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FEDERAL RESERVE
BULLETIN

ISSUED BY THE

FEDERAL RESERVE BOARD
AT WASHINGTON

SEPTEMBER, 1918

WASHINGTON
GOVERNMENT PRINTING OFFICE
1918

FEDERAL RESERVE BOARD,
W. P. G. HARDING, Governor.
EX OPFICIO MEMBERS.
WILLIAM G. MCADOO,
Secretary of the Treasury,

, Vice Governor,
Chairman.

JOHN SKELTON WILLIAMS,
Comptroller of the Currency.

ADOLPH C. MILLER.
CHARLES S. HAMLIN.

J. A. BRODERICK, Secretary,

M. C. ELLIOTT, Counsel.

L. 0. ADELSON, ]

II. PARKER WILLIS,
Director Division of Analysis and Research.

__ _

}Assistant Secretaries.

W. T. CHAPMAN,/
W. M. IMLAY, Fiscal Agent,
M. JACOBSON, Statistician.

F. I. KENT,
Director Division of Foreign

Exchange.

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 b© made to the
Federal Reserve Board. Member banks desiring to have the
Bulletin supplied to their officers and directors may have it sent
to not less than ten names at a subscription price of $1 per annum.
No complete sets of the Bulletin for 1915 or 1916 are
available. Bound copies ot the Bulletin for 1917 may be had at
$5 per copy.

TABLE OF CONTENTS.
Page.

Review of the month
Index of wholesale prices
Discount and interest rates prevailing in various cities
Retirement of Hon. Paul M. Warburg as member of the Federal Reserve Board
Change in the secretaryship of the Board
Election of directors of banks in Boston, New Orleans, and Memphis
Silver at §1.01} per ounce
Foreign banking development
Remittances and clearings under the Federal Reserve system
Reports of total bank transactions
Loans for relief of banks and individuals in crop-raising sections of the West and Southwest
Foreign-exchange situation
Foreign-exchange rates
Charts showing
Holdings by the banks of Treasury certificates of indebtedness
War-revenue legislation
Progress in curtailment of nonessentials
Development of the acceptance business during 1918
The savings banks and Liberty bonds
Commercial failures reported
Fiduciary powers granted to national banks
State banks and trust companies admitted to the system during the month
Charters issued to national banks
Banks granted authority to accept up to 100 per cent of capital and surplus
Lost and recovered Liberty bonds
Informal rulings of the Federal Reserve Board
Rulings of the Division of Foreign Exchange
Law department
Business conditions throughout the Federal Reserve districts
Gold settlement fund
Operation of the Federal Reserve clearing system..
Discount operations of the Federal Reserve Banks
Resources and liabilities of the Federal Reserve Banks
Federal Reserve note accounts of Federal Reserve Banks and agents
Member bank condition statement
Earnings on investments of Federal Reserve Banks
Gold imports and exports
Discount rates in effect
Estimated stock of money in the United States
Abstract of condition of member banks

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FEDERAL RESERVE BULLETIN
VOL. 4

SEPTEMBER 1, 1918.
REVIEW OF THE MONTH.

The Secretary of the Treasury on August 1
fixed the time of the next or
^ iouTth I ^ e r t y * oa n campaign.
The campaign will begin September 28 and end October 19, subscriptions
to the loan closing on the latter date. The
Secretary of the Treasury has stated that the
rate of interest, as in the case of the last loan,
will be 4J per cent.
With the experience of the first three Liberty
loans behind them, the banks and the managers
of the various local organizations know much
better than ever before what they must do
and by what methods they can hope to attain
greatest success. Wide as was the distribution of the third Liberty loan, it is now even
more essential than before that a large and
active body of subscribers to these bonds shall
be developed.
The fourth issue of Treasury certificates
New issues of b e i n £ m a d e i n anticipation of
Treasury certifi- the new Liberty loan, was
cates
offered under date of August 6.
The results, as in the case of its predecessors,
showed a substantial oversubscription, amounting in this case to $75,706,500. Nine of the
twelve Federal Reserve districts oversubscribed
their quotas. The quotas (in round numbers)
and subscriptions by districts were as follows:
Federal Kcserve Back.
United Stales Treasmy.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total

Quota.

Subscription.

§43,300,000 |
109,600,000 |
35,300,000 i
45,300,000 i
17,300,000 !
14,600,000 !
70,000,000 I
20,000,000 |
17,300,000 i
20,000,000 !
12,000,000 j
35,300,000 I

$4,581,000
49,509,000
207,287,000
38,400,000
52,500,000
14,397,000
14,968,500
87,292,500
24,056,000
12,260,000
25,126,000
7,579,500
37,750,000

500,000,000

575,706,500

No. 9

A fifth offering of certificates was made on
August 23. Data showing the distribution of
subscriptions are not yet available.
The experience with the four issues of Treasury certificates of indebtedness shows that
the certificates are being widely and liberally
taken up by the banks in response to the policy
announced by the Secretary of the Treasury
some weeks ago. It is in further pursuit of
that policy, as described in the FEDERAL
RESERVE BULLETIN for June, that the Secretary has also announced on August 16 the
offering of an indefinite amount of certificates
of indebtedness designed for purchase by taxpayers who wish to provide themselves with
the means of settling their obligations to the
Government when the new revenue bill shall
have been enacted and put into actual operation. The new certificates, like the former
issue, bear interest at the rate of 4 per cent
per annum, dating from August 20, 1918, and
are payable July 15, 1919. In other respects
they are similar to those which were issued
during the first half of the year 1918. Preliminary estimates are that from two to three
billion dollars of these tax-paying certificates
can be disposed of, but the amount is obviously dependent in some measure upon the
provisions of the now war-revenue legislation,
which has not yet boon enacted.
The pressing need of a wise utilization of resources in very much larger
Need of conserdegree than at present was
vation.
never so strongly marked as now,
at a time when the Government is embarking
upon a fiscal program far greater in scope than
anything that has before been attempted in the
United States. Discussion in Congress during
the past month has clearly indicated the necessity of obtaining the cooperation of all elements in the community in order to carry out
the Government's program. Some of those
S01

802

FEDEBAL RESEEVE BULLETIN".

who have undertaken to estimate the surplus
income of the country which could "be made
available for the use of the Government, have
tentatively reached the conclusion that there
was last year $18,000,000,000 of margin between production and consumption. The
Government now seeks to obtain the great
total of $24,000,000,000, thus requiring, if these
early estimates were approximately correct,
that $6,000,000,000 at least must be secured
either by (1) more intense production or by
(2) increased economy in consumption. While
every effort is being made to "speed u p "
production, the latter is the method to which
we must mainly look for increase of total
available financial resources, inasmuch as the
country's productive powers are already being
applied in so high a degree, while further additions thereto are rendered more difficult at a
time when less capital is available for new investment and when labor is being continuously
drawn upon for the strengthening of our armies.
There is still a very large field for the reduction
of consumption in practically every part of the
country, and the degree of success to be attained
in the application of our fiscal and financial
measures during the coming year will very
largely depend upon the extent to which the
consumers and taxpayers of the country are
willing to make their resources actually
available for Government use through a process
of genuine saving.
Some progress in the curtailment of nonessential credit is already being
Curtailment of
noted
in various Federal Re"nonessentials/'
serve districts. Still more important is the apparent tendency on the part
of consumers themselves to reduce their purchases of articles which can not be considered requisite to their welfare or which can
at least be reduced in amount without doing
serious harm to the condition of the consumer. Not long ago the Council of National
Defense undertook a general investigation
for the purpose of ascertaining whether purchases by civilians in the United States had
been increasing or decreasing during the war
period. One result of the investigation was

SEPTEMBER 1,1918.

afforded by a statement made by a large and
representative concern which compiled actual
data to show the amount of goods purchased
during the first five months of 1917 and the
same period of 1918. The outcome showed a
decrease in purchases of clothing, men's furnishing goods, various articles of women's
wearing apparel, shoes, household furnishings,
toilet articles, books, stationery, and other
articles. There was a marked increase in men's
working clothing and in one or two obviously
luxurious lines of goods.
"The company expresses the belief (and this
opinion is presented simply as the estimate and
impression of this firm) that economy is being
practiced by well-to-do persons and those of
moderate means, while the increased compensation that is being received by large numbers
of people who have previously been somewhat
more restricted in purchasing capacity has
made it possible for them to buy more freely
now of the articles that might be considered
luxuries.
" Discussing the question from the standpoint of geographical location, the company
says that in the South, especially through the
cotton-growing States, business is better than
ever before, and purchases of all classes of
goods are being very freely made.
"In the far Wast the civilian population,
while not so liberal in expenditures as in the
South, is buying freely and in greater quantities than in previous years.
"In the northern States of the Middle West
buying is more conservative and more restricted
to staples and necessities, but the volume is at
least equal to the average during the previous
one or two years.
"In the East there is a rather marked
decrease in quantity of purchases, especially
in so-called nonessentials; in fact, it is even
quite noticeable in what are usually classed as
necessities."
While there has been some decline in reserve
percentages during the month
The reserve
of August—from 58.7 per cent
situation.
to 56.4 per cent—cash holdings
of Federal Reserve Banks have shown an in-

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

crease of $32,044,000, bringing them to 82,066,962,000. The reduction of reserve percentages
is a natural incident of financial conditions
such as now confront the Nation, in which the
burden gradually assumed by the banks as a
result of public financing increases from month
to month up to the time when certificates are
refunded into long-term bonds. Much has
been done toward the strengthening of the
reserves through the gradual accumulation of
gold in the reserve institutions, and this process
is steadily continuing, being aided in part by
the voluntary deposits of State member banks
and in part hy the gradual transfer of gold
received by the Treasury Department. There
is undoubtedly a large quantity of gold still in
the vaults of banks and possibly to a slight
extent in circulation in certain parts of the
country. This may be counted upon in some
measure to furnish a means of enlarging the
gold holdings of the Federal Reserve Banks as
time goes on. Meanwhile the best protection
to their reserves will be furnished by the
adoption of as conservative a policy as possible
in connection with long-period advances. The
question of renewals of loans at member banks
for the purpose of carrying bonds is therefore
one that should have constant attention. By
whatever means the result may be accomplished, it is incumbent upon both individuals
and banks to reduce their requests for credit to
the minimum possible amounts, for the strength
of our banking situation is not dependent
merely upon the quantity of gold the Federal
Reserve Banks control, but is determined
likewise in no small degree by the character of
their other assets.
Further increases in discount operations by
the Federal Reserve Banks folp

ft°

^£T

serve Banks.

sLf l o w i n § t h e J u l y 2 3

and A u u s t

6 Treasury certificate issues
and considerable withdrawals
of funds from New York by correspondent
banks in the interior of the country are indicated by comparative weekly figures of principal earning assets for the period between July
19 and August 23.

803

Between these two dates the banks increased
their total holdings of discounted paper hy
190.4 millions, the New York bank alone reporting an increase of 143.2 millions of discounted bills hekk Holdings of war paper, i. e.;
member banks' notes secured by Government
war obligations and customers' paper similarly
secured, increased 252.1 millions, the corresponding increase for the New York bank alone
being 143.3 millions. It is evident, therefore,
that the period under review witnessed net
liquidation in some volume of commercial paper
proper, largely by the New York bank. The
banks at Boston, Cleveland, Richmond, St.
Louis, and Kansas City report reduction of total
discounts on hand, though Richmond and Kansas City show increases in their holdings of war
paper. Since July 19, when the share of such
paper in the total discounts on hand was about
50 per cent, this proportion has gone up to 61.2
per cent. For the New York bank an increase
in this proportion from about 64 to 73.3 per cent
is noted.
Acceptances on hand show an increase from
205.9 to 236.5 millions, the New York and
Cleveland banks reporting substantial additions
to their holdingsof acceptance paper. Holdings
of United States short-term obligations outside
of New York remain practically unchanged.
For the New York bank the increase of about 7
millions in short-term obligations includes an
investment by the bank in 4 millions of 1-year
2 per cent Treasury certificates to secure Federal Reserve bank note circulation. The considerable reduction in United States long-term
bond holdings is due largely to the redemption
by the Treasury on August 1 of over 8 millions
of 1908-18 3 per cent bonds held by the Federal Reserve Banks.
During the period under review the banks7
gold reserves gradually increased from 1,975.4 to
2,003.1 millions, while their net deposits went up
from 1,566.6 to 1,594 millions. Federal Reserve
notes in actual circulation show an increase of
203.8 millions and aggregated 2,032.8 millions
on August 23. The ratio of cash reserves to
aggregate net deposit and Federal Reserve note
liabilities declined from 59.8 to 56.7 per cent.

804

FEDERAL BESEKVE BULLETIN.

In the following table are shown the changes
between July 19 and August 23, 1918, in the
total discounted and purchased bills held by
each of the Federal Reserve Banks, also changes
between the two dates in the holdings of other
classes of investments.

SEPTEMBER 1,1918.

millions on August 9, followed by a slight decrease to 551.9 millions on August 16. United
States bonds other than circulation bonds
show a gradual reduction from 296.1 millions
to 259.7 millions, while loans secured by
United States war obligations show a decline
for the period from 274 millions to 251.2 mil[In thousands of dollars; i. e., 000 omitted.]
lions. A similar development is shown for the
Net in- Net de- Greater New York member banks, which report
Aug.
23.
July 19.
Federal Bescrve Bank.
crease. I crease.
an increase of about 96 millions in certificates
93,854
17,002 as against moderate reductions in United States
Boston
110,856
677,685 163,954
New York
513,731
bonds and loans secured by United States war
96,218
84,066
12,152
Philadelphia...
108,623
106,070
2,553
Cleveland
obligations.
62,155
60,982
1,173
Richmond
50,087
37,391
12,696
Atlanta
224,343
14,514
Aggregate holdings of United States securi209,829
Chicago
49,622
59,643
St. Louis
10,021
64,723
ties, exclusive of circulation bonds, and of loans
51.809
Minneapolis
12,914
62,618
68;989
Kansas City
"*6," 371
43,551
secured by United States war obligations show
33,402
10,149
Dallas
96,842
72,510
24,332
San Francisco.
an increase during the five-week period from
Total
I 1,409,278 1,630,321 221,043
1,778.3 millions to 2,003 millions, or of 12.7
United States long-term sccuri- j
ties
i
9,635
40,259
30,624
per cent. For the same period the central
United States short-term se7,121
curities
,
23,479
16,358
62
Other earning assets
36 reserve city banks show an increase in this
composite item from 1,013.5 millions to 1,062.8
Total investments held.. j 1.465.!
1,684,486 218,493
millions, or of 4.8 per cent, and the Greater
Member bank reports from about 100 leading New York banks an increase from 834.6 milcities showing principal assets lions to 885.2 millions, or of over 6 per cent.
member*banks. a n d liabilities for each week beAggregate loans and investments, exclusive
tween July 12 and August 16 of fixed investments, of all reporting banks,
indicate a relatively moderate increase of 243.5 rose from 12,556.9 millions to 13,002.7 milmillions in the banks' holdings of Treasury cer- lions, while the combined share of United
tificates, notwithstanding the issue during the States war obligations and of loans secured by
period of over 1,900 millions of Treasury cer- such obligations in the totals just given rose
tificates. Largest holdings of these certificates from 14.2 to 15.4 per cent. For the central
are reported under date of August 9, viz, 1,017.3 reserve city banks a rise from 16.3 to 16.7 per
millions, while the smallest holdings of 527.5 cent is shown, and for the Greater New York
millions are shown for July 19. Holdings of banks a rise from 17 to 17.7 per centUnited States bonds other than circulation
Government deposits of all reporting banks
bonds, i. e., largely Liberty bonds, show some declined from 815.9 millions on July 12 to 602.8
gain for the week ending July 19 and a slow but millions the following week. During the subsesteady fall for the following weeks, the August quent weeks considerable gains are noted, the
19 total, 554.5 millions, being about 3.2 millions maximum for the period, 964.1 millions, being
below the corresponding July 12 total. Loans shown for August 9. Since then these desecured by United States war bonds and cer- posits declined to 943.1 millions on August 16.
tificates from 485 millions on July 12 increased For the banks in the central reserve cities a
to 501.7 millions on August 2 and declined to similar decline from. 508.1 millions on July 12
469.4 millions about the middle of August.
to 348.8 millions on July 19 is seen, with a
Holdings by the central reserve city banks of maximum amount for the period of 651.5 milTreasury certificates show a sharp decline from lions on August 9 and a decrease to 546.1 mil443.4 millions on July 12 to 293.3 millions the lions on August 16. Net demand deposits show
following week and a gradual increase to 573.8 a decline from 9,030 millions on July 12 to

SiSJfTKMBBil 1, 1.9; 8.

FEDERAL RESERVE BULLETIN.

8,876.5 millions on Julj 26 and a subsequent
rise to 9.100.5 millions on August 16. Time
deposits increased from 1,410 millions to 1,482.9
millions on August 9, the following week witnessing a reduction to 1,451 millions. At the
central reserve city banks a like downward
course of net demand deposits during the second part of July is noted, followed by a net increase of about 100 millions during August, the
August 16 total of 4,889.2 millions being, how-,
ever, slightly below the July 12 total.
But little change is shown in the figures of
reserves (all with the Federal Reserve Banks),
the August 16 total being 15.2 millions in excess of the July 12 figure.- Cash in vault of all
reporting banks decreased from 371.4 millions
to 349.9 millions. For the central reserve city
banks both reserve and cash figures of August
16 are shown below those of July 12.
During the period under review the ratio of
combined reserve and cash to total net, including Government deposits, declined from
14.7 to 14.4 per cent for all reporting banks
and from 15.7 to 14.9 per cent for the banks in
the central reserve cities. Excess reserves, in
the calculation of which no account is taken of
Government deposits, reached a maximum of
102.8 millions on July 19, the total for August
16 of 77.2 millions being 7.4 millions in excess
of the July 12 figure. For the central reserve
city banks a different development is shown,
August 16 figures of excess reserves, 30.2 millions, being 29.4 millions below the July 12
total.
During the past year difficulty has been
found in the development of a
Call loans on
wide
market for acceptances,
acceptances.
due to the fact that those
houses which purchased them were obliged
steadily to dispose of them, inasmuch as it
was not practicable to borrow at current rates
with the acceptances as collateral. Such houses
were thus obliged to keep their holdings of acceptances down to a comparatively small figure,
and the situation has militated against the attainment of that degree of marketability for
acceptance paper which had been desired by
those who believed that it would gradually super-

78653—IS-

805

sede the call loan as a form of investment for
fluid banking resources. On August 23 public
announcement was made by a leading New
York banking house to the effect that it would
lend money on call to those who were able
to present eligible acceptances as collateral.
The rate on such loans was announced at 4J
per cent at the outset, it being the policy of the
firm to fix the rate in relation to the discount
rate of the Federal Reserve Bank of New York.
In so far as this action tends in the direction of
the establishment of an acceptance market
after the European model, it promises interesting developments. Since the appearance of
a very strong demand on the part of the Government for available current funds the ability
to distribute acceptances rapidly has declined,
and this again has tended to operate unfavorably to their fulfillment oi the purposes which
the acceptance market had been intended to
serve. As acceptances become more and more
readily marketable, they will be increasingly
attractive to the smaller banks of the country
when possessed of reserve funds which the}7
desire to invest in a way that will make them
immediately available without question whenever needed. The practice of lending upon
eligible acceptances at call undoubtedly may
assist in popularizing the acceptance as a form
of investment for such banks.
Two significant developments relating to the
use of acceptances have occulTed
during the past month.
The New York Clearing House
has adopted a resolution, elsewhere published in
this issue, as a result of which acceptances will
be passed through the clearinghouse and charged
to the accounts of their acceptors at the banks
at which they are payable upon the date of their
maturity precisely as if they were checks. A
conference of bankers on August 14, in a session at the National Bank of Commerce at
New York, further took action designed to
establish regular methods for the reimbursement of acceptances by those in whose favor
they were made. The conference decided that
such reimbursement should be effected either
by (a) the deposit of clearing-house funds one

806

FEDERAL RESERVE BULLETIN".

SEPTEMBER 1,1918,

day prior to maturity, or (6) the deposit of cash paid by members to their depositors. In
or checks on the Federal Reserve Bank of communications to Federal Reserve Banks the
New York on the day of maturity, or (c) Board has accordingly urged that an effort be
debit to the account of the bank's client on made to bring about an understanding conthe day of maturity against funds cleared on cerning rates on deposits without, however,
or prior to such date.
involving any simultaneous change in discountAs things now stand there is, therefore, a rates. It has been suggested that perhaps
regular and recognized basis for the collection the entire question might be reopened by recof acceptances through the clearing house and oirimending to clearing houses that they confor the reimbursement of accepting banks by sider the schedule of deposit rates now agreed
their clients. In connection with the latter upon by them as the maximum. The logical
point it is worthy of note that the situation result of such a step would be the further agreeas to the use of Federal Reserve drafts has ment that no increase in deposit rates shall ocbeen such as to require that commercial houses cur until in each case favorable action by the
not situated in New York should either keep clearing house has been secured, after previous
accounts with banks in New York on which consultation with the Board. It has been recogthey can draw, buy New York exchange, or nized as of great importance to find some uniform, basis for controlling deposit rates without
else purchase Federal Reserve drafts.
In order to facilitate the use of these drafts destroying liberty of action existing in each
the Board on August 12 notified all Federal Re- district and without preventing the adjustserve Banks that the limit of drawings through ment of local discount rates to conform to the
Federal Reserve exchange drafts will hencefor- conditions and requirements existing in the
ward be increased from $250 to $5,000, while several districts. Wherever possible it has
Federal Reserve Banks paying the exchange been the desire of the Board to bring about a
drafts of other Federal Reserve Banks would be standardization of rates in each district related
permitted to deduct the amount paid from the to the rates of the local Federal Reserve Bank.
total credits reported in the gold settlement It has also sought to secure through cooperation
for the day. In this same connection, the on the part of State banks harmonious working
Federal Reserve Banks were notified that arrangements which would tend to prevent
the Board deems it desirable that all reserve any disposition to attempt to control or
banks give immediate credit for clearing-house divert business through the offering of higher
items on the day such items are received from rates of interest to those who might happen
other Federal Reserve Banks, the balances so to have funds available for deposit which
credited to be included in the credit balances could be turned in one direction or another in
reported for settlement through the gold fund consequence of more advantageous terms.
A further development of the Government's
clearing. These changes constitute a valuable
system of emergency relief to
and desirable step toward the attainment of a
Loans for relief
individuals in agricultural regeneral system of clearance through Federal of individuals.
gions who are unable to obReserve Banks.
Further effort has been made during the tain banking accommodation on account of
past few weeks to extend the losses was taken on August 15, when the
Interest
rates ,
j
v
,j? • .
,
,
on deposits.
standardization of interest rates Secretary of the Treasury announced that the
paid by banks to their de- War Finance Corporation would make direct
positors, a beginning in which had already advances to individuals, firms, and corporabeen accomplished. The Board's action in the tions whose principal business is the raising
past has been directed to the establishing of of live stock, including cattle, sheep, and hogs.
some definite relationship between discount Further to facilitate the plan of furnishing
rates at Federal Reserve Banks and the rates relief to needy farmers, the War Finance Cor-

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1918.

poration moreover altered the rate of interest
from 6 per cent to 5 per cent upon the shortterm loans which it is now making under section 9 of the war finance act to banks located
in the agricultural districts which require
funds for the purpose of assisting borrowers
who have suffered crop losses.
In order to provide for the making of the
proposed direct loans to cattlemen, the War
Finance Corporation has established agencies at
Kansas City and Dallas, for the purpose of passing upon such applications as may be submitted
by borrowers who wish to take advantage of
the opportunity to obtain Government assistance in their financing. During the month
also the Department of Agriculture has announced that arrangements have been made
by it for the purpose of advancing limited
sums to individuals who had suffered from
successive crop losses. These advances are
to be made through the Federal land banks.
Two new agencies have thus been added to
those already engaged in rediscounting and
advancing liquid funds for the purpose of
facilitating the operations of persons engaged
in business, commerce, or agriculture.
Under the authority of the act pf Congress
approved April 13/1918, silver
Policy as to sil- h a g
ver.

been

heretofore

sold

the Secretary of the Treasury
at a price which will permit the Department
to recoin new silver purchased at the price of
$1 per fine ounce into silver dollars without
loss. On August 10, however, it was announced that in order to provide for the various items of expense involved in the operation
of withdrawing silver dollars and recoining new
bullion it had been necessary to fix the price
on the silver hereafter sold at $1.01} per fine
ounce. The Department further made it a
condition of sale that the purchaser should
not pay a higher price for silver in markets
other than those of the United States. Up
to the present time the Federal Reserve Board
has freely granted licenses for the export of
silver. In order, however, to conserve the
use of silver, export licenses for silver will
hereafter be granted only for civil or military

807

purposes of importance in connection with the
prosecution of the war and only in cases where
the exporter certifies that the silver to be exported has been purchased at a price which
does not directly or indirectly exceed $1.01} per
ounce one thousand fine. This quotation applies
at the point where silver is refined in. the case of
silver refined ii) the United States or at the point
of importation in the case of imported silver.
The action thus taken represents a change
in the policy of the Board in respect to the
exportation of silver. Until very recently
the Board has deemed it wise to avoid interference with the exportation of silver. As
stated in the issue of the FEDERAL RESERVE
BULLETIN for June 1918 (p. 501), the gross
amount of licenses granted for the exportation of silver from the beginning of the
embargo policy up to May 24 was approximately $155,237,725, while in addition silver
included in licenses for the alternative shipment of silver or currency amounted to $5,328,110, a gross total of $160,565,835. From
the date when these figures were issued to
August 23, there have been granted licenses
covering the exportation of approximately
$105,390,285 of silver in the form of coin or
bullion, making a grand total in round numbers of 1265,956,120 for the whole period of
the embargo to date. It has been apparent
for some time past that applications for the
exportation of silver were increasing and that
the amounts licensed for exportation would
grow greater as the difficulty of obtaining gold
or securing exchange at satisfactory rates increased. The new policy will confine the exportation of silver to those necessary purposes which result from the importation of
goods requisite for civil or military requirements.
Within the month ending August 10 the net
outward movement of gold was
Movement of $4;376;000, as compared with a
g
° *
net inward movement of $12,281,000 for the period from June 15 to July
10. Gold imports for the month, amounting
to $2,522,000 came largely from Canada and
Mexico, while gold exports, totaling $6,898,000,
were consigned chiefly to Mexico and Chile.

80cS

FEDERAL RESERVE BULLETIN.

1, 1918.

The gain in the country's stock of gold since that such obligations have assumed a trade acAugust 1, 1914, was $1,074,007,000, as may ceptance form does not necessarily render them
be seen from the following exhibit:
desirable paper. . The Board, it is true, has
established and still maintains a preferential
[000 omitted.]
rate of rediscount in favor of trade acceptances, but this rate presupposes that paper
Excess of
imports
Imports. Exports.
which, receives the advantage of it represents
over
exports.
a superior type of trade paper. If it does not
$104,972
i SSI,719 do so, the reason for the grant of the preferS23,253
Aug. 1 to Dec. 31, 1914
31,426
420,529
451,955
Jan. 1 to Dec. 31, 1915
It must not be forgot529,952 ential rate disappears.
685,745
155,793
Jan. 1 to Dee. 31, 1916
181.542
553,713
372,171
Jan. 1 to Dec. 31, 1917
23; 703 ten that at the bottom of this whole question of
52,971
Jan. I to Am;. 10, 1918
29,268
1,074,007 commercial discounts is the character of the
1,707,637
693,630
credit upon which the paper is based, and that
1
Excess of exports over imports.
the external form of the paper can not bestow
Growth of interest in the use of trade ac- the quality of liquidity unless it is inherent in
ceptances and the increasing the transaction itself.
The trade ac- development which they are atThe question of interpreting the meaning of
ceptance situation.
. . 1 .
.
,. -,
, section 5200, Revised Stattaming in various parts of the
country has brought to the Board many questions of definition and analysis in connection
with this class of paper. Probably the most
frequent inquiry which comes to the attention
of the Board from time to time is the question
whether paper representing a given kind of
transaction is or is not a "trade acceptance." In
answering such inquiries the Board necessarily
feels obliged to make rulings based upon the
legal and administrative status of the trade
acceptance as inferable from the law and as
laid down in the Board's own regulations. The
result is unavoidably to characterize as "trade
acceptances" many items of paper which majr
or may not be desirable as investments for
Federal 'Reserve Banks. It must be recognized
that even among those which are technically
or legally "eligible" there may be many which
would not be desirable as investments or as a
basis for rediscount. In promoting the use of
the trade acceptance it should be borne in
mind that the paper whose development and
growth is desired by the Federal Reserve system
is fundamentally that which represents liquid
commercial transactions which provide their
own means of settlement at maturity. There
may in individual cases be reasons for putting
commercial obligations into the form of trade
acceptances regardless of the liquid character
of the paper thus produced. The mere fact

Advanees under
section 5200.

utes

•.

lias

£
for

some

tlme

Past

been under consideration by
the Board in connection with the use of the
trade acceptance. Specifically the question
most frequently raised has been whether or
not advances on trade acceptances were subject to the so-called "10 per cent limitation"
of the Revised Statutes whereby an advance
made to any one person, firm, or corporation
must not exceed 10 per cent of the bank's
capital and surplus. It has been ruled that the
limitation imposed, by section 5200 does not
apply to the discount of trade acceptances.
A bank, for example, might purchase $100,000
of trade acceptances bearing a given name,
discount them with the Federal Reserve Bank,
and immediately purchase a like amount of
paper bearing the same name in addition. It
would, however, be a serious error to conclude
from this that it would bo good policy to make
advances on such paper because it was technically eligible, still less would it imply that
$ Federal Reserve Bank should, as a matter of
course, be expected to make such advances.
Each transaction is a matter for the exercise
of banking judgment, and at this time, particularly, every effort should be made to apply
rigid tests to applications for credit lest a type
of paper that has great possibilities when wisely
used should become a subtle instrument of
credit over-expansion.

1, 1.018.

FEDERAL RESERVE BULLETIN.

809

Elsewhere in this issue of the BULLETIN to obtain from their member banks reports
there is given further informa- showing the total number of checks paid by
Reports of busi- ,-Y~.
,.
,
, -i
such banks for other banks. Subsequently
,.,.
tion with reference to the
arrangements were entered into with the clearness conditions. ....
,
7
Board's work m the more sys- ing house section of the American Bankers
tematic survey and study of business condi- Association whereby the somewhat similar
tions , including three dis tine t topics—(1) figures which have been compiled by this secwholesale prices, (2) interest and discount tion in the past will be consolidated with
rates, (3) total business transactions at clearing those obtained by the Board. There is pubhouse banks. It is hoped that by October 1 lished elsewhere in this issue an account of
index numbers representing the progressive the work heretofore done by the clearing
development of these three factors can be house section, together with a brief digest
begun. The Board has undertaken a general of the statistics published by that section
program of investigation of business conditions since the system of statistics referred to was
and will extend these plans to cover methodical first inaugurated. The Board also publishes
analysis of factors affecting the internal situa- its own returns for the weeks ending August
tion of Federal Reserve and member banks. 15, 21, and 28. This new series of figures
Included in this work will be a careful statis- should afford to the community a far better
tical study of acceptances, interest and dis- and more accurate knowledge of the actual
count, rates, foreign exchange, reserve per- volume of banking business at important
clearing house centers than has been afforded
centages, developments of banking legislation,
by the statistics showing clearings alone.
both national and State, and other related
Clearing house returns have been too freely
subjects. The several Federal Reserve Banks
used as giving an accurate indication of the
will cooperate with the Board by obtaining
real trend and volume of business at given
local data bearing upon the subjects under
points from year to year. Undoubtedly they
investigation, so that in time there will be
have their value, but the utility of the figures
developed in the office of each Federal Reserve
for total operations, to be compiled under the
agent a department of inquiry under the genmethod above outlined, will be unquestioneral supervision and direction of the Board.
ably greater both as a test of the volume of
In furtherance of this undertaking a new
feature of the Board's statis- business actually transacted at one place as
Figuresfortotal . ^
. h
j
.
compared with another and as a comparison
te
bank operations.
.,
.
of the activity of business at one date with that
urated during the month oi
existing at an earlier or later period. The
August in the attempt to obtain trustworthy
Board hopes to enlarge, strengthen, and
and reliable figures showing the total volume
broaden its figures of this kind and to employ
of banking business at the various clearing
them in the further development of its system
house points. On August 1 the Board transof business indexes.
mitted to all Federal Reserve Agents a letter
Hon. Paul M. Warburg's membership in the
in which it requested them to obtain from
Federal Reserve Board ceased
the managers of each local clearing house
Retirement of
on
August 9, upon the expirasituated within their districts the total amount Mr. Warburg.
tion
of the term for which he was
of chocks paid by each member of the clearing
appointed
four
years
ago. At the time of his
house which was also a member of the Federal
retirement
a
statement
of correspondence
Reserve system and so far as possible to obtain
passing
between
the
President
and Mr. Warburg
parallel data from, institutions not members of
on
the
subject
was
given
out
and is printed
the Federal Reserve system but participating
elsewhere
in
this
issue.
The
Board,
in resoluin local clearing house operations. The clearing house managers were furthermore asked

810

FEDERAL RESERVE BULLETIN

tions' adopted on August 9, has placed on
record the following expression of its appreciation of Mr. Warburg's service:
"The members of the Board, now that the
term of their colleague, Hon. Paul M. Warburg,
is about to expire, desire to place upon record
this evidence of their high appreciation of the
important and valuable services which have
been rendered by him in the development and
administration of the Federal Reserve system.
They wish to express also their sense of personal
loss in being deprived of their daily association
with him and their feeling that his retirement
from the Board is a serious loss to the public
service.
"Mr. Warburg's thorough knowledge of
national and international finance, his indefatigable and untiring industry, his masterly
conception and firm grasp of the many important banking problems which have come before
the Board, have placed its members under a
lasting obligation to him.
"The important amendments to the Federal
Reserve Act relating to reserves which have
enabled the system to meet so fully all the
requirements which have been made upon it
during the most critical period of the Nation's
financial history, and the extension of the use
of bankers7 and trade acceptances, are among
the many important developments which have
been due in a great degree to his foresight and
untiring efforts.
"The Board has received from him also,
especially since the entrance of our country
into the war, very valuable suggestions regarding the fiscal relations of the banks to the
Government, foreign exchange, regulation of
gold exports, control of capital issues, and
restriction of nonessential credits.
"His services can be appreciated best by
those who have had the near view of colleagues.
The sense of public duty, loyally and ably
performed, is after all the chief reward of
official life, and whatever the future may have
in store for Mr. Warburg he can feel that he
leaves office with the admiration, confidence,
and sincere esteem of his colleagues, and with
the satisfaction of knowing that he has given

SKPTEMBIBR 1,1918.

valuable assistance to the Board in grasping
and solving many of the momentous financial
problems, both domestic and international,
which have come before it,''
The President on August 13 redesignated
Hon. W. P. G. Harding as
ganizaUon.
governor oi the federal Reserve Board. The vacancy in
the secretaryship of the Board due to the
retirement of Mr. II. Parker Willis was filled
by the election on August 13 of Mr. J. A.
Broderick, who has been chief examiner and
head of the Board's division of audit and
examination since the organization of the
Federal Reserve Board. A sketch of Mr.
Broderick's service in the banking field is
published elsewhere in this issue of the FEDERAL
RESERVE BULLETIN.

Wholesale Prices.
Arrangements have recently been completed
with the United States Bureau of Labor Statistics whereby its regular index number of
wholesale prices will be placed at the disposal
of the Board for use each month in the FEDERAL RESERVE BULLETIN. This is one of the
most comprehensive of American series, embracing at the present time some 300 commodities. The plan insures that the number will
reflect accurately such changes as may occur
in the existing price structure. Both raw
materials and manufactured products are included. The quotations are taken as far as
possible for primary markets. Standard trade
journals and data supplied by other governmental bodies are supplemented by private
sources of information for certain of the
commodities.
The number is constructed from what is
technically known as an aggregate of actual
prices. The current price quotations are multiplied by the quantities of the respective
commodities entering into exchange in the
census year 1909, the last year for which the
data required for such a system of formal
weighting could be estimated. The resulting
products are then added, and the total is

SEPTEMBER 1,1918.

FEDERAL BESERVE BULLETIN.

811

divided by the sum of the products obtained products. On this ground index numbers of
by multiplying the average commodity prices wholesale prices have often been confined to the
prevailing in the base period (which is taken as first-named class of goods. The present method
the year 1913) by the same 1909 weights for the of presentation, however, will have the advanseveral commodities. Thus a relative figure is tage of showing movements in the prices of the
secured, expressing the present price level as a particular classes of commodities enumerated as
percentage of that prevailing in 1913. A di- well as in the general level of prices, and hence
rect comparison of present conditions with make possible a more intelligent appraisal of the
those existing immediately prior to the out- entire price situation. The Bureau has kindly
break of the war is obtained. Moreover, due consented to place at the disposal of the Board
to the technique of construction employed, such of the data it employs as will be required in
the base may readily be shifted if it be desired the construction of the index numbers for the
to institute a comparison with prices existing several groups of commodities enumerated
during periods other than the base period. above. The technical method of construction
Complete recomputation of the number is un- is the same as that employed by the Bureau in
necessary. A full description of the methods the case of the final number, as described above.
employed in the construction of the index
In addition to these index numbers, it is
number is contained in Bulletin No. 181 of the planned to publish also actual and relative
United States Bureau of Labor Statistics, figures for a selected list of the more importantpages 239 to 256.
basic commodities. Current quotations wili
Price fluctuations, however, present extreme again be expressed as percentages of average
diversity. The prices of some commodities prices prevailing in 1913. The commodities
rise, the prices of others remain constant, while included will be chosen from the raw materials
the prices of still others fall. Hence it is desir- and producers' groups mentioned above. Afable to analyze more fully changes in prices fording as they do direct evidence of the price
which have occurred. This has led to the movements of individual basic commodities,
practice of grouping the commodities which are these data should prove a valuable adjunct to
represented in the final index number, and of the index numbers showing the price movecalculating separate index numbers, for the ments of the several groups of commodities just
several groups. Besides its final number the mentioned.
Bureau of Labor Statistics publishes separate
The following correspondence between Govnumbers for nine particular classes of commodi- ernor Harding and Commissioner Meeker will
ties, viz, farm products, foodstuffs, cloths and explain the basis for the Board's price index
clothing, fuel and lighting, metals and metal material:
products, lumber and building materials, drugs
AUGUST 16, 1918.
and chemicals, house-furnishing goods, and a DEAR SIR: The Federal Reserve Board has in contemmiscellaneous class. This grouping, while plation the preparation of a series of indexes of general
business conditions, including an index number of wholeilluminating for certain purposes, is however sale prices. I t has been noted that the Bureau of Labor
not the most satisfactory for the study of busi- Statistics has recently begun the preparation monthly
ness conditions. Accordingly a regrouping of its regular wholesale prices index number. In order
into raw materials, composed of farm, animal, to avoid duplication of work along the same lines by the
Reserve Board, it would be desirable to have for
forest and mineral products, producers' goods, Federal
use in our BULLETIN the monthly index figures computed
r
such as steel rails, copper wire and cotton } arn, by your office, and respectful inquiry is made whether
and consumers' goods, such as flour and beef, figures for the month immediately preceding can be had
was mado. Each of the classes enumerated on or about the 20th of each month for publication in the
shows distinctive characteristics in its price FEDERAL RESERVE BULLETIN on or about the first of the
month following.
fluctuations, raw materials, e. g., being more What the Board desires to get are (1) the general index
sensitive in normal times than manufactured number for the total number of commodities, also (2) the

812

FEDERAL RESERVE BULLETIN.

figures for prices multiplied by weights for a selected
list of individual commodities, and (3) absolute and relative prices for a limited number of individual commodities.
In case there is no objection to the use and publication
in the FEDERAL RESERVE BULLETIN of these data, we shall

send our man to your office each month to secure the figures, unless you prefer to mail us regularly each month
the respective data in time for publication in our monthly
BULLETIN.

Respectfully,
(Signed)

W. P. G. HARDING,

Governor.
Dr. ROYAL MEEKER,

17. S. Commissioner of Labor Statistics,
Washington, I). C.

U. S. DEPARTMENT OF LABOR,
BUREAU OF LABOR STATISTICS,

August 17, 1918.
Mr. W. P. G. HARDING, Governor,

Federal Reserve Board, Washington, D. 0.
DEAR SIR: The receipt is acknowledged of your letter
of the 16th inst. inquiring if the monthly index number
of wholesale prices computed by this Bureau, together
with certain other data relating thereto, can be furnished
to you by the 20th of each month for publication in the
FEDERAL RESERVE BULLETIN on or about the first of the

month following.
I shall be very glad to furnish this information to you in
the manner and for the use suggested. Recently, owing
to the congestion of work in the Government Printing
Office, the Monthly Labor Review in which the index
number is published has not been available for distribution until some days after the 7th. There is no objection,
however, to your publishing the index number in advance
of its publication by this Bureau provided its source is
dearly stated in your BULLETIN.
It will be agreeable to me for your man to call at the
Bureau for the information on or about the 20th of each
month. I am,
Very truly yours.
(Signed)

ROYAL MEEKER,

Commissioner of Labor Statistics.

Discount and Interest Rates.
In the accompanying tables are presented
actual discount and interest rates prevailing
in the various cities in which the several
Federal Reserve Banks and their branches are
located during the 30-day periods ending July
15 and August 15, 1918. Quotations are given
for prime commercial paper, both customers'
and open market purchases, interbank loans,
bankers' acceptances, and paper secured by

SlIPTUJiBHI! 1, 1918.

prime stock exchange or other current collateral. Separate rates are quoted for paper of
longer and shorter maturities in the firstnamed and last-named classes. In addition
rates are quoted for paper of local importance
such as cattle paper in several of the western
districts. High, low, and customary rates are
given, the latter representing the rates at which
the bulk of the several classes of paper was
discounted or purchased. Quotations were
secured through the Federal Reserve Banks
and their branches, and care has been exercised to insure that the data will be upon a
fairly comparable basis. Quotations will be
found incomplete in certain cases, but it is
hoped to lessen the number of such omissions
in future reports. The tabular presentation
employed will permit a ready comparison between rates prevailing in different sections for
the same type of paper, as well as between
rates prevailing in the same section for different types of paper.
Data concerning the rates for the several
classes of paper prevailing in these same cities
during 30-day periods ending on the 15th of
the month for the years 1911, 1912, and 1913
are now being gathered. It is proposed to
express current quotations as percentages of the
averagesaof quotations for the same periods in
each of the three earlier years. An average
will be struck, for example, of the rates for a,
particular class of paper prevailing during the
30-da3^ periods ending July 15, 1911, July 15,
1912, and July 15, 1913, and the quotation
for the 30-day period ending July 15, 1918,
expressed as a percentage of the average rate
prevailing during the earlier periods. By the
use of this method allowance will be made for
seasonal variations in rates, and accurate comparisons will be rendered possible between
present rates and those prevailing prior to the
inauguration of the Federal Reserve system and
the opening of the present war. The comparisons will of course necessarily be somewhat
crude in certain cases, as interest rates at
times are sluggish in their movements, and
when changes occur these are often not so
slight in amount in comparison with the rates.

SEPTEMBER 1,1918.

FEDEKAL BESERVE BULLETIN.

813

themselves as is the case with other data for
which relative figures are computed. A 1 per
cent change in a 6 per cent interest rate is
relatively much greater than a change of 1
cent in the price of a pound of cotton costing
30 cents. The same objection would, however,
apply in many cases to the computation of
relative figures for commodity prices as against
security prices, or retail as against wholesale
prices, and it is not believed that the objection
which in certain cases may be raised is serious
enough to impair the usefulness of relative
figures of interest rates.
Instructions supplementary to those of July
17 were issued in a general letter dated August
30, as follows:

made there. Kindly eliminate rates charged infrequently
on loans for small amounts, which rates do not actually represent charges for prime paper, but include a considerable
risk element as well.
Rates on prime member bank acceptances eligible for
rediscount at the Federal Reserve Bank are desired in
class 4-B. In certain of the centers in which this class of
paper is actively dealt in it should be possible to secure
separate quotations for indorsed and unindorsed bankers'
acceptances, and we would request again that you endeavor to secure such quotations. Under the head of
special types of paper reported in class 7, it appears that
there are two classes for which quotations should be given
if such paper is current locally, namely, commodity paper
secured by warehouse receipts, etc., and cattle paper. In
addition to the rates for which current information is sent,
it would be desirable to have also information regarding
rates charged during the 30-day period for paper secured
by Liberty bonds and certificates of indebtedness.

Analysis of the reports of discount and interest rates
prevailing in the several Federal Reserve and Federal Reserve branch cities during the 30-day periods ending July
15, 1918, and August 15, 1918, shows that it is desirable to
supplement in certain particulars our circular letter
X-1068, dated July 17, and our letter of August 2.
It is very important that the data be upon strictly a
comparable basis. May we, therefore, ask that before transmitting the report to this office you Idndly compare the
current report with the previous week's report and verify
any striking changes which may appear. Please also bear
in mind that the data from each Federal Reserve Bank and
branch are to be confined to rates prevailing in the respective city only, and not in the entire district, nor should
they include rates on loans in outside cities by banks in
the city for which the report is made. The local rate for
each class of paper is desired, not the rate secured elsewhere, as, for instance, in New York on loans temporarily
78653—18
3

Between July and August of the present year
there has been in general a slight movement
upward in interest rates. This may be remarked not only for certain of the great eastern
centers, such as New York and Boston, but
also for Kansas City and San Francisco. In
certain cases the customary rates show a
higher level, in others the low or the high
rate for the month has risen. On the other
hand, there are a smaller number of cases
of decline in rates for particular classes of
paper, while a considerable number of centers show rates unchanged from the level
prevailing during the 30-day period ending
July 15.

Discount and interest rates prevailing in various centers.

DURING 30-DAY PERIOD ENDING JULY 15, 1918.
Prime commercial paper
Collateral—Stock Exchange or other

Bankers' acceutanc

District.

City.

4to6
months.

30 to 90
days.
No 1
No 2
No.3
No. 4
No. 5 .
No. 6

No 7
No. 8
No. 9
No. 10..
No. 11
No. 12

Boston
New York
Philadelphia
Cleveland
Pittsburgh
Cincinnati
Richmond .. .
Baltimore
Atlanta...
Birmingham
Jacksonville
New Orleans
Chicago.
Detroit.
St. Louis.
Louisville
Minneapolis
Kansas City
Omaha
Denver
Dallas
El Paso
San Francisco
Portland
Seattle
Spokane

Open market.

Customers.

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816

FEDERAL RESERVE BULLETIN.

Retirement of Hon. Paul M. Warburg.
Below is reprinted a statement, given out on
August 9 at the time of the retirement of Hon.
Paul M. Warburg, member of the Federal Reserve Board, whose term then expired, of correspondence passing between the President and
Mr. Warburg:
WASHINGTON, May

27,

1918.

On August 9 my four-year term of office as a
member of the Federal Keserve Board will expire. I do not know whether or not, under the
constant burden of grave and pressing decisions,
you have reached the point where you wish to
"deal with the question of naming my successor
or whether or not you contemplate to have me
continue in this work. Nor would I presume to
broach this question were it not that I felt that
in consequence of recent occurrences it has become one of policy rather than of personalities.
Certain persons have started an agitation to
the effect that a naturalized citizen of German
birth, having near relatives prominent in German public life, should not be permitted to
hold a position of great trust in the service
of the United States. (I have two brothers in
Germany who are bankers. They naturally
now serve their country to the utmost of their
ability, as I serve mine.)
I believe that the number of men who urge
this point of view is small at this time. They
probably have not a proper appreciation of the
sanctity of the oath of allegiance or of the oath
of office. As for myself, I did not take them
lightly. I waited 10 years before determining
upon my action, and I did not swoar that " I
absolutely and entirely renounce and abjure
all allegiance and fidelity to any foreign potentate, and particularly to Wilhelm II, Emperor of
Germany/' etc., until I was quite certain that I
was willing and anxious to cast my lot unqualifiedly and without reserve with the country of
my adoption and to defend its aims and its
ideals.
These are sad times. For all of us they
bring sad duties, doubly hard, indeed, for men
of my extraction. But, though, as in the Civil
War, brother must fight brother, each must
follow the straight path of duty, and in this
spirit I have endeavored to serve during the
four years that it has been my privilege to be a
member of the Federal Reserve Board.
I have no doubt that all fair-minded and
reasonable men would consider it nothing

SEPTEMBER 1,1918.

short of a national disgrace if this country, of
all countries, should condone or indorse the
attitude of those who would permit the American of German birth to give his all but would
not trust him as unreservedly and as wholeheartedly as he, for his part, serves the country
of his adoption. Unfortunately, however, in
times of war we may not always count upon
fair reasoning. It is only too natural that, as
our casualty lists grow, bitterness and undiscriminating suspicion will assert themselves in
the hearts of increasing numbers, even though
these lists will continue to show their full proportion of German names.
Much to my regret, Mr. President, it has
become increasingly evident that should you
choose to renominate me this might precipitate
a harmful fight which, in the interest of the
country, I wish to do anything in my power to
avoid arid which, even though resulting in my
confirmation, would be likely to leave an element of irritation in the minds of many whose
anxieties and sufferings may justify their
intense feelings. On the other hand, if for
reasons of your own, you should decide not to
renominate me it is likely to be construed by
many as an acceptance by you of a point of
view which I am certain you would not wish to
sanction. In these circumstances, I deem it
my duty to state to you myself that it is my
firm belief that the interest of the country will
best be served if my name be not considered by
you in this connection.
I am frank to admit that I have reached this
conclusion with the deepest regret both on
account of its cause and its effect. I have considered it the greatest privilege to serve my
country at this time, and I do not abandon
lightly a work, half done, in which I am deeply
and genuinely interested. But my continuation m office under present conditions might
make the Board a target of constant attack by
unscrupulous or unreasoning people, and my
concern to save any embarrassment to you and
to the Board in the accomplishment of its work
would make it difficult for me to conserve that
independence of mind and freedom of action
without which nobody can do justice to himself or his office.
In writing you this letter I have been
prompted solely by my sincere conviction
that the national welfare must be our only
concern. Whatever you may decide to be
best for the country will determine my future
course. We are at war, and I remain at your
orders.

SEPTEMBER 1,1918.

FEDEKAL BESEBVE BULLETIN.

May your patience and courage be rewarded
and may it be given to you to lead our country
to victory and peace.
Respectfully and faithfully yours,
(Signed)
PAUL M. WARBURG.
The

PRESIDENT,

The White House,
Washington.
9 AUGUST, 1918.
MY DEAR MR. WARBURG: I hope that my

delay in replying to your letter concerning your
retirement from the Federal Reserve Board has
not given you an impression of indifference on
my part or any lack of appreciation of the fine
personal and patriotic feeling which made that
letter one of the most admirable and gratifying
I have received during these troubled times. I
have delayed only because I was hoping that
the Secretary of the Treasury would be here to
join me in expressing the confidence we both
feel, alike in your great ability and in your
unselfish devotion to the public interest.
Your retirement from the Board is a serious
loss to the public service. I consent to it only
because I read between the lines of your generous letter that you will yourself feel more at
ease if you are left free to serve in other ways.
I know that your colleagues on the Board
have not only enjoyed their association with
you, but have also felt that your counsel has
been indispensable in these first formative
years of the new system which has served at the
most critical period of the Nation's financial history to steady and assure every financial
process, and that their regret is as great as my
own that it is in your judgment best now for
you to turn to other methods of service. You
carry with you in your retirement from this
work to which
you have added distinction, my
dear Mr. ¥?Tarburg, my sincere friendship, admiration, and confidence, and I need not add,
my cordial good wishes.
Cordially and sincerely yours,
(Signed)
WOODROW WILSON.

817

Effective September 1, 1918, Mr. J. A.
Broderick has been appointed secretary of the
Federal Reserve Board to succeed Dr. H. Parker Willis, resigned to accept the chair of banking at Columbia University, New York. Mr.
Broderick has been acting as secretary of the
Board since August 6.
Upon the organization of the Board in 1914,
Mr. Broderick became chief examiner and has
been in charge of all examinations of Federal
Reserve Banks since that time. Prior to joining the Federal Reserve organization Mr.
Broderick was connected with the Banking
Department of the State of New York, where
he rendered conspicuous service in introducing
a system of foreign exchange department examinations. In this connection, in 1912, he
went to Europe and was the first American
official to examine banking branches abroad.
During the same year he organized the credit
bureau of the State Banking Department.
He is a member of the New York Credit Men's
Association and has been active in the affairs
of the National Association of Supervisors of
State Banks, of which organization he is an
honorary member. He has also been prominent in the educational activities of the American Institute of Banking.
Election of Directors.

The Federal Reserve Board on August 6
appointed Mr. Jesse E. Metcalf, of Providence,
R. I., as a class C director of the Federal Reserve Bank of Boston.
At an election held by the Boston bank Mr.
Philip R. Allen, of Walpole, Mass., was chosen
as a class B director to fill the vacancy caused
by the resignation of Mr. Chas. B. Morss, who
some time ago was elected governor of the
bank.
On August 8 the Federal Reserve Board
designated Mr. P. II. Saunders, of New Orleans,
Hon. PAUL M. WARBURG,
as a director of the New Orleans branch of the
Federal Reserve Board.
Federal Reserve Bank of Atlanta.
The completion of the organization of the
Memphis
branch of the Federal Reserve Bank
Change In Secretaryship of the Board.
of St. Louis was announced on August 8. The
The following statement for the press, issued directors appointed are as follows: Appointed
to the morning newspapers on August 14, 1918, by the Federal Reserve Board: T. K. Riddick
announces the appointment of Mr. J. A. and S. E. Ragland. Appointed by the Federal
Reserve Bank: R. Brinkley Snowden, John D.
Broderick as secretary of the Board:

818

FEDERAL RESERVE BULLETIN.

SEPTBMBMK 1,1918.

McDowell, and John J. Heflin. Mr. Heflin organization has been completed by the election of officers, and that a head office would be opened presently at
was designated as manager of the bank.

No. 66 Liberty Street. The company proposes to engage
in international and foreign banking in China, in the
dependencies and insular possessions of the United States,
Silver at $1.01 1-2 Per Ounce.
and, ultimately, in Siberia.
The following announcement was issued by Charles H. Sabin, president of the Guaranty Trust Co.
of New York, is president of the new company. The
the Treasury Department on August 10:
Under the authority of the act of Congress vice presidents are Albert Breton, vice president of the
approved April 13, 1918, silver has been sold Guaranty Trust Co., and Ralph Dawson, assistant secreby the Secretary of the Treasury at a price tary of the Guaranty Trust Co. Robert A. Shaw, of the
which will permit the Treasury from new pur- Overseas Division of the Foreign Department of the
chases of a corresponding amount of silver at Guaranty, is the treasurer. The directors are Charles II.
the price of $1 per fine ounce to recoin the Sabin, Seward Prosser, president of the Bankers' Trust
silver purchased into silver dollars without Co.; Thatcher M. Brown, of Brown Bros. & Co., who will
loss. In order to provide for the various items represent the interest of the Mercantile Bank of the
of expense involved it was found necessary to Americas; Eugene W. Stetson and Albert Breton, vice
fix the price for which silver was sold at $1.01-! presidents of the Guaranty Trust Co. of New York; F. I.
per fine ounce, and it was made a condition of Kent, vice president of the Bankers' Trust Co.; Ralph
sale that the purchaser should not pay a higher Dawson, Herbert Fleishhacker, president of the Anglo
price for silver in other markets than in those and London-Paris National Bank, San Francisco, Cai.;
M. F. Backus, president of the National Bank of Comof the United States.
Seattle, Wash.; C. F. Adams, vice president of
Up to the present time the Federal Reserve merce,
the First National Bank, Portland, Oreg.; and George E.
Board has freely granted licenses for the export Smith, president of the Royal Typewriter Co. and of the
of silver. In order, however, to conserve the
use of silver, export licenses for silver will American Manufacturers Export Association, New York.
hereafter be granted only for civil or military Preparations are being made to open branches in China,
purposes of importance in connection with the and as a preliminary step a central branch will be estabprosecution of the war and only in cases where lished a t Shanghai. With that object in view a special
the exporter certifies that the silver to he commission will be sent into the Far East by the Asia
exported has been purchased at a price which Banking Corporation. This commission will be headed
does not directly or indirectly exceed $1,014 by William C. Lane, vice president of the Guaranty Trust
per ounce one thousand fine, at the point where Co. of New York; Mr. Dawson, Crawford M. Bishop, forsilver is refined in the case of silver rpfined in mer director of the Far Eastern Division of the Bureau of
the United States or at the point of importa- Foreign and Domestic Commerce of the united States
tion in the case of imported silver. Applica- Department of Commerce; and other representatives of
tions for licenses to export silver should also the company who are to be stationed permanently in
state from whom the silver was purchased, the China. The commission will visit Japan and will make
point at which silver was delivered to pur- a survey of local conditions in that country as well as in
chaser, for whose account and by whose order China. The commission expects to leave this country
and for what purpose the silver is to be early in September.
The Asia Banking Corporation was formed under the
exported.
laws of New York State with a capital of §2,000,000 and a
surplus of 3500,000, all of which has been paid in. Among
Banking Development
the stockholders are the Guaranty Trust Co. of New York.
The following statement, supplied by the the Bankers' Trust Co., the Mercantile Bank of the AmerAsia Banking Corporation, is published pursu- icas, the Anglo & London-Paris National Bank of San
the First National Bank of Portland, Greg.,
ant to the Board's plan announced in the Francisco,
and the National Bank of Commerce of Seattle, Wash.
August number of the FEDERAL RESERVE In New York the bank will occupy the second floor at
BULLETIN of furnishing as complete data as No. 66 Liberty Street. Present plans contemplate the
possible relative to developments in the exten- establishment of branches in Hankow, Peking, Tientsin.
sion of American banking facilities in foreign Harbin, and Vladivostok. When the Russian situation
clears the new bank will be ready to establish itself in
countries:
Russia and Siberia or to affiliate itself with old or new
On Friday. August 9, 1918, there was issued the Russian banks. The company is prepared to increase its
announcement of the Asia Banking Corporation that its capital according to requirements.

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN',

Remittances and Clearings.
During the month of August three interesting developments have occurred in connection
with the further working out of the system of
clearances and remittances under the Federal
Reserve system and among the affiliated institutions. These are (1) the extension of the
Federal Reserve exchange draft system; (2)
the adoption of regulations by the New York
Clearing House governing the clearing and
collection of acceptances; and (3) the establishment of an informal agreement among
member banks relative to the reimbursement
of banks by their clients for the face of acceptances liquidated by such banks.
FEDERAL RESERVE EXCHANGE DRAFTS.

