Federal Reserve Bulletin, 1915-09

FEDERAL RESERVE BULLETIN ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON SEPTEMBER, 1915 WASHINGTON GOVERNMENT PRINTING OFFICE 1915 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BOARD. EX OFPICIO MEMBERS. CHARLES S. HAMLIN, Governor. FREDERIC A. DELANO, Vice Governor. WILLIAM G. Me ADO O, PAUL M. WARBURG. Secretary of the Treasury, W. P. G. HARDING. Chairman. ADOLPH C. MILLER. JOHN SKELTON WILLIAMS, Comptroller of the Currency. H. PARKER WILLIS, Secretary. SHERMAN ALLEN, Assistant Secretary. M. C. ELLIOTT, Counsel. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

TABLE OF CONTENTS. Page. Work of the Board 251 Address by Hon. W. P. G. Harding 252 Movement of crops 258 Digest of warehouse laws 260 State bank membership 263 Gold settlement fund 264 Discount rates 266 Informal rulings of the Board 267 Intradistrict clearance system 270 Trustee powers granted 272 Law Department 273 General business conditions 278 Gold imports and exports 286 Distribution of rediscounts 288 Acceptances - 292 Federal reserve bank statements . - 294 ,49 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BULLETIN VOL. 1 SEPTEMBER 1, 1915 No. 5 WORK OF THE BOARD. Those present were Governor Hamlin, Comptroller of the Currency Williams, and Messrs. The work of the Federal Keserve Board Miller, Warburg, and Harding. during the month of August has been largely Several State banks have been admitted to concerned with problems incident to the prothe system after an examination of their contection of the crop situation as affected by dition by officers of the Federal reserve banks war conditions. The Board's general policy [n which district they were located, and further was outlined in its letter of August 3, 1915. inspection of reports of their condition by the Among the further steps taken in the devel- Federal Reserve Board. A large number of opment of its policy, particular interest will banks have been granted trust powers. attach to a draft of regulations in preparation New conditions which seem to be desirable providing for special rates on "commodity ]n connection with the admittance to the syspaper'7; that is, notes, drafts, or bills of extem of S tate banks have been worked out by change secured by terminal receipts, shipping the Board and been put in final form. documents, or warehouse receipts covering Regulations for retiring national bank cirapproved and readily marketable non-perishculation and the refunding of United States able staples, and properly insured. It is ex- 2 per cent bonds have been under considerapected that "commodity paper" of this type tion, both by the Treasury Department and will prove its efficacy particularly in meeting the Federal Reserve Board. These regulathe seasonal demands of the great croptions have not been completed, but substantial moving districts for credit facilities. progress has been made upon them. Consideration has also been given to the extent of the assistance that the Federal reserve banks could render one another by way State Banks and Trust Companies. of rediscounting in case any Federal reserve bank should not be able to meet all the require- Several additional State banks and trust ments made upon it by its member banks out companies have been admitted to the Federal reserve system during the month of August, its own resources. the number of such institutions which nave Because of the absence of some of the memjoined the system now being 24. The new in~ bers upon their summer vacations it was found stitutions admitted to membership during convenient to hold one meeting in New York August are as follows: City, a central point that could readily be Broadway Trust Co., New York, N. Y. reached by all. This meeting was held on Old Colony Trust Co., Boston, Mass. Fidelity Trust Co., Kansas City, Mo. August 10, and at its close the following state- Elmhurst State Bank, Elmhurst, 111. ment for the press was given out: Badger State Bank, Milwaukee, Wis. Fort Scott State Bank, Fort Scott, Kans. The Federal Reserve Board to-day held a German-American Bank, Minneapolis, Minn. session at the Federal Reserve Bank of New York. After the meeting was over it was stated in response to questions that the meet- New Orleans Branch. ing had been called for the purpose of clearing up matters of pending business which had Mr. Marcus B. Walker, of New Orleans, has been held open on account of the absence of been elected a class "B " director for the branch several members of the Board from Washing- of the Federal Reserve Bank of Atlanta to be ton. As New York was within easy reach of located in New Orleans, and has been named as those who were absent, a session in this city manager for that bank. The bank will open was determined upon. for business on September 10. 251 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

252 FEDERAL EESEEVE BULLETIN. SEPTEMBER 1, 1915. THE SOUTH'S COTTON PROBLEM. some months ago, their purpose of preventing shipments of cotton from reaching Germany and Austria, either ADDEESS BY HON. W. P. G. HARDING, MEMBEE directly or through neutral countries. The orders in council which became effective last February, have OF THE FEDEEAL EESEEVE BOARD, AT BIRaroused a great deal of protest in this country, the position MINGHAM, ALA., AUGUST 25, 1915. being taken that no belligerent had the right to interfere One of the results of the consideration of the with the shipment of noncontraband goods from a neutral country to another neutral country. While these orders cotton situation by the Federal Reserve Board in council have been the source of much irritation, it is and its members was an address made by Hon. claimed that they have not been effective in accomplish- W. P. G. Harding on August 25 at Birmingham, ing their object, and the marked increase in exports of Ala. cotton from this country to Holland and Sweden, as well as to Italy, up to the time that she also became involved During the course of his address Mr. Hardin the war, would indicate that Germany has been receiving read the following letter from the President ing practically her usual amounts of cotton through neutral of the United States: countries. It is now a matter of public knowledge that the The WHITE HOUSE, British Government and its allies have declared cotton an Washington, August 23,1915. absolute contraband, by which it is understood that it will My dear Mr. HARDING: be subject to seizure, even when consigned to neutral Thank you sincerely for your letter of August 23. It countries, unless the shipment is made in accordance with gives me just the information I desired. the terms and limitations of the proclamation declaring it What interests me more is this: It is evident from what contraband. As the annual takings of American cotton you tell me that the country banks with whom the farmer by Austria and Germany amount to about 3,000,000 bales, and other producers directly deal, can get money at from the attitude of Great Britain and her allies has created 4 to 4£ per cent, and that the question whether the bene- much uncertainty in the cotton trade, and great apprehenfit of this advantageous rate is to be extended to the farmer sion on the part of producers of cotton in the.South. is in their hands. It is inconceivable to me that those who are responsible for dealing directly with the producers of CERTAIN BASIC FACTS. the country should be willing to jeopard the prosperity of It is well, in discussing the present situation, to keep the country itself by refusing to share with the producer certain basic facts before us. The Census Bureau, in its the beneficial rates now obtainable for money loans. I Bulletin of August 14, states that the world's production think that we can confidently expect that the banks in of commercial cotton, exclusive of linters, grown in the the cotton States and in the agricultural regions generally calendar year 1913,. as compiled from published reports, will content themselves with a rate not more than 1 or 2 documents, and correspondence, was approximately per cent above the rate which they themselves pay. I 22,255,000 bales of 500 pounds net, and that the consumphope that the facts which you have stated to me will be- tion of cotton, exclusive of linters, in the United States come generally known among the producers of the country for the year ending August 31, 1914, was approximately so that they may feel themselves free to exact of the banks 21,223,000 bales of 500 pounds net. The Bulletin further with which they deal what they undoubtedly have a right calls attention to the fact that, except for the United to expect. States, cotton included in these figures refers almost ex- Cordially and sincerely yours, clusively to that used in spinning (and does not include WOODROW WILSON. large quantities which are consumed in the manufacture of felts, bats, etc.). It is, therefore, fair to infer that while Mr. Harding said: there apparently remained a year ago out of the cotton A discussion of the cotton problem by a member of a grown in 1913, the equivalent of about 1,000,000 bales, Government board, under conditions now existing, in- the world's requirements absorbed practically the entire volves some delicate considerations, and it must be dis- production of the year 1913. tinctly understood that what I shall have to say is an The American crop grown that year was about 14,600,000 expression merely of my personal views, as far as it seems bales, so that the amount grown in other countries proper for me to express them, and must not be regarded amounted to about 7,650,000 bales. The Financial as reflecting the opinions of or as being binding in any Chronicle estimates the total visible supply of cotton in manner upon, any person or official other than myself. the world on August 13, 1915, to be 4,255,773 bales, against Not since the days of the Civil War has cotton occupied 2,991,413 bales on the corresponding date in 1914—an so prominent a place in international affairs as at present. excess in sight this year over last of about 1,250,000 bales. By virtue of its use in the manufacture of propulsive Stocks in Great Britain are estimated at 500,000 bales explosives, its possession has become a necessity to the more than last year, while continental stocks are put nations at war. Great Britain and her allies, having down as being 90,000 bales less. Stocks at Hamburg, practical control of ocean transportation, announced, Bremen and Trieste are placed at 45,000, against 352,000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL EESERVE BULLETIN. 253 at those points last year. Stocks at Genoa, Havre, and The bulletin gives the following figures as representing Barcelona show an increase of about 390,000 bales. The cotton on hand in this country on July 31 : stock of American cotton in sight on August 13 is placed Bales. by the Financial Chronicle as 2,940,776 bales, against In consuming establishments 1, 401, 484 1,561,413 bales on the same date in 1914, the distribution In public storage and at compresses 1, 784, 812 being as follows: Total 3,186, 296 which compares with 905,762 and 425,102 bales, or a August 13. 1915 1914 total of 1,330,864 bales, for July 31, 1914. The consumption of linters during the 12 months ending July 31 shows Liverpool stock | 1,097,000 625,000 "M ancrh est' er st•o c'k 65,000 41,000 an increase over the preceding 12 months of nearly 100,000 C A o m n e t r in ic e a n n t a a l f l s o to at c k for Europe. i 4 1 6 9 3 6 , , 0 0 0 36 0 151 4 3 0 , , 0 3 0 4 0 6 bales, the exact figures being 403,389 bales in 1915 against United States port stocks... 697,379 228,316 308,675 bales in 1914. United States interior stocks 418,115 113,751 United States exports to-day I 4,246 The exports of domestic cotton and linters during the month of July, 1915, were nearly double those of July, Total American ..I 2,940,776 1,561,413 1914, the month immediately preceding the outbreak of i Estimated. the war, the figures being 243,522 bales for July, 1915, against 126,211 bales for 1914. Of the total exported, COTTON PRODUCTION IN 1915. 58,944 bales went to Great Britain, against 43,777 bales Assuming that 22,250,000 bales represent the world's in July, 1914; none to Germany, against 41,291 bales in normal consumptive power, and that the visible supply 1914; 27,209 bales to France, against 2,522 bales in 1914; is now 4,250,000 bales, it becomes necessary, in order to 52,969 bales to Italy, against 22,758 in 1914; 104,400 bales understand the situation, to make a rough estimate of the to other countries, against 15,863 in July, 1914. These cotton production for 1915. It is, of course, admitted figures would indicate either a remarkable increase in that any estimate made at this time is merely a guess, normal exports to all other countries last month or else from which the actual result may vary very widely, but that Germany is getting her supplies of cotton through it seems not unreasonable to assume figures based upon the those countries. Cotton spindles active during July, average estimates of those well informed in the cotton trade 1915, in this country are reported as 31,194,029, as against and upon the average production per acre for the past 10 30,676,835 in July, 1914. years. I think, therefore, that an estimate of 12,000,000 bales for the present American crop will not be regarded VALUE OP THE CROP. as too low. It is even more difficult to form an estimate of I have seen no estimate of the commercial value of the the amount of cotton grown in other countries, but. taking crop of 1914 from governmental agencies, but other acthe figures for 1913 (7,600,000 bales) as a basis, and making cepted authorities state that the value of the 1914 crop, allowance for the reduced acreage reported in Egypt and which, including linters, amounted to nearly 17,000,000 India, it would seem that 6,000,000 bales would be a fair bales, was less by $386,000,000 than the crop of 14,588,591 estimate for all other countries. This would give us a total bales produced in 1913. The Office of Markets and Rural crop available for the next 12 months, including what is Organization of the United States Department of Agriculnow in sight, of 22,250,000 bales. Conservative estimates ture has advised the Federal Reserve Board that reports last year were that the war would reduce the world's from 3,485 public and private warehouses in the cottonrequirements of cotton by about 3,000,000 bales, yet the growing States show a storage capacity of about 10,281,000 exports of American cotton for the season just ended were bales, and that similar reports from 823 cotton-mill wareabout 8,543,000 bales, as against 9,150,000 bales for the houses in the same States indicate a storage capacity of preceding season—a difference of a little more than 1,295,500 bales, so that, expressed in terms of flat or uncom- 600,000 bales. pressed cotton, the public, private, and cotton-mill ware- The declaration of contraband against cotton will per- houses in the cotton-growing States in 1914 had an aggrehaps be much more effective in keeping it out of Ger- gate storage capacity of 11,577,465 bales. The board is many than were the orders in council, but, even if it further advised that during the present year efforts have be true that the world's cotton requirements by reason been made to revise and complete the warehouse list, of the war will be curtailed 3,000,000 bales for the coming which, while still incomplete, includes at present 4,246 season this would just about represent the amount that warehouses in the cotton-growing States, which are divided would usually go to Germany. The Census Bulletin of into public warehouses and cotton yards numbering 3,188 August 14 shows that during the 12 months from August and private and miscellaneous warehouses numbering 1, 1914, to July 31, 1915, the consumption of cotton in the 1,058. There are 58 public cotton warehouses outside of United States amounted to 5,598,798 bales, against the cotton-growing States, making a total on the depart- 5,626,078 bales for the 12 months immediately preceding. ment's list at present of 4,304. Details are as follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

254 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 191©. Public and private warehouses and cotton-mill warehouses buildings are poorly constructed and so improperly located (estimated) in use in the cotton belt in 1914, together with that rates of insurance upon their contents are very high, the storage capacity and the number of bales produced in but practically all the cotton mill warehouses are of 1914, by States. standard construction with automatic sprinkler equipment, and carry very low rates of insurance. Public and pri- Cotton-mill vate warehouses. warehouses. Aggregate The legal department of the Federal Reserve Board has State. N b u e m r. - c S a i t n p o a r H a c g i a t e t y N b u e m r. - c S a i t n p o a r f c a l i a g t t e y c h s a w t o o p o f u a a r s a r c a e e g i l - t s l e y . 1 d i 9 n " u 1 n b 4 c i a r n t l u p e i g s o n r . o n - - p p S r l t e e a d p te g a s e r , e e d w o i f a t n h a c a e o b s t p s t t o e r c n a i c a w t l a o r r e f e f h e t o h r u e e n s e c la e r w e a s c s e o i t p f o t t h o w b e h t e a c t i o h n t s e to r t n h o - e p r r f o n ir d o s u t t c l t i i h e n e n g bales. bales. on the cotton in question or whether his lien may be displaced by attachment or otherwise on account of any Alabama.. 581 1,628,935 62 62,000 1,690,935 1,731,751 indebtedness due by the owner of the cotton for labor, Arkansas.. 233 714,780 6 6,000 720,780 999,237 Florida... 51 225,060 1 1,000 226,060 90,648 rent, or any other account. The counsel consulted, in the Georgia 1,089 1,351,810 151 412,500 1,767.310 2,723,094 preparation of the digest, legal representatives of the Fed- Louisiana. 200 809,600 6 0,000 815,000 452,261 Mississippi 167 892,540 18 18,000 910,540 1,217,883 eral reserve banks of St. Louis, Richmond, Dallas, Atlanta, North Care>lina 149 210,216 326 400,995 611,211 970,479 and Kansas City, and the consensus of their opinion seems Oklahoma 120 540,600 7,000 547,600 1,232,638 to be that the holder of a negotiable warehouse receipt is South Care>lina 337 1,156,760 164 300,000 1,456,760 1,560,195 protected from all claims of subsequent lien holders and T T e e n x n as essee. 49 3 7 1 1,9 5 4 8 6 2 , , 4 2 9 8 4 5 27 3 2 H 7, . 0 0 0 0 0 0 1,9 6 8 0 2 9 , , 4 2 9 8 4 5 4,3 3 9 7 0 2 , , 2 0 0 6 0 8 subsequent creditors of the original owner of the com- Virginia... 30 219,890 19 19,000 238,890 25,277 modity covered by the receipt. The rights of the pledgee Ail others, 140,109 of a warehouse receipt are apparently superior to the unse- Total.. 3,485 10,281,970 823 1,295,495 11,577,465 15,905,840 cured prior claims of the creditors of the pledger. The pledgee's rights, however, would seem to be inferior to all Public, private, and miscellaneous warehouses and cotton valid claims upon the commodity obtained prior to its yards in the cotton belt, listed as of Aug. 1, 1915. deposit in the warehouse. Want of title in the pledgor will defeat the lien of the pledgee, as would the nonexistence Public Private State. w an a d re h c o o u tt s o e n s c a e n ll d a n m eo is u - s Total. o th f e t h w e a r c e o h t o to u n s e i m n a t n h e i s w l a ia re b h le o . use, for which latter, however, yards. warehouses. In nearly all the Southern States the landlord is given Alabama 459 108 567 a lien for rent and advances, which lien is superior to Arkansas 121 52 173 the rights of the transferee of a negotiable warehouse Florida 29 22 51 Georgia . 826 466 1,292 receipt, and in many States the warehouseman is also Louisiana ... 66 59 125 Mississippi 172 35 207 given a prior lien for charges. Some States require knowl- North Carolina 123 90 213 edge on the part of the transferee that the crop was grown Oklahoma 174 44 218 South Carolina. ... 196 54 250 on leased premises as a condition precedent to the recovery Tennessee 38 13 51 Texas . 960 101 1,061 of the landlord, while other States disregard this knowl- Virginia 24 14 .38 edge. The holder of a negotiable warehouse receipt ap- Total 3,188 1,058 4,246 pears, as a rule, to acquire such title as the person negotiating the receipt to him had, or had the ability to convey, Recent inquiries sent out with the view of completing to a purchaser in good faith and for value. In other words, the warehouse list, have resulted in the addition of a the transferee of a negotiable warehouse receipt has exlarge number of warehouses in the cotton-growing States. actly the same rights as the purchaser where the cotton It appears that building activity in the last three months is sold and actually delivered, and is deemed in mosi has been great, especially in Texas, and it is thought not instances to be in actual possession of the cotton. at all unlikely that, before the present crop comes on the In view of difficulties that may arise in satisfying distant market there will be 5,000 warehouses of all classes in lenders as to the validity under all conditions of warehouse the South. Should this prove true, there will be storage receipts for cotton offered them as collateral, it would capacity in the Southern warehouses for not less than eeem that, for the present at least, loans on cotton must be 12,500,000 bales of flat cotton, while the cotton mill ware- first negotiated through local banks in the South. These houses will be able to take care of about 1,300,000 bales. banks have now ample facilities which they have never It is stated that there is the greatest diversity in the before enjoyed for rediscounting the notes taken against character of these warehouses as to the materials used, such loans, and it is for them more than for any othei cotton handling facilities, location, fire hazards, and other agency to determine the policy of the South in regard to points. Many of the storage companies are not properly the marketing of the present cotton crop. organized and frequently their receipts are not considered I would not assume to give any advice, without full of much value as collateral. In many instances the knowledge in each specific case, either to the producer of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 255 cotton as to the advisability of his withholding it from the house receipts, unless, perhaps, at a very high rate of market, or to the merchant or to the banker as to the wis- interest. dom of assisting in such an operation. These are matters The bankers and merchants of the South have at this for individual judgment, but I wish to call attention to time a great opportunity, as well as a great responsibility. the fact that cotton is a commodity which has always They are in close and intimate contact with the producers shown itself susceptible to marked and sudden fluctuations throughout the cotton belt and are in the best position in value. As a case in point, I may cite the 12 calendar to advise and assist them in taking the steps necessary years, 1904-1914, both inclusive. In one of these years, to protect their interests, which are also the interests of 1904, the difference between the high and low point in the whole South. For the second time within recent years the price of cotton was 10.41 cents per pound, or more than we have seen a large crop sell for far less money in the $50 per bale (according to official quotations on the New aggregate than a moderate crop brought the preceding York Cotton Exchange). The least range of values oc- year. You have an opportunity of conserving the values curred in the year 1906 in extreme fluctuations of 2.65 of the South's greatest single asset—its cotton crop—and cents per pound, or about $13 a bale, and the average an- upon you, bankers and merchants of the South, rests the nual fluctuation during the entire period of 12 years has responsibility of the weal or woe of a great agricultural been 5.38 cents per pound, or about $27 per bale. While section during the next 12 months and perhaps for years. cotton at some time during some of these years has sold Leading financiers of the country, in commenting upon in the South around 6 cents per pound, the average price present conditions, which are due in part to the European during any year would have been satisfactory to the cotton war, freely express the fear that the sudden prosperity producer. As a rule, the active marketing of cotton takes that has developed in some sections and along certain place during three or four months of the year, although lines of industry, will be followed by a period of wild the process of consumption is one that goes on during the speculation and inflation. The banking reserves of this entire 12 months. country are now very large, being considerably more than The merchants and bankers of the South are well accus- $1,000,000,000 in excess of legal requirements. The gold tomed to making advances against crops still to be planted holdings of the United States, over $2,000,000,000, are or in cultivation, but they have usually been insistent larger than those of any other two countries combined. that as soon as the crop has ceased to be a potentiality and Our trade balances are piling up at an unprecedented rate has become a reality, that it be brought to market and sold and will probably amount to a billion dollars during the as rapidly as possible. Other obligations of the farmers, last six months of 1915. Rates for the best commercial such as for fertilizer, have, in many cases, been made paper are very low, 4 per cent or less, and the southern payable early in the fall, so, with all factors tending toward banks, should they be able to collect within the next 60 congestion, the basic situation of the cotton market must days the amounts which they have out directly or indibe exceedingly strong to prevent a drop in price during the rectly on cotton, will be at an absolute loss to find a safe time when the cotton of the most needy producers is being and profitable investment for their funds. What better marketed. This year certainly no financial obstacles are security therefore, could a southern bank ask than the in the way of more orderly methods in marketing the crop. obligation of a merchant or farmer which he has been I would not undertake, of course, to advise any individual carrying on a crop not yet existent—what better or more as to the course that he should pursue in marketing his liquid investment, I say, could a southern banker find crop, but, viewing the situation as a whole, I am con- than to carry this same obligation along for a few months vinced that the results of a gradual marketing of the crop if necessary, secured by the actual cotton, properly warethis season will be far more satisfactory than would be the housed and insured, and certain of a market? case were the crop forced upon the market within a short period. ACTION FOR ORDERLY MARKETING. AMPLE WAREHOUSE FACILITIES. Such general action on the part of southern banks The South has now ample warehouse facilities for would greatly facilitate the orderly and natural marketing properly caring for that portion of the crop on which loans of the crop and would, in a great degree, relieve what is are apt to be negotiated, and the banks can provide ample called "distress cotton," by which term forced sales of funds either out of their own resources or by use of their cotton, regardless of market conditions, have come to be credit in rediscounting paper secured by cotton to enable known. While the rule is not invariable, it very often them to aid materially in conserving the values of this happens nevertheless that after the producers and the great crop. It has often happened heretofore that the country merchants who have had most to do with growing farmer has been forced to sell his cotton to meet the de- the crop, have sold their cotton, that the price advances mands of his creditors, or, in cases where he had no press- so that by planting time the stern resolve made by the ing demands and found the price unsatisfactory, that he farmer a few weeks previous to reduce his cotton acreage found himself unable to negotiate loans upon his ware- 50 per cent is modified under the influence of the higher 5554—15 2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

256 FEDERAL KESERVE BULLETIN. SEPTEMBER 1, 1915. prices that he hears about, with the result that the reduc- planting time comes and a sharp reduction in acreage next tion is very small. During the acute depression in cotton spring would most probably result in a demand for cotton last fall, perhaps all the farmers were determined to plant and a corresponding advance in price, for the cotton spinbut little cotton this year and in one State the legislature ner makes it his business to anticipate the future and to placed drastic restrictions upon the amount of land that study carefully all the conditions relating to the produccould be planted in cotton, which restrictions, however, tion and marketing of cotton. As soon as the spinners were afterward removed at a later session. With the see that there is likely to be a small crop produced by improvement that came in January, February, and March, reason of greatly curtailed acreage, they will realize that the feelings of the farmers underwent a change. Sales any surplus carried over will be necessary to prevent a of cotton were made at 9 cents and even higher, and, cotton famine in the fall. forgetting their recent plight, the farmers of the South, Let it be remembered that the dread of the cotton spindespite their bitter experience and regardless of all the ners throughout the world—in the South, in New England, advice and warnings of the Department of Agriculture, in Canada, in England, in Germany, in Italy, and in the banks, and the merchants, reduced their cotton acreage Russia—is a shortage in the supply of cotton, and that, only about 15 per cent. Our experience last winter while they naturally desire to purchase their stocks of should convince everyone that the economic law of supply cotton at low prices, there comes a time, after their wants and demand is inexorable and unalterable. The situation for some months ahead have been supplied, that they at that time was indeed a most serious one and many become interested in sustaining or even in enhancing the desperate remedies were proposed wjiich seemed to be values of a commodity in which they have an owner's justified by conditions then existing. Valorization interest. They look ahead also and have learned by exschemes were proposed and much pressure was exerted perience that extreme low prices throughout a season will upon Congress to authorize the purchase by the Govern- bring about a curtailment of the next crop, with advances ment of a large amount of cotton at 10 cents per pound. in price often out of proportion to the reduction of supplies. When this proposition, however, was referred back to some of the States for separate adoption on their part, it OBJECT OF BRITISH GOVERNMENT. developed that there was but little public sentiment We should also consider the object of the British Govbehind it. The situation last year, as was to be expected, ernment in issuing its orders in council and in its recent finally worked itself out along natural and economic lines. declaration placing cotton on the contraband list. Why Only 47 per cent of the crop came in sight by December is that Government, engaged in the most gigantic war of 31, against 70 per cent in ordinary years, and of the amount all history, with perhaps its very existence at stake, so in sight perhaps 50 per cent was held unsold for account anxious to prevent cotton from reaching the territory of of the producers or the country merchants. A demand its enemies? Some have said that it is for commercial gradually developed for cotton and the price advanced. reasons, that the Government is actuated by a desire to depress the value of cotton in order that British spinners SITUATION GREATLY CHANGED. may obtain their stocks at a low cost. This theory does The situation this fall is totally different from that which not stand in the cold light of reason. confronted us a year ago. The present crop can be han- Modern science within recent years has caused cotton to dled successfully only along economic lines, and if we are become the basis of the explosives which are absolutely really suffering from an overproduction of cotton, the true necessary in modern warfare. Cotton is used in the manuremedy to be applied is curtailment of production. Ex- facture of smokeless powder and in the production of the perience has shown that the farmer is not impressed in the high explosives used by heavy field artillery and by the spring of the year by figures showing a large amount of great guns on the mammoth battleships of the navies of the cotton in sight unless he himself owns some of this cotton. present day. The statement has been made that every If the banks and merchants will carry cotton for farmers time a battleship of the class of the Queen Elizabeth fires this fall, the advances that they will make should prevent her guns 12 bales of cotton are consumed. It is ima repetition of the chaotic credit conditions and general possible to form an estimate of the amount of cotton that trade depression which resulted last year, and if satisfac- is used in the manufacture of explosives. Belligerent tory arrangements for marketing the crop can be made nations guard this secret closely, but our own Government, before spring that will b 3 good evidence that there has bacn through the Census Bureau, is making careful investigano overproduction. If, on the contrary, a considerable tions and I understand that as soon as possible an estimate portion of the crop has to be carried until planting time will be made public, giving the amount of cotton consumed for the farmers and the country merchants, a corresponding for war purposes, including not only that used in making reduction in acreage will almost certainly result. propulsive explosives, but the amount required for other The farmers will not be disposed to plant heavily if they purposes of war, such as wearing apparel for troops, for have a considerable amount of cotton on hand when the tents, and for hospital and Red Cross uses. Many unofficial Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1,1915. FEDEKAL BESERVE BULLETIN. 257 estimates have been made of the amount of cotton used for have their purchases of cotton stored in this country for these purposes, but they are practically of no value, as the their account until they can transport it to their own estimates for explosives alone vary from 600,000 to shores? 3,000,000 bales a year. The figures that have been avail- COLD, HARD PACTS. able so far relate to the ordinary commercial consumption of cotton and are somewhat misleading. I have not viewed this cotton situation in an optimistic The amount of raw cotton in sight, when considered as a light. I have tried to keep before me the cold, hard facts, factor in the determination of prices, must be supple- but the more I study the subject and the more information mented by a knowledge of the stocks of manufactured that I receive bearing upon it the more I am convinced goods on hand and by some idea of the amount of clothing, that the present situation, while calling for intelligent made entirely or partly of cotton, on the backs and in the leadership and close cooperation, is by no means a desperwardrobes of the ultimate consumers. My information is ate one. On the contrary, the immediate future has many that at the present time manufactured stocks in the hands elements to inspire hope and confidence. The making of a of merchants are small, and, in view of the severe econo- market is by no means a one-sided proposition. The buymies that have been practiced throughout the world ers of cotton have a natural advantage in their greater during the past 14 months, it is reasonable to assume that powers of analysis, in their concentrated financial resources, supplies of clothing in the hands of the wearers are not in their ability to take their own time, but now, as always, large. the movements of southern producers are closely watched and evidences of staying power on their part are effective The very uses to which cotton is now being put, which in market quotations. have resulted in its being declared contraband, indicate a consumption of cotton which is of great importance in estimating the world's requirements. While the cotton COTTON SOUTH'S GREATEST ASSET. used for clothing and other commercial purposes is not Men of the South, your cotton crop is your greatest asset. finally consumed until the goods wear out, involving a The welfare of the South depends upon this crop being period sometimes of two or three years, the cottcn that is marketed at fairly remunerative prices. The prosperity used in explosives goes up in smoke forever the very or the reverse of the southern farmer means strength or instant a gun is fired. There is reason to believe that weakness to the merchants and the bankers of the South both the Germans and the allies are watching keenly the and vitally affects trade and industry throughout this present cotton situation—that Germany is as anxious to entire country. It is within your power, regardless of any have cotton as the allies are to prevent her frcm obtaining untoward conditions that may exist, to protect your greatest it—and it is not inconceivable that there maybe evidences asset, if you will only make intelligent and courageous before very long of internaticnal competition for the use of your opportunity. Let Southern bankers wherever possession of the South's great staple. possible make liberal concessions in their usual rates on commodity loans. High-interest rates means forced sales. MAY MAKE FOREIGN PURCHASE. Present conditions fully justify low rates and Southern bank- It is at least a possibility that cotton will be purchased ers should be willing to forego temporary profits for the sake in large quantities for foreign account and stored in the of security and solidity in the future. I am sure that the warehouses of the South, to be shipped out as needed and Federal reserve banks may be depended upon under their as opportunities for shipments arise. No one has ever power of rediscount to cooperate to the fullest extent with accused the Germans of being lacking in far-sightedness. the banks in taking care of the cotton crop, and this assur- Their ability to look into the future and to provide for ance is, of course, not confined tc cotton loans, but extends every contingency is marvelous. They are already looking to other staple commodities. forward to what will happen when peace is restored and As a final wcrd, I wish to remind you that the cotton that they will make a supreme effort to recover their lost season is upon us. Already the fields are white down trade with other nations can not be doubted. where the gulf breezes blow, and soon the uplands, too v Is it reasonable to believe that they would look with will glisten in the autumn sunshine. Let me impress complacency upon the absolute control of the cotton mar- upon you that this is a time not for complaints or deket by the mills of England and America, permitting them nunciation, but for wise leadership, cool judgment, firm to secure their supplies of cotton at very low prices, and resolve, and effective action. Bankers, merchants, and defer their own purchases until after peace is made and farmers of the South stand together and act together for take the chances of securing then their own stocks at much your common good ! Do not sit supinely on the ginhouse higher prices? Is it not reasonable to believe that they floor to be smothered beneath a mass of cotton, but keep will arrange to buy cotton as the spinners of other nations on top the heap, and feed it out at living prices to thebuy it, and can they not easily make arrangements to spindles and factories of a waiting world. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

258 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. MOVEMENT OF CROPS. financing the movement of such crops to the market. In so doing the object in view should Attention has been given by the Federal be to assist effectively, as above pointed out, Reserve Board to the crop-moving problem, in the normal movement of such products in and on August 3 the following letter was sent orderly transfer to the consumer. The carrying of products in behalf of speculators is to the chairman of the board of directors of not permitted under the law, and member each Federal reserve bank: banks can not certify the notes of speculators SIR: There has been frequently in past sea- as eligible since the act does not allow the resons a congestion of farm products, accom- discounting of notes, drafts, or bills of ex- Eanied usually by high money rates, or at times change covering "merely investments." y actual difficulty in obtaining the necessary Special attention is herewith directed to the funds and credits for moving these crops. marketing of the cotton crop. While the yield These conditions have been met for several of corn, wheat, and other cereals promises to years past by deposits made with banks by the be large, there is every reason to expect that Secretary of the Treasury for crop-moving pur- these products will find a market in an orderly poses, and last year by the further expedient of way. Cotton, however, is peculiarly sensitive the issue of emergency currency authorized to abnormal conditions such as now exist in under the act of May 30, 1908, as amended, our export trade, and it is clearly in the comnow expired by limitation. The Federal re- mon interest that credits based upon this crop serve act makes provision for meeting the de- be protected as far as possible from the danger mand for crop-moving funds, and is intended to of demoralization such as existed during the guard against a recurrence of past stringencies. autumn of 1914. No staple commodity is sub- In order to forestall any possibility of conges- ject to greater variations in price than is cottion of crops this fall, or lack of accommodation ton, which during the past 12 years has shown, to move them, the board calls the attention of according to figures based upon official quoall Federal reserve banks to the provision in the tations on the New York Cotton Exchange, an Federal reserve act which have a special bear- average annual fluctuation of 5.38 cents per ing on this subject. pound, the maximum price range during any Section 13 of the act gives specific permission year of this period being 10.40 cents per pound for the rediscounting for member banks of in 1904 and the minimum range 2.65 cents notes, drafts, and bills of exchange secured by per pound in 1906. It should be noted, howstaple agricultural products. The manifest in- ever, that with two exceptions, there has been tent of this provision is to enable producers to no very great difference in the average price market their crops in a normal and effective of cotton for each of these 12 years, the exmanner. In view of the large surplus reserves ceptions being the year 1905, when the avernow held by the Federal reserve banks by mem- age price during the year in New York was ber banks and by other banks throughout the 9.80 cents per pound, the lowest of the 12country, there should be no difficulty in afford- year period, and the other being the year ing the producers the assistance necessary to 1910, when the average price per pound was enable them to market their products in vol- 16.45 cents; but the average price for the ume corresponding to the power of the trade entire 12-year period was 12 cents per pound. to absorb them. In order to accomplish this Sudden and violent fluctuations are clearly to end, it is suggested that Federal reserve banks the advantage of neither the loaning banks, adopt a definite policy with reference to redis- the producer, the manufacturer, nor the concounting paper secured by documents in satis- sumer. They offer, on the contrary, an invitfactory form evidencing the ownership of ing field for the speculator; and should the stored agricultural products. Through such a Federal reserve system, in making possible the policy, together with proper methods of ware- more normal movement of the crop, be a conhousing, Federal reserve oanks can be a potent tributing factor in reducing these fluctuations, factor in assisting the normal movement of it would have accomplished a great public staple agricultural products from the field to good. the factory or to the consumer. It is recom- It is, therefore, recommended that, in purmended that regulations governing the redis- suance of the policy already indicated, the Fedcount of notes covering advances on such prod- eral reserve banks communicate with their ucts be issued by such of these Federal reserve members, and with others who may be interbanks whose members are actively engaged in ested, for the purpose of directing attention Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 259 to the steps which must be taken to secure the Similar steps may properly be taken by necessary cooperation. It is suggested that Federal reserve banks whose members are the Federal reserve banks point out to their likely to be called upon to finance other agrimembers, and to the public generally, that those cultural products, wherever there is available who are engaged in cotton production, if they a system of warehouses, elevators, or other intend to take advantage of the facilities approved means of storing and certifying offered by the banks for carrying cotton, to given quantities of staple agricultural prodshould begin at once to arrange for its proper ucts. storage and insurance as rapidly as ginned. The Board calls particular attention to regu- Federal reserve banks should particularly point lation P, recently issued, with reference to out to their members that they are prepared the subject of "Trade acceptances." Such to rediscount the notes of farmers and mer- trade acceptances, when growing out of transchants secured by proper warehouse receipts actions involving the movement of staple agrifor cotton and accompanied by evidence of cultural products and being indorsed by a insurance. Member banks offering these notes member bank, are eligible for rediscount with should be prepared to state the grade and mar- a Federal reserve bank in the manner indiket value of the cotton securing paper, and the cated in said regulation, and their use should notes should be of the usual collateral form, aid materially in the marketing of the crops of providing the right to call for additional the country during the coming autumn. security in event of material decline in the The Board will be prepared from time to market value. The amount to be advanced time to pass upon sucn special phases of the per bale would be left primarily to the judg- crop moving problem as member banks may ment of the member bank. present to it through the Federal reserve It is further suggested that Federal reserve agents, who are brought into contact with banks in the cotton States should call attention the special conditions prevailing in the various of their members to the desirability of reserv- sections of the country, and it will adapt existing storage space in localities where warehouse ing regulations to such conditions as may have facilities are inadequate for such cotton as will to be met in facilitating the normal and ecobe used as security for loans. While there is nomic movement of the staple agricultural not sufficient warehouse capacity in the South products of the country. to provide storage at any one time for the entire Respectfully, cotton crop, it is believed that there are ample CHARLES S. HAMLIN, facilities for the proper storage of all cotton Governor. that is likely to be pledged as security for loans. In a normal movement of the cotton crop warehousemen at concentrating points estimate that the maximum storage required Deposits in Federal Reserve Banks. will not exceed 20 per cent of the total receipts for the season. It should be made plain also This statement was issued by the Secretary that compliance with the essential features of of the Treasury on August 20, relative to tile the plan herein outlined, modified as circumdeposit of Government funds in Federal stances may demand, will be necessary for the reserve banks: normal marketing of this year's crop and for the proper protection of those who are in- Secretary McAdoo to-day made clear his terested in its movement, whether banks, policy with regard to the deposit of Governproducers, or manufacturers. ment funds in Federal reserve banks, as While there seems no reason to believe that authorized by the Federal reserve act. The the world's present and potential supply of Secretary said that he would deposit funds in cotton is out of proportion to requirements Federal reserve banks whenever the necessity during the next 12 months, it is nevertheless arises and it can be done with benefit to the important, because of our lack of adequate public interest. He pointed out that public shipping facilities as well as restrictions brought moneys had not yet been deposited merely about by the war upon free exports to all because the banks do not need them now and countries, that ample means be provided for have not yet found full use for their present the proper handling and effective marketing of resources, which appear to be more than cotton. adequate for the demand at this time. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

260 FEDEKAL KESERVE BULLETIN". SEPTEMBER 1,1915. Funds for Cotton Crop. charge member banks on notes or loans secured by insured and warehouse cotton rediscounted Secretary McAdoo, on August 23, issued the with Federal reserve banks. He has been unfollowing statement relative to deposits of funds able to consult his colleagues of the Federal to care for the cotton crop: Reserve Board on account of his absence from Washington but feels confident of their coopera- Secretary McAdoo announced from North tion in every reasonable way. Haven, Me., to-day that, in view of the action Secretary McAdoo said that if it should apof the Allies in putting cotton on the contrapear, however, that the object in view can be band list, he will, if it becomes necessary, deaccomplished with greater efficiency to the cotposit $30,000,000 or more in gold in the Federal ton producers, the merchants and the banks of reserve banks at Atlanta, Dallas, and Richmond the South by depositing Government funds in for the purpose of enabling these Federal reserve the national banks direct instead of in the banks to rediscount loans made on cotton se- Federal reserve banks he would take that cured by warehouse receipts by national banks course and make deposits in such national and those State banks that are members of the banks as would give him the assurance that the Federal reserve system. money so deposited or the credit based thereon The Secretary said that in the exercise of the would be loaned on cotton insured or warediscretion given to him by law the Government housed and at a rate of interest not to exceed will for the time being charge no interest on 6 per cent. these deposits in Federal reserve banks; that The Secretary said he believed that there such action is justified by the unusual situation was no occasion for alarm about the future of respecting cotton caused by the European war; cotton and that if the bankers and merchants that he considers it his duty to use every availwould cooperate with each other and with the able means in his power to help the cotton procotton producers of the South in a spirit of ducer of the South in the circumstances; that patriotism and mutual regard for each other's it is a matter of economic importance to the welfare the situation could be handled with entire Nation that those who have produced the happy results to all concerned. He expressed cotton crop shall have a fair opportunity to the earnest hope that this would be done. dispose of it gradually and in an orderly manner so they may not be forced, through inability to market their cotton gradually, to sell it at Digest of Warehouse Laws. sacrifice prices. There has been prepared by the Federal Secretary McAdoo said that one of his chief Reserve Board a digest of the laws affecting objects was to create a basis for such enlarged credit in the South that the banks will have warehouse receipts in the Southern States. ample resources to extend to producers such This is particularly interesting in connection accommodations that they will be able to carry with the handling of the cotton crop and is cotton in warehouses for a reasonable length of given below. time until it can be marketed advantageously. IR order to accomplish this, he said that the Alabama.—Warehouse receipts not stamped national and State banks which are members of "not negotiable" may be transferred by the Federal reserve system should make loans indorsement and any person to whom they on warehouse receipts for insured cotton at low are transferred must be deemed and taken to rates of interest; that the banks can well af- be the owner of the things or property therein ford to carry cotton for producers at 6 per cent mentioned as far as to give validit}r to any especially if they are able to rediscount cotton pledge, lien, or transfer, made or created by paper at the Federal reserve banks at a much any person, with exception of following: lower rate than 6 per cent; that the credit (1) Lien of landlord for rent or advances. resources of the banks of the country are (2) Lien created by contract, of which notice greater than ever before in our history and that is given by registration as prescribed by law. there is no reason why the banks should not, in Arizona.—Warehouse receipts are made cooperation with the merchants of the South, negotiable by law and the holder is deemed the help the cotton producers with loans at low owner and in actual possession of property rates in the present peculiar situation. covered by receipt. Hence, he is protected The Secretary said that the Federal Reserve against subsequent liens. Board had a right to determine the rate of Arkansas.—The holder of a negotiable receipt interest which the Federal reserve banks can acquires such title to the goods as the person Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1,1915. FEDERAL RESERVE BULLETIN. 261 negotiating the receipt to him had, or had the Louisiana.—Public warehouse receipts are ability to convey, to a purchaser in good faith negotiable and transferable by indorsement in and for value, and, also such title to the goods blank or by special indorsement and delivery as the depositor or person to whose order the in the same manner and to same extent as bills goods were to be delivered by the terms of the of exchange and promissory notes without receipt had, or had the ability to convey to a other formality, and transferee or holder has purchaser in good faith for value and the direct such right and title therein and to property obligation of the warehouseman to hold pos- represented thereby as transferrer or depositor session of the goods for him according to the of the goods had, subject to lien of warehouseterms of the receipt. Title subject to lien of man for storage or other warehouse charges. landlord or laborer with or without notice on Holder of negotiable receipt would therefore part of purchaser that crop was grown on hold product as against any subsequent lien leased premises. Transferee of receipt gets holder. Unlawful to levy on warehouse goods no greater right than purchaser of cotton after negotiable receipt issued against same. where it is actually delivered. Mississippi.—Warehouse receipt shall be Florida.—Warehouse receipt negotiable by conclusive evidence in the hands of a bona fide indorsement, which shall transfer to indorsee holder for value, whether by assignment, pledge, title, right of possession, and remedies of each or otherwise, as against the person or corporaindorser. Such receipt may be deposited as tion issuing the same that the property has been collateral security. Does not make bailee so received, and shall entitle such bona fide warrantor of title. holder for value of such receipt to a delivery of Georgia.—Title to cotton in bonded public the property so stored or deposited or to the warehouses passes to purchaser or pledgee of value thereof. Landlord's lien is good against warehouse receipt by delivery of receipt purchaser of crop grown on leased premises properly indorsed. with or without notice on part of purchaser NOTE.—Bill pending before present legisla- that crop was so grown. ture with a reasonable prospect of early pas- North Carolina.—All warehouse receipts are sage. valid and binding in the hands of all bona fide Illinois and Missouri.—The holder of a negoti- holders for value without registration, and able receipt acquires such title to the goods as when receipt is negotiable—i. e., has not word the person negotiating the receipt to him had, "nonnegotiable" on face—title to commodity or had the ability to convey, to a purchaser in shall pass to a purchaser or pledgee by indorsegood faith and for value, and also such title to ment and delivery to him of receipt. Pledgee the goods as the depositor or person to whose of warehouse receipt obtains a first lien on order the goods were to be delivered by the commodity, subject to be displaced by followterms of the receipt had, or had the ability to ing causes: convey to a purchaser in good faith for value (1) Depositor did not have good title. and the direct obligation oi the warehouseman (2) Valid lien on goods existing at time of to hold possession of the goods for him accord- deposit. ing to the terms of the receipt. Transferee of (3) General creditor of original depositor receipt has no greater rights than purchaser who has acquired statutory or contract lien where cotton actually delivered. Landlord's against such depositor prior to date of deposit. lien is good against transferee if he had knowl- (4) Nonexistence of commodity in wareedge that crop was grown on leased premises or house, for which, however, warehouseman is if he had information which, if followed, would liable. have furnished him such knowledge. Oklahoma.—Public warehouse receipts are Indiana and Kentucky.—Warehouse receipts negotiable and transferable by indorsement in are negotiable and transferable by indorsement, blank, or by special indorsement and delivery, in blank or by special indorsement, and with in the same manner and to the same extent as like liability as bills of exchange now are and bills of exchange and promissory notes, without with like remedy thereon. Transferee of re- other formality; and the transferee or holder ceipt has no greater rights than purchaser of of receipt shall be considered and held as the cotton where actual delivery is made. Land- actual and exclusive owner to all intents and lord's lien is good against transferee if he had purposes, subject only to the charges of wareknowledge that crop was grown on leased houseman for storage, etc. Transferee holds premises or if he had information which, if fol- product as against subsequent lien holder, and lowed, would have furnished him such knowl- products covered by receipt are not subject to edge. attachment, garnishment, or execution. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

