Federal Reserve Bulletin, 1915-11

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

FEDERAL RESERVE BOARD. EX OFFICIO MEMBERS, CHARLES S. HAMLIN, Governor. FREDERIC A. DELANO, Vice Governor. WILLIAM G. MCADOO, PAUL AI. 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. Af. C, ELLIOTT, Counsel. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SUBSCRIPTION PRICE OF BULLETIN. The Federal Reserve Bulletin is distributed without charge to member banks of the system and to the officers and directors of Federal Reserve Banks. In sending the Bulletin to others the Board feels that a subscription should be required. It has accordingly fixed a subscription price of $2 per annum. Single copies will be sold at 20 cents. Foreign postage should be added when it will be required. Remittances should be made to the Federal Reserve Board. m Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

TABLE OF CONTENTS. Page. Work of the Federal Reserve Board 345 Service to member banks 346 Foreign agencies * 348 Earnings and expenditures of Federal Reserve Banks 349 Interdistrict movement of Federal Reserve notes 351 Addresss by Hon. P. M. Warburg 352 Franking of Federal Reserve notes 355 Allotment of United States bonds 355 Conference of Governors in Minneapolis , 35$ Gold settlement fund 357 Discount rates 359 Informal rulings of the Federal Reserve Board 360 Law department - 363- Fiduciary powers granted , .. 367 Intradistrict clearing system 367 Report of Federal Reserve Agents' Committee on Clearances 369 General business conditions 373 Distribution of discounts 381 Acceptances 385 Federal Reserve Bank statements 387 Gold imports and exports 390 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BULLETIN VOL. 1 NOVEMBER 1, 1915 No. 7 WORK OP THE BOARD. session in Boston and adopted a report with reference to the general question of clearing During the month of October the work of checks, which will be found on page 369. the Federal Reserve Board has included the Applications of State banks and trust comfollowing principal elements: panies for membership in the system have con- (1) Investigation and formulation of policy tinued at about the same rate as during the regarding the question of foreign agencies of preceding month, a total of 30 applications Federal Reserve Banks in South America and having been favorably acted upon up to Octoelsewhere. ' ber 25. ; (2) Adoption of a policy with respect to Applications for fiduciary powers have conopen-market operations by Federal Reserve tinued numerous, and a considerable number Banks as embodied in a letter of October 8 have been favorably acted upon. In not a few transmitted to Federal Reserve Agents. instances, however, it has been found necessary , (3) Investigation into petitions of Louisiana to defer action pending the elimination of obbanks for. transfer from the eleventh to the jectionable conditions by the applying banks, sixth reserve district. or the fulfillment of requirements that seem to ; (4) Decision of, policy with respect to allot- be advisable as a preliminary to the granting of ment of offers of bonds to Federal Reserve the desired powers. Banks on behalf of member banks. The Board has received numerous questions (5) Investigation of conditions regarding from member banks with respect to the conexamination of member banks. ditions under which elections of directors de- Further development of the system of clear- signed to fill places falling vacant at the close ance under the gold-settlement fund has pro- of the present year are to be held, and in reply ceeded during the month, four Federal Reserve it named November 16 as the date of formally Agents having opened regular accounts in the opening' the polls for the election of such Federal Reserve Agents' fund. The total directors, giving to Federal Reserve Agents amount in gold-order certificates held in the instructions necessary for their guidance in setwo funds on October 21 was 876,670.000. curing nominations of electors, and in carrying Dming the month transit managers of Fed- through the choice of candidates for the vacant eral Reserve Banks held a conference at Chicago positions. The process of conducting the for the purpose of considering methods of en- election of new directors to fill vacant appointlarging and improving the existing system of ments is now going on. Results probably can clearing checks through Federal Reserve Banks. be announced early in December. Governors of Federal Reserve Banks held a In accordance with the provisions of the regular quarterly meeting at Minneapolis on Federal Reserve Act, the Board has directed October 21-23. Two members of the Board, Federal Reserve Banks to make a call upon Mr. Warburg and Mr. Harding, were in attend- their members for another installment of reance during the sessions, in response to invi- serves, such installment to be due and paytation, for the purpose of consultation and able on November 16. This will be one-twelfth general exchange of ideas as to the progress of of the total reserves required from country the work at the several banks. The Federal banks, and one-fifteenth of the total reserves Reserve Agents' Clearance Committee held a required from city banks, there being, of course, 345 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

346 FEDERAL EESEBVE BULLETIN. NOVEMBER 1, 1915. no further call upon central reserve city in- (2) Collect items not covered by tlie present colstitutions. Such reserves are payable in any lection system? form that may be determined by the Federal By items not covered by the present collec- Reserve Banks themselves, and attention has tion system, Mr. Strong evidently contembeen directed to the provision of the Federal plates the collection of coupons, etc., and the Reserve Act authorizing Federal Reserve legal principles discussed under the first ques- Banks to receive one-half of the installment if tion will apply equally well to the collection so desired in the form of rediscounted paper of of such other items. It seems, therefore, that eligible varieties. the second question should be answered in the Permission has been granted to the National affirmative. City Bank of New York to establish a branch (3) Collect items draum on banks which are in Valparaiso, Chile, with sub-branches at An- not members of the Federal Reserve System? tofagasta and Santiago in the same country. The Board has already held that Federal Reserve Banks may collect items drawn on nonmember banks, there being no difference what- SERVICE TO MEMBER BANKS. ever between the first question and this one as far as the legal rights are concerned. A Following is the substance of a letter lately Federal Reserve Bank could not, of course, sent to all Federal Reserve Agents on behalf accept checks drawn on nonmember banks for of the Board: immediate credit, because such nonmember Under recent date the Federal Reserve banks do not and can not legally have a de- Board received a letter from Governor Strong posit with the Federal Reserve Bank against of the Federal Reserve Bank of New York, which such items could be immediately inquiring whether a Federal Reserve Bank may charged; but there is no legal objection to the undertake to perform the following services Federal Reserve Bank collecting such items for its member banks: from nonmember banks and crediting them (1) Collect notes and drafts. when collected to the account of the member (2) Collect items not covered by the present bank for which the service was performed. collection system. (4) Execute orders for securities? (3) Collect items drawn on banks which are There does not. seem to be any provision of not members of the Federal Reserve System. the Federal Reserve Act which gives to the (4) Execute orders for securities. Federal Reserve Banks either express or im- (5) Answer inquiries as to credits. plied authority to execute orders for securities (6) Purchase commercial paper. for member banks. It is true that a Federal Reserve Bank may, in an exceptional case These questions have had the careful attenwhere commercial paper also has the addition of the Board, and it has been thought that tional security of stocks and bonds, have to the matters referred to were of such large insell such stocks or bonds to realize on the terest as to warrant a general letter addressed security in case of default. But the right to to each Federal Reserve Agent. I have the sell securities on such an occasion as that does honor, therefore, to advise you as follows: not imply a power to act as an agent for a (1) Collect notes and drafts? member bank in the execution of general or- There is no doubt whatever that a Federal ders for the purchase or sale of securities. Reserve Bank may collect notes and drafts In connection with this matter the Board sent to it by its member banks for collection wishes, however, to suggest that it would be and credit, such collection being a necessary possible for Federal Reserve Banks acting on incident to the power of a Federal Reserve behalf of their members to transmit such or- Bank to receive deposits from a member bank. ders to certain brokers, requesting such bro- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 347 kers to^ confirm their transactions direct to the must not be underestimated. Difficulties will member banks. It would not be proper for arise; paper which has been bought with the Federal Reserve Banks to give orders in their greatest care and in the best possible faith will own name and to execute them on a commis- turn out to be bad, or it might happen that sion basis. Federal Reserve Banks should not the bank examiner might criticize paper secure any revenue from such orders. bought by the Federal Reserve Bank, or which (5) Answer inquiries as to credits? has been bought upon the strength of information received from a Federal Reserve Bank. There is no express provision in the Act However, it may be possible to find a mode of relating to the answer of inquiries as to credits, accommodating the banks, and the object but inasmuch as the regulations of the Federal might be achieved by the banks simply acting Reserve Board reasonably contemplate that as intermediaries in the matter, turning over member banks maintain credit files and the information as received from others to the certify in each application for rediscount of member banks, and, when purchasing paper, paper by a Federal Reserve Bank that stateforwarding the same with tho letter of the ments as to the credit of the borrowers are broker through whom it has been purchased, on file, it would seem clear that each Federal the letter being addressed direct to the pur- Reserve Bank might advise its member banks chasing member bank. Federal Reserve Banks in advance as to the credit of various borrowers should not indorse paper to their member in its district. Such advice, however, must banks, or turn over paper which they had be considered merely as advice and not as a previously bought. They should act disguaranty on the part of the Federal Reserve tinctly only as intermediaries in the matter, Bank. It must be carefully considered, howwithout taking any responsibility or appearing ever, that the Federal Reserve Banks receive as contractors. from their members confidential reports which The questions here raised might well be disthey may not divulge and that this may lead cussed at the conferences of Governors and to embarrassment. Federal Reserve Agents, and the Board will (6) Purchase commercial paper? be pleased to receive their reports and recom- While there is no express authority given in mendations. the Act permitting Federal Reserve Banks to act as agents for their member banks in the Meeting of Reserve Agents. purchase of commercial paper, nevertheless, Federal Reserve Agents of the twelve Federal there is no doubt that a Federal Reserve Bank Reserve Banks have been invited by the might, under the provisions of section 14, Federal Reserve Board to meet in Washington purchase bills of exchange of the kinds and on Thursday, November 4. These gentlemen, maturities made eligible under section 13, and who are the chairmen of the boards of directors sell such paper to one of its member banks of the banks, will discuss with each other and under an agreement made prior to the trans- with the Board problems, which have arisen or action. There does not seem, however, to be are anticipated, not to be solved through corresany power vested in a Federal Reserve Bank pondence. which would permit of its buying promissory notes for its member banks. The only express State Banks Admitted. authority given for the purchase of bills of The following State banks have been adexchange in such a manner is in section 14 mitted to the Federal Reserve System during which makes no mention of promissory notes. the month of October, the number of such The Board desires to emphasize in dealing institutions which have joined the system now with this question the fact that the task of being 30: Bank of Hartsville, Hartsville, S. C: advising and purchasing paper for member Commercial Trust & Savings Bank, Joliet, 111.; banks will involve a moral responsibility which Commercial & Savings Bank, Albion, Mich. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

348 FEDERAL KESERVE BULLETIN", NOVEMBER 1, 1915. FOREIGN AGENCIES. condition, could not compete successfully in this respect, whereas it should be their func- The following press statement was issued by tion to do all in their power to assist American the Board on October 12: banks which enter the Latin American field. The committee favored, and the Board and At the meeting of the Federal Reserve Board Secretary McAdoo concurred in, suggesting an this morning there came up for consideration amendment of the Federal Reserve Act which and discussion the report of a committee of would enable American member banks to cothe Board, to whom had been referred the sub- operate for the purpose of jointly owning and operating foreign banks. The contribution of ject of banking relations with the South Amerithe Federal Reserve Banks in this developcan and Central American countries, as recomment in Latin America would primarily consist mended by the Secretary of the Treasury in in providing conditions so favorable for Americorrespondence transmitted to the Board can acceptances that the American banks will- October 6. ing to oner credit facilities there will be materially assisted in meeting the European rates . The committee report expressed the view which, at the present time and probably for that Federal Reserve Banks, being the custosome time to come, will compare unfavorably dians of the reserve money of the member with the American discount rate. banks, should not be permitted to do pioneer Wherever the Federal Reserve Banks can work in Latin American countries, granting help in the development of American banking credit facilities which would lead to a lockup by establishing direct connections in Latin of reserve money in loans which, in most of American countries for the purpose of facilitating discount operations of this kind it will the cases, would be subject to wide fluctuabe, in the opinion of the committee, the proper tions of foreign exchange. Secretary McAdoo function of Federal Reserve Banks to do s^>. stated that his recommendations about joint The committee took the position that Ameriagencies for Federal Reserve Banks did not can banks entering this field ought to be percontemplate this character of operation. mitted to develop the opportunities first, but The report reminded the Board of the policy that in trade centers where American banks pursued for generations by the large govern- are not established it might be proper for the ment banks of Europe, which do not go into Federal Reserve Banks to appoint joint corforeign fields, except that they hold as second- respondents or agents in order to facilitate the ary reserves foreign bills on the most important development of American acceptances in such European countries where large discount mar places. T kets exist and where the gold standard is The Board expressed itself as in entire agreeestablished beyond question. In those coun- ment with these views of the committee. The tries these government banks maintain corre- Secretary of the Treasury, who was present at spondents, and the committee believes that the meeting, announced himself as also in full when normal conditions shall have been accord. The Secretary stated that he agreed restored in Europe joint agencies or corre- with the Board that the resources of the spondents could be used to good advantage Federal Reserve Banks should not be invested there. The committee also called attention to in nonliquid loans in Latin American countries, the fact that England, Germany, and France and that he was in hearty accord with any have established independent banks or branch measure that the Board might ultimately banks of deposit banks in Latin American evolve which would have as a result the decountries to do pioneer work, and that the velopment of American banking, in Latin United States should pursue the same course, American countries. inasmuch as it is necessary for banks going The committee hopes to make its final report into this field to have the widest possible range early in November, alter recommendations shall of activity in order to be able to compete with have been received from the conference of the local banks and the branches of the foreign Governors of Federal Reserve Banks which is banks already established in these fields. Fed- to take place at Minneapolis on October 20 eral Reserve Banks being properly restricted and the conference of Federal Reserve Agents to certain transactions, and such as may not which is to take place in Washington on interfere with the absolute liquidity of their November 4. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 349 EARNINGS AND EXPENDITURES OF FED- The earnings for oach of the three months ERAL RESERVE BANKS, JULY 1 TO SEP- show increasing totals, while the monthly cur- TEMBER 30, 1915. rent expenses show declining totals, with the result that the total not earnings of the system There are presented below detailed figures from 840,655.79 in July increased to $71,666.04 of earnings and expenditures of each of the in August and to $92,761.12 in September. Federal Reserve Banks for the quarter ending Of the total earnings for the quarter, 56.5 per September 30, 1915, in continuation of like cent was from bills discounted, 21.7 per cent figures published in the August Bulletin for from municipal warrants, about 11.3 per cent the period November 16,1914, to June 30,1915. from bankers' acceptances, less than 8 per cent The combined earnings of the Federal from United States bonds, and the remainder Reserve System for the three months ending from sundry operations, mainly commissions . September 30 are given as 8599,813.16, and and exchange. These percentages vary conthe total expenditures as 8807,620.10. The siderably by banks and groups of banks. Thus latter are composed of current expenses, the earnings of the southern banks for the $394,730.21, the cost of printing and shipping quarter were derived almost exclusively from Federal Reserve notes, §363,057.97, and the the discounting of notes. The New York bank cost of equipment, $49,831.92. No account derived its main revenue from bankers7 acceptis taken in the above expenditures of amorti- ances and warrants, while the Chicago bank zation charges, which are reported separately reports over 35 per cent of its total earnings only for the New York Federal Reserve Bank. from United States bonds, and only 25 per The total excess of earnings over current cent from discounts. expenses for the quarter was $205,082.95, Of the current expenses, about 30 per cent or at the rate of about 1.8 per cent on an went as compensation to bank officers and over average paid-in capital of 854,462,000. The 24 per cent as salaries to the clerical staff of the more active southern banks report more banks. The next largest item is the quarterly favorable results of operation. Thus, Rich- assessment for the running expenses of the mond shows net earnings from operation for Board, §54,142.13, or 13.7 per cent of the banks7 the 3 months of 371,282.58, or at the rate of total current expenses. Rent constituted 8.5 per cent per annum on an average esti- slightly over 10 per cent. Other specified mated capital for the quarter of S3,361,000; expense items for the quarter in excess of Atlanta's net earnings for the same period S10,000 wero "printing and stationery,7' "postwere 834,540.61, or at the rate of about 5.7 ago/7 and " directors' fees/7 per cent per annum on an average capital The cost of Federal Reserve notes prepared of 82,417,000; while the net earnings of the during the quarter was 8363,057.97. Over 65 Dallas bank, 852,362.81, were at the rate of per cent of this quarterly expense is charged to about 7.6 per cent per annum on an average the New York bank. The cost of equipment, estimated capital of §2,761,000. Four banks, comprising mainly vaults and machinery, was viz, Philadelphia, Cleveland, St. Louis, and $49^831, of which over 60 per cent represents Minneapolis, are shown not to have earned the cost of vaults installed at the Minneapolis their current expenses for the quarter. and Dallas Federal Reserve Banks. 11672^15 2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Earnings ind expenditures of the Federal Reserve Banks for thequarter from July 1to Sept. 3C>, 1915. O Boston. New York. Ph p i h la i d a. ol- Cleveland. Richmond. Atlanta. Chicago. St. Louis. Minn li e s a . po- K C a i n t s y a . s Dallas. Fra S n o c n isco. Total. (1) Earnings for quarter ending Sept. 30, 19 1 B 1 3 5 i i : l l l l s s b di o s u c g o h u t n ( t b ed a n ( k m e e r m s' b a e c r c s e ) ptances). § 12 2 , , 9 8 * 5 2 3 7 . . 2 3 1 3 $ 30 5 , , 2 2 0 1 2 6 . . 6 2 7 3 5 8 6 , , 3 1 5 5 1 5 . . 0 5 7 1 $ 2 6 , , 1 8 6 9 4 9 . . 0 9 2 1 595,6 8 1 3 1 . . 3 0 3 7 857,954.37 $1 4 5 , , 5 8 5 5 4 5 . . 8 7 0 1 $1 2 2 , , 1 5 4 5 9 0 . . 0 6 4 6 $1 1 9 , , 2 0 5 6 9 6 . . 9 4 8 5 $1 2 5 , , 6 1 2 8 8 8 . . 0 6 4 5 $81,843.85 $1 3 9 , t 4 3 2 8 5 8 . . 7 58 2 $3 6 3 7 9 , , 7 1 4 8 6 4 . . 0 2 0 0 Investments- Sund U M r n y u i n t p i e r c d o i f p S i a t t s l a w te a s r b r o an n t d s s 1 2 1 9 , , , 5 5 3 6 0 5 4 0 9 . . . 8 4 0 4 1 0 " 4 6 5, , " 6 8 3 9 5 3 . . 1 " 4 03* 1 1 5 , , 6 1 6 6 0 0 3 2 2 . . . 0 4 4 8 8 5 1 4 2 , , 8 3 6 7 0 2 2 3 0 . . . 4 4 2 8 2 3 29.75 860.30 2 1 3 1 5 , , , 4 4 5 2 0 9 0 9 2 . . . 7 8 6 5 7 3 5 1 , , 3 2 1 2 3 5 . . 8 0 8 0 5 4 , , 1 1 5 3 6 4 4 3 7 . . . 4 3 8 0 9 0 5 4 , , 0 1 8 0 6 8 4 4 . . . 0 2 5 1 6 5 63.14 8 1 5 , , , 0 5 0 7 0 5 1 1 0 . . . 0 6 0 5 2 0 1 1 4 3 5 6 0 , , , 5 9 3 4 9 4 2 5 4 . . . 5 9 5 1 0 5 Total 39,204.79 87,947.07 31,934.59 26,8G6.06 95,724.15 58,814.67 00,893.76 21,238.58 30,772.02 07,073.51 81,906.99 37,436.97 599,813.16 (2) Current expenses for quarter ending Sent. 30, 1915: Quarterly assessment for expenses of Foderal Reserve Board 4,804.93 10,920.30 5,261.75 5,950.30 3,354.90 2,415.80 6,013.20 2,788.86 2,376.65 2,964.24 2,755.60 3,935.60 54,142.13 Fedoral Advisory Council 55.00 500.00 56.50 40.00 30.00 10.00 691.50 Directors'fees 1,350.00 1,590.00 610.00 460.00 820.00 1,635.00 520.00 830.00 980.00 580.00 440.00 290.00 10,105.00 Legal fees 300.00 2,011.65 503.62 150.00 250.00 375.00 800.00 38.75 4,429.02 Salaries- Bank officers 8,474.98 19,549.96 8,999.98 7,500.00 6,883.29 7,503.91 12,500.00 12,700.12 6,750.00 6,750.00 8,624.95 11,541.67 117,838.88 Clerical stall 4,470.81 18,393.63 9,066.18 8,835.79 6,412.07 6,154.27 10,201.79 7,907.50 4,683.26 7,115.77 7,187.70 5,017.50 95,512.27 Special officers and watchmen... 46.00 500.70 1,356.57 220.00 200.00 595.99 1,175.50 420.00 392.15 620.00 229.00 33.00 6,788.91 Other 309.25 774.00 300.00 30.85 1,155.25 2,569.95 Traveling expenses- 285,75 540.00 247.03 446.25 378.47 767.37 404.47 203.60 448.60 672.65 497.10 4,891.29 Officers and clerks I'M: 73 535.89 445.94 177.85 262.10 300.39 364.44 451.98 450.66 290.35 613.52 4,023.85 Per diem allowance of directors 350.00 430.00 280.00 300.00 380.00 322.50 200.00 200.00 270.00 896.00 302.00 90.00 4,020.60 Telephone ... 250.33 518.24 ' 342.35 187.83 73.24 96.77 278.16 188.97 133.74 120. 79 106.07 74.39 2,371.48 Telegraph •. 14.30 69.91 140.52 59.65 26.73 28.22 49.75 109.10 45.36 79.48 105.23 17.60 745.85 Postage 536.28 1,063.51 49C. 70 801.81 698.25 958.42 986.03 1,105.05 380.68 2,482.26 951.18 349.30 11,409.50 Expressage 59.70 138.79 193.08 26.03 779.28 2.18 29.97 118.20 765.03 534.36 1,858.84 &06 4,514.12 Rent... 3,125.01 9,779.99 2,124.99 1,573.08 1,000.00 1,806.71 6,643.76 3,990.00 1,250.01 2,124.99 . 2,524.50 3,795.00 39,738.04 Insurance and premiums on fidelity bonds 175.79 168.67 244.38 16.54 289.36 75.18 - 460.55 63.09 -9100 1,399.56 Light, heat, and power 248.82 204.57 90.76 3.10 272.87 141.50 1.30 01.05 1,023.97 Printing and stationery .490.49 3,742.72 1,120.92 694.70 1,482.66 900.80 718.43 802.34 441.06 995,51 651.73 - 849.50 12,902.86 Repairs and alterations 45.92 213.50 10.00 25.74 44.06 57.60 51.56 18.17 77.81 14.10 115.55 704.01 All other expenses n. o. s 1,071.84 3,417.64 4,241.62 956.65 810.60 217.96 745.09 237.95 308.01 1,541.22 1,746.84 ' 612.12 15,907.54 Total curront expenses 26,292.68 72,534.81 36,933.08 28,728.15 24,441.57 24,274.06 42,826.75 32,786.08 20,111.15 28,947.24 29,544.18 27,309.86 394,730.21 Amounts amortized 39,801.59 39,801.59 (3) Excess of earnings over current expenses 12,912.11 15,412.26 -4,998.4$ -1,862.09 71,282.58 34,540.61 18,067.01 -11,548.10 10,060.87 -1,873.73 52,362.81 10,127.11 205,082.95 (4) Cost of Federal reserve notes 18,978.87 204,426.15 10,864.93 16,636.43 10,263.30 8,780.75 31,935.39 13,211.42 8,498.56 6,060.73 8,896.89 17,604.55 363,057.97 (5) Equipment: Furniture and fixtures 76.75 721.51 291.19 272.80 582.53 570.85 45.20 132.97 202.50 373.65 3,329.95 Vaults 7.00 550.00 11,473.88 18,841.46 .30,872.34 Machines 911.00 3,760.63 1,539.62 975.10 456.00 483." 85'•""3,*25i.*25" 2,091.20 301*68* 935.00 14,738.33 Other 737.51 88.42 35.44 . 1.65 28.25 891.30 Total 1,017.75 5,219.68 1,830.81 1,343.32 582.53 1,612.29 529.05 3,385.87 13,827.58 332.93 19,215.11 935.00 49,831.92 (6) Total expenditures, exclusive of amortization charges .40,289.30 282,180.64 55,628.82 46,707.90 35,287.40 34,667.10 75,291.19 49,383.97 42,437.29 36,240.90 57,656.18 45,849.41 807,620.10 I Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Earnings and current expenses of the Federal Reserve Banks for each of the months of July, August, and September, 1915. Boston. Now York. Ph p i h la i d a. el- Cleveland. Richmond. Atlanta. Chicago. St. Louis. Mi o n l n is e . ap- K C a i n ty sa . s Dallas. So c n i s F c r o a . n- Total. CD Earnings for July $10,886.69 $21,260.39 $9,388.63 $7,906.34 $30,961.22 $19,086.26 $18,451.70 $5,940.20 $9,038.91 $6,910.10 $26,563.43 $13,651.15 $179,945.01 M Earnings for August 12,673.44 29,521.67 10,794.96 9,095.01 33,194.76 18, M6.84 20,155.58 7,077.45 10,766.40 8,950.82 27,171.88 12,121.94 200,070.65 Earnings for Soptombor 15,644.66 37,165.11 11,751.00 9,864.71 31,568.17 21t181.58 22,286.48 8,220.93 10,966.71 11,212.59 28,171.68 11,763.88 219,797.60 Current expenses for July 9,206.71 24,749.18 15,983.37 9,748.13 7,941.17 6,874.16 14,960.06 11,601.54 7,518.11 11,608.25 9,787.59 9,310.95 13n,2S9.22 Current expenses for August 8,505.68 24,590.73 10,839.73 9,693.29 8,019.47 8,247.12 13,602.92 10,202.57 6,132.44 8,894.50 10,937.80 8,738.27 128,404.61 Current expenses for September 8,530.29 23,194.90 10,109.98 9,286.73 8,480.93 9,152.78 14,263.77 10,982.57 6,460.60 8,444.49 8,818.70 9,260.64 127,036.38 NOTE.—Advanoo payments by Federal Reserve Banks for maintenance of Federal Reserve Board from Oct. 1 to Dec. 31, 1916. 4,804.93 10,920.30 5,261.75 5,950.30 3,354.90 2,415.80 6,613.20 2,788.24 2,376.65 2,964.24 2,755.60 3,935.60 54,141.51 Amortization charges of tho New York bank, which have beon disregarded In the forogoing statement, are made up as follows: (1) Organization expenses, Including expenses of the Federal Reserve Board prior to July 1,1915, $5,856.08; (2) cost of Federal reserve notes, $32,000.67; <3) cost of equipment, $1,938.84; total amortization charges, $39,801.59. INTERDISTRICT MOVEMENT OF FEDERAL RESERVE NOTES. Amounts of Federal Reserve notes received from and returned to other Federal Reserve Banks for redemption or credit by each Federal Reserve' Bank during the period Nov. 16, 1914, to Sept. SO, 1915. P D h I i s l t a . d N el o p . h 3 i — a. D C is le t. v N el o an . 4 d — . D R l i s c t. h m No o . n d 5 . — Di A st t . l N an o t . a 6 . — Di C st h . i N ca o g . o 7 . — D S Is t. t . L N o o u . i s 8 . — M Di in st n . e N a o p . o 9 li — s. D K I a s n t. s N as o . C 1 it 0 y - . DIs D t. a N ll o a . s . 11— D S i a s c t n . i s N F c o o r . a . n 12 - — Total. 1 Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. Dolls. 10,690 10,010 9,405 105 33, M0 535 9,255 295 10,925 1,400 1,770 1,205 9,125 25 5,435 60 8,780 15 3,205 3,850 522,905 101,420 i, 120,290 GS1,310108,18511,750 915.560 17,630 226) 390 3-1., 775 40,665 81,200 25; 395 30,500 40,235 440 37,130 I,G20 101,335 2,435 93,695 43,1801,820,1001,330,265 11,090 23,655 335 195,520 1,225 10,635 "1,295 7,325 4,040 2,510 1,400 3,4S0 40 3,490 45 8,325 65 4,020 1*, 7—23 950,455 142,140 10,315 10,735 108,185 335 23,655 4,050 875 405 750 1,285 12,280 85 6,055 440 115 3S0 3S5 500 275 SO 3,975 19,000 167,465 35,865 14,195 915,605 4,225193,5S0 875 4,700 6,860 44,805 185 19,735 170 14,155 175 130 215 010 950 5SO 20 14,3S5 28,4351,274,200 15,800 35,210 331,105 1,535 26,500 1,135 510 54,080 8,410 1,350 27,925 1,185 67,810 1,285 85 C90 610 120,910 4,415 155 9,930 217,830 4"9~3 ,"1"6*0 10,925 83,800 50,195 4,010 7,490 12,2S0 1,205 19,735 185 21,195 1,215 20,155 26,02(1 OS,'7951,485 72,4-fO 455 72,180 400 18,895 5,605 421,370 111,180 1^770 34,500 25,395 1,265 2,510 0,655 85 12,260 170 55,05.5 9S5 23,780 20,155 4,935 1"1'5182,455 2501,070,455 1,640 2,320 1,3451,395,055 54,450 10,305 440 42,085 3,765 115 440 60 175 30 1,2S5 1,425 95,795 115 9,575 470 490 80 215 70 11,180 2,795 175,310 2,620 40,555 45 3,490 3R5 380 610 215 435 42U 455 72,770 250 231,440 490 470 3,375 2,385 340 10,070 9,055 309,710 2,175 107,8J5 55 8,325 275 720 580 950 2,23010,600 400 60,180 1,0-fOl,163,330 215 225 2,215 3,375 10O17,630 . 0,9901:, 381,960 5G,4S0 95,785 1,725 4,020 3,975 80 12,080 20 6,530 155 5,60o 18,895 1,315 2,770 7,750 305 7,830 310 13,315 190 119,215 125,705 90,310 535,565 1,330,880 1,950,935 144,205 001,635 IGG,94O2O,43O 1,278,270 30,420 345,630 06,640 105,400 417,375 51,6501,563,800 103,925 3,435312,780 8,260 1,400,23512,005122,990122,8755,516,265 5,727,085 CO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

352 FEDERAL BESERVE' BULLETIN. NOVEMBER 1, 1015. SOME PROBLEMS OF THE FEDERAL send it to Delphi. Now there was a scarcity of gold in the city, and the magistrates knew not whence it could be had. RESERVE BANKING SYSTEM. So the women, of their own accord, determined to give Hon. Paul M. Warburg,. member of the the gold ornaments which they wore upon their persons Federal Reserve Board, offered the following for the offering, and these amounted to eight talents weight. The women were fittingly rewarded by the senate, which remarks at the conference of Governors of voted that thereafter, when women died, a suitable eulogy Federal Reserve Banks held at Minneapolis should be spoken over them, as over men. For it was not October 22, 1915: customary before that time, when a woman died, that a public encomium should be pronounced." In these times, when we are so deeply stirred and bewildered by the unhappy fate that has overtaken Europe, When I read this chapter, it struck me that the "votes when it is so hard and well-nigh impossible to understand for women" movement was already showing strength in the path along which man is progressing, nothing will the year 376 B. C, The Romans, however, were by far help us more toward finding our bearings than the study shrewder than the men of our generation, inasmuch as of ancient history. The more fully we understand that, they at least secured a good and valid consideration for for thousands of years, human problems have remained what they conceded. fundamentally the same, the more nearly we succeed in The next thought that came to me in connection with attaining a judicial and sympathetic understanding of the this story was that even the question of the "gold reserve1' tragic struggle of our race. Human problems and human is not modern, but that 2,000 years ago the same problem, nature, indeed, do not appear to have changed since the how to withdraw gold from circulation and use it for the time of Themistocles' speech on "national preparedness," general good, confronted our forefathers. Seriously delivered 2,400 years ago, of which Plutarch tells us, urg- speaking, the incident can not but remind us of the gold ing the building of a strong navy, or since his confidential now being given up to the Banque de France and the message to.the Persian King, Xerxes, informing him after Reichsbank by the people of France and Germany. the battle of Salamis, that the "allies" were going to at- Like Lucullus in Cyrene, the advent of the Federal tack the Dardanelles. We are told this message caused Reserve System came at a time of acute adversity. Its Xerxes to evacuate Greece in order to rush back for the operation, however, had so excellent an effect and the protection of his bridge across the Hellespont. resulting changes were developed with such speed that When reading a sketch of the life of Lucullus, I was sur- many are now forgetful of its benefits. When, some prised to find myself suddenly thinking of the Federal months ago, we were near the brink of a most serious inter- Reserve Act. Lucullus had been sent to Egypt, Libya, national complication, few people stopped to consider the and Crete, Plutarch tells us: fact that we were not then subjected, through fear of "He also made Cyrene, and finding it in confusion panic, to any convulsions, such as we should inevitably * * * he restored it to order, and fixed its constitution, have experienced before the establishment of the Federal * * *. They asked him, it would seem, to write laws for Reserve Banks. I shall not tire you by enumerating them, and to mold their people into some form of sound gov- the benefits of the system. I believe that those who ernment, whereupon he said that it was hard to be a law- think already know them; while those who do not think giver for them when they were having such good fortune. will learn to know them from actual experience. That In fact, nothing is more ungovernable than a man reputed will be conspicuously the case when excess reserves to be prosperous; and, on the other hand, nothing is more are next reduced and when higher rates for money again receptive of authority than a man who ia humbled by prevail. misfortune." I could wish, for many reasons, that it might have been So, you see, even in those days they required a 1907 in possible to open the Federal Reserve Banks before the order to be ready for some sound legislation. war began and that they might have furnished the about The following evening, I took up the life of Camillus, $380,000,000 of notea that were issued under the Aldrichand came upon this incident: Vreeland Act, as amended by the Federal Reserve Act. After a protracted siege, Camillus had taken the city of The functions of Federal Reserve Banks in general and Veii. He had vowed that, if he should take the city, he our present policy would then be better understood and would consecrate the tenth part of the booty to the Del- there would be less talk about our earning capacity and phian god. But, after the city had been taken, he ap- the necessity of preserving the prestige of our Federal Reparently forgot his vow. At a later time, however, he serve Banks by earning dividends. Had the Federal referred the matter to the senate, and, the seers announcing Reserve Banks been in operation when the war began and that the gods were angry, the senate voted that every had they issued all the currency required last autumn, the soldier under oath should return one-tenth of his share: rediscounts underlying these notes, at 5 per cent interest, "The soldiers were filled with indignation * * *. would have produced a return of about $4,500,000, or However, all of them brought in the necessary portion, about the sum required to cover running expenses and and it was decided to make a bowl of massive gold and dividends of all Federal Reserve Banks for a year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBEU 1, 1915. FEDERAL RESERVE BULLETIN. 353 If the. Federal Reserve Banks had put out this circula- assertion. As long as there are deposited with the Federal tion and secured this return, would anyone suggest at this Reserve Agents $10 of gold for each $10 issued in Federal time that our banks should now make efforts to employ Reserve notes there is neither inflation nor contraction, their money? Would not everyone agree that this present but simply a substitution of one gold certificate for another. period of excessive ease of money was the proper moment But the beneficial effect will be shown when demand will for the reserve banks to withdraw their reserve money spring up for additional circulation, when, as a result, this from active employment? demand will be satisfied, not by paying out currency Earning capacity must never be considered the test of which may serve as reserve, but by issuing the Federal the efficiency of Federal Reserve Banks. Personally I Reserve note which has been created for this very purpose. should have felt heartily ashamed had all our banks, con- This process ought to be furthered by all member banks sidering the circumstances under which they began opera- and even nonmember banks, for it is being carried on for tions, earned their dividends in the past year. Such an their own protection. There is no such thing as the interearning, with all it implied, would have been a proof that est of a Federal Reserve Bank as against the interest of they had completely misunderstood their proper functions member banks. As yet, I fear, this is not sufficiently and obligations. It must be conceded, however, that only understood. The Federal Reserve Bank is the member men who have been trained in banking or who have given banks'; it is your bank, your fire engine, constructed for close study to the question will fully understand that your greater protection. You have paid for it and you are failure to earn dividends does not mean the impairment operating it. We are to be considered as your fire marof the prestige of a Federal Reserve Bank as it would that shals. It is our function to see to it that the machinery of a member bank. It can not, moreover, be denied that is in good order and that conditions are such that fires may the banking instincts of those in charge of the banks will not too easily occur or spread too fast and too far. . But always remain—if only subconsciously—sensitive on this yours is the engine, and yours is the fire. score. It is to your interest that your engine should not become For these reasons it may well prove advisable to reduce rusty or obsolete, but that it remain a well-oiled and the proportion of the paid-in capital of the Federal Reserve efficient instrument. In other words, Federal Reserve Banks so as to reduce, as far as possible, the conscious and Banks must remain active banks operating in certain subconscious pressure to force the funds of Federal Reserve fields with a varying degree,of intensity. Banks into actual employment at times when these funds If they are to exert+se. effectually the functions for should properly be withdrawn or held idle. Unless in which they have been created, access to these fields of times of great ease of money Federal Reserve Banks with- operations must be given them ungrudgingly. They can draw the bulk of their money from actual employment, not protect you unless they can secure for themselves the they can not possibly be prepared to have their funds strategic position without which they can not act as available at the turn of the tide when their beneficial regulators warding off interest rates both too high and too powers should make themselves felt. low and creating for the entire country a basis for a healthy It is apparent, therefore, that the smaller we can con- development on a safe and solid foundation. sistently make the dividend requirement and the operating It is to your interest to see the Federal Reserve Banks expenses of the Federal Reserve Banks the better pro- ag strong as they possibly can be. It staggers the imaginatected the system will be in time of trial. tion to think what the future may have in store for the But, on the other hand, we dare not consider the item development of American banking. With Europe's of expense when it involves questions of safety. One of foremost financial powers limited to their own field, with the heavy items of expense, for instance, is that of printing the United States turned into a creditor nation of all the Federal Reserve notes. A large supply of such notes, world, the boundaries of the field that lies open for ua are ready whenever required, is, however, a most fundamental determined only by our own power of safe expansion. safeguard, and the steady issue of Federal Reserve notes The scope of our banking facilities will ultimately be resulting in an accumulation of gold and gold certificates limited by the amount of gold that we can muster as the in the hands of Federal Reserve Agents will form an im- foundation of our banking and credit structure. Gold that portant element of strength in times of need. is carried in the pockets of the people, gold that accumu- The Federal Reserve Banks have now in the hands of lates as excess reserves in the member banks' vaults, does Federal Reserve Agents some $135,000,000 of gold and law- not afford the maximum service that the country is ful money which, in case of a growing demand for redis- entitled to expect. Excess balances and idle gold should count by the member banks, may be freed by a process of accumulate in the Federal Reserve Banks. They should redemption and substitution of commercial paper. This not control $300,000,000 of gold, as they do now, or $450,gold may be turned, as a free asset, into the vaults of the 000,000, as they will after another year, but they should Federal Reserve Banks and may thus form the basis for control a billion or two of gold. The stronger the Federal an additional note issue of $200,000,000. It has been Reserve Banks become, the stronger will be the country claimed by some of our critics that this process spells in- and the greater its chance to fulfill with safety and flation. Nothing could be more unwarranted than such efficiency the functions of a world banker. The basis of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 FEDERAL RESERVE BULLETIN". NOVEMBEH 1, 1015. this development must be confidence. Unless the mem- may be safe to say that they will find that many will then ber banks are profoundly convinced that their balances come in after the next period of anxiety. This is not are as safe with the Federal Reserve Banks as they are in meant aa a threat, but I am afraid it will be a physical their own vaults—besides being more useful and efficient impossibility to take them all in during such a period of there—and unless they are convinced that the Federal stress. Examinations take time, and many State banks Reserve Banks will not abuse their vast resources for will not look as strong during a critical period as they may inflation of credit or for the purpose of aggressively com- look to-day. Moreover, the Federal Reserve Banks will peting with the member banks, the full growth of the find it difficult, in fairness to their own members, then system, and with that the full growth of American bank- to burden themselves with banks that might add an ing, can not be developed. element of weakness, remembering that in times of I believe that I may say with confidence that both the sunshine and peace such institutions had refused to Federal Reserve Banks and the Federal Reserve Board contribute their share to the work of protecting the entire are fully alive to the duty and responsibility that rest upon community. them in this respect and that they will do their share of And now permit me to relate to you one last reminiscence the work as they trust not only the member banks but from ancient history. Aristotle, in defining the elements those not now members will do theirs. of liberty, gives us this definition: ' * One element of liberty Believing in the bankers1 sense of public duty and ani- is to govern and in turn to be governed. The other is, to mated by the motive of creating the broadest possible live according to one's inclinations." I do not think that foundation for the development of a strong and united any modern writer has ever given a more interesting or a banking system in the United States, the Board has gone more original definition of liberty. Liberty without reto the utmost limits of liberality in determining conditions striction is anarchy; submission to restriction arbitrarily for the admission of State institutions. In order to achieve imposed produces a slavish surrender of human rights. this aim, it found itself in the difficult position of having Between the two lies true liberty, which means the exerto concede to these State banks and trust companies con- cise of our own free will and powers within the limitations ditions which, in certain respects, give them a distinct which, for the protection of our liberty, we have agreed to advantage over national-bank members. It is the hope | impose and enforce amongst ourselves. &nd aim of the Board to see the powers of national banks Our Federal ReBerve System is to be considered from beralized; still, for the t ime being, it remains a fact that this point of view. For your own safety and liberty you State institutions entering our system are at an advantage. have created this law and created the necessary organiza- Such of them as are strong and conservative may come in tion for its enforcement. You have elected your governpractically with all the powers now enjoyed by them, ment and appointed your directors and officers. Do not and, in addition, may leave the system if they do not like think now of these administrative organs as something t. Still they he3itate. As Lucuilus said, "In times of imposed upon you by others, but only as something of prosperity it is hard to legislate," and Walter Bagehot, the your own creation. This system, permitting you *' to gov- British economist, expresses the same thought in slightly ern and in turn to be governed," as Aristotle puts it, is an more.modern language when he says: "Political economy expression and a safeguard of liberty. ia only an absorbing topic when a nation is, financially and You create your own traffic laws and clothe the traffic industrially, uneasy.11 policeman with authority. As long as we obey the law, we Let me ask those of the State institutions that are proud consider him a means of protection and we resent him as of their independent standing: Is it quite fair to let your a restraining influence, only when we exceed the speed neighbors pay for the expense of the fire department when limit. While the Federal Reserve System is in its early ? incase of fire, you know you will count on the benefits of stages, there must of necessity be a great deal of regulatory the general protection, and when, as a matter of fact, you work. But I sincerely hope that the writing of regulations enjoy every day the advantage of the greater security pro- will soon become an occasional or incidental function of the vided by your neighbors? Let me tell them, at the same Federal Reserve Board and that traffic rules in banking time, that insurance companies are generally willing to will have become no more unusual or irritating than the take risks while applicants are young and conditions raising of the hand of the traffic policeman. serene, but are not very eager to write new insurance when As for myself, I am not in accord with the school of the "quake" is on. Let me ask you, too, is it conservative thought that believes that law and government's sole funcbanking for State banks to reduce reserve requirements, tion is to regulate. I believe that the function of governas authorized by many State laws in consequence of the ment is not only to regulate but to construct, and I believe establishment of the Federal Reserve System, if these that I am expressing the feelings of my colleagues of the State banks do not enter the Bystem? Should not State Federal Reserve Board and of the men in charge of the banks remaining outside the system, as a matter of pru- Federal Reserve Banks when I say that we are looking dence, continue to observe the old reserve requirements? forward to the time when all our energies may be applied, The thought IB often expressed that "at the time of the not to regulation, but to helpful cooperation in the general next crisis the State banks will all come in." I think it j work of construction. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBEQ 1, 1915. FEDERAL BESBBVE BULLETIN. 355 Reserve Notes Not Frankable. Numerous other provisions of the Act, not necessary to be here set forth in detail, manifest Federal Reserve notes may not be sent the purpose of Congress to impose upon the through the mails under penalty envelopes or banks all expenses connected with its adminlabels canying the frank of the Federal Re- istration. Having reached the conclusion that the Fedserve Board. A ruling to this effect was first eral Reserve Act imposes the expense of shipmade by the Post Office Department. Desirment upon the reserve banks, I deem it uning to use every effort to obtain the privilege, necessary to pass upon the additional reason the Federal Reserve Board requested the Post assigned by your solicitor, viz, that these notes Office Department to submit the question of do not relate "exclusively to the business of the United States," and therefore, regardless of the franking Federal Reserve notes to the Attorney Federal Reserve Act, could not enjoy the benefit General. This was done the latter part of of the free carriage provision of the Act of August, and on October 5 the following opinion March 3, 1877 (19 Stat., 319, 335). of the Attorney General was sent to the Postmaster General, and by him forwarded to the Federal Reserve Board: Allotment of Bonds* 1 have the honor to acknowledge your letter Much interest h as been apparent on the part of August 24, 1915, wheiein you request my of Federal Reserve Banks and member banks opinion as to whether Federal Reserve notes of the system in the retirement of bonds under can be sent through the mails under penalty section 18 of the Federal Reserve Act. envelopes or labels by the members of the Federal Reserve Board. In response to certain of these inquiries there The solution of the question depends alone was sent by the Federal Reserve Board to the upon the correct interpretation of the act of Conference of Governors, opened in Minneapolis December 23, 1913 (U. S. Stat. L., Advance on October 20, a letter containing the results of Pamphlet, p. 251), commonly referred to as its consideration of the matter. the Federal Reserve Act, the material portion whereof reads: The principal points raised are as follows: "When such (Federal Reserve) notes have "1. In the allotment of bonds at the end of been prepared, they shall be deposited in the each quarter, wil e limitation of $25,000,000 Treasury, or in the sub treasury or mint of the United States nearest the place of business of be divided by four and the amount of bonds each Federal Reserve Bank^ and shall be held purchased by the reserve banks in that quarter for the use of such bank subject to the order of be deducted from the quarterly amount?" the Comptroller of the Currency for their delivery, as provided by this Act. * * *, and As to this the Board has had passed the folthe expenses necessarily incurred in executing lowing resolution: the laws relating to the procuring of such notes, Resolved, That until further notice, in requiring Federal and all other expenses incidental to their issue Reserve Banks to purchase United States bonds offered for and retirement, shall be paid by the Federal sale by member Banks under the provisions of section 18, Reserve Banks, and the Federal Reserve Board the Federal Reserve Board will not allot to any one Federal shall include in its estimate of expenses levied Reserve Bank in any one quarter more than one-fourth of against the Federal Reserve Banks a sufficient its pro rata share of the bonds to be purchased during the amount to cover the expenses herein provided calendar year under the provisions of this section. for.11 . • This language plainly imposes upon the Fed- "2. In case the applications received exceed eral Reserve Banks all expenses involved in the the amount to be allotted, will the allotments procurement, issuance, and retirement of Fed- be based upon the order of receipt of the applieral Reserve notes. As the shipment of these cations, or upon the pro rata share of each notes to the subtreasury, etc., and ultimately applying bank?" to the bank applying for them, is necessarily a step precedent to their issuance, it follows that It would seem that if the applications filed the expense of such shipment is one "incidental with the Treasurer exceed the amount to be to their (the notes) issue," and under the terms allotted in any one quarter, the allotments of the act must be borne by the banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

356 FEDERAL RESERVE BULLETIN. XOVEMBEE l, 1915. should be based not upon the order of receipt the open market. The Board has already ruled of such applications but rather upon the pro on two or three occasions that that proviso is rata share of each applying bank. The Act not intended to and does not apply to or restrict evidently contemplates that any bank which the purchase of Government bonds under the has its application on file 10 days prior to the provisions of section 14 of the Act. end of the quarterly period will be on an equal footing with any other bank which has filed a Conference of Governors, similar application, and the order in which such The fifth conference of Governors of Federal applications are received would seem to be im- Reserve Banks was held in Minneapolis, openmaterial as long as they are filed before that ing on October 20. There were present at the 10-day period. meeting, Governors Benjamin Strong, jr., Fed- "3. Will any mention be made of bonds eral Reserve Bank of New York; A. L. Aiken, securing circulation other than the 2 per cent V of the Federal Reserve Bank of Boston; C. J. Rhoads, of the Federal Reserve Bank of Phila- Bonds made eligible for sale by member banks delphia; J. B. McDougal, of the Federal Reserve under section 18 are not limited to 2 per cent Bank of Chicago; A. C. Kains, of the Federal bonds but rather to any United States bonds Reserve Bank of San Francisco; George J, which are securing circulation. That excludes Seay, of the Federal Reserve Bank of Richthe 3 per cent Panama bonds, series 1911, but mond; E. R. Fancher, of the Federal Reserve the 1908-1918 3 per cent bonds and also the Bank of Cleveland; Theodore Wold, of the 4 per cent bonds, loan of 1925, are eligible if Federal Reserve Bank of Minneapolis; R. L. they, as a matter of fact, are securing circula- Van Zandt, of the Federal Reserve Bank of tion. Dallas; C, M. Sawyer, of the Federal Reserve "4. To what date will the accrued interest on Bank of Kansas City; W. W. Hoxton, Deputy the bonds that are sold be figured V Governor of the Federal Reserve Bank of St. There is nothing definite in the Act to indi- Louis; F. W, Foote, a director of the Federal cate what date shall be fixed to determine the Reserve Bank of Atlanta; C. R. McKay, of amount of accrued interest on the bonds sold Chicago, with L. H. Hendricks and J. F, under section 18, but all provisions of that sec- Curtis, of New York. tion, as read together, would seem to justify the For the last two days Hon. Paul M. Warburg conclusion that the accrued interest should bb and Hon. W. P. G. Harding, of the Federal Refigured as of the date on which the lawful serve Board, were present at the conference. money to cover the purchase price of such This is the second conference of the governors bonds is deposited with the Treasurer of the that has been held away from the city of Wash- United States. ington, the first one having been held in Chicago last June. "5. If an application to sell bonds is not Governor Strong, who is chairman of the granted in full at one quarter day, will it be conference for the current year, presided at the considered as continuing in effect for the< balance at the next quarter day, and so on, until meeting. During the course of the four-day the sale is completed?" session about 70 topics were discussed. Among them were the following: The Board believes that banks whose appli- Directors' profits in dealing with member cations have not been granted in!full at one banks. 'quarter day should reapply. < ' ••:•:••, Appointment of representative to examine Mr. Strong raises again the question whether Federal Reserve notes sent to Washington for or not the limitation of $25,000,000 contained destruction, in the proviso of section IS prohibits the pur- .Periodic reports of reserves by member chase by Federal Reserve Banks of bonds in banks. - . ; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 357 Report of the executive committee of the GOLD SETTLEMENT FUND. conference, composed of Mr. Mc-Dougal, chairman, and Messrs. Aiken, Strong, Rhoads, Total deposits of the Federal Reserve Banks Fancher, and Seay. with the gold settlement fund have decreased Reports of conference of auditors and slightly since the issuance of the last Bulletin, accountants of the reserve banks held at the amount now held being $55,470,000. Dur- Washington last summer. ing the same period, however, the deposits of Report of a conference of transit managers the Federal Reserve Agents have been materiof the banks held in Chicago early in the month. ally increased and now stand at §21,200,000, as shown in the table giving summary of trans- Report of committee on method of.computactions for the account of Federal Reserve ing dividends. Agents from September 8 to October 21. Collections and clearances. Tables showing the amount of total clearings Gold settlement fund, daily settlements. to and including October 21, and the balances Functions to be exercised in behalf of member at the clearings are given below, also a table banks. showing net changes in ownership of gold held Cost of Federal Reserve notes. in the fund, from which it appears that such Cost of returning Federal Reserve notes to changes have amounted to 5.94 per cent of the bank of issue. total clearings. Retirement of national-bank notes and purchases of Government bonds. Amount of clearings. Reserves of member banks. Cooperation with national-bank examiners. Standard form 6i trade acceptance. cle T a o ri t n al gs. Balances. Domestic acceptances. Commodity rates. Previously reported, $428,600,000 $87,355,000 Settlement of— Advisability of limited open market trans- Sept. 30 , 25,739,000 6,542,000 Oct.7 30,640,000 8,060,000 actions. Oct. 14 24,400,000 4,120,000 Oct. 21 38,874,000 4,643,000 Discussions were also had with respect to the Total... 548,163,000 110,720,000 advisability of recommending the enactment of amendments to the Federal Reserve Act on Changes in ovmership of gold. the following topics: Date of transfer of reserves for member banks. Elimination of designation of capital for Feder B al a n R k e . serve . T de o p t o a s l i n ts e . t B O 1 a c 9 l t a . 1 n 5 1 c . 4 e , , Increase. Decrease. foreign branches of national banks. Direct authorization of domestic branches Boston 53,230,000 •52,620,000 $610,000 New York 23,000,000 3,734,000 24,266,000 for national banks. Philadelphia 6,950,000 2,339,000 4,611,000 Cleveland 2,580,000 4,597,000 *S2*6i7,'666" Par collections. Richmond 1,500,000 6,901,000 5,404,000 Atlanta 1—3,240,000 2,736,000 5,976,000 Domestic acceptances. Chicago 5,770,000 10,863,000 5,098.000 St. Louis 1,220,000 4,054,000 2,834,000 Loans on real estate. Minneapolis 1,400,000 5,125,000 3,725,000 Kansas City 3,330,000 2,748,000 552,000 Savings bank membership. Dallas* 1—1,250,000 6,062,000 7,312,000 San Francisco 5,930,000 3,683,000 2,297,000 The conference adjourned to meet in about Total 65,470,000 55,470,000 32,366,000 1 32,366,000 two months, probably in the city of Washington in order to be accessible to the Federal i The withdrawals of the Federal Reserve Bank of Atlanta and the Federal Reserve Bank of Dallas have exceeded the amounts of the gold Reserve Board. deposit made by them. . 11672—15 -3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

358 FEDERAL RESERVE BULLETIN, NOVEMBER 1, 1915. Gold settlement fund-nummary of transactions Sept. $0,1915, to Oct.21, 1915. Balance Gold. Transfers, Settlement of Sept. 30,1915. Sept. 30, last state- 1915, bal- Federal Reserve ment, ance in Bank of— Se 1 p 9 t 1 . 5 2 . 3, 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 S3,228,000 $1,082,000 $2,929,000 $1,847,000 $2,146,000 New York 8,789,000 $5,000,000 $5,600,000 3,757,000 9,256,000 5,499,000 4,432,000 Philadelphia 2, SOS, 000 "$5,*666,'666" $5,600,000 3,364,000 6,025,000 $1,661,000 5,069,000 Cleveland 4,813,000 433,000 480,000 47 000 4,860,000 Richmond 6,396,000 »900,000 230,000 876,000 2,095,000 1,219,000 6,945,000 Atlanta 2,483,000 12,000,000 604,000 1,820,000 1,216,000 1,699,000 Chicago 12,454,000 3,153,000 3,739,000 586,000 13,040,000 St. Louij 5 124,000 1,396,000 2,952,000 1,550,000 3,728,000 2.658,000 170,000 663,000 493,000 3,151,000 Kansas City 3,028,000 307,000 1,422,000 1,115,000 2,721,000 D Sa a n ll a F s rancisco 1 5 , 9 0 1 5 6 3 ,0 ,0 0 0 0 0 1,500,000 5 1 6 2 8 , , 0 00 0 0 0 1,3 5 5 4 1 9 , , 0 00 0 0 0 5 7 3 8 7 3 , , 0 0 0 0 0 0 4 2 , , 3 45 3 3 6 , , 0 0 0 0 0 0 Total 58,750,000 9,400,000 5,230,000 5,600,000 5,600,000 6,542,000 25,739,000 25,739,000 6,542,000 54,5S0,000 Balance Gold. Transfers. Settlement of Oct. 7,1915. Oct. 7, last state- 1915, bal- Federal Reserve ment, ance in Bank of— Se 1 p 0 t 1 . 5 3 . 0, 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 $2,146,000 $4,050,000 $5,161,000 $1,111,000 $3,257,000 New York 4432)000 $3,000,000 $872,000 $6,350,000 10,061,000 4,311,000 1,954,000 Philadelrjhla 5 069,000 3,650,000 2,078,000 3,497,000 Cleveland 4,850,000 $872,000 '138,'000 454,000 310,000 3,850,000 6 945,000 "»"$700"000" 1,187,000 2,159,000 972,000 7,217,000 Atlanta 1.699,000 875 000 1,724,000 849,000 2,548,000 13,040,000 5,132,000 6,203,000 1,071,000. 14,111,000 St. Lonls 3.72S, 000 2,630,000 3,934,000 1,304,000 5,032,000 Minneapolis 3,151,000 145 000 727,000 582,000 3,733,000 Kansas City 2,721,000 200,000 50,000 1,306,000 1,446,000 140,000 2,711,000 Dallas 1 336,000 180,000 493,000 2,126,000 1,633,000 5,789 000 2,453,000 57,000 455,000 398,000 2,851,000 Total 54,580,000 1,080,000 3,050,000 872,000 872,000 8,060,000 30,640,000 30,640,000 8,060,000 56,550,000 Balance Gold. Transfers. . Settlement of Oct. 14,1915. Oct. 14. last state- 1915, bal- Fed B e a ra n l k R o e f— serve O m 1 c 9 e 1 t n . 5 t . 7 , , 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 t l s. c T re o d t i a t l s. cr N ed e i t ts. fu c a n le n d a c r e i a n i f n g te . r Boston $3,257,000 $945,000 $3,384,000 $2,439,000 $2,312,000 New York 1,954,000 . $264,000 944,000 7,600,000 6,716,000 1,274,000 Philadelphia. 3 497,000 158,000 3,203,000 3,045,000 3,339,000 Z, 850,000 149,000 539 000 390,000 3,701,000 Richmond 7,217,000 i$900,000 1,620,000 3,022,000 $1,402,000 7,719,000 Atlanta 2,548,000 tl,000,000 1,198,000 1,213,000 15,000 1,563,000 Chicago 14,111,000 $264,666 1,576,000 3,406,000 1,830,000 12,271,000 St. Louis 5,032,000 1,153,000 2,150,000 997,000 6,029,000 Minneapolis 3 733,000 103,000 613,000 510,000 4,243,000 KansasCity 2,711,000 348,000 1,603,000 1,315,000 2,363,000 Dallas 5,789,000 *53O,666 467,000 1,072,000 605,666 5,804,000 San Francisco 2,851,000 4,000 595,000 591,000 3,442,000 Total 56,550,000 2,430,000 264,000 264,000 4,120,000 24,400,000 24,400,000 4,120,000 54,120,000 Balance Gold. Transfers. Settlement of Oct. 21,1915. Oct. 21, last state- 1915, bal- Fed B er a a n l k R o e f— serve O m 1 c 9 e t 1 . n 5 1 t . . 4, 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 a l n e n d a c r e i a n i f n g te . r $2,312,000 $300 000 $5,954,000 $5,962,000 $8,000 $2,620,000 New York 1,274,000 $5,000,000 $2,540,000 12,471,000 9,931,000 3,734,000 Philadelphia 3,339,000 21," 666* 1,021,000 5,439,000 4,418,000 2,339,000 Cleveland 3,701,000 $21,000 21,000 812,000 1,708,000 896,000 4,597,000 Richmond 7,719,000 i $1,100,000 2,992,000 3,277,000 285,000 6,904,000 Atlanta 1,563,000 964,000 2,137,000 1,173,000 2,736,000 Chicago 12,271,000 321,666 1,082,000 4,933,000 3,851,000 10,868,000 St. Louis 6,029,000 "2,*666,*666* 3,772,000 3,797,000 25,000 4,054,000 Minneapolis 4,243,000 129,000 1,011,000 882,000 5,125,000 Kansas City 2,353,000 34,000 997,000 1,348,000 351,000 2,748,000 Dallas 5,804,000 5550,000 34,666 398,000 1,180,000 782,000 6,062,000 San Francisco 3,442,000 13,000 254,000 241,000 3,683,000 Total 54,120,000 3,650,000 5,000,000 376,000 376,000 4,643,000 38,874,000 38,874,000 4,643,000 55,470,000 * Transfer to Federal Reserve Agent. *$500,000 transferred to Federal Reserve Agent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 359 Federal Reserve Agents' fund—-Summary of transactions Sept. 8,1915, to Oct. 21,1915. Week ending Sept. 9, "Week ending Sept. 16, Week ending Sept. 23, Week ending Sept. 30, 1915. 1915. 1915. 1915. Federal Reserve Apont at— Deposited. Balance. Deposited. Balance. Depositod. Balance. Depositod. Balance. Richmond $2,600,000 $2,000,000 $1,100,000 $3,700,000 $900,000 $4,600,000 Atlanta $2,500,666 $2,500,000 2,000,000 4,500,000 1,000,000 5,500,000 2,000,000 7,500,000 Total 2,500,000 2,500,000 4,600,000 7,100,000 2,100,000 9,200,000 2,000,000 12,100,000 Week ending Oct. 7, Week ending Oct. 14, Woelr ending Oct. 21, 1915. 1915. 1915. Federal Reserve Agent at— Deposited. Balance. Deposited. Balance. Deposited. Balance. Richmond $700,000 $5,300,000 $900,000 SG,200,000 $1,100,000 $7,300,000 Atlanta 7,500,000 1,000,000 8,500,000 S, 500,000 Dallas.. 500,000 500,000 500,000 1,000,000 4,400,000 4,400,000 Total .."..' 700,000 12,S00,000 2,400,000 15,200,000 6,000,000 21,200,000 DISCOUNT RATES. Discount rates of each Federal Reserve Bank in effect Oct. 28', 1915. Trade acceptances. M o a f n a 1 d tu 0 l r d e it s a i s e y . s s t M i o o n f a c 3 o t l 0 u v u r d e s i r a i t v i y 1 e e s 0 s , t M i o o n f a c 6 o t l 0 u u v r d s e i i r a t v i y 3 e e s 0 s . , t M i o o n f a c 9 o t l 0 u u v d r s e i i a r t v i y 6 e e s 0 . s , p l t i a A 9 u v p 0 r e g a e - d r l r s i a c t a o o y u n v c l s d - e k . r T in o c 6 lu 0 s d iv a e y . s, O i 9 n v 0 c e l d r u a s 6 i y 0 v s e t , o . m p C a o o p d m e it r - y . Boston New York..... Philadelphia... Cleveland Richmond 13 Atlanta 3 Chicago St. Louis , Minneapolis... Kansas City... Dallas San Francisco. 3 (*) i Rate for commodity paper maturing within 90 days. * Rate for commodity paper maturing within 30 days, 31 per cent; over 30 to 60 days, 4 per cent ;over 60 to 90 days, 4J per cent; over 90 days, 5 per cent. . Authorized rate of acceptances, 2 to 4 per cent. • • • .- On March 10 the Federal Reserve 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

360 PEDEBAL BESEBVE BULLETIK. NOVEMBER 1, 1015. INFORMAL RULINGS OF THE BOARD. Below are reproduced letters sent out from In view of the abnormal conditions prevailtime to time over the signatures of the offi- ing in Europe, the Board feels that the banks should be more than usually cautious in any cers of the Federal Reserve Board, which conforeign exchange operations entered into at this tain information believed to be of general time. As to open-market dealings in "domestic interest to Federal Reserve Banks and member bills," while the special rate authorized for this banks of the system: class of paper may prove in the future a helpful factor in developing its freer use, the Board has Open-Market Operations. been informed that the supply of desirable The Federal Reserve Banks are empowered paper is still very limited. There are also other under section 14 of the Federal Reserve Act, objections that may be urged against opensubject to rules and regulations prescribed market operations in "domestic bills" at this by the Federal Reserve Board, to— time. However, the Federal Reserve Board "purchase and sell in the open market, at recognizes that the Federal Reserve Banks have home or abroad, either from or to domestic the right to engage in open-market operations or foreign banks, firms, corporations or individ- in bills of exchange and that the decision uals, cable transfers and bankers' acceptances whether the Federal Reserve Banks should and bills of exchange of the kinds and maturi- engage in such open-market transactions rests ties by this Act made eligible for rediscount, entirely with them, severally, and not with the with or without the indorsement of a member Federal Reserve Board. Should the transbank." actions engaged in by any bank assume very large proportions or develop along lines which The Board has already issued regulations would make regulation appear desirable, the covering the purchase in the open market of bankers' acceptances, of United States Federal Reserve Board will exercise its right at Government bonds, and of municipal warrants, any time to regulate such transactions, but at but it has not yet issued regulations relating present the Board deems it best to leave each to "cable transfers" or to the purchase of Federal Reserve Bank free to exercise the au- "bills of exchange of the kinds and maturi- thority granted under section 14, with respect ties by this Act made eligible for rediscount." to bills of exchange, without governing or re- The original bill for the establishment of stricting regulations, it being understood, of Federal jReserve Banks, etc., permitted the course, that any Federal Reserve Bank; desirpurchase in the open market of "notes, drafts, ing to establish an open-market rate for doand bills of exchange," but in the bill as mestic bills of exchange by this Act made eligifinally enacted the words "notes and drafts" ble for rediscount will submit such rate to the were stricken out in section 14, although Board for approval and determination in the they are retained in section 13, which relates customary way. You are cautioned that no to discount operations for member banks. bill may be bought in the open market which, After careful study and investigation the even if indorsed by a member bank, would be Board has reached the conclusion, in which ineligible for rediscount under section 13. it is sustained by opinion of Counsel, that The Board appends opinions of Counsel bear- Congress beyond question drew a distinction ing upon the subject of open-market transin sections 13 and 14 between the several actions. forms of commercial paper, and that promissory Please call this letter to the attention of your notes, even though bearing an additional board of directors. indorsement, must be regarded as excluded OCTOBER 8, 1915. from open-market purchases under section 14. There remain then, as eligible for purchases under this section, "cable transfers" Election of Directors. and "bills of exchange" of two kinds, (1) Inasmuch as the term of office of one Class A so-called foreign bills of exchange, and (2) director and one Class B director of your bank domestic bills of exchange (other than bank- will expire December 31, 1915, arrangements ers' acceptances) drawn by one party on should be made to hold an election of directors another, as by a seller of goods upon the to succeed those whose terms expire, such new purchaser, such as have been classified by the directors to serve for terms of three years each. Board as "trade acceptances," either ac- For your information and guidance there are cepted or not accepted at the time of purchase. inclosed copies of forms used by the Reserve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER lf 1915. FEDERAL RESERVE BULLETIN. 361 Bank Organization Committee and letters of twelfths, and for each succeeding 6 months an instruction sent at that time setting forth the additional one-twelfth" procedure in such cases. The Board has fixed of 12 per cent of the aggregate amount of its November 16 as the date for opening the polls. demand deposits, and of 5 per cent of its time You should accordingly arrange to have printed: deposits. Similar language is used with refer- (a) Certificate of election of district reserve ence to the banks in reserve cities. elector. The "said date" referred to is the date offi- (b) Certificate of nomination for Class A cially announced by the Secretary of the Treasdirector. -» f .-i ':••''• ury for the establishment of a Federal Reserve (c) Certificate of nomination for Class B Bank in any district. That date was Novemdirector. . :r ber 16, 1914. These certificates, copies of :which are in- It therefore fol^ys that on November 16, closed, contain form of resolution to be adopted 1915, country banks and banks in reserve cities by the member banks. < A sufficient number of will be required to pay their Federal Reserve these certificates should be prepared and mailed Bank an additional installment of reserves. to each member bank in the group which elected The amount thus to be paid by them will be the director whose term expires on December for country banks one-twelfth of 12 per cent 31, 1915. It will be necessary, therefore, for of their demand deposits, as held on and after you, as chairman of the board, to group the November 16, plus one-twelfth of 5 per cent banks in your district in accordance with the of their time deposits; and for banks in reserve Act, following the general lines of the plan set cities one-fifteenth of 15 per cent of their demand forth in the circular of the Organization Comdeposits, plus one-fifteenth of 5 per cent of their mittee,'herewith inclosed. When these certime deposits. tificates have been returned by the banks the It is suggested that each Federal Reserve electors should be listed and the preferential Bank call the attention of each member bank ballot prepared. A copy of the form used in to the date upon which the transfer of reserves the first election is also inclosed for your above referred to is due, and that it arrange information. •" ; such additional details with 'member banks Under the provisions of section 4 this ballot as may seem desirable. The Board recomneed not show the name of the bank placing in mends that the member banks be called upon nomination any candidate, but a separate list to pay their own express charges unless there may, at the option of the chairman, be preis some good reason why the Federal Reserve pared showing by wk°m each candidate is Bank of the district thinks it best to bear these nominated. If this is done the ballot form express charges itself. The form in which payused will be somewhat simplified, since the ment is to be made may be suggested by the voting columns, showing the first, second, and Federal Reserve Bank in such circular or notice third choice of the elector, can appear on the as it may send out, and it will be well to make same page as the name of the candidate. some reference to the provision of the Act that Arrangements should be made to have the any Federal Reserve Bank may receive from ballots in the hands of the electors by=Novem- its member banks as reserves "not exceeding ber 1. The polls will be closed after 15 days one-half of each installment eligible paper as from November 16. described in section 13, properly indorsed and SEPTEMBER 30,1915. acceptable to the said Federal Reserve Bank* OCTOBER 1, 1915. Payment of Reserves, Inasmuch as the date when the next installment of reserves will be payable by member "Federal" Not Now Prohibited. banks to Federal Reserve Banks is approach- You are advised that there is no provision ing, the Federal Reserve Board has directed of the Banking Act or of the Federal Reserve the transmission of this letter for the purpose Act which prohibits the use of the word of securing uniform action with reference to "Federal" by a State institution as a part of such payments. its name. Section 19 of the Federal Reserve Act re- Section 5243 of the Revised Statutes of the quires each member bank not in a reserve or United States forbids the use of the word central reserve city to keep—* 11 National" as a part of the name of a bank "in the Federal Reserve Bank of its district not. organized under the national currency for a period of 12 months after said date two- laws, and the matter is now being considered Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

362 FEDERAL RESERVE BULLETIN. NOVEMBER lp 1U15. of asking Congress to amend this section so as the habit of carrying on some acceptance busito include the word " Federal." ness regularly and are not generally of such The Board is glad to have this information, as character and standing as to qualify their it may prove helpful in obtaining the desired acceptance as a "banker's acceptance," legislation. OCTOBER 8,1915. OCTOBER 4, 1915. Member Banks Not Receivers* Compensation of Deputy Reserve Agents. I wish to acknowledge receipt of your letter At a meeting of the Federal Reserve Board, of October 8, relating to the question of national held this morning, October 6, I was instructed banks acting as receivers. to inform the respective Federal Reserve The Board has received a number of inquiries Agents and directors of Federal Reserve Banks of this nature and has ruled that section 11 (k) that, where the compensation of the Deputy does not confer upon it the authority to author- Federal Reserve Agent is fixed upon a per ize national banks to act as receiver, the powers diem basis and no regular duties have been referred to in that section being limited to assigned to him by the Federal Reserve Agent trustee, executor, administrator, and registrar or by the respective boards of directors, no of stocks and bonds. payment of compensation should be made to OCTOBER 11, 1915. such deputy agents except for official services rendored to the banks at the request, in writing, of said Federal Reserve Agents or of said Clayton Act Interpretation. boards of directors. This ruling is not intended I wish to acknowledge receipt of your letter to prevent the payment of directors' fees for of October 12, relating to the question of your attendance at meetings of the board. eligibility to serve as a director of both a national bank and a savings bank organized OCTOBER 6, 1915, and operating under the laws of your State. Eligible Acceptors. You are advised that there is nothing in section 8 of the Clayton Act which prohibits I have received your letter of October 2, and a person who is a director and officer of a h&ve submitted the same to the Board. national bank with total resources exceeding Your letter contains the following paragraph: $5,000,000 from serving at the same time as a "The point on which he desires information director of a State institution with resources is, whether or not a firm, person, company, or less than that amount, provided, first, that corporation referred to in said subdivision (b) tho State institution is not a member of the must be engaged exclusively in banking, or the Federal Reservo System, and second, that the business of accepting or discounting before its State institution is not located in the same city acceptances can be handled by Federal Reserve as the national bank, or, if in the same city, Banks, In other words, a commission house that the city has loss than 200,000 inhabitants. at Fort Worth, as incident to their main busi- Under the facts as stated by you it is evident ness, are engaged in the business of accepting that you are eligible to qualify as a director of and discounting; such is not their sole business, both institutions mentioned in your letter. but they are engaged in that business in a limited degree. Now, the point upon which I OCTOBER 14, 1915. desire information is, whether or not the Federal Reserve Bank may handle acceptances of Window Advertising. concerns who do some accepting and discount- Your letter of October 6 has been received ing, but who do not engage exclusively in that and placed before the Board, and by it referred business, or in the banking or trust company to a special committee. The opinion was exbusiness?" pressed that member banks should be discour- On this point I am directed to cite to you the aged from placing signs on their windows provisions of the acceptance regulation, and to reading "Deposits have Government protecsay that the question of determining the eligi- tion," or "This bank has Government probility of an acceptor under the regulation is left tection." It was suggested rather that a sign to tne discretion of Federal Reserve Banks reading "Member of Federal Reserve System themselves. It is, of course, understood that offers depositors all the protection and facilities the Board would not wish to see concerns afforded by membership." regarded as eligible acceptors which are not in OCTOBER 15, 1915. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBKB 1, 1915. FEDEEAL BESEBVE BULLETIN. 363 LAW DEPARTMENT. The following opinions of counsel have been A mortgage, on the other hand, is more than authorized for publication by the Board since either of these, for it is in no way dependent the last edition of the Bulletin: ~~ upon possession and legal title vests in the mortgagee outright, the mortgagor retaining a Pledges of Collateral Security. mere equity of redemption. In the case of the Kediscounts held by a Federal Reserve Agent as securpledge, however, the general property or title ity for Federal Reserve notes, and gold order certificates deposited with a Federal Reserve Agent for the purpose of remains in the pledgor, the pledgee obtaining reducing the liability of a Federal Reserve Bank for its a specific property merely for the security of outstanding Federal Reserve notes, must be so indorsed the obligation. (Jones v. Baldwin, 12 Pick. as to enable such agent to realize on such securities or to (Mass.), 316; Thompson v. Dolliver, 132 convert such certificates into gold if necessary. Mass., 103; Parshalv. Eggart, 52 Bab. (N. Y.) JUNE 28, 1915. 367.) Sm: The following question has been re- There is au exception or qualification to this ferred to this office|for an opinion: general distinction between mortgages and pledges, regarding the transfer of title, in the (1) Must rediscounts hold by a Federal Recase of choses in action or negotiable instruserve Agent as collateral for Federal Reserve notes be indorsed payable to such agent? ments. (Jones on Collateral Securities and Pledges, 3d ed., p. 14.) This exception is a The term "collateral security" or "collatnatural result of the fact that a negotiable ineral" has been defined in Jones on Collateral strument usually can not be pledged without a Securities and Pledges to mean "a pledge of transfer of title necessarily resulting from the incorporeal property assignod or transferred transfer of possession. The'fact that the title and delivered by a debtor * * * to a does pass in such a case does not of itself make creditor as security for the payment of a debt the transaction a mortgage. (2 N. Y. 443.) or the fulfillment of an obligation/' In discussing this point in Gay v. Moss, 34 In consequence, section 16, in providing that Cal. 125, 132, the court said: a Federal Reserve Bank shall deposit collateral "The assignment was absolute in form, but with the Federal Reserve Agent as security for the thing assigned is a chose in action, and the Federal Reserve notes, impliedly requires that assignment and delivery are necessary to give notes and bills made eligible for this purpose the pledgee the full authority to readily control be pledged with the Federal Reserve Agent. it, and afford a prompt means of making the In order, therefore, to determine what steps pledge available. For these reasons the fact that the title passes in form by the assignment, must be taken to effect a valid pledge of the in case of a chose in action, does not necessarily securities deposited with the Federal Reserve make it a mortgage. It is a pledge * * *." Agent as collateral for Federal Reserve notes, On page 15 of Collateral Securities and it is necessary to discuss briefly the legal points Pledges, supra, it is stated that— involved in the law of pledges. "To make the pledge (of negotiable paper) A pledge is more than a lien. Both depend an effectual security, it is necessary that the upon a continuance of possession by the pledgee should have the legal title. * * "* pledgee or lienee and, generally speaking, title A transfer of the title to such incorporeal propremains in the debtor in both cases. But the erty is generally an essential part of the depledgee, unlike the lienee, has an implied livery of it in pledge. An absolute transfer of such property as security for a debt is a pledge power of sale, and this is the main distinand not a mortgage. The general property may guishing feature between the two. (Doane v m be regarded as remaining in the debtor, though Russell, 3 Gray (Mass.), 382; First National the legal title may be transferred to the Bank v. Harkness, 42 W. Va., 156, 164.) creditor." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

364 FEDERAL RESERVE BULLETIN. NOVBMBEK 1, 1915. It would seem, therefore, that a Federal Re- be subject to all equities or offsets which could serve Bank, in transferring eligible paper to a be made against the bank itself. Federal Reserve Agent as collateral security for Because of these objections, it seems a far Federal Reserve notes, should indorse such safer and wiser course to require Federal paper in some manner—to be discussed here- Reserve Banks to make a valid legal pledge after—such as will give to the agent the legal of paper deposited with the Federal Reserve right to realize directly on this security when- Agent as collateral security," and in order to do ever it is necessary. this, it is necessary that an indorsement be It is true that negotiable paper made paya- made which would make the note payable to ble to order, may be pledged by the delivery the Federal Reserve Agent, giving to him the of possession without indorsement, but in legal right to realize directly, and without such case the pledgee obtains a mere equi- danger of equitable defenses, on the security table security, good as between him and the in his possession. It is suggested, therefore, pledgor. The pledgor retains legal title, and that in any case where the paper is not inthough the pledgee could maintain a suit upon dorsed in blank by the member bank, the init in the name of the pledgor—and in some dorsement by the Federal Reserve Bank may States in his own name—nevertheless, in such be made in any one of the three following ways: action he would be subject to any equitable (1) The Federal Reserve Bank may indorse defense against the pledgor set up by the the rediscounts in blank; defendant. (2) It may indorse them to the order of the There is a further objection in the fact that Federal Reserve Agent; or the mere possession of such paper when not (3) It may indorse them, "Pay to the order indorsed to the Federal Reserve Agent is not of any bank or banker or to the Federal Resufficient evidence that he is holding it in serve Agent, or to ourselves/' pledge. In such a case there must be some It is to be noted, however, that if eligible further evidence of a contract of pledge before paper is tendered to the Federal Reserve Agent the holder could be declared a pledgee. (Jones as collateral security indorsed in blank by the on Collatoral Securities and Pledges, p. Ill; member bank which secured the rediscount, or Sharmer v. Mclntosh, 43 Nebr., 509.) In this if the paper is indorsed to the order of the Fedlatter case two notes were delivered to the eral Reserve Bank or the Federal Reserve pledgee, under exactly similar circumstances. Agent, it will not be necessary for the Federal One was indorsed, the other unindorsed. The Reserve Bank to make any further indorsecourt held that the indorsed note was a valid ment in order to vest the proper title in the pledge, under the facts, but that the unindorsed Federal Reserve Agent. In such case, hownote was not, because there was no evidence of ever, the list of rediscounts filed with the Fedan actual contract of pledge. There must be, eral Reserve Agent showing securities deposited of course, a contract, either expressed or im- as collateral for Federal Reserve notes should plied, in all cases. The general rule is that a contain a full description of all such items in mere delivery of the property, without any order that they may be identified, if necessary, writing, constitutes a valid pledge, the contract as a part of such collateral security. being implied in law, but tho delivery of an It has been suggested by some of the Federal .unindorsed negotiable note is not of itself Reserve Banks that they would prefer not to sufficient evidence. reindorse rediscounts p payable to the Federal A collateral agreement giving the Federal Reserve Agent, because such an indorsement Reserve Agent power of attorney to collect would indicate that this paper had been used on all paper in his possession would give him as the basis of a note issue; but, if the indorseonly the right to sue on tho paper in the name ment suggested above—that is, an indorseof the Federal Reserve Bank, and he would ment payable "to the order of any bank or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBEtt 1, 1915. FEDERAL RESERVE BULLETIK. 365 banker, or to the Federal Reserve Agent, or to Single Name Paper. ourselves/' be made, there will be no indication Any Federal Reserve Bank may, under the provisions on the paper that it has actually been used as of section 14 of the Federal Reserve Act, purchase acceptthe basis of a note issue and at the same time ances and bills of exchange of certain kinds and maturities in the open market, but promissory notes as disthe legal right due the reserve agent will have tinguished from bills of exchange, whether one or more been afforded. Under such an indorsement he names, are not eligible for such purchase. could collect direct on any rediscounts deposited with him for security of note issues. OCTOBER 8, 1915. SIR: The question has been raised whether Another question presented is: Federal Reserve Banks may, under the pro- (2) Must gold order certificates made payvisions of section 14 of the Federal Reserve able to the Federal Reserve Bank be indorsed to the Federal Reserve Agent by such bank Act, purchase single-name paper in the open when such certificates are deposited with the market. Federal Reserve Agent for the purpose of Section 14 provides in part that— reducing liability on outstanding note issues ? "Any Federal Reserve Bank may, under It is suggested that when gold order certifi- rules and regulations prescribed by the Federal cates which are made payable to the order of Reserve Board, purchase and sell in the open the Federal Reserve Banks are deposited with market, at home or abroad, either from or the Federal Reserve Agent for the purpose of to domestic or foreign banks, firms, corporations, or individuals, cable transfers, and reducing liability on outstanding note issues, bankers' acceptances and bills of exchange of the reserve bank should indorse such certifi- the kinds and maturities by this act made cates payable "to the order of the Federal Re- eligible for rediscount, with or without the serve Agent or to the order of ourselves." Of indorsement of a member bank." course, if gold order certificates are issued pay- Under the provisions of this section a Fedable "to the order of the Federal Reserve Bank eral Reserve Bank may purchase bills of or the Federal Reserve Agent/' no further in- exchange (that is, orders drawn by one perdorsement will be necessary. son on another to pay on demand, or at a It is true that these certificates are deposited fixed or determinate future time, a sum cerwith the Federal Reserve Agent, to be held by tain in money to order or to bearer), whether him until the Federal Reserve Bank offers in before or after acceptance, provided they are exchange its Federal Reserve notes, and it may of the kinds and maturities made eligible for be contended, therefore, that it is not necessary rediscount under section 13. to vest the legal title to such certificates in the It is clear, however, that promissory notes, Federal Reserve Agent. as distinguished from bills of exchange, are From a practical standpoint, however, he not eligible for purchase under section 14, may be called upon to transfer some part of the irrespective of the number of names thereon. gold represented by such certificates to tfo Respectfully, Treasurer for redemption of notes at the Treas- M. C. ELLIOTT, Counsel. ury, or he may be called upon to deliver to th To Hon. CHARLES S. HAMLIK, Federal Reserve Bank only a part of the gold Governor Federal Reserve Board. so held; and so he must be placed in a position to convert such certificates into gold or into gold certificates, in denominations that will en- Election of Directors. able him to meet either of these two contingencies. Any person coming within the inhibitions of Bection 8 of the act generally known as the Clayton Antitrust Act, Respectfully, who is elected a director at the annual election in January, M. C. ELLIOTT, Counsel. 1916, may serve in that capacity until October 15,1916. To Hon. CHAKLES S. HAMLIN, The vacancy occurring in such case on October 15, 1916, Governor Federal Reserve Board. may be filled by the remaining directors. 1167^-15 4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

366 FEDERAL EESBEVE BULLETIN. NOVEMBER l, 1915. OCTOBER 12, 1915. Section 5145, Revised Statutes, provides in SIR: In an opinion published on page 222 of part that directors of national banks shall be the August, issue of the Federal Reserve Bul- elected— letin this office discussed the following question 1' * * * at meetings to be held on such day which had been submitted to it for considera- in January of each year as is specified therefor in the articles of association. The directors tion: shall hold office for one year and until their "If a director of a national bank having de- successors arc elected and have qualified." posits, capital, surplus, and undivided profits Section 5146, Revised Statutes, provides in aggregating more than §5,000,000 is elected at the annual meeting in January, 1916, may he, part that— without violating section 8 of the act referred "Any director who ceases to be the owner of to, continue to serve until January, 1917, and the required number of shares of the stock, or at the same time serve as a director of another who becomes in any other manner disqualified, national bank?7' shall thereby vacate his place." Section 5148, Revised Statutes, provides It had been suggested that directors under such circumstances, elected in January, 1916, that— could serve until January, 1917, by reason of "Any vacancy in the board shall be filled by appointment by tho remaining directors, and that provision of the act, generally known as any director so appointed shall hold his place the Clayton Act, which reads as follows: until the next election." "* * * when a director, officer, or em- In view of these provisions it seems clear that ployee has been elected or selected in accord- directors who will be ineligible to serve after ance with the provisions of this act it shall be October 15, 1916, may be elected at the annual lawful for him to contiaue as such for one year meetings to bo held in January, 1916; that they thereafter under said election or employment." will become disqualified to servo on October 15, In the opinion referred to, however, after re- 1916, and that their offices will thereupon beviewing the general provisions of the act in come vacant and their successors may be apquestion, the conclusion was reached that a pointed by the remaining directors, who shall person who is a director or other officer of a serve until the next election. bank having aggregate resources of more than In the case of State banks or trust companies $5,000,000 will be ineligible to serve as a di- which are members of the Federal Reserve rector on the board of another national bank System, but which are not subject to the proor of a State bank or trust company which is visions of tho Revised Statutes above quoted, a member of the Federal Reservo System after successors to directors becoming disqualified on October 15, 1916, although elected at a meet- October 15, 1916, should be elected in according held in January, 1916. ance with the charters and by-laws of such From letters subsequently submitted to this associations and in conformity with any State office for consideration it appears that this laws which provide for filling vacancies on opinion has been interpreted to mean that no boards of directors of such State banks or trust bank can elect a director at the meeting to be companies. held in January, 1916, if, after October 15, Respectfully, 1916, such director will become ineligible, and M. C. ELLIOTT, Counsel. this specific question has been submitted to To Hon. CHARLES S- HAMLIN, this office for consideration. Governor Federal Reserve Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 367 Fiduciary Powers Granted. Intradistrict Clearing System. Applications from the following banks for Immediate credit at par has since October 4, permission to act under section 11 (k) of the 1915, been given by the Federal Reserve Bank Federal Reserve Act have been approved since of New York to drafts on the Federal Reserve the issue of the October Bulletin, as follows: Bank of Richmond, Va. Notice of this arrangement was given in the following letter: DISTRICT No. 1. Trustee, executor, administrator, and registrar of stocks and bonds: RICHMOND, VA., October 4 t First National Bank, Brandon, Vt. To members of the Federal Reserve Bank of Rich- Trustee, executor, and registrar of stocks and bonds: mond: Norway National Bank, Norway, Me. This is to advise you that, from this date, your drafts on this bank will be received by the DISTRICT No. 3. Federal Reserve Bank of New York from mem- Trustee, executor, administrator, and registrar of stocks bers of its collection system, until further notice and bonds: for immediate credit at par. Deposit National Bank, Dubois, Pa. Up to the present time drafts on Federal Peoples National Bank, Laurel, Del, Reserve Banks have been received by other Federal Reserve Banks subject to deferred DISTRICT No. 4. credit, according to a prearranged schedule. Trustee, executor, administrator, and registrar of stocks The deferred credit perioa between the and bonds: Federal Reserve Bank of New York and this First National Bank, Greenville, Pa. bank has been one day, being the time of McDowell National Bank, Sharon, Pa. transit. Trustee and registrar of stocks and bonds: The arrangement now made will have prac- German National Bank, Marietta, Ohio. tically the enect of giving the currency of New York exchange to your drafts on this bank. DISTRICT No. 7. We further advise you that by arrangement Trustee, executor, administrator, and registrar of stocks with the Federal Reserve Bank of New York, and bonds: checks and drafts on all Richmond banks and Franklin County National Bank, Brookville, Ind. trust companies, both members and nonmembers, will also be received by that bank from DISTRICT NO. 9. members of its collection system, until further Trustee, executor, administrator, and registrar of stocks notice, for immediate credit at par. and bonds: Very truly, yours, Aberdeen National Bank, Aberdeen, S. Dak. GEO. J.SEAY, Governor. DISTRICT No. 11. The total number of banks which have Trustee, executor, administrator, and registrar of stocks and bonds: joined the intradistrict clearing system is 2,456, Marshall National Bank, Marshall, Tex. shown by districts as follows: DISTRICT NO. 12, District No. 1 50 Trustee, executor, administrator, and registrar of stocks District No. 2 126 and bonds: District No. 3 120 First National Bank, Milton, Oreg. District No. 4 123 American National Bank, Pendleton, Oreg. District No. 5 91 First National Bank, Pendleton, Oreg. District No. 6 74 First National Bank, Portland, Oreg. District No. 7 116 Seattle National Bank, Seattle, Wash. District No. 8 365 Trustee, executor, and administrator: District No. 9 184 First National Bank, Harrisburg, Oreg. District No. 10 951 Executor and administrator: DistrctNo.il 96 First National Bank, Ontario, Oreg. District No. 12 160 Eegistrar of stocks and bonds: Nevada First National Bank, Tonopah, Nev. Total 2,456 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

368. FEDERAL RESERVE BULLETIK. NOVEMBEU 1, 1915. Additions to and withdrawals from the sys- DISTRICT NO. 8. tem since the publication of the lists in pre- Additions: First National Bank, Clarksville, Ark. vious issues of the Bulletin are as follows: National Bank of Arkansas, Pine Bluff, Ark. DISTRICT NO. 1. DISTRICT NO. 9. Additions: Additions: Old Colony Trust Co., Boston, Mass. Farmers National Bank, Aitkin, Minn. First National Bank, Greenfield, Mass. German-American Bank, Minneapolis, Minn. Withdrawals: Stockmen's National Bank, Fort Benton, Mont. First National Bank, Suffield, Conn. Commercial National Bank. Great Falls, Mont. Great Falls National Bank, Great Falls, Mont. DISTRICT NO. 2. Additions: DISTRICT NO. 11. First National Bank, East Newark, N. J. Withdrawals: First National Bank, Morristown, N. J. First National Bank, Jacksonville, Tex. Withdrawals: First National Bank, Mount Calm, Tex. National Bank of Westfield, Westfield, N. J. First National Bank, Omaha, Tex. First National Bank, Tuckahoe, N. Y. First National Bank, Sulphur Springs, Tex. DISTRICT No. 3. DISTRICT NO. 12. Additions: Additions: Elk County National Bank, Ridgway, Pa. Northern California National Bank, Redding, Cal. Withdrawals: First National Bank, St. Maries, Idaho. Farmers National Bank, Watsontown, Pa. First National Bank, Brigham City, Utah. DISTRICT NO. 4. Additions: Balances as Reserves. First National Bank, St. Paris, Ohio. Withdrawals: The question whether State banks which are Merchants National Bank, Butler, Pa, members of the Federal Reserve System may Spring Valley National Bank, Spring Valley, Ohio. count as part of their reserves balances carried with other State banks and trust companies DISTRICT NO. 5, Additions: has been under advisement by the Counsel of First National Bank, Rocky Mount, N. C. the Federal Reserve Board. First National Bank, Sumter, S. C. Counsel now holds that, although the Illinois law is silent on the question, the DISTRICT NO. 6. Additions: Auditor of Public Accounts has specifically First National Bank, Daytona, Fla. ruled that banks located in Illinois may count First National Bank, Statesboro, Ga. as part of their legal reserve, balances due from First National Bank, Waynesboro, Ga. other State banks or trust companies, and it Citizens National Bank, Dickson, Tenn. would seem to be entirely consistent with the Withdrawals: First National Bank, Aimiston, Ala. purpose and intent of the Act for the Federal Cordele National Bank, Cordele, Ga. Reserve Board to permit State banks or trust First National Bank, Sandersville, Ga. companies located in Illinois, which become National Bank of Tifton, Tifton, Ga. members of the Federal Reserve System, to First National Bank, Valdosta, Ga. count as part of their reserve balances due from First National Bank, Woodbury, Tenn. other State banks or trust companies for a DISTRICT NO. 7. period of three years from the establishment of Additions: the Federal Reserve Bank of Chicago. The Mills County National Bank, Glenwood, Iowa. Board has approved Counsel's opinion in the Withdrawals: Rush County National Bank, Rushville, Ind. matter. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL EESERVE BULLETIN. 369 REPORT OF FEDERAL RESERVE AGENTS' checks constitutes a restriction. Membership COMMITTEE ON CLEARINGS. in the collection system requires them to carry larger reserves, tho burden of which will bo felt (Presented to Federal Reserve Board Oct. 18.) increasingly as more and more of their reserves In this report it is suggested that each dis- are transferred to Federal Reserve Banks. trict be allowed to handle the clearing situation CHECKS ARE NOT COUNTED AS RESERVES AND in the way that seems best suited to meet its RESERVES PAY THE COST OF COLLECTIONS. local conditions. It allows an immediate credit and immediate debit basis, or a deferred credit One of the purposes of the Federal Resorve and deferred debit basis. It also suggests that System is to concentrate reserves and put an each Federal Reserve Bank may carry such end to the pyramided reserves which the portion of its float as it feels that the needs of National Bank Act has permitted. An inits member banks warrant. It also suggests evitable accompaniment of this reform is tho that the intradistrict and interdistrict systems elimination of checks-in-transit from the reof clearings can bo developed simultaneously. serves of member banks. Such checks, for- In addition to what the report sets out, per- warded by one bank to another for collection sonally, I believe: and counted in its reserve before either credit First. That whatever system is adopted by or remittance for them has been received, conthe respective Federal Reserve Banks, it should stitute a so-called u float" of large proportion^ be made mandatory on the member banks of the natural volume of which is often further each district. A positive stand on the part of increased by indirect routing and delayed each Federal Reserve Bank, it seems to me, remittance arrangements. will help the banks to overcome their spirit of In many cases tho same check-in-transit hesitation and inspire a spirit of confidence in serves as a reserve for both a country bank what is being done. and its reserve city correspondent. These two Second. That whatever system is adopted, classes of banks are able to use their balances the ultimate aim should be an immediate credit with reserve agents to compensate tho latter and immediate debit basis, as this, in my judg- for their services in collecting checks. Not ment, is the soundest banking method, one that only do they receive immediate credit for checks will correct the present evil of drawing checks they deposit with reserve agents, but checks against anticipated balances, and is less liable drawn upon them are seldom charged against to other abuses. their accounts; usually they are given several Yours, respectfully, days in which to remit for them. Receiving WM. MCC. MARTIN, immediate credit themselves for foreign items, Chairman Federal Reserve Agents' they in turn do likewise for their depositors, Clearing Committee. although a collection charge is sometimes made. In this way the circulation of checks outside the place of origin is encouraged and is ST. LOUIS, MO., October IS, 1915. constantly increasing. The desire to convert SIRS : As requested, the committee on clearsuch checks promptly into reserves has created ings of the Federal Reserve Agents has had the present transit and reserve problem. two meetings and respectfully presents the following report: SITUATION WHEN RESERVES WELL NO LONGER The extension of the present collection facili- PAY FOR COLLECTIONS. ties of Federal Reserve Banks is more of a reserve than a transit problem. In its transit The Federal Reserve Act gradually requires aspects it opens a privilege to member banks, the reserves to be transferred from present rebut in its reserve aspects the collection of their serve agents to the reserve banks. With this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

370 FEDERAL RESERVE BULLETIN, NOVEMBER 1, 1915. transfer the tangle of reciprocal collection ar- The first step has been taken within each rangements which the competition of half a cen- district. The need for an extension of the tury has developed will be unraveled and ended. present system across district lines and to in- Country and reserve city banks will, therefore, clude state bank items and noncash items will be brought face to face for the first time with become more pressing as more and more the problem of collecting their foreign items. reserves are transferred and member banks' Reserves with reserve agents will no longer ability to collect through reserve agents is provide and pay for their service. Clearly the correspondingly curtailed. The approaching service can not be had for nothing; some one transfer of reserves on November 16 suggests must pay the cost. Checks now count as the desirability of prompt action looking toreserves and the reserves carry the cost, but ward the establishment of a general system when the reserves have been completely trans- for the collection of all items. Such a system ferred this will not be so. The cost will fall should be planned on lines of unquestioned primarily on the bank which receives the for- soundness, assuring the most direct collections, eign item on deposit. If the bank is unwilling and guarding as far as possible against inflato bear the cost, it must obviously impose it tion, manipulation of domestic exchange, and upon the person depositing the foreign item the purchase of "float" by reserve banks. by either exacting a charge, deducting interest, Not only should existing unsound practices or compelling a larger balance to be kept. developed, under competitive conditions be Now that the cost of collecting foreign items eliminated, but a constant watch should be is to bo shifted from the reserve agent to the kept for new elements of unsoundness to which bank of original deposit, the latter must do new conditions may open the door. just what the former has done—analyze its The practice now inaugurated, of figuring accounts and requiro those who deposit foreign the reserves of member banks from the books items to keep compensating balances. of the reserve banks is sound and prevents checks in the mail from counting as reserve before they reach the reserve bank. It is, FEDERAL RESERVE BANKS MUST PROVIDE COLhowever, not thoroughly understood by the LECTION SYSTEM. member banks and as long as the Comptroller Clearly, if the Federal Reserve System figures reserve from their books it will be deprives member banks of their present col- difficult to change this long-established cuslection facilities, it must provide a substitute; tom. Consequently, the 'reserve banks find not only must it do this as a matter of both themselves now carrying a considerable amount justice and law, but it should do it as a matter of float, although they have announced that it of policy as well. For in a majority of the dis-is against their policy to do so. In the Federal tricts rediscounting has brought and probably Reserve Bank of New York during August, will bring but a few of the member banks into reserves of member banks of the collection active relations with their reserve banks. At system outside of Now York City averaged best the relationship through rediscounting is about one million dollars under the legal occasional. But the daily depositing of checks requirements. and drawing of drafts will foster a close and normal relationship between the reserve bank EFFECT OF CALCULATING RESERVES FROM BOOKS and its members and will be constant evidence OF RESERVE BANKS, both to them and to the public that the system If all member banks joined the collection is doing something for them; nor will the effect system and did business only with the reserve of this be lost on the State banks. bank, each country and reserve city bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL BESERVE BULLETIN. 371 would be required to increase the reserves car- THE CHECK IS NOT LIKELT TO BE SUPERSEDED ried to an amount sufficient to offset the un- BY THE BANK TRANSFER. collected checks which are now constantly in If remittances to distant points could be transit to its reserve agents and are counted by made by means of bank transfer checks, the it as reserves. problem of the "float" would be substantially It is clear that the assumption of such a eliminated, but the individual check is an float will entail a distinct hardship on the instrument of such convenience and value to country and reserve city banks. The hardship the user, carrying, as it doe3, its receipt for will be felt by them not only because it will rethe payment, that it is not likely to be superduce their loanable fund and their earnings, seded; in fact, through the use of voucher and but because it will handicap them in competing other receipt forms of checks, receipting of with State banks. It is probable that until bills and invoices is being quite generally they have had time to adjust themselves and abandoned. educate their depositors to carry their float the reserve banks will find it necessary to be somewhat lenient and share such portion of the EVENTUALLY THE DEPOSITOR MUST CARRY HIS burden as their resources will permit. It seems FLOAT. clear, however, that the development of the While it is undoubtedly sound to charge a Federal Reserve collection systems will indepositor for paying his checks which he sends evitably, by prompt collections, materially reout of town in preference to buying a bank duce the proportions of the present float. draft, yet member banks feel that this is an. impracticable charge to impose. The practice SUGGESTED METHOD OF ELIMINATING CHECKS even has some advantages to the member FROM RESERVES. bank, for its reserve is not reached by its Having for so many years been able to count depositor's check as promptly as by its own this float as reserve, it is probable that the draft. But for a depositor to draw against complete assumption of it by the member foreign items deposited, before the bank has banks can only be brought about by ruling of collected or received credit for them, is obviousthe Comptroller or by the imposition of the ly unsound. A bank may properly compenpenalty for deficient reserves authorized by sate itself for assuming the float which such a the Federal Reserve Act. The latter method depositor, by accepting foreign items in paywould doubtless cause great dissatisfaction. ment of bills, creates either by charging for The former is, therefore, to be preferred, but, in collecting such items or by requiring the our opinion, it should not be attempted until depositor to maintain an increased average the Comptroller has secured an agreement with balance sufficient to carry them. all or nearly all State bank supervisors to make a joint ruling, effective after reasonable notice. EXPLANATIONS WHICH SHOULD BE MADE. At the same time, a study might profitably be made of what should constitute "net deposits" * In developing the present systems and exin calculating reserves, for adoption uniformly tending them across district lines, it is sugby supervising authorities. It is our belief gested that each reserve bank should make to that the excessive reserves now held by the its member banks a frank statement of the banks make the present an especially favorable reserve requirements of the Act and of the time to endeavor to effect this reform. effect which the operation of the collection Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

372 FEDERAL RESERVE BULLETIN. NOVEMBER 1, 1915. system will have upon their reserves. Also credit for them a sufficient number of days to that it should explain to the member banks the allow them to reach the Federal Reserve Bank desirability of analyzing the accounts at least of the district of origin, plus the number of of those customers who deposit out-of-town days, if any, allowed by such Federal Reserve items and should offer its services to member Bank to reach the paying bank; and further banks to assist them in inaugurating such 5. That through mutual agreement, any work. Also that the proposed development Federal Reserve Bank may receive for immeand extension of the collection system should diate credit checks drawn on members of the be explained to the commercial, industrial, collection system of any other Federal Reserve and agricultural interests of the country Bank; and that whenever it is both practithrough appropriate organizations in order that cable and more direct, member banks in such they may understand the service which the collection systems may send direct to the Fed- Federal Reserve System is undertaking, largely eral Reserve Bank of the district of origin infor their benefit, and be prepared to bear their stead of to their own Federal Reserve Bank, proper share of the burden. 6. That the development of inter-district collecting need not await the completion of the RECOMMENDATIONS. intra-district collection systems, In view of the foregoing considerations, the 7. That in extending the collection system committee recommends: both within and across district lines uniformity 1. That as soon as practicable, and under need not prevail but instead there should be arrangements which will make clear and re- freedom and flexibility of rules and requirestrict its use to the purposes for which it was ments in order that each reservo bank may established, settlements through the gold set- best meet the conditions and needs of its memtlement fund should be made daily. ber banks. 2. That tho Federal Reserve Banks should 8. That each Federal Reserve Bank should soon arrange to undertake the collection of retain the right to change immediate credit notes and drafts, and of items drawn on non- points to deferred credit points, to assess upon member banks upon the most favorable terms members the cost of its collection service, to which can be arranged in the respective dis- make charges against its member banks for tricts. using their balances to create exchange on 3. That the Comptroller should be asked to other districts, and generally to make such endeavor to arrive at an agreement with all rules and regulations as will enable it promptly state bank supervisors that on and after a to safeguard its position and protect itself given date checks in the mail shall not bo against unsound developments. counted as reserve, Respectfully submitted. 4. That through mutual agreements, each WM. MCC. MARTIN, Federal Reserve Bank should receive checks FREDERIC H. CURTISS, drawn on members of the collection system of PIERRE JAT, every other Federal Reserve Bank, deferring Committee. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 373 GENERAL BUSINESS CONDITIONS. 1914, the largest volume with two exceptions during the past 15 years. General business and banking conditions are Exports for September to the port of Bosdescribed in reports made by Federal Reserve ton, 1915, $7,177,360; 1914, §4,185,524. Im- Agents for the 12 Federal Reserve Districts. ports for September to the port of Boston, Below are given in detail digests of conditions 1915, $12,246,533; 1914, $11,426,000. in the various districts substantially as reported Receipts of the Boston post office for the by Federal Reserve Agents. month of September, 1915, show an increase DISTRICT NO. 1—BOSTON. of $30,000 over the corresponding month last There is considerable improvement in comyear, and in increase of $130,000 over August, mercial activities throughout the district and 1915. . the reports coming from the different lines of Net operating revenues of the New York, trade are not only cheerful but decidedly New Haven & Hartford Railroad: August, optimistic for the future. While it is difficult 1915, $2,095,039; August, 1914, $1,632,239. to differentiate between the normal seasonal Net operating revenues of the Boston & demand and the unusual demand for European Maine Railroad: August, 1915, $1,270,930; deliveries, or between the direct and indirect August, 1914, $921,607. stimulus those orders have given to general The demand for monoy is below normal, and business, still the domestic demand is daily rates continue much tho same as during the becoming more and more a factor. previous month. There is a strong demand for Money conditions, on the other hand, show good mercantile paper with but a limited little if any improvement over the preceding amount in the hands of the brokers. Call month, and while the financing of the Angloloans, 3 per cent, with a slightly better demand French loan, which was freely subscribed for from tho brokers; time money, 3 J to 4 per cent; in this district, was expected to strengthen town notes, 2.10 per cent for shorter maturities money rates, as yet no apparent change has and 2.40 per cent to 2.50 per cent up to six manifested itself. While the loans and dismonths; bankers' acceptances, 2^ to 2% per counts reported by the Boston, banks show cent. . an increase over the preceding month, on the Tho woolen mills are busy, and the worsted other hand, there is shown a heavy increase in mills are doing a fair amount of business. The the surplus reserves. The statistics for the reports of the wool trade show that the demand month as compared with the previous month is a little better if anything than the previous are as follows: month, and prices are about the same. Excess reserve of Boston banks: The boot and shoe industry shows a marked Oct. 16, 1915 §78,831,000 improvement over the previous month. Or- Sept. 18,1915 : 56,027,000 ders are said to bo coming in freely from tho Due to banks: South and West, and many of the larger con- Oct. 16,1915 141,529,000 Sept. 18, 1915 125,194,000 cerns are not only running full time, but are Demand deposits: having more trouble filling orders than getting Oct. 16, 1915.... 324,482,000 them. Tho wholesaler and tho retailer have Sept. 18, 1915 282,551,000 been running with a low stock of goods on hand Exchanges for the week ending— for some time, and the present demand has cre- Oct. 16, 1915 203,064,782 . Sept.18, 1915 .- 144,404,908 ated a largo amount of orders to refurnish stock. * Oct. 16, 1914 134,223,120 The reports from the shoe business would indi- Building and engineering operations in cate that business in that trade is better than it New England for the 10 months to October has been at any time during the past 18 months. 13, 1915, 5138,808,000, as compared with Tho cotton-mill situation is much the same. $134,219,000 in the corresponding period of The fine-goods mills in New Bedford are doing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

374 FEDERAL BESEKVE BULLETIN. NOVEMBER 1, 1915. a good business, and those mills manufacturing can bankers are arranging to make a one-year coarse goods are showing a steady improve- 6 per cent loan of $25,000,000 to the Italian ment. Mills are buying cotton from "hand to Government, to provide, as in the case of the mouth," being loath to buy cotton at 13 cents Anglo-French loan, for purchases in this counwhen they had bought that commodity a year try and to stabilize exchange. ago at 7 cents. Those mills who bought heav- New York Clearing House banks on October ily of cotton last year at low prices are showing 16 held deposits of $3,194,620,000, the largest good profits, as the price of goods is not only amount ever reported by the association, and firm but is steadily going up, and it is felt that an increase of $1,269,266,000, or 65.9 per cent, it will not be long before the goods will advance since November 14, 1914. The loans and so that even at the present price of the staple a investments were §2,973,542,000, an increase satisfactory profit will be shown. of 8840,372,000, or 39,4 per cent, since The dye situation is still acute, and it is being November 14, 1914. Excess reserves were felt to a considerable extent by the print mills, $188,263,720, Compared with the statement many of whom have been obliged to refuse or- of August 28 last deposits have increased ders and reduce their operations. Wood dyes $384,998,000, loans, etc., $318,168,000, and and other substitutes are being used, but the excess reserves decreased $16,535,860. operations of such mills have been considerably Statistics for September, 1915, compared curtailed. While there is still some disturbance with September, 1914, show the following: from labor, it is largely confined to industries Exchanges through the New York Clearing working on foreign orders. House, $9,264,363,278, an increase of The bond houses are reporting a good demand $4,636,239,836. The Stock Exchange was for the higher grade of railroad bonds; in fact, closed a year ago. New York City building the demand is exceeding the supply, thus cre- permits, 28, for structures to cost $20,739,850—• ating higher prices. Savings-bank deposits in no change in number, but increased $15,630,800 the district are increasing, and savings banks in amount. New York State failures, 204, are purchasers of high-class securities, many of with liabilities of $2,543,609, a decrease of which are coming into this market showing evi- 25 in number and $9,231,300 in liabilities. dence of former foreign ownership. Exports of merchandise from the port of New York, $163,608,127, an increase of DISTRICT NO. 2—NEW YORK. $101,712,521, and higher than any previous During September industrial activity in- month. creased, wholesale and retail trade expanded, Record shipments of Canadian wheat are and collections improved. Reports almost going out through New York this fall. The uniformly good have been received from many latest totals of exports from the port are sections of this district. A correspondent sum- $1,120,386,269, against $670,836,494 for the marizes the general crop situation of New York same period last year. Imports of merchan- State as slightly below normal with prices in dise at New York, $85,617,505, an increase of general above average. The potato crop was $9,498,964. Imports, according to the latest very poor, and in some places peaches were left compilation, have reached a total of ungathered because of the low price. $740,218,702, against $760,664,577 for the The most important recent event affecting same period last year. Including the American financial affairs was the formal agree- $25,000,000 in sovereigns which arrived October ment between the British and French Govern- 19, imports of sovereigns and francs amounting ments and a large American syndicate for the to $41,670,000 have been received at New $500,000,000 five-year 5 per cent loan, which York since September 10. was underwritten at 96J, and is offered to the In September, $81,661,500 par value of public at 98, It is also announced that Ameri- bonds sold on the New York Stock Exchange, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL RESEBVE BULLETIN. 375 an increase of 38,600,000 over Augustj and applies to both castbound and westbound 18,497,797 shares of stocks, a decrease of traffic. There are practically no good-order 1,936,440 from the preceding month. The ars which are idle. speculative character of much of the trading Coal-mining operations continue to improve, has evoked some public comment. paper mills are busy, and glass industries are The heavy movement of exports causes reported to be in fair condition. Building continued weakness in foreign exchange. Ster- operations throughout the district are steadily ling moved within a narrower range between increasing, although the lumber trade is dull 4.66J and 4.73 since it steadied after the and is still much below normal. violent fluctuations of last month. Continen- At the port of Philadelphia, imports, that for tal rates were also steadier. Quotations for a number of months have shown a steady checks on October 21 were: Sterling, 4.66£; decline, are picking up because of importations francs, 5.90; marks, 82J; lire, 6.39. of iron and copper ores, nitrate of soda, and sugar. Exports continue in large amount, DISTRICT NO. 3—PHILADELPHIA. greatly exceeding the corresponding figures of Improved business conditions are reported last year. from nearly all parts of the district. A hopeful The general condition of crops is not as good sign is the report of increased sales by depart- as last month, and prices are not up to the ment stores, retail clothing, dry goods, grocery, average. Tobacco is of good quality, and good and other concerns dealing directly with the prices are anticipated, as it is reported that all consumer. While domestic trade is still below the old tobacco has been distributed. The normal, for the first time this year we have cattle trade is slow—the usual purchasing of reports of a distinct betterment. Most indus- live stock has been postponed because of the tries and manufacturing plants are busy, and in recent prevalence of the hoof-and-mouth discertain lines it is difficult to obtain merchandise, ease. Activity is looked for in the near future. deliveries being slow. The exceedingly small amount of rediscounts Labor is well employed, and from the point made by this bank for member banks is eviof view of the laboring man conditions look dence that money is very plentiful in this disgood for the fall and winter. trict, and this is emphasized by the statements The textile industry, one of the most impor- of the Philadelphia Clearing House Association, tant in this district, which a few months ago which show large increases in the excess reserves was the most depressed, now shows substantial of its banks. There is apparently no immedirecovery. In this district this industry in- ate prospect of any change in the low rates for cludes manufactures of all kinds of cotton, money prevailing here. woolen, and silk goods. It is estimated that plants are now being operated at from'70 to DISTRICT NO. 4—CLEVELAND. 75 per cent of their capacity, as compared with Unprecedented conditions in the steel trade 30 or 40 per cent some months ago. There is continue to be the big factors in influencing much complaint that owing to the high cost of all business throughout this district. The report raw materials manufacturers' profits are too of unfilled orders on the Steel Corporation small. The scarcity of dyestuffs 5s a serious books for September, showing an increase of detriment to this industry and is daily becom- 409,153 tons, is an indication of the remarkable ing more acute. Collections are reported good. situation in that industry. This means that Railroad shops are now operating on almost new business has kept up with the demands of full time, being in a better condition than at production—in fact, is exceeding it. One change any period since 1913. Substantial increase in over last month's report is that much of the the number of loaded freight cars being moved demand now in the steel trade is domestic, is reported, and this movement of loaded cars which has made contracting, even into next Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

376 FEDERAL BESEEVE BULLETIN. NOVEMBER 1, 1915, year, quite active.: Prices of several items have anticipate any sudden termination of the condibeen advanced $1 per ton in finished lines, and tions prevailing, they are nevertheless keeping an uncertain advance in semifinished lines. their accounts within bounds and insisting, on A barometer of industry and trade throughout customers keeping their affairs in good order, the country is the idle-car report for Septem- avoiding a very strong temptation to spread ber, showing a decrease of 100,000 cars. The out and take on new burdens. enormous tonnage in this district, accounts for Money continues easy practically throughout a large part of this decrease. the whole district, with rates unchanged from Traction travel in the down-town districts of last month. There is a feeling, however, that the large cities is again on the increase. Subur- the lowest rates were reached during the quarter ban-train service demand: is also larger, but ending September 30, and from this on there this gain is moderate. •••-. : . will be slightly better demand for money at a Building permits issued in the six large little improvement in rates. cities of the district show §7,252,791 against DISTRICT NO, 5—RICHMOND. $4,531,000 for September, 1914. Post-office receipts in five large cities reporting show an After watching the slow and at times halting average increase of 8 per cent over September, development of business during several months, 1914. Retail business continues to improve, it is now possible to report that this district is due no doubt to the large distribution of cash experiencing much improvement. through increasing pay rolls at the mills. While cotton is largely responsible, it can Conditions in the lake trade are reflected in" fairly be said that the improvement is attributorders for two 12,000-ton steamers by the able to the fact that intelligent and very general Pittsburgh Steamship Co., and another order curtailment of acreage, while naturally having for a similar-sized vessel by one independent a direct bearing upon the immediate price of the company. staple, accomplished much both immediately The soft-coal business and coke industry are and it is hoped prospectively, in that the value much more satisfactory, and it. is nearly a of diversification has been clearly demonstrated. seller's markot for the first time in several If the principle can be adhered to and the idea years. , further developed in the future, landowners in Shoe manufacturers, shoe jobbers, wholesale the cotton States will soon insist; not only with carpet and dry goods dealers, jobbers in milli- themselves but with, their tenants, that better nery, etc., report good business—in some cases average results will be had in diversification as much as 25 to 30 per cent increase. Knit- than in devoting their entire supply of energy goods and garment manufacturers report urgent to the cultivation of a single crop. It, therefore, demand for their output, taxing their capacity is true that while the change in policy has for early deliveries. resulted in high prices for a comparatively Correspondence from the southern portion short crop of cotton, it also is the fact that the of the district is distinctly optimistic. The acreage withdrawn from cotton has yielded greatest corn crop ever raised in Ohio and tobacco and grains of generous values, with the Kentucky is now being marketed. Farmers result that the farmers will remember the are inclined to hold their wheat for better present year as one of plenty. prices, and owing to woathor conditions it has Cotton has been moving freely, permitting been more profitable to uso some small grain generous liquidation. The movement is alcrops for feeding purposes, which has resulted lowing local jobbers and merchants to replenin largo purchases of live stock to fatten. ish, with confidence, [stocks which have been Collections since the 1st of September have carried at low-water mark, thus materially been good, and while dealers seo no reason to helping manufacturing lines. Many planters Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDEEAL EESERVE BULLETIN. 377 who have sold sufficient cotton to enable them |DISTRICT NO. 6—ATLANTA. to pay outstanding debts are now apparently Events of the past month have not only susdisposed to store and hold part of their crop for!tained but increased the confidence of the genprices which they hope to see even better than eral business public in the expanding activities those prevailing at the moment* The liqui- of almost all lines. This is not confined to any dation noted can be observed all along the particular section, but is the condition preline from a local bank or merchant to the more vailing generally throughout the Sixth Federal or less distant bank, jobber, or manufacturer. Reserve District. Tobacco has been of excellent quality and is With the continued favorable development selling at prices good for the growers. of the cotton market, the farmer appears dis- Vegetable and fruit packing, a large indus- posed to sell and meet his obligations, many of try in this district, after a long period of stag- which were extensions from last year. This nation reports conditions to be decidedly is being reflected through the wholesalers and better than was the case two months ago. jobbers by merchants paying off their obliga- There is noted a very much better tone to tions and the purchasing of increased stocks by business and a very marked change for the a renewal of their credit to its former status. better in the demand for goods, particularly The commercial travelers report a noteworthy from the cotton districts. increase in their sales, and say that merchants' Lumber, always slow to recover from stag- sales are double in comparison with the same nation, shows some real signs of improvement. time last year. Retailers are quite generally feeling the ef- Tho entire district has grain for sale this fect of changed conditions, while automobile year, with more cattle and hogs than any predealers, certainly in some sections, report more vious season. Cotton for the first time can be business at the moment and prospectively classed as a somewhat " surplus-monoy crop." than for several months, which fact, while in- The port communities were the most seridicating immediate comfort of mind, may also ously affected during the depression, but with suggest that the resolution prompting econ- the movement of cotton, naval stores, and the omy undertaken when in distress some months increase in lumber exports the conditions are ago may have been forgotten. reported greatly improved in the past 30 days. Cotton milling is prosperous and mills are The continued improvement in the business of running full time, taking cotton as offered lo- tho railroads is a reflection of the marked incally, though under no pressure either to buy or crease of business conditions in this district. sell. Coal is in good position and its great ton- Bank clearings in Atlanta show an increase nage is materially helping the railroads in car- of 42 per cent, New Orleans 33 per cent, Savaning for its territory. nah 92 per cent, with substantial increases in Labor seems to be fully employed and on a almost every large city in the district. Money basis satisfactory to all interests. Public-serv- is plentiful, and with the crops moving actively ice utilities, such as street railways, gas and the banks have not found it necessary to rediselectric concerns, report an enlarged use of count to any groat extent. their facilities. Banks, including most institutions located in DISTRICT NO. 7—CHICAGO. sections which are debtor more or less continu- The business situation in this district, as reously, are in a very easy position, many of them ported by bankers in the large centers in Indireporting funds to spare. ana, Michigan, Wisconsin, Illinois, and Iowa, ' From present indications, a very comfortable can be summed up in the words of one of them and promising industrial situation with us at to the effect that "affairs are seemingly gradthe moment is apt to continue to be in evidence ually gaining in strength from day to day, trade during the next three or four months at least. is giving some evidence of being on the increase Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

378 FEDEBAL BESERVE BULLETIN. NOVEMBER 1, 1915. and a noticeable spirit of returning and increas- substantial gains during the past 30 days, and ing activity appears to be abroad." there seems to be a somewhat marked feeling While a few lines are operating at less than of confidence among merchants. This is maninormal activity, there is evidence of more gen- fested by the adoption of a more liberal buying erally restored confidence and more activity in policy, which is having its effect upon both most lines. The weather conditions have been wholesalers and manufacturers. The number favorable and this undoubtedly has had a good of failures for the third quarter of this year influence in most branches of production and show an appreciable decrease as compared to distribution. the two previous quarters both in number of Increased demand has enlarged the iron and failures and total of liabilities. steel outputs and there has been a further de- Climatic conditions during September may crease in idle capacity and an enlargement in be said to have been favorable. The rainfall, the reeraployment of labor. generally speaking, was below the normal for the Inquiry discloses increasing business in month, but this was counterbalanced by the general merchandise, both retail and wholesale. excessive precipitation in August. The tem- Capacity production in the automobile and perature was somewhat above the normal, and automobile accessory business, which is very this seems to have aided the various crops. important in several cities in this district, con- The composite crop report of October 1 inditinues in evidence. Improved conditions are cates that agricultural conditions in all the reported in the general manufacturing lines States within this district are satisfactory, and and in both wholesale and retail trade at Chi- the harvest should be larger than either 1914 cago, Detroit, Indianapolis, Milwaukee, Des or the five-year average. Moines, and Peoria. Cotton was the only crop which did not gain With all of this increased activity the banks in condition during the month, and this staple in the large centers show unusually large and shows a considerable loss as compared to preincreasing deposits, with interest rates at a vious reports. The price, however, has gone low point. However, the banks in the smaller up, and from appearances the farmer will recommunities throughout the district seem to ceive an adequate return. Cotton and wheat be well loaned up at their usual rates. are both moving freely. The present reports A considerable percentage of the corn crop on the corn crop indicate an exceptional yield in this district is soft and will not grade up to in all of the States in this district. Illinois leads the market requirement. This will be fed to with an estimated production of 372,400,000 stock, probably resulting in increased loans by bushels. Reports indicate that the yield of the country banks to farmers to carry live stock oats, tobacco, potatoes, and other crops will for feeding purposes and will probably increase also be above the 1914 harvest and the five-year the rediscount operations at this bank from average. The supply of small-fruit crops and that source. truck-farm products continues plentiful, but Another feature of the cereal situation is de- the prices seem to have advanced somewhat layed wheat marketing. The result of this is in the past 30 days. that elevators in Chicago are bare of new wheat Banking conditions show little change. The and the houses which handle this product are demand for funds does not seem to be nearly as heavy depositors, instead of large borrowers, arge as usual at this time of the year, and rates which latter condition is the ordinary situation are correspondingly low. Commercial paper at this time of year. rates remain abnormally low, best names quoted at 3f and 4 per cent, and little paper DISTRICT NO. 8—ST. LOUIS. available. Business interests in this district show con- The improvement in general business conditinued improvement. The jobbing trade tions continues. There seem3 to be a feeling of throughout the district appears to have made confidence among all classes of business men Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 379 and farmers in this section which would seem DISTRICT NO. 10—KANSAS CITY. to indicate further activity. Financial conditions prevailing throughout District No. 10 have not materially changed DISTRICT NO. 9—MINNEAPOLIS. since the date of our last report. While the Rainy and unsettled weather during the first demand for money ha3 slightly increased, yet two-thirds of the month;had an adverse effect in some sections of the district deposits are on the marketing of grain at local points west increasing, and there seems to be an ample to the Rocky Mountains and greatly reduced amount of loanable funds in the hands of local the expected arrivals at the Minneapolis and banks. The total deposits in Kansas State Duluth terminals. Wheat receipts have not banks and trust companies September 15 were more than kept pace with the milling and other 16 J millions more than a year ago, and loans current demands. There has been difficulty in were 7 millions more. There are now on securing a milling supply that is dry and hard, deposit in Kansas banks, exclusive of national as the arriving wheat in many cases showed banks, about 3130,000,000. Deposits show a dampness. The Minneapolis mills have been shrinkage of about 81,000,000 since June stateproducing on an unusually active scale, and the ments were published, which is largely attribslow movement of the crop has been a handicap. uted to the lateness of the wheat harvest and Wet roads and interruptions to thrashing have the slow marketing of that crop. been general in the wheat belt, with the result Farmers are still inclined to hold their grain— that the movement of grain from the farm to wheat, oats, and corn—on account of prevailing local elevators has been cut down materially. prices, apparently believing that higher prices Improved weather recently has brought a will rule a little later. Killing frosts have not sharp increase in arrivals of wheat. Unless yet visited the district, and Nebraska and further rainy weather interferes, it is expected northern Kansas farmers still entertain the that the crop will now begin to move and that hope of a bumper corn crop reaching full ma- Minneapolis-Duluth receipts during the next turity. Cotton and cotton seed are bringing six weeks will be very heavy. the highest prices in many years. Receipts of An unfortunate feature of the situation relive stock, as well as prices, are below normal sulting from adverse weather is a material refor this season of the year. The horse and mule duction in the amount of fall plowing that is market, while not as active as a few months done or in progress. The period until cold ago, is above the average. j weather sets in is short. Many fields that The oil industry is very active on account of would ordinarily be plowed will not be touched the high prices prevailing. The milling industhis year. The remaining good weather will try is again becoming active, and lead and zinc be largely utilized for thrashing rather than mining is experiencing an era of great prosplowing. perity. Building operations throughout the Collections are showing some improvement district, and especially in the larger cities, are as a result of the marketing of the crop and very extensive, with the naturally resultant will further improve as grain moves in larger great activity in the lumber and building volume. Retail business is everywhere fair to materials trade. Wholesalers, jobbers, and good, with an excellent outlook. Manufac- retailers report active trade, with fair collecturing lines show little or no change. Whole- tions. Labor is generally employed throughout sale business is good, especially in the hardware the district. and grocery lines. DISTRICT NO. 11—DALLAS. The demand for money is not what it should be, and banks generally are well fortified Conditions throughout the eleventh district against all requirements. Rates hold about as continue favorable. There is a general improvement in all lines of business and an optibefore, with little or no change. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

380 FEDERAL RESERVE BULLETIN. NOVEMBER l, 1915. mistic feeling as to the fall months. At the inevitable result, and here and there volume prices now prevailing for cotton and cotton- is exceeding that of the previous year. seed products there is considerable move- Petroleum is one of the leading industries in this district, with a present annual production ment, which has contributed to a general of approximately 100,000,000 barrels. This liquidation. general condition would seem to assure a most Interior banks report reduction of their loans favorable situation, but as a matter of fact this and increasing deposits, with light demand for industry has been greatly depressed during the accommodations,. and interest rates easier and past few years and shows no present prospect below normal. for betterment. The production, approximat- Jobbing houses report a large increase in ing 250,000 barrels per day, about balances shipments and retailers duplicating orders. with current consumption, but approximately Collections show continued improvements, and 60,000,000 barrels are in storage and there is a in some channels are fully normal or better. considerable "shut-in" production; that is, In connection with the crop movement, wells whose output would be immediately during the past month this bank has made available if desired. daily shipments to its members of currency and silver averaging from $150,000 to $200,000. Some financially strong and ably managed The net reduction in the loans of this bank corporations are operating with moderate for the first 15 days of October was $1,750,000, profit, but many are not operating. Effort is all of this liquidation being the rediscounts of making to consolidate more than 100 of the member banks. smaller companies. If accomplished, the in- Live-stock interests throughout the district dustry would be in the hands of several large report excellent conditions, with plentiful for- corporations whose financial strength would age and feed crops, and good prices prevailing give greater stability to the industry while for all classes of stock. apparently assuring adequate competition. With the gathering and marketing of the Depression in lumbering continues. Mining cotton crop there has been an increasing de- is exceptionally active and profitable. The mand for all classes of labor. salmon-packing industry is in excellent condition. Trans-Pacific transportation has suffered DISTRICT NO. 12—SAN FRANCISCO. a tremendous loss in the withdrawal of the Pa- Crops, which in this district are of great cific Mail steamers. Although there are reports variety, have xhis year been large. All have of a speedy increase in the number of ships of not yielded equal profits, some possibly even the Japanese line, yet these will naturally seek showing losses, but the final result will give primarily the business of Japanese interests. fair average return for labor and capital em- The interruption of Panama Canal traffic is ployed. The localization of certain products obviously a considerable loss to the Pacific in this territory is interesting. Ninety per coast because of the higher rates by rail. The cent of. the lima beans of this country's com- railroads benefit accordingly.: However, the merce are grown near Ventura, Cal., because congestion of transportation - earlier predicted they mature there with the pods lying on the by many has not appeared. ground, while elsewhere poles are required to Tabulation of the last published statements support the vines. Eighty-five per cent of the of national banks shows large increases in deraisins produced in this country, amounting posits quite generally throughout this district. to approximately 115,000 tons this year, are It evidences conservatism that the increase in grown within 50 miles of Fresno, Cal. "cash and exchange" has been approximately There is an absence of pessimism. This equal to the increase of deposits, the loans havseems logical, in view of the certainty of large ing expanded very slightly. There seems to crops, coupled with present easy credit condi- exist an attitude of contented confidence, with tions. At least moderately good trade is an absence of speculative inclination. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 381 DISTRIBUTION OF DISCOUNTS BY SIZES discounted showing an increase from 8.4 per AND MATURITIES. cent in August to 13.7 per cent in.September. The total amount of commercial paper ex- The largest figures under this head are reported clusive of bankers' acceptances discounted by for the Atlanta district, where a relatively the Federal Reserve Banks during September large amount of cotton and sugar paper of was 314,405,000, compared with 812,233,700 in large denominations appears to have been dis- August and S13,23S,200 in July. The Sep- counted at the special 3 per cent rate for comtember total was about $1,000,000 in excess of modity paper. the June total, the largest monthly total pre- Small notes (in amounts up to $250) conviously reported. Largely increased discount stituted 22.8 per cent of the total number, operations for the month are reported by the though only slightly above 2 per cent of the Atlanta, Chicago, Kansas City, and Dallas total amount of discounts for the month. For banks. Of the total bills discounted 5301,400 the three southern banks, which handled about were trade acceptances and §846,000 commod- 80 per cent of the total number of small notes, ity paper, discounted at special, lower rates. the corresponding proportions were 26.7 percent About 80 per cent of the former class of paper of the total number and about 2.4 per cent of and over 88 per cent of the latter class are re- the total amount of all paper discounted by ported from the Atlanta district. The number them during the month. of notes discounted was 9,173, compared with The largest increase over the August figures 9,240 in August, 10,155 in July, and 10,734 in is shown for the amount of 60-day paper June. Of the total number of notes 67.1 per discounted, the increases being especially cent and of the total amount 65.4 per cent marked in the case of the Atlanta and Dallas represented the share of the three southern banks, while the amount of 10-day paper disbanks, as against 73.5 and 68.2 percent reported counted is less than half the amount discounted the month before. in August. The total of agricultural and live-stock paper with maturities in excess of 90 The average size of all notes discounted days handled by the banks, while larger than during the month was Sl,570, as against Sl,324 the month before, constitutes a smaller perin August, Sl,304 in July, and $1,249 in June. centage of the total monthly discounts. Over The September average ranges from $1,217 for two-thirds of this class of paper was handled the Boston bank to S3,069 for the Philadelphia by the Chicago, Dallas, and Atlanta banks. bank. The average for the three southern banks is about §1,529. The number of banks accommodated during Of the total number of notes . discounted the month was 762, compared with 693 in about 33 per cent and of the total amount over August and 796 in July, and constitutes less 52 per cent were notes in amounts from 81,000 than 10 per cent of the total number of member to $5,000, as against 29 and 54.4 per cent banks. Of the total banks accommodated 416, shown in last month's distribution. A large or about 55 per cent, were in the three southern increase is noted in the number and amount of districts, Dallas alone reporting 160 banks notes of over $10,000 in size, the proportion of (out of a total of 648) which availed themselves this class of notes to the total amount of notes of the discount privilege. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

382 FEDEBAL BESERVE BULLETIN. NOVEMBEE 1, 1915. Commercial paper, exclusive ojbankers' acceptances, rediscounted by each of the Federal Reserve Banks during the month of September, 1915, distributed by sizes. NUMBER OF PIECES AND AMOUNTS, [In thousands of dollars.] To $100. O to v e $ r 2 $ 5 1 0 0 . 0 O to v e $ r 5 $ 0 2 0 5 . 0 O to v $ e 1 r , 0 $5 0 0 0 0 . O to v e $ r 2 $ ,5 1 0 ,0 0 0 . 0 O t v o e r $ 5 $ , 2 0 , 0 5 0 0 . 0 O to v $ er 1 $ 0 5 ,0 ,0 0 0 0 0 . $1 O 0 v ,0 e 0 r 0. Total. Per cent. Ban*. Boston 1.4 22 9.0 21 16.5 15 25.3 33.7 5,4 75 91.3 0.8 0.6 New York 12 2.2 15.9 74 61.2 55 84.7 95.9 26.3 211 286.2 2.3 2.0 Philadelphia... 0.1 1.8 8.9 21 15.5 22 45.8 98.2 95.5 72.0 110 337.6 1.2 2.3 Cleveland .4 1.8 4.5 19 15.9 78 141.6 143.6 168.5 190 481.3 2.1 3.3 Richmond..,., 20316.8 425 75.8 506 204.9 468 386.0 453 799.6 3061,214.3 613.5 226.52,459 3,537.4 26.8 24.6 Atlanta 184 14.1 245 39.6 249 97.4 213 171.4 264 475.2 2—23 913.5 628,4 853.81,505 3,193,4 16.4 22.2 Chicago 10 .7 37 7.5 77 32.5 142 117.5 200 334.2 79 280.4 138.2 42.1 569 953.1 6,2 6.6 St. Louis.^.... .5 30 5.1 84 31.7 58 45.8 110 175.1 56 222.8 120.8 10.2 364 612.0 4.0 4.3 Minneapolis... .1 35 5.9 54 20.5 99 68.4 89 138.6 26 81.7 133,2 328 448.4 3.6 3.1 Kansas City... 58 4.6 192 33.8 212 78.4 195 144.5 192 320.7 82 318.1 . 126.6 311.1 968 1,337.8 10,5 9.3 Dallas 20315.7 385 64.4 L80.9 453 336.8 433 695.2 189 707.4 344.4 341.7 2,196 2,686.5 23.9 18.6 San Francisco- .5 26 4.3 33 11.9 24,0 44 71.0 22 86.5 120.0 121.8 198 440.0 2.2 3.1 Total. 679 53.51,41124141,780 696.51,80111,403.51,955:3,307.01,076 4, 359 2,520,8 112 1,979.2 9,173 14,405.0 100. OJ 100.0 PERCENTAGES OF AMOUNTS OF EACH CLASS TO TOTAL. Boston 1 5 9 9 18.1 27 7 36 9 5.9 100 0 New York R 5 5 21.4 29.6* 33.5 9.2 100.0 Philadelphia 5 ? 6 46 13.6 29.1 28.3 21.3 100.0 Cleveland 0 1 4 g 3 3 29.4 30.9 35.0 100.0 Richmond 5 ? 1 10.9 22.6 34.3 ^ 17.4 6.4 100.0 Atlanta 4 1 2 1 1 5.4 14.9 28.6 19.7 26.7 100.0 1 g 3.4 12.3 35.1 29.4 14.5 4.4 100.0 St Louis 1 g 5 2 7.5 28.6 36.4 19.7 1.7 100.0 * Minneapolis 1 3 4 A 15.3 30.9 18.2 29.7 100.0 Kansas City .... .3 2.5 5.9 10.8 24.0..... 23.8.... 9.5.... 23.2 100.0 Dallas 6 ? 4 ft 7 12.5 25.9 26.4 12.8 12.7 100.0 San Francisco .1 ^ o ?,.7 5.5 16.1 19.6 27,3 27.7 100.0 Total 1.7 4.8 9.7 23.0 29.2.... 17.5.... 13.7 100.0 Commercial paper rediscounted during September by each of the Federal Reserve Banksf distributed by States and maturities as of date of rediscount, [In thousands of dollars.] Papor Paper Paper Districts and States. o N f b m u a m n e k m b s e b . r er m N o a f o c u b d c m o a a m b n te e k d - r s . m 1 w P 0 a t i a d u t p h a r e i i y n n r s g . m d a w a a f y t i t e u t s h r r b i i 1 n n u 0 g t m d a w a a f y t i t e t u s h r r b i i 3 n n u 0 g t m d a w a a f y t t i e u t s h r r b i i 6 n n u 0 g t m a P a d ft t a a e u p y r r e s i 9 n . r 0 g p T c a m o o p t u e e a r r n l c r t c i e e a o d d l m i . s- - 30 days. 60 days. 90 days. District No. 1—Boston: Connecticut 73 Maine 70 4 4.9 29.2 1.5 35.6 Massachusetts 170 New Hampshire 56 3 4.0 10.2 14.2 Rhode Island 18 Vermont 48 2 9.9 18.1 9.0 4.5 41.5 Total 435 9 9.9 18.1 17.9 43.9 1.5 91.3 District No. 2—New York: New Jersey 131 2 9.2 3.8 5.0 18,0 New York 481 11 5.1 12.1 39.1 210,8 1.1 26a 2 Total 612 13 5.1 21.3 42.9 215.8 1.1 286.2 District No. 3-Philadelphia: 24 New Jersey 70 2 1.9 3.9 10.8 5.2 21.8 Pennsylvania.... ---.. .... .. , 533 12 68.5 209.6 • 14.4 23.3 315.8 Total 627 14 70.4 213.5 25.2 28.5 337.6 District No. 4—Cleveland: Kentucky 72 4 1.8 22.8 12.5 37.1 Ohio.: 376 5 8.4 92.8 90.1 14.5 48.1 253.9 Pennsylvania 301 10 1.6 15.7 154.7 18.3 190,3 West Virginia 14 Total 763 19 10.0 110.3 267.6 45.3 48.1 481.3 = = = == Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1015. FEDERAL RESERVE BULLETIN". 383 Commercial paper reuiscounted during September by each of pie Federal Reserve Banks, distributed by States and maturities as of date of rediscount—Continued. [In thousands of dollars.] Taper Paper Paper Districts and States. o N f b m u a m n e k m b s e b . r er m N o a f o c u b d c m o a a m b n te e k - d r s . m lO w P a i t a l i u h p a r e i y i n r n s. g m d a w a a f y t t i e u s th r r b i i 1 n n u 0 g t m d a w a a f y t t i e u s th r r b i i 3 n n u 0 g t m d a w a a f y t i t e t u s h r r b i i 6 n u n 0 g t m a P a d ft a t a e u p y r r e s i 9 . r n 0 g p T c a m o o p t u e e a r r n l c r t c i e e a o d d l m l . s - - 30 days. 60 days. 90 days. District No. 5—Richmond: District oi Columbia 14 83.4 16.2 84.7 184.3 Maryland 98 1.9 26.8 54.3 3.0 86.0 North Carolina 80 117.3 507.8 514.3 32.9 1,173.2 South Carolina 72 86.9 707.5 232.7 1,077.5 Virginia-.--. 137 15.6 102.9 557.8 244.2 13*. 9 934.4 West Virginia 105 11.7 32.1 38.2 82.0 Total 506 127 16.5 404.1 1,848.2 1,218.4 50.2 3,537.4 District No. 6—Atlanta: * Alabama 95 20.9 304.3 488.6 74.3 8SS.1 Florida 55 31.0 1H.6 30S.O 35.3 488.9 Georgia 115 51.9 395.5 2S8.3 76.0 811.7 Ivouisiana 5 25.0 302.3 25.0 352.3 Mississippi 9 1 7 8 2 3 5 2 . . 3 5 1 1 0 7 0 9 . . 0 5 1 1 6 4 3 5 - .0 7 6.4 2 38 7 2 0 . . 1 3 Tennessee Total.-*- 385 129 186.6 1,306.2 1,418.6 102,0 3,193.4 District No. 7—Chicago: Illinois 316 11.0 94.8 73.2 35.3 214.3 Indiana 197 3.5 16.5 30.0 57.0 107.0 Iowa 348 16.9 136.3 229.5 192.5 575.2 Michigan 75 8.3 4.6 12.9 Wisconsin 51 1.0 20.7 22.0 43.7 Total ' 987 32.4 276.6 359.3 284.8 953.1 District No. 8—St. Louis: Arkansas 3.0 33.6 67.3 46.7 150.6 Illinois 156 2.9 19.0 54.6 8C3 Indiana 61 3.0 3.0 Kentucky 68 8.0 18.6 21.3 47.9 Mississippi 17 7.7 24.2 1.2 33.1 Missouri 80 .8 17.3 31.6 37.4 14.0 10U 1 Tennessee 20 1.5 9.9 137.4 41.2 10U. 0 Total 462 53 5.3 71.7 284.6 225.4 25.0 612.0 District No. 9—Minneapolis: M M i i c n h n i e g s a o n t a ...m. 2 3 7 1 9 4.0 82.8 51.6 201.7 Montana 64 1.2 10.2 19.7 31.1 North Dakota * 152 9.8 14.6 43.2 4.6 72.2 South Dakota 115 1.5 16.1 9.1 16.0 42.7 Wisconsin 87 34.4 29.8 36.5 100.7 Total 728 43 50.9 153.5 171.8 72.2 448.4 District No. 10—Kansas City: Colorado 120 1.9 14.0 5.5 21.4 Kansas 217 4.2 200.5 224.7 85.9 33.1 548.4 Missouri 53 37.2 14.4 16.7 3.2 71.5 Nebraska. 210 "i.*6 15.8 100.5 92.6 25.5 236.0 N O e k w la h M o e m x a ico 30 9 8 43 8.7 39.9 202.9 159.3 49.7 460.5 Wyoming 33 Total 950 89 14.5 13.4 544.4 368.5 117.0 1,337.8 District No. 11—Dallas: Arizona Louisiana 27 9 85.6 124.0 144.0 3.2 356.8 New Mexico 4 2.5 23.8 10.7 11.3 48.3 T O e k x la as homa 5 4 4 2 5 1 1 2 8 9 1 2 0 7 8. . 4 5 9 9 8 4 6 . . 4 4 7 6 6 1 5 . . 2 1 2 3 0 2 6 . . 0 4 2,0 2 6 1 6 5. . 1 3 Total 648 160 224.0 1,228.6 981.0 252.9 2,686.5 District No. 12—San Francisco: Alaska 1 Arizona. 6.3 6.3 I C d a a li h f o o rnia • - 2 5 6 7 5 2 6 5 . . 1 5 6 7 9 . . 8 3 12 6 4 . . 4 2 3 7 5 . . 9 9 2 2 5 8 4 . . 2 9 N O e r v eg a o d n a 8 1 6 0 18.1 2.2 91.8 112.1 W Ut a a s h h ington • 2 7 3 8 *22*2 *8*7 "7*6 "*38."5 Total 527 71.9 94.3 230.0 43.8 440.0 H Includes New Orleans branch. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

384 FEDERAL RESERVE BULLETIN. NOTBMBEH 1, 1915. Commercial paper rediscounted during September by each of the Federal Reserve Banks, distributed by States and maturities aass ooff ddaattee ooff rrediscount—Continued. RECAPITULATION. fin thousands of dollars.] Paper Paper Paper Districts and cities. 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 r n 1 g 0 m d a a a f y t t e u s r r b i 1 n u 0 g t m d a a a f v t t e u s r r b 3 in u 0 g t m d a a a f y t t e s u r r b i C n u O g t m a P a ft a t e u p r r e i 9 r n 0 g c p o a m T p m o e t r e a r r l o ci - al Per cent. banks. dated. days. within 30 within CO within 90 days. discounted. days. days. days. No. 1—Boston 435 9 9.9 18.1 17.9 43.9 1.5 91.3 0.6 No, 2—New York 612 13 5.1 21.3 42.9 215.8 1.1 286.2 2.0 Vo g phlladplnhia G27 14 70.4 213.5 25.2 28.5 337.6 2 3 XOm 4—Cleveland 5 7 0 6 6 3 12 1 7 9 1 1 6 0 . . 5 0 1 40 1 4 0 . . 1 3 1,8 2 4 6 8 7 . .6 2 1,21 4 8 5 . . 4 3 5 4 0 8 . . 2 1 . 3,5 4 3 8 7 1 . . 4 3 f 2 3 4 . . 3 6 Vo 6 Atlanta 3S5 129 186.6 1,396.2 1,418.6 192.0 3,193.4 22.2 No 7—Chlcaeo ... 987 65 32.4 276.6 359.3 284.8 953.1 6.6 No, 8—St. Louis 462 53 5.3 71.7 284.6 225.4 25.0 612.0 (4.3 fjn Q Mfnneanolis 72S 43 50.9 153.5 171,8 72.2 448.4 13.1 No 10—Kansas City 950 89 14.5 293.4 544.4 368.5 117.0 1,337.8 fg.3 No 11 T) all as 648 160 224.0 1,228.6 981.0 252.9 2,686.5 18.6 No. 12—San Francisco 527 41 71.9 94.3 230.0 43.8 440,0 }3.1 Total for September 7,630 762 131.7 1,698.2 6,180.0 5,300.5 1,083.6 14,405.0 100.0 Per cent for September 10.0 .9 11.8 42.9 36.8 7,6 100.0 9.1 2.6 11.3 40.8 3G.9 8.4 100.0 Percent for July 10.5 .8 12.2 34.1 40.0 12.9 100.0 10.3 13,5 29.1 38.7 18.7 100.0 Per rent for Mav 9.4 13.4 31.4 35.6 19.6 100.0 Percent for ApriL 8.1 11.0 33.9 39.2 15.3 100.0 Amount of commercial paper held by each of the Federal Reserve Banks on Friday, OcL 1, 1915, distributed by maturities. (In thousands of dollars,] Paper Papflr Paper Paper maturing maturing maturing Paper Federal Reserve Bank. m wi a t t h u i r n i n 1 g 0 d a a f v te s r b 1 u 0 t d a a f v te a r b 3 u 0 t d a a f y te s r b 6 u 0 t m a a ft t e u r r i 9 n 0 g Total. Per cent. days. within 30 within 60 within 90 days. days. days. days. Boston 29.3 26.7 70.1 31.3 157,4 0.5 New York..., 68.1 117.2 235.5 38.7 459.5 1.5 Philadelphia.. 145.9 34.9 72.4 16.9 270.1 9 Cleveland 142.0 328.8 104.9 39.1 48.8 663.6 2.2 Richmond.... 1,323.0 2,318.4 3,135.2 925.7 16.3 7,748.6 25.8 Atlanta 636.0 1,516.4 2,409.2 1,098.2 230.1 5,8S9.9 19.6 Chicago 94.5 275.1 457.9 407.1 341.5 1,576.1 5.3 St. Louis 159.4 374.5 587.9 249.2 50.6 1,421.6 4.7 Minneapolis.., 124.2 287.2 626.6 363.0 161.4 1,562.4 5.2 Kansas City... 284.1 771.0 670.2 330.8 109.5 2,165.6 7.2 Dallas 863.5 1,721.3 2,789.2 1,110.1 441.0 6,925.1 23.1 San Francisco, 298, G 219.1 359.3 265.2 51.8 1,194.0 4.0 Total..,, 4,168.6 8,020.6 11,518.4 4,875.3 1,451.0 30,033.9 100.0 Percent 13.9 26.7 38.4 16.2 4.8 100.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBEE lf 1915. FEDERAL: RESERVE BULLETIN. 385 ACCEPTANCES. Bankers1 acceptances, by classes, held by the Federal Reserve Banks each week. Nonmember banks. Date. M ba e n m k b s e . r Trust State P b r a i n v k a s te . Total. companies. bonks. 1915. September 27 7,281 5,314 74 408 13,077 October 4.. ..... 9,000 4,808 132 343 14,373 October 11 8,957 5,118 116 134 14,325 October 18 9,015 4,802 116 199 14,132 Acceptances indorsed by member banks: Private bank acceptances, 12,000. Distribution of bankers' acceptances held by Federal Reserve Banks, according to schedules on hand Oct. 18,1915, 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 8 r 2 5 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. Per cent. I a M Tr e u m st b e c r o m ba p n a k ni s e .. s . . . 5 2 5 4 8 9 1 , , 0 4 9 4 1 0 15 6 4 0 51,2 4 6 4 5 6, , 4 1 6 1 9 8 17 6" 9 4' 5 1 3 , , 2 0 2 7 3 9 , , 9 2 1 9 6 2 5 18 7S22],3 7 2 0 9 5 , , 5 8 5 6 9 1 $ 9 9 4 7 6 9, , 0 1 8 7 5 8 1 S ,2 7 2 S0 5 , , O 7 O 89 0 6 2 0 4 S 5 $ 4 9 , , 8 0 0 1 2 4 , , 3 4 0 9 4 4 63.8 State banks 48,750 6677,550000 116,250 Private banks 24,841 59,364 114,859 199,0M 1.4 Total.. 301 904,122 222 1,770,951 25' 4,490,567 3,035,420 26 1,925,263 11 2,005,789 ?14,132.112 100.0 Percent 6.4 12.5 31 8 21.5 13.6J... Amounts of acceptances held by the several Federal Reserve Banks at close of business on Fridays, Sept. 24 to Oct. 22,1915. [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 nt t a - . c C ag h o i- . Lo S u t i . s. M ap i o n l n i e s. - C K s i a a t n y s - . Dallas. c F S i r s a a c n n o - . s T ys o fo t t e a r m l . Acceptances maturing within 10 days: gept 24 70 639 451 25 25 25 45 45 1,325 Oct 1 251 527 281 70 160 94 73 93 46 1 595 Oct 8 188 312 50 20 126 86 90 101 21 '994 Oct 15 763 1,259 219 192 301 192 83 114 SO 3,208 Oct 22 431 764 25 30 100 52 7 59 68 1,536 Acceptances maturing after 10 days but within 30 days: gept 24 954 1.523 280 237 436 236 116 128 146 4,050 Oct 1 1.170 1,649 246 208 401 193 96 114 168 4,245 Oct 8 - 1 355 1.777 221 337 335 157 32 80 172 4 466 Oct 15 ... 1.055 1,242 88 92 283 113 81 237 202 3,393 Oct 22 •• 965 736 178 115 610 87 93 212 195 3,091 Acceptances maturing after 30 days but within 60 days: Sept 24 785 1.488 160 145 610 140 96 271 363 4,058 Oct 1 1 241 1,265 259 129 617 122 96 237 307 4 273 Oct. 8 1,294 1,517 349 132 832 150 138 250 336 4998 O O c c t t 1 2 5 2 1 1 ,3 4 2 2 2 4 1 1 , , 2 3 8 7 2 8 6 4 0 5 6 9 2 1 0 5 9 7 100 7 4 3 5 0 2 9 9 4 4 6 7 2 9 8 8 2 2 2 1 5 9 7 6 4 4, 4 6 4 1 9 6 Acceptances maturing after 60 days but within 3 months: S O e c p t. t 1 24 • *••• 1,4 6 3 2 3 6 1 1 , , 2 4 6 4 9 3 8 8 6 9 3 9 1 1 0 6 7 4 1 1 0 0 0 0 3 3 5 7 0 4 1 9 3 3 3 5 5 9 2 5 5 1 1 9 8 6 4 3 4 , , 6 7 1 3 9 3 O O O c c c t t t . . . 2 8 1 2 5 1,2 6 < 0 7 2 1 2 7 1 1 , , 5 90 2 9 2 6 8 A 3 2 C 5 1 fl 1 9 7 3 8 100 2 3 6 9 9 3 1 1 in 7 1 n 1 1 1 6 A 0 5 d 1 6 8 ii 2 7 1 i 1 n 0 1 s 2 3 4 4 , , 3 2 4 5 6 9 Tota S O l e c a p c V t c l e 2 p 4 ta nces held: *••• 2 4 , , 4 0 3 9 5 5 4 4 , , 9 8 1 8 9 4 1 1 , , 7 6 5 8 9 5 5 5 7 1 1 4 1 1 0 0 0 0 1 1, , 5 4 5 2 2 1 5 4 4 9 2 4 3 31 1 7 6 4 4 9 9 5 5 6 6 0 0 5 5 1 1 4 3 , , 8 05 4 8 6 Oct.8 4,038 5,128 1,441 582 100 1,662 504 325 493 631 14,804 O O c c t t . . 2 1 2 5 3 3 , , 9 3 6 9 9 0 4 4 , , 9 7 9 8 1 7 1 1 , , 4 4 5 4 4 4 5 4 8 8 7 0 1 1 0 0 0 0 1 i; , 4 5 5 27 5 5 4 0 0 4 4 263 440 572 1 1 A 3 ,3 iy 3 ? 5 ft Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

386 FEDERAL BESERVE BULLETIN, JNOYBMBBB 1, 1915, Amounts of acceptances purchased by each of the Federal Reserve Banks from Feb. 19 (date of first purchase) to June SO, and for the months of July, August, and September, 1915, distributed by maturities. [In thousands of dollars.] B to o n s . - Y N o e r w k. d P el h p i h la ia - . C la le n v d e . - m R o ic n h d - . la A nt t a - . c C a h g i o - . Lo S u t. is. a M p i o n l n is e . - K C s i a a t n s y - . Dallas. c F S i r s a a c n n o - . TotaL Acceptances maturing within 30 days: Feb. 19 to June 30 109 141 61 1,032 July 43 43 August 103 42 314 September , Total. 642 194 101 141 103 39 61 Acceptances maturing after 30 days but within 60 days: Feb. 19 to June 30 235 1,543 310 226 119 4;093 July , 17 276 237 33 71 24 13 698 August 17 269 121 18 35 18 512 September , 38 136 23 17 310 TotaL 269 2,126 726 785 304 149 117 5,613 Acceptances maturing after 60 days but within 3 months: Feb. 19 to June 30 2,899 8,145 1,876 732 1,524 162 1,112 17,481 July '. 1 046 1,977 521 265 426 276 178 190 120 4,999 August... , 931 1 443 140 115 593 87 87 202 347 3,945 September , 756 1,557 994 107 343 84 61 51 4,039 Total. 5,632 13,122 3,531 1,219 713 1,077 1,675 30,464 Total accei Feb. 19 to June 207. 3,134 10,227 2,353 1,394 1,975 455 526 736 1,806 22,606 July 1,063 2,253 801 298 497 300 191 194 143 5,740 August , 987 1,815 303 170 628 141 116 247 364 4,771 September , 756 1,595 994 243 366 120 68 121 4,349 Grand total. 5,940 15,890 4,451 2,105 3,466 1,016 901 1,263 2,434 37,466 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL KESEBVE BULLETIN. 387 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, Oct. 1 to Oct. 22, 1915. RESOURCES. [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 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 an it s y a . s Dallas. F c S i r s a a c n n o - . sy T s t o t o t e r a m l . Gold coin and certificates in vault: octi ...: 14,186 133,071 7,584 11,883 5,fi94 6,059 26,638 4,139 3.3S3 4,572 6,262 227,274 14,717 133,952 11,377 5,917 6,074 26,727 2,8U 2,SS4 4,410 3,997 5,865 227,769 Oct. 8 14,OS7 129,903 11,428 11,269 5,958 6,076 29|461 2,376 2,227 4,408 3,997 5,766 226,956 O Oc c t t . . 2 15 2 13,909 132,752 9,191 11,015 5,835 29,445 3,925 1J463 4,111 3,999 5,391 227,005 Gold settlement fund: 2,146 5,032 4,260 6,645 1,699 13,040 3,72S 3,151 2,721 5,236 2,453 55,180 Oct. 1 3,257 1954 3,947 3,850 6,517 2,548 14,111 5,032 3,733 2,711 5,789 2,851 55,850 Oct. 8 2,312 6,274 3,339 3,701 7,219 1,563 12,271 4,243 2,363 5,864 3,442 58,620 ' Oct. 15 2,620 3,731 2,339 4,597 B,104 2,736 10,863 4,054 5,125 2,743 6,062 3.6S3 54,670 Oct.22 Gold redemption fund: 6 55 37 375 225 35 77 341 21 1,202 Oct. 1... 6 55 37 375 225 35 87 341 21 1J212 Oct. 8 6 55 37 375 225 3.5 87 341 21 1,212 Oct. 15 6 55 37 375 225 35 87 341 21 . l!2l2 Oct.22 Legal tender notes, silver, etc O .: ct.l 1 4 6 7 4 1 1 0 5 , ,3 1 6 0 3 7 2 2 , , 6 4 2 9 5 0 1, 9 00 9 1 1 8 9 7 0 1 1 2 4 3 S 1 1 , , 3 0 4 9 5 7 2 1 7 9 7 4 4 4 3 3 2 0 3 42 3 1 1 % 7 7 2 1 1 6, , 4 3 9 0 3 2 Oct.8 1 13,360 2,617 1,005 86 156 1,656 167 8 271 414 7 19,748 . Oct. 15 412 28,495 2,740 1,003 84 153 977 147 7 266 307 5 34,626 Oct.22 Total reserve: 16,502 148,265 15,315 17,134 13,001 8,106 41,023 8,179 6,568 7,802 9,511 8,743 300,149 . Oct.l 18,027 151,329 14,962 16,228 12,899 8,995 41 935 8,072 6,753 7,63S 10,551 8,744 306,133 Oct.8 16,400 149,592 17,421 15,975 13,fi38 8,020 43,3SS 8,607 6,508 .7,129 10,616 9,236 306,536 Oct. 15 16,977 165,036 14,307 16,615 12,532 8,949 41,290 8,161 6,625 7,212 10,709 9,100 317,513 Oct.22 Commercial paper: 157 459 270 664 7,749 5,S90 1,576 1,422 1,562 2,166 6,925 1,194 30,034 Oct. 1. 154 417 5S6 7,573 6,587 1,667 1 441 1,590 2,339 6,672 1,202 30,561 Oct.8 149 534 7,13S 6,273 1,833 1,499 1,568 2,464 6,242 1,031 29,403 Oct. 15 159 •218 607 6,995 6,475 2,025 1,476 1,611 2,6-19 6,320 1,013 29,937 Oct.22 Bankers' acceptances: 4,095 4,884 1,685 571 100 1,552 542 317 495 605 14,846 Octl 4,03S 5,128 1 441 582 100 1,562 504 325 493 631 14,804 Oct.8 3,969 4,991 1,454 587 100 1,527 504 297 480 647 14,556 O O c c t t . . 2 1 2 5 -. 3,390 4,787 1,444 480 100 1 455 404 440 572 13,335 United States bonds: 491 340 887 242 1,027 1,356 1,000 9,329 Oct.l 491 344 887 3,986 242 1,032 1,501 1,000 9,483 Oct.8 491 491 907 4 006 952 1,032 1,501 1,000 10,380 O O c c t t . . 2 1 2 5 491 491 932 4,031 952 1,082 1,501 1,000 10,480 Municipal warrants: 3,865 9,355 3,069 3,704 2,985 1,143 795 831 1,624 27,381 Oct.l 3,735 9,231 3,017 3,691 2,970 1,153 770 821 1,637 27,029 Oct.8 3,600 9,113 2,978 3,721 2,970 1,153 770 816 1 457 26,583 Oct. 15 3,219 8,513 3,663 2,940 1,140 793 809 1,379 25,381 Oct.22 Federal reserve notes, net assets; 8,923 5S4 272 2,161 633 527 1,904 15,378 Oct.l 349 9,089 307 320 2,170 1,072 558 1,658 15,523 Oct.8 329 8,872 621 193 2,174 199 913 1,930 15 236 O Oc c t t . . 2 1 2 5 378 9,781 547 154 2,176 746 1,898 15,650 Due from other Federal reserve banks, net: 1,171 4,093 793 4,575 1,559 585 147 1,924 1,182 Ul,194 Oct.l 512 2,539 745 967 2,336 1,628 493 1,087 1,603 17,723 Oct.8 533 1,318 142 1,236 807 214 1,231 1,316 661 753 796 1,153 110,160 Oct. 15 507 3,400 1,035 1,488 1,270 2| 483 2,344 ' 526 527 1,563 1,600 »12,342 Oct.22 All other resources: 979 178 266 193 176 206 64 481 121 82 3,326 Oct.l... 401 692 120 208 224 152 212 64 467 123 79 3,124 Oct.8 -.. • 418 391 458 125 64 362 122 310 63 503 117 85 3,018 Oct. 15 523 392 753 120 220 134 184 67 494 121 85 3,163 Oct.22 Total resources: 26.839 172,282 26,335 24,003 21,909 14,853 58,034 13,931 11,445 13,278 18,481 16,334 411,637 Oct.l 27,707 175,576 23,635 23,159 21,747 16,099 56.778 14,324 11,5S5 13,259 18,433 16,559 414,3S0 O O c c t t . . 1 8 5 2 2 5 5 , , 8 6 9 7 5 4 1 1 7 8 4 8 , , 6 9 6 4 9 8 2 2 3 4 , , 8 0 4 5 5 1 2 23 3 , T2 6 S 0 3 6 2 2 1 1 , , 7 1 4 8 7 4 1 1 4 6 , , 8 9 7 1 4 3 5 5 6 7 , ,2 5 5 3 1 4 1 1 4 4 6 , f 5 i 4 l 0 1 11 1 , , 7 8 1 1 3 2 1 1 3 3 , , 6 6 4 3 6 2 1 1 7 8 , , 7 7 7 1 1 3 1 1 6 6 , , 6 5 4 3 7 9 4 4 1 2 5 7 , , 5 S 7 S 2 O Oct.22 1 Items In transit, i. e.f total amounts due from, less total amounts duejto, other Federal reserve banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

388 FEDERAL RESERVE BULLETIN. NOVEMBER I, 1915, Resources and liabilities of each of the Federal Reserve Banks and of the Federal Reserve System at close of business on Fridays, Oct. 1 to Oct. 22,1915—Continued. LIABILITIES. [In thousands of dollars.] Boston. Y N o e r w k. d P el h p i h la ia - . 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 an it s y a . 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: Oct.! 5,134 10,957 5,267 5,944 3,358 2,417 6,632 2,782 2,489 3,023 2,764 3,931 54,728 *; Oct.8 5,181 10,987 5,267 5,944 3,358 2,418 6,633 2,782 2,491 3.023 2,765 3,932 54,781 *" Oct. 15 5,181 10,987 5,267 5,944 3,349 2,418 6,633 2,782 2,491 3iO25 2,765 3.933 54,775 W* Oct.22 5,181 11,047 5,266 5,945 3,349 2,413 6,634 2,783 2,491 3,025 2,767 3i 933 54,834 Government deposits: Oct 1 5,000 5,000 5,000 15,000 Oct.8 5,000 5,000 5,000 15,000 Oct. 15 5 5 , , 0 0 0 0 0 0 5 5 , . 0 0 0 0 0 0 5,000 1 1 5 5 , , 0 0 0 0 0 0 Reserve deposits, net: Oct l 21,705 152,737 21,008 18,064 7,378 5,394 51,402 11,149 8,956 9,144 5,484 12,403 324,884 Oct 8 22;520 157,806 18,368 17,215 7,430 5,515 50.145 11,542 9,094 9,000 5 519 12,627 326,787 Oct 15 20,714 161,355 18,578 17,339 7,529 4,647 5o;ei8 11,758 9,321 9,374 4,927 12,606 328,766 Fede O ra c l t .22 reserve notes, 20,493 170,920 18,785 17,661 7,591 5,671 49,900 11,841 9,222 9,438 6,208 12,714 340,444 net liability: Oct. 1 6,037 1,97S 1,111 5,233 14,359 Oct.8 5,820 3,097 1,159 5,149 15,225 O O c c t t .2 1 2 5 . .... 5 5 , . 0 7 9 2 S 7 2 3, , 7 7 0 3 2 8 37 1 1 , , 1 2 6 4 9 7 5 4 , , 0 7 7 4 9 3 1 14 4 , , 8 7 0 9 9 1 Due to other Federal roserve banks, net: Oct 1 6,092 Oct.8 4,404 77 Oct. 15 Oct 22 All other liabilities: Oct 1 2 466 136 64 2,666 Oct.8 2,379 139 69 2,587 Oct. 15 2,327 142 71 2,540 Oct.22 2,575 146 72 2,793 Total liabilities: Oct 1 26,839 172,2S2 20,335 24,003 21,909 14,853 58,034 13,931 11,445 13,278 18,481 16,334 411,637 Oct.8 27,707 175,676 23,635 23,159 21,747 16,099 56,778 14,324 11,585 13,259 18,433 16,559 414,380 Oct. 15 25,895 174,609 23,845 23.2S3 21,747 14,874 57,251 14,540 11,812 13,646 17,771 16,539 415,872 Oct °° 25,674 188,943 24,051 23,COS 21,1S4 lfi.iUS 56,534 14.001 11,713 13,632 IS. 718 10,647 427,880 Circulation of Federal reserve notes at close of business on Fridays, Oct. 1 to Oct. 22, 1915. |In thousands of dollars.] San Total 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 an it s y a . s Dallas. F ci r s a c n o - . sys fo te r m. Federal reserve notes issued to the bank: Oct.l 5,120 61,620 5,030 6,600 11,300 11,280 ,4,380 3,325 7,100 6,780 14,405 4,000 141,000 Oct.8 5,320 04,020 5,390 7 400 12,100 11,450 4,380 4,825 7,500 7,0S0 15,125 4,000 148,590 Oct. 15 5,320 65,520 5,830 7,600 12,700 12,550 4,380 4,825 8,300 7,080 15,285 4,400 153,790 Oct, 22 5,420 07,920 5,760 8,000 13,400 13,150 4,380 4 825 9,100 7,480 15,445 4,400 159,280 Federal reserve notes in the hands of the bank: Oct.l 3G9 9,198 584 272 363 1,802 2,161 992 527 354 192 1,904 18,718 Oct.8 349 9,359 307 320 280 853 2,170 1,572 558 406 436 1,658 18,268 Oct. 15 329 9,092 621 198 273 1,312 2,174 699 913 318 166 1 930 18,025 Oct.22 378 10,001 547 154 202 '48S 2,176 463 746 496 162 1,89$ 17,711 Federal reserve notes in circulation: Oct.l 4,751 52,422 4,446 6,328 10,937 9,478 2,219 2,333 6,573 6,426 14,273 2,096 122,282 Oct.8 4,971 54,661 5,083 7 080 11,820 10,597 2,210 3,253 6,942 6,674 14,689 2 342 130,322 Oct. 15 4,991 56,428 5,209 7,402 12,427 11,238 2,206 4,126 7,387 6,762 15,119 2,470 135,765 Gold O c a t n .2 d 2 lawful money 5,042 57,919 5,213 7,846 13,198 12,662 2,204 4,362 8,354 6,984 15f283 2,502 141,569 deposited with or to the credit of the Federal reserve agent: Oct.l 5,120 61,350 5,030 6,600 4,900 7,500 4,380 2,966 7,100 5,315 9,040 4,000 123,301 Oct.8 5,320 03,750 5,390 7 400 6,000 7,500 4,380 4,325 7,500 5,515 9,540 4,000 130,620 Oct. 15 5,320 65,300 5,830 7,600 6,700 8,500 4,380 4,325 8,300 5,515 10,040 4,400 136,210 Oct. 22 5,420 67,700 5,760 8,000 8,100 8,900 4 380 4,325 9,100 5,815 10,540 4,400 142,440 Carried to net liabilities: Oct. 1 6,037 1,978 1,111 5,233 14,359 Oct.8 5,820 3,097 1,159 5,149 15,225 Oct. 15 5,727 2,738 1,247 5,079 14,791 Oct.22 5,098 3,762 37 1,169 4,743 14,809 Carried to net assets: Oct.l 8,928 584 272 2,161 633 527 1,904 15,378 Oct,8 349 307 320 2 170 1,072 658 1,658 15,523 Oct. 15 329 8,872 621 193 2,174 199 913 1,930 15,236 Oct.22 378 9,781 547 154 2,176 746 1,898 15,680 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL RESERVE BULLETIN. 389 Statement of Federal reserve agents' accounts at close of business on Fridays, Oct. 1 to Oct. 22, 1915. [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 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 . - v C a i n ty sa . s Dallas. c F S is r a a c n n o. - sy T s f o t o e t r a m l . Federal reserve notes: Received from the Comptroller— Oct.l 11,800 63,700 9,2S0 8,000 12,800 13,600 3,400 9,000 8,000 10,800 10,000 175,820 Oct. 8 11,800 67,560 9,280 8,000 12,500 15,200 9,3S0 6,600 13,000 9,000 18,260 10,000 190,8S0 Oct. 15 11,800 70,520 0,280 10,000 14,100 16,000 9,3S0 6,600 13,000 9,000 19,580 10,000 199,260 Oct. 22 11,800 73,520 12,480 10,000 14,100 16,000 9,3S0 6,600 13,000 9,000 19,580 10,000 205,460 Returned to the Comptroller— Oct.l 300 310 120 745 Oct. 8 , 300 310 120 745 Oct. 15 300 310 120 745 Oct. 22 300 380 120 200 1,015 Chargeable to the Federal reserve agent— Oct.l 11,500 63,760 8,970 8,000 12,800 13,600 9,260 3,400 9,000 8,000 16,785 10,000 175,075 Oct. 8 11,500 67,560 8,970 8,000 12,800 15,200 9,260 6,600 13,000 9,000 18,245 10,000 190,135 Oct. 15 11,500 70,520 8.970 10,000 14,100 16,000 9,260 6,600 13,000 9,000 19,565 10,000 193,515 "» Oct.22 11,500 73,520 12,100 10,000 14,100 16,000 9,260 6,600 13,000 9,000 19,565 0,800 204,445 In the hands of the Federal reserve agent— Oct.l 6,380 2,140 3,940 1,400 1,500 2,320 4,8S0 75 1,900 1,220 2,320 6,000 34,075 Oct. 8 6,180 3,540 3,5S0 600 700 3,750 4,SS0 1,775 5,500 1,920 3,120 6,000 41,545 Oct. 15 6,180 5,000 3,140 2,400 1,400 3,450 4,8S0 1,775 4,700 1,920 4,280 5,600 44,725 Oct.22 6,0S0 5,600 6,340 2,000 700 2,850 4,8S0 1,775 3,900 1,520 4,120 5,400 45.165 Issued to the Federal reserve bank, less amount returned to • the Federal reserve a sent for redemption— * O O O O c c c c t t t t . . . . l 8 2 1 2 5 5 5 5 5 , , , , 1 3 4 3 2 2 2 2 0 0 0 0 6 6 6 6 1 5 7 4 , , , , 6 5 9 0 2 2 2 2 0 0 0 0 5 5 5 5 , , , , 0 8 7 3 3 6 3 9 0 0 0 0 0 8 7 7 , , , , 6 0 4 6 0 0 0 0 0 0 0 0 1 1 1 1 1 3 2 2 , , , , 3 4 7 1 0 0 0 0 0 0 0 0 1 1 1 1 1 1 3 2 , , , , 2 4 1 5 8 5 5 5 0 0 0 0 4 4 4 4 , , , , 3 3 3 3 S S 8 S 0 0 0 0 3 4 4 4 , , , , 3 8 8 8 2 2 2 2 5 5 5 5 9 7 7 8 , . , , 1 1 3 5 0 0 0 0 0 0 0 0 6 7 7 7, , , , 4 7 0 0 S S 8 8 O 0 0 0 1 1 1 1 5 4 5 5 , , , , 1 4 4 2 2 6 4 8 5 5 5 5 4 4 4 4 , , , , 0 0 4 4 0 0 0 0 0 0 0 0 1 1 1 1 4 5 4 5 1 9 5 3 , , , , 0 2 5 7 0 8 9 9 0 0 0 0 Amounts held by the Federal reserve agent: In reduction of liability on outstanding notes- Gold coin and certificates— O O O O c c c c t t t t . . . . 2 l 8 1 2 5 5 5 5 5 , , , , 1 3 3 4 2 2 2 2 0 0 0 0 6 6 6 6 7 1 3 5 , , , , 7 3 7 3 0 5 5 0 0 0 0 0 5 5 5 , ^ 8 7 0 6 3 3 0 0 0 6 7 7 7 , , , , 2 2 6 0 0 2 7 3 0 0 0 0 400 4 4 4 4 , , , 2 2 2 2 6 6 6 6 0 0 0 0 2 4 4 4 , , , , 9 3 3 3 6 2 2 2 6 5 5 5 9 7 8 7 , , , 1 3 5 1 0 0 0 0 0 0 0 0 5 5 5 5 , , , , 8 5 5 3 1 1 1 1 5 5 5 5 9 9 9 9 , , , ,0 5 5 5 1 4 4 4 0 0 0 0 4 4 4 , , , 0 4 0 0 0 0 0 0 0 1 1 1 1 1 1 1 2 0 9 6 0 , , , , 4 9 6 0 5 2 3 1 1 0 0 0 As security for outstanding notes— Commercial paper— O O O O c c c c t t t t . . . . 2 l 8 1 2 5 , L 2 2 2 > 7 7 2 2 0 0 0 0 6 6 6 5 , , , 1 4 0 3 0 0 0 0 0 0 0 0 3 3 4 4 , , , , 7 9 0 2 8 5 5 5 0 0 0 0 3 5 5 5 5 0 0 0 9 0 0 0 1 1 1 1 , , , 5 4 5 6 6 6 6 6 5 5 5 5 5 5 5 4 , , , , 4 5 2 9 2 S 4 0 5 5 5 5 1 1 1 7 6 7 7 , , , S 6 9 5 4 9 7 8 O 9 0 0 Federal reserve agent's credit balances: In gold redemption fun O O O O d c c c c — t t t t . . . . 2 l 8 1 2 5.> 3 3 4 7 3 0 0 0 0 1 1 1 1 2 2 2 2 0 0 0 0 5 5 4 4 0 5 9 2 0 0 0 0 Wit O O O O h c c c c F t t t t . . . . . 2 R l 8 1 2 5 . Board— 6 6 8 4, 0 9 7 1 ? 0 0 0 2 0 0 0 8 7 7 8 , , , , 5 5 5 5 0 0 0 0 0 0 0 0 1, 5 0 0 0 0 0 4,400 2 1 1 1 2 2 5 3 , , , , 7 4 0 5 0 0 0 0 0 0 0 0 Tota O O O O l: c c c c t t t t . . . . 8 2 1 l 2 . . 5 . . . . 5 5 5 5 , , , , 1 3 4 3 2 2 2 2 0 0 0 0 6 6 6 0 1 4 5 7 , , , , 6 0 5 9 2 2 2 2 0 0 0 0 5 5 5 5 , , , 8 0 3 7 3 9 6 3 0 0 0 0 6 7 8 7 , , , , 6 0 4 6 0 0 0 0 0 0 0 0 1 1 1 1 1 2 2 3 , , , 4 3 1 7 0 0 0 0 0 0 0 0 1 1 1 1 1 1 3 2 , , , , 2 4 1 5 8 5 5 5 0 0 0 0 4 4 4 4 , 3 3 3 38 8 S S 0 0 0 0 3 4 4 4 , , , , 8 3 8 8 2 2 2 2 5 5 5 5 7 8 9 7 , , , , 1 1 5 3 0 0 0 0 0 0 0 0 6 7 7 7 , , , , 0 7 0 4 S 8 8 8 0 0 0 0 1 1 1 1 5 4 5 5 , , , , 1 4 4 2 2 6 4 8 5 5 5 5 4 4 4 4 , , 0 0 4 4 0 0 0 0 0 0 0 0 1 1 1 1 4 4 5 5 8 1 3 9 , , , , 0 5 7 2 0 9 9 S 0 0 0 0 Memorandum: Total amount of commercial paper delivered to the Federal reserve ag O O O O en c c c c t t — t t . t . . . 2 l 8 1 2 5 2 2 2 2 2 7 2 7 0 0 0 0 6 6 5 6 , , , , 0 1 3 5 1 2 7 1 0 6 5 9 4 3 4 4 , , , , 7 0 0 2 S 5 5 5 0 5 1 8 3 5 5 5 5 0 0 0 9 0 0 0 j 1 1 1 1 , * , 4 5 5 * 6 6 6 - 6 8 8 5 4 5 5 , , , , 6 7 9 4 9 4 7 1 5 8 2 2 !"M."i 1 1 I 1 S 3 7 6 , , , , 0 2 7 9 - 6 S 6 3 7 6 9 3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

390 FEDERAL RESERVE BULLETIN. NOVEMBER 1, 1915. GOLD IMPORTS AND EXPORTS. Imports o gold, by customs districts, Jan. 1 to Oct. i5, 1915. I In thousands of dollars.] For week ending Sept. £4. Ore and base bullion 21 40 29 259 Bullion, refined 213 140 359 United States coin 11 12 Foreign coin 516 4,816 5,332 Total 746 21 140 4,856 sc 29 5,962 ===== For week ending Oct. t. Ore and base bullion 10 17 54 117 195 434 United States mint or assay office bars 208 208 Bullion, refined 28 1*207' 1,286 United States coin Foreign coin 4,038 4,038 Total 4,083 10 42 1,261 117 195 208 For week ending Oct. 8, Ore and base bullion. 54 64 58 101 12 .307 Bullion, refined 264 135 194 81 1,673 United States coin.... 1 2 Foreign coin 4,730 5,553 Total 5,049 137 1,855 | 252 182 12 7,536 For week ending Oct. 15. Ore and base bullion. 9 15 21 127 58 203 46 498 Bullion, refined 476 150 1,297 1,923 United States coin.... 3 6 Foreign coin 5,558 2,921 8,479 Total 6,046 171 4,345 ... 203 40 10,906 Jan. 1 to Oct. IS. Ore and base bullion 816 332 342 142 799 3,213 4,655 114 1,318 12,015 United States mint or assay office bars , 6,920 6,923 Bullion, refined 8,996 450 1,328 2,871 10,885 1,775 279 8,131 34,730 United States coin 48,390 ....119,869 22 12 49 86,557 154,920 Foreign coin 11,650 50 jj2200,G74 8 36,488 498 5,254 74,680 Total. 60,041 H355 363 792 1,478 3,144 48,194 114 1,318 106,863 3 283,268 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NOVEMBER 1, 1915. FEDERAL BESERVE BULLETIN. 391 Exports of gold, by customs districts, Jan. 1 to Oct. 15, 1915. [In thousands of dollars.] 1 For week ending Sept. £4. United States mint or assay office bats.. 21 Bullion, rtfined, domestic 5 United States coin.... 503 10 51S Foreign coin , 11 50 62 Total. 514 10 72 "COG For week ending Oct. 1. Ore and base bullion 27 2S United Statos mint or assay office bars.. 1 Bullion, refined, domestic 6 United States coin , 1,300 1,307 Foreign coin 75 Total. 1,300 34 1,417 For week ending Oct> S. Ore and base bullion.. United States coin.... Total. For week ending Oct. 15. United States coin.. 585 5S5 Foreign coin 15 15 Total. 600 600 Jan. 1 to Oct. 15. Ore and base bullion 16 250 270 United States mint or assay office bars.. Bullion, refined; Domestic 19 70 Foreign 20 United States 1,805 10 195 84 S 5 9,134 Foreign coin 3,975 134 ... 3 4,113 Total. 2 12,780 10 24 16 195 353 274 22 14 13,700 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX. Page. Page. Acceptances 381, 382 Informal rulings of the Federal Reserve Board.. 360-362 Address by Hon. P. M. Warburg 352-354 Open-market operations 360 Business conditions throughout the 12 Federal Re- Election of Class A and Class B directors 360 serve Districts 373-380 Payment of reserves 361 Commercial paper discounted by Federal Reserve Use of word " Federal" by State banks. 361 Banks 381-384 Compensation of Deputy Federal Reserve Conference of Governors held in Minneapolis 356 Agents 362 Discount rates in effect October 28, 1915 359 Eligibility of an acceptor under acceptance Discounts, distribution of 381-384 regulation 362 Earnings and expenses of Federal Reserve No authority granted member banks to act as Banks 349-351 receiver 362 Federal Reserve Agents' Committee on Clearance, Interpretation of section 8 of Clayton Act 362 report of 369-372 Window advertising 362 Federal Reserve Agents, date of meeting of 347 Intradistrict clearing system 367 Federal Reserve Agents7 accounts, statement of... 389 Interdistrict movement of Federal Reserve notes.. 351 Federal Reserve Banks: Law department 363-366 Pledges of collateral security 363 Earnings and expenses of . 349-351 Single-name paper 365 Resources and liabilities of 387,391 Election of directors under Clayton Act 365 Services performed for member banks.. 346,347 Meeting of Federal Reserve Agents, date of 347 Federal Reserve notes: Report of Federal Reserve Agents' Committee on Circulation of 388 Clearances 369-372 Decision of Attorney General re franking privi- Resources and liabilities of Federal Reserve lege 355 Banks 387,388 Interdistrict movement of 351 Services performed for member banks by Federal Fiduciary powers granted to member banks 367 ReserveBanks 346,347 Foreign agencies 348 State banks admitted to system 347 Franking of Federal Reserve notes, decision of Trustee, executor, etc., applications to act as, ap- Attorney General relating to 355 proved 367 Gold imports and exports 390,391 United States bonds, purchase, etc., of, by Federal Gold settlement fund 357-359 Reserve Banks 355 • Governors, conference of, at Minneapolis 356 Work of the Federal Reserve Board 345 o Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis