Full text of Federal Reserve Bulletin : September 1916
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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