The following is the report of a meeting of
representatives of Federal Reserve Banks held
at the Treasury Department on August 7, at
which certain recommendations relative to
Federal Reserve exchange drafts were formulated:
At a meeting held in the Treasury Department Building
in the Board room of the Federal Reserve Board, August
7, 1918. at which the following were present: Mr. M. J.
Fleming, assistant cashier, Federal Reserve Bank, Cleveland; Mr. S. H. Hendricks, cashier, Federal Reserve
Bank, New York; Mr. Pierre Jay, Federal Reserve agent,
New York; Mr. F. J. Carr, assistant cashier, Federal
Reserve Bank, Chicago; Mr. Charles A. Peple, deputy
governor, Federal Reserve Bank, Richmond; Mr. Thomas
Gamon, jr., assistant cashier, Federal Reserve Bank,
Philadelphia; Mr. C. C. Bullen, cashier, Federal Reserve
Bank, Boston.
It is recommended to the Federal Reserve Board that
the limit for the drawings of Federal Reserve exchange
drafts be increased from $250 to $5,000 and that Federal
Reserve Banks holding Federal Reserve exchange drafts
of other Federal Reserve Banks be permitted to deduct
such Federal Reserve exchange drafts from the total
credits reported to the Federal Reserve Board in the gold
settlement fund each day.
In order to bring about a daily settlement for clearing
house items, it is recommended that all Federal Reserve
Banks give immediate credit for clearing house items the
day received from other Federal Reserve Banks, without
regard to the time of day received, inasmuch as the
balance so created is reported to the gold settlement fund
at the close of business but is really settled the following
day when the checks have been collected.
It is voted that the Federal Reserve Board be asked to
cause a more detailed analysis of the "float" situation in

819

each Federal Reserve Bank to be made, for such period
as the Board may deem advisable, in order that there
may be a more exact knowledge as to what constitutes
a large amount of "float" now appearing in the statement
of the Federal Reserve system and in order that each
Federal Reserve Bank may study in a more detailed way
methods of eliminating its own " float."

Subsequent to the meeting referred to above
Governor Harding on August 12 sent to Federal
Reserve Banks the following letter:
At the suggestion and upon invitation of the Federal
Reserve Bank of Cleveland, an informal meeting was held
on August 7 at the office of the Federal Reserve Board to
discuss Federal Reserve exchange drafts. The meeting
was attended by representatives of six Federal Reserve
Banks. The recommendations made, a copy of which is
inclosed with this letter, have been considered and approved by the Board.
(1) Federal Reserve exchange drafts.—Effective

September

3, the limit of drawingsof such drafts shall be increased from
$250 to §5,000. Federal Reserve Banks paying exchange
drafts of other Federal Reserve Banks will be permitted to
deduct the amount paid from the total credits reported in
the gold settlement clearing for the day. The daily transcript, forwarded to each Federal Reserve Bank, should
show the items credited for the day and a deduction therefrom of the exchange drafts paid for its account. The net
credit should agree with the figures reported in the gold
settlement clearings.
(2) The Board deems it desirable for the Federal Reserve
Banks to adopt the recommendation of the committee that
all Federal Reserve Banks give immediate credit for clearing-house items on the day such items are received from
other Federal Reserve Banks, the balances so credited to
be included in the credit balances reported for settlement
through the gold fund clearings. The actual payment for
such balances would then be made on the same day as
settlement is received by the paying Federal Reserve
Bank for the checks and other items it collects.
(3) With respect to the recommendation that a more
detailed analysis be made of the "float" situation (i. e.,
the extent to which immediate credit has been given upon
uncollected items), there is inclosed herewith a memorandum prepared by the statistical division based upon
the information which it has at hand. The Board is willing to have a more detailed study of this question made,
but to do so will require a call for the necessary data from
each Federal Reserve Bank, and it is believed that such
study could best be made at the different Federal Reserve
Banks.
ACTION OF NEW YORK CLEAEING HOUSE.

Important action taken by the New York
Clearing House Committee will permit bankers7
acceptances and notes made payable at clearing

820

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1918.

house on the morning following its maturity.
The aforementioned ruling of the New York
Clearing House thus advances the date of
payment by one day.
While it was universally felt that the ruling
of the clearing house was desirable, it created
the necessity of the member banks amending
their arrangements with their clients
with respect to the time and method of
reimbursement.
Under the old method New York banks had
become accustomed to a large extent to receive
reimbursement from their clients, for whose
account the acceptances were made, on the
day of maturity. The clients generally paid
their obligation to the bank by means of their
check
on another bank or by debit on the books
DEAR SIR: AS you are aware, it has not been the custom
to include notes and acceptances in the daily exchanges, of the accepting bank. If payment was made
although such items are recognized as proper material for by check, the check went through the clearing
the exchanges by the terms of sections 2 and 6 of Article X house on the day following maturity; that is,
of the constitution.
on the same day that the acceptance or the
In view of the rapidly increasing employment of acceptances in commercial transactions, and with intent to cashier's check given in payment of the acceptincrease as much as possible the usefulness of the clearing ance, passed through the clearing house. If
function, the Clearing House Committee has this day re- the acceptance was paid to the accepting bank
moved the restriction heretofore placed upon notes and by its client by debit entry on its books, such
acceptances, and you are therefore advised that on and
debit entry was generally offset by deposits the
after August 1, 1918, notes and acceptances may be sent
client had made on the same day of items that
through the morning clearings on the day of due date.
Your attention is particularly directed to the require- passed through the clearing house the following
ments of Article X that all missent items must be returned day. In either event, therefore, the accepting
by hand.
bank received actual cash funds from its
By order.
clients, on the day the acceptance which had
WALTER E. FREW,
been
certified for payment or the cashier's
Chairman Clearing House Committee.
check (if payment was made by cashier's check)
WILLIAM J. GILPIN, Manager.
passed through the clearing house.
JOINT ACTION BY BANKS.1
The ruling of the clearing house, however,
As just seen, by resolution dated July 29, made the acceptance payable in cash on the
1918, effective August 1, 1918, the New York day of its maturity and this necessitated a
Clearing House Committee ruled that notes readjustment of the manner in which banks
and acceptances may be sent through the will receive reimbursement from their clients.
morning clearings on the day of maturity.
At a meeting of the leading banks of New
Prior to that time it had been the custom York City, Boston, Philadelphia, Chicago, and
among New York banks to pay acceptances other cities, held at the National Bank of
upon presentation by cashier's check or by Commerce in New York on August 14? 1918,x
certifying the acceptance, making it payable the following resolutions were adopted:
through the clearing house. By either method Whereas, the Clearing House Committee of the New
the acceptance was paid through the clearing York Clearing House Association by resolution adopted

banks to be cleared through the exchanges on
the day of maturity, so that final payment is
made on the due date. This supplants the
long-established custom of presenting such items
at maturity and receiving either certification
thereof or checks, final payment thus being
delayed for one day after maturity.
The new practice will result in the elimination
of a substantial amount of one-day "float,"
which is in line with the Federal Reserve
Board's endeavors to reduce as far as possible
the extent to which banking resources are absorbed in carrying items matured but not yet
paid.
Following is a copy of the Clearing House
Committee's announcement of July 29:

i Statement furnished by J. E. Rovensky, vice president National
Bank of Commerce.

July 29, 1918, effective August 1, 1918, has ruled that
i Mr. J. E. Kovensky, chairman.

SEPTEMBER 1,1918.

acceptances may be passed through the clearings on the
day of their maturity, and
Whereas, it has therefore become necessary that banks
executing acceptances which are payable through the
New York Clearing House adopt some uniform rule covering the time and manner of reimbursement from their
clients for such acceptances;
Resolved, that the accepting bank shall require from its
clients that it be placed in funds to meet acceptances on
day of maturity either by—
(a) The deposit of clearing house funds one day prior
to maturity, or
(6) The deposit of cash or check on the Federal Reserve
Bank of New York on day of maturity, or
(c) Debit to the account of the bank's client on day of
maturity against funds cleared on or prior to such date."

The above rules are similar to those followed
by English banks which require that all
maturities be covered at least one clearing day
prior to the maturity of the respective
acceptance.
Reports of Total Bank Transactions.
The Federal Reserve Board has for some
time past felt that the figures for clearing-house
transactions currently issued afforded only an
inadequate view of actual business and banking transactions at the several points throughout the country to which they related, and
has desired to obtain a better indicator of the
volume and relative importance of business
transactions. To this end it has devised a
plan for obtaining figures showing total bank
transactions, announcing the essentials of the
new scheme in a statement issued to the press
on August 1, as follows:
The Federal Reserve Board to-day decided to undertake the collection of statistics designed to furnish an
accurate and trustworthy index of the volume of banking
business at the various clearing-house points throughout
the country. It transmitted to each Federal Reserve
Bank a letter requesting that the manager of each clearing house in the district be asked to obtain from each of
the members of such clearing house figures showing, for
each week, the total of checks drawn on and paid by each
reporting bank, separating those drawn by individuals,
firms, corporations, and the United States Government
under one head and those drawn by other banks and
bankers under a second head.
It is intended to have these figures telegraphed each
week to the chairmen of the board of directors of each
Federal Reserve Bank of each district, who will then
78653—18
£

821

FEDERAL RESEEYE BULLETIN.

transmit the combined returns to the Federal Reserve
Board. In this way reports showing the actual volume
of business at clearing-house points will be obtained.
Present clearing-house returns show only the total of
checks which actually pass through the clearing house
and thus fail to take account of the large volume of checks
which are settled through the individual member banks.
They also lack uniformity in that outside items are included in some cases.

Simultaneously with the publication of this
statement there was transmitted to each
Federal Reserve agent a letter outlining the
method to be pursued in obtaining the statistics for total bank transactions as follows:
The Federal Reserve Board is desirous of obtaining
accurate and trustworthy statistics showing the relative
volume of banking business at various points, and to this
end it incloses you herewith draft of a letter which it
wishes you to send to the manager of each of the clearing
houses in your district. The letter will be self-explanatory
as to the procedure to be followed up to the time reports
are received by you from the several clearing-house points.
When these reports have been received they should be
tabulated and a message giving the replies from each
clearing-house point should be telegraphed to the Federal
Reserve Board, Division of Analysis and Research, on
Saturday morning of each week. In view of the importance of the information desired, it is recommended that
each Federal Reserve Bank bear the cost of all telegrams
transmitted to it by clearing-house managers.
[Inclosure.]

DEAR SIB: The Federal Reserve Board desires to obtain
figures showing as nearly as possible the actual volume of
banking business transacted at the various clearing-house
points throughout the country. At present, the " exchanges for clearing house" as currently reported, do not
always furnish an accurate index to the volume of business
at any given point, as they include only those checks
which pass through the clearing house.
You are therefore requested to obtain from each of the
members of your clearing house figures showing for a
period beginning Friday, August 9, and ending at close
of business Thursday, August 15, and for each weekly
period Friday to Thursday thereafter, the total of checks
drawn on and paid by each reporting bank:
(a) By individuals, firms and corporations, and the
United States Government.
(b) By other banks and bankers.
(Drafts and checks on other banks are not to be included.)
The figures thus obtained should be telegraphed as
combined totals on Friday of each week to the chairman
of the board of directors of the Federal Reserve Bank of
this district. If, however, there are members of your
clearing house who are not members of the Federal Reserve
System and who object to furnishing the data called for,
you will please forward totals of the returns actually
received by you from assenting banks, adding the names
of banks which do not report.
The Federal Reserve Board will appreciate your attention to this inquiry.

822

FEDEKAL BESEEVE BULLETIN.

SEPTEMBER 1, 1918.

On August 30 the following letter was sent (a) All debits to accounts carried by the Federal Reto Federal Reserve agents and to such of the serve Bank or branch, exclusive of Government account,
and created either by checks or written or telegraphic
branches as carry deposit accounts:
order, and
Analysis of the data received for the past two weeks
makes it desirable to supplement our circular letter
X-1100, dated August 1, and subsequent telegrams,
relating to returns by clearing-house managers of checks
paid by their member banks, also our instructions regarding weekly telegrams from the several Federal Reserve
Banks of total debits to member banks' and Government
accounts.
There is inclosed herewith copy of letter which is being
sent to the several clearing-house managers from whom it
is desired to secure reports, with the view of securing
greater uniformity in the returns, and placing the data
upon a strictly comparable basis. This letter is thought
to be self-explanatory.
It is also thought desirable to eliminate certain of the
smaller clearing-house centers from which reports have
been received. Accordingly a list of the centers in your
district from which it is desired to secure weekly returns
is given below. Kindly use your best efforts to secure the
information for such cities on the list as do not at present
report, in addition to those cities for which you have been
able to secure the weekly data.
(list of clearing-house points appropriate to each
district.)
Any suggestions with regard to the above list will be
w elcome.
Confirmation of the telegrams received after the last
statement was issued have shown that several errors occurred in transmission. It is believed desirable, therefore, to have separate totals for both classes of items given,
so as to enable this office to discover such errors immediately, and take the necessary steps to ascertain the correct
figures. In order to avoid any misunderstanding, the following standard form of telegram has been devised.
Kindly state figures in even thousands and use numerals,
also if no report is received for a city on the list, please so
specify. Please give by name nonreporting banks in
cities for which incomplete returns are being forwarded.
It is suggested that you use this form in obtaining the
i niormation from the several clearing-house managers:

(6) All debits, including checks paid, on United States
Treasurer's account.
These figures are to be given separately, in even thousands, for each Federal Reserve Bank and branch carrying
separate accounts, the branches in the latter case reporfcing direct to the Board. These data should also cover
the weekly period ending Wednesday evening.
Copies of these instructions are transmitted direct to
Federal Reserve branches having deposit accounts.

The following letter, referred to above, was
sent to clearing-house managers on August 30:

Reports of the total check transactions received for the
two previous weekly periods make it desirable to supplement our letter of August 1, transmitted to you through
the chairman of the board of directors of the Federal Reserve Bank of your district. There are indications that
the instructions regarding the information desired have
not been interpreted in exactly the same manner in ail
the centers from which data have been requested. Hence
it is believed desirable, in order that the information
secured may be placed upon a strictly comparable
basis, to state in greater detail what sort of information
is wanted.
It is desirable to have each clearing house member
bank in your city report to you each week for the previous
weekly period ending Wednesday evening—
(a) The total debits charged by it to account of individuals, firms, and corporations, and the United States
Government. Checks against all accounts, including
savings and trust accounts, with such banks, cashiers'
checks, expense checks, and certificates of deposit paid
should be included. Corrections or like charges should
be excluded.
(6) Total charges to accounts of banks and bankers, excluding debits in settlement of clearing-house balances
and corrections or like charges. Drafts and checks drawn
by reporting bank on other banks are not to be included.
While this office does not wish to impose any undue
burden, it is very important that in all cases separate
figures be be shown for the two items, debits to individual
MEMBERS' CLEARING-HOUSE REPORT.
accounts and debits to banks' and bankers' accounts inDebits to individual account.
stead of one total figure covering all debits.
Debits to banks' and bankers' account.
The combined totals, in even thousands, for your local
Total.
clearing-house banks, for each item, for the week ending
Wednesday evening should be telegraphed on Thursday
FEDERAL RESERVE BANKS.
of each week to the chairman of the board of directors of
Debits to bank account.
the Federal Reserve Bank of your district. In case some
Debits to Government account.
member or members of your clearing house who are not
Total.
members of the Federal Reserve System object to furnishThere has been some misunderstanding as to the items ing this data called for, we would again request that you
to be included in the reports of debits by the Federal please forward totals of the returns actually received by
Reserve Bank and branches. These have been stated as you from assenting banks, adding the names of banks
follows:
which do not report.

SBFTHMBBB 1,1918.

828

FEDEBAL RESERVE BULLETIN.

Th© figures transmitted to the Board as a
result of this call were first issued on August 24
in a statement as follows, accompanied by
figures for the weekly periods ending August
15 and August 21:
The Federal Reserve Board has undertaken the preparation of periodical statistics of the volume of the Nation's
banking business. This service has been furnished heretofore by the clearing house section of the American
Banicers Association, that organization publishing figures
compiled from reports by some 31 clearing house associations. There are, however, about 250 such associations in
the "United States and efforts are being made by the Board
to enlist cooperation by all of them.
The figures heretofore published by the clearing houses
themselves and by some of the financial weeklies were
simply those of checks cleared, and these naturally can
not give as complete a picture of the situation as
figures showing all debits to deposit accounts. It is.
of course, impossible to estimate the number of business concerns in the country that use the facilities of
the same bank and whose checks are cleared, on the
books of the same bank. The custom prevails in many
large industrial centers of drawing one "cash" check
for the entire pay roll of a plant. Such checks do not,
of course, rearch the clearing house and, as a rule, the

employees receiving the proceeds of those checks do not
maintain checking accounts.
In inaugurating its service the Board has, therefore, requested all clearing house managers to telegraph each
week figures showing total amounts of debits to deposit
accounts, including all checks paid during the week by
member banks of their respective clearing houses, and it
is expected that the uniform method adopted will reflect
more accurately not only the volume of banking business
done, but the relative importance of each dealing house
city. To-day's statement, being the first, is necessarily
incomplete, comprising returns made by about 100 clearing houses only, but as the plan and its purpose become
better understood, it is believed that within a few weeks
the Board's tabulation will furnish a more reliable index
of the volume of banking business. Comparisons will be
made each week with the preceding week, and at the end of
twelve months, with the corresponding week of the previous
year. To-day's figures include transactions from Thursday,
August 15, to Wednesday, August 21, inclusive, compared
with figures for the week from Friday, August 9, to Thursday, August 15, inclusive. In the future, reports will cover
the week ending Wednesday, so as to avoid conflict with the
reports' obtained by the American Bankers Association.
8

Figures by Federal Reserve districts for the
weeks ending August 15, 21, and 28 are as
follows:

[In thousands of dollars; i. e., 000 omitted.!
.Debits to individual account;.
Aug. 21.

District No. 1—Boston:
Bangor
Boston
Fall River
Holyoke
Lowell
New Bedford
New Haven
Providence
Springfield
Waterbury
Worcester
District No. 2—New York:
Albany
Binghamton
Buffalo
Montclair
New York

227,842
7,683
2,686
15,621
5,429 !
16,975 i
29,551 ;
i 11,965 !
18,663 i
14,883 !

2,703
201,271
2,910
5,447
5,600
16,330
26,756
11,916
7,426
14,894

16,091 |
17/312
2,719 !
2,702
53,907 '
54,697
1,257
1,163
,702,736
2,788,004
942
1,072
4,787
3,214
23,747
21,621

Aug. 28.

2,330
208,512
7,060
2,633
4,296
4,624
13,525
22,436
6,912
6,419
12,402

Debits to banks 1 and bankers'
account.
Aug. 15.

181,985
363
45
147
893
1,917
614
1,600

373
202,200
39
79
446
122
375
1,793
261
392
1,699

Aug. 28.

300
172,728
299
38
402
190
267
1,703
268
388
1,671

17,012
2,481
49,877
1,062
3,084,885

6,698

10,002

11,133
84
1,276,512

11,944
90
1,422,560

12,232
43
1,377,342

2,895

298

159
394

306
393

.103
57

277,272

297,677

454
28,803
Rochester
District No. 3—Philadelphia:
3,012
1,993
2,468
Altoona
4,661
4,875
Chester
4. " " "
Harrisburg
34
4,013
3,656
4,183
Lancaster
2,206
1,479
2,050
Lebanon
1,400
1,131
Norristown
261,792
246,881
244,669
227,922
Philadelphia
,
5,799
7,062
6,335
Reading
12,075
10,963
12,881
Scranton
5,202
5,937
6,019
Wilkes-Barre
22
2,772
2,957
2,730
Williamsport
3,418
2,817
2,617
York
5,225
3,071
Wilmington
1
Figures comprise debits to both individual account as well as to banks' and bankers' account.

Aug. 21.

21
35

824

SEFTBMBBB 1,1918.

FEDERAL RESERVE BULLETIN.

Debits to individual account.
Aug. 15.
District No. 4—Cleveland:
Cincinnati
Columbus
Dayton
Erie
Toledo
Youngstown
District No. 5—Richmond:
Baltimore
Richmond
District No. 6—Atlanta:
Atlanta
Augusta
Birmingham
Chattanooga
Jacksonville
Knoxvillo
Macon
Mobile
Montgomery
Nashville
New Orleans
Pensacola
Savannah
Tampa
Vicksburg
District No. 7—Chicago:
Ann Arbor
Aurora, 111
Bay City, Mich
Bloomington, III
Cedar Rapids
Chicago..!
Danvillo, III
Davenport
Deeatur, III
Des Moincs
Detroit
Dubuquc
Flint
Fort Wayne
Gary
Grand Rapids
Hammond, Ind
Indianapolis
Jackson, Mich
Kaiamazoo
Lansing
Mason City, Iowa
Mil vvaukce
Muncio, Ind
Musoatms, Iowa
Oshkosh
Peoria
Kockford, 111
Sioux City, Iowa
South Bend
Springfield, 111.
Waterloo, Iowa
District No. 8—St. Louis:
Bc-wling Green, Ky
BrookQcld, Mo
Ghillicotho, Mo
E vansville, Ind
Helena, Ark.
Jacksonville, ill
Little Rock
Louisville
Memphis
Owensboro. Ky
Pine Bluff, Ark
,
St. Louis
Texarkana, Ark
District No. 9—Minneapolis:
Aberdeen
Bismarck
Duluth
Helena
Minneapolis
St. Paul
Superior

Aug. 21.

52,796

Aug. 28.

Debits to banks' and bankers'
account.
Aug. 15.

54,619
22,423
10,133
5,250
19,677
11,406

45,417
18,703
10,519
5,238
30,000
12,187

35,923

6,113
5,827
19,690
13,991
75,720
24,652

79,850
23,399

71,398
19,538

39,299
46,305

20,748
5,970
12,878
7,732
8,205
3,891
6,029
4,943
3,173
17,558
47,786
1,574
10.597
3,196
1,039

17,156
6,257
11,649
7,175
9,634
4,544
4,906
5,624
2,859
16,903
53,180
1,525
10,669
3,375
1,057

5,481
10,895
7,561
9,302

13,341
40,187
3,450
11,010
2,246
2,239
12,175
U.001,495
1,194
12,241
3,363
143,142
107,532

|
!
i
I

2,147
111,643
525,567

12,838
1,926"
Ul,411
482,999

4,070
3,362
144,809
112,125
12,611
15,343
16,545

4,426
3,175
i 39,466
93,950
12,250
18,309
4,196

527
45
8,305
113

2,402
3,529
4,643

16,761
25,602
1,545

Aug. 21.

Aug. 28.

38,971
3,031
510
104
6,767

39,920
3,017

39,085
58,661

41,190
50,467

17,758
527
2,706
3,1S8
5,017
1,276
1,851
646
100
8,606
28,637
801
2,396
1,949
64

16,450
593
2,566
2,725
5,300
513
2,285
705
183
14,576
30,888
964
6,115
927
37

16
6,528
173

"9oi"

852

"547,"ii4'
71

901

" 522," eiil

"""684'

3,838
472

1,548
594

* 33," 323

44,753

42,698

"i,"473

116,590

1,543
46,975
12,011
1S65
U,557
9,292

**27,"i9i'

19,000

93
25,197

39,104

153
27,807

"27," 093

24,907

1,772
124
348

1,785
126
3,102

932
978

836
820

24,440

168

6,224
4,102
6,027
» 3,802
3,703
2,665
532
165
367
2,990
671
717
4,822
23,342
23,600
1,118
1,474
127,232
735
1,519
406
11,153
1,526
96,000
23,280
1,681

1,794
3,210

2,652

741

165
4,137
12,726

187
16,365
11,945

176

161
1,130
136,000

143,664
624
1,012
380
2.840
2,709
80,070
30,720

i Figures comprise debits to both individual accounts as weU as to banks' and bankers7 accounts

1,490
364
4,048
95,298
33,127

3
1
368
1,313
12
66
4,316
12,487
11,437
80
758
139,182
430
958
294
2,624
2,141
80,000
32,705
104

1918.

825

FEDERAL RESERVE BULLETIN".

Debits to individual account.

Debits to banks' and bankers'
account.
Aug. 15.

District No. 10—Kansas City:
Atchison
.'
Bartlesville, Okla
Colorado Springs
Denver
Emporia, Kans
Fremont, Nebr
Grand Island, Nebr
Guthrie, Okla
Joplin
Kansas City, Kans
Kansas City, Mo
Lawrence
Lawton, Okla
MacAlester, Okla
Muskogee, Okla
Nebraska City
Oklahoma City
Omaha
Pittsburg, Kans
Pueblo
St. Joseph
Topeka
,
Tulsa
Wichita
District No. 11.—Dallas:
Austin
Beaumont
Dallas
El Paso
Fort Worth
Galveston
Houston
Shreveport
Texarkana, Tex
Waco
District No. 12.—San Francisco:
Bakersfleld
Fresno
Long Beach
Los Angeles
Oakland
Ogden
Pasadena
Portland...
Salt Lake City
San Diego
Seattle
Spokane
Taeoma
Yakima

i 2,562 I
2,430 !
12,404 |
21,194 i
1,304 !
1,021 :
919 !
3,821
3,685
102,978
1,901
993
2,800
455
12,085
56,636
3,120
M,225
141,555
1
10,668
]

12,132
3,295
17,239
4,506
19,955
1,211
1,417
3,242
1,273
4,994
2,000

i 11,932
2,024
35,816
13,613
5,473
40,934
9,191
1,379

1,688
2,524
2,514
22,378
1.181
'745
901
554
3,857
3,516
98,458
982
1245
1,008
2,255
409
12,046
56,320
1,033
2,320
13,288
3,674
123,606
i 11,484
3,737
32,104
4,030
12,795
8,833
22,741
3,822
1,741 ,
2,842
1,395
4,372
1,908
44,548
10,559
1,856
35,146
H i 638
4,400
48)774
8,631
10,801
1,555

1,322
1,860
2,036
25,458
1.133
' 954
4.289
3; 679
2,782
79,716
762
941
441
2,051
467
10,235
58,419
1,189
2,569
8,660
3,518
15,543
8,581

999
81
1.298
16', 082
10
809
132
303
481
5,006
191,024
329

214
15,322
11
645
115
412
6,264
#8,293
522
750
1,162
193
11,145
52,522

672
1,668
103
10,231
47,539
15
972
16,858
1,103

979

18,026
2.929
22,131
4,545

279
31,878

8,893
23,257
4,062
1,212
2,314

3,076
46,442
571
168
1,601

1,100
4,442
1,707
27,196
9,967
2,365
1,504
39,041
10,933
4,310 I
41,908
8,690
11,076 ;
1,479 I

A u g . 21.

273
37,620
5,857
26,315
5,129
58,690
2,480
803
2,346

26
1,127
50

11
573
65
17,825
2,640

141
20,146
13,229
172
17,151
7,946

122
20,222
12,498
354
17,729
8,326
3,707
149

112

Auir. 2«.

95
570
18,653
551
129
2.375
'618
5,524
172,610
368
68
544
1, 711
103
11,370
81,945
19
713
18,863
1,176
-S, 161
13.476
ISO
49,624
6,660
55,952
2,510
269
892
17
429
70
24,494
2,109
1,541
196
22,828
12,857
200
17,359
7,346
4,013
1.51

1 Figures comprise debits to both individual accounts as well as to banks' and bankers' accounts.

Recapitulation shottingfiguresfor clearing-house centers reporting for each of the three weeks.
[In t h o u s a n d s of dollars; i. c , 000 o m i t t e d . ]

Number
of centers
included.

District.

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

1—Boston
2—New Y o r k

3—Philadelphia
4~Cleveland
5—Richmond.
6—Atlanta
7—Chicago
8—St. Louis
9—Minneapolis
10—Kansas Citv
11—Dallas....;
12—San Francisco
Grand total

'.'".

;•
'.".'.

!!""!!".!!!!!!"."!!!!!"!!!!!!!!!!"
. . . .
"* .

Debits to individual account.

Debits to banks' and bankers' account.

A u g . 15.

A u g . 21.

A u g . 28,

A u g . 15.

A u g . 21.

341,298
2,805,244
280,150
98,417
100,372
90,247
1,283,984
160,779
107,356
264,784
62,997
128,629

300,241
2,888,713
265,157
101,085
103.249
103'. 325
831', 786
162,250
132,981
239;561
87,304
131,234

288,819
3,187,015
282,809
103,361
90,936
108,173
751.563
160;753
132,358
212,945
72,824
125.081

187,564
1,295,179
261,886
44,913
85,604
55,064
86,769
163,527
115,022
298,538
84,015
60,10C '

207,406
1,445,149
277,376
46,393
97,746
50,630
652,541
105,409
134,347
278,527
107,341
62.689

177,954
1,403,569
297,790
46,637
91,857
57,575
625,025
157,447
116,581
305,503
118,104
63,562

106 I 5,734,987

5,347,186

5 ; 519,637

2,738,181 I 3,525,554

3,459,401

A u g . 28.

NOTE.—Large difference between Chicago figures for the two earlier dates is due to the fact that figures for tho first week are not divided
between debits to individual account and debits to banks' and bankers' account, the total debit to both individual and bank accounts being shown
in the column headed "Debits to individual account."

826

FEDERAL RESERVE BULLETIN".

Shortly after the Board undertook the development of the statistical returns relating to
total bank transactions, arrangements were
concluded with the clearing-house section of
the American Bankers' Association, which for
some time past has been gathering similar
figures, for consolidation of the two series of
data on this subject in the hands of the Board
for weekly publication. The following statement, prepared by Mr. Jerome Thralls, secretary of the clearing-house section, affords a
review of what has already been accomplished
in the compilation of figures for total transactions.
For many years the statistics referred to as "bank clearings' ' have been universally regarded by business people
as a true barometer of business conditions, growth, and
development. They have served as a basis of determining
the location of business houses, factories, banks, and other
enterprises.
Since the bank clearings fluctuate in practically the
same proportion as does business in the various communities, they may rightfully be regarded as having much
value, but they do not in any sense show the actual business
that is transacted in a community.
The plan of settling balances and handling the exchanges in the various clearing houses has not been uniform. In some cases the clearings include duplications
in the form of cashier's checks issued in lieu of items
cleared and returned direct to members, because of payment thereon being refused, also include checks drawn
against members by the clearing-house managers in settlement of balances and which are not collected, but are carried over and recleared on the following day. There is no
way of determining what is the total of such items, but

SEPTEMBER 1,1918.

were the total of these items known and the amount
excluded from the clearings, the figures would not then
represent the actual business transacted, because a great
proportion of checks and drafts are deposited in or cashed
at the banks upon which they are drawn. These do not
pass through the clearing house.
It is estimated that about 4 or 5 per cent of the business
transacted in the United States is transacted through the
means of actual cash or money. Checks and drafts are
used in handling the other 95 or 96 per cent.
Realizing the value that accurate statistics as to the
total volume of checks and drafts representing actual business transacted would be to the business interests, the general public, and to the banks, the clearing-house section of
the American Bankers' Association started a movement
over 10 years ago designed to educate the banks and
clearing houses to this need.
At its annual meeting, May 4,1908, at Lakewood, N. J.,
the clearing-house section adopted the following resolution:
Whereas the present method of reporting the volume of
clearing-house transactions does not accurately represent
the volume of business transacted; now therefore be it
Resolved, That we recommend that each bank report
weekly to the manager of the clearing house in its own
city the total of all checks on itself charged on its books,
excepting cashiers' checks given in payment of clearinghouse balances.
Since that time the section has continuously encouraged
this idea, but was not able until 1913 to get any clearing
house to accumulate and report these statistics regularly,
and not until the year 1916 did the section get a sufficient
number of clearing houses to make the reports to warrant
the figures being published.
About 100 clearing houses have at different times
attempted the compilation of these figures, yet only 29
clearing houses have made the reports regularly and in
such shape as would permit of their being published
quarterly. Statistics covering these 29 cities for sixmonth periods are given herewith:

SEPTEMBER 1,1918.

Total bank transactions.

Clearings.

Second half
1917.

First half 1918.

§991.425,000
64,548,000
1,024,3S6,000
205.756,000
1,365,600,000
35,044.000
112,4(53,000
196,340,000
345,250,000
4,268,898,000
722,054,000
497,989,000
335,577,000
993,116,000
1,174,074,000
136,607,000
1,000,646,000
279,334,000
901,025,000
98,822,000
2,602,786,000
374,788,000
90,089,000
644,024,000
27,750.000
1.90,292', 000
52,861,000
89,355,000
68,770,000

81,130,230,000
54,073,000
618,103.000
256,375,000
1,419,884,000
34,165,000
126,445,000
202,465,000
362,304,000
4,832,598,000
740,591,000
622,347,000
310,546,000
761,842,000
1,355,120,000
151,435,000

18,889,069,000

18,791,311,000

First half 1917.
Atlanta. Ga
Cedar Rapids, Iowa..
Cincinnati, Ohio
Des Moines, Iowa
Detroit, Mich
Fort Wayne, Ind
Grand Ramds, Mich..
Hartford, Conn
Indianapolis, Ind
Kansas City, Mo
Los Anseles. Cal
Louisville, ity
Memphis, Tenn
Minneapolis, Minn.*..
New Orleans, La
Oakland, Cal
Omaha, Nebr
Providence, K. I
Richmond, Va.*
Sacramento, Cal
San Francisco, Cal. 1 ..
St. Joseph, Mo
Scranton, Pa
Seattle, Wash
South Bend, Ind
Spokane, Wash
Stockton, Cal
Tacoma, Wash
Trenton, N. J
Total

827

FEDERAL RESERVE BULLETIN.

8847,901,000
280,214,000
3,340.411,000
819,365,000
3,129,306,000
229,092,000
300,839.000

434,121,000
1,070,147,000
5,403,533,000
1,381,123,000
1,422,796,000
1,197,141,000
3,137,027,000

1,712,767,000
259,180,000
2,257,882,000
031,698,000
3,336,147,000
361,102,000
5,214,190,000
1,968.958,000
253,950,000
1,124,421,000
66,558,000
384,685,000
80,873,000
195,359,000
202,537,000
41,043,323,000

First half 1918. First half 1917.

$607,039,000
81,291,824,000 SI,389,036,000
321,679,000
62,439,000
332,017,000
3,622,515,000 4,079,992,000
999,727,000
901,075,000
1,061,408,000
213,011,000
3,225,650,000 3,259,585,000 1,365,272.000
255,323,000
277,481,000
41,443,000
307,396,000
297,499,000
124,648,000
433,373,000
476,023,000
219,210,000
1,120,815,000 1,164,804,000
339,652,000
6,273,934,000 7,457,514,000 3,278,717,000
740,615,000
756,692,000
775,670.000
1,566,720,000 2,090,336,000
508,832,000
1,506,336,000 1,466,218,000
270,354,000
4,037,348,000 3,837,782,000
760.746,000
2,014,344,000 2,324,876,000
880,723,000
284,339,000
303,738,000
131,(541,000
2,433,536,000
864,517,000
'662,374,000
73i,"359,"666"
266,351,000
3,457,407,000 2,135,909,000 !
601,508,000
480,867,000
433,958,000
64,194,000
7,742,276.000 5,358,324,000 2,209,824,000
1,978,688,000 3,371,171,000
383.072,000
276,939.000
298,958,000
91,756,000
1,437,702,000 1,566,109,000
508,160,000
74,324.000
77,765,000
27,395,000
451,163,000
415,229,000
152,523,000
113,403,000
94,923,000
40,224,000
245,882,000
399,864,000
70,563,000
231,203,000
239,061,000
64,748,000
47,499,448,000

45,687,293,000

15,923,959,000

297,594,000
1,062,573,000
87.197,000
2,543,305,000
463,988,000
97,164,000
806,847,000
28.977,000
195,541.000
50,197,000
109,129,000
69,270,000

i There will be noted a material shrinkage in both clearings and total bank transactions in Minneapolis, Richmond, and San Francisco. This
is due to the fact that the clearing houses in these cities were, until about Jan. 1, 1918, including tho figures of the Federal Reserve Bank. These
figures aro not included in tho first half of 1918.

Total bank transactions are a true and dependable EXHIBIT A.—Statement oj total bank transactions—Clearing
House Association.
barometer of business conditions, growth, and development. They are of value to the individual bank because
they reveal the activity of its deposits. They are of value
Total debits Total debits Certificates
Cashier's
C. H . No.— on individual on country
of deposit
checks
to the business man because they enable him to deterbooks.
books.
paid.
paid.
mine as to whether he is keeping pace with his community
and with the country at large. They are of value to the Thursday
general public because they represent the history of the Friday
Saturday
business that is actually transacted. The clearing houses Monday
that have regularly reported these figures have found that Tuesday
Wednesday
through the use of the plan evolved by the clearing house
—— — —
—
—-Total
section, the figures are accumulated almost automatically.
i
They represent debits against all accounts covering indiTotal debits on individual books for week...
vidual, bank, general and savings deposits.
Total debits on country books for week
of certificates of deposit paid for week.
Exhibit A is the form that is furnished by the clearing Total
Total of cashier's checks paid for week
Grand
total
houses to their respective members and on which report
The above statement is correct,
is made to the clearing house manager Thursday morning for week ending Thursday.
Cashier.
of each week, including the figures for the week ending Date
Wednesday.

828

FEDERAL RESERVE BULLETIN.

Exhibit B is the form used by the clearing house manager in reporting at the close of each week to the clearing
house section of the American Bankers Association.
EXHIBIT B.
.19.
TOTAL BANK TRANSACTIONS debits against deposits in banks as
reported to the
Clearing House Association for the week
ending Wednesday
, inclusive. 9
(Date.)
Manager.
To be mailed each Thursday. To include total charges.against all
deposits by check, draft or charge ticket. Do not include "Certified
Checks," "Cashier's Checks," or any other general ledger items.
CLEARINGS for week ending
(Day of Week.)
(Date.)
$

In July of this year the clearing house section started a
campaign through which it hoped to get within the year
at least one hundred leading clearing houses to accumulate
and report the total bank transactions direct to the section
regularly. The Chicago, Cleveland, St. Louis, Milwaukee,
Pittsburgh, Houston, Joplin, Mo., Rochester, N. Y., and a
number of other important clearing houses have decided
to make the reports, but on learning of the Federal Reserve Board's purpose to undertake the compilation of
total bank transactions for the entire United States, the
secretary of the clearing house section obtained authority
from the executive committee of the section to cooperate
with the Federal Reserve Board in every possible way to
the end that the statistics shall be made available. Too
much value can not be attached to this movement.
The clearing house section includes in its membership
every organization in the United States that can rightfully
be termed a clearing house association. There are 229
such organizations. The section has sent a letter to the
clearing house managers, urging them to comply with the
Federal Reserve Board's request to obtain these figures
from the clearing house banks, and transmit the totals at
the close of each week to the Federal Reserve Agent of
their respective districts.

The letter referred to is as follows:
AUGUST 28, 1918.

To clearing-house managers.
GENTLEMEN: The Federal Reserve Board recently determined to undertake to accumulate the total bank transactions for the entire United States.
The clearing-house section evolved a plan for the reporting of these figures and has made determined effort for
several years to put it into general operation. About 100
clearing houses have at different times attempted to compile total bank transactions, but only 30 of these have made
their reports with regularity. In these 30 cities the figures have proved of tremendous value to the officers of
the individual member banks, to the clearing houses, and
to the business public.
There is a growing need for information which will
truly reflect the actual business that is transacted throughout the country. Bank clearings, although representing
possibly not over one-third of the total volume of business,
have been regarded as a barometer of much value. They

SEPTEMBER 1,1918.

have served as a basis of determining the location of business houses, factories, banks, and other enterprises. They
include many duplications, and owing to the varied plans
of settlement are not entitled to the consideration they
have heretofore been given.
The clearing-house section will cooperate with the Federal Reserve Board in its commendable undertaking and
earnestly requests that every clearing house comply with
the Federal Reserve Board's call for these figures. The
figures are of tremendous value and should be made available for the entire country.
Fully 95 per cent of all business of the country is transacted through the means of checks and drafts. Under the
Federal Reserve Board's plan of accumulating the total
bank transactions the volume of such instruments can be
very closely determined, thereby giving to the country a
barometer of business that has real merit.
Sincerely, yours,
JEROME THRALLS,

Secretary.

Loans for Relief of Banks and Individuals.
During the latter part of July and in the
course of the month of August the War Finance Corporation, and subsequently the Treasury Department and the Department of
Agriculture, took steps for the making of advances to banks and individuals in the cropraising sections of the West and Southwest.
The first step in the process of making
advances to western banks, already noted in
the FEDERAL RESERVE BULLETIN for August,
was announced in a statement issued to the
press by the War Finance Corporation on July
23, as follows:
The board of directors of the War Finance
Corporation announced to-day that at the
suggestion of Secretary McAdoo it had wired
the Federal Reserve Banks of Dallas, Kansas
City, and Minneapolis, requesting them to
notify the banks and trust companies in their
respective districts, nonmembers as well as
members of the Federal Reserve system, of
the willingness of the War Finance Corporation to make advances, under section 7 of
the War Finance Corporation Act, to banks
and trust companies which had made loans to
farmers and cattlemen.
It is hoped that this measure will enable
these institutions to extend credit freely both
to farmers and cattlemen whenever necessary
to insure the preservation of these essential
industries, in localities where droughts have
seriously impaired their productivity.
Under the terms of the War Finance Corporation Act, these advances are limited to

FEDERAL EESEEVE BULLETIN.

SEPTEMBER 1,1918.

75 per cent of the amount of the loans made
by the borrowing institution, or to 100 per
cent in case the borrowing institution itself
furnishes additional collateral to the extent
of 33 per cent of the advance. Such advances
will be made by the War Finance Corporation
upon written application through the several
Federal Reserve Banks, acting as its fiscal
agents, but only after consideration of their
recommendations, upon the promissory note of
the borrowing institution, secured by the obligations of the farmers and cattlemen to
which loans have been made by the borrowing institutions, together with any security
taken for such obligations.
The following is quoted from Secretary
McAdoo's telegram to Gov. Harding:
" Droughts in Montana, parts of North Dakota, Kansas, and Texas are creating a serious
situation for the farmers there, involving possible abandonment of farms and sacrifice of live
stock. I think that effective assistance can
be rendered by the War Finance Corporation.
This corporation was created to help finance industries essential to the war, and 1 know of no
industry more vital to the war than that of raising wheat, corn, live stock, and other food products. Aid should be extended by the War Finance Corporation to the farm industry and to
every other industry which is vital to the prosecution of the war. I think the War Finance
Corporation should make7 loans to national and
State banks on farmers paper. This would
enable all national and State banks to extend
loans to deserving farmers, with full knowledge
of the fact that such paper can and will under
the terms of the act be taken by the War
Finance Corporation. I am sure that the
Department of Agriculture will be glad to
cooperate in the same direction through the
agents and agencies of that department."
JOINT ACTION ON FARM LOANS.

Joint action on the part of the Treasury
Department and the Department of Agriculture
was undertaken just at the close of the month
of July, in the exercise of powers placed in the
hands of these departments by the President,
who put at their disposal the sum of $5,000,000
as a basis for direct loans to farmers.
The following statement was given out by
the Treasury Department and the Department
of Agriculture on July 30:

78653—IS

829

Acting upon the urgent representations that
many wheat growers in certain sections of the
West who have lost two successive crops by
winterkilling and drought have exhausted their
resources and may be compelled to forego fall
planting and, in some cases, to abandon their
homes unless immediate assistance is extended,
the President, on Saturday, July 27, placed at
the disposal of the Treasury Department and
the Department of Agriculture the sum of
$5,000,000 to enable them to furnish aid to that
extent. The two departments are already
actively at work formulating plans for making
loans under this authorization, and complete
details will be announced within the next few
days and operations begun,
It may be stated generally that the Federal
land banks in the districts affected will be
designated by the Secretary of the Treasury as
the financial agents of the Government to make
the loans and to collect them. The Department of Agriculture, through its special officers, including the county agents, will ascertain
the needs of the individual farmers and determine the feasibility of the planting.
The primary object of this fund is not to
stimulate the planting of an increased fall
acreage of wheat or rye in the severely affected
drought areas, or even necessarily to secure the
planting of a normal acreage, but rather to
assist in tiding the farmers over the period of
the stress, to enable them to remain on their
farms to plant such an acreage as may be determined to be wise under all the conditions
with a view to increase the food supply of the
Nation and to add to the national security and
defense. It is distinctly not intended to be
used to stimulate the planting of wheat or any
other grain where such planting is not wise
from any agricultural point of view and where
other activities are safer.
It is not intended that this fund shall be
used to make loans to farmers who have banking collateral and can otherwise secure loans.
The recent action of the War Finance Corporation, indicating its willingness to make advances
to banks and trust companies which have made
loans to farmers and cattlemen, should ease
the general financial situation and in large measure enable bankers to extend accommodations
to farmers having such collateral. Banks are
urged to a^ail themselves of the offer of the
War Finance Corporation.
This fund, because of its limited amount,
will be used necessarily principally in connection with the fall planting of wheat or of preferred substitute grain in the areas involved.

830

FEDERAL RESERVE BULLETIN.

This will not exclude consideration of cases of
individuals who do not intend to, or who can
not, engage in fall seeding who might otherwise be compelled to abandon their homes and
make great sacrifices, provided sufficient funds
are left after considering the pressing fall planting needs.
The loans will probably not be made for
more than $3 an acre, and it is likely that a
maximum of 100 acres in some localities and
of 150 in others will be established. In addition to paying a reasonable rate of interest,
each farmer will be required to contribute to
an insurance fund out of the proceeds from the
sale of his crops if his operations are successful.
POLICY OF LOANS.

Further explanation of the plan of rendering aid direct to farmers was afforded in a
more complete statement of policy which was
issued by the Treasury Department and the
Department of Agriculture jointly on August
1, 1918. The statement in question reads as
follows:
This statement should be read in connection
with that issued on July 29. The areas now
under consideration are those in the Northwest and Southwest where two successive crop
failures have resulted from severe drought and
winter-killing.
The money will be advanced as a loan in
cases of necessity upon the crop of wheat or
substitute grains planted. No loan will be
made in excess of $3 per acre, and no applicant
will be financed beyond one hundred acres.
Therefore, no loan will be made in excess of
$300. Notes given will bear 6 per cent interest payable in the southern districts October 1, and in the northern districts November 1, 1919.
The Federal land banks of the districts embracing the affected areas will be designated
by the Secretary of the Treasury as the financial agents of the Government to make and
collect the loans. They will expect the cooperation of local banks in the taking of applications, forms of which will be supplied on
request, as soon as they can be printed.
Banks and other local agencies assisting will
be asked to contribute their services for the
good of their several communities.
The determination of the question of making each loan will, in the first instance, rest
with the Department of Agriculture, which,
through its various agencies, assisted by farm

SEPTEMBER 1,1918.

loan associations and other local farmers organizations, will investigate each application.
Applicants must agree to use seed and
methods approved by the Department of
Agriculture, and the money will not be
advanced until the crop is planted and a representative of that department certifies to the
Federal land bank that the applicant has
completed his planting in proper manner and
with proper seed. Upon the receipt by the
Federal land bank of such certificate, applicant
will be required to give note and chattel mortgage on the crop planted.
In order to give applicants a basis for temporary credit, to assist in obtaining the seed,
the Department of Agriculture will promptly
investigate all applications, and as soon as
approved the Federal land bank will issue a
statement of approval to the effect that the
money will be advanced when the crop is
planted and the necessary certificate and note
and mortgage are executed and delivered.
The machinery of the Treasury Department
and the Department of Agriculture for this
work is already in existence and will be put
in motion at once, and no substantial delays
will result if the interested communities do
their own part promptly.
Banks wishing to assist their communities
in this matter should at once communicate
with the Federal land bank of their district.
The plan is to assist only those who have
exhausted their resources. No loan will be
made to any farmer who has unincumbered
real or personal property sufficient to secure a
loan of $300. In such cases country banks
are urged, as a matter of public service, to
render assistance and avail themselves of the
facilities of the Federal Reserve Banks and
the War Finance Corporation, which are prepared to render support to such efforts.
Each borrower will be required, as a part of
his contract, to agree that, if his yield is 7
bushels per acre, or more, he will pay into a
guaranty fund a sum equal to 25 per cent of
the amount loaned him to cover any losses that
may occur. If the amounts so contributed
exceed the actual loss by the Government, the
excess will be returned pro rata to the
contributors.
LOANS ON LIVE STOCK.

Direct loans to individuals, firms, or corporations engaged in the raising of live stock were
determined upon and the fact announced on
August 13, when the Secretary of the Treasury
stated—

, 1918.

831

FEDERAL KESEKVE BULLETIN.

125 per cent of cost value of goods, form the
basis of collateral to secure the respective loans
to canners. The warehousing company is
managed by 11 of the most representative
and well-known canners of New York State.
The arrangement provides that every canner
in the State can avail himself of the facilities,
afforded, and no canner will be refused relief
if he is worthy of it and has the required
security.
The canning industry of New York State is a
large one, particularly active in the northern,
section of the State. In their application for
aid the canners stated that in the last two
seasons, when the crops were light, only a comparatively small amount of funds was required,
while the present season's crop is a large one.
Furthermore in responding to the needs of the
times the canners have extended their acreage
and enlarged their production. They stated
also that the amount of money they have been
able to procure from the banks with which they
deal is entirely inadequate to enable them to
continue their business and save these perishable
food products; that the cost of containers and
other expenses have increased; that the situation was precarious and a serious food loss was
threatened, and that aid, to be of real value,
had to come quickly as otherwise a large
amount of perishable food products would be
lost, to the great detriment of growers, canners,
and the consuming public, as well as our soldiers
overseas.
The attitude of the War Finance Corporation
has already relieved the situation and has
averted the serious food loss with which the
canning industry of New York was confronted.
The comprehensive plan under which this
relief is given was suggested to the canning
industry by the War Finance Corporation. Its
LOANS TO CANNERS.
main feature is a carefully controlled system
Loans to the canning industry through the of warehousing goods at the respective canning
machinery of the War Finance Corporation plants, so that the necessary adequate security
were arranged and the outline of the plan given may be obtained for the money advanced, as
required by the War Finance Corporation Act.
to the public on August 17, as follows:
"that the War Finance Corporation would
make direct loans to individuals, firms, and
corporations whose principal business is the
raising of live stock, including cattle, sheep,
goats, and hogs. The live-stock industry, and
particularly breeding stock, in some parts of the
country is suffering great hardship by reason
of excessive drought conditions, and cattlemen
are experiencing great difficulty in feeding and
protecting their cattle. The action of the
corporation is intended to relieve this situation.
The loans will be made directly to the borrowers under section 9 of the War Finance
Corporation Act. That section authorizes advances to be made in exceptional cases directly,
without the intervention of banks, to borrowers
whose operations are necessary or contributory to the prosecution of the war.
«* * * Temporary organizations will be
immediately created for passing upon the
applications for loans as submitted. It is
not proposed at the present time to establish
agencies except at Dallas and Kansas City.
Applications from stock raisers operating in
the Atlanta and Richmond Federal Reserve
districts will for the present be handled by
the Federal Reserve Bank at Dallas, and applications from stock raisers operating in the
San Francisco, Minneapolis, and St. Louis
districts will be handled at Kansas City.
Applications from other districts will be made
to the corporation direct in Washington."

The War Finance Corporation announces
that it has effected an arrangement for extending financial assistance to the canners of New
York State. This action insures the harvesting
and preservation of this season's crop of spinach, peas, tomatoes, corn, and other vegetables,
as well as a great variety of small fruits.
A warehouse company has been organized
by the canners with paid-in capital of $100,000.
This warehousing company issues receipts for
goods stored, which receipts, to the extent of

FINAL DETAILS.

Final details of the plan for lending to individuals, firms, and corporations engaged in
the raising of live stock were completed and
announced on August 19, by the Secretary of
the Treasury in a statement "that the War
Finance Corporation had perfected its plans
for making direct loans under the provisions
of section 9 of the War Finance Corporation

832

FEDERAL EESERVE BULLETIN.

Act to individuals, firms, and corporations
whose principal business is the raising of live
stock, including cattle, sheep, goats and hogs.
"The Corporation has decided to create,
under authority of the act, two agencies, one
at Kansas City and one at Dallas. These
agencies will be known as the cattle loan
agencies of the War Finance Corporation and
their business will be confined entirely to the
consideration of applications for direct loans
to cattlemen. All applications from banks
for advances for crop-moving purposes and
other purposes will be received as heretofore
by the Federal Reserve Banks acting as
fiscal agents for the corporation.
"Each of the two cattle loan agencies will
be conducted by a cattle loan committee, one
with headquarters at Kansas City and the
other at Dallas, of which committees the
Federal Reserve agent and the governor of
the respective Federal Reserve Banks will be
members. Five additional members of each
committee will be appointed by the War
Finance Corporation. The cattle loan committees will in turn create such local organizations as may be necessary to carry the plan
into execution. All applications for direct
cattle loans must be made through the cattle
loan agencies which will refer such applications as they approve to the War Finance
Corporation for final approval.
"Only two cattle loan agencies will be established, and applicants residing in the Federal
Reserve districts of San Francisco, Minneapolis, St. Louis, and Kansas City, will send
their applications to the cattle loan committee
of Kansas City and those residing in the Federal Reserve districts of Dallas, Atlanta, and
Richmond will send their applications to the
cattle loan committee of Dallas. Cattle men
residing in other districts, who may have occasion to make application, will communicate
direct with the War Finance Corporation at
Washington.
"In order to expedite the formation of the
cattle loan committees and other details of
organization, Directors Clifford M. Leonard
and Angus W. McLean, and counsel S. W.

SEPTEMBER 1,1918,

Fordyce, of the War Finance Corporation,
will leave Washington Wednesday evening for
Kansas City, where they will consult and confer with representative bankers and cattlemen
in the two districts concerned."

Foreign Exchange.

Below are printed (1) questionnaire sent out
by Senator R. L. Owen, chairman of the Senate
Committee on Banking and Currency, in connection with S. 3928, providing for the establishment of a Federal foreign exchange bank,
and (2) data obtained in connection with an
investigation made in compliance with a Senate resolution calling for the volume of transactions and profits earned in certain neutral exchanges:
(l) EXCHANGE QUESTIONNAIRE.
UNITED STATES SENATE,
COMMITTEE ON BANKING AND CURRENCY,

August 1, 1918.
DEAR SIR: Attached hereto is a brief statement of the
proposed Federal reserve foreign bank, its organization,
and purpose.
Will you be good enough to answer the following questions, and oblige,
Yours, very respectfully,
ROBT. L. OWEN,

Chairman,
QUESTIONNAIRE TO IMPORTERS AND EXPORTERS.

1. Would it serve your interest as an importer or exporter to have established a Federal reserve foreign bank
through which you could obtain credit information with
regard to foreign buyers and sellers, and conditions ot
shipment of exports and imports such as insurance, storage, etc.?
2. Would it serve your interests to have, through such
an institution, international exchange stabilized on a
basis of reasonable compensation for service rendered and
the American dollar maintained at commercial par?
3. Would it serve your interests to have such a bank
serve as an intermediary to place international commercial acceptances, through the Federal Reserve system,
in the principal banks of the United States?
4. Do you get accommodations as low as the British
merchants—%\ per cent per annum—on international
acceptances?

SEPTEMBER 1,1918.

833

FEDERAL EESEBVE BULLETIN.

5. Do you favor establishing the Federal reserve foreign furnished them,
bank? If you do or if you do not, will you please give the BULLETIN.
your reasons?

a copy of which is shown also in

On June 26 the following instructions were
sent to 73 banking houses:

Firm name.

DEAR SIRS: A resolution was recently adopted by the

By.
City

State.
STATEMENT.

The Federal reserve foreign bank proposed is intended
to begin with a capital only sufficient for a'new establishment of this character, leaving open the]expansion|of the
capital as the needs of the American commerce require.
It will be controlled by the Federal Reserve Board and
a board of directors representing the Government of the
United States. Thus, the bank would have no selfish
interest to serve, but would have exclusively the interests
of the American commerce at heart and would, because
of its constitution, cooperate with other banks and bring
into the service of commerce on fair terms the full banking
powers of the United States. At present Lombard Street,
having a gigantic available capital representing the banks
of the whole world, will extend credits at 3J per cent, and
a number of American banks are using Lombard Street
for the accommodation of their own customers, thus paying
an interest abroad and keeping in London a business which
should be kept in the United States.
Attached hereto is a copy of the bill, subject to amendments, found advisable.
It is believed that this bill, if enacted into law, will
serve to stabilize the American dollar and make the dollar
a standard measure of value in international contracts,
and therefore very greatly promote American commerce,
the value of which is always measured primarily in terms
of dollars.
The policy of Great Britain of keeping her currency at
par is well known to everybody, and it is believed that
the American dollar can be kept at par only by having a
publicly managed institution with this duty imposed upon
it. The shipping of gold back and forth across the ocean
is an economic waste and could be avoided by this bank.

(2) EARNINGS ON EXCHANGE WITH NEUTRAL
EUROPEAN COUNTRIES.

The July issue of the BULLETIN printed a
letter addressed by the Secretary of the Treasury to the President dealing with the foreign
exchange situation. Section 2 of that letter
advised the President that the banks in New
York City which dealt in neutral European
exchange had been requested to furnish information covering their transactions from January 1 to April 1, 1918, as prescribed on forms

Senate as follows:
"Resolved, That the Secretary of the Treasury is hereby
directed to advise the Senate of the amount severally of
commercial and financial bills payable in terms of the
currency of the neutral nations of Europe which have been
bought and sold severally by the member banks of the
Federal Eeserve system and other banks and banking
houses dealing in foreign exchange in the city of New York
from January 1 to April 1,1918, and the amount of profit in
such transactions, and to advise the Senate what steps have
been taken to protect the par value of the American dollar
in the neutral countries of Europe, and what is the amount
of foreign balances held in the United States at this time
by such neutral nations."
The Secretary of the Treasury has requested the Federal
Reserve Board to obtain this information through the division of foreign exchange. We will have to ask you, therefore, to fill out the inclosed form and return to us. While
a reasonable time will unquestionably be allowed for the
preparation of the figures, yet they should be turned in to
the division of foreign exchange as quickly as possible.
Very truly, yours,
(Signed)
FRED. I. KENT,
Director, Division of Foreign Exchange.
EXPLANATION OF FORM FOR USE IN CONNECTION WITH
EXCHANGE PROFITS ON NEUTRAL COUNTRIES.

As the Senate resolution specifically requires profits on
transactions covering the purchases and sales of commercial and financial exchange in the currencies of the
neutral countries of Europe, it will be necessary to consider
such portion of all balances in the neutral countries of
Europe as were carried over from 1917 where sales were
made against them between January 1 and April 1. For
the sake of uniformity it is desired that the same rates of
exchange be applied as the purchasing value of such
balances, and rates for this purpose have been decided
upon as follows: Denmark, 31}; Holland, 44J; Norway, 33;
Spain, 24.50; Sweden, 34J; Switzerland, 4.34.
In case more exchange has been purchased during the
period than has been sold, it is desirable that the value of
the balance remaining be figured by all those concerned
at the same rate. Rates for this purpose have been
decided upon as follows: Denmark, 31J; Holland, 46};
Norway, 32; Spain, 25}; Sweden, 34; Switzerland, 4.30.
In purchases of exchange, commercial and financial bills
are to be divided as follows: All bills of exchange drawn
against exports of commodities from the United States
are to be considered as commercial bills, and all other
exchange purchased as financial bills.

834

FEDERAL RESERVE BULLETIN".

In sales of exchange, commercial and financial bills are
to be divided as follows: All sales of exchange in payment
of imports to the United States are to be figured as commercial bills, and all other exchange sold as financial bills.
Deductions for interest must be made on time bills purchased at exact rates at which they were discounted, or
rates at which discount is expected in cases where advices
have not been received. When such bills were allowed
to run before discount, or until maturity, the rate of
5 per cent per annum must be used in figuring deductions.
The rate of 5 per cent must also be used in covering loss
of the use of the funds.
Deductions for. overhead charges should be figured as
follows: The total overhead charges of the foreign exchange
department should be divided in such manner as to show
the proportionate amount represented by the transactions
of each neutral European country. Such amount should
be deducted from the gross profits of the respective
countries.
Taxes.—As the tax rate for 1918 can not be determined,
taxes should be deducted on the basis of the 1917 rate.
Every institution has undoubtedly figured the percentage
of taxes paid in 1917 to the profits, and this percentage
should be used in making the deduction.
RESULTS OF INQUIRY.

As a result of this request, reports were
received showing accounts with Norway, 26;
Sweden, 24; Denmark, 25; Holland, 39; Spain,
37; and Switzerland, 48.
The returns indicate that exchange dealings
with Norway, Sweden, Denmark, Holland, and
Switzerland rendered gross profits, while the
Spanish transactions resulted in a gross loss.
After making deductions for discounts on long
bills, interest, commissions, etc., overhead
charges, and taxes it was found that Norway,
Sweden, Denmark, and Holland showed net
profits and that Switzerland and Spain showed
net losses.
The demand for Norwegian, Swedish, and
Spanish exchanges was greater than the supply,
which resulted in changes from balances at the
beginning of the year to overdrafts on April 1.
The balances with Denmark and Switzerland, at the beginning of the year were increased as the purchases of exchange exceeded
the sales. On January 1 there was a net overdraft with Holland which changed to a net
balance on April 1, which was the largest held
in any neutral European country.

SEPTEMBER 1,1918.

The net balance in Norway on January 1
was about 25 per cent of the sales made during
the three months following. This balance
was cleared and a small overdraft shown at the
close of the period. Norwegian exchange
dropped steadily, with the result that the
balance had been taken over at a higher rate
than it was sold. The average rates for the
items shown indicate that all the profit was
earned through finance bills.
Swedish exchange rendered a profit both on
finance and commercial bills. The commercial
bills furnished a very good profit. The balance
on January 1 and the overdraft on April 1
were both figured at a higher average rate than
the bills were sold. The calculated annual rate
on total purchases was 0.055 per cent for gross
profits and 0.046 per cent for net profits. There
was a one-fourth point drop in Swedish kronor
for the period.
Earnings on Danish exchange were very
small, amounting to 0.02 per cent for gross
profits and 0.007 per cent for net profits. The
fact that the balance was figured at a higher
rate than the bills were purchased accounts
for about one-fourth of the profit shown. The
close of March saw this exchange down onefourth point from January 1.
Guilders advanced 2f points from the beginning to close of the period. The rate at
which the balance was figured accounts for
about one-fifth of the gross earnings. Both
finance and commercial bills show profits.
Calculated annual rates of earnings on total
purchases show gross profits 0.063 per cent
and net profits 0.041 per cent.
From a net balance of $775,000 at the beginning of the year, peseta accounts fell to an overdraft of $603,000 on April 1. Pesetas advanced
l i points during the period. The returns
indicate that there was a loss on finance
bills while commercial bills furnished a good
profit.
Swiss francs strengthened slightly during
the three months. The gross profits shown
were due chiefly to the earnings on commercial
bills. These earnings were slightly increased

SEPTEMBER 1,1918.

885

FEDEEAL RESERVE BULLETIN".

by the profit derived from the rate at which calculated on an annual basis show a gross
the balance was figured and they were reduced profit of 0.008 per cent and net losses of 0.002
through the loss on finance bills. Earnings per cent.
Profits or losses, first quarter, 1918—Exchange purchased and sold—European neutral countries.
NORWAY.
Purchases.

Classification.
Foreign
currency.

Dollars.

Sales.

Foreign
currency.

Deductions.

Dollars.

Gross
profit
or loss.

Discount,
long
bills, Overhead
interest, charges.
commission, etc.

Profit
after
deductions.

Taxes.

Net profit
or loss.

Portion of 1917 balance
used
5,413,795.96 1,786,552.66
164,012.14 i 21,123.98
Financial bills.
15,208,720.87 4,813,682.12 20,727,009.61 6,796,894.38
478,450.15
155,791.05
416,640.72
132,895.74
Commercial bills
Unsold balance purchased during period.. 1 975,456.52 1312,146.08
868,761.03 278,002.68
Total

22,076,423.50 7,068,171.91 22,076,423.50 7,228,916.78 $160,744.87 $1,294.55 $10,966.59 $148,483.73

$374.96 $148,108.77

SWEDEN.
Portion of 1917 balance
used
1,904,788.16 652,389.94 1976,097.45 1334,313.37.
Financial bills
18,519,625.88 6,128,199.08 20,706,163.67 6,943,765.18;.
Commercial bills
226,106.39
766,625.41 292,026.44.
75,537.50
Unsold balance purchased during period.. 11,989,423.82 1676,404.09
191,057.72
64,959.60|.
Total.

22,639,944.25 7,532,530.61 22,639,944.25 7,635,064.59j$102,533.98 §4,206.70

§8,949.

1,377.42; 82,847.52 $86,529.90

DENMARK.
Portion of 1917 balance
used
Financial bills.
Commercial bills
Unsold balance purchased during period..
Total

80,924.46
254,953.81
6,849,614.84 2,111,665.86
174,914.98
52,491.40

1201,814.97 164,076.25
6,016,656.42 1,859,108.21
280,668.88
87,953.71

i 398,860.44 U25,641.04

1,179,203.80

7,678,344.07 2,370,722.76

7,678,344.07 2,382,590.721 Sll,867.96

371,452.55
$871.20

§5,637.56 $5,359.20 $1,155.08

$4,204.12

HOLLAND.
Portion of 1917 balance
240,925.66
106,168.05 i 245,185.83 1108,188.25!
used
20,888,974.14 9,267,826.02 15,911,411.92 7,128,374.94;
Financial bills
2,149,410.60
Commercial bills
939,444.07 3,462,123.28 1,531,144.43
Unsold balance purchased during period.. 1762,430.42 1355,835.20 4,423.019.79 2,067,761.71
Total.

24,041,740.82 10,669,273.34 24,041,740.8210,835,469.33:$166,195.99 $6,821.78 $31,414.49:$127,959.72,$17J 649.59 $110,310.13
SPAIN.

Portion of 1917 balance
used
4,767,166.25 1,167,
11,603,452.63 1392,845.86
Financial bills
65,625,903.1416,082,751.59 69,417,962.86 16,892,210.96
Commercial bills/.
I 3,245,647.391 796,346.79 4,960,857.34 1,349,800.32
Unsold balance purchased during period.. 12,845,294.701 1732,663.36
501,738.65
129,183.46
Total.

76,484,011.4818,779,654.23 76,484,011.4818,764,040.60 2 $15,613.63 $7,040. Olj $24,880.65j2$47,534.29 $4,044.51 2 $51,578.80
SWITZERLAND.

Portion of 1917 balance
used
2,039,995.82
469,851.65
1 50,755.26 111,639.36
Financial bills
5,794,390.79
71,102,421.0515,997,471.10 70,216,187.6015,
Commercial bills
8,824,015.52 1,941,879.85 9,298,511.85 2,081,461.20
Unsold balance purchased during period.. 11,959,478.96 1455,677.25 4,360,456.64 1,015,059.42
Total.

83,925,911.3518,864,879.85 83,925,911.35 18,903,550.77 $38,670.92 $6,615.93] 332,243.50 2 «188.51 $10,073.08^ $10,261.59
1 Overdraft.

«Loss.

836

SEPTEMBER 1, 1918.

FEDERAL RESERVE BULLETIN.

Average rates derived from figures given in profit or loss tables.
Norway.

Portion of 1917 balance used
Financial bills
Unsold balance purchased during period
Total

Sweden.

Denmark.

Spain.

Holland.

Purchases.

Sales.

Purchases.

Sales.

Purchases.

Sales.

Purchases.

Sales.

Purchases.

Sales.

Purchases.

33.00
31.65
32.56

33.00
32.79
31.71

34.25
33.09
33.41

34.25
33.53
38.09

31.74
30.82
30.01

31.75
30.90
31.34

44.06
44.37
43.71

44.125
44.80
44.23

24.50
24.5067
24.536

24.50
24.334
27.209

4.34
4.44
4.54

4.36
4.45
4.47

32.00

34.00

31.50

46.67

46.75

25.75

4.30

32.02

32.74

33.27

33.72

30.87

31.03

44.38

45.07

24.55

24.53

4.45

4.44

York during the three months

ending

Monthly ranges of exchange rates on leading foreign money centers, quoted in New
March, 1918.
January.

February.

Exchange
at par.
Low.
Norway
Sweden
Denmark
Holland
Spain
Switzerland

26.80
dolls, for 100 krones.
26.80
do...
do...
dolls, for 100 florins. 40.20
dolls, for 100 pesos. 518.1347
francs for 100 dolls. 518.1347

FOREIGN EXCHANGE RATES.
In the tables below and accompanying diagrams an attempt has been made to present in
a uniform manner the changes in exchange
rates since the outbreak of the war. The material used for the tabulation and the diagrams
is made up chiefly of quotations published in
previous issues of the FEDERAL RESERVE BULLETIN. These data have been arranged under
three main heads:
(1) Exchange rates on markets in belligerent
countries, both of the allied group and of the
central powers. Quotations for the first group
include rates on London, Paris, Milan, Yokohama, Rio de Janeiro, and Petrograd. For the
latter group rates are given on Berlin and
Vienna. The latter rates are two fold:
(a) New York quotations for the period July,
1914, to April, 1917, the date of the entrance
of the United States into the war,
(b) Swiss quotations on Berlin and Vienna
for the entire period June, 1914, to June, 1918.
I t will be noticed that both American and
Swiss quotations show that the rates on Vienna
move in close sympathy with the rates on
Berlin.

Switzerland.

High,

31.50
30.25
43
24
450

34.25
31.75
44.25
24.40
435

Low.
30.75
32.25
30.50
44
24
451.50

High.
32.50
33.50
31
45.50
25.25
446

Sales.

March.
Low.
30.125
31.75
30
44.75
24.30
448

High,
32.25
34

•$

31.75 2
46.75
431.50

(2) Rates on markets in neutral countries in
Europe and South America. Quotations are
given on Amsterdam, Copenhagen, Stockholm,
Zurich, Madrid, Buenos Aires, and in Chilean
markets on New York. I t will be noted that
rates on the two Scandinavian centers in general move in sympathy, the higher level of the
Swedish rate having become more pronounced
since August, 1916. In the case of the rates
on Buenos Aires, the par value of the paper
peso was taken at the officially fixed rate of 44
per cent of the gold peso (96.5 cents gold), or
42.46 cents. In the case of the rates on New
York in Chilean markets, the average value of
the paper peso during the first six months of
1914 was taken as a base from which to measure subsequent variation.
(3) Rates on markets in silver standard
countries. The markets chosen were Bombay,
in India, Shanghai, the principal neutral financial and commercial market in the Far East,
and Hongkong, the most important transshipping point in that part of the world and
under the political and financial control of the
British Government. It will be noted that,
while the quotations of the latter two markets
move more or less in sympathy with the price

837

FEDERAL RESERVE BULLETIN".

SEPTEMBER 1,1918.

of silver, in the case of India adherence to the
gold exchange standard has resulted in comparative stability of the rate throughout the
entire period, a rise having occurred only since
August, 1917. In consequence of the recent
arrangement for credits with which to supply
rupee exchange, rates for telegraphic transfers
have been fixed to move in consonance with
London rates. The minimum rate, which had
previously been 33.50, was fixed on April 11 at
35.75, while on June 18 the rate was stabilized
at 35.73.
The rates used for the compilation and diagrams represent the high rates quoted during
each month, all expressed in percentages of the
American equivalents of the par or mint values
of the respective monetary units, with the exception of the Swiss rates on Berlin and
Vienna, which represent quotations at the close
of the month expressed in percentages of the
par values of the Swiss equivalent of these
monetary units, and of the Chilean rates on
New York, which represent average monthly
rates for the Chilean paper peso in terms of
sterling, converted into dollars at the prevailing
dollar rate for sterling. This method of presen-

tation necessitated the reconversion of quotations of rates on Paris, Zurich, and Milan, and
of the Chilean rates on New York, and their
restatement in terms of United States money.
It is easily seen that this is the only mode of
presentation which permits of any fair comparisons of the upward or downward course of
exchanges on the various markets. Some difficulty was experienced in choosing a basic quotation for the silver-standard countries. The
basic figure chosen was the average price of
silver in London for the calendar year 1913
(60.458 cents per ounce, British standard, 0.925
fine). The par for sterling, namely $4.8665,
has been employed in these calculations. On
this basis the average 1913 values of the Hongkong dollar and the Shanghai tael were figured
and these values, 47.16 and 65.49 cents, respectively, were used as the basis for calculating the percentages shown in the tabulation
and plotted in the diagram. To complete the
analysis of the course of Far Eastern exchange
since the outbreak of the war, there have been
added figures and curve indicating the course
of the silver price in London for the period
under review.

Movement of exchange rates (highest rates for sight drafts during month) in New York on principal financial centers during
' period from June, 1914, to July, 1918.
1. RATES ON MARKETS IN B E L L I G E R E N T COUNTRIES.
London
;
Paris
(4.8565-100). j (19.3-100).
1914.
June
July
August
September
October
November
December

$4,891
5.50
5.56
5.0625
4.98
4.90875
4.8925

1915.
January
February
March
April
May
June
July
August
September
October
November
December

4.85375
4.8493
4.8125
4.80
4.80
4.7856
4.77125
4.7625
4.73
4.725
4.71375
4.7 12?

99.65 ! 19.30
98.89 I 19.01
98.63 i 18.81
98.63 18.81
98.34 18.40
98.04 18.07
97.86 17.71
97.20 17.35
97.09 17.35
96.86 17.18
97.43 17.21

1916.
January.
February.,
March
April
May
June

4.78
4.76t25
4.765
4.765
4.7625
4.75875

98.22
97.94
97.91
97.91
97.86
97.79

78653—IS

Per et.\
100.50 JS19.42
113.02 ! 21.74
114.25 19.61
104.03 19.80
102.33 19.80
100.87 19.63
100.53 19.57

-3

Milan
(19.3=100).

\Per ct.
1 an
an IS19.37
100.62
112.64 20.41
101.61 20.41
102.59 19.05
102.59 19.34
101.71 18.80
101.40 19.12

Yokohama Rio de Janeiro
(49.85=100). (32.444=100).

iPer ct.
J100.36 JS49.90
jlOo.75 49.90
J105.75
j 98.70
100.21
I 97.41
| 99.07

Per ct.
100.10
100.10

Per ct.

88.86
! 88.50
I 88.19
! 87.36
| 87.56
87.82

15.27
14.95
15.38
15.85
16.13
15.75

79.12 50.50
77.48 50.38
79.69 50.25
82.12 50.25
83.58 50.38
81.61 50.50

Berlin
(95.2=100).

Per ct,
S51.56 100.12 S95.44
51.56 100.12 96.25
51.12 99.26 97.00
97.00
48.00 93.20 94.25
48.00 93.20 88.62
43.00 83.50 92.50

$23.70
23.81
23.75
23.62

73.06
73.40
73.21
72.81

43.50 84.47
44.87 87.13
44.50 86.41
44.50 86.41
41.75 81.07
39.75 77.18
38.00 73.79
37.00 71.84
35.75 89.42
35.50 68.93
33.75 65.53
32.75 63.59

101.30 23.50
101.06 23.25
100.80 23.62
100.80 23.00
101.06 24.50
101.30 24.50

72.44
71.67
72.81
70.90
75.52
75.52

30.00
32.37
32.50
32.00
31.62
33 .80

18.78 97.31
100.00 18.52 95.96
98.50 17.70 91.71
97.46 17.33 89.79 49.38 99.06
97.46 17.38 90.05 49.38 99.06
99.10
95.34 16.93 87.72 49.40
93.63 16.50 85.49 49.38 99.06
91.76 16.05 83.16 49.38 S9.06
89.90 16.18 83.83 49.25 98.80
89.90 16.08 83.32 49.50 99.30
89.92 15.55 80.57 50.00 100.30
89.17 15.35 79.53 50.50 101.30

99.74 ! 19.35 100.26

17.15
17.08
17.02
16.86
16.90
16.95

Petrograd
(51.5=100).

58.25
62.85
63.11
62.14
61.40
9.81 j

Vienna
(20.3=100).

Per ct.
Per ct.
100.25 S20.32 100.10
101.10 20.37 100.34
101.89 20.37 100.34
101.89
99.00 19.87
97.88
93.09 17.87
88.03
97.16 18.00
88.67

88.37
87.31
84.25
82.87
83.25
82.87
82.25
82.50
84.25
84.25
81.87
79.75

92.83 17.50
91.71 17.35
88.50 15-87
87.05 15.55
87.45 15.70
87.05 15.18
86.40 15.18
86.66 15.20
88.50 15.55
88.50 15.55
86.00 14.70
83.77 14.10

86.21
85.47
78.18
76.60
77.34
74.78
74.78
74.88
76.60
76.60
72.41
69.46

76.75 80.62 12.92
77.50 81.41 15.00
73.37 77.07 13.00
76.50 80.36 13.62
78.12 82.06 13.50
77.12 81.01 13.25

63.65
73.89
64.04
67.09
66.50
65.27

838

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1918.

Movement of exchange rates {highest rates for sight drafts during month) in New York on principal financial centers during
period from June, 1914, to July, 1918—Continued.
1. RATES ON MARKETS IN BELLIGERENT COUNTRIES—Continued.
London
(4.8665=100).
1916.
July
August
September....
October
November
December

$4.75875
4.75875
4.7675
4.7569
4.7175
4-7569

1917.
January
February
March
April
May
June
July
August
September
October
November
December

4.7585
4.7580
4.7555
4.7585
4.7556
4.7555
4.7565
4.7555
4.7555
4.7530
4.7520
4.7525

97.78
97.77
97.72
97.78
97.72
97.72
97.74
97.72
97.72
97.67
97.65
97.66

1918.
January
February
March
April
May
June
July

4.7535
4.7535
4.7535
4.7550
4.7550
4.7550
4.7535

97.68
97.68
97.68
97.71
97.71
97.71
97.68

Paris
(19.3=100).

Milan
(19.3=100).

Per ct.
Per ct.
97.79 $16.93 87.72
97.79 16,98 87.98
97.97 17.13 88.76
97.75 17.13 88.76
96.94 17.12 88.70
97.75 17.14 88.81

S15.68
15.47
15.56
15.47
15.04
15,02

17.12
17.11
17.12
17.61
17.52
17.47
17.45
17.35
17.33
17.51
17.44
17.45

88.70
88.65
88.70
91.24
90.78
90.52
90.41
89.90
89.79
90.73
90.36
90.41

14.52
14.12
13.11
14.51
14.28
14.21
13.93
13.82
13.29
12.95
12.59
12.52

17.53
17.51
17.47
17.49
17.53
17.50
17.50

90.83
90.73
90.52
90.62
90.83
90.67
90.67

12.03
11.76
11.98
11.38
11.15
11.29
12.48

Yokohama Rio de Janeiro
(49.85=100). (82.444=100).

Per ct,
Per ct.
81.24 850.50 101.30
80.16 50.63 101.56
80.62 50.63 101.56
80.16 51.00 102.31
77.93 51.00 102.31
77.82 50.88 102.07

$24.76
24.65
24.29
24.10
23.96
23.63

75.23
73.16
67.93
75.18
73.99
73.63
72.18
71.61
68.86
67.10
65.23
64.87

50.88
51.00
51.00
51.13
51.13
51.25
51.25
51.00
51.38
52.00
52.13
51.80

102.07
102.31
102.31
102.58
102.58
102.81
102.81
102.31
103.06
104.31
104.57
103.91

23.57
23.46
23.18
24.35
26.75
26.90
26.82
25.64
25.22
25.64
26.25
26.90

62.33
60.93
62.07
58.96
57.77
58.50
64.66

51.88
51.65
51.75
51.90
52.75
52.90
53.75

103.91 27.14
103.61 26.67
103.81 26.42
104.11 25.84
105.82 25.64
106.12 25.64
107.82 24.94

Petrograd
(51.5=100).

Berlin
(95.2=100).

Vienna
(20.3=100).

Per ct.
Per ct.
Per ct.
Perct.
76.33 $30.80 59.81 $74.50 78.26 $12.80 63.05
75.99 34.00 66.02 72.37 76.02 12.50 61.58
74.88 33.75 65.53 70.94 74..52 12.15 59.85
74.29 31.75 61.65 70.56 74.12 12.00 59.11
73.86 30.75 59.71 70.19 73.73 11.88 58.52
66.01
72.84 30.75 55.71 75.25 79.04 13.40
72.66 29.90 58.06 71.44
72.32 29.10 56.50 70.87
71.45 28.60 55.53 71.50
75.05 28.85 56.06
82.45 28.10 54.60
82.91 26.10 50.72
82.67 23.90 46.44
79.03 21.65 42.07 |
77.73 18.00 34.98
79.03 15.75 30.61
80.91 13.50 26.23
82.91 13.50 26.23
83.65 13.13
82.20 13.75
81.43 13.50
79.64 14.50
79.03 U5.25
79.03 115.25
76.87 115.00

75.04
74.44
75.11

11.79
11.10
11.50

58.08
54.68
56.65

25.51
26.72
26.23
28.18
29.63
29.63
29.15

i Cable rates.

Movement of exchange rates (sight drafts) in Switzerland on Berlin and Vienna during periodfrom June, 1914} to June, 1918.
[At Basle, average of offer and demand rates at close of month.]
Berlin
(123.457=100).

June
July
Ausfust
September
October
November
December
January
February..
March..
April
May . .
June
July . . .
August
September
October
November
December.

1914.

1915.

1916.

February
March..
April
Mav . .
June.
July
August..
September
October
November...
December

Berlin
(123.457=100).

Vienna
(105.01=100).

$122.87
122 67
121 00
116 00
115 12
111 25
114.50

Per cent.
99.52
99 36
98 01
93 96
93 25
90 11
92.74

$104 28
103 92
92 00
91 00
92 50
89 00
91.00

Per cent
99.30
98 96
87 61
86 66
88.09
84 75
86.66

115.22
111.62
110.22
108.80
108.25
109 40
109.00
108 75
109.55
109 00
105 85
98.75

93 33
90.41
89.28
88.13
87.68
88 61
88.29
88 09
88.74
88 29
85.74
79.99

90 00
84.00
82.00
81.50
80.25
81.00
80.50
80 35
78.75
77 40
74.37
67.00

85.71
79.99
78.09
77.61
76.42
77.14
76.66
76 52
74.99
73.71
70.82
63.80

95.37
94.65
92.80
95.95
97.00
95.65
94.57
92.50
92.40
90.90
84.60
84.62

77.25
76.67
75.17
77.72
78.57
77.48
76.60
74.92
74.84
73.63
68.53
68.54

63.85
65.00
64.10
66.35
67.60
66.50
65.65
63.75
62.90
59.35
52.75
53.37

60.80
61.90
61.04
63.18
64.37
63.33
62.52
60.71
59.90
56.52
50.23
50.82

January
February
March...
April.
May
June.
July
August
September
October
November
December

1917.

Vienna
(105.01=100).

$84.60
82.25
79.25
79 25
75.10
68.50
63.50
63.75
64.80
63.00
65.00
85.75

Per cent.
68.53
66.62
64.19
64 19
60.83
55.48
51.43
51.64
52,49
51.03
52.65
69.46

$54.40
51.25
50.10
49 60
48.40
43.50
40.75
40.80
41.50
39.75
40.25
52.50

Per cent.
51.80
48.80
47,71
47 23
46.09
41.42
38.81
38.85
39.52
37.85
38.33
50.00

82.75
86.75
85 10
82.10
79.10
69.00

67.03
70.27
68.93
66.50
64.07
55.89

52.50
57.50
55 25
52.60
48.75
40.00

50.00
54.76
52 61
50.09
46.42
38.09

1918.

January
February
March

April
Mav . .
June

839

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1918.

Movement of exchange rates (highest rates for sight drafts during month) in New York on principal financial centers during
period from June, 1914, to July, 1918.
2. R A T E S ON M A R K E T S IN N E U T R A L COUNTRIES.
Amsterdam
(40.2=100).
1914.
June
July
August
September
October
November . . .
December

§40.31
41 25
42.00
41.75
42 50
40.87
10.62

1915.
February
March
April
MayJune
JulySeptember
October
November
December
January
February
March
April
May

1916.
....

July
September
October
November
December
January

1917.
...

March
April
May
June
July

March
April
May
July

...

.. .

October
November
December
January

. ..
1918.

Copenhagen
(26.8=100).

Stockholm
(26.8=100).

Per ct.
Per ct.
100.27 $26.90 100.37
102 61 27 50 102 61
104.48 27.50 102.61
103.86
105 72
101 67 25.87 96.53
101.04 25.25 94.22

Per ct.

Zurich
(19.3=100).

S19.42
21.51
"20*66"

19.88
19.42
19 29

93.28 $25.15
92.57 24.95
95 15 25 65
96.08 25.80
96 83 26 00
98 58 26 47
98 32 26.40
25 95
96 64
96.83 26.00
97.76 26.25
104.66 28.10
104.48 28.05

100.62
111.45

iO3."63"
103.01
100.62
99.95

" !
75.90
14.27
78.24
14.71
80.85
15.20
16.67
88.67
83.14
15.63
83.24
15.65
82.87
15.58
84.41
15.87
17.64
93.83
18.80 100.00
17.54
93.30
17.57
93.46

97.88
98.94
98.35
98.94

19.49 100.98
19.31 100.05
19.19 99.43
19.34 100.21
19.31 100.05
19.12 99.07
18.94 98.13
18.89 97.88
18.89 97.88
98.65
19.04
19.34 100.21
20.28 105.08

19.12 99.07
19.25 99.74
19.37 100.36
19.65 101.81
19.95 103.37
20.70 107.25
20.30 105.18
20.20 104.66
20.16 104.46
20.30 105.18
20.55 106.48
21.25 110.10

42.12
44.45
42.62
42.62
42.32
42.25
42.25
41.69
42.39
43.15
43.40
44.89

99.22
104.71
100.40
100.40
99.69
99.53
99.53
98.21
99.86
101.65
102.24
105.75

16.84
16.84
16.31
17.06
17.06
17.83
18.45
18.45
20.79
20.79
21.65
22.78

89.57
89.57
86.76
90.74
90.74
94.84
98.14
98.14
110.59
110.59
115.16
121.17

103.63
103.63
103.32
102.80
102.69
107.25
114.61
116.29
115.13
117.77
119.38
121.35

21.25 110.10
21.35 110.62
21.75 112.69
21.90 113.47
22.75 117.88
23.65 122.54
23.30 120.73
22.85 118.39
24.10 124.87
23.65 122.54
23.70 122.80
24.40 126.42

44.34 104.45
44.46 104.73
44.03 103.72
42.89 101.04
44.26 104.26
44.26 104.26
43.97 103.58
43.25 101.88
43.23 101.84
44.21 104.15
47.01 110.74
47.65 112.25

22.68
21.60
20.85
21.45
23.17
23.85
24.69
25.66
28.75
28.12
27.99
28.23

120.64
114.89
110.90
114.10
123.24
126.86
131.33
136.49
152.93
149.57
148.88
150.16

24.40
25.25
25.63
29.75
28.40
28.55
27.55

45.98 108.32
44.04 103.75
44.44 104.69
43.85 103.30
43.91 103.44
43.38 102.19
44.83 105.61

25.95
26.95
29.35
30.68
32.69
33.51
32.99

138.03
143.35
156.12
163.19
173.88
178.24
175.48

114 10
106 02
106.34
107 59
104 15
103.86
103.08
103.08
102 29
102.46
101.99
101.67

27 90 101.10
28.25 105.41
29.00 108.21
30.20 112.69
30.80 114.93
30.10 112.31
29.10 108.58
28.70 107.09
27 75 103 54
27.40 102.24
27.15 101.31
27.80 103.73

28.13 104.96
28.75 107.28
29.00 108.21
30.50 113.81
31.25 116.60
30.40 113.43
29.15 108.77
28.80 107.46
28.70 107.09
28.50 106.34
28.45 106.16
29.45 109.89

40.81 101.52
40.75 101.37
40.50 100.75
41.75 103.86
41.25 102.61
41 19 102.46
41.47 103.16
42.38 105.42
42.13 104.80
45.75 113.80
45.25 112 56
44.50 110.70

27.70 103.36
27.55 102.80
29.60 110.45
28.90 107.84
28.70 107.09
29.25 109.14
29.50 110.07
30.40 113.43
31.15 116.23
35.75 133.40
38.75 144.59
33.75 125.93

29.65
29.60
30.00
30.30
30.00
30.30
33.10
33.85
34.40
42.00
45.50
37.25

110.63
110.45
111.94
113.06
111.94
113.06
123.51
126.31
128.36
156.72
169.78
138.99

20.00
20.00
19.94
19.84
19.82
20.70
22.12
22.83
22.22
22.73
23.04
23.42

31.75
31.00
31.75
31.75
31.50
31.25
31.30

34.25
33.50
34.00
34.50
34.75
35.60
35.80

127.80
125.00
126.87
128.73
129.66
132.84
133.58

22.99 119.12
22.42 116.17
23.17 120.05
23.53 121.92
26.11 135.28
25.38 131.50
25.38 131.50

118 47
115.67
118.47
118.47
117.54
116.60
116.79

Per ct.
819.19 102.07
19.12
101.70
88.67
16.67
15.20 ! 80.85
14.71 1 78.24
75.90
14.27
73.78
13.87

S41.55
42.00
41.75
42.00

45 87
42.62
42.75
43 25
41.87
41.75
41.44
41.44
41 12
41.19
41.00
40.87

110.07
113.43
116.29
120.02
125.62
126.87
129.35

Valparaiso
(18.80=100).

99.17 $19.24 99.69
97.88 19.49 100.98
19.78 102.49
96 84
97.36 20.05 103.89
97 88 19 80 102.59
98.50 19.08 98.86
19.23 99.64
96.84
97.56 19.36 100.31
98.70 19.00 98.45
98.50
19.05 98.70
97.56 19.03 98.60
98.86 18.90 97.93

25 00
24.81
25 50
25 75
25 95
26 42
26 35
25 90
25.95
26 ?0
28.05
28.00

44 25
45.50
46.75
48.25
50.50
51.00
52.00

Per ct.

Per ct. I

40.50 100 75
40.31 100.27
40 00 99 50
39 50 98 26
39 56 98 41
39 94 99 35
40 06 99 65
40 31 100 27
40.37 100.42
41 50 103 23
42.00 104 48
43.50 108.21

93.84
93.10
95.71
96.27
97 01
98 77
98.51
98 63
97.01
97.95
104.85
104.66

Buenos Aires
(42.45=100).

Madrid
(19.3=100).

19.14
18.89
18 69
18 79
18 89
19 01
18.69
18 83
19.05
19.01
18.83
19.08

126.42
130.83
132.80
154.15
147.15
147.93
142.75

840

FEDERAL BESEKVE BULLETIN.

SEPTEMBER 1,1918.

Movement of exchange rates (highest rates for sight drafts during month) in New Yorlz on principal financial centers during
period from June, 1914, to July, 1918—Continued.
3. HATES ON MARKETS IN SILVER COUNTRIES.

Bombay

(32.44-100).

1914.

June
July
August
SeptemberOctober
November..
December..

5533.00

33.00

Per cent.
101.73
101.73

Hongkong
(47.16=100).

Per cent.
99.45
98.49
101.46

$46.90
46.45
47.85

Shanghai
(65.49=100).

$61.00
64.00
64.75

Average
London
price of
silver.
(£=
4.8665).

Average
price for
1913—
.60458
cent=»
100.

Per cent.
Per cent.
97.72 $0.56879
94.08
97.72
91.30
.55201
98.87
87.93
.53159
83.62
.50555
82.09
.49630
82.94
.50145

1915.

January
February...
March
April
May
June
July
August
September..
October
November..
December..

•I-

.49678
.50007
.51822
.51925
.51706
.50135
.49556
.49973
.51761
.52441
.54986
.57812

82.17
82.71
85.72
85.89
85.52
84.41
81.97
82.66
85.61
86.74
90.95
95.62

33.50
33.50
33.50
33.00
33.00
33.00
33.00
33.00
33.00

103.27
103.27
103.27
101.73
101.73
101.73
101.73
101.73
101.73

44.70
44.60
44.30
43.00
42.70
43.75
43.75
48.25
47.35

94.78
94.57
93.94
91.18
90.54
92.77
92.77
102.31
100.40

57.00
57.00
56.50
56.00
56.00
56.00
55.75
63.00
63.00

87.04
87.04
86.27
85.51
85.51
85.51
85.13
98.20
96.20

33.00
33.00
33.00
33.00
33.00
33.00
33.00
33.00
32.63
32.75
32.38
32.50

101.73
101.73
101.73
101.73
101.73
101.73
101.73
101.73
100.59
100.96
99.82
100.18

47.60
46.80
49.50
56.50
56.25
51.00
50.00
51.75
52.75
53.45
56.00
58.00

100.93
99.24
104.96
119.80
119.27
108.14
106.02
109.73
111.85
113.34
118.74
122.99

63.87
63.75
67.50
76.00
80.12
72.00
72.12
73.50
75.50
76.50
87.50
89.00

97.53
97.34
103.07
116.05
122.34
109.94
110.12
112.23
115.28
116.81
133.61
135.90

.59099
.59133
.60496
.67215
.65632
.69040
.71469
. 70942
.74852
.79815

97.75
97.81
100.06
111.18
129.00
112.62
108.56
114.19
118.21
117.34
123.81
132.02

34.00
32.50
32.50
32.50
32.50
32.50
32.50
33.75
40.00 !
40.00
35.00 I
35.00

104.81
100.18
100.18
100.18
100.18
100.18
100.18
104.04
123.30
123.30
107.89
107.89

58.00
58.00
56.50
57.60
58.00
60.50
64.75 i
76.25
80.00
80.00
74.50

122.99
122.99
119.80
122.14
122.99
128.29
137.30
161.68
173.88
169.64
169.64
157.97

89.00
89.50
86.50
86.50
86.50
92.38
95.88
117.00
120.00
106.00
105.00
110.00

135.90
136.66
132.08
132.08
132.08
141.06
146.40
178.65
183.23
161.86
160.33
167.96

.80412
.82721
.79844
. S1102
.83163
.85712
.87913
.94409
1.11965
.97170
.95557
.94329

133.00
136.82
132.07
134.15
137.56
141.77
145.41
156.16
185.19
160.72
158.06
156.02

107.89
110.20
110.97
114.83
121.76
118.68
110.14

75.00
73.00
77.00
77.00
76.50
79.00
80.50

159.03
154.79
163.27
163.27
162.21
167.51
170.70

114.00
108.00
111.00
109.00
109.50
113.50
116.50

174.07
164.91
169.49
166.44
167.20
173.31
177.89

.97222
.93825
.95795
1.03501
1.07403
1.07140
1.07003

160.81
155.19
158.45
171.19
177.65
177.21
176.99

1916.

January
February...
March
April
May
June
July
August
September..
October
November..
December..
1917.

January
February...
March
April
May
June
July
August
September..
October
November..
December..
January...
February..
March
April
May
June
July

82.00 I

1918.

35.00
35.75
36.00
137.25
39.50
38.50
2 35.73
1
2

Minimum rate for telegraphic transfers fixed Apr. 11 at 35.75; previously 33.5.
Rate for telegraphic transfers fixed June 18 at 35.73.

EXCHANGE RATES IN NEW YORK ON BELLIGERENT
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SEPTEMBER 1,1918.

845

FEDERAL RESERVE BULLETIN.

Holdings by the Banks of Treasury Certificates.1
The twenty-three issues of Treasury certificates of indebtedness, emitted in anticipaon of the proceeds of Liberty loans and income and excess taxes, from March 31,1917, to
May 15, 1918, have been taken and held in the
main b\T the financial institutions of the
country—national banks, State banks, and
trust companies. The Federal Reserve Banks,
with "whom was placed the entire ante-bellum
issue of March 31, 1917, subsequently withdrew from the role of direct investors and confined themselves to the functions of distribution and remittance, with only such temporary
investment service as was made necessary by
administrative convenience, by the insufficiency of the banks' subscriptions, and by the
desirability of aiding wider distribution of
certificates among the banks.
Of the certificates acquired by the banks,
much the largest quota has been for their own
account, only a minor part being apparently
taken in behalf of customers. This applies to
the loan anticipation certificates; with respect
to the tax anticipation issues the conditions
have probably been somewhat different. No
precise tabulations are available as to the several amounts of the certificates taken and held
by the banks as compared with those taken
and held by investors. It is possible, however,
to form some opinion as to this from the condition of the national banks on the several "call"
dates; from the condition of "member banks
in leading cities" reported weekly after December 7, 1917, to the Federal Reserve Board;
and from the condition of member banks other
than national banks on December 31, 1917,
reported to the Federal Reserve Board.
I. (1) As to the certificates held by the
national banks:
The computation is' affected not only by
infrequency of available data, but by the fact
that three (June 20, 1917, Nov. 20, 1917, and
May 10, 1918) of the "call" dates fall in the
midst of Liberty loan flotations. Taking the
remaining three "calls" (Sept. 11, 1917, Dec.

31, 1917, and Mar. 4, 1918) not complicated
in this manner, and assuming that the amount
of ante-bellum bonds held by the national
banks has not changed since March 5, 1917—
$714, 523,000—the certificates held by the
national banks at the several dates, and the
ratios of such holdings to the total nominal
volume of certificates then outstanding would
be approximately, as follows:
Call oi—

Sept. 11,1917.
Dec. 31,1917.
Mar. 4,1918..

Certificates
held by
national
banks.

Nominal
amount of
certificates
outstanding.

§226,559,000
300;380,000
930,595,000

3550,000.000
691,872^ 000
2,657,792,000

Per cent.

41.2
43.4
35

(2) As to the certificates held by banks other
than national banks:
On June 20, 1917 the total resources of
17,576 "reporting" 2 State banks, loan and
trust companies were $14,699,487,556. It such
resources increased from June 20 to December
31, 1917, in the same proportion as did the total
resources ot the national banks (from $16,151040,000 to $18,073,308,000, or 11.9 per cent),
the total resources of the reporting State banks
etc., on December 31, 1917, would have been
$16,448,726,575.
The total resources of the 250 Federal Reserve member State banks and trust companies
on December 31, 1917, were $5,013,885,000.
The total resources of the 17,326 nonmember
State banks, etc., would therefore be $11,434,641,575, or 228 per cent of the total resources
of the member State banks, etc.
On December 31, 1917, the 250 member
State banks, etc., owned $234,592,000 United
States securities. Assuming, somewiiat perilously, that the nonmember State banks, etc.,
held United States securities as compared with
the holdings of member State banks, etc., in
the ratio which the "total resources" of the
two groups bear to one another, viz, 228 per
cent, we should expect nonmember State

2 It is probable that there are included in the comptroller's reporting
State banks, trust and loan companies certain financial institutions
i Contributed by Prof. Jacob H. Hollander, of the Johns Hopkins not of a kind likely to purchase certificates. As against this, there are
certainly nonreporting banks that purchase certificates.
University, Baltimore, Md.

7865a—18—7

846

FEDERAL RESERVE BULLETIN.

banks, etc., to hold $534,869,760 United
States securities. Accordingly, both member
and nonmember State banks, etc., would hold
$769,461,760.
This $769,461,760 would be composed of:
(a) Ante bellum United States bonds; (h)
Liberty bonds and paid subscriptions thereto;
(c) certificates of indebtedness.
As to (a), on June 20, 1917, 20,319 reporting
banks, other than national, held $77,161,898
United States securities. Assuming, arbitrarily, that one-half of this amount consisted of
ante bellum issues held by reporting State
banks, loan and trust companies, and that
such holdings did not thereafter increase, there
would remain $730,880,811 of (6) Liberty
bonds and (c) certificates of indebtedness held
by reporting State banks, etc.
Assuming that the Liberty bonds and certificates of indebtedness held by the State
banks, etc., were distributed in the same proportions as were the corresponding holdings of
the national banks on the same date (Dec. 31,
1917) we have the following:
National.
Liberty bonds
Certificates of indebtedness
Total

. .

State, etc.

$609,626,000
300,380,000

5489,690,143
241,190,668

910,006,000

730,880,811

The total (nominal) amount of certificates
outstanding on December 31, 1917, was $691,872,000. Of this the holdings of the State
banks, etc. ($248,939,000 as above), formed
thus 34.9 per cent.
Finally the Federal Reserve Banks held on
December 28, 1917, $58,883,000 United States
Government short-term securities, which we
may assume to have been entirely certificates
of indebetdness.
Summary.
Amount.
Certificates outstanding Dec. 31,1917
Held by national banks
Held by State banks, etc
Held by Federal Reserve Banks
Held by all banks

Per cent.

$691,872,000
300,380,000
248,939,000
58,883,000

100
43.4
34.9
8.5

608,202,000

86.8

SEPTEMBER 1,1918.

II. (1) Available data, after December 7,
1917, as to "member banks in. selected cities/'
afford an alternate and less satisfactory mode
of computing the banks' holdings of certificates at a typical later date when large
amounts of tax anticipation certificates had
been sold "over the counter" and when progress had been made in securing a wider distribution and absorption of the loan anticipation issues.
On April 18, 1918, there were outstanding, in
nominal amounts—
Tax anticipation certificates
Loan anticipation certificates
Total

$1,440, 636, 500
2,494,259,000
3,934,895,500

On the same date the "selected" member
banks held $1,497,677,000 certificates, or 38
per cent of the nominal amount outstanding.
To this must be added the holdings of (a)
member banks, other than "selected;" (6)
nonmember banks; (c) Federal Reserve Banks.
As to (a), there were 630 "selected" banks
on December 28, 1917, and 685 on April 19,
1918. Assuming "time deposits" to be constant and comparing such deposits of the 630
banks ($1,321,944,000) with the 685 banks
($1,397,596,000), the diiference $75,652,000,
or 5.7 per cent, would represent the relative
banking strength of the 55 additional banks.
The "selected" banks held $591,578,000
Government deposits on December 28, 1917,
and $550,439,000 on January 4, 1918, of
which the mean $571,008,500 might be taken
for December 31, 1917. Augmenting this by
5.7 per cent, the Government deposits of the
685 banks on December 31, 1917, would have
been $603,555,000.
The Government deposits in all member
banks on December 31,1917, were $649,413,000,
indicating $45,858,000, or 7 per cent, as the
banking strength of the "nonselected" member banks.
Correcting $1,497,677,000 and 38 per cent, by
7 per cent, to allow for "nonselected" member
banks, we have:
Certificates held by all member banks
$1,602,514,390
Per cent of outstanding certificates
...
40.6

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

847

briefly, to summarize the position of the Treasury Department toward revenue legislation this year.
In May I called the attention of the President and Congressional leaders to the urgent need of additional taxes
and prompt action to impose them and indicated the
sources from which these taxes should, I thought, be raised.
The President addressed the Congress on the 27th day of
May and asked the Congress to remain in session for this
purpose and indicated his expectation that the Congress
would turn to war profits and incomes and luxuries for the
additional taxes.
When I was obliged to leave Washington, early in June,
I wrote your chairman a letter, dated June 5, which I
believe you have printed before you, in which I outlined
in some detail the urgency for immediate tax legislation
and the character of the legislation which the Treasury
would suggest.
I then estimated on the basis rather of the growth of the
expenditures in the past than on the basis of the appropriations and indicated appropriation, that the expenditures
for the fiscal year ending June 30, 1919, would amount in
the aggregate to $24,000,000,000. I anticipated that there
having been a very large increase in expenditures for the
month of May, expenditures for the month of June would
be about the same, and that if the expenditures should
continue to mount at the rate of $100,000,000 per month
Summary.
for the next six months, or until December, 1918, and
thereafter remain stationary, this total would be reached.
Per cent.
Amount.
Or, putting it another way, if the average monthly expenditure should exceed that for the month of May, 1918,
$3,934,895,500
100.00
Certificates outstanding Apr. 19,1918.
by 33J per cent we should spend a total of $24,000,000,000
40.6
1,602,514,380
Held by member banks
for the fiscal year 1919.
20.2
794,847,137
Held by nonmember banks
1.2
40,295,000
Hold by Federal Reserve Banks
Following the same method of calculation, from the state02.0
2,443,056,527
Held by all banks
ment for the last day in the month we find that my expectation has been realized during the past two months, the
expenditures for the month of June being $1,512,573,702.42,
TENTATIVE CONCLUSIONS.
and for the month of July $1,608,282,654.44. Itthusappears
The highly tentative conclusions which that in the month of July our expenditures reached a sum
might be drawn from the foregoing are that which, if there should be no further increase in the monthly
of the certificate issues prior to January 1, 1918, expenditures, would make the total expenditures for the
fiscal year 1919 approximate $20,000,000,000.
the banks took for their own account slightly Since I wrote to Mr. Kitchin on June 5, Mr. Sherley,
less than seven-eighths, and that of the issues chairman of the Committee on Appropriations, has subsince emitted the banks have taken something mitted a statement to the House, reported in the Congressional Becord of July 22, page 9973, showing appropriations
more than three-fifths.
and authorizations for expenditures in the sum of $29,791,241,773.67. Mr. Sherley, however, in his remarks
War Revenue Legislation.
says that the probability is that the expenditures for 1919
will be at least five or six billions of dollars less than that
The following statement made by the Secre- amount, from which it appears that his estimate is about
tary of the Treasury before the Ways and the same as mine—$24,000,000,000. I am apprehensive,
Means Committee, on August 14, presents the not that I have overestimated the expenditures for the
current fiscal year, but, on the contrary, that I have underviews of the Department relative to war- estimated
them in assuming that the progressive average
revenue taxation:
monthly increase of $100,000,000, which has continued
At the risk of wearying you by a repetition of matters since we entered the war, will cease as soon as January,
which may already be fresh in your recollection, I want, 1919.

(2) As to certificates held by nonmember
banks:
On December 31, 1917, the total resources
of all member banks were $23,078,045,000.
But the total resources of all national banks
($18,073,308,000) and of all reporting State
banks, loan and trust companies reporting
($16,448,726,575, being 11.9 per cent increase
over the June 20, 1917, figures) aggregated
$34,522,034,575. The total resources of nonmember banks was therefore $11,443,989,575,
or 49.6 per cent of that of the member banks.
Assuming that nonmember banks took certificates in the same ratio to total resources
as did member banks, we should conclude that
nonmember banks held $794,847,137 certificates, or 20.2 per cent of the nominal amount
outstanding.
Finally, on April 19, 1918, the Federal
Reserve Banks held $46,295,000 United States
Government short-term securities.

848

FEDERAL RESERVE BULLETIN.

I shall not trouble you to review the reasons which led
me to urge the enactment of a revenue measure which
would produce not less than one-third of these estimated
expenditures, or $8,000,000,000, because I understand
that view has met with acceptance by your committee.
It is sufficient for me to say that in the light of such information as I have obtained in the interval, $8,000,000,000, seems to me to be a minimum amount.
Turning now to the consideration of the general recommendations as to the character of the revenue act, the
most important, and I am sorry to say the most controversial, is that in relation to the war profits tax and excess
profits tax.
In my letter of June 5 I said:
"The existing excess profits tax does not always reach
war profits. The rates of excess profits taxation are graduated and the maximum is 60 per cent. In Great Britain
there is a fiat rate of 80 per cent on all war profits. The
Government Departments, under great pressure as they
are to get necessary war materials and supplies with the
utmost expedition, cannot in the nature of tilings fix their
prices nor guard their contracts in such a way as to avoid
the possibility of profiteering. The one sure way is to tax
away the excessive profits when they have been realized.
I do not say this in a spirit of criticism of the corporations
or business men of the country who have for the most part
loyally supported the Government. In entering into war
contracts they take grave risks. They are called upon to
make vast expenditures of capital for purposes which may
prove unproductive after the war. They are not to be
blamed in these circumstances for asking for prices and
terms which cover those risks. On the other hand, when
the risk has been liquidated by proper allowances, and the
contract has proved profitable, the Government should
take back in taxes all profits above a reasonable reward.
Under existing law, that does not happen because the tax
rates are not high enough and can not safely be made high
enough, since the test now is not how much of the profits
are due to the war, but what relation the profits bear to the
capital invested. A company with a swollen capital and
huge war profits escapes."
and again:
" (2) That a real war-profits tax at a high rate be levied
upon all war profits. This tax should be superimposed upon the existing excess-profits tax in such a
way that the taxpayer should be required to pay whichever tax is the greater. The existing excess-profits tax
should be amended in certain important particulars so as to
remove inequalities."
This I supplemented with my telegram of August 4
to your chairman, urging the war-profits tax and that the
rate should be a flat rate of 80 per cent, and the continuance of the existing excess-profits tax modified so as
to remove any inequalities.
The distinction between a war-profits tax and the excessprofits tax is not a matter of form, but of substance. By
a war-profits tax we mean a tax upon profits in excess of
those realized before the war. By an excess-profits tax
we mean a tax upon profits in excess of a given return upon
capital. The theory of a war-profits tax is to tax profits
due to the war. The theory of an excess-profits tax is to
tax profits over and above a given return on capital. A
war-profits tax find? its sanction in the conviction of allt

SEPTEMBER 1,1918.

patriotic men, of whatever economic or political school,
that no one should profit largely by the war. The excessprofits tax must rest upon the wholly indefensible notion
that it is a function of taxation to bring all profits down
to one level with relation to the amount of capital invested,
and to deprive industry, foresight, and sagacity of their
fruits. The excess-profits tax exempts capital and burdens
brains, ability, and energy. The excess-profits tax falls
less heavily on big business than on small business,
because big business is generally overcapitalized and small
businesses are often undercapitalized.
The war-profits tax would tax all war profits at one high
rate; the excess-profits tax does, and for safety must, tax
all excess profits at lower and graduated rates. Any
graduated tax upon corporations is indefensible in theory,
for corporations are only aggregations of individuals,
and by such a tax the numerous small stockholders of a
great corporation may be taxed at a higher rate than the
very wealthy large stockholders of a relatively smaller
corporation. The object of a graduated tax should be to
make taxes fall upon the rich, who are best able to pay
them. The graduated excess-profits tax disregards this,
and often produces the reverse result.
But, though these great defects in the excess-profits tax
lead me very strongly to recommend that you should
seek additional sources of taxation in the war-profits tax
and not in an increase of the excess-profits tax, I have
from the beginning favored the continuance of the existing
excess-profits tax with the inequalities and injustices
remedied, because this is not a time when the Treasury
can afford to dispense with any existing source of revenue.
Rather, it is my duty to point out to you additional sources
of taxation.
As I have already indicated, I am opposed to increasing
the excess-profits tax. This does not mean that I think
the existing excess-profits tax can not be improved. On
the contrary, I have indicated from the beginning, and
repeatedly, that I think it can and should be improved.
If, as I now understand, you contemplate an increase
in the exemption, then there must also be an increase in
some of the excess-profits tax rates to make the tax produce
an equal amount of revenue. Similarly, if, as seems
probable, additions to invested capital made during
the past year will result in a reduction of the revenue produced by the excess-profits tax under the existing rates,
modifications must be made on that account.
My thought has been not that the existing rates or law
should be regarded as sacrosanct, but that the existing law
should receive modification, not from the point of view of
producing additional revenue from the excess profits tax,
but from the point of view of producing the same revenue
and with a reduced and not increased injustice and inequality.
I have read in the newspapers, with a good deal of surprise, the intimation that the plan of the Treasury Department was calculated to produce less rather than more
revenue, and to relieve certain large corporations from
axat ion.

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

I should like to make a part of the record, a memorandum
which Dr. Adams of the Treasury Department has prepared
for me, showing a comparison of the war profits and excess
profits taxes as applied to twenty-two selected corporations
including the corporations which have been named in the
newspapers as most likely to benefit by the omission to
increase the excess profits tax.
I shall state now only his general conclusions:
" 1 . Twenty-two horrible examples, selected deliberately to ascertain the worst the war profits tax and the best
the excess profits tax can do, yield just four cases in which
the excess profits tax would be as productive as the war
profits tax.
" 2 . Eleven corporations, including A Company and
some of the worst of the other horrible examples, got no
benefit from the war profits deduction, while they would
pay the 80 per cent rate which is an integral part oi: the
war
pro (its tax.
;t
3. Contrasting the 60 per cent with the 80 per cent
bracket in the two proposed new excess profits taxes, it
appears that in only one case * * * would the change
from the 80 per cent to the 60 per cent bracket affect the
tax. Of course the totals show a higher amount for the
excess profits tax with an extreme bracket of 80 per cent,
but in only one case whore the corporation pays excess
profits rather than war profits tax, would the substitution
of a 60 per cent for an 80 per cent bracket affect the tax."
When I speak of the increased excess profits tax under
consideration by your committee, I mean the so-called
30-50-80 per cent plan without the 10 per cent minimum.
All of the steel companies will, of course, pay far greater
taxes under the war profits method than under the excess
profits method.
From A Company the war profits method will, it is estimated, produce nearly $100,000,000 more than the excess
profits tax, even at the increased rates proposed by your
committee.
From B Company 59,000,000 more, and from C Company
$4,500,000 more. D Company would, it is estimated, pay
$100,000 more under the war profits tax methods than under
the excess profits tax method at the increased rate proposed
by your committee.
E Company would pay 83,400,000 more. F Company
$9,200,000 more. G Company $2,300,000 more. II Company $150,000 more. I Company $1,300,000 more. J
Company $1,900,000 more under the war profits tax than
the excess profits tax. K Company would have no excess
profits tax to pay under the increased rates proposed by
your committee, although it did have to pay §275,000 excess
profits tax under the existing excess profits tax law.
L Company would have to pay more than $4,000,000 more,
under the war profits tax than under the increased excess
profits tax which has been proposed by your committee.
M Company would have to pay $750,000 more. N Company $900,000 more. O Company $400,000 more. P Company $1,100,000 more. Q Company $1,200,000 more under
the war profits tax than under the increased excess profits
tax.
Among the conspicuous companies, certain of the R
group, the S Company and the T Company are the only

849

ones which our researches indicate as benefiting by the
omission to increase the excess profits tax.
The S Company under the existing law would pay about
$3,452,000 and under the increased rates proposed by the
committee, would have to pay $4,369,000, an increase of
about $900,000.
The T Company under the existing law would have to
pay $1,852,000 and under the increased excess profits tax
would have to pay $2,296,000, an increase of about $400,000.
The following statement shows what would happen if the
80 per cent war profits tax, and the various excess profits
taxes, were levied upon a composite group composed of R
companies.
A COMPOSITE (it) GROUP.

Invested capital for taxable year
$623,705,538
Invested capital for prewar period
362,713,982
Net income for taxable year
204,755,823
War profits deduction:
Specific
$3,000
Net income for prewar period
].. 53,516,727
10 per cent of changes in
capital
26,104, 734
10 per cent of invested capital for taxable year
79, 624,461
A. War excess profits tax
100,105,089
B. Excess profits tax under the act of October 3, 1917
42,586,014
C. Excess profits tax as proposed in section
301
~
73,358,666
I). Same as C except change in rate
63,595,568
The R-l Company would pay $29,000,000 war.profits tax
and only $23,000,000 under the increased excess profits
tax rates.
Dr. Adams has already presented to you a table showing
beyond a shadow of a doubt in great detail, from examination of reports of upward of 8,000 corporations, how the
burden of the graduated excess profits tax falls more heavily on small business than on big business.
I should like to refer to and adopt that table and call it to
your attention as a conclusive and controlling argument
against the increased excess-profits tax rates proposed by
your committee. The highest rates are paid by the smallest companies. The 80 per cent rate which the committee
proposes to apply as a maximum excess-profits tax rate,
will not be paid by more than one, if hy one, great corporation in the United States.
To impose a tax some hundreds of thousands of dollars
greater upon the S Company your rates would burden unduly, even to the point of ruin, innumerable small business
concerns.
Remember that the excess-profits tax you impose depends not upon the income of the corporation, but upon the
relation between the income of the corporation and its

850

FEDERAL RESEEVE BULLETIN.

invested capital arbitrarily ascertained and that by so
much as you increase the graduation of the tax, you multiply the burden of the errors incident to such ascertainment. It is from the lower brackets that the revenue is
produced. It is from the upper brackets that the hardship
and inequality results.
I have here a table showing that of the larger coal companies with alleged capital ranging from §2,000,000 to
$120,000,000, the W-l Company pays no excess profits tax;
the W-2 Company pays 37 per cent of its income in excess
profits taxes; the W-3 Company pays 7 per cent; the W-4
Company, 36 per cent; the W-5 Company, 27 per cent, and
the W-6 Company, 5 per cent.
On the other hand, of a group of six small coal companies whose capital ranges from $4,000 to $97,000, all
pay excess profits taxes in amounts ranging from 52 per
cent to 56 per cent of their entire income.
This comparison of the large coal companies with the
small coal companies is a conspicuous example of the discrimination of the excess profits tax law against the small
concern and in favor of the big concern.
I hope we shall get, by the war profits tax, greater and
more equal taxes from all those who have profited in coal.
Invested
capital, taxable year.

Net income for
taxable
year.

Excess
profits
tax.

Ratio of
tax to
income
(percent).

LARGER COMPANIES.

W-l
W-2
W-3
W-4
W-5
W-6

$30,864,696
10,200,747
120,785,010
6,608,168
2,250,959
. ... 9,625,189

§2,154,233
No tax.
5,564,657 $2,114,104
13,685,997
1,005,739
3,154,491 1,125; 547
813,838
226,591
1,280,478
66,742

0.0
37.98
7
36
27.84
5.57

SMALLER COMPANIES.

W-7
W-8
W-9
W-10
W-ll
W-12

. . .

29,821
6,553
4,692
14,287
97,137
65,514

54,148
29,039
35,978
63,301
186,720
211,833

28,324
15,309
19,562
35,345
99,970
18,833

52.31
52. 69
54.37
55.87
53. 54
56.03

To summarize, again, my views concerning the war profits tax and excess profits tax, let me say that there should
be a war profits tax at a flat rate of 80 per cent and that the
excess profits tax should not be depended upon to produce
increased revenue, but that modifications are desirable to
reduce the inequalities of the present law. Should you
determine, in making such modifications, to make alterations in the rates, they should be made with a view to
producing the same amount of revenue as during the past
year from the excess profits tax and in a way more equal,
less fraught with hardship to small business concerns. If
you adopt this view, you will not increase the rates in the
upper brackets though you may increase some of the lower
rates, while increasing the exemption and eliminating the
inequalities.
The imposition of these great taxes, calculated to produce §8,000,000,000 in one year, casts a heavy burden upon

SEPTEMBER 1,1918.

you, gentlemen, and upon me. For years, even under the
tax law of 1917, taxes have been in such relatively moderate amounts as in only exceptional cases to produce hardship . Should the Congress enact a law this year calculated
to produce revenue of $8,000,000,000, it will do so as a
necessary war measure, carrying with it a heavy burden
upon the business and prosperity of the country which can
only be borne if the burden falls equally and justly according to the ability of the taxpayer to meet it. No arbitrary
rule, no foresight of yours can deal with every case in a
manner to produce justice, equity, and avoid ruin. In
order to equalize taxation, authority must be conferred
upon the Commissioner of Internal Revenue acting with
the advice of a board of advisors and subject to the approval of the Secretary of the Treasury. These are war
measures and require to be dealt with as such.
Another not less important element in this situation is
the importance of having the measure you do present to
the Congress one in which advantage is taken of the experience and knowledge of the subject which experts of the
Bureau of Internal Revenue have accumulated in the past
nine months of intimate association and experience with
the operation of the existing law. I venture to urge upon
you, therefore, a careful consideration of the recommendations which they will present to you. Such subjects as
amortization, depreciation, etc., entering profoundly into
the elements of calculation of every tax, are subjects
upon which the experts of the Internal Revenue Bureau,
such as Dr. Adams, here, are able to speak with greater
knowledge than the Secretary of the Treasury or members
of the Ways and Means Committee. I beg you, therefore,
to seek and act upon their advice in these matters.
Turning now from the subject of profits taxes to the subject of income taxes, I ask you to bear with me while I read
to you certain paragraphs in my letter of June 5 relating
to the normal income tax:
" I hope that it will not be necessary to increase the
interest rate on Government bonds. The number of subscribers to the three Liberty loans aggregated 30,000,000,
The people who subscribed are impatient of those who have
not. Various plans have been urged upon me for forcing
the people to buy Liberty bonds. The man of small means
who buys a §100 bond wants his neighbor to do so, too.
There is a popular demand also for high taxes upon war
profits. There is also a popular demand that all the people
should contribute to financing the war. There should,
therefore, be a substantial increase in the normal income
tax rate and a high tax should be levied upon so-called
unearned than on earned incomes. Income derived from
Liberty bonds would be exempt from this taxation and the
relation between income from liberty bonds and income
from other securities would be readjusted without increasing the rate of interest on Liberty bonds. It would not
tax the patriotic purchasers of Liberty bonds on their
holdings, but it would weigh heavily upon the shirkers
who haye not bought them. It would make the return
from Liberty bonds compare favorably with the return
from other securities. It would give the Government's
bonds an essential and necessary advantage over those of
corporate borrowers and would very greatly decrease the
relative advantage which State and municipal bonds now
enjoy through the total exemption which they carry. It

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

would produce a gradual readjustment of the situation in
the investment markets instead of an abrupt one, as would
be the case if the interest rate on Liberty bonds should be
increased.
A normal tax falls upon all alike. Therefore, as I
pointed out in my statement before the Ways and Means
Committee last summer, there is not the same objection
to the exemption from normal income taxes as there is
to the exemption from surtaxes. A substantial increase
in the normal income tax is the soundest and surest way
of stabilizing the price of Government bonds. If we have
to increase the interest rate on Government bonds, the
increased rate may continue for 10 to 30 years and
some of the bonds which we have issued will go to great
premiums not long after the war is over. If we make the
bonds at the present rate more attractive by increasing
the normal tax, then the decrease in taxation which will
follow the close of the war will automatically adjust the
situation. I believe that to stabilize the price of Government bonds by first increasing and subsequently reducing
the normal income taxes, from which the holders of the
bonds are exempt, is sound finance and sound economics.
(3) That there should be a substantial increase in the
amount of normal income tax upon so-called unearned
incomes. Under existing law earned incomes above
certain exemptions are taxed 4 per cent as an income tax
and 8 per cent as an excess profits tax, making a total of
1.2 per cent, while unearned incomes, derived from securities, etc., are taxed only 4 per cent. The 8 per cent tax
should be recognized as an income tax and the rate of
12 per cent (4 per cent normal and 8 per cent excess
profits) should be retained in respect to earned incomes,
while a higher rate than 12 per cent should be imposed
on unearned incomes.
I can not profitably enlarge upon what I thus wrote
more than two months ago, except to say that the failure
to continue what is, in effect, a 12 per cent tax upon
normal earned incomes and the failure to enact a differential of say 3 per cent against unearned incomes, making
the tax on the latter 15 per cent, will, it is estimated by
the Treasury Department, deprive us of additional revenue
to the amount of §145,000,000, while at the same time
seriously jeopardizing the program for the issue of Liberty
bonds of the fourth Liberty loan at 4\ per cent, by reducing
the value of the exemption to the holders of those bonds
from normal income taxes (by an amount equal to onethird; from 15 per cent to 10 per cent.
With regard to luxury taxes: I have not had an opportunity to examine the tentative conclusions of the committee. I know that suggestions were invited by your
chairman and furnished by the Treasury Department,
and I wish to say that a war revenue act such as this must
be should be made with a broader point of view than that
merely of producing revenue—from the point of view
also of curtailing wasteful expenditure. From this point
of view, such taxes as that proposed upon the employment
of numerous domestic servants are of great importance.
Turning to another matter which is of great interest and
importance in connection with the sale of Liberty bonds,
I call your attention to the question of exemption carried
by bonds of the United States issued before September
24, 1917, and bonds of States and local authorities, from
United States graduated income surtaxes. I understand
that the committee proposes to make, subject to such sur-

851

taxes, bonds of States and local authorities issued hereafter. This involves a very difficult and troublesome
constitutional question. On the other hand, I understand that the committee has not adopted a suggestion
made by the Treasury Department to the effect that the
exemption, whether in respect to bonds heretofore or
hereafter issued, should be spread over all the brackets in
the surtax and not, as now, in effect deducted from the
highest bracket. I hope, very much, that it will be determined to adopt this suggestion of the Treasury Department, which would, I believe, be constitutional, would in
a large measure reduce the disadvantage under which
Liberty bonds now are by comparison with wholly exempt
bonds, would produce revenue, it is estimated, in amount
from $12,000,000 to $20,000,000 directly, and indirectly
close the door to a great reduction in revenue which I
anticipate as a result of the increased income taxes now
in contemplation, forcing large taxpayers into exempt
securities.
*
In that connection, in the consideration which you give
to the question of increasing the rates of supertaxes, I
call your attention to the importance of not increasing
these rates to a point where they will be destructive
rather than productive of revenue. Obviously, a point
may be reached where, by making the supertax rates
too high in the higher brackets, persons subject to these
topmost rates will find it to their advantage to dispose
of their taxable securities in the market and invest the
proceeds in exempt securities.
In conclusion, let me remind you of the urgency of
prompt enactment of this revenue bill. The considerations which made such an act obviously necessary were
laid before the President, and by him before the Congress
on May 27, as I have earlier stated. To quote the President's message:
"We can not in fairness wait until the end of the fiscal
year is at hand to apprise our people of the taxes they
must pay on their earnings of the present calendar year,
whose accountings and expenditures will then be closed.
We can not get increased taxes unless the country knows
what they are to be and practices the necessary economy
to make them available. Definiteness, early definiteness,
as to what its tasks are to be is absolutely necessary for
the successful administration of the Treasury; it can not
frame fair and workable regulations in haste; and it must
frame its regulations in haste if it is not to know its exact
task until the very eve of its performance.''
and again:
"Moreover, taxes of that sort will not be paid until
the June of next year, and the Treasury must anticipate
them. It must use the money they are to produce before
it is due. It must sell short-time certificates of indebtedness. In the autumn a much larger sale of long-time
bonds must be effected than has yet been attempted.
What are the bankers to think of the certificates if they
do not certainly know where the money is to come from
which is to take them up? And how are investors to
approach the purchase of bonds with any sort of confidence
of knowledge of their own affairs if they do not know what
taxes they are to pay and what economies and adjustments of their business they must effect.;;

852

FEDERAL RESERVE BULLETIN.

When I read in the newspapers that a legislative program in relation to the passage of the revenue bills was in
contemplation which did not insure its passage before
the end of October, I was greatly concerned and I telegraphed to the President under date of July 25 as follows:
" Newspapers indicate that effort will be made to give
waterpower bill precedence over revenue bill when
House reconvenes August 19, and that revenue bill may
not be acted upon by House until early in September.
The imperative demands on the Treasury compelled me
to plan some time ago for beginning, at the latest, a fourth
Liberty loan campaign September 28 and ending October
19. This would leave free for political campaign little
more than two weeks before election. I should fear to
offer the 4J per cent Liberty bonds authorized by the
fourth Liberty bond bill for subscription before enactment of the revenue bill. Perhaps you may recall that
an important ground for our insistence upon prompt
revenue legislation was the conviction that new taxes
should be determined upon before next Liberty loan
campaign, both in order to give the bonds the benefit of
exemption from definitely increased normal income and
other taxes and to give the people definite knowledge
of their tax liabilities before they are asked to subscribe
for bonds. Another and most important reason for earliest
possible tax legislation was to enable me to sell short
time Treasury certificates of indebtedness in anticipation
of and receivable for income and excess profit taxes.
Protracted delay even in writing the new law is interfering
with my plans and prolonged delay in its enactment would,
in my judgment, seriously jeopardize the ability of the
Treasury to sell sufficient Treasury certificates to finance
the Treasury in the intervals between Liberty loans.
The financial operations of the Treasury are so colossal
now that it will impose an undue strain upon the resources of the banks if we throw upon them alone the
burden of taking short time certificates of indebtedness.
We must supplement the resources of the banks by selling
Treasury certificates of indebtedness available for the
payment of income and excess profits taxes in order to
reach the great number of taxpayers and to transfer to
them through anticipation by them of their tax payments
a large part of the load of temporary Treasury financing
instead of imposing it wholly upon the banks. To postpone the Liberty loan campaign beyond September 28
would, on account of the impending elections, necessitate
delaying it until the middle of November, which would
make it conclude about the 7th or 10th of December,
This would mean that proceeds of fourth Liberty loan
would not be available before middle of December and
would necessitate a large increase in the amount of the
offering, forcing it probably to eight billion dollars. It
would also compel the Treasury to refund about three
billion dollars of short time Treasury certificates which
have already been or shortly will be issued pursuant to
program announced by me on June 12 to banks and trust
companies throughout country, all of which mature prior
to the middle of December, as they were issued in conformity with the plan to offer the fourth Liberty loan
about September 28. I doubt if this refunding could be
done, coming as it will in the middle of the crop-moving
season and at a time when the resources of the banks will
be taxed to the utmost. Therefore a material change in
the date for the fourth Liberty loan seems to be impossible.

SEPTEMBER 1,

1918.

"In these circumstances I hope that you may deem it
wise to ask Mr. Kitchin to present the revenue bill to the
House immediately upon its reconvening and to expedite
its passage over all other measures, and that you may ask
Senator Simmons to arrange for its expeditious passage in
the Senate. Knowing as I do the imperative necessities of the Treasury, which are becoming more pronounced each day with the constantly increasing appropriations and other demands upon it, I consider it vital that
the new revenue bill shall become a law before the end of
September. Of course I know that you can Use only your
great influence to secure this result, and the purpose of this
telegram is to beg you to exert your influence in this direction immediately.''
I was gratified shortly thereafter to receive a telegram
from your chairman, dated July 31, as follows:
"The President has handed me a copy of your telegram
of July 25. I entirely agree with you. The committee
hopes to have the bill ready for report and immediate con sideration in the House by August 19; every effort is being
made to this end."
I can only add, gentlemen, that it is imperative that we
have the revenue bill enacted into law before the opening
of the fourth Liberty loan campaign on September 28.

The Ways and Means Committee of the
House of Representatives on September 3 reported a new war revenue measure after conferences with the Secretary of the Treasury
and his representatives.
^•..^ Progress in Curtailment of Nonessentials.1
The Council of National Defense recently
undertook an investigation for the purpose of
determining whether purchases by civilians
in the United States have been increasing or
decreasing during the war period. Information was obtained from large and representative concerns as well as from smaller merchants
and from leaders of labor organizations. This
afforded a means of ascertaining the broad
general tendencies in buying and the degree
of economy that is being exercised in the purchase of the principal classes of goods. One
of the most illuminating statements was furnished by a very large business house dealing
directly with consumers throughout the entire
country. Because of the diversity of merchandise handled and customers served, the
business of this firm may be considered a reasonably accurate barometer of comparative
purchasing activities. The following table,
compiled from its records, shows a comparison
1

From Commerce Reports Tuesday, August 6.

FEDERAL RESERVE BULLETIN".

SEPTEMBER 1,1918.

between the first five months of 1917 and 1918
on a quantity as well as a dollar-and-cent
basis; where there was no marked change in
quantity the spaces are left blank:
Dollars.

Quantity.
Classes of goods.

Increase. Decrease.; Increase. Decrease.
Clothing:
j Per cent. Per cent. Per cent. Per cent.
13
Boys'
i
3
23
Men's
17
96
48
Work
11
Men's furnishing goods...
20
Women's—
32
Suits, skirts, dresses..
38
Coats and waists
Millinery, corsets, etc.
Infants' and children's
19
Underwear:
Men's and women's knit,
and hosiery
Muslin
j
12 !
33

Household furnishings:
j
Furniture
;.
Drapes, curtains, blank- jl
ets, and quilts
.
Carpets and rugs
i.
Crockery and glassware..:.
Hardw are
Luxuries and semiluxurics: j
Jewelry, watches, and I
diamonds
!
Books and stationery
'•..
Toilet articles, cigars, !
tobacco, drug sundries.!.
Pianos and organs
i
Automobile and bicycle j
supplies
\

22 j
30

io !

l
33J
52

CONCLUSIONS ARRIVED AT BY COMPANY.

In addition to the above statement the concern formulated its conclusions, arrived at not
only from its own business, but from such information as has come to it from various reliable
sources in all parts of the United States. A
summary of these conclusions follows:
Boys' clothing shows a marked decrease in
the quantity purchased in the higher-priced
lines, while knee pants, rompers, blouses, and
all items of small money value show a sufficient
increase to offset this and bring about a slight
increase in the whole line.
As regards men's clothing, the greatest decrease is in the clothing intended for young
men; this is possibly sufficient to account for
the entire falling off in volume.
Work clothes show a great increase, with the
percentage of value very much larger than the
percentage of quantity. This latter fact is due
to the radical increase in the prices of raw
material entering into the manufacture of
these goods, such as duck and denims.
Men's furnishing goods show the largest decrease in quantity of all the men's apparel
lines. There has been a marked falling oil in

78653—IS

853

the demand for men's hats, dress shirts, and
the miscellaneous lines generally carried under
this head. In caps, trunks, suitcases, etc.,
there has been a smaller decrease, while the
number of men's work shirts sold is at least
equal to that for 1917.
Counting women's dresses exclusively, these
would show a quantity increase of about 32
per cent. TJ;te decrease, however, in suits,
skirts, and misses' dresses is sufficient to
offset this increase and bring the entire line
down to a volume only equal to that of last
year. (Women's dresses represent more than
25 per cent of the entire line).
Coats and waists show a small increase
(5 per cent) in volume, with a 36 per cent increase in value. The latter is not due entirely
to increased cost, as there is a marked demand
for the higher-priced better garments.
Millinery, corsets, etc., show a slight decrease
in quantity, which may be due as much to a
growing simplicity in style as to a dropping off
in demand or desire to buy.
Knit underwear shows a quantity decrease of
13 per cent. Taking women's alone, the decrease
would be only 5 per cent. In hosiery the quantity decrease in all lines is about 8 per cent.
Separating the women's and children's from the
men's, shows a decrease of 7 per cent for the
former and 11 per cent for the latter—bringing
out a fact that appears to be true of all wearing
apparel, namely, that women are buying more
freely than men. Muslin underwear, aprons,
etc., show a decided increase in quantity; this
is entirely a women's line.
In shoes the total quantity decrease is about
33 per cent. The greatest decrease, 47 per
cent, is in the men's lines, while the smallest
decrease, 26 per cent, is in rubbers. Women's
shoes show a decrease of 35 per cent and children's 27 per cent. It would seem that this
condition is general throughout the country,
the shoe business everywhere showing a decided decrease. The rapid and amazing increase in price, the "temporary craze for freak
styles last year," the comparative facility of
compromising on this item of apparel, and the
withdrawal from the buying population of
upward of a million and a half young men—all
these factors contribute to bring about the
condition indicated.
As regards furniture, the slight decrease in
the heavier lines shown in this company's business may be due as much to the congested
traffic conditions, discouraging purchasing
from a distance, as to a decrease in demand.

854

FEDERAL RESERVE BULLETIN.

Curtains, drapes, and floor coverings show
about an equal quantity, so far as this company's business is concerned. Yet from very
reliable sources, such as the largest manufacturers themselves comes the report of business
being curtailed at least one third. The scarcity
of raw materials and the difficulty in obtaining
them may have much to do with this condition. In rugs there is an unusually good
demand for the smaller sizes, with a considerable falling off in the larger.
Crockery and glassware show a large decrease
in quantity and a very marked discrepancy
between quantity and dollar-and-cent sales,
because of the shortage of imported wares and
the scarcity of the domestic makes, together
with the very great advance in price,
STATEMENTS INDICATE INCREASED SALES OF
LUXURIES.

There is a decided increase in sales of smallsized diamonds and a falling off in sizes from
-|- carat upward. This is due, no doubt, to
the great increase in price and the tendency
of people to buy diamonds by price alone;
that is, they have, perhaps, $75 or $100 to
put in a stone, and it brings them a much
smaller jewel than the same amount would
procure a year or two ago.
Watches are in great demand, especially
wrist watches, which have been enormously
popularized by the war.
Fountain pens and stationery show a decidedly increased demand, for the obvious
reason that so many men are leaving their
homes. There is a very great decrease in the
sale of books of fiction, while there is a very
fair demand for technical books on machinery,
motors, etc.
The quantity of cigars and tobacco sold
shows a very noticeable increase, which can
be accounted
for by the slogan " Smokes for
the soldiers.7'
Face powders and creams show an increase,
while toilet articles, such as manicure and
shaving sets, brushes, and combs, show a
decrease.
As the company furnishing this information
has only recently become an aggressive contender for phonograph business, it is unable,
from its own experience, to make comparisons.
However, since it entered the field in earnest
in the fall of 1917 its business has far exceeded
the most sanguine expectations. Information

SEPTEMBER 1,1918.

from reliable sources as to the business being
done by the various makers of popular types
is conflicting. It is reported that one of the
best-advertised makes is showing 100 per cent
increase, while an equally well-advertised and
well-known company is running far behind its
last year's output. However, the concern
showing the large increase has a small business
compared with the one showing the decrease,
in addition to which the latter, it is said, has
turned over part of its equipment for Government work. All the minor phonograph companies appear to be showing a considerable increase in their sales.
There is a very great demand for pianos and
organs—at least as shown by the business of
the concern supplying the information, which
is running 22 per cent ahead on a quantity
basis.
Analyzing its business in automobile and
bicycle supplies, the company expresses the
opinion that the quantity increase of 30 per
cent is largely, if not entirely, due to a big demand on the part of industrial concerns and
business firms that emplo}^ salesmen, solicitors, collectors, and repair men—men who are
using automobiles to make their rounds, requiring accessories, new parts, and tires. The
large demand for bicycles and sundries seems
to come from industrial centers, indicating
that workmen are using them in going to and
from the plants. An abnormal increase in
bicycle tires and parts shows that old bicycles
are being used and put in shape.
FIRM: BELIEVES WOMEN ARE PURCHASING MORE.

Drawing general conclusions from its own
business and the information obtained from
other sources, this firm states, in the first place,
that in merchandise for women's exclusive use
it is certain that sales are increasing. "This is
plausible," it says, " because thousands of
women never before employed are now earning
very fair wages, while other thousands previously employed are enjoying greatly increased wages, making for an increased demand in women's wearing apparel in made-up
garments as well as materials for making them,
which even high prices have been unable to
keep down."
Luxuries and semiluxuries, such as musical
instruments, watches, jewelry, and diamonds,
show an increase in quantity as well as in dollars, giving an impression of general prosperity.

iSfSPTEMBKIl 1, 1 9 1 8 .

855

FEDERAL RESERVE BULLETIN.

DEGREE OF ECONOMY PRACTICED—CONDITIONS
CONSIDERED FROM GEOGRAPHICAL STANDPOINT.

The company expresses the belief (and this
opinion is presented simply as the estimate and
impression of this firm) that economy is being
practiced by well-to-do persons and those of
moderate means, while the increased compensation that is being received by large numbers
of people who have previously been somewhat
more restricted in purchasing capacity has
made it possible for them to buy more freely
now of the articles that might be considered
luxuries.
Discussing the question from the standpoint
of geographical location, the company says
that in the South, especially through the cotton-growing States, its business is better than
ever before, and purchases of all classes of
goods are being very freely made.
In the far West the civilian population,
while not so liberal in expenditures as in the
South, is buying freely and in greater quantities than in previous years.
In the northern States of the Middle West
buying is more conservative and more restricted to staples and necessities, but the
volume is at least equal to the average during
the previous one or two years.
In the East there is a rather marked decrease in quantity of purchases, especially in
so-called nonessentials; in fact, it is even
quite noticeable in what are usually classed as
necessities.

trust companies and State banks in some of
the leading cities, the latest date figures being
considerably in excess of the corresponding
figures as at close of the year 1917, though
somewhat below the figures for May of the
present year, as may be seen from the subjoined tables:
Acceptance liabilities of national banks in principal cities
of the United States on specified dates.
[In thousands of dollars; i. e., 000's omitted.]
Dec. 31.
1917.

Mar. 4,
191S.

New York
Boston
Philadelphia.
Pittsburgh.. .
Cleveland.
Cincinnati....
Richmond...
Baltimore...
Atlanta..
New Orleans.
Charleston, S C
Chicago...
Minneapolis
St. Louis
Dallas
San Francisco.
Another

8100,382
42,740
14,125
1,917
5,198
1,278
2,772
2,641
450
2,674
1,274
10,122
808
2,953
1,775
5,708
20,373

S95,234 $103,754
44,290
45,134
17,789
14,694
3,336
2,502
7,002
7,936
946
980
3,182
4,402
4,198
2,492
11,000
588
2 663
1,345
1,474
1,223
22,493
15,764
1,262
595
3,724
3,913
4,295
2,850
8,608
7,185
21,876
20,758

$96,517
45,549
18,315
3 485
5,283
612
3,085
2 369
715
821
1,427
18,857
1,624
1 786
1,900
9,474
19,986

Tot&l

217,190

230,164

231,805

Mav 10,
1918.

250,323

June 29,
1918.

Available data regarding acceptance liabilities of other American banking institutions in
leading cities on or about the dates of the last
three calls made by the Comptroller of the
Currency are as follows:
[In thousands of dollars; i. e., 000's omitted.]

Development of the Acceptance Business.
During the present year aggregate acceptance liabilities of national banks, as shown in
the Comptroller's Abstracts, show an increase
from 217.2 millions to 250.3 millions on May
10 and a subsequent decline to 231.8 millions
on June 29. A similar development is indicated for the acceptance business of the

Dec. 31,
1017.

Mar. 4,
1918.

May 10,
1918.

June 29,
1918.

$217,190 $230,164 $250,323 8231,805
All national banks
Trust companies in Greater
121,274 2114,177
100,196 1104,920
New York
State banks in Greater New
5,586
York
2 8,345
7,345
19,908
Trust companies in Boston...
18,673 ' "*i8," 497"
137"
1,113
Trust companies in Baltimore
470
State banks and trust com1,094
9,280
7,072
panies in St. Louis
5,122
i Mar. 14.

5 June 20.

856

FEDERAL KESEKVE BULLETIN.

SEPTEMBER 1,1918.

compiled by the section from returns supplied
by a majority of the mutual savings banks
The following table supplied by the savings of the country for approximately August 1,
bank section of the American Bankers' Asso- 1918:
ciation furnishes information which has been
The Savings Banks and Liberty Bonds.

Total subPresent
holdings scriptions,
1, 2,
of Liberty loans
and 3,
bonds.
unpaid.

Maine
New Hampshire
Vermont
Massachusetts
Rhode Island
Connecticut
New England
New York
New Jersey
Delaware
Pennsylvania
Maryland
Eastern States
Southern States
Middle West States
Western States
Pacific States
Total United States

Total par- Proportion Total extial paypaid on pense of the Certificates
ments,
indebtpay- three Lib- ofedness.
loans 1, 2, partial
ment plan. erty loans.
and 3.

82.909,624
1.738,850
615,050
18,463,235
284,500
'7,981,271

$72,777
452,020
126,800
4,050,771
81,783
935,947

§635,395
875,165
234,950
9,875,886
102,500
5,367,500

Per cent.
72.8
65.2
75.0
71.2
33.0
65.8

$1,102
3,312
750
35,756
150
18,914

§3,478,000
2,410,500
600,000
16,510,500
385,000
6,889,000

31,992,530

5,720,098

17,091,396

83.8

59,984

30,273,000

38,633,003
3,208,700
376,000
4,654,345
3,961,600

6,244,891
630,512
4,200
122,312
1,563,900

27,373,580
1,790,700
199,050
1,548,400
3,929,350

71.5
65.0
90.0
40.7
75.0

76,212
4,481
1,400
43,159
61,457

30,175,000
8,315,000
690,000
17,470,000
13,248,000

50,833,648

8,565,815 34,841,080 I

68.45 I

186,709

186,750
4,430,663
116,600
4,160,713

80,000
832,294
89,071
1,724,555

475,000
5,428,000
291,250
14,776,060

65,0
69.2
90.0
67.1

1,000
30,316
800
38,275

303,500
12,944,000
187,500
17,196,000

91,720,904

17,011,835

72,902,786

72.8

317,084

130,802,000

districts. Moreover, the increases are small in
most instances, whereas important decreases
Commercial insolvencies in the United States appear in all other cases.
during three weeks of August, as reported to
R. G. Dun & Co.; number only 456, against 777
Failures during July,
in the corresponding period last year. The
statement for July, the latest month for which
Liabilities.
Number.
complete statistics are available, discloses only
Districts.
1918
1917
1918
1917
786 business reverses, exclusive of banking and
other fiduciary suspensions, for the moderate First
108 I,457,330 SI, 061,620
98
224 2,188,145 3,752,280
141
sum of $9,789,572, as compared with 1,137 Second
728,336
658,693
Third
54
34
464,255 1,255,521
95
71
defaults, involving $17,240,424, in July, 1917. Fourth
126,420
542,271
Fifth
71
27
855,044 1.602,345
Sixth
83
47
Not only are the July failures the smallest Seventh
154 1,355,346 2,878,775
112
173,202
475,182
Eighth
67
31
both in number and amount of the present Ninth
187,904
165,877
29
28
858,034
509,239
50
39
year but so few insolvencies have not occurred Tenth
311,032
Eleventh...
292,589
61
33
141 1,084,524 4,046,032
125
in any previous month back to July, 1907, and Twelfth....
Total
the indebtedness is lighter than in all months
1,137 9,789,572 J 17,240,424
since May, 1910. Analyzed according to Federal Reserve districts, the July figures show
Fiduciary Powers.
more or less reduction in number, in comparison
with July, 1917, in all of the twelve districts,
The applications of the following banks for
and the liabilities are smaller than last year in permission to act under section ll(k) of the
seven of the twelve districts, the exceptions Federal Reserve Act have been approved since
being the first, third, ninth, tenth, and eleventh the issue of the August BULLETIN :

Commercial Failures Reported.

SEPTEMBER 1,1918.

857

FEDERAL RESERVE BULLETIN.

DISTRICT No. 1.

Trustee, executor, administrator, and registrar of stocks
and bonds:
National Union Bank, Boston, Mass.
DISTRICT No. 3.

Trustee, executor, and administrator:
Conestoga National Bank, Lancaster, Pa.
DISTRICT No. 5.

Trustee, executor, administrator, and registrar of stocks
and bonds:
First National Bank, New Windsor, Md.
DISTRICT NO. 7.

Capital.
District No. 4—Continued.

Gibsonburg Banking Co., Gibsonburg, Ohio
§50,000
Rossford Savings Bank, Rossford,
Ohio
50,000
Provident Savings Bank & Trust
Co., Cincinnati, Ohio
1,400,000
Commercial & Savings Bank Co.,
Buckeye City, Ohio
25,000
Peoples Savings & Banking Co.,
Barberton, Ohio
100,000
Farmers & Citizens Banking Co.,
Milan, Ohio
25,000
Commercial Bank, Chester, S. C
Nicholson Bank & Trust Co.,
Union, S. C
Union Bank, Richmond, Va

State Banks and Trust Companies Admitted.

The following list shows the State banks and
trust companies which have been admitted to
membership in the Federal Reserve system
during the month of August.
Seven hundred and thirteen State institutions are now members of the system, having
a total capital of $318,411,556, total surplus
of $382,536,501, and total resources of
$6,609,410,297.
Surplus.

District No. 1.
8400,000

8200,000 i 86,186,729

District No. P.

Oyster Bay Bank, Oyster Bay,
Jefferson Trust Co., Hoboken,N.J.
Erie County Trust Co., East
Aurora, N. Y. .
Westfield Trust Co., Westficld,
N. J
Bank of Amity ville, Amityville,
N.Y
Bank of Westbury, Wostbury,
N.Y
|
The Herkimer County Trust Co.,
Little Falls, N. Y
South Norwalk Trust Co., South i
Norwalk, Conn
!

50,000
200,000.

50,000
50,000

1,170,712
3,119,673

100,000

37,500

1,009,247

100,000

20,000

2,100,064

25,000

50,000

562,547

25,000

5,000

465,079

350,000

4,113,350

100,000

78,000

2,717,308
I

District No. 3.

The Provident Life & Trust Co.,
Philadelphia, Pa
The West Philadelphia Title &
Trust Co., Philadelphia, Pa

2,000,000

5,000,000

113,749,496

500,000

5,337,006

$701,268

1,000,000

13,356,480

50,000

2,750

189,417

20,000

1,176,348

8,000

358,050

100,000

65,000

866,556

75,000
219,750

25,000
300,000

649,342
2,486,408

200,000

4,255,52?,

District No. 7.

State Savings Bank, Missouri
Valley, Iowa
The Northern Trust Co., Chicago,

25,000

9,000

552,009

50,000

45,000

755,950

50,000

10,000

474,370

2,000,000

37,995,999

100,000

200,000

3,608,274

100,000

9,000

957,633

50,000

25,000

891,380

LoveTf State* * Bank",* Monticello*
Iowa
100,000
1,152,761
200,000
Illinois Trust & Savings Bank,
Chicago, 111
5,000,000 11,000,000 112,487,623
Farmers Savings Bank, Sac City,
Iowa
20,000
50,000
587,437
Winnesheik bounty State Bank,
Decorah, Iowa
50,000
150,000
1,860,924
Farmers State Bank, Charter
Oak, Iowa
5,000
40,000
416,313
Iowa State Savings Bank, Cedar
Rapids, Iowa
25,000
100,000
1,959,394
American Trust Co., South Bend,
Ind
200,000
128,000
2,901,942
Bank o[ Baraboo, Baraboo, Wis..
50,000
100,000
1,815,114
City Trust & Savings Bank
Grand Rapids, Mich
200,000
40,000
2,456,666
State Bank of Platteville, Platteville,Wis
50,000
10,000
1,003,053
Alta Vista Savings Bank, Alta
Vista, Iowa
10,000
30,000
382,248
Bankers Trust Co., Des Moines,
Iowa
100,000
1,000,000
3,007,770
Dickinson Trust Co., Richmond,
Ind
125,000
200,000
2,173,890
Peoples State Bank, Mushing,
15,000
Mich
!
...
25,000
207,910
Cherokee State Bank, Cherokee,
75,000
1,259,906
Iowa
75,000
Iowa County Bank, Mineral Point,
50,000
1,496,482
Wis
100,000
Wakefield State Bank, Morenci,
30,000
S31,30S
Mich
50,000
Gilbert Savings Bank, Gilbert,
5,000
233,349
Iowa
25,000
State Bank of Ellsworth, Ells10,000
283,554
worth, Iowa
35,000
Citizens Savings Bank, Decorah,
662,892
50,000
Iowa
50,000
First Trust & Savings Bank,
110,669
Winamac,Ind
40,000
First State Bank of Barrington,
10,000
372,807
Barrington, 111
50,000
Monticello State Bank, Monti200,000
2,081,600
cello, Iowa
200,000
r
Peoples Savings Bank, Coopers1,000
227,409
viile,Mich
25,000
Elkader State Bank, Elkader,
791,744
15,000
Iowa
50,000
Pontiac Savings Bank, Pontiac,
4,695,893
65,000
Mich
200,000
Bank of Sheboygan, Sheboygan,
Wis

District No. /,.

Home Banking Co., Gibsonburg,
Ohio
The Chagrin Falls Banking Co.,
Chagrin Falls, Ohio

517,500

District No. 6.

Merchants Bank, Mobile, Ala

New Britain Trust Co., New
Britain, Conn

Total
resources.

District No. 6.

Trustee, executor, administrator, and registrar of stocks
and bonds:
City National Bank, Kankakee, 111.
Trustee, executor, and administrator:
Citizens National Bank, Royal, Iowa.

Capital.

Surplus.

Clinton County Bank & Trust Co.,
Frankfort, Ind
Citizens State Bank, Big Rapids,
Mich

858

FEDERAL RESERVE BULLETIN.

Capital.

Surplus.

Total
resources.

District No. 7—Continued.
Kent State Bank, Kentland, Ind..
State Savings Bank, Ute, Iowa...
Green Lake State Bank, Green
Lake, Wis
Iowa State Savings Bank, Fairfield, Iowa
The State Bank of Shannon,
Shannon, 111
Milan State Savings Bank, Milan,
Mich
Peoples Sayings Bank, Grand
Haven, Mich
Farqunar Savings Bank, College
Springs, Iowa
Security Bank of Chicago, Chicago, 111
Evanston Trust & Savings Bank,
Evanston, 111
Oswego State Bank, Oswego, 111..
Story County Trust & Savings
Bank, Ames, Iowa
Battle Creek Savings Bank, Battle Creek, Iowa
State Savings Bank. Chariton,
Iowa '.
American Commercial & Savings
Bank, Davenport, Iowa
Citizens Savings Bank, Fostoria,
Iowa
Peoples State Bank, Humboldt,
Iowa
Kellorton State Bank, Kellorton,
Iowa
Mapieton Trust & Savings Bank,
Mapleton, Iowa
Marshalltown State Bank* Marshalltown, Iowa
State Bank, New Hampton, Iowa.
Citizens State Bank, Newton,
Iowa
Garwin State Bank, Garwin,
Iowa
Farmers & Merchants Savings
Bank, Tipton, Iowa
Peoples Commercial & Savings
Bank, Bay City, Mich
Davison State Bank, JDavison,
Mich
Fenton State Savings Bank, Fenton, Mich
Hillsdale SavingsBank, Hillsdale,
Mich
Ludington State Bank, Ludington, Mich
The Union Bank of Winneconne,
Winneconne, Wis
Hasper County Savings Bank,
Newton, Iowa

SEPTEMBER 1,1918.

Capital.

Surplus.

Total
resources.

District No. 9—Continued.
832,000
15,000

§50,000
50,000

10,000

25,000

100,000

§402,106
385,476
353,863

25,000

15,000

298,849

7,000

247,698

22,000

717,750

25,000

40,000

310,294

400,000

200.000

5,290,259

100,000
50,000

10,000
5,000

688,184
327,079

50,000

12,500

535,979

40,000

45,000

815,112

40,000

720,079

600,000

13,931,275

25,000

50,000

$200,000

§40,000

31,948,490

100,000

25,000

1,268,807

50,000

12,500

393,199

1,623,632

25,000
50,000

Central Bank, St. Paul, Minn....
Lincoln County Bank, Merrill,
Wis
Ravalli County Bank, Hamilton,
M ont

2,500

145,375

100,000

35,000

805,232

25,000

8,750

342,598

75,000

7,000

675,149

100,000
50,000 !

30,000
40,000

2,087,532
688,718

60,000

12,000

501,649

50,000

25,000

430,522

50,000

15,000

493,794

400,000

7,023,531

25,000

6,000

439,507

25,000

10,000

453,368

60,000

25,000

1,049,287

100,000

20,000

1,140,858

25,000

8,000

378,183

100,000

50,000

1,220,749

300,000
250,000

150,000
150,000

4,032,535
3,091,887

100,000

10,000

615,801

District No. 10.
Bank of Chelsea, Chelsea, Okla...
Butler County State Bank, David
City, Nebr...

50,000
50,000

612,265
15,000

529,723

District No. 11.
Pecos Valley State Bank, Pecos,
Tex
First Guaranty State Bank, Quanah, Tex
First Guaranty State Bank, Palmer, T e x . . . V.
First State Bank, Santa Anna,
Tex
Junction State Bank, Junction,
Tex
First State Bank, Kirkland, Tex..
Lockney State Bank, Lockney,
Tex.."
First State Bank, Colorado,Tex..
Gilmer State Bank, Gilmer, Tex..
Merchants & Planters State Bank,
Winnsboro, Tex
Commercial Guaranty State Bank,
Nacogdoches, Tex
Texas Bank & Trust Co., Sweetwater, Tex
Guaranty State Bank, Tyler, Tex.
Peoples Guaranty State Bank,
Tyler, Tex
*
First State Bank, Kerens, Tex....

110,000

29,000

573,260

100,000

50,000

627,137

25,000

12,500

160,708

35,000

8,000

188,221

50,000
25,000

50,000
10,000

25,000
30,000
50,000

5,000
12,500

240,138
88,240
219,769

30,000

309,384

100,000

5,000

895,016

100,000
200,000

75,000
55,000

400,315
1,052,820

100,000
50,000

25,000
25,000

575,037
402,498

25,000

128,150

District No. 12.
Security State Bank, Ashton,
Idaho
Farmers & Merchants Bank,
Idaho Falls, Idaho
Victor State Bank, Victor, Idaho..
Almira State Bank, Almira,Wash
Bank of Emraett, Emxnett, Idaho.
Anderson Bros. Bank, Idaho
Falls, Idaho
Traders Bank, Toppenish, Wash..

18,000

412,499

150,000
25,000
50,000
60,000

10,000
5,000

1,014,641
130,292
513,459
510,387

100,000
25,000

100,000
10,000

1,588,218
370,901

NOTE.—The Bank of Green, Green,Kans.y has decided not to complete
its membership by making payment on account of capital stock, and
it is therefore not a member of the Federal Reserve system.

District No. 8.
Bank of Commerce, Little Kosk,
Ark
Union Trust Co.,Little Hock,Ark.
Litchfield Bank & Trust Co.,
Litchfield, 111
Lafayette County Trust Co., Lexington, Mo
I
Farmers Bank & Trust Co.,
Blytheville, Ark
Mercantile-Commercial ii a n k ,
E vansville, Ind
Central Trust Co., Owens boro, ivy.

75,000

15,000

198,142

50,000

25,000

425,584

200,000
200,000

100,000
34,000

2,483,706
I) 403,590

125,000

60,000

1,153,145

50,000

1,456,045

District No. 9.
Bank of Pierce, Simmons & Co.,
Red Wing, Minn
Swift County Bank (Inc.), Benson, Minn
Kandiyohi County Bank, Willmar, Minn
Exchange Bank of South St. Paul
(Inc.), South St. Paul, Minn...
State Bank of JefCers, Jeffers,
Minn
Inverness State Bank, Inverness,
Mont

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 27,
1918, to August 23, 1918, inclusive:

Banks.

100,000

20,000

1,460,158

125,000

25,000

221,399

25,000

10,000

351,159

25,000

19a, 173

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

14
$400,000
14

Aggregate number oE new charters and
banks increasing capital
28

2, 460,000

SEPTEMBER 1,1918.

Banks.

FIRST 3£ PER CENT BONDS DUE 1947.

With aggregate of new capital authorized
2,860,000
Number of banks liquidating (other than
those consolidating with other national
banks)
"!
Capital of same banks
50,000
Number of banks reducing capital
0
Total number of banks going into liquidation or reducing capital (other than those
consolidating with other national banks). i
Aggregate capital reduction
50,000
The foregoing statement shows the aggregate of
increased capital for the period of the banks
embraced in statement was
2,860,000
Against this there was a reduction of capital
owing to liquidation (other than for consolidation with other national banks) and reductions of capital of
50, 000
Net increase

2,810,000

Acceptances to 100 Per Cent.

Since the issue of the August BULLETIN the
following banks have been authorized to accept
drafts and bills of exchange up to 100 per cent
of their capital and surplus:
Baltimore Trust Co., Baltimore, Md.
First National Bank, Navasota, Tex.
Second National Bank, Baltimore, Md.
New Netherland Bank of New York, N. Y.
The National Union Bank of Maryland, Baltimore, Md.
Commercial Trust & Savings Bank, New Orleans, La.
American National Bank, Austin, Tex.
Pittsburgh Trust Co., Pittsburgh, Pa.
Houston National Exchange Bank, Houston, Tex.

Lost and Recovered Liberty Bonds.
Following is a list of lost and stolen Liberty
bonds furnished this month to the American
Bankers' Association.
If any of these bonds or coupons are presented, banks should write, telephone, or telegraph, collect, to L. W. Gammon, Manager
Protective Department American Bankers'
Association, No. 5 Nassau Street, New York
City.

859

FEDERAL RESERVE BULLETIN.

Number.

Amount.

3463
47685
135361
151697
196154
196155
196793
242775
297349
362865
412064
536055
536892
658494
658495
658496
678794
706986
738138
839931
967175
996265
1007746
1007760
1037960
1093800
1112468
1112469
1240063
1305737
1325485
1327201
1461401
1478866

$50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50

Number.

i
:
j
!
:
I
i
i
!
!

I
!
i
:

Amount.

1542110
1542111
1542114
1542118
1559923
1608676
1622150
1644758
1644759
1678358
1693710
1693711
1857639
1894000
1895592
1929145
1943954
1979464
1979465
2041226
2844811
3125901
3125902
3125903
3147527
6283779
7579130
98616
253051
362107
484241
484242
601019
601020

§50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
100
100
100
100
100
100
100

Number.
795139
823213
834024
847017
847018
847794
908330
958292
958900
960333
1020256
1020257
1049593
1050951
1088282
1092762
1107377
1107378
1159040
1159041
1293607
1305737
1381626
1382095
1382096
1382097
l ggg
82562
190740
190744
195760
2S1303
281304
197389

Amount.
SHOO
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
500
500
500
500
500
500
500
1.000

FIRST 4 PER CENT CONVERTED BONDS DUE 1947.
28150
29402
34583
46532
394995
405126
545355
680029
717285
724865
730125
758083
758185
967169
977418
972133
982947
985917
990603
990604
991591
1040675
11289S2
1142219
1247830
1254968
1278507
1357013
1398540
1405343
1408561
1408562
1408563
1408564
1453803
1472635
1508624
1611511

$50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50

1620216
1620216
1626211
1631319
1720171
1631302
1824842
1824843
1824844
1841114
1876643
1979916
1979917
2879334
2960053
3138837
7566310
i 31279
145177
145200
246366
283444
305465
333776
356920
360141
420082
515501
545414
743393
743394
743395
801942
801943
801944
848594
1260928
1261309

Registered.

$50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

1276973
1276974
1276975
1276976
2611354
3450
3451
3452
3453
56950
95553
151232
145177
145178
145179
145180
145181
145182
145183
145184
145185
145186
145187
145188
145189
145190
145191
145192
145193
145194
145195
145196
145197
145198
145199
145200
677600

$100
100
100
100
100
500
500
500
500
500
500
500
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000

860

SEPTEMBER 1,1018.

FEDERAL RESERVE BULLETIN.
SECOND 4 PER CENT BONDS D U E 1942.

Number. Amount.

Number.

Amount.

Number.

SECOND 4 PERCENT BONDS DUE 1942—Continued.
Amount.

Number. Amount.

Number.

Amount.

Number.

Amount.

1
9819
11532
12415
20001
20002
20003
20004
20005
20006
20007
24858
40673
40674
89873
91163
99126
99127
100896
100897
100898
133981
169942
173054
186649
188650
283444
313310
313937
329225
361416
436226
469480
471149
471860
474350
474893
477236
493233
499208
499209
515780
528218
548604
549489
549756
551811
551812
551813
551814
551815
551816
551817
551818
551819
551820
551821
552382
620221
620223
679526
679596
709593
709594
721069
725702
780841
862655
883296
949006
952370
963595
967179
975190
1025190
1027757
1027758
1027759
1027760
1027761
1039082
1111610
1143802
1143803

$50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50

1143804
1145165
1156666
1159787
1165638
1209460
1210303
1214316
1215138
1215139
1222603
1236159
124.0600
1286091
1286099
1291138
1291139
1291278
1295641
1297915
1301021
1305957
1307788
1313270
1313271
1320565
1321764
1322324
1325133
1325134
1325135
1329148
1408958
1411285
1417084
1419678
1419679
1466420
1477661
1482630
1482651
1485641
1492706
1560390
1575351
1614422
1614423
1614424
1614424
1538243
1715002
1841212
1845882
1853965
1864197
1864198
1917347
2038391
2085516
2089150
2089151
2183951
2183952
2183953
3183954
2183955
2183956
2254355
2316236
2497607
2497608
2505465
2505466
2505467
2505468
2505569
2505470
2505471
2505472
2505473
2505474
2772318
2790388

850
50
50
50
50
50
50
50
50!
50
50
50
50
50
50
50
50
50
50
50
50
50 1
50 !
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
53
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50 j
50 i
50 '

2790694
2790695
2779978
2779979
2807843
2807844
2S07S45
2807846
2822342
2832342
2832343
2832344
2854050
2879747
2905399
3083098
3083099
3084870
3103931
3103932
3138837
3145796
3215494
3492045
4036404
4080968
4082708
4162229
4281562
4665202
4753238
4766096
4811406
4825455
4921581
4921582
4921583
4921584
4996556
4996558
5132672
5233156
5330166
5472170
5537493
5548052
5548541
5661553
5881099
6101823
6376:544
6530781
6530782
6551353
6738022
6857847
6927949
6932021
6969305
6992388
7008426
7008429
7060159
7092597
7207370
7238142
7241672
7309093
7315807
7331061
7332911
7340450
7344643
7351218
7399759
7399891
7475149
7643726
7681319
7699692
7704062
19703
40673

1550
50
50
50
50
50
50
50
50
50
50
50
50
.50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
.50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
100
100

40674
57720
76441
88126
88127
88128
88129
88130
151614
193384
219793
224643
230067
230928
259987
261380
265636
265637
265638
265639
265641
265642
271162
282308
289700
311881
311882
390795
515501
556345
641905
653352
672692
(572693
760746
845576
845577
845578
845582
845583
8455S4
895528
895529
895530
990883
990944
995121
1042562
1088282
1185989
1185990
1185991
1185992
1222941
1278507
1282342
1282343
1293024
1299568
1299569
1299570
1391486
1440493
1588288
1588289
1588290
1588291
1588292
1750000
1777304
1777312
1777313
1803445
1903167
1903168
1917347
2327084
2327085
2327086
2327087
2327088
2352974

i Registered.

S100
100
100
100
100
100
100
100
100
100
100
ioo i
100 |
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

lpo

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

235S082
2376712
2478842
2537258
2569936
2576716
2576717
2591165
2596875
2596876
2596877
2596878
2596879
2596986
2600287
2611354
2645571
2645572
2089358
2689359
2589360
2689361
2689362
2704446
2711389
2711390
2711391
2711392
2711393
2711394
2711395
2711396
2711397
2711398
2711399
2711400
2711401
2711402
2711403
2711404
2711405
2711406
2711407
2711408
2711409
2711410
2711411
2881560
2924887
2924897
2981767
2989245
3022568
3079828
3079829
3113953
3135063
3184337
3185063
3231045
3278442
3304,312
33GS202
3368203
3379S01
3385303
3385304
3657229
3568707
368500-1
3727269
3753300
3844040
3953337
3992309
4000402
4025738
4290320
4290323
4301954
4301955
4301956

sioo
100
100
100
100
100
100
100
100
100
100
100
100
100
100 |
100 ;
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

4301957
4301958
4301959
4301960
4301961
4301962
4301963
4301964
4301965
4301966
4301967
430196S
4301969
4301970
4301971
4301972
4301973
4303693
4303694
4303695
4303696
4303697
4303698
4303699
4320050
4330510
4343817
4473604
4488609
4490116
4490117
4515725
4517479
4522461
4522462
4522463
4522464
4522465
4522466
4528902
4559217
4620420
2093
18897
51920
93285
95678
141925
154487
157679
157680
181240
206571
206572
206573
206574
324217
400077
409301
444.024
474766
528218
568602
626071
669415
685983
2461124
185155
347069
412151
412152
427829
466915
484742
1304053
1304054
1389957
1389958
1414687
1439385
34134

sioo
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
103
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
500
1,000
1,000
1,000
L,000
1LJOOO
L,000
]1,000
1,000
]L,000
1,000
L,000
LOCK)
L.000

lojooo

THIRD 4} PER CENT BONDS DUE 1928.
Number.

Amount.

861

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1918.

Number.

Amount.

Number.

"FIRST 4 P E R CENT CONVERTED BONDS DUE 1947.
Amount.

Number.

Amount. i| Number.

Amount.

Number.

Amount.

|
107160
121150
286832
286833
367291
401872
418130
505326
542088
542089
548646
552005
632867
1017403
1222161
1246076
1370451
1572721
1655258
1667855
1667856
1670124
1715002
1749312
1858945
2005000
2016110
2026924
2083229
2108197
2108198
2121454
2121462
2124027
2125180
2512374
2551040
2551041
3073144
3083459
3352066
3352068
3352073
3352074
3352076
3352082

S50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50

3386183
3502435
3648088
4795123
4795236
4796135
4798023
4799799
4914305
4937424
4937556
5019453
5154419
5154736
5169109
5200271
5457054
5876337
5876367
6142470
6161331
6177902
6449235
7040180
7175471
7881511
22550
34510
307158
107159
1635S0
163581
241916
294762
294767
349507
431820
431821
691308
691309
704993
805371
904779
904780
904781
904782

350
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
.50
50
50
50
50
100
100
100
100
100
100
100
100
100
10=3
100
100
100
100
100
100
100
100
100
100

1107597
1107598
1185989
1185990
1185991
1185992
1335237
1511210
1511211
1526168
1526169
1526170
1526171
1526172
1549061
2084900
2101654
2101655
2426655
2426656
2433296
2641790
2963099
2979556
2979558
2996353
3160610
3160611
3533602
3533603
3732311
3738983
3738984
4158056
4548158
5157059
5157060
107950
134807
142837
435841
519911
706462
334874
544815
625512

$100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
500
500
500
500
500
500
1.000
1,000
1,000

Following is a list of the Liberty bonds which,
were previously reported lost and which have
since been recovered and returned to the interested bank. These numbers appeared in previous issues of the FEDERAL RESERVE BULLETIN.

99192
99193

$500

500

99194

$500

99195

S500

SECOND 4 P E R CENT BONDS DUE 1912.
1612967 |
1612968 !

$100 ;
100 I.

1612969

S100 j!

1612970

$100

THIRD 41 PER CENT BONDS DUE 1928.
1701265
1701272
1701273
1701274
1701275
1701276
1701277
1701292
1701296
1701297
1701298
1701303
1701304
1701305
1701306
1701307
1701309
1701310
1701318
1701319
1701322
1701323
1701324
1701325
1701327
1701328
1701329
1701330
1701331
1701332
1701333
1701334
1701336
1701337
1701338
1701339
1701343
1701344
1701346
1701347
1701353
1701354
1701355

S50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50

1701356
1701358
1616148
1616149
1616150
161615*
1616154
1616155
1616156
1616160
1616161
1616162
1616163
1616164
1616165
1616166
1616168
1616169
1616171
1616180
1616181
1616183
1616184
1816185
1616186
1616190
1616193
1616196
1616197
1616198
1616200
1616201
1616202
1616203
1616204
1616205
1616206
1616207
1616208
1616209
1616211
1616212
1616213

$50
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

1616214
1616215
1616216
1616218
1616219
1616222
1616223! j
1616234
1616235
128676
128677
373728
37465
37467
943953
943956
943957
943976
943977

943987
943990
943991
943999
944004
944005

8100
100
100
100
100
100
100
100
100
500
500
500
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000

862

FEDEEAL BESEBVE BULLETIN.

SEPTEMBER 1,

1918.

INFORMAL RULINGS OF THE BOARD.
Below are reproduced letters sent out from
time to time over the signatures of the officers
or members of the Federal Reserve Board
which contain information believed to be of
general interest to Federal Reserve Banks and
member banks of the system:
Warehouse Receipts as Security.
(To a Federal Reserve Agent.)

Referring to your letter of July 23, relative
to warehouse receipts given by a warehousing
company, you are advised that Board's counsel, in a memorandum which has been approved
by the Board, makes the following statement:
" There is no provision of the Federal Reserve
Act requiring notes to be secured by warehouse receipts in order to be eligible for rediscount. The writer evidently has in mind the
question whether such warehouse receipts
would form a sufficient security for drafts
drawn against a member bank in a domestic
transaction and accepted by the bank.
11
The requirements of the Board appear to
have been met in that- a separate corporation
has been created and the receipts are to be
issued by that corporation and not by the
borrower. I would suggest, however, that as
both corporations have practically the same
officers the manager of the warehousing company who executes the receipts should not be
an employee of the borrowing company, as the
Board requires that the receipts sKould be
issued by a company independent of the
borrower and this requirement should be met
in substance as well as in form."
JULY 29,

1918.
(To an individual.)

Your letter of August 9, addressed to the
counsel of the Board, has been duly considered
by the Board as well as by counsel.
You refer to the informal ruling of June 10,
1918, which requires that the lessee of warehouse premises be independent of the borrower, and that he have entire control and
custody of the goods; that the borrower must

not have access to the premises except with
permission of the lessee, and that he shall exercise no control of any sort over the goods
against which warehouse receipts are issued.
You state that one of your borrowers, a corporation, proposes to set aside part of its readily
marketable goods and materials not necessary
for immediate purposes in a warehouse controlled by a separate corporation engaged solely
in the warehouse business, the entire stock of
which is owned by the prospective borrower,
and that it is your desire to use warehouse receipts issued to the borrower as security for
drafts drawn against you and accepted by you
in accordance with section 13 of the Federal
Reserve Act. You ask if the conditions of the
Board's ruling will be regarded as having been
complied with if you should place a custodian
or representative of the
Company on
the premises of the warehouse "who shall have
access to the goods, thereby eliminating the
borrower from exercising any control whatever, through stock ownership, over the goods
against which warehouse receipts are issued/'
In the opinion of the Board, the mere fact
that a representative of the accepting bank
shall have "access" to the goods would not
necessarily make the warehouse receipts eligible. If, however, a representative of the
Company, the acceptor, is given control of the warehouse in which the goods are
stored under a proper resolution of the directors
of the warehouse corporation, the fact that the
stock of the corporation is owned by the borrower should not prevent the
Company
from accepting the draft under the circumstances recited.
The agreement between the directors of the
warehouse corporation and the representative
of the
Company, however, should provide that if, by any future action of the stockholders or directors of the warehouse corporation, an attempt is made to exercise control
over the warehouse, the representative of the
acceptor should have the right to remove the
goods and to place them in storage elsewhere
at the expense of the warehouse corporation.
AUGUST 13,

1918.

S*;rTJ3MBEK 1,1918.

FEDERAL RESERVE BULLETIN.

Limitations on loans bj member banks.
(To an individual.)

Receipt is acknowledged of your letter of
July 26, in which you submit the following
questions for the consideration of the Board:
(1) Is it allowable for a member bank to purchase from one or more customers their trade
acceptances, whether or not secured by negotiable warehouse receipts or shipping documents, if drawee's name on aggregate amount
of drafts of several drawers represents more
than 10 per cent of combined capital and surplus of member bank ?
(2) May a member bank loan to a party on
single-name paper secured by negotiable documents covering staple or readily marketable
merchandise to an aggregate amount of more
than 10 per cent of the combined capital and
surplus of the member bank ?
In reply you are advised that—
(1) The law does not require a trade acceptance to be secured by negotiable warehouse
receipts or shipping documents when purchased or discounted by a national bank. The
Federal Reserve act, however, requires drafts
or bills drawn against a national bank to be so
secured if such drafts or bills are accepted by
the national bank in a domestic transaction.
The acceptance of a draft should not, of course,
be confused with the discount of an acceptance.
If trade acceptances offered your bank are
actually owned by the person offering them for
discount, they would not be subject to the 10
per cent limitation imposed by section 5200.
Of course, if they are discounted for the drawee
and not for the bona fide holder they would be
subject to the 10 per cent limit referred to.
(2) In answer to your second inquiry, a national bank is not permitted by law to lend on
single-name paper, secured or unsecured, to
anyone in an amount greater than 10 per cent
of its capital and surplus. A State bank or

863

trust company which is a member of the
Federal Reserve system may lend in excess of
this amount, provided its State law permits,
but a Federal Reserve bank is not permitted to
rediscount the paper of a customer of such
member bank if the customer is indebted to the
member bank in an amount in excess of 10 per
cent of the capital and surplus of the member
bank.
JULY 30.

1918.

Discount of paper secured by Government bonds.
(To a Federal Reserve bank.)

I have your letter of the 24th instant, inclosing correspondence, which I have read and
return herewith as requested.
The question raised in your letter was discussed at the meeting of the Board this morning, and I am authorized to say that it is the
opinion of the Board that a member bank acting through another member bank may obtain
the discount of its paper secured by Government bonds for a period as long as 90 days,
although a member bank acting alone may not
tender its collateral note to the Federal Reserve
bank which runs for more than 15 days. Of
course, it may be proper, in this connection, to
consider questions of fact—whether the transaction is in good faith or whether the two banks
exchange courtesies merely for the purpose of
having their notes discounted for 90 days instead of 15 days, but in case a country bank
which has regular dealings with a large bank in
a city sends its note secured by Government
bonds to that bank, which in turn wishes to rediscount the paper with a Federal Reserve
bank, the Board would regard the note as
eligible, provided the time of maturity was
not longer than 90 days.
JULY 25,

1918.

864

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1918.

RULINGS OF THE DIVISION OF FOREIGN EXCHANGE.
Following are formal and informal rulings
made by the Federal Reserve Board, Division of Foreign Exchange, under Executive
order of January 26, 1918, and subsequent
to the issuance of "Instructions to dealers"
of January 26, 1918, The terms "person,"
"dealer," "correspondent," "customer," and
such other terms as have a special meaning, are
used in these rulings as prescribed in the
Executive order above.
Securities.
(Reprinted from "Instructions to Dealers."

Any person desiring to make delivery of securities
in any manner which necessitates the transportation of
such securities into or out of the United States must
file a declaration of nonenemy interests, as required
by Executive Order of the President, and must obtain
a certificate from the Federal Reserve Board, through
a Federal Reserve Bank, that such declaration has been
filed.
Securities unaccompanied by such certificate will
not be permitted by customs officials to be brought into
the United States, or carried out of the United States.
Upon receipt of advice of shipment of securities to this
country from abroad, dealers holding declarations may
apply for certificates for deposit with the customs officials
on arrival.

dealers, or where drafts drawn upon importers are presented to them through Class A dealers, or remittances are
made by the importers through exchange which goes
through Class A dealers, we have not required registration
certificates.
Again, many exporters draw say 75 or 80 per cent against
shipments, which drafts go through Class A dealers, and
later either draw for the balance in the same manner or
receive remittance from their customer, which again must
come through a dealer. In such cases where the balance
of the value of the goods over the first drawing is not allowed
to accumulate with the balances against other shipments,
and what might be called running book accounts are not
opened, registration is not required.
Where exporters and importers carry balances small or
large in foreign banks, or with foreign customers against
which they draw their checks, or where remittances are
made periodically over intervals of three or six months,
Class B certificates should be required.
Exporters and importers who carry accounts in this
country for their foreign customers that represent what
might be called delayed payments against imports,
but at the same time that are available for transfer, or
against which drafts may be drawn, should take out Class C
certificates.
The business of some exporters and importers is so
handled as to make it necessary for them to take out both
Class B and Class C registration certificates, but there are
few, if any , whose business has been of a kind to necessitate
their registering under Class A.

Canadian bank declarations.
APRIL 9, 1918.
The Division of Foreign Exchange of the Federal ReNew
accounts.
serve Board is in receipt of declarations from the head
New merchandise accounts for current shipment with
offices of all Canadian branch banks in Canada so drawn as
or for foreign connections satisfactory to the War Trade
to cover all of their branches.
Board may be opened without permission until otherMARCH 20,1918.
wise instructed. No merchandise for foreign account
Form F. E. No. 113.
which is to be stored or warehoused, either in the United
In connection with your inquiry concerning form F. E. States or in foreign countries, other than that of the purNo. 113, in general, it is desired more particularly to obtain chaser, for shipment after the war, or at some definite or
positive information that securities have not been enemy indefinite future period, can be sold without first obtainowned since February 3, 1917. When received once in ing permission from the Division of Foreign Exchange,
connection with a block of securities it is not necessary to Federal Reserve Board.
take it again while the same party owns them.
Class A dealers should obtain permission from the
MARCH 28, 1918.
division before opening new accounts with or for foreign
correspondents, except that when bankers have new
Registration certificates from exporters and importers.
Where no accounts are maintained abroad, and no ac- business offered them it is in order for them to accept it,
counts are carried in this country for foreign account, and providing form F. E. 114 is forwarded at once for signature
when drafts against exports are handled through Class A and returned under notice to the Division of Foreign

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

865

Exchange, unless they have reason to believe that the filed with the Division of Foreign Exchange, Federal
institution is an enemy or ally of enemy, or unable for Reserve Board, 15 Wall Street, New York City. Dealers
any other reason to sign the declaration.
may file confirmations either by messenger or post as best
MAY 2, 1938.
suits their convenience.
Each confirmation must be an exact copy of the cable
Credit to foreign correspondents.
in question, must be written on one sheet of paper only,
Credits to foreign correspondents from persons within the and contain no other matter except such as refers to the
United States.—Dealers having the accounts of foreign given cable. Such confirmations must be inclosed in an
correspondents on their books are prohibited from accept- unsealed envelope, properly addressed and stamped ready
ing credits to such accounts which are not accompanied for mailing, and in this envelope no other mail is to be
by the name of the party making the original request that inclosed without special permission from the Division of
the deposit be made, and by the name of the party to Foreign Exchange.
whom the foreign institution receiving the credit is to pay
If dealers desire to forward more than one copy of a cable
the funds and for whose account such payment is made, confirmation by different routes or by separate steamers
and the purpose of the deposit must also be stated. It is or otherwise, such extra copy or copies must be delivered
important that this order be noted by all bankers, institu- with the original, and each copy must be inclosed in an
tions, individuals, or others in the United States, without unsealed envelope, properly addressed and stamped ready
regard to whether they are dealers or not. This informa- for mailing, and each copy must be stamped "Duplicate,
tion will be required in addition to the regular customers' triplicate," or otherewise, as the case may be, together
statement.
with the routing or specific steamer desired, and in every
If, for instance, a firm in Peoria, 111., is requested by an such envelope no other mail should be inclosed. In the
individual to pay a bank in New York $1,000 for account event that it becomes necessary to forward an additional
of a bank in Sweden, the firm must obtain from such confirmation at a later date than the delivery of the
individual the required information, which it must deliver original with its duplicate or other copies, permission
to its banker in Peoria through whom it wishes to make must be first obtained from the Division of Foreign
the transfer, and such banker, if he carries out the operation Exchange.
through his Chicago or New York correspondent, must
Incoming confirmations.—All dealers are prohibited
forward the information with the instructions, which must from acting upon confirmations of cablegrams covering
follow the deposit to the New York bank which is to credit the transfer of funds or concerning other financial operathe account of the Swedish bank. All such information tions which may be received by them from without the
must be on a separate sheet of paper, which must be ini- United States wherein the cable referred to has never been
tialed by every institution through which it goes, and that delivered to them, without first obtaining permission
must be delivered to the Division of Foreign Exchange from the Division of Foreign Exchange of the Federal
of the Federal Reserve Board, 15 Wall Street, New York, Reserve Board.
by the banker crediting the item to the foreign institution.
JUNE 11, 1918.
Credits to foreign correspondents from persons without the
United States.—Deposits received for the credit of dollar Customers' statements.
There has been some doubt on the part of "dealers"
accounts of foreign correspondents on the books of American "dealers " from "persons " as denned in the Executive as to just when they should require Customers' stateorder, outside of the United States, must bear the same ments. This has been particularly true 7 as between
information, and dealers should notify their foreign corre- dealers trading with each other. Customers statements,
spondents that when arranging to have deposits made in which are merely declarations of nonenemy interest,
this country for their account that such information must which have to be made by "persons " in this country having
foreign exchange operations with dealers, must be taken
follow the deposit.
by every dealer from every person who is not a dealer
JUNE 11, 1918.
when any foreign exchange service is being extended.
If such deposits are known to represent exchange trans- In other words, the dealer having contact with the person
actions between recognized foreign bankers in the regular who is not a dealer is the party who must take the Cuscourse of business, and are accompanied in each case by tomers' statement. Such statements do not follow the
the name of the bank or banks by whose order as well as items, but must be filed by the dealer receiving them,
for whose account the payment is to be made, the purpose subject to the call of the Federal Reserve Board at its
of the deposit need not be stated.
discretion.
AUGUST 22, 1918.
As dealers receiving items from other dealers have no
means of determining whether such persons are dealers,
Confirmation of cablegrams.
Outgoing confirmations.—Confirmations of all cables authority has been granted by the Board to accept the
covering transfer of funds or concerning other financial censorship stamp of dealers upon letters of advice or
operations sent by dealers to correspondents and to all inclosure from one dealer to another as being sufficient
other persons outside of the United States must be first evidence that a Customers' statement has been obtained.

866

FEDERAL EESEEVE BULLETIN.

Every dealer is responsible to the Federal Reserve
Board for the taking of Customers' statements and not to
other dealers through whom he may he passing transactions, except that any dealer who has reason to believe
that any transaction may be for account or benefit of an
enemy or ally of enemy may make inquiry of the dealer
who places the transaction through him. If satisfactory
answer is not received the Division of Foreign Exchange
of the Federal Reserve Board should then be notified
immediately."
JUNE 11,

1918.

Until otherwise instructed Customers' statements are
not being required in connection with drafts drawn by
foreign correspondents on American dealers, such items
being covered by Form F. E. 114, which has to be signed
by the foreign correspondent.
JULY 29,

1918.

Declarations on coupons and dividends.
The censorship stamp may be used by one dealer to
another as a means of identification in connection with
items received from abroad. The responsibility for obtaining declarations from foreign correspondents, and
from holders of securities, and in connection with coupon
and dividend payments, has been placed entirely upon
the dealers receiving1 the items from, the foreign countries.
It is not the duty of payers of dividends, or coupons, nor
of others in the United States who receive such items
from dealers, to require declarations. If, however, they
have information which leads them to believe that a
transaction is for enemy account, it is their duty to withhold payment and notify the Division of Foreign Exchange.
JUNE 11,

1918.

Remittances to American Expeditionary Forces abroad.
Answering your letter of the 4th instant, until otherwise instructed, declarations need not be taken from
members of the American Expeditionary Forces abroad.
JUNE 11,

1918.

Trading in foreign and domestic gold coin.
It has been called to our attention that persons intending to go abroad have been paying a premium for foreign
gold coins, which they have expected to take with them
for use in foreign countries.
Under present regulations gold coins can not be taken
out of the country by travelers without first obtaining a
license from a Federal Reserve Bank, and such licenses
are being granted at present in exceptional cases only
where the need for gold is clearly established.
Under these conditions the sale of gold to travelers at a
premium is not justified, unless the conditions are fully
understood by them. Until otherwise instructed, therefore, when selling foreign gold coins, you are requested to
have a printed or typewritten memorandum shown to the
purchaser and given to him with the gold, worded as
follows:.
Foreign or domestic gold coin or gold bars or bullion
can not be shipped out of the United States nor carried out
on the person or in the baggage of travelers, unless a license
is obtained from a Federal Reserve Bank. At present

SEPTEMBER 1,1918.

such licenses are not being issued except in special cases,
where the need for gold is clearly established.
For your own protection, it is suggested that customers
purchasing foreign gold coin of you be required to acknowledge, over signature, on some form that you may retain in
your office, that they are familiar with the regulations.
This is merely mentioned with the thought that it might
be helpful to you should a customer destroy his slip when
brought before a customs officer and deny havino: received it.
JULY 29,

1918.

Prisoners of war.
The definition of "enemy" under the trading-with-theenemy act has been extended to include prisoners of war
held in Allied countries, and remittances can not be made
unless a license is first obtained from the War Trade Board.
For the present the War Trade Board is not issuing any
licenses for such remittances.
JULY 29,

1918.

Blanket customers' statements.
Until otherwise instructed, dealers in foreign exchange
may accept blanket customers' statements covering foreign exchange transactions from month to month, provided
any dealer accepting such blanket statement realizes that
it is his responsibility to see that it does not become a dead
letter and that such statements are only taken from thoroughly American concerns, and, further, that blanket
statements can not cover any operations for employees or
others than the particular "person" as defined under the
Executive order of January 25, signing such blanket statement. Blanket statements must be renewed each month,
which may be done through the filing of a new blanket
customers' statement or through additional dated signatures, extending expiring declarations.
In connection with the above authorization, the following form should be used:
"Whereas under Executive order of the President
dated January 26,1918, all transactions in foreign exchange
must conform to the requirements of that order, and customers buying or selling such exchange must in each case
make the "declaration of nonenemy interest therein prescribed; and
"Whereas the Federal Reserve Board has authorized
dealers in foreign exchange to accept on their own responsibility declarations covering foreign exchange transactions from month to month under certain conditions:
"Now, therefore, I/we do hereby expressly declare
that no enemy or ally of enemy of the United States is,
or shall be, directly or indirectly, interested in any transaction that may be handled for me by you, and that any
check or draft or other item which you may handle for
me or for my account, or which shall bear my signature
or indorsement during the 30 days following the execution of this declaration, may be treated as if accompanied
by the declaration prescribed and required by Executive
order of the President dated January 26, and I hereby
undertake and agree to assume the same responsibility
and to be bound to the same extent that I would be if I
executed and delivered the declaration or declarations
required under the said Executive order in each and
every case."
AUGUST 10,

1918.

SEPTEMBEB 1,

1918.

FEDERAL RESERVE BULLETIN.

867

LAW DEPARTMENT.
This question is one which involves the appliThe following opinions of counsel have been
authorized for publication by the Board since cation of the law of negotiable instruments.
the last edition of the BULLETIN:
Under section 5136, Revised Statutes, which
prescribes
the corporate powers of national
Notes and bills rediscounted.
banks,
such
banks are authorized, among other
A note or bill rediscounted in good faith by a member
things,
to
discount
and "negotiate " promissory
bank which is no longer owned or held by the bank need
not be included as a liability of the maker to the bank, notes.
within the meaning of section 5200, Revised Statutes.
Under the Negotiable Instruments Law
Notes or bills rediscounted under an agreement to repur- (Sec. 30) "'an instrument is negotiated when
chase, or which are merely credited to the account of the
it is transferred from one person to another in
bank offering them for rediscount, are subject to the limitasuch
manner as to constitute the transferee the
tions of section 5200.
holder thereof."
AUGUST 7, 1918.
Under section 5200, Revised Statutes, the
SIR: In an opinion approved by the Board liabilities to a national bank of an}^ one person
and published on page 638 of the July, 1918, for borrowed money are limited to an amount
BULLETIN, the question was considered whether
which must not exceed 10 per cent of the
a note rediscounted by a member bank should capital and surplus of the lending bank.
thereafter be treated as a liability of the maker
Under authority of these two sections it is
to the bank for borrowed money. In that clear that a national bank may discount the
opinion the following statement appears:
note of a customer which does not exceed in
' l This question was considered by the Board amount 10 per cent of its capital and surplus
and by the office of the Comptroller in connection with the limitations prescribed by section and may subsequently negotiate or sell this
5200, Revised Statutes, on liabilities to a note to a bona fide purchaser for value without
national bank of any one person, firm, or cor- notice.
poration.
The question involved is whether the maker
"The conclusion was reached in that case of the note continues liable to the bank after
that notes which have been rediscounted by a
national bank and which are no longer owned the note has been negotiated and is owned by
or held by the bank, should not be included as a a bona fide holder in due course.
liability of the maker to the bank for borrowed
Section 51 of the Negotiable Instruments
money within the meaning of section 5200."
Law provides that "the holder of a negotiable
Exception has been taken to this conclusion instrument may sue thereon in his own name
by some of the officers of the Federal Reserve and payment to him in due course discharges
Banks, and by certain national bank examiners, the debt."
It is clear, therefore, that when such a note
and there seems to be some apprehension on
their part that this ruling of the Board may be is rediscounted by a bank its rights are transused by member banks for the purpose of evad- ferred to the holder in due course and the
ing the limitations prescribed by section 5200. maker becomes liable to the holder. It necesYou have asked this office to give further sarily follows that the maker's liability to the
consideration to the question involved and to bank ceases. If this were not true the maker
suggest what, if any, action the Board or the might obtain a discharge of his liability on the
Comptroller should take to prevent excessive note by paying the bank even after it had
loans from being made under authority of this transferred its rights by indorsement of the
note to a bona fide holder.
ruling.

868

FEDERAL RESERVE BULLETIN.

To hold that the maker of a note continues
liable to a national bank for money borrowed,
after the bank has rediscounted the note,
would be equivalent to holding that a negotiable promissory note loses its negotiability
when discounted for the maker by a national
bank. There is clearly no legal justification
for such a conclusion.
It has been suggested that the position taken
in the opinion under consideration constitutes
a radical departure from previous rulings of
the Comptroller's office.
It is true that for many years it was customary for national banks to continue to carry
as assets notes which had been rediscounted.
This practice, which necessarily resulted in a
duplication of the assets of national banks, has,
however, been discontinued and while the reports of condition now show the amount of bills
or notes rediscounted these amounts are not included in the total assets of the bank.
It necessarily follows that unless a note
remains an asset of a bank after it has been
rediscounted it does not constitute a liability
of the maker to the bank but becomes a liability of the maker to the bona fide holder.
This principle has been consistently recognized by the Comptroller's office in the administration of the estates of failed banks. The
maker of a note held by a failed bank is ordinarily entitled to offset his deposit balance with
the bank against the note but in the administration of receiverships the Comptroller has
consistently declined to allow the maker of a
note to offset his deposit balance if the note is
not in the hands of the receiver but is held by
some other bank under rediscount on the
ground that he may thereby obtain preference
over other creditors to the extent of the offset
if the estate of the bank is insufficient to pay
the depositors in full. This question was involved in the case of United States Bank v.
McNair, 116 N. C. 550; 21 S. E. 389. In that
case the maker of the note was endeavoring to
have his liability treated as a liability to the
bank in order to obtain the benefit of an offset,
but the court disallowed his claim.
With all due deference to the opinion of
those who have taken exception to this ruling

SEPTEMBER 1,1918.

of the Board, the fear that it may be successfully used by banks to evade the limitations of
section 5200 seems to be very much exaggerated.
So long as the customer's paper is well secured or is of such intrinsic value as to find a
ready market with other banks the contingent
liability incurred by the indorsing bank is not
of serious consequence. On the other hand, if
the paper offered for rediscount is not intrinsically valuable and the offering bank is merely
seeking to evade the limitations of section 5200,
it is not likely that other banks would feel
disposed to rediscount such paper. They
would in such case be much more likely to
require the borrowing bank to execute its
note secured by its customer's note with a
proper margin, in which case the customer's
paper would remain the property of the borrowing bank and would have to be included in
the liabilities of the makers to the borrowing
bank. If the borrowing bank, in order to
evade the limitations of section 5200, should
enter into an agreement with its correspondent
to repurchase rediscounted paper before maturity, or to leave the proceeds of the rediscount on deposit with it, the transaction would
not have been entered into in good faith and
an examiner or officers of a Federal Reserve
Bank would be justified in treating such paper
as subject to the limitations of section 5200.
As stated by Daniel on Negotiable Instruments (Section 779-b,l Volume 1, Sixth Edition)—
" Under several provisions of the statute
(Negotiable Instruments Law), it is held that
merely giving the transferrer credit does not
constitute the transferee a holder in due
course. Thus when a bank simply discounts
a note and credits the amount thereof on the
indorsees account, without paying to him any
value for it, such bank is not a purchaser for
value or a holder in due course as defined by
the statute." (Albany County Bank v. People's
Co-operative Ice Co., 86 N. Y. S. 772, 92.)
If, however, a bank negotiates a note of its
customer in good faith in order to obtain additional funds to take care of the needs of other
customers, there would seem to be no justification for treating the liability of its customer

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

to the bona fide holder of the note as a liability
to the bank itself. The fact that the bank is
contingently liable as indorser and may be
called upon to pay the note if the maker defaults should very properly be taken into consideration in determining liabilities that may
be incurred by the bank under section 5202,
but should not be taken into consideration in
determining the liabilities that may be incurred
to the bank under section 5200.
The Board has heretofore ruled that a
national bank may lend to one customer an
amount equal to 10 per cent of its capital and
surplus and may thereafter accept drafts of the
same customer under authority of the Federal
Reserve Act. In this case the bank assumes a
direct and not a contingent liability on the
drafts accepted and is the primary obligor.
This fact, however, does not justify the Board
in requiring banks to treat this liability assumed
by the bank as a liability of its customer to the
bank for borrowed money within the meaning
of section 5200.
If the Board feels that it is necessary to take
any affirmative action to prevent its ruling
from being used by member banks as a means
of evading the limitations of section 5200, it is
suggested that it might amend section III of
Regulation A, series of 1917, to read substantially as follows:
" i l l . APPLICATIONS FOU REDISCOUNT.

and surplus of the applicant bank, such certificate shall show (a) the amount held in its own
portfolio, (b) the amount rediscounted with
other banks, (c) the amount and character of
security held, (d) whether or not the member
bank is under agreement to repurchase at or
before maturity notes, drafts, and bills rediscounted, (e) whether or not it has received
the actual proceeds of notes, drafts, and bills
rediscounted or merely a book credit therefor."
With this regulation in force the Federal
Reserve Bank would be able to determine the
amount of secured and unsecured paper discounted by the applicant bank for any one
borrower and rediscounted with other banks.
If properly secured, the contingent liability of
the member bank on the paper rediscounted in
good faith would constitute merely a nominal
liability. On the other hand, if the intrinsic
value of the paper rediscounted appeared to
be such as to make it more than probable that
the indorsing member bank would be called
upon to pay it, the Federal Reserve Bank
could in its discretion determine whether such
paper though technically eligible should be
accepted for rediscount hj the Federal Reserve Bank.
The Comptroller of the Currency might in
like manner require national banks to show in
their reports of condition information called
for in the regulation of the Board as amended
in accordance with the foregoing suggestion.
The national bank examiner might likewise
require the officers of the national bank to
certify on oath whether the bank is under
agreement to repurchase rediscounted paper
and whether it has received the proceeds of
such paper or merely a book credit and, for
reasons hereinbefore stated, might treat all
paper rediscounted under an agreement to
repurchase or for which merely book credits
have been received, as subject to the limitations
of section 5200.
Respectfully,
M. C. ELLIOTT, Counsel.

"All applications for the rediscount of notes,
drafts, or bills of exchange, must contain a
certificate of the member bank in form to be
prescribed by the Federal Reserve Bank, that
to the best of the knowledge and belief of the
officers of the applicant bank, such notes, drafts,
or bills of exchange have been issued for one or
more of the purposes mentioned in 2 (a); such
certificate shall also show whether the notes,
drafts, or bills discounted for any one borrower
whose paper is offered for rediscount, exceeds
10 percent of the capital and surplus of the
applicant bank, including notes, drafts, or
bills held in its own portfolio or under rediscount with other banks.
"If the aggregate of such notes, drafts, or To Hon. W. P. G. HARDING,
bills does exceed 10 per cent of the capital
Governor7 Federal Reserve Board.

869

870

FEDERAL RESERVE BULLETIN.

Trade acceptance providing for extension of time.
A note or draft containing a provision for an extension
of time should not be approved for general use by the
Federal Reserve Board.
JULY 25, 1918.

SIR: The accompanying form of trade
acceptance was submitted to this office for an
opinion as to its negotiability. This form contains the following language:
"Demand, notice of default, and protest is
waived by all parties, guarantors, and indorsers, who also agree to extension of time by
holder without notice."
The question arises whether the provision
for an extension of time renders the time of
payment uncertain and the note nonnegotiable.
On this question Crawford on Negotiable Instruments (p. 21) says:
"As to whether the negotiable character of
the paper is destroyed by a stipulation to the
effect that the indorsees consent that the time
of payment ma}?- be extended, the courts are
not agreed. On the one hand, it is held that
such a stipulation makes the time of payment
uncertain. (Koseville State Bank v. Heslet, 84
Kans., 314; Union Stock Yards Nat. Bank v.
Bolan, 14 Idaho, 87.) On the other hand, it is
held that as such a stipulation neither confers upon the maker the right to demand an
extension, nor imposes upon the payee or indorsee any duty to grant one, it can not have
such effect. (Longmont Nat. Bank v. Lonkonen, 53 Colo., 489; Farmer v. Bank of Grea-ttinger, 130 Iowa, 469; De Groat v. Focht, 37
Okfa., 267; First Nat. Bank of Pomeroy v. Buttery, 17 N. D. 326; Stitzel v. 'Miller, 157 111.
App. 390.)"
Corpus Juris, vol. 8, page 140, savs"A note may provide for a 'definite' extension or renewal after maturity without making
it nonnegotiable. However, where the agreement for extension is not for a fixed time, the
decisions are more conflicting. Thus it is held
in Iowa that an agreement in a note that the
holder 'may extend the time of payment
thereof from time to time indefinitely as he or
they may see fit' renders it nonnegotiable; and
this rule prevails in Indiana, in Michigan, and
in the Federal courts. In Wisconsin it is held
that an agreement that the note is 'to be
extended if desired by; makers' is too indefinite
to have any legal significance. These decisions do not necessarily conflict with rulings

SEPTEMBER 1,1918.

that provisions in a note waiving all defenses
on the ground of extensions of time do not
affect negotiability, although even in such a
case the contrary is held in Idaho, in Indiana,
and in Kansas. Other decisions hold that the
note is negotiable where the extension of time
provided for is ' after' maturity; and some of
the decisions draw a distinction between provisions which authorize an extension of the
time of payment ' after' maturity and those
which authorize an extension of time 'before'
maturity, it being held that authority to extend the time, where it can be exercised only
after maturity, does not affect negotiability,
but, if the authority is to extend 'before' or
'before or after' maturity, the instrument is
not negotiable."
The doctrine of the Federal courts referred
to in the above quotation from Corpus Juris
was stated in the decision by the circuit court
for the district of Indiana in the case of Coffin
v. Spencer (39 Fed., 262). In that case it was
held that a promissory note is not negotiable
if it contains the stipulation that "the payee
or holder of this note may renew or extend the
time of payment of the same from time to time
as often as required without notice and without prejudice to the rights of such payee or
holder to enforce payment against the makers,
sureties, and indorsers, and each of them, parties hereto, at any time when the same may be
due and payable. In discussing this question,
the court says:
"Every successive taker of the paper is, of
course, bound to take notice of this stipulation,
and, instead of looking only to the face of the
instrument for the time of its maturity, as in
the case of commercial paper he must, is put
upon inquiry whether or not any agreement
for a renewal or extension of time has been
made by his proposed assignor or by any previous holder. 'A bill of exchange always implies a personal general credit, not limited or
applicable to particular circumstances and
events, which can not be known to the holder
of the bill in the general course of negotiation.'
Story, Bills, sec. 46. And in Hartley v. Wilkinson (4 Maule, sec. 25), Lord Ellenborough
says: 'How can it be said that this note is
a negotiable instrument for the payment of
money absolutely, when it is apparent that the
party taking it must inquire into an extrinsic
fact in order to ascertain if it be payable.' See
also Insurance Co. v. Bill, 31 Conn., 534."

EEDEEAL RESERVE BULLETIN.

SEPTEMBER 1,1918.

The contrary conclusion was reached by the
Supreme Court of Texas in the case of National
Bank of Commerce v. Kenney (83 S. W., 368),
in which the court said that a note containing a
provision that the makers and indorsers " severally waive protest, demand and notice of
protest, and nonpayment in case this note is
not paid at maturity, and agree to all extensions and partial payments before or after
maturity without prejudice to holder" does
not thereby render it nonnegotiable on the
ground that the time of payment is uncertain.
Chief Justice Games stated as his reasons for
this conclusion that there was nothing in the
stipulation which gave anyone the right to
demand the extension of the time of payment,
and the holder could demand payment at maturity, and that if the holder has the absolute
right to demand payment at a certain day the
note is negotiable.
It thus appears that the decisions of the
courts are not uniform on this question, and,
under the circumstances, the Board should not
approve for general use a form containing the
provision above quoted.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. W. P. G. HARDING,

Governor} Federal Reserve Board.
Trade acceptance providing for discount if paid at certain time before maturity.
A trade acceptance providing for a fixed discount, if
paid at a certain time before maturity, should not be
approved for general use by the Federal Reserve Board.
AUGUST 1,

1918.

871

''A trade acceptance which consists of an
order to pay a certain amount, which is the
amount of the debt minus a discount for prompt
payment at maturity, or, if not paid at maturity, to pay a greater amount, which is the
amount of the debt without any discount, is
an order to pay a sum certain and is negotiable."
The principle involved in the two cases is
somewhat analogous, the only difference being
that in one case the discount is allowed if payment is made at maturity, while in the other
the discount is allowed if maturity is anticipated. In both cases the test of negotiability,
according to the text writers on the Negotiable
Instruments Law, is whether or not the sum
payable can be ascertained from the face of
the instrument, and both forms, in the opinion
of this office, meet this condition.
It has been held in Minnesota, Nebraska,
Texas, and Canada that a promise to pay a
certain sum with a provision that a fixed discount is allowed if paid before maturity, or
before a certain date, is negotiable, although
the contrary has been held in Michigan, Oklahoma, South Dakota, and Tennessee.
The reasoning of the courts in the cases sustaining the negotiability of such instruments
seems to be more consistent with the general
principles incorporated in the Negotiable
Instruments Law, and I fully agree that such
an instrument should be held by the courts to
be negotiable. In view, however, of the lack
of uniformity of the decisions of the courts on
this point the Board should not approve for
general use an acceptance containing this
condition, since its ruling would, of course,
have no binding effect on the State courts.
Respectfully,
M. C. ELLIOTT, Counsel.

SIR: In the accompanying letter the Board is
asked for a ruling on the negotiability of a
trade acceptance containing the following
To Hon. W. P. G. HARDING,
provision: "If this acceptance is paid on or
Governor, Federal Reserve Board.
before
a discount of 5 per cent will be
77
allowed.
In an opinion of this office, approved by the Drafts secured by cattle notes.
Board and published on page 200 of the March, Member banks are not authorized to accept drafts of a
1918, FEDERAL RESERVE BULLETIN, the

clusion was reached that—

con- cattle-loan company secured by notes of the owner of the
cattle, although such notes may be secured by a chattel

872

FEDEEAL RESERVE BULLETIN.

mortgage executed by the owner of the cattle' to the
cattle-loan company and the notes and chattel mortgage
accompany the draft at the time of acceptance.
JULY 23,

1918.

SIR: In the accompanying letter the following question is submitted to the Board for
a ruling:
"Is it lawful for a member bank to accept
the draft of a cattle-loan company secured by
notes of the owner of cattle who has pledged
the cattle under a chattel mortgage to the
cattle-loan company as security for the notes,
providing the notes and chattel mortgage
accompany the draft at the time of its
acceptance?"
Section 13 of the Federal Reserve Act provides in part that—
"Any member bank may accept drafts or
bills of exchange which grow out of transactions involving the domestic shipment of
goods provided shipping documents conveying
or securing title are attached at the time of
acceptance; or which are secured at the time
of acceptance by a warehouse receipt or other
such document conveying or securing title
covering readily marketable staples."
The Board has heretofore ruled that a
chattel mortgage is not a document similar to
a warehouse receipt and that member banks
may not accept drafts secured by a chattel
mortgage. A warehouse receipt acceptable as
security for such drafts must, under the regu-

SEPTEMBER 1, 1918.

lations of the Board, be issued by a person
independent of the borrower. A chattel mortgage does not ineet this requirement. Applying the same principles to the present case it is
obvious that a note of the borrower secured by
a chattel mortgage could not be considered as
a document similar to a warehouse receipt.
The readily marketable staple securing indirectly the acceptance in question remains in
the possession of the borrower and, in the
opinion of this office, a member bank is not
authorized to accept drafts under the circumstances recited.
Respectfully,
M. C. ELLIOTT, Counsel.
To Hon. W. P. G. HARDING,

Governor Federal Reserve Board.
Liability of Railroad Administration for damages on
bills of lading signed by its agents.

In answer to an inquiry submitted by Gov.
Harding, the general counsel for the United
States Railroad Administration, through the
Director of Finance and Purchases, has advised
the Federal Reserve Board that "the Railroad
Administration is liable for damages on bills of
lading signed by its duly authorized agents
precisely to the same extent as the railroads
were liable prior to Federal control.77

SUMMARY OF BUSINESS
District.
No. 1—Boston

General
business.
Good

Crop condition. indusfte of the district.
Satisfactory

No. 2—New York.. Moderately ac- Favorable..
tive; prices |
firmly main-1
tained and I
collections j
good.
I
No. 3—Philadel- Good
phia.

I Good

No. 4—Cleveland...

I Favorable..

CONDITIONS, AUGUST 23, 1918.

Busy

Foreign trade.
! Restricted

| Very busy.
Very active

Good

No. 7—Chicago

Satisfactory. . Good

No. S—St. Louis..,! Good

Excellent

i Fair

Increase..

Inactive

Increase..

Acute scarcity.

Shortage.

Stationary

Firm

Post office receipts in- Fair distribution;
some unrest.
crease.

, Fair.

t
w

Harvest returns
good.

.do..

Slow.

Steady

No. 10—Kansas City

Fair

Limited-

Firm..

Increase in postal re- Good demand.
ceipts.
No change.

Labor very scarce.
Improved.

Fairly good...\ Unsatisfactory.. Mainly agricultural and Little building of anv Not heavy, except Firm, with some ! Post odlce receipts in- Heavy demand for
creased 84 per cent.
all classes of
this interest not favorkind in district. "
cotton just betendency
to
labor.
able.
ginning to move. \ higher rates.

\ r o. 12—San Fran- | Active.
eisco.
!

Increasing

Stationary

No. 9—Minneapolis |

No. 11—Dallas

CD
I-*
00

>r cent rate i^ost office, July re- Slightly improved
nly mainturns increased 29.61 by regulation.
per cent over 1917;
tained; limited
railroad, gross earnvolume borrowings show increase
ing.
over last year.

but
R e s t r i c t e d by Active demand; 6 Railroad, irregular; Inadequate
post office, volume
somewhat less
pel' cent.
shipping.
large, reflects incomplaint.

Active
j Fair
Light
i
I
| Essential industries at | No change from slugcapacity limited by
gish condition.
supply of labor and
materials.
I Active

Labor conditions.

Scarcely any, except Confined to war Firm..
for war industries.
supplies.
| Quiet

Railroad, post office,
and other receipts.

ly, at 6 per Post office large in- Fully employed.
crease; others mixed

High rate of production Scarcity of materials i Exports from the !
even for Govern- i port of New j
of war essentials being
ment p r o g r a m ,
maintained.
York in<Lcreased !
12 per cent over
which comprises virtually total conJuly, 1917.
struction.

No. 5—Richmond.. Continues very Generally satis- Only limited by sup- 90 to 95 per cent on
factory.
plies and labor".
Government work.
active.

No. 6—Atlanta

Active

Money rates.

Good

Very active

Decreasing except ex- Increasing..
tension of shipyards
and providing nouses
for workers.

Firm, prevailing
rate, 6 per cent
in coast cities;
7 per cent in inland centers.

Settled.

-a
OS

874

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,

1918.

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

Conditions in New England are satisfactory,
business men are moving carefully, trade is increasing, and manufacturers of essential products are extremely busy. The advanced cost
of labor and materials of every kind has restricted all unnecessaiy expansion and building operations, except for Government work,
have been materially reduced. In Boston only
311 permits for new buildings have been issued
during the first seven months of 1918, a decrease of 576 from the corresponding period in
1917, which in turn showed a large decrease
from 1916.
While there is an extraordinary demand for
lumber by the United States Government, retail lumber trade is very quiet, with little pros-'
pect of improvement.
Labor of all kinds is hard to obtain, and mills
have been obliged to reduce their output, although wherever possible they are running
steadily through the hot weather. Civilian
business is being converted to Government
needs in many unusual ways. For example,
carpet and rug mills are now manufacturing
blankets and cotton duck, devoting less than 20
per cent of their capacity to their regular lines.
The money market remains firm and steady,
with the demand larger than the supply. A fixed
rate of 6 per cent has become practically universal for demand money, time loans, and commercial paper, regardless of name or maturities.
Banks, with few exceptions, are caring for none
but their own customers, and it is no longer a
question of rates, but rather of who shall be

given accommodation. The almost invariable
order of preference is, first, Government needs;
second, essential industries; third, less essential. Not only are the requirements of the
Government heavier, but manufacturers are
requiring larger loans than usual to conduct
their business because of the increased cost of
labor, raw material, and fuel. In spite of this,
however, banks have been able to reduce their
borrowing from the Federal Reserve Bank of
Boston during the month, its total loans on
August 17 being $85,873,000, as compared
with $110,672,000 on July 17, a decreaso of
$24,799,000.
The outlook for crops as a whole is quite
good, the recent wet weather having a very
favorable influence. Wheat is being grown in
larger quantities in New England this year,
owing to the prevailing prices, and it is estimated that the yield will be about 900,000
bushels. Fruit crops are generally light, many
trees having been wholly or partially killed by
the severe weather of last winter. While the
season for tobacco has been unfavorable, a
good crop may yet result. Hay remains considerably below normal, with exceptionally
high prices prevailing. Grain crops are in excellent condition.
With woolen and worsted mills on the average devoting over 50 per cent of their machinery to Government orders, some are running 75 and 80 per cent for the Government, as
others are not equipped for that kind of business. Consequently, some mills are producing
practically nothing for civilian needs. Mills
are endeavoring to complete old contracts as
rapidly as possible, but in view of the large
Government requirements are making slow
progress. Practically all the wool held by the
mills is covered by long-standing contracts, and
the Government will not at present allot wool
for civilian purposes. It is estimated that
there is enough manufactured woolen goods

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

875

and clothing in the country to furnish the pub- inventories and, consequently, more capital is
lic for a good while to come if it will conserve required to carry on business.
Building and engineering operations in New
what it already owns and use care in future
England from January 1 to August 14, 1918,
purchases.
The raw wools held in stock by dealers in amounted to $97,893,000, as compared with
April have now nearly all been valued and paid $127,542,000 for the corresponding period of
1917.
for by the Government.
The receipts of the Boston post office for July,
The recent action in appointing a syndicate
to purchase wools in South America for the 1918, show an increase of $171,841.22, or about
allies, and to deal direct with South Africa and 27 per cent more than July, 1917. For the first
Australasia in the purchase of wool, practically 15 days of August, 1918, receipts were about
33J per cent, or $93,384.51, more than for the
eliminates the dealer.
Cotton manufacturers, as a rule, are sold corresponding period of last year.
ahead for the next four or five months, and are Boston Clearing House figures compare as
more favorably disposed toward additional follows:
Government orders than civilian contracts, as
the former insure them priority in fuel, raw
Aug. 17,1918. Aug. 10,1918. Aug. 18,1917.
materials, and possibly labor. Mills are now
Loans and discounts..
$495,295,000 §498,687,000
8463,935,000
being handicapped by the lack of experienced Demand
441,073,000
367,497,000
deposits
428,053,000
16,556,000
35,709,000
Time
deposits
15,604,000
help, this being particularly marked in the Due to banks..
117,911.000
127,456,000
114.136,000
242,135,074
Exchanges
J
300,150)
280,795,461
card and weaving rooms. Recent financial
statements of condition of the mills make excellent showings. In New Bedford, for exam- DISTRICT NO. 2—NEW YORK.
ple, due to the accumulation of earnings for
The very large proportion of the industries
several years past, not one has a dollar of net of the district engaged in war work continues
debt on its plant. In order to facilitate the to be augmented by the conversion of plants
financing of the new cotton crop, the cotton specifically to meet war needs. Production
buying committee of the National Association continues at a high level, though the steadily
of Cotton Manufacturers is strongly advocating crystallizing demands of the Government
the construction of Federal warehouses in large exceed the flow of products. To an increasing
industrial centers in New England, as well as extent the distribution of basic raw materials,
at the principal shipping points in the South. despite large output, is restricted to those
The boot and shoe industry is quiet. Firm industries contributing directly and in major
prices are maintained and production is large. degree to war ends, and for even such collateral
Retail business is good, especially in women's activity as the Government's housing prolines, sales of men's shoes having been reduced gram, calling for structural steel, brick,
somewhat by reduction in buying due to the linseed oil for paint, etc., supplies are so inadetransfer of men to the army. Manufacturers quate than an index of building material prices,
report that collections are good.
prepared by the American Contractor, shows
Retail dry goods business, while spotty, is recent sharp advances as compared with the
on the whole ahead of last year, both in the earlier gradual rise.
amount and value of merchandise sold. ConWith the increase of Government demand for
servation in the matter of deliveries and return steel, estimated for shell steel at probably 15
of merchandise has resulted in much economy. per cent above present shipment rate, and for
Some time ago it was apparent that sales for plate steel at about 12 per cent more than
cash were increasing much faster than on charge recent record outputs, less essential industries
accounts, and this tendency is still evident. are of necessity adjusting themselves to the
Increased cost of merchandise results in larger scarcity of these and ^ ^ ^ fundamental

876

FEDERAL RESERVE BULLETIN.

materials. Only approximately 5 per cent of
the total supply of copper is said to be available
for other than war purposes, at the fixed price
of 26 cents. Tin, pending arrangements with
the British Government in respect to imports,
is at almost prohibitive prices, and canning
industries and oil refiners complain of shortage
of tin plate. Important chemicals, such as
glycerin and nitrates, are diverted from normal use in the manufacture of such articles as
soap and fertilizers, to use in the manufacture
of munitions,
Because of limited imports, the allocation of
rubber for August and September is on a basis
of three-eighths of the consumption during the
corresponding period last year. The small
quantities of incoming hides and skins disposed
of at prices fixed by the Government, 7 to 8 per
cent lower than those prevailing, similarly
permit the filling of only a portion of the needs
of manufacturers of leather goods to satisfy
their active trade demand. Federal regulation,
looking to a 15 to 20 per cent reduction in the
size of newspapers, follows decreased production of newsprint paper.
The textile industry is in an unsettled state,
with somewhat opposite conditions obtaining
as to supply of raw materials in the wool and
cotton trades. A tendency appears to exist
among manufacturers and distributors to await
full issue of Government price regulations before
determining trade policy. With importation
of wool exclusively on Government account,
it seems not improbable that the supply will
be inadequate to permit the manufacture of
pure wool fabrics for civilian trade, but as sufficient stocks of cloth for the near future are
in the hands of merchants they hesitate to contract for mixed goods. Trading in cotton
goods is also light, owing to uncertainty as to
how Government-established prices for certain
classes of goods affect the prices of others, and
to expectations on the part of buyers that prices
will be lower and to preference by the mills for
large scale Government orders for goods of
homogeneous character.
Collections in this district are reported uniformly good.

SEPTEMBER 1,1918.

The shortage of unskilled labor is reported to
be slightly less acute and the turnover diminished, largely as a result of Federal supervision
of employment, but the demand for labor above
the completely unskilled grade, and especially
for men with some training along mechanical
lines, is very keen.
The movement of farm produce to New York
City has been fairly heavy, vegetables and fruit
arriving in moderate quantities and butter and
egg receipts exceeding those in the corresponding period last year. The Bureau of Crop
Estimates reports the peach crop in New York
State as approximately 24 per cent of that of
1917, but the commercial apple crop forecast
for the western part of the State is 5,320,000
barrels, as compared with 1,118,000 last year.
The composite condition of all crops is given as
97.8 per cent of the ten-year average. The
only item in the provisions list, about which
there is at present serious concern as to supply,
is sugar. New York refiners' receipts for the
four-week period ending August 10 declined 36
per cent and meltings declined 34 per cent from
the preceding four-week period. Stocks on
hand August 10 were only 24,101 tons, compared with 127,000 on the corresponding date in
1917, and exports from New York for the year
to date amount only to 20,044 tons compared
with 288,388 tons from January 1 to corresponding date in 1917.
In the four-week period ending August 17,
the number of shares traded in on the stock
exchange was 6,094,357, as compared with
8,867,859 in/the preceding four-week period
and 9,003,324 in the corresponding period of
1917, or approximately the same ratio (twothirds) as the total shares sold to date in 1918,
compared with the total to like date in 1917.
The par value of bond transactions for the fourweek period and the year to date, amounting to
$125,453,000 and $951,022,000, respectively,
are almost double the value of transactions in
the corresponding periods of 1917, but dealings
in United States and foreign Government
bonds represent 88 per cent of the total in the
last four weeks, as compared with 63 per cent
in 1917.

SEPTEMBER 1,19~8.

FEDEBAL RESERVE BULLETIN.

Corporate security issues in July, as compiled by Dow, Jones & Co., were approximately
the same as in July, 1917, and about the same
proportion, 19 per cent of the total, were for
the purpose of retiring maturing obligations.
Charters issued in the Eastern States for new
corporations individually for $100,000 or over
are given by the Journal of Commerce as
$185,726,500, compared with $492,965,800 in
1917.
The market for commercial paper has been
fairly active, with borrowing on a conservative
scale and rates ruling at 6 per cent for all
maturities. The prevailing rate for bankers'
acceptances has been 4|- per cent. Call loans
on stock exchange collateral have been in good
demand, and rates have held at 6 per cent with
practically no offerings below that rate.
DISTRICT NO. 3—PHILADELPHIA.
War influences control business in this district, and all activities are entirely subject to
them.
With the control of transportation, shipments
and deliveries of materials, and the regulation
of prices of many lines of goods, directly or indirectly in the hands of Government authorities, the ordinary operations of business in
most lines have been much disturbed.
From the operating and producing standpoint
most lines of business are very active. As has
been the case for some time, the demand for
goods necessary to the conduct of the war is
sufficient to employ more than all the available
machinery and labor, and due to the filling of
the Government requirements in some lines it
will be months before any goods of any amount
can be produced for civilian use. The Government being the principal purchaser of goods,
there is no question as to payment of bills;
large wages make for large purchasing power on
the part of the people, so that the distribution
of goods through the jobbers and retailers has
been satisfactory, and collections are very good.
Fall trade is about to open. Prices are considerably higher and there is some uncertainty
as to just how the advanced prices will be received. Jobbers are beginning to offer goods
for next spring, their prices are in advance of a

877

year ago, and there is reported hesitation on the
part of buyers about making purchases.
It is stated that the regulation of the prices
of cotton yarns and cotton fabrics, with the
notice that a new schedule of prices may be
made on October 1, has retarded dealings in
most varieties of cotton goods, though it is
reported that orders are being taken subject to
the prices that may be fixed October 1.
The wool business practically has been taken
over by the Government. No wool is being sold
for civilian purposes, and all importation of
foreign wools has been suspended, except for
Government use. It is reported that nearly all
wool and woolen manufacturers of the country
are working on Government orders, and probably it will be six months before such orders are
completed and there is any possibility of releasing any machinery or wool for civilian use.
Dealers in woolen goods are practically out of
business, an insignificant quantity of cloth is
being made, but of so poor a quality that in
ordinary times it would be hardly salable. We
are advised that manufacturers of clothing and
other users of cloth have laid in large stocks,
and the chances are that all the civilian clothing
needed can be supplied for the next 12 months.
The only suffering will be due to the prices
consumers will have to pay.
The effect of Government activity extends
similarly to the manufacture of iron and steel
products, another large industry of this district. The largest possible tonnage is being
turned out, and it is reported that producers
have now virtually given up all thought of supplying any steel for other than war or Government purposes for an indefinite time.
Government financing and the requirements
of business are maintaining an active demand
for money, and rates throughout the district
continue firm at 6 per cent for nearly all classes
of loans. The large subscriptions of banks to
United States certificates of indebtedness are
causing them to restrict credits wherever possible, and the tendency is to curtail accommodations to lines of business not necessary to
public welfare, or essential to the conduct of
the war.

878

FEDERAL RESERVE BULLETIN.

DISTRICT NO. 4—CLEVELAND.

Business in the Fourth Federal Reserve District continues on the same basis as heretofore,
except as held in check by labor and transportation. These two factors appear to have
nearly reached the limit of expansion and,
until recruits have been added to the one and
abnormal demands taken from the other, but
little increase in production can be expected.
Manujacturing.—War needs continue to
dominate the iron and steel industries and all
plants are operating as near to capacity as
conditions permit. Due to the heat and a
shortage of pig iron there has been some decrease in production in the large centers,
while in others the output is at the maximum.
Regulations by the War Industries Board are
said to have facilitated the work of distributing steel and iron products. The production
of the plate mills is short of needs, even though
more is being produced than ever before. As
war needs permit, an effort is being made to
supply railroad equipment before winter begins.
Clay products.—Pottery manufacturers have
recently granted a substantial wage increase to
all departments, and this industry now has
less trouble in securing and holding labor.
There has been some slackening in the demand
for wares in the past few weeks, but a fair
supply of orders is still unfilled.
Manufacturers of tile, face and common
brick report little change from previous
months, as do glass and window glass manufacturers.
Fuel.—In the Pittsburgh district production is not believed to be in keeping with last
year due to car and labor shortages, and
considerable trouble is experienced in satisfying customers, the demand exceeding that
of any time during the year.
There has been a revival of coal operations
on the rivers, and a consequent improvement
in business in river towns.
In the Kentucky fields and some others
conditions appear to be more favorable, and
the output is in better volume. In general,
it is believed that production is being fairly
well maintained. Excessive heat has pre-

SEPTEMBER 1,1918.

vented the maximum of efficiency in coke
making.
Agriculture.—The wheat crop has been harvested and practically all threshed, and while
the yield has been disappointing in some instances, yet, with the increased acreage, the
crop is believed to be, considerably in excess
of last year's. The yield from spring wheat,
however, has exceeded expectations. The
harvesting of the oats is practically completed
and threshing is well under way. The yield
is very large and reports of 60 to 70 bushels
per acre are not uncommon.
Throughout central Ohio the corn crop is
reported in fine condition, and while in some
other districts it has suffered from lack of
moisture, yet it has greatly benefited by
recent rains, and, generally, the crop is in a
fairly healthy condition.
In the Kentucky district heavy rains have
practically assured a good corn and tobacco
crop. The tobacco is being cut and every indication points to a large crop, although in the
burley district the crop is said to be somewhat
spotty. It is reported that the plant is heavier
this year than for a number of years past,
which will add to the tonnage.
In the northern Ohio district the outlook for
a good yield of pe^rs and apples is encouraging,
although the peach crop is very light. In
many localities the yield of early potatoes
has been disappointing, but recent rains are
said to have very much improved the late
potatoes, sugar beets, and late planted war
gardens. In all lines of agriculture, prices are
high and farmers are prosperous.
While for a time some uneasiness was felt
on account of the extreme heat and extended
drought, yet rains have been general over the
district, and in most cases pastures have been
saved and growing crops have been greatly
benefited. The supply of hogs, cattle, and
sheep is normal. The price received for the
wool clip has been very gratifying to sheep
raisers, and whatever uneasiness was felt as to
an inability to take care of the crops in the
district has been allayed.
Labor.—Although there is a great scarcity
of labor, the employment of women is still

SEPTKMBKB 1,19.18.

FEDERAL RESERVE BULLETIN.

increasing, the demand being in excess of the
supply. When the schools convene in September they will undoubtedly take from the
labor field a great many children of school age
and teachers who have been employed during
the summer.
In the Pittsburgh district an increase of 10
per cent in the wages of common labor became
effective August 1, affecting an estimated
250,000 workers.
There is reported a very considerable shortage of labor in the Pittsburgh coal fields, but
this has been offset in part by the patriotic
response of workers to the Government appeal,
and present employees are working faithfully
and losing as little time as possible. The
labor situation is not altogether satisfactory,
and some uneasiness is felt as the draft and
war service continue to make inroads on the
supply.
Collections.—Failures continue to decrease,
and collections, except in very few instances,
are good. This is especially true in the outlying districts and in sales by the smaller
manufacturers. In some cases larger industries
report that public utility companies are
offering paper while awaiting aid from other
sources. The marketing of agricultural staples,
which has already begun, should materially
strengthen a satisfactory situation.
Transportation.—Increased activity in river
transportation in coal and manufacturing
districts has relieved to some extent the shortage of cars on contiguous lines of railway.
It is believed that merchants and manufacturers are using every effort to obtain
supplies before the movement of the harvest
and troops and increased war material absorbs
the carrying power of the railroads. This
possibly accounts for some reported delays
and congestion. In the Cincinnati district
inadequate terminal facilities are said to cause
unfortunate delays in transporting essentials.
Conditions are not as satisfactory as could be
desired, but it is hoped that the situation is
occasioned by anticipation shipments, and will
tend to relieve the situation later.

879

Mercantile lines.—Wholesalers and jobbers
in dry goods report business in large volume,
equalling and exceeding other records. Sales
for immediate delivery show some falling off,
due to price uncertainty and large stocks
held by retailers. Jobbers complain that the
shortening of trade terms necessitates additional working capital. However, business is
good and prospects bright. Retailers are
busy disposing of summer merchandise.
Sales compare favorably with previous years,
but some dissatisfaction is evidenced in that
purchases are largely made by an element which
is the best paid at the present time but which
docs not furnish a permanent clientele. A
disposition is shown to anticipate fall wants in
excess of other years.
Money and investments.—The additional capital required to carry on business, due to
higher prices, tends to increase the requirements of commercial borrowers. The uniform
rate on this class of paper is 6 per cent, and
paper in less liquid form commands a higher
rate. The increasing demands of Government
financing also help to tighten the money
market.
Bankers, that they may be able to take their
full quota of certificates of indebtedness,
discriminate very closely between classes of
paper offered, and preference is shown to a
marked extent for liquid paper.
Preparation is being made for the fourth
Liberty loan, which it is believed will bo a
task of some magnitude, but there is full confidence that it will be subscribed. It is the
general opinion that the people of the country
are ready for any sacrifice to carry the war to a
successful ending and need only to be informed
of the specific sacrifices to be made and the
amounts required of the individual.
Building.—In a few quarters there is unusual building activity in comparison with
previous months. This condition obtains in
localities where the need for dwellings for
workmen is imperative. Considerable difficulty is experienced in obtaining plumbing and
heating supplies. Generally the line is con-

880

FEDERAL KESEBVE BULLETIN.

SEPTEMBER 1,1918.

fined to the erection of dwellings for workmen certainty of getting supplies and labor and the
high cost of both make it impossible to accomand plants for the making of war supplies.
plish work with satisfaction either to themDISTRICT NO. 5—RICHMOND.
selves or to the Government.
There is little of change or special interest
The fuel situation continues unsatisfactory
during the past month, notwithstanding the and there is much complaint about the distrigreat activities in the district and the unprec- bution of coal, due to the scarcity of labor and
edented volume of business which is in evi- cars, and to the fact that the output is only 60
dence in every direction. Adjustments are per cent to 80 per cent of normal. Relief from
being promptly and cheerfully made to meet this situation before the winter sets in seems
war conditions and to cooperate with the Gov- problematical.
ernment in all essentials to meet the responManufacturers, particularly cotton mills,
sibilities which face us.
have been somewhat disturbed by the discusAlthough this is generally regarded as the sion of price fixing, but although the Governdull season of the year, general business is ment is said in many instances to be paying
above normal and collections are good. Credits 25 per cent to 50 per cent less than the civilian
are being systematically shortened, cash sales population, the mills are operating on a very
are increasing, and many dealers are selling profitable basis.
only to those who discount their bills. This
Our last report indicated that crop conditions
policy is quickening the turnover and meeting were so exceptionally favorable as to almost
to some extent the enlarged capital demand certainly preclude the maintenance of. condue to high prices. The high prices of all com- ditions at the same high ratio. This has proven
modities do not seem to deter purchasers to any well founded, particularly with regard to cotton,
extent. Consumers, especially the middle and which has been unfavorably affected by dry
lower classes, are purchasing merchandise they weather in the southwest, while the estimates
would never have thought of buying in normal of the crop have been reduced about 2,000,000
times. This is evidently due to the fact that bales. Many reports say the crop, however,
they have more ready money than ever before was never better, and that while the dry
and seem bent on spending or squandering it. weather has made it a little late, it is clean with
Government activities in the neighborhood of fair growth and well fruited. Some neighborcamps and at the seaports of the district have hoods report rather too much rain in the last
stimulated trade to almost feverish activity and 10 days. The expected reduction of about
living conditions are strenuous.
2,000,000 bales in the size of the crop promises
Lumbermen and dealers in all construction to be a blessing in disguise to planters. I t will
materials report no difficulty in selling all tend to stabilize prices on a satisfactory basis,
procurable supplies, their only trouble being and reduce the expected excess stocks which
with labor and railroad delivery service. will have to be carried over, until shipping can
Wagons and other farm equipment are in be provided for their export to our allies.
demand, the output as a rule being from 25 per When this shipping can be provided, a ready
cent to 50 per cent of normal, due particularly market is anticipated abroad for all the cotton
to scarcity of iron and steel; 90 to 95 per we can spare.
cent of the output of iron and other metal
Corn has been reduced by a dry June and
plants is on account of Government work.
July. The yield of wheat promises to be someBuilding operations are chiefly for Govern- what disappointing as it lacked moisture before
ment housing. Nearly all Government con- maturity.
struction work is on cost-plus basis, and several
The tobacco markets in South Carolina,
contractors report that they are taking such North Carolina, and Virginia have now opened
work from patriotic motives only, as the un- in turn, crop reports are excellent, and the

SEI>TEMBEB 1,1918.

FEDERAL BESERVE BULLETIN.

demand for the products of the weed is unprecedented. Prices are apparently 25 per
cent to 33 J per cent above those of last season,
and average grades are selling in the neighborhood of 40 cents per pound. The monetary
yield promises to be beyond precedent.
Government financing has made serious demands on the resources of the banks. But for
these, crop financing would apparently have
been a comparatively simple matter. The
response to Government calls, however, has
been cheerful and liberal, notwithstanding the
fact that it has necessitated heavy rediscount
demands upon the Federal Reserve Bank,
Some shrinkage of deposits is reported, but on
the whole the volume has been well maintained.
Curtailment of unnecessary credits has been
urged and enforced, but always with discretion and without curtailment of necessary activities. Clearings indicate an increase of
nearly 50 per cent over the corresponding period
of last year.
On the whole, conditions may be regarded
as prosperous, notwithstanding we are at war,
and the news from abroad during the past three
weeks has brought a feeling of cheerfulness
which has not been apparent for some time past.
DISTRICT NO. 6—ATLANTA.

Of the outstanding features, perhaps none
affords greater satisfaction than the almost
practical certainty of splendid crops through
the Sixth Federal Reserve District. General
business conditions show no change of any
consequence. In the centers wholesalers and
jobbers are busy with fall orders and report
excellent advance orders from retailers who
fear further advances in prices, scarcity of
merchandise and difficulty in getting deliveries.
The coal mines of Alabama and Tennessee
have been making marked gains in output;
and there is practically no let-up in the general
mining and industrial situation in these sections. Shipbuilding continues extremely active in all ports and millions of dollars are being
expended in these great enterprises. At Brunswick, Ga., the Government's picric acid plant
is being rapidly pushed to completion and when

881

finished will employ about 4,000 men. This
means a total expenditure in construction of
approximately $7,000,000. It is expected that
all the units of the Government powder plant
at Hadley's Bend, Nashville, Tenn., will be
completed by the end of August, after which
approximately 1,000,000 pounds of powder
will be produced daily.
On account of scarcity of water, the power
supplied by electric power companies to north
Georgia manufacturing establishments has been
considerably curtailed and it has been found
necessary for the War Industries Board to
issue priority orders to govern.
The financial condition is generally satisfactory, with little demand for loans compared
with previous months. Member banks of the
Federal Reserve system are availing themselves
more of the facilities of the Federal Reserve
Bank and thereby assisting the Government
through the purchase of certificates of indebtedness. Midsummer collections are good and
bank clearings are increasing.
Reports from Alabama show that the farmers
paid for 73 per cent of the fertilizer used in
making the 1918 crop before taking it to their
farms; whereas they had previously paid about
10 per cent and 90 per cent when the crop was
harvested and sold. This increase in cash
payments is true largely throughout the district.
While there are continued reports regarding
shortage of labor on account of draft, a considerable part of this shortage is due to the
many thousand workers empk^ed in the shipyards and other Government work in the south.
Some fear is expressed as to the supply of labor
for cotton picking, but this is not seriously
viewed by the planters, as men have in the past
picked but little cotton, the picking being done
by women and children; and though there may
be some handicap it is not viewed with any great
alarm so far as cotton picking is concerned.
A free farm-help bureau has been established
with headquarters at the University of Tennes*
see, Knoxville, Tenn.
Alabama.—In Alabama, cotton is in a fine
state of cultivation. The weather for the first
15 days of August was good for the crop, with

882

FEDERAL RESERVE BULLETIN'.

the exception of in the north, where hot, dry
weather was experienced. The plant is heavily
fruited and continues to bloom freely, with
some picking, more or less, in the south.
Generally speaking the crop has been laid by,
and is well worked, though labor has been
somewhat scarce. Since the rains set in, the
fields are in bloom and picking up new growth,
indicating a good top crop. The weevils have
begun to appear in some sections but no great
damage from this source is expected.
In spite of the insufficient rainfall, the corn
production this year in Alabama is excellent.
The drought was broken in time to prevent
serious damage to the crop, the condition
being about 3 per cent below the ten-year
average, with an indicated production of
74,000,000 bushels.
The State should produce a yield of approximately 1,400,000 bushels of wheat, as compared
with 930,000 bushels harvested last year;
and while this is short of normal consumption,
the increase is very gratifying in the face of
unfavorable conditions.
Mississippi.—In Mississippi the condition of
the cotton crop varies from below average to
excellent. Shedding rust and red spider have
caused some damage, but there is very little
weevil activity reported, due to dry weather.
In the northeast part of the State and in the
southern half of the delta the crop is good, but
elsewhere, except in localities favored by
rains, there has been serious damage due to
drought and hot northeast winds.
The strong feature of the Mississippi wheat
crop was the average yield per acre of 16.5
bushels for the State as compared with 15.3
bushels for United States. Most excellent
yields were obtained in the delta, showing in
many places 25 to 30 bushels per acre.
The corn crop suffered severely during July,
especially in the middle and southwest sections
of the delta, but middle August rains have
greatly improved the condition not only of
corn but potatoes and peas, and relieved the
pasture problem by refreshing the forage and
supplying much-needed stock water.

SEPTEMBER 1,

1918,

Georgia.—Cotton is opening fast in the
southern and central sections, and picking has
become general in the ' south, with ginning
reported in many places. The hot weather and
bright sunshine, followed by rainy weather",
caused some scalding and shedding of leaves,
but prospects are still very encouraging. The
crop received good cultivation on account of
dry weather, and was laid by with less grass
in it than in former years. The boll weevil has
appeared for the first time in a number of
counties in the State and since the rains has
been very active, but the crop is sufficiently
advanced to insure a fair crop even in these
sections. The plant is good, well fruited
with plenty of bloom, and sufficiently advanced
to make a good crop before frost. The probable total production is estimated at 2,250,000
bales, which will vary from now to harvest time
according to weather conditions.
Sea Island cotton acreage is much lower than
last year, now promising only somewhere about
30,000 bales, and is seriously threatened by the
boll weevil.
The State's wheat crop has been harvested
and the land largely replanted in peas or some
other late crop. It having been demonstrated
that wheat growing is a profitable crop in
Georgia, wheat acreage will become more extensive each year.
Estimates of the yield of winter grains were
below expectations. The straw gave promise
of a good crop, but the heads did not fill out
properly and the grain was light. In view of
sugar shortages, much interest is being taken
this year in the sirup crop, sorghum, and sugar
canes. Sirups are about as usual, but the
sugar is small and late. In the old boll weevil
section farmers have been trying a light tobacco
crop which has turned out above average and
is about half gathered.
Both early and late varieties of corn are well
matured. The crop suffered severely in a wide
belt across the middle of the State. On either
side of this section crops are reported exceptionally fine and will show an increase over
la^st year's production for the entire State.

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

Florida.—The corn crop was considerably
damaged by the July drought, but will exceed
last year's production by some 800,000 bushels.
Most of the crop has been harvested, and the
yield is good except in the west, where dry
weather caused some deterioration.
Cotton in the central section is opened and
picking is active, with picking beginning in
northern section. Some scarcity of labor and
of gin facilities is reported. About 75 per cent
of the acreage was planted in Sea Island cotton,
which shows * about 10 per cent reduction over
Sea Island cotton last year.
The increase in winter wheat over last year
is assured, and while spring wheat is somewhat off, the production will be considerably
more than last year.
Tennessee.—The cotton acreage is larger than
last year, and the plant is earlier and in a good
state of cultivation, clear of weeds and grass.
With favorable weather cotton will probably
make a record yield per acre in this State this
year.
Tobacco is about ready to cut and promises
a fair yield. There are some indications that
the crop will not be an average on account of
dry weather.
Corn is in good to excellent condition in the
eastern and central sections. Some reports
indicate a yield equal to that of the year 1917,
but these large yields are based on the probability of late frosts, as considerable corn was
planted late.
Louisiana.—Cotton and late corn are doing
well except in the southwest section, where excessive rains damaged cotton to some extent.
The plant is rapidly opening and picking is
going on. Sugar cane is in fair to excellent
condition, with rice showing much improvement. The southwest was recently visited by
storms disastrous to early rice, but this loss was
somewhat offset by improvement in younger
rice from much needed heavy rains.
DISTRICT NO. 7—CHICAGO.
Despite drought and heat waves of exceptional severity, with resulting impairment of
crop prospects, a decidedly hopeful feeling
prevails throughout the Seventh Federal Re-

883

serve District. Grain estimates, while necessarily falling below previous calculations, still
give promise of large harvests, and the patriotic
spirit of employees who, in spite of high
temperatures, have continued at work, has
tended to discount any check to manufacturing
of an essential character. With more than
enough essential business to absorb the available supply of raw materials and to keep labor
well employed, prosperity seems to prevail in
an unusual degree. Especially is this condition
reflected in communities where considerable
war work is available, while in localities not
so favored, owing to the crops harvested or
approaching harvest, there is assurance of continuation of good business.
Throughout the district, and especially in the
industrial sections, a very strong demand for
loans prevails at firm rates, money ruling strong
at 6 per cent, with the feeling expressed that
there will be but slight deviation from this
rate for the period of the war. The patriotic
and cooperative spirit manifested by the banks
enabled this district very materially to oversubscribe its allotment of United States
certificates of indebtedness in the latest issue.
Allotments were absorbed with comparative
ease, at the same time keeping essential business operative and permitting the financing of
large volumes of Government business without
any crippling of resources.
Early marketing of grain has appreciably
eased the financial situation, especially in the
smaller money centers, and an increased tendency in this direction is indicated as the marketing of other farm products proceeds. The
Federal Reserve Bank is cooperating in the
financing of a very heavy crop movement.
Some acceptances are being used in connection
with these operations.
Wheat, oats, and other small grain have practically all been harvested with splendid yields.
The large, if not bumper crop of corn, indicated
by early reports of correspondents, has been materially reduced by the intense heat during the
month of August. The damage is confined to
the southern part of the district, principally in
the State of Iowa, where recent reports from the

884

FEDEBAL RESERVE BULLETIN".

affected area predict a 25,000,000-bushel loss.
Outside the stricken district corn appears to be
in better than the average condition and with
recent showers accompanied by cooler weather
the yield of this crop promises to be large. The
potato crop in Michigan, Wisconsin, and Iowa,
other than in localities affected by the drought,
holds good promise. A general decrease in the
flow of milk is reported owing to the short and
dry pastures.
With increased restriction of civilian wants,
there is a growing disinclination among dealers
and manufatcurers alike to incur obligations
extending into the future. While Government
price fixing has effected a healthy and stable
condition in various lines of industries and
business, some anxiety is expressed by retailers
as to the effect of future development along this
line, especially in staples that have not yet come
under Government supervision.
War needs still continue to dominate the drygoods markets, and, with steadily tightening
restrictions on regular trading, purchases for
future delivery have been lessened considerably. Jobbers are adjusting prices to the new
levels fixed at the mill centers by the Government, and it is hoped there will soon be an
abatement of the hesitation that has appeared
for some time among retailers.
Though Government restrictions have greatly
reduced the volume of business derived from
the sale of sugar, wholesale grocers report an
exceptionally good trade, with an increased
demand for canned goods. Canning factories
are beginning to operate with good prospects
for an excellent pack.
High prices continue to prevail in the livestock markets. Drought has brought about
heavy shipments.
Deferred classification and enlistment refusal
to mine employees who can not readily be replaced has helped to remove a condition that
until recently threatened materially to decrease
the production of coal. Additions of available
cars have created decided improvement in the
coal transportation problem. Though showing
an increase, the output of the Illinois mines is
still far short of the demand.

SEPTEMBER 1,1918.

Labor is well employed at high wages, showing somewhat of an independent spirit in view
of the large demand for men. The United
States Employment Service Committee is expected, through its operations, to curtail the
migratory tendency of labor, brought about by
increased wages and competition among employers for men, especially in the trained field.
Orders for steel continue to call for a tonnage
considerably in excess of the output. Automobile manufacturers working to full capacity
on war ordersfare not suffering from the curtailment of their pleasure-car output.^
Clothing manufacturing is well engaged.
Owing to the shortage of woolens, spring offering in the clothing line will be largely restricted
both in quantity and quality. However, large
stocks on hand will enable retail merchants to
take care of the demand for some time to come.
Manufacturers of agricultural implements
are experiencing a normal amount of business
for this season of the year. Tanneries are busy
s upplying insistent demands for leather. Boots
and shoes continue in active demand. Large
Government orders are given preference over
civilian business. Dealers in hardware are now
operating under a pledge to the War Industries
Board to sell finished steel and iron products
for essential purposes only and are further
handicapped by increasing difficulties in securing materials. Piano manufacturers with reduced outputs report a demand for their product
in excess of the supply with a corresponding
increase in selling price. Jewelers report business in excess of corresponding periods in 1P17,
the bulk of the business being in fine jewels and
watches.
Brewers report a further decrease in production, with wholesale prices showing an increase
of 100 per cent over last year. Confectioners,
still operating under the 50 per cent sugar
restriction, are utilizing their sugar supply to
the utmost and are necessarily experiencing a
period of readjustment.
A slight increase in activity is reported in
the investment securities market, limited,
however, to the trading of individuals, trustees,
and financial institutions other than banks.

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

The clause in the new tax bill providing an
income tax on municipal bonds, heretofore
exempt, has discouraged trading in this class
of securities.
Trading in building materials, other than
those needed in operations directly connected
with the prosecution of the war, has practically
come to a standstill. Building permits and
values involved in 15 cities for the month
of July show a reduction over the corresponding month in 1917. July, 1918, permits totaled
2,553, valued at $10,226,595, as against 2,700
permits, valued at $11,660,288, a year ago.
Collections, as reported by all correspondents, have never been better, and outstandings have touched the lowest records in
history. Merchants generally report that while
sales in amount of merchandise handled are
not as large as in previous years, the amount
in dollars and cents and profits compares
favorably and in most instances shows an
increase over corresponding previous periods.
All lines of business and industry are experiencing a shortage of labor and are confronted
by the problem of securing sufficient goods and
material to supply the demand.
Clearings in Chicago for the first 15 business
days of August were $1,261,000,000, being
$137,000,000 more than for the corresponding
15 business days in August, 1917. Clearings
reported by 21 cities in the district outside of
Chicago amounted to $202,000,000 for the
first 15 days of August, 1918, as compared
with $142,000,000 for the first 15 days of
August, 1917. Deposits in 12 central reserve
city member banks in Chicago were
$877,000,000 at the close of business August
17, 1918, and loans were $653,000,000. Deposits show an increase of approximately
$58,000,000 over last month and loans an
increase of approximately $19,000,000.
DISTRICT NO. 8—ST. LOUIS.
Business activity in this district has been well
sustained during the past month. In manufacturing lines a disposition to center upon
war work is noted. Some "nonessential" enterprises have suspended operations, and many

885

manufacturers are adjusting their plants for the
production of " essentials." A number of concerns in this district are now working almost
exclusively on Government contracts.
Iron and steel manufacturers continue especially busy. Manufacturers of boots and shoes
are also working to capacity, with sufficient
orders on hand to carry them well into the
future. In many instances they have withdrawn their sales force from the field. Manufacturers of farm implements report substantial
increases in the volume of sales over August of
last year, and also state that their orders on
hand for future delivery are much larger than
at this time last year. I t would seem that the
farmer is endeavoring to overcome the help
situation, as well as increase his output, by the
adoption of labor-saving machinery. Wholesalers of dry goods report a gratifying volume
of orders on hand, and say that indications
point to a good fall business.
Department stores and retail merchants generally report a good business, though the high
prices and the agitation against unnecessary
buying is having some effect on the volume. I t
is stated that merchants are buying conservatively, and that many are anticipating their
payments. Collections, as a rule, are reported
to be good.
Reports from the banks in this district indicate
a good demand for money, though not quite so
strong as a month ago. During the past month
many of the member banks have been able to
liquidate their indebtedness to the Federal
Reserve Bank. On July 22 the paper discounted by the Federal Reserve Bank of St.
Louis for member banks amounted to $61,061,000, while on August 22 it amounted to $54,629,000. In the large cities the bank rate to
customers continues at 6 per cent for practically all classes of loans, and in the country
districts it is somewhat higher. Some improvement has recently been shown in the commercial paper market, though it is still considerably
below normal. The rate prevails at 6 per cent
for all names and maturities.
The growing crops in this district have been
greatly damaged by the recent drought and

886

FEDERAL RESERVE BULLETIN.

excessive temperatures accompanied by hot
winds. The corn and cotton crops have especially suffered. The condition of the corn in
the seven States in this district was estimated
by the Government on July 1 to be 86.3 per
cent, and on August 1 its condition was estimated to be only 74.4 per cent. This is 5.7
per cent below the 10-year average. The condition on August 1 is estimated to yield
152,638,000 bushels, which is 11,070,000 bushels less than the estimate of July 1. The condition of the cotton in this district was estimated by the Government on June 25 to be
92 per cent, while on July 25 its condition was
estimated to be only 84.2 per cent. However,
this is 11 per cent better than the condition on
July 25 of last year and 5 per cent better than
the 10-year average. There are very few reports of insects. Fruits and vegetables have
also suffered from the drought and excessive
heat, one correspondent stating that apples
were drying on the trees. Toward the latter
part of August temperatures became lower and
rains fell throughout the district, but in many
sections it came too late materially to benefit
the corn. However, it did benefit the late
truck and forage crops.
Threshing of the winter wheat is nearing
completion. A preliminary estimate by the
Government shows that the acreage in this district is expected to yield 35,715,000 bushels,
which is 14,683,000 bushels more than the estimate of December, 1917, and 12,751,000 bushels more than the five-year average. The
quality of the wheat is estimated to be 92.6
per cent, which is 3.2 per cent better than the
average. Plowing for fall wheat is well under
way where the condition of the soil has been
suitable. In many sections, this work has been
retarded on account of dry, hard ground.
On account of the drought and heat, pastures have been burned up and water has become scarce in some sections, and many farmers
have been sending cattle, hogs, and sheep to
market. The report of the St. Louis National
Stock Yards for July shows increases in the
receipts of live stock over June as follows:
Cattle, 32,266 head; hogs, 49,924 head; and

SEPTEMBER 1,1918.

sheep, 19,499 head. The receipts during July
also show substantial increases over the corresponding month last year.
There is an increasing demand for both
skilled and unskilled labor in this district.
This has brought about competition among
employers for men, which has resulted in a
migratory tendency on the part of workmen.
However, this situation is expected to be
greatly helped by the work of the United States
Employment Service Committee.
Postal receipts during July in St. Louis,
Louisville, Memphis, and Little Kock all show
substantial increases over both the previous
month and the corresponding month last year.
Reports from St. Louis, Memphis, and Little
Rock for July show perceptible decreases in the
number of building permits issued and the estimated cost of construction, in comparison with
the corresponding month of last year. The
report from Louisville shows a slight increase.
DISTRICT NO. 9—MINNEAPOLIS.

Throughout the eastern part of the district a
generous harvest has insured sound business
and financial conditions for many months to
come. Light crops are the rule in the western
half of the district, while in the northern half
of Montana the crops are a failure. Good
yields at high prices'mean a heavy money
return to farmers upon the crop which is now
being threshed, and further heavy returns
throughout the eastern half of the district are
promised. This insures a satisfactory volume
of merchandising business at country points
which will reflect itself in satisfactory business
at distributing centers.
From an industrial standpoint the district is
working to full capacity, turning out ships at
Lake Superior ports and a large amount of
Government material at the shops and factories
at interior centers.
The demand upon the banks of the larger
cities has continued very heavy during the
month. Rates show little or no change.
It has gradually become more and more
apparent during the past several weeks that a
very restricted supply of labor is in prospect.

SEPTEMBER 1,1918.

JFEDEEAL KESERVE BULLETIN.

Men are hard to obtain, and wages are very
high. There has never been a period in the
history of the district when there was such full
employment for all who are willing to work.
Women are more and more replacing men,
especially at the lighter tasks, and in clerical
capacities, and the district is beginning to feel
the effect of its substantial contributions of
volunteers and drafted men.
It is clear that the inability to obtain labor
and skilled help will shortly make itself felt in
such a way as to compel curtailment and some
restriction in many different lines of business.
A very favorable element in the agricultural
outlook is the fact that harvesting is being
completed at least two weeks earlier than in an
average year. Grain crops have all come to
an early maturity and over the greater part of
the district the harvesting of small grains is
practically finished. Frequent rains have somewhat delayed threshing and have done some
damage to grain in the shock, chiefly through
discoloration. Threshing returns are satisfactory, and the farmers are enabled to start fall
plowing earlier than has ever been known before.
While rains have been somewhat of a hindrance
to the threshing of grain, they have put the soil
into good condition for plowing, and the general
situation is such that there is strong encouragement to believe that the acreage for 1919 will
be largely increased. Even in the more northerly parts of the district all plowing will be
general within a week.
DISTRICT NO. 10—KANSAS CITY.

The progress of events during the past
month offers a less satisfactory outlook than in
July. Corn prospects are much decreased,
with a yield likely to be considerably less
than last year. No improvement has been
shown in the coal situation, and the seemingly
uncalled-for slump in Oklahoma oil activities
made it impossible to maintain the standard
of the previous month. There is a spirit of
optimism throughout the southwest and a
desire to do all that is possible to further the
Government in its endeavors.
Financial.—It has been reported that the
usual summer decline in business has been less

887

general than in former years. That this is
probably true is borne out by the fact that bank
clearings in the principal cities of this district
for July increased 30 per cent over those of July,
1917. This is a much larger increase over the
preceding year than was reported in June.
Financial relief has been promised the
drouth-stricken portions of the district by the
War Finance Corporation, with the Kansas
City Federal Reserve Bank acting as agent.
Movement of crops has caused the demand for
money to remain steady with rates firm. The
work of the Capital Issues Committee is having
a very wholesome effect in curtailing the issues
of wild-cat securities.
Agriculture.—The outlook for the corn grower
is not as bright as a month ago. Unfavorable
weather during July reached its climax in an extended period of excessive heat and caused
marked deterioration in corn except in the
Rocky Mountain States, where satisfactory
progress was made. A considerably diminished
yield is now to be expected from this district,
as many fields throughout Oklahoma, Kansas,
and Nebraska are damaged without hope of
recovery, while other areas over a more extended territory are injured. Winter wheat threshing is being completed with reports of grain of
exceptional quality.
Wheat receipts increased in volume as the
harvest progressed, mounting to record proportions at some milling centers. Receipts
on the local market set a new record for July,
equaling almost four times the amount for
July, 1917. Demand for flour was well maintained throughout the month, but the large
arrivals of grain more than sufficed and the
premiums over guaranteed prices that were
established during the heavy competition for
first wheat steadily declined. Milling activity
increased as the wheat became available
until the maximum capacity of flour output
was approached. The average activity during
the month was 69 per cent, compared with
51 per cent a year ago, which is reflected in an
increase of 41 per cent in flour production.
The sugar-beet crop in Colorado is reported to
be in excellent condition, with prospects of a

888

FEDERAL KESEBVE BULLETIN.

large yield per acre, but the acreage is only
about 75 per cent of normal.
Live stock.—The movement of live stock
continues in satisfactory volume, with receipts
and prices climbing to record figures. The
number of cattle, hogs, and sheep received at
the six principal markets of this district each
increased almost 100,000 head over the same
month last year, establishing a new July
record for total receipts. Not only was there
an increase of 22 per cent in hog receipts, but
the average weight of 217 pounds made a
substantial gain over the average of 207
pounds for July a year ago. Hogs commanded
record prices for 1918 and prices for some cattle
were greater than before.
The enormous movement of cattle to the
markets in July was due partly to the dry
weather, which burned the pastures and generally forced premature shipments. Conditions
in the hog market changed from good to the
worst of the present year, as the weather
caused a movement of light and mixed hogs to
the market. Demand from the packers was
good, hog slaughtering increasing about 10
per cent over July last year, which along with
a strong shipping demand caused the high
prices for pork featured at the markets. The
fall movement of live stock has started,
influenced perhaps by the high prices at the
markets, and indications point to a heavy
run from now on. Ranges are reported to be
in the best condition in years in the Rocky
Mountain States, but need rain badly in
Oklahoma, Kansas, Nebraska, and New Mexico.
Mining.—There is little change to be reported in the mining industry of Colorado.
The tonnage of ore decreased slightly, owing to
the labor shortage and the continued draft of
men to the army. This decrease may be expected to continue, as the available labor supply
is diminished. Those gold mining interests
which succeeded in surviving the tense period
earlier in the year managed to operate through
July, but it is reported that many of the
larger producers are contemplating a shutdown because of the narrow margin of profit
now afforded. Those most affected are not

SEPTEMBER 1,1918.

the miners who produce gold exclusively but
are the producers of associated minerals of
which gold is the main value. The coal
shortage is becoming more certain as the
year progresses, with prospects of ration cards
unless material changes are effected.
The zinc market was quiet and underwent a
small decline the last two weeks of July.
Shipments in the Missouri-Kansas-Oklahoma
district were comparatively large, resulting
from the efforts of producers to reduce surplus
stocks. Stocks of spelter decreased about
3,000 tons during the month, which is said to
be due as much to decreased production as to
larger shipments. The demand for lead was
very heavy, but was far from being satisfied,
and the scarcity of the metal prevented much
business.
Oil.—Operations in the Kansas fields compare favorably on the whole with those of
June. Although there were fewer completions
in July, the new production from the completed wells was greater than in the preceding
month. Fewer large gushers were reported,
but the average yield was an improvement.
The total estimated production from Kansas,
including both new and old wells, shows an
increase of 18 per cent over the corresponding
period in 1917.
Activities in Oklahoma failed to equal the
high standard of June, and the only cause set
forth is that the usual lull accompanying the
extremely hot weather was more generally
felt. Completions were only 40 per cent as
numerous as in June and the new production
decreased almost 30 per cent.
Wyoming operations remained practically
stationary. One more productive well was
drilled in July than in June, but the new production suffered a slight decrease. The number of wells drilling equaled those of the month
preceding.
Lumber and construction.—Building permits
issued for June in the larger cities in this district totaled 44 per cent under those for the
same month last year. Construction activities
are very limited and business is reported to be
unusually quiet. Retail lumber dealers car-

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

ried larger stocks than normal in most lines
through July, with a continued small demand
from builders. Country orders are now being
received in increased volume as the summer
advances. Brick production is being maintained at the maximum amount possible, but
general construction work is gradually slowh
down owing to difficulty in securing adeq•'
labor. Road building is much less than at
this time last year and the disposition throughout most of the territory is to postpone such
work until after the war. More normal conditions are reported in the oil districts of the
Southwest than elsewhere.
Labor.—There were fewer labor troubles
during the past month than has been the case
heretofore, and with Government control of the
employment situation, which has lately1 been
announced, the outlook is brightened for
the essential producer. In the States wholly
within this district Government agencies received in July applications from employers for
some 30,000 persons and about 15,000 applications from those desiring employment. Since
the harvest the greatest demand for workers
has come from the mining districts of Colorado
and the Missouri-Kansas-Oklahoma district and
from the oil fields. Changes in immigration
restrictions, which permit a larger movement
of Mexican laborers to the Southwest, offers a
means of relieving the shortage in that section.
Mercantile.—Merchants are finding it increasingly difficult to secure stocks of many
lines, for as the needs of the Government
increase the surplus merchandise for the consumer is being diminished. Those who are
so fortunate as to have large stocks of goods on
hand find little difficulty in disposing of them,
but on the contrary are rapidly adopting the
policy of conservation. This district is not
affected as much by the high wages paid
in some industries as the number of manufacturing establishments is relatively small
when compared with some other sections of
the country. In the cities, however, the
larger employment of women is being reflected
in the sales of retailers. Many of the women
now employed have not worked before or are

889

earning much more than formerly and their
extended buying is in noticeable amounts.
Wholesale trade is good and manufacturing
continues active. Collections are reported as
being fair to good. General conditions in the
mercantile line may be considered satisfactory
"is increased purchase activity is being accompanied by a decrease in indebtedness.
DISTRICT NO. 11—DALLAS.
The outstanding feature of the whole financial and economic situation in this district is
the serious and substantial decline in crop
prospects since our last report. Six weeks ago
it seemed likely that this district would produce some four million bales of cotton. Since
that time over practically every section of the
district there has been little rain, and there has
undoubtedly been a very great deterioration
in the cotton crop. Opinion differs somewhat
widely as to what the total yield will be in the
district. Allowing for some exaggeration, it
is not likely that the total yield will run over
3,000,000 bales, and may fall substantially
below this figure. Similar conditions have
to some extent affected other crops, and have
also affected the range in the cattle districts.
Unfortunately the serious conditions which
obtain this year apply with special force to the
areas affected by the drought last year. On
the whole it seems certain that throughout the
district returns from agriculture will be greatly
lessened and in probably one-third of the district there will be a very serious and in many
sections a practically complete crop failure. The
extreme drought has very seriously affected the
range conditions in the stock-raising portions
of the district and has caused and will cause
very great losses to stockmen during the
winter. This situation does not obtain in
every portion of the stock-raising sections of
this district, but this is so largely true that its
effect is sure to be quite serious. Notwithstanding these conditions, trade has held up as
a rule very well, and on account of the increased
prices of merchandise of all sorts the volume
is practically as great as it "was at this time last
year. There is a very general disposition toward greater economy in practically all por-

890

FEDERAL RESERVE BULLETIN.

tions of the district, and the banks and financial institutions are practicing greater caution
in granting credit extensions than heretofore.
The grain crop of the district, which was
comparatively small and confined to a few
favored sections, has been harvested, and
generally the wheat has been sold. The feed
crops, such as oats, have as a rule not been sold,
but are being kept by the farmers for their own
use. Cotton has for the last ten days moved
in substantial quantities in the southern portion of Texas, and picking will soon be active
throughout the district. The serious crop
condition and the prospects for a comparatively small crop have had the effect of bringing better prices, and cotton is being sold pretty
rapidly as picked and ginned. We are, and
have been for the last ten days, shipping currency to the banks for cotton moving purposes
in fairly large amounts, and such shipments
will undoubtedly continue on an increasingly
heavy scale for the next 30 days.
The demands on this bank for rediscounts.to
member banks have been steadily heavy, and
the aggregate amount held by us is greater
than at any time in the history of the bank.
Such rediscounts will continue in large amounts
and without substantial diminution until about
the first of October. After that time w^e should
see quite heavy liquidations and by early winter our rediscounts should be reduced to approximately one-half of the amount now held.
Interest rates have grown somewhat firmer, but
we have noticed no disposition on the part of
banks to exact higher rates than are reasonably
warranted by conditions.
Among the outstanding matters of importance is the fourth Liberty loan campaign soon
to begin. Our organization to handle this loan
is being perfected and our publicity department, is, and for some weeks has been, actively
engaged in preparing public opinion for it.
Bank clearings at the principal cities of the
district for the month of July show an increase
of 26.3 per cent over the same period last year.
The building trade has been greatly restricted^
though there is some substantial improvement
going on. Permits issued at the principal

SEPTEMBER 1,1918.

cities of the district during the month of July
show a decrease in valuation of 21.1 per cent
over the same period last year.
Post-office receipts at the principal cities
of the district for July this year show an
increase of 84 per cent over the same period
last year.
On the whole, the situation is not good, and
there is some feeling of discouragement in the
district generally as to the outlook. It is
believed, however, that the final returns will
be rather more favorable than is now anticipated, and that we may reasonably hope for
conditions to readjust themselves somewhat
as time goes on.
DISTRICT NO. 12—SAN FRANCISCO.

Intense agricultural and industrial activity
has characterized the past month in this
district. The grain crops now being harvested
are disappointing on account of the small
average yield per acre. The total production
of wheat and corn, however, is in excess of last
year, but oats, barley, and hay are far below
last season's output. Fruit crops are, on the
whole, good. Transportation facilities, although
hard pressed, are handling the fruit shipments
satisfactorily. The labor resources of the
district are being strained to the utmost to
provide the workers required to ^harvest the
crops without loss and to supply men for the
essential industries, such as shipbuilding and
lumber. Women in large numbers are participating in the harvesting of crops, and under
favorable conditions. The weather has been
satisfactory for harvesting. There is a shortage
of water for irrigated lands and hydroelectric
plants. The prices of all farm products are
high.
The bankers of the district are beginning to
realize that the Government's financial requirements must have first consideration. The
quotas of the three issues of the present series
of certificates of indebtedness were not fully
subscribed, except in two States. The fourth
issue has been oversubscribed. This was accomplished in part as a result of a meeting
called in San Francisco by the Federal Reserve

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN".

Bank, attended by about 150 bankers from '
throughout this district for the purpose of
considering the matter of financing the Government. It was there agreed that banking resources should be conserved, and loans curtailed except for necessary expenditures connected with essential industries, and that member banks should aid their nonmember correspondents by accepting their notes secured by
Treasury certificates, which they in turn might,
if necessary, rediscount with this bank.
Interest rates in the principal coast cities are
steady, the prevailing rate for the month for all
classes of paper being almost uniformly 6 per
cent. In the inland centers, where agriculture
is the principal activity, rates ,are higher, the
prevailing rate for paper eligible for rediscount
with this bank being approximately 7 per cent.
Business failures in this district for June, as
reported by R. G. Dun & Co., were 102, compared with 151 in June, 1917. The amount of
liabilities was $675,000, compared with $696,053
in the corresponding month of 1917.
July bank clearings for 20 principal cities of
the district increased 11.3 per cent over the
previous month and 30.6 per cent over July,
1917.
Building for the same cities during July
totalled $5,022,000, being 6.6 per cent less than
the previous month and 10 per cent less than
July, 1917.
In spite of the low average yield per acre, the
wheat crop now being harvested in the district
is expected to be 83,870,000 bushels, nearly 20
per cent larger than last year. The crop of
oats and barley will be about 10 per cent
smaller than in 1917. The condition of corn
on August 1 indicated a yield of 7,888,000
bushels, nearly 10 per cent in excess of last year.
The hay crop of this district will not exceed
12,000,000 tons, about 15 per cent less than last
year. Owing to the decreased acreage planted
the production of potatoes is estimated at
33,468,000 bushels, nearly 30 per cent below
the 1917 yield.
The bean crop in California is estimated at
9,378,000 bushels, compared with 8,091,000
bushels in 1917.

891

Cotton growing has spread to the great inland valleys of California. Besides several
thousand acres in the San Joaquin Valley near
Tulare Lake, about 1,400 acres have been
planted in the Sacramento Valley near Chico.
It is reported that a cotton gin is to be erected
near Fresno to handle this season's crop.
The 1918 walnut crop of California is estimated at 15,000 tons, the same as in 1917.
About 95 per cent of the United States supply
comes from this State alone. The almond production this season is expected to be larger
than last year's crop of 3,000 tons.
It is predicted that 175,000 tons of raisins
will be produced in California this year, this
being 8 per cent more than last year and nearly
double the output of 1912.
The apple crop of Washington, Oregon, and
California is estimated at about 10 per cent
less in each State than last year's production
of 25,689,000 boxes, but the fruit, generally, is
of better quality.
Prunes in California are expected to produce
the normal crop of 150,000,000 pounds. In
Oregon the prune crop will be the largest ever
harvested, and is expected to be in excess of
50,000,000 pounds.
The peach crop is about 50 per cent below
normal. Pears in Oregon are also normal,
while in California they are yielding better
than an average crop. The Idaho fruit crop
is almost a complete failure this year owing to
unfavorable weather conditions.
Carload shipments of cherries, apricots,
peaches, pears and plums in California, for the
portion of the season up to August 9, number
6,565 cars, compared with 5,848 cars on the
same date last year. Prices for fruit in eastern
markets have been higher than usual.
Citrus fruits on August 1 showed an average
condition of 65, the June drop having continued
well into July.
Reports from the canneries of southeastern
Alaska state that the salmon pack promises to
be as large as last year's bumper production.
The Washington and Oregon pack will probably be normal. The Government will take
about 70 per cent of the output.

892

FEDERAL EESERVE BULLETIN.

Lumber production in Washington and
Oregon continues at a high level. For the
week ending August 7, 126 mills reported an
output of 79,012,793 feet, 1.16 per cent below
normal. These results accomplished under an
8-hour instead of a 10-hour working day
schedule may be explained in part by the fact
that the current product consists principally of
rough, large lumber instead of finished yard
stock.
The shipbuilding plants of this district continue to lead the country in speed of production.
The winners of all the record pennants, awarded
by the Emergency Fleet Corporation for the
month of June are on this coast.

GOLD SETTLEMENT FUND.

SEPTEMBER 1,1918.

Changes in the ownership of gold in the
banks' fund through transfers and settlements
during the five-week period amounted to 3.42
per cent of the total obligations settled, as
against 3.59 per cent during the preceding
four-week period. The continued high ratio
is due principally to heavy losses of gold by
the New York bank through the daily settlements. Net changes in the ownership of gold
since the commencement of the operation of
the fund of May 20, 1915, to August 22, 1918,
amount to 0.94 per cent of the total obligations settled during that period. Boston, Chicago, St. Louis, and Cleveland show the largest
gains through the shifting of credits in the fund
for the five-week period.
Net deposits of gold in the fund by reserve
banks during the five-week period amounted to
$69,945,000, while net withdrawals by reserve
agents totaled $10,500,000, resulting in a net
gain of $59,445,000 in the combined funds.
Aggregate balances to the credit of the banks
and agents was $1,288,131,000 on August 22,
compared with $808,247,000 on January 1,
1918, an increase of $479,884,000, or 59.4 per
cent.
Below are given figures showing changes in
the fund between July 19 and August 22, both
inclusive:

As a result of the action of interior banks in
drawing upon their New York correspondents
in payment for subscriptions to Treasury certificates of indebtedness, without a corresponding return movement of funds, the New York
Federal Reserve Bank's net debit balances in the
daily settlements through the gold settlement
fund for the five-week period ending August 22
aggregated $345,489,000, while net credit transfers of funds to New York from other Federal
Reserve Banks amounted to only $206,000,000, Arriounts of clearings and transfers through the gold settlefund by Federal Reserve Banks from July 19t 1918,
thus resulting in a net movement of funds away ment
to Aug. 22, 1918, both inclusive.
from New York of $139,489,000. For the sys[In thousands of dollars.]
tem combined clearings and transfers through
Total clearBalances
the gold settlement fund for the five-week peTransfers.
ings.
adjusted.
riod amounted to $4,523,258,000 averaging
$904,651,600 per week against a like average Settlements of—
944.335
July 19-25
46,487
80,000
of $1,058,497,750 for the preceding period.
July 26-Aug. 1
838,707
61,298
97,000
Aug. 2-8
812,104
108,972
15,000
Average weekly balances adjusted between the
Aug. 9-15
806,193
84,506
55,056
Aug. 16-22
853,803
86,481
21,000
reserve banks amounted to $77,548,500, as
Total
4,255,202
387,744
268,056
compared with $65,634,250 during the pre- Previously reported for 1918. 22,131,425
1,602,708
2,661,774
ceding period. Combined clearings and transTotal since Jan.1,1918.
26,386,627
1,990,452
2,929,830
Total for 1917
2,154,721
24,319,200
2,835,504.5
fers during the current calendar year to August
22 amount to 46.4 per cent of the total obligaCLEARINGS AND TRANSFERS.
tions settled since the commencement of the Total for 1918 to date
29,311,957
for 1917
27,154,704.5
operation of the fund May 20, 1915, and ex- Total
Total for 1916
5,533,960
Total for 1915
1,052,6-19
ceed the total obligations settled during the
Total clearings and transfers from May 20, 1915. to
year 1917.
Aug. 22,1918
63,053,276.5

893

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1918.

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

Total to July 18, 1918.

Federal Reserve Bank.
Decrease.

Balance to
credit
July 18,
1918, plus
Increase. net
deposits
of gold
since that
date.
27,404

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

453,661
.

8i,535.8
113,204.4
2,335.4
41,680
14,469.9
24,884,7
264.2
37,383.5
23,471.1
87,028

453,661 1 453,661

Total

Total changes from
May 20, 1915, to Aug.
22,1918.

From July 19, 1918, to Aug. 22, 1918, both inclusive.

Balance
Aug. 22,
1918.

Decrease.

42,659
260,745
56,982
37,111
10,952
25,275
43,012
775
14,625
19,064
13,445
45,171

76,493
121,256 "*""i39,"489"
62,390
59,662
26,767
21,886
3," 389*
76,529
29,180
10,215
4,410
34,129
8,591
4,854
42,718
2,453

569,816

Decrease.

Increase.

154,595

Increase.

33,834
5," 408"
22,551
15,815

""593,"i50"""

33,517
28,405

86,943.8
135,755.4
18,150.4
38,291
47,986.9
53,289.7

4,145.8

i5;"665*

154,595

61,238

52,448.5
18,617.1
81,575
597,295.8

597,295.8

Gold settlement fund—Summary of transactions from July 19,1918, to Aug. 22,1918, both inclusive.
[In thousands of dollars.]

Federal Reserve
Bank.

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

Aggregate Aggregate
Transfers.
withdeposits
Balance
last
drawals
and
Gold
Gold
statement with- deposits.
and
transfers
July 18, drawals.
transfers
from
1918.
to agent's agent's
Debit. Credit.
fund.
fund.
37,314
238,745
49,900 ""i,*566"
30,620
5,043
14,832
1,047
17,444
6
47,439
340
21,279
1,219
13,124
4
33,435
1,352
14,186
148
26,125
544,443

Total

10,659

5,345
22,000
11,497
6,534
3,167
3,637
12,900
1,215
1,301
1,133
611
11,264

105,000

15,504
1,352
12,148

5,345
22.000
15^982
11,534
3,167
16,887
46,433
1,215
1,501
1,133
fill
31,194

59,000
22,000
53,000

5,000

131,629

157,002

268,056

8," 900*
5,043
7,047
9,056
50,860
21,719

80,604 i

19,000
5,056
5.000

225,000
4,000
10,056

i9,666

5,000

Daily settlements, July 19,1918, to
Aug. 22,1918, both inclusive.
Net
debits.

Balance
in fund at
close of
business
Aug.
22,
Net
1918.
credits.

Total
credits.

Total
debits.

339,884
306.050
l,460;758 1,115,269
451,803
45S,267
402,235
429,786
229,028
234.787
124,862
121;473
548,702
(568,219
264;049
287,454
122,620
118,210
12,385
173,418
247,483
71,510
88,656
872
100,167
145,714

7,025
345,489
6,553
1,431
5,362
8,627

387,744

4,255,202

13,017
28.982
ii;121
5,238
119,517
23,405
7,975
74,065
18,018
45,547

76,493
121,256
62,390
59,662
26,767
21,886
76,529
29,180
10,215
34,129
8,591
42,718

387,744

569,810

40,859

Federal Reserve agents fund—Summary of transactions from July 19, 1918, to Aug.2,j 1918, both inclusive.
[In thousands of dollars.]
Balance
last statej ment,
i July 18,
j 1918.

Federal Reserve agent at—

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

•.
•..

Gold
Gold
I withi drawals. deposits.
i

49,500
100,000 !.
91,999 I
05,000 j
32, £00 i
26,820
139,218 !
29; 631 !
9,500 '
31,360
584
78,131
684,243 I

WithDeposits
drawals
through
for transtransfers
fers to
from bank.
bank.

2,000
2,000
2,000
1,000
500

10,500

Balance
at close
Total
of
business
deposits. Aug.
22,
1918.

1,000

1,000
2,000

Total
withdrawals.

4,485.
5,000 !.

7,400

'"6*666"
9,050
50,520
20,500

6,485
5,000
2,000
15,250
35,533

7,400

""6,"666'

48,500
100,000
92.914

;
9o;ooo
36,500

15,500

1,200
500

15,500

19,930

"i2*666"

19,930

*i2,"666'

20,620
154,205
50,131
8,300
46,360
584
70,201

76,398 I

120,970

120,970 I

718,315-

13,250
33,533
200 |.

9,050
50,520
20,500

894

SEPTEMBER 1,1918.

EEDEBAL RESERVE BULLETIN.

OPERATION OF THE FEDERAL RESERVE CLEARING SYSTEM, JULY 16 TO AUG. 15,1918.
Items drawn on banks
in Federal Reserve
city (daily average).

Items drawn on banks
in district outside Federal Reserve city (daily
average).

Items drawn on banks
in other districts (daily
average).1

Number, i Amount.

Number.

Amount.

6,555
$17,220,823
8,270 I
71,916,175
9,464 ! 21,423,692
6,127,735
2,406 |
5,041,926
1,656
1,170,282
1,600
21,933,000
9,660
7,893,861
3,050
6,816,580
2,625
8,703,020
2,513
1,541,033
1,204
2,812,005
1,226

Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas C i t y . .
Dallas.
San Francisco
Totals:
J u l y 15 t o Aug. 15, 1918
J u n e 16 t o July 15,1918
May 16 to J u n e 15, 1918
Apr. 16 to May 15. 1918
Mar. 16 to Apr. 15, 1918
Feb. 16 to Mar. 15, 1918
J a n . 16 to F e b . 15, 1918
Dec. 16, 1917, t o Jan. 15,1918..
Nov. 16 t o Dec. 15,1917
Oct. 16 to Nov. 15, 1917.
Sept. 16 to Oct. 15, 1917..
Aui?. 16 to Sept. 15, 1917.
July 16 to Aug. 15, 1917..
J u n e 16 t o July 15,1917..
May 16 to June 16,1917..
Apr. 16 t o May 15,1917..
Mar. 16 t o Apr. 15, 1917..

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
."
San Francisco
Totals:
July 16 t o Aug. 15, 1918
Juno 16 to July 15, 191.8
May 16 to J u n e 15, 1918
Apr. 16 to May 15, 1918
Mar. 16 to Apr. 15, 1918
Feb. 16 to Mar. 15, 1918
J a n . 16 to Feb. 15, 1918
Dec. 16, 1917, to J a n . 15, 1918..
Nov. 16 to Dec. 15, 1917
Oct. 16 to Nov. 15, 1917
Sept. 16 to Oct. 15, 1917
Aug. 16 to Sept. 15, 1917
July 16 to Aug. 15, 1917
J u n e 16 t o J u l y 15, 1917
May 16 to J u n e 16, 1917
Apr. 16 to May 15, 1917... .
Mar. 16 to Apr. 15, 1917

50,229
63,549
51,055
49,569
55,034
51,408
46,207
48,549
47,678
47,574
40,591
36,306
36,727
38,476
37,898
33,767
31,162

172,600,132
192,220,658
164,539,000
178,372,385
159,441,188
153,701,375
153,847,568
148,033,108
171,723,439
166,552,773
128,271,466
100,331,694
98,075,919
109,722,256
97,322,883
87,370,859
60,288,002

52,941
73,267
31,301
41,914
32,322
18,486
41,780
23,487
14,596
37,112
17,069
22,055

57.806,766
45,722,639
4,034,929
20,222,452
9,308,673
4,755,174
10,406,000
5,107,217
1,537,233
10,264,461
4,619,208
7,262,511

5,733
32,834
14,688
2,405
5,227
2,149
4,271
424
866
5,047
2,308
452

§7,042.176
16,667,865
10,406,550
3,757,293
5,980.125
2,580',203
1,218,000
1,216,533
1,449,222
6,159,050
824,970
1,200,304

406,330
391,264
295,056
287,061
271,506
259,531
227,312
253,458
240,756
232,723
212,935
182,191
175,625
182,622
179,193
171,093
168,607

131,047,263
143,751,620
113,407,619
114,099,520
98,201,962
113,134,162

76,404
74,128
54,132
54,888
53,725
51,259
44,654
49,342
46,353
45,393
40,216
32,564
31,273
33,941
33,150
33,428
32,008

58,502,291
72,555.997
55,703!310
58,513,363
53,391,691
48,556,709
42,852,372
52,175,578
58,458,952
53,089,827
44,984,581
40,648,168
37,981,022
46,762,698
38,314,393
36,836,934
34,693,542

89,065,135
84,440,761
64,296,210
47,476,204
41,323,621
4.0,353,278
41,004,720
38,599,461
36,473,163
32,666,959

Items handled by both
parent
bank
and
branches (daily aver-

Total (exclusive of items
drawn on Treasurer of
United States) (daily
average).

Items drawn on Treasurer of United States
(daily average).

Number.

Amount.

1,321
186
4.212
266
241

§5,792,685
542,940
783,509
273,000
235,557

2,166
807
4,196

1,353,290
761,811
1,512,025

13,395
9,757
7,623
8,294
7,793 I
7,700
7,128
7,718

11,254,817
19,212,816
12,355,115
15,141,604
8,942,976
6,413,071
5,836,958
3,402,035

Amount.

Number
of mem- Number of
ber banks Qonmomber
banks on
in
par list.
district.

Amount.

65,229
114,371
55,453
48,046
39,391
26,447
55,977
27,202
18,087
46,838
21,3SS
27,929

§32,069,765
134,306,679
35,865,171
35,900,165
20,873,664
9,289,168
33,830,000
14,453,168
9,803,035
26,479,821
7,747,022
12,786,845

7,315
38,265
6,772
3,565
1,458
2,980
8,210
5,065
555
3,380
1,831
1,927

84,065,396
17,911,067
4,478,135
2,190,714
500,538
760,875
4,350,000
1,199,268
189,135
365,000
348,018
4,707,500

417
703
630
785
549
398
1,192
498
831
978
701
612

248
346
325
706
359
318
2,344
1,024
1,201
1,985
243
1,107

546,358
538,984
407,866
399,812
338,058
369^ 898
325,301
359.067
3-13'. 787
325'690
293,742
251,081
243,625
255,039
250,241
238,288
231,777

373,404.503
427,741,091
346,005,044
366.126,872
319;977,817
321,805,317
282,785,364
292,585,856
314,623,152
283,938,810
220,732,251
182,303,483
176,410,219
197,489,674
174,235,737
160,680,958
127,648,503

81,323
82,536
77,750
60,771
59,228
58,991
48,224
38,130
33,806
30,426
26,797
23,492
19,533
19,100
16,344
15,925
12,582

41,003,646
47,181,4.67
39,054,003
30,928,185
31,563,675
25,827,757
21,316,033
21,116,293
27; 179,053
17,498,974
13,518,566
11,005,515
9,701,569
11.637,899
4; 414,508
3.597,865
2;643,408

8,294
8,212
8,165
8,113
8.059
s;oi3
7,972
7,909
7,823
7,826
7,747
7,718
7,683
7,666
7,651
7,634
7,625

10,206
9,761
9,710
9,475
9,450
9,425
9,319
9,268
9,321
9,210
9,052
8,934
8,837

8,607

1 Items drawn on banks m other districts (columns 5 and 6) also items handled by both parent bank and branches (columns 7 and 8) represent
duplications of items shown in columns 1 to 4. Such items are counted both by the Federal Reserve Bank or branch at which they are deposited
and also by the Federal Reserve Bank or branch to which they are forwarded for ultimate collection.

SEPTEMBER 1,

1918.

FEDERAL BESERVE BULLETIN.

895

DISCOUNT OPERATIONS OF THE FEDERAL RESERVE BANKS.
Discount operations of the Federal Reserve
Banks during the month of July aggregated
$3,343,456,443, compared with $3,161,920,534
for June and 8460,733,354 for July, 1917, the
month following the consummation of the
first Liberty loan. Of the total bills discounted
during the month, the share of war paper, i. e.,
member banks' notes, also customers7 paper
secured by United States war obligations, was
73.9 per cent, compared with 82.9 per cent
the month before and 84.8 per cent for May of
the present year. About 58 per cent of the
total paper and over 64 per cent of the war
paper discounted by all the Federal Reserve
Banks during the month, as against 70 and 80
per cent during June, fall to the share of the
New York bank. The largest increases in
discount operations for the month, as compared with June, mainly under the head of war
paper, are shown for the Boston, Cleveland,
Chicago, and San Francisco banks.
Discounts of member banks7 notes secured
by eligible paper totaled $162,910,586, compared with $85,607,976 the month before, the
Federal Reserve Banks at Chicago and Kansas
City accounting for over 90 per cent of
the total. Trade acceptances discounted by
all the banks during the month totaled
$14,275,040, of which $13,712,264 represented
transactions in the domestic trade and
$562,776 transactions in the foreign trade.
Over 29 per cent of the discounted domestic
trade acceptances are reported by the New
York bank and about 17.1 per cent by the
Cleveland bank, while Minneapolis, Atlanta,
and Richmond each show over $1,000,000 each
of this class of paper. The totals above given
are exclusive of §4,999,753 of foreign trade
acceptances and of $582,241 of domestic trade
acceptances purchased during the month in
open market by the New York, Cleveland, and
San Francisco banks.
Other discounts, chiefly unsecured paper,
also paper supported by other than Govern-

ment securities, totaled $696,871,352, as against
$439,252,253 the month before and $399,091,341 for May of the current year.
By far the larger share of the paper discounted during the month, viz, 91 per cent,
was 15-day paper, i. e., paper maturing within
15 days from date of discount with the Federal
Reserve Banks. For the New York bank this
percentage, because of the preponderating
amount of members7 collateral notes handled,
is as high as 97 per cent. Of the $25,263,873 of
6-month agricultural and live-stock paper discounted during the month, Kansas City is
credited with over 33 per cent and the Minne
apolis and Dallas banks combined with about
30 per cent, Philadelphia, San Francisco, and
Chicago also reporting substantial amounts of
this class of paper.
Average maturities of paper discounted at
all the banks, except New York, Minneapolis,
and Dallas, were shorter than for June, though
for the system as a whole the average maturityworks out at 12.85 days as against 10.09 days
in June, largely because of the longer average
maturity of the paper discounted by the New
York bank. Average rates for all the banks,
except Kansas City and Dallas, work out at a
lower level than the month before, the average
July ra;e for all the banks being 4.37 per cent,
compared with 4.42 per cenb the month before.
Minneapolis, Dallas, and Kansas City, in the
order named, show the longest average maturities of paper discounted during the month, also
the highest average rates, Kansas City with
5.24 per cent showing the highest average rate,
and Minneapolis with 42.51 days showing the
longest average maturity of the paper disj
counted during the month.
On the last Friday of the month the bank j
held a total of $1,302,151,000 of discounted
paper, as against $869,175,000 held on the last
Friday in June and $138,459,000 on the corre
sponding date in 1917. Of the total discounts
on hand the share of war paper was 52.2 per

896

FEDERAL RESERVE BULLETIN.

cent, compared with 48.8 about the end of June
and 62.8 per cent about the end of May. At
the New York bank this share was 68.7 per cent,
at the Boston bank as high as 70 per cent, and
at the Philadelphia bank over 62 per cent.
Discounted trade acceptances on hand totaled
$17,379,000, of which over 1.6 millions represents the holdings of discounted foreign trade
acceptances. Cleveland leads in the amount
of domestic rade acceptances held, followed by
New York and Boston. Agricultural paperholdings totaled $36,456,000, or 2.8 per cent of
the total discounted paper on hand, while livestock paper totaled $61,618,000 (or 4.7 per cent
of the total, of which about 56 per cent is reported by the Kansas City bank.
As the result of further accession to membership of State banks and trust companies the
number of member banks shows an increase
from 8,218 a the end of June to 8,323 at the

SEPTEMBER 1,1918,

end of July. The number of member banks
accomm.odat.id during the month'was 3,462, or
about .42 per cent of the total membership at
the close of the month. In the following exhibit are given the number of member banks in
each Federal Reserve district at the end of
July and the number of discoun ing members
for the month under review.
of
Number of Number
dismember banks
counting
banks on
during
July 31.
July.

Federal reserve district.

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

418
695
651
787
550
414
1,190
494
828
984
704
610

182
323
215
166
268
214
543
139
399
327
424
232

8,323

3,462

Bills discounted during the month of July, 1918, distributed by classes.
Member banks' collateral notes.
Customers'
paper secured by
Secured by
Liberty
Liberty
bonds or
bonds or
United
United
States cerOtherwise
secured.
tificates of States cerindebted- tificates of
indebtedness.
Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis..
Kansas City..
Dallas
San Francisco
Total...

Trade
acceptances.

All other
discounts.

Total.

898,378,346 $8,144,000 i $551,835 319,966,536 3143,716,885
§16,676,168
32.148.364 1,559,668,587
2 4,540,077 338,684,760 1,935,041,788
67,222,418
9,801,345
513,811 56,928,502 134,466,076
82,587,846
7,147,374
2,352,044 42,689,663 134,828,927
52,000
140,085,437
1,108,428 17,829,429 163,184,244
1,215,750
2,945,200
36,950,919
1,110,360 24,201,370
125,698
62,823,347
435,000
198,153,410 126,593,975
4,895,398
868,740 48,814,937 379,326,460
68,299,067
1,354,693 34,425,617 105,035,887
846,510
110,000
26,689,337
59,548,332
1,416,412
3,520,568
216,619 27,675,396
37,389.208 21,441,473
228,241
83,131,838
866,641 23,206,275
33,053,750
612,202
36,585 16,948,929
1,222,820
51,874,286
43,296,900
725,207 45,499,938
781,328
175,000
90,478,373
77,624,240 J2,391,775,225 162,910,586

i Includes 825,994 in the foreign trade.

14,275,040 696,871,352 3,313,45(5,443

2 Includes $536,782 in the foreign trade.

897

FEDERAL RESERVE BULLETIN.

SEPTEMBEK 1,1918,

Amounts of discounted payer, including member banks1 collateral notes, held by each Federal Reserve Bank on the last Friday
in July, 1918, distributed by classes.
[In thousands of! dollars, i. c , 000 omitted.]
Customers'
paper
secured byLiberty
Livebonds or
stock
United
paper. States
certificates of
indebted-

Agricultural
paper.

Banks.

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

Member banks' collateral notes—
Secured by
Liberty
bonds or OtherUnited
wise
States certificates of secured.
indebtedness.

$30
|
j
I
!
I
I
!
i
j

Total
Per cent

81
24,
9,
7,

$2,379
5
928
91
1,950
8,812
34,266
6,990
6,197

I
1,

145,324
11.2

| 36,456
;
2.8

116
170
4,346
2,317
6,519
291
5,077
3,353
7,162
7,075

Includes $25,994 in the foreign trade.

§34,765
210,933
26,384
36,023
22,916
15,996
92,022
29,134
8,992
17,163
15,119
18,332

$367
420
75,258
56
1,167
10,511
636
175

527,779
41.0

88,590
6.8

Trade Allother
acceptdisances. counts.

Total.

1,027

$25,042
119,846
30,039
46,474
23,489
17,542
55,483
26,165
29,681
11,790
7,639
31,815

396,395
81,391
" 99,025
59,810
38,262
238,441
59,666
55,690
78,255
38,216
65,826

17,379
1.3

425,005
32.2

1,302,151
100.00

i $1,584
M,364
647
4,098
1,267
953
1,176
1,059
360
844

$91,174

Includes 81,577,740 in the foreign trade.

Bills discounted by each Federal Reserve BavJc during July, 1918, distributed by rates of discount; also average maturity and
rates of bills discounted by each bank during the month.
4J per cent.

4 per cent.

"Boston
New Y ork

Philadelphia
Cleveland
Richmond
Atlanta
Chicago
.
St. Louis
Kansas City..
D&llas-.
San Francisco
Total.

Amount.

Discount.

§114,211,102
1,879,818.368
119,771)175
81,118,536

$100,899
1,091,966
157,225
111,339

5:4,322.900
337,939)633
83,935,154
31,008,020

85,621
535,347
129,065
48,768

31,678,850
60,156,325
2,796,960,063

5 per cent.

Amount. Discount
BosioYi

Now York
Philadelphia
Cleveland
Richmond.

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

342,367
8,410
15,648

,
... .
I 15,143,223

Amount.

4\ per cent.
Amount.

Discount.

129,911
9,974
62,188

14,512,559

157,245

Discount.

Amount.

Discount.

53,396
91,729

814,518,183
31,662,977
9,469,705
39,177,059
143.171,080
120,418
4.441,243
'640,448
1,322,331
37,558,292
555,497
779,323

S85,401
192,819
79,470
58,718
124,808
926
35,136
4,627
9,800
58,801
4,504
7,147

$523,241
1,830,899
459,057
1,729.721
213)798
822,026
920,626
1,228,785
228,246
22,551,719
175,115
690,075

S2,596
12,601
2,917
7,338
287
4,279
4,912
6,722
1,687
41,113
1,152
4,806

$14,421,992
21,721,134
4,750,491
12,757)867
4,105,172
6,956,529
26,304,487
19,049,210
8,460,]98
769,294
6,645,994
26,087,228

£104,031
179,761
26,130
81,051
11,534
52,334
172,638
156,105
46,797
4,389
37,268
194,303

2,405,355

283,416,556

662,157

31,373,308

90,410

152,029,596

1,066,341

5£ per cent.

Total.

Amount. Discount. Amount. Ti iscount.

$45,744
550,971

"6," 299*490" "70," 059"

13,802,712
3,519,340

124,750
65,850

44,060,467 | 430,956

17,918,767

200,741

2,765,422
17,697,686

Discount.

Average
rate
(por cent).*

8293,512
1,477,839
266,014
259,335
275,792
153,398
856,860
299,866
342,119
393,745
232,229
344,679

19.72
6.77
17.19
16.16
13.15
20.42
19.02
23.42
42.51
33.61
34.05
29.87

4.32
4.11
4.14
4.29
4.63
4.30
4.27
4.39
4.86
5.24
4.73
4.59

339,458 3,343,456,443

5,195,418

12.85

2 4.37

9,252
813,486
2,269,689
182,290
4,016,978
8,449,821

Amount.

Average
maturity
in days.

i $143,716,885
jl, 935,041,788
i 134,466,076
I 134,828,927
163,184,244
62,823,347
379,326,460
105,035,887
59,548,332
83,131,838
51,874,286
90,478,373

$615
. 692
272

587,988
7,450,782

4f per cent.

264
46,639
3,347
77,822
164,692
46,694

1 Boston and New York calculated on a 365-day basis; all other Federal Reserve Banks on 360-day basis.
a Average discount rate on all paper discountedWorks out at 4.35 per centif calculated on a 360-day basis, and at 4.41 if calculated on a uniform
365-day basis.

898

SEPTEMBER 1, 191S,

FEDERAL BESERVE BULLETIN.

Acceptances bought in open market and held by Federal Reserve Banks as per schedules on file with the Federal Reserve Board
.v,y
or as reported by the Federal Reserve Banks on dates specified, distributed by classes of accepting
institutions.

Bankers' acceptances,
Date.

Nonmember Nonmember
trust
companies. State banks.

Member
banks.

Foreign
bank
branches
and
agencies.

Private
banks.

Total.

Trade
acceptances
bought in
open
market.

Total
acceptances.

19.15.
Feb. 22.
Apr. 5..
July 3 . .
Oct. 4..

$93,000
3,653,000
4,342,000
9,000,000

S7,820,000
5,267,000
4,898,000

15,494,000
21,000,000
32,989,000
37,798; 000

'm'ooo'

593,000
11,593,000
9,770,000
14,373.000

7,160,000
13,572,000
IS,921,000
2i;782,000

362,000
473,000
471,000
712,000

822,000
3,262,000
11,830,000
9,944,000

23,838,000
38,808,000
64,211,000
70,236.000

66,803,000
43,979,000
108,597,000
131.997,000
227,717,000

34,625,000
20,328,000
30,390,000
14,987,000
8,163,000

1,502,000
689,000
3,333,000
2,193,000
3,179,000

18,224,000
16,830,000
38,082,000
21,708,000
20,137,000

$200,000
3,805,000
2,286,000
7,657,000

121,154.000
82,026', 000
184,785,000
173,171,000
266,853,000

4,585,000
1,144,000
4.660,000
6;942,000
6,383,000

125,739,000
83,170,000
189,445,000
380,113,000
273,236,000

240,259,000
252,747,000
275,144,000
248,390,000
207,917,000
173,698,000
154,614,000

5,547,000
1,648,000
1,360,000
054,000
1,330,000
1,992,000
1,129,000

3,522,000
3,856,000
1,884,000
2,907,000
5,168,000
459,000
7,302,000

22,099,000
28,419,000
31,779,000
25,921,000
26,217,000
21,478,000
18,082,000

6,947,000
7,097,000
8,562,000
10,304,000
8,398,000
12,315,000
8,975,000

278,374,000
293,767,000
318,729,000
288,176,000
249,030,000
209,942,000
190,102.000

6,363,000
5,456,000
8,015,000
9,279,000
8,276,000
7.418,000
7; 781,000

284,737,000
299,223,000
326,744,000
297,455,000
257,308,000
217,360,000
197,883,000

1916.
Jan. 3..
Apr. 3.
July 3.
Oct. 2.
1917.
Jan. 1
Apr. 2
July 14-16.
Sept. 29...
Dec. 3 1 . . . .
1918.
Jan. 31..
Feb. 28.
Mar. 31.
Apr. 30.
May 31.
June 29.
July 31.

893,000
11,593,000
9,770,000
14,373,000

$110,000
161,000
343,000

810,000

23,838,000
39,030,000
67.638,000
72;542,000

8722,000
3,422,000
2,306.000

Acceptances bought in open market and held by each Federal Reserve Bank on July 31,1918, distributed by classes of accepting
institutions.
[In thousands of dollars, i. e., 000 omitted.]
NonNonMember member
member
trust
banks.
State
combanks.
panies.
Boston..-. . . . .
New York
Philadelphia
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
Total

19,695
75,013
12,509
15,003
5,114
3,398
8,179
2 325
345
129
1.120
11,784
154,614

S777
250*

Private
banks.

Foreign
bank
branches
and
agencies.

Domestic. Foreign.

4i2

1,021

342

7,302

18,082

8,975

190,102

52,406
12,988
542
1,102

$371
7,226
657
379

1,129 j
i

Total.

$22,472
102,403
14,131
16,784
5,114
3 398
8,197
2 348
345
129
1,120
13,661

S6,399
423
50
18

i
i
102 |

— - ... ..
. ....
Trade acceptances bought in
open market.

51,872
122

1,994

Total.

Total
acceptances.

5,137

$22,472
104,857
14,131
16,974
5,114
3,398
8,197
2,348
345
129
1,120
18,798

5,787

7,781

197,883

$582
68

$2,454
190

899

FEDEEAL EESEEVE BULLETIN.

SEPTEMBER 1,1918.

Amounts of bills discounted and acceptances and warrants bought by each Federal Reserve Bank during July, 1918, distributed
by maturities.
15-day maturities.
Discounts. Acceptances.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St.Louis
Minneapolis
Kansas City
Dallas
San Francisco

$114,197,595
1,878,772,433
120,460,682
120,671,820
144,178,737
54,273,150
342,122,404
83,789,029
~" 947,711
59,948,477
34,656,687
60,329.248

$872,
2.679,
'109,
282,
247,
50,

Total
Per cent

3,044,347,973

6,496,558

30-day maturities.

Warrants, i

Total.

j Discounts.

5115,070,329
;], 881,451,629
120,569,805
120,954.720
I 144,426,'437
54,323,150
342,122,404
83,814,029
30,947,711
59,948,477
34,756,687
62,459,153

25,000
100,
2,129,

.|3,050,844,531
.!
88.0

Acceptances.

$6,222,691
9,485,535
3,741,774
3,016,918
2,209,974
1,460,313
5,195,146
2,726,155
2,328,383
1,666,414 I
1,767,446 !
4,827,698

S3,143,522
12,960,777
451,527
848,347
1,691,111
214,148
1,088,717
70,000

44,648,447

22,259,172

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

Total
Per cent

j
j
i
i
!
!
|
|
:
|
i

Warrants.

812,869,905
20,750,256
2,614,424
5,570,713
6,417,812
3,079,607
14,057,551
6,785,940
6,732,978
5,733,702
4,835,067
10,338,230

52,891, 434 j . . .
20,755, 221 j
2,061, " ' " '
4,186,
2,196,
956,
1,093,
227,

99,788,185

9,650,303 j

52,
20/
4,209,

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

Accept- Warances. ; rants.

31,250 I
§117,367
128,410
2,624,898
200,000 i
45,744
553,227
3,000 '
598,724
146,371 iS16,600
2,363.040 1,090,273 i
I82',290
4,020,911
8,448.686
3,600;825
2,579,751
137,199 ;
25,263,873 1,608,093 ! 16,600

$9,366,213
22,446,312
4,193,301
3,865,265
3,901,085
1,674,461
6,283,863
2,796,155
2,328,383
1,666,414
2,017,446
6,368,721

250,000
1,541,023

67,907,619
1.9

Total.
i 315,761,339
| 41,505,477
4,675,664
9,756,726
8,614,629
4,036,560
15,150,651
7,013,045
6,732,978
5,786,239
4,855,067

$10,309,327
25,905,154
5,024,298
5,523,732
9,824,494
3.411,553
loj588,319
11,552.473
15,518,349
7; 334,559 I
7,014,261
12,403,446

85,028,918
26,467,535
3,047,198
5/635,669
1,281,000
557,612
6,258,175
699,285
130,000
76,311

139,436,

129,409,965

54,440,578

4.0

Over 90-day maturities.
Discounts.

$50,521

5,248,875
50,521

6148,617
245,744
556,227
761,695
3,453,313
182,290
4,020,911
8,448,686
3,GOO,825
2,716,950

Discounts.

Acceptances.

Warrants.

Total.

183,901,064
5.3

Dis- Accept- •War- Total.
ances. rants.

8155,684,743
8143,716,885 $11,967,858
1,935,041,788 62,862,729 850,521 1,997; 955,038
140,214,124
134,466,076
5,748.048
145,981,856
134,828, 927 11,152', 929
168,653,872
163,184,244
5,169.628
64,765.011
62,823,347
1,9251064 16,600
388,856,725
379,326,460
9.530.265
106,057,277
lj0211390 ;
105,035,887
59,678,332
130,000
59,548,332
83,260,6S6
83,131,838
128,848
52,244,286
370.000
51,874,286
103,745,258
90,478,373 13,266;885

92.3
96.9
95.9
92.4
96.8
97.0
97.5
99.0
99.8
99.8
99.3
87.2

67,121 3,467,097,208
100.0

96.4

26,888,566 3,343,456,443 123,573,644

S15,338;245
52,423,210
8,071,496
11,159,401
11,105,494
3,969,165
21,846,494
12,251,758
15,643,349
7,410,870
7,014,261
17,652,321

Per cent.

Total.
Total.

Total.

90-day maturites.

60-day maturities.
Discounts. Acceptances.

Warrants.

7.7

3.1
4.1
7.6
3.2
3.0
2.5
1.0
.2
.2
.7
12.8

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

900

FEDERAL RESERVE BULLETIN".

SEPTEMBER 1,1918.

Maturities of discounts, acceptances, and municipal warrants held by each Federal Reserve Bank on Friday, July 26, 1918.
[In thousands of dollars; i. e., 000 omitted.]
1 to 15 days.
Acceptances
bought.

Bills discounted.

16 to 30 days.

Municipal
warrants.

Bills discounted.

Total.

Acceptances
bought.

Municipal
warrants.

Total.

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

$46,499
314,462
62,498
02,107
34,201
27,570
173,362
41,128
15,464
30,230
17,853
27,260

S9,092
7,027
3,008
2,103
831
556
3,465
602
120
50
800
3,717

§55,591
321,489
65,506
64,210
35,032
28,130
176,827
41,730
15,584
30,280
18,653
30,977

$20,185
39,241
8,548
13,574
6,238
2,758
26,733
3,647
5,199
6,033
1,753
8,627

83,046
37,976
3,956
2,569
670
725
3,735
1;231
60
500
3,225

$23,231
77,217
12,504
16,143
6,908
3,483
30,468
4,878
5,259
6,033
2,253
11,852

Total.
Percent

852,634

31,375

884,009

142,536

57,693

200,229

31 to 60 days.

Bills dis- | ^ ea sc counted. | b ^ h t .
Boston
New York
Philadelphia..
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis...
Kansas C i t y . . .
Dallas
San Francisco.

$16,344
26,784
6,269
18,054
11,055
4,050
17,640
7,717
15,244
12,365
4,592
16,800

Total.
Percent

158,114

i
i
I
|
!
I
i

Municipal
warrants.

38,405
46,618
4,681
7,518
1,568
1,795
4,523
171
120
3
20
7,880

$51

Acceptances
bought.

$24,749
73,453
10,950
26,172
13,223
5,845
22,183
7,888
15,364
12,368
4,612
24,686

88,116
15,907
4,053
4,640
6,541
2,964
16,291
5,975
11,696
14,706
8,085

83,754
12,412
1,785
3,580
1,049
487
5,561
369
110
76

241,473

108,542

32,902

Municipal warrants.

Bills dis- Acceptances
Total. counted.
bought.
30
1
23
50
1,175
930
4,415
1,199
8,087
14,921
5,933
3,571

91,
396,
81
99,
59,
38,
238,
59,
55,
78,
38,
65,

30
1
23
50
1,175
920
4,415
1,199
8,087
14,921
5,933
3,571

. Total
Per cent

40,325

10 40,335 1,302,151

205,274

Total.

$11.870
28,319
5,838
8,226
7,590
3,452
21,852
8,344
11,806
14,782
8,085
13,281

141,445

Percentages.

Municipal warrants.

24,297

104,033
13,430
15,776
4,118
3,563
17,284
2,373
410
129
1,320
18,541

Municipal
warrants.

3,713

Total.

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

Bills discounted.

Total.

Over 90 days.
Bills dis- Acceptances
counted. bought.

61 to 90 days.

Total.

Accept- MuniciBills disances pal war- Total.
counted/1. bought.
rants.

115,471
500,479
94,821
114,801
63,928
41,840
255,725
62,039
56,100
78,384
39,536
84,367

79.0
79.2
85.8
86.3
93.6
91.5
93 2
96! 2
99.3
99.8
96.7
78.0

21.0
20.8
14.2
13.7
6.4
8.5
6.8
3.8
.7
.2
3.3
22.0

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

1,507,491

1,078.6
86.4

121.4
13.6

100

SEPTBMBBE 1 , 1 9 1 8 .

901

FEDERAL RESERVE BULLETIN.

Total investment operations of each Federal Reserve Bank during the months of July, 1918 and 1917.
Bills bought in open market.
Bills
discounted for
i
members
Trade •
and Federal
Bankers'
Reserve
accept- :
Total,
acceptances.
Banks.
ances. j

Municipal warrants.

City.

State.

All

Total.

other.

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

San Francisco
Total, July, 1918
Total, July, 1917

$143,716,885
1,935,041,788
134,466,076
134,828,927
183,184,244
62,823,347
379,326.460
105,035; 887
59,548,332
83,131,838
51,874,286
90,478,373

$11,967,858
60,480,362 VS2,382,367"
5,748,048
li;112,929
M0,000
5,469,628
1,925,064
9,530,265
1,021,390
130.000
128; 848
370,000
10,107,258 2 3,159,627

3,343,456,443
460,733,354

117,991,650
63,629,153

5,581,994
3,234,912

$11,967,858
62,862,729 "*So6,'52i"
5,748,048
11,152,929
5,469 628
1,925,064
600
9,530 265
1,021,300
130,000
128,848
370,000
13,266,885
123,573,644
66,864,065

51,121
100,000

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

1-year

per cent.

4
per cent. per cent. Treasury
notes.

$50,000
$50,000

§200
500
41,000

United
States
certificates
of indebtedness.

Total.

-919,366,000
55,000
490,000
225,000
17,500

$19,416,000
55,000
490,200
225,500
108,500

1,364,000
122,500

157,000

1,666,666
50,000
67 000 ii8,"299,"656"

Total, July, 1918
Total, July, 1917

1,050,000

41,700

$1,370,000

$16,000

16,600

16,000

67,121
100,000

Total investment operations.

United States securities.

2
3
per cent. per cent.

$50,521

21,797,000

July, 1918.

July, 1917.8

$155,684,743
2,017,371,038.
140,269,124
146,472,056
168,879,372
64,873,511
388,856,725
106,057,277
61,042,332
83,383,186
52.244,286
104; 902,258

$45,833,930
288,878,639
33,648,283
17,613,760
38,483,310
4,764,512
56,624,084
16,724,850
8,821,257
19,411,691
6,800,881
9,828,872

22,938,700 3,490,035,908
5 19,736,650

547,434,069

1,157,000

1 Includes $582,241 in the domestic trade.
s In the foreign trade.
3 Exclusive of purchases of United States certificates of indebtedness.

United States securities held by each Federal Reserve Bank on July 31, distributed by maturities.

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

United States bonds with circulation
privilege.

Other United States securities, including 1-year Treasury notes and
Treasury certificates of indebtedness, available as security for
Federal Reserve Bank notes under silver act of Apr. 23,1918.

per cent 3 per cent 4 per cent
2 per cent 2Panamas
loan of
loan of
consols of
of
1925.
1918.
1936-1938.

3 per cent 3 per cent 3 per 31-per cent 4 per cent 4i^percent Umted
States cerconver1-year
Liberty Liberty Liberty tificates
cent
of
sion
Joan of indebtedloan of
loan of loan of
bonds of Treasury
notes.
1947.
1928.
1942-1947.
1961.
ness.
1916-17.

$750
50
915,100
240,600
1,862,500
100

7,155,850
2,450,900
2,428,750
15,054,600

237,000
21,000
367,300
260
22,240
281,500

!
$529,000 31.416,000
.1.
1,255,400 1,'47ft, 000
$100,000 !
549,200 1,181,000
400,000
2,658,660 $678,200 414,800 1,660,000
1,285,000
"I6J366" 965,000
2,581,000 1,768,000 427,400 2,112,000
1,153,300 321,000
1,080,000
114,800
880,000
1,199,180
838,500 1,168,000
824,400
1,233,000 901,000
1,000,000
1,666," 666'

92<J, 400 8,018,840 14,270, GOO 6,526,300 14,365,000

S383,850
201,550
11,850
1,966,650
42,850
13,000
S400

500

900

22,100
700
21,450
2,664,000

$26,550
5,300
786,250
""37," 750'
490,400
83,050
8,100

* 16/566'
1,448,300

$181,260

Total.

§2,537,410
5,475.300
2,978', 900
7,813,660
2,743,200
1,761,450
9,201,650
2,554,400
59,000 2,255,220
107,500 10,146,690
4,879,650
"Il7,"666" 4,578,100

$2,437,000

385,350
500
4,650
1,480
11,950

50,500
50,000
225,000
16,500

585,190 3,062,500 56,925,730

902

SBPTHMBBB 1,1918.

FEDERAL RESERVE BULLETIN.

RESOURCES AND LIABILITIES OF FEDERAL RESERVE BANKS.
Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system at close of business on Fridays,
26 to August 23, 1918.

July

RESOURCES.
[In thousands of dollars; i. e., 000 omitted.]

Boston.

Gold, in vault and in
transit:
July 26
August 2
August 9
August 16
August 23
Gold settlement fund,
Federal Reserve
Board:
July 26
August 2
August 9
August 16
August 23
Gold with foreign
agencies:
July 26
August 2
August 9
August 16
August 23
Gold with Federal
Reserve agents:
July 26
August 2
August 9
August 16
August 23
Gold r e d e m p t i o n
fund:
July 26
August 2
August 9
August 16
August 23
Total gold reserves:
July 26
August 2
August 9
August 16
August 23
Legal-tender notes,
silver, etc.:
July 26
August 2
Aug. 9
Aug. 16
Aug. 23
Total cash reserves:
July 26
Aug. 2
Aug. 9
Aug. 16
Aug. 23
Bills discounted for
j: members
and
Federal Reserve
Banks:
July26.
Aug.2
Aug. 9
Aug. 16
Aug. 23
Bills bought in open
market:
July 26
Aug.2
Aug.9
Aug. 16
Aug. 23

New
York.

Philadelphia.

Cleveland.

Richmond.

St.
Atlanta. Chicago. Louis.

Minneapolis.

Kansas
City.

8,710
8,241
8,375
8,425

337
368
194
302
219

San
Francisco.

Total.

6,348
6,416

16,130
14,438
13,017
12,346
12,725

418,012
408,470
395,410
385,017
385,072

Dallas.

8,088
8,394
3,721
2,955
3,296

299,844
290,854
291,206
287,062
287,040

1,104
1,360
380
441
279

35,230
36,428
30,445
25,424
22,339

6,330
6,387
6,136
6,208
6,280

6,898
6,788
6,787
6,849
6,798

27,023
29,275

1,691
1,800
2,004
1,837
1,980

38,787
45,776
69,066
69,964
79,697

253,326
294,005
243,463
172,134
103,553

49,728
48,377
52,357
63,970
48,481

46,791
42,313
52,518
53,079
67,788

19,248
13,716
14,446
25,178
27,830

19,616
16,632
16,835
20,083
19,251

50,477
61,754
51,899
64,632
81,046

22,261
29,689
34,134
29,421
34,032

16,341
6,584
9,704
13,885
11,383

37,438
28,948
30,633
39,098
30,201

13,153
7,149
7,741
12,108
7,299

31,611
29,196
23,558
36,531
42,499

598,777
623,119
606,354
600,083
553,060

814
679
679
408
408

4,012
3,345
3,345
2,011
2,011

814
679
679
408

1,046
873
873
525
525

407
339
339
204
204

349
291
291
175
175

1,628
1,357
1,357
816
816

465
388
388
233
233

581
485
485
291
291

407

640
533
533
321
321

11,628
9,696
9,696
5,829
5,829

56,445
56,224
60,847
60,612
60,185

279,859
279,023
279,023
278,539
277,893

99,389
99,031
97,059
96,541
113,780

110,629
110,497
116,550
121,772
126,174

32,950
32,613
36,514
36,356
38,278

26,339
23,312
25,353
24,135
27,424

118,392
119,574
146,343
151,157
156,622

31,496
31,496
31,389
46,830
51,775

23,352
23,195
23,027
22,862

33,497
33,497
33,368
36,790
48,711

13,980
13,980
13,928
13,915
13,873

83,848 910,420
80,194 902,793
77,123 940,692
71,824 961,498
81,190 1,018,767

3.165
3! 394
3,611
3,749
4,070

14,825
14,875
15,000
15,000
15,000

3,500
4,000
4,500
5,000
5,000

965
1,002
1,324
754
1,007

305
193
109
1,025
924

2,271
2,692
2,768
3,061
2,355

3,556
3,812
3,959
4,170
4,511

2,402
2,372
2,341
2,626
2,611

2,039
2,140
2,219
2,305
2,415

1,085
1,088
1,070
1,106
1,101

1,250
1,250
1,248
1,248
1,248

35,363
36,818
38,149
40,116
40,323

59,240
53,248
57,544
68,971
73,516

55,473
48,715
52,034
54,303
56,003

201,472
213,620
230,367
247,798
273,270

58,317
65,725
70,258
80,947
90,631

51,151
40,705
43,881
47,072
45,318

72,938
64,386
65,750
77,587
80,523

35,019
29,007
29,592
33,823
29,040

132,229
124,361
-t -1
114,231
121,094
136,816

1,974,200
jl,980,896
-1 nf\n
1,990,301
1,992,543
2,002,051

697
706
594
641
802

348
371
340
434

2,913
2,396
2,090
1,725
1,872

918
650
480
461
607

139
182
151
112
106

295
338
341
296
402

1,524
1,448
1,698
1,292
1,182

209
189
248
365
185

55,129
54,022
54,222
52,980
52,215

59,937
53,954
58,138
69,612
74,318

56,102
49,063
52,405
54,643
56,437

204,385
216,016
232,457
249,523
274,142

59,235
68,375
70,736
81,408
91,238

51,290 73,233
40,867 64,724
44,032 j 66,091
47,784 77,883
45) 424 80,925

36,543 132,438 2,029,529
30,455 124,550 2,034,918
31,290 114,479 2,044,523
35,115 121,459 2,045,523
30,222 137,001 2,055,266

i
55,690 j 78,255
59,781 77,592
55,715 71,810
" '-""
57,760 66,394
64,288

38,216
29,941
37,795
39,556
42,917

69,959
77,466
78,091
75,725

1,302,151
1,270,919
1,332,473
1,285,368
1,393,795

1,320
1,120
971
470
634

18,541
18,851
21,203
19,847
21,117

205,274
209,185
208,557
212,204
236,526

27,419
27,123

107,299
114,467
137,924
137,688
147,656

851.866
882', 102
832,037
754,746
685,497

154,535
153,447
154,975
166,360
167,948

194,661
191,113
201,710
201,554
217,833

2,564
2, 0O8
2,402
2,629
2,344

44,197
44,308
44,948
43,941
43,231

687
550
550
805
730

109,863
116,975
140,326
140,317
150,000

880,063
926,410
878,985
798,687
728,728

155,222
153,997
155,525
167,165
168,678

357
419
349
373
320
195,018
191,532
202,059
201,927
218', 153

91,174
84,470
84.957
64i 981
67,414

396,395
309,158
412,455
442,065
552,409

81,391
82,981
92,346
93,985
85,183

99,025
94,938
98,718
92,328
82.512

59,810
63,275
6-4,393
55,434
56,567

38,262
42,153
45,456
43,555
46,965

238,441
237,785
233,984
202,564
209,629

58,886
57,378
48,655

24,297
20,636
18,938
21,616
26,440

104,033
116,722
113,106
112,692
125,276

13,430
14,026
11,684
11,326
11,035

15,776
17,112
19,112
21,960
21,116

4,118
6,021
7,072

3,563
3,263
3,489
3,361
3,122

17,284
8,583
9,549
13,180
14,714

2,373
2,347
2,721
2,055
1.925

i
;
j
I
!
i

5,588

410
345
580
435

129
159
129
129
129

6,289

204
204

001

oni

903

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,1918.

Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system at close of business on Fridays, July
26 to August 28, 1918—Continued.
RESOURCES—Continued.
[In thousands of dollars ; i. e., 000 omitted.]
j

I Boston.

United States Gov- I
ernment long-term |
securities:
!
July 26
; 1,122
Aug. 2
| 1,122
Aug.9
! 1,121
946
Aug. 16
!
942
Aug. 23
|
United States Gov- !
ernment short-term |
securities:
i
July 26
i 1,416
Aug.2
i 1,416
Aug.9
! 1,416
1,416
Aug. 16
Aug. 23
! 1,416
All other earning as- j
sets:
;
July 26
!.
Aug.2
|.
Aug. 9
!.
Aug. 13
;
Aug. 23
j.
Total earning assets: :
July 26
| 118.009
Aug.2
| 107; 644
Aug.9
' 106,432
Aug. 16
| 88.959
Aug. 2 3 . . .
| 96;212
Uncollected i t e m s j
(deduct from gross !
deposits):
July 26
j 33,930
Aug.2
; 49,170
Aug.9
...! 37,741
Aug. 16
! 53,066
Aug. 23
j 40,933
5 per cent rcdemp- •
tion fund against i
Federal
Reserve !
Bank notos:
j
July 26
,
Aug.2
Aug. 9
Aug. 16
Aug. 23
All other resources:
July 26
780
Aug. 2
752
752
Aug.9
767
Aug. 16
771
Aug. 23
Total resources:
262,582
Jl
274,541
Aug.2
Aug.9..
285,251
Aug. 10
283,109
Aug. 23
287,916

New
York.

Richmond.

Phila- j Clevedelphia. land.

St.
Atlanta. Chicago. Louis.

Minneapolis.

1,557
1,456
1,455
1,455
1,453

1,747
1,347
1,347
1,317
1,348

6,704
5,999
5,749
3,120
2,560

1,233
1,233
1,233
1,233
1,233

771
730
711
711

7,090
4,509
4,508
4,508
4,509

2,233
2,233
1,153
1,153
1,153

1,317
1,297
1,343
343
122

8,876
8,871
8,871
8,871
8,871

3,548
4,058
3,583
18,733
10,158

1,232
1,232
1,212
1,221
1,210

1,690
1,730
1,730
1,715
1,695

1,510
1,511
1,511
1,510
1,510

983
982
992
991
991

2,112
2,112
2,112
2,112
2,112

321
321
321
321
321

946
906
924
924

1,259
1,277
1,304
1,304
1,239

Dallas.

San
Francisco.

3,979
3,979
3,979
4,349
4,347

3,461
3,461
3,461
3,461
3,481

40,090
36,237

901
901
901
901
901

1,004
1,127
1,398
1,398
1,000

16,922
17,573
17,404
32,546
23,479

!
I
!
!
i

Total.

31,497
30,624

|
103
101
102
82
62

15
21
26
31
62

51
505,584
491,445
530,650
574,996

97,800
99,586
106,589
107,879
98,776

123,195
119,779
125,309
119,123
112,878

66,671
72,040
74,209
63,165
64,898

43,594
47,149
50,674
48,649
51,765

264,927
252,989
250.153
222,364
230,964

64,593
63,787
61,573
52,184
51,096

58,363
62,329
58,565
59,607
65,771

88,519
87,899
82,114
76,698
72,72S

114,144
109,095
142; 190
147,501
145,515

64,902
55,469
55,674
60,224
71,341

50,957
44,593
45,332
52,561
47,742

38,457
38,363
42,804
54,150
38,232

28,645
25,951
25,707
27,059
27,562

83,002
76,462
80,976
82,106
82,364

34,032
35,212
40,340
39.707
3^839

11,661
13,008
22,049
11,688
10,783

34 !
74 !

94
94
100
192
200

3,080 • 1,264
1,756 ' 1,240 !
1,816 • 1,244
1,888
1,217
1,856 ; 1,623
i
1,518,851 319,188
1,528,706 310,292
1,551,671 319,032
1,523,106 336,4S5
1,565,469 340,468

572
573
632
613
677
369,742
356,477
373,332
374,224
379,450

i 1,383
939
! 1.960
! '649
779
!

[

I 166,448
! 165,296
J 177,111
I 187,576
i 178,227

704
723
749
129,018
122,809
129,504
131,093

136,532

1,514
1,606
1,258
1,361
1,160

514
526
536
553
552

553,922
547,167
564,944
555,546
588,830

158,374
165,900
173,185
173,852
181,725

236
234
227
216
209
i 121,550
! 116,438
124,873
I 119,273
i 122,187

44,453
35,970
43,871
45,276
48,799

88,832
93,398
103,528
102,797
101,303

1,564,540
1,534,015
1,593,467
1,561,697
1,684,486

52,420
42,236
53,621
49,194
50,523

13,269
17,875
12,802
15,511
16,536

32,973
24,124
25,522
30,750
31,613

558,392
531,558
584,758
623,495
601,983

372
167
4.00
400
394

137
137
137
137
137

84
84
84
84
84

701
496
735
866
958

357
369
379
871

524
699
648
647
654

1,574
1,165
1,224
1,298
1,356

12,441
10,551
11,410
10,803
11,294

214,901
195,395
202,605
205,046
205,478

!
i
!
|

255,901 4,165,403
85,136 243,321 14,111,538
88,548 244,837 14,234,893
96,686 256,388 14,242,384
96,348 271,357 4,353,987

904

SEPTEMBER 1,1918.

FEDERAL RESERVE BULLETIN.

Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system at close of business on Fridays,
26 to August 23,
1918—Continued.

July

LIABILITIES.
[In thousands of dollars; i. 9., 000 omitted.]

Boston.

Capital paid in:
July26
Aug.2
Aug.9
Aug. 16
Aug. 23
Surplus:
July 26
Aug.2
Aug.9
Aug. 16
Aug. 23
Government deposits:
July 26
Aug.2
Aug.9
Aug. 16
Aug. 23
Due to members—reserve account:
July26
Aug.2
Aug.9
Au^.16
Aug. 23
Collection items:
July26
Aug.2
Aug.9
Aug. 16
Aug. 23
Other deposits, including foreign government credits:
July 26
Aug.2
Aug.9
Aug. 16
Aug. 23
Total gross deposits:
July 26
Aug.2
Aug.9
Aug. 16
Aug. 23
Federal Reserve notes
in actual circulation:
July 26
Aug.2
Aug.9
Aug. 16
Aug. 23
Federal Reserve bank
notes in circulation—net liability:
July 26
Aug.2
Aug.9
Aug. 16
Aug. 23
All other liabilities:
July 26
Aug.2
Aug.9
Aug. 16
Aug. 23
Total liabilities:
July 26
Aug.2
Aug.9
Aug.16
Aug.23

New
York.

Philadelphia.

Cleveland.

Richmond.

6,940
7,150
7,151
7,151

8,610
8,618
8,693
8,697
8,703

3,917
3,917
3,920
3,921
3,921

3,117
3,117
3,119
3,114
3,114

9,929
9,940
9,966
10,008
10,693

116
116
116
116
116

40
40
40
40
40

216
216
216
216
216

St.
Atlanta. Chicago. Louis.

Minneapolis.

Kansas
City.

Dallas.

2,846
2,849
2,849
2,854
2,864

3,542
3,542
3,545
3,545
3,545

3,001
3,027
3,032
3,045
3,050

San
Francisco.

Total.

6,474
6,474
6,474
6,474
6.492

19,967
19,974
19,989
19,999
20,017

75
75
75
75
75

649
649
649
649
649

15,178
15,428
19,815
9,166
21,059

7,539
26,904
25,595
7,524
19,279

17,783
6,235
11,506
3,974
13,628

20,956
23,791
22,238
12,183
20,854

11,156
3,808
7,851
3,576
6,676

14,246
6,904
6,761
8,143
9,655

38,782
18,674
35,082
1,814
26,941

16,756
12,195
6; 966
9,909
9,975

15,347
10,183
8,404
5,900
1,733

30,035
14,886
13,655
7,722
11,181

16,963
8,096
9,954
13,502
9,576

28,299
14,132
12,151
12,142
22,470

233,040
161,236
179,978
95,555
173,027

86,021
91,574
87,695
93,769
89,839

660,176
629,814
621,036
618,438
643,645

81,124
83,680
84,598
97,140
82,559

103,970
108,184
109,226
120,010
108,363

42,920
44,434
45,570
44,958
46,225

34,923 177,731
36,212 183,042
38,327 178,394
37,561 191,471
37,581 191,793

42,330
49,116
54,227
51,664
54,758

35,869
34,272
36,052
36,935
36,369

70,847
63,872
65,820
69,173
68,319

30,669
28,630
30,058
30,771
30,321

68,616
70,702
69,702
72,121
69,708

1,435,196
1,423,532
1,420,705
1,464,011
1,459,480

27,248
30,267
37,480
38,664
34,OSS

98,039
104,787
116,713
117,946
113,354

49,356
45,096
39,732
49,649
55,041

56,494
36,501
43,326
42.688
39)078

28,285
29,982
33,692
46,630
32,111

18,675
17,233
20,550
19,782
22,501

45,483
48,324
45,085
46,937
47,553

21,623
24,821
30,032
27,176
30,176

9,670
17,807
13,127
19,393

21,828
22,536
27,024
30,497
26,690

10,571
10,884
8,936
10,943
11,621

15,291
10,810
12,970
17,163
19,341

401,186
390,911
433,347
461,202
450,917

5
5
7
7
11

4,785
1,842
2,795
3,979
1,272

234
88
127
149
120

28
26
32
22
3

2,716
2,880
3,540
2,902
2,993

111,840
114,718
127,050
115,234
112,597

58,231 114,922
47,636 98,524
48,980 98,363
55,238 104,328
51,521 114,512

2,181,262
2,090,397
2,161,080
2,136.002
2,19(5,051

103,625
109,591
119,721
108,016
108,002

261
799
129
160

3,604
3,622
3,640
3,640
3,687

4,495
4,498
4,499
4,512
4,513

76,441
76,518
76,876
76,960
77,750
1,134
1,134
1,134
1,134
1,134

38
38
38

128,447
137,269
144,990
141,599
144,986

869,379 148,263 181,813
871,096 135,011 168,737
883,065 135,836 175,589
851,924 150,763 175,010
884,280 151,228 168,455

82,361
78,224
87,113
95,1(54
85,012

67,849
60,354
65,645
65,493
69,748

266,781
251,882
261,356
244,201
267,559

80,943
86,220
91,352
88,898
95,029

59,563
54,150
62,292
55,992
57,531

122,710
101,294
106,499
107,392
106,190

125,759
128,844
131,725
132,857
134,157

620,439
628,402
633, 917
640,879
649,650

78,819
81,563
84,433
86,950
87,767

57,237
58,558
59,866
61,589
62,722

271,777
279,752
287,829
294,071
302,269

72,726
74,926
77,037
80,158
81,825

58,088
58,346
58,657
59,328
60,607

78,761
80,858
82,666
84,358
85,958

32,750
33,020
33,154
34,852
38,079

133,945
137.699
139; 203
144,678
149,218

1,870,835
1,906,465
1,955,276
1,985,419
2,032,837

110
110
110
110
110

1,99S
1,998
2,000
3,395
4,216

7,990
7,795
8,000
7,820
7,820

541
2,451
2,597
2,691

1,035
1,155
1,245
1,425

11,084
11,479
13,716
15,167
16,864

1,235
1,476
1,529
1,425
1,411

665
690
724
747
798

3,221
3,379
3,577
3,655
3,877

1,015
1,055
1,037
1,061
1,147

1,898
1,906
1,895
1,931
1,965

944
912
931
954
1,007

1,553
1,585
1,617
1,625
1,689

24,647
25,545
26,811
27,702
29,351

1,518,851 319,188 369,742 166,448
1,528,706 310,292 356,477 165,296
1,551,671 319,032 373,332 177,111
1,523,106 336,485 374,224 187,576
1,565,469 340,468 379,450 178,227

129,018
122,869
129,504
131,093
136,532

553,922 158,374 121,550
547,167 165,900 116,438
564,944 173,185 124,873
555,546 173,852 119;273
588,830 181,725 122,187

214,901
195,395
202,605
205,046
205,478

1,827
1,879
1,987
2,104
2.206
262,582
274,541
285,251
283,109

162,918
167,206
174,714
177.232
180;426

344

258

8,417
8,585
9,051
9,655
10,529

1,068
1,135
1,332
1,339
1,405

177,616
177,291
187,075
188,467
200,159

1,703
1,831
1,975
2,050
2,133

1,101
1,132
1,156
1,156
1,184

255,901 ;, 165,403
85,136 243,321 4.111,538
88,548 244,837 4;234,893
96,686 258,388 4,242,384
96,348 271,357 4,353.987

905

FEDERAL BESEBVE BULLETIN.

SKPTEMBBB 1,1918.

FEDERAL RESERVE NOTES.
Federal Reserve note account of each Federal Reserve Bank at close of business on Fridays, July 26 to Aug. 2$, 1918.
[In thousands of dollars: i. e., 000 omitted.]

F e d e r a l Reserve
notes received from
agent—net:
July 26
Aug. 2
Aug. 9
Aug. 16
Aug. 23
Federal Reserve notes
held by banks:
July 26
Aug. 2
Aug. 9
Aug. 16
Aug. 23
Federal Reserve notes
In actual circulation:
July 26
Aug. 2
Aug. 9
Aug. 16
Aug. 23
Gold deposited with
or to the credit of
Federal Reserve
agent:
July 26
Aug. 2
Aug. 9
Aug. 16
Aug. 23
,
Paper delivered to
Federal Reserve
agent:
July 26
Aug. 2
,
Aug. 9
Aug. 16
An?. 23

Boston.

New I PhilaYork. jdelphia.

Cleveland.

Richmond.

128,885
131,164
135,136
136,402
137,975

664,355
673,198
696,797
691,972
699,623

i 175,456
i 175,099
I 182,227
I 190,309
!195,308

189,709
189,977
196,230
198,992
210,974

84,954
86,307
89,318
91,207
93.603

3,120
2,320
3,411
3; 545
3 ; 818

43,916
44,796
57,880
51,093
49,973

12,538
7,893
7,513
13,077
14,882

12,093
12,686
9,155
10,525
10,815

6,135
4,744
4,885
4 257
5,836

I253 759
128,844
131,725
132,857
134,157

620,439
628,402
638,917
640,879
649,650

I 162,918
! 167,206
i 174,714
i 177,232
| 180,426

177,616
177,291
187,075
188,467
200,159

56,445
56,224
60,847
60,612
60,185

279,859
279,023
279,023
278,539
277,893

99,389 110,629
99,031 110,497
97,059 116,550
96,541 121,772
113,780 126.174

115,471
105,106
103,895
86,597
93,854

500,428 87,415
485,880 85,854
525,561 95,145
554,757 100,475
677,685 83,047

114,264
111,450
117,282
113,206

St.
Atlanta. Chicago. Louis.

Minneapolis.

Kansas
City.

Dallas.

San
Francisco.

Total.

298,567
59,733 304,749
62,4-14 311,518
64,821 316,332
66,020 321,796

76,970
79,149
82,327
85,935
87,055

59,142
59,598
59; 841
60,353
61,388

84,243
85,545
88,636
90,752
91,324

33,207
33,383
33,392
35,165
38,827

145,032
150,278
150,607
158,708
159,934

1,999,480
2,028,180
2,088,473
2,118,948
2,163,837

26,790
24,997
23,689
22,261
19,527

4,244
4,223
5,290
5,777
5,240

1,054
1,252
1,184
1,025
781

5,482
4,687
5,970
6,394
5,366

457
363
238
313
748

11,087
12,579
11,404
12,030
10,716

128,645
121,715
133,197
133,529
131.000

78,819
81,563
84.433
86,950
87,767

57,237 271,777
.58,558 279,752
59,866
61,589 294,071
62,722 302,269

72,726
74,926
77,037
80,158
81,825

58,088
58,348
58,657
59,328
60,607

78,761
80,858
82,666
84,358
85,958

32,750
33,020
33,154
34,852
38,079

133,915
137,699
139,203
144,678
149,218

1,870,835
1,906,465
1,955,276
1,985,419
2,032,837

32,950
32,613
36,511
36,356
38,278

26,339
23,312
25,353
24,135
27,424

118,392
119,574
146,343
151,157
156 622

31,498
31,496
31,389
46,830
51,775

23,596
23,352
23,195
23,027
22,862

33,497
33,497
33,368
36,790
48,711

13,980
13,980
13,928
13,915
13,873

83,848 910,420
80,194 902,793
77 123 940,692
71,824 961,498
81,190 1,018,767

61,784
67,510
70,744
59,925
61,222

32,744 243,859
36,749 241,881
38,033 240,237
41,265 214,353
39,610 223,707

54,296
48,808
44,972
47,996
46,545

51,812
54,174
47,022
52,335
52,036

78,384
77,751
71,939
66,523
62,618

39,536
31,061
38,766
39,987
43,551

73,253
79,213
86,583
86,425
82,554

1,723
1,175
2,578
3,232

1,453,246
1 425,437
1,480,179
1,463,844
1,573,109

906

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1918.

Federal Reserve note account of each Federal Reserve agent at close of business on Fridays, July 26 to Aug. 23,1918.
[In thousands of dollars; i. e., 000 omitted.]
|
! Boston.

NewYork.

Philadelphia.

Cleveland.

1,012,080
1,012,080
1,025,280
11,045,080
11,051,680

230,240
236,680
236,680
243,360
247,120

230,000 116,820 96,740
231,600 118,020 99,540
,
235,700 123,120 102340
242,160 125,420 102,340
127920 i 112,360
115,860
246,010 127,920
115860

226,325
230,682
233,883
23S,708
242,857

40,244
40,601
42,573
43,091
44,252

St.
Atlanta. Chicago. Louis.

Minneapolis.

Kansas
City.

Dallas.

Total.

FEDERAL RESERVE

NOTES.

Received from Comptroller:
186,640
July 26
186,640
Aug. 2
186,640
Aug.9
Aug. 16
1 186,640
Aug. 23
i 195,940
Returned to Comp- |
troller:
July 26
! 34,955
Aug. 2
! 35,176
Aug.9
i 36,204
Aug. 16
! 36,938
Aug. 23
i 37,365
Chargeable to Federal
Reserve agent:
151,685
July 26
151,464
Aug.2
150,436
Aug.9
149,702
Aug. 16
158,575
Aug. 23
In hands of Federal
Reserve agent:
22,800
July 26
20,300
Aug.2
15,300
Aug.9
13,300
Aug. 16
20,600
Aug. 23
Issued to Federal Reserve Bank, l e s s
amount returned
to Federal Reserve
agent for redemption:
128,885
July 26
131,164
Aug.2
Aug.9
i 135,136
136,402
Aug. 16
137,975
Aug. 23
Collateral held as
security for put- I
standing notes:
j
Gold coin and •
certificates on
handJuly 26
Aug.2
5,000
Aug.9
5,000
Aug. 16
5,000
Aug. 23
In gold-redemption f u n d 6,945
July 26
6,724
Aug.2
7,347
Aug.9
7,112
Aug. 16
Aug. 23
Gold-settlement
fund, Federal
Reserve Board:
49,500
July 26
49,500
Aug.2
48,500
Aug.9
48,500
Aug. 16
48,500
Aug. 23
Eligible p a p e r
(required
minimum): 1
72,440
July 26
74,940
Aug.2
74,289
Aug.9
75,790
Aug. 16
77,790
Aug. 23

785,755
781,398
791,397
806,372

19,491
19,623
20,570
21,348
21,946

196,079
194,107
200,269
202,868

121,400
108,200
94,600
114,400
109,200

14,540
20,980
11,880
9,960
7,560

664,355
673,198
696,797
691,972
699,623

175,456
175,099
182,227
190,309
195,308

102,800
105,680
107,680
109,680
117,880

23,393
23,931
25,062
25,988
26,964

18,780
18,791
19,393
19,915
20,565

14,883
15,127
15,384
15,652
15,817

19,237
19,295
19,544
20,028
20,056

17,068
17,132
17,373
17,520
17,713

11,948
12,102
12,173
12,472

471,870
478,470
489,092
499,862
497,152

145,032
150,278
150,607
156,708
173,040

2,292,070
2,311,230
2,343,648
2,395,158
2,443,088

13,105

292,590
283,050
255,175
276,210
279,251

33,207 145,032
33,383 150,278
33,392 150,607
35,165 156,708
38,827 159,934

1,999,480
2,028,180
2,088,473
2,118,948
2,163,837

68,500 156,980 2,763,940
68,500 162,380 2,789,700
68,500 162,780 2,832,740
68,500 169,180 2,895,020
68,500 173,040 2,940,240

210,509 91,319
211,977 92,082
215,130 96,668
220,812 98,217
224,094 100,113

76,695
79,468
81,859
91,361
94,650

349,467
354,369
361,678
367,372
368,016

84,020
86,889
88,287
89,765
97,315

63,697
63,453
66,196
65,928
65,763

92,463
92,405
96,156
97,672
99,044

51,432
51,368
51,127
50,980
50,787

6,365
5,775
7,350
7,010
6,510

17,735
19,735
19,415
26,540
28,630

50,900
49,620
50,160
51,040
46,220

7,050
7,740
5,960
3,830
10,250

4,555
3,855
6,355
5,575
4,375

8,220
6,860
7,520
6,920
7,720

18,225
17,985
17,735
15,815
11,960

84,954
86,307
89,318
91,207

58,960
59,733
62,444
64,821
66,020

298,567
304,749
311,518
316,332
321,796

76,970
79,149
82,327
85,935
87,065

59,142
59,598
59,841
60,353
61,388

84,243
85,545

20,800
22,000
18,900
21,820
13,120

! 189,709
j 189,977
I 196,230
198,992
210,974

163,740
163,740
163,740
163,740
163,740

25,501 ! 20,045
25,938 ! 20,072
26,452 I 20,481
27,203 20,999
27,807 21,210

78,580 111,700
78,580 111,700
81,580 115,700
81,580 117,700
81,580 119,700

372,860
! 378,300
386,740
393,360
394,980

2,504
2,504
2,503
2,503
2,503

11,312
10,312
16,313
21,312
24,313

90,752
91,324

11,581
11,581
11,582
11,581
11,581

13,102
13,102
13,102
13,102
13,102

16,119
15,283
15,283
14,799
14,153

8,655
9,654
9,394
9,254
10,073

9,317
10.185
10)237
10,460
11,861

450
113
1,014
856
1,778

2,265
2,238
1,830
2,312
2,101

549
293
347
439
416

1,868
1,866
1,759
1,699
2,644

994
950
793
1,625
1,460

2,137
2,137
2,008
2,430
2,351

100,000
100,000
100,000
100,000
100,000

90,734
89,377
87,665
87,287
103,707

90,000
90,000
90,000
90,000
90,000

32,500
32,500
35,500
35,500

21,570
18,570
21,020
19,320
22,820

117,843
119,281
145,996
150,718
156,206

29,630
29,630
29,630
45,131
49,131

9,500
9,300
9,300
8,300
8,300

31,360
31,360
31,360
34,360
46,360

394,175
417,774
413,433
421,730

76,067
76,068
85,168
93,768
81,528

79,080
79,480
79,680
77,220
84,800

52,004
53,694
52,804
54,851
55,325

32,621
36*421
37,091
40,686

180,175
185,175
165,175
165,175
165,174

45,474
47,653
50,938
39,105
35,290

35,546
36,246
36,646
37,326
38,526

50,746
52,048
55,268
53,982
42,613

1,815
1,815
1,762
1,750
1,908

202,239
201,239
212,240
217,238
220,239

8,522
8,223
7,989

59,859
59,851
60,296
60,959
63,419

75.101
71,601
68,601
63,601
73,201

648,322
641,703
668,156
683,301
735,109

61,184
70,084
73,484
84,884
78,744

1,089,060
1,125,387
1,147,781
1,157,450
1,145,070

8,747

I
584
584
584
584
384 !

For actual amounts see item " Paper delivered to Federal Reserve agents" on page 905.

19,227
19,403
19,464
21,250
24,954

907

FEDERAL EESEEVE BULLETIN.

SEPTEMBER 1, 1918.

MEMBER BANK CONDITION STATEMENT.
Principal resources and liabilities of member banJcs located in central reserve, reserve, and other selected cities as at close o
business on Fridays from July 1.9 to Aug. 16, 1918.
1. TOTAL FOR ALL REPORTING BANKS.
[In thousands of dollars; i. e., 000 omitted.)
Boston.
Number of reporting
banks:
July 19
July 26
Aug.2
Aug. 9
Aug. 16
United States bonds
to secure circulation:
July 19
July 26
Aug.2
Aug.9
Aug. 16
Other United States
bonds, including
Liberty bonds:
July 19
July 26
Aug.2
Aug.9
Aug. 16
United States certificates of indebtedness:
July 19
July 26
Aug.2
Aug.9
Aug. 16
Total United States
securities owned:
July 19
July 26
Aug.2
Aug.9
Aug. 16
Loans secured by
United States
bonds and certifi- j
cates:
July 19
July 26
Aug. 2
Aug.9
Aug. 16,
Other loans and investments:
July 19
July 26
Aug.2
Aug.9
Aug.16
Total loans and investments:
July 19
July 26
Aug.2
Aug.9
Aug.16
Reserve with Federal
Reserve Banks:
July 19
July 26
Aug.2
Aug.9
Aug. 16
Cash in vault:
July 19
July 26
Aug.2
Aug.9
Aug.16

New
York.

Philadelphia.

CleveRichland. I mond.

Atlanta. Chicago.

43
44
44
45
45

101
102
102
102
102

14,621
14.621
14;351
14,351
14,353

51,986
52,512
51,685
51,247
50,584

12,970
12,969
12,770
12,770
12,770

43,539

14,991
14,055
14,016
13,720
15,410

258,304
254,997
247,132
239,867
238,846

25,905
27,525
27,021
26,644
30,601

57,422 ! 31,030
55,551 30,573
55,602 30,017
54,719 28,349
53,512 31,042

29,799
46,770
47,508
67,294
54,589

255,389
394,446
399,122
516,120
495,318

26,070
37,139
37,386
50,560
49,703

37,245
58,548
55,487
74,036
72,312

59,411
75,446
75,875
95,365
84,352

565,679
701.955

64.945
77; 633
77,177
89,974
93,074

138,206
157,788
152,444
169,105
167,870

807,234
784,748

41,355
40,350
42,046

St.

Minneapolis.

Kansas
City.

I
73 i
73 I
73
73
73

42
42
42
44
45

j
!
j

Total.

718
725
725
734
735

\
I

35,255
35,355
35,115
34,505
34,505

272,866
273,720
269,082
267,264
268,252

16,401
15,637
15,020
16,010
15.995

24,059
24,420
24,155
23,764
25,928

592,890
580,284
567,335
555,774
554,499

18,624
24,857
24,596
31,686
31,203

7,860
10,605
11,253
13,950
14,350

26,155 527,461
38,564 786,334
40,117 794,866
52,010 1,017,253
51,890 979,052

51,492
57,672
56,324
62.SSO
62,550
62,281

41,888 85,469 1,393,217
1,640,338
43,886
43,917 99,387 1,631,283
47. G04 110,279 1,840,291
.47,904
48,274 112,323 1,801,803

15,590 18,776
15,590 ! 18,776
15,460 18,608
15,465 I 18,607
15,465 I 18,642

17,417
17,417
16,995
16,995
16,995

27,434
25,247
24,737
24,608
25,105

82,382
79,874
77,588
79,599
66,479

23,496
21,158
20,999
20,134
18,638

12,649
12,484
13,271
11,397
15,738

18,817
18,763
17,777
16,963
17,205

14,375
17,988
19,353
25,118
26,683

I 12,717
! 19,050
! 20,457
! 28,208
! 26,689

69,712
96,755
101,145
110,504
108,525

17,217
24,442
23,019
29,255
29,009

12,298
17,170
15,423
18,512
18,781

69,970
73,187
74,049
78,127
82,346

55,741
59,887
60,654
68,281
67,259

170,870
195,405
197,341
208,710
193,646

58,130
63,017
61,013
66,384
64,642

31,416
36,123
35,163
36,378
40,988

24,565
24,626
24,679
24,660
24,621

San
Francisco.

Dallas.

o,so» i 14,051
6,469 ! 14,052
6,469 I 13,951
6,469 13,901
6,469 13,873

17,627
17,644
17,644
17,944
17,929

j
I
!
i
i

I
5,975
6,120
6,404
7,349
9,156

4,381
4,510
4,535
4,581
4,375

5,655
5,116
4,857
5,352
5,302

9,236
8,478
7,916
8,267
9,391

473,616
480,550
501,669
470,773
469,437

367,654
373,355
381,671
382,095
382,988

253,198
257,079
260,960
261,447

471,772
470,965
473,036
475,459
468,947

164,487
167,651
168,670
171,622
175,623

520,194
526,300
521,963
526,483
532,537

10,535,197
10,540,667
! 10,626,858
110,736,670
110,731,432

1,636,007
1,662,443
1,685,882
1,709,756
1,695,469

440,517
454,721
457,585
462,095
460,903

290,589
299,322
302,527
305,174
317,930

527,645
533,147
533,895
542,590
535,603

212,030
216,653
217,444
224,878
229,199

614,899
633,117
629,266
645,029
654,251

12,402,030
112,668,360
12,759,810
13,047,734
13,002,672

25,204 135,735
23,397 135,606
23,708 139,967
25,779 137,446
25,618 145,146

30,212
30,378
34,411
36,814
33,974

17,873
17,724
17,015
17,338
17,785

42,287
45,330
40,748
44,008
48,048

13,851
13,882
14,386
14,484
14,498

45,054
43,470
44,030
44,862
44,121

1,161,877
1,150,922
1,146,483
1,141,954
1,157,759

14,346
13,518
13,896
14,895
14,025

12,386
12,241
11,656
11,564
11,157

8,207
8,538
8,781
8,503
7,968

15,705
19,327
15,722
14,709
14,988

10,421
10,534
9,780
10,357
11,156

20,476
20,905
20,630
19.501
19;467

363,715
352,910
347,563
346,651
319,895

18,685
5,385
5,450
19,077
5,519
18,143
18,804 I 4,930
20,028 I 7,522

53,394 i 14,733
18,349
53,520
69,141 14,901
13,616
58,737
13,273
61,283

45,905
46,158
47,228
42,654
39,785

230,153
233,557
241,841
225,342
217,029

42,584
42,571
43,611
43,830
44,225

37,530
37,644
37,573
37,311
38,068

774,374
782,219
776,760
791,068
778,190

4,354,418
4,355,896
4,405,907
4,441,781
4,436,176

616,934
601,371
609,318
619,174
620,256

973,611
973,364
979,472
977,703
973,214

351,998
340,671
356,336
361,266
367,588

I 274,814
I 278,278
273,365
! 286,263
j 287,587

|l,411,743
,1,413,518
!l,419,400
1,442,309
1,440,540

879,690
903,823
899,863
929,087
902,327

5,150,250
5,291,408
5,345,687
5,474,367
5,437,953

724,463
721.575
730,106
752,978
757,555

1,149,347
1,168,796
^,—,.-! 1,169,489
11,184,119
11,179,152

440,653
432,935
448,528
458,197
469,962

335,940
350,429
I 339,538
; 359,474
j 362,368

66,654
60,538
65,967
63,289
67,436

612,200
624,017
609,651
593,661
576,598

65,717
50,060
52,958
55,244
66,063

79,904
79,763
75,584
79,759
88,607

27,186
26,757
28,058
29,270
29,865

26,695
25,036
24,429
26,005
25,220

122,630
123,989
119,037
123,107
118,603

20,880
18,974
19,224
19,278
21,004

36,207
29,224
32,453
27,996
30,271

17,179
15,206
15,666
16,022
16,199 I

i
I
I
!
I

58,582
55,418
56,289
54,614
59,837

908

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1918.

Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities at the close of
business on Fridays from July 19 to Aug. 16, 1918—Continued.
1. TOTAL FOR ALL

R E P O R T I N G BANKS—Continued.

[In thousands of dollars; i. e., 000 omitted.]

Boston.

New
York.

Philadelphia.

Cleveland.

Richmond.

St.
Atlanta. Chicago. Louis.

Kansas
City.

Dallas.

130,176 377,072 8,919,235
130,710 378,708 8,876,509
130,447 367,323 8,960,025
135,227 377,920 8,970,765
139,565 386,556 9,100,451

Net demand deposits
on which reserve is
computed:
July 19
July 26
Aug.2
Aug. 9
Aug. 16
Time deposits:
July 19
July 26
Aug.2
,
Aug. 9
Aug. 16
Total net deposits on
which reserve is
computed:
July 19
July 26
Aug.2
Aug. 9
Aug. 16
Government deposits:
July 19
July 26
Aug.2
Aug. 9
Aug. 16
Ratio of combined
reserve and cash to
total net deposits
(per cent):
July 19
July 26
Aug. 2
Aug. 9
Aug. 16

San
Francisco.

Minneapolis.

Total.

561,652 699,511 266,352 195,947
553,158 704,714 271,590 191,067
558,518 707,575 273,523 189,989
568,275 670,972 285,661 199,094
578,632 694,661 305,395 204,499

649,466
644,030
658,741
657,434
652,524

4,252,937
4,234,369
4,276,593
4,257)384
4,287,035

94,447
96,330
96,921

265,619
265,976
268,099
273,035
276,779

15,340
15,246
14,400
14,132
14,421

681,050
696,004
695,294
690,582

4,321,620
4,303,118
4,345,810
4,327,778
4,358,460

567,061
558,564
563,650
573,325
583,815

62,248
61,740
53,372
66,129

321,240
501,187
475,579
618,441
503,999

30,532
17,359
51,048
43,579
42,451

1,016,855
1,003,444
1,024,460
1,019,094
1,048,703

250,028
249,828
250,768
263,612
266,037

160,135
161,671
158,304
166,135
165,376

359,104
353,220
363,784
369,957
371,468

358,766
359,916
360,099
359,247

74,407
73,916
83,644
75,520
74,785

44,280
44,905
45,350
45,345
45,407

62,092
62,820
62,879
64,935
63,176

25,602
26,026
25,006
26,671
25,482

113,249
117,506
129,121
117,640
114,946

1,409,222
1,426,697
1,445,755
1,482,936
1,451,037

222,749 1,115,408 269,392
769,850
779,209 287,580 218,090 1,102,720 268,980
780,337 289,559 215,653 1,123,832 272,258
754,480 303,880
1,118,227 283,289
767,492 325,000 232,076 1,147,760 285,484

176,054
177,895
174,700
182,536
181,780

377,732
372,066
382,648
389,438
390,421

138,635
139,292
138,721
144,097
147,924

411,047
413,960
406,059
413,212
421,040

9,338,666
9,302,524
9,389,261
9,411,971
9,531,834

21,330
22,259
18,506
25,995
30,866

18,976
29,008
27,876
17,244
25,507

12,999
15,476
18,828
24,155
33,740

4,937
10,980
10,666
9,178
10,500

13,470
16,770
31,368
4,554
13,816

602,803
829,349
836,257
964,131
943,105

226,035
236,414
232,240
268,031
232,304

36.351
59,944
50,073
57,841
67,348

47,017
46,310
46,449
52,505
57,540

16,670
19,868
18,072
15,477
24,954

82,983
83,766
84,022
89,545
90,378

15,247
9,375
13,440
16,926
21,674

48,803
65,383
67,429
64,612
81,307

15.3
14.8
14.6
14.4
14.4
2. MEMBER BANKS IN CENTRAL R E S E R V E CITIES.

Number of reporting
banks:
i
July 19
July28
Aug.2
Aug.9
Aug. 16
United States bonds
to secure circulation:
July 19
July 26
Aug.2
Aug.9
Aug. 16
j
Other United States !
bonds, including |
Liberty bonds:
July 19
July 26
Aug.2
Aug.9
Aug. 16
United States certificates of indebted- ;
nessi
July 19
July 26
Aug.2
Aug.9
Aug. 16
Total United States
securities owned:
July 19
July 26
Aug.2
Aug.9
Aug. 16

122
123
123
123
123

37,643
38,168
37,341
36,903
36,340

1,469
1,469
1,269
1,268
1,282

10,392
10,392
9,970
9,970
9,970

49,504
50,029
48,580
48,141
47,592

230,717
227,411
220,159
214,101
215,140

47,554
45,675
43,870
46,801
32,004

16,497
15,579
14,640
13,898
12,539

294,768
288,665
278,669
274,800

242,396
375,184
493,243
473,252

39,191
54,416
59,167
58,874
57,490

11,687
17,903
16,204
21,685
21,164

293,274
447,503
455,997
573,802
551,906

510,756
640,763
638,126
744,247
724,732

88,214
101,560
104,306
106,943
90,776

38,576
43,874
40,814
45,553
43,673

637,546
786,197
783,246
896,743
859,181

SEPTEMBER 1,

909'

FEDERAL RESERVE BULLETIN.

1918.

Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities as at close of
business on Fridays from July 19 to Aug. 16, 1918—Continued.
2. MEMBER BANKS IN CENTRAL RESERVE CITIES—Continued.
[In thousands of dollars; i. e., 000 omitted.]

Loans secured by
United States bonds
and certificates:
Jnlvl9
July 20
Aug. 2
'iug. 9
Aug. 16

Other loans and investments:
Julv 19
Julv 26
\ug. 2
Aucr. 9
Aug. 16
Total loans and investments:
July 19
Julv 26
•Vug. 2
Aug. 9
ixiz. 16
Reserve with Federal
Reserve Banks:
July 19
July %
'Vuf 2
•ViSg

•\UP

vug ft
\--7g \P

St.
Louis.

206,522
210,096
218,265
202,078
196,828

38,303
37,494
52,576
42,377
44,545

11,966
15,663
11,799
10,693
9,809

4,008,026
4,010,611
4,062,717
4,087,181
-1,087,862

859,986
858,016
864,099
885,208
882,546

277,293
269,299
278,138
279,174
279,711

588 713
594 617
5831585
567 640
551,527

Atlanta.

108,961
110 488
106,075
110 332
106,005

3,944,373
3,938,110
3,982 499
3,962,252
3,990 899

Minneapolis.

Kansas
City.

San
Francisco.

Dallas.

Total.

256,791
263,253
282,640
255,148
251,182

5,145,305
5,137,926
5,204,954
5,251,563
5,250,119

2J8 270
224,180
225.840

986,503
997,070
1,020,981
1.034,528
1,017,867

327,835
328,836
330,751
335.420
333', 193

96,552
95,007
98,003
95,756
100,778

22,564
23,619
26,593
30,181
25,877

34,662
32,241
32,515
32 830
36 572

6,487
6,345
6,074
5 759
5) 609

150,110
149,074
144,664
148,921
148,186"

692, 770
673 081
69l' 835
683,745
705 572

178,182
177 826
178' 233
190,160
192,705

4,815,325
4,789,017
4,852,567
i, 836,157
4,889,176

6,039,642
6,187,376
6,270,840
6,403.454
6,360;.4S2

;

707,829
713,243
708,181
693,577
678,182

215.771

! 2in!m ...

Chicago.

Richmond.

4,725,304
4,861,470
4,919,108
5,033,508
5,009,422

Aug. 'j
Aug. 1G
Tola! net deposits on
which reserve is
computed:
Julv 19
Julv 26
•Vug 2
'•UP 9
A yig 15
Government deposits:
July 19
Julv 23
Aug. 2
Aug. 9
\lipr
Ig
Ratio
oi combined
reserve and cash to
total net deposits
("oer cent):
* T iry 19
Ti!iv 26

Cloveland.

Aug. 3 6 . . .
Cash in vault:
Julv 19
JuSv 26
Aug. 2
*ug 9
-\ug. 10
Net demand deposits
on which reserve is
computed:
July 19
July 26
•Sup. 2
*iug. 9
\ n g . 16 .
Time deposits:
Julv 19
Julv 26
•'<"'H7

Philadelphia.

New
York.

Boston.

139,070
133,618
133,071
132,864
132,415

.. -

408.200
403' 229
414 056
410,717
412,077

53,359
53,478
62,715
53,673
53,822 - - - - - - : : : : : : : : :

!
3 QQ4 lfifi

3!98"!987 =
4 032 809
>4 013 986
14 a*?, nip.

.
'- - -

! .

i-I

299.812
474,587
450,375
586.379
467'446

16 2
15.8
is A
34.7
14.fi

i
I..

!
i
!

'
i

724,863
703,916
722,544
714,106
730,129

190,496
190,167
192,706
202,546
205,125

32,077
41,025
3S,498
44,595
54,225

16,918
17,332
14,237
20,556
24,382

17.3
17.1
17.1
16.9
17.4

14.0
14.4
15.8
16.1
13.7

!
i

4,909,525
4.; 882.070
4,948'119
4,930,938
4,984,270
348,807
532,944
503,110
651,530
546,053

16.3
15.9
15.6
15.1
14.9

910

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1,

1918.

Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities as at close of
business on Fridays from July 19 to Aug. 16, 1918—Continued.
3. MEMBER BANKS IN OTHER RESERVE CITIES.
[In thousands of dollars; i. e., 000 omitted.]

Boston.

Number of reporting
banks:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
United States bonds to
secure, circulation:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
Other Unites States
bonds, including
Liberty bonds:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
United States certificates of indebtedness:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
Total United States
securities owned:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
Loans secured by
United Statesbonds
and certificates:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
Other loans and investments:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
Total loans and investments:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
Reserve with Federal
Reserve Banks:
July 19
,
July 26
Aug. 2
Aug. 9
Aug. 16
Cash in vault:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
Net demand deposits
on which reserve is
computed:
Jmyl9
July 26
Aug. 2
Aug. 9
Aug. 16

New
York.

Philadelphia.

Cleveland.

61
61
61
61
61

St.
Chicago. Louis.

Minne-

12
12
12
12
12

15
15
15
15
15

42 !
42 i
42 I
46:
46 ;

apolis.

Kansas
City.

I San
Dallas, j Frani Cisco.

Total.

431
436
•140
447
447

12,360
12,360
13,460
13,465
13,465

16,557
16,557
16,589
16,589
16,610

5,330
5,330
5,330
5,330
5; 330

3,490
3,490
3,490
3,490
3,490

14,051
14.052
13; 951
13,901
13,873

15,176
15,191
15,191
15,491
15,476

35,255
35,355
35,115
34,505
31,505

173,483
173,810
171,998
170,618
172,135

23,992
21,857
23.805
~ """
23;668
24,268

33,169
32,455
32,032
31,136
32,696

4,536
3,397
4,349
4,186
4,003

10,272
10,014
10,898
9,113
13,404

18,817
18,763
17,777
16,963
17,205

14,255
13,507
12,855
13,713
13,610

24,059
24,420
24,155
23,764
25,928

242,238
235,105
236,387
230,338
241,249

10,929
16,534
19,990
27,541
26,022

I 29,780
41,318
[ 40,959
I 50,362
I 49,771

3,913
4,473
4,669
5,319
5,451

7,951
11,590
9,851
11,594
11,768

18,624
24,857
24,596
31,686
31,203

6,906
9,510
10,028
12,500
12,752

26,155
38,564
40,117
52,0.10
51,890

198,916
288,685
291,834
381,829
364,351

44,454
46,801
48,399
51,009
53,880

47,281
50,751
57,255
64,674
83,755

79,506
90,330
89,580
98,087
99,077

13,779
13,200
14,348
14,835
14,784

21,713
25,094
24,239
24,197
28,662

51,492
57,672
56,324
62,550
62,281

36,337
38,208
38,074
41,704
41,838

85,469
98,339
99,387
110,279
112,323

814,637
697,600
700,219
782,785
777,735

15,748
15,634
15,186
15,778
16,875

4,671
4.732
5,429
4,836
7,449

14,465
15,417
15,946
15,764
16,176

2,283
2,248
2,254
2,251
2,291

5,315
5,775
6,094
7,039
8,816

4,381
4,510
4,535
4,581
4,375

5,313
4,787
4,519
4,968
4,839

9,236
8,478
7,916
8.267
9; 391

187,320
187,627
190,270
186,201
190,632

890,766 244,725 238,809 540,749
891,141 235,718 242,593 544,451
894,754 252,029 260,849 544,577
893,843 254,363 273,748 546,112
259,751 275,146 547,244

68,781
81,179
81,615
80,979
81,146

191,711
194,156
197,777
198,264
204,295

471,772
470,965
473,036
475,459
468,947

138,898
143,994
143,408
144,300
146,100

520,194
526,300
521,963
526,483
532,537

4,547,622
4,569,500
4,604,293
4,649,115
4,657,026

304,927 290,761
298,153 304,890
315,614 323,533
321,150 343,258
330,506 346,350

634,720
650,198
650,103
659,963
682,41)7

96,625
98,217
98,065
98,221

527,645
225', 025 I 53.3,147
228,110 I 533,895
229,500 512,590
211,773 535,603

180,548
186,989
186,001
190,972
192,777

614,899
633,117
629,266
645,029
654,251

5,349,579
5,461,541
5,494,782
5.618,101
5;625,393

38,244
39,850
41,221
40,879
43,585

6,312
5,531
6,334
5,282
6,457

23,412
22,771
23,362
21,458
22,909

4,455
4,580
4,322
4,763 !
4,161

4,498
4,498
4,278
4,278
4,279

7,796
7,796
7,796
7,796
7,796

8,965
8,96-1
8,765
8,765
8,765

35,816
35,966
33,727
32,722
34,299

14,189
14,251
14,306
14,286
14,247

9,218
8,640
8,619
8,538
9,673

12,329
12,275
12,378
11,047
9,047

20,836
22,564
22,090
22,241
25,350

51,693
48,968
4.9,173
48,509
46,789

19,062
18,245
18,256
17,460
19,276

22,645
35,029
36,611
51,428
38,706

5,297
8,521
8,352
10,163
9,065

22,058
30,890
31,081
42,608
41,668

33,455
53,094
49,743
67,355
65,698

11,203
14,305
15,837
19,263
20,357

36,361
48,167
49,508
64,244
52,658

25,422
28,592
28,526
29,006
25,908

51,859
62,418
61,936
73,614
75,783

120,964
138,028
132,643
148,586
116,786

37,321
37,367
38,466
34,370
31,617

11,315
11,254
11,604
9,828
9,353

40,465
40,506
41,640
42,102
42,476

36,807
36,921
36,681
36,417
36,974

549,717
557,902
552,384
565,980
552,670

143,599
140,714
142,388
139,591
144,267

547,901
540,387
539,513
549,993
550,297

623,399
643,436
640,358
664,594
636,945

180,336
180,560
182,518
178,425
179,528

640,225
643,311
643,089
665,709
668,556

1,048,537
1,066,090
1,064,078
1,078,846
1,078,386

53,163
48,076
52,446
50,562
54,521

11,902
14,547
11,697
12,885
11,958

60,113
44,535
48,296
49,767
60,584

73,966
73,751
69,935
73,761

20,769
21,004
21,638
22,729

17,976
16,603
16,473
17,613
16,462

5,011
5,372
5,126
4,647
4,812

16,619
15,628
15,148
16,132
17,066

31,073
24,805
27,382
23,504
25,271

11,778 ' 12,564
10,842 11,596
11,049 13,245
11,156 14,095
11,805 13,422

495,042
489,728
502,591
502,763
495,037

120,793
121,292
119,534
120,941
119,938

494,339
485,522
488,705
498,637
507,858

640,095
633,513
640,462
602,995
625,665

22,877

i
|
|
f
!

j 22,817
I 21,235
1 22,791
I 24,828
I 24,691
1

14,070
13,693
13,101
13,124
13,662

42,287
45,330
40,748
44,008
48,048

12,252
12,042
12,943
12,662
12,749

45,054
43,470
44,030f

44,i2l'

400,949
383,064
395,180
395,349
426,062

5,082
5,553
5,800
5,467
5,047

15,706
19,327
15,722
14,709
14,988

9,212
9,456
8,652
9,171
9,710

20,476
20,905
20,630
19,501
19,467

173,364
167; 438
166,911
162,316
165,120

115,529
114,996
113,605
118.899
118;944

359,104
353.220
363i784
369,957
371,468

111,275
111,411
111,909
115,445
118,447

377,072
378,708
367,323
377,920
386,556

3,452.422
3,429,896
3,468,403
3,486,985

I
194,832
197,831
199,345
207,552
225,568

172,310
166,035
179,868
189,142
194,644

315,643
321,953
324,305
327,020
334,916

56,388
55,687
56,972
55,714
55,382

I
!
!
j
i

3; 554; 423

SEPTEMBER 1,

911

FEDERAL RESERVE BULLETIN.

1918.

Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities as at close of
business on Fridays from July 19 to Aug. 18, 1918—Continued.
2. MEMBER BANKS IN OTHER RESERVE CITIES—Continued.
[In thousands of dollars; i. e., 000 omitted.]
New
York.

Boston.

Time deposits:
July 19
July26
Aug.2
Aug. 16
Aug. 16
Total net deposits on
which reserve is
computed:
July 19
July 26
Aug.2
Aug.9
Aug. 16
Government deposits:
July 19
July 26
Aug.2
Aug.9
Aug. 16
Ratio of combined reserve and cash to
total net deposits
(per cent):
July 19
July 26
Aug.2
Aug.9
Aug. 16
,

25,021
25,051 !
25,001 i
26,630 j
27.058

19,239
19,365
19,277
17,720
19,625

502,548 ",
497,243 ]
510,091 ,
510,752 j
503,154 !

126,565
127,102
125,317
126,257
125,826

49,821 i
48,081 !
41,932 !
51,693 i
68,662 !

8,937
11,194
10,057
13.063
15; 907

Cleveland.

Philadelphia.

| Atlanta Chicago.]

| Minne| apolis.

Kansas
City.

Dallas.

San
Fran- "
Cisco.

113,249 i
117,506 j
129,121 !
117,610 1
114,946 i

Total.

208,372
208,641
208,208
243,928
207,883

29,914
30,006
30,107
33,313
39,317

68,153
69,039
80,460
85,984
86,771

215,410
222,009
222,716
222,053
222,165

15,330
15,152
15,181
16,114
15,220

23,782
23,502
23,644
23,590
23,766

62,092
62,820
62,879
64,935
63,176

19,547
20,004
19,001
19,911
19,927

497,057
488,153
i 491,131
! 500,987
510,188

702,007
696,105
702,925
676,173
688,030

203,806
206,833
208,377
217,546
237,363

192,756
186,746
204,006
214,937
220,675

388,556
391,120
393,636
401,565

60,987
60,233
61,526
60,548
59,948

122,663
122,047
120,698
125,976
126,074

377,732
372,066
382,648
389,438
390,421

117,139
117,412
117,609
121,418
124,425

413,960
406,059
413,212
421,040

3,676,456
3,721,507
3,750,880
3,808,709

28,175
15,002
45,569
38,747
37,376

35,258
57,265
47,800
55,392
64,595

12,247
15,076
13,379
11,630
19,081

13,855
7,881
13,360
16,771
21,519

16,491
24,120
28,560
19,793
26,658

3,340
3,903
3,514
4,683
5,488

16,381

12,999
15,476
18,828
24,155
33,740

4,320
10,205
9,643
8,398
9,675

13,470
16,770
31,368
4,554
13,816

215,294
250,596
289,071
263,110
338,144

,
!
:
j

9,061
8,770
8,085
7,833
7,765

25,061
14,231
21,707

807,170
821,865
843,680
879,651
847,619

411,047 |3,694,573

14.6
14.0
14.0
13.9
14.3
4. MEMBER BANKS OUTSIDE RESERVE CITIES.

Number of reporting
banks:
July 19
July 20
Aug.2
Aug. 9
Aug. 16
United States bonds
to secure circulation:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
Other United States
bonds, including
Liberty bonds:
July'19
July 26
Aug 2
Aug.9
Aug. 16
United "States certificates of indebtedness:
July 19
July 26
Aug.2
Aug.9
Aupr. 16
Total United States
securities owned:
July 19
July 26
Aug. 2
Aug. 9
Aug. 16
Loans secured by
United States
bonds and certificates:
July 19
July 26
Aug.2
Aug.9
Aug. 16

23
23
23
23
23

13
13 i
13
13 !
13

:
!
!
!
i

10,123
10,123
10,073
10,073
10,074

6,547
6,548
6,548
6,548
6,448

5,773
5,415
5,397
5,182
5,737

15,258
15,311
14,595
14,719

5,069
4,961
4,931
4,403
14,659 | 5,251

7,696
10,741
10,144
12,714.
13,001 I

23,050
27,279
26,367
31,121
31,694

29,501 i 13,086
32,600 15,215
31,287 15,241
16,360
33,981
34,108 17,291

12,316
12,207
11,972
13,436
10,848

10,376
10,375
10,373
10,374
10,374

3,230
3,230
2,000
2,000
2,000

750
750
750
750
750

11,968
12,328
11,761
10,889
11,760

3,442
3,390
932
940
837

1,659
1,744
1,686
1,6(52
1,779

55,884
56,514
52,279
50,636
53,587

3,790 ; 3,172
5,454 ! 3,683
3,516
5,855
6,326

1,788
2,516
467
667
667

74.1
1,021
1,019
1,268
1 264

35,271
50,146
47,035
61,622
62,795

17,242
19,760
19,801
20,519
21,084

25,516
26,386
25,650
27,118
28,460

8,400
9,136
3,399
3,607
3,504

3,150
3,515
3,455
3,6*0
3,793

141,034
156,541
147,818
160,763
164,887

723
723
892
894
1,094

2,937
3,443
2,957
3,026
3,153

714
718
90
94
73

626
609
619
596
562

29,505
29,670
28,759
29,424
27,823

4,005 ! 7,723
7,723
4,005
7,628
4,005
7,628
4,005
4,005 I 7,747

7,154
11,741
10,897
15,866
15,883

8,584
8,791
8,762
8,284
8,168

165
166
162
164
165

4,012
6,249
6,305
7,952
8,035

2,119
2,065
1,971
1,728
1,749

5,729
6,583
6,429
6,210
6,723

5,744 I
6,681 I
6,614 I

1,695
1,695
1,695
1,695
1,695

2,451
2,453 i
2,453 I
2,453
2,453 ;

49,879
49,881
48,504
48,505
48,525

912

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1918.

Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities as at close of
business on Fridays from July 19 to Aug. 16, 1918—Continued.
4. MEMBER BANKS OUTSIDE R E S E R V E CITIES—Continued.
[In thousands of dollars; i. e., 000 omitted.]
|
New
York.

Philadelphia.

224,657
224,317
224,376
225,088
225,520

202,793
204,571
200,802
215,009
204,047

69,033
60,984
69,805
69,181
69,959

256,291
260,387
259,505
264,493
265,382

244,610
249,378
244,001
262,426
249,003

84,238
78,264
87,017
87,269
88,999

100,810
102,706
105,411
105,273
100,766

6,012
5,649
5,998
5,798

I Boston.

Cleveland.

Richmond.

Atlanta. Chicago.

St.
| MinneLouis. i apolis.

Kansas
City.

Dallas.

San
Francisco

Total.

Other loans and in -I
vestments:
j
July 19
:
July 26
i
Aug.2
1
Aug. 9
:
Aug. 16
i
Total loans and in- |
vestments:
!
July 19
i
July 26
:
Aug.2
!
Aug. 9
i
Aug. 16
i
Reserve with Federal
Reserve Banks:
!
;
July 19
July 26
j
Aug.2
i
Aug. 9
i
Aug. 16
!
Cash in vault:
I
July 19
!
July 26
'
Aug.2
i
Aug. 9
;
Aug. 16
i
Net demand deposits j
on which reserve is j
computed:
i
July 19
i
July 26
''
Aug.2
Aug. 9
Aug. 16
Time deposits:
July 19
:
July 26
i
Aug.2
;
Aug. 9
:
Aug. 16
;
Total net deposits on !
which reserve is !
computed:
!
July 19
!
July 26
j
Aug.2
;
Aug. 9
1
Aug. 16
!
G overnment deposits:;
j
iul v 26
!
Aug.2
!
AUJ?. 9

Aug. 16

36,005
35,685
12,516
12,515
12,441

11,008
11,051
10,724
10,989
10,750

21,580
22,877
21,918
21,942
22,131 j
j

135,726
134,782
132,914
137,047
139,456

45,179
45,539
16,005
16,216
16,018

14,784
15,175
14,798
15,265
15,105

27,839 i 71,850
29,260 | 74,297
28,617 74,417
"' '""
28,610 75,674
29^489 76,157

6,417
5,753
6,420
6,541

2,387
2,162
917
951
927

939
749
743
811
783

1^484 |
1,351 !
1,640 I

5,401 j
4,364 j
4,617 j
4,866 i
4,394 |

.1,782
1,922
651
800
603

508
406
412
326
356

1,444
1,316
1,260
1,042
1,387

8,442
8,410
8,320 !
8,329
8,215 I

15,458
16,315
15,563
17,738
17,950

82,8-15 107,273
82,223 104,953
84,718 !104,307
83,860 ,106,903
78,588 ;107,837

13,491
12,462
13,521
12,727
12,915

11,585
14,853
14,369
13,136
13,113 i

5,604
5,525
4,662
5,477
5,479

8, 719
8,433
7,956
8,392
8,758

8,658
8,129
7,836
8,128
7, 786

4,261
3,346
4,076
3,146
3,938

154.424
154'302
156.150
154 671
157,487

187,771 I
174,967
174,560 !
174,191 !
176,198

67,313
67,636
69,813
69,638
nn
70,774
!

59,416
71 201
67,113
67,977
68,996

71,520 I 23,637
73,759 25,032
74.178 10,121
9,952
78:109
9,855
79;827

80,609
30,478
30,552
31,135
31,314

6,279
6,476
6,315
6,299
6,656

19,663
27,773
24,032
24,103
24,421

17,103
16,304
16,342
19,192
18,223

14,830
14,727
3,562
3,561
3,607

4,286 I
4 289 !
4,312 j
4,330 j
4,318 i

70,004 67,843
70,411 i 83,104
72,519 j 77,412
72,338 j 78,307
73,627 79,462

78,850
80,746
81,182
86,334
87,637

29,993
31,344
11,647
•11,478
11,401

10,279 I
10,248 j
10,168 i
10,185 ;I
10,066

1,093
2,679
2,273
2,449
2,753

4,423
4,792
4,693
3,847
5,953

1,392
1,494
80
155
155

235
238
371
224
424

68,811
68,845
69,446
69,700
69,863

!
|
!
|

!
i
!
|
i

5,134
4,419
5,071
4,492
5,000

1,336 j

!
;
I
!
i
i
!
i
j

25,589
23,657
25,262
27,322
29,523

842,270
833,241
817,611
835,992
824,287

31,482
29,664
31,443
33,906
36,422

1,012,809
1,019,452
994,188
1,026,179
1,016,797

3,803
4,031
3,914
4,214 J
4,123 !

1,599
1,840
1,443
1 —
1,749

53,099
54,615
53,122
53,028
53,515

3,125 I
2,985 i
2,981 !
3,036 j
2,921 '

1,209
1,078
1,128
1,186
1,446

40,241
36,398
35,988
35,414
36,589

61,487
62,923
63,183
63,183
63;491

44,606
46,675
44,699
47,236
46,432

18,901
19,299
18,538
19,782
21,118 j .

651,488
657,596
639,055
647,623
656,852

5,718 I 20,498
5,286 i 21,403
5,748! ! 21,706
5,733 21,755
5,743 1 21,641

6,055 i
6,022 !
6,005
" nne '
6,760 !!
5,555

193,852
201,603
188,020
192,568
191,341

21,496 j
21,880
21,112 |
22,679 i
23,499 !

734,568
743,997
719,635
... , 730,153
! 738 855

61'
775 I
1,023 ];
780
j
825 i

38,702
45,809
44,076
49,491
58,908

!
183,914
200,889
183,807 ;j 188,029
187,654
185,913
187,535
184,542
180,618
187,428

12,427
13,659
11,440
; 14,436
! 18,281

12,491
15,406
15,147
18,999
20,646

2,357
2,357
5,479
4,832
5,075

17,909
18,580
18,026
20,195
20,411 !

|
\
i
•

1,072 ;
1,024 I
755 !
756 j
996 i

53,391
55,848
54,002
56,560
55,706

j
|
!
!

2,595 !
3,385
2,815
3,013
3,800

-1

913

FEDKBAL EESEKVE BULLETIN.

SBPTBMBBB 1, 1918.

EARNINGS ON INVESTMENTS OF FEDERAL RESERVE BANKS.
Average amount of earning assets held by each Federal Reserve Bank during July, 1918', earnings from each class of earning
assets, and annual rates of earnings on basis of July, 1918, returns.
Average balances for tho month of the several classes of earning assets.
15iUs discounted for Bills bought
in open
members and
market.
Federal lieserve Banks.

Federal Reserve Bank.

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

! 878,351,444
| 384,581,752
I 70,513,203
I 85,863,091
! 57,314,599
j 33,731,192
!! ISO, 535,488
01,765,222
52,329,900
69,307,188
31,742,644
59,613,699

$23, 889,458
107 700,920
15, 106,579
I*, 519,452
3, 566,860 I
3, 753,538 !
17, 186,023 I
2, 677,857 !
594,500 ;j
94,859
1, 408,065 i
18, 676,070 I

S2,949,698
11,203,289
3,006,352
8,824,220
2,663,410
1,734,339
9,201,650
2,555,400
2,487,600
10,218,869
5,047,823
4,503,966

1,165,849,422

209,174,231 ;

64,401,616

Earnings from—

Federal Reserve Bank.

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Lo'iji;*.
Minneapolis
Kansas City
Dallas
San Francisco
Total

Bills discounted for
Bills
members
bought
and
in
open
Federal.
market.
Reserve
Banks.

3293,412 I $86,365
1,359,001 i 383,596
258,925 | 54,375
324,637 j 52,301
225,250 ! 14,203
128,338 j 13,763
070,188 i 63,975
230,246 i 10,419
212,406 !
2,208
298,573 !
368
128,127
5,837
230,918 ! 67,319
| 4,360,021 ; 754,7:

United
States
securities.

Municipal
warrants. !

$50,520

10,663

Total.

$105,190,600
503,541,481
88,626,134
109,206,763
63,544,869
39,229,782
206,923,161
06, mS, 479
55,412,000
79,620,916
38,198,532
82,793,735

61,183 I 1,439,286,452

Calculated annual rates of earnings from-

Municipal warrants.

87,998
23,689
8150
8,442
25,232 !
5,619 :....
4,731 |
48
21,859 I
5,525 !
5,796 ;
21,522 L
10,088 !!
10)421
150,922 !

United
Stales
securities.

Total.

£387
1,766
321
402
245
146,
756,
246
220',
320,
144,
303,

193 i 5;2f»5,870

Bills discounted
Bills
for mem- bought
bers and
in
open
Federal
Reserve market.
Banks.
Per cent, j Per
4.41
4.16
4.32
4.45
4.63
4.34
4.37
4.39
4. 78
5.07
4.75
4.56
1.40

United
States
securities.

Municipal warrants.

Total.

cent. \ Per cent. Per cent Per cent.
3.19
4. Si
4.26
2.48
4.13
4.19
3.30
4.27
4.23
3.36
4.31
4.24
2.48
4.55
4,69
3.11
4.27
4.18
2.79
4.30
4.38
2.55
:
4.33
4.58
4.68
2.73
4.38
4. 74
2.48 i
4.56
4. 44
2.35 i
4.88
4.40
2.78
i
4.24
4.24 1

2.76

3.81 !

4.31

914

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1918.

GOLD IMPORTS AND EXPORTS.
Gold imports and exports into and from the United States.
[In thousands of dollars; i. e., 000 omitted.]

Total,
Jan. 1 to
Aug. 10,
1917.

Ore and base 'bullion
United States Mint or assay oiTice bars.
Bullion refined
United States coin
Foreign coin
Total

,
EXPORTS.

Domestic:
Ore and base bullion
United States Mint or assay office bars
Bullion refined
Coin

Total.,
Foreign:
Bullion refined.
Coin
Total
Total exports..
Excess of gold imports over exports since Jan. 1,1918, $23,654; excess of gold imports over exports since Aug. 1,1914, $1,073,958.

DISCOUNT RATES.
Discount rates of each Federal Reserve Bank approved by the Federal Reserve Board up to Aug. SI, 1918.
Maturities.
Trade acceptances.

Discounts.

Federal Reserve Bank.

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

Within 15
days,
including
member
banks'
collateral
notes.

Secured by U. S. certificates of indebtedness or Liberty loan
bonds.

16 tc 60
days.

61 to 90
days.

Agricultural and
live-stock
paper
Within 15
over 90 days,includdays.
ing member
banks'
collateral
notes.

Ito60
days,
inclusive.

61 to 90
days,
inclusive.

16 to 90
days.

A
4
A
4-1
4?4
4
4
4
4*
4

1
2

Rate of 3 to A\ per cent for 1-day discounts in connection with the loan operations of the Government.
Rate for trade acceptances maturing within 15 days, A\ per cent.

,
,
.__..
,
iring within 15 days will be
r
r
taken at the lower rate.
NOTE 4.—Whenever application is made by member bariKS for renewal of 15-day paper, the Federal Reserve Banks may charge a rate notexceeding that for 90-day paper oi the same class.

SEPTEMBER 1, 1918.

915

FEDERAL RESERVE BULLETIN.

Estiiiiated general stock of money, money held by the Treasury and by the Federal Reserve system, and all other money in the
United States Aug. 1,1918.

Held in the H e l d
r for
UnSed
* * o Reunneu States
otates i Federal
ITWI,™.?.!
r}~
Treasury as \ servo
Banks
assets of the 1
and
agents.
Government.

• General stock
I of money in
! the United
i
States.
!

Gold coin 2
Gold certificates
Standard silver dollars
Silver certificates
Subsidiary silver
Treasury notes of 1890
United States notes
Federal Reserve notes
Federal Reserve Bank notes
National bank notes
Total:
Aug. 1,1918
July 1. 1918
Juriei, i918
May 1,1918.
Apr. 1,1918..
Mar. 1,1918..
Feb. 1,1918..
Tan. 1,1918...
Uec. 1,1917..
Nov. 1,1917..
Oct. 1,1917..
Sept. 1,1917.,
Aug. 1,1917..
July 1,1917..

1 $3,080,767,801
i
j
! 473,197,059 i
i
!
!
232,222,651
i
I 346,681,016
I » 2,023,145,030
|
15,317,280
:
723.72S, 002
I
j 6,895,089,799
! 6,742,225,784
! 6,615,007,782
6,540,954,630
6,480,181,525
6,351,548,056
6,271,603,039
6,256,198,271
6,026,127,909
5,823,854,335
5.642,264,856
5', 553,661,154
5,513,292,894
5,480,009,884

Amount per
i Held outside capita
outside
the United
the United
States Treas- States
Treasury and Fed- ury and
the
eral Reserve
Federal
Resystem.
serve system.

4 45,484,317
119,391,396
3,494,900
10,534,507

8448,938,791
498,020,609
78,106,835
353,088,844
.218,072,330
1,845,141
295,002,179
1,855,350,769
11,690,875
689,719,375

2,054,455,993
2,018,361,825
1,983,796,097
1,909,594,674
1,873,524,132
1,827,126,208
1,834,102,608
1,723,570,291
1,646,773,746
1,546,124,691
1,429,422,432
1,373,987,061
1,395,982,728 i
1,280,880,714 !

4,449,835,748
4,367,739,209
4,282,888,981
4,310,167,648
4,266,800,719
4,193,494,672
4,104,924,306
4,255,584,622
4,131,187,015
4,035,464,267
3,970,373,397
3,940,019,826
3,869,041,841
3,945,457,556

8267,152,371 I §1,375,731,870
!
490,924,160
32,118,420
8,038,719
13,294,197
3 856,124
6,194,520 j
48,402,865 j
161,505 !
23,474,180 i
390,798,058 |
356,124,750 |
348,322,704
321,192,308
339,856,674
330,927,176
332,576,125
277,043,358
248,167,148
242,265,377
242,469,027
239,654,267
248,268,325
253,671,614

§41.97
41.31
40.51
40.82
40.47
39.83
39.04
40.53
39.40
38.54
37.97
37.73
37.10
37.88

1 Includes reserve funds against issues of United States notes and Treasury notes of 1890 and redemption funds held against issues of national
bank2 notes, Federal Reserve notes and Federal Reserve Bank notes.
Includes balances in gold settlement fund standing to the credit of the Federal Reserve Banks and agents,
a Includes standard silver dollars.
* Includes Treasury notes of 1890.
5 Amended figures.

'916

1, 1918.

FEDERAL RESERVE BULLETIN.

ABSTRACT OF CONDITION OF MEMBER BANKS.
Abstract of reports of condition of member State banks and trust companies in each Federal Reserve district on June 29, 1918.
[In thousands of dollars; i. e.. 000 omitted.]
DisDisDistrict
trict
trict
District
No. 4
No. 1 No. 2 (66 No. 3
(30
(24
(16
banks).
banks).
banks). banks).

DisDistrict
trict
No. 7
No. 6
(128
(38
banks). banks).

District
No. 5
(20

DisDisDisDisDistrict
trict
trict
trict
trict
No. 8
No. 9 No. 10 No. 11 No. 12
(24
(40
(58
(53
(16
banks). banks). banks). banks). banks).

Total
United
Siatos
(513
banks).

RESOURCES.
I J oans a n d discounts
Overdrafts
Customers' liability account of acceptances
a n d under letters of
credit
United States securities
(exclusive of U n i t e d
States securities bor- j
rowed)
!
W a r savings a n d thrift
s t a m p s actually owned.
Stock of Federal Reserve
Bank
Other bonds, stocks, etc. j
(exclusive of securities;
borrowed)
j
B anking house
|
O ther real estate o w n e d . .
Furniture and fixtures-..
Due from b a n k s a n d
bankers
Exchange for clearing
housej also checks on
b a n k s i n same p l a c e . . .
Outside checks and other ,
cash items
I
Cash i a v a u l t
Lawful reserve w i t h Fed- !
eral Reserve B a n k
Items with Federal R e serve B a n k i n process
of collection
i
Due from U n i t e d States j
Treasurer
Interest earned b u t n o t
collected
;
Other assets
i
Total

306,934 1,491,255
127
602

91,488
111

212,218
199

33,516
375

92,058
158

496,989
293

151,704
169

32,043 I 42,691
51 j
64

20,744
84

72,795
441

3,0-.U,435
2,674

16,884

106,907

1,096

2,167

260

1,851

10,600

7,883

100

114

1,874

149,797

19,239

238,839

12,418

27,049

3,914

17,049

73,279

27,179

2,310 ! 4,440

437,424

151

289

191

133

300

432

1,508

8,490

1,574

2,310

318

666

2,789

1,163

75,811
7,376
79
223

447,201
39,514
6,754
443

86,917
5,268
1,582
264

135,404
10,403
3,913
569

9,739
1,207
580

15,731
5,576
2,527
358

149,056
10,355
1,114
1,438

49,370 j 194,174

19,175

24,417

5,185

20,654

71,910

1,514

3,104

351

1,132 i
6,711
11,226 \
40,781
i
29,449 ' 281,211
j
j
3,652 j
8,691

215
3,781

627
6,056

160
1,181

15,868

19,044

1,092

1,779

6,008 I

142

6 j

665 j 10,582
2,387 ! 71,984

605 !
1,017 j

503
2,900

4.43

; 533,264 J3,026,540

!
I
109,514
Capital stock paid i n — j 24,000
147,638
Surplus fund
| 26,279
Undivided profits, less j
expenses and taxes j
29,178
paid
I 7,032
Interest and discount |
717
5,266
collected but not earned
Amount reserved for
1,016
5,178
taxes accrued
Amount reserved for in1,336
|
5,262
terest accrued
"Due to Federal Reserve
33
Bank
Due to banks and bankers 18,597 i 312,918
310,245
|1
,670',606
Demand deposits
77,124 I 221.815
Time deposits
United States deposits... 47,521 i 310', 785
Bills payable with Fed315 | 42,368
eral Reserve Bank
Bills payable other than
with Federal Reserve
200 j 10,813 !
Bank
Acceptances, letters of
credit, and travelers'
17,101 | 110,714
checks outstanding
1,781 ! 44,422
Other liabilities

2,245

9,463

1,822

158

213

147

381

19,717

32,395
4,357
627
572

3,169
579
133
202

11,001
832
107
78

714
515
159
271

11,775
2,206
1,727
444

978,913
88,188
19,302
4,951

80,672

19,509

4,970

11,327

2,872

12,568

444,893

3,245

13,656

3,528

489

1,134

1,407

107,135

1,916
4,161

8,990
22,845

936
3,801

227
856

255

740
3,323

22,054
100,391

2.425 i

8,725

49,921

14,975

1,790

4,758

5,715

435. 590

336 I

878

3,706

3,517 j

501

2-1,352

149

36 |

143
1,178

467
17,977

80
323

4
276

155
3IG

13,221
99,108

60,313 | 177,031

944,596

273,186

47,127

78,632

31,271

125,923 5,994,824

6,296 i 13,360
50,956 j 20,385
4,413 I 8,859 | 42,510 j 18,391

4,050
1,393

4,175
2,969

3,798
1,178

9,270 I 283,414
3,526 j 319,080

3!
626 i

32 ;

47 |

145
918

357

244,034

452,907

14,900
37,551

22,710
54,343

4,98-1

8,630

1,469 j

610

514

1,456

73,83d

151

43 |

210 I

88 |

122 ;

55 j

150

6,890

19'6

558

56 :

299 j

1,279 j

366 |

61 j

140

370

9,52S

335

507

85 !

287 j

740 j

239 j

40 j

LIABILITIES.

Total.
Liability for rediscounts,
including those with
Federal Reserve Bank..

533,264 J3,026,540

6,659
138,643
16,828
15,272

11,410
141,255
175,623
27,667

6,900

3,939

1,927
26,358
14,755
1,320

I
j
j
|

1,621 i

1,964 j 12,959

4,477 |

516 I 57,432 i 23,261
581 334,678 j 105,104
236 !362,026 ! 59,901
520 | 53,788 ! 11,879
!
4,393 ! 7,893 i 18,549

43,566

9,041

60
i 7,381 j 10,610
1,905 j 10,381
i 14,126 ! 37,345 18,018
47,658
! 17,363 i 18,664
3,754
45,171
! 1,101 i 3,152 222
2,412
I
!
I
270
586
513
1,673

93
i
j 481,997
2,918,617
1,052.290
485^ 639

1,225 j

748 ;

3,647 j

1,825 |

1.096
'601

2,165
2,052

!
563 :
152

851 : 10,580 "
2 0 7 • 6,020 |

7,883 i.
804 j

244,034

452,907

4,333

3,567

26 !

117

666 I

1,864 j

2,982 j 16,472

89,050

1,238

1,808

24,177

100
62

1,875
67

153,928
57,195

60,313 | 177,031 j 944,596 I 273,186 | 47,127 | 78,632
31,271
==-"•-"

15,773 |

612

125,923 5,994,824

12,218 | 2,422

"2,159

780

3,125

109,. 291

SEPTEMBER 1,

917

FEDERAL EESEBVE BULLETIN".

1918.

Abstract of reports of condition of member State banks and trust companies of the Federal Reserve system on June 29, 1918,
arranged by classes.
[In thousands of dollars; i. c, 000 omitted.]
Total
Other
Central
United
Country States
Reserve
Reserve
(513
city banks city banks [360banks
banks),
bants). June
(56 banks). (97 banks).
29
1918.

Total
United
States (449
banks),
May 10,
1918.

RESOURCES.

Loans and discounts
Overdrafts
Customers' liability account of acceptances and under letters of credit
United States securities (exclusive of United States securities borrowed).
"War savings and thrift stamps actually owned
Stock of Federal Reserve Bank
Other bonds, stocks, etc. (exclusive of securities borrowed)
Banking house
Other real estate owned
Furniture and fixtures
Due from banks and bankers.
Exchanges for clearing house, also checks on banks in same place.,
Outside checks and other cash items
G old coin and certificates.
All other cash in vault
,
Lawful reserve with Federal Reserve Bank
Items with Federal Reserve Bank in process of collection..
Duo from United States Treasurer
,
Interest earned but not collected
,
Other assets
,
Total.

,720,253
656
122,938
267,813
520
10,180
470,544
3S,190
6,635
752
234,265
81,211
12,288
18,293
31,337
311,056
13.128
'219
9,989
63,877

872,439
1,086
25,937
105,574
631
6,723
315,987
34,549
10,164
2,114
145,370
21,646
6,695
3,777
26; 634
88,502
7,734
463
1,634
24.383

442,743
932
922
64,037
671
2,814
192,382
15,449
2,503
2,085
65,258
4,278
3,071
3,080
17,270
35,132
3,490
175
1,598

3,044,435
2,674
149,797
437,424
1,822
19,717
978,913
88,188
19,302
4,951
444,893
107,135
22,054
25,150
75,241
435,590
24,352
857
13,221
99,108

2,884,923
2,811
155,390
618,639
985
18,264
960,823
84,705
17,015
4,372
372,282
156,761
17,888

3,423,044

1,702,042

863,738

5,994,824

5,938,746

135,350
178,093
33,929
5,056
6,098 j
5,619 !

91,325
132,604

356,397 j
1,839,659
296,038
339,418
50,961
7,961

96,884
723,892
451,243
110,872
25,336
7,331
26,153
5,194

56,739
38,383
14,506
580
828
1,520
93
28,716
355,066
305,009
35,349
12,753
8,885
1,101
4,210

283,414
349,080
73,885
6,890
9,528
9,041
93
481,997
2,918,617
1,052,290
485,639
89,050
24,177
153,928
57,195

270,878
340,604
75,641
5,923
9,924
17,558
55
465,679
2,959,096
1,004,658
402,043
172,079
11,232
158,999
44,377

3,429,044 I 1,702,042

863,738

5,994,824 I

5,938,7

34,845
10.3

25,1.40
7.2

109.291 I
13.3 I

1112,224
432,401
25;267
803
12,126
61,067

LIABILITIES.
Capita! stock paid in
Surplus fund
Undivided profits, loss expenses and taxes paid
Interest and discount collected b u t not earned
Amount reserved for taxes accrued.
Amount reserved for interest accrued
Due to Federal Reserve Bank
Due to banks and bankers
Demand deposits
Time deposits
United States deposits
Bills payable with Federal Reserve Bank
Bills payable other than with Federal Reserve Bank
Acceptances, letters of credit, and traveler's checks outstanding.
Other liabilities

Total.
Liability for rediscounts, including those with Federal Reserve Bank
Ratio of reserve with Federal Reserve Bank to net deposit liability (per cent)

Total cash in vault.

J26.674

47; 791

49,306 I
16.1 i

25,450
1,254
2,602
1,902

107,477
13.2

918

FEDERAL RESERVE BULLETIN.

SEPTEMBER 1, 1918.

Abstract of reports of condition of all member banks in each Federal Reserve district on June 29, 1918 {including 7,700
national banks and 513 State banks and trust companies).
[In thousands of dollars; i. e., 000 omitted.]

District District District District District District District District District District District District
No. 6
No. 2
No. 7
No. 9
No. 10 No. 11 No. 12
No. 1
No. 3
No. 4
No. 5
No. 8
(1,172
(821
(599
(416
(687
(647
(543
(407
(684
(776
(487
(974
banks).
banks). banks).
banks). banks). banks). banks). banks).

Total,
United
States
(8,213
banks).

_|
RESOURCES.

Loans and discounts.. 1,020,960 4.140,419 747,2401,095,108 544,915 420,2721,793,231
Overdrafts
1087
1,087
897
2,379
1,451
1,247
656
351
Customers7 liability
account of acceptances and under
13,691
letters of credit
11,974
5,938
31,807
62,232 204,451 17,765
United States securities (exclusive of
United States securities borrowed).. 137,782 784,825 171,795 229,824 119,222 111,419 316,534
War-savings and
thrift stamps actu719
751
2,175
872
1,150
ally owned
735
2,127
Stock of Federal Re6,474
20,667
6,937
3,825
3,048|
9,1
serve Bank
Other bonds, stocks,
etc. (exclusive of
securities borrowed) 217,789 964,887 366,950 395,283 84,004 46,39oi 315,727
50,706 23,155 18,434| 44,912
28,031 82,614 29,429
Banking house
Other real estate
9,539
5,203
1,060
12,286
2,833
5,730
6,363
owned
.Furniture and fix3,034
2,496
1,553
3,146
3,448
2,603
5,784
tures
Due from banks and
157,201 361,792 119,031 198,230
86,364 305,072
bankers
Exchanges for clearing house; also
checks on banks in
21,952 13,320
27,993 243,597 32,359
51,876
same place
Outside checks and
3,244
6,296
3,289
3,874
22,907
4,616j 15,115
other cash items
37,321 131,619
48,471 21,385 19,048
80, r"
Cash in vault
Lawful reserve with
Federal
Reserve
84,349 757,199
84,107 115,634 44,792 38,514 181,287
Bank
Items with Federal
Reserve Bank in
29,959
13,170
28,247
47,802
16,362
7,:
24,854
process of collection.
Due from United
3,443
3,172
5,746
2,739
5,564
5,103
2,157
States Treasurer....
Interest earned but
1,307
2,351
1,529
1,241
17,641
307
193
not collected
1,255
3,871
80,861
672
1,555
18,550
Other assets
5,566
Total.
1,813,836 7,887,8781,659,153 2,239,511 978,007 785,005 3,212,305

Capital stock paid in..
Surplus fund
Undivided profits,
less expenses and
taxes paid
Interest and discount
collected but not
earned
Amount reserved for
taxes accrued
Amount reserved for
interest accrued
Due to Federal Reserve Bank
Due to banks and .
bankers
\
Demand deposits
j
Time deposits
j
United States depos- ;
its
|
Bills payable with j
Federal
Reserve |
Bank
|
Bills nayablo other i
than' with Federal
Reserve Bank
\
Acceptances, letters I
of credit, and trav- i
elers' cheeks out-

514,818
768

538,867
1,213

722,362
2,241

392,631
943

10,852

4,163

991

2,381

121,965

79,107

120,773

99,078

1,378

879

3,601
81,410
17,706

52,518
14,949

730,93612,661,759
1,933
15,166

21,233

387,478

157,885 2,450,209

1,324

1,192

1,013

14,315

3,529

2,982

4,442

76,699

73,439
17,189

13,218
15,408

120,666 2,732,286
23,504
366,037
7,920
65,587
5,319
38,428
174,305
1,905,5^35

2,633

3,790

4,244

2,197

2,751

3,010

3,087

84,747

93,279

172,692

69,254

11,027

8,355

16,925

5,379

21,227

463,812

2,186
18,725

4,032
16,670

4,629
26,211

4,274
16,152

5,248
29,296

79,710
482,100

51,641

36,510

66,454

35,700

68,960 1,565,147

16,740

1,812

10,350

5,637

6,026

208,244

2,256

1,658

2,274

3,113

39,905

301
438

1,081
471

27,474
114,157

246
505
945,401

770
507
134
279
864,4051,249,684

674,3151,384,578 23,694,078

117,233 305,381
99,249 355,725

91,567
140,198

145,124
140,925

77,471
51,315

62,978
39,075

199,638
129,210

76,197
44,327

62,181
32,383

77,738
41,232

65,041
35,914

43,008

129,527J

33,487

46,225

16,880

12,909

50,550|

15,966

12,297

17,078

15,648

100,671 1,381,220
48,239 1,157,792
22,308

415,883

1,779

16,435J

1,475

2,475

1,534

918

5,118

1,141

1,278

2,096

1,105J

928

36,282

3,324

12,122!

693

1,839

516

819

3,745

1,0301

1,071

1,043

4891

1,200

27,891

2,103

7,743!

1,257

1,622

1,474

604

1,727

500j

1,193

486

747

19,738

373

2,878!

240

1,.

190!

149

282J
80J

115

5,615

133,9391 ,420,037
917.514 3;,882,417
20i;575 538,818

171,521
756,766
256,728

222,273
941,251
473,401

96,007
399,816
185,948

159,125

701,245

90,718

131,481

37,551

9,967

123,959;

25,304

15,154

26,513

14,457;

4,735

19,247j

6,246

5,810

13,211

65,831

220,457i

20,325

13,942

12,423

78,119 455,030 150,418! 93,513
342,9641,259,750 375,047 321,934
142,873 738,392 144,145! 248,509

63,554! 167,857 3,278,182
225,014
16910,753,727
578,844 340,255! 637,169
179,996 54,244j 230,752 3,395,381

170,208

44,432!

29,345

45,519

61,010

31,877j

15,977

20,247

5, OOlj

8,196

3,774

9,087

10,156

5,947'

32,431

10,860'

4,178

1,056

34,881

21,363;

55,535 1,521,403

15,006|

12,946

372,417

12,584j

9,997

108,G44

2,301

22,221

411,972

SEPTEMBER 1,

919

FEDEEAL RESERVE BULLETIN.

1918.

Abstract of reports of condition of all member banks in each Federal Reserve district on June 29, 1918 {including 7,700
national banks and 513 Stale banks and trust companies—Continued.
[In thousands of dollars; i. e., 000 omitted.]
I
Total,
District District District District District District District District District j District j District District United
No. 4
No. 9
No. 10 No. 11 No. 12
No. 7
No. 1
No. 8
No. 2
No. 3
No. 5
No. 6
States
(776
(821
(1,172
(416
(487
(687
(543
(407
(599
(647
(974
(684
(8,213
banks).
banks), i banks). ; bonks). banks). banks). banks). banks), banks). ! banks). banks). banks).
LIABILITIES—COntd.

National bank notes
outstanding
Other liabilities
Total

50,449
3.032

89,015
62,872

55,0357,150!

»l,406!
6,343-

11,813,830 7.887,878:1,059,153j2-, 230,511; 378,007

Liability for redia- j
counts, including
those with Federal
Reserve Bank

64,508

180,308
i

42,837!
.

30,988:

78,731
18,420

41,474
4,188

785,005 3,212,305

945,401

62,917

36,063!

51,
3, HiO

40,416
2,254

46,271

18,805

29,278:
2,181

46,993!
2,184!

44,001
2,448

61,908
11,985|

(581,114
126,817

864,40511,249,684| 074,315 1,384,578 23,694,078

30,196;

9,711.

21,707

35,069

025,380

Abstract of reports of condition of all member banks of the Federal Reserve system on June 29, 1918, arranged by classes
(including 7,700 national banks and 513 State banks and trust companies).
[In thousands of dollars, i. e., 000 omitted.]

I
Central
Other re- j Country
Reserve
serve city I banks
city banks banks
(451
(7,628
(134
banks). '. banks), j
banks).

«
1918.

Total
United
States
(8,132
banks),
May 10,
1918.

RESOURCES.

Loans and discounts
Overdrafts
Customers' liability account of acceptances and under letters of credit
United States securities (exclusive of United States securities borrowed)
War savings and thrift stamps actually owned
Stock of Federal Reserve Bank
Other bonds, stocks, etc. (exclusive of securities borrowed)
Banking house
Other real estate owned
Furniture and fixtures
Due from banks and bankers
Exchanges for clearing house, also checks on banks in same place
Outside checks and other cash items
Gold coin and certificates
All other cash in vault
Lawful reserve with Federal Reserve Bank
Items with Federal Reserve Bank in process of collection
Due from United States Treasurer
'.
Interest earned but not collected
Other assets
Total..

12,661,759
15,166
387,478
2,450,209
14,315
76,699
2,732,286
366,037
65,587
38,428
1,905,565
463,812
79,710
113,095
369,005
1,565,147
208,244
39,905
27,474
114,157

12,142,099
14,465
419,815
3,196,932
6,423
75,020
2,728,382
361,928
62,633
37,693
1,869,708
835,634
82,058

8 ; 237,407

7,104,810 ; 8,351,861 | 23,094,078

24,070,465

325,200
371,290
124,310
19.942
14,330
7,275
1,528
1,731,231
3,926,339
421,989
77S>3
1J1,548
8,206
254,694
51,145
57,137

404.681
371,057
109,665
11.093
8,747
5,159
1,180
1,226,196
3,077,257
843,545
536.338
131,351
28,033
142,650
177,336
30,507

551,339
415,445 i!
181,908
5,242 i
4,814 !
7,294 •
'4,907 !
317,755 '
3,750,131 i
2,129.8*7 i
2O6',822 •'
99,518 i
72,405 !
14,028 i
452,633 !
39.173 i

108,844
411,972
681,114
126,817

1,367,060
1,143,321
431,455
33,197
31,042
31,724
4,746
3,348,501
11,050,610
3,346,823
1.459,274.
'487,203
71,071
441,756
679,931
142,746

8,237,407

7,104,810

8,351,861 I 23,694,078

24,070,465

172,800
IS. 5

251,713
10.9

4,482,630
1,384
238,189
744,673

796

21,898
789,759
78,975
10,368
1,516
441,194
274,313
24,099
50,287
92,903
819,337
66,901
4,286
16,506
77.293

3.783,865 j 4,395,264
3,793 i
135,279 i
14,010
621,135 i 1,084,401
3,160 i
10,359
23,223 |
31,778
753,463 ; 1,189,064
124,593 !
162,469
22,608 !
32,611
7,140 i
29,772
757,311
706,760
148,784
40,715
29,410
26,201
20,432
42,376
116,047
160,055
385,779 '
360,031
122,719 !
18,624
12,113
23,506
5,307
5,661
28,649 '•
8,215

i 574,599
1,536,296
197,718
40,803
25,668
32,591

LIABILITIES.

Capital stock paid in
Surplus fund
1
Undivided profits, less expenses and taxes paid
Interest and discount collected but not earned
Amount reserved for taxes accrued
Amount reserved for interest accrued
Due to Federal Reserve Bank
A
Due to banks and bankers
Demand deposits
Time deposits
United States deposits
Bills payable with Federal Reserve Bank
Bills payable other than with Federal Reserve Bank
Acceptances, letters of credit, and travelers' chocks outstanding.
National-bank notes outstanding
Other liabilities
Total..
Liability for rediscounts, including those with Federal Reserve Bank
Ratio of reserve with Federal Reserve Sank to net deposit liability (per cent;).

Total cash in vault.

^801~!
7.7 I

1,381,220
1,157,792
415,883
36,282
27,891
19,738
5,(515
3,278,182
10,753,727
3,395,381
1,521,403
372,417

6257380
11.9

576,685
11.3

9 20

FEDERAL RESERVE BULLETIN".

SEPTEMBES 1,

1918.

Classification of loans and discounts of 51S State banks and trust companies, members of Federal Reserve system, as shown
by their condition reports for June 29, 1918.
[In thousands of dollars, i. e., 000 omitted.]
District District District District District District District District District
No. 4
No. 3
No. 6
No. 9
No. 7
No. 8
No. 5
No. 1 No. 2
(16
(38
(30
(66
(40
(128
(24
(20
(24
banks). banks). banks). banks). banks). banks). banks). banks). banks),
On demand not secured by collateral..
On demand secured
by Liberty bonds
and United States
Treasury certificates of indebtedness
On demand secured
by other collateral..
On time not secured
by collateral
,
On time secured by
Liberty bonds and
U n i t e d States
Treasury certificates of indebtedness
On time secured by
other collateral
Secured by real estate
mortgages or other
real estate liens or
deeds
Acceptances of other
banks discounted..
Acceptances of this
bank purchased or
discounted
Leans and discounts
not classified
Total shown
by reports
Less adjustment due
to inclusion of rediscounts in loan
classification by
some banks
Total loans and
discounts....

23,432

47,135

1,621

0,007i

1,261

4,280

13,281

12,183

I District
I No. 10
; (16
banks).

1,870;

2,198

I District District
I No. 11 No. 12
(53
i (58
I banks).

Total
United
(513
banks).
121,334

719

7,347

1,005

24,872

8,260

715,381

2,183

14,1711

1,201

230

328

3,094

1,503

103

52,599

417,069

54,772

53,312

8,028

20,218

59,718

36,222

1,112

3,097

974

140,354

496,983

11,109

59,893

14,229

35,876

197,901

47,678

11,296

15,783

5,318

29,268 1,065,688

!
9,467

76,378

2,954

6,853

1,211

46,930

293,636

12,603

37,350

8,079

20,334

102,467

25,609

44,346

3,567

46,673i

3,511

7,957

102,34

6,403

45,723

4,754

852

351

574

3,247

653

507

780

111,736

36,957

8,555j

15,665

8,342

15,614

604,532

17,201

6,280

6,305

2,124

9,547

275,46

105

151

236

58,952

158

25,436

2,981

811

60,849

j
|
21,501

238

365

1,325

42,391

310

2,074

9,729

2,553

308,3581,499,333

92,914

212,506

34,602

93,954

497,025

155,254

32,514

43,686

21,179

1,426

288

1,086

1,896

3,550

471

995

435

91,488i 212,218

33,516

92,058

496,989; 151,704

32,043

42,691

20,744

1,381
0

1,424

8,078

306,934j 1,491,255

365

72,924 3,064,249

129

19,814

72,795 3,044,435

INDEX.
Page.

Acceptances:
Banks granted authority to accept up to 100 per
cent of capital and surplus
859
Development of the acceptance business during 1918
855
Distribution of, statement showing
898
Action of New York Clearing House governing
clearing and collection of
819-821
Asia Banking Corporation, organization of
818
Banking transactions, plan for obtaining figures
showing
821-828
Broderick, J. A., appointment of, as secretary of
the Board
817
Business conditions throughout the Federal Reserve
districts
873-892
Charters issued to national banks during the month. 858
Charts showing changes in foreign exchange rates
since outbreak of the war
841-844
Check clearing and col! ection system, operation of..
894
Commercial failures reported
856
Curtailment of nonessentials, progress in
852-855
Department of Labor, index number of wholesale
prices to be furnished by
810-812
Directors chosen for vacancies in Boston, New Orleans, and Memphis banks
817
Discount operations of the Federal .Reserve Banks 895-901
Discount and interest rates prevailing in various
cities
812-815
Discount rates in effect
914
Division of Foreign Exchange, rulings by
864-866
Earnings on investments of Federal Reserve Banks.. 913
Federal Reserve Agents' fund, transactions through. 893
Federal Reserve Banks:
Earnings on investments of
913
Resources and liabilities of..
902-904
Federal Reserve Board:
Hon. W. P. G. Harding redesignated as governor of
810
Retirement of Hon. P. M. Warburg as member
of
809,816
Secretaryship of, change in
817
Federal Reserve exchange drafts, recommendations
relative to, by representatives of Federal Reserve
Banks
819
Federal Reserve note account of Federal Reserve
Banks and agents
905-906
Fiduciary powers granted to national banks
856
Foreign banking corporation organized
818
Foreign exchange bank, questionnaire relative to,
sent out by the chairman of the Senate Committee
on Banking
832

Page.

Foreign exchange, data obtained in connection
with an investigation made in compliance with a
Senate resolution
832-836
Foreign exchange rates:
Changes in, since outbreak of war
836-840
Charts showing
841-844
Gold imports and exports
914
Gold settlement fund, transactions through
892-893
Hollander, Prof. Jacob H., article by, regarding
holdings by th)e banks of Treasury certificates of
indebtedness
845-847
Informal rulings of the Board:
Warehouse receipts as security
862
Limitations on loans by member banks
863
Discount of paper secured by Government
bonds
863
Interest and discount rates prevailing in various
cities
812-815
Law department:
Notes and bills rediscounted, limitations under
section 5200, Revised Statutes
867
Trade acceptances providing for extension of
time
870
Trade acceptances providing for discount if paid
at certain time before maturity
871
Drafts secured by cattle loan
871
Liability of Railroad Administration for damages on bills of lading signed by agents
872
iberty bonds:
Subscriptions, holdings, etc., by savings banks. 856
List of, lost and recovered.
859-861
Loans for relief of banks and individuals in agricultural districts; statement of War Finance Corporation regarding
828-832
Member banks:
Abstract of reports of condition of
916-920
Statement showing condition of
907-912
Money, stock of, in the United States
915
National banks:
Charters issued to, during the month
858
Fiduciary powers granted to
856
New York Clearing House, action of, governing
clearing and collection of acceptances
819-821
Nonessentials, curtailment of, progress in
852-855
Resources and liabilities of Federal Reserve Banks. 902
Review of the month:
The fourth Liberty loan
801
Treasury certificates of indebtedness
801
Need of conservation
801
The reserve situation
802
Operations of the Federal Reserve Banks
803
i

INDEX.

Review of the month—Continued.
Conditions of member banks
804
Call loans on acceptances
805
Acceptance technique
805
Interest rates on deposits
806
Loans for relief of individuals in agricultural
regions
806
Policy as to silver
807
Movement of gold
807
The trade acceptance situation
808
Reports of business conditions
809
Figures for total bank operations
809
Retirement of Hon. P. M. Warburg
809
Change in organization
810
Savings banks, holdings, subscriptions, etc., of
Liberty bonds by
856
Secretary of the Treasury, statement by, before
Ways and Means Committee regarding war revenue legislation
847-852

Silver, price of, fixed at $1.01 J per ounce
818
State banks and trust companies admitted to the
system during the month
857-858
Total bank transactions, plan for obtaining figures
showing
821-828
Treasury certificates of indebtedness, holdings by
the banks of
845-847
War Finance Corporation, statement issued by, relative to loans to individuals in agricultural districts
828-832
War revenue legislation, statement relative to, made
before Ways and Means Committee by the Secretary of the Treasury
847-852
Warburg, Hon. P. M., retirement of, as a member of
the Board
809,816
Wholesale prices, plan for furnishing index number
of
810-812

Full text of Federal Reserve Bulletin : September 1918

FRASER