262 FEDERAL EESEKVE BULLETIN. SEPTEMBER 1, 1915. South Carolina.—Negotiable warehouse re- Virginia.—The holder of a negotiable receipt ceipts—i. e., those not having word "non- acquires such title to the goods as the person negotiable" on face—may be transferred by negotiating the receipt to him had, or had the indorsement and delivery to person or pledgee ability to convey, to a purchaser in good faith who shall be. deemed owner of commodities so and for value, and also such title to the goods far as to give validity to any pledge, lien, or as the depositor or person to whose order the transfer made or created by such person or goods were to be delivered by the terms of the persons. Pledgee of warehouse receipt obtains receipt had, or had the ability to convey to a a first lien on the commodity which can not be purchaser in good faith for value and the displaced except by following: direct obligation of the warehouseman to hold (1) Want of title in depositor at time of possession of the goods for him according to the deposit. terms of the receipt. Where goods delivered (2) Valid lien upon commodity obtained to warehouseman and negotiable receipt issued prior to deposit. they can not thereafter while in possession of (3) Nonexistence of commodity in ware- warehouseman be attached by garnishment house for which, however, warehouseman is or otherwise or be levied upon under an exeliable. cution, unless the receipt be first surrendered Tennessee.—Warehouse receipts are negoti- to the warehouseman or its negotiation enable by written indorsements tnereon and de- joined. Pledgee of negotiable warehouse relivery in the same manner and to the same ceipt obtains a first lien on the commodity extent as bills of exchange and promissory which can not be displaced except by following: notes and no clause condition or limitation, (1) Want of title or authority to bind owner whether written or printed in said receipt shall in person delivering goods to warehouse. be held to limit negotiability or affect the right (2) Valid lien on commodity obtained prior of holder. The holder of a negotiable receipt to deposit. acquires such title to the goods as the person (3) Nonexistence of commodity in warehouse negotiating the receipt to him had, or had the for which, however, warehouseman is liable. ability to convey, to a purchaser in good faith (4) Amount of advances made and liability and for value, and, also such title to the goods incurred for which warehouseman claims a as the depositor or person to whose order the lien which, in case of negotiable receipt, must goods were to be delivered by the terms of the be enumerated on face of receipt. receipt had, or had the ability to convey to a (5) Charges of warehouseman for storage purchaser in good faith for value and the occurring subsequent to date of receipt. direct obligation of the warehouseman to hold possession of the goods for him according to the Conditions for State Banks and Trust Companies. terms of the receipt. Title subject to lien of landlord or laborer with or without notice on After careful consideration, the Federal part of purchaser that crop was grown on Reserve Board has adopted thefollowing conleased premises. Transferee of receipt gets no ditions to be made a part of certificates of greater right than purchaser of cotton where of approval of applications of State banks it is actually delivered. and trust companies. They cover matters Texas.—If negotiable warehouse receipt is about which inquiry has been made by Fedasked, party placing products in warehouse shall advise warehouseman of any liens on eral reserve banks. The conditions are simply products and if so warehouseman must state precautionary and are not to be construed as nature and amount of lien in blank space on indicating opposition on the part of the Federal receipt. Holder of warehouse receipt is deemed Reserve Board to branches of these institutions. the owner of the product and in possession of the property and therefore subsequent liens (1) The following condition will be inserted placed on the product do not affect the rights in all certificates of approval: of the holder of a negotiable receipt and product "That, except with the approval of the would not be subject to attachment. Trans- Federal Reserve Board, there shall be no feree's rights subject to landlord's lien, and change in the general character of the assets warehouseman's lien for charges and insurance. of, or broadening in the functions now exer- Holder protected unless party taking out re- cised by the such as will tend to affect ceipt committed fraud in concealing liens on materially the standard now maintained .and products at time placed in warehouse. required as a condition of membership." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 263 (2) The following condition will be inserted "national reserve association of the United in all cases where the applying bank or trust States" or branch thereof, or any plan now or company is authorized oy its charier or laws hereafter created or established by act of Conof the State in which it is located to accept gress, whether such banking or currency assodomestic drafts: ciation or plan be created by Congress under "That the shall in no case accept a the above or any other name. Nothing in this domestic draft or bill of exchange unless it is act shall prohibit any such bank from joining based on a transaction covering the ship- or associating itself with any such association ment of goods, such transaction to be evi- or plan or branch thereof nor from investing denced at the time of acceptance by accom- any part of its capital or surplus in the stock panying shipping documents, or unless it is of such association, plan, or branch thereof in secured by a warehouse receipt covering read- accordance with the terms and provisions of ily marketable staples and issued by a ware- such act of Congress: Provided, however, That house independent of the borrower or by the such investment shall in no case exceed the pledge of goods actually sold: And provided minimum amount required to join or associate further, That such bank shall not accept itself with such association, plan, or branch drafts or bills of exchange of any kind, domestic thereof. Any bank joining or associating itself or foreign, to an amount which exceeds at with such association, plan, or branch thereof any time in the aggregate more than one-half shall have and exercise all powers not in conof its paid-up and unimpaired capital stock flict with the laws of this State, which are conand surplus, except that the Federal Reserve ferred upon any member bank in any such Board may authorize such bank to accept "national reserve association of the United such drafts and bills to an amount not to States" or branch thereof. Such member exceed its capital stock and surplus." bank and its directors, officers, and stockholders (3)' The following condition will be inserted shall continue to be subject, however, to all in all cases where the applying bank or trust liabilities and duties imposed upon them by compan}^ is authorized by its charter or the any law of this State and to all the provisions laws of the State in which it is located to of the "bank act." establish branches: Word has been received recently from the "That the establishment of additional branches, domestic or foreign, be subject to State authorities of New Mexico stating that a the approval of the Federal Reserve Board." law was passed by the legislature of that State, Conditions (2) and (3) will not be inserted effective as of June 11, 1915, providing that— unless the applying bank has the legal right Any incorporated State bank may apply to to accept domestic drafts or to establish the Federal Reserve Board for the right to subbranches at the time of admission. If, howscribe to the stock of the Federal reserve bank ever, the State law subsequently authorizes organized within the Federal reserve district either domestic acceptances or branch banks, where the applicant bank is located and may the member bank could not at that time under become a stockholder of such bank and exercise the provisions of condition (1) avail itself of all of the powers of member banks in accordance either privilege except with the approval of with the provisions of the act of Congress enthe Federal Reserve Board. Condition simtitled "Federal Reserve Act" approved Deilar to (2) and (3) will be imposed when that ; cember 23, 1913. subsequent approval is given. A revised list of those States which have enacted laws expressly authorizing any State State Bank Membership. bank to become a member bank follows:1 The last issue of the Bulletin included Cali- California, Idaho, Iowa, Kentucky, Louisiana, fornia among the list of States which have Maine, Massachusetts, Michigan, Minnesota, passed no law expressly authorizing State Mississippi, Missouri, Montana, Nebraska, New banks to become member banks. That was Jersey, New Mexico, New York, North Dakota, an error. The California bank act provides Ohio, Oregon, South Carolina, South Dakota, in section 56 that: Texas, Utah, Virginia, and Washington. Any bank organized and existing under the i See page 150 of the July BULLETIN for extracts from these laws and laws of this State is hereby authorized and page 218 of the August BULLETIN for a list of those States in which the State authorities have ruled that any State bank may become a member empowered to join or associate itself with any bank. 5554—15 3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

264 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. GOLD SETTLEMENT FUND. STATEMENT. Assets: There has been continued increase in the gold Gold order certificates $46,180, 000 settlement fund during the past month, the Gold order certificates held total amount held as of August 26 being by the cashier of the Treasury Department for $55,930,000. The amount of clearings for account of the gold settleeach settlement since the report published in ment fund 3, 320,000 the August issue of the Bulletin is shown in $49, 500,000 the following table, the total, to and including Liabilities: August 26, being $333,729,000, and the total Credit balances of the Federal reserve banks as balances $68,955,000, or 20.66 per cent of the shown by the books were total clearings. The net change in owneras follows— ship of the gold held in the fund has amounted Federal Reserve Bank of to $14,487,000, or 4.34 per cent of the total Boston 7, 707,000 clearings. Federal Reserve Bank of New York 11, 501,000 Amount of clearings. Federal Reserve Bank of Philadelphia 1, 671,000 Total clearings. Balances. Federal Reserve Bank of Cleveland 4, 256,000 Previously reported $231,996,000 $50,496,000 Federal Reserve Bank of Settlement of— July 29 20,021,000 3,211,000 Richmond 3, 212, 000 Aug. 5 25,275,000 4,594,000 Federal Reserve Bank of Aug. 12 18,711,000 3,549,000 Aug. 19 20,027,000 3,290,000 Atlanta 1,304,000 Aug. 26 17,699,000 3,815,000 Federal Reserve Bank of Total 333,729,000 68,955,000 Chicago 9, 329,000 Federal Reserve Bank of Changes in ownership of gold. St. Louis 1,657,000 Federal Reserve Bank of Total net Balance, Minneapolis 1,187,000 Federal reserve bank. deposits. Au 19 g 1 . 5 2 . 6, Increase. Decrease. Federal Reserve Bank of Kansas City 3, 611,000 Federal Reserve Bank of Boston $3,230,000 $4,831,000 $1,601,000 New York 15,000,000 15,736,000 736,000 Dallas 3,698,000 Philadelphia 9,000,000 1,244,000 $8,756,000 Cleveland 2,470,000 3,995,000 1,525,000 Federal Reserve Bank of Richmond 3,320,000 4,370.000 900,000 San Francisco 367, 000 Atlanta 260,000 1,415,000 1,155,000 Chicago 5,770,000 12,326,000 6,556,000 49, 500,000 St. Louis 3,220,000 2,512,000 708,000 Minneapolis 1,400,000 1,047,000 353,000 Kansas City 3,480,000 3,523,000 43,000 The gold order certificates were counted. Dallas . . . . 1,650,000 3,621,000 1,971,000 A certificate was obtained from the cashier of the San Francisco 5,680,000 1,310,000 4,670,000 Treasury Department setting forth that he held for the Total 54,480,000 55,930,000 14,487,000 14,487,000 account of the gold settlement fund $3,320,000 in gold order certificates. The fund was audited on July 26 by a repre- Statements were prepared of the accounts of the 12 sentative of the Federal Reserve Board and a Federal reserve banks, and signed verifications were later representative of the Federal reserve banks, obtained. and a report submitted to the Board and to The records show all transactions in detail, and were found to be in excellent condition. the reserve banks, as follows: Proper safeguards have been provided for the care and JULY 26, 1915. The FEDERAL RESERVE BOARD, custody of the gold order certificates. Washington, D. C. Respectfully submitted. SIRS: An audit of the money and accounts of the gold (Signed) J. A. BRODERICK, settlement fund was made by the undersigned on July 26, Representative Designated by the Federal Reserve Board. 1915, as of the close of business July 24,1915. All accounts H.M.JEFFERSON, were reconciled and found to agree with the records. Representative Appointed by the Federal Reserve Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDEKAL RESERVE BULLETIN. 265 Gold settlement fund—Summary of transactions July 22,1915, to August 26, 1915. Balance Gold. i Transfers. Settlement of July 29,1915. July 29, Federal Reserve last state- 1915, bal- Bank of— ment, ance in Ju 1 l 9 y 15 . 22, d W ra i w th n - . Deposited. Debit. Credit. de N b e it t s. d T e o b t i a ts l . c T re o d t i a t l s. cr N ed e i t ts. f c u l n e d a ri a n f g te . r Boston $7,707,000 $1,531,000 $4,810,000 $3,279,000 $6,176,000 New York 9,651,000 $3,363,000 3,958,000 5,677,000 $1,719,000 14,733,000 Philadelphia 171,000 $3,000,000 $1,000,000 679,000 2,561,000 1,882,000 1,492,000 Cleveland 4,256,000 $216,666" 358,000 439,000 81,000 4,127,000 Richmond 2,812,000 700,000 93,000 997,000 904,000 3,419,000 Atlanta 1,304,000 111,000 261,000 493,000 232,000 1,425,000 Chicago 9,329,000 3,410,000 3,985,000 9,904,000 St. Louis 1,657,000 87,000 557,000 2,022,000 1,465,000 575,000 1,013,000 Minneapolis 1,187,000 216,000 296,000 80,000 971,000 Kansas City.... 3,611 000 135,000 794,000 659,000 3,476,000 Dallas 3,698,000 500,000 547,000 703,000 156,666 3,354,000 San Francisco 1,017,000 1,700,000 2,165,000 7,000 455,000 448,000 1,000,000 Total 46,400,000 710,000 5,400,000 3,363,000 3,363,000 3,211,000 20,021,000 20,021,000 3,211,000 51,090,000 Balance Gold. Transfers. Settlement of Aug. 5,1915. Aug. 5, Federal Reserve last state- 1915, bal- Bank of— ment, ance in Ju 1 l 9 y 1 5 2 . 9, d W ra i w th n - . Deposited. Debit. Credit. de N b e i t ts. d T e o b t i a ts l . c T re o d t i a t l s. cr N ed e i t ts. f c u l n e d a ri a n f g te . r Boston.... $6,176,000 $1,000,000 13,339,000 $3,712,000 $373,000 $7,549,000 New York 14,733,000 "$1*666," 666" 1,355,000 $4,173,000 10,110,000* 5,937,000 10,915,000 Philadelphia 1,492,000 31,000 3,804,000 3.773,000 1,461,000 Cleveland 4,127,000 S5o,"6o6" 276,000 '382,000 ""166*666" 4,283,000 Richmond 3,419,000 300,000 371,000 920,000 549,000 3,348,000 Atlanta 1,425,000 30,000 19,000 461.000 442,000 1,376,000 Chicago 9,904,000 3,647.000 6,066,000 2,419,666 12,323,000 St. Louis 1,013,000 1,423,000 2,213,000 790,000 1,803,000 Minneapolis 971,000 400,000 115,000- 133,000 18,000 1,389,000 Kansas City 3,476,000 771.000 844,000 73,000 3,549,000 Dallas 3,354,000 $500,000 402,000 742,000 340,000 3,194,000 San Francisco 1,000,000 350,000 1,325,000 7,000 482,000 475,000 500,000 Total 51,090,000 500,000 1,100,000 2,355,000 2,355,000 4,594,000 25,275,000 25,275,000 4,594,000 51,690,000 Balance Gold. Transfers. Settlement of Aug. 12,1915. Aug. 12 Fed B e a ra n l k R o e f s — erve la A s m 1 t u 9 e g s 1 n t . 5 a t 5 . , te , - d W ra i w th n - . Deposited. Debit, Credit. de N b e i t ts. d T e o b t i a ts l . c T re o d t i a t l s. cr N ed e i t ts. f 1 c u a 9 l n e n 1 d a 5 c r , e i a b n f i a g n te l . - r Boston $7,549,000 $1,197,000 $4,676,000 $3,479,000 $6,352,000 New York 10,915,000 $1,027,000 4,783,000 5,660,000 $877,000 12,819,000 Philadelphia 1,461,000 :$i,*5o6,"666" "i," 74*8," 666' 3,516,000 1,768,000 1,213,000 Cleveland 4,283,000 203,000 215,000 12,000 4,295,000 Richmond 3,348,000 132,000 656,000 524,000 3,216,000 Atlanta 1,376,000 $27 000 393,000 462,000 69,000 1,418,000 Chicago 12,323,000 448,000 2,425,000 1,977,000 11,875,000 St. Louis 1,803,000 1,122,000 1,361,000 239,000 2,042,000 Minneapolis 1,389,000 24,000 63,000 39,000 1,365,000 Kansas City 3,549,000 ::::.::::::: 250,000 1,037,000 787,000 4,336,000 Dallas 3,194,000 $500,000 611,000 1,174,000 563,000 3,257,000 San Francisco 500,000 500,000 1,000,000 13,000 1,015,000 1,002,000 1,002,000 Total 51,690,000 500,000 2,000,000 1,027,000 1,027,000 '3,549,000 18,711,000 18,711,000 3,549,000 53,190,000 Balance Gold. Transfers. Settlement of Aug. 19, 1915. Aug. 19, Federal Reserve last state- 1915, bal- Bank of— m 1 e 2 n , t 1 A 91 u 5 g . . d W ra i w th n - . Deposited. Debit. Credit. de N b e i t ts. d T e o b t i a ts l . c T re o d t i a t l s. cr N ed e i t ts. fu c a l n n e d a c r e i a n i f n g te . • r Boston $6,352,000 $2,908,000 $3,236,000 $328,000 $6,680,000 New York 12,819,000 .$1,397,000 $1,598,00*0 6,566,000 4,968,000 12,618,000 Philadelphia 1,213,000 $1,000,000 916,000 2,760,000 1,844,000 1,297,000 Cleveland 4,295,000 99,000 137,000 38,000 4,196,000 Richmond 3,216,000 946,000 1,878,000 932,000 4,148,000 Atlanta 1,418,000 $57,000 3,000 449,000 446,000 1,358,000 Chicago 11,875,000 2,152,000 3,172,000 1,020,000 12,895,000 St. Louis 2,042,000 312,000 2,356,000 2,044,000 1,730,000 Minneapolis 1,365,000 78,000 115,000 37," 666" 1,402,000 Kansas City 4,336,000 362,000 865,000 503,000 3,974,000 Dallas 3,257,000 "$i6,'666* 799,000 1,039,000 240,000 3,487,000 San Francisco 1,002,000 300,000 1,340,000 11,000 744,000 733,000 695,000 Total 53,190,000 10,000 1,300,000 1,397,000 1,397,000 3,290,000 20,027,000 | 20,027,000 3,290,000 54,480,000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

266 FEDERAL RESEKVE BULLETIN. SEPTEMBER 1, 1915. Gold settlement fund—Summary of transactions July 22,1915, to August 26, 1915—Continued. Balance Gold. Transfers. Settlement of Aug. 26,1915. Aug. 26. Fed B er a a n l k K o e f— serve la A s m 1 u t 9 e g s 1 n t . 5 a . t 1 t , 9 e , - d W ra i w th n - . Deposited. Debit. Credit. de N b e i t ts. d T e o b t i a ts l . c T re o d t i a t l s. cr N ed e i t ts. f 1 c u 9 a l n 1 n e d 5 a c , r e i a b n i f a n g te l . - r Boston $6,680,000 $10,000 $1,839,000 $3,577,000 $1,738,000 $4,831,000 Nflw York 12,618,000 5,000 $1,542,666" 3,820,000 5,401.000 $1,581,000 15,736,000 Philadelphia 1,297,000 "§\, m\ 666" 1,6*3,666 3,193,000 2,140,000 1,244,000 Cleveland 4,196,000 ioo,666 301,000 946,000 64% 000 3,995,000 Richmond 4,148,000 150,666 894,000 966,000 72,000 4,370,000 Atlanta 1,358,000 55,666 384,000 496,000 112,000 1,415,000 Chicago 12,895,000 100,000 16,666"""*479; 656* 2,566,000 2,087,000 12,326,000 St. Louis 1,730,000 1,280,000 2,062,000 782,000 2,512,000 Minneapolis 1,402,000 300,000 55,000 98,000 43.000 1,047,000 Kansas City 3,974,000 400,000 37,666 88,000 3S6,000 298,000 3,523,000 Dallas 3,487,000 37,000 553.000 724,000 171,000 3,621,000 San Francisco 695,000 300,000 787,000 5,000 2.000 1,099,000 1,097,000 1,310,000 Total 54,450,000 1,450,000 1,694,000 1,094,000 3,815,000 17,699,000 17,699,000 3,815,000 55,930,000 DISCOUNT RATES. Discount rates of each Federal reserve bank in effect August 26, 1915. I Trade acceptances. c D ha a l n a te g st e o o f f M o a f n a 1 d tu 0 l r e i d t s a i s e y . s s t M o o f a 3 o t 0 u v r d e i r a t i y 1 e s 0 s , t M o o f a 6 o t 0 u v r d e i r a t i y 3 e s 0 s , t M o o f a 9 o t 0 u v r d e i r a t i y 6 e s 0 s , p l t i a A u v p r g e a e - r l r s i c t a o o u n v c l d - e k r To 60 days, Over 60 rate. inclusive. inclusive. inclusive. 90 days. inclusive. t i o n c 9 l 0 u d si a v y e s . , Boston Aug. 9 New York July 22 Philadelphia.. June 25 Cleveland Feb. 6 Richmond June 25 Atlanta Apr. 30 Chiraro Jan. 23 St. Louis June 25 Minneapolis... May 18 Kansas City... Aug. 13 ? Dallas Aug. 5 San Francisco. ...do Authorized rate for acceptances, 2 to 4 per cent. On March 10 the Federal Keserve Board fixed the following rates for rediscounts between Federal reserve banks: 3J per cent for maturities of 30 days or less; 4 per cent for maturities of over 30 days to 90 days, inclusive. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDEKAL EESERVE BULLETIN. 267 INFORMAL RULINGS OF THE BOARD. Below are reproduced letters sent out from subscribed capital stock of the Federal reserve time to time over the signatures of the offi- bank." I think this covers the points raised in your cers of the Federal Reserve Board, which conletter, but if there are others on which you tain information believed to be of general wish to be informed, please advise me. interest to Federal reserve banks and member JULY 28, 1915. banks of the system: Stock Subscription of Insolvent Bank. Dividends to Insolvent Banks. Your letter of July 3, with respect to the Section 6 of the Federal reserve act proassessment of your bank for expenses, has been vides in part that— referred to counsel of the Board for opinion of "If any member bank shall be declared the legal status of the matter. He has now insolvent, and a receiver appointed therefor, filed a memorandum in which he states: the stock held by it in said Federal reserve "It appears that two banks, both of which bank shall be canceled, without impairment of are members of the Federal reserve bank, are its liability, and all cash-paid subscriptions on in the hands of a receiver; that these banks said stock, with one-half of one per centum have subscribed to 690 shares of the stock of the per month from the period of last dividend, Federal reserve bank, but have only paid in not to exceed the book value thereof, shall be their first installment, amounting to $11,500. first applied to all debts of the insolvent mem- "It is assumed from the letter of the Federal ber bank to the Federal reserve bank, and the reserve agent that no repayments have been balance if any, shall be paid to the receiver made to these insolvent banks, so that the of the insolvent bank.7' books of the Federal reserve bank will show You are advised that there seems to be no the subscription of these banks as a part of the authority vested in any Federal reserve bank subscribed capital of the Federal reserve bank. to pay interest on cash-paid subscriptions "It further appears that those banks which refunded to any member bank which has been were transferred from one district to the other declared insolvent except under the provision will subscribe to 319 shares of stock of the "one-half of one per centum per month from Federal reserve bank. The transfer of the the period of last dividend." The intent of membership of these banks was under an order this provision appears to be clearly that the of the Federal Reserve Board made effective insolvent member bank shall have its proporas of July 1, 1915. Section 10 of the Federal tion of any dividends which may have been reserve act provides in part as follows: 'That actually earned from the declaration of the the Federal Reserve Board shall have power to last dividend to the date of the cancellation levy semiannually upon the Federal reserve of the stock held by it in the Federal reserve banks, in proportion to their capital stock and bank. surplus, an assessment sufficient to pay its As the Federal reserve bank of your city estimated expenses/ etc. has not declared any dividends nor earned "As the Federal reserve bank is liable to the any at this date it seems that you are entitled insolvent banks for their cash-paid subscripto receive only an amount equivalent to the tions, and will not have the benefit of their actual cash-paid subscriptions, provided, of subscriptions during the period the assessment course, all debts of the insolvent member bank is intended to cover, I can see no legal objecto the Federal reserve bank have been paid. tion to permitting the Federal reserve bank As the stock held by the insolvent member to deduct from their subscribed capital stock bank in the Federal reserve bank has been the 690 shares subscribed to by this two banks. canceled it is not seen how you as receiver are In such case the Federal reserve bank of Richentitled to participate in the future earnings mond should be permitted to deduct the 319 of the bank. shares subscribed by the banks transferred to your district, and this should be added to the AUGUST 20, 1915. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

268 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. Purchase of Municipal Bonds. As I understand the proposed transaction, Your letter of July 19, in which you ask for the paper to be presented to you would be a authority to take all or any part of an issue of draft drawn by certain brokers in Florida on municipal bond3 up to $100,000, was presented some New York firm, the proceeds to be used to the Federal Reserve Board at its meeting for the purchase and shipment of goods to yesterday. I was directed to say to you that, Cuba. The draft would be indorsed and prein the judgment of the Board, each such case sented to you for rediscount by your member should be separately presented, and passed bank before acceptance, and therefore would upon on its own merits. seem clearly within the provisions of section 13, relating to the discount of commercial JULY 29, 1915. paper, and regulation B, series 1915, if properly certified to by the member bank as required in paragraph III of that regulation. State Bank Branches. ., B I do not understand how the question of lHYour letter of July 22 regarding the policy foreign acceptances presents itself to your bank of the Board as to branches established by in this case, because at the time you receive State member banks was presented to the the draft for discount it is not accepted and Board at its meeting yesterday morning, and I would come within the regulation quoted above. was instructed to say that the Board feels that Even after acceptance it would seem to be its recent letter to you on that subject probably eligible for rediscount as an acceptance based covers the situation sufficiently. on the exportation of goods as required by the Answering your letter specifically, it would act. not be the intent of the Federal Reserve Board, Under the facts as presented you would, of should you accept the proposed conditions, to course, charge the prevailing rate for 90-day deny to you or any other institution the right to commercial paper and not that for acceptadd additional branches, except for reasons ances. similar to those set forth by you which might influence your State banking department to AUGUST 12, 1915. withhold consent. Trusting that this makes the position of the Board sufficiently clear. Notes Used for Purchase of Merchandise. JULY 29, 1915. I wish to acknowledge receipt of your letter of August 12, submitting a question referred to you by one of your member banks relating When Applicant Bank is Member. to the eligibility of notes secured by collateral the proceeds of which were used for the pur- ~iTY"our letter of July 28, asking a ruling as to chase of merchandise in the due course of the step which consummates the admittance business. of a member bank into the Federal reserve You are advised that the counsel for the system, has had consideration. Board is of the opinion that any notes the The date of the application and of its ap- proceeds of which have been used or are to be proval by the Board would seem to be imma- used for commercial purposes and which otherterial, and it is felt that a member bank be- wise comply with the terms of regulation B, comes actively identified with the Federal series 1915, are eligible for rediscount by your reserve system when its stock in the Federal bank. reserve bank has been issued and paid for and The fact that commercial paper has the the required reserve deposited. | additional security of collateral in no way AUGUST 11, 1915. affects the eligibility of such paper, providing it complies otherwise with the provisions of the act and the regulations of the Board. Crosstie and Lumber Exports. AUGUST 13, 1915. I have received your letter of August 5, inclosing a communication relating to the dis- Purchase of Government Bonds in Open Market. count of bills drawn for the purpose of providing funds with which to export certain Receipt is acknowledged of your letter of cross ties and lumber to Cuba. August 10, and in reply you are advised that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SBrTBMBBB 1, 1915. FEDERAL EESERVE BULLETIN. 269 Federal reserve banks may, under the provi- The restrictions of section 13 of the Federal sions of section 14, purchase Government bonds reserve act would, of course, limit the total in, the open market, but the provisions of amount of acceptances made by any one bank, section 18, specifying that a Federal reserve including those described, to an amount equal bank may be required to purchase such bonds in the aggregate to not more than one-hall of when offered for sale through the Treasurer of the paid-up and unimpaired capital stock and the United States by a member bank, do not surplus of the member bank, except that by become effective until December 23, 1915. authority of the Federal Reserve Board, under general regulation of the Board, a member bank AUGUST 11, 1915. may accept for an amount not to exceed the amount of its capital stock and surplus. It should be understood, of course, that the No Authority to Act as Guardian. 10 per cent limitation imposed by section* 5200 The Federal reserve act authorizes the of the United States Revised Statutes is not Board to grant permits to national banks to intended to apply to the mere acceptance of act only as trustee, executor, administrator, a bill of exchange, but that the provisions of and registrar of stocks and bonds, and not as section 5200 of the United States Revised guardian. Consequently, it is impossible for Statutes would apply to the indebtedness the Board to give any national bank authority arising between the drawer of the bill and the to act as guardian. Incidentally, under the accepting bank in case the drawer fails, to laws of New York, permits can be granted to furnish funds with which to meet the acceptnational banks to act only as registrar of stocks ance at maturity. and bonds. It should also be understood that the limitation of six months specified under section 13 of JULY 21, 1915. the Federal reserve act applies to the draft but is not construed as applying to the agreement Agreements for Acceptance Credits. or letter of credit under which the draft is The Federal Reserve Board and the Comp- drawn. This limitation of six months does, troller of the Currency, at the instance of the however, apply to specific drafts drawn under Federal Reserve Bank of New York, have con- such agreements or letters of credit, and considered the question whether a national bank sequently, if the terms of the agreement or can enter into an agreement under which a line letter of credit imposed upon the holder for of acceptance credit may be given by such bank, value of the draft any obligation to renew such the credit extending for a period of nine months draft at maturity so that the original draft with but the individual drafts drawn upon the ac- the renewal thereof would remain an obligation cepting bank to be payable at 90 days7 sight of the accepting bank for a period exceeding and not to exceed the total amount specified six months, such agreement would be ultra in the letter of credit, and after referring the vires. question to counsel of the Board for an opinion The distinction emphasized in connection issued a ruling in substance to the effect that a with this ruling is this: While a letter of credit national bank is authorized to enter into an or credit agreement may lawfully be made by a agreement having more than six months to national bank which will extend by its terms run, by the terms of which it obligates itself for for a period exceeding six months, the agreea period of time specified in the agreement to ment must not be of such a character as will accept drafts drawn upon it, provided such impose upon the holders of drafts accepted drafts grow out of transactions involving the thereunder any obligation to renew such drafts importation or exportation of goods and that so that the period of acceptance shall exceed the individual drafts have not more than six six months in duration as to any specified months' sight to run. draft. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

270 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. Intradistrict Clearing System. Additions—Continued. Citizens National Bank, Washington, Ga. There have been 149 additions and 14 with- First National Bank, Ad el, Ga. drawals from the intradistrict clearing system Commercial National Bank, New Orleans, La. since the publication of the list of banks in the Whitney-Central National Bank, New Orleans, La. First National Bank, Meridian, Miss. system in the August Bulletin. Manufacturers National Bank, Harriman, Tenn. Additions and withdrawals are shown in the following table: DISTRICT NO. 7. Additions: Second National Bank, Belvidere, 111. Addi- With- District. tions. drawals. First National Bank, Chad wick, 111. Inter-State National Bank (Hegewisch), Chicago, 111. No. 1. Boston 0 1 First National Bank, Dolton, 111. N N o o . . 2 3 . . N Ph ew ila d Y e o l r p k hia 1 2 2 1 German-American National Bank, Pekin, 111. No. 4. Cleveland 2 1 Ridgely National Bank, Springfield, 111. No. 5. Richmond 0 1 No. 6. Atlanta 10 0 Citizens National Bank, Sycamore, 111. N N o o . . 8 7 . . C St h . ic L a o g u o is 1 2 5 5 0 First National Bank, Tipton, Ind. No. 9. Minneapolis 17 1 City National Bank, Clinton, Iowa. No. 10. Kansas City 0 0 No. 11. Dallas 1 2 Leavitt & Johnson National Bank, Waterloo, Iowa. No. f2. San Francisco 99 0 First National Bank, Traverse City, Mich. First National Bank, Columbus, Wis. The net gain of the system is 135 banks. Commercial National Bank,, Madison, Wis. The list by districts is as follows: First National Bank, Madison, AVis. Germania National Bank, Milwaukee, Wis. DISTRICT NO. 1. Withdrawn: Withdrawn: Commercial German National Bank, Peoria, 111. Merchants National Bank, St. Johnsburg, Vt. National Exchange Bank, Anderson, Ind. First National Bank, Hammond, Ind. DISTRICT No. 2. First National Bank, Boswell, Ind. Additions: First National Bank, Newton, Iowa. Broadway Trust Co., New York City. First National Bank, Dunellen, N. J. DISTRICT No. 8. Withdrawn: Additions: Manufacturers National Bank, Newark, N. J. American National Bank, Rogers, Ark. Farmers National Bank, Danville, Ky. DISTRICT NO. 3. Additions: First National Bank, Canton, Pa. DISTRICT NO. 9. Additions: Withdrawn: First National Bank, Little Falls, Minn. First National Bank, Ralston, Pa. Merchants National Bank, Sauk Center, Minn. First National Bank,.Wellsboro, Pa. First National Bank, Slayton, Mian. DISTRICT NO. 4. Commercial National Bank, Bozeman, Mont. Additions: Silver Bow National Bank, Butte, Mont. First National Bank, Paris, Ky. First National Bank, Cut Bank, Mont. Lebanon National Bank, Lebanon, Ohio. State National Bank, Miles City, Mont. Withdrawn: First National Bank, Roundup, Mont. First National Bank, Plumville, Pa. First National Bank, White Sulphur Springs, Mont. Merchants National Bank, Dickinson, N. Dak. DISTRICT No. 5. Withdrawn: First National Bank, Hillsboro, N. Dak. National Bank of Fairfax, Fairfax, Va. First National Bank, Lisbon, N. Dak. First National Bank, Rolla, N. Dak. DISTRICT No. 6. The National Bank of Wahpeton, Wahpeton, N. Dak. Additions: First National Bank, Bristol, S. Dak. First National Bank, Ozark, Ala. First National Bank, Fairfax, S. Dak. First National Bank, Midland City, Ala. First National Bank, Gary, S. Dak. Ben Hill National Bank, Fitzgerald, Ga. Withdrawn: National Bank of Tifton, Tifton, Ga. i First National Bank, Le Roy, Minn. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDEEAL KESERVE BULLETIN. 271 DISTRICT No. 11. | Additions—Continued. Additions: I Farmers' & Merchants' National Bank, Santa Cruz. First National Bank, Nogales, Ariz. ; Merchants' National Bank, Santa Monica. Withdrawn: Santa Rosa National Bank, Santa Rosa. Citizens National Bank, Arlington, Tex. I Sonora National Bank, Sonora. Western National Bank, Fort Worth, Tex. i National Bank of Tulare, Tulare. i Pajaro Velley National Bank, Watsonville. DISTRICT NO. 12. Wliittier National Bank, Whit-tier. CALIFORNIA. i First National Bank, Willows. Additions: First National Bank, Winters, Anaheim National Bank, Anaheim. i First National Bank, Woodland. First National Bank, Banning, First National Bank, Burbank. ; ARIZONA. First National Bank, Chico. I Additions: First National Bank, Clovis. First National Bank, Yuma. First National Bank, Coalinga. IDAHO. National Bank of Coalinga, Coalinga. i Additions: First National Bank, Compton. First National Bank, American Falls. First National Bank, El Centre. First National Bank, Ashton. First National Bank, Escondido. First National Bank, Briggs. First National Bank, Eureka. First National Bank, Burley. Citrus National Bank, Exeter. First National Bank, Cottonwood. First National Bank, Exeter. First National Bank, Mountain Home. First National Bank, Fort Bragg. OREGON. Farmers' & Merchants' National Bank, Fullerfcon. Additions: First National Bank, Fullerton. Astoria National Bank, Astoria. Farmers' & Merchants' National Bank, Han ford. First National Bank, Baker City. Healdsburg National Bank, Healdsburg. Harney County National Bank, Burns. First National Bank, Hollywood. Ben ton County National Bank, Oorvallis. First National Bank, Imperial. First National Bank of Southern Oregon, Grants Pass., Farmers' & Merchants' National Bank. Livermore. First National Bank, Hermiston. First National Bank, Lodi. Hillsboro National Bank, Hillsboro. Exchange National Bank, Long Beach. First National Bank, Klamath Falls. National Bank of Long Beach, Long Beach. La Grande National Bank, La Grande. Continental National Bank, Los Angeles. First National Bank, Lebanon. First National Bank, Los Banos. McMinnville National Bank, McMinnville. Farmers & Merchants National Bank, Merced. First National Bank, Merrill. First National Bank, Merced. First National Bank, Milton. First National Bank, Oakdale. Ontario National Bank, Ontario. First National Bank, Ocean Park. First National Bank, Portland. First National Bank, Orland. Roseburg National Bank, Roseburg. First National Bank, Oroville. First National Bank, St. Johns. First National Bank, Palo Alto. First National Bank, Tillamook. First National Bank, Paso Robles. Sonoma County National Bank, Petalmm. First National Bank, Pleasanton. Additions: Red Bluff National Bank, Red Bluff. First National Bank, Nephi. Redding National Bank, Redding. Utah National Bank, Ogden. First National Bank, Riverb&nk. First National Bank, Salinas. WASHINGTON. San Bernardino National Bank, San Bernardino. Additions: American National Bank, San Francisco. First National Bank, Auburn. Anglo & London Paris National Bank, Sar. Francisco. Bellingham National Bank, Bellingha-m. First National Bank. San Francisdo. First National Bank, Burlington. Croker National Bank, San Francisco. Farmers National Bank, Colfax. Merchants National Bank, San Francisco. Montesano National Bank, Montesano. Mercantile National Bank, San Francisco. First National Bank, North Yakima. First National Bank, San Jacinto. Yakima National Bank, North Yakima. Marin County National Bank, San Rafael. National Bank of Palouse, Palouse. California National Bank, Santa Ana. United States National Bank, Vancouver. First National Bank, Santa Ana. Baker-Boyer National Bank, Walla Walla. First National Bank, Santa Barbara. First National Bank, White Salmon. 5554—15—-4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

272 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. Trustee Powers. DISTRICT NO. 6. Applications from the following banks for Trustee, executor, administrator, and registrar of stocks and bonds: permission to act under section 11 (k) of the Exchange National Bank, Fitzgerald, Ga. Federal Reserve Act have been approved since Trustee, executor and administrator: the August Bulletin, as follows: First National Bank, Piedmont, Ala. First National Bank, Gadsden, Ala. DISTRICT NO. 1. DISTRICT No. 7. Trustee and registrar of stocks and bonds: Amoskeag National Bank, Manchester, N. H. Tnir fee, executor, administrator, and registrar of stocks and Trustee, executor, administrator and registrar of stocks and bonds: bonds: National City Bank, Chicago, 111. Pittsfield National Bank, Pittsfield, Mass. First National Bank, Marion, Ind. First National Bank, Marlboro, Mass. Howard National Bank, Kokomo, Ind. City National Bank, Bridgeport, Conn. First National Bank, Independence, Iowa. City National Bank, South Norwalk, Conn. First National Bank, Stan ton, Iowa. Commercial National Bank, Waterloo, Iowa. DISTRICT No. 2. DISTRICT No. 9. Registrar of stocks and bonds: Harriman National Bank, New York City. Trustee, executor, administrator, and registrar of stocks and bonds: DISTRICT No. 3. First National Bank, Ellendale, N. Dak. First National Bank, Colman, S. Dak. Trustee, executor, administrator, and registrar of stocks and Security National Bank, Sioux Falls, S. Dak. bonds: Ashland National Bank, Ashland, Wis. First National Bank, Pen Argyle, Pa. Commercial National Bank, Appleton, Wis. First National Bank, Princeton, N. .T. Trustee, executor, and administrator: -DISTRICT No. 4. Negaunee National Bank, Negaunee, Mich. First National Bank, Webster, S. Dak. Trustee, executor, administrator, and registrar of stocks and bonds: DISTRICT NO. 10. Mt. Sterling National Bank, Mt. Sterling, Ky. Trustee and registrar of stocks and bonds: Trustee, executor, administrator, and registrar of stocks and bonds: National City Bank, Akron, Ohio. First National Bank, Kemmerer, Wyo. First National Bank, Hamilton, Ohio. Trustee, executor, and administrator: Trustee: First National Bank, Jewell City, Kans. First National Bank, Oakmont, Pa. First National Bank, Utica, Nebr. DISTRICT NO. 5. DISTRICT NO. 11. Trustee, executor, administrator, and registrar of stocks and bonds: Trustee, executor, administrator, and registrar of stocks and Merchants-Mechanics National Bank, Baltimore, Md. bonds: Farmers and Merchants National Bank, Frederick, Md. Consolidated National Bank, Tucson, Ariz. First National Bank, Oxford, N. C. Trustee, executor, and register of stocks and bonds: Central National Bank, Spartanburg, S. C. First National Bank, Fort Worth, Tex. Empire National Bank, Clarksburg, W. Va. DISTRICT NO. 12. First National Bank, Fairview, W. Va. First National Bank, Grafton, W. Va. Trustee, executor, administrator, and registrar of stocks and Parkersburg National Bank, Parkersburg, W. Va. bonds: Fauquier National Bank, Warren ton, Va. Bank of California, N. A., San Francisco, Cal. (Reg- Trustee, executor and administrator: istrar only in California). Montgomery County National Bank, Rockville, Md. Beilingham National Bank, Bellingham, Wash. Madison National Bank, Madison, W. Va. National Bank of Commerce, Seattle, Wash. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDEBAL RESERVE BULLETIN. 273 LAW DEPARTMENT. The following opinions of counsel have been j "The shareholders of every Federal reserve authorized for publication by the Board since bank shall be held individually responsible the last edition of the Bulletin: * * * for all contracts, debts, and engagements of such bank to the extent of the amount Liability of Stockholders of State Banks Which Have | of their subscriptions to such stock at the par Become Member Banks. j value thereof in addition to the amount subi scribed/' There is no provision in the Federal reserve act; imposing j double liability on the stockholders of State banks or trust j This provision subjects the State bank or companies which become members of a Federal reserve I trust company which becomes a member to bank. j liability double the amount of their subscrip- JUKE 5, 1915. j tion to the stock of the Federal reserve bank, SIB: The question has been raised whether or j but this imposes no individual liability on the not the stockholders of a State bank or trust shareholders of such State bank or trust comcompany which becomes a member of the Fedpany. eral reserve system are, by reason of such mem- Respectfully, bership, subject to the double liability pro- j M. C. ELLIOTT, Counsel. vided for national banks in section 5151, To Hon. C. S. HAMLIN, Revised Statutes. Governor Federal Reserve Board,. This section reads in part as follows: ! Deposits of Gold or Lawful Money by a Federal Reserve The shareholders of every national banking j Agent with the Federal Reserve Board. association shall be held individually responsi- j ble, equally and ratably, and not one for an- Gold, gold certificates, or lawful money deposited hy other, for all contracts, debts, and engage- the Federal reserve bank with its Federal reserve agent for ments of such association, to the extent of the the purpose of reducing its liability for outstanding notes amount of their stock therein, at the par value may legally be deposited by such agent with the Federal thereof, in addition to the amount invested in Reserve Board. such shares * * *. JUNE 23, 1915. SIR: The question has been raised whether Section 9 of the Federal reserve act, relating gold, gold certificates, or lawful money deposto State banks and trust companies which are ited by a Federal reserve bank with its Federal members of the Federal reserve system, proreserve agent for the purpose of reducing its vides that such banks shall be subject to the liability for outstanding Federal reserve notes, provisions of sections 5188, 5200, 5201, 5208, may legally be deposited by such agent to his 5209 and to certain other Federal laws. Neicredit with the Federal Reserve Board; or ther section 9 nor any other section of the Fedwhether a Federal reserve bank may legally eral reserve act provides that such bank shall reduce its liability for outstanding notes by be subject to the provisions of section 5151 transferring funds held in its name in the gold above referred to. In the absence, therefore, settlement fund to the credit of the Federal of any affirmative enactment to this effect, it reserve agent. is clear that State banks or trust companies Section 16 provides that "The Federal relocated in a State the laws of which do not serve agent shall hold such gold, gold certifiprovide that the stockholders shall be subject cates, or lawful money available exclusively for to double liability, may become members of exchange for the outstanding Federal reserve the Federal reserve system without subjecting notes when offered by the Federal reserve their stockholders to this liability. bank of which he is a director." In this connection, however, it may be proper This section indicates that Congress intended to call attention to the fact that section 2 of the the funds deposited with the Federal reserve Federal reserve act provides that— agent in this manner to be held " available'' Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

274 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. exclusively for the exchange of outstanding Government Depositories. Federal reserve notes when offered by the Fed- There is nothing in the Federal reserve act which eral reserve bank. The main question for authorizes the Secretary of the Treasury to use State banks which have become member banks as depositories 4oi consideration is, therefore, whether funds depublic monies generally, though they may be made deposited with the Federal Reserve Board to the positories for postal savings funds. credit of the Federal reserve agent—whether by transfer of credit by the Federal reserve JULY 8, 1915. bank or by actual deposit of the Federal reserve SIR: This office has been requested to give agent—are funds held by the agent "available77 an opinion on the question of whether or not for the exchange specified in this section. State banks upon joining the Federal reserve The wording of the act does not indicate that system become eligible to act as Government Congress intended to require the Federal re- depositories for any Government funds other serve agent to hold these funds actually in his than postal savings deposits. own possession or in a vault under his charge. In order to determine this question it is nec- If the funds are "available" when required by essary to review those acts of Congress which the agent to effect the transfer for which they relate specifically to the deposit and custody are intended by the act, it would seem that of public monies. The act of June 3, 1864, as both the spirit and letter of the law aro com- amended, the act of March 4, 1907 (see Revised plied with. Statutes, section 5153) provides in part as Under the proposed plan each Federal re- follows: serve agent will open an account with the All national banking associations shall be Federal Reserve Board and, instead of keeping depositories of public money under such regulations as may be prescribed by the Secretary. the gold or gold certificates in his own possession, will make a deposit to his credit with the The act of June 25, 1910, Chapter 386, :>6 Board. Telegraphic directions will be sufficient Statutes, 814, prescribes that the funds reto make a transfer of the credit to the Federal ceived at postal savings depository offices in reserve bank in any case where notes are offered each city, town, village, or other locality, shall to the Federal reserve agent by such Federal be deposited in solvent banks located therein, reserve bank for the purpose of exchange. ! whether organized under national or State This plan, like the act, presupposes that the laws, which are willing to receive such deposits bank will itself redeem the notes when pre- under the terms of the act and the regulations sented over its counter for redemption. When made by authority thereof. The word "bank " such notes are then offered to the agent by the as used in the law includes savings banks and bank for exchange, he will, instead of returning trust companies doing a banking business. the gold or gold certificates deposited with him, (See Regulations for the guidance of qualified telegraph instructions to the board to make hanks and others concerned issued ~by the Board the transfer to the Federal reserve bank on the of Trustees, Postal Savings System, effective books of the gold settlement fund. July 1, 1913.) There would seem, therefore, to be no legal The Federal reserve act, section 15, provides objection to the proposed plan. As previ- in part that— ously stated, the funds are "available" for the The moneys held in the general fund of the exchange, and that is all that is required by Treasury * * * may, upon the direction of law, no provision being made as to how and the Secretary of the Treasury, be deposited in Federal reserve banks; * * * and the where they shall be kept. revenues of the Government or any part thereof Respectfully, may be deposited in such banks. * * * M. C. ELLIOTT, Counsel. No public funds of the Philippine Islands, or of To Hon. CHARLES S. HAMLIN, the postal savings, or any Government funds, Governor Federal Reserve Board. shall be deposited in the continental United Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 275 States in any bank not belonging to the system This case is cited with approval in the later established feythis act: Provided, however, That case of Austin v. United States (155 U. S., 431). nothing in this act shall be construed to deny In the absence, therefore, of any specific the right of the Secretary of the Treasury to provision in the Federal reserve act vesting in use member banks as depositories. the Secretary of the Treasury the right to It has been suggested that the proviso last deposit Government funds in State banks which above quoted gives to fche Secretary of the are members of the Federal reserve system, it Treasury the right to designate State banks seems clear that he has no greater right to deswhich become members of the Federal reserve ignate such banks as depositories than he had system as Government depositories. It is prior to the passage of the Federal reserve act. clear, however, from an examination of the This conclusion is further borne out by an acts in force prior to the passage of the Federal examination of the bill as it passed the House reserve act, that the Secretary of the Treasury and as it was amended by the Senate and was without power to designate any bank, other adopted in conference. Under the provisions than a national bank, as a Government deposiof the House bill the Secretary was required tory, and while the use of the word " member to deposit in Federal reserve banks all funds bank" in the proviso quoted would seem to except funds held for the redemption of circuindicate that Congress intended to include lating notes. By the Senate amendment the State bank members, it failed to affirmatively Secretary is permitted to deposit such funds in vest the power to designate State banks in the Federal reserve banks, and the proviso referred Secretary of fche Treasury. to, read in connection with the context of this In order, therefore, to reach the conclusion section, was clearly intended merely to authorthat State banks may be designated under the ize the Secretary to continue to use national law, it is necessary to interpret this proviso as banks as Government depositories if in his disan affirmative enactment vesting this right in cretion he finds this necessary or advisable. the Secretary. Such an interpretation would I am, therefore, of the opinion that while be clearly contrary to the rules of construction the use of the words "member bank,77 instead laid down by the Supreme Court of the United of national bank, in the provision above States. In the case of Minis v. United States quoted, would seem to indicate an intention (15 Peters, 423-445), Justice Story, in deliver- on the part of Congress to broaden the powers ing the opinion of the court, says— of the Secretary of the Treasury in this regard, "It would be somewhat unusual to find en- such an interpretation is not consistent with grafted upon an act making special and tem- the rules of construction laid down by our porary appropriations any provision which was courts, and that member banks can accordto have a general and permanent application ingly be used as depositories to no greater exto all future appropriations. Nor ought such tent than they were used prior to the passage an intention on the part of the legislature to be presumed, unless it is expressed in the most of the act. In other words, State banks beclear and positive terms, and where the lan- coming members of the Federal reserve sysguage admits of no other reasonable interpre- tem may continue to be designated as depositation. The office of a proviso generally is tories for postal savings funds, and national either to except something from the enacting banks may continue to be designated as declause, or to qualify or restrain its generality, or to exclude some possible ground of misin- positories for such funds and for public moneys terpretation of it, as extending to cases not generally. intended by the legislature to be brought within Respectfully, its purview. A general rule, applicable to all future cases, would most naturally be expected M. C. ELLIOTT, Counsel, to find its proper place in some distinct and To Hon. CHARLES S. HAMLIN, independent enactment." Governor Federal Reserve Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

276 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. Transactions Involving the Importation or Exportation of to merge the two transactions into one and the Goods. transaction between Company A and Company A transaction in order to be the basis of a draft or bill B, which is wholly independent of the transeligible for acceptance by a member bank must itself action between Company B and the foreign involve the importation or exportation of goods. A transpurchaser, could not be said to involve the action, wholly independent of the transaction covering the importation or exportation of goods, is not sufficient exportation of the goods in question. basis for an acceptance under the terms of section 13. While the language used in section 13, and above quoted, is broad enough to justify a JUNE 11, 1915. member bank accepting a draft or bill of ex- SIR: The following inquiry has been subchange for goods or other articles purchased or mitted to this office for an opinion: A domestic produced in connection with a definite contract corporation, which for convenience will be for export, even though the shipment may not designated "Company A," enters into a conbe a continuous or immediate one, it seems tract with another domestic corporation, desigclear that the transaction on account of which nated "Company B," to furnish material to be the draft or bill of exchange is drawn must itused by Company B in the manufacture of self involve the exportation of the goods in products which Company B is under contract question. By analogy the same principles with a foreign purchaser to export. Query: must be applied to import transactions. Can a national bank accept a draft or bill of Respectfully, exchange drawn by Company A and accompanied by the necessary documents ? M. C. ELLIOTT, Counsel. In other words, assuming that such an To Hon. CHARLES S. HAMLIN, Governor Federal Reserve Board. acceptance complies with the other necessary provisions of law and the regulations of the Board made pursuant thereto, can such an acceptance be said to be based upon the impor- Deposit of Federal Reserve Notes for Credit or Redemptation or exportation of goods ? tion. The exact language of that part of section 13 A Federal reserve bank receiving Federal reserve notes which is involved is as follows: issued by another Federal reserve bank may return such Any member bank may accept drafts or bills notes to the issuing bank either for redemption or for of exchange drawn upon it and growing out of credit. transactions involving the importation or JULY 30, 1915. exportation of goods. SIR: The question has been asked whether a From the facts stated it does not appear Federal reserve bank receiving Federal reserve that Company A, which draws the draft, has notes issued by another Federal reserve bank any contract or is under any obligation to has the option, on returning such notes to the deliver the material supplied by it elsewhere issuing bank, to demand redemption in gold or than in the United States. There is no privity lawful money or to demand a credit for such of contract as between the foreign purchaser notes. and Company A; .on the contrary, Company Section 16 provides in part as follows: A has an independent contract with Company Whenever Federal reserve notes issued B, bothbeing domestic corporations, and when through one Federal reserve bank shall be redelivery of the material in question is made to ceived by another Federal reserve bank, they Company B and the purchase price paid, the shall be promptly returned for credit or redemptransaction is completed whether the goods in tion to the Federal reserve bank through Miich question were exported or not. The mere fact they were originally issued. that the material furnished is ultimately in- Inasmuch as this section provides that Fedtended for export in some form can not be said eral reserve notes are redeemable in gold or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 277 lawful money by the Federal reserve bank persons secondarily liable, such as the drawer through which they were issued, it is clear that or endorser, and is intended to protect such the option to accept a credit in lieu of gold or secondary party from the risk of loss which lawful money is vested in the holder of such may occur because of delay in demanding paynotes—that is to say, in. the Federal-reserve ment from the party primarily liable or because bank returning them to the bank of issue. of the fact that he has no notice that his prin- The returning bank may therefore elect to cipal has failed to pay. (Stanley v. McElrath, have them credited to its account or may re- 86 Calit Kep., 457.) quire the Federal reserve bank to which they In other words, the law provides that the are sent to redeem them in gold or lawful holder must demand payment at maturity and money. that in case the bill is not paid by the acceptor Respectfully, on demand other parties subsequently liable M. C. ELLIOTT, Counsel. must be given notice, in order that they may To Hon. CHARLES S. HAMLIN, take any necessary steps to protect themselves. Governor Federal Reserve Board. If they are not notified of demand and dishonor, they are entitled, as sureties, to conclude that the bill has been paid and that they Waiver of Demand, Notice and Protest. are released. The acceptor, or primary debtor, The acceptor of a bill of exchange is the principal debtor. on the other hand, is not entitled to notice, and, The law requires that notice of demand and protest be unlike the drawer or endorser, is not released on given to parties secondarily liable in case of dishonor. failure of presentment and demand at maturity. This right to receive notice is a personal one which may (Daniel on Negotiable Instruments, 4th ed., be waived by the parties entitled thereto—that is, the drawer and indorsers; but such waiver has no effect on vol. 2, p. 52; Hayes v. Northwestern Bank of the acceptor, or principal debtor. Virginia, 9 Gratt (Va.), 127.) FEBRUARY 13, 1915. The right of other parties than the acceptor SIR : The attached letter raises a question as to receive notice is a personal one, and if it is to the effect of waiver of demand, notice, and not desired may be waived, but such waiver can protest upon the obligation of an acceptor of a in no way affect any one other than the person domestic draft or bill of exchange discounted making it. Such person merely surrenders a by a member bank under the provisions of right afforded him by the law for his own section 13 of the Federal reserve act. protection. An acceptor of a draft or bill is the party It seems, therefore, that a waiver of demand, primarily liable, and the drawer and endorsers notice, and protest on a bill discounted by a are merely sureties. (4 Am. & Eng. Encl., member bank under the provisions of section 13 470, 2d ed., and cases cited.) In other words, can have no effect on the acceptor of such bill. his liability is the same as that of the maker of He remains liable just as though the formality a note. He is the principal and not a collateral due the person making the waiver had been debtor. (Blair v. Bank of Tennessee, 11 complied with. Humph. (Tenn.), 88.) Respectfully, The requirement that the holder make M. C. ELLIOTT, Counsel. demand on the acceptor at maturity and give To HON. CHARLES S. HAMLIN, notice of dishonor is provided for the benefit of Governor Federal Reserve Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

278 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. GENERAL BUSINESS CONDITIONS. to the cold and rainy weather which prevailed throughout New England during the first half General business and banking conditions are of the month. This is the season of the year described in reports made by Federal reserve when the tourist trade is an important factor agents for the 12 Federal reserve districts. with them, and this is much smaller than in Below are given in detail digests of conditions previous years. The shore and mountain in the various districts substantially as reported resorts are also rather quiet for midsummer. by Federal reserve agents. The farmers and produce men throughout DISTRICT NO. 1—BOSTON. New England have had their crops damaged to a considerable extent by the elements, espe- Outside of increased emergency orders, which cially hay and corn, and potato rot has are being felt directly or indirectly in all lines appeared in many sections. The farmers in of trade, there is practically no change over Aroostook County, Me., however, where the conditions as reported a month ago. While a potato yield is the important crop, report this comparison of the clearing-house statement of to be satisfactory. the Boston banks shows a slight reduction from The reports of the shoe and leather trade, that of the same period last month, the surplus while showing a spotty condition, on the whole is still so large and the demand from borrowers indicate a slight improvement, but outside of so slight that there are no material changes in war orders, business is little better than 60 per the money rates. Money is accumulating in cent of normal. the country banks, and they not only have been less frequent borrowers of their city correspon- The reports from New Bedford and other dents, but have been in the market for outside fine-goods centers continue favorable, and paper. although coarse goods mills are not up to normal, still they are reasonably well employed. While early in the month a slight hardening The dye situation and the uncertainty of the tendency was noticeable in the money market, new cotton crop are important factors. The the month is ending with conditions much the reports from the woolen-mill centers are quite same as previously reported. Call money to satisfactory. Even the general line of goods is brokers is freely offered at 3 per cent; six reported to be in better demand. months commercial paper, 3£ to 4 per cent; Building operations in New England show loans to country banks, 3 to 4 per cent; town contracts for the year up to August 4 of notes, 2^ per cent; bank acceptances, 2J to 2| $108,767,000, the largest amount shown at per cent; excess reserve in Boston banks any time during the past 15 years, with the $41,411,000, a decrease of $4,563,000 from the exception of the year 1912. same date last month. Exports and imports for the month of July compare with a year ago DISTRICT NO. 2—NEW YORK. as follows: Exports for July, 1915, $9,104,337; Wet weather has continued during July. In imports for July, 1915, $12,891,505. Exports some sections the rainfall was 6 inches against for July, 1914, $5,246,599; imports for July, 1£ inches in July, 1914. Hay was considerably 1914, $14,886,723. damaged, but in most places other crops are Unsettled conditions of labor in the large reported in excellent condition. Retail trade manufacturing centers is causing much concern reflected the seasonal quietness, but wholesale to the manufacturers. Attracted by the higher houses reported good business and satisfactory wages paid by certain firms, operatives are collections. changing and some manufacturers are finding Industry was more active, particularly in it difficult to keep up their forces. iron, steel, machinery, wool, and leather. The retail dealers and the department stores Foreign orders are still the leading stimulus. report their business below normal, largely due Labor unrest appeared in various places but Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 279 the differences were adjusted in most cases and look is uncertain. Emergency business consome long standing strikes were settled. Sub- tinues to give employment to iron and steel urban real estate is dull; in New York City a concerns and some wool and worsted mills up slow improvement continues. to almost full capacity, and it is hoped that The New York bank clearings in July totaled this will soon create activity in other lines of $8,695,413,567, an increase of $514,928,945 business. over July, 1914. Other statistics compared Rates for money remain very low; funds confor the same periods show: Building permits tinue to accumulate in the banks and excess issued, 50 for structures to cost $4,097,080, reserves are higher than ever before. There a gain of 7 in number but a decrease of $508,270 is little demand for time or call money, the in amount; new incorporations, 84 with author- rates for both being 3J to 4 per cent. Comized capital $27,400,000, an increase of 28 in mercial paper is scarce, with the rates ranging number and $12,330,000 in amount; New York from 3 to 4 per cent. State failures, 207 with liabilities of $2,479,510, Crops are generally reported to be satisfaca decrease of 37 in number and $5,276,715 in tory, but heavy rains and continued wet liabilities; transactions on stock exchange, weather have done considerable damage in bonds $56,489,500, an increase of $4,792,500; some sections. The prices of fruits and vegestocks 14,326,813 shares, an increase of 6,436,tables are in many instances low, due appar- 214 shares and of 3,426,000 shares over June. ently to underconsumption. As we under- A noteworthy volume of business was also stand the production of these has not been transacted on other exchanges and some ex- above the average. Through certain channels traordinary price movements occurred in a of distribution not over 50 per cent of goods number of listed and unlisted stocks. are being sold as compared with former years. On July 31 the combined figures of the Railroad freight traffic is increasing and the members of the New York Clearing House roads are employing more men in their shops. show, loans $2,577,944,000, deposits $2,695,- Considerable improvement is noted in the 302,000, and excess reserves $180,384,050. cement business, due to some extent to exports Compared with June 26, loans increased to South America. $101,647,000, and deposits $112,738,000, but Apart from emergency orders, textile mills excess reserves decreased $12,868,000. Money are operating at 60 to 70 per cent capacity. rates remained practically unchanged; bankers' Hosiery mills are doing a little better than acceptances 2 3g- to 2| per cent, and prime com- 1 other lines. The lack of dyestuffs continues mercial paper 3J to 4 per cent with occasional to be a serious factor. sales at 3 per cent. Recent noteworthy hap- Although a slight increase is reported in coal penings are the Canadian loan of $45,000,000 mining, the mines are onty working on half taken in New York, the movement of $19,time. Petroleum refiners and manufacturers 534,000 gold and an unstated amount of securof oil products are working full time; business ities from London to New York via Halifax, is reported good and the prices are advancing. and the extreme decline in rates of exchange Shoe manufacturers report business as slugon sterling and continental bills. The quogish and disappointing. Leather is high and tations for checks touched: Sterling, 4.64J; prices are advancing. The grocery trade is francs, 6.02J; marks, 80J; lire, 6. 55. dull; canned goods are selling at very low DISTRICT NO. 3—PHILADELPHIA. prices, in some cases below cost. Large tobacco There has been little change in business con- dealers and cigar manufacturers are busy. ditions in this district. The expected general Drugs and chemicals continue to advance in improvement has not appeared and the out- price. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

280 FEDERAL EESERVE BULLETIN. SEPTEMBER 1, 1915. The prices of lumber continue low. New Pay rolls are larger due to increased producmunicipal work and some increase in the con- tion noted last month. struction of factories and dwellings will prob- The crops are suffering somewhat from too ably mean a greater consumption of lumber much moisture, but the falling off is from the this year than last year, and the outlook seems anticipated crop. It is likely that the yield better. Hotels and amusement companies at in this district will equal last year's with the seashore and mountain resorts report business average price of all farm products 1 per cent below the average. higher than a year ago and 11 per cent higher Stocks of almost all kinds in dealers' hands than two years ago. are low. Orders for goods are for small quan- Jobbing and retail trade is spotty, but gentities, suggesting that business is being con- ally a better feeling prevails. Down trade on ducted most conservatively. Financial con- the lakes is good on account of demand for ore ditions everywhere seem to be sound, and the by reason of resumption of many furnaces. country is ready to take advantage of any The lake carriers' estimate of 40,000,000 tons improvement in general trade conditions. which navigation down the lakes would receive, has been increased to 43,000,000 tons through DISTRICT NO. 4—CLEVELAND. this new demand from additional furnaces. Gains indicated in last month's report are being Difficulty is experienced in getting return carheld in this district, although there has been no goes owing to accumulation of coal on docks decided advance in conditions of 30 days ago. not yet entirely absorbed. Exceptions are the cloak and knitting industry, Collections in the wholesale and jobbing, where pay rolls in a number of instances are trade are slower, due to the late harvest. Retail highest in the history of the business; the glass collections in the city show improvement. trade, especially in pressed ware, and the coal business in Pennsylvania, West Virginia, and DISTRICT NO. 5—RICHMOND. Kentucky. The coal situation in Ohio still Readjustments compelled or induced by remains unsatisfactory. Prices and volume in changed conditions have reached a stage in the other three States are better. Pig iron and this district at which their effect upon its billets are slightly stronger, both in price and general trade is beginning to be evident. demand. Domestic trade has not reached Labor of all classes seems to be very well emnormal. Purchasing by railroads and other ployed, while there is a strong demand for sources is only intermittent. A shifting in the skilled mechanics. In the increasing number placing of business is noted, due to concerns of cities within this district in which manufacbeing filled with urgent orders and placing their turing is developing, pay rolls are "much business in new channels, and corporations heavier than was the case sixty days ago. which have refused foreign orders expect to The retail trade is just beginning to feel the benefit by this shifting to a considerable degree. effect, as wages received to date have in large Deposits show an increase, averaging about 4 measure been used in liquidating indebtedness per cent over the June 23 call of the Comp- incurred during a preceding period of idleness. troller. Loanable funds are plentiful, but August is always a quiet month in many retail bankers as a rule are not investing in outside lines, and the fact that some little improvepaper at the low prevailing rates. Paper offered ment is noticeable in comparison with July by note brokers ranges from 3J to 4 per cent. possibly reflects a change of conditions which Banks' over the counter rate varies form 4J to will be gradually accentuated. 6 per cent. Large banks in reserve cities are The larger jobbing distributing centers in meeting the reserve bank rate in lending their the district are almost as greatly dependent correspondents. upon cotton as is the territory in which the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL BESBKVB BULLETIN. 281 staple is actually grown. In consequence, still in a depressed condition, which, while no general trade collections, while comparatively worse than has been the case for some time in light as is usual in midsummer, are not dis- the past, does not show any improvement. appointingly small. Building trades and woodworkers generally, In the Carolinas it seems to be very widely such as furniture manufacturers, show no speappreciated that this year there can be no cial improvement. excuse for a repetition of the experiences of Sections largely given over to white potatoes last fall. The knowledge that there are now and vegetable truck have been disappointed in at hand well organized agencies competent to prices, and in consequence liquidation in such assist in the gradual liquidation of cotton, free sections has not met expectations. from undue pressure upon the farmers, has Coal is working into a better position. While had a most steadying influence and will make the tonnage has greatly increased, to the benefor the marketing of the staple at prices sub- fit of labor, the increased profits in the busiject only to the universal law of supply and ness have been limited largely to those operdemand, and freed from artificial or hysterical ating on a generous scale. Continued export conditions. Banking facilities now available demands in connection with the gradual but as a matter of routine will, in permitting the sure increase from domestic manufacturers, generous use of cotton as collateral when promise well for the immediate future. desired, enable the growers rapidly to liquidate Money is easy, with little demand for credit seasonal indebtedness to mature in the fall, excepting in continuance of indebtedness outand such a condition should make for the standing since the planting season. There advantage not only of the banks and merchants should be some further demand during the next immediately identified with the farmers, but 30 days from the cotton territory for use in in turn with distributors of all kinds who have connection with saving the crop, but the total done business with the cotton section. amount of such credit should not be great and Cotton milling has been somewhat uneven can be easily supplied. in that while many properties have been doing Viewing the situation in the district as a well, the minority has not fully met its expec- whole, favorable facts and promises, both actutations. ally and comparatively with the recent past, Some of the more southern of our tobacco so outweigh single unfavorable situations as to markets have opened at prices which seem to inspire a feeling of confidence. be satisfactory to all concerned, and better than have been expected in view of a very DISTRICT NO. 6—ATLANTA. generous stock carried over from last year. The quality is better than was the case last The most prominent feature in the business season. movement in the sixth Federal reserve district From both the Carolinas come reports of is the strong revival of the iron industry of the satisfaction with the result of experiment in Birmingham district. The increased operagreater diversification than heretofore prac- tions, due to a steady advance in the price of ticed. Well-distributed rains insure the prom- pig iron and finished products, have necessiise of a generous corn crop of excellent quality, tated the blowing-in of a number of additional while for the same reason abundant grass and furnaces, some of which have been idle for hay crops will insure to those raising live stock many months. With this renewed activity very much better return for their labor than labor is fully employed and the effect is being was the case last year. reflected in the general lines of trade. Lumber is least responsive to change for the Jobbers and merchants are looking forward better in all of the larger lines. The trade is to a good fall trade, though their advance buy- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

282 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. ing is very conservative. With the coming of railroad equipment, hardware, machinery, and September and some definite disposition of the building lumber. cotton situation the mercantile lines will as- Reports from Detroit, Indianapolis, and sume a more normal condition. other automobile centers indicate unusual Rains have been general throughout the dis- demand for new models and enlargement of trict, crops are reported in good condition, and factory facilities. the outlook very gratifying. The large orders placed throughout the dis- New Orleans has under construction a mod- trict, together with the general increased manuern storage warehouse with a capacity of facturing and building activity, have made a 1,000,000 bales; Atlanta an additional ware- good demand for labor at fair wages. Skilled house capacity of 200,000 bales. Reports indi- labor is especially in demand. cate a storage capacity in the district of 3,500,000 General merchandise markets have been to 4,000,000 bales, and no fear is felt as to the largely attended by active buyers who are ability to take care of the cotton crop from the anticipating good fall and winter business. viewpoint of storage; nor from a standpoint of Easy money conditions favor conservative finance, in view of the assurance that the cot- expansion in business. Discount rates remain ton in the district can be easily financed through about the same, the minimum for commercial the Federal reserve bank of Atlanta. paper being 3J; over the counter loans range Savannah and Jacksonville report large from 4 to 5 per cent. Banks are carrying stocks of naval stores on hand, with slight heavy reserves and collections are good. movement in the trade. Whilo the domestic DISTRICT NO. 8—ST. LOUIS. lumber market is dull, there has been an increased demand for exportation within the past Business conditions in this district remain 30 days. Plans are under way to organize a approximately as outlined in the report for the $3,000,000 shipbuilding plant, to be located month of June. Changes noted have been for at Savannah or Brunswick, Ga. the better, and there seems to be a still more Passenger and freight traffic do not appear clearly defined feeling of confidence, especially to keep pace with the general improvement, among wholesale interests. The volume of but a more optimistic feeling prevails with the unfilled orders on hand apparently is more satrailroads in view of the brightening up of the isfactory than shipments, although early buyers industrial situation and the movement of the are reported to be liberal in their purchases. incoming cotton crop. This increased demand would seem to indicate an increase of activity in the manufacturing DISTRICT NO. 7—CHICAGO. interests, which should be noticeable in the August developments in the seventh district next few months. Manufacturers in this disshow the general business advance. Weather trict whose product is available for export conconditions have not been entirely seasonable tinue to feel the demand from foreign sources. and retarded harvesting and retail activity at a Climatic conditions during July were in the few points. Good pasturage is general. Bet- main favorable for the development of agriculter than average crops prevail over the district, tural products. The temperature was below but the quality will not average as high as the normal throughout the district with more usual. Grains are being marketed in increas- than the average rain fall, in the northern secing volume. tions and less than the normal in the southern In iron and steel the leading interests have sections. Reports from the cotton producing all of their furnaces and rolling mills running sections indicate an excellent crop with the to full capacity. Other manufacturing lines percentage of condition well above that of are making a good showing, particularly in 1914 and of the 10-year average. Reports Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 283 on the tobacco crop indicate a normal develop- corn-growing portion of South Dakota report ment to this date. Reports on the wheat crop that soil conditions were such that the warm indicate a satisfactory harvest. Wheat in weather brought a substantial growth of the Missouri seems to have been damaged more crop and a period of very rapid development. than in any other State of this district, but in In these districts corn will not be far below an Missouri as well as the other States, the crop average crop. In the more northerly sections will be considerable above the five-year aver- of Wisconsin, Minnesota, and North Dakota age. Corn reports indicate that the crop will there is yet some doubt as to whether corn will be considerably larger than in 1914 and will mature, but it is making good progress and will show a really large gain over the five-year have an opportunity to make a fair crop in case average. The same may be said of the oats it is not injured by early fall frosts. and fodder crops. Reports on the small-fruit It is early to determine the accuracy of the crops and truck-farm products indicate that reports that are now coming in with reference the supply is plentiful, with the prices moderate. to the yields of small grains, but there is The live-stock market continues to show the dependable evidence that the small-grain totals activity which was noted in the last few in the Northwest this year will be very large reports. and that the crop will average with the best Banking conditions show little or no change crops of former years. There is no further during the past 30 days. The rate of discount apprehension on the score of yield, or quality, in St. Louis seems to be stationary at from 4£ and attention is now turning to the market to 5 per cent. There is an active demand for conditions and particularly to the export good commercial paper, but little of this class situation. in the market at a rate to tempt the bankers. Wholesale and retail business is responding Changes noted in general conditions during promptly to the favorable influence of the large the past month seem to be for the better. An crop and a brisk fall business in all lines is increase of activity is noted in general business, anticipated. and with the promise of an excellent harvest DISTRICT NO. 10—KANSAS CITY. conditions should continue to improve. There have been no important changes in general conditions prevailing throughout Dis- DISTRICT NO. 9—MINNEAPOLIS. trict No. 10 during the past 30 days, except a Clear weather during August has been of the slightly increased demand for money on acgreatest benefit over the ninth district in per- count of the harvests and general crop moving, mitting farmers to proceed with the harvest of although the thrashing season has been very a very large small-grain crop. Over the entire much retarded on account of continued rains territory the harvest is practically completed and storms. and thrashing is in progress in many localities. Fluctuations in the price of wheat have The first new wheat reached the Minneapolis rather discouraged the marketing of that cereal, market about the middle of the month and was which, together with the unseasonable weather of fine quality and good color. Grain ship- preventing thrashing of the grain, has made the ments are now beginning to move in larger vol- movement of that commodity slow. This ume and during the first half of September will likely will cause an increased demand for money become very heavy. for carrying purposes. Deposits in banks The favorable weather during August, with throughout the district are probably greater many clear, warm days, has made a remarkable than they were at this time last year, the diimprovement in the corn crop throughout the rect result of the sale of live stock, agricultural entire district. The southern half of Wiscon- and mineral products to supply foreign desin, the southern half of Minnesota, and the mands therefor. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

284 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. In the southern portion of the district corn is duce the great bulk of the staple. No rain fell made and has proven a record crop, and the here for almost six weeks;.* Rain has, however, general condition of that crop throughout the recently fallen, averaging from 3 to 7 inches district will show at least 80 per cent average over almost the entire district. Open cotton stand and yield. The milling industry is thriv- has been heavily damaged in the southern end ing and shows continued activity. of our territory. By way of compensation it The unusually wet summer has produced an may serve to produce a fall crop, provided frost exceptionally fine pasturage for stock, and grass does not come too early. cattle are moving to the markets. Sheep and Only a few days have passed since the hurrilambs are beginning to move from the ranges to cane and it is accordingly impossible to estithe Missouri River markets, and are bringing mate the losses incurred by the railroads, the the highest prices ever known for this season of cities, and t*he country lying in its path. the year. The horse and mule market con- Rather heavy totals are certain. tinues active, and at one small town in Mis- It is believed that the warehouse discussion souri not long since over 25,000 of these animals has worked most beneficially throughout this had been collected for shipment. district and that cotton will be held in storage The greatest fruit crop ever raised in the until the demand reaches the point of actually southern portion of this district has been largely calling it out, and that it will not be sacrificed. lost because of lack of canning facilities, and The mining interests of the State have been much of the peach crop will go to waste. Orvery much stimulated through the high prices chardists in some parts of the territory are feedcurrent for copper and lead. Great activity ing the fruit to hogs and are giving it away to prevails in our western section on this account. all comers. The price of oil has risen from 5 to 10 cents Coal mining shows an increased activity by during the past month. The lumber interests reason of the demand for early storage coal and are still complaining, although a reasonable in anticipation of the thrashing season, while volume of sales seems to indicate that even lead and zinc mining shows unusual life on achere there is a wave of improvement. Some count of prevailing high prices. An added imlumber concerns have been cutting prices. petus has been given the oil industry on ac- There has been no change in the demand for count of a 20 cents per barrel increase in price, funds. The reserve city banks are easy and and if present prices continue the output of are experiencing only a light demand from their this commodity will become normal at an early country correspondents. Prevailing rates are date. from 5 to 6 per cent. The district is practically free of labor dis- General business conditions have been steadturbances and all classes of skilled and unily improving, as the bankruptcy records show, skilled labor are generally employed. and the retail merchant is reporting better DISTRICT NO. 11—DALLAS. volume while buying a little more freely. Job- August has proven a most unfavorable bers in this district are beginning to feel the month for this district. Almost the entire improved conditions. Much depends on the territory has suffered from drought and blister- working out of our cotton crop. In hardly any ing weather. This served to cut short the other part of the country is liquidation of debts corn crop over very considerable areas, par- so wholly dependent on a single product. ticularly in north and northeast Texas and DISTRICT NO. 12—SAN FRANCISCO. Oklahoma. It has tended materially to reduce the yield of cotton. The chief sufferers are In its foreign trade this district is suffering the central and north central belts, which pro- rofm the unsettled condition of the exchange Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 285 markets and from the lack of ships, which latter as to other fruits, including apples in Oregon will be accentuated by the impending transfer and Washington. of the Pacific mail steamers from trans-Pacific The yield of wheat in California has probably to Atlantic service. While the total export not been more than 40 per cent of expectation, and import business has been practically double but in other parts of the district the yield has that for like periods last year, there seems good been good and the acreage large, resulting in a ground for believing that this may suffer im- large exportable surplus. Transportation diffiportant curtailment. culties are causing slow marketing and much Lumber is in slightly better demand, but warehousing. The barley crop is reported prices are the lowest in the history of the indus- good. Hops are selling at prices as high as 15 try on the Pacific coast. Sales are reported at cents. Cattle, mules, horses, sheep, wool, are less than the cost of production. Production all commanding good prices. of petroleum in the California fields is now at Credit demands are light, and there are cona rate of approximately 250,000 barrels per day. siderable excess reserves throughout the dis- Although consumption is slightly greater ,the trict. The deposits of the clearing house banks amount in storage is so large and competition in San Francisco (member and nonmember) so keen that prices are depressed. Copper are at a record point and some $30,000,000 in mining is very active and prices high. excess of the corresponding time last year. New building is at a low ebb, and a good deal Exposition attendance is heavy, and hotel of unemployment is reported. Railroads are bookings are reported increasingly heavy into busy and have increased their shop forces. In- October. Retail trade has undoubtedly been creased earnings are shown, but in this district stimulated in San Francisco by the presence of are chiefly due to the passenger department. a large number of visitors, but jobbers report The Valencia orange crop has largely been business as rather halting. Bank deposits in gathered and is being marketed at very satis- San Francisco have undoubtedly been increased, factory prices. Lemons, however, have ac- directly or indirectly, because of the exposicumulated in warehouses and have moved very tion; but it seems a fair inference that the disslowly at low prices. Hot weather in the East tribution of such temporary deposits after the would stimulate the demand. In deciduous close of the exposition will not cause important fruits the raisin industry is reported as flour- disturbance, inasmuch as these funds, for the ishing and the situation as to prunes reasonably most part, have not been employed in industry satisfactory; but conditions are unsatisfactory or trade. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

286 FEDEBAL BESEBVE BULLETIN. GOLD IMPORTS AND EXPORTS. Imports of gold, by customs districts, Jan. 1 to Aug. 20, 1915. [In thousands of dollars.] For week ending July SO. Ore and base bullion Bullion, refined United States coin.... Foreign coin Total . For week ending Aug. 6. Ore and base bullion United States mint or assay office bars Bullion refined United States coin.. Foreicn coin Total For week ending Aug. IS. Ore and base bullion United States mint or assay office bars Bullion, refined . Un /ted States coin Foreign coin Total For week ending Aug. 20. Ore and base bullion United States mint or assay office bars Bullion refined United States coin.. . Foreign coin Total Jan. 1 to Aug. SO. Ore and base bull ion.. United States mint or assay office bars Bullion, refined United States coin Foreign, coin Total weN dna eniaM .erihspmaH 1 21,000 21,000 1 21*000 21,001 .dnalyraM ""56" 50 .kroY weN 20 127 2 149 5 lfil 1,637 3 1,806 28 149 16 10 203 1 215 496 49 761 323 7,043 19,764 4,066 31 196 .ociR otroP 1 .adirolF .... 1 .snaelrO weN 1 1 .anozirA 8 8 3 .osaP lE 12 12 2 1 3 3 1 13 13 4 14 17 32 5 1 5 33 10 253 264 95 10 ..... 419 1,298 8 25 8 43 254 683 1,401 .oderaL .... .aksalA 7 7 23 183 200 207 207 7 7 4 236 1,505 4 1,741 .ocsicnarF naS 95 1 2,467 2,503 78 973 1,051 30 873 903 15 2,518 2,533 433 7,183 22 18,590 26,228 -ilaC nrehtuoS .ainrof .... 1 1 7 1 8 .notgnihsaW 121 123 244 62 115 177 84 84 67 109 176 2,616 1,293 6 408 4,413 .olaffuB 236 236 143 143 58 58 230 230 3,624 2 49 3 675 .atokaD =~ — 67 67 .nagihciM 31 31 32 32 32 32 26 26 1,053 1,053 .ecnerwaL .tS 1,168 1,1G8 1 913 1,913 178 4 632 4,810 6,365 8,131 80, .r>56 5,254 106,306 .tnomreV " "3" 3 .latoT 511 270 1 2,469 3,251 348 1,168 460 1,637 976 4,589 246 1,913 373 21,016 883 24,431 383 178 330 497 7,199 8,587 8,976 6,367 26,882 127,408 28,494 198,127 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 287 Exports of gold, by customs districts, Jan. 1 to Aug. 20, 1915. [In thousands of dollars.! Maine and New San H N a e m w p- York. Hawaii.Alaska. F ci r s a c n o - . shire. For week ending July SO. United States mint or assay office bars Bullion refined, domestic United States coin 1,002 Foreign coin . 365 Total 1 307 For week ending Aug. 6. Ore and base bullion 3 United States mint or assay office bars Bullion refined domestic United States coin Total 3 For week ending Aug. 13. Ore and b-ise buUion Bullion, refined, domestic United States coin 2 Foreign coin 250 Total °5"> For week ending Aug. 20. Ore and base bullion United States mint or assay office bars. Bullion, refined: Domestic Foreign United States coin 1,000 Foreign coin . 250 Total 1,250 Jan. 1 to Aug. 20. Ore and base bullion 7 United States mint or assay office bars Bullion, refined: Domestic . 2 Foreign United States coin 5,380 23 Foreign coin 3 439 Total 2 8,819 23 7 oo Wash- ington. 5 3 8 24 17 41 8 61 61 CO. Buffalo. 5 2 7 3 190 13 67 270 CO CM Du- Dakota. M ig i a c n h . - l a S u n u t d h - r L e S n a t w c . e - . perior. 2 15 2 1 1 1 1 1 1 31 5 6 4 6 1 5 20 7 1 9 74 4 7 1 i ococ Ver- Total. mont. 5 7 1,005 365 1,382 27 13 4 17 61 1 1 2 2 250 1 255 11,012 250 11,262 199 36 11 48 20 15,543 3,451 17 11 19,297 1 Includes $1,000 for Montana and Idaho. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

288 FEDEKAL EESEKVE BULLETIN. SEPTEMBER 1, 1915. DISTRIBUTION OF REDISCOUNTS. paper offered for rediscount being as a rule higher in the South than in the other sections The total amount of commercial paper, ex- of the country. Thus the proportion of 30-day clusive of acceptances, rediscounted during the paper rediscounted by the three southern banks month of July was $13,238,200, compared with was less than 45 per cent of the combined $13,404,000 in June and $12,145,700 in May. amount of 10-day and 30-day paper redis- The number of notes rediscounted was 10,155 counted by all the banks, as against 64 per cent in July, as against 10,734 in June and 9,558 shown as their share of total rediscounts. in May. Dallas, whose proportion of total rediscounts The three southern banks handled about 70 for the month is 16.1 per cent, is credited with per cent of the entire number and about 64 per the discount of less than 1 per cent of the cent of the entire amount of the commercial 30-day paper. paper rediscounted during the month. The av- The four eastern banks report about 32 per erage size of all notes discounted by the Federal cent of »the combined amount of 10-day and reserve banks during July was $1,304, as against 30-day paper rediscounted, as against 10.5 per $1,249 in June and $1,271 in May. This aver- cent of the total rediscounts for the month. Of age varied between $867 for the Kansas City the total amount of paper rediscounted during bank and $2,277 for the San Francisco bank. the month by the three southern banks, about Of the total number of notes rediscounted in 45 per cent was 90-day paper, as against 21 and July about 26.7 per cent, and of the total 32 per cent in the case of the eastern banks, and amount about 52.3 per cent, were notes in the western banks except San Francisco, reamounts of $1,000 to $5,000. Small notes (in spectively. Of the total amount of agriculamounts up to $250) constituted about 30 per tural and live-stock paper with maturities excent of the total number, though only 3.3 per ceeding 90 days, about 60 per cent was rediscent of the total amount of notes rediscounted counted by the three southern banks and about during the month. Over 79 per cent of the 24 per cent by the Chicago and Minneapolis number of small notes (up to $250) was dis- banks. counted by the three southern banks. The rediscount of 10-day paper at the special Of the total amount of notes rediscounted 3 per cent rate is reported only by the Boston, during the month, 0.8 per cent was reported as New York, and Philadelphia banks, though the 10-day paper, 12.2 per cent as 30-day paper, lower rate was also in force during the month 34.1 per cent as 60-day paper, 40 per cent as in the St. Louis and San Francisco districts. 90-day paper, and 12.9 per cent as paper ma- The number of banks accommodated increased turing after 90 days from the date of redis- from 785 in June to 796 in July, and now stands count. These percentages vary for the indi- at 10.5 per cent of the total number of member vidual banks, the average maturity of the banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 289 Commercial paper, exclusive of bank acceptances, rediscounted by each of the Federal reserve banks during the month of July, 1915, distributed by sizes. NUMBER OF PIECES AND AMOUNTS. [In thousands of dollars.] To $100. Bank. Boston 13.1 29.8 137 201.6 New York 23.4 38.4 259 334.0 Philadelphia.. 20.7 51.5 279 483.1 Cleveland 10.1 20.6 172 373.0 Richmond 277.7 501.6 3,212 354.3 Atlanta 141.8 266.8 1,874 991.0 Chicago 23.6 62.2 35.0 333 662.1 St. Louis 20.6 50.2 20.0 310 466.8 Minneapolis... 30.9 79.0 61.3 469 800.3 Kansas City... 66.4 83.4 10.3 742 643.3 Dallas 150.3 245.3 254.6 136.2 San Francisco. 22.4 48.9 138.7 792.5 Total.... 923 PERCENTAGES OF AMOUNTS OF EACH CLASS TO TOTAL. To $100. $ O $ 10 2 v 5 0 e 0 r t . o $ O 2 $ 5 5 v 0 0 e 0 r t . o $ $ O 5 1 0 , v 0 0 e 0 r 0 to . $ $ 1 O 2 ,0 , v 0 50 e 0 0 r t . o $ $ 2 O 5 ,5 , v 0 0 0 0 er 0 t . o $ $ 5 1 O ,0 0 0 v ,0 0 e 0 r 0 to . $1 O 0 v ,0 e 0 r 0. Total. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Boston 0.3 1 0 6.5 14.8 23.0 44.5 9.9 100.0 New York . .1 2.4 7.0 11.5 26.1 25.9 17.4 9.6 100.0 PhiJadel phia .5 1.1 4.3 10.7 21.6 31.6 21.5 8.7 100.0 Cleveland .... .1 1.1 2.7 5.5 14.8 31.9 33.2 10.7 100.0 Richmond .6 2.5 6.4 11.5 19.5 34.6 16.9 8.0 100.0 A tlanta .9 3.7 7.1 13.4 22.2 33.3 14.7 4.7 100.0 Chicago .1 , 7 3.6 9.4 24.1 30.4 26.4 5.3 100.0 St. Louis .5 1.8 4.4 10.8 23.4 26.1 28.7 4.3 100.0 Minneapolis 1.1 3.9 9.9 21.1 35.2 21.2 7.6 100.0 Kansas C itv .7 6.1 10.3 14.5 24.3 20.5 22.0 1.6 100.0 Dallas ... .6 4.3 7.0 11.5 22.9 25.9 15.9 11.9 100.0 San Francisco .9 2.8 6.2 15.9 28.0 28.7 17.5 100.0 Total .5 2.7 6.1 11.2 21.1 31.2 19.1 8.1 100.0 Commercial paper rediscounted during July by each of the Federal reserve banks, distributed by States and maturities as of date of rediscount. [In thousands of dollars.] Paper Paper Paper Districts and States. o N f b u m a m n e k m b s e b . r er a N o c d f c u a o b m t m a e b n d m e . k r o s - m w P i a d t t a a h u p y i r n e s i r . n 1 g 0 m w d a a i a f t v t t h e s u r i r n b i 1 n u 3 0 g t 0 m w d a a i a f t v t t h e s u r i r n b i 3 n u 6 0 g t 0 m w d a a i a f t v t t h e s u r i r n b i 6 n u 9 0 g t 0 m a P a d ft t a a e u p y r r e s i 9 . r n 0 g d c p o is a m T c p o m o e u t r e a n r l r t c e e i - d al . days. days. days. District No. 1—Boston: Connecticut 74 Maine 70 3 2.0 1*6.8 JL9.7 4.8 43.3 Massachusetts 170 2 10.0 22.0 35.0 67.0 New Hamnshire 56 2 4.0 4.5 8.5 Rhode Island 18 Vermont 48 5 2.5 23.2 49.0 8.1 82.8 Total 436 12 12.5 47.2 104.8 32.3 4.8 201.6 District No. 2—New York: New Jersev 131 4 23.1 13.2 5.8 39.7 81.8 New York 481 16 2.0 30.4 151.8 66.6 1.4 252.2 Total 612 20 25.1 43.6 157.6 106.3 1.4 334.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

290 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. Commercial paper rediscounted during July by each of the Federal reserve banks, distributed by States and maturities as of date of rediscount—Continued. Paper Paper Paper Districts and States. o N f m um em be b r er a N o c f c u o b m m a b n m e k o r s - • m w P i a t a t h u p i r n e i n r 1 g 0 m d a a f a y t t e u s r r b i 1 n u 0 g t m d a a a f y t t e u s r r b i 3 n u 0 g t m d a a a f v t t e u s r r b i 6 n u 0 g t m a P a ft a t e u p r r e i 9 n r 0 g c p o a m T p m o e t r e a r r l c e i - a l ' banks. dated. days. within 30 within 60. within 90 days. discounted. days. days. days. District No. 3—Philadelphia: Delaware 24 New Jersey . . 70 7 14.3 28.9 60.3 31.9 135.4 Pennsylvania 533 17 51.5 130.9 108.1 57.2 347.7 Total 627 24 65.8 159.8 168.4 89.1 483.1 District No. 4—Cleveland: mm I Kentucky 72 P5.7 61.3 13.3 110.3 Ohio 377 o 13 9.1 25.2 22.4 12.6 69.3 Pennsvl vania 302 12 147.2 16.9 28.3 1.0 103.4 West Virginia 14 Total 705 24 192.0 103.4 64.0 13.6 373.0 District No. 5—Richmond: D M i a s r t y ri l c a t n d of Columbia 1 1 0 3 0 *•* 0 13.7 34.8 17.9 .5 66.9 North Carolina 80 $ 45 337.7 418.1 677.9 84.8 1,518.5 V W So i e r u g s t t i h n V i C a i a rg ro in li i n a a 1 1 7 3 0 1 6 3 " m 4 1 5 6 1 6 1 9 1 1 8 4 5 . . . 5 7 7 5 7 5 2 2 9 3 7 . . . 0 4 0 4 4 1 8 5 6 0 0 6 . . . 8 7 6 1 2 0 9 2 . . . 0 8 7 1 1 , , 4 1 2 0 3 2 8 5 5 . . . 6 2 1 Total. 503 164 580.3 1,762.3 1,793.9 217.8 4,354.3 District No. 6—Atlanta: Alabama . . 92 28 13.8 138.9 254.5 40.8 448.0 Florida 55 18 32.6 101.9 193.9 5.2 333.6 Georgia 115 46 35.7 178.9 233.6 86.3 534.5 Louisiana ... . 5 1 44.6 10.0 54.6 Mississippi 18 1 2.0 8.8 38.1 48.9 Tennessee. . .... 97 33 91.2 282.0 179.9 18.3 571.4 Total 382 127 175.3 755.1 910.0 150.6 1,991.0 District No. 7-Chicago: Illinois 312 10 8.0 12.0 20.6 7.4 48.0 Indiana 197 10 10.0 64.7 107.2 21.4 203.3 Iowa 348 28 70.2 149.1 72.3 94.4 386.0 M ichigan 74 2 5.0 19.8 24.8 Wisconsin 49 Total 980 50 93.2 245.6 200.1 123.2 662.1 District No. 8—St. Louis: Arkansas 60 14 38.8 61.9 30.8 39.2 170.7 Illinois 156 21 5.8 7.1 21.6 22.2 56.7 Indiana 61 2 6.0 33.7 39.7 Kentucky ... 69 4 .2 .2 .8 1.2 Mississi ppi 17 3 3.7 21.6 2.1 27.4 Missouri 79 9 1.5 8.2 11.8 5.5 27.0 Tennessee 20 6 18.3 39.7 85.1 1.0 144.1 Total 462 59 64.6 126.8 205.4 70.0 466.8 District No. 9—Minneapolis: Michigan 31 3 18.0 28.9 7.1 54.0 Minnesota 277 18 .1 187.3 20.9 88.3 296.6 Montana 64 6 11.9 26.0 37.9 North Dakota 152 12 1.5 28.8 82.1 138.5 250.9 South Dakota 112 7 10.1 26.0 24.4 60.5 Wisconsin 87 5 9.9 32.5 49.7 8.3 100.4 Total 723 51 29.5 287.6 197.7 285.5 800.3 District No. 10—Kansas City: Colorado 121 5 5 2 2.9 1.9 11.9 21.9 Kansas 216 19 61.3 88.7 69.7 5.2 224.9 Missouri 52 3 1.5 5.8 .5 .5 8.3 Nebraska 211 12 5.2 20.0 19.6 16.6 61.4 New Mexico 9 1 1.6 1.6 Oklahoma 309 32 34.1 90.9 122.6 77.6 325.2 Wyoming 33 Total 951 72 107.3 208.3 214.3 113.4 643.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 291 Commercial paper rediscounted during July by each of the Federal reserve banks, distributed by States and maturities as of date of rediscount—Continued. Paper Paper Paper Districts and States. of N b m u a m n e k m b s e b . r er a N o c d f c u a o b m t m a e b n m d e k . o r s - m w P i a d t t a a h u p y in r e s i . r n 1 g 0 w m d a a i a f t v t t h e s u i r n r b 1 i n u 3 0 g t 0 w m d a a i a f t y t t h e s u r i r n b 3 i n u 6 0 g t 0 m w d a a i a f t y t t h e u s r i r n b 6 i n u 9 0 g t 0 m a P a d ft t a a e u p y r r e s i 9 . r n 0 g d co i p s m a c T p o m o e u t r e a n r r l t c e e i - d a . l days. days. days. District No. 11—Dallas: Arizona 6 Louisiana 25 n 106 5 181 2 164 2 451 9 New Mexico 28 6 6.0 13.9 22.4 42.3 Oklahoma 42 12 1.4 15.5 80.2 21.3 118.4 Texas 537 109 13.4 230.9 838.1 441.2 1,523.6 Total 638 136 14.8 358.9 1,113.4 649.1 2,136.2 District No. 12—San Francisco: Alaska 1 Arizona California 265 37 65.9 114.7 251.1 55.2 486.9 Idaho . . . . . . .. 57 8 11.8 13.4 35.0 13.4 73.6 Nevada IQ Oregon 86 7 66.1 36.5 11.9 114.5 Utah 23 Washington 78 5 27.0 39.7 45.3 5.5 117. 5 Total 527 57 104.7 233.9 367.9 86.0 792.5 RECAPITULATION. Paper Paper Paper Number Number Paper maturing maturing maturing Paper Total Districts and cities. ol b m an em ks b . er a o c d f c o a b t m a e n d m k . o s - m wi a d t t a h u y i r n s i . n 1 g 0 w d a n i f y t t h e s r i n b 1 u 3 0 t 0 w d a a i f t y t h e s r i n b 3 u 6 0 t 0 w d a a i f t v t h e s r i n b 6 0 u 9 " t 0 m a a d ft t a e u y r r s i 9 . n 0 g d c p o is m a c p o m e u r e n r r t c e e i - d al . Per eonV. days. days. days. Districts: No 1—Boston 436 12 12.5 47.2 104.8 32.3 4.8 201.6 1.5 No. 2—New York 612 20 25.1 43.6 157.6 106.3 1.4 334.0 2,5 No. 3—Philadelphia 627 24 65.8 159.8 168.4 89.1 483.1 3.7 j^o 4—Cleveland . 765 24 192.0 103.4 64.0 13.6 373.0 2.8 No. 5—Richmond 503 164 5S0.3 1,762.3 1,793.9 217.8 4,354.3 32.9 No. 6—Atlanta 382 127 175.3 755.1 910.0 150.6 1,991.0 15.0 No. 7—Chicago 980 50 93.2 245.6 200.1 123.2 662.1 5.0 No 8—St Louis 462 59 64.6 128.8 205.4 70.0 466.8 3.5 No. 9—Minneapolis 723 51 29.5 287.6 197.7 285.5 800.3 6.1 No. 10—Kansas City 951 72 107.3 208.3 214.3 113.4 643.3 4.9 No. 11—Dallas . 638 136 14.8 358.9 1,113.4 649.1 2,136.2 16.1 No. 12—San Francisco 527 57 104.7 233.9 367.9 86.0 792.5 6.0 Total 7,606 796 103.4 1,612.3 4,512.7 5,294.4 1,715.4 13,238.2 100.0 __ Percent 10.5 12.2 34.1 40.0 12.9 100.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

292 FEDEEAL RESERVE BULLETIN. SEPTEMBER 1, 1915. Amounts of commercial paper held by each of the Federal reserve banks on the last Friday of the month of July, distributed by maturities. [In thousands of dollars.] Paper Paper Paper Paper maturing maturing maturing Paper Federal reserve bank. m w a i t t u h r i i n ng 10 d a a f y te s r but 30 d e a .f y te s r but 60 d a a f y te s r but ma a t f u te r r ing Total. 10 days. within within within 90 days. 30 days. 60 days. 90 days. Boston 167.5 98.3 36.2 3. 8 305.8 New York 107.0 184.1 196.0 97.7 2.6 587.4 Philadelphia 126.2 214.3 215.6 35.1 591.2 Cleveland 125.1 324.7 132.0 79.6 i9-4 680.8 Richmond .. 1,116.3 1,894.0 3,267.9 1,625.1 457.9 8,361.2 Atlanta 651.9 943.7 1,702. 8 1,161.0 346. 5 4,805.9 Chicago . ... 145.9 370.9 484.3 219.4 264.2 1,484.7 St. Louis 297.3 341.9 207.9 145.0 992.1 Minneapolis 109.0 144.6 484.0 397.5 578.5 1,713.6 Kansas City 92. 3 354.5 365.2 236.2 111.9 1,160.1 Dallas 724! 2 882.1 1,637.2 2,267.2 1,137.3 6,648.0 San Francisco 314.1 383.2 532.7 358.7 182.7 1,771.4 Total.. 3,512.0 6,160.9 9,457. 9 6,721.6 3,249.8 29,102.2 Per cent 12.1 21.2 32.5 23.1 11.1 100.0 ACCEPTANCES. Acceptances, by classes, held by the Federal reserve banks each week. Nonmember banks. Member Date. banks. Trust State P b r a i n v k a s te . Total. companies. banks. 1915. July 26.. $5,165,000 $4,832,000 $20,000 $367,000 $10,384,000 Aug. 2.. 5,350,000 5,407,000 20,000 352,000 11,129.000 Aug. 9.. 5,499,000 5,869,000 20,000 417,000 11,805,000 Aug. 16. 5,713,000 6,200,000 20,000 461,000 12,394,000 Aug. 23. 5,868,000 6,181,000 20,000 457,000 12,526,000 Acceptances indorsed by member banks: Trust companies' acceptances, $176,000; private banks' acceptances, $8,000; total, $184,000. Distribution of acceptances held by Federal reserve banks according to schedules on hand Aug. 16, 1915, by classes of acceptors and sizes. To $5,000. O to v e $ r 1 0 $ , 5 0 , 0 0 0 0 . 0 O t v o e $ r 2 $ 5 1 ,0 0 0 ,0 0 0 . 0 O to v e $ r 5 $ 0 2 ,0 5 0 ,0 0 0 . 0 O to v e $ r 1 0 $ 0 5 , 0 0 , 0 0 0 0 . 0 Over $100,000. Total. Class of acceptors. c P e e n r t. a a < Member banks... $232,624 $758,869 74 $1,236,625 47 $11,817,971 13 $1..,078,785 $588,000 316 $5,712,874 46.2 Trust companies. 247,554 461,399 1,882,825 990,611 1,222,047 1,415,605 6,200,041 50.2 State banks 20,000 27 20,000 .1 Private banks 20,000 87,032 227,782 101,065 435,879 3.5 "3 Total.. 500,178 1,307,300 181 3,347,232 2,909,647 29 2,300,832 14 2,003,605 66012,368,794 100.0 77 Per cent. — 4T0 105 2775 23T5 1876 100.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDEBAL EESEBVE BULLETIN. 293 Amounts of accep ces held by the several Federal reserve banks at close of business on Fridays from July to Aug. 20, 1915. [In thousands of dollars.] B to o n s . - Y N o e r w k. d P el h p i h la i - a. C la le n v d e . - m R o ic n h d - . la A n t t - a. c C a h g i o - . Lo S u t. is. M ap i o n l n is e . - C K s i a a t n s y - . Dallas. F c S i r s a a c n n o - . Total. Acceptances maturing within 10 days: July 30 286 78 48 74 13 28 24 551 Aug. 6 264 270 10 9 174 100 827 Aug. 13 67 191 3 18 279 Aug. 20 121 714 119 42 29 6 17 36 1,084 Acceptances maturing after 10 days but within 30 days: July 30 667 692 113 18 47 15 162 125 1,839 Aug. 6 267 1,358 194 37 42 65 17 31 134 2,145 Aug 13 385 2,027 297 106 51 80 58 59 139 3,202 Aug. 20 .. 307 1,654 581 86 45 75 43 42 191 3,024 Acceptances maturing after 30 days but within 60 days: July 30 520 2,454 721 69 89 46 35 15 232 4,181 Aug. 6 505 2,167 998 94 90 71 69 45 123 4,162 Aug. 13 527 1,719 993 193 198 126 90 93 184 4,123 Aug 20 989 1,966 598 163 246 163 152 156 150 4,583 Acceptances maturing alter 60 days but within 90 days: July 30 1,036 2,105 505 245 426 269- 158 190 120 5,054 Aug. 6 . . 1,235 2,047 272 220 485 244 113 145 178 4,939 Aug. 13 U,217 2,113 234 102 450 174 88 97 130 4,605 Aug. 20 941 1,744 217 165 412 150 55 180 176 4,040 Total: July 30. 2,223 5,537 1,417 362 607 362 221 395 501 11,625 Aug. 6 2,271 5,842 1,474 351 617 380 208 395 535 12,073 Aug. 13 2,196 6,050 1,527 401 717 380 236 249 453 12,209 Aug. 20 2,358 6,078 1,515 414 745 417 256 395 553 12,731 1 Includes $58,000 of acceptances maturing after 90 days but within 3 months. Total amount of acceptances purchased by each of the Federal reserve banks from Feb. 19 (date of first purchase) to June 30, 1915, and for the month of July, distributed by maturities. [In thousands of dollars.] San Boston. Y N o e r w k. d P el h p i h la i - a. C la le n v d e . - m R o ic n h d - . la A n t t - a. c C a h g i o - . Lo S u t. is. M ap i o n l n is e . - K C a i n ty s . as Dallas. F ci r s a c n o - . Total. Acceptances maturing within 30 days: Feb. 19 to June 30 . 539 109 64 141 67 10 41 61 1,032 July 43 43 Total . 539 152 64 141 67 10 41 61 1,075 Acceptances maturing after 30 days but within 60 days: Feb. 19 to June 30. . , 235 1,543 368 598 310 226 119 61 633 4.093 July 17 276 237 33 71 24 13 4 23 698 Total 252 1,819 605 631 381 250 132 65 656 4,791 Acceptances maturing after 60 days but within 3 months: Feb 19 to June 30 2,899 8,145 1 876 732 1,524 162 397 634 1,112 17,481 July 1,046 1,977 521 265 426 276 178 190 120 4,999 Total 3,945 10,122 2,397 997 1,950 438 575 824 1,232 22,480 Grand total 4,197 12,480 3,154 1,692 2,472 755 717 930 1,949 28,346 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

294 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 191fl. FEDERAL RESERVE BANK STATEMENTS. Resources and liabilities of each of the Federal reserve banks and of the Federal reserve system at close of business on Fridays, July SO to Aug. 20. [In thousands of dollars.] RESOURCES. Boston. Y N o e r w k. d P el h p i h la i - a . C la le n v d e . - m R o ic n h d - . la A n t t - a. Chicago. Lo S u t. is. M ap i o n l n is e . - K C a i n t s y a . s Dallas. F c S i r s a a c n n o - . sy T s f o o t t e r a m l . Gold coin and certificates in vault: July 30 $8,885 $114,326 $12,416 $13,470 S3,832 S3,482 $24,838 $7,651 $5,785 $6,405 $3,464 $8,434 $212,988 August 6 9,036 112,441 11,6015 13,217 3,879 3,491 23,006 7,689 5,814 6,206 3,417 8,020 207,822 August 13 8,935 113,219 12,5S0 13,256 3,8S3 3,506 23,450 7,650 5,795 5,896 3,234 8,293 209,697 August 20 9,064 113,521 9,090 13,302 4,109 3,469 24,316 7,650 5,827 5,397 3,056 7,150 205,951 Gold settlement fund: July 30 7,176 13,733 1,492 4,127 3,719 1,425 9,904 1,013 1,371 3, 476 3,354 1,350 52,140 August 6 7,549 10,915 1,461 4,283 3,348 1,376 12,323 1,803 ' 1,389 3,549 3,294 1,000 52,290 August 13 6,352 12,819 1,213 4,295 3,216 1,418 11,875 2,042 1,365 4,336 3,557 1,002 53,490 August 20 6,680 12,618 i,2y7 4,196 4,298 1,358 12,895 1,730 1,402 3,974 3,487 995 54,930 Gold redemption fund: July 30 55 37 305 225 35 30 37 313 21 1,064 August 6 • 55 37 325 225 35 30 37 313 21 1,084 August 13 55 37 325 225 35 30 37 313 21 1,084 August 20 55 37 345 225 35 30 37 313 21 1,104 Legal tender notes, silver, etc.: July 30 298 12,736 3,291 1,033 110 405 2,407 752 3 488 556 13 22,092 August 6 485 15,726 2,934 1,053 109 458 2,403 723 5 477 538 5 24,916 August 13 829 | 11,020 3,110 1,050 141 449 2,685 601 4 477 572 5 20,949 August 20 715 17,573 3,324 1,076 120 502 2,365 423 4 460 549 6 27,117 Total reserve: July 30 16,365 140,850 17, 236 18,630 7,966 5,537 37,149 9,451 7,189 10,406 7,687 9,818 288,284 August 6 17,076 139,137 16,038 18,553 7,661 5,550 37,732 10,250 7,238 10,269 7,562 9,046 286,112 August 13 16,122 137,113 16,940 18,607 7,565 5,598 38,010 10,328 7,194 10,746 7,676 9,321 285,220 August 20 16,465 143,767 13,748 18,574 8,872 5,554 39,576 9,838 7,263 9,868 7,405 8,172 289,102 Commercial paper: July 30 306 587 591 681 8,361 4,805 1,485 992 1,714 1,161 6,648 1,771 29,103 Aug. 6 | 266 496 637 633 8,668 4,644 1,448 1,041 1,747 1,112 6,541 1,620 28,853 Aug. 13 ! 252 466 509 589 8,022 4,633 1,337 1,042 1,826 1,190 6,634 1,509 28,609 Aug. 20 211 486 572 8,694 4,676 1,236 1,090 1,894 1,334 6,776 1,571 29,020 Bank acceptances: July 30 2,223 5,537 1,417 302 607 362 221 395 501 11,625 Aug. 6... 2,271 5,842 1,474 351 617 380 208 395 535 12,073 Aug. 13 2,196 6,050 1,527 401 717 380 236 249 453 12,209 Aug. 20 2,358 6,078 1,515 414 745 417 256 395 553 12,731 United States bonds: July 30 340 660 3,725 242 1,025 930 1,001 7,923 Aug. 6 491 340 696 3,778 242 1,025 930 1,001 8,503 Aug. 13 491 , 340 753 3,826 242 1,025 930 1,000 8,607 Aug. 20 491 | 340 3,903 242 1,027 931 1,001 8,740 Municipal warrants: July 30 2,494 5,688 1,843 1,512 1,873 638 488 446 1,125 16,107 Aug. 6 2,367 7,161 1,909 1,767 2,043 622 549 557 1,125 18,100 Aug. 13 2,457 7,211 1,972 1,803 2,123 652 569 613 1,158 18,558 Aug. 20 , 2,647 7,056 1,981 1,782 2 107 696 551 602 1,131 18,553 Federal reserve notes, net assets: July 30 419 6,263 90 72 2,370 110 534 1,171 11,029 Aug. 6 357 7,6S9 115 331 2,384 106 424 1,172 12,578 Aug. 13 448 6,537 104 267 2,405 115 353 1,037 11,26ft Aug. 20 430 7,191 387 183 2 418 75 137 1,919 12,740 Due from other Federal reserve banks, net: July 30 1,311 1,195 651 5,543 421 177 491 254 856 17,078 Aug. 6 352 1,517 609 679 230 2,741 648 108 848 340 1,681 15,987 Aug. 13 941 1,098 357 1,290 245 3,784 138 116 317 1,753 M,028 Aug. 20 4,367 759 240 193 2,800 1,347 156 394 120 2,027 16,805 All other resources: July 30 905 327 396 468 178 149 185 2,653 58 452 54 79 5,904 Aug. 6 873 322 572 297 228 106 156 2,099 61 394 73 82 5,263 Aug. 13 957 349 664 386 146 111 134 2,178 60 480 74 84 5,623 Aug. 20 , 931 363 671 227 127 131 165 1,550 61 358 124 69 4,777 Total resources: July 30 24,023 159,252 23,108 23,081 17,156 10,491 52,937 14,869 11,406 14,281 14,643 16,322 377,053 Aug. G 24,053 160,647 22,602 23,237 17,236 10,530 50,902 15.388 11,360 14,505 14,516 16,262 377,469 Aug. 13 23,864 157, 726 23,154 23,163 17,623 10,587 52,336 14,937 11,401 14,324 14,701 16,315 374,120 Aug. 20 23,533 164,941 23,581 23,224 17,933 10,554 52,950 15,255 11,345 13,882 14,425 16,443 382,468 1 Items in transit, i. e., total amounts due from less total amounts due to other Federal reserve banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SEPTEMBER 1, 1915. FEDERAL EESEEVE BULLETIN. 295 Resources and liabilities of each of the Federal reserve banks and of the Federal reserve system at close of business on Fridays, July SO to Aug. 20—Continued. [In thousands of dollars.] LIABILITIES. Boston. Y N o e r w k. d P el h p i h la i - a. C la le n v d e . - m R o ic n h d - . la A n t t - a. Chicago. Lo S u t. is. M ap i o n l n i e s. - [K C a i n ty sa . s Dallas. F c S i r s a a c n n o - . sy T s f o o te t r a m l . Capital paid in: July 30 $4,802 $10,824 $5,365 $5,951 $3,362 $2,416 $6,606 $2,795 $2,427 $2,952 $2,757 $3,924 $54,181 Aug. 6 4,802 10,982 5,275 5,943 3,364 2,417 6,615 2.7P5 2.425 3,011 2,759 3,924 54.315 Aug. 13 4,802 10,982 5,274 5,944 3,365 2,418 6,615 2,796 2,430 3,017 2,756 3,932 54,331 Aug.20 4,802 10,982 5,274 5,944 3,364 2,418 6,616 2,796 2,430 3,017 2,755 3,931 54,329 Reserve deposits, net: July 30 19,221 142,411 17,743 17,130 7,839 5,164 46.331 12,074 8,979 10,779 6,114 12,398 306,183 Aug.6 19,251 144,355 17,327 17,294 7,738 5,272 44,287 12,593 8,935 10,808 5,804 12,338 306,002 Aug. 13 19,062 138,900 17,880 17,219 8,018 5,202 45,721 12,034 8,971 10,521 6,015 12,383 301,926 Aug. 20 18,404 146,697 18,307 17,280 7,811 5,172 46,334 12,459 8,915 10,168 6,036 12,512 310,095 Federal reservenotes.net liability: July 30 5,855 2,828 550 5,732 14,965 Aug.6 6,027 2,795 683 5,915 15,420 Aug. 13 6,128 2,919 786 5,890 15,723 Aug. 20 6,640 2,917 697 5,593 15,847 Due to other Federal reserve banks, net: July 30 4,490 Aug. 6 3,769 Aug. 13 5,904 107 Aug. 20 327 5,271 AH other liabilities: July 30 1,527 100 1,723 Aug.6 1,641 107 1,732 Aug. 13 1,940 112 2,140 Aug. 20 1,991 118 2,197 Total liabilities: July30 24,023 159,252 23,108 23,081 17,156 10,491 52,937 14,809 11,406 14,281 14,643 16,322 377,052 Aug.6 24,053 160,647 22,602 23,237 17,236 10,530 50,902 I 15,388 11,360 14,305 14,516 10,262 377,469 Aug. 13 23,864 157,726 23,154 23,163 17,623 10,587 52,336 14,937 11,401 14,324 14,701 16,HI5 374,120 Aug.20 ! 23,533 164,941 23,581 23,224 17,933 10,554 52,950 15,255 11,345 13,882 14,425 16,443 382,468 CIRCULATION OF FEDERAL RESERVE NOTES. Federal reserve notes issued to the banks: July 30 $4,420 $47,720 $2,930 $4,700 $8,400 $5,500 $4,380 $626 $4,400 $4,100 $8,615 $2,040 $ 97,831 Aug.6 4,420 50,120 3,0 30 4,800 8,800 5,500 4,380 626 4,400 4,400 9,215 2,040 101,731 Aug. 13 4,620 50,120 3,130 4,800 8,800 5,500 4,380 626 4,400 4,700 9,455 2,040 102,571 Aug.20 4,620 51,720 3,650 4,900 5,600 4,380 626 5,000 5,400 9,955 3,040 107,691 Federal reserve notes in the hands of the banks: July30 419 6,463 90 307 245 522 2,370 110 534 140 333 1.171 12,704 Aug. 6 357 7,889 115 331 473 555 2,384 106 424 107 300 1,172 14,213 Aug.13 448 6,707 104 267 372 431 2,405 115 353 4 65 1,0)57 12,308 Aug. 20 430 7,361 387 183 260 ! 433 2,418 75 737 293 362 1,919 14,858 Federal reserve notes in circulation: July30 4,001 41,257 2,840 4,393 8,155 I 4,978 2,010 516 3,«66 3,960 8,282 85,127 Aug.6 4,063 42,231 2,915 4,469 8,327 i 4,945 1,996 520 3,976 4,293 8,915 Sfi8 87,518 Aug. 13 4,172 43,413 3,026 | 4,533 8,428 , 5,069 1,975 511 4,047 i 4,696 9,390 1,003 90,263 Aug.20 4,190 44,359 3,263 1 4,717 8,540 5,167 1,9(52 551 4,263 ! 5,107 9,593 1,121 92,833 Gold and lawful money deposited with Federal reserve agents: July 30. 4,420 47,520 2,930 4,700 2,300 2,150 ! 4,380 626 4,400 3,410 2,550 2,040 81,191 Aug.6 4,420 49,920 3,030 4,800 2,300 2,150 j 4,380 626 4,400 3,610 3,000 2,040 84,676 Aug. 13 4,620 49,950 3,130 4,800 2,300 2,150 ! 4,380 626 4,400 3,910 3,500 2,040 85,806 Aug. 20 4,620 51,550 3,650 4,900 1,900 2,250 ! 4,380 4,400 4,410 4,000 3,040 89,726 Carried to net liabilities: July 30 5,855 2,828 ! 550 5,732 14,965 Aug.6 6,027 2,795 ' 6S3 5,915 15,420 Aug. 13 6,128 2,919 ! 786 5,890 15, 723 Aug.20 6,640 2,917 | 697 5,593 15,847 Carried to net assets: July 30 419 6,263 90 72 2,370 I 110 534 1,171 11,029 Aug. 6 357 7,689 115 331 2,384 106 424 1,172 12,578 Aug. 13 448 6,537 104 267 2,405 I 115 353 1,037 11,266 Aug. 20 430 7,191 387 183 2,418 ! 75 137 1,919 12,740 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

296 FEDERAL RESERVE BULLETIN. SEPTEMBER 1, 1915. Statement of Federal reserve agents1 accounts at close of business on Fridays, July 30 to Aug. 20. [In thousands of dollars.] Boston. Y N o e r w k. d P el h p i h la i - a. C la le n v d e . - m Ri o c n h d - . la A n t t - a. Chicago. Lo S u t. is. M ap i o n l n is e . - K C a i n t s y a . s Dallas. F c S i r s a a c n n o - . Total. Federal reserve notes received from the Comptroller: July 30 $11,800 $49,840 $5,340 $6,400 $9,160 $8,500 $9,380 $3,400 $5,000 $6,000 $11,895 $10,000 $136,715 Aug.6 11,800 51,840 5,480 6,400 9,160 8,500 9,380 3,400 5,000 6,000 11,900 10,000 138,860 Aug. 13 11,800 54,800 5,480 6,400 9,800 8,500 9,380 3,400 5,000 6,800 11,900 10,000 143,260 Aug. 20 11,800 54,800 6,400 10,000 8,500 9,380 3,400 5,000 6,800 13,900 10,000 148,460 Federal reserve notes returned to the Comptroller: July 30 100 30 120 250 Aug.6 100 170 120 395 Aug. 13 100 170 120 395 Aug. 20 100 170 120 395 Amount of Federal reserve notes chargeable to Federal reserve agent: July 30 11,700 49,840 5,310 6,400 9,160 8,500 9,260 3,400 5,000 6,000 11,895 10,000 136,465 Aug.6 11,700 51,840 5,310 6,400 9,160 8,500 9,260 3,400 5,000 6,000 11,895 10,000 138,465 Aug.13 11,700 54,800 5,310 6,400 9,800 8,500 9,260 3,400 5,000 6,800 11,895 10,000 142,865 Aug. 20 11,700 54;800 8,310 6,400 10,000 8,500 9,260 3,400 5,000 6,800 13,895 10,000 148,065 Federal reserve notes in the hands of the agent at close of business Friday: July 30 7,280 2,120 2,380 1,700 760 3,000 4,880 2,774 600 1,900 3,280 7,960 38,634 Aug.6 7,280 1,720 2,280 1,600 360 3,000 4,880 2 774 600 1,600 2,680 7,960 36,734 Aug. 13 7,080 4,680 2,180 1,600 1,000 3,000 4,880 2,774 600 2,100 2,440* 7,960 40,294 Aug. 20 7,080 3,080 4,660 1,500 1,200 2,900 4,880 2,774 1,400 3,940 6,960 40,374 Federal-reserve notes issued to the Federal reserve bank, less notes returned to the agent for redemption and cancellation: July 30 4,420 47,720 2,930 4,700 8,400 5,500 4,380 626 4,400 4,100 8,615 2,040 97,831 Aug.6 4,420 50,120 3,030 4,800 8,800 5,500 4,380 626 4,400 4,400 9,215 2,040 101,731 Aug. 13 4,620 50,120 3,130 4,800 8,800 5,500 4,380 626 4,400 4,700 9,455 2,040 102,571 Aug. 20 4,620 51,720 3,650 4,900 8,800 5,600 4,380 626 5,000 5,400 9,955 3,040 107,691 Held by the Federal reserve agent: In reduction of liability on outstanding notes- Gold coin and certificates— July 30 4,420 47,520 2,930 4,465 2,300 2,150 4,260 4,400 3,410 2,550 2,040 81,071 Aug.6 4,420 49,920 3,030 4,560 2,300 2,150 4,260 4,400 3,610 3,000 2,040 84,316 Aug. 13 4,620 49,950 3,130 4,560 2,300 2,150 4,260 626 4,400 3!, 910 3,500 2,040 85,448 Aug. 20 4,620 51,550 3,650 4,655 1,900 2,250 4,260 4,400 4; 410 4,000 3,040 89,361 Lawful money- July 30 Aug.6 Aug. 13 Aug. 20 As security for outstanding notes— Commercial paper *— July 30 200 6,100 3,350 690 5,752 16,092 Aug.6 200 6,500 3,350 790 5,902 16,742 Aug. 13 170 6,500 3,350 790 5,955 16,765 Aug. 20 170 6,900 3,350 600 990 5,955 17,965 Held by the Treasurer of the United States: Gold redemption fund- July 30 235 120 313 668 Aug.6 240 120 313 673 Aug. 13 240 120 360 Aug. 20 245 120 365 Total: July 30.. 4,420 47,720 2,930 4,700 8,400 5,500 4,380 4,400 4,100 8,615 2,040 97,831 Aug.6.. 4,420 50,120 3,030 4,800 8,800 5,500 4,380 626 4,400 4,400 9,215 2,040 101,731 Aug. 13. 4,620 50,120 3,130 4,800 8,800 5,550 4,380 626 4,400 4,700 9,455 2,040 102,571 Aug. 20. 4,620 51,720 3,650 4,900 8,800 5,600 4,380 626 5,000 5,400 9,955 3,040 107,691 i Amount of commercial paper turned over to the Federal reserve agent: July 30 200 6,739 3,351 691 5,836 16,817 Aug.6 200 7,101 3,350 790 5,990 17,431 Aug. 13 170 7,272 3,357 791 6,012 17,602 Aug. 20 170 7,561 3,352 602 990 6,177 18,852 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX. Page. Page. Acceptances 292, 293 Law department 273-277 Address by Hon. W. P. G. Harding 252-257 Liability of stockholders of State banks which Business conditions, general 278-285 have become member banks 273 Cotton crop, funds for 260 Deposits of gold or lawful money with the Fed- Discount rates 266 eral Reserve Board 273 Federal reserve bank statements 294-296 Government depositories 274 Gold imports and exports 286,287 Transactions involving the importation or ex- Gold settlement fund 264-266 portation of goods 276 Informal rulings of the Federal Reserve Board.. 267-269 Deposits of Federal reserve notes for credit or Stock subscription of insolvent bank 267 redemption 276 Dividends to insolvent banks 267 Waiver of demand, notice, and protest 277 Purchase of municipal bonds 268 Movement of crops 258 State bank branches 268 New Orleans branch bank, date for opening 251 When applicant bank is member 268 Rediscounts, distribution of 288-292 Cross-tie and lumber exports 268 State banks and trust companies admitted 251 Notes used for purchase of merchandise 268 State banks, conditions relating to 262 Purchase of Government bonds in open market. 268 State bank membership, laws regarding 263 No authority granted to act as guardian 269 Trustee powers granted 272 Agreements for acceptance credits 269 Warehouse laws, digest of 260,262 Intradistrict clearance system 270,271 Work of the Board 251 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis