
yields this year.
Over the greater portion of the district a
large amount of fall plowing has been done.
There has been considerable rain during the
month, which has interfered with fall work
on low-lying ground, and has to some extent
hampered threshing.
The poor quality of this year's wheat crop
has already provoked considerable discussion
as to an adequate supply of seed wheat for use
next spring. Farmers' organizations are already taking steps to provide against a prospective shortage.
The very high wheat prices have caused a
general advance in flour, which has in turn had
a tendency to hold down buying. Large buyers and users of flour are carrying short stocks
and purchasing very cautiously. The consen-




OCTOBER 1,

1916.

sus of opinion is that wheat prices will remain
high, although they may recede somewhat
from the present level.
The Government report gives an average
yield for Minnesota of 7.6 bushels of wheat per
acre; North Dakota, 5.6 bushels; South Dakota, 6.6 bushels; and Montana, 21.4 bushels.
The grain trade is inclined to accept the Government estimate of 94,405,000 bushels for
Minnesota, North and South Dakota, although
some authorities believe that the yield will go
as high as 100,000,000 bushels. Even at this
figure the crop is 189,000,000 bushels short of
the crop a year ago.
The short crop will have some effect upon
milling conditions at local points in the country, and some of the smaller mills are already
preparing to shut down on account of a shortage of wheat of milling quality.
The rather unfavorable crop situation has
not appreciably changed the general business
outlook. Concerns engaged in the distribution
of staple articles are doing a good business, and
trade at local points is holding up well. Sales
of automobiles are reported to have fallen off,
and the farm-machinery business has suffered
to some extent in the sections given over to
grain production. Local merchandising at the
larger centers is brisk and shows good gains
over last year.
Banking conditions over the district are
favorable. At the larger centers deposits show
the effect of the seasonal movement of the crop
and have fallen off, while loans and discounts
are increasing. Clearings are increasing as
compared with a month ago. Rates show little
change and remain at about the same level as
during the past six weeks. The banks have so
far been able to meet the crop movement demand without difficulty. The demand for currency for shipment to country points is not as
heavy as a year ago.
Construction is very active at all the urban
centers. Industrial concerns are still doing a
good volume of business and have had no difficulty in taking on new business to compensate
for contracts in process of completion. The

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN".

general outlook is considered to be good, and
it is believed that during the remainder of the
year the district as a whole will show a prosperous condition and that trade will continue
in good volume.
The call of September 12 showed St. Paul
and Minneapolis banks with combined deposits
of $236,069,000, an increase of $11,838,000 over
the call of June 30. Loans and discounts were
$176,846,000, an increase of $6,647,000. Cash
resources were $71,216,000, an increase of
$6,088,000. Deposits at outside points in the
district were shown to be large, and the call
found the banks in excellent condition. The
call indicates that the banking position of the
ninth district is very strong, and that the member banks are in an excellent position to meet
any call that may be made upon them on account of the movement of this year's crop.
Crop moving demands have so far been considerably less than a year ago, and the amount of
grain received at terminals has been small, due
both to the disposition of the farmers to hold
grain, and the reduced yields.
DISTRICT NO. 10—KANSAS CITY.
Although too late to benefit corn generally,
recent rains will help to offset the shortage of
that cereal. The improvement in the condition of grass over wide areas will mean a reduction in the requirements of outside feed. Oklahoma, Kansas, Nebraska, and Colorado will
probably secure another cutting of alfalfa.
The wheat crops of Kansas and Nebraska,
where hard wheat is raised, were excellent,
these being almost the only States where the
crop will exceed the domestic demand.
Very little plowing was done prior to September 1 in Kansas and Missouri and Oklahoma, owing to extreme dryness and hardness
of the soil, whereas the best results are obtainable when the ground is broken soon after harvest. The farmers of Nebraska have fared better. The new crop will not have as favorable
a start as if the ground had been broken one or
two months ago.




563

Late in August Oklahoma reported a cotton
crop that would bring into the State $75,000,000, claiming this to be a conservative estimate,
given at a time when the picking of the State's
crop had just begun. This estimate was based
upon a 1,000,000 bale crop, while the highest
estimates at this time are approximately 800,000 bales. An Oklahoma corn crop of 61,000,000 bushels is forecasted, whereas the average
crop for the past five years has been approximately 72,000,000 bushels.
Undoubtedly the corn loss in Missouri has
been very heavy. Present indications would
point to a total yield of slightly over 135,000,000 bushels, whereas the yield for 1915 was in
excess of 220,000,000 bushels. Estimates indicate that in this State the wheat acreage
seeded for the 1917 crop will be 20 per cent
short of that harvested this year.
Haying and thrashing have continued under
favorable conditions in Nebraska, and the bulk
of the corn crop is now beyond danger of injury by frost. Nebraska farmers are putting
in a larger area of winter wheat than ever
before, owing in a measure to the high prices
paid for grain; and the State is now claiming
a corn crop of 199,000,000 bushels^ whereas the
final estimate for 1915 was 213,000,000 bushels.
Colorado boasts of one of the best sugar-beet
crops it has ever had, and it is stated that the
growers will receive approximately $14,000,000 for this year's sugar-beet production, which
is far ahead of the total realized in Colorado
since the sugar beet became a crop in that
State. The third crop of alfalfa is being harvested and ranges are in good condition.
Light to heavy frosts have occurred in Wyoming, although generally growing crops continue green and thrifty. Beneficial rains have
caused appreciable improvement in pasturage,
hay, potatoes, corn, and growing cereals.
A doubtful season was rapidly turned to a
highly favorable one by the timely rains in
New Mexico. Most dry-farming crops are
assured and much land prepared for wheat
seeding, which promises to be larger than ever.

564

FEDEBAL KESEKVE BULLETIN.

A record of 30 years' standing was broken
September 15, when light frosts occurred in all
parts of Kansas. Heavy rains have fallen in
the central and eastern parts, but are still
badly needed in the north central and western
third of the State. There will be ample rough
feed, but a great deal of corn will be fed with
the fodder. Picking and marketing of fall
apples has begun, with a predicted yield of
2,000,000 bushels. It is claimed that Kansas
farmers held in excess of 37,000,000 bushels of
last year's corn stored in their bins in the
spring, which will to a considerable extent relieve conditions which might have been caused
by the shortage of this year's crop. The farmers of this State are also said to be holding in
their own granaries 50,000,000 bushels of this
year's wheat of a quality that has never been
excelled, anticipating record prices therefor.
Eeceipts of hay at the markets show a decided decrease this year to date as compared
with last year, and the prices for the greater
part of this season's crop have been exceedingly low. The hay yield, owing to the long
drought in many sections, is much less than
last year.
There is a good demand for the heavy receipt of both cattle and hogs. The export demand for beef and pork continues, hence the
market on all classes of stock fit for slaughter
has been strong and active. There is also a
heavy demand for cattle to be taken back to
the country for feeding, growing, and breeding. This demand largely originates in States
lying east of this district. The demand for
breeding cows can not be supplied, indicating
that farmers throughout the Middle West are
stocking up with breeding herds, a condition
very much desired, as the number of beef cattle
in the country has not increased in the same
ratio as the increase in population, and this
district could easily support several times the
present number. Very few corn-fed cattle are
coming to the market, the large percentage of
the receipts being made up of grass cattle.
Conditions in the grazing districts have improved with the rains, and cattle are reported




OCTOBER 1,1916.

as doing well. Ranchmen west of the Rocky
Mountains in Colorado are beginning to market their cattle and are receiving good prices
for the fat class as well as for stockers and
feeders. Hog prices are higher, with prospects
of a continuance on account of the high-priced
corn.
Examination of the statistics shows that
there has been a small reduction in the number
of stock hogs in the district amounting to an
average of 2 per cent as of September 1, 1916,
compared with a year ago.
Slaughtering of bogs at the packing centers
in this district named below, for the 27 weeks
since February 26, 1916, shows an increase of
797,900.
The following table shows the net increase
in receipts of cattle and hogs at the markets
obtainable for the first eight months of 1916
over the corresponding period of 1915:
Cattle.

Hogs.

Kansas City
Omaha
St. Joseph......
Oklahoma City.

247,282
124,470
7,554
29,750

258,043
221,839
299,047
221,383

Total

409,056

1,000,312

There has been a perceptible slackening in
development operations throughout the midcontinent oil field since the recent curtailment
in runs by the pipe-line organizations and the
decrease in the price of crude oil, yet it is the
general belief in oil circles that conditions can
not help but steadily improve. Uncontradicted
rumors are that a large foreign corporation of
immense resources will soon begin the erection
of a pipe line crossing Oklahoma and Kansas
and running to St. Louis. The general belief
in this action is one of the factors contributing
to the present confidence. Reserve stocks of
petroleum are said to be the lowest in history,
while there is undoubtedly a rapidly multiplying demand for all classes of petroleum products. Mid-continent production for the first
week in September showed a decrease of
120,000 barrels daily from the recent high rec-

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

ord. The Gushing (Okla.) production is now
at the rate of 63,150 barrels a day, whereas
this pool produced over 325,000 barrels daily
at its best point in 1915. Since July 24 there
have been seven distinct reductions in the price
of crude oil, the total reduction being 65 cents,
and the present price, which has prevailed
since the latter part of August, is 90 cents.
Activity continues in the Wyoming oil fields,
where large amounts are being invested. The
valuation in the oil fields of that State has increased from $1,446,478 to $2,572,422 between
this time last year and the present, and the increase is growing rapidly.
Continued activities are reported from the
mining fields, except those producing zinc, the
low price of which continues. A dependable
authority claims that it is now established that
the drop in prices is caused by importations,
Australia sending 30,000 tons monthly and
Mexico 15,000 tons monthly to the smelters.
The greatest activity in this district is in the
Miami field in Oklahoma. Joplin, the center
of this mining district, has been undergoing a
great building boom, indicating that the temporary mining slump has had little effect on
commercial activity. The production in the
Joplin district for the 36 weeks of 1916, ending
September 10, had a total value of $23,881,158,
whereas the value of the total production for
the entire year 1915 was but $26,038,650.
The Cripple Creek (Colo.) district shows a
production for the month of August totaling
95,268 tons, with a bullion value of $1,294,342.
The increase over July approximates 10,000
tons and $100,000 in valuation. Colorado
mines during the first six months of this year
gave employment to 15,000 men, an increase of
50 per cent over the number of men employed
in the same period in 1915. Sixty-four mining
companies in this State are said to have paid
out in excess of $80,000,000, and this does not
include all the mines in operation.
The recent increase of 6 cents in the price
of silver means an average increase of about
15 per cent in net earnings of the average silver
producer. Colorado marketed 1,505 tons of




565

ore and concentrates of tungsten, valued at
$3,648,000, the first six months of this year, according to figures very recently made public.
The mining outlook in the Goldfield (Colo.)
district is affording the utmost satisfaction to
those interested in the development work in
that district. Two flotation plants, with a
combined capacity of 1,200 tons daily, are now
in operation. This is a system of recovering
ores by oil flotation, by which system deeplevel ore can be treated at low cost and with a
high extraction of the metallic contents.
Labor conditions are generally upon a satisfactory basis. Unsettled conditions have prevailed in the ranks of mine laborers, but most
of the differences have been amicably settled
through conferences. One such conference involved the action of 35,000 miners. Eailroad
shopmen are demanding an eight-hour day,
with an increase of 5 cents an hour in wages.
Twenty-two western lines and more than 25,000
employees are affected. Included in this craft
are car repairers, boiler makers, machinists,
sheet-metal Workers, blacksmiths, and electrical workers. Colorado reports its biggest
problem as the present shortage of labor,
claiming that it is the most serious experienced
in 20 years. The demand for laborers of all
kinds has been unprecedented.
The foreign trade in horses and mules had
a notable increase for the month of August
over July.
In lumber, while some degree of quietness
prevailed in July, August saw the placing of
as many orders as wholesalers could readily
handle and prices have stiffened. Eeports indicate that business is holding up strong and
collections are unusually good. Eealty sales in
all parts of the district indicate a substantial
increase over a year ago. The building activities are strong, as indicated by permits issued.
The increase in new buildings started in Kansas City in August over those started in August
of a year ago amounted to a gain of 67 per
cent, while Oklahoma City reports that the
issuance of permits for August was greater
than for the same month during the past six

566

FEDERAL RESERVE BULLETIN.

years. Denver reports the total in building
operations for the first eight months of 1916
as $2,765,360 as against $1,821,340 for the corresponding period of 1915.
Food prices are steadily advancing. Sugar
is the one staple that has dropped in price. A
peculiar situation is noted in meat prices.
Fresh pork is selling higher than the cured
product. This is explained by the record price
for hogs. The packers are evidently not filling
their storage houses with pork for curing at
present prices.
Reports continue to indicate record-breaking
clearings in practically all of the reserve cities
of the district. Seven important clearing
houses in this district show an average increase
of 53J per cent for the week ending September
14 as compared with the same week in 1915.
The gains in deposits over a year ago are epoch
making. Figures are already available from
Kansas City and Omaha, the former city showing a net increase in deposits in all national
and State banks on September 12 of $69,000r
000 as compared with a year ago, while the latter city shows a $30,000,000 increase in the
same period.
Loan rates are being firmly maintained, not
because of any scarcity of money or the likelihood of scarcity, but because rates are as low
as would permit a fair return upon loanable
funds. Banks report a light demand for cattle money. Merchants are generally enjoying
an excellent fall trade and are making preparations for the greatest winter trade they have
ever experienced. The midsummer business
has been surprisingly large. The market values
of representative securities are steady at moderately lower levels. Farm loans are a highly
popular form of investment, the demand for
them appearing greater than ever before, being
materially in excess of the available supplies of
such paper. Postal receipts in important cities
continue on the increase. Less outside capital
was required for the crop-moving season than
anticipated, and probably less than ever before.




OCTOBER 1,1916..

DISTRICT NO. 11—DALLAS.

Early fall business in all lines is active and
the outlook for the immediate future is encouraging. An active canvass of the eleventh Federal Eeserve district indicates a genuine tone
of optimism in all sections. These conditions
may be attributed to several causes. The most
potent, however, is the high price obtaining for
cotton and cotton seed. The satisfactory prices
obtaining for these commodities, together with
ideal weather conditions, have caused a rapid
movement of the crop to market, and farmers
are selling as rapidly as the staple is gathered
and ginned. Receipts at the important cotton
centers of the district are practically double
the same period last year.
In some sections trouble is being experienced
on account of shortage of labor to gather the
cotton crop. In the black lands of north Texas
and in central Texas the crop is more nearly
normal and a conservative estimate as to the
yield would be approximately one-third of a
bale to the acre. The yield on some of the
upland and hilly lands, which have suffered
from lack of rain, will be from one-fifth to onesixth of a bale to the acre. The very satisfactory prices obtaining, however, will more
than offset the decreased yield and will make
good returns.
In most sections of the district feed crops,
such as hay, alfalfa, cane, sorghum, feterita,
milo maize, etc., are better than usual and reports indicate that there will be less occasion for farmers to buy feed to go through the
winter than in previous years. In southwest
Texas, however, and in the Panhandle section
and west Texas, where, on account of extreme
drouth the feed crops were cut short, farmers
will find it necessary to buy feed.
Banks over the district report increased deposits as the result of the liquidation from the
early crop movement and anticipate further
heavy increases as the season advances. Many
of the reserve city banks are having requests
from borrowers to pay their obligations before

OCTOBER 1, 1916.

FEDERAL RESERVE BULLETIN.

567

maturity, and inquiries are received as to re- Building operations over the district are in
bate of unearned interest on such paper. Simi- a healthy condition. This is especially true in
lar requests are being received by this bank. the larger cities, where new buildings and imRates remain easy. The crop movement has provements of a very substantial nature are
taxed the facilities of the member banks, and under way. Permits issued during the month
demands on this bank for shipments of cur- of August, 1916, show a substantial gain in
rency and silver have been unusually heavy.
valuation, although decreased in number over
While the loans of this bank show an in- August, 1915. The figures are:
crease of some $900,000 over a month ago, it is
noted that as a result of the liquidation from
1916
1915
the crop movement, and the large amount of
Number. Amount. Number. Amount.
paper with early fall maturity, the loans have
decreased some $700,000 within the last two Austin
$96,490
41
36 $27,501
310,499
154
98 153,117
weeks, the high-water mark being reached on Dallas
291,930
139
El Paso
114 265,910
333,707
72
53 127,125
September 6. While the abstracts of condition Fort Worth
50,254
145
Galveston
189 109,972
634,270
324
392 134,207
of member banks on the comptroller's call of Houston
250,000
149
San Antonio
191 181,260
45,964
20,546
29
22
September 12 have not been completed, ad- Waco
Total
1,053 2,013,114
1,295 1,019,638
vance reports show reserve city banks carrying
largely increased deposits over the call of June
Manufacturers of building materials find the
30, the increase amounting to over 20 per cent.
volume of business is quite satisfactory and
Clearings of the eight principal cities of the
district for August, 1916, show an increase of much better than last year. Lumber manu33 per cent over the same period last year. The facturers report a good demand, and prices,
figures are: 1916, $158,364,089; 1915, $118,- while unsatisfactory, considerably better than
at this time a year ago, with sales averaging
687,145; increase, $39,676,944, or 33 per cent.
There were cleared through this bank for the 15 per cent more than up to the same date last
period August 16 to September 15, 219,518 year. Demands for export lumber have been
materially curtailed on account of conditions
items, aggregating $69,762,212.
Good rains over the western part of the dis- in Europe, with lack of shipping facilities for
trict, in which the cattle industry is such an supplying such demand as exists. As a result
important one, have made the outlook for that of this condition there has been a curtailment
business more promising. Range conditions in production of approximately 10 per cent.
are exceptionally good and reports indicate Collections in the trade are said to be good.
Manufacturers of lumber advise that normal
that cattle will go into the winter in excellent
demand and stable prices are not anticipated
shape. The next 90 days should bring a demand for grass-fed cattle, and good prices are until European matters are adjusted and the
anticipated. Yearling steers are selling around work of reconstruction is commenced, when it
$35 per head, which is said to be the highest is expected an unprecedented demand will be
price in the history of the business. Lambs are made for building materials. Conditions prebringing as high as $8.30 per hundred pounds vailing in Mexico have also materially affected
lumber shipments.
delivered at shipping points.
The brick and clay products business shows
The receipts of live stock at the Fort Worth
an increase of 25 per cent over last year, with
stockyards for the month of August, 1916, show
a substantial increase in all classes over simi- satisfactory prices and indications for largely
lar period last year. The high price prevail- increased orders during the fall months. One
of the largest companies manufacturing tile
ing for hogs has caused heavy shipments.




568

FEDERAL RESERVE BULLETIN.

has at the present time on its books some of the
largest orders for this product ever handled.
Wholesale drug houses report a very much
improved business over last year and an increase in volume of from 25 to 30 per cent,
with collections good.
Wholesale grocers advise that business is
good and that collections are satisfactory.
One wholesale grocer interviewed stated that
their fall orders were the largest they had
ever received.
The farm-implement business is hardly normal, though an increase is shown over last
year. Collections are good. Mail-order houses
report an 18 per cent increase in all lines of
merchandise and are receiving heavy fall
orders. Wholesale leather firms state the volume of business is satisfactory and about normal for this season, with collections good.
Passenger traffic with both railroad and
interurban lines continues heavy, and a 15 per
cent increase is reported for the month of August over same period last year. Railroad
officials advise that freight traffic shows an increase of 30 per cent for August, 1916, over
August, 1915. All lines are having difficulty
in supplying equipment on account of the
heavy cotton movement, and the shortage of
cars is being seriously felt.
Labor is in good demand and well employed
at satisfactory wages. The heavy movement of
cotton has caused a scarcity of farm hands,
and in all the large cities of the district there
is an active demand for help for picking cotton.
The towns on the border where Government
troops are concentrated advise that the trade
iii all lines is unusually good. The large
amount being expended by the Government for
supplies such as groceries, feed, etc., is having
a healthy effect on business conditions. Trade
with Mexico is showing considerable improvement on account of more settled condition
across the border than has for some time heretofore prevailed.
A large increase in exports from the port of
Galveston is shown for the month of August




OCTOBER 1,1916.

over August, 1915. The figures are: 1915,
$4,918,953; 1916, $13,550,132; increase, $8,631,179. This increase is made up largely of shipments of cotton to Spain, Italy, England, and
France, as well as wheat to Switzerland, Belgium, France, and the Netherlands. It is likewise noted that shipments of spelter of 11,000,000 pounds, aggregating some $800,000, were
made to France, Italy, and England this year,
whereas there were no similar shipments in
1915.
The rice crop is now being harvested and
promises to be the largest ever produced in this
section. An increased acreage of 10 per cent
is reported. Based on the estimate of the Eice
Millers' Association, the increased acreage of
Texas alone will amount to some 25,000 acres.
Prices for immediate and future delivery are
below the average for the past five years, and
rice dealers and handlers predict that should
there be no losses during the harvest the range
of prices will be lower than those received during past years. The present prices are from
$3 to $3.50 per barrel.
Reports from the oil fields of Texas are not
encouraging. On account of the reduced prices
a good many outfits have discontinued operations.
The lignite mines of south Texas are being
worked extensively, and a very superior grade
of lignite is being produced. There is a good
demand for the output at the prices of $1 to
$1.25 per ton at the mines.
Mining companies are operating on full time,
and a number of new mines are being opened
in Arizona and New Mexico. Good prices for
copper have kept that industry active, and the
mines of New Mexico are unable to get sufficient labor to keep up with their orders.
There is a distinct and decided improvement
in conditions throughout the district. The
high prices for cotton and cotton seed have
brought about a condition at once extremely
favorable and yet full of danger if not met
wisely. Weather conditions are ideal. Cotton
has opened to an extent unknown at this time

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

of the year in the history of the staple. It is
being gathered more rapidly than has ever
been known. A bale of cotton, with the seed,
is bringing practically $100. One of the presidents of a national bank in central Texas controls a small bank which three weeks ago had
on deposit around $38,000 which now has more
than $240,000. The deposits of many small
country banks are swelled beyond all precedent.
It is estimated that the cotton crop of Ellis
County will yield in money more than $12,500,000, and that with good weather and prevailing prices it will be gathered and sold by early
in November. These figures should carry with
them their lesson of caution and conservatism,
as well as of prosperity. It is of the utmost
importance that the bankers of the cottongrowing section not only practice the utmost
conservatism themselves, but that they seek on
every occasion to impress on their customers
the wisdom and importance of wisely using
and husbanding their money.
DISTRICT NO. 12—SAN FRANCISCO.
Generally prosperous conditions prevail
throughout the twelfth Federal Reserve district, with an outstanding exception here and
there such as in lumbering.
Grain crops, though of less than the usual
volume, are commanding such prices that the
money returns are above normal. Although
there have been large shipments of wheat by
rail from the Pacific Northwest to the East,
many farmers have not yet sold in the expectation of higher prices. The barley crop fell
considerably short of the earlier estimates, but
with the carry-over there were approximately
350,000 tons (nearly 15,000,000 bushels) beyond domestic requirement and available for
export. Prices are $8 to $10 per ton higher
than last year.
Cotton in the Imperial Valley in southeastern California is now being harvested, the
yield being estimated at 400 pounds per acre,
with unusually long staple and correspondingly high value. Acreage is reported as 98,-




569

000, compared with 41,000 last year. The
value of this year's crop is estimated at
$5,500,000.
Hops will yield about 280,000 bales, some
25,000 bales more than last year. This is far
in excess of domestic requirements. The British embargo on exports has affected prices
most unfavorably, bids of 10 to 12 cents comparing, for example, with 43^ cents in 1911.
The apple crop of California, Oregon, and
Washington is estimated at 5,800,000 barrels,
which is a little above normal. The quality is
exceptional and high prices are ruling.
From California 11,202 cars of peaches,
plums, pears, and grapes have been shipped up
to September 13, 1916, as against 8,951 cars
at a corresponding date in 1915. Unusually
high prices are being received.
The emergency-revenue act of 1914 imposed
taxes on wines which in some cases were practically prohibitory. The new revenue law just
enacted by Congress modifies these provisions,
so that wine production may again be profitably carried on. Both wine makers and growers
of wine grapes are benefiting, the latter now
receiving $18 to $25 per ton. This benefit,
however, may be only temporary, as drastic
provisions are proposed in two prohibition
amendments to the California constitution
which will be voted upon in November. The
State viticultural commission recently addressed
a communication to the California development board, stating that the adoption of either
of the two amendments will ruin the winegrape industry. The wine-grape vineyards,
the commission states, aggregate 170,000 acres,
with a value of $100,000,000. It is estimated
also that there are 1,500 owners of vineyards,
employing 75,000 persons.
It is reported that for the year ending
August 1, 1916, the growers of citrus fruits in
California received about $40,000,000 for their
fruit which had a delivered value of $57,000,000.
The salmon pack of the Pacific coast, including Alaska, is about 20 per cent below normal. A leading packer states that from the

570

FEDERAL RESEBVE BULLETIN.

sellers' standpoint the salmon markets of the
world are in better condition than at any time
since 1900.
Mining continues its great activity with expanding output.
August petroleum production in California
increased about 1,000 barrels per day over
July, averaging 259,457 barrels daily. Shipments, however, were approximately 40,000 barrels per day more than in July, averaging 305,124 barrels daily, the greatest shipments in
one month. Stored stocks declined 1,415,669
barrels to a total of 49,718,180 barrels. The
State oil and gas supervisor estimates that
about $6,000,000 a year is expended in drilling
new wells, and that a total of $250,000,000 is
invested in the California petroleum industry,
apportioned as follows: Oil lands, $80,000,000;
pipe lines, $40,000,000; refineries, $15,000,000;
tank steamers, $15,000,000; wells, $100,000,000;
total, $250,000,000.
There has been no material change in the
unsatisfactory condition of the lumber industry, lack of transportation facilities being the
greatest handicap. Ships for the lumber trade,
with an aggregate carrying capacity of 30,000,000 feet, are now building on this coast.
Imports and exports through Pacific coast
ports during July aggregated $45,800,000.
Much grain destined for Europe is being
shipped overland. It is reported that 75 per
cent of the trans-Pacific transportation is now
under the Japanese flag and 4 per cent under
the flag of the United States. The Osaka
Shosen Kaisha is said to be the second largest
steamship company of Japan, owning 209,000
tons of shipping, with an additional 109,000




OCTOBER 1,1916.

tons in Japanese shipyards. This company is
reported as planning a new fast freight service
between San Francisco and Australia. Chartering has of late been dull, with important decline in trans-Pacific rates. Consul General
Anderson at Hongkong is quoted as attributing
this in part to the high value of silver exchange, restricting movement of Chinese products by preventing their advantageous sale
abroad.
Seattle commerce with Alaska, in the first
seven months of 1916, compared with a like
period in 1915, showed an increase of 43 per
cent and aggregated $23,600,000. It is estimated that this year's copper output in Alaska
will have a value of $25,000,000, as against
$5,000,000 in 1915.
Shipbuilding is exceedingly active, 28 per
cent of the steel ships now building in the entire country being under construction at Pacific
coast ports and 50 per cent of the ocean-going
wooden vessels. It is said that the Union Iron
Works of San Francisco now has contracts
booked aggregating $30,000,000.
Building permits in 17 leading cities of this
district were 32 per cent greater in August,
1916, than in the same month last year. Bank
clearings showed a 30 per cent increase. For
the first eight months of 1916 clearings of 17
cities, aggregating $4,700,000,000, were 22 per
cent greater than for that period in 1915. It
is noteworthy that real estate transfers in San
Francisco in the first eight months of 1916
were 45 per cent greater than during a similar
period of the exposition year 1915.
Credit conditions continue easy throughout
the district.

OCTOBER 1,

1916.

FEDERAL RESERVE BULLETIN.

DISTRIBUTION OF DISCOUNTED PAPER
BY CLASSES, SIZES, AND MATURITIES.
Commercial paper aggregating $17,351,800
was discounted by the Federal Eeserve Banks
during August, compared with $20,183,100 in
July, 1916, and $12,233,700 in August, 1915.
The largest monthly total of discounts is shown
for the Boston bank, which handled mostly
short-termed and large-sized paper offered by
local banks. The three southern banks are
credited with slightly over 40 per cent of the
total discounts as against 70 per cent for the
corresponding month in 1915. Discounts for
the eight months of the present year totaled
$100,078,600 compared with $98,215,500 for the
corresponding period in 1915.
Discounts of commodity paper, included in
the August total, figure to an amount of $507,500, as against $1,525,200 for July and an average of $1,412,100 for the seven months of the
present year. Nearly all of the paper was
handled by the Richmond and Atlanta banks.
During the present year the discounts of commodity paper totaled $10,392,100, of which
about 95 per cent was secured by cotton, while
the total since September 8, the date of the
first discount of this class of paper, was $20,707,200.
Trade acceptances (two-name paper) discounted during August by seven banks totaled
$230,400, compared with $199,000 for July, and
an average of $286,000 for the first seven
months of the present year and of $489,700 for
the September-December period in 1915. Discounts of two-name paper for the eight months
of the present year amounted to $2,232,600,
about two-thirds of which is credited to the
Richmond and Atlanta Reserve Banks.
The total number of bills discounted during
August was 8,542, compared with 8,790 for the
preceding month and 9,240 for August, 1915.
The average size of the discounted paper, because of the preponderance of large-sized paper
among the Boston discounts, shows the relatively high average of $2,030 compared with




571

$1,324 in August of the past year. Over 30 per
cent of the number and nearly 40 per cent of
the amount of paper discounted during the
month was in denominations of over $1,000 up
to $5,000. Bills of the largest sizes (over $10,-*
000)—132 in number—constituted nearly onethird of the total discounts for the month.
Small bills (in sizes up to $250) constituted
about one-quarter of the total number, though
less:than 2 per cent of the total amount of bills
discounted during the month. About 85 per
cent of the small bills were handled by the
three southern banks.
Of the total bills discounted during the
month 22.4 per cent was paper maturing within
10 days from date of discount; 25.7 per cent,
paper maturing after 10 but within 30 days;
19.8 per cent, paper maturing after 30 but
within 60 days; and 26.1 per cent, paper maturing after 60 but within 90 days. Slightly
over one million of agricultural and live-stock
paper maturing after 90 days (6-month paper)
was discounted during the month, Dallas, Chicago, Minneapolis, and Kansas City reporting
the largest amounts under this head.
On the last Friday of the month the banks
held a total of $27,032,000 of discounted paper,
compared with $27,572,700 about a month before and $29,275,100 on the corresponding date
of the past year. Of the total discounts held
on the last Friday in August the share of the
three southern banks was 62.5 per cent, compared with 55.5 on the last Friday of the preceding month and about 70 per cent on the last
Friday in August, 1915.
The number of member banks accommodated
during August through the discount of paper,
483, is but 6.3 per cent of the total of 7,618
member banks of the system, and shows a considerable decrease from the totals for the previous months. The three southern banks report a monthly total of 371 discounting member banks compared with 358 the month before
and 394 for August, 1915.
A total of eight member banks in Massachusetts secured $4,410,000 of discounts; 135 banks

572

OCTOBER 1,1916.

FEDERAL RESERVE BULLETIN.

in Texas about $2,228,900; 29 banks in North
Carolina—$1,275,600; 15 banks in Illinois—
$1,165,800; and 44 banks in South Carolina—
a total of $1,099,600. The aggregate amount of

discounts secured by 231 banks in these five
States was $10,179,900, or nearly 60 per cent
of the total reported to the Board for the
month.

Commercial payer, exclusive of "bankers' acceptances, discounted by each of the Federal Reserve Banks during the month of
August, 1916, 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 $2,500.
to $5,000. to $10,000.

Over
$10,000.

Total.

Per cent.

Banks.

It
5
Boston.....
0.1
New York
..—
Philadelphia........
Cleveland
2
Richmond
.... 19716.6
Atlanta (including
New O r l e a n s
branch).......
16112.3
2.9
Chicago
St. Louis.
•
Minneapolis
Kansas City.
.-•
Dallas
, 19813.6
San Francisco.......

1.7
2.0
4.4
14 2.3
537 96.4

9.5
28.7
24.5
10.3
398.4

7.0
7.3
7.6
6.1

557 219.5

16
64
71
42
383

29.2
119.7
137.6
85.4
665.6

290.5
88.0
214.8
38.5
456.1

408.0
283.8
285.4
29.9
822.6

54 3,720.0 223 4,466.0
" 57.3 212 586.8
65.0 242 739.5
172.7
204.3 2,443
2,879.5

2.6 25.7120,000
2.5 3.4 2,770
2.8 4.3 3,060
1.2 1.0 1,740
16.6 1,180

274.4
233 383.2
290 49.4 321124.: 260
485.8
223.71,436 1,752.5 16.8 10.1
132 52.8 171 141.4 177 292.7
427.8 24 728.1 798 2,224.7 9.3 12.!
83 15.:
563.8
53.0
59 110.2
16 3.0
66 24.8
72
246.3
304.4
40.0 317 781.9 3.7 4.5
54.2 128 210.8
36 6.7
70 25.7
78
230.4
151.7
191.3 400 870.9 4.7 5.0
75.1
64 99.5
56 9.3 101
105
73.9
58.8
370 356.5 4.3 2.0
484 79.1 358133.0 311 223.9 297 480.1
602.1
410.9 21 428.71,884 2,371.4 22.1 13.7
22.8
31 45.5
19 6.7
35
37.5
34.1
118 149.4 1.4
2.8
61147.51,581272.3 1,698 653.6 1,616 1,241.0 1,565 2,659.5 999 4,127.6 340 2,691.9 132 5,658.4 8,542 17,351.8 100.0 100.0

Total.

1,220
2,790
2,470
2,180
960
1,210
1,270
2,030

PERCENTAGES OF AMOUNTS OF EACH CLASS TO TOTAL.

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




To $100.

0.1
.6
.7
.1
.4

.3

Over $100
to $250.

Over $250
to $500.

1.3
3.4
2.8
.7
.4
.8
2.6
3.3
1.9

0.2
1.2
1.0
3.5
7.6
7.1
2.4
3.2
3.0
10.8
5.6
4.5

1.6 i

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

Over
$10,000.

0.2
4.9
3.3
6.0
13.8
11.4
6.4
6.8
6.2
21.1
9.5
15.3

0.7
20.4
18.6
49.5
23.1
21.9
13.2
14.1
24.2
27.9
20.2
30.4

9.1
48.4
38.6
17.3
28.6
27.7
25.3
38.9
26.4
20.7
25.4
25.1

6.5
15.0
29.1
22.3
15.8
15.6
19.2
31.5
17.4
16.5
17.3
22.8

83.3
9.8
8.8
.......

7.1

15.3

23.8

15.5

32.6

12.8
32.7
5.1
22.0

Total.

100
100
100
100
100
100
100
100
100
100
100
100
100

573

FEDERAL RESERVE BULLETIN.

OCTOBER 1*1916.

Commercial paper, exclusive of open-market purchases, discounted during August by each of the Federal Reserve Banks,
distributed by States, and maturities as of date of discount.
[In thousands of dollars.]
Paper maturing—
Number of Number of
banks
member accommoAfter 10
After 60
After 30
banks.
Within 10
but
but
but
dated.
days.
within 30 within 60 within 90
days.
days.
days.

Districts and States.

District No. 1—Boston:
Connecticut
Maine
Massachusetts
New Hampshire..
Rhode Island
Vermont
Total
District No. 2—New York:
New Jersey
New York .
Connecticut
Total

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

Tennessee
Total
District No. 7—Chicago:
Illinois
Indiana
Iowa
Michigan..
Wisconsin
Total
District No. 8—St. Louis:
Arkansas
Illinois
MississiDDi

Tennessee
Total




Total
commercial
paper
discounted.

56
67

158
56
17
48

8

2,576.3

1
1

50.0

402

10

2,626.3

129
480
15

1,690.2

. .*

3.0

2.3

6.7

50.0
6.0

1,690.2

118.0

30.8

.7

4,466.0

1
8
1

91.2

9.6
119.7
8.2

344.5
13.6

9.6
555.4
21.8

10

91.2

137.5

358.1

586.8

5

40 7
525.8

20 5
121.9

16
10.6

14.6

3.8

62 8
676.7

628

.

28.5

24
71
533

.

115.0

624

.

District No. 3—Philadelphia:
Delaware
New Jersey
Pennsylvania
Total
District No. 4—Cleveland:
Kentucky
.
Ohio....
Pennsylvania
West Virginia
Total
District No. 5—Richmond:
District of Columbia
Maryland
North Carolina .
South Carolina
Virginia
West Virginia
Total

After 90
days.

6

566.5

142.4

12.2

14.6

3.8

739.5

71
374

3
9

7.5

1.2
37.3

2.9
50 1

2.3
65.2

6.2

6.4
166 3

757

12

7.5

38.5

53.0

67.5

6.2

172.7

15
97
80
79
144
104

1
2
29
44
22
3

25.0
1.2

332.6
166.6
48.3
2.1

20.1
80
352.1
396 1
172.3
5.9

56.7
38.1
541.6
504 9
134.6
8.1.

24.3
30.8

76.8
46 6
1,275.6
1 099 6
'364*. 8
16.1

519

101

26.2

550.1

954.5

1,284.0

64.7

• 2,879.5

94
55
109
21
18
93

20
20
51
8
1
26

1.0

16.2
14.2
41.2

160.1
136.1
382.4
63 2

13.0
6.4
5.4
13 3

i.4

47.0

113.0
200.7
258.3
24 9
37.2
72.4

125.7

12.3

303.3
357.4
694.4
101 4
37.2
258.8

390

126

9.5

118.6

706.5

867.5

50.4

1,752.5

318
196
352
76
51

8
6
48
5
2

318.7
265.1

727.9
5.5
95.2
101.7

6.4
30.1
148.5

15.8
37.0
187.6
6.3
3.3

27.1
9.4
214.7
5.0
10.2

1,095.9
82.0
654 2
379.1
13.5

993

69

592.0

930.3

186.0

250.0

266.4

2,224.7

7
7

.4

26.4

15.2
19 4
26

5.2
84

68.0
69 9
50
23.4
26 6
310.7
278.3

1

299
13

67
158

.5

7.1

8.2

1.0

61

3

66
18
79
20

3
3
6
8

34.7
6.3

19.0
.2
245.2
140.4

A
1 2
5.7
51.9

20.8
42 1
24
4.0
19 9
23.2
79.7

469

37

41.4

431.2

96.4

192.1

4,410.0

9.6

53
1.9

20.8

781.9

574

FEDERAL RESERVE BULLETIN".

OCTOBER 1,1916.

Commercial paper, exclusive of open-market purchases, discounted during August by each of the Federal Reserve Banks,
distributed by States, and maturities as of date of discount—Continued.,
[In thousands of dollars.]
Paper maturing—
Number of Number of
banks
After 10
After 30
After 60
member accommobut
but
but
banks.
Within 10
dated .
within 30 within 60 within 90
days.
days.
days.
days.

Districts and States.

District No. 9—Minneapolis:
Michigan .
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 . .
New Mexico
Oklahoma
Texas
Total
District No. 12—San Francisco:
Alaska
Arizona
California
Idaho
Nevada
Oregon
.
Utah
Washington
Total

32
283
74
154
124
88

31
2
5
7
2

.4

755

47

.4

121
221
53
196
9
304
36

2
2
3
2
16
1

940

34

6
11
28
33
544

2
3
4
135

622

....

144

7
2

1
7
261
58
10
82
23
77

. .

.

519

Total
commercial
paper
discounted.

.7
15.4

160.7
2.3
4.8
13.8
33.0

116.9
6.3
11.0
29.4
5.6

130.0
4.0
13.5
12.3

718.8
12.6
29.3
56.2
54.0

326.9

214.6

169.2

159.8

870.9

.5
5.6
18.0

13.8
1.7
24.5
6.8
59.6

2.2
2.6
16.4
25.1
1.1
64.6
1.0

7.7
4.8
12.4
10.2
17.3
56.6
4.0

9.9
21.2
31.0
65.4
25.2
198.8
5.0

24.1

106.4

113.0

113.0

356.5

.5

99.5

2.9
8.5
33.3
756.4

7.0
24.8
15.0
1,071.1

13.6
33.1
4.3
301.4

23.5
66.4
52.6
2,228.9

.5

99.5

801.1

1,117.9

352.4

2,371.4

7.1

3.6
5.5

33.2
15.2

49.4
13.8

v

•8

2
1
1
13

310.8

After 90
days.

93.3
34.5
5.0

10.0

10.9
5.0
5.7

5.0

149.4

.9
5.7

7.1

19.1

54.1

64.1

RECAPITULATION.
[In thousands of dollars. 1

Districts and cities.

No. 1—Boston
No. 2—New York . .
No. 3—Philadelphia
No. 4—Cleveland
No. 5—Richmond
No. 6—Atlanta
No. 7—Chicago . . .
No. 8—St. Louis
No. 9—Minneapolis
No. 10—Kansas City
No. 11—Dallas
No. 12—San Francisco
Total for August
Per cent
Total for January-August, 1916...
Total for January-August 1915 1




Paper maturing—
Number of Number of
banks
member accommoAfter 10
After 30
After 60
banks.
Within 10 but within but within b u t within
dated.
days.
60 days.
90 days.
30 days.
402
624
628
757
519
390
993
469
755
940
622
519

10
10
6
12
101
126
69
37
47
34
144
13

2,626.3

7,618

483

After 90

days.

Total commercial
paper dis- Per cent.
counted.

.5
7.1

1,690.2
91.2
142.4
38.5
550.1
118.6
930.3
431.2
326.9
24.1
99.5
19.1

118.0
137.5
12.2
53.0
954.5
706.5
186.0
96.4
214.6
106.4
801.1
54.1

30.8
358.1
14.6
67.5
1,284.0
867.5
250.0
192.1
169.2
113.0
1,117.9
64.1

3.8
6.2
64.7
50.4
266.4
20.8
159.8
113.0
352.4
5.0

3,877.4
22.4

4,462.1
25.7

3,440.3
19.8

4,528.8
26.1

1,043.2
6.0

17,351.8

13,040. 6
21,226.7
16,962.4

22,655.9
35,016.4

29,480.4
34,293.0

13,676.9
11,943.7

100,078.5
98,215.5

566.5
7.5
26.2
9.5
592.0
41.4
.4

0.7

4,466.0
586.8
739.5
172.7
2,879.5.
1,752.5
2,224.7
781.9
870.9
356.5
2,371.4
149.4

25.7
3.4
4.3
1.0
16.6
10.1
12.8
4.5
5.0
2.1
13.7
.8
100.0

OCTOBER 1,

575

FEDERAL EESEEVE BULLETIN.

1916.

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

Federal Reserve Bank.

Boston.
New York...
Philadelphia
Cleveland . .
Richmond
Atlanta (including New Orleans
branch)...
.
Chicago

August,
1916.

$28,500

Total
for first
8 months
in 1916.
s^28,500

4,900
450,500

' 2,300
2,000
29,100

5,600
64,800
133,900
851,000

1,007,100

87,700

642,000
8,200

$5,700

Total to
Dec. 31,
1915.

Federal Reserve Bank.

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

August,
1916.

$167,800

25,000

1,958,800

.

$55,800

87,800
160,800
74 200

230,400

Commodity paper discounted by each Federal Reserve Bank from Sept. 8, 1915, date of first discount, to Aug.
Total to
Dec. 31,
1915.

Federal Reserve Bank.

Richmond
Atlanta (including New Orleans
branch)
St. Louis
Minneapolis

August,
1916.

Total
for first.
8 months
in 1916.

Total to
Dec. 31,
1915.

Federal Reserve Bank.

August,
1916.

Total
for first
8 months
in 1916.
$252,000
600
120,400
93,500
32,100
2,232,600

31,1916.
Total
for first
8 months
in 1916.

$2,881,400

$427,000

$5,562,500

7,032,300
99,800
25,300

73,100

4,132,300

Kansas City
Dallas...
San Francisco

$239,100
37,200

$7,400

$360,000
225,200
92,300

i9,*8o6

Total..

10,315,100

507,500

10,392,100

Commodity paper discounted by each Federal Reserve Bank during the eight months ending Aug. 31, 1916, distributed by

Richmond.

Cotton
Peanuts
Wheat
. .
Maize
Flax . .
Hops
Hay.. . .
Beans
Raisins
Oats
Oil
Prunes
Miscellaneous

.

Atlanta
(including MinneapoNew Orlis.
leans
branch).

$5,520,100
39,800

Class.

$4,128,500
900
1,000

Kansas
City.

7,000

3,000

1,000
4,132,300

19,800

360,000

Total.

$9,867,100
40,700
27,300
8,000
3,000
46,400
400
500
7,600
1,000
360,000
2,500
27,600

92,300

10,392,100

7,600
1,000

$360 000

5,562,500

$300
10,500
46,400

"1
2,600

San Francisco.

2,500
24,000

$218,200
$16,800

400
500

. . . .

Total

Dallas.

225,200

Amounts of commercial paper, exclusive of bankers' acceptances, held by each Federal Reserve Bank on Aug. 25,
by maturities.
Paper maturing—
Federal Reserve Bank.

Within
10 days.

After
10 but
within
30 days.

After
30 but
within
60 days.

After
60 but
within
90 days.

$114,100
245,900
31,200
53,100
2,458,600
1,735,400

$24,200
198,900
13,600
36,900
992,600
784,100
401,500
216,600
526,800
279,800
1,959,200
77,900

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

$469,400
53,700
200,000
48,000
760,300
291,900
816,000
119,100
108,200
204,800
500,300
69,000

$260,300
165,300
40,400
110,200
1,713,700
770,100
571,300
213,700
198,300
310,100
848,200
112,200

278,700
497,100
930,900
3,123,200
178,400

Total...

3,640,700

5,313,800

10,176,000

13.5

19.7

37.7

Percent




529,400

After
90 days.

Total.

Per cent.

$4,800
25,600
111,800
78,700
556,500
54,500
524,400
192,100
757,500
81,100

1868,000
663,800
290,000
273,800
6,037,000
3,660,200
2,874,700
882,600
1,854,800
1,917,700
7,188,400
518,600

3.1
2.5
1.1
1.0
22.4
13.5
10.6
3.3
6.9
7.1
26.6
1.9

5,512,100 I 2,387,000

27,029,600

100.0

20.3

100.0 I

FEDERAL RESERVE BULLETIN.

OCTOBER 1,

1916.

ACCEPTANCES.
Acceptances bought in open market and held by Federal Reserve Banks as per schedules on file on dates specified, distributed
by classes of accepting institutions.
[In thousands of dollars.]
Bankers 7 acceptances.

Date.

Bankers' acceptances.

Trade
accept- Total
Nonmember banks.
ances acceptbought ances.
Member
Total. in open
Trust
market.
banks. compa- State Private
nies. banks. banks.

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

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

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

1916.
Jan. 3
Jan. 10
Jan. 1 7 . . . . . .
Jan. 24
Jan.31 ..
Feb. 7
Feb. 14
Feb. 21
Feb. 28
Mar. 6
Mar. 13
Mar. 2 0 . . . . . .
Mar. 27
Apr. 3

7,160
15,494
16,492 8,057
16,908 7,655
16,348 8,070
15,834 8,174
15,681 7,876
17,581 7,985
17,661 8,194
17,436 8,755
17,182 8,670
20,323 10,032
20,563 11,280
21,128 12,864
21,000 13,573

20
20
132
253
275

110
110
192
161
352
472
343
204
396

362
370
425
363
356
336
347
392
408
408
470
408
411
473

822
938
1,010
1,441
1,510
1,456
1,851
1,841
1,841
1,781
1,631
2,467
3,078
3,262

23,838
25,857
25,998
26,222
25,874
25,349
27,764
28,088
28,440
28,041
32,456
34,718
37,481
38,308

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

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

10
10
10

180
180
180
489
528
460
460
462
546
678
629
722

23,838
25,857
26,178
26,402
27,054
25,838
28,292
28,548
28,900
28,503
33,002
35,396
38,110
39,030

Date.

1916.
Apr. 10
Apr. 17
Apr. 24
Mayl
May8
May 15
May 22
May 29
June 5
June 12
June 19
June 26...
Julys
July 10
July 17
July 24
July 31.
Aug. 7
Aug. 14... ,
Aug. 21, .
Aug. 28
Sept.4
Sept. 11
Sept. 18
Sept. 25

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

22,239
22,135
23,566
24,875
25,058
26,633
26,639
26,104
24,680
27,354
32,011
33,155
32,989
34,144
40,497
41,514
41,395
39,695
41,536
43,058
43,061
41,413
39,766
42,533
40,309

14,864
15,028
15,196
15,400
15,750
15,372
16,490
16,541
17,029
19,209
19,490
18,722
18,921
20,201
22,309
22,327
21,437
19,060
18,144
19,849
20,716
20,356
20,747
22,105
22,636

476
564
584
585
671
773
690
690
644
622
560
552
471
620
593
610
724
738
754
736
734
726
760
743
711

3,405
3,442
3,504
3,430
3,493
4,960
6,038
5,895
7,007
7,865
9,067
11,009
11,830
11,827
13,193
12,977
13,619
13,940
13,443
12,623
12,673
12,491
11,531
11,443
10,795

40,984
41,169
42,850
44,290
44,972
47,738
49,857
49,230
49,360
55,050
61,128
63,438
64,211
66,792
76,592
77,428
77,175
73,433
73,877
76,266
77,184
74,986
72,847
76,824
74,451

874
1,321
1,438
1,477
1,518
1,635
2,006
2,037
2,208
2,310
2,054
1,958
3,422
3,052
3,685
3,651
3,722
4,225
4,387
3,748
3,815
3,673
2,676
2,673
2,796

41,858
42,490
44,288
45,767
46,490
49,373
51,863
51,267
51,588
57,360
63,182
65,39&
67,633
69,844
80,277
81,079
80,897
77,658
78,264
80,014
80,999
78,659
75,523
79,497
77,247

Amounts of acceptances held by the several Federal Reserve Banks at close of business on Fridays, Aug. 25 to Sept. 22 >
1916, distributed by maturities.
[In thousands of dollars.]

Acceptances m a t u r i n g -

Within 10 days:
Aug. 25
Sept. 1
Sept. 8
Sept. 15
Sept. 22
From 11 to 30 days:
Aug. 25
Sept.l
Sept. 8
Sept. 15
Sept. 22
From 31 to 60 days:

New Phila- Cleve- RichBoston. York. delphia. land. mond.

Atlanta.

Chicago.

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

1,629 •3,580
1,987 3,243
1,316
3,616
1,291
4,680
750 6,367

1,038
1,723
1,480
1,704
2,940

526
1,069
967
1,206
1,861

658
278
67
481

358
282
138
143
455

519
1,062
738
651
1,767

755
676
755
666
1,188

253
365
419
394
649

3,426
2,044
1,734
864
543

6,670
7,076
8,682
8,862
7,239

2,893
2,763
3,350
3,875
2,584

2,003
1,905
2,264
2,040
1,321

725
67
646
1,000
1,000

372
40
453
477
417

1,562
1,313
1 711
1,637
700

1,368
1,138
1,625
1,668
998

652
491
742
739

100
83
182
211
200

Aug. 25....
Sept.l
Sept. 8
Sept. 15.........
Sept. 22

1,567
1,491
1,781
4,147
4,921

14,229
13,092
10,908
9,287
7,663

3,712
4,293
4,958
4,021
3,427

3,225
3,258
2,863
2,669
2,466

484

400

2,307
1,813
1,509
1,668
2,302

2,364
2,245
2,049
2,283
2,222

1,483
1,457
1,315
1,588
1,264

220
433
735
919

Aug. 25.
Sept.l.....
Sept. 8
Sept. 15....
Sept. 22

3,769
4,094
5,400
4,645
4,550

4,943
3,926
3,728
4,887
5,619

2,326
1,887
1,883
2,328
2,754

1,249
866
470
908
1,572

1,295
1,115
943
1,012

47

536
715
582
642
821

1,099
973
531
506
1,215

721
621
448
303
597

685
603
216
121
255

10,391
9,616
10,235
10,947
10,764

29,422
27,337
26,934
27,716
26,888

9,969
10,666
11,671
11,928
11,705

7,003
7,098
6,564
6,823
7,220

725
725
1,324
1,335
1,796

1,750
1,642
1,822
2,031
2,477

5,683
5,303
4,901
4,968
5,575

5,586
5,032
4,960
5,123
5,623

3,109
2,934
2,924
3,024
3,176

1,005
1,156
1,230
1,333
1,411

From 61 days to 3 months:

Total acceptances held:
Aug. 25
Sept.l
Sept. 8
Sept. 15
Sept. 22




769
784

Total.

654
1,276
1,317
1,072
1,858

9,312
12,378
11,121
11,957
18,475

2,274
1,896
2,643
2,467
1,591

22,194
18,965
24,115
23,923
17,332

400

37
97
83
127

3,106
3,375
2,342
2,452
1,961

32,697
32,062
29,509
30,071
28,507

400
500
500
500
100

920
574
357
795
1,234

17,943
15,874
15,062
16,647
19,570

549
649
583
583
605

6,954
7,121
6,659
6,786
6,644

82,146
79,279
79,807
82,598
83,884

32
149
149

OCTOBER 1,

577

FEDERAL RESERVE BULLETIN.

1916.

Amounts of acceptances (in the foreign and domestic trades) bought in the open market by each Federal Reserve Bank during
the calendar year 19IS, and the first 8 months of 1916.
[In thousands of dollars.]

New
Boston. York.

Acceptances maturing-

Within 30 days:
Calendar year, 1915
6 months ending June, 1916
July, 1916,
August, 1916
Total for 8 months, 1916
After 30 days, but within 60 days:
Calendar year, 1915
6 months ending June, 1916
July,1916
August, 1916
Total for 8 months, 1916
After 60 days, but within 3 months:
Calendar year, 1915
6 months ending June, 1916
July, 1916
August, 1916
Total for 8 months, 1916
Total acceptances bought:
Calendar year, 1915
6 months ending June, 1916
July,1916
August, 1916
Total for 8 months, 1916

i Atlanta
Phila- Cleve- Rich- (includ- ChicaSan
St.
Minne- Kansas
deling New
Louis. apolis. City. Dallas. Frango.
phia. land. mond. Orleans
cisco.
branch).

1,246
4,728
2,038
1,477
8,243

4,552
• 754
983

2,377
5,063
1,169
1,101
7,333

22,211
34,435
Ul,161
5,508
51,104

497
350

5,406
10,959
3,556
2,069
16,584

191

183
459

216
915

311
770

4,810
5,389
1,948
1,390
8,727

1,324
4,321
2,036
1,335
7,692

1,219
2,500
1,262
827
4,589

1,536
1,635

72 5,782
2,657 7,362
412 3,277
916 1,752
3,985 12,391

1,801
5,472
2,401
1,717

1,455
3,151
1,334
1,053
5,538

270

613

71

961
62
46

19
261
8
250
519

816
1,840
849
362
3,051

2,116
5,472
2,855
1,256
9,583

250

46
2,126

238

3,196

14,105 25,834 7,565 2,963
25,832 44,226 19,527 7,061
1,395 14,368 5,049 3,663
4,340
3,661 2,153
31,567
28,237 12,877

250
1,540
1,205
446
3,191

11,471
24,049
1,391
4,062
29,502

746
1,267
406
855
2,528

374
1,151
294
382
1,827

"n

1

1,464
4,016
739
609
5,364

69

156
133
480

2,137
1,433
4
87
1,524

579
905
400

45
21
3
10
34

7
270

191
541

101
322
402
41
765

1

103

149
199

61
539
152
468
1,159

2,980
11,553
4,805
3,719
20,077

750
2,299
619
759
3,677

50

9,057
19,380
14,219
4,978
28,577

2,419 52,808
96,733
5,847
2,628 127,479
1,349
19,749
9,824 143,961

787
2,422

500
500

1,788
2,103

3,230
8,685
3,399
'649* 2,576
14,660

1,098
3,201

Total
for
system.

50

64,845
127,666
36,503
28,447
192,616

Corrected figures.

Distribution by sizes of acceptances bought in the open market by all the Federal Reserve Banks during August, and the
first 8 months of 1916.
To $5,000.

To $10,000.

To $25,000.

To $50,000.

To $100,000.

Over $100,000.

Total.

Acceptances bought in
open market.

August, 1916:
Bankers' acceptances
Trade acceptances.
Total
Per cent
Total a c c e p t a n c e s
bought during:
July, 1916...
June, 1916
May, 1916
April, 1916
March, 1916
February, 1916....
January, 1916
Total a c c e p t a n c e s
bought duringS
months ending August, 1916

29
327

$841,343
75,339
916,682
3.2

526 $1,633,337
1,533,168
1,012,891
847,351
941,908
789,675
546,959

562
335
269
288
267
194

2,768

395
27

$7,423,691 126 $5,181,830
411,856
158,173

67$5,597,926
~ 146,180

232 1,888,457 422
6.6 .....i

7,835,547 131 5,340,003
27.6
18.8

5,744,106
20.2

192$1,545,967
40 342,490

495 $4,026,432
737 6,238,168
219 1,755,224
281 2,305,281
234 1,983,554
159 1,307,989
1,720,758

809| $12,830,111 185 $7,662,059
853 13,739,638
8,209,613
312 5,960,425
313 5,420, .U6
3,896,184
356j 6,578,432
4,539,671
196 3,548,326
1,830,851
217 4,113,726
1,857,477

8,221,971 2,577 21,225,863 3,478

34 $6,484,610 1,112 $27,075,367
237,000 104 1,371,038
6,721,610 1,216

28,446,405

68 $5,065,021 29 85,286,683 2,212
83 6,763,226
5,913,336 2,463
62 5,698,417
4,221,630 1,059
32 2,697,334
3,332,850 1,000
3,779,223 1,071
62 5,095,263
3,326,375
21 1,613,614
707
1,284,593

95.2
4.8

$36,503,643
42,397,149
21,911,467
18,499,116
22,918,051
12,416,830
9,523,513

35

100.0

60,026,321 914 36,598,738 414 33,961,574 172 32,581,707 10,323 192,616,174

1 Of the above total, bankers' acceptances totaling $26,800,296 were based on imports and exports, and $275,071 on domestic trade transactions.
2 All trade acceptances were drawn abroad on importers in the United States and indorsed b y foreign banks.




578

FEDERAL RESERVE BULLETIN.

OCTOBER 1,1916.

Amount of short-term investments (municipal warrants) held by each of the Federal Reserve Banks at close of business on
Fridays, Aug. 25, to Sept. 22, 1916, distributed by maturities.
[In thousands of dollars.]

Warrants maturing—

Within 10 days:
Aug. 25.
Sept. 1..
Sept 8
Sept. 15..
Sept.22
From 11 to 30 days:
Aug 25
Sept. 1.
Sept. 8..
.
...
Sept 15
Sept.22.
From 31 to 60 days:
Aug. 2 5 . . .
Sept. 1
Sept. 8
Sept. 15
Sept 22
From 61 to 90 days:
Aug 25
Sept. 1
Sept. 8.
Sept 15
Sept. 22-.
. . . . .
From 91 days to 6 months:
A u g . 25

. . . .

. .

Sept 1
Sept. 8
Sept.15.. .
Sept. 22
Total municipal warrants held:
Aug 25
• Sept. 1.
Sept 8
Sept. 15 .
...
Sept.22.. •

New
Boston. York.

20
40
218
•

505
50
25
20
87

82

33

190
182
2,173
30
95

Philadelphia.

3,428
387
412

369
210

62
87
67

Cleve- Richland. mond.

Atlanta.

260

76

742
722

76
76

762
368
871

76
76

250
721

105
391

3,215
3,436

1,958
2,651
3,241

1,114
1,209
1,668

2,419
1,835

2,548
1.993

1,399
1,051

927
677
361

518
463
382

3,050
950
854
842
977

541
493
328
672
294

7,276
4,051
4,151
4,539
4,789

2,550
2,047
2,072
2,431
2,431

4,755
3,127
2,660
2,883
2,696

35
62

36
37

46
370

40
25

62

11

394
50

4,412
2,458
4,498
1,989
950

19
109
281

412
315
658

•

25

1,850

2,971
4,272
8,160
12,344
14,353

121
220
467

735
913

567
638

281
332

1.508
1,422

823
671

555
504

324
223

838
641

853
763
546

358
303
156

292
237
166

51
59
8

289
259
166

11,439
9,092
3,801
3,899
2,489

167
167
172
173
287

1,060
900
729
830
820

539
474
443
447
416

281
196
146
144
144

20
20
20
19
19

691
682
641
601
603

5,093
4,744
3,945
4,625
4,495

336
86

167
167

86
86

172
173
287

1,822
1,503
1,488
1,525
1,525

399
399

86

4,292
3,733
3,763
4,219
4,218

1,002
1,010
1,010

2,335
2,028
2,028
1,982
2,220

27,866
21,303
21,166
23,714
24,137

590
548
496
507
521

2,890
3,170
3,345
4,496
4,505

86
66

737
762
857

55
257
576

752
321
349
167

154
314
106
380
404

348
20
46
344
394

3,951

10
36
11
11

625
645
1,064
1,016
1,579
1,875
1,802

1,025

192
789
537

52
10
35
37
62

501

1,083
1,266

107
799
656

319
35
71
15
40

101
344

10

230
948

Total.

559
51
101
126
405

2,148
511
230
222
742

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

Chicago.

io
10
10

1,044
992

728
1,057

399
370
370

Total investment operations of each Federal Reserve Bank during the month of August, 1916 and 1915.
[Ir thousands of dollars.]

Bank.

Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
...
Chicago
St. Louis
Minneapolis...
Kansas City...
Dallas...
San Francisco.
Total:
August, 1916.
August, 1915.
8 months ending Aug. 31,
1916
8 months ending Aug. 31,
1915




Bills bought in open
Bills
market.
discounted
for
mem- Bankers' Trade
ber
accept- accept- Total.
banks.
ances. ances.
4,466.0
586.8
739.5
172.7
2,879.5
1,752.5
2,224.7
781.9
870.9
356.5
2,371.4
149.4

4,340.0
7,937.0
3,582.0
2,016.0
446.0
916.0
1,752.0
1,717.0
1,012.0
1,098.0
649.0
1,611.0

149.1
79.0
136.4

*4L4

4,340.0
8,086.1
3 661.0
2.152.4
446.0
916.0
1,752.0
1,717.0
1.053.4
1,098.0
649.0
^ 576.1

Municipal warrants bought.

City.

461.5
115.1
75.6
239.0
101.1
105.5
23.3
12.2

All
State. other. Total.

76.5

50.0
46.8

161.7

5.0
3.1

511.5
191.6
75.6
285.8
166.7
104.2
105.5
23.3
12.2

126.5

126.5

17,351.8 27,076.0 1,371.0 28,447.0 1,259.8
12,233. 7 4,656.0
4,656.0

238.2 104.9 1,602.9
11,750.0

965.1

United States bonds and Treasury
notes.
2 per
cent.

3 per
cent.

4 per 1-year
cent. notes.

348.0

348.0
25.0

.1
100.0
473.1
300.0

1.0

25.0

3.0
435.3

33,248.0

48,162.1 6,421.75 2,267.3

51.0

2.6
.1
100.0

2.6

25.0

100,078.5 183,737.5 8,879.2 192,616.7 59,309.9 3,540.0 482.5 63,332.4 35,292.95 3,635.82 4,153.0
98,215.5 33,248.0

Total.

501.1
735.3

Total investment
operations.

1916

1915

9,317.5
9,212.5
4,476.1
2,661.9
3,325.5
2,835.2
4,080.9
2,604.4
1,949.6
1,466.8
3,120.4
2,852.0

2,588.9
6,402.2
2,117.0
1,649.4
3,973.6
2,329.7
2,869.3
1,375.5
1,020.0
1,524.1
2,044.6
1,480.7

47,902.8
"""29 "375

50.0 43,131.77 399,159.37
8,689.05

188,314.65

579

FEDERAL RESERVE BULLETIN.

OCTOBER 1, 1918.

Sales of United States bonds and 1-year Treasury notes dwing the month of August, 1916.
[In thousands of dollars.]
Boston.

New
York.

Philadelphia.

Cleve- Richland. mond.

Atlanta.

Chicago.

St.
MinneLouis. apolis.

Kansas
City.

San
Dallas. Francisco.

Total.

l

...

60.0

50.0
538.0

195.0

82.2

60.0

2 per cent bonds
3 per cent bonds
4 per cent bonds

588,0

195.0

122.2

166.0

240.0

30.0

166.0

240.0

30.0 1 115.4

115.4

30.0

180.0

80.0
1,606.6

180.0

1,726.6

40 6

Total sales

40.0
30.0

FEDERAL RESERVE BANK STATEMENTS.
Resources and liabilities of the Federal Reserve Banks and of the Federal Reserve system at close of business on Fridays,
Sept. 1 to Sept. 22, 1916.
RESOURCES.
[In thousands of dollars.]
Phila- Cleve- RichAtdelphia. land. mond. lanta.

Boston.
Gold coin and certificates in vaults:
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Gold settlement fund:
Sept.l
Sept. 8
Sept. 15
Sept. 22
Gold redemption fund:
Sept.l
Sept. 8
Sept. 15
Sept. 22
Legal tender notes, silver, etc.:
Sept.l
Sept.8
Sept. 15
Sept. 22
Total reserve:
Sept. 1
Sept.8
Sept. 15
Sept. 22
Five per cent redemption fund
against Federal Reserve Bank
notes:
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Bills discounted—members:
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Bills bought in open market:
Sept. 1
Sept. 8
Sept. 15
Sept. 22
United States bonds:
Sept, 1
Sept. 8

•Sept. 15
Sept. 22
One-year Treasury notes:
Sept.
Sept.
Sept.
Sept.

1
8..
15
22




,

NewYork.

9,163
7,592
7,132
7,567

146,369 9,989
155,519 8,013
155,158 8,525
159,844 10,362

14,562
14,557
14,805
14,868

5,044
5,138
4,984
4,880

2,200
3,558
4,253
3,727

Chicago.

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

4,152
4,143
4,153
4,108

31,294
27. 716
26; 066
28,267

5,182
5,015
5,475
5,941

6,513
6,076
6,144
5,858

18,163
3,853 20,193
3,343 25,180
2,870 21,631

3,173
5,490
4,530
2,258

2,274 8,429
4,454 12,927
2,747 10,312
3,525 10,539

15,744
16,264
16,787
15,815

10,635
5,819
11,747
9,857

15,773
15,665
16,890
17,179

10,983
12,774
12,187
11,431

10,008
11,318
12,603
11,615

5
5
5

250
250
250
250

50
50
50
50

18
22
18

443
437
443
437

224
219
238
244

200
200
200
200

18
107
102
87

30
30
30
30

133
129
126
123

121
106
98
135

7,878
22,578
2,117
2,317

802
531
237

1,120
1,024

67
69
62
70

1,052
983
1,003
720

287
325
1,305
1,513

1,097
1,082
1,067
1,093

577
230
220
212

48
51
70
35

25,033
23,967
24,202
23,522

165.132
184,166
169,272
172,268

26,614
24,258
25,702
27,990

26,683
28,377
28,044
27,380

15,562
16,962
18,092
17,002

6,335
8,613
8,837
7,561

49,944 9,470 9,394 12,762
48,434 11.694 10,790 17,250
52,751 11,174 9,141 14,661
51,611
9,379 9,625 14,805

San
Total
for
Dallas, Francisco. system.

3,043 7,847 245,358
248,846
3,483
3,242 10,191 250,308
3,481 9,808 258,711
3,036 3,524
5,322 4,871 104,601
5,355 3,590 118,950
4,359 6,712 125,271
10 117,791
431
1,812
10
425
1,834
10
422
1,894
419
7
1,941

m

487
436
617
134

72
68
22

13,605
27,487
7,898
7,642

6,997 11,450 365,376
9,666 12,989 397,167
9.636 13,859 385,371
16,549 386,085

400
384
400
400

100
100
100
100

500
591
500
500

425
548
659
801

1,046
993
914

180
339
159

268
605
528
756

5,931
5,696
6,177

3,672
3,487

2,812
3,090
3,161
2,968

1,097
1,147
1,560

1,829
1,874
1,891
1,875

1,833
1,751
1,766
1,751

7,524
7,547
7,196
6,736

421
380
385

26,392
27,527
27,724
27,705

9,615
10,235
10,948
10,764

27,337
26,934
27,716
26,888

10,666
11,671
11,928
11,705

7,098
6,564
6,823
7,220

725
1,325
1,335
1,796

1,642
1,822
2,031
2,478

5,303
4,901
4,968
5,575

5.032
4,960
5,123

2,934
2,924
3,024
3,176

1,156
1,230
1,333
1,411

649
583
583
604

7,121
6,659
6,786
6,645

79,278
79,808
82,598
83,885

2,992
2,984
2,972
2,972

2,245
2,215
2,659
3,174

2,890
2,864
2,825
2,825

5,579
5,569
6,179
6,304

1,129
1,107
1,074
1,074

1,508
1,508
1,508
1,508

9,393
8,511
8,463
8,463

2,724
2,720
2,714
2,714

3,399
3,389
2,374
3,372

9,617
9,617
9,617
9,617

2,711
2,836
2,896
2,896

2,634
2,634
2,634
2,634

46,821
45.954
46,916
47,553

250
250
250
250

2,282
2,282
2,282
1,282

818
818
818
818

760
760
760
760

684
684
684

526
526

850
850
850

570
570
570
570

350
350
350
350

616
616
616
616

529
529
529
529 »

820
820
804
804

8,205
9,055
9,039
8,039

580

FEDERAL RESERVE BULLETIN.

OCTOBER 1, 1916.

Resources and liabilities of the Federal Reserve Banks and of the Federal Reserve system at close of business—Continued.
RESOURCES—Continued.
Boston.
Municipal warrants:
Sept.l
Sept.8
, Sept. 15
Sept. 22
Federal Reserve notes, net:

New
York.

Phila- Cleve- RichAtdelphia.. land. mond. lanta.

3,170
3,345
4,496
4,505

Due from other Federal Reserve
banks, net:
Sept.l
Sept.8
Sept. 15
Sept. 22

2,047
2,072
2,431
2,431

3,127
2,660
2,883
2,696

1,033
1,019
951

Sept.l
Sept. 8
Sept. 15
Sept. 22

4,051
4,152
4,539
4,789
14,524
12,588
13,842
9,718

443
747
544
507

314
330
351
345

1,949
2,188
1,182
3,144

4,403

66
24
44
200

345

44,533
44,560
45,704
47,017

,

All other resources:
Sept.l
Sept.8
Sept. 15
Sept. 22
Total resources:
Sept. 1
Sept. 8.*.-.;
Sept. 15.
Sept. 22

3,583
2,800
2,760
2,381

167
172
173

Chicago.

MinneSt.
Louis. apolis.

3,733
3,763
4,219
4,219

1,503
1,488
1,525
1,525

992
1,002
1,010
1,010

1,342
1,371
1,391
1,390

160
156

752

15,507
15,107
10,298
8,847

6,054
5,390
5,297
7,064

2,884
1,920
2,962
2,026
79
85

Total
for
Dallas. Francisco. system,.

1,065
1,268
1,224
1,561

2,741
1,070
722
1,519

Kansas
City.

78
684

5,200

73
102
52
62

262
308
268

78
65
79
195

242
1,107
376
204

648
366
527
749

426
167
186
330

216,619
233,651
221,596
228,636

43,640
42,713
44,639
46,497

47,703
47,927
48,636
48,110

24,273
26,609
27,527
27,395

16,659
18,490
17,660
18,076

86,393
86,628
84,672

26,937
28,242
27,736
28,765

399
399
370
370

2,027
2,027
1,982
2,220

21,302
21,166
23,714
24,137

2,009
1,845
1,672
1,700

20,890
19,324
19,975
16,080

2,826
1,534

3,380
1,898
1,465
721

5,009
4,512
4,742
2,403

135,607
i 28,706
128,937
129,266

176
185
199
181

269
496
693
858

338
276
144
122

3,031
3,296
2,969
8,451

22,926 31,840
23,602 31,432
23,044 31,788
23,077 30,685

22,159
23,655
23,098
20,837

31,890
32,183
33,003
33,462

607,402
632,594
627,742
631,701

i Items in transit, i. e., total amounts due from, less total amounts due to, other Federal Reserve banks.
LIABILITIES.
[In thousands of dollars.]
Capital paid in:
Sept.l
Sept.8.
Sept. 15
Sept. 22
Government deposits:

Sept.l
Sept.8
Sept. 15
Sept. 22

5,024
5,024
5,024
5,024

Member-bank deposits, net:
Sept.l
Sept.8..
Sept. 15
Sept. 22

.

,
.

11,596
11,596
11,601
11,601

5,221
5,222
5,222
5,222

5,998
5,997
5,998
5,997

3,363
3,364
3,365
3,365

2,491
2,490
2,490
2,490

6,675
6,675
6,675
6,676

2,792
2,792
2,792
2,794

2,590
2,591
2,591

3,025
3,045
3,046
3,044

2,691
2,691
2,691

3,924
3,919
3,921
3,921

55,390
55,406
55,416
55,423

5,070
3,668
2,803

12,269
8,056
5,887
4,871

6,005
6,264
6,372
5,975

2,453
2,152
1,970
2,047

2,017
2,507
2,905
3,470

3,326
3,354
3,542
3,748

5,562
3,810
2,957
3,528

4,758
5,051
4,294
3,523

1,054
1,089
1,117
1,072

2,172
1,942
1,765
1,502

2,205
2,122
2,169
2,130

4,027
4,221
4,418
4,713

50,918
44,236
40,199
39,947

34,325 182,684 31,963 39,252
35,747 207,703 30,744 39,778
37,736 203,838 30,685 40,668
40,066
43,831 212,164

14,408
15,769
15,207
16,091

9,256 76,445 19,387 19,282 24,005 9,751 23,939 484,697
10,123 75,908 20,399 19,922 23,526 10,563 24,043 514,225
9,441 76,996 20,584 19,336 24,041 11,147 24,664 514,343
74,468

20,878

4,383
4,858
5,169
4,357

1,573
2,506
2,175
2,335

19,407

Sept. 1
Sept.8
Sept. 15
Sept.22

Due to other Federal Reserve
Banks, net:
Sept.l
Sept.8....
Sept. 15
Sept.22
All other liabilities:

Sept.l
Sept.8
Sept. 15
Sept.22...

Total liabilities:
Sept.l
Sept.8
Sept. 15
Sept.22................




10,070
6,296
270

43,640
42,713
44,639
46,497

14,416
16,076
14,223
14,605

660
1,580
1,880

1,690
2,334
3,214
2,914

771
102
111
110
112

216,619
233,651
221,596
228,636

7,512
7,619
5,511
5,232

152

415
2,276
5,528

114
121
141
147
44,533
44,560
45,704
47,017

8,904

1,093
1,302
1, 111

66
1,570

24,828

518,456

23,994

1,690
1,674
1,634
1,034

Federal Reserve notes, net liability:
Sept.l..
:....
Sept. 8
Sept. 15
Sept.22.
Federal Reserve Bank notes in
circulation:

47,703
47,927
48,636
48,110

13
17
12
14

24,273
26,609
27,527
27,395

16,659
18,490
17,660
18,076

291
317
347
356
88,682
86,393
86,628
84,672

26,937
28,242
27,736
28,765

22,926
23,602
23,044
23,077

31,840
31,432
31,788
30,685

22,159
23,655
23,098
20,837

31,890
32,183
33,003
33,462

607,402
632,594
627,742
631,701

581

FEDERAL RESERVE BULLETIN.

OCTOBER 1, 1916.

Circulation of Federal Reserve notes at close of business on Fridays, Sept. 1 to Sept. 22, 1916.
[In thousands of dollars.]
New
Boston. York.
Federal Reserve notes issued to the
bank:
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Federal Reserve notes in hands of
bank:
Sept.l
Sept. 8
,
Sept. 15
p
S t 22
Sept. 22
Federal Reserve notes in circulation:
Sept. 1
Sept. 8.
Sept. 15
Sept. 22
Gold and lawful money deposited
with or to the credit of the Federal Reserve Agent:
Sept.l
Sept. 8
Sept. 15...
Sept. 22
Carried to net assets:
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Carried to net liabilities:
Sept. 1
Sept.8
Sept. 15
Sept. 22

Philadelphia.

Cleve- Rich- Atlanta.
land. mond.

Chicago.

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

16,087
16,447
16,656
16,858

3,353
3,347
3,340
3,331

6,241
5,977
6,955
7,928

12,863
13,344
13,324
13,802

487
612
801
713

1,727
797
828
158

1,342
1,371
1,391
1,390

160
156
430

1,065
1,268
1,224
1,561

9,063
9,002
8,920
8.840

9,655
10,259
10,509
11,538

14,360
15,650
15,828
16,700

2,011
1,976
1,949
1,941

6,081
5,821
6,022
7,498

11,798
12,076
12,100
12,241

7,363
8,005
7,696
7,652

9,377
9,332
9,271
9,185

5,272
10,871
5,340
7,181

12,787
16,447
13,653
14,385

3,353
3,347
3,340
3,331

6,241
5,977
5,956
5,928

443
747
544
507

314
330
351
345

612

797

1,342
1,371
1,391
1,390

160
156

4,383
4,858
5,169
4,357

1,573
2,506
2,175
2,335

10,068
10,502
10.447
10,392

72,995
74,651
76,773
78,869

7,363
8,005
7,696
7,652

1,033
1,019
951

14,524
12,588
13,842
9,718

443
747
544
507

314
330
351
345

9,035
9,483
9,496
9,533

58,471
62,063
62,931
69,151

6,920
7,258
7,152
7,145

10,068
10,502
10,447
10,392

72,995
74,651
76,773
78,869

1,033
1,019
951
859

14,524
12,588
13,842
9,718

9,377 10,142
9,332 10,871
9,271 11,310
9,185 12,251

10,323
10,314
10,139
10,124

194,465
199,218
202,530
209,778

183
97
185
173

2,009
1,845
1,672
1,700

24,084
21,437
23,121
18,143

14,998 19,855
15,396 20,328
15,556 20,479
16,212 22,412

8,314
8,467
8,424

170,561
177,781
179,409
191,635

12,863 14,050 12,343 10,323
13,344 16,003 20,425 10,314
13,324 14,254 14,968 10,139
13,802 15,101 17,180 10,124

177,035
199,218
185,161
193,110

2,009
1,845
1,672
1,700

20,890
21,437
19,975
16,080

1,065
1,268
1,224
1,561

15,795 20,038
16,003 20,425
15,954 20,664
16,801 22,585
797
607

607

1,093
1,302
1,111

1,570

97

7,512
7,619
5,511
5,232

14,416
16,076
14,223
14,605

Statement of Federal Reserve Agents' accounts at close of business on Fridays, Sept. 1 to Sept. 22, 1916.
[In thousands of dollars.]
San
Total
for
Dallas. Francisco. system.

Boston.
Federal Reserve notes:
Received from comptrollerSept. 1
Sept. 8
Sept. 15
Sept. 22
Returned to comptrollerSept. 1
Sept.8
Sept. 15
Sept. 22
Chargeable to Federal Reserve
Agent—
Sept.l
Sept. 8
Sept. 15
Sept. 22
In hands of Federal Reserve
AgentSept. 1
Sept. 8
Sept. 15
Sept. 22
Issued to Federal
Bank, net—
Sept.l
Sept.8
,
Sept. 15
£.
Sept. 22




New
York.

Phila- Cleve- RichAtdelphia. land. mond. lanta.

Chicago.

St. Minne- Kansas
Louis. apolis. City.

20,380
20,380
20,380
20,380

126,240
143,400
143,400
143,400

15,480
15,480
15,480
15,480

20,400
26,400
26,400
26,400

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

9,600 19,000 19,620 25,960
12,600 21,000 22,620 32,600
12,600 21,000 22,620 32,600
12,600 21,000 22,620 32,600

13,880
13,880
13,880
13,880

312,100
349,900
351,400
352,900

4,492
5,058
5,113
5,468

38,945
39,289
39,667
39^971

4,397
4,435
4,744
4,788

2,483
2,528
2,589
2,675

2,887
2,930
3,000
3,048

1,146
1,152
1,159
1,168

1,417
1,464
1,513
1,566

3,321
3,354
3,395
3,434

997
1,006
1,181
1,196

67,097
68,582
69,829
70,891

15,888
15,322
15,267
14,912

87,295
104, 111
103,733
103,429

11,083
11,045
10,736
10,692

12,677
12,632
12,571
12,485

12,092 17,513
12,021 23,470
13,460 23,400
14,901 23,352

8,234

18,493 18,203
10,739 20,474 21,156
20,454 21,107
10,718
10,690 20,432 21,054

22,639
29,246
29,205
29,166

4*520

14,300
29,460
26,960
24,560

3,720
3,040
3,040
3,040

3,300
3,300
3,300
3,300

1,950
1,150
2,150
2,650

1,426
7,023
6,744
6,494

4,881
4,881
4,881
4,881

1,762
4,762
3,762
2,762

5,630
7,130
7,130
6,630

2,408
5,153
5,153
4,253

2,601
8,821
8,541
6,581

2,560
2,560
2,560
2,560

50,358
82,100
79,041
72,231

10,068
10,502
10,447
10,392

72.
74!
'4,651
76,773
78,869

7,363
8,005
7,696
7,652

9,377
9,332
9,271
9,185

10,142
10,871
11,310
12,251

16,087
16,447
16,656
16,858

3,353
3,347
3,340
3,331

6,241
5,977
6,956
7,928

12,863
13,344
13,324
13,802

15,795 20,038
16,003 20,425
15,954 20,664
16,801 22,585

10,323
10,314
10,139
10,124

194,645
199,218
202,530
209,778

4,

15,160 17,000
15,160 17,000
15,160 18,500
15,160 20,000
4,908
4,979
5,040
5,099

8,221
8,212

1,597
1,861
1,882
1,910

507
526
546
568

12,883 245,003
12,874 281,318
12,699 281,571
12,684 282,009

582

FEDERAL RESERVE BULLETIN.

OCTOBER 1,1916*

Statement of Federal Reserve Agents' accounts at close of business on Fridays, Sept. 1 to Sept. 22, 1916—Continued.
Phila- Cleve- RichAtdelphia. land. mond. lanta;

Boston.

Amounts held by Federal Reserve
Agent:
In reduction of liability on
outstanding notesGold coin and certificates
on hand—
Sept.l
Sept. 8
Sept. 15
Sept. 22
Credit balances in gold
redemption fundSept. 1
Sept. 8
Sept. 15
Sept. 22
Credit
eral Reserve BoardSept. 1

New
York.

9,700
9,700
9,700
9,700

68,815
70,815
73,315
75,715

4,090
4,090
3,820
3,820

8,700

368
802
747

4,180
3,836
3,458
3,154

495
456
412

557
512
571
525

Sept. 15.
Sept. 22.




5,070
5,470
5,050
4,560

72,995
74,651
76,773
78,869

7,363
8,005
7,696
7,652

9,377
9,332
9,271
9,185

372
301
240
481

1,417
1,374
1,303
1,255
6,300
6,300
7,300
8,550

3,080
3,080
3,080
3,080

3,300
3,303
3,003
2,493

10,142 16,087
10,871 16,447
11,310 16,656
12,251 16,858

5,057
5,965
6,532
5,546

3,314
3,310
3,012
2,763

273
267

10,040
10,340
10,340
10,340

784
731

1,173
1,139
1,098
1,260

414
399

10,860
10,964
10,36$
10,345

9,100
9,200
9,200
10,100

1,130
1,230
3,530
5,580

9,900
9,900
9,740
9,740

41,700
43,390
45,430
51,230

1,745
1,700
1,700
1,700

7,695
7,700
5,696
5,405

17,610
18,173
17,369
16,668

6,241
15,795
5,977 13,344 16,003
6,956 13,324 15,954
7,928 13,802 16,801

20,038
20,409
20,664
22,585

10,323 194,645
10,314 199,202
10,139 202,530
10,124 209,778

1,771
1,727
1,718
1,907

7,697
7,700
6,190
5,765

17,839
18,702
18,452
17,981

341
317

3,050
2,810
2,710
2,710

1,000
2,000
3,353
3,347
3,340
3,331

San
Total
for
Dallas. Francisco. system.

4,270
4,270
4,270
4,270

10,820
11,320
11,320
11,620

251

4,870
5,470
5,970
5,070
10,068
10,502
10,447
10,392

St. Minne- Kansas
Louis. apolis . City.

2,850
2,850
2,850
2,850

4,900
5,100
5,100
6,700

2,890
3,420
3,420
3,420

Sept. 8
Sept. 15
Sept. 22

As security for outstanding
notesCommercial paper—
Sept.l
Sept. 8
Sept. 15
Sept. 22
TotalSept. 1
Sept. 8
Sept. 15
Sept. 22
Memorandum:
Total amount of commercial
paper delivered to Federal
Reserve Agent—
Sept.l

Chicago.

1,000
2,000.

674
654

1,350
1,350
1,350
1,350

124,475
127,675
129,36&
131,535

OCTOBER 1,1916.

583

FEDERAL EESEEVE BULLETIN.

GOLD IMPORTS AND EXPORTS.
Imports of gold, by customs districts, Jan. 1 to Sept 22, 1916.

Total.

St. Lawrence.

Ohio.

Michigan.

Dakota.

Buffalo.

Washington..

Southern California.

San Francisco.

Alaska.

Laredo.

El Paso.

Arizona.

New Orleans.

Florida.

New York.

Maine and New
Hampshire.

1

[In thousands of dollars.]

Week ending Aug. 25.
Ore and base bullion
Bullion, refined
United States coin
Total

27
462
489

3

8
2

2

6

10

2

3

10

15

1

3

6
4
4

3

47
129

1

72

166
687
5

92

48

92

3

72

858

41

129

6

4

83

191

Week ending Sept. 1.
Ore and base bullion
United States mint or assay
office bars
Bullion, refined
Foreign coin
Total

13

15

x

165
23
201

10

16

1
169 5,089

4

1
5,424
2,456

2 33
1

210 5,096

2,448

3

4

8,072

83

Week ending Sept. 8.
Ore and base bullion
. .
United States mint or assay
office bars
Bullion, refined
United States coin
^Foreign coin
Total

39

9

271
61

1

3

371

10

3

75

10

1

2

5

104

18

31

22,500

147

3

2

152

3

134 2,477

2

1

58
23,947
61
22,500

43,500

58
103 2,419

6,670

21,000

18

- Weekending Sept. 15.
Ore and base bullion
United States mint or assay
office bars
Bullion, refined
United States coin
Foreign coin
Total

26

3

11

461

73

26
34,904
1,005
4,845

94 24,985

162

2,412

2 433
10

10 741

5
26

2

9 661
1,005

268

1

2

163 2,701

120 27,423

73

41,241

50

5

311

Week ending Sept. 22.
Ore and base bullion
United States mint or assay
office bars
Bullion, refined
United States coin
Total

34

21

1

159

14

7

97

20
285
2 442

131 . . . . . .

21

18

1

Ore and base bullion
1 1,747
United States mint or assay
office bars
20,000 30,451
Bullion, refined
1,214 ""*45*
United States coin
Foreign coin
1 28,632

282

412

73

1

159

1

14 2,747

623

247 1,501

1

50

285
2,546
3,143

Jan. 1 to Sept. 22.

Total

20,002 62,044

45

5
9
296

143

116

174 1,639 14,989

. J a n . ' to 8ft pt 22, 1916.
Excess of gold imports ovei• p/xnnrt s for SR
Excess of gold imports over exports for corresponding period, 1915-




75 1,950

1,561 3,306
3
9,733

43

555

174

3 2,310

31 3,956 47,224

3

9,401
3,066
167,868 266,113
3,101
1,778
61,982 102,769

3,066
28 1,590 41,123
56
2,412
247 1,501

3 231,628 384,450

291,445
247,171

584

FEDERAL RESERVE BULLETHST.

OCTOBER 1,1916.

Exports of gold, by customs districts, Jan. 1 to Sept. 22, 1916.

Total.

Vermont.

St. Lawrence.

Montana a n d
Idaho.

Michigan.

Duluth and Superior.

Dakota.

Buffalo.

Washington.

Southern California.

San Francisco.

Hawaii.

Alaska.

New Orleans.

Porto Rico.

New York.

Maine and New
Hampshire.

[In thousands of dollars.]

Week ending Aug. 25.

Bullion refined domestic
United States coin

2
1,601
1,603

Total

1,592
1,592

1

1

19
3,197

ij

1

3,216

2

10
5

1

2,524
12
1,403

5

1

3,949

15
4
4

15

Week ending Sept. 1.

Ore and base bullion
United States mint or assayBullion refined domestic
United States coin
Total

8

2,524
746

1
2

5

654
654

3 270

11

7

1
1

Week ending Sept. 8.

Bullion, refined, domestic
United States coin
Total

12
52

100

52

100

15
195

12

15

3
28
31

210

15

Week ending Sept. 15.

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

1,035

131
12

5
1

2

6

1,166
18
2,750
49

1

2

1 032

1 715

1

49

2,067

1,764

143

3^983

Week ending Sept. 22.

United States mint or assay
ofPce bars .
. .
Bullion, refined, domestic
United States coin
Foreign coin
Total
Jan. 1 to Sep. 22.
Ore and base bullion
United States mint or assay
office bars
Bullion, refined:
Domestic
Foreign
United States coin
Foreign coin
Total
. ..




1

196
5
29
21

1

251

196
5
7

3

18
21

203

3

39

2

5

12

954
4,807
1,438
30,749
18,143
2 56,091

135

701
15

100

15

100

219

70
1

213

10,306
3

321

4

8

143 20,765

50

50

19
26

51

10
2

13 1 143 31,906

50

188

649

55

21

1

134

11,992

518
12

29
5

12

1 1.020

....„

750

1 2,994

762

1,422

15

5,897
1,443
53,724
19,730
93,005

585

FEDERAL RESERVE BULLETIN.

OCTOBER 1,1916.

EARNINGS ON INVESTMENTS OF FEDERAL RESERVE BANKS.
Average amounts of earning assets held by each Federal Reserve Bank during August, 1916, earnings from each class of
earning assets, and annual rates of earnings on the basis of July, 1916, returns.
Average balances for the month of the several classes of earning assets.
Bills discounted,
members.

Municipal
warrants.

$2,158,390
565,297
388,923
282,084
6,069,417
3,313,384
3,189,015
908,365
1,896,900
1,987,157
6,789,768
509,466

Total

$10,404,069
29,741,715
10,661,519
7,051,902
669,264
1,562,598
5,409,316
5,403,294
3,024,500
821,014
188,847
7,453,292

$3,006,000
2,210,028
2,935,677
5,591,387
1,167,871
1,508,000
9,464,842
2,729,387
3,420,200
9,643,380
2,681,750
3,033,298

$250,000
2,282,000
818,000
780,645
684,000
526,000

28,058,166

Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
...
St. Louis
Minneapolis...
Kansas C i t y . . .
Dallas
San Francisco.

82,391,330

47,391,820

7,905,645

Bills disBills
counted, bought
memin open
bers.
market.

,

Total

$6,471
1,929
1,307
1,090
21,403
11,957
12,366
3,352

United
States
bonds.

$625
5,705
2,067
1,958
1,729
1,330

7,750
25,117
2,178

$5,208
4,624
5,414
12,067
2,358
3,000
19,467
5,019
6,144
17,281
4,877
5,162

102,523

161,065

90,621

19,874

1,441
875
1,557
1,337
1,250

$2, 805,197
7, 396,920
2, 553,423
4 597,142
335,775
128,483
293,225
811,469
054,400
411,370
2,323,706

$18,623,656
42,195,960
17,357,542
18,303,160
8,926,327
7,038,465
22,356,398
11,422,515
9,746,000
13,478,921
10,189,365
13,819,762

27,711,110

193,458,071

Total.

Bills disBills
counted, bought
memin open
bers.
market.

5,506

$38,412
88,844
35,596
40,251
28,105
19,786
52,204
24,527
22,946
29,080
31,837
29,432

Per cent. Per cent. Per cent. Per cent. Per cent. Per cent.
2.95
2.04
3.55
2.21
2.80
2.43
3.00
2.47
4.01
2.35
2.79
2.49
2.98
2.17
3.96
2.28
2,83
2.42
2.95
2.55
4.56
2.25
3.06
2.60
3.00
2.38
4.16
3.08
3.05
3.72
2.98
2.35
4.26
2.33
3.79
3.32
2.43
4.58
2.22
2.81
2.76
2.17
4.36
2.23
2.93
2.54
2.98
2.12
4.74
2.25
2.88
2.78
2.95
2.12
4.60
2.25
2.68
2.55
3.00
2.00
4.34
3.16
3.68
3.00
2.01
5.05
2.43
2.51
3.00
2.80

66,937

441,020

One-year MuniciTreasury pal warnotes.
rants.

$19,460
59,125
20,679
13,432
1,748
3,086
10,158
10,217
5,755
1,563
506
15,336

570,000
350,000
616,000
529,000
500,000

Total.

Calculated annual rates of earnings from—

Earnings from—

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

One-year
Treasurynotes.

United
States
bonds.

Bills bought
in open
market.

$6,648
17,461
6,129
11,704
867
413
10,213
4,498
2,569
929

4.31

2.31

United
States
bonds.

One-year MuniciTreasury pal warrants.
notes.

2.26

2.97

2.85

Total.

2.69

DISCOUNT RATES.
Discount rates of each Federal Reserve Bank, in effect Sept. 28, 1916.

Maturities of
10 days
and less.

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

Maturi- MaturiMaturi- ties of
ties of
ties of over 10 over 15
15 days to 30
to 30
and less. days, in- days, inclusive. clusive.

Maturities of
over 30
to 60
days, inclusive.

Maturities of
over 60
to 90
days, inclusive.

Trade acceptances.
Agricultural
Com- bought Member
and liveOver 60 modity in open banks,
stock
To
To 30
paper. market. collatto 90
paper days, in- days,60
eral
inover 90 clusive. clusive. days, inloans.
clusive.
days.

3

3f-4

3-5

1
Rate for commodity paper maturing within 90 days.
2 Rate for bills of exchange in open-market operations.
3 Rate for trade acceptances bought in open market without member bank indorsement.
4 Rate for commodity paper maturing within 30 days, 3£ per cent; over 30 to 60 days, 4 per cent; over 60 to 90 days, 4J per cent; over 90 days,
5 per cent.
NOTE.—Rate for bankers' acceptances, 2 to 4 per cent.




INDEX.
Page.

Acceptances, distribution of, by sizes, maturities,
etc
576-578
Acceptances to 100 per cent:
Authority granted to American Exchange National Bank, Dallas, Tex
515
Authority of Board to grant, inadvertently
omitted from amendment to Act.
508
Bills of lading, reprint of act passed at last session
of Congress
515
Brodhead, J. Davis, appointed class C director of
Philadelphia Federal Reserve Bank
509
Business conditions throughout the 12 Federal Reserve districts
545-570
Summary of
.•
544
Circulars and regulations (series of 1916):
Special instructions No. 2
529
Regulation A .—Rediscounts under section 13.. 530
Regulation B.—Open-market purchases
532
Regulation C.—Acceptance by member banks
of drafts drawn to furnish dollar exchange... 534
Regulation D.—Time deposits and savings accounts
- - 534
Regulation E.—Purchase of warrants
535
Regulation F.—Trust powers of national banks. 536
Regulation G.—Loans on farm land and other
real estate
537
Regulation H.—Membership of State banks and
trust companies
538
Regulation I.—Increase or decrease of capital
stock of Federal Reserve banks
541
Regulation J.—Check clearing and collection.. 542
Clayton Act:
Applications of officers, directors, and employees approved and disapproved
507
Press statement announcing action of Board re
Kern amendment to
514
Clearing plan, operation of
511
Commercial failures in August
515
Directors of Federal Reserve banks:
Henry B. Thompson and J. Davis Brodhead
appointed to fill class C vacancies in district
No. 3
509
Annual election of, instructions regarding
510
List of directors whose terms expire in 1916.. 510,511
Directors of national banks, fees paid to
514
Discount rates:
Establishment of rate on promissory notes of
member banks
513




Page.

Discount rates—Continued.
In effect
585
Discounts, distribution of
:
571-575
Dividends of Federal Reserve banks:
Six per cent dividend declared by Dallas and
San Francisco banks
508
Ruling of the Board as to dafces for closing books. 511
Earnings on investments of Federal Reserve Banks. 585
Federal Advisory Council, meeting of
509
Federal Reserve Agents' accounts, statement of
581
Federal Reserve Bank statements
579,580
Federal Reserve note policy
512
Federal Reserve notes, circulation of
581
Gold imports and exports
583, 584
Gold Settlement Fund
520-522
Informal rulings of the Board:
Right of national banks to exercise fiduciary
powers in the various States
523
"Staples," definition of, as used in regulation
Q, series 1915
523
"Fiscal year" and the Clayton Act
523
Municipal bonds maturing in six months
524
Trade acceptances, circular of a New York company on
524
:
Minimum loan price on cotton
. . . 524
Law department:
Agricultural products or implements
526
Clayton Act interpretation, person serving as
officer, director, or employee of two nonmember banks or trust companies
526
National bank charters granted
515
National banks, fees paid to directors of
514
Press statement re action of Board on Kern amendment to Clayton Act
514
Promissory notes of member banks, establishment
of discount rates on
513
Resources and liabilities of Federal Reserve Banks. 579
State bank admitted to system
513
Supplement to par list to be sent to member banks
with Bulletin
513
Tax, war, repeal of, under schedules A and B of
emergency revenue act
512
Thompson, Henry B., appointed class C director of
Philadelphia Federal Reserve Bank
509
United States bonds, conversion of
512
Work of the Board
507-509

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