Federal Reserve Bulletin, 1917-06

ISSUED BY THE AT WASHINGTON JUKE, 1917 WASHINGTON GOV&iiNMENT FEINTING 1917 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL 1ESERVE BOABD, E X O FF1CIO M E M B E It 8. W. P. G. HAHDIXG, Governor. PAUL M. WAHBURG, Vice Governor. WILLIAM G. MCADOO, FREDERIC A. DELANO. Secretary of the Treasury, ADOLPH C. MILLER. Chairman CHARLES S. HAMLIN. JOiI.5f SK ELTON WlJiLIAMS, Comptroller of the Currency, H. PARKER WILLIS, Secretary, SHERMAN ALLEN, Assistant Secretary and Fiscal Agent. M. C ELLIOTT, Counsel. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SUBSCRIPTION PRICE OF BULLETIN. The Federal Reserve Bulletin is distributed without charge to member banks of the system and to the officers and directors of Federal Reserve Banks. In sending the Bulletin to others the Board feels that a subscription should be required. It has accordingly fixed a subscription price of $2 per annum. Single | copies will be sold at 20 cents. Foreign postage should be added | when it will be required. Remittances should be made to the | Federal Reserve Board. Member banks desiring to have the ! Bulletin supplied to their officers and directors may have it sent I to not less than 10 names at a subscription price of $1 per annum. I No complete sets of the Bulletin for 1915 are available. j Bound copies of the Bulletin for 1916 may be had at $5 per copy. in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

TABLE OF CONTENTS. Page. Review of the month 423 Rediscount of notes secured by Liberty Loan bonds 429 Transactions with alien enemies 431 Circulars relating to Liberty Loan., 432 Personnel of Liberty Loan committees 437 Cooperation of American Bankers' Association in connection with Liberty Loan 438 Use of Government frank on correspondence relating to Liberty Loan 439 Cost of telegrams relating to bond issue 439 Branch bank in Baltimore 440 Abrasion of gold coin caused by use of coin-counting machines 440 Fiduciary powers granted during month 440 Commercial failures reported for month of April 44.1 Amendments to Federal Reserve Act as passed by House and Senate 441 New national-bank charters granted 450 Amendment to act proposed by Board relative to banks engaging in foreign trade 450 Gold settlement fund 454 Operation of the Federal Reserve clearing system 455 Informal rulings of the Federal Reserve Board 450 Law department 458 Business conditions throughout the Federal Reserve districts 460 Actual and required reserves of national banks, 1915 to 1917 483 Chart showing 484 Discount operations of the Federal Reserve Banks 485 Acceptances 487 Resources and liabilities of the Federal Reserve Banks 491 Federal Reserve note accounts of Federal Reserve Banks and agents 493 Earnings on investments of Federal Reserve Banks 495 Discount rates in effect 496 Gold imports and exports 496 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

VOL. 3 JUNE 1, 1917. No. 6 REVIEW OF THE MONTH. commercial and industrial concerns in bringing the loan to the attention of the public at large The Federal .Reserve Banks during the month and in inducing and aiding the small investor of May have definitely assumed to subscribe and pay for such amount of new C"e ^ie functi°ns of fiscal agents of bonds as he is able to absorb. On May 17 a the Government of the United conference of representatives of these several States, acting in accordance with instructions committees was held in Washington and the issued by the Secretary of the Treasury under details relating to the work of the local comdate of May 14 in which he designated them as mittees were agreed upon in order that future "fiscal agents of the United States to collate steps might be taken harmoniously and simulapplications and. to give notices of the allottaneously in all of the several districts. Circuments which the Secretary of the Treasury will lars definitely stating the conditions under eventually make to subscribers and to issue which subscriptions may be made and the interim certificates for payments made on loan disposition of the proceeds of the loan as well subscriptions/' The amount of the Liberty as the conditions governing deposits thereof in Loan offered by the Government of the United banks, were issued by the Treasury Department States for the conduct of the war with Germany, under date of May 14, and are reprinted elsein which it is now engaged, was fixed in the where in this issue. prospectus issued on May 14 at $2,000,000,000, Prior to the issue of the last Federal Reserve the issue to consist of fifteen-thirty year 3-| per Bulletin an issue of $250,000,cent gold bonds. Further details of the conditions under which the loan is offered to the ttfiStes" 00° of short-term certificates of public are furnished in the prospectus itself, indebtedness had been placed which is elsewhere reprinted in this issue. The upon the market by the Treasury Department function of fiscal agent in connection with the for the purpose of anticipating the proceeds of new loan places upon the Federal Reserve the sale of the new bonds under the Liberty Loan. Subsequent issues have since then Banks duties of first importance, particularly taken place at varying rates of interest, as in view of the conditions by which the Nation follows: is now confronted. The banks have actively entered upon the performance of the functions Date. ; Subscriptions. : Allotments. with which they are thus charged, and in their ..._. __ new undertaking have been effectively assisted Apr. 25 ' 8251,116,500 : 5250.000,000 by committees of business men and bankers May 10 : 200,000.000 ! 200.000,000 May 25 i 281,266,000 ! 200,000;ooo established through the cooperation of the Federal Reserve Banks and of the local finan- It is intended to continue the policy thus cial community in each of the Federal Reserve inaugurated by marketing at approximately cities. The effort of these local committees, biweekly intervals issues somewhat similar in whose personnel is elsewhere given in detail, has amount. been to bring about a general popular under- The proceeds of these issues have been restanding and interest in the new Government ceived in current funds and have immediately loan and to enlist the aid of the various banks, been applied to the requirements of the new bond distributors, investment houses, and Government financing. Advances to the rep- 423 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

424 FEDEEAL EESERVE BULLETIN". JUNE 1, 1917. resontatives of the belligerent- nations of them as depositaries) or immediately disburs- Europe with which the United States is now ing them for expenses, under this plan it has allied have been agreed upon, as follows: been possible to avoid any disturbance to the money market. Inasmuch as such certificates Great Britain $400,000,000 of indebtedness are payable at any Federal France 100,000,000 Italy 100,000, 000 Reserve Bank, the banks and trust companies, Russia 100,000,000 acting upon the plan referred to, gradually and Belgium 45,000,000 without disturbing the money market acquire By the adoption of this policy of gradual exchange in the place where subscriptions are issue of short-term certificates the Treasury to be placed, besides securing, as already noted, receives a regular flow of funds which are trans- an adequate interest return upon their money. ferred to it from the banks end individuals who This enables them to settle the problem of loss take up the certificates, the moneys thus com- of interest for themselves and their customers ing in being steadily- applied to the require- to the extent of the certificates of indebtedness ments of the Government in various directions. acquired by making payment in full for bonds As the certificates are receivable in payment allotted without previous notice if desired. for subscriptions to the long-term bonds when It has been recognized by the Federal Reprepared, it is thus possible to draw off from serve Board from the outset the market a portion of the available funds, Policy of Federalthat the commercial banks of Reserve Board. which are then expended and returned to com- the country in handling this mercial channels practically as received, there- loan ought to act as distributors, following the by avoiding considerable withdrawals at any principles laid down in the Board's statements one time and making the loan operation a grad- of November 28, 1916, and March 8, 1917, ual process of withdrawal of funds which are rather than to absorb and hold the bonds subsequently funded into the new bonds. Sub- themselves except as a temporary matter and scriptions for the certificates naturally come in such moderate and reasonable amounts as primarily from the banks, which aro thus given may be taken by them as permanent investa short-term investment for their spare rands ments. This conclusion, dictated by well known while they are sure of reimbursements out of theoretical considerations, has been amply rethe proceeds of the long-term securities, within inforced by the experience of foreign countries 60 days or less. in financing the present war, notably by that The certificates have been freely taken up of Great Britain. The current effort, therefore, by institutions throughout the country, which is to place as much of the loan as possible in the have recognized that the plan not only pro- hands of the ultimate holder, both because of vided for the immediate needs of the Treasury the better influence upon credit conditions proand for its advances to the allied goveniments, duced by this policy and because of the fact but was also likely to be far less disturbing to that the bonds thus placed would be more financial conditions in general than any plan firmly held and loss likely to come upon the of subscription and cash payment, even where market at an early date. It has been recogthe proceeds were to be left on deposit with the nized, however, that in this process of selling institutions from which they were originally the bonds to those who must pay for them out drawn, The plan, moreover, makes it possible of current or existing savings or earnings, it to obtain interest upon funds subscribed for would be necessary to have the assistance of the Government use from the moment when they banks in temporarily financing or carrying the are actually placed at the disposal of the securities. This necessary assistance includes Treasury, there being no intermediate period both the requirement of loans to individual cusof waiting for the issue of long-term bonds tomers of banks who require accommodation By holding the funds in the banks (appointing for a period during which they are engaged in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDEEAL RESERVE BULLETIN. 425 paying for their bonds and possibly accommo- mercial banks would feel free to assist woulddation to these banks through rediscount at be bond buyers, knowing that they could Federal Reserve Banks designed to assist such protect themselves if necessary by rediscountbanks to extend aid to thoir customers. The ing the paper with the reserve bank of thoir Board, therefore, recently took under consid- district. In explanation of its position on the eration the question of establishing a rate of matter the Board, said in. the statciy-.cnt of discount for the short-term notes of member May 22: banks secured by liberty Loan bonds or by "To meet temporary shortages which may short-term certificates as collateral as well as arise here and there, however, the Federal the question of a favorable rate of rediscount Reserve System should freely render assistance for customers' notes collatoraled by such bonds as needed, and it is suggested, therefore, that when the time for the payment of the installor certificates and offered, by the member ments draws near Federal Reserve Banks esbanks to the reserve banks with thoir own intablish or maintain liberal rates of discount dorsement. at which member banks may, by rediscounting In dealing with this matter the Board first with the Federal Reserve Banks, recoup themselves for any unusual withdrawals they may considered the question of the have to meet. rates of discount, establishment ot a preferential "The facilities offered by Federal Reserve rate in favor of the short-term Banks for the rediscount of 15-day member notes of member banks collateraled by Govern- bank collateral notes, secured by commercial ment obligations of the kinds referred to. It paper or Government securities, should prove of great value in meeting such withdrawals. adopted the policy of granting a 3 per cent rate The rates now established for this class of paper upon 15-day notes of this description to all are low, varying between 3 and 3J- per cent in Federal Reserve Banks that requested it, those the various districts. Banks should realize thus acted, upon during the month being Minne- that, under present circumstances, it will apolis; Kansas City, Chicago, and Cleveland, be their patriotic duty freely to avail themwhile other banks have the matter under con- selves of these facilities. They will thus be able to keep money rates easy. Member banks sideration. In some cases, as at Philadelphia, a rate of 3 per cent was fixed for member banks7 should also be impressed with the importance of making their rediscount arrangements in 15-day notes secured by bonds or certificates advance of the dates of payment of the various as such, while in other cases the 3 per cent rate installments. was made applicable to 15-day notes of all "The Board has been advised that many classes. Carrying further the policy thus corporations, including savings banks, have begun, the Board on May 22 issued to all Fed- agreed to subscribe to substantial amounts of the Liberty Loan, carrying the bonds for eral Reserve Banks a circular letter descriptive their employees subject to payment in small of its attitude in regard to the matter and installments. It has been suggested that it informing them that it would ratify a rate of would be helpful to the banks m placing the 3£ per cent, effective at all Federal Reserve Liberty Loan, and particularly in assisting Banks that might desire to establish such a corporations which make subscriptions of this rate for the rediscount of customers' loans col- character, if Federal Reserve Banks were authorized to establish a special Liberty Loan lateraled by Government bonds or Treasury rate of 3^ per cent for notes, drafts, and bills short-term certificates. 'Phis step was taken of exchange drawn by customers of the banks, with a view to facilitating the operations of including savings banks, having a maturity the member banks in placing the bonds in not in excess of 90 days, and secured by the hands of actual investors who might not Liberty Loan bonds or United States Treasury be in possession of the funds necessary to pay certificates of indebtedness. The Board has given this matter its careful consideration and their subscriptions in full at the time of rehas determined that it will grant such a rate ceiving the bonds. It was thought that with to any Federal Reserve Banks requesting it this rate of rediscount in operation, the com- good until countermanded or modified." ; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

