Full text of Federal Reserve Bulletin : September 1915

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FEDERAL RESERVE
BULLETIN




ISSUED BY THE

FEDERAL RESERVE BOARD
AT WASHINGTON

SEPTEMBER, 1915

WASHINGTON
GOVERNMENT PRINTING OFFICE
1915

FEDERAL RESERVE BOARD.
EX OFPICIO MEMBERS.
WILLIAM G. Me ADO O,

Secretary of the Treasury,
Chairman.

CHARLES S. HAMLIN, Governor.

FREDERIC A. DELANO, Vice Governor.
PAUL M. WARBURG.
W. P. G. HARDING.
ADOLPH C. MILLER.

JOHN SKELTON WILLIAMS,

Comptroller of the Currency.




H. PARKER WILLIS, Secretary.

SHERMAN ALLEN, Assistant Secretary.
M. C. ELLIOTT, Counsel.

TABLE OF CONTENTS.
Page.

Work of the Board
Address by Hon. W. P. G. Harding
Movement of crops
Digest of warehouse laws
State bank membership
Gold settlement fund
Discount rates
Informal rulings of the Board
Intradistrict clearance system
Trustee powers granted
Law Department
General business conditions
Gold imports and exports
Distribution of rediscounts
Acceptances
Federal reserve bank statements




.,49

251
252
258
260
263
264
266
267
270
272
273
278
286
288
292
294

FEDERAL RESERVE BULLETIN
SEPTEMBER 1, 1915

VOL. 1

WORK OF THE BOARD.

The work of the Federal Keserve Board
during the month of August has been largely
concerned with problems incident to the protection of the crop situation as affected by
war conditions. The Board's general policy
was outlined in its letter of August 3, 1915.
Among the further steps taken in the development of its policy, particular interest will
attach to a draft of regulations in preparation
providing for special rates on "commodity
paper'7; that is, notes, drafts, or bills of exchange secured by terminal receipts, shipping
documents, or warehouse receipts covering
approved and readily marketable non-perishable staples, and properly insured. It is expected that "commodity paper" of this type
will prove its efficacy particularly in meeting
the seasonal demands of the great cropmoving districts for credit facilities.
Consideration has also been given to the
extent of the assistance that the Federal
reserve banks could render one another by way
of rediscounting in case any Federal reserve
bank should not be able to meet all the requirements made upon it by its member banks out
its own resources.
Because of the absence of some of the members upon their summer vacations it was found
convenient to hold one meeting in New York
City, a central point that could readily be
reached by all. This meeting was held on
August 10, and at its close the following statement for the press was given out:
The Federal Reserve Board to-day held a
session at the Federal Reserve Bank of New
York. After the meeting was over it was
stated in response to questions that the meeting had been called for the purpose of clearing
up matters of pending business which had
been held open on account of the absence of
several members of the Board from Washington. As New York was within easy reach of
those who were absent, a session in this city
was determined upon.




No. 5

Those present were Governor Hamlin, Comptroller of the Currency Williams, and Messrs.
Miller, Warburg, and Harding.
Several State banks have been admitted to
the system after an examination of their condition by officers of the Federal reserve banks
[n which district they were located, and further
inspection of reports of their condition by the
Federal Reserve Board. A large number of
banks have been granted trust powers.
New conditions which seem to be desirable
]n connection with the admittance to the system of S tate banks have been worked out by
the Board and been put in final form.
Regulations for retiring national bank circulation and the refunding of United States
2 per cent bonds have been under consideration, both by the Treasury Department and
the Federal Reserve Board. These regulations have not been completed, but substantial
progress has been made upon them.
State Banks and Trust Companies.

Several additional State banks and trust
companies have been admitted to the Federal
reserve system during the month of August,
the number of such institutions which nave
joined the system now being 24. The new in~
stitutions admitted to membership during
August are as follows:
Broadway Trust Co., New York, N. Y.
Old Colony Trust Co., Boston, Mass.
Fidelity Trust Co., Kansas City, Mo.
Elmhurst State Bank, Elmhurst, 111.
Badger State Bank, Milwaukee, Wis.
Fort Scott State Bank, Fort Scott, Kans.
German-American Bank, Minneapolis, Minn.

New Orleans Branch.

Mr. Marcus B. Walker, of New Orleans, has
been elected a class " B " director for the branch
of the Federal Reserve Bank of Atlanta to be
located in New Orleans, and has been named as
manager for that bank. The bank will open
for business on September 10.
251

252

FEDERAL EESEEVE BULLETIN.

THE SOUTH'S COTTON PROBLEM.
ADDEESS BY HON. W. P. G. HARDING, MEMBEE
OF THE FEDEEAL EESEEVE BOARD, AT BIRMINGHAM, ALA., AUGUST 25, 1915.

One of the results of the consideration of the
cotton situation by the Federal Reserve Board
and its members was an address made by Hon.
W. P. G. Harding on August 25 at Birmingham,
Ala.
During the course of his address Mr. Harding read the following letter from the President
of the United States:
The WHITE HOUSE,

Washington, August 23,1915.
My dear Mr. HARDING:

SEPTEMBER 1, 1915.

some months ago, their purpose of preventing shipments
of cotton from reaching Germany and Austria, either
directly or through neutral countries. The orders in
council which became effective last February, have
aroused a great deal of protest in this country, the position
being taken that no belligerent had the right to interfere
with the shipment of noncontraband goods from a neutral
country to another neutral country. While these orders
in council have been the source of much irritation, it is
claimed that they have not been effective in accomplishing their object, and the marked increase in exports of
cotton from this country to Holland and Sweden, as well
as to Italy, up to the time that she also became involved
in the war, would indicate that Germany has been receiving practically her usual amounts of cotton through neutral
countries. It is now a matter of public knowledge that the
British Government and its allies have declared cotton an
absolute contraband, by which it is understood that it will
be subject to seizure, even when consigned to neutral
countries, unless the shipment is made in accordance with
the terms and limitations of the proclamation declaring it
contraband. As the annual takings of American cotton
by Austria and Germany amount to about 3,000,000 bales,
the attitude of Great Britain and her allies has created
much uncertainty in the cotton trade, and great apprehension on the part of producers of cotton in the.South.

Thank you sincerely for your letter of August 23. It
gives me just the information I desired.
What interests me more is this: It is evident from what
you tell me that the country banks with whom the farmer
and other producers directly deal, can get money at from
4 to 4£ per cent, and that the question whether the benefit of this advantageous rate is to be extended to the farmer
is in their hands. It is inconceivable to me that those who
CERTAIN BASIC FACTS.
are responsible for dealing directly with the producers of
the country should be willing to jeopard the prosperity of
It is well, in discussing the present situation, to keep
the country itself by refusing to share with the producer certain basic facts before us. The Census Bureau, in its
the beneficial rates now obtainable for money loans. I Bulletin of August 14, states that the world's production
think that we can confidently expect that the banks in of commercial cotton, exclusive of linters, grown in the
the cotton States and in the agricultural regions generally calendar year 1913,. as compiled from published reports,
will content themselves with a rate not more than 1 or 2 documents, and correspondence, was approximately
per cent above the rate which they themselves pay. I 22,255,000 bales of 500 pounds net, and that the consumphope that the facts which you have stated to me will be- tion of cotton, exclusive of linters, in the United States
come generally known among the producers of the country for the year ending August 31, 1914, was approximately
so that they may feel themselves free to exact of the banks 21,223,000 bales of 500 pounds net. The Bulletin further
with which they deal what they undoubtedly have a right calls attention to the fact that, except for the United
to expect.
States, cotton included in these figures refers almost exclusively to that used in spinning (and does not include
Cordially and sincerely yours,
large quantities which are consumed in the manufacture
WOODROW WILSON.
of felts, bats, etc.). It is, therefore, fair to infer that while
Mr. Harding said:
there apparently remained a year ago out of the cotton
A discussion of the cotton problem by a member of a grown in 1913, the equivalent of about 1,000,000 bales,
Government board, under conditions now existing, in- the world's requirements absorbed practically the entire
volves some delicate considerations, and it must be dis- production of the year 1913.
tinctly understood that what I shall have to say is an
The American crop grown that year was about 14,600,000
expression merely of my personal views, as far as it seems bales, so that the amount grown in other countries
proper for me to express them, and must not be regarded amounted to about 7,650,000 bales. The Financial
as reflecting the opinions of or as being binding in any Chronicle estimates the total visible supply of cotton in
manner upon, any person or official other than myself.
the world on August 13, 1915, to be 4,255,773 bales, against
Not since the days of the Civil War has cotton occupied 2,991,413 bales on the corresponding date in 1914—an
so prominent a place in international affairs as at present. excess in sight this year over last of about 1,250,000 bales.
By virtue of its use in the manufacture of propulsive
Stocks in Great Britain are estimated at 500,000 bales
explosives, its possession has become a necessity to the more than last year, while continental stocks are put
nations at war. Great Britain and her allies, having down as being 90,000 bales less. Stocks at Hamburg,
practical control of ocean transportation, announced, Bremen and Trieste are placed at 45,000, against 352,000




at those points last year. Stocks at Genoa, Havre, and
Barcelona show an increase of about 390,000 bales. The
stock of American cotton in sight on August 13 is placed
by the Financial Chronicle as 2,940,776 bales, against
1,561,413 bales on the same date in 1914, the distribution
being as follows:
August 13.

1915

Liverpool stock

r
Manchester
"
' stock
• '
Continental stock
American afloat for Europe.
United States port stocks...
United States interior stocks
United States exports to-day

1914

| 1,097,000
65,000
i 463,000
196,036
697,379
418,115

625,000
41,000
1513,000
40,346
228,316
113,751

..I 2,940,776

1,561,413

I

Total American

4,246

i Estimated.
COTTON PRODUCTION IN 1915.

Assuming that 22,250,000 bales represent the world's
normal consumptive power, and that the visible supply
is now 4,250,000 bales, it becomes necessary, in order to
understand the situation, to make a rough estimate of the
cotton production for 1915. It is, of course, admitted
that any estimate made at this time is merely a guess,
from which the actual result may vary very widely, but
it seems not unreasonable to assume figures based upon the
average estimates of those well informed in the cotton trade
and upon the average production per acre for the past 10
years. I think, therefore, that an estimate of 12,000,000
bales for the present American crop will not be regarded
as too low. It is even more difficult to form an estimate of
the amount of cotton grown in other countries, but. taking
the figures for 1913 (7,600,000 bales) as a basis, and making
allowance for the reduced acreage reported in Egypt and
India, it would seem that 6,000,000 bales would be a fair
estimate for all other countries. This would give us a total
crop available for the next 12 months, including what is
now in sight, of 22,250,000 bales. Conservative estimates
last year were that the war would reduce the world's
requirements of cotton by about 3,000,000 bales, yet the
exports of American cotton for the season just ended were
about 8,543,000 bales, as against 9,150,000 bales for the
preceding season—a difference of a little more than
600,000 bales.
The declaration of contraband against cotton will perhaps be much more effective in keeping it out of Germany than were the orders in council, but, even if it
be true that the world's cotton requirements by reason
of the war will be curtailed 3,000,000 bales for the coming
season this would just about represent the amount that
would usually go to Germany. The Census Bulletin of
August 14 shows that during the 12 months from August
1, 1914, to July 31, 1915, the consumption of cotton in the
United States amounted to 5,598,798 bales, against
5,626,078 bales for the 12 months immediately preceding.




253

FEDERAL EESERVE BULLETIN.

SEPTEMBER 1, 1915.

The bulletin gives the following figures as representing
cotton on hand in this country on July 31 :
Bales.

In consuming establishments
In public storage and at compresses
Total

1, 401, 484
1, 784, 812
3,186, 296

which compares with 905,762 and 425,102 bales, or a
total of 1,330,864 bales, for July 31, 1914. The consumption of linters during the 12 months ending July 31 shows
an increase over the preceding 12 months of nearly 100,000
bales, the exact figures being 403,389 bales in 1915 against
308,675 bales in 1914.
The exports of domestic cotton and linters during the
month of July, 1915, were nearly double those of July,
1914, the month immediately preceding the outbreak of
the war, the figures being 243,522 bales for July, 1915,
against 126,211 bales for 1914. Of the total exported,
58,944 bales went to Great Britain, against 43,777 bales
in July, 1914; none to Germany, against 41,291 bales in
1914; 27,209 bales to France, against 2,522 bales in 1914;
52,969 bales to Italy, against 22,758 in 1914; 104,400 bales
to other countries, against 15,863 in July, 1914. These
figures would indicate either a remarkable increase in
normal exports to all other countries last month or else
that Germany is getting her supplies of cotton through
those countries. Cotton spindles active during July,
1915, in this country are reported as 31,194,029, as against
30,676,835 in July, 1914.
VALUE OP THE CROP.

I have seen no estimate of the commercial value of the
crop of 1914 from governmental agencies, but other accepted authorities state that the value of the 1914 crop,
which, including linters, amounted to nearly 17,000,000
bales, was less by $386,000,000 than the crop of 14,588,591
bales produced in 1913. The Office of Markets and Rural
Organization of the United States Department of Agriculture has advised the Federal Reserve Board that reports
from 3,485 public and private warehouses in the cottongrowing States show a storage capacity of about 10,281,000
bales, and that similar reports from 823 cotton-mill warehouses in the same States indicate a storage capacity of
1,295,500 bales, so that, expressed in terms of flat or uncompressed cotton, the public, private, and cotton-mill warehouses in the cotton-growing States in 1914 had an aggregate storage capacity of 11,577,465 bales. The board is
further advised that during the present year efforts have
been made to revise and complete the warehouse list,
which, while still incomplete, includes at present 4,246
warehouses in the cotton-growing States, which are divided
into public warehouses and cotton yards numbering 3,188
and private and miscellaneous warehouses numbering
1,058. There are 58 public cotton warehouses outside of
the cotton-growing States, making a total on the department's list at present of 4,304. Details are as follows:

254

FEDERAL RESERVE BULLETIN.

Public and private warehouses and cotton-mill warehouses
(estimated) in use in the cotton belt in 1914, together with
the storage capacity and the number of bales produced in
1914, by States.
Public and private warehouses.

State.

Alabama..
Arkansas..
Florida...
Georgia
Louisiana.
Mississippi
North Care>lina
Oklahoma
South Care>lina
Tennessee.
Texas
Virginia...
Ail others,

Cotton-mill
warehouses.

Aggregate 1914 prostorage
duction
capacity
in runof all
ning
ware"bales.
houses.

Number.

Storage
capacity
in Hat
bales.

581
233
51
1,089
200
167

1,628,935
714,780
225,060
1,351,810
809,600
892,540

62
6
1
151
6
18

62,000
6,000
1,000
412,500
0,000
18,000

1,690,935
720,780
226,060
1,767.310
815,000
910,540

1,731,751
999,237
90,648
2,723,094
452,261
1,217,883

149
120

210,216
540,600

326

400,995
7,000

611,211
547,600

970,479
1,232,638

337
31
497
30

1,156,760
582,285
1,946,494
219,890

164
27

300,000
27,000
3H.000
19,000

1,456,760
609,285
1,982,494
238,890

1,560,195
372,068
4,390,200
25,277
140,109

Total.. 3,485 10,281,970

Storage

Num- capacity
ber.
in flat
bales.

19

823 1,295,495 11,577,465 15,905,840

Public, private, and miscellaneous warehouses and cotton
yards in the cotton belt, listed as of Aug. 1, 1915.
Public
Private
warehouses and misand cotton cellaneous
warehouses.
yards.

State.

Alabama
Arkansas
Florida
Georgia .
Louisiana
Mississippi
North Carolina
Oklahoma
South Carolina.
Tennessee
Texas
.
Virginia

...

...

Total

Total.

459
121
29
826
66
172
123
174
196
38
960
24

108
52
22
466
59
35
90
44
54
13
101
14

567
173
51
1,292
125
207
213
218
250
51
1,061
.38

3,188

1,058

4,246

Recent inquiries sent out with the view of completing
the warehouse list, have resulted in the addition of a
large number of warehouses in the cotton-growing States.
It appears that building activity in the last three months
has been great, especially in Texas, and it is thought not
at all unlikely that, before the present crop comes on the
market there will be 5,000 warehouses of all classes in
the South. Should this prove true, there will be storage
capacity in the Southern warehouses for not less than
12,500,000 bales of flat cotton, while the cotton mill warehouses will be able to take care of about 1,300,000 bales.
It is stated that there is the greatest diversity in the
character of these warehouses as to the materials used,
cotton handling facilities, location, fire hazards, and other
points. Many of the storage companies are not properly
organized and frequently their receipts are not considered
of much value as collateral. In many instances the




SEPTEMBER 1, 191©.

buildings are poorly constructed and so improperly located
that rates of insurance upon their contents are very high,
but practically all the cotton mill warehouses are of
standard construction with automatic sprinkler equipment, and carry very low rates of insurance.
The legal department of the Federal Reserve Board has
prepared an abstract of the laws of the cotton-producing
States, with especial reference as to whether or not the
pledgee of a cotton warehouse receipt obtains the first lien
on the cotton in question or whether his lien may be displaced by attachment or otherwise on account of any
indebtedness due by the owner of the cotton for labor,
rent, or any other account. The counsel consulted, in the
preparation of the digest, legal representatives of the Federal reserve banks of St. Louis, Richmond, Dallas, Atlanta,
and Kansas City, and the consensus of their opinion seems
to be that the holder of a negotiable warehouse receipt is
protected from all claims of subsequent lien holders and
subsequent creditors of the original owner of the commodity covered by the receipt. The rights of the pledgee
of a warehouse receipt are apparently superior to the unsecured prior claims of the creditors of the pledger. The
pledgee's rights, however, would seem to be inferior to all
valid claims upon the commodity obtained prior to its
deposit in the warehouse. Want of title in the pledgor will
defeat the lien of the pledgee, as would the nonexistence
of the cotton in the warehouse, for which latter, however,
the warehouseman is liable.
In nearly all the Southern States the landlord is given
a lien for rent and advances, which lien is superior to
the rights of the transferee of a negotiable warehouse
receipt, and in many States the warehouseman is also
given a prior lien for charges. Some States require knowledge on the part of the transferee that the crop was grown
on leased premises as a condition precedent to the recovery
of the landlord, while other States disregard this knowledge. The holder of a negotiable warehouse receipt appears, as a rule, to acquire such title as the person negotiating the receipt to him had, or had the ability to convey,
to a purchaser in good faith and for value. In other words,
the transferee of a negotiable warehouse receipt has exactly the same rights as the purchaser where the cotton
is sold and actually delivered, and is deemed in mosi
instances to be in actual possession of the cotton.
In view of difficulties that may arise in satisfying distant
lenders as to the validity under all conditions of warehouse
receipts for cotton offered them as collateral, it would
eeem that, for the present at least, loans on cotton must be
first negotiated through local banks in the South. These
banks have now ample facilities which they have never
before enjoyed for rediscounting the notes taken against
such loans, and it is for them more than for any othei
agency to determine the policy of the South in regard to
the marketing of the present cotton crop.
I would not assume to give any advice, without full
knowledge in each specific case, either to the producer of

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1915.

cotton as to the advisability of his withholding it from the
market, or to the merchant or to the banker as to the wisdom of assisting in such an operation. These are matters
for individual judgment, but I wish to call attention to
the fact that cotton is a commodity which has always
shown itself susceptible to marked and sudden fluctuations
in value. As a case in point, I may cite the 12 calendar
years, 1904-1914, both inclusive. In one of these years,
1904, the difference between the high and low point in
the price of cotton was 10.41 cents per pound, or more than
$50 per bale (according to official quotations on the New
York Cotton Exchange). The least range of values occurred in the year 1906 in extreme fluctuations of 2.65
cents per pound, or about $13 a bale, and the average annual fluctuation during the entire period of 12 years has
been 5.38 cents per pound, or about $27 per bale. While
cotton at some time during some of these years has sold
in the South around 6 cents per pound, the average price
during any year would have been satisfactory to the cotton
producer. As a rule, the active marketing of cotton takes
place during three or four months of the year, although
the process of consumption is one that goes on during the
entire 12 months.
The merchants and bankers of the South are well accustomed to making advances against crops still to be planted
or in cultivation, but they have usually been insistent
that as soon as the crop has ceased to be a potentiality and
has become a reality, that it be brought to market and sold
as rapidly as possible. Other obligations of the farmers,
such as for fertilizer, have, in many cases, been made
payable early in the fall, so, with all factors tending toward
congestion, the basic situation of the cotton market must
be exceedingly strong to prevent a drop in price during the
time when the cotton of the most needy producers is being
marketed. This year certainly no financial obstacles are
in the way of more orderly methods in marketing the crop.
I would not undertake, of course, to advise any individual
as to the course that he should pursue in marketing his
crop, but, viewing the situation as a whole, I am convinced that the results of a gradual marketing of the crop
this season will be far more satisfactory than would be the
case were the crop forced upon the market within a short
period.
AMPLE WAREHOUSE FACILITIES.

The South has now ample warehouse facilities for
properly caring for that portion of the crop on which loans
are apt to be negotiated, and the banks can provide ample
funds either out of their own resources or by use of their
credit in rediscounting paper secured by cotton to enable
them to aid materially in conserving the values of this
great crop. It has often happened heretofore that the
farmer has been forced to sell his cotton to meet the demands of his creditors, or, in cases where he had no pressing demands and found the price unsatisfactory, that he
found himself unable to negotiate loans upon his ware5554—15




2

255

house receipts, unless, perhaps, at a very high rate of
interest.
The bankers and merchants of the South have at this
time a great opportunity, as well as a great responsibility.
They are in close and intimate contact with the producers
throughout the cotton belt and are in the best position
to advise and assist them in taking the steps necessary
to protect their interests, which are also the interests of
the whole South. For the second time within recent years
we have seen a large crop sell for far less money in the
aggregate than a moderate crop brought the preceding
year. You have an opportunity of conserving the values
of the South's greatest single asset—its cotton crop—and
upon you, bankers and merchants of the South, rests the
responsibility of the weal or woe of a great agricultural
section during the next 12 months and perhaps for years.
Leading financiers of the country, in commenting upon
present conditions, which are due in part to the European
war, freely express the fear that the sudden prosperity
that has developed in some sections and along certain
lines of industry, will be followed by a period of wild
speculation and inflation. The banking reserves of this
country are now very large, being considerably more than
$1,000,000,000 in excess of legal requirements. The gold
holdings of the United States, over $2,000,000,000, are
larger than those of any other two countries combined.
Our trade balances are piling up at an unprecedented rate
and will probably amount to a billion dollars during the
last six months of 1915. Rates for the best commercial
paper are very low, 4 per cent or less, and the southern
banks, should they be able to collect within the next 60
days the amounts which they have out directly or indirectly on cotton, will be at an absolute loss to find a safe
and profitable investment for their funds. What better
security therefore, could a southern bank ask than the
obligation of a merchant or farmer which he has been
carrying on a crop not yet existent—what better or more
liquid investment, I say, could a southern banker find
than to carry this same obligation along for a few months
if necessary, secured by the actual cotton, properly warehoused and insured, and certain of a market?
ACTION FOR ORDERLY MARKETING.

Such general action on the part of southern banks
would greatly facilitate the orderly and natural marketing
of the crop and would, in a great degree, relieve what is
called "distress cotton," by which term forced sales of
cotton, regardless of market conditions, have come to be
known. While the rule is not invariable, it very often
happens nevertheless that after the producers and the
country merchants who have had most to do with growing
the crop, have sold their cotton, that the price advances
so that by planting time the stern resolve made by the
farmer a few weeks previous to reduce his cotton acreage
50 per cent is modified under the influence of the higher

256

FEDERAL KESERVE BULLETIN.

prices that he hears about, with the result that the reduction is very small. During the acute depression in cotton
last fall, perhaps all the farmers were determined to plant
but little cotton this year and in one State the legislature
placed drastic restrictions upon the amount of land that
could be planted in cotton, which restrictions, however,
were afterward removed at a later session. With the
improvement that came in January, February, and March,
the feelings of the farmers underwent a change. Sales
of cotton were made at 9 cents and even higher, and,
forgetting their recent plight, the farmers of the South,
despite their bitter experience and regardless of all the
advice and warnings of the Department of Agriculture,
the banks, and the merchants, reduced their cotton acreage
only about 15 per cent. Our experience last winter
should convince everyone that the economic law of supply
and demand is inexorable and unalterable. The situation
at that time was indeed a most serious one and many
desperate remedies were proposed wjiich seemed to be
justified by conditions then existing. Valorization
schemes were proposed and much pressure was exerted
upon Congress to authorize the purchase by the Government of a large amount of cotton at 10 cents per pound.
When this proposition, however, was referred back to
some of the States for separate adoption on their part, it
developed that there was but little public sentiment
behind it. The situation last year, as was to be expected,
finally worked itself out along natural and economic lines.
Only 47 per cent of the crop came in sight by December
31, against 70 per cent in ordinary years, and of the amount
in sight perhaps 50 per cent was held unsold for account
of the producers or the country merchants. A demand
gradually developed for cotton and the price advanced.
SITUATION GREATLY CHANGED.

The situation this fall is totally different from that which
confronted us a year ago. The present crop can be handled successfully only along economic lines, and if we are
really suffering from an overproduction of cotton, the true
remedy to be applied is curtailment of production. Experience has shown that the farmer is not impressed in the
spring of the year by figures showing a large amount of
cotton in sight unless he himself owns some of this cotton.
If the banks and merchants will carry cotton for farmers
this fall, the advances that they will make should prevent
a repetition of the chaotic credit conditions and general
trade depression which resulted last year, and if satisfactory arrangements for marketing the crop can be made
before spring that will b 3 good evidence that there has bacn
no overproduction. If, on the contrary, a considerable
portion of the crop has to be carried until planting time
for the farmers and the country merchants, a corresponding
reduction in acreage will almost certainly result.
The farmers will not be disposed to plant heavily if they
have a considerable amount of cotton on hand when the




SEPTEMBER 1, 1915.

planting time comes and a sharp reduction in acreage next
spring would most probably result in a demand for cotton
and a corresponding advance in price, for the cotton spinner makes it his business to anticipate the future and to
study carefully all the conditions relating to the production and marketing of cotton. As soon as the spinners
see that there is likely to be a small crop produced by
reason of greatly curtailed acreage, they will realize that
any surplus carried over will be necessary to prevent a
cotton famine in the fall.
Let it be remembered that the dread of the cotton spinners throughout the world—in the South, in New England,
in Canada, in England, in Germany, in Italy, and in
Russia—is a shortage in the supply of cotton, and that,
while they naturally desire to purchase their stocks of
cotton at low prices, there comes a time, after their wants
for some months ahead have been supplied, that they
become interested in sustaining or even in enhancing the
values of a commodity in which they have an owner's
interest. They look ahead also and have learned by experience that extreme low prices throughout a season will
bring about a curtailment of the next crop, with advances
in price often out of proportion to the reduction of supplies.
OBJECT OF BRITISH GOVERNMENT.

We should also consider the object of the British Government in issuing its orders in council and in its recent
declaration placing cotton on the contraband list. Why
is that Government, engaged in the most gigantic war of
all history, with perhaps its very existence at stake, so
anxious to prevent cotton from reaching the territory of
its enemies? Some have said that it is for commercial
reasons, that the Government is actuated by a desire to
depress the value of cotton in order that British spinners
may obtain their stocks at a low cost. This theory does
not stand in the cold light of reason.
Modern science within recent years has caused cotton to
become the basis of the explosives which are absolutely
necessary in modern warfare. Cotton is used in the manufacture of smokeless powder and in the production of the
high explosives used by heavy field artillery and by the
great guns on the mammoth battleships of the navies of the
present day. The statement has been made that every
time a battleship of the class of the Queen Elizabeth fires
her guns 12 bales of cotton are consumed. It is impossible to form an estimate of the amount of cotton that
is used in the manufacture of explosives. Belligerent
nations guard this secret closely, but our own Government,
through the Census Bureau, is making careful investigations and I understand that as soon as possible an estimate
will be made public, giving the amount of cotton consumed
for war purposes, including not only that used in making
propulsive explosives, but the amount required for other
purposes of war, such as wearing apparel for troops, for
tents, and for hospital and Red Cross uses. Many unofficial

SEPTEMBER 1,1915.

257

FEDEKAL BESERVE BULLETIN.

estimates have been made of the amount of cotton used for
these purposes, but they are practically of no value, as the
estimates for explosives alone vary from 600,000 to
3,000,000 bales a year. The figures that have been available so far relate to the ordinary commercial consumption
of cotton and are somewhat misleading.
The amount of raw cotton in sight, when considered as a
factor in the determination of prices, must be supplemented by a knowledge of the stocks of manufactured
goods on hand and by some idea of the amount of clothing,
made entirely or partly of cotton, on the backs and in the
wardrobes of the ultimate consumers. My information is
that at the present time manufactured stocks in the hands
of merchants are small, and, in view of the severe economies that have been practiced throughout the world
during the past 14 months, it is reasonable to assume that
supplies of clothing in the hands of the wearers are not
large.
The very uses to which cotton is now being put, which
have resulted in its being declared contraband, indicate
a consumption of cotton which is of great importance in
estimating the world's requirements. While the cotton
used for clothing and other commercial purposes is not
finally consumed until the goods wear out, involving a
period sometimes of two or three years, the cottcn that is
used in explosives goes up in smoke forever the very
instant a gun is fired. There is reason to believe that
both the Germans and the allies are watching keenly the
present cotton situation—that Germany is as anxious to
have cotton as the allies are to prevent her frcm obtaining
it—and it is not inconceivable that there maybe evidences
before very long of internaticnal competition for the
possession of the South's great staple.

have their purchases of cotton stored in this country for
their account until they can transport it to their own
shores?
COLD, HARD PACTS.

I have not viewed this cotton situation in an optimistic
light. I have tried to keep before me the cold, hard facts,
but the more I study the subject and the more information
that I receive bearing upon it the more I am convinced
that the present situation, while calling for intelligent
leadership and close cooperation, is by no means a desperate one. On the contrary, the immediate future has many
elements to inspire hope and confidence. The making of a
market is by no means a one-sided proposition. The buyers of cotton have a natural advantage in their greater
powers of analysis, in their concentrated financial resources,
in their ability to take their own time, but now, as always,
the movements of southern producers are closely watched
and evidences of staying power on their part are effective
in market quotations.
COTTON SOUTH'S GREATEST ASSET.

Men of the South, your cotton crop is your greatest asset.
The welfare of the South depends upon this crop being
marketed at fairly remunerative prices. The prosperity
or the reverse of the southern farmer means strength or
weakness to the merchants and the bankers of the South
and vitally affects trade and industry throughout this
entire country. It is within your power, regardless of any
untoward conditions that may exist, to protect your greatest
asset, if you will only make intelligent and courageous
use of your opportunity. Let Southern bankers wherever
possible make liberal concessions in their usual rates on
commodity loans. High-interest rates means forced sales.
MAY MAKE FOREIGN PURCHASE.
Present conditions fully justify low rates and Southern bankIt is at least a possibility that cotton will be purchased ers should be willing to forego temporary profits for the sake
in large quantities for foreign account and stored in the of security and solidity in the future. I am sure that the
warehouses of the South, to be shipped out as needed and Federal reserve banks may be depended upon under their
as opportunities for shipments arise. No one has ever power of rediscount to cooperate to the fullest extent with
accused the Germans of being lacking in far-sightedness. the banks in taking care of the cotton crop, and this assurTheir ability to look into the future and to provide for ance is, of course, not confined tc cotton loans, but extends
every contingency is marvelous. They are already looking to other staple commodities.
forward to what will happen when peace is restored and
As a final wcrd, I wish to remind you that the cotton
that they will make a supreme effort to recover their lost season is upon us. Already the fields are white down
trade with other nations can not be doubted.
where the gulf breezes blow, and soon the uplands, toov
Is it reasonable to believe that they would look with will glisten in the autumn sunshine. Let me impress
complacency upon the absolute control of the cotton mar- upon you that this is a time not for complaints or deket by the mills of England and America, permitting them nunciation, but for wise leadership, cool judgment, firm
to secure their supplies of cotton at very low prices, and resolve, and effective action. Bankers, merchants, and
defer their own purchases until after peace is made and farmers of the South stand together and act together for
take the chances of securing then their own stocks at much your common good ! Do not sit supinely on the ginhouse
higher prices? Is it not reasonable to believe that they floor to be smothered beneath a mass of cotton, but keep
will arrange to buy cotton as the spinners of other nations on top the heap, and feed it out at living prices to thebuy it, and can they not easily make arrangements to spindles and factories of a waiting world.




258

FEDERAL RESERVE BULLETIN.

MOVEMENT OF CROPS.

Attention has been given by the Federal
Reserve Board to the crop-moving problem,
and on August 3 the following letter was sent
to the chairman of the board of directors of
each Federal reserve bank:
SIR: There has been frequently in past seasons a congestion of farm products, accomEanied usually by high money rates, or at times
y actual difficulty in obtaining the necessary
funds and credits for moving these crops.
These conditions have been met for several
years past by deposits made with banks by the
Secretary of the Treasury for crop-moving purposes, and last year by the further expedient of
the issue of emergency currency authorized
under the act of May 30, 1908, as amended,
now expired by limitation. The Federal reserve act makes provision for meeting the demand for crop-moving funds, and is intended to
guard against a recurrence of past stringencies.
In order to forestall any possibility of congestion of crops this fall, or lack of accommodation
to move them, the board calls the attention of
all Federal reserve banks to the provision in the
Federal reserve act which have a special bearing on this subject.
Section 13 of the act gives specific permission
for the rediscounting for member banks of
notes, drafts, and bills of exchange secured by
staple agricultural products. The manifest intent of this provision is to enable producers to
market their crops in a normal and effective
manner. In view of the large surplus reserves
now held by the Federal reserve banks by member banks and by other banks throughout the
country, there should be no difficulty in affording the producers the assistance necessary to
enable them to market their products in volume corresponding to the power of the trade
to absorb them. In order to accomplish this
end, it is suggested that Federal reserve banks
adopt a definite policy with reference to rediscounting paper secured by documents in satisfactory form evidencing the ownership of
stored agricultural products. Through such a
policy, together with proper methods of warehousing, Federal reserve oanks can be a potent
factor in assisting the normal movement of
staple agricultural products from the field to
the factory or to the consumer. It is recommended that regulations governing the rediscount of notes covering advances on such products be issued by such of these Federal reserve
banks whose members are actively engaged in




SEPTEMBER 1,

1915.

financing the movement of such crops to the
market. In so doing the object in view should
be to assist effectively, as above pointed out,
in the normal movement of such products in
orderly transfer to the consumer. The carrying of products in behalf of speculators is
not permitted under the law, and member
banks can not certify the notes of speculators
as eligible since the act does not allow the rediscounting of notes, drafts, or bills of exchange covering "merely investments."
Special attention is herewith directed to the
marketing of the cotton crop. While the yield
of corn, wheat, and other cereals promises to
be large, there is every reason to expect that
these products will find a market in an orderly
way. Cotton, however, is peculiarly sensitive
to abnormal conditions such as now exist in
our export trade, and it is clearly in the common interest that credits based upon this crop
be protected as far as possible from the danger
of demoralization such as existed during the
autumn of 1914. No staple commodity is subject to greater variations in price than is cotton, which during the past 12 years has shown,
according to figures based upon official quotations on the New York Cotton Exchange, an
average annual fluctuation of 5.38 cents per
pound, the maximum price range during any
year of this period being 10.40 cents per pound
in 1904 and the minimum range 2.65 cents
per pound in 1906. It should be noted, however, that with two exceptions, there has been
no very great difference in the average price
of cotton for each of these 12 years, the exceptions being the year 1905, when the average price during the year in New York was
9.80 cents per pound, the lowest of the 12year period, and the other being the year
1910, when the average price per pound was
16.45 cents; but the average price for the
entire 12-year period was 12 cents per pound.
Sudden and violent fluctuations are clearly to
the advantage of neither the loaning banks,
the producer, the manufacturer, nor the consumer. They offer, on the contrary, an inviting field for the speculator; and should the
Federal reserve system, in making possible the
more normal movement of the crop, be a contributing factor in reducing these fluctuations,
it would have accomplished a great public
good.
It is, therefore, recommended that, in pursuance of the policy already indicated, the Federal reserve banks communicate with their
members, and with others who may be interested, for the purpose of directing attention

SEPTEMBER 1,

1915.

to the steps which must be taken to secure the
necessary cooperation. It is suggested that
the Federal reserve banks point out to their
members, and to the public generally, that those
who are engaged in cotton production, if they
intend to take advantage of the facilities
offered by the banks for carrying cotton,
should begin at once to arrange for its proper
storage and insurance as rapidly as ginned.
Federal reserve banks should particularly point
out to their members that they are prepared
to rediscount the notes of farmers and merchants secured by proper warehouse receipts
for cotton and accompanied by evidence of
insurance. Member banks offering these notes
should be prepared to state the grade and market value of the cotton securing paper, and the
notes should be of the usual collateral form,
providing the right to call for additional
security in event of material decline in the
market value. The amount to be advanced
per bale would be left primarily to the judgment of the member bank.
It is further suggested that Federal reserve
banks in the cotton States should call attention
of their members to the desirability of reserving storage space in localities where warehouse
facilities are inadequate for such cotton as will
be used as security for loans. While there is
not sufficient warehouse capacity in the South
to provide storage at any one time for the entire
cotton crop, it is believed that there are ample
facilities for the proper storage of all cotton
that is likely to be pledged as security for
loans. In a normal movement of the cotton
crop warehousemen at concentrating points
estimate that the maximum storage required
will not exceed 20 per cent of the total receipts
for the season. It should be made plain also
that compliance with the essential features of
the plan herein outlined, modified as circumstances may demand, will be necessary for the
normal marketing of this year's crop and for
the proper protection of those who are interested in its movement, whether banks,
producers, or manufacturers.
While there seems no reason to believe that
the world's present and potential supply of
cotton is out of proportion to requirements
during the next 12 months, it is nevertheless
important, because of our lack of adequate
shipping facilities as well as restrictions brought
about by the war upon free exports to all
countries, that ample means be provided for
the proper handling and effective marketing of
cotton.




259

FEDERAL RESERVE BULLETIN.

Similar steps may properly be taken by
Federal reserve banks whose members are
likely to be called upon to finance other agricultural products, wherever there is available
a system of warehouses, elevators, or other
approved means of storing and certifying
to given quantities of staple agricultural products.
The Board calls particular attention to regulation P, recently issued, with reference to
the subject of "Trade acceptances." Such
trade acceptances, when growing out of transactions involving the movement of staple agricultural products and being indorsed by a
member bank, are eligible for rediscount with
a Federal reserve bank in the manner indicated in said regulation, and their use should
aid materially in the marketing of the crops of
the country during the coming autumn.
The Board will be prepared from time to
time to pass upon sucn special phases of the
crop moving problem as member banks may
present to it through the Federal reserve
agents, who are brought into contact with
the special conditions prevailing in the various
sections of the country, and it will adapt existing regulations to such conditions as may have
to be met in facilitating the normal and economic movement of the staple agricultural
products of the country.
Respectfully,
CHARLES S. HAMLIN,

Governor.

Deposits in Federal Reserve Banks.

This statement was issued by the Secretary
of the Treasury on August 20, relative to tile
deposit of Government funds in Federal
reserve banks:
Secretary McAdoo to-day made clear his
policy with regard to the deposit of Government funds in Federal reserve banks, as
authorized by the Federal reserve act. The
Secretary said that he would deposit funds in
Federal reserve banks whenever the necessity
arises and it can be done with benefit to the
public interest. He pointed out that public
moneys had not yet been deposited merely
because the banks do not need them now and
have not yet found full use for their present
resources, which appear to be more than
adequate for the demand at this time.

260

FEDEKAL KESERVE BULLETIN".

Funds for Cotton Crop.

Secretary McAdoo, on August 23, issued the
following statement relative to deposits of funds
to care for the cotton crop:
Secretary McAdoo announced from North
Haven, Me., to-day that, in view of the action
of the Allies in putting cotton on the contraband list, he will, if it becomes necessary, deposit $30,000,000 or more in gold in the Federal
reserve banks at Atlanta, Dallas, and Richmond
for the purpose of enabling these Federal reserve
banks to rediscount loans made on cotton secured by warehouse receipts by national banks
and those State banks that are members of the
Federal reserve system.
The Secretary said that in the exercise of the
discretion given to him by law the Government
will for the time being charge no interest on
these deposits in Federal reserve banks; that
such action is justified by the unusual situation
respecting cotton caused by the European war;
that he considers it his duty to use every available means in his power to help the cotton producer of the South in the circumstances; that
it is a matter of economic importance to the
entire Nation that those who have produced the
cotton crop shall have a fair opportunity to
dispose of it gradually and in an orderly manner
so they may not be forced, through inability to
market their cotton gradually, to sell it at
sacrifice prices.
Secretary McAdoo said that one of his chief
objects was to create a basis for such enlarged
credit in the South that the banks will have
ample resources to extend to producers such
accommodations that they will be able to carry
cotton in warehouses for a reasonable length of
time until it can be marketed advantageously.
IR order to accomplish this, he said that the
national and State banks which are members of
the Federal reserve system should make loans
on warehouse receipts for insured cotton at low
rates of interest; that the banks can well afford to carry cotton for producers at 6 per cent
especially if they are able to rediscount cotton
paper at the Federal reserve banks at a much
lower rate than 6 per cent; that the credit
resources of the banks of the country are
greater than ever before in our history and that
there is no reason why the banks should not, in
cooperation with the merchants of the South,
help the cotton producers with loans at low
rates in the present peculiar situation.
The Secretary said that the Federal Reserve
Board had a right to determine the rate of
interest which the Federal reserve banks can




SEPTEMBER 1,1915.

charge member banks on notes or loans secured
by insured and warehouse cotton rediscounted
with Federal reserve banks. He has been unable to consult his colleagues of the Federal
Reserve Board on account of his absence from
Washington but feels confident of their cooperation in every reasonable way.
Secretary McAdoo said that if it should appear, however, that the object in view can be
accomplished with greater efficiency to the cotton producers, the merchants and the banks of
the South by depositing Government funds in
the national banks direct instead of in the
Federal reserve banks he would take that
course and make deposits in such national
banks as would give him the assurance that the
money so deposited or the credit based thereon
would be loaned on cotton insured or warehoused and at a rate of interest not to exceed
6 per cent.
The Secretary said he believed that there
was no occasion for alarm about the future of
cotton and that if the bankers and merchants
would cooperate with each other and with the
cotton producers of the South in a spirit of
patriotism and mutual regard for each other's
welfare the situation could be handled with
happy results to all concerned. He expressed
the earnest hope that this would be done.
Digest of Warehouse Laws.

There has been prepared by the Federal
Reserve Board a digest of the laws affecting
warehouse receipts in the Southern States.
This is particularly interesting in connection
with the handling of the cotton crop and is
given below.
Alabama.—Warehouse receipts not stamped
"not negotiable" may be transferred by
indorsement and any person to whom they
are transferred must be deemed and taken to
be the owner of the things or propertyr therein
mentioned as far as to give validit} to any
pledge, lien, or transfer, made or created by
any person, with exception of following:
(1) Lien of landlord for rent or advances.
(2) Lien created by contract, of which notice
is given by registration as prescribed by law.
Arizona.—Warehouse receipts are made
negotiable by law and the holder is deemed the
owner and in actual possession of property
covered by receipt. Hence, he is protected
against subsequent liens.
Arkansas.—The holder of a negotiable receipt
acquires such title to the goods as the person

SEPTEMBER 1,1915.

FEDERAL RESERVE BULLETIN.

negotiating the receipt to him had, or had the
ability to convey, to a purchaser in good faith
and for value, and, also such title to the goods
as the depositor or person to whose order the
goods were to be delivered by the terms of the
receipt had, or had the ability to convey to a
purchaser in good faith for value and the direct
obligation of the warehouseman to hold possession of the goods for him according to the
terms of the receipt. Title subject to lien of
landlord or laborer with or without notice on
part of purchaser that crop was grown on
leased premises. Transferee of receipt gets
no greater right than purchaser of cotton
where it is actually delivered.
Florida.—Warehouse receipt negotiable by
indorsement, which shall transfer to indorsee
title, right of possession, and remedies of each
indorser. Such receipt may be deposited as
collateral security. Does not make bailee
warrantor of title.
Georgia.—Title to cotton in bonded public
warehouses passes to purchaser or pledgee of
warehouse receipt by delivery of receipt
properly indorsed.
NOTE.—Bill pending before present legislature with a reasonable prospect of early passage.
Illinois and Missouri.—The holder of a negotiable receipt acquires such title to the goods as
the person negotiating the receipt to him had,
or had the ability to convey, to a purchaser in
good faith and for value, and also such title to
the goods as the depositor or person to whose
order the goods were to be delivered by the
terms of the receipt had, or had the ability to
convey to a purchaser in good faith for value
and the direct obligation oi the warehouseman
to hold possession of the goods for him according to the terms of the receipt. Transferee of
receipt has no greater rights than purchaser
where cotton actually delivered. Landlord's
lien is good against transferee if he had knowledge that crop was grown on leased premises or
if he had information which, if followed, would
have furnished him such knowledge.
Indiana and Kentucky.—Warehouse receipts
are negotiable and transferable by indorsement,
in blank or by special indorsement, and with
like liability as bills of exchange now are and
with like remedy thereon. Transferee of receipt has no greater rights than purchaser of
cotton where actual delivery is made. Landlord's lien is good against transferee if he had
knowledge that crop was grown on leased
premises or if he had information which, if followed, would have furnished him such knowledge.




261

Louisiana.—Public warehouse receipts are
negotiable and transferable by indorsement in
blank or by special indorsement and delivery
in the same manner and to same extent as bills
of exchange and promissory notes without
other formality, and transferee or holder has
such right and title therein and to property
represented thereby as transferrer or depositor
of the goods had, subject to lien of warehouseman for storage or other warehouse charges.
Holder of negotiable receipt would therefore
hold product as against any subsequent lien
holder. Unlawful to levy on warehouse goods
after negotiable receipt issued against same.
Mississippi.—Warehouse receipt shall be
conclusive evidence in the hands of a bona fide
holder for value, whether by assignment, pledge,
or otherwise, as against the person or corporation issuing the same that the property has been
so received, and shall entitle such bona fide
holder for value of such receipt to a delivery of
the property so stored or deposited or to the
value thereof. Landlord's lien is good against
purchaser of crop grown on leased premises
with or without notice on part of purchaser
that crop was so grown.
North Carolina.—All warehouse receipts are
valid and binding in the hands of all bona fide
holders for value without registration, and
when receipt is negotiable—i. e., has not word
"nonnegotiable" on face—title to commodity
shall pass to a purchaser or pledgee by indorsement and delivery to him of receipt. Pledgee
of warehouse receipt obtains a first lien on
commodity, subject to be displaced by following causes:
(1) Depositor did not have good title.
(2) Valid lien on goods existing at time of
deposit.
(3) General creditor of original depositor
who has acquired statutory or contract lien
against such depositor prior to date of deposit.
(4) Nonexistence of commodity in warehouse, for which, however, warehouseman is
liable.
Oklahoma.—Public warehouse receipts are
negotiable and transferable by indorsement in
blank, or by special indorsement and delivery,
in the same manner and to the same extent as
bills of exchange and promissory notes, without
other formality; and the transferee or holder
of receipt shall be considered and held as the
actual and exclusive owner to all intents and
purposes, subject only to the charges of warehouseman for storage, etc. Transferee holds
product as against subsequent lien holder, and
products covered by receipt are not subject to
attachment, garnishment, or execution.

262

FEDERAL EESEKVE BULLETIN.

South Carolina.—Negotiable warehouse receipts—i. e., those not having word "nonnegotiable" on face—may be transferred by
indorsement and delivery to person or pledgee
who shall be. deemed owner of commodities so
far as to give validity to any pledge, lien, or
transfer made or created by such person or
persons. Pledgee of warehouse receipt obtains
a first lien on the commodity which can not be
displaced except by following:
(1) Want of title in depositor at time of
deposit.
(2) Valid lien upon commodity obtained
prior to deposit.
(3) Nonexistence of commodity in warehouse for which, however, warehouseman is
liable.
Tennessee.—Warehouse receipts are negotiable by written indorsements tnereon and delivery in the same manner and to the same
extent as bills of exchange and promissory
notes and no clause condition or limitation,
whether written or printed in said receipt shall
be held to limit negotiability or affect the right
of holder. The holder of a negotiable receipt
acquires such title to the goods as the person
negotiating the receipt to him had, or had the
ability to convey, to a purchaser in good faith
and for value, and, also such title to the goods
as the depositor or person to whose order the
goods were to be delivered by the terms of the
receipt had, or had the ability to convey to a
purchaser in good faith for value and the
direct obligation of the warehouseman to hold
possession of the goods for him according to the
terms of the receipt. Title subject to lien of
landlord or laborer with or without notice on
part of purchaser that crop was grown on
leased premises. Transferee of receipt gets no
greater right than purchaser of cotton where
it is actually delivered.
Texas.—If negotiable warehouse receipt is
asked, party placing products in warehouse
shall advise warehouseman of any liens on
products and if so warehouseman must state
nature and amount of lien in blank space on
receipt. Holder of warehouse receipt is deemed
the owner of the product and in possession of
the property and therefore subsequent liens
placed on the product do not affect the rights
of the holder of a negotiable receipt and product
would not be subject to attachment. Transferee's rights subject to landlord's lien, and
warehouseman's lien for charges and insurance.
Holder protected unless party taking out receipt committed fraud in concealing liens on
products at time placed in warehouse.




SEPTEMBER 1,

1915.

Virginia.—The holder of a negotiable receipt
acquires such title to the goods as the person
negotiating the receipt to him had, or had the
ability to convey, to a purchaser in good faith
and for value, and also such title to the goods
as the depositor or person to whose order the
goods were to be delivered by the terms of the
receipt had, or had the ability to convey to a
purchaser in good faith for value and the
direct obligation of the warehouseman to hold
possession of the goods for him according to the
terms of the receipt. Where goods delivered
to warehouseman and negotiable receipt issued
they can not thereafter while in possession of
warehouseman be attached by garnishment
or otherwise or be levied upon under an execution, unless the receipt be first surrendered
to the warehouseman or its negotiation enjoined. Pledgee of negotiable warehouse receipt obtains a first lien on the commodity
which can not be displaced except by following:
(1) Want of title or authority to bind owner
in person delivering goods to warehouse.
(2) Valid lien on commodity obtained prior
to deposit.
(3) Nonexistence of commodity in warehouse
for which, however, warehouseman is liable.
(4) Amount of advances made and liability
incurred for which warehouseman claims a
lien which, in case of negotiable receipt, must
be enumerated on face of receipt.
(5) Charges of warehouseman for storage
occurring subsequent to date of receipt.
Conditions for State Banks and Trust Companies.

After careful consideration, the Federal
Reserve Board has adopted thefollowing conditions to be made a part of certificates of
of approval of applications of State banks
and trust companies. They cover matters
about which inquiry has been made by Federal reserve banks. The conditions are simply
precautionary and are not to be construed as
indicating opposition on the part of the Federal
Reserve Board to branches of these institutions.
(1) The following condition will be inserted
in all certificates of approval:
"That, except with the approval of the
Federal Reserve Board, there shall be no
change in the general character of the assets
of, or broadening in the functions now exercised by the
such as will tend to affect
materially the standard now maintained .and
required as a condition of membership."

SEPTEMBER 1,

FEDERAL RESERVE BULLETIN.

1915.

(2) The following condition will be inserted
in all cases where the applying bank or trust
company is authorized oy its charier or laws
of the State in which it is located to accept
domestic drafts:
"That the
shall in no case accept a
domestic draft or bill of exchange unless it is
based on a transaction covering the shipment of goods, such transaction to be evidenced at the time of acceptance by accompanying shipping documents, or unless it is
secured by a warehouse receipt covering readily marketable staples and issued by a warehouse independent of the borrower or by the
pledge of goods actually sold: And provided
further, That such bank shall not accept
drafts or bills of exchange of any kind, domestic
or foreign, to an amount which exceeds at
any time in the aggregate more than one-half
of its paid-up and unimpaired capital stock
and surplus, except that the Federal Reserve
Board may authorize such bank to accept
such drafts and bills to an amount not to
exceed its capital stock and surplus."
(3)' The following condition will be inserted
in all cases where the applying bank or trust
compan}^ is authorized by its charter or the
laws of the State in which it is located to
establish branches:
"That the establishment of additional
branches, domestic or foreign, be subject to
the approval of the Federal Reserve Board."
Conditions (2) and (3) will not be inserted
unless the applying bank has the legal right
to accept domestic drafts or to establish
branches at the time of admission. If, however, the State law subsequently authorizes
either domestic acceptances or branch banks,
the member bank could not at that time under
the provisions of condition (1) avail itself of
either privilege except with the approval of
the Federal Reserve Board. Condition similar to (2) and (3) will be imposed when that
subsequent approval is given.

263

"national reserve association of the United
States" or branch thereof, or any plan now or
hereafter created or established by act of Congress, whether such banking or currency association or plan be created by Congress under
the above or any other name. Nothing in this
act shall prohibit any such bank from joining
or associating itself with any such association
or plan or branch thereof nor from investing
any part of its capital or surplus in the stock
of such association, plan, or branch thereof in
accordance with the terms and provisions of
such act of Congress: Provided, however, That
such investment shall in no case exceed the
minimum amount required to join or associate
itself with such association, plan, or branch
thereof. Any bank joining or associating itself
with such association, plan, or branch thereof
shall have and exercise all powers not in conflict with the laws of this State, which are conferred upon any member bank in any such
"national reserve association of the United
States" or branch thereof. Such member
bank and its directors, officers, and stockholders
shall continue to be subject, however, to all
liabilities and duties imposed upon them by
any law of this State and to all the provisions
of the "bank act."

The last issue of the Bulletin included California among the list of States which have
passed no law expressly authorizing State
banks to become member banks. That was
an error. The California bank act provides
in section 56 that:

Word has been received recently from the
State authorities of New Mexico stating that a
law was passed by the legislature of that State,
effective as of June 11, 1915, providing that—
Any incorporated State bank may apply to
the Federal Reserve Board for the right to subscribe to the stock of the Federal reserve bank
organized within the Federal reserve district
where the applicant bank is located and may
become a stockholder of such bank and exercise
all of the powers of member banks in accordance
with the provisions of the act of Congress entitled "Federal Reserve Act ; " approved December 23, 1913.
A revised list of those States which have enacted laws expressly authorizing any State
bank to become a member bank follows:1
California, Idaho, Iowa, Kentucky, Louisiana,
Maine, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Montana, Nebraska, New
Jersey, New Mexico, New York, North Dakota,
Ohio, Oregon, South Carolina, South Dakota,
Texas, Utah, Virginia, and Washington.

Any bank organized and existing under the
laws of this State is hereby authorized and
empowered to join or associate itself with any

i See page 150 of the July BULLETIN for extracts from these laws and
page 218 of the August BULLETIN for a list of those States in which the
State authorities have ruled that any State bank may become a member
bank.

State Bank Membership.

5554—15




3

264

FEDERAL RESERVE BULLETIN.

GOLD SETTLEMENT FUND.

SEPTEMBER 1, 1915.

STATEMENT.

Assets:
Gold order certificates
$46,180, 000
Gold order certificates held
by the cashier of the
Treasury Department for
account of the gold settlement fund
3, 320,000

There has been continued increase in the gold
settlement fund during the past month, the
total amount held as of August 26 being
$55,930,000. The amount of clearings for
each settlement since the report published in
the August issue of the Bulletin is shown in
$49, 500,000
the following table, the total, to and including Liabilities:
Credit balances of the FedAugust 26, being $333,729,000, and the total
eral reserve banks as
balances $68,955,000, or 20.66 per cent of the
shown by the books were
total clearings. The net change in owneras follows—
ship of the gold held in the fund has amounted
Federal Reserve Bank of
Boston
7, 707,000
to $14,487,000, or 4.34 per cent of the total
Federal
Reserve
Bank
of
clearings.
Amount of clearings.
Total
clearings.
Previously reported
Settlement of—
July 29
Aug. 5
Aug. 12
Aug. 19
Aug. 26

Balances.

$231,996,000

$50,496,000

20,021,000
25,275,000
18,711,000
20,027,000
17,699,000

3,211,000
4,594,000
3,549,000
3,290,000
3,815,000

333,729,000

68,955,000

Total

Changes in ownership of gold.
net
Federal reserve bank. Total
deposits.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
.
San Francisco
Total

$3,230,000
15,000,000
9,000,000
2,470,000
3,320,000
260,000
5,770,000
3,220,000
1,400,000
3,480,000
. . . 1,650,000
5,680,000
54,480,000

Balance,
Aug. 26,
1915.

Increase.

Decrease.

$4,831,000 $1,601,000
15,736,000
736,000
1,244,000
3,995,000 1,525,000
4,370.000
900,000
1,415,000 1,155,000
12,326,000
6,556,000
2,512,000
1,047,000
3,523,000
43,000
3,621,000 1,971,000
1,310,000
55,930,000

14,487,000

$8,756,000

708,000
353,000
4,670,000
14,487,000

The fund was audited on July 26 by a representative of the Federal Reserve Board and a
representative of the Federal reserve banks,
and a report submitted to the Board and to
the reserve banks, as follows:
JULY 26,
The

1915.

FEDERAL RESERVE BOARD,

Washington, D. C.
SIRS: An audit of the money and accounts of the gold
settlement fund was made by the undersigned on July 26,
1915, as of the close of business July 24,1915. All accounts
were reconciled and found to agree with the records.




New York
Federal Reserve Bank of
Philadelphia
Federal Reserve Bank of
Cleveland
Federal Reserve Bank of
Richmond
Federal Reserve Bank of
Atlanta
Federal Reserve Bank of
Chicago
Federal Reserve Bank of
St. Louis
Federal Reserve Bank of
Minneapolis
Federal Reserve Bank of
Kansas City
Federal Reserve Bank of
Dallas
Federal Reserve Bank of
San Francisco

11, 501,000
1, 671,000

4, 256,000
3, 212, 000
1,304,000
9, 329,000
1,657,000
1,187,000
3, 611,000
3,698,000
367, 000
49, 500,000

The gold order certificates were counted.
A certificate was obtained from the cashier of the
Treasury Department setting forth that he held for the
account of the gold settlement fund $3,320,000 in gold order
certificates.
Statements were prepared of the accounts of the 12
Federal reserve banks, and signed verifications were later
obtained.
The records show all transactions in detail, and were
found to be in excellent condition.
Proper safeguards have been provided for the care and
custody of the gold order certificates.
Respectfully submitted.
(Signed)
J. A. BRODERICK,
Representative Designated by the Federal Reserve Board.
H.M.JEFFERSON,

Representative Appointed by the Federal Reserve Banks.

265

FEDEKAL RESERVE BULLETIN.

SEPTEMBER 1, 1915.

Gold settlement fund—Summary of transactions July 22,1915, to August 26, 1915.

Federal Reserve
Bank of—

Balance
last statement,
July 22,
1915.

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

$7,707,000
9,651,000
171,000
4,256,000
2,812,000
1,304,000
9,329,000
1,657,000
1,187,000
3,611 000
3,698,000
1,017,000

Total

46,400,000

Federal Reserve
Bank of—

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

Federal Reserve
Bank of—

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

Federal Reserve
Bank of—
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total

Balance
last statement,
July 29,
1915.
$6,176,000
14,733,000
1,492,000
4,127,000
3,419,000
1,425,000
9,904,000
1,013,000
971,000
3,476,000
3,354,000
1,000,000
51,090,000
Balance
last statement,
Aug. 5,
1915.
$7,549,000
10,915,000
1,461,000
4,283,000
3,348,000
1,376,000
12,323,000
1,803,000
1,389,000
3,549,000
3,194,000
500,000
51,690,000
Balance
last statement Aug.
12, 1915.
$6,352,000
12,819,000
1,213,000
4,295,000
3,216,000
1,418,000
11,875,000
2,042,000
1,365,000
4,336,000
3,257,000
1,002,000
53,190,000




Gold.
Withdrawn.

$216,666"

i

Transfers.

Deposited.

Debit.

$3,000,000

$1,000,000

700,000

Credit.

$3,363,000

5,400,000

3,363,000

Gold.
Withdrawn.

Total
credits.

$1,531,000

$4,810,000
3,958,000
2,561,000
358,000
997,000
261,000
3,410,000
2,022,000
296,000
794,000
547,000
7,000

$3,279,000
5,677,000
1,882,000
439,000
904,000
493,000
3,985,000
1,465,000
80,000
659,000
703,000
455,000

20,021,000

20,021,000

557,000
216,000
135,000

500,000
710,000

Total
debits.

93,000

87,000

2,165,000

Net
debits.

679,000

111,000

1,700,000

Settlement of July 29,1915.

3,363,000

3,211,000

Transfers.

Deposited.

Debit.

Credit.

"$1*666," 666"

$1,000,000
1,355,000

S5o,"6o6"
300,000

Net
debits.

Total
debits.

500,000

350,000

1,325,000

1,100,000

2,355,000

Gold.
Withdrawn.

4,594,000

25,275,000

Transfers.

Deposited.

:

2,355,000

Debit,

Credit.

$1,027,000

$i,*5o6,"666"

500,000

500,000

1,000,000

2,000,000

1,027,000

Gold.
Withdrawn.

1,027,000

Debit.

Credit.

.$1,397,000

$1,000,000
$57,000

10,000

300,000

1,340,000
1,397,000

Aug. 12
1915, balance in
fund after
clearing.

203,000
656,000
393,000
2,425,000
1,122,000
63,000
250,000
611,000
13,000

$3,479,000
5,660,000
1,768,000
215,000
524,000
462,000
1,977,000
1,361,000
39,000
1,037,000
1,174,000
1,015,000

787,000
563,000
1,002,000

$6,352,000
12,819,000
1,213,000
4,295,000
3,216,000
1,418,000
11,875,000
2,042,000
1,365,000
4,336,000
3,257,000
1,002,000

18,711,000

18,711,000

3,549,000

53,190,000

'3,549,000

$877,000
12,000
69,000
239,000

Settlement of Aug. 19, 1915.
Net
debits.
$1,598,00*0
916,000
99,000
3,000

1,397,000

Net
credits.

51,690,000

$4,676,000
4,783,000

362,000

1,300,000

4,594,000

$1,197,000

" i , " 74*8," 666' 3,516,000

312,000

"$i6,'666*

25,275,000

$7,549,000
10,915,000
1,461,000
4,283,000
3,348,000
1,376,000
12,323,000
1,803,000
1,389,000
3,549,000
3,194,000
500,000

Total
debits.

Transfers.

Deposited.

Net
credits.

Total
credits.

24,000

::::.:::::::

Total
credits.

Aug. 5,
1915, balance in
fund after
clearing.

Net
debits.

448,000

$500,000

51,090,000

Settlement of Aug. 12,1915.

132,000

$27 000

3,211,000

232,000
575,000

$373,000
13,339,000 $3,712,000
10,110,000* 5,937,000
3.773,000
3,804,000
'382,000 ""166*666"
276,000
549,000
920,000
442,000
461.000
2,419,666
6,066,000
3,647.000
790,000
2,213,000
1,423,000
18,000
133,000
115,00073,000
844,000
771.000
340,000
742,000
402,000
475,000
482,000
7,000

$4,173,000
31,000

400,000
$500,000

156,666
448,000

$6,176,000
14,733,000
1,492,000
4,127,000
3,419,000
1,425,000
9,904,000
1,013,000
971,000
3,476,000
3,354,000
1,000,000

$1,719,000
81,000

Settlement of Aug. 5,1915.

371,000
19,000

30,000

Net
credits.

July 29,
1915, balance in
fund after
clearing.

3,290,000

Total
debits.

Total
credits.

$2,908,000
6,566,000
2,760,000
137,000
946,000
449,000
2,152,000
2,356,000
78,000
865,000
799,000
11,000

$3,236,000
4,968,000
1,844,000
38,000
1,878,000
446,000
3,172,000
2,044,000
115,000
503,000
1,039,000
744,000

20,027,000 | 20,027,000

Net
credits.
$328,000

Aug. 19,
1915, balance in •
fund after
clearing.

240,000
733,000

$6,680,000
12,618,000
1,297,000
4,196,000
4,148,000
1,358,000
12,895,000
1,730,000
1,402,000
3,974,000
3,487,000
695,000

3,290,000

54,480,000

932,000
1,020,000
37," 666"

266

FEDERAL RESEKVE BULLETIN.

SEPTEMBER 1, 1915.

Gold settlement fund—Summary of transactions July 22,1915, to August 26, 1915—Continued.

Federal Keserve
Bank of—

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

San Francisco
Total

Balance
last statement,
Aug. 19,
1915.

$6,680,000
12,618,000
1,297,000
4,196,000
4,148,000
1,358,000
12,895,000
1,730,000
1,402,000
3,974,000
3,487,000
695,000
54,450,000

Gold.
Withdrawn.

Transfers.

Deposited.

"§\, m\ 666"

Debit.
$10,000
5,000

150,666
55,666
100,000

300,000

300,000
400,000
37,000
787,000

1,450,000

1,694,000

Settlement of Aug. 26,1915.
Net
debits.

Credit.

Total
debits.

$1,839,000

$3,577,000
3,820,000
3,193,000
ioo,666
946,000
894,000
384,000
16,666" ""*479; 656* 2,566,000
1,280,000
98,000
55,000
3S6,000
37,666
88,000
553.000
2.000
5,000

$1,542,666"

1,6*3,666
301,000

1,094,000

3,815,000

17,699,000

Total
credits.
$1,738,000
5,401.000
2,140,000
64% 000
966,000
496,000
2,087,000
2,062,000
43.000
298,000
724,000
1,099,000
17,699,000

Net
credits.

Aug. 26.
1915, balance in
fund after
clearing.

171,000
1,097,000

$4,831,000
15,736,000
1,244,000
3,995,000
4,370,000
1,415,000
12,326,000
2,512,000
1,047,000
3,523,000
3,621,000
1,310,000

3,815,000

55,930,000

$1,581,000
72,000
112,000
782,000

DISCOUNT RATES.
Discount rates of each Federal reserve bank in effect August 26, 1915.
I

Date of Maturities
last
10 days
change of ofand
less.
rate.

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

Aug.
July
June
Feb.
June
Apr.
Jan.
June
May
Aug.
Aug.
...do

9
22
25
6
25
30
23
25
18
13
5

Trade acceptances.
AgriculMaturities Maturities Maturities tural
and
of over 10 of over 30 of over 60 live-stock
to 30 days, to 60 days, to 90 days, paper over To 60 days, Over 60
inclusive. inclusive. inclusive.
90 days,
90 days.
inclusive. to
inclusive.

?

Authorized rate for acceptances, 2 to 4 per cent.
On March 10 the Federal Keserve Board fixed the following rates for rediscounts between Federal reserve banks:
3J per cent for maturities of 30 days or less; 4 per cent for maturities of over 30 days to 90 days, inclusive.




SEPTEMBER 1,

267

FEDEKAL EESERVE BULLETIN.

1915.

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

subscribed capital stock of the Federal reserve
bank."
I think this covers the points raised in your
letter, but if there are others on which you
wish to be informed, please advise me.

Stock Subscription of Insolvent Bank.

Dividends to Insolvent Banks.

Your letter of July 3, with respect to the
assessment of your bank for expenses, has been
referred to counsel of the Board for opinion of
the legal status of the matter. He has now
filed a memorandum in which he states:
" I t appears that two banks, both of which
are members of the Federal reserve bank, are
in the hands of a receiver; that these banks
have subscribed to 690 shares of the stock of the
Federal reserve bank, but have only paid in
their first installment, amounting to $11,500.
"It is assumed from the letter of the Federal
reserve agent that no repayments have been
made to these insolvent banks, so that the
books of the Federal reserve bank will show
the subscription of these banks as a part of the
subscribed capital of the Federal reserve bank.
" I t further appears that those banks which
were transferred from one district to the other
will subscribe to 319 shares of stock of the
Federal reserve bank. The transfer of the
membership of these banks was under an order
of the Federal Reserve Board made effective
as of July 1, 1915. Section 10 of the Federal
reserve act provides in part as follows: 'That
the Federal Reserve Board shall have power to
levy semiannually upon the Federal reserve
banks, in proportion to their capital stock and
surplus, an assessment sufficient to pay its
estimated expenses/ etc.
"As the Federal reserve bank is liable to the
insolvent banks for their cash-paid subscriptions, and will not have the benefit of their
subscriptions during the period the assessment
is intended to cover, I can see no legal objection to permitting the Federal reserve bank
to deduct from their subscribed capital stock
the 690 shares subscribed to by this two banks.
In such case the Federal reserve bank of Richmond should be permitted to deduct the 319
shares subscribed by the banks transferred to
your district, and this should be added to the




JULY 28,

1915.

Section 6 of the Federal reserve act provides in part that—
"If any member bank shall be declared
insolvent, and a receiver appointed therefor,
the stock held by it in said Federal reserve
bank shall be canceled, without impairment of
its liability, and all cash-paid subscriptions on
said stock, with one-half of one per centum
per month from the period of last dividend,
not to exceed the book value thereof, shall be
first applied to all debts of the insolvent member bank to the Federal reserve bank, and the
balance if any, shall 7be paid to the receiver
of the insolvent bank. '
You are advised that there seems to be no
authority vested in any Federal reserve bank
to pay interest on cash-paid subscriptions
refunded to any member bank which has been
declared insolvent except under the provision
"one-half of one per centum per month from
the period of last dividend." The intent of
this provision appears to be clearly that the
insolvent member bank shall have its proportion of any dividends which may have been
actually earned from the declaration of the
last dividend to the date of the cancellation
of the stock held by it in the Federal reserve
bank.
As the Federal reserve bank of your city
has not declared any dividends nor earned
any at this date it seems that you are entitled
to receive only an amount equivalent to the
actual cash-paid subscriptions, provided, of
course, all debts of the insolvent member bank
to the Federal reserve bank have been paid.
As the stock held by the insolvent member
bank in the Federal reserve bank has been
canceled it is not seen how you as receiver are
entitled to participate in the future earnings
of the bank.
AUGUST 20,

1915.

268

FEDERAL RESERVE BULLETIN.

Purchase of Municipal Bonds.

Your letter of July 19, in which you ask for
authority to take all or any part of an issue of
municipal bond3 up to $100,000, was presented
to the Federal Reserve Board at its meeting
yesterday. I was directed to say to you that,
in the judgment of the Board, each such case
should be separately presented, and passed
upon on its own merits.
JULY 29,

1915.

State Bank Branches.

., B

SEPTEMBER 1, 1915.

As I understand the proposed transaction,
the paper to be presented to you would be a
draft drawn by certain brokers in Florida on
some New York firm, the proceeds to be used
for the purchase and shipment of goods to
Cuba. The draft would be indorsed and presented to you for rediscount by your member
bank before acceptance, and therefore would
seem clearly within the provisions of section
13, relating to the discount of commercial
paper, and regulation B, series 1915, if properly
certified to by the member bank as required in
paragraph III of that regulation.
I do not understand how the question of
foreign acceptances presents itself to your bank
in this case, because at the time you receive
the draft for discount it is not accepted and
would come within the regulation quoted above.
Even after acceptance it would seem to be
eligible for rediscount as an acceptance based
on the exportation of goods as required by the
act.
Under the facts as presented you would, of
course, charge the prevailing rate for 90-day
commercial paper and not that for acceptances.

lHYour letter of July 22 regarding the policy
of the Board as to branches established by
State member banks was presented to the
Board at its meeting yesterday morning, and I
was instructed to say that the Board feels that
its recent letter to you on that subject probably
covers the situation sufficiently.
Answering your letter specifically, it would
not be the intent of the Federal Reserve Board,
should you accept the proposed conditions, to
deny to you or any other institution the right to
add additional branches, except for reasons
similar to those set forth by you which might
AUGUST 12, 1915.
influence your State banking department to
withhold consent.
Trusting that this makes the position of the
Notes Used for Purchase of Merchandise.
Board sufficiently clear.
JULY 29, 1915.
I wish to acknowledge receipt of your letter
of August 12, submitting a question referred
to you by one of your member banks relating
to the eligibility of notes secured by collateral
When Applicant Bank is Member.
the proceeds of which were used for the pur~iTY"our letter of July 28, asking a ruling as to chase of merchandise in the due course of
the step which consummates the admittance business.
of a member bank into the Federal reserve
You are advised that the counsel for the
system, has had consideration.
Board is of the opinion that any notes the
The date of the application and of its ap- proceeds of which have been used or are to be
proval by the Board would seem to be imma- used for commercial purposes and which otherterial, and it is felt that a member bank be- wise comply with the terms of regulation B,
comes actively identified with the Federal series 1915, are eligible for rediscount by your
reserve system when its stock in the Federal bank.
reserve bank has been issued and paid for and
The fact that commercial paper has the
the required reserve deposited.
| additional security of collateral in no way
affects the eligibility of such paper, providing
AUGUST 11, 1915.
it complies otherwise with the provisions of
the act and the regulations of the Board.
Crosstie and Lumber Exports.

AUGUST 13,

1915.

I have received your letter of August 5,
inclosing a communication relating to the dis- Purchase of Government Bonds in Open Market.
count of bills drawn for the purpose of proReceipt is acknowledged of your letter of
viding funds with which to export certain
August 10, and in reply you are advised that
cross ties and lumber to Cuba.




SBrTBMBBB 1, 1915.

FEDERAL EESERVE BULLETIN.

Federal reserve banks may, under the provisions of section 14, purchase Government bonds
in, the open market, but the provisions of
section 18, specifying that a Federal reserve
bank may be required to purchase such bonds
when offered for sale through the Treasurer of
the United States by a member bank, do not
become effective until December 23, 1915.
AUGUST 11,

1915.

No Authority to Act as Guardian.

The Federal reserve act authorizes the
Board to grant permits to national banks to
act only as trustee, executor, administrator,
and registrar of stocks and bonds, and not as
guardian. Consequently, it is impossible for
the Board to give any national bank authority
to act as guardian. Incidentally, under the
laws of New York, permits can be granted to
national banks to act only as registrar of stocks
and bonds.
JULY 21,

1915.

Agreements for Acceptance Credits.

The Federal Reserve Board and the Comptroller of the Currency, at the instance of the
Federal Reserve Bank of New York, have considered the question whether a national bank
can enter into an agreement under which a line
of acceptance credit may be given by such bank,
the credit extending for a period of nine months
but the individual drafts drawn upon the
accepting bank to be payable at 90 days7 sight
and not to exceed the total amount specified
in the letter of credit, and after referring the
question to counsel of the Board for an opinion
issued a ruling in substance to the effect that a
national bank is authorized to enter into an
agreement having more than six months to
run, by the terms of which it obligates itself for
a period of time specified in the agreement to
accept drafts drawn upon it, provided such
drafts grow out of transactions involving the
importation or exportation of goods and that
the individual drafts have not more than six
months' sight to run.




269

The restrictions of section 13 of the Federal
reserve act would, of course, limit the total
amount of acceptances made by any one bank,
including those described, to an amount equal
in the aggregate to not more than one-hall of
the paid-up and unimpaired capital stock and
surplus of the member bank, except that by
authority of the Federal Reserve Board, under
general regulation of the Board, a member bank
may accept for an amount not to exceed the
amount of its capital stock and surplus.
It should be understood, of course, that the
10 per cent limitation imposed by section* 5200
of the United States Revised Statutes is not
intended to apply to the mere acceptance of
a bill of exchange, but that the provisions of
section 5200 of the United States Revised
Statutes would apply to the indebtedness
arising between the drawer of the bill and the
accepting bank in case the drawer fails, to
furnish funds with which to meet the acceptance at maturity.
It should also be understood that the limitation of six months specified under section 13 of
the Federal reserve act applies to the draft but
is not construed as applying to the agreement
or letter of credit under which the draft is
drawn. This limitation of six months does,
however, apply to specific drafts drawn under
such agreements or letters of credit, and consequently, if the terms of the agreement or
letter of credit imposed upon the holder for
value of the draft any obligation to renew such
draft at maturity so that the original draft with
the renewal thereof would remain an obligation
of the accepting bank for a period exceeding
six months, such agreement would be ultra
vires.
The distinction emphasized in connection
with this ruling is this: While a letter of credit
or credit agreement may lawfully be made by a
national bank which will extend by its terms
for a period exceeding six months, the agreement must not be of such a character as will
impose upon the holders of drafts accepted
thereunder any obligation to renew such drafts
so that the period of acceptance shall exceed
six months in duration as to any specified
draft.

270

FEDERAL RESERVE BULLETIN.

Intradistrict Clearing System.

There have been 149 additions and 14 withdrawals from the intradistrict clearing system
since the publication of the list of banks in the
system in the August Bulletin.
Additions and withdrawals are shown in the
following table:
District.

Additions.

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. f2. San Francisco

0
2
1
2
0
10
15
2
17
0
1
99

Withdrawals.
1
1
2
1
1
0
5
0
1
0
2
0

The net gain of the system is 135 banks.
The list by districts is as follows:
DISTRICT N O . 1.

Withdrawn:
Merchants National Bank, St. Johnsburg, Vt.
DISTRICT No. 2.

Additions:
Broadway Trust Co., New York City.
First National Bank, Dunellen, N. J.
Withdrawn:
Manufacturers National Bank, Newark, N. J.
DISTRICT N O . 3.

Additions:
First National Bank, Canton, Pa.
Withdrawn:
First National Bank, Ralston, Pa.
First National Bank,.Wellsboro, Pa.
DISTRICT NO. 4.

Additions:
First National Bank, Paris, Ky.
Lebanon National Bank, Lebanon, Ohio.
Withdrawn:
First National Bank, Plumville, Pa.
DISTRICT No. 5.

Withdrawn:
National Bank of Fairfax, Fairfax, Va.
DISTRICT No. 6.

Additions:
First National Bank, Ozark, Ala.
First National Bank, Midland City, Ala.
Ben Hill National Bank, Fitzgerald, Ga.
National Bank of Tifton, Tifton, Ga.




SEPTEMBER 1,

1915.

Additions—Continued.
Citizens National Bank, Washington, Ga.
First National Bank, Ad el, Ga.
Commercial National Bank, New Orleans, La.
Whitney-Central National Bank, New Orleans, La.
First National Bank, Meridian, Miss.
Manufacturers National Bank, Harriman, Tenn.
DISTRICT N O . 7.

Additions:
Second National Bank, Belvidere, 111.
First National Bank, Chad wick, 111.
Inter-State National Bank (Hegewisch), Chicago, 111.
First National Bank, Dolton, 111.
German-American National Bank, Pekin, 111.
Ridgely National Bank, Springfield, 111.
Citizens National Bank, Sycamore, 111.
First National Bank, Tipton, Ind.
City National Bank, Clinton, Iowa.
Leavitt & Johnson National Bank, Waterloo, Iowa.
First National Bank, Traverse City, Mich.
First National Bank, Columbus, Wis.
Commercial National Bank,, Madison, Wis.
First National Bank, Madison, AVis.
Germania National Bank, Milwaukee, Wis.
Withdrawn:
Commercial German National Bank, Peoria, 111.
National Exchange Bank, Anderson, Ind.
First National Bank, Hammond, Ind.
First National Bank, Boswell, Ind.
First National Bank, Newton, Iowa.
DISTRICT No. 8.

Additions:
American National Bank, Rogers, Ark.
Farmers National Bank, Danville, Ky.
DISTRICT N O . 9.

Additions:
First National Bank, Little Falls, Minn.
Merchants National Bank, Sauk Center, Minn.
First National Bank, Slayton, Mian.
Commercial National Bank, Bozeman, Mont.
Silver Bow National Bank, Butte, Mont.
First National Bank, Cut Bank, Mont.
State National Bank, Miles City, Mont.
First National Bank, Roundup, Mont.
First National Bank, White Sulphur Springs, Mont.
Merchants National Bank, Dickinson, N. Dak.
First National Bank, Hillsboro, N. Dak.
First National Bank, Lisbon, N. Dak.
First National Bank, Rolla, N. Dak.
The National Bank of Wahpeton, Wahpeton, N. Dak.
First National Bank, Bristol, S. Dak.
First National Bank, Fairfax, S. Dak.
First National Bank, Gary, S. Dak.
Withdrawn:
i
First National Bank, Le Roy, Minn.

SEPTEMBER 1, 1915.

271

FEDEEAL KESERVE BULLETIN.
DISTRICT No.

11.

Additions:
First National Bank, Nogales, Ariz.
Withdrawn:
Citizens National Bank, Arlington, Tex.
Western National Bank, Fort Worth, Tex.
DISTRICT NO. 12.
CALIFORNIA.

Additions:
Anaheim National Bank, Anaheim.
First National Bank, Banning,
First National Bank, Burbank.
First National Bank, Chico.
First National Bank, Clovis.
First National Bank, Coalinga.
National Bank of Coalinga, Coalinga.
First National Bank, Compton.
First National Bank, El Centre.
First National Bank, Escondido.
First National Bank, Eureka.
Citrus National Bank, Exeter.
First National Bank, Exeter.
First National Bank, Fort Bragg.
Farmers' & Merchants' National Bank, Fullerfcon.
First National Bank, Fullerton.
Farmers' & Merchants' National Bank, Han ford.
Healdsburg National Bank, Healdsburg.
First National Bank, Hollywood.
First National Bank, Imperial.
Farmers' & Merchants' National Bank. Livermore.
First National Bank, Lodi.
Exchange National Bank, Long Beach.
National Bank of Long Beach, Long Beach.
Continental National Bank, Los Angeles.
First National Bank, Los Banos.
Farmers & Merchants National Bank, Merced.
First National Bank, Merced.
First National Bank, Oakdale.
First National Bank, Ocean Park.
First National Bank, Orland.
First National Bank, Oroville.
First National Bank, Palo Alto.
First National Bank, Paso Robles.
Sonoma County National Bank, Petalmm.
First National Bank, Pleasanton.
Red Bluff National Bank, Red Bluff.
Redding National Bank, Redding.
First National Bank, Riverb&nk.
First National Bank, Salinas.
San Bernardino National Bank, San Bernardino.
American National Bank, San Francisco.
Anglo & London Paris National Bank, Sar. Francisco.
First National Bank. San Francisdo.
Croker National Bank, San Francisco.
Merchants National Bank, San Francisco.
Mercantile National Bank, San Francisco.
First National Bank, San Jacinto.
Marin County National Bank, San Rafael.
California National Bank, Santa Ana.
First National Bank, Santa Ana.
First National Bank, Santa Barbara.
5554—15—-4




| Additions—Continued.
I
Farmers' & Merchants' National Bank, Santa Cruz.
;
Merchants' National Bank, Santa Monica.
Santa Rosa National Bank, Santa Rosa.
I
Sonora National Bank, Sonora.
i
National Bank of Tulare, Tulare.
i
Pajaro Velley National Bank, Watsonville.
Wliittier National Bank, Whit-tier.
i
First National Bank, Willows.
First National Bank, Winters,
i
First National Bank, Woodland.
;

ARIZONA.

I Additions:
First National Bank, Yuma.
IDAHO.

i Additions:
First National Bank, American Falls.
First National Bank, Ashton.
First National Bank, Briggs.
First National Bank, Burley.
First National Bank, Cottonwood.
First National Bank, Mountain Home.
OREGON.

Additions:
Astoria National Bank, Astoria.
First National Bank, Baker City.
Harney County National Bank, Burns.
Ben ton County National Bank, Oorvallis.
First National Bank of Southern Oregon, Grants Pass.,
First National Bank, Hermiston.
Hillsboro National Bank, Hillsboro.
First National Bank, Klamath Falls.
La Grande National Bank, La Grande.
First National Bank, Lebanon.
McMinnville National Bank, McMinnville.
First National Bank, Merrill.
First National Bank, Milton.
Ontario National Bank, Ontario.
First National Bank, Portland.
Roseburg National Bank, Roseburg.
First National Bank, St. Johns.
First National Bank, Tillamook.
Additions:
First National Bank, Nephi.
Utah National Bank, Ogden.
WASHINGTON.

Additions:
First National Bank, Auburn.
Bellingham National Bank, Bellingha-m.
First National Bank, Burlington.
Farmers National Bank, Colfax.
Montesano National Bank, Montesano.
First National Bank, North Yakima.
Yakima National Bank, North Yakima.
National Bank of Palouse, Palouse.
United States National Bank, Vancouver.
Baker-Boyer National Bank, Walla Walla.
First National Bank, White Salmon.

272

FEDERAL RESERVE BULLETIN.

Trustee Powers.

SEPTEMBER 1, 1915.

DISTRICT N O . 6.

Applications from the following banks for Trustee, executor, administrator, and registrar of stocks
and bonds:
permission to act under section 11 (k) of the
Exchange National Bank, Fitzgerald, Ga.
Federal Reserve Act have been approved since Trustee, executor and administrator:
the August Bulletin, as follows:
First National Bank, Piedmont, Ala.
First National Bank, Gadsden, Ala.
DISTRICT NO. 1.

Trustee and registrar of stocks and bonds:
Amoskeag National Bank, Manchester, N. H.
Trustee, executor, administrator and registrar of stocks and
bonds:
Pittsfield National Bank, Pittsfield, Mass.
First National Bank, Marlboro, Mass.
City National Bank, Bridgeport, Conn.
City National Bank, South Norwalk, Conn.

DISTRICT No. 7.

Tnir fee, executor, administrator, and registrar of stocks and
bonds:
National City Bank, Chicago, 111.
First National Bank, Marion, Ind.
Howard National Bank, Kokomo, Ind.
First National Bank, Independence, Iowa.
First National Bank, Stan ton, Iowa.
Commercial National Bank, Waterloo, Iowa.

DISTRICT No. 2.

Registrar of stocks and bonds:
Harriman National Bank, New York City.
DISTRICT No. 3.

Trustee, executor, administrator, and registrar of stocks and
bonds:
First National Bank, Pen Argyle, Pa.
First National Bank, Princeton, N. .T.
-DISTRICT No. 4.

Trustee, executor, administrator, and registrar of stocks and
bonds:
Mt. Sterling National Bank, Mt. Sterling, Ky.
Trustee and registrar of stocks and bonds:
National City Bank, Akron, Ohio.
First National Bank, Hamilton, Ohio.
Trustee:
First National Bank, Oakmont, Pa.

DISTRICT No.

9.

Trustee, executor, administrator, and registrar of stocks
and bonds:
First National Bank, Ellendale, N. Dak.
First National Bank, Colman, S. Dak.
Security National Bank, Sioux Falls, S. Dak.
Ashland National Bank, Ashland, Wis.
Commercial National Bank, Appleton, Wis.
Trustee, executor, and administrator:
Negaunee National Bank, Negaunee, Mich.
First National Bank, Webster, S. Dak.
DISTRICT NO. 10.

Trustee, executor, administrator, and registrar of stocks and
bonds:
First National Bank, Kemmerer, Wyo.
Trustee, executor, and administrator:
First National Bank, Jewell City, Kans.
First National Bank, Utica, Nebr.

DISTRICT NO. 5.

Trustee, executor, administrator, and registrar of stocks and
bonds:
Merchants-Mechanics National Bank, Baltimore, Md.
Farmers and Merchants National Bank, Frederick, Md.
First National Bank, Oxford, N. C.
Central National Bank, Spartanburg, S. C.
Empire National Bank, Clarksburg, W. Va.
First National Bank, Fairview, W. Va.
First National Bank, Grafton, W. Va.
Parkersburg National Bank, Parkersburg, W. Va.
Fauquier National Bank, Warren ton, Va.
Trustee, executor and administrator:
Montgomery County National Bank, Rockville, Md.
Madison National Bank, Madison, W. Va.




DISTRICT NO. 11.

Trustee, executor, administrator, and registrar of stocks and
bonds:
Consolidated National Bank, Tucson, Ariz.
Trustee, executor, and register of stocks and bonds:
First National Bank, Fort Worth, Tex.
DISTRICT NO. 12.

Trustee, executor, administrator, and registrar of stocks and
bonds:
Bank of California, N. A., San Francisco, Cal. (Registrar only in California).
Beilingham National Bank, Bellingham, Wash.
National Bank of Commerce, Seattle, Wash.

SEPTEMBER 1,

1915.

FEDEBAL RESERVE BULLETIN.

273

LAW DEPARTMENT.
The following opinions of counsel have been j
"The shareholders of every Federal reserve
authorized for publication by the Board since
bank shall be held individually responsible
the last edition of the Bulletin:
* * * for all contracts, debts, and engagements of such bank to the extent of the amount
Liability of Stockholders of State Banks Which Have |
of their subscriptions to such stock at the par
Become Member Banks.
j
i value thereof in addition to the amount subThere is no provision in the Federal reserve act; imposing j scribed/'
double liability on the stockholders of State banks or trust j
This provision subjects the State bank or
companies which become members of a Federal reserve I
trust
company which becomes a member to
bank.
j
liability
double the amount of their subscripJUKE 5, 1915.
j
tion
to
the
stock of the Federal reserve bank,
SIB: The question has been raised whether or j
but
this
imposes
no individual liability on the
not the stockholders of a State bank or trust
company which becomes a member of the Fed- shareholders of such State bank or trust comeral reserve system are, by reason of such mem- pany.
Respectfully,
bership, subject to the double liability pro- j
M. C. ELLIOTT, Counsel.
vided for national banks in section 5151,
Revised Statutes.
This section reads in part as follows:

To Hon. C. S. HAMLIN,

!

Governor Federal Reserve Board,.

The shareholders of every national banking j
association shall be held individually responsi- j
ble, equally and ratably, and not one for another, for all contracts, debts, and engagements of such association, to the extent of the
amount of their stock therein, at the par value
thereof, in addition to the amount invested in
such shares * * *.

Deposits of Gold or Lawful Money by a Federal Reserve
Agent with the Federal Reserve Board.
Gold, gold certificates, or lawful money deposited hy
the Federal reserve bank with its Federal reserve agent for
the purpose of reducing its liability for outstanding notes
may legally be deposited by such agent with the Federal
Reserve Board.
JUNE 23, 1915.

Section 9 of the Federal reserve act, relating
to State banks and trust companies which are
members of the Federal reserve system, provides that such banks shall be subject to the
provisions of sections 5188, 5200, 5201, 5208,
5209 and to certain other Federal laws. Neither section 9 nor any other section of the Federal reserve act provides that such bank shall
be subject to the provisions of section 5151
above referred to. In the absence, therefore,
of any affirmative enactment to this effect, it
is clear that State banks or trust companies
located in a State the laws of which do not
provide that the stockholders shall be subject
to double liability, may become members of
the Federal reserve system without subjecting
their stockholders to this liability.
In this connection, however, it may be proper
to call attention to the fact that section 2 of the
Federal reserve act provides that—

SIR: The question has been raised whether
gold, gold certificates, or lawful money deposited by a Federal reserve bank with its Federal
reserve agent for the purpose of reducing its
liability for outstanding Federal reserve notes,
may legally be deposited by such agent to his
credit with the Federal Reserve Board; or
whether a Federal reserve bank may legally
reduce its liability for outstanding notes by
transferring funds held in its name in the gold
settlement fund to the credit of the Federal
reserve agent.
Section 16 provides that "The Federal reserve agent shall hold such gold, gold certificates, or lawful money available exclusively for
exchange for the outstanding Federal reserve
notes when offered by the Federal reserve
bank of which he is a director."
This section indicates that Congress intended
the funds deposited with the Federal reserve
agent in this manner to be held " available''




274

FEDERAL RESERVE BULLETIN.

exclusively for the exchange of outstanding
Federal reserve notes when offered by the Federal reserve bank. The main question for
consideration is, therefore, whether funds deposited with the Federal Reserve Board to the
credit of the Federal reserve agent—whether
by transfer of credit by the Federal reserve
bank or by actual deposit of the Federal reserve
agent—are funds held by the agent "available77
for the exchange specified in this section.
The wording of the act does not indicate that
Congress intended to require the Federal reserve agent to hold these funds actually in his
own possession or in a vault under his charge.
If the funds are "available" when required by
the agent to effect the transfer for which they
are intended by the act, it would seem that
both the spirit and letter of the law aro complied with.
Under the proposed plan each Federal reserve agent will open an account with the
Federal Reserve Board and, instead of keeping
the gold or gold certificates in his own possession, will make a deposit to his credit with the
Board. Telegraphic directions will be sufficient
to make a transfer of the credit to the Federal
reserve bank in any case where notes are offered
to the Federal reserve agent by such Federal
reserve bank for the purpose of exchange.
This plan, like the act, presupposes that the
bank will itself redeem the notes when presented over its counter for redemption. When
such notes are then offered to the agent by the
bank for exchange, he will, instead of returning
the gold or gold certificates deposited with him,
telegraph instructions to the board to make
the transfer to the Federal reserve bank on the
books of the gold settlement fund.
There would seem, therefore, to be no legal
objection to the proposed plan. As previously stated, the funds are "available" for the
exchange, and that is all that is required by
law, no provision being made as to how and
where they shall be kept.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. CHARLES S. HAMLIN,

Governor Federal Reserve Board.




SEPTEMBER 1, 1915.

Government Depositories.
There is nothing in the Federal reserve act which
authorizes the Secretary of the Treasury to use State banks
which have become member banks as depositories 4oi
public monies generally, though they may be made depositories for postal savings funds.
JULY 8,

1915.

SIR: This office has been requested to give
an opinion on the question of whether or not
State banks upon joining the Federal reserve
system become eligible to act as Government
depositories for any Government funds other
than postal savings deposits.
In order to determine this question it is necessary to review those acts of Congress which
relate specifically to the deposit and custody
of public monies. The act of June 3, 1864, as
amended, the act of March 4, 1907 (see Revised
Statutes, section 5153) provides in part as
follows:
All national banking associations shall be
depositories of public money under such regulations as may be prescribed by the Secretary.
The act of June 25, 1910, Chapter 386, :>6
Statutes, 814, prescribes that the funds received at postal savings depository offices in
each city, town, village, or other locality, shall
be deposited in solvent banks located therein,
! whether organized under national or State
laws, which are willing to receive such deposits
under the terms of the act and the regulations
made by authority thereof. The word "bank "
as used in the law includes savings banks and
trust companies doing a banking business.
(See Regulations for the guidance of qualified
hanks and others concerned issued ~by the Board
of Trustees, Postal Savings System, effective
July 1, 1913.)

The Federal reserve act, section 15, provides
in part that—
The moneys held in the general fund of the
Treasury * * * may, upon the direction of
the Secretary of the Treasury, be deposited in
Federal reserve banks; * * * and the
revenues of the Government or any part thereof
may be deposited in such banks. * * *
No public funds of the Philippine Islands, or of
the postal savings, or any Government funds,
shall be deposited in the continental United

SEPTEMBER 1,

1915.

FEDERAL RESERVE BULLETIN.

States in any bank not belonging to the system
established feythis act: Provided, however, That
nothing in this act shall be construed to deny
the right of the Secretary of the Treasury to
use member banks as depositories.
It has been suggested that the proviso last
above quoted gives to fche Secretary of the
Treasury the right to designate State banks
which become members of the Federal reserve
system as Government depositories. It is
clear, however, from an examination of the
acts in force prior to the passage of the Federal
reserve act, that the Secretary of the Treasury
was without power to designate any bank, other
than a national bank, as a Government depository, and while the use of the word " member
bank" in the proviso quoted would seem to
indicate that Congress intended to include
State bank members, it failed to affirmatively
vest the power to designate State banks in the
Secretary of fche Treasury.
In order, therefore, to reach the conclusion
that State banks may be designated under the
law, it is necessary to interpret this proviso as
an affirmative enactment vesting this right in
the Secretary. Such an interpretation would
be clearly contrary to the rules of construction
laid down by the Supreme Court of the United
States. In the case of Minis v. United States
(15 Peters, 423-445), Justice Story, in delivering the opinion of the court, says—
" I t would be somewhat unusual to find engrafted upon an act making special and temporary appropriations any provision which was
to have a general and permanent application
to all future appropriations. Nor ought such
an intention on the part of the legislature to be
presumed, unless it is expressed in the most
clear and positive terms, and where the language admits of no other reasonable interpretation. The office of a proviso generally is
either to except something from the enacting
clause, or to qualify or restrain its generality,
or to exclude some possible ground of misinterpretation of it, as extending to cases not
intended by the legislature to be brought within
its purview. A general rule, applicable to all
future cases, would most naturally be expected
to find its proper place in some distinct and
independent enactment."




275

This case is cited with approval in the later
case of Austin v. United States (155 U. S., 431).
In the absence, therefore, of any specific
provision in the Federal reserve act vesting in
the Secretary of the Treasury the right to
deposit Government funds in State banks which
are members of the Federal reserve system, it
seems clear that he has no greater right to designate such banks as depositories than he had
prior to the passage of the Federal reserve act.
This conclusion is further borne out by an
examination of the bill as it passed the House
and as it was amended by the Senate and
adopted in conference. Under the provisions
of the House bill the Secretary was required
to deposit in Federal reserve banks all funds
except funds held for the redemption of circulating notes. By the Senate amendment the
Secretary is permitted to deposit such funds in
Federal reserve banks, and the proviso referred
to, read in connection with the context of this
section, was clearly intended merely to authorize the Secretary to continue to use national
banks as Government depositories if in his discretion he finds this necessary or advisable.
I am, therefore, of the opinion that while
the use of the words "member bank,77 instead
of national bank, in the provision above
quoted, would seem to indicate an intention
on the part of Congress to broaden the powers
of the Secretary of the Treasury in this regard,
such an interpretation is not consistent with
the rules of construction laid down by our
courts, and that member banks can accordingly be used as depositories to no greater extent than they were used prior to the passage
of the act. In other words, State banks becoming members of the Federal reserve system may continue to be designated as depositories for postal savings funds, and national
banks may continue to be designated as depositories for such funds and for public moneys
generally.
Respectfully,
M. C. ELLIOTT, Counsel,
To Hon.

CHARLES S. HAMLIN,

Governor Federal Reserve Board.

276

FEDERAL RESERVE BULLETIN.

Transactions Involving the Importation or Exportation of
Goods.
A transaction in order to be the basis of a draft or bill
eligible for acceptance by a member bank must itself
involve the importation or exportation of goods. A transaction, wholly independent of the transaction covering
the importation or exportation of goods, is not sufficient
basis for an acceptance under the terms of section 13.
JUNE 11,

1915.

SIR: The following inquiry has been submitted to this office for an opinion: A domestic
corporation, which for convenience will be
designated "Company A," enters into a contract with another domestic corporation, designated "Company B," to furnish material to be
used by Company B in the manufacture of
products which Company B is under contract
with a foreign purchaser to export. Query:
Can a national bank accept a draft or bill of
exchange drawn by Company A and accompanied by the necessary documents ?
In other words, assuming that such an
acceptance complies with the other necessary
provisions of law and the regulations of the
Board made pursuant thereto, can such an
acceptance be said to be based upon the importation or exportation of goods ?
The exact language of that part of section 13
which is involved is as follows:
Any member bank may accept drafts or bills
of exchange drawn upon it and growing out of
transactions involving the importation or
exportation of goods.
From the facts stated it does not appear
that Company A, which draws the draft, has
any contract or is under any obligation to
deliver the material supplied by it elsewhere
than in the United States. There is no privity
of contract as between the foreign purchaser
and Company A; .on the contrary, Company
A has an independent contract with Company
B, bothbeing domestic corporations, and when
delivery of the material in question is made to
Company B and the purchase price paid, the
transaction is completed whether the goods in
question were exported or not. The mere fact
that the material furnished is ultimately intended for export in some form can not be said




SEPTEMBER 1,

1915.

to merge the two transactions into one and the
transaction between Company A and Company
B, which is wholly independent of the transaction between Company B and the foreign
purchaser, could not be said to involve the
exportation of the goods in question.
While the language used in section 13, and
above quoted, is broad enough to justify a
member bank accepting a draft or bill of exchange for goods or other articles purchased or
produced in connection with a definite contract
for export, even though the shipment may not
be a continuous or immediate one, it seems
clear that the transaction on account of which
the draft or bill of exchange is drawn must itself involve the exportation of the goods in
question. By analogy the same principles
must be applied to import transactions.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. CHARLES S. HAMLIN,

Governor Federal Reserve Board.

Deposit of Federal Reserve Notes for Credit or Redemption.
A Federal reserve bank receiving Federal reserve notes
issued by another Federal reserve bank may return such
notes to the issuing bank either for redemption or for
credit.
JULY 30,

1915.

SIR: The question has been asked whether a
Federal reserve bank receiving Federal reserve
notes issued by another Federal reserve bank
has the option, on returning such notes to the
issuing bank, to demand redemption in gold or
lawful money or to demand a credit for such
notes.
Section 16 provides in part as follows:
Whenever Federal reserve notes issued
through one Federal reserve bank shall be received by another Federal reserve bank, they
shall be promptly returned for credit or redemption to the Federal reserve bank through Miich
they were originally issued.
Inasmuch as this section provides that Federal reserve notes are redeemable in gold or

SEPTEMBER 1,

FEDERAL RESERVE BULLETIN.

1915.

lawful money by the Federal reserve bank
through which they were issued, it is clear that
the option to accept a credit in lieu of gold or
lawful money is vested in the holder of such
notes—that is to say, in. the Federal-reserve
bank returning them to the bank of issue.
The returning bank may therefore elect to
have them credited to its account or may require the Federal reserve bank to which they
are sent to redeem them in gold or lawful
money.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. CHARLES S. HAMLIN,

Governor Federal Reserve Board.
Waiver of Demand, Notice and Protest.
The acceptor of a bill of exchange is the principal debtor.
The law requires that notice of demand and protest be
given to parties secondarily liable in case of dishonor.
This right to receive notice is a personal one which may
be waived by the parties entitled thereto—that is, the
drawer and indorsers; but such waiver has no effect on
the acceptor, or principal debtor.
FEBRUARY 13,

1915.

SIR : The attached letter raises a question as
to the effect of waiver of demand, notice, and
protest upon the obligation of an acceptor of a
domestic draft or bill of exchange discounted
by a member bank under the provisions of
section 13 of the Federal reserve act.
An acceptor of a draft or bill is the party
primarily liable, and the drawer and endorsers
are merely sureties. (4 Am. & Eng. Encl.,
470, 2d ed., and cases cited.) In other words,
his liability is the same as that of the maker of
a note. He is the principal and not a collateral
debtor. (Blair v. Bank of Tennessee, 11
Humph. (Tenn.), 88.)
The requirement that the holder make
demand on the acceptor at maturity and give
notice of dishonor is provided for the benefit of




277

persons secondarily liable, such as the drawer
or endorser, and is intended to protect such
secondary party from the risk of loss which
may occur because of delay in demanding payment from the party primarily liable or because
of the fact that he has no notice that his principal has failed to pay. (Stanley v. McElrath,
86 Calit Kep., 457.)
In other words, the law provides that the
holder must demand payment at maturity and
that in case the bill is not paid by the acceptor
on demand other parties subsequently liable
must be given notice, in order that they may
take any necessary steps to protect themselves.
If they are not notified of demand and dishonor, they are entitled, as sureties, to conclude that the bill has been paid and that they
are released. The acceptor, or primary debtor,
on the other hand, is not entitled to notice, and,
unlike the drawer or endorser, is not released on
failure of presentment and demand at maturity.
(Daniel on Negotiable Instruments, 4th ed.,
vol. 2, p. 52; Hayes v. Northwestern Bank of
Virginia, 9 Gratt (Va.), 127.)
The right of other parties than the acceptor
to receive notice is a personal one, and if it is
not desired may be waived, but such waiver can
in no way affect any one other than the person
making it. Such person merely surrenders a
right afforded him by the law for his own
protection.
It seems, therefore, that a waiver of demand,
notice, and protest on a bill discounted by a
member bank under the provisions of section 13
can have no effect on the acceptor of such bill.
He remains liable just as though the formality
due the person making the waiver had been
complied with.
Respectfully,
M. C. ELLIOTT, Counsel.
To HON. CHARLES S. HAMLIN,

Governor Federal Reserve Board.

278

FEDERAL RESERVE BULLETIN.

GENERAL BUSINESS CONDITIONS.

General business and banking conditions are
described in reports made by Federal reserve
agents for the 12 Federal reserve districts.
Below are given in detail digests of conditions
in the various districts substantially as reported
by Federal reserve agents.
DISTRICT NO. 1—BOSTON.

Outside of increased emergency orders, which
are being felt directly or indirectly in all lines
of trade, there is practically no change over
conditions as reported a month ago. While a
comparison of the clearing-house statement of
the Boston banks shows a slight reduction from
that of the same period last month, the surplus
is still so large and the demand from borrowers
so slight that there are no material changes in
the money rates. Money is accumulating in
the country banks, and they not only have been
less frequent borrowers of their city correspondents, but have been in the market for outside
paper.
While early in the month a slight hardening
tendency was noticeable in the money market,
the month is ending with conditions much the
same as previously reported. Call money to
brokers is freely offered at 3 per cent; six
months commercial paper, 3£ to 4 per cent;
loans to country banks, 3 to 4 per cent; town
notes, 2^ per cent; bank acceptances, 2J to 2 |
per cent; excess reserve in Boston banks
$41,411,000, a decrease of $4,563,000 from the
same date last month. Exports and imports
for the month of July compare with a year ago
as follows: Exports for July, 1915, $9,104,337;
imports for July, 1915, $12,891,505. Exports
for July, 1914, $5,246,599; imports for July,
1914, $14,886,723.
Unsettled conditions of labor in the large
manufacturing centers is causing much concern
to the manufacturers. Attracted by the higher
wages paid by certain firms, operatives are
changing and some manufacturers are finding
it difficult to keep up their forces.
The retail dealers and the department stores
report their business below normal, largely due




SEPTEMBER 1,

1915.

to the cold and rainy weather which prevailed
throughout New England during the first half
of the month. This is the season of the year
when the tourist trade is an important factor
with them, and this is much smaller than in
previous years. The shore and mountain
resorts are also rather quiet for midsummer.
The farmers and produce men throughout
New England have had their crops damaged
to a considerable extent by the elements, especially hay and corn, and potato rot has
appeared in many sections. The farmers in
Aroostook County, Me., however, where the
potato yield is the important crop, report this
to be satisfactory.
The reports of the shoe and leather trade,
while showing a spotty condition, on the whole
indicate a slight improvement, but outside of
war orders, business is little better than 60 per
cent of normal.
The reports from New Bedford and other
fine-goods centers continue favorable, and
although coarse goods mills are not up to
normal, still they are reasonably well employed.
The dye situation and the uncertainty of the
new cotton crop are important factors. The
reports from the woolen-mill centers are quite
satisfactory. Even the general line of goods is
reported to be in better demand.
Building operations in New England show
contracts for the year up to August 4 of
$108,767,000, the largest amount shown at
any time during the past 15 years, with the
exception of the year 1912.
DISTRICT NO. 2—NEW YORK.

Wet weather has continued during July. In
some sections the rainfall was 6 inches against
1£ inches in July, 1914. Hay was considerably
damaged, but in most places other crops are
reported in excellent condition. Retail trade
reflected the seasonal quietness, but wholesale
houses reported good business and satisfactory
collections.
Industry was more active, particularly in
iron, steel, machinery, wool, and leather.
Foreign orders are still the leading stimulus.
Labor unrest appeared in various places but

SEPTEMBER 1,

1915.

FEDERAL RESERVE BULLETIN.

the differences were adjusted in most cases and
some long standing strikes were settled. Suburban real estate is dull; in New York City a
slow improvement continues.
The New York bank clearings in July totaled
$8,695,413,567, an increase of $514,928,945
over July, 1914. Other statistics compared
for the same periods show: Building permits
issued, 50 for structures to cost $4,097,080,
a gain of 7 in number but a decrease of $508,270
in amount; new incorporations, 84 with authorized capital $27,400,000, an increase of 28 in
number and $12,330,000 in amount; New York
State failures, 207 with liabilities of $2,479,510,
a decrease of 37 in number and $5,276,715 in
liabilities; transactions on stock exchange,
bonds $56,489,500, an increase of $4,792,500;
stocks 14,326,813 shares, an increase of 6,436,214 shares and of 3,426,000 shares over June.
A noteworthy volume of business was also
transacted on other exchanges and some extraordinary price movements occurred in a
number of listed and unlisted stocks.
On July 31 the combined figures of the
members of the New York Clearing House
show, loans $2,577,944,000, deposits $2,695,302,000, and excess reserves $180,384,050.
Compared with June 26, loans increased
$101,647,000, and deposits $112,738,000, but
excess reserves decreased $12,868,000. Money
rates remained practically unchanged; bankers'
acceptances 213g- to 2 | per cent, and prime commercial paper 3J to 4 per cent with occasional
sales at 3 per cent. Recent noteworthy happenings are the Canadian loan of $45,000,000
taken in New York, the movement of $19,534,000 gold and an unstated amount of securities from London to New York via Halifax,
and the extreme decline in rates of exchange
on sterling and continental bills. The quotations for checks touched: Sterling, 4.64J;
francs, 6.02J; marks, 80J; lire, 6. 55.

279

look is uncertain. Emergency business continues to give employment to iron and steel
concerns and some wool and worsted mills up
to almost full capacity, and it is hoped that
this will soon create activity in other lines of
business.
Rates for money remain very low; funds continue to accumulate in the banks and excess
reserves are higher than ever before. There
is little demand for time or call money, the
rates for both being 3J to 4 per cent. Commercial paper is scarce, with the rates ranging
from 3 to 4 per cent.
Crops are generally reported to be satisfactory, but heavy rains and continued wet
weather have done considerable damage in
some sections. The prices of fruits and vegetables are in many instances low, due apparently to underconsumption. As we understand the production of these has not been
above the average. Through certain channels
of distribution not over 50 per cent of goods
are being sold as compared with former years.
Railroad freight traffic is increasing and the
roads are employing more men in their shops.
Considerable improvement is noted in the
cement business, due to some extent to exports
to South America.
Apart from emergency orders, textile mills
are operating at 60 to 70 per cent capacity.
Hosiery mills are doing a little better than
other lines. The lack of dyestuffs continues
to be a serious factor.
Although a slight increase is reported in coal
mining, the mines are onty working on half
time. Petroleum refiners and manufacturers
of oil products are working full time; business
is reported good and the prices are advancing.
Shoe manufacturers report business as sluggish and disappointing. Leather is high and
prices are advancing. The grocery trade is
dull; canned goods are selling at very low
DISTRICT NO. 3—PHILADELPHIA.
prices, in some cases below cost. Large tobacco
There has been little change in business con- dealers and cigar manufacturers are busy.
ditions in this district. The expected general Drugs and chemicals continue to advance in
improvement has not appeared and the out- price.




280

FEDERAL EESERVE BULLETIN.

The prices of lumber continue low. New
municipal work and some increase in the construction of factories and dwellings will probably mean a greater consumption of lumber
this year than last year, and the outlook seems
better. Hotels and amusement companies at
seashore and mountain resorts report business
below the average.
Stocks of almost all kinds in dealers' hands
are low. Orders for goods are for small quantities, suggesting that business is being conducted most conservatively. Financial conditions everywhere seem to be sound, and the
country is ready to take advantage of any
improvement in general trade conditions.
DISTRICT NO. 4—CLEVELAND.

Gains indicated in last month's report are being
held in this district, although there has been no
decided advance in conditions of 30 days ago.
Exceptions are the cloak and knitting industry,
where pay rolls in a number of instances are
highest in the history of the business; the glass
trade, especially in pressed ware, and the coal
business in Pennsylvania, West Virginia, and
Kentucky. The coal situation in Ohio still
remains unsatisfactory. Prices and volume in
the other three States are better. Pig iron and
billets are slightly stronger, both in price and
demand. Domestic trade has not reached
normal. Purchasing by railroads and other
sources is only intermittent. A shifting in the
placing of business is noted, due to concerns
being filled with urgent orders and placing their
business in new channels, and corporations
which have refused foreign orders expect to
benefit by this shifting to a considerable degree.
Deposits show an increase, averaging about 4
per cent over the June 23 call of the Comptroller. Loanable funds are plentiful, but
bankers as a rule are not investing in outside
paper at the low prevailing rates. Paper offered
by note brokers ranges from 3J to 4 per cent.
Banks' over the counter rate varies form 4J to
6 per cent. Large banks in reserve cities are
meeting the reserve bank rate in lending their
correspondents.




SEPTEMBER 1, 1915.

Pay rolls are larger due to increased production noted last month.
The crops are suffering somewhat from too
much moisture, but the falling off is from the
anticipated crop. It is likely that the yield
in this district will equal last year's with the
average price of all farm products 1 per cent
higher than a year ago and 11 per cent higher
than two years ago.
Jobbing and retail trade is spotty, but genally a better feeling prevails. Down trade on
the lakes is good on account of demand for ore
by reason of resumption of many furnaces.
The lake carriers' estimate of 40,000,000 tons
which navigation down the lakes would receive,
has been increased to 43,000,000 tons through
this new demand from additional furnaces.
Difficulty is experienced in getting return cargoes owing to accumulation of coal on docks
not yet entirely absorbed.
Collections in the wholesale and jobbing,
trade are slower, due to the late harvest. Retail
collections in the city show improvement.
DISTRICT NO. 5—RICHMOND.

Readjustments compelled or induced by
changed conditions have reached a stage in
this district at which their effect upon its
general trade is beginning to be evident.
Labor of all classes seems to be very well employed, while there is a strong demand for
skilled mechanics. In the increasing number
of cities within this district in which manufacturing is developing, pay rolls are "much
heavier than was the case sixty days ago.
The retail trade is just beginning to feel the
effect, as wages received to date have in large
measure been used in liquidating indebtedness
incurred during a preceding period of idleness.
August is always a quiet month in many retail
lines, and the fact that some little improvement is noticeable in comparison with July
possibly reflects a change of conditions which
will be gradually accentuated.
The larger jobbing distributing centers in
the district are almost as greatly dependent
upon cotton as is the territory in which the

SEPTEMBER 1,

1915.

FEDERAL BESBKVB BULLETIN.

staple is actually grown. In consequence,
general trade collections, while comparatively
light as is usual in midsummer, are not disappointingly small.
In the Carolinas it seems to be very widely
appreciated that this year there can be no
excuse for a repetition of the experiences of
last fall. The knowledge that there are now
at hand well organized agencies competent to
assist in the gradual liquidation of cotton, free
from undue pressure upon the farmers, has
had a most steadying influence and will make
for the marketing of the staple at prices subject only to the universal law of supply and
demand, and freed from artificial or hysterical
conditions. Banking facilities now available
as a matter of routine will, in permitting the
generous use of cotton as collateral when
desired, enable the growers rapidly to liquidate
seasonal indebtedness to mature in the fall,
and such a condition should make for the
advantage not only of the banks and merchants
immediately identified with the farmers, but
in turn with distributors of all kinds who have
done business with the cotton section.
Cotton milling has been somewhat uneven
in that while many properties have been doing
well, the minority has not fully met its expectations.
Some of the more southern of our tobacco
markets have opened at prices which seem to
be satisfactory to all concerned, and better
than have been expected in view of a very
generous stock carried over from last year.
The quality is better than was the case last
season.
From both the Carolinas come reports of
satisfaction with the result of experiment in
greater diversification than heretofore practiced. Well-distributed rains insure the promise of a generous corn crop of excellent quality,
while for the same reason abundant grass and
hay crops will insure to those raising live stock
very much better return for their labor than
was the case last year.
Lumber is least responsive to change for the
better in all of the larger lines. The trade is




281

still in a depressed condition, which, while no
worse than has been the case for some time in
the past, does not show any improvement.
Building trades and woodworkers generally,
such as furniture manufacturers, show no special improvement.
Sections largely given over to white potatoes
and vegetable truck have been disappointed in
prices, and in consequence liquidation in such
sections has not met expectations.
Coal is working into a better position. While
the tonnage has greatly increased, to the benefit of labor, the increased profits in the business have been limited largely to those operating on a generous scale. Continued export
demands in connection with the gradual but
sure increase from domestic manufacturers,
promise well for the immediate future.
Money is easy, with little demand for credit
excepting in continuance of indebtedness outstanding since the planting season. There
should be some further demand during the next
30 days from the cotton territory for use in
connection with saving the crop, but the total
amount of such credit should not be great and
can be easily supplied.
Viewing the situation in the district as a
whole, favorable facts and promises, both actually and comparatively with the recent past,
so outweigh single unfavorable situations as to
inspire a feeling of confidence.
DISTRICT NO. 6—ATLANTA.

The most prominent feature in the business
movement in the sixth Federal reserve district
is the strong revival of the iron industry of the
Birmingham district. The increased operations, due to a steady advance in the price of
pig iron and finished products, have necessitated the blowing-in of a number of additional
furnaces, some of which have been idle for
many months. With this renewed activity
labor is fully employed and the effect is being
reflected in the general lines of trade.
Jobbers and merchants are looking forward
to a good fall trade, though their advance buy-

282

FEDERAL RESERVE BULLETIN.

ing is very conservative. With the coming of
September and some definite disposition of the
cotton situation the mercantile lines will assume a more normal condition.
Rains have been general throughout the district, crops are reported in good condition, and
the outlook very gratifying.
New Orleans has under construction a modern storage warehouse with a capacity of
1,000,000 bales; Atlanta an additional warehouse capacity of 200,000 bales. Reports indicate a storage capacity in the district of 3,500,000
to 4,000,000 bales, and no fear is felt as to the
ability to take care of the cotton crop from the
viewpoint of storage; nor from a standpoint of
finance, in view of the assurance that the cotton in the district can be easily financed through
the Federal reserve bank of Atlanta.
Savannah and Jacksonville report large
stocks of naval stores on hand, with slight
movement in the trade. Whilo the domestic
lumber market is dull, there has been an increased demand for exportation within the past
30 days. Plans are under way to organize a
$3,000,000 shipbuilding plant, to be located
at Savannah or Brunswick, Ga.
Passenger and freight traffic do not appear
to keep pace with the general improvement,
but a more optimistic feeling prevails with the
railroads in view of the brightening up of the
industrial situation and the movement of the
incoming cotton crop.
DISTRICT NO. 7—CHICAGO.

August developments in the seventh district
show the general business advance. Weather
conditions have not been entirely seasonable
and retarded harvesting and retail activity at a
few points. Good pasturage is general. Better than average crops prevail over the district,
but the quality will not average as high as
usual. Grains are being marketed in increasing volume.
In iron and steel the leading interests have
all of their furnaces and rolling mills running
to full capacity. Other manufacturing lines
are making a good showing, particularly in




SEPTEMBER 1,

1915.

railroad equipment, hardware, machinery, and
building lumber.
Reports from Detroit, Indianapolis, and
other automobile centers indicate unusual
demand for new models and enlargement of
factory facilities.
The large orders placed throughout the district, together with the general increased manufacturing and building activity, have made a
good demand for labor at fair wages. Skilled
labor is especially in demand.
General merchandise markets have been
largely attended by active buyers who are
anticipating good fall and winter business.
Easy money conditions favor conservative
expansion in business. Discount rates remain
about the same, the minimum for commercial
paper being 3J; over the counter loans range
from 4 to 5 per cent. Banks are carrying
heavy reserves and collections are good.
DISTRICT NO. 8—ST. LOUIS.

Business conditions in this district remain
approximately as outlined in the report for the
month of June. Changes noted have been for
the better, and there seems to be a still more
clearly defined feeling of confidence, especially
among wholesale interests. The volume of
unfilled orders on hand apparently is more satisfactory than shipments, although early buyers
are reported to be liberal in their purchases.
This increased demand would seem to indicate
an increase of activity in the manufacturing
interests, which should be noticeable in the
next few months. Manufacturers in this district whose product is available for export continue to feel the demand from foreign sources.
Climatic conditions during July were in the
main favorable for the development of agricultural products. The temperature was below
the normal throughout the district with more
than the average rain fall, in the northern sections and less than the normal in the southern
sections. Reports from the cotton producing
sections indicate an excellent crop with the
percentage of condition well above that of
1914 and of the 10-year average. Reports

SEPTEMBER 1,

1915.

FEDERAL RESERVE BULLETIN.

on the tobacco crop indicate a normal development to this date. Reports on the wheat crop
indicate a satisfactory harvest. Wheat in
Missouri seems to have been damaged more
than in any other State of this district, but in
Missouri as well as the other States, the crop
will be considerable above the five-year average. Corn reports indicate that the crop will
be considerably larger than in 1914 and will
show a really large gain over the five-year
average. The same may be said of the oats
and fodder crops. Reports on the small-fruit
crops and truck-farm products indicate that
the supply is plentiful, with the prices moderate.
The live-stock market continues to show the
activity which was noted in the last few
reports.
Banking conditions show little or no change
during the past 30 days. The rate of discount
in St. Louis seems to be stationary at from 4£
to 5 per cent. There is an active demand for
good commercial paper, but little of this class
in the market at a rate to tempt the bankers.
Changes noted in general conditions during
the past month seem to be for the better. An
increase of activity is noted in general business,
and with the promise of an excellent harvest
conditions should continue to improve.
DISTRICT NO. 9—MINNEAPOLIS.

Clear weather during August has been of the
greatest benefit over the ninth district in permitting farmers to proceed with the harvest of
a very large small-grain crop. Over the entire
territory the harvest is practically completed
and thrashing is in progress in many localities.
The first new wheat reached the Minneapolis
market about the middle of the month and was
of fine quality and good color. Grain shipments are now beginning to move in larger volume and during the first half of September will
become very heavy.
The favorable weather during August, with
many clear, warm days, has made a remarkable
improvement in the corn crop throughout the
entire district. The southern half of Wisconsin, the southern half of Minnesota, and the




283

corn-growing portion of South Dakota report
that soil conditions were such that the warm
weather brought a substantial growth of the
crop and a period of very rapid development.
In these districts corn will not be far below an
average crop. In the more northerly sections
of Wisconsin, Minnesota, and North Dakota
there is yet some doubt as to whether corn will
mature, but it is making good progress and will
have an opportunity to make a fair crop in case
it is not injured by early fall frosts.
It is early to determine the accuracy of the
reports that are now coming in with reference
to the yields of small grains, but there is
dependable evidence that the small-grain totals
in the Northwest this year will be very large
and that the crop will average with the best
crops of former years. There is no further
apprehension on the score of yield, or quality,
and attention is now turning to the market
conditions and particularly to the export
situation.
Wholesale and retail business is responding
promptly to the favorable influence of the large
crop and a brisk fall business in all lines is
anticipated.
DISTRICT NO. 10—KANSAS CITY.

There have been no important changes in
general conditions prevailing throughout District No. 10 during the past 30 days, except a
slightly increased demand for money on account of the harvests and general crop moving,
although the thrashing season has been very
much retarded on account of continued rains
and storms.
Fluctuations in the price of wheat have
rather discouraged the marketing of that cereal,
which, together with the unseasonable weather
preventing thrashing of the grain, has made the
movement of that commodity slow. This
likely will cause an increased demand for money
for carrying purposes. Deposits in banks
throughout the district are probably greater
than they were at this time last year, the direct result of the sale of live stock, agricultural
and mineral products to supply foreign demands therefor.

284

FEDERAL RESERVE BULLETIN.

In the southern portion of the district corn is
made and has proven a record crop, and the
general condition of that crop throughout the
district will show at least 80 per cent average
stand and yield. The milling industry is thriving and shows continued activity.
The unusually wet summer has produced an
exceptionally fine pasturage for stock, and grass
cattle are moving to the markets. Sheep and
lambs are beginning to move from the ranges to
the Missouri River markets, and are bringing
the highest prices ever known for this season of
the year. The horse and mule market continues active, and at one small town in Missouri not long since over 25,000 of these animals
had been collected for shipment.
The greatest fruit crop ever raised in the
southern portion of this district has been largely
lost because of lack of canning facilities, and
much of the peach crop will go to waste. Orchardists in some parts of the territory are feeding the fruit to hogs and are giving it away to
all comers.
Coal mining shows an increased activity by
reason of the demand for early storage coal and
in anticipation of the thrashing season, while
lead and zinc mining shows unusual life on account of prevailing high prices. An added impetus has been given the oil industry on account of a 20 cents per barrel increase in price,
and if present prices continue the output of
this commodity will become normal at an early
date.
The district is practically free of labor disturbances and all classes of skilled and unskilled labor are generally employed.
DISTRICT NO. 11—DALLAS.

SEPTEMBER 1,

1915.

duce the great bulk of the staple. No rain fell
here for almost six weeks;.* Rain has, however,
recently fallen, averaging from 3 to 7 inches
over almost the entire district. Open cotton
has been heavily damaged in the southern end
of our territory. By way of compensation it
may serve to produce a fall crop, provided frost
does not come too early.
Only a few days have passed since the hurricane and it is accordingly impossible to estimate the losses incurred by the railroads, the
cities, and t*he country lying in its path.
Rather heavy totals are certain.
It is believed that the warehouse discussion
has worked most beneficially throughout this
district and that cotton will be held in storage
until the demand reaches the point of actually
calling it out, and that it will not be sacrificed.
The mining interests of the State have been
very much stimulated through the high prices
current for copper and lead. Great activity
prevails in our western section on this account.
The price of oil has risen from 5 to 10 cents
during the past month. The lumber interests
are still complaining, although a reasonable
volume of sales seems to indicate that even
here there is a wave of improvement. Some
lumber concerns have been cutting prices.
There has been no change in the demand for
funds. The reserve city banks are easy and
are experiencing only a light demand from their
country correspondents. Prevailing rates are
from 5 to 6 per cent.
General business conditions have been steadily improving, as the bankruptcy records show,
and the retail merchant is reporting better
volume while buying a little more freely. Jobbers in this district are beginning to feel the
improved conditions. Much depends on the
working out of our cotton crop. In hardly any
other part of the country is liquidation of debts
so wholly dependent on a single product.

August has proven a most unfavorable
month for this district. Almost the entire
territory has suffered from drought and blistering weather. This served to cut short the
corn crop over very considerable areas, particularly in north and northeast Texas and
DISTRICT NO. 12—SAN FRANCISCO.
Oklahoma. It has tended materially to reduce
In its foreign trade this district is suffering
the yield of cotton. The chief sufferers are
the central and north central belts, which pro- rofm the unsettled condition of the exchange




SEPTEMBER 1,

1915.

FEDERAL RESERVE BULLETIN.

markets and from the lack of ships, which latter
will be accentuated by the impending transfer
of the Pacific mail steamers from trans-Pacific
to Atlantic service. While the total export
and import business has been practically double
that for like periods last year, there seems good
ground for believing that this may suffer important curtailment.
Lumber is in slightly better demand, but
prices are the lowest in the history of the industry on the Pacific coast. Sales are reported at
less than the cost of production. Production
of petroleum in the California fields is now at
a rate of approximately 250,000 barrels per day.
Although consumption is slightly greater ,the
amount in storage is so large and competition
so keen that prices are depressed. Copper
mining is very active and prices high.
New building is at a low ebb, and a good deal
of unemployment is reported. Railroads are
busy and have increased their shop forces. Increased earnings are shown, but in this district
are chiefly due to the passenger department.
The Valencia orange crop has largely been
gathered and is being marketed at very satisfactory prices. Lemons, however, have accumulated in warehouses and have moved very
slowly at low prices. Hot weather in the East
would stimulate the demand. In deciduous
fruits the raisin industry is reported as flourishing and the situation as to prunes reasonably
satisfactory; but conditions are unsatisfactory




285

as to other fruits, including apples in Oregon
and Washington.
The yield of wheat in California has probably
not been more than 40 per cent of expectation,
but in other parts of the district the yield has
been good and the acreage large, resulting in a
large exportable surplus. Transportation difficulties are causing slow marketing and much
warehousing. The barley crop is reported
good. Hops are selling at prices as high as 15
cents. Cattle, mules, horses, sheep, wool, are
all commanding good prices.
Credit demands are light, and there are considerable excess reserves throughout the district. The deposits of the clearing house banks
in San Francisco (member and nonmember)
are at a record point and some $30,000,000 in
excess of the corresponding time last year.
Exposition attendance is heavy, and hotel
bookings are reported increasingly heavy into
October. Retail trade has undoubtedly been
stimulated in San Francisco by the presence of
a large number of visitors, but jobbers report
business as rather halting. Bank deposits in
San Francisco have undoubtedly been increased,
directly or indirectly, because of the exposition; but it seems a fair inference that the distribution of such temporary deposits after the
close of the exposition will not cause important
disturbance, inasmuch as these funds, for the
most part, have not been employed in industry
or trade.

286

FEDEBAL BESEBVE BULLETIN.

GOLD IMPORTS AND EXPORTS.
Imports of gold, by customs districts, Jan. 1 to Aug. 20, 1915.

Total.

Vermont.

St. Lawrence.

Michigan.

Dakota.

Buffalo.

Washington.

Southern California.

San Francisco.

Alaska.

Laredo.

El Paso.

Arizona.

New Orleans.

Florida.

1 Porto Rico.

New York.

Maryland.

Maine and New
Hampshire.

[In thousands of dollars.]

For week ending
July SO.
Ore and base bullion
Bullion, refined
United States c o i n . . . .
Foreign coin

1

20
127

7
8

12

8

12

1
2,467

2

Total .

1

149

95

121
123

236

31

511
270
1
2,469
3,251

7

2,503

244

236

31

23

78

62

143

32

For week ending
Aug. 6.
Ore and base bullion
United States mint or
assay office bars
Bullion refined
United States coin..
Foreicn coin

3

5

2 ....

1
1

lfil
1,637
3

Total

183

1,168
460
1,637
976

1,1G8

4,589

1 913

1,913
373
21,016
883

1,913

24,431

115
973

3

1,806

3

200

1,051

177

32

143
= ~

For week ending
Aug. IS.
Ore and base bullion
United States mint or
assay office bars
Bullion, refined .
21,000
Un /ted States coin
Foreign coin
Total

348
1,168

21,000

1

28

13

30 . . . .

84

32

58

149
16
10

13

4

207

203

14

17

207

903

84

58

32

1

32

5

7

15

67

230

26

246

873

For week ending
Aug. 20.
Ore and base bullion
United States mint or
assay office bars
Bullion refined
United States coin.. .
Foreign coin
Total

215
496
49

1

5

761

33

10

264

95

383

4 632

178
330
497
7,199

4,810

8,587

178

1

109

2,518
7

2,533

1

176

236

433

7

2,616

230 —

26

Jan. 1 to Aug. SO.
Ore and base bull ion..
1
323
253
United States mint or
assay office bars
Bullion, refined
7,043 . . . . 10 . . . . .
8
United States coin
19,764
21*000
25
Foreign, coin
""56" 4,066
Total

21,001




50 31 196

1

43

254

4

3,624

67 1,053

419 1,298

1,505

8
683 1,401

4 1,741

7,183
22
18,590

1

1,293
6
408

49

26,228

8

4,413

3 675

8,976
6,365
6,367
8,131
26,882
127,408
80, .r>56
5,254 " " 3 " 28,494

2

67 1,053

106,306

3

198,127

287

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1915.

Exports of gold, by customs districts, Jan. 1 to Aug. 20, 1915.
[In thousands of dollars.!
Maine
and
New
New
Hawaii. Alaska.
Hamp- York.
shire.

San
Francisco.

WashMichington. Buffalo. Dakota. igan.

Duluth
and
Superior.

St.
Lawrence.

Vermont.

Total.

For week ending July SO.
United States mint or assay office
bars
Bullion refined, domestic
United States coin
Foreign coin .

5
3

1,002

5
2

5
7
1,005

7

1,382

365

365

Total

1 307

8

For week ending Aug. 6.
Ore and base bullion
United States mint or assay office
bars
Bullion refined domestic
United States coin

27

24

3

CO CM

2

13
4
17

2

61

17

Total

41

3

15

For week ending Aug. 13.
Ore and b-ise buUion
Bullion, refined, domestic
United States coin
Foreign coin

1

2
250
°5">

Total

1

1

1

1

1

1
2
2
250
255

For week ending Aug. 20.

CO.

Total

1,000
250

oo

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

11,012
250

1,250

8

3

11,262

Jan. 1 to Aug. 20.

Total




190

7

13

2

2

5,380
3 439

23

8,819

23

7

61

67

61

270

1

1

31

5

6
20
7
9

4

74

4

1

i
1

Includes $1,000 for Montana and Idaho.

6

1

7

5

199

36
11

1

17

48
20

coco

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

15,543
3,451
11

19,297

288

FEDEKAL EESEKVE BULLETIN.

DISTRIBUTION OF REDISCOUNTS.

The total amount of commercial paper, exclusive of acceptances, rediscounted during the
month of July was $13,238,200, compared with
$13,404,000 in June and $12,145,700 in May.
The number of notes rediscounted was 10,155
in July, as against 10,734 in June and 9,558
in May.
The three southern banks handled about 70
per cent of the entire number and about 64 per
cent of the entire amount of the commercial
paper rediscounted during the month. The average size of all notes discounted by the Federal
reserve banks during July was $1,304, as against
$1,249 in June and $1,271 in May. This average varied between $867 for the Kansas City
bank and $2,277 for the San Francisco bank.
Of the total number of notes rediscounted in
July about 26.7 per cent, and of the total
amount about 52.3 per cent, were notes in
amounts of $1,000 to $5,000. Small notes (in
amounts up to $250) constituted about 30 per
cent of the total number, though only 3.3 per
cent of the total amount of notes rediscounted
during the month. Over 79 per cent of the
number of small notes (up to $250) was discounted by the three southern banks.
Of the total amount of notes rediscounted
during the month, 0.8 per cent was reported as
10-day paper, 12.2 per cent as 30-day paper,
34.1 per cent as 60-day paper, 40 per cent as
90-day paper, and 12.9 per cent as paper maturing after 90 days from the date of rediscount. These percentages vary for the individual banks, the average maturity of the




SEPTEMBER 1,

1915.

paper offered for rediscount being as a rule
higher in the South than in the other sections
of the country. Thus the proportion of 30-day
paper rediscounted by the three southern banks
was less than 45 per cent of the combined
amount of 10-day and 30-day paper rediscounted by all the banks, as against 64 per cent
shown as their share of total rediscounts.
Dallas, whose proportion of total rediscounts
for the month is 16.1 per cent, is credited with
the discount of less than 1 per cent of the
30-day paper.
The four eastern banks report about 32 per
cent of »the combined amount of 10-day and
30-day paper rediscounted, as against 10.5 per
cent of the total rediscounts for the month. Of
the total amount of paper rediscounted during
the month by the three southern banks, about
45 per cent was 90-day paper, as against 21 and
32 per cent in the case of the eastern banks, and
the western banks except San Francisco, respectively. Of the total amount of agricultural and live-stock paper with maturities exceeding 90 days, about 60 per cent was rediscounted by the three southern banks and about
24 per cent by the Chicago and Minneapolis
banks.
The rediscount of 10-day paper at the special
3 per cent rate is reported only by the Boston,
New York, and Philadelphia banks, though the
lower rate was also in force during the month
in the St. Louis and San Francisco districts.
The number of banks accommodated increased
from 785 in June to 796 in July, and now stands
at 10.5 per cent of the total number of member
banks.

SEPTEMBER 1,

289

FEDERAL RESERVE BULLETIN.

1915.

Commercial paper, exclusive of bank acceptances, rediscounted by each of the Federal reserve banks during the month of
July, 1915, distributed by sizes.
NUMBER OF PIECES AND AMOUNTS.
[In thousands of dollars.]
To $100.
Bank.

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

13.1
23.4
20.7
10.1
277.7
141.8
23.6
20.6
30.9
66.4
150.3
22.4

29.8
38.4
51.5
20.6
501.6
266.8
62.2
50.2
79.0
83.4
245.3
48.9

35.0
20.0
61.3
10.3
254.6
138.7

201.6
334.0
483.1
373.0
354.3
991.0
662.1
466.8
800.3
643.3
136.2
792.5

137
259
279
172
3,212
1,874
333
310
469
742

Total.... 923
PERCENTAGES OF AMOUNTS OF EACH CLASS TO TOTAL.

To $100.

Boston
New York
PhiJadel phia
Cleveland
Richmond
A tlanta
Chicago
St. Louis
Minneapolis
Kansas C itv
Dallas
San Francisco

.
....

. . .

Over
$100 to
$250.

Over
$250 to
$500.

Over
$500 to
$1,000.

Over
$1,000 to
$2,500.

Over
$2,500 to
$5,000.

Over
$5,000 to
$10,000.

Over
$10,000.

Total.

Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent.
44.5
14.8
23.0
9.9
6.5
100.0
0.3
1 0
.1
17.4
11.5
26.1
25.9
9.6
2.4
7.0
100.0
31.6
10.7
21.6
21.5
8.7
.5
4.3
100.0
1.1
.1
5.5
2.7
14.8
31.9
33.2
10.7
100.0
1.1
34.6
6.4
16.9
8.0
.6
11.5
19.5
100.0
2.5
13.4
22.2
33.3
14.7
4.7
.9
100.0
7.1
3.7
.1
,7
9.4
24.1
30.4
26.4
3.6
5.3
100.0
23.4
26.1
1.8
4.4
10.8
28.7
.5
4.3
100.0
7.6
9.9
3.9
21.1
35.2
21.2
100.0
1.1
20.5
14.5
24.3
22.0
1.6
.7
100.0
6.1
10.3
.6
4.3
7.0
11.5
22.9
25.9
15.9
11.9
100.0
6.2
15.9
28.0
28.7
17.5
100.0
.9
2.8

Total

.5

2.7

11.2

6.1

31.2

21.1

19.1

8.1

100.0

Commercial paper rediscounted during July by each of the Federal reserve banks, distributed by States and maturities as of
date of rediscount.
[In thousands of dollars.]

Districts and States.

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




Number
of member
banks.

74
70

170
56
18

Number
of banks
accommodated.

Paper
maturing
within 10
days.

Paper
maturing
after 10
davs b u t
within 30
days.

Paper
maturing
after 30
davs b u t
within 60
days.

Paper
maturing
after 60
davs b u t
within 90
days.

Paper
maturing
after 90
days.

Total
commercial
paper rediscounted.

3
2
2

2.0
22.0

1*6.8
35.0
4.0

JL9.7

4.8

10.0

43.3
67.0
8.5

4.5

82.8

48

5

2.5

23.2

49.0

8.1

436

12

12.5

47.2

104.8

32.3

4.8

201.6

131
481

4
16

23.1
2.0

13.2
30.4

5.8
151.8

39.7
66.6

1.4

81.8
252.2

612

20

25.1

43.6

157.6

106.3

1.4

334.0

290

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1915.

Commercial paper rediscounted during July by each of the Federal reserve banks, distributed by States and maturities as of
date of rediscount—Continued.

Districts and States.

District No. 3—Philadelphia:
Delaware
New Jersey
. .
Pennsylvania
Total

24
70
533
627

District No. 4—Cleveland:
Kentucky
Ohio
Pennsvl vania
West Virginia
Total

72
377
302
14
705

District No. 5—Richmond:
District of Columbia
Maryland
North Carolina
South Carolina
Virginia
West Virginia
Total.
District No. 6—Atlanta:
Alabama
. .
Florida
Georgia
Louisiana . . .
.
Mississippi
Tennessee. .
....
Total
District No. 7-Chicago:
Illinois

Indiana
Iowa
M ichigan
Wisconsin
Total
District No. 8—St. Louis:
Arkansas
Illinois
Indiana
Kentucky
Mississi ppi
Missouri

Number •
Paper
Number
of banks
maturing
of member accommowithin
10
banks.
dated.
days.

...

Tennessee
Total
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




13
100
80
71
136
103

Paper
maturing
after 10
days but
within 30
days.

Paper
Paper
maturing maturing
after 60
after 30
days but davs but
within 60. within 90
days.
days.

Paper
Total
maturing commercial
after 90
paper re- '
days.
discounted.

7
17

14.3
51.5

28.9
130.9

60.3
108.1

31.9
57.2

135.4
347.7

24

65.8

159.8

168.4

89.1

483.1

mm I

P5.7

12

13 9.1
147.2

61.3
25.2
16.9

13.3
22.4
28.3

12.6
1.0

110.3
69.3
103.4

24

192.0

103.4

64.0

13.6

373.0

13.7
337.7
98.5
115.7
14.7

34.8
418.1
727.4
523.0
59.0

17.9
677.9
480.7
466.6
150.8

.5
84.8
102.0
29.8
.7

66.9
1,518.5
1,408.6
1,135.1
225.2

580.3

1,762.3

1,793.9

217.8

4,354.3

254.5
193.9
233.6
10.0
38.1
179.9

40.8
5.2
86.3

o

*•* 0

$ 45

503

m 46
" 56
11
164

92
55
115
5
18
97

28
18
46
1
1
33

13.8
32.6
35.7
2.0
91.2

138.9
101.9
178.9
44.6
8.8
282.0

18.3

448.0
333.6
534.5
54.6
48.9
571.4

382

127

175.3

755.1

910.0

150.6

1,991.0

312
197
348
74
49

10
10
28
2

8.0
10.0
70.2
5.0

12.0
64.7
149.1
19.8

20.6
107.2
72.3

7.4
21.4
94.4

48.0
203.3
386.0
24.8

980

50

93.2

245.6

200.1

123.2

662.1

60
156
61
69
17
79
20

14
21
2
4
3
9
6

38.8
5.8

30.8
21.6
33.7
.8
21.6
11.8
85.1

39.2
22.2

1.5
18.3

61.9
7.1
6.0
.2
3.7
8.2
39.7

2.1
5.5
1.0

170.7
56.7
39.7
1.2
27.4
27.0
144.1

462

59

64.6

126.8

205.4

70.0

466.8

31
277
64
152
112
87

3
18
6
12
7
5

18.0
.1

28.9
187.3

1.5
9.9

28.8
10.1
32.5

7.1
20.9
11.9
82.1
26.0
49.7

88.3
26.0
138.5
24.4
8.3

54.0
296.6
37.9
250.9
60.5
100.4

723

51

29.5

287.6

197.7

285.5

800.3

121
216
52
211
9
309
33

5
19
3
12
1
32

5 2
61.3
1.5
5.2

2.9
88.7
5.8
20.0

1.9
69.7
.5
19.6

34.1

90.9

122.6

11.9
5.2
.5
16.6
1.6
77.6

21.9
224.9
8.3
61.4
1.6
325.2

951

72

107.3

208.3

214.3

113.4

643.3

.2

291

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1915.

Commercial paper rediscounted during July by each of the Federal reserve banks, distributed by States and maturities as of
date of rediscount—Continued.
Number
Number
of banks
of member accommobanks.
dated.

Districts and States.

District No. 11—Dallas:
Arizona
Louisiana
New Mexico
Oklahoma
Texas
Total
District No. 12—San Francisco:
Alaska
Arizona
California
Idaho
. .
. .
Nevada
Oregon
Utah
Washington

Paper
maturing
within 10
days.

Paper
maturing
after 10
davs but
within 30
days.

Paper
maturing
after 30
days but
within 60
days.

Paper
maturing
after 60
days but
within 90
days.

Paper
maturing
after 90
days.

Total
commercial
paper rediscounted.

6
25
28
42
537

6
12
109

1.4
13.4

106 5
6.0
15.5
230.9

181 2
13.9
80.2
838.1

164 2
22.4
21.3
441.2

451 9
42.3
118.4
1,523.6

638

136

14.8

358.9

1,113.4

649.1

2,136.2

37
8
7

65.9
11.8

114.7
13.4

251.1
35.0

55.2
13.4

486.9
73.6

66.1

36.5

11.9

114.5

5

27.0

39.7

45.3

5.5

117. 5

57

104.7

233.9

367.9

86.0

792.5

Paper
maturing
after 10
dnys but
within 30
days.

Paper
maturing
after 30
days but
within 60
days.

Paper
maturing
after 60"
davs but
within 90
days.

Paper
maturing
after 90
days.

n

1
265
57

. . . .

IQ

86
23
78

Total

527

RECAPITULATION.

Districts and cities.

Districts:
No 1—Boston
No. 2—New York
No. 3—Philadelphia
j^o 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
Percent




Number
Number
of banks
ol member accommobanks.
dated.

436
612
627
765
503
382
980
462
723
951
638
527
7,606

Paper
maturing
within 10
days.

12
20
24
24
164
127
50
59
51
72
136
57

12.5
25.1
65.8

47.2
43.6
159.8
192.0
5S0.3
175.3
93.2
64.6
29.5
107.3
14.8
104.7

104.8
157.6
168.4
103.4
1,762.3
755.1
245.6
128.8
287.6
208.3
358.9
233.9

32.3
106.3
89.1
64.0
1,793.9
910.0
200.1
205.4
197.7
214.3
1,113.4
367.9

796

103.4
__

1,612.3

4,512.7

12.2

34.1

10.5

Total
commercial Per eonV.
paper rediscounted.

13.6
217.8
150.6
123.2
70.0
285.5
113.4
649.1
86.0

201.6
334.0
483.1
373.0
4,354.3
1,991.0
662.1
466.8
800.3
643.3
2,136.2
792.5

1.5
2,5
3.7
2.8
32.9
15.0
5.0
3.5
6.1
4.9
16.1
6.0

5,294.4

1,715.4

13,238.2

100.0

40.0

12.9

100.0

4.8
1.4

292

FEDEEAL RESERVE BULLETIN.

Amounts

SEPTEMBER 1, 1915.

of commercial paper held by each of the Federal reserve banks on the last Friday of the month of July,
by maturities.

distributed

[In thousands of dollars.]
Paper
maturing

Federal reserve bank.

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

within
10 days.

Paper
maturing
after
90 days.

Total.

109.0
92. 3
724! 2
314.1

167.5
184.1
214.3
324.7
1,894.0
943.7
370.9
297.3
144.6
354.5
882.1
383.2

98.3
196.0
215.6
132.0
3,267.9
1,702. 8
484.3
341.9
484.0
365.2
1,637.2
532.7

36.2
97.7
35.1
79.6
1,625.1
1,161.0
219.4
207.9
397.5
236.2
2,267.2
358.7

457.9
346. 5
264.2
145.0
578.5
111.9
1,137.3
182.7

305.8
587.4
591.2
680.8
8,361.2
4,805.9
1,484.7
992.1
1,713.6
1,160.1
6,648.0
1,771.4

3,512.0
12.1

6,160.9
21.2

9,457. 9
32.5

6,721.6
23.1

3,249.8
11.1

29,102.2
100.0

107.0
126.2
125.1
1,116.3
651.9
145.9

...

Paper
Paper
Paper
maturing
maturing
maturing
after
e.fter
after
10 days b u t 30 days b u t 60 days b u t
within
within
within
90 days.
60 days.
30 days.

3. 8
2.6

i9-4

ACCEPTANCES.
Acceptances, by classes, held by the Federal reserve banks each week.
Nonmember banks.
Member
banks.

Date.

Trust
companies.

State
banks.

Private
banks.

Total.

1915.
July 26..
Aug. 2 . .
Aug. 9 . .
Aug. 16.
Aug. 23.

$5,165,000
5,350,000
5,499,000
5,713,000
5,868,000

$4,832,000
5,407,000
5,869,000
6,200,000
6,181,000

$20,000
20,000
20,000
20,000
20,000

$367,000 $10,384,000
352,000 11,129.000
417,000 11,805,000
461,000 12,394,000
457,000 12,526,000

Acceptances indorsed by member banks: Trust companies' acceptances, $176,000; private banks' acceptances, $8,000; total, $184,000.
Distribution

of acceptances held by Federal reserve banks according to schedules on hand Aug. 16, 1915, by classes of
acceptors and sizes.
To $5,000.

Over $5,000
to $10,000.

Over $10,000
to $25,000.

Over $25,000
to $50,000.

Over $50,000
to $100,000.

Over $100,000.

Total.
Per

Class of acceptors.

cent.

a
<

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

$232,624
247,554
20,000

Total..

500,178

Per cent. —

4T0




$758,869
461,399

74 $1,236,625
1,882,825
20,000
227,782

105

2775

47 $1
1,817,971
990,611
27
87,032
101,065
"3
1,307,300 181 3,347,232
2,909,647
77

23T5

13 $1..,078,785
1,222,047

$588,000 316 $5,712,874
6,200,041
1,415,605
20,000
435,879

46.2
50.2
.1
3.5

29 2,300,832

14 2,003,605 66012,368,794

100.0

1876

100.0

SEPTEMBER 1,

Amounts of accep

293

FEDEBAL EESEBVE BULLETIN.

1915.

ces held by the several Federal reserve banks at close of business on Fridays from
20, 1915.

to Aug.

July

[In thousands of dollars.]
Boston.
Acceptances maturing within 10
days:
July 30
Aug. 6
264
67
Aug. 13
121
Aug. 20
Acceptances maturing after 10 days
but within 30 days:
July 30
667
Aug. 6
267
Aug 13
385
307
Aug. 20 . .
Acceptances maturing after 30 days
but within 60 days:
520
July 30
505
Aug. 6
527
Aug. 13
Aug 20
989
Acceptances maturing alter 60 days
but within 90 days:
July 30
1,036
1,235
Aug. 6 . .
Aug. 13
U,217
941
Aug. 20
Total:
2,223
July 30.
2,271
Aug. 6
2,196
Aug. 13
2,358
Aug. 20
1

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

Atlanta.

Chicago.

MinneSt.
Louis. apolis.

Kansas
City.

13
9

28
174

24
100

Dallas.

San
Francisco.

Total.

18
42

29

6

17

36

551
827
279
1,084

37
106
86

18
42
51
45

47
65
80
75

15
17
58
43

162
31
59
42

125
134
139
191

1,839
2,145
3,202
3,024

721
998
993
598

69
94
193
163

89
90
198
246

46
71
126
163

35
69
90
152

15
45
93
156

232
123
184
150

4,181
4,162
4,123
4,583

2,105
2,047
2,113
1,744

505
272
234
217

245
220
102
165

426
485
450
412

269244
174
150

158
113
88
55

190
145
97
180

120
178
130
176

5,054
4,939
4,605
4,040

5,537
5,842
6,050
6,078

1,417
1,474
1,527
1,515

362
351
401
414

607
617
717
745

362
380
380
417

221
208
236
256

395
395
249
395

501
535
453
553

11,625
12,073
12,209
12,731

286
270
191
714

78
10
3
119

692
1,358
2,027
1,654

113
194
297
581

2,454
2,167
1,719
1,966

74

48

Includes $58,000 of acceptances maturing after 90 days but within 3 months.

Total amount of acceptances purchased by each of the Federal reserve banks from Feb. 19 (date of first purchase) to June 30,
1915, and for the month of July, distributed by maturities.
[In thousands of dollars.]
New
Phila- Cleve- RichBoston. York.
mond.
delphia. land.
Acceptances maturing within 30
days:
Feb. 19 to June 30 .
July
Total

Total
Acceptances maturing after 60 days
but within 3 months:
Feb 19 to June 30
July
Total
Grand total




Chicago.

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

San
Francisco.

Total.

539

109
43

64

141

67

10

41

61

1,032
43

539

152

64

141

67

10

41

61

1,075

235
17

1,543
276

368
237

598
33

310
71

226
24

119
13

61
4

633
23

4.093
698

252

1,819

605

631

381

250

132

65

656

4,791

2,899
1,046

8,145
1,977

1 876
521

732
265

1,524
426

162
276

397
178

634
190

1,112
120

17,481
4,999

3,945

10,122

2,397

997

1,950

438

575

824

1,232

22,480

12,480

3,154

1,692

2,472

755

717

930

1,949

28,346

.

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

Atlanta.

4,197

294

SEPTEMBER 1, 191fl.

FEDERAL RESERVE BULLETIN.

FEDERAL RESERVE BANK STATEMENTS.
Resources and liabilities of each of the Federal reserve banks and of the Federal reserve system at close of business on Fridays,
July SO to Aug. 20.
[In thousands of dollars.]
RESOURCES.

Boston.

Gold coin and certificates
in vault:
July 30
August 6
August 13
August 20
Gold settlement fund:
July 30
August 6
August 13
August 20
Gold redemption fund:
July 30
August 6
August 13
August 20
Legal tender notes, silver,
etc.:
July 30
August 6
August 13
August 20
Total reserve:
July 30
August 6
August 13
August 20
Commercial paper:
July 30
Aug. 6
|
Aug. 13
!
Aug. 20
Bank acceptances:
July 30
Aug. 6...
Aug. 13
Aug. 20
United States bonds:
July 30
Aug. 6
Aug. 13
Aug. 20
Municipal warrants:
July 30
Aug. 6
Aug. 13
Aug. 20
,
Federal reserve notes, net
assets:
July 30
Aug. 6
Aug. 13
Aug. 20
Due from other Federal
reserve banks, net:
July 30
Aug. 6
Aug. 13
Aug. 20
All other resources:
July 30
Aug. 6
Aug. 13
Aug. 20
,
Total resources:
July 30
Aug. G
Aug. 13
Aug. 20
1

New
York.

$8,885 $114,326
9,036 112,441
8,935
113,219
9,064 113,521
7,176
7,549
6,352
6,680

13,733
10,915
12,819
12,618
55
• 55
55
55

298
12,736
485
15,726
829 | 11,020
715
17,573

Cleveland.

Richmond.

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

$12,416 $13,470
11,6015 13,217
12,5S0 13,256
9,090 13,302

S3,832
3,879
3,8S3
4,109

S3,482
3,491
3,506
3,469

$24,838
23,006
23,450
24,316

3,719
3,348
3,216
4,298

1,425
1,376
1,418
1,358

9,904
12,323
11,875
12,895

305
325
325
345

225
225
225
225

Philadelphia.

1,492
1,461
1,213
i,2y7

4,127
4,283
4,295
4,196

37
37
37
37

$5,785
5,814
5,795
5,827

$6,405
6,206
5,896
5,397

$3,464
3,417
3,234
3,056

$8,434
8,020
8,293
7,150

$212,988
207,822
209,697
205,951

1,371
1,013
1,803 ' 1,389
1,365
2,042
1,402
1,730

3, 476
3,549
4,336
3,974

3,354
3,294
3,557
3,487

1,350
1,000
1,002
995

52,140
52,290
53,490
54,930

35
35
35
35

30
30
30
30

37
37
37
37

313
313
313
313

21
21
21
21

1,064
1,084
1,084
1,104

$7,651
7,689
7,650
7,650

3,291
2,934
3,110
3,324

1,033
1,053
1,050
1,076

110
109
141
120

405
458
449
502

2,407
2,403
2,685
2,365

752
723
601
423

3
5
4
4

488
477
477
460

556
538
572
549

13
5
5
6

22,092
24,916
20,949
27,117

16,365
17,076
16,122
16,465

140,850
139,137
137,113
143,767

17, 236
16,038
16,940
13,748

18,630
18,553
18,607
18,574

7,966
7,661
7,565
8,872

5,537
5,550
5,598
5,554

37,149
37,732
38,010
39,576

9,451
10,250
10,328
9,838

7,189
7,238
7,194
7,263

10,406
10,269
10,746
9,868

7,687
7,562
7,676
7,405

9,818
9,046
9,321
8,172

288,284
286,112
285,220
289,102

306
266
252
211

587
496
466
486

591
637
509
572

681
633
589

8,361
8,668
8,022
8,694

4,805
4,644
4,633
4,676

1,485
1,448
1,337
1,236

992
1,041
1,042
1,090

1,714
1,747
1,826
1,894

1,161
1,112
1,190
1,334

6,648
6,541
6,634
6,776

1,771
1,620
1,509
1,571

29,103
28,853
28,609
29,020

2,223
2,271
2,196
2,358

5,537
5,842
6,050
6,078

1,417
1,474
1,527
1,515

302
351
401
414

607
617
717
745

362
380
380
417

221
208
236
256

395
395
249
395

501
535
453
553

11,625
12,073
12,209
12,731

340
340
340
340

660
696
753

3,725
3,778
3,826
3,903

242
242
242
242

1,025
1,025
1,025
1,027

930
930
930
931

1,001
1,001
1,000
1,001

7,923
8,503
8,607
8,740

446
557
613
602

1,125
1,125
1,158
1,131

16,107
18,100
18,558
18,553

1,171
1,172
1,037
1,919

11,029
12,578
11,26ft
12,740

491
491 ,
491 |
2,494
2,367
2,457
2,647

5,688
7,161
7,211
7,056

1,843
1,909
1,972
1,981

1,512
1,767
1,803
1,782

1,873
2,043
2,123
2 107

638
622
652
696

488
549
569
551

419
357
448
430

6,263
7,6S9
6,537
7,191

90
115
104
387

72
331
267
183

2,370
2,384
2,405
2 418

110
106
115
75

534
424
353
137

1,195
1,517
1,098
4,367

609
357
759

651
679
1,290
240

230
245
193

5,543
2,741
3,784
2,800

421
648

491
848
116
394

254
340
317
120

856
1,681
1,753
2,027

17,078
15,987
M,028
16,805

1,311
352
941

1,347

177
108
138
156

905
873
957
931

327
322
349
363

396
572
664
671

468
297
386
227

178
228
146
127

149
106
111
131

185
156
134
165

2,653
2,099
2,178
1,550

58
61
60
61

452
394
480
358

54
73
74
124

79
82
84
69

5,904
5,263
5,623
4,777

24,023
24,053
23,864
23,533

159,252
160,647
157, 726
164,941

23,108
22,602
23,154
23,581

23,081
23,237
23,163
23,224

17,156
17,236
17,623
17,933

10,491
10,530
10,587
10,554

52,937
50,902
52,336
52,950

14,869
15.388
14,937
15,255

11,406
11,360
11,401
11,345

14,281
14,505
14,324
13,882

14,643
14,516
14,701
14,425

16,322
16,262
16,315
16,443

377,053
377,469
374,120
382,468

Items in transit, i. e., total amounts due from less total amounts due to other Federal reserve banks.




Total
for
system.

295

FEDERAL EESEEVE BULLETIN.

SEPTEMBER 1, 1915.

Resources and liabilities of each of the Federal reserve banks and of the Federal reserve system at close of business on
July SO to Aug.
20—Continued.

Fridays,

[In thousands of dollars.]
LIABILITIES.

Boston.

Capital paid in:
July 30
Aug. 6
Aug. 13
Aug.20
Reserve deposits, net:
July 30
Aug.6
Aug. 13
Aug. 20
Federal reservenotes.net
liability:
July 30
Aug.6
Aug. 13
Aug. 20
Due to other Federal reserve banks, net:
July 30
Aug. 6
Aug. 13
Aug. 20
AH other liabilities:
July 30
Aug.6
Aug. 13
Aug. 20
Total liabilities:
July30
Aug.6
Aug. 13
Aug.20

New
York.

Philadelphia.

Cleveland.

Richmond.

Atlanta.

Chicago.

San
Francisco.

Total
for
system.

$4,802
4,802
4,802
4,802

$10,824
10,982
10,982
10,982

$5,365
5,275
5,274
5,274

$5,951
5,943
5,944
5,944

$3,362
3,364
3,365
3,364

$2,416
2,417
2,418
2,418

$6,606
6,615
6,615
6,616

$2,795
2.7P5
2,796
2,796

$2,427
2.425
2,430
2,430

$2,952
3,011
3,017
3,017

$2,757
2,759
2,756
2,755

$3,924
3,924
3,932
3,931

$54,181
54.315
54,331
54,329

19,221
19,251
19,062
18,404

142,411
144,355
138,900
146,697

17,743
17,327
17,880
18,307

17,130
17,294
17,219
17,280

7,839
7,738
8,018
7,811

5,164
5,272
5,202
5,172

46.331
44,287
45,721
46,334

12,074
12,593
12,034
12,459

8,979
8,935
8,971
8,915

10,779
10,808
10,521
10,168

6,114
5,804
6,015
6,036

12,398
12,338
12,383
12,512

306,183
306,002
301,926
310,095

5,855
6,027
6,128
6,640

2,828
2,795
2,919
2,917

550
683
786
697

5,732
5,915
5,890
5,593

327

4,490
3,769
5,904
5,271

24,023
24,053
23,864
23,533

159,252
160,647
157,726
164,941

14,965
15,420
15,723
15,847

107

1,527
1,641
1,940
1,991

!

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

100
107
112
118
23,108
22,602
23,154
23,581

23,081
23,237
23,163
23,224

17,156
17,236
17,623
17,933

1,723
1,732
2,140
2,197
10,491
10,530
10,587
10,554

52,937 14,809
50,902 I 15,388
52,336 14,937
52,950 15,255

11,406
11,360
11,401
11,345

14,281
14,305
14,324
13,882

14,643
14,516
14,701
14,425

16,322
10,262
16,HI5
16,443

377,052
377,469
374,120
382,468

CIRCULATION OF FEDERAL RESERVE NOTES.
Federal reserve notes issued to the banks:
July 30
Aug.6
Aug. 13
Aug.20
Federal reserve notes in
the hands of the banks:
July30
Aug. 6
Aug.13
Aug. 20
Federal reserve notes i n
circulation:
July30
Aug.6
Aug. 13
Aug.20
Gold and lawful money
deposited with Federal
reserve agents:
July 30.
Aug.6
Aug. 13
Aug. 20
Carried to net liabilities:
July 30
Aug.6
Aug. 13
Aug.20
Carried to net assets:
July 30
Aug. 6
Aug. 13
Aug. 20




$5,500
5,500
5,500
5,600

$4,380
4,380
4,380
4,380

$626
626
626
626

$4,400
4,400
4,400
5,000

$4,100
4,400
4,700
5,400

$8,615
9,215
9,455
9,955

$2,040
2,040
2,040
3,040

$ 97,831
101,731
102,571
107,691

522
555
431
433

2,370
2,384
2,405
2,418

110
106
115
75

534
424
353
737

140
107
4
293

333
300
65
362

1.171
1,172
1,0)57
1,919

12,704
14,213
12,308
14,858

2,840
4,393
2,915
4,469
3,026 | 4,533
3,263 1 4,717

8,155 I 4,978
8,327 i 4,945
8,428 , 5,069
8,540 5,167

2,010
1,996
1,975
1,9(52

516
520
511
551

3,«66
3,960
3,976
4,293
4,047 i 4,696
4,263 ! 5,107

8,282
8,915
9,390
9,593

Sfi8
1,003
1,121

85,127
87,518
90,263
92,833

2,930
3,030
3,130
3,650

2,300
2,300
2,300
1,900

2,150
2,150
2,150
2,250

!
j
!
!

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

626
626
626

4,400
4,400
4,400
4,400

3,410
3,610
3,910
4,410

2,550
3,000
3,500
4,000

2,040
2,040
2,040
3,040

81,191
84,676
85,806
89,726

5,855
6,027
6,128
6,640

2,828
2,795
2,919
2,917

!
'
!
|

550
6S3
786
697

5,732
5,915
5,890
5,593

$4,420
4,420
4,620
4,620

$47,720
50,120
50,120
51,720

$2,930
3,0 30
3,130
3,650

$4,700
4,800
4,800
4,900

419
357
448
430

6,463
7,889
6,707
7,361

90
115
104
387

307
331
267
183

4,001
4,063
4,172
4,190

41,257
42,231
43,413
44,359

4,420
4,420
4,620
4,620

47,520
49,920
49,950
51,550

419
357
448
430

6,263
7,689
6,537
7,191

90
115
104
387

4,700
4,800
4,800
4,900

72
331
267
183

$8,400
8,800
8,800

245
473
372
260 !

2,370 I
2,384
2,405 I
2,418 !

110
106
115
75

534
424
353
137

14,965
15,420
15, 723
15,847
1,171
1,172
1,037
1,919

11,029
12,578
11,266
12,740

296

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1915.

Statement of Federal reserve agents1 accounts at close of business on Fridays, July 30 to Aug. 20.
[In thousands of dollars.]
Boston.

Federal reserve notes received from the Comptroller:
July 30
Aug.6
Aug. 13
Aug. 20
Federal reserve notes returned to the Comptroller:
July 30
Aug.6
Aug. 13
Aug. 20
Amount of Federal reserve notes chargeable
to Federal reserve agent:
July 30
Aug.6
Aug.13
Aug. 20
Federal reserve notes in
the hands of the agent
at close of business Friday:
July 30
Aug.6
Aug. 13
Aug. 20
Federal-reserve notes issued to the Federal reserve bank, less notes
returned to the agent
for redemption and
cancellation:
July 30
Aug.6
Aug. 13
Aug. 20
Held by the Federal reserve agent:
In reduction of liability on outstanding
notesGold coin and
certificates—
July 30
Aug.6
Aug. 13
Aug. 20
Lawful moneyJuly 30
Aug.6
Aug. 13
Aug. 20
As security for outstanding notes—
Commercial
paper *—
July 30
Aug.6
Aug. 13
Aug. 20
Held by the Treasurer of
the United States:
Gold
redemption
fundJuly 30
Aug.6
Aug. 13
Aug. 20
Total:
July 30..
Aug.6..
Aug. 13.
Aug. 20.
i Amount of commercial
paper turned over to
the Federal reserve
agent:
July 30
Aug.6
Aug. 13
Aug. 20




$11,800
11,800
11,800
11,800

New
York.

$49,840
51,840
54,800
54,800

Philadelphia.

Cleveland.

Richmond.

Atlanta.

$5,340 $6,400
5,480 6,400
5,480 6,400
6,400

$9,160
9,160
9,800
10,000

$8,500
8,500
8,500
8,500

30
170
170
170

100
100
100
100

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

$9,380
9,380
9,380
9,380

$3,400
3,400
3,400
3,400

$5,000 $6,000 $11,895 $10,000
5,000 6,000 11,900 10,000
5,000 6,800 11,900 10,000
5,000 6,800 13,900 10,000

120
120
120
120

Total.

$136,715
138,860
143,260
148,460

250
395
395
395

11,700
11,700
11,700
11,700

49,840
51, 840
54,800
54;800

5,310
5,310
5,310
8,310

6,400
6,400
6,400
6,400

9,160
9,160
9,800
10,000

8,500
8,500
8,500
8,500

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

3,400
3,400
3,400
3,400

5,000
5,000
5,000
5,000

6,000
6,000
6,800
6,800

11,895
11,895
11,895
13,895

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

136,465
138,465
142,865
148,065

7,280
7,280
7,080
7,080

2,120
1,720
4,680
3,080

2,380
2,280
2,180
4,660

1,700
1,600
1,600
1,500

760
360
1,000
1,200

3,000
3,000
3,000
2,900

4,880
4,880
4,880
4,880

2,774
2 774
2,774
2,774

600
600
600

1,900
1,600
2,100
1,400

3,280
2,680
2,440*
3,940

7,960
7,960
7,960
6,960

38,634
36,734
40,294
40,374

4,420
4,420
4,620
4,620

47,720
50,120
50,120
51,720

2,930
3,030
3,130
3,650

4,700
4,800
4,800
4,900

8,400
8,800
8,800
8,800

5,500
5,500
5,500
5,600

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

626
626
626
626

4,400
4,400
4,400
5,000

4,100
4,400
4,700
5,400

8,615
9,215
9,455
9,955

2,040
2,040
2,040
3,040

97,831
101,731
102,571
107,691

4,420
4,420
4,620
4,620

47,520
49,920
49,950
51,550

2,930
3,030
3,130
3,650

4,465
4,560
4,560
4,655

2,300
2,300
2,300
1,900

2,150
2,150
2,150
2,250

4,260
4,260
4,260
4,260

626

4,400
4,400
4,400
4,400

3,410
3,610
3!, 910
4; 410

2,550
3,000
3,500
4,000

2,040
2,040
2,040
3,040

81,071
84,316
85,448
89,361

6,100
6,500
6,500
6,900

3,350
3,350
3,350
3,350

600

690
790
790
990

5,752
5,902
5,955
5,955

16,092
16,742
16,765
17,965

313
313

668
673
360
365

200
200
170
170

235
240
240
245
4,420
4,420
4,620
4,620

47,720
50,120
50,120
51,720

200
200
170
170

2,930
3,030
3,130
3,650

4,700
4,800
4,800
4,900

120
120
120
120
8,400
8,800
8,800
8,800

5,500
5,500
5,550
5,600

6,739
7,101
7,272
7,561

3,351
3,350
3,357
3,352

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

626
626
626

4,400
4,400
4,400
5,000

4,100
4,400
4,700
5,400

8,615
9,215
9,455
9,955

602

691
790
791
990

5,836
5,990
6,012
6,177

2,040
2,040
2,040
3,040

97,831
101,731
102,571
107,691

16,817
17,431
17,602
18,852

INDEX.
Page.

Page.

Acceptances
292, 293
Address by Hon. W. P. G. Harding
252-257
Business conditions, general
278-285
Cotton crop, funds for
260
Discount rates
266
Federal reserve bank statements
294-296
Gold imports and exports
286,287
Gold settlement fund
264-266
Informal rulings of the Federal Reserve Board.. 267-269
Stock subscription of insolvent bank
267
Dividends to insolvent banks
267
Purchase of municipal bonds
268
State bank branches
268
When applicant bank is member
268
Cross-tie and lumber exports
268
Notes used for purchase of merchandise
268
Purchase of Government bonds in open market. 268
No authority granted to act as guardian
269
Agreements for acceptance credits
269
Intradistrict clearance system
270,271

Law department
273-277
Liability of stockholders of State banks which
have become member banks
273
Deposits of gold or lawful money with the Federal Reserve Board
273
Government depositories
274
Transactions involving the importation or exportation of goods
276
Deposits of Federal reserve notes for credit or
redemption
276
Waiver of demand, notice, and protest
277
Movement of crops
258
New Orleans branch bank, date for opening
251
Rediscounts, distribution of
288-292
State banks and trust companies admitted
251
State banks, conditions relating to
262
State bank membership, laws regarding
263
Trustee powers granted
272
Warehouse laws, digest of
260,262
Work of the Board
251