Federal Reserve Bulletin, 1916-01

FEDERAL RESERVE BULLETIN ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON JANUARY, 1916 WASHINGTON GOVERNMENT PRINTING OFFICE 1916 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BOARD. SX OFFICIO MEMBERS. CHARLES S. HAMLIN, Governor, FREDERIC A. DELANO, Vice Governor„ WILLIAM G. MCADOO, PAUL M. WARBURG. Secretary of the Treasury, W. P. G. HARDING. Chairman. ADOLPH C. MILLER, JOHN SKBLTON WILLIAMS, Comptroller of the Currency, H. PARKER WILLIS, Secretary. SHERMAN ALLEN, Assistant Secretary. M. G. 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. in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

TABLE OF CONTENTS. Page. Work of the Board 1 Eligibility of officers and directors of Federal Reserve Banks 2 Election of Class A, B, and C directors 3 Accommodations to Tennessee banks 4 Dividend declared by Richmond Federal Reserve Bank 5 Proposed amendments to Act 6 State banks admitted to system ... 6 Assessment for expenses of Federal Reserve Board 6 Gold settlement fund 9 Discount rates in effect 11 Informal rulings of the Board 12 Fiduciary powers granted 14 Intradistrict clearing system, additions to and withdrawals from 14 Circulars and regulations of the Board 15 Law department..... .. 17 Business conditions throughout the 12 Federal reserve districts — 29 Distribution of discounts 39 Acceptances 44 Federal Reserve Bank statements .. 46 Gold imports and exports 49 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BULLETIN VOL. 2 JANUARY 1, 1916 No. 1 WOUE OF THE BOARD. operations, and the Board expressed a willingness to provide such regulations as were neces- The work of the Federal Reserve Board dursary. Subsequent developments pointed to ing the month of December has been largely the wisdom of embodying the proposed reguconcerned with the closing .up of the operations lations in as definite a form as existing circumof the past fiscal year, with preparations for stances would permit, although as pointed out the annual report to Congress, and with disin the circular it still remains true that foreign cussion of possible and desired changes in the exchange transactions must depend upon the Federal Reserve Act. It has also been necescreation of agencies and other relationships sary to designate 12 class a0" directors whose abroad—a field upon which the reserve banks terms, in accordance with the provisions of the have thus far hesitated entering on account of law expired on the 31st of December. In the the unsettled conditions produced by the endeavor to give to the public a complete and European war. Since the issuance of the cirthorough account of the operations of the Fed- cular in question, two of the reserve banks have eral Reserve Banks, during the past year, each definitely undertaken open-market purchases Federal Reserve Agent has been requested to on a modest scale. submit to the Board a full and detailed review Two members of the Board on December 7 of the problems and policies of the bank to which and 8 visited the Federal Reserve Bank of Athe has been accredited. In order to secure a lanta and its branch at New Orleans for the moderate degree of uniformity and standardizapurpose of acquiring information regarding tion of method of treatment in these reports it business conditions in the South and of examhas been necessary to cooperate as closely as ining into the working of the first branch bank possible with these authors while not endeavorthus far established under the new system. ing in any way to limit the individuality of the The New Orleans branch was found to have method or treatment that might reasonably already justified its establishment, having more be possible in each case. The result has been than earned its operating expenses. to provide the basis for- absolute and thorough Meetings have been held during December knowledge of the conditions prevailing at each with representatives of the Governors of Fed- Federal Reserve Bank. eral Reserve Banks and with a committee rep- The Board has further developed its policy resenting the newly formed national bank secas to commercial paper by publishing a circular tion of the American Bankers7 Association, this and the accompanying regulation relating to session being held at the request of the bankers open-market operations (Circular No. 20). In for the purpose of considering amendments to this are covered the conditions under which be recommended to the Federal Reserve Act. A purchases may be made of foreign and domestic more complete account of the session with the bills of exchange and the purchase and sale of committee of the national bank section is elsecable transfers. The circular constitutes the where given in this issue. further embodiment and development of the Preparations for the transfer of Government policy expressed in the Board's letter to Federal deposits to Federal Reserve Banks on and after Reserve Agents on October 8, wherein it was January 1, 1916, and for the undertaking by the held that the several Federal Reserve Banks banks of duty as fiscal agents of the Governpossessed the right to undertake open-market ment have been continued during the month. 1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDEKAL RESERVE BULLETIN. JANUARY 1,1916. Representatives of the Governors of the banks Resolved further, That copies of this resoluhave conferred with a committee of the Board tion be sent to every member bank and Federal Reserve Bank, and to all directors of Federal and the representatives of the Treasury Depart- Reserve Baiiks. ment and forms have been prepared for use in While the Board is of the opinion that the connection with the handling of the business to policy outlined in this resolution should become be transferred to the banks. effective at once, directors of Federal Reserve Two applications for admission to member- Banks elected prior to the date of its adoption ship in the system have been favorably acted will not be required to resign their positions as upon as follows: Merchants and Farmers Bank, such directors until the end of the term for which they were elected. Cheraw, S. C.; Guardian Trust & Savings Bank, Toledo, Ohio. Several other applications are The foregoing resolution was immediately still awaiting action. In this connection it given to the press and was subsequently sent may be noted that the total number of conver- out to member banks as circular No. 21, the sions of State banks into National banks during text thereof appearing in this issue of the Fedthe year 1915 amounts to fifty-thrse. Indica- eral Reserve Bulletin on page 14. tions point to the belief that the entry of State On December 28 the Board adopted the folinstitutions into the Federal Eeserve System lowing resolutions: will proceed more rapidly, for the present at Resolved^ That as the future policy of this least, through nationalization than through the Board, national-bank examiners shall not hereacceptance of membership under State charters. after be elected or appointed to directorships in Federal Reserve Banks. Resolved, That national-bank examiners shall not hereafter be appointed or act as Federal Reserve or Deputy Federal Reserve Agents of Fed- Eligibility of Officers and Directors of Federal eral Reserve Banks, and that the designation as Reserve Banks. Deputy Federal Reserve Agents of nationalbank examiners now serving as directors of Fed- The Federal Reserve Board has taken certain eral Reserve Banks be, on and after January 1, actions affecting the eligibility of directors of 1916, or as soon thereafter as possible, revoked. Federal Reserve Banks and the tenure of office On December 29 the Board adopted the folof officers and employees of the same, which are lowing resolution relating to the tenure of embodied in a series of resolutions passed on office of employees: December 23, 28, and 29. On December 23 the following resolution Whereas, it is in the interest of good adwas adopted: ministration that the officers of the various Federal Reserve Banks shall have a definite Whereas it is the opinion of the Federal tenure of office, subject to renewal at. a speci- Reserve Board that persons holding political fied date; and or public office in the service of the United Whereas, it is the evident intent of the States, or of any State, Territory, county, dis- Federal Reserve Act that the Federal Reserve trict, political subdivision, or municipality Board shall exercise direct and continuous thereof, or acting as members of political party supervision of the affairs of the Federal Recommittees, can not consistently with the serve Banks with a view to maintaining an spirit and underlying principles of the Federal efficient and economical administration thereof: Reserve Act, serve as directors or officers of Be it resolved, That the Federal Reserve Federal Reserve Banks: Board formally expresses its opinion that the Resolved, That the Federal Reserve Board officers and employees of each Federal Reserve hereby expresses to the member banks its opin- Bank should be subject to annual election or ion that no such persons should henceforward be appointment (unless a shorter term is specielected or act as directors or officers of Federal fied), and that the list thereof, with salaries, Reserve Banks; and prescribes as a condition should be submitted to the Federal Reserve of eligibility that candidates for election shall Board at the beginning of each year for its comply with the terms of this resolution. approval. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESEEVE BULLETIN. On the same date the board adopted the fol- Class A • and B Directors Elected. lowing resolution with reference to member- The following Class A and B directors have ship in the Advisory Council. been elected by the Federal Reserve Banks: Whereas, Section 12 of the Federal Reserve District No. 1—Boston: Act provides for the establishment of a Federal Advisory Council with power to confer with Class A—Arthur M. Heard, Manchester, the Federal Reserve Board on general business N.H. conditions, to make representations concerning Class B—-Charles G. Washbum, Worcesmatters within the jurisdiction of said Board, ter, Mass. and to make recommendations regarding dis- District'No. 2—New York: count rates, rediscount business, note issues, Class A—Franklin D. Locke, Buffalo, reserve conditions in the various districts, the purchase and sale of gold or securities by re- N. Y. serve banks, open market operations'by said Class B—Leslie R. Palmer, Croton-onbanks, and the general affairs" of the reserve Hudson, N.Y. banking system; and District No. 3—Philadelphia: Whereas, The Federal Reserve Board has Class A—William H. Peck, Scranton, Pa. determined, after careful consideration, that Class B—George W. F. Gaunt, Mullica the purposes for which said Council has been Hill, N. J. established and the interests of the Federal District No. 4—Cleveland: Reserve System require that the members of Class A—Stacy B. Rankin, South Charlessaid Council should not be officially connected with the Federal Reserve Banks, and, therefore, ton, Ohio. in a position to give to the Federal Reserve Class B—John Stambaugh, Youngstown, Board the benefit of their disinterested and Ohio. unbiased advice: District No. 5—Richmond: Be it resolved. That it is the sense of the Class A—-Henry B. Wilcox, Baltimore, Federal Reserve Board that Governors, or Md. other officers of Federal Reserve Banks should Class B—Edmond Strudwick, Richmond, not serve as members of the Advisory Council, Va. but as the election of directors has already District No. 6—Atlanta: taken place this rule shall not apply as to Class A—L. P. Hillyer, Macon, Ga. directors until January 1, 1917. Class B—J. A. McCrary, Decatur, Ga. Resolved further, Tfiat a copy of this resolution be sent to each Federal Reserve Bank. District No. 7—Chicago: Class A—George M. Reynolds, Chicago, 111. Class B-—A. H. Vogel, Milwaukee, Wis. Class C Directors Appointed. •District No. 8—St. Loiiis: Class A—F. O. Watts, St. Louis, Mo. The following Class "C" directors have been Class B—David C. Biggs, St. Louis, Mo. named by the Federal Reserve Board to hold District No. 9—Minneapolis: Class A—J. C. Bassett, Aberdeen, S. Dak. office from and after January 1, 1916: Class B—F. P. Hixon, La Crosse, Wis. Federal Reserve Bank of Boston, Mr. Allen Hollis. District No. 10—Kansas City: Federal Reserve Bank of New York, Mr. George Foster Class A—John C. Mitchell,. Denver, Colo. Peabody. Class B—Thomas C. Byrne, Omaha, Nebr. Federal Reserve Bank of Cleveland, Mr. H. P. Wolfe. District No. 11—Dallas: Federal Reserve Bank of Richmond, Mr. M. F. H. Class A—John T. Scott, Houston, Tex. Gouvemeur. Class B—Frank Kell, Wichita Falls, Tex. Federal Reserve Bank of Atlanta, Mr. Edward T. Brown. District No. 12—San Francisco: Federal Reserve Bank of Chicago, Mr. E. P. Meredith. Class A—Alden Anderson, Sacramento, Federal Reserve Bank of St. Louis, Mr. William McC. Cal. Martin. Class B—J. A. McGregor, San Francisco, Federal Reserve Bank of Kansas City, Mr. R. H. Malone. Cal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

EEDEKAL RESERVE BULLETIN. JANUARY 1,1916. Mr. William McC. Martin, Federal Reserve Accommodations to Tennessee Agent at St. Louis, says: The attention of the Federal Reserve Board Fifty per cent of our member banks in Tenhas been called to a circular recently sent out nessee have rediscounted paper with this bank, by Messrs. T. D. Webb, J. L. Hutton, and J. P., and 11 out of 20 member banks are using our Hoskins, a committee appointed at a meeting clearing system. In this district, from Noof the national banks in Tennessee, held in vember 16, 1914, to December 28, 1915, 131 Nashville on November 23 (copies of which of our different member banks have rediscounted paper with us, and a great many more report have been sent to all Members of Conwould have done it, had they taken the trouble gress) , and investigation of certain of the stateto find out how easy it is to do business with ments contained in the circular referred to has the Federal Reserve Bank, instead of coming been made. to conclusions without evidence. Further- One of the main features of the circular was more, with the exception of 20 per cent of our member banks, all of them are in our clearing the statement that "only about 33 J per cent of system. the member banks of each Federal reserve district rediscount with the Federal Reserve Mr. Martin also says of the signers of the Bank of Atlanta. They have found that In report in question: normal times banks can redsicount with their Mr. Button's bank was borrowing money in New York and other city correspondents on New York and never came to us, nor inquired terms quite as favorable, if not more so, than with or showed any interest in this bank, until my the Federal Reserve Bank. Besides the proc- deputy Mr. T. C. Tupper, had a conversation ess of rediscounting with these correspondents with him in Memphis. He acknowledged borrowing money outside of the district, did not is much simpler than with the Federal Reserve seem to be interested in the Federal Reserve Bank." The Board has obtained a comment System, and knew very lit€ le about it, saying upon the contents of the circular from the that he could get his funds easier from his Federal Reserve Banks of St. Louis and correspondents. This was his Idea, because he Atlanta, the two banks between whose districts had never tried any dealings with this bank. the State of Tennessee is divided. Mr. M. B. After Mr. Tupper talked to him he agreed to send us some paper to take up bills payable in Wellborn, Federal Reserve Agent at Atlanta, New York, and on October 27, 1915, we received from him an offering of $109,974.88. There are in that part of Tennessee, within On the same morning of the receipt of this the Sixth Federal Reserve District, 95 member paper the proceeds were put to his credit, with banks, as follows: In group 1, 26; in group 2, the exception of four notes aggregating $22,500, 28; in group 3, 41. Eighteen out of the 26 which had maturities a day or two longer than banks in group 1 have rediscounted with us; 15 90 days. These we wrote him we could not out of the 28 banks in group 2 have rediscounted hold until their maturities came within the with*us; 27 out of the 41 banks in group 3 have law, and would then place the proceeds to his rediscounted with us; 60 banks out of the 95 credit. rediscounting—in amount $7,156,842.38. During the period of operation of the Federal Mr. T. D. Webb, the first of the signers of Reserve Bank", only 75 of the 95 banks have the circular, received in 1914-15 about $400,000 been at any time a "borrowing bank;" leaving of rediscounts. Mr. M. B. Wellborn, under only 15 banks that have not wholly or partially date of January 25, 1915, also said: rediscounted with the Federal Reserve Bank of Atlanta; there being 20 banks within our To-day we had a visit from Mr. T. D. Webb, Tennessee district that have not been l borrow- vice president of the First and Fourth National ing banks' at any time since the inauguration Bank, and we agreed to take $l 000,000 of his ? of the system. paper to retire his emergency currency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL EESEEVE BULLETIN. Mr. Webb afterwards placed this loan else- never heard one of them advocate any such where, but the Federal Reserve Bank of action as that indicated in that portion of your Atlanta acted promptly upon the request to report to which I have referred. discount it for him. A letter received from a Tennessee banker who had read the circular in question says: Dividend Declared by Richmond Bank. Our business relations with the Federal The Federal Reserve Bank of Richmond has Reserve Bank of Atlanta have been exceedingly pleasant, ^ satisfactory, and free from issued a circular to member banks in the fifth annoying technicalities, and since from our district, the substance of which is as follows: standpoint every detail has been handled so satisfactorily, we fail to understand how this DECEMBER 27, 1915. part of the Committee's report could fairly To the member lanTc addressed: represent the attitude of a large number of Section 7 of the Federal Reserve Act probankers. vides that "After all necessary expenses of a Governor George J. Seay, Federal Eeserve Federar Reserve Bank have been paid or provided for, the stockholders shall be entitled to Bank of Richmond, has written the signers of receive an annual dividend of 6 per cent on the the report in question in part as follows: paid-in capital stock, which dividend shall be In this report there occurs the following cumulative." statement: "At no time has the aggregate of The directors of this bank have declared a commercial paper and bank acceptances dis- dividend at the rate of 5 per cent per annum, counted by these banks been equal to the payable out of net earnings for the period of paid in capital stock, to say nothing of the operation—November 2, 1914, to December 31, reserve deposits, and in the face of these facts 1915. the Governor of one of the Federal Reserve The method of determining the amount of Banks recommends the payment of the addi- the dividend due to each member bank is as tional subscribed capital and the full reserve follows: Interest at the rate of 5 per cent per to be transferred at once, and then have the annum has been allowed on all capital stock Federal Reserve Banks go into the open mar- payments from the dates on which such payket and compete with their member banks.?7 ments were received by this bank to December I, of course, do not know the name of the 31, 1915, both dates inclusive, except that in Governor to whom you refer, or whether you the case of payments made prior to the dates are even acquainted with the name of that of call, interest has been allowed only from the Governor, but inasmuch as I have written an dates of call. This is in accord with a ruling of argument in favor of putting into immediate the Federal Reserve Board. operation the complete reserve provisions of The dates of call for the payment of capital the Federal Reserve Act, I think there is a prob- stock subscriptions were November 2, 1914, ability that you may have reference to the February 2, 1915, and May 3, 1915. In cases Governor of the Federal Reserve Bank of where repayments of capital stock have been Richmond. * * * made to members by reason of a reduction in I am sending you a copy of the argument their capital or surplus, interest on such repayprepared by me in relation to the transfer of ments has been deducted as an offset. reserve. It will be very clear to you that the The net earnings of the bank for the period of motive in preparing this argument was dia- operation, after deducting all current expenses, metrically opposed to the opinion of the Gov- will be approximately 6 per cent on the capital ernor to whom reference is made. paid in for the average time of employment. Nothing in the argument alludes to the fur- A detailed statement of earnings will be sent ther payment of capital stock subscription to members after the close of the year. * * # % A certain proportion of the total expenses of While it is not germane to this purpose, I the bank pertain to the period of organization will further state that, while I am fairly familiar and are legitimately entitled to be absorbed by with the views upon this subject entertained future earnings, and a portion of current earnby most of the Governors of the banks, I have ings must be set aside to provide for such ex- 19758—16 2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL BESEKVE BULLETIN. JANUARY 1,1916. penses. But for these unusual expenses, the locking directorates, domestic acceptances, rebank would be able to pay the full 6 per cent ductions in the capital stock of Federal Reserve which members are entitled to receive " after Banks, treatment of member bank reserves, all necessary expenses have been paid or proand uniform bills of lading. vided for." The dividend being cumulative, the differ- The amendment proposed as to reserves was ence of 1 per cent will be paid to members out that section 19, subsection (a), of the Federal of future earnings. Reserve Act be amended to read as follows: The amount of the dividend payable to your bank, in accordance with the accompanying SEC. 19 (a). A bank not in a reserve or censtatement, has been credited to your account tral reserve city as now or hereafter defined and notice is sent at this time to enable you to shall hold and maintain reserves equal to twelve include the amount in your earnings for the per centum of the aggregate amount of its decurrent year. mand deposits, and five per centum of its time Kespectfully, deposits, as follows: In its vaults for a period of thirty-six months GEOEGE J. SEAY, after said date five-twelfths thereof and perma- Governor. nently thereafter four-twelfths. In the Federal Reserve Bank of its district, Proposed Amendments to Act. for a period of twelve months after said date two-twelfths, and for each succeeding six Nine representatives of the national-bank months an additional one-twelfth until fivetwelfths have been so deposited, which shall be section of the American Bankers' Association, the amount permanently required. including its officers and executive committee, For a period of thirty-six months after said appeared before the Federal Reserve Board on date the balance of the reserves may be held in the afternoon of Wednesday, December 15, to its own vaults or in the Federal Reserve Bank, recommend amendments to be urged to the or in national banks, in reserve or central reserve Federal Reserve Act at this session of Con- cities as now defined by law. After said thirty-six months7 period said regress. There were also present at the meeting serves, other than those hereinbefore required Governors Strong, Fancher, Rhoads, Seay, and to be held in the vaults of the member bank McDougal, members of the executive commit- and in the Federal Reserve Bank, shall be held tee of the conference of Governors of Federal in the vault of the member bank, or in the Fed- Reserve Banks. The representatives of the eral Reserve Bank or member banks in reserve or central reserve cities as now or hereafter denational-bank section were: Fred W. Hyde, fined by law within a radius of three hundred president, Jamestown, N. Y.; J. S. Calfee, first miles of the member bank or within the Federal vice president, St. Louis, Mo.; J. Elwood Cox, Reserve District in which the member bank is chairman executive committee, High Point, located, at the option of the member bank. N. C; W. H. Bucholz, Omaha, Nebr., H. E. Otte, Chicago, 111., W. M. Van Dausen, Newark, N. J., members executive committee; State Banks Admitted. Fred E. Farnsworth, general secretary, American Bankers7 Association, New York; Thomas The following State banks have been admit- B. Paton, general counsel, American Bankers7 ted to the Federal Reserve System during the Association, New York; Theodore R. Wilson, month of December, the number of such instiassistant to general secretary, American Bank- tutions which have now joined the system ers7 Association, New York. being 32: Guardian Trust & Savings Bank, Five suggested changes were discussed by Toledo, Ohio; Merchants and Farmers Bank, the committee relating to the following: Inter- Cheraw, S. C. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY!, 1916. FEDERAL EESEBVE^ BULLETIN1. Assessment by Federal Reserve Board. fiscal agent of the Board is hereby authorized to collect from said banks such assessment Acting under the provisions of the Federal and execute, in the name of this Board, a re- Reserve Act, the Federal Reserve Board on ceipt for payment made. Such assessment will be collected in two installments of one- December 16 levied an assessment of one-tenth half each; the first installment to be paid on of 1 per cent upon the capitalization of Fed- January 1, 1916, and the second haif on March eral Reserve Banks to cover the expenses of the 1, 1916. Board from January 1 to June 30, 1916. The resolution of the Board follows: Estimate for January, 1916, assessment Whereas, under section 10 of the Act ap- Total encumbrance for month of Novemproved December 23, 1913, and known as the ber, 1915 f 17,04$. 06 Federal Reserve Act, the Federal Reserve Estimated monthly requirements—Janu- Board is empowered to levy' semianmially ary to June, inclusive, 1916 17,561.12 upon the Federal Reserve Banks in proportion Estimated increase over November. 512. 06 to their capital stock and surplus, an assess- Estimated requirements—January to June, ment sufficient to pay its estimated expenses, inclusive, 1916 $105,366. 72 including the salaries of its members, assist- Unencumbered balance Deants, attorneys, experts, and employees for the cember 1, 1915. $48,451.60 Estimated requirements for half year succeeding the levying of such assess- December, 1915. 16,892.46 ment, together with any deficit carried forward from the preceding half year; and Estimated unencumbered balance January 1, 1916 31, 559.14 Whereas, it appears from estimates submitted and considered that it is necessary that 73,-807. 58 a fund equal to one-tenth of 1 per cent of the Total capitalization Federal Reserve capital stock of the Federal Reserve Banks be Banks 109, 718,000. 00 Rate of assessment to produce $109,718 created for the purposes hereinbefore de- (one-tenth of 1 per cent) . 001 scribed, exclusive of the cost of engraving and printing Federal Reserve notes: SHERMAN ALLEN, Fiscal Agent. Now, therefore, he it resolved, That pursuant to the authority vested in it by law, the Federal Approved: Committee on Budget and Ex- Reserve Board hereby levies an assessment penditures. upon the several Federal Reserve Banks of an F. A. DELANO. amount equal to one-tenth of 1 per cent of A. C. MILLER. the total capital stock of such banks, and the DECEMBER 15, 1915. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BULLETIN. JANUARY 1,1916. Detailed statement as a basis of estimate. Commitments. Estimated average Monthly monthly re- July 1 to Estimated quirement No 19 v 1 . 5 3 . 0, fo b r e r D , e 1 c 9 e 15 m . - Total. J J a u n n . e 1 3 0 t , o 1916. PERSONAL SERVICES. Board and its clerks $36,666.56 $7,333.31 $43,999.87 $7,333.31 $7,333.31 Secretary's office 11,739.98 2,223.32 13,963.30 2,327.22 2,231.65 Counsel's office * 9,307.48 1,866.66 11,174.14 1,862.36 1,866,66 Division of Audit and Examination. 6,622,80 1,404.18 8,026.98 1,337.83 1,404.18 Division of Reports and Statistics. 3,119.15 633.33 3,752.48 625.41 783.33 Division of Issue 3,223.30 651.66 3,874.96 645.83 651.66 Telephone operator 250.00 50.00 300.00 50.00 60.00 Messengers 2,090.00 315.00 2,405.00 400.83 315.00 Charwomen 300.00 60.00 360.00 60.00 60.00 Contingencies Total. 73,319.27 14,537.46 87,856.73 14,642.79 14,914.12 NONPERSONAL SERVICES. Transportation and subsistence of persons: Board and its clerks 536.19 250.00 786.19 131.03 150.00 Secretary's office 28.00 28.00 4.66 10.00 Division of Audit and Examination 2,292.91 "600." 66 2,892.91 482.15 625.00 DivisioD of Reports and Statistics Counsel's office 42.12 42.12 7.02 10.00 Messengers (car fare) 10.00 10.00 1.66 2.00 Transportation of things .24 .24 .04 Communication service: Telephone 266.36 40.00 306.36 51.06 60.00 Telegraph 1,253.71 250.00 1,503.71 250.62 300.00 Postage - — 40.00 30.00 70.00 11.66 15.00 Printing, binding, etc 3,841.02 •750.00 4,591.02 765.17 1,000.00 Engraving, etc 10.00 Contract repairs 22.23 15.00 37.23 6.21 10.00 Electricity (light and power) 150.00 30.00 180.00 30.00 30. GO Steam (heat) 15.00 15.00 30.00 5.00 15.00 Other (nonpersonai services) 15.46 15.46 2.58 50.00 Supplies: Stationery 316. 77 50.00 366.77 61.13 100.00 Periodicals. 105.86 10.00 115.86 19.31 20.00 Other 57.46 15.00 72.46 12,08 30.00 Equipment: Furniture and office equipment 983.24 200.00 1,183.24 197.21 150.00 B ooks - 170.21 100.00 270.21 45.03 50.00 Office changes and improvements 7.00 7.00 1.16 10.00 Total 83,473.05 16,892.46 100,365.51 16,727.57 17,561.12 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL. RESERVE BULLETIN. GOLD SETTLEMENT FUND. All the balances were verified to us in writing by the Federal Reserve Banks and Federal Re- AUDIT OF GOLD FUND. serve Agents, including the five agents not creditors of the gold settlement fund. An audit of the gold settlement fund and the R. REYBURN BURKLIN, Federal Reserve Agents' fund was made on Representative, Federal Reserve Board. THOMAS GAMON, Jr., November 16, resulting in tlie following report: Federal Reserve Bank ofPhiladelphia., We, the undersigned, acting under instruc- Representing Federal Reserve Banks. tions of the conference of Governors and the W. E. CADWALLADER, conference of Federal Reserve Agents, made Representing Federal Reserve Agents. an examination of the gold settlement fund DECEMBER 6, 1915. and the Federal Reserve Agents' fund as of November 15, 1915, on Tuesday, November 16, 1915, in the office of the secretary of the The Federal Reserve Board held in the gold Federal Reserve Board, at Washington, D. C. settlement fund on December 23 to the credit In addition to the undersigned there were present, while the cash was being counted, of the Federal Reserve Banks $70,360,000, and Sherman Allen, Esq., assistant secretary, in the Federal Reserve Agents7 fund to the credit Federal Reserve Board; Ray M. Gidney, Esq., of nine Federal Reserve Agents $56,310,000. settling agent; Reyburn R. Burklin, Esq., Total clearings up to and including December representative designated by the Federal 23 have amounted to $964,300,000, which have Reserve Board. We verified by count an aggregate of ninety resulted in net changes in the ownership of the one million seven hundred and sixty thousand gold held in the fund of $74,459,000, or 7.7 per dollars ($.91,760,000.) in United States Treas- cent of the total clearings. ury gold certificates of the denomination of ten thousand dollars ($10,000) each. A list Amount of clearings. of the numbers of such certificates is attached hereto. Total clear- These certificates, issued payable to the ings. Balances. order of the Federal Reserve Board and indorsed by perforation " Payable only to the S P e re tt v l i e o m u e sl n y t r o e f p — orted $764,625,000 1147,448,000 Treasurer of the United States or a Federal Dec. 2 1915 51,840,000 9,095,000 Reserve Bank/7 were taken from a safe in D D e ec c . 9 1 , 6 1 , 9 1 1 9 5 15 4 4 7 9 , , 2 2 5 1 8 3 , , 0 0 0 0 0 0 6 6 , , 4 0 6 1 1 6 , , 0 0 0 0 0 0 the vaults of the Comptroller of the Currency. Dec. 23,1915. 51,364,000 6,361,000 . The following credit balances were copied Total 964,300,000 175,381,000 from the books of the settling agent, the total thereof being in agreement with the amount Changes in ownership of gold. of cash resources as proven by us: Fed B er a a n l k R o e f— serve T de o p ta o l s i n ts e . t B D a e l c a . n 2 c 3 e , Increase. Decrease. 1915. Federal Re- Federal Reserve Banks. serve Agents. Boston $3,230,000 $3,331,000 $101,000 New York 77,000,000 6,613,000 $70,387,000 Boston $4,567,000 Philadelphia 450,000 5,169,000 4,719,000 New York °>, 00G.000 Cleveland 2,930,000 10,410,000 7,480,000 Philadelphia 2,643,000 Richmond i — 490,000 9,205,000 9,695,000 Cleveland 5,367,000 Atlanta 1 -7,320,000 2,720,000 10,040,000 Richmond 6,903,000 $8,800,000 Chicago 5,770,000 1,698,000 """4,"672*666 Atlanta . 2,595,000 11,050,000 St. Louis 1-3,780,000 6,243,000 10,023,000 Chicago 7,934,000 4,260,000 Minneapolis i -2,600,000 3,988,000 6,588,000 S M t. i n L n o ea u p is olis . 4 4 , , 9 6 5 2 8 2, , 0 0 0 0 0 0 2 1 , ,0 0 0 0 0 0 , , 0 0 0 0 0 0 D K a a l n l s a a s s C . it . y . . b 1 1 - - 2 3 , , 0 7 2 4 0 0 , , 0 0 0 0 0 0 9 1 , , 3 7 1 2 9 2 , ,0 0 0 00 0 1 5 1 , , 4 3 6 3 2 9 , , 0 0 0 0 0 0 Kansas City • 3,103,000 San Francisco 930,000 9,942,000 9,012,000 Dallas .... 8,213,000 750,000 San Francisco 4,619,000 370,000 Total 70,360,000 70,360,000 74,459,000 74,459,000 Total. 58,530,000 33,230,000 i Withdrawals have exceeded amounts of the gold deposits made. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 FEDERAL RESERVE BULLETIN". JANUARY 1,1916. Gold settlement fund.—Summary of transactions Nov. 27, 1915, to Dec. 23, 1915. Gold. Transfers. Settlement of Dec. 2,191.5. Balance Dec. 2,1915? Federal Reserve last state- balance in Bank of— m 2 e 6 n , t 1 , 9 N 1 o 5. v. d W ra i w th n - . Deposited. Debit. Credit. Net debits. d T e o b t i a ts l . c T re o d t i a t l s. Net credits. fu cl n e d a r a in ft g e . r Boston Si5.259.000 $7,285,000 $7,321,000 $36,000 $5,295,000 New York 3,885,000 $10,000,000 $4,470,000 16,169,000 11,699,000 9,415,000 Philadelphia 3,990,000 5,806,000 6,985,000 1,179,000 5,169,000 Cleveland 9.170.000 180,000 181,000 796,000 615,000 9,169,000 Richmond.... 9,268,000 563,000 5,543,000 4,980,000 8,705,000 Atlanta 1,409,000 250,000 $44,000 344,000 1,764,000 1,420,000 1,359,000 Chicago .. .*.•.. 9,736,000 3,472,000 8,836,000 5,364,000 6,264,000 St. Louis 2.757.000 4,000 4,057,000 8,716,000 4,659,000 7,420,000 MinneaDolis ' fi.7Q7.nnn $1,000,000 104,000 427,000 323,000 5,120,000 Kansas City 6,358,000 4,060,000. $19,000 1,264,000 2,820,000 1,556,000 3,835,000 Dallas 9,165,000 29,000 """"65*666" 199,000 134,000 9,071,000 San Francisco 7,536,000 17,000 1,359,000 1,342,000 8,878,000 Total 74,330,000 5,080,000 10,430,000 48,000 48,000 9,095,000 51,840,000 51,840,000 9,095,000 79,700,000 Gold. Transfers. Settlement of Dec. 9,1915. Balance Dec. 9,1915, Federal Reserve last state- balance in Bank of— m 2 e , n 1 t, 9 D 15 e . c. d W ra i w th n - . Deposited. Debit. Credit. Net debits. d T e o b t i a ts l . c T re o d t i a t l s. Net credits. f c u l n e d a ri a n ft g e . r Boston $5,295,000 $1,617,000 $6,875,000 $5,258,000 $3,678,000 P N h e i w la d Y e o lp rk hia. 5 9 , , 1 4 6 1 9 5 , , 0 0 0 0 0 0 ---| - $45,666" $1,000,000 3,569,000 1 6 4 , , 6 5 9 0 9 3 , , 0 0 0 00 0 1 9 0 , , 2 9 2 3 2 4 , , 0 0 0 0 0 0 "$2,"523*666" 6 7 , , 8 6 4 4 6 7 , , 0 00 0 0 0 Cleveland 9,169,000 100,000 697,000 1,124,000 427,000 9,696,000 Richmond 8,705,000 "$46o," 666* "*'"io4,"666* 4,871,000 4,767,000 9,061,000 Atlanta .. ... 1,359,000 "$i,*666," 666" 570,000 1,815,000 3,253,000 1,438,000 2,367,000 Chicaeo 6,264,000 i inn nnn 517,000 7,407,000 6,890,000 4,647,000 St. Louis.. . 7,420,000 1 ' ' 4,180,000 4,282,000 102,000 7,522,000 Minneapolis 5,120,000 1,000,000 i 45,000 127,000 145,000 18,000 4.183.000 Kansas City 3,835,000 2,000,000 654,000 1,786,000 1,132,000 1,181,000 Dallas 9,071,000 10,000 215,000 367,000 152 000 Q.213 ftftn San Francisco 8,878,000 3,000,000 38,000 1,839,000 1,801,000 7,679,000 Total 79,700,000 7,010,000 1,030,000 1,145,000 1,145,000 6,461,000 49,213,000 49,213,000 6,461,000 73,720,000 Gold. Transfers. Settlement of Dec. 16,1915. Balance Dec.16,1915. Federal Reserve last state- balance in Bank of— m 9 e , n 1 t 9 , 1 D 5 e . c. d W ra i w th n - . Deposited. Debit. Credit. Net debit. d T e o b t i a t l . c T re o d t i a t l s. Net credits. f c u l n e d a r a in ft g e . r Boston $3,678,000 $15,000 $475,000 $5,016,000 $4,541,000 $3,188,000 New York 6,846,000 $13,000,000 6,578,000 5,147,000. 13,890,000 8,743,000 8,121,000 Philadelphia 7,64.7,000 7,000,000 3,000 5,676,000 6,702,000 6,709,000 $7,000 6,327,000 Cleveland 9,696,000 60,000 130,000 801,000 890,000 . 89,000 9,855,000 Richmond. 9,061,000 1,210,000 1,380,000 4,612,000 5,764,000 1,152,000 10,383,000 Atlanta 2,367,000 500,000 280,000 30,000 1,973,000 2,813,000 840,000 3,017,000 Chicago. . . .. 4,647,000 100,000 226,000 8,039,000 7,813,000 4,521,000 St. Louis 7,522,000 1,000,000 4,677,000 4,823,000 146,000 6,668,000 Minneapolis 4,183,000 12,000 3,000 62,000 99,000 37,000 4,112,000 Kansas'City 1,181,000 1,010,000 3,000 902,000 106,000 1,163,000 1,057,000 964,000 Dallas......... 9,213,000 158,000 613,000 455,000 9,668,000 San Francisco 7,679,000 100,000 128,000 3,455,000 3,327,000 10,906,000 Total 73,720,000 10,780,000 14,790,000 6,711,000 6,711,000 6,016,000 47,258,000 47,258,000 6,016,000 77,730,000 Gold. Transfers. . Settlement of Dec. 23,1915. Balance Dec.23,1915, Federal Reserve last state- balance in Bank of— m 1 e 6 n ,1 t, 9 D 15 e . c. d W ra i w th n - . Deposited. Debit. Credit. Net debits. d T e o b t i a ts l . c T re o d t i a t l s. Net credits. f c u l n e d a ri a n f g te . r Boston . $3,188,000 $5,219,000 $5,362,000 $143,000 $3,331,000 New York 8,121,000 8100,000 $1,000,000 $2,408,000 13,837,000 11,429,000 6,613,000 Philadelphia 6,327,000 1,158,000 6,993,000 5,835,000 5,169,000 Cleveland 9,855,000 1,030,000 1,585,000 555,000 10,410,000 Richmond 10,383,000 $1,300,000 5,750,000 5,872,000 122,000 9,205,000 Atlanta 3,017,000 1,000,000 120,000 $2,000 2,093,000 2,774,000 681,000 2,720,000 Chicago 4,521,000 iso'ooo" * "2,"673,"666" 10,193,000 7,520,000 1,698,000 St. Louis 6,668,000 **3,"d66,"66o* 4,151,000 6,726,000 2,575,000 6,243,000 Minneapolis 4,112,000 2,000 122,000 159,000 37,000 3,988,000 Kansas City 964,000 100,000 250," 666' 1,618,000 2,226,000 608,000 1,722,000 Dallas 9,668,000 10,000 1,000,000 100,000 272,000 833,000 561,000 9,319,000 San Francisco 10,906,000 2,080,000 49,000 1,165,000 1,116,000 9,942,000 Total 77,730,000 7,390,000 20,000 1,352,000 1,352,000 6,361,000 51,364,000 51,364,000 6,361,000 70,360,000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 11 Federal Reserve Agents' fund—Summary of transactions, Nov. 27,1915, to Dec. 23, 1915. Week ending Dec. 2, Week ending Dec. 9, 1915. 1915. Week ending Dec. 16,1915. Week ending Dec. 23,1915. Federal Reserve Nov. 26, 1915, bal- Agent at— ance. Deposited. Balance. Deposited. Balance. d W ra i w th n - . Deposited. Balance. d W ra i w th n - . Deposited. Balance. Philadelphia $5,000,000 $5,000,000 $5,000,000 Richmond $8,i800,000 $8,800,000 $8,800,666 $1,050,000 100,000 7,850,000 $1,300,000 9,150,000 Atlanta 11,200,000 11,200,000 n,bbb',bbo 12,200,000 500,000 12,700,000 1,000,000 13,700,000 Chicago 4,260,000 4,260,000 4,260,000 4,260,000 4,260,000 St. Louis 1,000,000 1,000,000 1,000,000 "i"666*666" 2,000,000 5,000,000 Minneapolis 2,000,000 $i,"666,"666* 3,000,000 i',bbb',bbb' 4,000,000 4,000,000 "3*666,"666" 4,000,000 D K a a l n l s a a s s City....... 1,750,000 4,000,000 1 4 , , 7 00 5 0 0 , , 0 0 0 0 0 0 2,000,000 6 1 , , 0 7 0 5 0 0 , , 0 0 0 0 0 0 i,"666,"666" 7 1 , , 0 7 0 5 0 0 , , 0 0 0 0 0 0 7 1 , , 0 7 0 5 0 0 , , 0 0 0 0 0 0 San Francisco 4,370,000 4,370,000 4,370,000 4,370,000 6,450,000 "2," 080," 666" Total .33,380,000 5,000,000 38,380,000 4,000,000 42,380,000 1,050,000 7,600,000 48,930,000 7,380,000 56,310,000 DISCOUNT RATES. Discount rates of each Federal Reserve Bank in effect Dec. 24, 1915. Trade acceptances. M o a f n a 1 d tu 0 l r e d it s a i s e y . s s t M i o o n f c a 3 o l t 0 u u v d s r e i i r a v t y i 1 e e s 0 . s , t M i o o n f a c 6 o t l 0 u u v d r s e i i r a t v i y 3 e e s 0 . s , t M i o o n f c 9 a o l 0 t u u v d s e r i i r a v t y i 6 e e s 0 . s , p l t a i 9 A u v p 0 r e g e a - d r r l s i a c t a o o y u n v c s l d e k - . r T in o c 6 lu 0 s d iv a e y . s, O in 9 v c 0 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. Atlanta 3i Atlanta (New Orleans branch). 2 3-1-4 Chicago .....' St. Louis Minneapolis Kansas City Dallas San Francisco 1 Rate for commodity paper maturing within 90 days. 2 Rate for trade acceptances bought in open market, without member bank indorsement. s A rate of 2 to 4 per cent for bills With or without member bank indorsement has been authorized. 4 Rate for commodity paper maturing within 30 days, 3| per cent; over 30 to 60 days, 4 per cent; over 60 to 90 days, 4| per cent; over 90 days, 5 per cent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 FEDERAL RESERVE" BULLETIN. JANUARY 1,1916. INFORMAL RULINGS OF THE BOARD. Below are reproduced letters sent out from Expenses of Banks* time to time over the signatures of the offi- As the fiscal year will close on December 31, 1915, the Board deems it advisable that all cers of the Federal Reserve Board, which con- Federal Reserve Banks close their books on tain information believed to be of general that date. The period from November 16, interest to Federal Reserve Banks and member 1914, to December 31, 1915, may properly be banks of the system: called the organization period. In some instances the banks have not been able to keep a Additional Stock Applications. sufficient amount invested to defray current This is to advise you that the Federal Reserve expenses and extraordinary expenditures inci- Board in considering applications of member dent to their organizations. banks for additional stock will not hereafter The Board therefore requests: require a certificate from the Comptroller of 1. That Federal Reserve Banks having an the Currency as to the amount of capital and excess of current expenses over current earnsurplus of the applying bank on the date of ings for the period November 16, 1914, to application. This will render unnecessary the December 31, 1915, include such excess as an separate sworn statements heretofore required organization expense. for the information of the Comptroller's office 2. That, beginning with the month of Janin cases where there have been changes in the uary, 1916, each bank charge against current capital or surplus subsequent to the filing of earnings each month an amount equal to not the last report of condition. less than one-twenty-fourth of the total organ- NOVEMBER 27, 1915. ization expenses. 3. That, where the earnings of the bank will Certificates of Eligibility. permit, the cost of Federal Reserve notes issued and in circulation be charged against Your letter of November 13 has been conearnings for the current . year. Where a sidered by the Federal Reserve Board, and a deficiency in earnings exists the cost of such decision arrived at regarding the question you notes used should be included in organization raise, namely, whether a certificate of eligiexpenses to be charged off at the rate of not less bility on farm mortgage paper could be exethan one-thirtieth each month, beginning with cuted by an officer of any reputable private the month of January, 1916. bank or firm in the district. 4. Beginning with the month of January, The Board is of the opinion that the offi- 1916, the cost of notes issued and used should cers of the purchasing bank ought to furnish be charged against current earnings each the certificate based upon their own knowledge. month. NOVEMBER 29, 1915. 5. Beginning with the month of January, 1916, a reasonable allowance for depreciation Purchase of United State * Bonds. in furniture and equipment should be charged In reply to your letter of December 3, 1915, against current earnings each month. you are advised that any United States bonds DECEMBER 10, 1915. which your bank may buy in the open market between January 1, 1916, and March 31, 1916, Classification of Cotton Bills. must, under the provisions of section 18 of the There was recently received by the Federal Federal Reserve Act, be deducted from its pro- Reserve Board a letter from one of the southern portionate share of those bonds which the Fed- Federal Reserve Banks asking whether a memeral Reserve Board may require Federal Re- ber bank would be justified, if fully secured, in serve Banks to purchase from, member banks accepting drafts drawn by a local cotton-buying at the end of the first quarter of 1916. firm having a contract of sale to foreign buyers, In this connection your attention is directed if the transaction, after having been made in to a copy of an opinion of counsel of the Fed- good faith, ultimately resulted in the sale of eral Reserve Board printed on page 99 of the the cotton to American instead of foreign June Federal Reserve Bulletin, and also to a purchasers. copy of a letter of the Federal Reserve Board This question involved an interpretation of printed on page 355 of the November Federal section 13 of the Federal Reserve Act, it being Reserve Bulletin. understood that the national bank participa- DECEMBER 4, 1915. ting in the transaction had received permission Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 13 from tlie Federal Reserve Board to accept Election of Advisory Council, drafts or bills of exchange drawn upon it. It The question having arisen with reference to was assumed, in making up the hypothetical the time of electing members of the Advisory case, that the cotton buyers had a contract to Council for the coming year, I am instructed to sell cotton to a firm in Liverpool and that they advise you that, in the opinion of the Board, held the cotton subject to shipping orders of such elections should be conducted at a meetthe Liverpool firm. Because of freight rates ing after the first of January, when the newly and shipping conditions the Liverpool firm elected directors have taken office. In those changed its policy and directed that the cotton cases where the directors already holding office be delivered to a State warehouse and following have been reelected, the time of holding the shipment to that warehouse sale was made of election would be a technicality, but it is the cotton to a New England spinner. It will nevertheless believed that the practice should be seen that this sale was not contemplated be uniform throughout. when the original transaction was begun and DECEMBER 16, 1915. the acceptance made by the national bank. Here follows the letter of the Board in connection with the matter: In reply to your letter of December 1, the Board has Purchase of Bonds. instructed me to state to you that in its opinion the bank I have your letter of December 9, in reply to would be justified in accepting drafts drawn Upon it, in which I will say that you are mistaken in your case at the time of the acceptance there is a bona fide idea that you could not purchase, under section contract for the importation or exportation of the goods involved. The bank is in that case financing in good faith 18, the entire year's quota of Government bonds a transaction involving the importation or exportation of in the first quarter. goods, and if at a later date unforeseen events should pre- Whatever you should buy in the first quarter vent the importation or exportation and therefore cause a different disposition from what was contemplated when in excess of the first quarter's allotment would the transaction .was entered into the Board does not think be taken into account in the successive quarters that the bank would be considered as having acted ultra of the year. vires in having accepted for the transaction in question. DECEMBER 10, 1915. DECEMBER 10, 1915. Responsibility on Acceptances. In reply to your letter of December 11, inquiring as to whether uthe Federal Reserve Tenure of OMce. Board will require statements which must The question has been brought before the prove satisfactory to them, or whether it Federal Reserve Board from various sources means that forms only of statements made by whether the officers and employees of Federal acceptors of bills of this character are to be Reserve Banks are to have a definite tenure of approved by them," I am instructed to say- office or are to hold office subject to the pleasthat, as the language of the regulation indi- ure of their boards of directors. Investigation cates, the Board has held only that the state- shows that there is a lack of uniformity in the ment shall be satisfactory in form. by-laws of the several banks on this subject The reason for adopting this policy is that the and that no definite action has thus far been Board feels that the ultimate responsibility in taken as regards the Board's own relation to the purchasing these acceptances must rest with matter. the banks, and that the Board in passing I am, therefore, instructed to advise you that upon the actual balance sheet would be in a the Federal Reserve Board has determined to position of having passed upon the quality of ask the several banks to submit to it each and the credit of the acceptor. The Board deems evSry year as of January 1 their lists of officers it its duty only to see to it that the bank takes and employees, with salaries, for approval, such adequate precaution in satisfying itself as to the action to be a matter of regular routine, involvstanding of the acceptor. ing a preceding annual action on the part of You asked the Board to furnish you with a each board of directors in electing or reelecting supply of forms. The Board recognizes that officers and employees for another year. It is there must be some elasticity in the require- also suggested that (in the course of each such ments governing statements of private bankers. year) the officers and employees oi each bank The very large firms would not be willing to shall be considered to hold their appointments give a statement as detailed as would be neces- for the calendar year and subject to the pleassary in dealing with firms of lesser importance. ure of the boards of directors of such banks. DECEMBER 16, 1915. DECEMBER 23, 1915. 19758—16 3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 FEDEEAL RESERVE BULLETIN. JANUARY 1,1916. Fiduciary Powers. Intradistrict Clearing System. Applications from the following banks for Additions to and withdrawals from the syspermission to act under section 11 (k) of the tem since the publication of the lists in pre- Federal Reseve Act have been approved since vious issues of the Bulletin are as follows: the issue of the December Bulletin, as follows: DISTRICT NO. 2. Additions: DISTRICT No. 1. First National Bank, Butler, N. J. Trustee, executor, administrator, and registrar of stocks . ,,. . DISTRICT NO. 3. Additions: and bonds: Second National Bank, Philadelphia, Pa. Welden National Bank, St. Aibans, Vt. Withdrawals: Holyoke National Bank, Holyoke, Mass. Grange National Bank of Bradford County, Troy, Pa. DISTRICT No. 2. Wi . th _ d _ r awal , s: DISTRICT NO. 4. Trustee, executor, administrator, and registrar of stocks First National Bank, Circleville, Ohio. and bonds: Ohio National Bank, Columbus, Ohio. National Union Bank, Dover, N. J. Coshocton National Bank, Coshocton, Ohio. National State Bank, Newark, N. J. Merchants National Bank, Massillon, Ohio. Rutherford National Bank, Rutherford, N. J. First National Bank, Pikeville, Ky. Trustee, executor, and administrator: . . DISTRICT NO. 5. National Iron Bank, Morristown, N. J. Additions: First National Bank, Somerville, N. J. Peoples National Bank, Bennettsville, S. C. National Newark Banking Go., Newark, N. J. Covington National Bank, Covington, Va. Withdrawals: First National Bank, Louisburg, N. C. DISTRICT NO. 6. DISTRICT NO. 7. Trustee, executor, administrator, and registrar of stocks Withdrawals: and bonds: Rush County National Bank, Rushville, Ind. First National Bank, Mobile, Ala. Rushville National Bank, Rushville, Ind. DISTRICT No. 7. AA d , d ,. it . i ons: DISTRICT NO. 8. First National Bank, Caruthersville, Mo. Trustee, executor, administrator, and registrar of stocks First National Bank, Marceline, Mo. and bonds: Withdrawals: Farmers & Merchants National Bank, Wabash, Ind. First National Bank, Green Forest, Ark. First National Bank, Petoskey, Mich. First National Bank, Sandoval, 111. Patoka National Bank, Patoka, Ind. DISTRICT NO. 9. . . DISTRICT NO. 9. Trustee, executor, administrator, and registrar of stocks Additions: and bonds: First National Bank, Breckenridge, Minn. Commercial National Bank, Oshkosh, Wis. First National Bank, Winona, Minn. First National Bank, Goodwin, S. Dak. First National Bank, Hayti, S. Dak. DISTRICT NO. 11. Withdrawals: Trustee, executor, administrator, and registrar of stocks First National Bank, Rolette, N. Dak. and bonds: . . DISTRICT No. 11. City National Bank, Dallas, Tex. Additions: First National Bank, Galveston, Tex. Farmers National Bank, Cross Plains, Tex. Withdrawals: DISTRICT NO. 12. City National Bank, Granbury, Tex. First National Bank, Granbury, Tex. Trustee, executor, administrator, and registrar of stocks Farmers National Bank, Hempstead, Tex. and bonds: First National Bank, Longview, Tex. First National Bank, Seattle, Wash. National Bank of Commerce, San Antonio, Tex. Deseret National Bank, Salt Lake City, Utah. DISTRICT NO 12 Trustee: Additions: First National Bank, Ashland, Oreg. First National Bank, Yreka, Cal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 15 CIRCULARS AND REGULATIONS. The circular and regulation given below were The present circular and regulation is intended to cover issued by the Board on December 4: these items. The Board wishes particularly to call attention to the purpose of the open-market section of CIRCULAR NO. 20, SERIES OF 1915. the Federal Reserve Act. It enables the Federal Reserve Banks to exert a steadying influence upon prevailing rates WASHINGTON, December 4,1915. of interest by the use of their purchasing power whenever conditions make such influence desirable, and when, GENERAL OPEN-MARKET OPERATIONS. owing to the lack of applications for rediscounts, they are The Federal Reserve Act in section 14, under the head unable to influence rates through the latter means. It "Open-market operations," provides that— also affords to the Federal Reserve Banks the opportunity "Any Federal Reserve Bank may, under the rules and of purchasing in the open market, paper with a view regulations prescribed by the Federal Reserve Board, pur- to providing for their expenses and dividends. The chase and sell in the open market, at home or abroad, Board is of the opinion that the Federal Reserve Banks either from or t;o domestic or foreign banks, firms, corporations, or individuals, cable transfers and bankers' accept- should, when occasion warrants, stand ready to engage ances and bills of exchange of the kinds and maturities by in open-market transactions, as buyers or sellers, to the this Act made eligible for rediscount, with or without the extent that it is necessary to carry out the purposes of indorsement of a member bank." the Act. The Act also provides that every Federal Reserve Bank The Federal Reserve Board does not wish to be undershall have power— stood as encouraging expansion of credits at times and "To deal in gold coin and bullion at home or abroad under conditions when there should be contraction, but * * * >* rather as holding the view that the Federal Reserve "To buy and sell, at home or abroad, bonds and notes Banks, taking cognizance of the conditions in their of the United States, and bills, notes, revenue bonds, and warrants with a maturity from date of purchase of not ex- respective districts, should avail themselves of the powers ceeding six months, issued in anticipation of the collection granted by the Act as explained in our letter of October of taxes, or in anticipation of the receipt of assured revenue 8, 1915, just as they have done in connection with other by aiiy State, county, district, political subdivision, or open-market powers conferred upon them municipality * * *." "To purchase from member banks and to sell, with or without its indorsement, bills of exchange arising out of commercial transactions, as hereinbefore defined." REGULATION T, SERIES OF 1915. Further in the same section permission is given to each Federal Reserve Bank: WASHINGTON, December 4, 1915. u* * * to buy and sell * * * through (its) cor- GENERAL OPEN-MARKET OPERATIONS. respondents or agencies, bills of exchange arising out of actual commercial transactions which have not more than I. Definition. 90 days to run, and which bear the signature of two or more responsible parties." Open-market operations, as contemplated under the Federal Reserve Act, are all those transactions author- Several of these classes of transactions have already been ized by section 14 of the Act which involve dealings with provided for in the circulars and regulations heretofore persons or institutions—whether or not members of the issued by the Federal Reserve Board as follows: Federal Reserve System—and which do not require Regulation F, series of 1915, provides for the purchase the indorsement of a member bank. of warrants, revenue bonds, etc. In letters to the various Federal Reserve Banks the con- II. Operations 'providedfor in this regulation. ditions have been indicated under which bonds and notes The present regulation deals with operations in cable of the United States may be dealt in. transfers and foreign and domestic bills of exchange and In Regulation S, partly superseding Regulation R, bankers' acceptances payable in foreign countries and series of 1915, conditions have been established for the in foreign currencies. The statutory requirements perpurchase of bankers' acceptances payable in the United taining thereto have already been set forth in the accom- States in dollars and growing out of foreign trade operations and out of certain domestic transactions. panying circular. There remain still to be dealt with the purchase and sale III. Cable transfers and foreign bills of exchange. of "cable transfers" and bills of exchange, both domestic and foreign, of the kinds and maturities by this Act In order to carry on open-market transactions in cable made eligible for rediscount, and bankers' acceptances transfers and foreign bills of exchange (including foreign payable in foreign countries and in foreign currencies. bankers' acceptances)-—that is, payments to be made in, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 FEDERAL RESERVE BULLETIN. JANUARY 1,1916. or bills payable in, foreign countries—it will be necessary V. Domestic bills—Conditions of purchase. for Federal Keserve Banks to open accounts with correspondents or establish agencies in foreign countries. (a) Before purchasing domestic bills of exchange, the Such bills of exchange and foreign acceptances must Federal Reserve Bank must secure statements concerning comply with the applicable requirements of sections the condition and standing of the drawer of the paper, and, 13 and 14. As the law prescribes that these connections if possible, also of the acceptor of the bill, sufficient to are to be established only with the consent of the Federal satisfy the bank as to the nature and quality of the paper to Reserve Board, Federal Reserve Banks will be required be purchased. to communicate with the Federal Reserve Board whenever (6) No Federal Reserve Bank will be permitted to purthey are ready to enter these foreign fields. chase bills of any one drawer, or issued upon any one maker, The Federal Reserve Board realizes that in dealing to an amount to exceed in the aggregate a percentage of its in foreign exchange the Federal Reserve Banks must capital, to be fixed from time to time by the Federal Renecessarily have wide discretion in determining the rates serve Board, except when secured by approved warehouse at which they will buy or sell. It is not necessary that receipts, bills of lading, or other such documents covering the bills shall have been actually accepted at the time of readily marketable goods. The aggregate amount drawn purchase. The Federal Reserve Board, however, will on any one acceptor, purchased by Federal Reserve require that unaccepted "long bills," payable in foreign Banks, shall not exceed a reasonable percentage of the countries, when purchased, unless secured by documents, stated net worth of the parties whose names appear upon shall bear one satisfactory indorsement other than those the paper. "of the drawer or acceptor, preferably that of a banker. VI. Bates. Federal Reserve Banks should exercise due caution Federal Reserve Banks desiring to engage in openin dealing in foreign bills, and boards of directors should market transactions in domestic bills of exchange shall fix a limit within which the acceptances or bills of a communicate to the Federal Reserve Board the rate they single firm may be taken. desire to establish, for review and determination. IV. Domestic hills of exchange. A bill of exchange may be defined as an unconditional order in writing, addressed by one person to another, CIRCULAR NO. il, SERIES OF 1915. Signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or WASHINGTON, December 27, 1915. determinable future time, a certain sum in money to, or to the order of, a specified person or to bearer. ELIGIBILITY OF CANDIDATES FOR DIRECTORSHIPS. A domestic bill of exchange is payable in dollars in the The Federal Reserve Board has adopted under date of United States. December 23 the following resolution: The Federal Reserve Board has determined that a bill, in order to be eligible for purchase under section 14 by a Whereas, It is the opinion of the Federal Reserve Board that persons holding political or public office in the service Federal Reserve Bank, at the rate to be established for of the United. States, or of any State, Territory, county, open-market operations— district, political subdivision, or municipality thereof, or (a) Must be a bill the proceeds of which have been used, acting as members of political party committees, can not or are to be used, in producing, purchasing, carrying, or consistently with the spirit and underlying principles of the Federal Reserve Act, serve as directors or officers of marketing goods in one or more steps of production, manu- Federal Reserve Banks. facture, and distribution; but shall not be eligible if its Resolved, That the Federal Reserve Board hereby exproceeds have been used, or are to be used, for a perma- presses to the member banks its opinion that no such pernent or fixed investment of any kind; for example, land, sons should henceforward be elected or act as directors or officers of Federal Reserve Banks; and prescribes as a conbuildings, machinery, etc., or for any investment of a dition of eligibility that candidates for election shall commerely speculative character. ply with the terms of this resolution. (6) Must have been drawn by a domestic or foreign firm, Resolved further, That copies of this resolution be sent to company, corporation, or individual upon a firm, company, every member bank and Federal Reserve Bank and to all directors of Federal Reserve Banks. corporation, or individual in the United States; but need not bear the indorsement of a member bank. While the Board is of the opinion that the policy out- (c) Must have been accepted by the drawee prior to the lined in this resolution should become effective at once, purchase by a Federal Reserve Bank unless accompanied directors of Federal Reserve Banks elected prior to the and secured by approved warehouse receipts, bills of lad- date of its adoption will not be required to resign their ing, or other such documents covering readily marketable positions as such directors until the end of the term for goods. which they were elected. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

17 JANUARY 1,1916. FEDERAL BESEKVE BULLETIN. LAW DEPARTMENT. The following opinions of counsel have been been fully met, all the net earnings shall be paid authorized for publication by the Board since to the United States as a franchise tax, except that one-half of such net earnings shall be paid the last edition of the Bulletin: into a surplus fund until it shall amount to 40 Dividends ©it Surrendered Stock. per cent of the paid-in capital stock of such bank. Member banks surrendering stock on account of liquidation or reduction in capital or surplus are entitled to From this it will appear that the stockholders cash-paid subscriptions plus one-half of 1 per cent per are limited to a- cumulative dividend of 6 per month from date of subscription, not to exceed the book cent; that is to say, if they remain stockholders value thereof. If surrendered because of transfer to anof the Federal Reserve Bank they are entitled other district member banks are entitled to accrued divito receive an amount equal to 6 per cent on dend certificates. DECEMBER 20, 19.15. their cash-paid subscriptions, and if the earn- Sir: This office has been.requested to give an ings during any one year are insufficient the opinion on the following questions: unpaid dividends become a charge on the future earnings of the bank. What dividends, if any, is a member bank entitled to receive on stock in its Federal Reserve The stock held by member banks can not, Bank which is surrendered and canceled before under the terms of the Act, be transferred or the payment of the first regular dividend— hypothecated. Accordingly, when a member (a) On account of liquidation of such mem- bank for any reason ceases to be a stockholder, ber bank; or finds it necessary .to surrender the whole or (h) On account of a reduction in the capital any part of its stock in a Federal Reserve Bank, or surplus of such member bank; and it can dispose of it only to the Federal Reserve Bank and the Act undertakes to provide a cash (c) On account of the withdrawal of its memsurrender value for such stock. bership as a result of its becoming ineligible to hold stock in the Federal Reserve Bank by rea- Section 5 of the Federal Reserve Act proson of changes made by the Federal Reserve vides in part that— Board in the geographical limits of its district. When a member bank reduces its capital Before dealing with these specific questions it stock it shall surrender a proportionate amount of its holdings in the capital of said Federal is necessary to consider the status of a member* Reserve Bank, and when a member bank volbank as a stockholder of a Federal Reserve untarily liquidates it shall surrender all of its Bank. Ordinarily a stockholder of a corpora- holdings of the capital stock of said Federal tion is entitled to share in the net earnings of Reserve Bank and be released from its stock subscriptions not previously called. In either such corporation after the payment of expenses case the shares surrendered shall be canceled and the discharge of any obligations such as and the member bank shall receive in payment interest on bonds, preferred stock, etc., which therefor, under regulations to be prescribed by constitute a prior lien on such earnings. In the the Federal Reserve Board, a sum equal to its case of Federal Reserve Banks, however, sec- cash-paid subscriptions on the shares surrendered and one-half of 1 per cent a month from tion 7 of the Federal Reserve Act, relating to the period of the last dividend, not to exceed the division of earnings of such banks, provides the book value thereof, less any liability of such as follows : member bank to the Federal Reserve Bank. After all necessary expenses of a Federal From, an analysis of this language it appears Reserve Bank have been paid or provided for, that the Federal Reserve Bank has a lien on its the stockholders shall be entitled to receive an stock for .any liability of the member bank to annual dividend of 6 per cent on the paid-in capital stock, which dividend shall be cumula- the Federal Reserve Bank. That subject to tive. After the aforesaid dividend claims have this lien the member bank surrendering its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 FEDERAL BESEEVE BULLETIN. JANUARY 1,1916. stock is entitled to receive an amount equal to In other words, it can not be assumed that its cash-paid subscriptions plus one-half of 1 Congress intended to impose a penalty for doper cent a month from the date of the last divi- ing what it specifically authorized or permitted dend, provided, this sum does not exceed the member banks to do, and considering the genbook value of the stock of the Federal Reserve eral purpose and intent of the Act the conclu- Bank. sion appears to be fully justified that such Where a member bank surrenders the whole banks are entitled to receive dividends of oneor any part of its stock after the payment of half of 1 per cent per month on their cash-paid the first dividend to the stockholders by the subscriptions whether the stock held by such Federal Reserve Bank, the amount it is entitled banks is surrendered and canceled before or to receive is clearly specified by the terms of the after the payment of the first dividend to the Act. The question under consideration, how- stockholders of their Federal Reserve Bank. ever, is what amount a member bank surren- It is necessary, however, to distinguish between dering the whole or any part of its stock is the rights of a stockholding bank, which conentitled to receive where the stock is surren- tinues its membership in a Federal Reserve dered and canceled before the payment of the Bank, and one which terminates its memberfirst dividend. ship by liquidation or which surrenders a part Considering that part of section 5 above of its holdings on account of a reduction in its quoted, without reference to other provisions capital or surplus. of the Act, it might be contended that member In either case the interest of the stockholder banks are entitled to receive no dividends if surrendering the whole or part of its stock is they surrender stock in the Federal Reserve converted into a claim against the Federal Bank before the payment of the first dividend Reserve Bank for the cash surrender value of by the Federal Reserve Bank. Such a con- stock. The amount of this claim becomes clusion, however, must be based upon the fixed as of the date of the surrender and canassumption that Congress intended to penalize cellation of the stock. As a stockholder it is banks surrendering stock before the payment entitled to cumulative dividends up to this of the first dividend and this assumption is time, but when its status is converted from that repugnant to that part of section 7 which pro- of a stockholder to that of a creditor holding a vides that "the stockholders shall be entitled claim against the bank for the cash surrender to receive an annual dividend of 6 per cent on value of the stock it is no longer entitled to the paid-in capital stock, which dividend shall cumulative dividends out of the future earnings be cumulative/7 of the Federal Reserve Bank. If the stock of Federal Reserve Banks could It is, therefore, necessary to determine— be transferred and sold a member bank could, (a) From what date such dividends may be in disposing of such stock, reasonably demand, said to accrue. a price equivalent to its cash-paid subscrip- (&) When the right to cumulative dividends tion plus accrued dividends, since such divi- ceases. dends are cumulative. It can hardly be con- (c) The maximum amount which may be tended, therefore, that Congress intended to paid for stock surrendered under circumstances prohibit member banks from receiving their above recited. due proportion of the earnings of Federal Re- Considering these three questions in the order serve Banks merely because they exercise their in which they appear: right to withdraw by liquidation, which right (a) In an opinion filed with the Board under is specifically given, or because they surrender date of October 7, 1915, and supplemental stock on account of a reduction in their capital opinion under date of November 5, 1915, this or surplus in accordance with the specific re- office reached the conclusion that dividends quirements of the Act. should accrue from the date of actual payment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 19 of subscriptions, provided, such payments are will be used in the future. To this extent this made at the time or subsequent to the date item will represent expenses paid in advance. fixed in the call of the Organization Committee There are probably other items which are in or the Federal Reserve Board for the payment the nature of investments—that is to say, of the first subscription. which represent unused supplies on hand. It (&) As above shown, the right to cumulative would be inequitable to require such items to dividends ceases from the date of the surrender be charged off during the first few months of and cancellation of stock at which time the operation and banks would be justified in stockholder becomes a creditor of the bank to apportioning this expense and charging off the extent of the cash surrender value of the such proportion as may seem equitable under stock. all the circumstances, rather than to show an (c) The maximum amount any member bank impairment of capital. surrendering its stock is entitled to receive is' If the net balance, after deducting expenses fixed by the terms of the act at* an amount from earnings, shows an amount which would equal to the cash-paid subscription plus one-half ordinarily be carried to the account of unof 1 per cent per month, provided such amount divided profits, or to the surplus account, a does not exceed the book value of the stock of member bank surrendering its stock should be the Federal Reserve Bank. The book value is entitled to its proportionate share of such net determined by adding together the capital, earnings. surplus, and undivided profits and by dividing Answering specifically the questions subthis amount by the number of shares of the mitted, this office is accordingly of the opinion Federal Reserve Bank which are outstanding that member banks surrendering stock in at that time. Federal Reserve Banks before the payment As it is customary, however, for banks to oi the first dividend are entitled to receive carry on their books certain expenses on the for such stock an amount equal to their cashasset side of the ledger, and certain earnings on paid subscriptions plus one-half of 1 per cent the liability side in accounts other than the per month from the date of subscription, surplus and undivided profits accounts, it is, of provided such subscriptions were not paid course, necessary to deduct from the gross prior to the date fixed by the Organization earnings all expenses to date and to carry the Committee or the Federal Reserve Board net balance into the undivided profit account for the first payment of subscription and proin order to determine the actual book value of vided further that the aggregate of such cashthe stock of the Federal Reserve Bank. paid subscriptions and dividends of one-half e Where the expenses exceed the gross earn- of 1 per cent per month does not exceed the ings and where there is no surplus or undivided book value of the stock of the Federal Reserve profit account from which this net debit Bank, this cash surrender value to be applied balance may be deducted, the book value of when member banks surrender stock (a) on the stock will be less than par. In such case account of liquidation of such member banks the cash surrender value of the stock of the and (6) on account of the reduction in the Federal Reserve Bank will be limited to an capital or surplus of such member banks. amount less than the cash-paid subscription. Where stock is surrendered on account of In this connection attention is called tb the a transfer of membership of a member bank fact that Federal Reserve Banks are carrying to another Federal Reserve Bank by reason in their expense accounts the expenses of or- of a change in the geographical limits of a ganization, which include the cost of preparing Federal Reserve District, a slightly different plates and dies, of purchasing distinctive paper, situation results. In this case the surrender and of printing Federal reserve notes. Many of the stock results from the action of the of the notes so printed are still unissued and Federal Reserve Board in changing the dis- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 .FEDERAL RESERVE BULLETIN". JANUARY 1,1916. tricts rather than from the voluntary action only that part of the opinion of March 1, 1915, of the bank in reducing its capital or surplus which deals with the following question: or in going into liquidation. The Act con- Can the Federal Reserve Board, by the tains no provision determining the cash sur- consolidation of two or more districts, reduce render value of the stock of a member bank the number of Federal Reserve Districts ? transferred to another district. Inasmuch, The powers of the Board relating to the however, as such banks continue as members modification of Federal Reserve Districts are of the Federal Reserve System and have sub- contained in section 2 of the Federal Reserve scribed to the stock of a bank with the under- Act. This section provides in part as follows: standing that their dividends are to be cumu- As soon as practicable, the Secretary of lative, it would seem to be reasonable to the Treasury, the Secretary of Agriculture, assume that Congress intended that such and the Comptroller of the Currency, acting banks should receive the same dividends as as 'The Reserve Bank Organization Committee/ shall designate not less than 8 nor other banks which remain members of the more than 12 cities to be known as Federal system. In this view a bank transferred Reserve cities, and shall divide the continshould receive an accrued dividend certificate ental United States, excluding Alaska, into from the Federal Reserve Bank whose stock districts, each district to contain only one of is surren4ered, and such Federal Reserve Bank such Federal Reserve cities. The determination of said organization committee shall not should pay this certificate when its earnings be subject to review except by the Federal are sufficient to pay other stockholders their Reserve Board when organized:,-Provided, That accrued dividends. the districts shall be apportioned with due Respectfully, regard to the convenience and customary course of business and shall not necessarily be M, p. ELLIOTT, Counsel. coterminous with any State or States. The Hon. CHARLES S. HAMLIN, districts thus created may be readjusted and Governor Federal Reserve Board. new districts may from time to time be created by the Federal Reserve Board, not to exceed 12 in all. Such districts shall be known as Reduction of Federal Reserve Districts. Federal Reserve Districts and 'may be desig- The Federal Reserve Act does not give to the Federal nated by number. A majority of the organi- Reserve Board the power to reduce the number of Federal zation committee shall constitute a quorum Reserve Districts determined by the Reserve Bank with authority to act. N Organization Committee. It will be observed that the Organization NOVEMBER 22, 1915. Committee is empowered— SIR: On March 1, 1915, this office filed with (a) To designate not less than 8 nor more "the Board an opinion dealing generally with than 12 cities to be known as Federal Reserve the subject of the right of the Federal Reserve cities. Board to review the determination of the (&) To divide the continental United Organization Committee, to adjust from time States * * *• into districts, each district to time the Federal Reserve Districts created to contain only one of such Federal Reserve by that committee, and to establish new dis- cities. tricts. In that opinion the question was inci- Section 2 further provides that— dentally considered wiiether or not the Federal Said Organization Committee shall be Reserve Board, under its power to review, or a authorized to employ counsel and expert aid, under its power to readjust the districts to take testimony, to send for persons and created, could legally reduce the number of papers, to administer oaths, and to make districts by consolidation or otherwise. such investigation as may be deemed necessary by the said committee in determining The Board has requested that this subject be the reserve districts and in designating the further considered, but it is understood that it cities within such districts where such Federal desires at this time to have counsel reconsider Reserve Banks shall be severally located. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. •FEDERAL BESEBVE BULLETIN". 21 The said committee shall supervise the organi- This interpretation is based upon the zation in each of the cities designated of a assumption that when Congress provided that Federal Reserve Bank, which shall include in "the districts thus created may be readjusted;; its title the name of the city in which it is it meant that the complete whole might be situated, as "Federal Reserve Bank of Chicago." readjusted and not merely that each individual The Federal Reserve Board is authorized— district was subject to change. If this be true, (a) To review the determination of the the certificate showing the Federal Reserve organization committee; cities and the geographical limits of each Fed- (5) To readjust the districts created; and eral Reserve District which the Organization (c) To create from time to time new districts, Committee is required to file with the compnot to exceed 12 in all. troller may be modified at any time by the Whatever power the Board has in the matter Federal Reserve Board in any way that it deems of redistricting the continental United States necessary or advisable. must, therefore, rest upon the interpretation to In this view it may be contended that the be given to the language— language which follows, namely, " and new dis- The determination of said organization com- tricts may from time to time be created by the mittee shall not be subject to review except Federal Reserve Board, not to exceed 12 in all/' by the Federal Reserve Board. * * * The was not intended to mean that additional disdistricts thus created may be readjusted and tricts may be created but merely, that districts new districts may from time to time be created with new lines and new territorial extent may by the Federal Reserve Board not to exceed 12 in all. be created without reference to the entity of those districts created by the Organization The question under consideration, is, can this Committee. language be reasonably construed to give the Construing this general language to mean Board power to reduce the number of Federal that the Board has an. expressed power to Reserve Districts and to liquidate or dissolve alter at will the entire plan of districts created one or more of the Federal Reserve Banks by the Organization Committee, it may then organized by the Organization Committee ? be argued that this expressed power carries If we consider the language above quoted with it such incidental powers as may be neceswithout reference to any other part of the Act sary to carry out the intent of Congress in and attempt merely to give the usual or ordithe matter. That is to say, if it becomes nary meaning to the words used it becomes imnecessary as an incident of any readjustment mediately obvious that at least two different made by the Board to change or cancel the interpretations are possible and it is, therefore, designation of a Federal Reserve city or to not free from ambiguity. It is accordingly dissolve or liquidate a Federal Reserve Bank, necessary to consider both possible interpretathe Board has an implied power to do these tions in order to determine which one is conthings as incidents of the expressed power to sistent with other parts of the Act and is in, readjust the districts. accord with the intent of Congress. If, therefore, this interpretation can be sus- On the one hand it may be argued that the tained under the usual rules of construction of power vested in the Board to "readjust the statutes the question submitted, Has the Board districts created"~ gives the Board the power the power to reduce the number of Federal not merely to change the lines of each and Reserve Districts? may be answered in the every district (preserving, however, the entity affirmative. of each individual district) but that it may in Before applying the usual rules of construcits discretion consider the whole subject de tion to this interpretation (which, for connovo and may divide the continental United venience, will be referred to as interpretation States into an entirely new set of districts. No. 1) attention is called to an alternative in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 FEDERAL RESERVE BULLETIN. JANUARY 1, 1916. terpretation which, is equally possible when the city and then to define the geographical limits language in question is considered without of the district to be served. It is, therefore, reference to other parts of the Act. clearly necessary in order to create a district Under this second interpretation it may be to designate a city and to define the limits of argued that the power to readjust the districts the district. created vests in the Board the power only to Accordingly, if the power in the Board to readjust or to change the lines of each district create new districts is construed to mean to created by the Organization Committee. That create additional districts or districts other the power to create new districts not to exceed than those previously created by the Organiza- 12 in all was intended to give the Board the tion Committee, it is clear that the Board has right to increase the number of districts if the an expressed power to designate Federal Re- Organization Committee had created less than serve cities for such districts and that this 12; that Congress did not intend that the dis- power to designate cities in those districts tricts created by the Organization Committee created by the Board does not conflict with the should have merely a temporary or experi- power of the committee to designate cities in mental status as districts, but while subject to districts which it has created. modification as to size and shape were never- On the other hand, if we construe this power theless intended to have a permanent status to mean that the Federal Reserve Board may as entities. create new districts out of two or more dis- If this view can be supported by the applica- tricts created by the Organization Committee, tion of the usual rules of construction the we must assume that the Board has the power question under consideration—whether the to nullify the designation of Federal Reserve Federal Reserve Board may reduce the num- cities made by the committee. ber of districts—may be answered in the nega- It is significant in this connection that in tive. defining the power of the Board to create new It will be observed that to make effective districts the Board is limited to a maximum the power vested in the Board under interpre- number of 12 but is not limited to any minitation No. 1, it is necessary to imply that it mum. has power as an incident of "readjustment" The Organization Committee is required to to change or cancel the designation of Federal create in the manner above shown not less than Reserve cities and to liquidate Federal Reserve 8 nor more than 12 Federal Reserve Districts. Banks. It is, therefore, necessary to con- Under the power vested in the Board "new sider whether these implied or incidental districts may be created from time to time not powers are in conflict with any expressed pro- to exceed 12 in all." If, therefore, this power visions of the Act. to create new districts is to be interpreted as Upon an examination of the statute we find giving the Board the right to reduce and to that the Organization Committee is expressly eliminate, there would seem to be no limitation authorized to designate not less than 8 nor on the Board's power to reduce, and it might more than 12 Federal Reserve cities. Let us create a less number than eight. It is hardly assume that the power in the Board to create reasonable to say that the power to create new new districts is equivalent to an expressed districts gives the Board the power to create power to designate Federal Reserve cities. such districts without reference to the action In support of this assumption the Act pro- of the Organization Committee, since in this vides that "the districts thus created may be event they might abolish all but one or two readjusted" and when we turn to the context banks. to learn how the districts were "thus created" On the other hand, the fact that a maximum we find that the Organization Committee is is placed on the new districts to be created by required to first designate a Federal Reserve the Board, but no minimum is expressed in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 23 provision which deals with this power of the It may be said to be a cardinal rule of con- Board, indicates very strongly that Congress struction that when two interpretations are ntended the number of districts created by the possible, one of which is in harmony with other Organization Committee to have a fixed and provisions of the Act and the other repugnant permanent status and to constitute the mini- to other provisions, that which is in harmony mum number to be established; that it must be adopted. Inasmuch, therefore, as inmerely intended to give the Board the power terpretation No. 1 involves the necessity of vestto increase the number to the maximum. This ing implied or incidental powers in the Board view appears to be sustained by the history of which are repugnant to other expressed prothis legislation which will be dealt with later. visions in the Act while interpretation No. 2 Considering the second implied power under is in harmony with these provisions, the second the interpretation No. 1, we are here con- interpretation should be adopted. fronted with a conflict with an expressed power While this rule is so uniform it needs little which is even more clear. citation of authority to sustain it, the language As above shown, if we assume that the Board of the court used in a few cases in which this may make an entirely new map of the districts question arose is called to the Board's attention. and may reduce the number, we must assume In the case of Montcldir v. Ramsdell, 107 that it has, as an incidental power, the right U. 8., 152, the court said: to liquidate one or more Federal Reserve It is the duty of the court to give effect if Banks. Upon referring to section 4, however, possible, to every clause and word of a statute, we find that when the necessary formalities avoiding, if it may be, any construction which implies that the legislature was ignorant of have been complied with and a certificate of the meaning of the language it employed. organization has been filed each bank becomes Following this decision of the Supreme a corporation with certain specified powers, in- Court of the United States, it is, of course, cluding the power— necessary to give effect to the provision which To have succession for a period of 20 years gives banks a period of 20 years' succession from its organization unless it is sooner disas well as-to other provisions which are inconsolved by an Act of Congress, or unless its franchise becomes forfeited by some violation of sistent with interpretation No. 1. law. Again in the case of United States v. Balti- To adopt interpretation No. 1, therefore, we more & 0. 8. W. R. Co., 159 Fed. Rep., 37, the court says: must assume that the implied power in the Board to liquidate these banks as an incident The maxims and rules adopted for the purpose of interpreting the meaning of a statute of readjustment is sufficient to overcome this require that we attend to all its provisions, expressed power in the bank to have succession and, if possible, attribute to the language in for a period of 20 years " unless sooner dis- which each is expressed a meaning which will solved by an Act of Congress, or unless its fran- permit other provisions to have their due effect. chise is forfeited by some violation of law." In the case of Bate Refrigerating Co.. v. Sulz- Such an assumption is clearly contrary to the berger, 157 U. S., 37, the court says: established rules of construction laid down by Where the language of the act is explicit, our courts. For example, in the case of In re this court has said, there is great danger in Rouse, Hazard & Co., 91 Fed. Rep. 100, the departing from the words used, to give an court in quoting with approval the decision in effect to the law which may be supposed to have been designed by the legislature. It is the case of State v. Inhabitants of Trenton, 38 Hot for the court to say, where the language N. J., Law 67, says: of the statute is clear, that it shall be so con- The legislature must be presumed to have strued as to embrace cases, because, no good intended what it expressly stated, rather than reason can be assigned why they were excluded that which might be inferred from the use of from its provisions. Scott v. Reid, 10 Pet., general terms. 524, 527. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 FEDEEAL EESEEVE BULLETIN. JANUARY 1,1916. Applying this doctrine to the present case, the reserve and central reserve cities" a numif it is clear under interpretation No. 2 that ber of Federal Reserve cities, the total number the Board may modify the districts but can so designated not to be less- than 12. not reduce the number, it would seem to be The House bill further provided that— inconsistent with the rules of construction to The districts thus created may be readjusted extend this power to include the right to reduce and new districts may from time to time be the number if such a construction is incon- created by the Federal Reserve Board hereinafter established, acting upon a joint applicasistent with other parts of the act. As said in tion made by not less than 10 member banks the case of In re Matthews, 109 Fed. Rep., 615: desiring to be organized into a new district. It is the cardinal rule of interpretation that Later in the same section the bill provided a statute should be construed not only so that that— every part of it should stand, but so as to give force, meaning, and effect to every part of it. No Federal Reserve District shall be abolished nor the location of a Federal Reserve In United States v. Jackson, 143 Fed. Rep., Bank changed, except upon the application of 785, the court said: three-fourths of the member banks. Another canon of construction is that From this it appears that according to the every part of a statute must be viewed in con- House bill the Federal Reserve Board might nection with the whole, so as to make all the alter the limits of any given district, upon the parts harmonious, if practicable, and to give a sensible and intelligible effect to each; nor application of 10 member banks, or it might should it ever be presumed that the legislature abolish a district and change the location of a meant that any part of a statute should be Federal Reserve Bank upon the application of without meaning or without force and effect. three-fourths of the member banks in such Many other cases to the same effect might district. be cited, but in view of the uniformity of de- When the bill reached the Senate it modified cisions on this subject this is considered un- the power vested in the Board to alter the lines necessary. of a given district by striking out the provision Inasmuch, therefore,•-as it will be necessary that such alterations should be made only upon to fail to give effect to other provisions of the the application of 10 member banks. The Act if interpretation No. 1 is adopted, it .re- effect of this amendment in the Senate was mains only to be considered whether interpre- clearly to vest in the Board the power to alter tation No. 2 is consistent with the context and the lines of a given district on its own motion. with other parts of the Act,, The power, however, to abolish districts and From an examination of the hearings held by to change the location of Federal Reserve the House and Senate committees while the bill Banks upon the application of three-fourths of was pending it will be found that the question the member banks was eliminated in toto by of the number of districts to be established was the Senate and this elimination was agreed to the subject of much discussion and of deliberate in conference. consideration. There were many who advo- If any inference may be drawn from the hiscated a very small number of b,anks and others tory of these amendments, therefore, it seems who contended for a large number. It was finally clear that the conferees agreed that no district determined to fix a maximum and a minimum should be abolished, even upon the application and to vest the power in a committee to be known of three-fourths of the member banks. as the Organization Committee, to establish not Interpretation No. 2, therefore, seems to be less than 8 nor more than 12 districts with consistent with the intent of Congress as indithe power in the Federal Reserve' Board to cated by the history of the bill, and since a create new districts not to exceed 12 in all. modification of the individual districts does The House bill provided that the organiza- not involve the elimination of a district nor of tion committee should designate afrom among a Federal Reserve city, and does not necessitate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. the liquidation of a Federal Reserve Bank, it NOVEMBER 19, 1915. is possible, under this interpretation, to give SIRS: YOU have asked to be advised as to effect to all other provisions of the Act in the extent of your present power to rearrange accordance with the accepted^ rules of con- Reserve Bank Districts. struction in such cases. The powers of the Board in this regard are In considering the question submitted, I am defined in section 2 of the Act. conscious of the great public importance of the The general scheme of organization of the Board's, decision in this matter and realize that Reserve System under the Act is that the the question is one upon which counsel may Reserve Bank Organization Committee shall and in fact do, differ. I have endeavored, designate not less than 8 nor more than 12 therefore, to call the Board's attention to the cities to be known as Federal Reserve cities, two possible viewpoints and to explain ^at some and shall divide the United States into dislength the reasons for conclusions reached. tricts, each district to contain only one of such Briefly summarized, it appears to me that reserve cities. Then, under direction of the any interpretation which vests in the Board Organization Committee, the national banks the power to reduce the number of districts of each such district (and eligible State banks) makes it necessary to also vest in. the Board shall organize and form a reserve bank for the implied or incidental powers which are repug- district by filing the proper certificate with the nant to other expressed provisions of the Act. Comptroller of the Currency. Each reserve That, on the other hand, \the provisions in bank then becomes a corporate entity (section 4 question are susceptible of another equally of the Act). The Reserve Board is not selected reasonable interpretation which is in harmony until the Organization Committee have comwith the spirit and purpose of the Act and pleted the districting. (Under section 10 of ; which will give-effect to all other provisions. the Act the President in his choice of the appointive members of the Reserve Board is not I. am, therefore, of the opinion, that this to select more than one from any one reserve second interpretation must be given effect and district thus created). It is clear that the that following the usual rules of construction Act intends that the Organization Committee in such cases the Board is without power to shall organize and get the Reserve System in reduce the number of districts by consolidashape to do business in advance of the selection tion, or otherwise, and that each Federal Reof the Reserve Board. serve Bank now organized is entitled to have, succession for a period of 20 years unless sooner It is equally clear, however, that the Act dissolved by an Act of Congress or unless its: intended that the work of the Organization franchise is forfeited by some violation of law. Committee in the creation of the reserve Respectfully, districts should not be final but is subject to M. C. ELLIOTT, Counsel. change by the Reserve Board. Thus section 2 of the Act, dealing with the determination of Hon. CHARLES- S. HAMLXN, Governor Federal Reserve Board. the Organization Committee as to creation of reserve districts, reads: Reduction of Federal Reserve Districts. The determination of said organization The following opinion to the effect that the committee shall not be subject to review Federal Reserve Board may under the pro- except by the Federal Reserve Board when visions, of the Federal Reserve Act reduce the organized: Provided, That the districts shali be apportioned with due regard to the connumber of Federal Reserve Districts detervenience and customary course of business mined by the Reserve Bank Organization *• * *. The districts thus created may be Committee was prepared for the Board by readjusted, and new districts may from time Mr. Joseph P. Cotton, special counsel for the to time be created by the Federal Reserve Board: Board, not to exceed 12 in all. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 FEDEBAL BESEBVE BULLETIN. JANUARY 1; 1916. It is by the proper interpretation of this most significant that the Act thus uses the same language, read in connection with the rest of word "created" to describe the determination the Act, that your questions must be answered. as to districts by the Organization Committee The language quoted confers authority upon and also by the Reserve Board. Having that the Keserve Board to act only after the deter- true meaning of the term "created" in mind, mination of the Organization Committee has and having regard to the fact that this Reserve been made. The Board is given the power to Act intended to establish a system which review the determination of the Organization should be sufficient for the changing needs of Committee, with the instruction that districts the country at all times, it seems clear that the shall be apportioned with due regard to the word "readjusted" embraces and includes the convenience and customary course of business, power, not only to change the territorial limits an instruction which, from the connection of the or boundaries of districts already established, words, is addressed to the Reserve Board. but also includes the power to reach a deter- Then the Act as quoted provides that the mination which may diminish the total numdistricts thus created may be readjusted and ber of such districts and change the reserve new districts may from time to time be created cities. In other words, it is a power to draw by the Reserve Board not to exceed 12 in all. the reserve district map afresh. The words "thus created" refer to the mode of It is notable that this simple and natural creation thus described, that is, by determi- construction of the Act has found clear exnation by the Organization Committee. The pression in an argument of the Hon. Robert L. use of the word readjusted instead of adjusted, Owen before the Reserve Board on February indicates that the Board was to have power 10, 1915, in regard to a petition of certain alter adjustment of readjustment of the banks of southern Oklahoma (at page 35 et districts as necessity should arise from time to seq. of the stenographic report of that hearing). time. The word " readjustment" implies the In that argument he laid down clearly three exercise of all the powers which were exercised points: First, that in a review of the deterupon adjustment, and thus clearly embraces a mination of the Organization Committee the review of the determination of the Organiza- review by the Board is of the action of the comtion Committee both as to reserve cities and mittee, not of the record on which they acted; districts. second, that the power of the Board to redis- It is argued that the express authority con- trict is complete (as he said " The intention was tained in the words "new districts may from to give the Board the power of the Government time to time be created" is inconsistent with itself in dealing with this system * * *); authority implied or derived from the word and, third, that the power of the Board ex- "readjusted" to decrease the number of dis- tends to a reduction of the number of reserve tricts, or to change the reserve cities. There districts. is no such inconsistency. The phrase of the The only argument proposed against Senator Act is that new districts may be "created," Owen's construction is based upon a different but the word "created" is not synonymous portion of the Act. Section 4 of the Act prowith the term increase. The Act does not con- vides that when the Organization Committee fer express authority to "increase" districts, shall have established districts each national the word "increase" does not appear in the bank in the district so constituted shall become Act. The word "create" means to mark out, eligible for membership in the reserve banks, to delineate, to determine, districts. Thus the that certain of the eligible banks shall then authority to "create" new districts is the exer- subscribe for stock and make a certificate cise of the same power which the Organization which shall be the organization certificate of Committee exercised in the beginning, and it is the reserve bank of the district, and further Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

m JANUARY 1,1916. FEDERAL RESERVE BULLETIN. provides that the reserve bank of the district which is ample to permit the termination of shall, when organized, have, among other cor- a reserve bank or reserve district if necessary porate powers, the following: to carry it out. The fact that section 4 in stating the limit of the corporate existence of " Second. To have succession for a period of 20 years from its organization, unless it is a reserve bank provides it shall be 20 years sooner dissolved by an Act of Congress, or un- unless sooner dissolved by Act of Congress or less its franchise becomes forfeited by some forfeited for violation of law is not a declaraviolation of law." tion ef intention that, or a promise that, the In connection with this language there is reserve bank may not cease to function or also to be remembered the language of section exist for some other reason. If it be such a 11 of the Act, which names among the specific promise, to whom is the promise made ? Not powers of the Reserve Board the following: to any member bank, because it is conceded by every one that any particular member (h) To suspend, for the violation of any of bank may be detached from a reserve disthe provisions of this Act, the operations of any Federal Reserve Bank, to take possession trict and made ineligible for membership by thereof, administer the same during the period a shift of district boundaries. < Since that can of suspension, and, when deemed advisable, to be done to one member bank it can be done liquidate or reorganize such bank— to any member bank in the district, and no and in the same connection is to be borne in one of them has any right to object to redismind the first sentence of section 3 of the Re- tricting because it results in ending its conserve Act, which reads: nection with the reserve bank of which it was a member. The fact that the Act does not Each Federal Reserve Bank shall establish provide machinery for terminating the existbranch banks within the Federal Reserve District in which it is located, and may do so in ence of a reserve bank or redistricting—if it the district of any Federal Reserve Bank which be an omission at all—is no reason for decidmay have been suspended. ing that the clear language of section 2 (which These three provisions last above quoted pro- grants the power to readjust the districts) vide machinery for terminating the existence of means something less than it says. The lanany reserve bank by Act of Congress or, on vio- guage of section 2 gives a complete power to lation of law, by the disciplinary authority of redistrict, and there follows from that comthe Reserve Board. They are in themselves plete grant of power, by necessary implication, clear. The argument which it is sought to the authority to take all steps necessary for build upon them is that inasmuch as the Act that end. thus provides in detail machinery for termina- It is important to remember that the Board tion of the life of a reserve bank (whenever has already by redistricting, in the case of Congress wishes or the law is violated), but New Jersey banks, transferred banks from provides no machinery for termination of the one district to another. By that action the life of a reserve bank if such termination Board has already "created" new reserve disshould arise from re districting, therefore power tricts. By such action it has already changed to redistrict given by section 2 must be con- the corporate powers of the reserve banks instrued as not including power to terminate a volved. If section 4 of the Act contains a reserve bank or a reserve district. That is the promise that the corporate powers of each reargument, but it is, it seems, a strained and serve bank should exist until Congress end unnatural one. There is no vagueness about them or the law is violated, then that promise section 2 of the Act. The words "review," has been broken already, since the former cor- "created," "readjusted" in that section are porate powers of the Federal Reserve Bank of clear and grant a clear and unlimited power Philadelphia have been taken away and new Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 FEDERAL RESERVE BULLETIN. JANUARY 1,1916. and lesser corporate powers given. Yet if that Decision of Supreme Court of Illinois relating to Section action was not authorized by the Act, then 11 (k) of the Act. section 4 of the Act absolutely nullifies .all Counsel to the Federal Reserve Board power of readjustment under section 2. No issued the following statement for the press such result will be adopted unless unequivocal when questioned about the decision of the language requires it. Illinois Supreme Court denying to national It is also to be remembered that the Reserve banks in Illinois the right to act as trustee, Board has not as yet reviewed or affirmed in executor, administrator, and registrar of stocks any way the determination of the Organization and bonds: Committee as to all the districts, and what This is one of several suits pending in differaction it takes at tiiis time will be the action ent State courts in which the question of the of original review (under section 2 of the Act) constitutionality of section ll(k) of the Federal as well as of readjustment. Reserve Act is involved. The Federal Reserve If those two words "review" and "readjust- Board has asked leave to file briefs and to be heard by counsel in only one of these cases. It ment" mean anything, they mean that the will not be argued until the latter part of Board may do over again, and differently, January or in February. whatever the Organization Committee did, There are two fundamental questions ineven if such action mean the changing of re- volved; first, whether Congress has authority serve cities and such redrafting of the map of under the Constitution of the United States to the districts as will mean the elimination of vest national banks with corporate powers to act in these capacities, and second, whether the some district or the combination of one disexercise of such powers will contravene the trict with another. The power in the Reserve laws of the State in which any particular Board is at any time to make a new district national bank is located. map. There is no limitation on that power The permits granted by the Board to national save the expressed commands of section 2 banks to act as trustee, executor, administrator, and registrar of stocks and bonds that in so districting the country there shall expressly authorize the exercise of these be not less than 8 nor more than 12 districts, powers only when iiot in contravention of the and "that the districts shall be apportioned laws of the State in which such banks are with due regard to the convenience and cus- located, but the question of, the constitutiontomary course of business." ality of the Act which is presented to the courts will be argued by Counsel for the Board. Very respectfully, yours, Some of these cases will be^ appealed to the JOSEPH P. COTTON. Supreme Court of the United States and its FEDERAL RESERVE BOARD, decision on the constitutional question will be Washington, D. C. binding on all State courts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL EESERVE BULLETIN. 29 of the Boston clearing house banks for the GENERAL BUSINESS CONDITIONS. week ending December .18, 1915, were General business and banking conditions are $192,350,968 as compared with $144,277,498 described in reports made by Federal Eeserve for the corresponding week last year and Agents for the 12 Federal Eeserve Districts. $196,767,337 for the week ending November Below are given in detail digests of conditions 13, 1915. in the various districts substantially as reported The comptroller's call for November 10, by Federal Reserve Agents.. 1915, shows that member banks in this district are borrowing about $3,000,000, or about DISTRICT NO. 1—BOSTON. $400,000 less than at the time of the Septem- The general improvement in business in this ber call, as compared with approximately district has continued throughout the month $5,000,000 at this time last year. with renewed, vigor. This upward trend Building and engineering operations in New started in the lines affected by emergency England from January 1 to December 15, 1915, orders and has spread until now business in were the largest, with the exception of 1912, general is better than it has been for a long of any year for 15 years, and amounted to time. Domestic business is becoming a larger $171,820,000, as compared with $159,280,000. factor each month, although in some industries Exports at the port of Boston for November, the improvement is due to a large extent to 1915, were $9,219,676, an increase of $95,812 the check upon importations because of the over November, 1914. Imports at the port of war. Stocks of merchandise have, been al- Boston during the same month were $13,lowed to run unusually low and this condition 011,267, an increase of $6,172,526 over the together with the sudden retail demand has corresponding month last year. put a strain on many manufacturers to fill This increase was due more to small receipts orders. On the other hand manufacturers are in November, 1914, than to large receipts in inclined to keep their business well in hand and November, 1915, the importations in the latter are cautious about extending beyond such month being about on an average with the last business as is in sight. Labor is in good six months this year. The principal increases demand and in some lines is hard to obtain. over last year were in sugar, wool, and hides. Money seems to be sentimentally a trifle Receipts of the Boston post office for Novemfirmer although there is no change in rates. ber, 1915, show an increase of more than Surplus reserves' while considerably reduced in $100,000 over November, 1914, or about 16 the large centers are still so large that the per cent. The first 15 days of December, 1915, reduction has not materially affected money showed an increase over last year of approxrates. Call loans 3 per cent, commercial paper imately $45,000, or about 11| per cent. 3 to 3J per cent for short dates and 3-| to 4 per The Boston & Maine Railroad reports for Occent for six months, town notes 1.94 to 2.30 tober, 1915, a surplus of $442,281, as compared per cent, 90-day bankers7 acceptances 2 per cent with $224,114 for the same month last year. upward. New York, New Haven & Hartford Railroad re- Loans and discounts of the Boston banks ports for October, 1915, a surplus of $715,333, show an increase over last month of $5,233,000 as compared with $115,765 for October, 1914. and demand deposits have decreased There were 191 failures in this district during $14,722,000 in the same time. The amount November, 1915, with liabilities of $1,255,200, "due to banks" by the Boston banks has as compared with 180 in November, 1914, with decreased $18,415,000 during the month. The liabilities of $1,550,300. excess reserve of Boston banks has decreased Woolen mills are doing a large volume of from $65,512,000 on November 13, 1915, to business and are running nearly at capacity. $31,584,000 on December 18,1915. Exchanges Worsted business has continued to improve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 FEDERAL RESERVE BULLETIN. JANUARY 1,1916. throughout the month. There is a shortage of of dyes and tanning extracts. Shoe manuwool the world over and prices continue to facturing, one of the largest manufacturers readvance. ports production well sold up, domestic ship- The boot and shoe industry continues to ments increasing month by month and for the improve and some factories report an output half year above all records. Sugar, a very considerably above normal especially in the large domestic and foreign trade and general ? lower-priced shoes. conditions very satisfactory. The cotton-mill situation continues favorable, Wholesale grocers report business brisk and especially in fine goods, and mills are running the outlook satisfactory. Meat packers say to capacity. Buying is somewhat better than that tonnage holds up, and sales and collections last month. are improving. Prices of crude petroleum and The paper trade is showing a good improve- gasoline have advanced sharply. Pennsylment and business is reported better than for vania crude oil is quoted at $2.10 per barrel, some years. against a recent low price of $1.35. Gasoline Retail merchants are doing an excellent advanced to 21 cents per gallon on December Christmas business in all classes of goods, in- 20. The production of pig iron in November cluding the more expensive lines. Many mer- was 3,037,308 tons, against 1,518,316 tons in chants state that their present Christmas November, 1914. Unfilled orders of the United sales are the largest in their history. States Steel Corporation were reported as There has been a good demand for high- 7,189,489 tons, or 3,864,897 tons more than at grade bonds, both by private investors and the same time last year. savings banks. The dissolution of the Anglo- Railroad earnings clearly reflect the in- French bond syndicate has had a somewhat creased activity in trade, aggregate net earnunsettling effect on the bond market, but as ings in October being $30,079,562 over October, that issue becomes steadier the general bond 1914. Eastern roads are profiting from the market is expected to improve. heavy export movement, but inadequate shipping facilities have caused a great congestion DISTRICT NO. 2—NEW YORK. of export freight on cars and in warehouses in Trade has been unusually active and contin- and near New York. Total exports from the ues to expand. Retail and department stores port of New York in November were $192,- , are doing a large holiday business and whole- 992,335, an increase of $106,229,738. Imsale houses are receiving heavy buying orders ports amounted to $97,666,815, an increase of for general merchandise as well as holiday $23,888,845. goods. Houses consulted on various lines have Gold brought in during the month amounted reported as follows: to $49,836,918, against $1,955,760 last year. Dry goods and textiles show a good demand Transactions on the New York Stock Exchange, for all seasonable woolen, silk, and cotton fab- sales of bonds $126,976,000 par value, an inrics. Business in all colored goods is still seri- crease of $22,853,500 over the preceding ously hampered by the shortage of dyes. month, and 17,474,763 shares of stocks, a de- Leather prices are firm and the demand good crease of 9,129,939 from October. There was a for heavy and upper leather. There has been steady increase during the month in the demand some slackening in orders for leather and mili- for investment bonds. tary leather goods for export. Heavy hides Other statistics for November, 1915, comsold at lower prices during the past month, but pared with November, 1914, are the following: there is a strong market for calfskins at ad- Exchanges through the New York Clearing vancing prices. Tanners also feel the shortage House, $11,829,419,735.07, an increase of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL KESEKVE BULLETIN. 31 $6,429,978,380.26. New incorporations in the Operations in some textile industries con- Eastern States, $190,075,000, increased $108,- tinue to be hampered by lack of dyestuffs, but 425,000. New York State failures, 263, with there has been some little improvement in this liabilities of $3,048,949, a decrease of 49 in matter, and generally the condition of the number and $3)566,861 in liabilities. New textile business is unexpectedly satisfactory. York City building permits, 39, for structures The lumber business, which has been deto cost $3,894,400, increased 28 in number and pressed for a long period, is feeling the in- $2,388,600 in amount. fluence of the new building operations and New York Clearing House banks on Decem- the general improvement in business. Prices ber 18 reported loans, etc., $3,190,270,000, de- have advanced, and there is a reported scarcity posits $3,394,045,000, and excess reserves in some grades of lumber. $158,858,000. Since November 1 these figures Retail trade, which is always a feature at show increases as follows: Loans, etc., $146,- this season of the year, shows a remarkable 041,000, deposits $124,234,000, while excess advance over last year. Stores report inreserves have decreased $37,357,000. crease in sales from 20 to 35 per cent. The Call money remained practically unchanged community seems to be well supplied with at If per cent for renewals. Time money on money, and the increase in sales is both in collateral ranged from 2\ per cent to 3J per quantity and quality of the goods purchased. cent. Bankers' acceptances sold readily at 2 Collections are reported good, and a large per cent and were quoted up to 2f per cent. percentage of slow accounts have been Prime commercial paper sold throughout the paid. month at 3 per cent, with occasional transac- Difficulty is reported in numerous cases in tions at 2f per cent. getting goods, due partly to slowness in de- Demand sterling rates gradually strength- livery by manufacturers and delayed shipened during November from 4.63-J- to 4.71 at ments by the railroads. There is a tendency closing rates. Paris checks advanced from on the part of retailers and jobbers to abandon 5.99J to 5.84. German exchange was quoted the hand-to-mouth policy they have pursued early in November at 81f, but gradually de- the last few years in their purchase of goods clined to a new low rate of 75f on December 16. and hereafter to carry larger stocks. In the past few months there has been a DISTRICT NO. 3—PHILADELPHIA. very great decrease in surplus reserves of the General business conditions in this district Philadelphia banks. The excess reserve, which continue to improve. Banks throughout the was $55,000,000 on October 4, was reduced to entire district report that conditions are most $19,000,000 on December 20. If the banks promising. Factories of all kinds are running now had to maintain the same reserves that full time, some of them with double shifts, and they did under the old law, there would be a many are making the greatest output in their deficiency in their reserves of about $14,000,000. history. Pay rolls are large, and labor, both Banks are beginning to feel the improvement skilled and unskilled, is scarce. The demand in business through increased applications for for iron and steel has led to the repairing and loans. While there is scarcely any change in putting into operation of iron furnaces that the rates for money, bank funds seem to be have been idle for years. Heavy railroad well employed. If jobbers and retailers find it traffic has resulted in large orders for cars and necessary to carry larger stocks of goods, it is locomotives and other railway supplies that probable that large demands will be made were unlooked for a few months ago. upon the banks for funds for that purpose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 FEDEEAL EESEEVE BULLETIN. JANUARY 1,1916. DISTRICT NO. 4—CLEVELAND. Garment manufacturers are experiencing difficulty in connection with the scarcity of Steel mills in this district are at full capacity dyes. Wholesalers and jobbers report liberal on what they now have on their books for the buying in November and the first part of Defirst six months of next year, and requirements cember. Collections are generally good, with in sight will easily take care of the entire year. the exception of a little falling off which usually Pig iron is selling at $20, and is in6 strong deprecedes the holidays. Retail merchants are mand. Nothing is in sight to change these moving an unusual volume of business. conditions for the first half of 1916. The The steady cold weather has put the new corn middle western steel manufacturers are actucrop into shape to market; the quality is not so ally beginning to feel the embarrassment due good as last year. The sugar-beet crop is good to the eastern freight congestion.- This is and proved profitable to the farmers. Tobacco probably the most serious feature connected money is now coming in, representing sales at with the local situation. prices showing an advance of 33 J per cent over There has been an advance of $1 a ton in last year. the price of coke, it being the highest in several Post-office receipts in the six large centers years. The advance in coal has been small in this district amounted to $1,076,091.75 for compared with the advance in coke. The best November, an increase of $156,929.11 over the posted people in the coal trade are predicting same months last year, or 17 per cent. Howextraordinary prices for coal for the first half ever, there was an 8 per cent decrease from the of 1916, this situation being due as much to figures reported for October, 1915. Building uncertainty regarding labor as to admittedly permits in the same six cities show $4,975,887 large increases in the consumption of fuel. for the month of November, against $3,921,284 The Bureau of Immigration reports 93,416 for the same month last year, with an increase aliens admitted to the United States during the of 807 in the number of permits. first four months of the present fiscal year, A number of changes in ownership of induswhile in the corresponding four months of 1913 trial properties have occurred during the past (the year before the war) the number admitted month. These operations have brought into was 535,911. These figures are a matter of the district large amounts of new money. concern not only to coal operators but to all Banks are therefore plentifully supplied with employers of labor. funds, and rates continue low. High-grade Favorable weather conditions prolonged the investment bonds are scarce and in good deseason of lake navigation until about Decemmand. The full employment of labor has ber 15, the ore shipped from the upper lakes stimulated savings deposits very decidedly. amounting to 46,600,000 tons, which is the Bank clearings in the six centers for the first 14 record. It is estimated that sixty to sixty-five days of December amount to $293,509,216.33, million tons will be required to be brought against $212,954,478.24 for the same period last down in 1916. year, being an increase of 37.8 per cent. Activity in the oil fields of this district is quite marked. The unusual advance during the DISTRICT NO. 5—RICHMOND. month of December in the price of all grades of During the past month trade, in practically crude petroleum has greatly stimulated the all lines has been in a satisfactory position, and demand for tubing, oil-well topis, and machin- there has been no retrogression from the ery used in preparation for active field work. advances of October and November. The Wholesale lumber dealers and mills report department stores and retailers now are genmarked improvement in the last 30 days. erally busy. Settled cold weather and the They are certain the improvement will be holiday season have materially stimulated lasting. Business is again almost normal. business. There is no lack of employment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 88 Skilled labor of almost every kind is in demand Reports from Tennessee indicate a continued at full prices. sluggishness in the tobacco market. In view With the softening in the price of cotton in of the British orders in council permitting to- November there was noted a decided tendency bacco shipments, heavy shipments were anticito store some of the unsold portion of the crop. pated; but there is still a scarcity of vessels While the market has recovered, this same and no reduction in rates and it is probable that tendency persists in many directions, but not some time will elapse before any material change to such an extent as to prevent the liquidation is made in the marketing of this product. of debts due for settlement. Manufacturers of textiles report good busi- Lumber is noticeably improving, under a ness, and in many instances continue to work broadening demand. Coal operators are fully overtime. engaged on a profitable basis. Credit is easy, Bank clearings are far in excess of any and, while there is no evidence of abuse, is previous month, and the postal receipts of the being freely used by manufacturers and jobbers Atlanta division are in excess of any previous in caring for fresh orders withheld over a long November and December in the history of the interval. While both sellers and buyers of office. commodities express themselves as satisfied with the present outlook, neither, as a class, DISTRICT NO. 7-CHICAGO. are overtrading. The result is a healthy trade General improvement in business and manucondition. General conditions are highly facturing in this district as shown in former satisfactory. reports has been well maintained during December. DISTRICT NO. 6—ATLANTA. Reports received from member bank officers The closing days of the year 1915 present a in all the large centers in the district are in general activity and expansion in all lines, pre- agreement to the effect that manufacturers, dicting a sound and permanent prosperity for wholesale houses, and retail stores are doing the Sixth Federal Reserve District in the coming business on an even more than normal basis. year. The general business conditions of the Through portions of the district there is a district are on a sound basis, with strong and great deal of complaint among the farmers due wide advancement in some particular lines. to the corn proving of a poorer quality and a The retail trade during the month, and more less yield than was anticipated. especially the holiday season, has been ex- Bank clearings for last month in 23 cities in ceedingly bright, wholesalers and jobbers re- this district show gains in all cases, and in perporting that salesmen remain on the road centages 16 per cent gain over 1913 and 28 per longer than usual at this season of the year, cent over 1914. with orders extremely satisfactory, in view of Holiday trade in the large centers has exthe arrival of preinventory days. ceeded expectations and has reached unusual Twenty-six furnaces are in operation in the proportions, with high priced articles more in Birmingham district, and the December pro- demand. duction of pig iron was in excess of any previous Weather conditions are favorable to the month, though hardly sufficient to fill orders on growing winter wheat crop, though the acreage hand. Prices range from $14 to $15 per ton, reported is less than at this time last year. as compared with $8 to $9 per ton a year ago. Marketing of cattle and hogs is at an in- In the Anniston, Ala., iron and manufacturing creasing rate, but farmers are not largely shipdistrict, all plants are reported in operation. ping their grains. The Anniston Ordnance Co., a concern newly Commercial paper rates at Chicago continue organized for the manufacture of war muni- at the low figures of 3 to 3| per cent. tions, is installing machinery and expects to be Rediscounting for member banks by the in full operation the first part of the year. Federal Reserve Bank of Chicago has this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

34 FEDERAL RESERVE BULLETIN. JANUARY 1,1916. month exceeded the figures of any date since from the Southern States, has resulted in comthe opening, the amount being $3,500,000, and parative quietness in this market. 85 per cent thereof being for account of country The temperature throughout the month may banks. be said to have been above the normal, while the rainfall was somewhat less than usual. DISTRICT NO. 8—ST. LOUIS. The ground, however, contained plenty of From reports received during November, moisture for fall plowing, and the favorable business prospects in this district are in excel- weather assisted in the final gathering of the lent condition. This may be said to apply to cotton crop. Final figures of the various practically every industry in this territory. crops in the district are not available at this The large shoe manufacturers report heavy writing, but from all indications the harvests gains in shipments for the month. Through have been abundant. While the cotton crop these gains they have overcome the losses in is not as large this year as last, at present prices shipments incurred last winter and show an it is remunerative to the farmer. Cotton was increase in shipments during the current year. probably raised this year from 1 to 2 cents Other wholesale interests, such as millinery, cheaper than at any time in the past 10 years, clothing, dry goods, hardware, lumber, wooden and this, together with the prevailing price ware, and various manufacturing companies of over 11 cents, should show farmers a handall report gains in shipments. From the tone some profit. Cotton seed is also much higher of their reports business men are generally than it was a year ago. Altogether the southoptimistic. The St. Louis post office reports ern planters may be said to have had a successthe largest receipts it has ever had for the ful season. month of November and shows a gain of over Winter wheat has now been planted through- 16 per cent as compared to November, 1914, out the district. The acreage in the northern This general feeling of confidence resulted in States of the district is somewhat less than in early and liberal holiday buying which has 1915, but the southern States seem to have materially benefited the retail houses, espe- recognized the advantage of getting away from cially in the larger cities. the one-crop standard and have increased their Another index of the general favorable con- wheat acreage accordingly. Generally speakdition is found in reports from various rail- ing, the condition of the crop on December 1 roads in this district. Sixty or 90 days ago is somewhat lower than last year, but it there appeared to be a surplus of cars and this would seem that a slight decrease at this season has been turned into a shortage which may be should not materially affect the size of the said to be general. The railroads are employ- 1916 crop. ing more men; their earnings have increased; The banking interests of the district conthey are in the market for equipment and ap- tinue to note an unusual lack of demand for pear to be buying more freely than for some funds at this season. In this connection an time past. interesting comparison is furnished by an Little change has occurred in the live-stock examination of reports of St. Louis banks as market in the past 30 days. There has been of October 31, 1914, May 1, 1915, and Novema slight increase in the demand for cattle and ber 10, 1915. These reports show that the higher prices may accordingly be expected. holdings of cash and exchange by the St. Louis The heavy receipts of hogs have had a tendency banks have increased steadily during the past to keep the price of hogs down. Foreign Gov- 12 months, the gain for the period being apernments have practically withdrawn from the proximately $40,000,000. The total loans on horse and mule market, and this, together the other hand have decreased with some reguwith the lack of the season's demand for mules larity. On November 10 this year the total Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 35 loans and discounts were approximately Great Lakes navigation closed at the Du- $23,000,000 less than on October 31, 1914. luth-Superior ports on the 13th instant, with The total deposits of these banks show a gain all contracts for eastbound grain shipments during this same period. From October 31> filled, and a total record for the season of 1914, to November 10, 1915, individual de- 94,359,000 bushels, or an increase as compared posits showed a gain of approximately $20,000,- with last season of 1,575,000 bushels shipped. 000; time deposits a gain of approximately Ore tonnage figures will show a very large in- $2,500,000, and bank deposits a gain of over crease, but are not yet available. $17,000,000, or a total gain during this time Grain has been moving into the terminals of about $41,000,000. It is apparent that more actively, but in face of a phenomenally banks are still holding large excess reserves. active period at the Minneapolis and outside As a rule they are in position to take care of mills terminal stocks have had much diffithe demands of ^their customers and still have culty in climbing above the 10,000,000 bushel surplus funds to invest. The rate on commer- mark, and the elevators are short about 15,000,cial paper is considerably below the normal, the 000 bushels of wheat of what was in store at best names selling at a rate of approximately 3^ the same time a year ago. Prices have slowly per cent for maturities up to six months. This climbed from less than a dollar to $1.20 and low rate hardly tempts banks to invest. In $1.25, with no signs of a decline. The outside some cases banks have invested at least a part demand for wheat continues very heavy. of their surplus funds in bonds, and this in a Crop-year receipts at Minneapolis and Duluth measure is responsible for the marked activ- for mid-December were approximately 48,000,ity in the bond market. The average rates to 000 bushels greater than a year ago. The high customers in the larger cities is approximately price has moved quite a little wheat which 5 per cent, with rates in smaller communities farmers were holding, but there is still a large somewhat higher. amount held back. The clearings of the Federal Reserve Bank Retail holiday trade has been brisk at all for October again broke all records, the bank points. Wholesale lines are in good condition. during that time having cleared over 183,000 Collections are excellent. The lumber trade items with a total of over $77,000,000. The continues to revive and is getting back to somewhat increased demand for funds evi- normal. Industrial concerns are aciive, with denced in November resulted in a larger much new business. Labor is fully employed business being done, so that the bank showed at good wages. The outlook for 1916 is excela profit over operating expense for the month. lent, and expressions from all lines of business are very hopeful and optimistic. DISTRICT NO. 9—MINNEAPOLIS. Crop estimates on corn have been revised DISTRICT NO. 10—KANSAS CITY. as a result of evidence during the month that the proportion of soft corn is larger than was Probably at no time in the history of the dissupposed. Not more than 20 per cent of the trict, taken as a whole, has the wholesale trade crop is sound and merchantable, and the re- been so active and satisfactory as at the present mainder is of varying value for feeding pur- time. Jobbers in all parts of the district report poses. A large proportion turns out to be so unprecedented sales, with collections far above immature as to have practically no value, and the average. The mail-order business espein some sections farmers are having difficulty cially is extremely active. Retailers report inin carrying their stock. This situation has creased holiday trade and splendid collections. prompted an aGtive movement of hogs and In some sections winter wheat is in need of cattle to market. moisture, but is in good condition despite the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 FEDERAL RESERVE BULLETIN. JANUARY 1,1916. fact that the district has not been favored with Building permits issued during the month of normal precipitation. November, 1915, as compared with November, There has been a general movement of wheat 1914, in the principal cities of the district are to the markets, and while the quality has been here presented: somewhat disappointing, the price has more than offset that defect. This movement to the 1915 1914 Increase. markets has been in progress for the past 30 to City. 40 days, and it is quite likely the exceedingly No. Amount. No. Amount. No Amount. strong demand that has existed is now over and Kansas City $724,115 220 $341,220 that it will only be normal from now on. Omaha 153 656,075 72 133,583 522,492 Denver 191 312,085 235 134,410 177,675 The deposits in banks, as a result of the move- Lincoln 46 186,705 25 39,475 147,230 Oklahoma City 55 99,765 8 9,915 89,850 ment of wheat and live stock, have generally Kansas City, Kans 61 86,802 50 50,435 36,427 Topeka 46 69,650 24 35,105 34,545 increased throughout the district, and there has St. Joseph.. 63 64,816 49 36,410 28,406 Cheyenne 26,290 4 11>645 4,645 been a lessening in the demand for money. The banks of the district have been able to take care of the legitimate requirements of their cus- A like degree of building activity prevails in tomers, and this, too, without rediscounting to the rural sections. the usual extent with their correspondents. It The railroads continue to give records of inis more than likely that the high mark has creased distribution. No serious car shortage been passed. has been experienced, but the full rolling and The prevailing rates of discount have not ma- motive equipment of practically all railroads terially changed during the past 30 days, and of the district is fully employed. range from 5 per cent to 8 per cent, according to The heavy movement of live stock to the locality and security offered. market centers continues, with prices above the The following is a comparative statement of average. It is asserted that of the millions of postal receipts for the month of November, beef cattle in the United States to-day nearly, 1915, at the principal offices in this district, if not quite, one-third are within the boundashowing in each instance substantial increase ries of District No. 10. What this involves in over the corresponding month of 1914: investment and carrying charges is evidenced by the fact that there is probably $200,000,000 1915 1914 Increase. loaned in the district, with live stock as collateral security. K Om an a s h a a s , C N it e y b , r M .., o $2 1 8 35 9 , , 9 8 2 1 7 6 . . 7 3 0 5 $ • 2 1 4 1 6 4 , , 8 0 7 0 9 6 . . 8 6 0 3 $ 2 4 1 2 , , 9 9 2 3 1 6 . . 0 5 7 5 Little, if any, of the feed and forage re- Denver, Colo 113,126.47 105,194.15 7,932.32 quired to carry the live stock of this district St, Joseph, Mo 33,916.85 28,945.89 4,970.96 Oklahoma City, OHa. 40,622.33 35,901.48 4,725.74 comes from without the district. Wichita, Kans. 29,828.36 25,606.25 4,222.11 Topeka, Kans 33,223.45 29,625.05 3,598.40 This is the season of the year when the mines Muskogee, Okla 10,360.71 8,922.48 1,438.23 Cheyenne, Wyo 4,906 92 3,744.40 1,162.52 of the district producing semianthracite, bitu- Kansas City, Kans 17,403.65 16,681.98 721.67 Lincoln, Nebr .... 34,664.22 34,393.68 270.54 minous, and lignite coal begin to assume their greatest activity, and the present condition of Trade activity of the district is further rethat industry does not differ from previous flected in the operations of the various clearing years. house associations, which show material in- The lead and zinc industry has enjoyed the creases over November, 1914, as follows: greatest prosperity in its history. In the 11 months ending November 30 the output, of 1915 1914 Increase. zinc ore in the Joplin district was 555,323,525 Kansas City... $394,019,925 1293,292,373 $i00,727,452 pounds, which sold at $20,694,186. During Omaha........ 90,955,822 71,609,855 19,345,967 the corresponding period in 1914, the output Denver 56,437,152 44,461,398 11,975,754 St. Joseph 34,732,087 31,655,926 3,076,161 was 474,189,212 pounds and sold at $8,898,709. Wichita 19,431,066 15,767,312 3,663,754 Oklahoma City 14,110,600 11,853,700 2,256,900 This is an increase in tonnage of about 17 per Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDEEAL KESEBVB BULLETIN. 37 cent, and, owing to the increase in price, is an formerly in order to destroy the hibernating increase of 132 per cent in value. chinch bugs, bollworms, boll weevil, and other The production of lead for the 11 months insects that reduced the 1915 crops. was 81,500,000 pounds valued at $2,145,000, There is no question that diversification was compared with 77,000,000 pounds valued at more practiced in the cotton-producing regions $1,782,000 in the same period of 1914. the past season than ever before and the In August, 1915, crude oil was selling in the effect has been most beneficial. This has conmid-continent field of Kansas and Oklahoma tributed to the liquidation made by farmers at less than 40 cents per barrel. The price has this fall. Considerable cotton is still being risen by 5-cent and 10-cent changes until on held; in fact> it is estimated that one-third December 15, 1915, oil was selling at $1.20 per of the crop is unmarketed. When it is sold, barrel. The highest price ever paid for crude if the satisfactory prices still prevail, it will oil in this field was some 12 years ago, when it tend to increase our available funds and add sold for $1.35 per barrel. It is predicted that to the liquidation which has already taken the former record price will be passed in the place. near future. Banks in the rice-producing district report The district is free of any serious labor dis- a lull in the market for that commodity, and turbances, and all labor, common and skilled, this is evidenced by the member banks availis very generally employed. ing themselves of the facilities of this bank in Kansas City is the greatest distributing point" aiding their customers in handling the crop. in the world for yellow-pine lumber, and while Manufacturers of nearly all lines of goods the industry has been quiet during the major have been receiving good orders and are portion of the year, during the past 60 days the encouraged by the outlook. From reports demand has greatly increased and brought received collections continue good. Retailers with it corresponding increases in price. have enjoyed a fair business and with the With the banks of the district now able to approaching holidays indications point to an meet the demands of regular customers at unus- excellent trade. Weather conditions haveually low rates of interest; with orders for contributed largely to this situation, as the manufactured products booked far ahead; markets are crowded with out-of-town buyers with the agricultural and live-stock industry and trade is brisk. in such excellent condition; and with full gran- A seasonable movement of poultry to aries and flattering crop prospects, the begin- northern and eastern markets is reported ning of the new year 1916 finds District No. 10 by commission merchants at good prices. in a strong position. Orders during the past few weeks have shown a marked increase, which is a continuation DISTRICT NO. 11—DALLAS. of the development of this business to large This is a season of the year in agricultural proportions. sections in this district when little work is The lumber and oil industries, which* are being done by farmers other than the prepara- quite important in the southeastern part of our tion of their land for the planting of next year's district and constitute the principal business, crops. Conditions in this industry therefore are reported unusually active. Increased remain practically the same as our previous prices are obtaining and present indications report. Dry weather the latter part of Novem- are for a continuance of this condition. ber and early December was unusually bad for Member banks report demands for accomfall plowing, and while it is not customary modations as only moderate and rates conin this section to break the land during these tinue easy. The banks show increased deposits months, it was necessary this year more than above the average at this season. The volume Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 FEDERAL RESERVE BULLETIN. JANUARY 1,1916. of loans held by this bank has decreased offered for storage in Seattle until shipping slightly during the past 30 days. There has, space can be had. however, been a change in the character of High prices for Hawaiian sugar have brought our offerings. Quite a decrease of farmers7 unusual profits to producers, and there have notes in small amounts and an increase in been important transactions in stocks of sugar commodity paper is noted and live-stock paper companies. Alaska commerce is rapidly exin substantial amounts has been discounted panding, with prospect of exceeding more freely. $100,000,000 this year. Salmon packing, which Building operations, from reports received has had a good year, is one of its important throughout the district, are about normal for industries. Salmon exports from the United this season. Labor is in good demand and States approximated $1,000,000 in November. well employed. In Dallas particularly build- Mining continues active with unusual output ing operations show an increase over last and profits for copper, which centers chiefly in year, and this, with both railway and traction Utah and Arizona. Increasing consumption terminals in course of construction here, have of petroleum and its products continues with provided occupation for an appreciable number advancing prices. of men. The lumber situation is steadily readjusting to a more favorable status. Leading railroads, DISTRICT NO. 12—SAN FRANCISCO. showing record earnings, are buying important During the past month the event most amounts of ties. favorable in its possible benefits has been the The year has been favorable for agriculture announced purchase by the American Inter- and live stock. It is estimated 40 per cent of national Corporation of the Pacific Mail steam- wheat in eastern Washington, Oregon, and ers with the purpose of returning them to the southern Idaho has been sold by growers at Pacific trade, with intimation of probable profitable prices. Abundant crops of raisins large extension of the service. Inadequacy of and prunes have commanded good prices. ocean transportation during the year has been Since November 15 between 3,000 and 4,000 intensified by the closing of the Panama Canal. cars of oranges have been shipped from Porter- That commerce through Pacific coast ports ville district, at unusually high prices. Rice has nevertheless shown large gains indicates acreage is rapidly increasing, and Imperial the important possibilities with merchant Valley will plant an added 100,000 acres of shipping. Interesting recent cargoes have cotton. Precipitation, so vital as a crop basis been one of silk received at Seattle from Japan, in this district, was brought above normal by valued at $2,500,000, said to exceed any widespread rains in first half of December. hitherto; and one of wool, also record in Increasing activity is noted in real estate. amount, received at San Francisco from Aus- Bank deposits and bank clearings show contralia. It is reported that 60,000 bales of tinued gains, with reported increased loan cotton destined for China and Japan have been requirements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 39 DISTRIBUTION OF DISCOUNTS BY* SIZES Of the total number of bills discounted, 36.3 AND MATURITIES, per cent, and of the total amount, 47.5 per cent 5 The total discounts during November of were bills in amounts from $1,000 to $5,000, commercial paper, exclusive of bankers' ac- compared with 35.7 and 53.7 per cent shown ceptances, amounted to $18,269,700, compared the month before. The total of largest-size with $15,050,800 in October and $14,405,000 bills (in amounts of over $10,000) discounted in September. Large increases in discount constituted nearly 22 per cent of the total disoperations for the month are shown for the counts for the month, compared with about 12 three Southern and the Kansas City banks. per cent in October and about 14 per cent in Commodity paper, largely cotton paper, dis- November. A considerable part of these bills counted at 3 per cent, constitutes 23.9 per cent is made up of commodity (chiefly cotton) paper of the total discounts for the month, as against discounted by the Atlanta bank and its New Orleans branch. The Kansas City bank re- 13.7 per cent in October. About 62.6 per cent ports over $1,000,000 of the largest-size notes, of the total amount of commodity paper discomposed chiefly of packing-house, lumber, counted during the month is credited to the Atlanta bank and its New Orleans branch and and live-stock paper. Small bills (in denominations up to $250) 34.8 per cent to Richmond. Trade acceptances constituted about 21 per cent of the total numdiscounted during the month amounted to ber, though only about 1.5 per cent of the total $430,100, compared with $629,100 in October amount of all the paper discounted during the and $819,500 in September. month. The Richmond bank reports 706 and As the result of the enlarged discount activity the Atlanta bank 644 of small bills handled of the Southern banks, their share in the total during the month. Two-thirds of the number discounts of the month increased to over 65 per and amount of all small bills discounted during cent from 60 per cent in the preceding month. the month are reported by these two banks. The share of the four banks in the Middle West and Northwest was about 30 per cent, while Of the total paper discounted during the that of the four Eastern banks was less than month 34.1 per cent was 60-day and 37.2 per 5 per cent. The total amount of paper dis- cent 90-day paper, while over 2.5 millions, or counted since November, 1914, was $167,- 13.7 per cent of the total, was agricultural and 516,500, of which $100,606,200 is credited to live-stock paper maturing after 90 days at the the three Southern banks, $24,530,700 to the time of rediscount. About two-thirds of the four Eastern banks, $35,122,500 to the four 60-day and 6-month paper, over three-quarters Western banks, and $8,257,100 to San Fran- of the 90-day paper, and about one-half of the cisco. 30-day paper discounted during the month are reported by the three Southern banks. The number of bills discounted during the The number of member banks accommodated month was 9,652, compared with 9,285 in during November was 837, compared with 796 October and 9,173 in September. The average size of the paper handled by all banks was in October and 762 in September, and con- $1,893, compared with $1,621 in October, stituted about 11 per cent of the entire number $1,570 in September, $1,324 in August, and of member banks. About 52 per cent of the $1,249 in June, showing a practically con-^ banks accommodated were Southern banks. tinuous increase since the early summer of the Of the total number of member banks in the year. The November average was $1,845 for three Southern districts about 28 per cent the three Southern banks, $1,990 for the four availed themselves of the discount privileges banks in the Middle West and Northwest, during the past month. Kansas City reports $1,995 for the four Eastern banks, and $1,985 110 member banks accommodated during the for the San Francisco bank. month, as against 150 in October. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

40 FEDERAL EESEBYE BULLETIN. JANUARY 1,1916* Commercial paper, exclusive of bankers' acceptances, rediscounted by each of the Federal Reserve Banks during the month of November, 1915, distributed by sizes. NUMBER OF PIECES AND AMOUNTS. [In thousands of dollars.] To $100. O t v o e r $ 2 $ 5 1 0 0 . 0O t v o e r $ 5 $ 0 2 0 5 . 0 O t v o e $ r 1 , $ 0 5 0 0 0 0 . O to v e $ r 2 $ ,5 1 0 ,0 0 0 . 0 O to v e $ r 5 $ ,0 2 0 ,5 0 0 . 0 O to v e $ r 1 0 $ , 5 0 , 0 0 0 0 . 0 $1 O 0 v ,0 e 0 r 0. Total. Per cent. Bank. o ft It 5 Boston 0.3 1.4 22 9.5 20 16.4 12 21.7 63.0 43.5 15.0 85 170.8 0.9 0.0 New York 1.8 13 5.2 10 7.5 16.0 68.2 53.6 64 152.3 0.6 0.8 Philadelphia... 5 .9 25 9.3 33 26.6 67.0 35.9 17.0 113 156.7 1.2 0.9 Cleveland * 12 2.3 23 13 9.3 83.5 97.4 126.3 143 .328.4 1.5 1.8 Richmond 24119.2 465 84.2 531211.4 515 415.3 522 907.8 3561,419.0 809.3 39 746.7 2,782 4,612.9.28.8 25.2 Atlanta........ 249120.1 395 67.1 327 126.6 359 271.6 403 689.9 2741,107.0 799.0 701,634.4 2,189 4,715.7 22.7 25.8 Chicago. 2.0 72 13.6 155 64.1 227 186.9 250 434.4 1"'1 4 408.3 122. " 26.5 869 1,258.2 9.0 St. Louis -- .6 29 5.3 13.9 72 55.7 100 172.9 73 299.7 265.8 56.0 357 869.9 3.7 Minneapolis... .5 33 6.4 76 27.9 150 100.7 156 233.8 41 140.2 100.6 10.3 477 620.4 4.9 3.4 Kansas City... 1.9 85 15.8 103 38.2 270 197.4 322 507.6 133 480.6 323.1 181,064.7 1,000 2,629.3 10.4 Dallas 9.2 191 32.1 251 95.4 282 212.3 341 561.9 222 830.5 478.8 22 415.8 1,513 2,636.0 15.7 14.4 San Francisco. .1 1.1 10 3.5 18 13.9 14 22.3 13.7 20.8 43.7 60 119.1 0.6 0.7 Total. 699 53.91,308 232.0 1,574J614.6 1,969 1,513.6 2,215^3,718.81,284 4,963.5 444 3,160.2 159 4,013.1 >, 65218,269.7100.0100.0 PERCENTAGES OF AMOUNTS OF EACH CLASS TO TOTAL. Over Over Over Over Over Over To $100 $250 $500 $1,000 $2,500 $5,000 Over Total. $100. to to to to to to $10,000. $250. $500. $1,000. $2,500. $5,000. $10,000. Boston 0.2 0.8 5.5 9.6 12.7 36.9 25.5 8.8 100.0 New York • -• 1 2 3.4 4.9 10.5 44.8 35.2 100.0 Philadelphia - .6 5.9 17.0 42.8 22.9 10.8 100.0 Cleveland .7 2.9 2.8 25.4 29.7 38.5 100.0 Richmond - .4 1.8. 4.6 9.0 19.7 30.8 17.5 16.2 100.0 Atlanta .4 1.4 2.7 5.8 14.6 23.5 16.9 34.7 100.0 Chicago • .2 1.1 5.1 14.9 34.5 32.4 9.7 2.1 100.0 St Louis - .6 1.6 6.4 19.9 34.5 30.6 6.4 100.0 Minneapolis ... .1 1.0 4.5 16.2 37.7 22.6 16.2 1.7 100.0 Kansas City. . .1 .6 1.4 7.5 19.3 18.3 12.3 40.5 100.0 Dallas - -- - .3 1.2 3.6 8.1 21.3 31.5 18.2 15.8 100.0 San Francisco - .1 • 9 2.9 11.7 18.7 11.5 17.5 36.7 100.0 Total .3 1.3 3.3 8.3 20.3 27.2 17.3 22.0 100.0 Commercial paper, exclusive of bankers' acceptances, discounted during November by each of the Federal Reserve Banks, distributed by States and maturities as of date of rediscount. [In thousands of dollars.] Paper Paper Paper Number Number Paper maturing maturing maturing Paper Total com- Districts and States. of member of banks maturing after 10 after 30 after 60 maturing mercial banks. accom- within days but days but days but after 90 paper redismodated. 10 days. within within within days. counted. 30 days. 60 days. 90 days. District No. 1—-Boston: 73 1 0.8 22.5 1.9 25.2 Maine . 70 2 17.0 16.0 17.5 50.5 Massachusetts 169 1 10.0 10.0 20.0 20.0 60.0 New Hampshire 56 Rhode Island . ... 18 Vermont 48 2 24.9 10.2 35.1 Total . 434 6 34.9 38.0 58.5 39.4 170.8 District No. 2—New York: New Jersev 131 3 9.0 32.1 32.4 73.5 New York 484 5 19.6 11.2 48.0 78.8 Total 615 8 9.0 51.7 43.6 48.0 152.3 District No. 3—Philadelphia: Delaware . ... . - - 24 2 4.8 3.5 8.0 16. a New Jersey 70 3 12.6 36.0 8.1 2.5 59.2 Pennsylvania 534 11 4.5 16.7 21.4 30.9 7.7 81.2 Total - 628 16 17.1 57.5 33.0 41.4 7.7 156.7 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 41 Commercial paper, exclusive oj bankers1 acceptances, discounted during November by each oj the Federal Reserve Banks, distributed by States and maturities as oj date oj rediscount—Continued. [In thousands of dollars.] Paper Paper Paper Number Number Paper maturing maturing maturing Paper Total com- Districts and States. of b m an e k m s b . er o a f c c b o a m nk - s m w at i u th r i i n ng d a a f y te s r b 1 u 0 t d a a f y te s 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 pa m pe e r r c r i e a d l ismodated. 10 days. within within within days. counted. 30 days. 60 days. 90 days. District No. 4—Cleveland: Kentucky ... ... 72 7 28.8 68.6 38.5 135.9 Ohio 375 7 18 5 13.7 25 7 13.7 71 6 Pennsylvania 300 6 1.7 2.9 102.6 7.0 1.7 115.9 West Virginia.. 14 1 5.0 5.0 Total.... 761 21 1.7 55.2 184.9 71.2 15.4 328.4 District No. 5—Richmond: District of Columbia . 14 1 36.9 39.7 194.6 271.2" Maryland 98 5 '15.2 25.1 3.0 43.3 North Carolina 81 35 8.1 231.0 563.4 765.2 9.4 1,577.1 South Carolina.. . . 73 42 12.5 187.3 768.9 725.9 25.3 1,719.9 Virginia 137 33 2.5 76.5 329.2 436.7 15.8 860.7 West Virginia 104 12 7.9 77.5 55.3 140.7 Total 507 128 23.1 539.6 1,793.9 2,202.8 53.5 4,612.9 District No. 6—Atlanta: Alabama 95 42 5.3 107.6 217.0 439.1 247.1 1,016.1 Florida ... 55 24 9.2 70.0 178.2 182.7 10.3 450.4 G eorgia 116 74 101.8 505.5 602.4 462.9 1,672.6 Louisiana 5 5 75.1 249.5 688.4 1,013.0 Mississippi 18 5 60.4 58.8 32.8 152.0 Tennessee 97 31 9.8 62.9 146.8 179.0 13.1 411.6 Total 386 181 24.3 477.8 1,355.8 2,124.4 733.4 4,715.7 District No. 7—Chicago: Illinois 317 20 10.0 9.5 82.6 92.4 85.5 280.0 Indiana 197 10 21 3 20 9 29 8 28 3 100 3 Iowa 348 62 46.8 234.8 180.7 351.0 813.3 Michigan 77 2 2.0 1.0 18.0 15.1 36.1 Wisconsin 51 1 20.0 8.5 28.5 Total 990 95 12.0 78.6 376.3 326.5 464.8 1,258.2 District No. 8—St. Louis: Arkansas 61 7 88.4 18.6 48.1 155.1 Illinois 157 11 38 1 50 8 45 0 133 9 Indiana 61 3 19.2 71.4 29.7 120.3 Kentucky 69 7 2 1 8 53 1 55 1 Mississippi 17 4 11.8 13.3 6.5 31.6 Missouri 81 14 55.5 71.6 23.5 18.1 23.5 192.2 Tennessee 20 8 2.5 9.9 125.6 43.7 181.7 Total 466 54 58.0 201.1 292.3 250.0 68.5 869.9 District No. 9—Minneapolis: Michigan . . . 31 1 2.9 2.1 2.5 7.5 Minnesota 279 33 1.8 11.1 67.9 41.1 171.2 293.1 Montana 65 4 11 2 5 8 7.4 24.4 North Dakota 152 7 1 i 3 3 24 9 6.1 35.4 South Dakota 118 14 1.1 .4 17.3 14.4 135.5 168.7 Wisconsin 88 7 17.1 29.2 24.9 18.4 1.7 91.3 Total 733 66 20.0 44.7 126.7 107.1 321.9 620.4 .District No. 10—Kansas City: Colorado 120 3 3 1 9 3 24 7 34.0 71.1 Kansas 220 29 5.7 127.4 254.5 120.8 135.1 643.5 Missouri 52 9 5.3 529.0 467.2 202.7 37.9 1,242.1 Nebraska 20S 38 1.5 18 8 68 8 126 7 124.2 340.0 New Mexico. 9 Oklahoma 307 31 1.6 39.5 79.7 159.3 52.5 332.6 Wyoming 33 Total '.. 949 110 14.1 717.8 879.5 634.2 383.7 2,629.3 District No. 11—Dallas: Arizona 6 Louisiana 26 4 102 4 153 9 43 3 299.6 New Mexico . . 28 4 2.0 12.9 4.7 56.1 75.7 Oklahoma 43 9 9.2 43.0 16.6 11.3 80.1 Texas. 545 112 141.0 836.0 823.7 379.9 2,180.6 Total 648 129 254.6 1,045.8 888.3 447.3 2,636.0 District No. 12—San Francisco: Alaska 1 Arizona 7 1 15 6 15.6 California 266 13 3 6 34 8 9.5 47.9 Idaho 58 2 4 6 2 5 7.1 Nevada 10 Oregon. . 86 3 20.8 1.3 22.1 Utah 23 Washington. 78 4 22.7 3.7 26.4 Total... 529 23 - 51.7 57.9 9.5 119.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

42 FEDERAL RESERVE, BULLETIN. JANUARY 1,1916. Commercial paper, exclusive of bankers' acceptances, discounted during November by each of the Federal Reserve Banks> distributed by States and maturities as of date of rediscount—Continued. RECAPITULATION. Paper Paper Paper Total Number Paper maturing maturing maturing Paper Total number of banks maturing after 10 after 30 after 60 maturing commercial Districts and cities. of member accommo- within 10 days but days but days but after 90 paper re- Per cent. banks dated. days. within 30 within 60 within 90 days. discounted. reported. days. days. days. No. 1—Boston 434 34.9 38.0 58.5 39.4 170.8 No. 2—Few York 615 9.0 51.7 43.6 48.0 152.3 No. 3—Philadelphia.... 628 16 17.1 57.5 33.0 41.4 7.7 156.7 No. 4—Cleveland 761 21 1.7 55.2 184.9 71.2 .15.4 328.4 1.8 No. 5—Richmond 507 128 23.1 539.6 1,793.9 2,202.8 53.5 4,612.9 25.2 No. 6—Atlanta. 386 181 24.3 477.8 1,355.8 2,124.4 733.4 4,715.7 25.8- No. 7—Chicago 990 95 12.0 78.6 376.3 326.5 464.8 1,258.2 6.9 No. 8—St. Louis 466 54 58.0 201.1 292.3 250.0 68.5 869.9 4.S No. 9—Minneapolis 733 66 20.0 44.7 126.7 107.1 321.9 620.4 3.4 No. 10—Kansas City... 949 110 14.1 717.8 879.5 634.2 383.7 2,629.3 14.4 No. 11—Dallas 648 129 254.6 1,045.8 447.3 2,636.0 14.4 No. 12—San Francisco.. 529 23 51.7 57.9 9.5 119.1 .7 Total for November. 837 214.2 2,516.6 6,242.0 6,791.2 2,505.7 18,269.7 100.0 Percent 1.2 13.8 34.1 37.2 13.7 100.0 Totals for— October 7,649 165.2 1,995.2 5,327.4 5,671.0 1,892.0 15,050.8 September. 7,630 762 131.7 1,698.2 6,180.0 5,306.5 1,088.6 14,405.0 August 7,610 693 320.2 1,380.1 4,990.9 4,520.1 1,022.4 12,233.7 July 7,606 796 103.4 1,612.3 4,512.7 5,294.4 1,715.4 13,238.2 June. 7,607 785 1,810.3 3,903.3 5,187.2 2,503.2 13,404.0 May 7,605 716 1,631.5 3,800.8 4,331.1 2,382.3 12,145.7 April 7,611 617 1,246.5 3,628.5 4,202.0 1,638.6 10,715.6 March 7,614 570 1,798.6 5,257.4 5,162.9 1,180.8 13,399.7 February.. 7,617 469 2,957.4 5,421.8 3,265.8 885.3 12,530.3 January 7,610 398 4,109.3 3,627.0 2,365.1 611.4 10,712.8 Amount of trade acceptances '•discounted by each of the Federal Reserve Banks during the month of November, 1915, distributed by maturities. [In thousands of-dollars.] Federal Reserve Bank. P i a n p g e r w m it a h t i u n r- P i a n d p g a e y r a s f m t b er a u t t 1 u 0 r- P i a n d p g a e y r a s f m t b er a u t 3 t u 0 r- P i a n d p g a e y a r s f t m b er a u t 6 t u 0 r- P i a n p g e a r f m ter a t 9 u 0 r- a T c o c t e a p l t a tr n a c d e e s Per cent. « 10 days. within 30 days. within 60 days. within 90 days. ' days. discounted. New York 0.9 0.9 0.2 Cleveland 5.6 5.6 1.1 Richmond 2.6 5.9 109.5 27.7 145.7 29.1 Atlanta, including New Orleans branch. 83.5 61.8 57.8 2.5 205.6 41.0 St. Louis 1.0 9.4 3.2 .2 13.8 2.7 Kansas City... 71.8 71.8 14.3 Dallas 37.9 37.9 7.6 San Francisco 10.4 9.5 19,9 4.0 ' Total for November 3.6 142.3 174.5 168.8 12.0 501.2 100.0 Total for October 2.8 46.2 210.9 357.3 11.9 629.1 Total for September 34.3 98.2 176.7 10.3 319.5 Grand total 6.4 222.8 483.6 702. 8 34.2 1,449.8 1 Included in the total of commercial paper, shown above. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 43 Amounts of commodity paper 1 discounted by each of the Federal Reserve Banks from Sept. 8, date of first discount, to Nov. SO, 1915, inclusive. [In thousands of dollars.] Amount of Amount of Amount of Total amount commodity commodity commodity of paper dispaper dis- paper dis- paper dis- counted during Federal Reserve Bank. counted during counted during counted during September, September, October, November, October, and 1915. 1915. 1915. November, 1915. Richmond „ 96.0 364.4 1,523.4 1,983.8 Atlanta (including New Orleans branch). 807.3 1,657.2 2,739.1 5,203.6 St. Louis . 31.2 15.0 46.2 Minneapolis 1.5 12.5 14.0 Dallas 2q 4.8 83.7 90.8 San Francisco2 .. 35.7 1.5 37.2 Total. 905.6 2,094.8 4,375.2 7,375.6 i Included in the total of commercial paper shown above. 2 All discounted at regular rates. Classes of commodity paper discounted by each Federal Reserve Bank to close of business on Nov. 30, 1915. Atlanta Commodity. Richmond. a O nd rl e N a e n w s St. Louis. Min l n is e . apo- Dallas. Sa c n i sc F o r . a 1 n- Total. branch. Cotton $1,983,844 $4,774,683 $800 $89,331 $6,848,658 Rice.. . 1,522 1,522 Cottonseed cake 75,000 75,000 Sugar . . . 308,332 308,332 Yarn . 10,000 10,000 Peaches (evaporated) . . 10,000 10,000 Wheat 25,000 $10,138 $35,701 70,839 Seed.... .. . . . . . .. 10,000 10,000 Corn . 2,000 2,000 Oats 3,000 3,000 Grain... 1,539 1,539 Merchandise 10,352 10,352 Timber... * 529 529 Warehouse receipts 3,821 3,821 Pig iron. 20,000 20,000 Total.. .. . .. . .. 1,983,844 5,203,544 46,152 13,959 90,853 37,240 7,375,592 1 All discounted at regular rates. Amounts of commercial paper, exclusive of bankers' acceptances, held by each Federal Reserve Bank on the last Friday of the month, Nov. 26, 1915, distributed by maturities. [In thousands of dollars.] Paper Paper 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 y te s r b 1 u 0 t d a a f y te s 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 60 days. days. days. days. Boston 32.0 78.5 54.3 17.0 181.8 0.5 New York 35.0 122.2 106.3 18.8 282.3 0.9 Philadelphia 47.6 59.0 43.5 22.4 7.7 180.2 0.5 Cleveland '. 71.0 122.4 267.7 89.3 86.3 636.7 1.9 Richmond ,165.1 1,746.9 2,834.9 1,142.9 47.3 6,937!1 21.2 Atlanta, including New Orleans branch ,069.0 1,546.8 2,743.3 1,503.0 1,023.3 7,885.4 24.0 Chicago 248.9 517.1 910.6 409.3 828.6 2,914.5 8.9 St. Louis 348.5 538.5 527.7 215.7 100.9 1,731.3 5.3 Minneapolis 294.2 302.0 361.2 137.8 430.6 1,525.8 4.7 Kansas City 636.4 1,133.8 1,281.0 820.4 375.2 4,246.8 12.9 Dallas ,134.3 1,210.6 2,077.3 597.7 545.5 5,565.4 17.0 San Francisco 91.0 215.4 302.1 63.8 34.7 707.0 2.2 Total.. 5,173.0 7,593.2 11,509.9 5,038.1 3,480.1 32,794.3 100.0 Per cent 15.8 23.1 35.1 15.4 10.6 100.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 FEDERAL RESERVE BULLETIN. JANUARY 1,1916. ACCEPTANCES. Bankers1 acceptances, by classes, held by the Federal Reserve Banks each week. [In thousands of dollars.] Nonmember banks. Bate. 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. banks. Nov. 29 10,902 4,549 275 396 16,122 Dec. 6 12,311 5,172 275 396 18,154 Dec. 13 12,535 5,285 269 516 18,605 Dec. 20 . . . 13,678 5,854 284 769 120,585 i Acceptances indorsed by member banks: Trust companies' acceptances, $96,000; private banks' acceptances, $292,000; total, $388,000. Distribution of bankers' acceptances held by Federal Reserve Banks, according to schedules on hand Dec. 20, 1915, by classes of acceptors and sizes. To $5,000. O to v e $ r 1 0 $ , 5 0 , 0 0 0 0 . 0 O t v o e $ r 2 $ 5 1 ,0 0 0 ,0 0 0 . 0 O t v o 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 ! | Total. Per Class of acceptors. cent. a. s 3ft §ft 3ft a Sft "A Member banks.. 649,649 1,361,351 5,404,600 !, 468,029 2,019,703 1,775,086 74613,678,418 66.5 Trust companies 418,495 918,669 1,061,992 507,026 1,555,401 1,392,160 361 5,853,743 28.4 State banks 135,000 22,500 126,727 46 284,227 1.4 Private banks... 21,557 479,417 144,279 57,546 44 768,607 3.7 Total 1,224,701 2,368,328 7,072,736 79 3,119,334 49 3,632,650 3,167,246 1,197 20,584,995 100.0 Percent 5.9 11.5 34.4 15.2 17.6 15.4 100.0 Amounts of acceptances held by the several Federal Reserve Banks at close of business on Fridays, Nov. 26 to Dec. 17, 1915 [In thousands of dollars.] Boston Y F o e r w k. d P e h lp i h la i - a. C la le n v d e . - m R o ic n h d - . la A n t t - a. c C a h g i- o. Lo S u t. is. M ap i o n l n 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 t t e r a m l . Acceptances maturing within 10 days: Fov. 26 325 276 110 59 195 12 992 Dec. 3 635 878 216 134 296 64 2,426 Dec. 10 400 166 413 100 61 21 21 1,194 Dec. 17 667 624 667 110 50 198 124 101 2,673 Acceptances maturing after 10 days, but within 30 days: Fov. 26 801 1,044 769 134 100 263 121 108 111 3,536 Dec. 3. .... 765 676 1,145 110 100 198 124 73 133 3,390 Dec. 10 979 1,285 831 121 223 153 87 142 3.902 Dec. 17 736 1,086 445 117 179 75 132 2,925 Acceptances maturing after 30 days, but within 60 days: Fov. 26 1,861 2,593 555 319 566 287 200 140 294 6,815 Dec. 3 1,680 2,470 861 267 568 248 190 141 238 6,663 Dec. 10.. 2,178 2,464 955 305 789 260 210 104 271 7.536 Dec. 17 2,478 2,330 248 19 745 250 179 131 226 7,704 Acceptances maturing after 60 days, but within 3 months: Fov.26.... 2,131 1,435 345 120 433 112 77 74 109 4,836 Dec.3 2,256 1,591 672 225 546 166 113 107 151 5,827 Dec. 10 1,920 782 186 375 135 97 140 145 6,532 Decl7.. 2,140 2,531 441 255 38 456 185 120 106 167 6,439 Total acceptances held: Fov. 26 5,118 5,348 1,779 632 100 1,457 520 370 329 526 16,179 Dec3 5,336 5,615 2,894 736 100 1,608 622 421 586 18,396 Dec. 10 ... 6,253 5,835 2,981 612 100 1,448 569 388 579 19.164 Dec. 17 6,021 6,571 2,651 730 50 1,578 432 377 626 19,741 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN". 45 Amounts of bankers' acceptances purchased by the several Federal Reserve Banks each month from date of first purchase (Feb. 19, 1915) to Nov. 30, 1915, distributed by maturities. [In thousands of dollars.^ Boston. Y N o e r w k. d P e h lp il h a i - a. C la le n v d e . - m R o ic n h d - . la A n t t - a. c C a h g i o - . Lo S u t. is. M ap i o n l n i e s. - K C a i n t s y a . s Dallas. c F S i r s a a c n n o - . Total. Acceptances maturing within 30 days: February . March . ......... 371 84 39 141 67 10 41 61 814 April .....................: 25 25, 25 75 May 2 2 June 141 141 July 43 43 August 39 103 42 37 36 29 28 314 September 25 50 3 78 October . 402 41 50 493 November . 4 6 141 151 Total . 470 739 385 101 141 103 42 69 61 2,111 Acceptances maturing after 30 but within 60 days: February........... 56 56 March 135 141 249 508 27 47 152 1,259 April .......... 29 456 50 25 14 16 280 870 May ......... .. 56 454 62 57 159 201 46 45 200 1,280 June 15 436 57 33 74 12 627 July . . . . . .. n 276 237 33 71 24 13 4 23 698 August 269 121 18 35 18 17 17 512 September 17 55 30 16 26 9 35 25 211 October 15 98 29 67 101 17 23 43 17 761 November. 366 109 506 75 36 5 19 12 1,780 1,018 Total 1,668 2,350 1,261 746 608 347 169 179 726 8,054 Acceptances maturing after 60 days but within 3 months: February 340 1,604 339 200 127 2,610 March 895 2,832 524 384 1,244 153 41 6,284 April......... 520 791 412 1,16 243 101 87 259 543 3,072 May 587 412 108 16 17 13 307 124 1,584 J Ju u l n y e . .. .......... 1,0 5 4 5 6 7 2 1 , , 5 9 0 7 6 7 4 5 9 2 3 1 26 1 5 6 4 3 2 7 6 1 27 A 6 A 1 1 7 7 8 1 2 9 7 0 2 1 3 2 5 0 3 4 , , 9 9 3 99 2 August. 1,007 1,443 140 115 593 | 87 87 202 347 4,021 September 741 1,557 994 107 100 351 $4 60 51 96 4,151 October . 1,023 2,196 351 269 570 246 186 134 245 5,220 November.. 2,326 1,784 62 316 667 225 173 160 275 5,988 Total 9,042 17,102 3,944 1,804 100 4,131 1,090 1,081 1,371 2,196 41,861 Total acceptances bought: February 340 1,660 339 200 127 2,666 March..................... 1,030 3,344 857 931 1,412 67 210 82 424 8,357 April................... 549 1,272 437 141 293 126 101 275 823 4,017 May............ 643 868 170 73 159 218 59 352 324 2,866 June ...... . . .. . ... 572 3,083 550 49 111 44 29 27 235 4,700 July................. 1,063 2,253 801 298 497 300 191 194 143 5,740 August 1,063 1,815 303 170 628 141 116 247 364 4,847 September 781 1,662 994 137 100 367 120 72 86 121 4,440 October........ 1,791 2,335 430 336 671 263 209 177 262 6,474 November.... ........ ... ... 3,348 1,899 709 316 742 261 178 179 287 7,919 Total 11,180 20,191 5,590 2,651, 100 4,880 1,540 1,292 1,619 2,983 52,026 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 FEDERAL RESERVE BULLETIN. JANUARY 1,1916. 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, Dec. 3 to Dec, 23, 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 - . 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 f s o o t t e r a m l • . Gold coin and certificates in vault: " Dec. 3 ^.... 14,590 147,834 6,200 10,794 5,414 33,965 1,772 2,519 6,222 4,107 4,722 244,229 Dec. 10 ......r 14,318 151,607 7,042 10,042 5,350 4,879 1,690 2,642 8,270 4,121 4,869 251,810 Dec. 17 14,445 153,635 10,240 9,749 5,365 5,306 2,240 2,654 8,371 4,119 4,390 257,373 Dec. 23 13,888 173,377 11,339 9,470 5,318 5,324 35,914 2,915 2,696 8,374 4,046 3,536 276,197 Gold settlement fund: Dec.3 5,295 9,415 5,169 9,269 8,705 1,359 6,164 7,420 5,120 3,835 9,071 8,878 79,700 Dec. 10 3,678 994 6,747 I 9,696 9,391 2,217 4,747 7,522 4,183 2,083 9,223 7,579 68,060 Dec. 17 3,188 8,021 6,327 9,855 9,783 3,017 4,521 6,668 4,112 1,064 9,668 10,106 76,330 Dec. 23. 3,331 6,613 5,169 10,410 8,805 2,720 1,698 6,243 3,988 1,722 9,319 9,942 Gold redemption fund: Dee. 3 55 375 245 35 107 341 21 1,252 Dec. 10.. 55 375 285 35 107 341 21 1,292 Dec. 17 55 367 321 27 107 271 1,184 Dec. 23. 118 355 315 26 107 267 1,224 Legal-tender notes, silver, etc.: Dec.3,-.. 77 26,856 2,775 1,065 118 278 135* 18 275 32,681 Dec. 10. 122 21,287 2,733 1,054 116 75 2,348 137 18 251 28,441 Dec. 17 27 21,060 2,583 1,127 65 154 1,334 58 18 300 219 26,978 Dec. 23..... i 6 4,000 2,455 1,133 65 206 1,244 20 265 220 9,673 Total reserve: Dec.3.... 19,968 184,160 14,181 21,128 15,288 7,296 40,918 9,362 7,687 10,453 13,794 13,627 357,862 Dec. 10... 18,124 173,943 16,559 20,792 15,232 7,456 44,075 9,384 6,873 10,753 13,936 12,476 349,603 Dec. 17.. 17,666 182,771 19,150 20,731 15,580 8,798 42,714 8,993 6,814 9,842 14,277 14,529 361,865 Dec. 23 17,231 184,108 18,963 21,013 14,543 8,565 38,856 9,237 6,734 10,468 13,852 13,484 357,054 Commercial paper: Dec.3.. 238 264 157 620 7,530 7,977 2,981 1,612 1,456 4,314 5,221 33,050 Dec. 10. 211 275 155 651 7,857 7,877 3,447 1,563 1,535 4,202 5,121 675 33,569 Dec. 17 204 249 142 619 7,716 8,046 3,466 1,442 1,419 3,985 5,096 628 33,012 Dec. 23 224 239 128 577 7,584 3,388 1,431 1,346 3,762 5,106 578 32,662 Bankers' acceptances: Dec.3 5,336 5,615 2,894 736 100 1,608 622 421 586 18,306 Dec. 10 6,253 5,835 2,981 612 100 1,448 569 388 343 ! 579 19,164 Dec. 17 6,021 6,571 2,651 730 50 1,578 648 432 377 ! 626 19,741 Dec.23.... 6,701 7,540 2,609 726 100 1,919 640 434 650 21,759 United States bonds: Dee. 3 1,973 2,004 4,110 952 1,188 1,662 1,000 13,875 Dec.10....: 1,973 2,330 4,200 952 1,298 1,662 1,000 14,401 Dec. 17. 1,973 2,330 4,206 952 1,304 1,672 100 1,000 14,523 Dec.23 1,973 2,330 4,206 970 1,304 1,871 420 1,000 15,060 Municipal warrants: Dec.3.. 2,965 6,635 1,648 2,831 75 335 1,013 430 393 63 624 17,821 Dec. 10 2,853 6,493 1,595 2,817 75 335 1,483 417 375 598 17,997 Dec.17 2,911 1,486 2,112 2,820 82 335 1,500 397 924 403 501 13,543 Dec.23 2,984 1,771 2,195 82 330 1,550 397 925 383 417 14,094 Federal reserve notes, net Dec.3 1,021 11,755 373 224 1,799 750 770 1,426 18,118 Dec. 10 1,3.87 15,584 300 388 1,832 1,392 1,017 Dec.17 15,287 305 219 1,781 143 1,234 1,144 20,939 Dec.23 14,163 278 313 1,695 810 1,925 21,008 Due from other Federal Reserve Banks, net: Dec.3 846 6,741 2,645 1,132 2,371 6,860 1,081 3,676 979 823 3,246 i 19,775 Dec. 10 1,060 5,690 2,769 1,744 2,618 3,216 2,430 3,720 536 881 5,174 i 19,718 Dec. 17 2,827 ?,333 3,186 1,223 2,228 5,850 2,854 4,076 1,157 744 3,137 121,331 Dec.23 2,489 2,636 2,426 2,012 1,685 8,230 2,021 4,558 1,518 1,194 3,676 124,977 All other resources: Dec. 3 363 2,099 202 152 1,007 161 61 1,058 592 84 6,552 Dec. 10 485 363 670 341 57 937 232 251 71 1,123 716 89 5,335 Dec. 17 413 388 628 243 74 396 124 340 80 537 106 4,322 Dec.23... 323 406 671 199 70 422 178 178 582 4,194 Total resources: Dec.3 31,768 208,792 30,066 24,277 18,986 59,450 15,174 16,068 19,247 20,492 21,273 485,359 Dec. 10 31,359 202,493 29,923 30,700 25,065 19279 59,933' 15,952 16,170 18,994 20,717 21,608 482,073 Dec. 17 31,854 206,752 29,294 30,878 24,725 19,860 61,219 15,769 16,283 18,429 20,826 21,671 489,276 Dec. 23 >. 31,924 208,227 29,453 30,572 24,391 19,358 60,022 15,684 16,228 19,371 21,226 21,820 490,808 i Items in transit, i. e., total amounts due from, less total amounts due to, other Federal Reserve Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUARY 1,1916. FEDERAL RESERVE BULLETIN. 47 Resources and liabilities of each of the Federal Reserve Banks and of the Federal Reserve System at close of business on Fridays, Dec. S to Dec. 28,1915—Continued. LIABILITIES. [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 i e s. - K C a i n t s y a . s Dallas. F c S i r s a a c n n o - . s T ys f o o t t e r a m l . f Capital paid in: Dec. 3.. 5,171 11,062 5,270 5,931 3,354 2,422 6,642 2,780 2,498 3", 032 2,756 3,941 54,859 Dec. 10. 5,154 11,065 5,270 5,931 3,354 2,422 6,644 2,780 2,546 3,040 2,754 3,942 54,902 Dec 17 . 5,152 11,063 5,270 5,929 3,354 2,422 6,645 2,781 2,546 3,042 2,754 3,942 54,900 Dec 23 5,158 11,063 5,270 5,929 3,354 2,423 6,644 2,781 2,546 3,038 2,753 3,942 54,901 Government deposits: Dec. 3 5,000 5,000 5,000 15,000 Dec. 10 5,000 5,000 5,000 15,000 Dec. 17 •.. 5,000 5,000 5,000 15,000 Dec. 23.. 5,000 5,000 5,000 15,000 Reserve deposits, net: Dec. 3 26,597 178,810 24,796 24,459 10,387 7,683 52,808 12,394 13,570 15,045 9,085 17,332 392,966 Dec 10 26,205 174,347 24,653 24,769 10,509 7,943 53,289 13,172 13,624 14,625 9,447 17,666 390,249 Dec. 17 . 26,702 180,653 24,024 24,949 10,512 7,827 54,574 12,988 13,737 14»,665 9,519 17,729 397,879 Dec 23 26,766 182,334 24,183 24,643 10,316 7,812 53,378 12,903 13,682 14,859 9,849 17,878 398,603 Federal Reserve notes, net liability: Dec. 3 5,366 3,782 1,170 3,651 13,969 Dec. 10 6,029 3,812 1,329 3,516 14,686 Dec 17 5,-682 4,504 722 3,553 14,461 Dec. 23 .. ..... 5 549 4 023 1,474 3,624 14,670 Due to spther Federal Reserve Banks, net: Dec 3 10,624 Dec. 10. 10,120 Dec 17 8 284 Dec. 23. 7,468 All other liabilities: Dec. 3 8,296 170 99 8,565 Dec. 10. 6,961 173 102 7,236 Dec 17 6,752 177 107 7,036 Dec. 23.. 7,362 172 100 7,634 Total liabilities: Dec. 3 31,768 208,792 30,066 30,390 24,277 18,986 59,450 15,174 16,068 19,247 20,492 21,273 485,359 Dec 10 31,359 202,493 29,923 30,700 25,065 19,279 59,933 15,952 16,170 18,994 20,717 21,608 482,073 Dec. 17... 31,854 206,752 29,294 30,878 24,725 19,860 61,219 15,769 16,283 18,429 20,826 21,671 489,276 Dec. 23 31,924 208,227 29,453 30,572 24,391 19,358 60,022 15,684 16,228 19,371 21,226 21,820 490,808 Circulation of Federal Reserve notes at close of business on Fridays, Dec. S to Dec.:3, 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 i e s. - K C a i n ty sa . s Dallas. F c S i r s a a c n n o - . T sy o s ta te l m fo . r Federal Reserve notes issued to .the bank: Dec 3 8,320 79,160 8,500 9,400 14,500 16,330 4,380 7,950 13,000 9,900 15,175 4,370 190,985 Dec 10 9,320 83,560 8,760 10,200 15,200 17,450 4,380 7,950 14,000 9,900 15,175 4,370 200,265 Dec. 17 9,320 85,960 9,160 10,600 14,550 17,950 4.380 7,950 14,000 11,000 15,165 5,170 205,205 Dec. 23 10,020 87,040 9,160 11,000 15,630 18,950 4,380 8,950 14,000 11,000 15,155 6,450 211,735 Federal Reserve notes in the hands of the bank: Dec. 3 , - 1,021 11,895 373 224 334 968 1,799 1,028 770 915 234 1,426 20,987 Dec 10 . . .. 1,387 15,724 300 388 371 938 1,832 664 1,392 571 369 1,017 24,953 Dec. 17... 826 15,427 305 219 418 746 1,781 143 1,234 1,278 322 1,144 23,843 Dec 23 986 14,303 278 313 531 1,227 1,695 810 838 526 241 1,925 23,673 Federal Reserve notes in circulation: Dec. 3.. 7,299 67,265 .8,127 9,176 14,166 15,362 2,581 6,922 12,230 8,985 14,941 2,944 169,998 D D e e c c . . 1 1 7 0 -. 7 8 , ,4 9 9 3 4 3 6 7 7 0 , , 8 5 3 3 6 3 8 8 , , 4 8 6 5 0 5 1 9 0 , , 8 3 1 8 2 1 1 1 4 4 , , 8 1 2 3 9 2 1 1 6 7 ? , 5 2 1 0 2 4 2 2, , 5 5 9 4 9 8 7 7 , , 8 2 0 8 7 6 1 12 2 , , 7 6 6 0 6 8 9 9 , , 3 7 2 2 9 2 . 1 1 4 4 , , 8 8 0 4 6 3 3 4 , , 3 0 5 26 3 1 1 7 8 5 1 , . 3 3 1 6 2 2 Dee 23 . ... 9,034 72,737 8,882 10,687 15,099 17,723 2,685 8,140 13,162 10,474 14,914 4,525 188,062 Gold and lawful money deposited with or to the credit of the Federal Reserve Agent: Dec 3 8,320 79,020 8,500 9,400 8,800 11,580 4,380 7,672 13,000 7,815 11,290 4,370 174,147 Dee. 10 9,320 83,420 8,760 10,200 8,800 12,700 4,380 7,672 14,000 8,000 11,290 4,370 182,912 Dec. 17 , 9,320 85,820 9,160 10,600 8,450 12,700 4,380 7,950 14,000 9,000 11,290 5,170 187,840 Dec 23 10,020 86,900 9,160 11,000 9,550 13,700 4,380 8,950 14,000 9,000 11,290 6,450 194,400 Carried to net liabilities: Dec 3 5,366 3,782 1,170 3,651 13,969 Dec 10 6,029 3,812 1,329 3,516 14,686 Dec 17 5,682 4,504 722 3,553 14,461 Dec. 23 5,549 4,023 • 1,474 3,624 14,670 Carried to net assets: Dec 3 1,021 11,755 373 224 1,799 750 770 1,426 18,118 Dec 10 1,387 15,584 300 388 1,832 386 1,392 1,017 22,286 Dec 17 826 15,287 305 219 1,781 143 1,234 1,144 20,939 Dec. 23.. 986 14,163 278 313 1,695 810 838 1,925 21,008 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

48 FEDERAL RESERVE BULLETIN. JANUARY 1,1916. Statement of Federal Reserve Agents' accounts at close of business on Fridays, Dec. 3 to Dec. : , 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 . -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 . Federal Reserve notes: Received from the Comptroller— Dee.3 ... 16,360 100,440 12,480 11,600 15,840 19,400 9,380 9,600 17,000 11,000 19,580 10,000 252,680 Dec. 10 16,360 102,240 12,480 11,600 15,840 19,400 9,380 9,600 19,000 11,000 19,580 10,000 256,480 Dec. 17 16,360 104,240 12,480 12,600 16,320 19,900 9,380 9,600 19,000 11,000 19,580 10,000 260,460 Dec. 23 16,360 106,240 12,480 12,600 17,000 20,400 9,380 9,600 19,000 11,000 19,580 10,000 263,640 Returned to the Comptroller- Dec 3 400 540 40 120 25 230 1,355 Dec. 10..... - 400 640 80 120 25 230 1,495 Dec. 17 400 640 80 120 61 230 1,531 Dec. 23 500 640 80 120 61 230 1,631 Chargeable to the Federal Reserve Agent- Dec 3 ... 15,960 100,440 11,940 11,560 15,840 19,400 9,260 9,600 17,000 11,000 19,555 9,770 251,325 Dec. 10. 15,960 102,240 11,840 11,520 15,840 19,400 9,260 9,600 19,000 11,000 19,555 9,770 254,985 Dec. 17 15,960 104,240 11,840 12,520 16,320 19,900 9,260 9,600 19,000 11,000 19,519 9,770 258,929 Dec. 23. 15,860 106,240 11,840 12,520 17,000 20,400 9,260 9,600 19,000 11,000 19,519 9,770 262,009 In the hands of the Federal Reserve Agent- Dec. 3 7,640 21,280 3,440 2,160 1,340 3,070 4,880 1,650 4,000 1,100 4,380 5,400 60,340 Dec. 10 6,640 18,680 3,080 1,320 640 1,950 4,880 1,650 5,000 1,100 4,380 5,400 54,720 Dec. 17. 6,640 18,280 2,680 1,920 1,770 1,950 4,880 1,650 5,000 4,354 4.600 53,724 Dec. 23 5,840 19,200 2,680 1,520 1,370 1,450 4,880 650 5,000 4,364 3; 320 50,274 Issued to Federal Reserve Bank, net- Dec. 3 8,320 79,160 8i,500 9,400 14,500 18,330 4,380 7,950 13,000 9,900 15,175 •4,370 190,985 Dec. 10 9,320 83,580 8,760 10,200 15,200 17,450 4,380 7,950 14,000 9,900 15,175 4,370 200,265 Dec. 17 9,320 85,960 9,160 10,600 14,550 17,950 4,380 7,950 14,000 11,000 15,165 5,170 205,205 Dec. 23 10,020 87,040 9,160 11,000 15,630 18,950 4,380 8,950 14,000 11,000 15,155 6,450 211,735 Amounts held by Federal Reserve Agent: In reduction of liabil- ' ity on outstanding notes- Gold coin and certificates on hand- Dec. 3 8,320 79,020 8,500 8,930 380 6,672 10,000 3,815 9,540 135,177 Dec. 10....... 9,320 83,420 8,760 9,690 500 6,672 10,000 2,000 9,540 139,902 Dec. 17 9,320 85,820 4,160 10,070 5,950 10,000 2,000 9,540 136,860 Dec. 23. . . 10,020 86,900 4,160 10,470 3,950 10,000 2,000 9,540 137,040 Lawful money on hand- Dec. 3 Dec. 10 Dec. 17 Dec 23 Credit balances in gold redemption fund- Dec 3 470 120 "590 Dec 10 ..... 510 120 630 Dec 17 530 120 650 Dec 23 530 120 650 Credit balances with Federal R e s e r ve Board- Dec 3 8,800 11,200 4,260 1,000 3,000 4,000 1,750 4,370 38,380 Dec 10 8,800 12,200 4,260 1,000 4,000 6,000 1,750 4,370 42,380 Dec. 17 5,000 8,450 12,700 4,260 2,000 4,000 7,000 1,750 5,170 50,330 Dec 23 5,000 9,550 13,700 4,260 5,000 4,000 7,000 1,750 6,450 56,710 As security for outstanding notes— Commercial paper- Dec 3 140 5,700 4,750 278 2,085 3,885 16,838 Dec 10 140 6,400 4,750 278 1 900 3 885 17,353 Dec 17 140 6,100 5,250 2,000 3,875 17,365 Dec 23 140 6,080 5,250 2,000 3,865 ........ 17,335 Total- Dec. 3... 8,320 79,160 8,500 9,400 14,500 16,330 4,380 7,950 .13,000 9,900 15,175 4,370 190,985 Dec. 10....... 9,320 83,560 8,760 10,200 15,200 17,450 4,380 7,950 14,000 9,900 15,175 4,370 200,265 Dec. 17 9,320 85,960 9,160 10,600 14,550 17,950 4,380 7,950 14,000 11,000 15,165 5,170 205,205 Dec. 23. 10,020 87,040 9,160 11,000 15,630 18,950 4,380 8,950 14,000 11,000 15,155 6,450 211,735 Memorandum: Total amount of commercial paper delivered to the Federal Reserve Agent— Dec 3 140 6,558 4,751 278 2,088 4,513 18,328 Dec 10 140 6,697 5,251 278 1,902 4,484 18,752 Dec 17 140 6,187 5,251 j 2,019 4,338 17,935 Dec 23 140 * 6 120 5,252 2,019 3,920 17,451 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JANUABY, 1, 1916. FEDERAL EESBEVE BULLETIN. 49 GOLD IMPORTS AND EXPORTS. Imports of gold, by customs districts, Jan. 1 to Dec. 24 1915. y [In thousands of dollars.] Week ending Nov. 26. Ore and base bullion.. 19 166 46 278 United States mint or assay office bars.. 40 40 Bullion, refined 224 274 United States coin 8 Foreign coin 48 1,509 10,288 Total. 56 19 1,675 44 10,888 Week ending Dec. 8. Ore and base bullion.. 4 14 54 29 27 160 Bullion, refined 687 822 United States coin 3 Foreign coin . 16,483 16,483 Total 17,174 14 16 117 46 27 17,468 Week ending Dec. 10. Ore and base bullion.. 13 53 170 United States mint or assay office bars.. 95 Bullion, refined 751 1,281 2,077 Foreign coin 13,520 1,800 15;320 Total. 14,284 3,082 138 53 17,662 Week ending Dec. 11. Ore and base bullion.. 392 15 38 60 12 520 United States mint Bullion, refined. 367 124 2 497 United States coin., 1 Foreign coin 3,424 *52i' 3,945 Total. 3,791 516 538 39 60 12 4,963 Week ending Dec. 24- Ore and base bullion.. 30 74 40 37 203 United States mint or assay office bars.. 11 200 211 Bullion, refined 532 40 110 796 United States coin.... 8 Foreign coin : 5,262 Total. 5,811 30 40 173 161 37 201 17,545 Jan. 1 to Dec. i Ore and base bullion.. 947 442 368 160 664 1,148 3,774 5,299 162 1,662 14,669 United States mint 164 7,120 7,284 Bullion, refined. 13,267 35 10 474 1,334 3,553 14,330 2,757 798 8,131 44,689 U Fo n r i e te ig d n S c t o a i t n e s coi . n — ... 4 1 8 1 , , 3 6 9 5 0 1 1 2 0 0 6 , , 5 0 2 0 6 0 3,25 2 9 3 7 51,24 2 3 4 99 1 6 3 49 8 3 6 9 , , 5 3 6 2 4 3 12 1 1 5 3 5 , , 6 60 2 6 7 Total 60,042 140,740 35 477 842 1,502 28 4,224 66,745 7,540 6,310 162 1,662 141,139 1435,875 1 Includes $3,000 for Massachusetts and $1,060,000 for Philadelphia not shown in the table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

50 FEDERAL RESERVE BULLETIN. JANUARY 1,1916. Exports of gold, by customs districts, Jan. 1 to Dec. 24, 1915. [In thousands of dollars.] Weekending Nov. 26. TJnited States mint or assav office bars Bullion refined domestic United States coin Foreign coin Total Week ending Dec. 3. Ore and base bullion United States mint or assay office bars Bullion refined domestic United States coin Foreign coin ... Total Week ending Dec. 10. United States mint or assay office bars Bullion, refined, domestic United States coin . Foreign coin Total. . . . Week ending Dec. 17. Ore and base bullion United States mint or assay office bars.. Bullion, refined: Domestic Foreign .. United States coin Foreign coin Total . . Week ending Dec. 24* Ore and base bullion United States mint or assay office bars.. Bullion, refined: Domestic Foreign... . United States coin . Foreign coin Total Jan. 1 to Dec. 24. Ore and base bullion United States mint or assay office bars Bullion, refined: Domestic Foreign. United States coin Foreign coin Total weN dna eniaM .erihspmaH 2 2 2 2 4 .kroY weN 17 97 114 101 101 100 5 105 499 125 624 7 7 499 i2,387 4,077 16,963 .ociR otroP "T I .snaelrO weN 1 41 10 10 41 .iiawaH v 7 32 32 .ocsicnarF naS 458 458 656 656 .notgnihsaW 3 3 35 35 3 3 1 1 313 25 122 460 .olaffuB 10 400 410 5 5 10 7 7 5 5 1 11 7 1 8 18 136 60 20 908 134 1,276 .atokaD 4 4 -uS dna htuluD .roirep 1 1 2 2 .nagihciM 2 2 12 1 13 dna anatnoM .ohadI 2 2 .ecnerwaL .tS 5 974 979 255 1 10 975 1,241 16 1,589 1,599 149 1 2,070 2,220 1 719 12 976 5 632 7,340 .tnomreV — 1 1 1 1 20 1 21 .latoT 10 1 420 97 528 35 5 12 108 974 1,134 255 9 110 980 1,354 5 499 5 138 1,592 2,239 7 149 2 467 2,070 2,695 373 1,354 137 20 15,095 9,846 26,825 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX. Page. Acceptances.. .. 44 Informal rulings of the Board—Continued. Accommodations to Tennessee banks ......... 4 Certificate of eligibility on farm-mortgage Amendments, proposed, to Act. 6 paper 12 Assessment for expenses of Federal Reserve Board. 7 Purchase of United States bonds 12 Audit of gold settlement fund. 9 Date of closing books of Federal Reserve Banks. 12 Business conditions... •..-...... 29 Classification of cotton bills. 12 Circulars and regulations of the Board: Responsibility in purchasing acceptances 13 Circular 20, Regulation T.—-General open- Election of Advisory Council, time of. 13 market operations.. 15 Tenure of office of officers and employees of Circular 21.—Eligibility of candidates for di- Federal Reserve Banks. 13 rectorships. 16 Intradistrict clearing system, additions to and Class A, B, and C directors, election of 3 withdrawals from. 14 Commercial paper discounted by Federal Reserve Law department 17-28 Banks 39 Dividends on surrendered stock 17-20 Discount rates in effect. 11 Reduction of Federal reserve districts. 20-28 Distribution of discounts 39 Decision of Supreme Court of Illinois relating Dividend declared by Richmond Federal Reserve to section 11 (k) of the Act. 28 Bank. 5 National bank section of American Bankers' Asso- Expenses of Federal Reserve Board, assessment for. 7 ciation, conference of, with the Board 2 Federal Reserve Bank statements. 46 Resources and liabilities of Federal Reserve Banks. 46 Fiduciary powers granted. 14 State banks admitted to system. 6 Gold imports and exports. 49 Trustee, executor, etc., applications to act as, Gold settlement fund. 9 approved 14 Informal rulings of the Board 12 Work of the Federal Reserve Board. 1 Additional stock applications, certificate from Comptroller not required on.. 12 o Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis