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FEDERAL RESERVE
BULLETIN




ISSUED BY THE

FEDERAL RESERVE BOARD
AT WASHINGTON

SEPTEMBER, 1916

WASHINGTON
GOVERNMENT PRINTING OFFICE
1916

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




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




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

In sending the Bulletin to others the

Board feels that a subscription should be required.

It has

accordingly fixed a subscription price of $2 per annum.

Single

copies will be sold at 20 cents.

Foreign postage should be added

when it will be required.

Remittances should be made to the

Federal Reserve Board.

Member banks desiring to have the

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

in

TABLE OF CONTENTS.
Page.

Work of the Board...
-----....... ,r..........
Hearing of Wisconsin and Michigan banks
Banks granted full acceptance powers
Meeting of Advisory Council
...1..
Amendments to Federal Reserve Act passed by Congress
The Federal Reserve Act and the farmer
Operation of the clearing plan.
... Applications under the Clayton Act
Commercial failures during month of July •......
.
Fiduciary powers granted
Reassignments to Board's committees
New national bank charters . . . . . . . . . .
•
Warehouse and storage conditions
Commercial paper market
:.......
Gold settlement fund
Informal rulings of the Board
Law department
..
Summary of business conditions
Business conditions throughout the 12 Federal Reserve districts
Distribution of discounted paper
:
Acceptances
Federal Reserve Bank statements
Gold imports and exports.
.:
Earnings on investments of Federal Reserve B a n k s . . ^ : ^ . . . . . ^ . . . . . . . . . . . . . . . . . . . . . . . . . . . . : . . . . ; . . . .
Discount rates in effects
,
Individual deposits, loans, and discounts
IV




437
438
438
438
439
442
444
446
447
447
448
448
448
449
453
456
459
465
466
491
496
499
503
505
505
506

FEDERAL RESERVE BULLETIN
VOL.

2

SEPTEMBER 1, 1916
WORK OF THE BOARD.

Hon. W. P. G. Harding was on August 10
designated by the President of the United
States as governor and Hon. Paul M. Warburg as vice governor of the Federal Reserve
Board.
On July 25 the President sent to the Senate
the nomination of Hon. Charles S. Hamlin to
succeed himself as a member of the Federal
Reserve Board, the appointment being for a
term of 10 years. This nomination was confirmed on August 3. Mr. Hamlin's term under
his earlier appointment expired on Wednesday,
August 9. He qualified by taking the oath on
August 10.
The average net earnings on paid-in capital
for the 12 Federal Reserve Banks during the
month of July v/ere at the rate of 5.9 per cent.
One bank earned 9.5 per cent net and two banks
earned 7.1 per cent net. Five of the 12 banks
earned above 6 per cent net and all but three
of the banks earned more than 5 per cent net.
The excess of earnings of the system over current expenses from January 1 to July 31 was
$1,074,467. The total earnings of all Federal
Reserve Banks for July were $445,980 and
current expenses $176,023, making the net
earnings $269,957.
Governors of the Federal Reserve Banks,
with other officers directly interested in the
questions to be discussed, held a conference
in Boston opening on August 22 and continuing throughout the week. ' This conference
was attended for a part of the time by Hon.
W. P. G. Harding, governor of the Federal
Reserve Board, and by Hon. Frederic A.
Delano. Questions which have arisen in connection with the clearing and collection plan,




No. 9

with other matters affecting the routine work
of Federal Reserve Banks, were discussed.
Consideration of the amendments to the
Federal Reserve Act, which have been pending
in the Senate, has been completed, the amendments agreed to in conference and adopted
by Congress. Members of the Board have held
several conferences with those in charge of the
amendments in the Senate and House and have
contributed such assistance as they were able
to their consideration.
Work upon the applications made to the
Board under the Kern amendment to the Clayton Act has been actively under way. As received from the Federal Reserve Agents with
their recommendations, the applications have
been taken up and examined by a committee
appointed by the Board. Those which have
been promptly received are now practically
ready for final consideration of the Board and
will be taken up at an early date. This law
becomes effective on October 15, 1916.
Several banks, whose names are listed elsewhere in the Bulletin, have been authorized by
the Board to accept drafts or bills of exchange
based on the importation or exportation of
goods to 100 per cent of their capital and
surplus, subject to the provisions of the Act
and the regulations of the Board. One of the
features of these applications was the fact that
a larger proportion of them came from banks
in the South contemplating the acceptance of
cotton drafts.
There have been very few changes in discount rates at Federal Reserve Banks during
August. The Federal Reserve Bank of Richmond early in the month decreased its rate for
six months7 agricultural and cattle paper from
437

438

FEDEBAL RESEEVE BULLETIN.

5 to 4 | per cent. The rate on commodity paper
in the Atlantic district was reduced from 3J
per cent to 3 per cent on August 17.
The appointment of Mr. George W. Norris as
a member of the Federal Farm Loan Board
made it necessary for him to resign as a Class C
director of the Federal Reserve Bank of Philadelphia. The resignation of Mr. Norris, who
was later named as Farm Loan Commissioner,
was accepted by the Board as of Saturday,
August 5, 1916.
Mr. H. B. Lightcap, of Jackson, Miss., was
on August 10 elected a Class B director for the
New Orleans branch of the Federal Reserve
Bank of Atlanta, to fill the unexpired term of
Mr. W. J. Davis, deceased.
On August 26 Hon. A. C. Miller visited the
Federal Reserve Bank of Minneapolis and conferred with its officers and directors as to the
operations of the bank.
Hearing of Wisconsin and Michigan Banks.
After having carefully considered the desire
of certain banks in Wisconsin and the upper
peninsula of Michigan to be transferred from
the Federal Reserve district of Minneapolis to
the Federal Reserve district of Chicago, the
Federal Reserve Board on July 26 voted to
reopenljthe petition filed by the Wisconsin
banks,Jwhich had previously been dismissed
without prejudice, and to hold an informal
hearing of oral arguments on August 8 at 3
p. m. In sending out notice to the banks and
the others interested in the matter, the Board
stated that no briefs were necessary, but that
they could be filed if any bank desired. In
this connection the banks in the northern
peninsula of Michigan having a direct interest
in the matter, which had indicated this interest
to the Board, were advised that they would
be allowed to intervene.
This hearing was held in the Board room on
the afternoon of August 8, and it becoming
apparent after 6 p. m. that not all of those
who desired to present their interests could
be heard on that day, an adjournment was
taken until 10 o'clock on August 9.




SEPTEMBER 1,1916.

There were present at the opening of the
hearing the Secretary of the Treasury, Mr.
McAdoo, Gov. Hamlin, Mr. Harding, and the
Comptroller of the Currency, Mr. Williams.
Gov. Wold and Counsel A. Ueland represented
the Federal Reserve Bank of Minneapolis.
Senators La Follette and Husting of Wisconsin were present, but were called from the
Board room before the hearing began, and
appeared at the later session. Representatives
Browne, Reilly, Stafford, and Konop, of Wisconsin, were present and gave their views to
the Board. Their arguments related chiefly
to the general trend of business and the convenience of the public. Fourteen bankers
attended the hearing, and most of these gentlemen gave their personal views in connection
with the matter under discussion after formal
statements had been made.
At the conclusion of the hearing at 11 a. m.
on August 9, the matter was taken under advisement by the Board, and it was agreed that
briefs might be filed at any time prior to
September 1.
Acceptances to 100 Per Cent.

Since the last list of banks authorized to
accept drafts or bills of exchange up to 100 per
cent of their capital and surplus under the
Federal Reserve Act and the regulations of the
Federal Reserve Board was printed, the following banks have been granted this privilege:
Corn Exchange Bank, New York City; Peoples
National Bank, Charleston, S. C ; South Texas
Commercial National Bank, Houston, Tex.;
American National Bank, Fort Worth, Tex.
All member banks may, without special
permission, accept to 50 per cent of their
capital and surplus.
Meeting of Advisory Council.
A quarterly meeting of the Federal Advisory
Council has been called by Mr. James B.
Forgan, its president, to be held in Washington
on Monday and Tuesday, September 18 and
19, 1916. The meeting will, as usual, be held
in the Federal Reserve Board room.

SEPTEMBER 1, 1916.

FEDERAL BESEKVE BULLETIN.

Amendments to the Act.

439

' 'Any Federal Reserve Bank may receive from any of its
member banks, and from the United States, deposits of
current funds in lawful money, national-bank notes, Federal Reserve notes, or checks, and drafts
payable upon presentation, and also, for
collection, maturing bills; or solely for purposes of exchange or of collection p^spoeeBj may receive from other
Federal Reserve Banks deposits of current funds in lawful
money, national-bank notes, or checks aa^-etaffes upon
selwBtfc-B&eB&keF-ef other Federal Reserve Banks, and
checks and drafts, payable upon presentation within its district, and maturing bills payable within its district.
"Upon the indorsement of any of its member banks?
which shall be deemed w&h a waiver of demand, notice, and
protest by such bank as to its own indorsement exclusively,
any Federal Reserve Bank may discount notes, drafts, and
bills of exchange arising out of actual commercial transactions; that is, notes, drafts, and bills of exchange issued
or drawn for agricultural, industrial, or commercial purposes, or the proceeds of which have been used, or are to
be used, for such purposes, the Federal Reserve Board to
have the right to determine or define the character of the
paper thus eligible for discount, within the meaning of this
act. Nothing in this act contained shall be construed to
prohibit such notes, drafts, and bills of exchange, secured
by staple agricultural products, or other goods, wares, or
merchandise from being eligible for such discount; but
such definition shall not include notes, drafts, or bills
covering merely investments or issued or drawn for the
purpose of carrying or trading in stocks, bonds, or other
investment securities, except bonds and notes of the
Government of the United States. Notes, drafts, and bills
admitted to discount under the terms of this paragraph
must have a maturity at the time of discount of not more

Amendments to the Federal Reserve Act,
which have been in conference between the
two Houses of Congress, were adopted by the
Senate on August 26 and by the House on
August 29. They now go to the President for
approval.
In presenting the report of the conference
the managers on the part of the Senate made
the following explanation of the amendments:
The amendments of the Senate to the bill
have been accepted by the House conferees
with some slight verbal modifications, except
that the House declined to agree to. and the
Senate receded from, its amendment of section
16 of the Federal Reserve Act which would
have explicitly authorized and encouraged
Federal Reserve Banks to issue Federal Reserve notes based upon gold or gold certificates.
The House conferees declined to agree to the
Senate amendment proposing to permit national
banks in cities of more than 100,000 inhabitants and possessing a capital and surplus of
$1,000,000 or more to establish branches, and
the Senate conferees have agreed to recommend
that the Senate recede from this amendment.
The House conferees insisted upon an amendment to section 11, which was accepted by the
Senate conferees, permitting the Federal Reserve Board, upon an affirmative vote of not
less than five, to permit member banks to carry than ninety days-r, exclusive of days of grace.
in the Federal Reserve Banks any portion of
"Provided, That notes, drafts, and bills drawn or issued
their reserves now required to be held in their for agricultural purposes or based on live stock and having
own vaults.
a maturity not exceeding six months, exclusive of days of
AN ACT TO AMEND CERTAIN SECTIONS OF THE ACT ENTITLED "FEDERAL RESERVE ACT," APPROVED DECEMBER
23, 1913.

[Italics indicate new natter; lined typa indicates matter stricken out.]
Be it enacted by the Senate and Souse of Representatives
of the United States of America in Congress assembled,

grace, may be discounted in an amount to be limited to a
percentage of the eapital assets of the Federal Reserve
Bank, to be ascertained and fixed by the Federal Reserve
Board.
ol

That the act entitled "Federal Reserve Act," approved
December twenty-third, nineteen hundred and thirteen,
be, and is hereby, amended as follows:
At the end of section eleven insert a new clause as follows:
(m) Upon the affirmative vote of not less than five of its
members the Federal Reserve Board shall have power, from
time to time, by general ruling, covering all districts alike, to
permit member banks to carry in the Federal Reserve Banks
"The aggregate of such notes, drafts, and bills bearing
of their respective districts any portion of their reserves now the signature or indorsement of any one borrower, whether
required by section nineteen of this Act to be held in their own a person, company, firm, or corporation rediscounted for
vaults.
any one bank shall at no time exceed ten per centum of

That section thirteen be, and is hereby, amended to the unimpaired capital and surplus of said bank; but this
read as follows:
restriction shall not apply to the discount of bills of ex-




440

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

change drawn in good faith against actually existing
"Fourth. Liabilities to the stockholders of the associavalues.
tion for dividends and reserve profits.
"Any Federal Reserve Bank may discount acceptances of the
"Fifth. Liabilities incurred under the provisions of the
kinds hereinafter described, which have a maturity at the time Federal Reserve Act.
" T h e discount and rediscount and the purchase and sale
of discount of not more than three months' sight, exclusive of
days of grace, and which are indorsed by at least one member by any Federal Reserve Bank of any bills receivable and
of domestic and foreign bills of exchange, and of acceptbank.
"Any member bank may accept drafts or bills of ex- ances authorized by this Act, shall be subject to such
change drawn upon it ae4-gf ewrag-ettt-ef^fa^gaefeno in- restrictions, limitations, and regulations as may be imcxpeA&feien of geede having posed by the Federal Reserve Board.
not more than six. months' sight to run, exclusive of days of " That in addition to the powers now vested by law in nagrace, which grow out of transactions involving the importa- tional banking associations organized under the laws of the
tion or exportation of goods; or which grow out of transac- United States any such association located and doing business
tions involving the domestic shipment of goods, provided in any place the population of which does not exceed five thoushipping documents conveying or securing title are attached at sand inhabitants, as shovra by the last preceding decennial
the time of acceptance; or 'which are secured at the time- of census, may, under such rules and regulations as may be preacceptance by a warehouse receipt or other such document scribed by the Comptroller of the Currency, act as the agent for
conveying or securing title covering readily marketable staples. any fire, life, or other insurance company authorized by the
No member bank shall accept, whether in a foreign or domestic authorities of the State in which said bank is located to do busitransaction, for any one person, company, firm, or corpora- ness in said State by soliciting and selling insurance and coltion to an amount equal at any time in the aggregate to more lecting premiums on policies issued by such company; and
than ten per centum of its paid-up and unimpaired capital may receive for services so rendered such fees or commissions as
stock and surplus unless the bank is secured either by attached may be agreed upon between the said association and the insurdocuments or by some other actual security growing out of the ance company for which it may act as agent; and may also act
same transaction as the acceptance and tat no bank shall as the broker or agent for others in making or procuring loans
accept such bills to an amount equal at any time in the on real estate located within one hundred miles of the place in
aggregate to more than one-half of its paid-up and unim- yjhich said bank may be located, receiving for such services a
paired capital stock and surplus, except by authority of the reasonable fee or commission: Provided, however, Thai no
Federal Reserve Board, under such general regulations as such bank shall in any case guarantee either the principal or
said board may prescribe, but not to exceed the capital interest of any such loans or assume or guarantee the payment
stock and surplus of such bank, and such regulations shall of any premium on insurance policies issued through its
apply to all banks alike, regardless of the amount of capital agency by its principal: And provided further, That the bank
stock and surplus.
shall not guarantee the truth of any statement made by an as" Any Federal Reserve Bank may make advances to its mem- sured in filing his application for insurance.
ber banks on their promissory notes for a period not exceeding
"Any member bank may accept drafts or bills of exchange
fifteen days at rates to be established by such Federal Reserve
drawn upon it having not more than three months' sight to
Banks, subject to the revieiv and determination of the Federal
run, exclusive of days of grace, drawn under regulations to be
Reserve Board, provided such promissory notes are secured by
1
such notes, drafts, bills of exchange, or bankers' acceptances as prescribed by the Federal Reserve Board by banks or bankers
are eligible for rediscount or for purchase by Federal Reserve in foreign countries or dependencies or insular possessions of
Banks under the provisions of this Act, or by the deposit or the United States for the purpose of furnishing dollar exchange
as required by the usages of trade in the respective countries,
pledge of bonds or notes of the United States.
" Section fifty-two hundred and two of the Revised dependencies, or insular possessions. Such drafts or bills
Statutes of the United States is hereby amended so as to may be acquired by Federal Reserve Banks in such amounts
read as follows: No national banking association shall at and subject to such regulations, restrictions, and limitations
any time be indebted, or in any way liable, to an amount as may be prescribed by the Federal Reserve Board: Proexceeding the amount of its capital stock at such time vided, however, That no member bank shall accept such drafts
actually paid in and remaining undiminished by losses or bills of exchange referred to in this paragraph for any one
or otherwise, except on account of demands of the nature bank to an amount exceeding in the aggregate ten per centum
of the paid-up and unimpaired capital and surplus of the
following:
accepting bank unless the draft or bill of exchange is accom"First. Notes of circulation.
"Second. Moneys deposited with or collected by the panied by documents conveying or securing title or by some
other adequate security: Provided further, That no member
association.
"Third. Bills of exchange or drafts drawn against money bank shall accept such drafts or bills in an amount exceeding
actually on deposit to the credit of the association, or due at any time the aggregate of one-half of its paid-up and
unimpaired capital and surplus."
thereto.




441

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1916.

That subsection (e) of section fourteen be, and is hereby, erty offered as security. Any such bank may make such
loans, whether secured by such farm land or such real estate,
amended to read as-follows:
" (e) To establish accounts with other Federal Reserve in an aggregate sum equal to twenty-five per centum of its
Banks for exchange purposes and, with the consent of the capital and surplus or to one-third of its time deposits, and
Federal Reserve Board, to open and maintain ta&kisg such banks may continue hereafter as heretofore to receive
accounts in foreign countries, appoint correspondents, and time deposits and to pay interest on the same.
"The Federal Reserve Board shall have power from
establish agencies in such countries wheresoever it may
deem best for the purpose of purchasing, selling, and col- time to time to add to the list of cities in which national
lecting bills of exchange, and to buy and sell, with or banks shall not be permitted to make loans secured upon
without its indorsement, through such correspondents or real estate in the manner described in this section."
That section twenty-five be, and is hereby, amended
agencies, bills of exchange arising out of actual commercial
transactions which have not more than ninety days to run, to read as follows:
exclusive of days of grace, and which bear the signature of SEC. 25. Aftytwo or more responsible parties, and with the cconsent of eapital aa4-stt¥^fes-of-$l7OQ0700Q-e¥-^ee¥e may
the Federal Reserve Board to open and maintain
banking
accounts for such foreign correspondents or agencies."

That the second paragraph of section sixteen be, and is
hereby, amended to read as follows:
"Any Federal Reserve Bank may make application to
the local Federal Reserve Agent for such amount of the
Federal Reserve notes hereinbefore provided for as it may
require. Such application shall be accompanied with a
tender to the local Federal Reserve Agent of collateral in
amount equal to the sum of the Federal Reserve notes thus
applied for and issued pursuant to such application. The
collateral security thus offered shall be notes, a»4 drafts,
bills of exchange, or acceptances
discounted under the provisions of section thirteen of this
Act, or bills of exchange indorsed by a member bank of any
Federal Reserve district and purchased under the provisions of
section fourteen of this Act, or bankers' acceptances purchased
under the provisions of said section fourteen, a » 4 The Federal

Reserve Agent shall each day notify the Federal Reserve
Board of all issues and withdrawals of Federal Reserve
notes to and by the Federal Reserve Bank to which he is
accredited. The said Federal Reserve Board may at any
time call upon a Federal Reserve Bank for additional security to protect the Federal Reserve notes issued to it."
That section twenty-four be, and is hereby, amended
to read as follows:
'"SEC. 24. Any national banking association not situated
in a central reserve city may make loans secured by improved and unencumbered farm land situated within its

%ho United States fer-£hc furtherance of-#*e-lereigR-eeaaee of •the •Unitc4-Sta:fees7-aad:4e-act; if
ao fiocal agents
to-tfee-Baino and capital of the
banking
or
carried on, and the

of its forces
Tho F o t o a l - R e s e y y e
or4e rcjcct-ffaek-application

if-,

the amouat-ef-capital-propo3cd to be act aside for the C6aduot el-jorcign business io-inadc^ttate^
the granting of ouch application is deemed inexpedient
Every national bankiag association which shail-reeei¥e
rity to establish foreign bra&efees-efea&-fee- required
furnish: inf or
of suehrpranchos-te-tho Comptroller of the C
Federal Reserve Board-may ordcr-epeeial
examinations of the
at
deera-bes^
%aa3aag
feimos as-frfe
asseeialieR
-#te-aeeettnts of cach-4ereiga

branch independently of thc-aceduste-of other forciga
establishod by it aad of -its J
frho profit or leee-aeeramg at

Any national banking association possessing a capital
and surplus of $1,000,000 or more may file application
with the Federal Reserve Board for permission to exercise,
upon such conditions and under such regulations as may be
prescribed by the said Board, either or both of the following
powers:
u
First. To establish branches in foreign countries or deland shall be made for a longer time than five years, and pendencies or insular possessions of the United States for the
no loan made upon the security of such real estate as dis- furtherance of the foreign commerce of the United States, and
tinguished from farm land shall be made for a longer time than to act if required to do so as fiscal agents of the United States.
one year nor fe3?-aft shall the amount of any such loan,
"Second. To invest an amount not exceeding in the aggrewhether'upon such farm land or upon such real estate, e-seeed- gate ten per centum of its paid-in capital stock and surplus
mg exceed fifty per centum of the actual value of the prop- in the stock of one or more banks or corporations chartered or
Federal reserve district or within a radius of one hundred miles
of the place in which such bank is located, irrespective of district
lines; and may also make loans secured by improved and unencumbered real estate located within one hundred miles of the
place in which such bank is located, irrespective of district
lines; b u t no sack loan made upon the security of such farm




57469—16

2

442

FEDERAL RESERVE BULLETIN.

incorporated under the laws of the United States or of any
State thereof and principally engaged in international or
foreign banking, or banking in a dependency or insular possession of the United States either directly or through the
agency, ownership, or control of local institutions in foreign
countries, or in such dependencies or insular possessions.
1
'Such application shall specify the name and capital of the
banking association filing it, the powers applied for, and the
place or places where the banking operations proposed are to
be carried on. The Federal Reserve Board shall have power to
approve or to reject such application in whole or in part if for
any reason the granting of such application is deemed inexpedient, and shall also have power from time to time to increase
or decrease the number of places where such banking operations
may be carried on.
"Every national banking association operating foreign
branches shall be required to furnish information concerning
the condition of such branches to the Comptroller of the Currency upon demand, and every member bank investing in the
capital stock of banks or corporations described under subparagraph two &f the first paragraph of this section shall be
required to furnish information concerning the condition of
such banks or corporations to the Federal Reserve Board
upon demand, and the Federal Reserve Board may order
special examinations of the said branches, banks, or corporations at such time or times as it may deem best.
''Before any national bank shall be permitted to purchase
stock in any such corporation the said corporation shall enter
into an agreement or undertaking with the Federal Reserve
Board to restrict its operations or conduct its business in
such manner or under such limitations and restrictions as
the said board may prescribe for the place or places wherein
such business is to be conducted. If at any time the Federal
Reserve Board shall ascertain that the regulations prescribed
by it are not being complied with, said board is hereby authorized and empowered to institute an investigation of the matter
and to send for persons and papers, subpoena witnesses, and
administer oaths in order to satisfy itself as to the actual
nature of the transactions referred to. Should such invest
tigation result in establishing the failure of the corporation
in question, or of the national bank or banks which may
be stockholders therein, to comply with the regulations laid
down by the said Federal Reserve Board, such national banks
may be required to dispose of stock holdings in the said corporation upon reasonable notice.
"Every such national banking association shall conduct the
accounts of each foreign branch independently of the accounts
of other foreign branches established by it and of its home
office, and shall at the end of each fiscal period transfer to its
general ledger the profit or loss accrued at each branch as a
separate item.
"Any director or other officer, agent, or employee of any
member bank may, with the approval of the Federal Reserve
Board, be a director or other officer, agent, or employee of any
such bank or corporation above mentioned in the capital stock




SEPTEMBER 1,1916.

of which such member bank shall have invested as hereinbefore provided, without being subject to the provisions of
section eight of the Act approved October fifteenth, nineteen
hundred and fourteen, entitled, " An Act to supplement existing laws against unlawful restraints and monopolies, and
for other purposes."

Federal Reserve Act and the Farmer.

In replying to an inquiry as to what the
Federal Reserve Act had done for the farmer,
the following letter was recently sent out by
an officer of the Board. It is here reprinted
for the information of readers of the BULLETIN.
One of the prime objects of the Federal
Reserve Act was to standardize and stabilize
interest and discount rates. Under our old
system certain classes of borrowers, with more
readily available collateral received the benefit
of more ample credit facilities than did others,
besides being favored at all times with preferential rates. Furthermore, discount rates in
this country were subject to greater fluctuations than was the case in other countries of
equal commercial importance.
The needs of the farmer for financial accommodation may be classified under three heads:
1. He requires long-time loans when he
wishes to acquire additional lands or when he
desires to make permanent improvements on
land that he already owns.
2. He requires credit, extending over a period
of several months, at those seasons of the year
when his crops are being planted. The ordinary commercial credit running from 30 to 90
days is not sufficient, for he can not ordinarily
repay his loans until his crops are marketed;
therefore he needs credit extending over a
period of six months. Under the operation of
our old system, he found himself unable to
obtain an adequate credit for this length of
time, or else he was obliged to pay a nigher
rate of interest than that current for loans
maturing within 90 days.
3. As the great staple crops of this country
(such as cotton, corn, wheat, and tobacco)
reach their maturity and are ready for market
within a period of a few weeks of each other,
there always resulted a very large seasonal
demand for money during crop-moving periods,
with a corresponding scarcity of funds, high
interest rates, and a natural depression of
prices, owing to heavy selling pressure on the

1,1916.

FEDERAL RESERVE BULLETIN*

market. Comparatively few farmers have been
sufficiently independent financially to enable
them to exercise any judgment as to when
they should sell their pro ducts, and they have
been obliged to dump their holdings upon an
overburdened market, thus giving the purchaser (in most cases the middleman) all the
advantage. The rule has been that as soon
as the pressure is relieved, prices advanced
so that the ultimate consumer received no
benefit, while the profits went to the middlemen and speculators.
The farmers of the country, as well as those
who are engaged in commercial, and manufacturing pursuits, have been benefited by the
stabilization of interest rates on a lower basis,
which has unquestionably been brought about
by the operation of the Federal Reserve
system. In addition to this, the Federal
Reserve Act has specifically provided for the
betterment of the farmers' condition by making
it possible for them to secure banking accommodations on equal terms with other classes of
borrowers, in order to relieve the necessities
arising under any one of the three heads above
enumerated.
Section '24 of the Federal Reserve Act provides:
Any national banking association not situated in a central reserve city may make loans secured by improved
and unencumbered farm land, situated within its Federal
Reserve district, but no such loan shall be made for a longer
time than five years, nor for an amount exceeding fifty per
centum of the actual value of the property offered as
security. Any such bank may make such loans in an
aggregate sum equal to twenty-five per centum of its
capital and surplus or to one-third of its time deposits and
such banks may continue hereafter as heretofore to receive
time deposits and to pay interest on the same.

In this connection, the Federal Reserve
Board's Regulation I, Series of 1915, is cited
as fully carrying into effect the provisions of
this section. It has never been contended,
however, that section 24 of the Federal
Reserve Act would meet all the requirements
of farmers for long-time loans; but adequate
provision has been made under the Federal
farm loan act whereby the Farm Loan Board
will, within a short time, establish a system of
farm loan banks in the United States which
banks will be empowered to make loans
extending over long periods of time.
Section 13 of the Federal Reserve Act provides :
Upon the indorsement of any of its member banks,
* * * any Federal Reserve Bank may discount notes,
drafts, and bills of exchange arising out of actual commercial transactions; that is, notes, drafts, and bills of ex-




448

change issued or drawn for agricultural, industrial, or com-*
mercial purposes, or the proceeds of which have been used,
or are to be used, for such purposes * * *. Nothing in
this Act contained shall be construed to prohibit such
notes, drafts, and bills of exchange, secured by staple agricultural products, or other goods, wares, or merchandise *
from being eligible for such discount; but such definition
shall not include notes, drafts, or bills covering merely
investments or issued or drawn for the purpose of carrying
or trading in stocks, bonds, or other investment securities,
except bonds and notes of the Government of the United
States. Notes, drafts, and bills admitted to discount
under the terms of this paragraph must have a maturity at
the time of discount of not more than ninety days: Provided, That notes, drafts, and bills drawn or issued for agricultural purposes or based on live stock and having a maturity
not exceeding six months may be discounted in an amount to
be limited to a percentage of the capital of the Federal Reserve
Bank, to be ascertained and fixed by the Federal Reserve Board.

(The italics are ours.)

The Federal Reserve Board has ruled that,
as this section limits the total of six months'
paper under discount at any one time by a
Federal Reserve Bank to "a percentage of the
capital of the Federal Reserve Bank," the total
of such loans must not exceed 99 per cent of a
Federal Reserve Bank's capital. It has extended this limit to all Federal Reserve Banks
requesting it, and it has also held (under advice
of counsel) that the term "capital," as applied
to Federal Reserve Banks, does not mean the
paid-up capital, but that it refers to the subscribed capital. Hence the 99 per cent limitation may be construed by the Board, if
necessary, as applying to the subscribed capital, which would give, therefore, any Federal
Reserve Bank the power to rediscount six
months7 paper to the extent of 198 per cent of
its paid-up capital, the paid-up capital being
50 per cent of the subscribed capital. As the
paid-up capital of all Federal Reserve Banks is
approximately $55,000,000, it follows that their
capacity for rediscounting six months' agricultural paper amounts to more than $100,000,000.
This section of the Act makes eligible for
rediscount by a Federal Reserve Bank the
notes that the farmers have been in the habit of
giving to provide for their needs under heading 2, supra, and its application has already
resulted in more adequate credit and lower
interest rates, the rediscount rates on six
months' agricultural paper having ranged, in
the various districts, from 4J to 5 per cent.
Attention is called in this connection to the
Board's Regulation C, Series of 1915.
The efficacy of the Federal Reserve Act in
providing for farmers' needs under heading 3,
supra, was tested thoroughly and proved beyond question during the crop-moving season
of 1915. In the latter part of August, 1915,

444

FEDERAL RESERVE BULLETIN.

the Secretary of the Treasury announced his
purpose to deposit Government funds in large
amounts with Federal Reserve Banks in order
to aid them to carry out the policy, which had
been recommended by the Board, of encouraging the orderly movement of crops in their
respective districts. Only three of the Federal
Reserve Banks indicated a desire for such deposits, and a total of only $15,000,000 ($5,000,000 in each of the three districts of Richmond,
Atlanta, and Dallas) was deposited. On September 3, 1915, the Federal Reserve Board
issued Regulation Q, which regulation gives full
force and effect to section 13 of the Federal Reserve Act. It provides for preferential rates for
commodity paper and defines such paper as " a
note, draft, or bill of exchange secured by warehouse terminal receipts, or shipping documents
covering approved and readily marketable,
nonperishable staples properly insured.77 Discount rates of 3 per cent per annum were
established in all the districts most directly
concerned in the movement of crops, and, in
order to be sure that the producers might receive
the benefit of this low rate, the regulation provided that the rate should apply only in those
cases where the borrower whose paper was
offered for rediscount by the member bank had
been charged on the paper offered a rate of
interest or discount, including commission, of
not more than 6 per cent per annum.
As a result of the steps taken by the Secretary of the Treasury and the Federal Reserve
Board, the abundant crops of 1915 were marketed, not only without the usual seasonal disturbance in money rates, but actually at rates
lower than had hitherto been known, and in
the case of one of the great staple crops of the
country, cotton, these measures resulted in
conserving to the producers values amounting
to many millions of dollars, which doubtless
would/otherwise have gone to middlemen and
speculators. The outbreak of war in Europe
in the midsummer of 1914 found the cottonproducing States about to market a crop which
turned out to be nearly 16,000,000 bales. The
export market was paralyzed, and the close of
the cotton year (July 31, 1915) found the
world with a surplus of American cotton of
nearly 5,000,000 bales, with another crop of
about 12,000,000 bales soon to be marketed.
To complicate the situation further, the belligerent powers blockading the coasts of
Europe announced their intention to declare
cotton an absolute contraband of war. A
panicky feeling existed throughout the cotton




SEPTEMBER 1,1916.

belt; predictions were made freely of crumbling prices and of commercial disaster, yet
prices of cotton, which at the opening of the
cotton year (Aug. 1, 1915) ranged around 8
cents a pound, instead of declining, advanced
steadily, going above 10 cents on September
15, and above 12| cents on October 20, so that
the producers of this great staple were enabled
by reason of the facilities placed within their
reach by the Federal Reserve Banks to market
their crops in a gradual and orderly manner,
and to obtain the full benefit of fair prices
for the fruits of their toil.
This outline.of the course of cotton prices in
1915 is mentioned simply as exhibiting a striking example of the efficacy of the Federal Reserve Act in protecting producers, and at other
times and under other conditions it will be just
as effective in the case of any other agricultural
product as it was in the matter of cotton.
There is no feature of the Federal Reserve
Act which is more easily understood, nor which
should be more highly appreciated by the public, than the relief it affords in crop-moving
seasons. Before the passage of the Federal
Reserve Act the annual stringency in the
money market and the high rates that prevailed during such periods always caused
heavy loss to the farmers of the country, and
did not confer any corresponding benefit upon
the consumers. Such conditions invited speculation and enabled middlemen to reap profits
from the labor of others. The annual recurrence of these tight money periods were also a
menace to the entire financial and commercial
fabric of this country, and while, in the absence of other complications, the banks of the
country were usually able to meet the demands
in some fashion without permanent derangement of the credit structure, still on two memorable occasions at least (to wit, 1873 and 1907)
other complications arose simultaneously with
the crop-moving stringency, and the result was
complete breakdown, financial panic, and disaster • from which it took the country years to
recover.
Operation of the Clearing Plan.

Clearing and collection of checks under the
plan recommended by the Federal Reserve
Board may be said to be satisfactorily inaugurated, though it is but fair to state that many
little adjustments and improvements remain to

SEPTEMBER 1, 1916.

FEDERAL RESERVE BULLETIN.

445

County, Conn., which is now a part of the
New York district, remit also to the Federal
Reserve Bank of Boston at par.
At the Philadelphia Federal Reserve Bank
the total number of items cleared during the
last 15 days of July was 32,504 and their
amount was $55,399,443. During the next 15
days, from August 1 to August 15, the number
of items cleared was 76,827 and the amount of
the clearing $111,430,394.
The volume of the clearing at the Cleveland
Federal Reserve Bank on August 15 was
$3,492,441.
Some large Chicago banks having correspondents and connections throughout the country
Operations of the Federal Reserve inter-district collection syshave preferred not to avail themselves of the
tem, July 15, 1916, to Aug. 15, 1916.
facilities of the Chicago Federal Reserve Bank,
sending to that bank only a small percentage
Average
Mem- State
number
ber
Average
banks,
of their items. At the same time Chicago
of items
banks remitamount of
Bank.
handled daily clearing. in the tance
member banks report that banks in many
daily.
district. at par.
cities which have heretofore been exchange
Boston
28,906 $7,333,007.00
1241 points are now willing to remit at par for checks
402
New York
24,230 14,705,303.00
27
624
Philadelphia..
17,123
8,651,377.00
135
629
Of the items handled by the
9,799 3,804,794.00
470 sent to them.
Cleveland
758
9,897 3,632,248.00
294 Chicago Bank during the first month of the
Richmond
519
7,347
1,681,462.00
462
391
Atlanta
11,970
8,077,696.00
991
Chicago
•...
1,348 operation of the clearing plan approximately 40
5,474 2,451,748.83
469
St. Louis......
734
2 4,500 3 3,550,744.11
748
Minneapolis
1,000 per cent were on banks in the district outside
6,923 3,680,374.00
940
Kansas C i t y . . .
1,328
5,470
1,143,942.00
634
Dallas*
241 the city of Chicago, 25 per cent on Chicago
1,474
589,000.00
519
San Francisco.,
752
banks, 5 per cent on other Federal Reserve
Total
133,113 59,301,695.94
7,624
7,032
cities, and 30 per cent on other districts outside
1 All State banks in district.
Federal Reserve cities.
2
Approximately.
3
Includes $2,635,913.83, representing clearings between Minneapolis
In explanation of the figures for the Federal
and St. Paul banks handled through clearing house.
4
Figures from July 6, inauguration of system.
Reserve Bank of St. Louis it may be stated
There was general discussion of questions that many of the member banks in that diswhich have arisen in the first month's opera- trict are changing their methods of handling
tion of the plan at a conference of governors checks slowly and attempting to determine
held in Boston during the week of August 21, whether it is cheaper to handle them direct,
It has been necessary for the banks to em- through the Federal Reserve Bank, or through
ploy a considerable number of additional clerks the country clearing houses operated in St.
in connection with the clearing, and in some Louis and Louisville.
The Kansas City Federal Reserve Bank did
cases there has been difficulty in finding a
sufficient number of experienced employees. not handle State bank items except in a very
Additional work has also been imposed upon insignificant amount until after the distributhe tellers through the receipt of shipments of tion of the par list on August 15. Since that
money and all departments of the banks have time the State bank items have greatly inbeen partakers in the extra burden of work.
creased in number and total amount.
Items from small country banks show a
In the Boston district all State banks to the
number of 241 remit at par. Fifteen national gradual but noticeable increase at the Federal
banks and 15 trust companies in F airfield Reserve Bank of Dallas.
be made, some of which will require several
months of patient work to fully accomplish.
The plan had on August 15 been in effect only
one month, hence it is only possible to give figures which show what had been done by the
12 Federal Resei ve Banks in the first few weeks.
During the first 30-day period the average
amount of daily clearings for the 12 banks was
$59,301,695, with the average number of items
133,113. Federal Reserve Banks can collect
at par from 7,624 member banks and 7,032
State banks, a total of 14,656 banks. There
is given below a table showing briefly the
operations of the 12 banks.




446

FEDERAL RESERVE BULLETIN.

At San Francisco the Federal Reserve Bank
has undertaken the collection of checks from
nonmember banks upon substantially the same
basis as from member banks. Seven-eighths
of the nonmember banks upon which the bank
has had checks have consented to remit without
deduction for exchange.
Applications Under Clayton Act.

Preliminary work upon the applications
under the Kern amendment to the Clayton Act
for the permission of the Federal Reserve
Board to serve at the same time as an officer
or director of a member bank and of not more
than two other banks, which are not in substantial competition with the member bank, is
well advanced. A large number of applications are now ready for the action of the Federal Reserve Board, and they will be taken
up immediately. Many applications present
simple questions which can be easily determined, but others are complicated by reason
of the difficulty in determining whether, from
the facts presented, "substantial competition"
exists within the terms of the statute.
About 5,000 blanks have been sent to those
making inquiry, 3,500 of these going out from
Washington and the remainder being distributed by Federal Reserve Agents. These applications, as they have been returned with
the recommendation of the Federal Reserve
Agents, have been taken up by a committee
and are now ready for consideration by the
Board.
That those making applications might have
all the information at its command, the Federal Reserve Board sent out early in August to
Federal Reserve Agents answers to a number
of the questions which had been propounded
up to that time, as follows:
There have been received many inquiries relating to
applications for consent of the Federal Reserve Board
under the Kern amendment to the Clayton Act.
The Federal Reserve Board desires each applicant to
make on the reverse side of Form 94 a complete list of all




SEPTEMBER 1,1916.

firms of which he is a member and a complete list of all
corporations of which he is a director, officer, or envployee.
Inquiries about the questions which banks are requested
to answer on Form 94a will be taken up in proper order.
Question No. 1.—Character of the community which the
banking institution serves.
The answer to this question should state the character
of business of the community or in case of a large city of
that section from which the bank draws a large majority
of its customers.
Question No. #.—Character of business of the institution.
The reply "Commercial banking" would be sufficient
if bank did not engage in other banking activities.
Question No. 3.—Describe nature ox demand deposits.
The answer should state whether bank, commercial, or
individual, whether checking accounts or demand certificates of deposit, whether the average deposit is large or
small, and whether interest is allowed.
Q.uestion No. 4.—Describe nature of time deposits.
This means whether saving accounts or time certificates
and also character of depositors and approximate average
size of deposits.
Questiori No. 5.—Describe nature of acceptance liabilities.
A reply stating the liabilities on commercial letters of
credit covering exports or imports and domestic transactions and location of the bulk of the customers for whom
credits are opened would be sufficient unless the bank
issued cash letters of credit, travelers' checks, etc.
Question No. 6.—State practice of bank in respect to
purchasing commercial paper, e. g., continuous or seasonal.
The reply'' continuous " or " seasonal,'' as the case might
be, would be sufficient. It might be well to mention in
which markets purchases are primarily made.
Question No. 8. —Describe nature of collateral.
This means the character of the collateral, i. e., commercial paper, stocks, bonds, mortgage notes, etc.
Question No. 9.—Describe character of investments.
A,reply stating "Long and short term railroad and municipal bonds and notes" would be sufficient, unless the
bank made investments in real estate securities, etc.
Question No. 10.—Describe practice of bank in respect
to acquiring and disposing of investment securities.
Answer should state whether the purchases and sales
are made in the open market or directly from corporations, etc., and whether underwriting syndicates are joined
or formed, whether securities are acquired for long-time
investment or for short-time investment for resale to customers, etc., and also whether there is a bond department.
Question No. 11.—Describe nature of foreign exchange
business, if any, done by the bank.
Reply should indicate amount of the business, with
what foreign countries, whether or not done direct or
through other institutions, and whether only for customers
or a wide-open market business.

SEPTEMBER 1,1916.

447

FEDERAL- RESERVE BULLETIN.

Question No. 12.—Describe kind and extent of fiduciary
Number
business done by the bank.
of
Liabilities.
District.
failures.
This includes acting as registrar of stocks and bonds,
looking up and guaranteeing titles, etc.
l
128 $1,309,433
While in cases which are clear the Board does not desire N o . 2. . . . . . .
No.
208
2,617,469
441,739
to be technical in passing upon the sufficiency of the No. 3 . .
47
1,318,999
No.4
113
answers to the question on Form 94a, it will be necessary No. 5
595,200
56
1,246,565
6
123
for the replies to go more into detail in the doubtful cases, No. 7
No
1,479,201
176
454,750
and in dealing with these the Federal Reserve Agent No. 8 . . . .
70
No.
30
477,600
should use his own discretion in getting at all facts. The No. 9
10
339,135
59
11
463,508
50
questions outlined in the schedule are only to be consid- No. 12
903,900
No.
147
ered as general leaders.
i
11,647,499
Total, 1916
1,207
Information relating to the ownership or control of the
18,934,903
1915
1,739
1914. -.
1/411 20,377,148
institutions involved would be very helpful in deter1913
. . . .
1,169 20,325,705
mining the question of substantial competition * Where
16,098,460
1912
1,230
the same group of individuals control the boards of directors
of two banks, the test should be whether the banks would,
Fiduciary Powers.
under normal conditions, be in substantial competition on
October 15,1916, i.e.,ona date when the control no longer
Applications of the following banks for perexists.
mission to act under section 11 (k) of the
Where a group of persons owns the majority of the stock
in two banks and through such ownership controls both Federal Reserve Act have been approved by
institutions, careful consideration should be given to the the Board since the issue of the August Bullequestion of whether the public is deprived of the benefits tin, as follows:
of competition by such control, and whether under normal
DISTRICT No. 1.
conditions substantial competition would exist between
the two institutions. Conditions of that kind, if found, Trustee, executor, administrator, and registrar of stocks
should be considered as tantamount to substantial comand bonds:
petition.
Fourth Atlantic National Bank, Boston, Mass.
Registrar of stocks and bonds:
National Bank of Commerce, New London, Conn.

Commercial Failures in July.

Commercial failures in Federal Reserve districts during the month of July, as compiled by
R, G. Dun & Co. for the Federal Reserve Bulletin, are less in number and total liabilities than
for July, 19.1.5. In eight districts the number
of failures has decreased from that for June.
The total decrease in number over the month of
June is, however, slight. Failures in all the
country as a whole numbered 1,207 during
July, 1916, being 20 less than in the month preceding. The reduction from the number in
the corresponding month of 1915 was, however,
very considerable. Aggregate liabilities represented in the failures for July, 1916, were
$11,647,499, or some $7,000,000 less than the
total of liabilities for the same month in 1915.
The figures by districts for July and the four
previous years follow.




DISTRICT NO. 6.

Trustee, executor, administrator, arid registrar of stocks
and bonds:
First National Bank, Meridian, Miss.
DISTRICT NO. 7.

Trustee, executor, administrator, and registrar of stocks
and bonds:
First National Bank, Peterson, Iowa.
National Brookville Bank, Brookville, Ind.
DISTRICT NO. 10.

Trustee, executor, administrator, and registrar of stocks
and bonds:
Peoples National Bank, Ottawa, Kans.
DISTRICT No.

11;

Trustee, executor, administrator, and registrar of stocks
and bonds:
Corsicana National Bank, Corsicana, Tex.
Trustee, executor, and administrator:
Citizens National Bank, Tyler, Tex.

448

FEDERAL RESERVE BULLETIN.

Reassignments to Board's Committees.

SEPTEMBER 1,1916.

Banks.

New charters issued to
With capital of
-•- Increase of capital approved for
With new capital of.-..

Acting favorably upon a report of its executive committee the Federal Reserve Board on
August 28 made the following reassignments
Aggregate number of new charters and
of its members to committees:

18
$1, 245, 000
7
-

725,000

banks increasing capital
25
Audit and examination.—Mr. Delano, Mr. Hamlin, Mr. With aggregate of new capital authorized-... 1, 970,000
Miller. Secretary, Mr. Broderick.
Clearings.—Mr. Delano, Mr. Harding. Secretary, Mr. Number of banks liquidating (other than
those consolidating with other national
Willis.
banks)
12
Executive.—Mr. Harding, Mr. Warburg, a member (rotatCapital of same banks...
905,000
ing). Secretary, Mr. Willis.
2
Gold-settlement fund.—Mr. Hamlin, Mr. Miller. Secretary, Number of banks reducing capital
Reduction of capital
182, 500
Mr. Allen.
Issue and redemption.—Mr. Miller, Mr. Delano, Mr. Hamlin.
Total number of banks going into liquidaSecretary, Mr. Allen.
tion or reducing capital (other than those
Law.—Mr. Harding, Mr. Hamlin, Mr. Warburg. Secreconsolidating with other national
tary, Mr. Elliott.
banks)
14
Operation of Federal Reserve Banks:
Aggregate capital reduction
1,087, 500
Boston.—Mr. Hamlin, Mr. Warburg.
New York.—Mi1. Warburg, Mr. Delano.
The foregoing statement shows the aggregate of
Philadelphia.—Mr. Warburg, Mr. Hamlin.
increased capital for the period of the banks
Cleveland.—Mr. Hamlin, Mr. Delano.
embraced in statement was
1, 970, 000
Richmond.—Mr. Miller, Mr. Williams.
Against this there was a reduction of capital
Atlanta.—Mr. Harding, Mr. Delano.
owing to liquidations (other than for consoliChicago.—Mr. Delano, Mr. Warburg.
dation with other national banks) and reducSt. Louis.—Mr. Delano, Mr. Miller.
tions of capital of
1,087, 500
Minneapolis.—Mr. Hamlin, Mr. Miller.
Kansas City.—Mr. Delano, Mr. Hamlin.
Net increase
882,500
Dallas.—Mr. Harding, Mr. Miller.
San Francisco.—Mr. Miller, Mr. Warburg.
Member banks and State banks and trustee powers.—Mr.
Warehouse and Storage Conditions.
Harding, Mr. Hamlin, Mr. Williams. Secretary, Mr.
Broderick.
With a view to improving warehouse and
Organization, expenditures, and staff.—Mr. Delano, Mr.
Hamlin, Mr. Miller. Secretary, Mr. Allen.
storage conditions the Federal Reserve Bank of
Discounts and investments.—-Mr. Warburg, Mr. Miller, Atlanta has sent out the following letter and a
Mr. Delano. Secretary, Mr. Willis.
list of questions designed to disclose warehouse
Relations with Federal Reserve agents.—Mr. Miller, Mr.
facilities and practices. Believing that they
Delano. Secretary, Mr. Willis.
Relations with Treasury Department.—Mr. Hamlin, Mr. are of general interest to Federal Reserve
Banks and to member banks, they are reprinted
Delano, Mr. Williams. Secretary, Mr. Allen.
Reports and statistics.—Mr. Miller, Mr. Williams, Mr. below:
Warburg. Secretary, Mr. Jacobson.
"With the purpose in view of obtaining at
Bulletin.—Mi. Miller, Mr. Delano, Mr. Hamlin.

New National Bank Charters.

The Comptroller of the Currency reports the
following increases and reductions in the number of national banks and the capital of
national banks during the period from July 22
to August 25,1916, inclusive:




first hand definite information concerning the
business methods and practices of the warehouses of the Sixth Federal Reserve district, we
inclose herewith two copies of a statement form,
and we desire that you request the warehouseman in your locality to fill in one, sign, and
return it to us at his earliest convenience.
" We know that you recognize the importance
of placing receipts of warehouses located in
interior points on the same plane of worth,

SEPTEMBER 1,

FEDEEAL EESERVE BULLETIN.

1916.

responsibility, and acceptability as those issued
by warehouses and storage companies at ports
and concentrating points. Any other condition would operate against the salability and
prices of your locally stored cotton, and would
detract from the value of receipts issued by
your local warehouse as collateral security for
loans.
" We trust, therefore, that you will aid us in
obtaining without delay the information we
desire from your warehouseman, and ask the
favor of- your cooperation to this end."

449

If records are not so kept, state where they are kept.
Will you agree to permit an inspector from the Federal
Reserve Bank to audit your records and verify your
outstanding receipts against cotton on hand, at all reasonable times?
Will you agree to use the uniform warehouse receipt
recommended by this bank?
Do you issue warehouse receipts marked insured; if so,
how do you carry this insurance?
Is your insurance written by an employee or other
party interested in your warehouse?

Is your cotton insured by specific policies or by cerTo the Warehousemen:
tificates under open policies?
The standing of your warehouse and the responsibility
Is your warehouse company incorporated? If so, has
behind your receipts is a matter of great importance to
your customers and to the banks of your community.
the charter been accepted and capital stock paid in full;
It is therefore highly important to you that it be known give amount?
that your business is conducted in a safe and efficient
If not incorporated, who are the owners of the property?
manner.
We trust therefore you will give this matter the prompt
attention its importance requires.
If the owners of the property operate the warehouse,
FEDERAL RESERVE BANK OF ATLANTA.
please furnish their financial statements
If leased by you, please furnish your financial statement.
In order to facilitate loans to my customers having
Signed
cotton stored in — — warehouse at •, • -, I
For
Warehouse Co..
hereby certify that the following answers are true and
correct to the best of my knowledge and belief.
Do you issue a receipt for each bale stored?
Commercial Paper Market.
Do you plainly mark all receipts for cotton stored on
platforms or premises adjacent your warehouse, to show
Mr. John N. Eaton, assistant manager of the
its location?
..
---*...-.•
Industrial Trust Co., of Pawtucket, It. I.,
Who has charge of your unissued receipts, and where
says in the course of an article on commercial
are they kept?
paper, printed in the Journal of the American
Who is authorized to issue and sign receipts?
Are your receipts and tags numbered consecutively
when printed?
Do you require the surrender of the receipts upon the
delivery of the cotton?
-.
i
Do you keep records showing daily all receipts surrendered and cotton delivered?
Are all receipts surrendered marked "Delivered"?
What is done with surrendered receipts?
Do you make a practice of checking up to ascertain if
you have on hand all cotton for which eceipts are outstanding? If so, how often?
-—
Are your records so kept that an inspector from the Eederal Reserve Bank can verify outstanding receipts against
cotton on hand?
Are such records kept in a fireproof safe at nights,
Sundays, and holidays at the warehouse?




57469—16

3

Bankers Association for August, in part, as
follows:
Commercial paper includes within its scope various
forms of drafts and bills of exchange, but a definition for
all practical purposes, covering commercial paper in its
most familiar phase, may be given as a negotiable note
made by an individual, firm, or corporation, either on
demand or payable at some fixed time, the proceeds of which
are for the promotion of mercantile or commercial trans-

actions. While notes, the proceeds of which are used
for the financing of fixed assets—that is, machinery,
plant, real estate, etc.—might be included in the scope
of the definition of commercial paper, it is generally considered that the proceeds from commercial paper are used
only in the financing of merchandise transactions* Theo^
retically, the use of commercial paper is to enable a manufacturer or merchant to buy raw materials for manufacture,
or goods to be resold, and upon the completion of the trans-

450

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

action the money he receives is used to liquidate the do railroad notes strictly belong in the commercial paper
indebtedness. Money for the financing of fixed assets class.
While it is brokers' paper that is most frequently reshould be provided in other ways.
ferred to as "commercial paper," and some banks speak
The principal advantage to be gained by concerns from of their "commercial paper" and of their "discounts,"
placing their paper in the open market is not, as many meaning by the latter the notes they take direct from
suppose, because of their ability to thus obtain a lower their own customers, yet brokers' notes or commercial
rate of discount. While at times brokers' rates are lower paper, as described, are the same in general form as those
than the rates obtained from one's own banks, it fre- which find their way into the banks direct from the people
quently happens that their rates are far above those who make the notes. The great difference is found when
charged by banks to their own customers. On the whole* the notes come to maturity.
If a bank is willing to discount the notes over again, it
the average rate would probably not differ greatly either
matters little whether they have come direct from their
way. The principal advantages derived are, that it estabown
lishes/or a concern a broader credit, increases the sources from customers or from a broker; but if a bank wants to
which to borrow, and enables one 'to keep his banks open to be in an independent and liquid position, as all banks
should be, and be able to realize quickly on its assets in
draw from in case of emergency.
order to pay its depositors whose money is payable on de*
.#
*
*
*
mand, it is the commercial paper bought through brokers
Until a few years ago, it was customary for purchasers which can be relied on to be paid at maturity, provided it
quite generally to give notes for merchandise, but with has been judiciously purchased.
the more recent custom of the seller offering discounts for
While, of course, many loans made direct are paid at
cash settlements, the practice of giving notes for merchan- maturity, the bank man usually feels under some obligadise has been very largely discontinued. The discount tion to renew them if asked to do so, and there is lacking
allowed by the seller usually amounts to more than it that independence which obtains in the case of brokers'
costs the purchaser to borrow the money, so those who are paper where the bank does not come in direct contact
financially strong enough now borrow sufficient money with the borrower and assumes no obligation whatever in
on their own paper to enable them to discount their bills. the matter of renewal. If the note is good it will be paid
To give a note for merchandise has come to be considered at maturity, and it is entirely optional with the bank as to
a sign of weakness and the best concerns carefully shun whether another note is taken or not.
this procedure, which was formerly the well recognized
*
*
•*
*
*
method of doing business. These contrasting business
The forms and uses of commercial paper, as the business
methods are the cause of most of the discussion in connec- has for some years been conducted in the United States,
tion with the requirements and regulations of the new is peculiar to our own country. In European countries
Federal Reserve Act as applied to commercial paper. the procedure is quite different. The long terms of
This phase of the situation will be taken up more in detail credit prevalent among merchants in this country, with
later on.
discounts offered for cash or for shorter settlements, are
While the single and double name paper mentioned unknown in Europe. Over there, selling on open account
form a very large percentage of the commercial paper of is confined almost entirely to the business between the
this part of the country, there are several other kinds of retailer and the consumer.
obligations which rightfully belong in the commercial
In England, France, Germany, and other countries,
paper class in its broadest sense. These include notes when a merchant buys goods and has not sufficient cash
or drafts secured by bills of lading, warehouse receipts, to pay for them, instead of going to his bank or broker and
etc., which show that the loan is secured by merchandise, borrowing money on his own paper, as is customary here,
this merchandise, ordinarily, being held in a public ware- he gives a note to the seller of the goods, or the seller draws
house. In the East and South, a large amount of money a time draft on the buyer, and this note with the seller's
is loaned in this way on cotton, and at certain seasons indorsement, or the draft accepted by the buyer, is taken
the buying of butter and eggs and various other kinds of to a bank and discounted.
produce is financed in this way. In the West, large
Such paper is familiarly known in England as a bill,
amounts are loaned on cattle and on wheat, corn, and rather than as a note or draft. The great banks of London,
other crops. This class of paper is designated by the Fed- Paris, and Berlin have enormous quantities of these bills
eral Reserve Board as "commodity paper."
constantly maturing, and if any sudden emergency makes
Then there are various other forms of collateral loans, it necessary for a bank to have money in greater quantities
secured by stocks, bonds, mortgages, etc. Whether loans than is provided by the maturing of this paper, they can
secured in this last way can properly be considered as indorse it and turn it over, practically without limit, to
commercial paper is a question. Some would put them the banks created for rediscount, and immediately receive
in this class, but, in its strictest sense, they do not belong cash for it. In France and Germany it is a regular custhere, as they do not directly belong to commerce. Neither tom for banks to thus rediscount their paper, and while in
•*




-X-

•••&.

•&

•&

SEPTEMBER 1,

1916.

FEDERAL RESERVE BULLETIN.

451

England the custom is not so prevalent, banks there also paper must bear on its face evidence that it has arisen
from such a basis; and the law places upon the member
frequently avail themselves of the privilege.
In England, although not in the other countries, there banks the responsibility of passing on the eligibility of it
is what is known as the merchant banker or bill broker, in this respect by requiring them to state, over their
who, to quite an extent, corresponds to our note broker. signature, that the paper complies with the rules and
This merchant banker, contrary to the custom among regulations of the Federal Reserve Board.
Under the new system it is believed that merchants will
the note brokers of the United States, adds his name to
the paper, by indorsement. With this banker's indorse- be more conservative and less likely to overbuy, and
ment, and sometimes also that of other bankers or banks, that the pernicious habit of returning goods without satisthe paper is frequently bought and sold in the open mar- factory reason will be decreased, because more effectually
closing a transaction by note or acceptance will make it
ket a number of times before it reaches maturity.
This paper resulting from actual commercial trans- harder not to meet the obligation when due. If the transactions passes almost as freely and easily as currency it- action is closed at the beginning a merchant can not
self; in fact, it is preferable to currency because of the easily do more than ask for a refund or credit.
By changing open accounts or book credits to negotiable
greater ease with which it can be transferred.
A serious defect in our old banking system was the and discountable acceptances, the recent undesirable but
absence of any source such as that provided by the central growing habit of hypothecating or selling accounts receivor rediscount banks of Europe, where banks in general able will be done away with.
Under the new system the merchant with limited
could convert their paper into cash when money was
needed for an emergency. While a bank's mercantile de- resources would be more favored than now, as compared
posits are payable on demand, the actual cash, or its with his wealthier rival, because the trade acceptance he
equivalent, which a bank usually had on hand under will receive can be immediately turned into cash instead
the old system, was only from 15 per cent to 25 per cent of his having to wait for the payment of an account.
of its deposits. The ability of a bank to take care of un- Some believe that the best merchants will continue as
usual demands such as always occur in times of financial they have in the past to borrow money on their own paper,
trouble, is dependent on its ability to turn its investments into and by offering cash will continue to get sufficient discash.
count in purchasing goods to make this method more
In times of stress, bonds which are based on fixed profitable than the new one, or rather, the revival of the
assets, if they can be disposed of at all, can usually be old one, of giving notes for merchandise. They feel it
disposed of only at a great sacrifice. Loans on stock ex- would be going backward—retrograding—to carry out
change collateral, which under normal conditions are con- the proposed change. However, even if the present trade
sidered safer than commercial paper, may be turned into discount system continues in general use, it will undoubtcash by the first few people who attempt it, but as such edly be of advantage if the acceptance plan can be applied
loans are usually only paid by the borrower getting a to those who do not avail themselves of the discount. If
similar loan elsewhere, any general movement toward de- the present forms of paper do continue to be made, they
manding the payment of such loans would prove ineffec- will undoubtedly find a ready market because of the higher
tual and would only greatly intensify the strained condi- rate they will carry in comparison with the acceptance
tion of the money market. The most readily convertible, form.
asset a bank has for such an emergency is its brokers' paper, The advocates of the new system see in it a safer, better,
which, if it is good at all, is usually good for its face value and more conservative method of doing business. They
at maturity. The record for payment of such paper believe it will be possible to have the regulations required
during our frequent periods of stringency or panic by the Federal Reserve Board complied with very genhas been most remarkable. It often happens, however, erally by mercantile borrowers, and that a class of paper
that a bank needs larger amounts of money than can be will be built up which wity surpass in value that now
provided by the daily maturing of a normal amount of existing and which will command a premium in the money
paper, and the principal thing left to be desired by a markets of this country.
The change proposed, however, is fundamentally a
bank with a large investment of this kind has been some
change of business rather than a change of banking, and
place available for rediscounting.
it is the opinion of many of our ablest bankers that the
The Federal Reserve law and the regulations of the change, if it comes at all, will come very slowly. From
Board are most clear and distinct as to their definition of a strictly banking standpoint, the change is generally
eligibility for commercial paper. The laic absolutely pro- regarded as desirable if it can be worked as its advocates
hibits the discount of paper the proceeds of which have been plan it, because it is claimed that it will give the banks
or are to be used for the financing of fixed assets of any kind— a safer basis for granting credit. The custom of book credit
such as machinery, buildings, or real estate—or for invest- and trade discount, and borrowing on single name paper,
ment or purchase of stocks, bonds, or other securities. The however, is so thoroughly established that it will require a long
proceeds of the paper must be for the carrying on of actual time and much patience before the suggested change can be
commercial, agricultural, or industrial transactions, and the brought to completion.




452

FEDERAL RESERVE BULLETIN.

The present borrowers will be very slow to allow their
own notes to be minimized in importance and have the
notes of their customers made to seem more desirable.
So far practically nothing has been accomplished in
the line of change, but conditions since the establishment
of the new system a year ago have been such that it would
have been impossible to bring about any decided change
even if it had been attempted. Banks have been so
flooded with money that they have been willing to loan
it without placing any unnecessary restrictions on it.
So long as reasonably cheap money prevails and the Federal Reserve Board continues to make single name paper
eligible for rediscount, it is probable that little progress
will be made in the attempted change. In periods of
tight money, banks have greater influence with their
customers than at other times, and much more rapid
progress might be possible if-we should run into such a
period of stringency. To have it become the uniform
custom, it will probably be necessary to have a situation
exist whereby the merchants of the country can secure
their required accommodation in no other way.
So far, the Board has carefully refrained from making
any radical regulations which would upset the business
or financial equilibrium. On the contrary, they are moving very cautiously, and instead of bringing pressure to
bear, they are attempting to accomplish their ends by
leading rather than pushing, and are trying to make it an




SEPTEMBER 1,1916.

inducement for the merchant and banker to follow the
plan laid out. The recent authorization of the purchase
in the open market of domestic acceptances, and the preferential rate made on this class of paper, is an indication
of the desire of the Board to accomplish what they have
set out to do. They will undoubtedly make further
regulations in this direction from time to time as conditions seem to warrant, and we will unquestionably see more
and more paper of the double name or acceptance form
as time goes on.
It will thus be seen that commercial paper in all its
phases, whether of the acceptance form or the ordinary
notes of a business concern, whether handled by note
brokers or handled direct by the banks, has this fundamental characteristic—it should be founded on a commercial transaction and used only for the financing of quick
assets. The development of ftie commercial paper business has created the necessity, in all leading banks, of
credit departments; and with the added interest given to
the subject of commercial paper by the Federal Reserve
law, these departments are destined to increase in scope,
importance, and in possibilities. The subject of commercial paper opens up a new field of thought and study for
the banker, and the man who combines a thorough knowledge of credits with a knowledge of the running of a bank
will be proportionately more in demand as this phase of
American business life develops.

453

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1916.

holdings of the Federal Reserve Agents7 Fund
decreased $4,400,000 during the period and
A record clearing of $103,761,000 on August
were $37,900,000 on August 24, a total of
24 and an increase in the average amount of
$149,100,000.
the weekly clearings of about $18,000,000,
accompanied by a considerable decrease in the Amount of clearings and transfers, Federal Reserve Banks,
from July 21, 1916, to August 24, 1916, inclusive.
change of ownership of gold, have been the
[In thousands of dollars.]
features of the operations of the Gold Settlement Fund for the period from July 21 to
Total
August 24, inclusive. The larger clearings are
clearings. Balances. Transfers.
due to the interdistrict collection system inaugurated on July 15, 1916. The changes in Settlement of—
91,087
July 27,1916
:.
7,923
1,400
85,270
Aug. 3, 1916
7,216
3,453
ownership of gold in the fund during the period
85,432
Aug. 10, 1916
<
4,379
1,166
92,740
Aug. 17, 1916
1,451
were but 2.73 per cent of the total obligations
10,117
103,761
Aug. 24, 1916
...
2,800
3,488
settled, as compared with 9.02 per cent for
458,290
33,123
Total
10,270
the preceding report period, from June 23 Previously reported
1,688,006
69,116
184,836
2,146,296
Total since Jan. 1,1916
to July 20.
Total transfers, 1916.
69,116
Total for 1915 (including transfers)
1,052,649
The gold holdings of the Gold Settlement
Total clearings and transfers, May
Fund have increased $11,880,000 and were
3,268,061
20, 1915, to July 20, 1916
$111,200,000 on August 24, while the gold
GOLD SETTLEMENT FUND.

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

T o J u l y 20,1916.

. . - •
-

.

•

20,678

.
. . .
180,668

Total




159,990

V
;

1
2

Total change from
May 20,1915 to Aug
24,1916.2

Balance
to credit
July 20,
1916, plus Balance,
Decrease. Increase. net depos- Aug. 24, Decrease. Increase. Decrease. Increase.
its of gold 1916.
since that
date.

Federal Reserve Bank of—

Boston...
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago .
St Louis
Minneapolis
Kansas C i t y .
Dallas
San F r a n c i s c o . . .

From July 21, 1916, to Aug. 24, 1916.1

17,322
40,885
10,801
14,451
16,550
10,289
5,208
18,843
14,668
31,651

16,052
11,010
12,545
10,961
12,401 ,.
5,820 :
11,562
5,949
4,608
8,910.5
4,190.5
7,191

180,668 111,200

16,466
10,577
17,251
9,318
11,507
1,058
16,579
4,343
3,431
11,345.5
4,403.5
4,921
111,200

414
433

1,643
894
4,762
1,606
1,177

4,706

5,017

160,423

15,661

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

2,435
213

2,270
12,785

12,785

17,736
45,591
9,158
13,557
11,788

176,084

Changes in ownership of gold during period July 31,1916 to Aug. 24,1916, equal 2.73 per cent of obligations settled.
Total changes in ownership of gold equal 5.39 per cent of .total obligations settled.

176,084

454

SEPTEMBER 1,1916.

FEDERAL EESEEVE BULLETIN.

Gold settlement fund—Summary of transactions for July 21, 1916, to Aug. 24-, 1916.
[In thousands of dollars.]

Federal Reserve Bank of—

Boston
New York

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

Federal Reserve Bank of—

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

Federal Reserve Bank of—

Boston
New York.-.
Philadelphia.......:
Cleveland
.Richmond
Atlanta
'Chicago
--- —
,St. L o u i s . . . . . . - - ,'-.
Minneapolis
-- -Kansas City
...... — .
Dallas
--San Francisco
.' —

Total.




Balance
last statement, July
20, 1916.

16,052
6,010
12,275
11,161
11,321
1,940
7,832
5,649
4,608
11,710.5
4,540,5
6,221"
99,320

Balance
last statement, July
27, 1916.

13,147
10,824
13,773
12,451
10,823
1, ~
7,775
5,684
4,304
13,296.5
4,154.5
3,070
100,800

Gold.

Settlement of July 27,1916.

Transfers.

July 27,
1916,
balance in
fund after
Total Total
With- DeposNet'
Net
i
drawn. ited. Debit. Credit. debits. debits. credit! credits. < * » * *
8,185 5,280
15,001 18,415
11,818 13,316
5,050 6,440
928 8,095 7,167
1,664
1,442
3,106
277 16,912 16,635
11,475 11,510
304
1,675
1,979
5,955 7,541
346
1,403
1,749
1,721
41
1,762

2,905
1,400

ioo;
|

430
1,000
220

1,400
170

1,650

1,400

1,400

With- Deposdrawn. ited. Debit.

Net
Total
dit. debits. debits.
200
1,253

160
2,000
2,010
300

1,000
1,000
253
2,000 I
I
200
1,000

1,000

4,570

10,575
14,573
10,604
4,910
5,700
871
3,953
14,051
712
9,317
1,932

3,453

Total
credits.

2,126
1,270

7,216- 85,270

85,270

375

3,453

91,087

5,317
16,116
10,938
5,330
7,318
3,082
15,525
8,605
2,432
7,232
1,751
1,624

5,258

6,2J9

100
1,0(10

91,087

35
1,586

7,923

Settlement of Aug. 3,1916.

Transfers.

Gold.

7,923

3,414
1,498
1,390

13,147
10,824
13,773
12,451
10,823
1,498
7,775
5,684
4,304
13,296.5
4,154.5
3,070
100,800

Aug. 3,

1916,
balance in
Net fund after
credits. clearing.

1,543
334
420
1,618
1,474
500
973
354

7,216

8,089
13,620
14,107
11,871
11,601
2,374
13,259
5,272
4,604
12,269.5
3,879.5
3,424
104,370

Changes in ownership of gold.
De-

In-

2,905
4,814
1,498
1,390
928
1,442
277
35
304 ;
"i,*586
346 !
3,121 j

9,323 |

9,323

Changes in own*
ership of gold.
De-

058

In-

2,796
334

580
618
1,124
3,474
712
300
27
375
354
7,876

7,876

Changes in ownSettlement of Aug. 10, 1916.
Gold.
Transfers.
Aug. 10, ership of gold.
Balance
1916,
last statebalance in
ment, Aug.
Net
With- DeposTotal Total - Net fund after
3,1916.
InDedrawn. ited. Debit. Credit. debits. debits. credits. credits. clearing.
8,089
13,620
14,107
11,871
11,601
2,374
13,259
5,272
4,604
12,269.5
3,879.5
3,424 '
104,370

150

653
363

3,385
303

3

4,3.79,j 85,432 85,432

4,379

220

i,5oo

363"
150
250
200

900
60
1,000
960

2,720

200

1,166 I 1,166

5,510
15,360
12,044
5,751
6,440
2,620
| 16,016
1
9,246
2,494
6,449
1,946
1,556

8,895
15,663
12,023
4,372
6,817
2,355
13,881
9,319
2,413
5,951
2,176
1,567

21
1,379
265
2,135
81
498

377

73
230
11

11,977
14,286
14,086
10,489
12,198
1,746
12,774
5,095
4,323
10,871.5
4,049.5
4,235
106,130

3,888
666
21
1,382
377
628
1,985
177
281
498
230
5,161

5,161

455

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1916.

Gold settlement fund—Summary of transactions for July 21, 1916, to Aug. 24, 1916—Continued.

Federal Reserve Bank o—
f

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

Changes in ownGold.
Settlement of Aug. 17,1916.
Transfers.
Aug. 17,
ership of gold.
Balance
1916,
last statebalance in
ment, Aug.
fund after
In10,1916.
DeWith- DeposTotal Total
Net
Net
drawn. ited, Debit. Credit. debits. debits. credits. credits. clearing. crease. crease.
$11,977
14,286
14,086
10,489
12,198
1,746
12,774
5,095
4,323
10,871.5
4,049.5
4,235

.

.. .

$5,000
$100
80

191

3*66

60

106,130

Federal Reserve Bank o—
f

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

460

10

1,451

5,080

$16,506
9,965
17,209
10,013
11,516
1,848
15,721
4,708
4,085
*0,927.5
3,934.5
4,317

1.451

110,750

10,117

92,740

92,740

10,117

$9,321
376
762
387
238

$4,529
3,123
102
2,94.7
356

55
82

11,139

11,139

Changes in own
Settlement of Aug. 24,1916.
Gold.
Transfers.
Aug. 24,
ership of gold.
Balance
1916,
last statebalance in
ment, Aug.
fund after
17, 1916.
With- DeposTotal Total
Net
DeInNet
drawn. ited. Debit, Credit. debits. debits. credits. credits. clearing. crease. crease.
$16,506
9,965
17,209
10,013
11,516
1.848
is. 721
4,708
4,085
10,927.5
3,934.5
4,317

Total

$250
1,000

$260
'$5,833 $10,102 $4,269
191 $9,512 25,607 16,095
13,450 16,573 3,123
5,077 4,951
126
6,571
6,809
238
3,447 3,549
102
11,037 12,984
1,947
1,000
196 8,758 8,562
2,466
238 2,704
6,723
7,079
356
1,865 .1,820
45
1,668
1,750
82

$270

$1,000

190
880

600

700
500
600
290

110,750

890

$1,700

1,340

2,800

1,100

2,800

$40 $7,275 $7,235
1,088 20,740 19,652
13,890 14,662
5,981
695 6,676
8,258
199 8,457
4,835
1,070
3,765
242 16,335 16,093
10,009 10,344
3,308 3,154
154
7,844 8,862
2,710
3,469
1,682
2,286

1,018
759
604

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

3,488 103,761 103,761

3,488

111,200

$772

335

$40

$612

228
695
199
1,670
858

365
654

3,851

1,018
759
604
3,851

Federal Reserve Agents' Fund—Summary of transactions, July 21, 1916, to Aug. 24, 1916, inclusive.
[In,thousands of dollars.]

Federal Reserve
Agent at—

Week ending
July 20, July 27,1916.
1916,
balance. With- Baldrawn* ance.

3,360
3,360
Philadelphia
140 4,410
Richmond
. 4,550
13,000
1,000 12,000
Atlanta
3,310
220 3,090
Chicago
3,550
100 3,450
St Louis .1,350.
Minneapolis....... 1,350
3,500 " " 2 6 6 " 3,300
Kansas City
430
430
Dallas...:.--9,250
9,250
San Francisco
Total




42,300

1,660

40,640

Week ending Aug. 3,
1916.

Week ending Aug. 10.
1916.

W^eek ending Aug. 17,
1916.

Week ending Aug. 24,
1916.

With- Depos- Bal- With- Depos- Bal- With- 1 Depos- Bal- With- Depos- Baldrawn. ited. ance. drawn. ited. ance. drawn. 1 ited. ance. drawn. ited. ance.
2i6

2,000
10
300
150

2,670

3,160 '
4,200
200
10,000
1,000
3,080
...... A.
3,150
1,350
" " 9 6 6 * 5,200
'366'
230
50
50
9,250

3,360
4,200
10,000
3,080
3,150
1,350
1,666" 4,300
280
9,250

200

38,970

250

1,000

900

39,620 | 1,250
i

300

3,160
270
4,000
9,000 " " o o o "
3,080
3,150
100
1,350
5,500 " " 4 6 6 * *'"6O6'
180
50
200
9,250
150
38,670

1,570

800

2,890
4,000
8,400
3,080
3,050
1,350
5,700
330
9,100
37,900

456

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

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:
Check Clearing.

Addressed to the officer of a national bank in
answer to his inquiry:
It is the understanding of' the Board that
your agreement to collect items on nonmember
banks is voluntary and that upon due notice to
the Federal Reserve Bank that you desire to
discontinue this service arrangements would no
doubt be made to handle such items in some
other way. The Board, however, will of course
expect you to pay items drawn against you
when remitted by the Federal Reserve Bank.
You will observe that the cost of transportation, if remittance is made in cash, is paid by
the Federal Reserve Bank.
JULY 28,

1916.

If for two months, the discount would be
$11.67 and the merchant would, therefore, receive $988.33; If for three months, the discount would be $17.50 and the merchant would
receive $982.50.
2. "If the member bank then sends this to
the Federal Reserve Bank, 7what per cent of
this $1,000 does it receive? '
The face of the note less the discount at the
rate and for the time specified.
3. "When this collateral is turned in for
currency, does the Government give its face
value, and does the Government receive any
compensation V
The Government gives its face value and at
present receives no compensation. The Federal Reserve Board may, in its discretion,
place a tax on note circulation, but has not
done so up to the present time. Such a tax, if
imposed now, would fall upon the Government
of the United States, for the reason that the
law provides that after the annual dividend
of 6 per cent is paid, the net earnings shall be
paid to the United States as a franchise tax,
except that one-half of such earnings shall be
paid into a surplus fund until that fund
amounts to 40 per cent of the paid-in capital
of the bank. The probable effect of such a
tax would be to increase rates of interest
charged to borrowers.

Banks as Transfer Agents.
Addressed to a Federal Reserve Bank;
With further reference to your letter of July
28 regarding the power of a national bank to
act as transfer agent, section 11 (k) of the
Federal Reserve Act confers upon the Board
the authority to authorize national banks to
4. "About what interest does the Federal
act only as trustee, executor, administrator,
and registrar of stocks and bonds and not as Reserve Bank make on the above transactransfer agent. Consequently it is impossible tion, and to whom does it go?"
The rates of discount at the several Federal
for the Board to authorize any national bank
Reserve Banks may be found in the Federal
to act as transfer agent.
Reserve Bulletin, copy of which is being mailed
AUGUST 1, 1916.
to you.
Discounts and the Note Tax.
For your general information it may be
Your letter was duly laid before the Board stated that there are twelve Federal Reserve
and I take pleasure in answering your questions Banks in the United States, all of which rediscount the paper of their member banks.
as follows:
Those member banks are all national banks
1. "When a merchant presents his note to
borrow upon (say for $1,000, at 7 per cent), and such State banks as may have joined the
ordinarily what discount will be taken or, what system. I have had sent to you, in addition
to the Federal Reserve Bulletin, a copy of the
amount of this $1,000 will he receive V




SEPTEMBER 1,

annual report of the Federal Reserve Board
for 1915, and regulations showing the different
kinds of notes which a member bank may send
to the Federal Reserve Bank of its district for
rediscount.
AUGUST 2,

1916.

Limitation on Rediscounts.
Your letter of July 31 asking the extent to
which a member bank may rediscount with a
Federal Reserve Bank is received.
The law places no limitation upon the
amount of commercial paper which a member
bank may rediscount with the Federal Reserve
Bank but leaves this to the judgment of the
Federal Reserve Bank.
The aggregate, however, of eligible notes
and bills bearing the signature or indorsement
of any one person, company, firm, or corporation rediscounted by a Federal Reserve Bank
for any one member bank shall at no time
exceed 10 per centum of the unimpaired capital
and surplus of such member bank, the restriction not applying to bills of exchange drawn
in good faith against actually existing values.
The law places a limit upon the amount of
eligible acceptances which may be discounted
hj a Federal Reserve Bank for a member bank
of one-half of the paid-up and unimpaired
capital stock and surplus of the member bank.
This limit on the amount of acceptances rediscounted may be increased upon application to
the Board to 100 per cent of the capital and
surplus of the member bank.
AUGUST 3,

1916.

Checks and Orders for Exchange.

Addressed to Federal Reserve Banks:
The Board has been informed that in some
of the districts a number of member banks
have induced depositors to draw checks upon
them with the clause, "Payable in exchange
at current rates" printed or stamped upon the
face of the checks.
Our counsel holds (see opinion under law
department) that checks so payable are not




457

FEDERAL RESERVE BULLETIN.

1916.

57469—-16

4

valid negotiable instruments, inasmuch as
they are not made payable in a sum certain
in money, as required by law, but are made
payable in domestic exchange. He is, therefore, of the opinion that Federal Reserve
Banks have no authority, under the law, to
charge such quasi checks to the accounts of
member banks but must accept payment in
exchange according to the terms of the check.
The common-law definition of a check is a
written order for money drawn on a bank or
banker, and of a draft, a written order drawn
by one person upon another, directing the payment of money on account of the drawer.
Section 16 of the Federal Reserve Act provides that, -"Every Federal Reserve Bank
shall receive on deposit at par from member
banks * * * checks and drafts * * *,"
but does not authorize Federal Reserve Banks
to receive for credit or for collection, orders for
exchange or other nonnegotiable instruments.
The Board therefore advises all Federal
Reserve Banks to notify their member banks
that such items can not" be received for collection or credit and that all instruments not
payable expressly and unconditionally in
money will be returned at once to the senders.
AUGUST 10,

1916.

Computing Interest on Loans.

Your letter of July 27, 1916, addressed to
the secretary of the Federal Reserve Board,
and relating to the method of computing interest on loans, has been received.
It appears that the methods of calculating
interest and discount in New York have been
standardized, due in a large measure to the
fact that the New York Stock Exchange fixed
definite standards which have been adopted by
banks and bankers and all others dealing in
securities. In the case of discounts, as well as
demand, call, and time loans, the number of
days is calculated by counting the nights intervening between the date the loan is made and
the date it is paid. Discount on notes presented by borrowers and interest on call loans

458

and time loans are all figured on a daily basis
with a 360-day table.
It would seem, therefore, that the interest
charged on the loan referred to in your letter
was computed in accordance with a wellestablished custom in New York.
AUGUST 3,

1916.

Cotton Drafts.

I wish to acknowledge receipt of your letter
of July 28, relating to the power of a national
bank to accept drafts drawn upon it in settlement of advances for cotton being accumulated
by cotton buyers for export.
Section 13 of the Federal Reserve Act provides in part—
Any member bank may accept drafts or bills
of exchange drawn upon it and growing out of




SEPTEMBER 1,1916.

FEDERAL RESERVE BULLETIN.

transactions involving the importation or exportation of goods.
This language has generally been construed
to be broad enough to justify an acceptance of
the nature described in your letter. The fact
that there is a temporary delay in the actual
shipment of the goods is immaterial. So long
as the transaction upon which the draft is based
actually involves the importation or exportation of goods, it may be accepted by a national
bank, provided, of course, it conforms in other
respects with the regulations of the Federal
Reserve Board.
In this connection, I would like to call you r
attention to an opinion filed by counsel for the
Federal Reserve Board and printed on page 276
of the September, 1915, Bulletin, which deals
with another phase of the same subject.
AUGUST 5,

1916.

SEPTEMBEB 1,1916.

FEDEKAL RESERVE BULLETIN.

459

LAW DEPARTMENT.
The following opinions of counsel have been definitely to determine the exact amount payauthorized for publication by the Board since able. (Lowe v. Bliss, 24 111., 168; Philadelthe last edition of the Bulletin:
phia Bank v. Newkirk, 2 Miles, 442; Fitzharris
Negotiability of Bills and Notes Made Payable "in v. Leggatt, 10 Mo. App., 527; Hughitt v.
Johnson, 28 Fed. Rep., 865; Read v. McNulty,
Exchange."
A bill or note made payable "in exchange" is not pay- 12 Rich. Law., 445; Carroll Co. Savings Bank
able '' in money " and is, therefore, not negotiable. Federal v. Strother, 28 S. C, 504.) There are a number
Reserve Banks can not be required to receive checks and of other cases, however, which hold that such
drafts drawn in this manner for collection or credit.
instruments are negotiable, on the ground that,
though a negotiable instrument must call for
AUGUST 10, 1916.
SIR: The opinion of this office has been re- the payment of a definite sum of money, neverquested on the question of whether or not a theless, the current rate of exchange between
bill or note made " payable in exchange at cur- two places at a particular date is usually a
rent rates" is a negotiable instrument, and matter of common commercial knowledge—itwhether or not a Federal Reserve Bank may is, at least easily ascertainable by anyone—
legally be required to receive it for collection or and, in consequence, the various parties to the
instrument can always without difficulty decredit.
An instrument to be negotiable must contain termine the exact amount necessary to dis*
an unconditional promise or order to pay a charge it.
The various text writers, such as Daniel,
sum certain in money. Negotiable instruments law, section 1, subsection 2. " Money" Randolph, Tiedeman, and Norton, agree that
in this sense has generally been construed to these are the better considered cases and that
mean whatever may be used as legal tender for the custom and convenience of merchants rethe payment of debts at the place where the quire the introduction of the element of exbill or note is payable. (Norton on Bills and change in that manner. The following cases
Notes, fourth edition, page 61.) Under the Re- hold that an instrument made payable "with
vised Statutes of the United States legal tender exchange" is negotiable: Hastings v. Thomphas been held to include United States gold coins, son, 54Minn., 184; Bradley^. Lill, 4 Biss., 473,
United States notes, Treasury notes, silver dol- Fed. Cas. 1, 783; Smith v. Kendall, 9 Mich., 242 ;
lars, and subsidiary silver coins and minor coins Leggett v. Jones, 10 Wis., 35; Morgan v. Edto a limited extent. Revised Statutes of the wards, 53 Wis., 599.
Though the cases are not in accord on this
United States, sections 3584 to 3590. (See Legal
tender cases, 12 Wall., 457; Legal tender case, particular phase of the subject, section 2, subsection 4, of the negotiable instruments law,
110 U. S., 421).
The question to be considered, therefore, is has settled further dispute in all of those States
whether a bill or note payable "in exchange7' in which it has been adopted. It is there prois a note payable in " a sum certain in money" vided that "The sum payable is a sum certain
as contemplated by the negotiable instruments within the meaning of this act, although it is
law and other statutes relating to such instru- to be paid with exchange whether at a fixed
rate or at the current rate."
ments.
The question under consideration, however,
There are many cases which hold that an instrument calling for the payment of a sum cer- is not whether a note payable in a definite
tain in money "with exchange7' is not negoti- sum of money "with exchange" is negotiable,
able, because of the fact that the fluctuations but rather whether a note payable "in exin the rate of exchange make it impossible change" is negotiable, and the courts and the




460

FEDERAL RESERVE BULLETIN.

authorities agree that in this latter case an
instrument which would otherwise be negotiable is rendered nonnegotiable if it is made
payable "in exchange." (Norton on Bills and
Notes, 4th ed., p. 63; First National Bank of
Brooklyn v. Slette, 67 Minn., 425; Chandler v.
Calvert, 87 Mo. App., 368.)
In an old case decided in 1808, Jones v.
Fales, 4 Mass., 245, the Supreme Court of
Massachusetts held that an. instrument payable in " foreign bills" was nonnegotiable.
The court construed the term "foreign bills77
to mean bills of other State banks, which at
that time varied greatly in value in different
localities, and held the instrument to be nonnegotiable. In discussing this question, the court
that by the promise the maker of the note did
not bind himself to pay cash, but something,
the value of which was to be estimated in
cash, that the note objected to is not a cash
So, also, a certificate of deposit for "checks
payable to the order" of the depositor was
held nonnegotiable in the case of First National
Bank v. Greenville National Bank, 84 Tex., 40.
The precise case of a note payable in exchange was considered in the case of First
National Bank of Brooklyn v. Slette, decided
by the Supreme Court of Minnesota, 67 Minn.
Rep., 425, where the action was based upon
the following obligation:
For value received, we promise to pay to the
order of the John Good Cordage & Machine
Company the sum of sixteen hundred and
seventy-three dollars, as follows: Payable by
New York or Chicago exchange; $560, November 15; $560, December 1; $560, December 15*
Without interest, if paid as due; if not, then
legal rate from date until paid.
The only question before the court was
whether this instrument was negotiable. The
court said:
It is absolutely essential, in order to constitute a promissory note under the law merchant,
that the promise be to pay in money. If this
instrument can be construed as an absolute
promise to pay in money $1,673, with exchange




SEPTEMBER 1,1916.

it is negotiable; otherwise, not. Hastings v.
Thompson, 54 Minn., 184, 55 N. W., 968.
The case of Bradley v. Lill (4 Biss., 473,
Fed. Cas. No. 1,783) is the only one to which
our attention has been called w^ e r e khe l an ~
guage of the instrument was similar to the one
under consideration. In the case referred to
the note was made in Chicago and was payable
at New York " i n " exchange; and it was held
that the note was negotiable upon the ground
that the promise was to pay the sum named
in the note "with" exchange, which was a
mere incident to the debt.
In the case at bar the note is not payable at
any particular place, and the promise is not
to pay a given number of dollars in money
"with"—that is, plus—the current rate of
exchange, but it is to pay the sum named in
the note by New York or Chicago exchange.
The holder of this instrument can not demand
in payment thereof $1,673 in money, plus the
cost of exchange, for the maker is not bound
to discharge his obligation except by means of
inland bills on New York or Chicago. Nor can
the maker tender in payment $1,673 in money,
with the cost of exchange, for his promise is
to make payment by inland bills, which he
must purchase in the market. The instrument, then, is not payable in money, and is
therefore not a promissory note within the law
merchant. (Easton v. Hyde, 13 Minn., 83 (90);
Jones v. Fales,-. 4 Mass., 245; Irvine v. Lowry,
14 Pet., 293; 1 Daniel, Neg. Inst., sees. 55, 56;
Tied. Com. Paper, sec. 29; 1 Rand. Com.
Paper, sec. 90.) In reaching this conclusion
we have not been unmindful of the fact that,
in commercial usage, bills of exchange are regarded as substitutes for money; but this
usage can not make them such.
This same distinction between a note payable " in " exchange and a note payable '' with "
exchange is very clearly pointed out in the
Missouri case of Chandler v. Calvert (87 Mo.
App., 368), in which the court, after stating
that there was some dispute about whether
a note payable "with exchange" is negotiable, held that there is no doubt that one
payable "in exchange" is riot a valid promissory note. The court said:
It seems to be clear that anything embodied
in the contract which renders the amount
therein to be paid uncertain ought to destroy
the negotiability of the paper, if we pay the
least attention to the definition of such com-

SEPTEMBER 1,1916.

FEDERAL RESERVE BULLETIN.

mercial security and the object and purpose of
its being brought into use. The view we here
take is supported by the weight of authority.
(Bank v. Newkirk, 2 Miles, 442; Lowe v. Bliss,
24 111., 168; Bank v. Bynum, 84 N. C, 24;
Ready v. MeNulty, 12 Rich. L., 445.)
There are cases in which a bill of exchange;
is drawn and made payable at one and the
same place'"with exchange/' where it is held
that, being drawn and made payable at one
place, there can be no exchange, and therefore
the words quoted are meaningless and should
not be regarded. (Bank v. Goode, 44 Mo. App.,
129; Hill v. Todd, 29 III, 101; ClauserV
Stone, 29 111., 114.) Those cases were decided,
not in opposition to the rule as we state it, but
in recognition of it. * * *
But in point of fact the note here in controversy does not belong to the class we have
been discussing. For this note is 7not a note
payable in money "with exchange. ' It is not
a note payable in money at all. It is "payable
in New York exchange." The provision is
wholly unlike those which we have been considering. An instrument to be a note, in the
absence of a statute, must be payable in
money. As it is the purpose of promissory
notes to represent money and to perform, so
far as possible, all its functions, it is of course
necessary that they should be payable in
money (1 Parsons Notes & B., 45) and "in
money only." Story on Prom. Notes, sec. 17.
Therefore a promise to pay a sum of money
"in bank bills or notes/' or "in foreign
bills/7 or "in current bank notes/' is not a
promissory note. Story on Prom. Notes, sec.
18. So an instrument payable "in current
funds at Pittsburg," was not payable in money
and was therefore held not negotiable. (Wright
v. Hart, 44 Pa. St., 454.) A note payable in
"Pennsylvania or New York paper currency"
was held not to be negotiable. (Leiber v. Goodrich, 5 Cowen, 186.) And so it was held of a
note payable "in Canada money." (Thompson
v. Sloan, 23 Wend., 71.) An early case in this
State, which has never been questioned, sustains the foregoing statements of the law. Farwell v. Kennett, 7 Mo., 595, where it was held
that an instrument, drawn payable "in currency," was not a bill of exchange.
New York exchange is not money; it is a
commodity, or, in other words, it is property.
And to make an instrument payable in property, a note requires the aid of a statute. We
have such a statute in this State. (R. S. 1899,
sec. 894.) In obedience to the statute the in-




461

strument in suit must be denominated a note
It is, however, not commercial paper; it is not
a negotiable note.
In the case of Bradley v. Lill (4 Biss., 473),
a bill payable "in exchange" was held to be a
negotiable instrument but in that case, however, the court construed the bill as one payable in money "with exchange," so that it is
not inconsistent with the general rule laid
down by the text writers and the various courts
to the effect that a bill or note payable "in exchange" is not payable in money, but is payable in another instrument a commodity or
property which is not money, and that it is,
therefore, not a valid negotiable instrument.
A check is generally defined as "a draft or
order upon a bank * * * for the payment
at all events of a certain sum of money * * *
payable instantly on demand," and a draft is
defined as "an order for the payment of money
drawn by one person on another." One of the
essential elements of each is that the payment
be in "money." Inasmuch, therefore, as instruments drawn payable "in exchange" fail
to comply with the requisites of a check or
draft as generally defined and as contemplated
by section 16 of the Federal Reserve Act, it is
the opinion of this office that Federal Reserve
Banks can not legally be required to receive such
instruments for collection or credit.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. W. P. G. HARDING,

Governor Federal Reserve Board.
Discount Rates.
The rafce of discount charged by a Federal Reserve Bank
should be based upon the maturity of the instrument discounted at the time it is discounted and not upon a collateral agreement by which the member bank binds itself
to repurchase before maturity.
JULY 31, 1916.

SIR: The attached ".Schedule of bills discounted/' filed by a Federal Reserve Bank,
contains 29 items of different maturities which,
it is stated, are "discounted for thirty days.1'
The 10-to-30-day rate has been granted on all

462

FEDERAL BESEBVE BULLETIN.

of these discounts, though none of them is payable, according to its terms, within 30 days
from the date it was discounted.
It is evident, therefore, that the Federal Reserve Bank; in stating that these bills are "discounted for thirty days/ 7 implies that it has
made some collateral agreement with the member bank for which they were rediscounted,
under which the member bank has agreed to
repurchase the paper at the end of 30 days.
Any such agreement is separate and distinct
from the obligation of the various parties to the
bill and can not be considered as altering the
terms of the bill. The bill itself gives the Federal Reserve Bank no right to collect on it before the date of its maturity. The fact that
the member bank may have agreed with the
Federal Reserve Bank to repurchase the paper
at the end of 30 days does not alter the date of
its maturity and does not make it eligible for
rediscount as 30-day paper.
It seems clear that the transaction is merely
an arrangement whereby the Federal Reserve
Bank is giving its member bank credit for 30
days at the 30-day rate on the contract of the
member bank to repurchase from the Federal
Reserve Bank at the end of 30 days notes which
it has rediscounted with such Federal Reserve
Bank and which in fact have a maturity of
more than 30 days. It is equivalent, in substance, to a 30-day obligation of a member bank
secured by eligible paper and, though the Fedeial Reserve Board has recommended to Congress an amendment authorizing Federal Reserve Banks to make advances to member
banks on their promissory notes secured by
eligible paper, nevertheless, the law, as it stands
at present, gives them no authority to advance
credit on such a basis.
The Federal Reserve Bank should base the
rate of discount upon the actual maturity of
the bills in question at the time they are discounted and not upon any obligation of the
member bank to repurchase them at the end
of 30 days. It should not discount 90-day
paper, or any other paper with a maturity exceeding 30 days, at the 30-day rate.




SEPTEMBER 1,1916.

Nothing in this memorandum, however, is
intended to deny the right of a Federal Reserve
Bank to make a rebate of discount in the case
of paper discounted at an authorized rate but
which is paid with the consent of the Federal
Reserve Bank before maturity. (See Informal
ruling, p. 308, October, 1915, Bulletin.)
Respectfully,
M, C. ELLIOTT, Counsel.
To Hon. CHARLES S. HAMLIN,

Governor Federal Reserve Board.
Bill of Exchange Drawn by the Drawee.
An instrument in the form of a bill of exchange drawn
by an agent of a corporation upon the corporation itself is
not a bill of exchange such as is eligible for purchase in
the open market by Federal Reserve Banks.
A U G U S T 2,

1916.

SIR: The question has been raised whether
paper in the form of a bill of exchange drawn
by a foreign agency of a corporation upon the
corporation itself is eligible for purchase in the
open market by Federal Reserve Banks.
Section 130 of the Negotiable Instruments
Law reads as follows:
Where in a bill drawer and drawee are the
* the holder may treat
same person,
the instrument, at his option, either as a bill
of exchange or a promissory note.
Though it is tru,e that this section authorizes
the holder to treat an instrument, on which
the drawer and drawee are one and the same
person, as a bill of exchange, nevertheless, the
evident purpose of section 14 indicates that it
should not be considered such by Federal
Reserve Banks. The fact that bankers' acceptances and bills of exchange of the kinds
and maturities made eligible for rediscount are
specifically referred to in that section shows
that Congress intended that promissory notes
and single-name paper should not be eligible
for purchase in the open market. Expressio
unius est exclusio alterius.
The question to be determined, therefore, is
whether paper of this character is a bill of exchange within the meaning of that term as used

SEPTEMBER 1, 1916.

in section 14 or whether it is,-"in"substance, no
more than single-name paper. The fact that
section 130 of the negotiable instruments law
provides that the holder may treat such an instrument "either as a bill of exchange or as a
promissory note" is not of itself material, because that section, in defining the rights as
between the holder and other parties to the
instrument, can not in any way affect the nature
of the instrument itself; that is, it does not and
can not make two-name paper out of an instrument on which the drawer and the drawee are
the same party. In substance such an instrument is a promissory note, single-name paper,
and no more.
The cases and the text writers generally
agree that an instrument in the form of a bill
addressed to the drawer is not a bill but is a
promissory note. (See Norton on Bills and
Notes, 4th ed., p. 82.) In the case of Fairchild
v. Ogdensburg G. & R. R. Co,, 15 N. Y., 337, an
instrument was drawn by a railroad company
upon its own treasurer and was therefore, in
effect, an order of the corporation upon itself.
The Court of Appeals of New York held that
the instrument was not a bill of exchange because of the fact that there were not the necessary two parties. The court, however, following the authority of the English courts, held
that it was a promissory note. (See Miller v.
Thompson, 3 Manning & Gr., 576.)
It would seem, therefore, that, under the decisions of the courts and text writers, a bill
drawn by the foreign agency of the drawee is
not eligible for purchase under the provisions
of section 14.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. C. S. HAMLIN,

Governor, Federal Reserve Board.
Qualified Acceptances.
A bill of exchange drawn payable "at sight" and
accepted payable in three months is a qualified or conditional acceptance, and the maker and prior indorsers are
released. The instrument in effect becomes the promissory
note of the acceptor, and would not come within the




463

FEDERAL RESERVE BULLETIN.

exception to section 5200 as a "billof exchange" drawn
in good faith against actually existing value.
JULY 25,

1916.