426 FEDERAL RESERVE BULLETIN. JUNK 1, 1017. Banks and trust companies which arc not the loan is, however, taken up by small investmembers of the Federal Ee-1ors, it is to be expected that the latter will to Relations with serve System are playing an;some extent draw upon their accounts with iionmember banks, important part in the flotation savings institutions for the purpose of liquidatof the new loan and must be ing their subscriptions. It is not desirable that relied upon to a considerable extent to assist j the savings banks should be so heavily drawn in the placing of the bonds with the ultimate | upon as to compel them to sell or liquidate coninvestors, just as is true in the case of mem- ;siderable amounts of the old securities which ber banks. The Federal Reserve Act pro-1 they have been holding in order to put themhibits member banks from obtaining redis- jselves into position to meet such demands from counts at Federal Reserve Banks for or in their depositors. Were they to do so the effect behalf of nonineinbers unloss authorized to do would be to produce an unwholesome market so by the Federal Reserve Board. In order to condition, due to the sudden or enforced sale give them access to the rediscount facilities of of the old securities held by the savings banks, the Federal Reserve Banks, the Board, there- or else to place upon the commercial banks of fore, in the same circular letter to which refer- the country the necessity of making advances ence has already been made authorized Federal to the savings institutions, collateraled by the Reserve Banks to discount paper received from old bonds which constitute the staple of the members for a limited time and when secured investments of the latter. For reasons already by Government securities, as stated below, stated, it is thought desirable that the savwhen the latter present it as agents for non- ings banks should direct their efforts to the member institutions. On this subject the work of converting the future savings of Board stated its view as follows: their own customers, as rapidly as the latter desire, into bonds. Savings banks, therefore, "While the law provides that member banks may not, except with the special permission of have been assured by the Board that they will the Board, act as agents in rediscounting for be given access to the rediscount facilities of nonmember banks, the Board feels that, in the Federal Reserve Banks in the way already view of the magnitude of the task imposed indicated, and that in return it is hoped they upon all banks of the country, member banks will exert themselves to assist depositors and should be permitted to rediscount for nonmember banks, including the savings banks, customers in taking up and paying for bonds whenever the proceeds have been or will be to the extent that they may desire to subscribe used in meeting demands caused by subscrip- therefor. Inasmuch as the rate of interest altions to the Liberty Loan. From June 15 to lowed by the savings banks in many parts of July 15, 1917, subject to further notice. Federal the country is 3i per cent or 4 per cent, there Reserve Banks are, therefore, authorized, for such purposes, to rediscount such nonmember will be no interest inducement tending to lead bank paper, indorsed by member banks and depositors at such banks to shift their holdings otherwise eligible, without any further per- out of savings accounts and into the new bonds, mission from this Board. It is left to the disbut such subscriptions as they may make will cretion of the Federal Reserve Banks to withbe the result of desire to assist in the flotation hold the facilities whenever they believe that assistance is requested for other than the large of the loan for patriotic and public reasons. objects and purposes to be carried out at this Further continuing the effort to avoid distime." turbance of the money market, The savings banks of the country have a ion of the Secretary of the Treasury special problem of their own in funds in banks. announced on May 16 that Problem of sav- connection with the flotation banks and trust companies havings banks. f h loan. Some of them, as ing payments to make on account of subscripo t e well as some of the trust com- tions for $100,000 or more bonds, and which panies, are likely to become considerable in- shall have qualified as depositaries, may make vestors in and holders, of the new bonds. As payment upon such subscriptions on June 28 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 427 (as to any amounts not paid in Treasury cer- passed upon, and after provision has been tificates of indebtedness) by credit on their made for the immediate disbursements which books to the account of the Treasurer of the the United States will have to make up to and United States, notice of the amount of such including July 1, the proceeds of the loan credit to be given in duplicate to the Treasurer received from time to time, in full or installand to the Federal Reserve Bank of the dis- ment payments, will be redeposited with trict on or before June 28. The amounts so qualified banks and trust companies in a procredited are to be withdrawn from time to time portion, yet to be determined, based upon the when and as required. How long they may be amounts of bonds of the Liberty Loan for permitted to remain will depend in large meas- which subscriptions are filed by and through ure on the extent to which the privilege of them, and upon the amount of Treasury cerprepayment for the bonds of the Liberty Loan tificates of indebtedness acquired by them and on or before June 28 is availed of. It will be utilized in payment on or before June 28. necessary that the early installments paid upon Such deposits will, of course, be subject to call. subscriptions to the loan be devoted largely to Clearing-house reports received from printhe payment of the short-term Treasury cer- cipal eastern cities during the tificates of indebtedness which have been and «riy ?art of <** month show will be placed throughout the country chiefly reductions in reserve which may for making loans to Governments engaged in be traced largely to the Government's loan opermaking war against Germany, and in part to ations during April and the early part of May. meet unusual war expenditures of our own Thus the reserve percentage for the 60 members Government. As, however, practically all the of the New York Clearing House Association proceeds of the Liberty Loan, whether ad- (indicating the ratio of total reserves to net vanced to foreign Governments or expended demand deposits) declined from 21.9 on April directly by departments of the United States 21 to 20.4 on May 5. Subsequent foreign Government, will be spent in this country in Government deposits with the leading New payment of indebtedness heretofore or hereaf- York banks apparently account for the imter incurred, the bank resources of the United proved reserve situation of the New York- States as a whole will not be diminished and the banks shown in the May 12 and 19 reports, the operation involves only a shifting of credits. reserve percentage for the latter date—22.6 Because of the great amount of work involved per cent—indicating a return to the relatively in passing upon the qualifications and secur- favorable condition disclosed by the April 7 ities of the banks and trust companies which report. Computations of the New York State will have payments to make, it has been Banking Department disclose a similar decline deemed necessary by the Treasury, until after of the reserve percentage for all trust com- July 1, to limit to those banks and trust com- panies in Greater New York from 25.8 on April panies having payments to make on sub- 21, to 23.5 on. May 5, and a subsequent rise to scriptions for $100,000 or more bonds, the 25.6 on May 19. The reserve ratio of the provision for making payment by credit—the State banks in the Greater City likewise shows object in providing for payment by credit a decline from 28.1 per cent to 26.1 per cent being to avoid any disturbance in the money on May 5 and a rise since that date to 28,5 position which might result from large pay- per cent on the most recent available date. ments being made from June 28 to Monday, During the week ending May 11 foreign gold July 2, a period when there is customarily a amounting to $48,900,000 was imported. heavy movement of funds due to corporate Average excess reserves of the Boston interest and other payments. As soon after Clearing House banks show a continuous July 2 as practicable, the qualifications and decline of excess reserves from $47,646,000 on securities of other banks and trust companies April 21 to $28,458,000 on May 12, as the desiring to participate in redeposits will be result of reductions in vault reserve and in 100250—17 2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

428 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. amounts due from the Federal Reserve Bank "For the five weeks ending May 18 the total and approved reserve agents. The May 19 net inward gold movement Gold imports and ^ . ~° , -, . , statement indicates a gain of about 2.1 millions ir rno exports. Was &19>563>000, gold imports in excess reserve held in vault and with the during the period, chiefly from Federal Reserve Bank, though a further Canada, amounting to $55,192,000 and gold decline by over $100,000 in total excess reexports during the same period, mainly to the serves. Philadelphia Clearing House banks Far East, to $35,629,000. The increase of the and trust companies indicate a steady decline country's stock of gold through net gold imfrom $31,186,000 on April 21 to $17,303,000 ports since August 1, 1914, is shown in the on May 12, and an increase to $19,627,000 at following exhibit: the end of the following week. A similar Gold imports and exports of the United States from Aug. 1, development is shown for the 12 banks and 1914, to May 18, 1917. trust companies constituting the Cleveland [000 omitted.] Clearing House Association. Classified figures of earning assets for April Excess imports 20 and May 18 reflect some- Imports. Exports. over Operations oi re- i , ,-, , « . , exports. , , ., what the amount oi assistance seerrvvee osiiKi3. Aug. 1 to Dec. 31,1914. $23,253 8104,972 i $81,719 rendered by the 1 ederal Reserve Jan. 1 to Dec. 31,1915.. 451,955 31,426 420,529 Jan. 1 to Dec. 31,1916.. 685,745 155,793 529,952 Banks during the four weeks ending May 18 in Jan. 1 to May 18,1917.. 385,304 107,227 278,077 placing with investors short-term United States Total 1,546,257 399,418 1,146,8 certificates of indebtedness. An increase of about 42.4 millions is shown in the total bill i Excess oi exports over imports. holdings, largely in the amounts of acceptances Favorable action was taken by the House bought in open market. Some of the banks, of Representatives on May 5 notably Philadelphia and Richmond, report Amendments to ^^ reference t(> the bm em _ Federal Reserve large increases in the holdings of 15-day paper, bodying the amendments to the chiefly member banks' collateral notes. United Federal Reserve Act which had States securities on hand show an increase of been recommended by the Board, and by the about 4.8 millions, as the result of temporary Senate in a somewhat different form on May 9. investment by some of the reserve banks in The conferences between the two Houses, 3 per cent certificates of indebtedness. There intended to reconcile the House and Senate were practically no additional purchases by the forms of the bill, were in progress during the two Federal Reserve Banks of municipal warrants. weeks ending May 25. The Senate and House The following exhibit shows the bill holdings bills taken together include practically everyof each Federal Reserve Bank on the two thing that had been recommended by the dates above mentioned: Federal Reserve Board, and also add thereto (000's omitted.) a new feature which had been urged in one form Federal Reserve Bank. A 2 p 0 r . il M 18 ay . N cr e e t a s in e. - Net de- or another both in the House and Senate, but which was not recommended by the Board. Boston $16, $15,734 $940 New York 30,988 $14,188 This took shape in the so-called "Hardwick Philadelphia 21,544 10,251 Cleveland 9,985 2,587 amendment" whereby it was originally provided Richmond 15,576 3,165 Atlanta 5,284 594 that an exchange charge of not to exceed one- Chicago 10,877 4,381 St. Louis 7,053 2,725 tenth of 1 per cent might be levied upon the ' Minneapolis 9,534 i 566 Kansas City 4,361 2,450 I aggregate face value of all checks presented at Dallas 4,082 806 I % San Francisco 10,065 2,720 j any one time for collection. The exchange Total, bills 102,662 145,023 42,361 provision is the outgrowth of the work done by Total municipal warrants 15,163 14,639 524 Total United States securities. 109,575 114,390 4,815 the " committee of twenty-five " of the American Total investments held .'227,400 274,052 46,652 Bankers' Association which has been opposing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

•TUNIS 1, 1917. FEDERAL RESERVE BULLETIN. 429 the development of the collection system estab- by the National Bank Act for the organization lished by the Federal Reserve Board. Except of banks in cities of specified population. Elsefor this addition to the bill, the new legislation where a movement toward membership has is regarded by the Board as strengthening the more largely affected the larger institutions than Federal Reserve Act in ways which are con- it has those of smaller capitalization, but the sidered to be particularly essential at the present steady growth of membership now appears to time in view of the necessities of the Govern- be definitely assured, granting satisfactory adment for assistance through large loans. Some ministration and other reasonably favorable important administrative changes and improve- conditions. ments will be rendered possible in consequence On May 18 a party including the Secretary of the legislation. The conference committee of the Treasury and Governor has not yet reported the result of its work, %Sl Harding, of the Federal Reand the final form of the bill remains, therefore, serve Board, left Washington in doubt. for an extended journey in behalf of the The movement of State institutions into the Liberty Loan. Visits were made to Chicago f Membership ofFederal Reserve System has Milwaukee, St. Paul, Minneapolis, Des Moines, State banks. continued during the month. Denver, St. Joseph, Omaha, Topeka, Kansas The Commerce Trust Co., of City, Kans., Kansas City, Mo., and Colum- Kansas City, was admitted on May 19, and the bus, Ohio. At each point addresses were Mississippi Valley Trust Co., of St. Louis, on made by Mr. McAdoo and Mr. Harding, the May 10, while arrangements for the admission latter dealing primarily with the banking asof several other large banks are in progress and pects of the proposed loan and the duties and will doubtless be completed as soon as the relationship of the bankers of the coimtry to amendments to the Federal Reserve Act, now the undertaking. Great interest and enthusipending, are enacted. A number of State asm were manifested by the public throughout institutions are either in process of examination the entire journey and the heartiest pledges of or passing through the preliminary stages of cooperation and aid were received. In order the process of admission to the system. The to further the development of the plans for the State banks generally have viewed with approval placing of the loan a similar trip, beginning on the amendments to the Federal Reserve Act June 4 and lasting for nine days, has been pronow pending in Congress, particularly in so far jected. On this it is planned to visit New Engas these have reference to the status of State land and southwestern points, the journey institutions in the system. The financial con- extending as far as New Orleans. Mr. Hamlin ditions growing out of the war have likewise will be a member of the party during the visit impressed them with their obligations to the to New England and Governor Harding will general banking organization of the country and join it during the time spent in the South and have undoubtedly led many to look at the ques- West. tion of membership with a seriousness that they otherwise perhaps would not have felt. Rediscount of Notes Secured by Bonds. In the main, however, the influence operating to extend the membership of the system is the On May 22, after consideration of the quesgeneral recognition of the benefits that may tion how the Federal Reserve Banks could best be directly derived from it by institutions of participate in furthering the progress of the all classes. Among the small State banks of the Liberty Loan, the Federal Reserve Board de- West and Northwest there has been a wide- termined upon the establishment of a rate of spread demand for a modification of the Federal 3i per cent for the rediscount of customers' Reserve Act designed to.permit the admission notes of not to exceed 90 days' maturity, seof banks with capital smaller than that required I cured by Treasury certificates or Liberty Loan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

430 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. bonds, such rate to be approved for any Federal selves for any unusual withdrawals they may Reserve Bank which might see fit to establish have to meet. it. The Board's view of the matter was set The facilities offered by Federal Reserve Banks for the rediscount of 15-day member forth in a letter addressed to all Federal bank collateral notes, secured by commercial Reserve Banks, and transmitted under date paper or Government securities, should prove of May 22, as follows: of great value in meeting such withdrawals. The task of developing an organization for The rates now established for this class of paper the successful flotation of the Liberty Loan are low, varying between 3 and 3J per cent in through the agency of the Federal Reserve the various districts. Banks should realize Banks has made satisfactory progress. All that, under present circumstances, it will be districts report that the committees organized their patriotic duty freely to avail themselves by the Federal Reserve Banks are actively at of these facilities. They will thus be able to work with very encouraging results. keep money rates easy. Member banks should At its meeting to-day the Federal Reserve also be impressed with the importance of Board considered the question how Federal making their rediscount arrangements in ad- Reserve Banks may use their credit facilities vance of the dates of payment of the various to assist in the placing of the loan, and it was installments. determined that this could be brought about The Board has been advised that many by establishing a special rate for notes secured corporations, including savings banks, have by Liberty Loan bonds and United States agreed to subscribe to substantial amounts of Treasury certificates of indebtedness and by a the Liberty Loan, carrying the bonds for their special ruling applying to facilities to be employees subject to payment in small ingranted to member banks rediscounting such stallments. It has been suggested that it notes for nonmember banks. would be helpful to the banks in placing the In order that the installments due on the Liberty Loan, and particularly in assisting Liberty Loan may be steadily and gradually corporations which make subscriptions of this anticipated, the Board believes that all the character, if Federal Reserve Banks were aubanks of the country should cooperate in ac- thorized to establish a special Liberty Loan cumulating United States Treasury certificates rate of 3J per cent for notes, drafts, and bills of indebtedness. The purchase of these cer- of exchange drawn by customers of the banks, tificates in advance of the dates on which the including savings banks, having a maturity not Liberty Loan installments fall due, combined in excess of 90 days, and secured by Liberty with the plan of redeposit outlined hy the Loan bonds or United States Treasury cer- Secretary of the Treasury in Circular No. 79, tificates of indebtedness. The Board has given dated May 16, 1917, will, it is thought, reduce this matter its careful consideration and has to a minimum any disturbance of the money determined that it will grant such a rate to any market that might result from the transfer of Federal Reserve Banks requesting it, good until the large sums of money employed in paying countermanded or modified. for the Liberty Loan. Consideration has also been given to the As far as possible all moneys paid in will be needs of nonmember banks under present conreturned to the market without delay, in order ditions. While the law provides that member that there may be no substantial withdrawal banks may not, except with the special perof funds from general use. With this policy mission of the Board, act as agents in redisin operation, it is hoped to avoid any appre- counting for nonmember banks, the Board feels ciable shortage or contraction of banking that, in view of the magnitude of the task imfunds, even though some time be required for posed upon all banks of the country, member the return of the funds to the usual channels. banks should be permitted to rediscount for To meet temporary shortages which may nonmember banks, including the savings banks, arise here and there, however, the Federal whenever the proceeds have been or will be used Reserve System should freely render assistance in meeting demands caused by subscriptions to as needed, and it is suggested, therefore, that the Liberty Loan. From June 15 to July 15, when the time for the payment of the install- 1917, subject to further notice, Federal Reserve ments draws near Federal Reserve Banks Banks are therefore authorized, for such purestablish or maintain liberal rates of discount poses, to rediscount such nonmember bank at which member banks may, hj rediscounting paper, indorsed by member banks and otherwith the Federal Reserve Banks, recoup them- wise eligible, without any further permission Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNK 1, FEDBBAL BBSE.RVE BULLETIN. 431 from this Board. It is left to the discretion otherwise to neutral countries in Europe for of the Federal liescrve Banks to withhold the the account of alien enemies. facilities whenever they believe that assistance It is, of course, difficult for a bank to deis requested for other than the large objects and termine offhand whether or not a transfer is purposes to be carried out at this time. for the account of alien enemies, when it is asked by an individual or corporation in this country to make a transfer to a bank in a Transactions With Alien Enemies, neutral country. The Board is advised, however, that the The Federal Reserve Board, acting upon ad- State Department is anxious that bankers vices received from the Department of State, throughout the country should be warned that they should scrutinize most carefully every has transmitted to Federal Reserve Banks for application made to them involving the transretransmission to member and other banks in fers of funds to neutral European countries, the several districts for their guidance a letter which transfers seem intended to give aid to relating to transactions of American banks the enemies of this country, either directly or which involve dealings with alien enemies. indirectly. The letter is as follows: The Board is further advised that the State Department is interested in banking trans- The Board is in receipt of a letter from the actions between this country and Mexico or Counselor for the Department of State, calling other Latin-American countries, as there is its attention to the desirability of guarding some evidence in its possession that alien eneagainst transfers of banking credits to neutral mies operating either as individuals or through countries for account of alien enemies, and the instrumentality of an American corporaagainst the use of domestic credits for similar tion, or otherwise, are desirous of fomenting purposes. trouble between this country and other Re^ The Board is informed that the State De- publics of this hemisphere, and in order to partment is not concerned in the ordinary com- further their plans they must rely upon finanmercial transactions and routine bank accounts cial assistance through the form of credits of aliens of whatsoever nationality, resident in opened in their behalf in this country. It is, the United States, with banks situated therein. of course, true that many accounts held by It is suggested by the department, however, banks in this country for the benefit of alien that each banker doing business in this country enemies resident in countries adjacent to the should scrutinize with particular care such ac- United States are ordinary commercial accounts as may be held by his bank for any resi- counts, and up to the present time the State dent alien enemy, and in the event any sus- Department has disclaimed any disposition to picious transactions occur in connection with interfere with the free operation of such acsuch accounts, that they be reported immedi- counts, being interested only in such transately to the Board for transmission to the actions as may appear to the bankers who a're proper department, requested to facilitate the same as being of a suspicious character. IMPORTANT TRANSACTIONS. The Board is of the opinion that, in view of The transactions which are interesting to the your intimate contact with member banks in State Department may bo divided into three your district, you are in a position to secure classes: their cooperation in scrutinizing and super- 1. Foreign exchange transactions between vising financial transactions made or attempted banks in this country and banks in neutral to be made for the benefit of alien enemies. countries in Europe; Reports of suspicious transactions coming to 2. Ordinary banking transactions such as the the notice of banks should be made to the obtaining of credits by alien enemies resident Board by wire, in order that the officials of in the United States; the proper department may be advised and 3. Banking transactions between this coun- immediately make investigations. try and Mexico, or Central American and South American countries. NONMEMBER BANKS. The State Department is especially inter- There are, of course, many trust companies, ested in preventing all transfers of money by State banks, and private bankers with which cable, by draft, or by shipments of currency or your bank has no intimate relationship. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

432 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. Board believes, however, that if an appeal people of the United States of America for should be made to these banks and bankers $2,000,000,000 of the 15/30 year 3-J- per cent they would readily observe such precaution- gold bonds of an issue authorized by act of ary methods as you may, with the approval of Congress approved April 24, 1917. the Board, ask your member banks to comply with. Express companies and telegraph com- DESCRIPTION OF BONDS. panies doing a banking business in transmitting Bearer bonds, with interest coupons attached, currency or credits by express or by wire should will be issued in denominations of "*""* """" also be" asked to cooperate on the lines sug- $500, and $1,000. Bonds registered as to pringested above. cipal and interest will be issued in denomina- The attention of the Comptroller of the tions of $100, $500, $1,000, $5,000, $10,000, Currency has been called to this letter and he $50,000, and $100,000. Provision will be made has been asked to enlist the cooperation of the for the interchange of bonds of different delarge force of national-bank examiners working nominations and of coupon and registered under his supervision. It is believed that bonds, upon payment, if the Secretary of the their assistance will be of great value in securing Treasury shall require, of a charge not"exceedthe information desired and in further enlisting ing $1 for each new bond issued upon such exthe cooperation of the banks with which they change. Transfers of registered bonds and come in contact in their work. You are re- exchanges of registered and coupon bonds and quested to urge the banking departments of of bonds of different denominations will not be the States in your district to cooperate in the made until October 1, 1917, or such later date same manner through their bank examiners. as may be designated by the Secretary of the It is requested by the Board that a copy of Treasury. this letter be sent to all banks and trust com- The bonds will be dated June 15, 1917, and panies in your district, in order that they may will bear interest at the rate of 3J per centum understand that, while innocent transactions per annum from that date, payable semiannuof a domestic character with alien enemies are ally on December 15 and June 15. The bonds unobjectionable, no business of a nature cal- will mature June 15,1947, but the issue may be culated to give aid or comfort to the enemy redeemed on or after June 15,1932, in whole or directly or indirectly will be countenanced. in part, at par and accrued interest, on three MAY 10, 1917. months' published notice, on any interest day; in case of partial redemption the bonds to be redeemed to be determined by lot by such Flotation of Liberty Loan. method as may be prescribed by the Secretary of the Treasury. The principal and interest Following are the circulars and communicaof the bonds will be payable in United States tions issued by the Treasury Department with gold coin of the present standard of value, and respect to the new Liberty Loan. They are re- the bonds will be exempt, both as to principal printed here for convenience of reference and and interest, from all taxation, except estate also as a matter of record. Later documents or inheritance taxes, imposed by authority of the United States or its possessions, or by any relating to the same matter will be published State or local taxing authorities. The bonds from time to time in order that the complete will not bear the circulation privilege, but will series may be available to readers of the FED- be receivable as security for deposits of public ERAL RESERVE BULLETIN in consecutive form. money. On May 14 a prospectus or general descrip- If any subsequent series of bonds (not including Treasury certificates of indebtedness and tion was sent out as follows: other short-term obligations) shall be issued by the United States at a higher rate of interest LIBERTY LOAN. than three and one-half per centum per annum 1917. Department Circular No. 78. before the termination of the war between the (Liberty Loan Circular No. 1.) United States of America and the Imperial Loans and Currency. German Government (the date of such termina- TREASURY DEPARTMENT, tion to be fixed by a proclamation of the Presi- OFFICE OF THE SECRETARY, dent of the United States), the holders of any Washington, May 14,1917. of the bonds of the present issue shall have the The Secretary of the Treasury invites sub- privilege of converting the same, within such scriptions at par and accrued interest from the period and upon such further terms and condi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 433 tions covering matters of detail as the Secretary ALLOTMENTS. of the Treasury may prescribe, into an equal Allotments will be made as soon after June par amount of bonds bearing such higher rate 15 as possible. The Secretary of the Treasury of interest and substantially identical with the reserves the right to reject any subscriptions, bonds of such new series, except that the bonds or to make allotment of part of the amount issued upon such conversion are to be identical subscribed for, and to allot in full upon appliwith the bonds of the present series as to maturcations" for smaller amounts of bonds even ity of principal and interest and terms of though it may be necessary to reduce allotredemption. ments on applications for larger amounts, APPLICATIONS. should any such action be deemed by him to The agencies designated by the Secretary of be in the public interest; and his decision in the Treasury to receive applications for the these respects will be final. In any case of the bonds now offered are the Treasury Department rejection of an application, the accompanying in Washington, D. C, and the Federal Reserve payment of 2 per centum of the amount applied Banks in Boston, New York, Philadelphia, for will be returned. In case of partial'allot- Cleveland, Richmond, Atlanta (with branch at ment the 2 per centum payment will be retained New Orleans), Chicago, St. Louis, Minneapolis, and any excess applied upon the next install- Kansas City, Dallas, and San Francisco. Said ment. Upon allotment of bonds by the Secbanks have been designated also, as fiscal agents retary of the Treasury, the subscriber will of the United States, to collate applications and receive notice thereof signed by or on behalf to give notices of the allotments which the Sec- of the Federal Reserve Bank of his district. retary of the Treasury will eventually make to Unless and until payment in full has been made, subscribers and to issue interim certificates for further payments must be made when and as payments made on allotted subscriptions. below provided under penalty of forfeiture of Large numbers of National banks, State any and all installments previously paid and of banks and trust companies, private bankers, all right or interest in the bonds allotted. express companies, newspapers, department stores, and other private corporations, firms, PAYMENTS. and organizations, have patriotically offered to receive and transmit applications for the Lib- The dates for payment in installments are as erty Loan without expense to the United States follows: or to the applicants. The Secretary of the Two per centum on application; Treasury, appreciating the value of these offers, Eighteen per centum'on June 28, 1917; will have application blanks widely distributed Twenty per centum on July 30, 1917; throughout the country to these private insti- Thirty per centum on August 15, 1917; Thirty per centum on August 30,1917. tutions and also to trie post offices and subtreasuries. Individual subscribers may use It is strongly recommended that subscribers these conveniences or may send their applica- avail themselves of the assistance of their own tions directly to the Treasury Department at banks and trust companies. In cases where Washington and to the Federal Reserve Banks. they do not do so, subscribers should make As the law prohibits the allowance or payment of payment, either in cash to the Treasury Decommissions on subscriptions, all those through partment in Washington or one of the Federal whom applications are made render service Reserve Banks, or by bank draft, check, postas a patriotic duty without compensation. office money order, or express company money All applications^ must be in the form pre- order, made payable to the order of the Treasscribed by the Secretary of the Treasury and urer of the United States if the application is be accompanied by a payment of 2 per centum filed with the Treasury Department in Washof the amount of bonds applied for. Applica- ington (thus: "Treasurer of the United States, tions must be for $50 or any multiple thereof, Liberty Loan Account"), or, if the application but any application for one $50 or $100 bond is filed elsewhere, made payable to the order until further notice may be allotted at once and of the Federal Reserve Bank of the district in payment in full accepted against delivery of an which the application is filed (thus: "Federal interim certificate. Applications must reach Reserve Bank of , Liberty Loan Acthe Treasury Department or a Federal Reserve count "). All checks must be certified. United Bank not later than noon, June 15, 1917, the States certificates of indebtedness issued under right being reserved by the Secretary of the the act of April 24, 1917, will be received at Treasury to close the subscription * on any par and accrued interest to date of settlement earlier date. m making payment in full or in installments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