SIR: A memorandum raising certain questions relating to the following acceptances has
been referred to this office for an opinion:
No. 1.

WASHINGTON, D. C ,

May 25,

1916.

Ninety days after sight pay to the order of First National
Bank of Plentyville five thousand dollars ($5,000).
Receipts for 100 bales of cotton attached.
Value received, and charge to account of
DOE & DOE.
To COTTON & CO.,

St. Louis, Mo.
Accepted May 31,1916.
COTTON & COMPANY.

W M . SEED, Treas.

No. 2.

WASHINGTON, D. C;, May 25,

1916.

At sight pay to the order of First National Bank of
Plentyville five thousand dollars ($5,000).
Receipts for 100 bales of cotton attached.
Value received, and charge to account of
DOE & DOE.
TO COTTON & CO.,

St. Louis, Mo.
Payable Aug. 29.1916.
COTTON & COMPANY,

W M . SEED, Treas.

I.—Could the papers described be classed as bills o!
exchange or direct promissory notes of the acceptors?

It is obvious that the bill marked No. 1 is a
bill of exchange properly drawn and accepted,
and that it is not a promissory note.
As to No. 2, however, a different situation
arises. The bill was drawn payable " a t
sight/' and was accepted payable in three
months. The question is, therefore, whether
an acceptance to pay at a time different from
that specified in the original bill is a proper
acceptance.
The generally recognized principle is that an
acceptance must be according to the tenor of
the bill; otherwise it is a conditional acceptance
and valid only as to all parties subsequent to
the acceptance. If the acceptance, as in the
case of example No. 2, varies the offer contained in the bill as to the time of payment,

464

FEDERAL RESERVE BULLETIN.

it is a qualified acceptance. (Daniels on Negotiable Instruments, sec. 515; Norton on Bills
and Notes, p. 124.) Section 141 of the
negotiable instruments law provides that an
acceptance is qualified which is " qualified as to
time.'7 It is evident, therefore, that a bill
made payable at sight, accepted payable in
three months or at any time different from that
fixed in the body of the bill, is a qualified or
conditional acceptance, and that the maker
and prior indorsers are released. The effect
of such an acceptance is to make the bill a
promissory note of the acceptor. " I t is
enforcible between the acceptor and the
holder, notwithstanding the fact that the drawer
and indorsers are discharged77. (Norton on
Bills and Notes, pp. 122, 123.)
II.—Should such papers be classed as loans exempted
from the limit prescribed by section 5200, United States
Revised Statutes, as "bills of exchange drawn in good faith
against actually existing values?"

It is clear that No. 1 is a bill of exchange
within the meaning of the exception to section
5200 and that it should not be included in determining whether the total liabilities of any
person or corporation exceeds the limit pre-




SEPTEMBER 1,1916.

scribed by section 5200. No. 2 not being a bill
of exchange would not come within the exception " bills of exchange drawn in good faith
against actually existing values.7'
III.—In the granting of rediscount accommodation to
member banks, should the Federal Reserve Banks regard
such papers as part of the aggregate liability of a payer,
and not take for rediscount an amount of such payer's
paper exceeding 10 per cent of the capital and surplus of
the rediscounting bank?

No. 1, which is a bill of exchange drawn in
good faith against actually existing values,
should not be considered in determining the
maximum limit up to which a Federal Reserve
Bank can rediscount for its member banks.
It is specifically excepted by section 13 of the
Federal Reserve Act.
No. 2, however, not being a bill of exchange,
does not come within the exceptions set forth
in section 13, and such paper should be included in the aggregate of paper bearing the
signature and indorsement of any one person,
firm, or corporation, as provided by section 13.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. C. S. HAMLIN,

Governor, Federal Reserve Board.

SEPTEMBER 1,

465

FEDERAL RESERVE BULLETIN.

1916.

SUMMARY OF BUSINESS CONDITIONS AUG. 22, 1916.
District No. 1—
District No. 2District Np. 3—
Boston.
New York.
Philadelphia.
General business... Good and show- Good in practi- Very good
ing some signs
cally all lines.
of further expansion.
Crops:
Below normal
Fair
Improving
Conditions
Not as satisfactory Fairly promising, .....do
Outlook.
as earlier in the
excepting corn.
year.
Industries of the Busy
Sustained activity. Very busy.
district.
C o n s t r u c t i o n , Ahead of any cor- Increasing..
building, engiresponding peneering.
riod for many
years.
Foreign trade
Exports increased; ....do
i m p o r t s decreased.
Bank clearings
Money rates

Increase over last .....do
year; large decrease from last
month.
Decrease from last Easier than
month.
month ago.

Railroad, post of- Increased.
fice, and other
receipts.
Labor conditions.
Outlook..

Increasing..

Wages high and Unsettled
but
or
laboi scarce.
quieter.
Promising
Unchanged.

Remarks.

District No. 7
Chicago.
General business.. Active..

Outlook.

Slight decrease.
Stationary

Increasing..

Acute scarcity in
many lines.
Very good

Indications point
to a brisk domestic and foreign fall trade.

•i-

Crops:
Condition

Value of building
c o n s t r u ction
greater; number
somewhat less.
Increasing

Fair
.do.

Industries of the Active.......
district.
C o n s t r u c t i o n , Fairly active.
building, engineering.

Variable; prices Corn good, cotton
fair.
high.
Quite satisfactory... Good.

All prospering ..

Cotton, manufacturing,
furniture,
steel, iron, coal,
excellent; lumber
below normal.
Generally normal;
Active.
quite active in
some sections.
Shows 100 per cent
increase, chiefly
copper and other
metals, grain, cotton, and tobacco.
10 per cent decrease 28 per cent increase
from last month;
over same month
39.9 per cent inlast year.
crease over 1915.
Stationary
4 fco 6 per cent in
good supply, demand from tobacco trade developing.
Post office 3 per cent Railroads about normal; postal, 9 per
increase over last
cent increase.
month; 5 per cent
increase over last
year.
Less disturbances Well employed at
but extreme scargood wages and in
city of workers.
demand.
Satisfactory;
too
Excellent
much rain only
complaint.
Confident that present trend will last
well into 1917.

Continue; generally operate full
time.
Increasing.
Poor, no vessels.

Increasing.
Stationary.

Slight increase.

Good.
Good; dependent,
however, on outcome of crops.

District No. 12—
District No. 11San Francisco.
Dallas.
Good, considering Good.
midsummer dull-

Wheat, one-half Fair to good..
crop.
Cotton good, ex- Wheat poor..
cept in Mississippi; corn, fair.
Active
Active.

Damaged
f r o m Good; needing rain Generally good.
badly in some secdrought.
tions.
Promising.
Favorable
Less promising

Bank clearings... Increasing..
Money rates
Decreasing.
Railroad, p o s t office, and other
receipts.
Labor conditions.. Shortage of labor..

Increase
Somewhat lower.
Increase

Increasing
Steady.
Increases, i

Unsettled.

Outlook..

Fair to good

Bright....

Labor scarce and
in active demand.
Good

Remarks.

General business Drought and heat Harvest in progis in a condition
in July and
ress; y i e l d s ,
of sustained ace a r l y August
fair.
tivity.
hurt crops; retail trade was
stimulated.

Foreign trade




Fair
....do.....

District No. 10—
Kansas City.
Continues good

.....do

5

District No. 8—
District No. 5—
Richmond.
Atlanta.
Very satisfactory.... Good.

District No. 8—
District No. 9—
St. Louis.
Minneapolis.
Sustained activity Good.,

Increase..

57469—16

District No. 4Cleveland.
Good

Good condition in Active.
practically all sections.
Considerable
in- 18 per cent increase
......do
over 1915.
crease, both building and engineering.
Hampered by lack
Grain,
decrease; Shows increase
of ships.
manufactured
products, increase;
horses and mules,
increase.
Still increasing..
Increase of 8per cent. 18 per cent increase
over 1915.
No change over a Unchanged.
Firm..
month ago; steady.
Considerable gain... Railroad, increase; Increasing.
post office and
others, good increase.
Good; no signs of Unsettled.
Satisfactory.
unemployment.
Promising, except Outlook is promis- Promising.
ing for good fall
from effects of
trade.
drought.
Considering season
business on firm
basis.
Active

466

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

GENERAL BUSINESS CONDITIONS.
There is given on the preceding page a summary of business conditions in the United
States by Federal Reserve districts. The reports are furnished by the Federal Reserve
Agents, who are the chairmen of the boards of
directors for the several districts. Below are
the detailed reports as of approximately
August 23 :
DISTRICT NO. 1—BOSTON.

There are so many different and unusual
factors which all lines of business during these
days have to contend with, particularly those
pertaining to labor and the high cost of raw
material, that it is rather difficult from month
to month to notice any particularly marked
change in the more important industries of
this section. There is, it would appear, less
hesitancy to-day than, last month and buying
in fair volume is again becoming evident.
Many retailers and merchants felt a month
or two ago that conditions were abnormal and
that prices had reached too high a plane and
were cautious as to future commitments, the
general policy being to reduce stock on hand
to a minimum and to refrain from placing additional orders. With the midsummer, season
nearly over and no change in the situation
having arisen, in many lines merchants are
beginning to accept conditions and to feel a
willingness to take on new business. It is
still between seasons in some industries and
others are experiencing the usual midsummer
dullness. While, on the whole, it is felt that
business is again expanding after the past
temporary lull or digestive period, yet it is
still too early to accurately tell what the trend
of business is going to be in the fall.
Money is easier than last month, due rather
to the accumulating of money in New York
and the ease in that market, than to large
surpluses in the Boston banks. Although the
surplus reserves in Boston banks have not
increased materially, banks in some of the
other centers in this district report excess
funds and continued ease.




Call money, 3 per cent; time money, 3 | to
per cent for six months, 4^ to 4 | per cent
for a year. Town notes, 3J per cent upward;
90-day bankers' acceptances, 2f per cent upward indorsed, 2 \ per cent upward unindorsed
Loans and discounts of the Boston Clearing
House banks on August 19, 1916, show a decrease of $14,000,000 from the preceding month,
and demand deposits decreased $2,005,000 in
the same time.
The amount "due to banks77 on August 19
was $125,133,000, as compared with $129,105,000 on July 15. The excess reserve of
these banks increased from $16,680,000 on
July 15 to $30,464,000 on August 19.
Exchanges of the Boston Clearing House for
the week ending August 19 were $161,661,144,
as compared with $135,501,344 for the corresponding week last year, and $233,064,423
for the week ending July 15, 1916.
Building and engineering operations in New
England continue tot-;r"^vr"7~ a considerable increase over any corres^
ig period for many
years. From January ^ t o August 16, 1916,
these contracts amounted to $130,204,000, or
about $7,000,000 over 1912, the highest previous record for over 15 years. In 1915 contracts for the same period were $111,334,000.
Exports from the port of Boston for July,
1916, amounted to $15,549,466, as compared
with $13,315,376 for June, 1916, and $9,104,337
for July, 1915. Imports for July, 1916,
amounted to $12,478,727, a decrease of $3,584,856 from June, 1916, and $412,778 from
July, 1915.
Receipts of the Boston post office for July,
1916, show an increase of $25,000, or about 4
per cent over July, 1915, and the receipts for
the first 15 days of August were about 15 per
cent over those of last year.
Boston & Maine Railroad reports net operating income, after taxes, for June, 1916, as
$1,412,979, as compared with $1,047,194 the
corresponding month last year. New York,
New Haven & Hartford Railroad reports net

SEPTEMBER 1,1916.

FEDERAL RESERVE BULLETIN.

operating income, after taxes, for June, 1916,
as $2,130,884, as compared with $2,882,684 for
June, 1915.
Agricultural conditions, on the whole, are
not as satisfactory as they were a month ago.
The hay crop, which is the crop in this locality
upon which the farmers depend, was considerably damaged by the excessive rains of July
and early August, and while there is a possibility of a second crop of fair proportions, the
crop as a whole will probably be below normal.
In certain sections of the district reports regarding the potato crop are equally unfavorable, and rot has appeared in some localities.
All agricultural sections report a great scarcity
of labor, and the payment of higher wages for
farm labor will reduce the profit on all crops,
farm hands having been attracted to the manufacturing centers by higher wages.
The boot and shoe industry is still quiet.
Many of the larger manufacturers are sold up
nearly full on fall business, and it is not yet
time to know anything definite about the spring
demand. In this business the increased cost
of leather, uncertainty as to the future supply,
together with the high cost of labor, are important factors, and some manufacturers are at a
loss as to the prices at which they can afford to
solicit business.
Labor conditions are unsatisfactory from the
standpoint of the employer. Labor of practically all kinds is scarce, and especially is this
true of skilled labor and farm help. Farmers
near manufacturing centers have found it expedient to hire large gangs on Sundays to help
harvest their crops. Persistent reports of the
arbitrary manner in which employees are making demands and regulating their own hours are
being heard. This has made manufacturers
cautious about extending their business unduly
lest they be unable to keep or obtain enough
help to carry out their contracts. High wages
are causing much shifting of employees from
one place to another.
Dry goods merchants expect a good fall business, but, due to the unprecedented high prices
of merchandise, are buying cautiously. How-




467

ever, in this line it is felt that prevailing conditions are likely to last for some time to come,
the tendency being toward higher prices, and
wholesalers are not hesitating to contract for
their needs well in advance. Despite the summer quietness, business in some branches is
double that of 1915. Conservative merchants
feel that present conditions can not be permanent and that sooner or later an adjustment of
prices will be necessary. In the meantime less
difficulty is being found in passing the increased
costs on to the retailers and thence to the
consumer.
The higher grades of wool continue very firm,
and dealers are loath to sell except at good
prices, as it is difficult for them to replenish
their supply. Woolen mills are sold a long
way into the future, and worsted mills are also
sold well ahead, but not to so great an extent
as the woolen mills. The new light-weight
goods opening has been very satisfactory.
The recent Government estimate on the cotton crop has caused cotton to move to higher
levels. This and the increase in other production costs has been reflected in prices of fine and
fancy cotton, which have moved upward. The
mills are well sold up, and with new orders coming in more freely than for a month or two millmen have been able to add their increased cost
into the prices obtained from the distributors.
In this industry few mills are in a position to
take contracts for delivery before the first of
next year. The outlook for fall is believed to
be very encouraging. Print cloths are strong,
and manufacturers expect good business for a
long while to come.
DISTRICT NO. 2—NEW YORK.

An unusually well sustained demand for
manufactured goods and raw materials has
continued throughout the summer with but
few signs of the ordinary lull over the inventory
period and mid-year season.
The course of business has been steadier
since the reaction in commodity prices a few
months ago. Further declines in prices of
miscellaneous goods occurred last month, and

468

FEDERAL RESERVE BULLETIN.

the average price of the leading commodities
is slightly lower notwithstanding firmer markets for certain dry goods, steel products, and
heavy leather and the pronounced rise in wheat
and cotton.
The general industrial position is practically
unchanged. Textile mills in particular are
working to capacity. Shoe factories have been
very busy despite the recent increase in cost of
footwear. Jewelry manufacturers anticipate a
brisk fall trade. Wool and wool products are
in good demand. Provisions command firm
prices.
Wholesale and retail trade continues in satisfactory volume. Summer goods were well
cleared out during the extremely hot weather.
The chain stores publish figures of substantial
increases in turnover. Collections are better
and it is believed will be generally satisfactory
as the season advances.
Since a general strike was averted on New
York City traction lines, and the return to work
of the garment makers after a strike of 14
weeks duration, the labor situation is better.
More help is still needed on construction
work and in factories. One manufacturing
community feels the loss of 600 or 700 skilled
mechanics who were called to military service.
A notable volume of new buildings is reported at Bridgeport, Binghamton, and New
York City. In the latter, building permits
were issued in July for $50,526,144 against
$12,246,489 during July, 1915. A large part
of this increase is due to the filing of plans in
anticipation of new building restrictions.
Steam and electric railway earnings, and
postal receipts are increasing. The July bank
clearings in New York City were record figures
for that month. Confirmation of the great
activity and volume of business is found in the
51 per cent increase over 1915 shown by the
exchanges of all United States banks during
the seven months ended July 31.
In the first seven months of the year new
incorporations in the principal States of companies capitalized at $100,000 or more have
reached a total of $2,200,545,100, an increase




SEPTEMBER 1,1916.

of 103 per cent over the corresponding period
in 1915. Sales of stocks on the New York
exchange fell off considerably, the number
of shares in July being 8,961,586 against
13,106,100 in the preceding month and
14,070,763 in July, 1915.
Failures in New York State during July show
a reduction of 75 in number and $3,339,201 in
liabilities from July, 1915.
Figures of the foreign trade of the port of
New York show large increases. Exports from
January 1 to August 12 are 100 per cent higher
than in the corresponding period last year. A
decline in ocean freight rates is stimulating the
movement. During the fiscal year ended June
30, the largest net tonnage on record, 24,872,403
tons, cleared from American ports.
Between July 1 and August 19 New
York Clearing House bank loans declined
$67,423,000, deposits decreased $62,693,000,
and excess reserves increased $38,300,000.
Money rates have been easier since the middle of July. Commercial paper has sold up
within a range of 4 to 4J per cent, but is now
marketed at 3f to 4 per cent, with occasional
transactions in short notes at 3^ per cent.
Call money is quoted at 2 to 2\ per cent.
Rates for foreign exchange show only slight
changes in daily closing quotations.
The receipt from London of two shipments
of gold, amounting to $9,500,000, was reported
on August 15, making total receipts of
$222,750,000 since May 11.
Announcement was made on August 16 of a
new British loan arranged by American bankers. The amount is $250,000,000 on two-year
5 per cent notes against a deposit of sundry
securities for $300,000,000.
Warm weather prevailed during the greater
part of the month and greatly improved crops
which were under the average. The yield of
hay is the largest in years, while other crops
except corn are doing well. Dairying is in
prosperous condition. It is reported that
more butter was accumulated in New York
during July than ever before at that time of
year.

SEPTEMBER 1,1916.

FEDERAL RESERVE BULLETIN.

469

at about a rate of 100 per cent in value and
Commercial and industrial conditions have about 90 per cent in volume. Prices keep adshown no essential change during recent weeks, vancing, due, it is said, to merchandise shortoperations being maintained at as high a rate age and rising costs of production. Collecas the hot weather and shortage of labor and tions are reported very good and the outlook
for several months is considered favorable.
materials will permit.
Crops.—Farmers are handicapped by the
Raw materials are high and prices firm, and
some customers are inclined to defer the placing inability to get help. Reports from different
of orders for future delivery. Generally, the sections of Pennsylvania indicate that the tosituation reflects more activity than at this bacco crop this year will be one of the heaviest
usually dull period, and both manufacturers in recent years. The Department of Agriculand merchants anticipate that it will continue ture estimates the condition on August 1 of
the important crops in Delaware, New Jersey%
during the fall and winter months.
A new epoch is seen in metal-working trades and Pennsylvania as follows:
as the manufacture of war supplies increases.
The lull in placing orders has vanished and
Forecast,
Final estiCondition
1916. from
orders are now being placed more freely than
mate, 1915
Crop.
Aug. 1,
condition
1916.
Aug. 1 (000 (000 omitted).
for several months. A new and tremendously
omitted).
strong buying movement of steel has set in.
Bushels.
Bushels.
Per cent. Per cent
Carpets and rugs.—Mills are reported to be Corn
75,965
88.0
86.3
75,741
45,729;
Oats
93.3
85.3
39,468
running practically at capacity. Manufac- Winter wheat..
28,040
i 18.0
117.1
2 28,975
6,36&
117.0
116.6
3 5,975
turers still report some trouble in getting dyes, Rye
33,295,
88.6
80.0
Potatoes
35,852
4,345.
Sweet potatoes.
88.3
85.6
3,801
but the supply is becoming more plentiful Tobacco
442,390
87.0
86.0
4 50,565
5,920
Buckwheat
93.3
88.6
6,214
through the increasing manufacture of certain Apples
5 5,984
63.6
59.3
5 7,458
kinds in this country. Collections have been
* Pounds,
1 Bushel yield per acre.
2
well maintained and the outlook is reported
Forecast July 1 from condition.
& Barrels.
3 Preliminary estimate 1916.
tb be very good.
Coal.—The anthracite market continues
Failures.—Bradstreet's report shows 57 failstrong for midsummer months, and what ures in the district during the month of July,
change there is, with regard to prices, can be compared with 50 in June, 48 in May, 67 in
said to be of an upward tendency. Many April, 101 in March, 103 in February, and 96 in
companies are sold up on practically every- January.
thing. Prices of bituminous coal are also adGroceries.—The grocery business has been
vancing, being aided at many points by the very good, with collections reported as fair.
scarcity of vessels.
Because of an increase in domestic production,
Cotton yarns and goods.—Between 5 and 10 the falling off of British purchases, and the apper cent of the machines for spinning yarns are pearance of beet sugars, material reductions are
reported to be inactive, but this is considered reported in the price of sugar, and it is predicted
to be a very good showing for the month of that prices will continued to decline. A conAugust. There is a general complaint that it tinuance of the prevalent high prices of groceis hard to get spinners to accept business except ries depends, to a large extent, upon the crops,
at top prices, and some mills are so sold up and until they are harvested the present prices
that they can not make deliveries on new con- are likely to remain. The outlook is reported
tracts before the first of the year. Yarn prices good.
have advanced on the poor cotton report until . Hardware.—The usual July and August dethey are at almost record levels. Cotton goods crease in the hardware business has not matemanufacturers report business to be running rialized this year at all, and there is an unDISTRICT NO. 3—PHILADELPHIA.




470

FEDERAL RESERVE BULLETIN.

precedented demand for hardware of all kinds.
It is anticipated that later there will be a scarcity of goods. Considering conditions, prices
are not high but are firm. Collections are
fairly good. The hardware business as a whole
is now of greater volume than ever before, and
the outlook is unusually good for its continuing
throughout this year and into 1917.
Hosiery and underwear.—The dyestuffs situation is much easier, but as raw materials are
sold up for some time, no break is likely in the
high prices for some months at least.
Iron and steel.—The very heavy foreign demand for shell steel has been the feature of the
new buying movement. This, coupled with a
decrease in the output because of the hot weather
has made prices stiffen. For general domestic
business, there is a slackening of inquiry because
of high prices. Heavy contracts for ship plates
have been closed on domestic and foreign account for delivery in six and nine months and a
stronger tone prevails for all kinds of steel products. One result of the heavy buying is to
awaken greater interest among some domestic
consumers who were inclined to defer purchasing. The demand for barbed wire for extensive
use on the battle fields has caused an advance in
the price of wire and wire products. Jobbers
being cleared of structural goods, the railroads
active in the purchasing of equipment, and the
United States Government planning for a larger
Navy, are some of the causes of the renewed impetus given to this industry.
Leather, belting and shoes.—Tanners generally
are sold a long way ahead and have little to
.offer the occasional customer. The morocco
manufacturers report that they can not secure
enough tanners to run their plants full, but this
is not so with the heavy leather manufacturers.
The glazed-kid business shows no new features;
prices are firm and unchanged, though advances
in view of the labor and raw material conditions are being predicted. The belting manufacturers are all busy. As far as the present
and prospective shoe trade is concerned it was
never better, the manufacturers having all they
can attend to, and judging from the orders on
hand, will have a big season.




SEPTEMBER 1,1916.

Linoleum.—Linoleum prices for the fall season have been advanced approximately 5 per
cent. The interference with burlap shipments
from Scotland and the high cost of ocean freights
enter largely into the conditions upon which the
advance in price is based.
Lumber and building.—The aggregate value
of buildings under course of construction is
greater than for some time past, though operations are less than last year. The high cost of
materials and labor and the difficulty in securing skilled mechanics have a tendency to hold
back some proposed improvements. Lumber
sales, however, are larger, with prices of soft
woods slightly higher, and a number of good
contracts have been placed in the cement
market.
Merchandise shipments.—The value of merchandise shipped through the port of Philadelphia during July approximated $23,000,000,
an increase of nearly $15,000,000 over the same
month of 1915. The value of the imports for
the same month was about $9,000,000, an increase of almost $3,000,000 over July of last
year.
Railroads.—Railroad shops are reported to
be exceedingly busy. The loaded car movement over Pennsylvania Railroad lines east of
Pittsburgh for the first 21 days of August increased 7.6 per cent over the same period last
year. Eastbound coke increased 32.3 per
cent, and miscellaneous westbound freight increased 15.8 per cent. There was a decrease
of 12.6 per cent in eastbound empty cars and
an increase of 17 per cent in westbound empty
cars.
Retail trade.—As' August is the height of the
vacation season, local retail stores are not so
busy.
Silk.—Silks are scarce and in demand.
Orders are being freely placed with jobbers
and in the manufacturing end there is a quiet
undertone of confidence for the remainder of
the year and early spring.
Woolen yarns and goods.—August is invariably a quiet month in the wool market;
business activity, however, is increasing and
the high prices are being maintained. Dealers

SEPTEMBER 1,19.16.

FEDERAL RESERVE BULLETIN.

471

clearing house, adding $11,764,940,24 to the
totals for the period.
In one or two centers of the district there
has been rather a brisk demand for funds. As
a rule, however, money is reported easy all over
the district. Dealers in securities report no
recession in the market but observe a strong
tendency toward the higher grade investments.
In the iron and steel trade, the principal
changes that have occurred since last month7 s
report have been in the line of higher values
and increasing pressure for deliveries. Plates^
shapes, and bars have had an advance of $2
per ton. Mills are congested, and, notwithstanding the unfilled tonnage report of the
steel corporation for July, showing a decline
over June, there never has been a time in the
history of the steel business when mills have
been sold so far ahead with as much prospect
for additional business.
The electrical business is still going along at
top speed, with delays in deliveries due to difficulty in receiving raw materials, even though
premiums are offered.
DISTRICT NO. 4—CLEVELAND.
The factories engaged in making automobile
Changes respecting business and agricultural
parts report the raw material situation very
conditions in district No. 4, in so far as being
difficult to overcome, as it is almost impossible
significant, are few compared with 30 days ago.
to get deliveries, regardless of price.
The financial situation and money rates are
Pig iron sales for the past month and a half
unchanged. A large volume of business is
have been very light, but recently a number of
being handled by the banks. Clearings in the
large sales have been made at only slight consix largest cities of the district show a decrease
cessions from former prices.
from the corresponding period last month of
The coal business is in a peculiar position.
10 per cent, but show arf* increase of 39.9 per
The companies have plenty of orders at a fair
oent over the same period last year, as shown
price, collections are good, but there is a serious
in the following table:
shortage of labor and a car shortage also on
some roads. Prices seem to be strengthening
Percentage
Aug. 1-15,
Aug. 1-15,
Increase. of increase.
1916.
1915.
and the demand continues.
Glass and diversified industries are preparing
22.8
Cincinnati
$64,704,500 $52,651,350 $12,053,150
68.1 for an active fall and winter season.
Cleveland
59,446,340
40,541,440
99,987,780
Four
47.7
Columbus
14,422,200
6,880,100
21,302,300
29.5 thousand men employed in bottle and glass
Pittsburgh
125,693,094
96,999,307
28,693,787
46.7
18,275,111
12,449,647
5,825,464
Toledo
4,701,448
52.5 factories in the Pittsburgh district get an ad3,081,784
1,619,664
Youngstown..
Total..
334,664,233 239,050,628
95,613,605
vance in wages with the resumption of operations of factories next month.
The notable increase in the clearings for the In the pottery business all factories are runcity of Cleveland is caused in part by the en- ning to capacity and receiving better prices
trance of the Federal Reserve Bank into the than ever before in their historv.

still complain of scarcity of wool, due to a certain extent to the embargo placed upon
Australian wool. Spinners and yarn manufacturers are reported to be very busy, with
mills running as near capacity as the supply
of labor will permit. Manufacturers, importers, and jobbers of woolens, worsted, and
felt goods report that conditions are very
good, and they look forward to a large fall
business. Collections are reported to have
been fair or better. Retailers are fairly well
stocked up, but not overstocked. Manufacturers and wholesalers, therefore, consider the
outlook to be good, the only drawback being
the rising prices, which prompt extreme care
in the buying of raw materials.
Money.—The flurry in money rates a month
ago has subsided, although time money has
not reacted to its former very low level. Commercial demand for money is apparently quite
strong, and many banks are well loaned up.
The rates show a tendency to remain stationery.
Clearings are not so large as a month ago.




472

FEDERAL RESERVE BULLETIN.

The rubber industry, centered in Akron, is
still booming, with no abatement in sight. Although running three shifts a day they are not
able to supply the demand. Four of the largest
plants are building extensive additions in anticipation of a steadily increasing demand until
1919. Sixty per cent of the rubber goods sold
in the United States is produced in this district, and the average daily sales in Akron are
$600,000, the demand for automobile tires being 55 per cent greater than a year ago.
Suburban train traffic is normal. Through
and excursion travel is 10 per cent better than
normal. Loads billed in this district on all of
the principal trunk lines show 36.7 per cent increase over July, 1915, but a decrease of 7.5
per cent for the previous month.
The greatest problem of all manufacturers
in the district is the problem of labor. Some
are experimenting with negro laborers, who are
being brought here in considerable numbers
from the South.
Collections are reported good, and little evidence of any distress is found. Many who a
month or two ago were rather uncertain of the
future now speak quite confidently.
Post-office receipts show an increase of 8.4
per cent over July, 1915, and a 8.8 per cent
decrease over June, 1916. Table of post-office
receipts follows:

SEPTEMBER 1,1916.

than in June, 1916, but the total valuation
shows a substantial increase, as indicated in the
following tables:
Permits
issued.
July,
1916!

July
1915

Valuations.
July,
1915.

July
1916.

PerIncrease centage
or
increase
decrease. or decrease.

Cincinnati
1,454 1,543 $786,350 $1,275,100 488,750
Cleveland
1,228 1,254 3,397,660 2,319,280 1,078,380
59,000
240 563,085
504,085
Columbus
268
388 966,296 1,186,632 1220,336
Pittsburgh.....
360
31,480
234 565,492
534,012
Toledo..
330
92 274;800
Youngstown...
93
147,650 127,150
Total

. . . . 3,733

3,751 6,553,683

Permits, year
endingJuly
31,
1916.
Cincinnati.. .16,185
Cleveland.. . 13,472
Columbus.. . 3,093
Pittsburgh. . 3,880
. 3,799
Toledo
Youngs1,186
town
Total

July
31,
1915.

5,966,759

Valuations, year
endingJuly 31,
1916.

July 31,
1915.

586,924

41,615 38,693

9.8

PerIncrease centage
increase
or
decrease. or decrease.

15,080 $13,141,524 $9,683,446 $3,458,078
13,600 29,307,656 29,885,669 1578,013
2,549 6,662,500 6,161,300
501,200
3,805 15,647,809 13,728,472 1,919,337
2,615 8,907,695 6,236,181 2,671,514
1,044

138.3
46.4
11.7
U8.5
5.8
84.7

35.7
il.9
8.1
13.9
42.8

2,412,740

632,474

26.2

76,712,398 68,107,808

8,604,590

12.6

3,045,214

i Decrease.

Manufacturers of women's wear report an
unprecedented trade. The effect of the strike
settlement in New York has not yet retarded
the greatly increased business in this district.
Orders for knit goods are in such volume that
deliveries during the season in many cases will
Percentage be impossible.
July, 1916. July, 1915. Increase or increase or
decrease.
Agricultural conditions are not so good as
decrease.
last month. The drought hurt corn, and late
$3,000
1.3 potatoes are a failure.
$ ,
Cincinnati..
$221,338
21,315
7.5
283,434
Cleveland...
304,719
14,338
16.9
84,742
Columbus...
99,080
The drought has been broken in most locali34,326
12.1
Pittsburgh..
316.245
281,919
4,655
6.0
81,644
76,989
Toledo
3,771
16.8 ties, but there are some few parts of the district
26,204
22,433
Youngstown
8.4 that have not as yet been favored with showers.
81,405
1,049,260
Total
967,855
The burley tobacco crop is more than satisfactory in quantity and quality.
Mercantile lines, both wholesale and retail,
DISTRICT NO. 5—RICHMOND.
are gaming in comparative reports.
Land prices are probably the highest known
General business is much above the average,
in the district, with a few exceptions, but there reports on conditions are cheerful, and the outis no unusual volume of business being trans- look for the future regarded at least with comacted. Real estate people report a fair de- placency.
mand for moderate-priced homes. Three hunStorm damage referred to in the last report
dred less building permits were issued in July throughout the Piedmont sections, particu-




SEPTEMBER 1,1916.

FEDERAL RESERVE BULLETIN.

larly of North and South Carolina, was serious,
and the railroads in particular have been slow
in recovering, both as to damage to their lines,
and as to restoring their service to the public*
A similar catastrophe resulting from a cloudburst in West Virginia has wrought great havoc
in Cabin Creek, the damage to the Chesapeake
& Ohio Railroad and private properties being
estimated at several millions of dollars. Continued excessive rainfall is reported throughout
the district, very generally resulting in continued crop damage in considerable portions
of the territory.
The reports from the trucking sections where
the large volume of shipments has culminated
have been very satisfactory. Shipments of
cantaloupes and other fruits have yielded satisfactory returns. Potato shipments from the
Norfolk sections are estimated to have reached
1,250,000 barrels, and while prices declined to
a minimum of $1.50 per barrel, they averaged
probably $2.50 per barrel, and much of the
crop sold considerably above this. Southern
sweet potatoes are going into the market at
$3.50 to $4.50 per barrel.
Special attention has been drawn to one feature connected with the potato crop. This is
a demonstration that this district can grow
potatoes and also other vegetables without
potash, other than such as can be obtained
from cottonseed and other fertilizers produced
in this country. This gives promise of emancipation from potash for which this section has
been depending chiefly on Germany and Chile.
Farmers have been spending millions for potash
and it is now gratifying to learn that fruits and
vegetables can be successfully raised regardless
of whether or not we have potash.
One railroad line in this district has sent out
a special car carrying an agricultural exhibit
of the products of this section, to visit a number
of State fairs in the North and Northwest.
This is a part of a campaign of education to
bring before other sections the advantages and
agricultural possibilities of this district.
Building is reported dull in some sections,
but there are apparently indications of improve-




473

ment. Reports from the lumber trade generally are not satisfactory, but box manufacturers are finding difficulty in keeping up with
their orders. Operators in creosoted material
report that business has been particularly good.
North Carolina reports considerable activitj^ in
municipal and county improvements such as
roads, bridges, public buildings, and additions
to manufacturing plants, as well as the construction of some new ones. This possibly
grows out of the recent flood damage and
probable restoration.
Some indifference is shown toward taking
on new coal business owing to the fact that operators are full of orders or contracts. There
is some shortage in labor and also a shortage in
car supplies. Dumpings are lighter for July
than June. Most of the decrease in the shipments over the Chesapeake & Ohio and Virginian, and particularly the Norfolk & Western,
being due to floods and washouts.
Prices have advanced about 50 cents per ton
and are likely to add another 50 cents increase.
There is a demand for South American port
shipments, particularly the Argentine Republic.
This demand is stimulated by the release by
the British Admiralty of tonnage for the import of grain and, food stuffs to the United
Kingdom. These steamers are available for
coal cargoes for the outward trip in preference
to ballast, and this has materially reduced
freights to these points. These conditions reported from the ports are confirmed by advices
from the interior, where the demand is said to
be greater than that for last year, shipments
limited by railroad damage and car shortage,
with prices showing a hardening tendency.
Corn crop conditions are spotted, and on the
whole considerably below the average, but the
crop does not appear to have suffered as seriously from the excessive rains as has cotton.
In the southern portion of this district there
have been severe floods with complete destruction of crops in the low lands and on some of
the watersheds, but the corn crop as a whole,
except on some of these very low lands, has
not been so seriously affected. In some sec-

474

FEDERAL RESERVE BULLETIN".

tions, where it has been possible to cultivate
it, it is said to be the best in several years. In
some sections corn and peas have been sown
for ensilage for next winter.
Cotton is reported to have suffered generally
from excessive moisture and reports from most
sections estimate the yield at not more than
50 or 60 per cent of a fair crop. This has resulted in a very considerable advance in prices^
which it is anticipated will make up to a very
considerable extent for the shortage in volume.
There is a possibility of some improvement
depending on future weather.
Reports from manufacturers indicate conditions as abnormally good. Orders are abundant, the demand for domestic yarns extending
through the whole range of variety is excellent,
both for prompt shipment and extending well
into next year.
The demand for automobile tire fabrics is
particularly strong.
There is some complaint of the scarcity of
labor, and particularly of dyestuffs. Plants
generally, however, are not only reported in full
operation, but many are operating at night,
employing double shifts. The industry is enjoying probably the greatest prosperity it has
ever experienced.
Exports for July show an increase of over
100 per cent, this increase being chiefly at
Baltimore, in shipments of cotton, tobacco,
grain, especially in copper and other metals.
The recent appropriation by Congress of
$75,000,000 for good roads, to be expended
during the next five years, has stimulated the
movement already under way along this line.
Of the $5,000,000 available for the year ending
July, 1917, this district will be entitled to
$333,000 on condition that a similar amount
is contributed by the States and counties.
Jobbing in general lines is reported as good,
and conditions on the whole in the district are
satisfactory. Merchants are reported to have
been conservative, looking closely after collections, and results have been satisfactory.
There has been some destruction owing to
flood conditions, but losses are thought to
have been considerably exaggerated.




SEPTEMBER 1,1916.

This district is thought to have only a moderate volume of war orders and therefore not
likely to feel a reaction as keenly as some
other sections.
Labor is well employed, there being no
question of work, but rather difficulty in
securing a sufficiency of labor. Many plants
are running overtime to keep up with orders.
In the coal regions there is a strong demand
for miners at almost all of the mines. There
have been some voluntary increases in wages.
Operatives seem to be satisfied and no labor
troubles of any sort are reported, the whole
situation being regarded as better than it has
been for several years. A South Carolina
statute, which on January 1, 1917, raises the
age limit of child labor, is expected to effect a
further elimination of child labor in that State.
Some slackening of demand for machinery
and metals is reported from the New England
market but most of the operators seem to
have all the business they can take. The
demand for mining and quarrying machinery
is reported good, several fairly good contracts
have been let by the railroad companies for
extension of lines, and railroad contractors
are in the market for equipment. Business
in this particular line is said to be better than
it has been for several years past.
There has been some demand for rediscounts from the smaller banks, but the banks
in the larger cities and towns while reporting
business as improving and good, have been
able to supply the needs of their customers.
There seems to be no apprehension about
being able to extend to planters during the harvest season all of the assistance which they may
need. Large engagements for the tobacco trade
have been made for the next 30 or 50 days.
Deposits are reported as reaching the highwater mark and loans approaching that limit,
making very satisfactory business.
Railway earnings so far reported seem to be
holding their own, although they have been
affected by the recent flood damage.
Reports from the 12 clearing houses in the
district show an increase of 28 per cent over
the corresponding figures for 1915.

SEPTEMBER 1,

1916.

FEDERAL RESERVE BULLETIN.

475

grapefruit belt, with a slightly smaller yield in
lemons, limes, and kumquats than last season.
Tobacco.—Prospects for a fine crop are very
bright and an excellent demand is expected,
providing shipping arrangements to foreign
countries can be obtained. The quality is
good and the crop slightly above the average.
Coal.—There is still a depressed condition in
the coal market. This is especially true of
steam coal largely shipped to the bunker trade
of the ports of New Orleans and Mobile. While
there has been a slight increase in price, of
about 10 per cent, this is hardly sufficient to
cover the increase given the miners and other
laborers.
Phosphate.—The production is not more than
30 per cent of what it was three years ago, and
this is especially true of mining and exporting
for European markets. The export trade has
been practically at a standstill for two years,
DISTRICT NO. 6—ATLANTA.
due to inability to secure bottoms for export
Although future prospects in this district are trade. The grinding of phosphate for domestic
largely dependent upon the development of consumption and use as a fertilizer is more encrops, August has been a prosperous month couraging, the volume of business being deconsidering the usual midsummer dullness, and cidedly better than last year. Bookings for
there has been no marked cessation of the gen- fall delivery indicate a better season. This
eral business activity.
being out of season, plants are not running
Cotton.—While there is a disposition to take full time.
a better view of the cotton crop prospects, the
Zinc.—On account of special conditions obrains following the July storms have prevented taining in the zinc metal market, Tennessee
the crops from recovering lost ground. The producers report business above normal and
fields are grassy, and though some improve- prevailing prices high. Plants are running to
ment is shown in northern Alabama, Georgia, full capacity, with scarcity of labor.
and Mississippi, in the southern part of the
Iron and steel.—With present doubts as to
district the boll weevil is causing material dam- cost of raw materials there has been a slowing
age and while the plant is good, there is little down in these lines, though the manufacturers
fruit. In Tennessee the crop is very good and have only a limited tonnage to soil for the refruiting well and reports are very favorable.
mainder of 1916. The mills are operating on
Corn.—Excessive rains have greatly dam- an increase of about 25 per cent over this time
aged corn in the bottom lands. The crop in last year. Labor conditions are satisfactory,
the uplands is in excellent condition and in view with prices about $3.50 per ton more than last
of the increased acreage a normal crop is ex- season. Some difficulty is experienced in getpected. A number of sections report the plant- ting bottoms for foreign shipment.
ing of quick maturing crops, such as beans and
Lumber.—July business shows an increase
potatoes, to take the place of corn and cotton over previous months, but conditions are
destroyed.
hardly normal. Prevailing prices are someCitrus fruit.—Early indications point to a 20 what higher, but are low as compared with the
per cent decrease in the yield of the orange and cost of the product and its actual value as a

Postal receipts from the centers in the district indicate an increase of nearly 9 per cent
over the corresponding month for last year.
The tobacco crop is reported to be short in
some sections and generally below the average,
but high prices for the new crop are indicated
which gives general satisfaction and fully
makes up for the shortage in volume. Tobacco jobbers report business as very satisfactory.
Business in wagons and buggies has been
reported as poor during the past two years,
but indications point to improvement. Profits
have been meager owing to the high cost of
materials without a corresponding advance in
the completed product. The outlook for fall
business is reported as good, and the high
prices for tobacco and cotton are looked to as
governing factors in the situation.




476

FEDERAL EESERVE BULLETIN.

building material. Car shortages are reported
in some sections.
Brick.—Conditions are not normal. In the
fire-brick line there has been, possibly, a 25 per
cent increase in volume of business in the past
30 days, and, as compared with the same period
last years, shows an improvement of about 40
per cent. In building brick there has been
some increase in volume and prices, due to
damage from storms and delays of some manufacturers. Labor conditions are not entirely
satisfactory. The general outlook is more encouraging than at any time since 1912.
Marine construction.—The volume of business is better than usual. Prices are above
normal, with common labor satisfactory. Some
difficulty is experienced in obtaining skilled
mechanics. A number of plants contemplate
improvements and additions. Sail makers and
riggers are working overtime, showing an increase of 50 per cent over conditions of previous year.
Building and contracting.—The volume of
business is normal for this season of the year,
showing considerable increase in the past 30
days. Prices of labor and materials are increasing. Bridge building, while not normal,
shows considerable increase during the past
month.
Iron works and hardware.—Conditions are
above normal, with high prices prevailing and
labor conditions satisfactory. Raw materials
are correspondingly high, affecting the margin
of profit. Wholesalers and jobbers report hardware business above normal and 50 per cent
above what it was this time last year. Prevailing prices are exceptionally high and little
prospects of an early decline.
Naval stores.—In view of the fact that naval
stores are contraband of wai1, the business is
considered satisfactory, and the movement
shows an increase over that of 1915. Estimates
are that from 10 to 15 per cent more naval
stores will be produced for this season, which
ends April 1, 1917, as compared with previous
12 months. Prevailing prices for spirits of turpentine are fair, when increase in crop is taken




SEPTEMBER 1,1916..

into consideration. .Current values for rosin,,
especially lower grades, are practically double
what they were one year ago, the statistical
position having improved materially, the surplus which was in sight at the beginning of the
war having been worked off and the supply
between the producer and the ultimate consumer perhaps a little below normal. Labor
conditions in the main are satisfactory.
Chemicals.—Fertilizer manufacturing is dormant at this season of the year. Due to increased cost of materials entering into the
manufacture, prices are 50 per cent higher than
in 1915. Nearly all these plants engage in the
manufacture of sulphuric acid, almost the entire output being shipped east. The volume
in this line is below that of the early spring
months, probably 40 per cent of what it was
during the months from November to April,
due to cessation in orders from munition
manufacturers.
Cotton mills.—Continue to operate to full
capacity and show increase of 40 to 50 per
cent in volume of business over the same month
of previous year. There is no cessation in the
demand for the product, which is better than
for several years, and mills have orders booked
running well into 1917, with prices showing
substantial profit. A number of mills are
making improvements and additions to their
plants.
Cotton-oil mills.—Business in this line will become active during the first part of September,
but a large volume of business is not looked
for by reason of shortage in cotton crop and
consequent short supply of seed. This will
mean competition among the mills for raw material to crush a maximum tonnage. While
the present outlook indicates good prices for
finished products, the questions whether the
manufacturer will be enabled to pay excessive
prices for raw material is dependable upon the
shipment of finished products to European
markets.
Flour mills.—The prevailing prices of both
flour and wheat are high, due to short crop of
wheat, and while the selling market is off in

SEPTEMBER 1,1916.

FEDERAL RESERVE BULLETIN.

477

The New Orleans branch of the Federal
flour, the volume of business in dollars and
cents is larger than last year on account of Reserve Bank of Atlanta reports as follows:
Although practically no coffee is being hanhigh prices. Though some plants are not
running full time, others are operating night dled—-due, it is said, to the British blacklist
and day as is customary for several months against certain dealers—the imports were
after harvest. The jobbers have bought con- above those of same period last year. Exports
siderably less amount of flour than former are the largest ever known.
Indications are that the growing crops of
years hoping for reaction in the market.
Printers and engravers.—The volume of busi- cane, corn, and rice will show an abundant
ness is normal for this season of the year, with yield, but that of cotton is only fair; in fact,
slight percentage of increase over last year. from all our sources of information the invariPrices are high and labor conditions satis- able comment is that the crop is below normal.
The lumber market is showing some improvefactory.
Sirup manufacturers.—Slight increase over ment both in volume and price. Live stock is
last year, with expectations for larger increase in good demand, and Louisiana and Mississippi
in view of larger cane crop this year. This farmers continue to develop this industry.
year's crop is expected to be normal as compared with 40 per cent decrease last year. On DISTRICT NO. 7—CHICAGO.
account of scarcity of sirup at this time and
Excessive heat has been an important factor
high price of sugar, prices of sirup will show during the past month and its deterrent effect
increase.
is evident. Crops have suffered and some indusFurniture.—-The volume of business is greater tries have necessarily curtailed their operations.
than for two years past. Prices are higher Banking opinion as to conditions varies, with
than for several years, with margin of profit banks in agricultural sections somewhat unless, as prices have not advanced in proportion certain and those in manufacturing centers
to raw materials. Labor conditions are gen- quietly hopeful. Rates have shown a downerally satisfactory, with exception of scarcity ward trend since last report and are about oneof cabinetmakers, due to high wages paid by half of 1 per cent lower. Money seems to be
in generous supply, and in but few localities is
automobile factories.
Dry goods and notions.—Conditions normal the demand sufficient.to meet the approval of
for this season of year and wholesalers and the banks. Labor continues well employed.
jobbers report increase of about 25 per cent- A car shortage is reported by some industries,
over same period last year. Prices are high. and mercantile houses appear to be actively
Hosiery.—The volume of business is very engaged.
much above normal and manufacturers are
Fall business, to a large extent, depends
refusing orders on account of inability to make upon the results of the crops, and in this disdeliveries. Orders are booked well into the trict, when the prices are considered, the farmspring of 1917. Prices are high. In the Ten- ers should receive a satisfactory return, since
nessee plants labor hours are limited by law the damage, taking the district as a whole, does
and there is not sufficient labor at hand to not appear to be great enough to offset the inoperate day and night shifts. Some mills re- creased market value of the products.
Bond houses are finding business quiet, inport contemplated extensions of operations
vestors are in many instances away from the
withheld on account of labor conditions.
Shoes.—The volume of business is not quite centers, and no activity is anticipated for sevup to normal, though the year just closed eral weeks. Foreign collateral issues are said
showed a great improvement. Labor condi- to be meeting with better favor in this territory than the external unsecured loans, and
tions are satisfactory.




478

FEDERAL RESERVE BULLETIN.

bond purchasers seem to demand a higher rate
of interest than formerly.
Crops in this district are fair, but the conditions are not considered as favorable as at the
time of our last report. The authorities, in
great part, are still hopeful of a satisfactory
yield or one which at current prices should
assure a prosperous year. Hay has proven a
bumper crop. Illinois, with only a fair volume
of wheat, if given favoring weather, should produce a satisfactory quantity of corn and oats.
Indiana seems to have a generally good outlook for corn, although rain is required in some
localities.
The wheat crop will be considerably less
than last year, and oats are only fair. Truck
and potatoes have improved recently. Iowa
reports indicate a good quantity of corn, a
fair volume of oats, and a decreased supply of
wheat. Hay is normal or better. It is said
that many cooperative creameries are being
established. Michigan, particularly the southern part, has suffered from lack of rain, and
the corn and oats are reported considerably
damaged, as is also the case with potatoes.
Late fruits are said to be promising. Wisconsin has harvested its small grain, with generally
favorable expectations. The corn has been
benefited by rains and seems to have good prospects. Hay is in good quantity, oats are reported fair, and tobacco as doing well. Only a
fair potato crop is anticipated.
Agricultural implements.—Conditions in this
line are not as favorable as a month ago, due
to the reported crop damage and the high price
of raw material. A smaller business than in
1915 seems probable. Repair parts for heavy
farm machinery are still reported in good demand. Collections are said to be good.
Automobiles.—Production in this line has
not kept up with the demand, and manufacturers consider the outlook for the remainder
of the year most excellent. Collections are
good.
Building materials.—Brick companies are
said to be enjoying a considerably increased
business as compared with last year, although




SEPTEMBER 1,1916.

July was somewhat behind June. Cement
manufacturers are suffering from car shortage
and difficulty in securing labor. Contracts are
reported held up owing to the inability of contractors to secure the necessary help. There
is some seasonal activity in the line and collections are considered good.
Coal.—A car shortage which may becomemore acute is affecting this industry, but prices
are fair and prospects for the fall are generally
hopeful. There was some spasmodic purchasing in anticipation of the railroad strike, but
this was not heavy.
Distilling and brewing.—This is the quiet
season with the distillers. Business is reported
good—in fact, better than during the past two
years. The whisky business is in better shape
to-day as to stocks, consumption, and values
than at any time in the past 10 years. Breweries have enjoyed a nice volume during thepast month.
Dry goods.—Sales are said to show a good increase over last year, and there is a feeling that
firm prices may continue not only during the
war abroad but for some time after its close.
This is based upon the supposed shortage of
cotton and wool with some of the foreign powers, the necessity of replenishing these raw
stocks, and also buying finished textiles until
their mills can be rehabilitated. Domestic cotton goods are strong, and there is a scarcity in
the ready-to-wear line and hosiery. Stocks
of merchandise appear to be healthy, and a prosperous trade during the coming months is quite
generally anticipated.
Furniture.—This line reports a satisfactory
condition and good outlook. Collections are
fair.
Grain markets.—Wheat has shown great activity since last month; and with prospects for
a short crop, the price advanced rapidly. One
authority suggests the danger of selling too
large a quantity for export, which might cause
a shortage here, based on this country's requirements. The farming element will receive
its profit principally from the prices. In the
Southwest some farmers are holding their grain

SEPTEMBER 1,1916.

FEDERAL RESERVE BULLETIN.

479

Steel.—Mills are booked for some months to
for higher prices. Corn and oats both show
come and prices are firm. We understand that
firm values.
Groceries.—Wholesalers appear thoroughly new business is coming in somewhat slower, but
satisfied with both conditions and prospects, collections are good and general conditions
although collections are slow in spots. In a satisfactory.
Watches and jewelry.—The year is proving a
few localities decreased sales are reported, with
a considerable falling off in sugar. Peas and prosperous one for watch manufacturers, and
beans may reach higher prices, owing to the manufacturing jewelers are reported running
full time. There is a lack of skilled labor. Rehot weather during July and August.
Hardware.—Demand is reported good, con- tail business is satisfactory, prospects good, and
sidering the season, with no weakening in quo- collections prompt.
tations. Prospects continue satisfactory for
Wool and woolens.—The wool market is in
slightly better condition than at the time of
the balance of the year.
Leather.—Conditions in this line have been our last report. Mills have been steady consomewhat quiet, but prices have been well sumers and are said to be showing interest in
maintained. Stocks of leather are reported supplies held by dealers. Volume, however, is
smaller than last year, and considerable activ- not large, but prices are well maintained, and
ity is in prospect during September. One no decline is expected. The woolen-goods
authority anticipates a heavy demand from business shows an increase in spite of the diffiEngland during the balance of the year. Col- culty in procuring dyes and the high cost of raw
lections are satisfactory. Leather belting is material. There is some increase in plant caselling in good volume, with raw material at pacity reported. An accumulation of woolens
is said to be in the hands of wholesalers who
high prices. Collections slow in spots.
Live stock.—Cattle, hogs, and sheep are in covered too heavily, but retailers, according to
demand at fancy figures, and, for this reason, the same authority, are understocked. The
some are being prematurely marketed, also be- tariff question is again commented on and procause of drought conditions. Packers are en- tection after the war considered a necessity.
joying a good business through both foreign General business is good.
Clearings in Chicago for the first 16 business
and domestic buying. Prices are well maintained in all lines of provisions, and live stock days of August were $1,021,323,000, being
coming to Chicago is reported in excellent $237,486,000 more than the corresponding 16
business days of August, 1915. Clearings recondition.
Lumber.—Retail business is improving ported by 22 cities in the district outside of Chislightly, but the buying of railroads and car cago amounted to $244,672,000 for the first 15
companies is about the same as formerly. days of August, 1916, as compared with $182,Volume is not quite up to 1915, and shipments 777,000* for the first 15 days of August, 1915.
are delayed through car shortages. Collections Deposits in the eight central reserve city memare generally satisfactory. Country dealers are ber banks in Chicago were $661,000,000 at/the
holding back and mills are curtailing to some close of business August 19,1916, and loans were
$449,000,000. Deposits show an increase of apextent.
Mail order.—Volume still shows an increase, proximately $47,000,000 and loans an increase
with a slight decline in grocery sales. Other of approximately $21,000,000.
articles are in demand and active, and satisfacDISTRICT NO. 8—ST. LOUIS.
tory conditions exist in this line.
Distribution of merchandise, both wholesale
Pianos.—Raw material is at high prices and
labor is scarce, yet consumers are taking pianos and retail, remains at a high level throughout
in good quantity, and prospects are favorable the entire district. Sales and collections continue satisfactory, and increases are generally
for a prosperous year.




480

FEDERAL EESERVE BULLETIN.

SEPTEMBER 1,

1916.

reported. The outlook for fall business in all
A month ago labor conditions in this district
lines seems to be entirely favorable.
were believed to be satisfactory. Since that
The fall buying season in this district starts time the unrest so noticeable in the eastern
in August, and the number of retail merchants sections of the country seems to have spread
from the Southwest in the market at this writ- to this district. Local strikes have become
ing seems to be unusually large. The out- more frequent, and the situation can not be
standing feature of the spring and early summer said to be without its problems.
months of the year was the heavy orders for
The number of failures in the district have
both immediate and future delivery, and in some decreased with some regularity month by
quarters it was expected that this would curtail, month, the total for July being reported to be
at least to a degree, fall buying. Wholesalers, smaller than for any July in several years.
however, report an active demand for merThe live-stock market in St. Louis shows an
chandise, and this would seem to indicate that increase in the receipts of cattle, hogs, sheep,
stocks in the hands of retailers throughout the horses, and mules for July, 1916, as compared
district have been well distributed to local con- to July, 1915. Prices continue at a level satissumers. Shoe manufacturers report gains in factory to producers.
shipments similar to those noted in the last
A month ago Government buying was a
few reports. The clothing trade reports satis- noticeable factor in the large markets of the
factory business, and its fall orders are in excess district. Reports indicate that the Governof last year. The hardware, woodenware, and ment requirements for immediate use have
kindred lines are all very active, and in some been satisfied, except in the horse market,
cases record business has been reported. In where the Government is reported to be taking
general it may be said that the usual seasonable all available supplies. Government requirelull in business has been less noticeable this ments for future delivery are still a factor,
year than for a number of years past.
however, and contracts covering these needs
The temperature during July was above the are reported almost daily.
normal in practically all parts of the district,
The precipitation in the month of July in
and this seems to have stimulated the retail the northern half of the district was below the
movement of summer goods. It appears that normal, amounting to a drouth in many secthe department stores and other retailers in the tions, while the rainfall was excessive in the
larger cities have had a profitable season.
southeastern portions of the district. The
The building permits in the principal cities drouth in the northern sections of the district
of the district in July, 1916, show a gain as continued until the middle of August and uncompared to July, 1915. Returns from St. doubtedly caused severe damage to corn and
Louis show a gain of over $725,000, which is other crops. General rains beginning August
the largest gain reported in the district.
13 and 14, however, have been of benefit.
The postal receipts at St. Louis and Memphis
We give below preliminary estimates of the
show substantial increases this July, compared wheat crop of the States within this district
* to July, 1915, while at Louisville receipts are taken from the Government report of conabout the same as a year ago.
dition as of August 1. The 1916 estimate is
The movement of freight throughout the about 6,470,000 bushels less than the forecast
district continues at a high level. A car sur- from the July 1 condition. It will be noted
plus of 10,616 was reported on August 1, as that the estimate for 1916 is only a little more
compared to 52,234 on July 1, 1916, and than half the average yield for the years 1910
264,243 on August 1, .1915. The railroads to 1914 and less than half of the 1915 harvest.
continue to show increases in gross and net The estimated production for every State of
earnings.
the .district shows a loss this year as compared




SEPTEMBER 1,1916.

481

FEDERAL RESERVE BULLETIN.

to 1915, and as compared to the average of the The condition of the oats crop is similar to
four previous years. Wheat producers in the that of the corn crop and the table below gives
northern portions of the district report that the figures as of August 1:
recent rains have put the ground in good con[000 omitted.]
dition to be worked and plowing for winter
wheat has begun.
Condition Aug. 1.
[000 omitted.]
1916

Yield per acre
(bushels).

Total production.

Estimate, 10-year Estimate,
average.
1916,
1916.
Illinois
Indiana
Kentucky
Missouri
Tennessee

11.0
11.5
9.0
8.5
9.5

16.3
15.8
12.6
14.1
11.4

Final,
1915.

1910-1914

average.

16,434
18,158
8,190
15,164
8,417

53,200
47,300
9,900
34,108
9,030

35,323
32,528
9,797
33,747
8,647

66,363

Total

10-year
average.

Change Forecast
in con- from Aug. Final
dition 1 condi- estimate,
from
1915.
tion.
July 1.

153,538

120,042

The table below gives the condition of the
corn crop as of August 1 taken from the
Government crop report of August 8. There
has been a heavy loss in the condition of corn
during the last month in several of the states
in the district, and the forecast from the
August 1 condition is over 13,000,000 bushels
less than the forecast for the July 1 condition.
This loss in condition seems undoubtedly due
to the extreme heat and drouth during July
and the early part of August. Reports from
practically all sections of the district indicate
that the crop has been materially injured. The
general rains beginning August 13 have been
of benefit but it is a question whether they did
not come too late to repair the early damage.

Illinois
Indiana
Missouri

-4
-2
-6

165,389
61,304
37,185

195,435
65,520
31,850

263,878

Total

292,805

Here are figures on the condition of the cotton crop as of July 25. The crop has deteriorated in the three principal cotton-producing
States of the district, the deterioration being
most noticeable in Mississippi. This damage is
attributed to excessive rains and to the boll
weevil. Reports from Arkansas are more
encouraging. The hill sections of that State
are beginning to suffer from lack of moisture,
but the bottom lands are in good condition,
and the crop may be reported as progressing
satisfactorily. The percentage of condition
in Missouri shows improvement, and with the
increased acreage reported from this State
should yield a satisfactory harvest.
Condition.
July 25,
1916.
Arkansas
Mississippi
Missouri
Tennessee

[000 omitted.]

76
77
71

87
84
83

85
65
80
82

July 25,
1915.
80
76
83
85

10-year
average.
80
79
75
73

Changes in
condition
from
June 25.
- 4
-20
+ 6
- 2

Condition Aug. 1.

1916

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




Forecast
from July from Aug. Final es1 condi- 1 condi- timate,
10-year
1915.
tion.
tion.
average.
-25
- 5
+ 2
+ 1
-19
-21
+ 1

46,781
351,714
192,839
115,630
54,803
159,196
87,696

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

1,008,659

1,116,514

Rice producers in Arkansas report that the
crop prospects are excellent. Reports are
optimistic for a banner yield.
Reports on the tobacco crop in western Kentucky and Tennessee are excellent, especially
in the Paducah district. Climatic conditions
seem to have been favorable, and the condition
at this writing promises an excellent quality of

482

FEDERAL RESERVE BULLETIN.

leaf and a large harvest. The tobacco market
is firm, and all prospects seem to be favorable.
A few weeks ago it was reported that livestock growers were being forced to ship cattle
to market on account of lack of pasture. Recent rains have improved this condition.
The peach crop in the central portions of the
district has riot proved up to earlier expectations.
Peaches are high, and the quality is not of the
best. Recent rains have helped the apple crop.
There has been little or no change in banking
conditions during the past month. Banks continue to hold surplus funds, as reported a month
ago, and there is no anxiety over the ability of
banks to finance the crop movement. Commercial paper brokers report an active business,
but the supply of available paper is limited.
Rates are lower than quoted a month ago, best
names now being offered from 3f to 4 per cent.
Country banks are reported as being active in
the market at 4 per cent. Some paper Has
been sold to city banks at 3 | . Rates of discount show a downward tendency. The clearings for the principal cities of the district show
important increases for the week ending August
12, 1916, as compared to the same week for
1915, 1914, and 1913, the percentage of gains
for the week ending August 12, 1916, compared
to the same week for 1915 being as follows:
fet. Louis, 40; Louisville, 8.1; Memphis, 32;
Little Rock, 19.5; and Evansville, 18.6.
In July, 1916, this bank cleared, passing
through its hands direct, 194,343 items, totaling
$103,494,899.75. However, on July 15 the
new clearing plan went into effect, and since
then some of our member banks have been
sending direct to other Federal Reserve Banks
items drawn on member banks in such Federal
Reserve Banks7 districts. Such member banks
make their remittances for the credit of this
bank, sending us the proper advices. From
July 15 to July 31 there were handled in this
indirect way 33,265 items, totaling $7,836,272.30. There was thus handled through the
clearing system operated by this bank during
the month of July a total of 296,949 items,
amounting to $154,302,798.75. This is an




SEPTEMBER 1,1916.

increase both in the number of items and
amount over our previous records.
From July 15 to August 15, 1916, the first
month of operation under the new clearing
plan, this bank handled direct 179,146 items,
amounting to $95,940,734.19. During the
same period it handled indirectly—that is,
items sent direct to other Federal Reserve
Banks for the credit of this bank—87,609
items, totaling $17,298,457.75, or a total for the
first month of operation under the new clearing
plan of 266,755 items, amounting to $113,239,191.94.
There are approximately3,050memberbanks,
state banks, and trust companies in this district.
Prior to July 5 we could collect at par items
on only 470 member banks, but now we are
collecting at par checks on 1,203 banks in this
district, or a little over one-third of the total
number of banks.
DISTRICT NO. ,9—MINNEAPOLIS.
Reports during the month show an increase
in the amount of damage to the Northwestern
wheat crop from rust and blight. It is very
likely that the crop will be substantially less
than half of last year's wheat production, which
would give a total yield that is less than the
10-year average of approximately 191,000,000
bushels for the wheat growing states of this
district.
Harvesting is practically over, and threshing
has begun at many points. Threshing returns
indicate that wheat is light in weight, and that
the per acre yield is in many cases even smaller
than was expected. The extreme heat appears to have done fully as much, and even
more damage than black rust.
A summary of 301 reports from reliable
sources, estimating the amount of damage, is
as follows:
Total damage:
Wheat.
Barley...
Oats
Corn

...
:

p e r cent.
..59.8
25.2
20 4
11.2

Since these reports were received, the corn
situation has continued to improve. Damage

'SEPTEMBER 1,

1916.

FEDERAL RESERVE BULLETIN,

to oats appears to be somewhat less serious
than the reports three weeks ago indicated,
Oats, barley, and rye are all light in weight.
Flax continues to show a favorable condition
and will make a good crop, with an increased
acreage.
As previously noted in these reports, the
farmers in eastern Montana, North and South
Dakota, and Minnesota carried over a large
amount of wheat from last year's crop. Under
the influence of continuous damage reports
wheat prices on Minneapolis and Duluth markets have gradually reached record levels, and
a large amount of old wheat has been moving
in at the top of the market.
Wheat receipts at Minneapolis and Duluth
for the week ending July 29 aggregated
3,769,000 bushels, for the week ending August
5, 3,446,000 bushels, and for the week ending
August 12, 2,647,000 bushels, or a total for the
three weeks' period of 9,862,000 bushels. This
volume of old-crop wheat coming in on a high
market has placed a large amount of cash in
the hands of the farmers, and with a considerable amount of old wheat still on the farms
represents an asset that is a considerable offset
to the decreased income from the present crop.
The conditions created by the damage to the
wheat crop point conclusively to the fact that
the ninth district is not as dependent upon
small grains as in former years. Lines of business that are largely dependent upon the prosperity of the agricultural centers show no apprehension over the outlook and continue to
enjoy a favorable volume of business. Crop
conditions this year will bear heavily upon the
farmers in some portions of the district that
are almost exclusively in the grain-raising business, but will not depress conditions in the very
large part of the district where farming has
become more diversified and where live-stock
raising and dairying has gained a solid foothold.
A great improvement during the month in
the corn prospect is a very favorable factor,
since over the southern portions of this district
<corn is a more important crop than wheat.




483

Conservative observers are inclined to believe that the money return from this year's
crop, taking into consideration the Yery high
prices that have been prevailing for live stock,
dairy products, grain, and practically the whole
range of farm production, will not be far short
of the returns a year ago, with the exception,
as above noted, that there will be some depreciation in the relatively small proportion of
the agricultural area that is given over exclusively to grain raising.
The returns of the farmers on this year's
wheat crop will undoubtedly average better
than a dollar a bushel, and some observers are
inclined to believe that the range net to the
farmers will be from $1.10 to $1.30 per bushel.
The agricultural situation has already produced a substantial quickening in the demand
for loans for farm purposes. Except in this
respect banking conditions remain about the
same, and interest rates have shown but little
change during the month.
Wholesale and retail business is active. Industrial lines are prosperous, and labor is fully
employed and in brisk demand at good wages.
Construction is active, bank clearings have
been increasing, and sales of lumber and material for farm improvements are in good volume.
The district as a whole is prosperous, and the
present outlook is favorable.
DISTRICT NO. 10—KANSAS CITY.

Continued high temperatures, with almost
total absence of rains, during the past 30 days
have generally interfered with the previous
favorable agricultural prospects. Latest obtainable reports from the States wholly or in
part within this district are, briefly, as follows:
Nebraska.—Rains since August 1 assure
more than an average corn crop, and it is expected that the number of bushels will approach 200,000,000. Wheat and oats are the
best as to quality ever grown in the State, with
yields averaging very high. The second and
third crops of alfalfa materially shortened by
dry conditions. Soil is in excellent condition
for plowing and this work progressing rapidly.

484

FEDERAL EESERVE BULLETIN.

SEPTEMBER 1,1916..

Kansas.—Widespread damage to corn. June. The second cutting of alfalfa was up to
Wheat crop of exceptionally fine quality, turn- average. Potatoes better than for several
ing out better than expected, and expectations years. Condition of crops under irrigation, as
are that the aggregate yield will exceed that of a whole, good, but rather poor under dry farmlast year, when it amounted to 95,000,000 ing on account of late rains.
bushels. New wheat is bringing the farmers
New Mexico.—Dryness of the soil from lack
record early-season prices. It is estimated of good rains caused later showers to be quickly
that two and one-half millions tons of prime absorbed and not as beneficial as usual, but
hay have been harvested from the State's afforded much relief in stock water and ranges
1,300,000 acres of alfalfa. Pastures still af- and will make fodder crops, which will be extenfording herbage in most cases, with no com- sively grown for stock.
plaint of shortage of stock water. Corn is beA car shortage, usual at the crop-moving seaing cut for fodder and silos are being filled in son, is reported from practically all over the
many places in the southern and western parts district, but railway men claim it will not be as.
of the State. It will be noted, however, that serious as in previous years.
Kansas has already harvested excellent yields
In numbers, all live stock marketed from
of important crops selling at unusually good January 1 to date shows an increase over
prices.
1915, the largest increase being in cattle, which
Oklahoma.—Continued dry weather has was about 20 per cent, with hogs 10 per centcaused considerable damage to the corn crop, Prices on fat grass cattle are some lower than,
although in some parts of the State the early a year ago, corn-fed cattle about the same, and
crop was practically assured before the heated hogs about $2 per hundredweight higher. Most
spell. Condition of cotton crop is good, not of the receipts comprise cattle from the grazing
having suffered from dry weather as much as parts of the district, and the range is reported
other crops, but is deteriorating. Boll weevil to be good. Cattle are generally reported as
active and numerous in southern area. Forage doing well. There has been plenty of water, in
crops in fair condition. Broom-corn harvest spite of the drought, owing to the heavy rains
progressing nicely and high prices are being early in the spring. The demand for feeders
paid. Pastures poor and mostly dry, stock and stock cattle, to be taken north and east,,
water becoming scarce. Soil too hard and dry commenced in earnest about the 7th of August,
and is now much heavier than usual at this
for plowing.
Colorado.—-General rains beneficial. Kangestime of the year. A shortage in hogs in the
have improved. Condition of corn is decidedly south and west is anticipated, as the farmers
better, but crops still backward. Sugar beets will not have corn to feed them and will be
continue in excellent condition. Good crops compelled to market a portion of those on
on irrigated lands, but in nonirrigated districts hand. There is no demand for cattle loans at
crops have suffered from prolonged drought. this time, and loans already made are being liMissouri.—The mostserious drought and per- quidated. Feeder loans should be in demand
sistent heat since 1901, continuing about seven early in September.
There has been a good increase in hogs
consecutive weeks. Corn crop is undoubtedly
seriously damaged, that on the higher lands packed in the district since February 26 of this,
is already past help. Pastures dry and brown. year, as compared with last year, as indicated
Some farmers are beginning to feed, as the by the following compilation:
range has failed and water is getting scarce.
1916
1915
to Aug. 5. to Aug. 7.
Ground as a rule too dry and hard for plowing.
1,021,700
Kansas C i t y . . .
1,101,300
Hay crop the best in the history of the State.
904,200
South Omaha..
1,040,200
800,600
582,000
St. Joseph
Wyoming.—Great improvement in crops, Wichita
245,900
173,500
328,000
168,300
Oklahoma City
probably 50 per cent for the grain crops over




SEPTEMBER 1,1916.

FEDERAL KESEEVE BULLETIN.

There has been a decided slump in the price
of crude oil, from $1.55 to 95 cents a barrel.
There seems, however, to be a general belief
among oil producers that the market will not
be demoralized. This falling off is explained
by the fact that during the months of April,
May, and June more than 4,500 new wells were
drilled in the mid-continent field, and were this
to have continued a condition of overproduction might soon have developed. July, however, showed a decrease in drilling operations,
and it is believed that the same leveling
influence will be maintained for the next few
months. There has been a falling off in exportations, but an increased domestic demand for
petroleum products.
There has been a decided drop in the prices for
zinc ores, which has reached the lowest figure
paid for ore for nearly two years, and operators
seem to be at a loss to understand the reason,
nor can they understand the sustained slump in
the spelter market, which is the underlying
cause of the low ore prices. In the Joplin
(Moi) district the value of zinc and lead ore
mined and sold up to August 1 was $22,086,511,
as compared with a total production amounting
to $13,552,401 during the same period of 1915.
The production for the 30 weeks of 1916, ending
with August 12, represents the highest in tonnage and values in the history of the Joplin
district. It might be interesting to mention
that mines in this district supply 38 per cent of
the spelter produced in the United States.
Colorado reports a perceptible slackening in
the production of lead during the past few
weeks, due chiefly to the hot weather. The
first half of the year, however, made a new high
record, and the full year will be far above all
predecessors. Owing to unsatisfactory prices,
there has been an apparent accumulation of
tungsten concentrates in the Boulder (Colo.)
field, but an increase of demand of any material
proportions, it is said, would quickly exhaust
the reserve. It is estimated that Colorado
mineral output will show a total of $100,000,000
at the close of 1916, as compared with
$75,000,000, the production for 1915. The




485

tungsten production is primarily responsible
for this increase.
The mines of New Mexico during the first six
months of the current year show small increases
for gold and silver and appreciable increases for
lead, copper, and zinc.
Were it not for the serious and unsettled condition of the controversy between railroads and
their employees labor conditions in this district
might be said to be satisfactory. The complications between miners and mine owners are
being amicably adjusted. Employment bureaus report many places open, but labor
scarce.
One report, covering 70 lumber yards
throughout Kansas, Oklahoma, Colorado,Wyoming, and Nebraska, furnishes the following
figures:
Per

Wholesale business:
cent.
Gain in shipments, Jan. 1 to June 30, 1916, over
same period last year
17
July, decrease in shipments
21

The average price which our lumber brought
at the mill covering first half of this year was
32 per cent higher than in 1915.
For

Retail business:
cent
Gain in sales, Jan. 1 to June 30, 1916, over same
period last year.
47
July, gain over same month last year
......... 18

Denver reports building permits for July as
surpassing all records for the same month in
any year since 1912. Kansas City reports that
while the estimated valuation of buildings for
which permits were issued in July, 1916, fell off
22 per cent from the July total of 1915, the
estimated value of new buildings started in the
first seven months of 1916 is 5 per cent greater
than for the same period a year ago. Total
real estate sales for the early part of August
shows a marked increase over a year ago.
Oklahoma City reports that building operations
for July will far surpass any July since .1910.
Omaha advises of a total value in building permits for the first seven months of 1916 of
$3,897,522, as compared with $3,015,210 for
the same period of 1915.

486

FEDERAL RESERVE BULLETIN.

Foreign trade in meat products for July
shows a decided improvement as compared
with the month of June. The horse and mule
market reports a strong foreign trade, 30 to 40
per cent in excess of the June demand. There
has been no large grain movement from this
district to the seaboard for export, this trade
being much less than last year, due to the very
high price of grain and the extremely high ocean
freight rates.
In dry goods, business for July and August
shows a fine increase over last year, with collections very satisfactory and prospects good for
the fall business. One of the largest dry goods
companies in the district reports an increase of
60 per cent for July and August over the same
period last year. Shoe manufacturers are predicting a material increase in the price of shoes
for the fall and winter. Kid and calf skins
used in the manufacture of the better grade
shoes are up from 50 to 100 per cent, and there
is also a noticeable shortage in hides. Wholesale and retail business continues unusually
heavy despite the customary untoward influences of midsummer.
The automobile industry is having a wonderful year in this territory, as indicated by the
following, showing the number of automobile
licenses issued in the States named for the
periods shown:
Missouri, entire year 1915, 69,643; to August 16, 1916,
98,097.
Kansas, to August 16, 1915, 59,686; to August 16, 1916,
94,200.
Nebraska, entire year 1915, 59,140; to August 16, 1916,
90,500.
Oklahoma, to August 19, 1915, 25,000; to August 19,
1916, 40,000.
Colorado, entire year 1915, 27,151; to July 1,1916, 36,012.
New Mexico, entire year 1915, 5,000; to August 1, 1916,
7,442.
Wyoming, to August 17, 1915, 3,675; to August 17, 1916,
6,631.

The following comparative figures of deposits
in State banks in States wholly or in part within
this district are taken from reports of condition made to State authorities at the same
periods each year, although statements were
not made for precisely the same dates:




SEPTEMBER 1,

1915

1916

Kansas
Nebraska...
Missouri
Wyoming...
Colorado
Oklahoma...
New Mexico.

$129,918,798
103.828,809
354,048,509
7,978,877
45,321,640
43,823,441
6,792,416

$145,685,397
141,557,106
404,885,353
10,978,718
57,502,499
56,080,989
8,956,736

Total..

691,712,490

825,646,798

While the latest abstract of condition of national banks within this district is not yet complete, on June 30, 1916, the amount on deposit
in said banks was $700,756,400, whereas on
June 23, 1915, the total deposits in these banks
were $547,745,484.
The general financial situation shows no
change of importance. Supplies of loanable
funds remain plentiful. Despite active preparations for the fall requirements of the agricultural communities, no material advance in
interest rates is anticipated. The postal savings gain has been general throughout the district. Post-office receipts are still increasing.
Material and constant increases in bank clearings continue.
DISTRICT NO. 11—DALLAS.

Midsummer dullness incident to all lines of
trade at this season has been felt during the
past 30 days. Business has, however, been
normal and there is nothing unfavorable in
the situation, except that in some sections of
the district lack of rain is causing alarm. This
is particularly true among the cattle interests,
complaints coming notably from the panhandle section, west Texas and Oklahoma.
Rain has fallen over a considerable portion of
the district within the past month, but in most
instances the showers have been only local,
and not of appreciable benefit.
Reports from cotton-growing sections are so
much at variance that it is somewhat difficult
to forecast what the yield will be. What
threatened to become a widespread damage
from boll weevils in the north Texas counties
a month ago has been eliminated by the dry,
hot weather. General rain over those counties
would do much good. Cotton has deteriorated
greatly in north and west Texas and Oklahoma

SEPTEMBER 1,1916.

FEDERAL RESERVE BULLETIN.

in the past two weeks from lack of moisture.
In the southeast counties the opposite condition
prevails, and as a result the boll weevils have
been active and caused much loss. Picking
and ginning are going on throughout the cotton belt, and indications are that south Texas
markets are receiving rather heavy receipts of
the staple. In the central part of the State,
or farther south, the increased cotton acreage
has been greater, and the crop at this time may
be said to be in better condition than in any
other section of the district. Reports indicate
an exceptionally heavy yield, especially in the
Brazos River counties.
The corn crop will be below the average, and
in north Texas and Oklahoma the yield will
be cut down considerably on account of the
dry weather.
The fruit crop was only about 50 per cent
of the normal yield. Active markets absorbed
the supply x and good prices prevailed, which
offset, to a large extent, the short crop. Returns generally were satisfactory.
Banks throughout the district are experiencing a good demand and are getting ready
to handle the crop movement. At this season,
of course, deposits are greatly reduced and
this condition will exist until liquidation from
the crop movement is had. As evidencing
the heavy demand, it is interesting to note
that loans of this bank have increased $900,000
within the past month. There is no material
change in the character of paper offered.
Notes of farmers for small amounts, with fall
maturity, secured by chattel mortgages, are
being received in rather large volume. The
first evidences of the fall crop movement have
been shown this past week when this bank
made shipments of over $1,000,000 to interior
banks for that purpose.
In the western part of the district the outlook for the cattle business during the fall is
favorable, although on account of dry weather
in parts of that section, reports indicate that
cattle sales have fallen off. There has been a
lull in the trading as a consequence. In parts




487

of New Mexico, however, particularly around
Carlsbad and Deming, some rain has fallen in
August, which has given temporary relief to
the situation. General rains are needed to be
of material benefit. In the Pecos River
country some cattle are being fed in order to
prevent losses, the hot, dry weather cutting
ranges short.
There is an increase in the acreage in peanuts
in central Texas of from 200 to 300 per cent, and
with an average yield of 30 bushels per acre
it is estimated that shipments of approximately
300 cars will be made from that section alone.
Harvesting of the rice crop is just beginning,
and, as the season has been favorable, an
excellent yield is the forecast.
The lumber business is holding its position,
prices are better, and sufficient orders are
booked to keep mills operating five days in
the week. Shipments to the interior are said
to be satisfactory and export shipments are
increasing.
Cement factories have enjoyed a normal
trade for this season and report a slightly
increased business over 1915.
The oil fields report continued activity,
though conditions are not as favorable as 60
days ago. Prices have fallen somewhat, and
it is reported that some of the drilling outfits
have shut down. In the oil fields in Louisiana
the driling continues and additional gas and
oil wells are being opened up. The oil refineries of south Texas are working full time,
and the business continues to expand. Exports of these products are made to all parts
of the world.
Transportation lines report an increased
freight traffic. Passenger traffic has shown a
large increase, of from 35 to 50 per cent, and
all lines report one of their largest seasons.
Mail-order houses report an increase of 22 per
cent for all lines of merchandise, and are receiving heavy stocks in anticipation of fall
trade. Local wholesale markets are having
an excellent trade from outside buyers and are
booking heavy orders for fall goods. On

488

FEDERAL RESERVE BULLETIN.

account of the shortage of dyestuffs wholesalers are finding it difficult to fill orders, and
shipments are uncertain.
Local business conditions on the border are
said to be exceptionally good because of the
troops stationed at those points. The large
amount of supplies being purchased in the
border towns has been a stimulus to trade in
all lines and conditions are exceptionally good.
The exports for the port of Galveston for the
month of June, 1916, show an increase of
$1,692,000 over the same period of 1915. This
increase is made up of all commodities, but
it is especially noted that shipments of cotton
and its products to England, Spain, Italy, and
Denmark constitute the greatest part of the
increase. It is also noted that exports to
Mexico increased some 50 per cent over June,
1915. The figures of exports are: June, 1915>
$9,069,333; June, 1916, $10,761,590; increase,
$1,692,257.
Post-office receipts for nine of the principal
cities of the district show an increase of 14 per
cent for July over similar period of 1915, the
figures being: July, 1915, $265,092.68; July,
1916, $308,953.80; increase, $43,861.12.
All of the offices show a good increase with
the exception of two, which show a slight decrease.
Statistics of building permits obtained from
six of the principal cities of the district show a
decrease in number but an increase in valuation in July, 1916, over 1915. The figures are:
July, 1915, $1,337,072; July, 1916, $1,474,665;
increase, $137,593.
A decrease in the number, amounting to 160,
is shown. There is considerable building going
on throughout the district, however, for which
permits have not been issued, and operations
may be said to show a substantial increase.
Bank clearings obtained from six of the
principal cities of the district for July, 1916, over
similar period of 1915, show an increase of 7.8
per cent, the figures being: 1915, $126,136,986;
1916, $136,884,249; increase, $10,747,263.
Live-stock receipts at the Fort Worth stockyards for the month of July, 1916, over a
similar period for 1915, show a slight decrease




SEPTEMBER 1,1916.

in cattle and an increase in calves for the same
time. The receipts of hogs and sheep for July,
1916, over July, 1915, show a substantial increase. The total cattle, sheep, and hog
receipts for the first seven months of 1916 show
a substantial increase over a similar period for
1915. Below is given a table showing the
figures for July, 1915 and 1916, and also for
the first seven months of 1915 and 1916:
July, 1916.

July, 1915.

66,370
15,607
40,086
52,043

75,505
15,311
20,467
17,301

Cattle
Calves
Sheep
Hogs

Seven
months,
1916.
Cattle
,..
Sheep
HOgS.>..V. . . , - . . . , . . . . . . , .

472,524
298,602
598,865

Increase.

296
19,619
34,742
Seven
months,
1915.
464,750
291,971
254,284

Decrease.
9,135

Increase.

7,774
6,631
344,581

Failures in the district for the period from
July 15, 1916, to August 14, 1916, over similar
period in 1915, show an increase both in number and liabilities. The figures are: 1916,
number, 34; liabilities, $435,248; 1915, number,
17; liabilities, $139,331.
This is the first time in several months where
the number of failures and amount of liabilities
of the firms involved have shown an increase
over the previous year. A list of the liabilities
of the concerns involved show a majority of the
same to be very small and evidently the summer depression has caused this condition.
Local wholesale leather firms report business
good and sufficient orders ahead to insure running on full time for an indefinite period, with
collections in keeping with the increased
volume.
Wholesale grocery houses continue to report
an increased volume of 25 per cent, with collections good.
Labor conditions are satisfactory and statistics show less unemployment in the district
and better wages obtaining than any time
since the beginning of the European war, and,
compared with the year immediately prior to
the war, conditions may be termed normal.

SEPTEMBER 1,1916.

FEDERAL RESERVE BULLETIN.

DISTRICT NO. 12—SAN FRANCISCO.

Favorable weather during the past month
has especially benefitted agricultural interests
throughout the seven States of the twelfth
Federal Keserve district. Grain harvesting is
well under way. Wheat has filled well, and
there is absence of rust. A report from Portland, Oreg., estimates that the wheat crop of
the Northwest will be about 50,000,000 to
55,000,000 bushels, which approximates a
normal yield. There is carried over from
10,000,000 to 12,000,000 bushels.
Barley is commanding the highest prices
since 1904, some 25 or 30 cents per bushel
higher than in 1915. This is due in part to
the fact that the crop is not over 90 per cent
of the 10-year average, and in part to a heavy
export demand.
The cotton acreage in Imperial Valley, CaL,
is practically double that of last year and
aggregates about 100,000 acres. The first
bale of this year's crop was ginned on July 20
and sold at 15 cents per pound.
The area planted to rice has increased from
30,000 acres last year to 80,000 acres this year,
with an estimated crop of 280,000,000 pounds,
which at 2 cents per pound would have a value
of $5,600,000.
It is anticipated that the crop of beans,
which is an important staple, will exceed all
previous records.
Acreage in sugar beets is reported at 26 per
cent nuore than in 1915. Six new sugar-beet
factories have been established this year, three
in Utah and one each in Idaho, Oregon, and
California. Preparations are making for large
increase in acreage of sugar beets next year.
This is a new crop in several parts of the district.
Southern California reports that the new
orange crop promises to be about 90 per cent
of normal, and that it is probably two or three
weeks further advanced than at this time last
year. Late shipments of the old crop, both
of oranges and lemons, have been at exceptionally profitable prices.
It is reported that more than 40,000 cars
of deciduous fruits and other perishable pro-




489

ducts have been shipped from California thus
far this year. This is an important increase
in volume. High prices have been realized.
Live stock interests are enjoying exceedingly
prosperous conditions in spite of a shortage of
feed in certain localities.
The salmon catch at certain points in Alaska
has thus far been about normal. At southern
Alaska points, however, and in the Puget
Sound region, the catch as yet has been only
about one-third of normal.
Little change can be noted in the extraordinary activity previously reported in mining.
There has been gradual increase of output and
continuous opening up of new properties.
During July the daily shipments of petroleum from the California fields were 260,524
barrels as compared with 304,546 during June.
Production increased from 255,451 barrels per
day in June to 258,393 in July. Drilling is
active, and previous advances in prices have
been maintained.
The status of lumbering is unsatisfactory and
shows little change during the past month,
though reports indicate some tendency toward
increased demand and slightly firmer prices.
Due to lack of bottoms, shipments to the
United Kingdom, South America, China, and
Japan, which absorbed about 35 per cent of
the lumber output before the war, have largely
ceased. Shipments are almost entirely to
local points.
The continuous development of Alaska is
creating an important commerce tributary to
this district, Seattle being the main port of
supply. The total commerce of Alaska, increasing 20 per cent during the past year, is expected to aggregate $100,000,000 during the
current year. Gold, copper, and fisheries
products constitute 95 per cent of the shipments from Alaska at the present time.
The great activity previously reported in
shipbuilding continues. Although the cost of
construction is high, more than 50 vessels are
now under construction at Pacific coast ports.
Charter rates are firm without change.

490

FEDERAL RESERVE BULLETIN.

Exports and imports at Pacific coast ports
show large gains over the corresponding time
last year.
Building permits during July 1916,, reported
by 17 principal cities of this district show an
increase of 18 per cent over those of July, 1915.
Bank clearings for the same cities also show an
increase of 18 per cent over those of the same
month last year.




SEPTEMBER 1,1916.

Loans of member banks of this district, as of
June 30, show an increase of 4 per cent .over
those reported May 1, 1916, and 10 per cent
over June 23, 1915. Deposits on June 30,
1916, were 16 per cent greater than at the corresponding date in 1915.
Labor conditions are somewhat unsettled.
Conditions, in the main, seem exceptionally
favorable.

SEPTEMBER 1,

1916,

FEDERAL RESERVE BULLETIN.

DISTRIBUTION OF DISCOUNTED PAPER
BY CLASSES, SIZES, AND MATURITIES.
During the month of July the total amount
of commercial paper discounted by the Federal
Reserve Banks was $20,183,100, the largest
monthly amount since the opening of the
banks. This total is 73.1 per cent larger than
the total for the preceding month and 52.5 per
cent in excess of the corresponding total for
July, 1915. Boston and Chicago report considerable discounts during the month of largesized short-term paper, with the result that of
the total discounts the percentage of the three
southern banks has declined from 64.1 in July,
1915, and 53.8 per cent in June, 1916, to 35.8
per cent for the month under consideration.
For the seven months of the present year discounts totaled $82,726,700, compared with
$85,981,800 for the corresponding period in 1915.
Commodity paper, included in the above
monthly total of discounts, figures to an amount
of $1,525,200, compared with $712,000 for
June and an average of $1,393,200 for the first
six months of the present year. Almost 75
per cent of this class of paper was handled by
the Richmond and Atlanta banks, Kansas
City in addition reporting for the first time
$360,000 of discounts of this class of paper.
During the present year a total of $9,884,600
of commodity paper was discounted, of which
about 95 per cent was secured by cotton, while
the total since September 8, 1915, the date of
the first discount of this class of paper, was
$20,199,700, handled by seven banks.
Trade acceptances (two-name paper) discounted during the month by seven banks
totaled $199,000, compared with $275,700 in
June and an average of over $300,000 for the
first six months of the present year. This
total is exclusive of $1,773,400 of trade acceptances based upon foreign-trade transactions
purchased in the open market mainly by the
San Francisco and New York banks. Discounts of two-named paper since the beginning
of the present year amounted to $2,002,200,
while the total discounted since September of
last year is $3,961,000.




491

The total number of bills discounted during
the month was 8,790, compared with 9,238 in
June of the present year and 10,155 in July of
the past year. The average amount of the
paper discounted, because of the preponderance of large-sized paper among the Boston
and Chicago discounts, has increased to about
$2,300 from $1,260, the average for the preceding month, and $1,304 for July, 1915. For
the three southern banks the average for the
month is slightly over $1,250, as against
$4,270 for Chicago, $4,860 for Cleveland, and
$18,950 for Boston, where over 80 per cent of
the July discounts was in denominations in
excess of $10,000. About one-third of the
number and a somewhat larger proportion of
the amount of paper discounted during the
month was in bills of over $1,000 to $5,000.
Small bills (in sizes up to $250) constituted
about one-quarter of the total number, though
only slightly over 1.5 per cent of the total
amount of bills discounted during the month.
Bills in sizes of over $10,000—199 in number—
constituted about 37 per cent of the July discounts.
About 23 per cent of the bills discounted
during the month was paper maturing within
10 days at date of discount; 29.7 per cent paper maturing after 10 but within 30 days;
13.6 per cent paper maturing after 30 but
within 60 days; and 24.6 per cent paper maturing after 60 but within 90 days. The discounts of agricultural and live-stock paper
maturing after 90 days (6-month paper)
totaled $1,824,700, or 9.1 per cent of the total
discounts for the month, Dallas, Minneapolis,
and Chicago accounting for about 75 per cent
of the discounts of 6-month paper.
Discounted paper held on the last Friday of
the month totaled $27,572,700, compared with
$21,186,200 about a month before and
$29,102,200 about a year previous. Of the
total bills held by the banks on the last Friday
in July, the share of the three southern bankswas 55.5 per cent, compared with 65.1 per cent
on June 30, 1916, and 68.1 per cent on July
30, 1915.

492

SEPTEMBEE 1,1916.

FEDERAL RESERVE BULLETIN.

Of the total number of member banks—
7,621 at the end of July—642, or 8.4 per cent,
discounted with the Federal Reserve Bank, as
against 678 the month before and 796 in July,
1915. The number accommodated by the three
southern banks was 358, as against 338 in June,
1916, and 427 in July, 1915.
Member banks in Massachusetts to the number of 10 secured $4,970,200 of discounts; 22

banks in Illinois, about $2,676,800; 126 banks
in Texas, about $2,108,600; 34 banks in North
Carolina, $1,336,100; 11 banks in Pennsylvania, $1,289,300; and 42 banks in South Carolina, $1,205,400. The combined share of rediscounts secured by 245 banks in these 6
States was $13,586,400, or over two-thirds of
the total amount reported to the Board for the
month.

Commercial paper, exclusive of bankers' acceptances, discounted by each of the Federal Reserve Banks during the month of
July, 1916, distributed by sizes.
NUMBER OF PIECES AND AMOUNTS.
[In thousands of dollars.]
Over $100 Over $250 Over $500 Over $1,000 Over $2,500 Over $5,000
To $100. to $250.
to $5,000. to $10,000.
to $500. to $1,000.
to $2,500.

Over
$10,000.

Total.

Per cent.

Banks.

Jl
Boston
4.5
0.5
19 3.5
New York
10.5
.1
7 1.4
Philadelphia
3 .3 20 3.9 22 8.5
.4
Cleveland..........
2 .2
22
3
Richmond
.. 150 12.8 390 70.9 529 211.9
Atlanta (including
New O r l e a n s
branch)...
. . . 150 11.
409 69.2 297 114.4
Chicago
87 34.7
22
57 10.7
St. Louis
72 26.6
34 6.1
49 17.8
Minneapolis
,
30 5.3
Kansas City
103 17.7 125 46.6
Dallas
498 83.0 421155.4
119
12 2.0
San Francisco......
10.3

4.8
13.2
23.6
5.9
519 418.6

30
65
35
457

7.2
51.9
133.0
64.6
811.6

106
26
121
15
238

528.7
117.9
552.5
70.1
940.7

189.6
126.8
44.5
86.4
71.6
225.5
27:2

225
186
74
158
83
310
;
41

311.0
128.2
242.6
142.5
506.9
65.5

136
177
66
54
36
168
20

535.9
806.7
284.4
182.4
123.4
617.6
76.6

4

377.0
40.5
;
125.1
547.1

264 5,001.2 3.0 24.8 $18
116
235.5 1:3 • L 2 2,030
335.4 3l8 1,380.1 3.6 6.8 4,340
259.2
534.8 1.3 2.7 4', 860
220.72,370 3,234.3 27.0 16.0 1,360

75 4,075.0

162.8
43.01,493 1,516.1 17.0 7.5
689.3 411,440.0 800 3,421.1 9.1 16.9
45.9
.12.0 320 548.2 3.6 2.7
111.0
87.3 441 733.2 5.0 3.6
, 39.4
375.3 499 819.5 5.7 4.1
344.1
540.4 1,905 2,481.9 21.7 12.3
35.2
60.1 154 277.2 1.7 1.4

l,02O
4,270'
1,710
1,660
1,640
1,300
1,800

Total......... 505 40.3 1,582 274.11,691 650.0 1; 626 1,237.7 1,668 2,854.9 1,163 4,837.4 2,840.3 199 7,448.4 8,790 20,183.1100.0100.0
356

2,300

250
158
60
125
101
310
41

PERCENTAGES OF AMOUNTS OF EACH CLASS TO TOTAL.
'

•

.

•

•

•

.

'

•

:

To $100.

Over $100
to $250.

Over $250
to $500.

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

Amount.

Amount.

Amount.

Amount.

Over
$10,000.
Total.

Banks.

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




Amount.

Amount.

Amount.

Amount.

.4
.4
.1

0.1
56
1.7
1.1
12.9
12.5
3.7
8.1
11.8
8.7
9.1
9.8

0.1
22.0
9.7
12.1
25.1
25.7
9.1
23.4
33.1
17.4
20.4
23.6

10.6
50 1
40.0
13.2
29.1
35.4
23.6
51.9
24.9
15.0
24.9
27.7

7.5.
17.2
23.4
23.4,
16.9
10.7
20.2
8.3
15.2
4.8
13.9
12.7

8L5

2.2
4.6
.3
1.1
.7'
2.2
3.3
.7

0.1
4.5
.6'
1.7
6.6
7.6
1.0
4.9
2.4
5.7
6.2
3.7

24.3
48.5
6.8
2.8
42.1
2.2
11.9
45.8
21.8
21.7

100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

.2

1.4

3.2

6.1

14.1

24.0

14.1

36.9

. 100. a-

0.1
6
.3
0.4
.7
.1

493

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

Commercial paper, exclusive of open-market purchases, discounted during July by each of the Federal Reserve Banks,
distributed by States, and maturities as of date of discount.
[In thousands of dollars.]
Paper maturing—
Number of Number of
banks
member
accommobanks.
dated.

Districts and States.

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

56
68
164
56
17
48

2,745.2

2,165.0

After 60
but
within 90
days.

Total
commercial
paper
discounted.

60.0

After 90
days.

12.2

0.3

12.5
4,970.2

.3

5,001.2

Total
District No. 7—Chicago:
Illinois
Indiana
Iowa
Michigan..
Wisconsin.

.

Total
District No. 8—St. Louis:
Arkansas.
Illinois
Indiana
Kentucky
•
Mississippi
Missouri
.
Tennessee
Total
District No. 9—Minneapolis:
Michigan
Minnesota
Montana .
North Dakota

.

10.0
225.5

12

17.1

97.4

50.9

70.1

235.5

2
9

39.4
342.9

18.6
45.9

17.2

2.0

97.8
1,282.3

11

39.8
874.3
914.1

382.3

64.5

17.2

2.0

1,380.1

3
4
2

2.4

189.0

297.1
5.0

12.8
7.4
2.0

.6
16.1

2.4

15.8
512.0
7.0

9

189.0

304.5

22.2

16.7

2.4

534.8

15
97
80
79
144
104

1
5
34
42
23
6

13.0
5.8

1.5
42.8
353.4
448.8
165.5
31.7

30.1
134.2
685.5
588.3
119.0
28.1

43.7
58.3
14.7

.2

4.3
28.6
240.5
104.2
80.7
11.4

35.9
205.6
1,336.1
1,205.4
379.9
71.4

111

19.0

469.7

1,043.7

116.7

3,234.3

25
13
36
6

11.9

62.1
104.6
96.2
44.0

194.4
148.2
293.4
67.3

51.0

319.4
260.8
476.6
141 8

19

4.0

57.4

134.0

106.1

16.0

317.5

99

4.0

114.8

440.9

809.4

147.0

1,516.1

11
14
41
6

594.0

1,858.6

86.2
98.0

16.9

28.6
225.3

.8

40.7
47.7
103.3
11.5

6.0

9:3

43.8
175.1
11.8

2,585.5
155.0
414.3
266.3

992

.

70.1

318
196
351
76
51

Total

50.9

392

. .

10.0
87.4

94
56
110
21
18
93

.

17.1

519

.

1
11

759

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

12.2

72
374
300
13

Total

61.0

628

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

2,165.0

24
71
533

Total

17.5
2,762.7

623

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

2
13

15
129
479

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




After 30
but
within 60
days.

409

Total

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

1
10

Within 10
days.

After 10
• but
within 30
days.

72

620.2

2,117.7

243.3

203.2

236.7

3,421.1

67
158
61
67
18
80

2.8
9.4
6.3

3.1

.3

103.0
7.3

29.7

9.6

13.7
32.1
3.6
7.3
17.8'
38.4
104.6

13.0
15.3

20

6
11
2
2
2
9
7

6.4
.6

32.6
91; 3
37.6
35.4
28.0
171.5
151.8

471

39

110.6

69.2

110.6

•217.5

40.3

548.2

31
283
69
154

33
6
6

84.4

118.4
13.3
27.1

230.4 i
29.6 '
25.7

461.5
43.0
•138.5

18.5

1.0

5.9

32.1
7.5

5.2

10.9
4.7
5.4

28.3

34.2
25.1
16.2
4.1
18.3

.2

83.6

1,585.2

2.1

54.9
23.0

2.6

1.0
1.4

494

FEDERAL EESEBVE BULLETIN.

SEPTEMBEK 1,1916..

Commercial paper, exclusive of open-market purchases, discounted during July by each-of the Federal Reserve Banks*,
distributed by States, and maturities as of date of discount—Continued.
[In thousands of dollars.]
Paper maturing—
Number of Number of
banks
member
accommobanks.
dated.

Districts and States.

After 30
but
within 60
days.

Within 10
days.

1.1

8.8
2.8

55.9

9.4

66.8
25.4

170,4

341.6

733.2

52.1
17.3
11.-4
39.6

55.2
115.7
376 2
69.1
15.9
187.4

124
88

Total
District No. 10—Kansas City:
Colorado
Kansas
Missouri
Nebraska
.
New Mexico
Oklahoma
Wyoming

.

.

6.6

35.9

178.7

5
16

9.2

32.6

9
303
35
938

District No. 11—Dallas:
Arizona
Louisiana
New Mexico
Oklahoma
Texas

6
11
28

2
18

3.3

25.7

24.2

80.2

3.1
56.6
363.0
31.2
15.9
44.0

52

36.7

140.4

513.8

128.6

819.5

2.5

25.7
67.2
32.1
656.1

74 4
196.6
102.3
2,108.6

781.1

2,481.9

4
7

1.9

33
544

......

11
126

1.5

21.1
118.6

15.7
25.9
295.3

622

Total
District No. 12—San Francisco:
Alaska
Arizona.. i

Washington
Total

56

53
197

Total

California
Idaho
Nevada
Oregon
Utah .

6.6

1.0
6.6

121
220

".

9
2

749

Dakota•••-.•••

Wisconsin

After 90
days.

.

District No. 9—Minneapolis—Continued.
S o u t h

After 60
but
within 90
days.

Total
commercial
paper
discounted.

After 10
but
within 30
days.

148

1.5

147.8

339.4

45.1
106.7
21.7
1,038.6
1,212.1

2
9

1.1
7.0

8.8

.

.

1
7

• •*..

261
58
10
82
23
77

10
2

6.6

24.7
1.7

43.4
1.3

14.5
2.3

89.2
5.3

2

50.4

20.5

27.8

2.6

101.3

6

2.3

5.0

65.5

8.6

81.4

519

.

20

59.3

51.9

138.0

28.0

277.2

RECAPITULATION.
Paper maturing—
Number of Number of
banks
member
accommobanks.
dated.

Districts and cities.

No.
No.
No.
No.
No
No
No.
No
No.
No.
No
No.

409
623
628
759
519
392
992
471
749
938
622
519

Total for July
Per cent




.

13
12
11
9
111
99
72
39
56
52
148
20

2,762. 7
17.1
914.1
189.0
19.0
4.0
620.2
110.6
6.6

7,621

1—Boston
2—New York
3—Philadelphia
4—Cleveland. „
•
5—Richmond
6—Atlanta .
7—Chicago
8—St Louis
9—Minneapolis
10—Kansas City
11—Dallas
12—San Francisco

Total for January-July, 1916
Total for January-July, f915

After 30
After 10
After 60
Within 10 but within but within but within
days.
60 days.
30 days.
90 days.

642

4,644.8
23.0

After 90
days.

Total commercial
paper discounted.

Per cent.

2,165.0
97.4
382.3
304.5
469.7
114.8
2,117,7
69.2
35.9
36.7
147.8
59.3

61.0
50.9
64.5
22.2
1,043.7
440.9
243.3
110.6
178.7
140.4
339.4
51.9

12.2
70.1
17.2
16.7
1,585.2
809.4
203.2
217.5
170.4
513.8
1,212.1
138.0

2.0
2.4
116.7
147.0
236.7
40.3
341.6
128.6
781.1
28.0

5,001.2
235.5
1,380.1
534.8
3,234.3
1,516.1
.3,421.1
548.2
733.2
819.5
2,481.9
277.2

24.8
1.2
6.8
2.6
16.0
7.5
17.0
2.7
3.6
4.1
12.3
1.4

6,000.3
29.7

2,747.5
13.6

4,96o.8
24,6

1,824.7
9.1

20,183.1
100.0

100.0

9,163.2
16,764.6
15,262.1

19,215.6
30,025.5

24,951.6
29,772.9

12,633.7
10,921.3

82,726. 7
85,981.8

1.5

0.3

495

FEDERAL RESERVE B U L L E T I N .

SEPTEMBER 1, 1916.

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

Total to
Dec. 31,
1915.

Federal Reserve Bank.

New York
Philadelphia
Cleveland
Richmond
Atlanta (including New Orleans
"branch).-...:
Chicago.;

July, 1916.

15,700

Total
for first
7 months
in 1916.

4,900
450,500

$17,600
13,900
89,800

$5,600
62,500
131,900
821,900

1,007,100

20,500

554,300
8,200

Total to
Dec. 31,
1915.

Federal Reserve Bank.

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

July, 1916.

Total
for first
7 months
in 1916.

$167,800

13,200
26; 800

$196,200
600
120,400
68,500
32,100

1,958,800

Total..

$17,200

87,800
160,800
74,200

199,000

2,002,. 200

Commodity paper discounted by each Federal Reserve Bank from Sept. 8, 1915, date of first discount, to July SI, 1916.
Total to
Dec. 31,
1915.

Federal Reserve Bank.

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

July, 1916.

Total
for first
7 months
in 1916.

.$2,881,400

$353,600

$5,135,500

7,032,300
99,800
25,300

782.400

4,059,200
*""l9,"866

Total to
Dec. 31,
1915.

Federal Reserve Bank.

Kansas City...
Dallas
San Francisco.

July, 1916.

Total
for first
7 months
in 1916.

239,100
37,200

$360,000
225,200
84,900

10,315,100

Total..

$360,000
2,500
26,700
1,525,?00

9,884,600

• Commodity paper discounted by each Federal Reserve Bank during the seven months ending July SI, 1916, distributed
classes.

Richmond.

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

Atlanta
(including
New
Orleans
branch).

$5,093,100
39,800

Class.

$4,055,400
900
1,000

. . .

Kansas
City.

Dallas.

$218,200

2,600

7,000

3,000

4,059,200

$300

Total.

$9,367,000
40,700
27.300
8,000
3,000
41,500
400
500
7,600
1,000
360,000
27,600

84,900

9,884,600

10,500
41,500
7,600
1,000

$360,000

1,000

5,135,500

San Francisco.

24,000

$16,800

400
500

. . .

Total

Minneapolis.

by

19,800

360,000

225,200

Amounts of commercial paper, exclusive of bankers9 acceptances, held by each Federal Reserve Bank on July 28,
distributed by maturities.

1916,

Paper maturing—
Federal Reserve Bank.

Within
10 days.

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




After 90
days.

Total.

$714,600
72,700
352,400
73,700
924,600
302,900
977,700
109,300
35,100
176,500
637,100
52,100

:

515,500
166,000
189,500
69,600
230,000
544,500
179,500
173,600
130,000
318,500
619,700
96,500

$73,700
91,600
70,100
84,600
2,054,000
1,066,600
174,900
253,500
552,900
1,350,100
172,100

97,500

318,300
838,100
2,337,600
173,800

275,800
251,600
575,900
110,000
299,300
1,458,600
60,500

$2,312,800
390,200
637,300
283,600
5,883,600
2,991,500
3,800,200
665,300
1,464,800
2,185,300
6,403,100
555,000

4,428,700

Total
Per cent

After 30
After 60
After 10
but within but within but within
30 days.
90 days.
60 days.

6,232,900

6,851,300

6,253,500

3,806,300

27,572,700

16.1

22.6

24.8

22.7

13.8

Per cent.

907,200

$8,700
59,900
15,600
19,000
1,399,200
825,900
159,900

$300
9,700
36,700

727,900

8.4
1.4
2.3
1.0
21.4
10.9
13.8
2.4
5.3
7.9
23.2
2.0

100.0

496

FEDERAL RESERVE BULLETIN.

SEPTEMBER i, 1916.

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

Bankers' acceptances.

Date.

Bankers' acceptances.

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

1915.
Feb. 22
Apr. 5
May 3 . . . .
June 7
July3....
Aug. 2 . . .
Sept. 6 . . .
Oct. 4 . . . .
JSTov. 1 . . .
Dec. 6 . . . .

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

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

20
20
132
253
275

1916.
Jan. 3
Jan.10...
Jan.17...
Jan. 2 4 . . .
Jan. 3 1 . . .
Feb. 7 . . . .
Feb. 14...
Feb. 2 1 . . .
Feb. 28...
Mar. 6....
Mar. 13...

15,494
16,492
16,908
16,348
15,834
15,681
17,581
17,661
17,436
17,182
20,323

7,160
8,057
7,655
8,070
8,174
7,876
7,985
8,194
8,755
8,670
10,032

362
370
425
363
356
336
347
392
408
408
470

10
10
10

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

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

822 23,838
938 25,857
1,010 25,998
1,441 26,222
1,510 25,874
1,456 25,349
1,851 27,764
1,841 28,088
1,841 28,440
1,781 28,041
1,631 32,456

23,838
25,857
180 26,178
180 26,402
180 27,054
489 25,838
528 28,292
460 28,548
460 28,900
462 28,503
546 33,002

iio
110
192
161
352
472
343
204
396

Trade
accept- Total
ances
bought acceptTotal. in open ances.
market.
Private

Nonmember banks.

Date.

Member
Trust
banks. compa- State
nies. banks. banks.

1916.
Mar. 20.
Mar. 27.
Apr. d..
Apr. 10.
Apr. 17.
Apr. 24.
Mayl..
May 8..
May 15.
May 22.
May 29.
June 5..
June 12.
June 19.
June 26.
July 3 . .
July 10.
July 17.
July 24.
July 31.
Aug. 7 . .
Aug. 14.
Aug. 21.

20,563
21,128
21,000
22,239
22,135
23,566
24,875
25,058
26,633
26,639
26,104
24,680
27,354
32,011
33,155
32,989
34,144
40,497
41,514
41,395
39,695
41,536
- 43,058

11,280
12,864
13,573
14,864
15,028
15,196
15,400
15,750
15,372
16,490
16,541
17,029
19,209
19,490
18,722
18,921
20,201
22,309
22,327
21,437
19,060
18,144
19,849

408
411
473
476
564
584
585
671
773
690
690
644
622
560
552
471
620
593
610
724
738
754
736

2,467
3,078
3,262
3,405
3,442
3,504
3,430
3,493
4,960
6,038
5,895
7,007
7,865
9,067
11,009
11,830
11,827
13,193
12,977
13,619
13,940
13,443
12,643

34,718
37,481
38,308
40,984
41,169
42,850
44,290
44,972
47,738
49,857
49,230
49,360
55,050
61,128
63,438
64,211
66,792
76,592
77,428
77,175
73,433
73,877
76,286

678
629
722
874
1,321
1,438
1,477
1,518
1,635
2,006
2,037
2,208
2,310
2,054
1,958
3,422
3,052
3,685
3,651
3,722
4,225
4,387
3,728

35,396
38,110
39,030
41,858
42,490
44,288
45,767
46,490
49,373
51,863
51,267
51,568
57,360
63,182
65,396
67,633
69,844
80,277
81,079
80,897
77,658
78,264
80,014

Amounts of acceptances held by the several Federal Reserve Banks at close of business on Fridays, July 28 to Aug. 18, 1916,
distributed by maturities.
[In thousands of dollars.]

Acceptances maturing—

Within 10 days:
July 28
Aug 4
Aug 11
Aug 18
From 11 to 30 days:
July 28
Aug 4
Aug. 11
Aug 18
From 31 to 60 days:
July 28

'

Aug 11
Aug 18
From 61 days to 3 months:
J u l y 28
Aug 4
A u g 11. . i
A u g 18
••— - Total acceptances held:
July 28
---Aug 4 •
. . -•
A u g 11
Aug 18
. . .




New
Boston. York

1,313

Atlanta.

Chicago.

252

1,238

53
248

Phila- Cleve- Richdelphia. land. mond.

446
353
306

2,974
2,184
2,418 . 2,484
1,788
1,657
1,194
670

1,919
1,677
1,166
972

669
427
390

3,149
2,911
3,434
3,829

3,161
5,359
6,203
7,759

2,425
2,273
3,007
3,020

1,471
1,805

400

133
542
748

658

575

5,445
4,074
2,832
2,146

11,643
12,412
13,318
15,023

3,877
4,261
4,371
3,994

2,869
3,452
3,244
3,098

300

730

299
278
67

322
101
197

1,392
1,280
2,103
3,511

10,711
9,015
7,601
5,436

3,098
2,509
2,602
2,625

2,187
1,624
1,697
1,695

12,170
10,683
10,026
10,156

28,489
29,270
28,910
29,412

11,319
10,720
11,146
10,611

7,291
6,726
6,839
6,988

922
981

225
300

300

663
910

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

710
231
191
ooq

465
216
161
33

323
161
157

1 277
687

12,880
9 289
7 121

599

208
384
451

168
125

1,457
1 785
1,753
2,071

13,185
16 400
20,208
23,879

2 576
3,487
3 264
3,001

33 168
34,680
33 594
32 888

2,381
1 341
1,332
1,097

24,242
19 150
19,589
18,897

7,691
7 300
7 517
6,559

83,475
79 519
80 512
80,'100

1,379
1,721

1,130
1,362
1,606

672

80

2,386
2,863
2,410
2,067

2,285
2,321
2,502
2,105

1,020
1,152
1 207
1,046

501

1,497
912
1,032
932

1,586
1,082
1,266
1,396

1,066
729
1,136
1,162

1,439
1,522
1,522
1,521

5,784
5,131
5,174
5,026

5,180
4,764
5,321
5,340

2,759
2,481
2 955
2,913

620

•825
599
678
725

1 168
'390

37

324
658

Total.

83

37
67
144

200

542

528
323
424
766

83

497

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

Amounts of acceptances (in the foreign and domestic trades) bought in open market by each Federal Reserve Bank during the
calendar year 1915 and the 7 months ending July 31, 1916.
[In thousands of dollars.]

Acceptances maturing—

Within 30 days:
Calendar year, 1915
January, 1916
February, 1916
March, 1916
April, 1916
May, 1916
June, 1916
July, 1916
,
Total for 7 months, 1916
After 30 days, but within 60 days:
Calendar year, 1915
January, 1916
February, 1916
March, 1916
April, 1916
May,1916
June, 1916
July, 1916
Total for 7 months, 1916
After 60 days, but within 3 months:
Calendar year, 1915
January, 1916
February, 1916
March, 1916
April, 1916
May,1916.
June, 1916
July, 1916....
Total for 7 months, 1916
Total acceptances bought:
Calendar year, 1915
January, 1916
February, 1916
March, 1916...:
April, 1916
May, 1916
June, 1916
July, 1916
Total for 7 months, 1916

Philadelphia.

NewBoston. York.

497
48

1,246
587

128
174

Atlanta
(includMinne- Kansas
St.
Cleve- Rich- ing New ChicaLouis. apolis. City. Dallas.
land. mond. Orleans
go.
Branch).

Total
for
system.

50

101
64
50

156

350

23
408
2,121
2,038
6,766

277
741
1,000
1,382
1,152
754
5,306

402
724

2,137
102
41
98
235
99
858
4
1,437

2,377
621
313
520
765
925
1,919
1,197
6,260

1,464
43
36
1,835
335
510
1,257
739
4,755

746
42
30
70
214
315
596
406
1,673

11,471
2,681
3,686
5,913
1,497
3,633
6,639
1,391
25,440

22,211
2,686
4,157
6,978
5,690
4,010
10,914
11,133
45,568

5.406
151
396
2,183
2,655
2,217
3,357
3,556
14,515

2,116
267
395
579
684
1,397
2,150
2,855
8,327

250

2,963
373
475
649
898
1,712
2,954.
3,663
10,724

250

14,105 25,834 7,565
2,831 3,894
194
3,727 5,379
709
6,011 8,178 4,759
1,732 6,478 3,990
3,860 5,343 4,109
7,671 14,954 5,766
1,395 14,368 5,049
27,227 58,594 24,576

San
Francisco.

20
503
905
1,484

220
50

62
1,023

238

41
15
480
501
503
1,205
2,745

50

113
480
613

71
71

3
24

18
214
14
15
8
269

816
279
116
150
478
166
651
849
2,689

374
43
50
146
137
327
448
294
1,445

191
6
33
44
153
126
268

46
300
65
421
234
288
818
404
2,530

4,810
489
656
787
1,092
962
1,403
1,948
7,337

1,324
357
143
355
602
1,074
1,790
2,036
6,357

1,219
200
194
365
381
502
858
1,262
3,762

4
49
355
152
691

2,980
734
1,453
1,454
1,029
2,207
4,676
4,805
16,358

750
13
13
107
277
300
1,589
619
2,918

9,057
1,204
654
3,139
3,4033,345
7,635
4,247
23,627

1,536
151
197
285
325
639
38

72
300
65
439
448
522
883
412
3,069

5,782
768
772
965
1,572
1,128
2,167
3,277
10,639

1,801
400
193
501
739
1,401
2,238
2,401
7,873

1,4,55
226
228
409
534
628
1,126
1,334
4,485

1,788
215
219
436
440
721
72

270
19

480
481

61
6
125

103

55
22
151
115
82
34
459

2,419 52,80a
7,586
304
420 10,309
18,325
459
14,067
907
1,638 16,360
2,119 30,085
2,628 27,451
8,475 124,184

1,635

2,103

3,230
323
558
566
1,188
1,987
4,063
3,399
50 12,084

50

64,845
9,524
12,416
22,918
18,499
21,912
42,397
36,503
164,169

Distribution by sizes of bills bought in the open market by all the Federal Reserve Banks during July, and for the first 7
months of 1916.
To $5,000.

T o $10,000.

Acceptances bought in
open market.

Total
Per cent
Total a c c e p t a n c e s
bought during:
June, 1916
May, 1916...
,
April, 1916
March, 1916
February, 1916,....
January, 1916
Total a c c e p t a n c e s

bought during 7
months ending July,
1916

To $50,000.

j

B
July, 1916: 1
Bankers
acceptances
Trade acceptances .

To $25,000.

To $100,000.

Over $100,000.

Total.

a

505 $1,574,611
21
58,726

418 $3,349,809

756 $12,084,876 176 $7,369,194
53
745,235 9 292,865

68 $5,065,021

676,623

29 $5,286,683 1,952 1*34,730,194 95.1
160 a 1,773,449j 4.9

526 1,633,337

495 4,026,432
11.0

809 12,830,111 185 7,662,059
21.0
35.1

68 5,065,021

29 5,286,683 2,112
14.5

56211,533,168
335 1,012,891
847,351
269
941,908
288
789,675
26;
546,959
194

737 $6,238,168
219 1,755,224
281 2,305,281
234 1,983,554
159 1,307,989
220 1,720,758

853 $13,739,638 191 $8,209,613
3,262,880
312 5,960,425
3; 896,184
313 5,420,116
4,539,671
356 6,578,432
1,830,851
196 3,548,326
4,113,726
1,857,477
21!

83 $6,763,226
5,698,417
2,697,334
5,095,263
1,613,614
1,2" """

37 $51,913,336
;
4,221,630
3,332,850
3,779,223
3,326,375

4.5

77

13.9

2,463
1,059
1,000
1,071
707

36,503,643! 100.0
100.0......
$42,397,149
21,911,467
18,499,116
22,918,051
12,416,830
9,523,513

2,441 7,305,289 2,345 19,337,406 3,056 52,190,774 783 31,258.735 345 28,217,468 137 25,860,097 9,107 164,169,769

1 Of the above total, bankers' acceptances totaling $33,922,186 were based on imports and exports, and $808,008 on domestic trade transactions.
2
All trade acceptances were drawn abroad on importers in the United States and indorsed by foreign banks.




498

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

Amount of short-term investments (municipal warrants) held by each of the Federal Reserve Banks at close of business on
Fridays, July 28 to Aug. 18, 1916, distributed by maturities.
[In thousands of dollars.]
Boston.

Warrants maturing.

Within 10 davs:
July 28 *
Aug 4
Aug 11
Aug 18
From 11 to 30 days:
July 28
Aug. 4
Aug 11
Aug. 18
From 31 to 60 days:
July 28
Aug 4
. . .
Aug. 11
Aug 18..
. . .
From 61 to 90 days:
July 28
.
.
.
Aug. 4
Aug 11
.
Aug. 18
From 91 days to 6 months:
July 28
Aug 4
.
Aug 11
Aug 18
Total municipal warrants held:
July 28
Aug. 4
Aug 11
Aug. 18

21

305

Philadelphia.

Cleveland.

10
25
25

New
York.

43
2
26

25
504
504
504

1,693
2,152
2,379

250
260
260

2,399
1,453

260
86
76
76

Richmond.

Atlanta.

3,378
3,378
3,428

243
223
203
98

3,548
412
412
209

525
84
84
87

769

645

328

1,618
2,137
2,317

1,629
1,858
2,258

1,075
1.120
1,290

972
831
851
892

1,667

2,891
1,934
1,781
1,381

1,522
839
839
669

744
753
743

2,700
2,679
2,729
2,814

7,389
7,353
7,429
7,276

2,410
2,527
2,572
2,550

4,539
4,723
4,751
4,755

Kansas
City.

Dallas.

San
Francisco.

Total.

12

12

27

25

18

25

25

25

198
27
151

25

457
7,009
7,627
8,263

320
335
405

26
112
51
87

36

25
373
348
394

421
126
111
40

124
62
98
62

47
47
47
11

738
440
440
394

9,041
3.353
3,241
2,719

1,184
1,325
1,390
1,469

206

525
575
711

195
543
468
563

109
281
281
281

240
638
659
728

4 724
8,465
9,339
10,509

2,368
1,879
1,542
1,212

1,090
771
801
666

701
342
427
332

231
71
71
71

1,231
782
888
818

12,800
8 185
7 617
6 297

4,368
4,294
4,317
4,292

1,735
1,742
1,822
1,822

1,058
1,059
l>069
1,044

424
424

2,261
2,233
2,360
2,334

27 220
27 039
27,975
17,788

25
584
559
610

1,099

818
349
239

969
741

St.
MinneLouis. apolis.

55

26

20
40
160

Chicago.

736
506
801

1,001

76

5
166
166
336
336

5

336
336

166
166

25

424
399

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

Bank.

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

Bills bought in open
Bills
market.
discounted
for
Bank- Trade
memer's
ber
accept- accept- Total.
banks. ances. ances.

Municipal warrants bought.

City.

All
State. other. Total.

90.0 100.0
1,395.4
190.0
5,001.2 i,395.4
**25."6 2,042.2
235.5 13,838.5 530.0 14,368.5 2,017.2
874.8
15.0
889.8
1,380.1 4,921.2 127.3 5,048.5
361.0
99.8 3,663.6
534.8 3,563.8
361.0
275.3
1,205.4
3,234.3 1,205.4
275.3
411.6
411.6
1,516.1
137.5 1,378.6
3,421.1 3,277.1
3,277.1 1,241.1
548.2 2,400.8
599.1 "204.'5 10.0
2,400.8
813.6
733.2 1,333.8
312.6
1,333.8 312.6
819.5
50.0
50.0
2,481.9
732.0 194.3 15.0
941.3
277.2 2,382.6 1,016.3 3,398.9

United States bonds and Treasury
notes.

2 per
cent.

3 per
cent.

4 per 1-year
cent. notes. Total.

50.0

10.0

250.0

25.0

Total: •
331.25
10.0
July, 1916.... 20,183.1 34,730.2 1,773.4 36,503.6 6,553.1 498.8 202.5 7,254.4
5,986.0
7,346.5
35.0.0
127.5
July, 1915.... 13,238.0 5,986.0
7 months ending July 31,
82,726.7 156,661.5 7,508.2 164,169.7 58,050.1 3,301.8 377.6 61,729.5 34,819.85 3,632.82 4,128.0
1916...
7 months ending July 31,
36,412.1 6,121.75 1,832.0
28,592.0
85,981.8 28,592.0




1
2

(l)
2 6.25
(3)
4 560.0
()
6 250.0
(7)
(8)

6.25

25.0

1916

1915

6,586.6
16,652.45
7,318.4
4,619.4
4,715.0
1,927.7
8,326.8
3,762.6
2,379.6
869.5
2,481.9
4,642.4

1,900.1
6,442.5
2,083.8
1,311.7
4,354.2
1,991.0
2,094.9
1,093.9
1,196.4
1,127.4
2,136.2
1,315.9

341.25 64,282.35
27,048.0
477.5
50.0

351,256.57
42,630.67

Sold $30,000 of 3 per cent conversion bonds of 1946.
Sold $272,000 of 3 per cent conversion bonds of 1946.
3 Sold $97,000 of 3 per cent conversion bonds of 1946.
Sold $205,600 of 3 per cent conversion bonds of 1946 and $200,000 1-year Treasury notes.
& Sold $82,000 of 3 per cent conversion bonds of 1946.
6
Sold $370,000 of 3 per cent conversion bonds of 1946.
7 Sold $15,000 of 3 per cent conversion bonds of 1946.
. 8 Sold $1,000 of 3 per cent conversion bonds of 1946.
4

Total investment
operations.

158,939.75
7,953.75

SEPTEMBER l,

499

FEDERAL EESEEVE BULLETIN.

1916.

FEDERAL RESERVE BANK STATEMENTS.
Resources and liabilities of the Federal Reserve Banks and of the Federal Reserve system at close of business on Fridays,
July 28 to Aug. 25, 1916.
RESOURCES.
[In thousands of dollars.]
Boston.
Gold coin and certificates in vaults:
July 2 8 . . .
Aug.4
Aug. 11.
Aug. 18
Aug. 25
<£rold settlement fund:
July28
Aug.4
Aug. 11
Aug. 18
Aug. 25.
*Gold redemption fund:
July 28
Aug.4
Aug. 11
Aug. 18
Aug. 25.
Xegal tender notes, silver, etc.:
July 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Total reserve:
July 28
Aug.4..
,
Aug. 11.
Aug. 18
.
Aug. 25
Five per cent redemption fund
against Federal Reserve Bank
notes:
July 28..
Aug.4
Aug. 11
Aug. 18
Aug. 25
Bills discounted—members:
July 28.
Aug. 4
Aug. 11
Aug.18
Aug. 25
Bills bought in open market:
July 28
Aug.4
Aug. 11
Aug.18...
Aug. 25
United States bonds:
July 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25...
One-year Treasury notes:
July 28
Aug. 4
Aug. 11
Aug. 18.......
Aug. 25
Municipal warrants:
July 28
Aug.4
Aug. 11
Aug. 18
Aug. 25
Federal Reserve notes, net:
. July28
Aug.4
Aug. 11
Aug. 18.
Aug. 25




New
York.

Philadelphia.

Cleve- Richland. mond.

Atlanta.

Chicago.

9,242
9,497
9,533
9,143

150,469
144,237
145,450
149,096
147,557

10,253
10,592
10,235
9,764
10,833

13,716
13,883
14,058
13,966
14,359

5,248
5,188
5,184
5,029
5,055

5,485
5,241
6,118
5,989
5,855

35,220
37,503
37,379
36,945
35,674

4,162
4,441
5,230
5,363
5,425

6,041
6,187
6,077
6,158
6,276

10,824 13,773 12,451
13,620 14,107 11,871
14,286 14,086 10,389
9,965 17,479 10,013
11,077 17,251 9,218

10,823
11,741
12,278
11,606
11,637

1,498 9,775
2,374 14,759
1,746 12,774
1,848 15,721
1,058 16,579

5,684
5,272
5,095
4,708
4,343

4,304 13,297
4,604 12,270
4,323 10,872
3,585 10,328
3,431 10,446

13,147
11,977
16,506
16,466
5
5
5
5
5

250
250
250
250
250

50
50
50
50
50

51
48
39
34
20

419
441
446
540
451

441
435
415
410
125

171
119
287

10,160
4,334
4.499
10,414
5,625

248
510
710
730
762

1,133
1,097
1,147
1,139
1,101

251
224
222
175
163

1,125
1,212
1,269
1,236
1,203

788
1,701
747
629
903

171,703 24,324 27,351
162,441 25,259 26,899
164,485 25,081
169,725 28,023 25,152
164,509
24,698

16,741
17,594
18,130
17,350
17,306

8,549
9,262
9,548
9,483
8,241

45,983
54,163
51,100
53,495
53,356

MinneSt.
Louis. apolis.

Kansas
City.

Dallas.

Fran
Cisco.

4,078
4,341
4,338
4,336
4,210

Total
for
system.

5,312 10,705
5,336 9,991 256,437
5,430 9,920 258,952
5,414 9,723 260,926
5,366
259,799
4,265
3,880
4,060
3,925
4,424

3,070
4,224
4,235
4,317
5,021

102,911
106,811
106,121
110,001
110,951

2,313
4,439
2,669
916
12,170
10,683
10,026
10,156
10,390

58
51
30
23
19

30
30
30
30
30

144
142
136
133
134

258
253
241
306
343

12
10
10
10
10

1,918
1,915
1,852
1,991
1,637

1,177
1,144
1,112
1,163
1,144

407
425
432
431
426

70
68
62
60
61

787
792
783
688
617

4
21
25
46
52

16,589
11,699
11,127
16,998
12,265

11,081 10,782
10/908 11,246
11,467 10,862
11,257 10,204
10,931 10,163

17,589
16,821
15,408
14,857
14,851

10,622
10,261
10,514
10,333
10,750

13,791
14,246
14,190
14,096
14,969

381,349
376,862
378,052
389,916
384,652

400
400
400
400
400

22,833
17,762
21,634
25,941
25,982

200
200
* 200
200
200

50
50
100
100
100
6,403
6,452
6,441
6,883
7,188

555
518
535
508
519

27,594
30,415
28,459
26,756
27,032
83,454
79,519
80,512
80,138
82,146

450
450
500
500
500

637
573
283
427

2S4
271
259
303
274

5,884
6,188
6,149
6,021
6,037

3,013
3,084
3,219
3,278
3,660

3,800
3,498
3,413
3,132
2,875

665
932
995
879

1,465
1,838
1,941
1,950
1,855

2,185
2,087
2,000
1,926
1,918

11,319
29,270 10,720
28,910 11,146
29,412 10,611
29,422

7,291
6,726
6,839
6,988
7,003

825
599
678
725
725

1,418
1,522
1,522
1,521
1,751

5,784
5,131
5,174
5,026
5,683

5,180
4,764
5,321
5,340
5,586

2.759
2,481
2,955
2,913
3,109

528
323
424
804
1,005

549

7,691
7,300
7,517
6.559
6,954

9,753
9,633
9,393
9,393

2,770
2,754
2,724
2,724
2,724

3,512
3,475
3,401
3,399
3,399

9,647
9,647
9,647
9,647
9,647

2,581
2,581
2,581
2,581
2,681

3,134
3,074
2,634
2.963
2;634

48,656
48,037
46,703
47,029

570
570
570
570
570

350
350
350
350
350

529
529
529
529
529

500
500
926
500
820

7,925
7,925
8,351
7,885
8,205

4,368
4,294
4,317
4,292
4,291

1,735
1,742
1,822
1,822
1,822

1,058
1,059
1,069
1,044
1,044

2,261
2,233
2,360
2,334
2,334

27,220
27,375
27,975
27,788
27,863

1,286
1,275
1,249
1,288
1,300

1,194

1,241
1,273
1,266
999

1,446
1,583
1,798
1,737
1,704

1,764
1,409
1,407
1,508
1,484

20,308
20,426
20,069
19,887
21,222

390
540
555
533
664

3,082
3,043
2,992
2,992
2,992

2,460
2,383
2,220
2,219
2,220

3,182
3,058
2,890
2,890
2,890

5,650
5,609
5,584
5,584
5,579

1,377
1,272
1,129
1,129
1,129

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

250
250
250
250
250

2,282
2,282
2,282
2,282
2,282

818
818
818
818
818

800
800
800
760
760

684
684
684
684

526
526
526
526
526

2,700
2,679
2,729
2,814
2,890

7,389
7,353
7,429
7,276
7,276

2,410
2,527
2,572
2,550
2,550

4,539
4,723
4,751
4,755
4,755

336
336
336
336

5
166
166
166

844
824
948
910
910

11,775
13,269
12,501
12,383
14,015

504
506
592
380

267
319
301
415
426

1,228

616
616 I
616
616 I
616 j
424
424
424
399
399

i
!
i
!
!

500

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

Resources and liabilities of the Federal Reserve Banks and of the Federal Reserve system at close of business on Fridaysr
July 28 to Aug. 25,1916—Continued.
RESOURCES.
[In thousands of dollars.]
Boston.

New
York.

Phila- Cleve- Richdelphia. land. mond.

Atlanta.

Chi-

St.
MinneLouis. apolis.

Due from other Federal Reserve
Banks, net:

3,043
3,287

312
272
23
84
118

454
194
245
241
362

44,504
43,494
44,147
46,318
44,811

224,942
222,573
218,627
227,114
224,037

284

Total
San
for
Francisco. system

1,278

3,267
2,940
1,560
3,759
3,115

923
1,358
857
1,325
568

1,360
1,163
607
759
518

755
514
719
500
411

570
209
256
200
544

91
102
96
78
101

27,854 17,759 80,472
26,778 17,608 81,983
27,208 17,623 83,833
26,617 17,241 84,335
26,580 17,648 85,124

27,032
26,060
25,988
27,817
27,174

22,386
23,486
23,329
23,000
22,293

32,733
31,402
31,433
30,669
30,821

21,124
21,220
20,918
20,879
22,500

2,578
2,580
2,582
2,582

3,000
3,000
3 001
3,001
3,007

2,688
2,689
2,691
2,691

3,921
3,921
3,921
3,921
3,922.

55,206
55,148
55,130
55,110

3,038
3,241
3,295
3.554
3", 826

56,542
56,607
53,259
49,717
50,099'

157
538
527

4,840

3,542
2,876
2,255
410

Dallas.

8,743
3,475
8,468
7,209
7,815

2,420

July 28
Aug. 4
Aug. 11
Aug. 1 8 . . .
Aug. 25
All other resources:
July 28
Aug. 4
Aug. 11
Aug. 1 8 . .
Aug. 25.
Total resources:
July 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25

Kansas
City.

2,555
2,761
3,194

246
196

94
166
150
92
123

390
320
315
387
390

144
105
102
126
167

43,288
43,627
43,816
45,791
45,920

48,992
46,456
47,037
47,105
47,079

1,093
842
2,298
1,799
1,789

64
320

1,389
1,704
1,780
2,501
1,981

i 12,620
119,947
U6,447
121,068:
121,654

931
753
306
383

154
193
249
232
228

5,514
4,411
3 731
3,226
3,541

416

• 251
242
216
221
196

31,239 615,090
31,177 615,367
31,598 610,799
31,201 624,193
31,923 623,611

LIABILITIES.
[In thousands of dollars.]
Capital paid in:
July 28.....
Aug. 4
Aug. 11
,
Aug. 18
Aug. 2 5 . . . . . . .
Government deposits:
July 28
Aug. 4
Aug. 11
Aug. 18
Aug.25
Member bank deposits, net:
July 28
Aug. 4
Aug. 11
Aug. 18
Aug.25..
Federal Reserve notes, net liability:
July 28
Aug. 4 . . .
Aug.ll
Aug. 1 8 . . . :
Aug.25
Federal Reserve Bank notes in
circulation:
July 28.
Aug. 4
Aug.ll.
•
Aug. 18
Aug.25.
Due to other Federal Reserve
Banks, net:
July 28
Aug. 4
Aug.ll
Aug. 18
Aug.25
All other liabilities:
July 28
Aug. 4
Aug.ll
Aug. 18
Aug.25
Total liabilities:
July 28
:
Aug. 4
Aug.ll...
Aug. 18
Aug.25




1

4,925
4,886
4,870
4,864
5,023

11,596
11,571
11,571
11,570
11,596

5,216
5,216
5,217
5,203
5,221

5,966
5,966
5,966
5,962
5,995

3,358
3,359
3,359
3,363
3,363

2,494
2,495
2,490
2,490
2,490

6,671
6,674
6,674
6,674
6,675

2,792
2,792
2,790
2,789
2,791

3,781
3,559
3,138
3,246

18,300
19,214
16,766
14,895
12,877

6,223
6,436
6,938
6,992
6,615

2,893
1,975
1,712
1,814
2,064

3,855
3,241
3,626
3,067
3,662

4,599
3,797
3,902
2,917
3,071

3,618
6,208
5,060
4,928
5,731

4,533
3,781
3,928
4,221
4,446

907
948
984

2,653
1,861
1,342
974
1,342

2,147
2,165
2,183
2,233
2,227

35,011
34,728
35,612
38,209
36,429

189,139
191,788
185,880
200,649
199,564

31,418
31,471
31,597
31,038
31,719

40,133
38,515
39,359
39,329
39,020

16,410
15,879
15,504
15,514
14,865

10,660
10,632
10,525
9,547
10,708

70.183
69,101
72,099
72,733
72,718

19,707
19,487
19,270
20,807
19,937

18,945
19,999
19,799
19,434
18,712

23,910
23,355
23,995
23,751
23,504

11,470
11,655
11,197
10,353
11,070

24,280 491,266
24,015 490,625
24,382 489,219
23,726 505,090
24,175 502,421

1,478
1,494
1,404
1,252
1,278

4,506
4,712
4,679
5,602
6,512

10,122
11,029
11,212
12,295
13,733

4,138
4,145
4,433
4,563
4,577

678
878
1,366

1,692
1,
1,691
1,691
1,690

643

5,907
4,410

312
55
178

2,492
2,299
58
62
64
66

105
99
106
107
113
44,504
43,494
44,147
46,318
44,811

373
442

224,942
222,573
218,627
227,114
224,037

43,288
43,627
43,816
45,791
45,920

1,692
1,692
1,691
1,691
1,690

170
1,402

108
110
113
48,992
46,456
47,037
47,105
47,079

27,854
26,778
27,208
26,617

17,759
17,608
17,623
17,241
17,648

262

6
10
7
13

290
305
80,472
81,983
83,833
84,335
85,124

27,032
26,060
25,988
27,817
27; 174

22,386
23,486
23,329
23,000
22,293

32,733
31,402
31,433
30,669
30,821

21,124
21,220
20,918
20,879
22,500

Items in transit, i. e., total amounts due from, less total amounts due to, other Federal Reserve Banks.

31,239
31,177
31,598
31,201
31,923

615,090
615,367
610,799
624,193
623,611

SEPTEMBER 1,

501

FEDERAL RESERVE BULLETIN.

1916.

Circulation of Federal Reserve notes at close of business on Fridays, July 28 to Aug. 25, 1916.
[In thousands of dollars.]
Philadelphia.

Cleveland.

Richmond.

Atlanta.

Chicago.

66,481
68,041
67, 613
67,270
69,345

7,888
7,833
7,783
7,462
7,410

9,632
9,566
9,512
9,605
9,438

9,260
9,169
9,153
9,084
9,419

13,760
13,704
13,599
13,533
13,236

3,395
3,378
3,370
3,363
3,358

6,678
6,348
6,299
6,274
6,257

12,774
12,754
12,927
12,906
12,885

10,314
10,939
11,769
12,623
12,864

13,753
13,849
13,689
14,714
15,930

844 11, 775
824 13,269
948 12,501
910 12,383
910 14,015

504
506
592
380
384

267
319
301
415
426

482
475
337
207

1,228
1,322
1,304
1,122
634

1,286
1,275
1,249
1,288
1,300

1,194
1,241
1,273
1,266

1,446
1,583
1,798
1,737
1,704

462
416
506
658
502

181
125
158
302
442

12,532
12,382
12,295
12,411
12,602

2,109
2,103
2,121
2,075
2,058

5,484
5,107
5,026
5,008
5,258

11,328 9,852
11,171 10,523
11,129 11,263
11,169 11,965
11,181 12,362

13,572
13,724
13,531
14,412
15,488

7,8
8,171
8,159
8; 042
8,054

152,590
152,787
153,228
154,444
156,345

13,760
11,704
11,599
11,533
11,236

3,395
3,378
3,370
3,363
3,358

6,678
6,348
6,299
6,274
6,257

12,774 8,374
12,754 9,029
12,927 9,859
12,906 10, 713
12,885 11,084

9,066
9,012
8,852
8,810
8,976

9,594
9,580
9,566
9,55.0
9,538

162, 776
162,184
162,085
162,036
163,834

1,228

1,286
1.275
1^249
1,288
1,300

1,194
1,241
1,273
1,266

1,764
1,409
1,407
1,508
1,484

20,308
20,426
20,069
19,887
21,222

New

Boston. York.

Federal Keserve notes issued to the
banks:
July 28
Aug. 4 . . . .
Aug. 11,
"....
Aug. 18.
•
Aug. 25...
Federal Reserve notes in hands of
the banks:
July 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Federal Reserve notes in circulation:
July 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Gold and lawful money deposited
with or to the credit of the Federal Reserve Agent:
July 28
Aug. 4
Aug. 1 1 . .
Aug. 18
Aug. 25
,
Carried to net assets:
July 28
Aug. 4
Aug. 11
Aug. 18.
Aug. 25
Carried to net liabilities:
July 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25




10,494
10,390
10,322
10,236
10,158

9,650
9,566
9,374
9,326
9,248

54,706
54,772
55,112
54,887
55,330

7,384
7,327
7,191
7,082
7,026

9,365
9,247
9,211
9,190
9,012

10,494
10,390
10,322
10,236
10,158

65,481
68,041
67,613
67,270
69,345

7,888
7,833
7,783
7,462
7,410

9,632
9,566
9,512
9,605
9,438

844
824
948
910
910

11,775
13,269
12,501
12,383
14,015

504
506
592
380
384

267
319
301
415
426

!,816
S,877

4,640
4,549
4,383
4,314
4,149

4,138
4,145
4,433
4,563
4,577

678
696
878

St.
MinneLouis. apolis.

Dallas.

y

'I

1,446
1,583
1,798
1,737
1,704
1,478
1,494
1,404
1,252

1,278

4,506
4,712
4,679
5,602
6,512

San
Total
Franfor '
cisco. system.

9,594
9,580.
9,566
9,550
9,538

174,023
175,551
175,602
176,620
179,838

1, 764, 21,433
1,409 22, 764
1,407 22,374
1,508 22,176
1^484 - 23,493

10,122
11,029
11,212
12,295
13,733

502

FEDERAL RESERVE BULLETIN.

.SEPTEMBER 1,1916..

Statement of Federal Reserve Agents' accounts at close of business on Fridays, July 28 to Aug. 25, 1916.
[In thousands of dollars.]

Boston.

Federal Reserve notes:
Received from comptrollerJuly 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Returned to comptroller—
July28..
Aug. 4 . . . .
Aug. 11
Aug. 18...
Aug. 25
Chargeable to Federal Reserve
Agent—
Aug. 4
Aug. 11
Aug. 18
Aug. 25
In hands of Federal Reserve
AgentJuly 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Issued to Federal Reserve
Bank, net—
July 28
Aug. 4
Aug. 11
Aug. 18.
Aug. 25
4
Amounts held by Federal Reserve
Agent:
In reduction of liability on outstanding n o t e s Gold coin and certificates
on h a n d July 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Credit balances in gold redemption fund—
July 28
Aug.4
Aug. 11
Aug. 18
Aug. 25
Credit balances with Federal Reserve B o a r d July 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25.
As security for outstanding
notesCommercial p a p e r July 28
Aug. 4
Aug. 11
Aug. 18
Aug. 25
TotalJuly 28
Aug.4
Aug. 1 1 . ,
Aug. 18
Aug. 25
Memorandum:
Total amount of commercial
paper delivered to Federal
Reserve A g e n t July 28
Aug.4
Aug. 11
Aug. 18
Aug. 25




New
York.

Philadelphia.

Cleve- Richland. mond.

Atlanta.

Chi-

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

121,240
121,240
121,240
121,240
121,240

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

15,160
15,160
15,160
15,160
15,160

17,000
17,000
17,000
17.000
17;ooo

20,400
20,400
20,400
20,400
20,400

9,380
9,380
9,380

9,600
9,600
9,600
9,600
9,600

19,000
19,000
19,000
19,000
19,000

3,666
4,170
4,238
4,324
4,402

36,959
37,399
37,827
38,170
38,595

3,872 2,028
3,927 .2,094
3,977 2,148
4,298 2,255
4,350 2,422

4,340
4,431
4,597
4,666
4,831

2,544
2,600
2,705
2,771
2,838

1,104
1,121
1,129
1,136
1,141

1,160
1,490
1,539
1,564
1,581

396
416
443
464
485

16,714
16,210
16,142
16,056
15,978

84,281
83,841
83,413
83,070
82,645

11,608
11,553
11,503
11,182
11,130

13,132
13,066
13,012
12,905
12,738

12,660 17,856
12,569 17,800
12,403 17,695
12,334 17,629
12,169 17,562

8,276
8,259
8,251
8,244

8,440
8,110
8,061
8,036
8,019

6,220
5,820
5,820
5,820
5,820

17,800
15,800
15,800
15,800
13,300

3,720
3,720
3,720
3,720
3,720

3,500
3,500
3,500
3,300
3,300

3,400
3,400
3,250
3,250
2,750

4,096
4,096
4,096
4,096
4,326

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

10,494
10,390
10,322
10,236
10,158

66,481
68,041
67,613
67,270
69,345

7,888
7,833
7,783
7,462
7,410

9,632
9,566
9,512
9,605

9,260
9,169
9,153
9,084
9,419

,13,760
13,704
13,599
13,533
13,236

3,395
3,378
3,370
3,363
3,358

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

60,316
62,316
62,316
62,316
64,816

4,090
4,090
4,090
4,090
4,090

9,040
9,020
8,920
9,060
8,840

794
690
622
536
458

6,165
5,725
5,297
4,954
4,529

438
383
533
482
430

592
546
592
545

7,888
7,833
7,783
7,462
7,410

13,320
13,320
13,320
13,320
13,320

298,520298,520
299,520
300,520
302,660

1,173
1,238
1,308
1,354
1,383

2,898
2,952
3,112
3,154
3,187

926
940
954
970

61,066
62,77863,977
65,126
66,197

18,604
18,584
18,557
18,536
18,515

12,807
12,742
13,672
14,126
15,237

20,682
20,628
20,468
20,926
21,893

12,394
12,380
12,366
12,350
12,388

237,454
235,742'
235,543
235,394
236,463

1,762
1,762
1,762
1,762
1,762

5,830
5,830
5,630
5,630
5,630

2,493
1,803
1,903
1,503
2,373

6,929
6,779
6,779
6,212
5,963

2,800
2,800
2,800
2,800
2,800

63,431.
60,191
59,941
58,774
56,625-

6,678
6,348
6.299
6,274
6,257

12,774
12,754
12,927
12,906
12,885

10,314
10,939
11,769
12,623
12,864

13,753
13,849
13,689
14,714
15,930

9,594
9,580
9,566
9,550
9,538

174,023
175,551
175,602
176,620
179,838

10,820
10,720
10,920
10,920
10,920

4,550
4,270
4,270
4,270
4,270

8,040
8,040
7,940
7,940
7,940

604
684
657
636
615

524
459
389
743
714

682
640
806

3,300
4,300
5,200
5,700
6,100

330
280
230
230
230

1,940
1,910
1,910
1,910
1,780

4,687
4,837
4,837
5,904
6,954

10,314
10,939
11,769
12,623
12,864

13,753
13,849
13,689
14,714
15,930

1,943
1,916
1,923
1,919
1,850

5,766
6,452
6,114
6,620
7,194

760
704
599
1,533
1,466

305
298
283
278

378
348
299
274
357

3,090
3,080
3,080
3,080
3,080

3,450
3,150
3,150
3,150
3,050

230
349
383
314
'449

4,620
4,620
4,770
4,770
5,270
66,481
68,041
67,613
67,270
69,345

23,580
23,580
23,580
24,080
25,080

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

1,000
1,000
1,000
1,000
1,370

13,980
13,980
14,980
15,480
16,620

4,410 12,000
4,200 10,000
4,000 10,000
4,000 9,000
3,700 8,400

3,360
3,360
3,160
2,890
2,890

10,494
10,390
10,322
10,236
10,158

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

9,632
9,566
9,512
9,605
9,438

2,000
2,000
2,000
2,000

9,260
9,169
9,153
9,084
9,419

13,760
13,704
13,599
13,533
13,236

5,558
5,619
6,109
6,002
6,001

2,006
2,006
2,006
2,003

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

3,395
3,378
3,370
3,363
3,358

6,678
6,348
6,299
6,274
6,257

12,774
12,754
12,927
12,906
12,885

110,406
112,006
112,006
112,146
114,796
344
330
316
300

11,830
11,208
10,659
11,240
11,138

i,250
•,250
i,250
i,250
1,100

40,540
38,970
39,420
38,650
37,900-

11,247
13,367
13,517
14,584
16,004
9,594
9,580
9,566
9,550
9,538

174,023
175,551
175,602
176,620
179,838

13,267
15,993
16,152
16,547
17,048

503

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

GOLD IMPORTS AND EXPORTS.
Imports of gold, by customs districts, Jan. 1 to Aug. 18, 1916.

Total.

St. Lawrence.

Ohio.

Michigan.

Dakota.

Buffalo.

Washington.

Southern California.

San Francisco.

Alaska.

Laredo.

El Paso.

Arizona.

New Orleans.

Florida.

New York.

Maine and New
Hampshire.

[In thousands of dollars.]

Week ending July 28.

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

4

2

12
239
35

2

286

4

7
340

2
7

9

18

Ill

3

11
115

122
140

111

126

125

1
3

4
155
2

52

56
92

251

4

161

52

148

10

47

80

37
566
35

10

4

90

37
88
3

90

7

60

889

Week ending Aug. 4.

Ore and base bullion
Bullion, refined..
United States coin
Foreign coin
Total.

2,502

189
3,109
2
34

2,502

3,334

34
381

7

60

4

20

Week ending Aug. 11.

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

104

27

3

239
33
19

13
2

395

27

3

2

84

21

6

298
38
24 886 25,274
33
19

38
147

1

47

13

80

24

39

185

4

20

26

9

24,886

25,662

Week ending Aug. 18.
Ore and base bullion
United States mint or assay
office bars
Bullion, refined

10
208

334

21

9

1

1 1,559
Ore and base bullion
United States mint or assay
office bars
Bullion, refined...
20,000 19,795
United States coin
148
I 28,609
Foreign coin

246

359

70

Total

194

218

3

250

218

199 5,005

220

144
160 4,861

144
5,676
26

9

6,040

Jan. 1 to Aug. 18.

Total....

20,002 50, 111

41

5
9

41

260

165

133

36

1,123 3,306
3
4,867

492

106

165 1,194 9,681

Excess of gold imports over export s for 33 weeks, Jan. 1 to Au g. 18,1916...
Excess of gold imports ovei• exports for coiTespon dingp eriod, 1915




68 1,508

3 2,152

597

217 1,223

28 3,430 9,390

3

8,171
2,697
146,868 198,605
2,029
1,777
39,482 72,968

2,697
25 1,223 6,096
55
217 1,223

3 188,127 284,470
203,071
188,838

504

FEDERAL RESERVE BULLETIN".

SEPTEMBER 1,1916.

Exports of gold, by customs districts, Jan. 1 to Aug. 18, 1916.
[In thousands of dollars.]

1

IT

i

ll
Week ending July 28.

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

3,401

25

50

1
6
3,478

3,401

25

50

3,485

Week ending Aug.

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

20
55 7
1
235
50

19
545

101
50

132
132

13

Week ending Aug. 11.

Bullion, refined, domestic.
United States coin
Foreign coin
Total

107
2,174

17

108
2,191

2,281

17

2,305

Week ending Aug. 18.

United States mint or assay office bars.
Bullion, refined, domestic
United States coin
Foreign coin
Total
Jan 1 to Aug. 18.
Ore and base bullion
United States mint or assay office bars.
Bullion, refined:
Domestic.
Foreign
United States coin
Foreign coin
Total




388
513
731
27

387

490
720
15

22
10
12
388

1,225

34

127 i

12

6,747

758

1,659

10

68
82

209
-8,1C6

518

271

15

125 17,377

15

125 24,938~

50

5.827
1,443
46.154
19,660

113
178

465

15

1 12,987

760

81,399

10

12

50

51,817

1 1,020
1,422

750

3

701

4,805
1,438
26,721
18,095

23

10

505

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

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

Bills bought
in open
market.

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

SI, 562,551
344,968
721,273
419,584
5,599,316
2,858,091
3,471,666
665,703
1,266,700
2.011,452
5,964,916
535,000

$12,148,806
26,484; 235
10,990,278
6,595,523
1.172,352
I) 461,882
5,693,268
4,654,930
2,465,600
753,798

Total...

25,421,220

80,263,672

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

Municipal warrants.

$4,051
1,175
2,406
1,515
19,832
10,1S5
12,015
2,460
5,166
8,176
22,202
2,193

$21,484
51,523
20,255
11,966
3,140
2,830

$6,093
16,401
6,011
11,540
547

Pi 736

10,247
3,838
2; 549
1,010

14,737

91,376

150,452

8,908
4,496

1,377

United
States
bonds.

One-year
Treasury
notes.

Total.

$250,000
2,282,000
818.000
929.032
684; 000
438,903

2,276,000

$3,077,161
2,696,495
3.172,613
5,724,326
1,374,355
1,595,097
9,753,100
2,768,516
3,512,600
9,647,250
2,974,234
3,114,000

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

$19,645,518
38,797,792
18,119,076
18,449,856
9,042,303
6; 353,973
23,304,948
10,222,864
8,664,800
13,486,963
9,468,150
14,268,000

26,. 762,669

49,409,747

7,966,935

189,824.243

$2, 607,000
990,094
2, 416,912
4. 781,391
212,280
386,914
563,715
069,900
458,463

7; 843,000

Calculated annual rates of earnings from—

Earnings for July from—
Bills disBills
counted, bought
memin open
bers.
market.

United
States
bonds.

Municipal
warrants.

One-year
Treasury
notes.

Total.

$625
5,705
2,068
2,333
1,729
1,109

5,204

$5,402
6,737
5,678
12,471
2,865
3,205
20,328
5,118
6,395
17,288
4,752
5,631

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

$37,655
81,541
36,418
, 39,825
28,113
17,329
52,326
21,765
19,481
29,408
28,291
29,015

63,440

95,870

20,029

421,167

Bills
Bills discounted, bought
in open
memmarket.
bers.

Municipal warrants.

United
States
bonds.

One-year All inTreasury vestment
operanotes.
tions.

Per cent. Per cent. Per cent. Per cent. Per cent. Per cent
3.06
2.76
2.09
2.07
2.95
2.26
4.02
2.77
2.30
2.95
2.95
2.48
3.93
2.93
2.17
2.11
2.98
2.37
4.26
2.85
2.14
2.57
2.95
2.55
4.18
3.04
3.16
2.46
2.98
3.67
4.21
2.28
2.37
2.98
3.22
4.09
2.02
2.46
2.65
2.76
4.52
2.26
2.18
2.51
2.90
2.98
4.81
2.15
2.15
2.65
2.81
2.95
4.80
2,18
2.12
2.57
3.00
4.65
2.00
3.60
3.00
4.83
2.17
2.41
2.22
2.70
3.00
2.21

2

Of)

2.29

2.97

Trade acceptances.
Maturi- Maturi- Maturi- AgriculMaturities of tural and
ties of
ties of
ties of
over 60 live-stock
over 10
over 30
Over 60
to 90
10 days
To 30
To 60
to 30
to 60
paper
to 90
and less. days, in- days, in- days, in- over 90 days, in- days, in- days, inclusive. clusive. clusive.
clusive. clusive. clusive.
days.

Commodity
paper.

4.24

2.62

DISCOUNT RATES.
Discount rates of each Federal Reserve Bank in effect Sept.

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

1,1916.

Paper
bought
in open
market.

43

?
3*

3-5

1 Rate for commodity paper maturing within 90 days.
2
Rate for bills of exchange in open-market operations.
3 Rate for trade acceptances bought in open market without member bank indorsement.
4 A rate of 2 to 4 per cent for bills with Or without member bank indorsement has been authorized.
s Rate for commodity paper maturing within 30 days, 3 | per cent; over 30 to 60 days, 4 per cent; over 60 to 90 days, 4J per cent; over 90 days,
5 per cent.
NOTE.—Rate for bankers' acceptances, 2 to 4 per cent.




506
Individual

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1916.

;, loans and discounts; also reserves of all national banks and ratios of reserves to loans, 1910 to 1916.
[In millions of dollars.]
(1)

(2)

(3)

(4)

Total
amounts
Individual Loans. Vault due from
reapproved
deserves. Reserve
posits.
Agents.

June
June
June
June
June
Juno
May
June

30, 1910
7, 1911.
14, 1912
4, 1913.
30, 1914
23, 1915.
1,1916..
30, 1916,

5,287.2
5,478.0
5,825.5
5,953.5
6,268.7
2 6,453.8
2 7,975.3
2
7,968.2

5,430.2
5,610.8
5,953.9
6,143.0
6,430.1
6,660.0
7,606.4
7.679.2

853.8
979.9
979.7
949.4
969.1
789.8
777.4
758.0

660.4
765.7
778.9
762.2
777.5
737.9
954.8
842.4

(5)

(6)

(7)

(8)

Amounts
Amounts in
with
vault and due
With
Total from approved
approved Federal
Reserve Reserve reserves Reserve Agents
Agents
Bank. 3+5+6. and Federal
available
Reserve Bank
as reserve.
3+4+6.
1461.2
.1498.2
1525.4
i 543.5
i 577.1
3 280.1
4 268.3
5 208.5

312.6
428.2
476.1

1,315.0
1,478.1
1,505.1
1,492.9
1,546.2
1,382.5
1,473.9
1,442.6 j

1.514.2
1,745.6
1,758.6
1,711.6
1,746.6
1,840.3
2,160.4
2,076.5

(9)

(10)

Ratio of combined vault
Ratio of reserve and
amounts due
total
reserves from approved
to loans Agents and
Federal Re7-4-2.
serve Bank to
loans 8-^2.
24.2
26.3
26.3
24.3
24.0
20.8
19.4
18.8

27.9
31.1
29.5
27.8
27.2
27.6
28.4
27.0

Ratio of
vault and
Federal
Reserve
Bank
reserves
to loans

15.7
17.5
16.5
15.5
15.1
16.6
15.8
16.1

1 Not exceeding 50 per cent of reserve required by reserve city banks and not exceeding 60 per cent of reserve required by country banks.
2 Aggregate of time and demand deposits, exclusive of United States deposits, postal savings deposits, and State and municipal deposits.
3
4 Not exceeding six-fifteenths of reserve required by reserve city banks and not exceeding five-twelfths of reserve required by country banks.
Not exceedingfive-fifteenthsof reserve required by reserve city banks and not exceeding four-twelfths of reserve required by country banks.
s Not exceeding four-fifteenths of reserve required by reserve city banks and not exceeding three-twelfths of reserve required by country banks.




INDEX.
Page.

Acceptances, distribution of, by sizes, maturities,
etc
496-498
Acceptances to 100 per cent
438
Advisory Council, meeting of
438
Amendments to Act passed by Congress
439-442
Business conditions throughout the Federal Reserve districts
468-490
Summary of
465
Charters granted national banks
448
Clayton Act, applications under Kern amendment
to
446-447
Clearing plan, operation of
444-448
Commercial failures in July
447
Commercial paper, article on
449-452
Committees of Board, reassignments to
448
Discount rates in effect
505
Discounts, distribution of
491^95
Earnings on investments of Federal Reserve
Banks
505
Federal Reserve Act and the farmer
442
Federal Reserve Act, amendments to, passed by
Congress
439-442
Federal Reserve Agents' accounts, statement of...
502
Federal Reserve Bank statements
499-502
Federal Reserve notes, circulation of
501
Fiduciary powers granted
:
447
Gold imports and exports
503, 504
Gold settlement fund
453-455
Governors of Federal Reserve Banks, conference of,
in Boston
437
Hamlin, Hon. C. S., appointed for 12-year term
437




Harding, Hon. W. P. G., designated as governor of
board
437
Hearing of Wisconsin and Michigan banks
438
Individual deposits, loans, and discounts of national
banks
506
Informal rulings of the board:
Check clearing
>
456
Banks as transfer agents
456
Discounts and the note tax
456
Limitation on rediscounts
457
Checks and orders for exchange
457
Computing interest on loans
457
Cotton drafts
458
Law department:
Negotiability of bills and notes made payable
in exchange
459
Discount rates
461
Bill of exchange drawn by drawee
462
Qualified acceptances
463
Lightcap, H. B., elected as class B director of New
Orleans branch
438
Member banks granted full acceptance powers
438
Norris, George W., resignation of, as class C director
of Philadelphia bank
438
Operation of clearing plan
444-446
Resources and liabilities of Federal Reserve
Banks
499,500
Summary of business conditions
465
Warburg, Hon. P. M., designated as vice governor
of board
437
Warehouse and storage conditions
448-449
Work of the board
437

O

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