434 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. Interim certificates for installment payments full-paid or accompanied by payment of the due on or after June 28 will be issued by or final installment. The expense of delivery will on behalf of the Federal Reserve Banks as be borne by the United States. Delivery of fiscal agents of the United States, and deliv- definitive bonds to holders of full-paid interim ered as far as practicable in accordance with certificates will commence as soon as practiwritten instructions given by subscribers. cable after June 28. Upon payment of the installment due June Further details may be announced by the 28, theWtice of allotment must be surrendered, Secretary of the Treasury from time to time, and upon payment of each subsequent install- information as to which as well as forms for ment the interim certificate must be presented applications may be obtained from the Treasto the Federal Reserve Bank which issued the ury Department and any Subtreasury or Fedcertificate for notation thereon of the fact of eral Reserve Bank. such payment, or for exchange for a new cer- W. G. MOADOO, tificate. After full payment such certificates Secretary of the Treasury. must be surrendered In exchange for the bonds when prepared. This was followed on May 16 by a letter Payments of installments must be made or circular relating to the retention of subscripupon the dates above stated until full payment tions in banks as follows: has been made. Payment in full may be made on and after allotment and before Au- LIBERTY LOAN. gust 30, 1917, if two weeks' prior notice in PURCHASE OF TREASURY CERTIFICATES OF INwriting of the intention to make such payment, DEBTEDNESS AND DEPOSITS OF GOVERNMENT stating the date upon which such payment will FUNDS IN CONNECTION WITH THE LIBERTY be made, shall have been filed with the Federal LOAN. Reserve Bank of the district in which the sub- 1917. scriber will make payment; but such notice Department Circular No. 79. Liberty Loan Circular No. 2. shall not be required in case of any allotment of not exceeding $10,000 bonds or when pay- Division of Public Moneys. ment is to be made in Treasury certificates of TREASURY DEPARTMENT, indebtedness. OFFICE OF THE SECRETARY, As the bonds will carry six months7 interest Washington, May 16, 1917. payable December 15, 1917, interest accruing To incorporated Banlcs and Trust Companies in on the bonds allotted, from June 15, 1917, to the United States: the date of full and final payment, must be Referring to Treasury Circular No. 78, dated added to the last payment, credit being given May 14, 1917, inviting subscriptions for bonds for interest at the like rate upon the several of the Liberty Loan: installment payments as follows: As to 2 per In order to avoid, even temporarily, a centum of the amount of bonds allotted upon derangement of the money situation, the Secreapplication, from June 15, 1917, and, as to tary of the Treasury earnestly requests that all subsequent installments duly paid, from the banks and trust companies, which have or respective dates upon which payment thereof expect to have payments to make for themis required to be made as above provided. selves, or others, on account of subscriptions to Tables showing the amount of accrued interest the loan, acquire, as and when offered from payable on August 30 in case payment is made time to time, Treasury certificates of indebtedin installments, and the amount of accrued ness, issued under the act approved April 24, interest payable upon various dates in case 1917, to as large an amount as practicable and payment is made in full prior to August 30 as at least equal to 50 per cent of the payments herein permitted, will be prepared and fur- which they will have to make from time to nished through the Treasury Department in time on account of subscriptions, and that they Washington and the Federal Reserve Banks. utilize such certificates of indebtedness in Within the United States and its Territories making payment. Inasmuch as such certifiand insular possessions, bonds when prepared cates of indebtedness are payable at any will be delivered so far as practicable in ac- Federal Reserve Bank, banks and trust comcordance with the written instructions of the panies in acting upon this request will, gradholders of the interim certificates upon sur- ually and without disturbing the money render to the Treasury Department in Wash- market, acquire exchange payable in the place ington, or the Federal Reserve Bank which where subscriptions arc to be paid, and meanissued the certificate, of interim certificates while will secure an adequate interest return Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 435 upon their money, and the privilege for them- interest and other payments. As soon after selves and their customers, to the extent of the July 2 as practicable the qualifications and certificates of indebtedness acquired, of making securities of other banks and trust companies payment in full for bonds allotted, without desiring to participate in redeposits will be previous notice, if desired. passed upon, and after provision has been made As a further precaution, the Secretary of the for the immediate disbursements which the Treasury has determined that banks and trust United States will have to make up to and companies having payments to make on ac- including July 1, the proceeds of the loan recount of subscriptions for $100,000 or more ceived from time to time, in full or installment bonds, and which shall have qualified as de- payments, will be redeposited with qualified positaries, may make payment upon such banks and trust companies in a proportion, subscriptions on June 28 (as to any amounts yet to be determined, based upon the amounts not paid in Treasury certificates of indebted- of bonds of the Liberty Loan for which subness) by credit on their books to the account of scriptions are filed by and through them, and the Treasurer of the United States, of which upon the amount of Treasury certificates of credit and of the amount thereof notice shall indebtedness acquired by them and utilized in be given in duplicate to the Treasurer and to payment thereupon on or before June 28. the Federal Reserve Bank of the district on or Such deposits will, of course, be subject to call. before June 28. The amounts so credited will Interest at the rate of 2 per cent per annum be withdrawn from time to time when and as is to be allowed by the banks upon the amounts required. How long they may be permitted credited and redisposited from time to time. to remain will depend on large measure on the A statement as to the formalities of qualificaextent to which the privilege of prepayment tion for the purpose of making payment by for the bonds of the Liberty Loan on or before credit, and of receiving redeposit of funds, and June 28 is availed of. It will be necessary that of the securities acceptable for such purposes, the early installments paid upon subscriptions will be promptly furnished. The furnishing of to the loan be devoted largely to the payment security for such deposits is required by section of the short-term Treasury certificates of indebt- 7 of the act approved April 24, 1917, under edness, which have been and will be placed which the Liberty Loan is issued, and section throughout the country chiefly for making 5153 of the Revised Statutes and amendments loans to Governments engaged in making war thereto. Each bank or trust company should against Germany, and in part to meet unusual at the earliest possible date make report to war expenditures of our own Government. the Federal Reserve Bank of its district of As, however, practically all the proceeds of the the character and amount of the securities Liberty Loan, whether advanced to foreign which it will offer as security. These will be Governments or expended directly by depart- reported to the Secretary of the Treasury, and, ments of the United States, vail be spent in when his approval shall have been obtained, this country in payment of indebtedness hereto- notification thereof will be made to the banks fore or hereafter incurred, the bank resources and trust companies, respectively. of the United States as a whole will not be di- The Secretary feels that he can not too minished and the operation involves only a strongly urge upon the banks and trust comshifting of credits. panies of the country that it is their patriotic Because of the great amount of work in- duty to prepare for the payments which they volved in passing upon the qualifications and will have to make on account of the Liberty securities of the banks and trust companies Loan, first, by the acquisition of certificates of which will have payments to make, it is deemed indebtedness, and, second, by qualifying under necessary, until after July 1, to limit to those the act so as to be in a position to make paybanks and trust companies having payments ment by credit if the subscriptions by and to make on subscriptions for $100,000 or more through them are likely to amount to $100,000 bonds, the provision for making payment by or more bonds. Bearing in mind the enormous credit—the object in providing for payment by amount of work involved on the part of the credit being to avoid any disturbance in the Treasury Department and Federal Reserve money position which might result from large Banks, he particularly urges that action in payments being made from June 28 to Mon- these matters be taken as promptly as possible day, July 2, a period when there is customarily by the banks and trust companies, inasmuch as a heavy movement of funds due to corporate it may be physically impossible to pass upon 100256—17 3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

436 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. the qualifications of Late applicants if many ap- money orders, drawn to the above order, will plications are long delayed, and the object of be accepted. permitting payment in certificates of indebted- 5. After this procedure has been followed the ness—to avoid accumulation of great cash pay- organization has no further responsibility, the ments within a few days—will in large measure subscriber having entered into direct relations be defeated if such purchases are long post- with the Federal Reserve Bank, and subseponed. quent communications will be with the subscriber direct. W. G. MCADOO, Secretary of the Treasury. W. G. MCADOO, Secretary of the Treasury. The following letter conveying suggestions as to the methods by which organizations and The following is the form of application for enterprises might work in behalf of the loan bonds sent out by the Treasury Department for was transmitted on May 15, as follows: the use of prospective subscribers: LIBERTY LOAN. Treasury T.) epar tin en t, 1917 Liberty Loan—Form No. 1. SUGGESTIONS AS TO METHODS OF RECEIVING Loans and Currency. AND FILING SUBSCRIPTIONS BY ORGANIZA- LIBERTY LOAN. TIONS OTHER THAN BANKS OR TRUST COM- PANIES. APPLICATION FOB BONDS. This application should be transmitted Treasury Department, 1917 Liberty Loan. through the subscriber's bank, trust company, or other agency acting on his behalf, or it may Circular Letter No. 1. be filed direct with the Federal Reserve Bank TREASURY DEPARTMENT, of his district or the Treasury Department at OFFICE OF THE SECRETARY, Washington. Washington, D. C, May 15, 1917. Dated . Referring to your highly appreciated offer To the SECRETARY OF THE TREASURY: of services in connection with the distribution According to the terms of Treasury Department Circular of the Liberty Loan, I desire to suggest the No. 78, dated May 14, 1917, the undersigned hereby apply method of procedure whoroby such services for %—• par value of the 15-30 year 3J per cent gold bonds of the United States, and agree to pay par and may be rendered with a minimum of effort on accrued interest for any bonds allotted on this application. the part of your organization and with a maxi- The sum of % is inclosed, being 2 per cent on the mum of efficiency. amount of bonds applied for (or payment in full for the one §50 or the one $100 bond applied for). 1. The organization solicits subscriptions in Signature of subscriber, in full, . its own way from its readers, customers, and Address—Number and street, . the public in general, by methods to be de- City or town, . vised by the organization. County, . State, . NOTE.—It is desirable that the following information 2. Subscriptions received should be on Form be furnished by the applicant: 1,'a copy of which is inclosed herewith, or on 1. If full payment is to be made before final installment a facsimile thereof which you may print your- date indicated in the circular, what will be the date of such full payment? . self, or additional copies can be obtained by 2. If it is expected that future payments will be made application to the Federal Reserve Bank in by check, upon what bank or trust company will such your district or to the Secretary of the Treas- checks probably be drawn? ury, Division of Loans and Currency, Wash- Name of bank or trust company: —. Address: . ington, D. C. 3. What, if any, particular denominations of interim 3. The organization should file from time to certificates are desired? . time with the Federal Reserve Bank of its dis- 4. Through what, if any, bank or other agency is this trict (see map inclosed) each individual appli- application transmitted? . cation received by it. By way of illustrating the work that has 4. Checks accompanying the applications been done by Federal Reserve Banks in purshould be drawn to the order of "Federal Re- suance of their efforts to further the flotation serve Bank of (here insert name of city where of the loan, there is appended hereto the cirbank is located), Liberty Loan Account." cular letter on the subject sent out by the All checks must be certified. Bank drafts, post-office money orders, or express-company Federal Reserve Bank of Chicago. This is Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1, 1017. EEDEKAL RESERVE BULLETIN. 437 presented merely as an illustration of the employees to pay for them on the installment material that has been distributed, other plan. Arrange yourselves to carry small subscribers on the installment plan, carrying the Federal Reserve Banks having undertaken the bonds as collateral until they complete their circulation of matter of the same description: payments. Ask each employer to stamp in red on his pay envelope: uDo YOUR PATRIOTIC FEDERAL, RESERVE BANK, DUTY. SUBSCRIBE FOR A LIBERTY LOAN OF CHICAGO, BOND." 79 West Monroe Street By all means make a personal appeal to the To the Banks and Bankers in the Seventh farmer. His cattle, hogs, corn, and wheat have Federal Reserve District: been bringing fabulous prices. He has profited The Government of the United States must because of the war. Appeal to him to support rely upon you to place successfully the Liberty his Government by contributing a small part Loan. Ordinary investors will take care of the of his profits to aid the Government in winning first billion. The second billion must come this struggle. from the wage earner, the farmer, and the It is suggested that each bank inclose with merchant. its June 1st statement envelopes a slip urging We have already forwarded to you the each depositor to buy Liberty Loan Bonds, official prospectus and a number of official this recommendation to be signed by the subscription blanks. More of these can be president of the bank. obtained at once by wiring or writing to the The Government has entered the most gigan- Publicity Loan Committee, La Salle and Mon- tic struggle in the world's history. Its motives roe Streets, Chicago. We will forward to you are unselfish. It is fighting for liberty and for shortly a sample of a very attractive poster. the preservation of human rights. Put your Additional copies of this poster can be obtained shoulder to the wheel and help. from the same place. Put these in your office, All banks and bankers are authorized to in prominent places in your city, in factories, receive subscriptions. Let each appeal include hotels, and stores. the following: "Go TO YOUR BANK AND We offer the following suggestions: SUBSCRIBE." If you have not already done so, call a meet- CHICAGO, May 19, 1917. ing of your banks at once and organize by counties, for the purpose of promoting the Liberty Loan. Telegraph to the " Liberty Loan Distribution Committee/' care of this Personnel of Liberty Loan Committees. bank, just as soon as your local committee is The following Liberty Loan committees have organized; tell them what you have done and what you want. They are prepared to fur- been established in the several Federal Renish sample circulars and other selling data, serve districts: organizers, and speakers, and will suggest DISTRICT NO. 1—BOSTON. methods to committees already organized. Second. Go to your local press and solicit Alfred L. Aiken, chairman; N. Penrose Hallbwell, vice their cooperation and support. Get them to chairman; Jacob A. Barbey, Frederic H. Curtiss, Jere A. put stirring, spicy appeals in their editorial col- Downs, John R. Macomber, Henry Parkman, Frank W. umns, and, if possible, in their advertising Remick, Philip Stockton, Daniel G. Wing. columns. Every movie theater in Chicago is displaying DISTRICT NO. 2—NEW YORK. patriotic signs urging subscription to the Lib- Benjamin Strong, chairman: Arthur M. Anderson, exerty Loan, and spicy speeches are being de- ecutive manager; James S. Alexander, George C. Baker, livered in these places. Allen B. Forbes, Gates W. McGarrah, Seward Prosser, Go to your ministers. Ask them to appeal Charles H. Sabin, Jacob II. Schiff, Frank A. Yanderlip, to their parishioners from the pulpit to support Albert II. Wiggin, William Woodward. the Government in this emergency by sub- Committee on distribution.—Allen B. Forbes, chairman; scribing to the bonds. Franklin Q. Brown, James Brown, Clarence Dillon, Call in all employers of labor. Ask them to Plinky Fisk, N. D. Jay, G. H. Kinnicutt, 0. E. Mitchell, organize Liberty Loan clubs amongst their em- C. S. Sargent, A. J. Sheldon, Frederick H. Strauss, F. M. ployees. Many large employers in Chicago Weld. have already done this, subscribing direct for Committee on budget.—Benjamin Strong, George L. a round amount of bonds and allowing their Baker, Gates W. McGarrah. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

438 FEDERAL RESERVE BULLETIN. JUNE 1, 1017. Committee on bond department.—William Woodward, DISTRICT NO. 9—MINNEAPOLIS. chairman. John H. Rich, chairman; Curtis L. Mosher, Theodore Committee on publicity.—F. A. Vanderlip, chairman. Wold, Arthur R. Rogers. DISTRICT NO. 3—PHILADELPHIA. In Montana, North and South Dakota, Wisconsin, and northern Michigan the directors of the Federal Reserve L. L. Rue, E. F. Shanbacker, W. D. Grange, John H. Bank have been designated as State chairman. Mason, William P. Gest, George H. Frazier, E. B. Morris, In Minnesota the State Bankers' Association will con- F. T. Chandler, Edward B. Smith, Richard Y. Cook, stitute the campaign committee, employing its group E. T. Stotesbury, E. W. Clark. Governor of Federal organizations in various parts of the State. Reserve Bank and Federal Reserve Agent are ex officio The clearing houses of Minneapolis, St. Paul, and members of the committee. Duluth have taken charge of their respective cities. DISTRICT NO. 4—CLEVELAND. DISTRICT NO. 10—KANSAS CITY. D. C. Wills, chairman, Cleveland, Ohio; E. R. Fancher, J. Z. Miller, jr., governor of Federal Reserve Bank, Cleveland, Ohio; Geo. D. Bates, Akron, Ohio; Robert C. chairman; G. S. Hovey, E. F. Swinney, J. W. Perry, J. F. Dalzell, Wheeling, W. Va.; M. E. Dennison, Youngstown, Downing, George T. Tremble, Thornton Cooke, G. M. Ohio; Clarence Kiefer, Dayton, Ohio; H. C. McEldowney, Smith, H. L. Jarboe, jr., C. W. Watson, P. E. Goebel. Pittsburgh, Pa.; Chas. Messenkopf, Erie, Pa.; C. A. Paine, Cleveland, Ohio; Henry W. Harter, Canton, Ohio; J. J. DISTRICT NO. 11—DALLAS. Rowe, Cincinnati, Ohio; P. L. Schneider, Columbus, K. M. Van Zandt, Fort Worth, Tex.; Alex. Sanger, Dallas, Ohio; H. I. Shepherd, Toledo, Ohio; J. W. Stoll, Lex- Tex.; J. A. Kemp, Wichita Falls, Tex.; Wm. J. Bayersington, Ky.; Geo. W. Winger, Springfield, Ohio. doriler, Shreveport, La.; S. H. H. Shear, Waco, Tex.; Executive committee—E. R. Fancher, chairman; D. C. J. W. Butler, Clifton, Tex.; Edward Rotan, Waco, Tex.; Wills, C. A. Paine, H. C. McEldowney; L. B. William, Jake Easton, Antlers, Okla.; Charles 0. Austin (State executive manager; F. F. Wilkinson, executive secretary. banking commission), Austin, Tex.; Jesse H. Jones, Houston, Tex.; Geo. T. Jester, Corsicana, Tex.; Dr. E. P. DISTRICT NO. 5—RICHMOND. Wilmot, Austin, Tex.; F. F. Downs, Temple, Tex.; John Sealy, Galveston, Tex.; Royal A. Ferris, Dallas, Tex., Executives.—Richard H. Smith, chairman; H. W. Jack- Louis Lipsitz, Dallas, Tex.; W. R. Brentz, Sherman, Tex.; son, vice chairman; E. P. McConnell, secretary; W. T. Henry James, Abilene, Tex.; W. H. Patrick, Clarendon, Dabney, executive manager; E. L. Bemiss, John Kerr Tex.; E. 0. Tenison, Dallas, Tex.; Gus F. Taylor, Tyler, Branch, W. M. Addison. Tex.; D. C. Giddings, Brenham, Tex. Other members.—W. M. Habliston, Fred W. Scott, Julian H. Hill, Oliver J. Sands, L. Z. Morris, John T. Wilson, DISTRICT NO. 12—SAN FRANCISCO. H. N. Phillips, Charles Hutzler, Oscar E. Parrish, A. L. Archibald Kains, chairman; G. K. Weeks, executive Adamson, H. R. Pollard, jr., G. W. Call, J. L. Davis, manager; Henry T. Scott, I. W. Hellmari, sr., Herbert L. M. Williams, F. E. Nolting, Coleman Wortham, Henry Fleishhacker, Frank B. Anderson, W. H. Crocker, Rudolph L. Cabell, Henry S. Hutzler. Spreckles, A. P. Gianinni, John S. Drum, George Tourny, R. M. Tobin, John A. Britton. DISTRICT NO. 6—-ATLANTA. Federal Reserve Bank officers and Mell R. Wilkinson, Fred J. Paxon, W. C. Wardlaw, Ivan E. Allen, J. Epps Cooperation of American Bankers Association. Brown. Replying to a resolution adopted by the DISTRICT NO. 7—CHICAGO. American Bankers Association offering its serv- James B. McDougal, governor Federal Reserve Bank, ices in connection with the Liberty Loan, Secchairman; W. A. Heath, Federal Reserve Agent; vice chairman; E. K. Boisot, Arthur Reynolds, John E. Blunt, retary McAdoo on May 9 sent the following jr., Howard W. Fenton, Charles H. Schweppe, H. L. telegram to Peter W. Goebel, president of the Stuart. association: DISTRICT NO. 8—ST. LOUIS. Please assure American Bankers Associa- Rolla Wells, chairman; W. W. Hoxton, secretary; and tion of my deep appreciation of the patriotic 23 members of clearing houses. resolution just adopted and communicated to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNK 1, 1917. FEDERAL RESERVE BULLETIN. 439 me by wire pledging the unqualified and untir- In reply I have to say, as pointed out in ing support of the American Bankers Associa- previous correspondence, that Federal Reserve tion in any direction where the Government Banks are not entitled under the law to use may find such support of value in the great penalty envelopes to send matter in the mails affairs which are engaging the attention of the free of postage, and, therefore, this department Nation. I shall avail myself of this support is without authority to instruct postmasters to because I know it can be tremendously valu- accept for mailing free of postage under penalty able in the large financial operations in which envelopes matter mailed by such banks. the Government must engage until this war MAY 8, 1917. for liberty has been successfully won. May I at the same time take advantage of this occasion to urge upon the American Bankers Asso- Cost of Telegrams Relating to Bond Issue. ciation the superlative importance of still further strengthening the organization of the The Federal Reserve Board has transmitted banking system of the United States by using its great influence to induce the State banks to Federal Reserve Banks messages sent to to join the national banks in making the Fed- telegraph companies by the Treasury Departeral Reserve system an instrument of un- ment relative to charges on messages relating questionable power to meet any emergency to loan operations as follows: with which the Nation may in the future be faced. I regard this as one of the supremely Secretary of Treasury requests you notify patriotic duties of the hour. The time may your managers in all Federal Reserve Bank come when the financial resources of the coun- cities—New York, Philadelphia, Richmond, try will not be commensurate with the national Cleveland, Atlanta, Dallas, St. Louis, Kansas purpose if the Nation remains half State bank City, Chicago, Minneapolis, and San Francisand half national bank in its organization. co—that great many telegrams relating to the The State banks will find greater security for forthcoming bond issue will be filed by abovethemselves if disaster should threaten if they named banks and that such telegrams should are members of the Federal Reserve system, be transmitted at Government rates and bills and the Federal Reserve system itself will be sent to Treasury Department. Banks will be irresistibly strong if the State banks unite notified to indorse all such messages " Official with the national banks in making it a su- business—Government rate," charge Treasury premely useful national instrument. I com- Department. Please notify your agents as mend this question to your earnest and patri- soon as possible. otic consideration, with the sincere hope that Please instruct your representatives in love of our common country may surmount Federal Reserve Bank cities that Treasury every other consideration and bring about this Department request of 3rd instant as to extremely desirable result. charging to this department telegrams relating to the bond issue filed by Federal Reserve Banks is intended to include collect messages from other banks to Federal Reserve Banks or Frank on Correspondence Relating to Bonds. Federal Reserve Agents. Please acknowledge. The following letter, received from the Post Office Department by the Federal Reserve State Banks Admitted. Board, states the position of the department with reference to the use of franked envelopes The following. State institutions were adin correspondence relating to Government mitted to membership in the Federal Reserve loans: System during the month of May: Mississippi Receipt is acknowledged of your letter of Valley Trust Co., St. Louis, Mo.; Hettinger to-day, suggesting that postmasters of the State Bank, Hettinger, N. Dak.; Commerce cities in which Federal Reserve Banks are Trust Co., Kansas City, Mo.; and the Winlocated be authorized to accept from such chester Trust Co., Winchester, Mass.; the numbanks free of postage under the penalty privilege matter mailed by them in connection with ber of State institutions which have now joined the flotation of the Liberty Loan of 1917. the system being 48. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

440 FEDERAL RESERVE BULLETIN. UNI: 1. 191.7. Plan for Issue of Federal Reserve Drafts. against the enforcement of any order forbidding or discouraging the use of their machines for The following letter was sent to Federal Recounting gold coin, but when the matter is exserve Banks under date of May 12, 1917: plained to them they ought to see the im- Referring to my letter of April 25, inclosing portance of protecting the country's gold supuniform plan for the issue of Federal Reserve ply and discouraging the wasteful use of gold exchange drafts, to become operative on May for pay rolls, especially when it is remembered 21, you are advised that, in view of the vast that the recipient of gold coin would in most amount of detail work imposed upon Federal cases much prefer paper money. Of course, Reserve Banks in connection with the flotation it is unnecessary to say that coin counting of the Liberty Loan, the Board has decided machines are very valuable in counting silver that it would be advisable to postpone the date money, and their use in this .way is in no way on which this plan is to become effective to objected to, silver coinage being accepted by June 1, 1917. tale and not by weight. It is suggested that the banks of your district be invited to point out to corporations or firms Branch in Baltimore* of their district using these coin counting ma- The Federal Reserve Board has had under chines that they should forego the slightest consideration the approval of a plan submitted advantage or greater convenience derived from the use of gold in making up their pay rolls, in by the Federal Reserve Bank of Richmond to view of the loss such use causes to the country establish a branch in Baltimore. It has inby the abrasion involved and by the keeping in formally reached agreement that it will take circulation of gold which if held by the Federal favorable action upon the proposal, but has Reserve Banks would add to the greater credit deferred formal decision until such time as it power of the country. is advised of the action of Congress with reference to the amendments to the Federal Reserve Fiduciary Powers. Act now pending before that body, inasmuch as The applications of the following banks for these amendments have a direct bearing upon permission to act under section ll(k) of the the case of other cities, the establishment of Federal Reserve Act have been approved since branches in which is under consideration. the issue of the May Bulletin: DISTRICT NO. 1. Use of Coin Counting Machines. Trustee, executor, and administrator: Learning that considerable sums in gold are Capital National Bank, Windsor, Vt. regularly withdrawn from banks in various DISTRICT NO. 4. places for pay-roll purposes, the Federal Reserve Trustee and registrar of stocks and bonds: Board on May 15 sent the following letter to ail First-Second National Bank, Akron, Ohio. Federal Reserve Agents. First National Bank, Cleveland, Ohio. The use of gold coin in machines for counting DISTRICT No. 7. money has proved that there is quite a serious Trustee, executor, administrator, and registrar of stocks abrasion of the coin. This draws attention to and bonds: the fact that in our own county, as well as in Citizens National Bank, Crawfordsville, Ind. Europe, the use of gold coin as currency in First National Bank, Dubuque, Iowa. the hands of the people is disappearing. The Emmetsburg National Bank, Emmetsburg, Iowa. public does not want to carry gold coin, and its use leads to rapid abrasion and consequent DISTRICT No. 8. loss of value. In the United States it may be Trustee, executor, administrator, and registrar of stocks truly said that as a practical matter coined and bonds: gold is only used as security behind gold cer- First National Bank, Fordyce, Ark. tificates, or for foreign exchange purposes National Bank of Commerce in St. Louis, St. Louis, Mo. where nothing else can be used in adjusting international balances. DISTRICT NO. 12. The manufacturers of coin counting machines Registrar of stocks and bonds: will undoubtedly make a strenuous protest Boise City National Bank, Boise, Idaho. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNK 1. 1917 FEDERAL RESERVE BULLETIN. 441 Failures by Federal Reserve Districts. in conference committee, and it had been expected that a definite conclusion would be The reduction in ike country's mortality, arrived at for the purpose of reconciling the which has been a conspicuous feature for many differences between the Senate and House months, continues, 371 commercial failures drafts of the bill. Unexpected delays having being reported to II. G. Dun & Co. for three occurred, the bill is herewith reprintod in its weeks of May, as against 1,015 in the same latest form, with the measure as passed by period of 1916. With only .1,069 defaults, the the House and then stricken, out by the Senate record for April, the latest month for which first presented, followed by the Senate draft. complete returns are available, is the best in point of number of any month back to June, [65th Congress, 1st session. 11. R. 3673. In the House of Representatives. May 10, 1917. Ordered to be printed with the amendment of 1912, and the liabilities, $12,587,213, are the the Senate.] smallest since last October and compare with AN ACT To amend the act approved December twenty- $18,382,637 in April, 1916. As contrasted third, nineteen hundred and thirteen, known as the with the high point for the period—April, Federal reserve act, as amended by the acts of August 1915—the numerical decrease is 48 per cent fourth, nineteen hundred and fourteen, August fifteenth, nineteen hundred and fourteen, March third, nineteen and the contraction in amount over 70 per hundred and fifteen, and September seventh, nineteen cent. Excepting the first and twelfth dis- hundred and sixteen. tricts, where there were increases of 5 and 4 HOUSE BILL. insolvencies, respectively, and the fourth district, where no change occurred, failures dur- Be it enacted by the Senate and House of Representatives of ing April were less numerous than last year the United States of America in Congress assembled, That section four of the act approved December twenty-third, in every Federal Reserve district and the imnineteen hundred and thirteen, known as the Federal provement was marked in nearly all instances. reserve act, be amended in the paragraph relating to the An equally good showing appears in respect appointment of class C directors and prescribing their to the liabilities, which were smaller in all duties so as to read as follows: districts, aside from fourth and twelfth, the "Class C directors shall be appointed by the Federal Reserve Board. They shall have been for at least two expansion in the latter alone being of any size, years residents of the district for which they are appointed The figures for two years are compared below: one of whom shall be designated by said board as chairman Failures during April. of the board of directors of the Federal reserve bank and as 'Federal reserve agent.' He shall be a person of tested Nnrr.ber. Liabilities. banking experience, and in addition to his duties as chair- Districts. 1917 1916 1917 ; 191(5 man of the board of directors of the Federal reserve bank, he shall be required to maintain, under regulations to be First. 122 117 £I,(H3,235 .1,805.3") 7 Second 201 243 4,005,0; 8 4,3.12,886 established by the Federal Reserve Board, a local office of T Fo h u ir rt d h ... 9 4 0 7 9 90 7 1 3 , ', 1 2 8 4 0 0 . , 1 8 9 8 2 3 1 1 , , 3 8 4 * 5 3 , , 6 3 2 6 9 3 said board on the premises of the Federal reserve bank Fifth .... 57 85 811,502 He shall make regular reports to the Federal Reserve Sixth 74 163 014,200 1,590,744 Seventh . . .. 359 3 73 850,910 3,477,(>o8 Board and shall act as its official representative for the per- N Vi i i n jh th th 5 2 4 4 6 5 4 6 2 20 0 7 8 , , 2 4 0 3 0 8 4 5 0 4 8 8 , , 9 1 7 8 5 5 formance of the functions conferred upon it by this act, Tenth 41 79 260.208 645,268 He shall receive an annual compensation to be fixed by the E leventli 4\ 80 228,577 1,023,010 Twelfth 136 352 1,279,300 805,000 Federal Reserve Board and paid monthly by the Federal Total 1,039 1,399 12,587,213 18,382,637 reserve bank to which he is designated. One of the directors of class 0, who shall be a person of tested banking expe- Amendments to the Federal Reserve Act. rience, shall be appointed by the Federal Reserve Board as deputy chairman to exercise the powers of the chairman The bill carrying amendments to the Federal of the board when necessary. Reserve Act, which has been for some time "Subject to the approval of the Federal Reserve Board, past before Congress, was adopted by the the Federal reserve agent shall appoint one or more assistants. Such assistants, who shall be persons of tested bank- House of Representatives on May 5 and by the ing experience, shall assist the Federal reserve agent in the Senate on May 9. During the week ending performance of his duties and shall also have power to act May 25 the measure was under consideration in his name and stead during his absence or disability. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

442 FEDERAL BE&ERVE BULLETIN. 1, 1917. The Federal Reserve Board shall require such bonds of the surplus: Provided, however, That the aggregate of acceptassistant Federal reserve agents as they may deem neces- ances growing out of domestic transactions shall in no sary for their own protection. Assistants to the Federal event exceed fifty per centum of such capital stock and reserve agent shall receive an annual compensation, to be surplus." fixed and paid in the same manner as that of the Federal SEC. 4. That section seventeen be, and is hereby, reserve agent." amended so as to read as follows: SEC. 2. That the first paragraph of section thirteen be "SEC. 17. So much of the provisions of section fifty-one further amended so as to read as follows: hundred and fifty-nine of the Revised Statutes of the "Any Federal reserve bank may receive from any of United States and section four of the act of June twentieth, its member banks, and from the United States, deposits eighteen hundred and seventy-four, and section eight of of current funds in lawful money, national bank notes, the act of July twelfth, eighteen hundred and eighty-two, Federal reserve notes, or checks and drafts, payable upon and of any other provisions of existing statutes as require presentation, and also for collection, maturing notes and that before any national banking association shall be aubills; or, solely for purposes of exchange or of collection, thorized to commence banking business it shall transfer may receive from other Federal reserve banks deposits of and deliver to the Treasurer of the "United States a stated current funds in lawful money, national bank notes, or amount of United States registered bonds, and so much of checks upon other Federal reserve banks, and checks and those provisions or of any other provisions of existing drafts, payable upon presentation within its district, and statutes as require any national banking association now maturing notes and bills payable within its district; or, or hereafter organized to maintain a minimum deposit of solely for the purposes of exchange or of collection, may such bonds with the Treasurer is hereby repealed." receive from any nonmember bank or trust company de- SEC. 5. That section nineteen be further amended and posits of current funds in lawful money, national bank reenacted so as to read as follows: note3, Federal reserve notes, checks and drafts payable "SEC. 19. Demand deposits within the meaning of this upon presentation, or maturing notes and bills: Provided, I act shall comprise all deposits payable within thirty days, That such nonmember bank or trust company maintains ! and time deposits shall comprise all deposits payable after with the Federal reserve bank of its district a balance in thirty days, all savings accounts and certificates of deposit an amount to be determined by the Federal Reserve Board which are subject to not less than thirty days' notice before under such rules and regulations as it may prescribe." payment, and all postal savings deposits. SEC. 3. That the fifth paragraph of section thirteen be, "Every bank, banking association, or trust company and is hereby, amended further so as to read as follows: which is or which becomes a member of any Federal reserve '' Any member bank may accept drafts or bills of exchange bank shall establish and maintain reserve balances with its drawn upon it having not more than six months sight to Federal reserve bank as follows: run, exclusive of days of grace, which grow out of trans- " (a) If not in a reserve or central reserve city, as now actions involving the importation or exportation of goods; or hereafter defined, it shall hold and maintain with the or which grow out of transactions involving the domestic Federal reserve bank of its district an actual net balance shipment of goods provided shipping documents con- equal to not less than seven per centum of the aggregate veying or securing title are attached at the time of accept- amount of its demand deposits and three per centum of its ance; or which are secured at the time of acceptance by time deposits. a warehouse receipt or other such document conveying " (b) If in a reserve city, as now or hereafter defined, or securing title covering readily marketable staples. No it shall hold and maintain with the Federal reserve bank member bank shall accept, whether in a foreign or domes- of its district an actual net balance equal to not less tic transaction, for any one person, company, firm, or than ten per centum of the aggregate amount of its demand corporation to an amount equal at any time in the aggre- deposits and three per centum of its time deposits. gate to more than ten per centum of its paid-up and un- "(c) If in a central reserve city, as now or hereafter deimpaired capital stock and surplus, unless the bank is fined, it shall hold and maintain with the Federal reserve secured either by attached documents or by some other bank of its district an actual net balance equal to not less actual security growing out of the same transaction as the than thirteen per centum of the aggregate amount of its acceptance; and no bank shall accept such bills to an demand deposits and three per centum of its time deposits. amount equal at any time in the aggregate to more than No member bank shall keep on deposit with any nonone-half of its paid up and unimpaired capital stock and j member bank a sum in excess of ten per centum of its own surplus: Provided, however, That the Federal Reserve • paid up capital and surplus. No member bank shall act Board, under such general regulations as it may prescribe, as the medium or agent of a nonmember bank in applying which shall apply to all banks alike regardless of the for or receiving discounts from a Federal reserve bank amount of capital. stock and surplus, may authorize any under the provisions of this act, except by permission of member bank to accept such bills to an amount not ex- the Federal Reserve Board. ceeding at any time in the aggregate one hundred per "The required balance carried by a member bank with centum of its paid-up and unimpaired capital stock and a Federal reserve bank may, under the regulations and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 443 subject to such penalties as may be prescribed by the within the Federal reserve district in which it is located or Federal Reserve Board, be checked against and withdrawn within the district of any Federal reserve bank which may by such member bank for the purpose of meeting existing have been suspended. Such branches, subject to such liabilities: Provided, however, That no bank shall at any rules and regulations as the Federal Reserve Board may time make new loans or shall pay any dividends unless prescribe, shall be operated under the supervision of a and until the total balance required by law is fully re- board of directors to consist of not more than seven nor less stored. than three directors, of whom a majority of one shall be ap- "In estimating the balances required by this act, the net pointed by the Federal reserve bank of the district, and difference of amounts due to and from other banks shall the remaining directors by the Federal Reserve Board. be taken as the basis for ascertaining the deposits against Directors of branch banks shall hold office during the which required balances with Federal reserve banks shall pleasure of the Federal Reserve Board." be determined. SEC. 8. That section fourteen, subsection (c), of the "National banks, or banks organized under local laws, act be amended and reenacted so as to read as follows: located in Alaska or in a dependency or insular possession (e) "To establish accounts with other Federal reserve or any part of the United States outside the continental banksfor exchange purposes and, with the consent or upon United States may remain nonmember banks, and shall in the order and direction of the Federal Reserve Board and that event maintain reserves and comply with all the con- under regulations to be prescribed by said board, to open ditions now provided by law regulating them; or said and maintain accounts in foreign conutries, appoint corbanks may, with the consent of the Reserve Board, be- respondents, and establish agencies in such countries come member banks of any one of the reserve districts, wheresoever it may be deemed best for the purpose of and shall in that event take stock, maintain reserves, and purchasing, selling, and collecting bills of exchange, and be subject to all the other provisions of this Act." to buy, and sell, with or without its indorsement, through SEC. 6. That that part of section twenty-two which such correspondents or agencies, bills of exchange (or acreads as follows: " Other than the usual salary or director's ceptancies) arising out of actual commercial transactions fees paid to any officer, director, or employee of a member which have not more than ninety days to run, exclusive bank and other than a reasonable fee paid by said bank to of days of grace, and which bear the signature of two or such officer, director, or employee for services rendered to more responsible parties, and, with the consent of the such bank no officer, director, employee, or attorney of a Federal Reserve Board, to open and maintain banking member bank shall be a beneficiary of or receive, directly accounts for such foreign correspondents or agencies. or indirectly, any fee, commission, gift, or business of the Whenever any such account has been opened or agency or bank," be, and hereby is, amended and reenacted so as to correspondent has been appointed by a Federal reserve read as follows: bank, with the consent of or under the order and direction "Other than the usual salary or fee paid to any officer, of the Federal Reserve Board, any other Federal reserve director, employee, or attorney of a member bank, and bank may, with the consent and approval of the Federal other than a reasonable fee paid by said bank to such Reserve Board, be permitted to carry on or conduct, officer, director, employee, or attorney for services ren- through the Federal reserve bank opening such account dered to such bank, no officer, director, employee, or or appointing such agency or correspondent, any transacattorney of a member bank shall be a beneficiary of or tion authorized by this section under rules and regulations receive, directly or indirectly, any fee, commission, gift, to be prescribed by the board." or other consideration for or in connection with any SEC. 9. That section nine of the Federal reserve act be transaction or business of the bank: Provided, however,amended to read as follows: That nothing in this act contained shall be construed to "SEC. 9. Any bank incorporated by special law of any prohibit a director, officer, or employee from receiving State, or organized under the general laws of any State or the same rate of interest paid to other depositors for similar of the United States, desiring to become a member of the deposits made with such bank: And'providedfurther, That Federal Reserve System, may make application to the notes, drafts, bills of exchange, or other evidences of debt Federal Reserve Board for the right to subscribe to the executed or indorsed by directors of a member bank may stock of the Federal reserve bank organized within the be discounted with such member bank on the same terms district in which the applying bank is located. Such apand conditions as other notes, drafts, bills of exchange, or plication shall be for the same amount of stock that the evidences of debt upon the affirmative vote or written applying bank would be required to subscribe to as a assent of a majority of the board of directors of such member national bank. The Federal Reserve Board, in accordbank." ance with such rules and regulations, and subject to such SEC. 7. That section three of the act be amended and conditions as it may prescribe, may permit the applying reenacted so as to read as follows: bank to become a stockholder of such Federal reserve bank. "SEC. 3. The Federal Reserve Board may permit or re- "In acting upon such applications the Federal Reserve quire any Federal reserve bank to establish branch banks Board shall consider the financial condition of the apply- 100256-17 —4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

444 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. ing bank, the general character of its management, and "Any State bank or trust company desiring to withdraw whether or not the corporate powers exercised are con- from membership in a Federal reserve bank may do so, sistent with the purposes of this act. after six months' written notice shall have been filed with "Whenever the Federal Reserve Board shall permit the the Federal Reserve Board, upon the surrender and canapplying bank to become a stockholder in the Federal cellation of all of its holdings of capital stock in the Fedreserve bank of the district its stock subscription shall be eral reserve bank: Provided, however, That no Federal payable on call of the Federal Reserve Board, and stock reserve bank shall, except under express authority of the issued to it shall be held subject to the provisions of this Federal Reserve Board, cancel within the same calendar act. year more than ten per centum of its capital stock for the "All banks admitted to membership under authority purpose of effecting voluntary withdrawals during that of this section shall be required to comply with the reserve year. All such applications shall be dealt with in the and capital requirements of this act and to conform to order in which they are filed with the board. Whenever those provisions of law imposed on national banks which a member bank shall surrender its stock holdings in a prohibit such banks from lending on or purchasing their Federal reserve bank, or shall be ordered to do so by the own stock, which relate to the withdrawal or impairment Federal Reserve Board, under authority of law, all of its of their capital stock, and which relate to the payment of rights and privileges as a member bank shall thereupon unearned dividends. Such banks and the officers, agents, cease and determine, and after due provision has been and employees thereof shall also be subject to the provi- made for any indebtedness due or to become due to the sions of and to the penalties prescribed by section fifty- Federal reserve bank it shall be entitled to a refund of its two hundred and nine of the Revised Statutes, and shall cash paid subscription with interest at the rate of onebe required to make reports of condition and of the pay- half of one per centum per month from date of last diviment of dividends to the Federal reserve bank of which dend, if earned, the amount refunded in no event to exthey become a member. Not less than three of such ceed the book value of the stock at that time, and shall reports shall be made annually on call of the Federal likewise be entitled to repayment of deposits and of any reserve bank on dates to be fixed by the Federal Reserve other balance due from the Federal reserve bank. Board. Failure to make such reports within ten days "No applying bank shall be admitted to membership after the date they are called for shall subject the ofiend- in a Federal reserve bank unless it possesses a paid up ing bank to a penalty of $100 a day for each day that it unimpaired capital sufficient to entitle it to become a fails to transmit such report; such penalty to be collected national banking association in the place where it is situby the Federal reserve bank by suit or otherwise. ated under the provisions of the national bank Act. "As a condition of membership such banks shall like- "Banks becoming members of the Federal reserve syswise be subject to examinations made by direction of the tem under authority of this section shall be subject to the Federal Reserve Board or of the Federal reserve bank by provisions of this section and to those of this act which examiners selected or approved by the Federal Reserve relate specifically to member banks, but shall not be sub- Board. ject to examination under the provisions of the first two "Whenever the directors of the Federal reserve bank paragraphs of section fifty-two hundred and forty of the shall approve the examinations made by the State au- Revised Statutes as amended by section twenty-one of thorities, such examinations and the reports thereof may this act. Subject to the provisions of this act and to the be accepted in lieu of examinations made by examiners regulations of the board made pursuant thereto, any bank selected or approved by the Federal Reserve Board: Pro- becoming a member of the Federal Reserve System shall vided, however, That when it deems it necessary the boardretain its full charter and statutory rights as a State bank or may order special examinations by examiners of its own trust company, and may continue to exercise all corporate selection and shall in all cases approve the form of the powers granted it by the State in which it was created, and report. The expenses of all examinations, other than those shall be entitled to all privileges of member bants: Promade by State authorities, shall be assessed against and vided, however, That no Federal reserve bank shall be perpaid by the banks examined in the same manner and at mitted to discount for any State bank or trust company the same rate that national banks are assessed for such notes, drafts, or bills of exchange of any one borrower who expenses. is liable for borrowed money to such State bank or trust "If at any time it shall appear to the Federal Reserve company in an amount greater than ten per centum of the Board that a member bank has failed to comply with the capital and surplus of such State bank or trust company, provisions of this section or the regulations of the Federal but the discount of bills of exchange drawn against actually Reserve Board made pursuant thereto, it shall be within existing value shall not be considered as borrowed money the power of the board after hearing to require such bank within the meaning of this section. The Federal reserve to surrender its stock in the Federal reserve bank and to bank, as a condition of the discount of notes, drafts, and forfeit all rights and privileges of membership. The Fed- bills of exchange for such State bank or trust company eral Reserve Board may restore membership upon due shall require a certificate or guarantee to the effect that tho proof of compliance with the conditions imposed fey tki* borrower is not liable to such bank in excess of the amount section. provided by this section, and will a@t bo powittod to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUXB 1, 1917. FEDERAL RESERVE BULLETIN. 445 become liable in excess of this amount while such notes, it may prescribe, may permit the applying bank to become drafts, or bills of exchange are under discount with the a stockholder of such Federal reserve bank. Federal reserve bank. " In acting upon such applications the Federal Reserve "It shall be unlawful for any officer, clerk, or agent of Board shall consider the financial condition of the applyany bank admitted to membership under authority of this ing bank, the general character of its management, and section to certify any check drawn upon such bank unless whether or not the corporate powers exercised are conthe person or company drawing the check has on deposit sistent with the purposes of this act. therewith at the time such check is certified an amount of "Whenever the Federal Reserve Board shall permit the money equal to the amount specified in such check. Any applying bank to become a stockholder in the Federal check so certified by duly authorized officers shall be a reserve bank of the district its stock subscription shall be good and valid obligation against such bank, but the act payable on call of the Federal Reserve Board, and stock of any such officer, clerk, or agent in violation of this sec- issued to it shall be held subject to the provisions of this tion may subject such bank to a forfeiture of its member- act. ship in the Federal Reserve System upon hearing by the "All banks admitted to membership under authority of Federal Reserve Board." this section shall be required to comply with the reserve and capital requirements of this act and to conform to SENATE BILL. those provisions of law imposed on national banks which That section four of the act approved December twenty- prohibit such banks from lending on or purchasing their third, nineteen hundred and thirteen, known as the Fed- own stock, which relate to the withdrawal or impairment eral reserve act, be amended by striking out the sentence of their capital stock, and which relate to the payment of reading as follows: "One of the directors of class C, who unearned dividends. Such banks and the officers, agents, shall be a person of tested banking experience, shall be and employees thereof shall also be subject to the proviappointed by the Federal Reserve Board as deputy chair- sions of and to the penalties prescribed by section fifty-two man and deputy Federal reserve agent, to exercise the hundred and nine of the Revised Statutes, and shall be powers of the chairman of the board and Federal reserve required to make reports of condition and of the payment agent in case of absence or disability of his principal," and of dividends to the Federal reserve bank of which they by adding in place thereof the following: become a member. Not less than three of such reports "Subject to the approval of the Federal Reserve Board, shall be made annually on call of the Federal reserve bank the Federal reserve agent shall appoint one or more assist- on dates to be fixed by the Federal Reserve Board. Failants. Such assistants, who shall be persons of tested bank- ure to make such reports within ten days after the date ing experience, shall assist the Federal reserve agent in they are called for shall subject the offending bank to a the performance of his duties and shall also have power to penalty of $100 a day for each day that it fails to transmit act in his name and stead during his absence or disability. such report; such penalty to be collected by the Federal The Federal reserve agent may require such bonds of his reserve bank by suit or otherwise. assistants as he may deem necessary for his own protec- ' 'As a condition of membership such banks shall likewise tion. Assistants to the Federal reserve agent shall, receive be subject to examinations made by direction of the Fedan annual compensation to be fixed and paid in the same eral Reserve Board or of the Federal reserve bank by exammanner as that of the Federal reserve agent. One of the iners selected or approved by the Federal Reserve Board. directors of class 0 shall be appointed by the Federal Re- "Whenever the directors of the Federal reserve bank serve Board as vice chairman to exercise the powers of shall approve the examinations made by the State authorithe chairman of the board in case of the absence or disa- ties, such examinations and the reports thereof may be bility of the Federal reserve agent; in case of the absence accepted in lieu of examinations made by examiners of the chairman and vice chairman, the third class G selected or approved by the Federal Reserve Board: Prodirector shall preside at meetings of the board." vided, however, That when it deems it necessary the board SEC. 2. That section nine of the Federal reserve act be may order special examinations by examiners of its own amended to read as follows: selection and shall in all cases approve the form of the re- "SEC. 9. Any bank incorporated by special law of any port. The expenses of all examinations, other than those State, or organized under the general laws of any State or made by State authorities, shall be assessed against and of the United States, desiring to become a member of the paid by the banks examined. Federal Reserve System, may make application to the "If at any time it shall appear to the Federal Reserve Federal Reserve Board under such rules and regulations Board that a member bank has failed to comply with the as it may prescribe for the right to subscribe to the stock provisions of this section or the regulations of the Federal of the Federal reserve bank organized within the district Reserve Board made pursuant thereto, it shall be within in which the applying bank is located. Such application the power of the board after hearing to require such bank shall be for the same amount of stock that the applying to surrender its stock in the Federal reserve bank and to bank would be required to subscribe to as a national bank. forfeit all rights and privileges of membership. The Fed- The Federal Reserve Board, subject to such conditions as eral Reserve Board may restore membership upon due Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

446 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. proof of compliance with the conditions imposed by this Federal reserve bank, as a condition of the discount of section. notes, drafts, and bills of exchange for such State bank or "Any State bank or trust company desiring to with- trust company, shall require a certificate or guarantee to draw from membership in a Federal reserve bank may the effect that the borrower is not liable to such bank in do so, after six months' written notice shall have been filed ixcess of the amount provided by this section, and will not with the Federal Reserve Board, upon the surrender and be permitted to become liable in excess of this amount cancellation of all of its holdings of capital stock in the while such notes, drafts, or bills of exchange are under Federal reserve bank: Provided, however, That no Federaldiscount with the Federal reserve bank. reserve bank shall, except under express authority of the "It shall be unlawful for any officer, clerk, or agent of Federal Reserve Board, cancel within the same calendar any bank admitted to membership under authority of this year more than twenty-live per centum of its capital stock section to certify any check drawn upon such bank unless for the purpose of effecting voluntary withdrawals during the person or company drawing the check has on deposit that year. All such applications shall be dealt with in therewith at the time such check is certified an amount of the order in which they are filed with the board. When- money equal to the amount specified in such check. Any ever a member bank shall surrender its stock holdings in a check so certified by duly authorized officers shall be a Federal reserve bank, or shall be ordered to do so by the good and valid obligation against such bank, but the act Federal Reserve Board, under authority of law, all of its of any such officer, clerk, or agent in violation of this secrights and privileges as a member bank shall thereupon tion may subject such bank to a forfeiture of its membercease and determine, and after due provision has been ship in the Federal Reserve System upon hearing by the made for any indebtedness due or to become due to the Federal Reserve Board." Federal reserve bank it shall be entitled to a refund of its SEC. 3. That the first paragraph of section thirteen be cash paid subscription with interest at the rate of one-half amended so as to read as follows: of one per centum per month from date of last dividend, "Any Federal reserve bank may receive from any of its if earned, the amount refunded in no event to exceed the member banks, and from the United States, deposits of book value of the stock at that time, and shall likewise current funds in lawful money, national-bank notes, Fedbe entitled to repayment of deposits and of any other eral reserve notes, or checks and drafts payable upon balance due from the Federal reserve bank. presentation, and also, for collection, maturing notes and " No applying bank shall be admitted to membership in bills; or, solely for purposes of exchange or of collection, a Federal reserve bank unless it possesses a paid-up unim- may receive from other Federal reserve banks deposits of paired capital sufficient to entitle it to become a national current funds in lawful money, national-bank notes, or banking association in the place where it is situated under checks upon other Federal reserve banks, and checks and the provisions of the national bank act. drafts payable upon presentation within its district, and "Banks becoming members of the Federal reserve maturing notes and bills payable within its district; or, system under authority of this section shall be subject to solely for the purposes of exchange or of collection, may the provisions of this section and to those of this act which receive from any nonmember bank or trust company derelate specifically to member banks, but shall not be posits of current funds in lawful money, national-bank subject to examination under the provisions of the first notes, Federal reserve notes, checks and drafts payable two paragraphs of section fifty-two hundred and forty of upon presentation, or maturing notes and bills: Provided, the Revised Statutes as amended by section twenty-one Such nonmember bank or trust company maintains with of this act. Subj ect to the provisions of this act and to the the Federal reserve bank of its district a balance sufficient regulations of the board made pursuant thereto, any bank to offset the items in transit held for its account by the becoming a member of the Federal Reserve System shall Federal reserve bank: Provided further, That nothing in retain its full charter and statutory rights as a State bank this or any other section of this act shall be construed as or trust company, and may continue to exercise all cor- prohibiting a member or nonmember bank from making porate powers granted it by the State in which it was reasonable charges, in no case to exceed 10 cents per $100 created, and shall be entitled to all privileges of member or fraction thereof, based on the total of checks and drafts banks: Provided, hmvever, That no Federal reserve bank presented at any one time, for collection or payment of shall be permitted to discount for any State bank or trust checks and drafts and remission therefor by exchange or company notes, drafts, or bills of exchange of any one otherwise." borrower who is liable for borrowed money to such State SEC. 4. That the fifth paragraph of section thirteen be, bank or trust company in an amount greater than ten per and is hereby, amended so as to read as follows: centum of the capital and surplus of such State bank or "Any member bank may accept drafts or bills of extrust company, but the discount of bills of exchange change drawn upon it having not more than six months' drawn against actually existing value and the discount of sight to run, exclusive of days of grace, which grow out of commercial or business paper actually owned by the transactions involving the importation or exportation of person negotiating the same shall not be considered as goods; or which grow out of transactions involving the borrowed money within the meaning of this section. The domestic shipment of goods provided shipping documents Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 447 conveying or securing title are attached at the time of reserve agent holds gold or gold certificates as collateral for acceptance; or which are secured at the time of acceptance Federal reserve notes issued to the bank such gold or gold by a warehouse receipt or other such document conveying certificates shall be counted as part of the gold reserve or securing title covering readily marketable staples. No which such bank is required to maintain against its Fedmember bank shall accept, whether in a foreign or do- eral reserve notes in actual circulation. Notes so paid mestic transaction, for any one person, company, firm, or out shall bear upon their faces a distinctive letter and corporation to an amount equal at any time in the aggre- serial number, which shall be assigned by the Federal gate to more than ten per centum of its paid-up and unim- Reserve Board to each Federal reserve bank. Whenever paired capital stock and surplus, unless the bank is secured Federal reserve notes issued through one Federal reserve either by attached documents or by some other actual bank shall be received by another Federal reserve bank, security growing out of the same transaction as the accept- they shall be promptly returned for credit or redemption ance; and no bank shall accept such bills to an amount to the Federal reserve bank through which they were equal at any time in the aggregate to more than one-half originally issued or, upon direction of such Federal reserve of its paid-up and unimpaired capital stock and surplus: bank, they shall be forwarded direct to the Treasurer of Provided, however, That the Federal Reserve Board, un- the United States to be retired. No Federal reserve bank der such general regulations as it may prescribe, which shall pay out notes issued through another under penalty shall apply to all banks alike regardless of the amount of of a tax of ten per centum upon the face value of notes so capital stock and surplus, may authorize any member paid out. Notes presented for redemption at the Treasury of bank to accept such bills to an amount not exceeding at the United States shall be paid out of the redemption fund any time in the aggregate one hundred per centum of its and returned to the Federal reserve banks through which paid-up and unimpaired capital stock and surplus: Pro- they were originally issued, and thereupon such Federal vided further, That in no event shall a bank accept for any reserve bank shall, upon demand of the Secretary of the one person, company, firm, or corporation to an amount Treasury, reimburse such redemption fund in lawful equal at any time in the aggregate to more than twenty money or, if such Federal reserve notes have been reper centum of its paid-up and unimpaired capital stock deemed by the Treasurer in gold or gold certificates, then and surplus." such funds shall be reimbursed to the extent deemed necessary by the Secretary of the Treasury in gold or gold SEC. 5. That section sixteen, paragraphs two, three, certificates, and such Federal reserve bank shall, so long four, five, six, and seven, be further amended and reas any of its Federal reserve notes remain outstanding, enacted so as to read as follows: maintain with the Treasurer in gold an amount sufficient "Any Federal reserve bank may make application to in the judgment of the Secretary to provide for all redempthe local Federal reserve agent for such amount of the tions to be made by the Treasurer. Federal reserve notes Federal reserve notes hereinbefore provided for as it may received by the Treasurer otherwise than for redemption require. Such application shall be accompanied with a may be exchanged for gold out of the redemption fund tender to the local Federal reserve agent of collateral in hereinafter provided and returned to the reserve bank amount equal to the sum of the Federal reserve notes thus through which they were originally issued, or they may applied for and issued pursuant to such application. The be returned to such bank for the credit of the United collateral security thus offered shall be notes, drafts, bills States. Federal reserve notes unfit for circulation shall of exchange, or acceptances acquired under the provisions be returned by the Federal reserve agents to the Compof section thirteen of this act, or bills of exchange indorsed troller of the Currency for cancellation and destruction. by a member bank of any Federal reserve district and purchased under the provisions of section fourteen of this "The Federal Reserve Board shall require each Federal act, or bankers' acceptances purchased under the pro- reserve bank to maintain on deposit in the Treasury of the visions of said section fourteen, or gold or gold certificates; United States a sum in gold sufficient in the judgment of the but in no event shall such collateral security, whether Secretary of the Treasury for the redemption of the Federal gold, gold certificates, or eligible paper, be less than the reserve notes issued to such bank, but in no event less than amount of Federal reserve notes applied for. The Federal five per centum of the total amount of notes issued less the reserve agent shall each day notify the Federal Reserve amount of gold or gold certificates held by the Federal Board of all issues and withdrawals of Federal reserve reserve agent as collateral security; but such deposit of notes to and by the Federal reserve bank to which he is gold shall be counted and included as part of the forty per accredited. The said Federal Reserve Board may at any centum reserve hereinbefore required. The board shall time call upon a Federal reserve bank for additional have the right, acting through the Federal reserve agent, security to protect the Federal reserve notes issued to it. to grant, in whole or in part, or to reject entirely the appli- "Every Federal reserve bank shall maintain reserves in cation of any Federal reserve bank for Federal reserve gold or lawful money of not less than thirty-five per centum notes; but to the extent that such application may be against its deposits and reserves in gold of not less than granted the Federal Reserve Board shall, through its local forty per centum against its Federal reserve notes in actual Federal reserve agent, supply Federal reserve notes to the circulation: Provided, however, That when the Federal banks so applying, and such bank shall be charged with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

448 FEDERAL RESERVE BULLETIN. JUNB 1,1917. the amount of notes issued to it and shall pay such rate of safe-keeping of such Federal reserve notes, gold, gold cerinterest as may be established by the Federal Reserve tificates, and lawful money. Nothing herein contained, Board on only that amount of such notes which equals the however, shall be construed to prohibit a Federal reserve total amount of its outstanding Federal reserve notes less agent from depositing gold or gold certificates with the the amount of gold or gold certificates held by the Federal Federal Reserve Board, to be held by such board subject reserve agent as collateral security. Federal reserve notes to his order, or with the Treasurer of the United States for issued to any such bank shall, upon delivery, together the purposes authorized by law. with such notes of such Federal reserve bank as may be SEC. 6. That section sixteen be further amended by issued under section eighteen of this act upon security of adding at the end of the section the following: United States two per centum Government bonds, become "That the Secretary of the Treasury is hereby authora first and paramount lien on all the assets of such ized and directed to receive deposits of gold coin or of gold bank. certificates with the Treasurer or any assistant treasurer of "Any Federal reserve bank may at any time reduce its the United States when tendered by any Federal reserve liability for outstanding Federal reserve notes by depos- bank or Federal reserve agent for credit to its or his account iting with the Federal reserve agent its Federal reserve with the Federal Reserve Board. The Secretary shall prenotes, gold, gold certificates, or lawful money of the scribe by regulation the form or receipt to be issued by the United States. Federal reserve notes so deposited shall Treasurer or Assistant Treasurer to the Federal reserve not be reissued, except upon compliance with the condi- bank or Federal reserve agent making the deposit, and a tions of an original issue. duplicate of such receipt shall be delivered to the Federal "The Federal reserve agent shall hold such gold, gold Reserve Board by the Treasurer at Washington upon certificates or lawful money available exclusively for ex- proper advices from any assistant treasurer that such dechange for the outstanding Federal reserve notes when posit has been made. Deposits so made shall be held offered by the reserve bank of which he is a director. subject to the orders of the Federal Reserve Board and Upon the request of the Secretary of the Treasury the shall be payable in gold coin or gold certificates on the Federal Reserve Board shall require the Federal reserve order of the Federal Reserve Board to any Federal reserve agent to transmit to the Treasurer of the United States so bank or Federal reserve agent at the Treasury or at the much of the gold held by him as collateral security for Subtreasury of the United States nearest the place of busi- Federal reserve notes as may be required for the exclusive ness of such Federal reserve bank or such Federal reserve purpose of the redemption of such Federal reserve notes, agent: Provided, however, That any expense incurred in but such gold when deposited with the Treasurer shall be shipping gold to or from the Treasury or Subtreasuries in counted and considered as if collateral security on deposit order to make such payments, or as a result of making such with the Federal reserve agent. payments, shall be paid by the Federal Reserve Board and "Any Federal reserve bank may at its discretion with- assessed against the Federal reserve banks. The order draw collateral deposited with the local Federal reserve used by the Federal Reserve Board in making such payagent for the protection of its Federal reserve notes issued ments shall be signed by the governor or vice governor, to it and shall at the same time substitute therefor other or such other officers or members as the board may by regucollateral of equal amount with the approval of the Federal lation prescribe. The form of such order shall be approved reserve agent under regulations to be prescribed by the by the Secretary of the Treasury. Federal Reserve Board. Any Federal reserve bank may "The expenses necessarily incurred in carrying out these retire any of its Federal reserve notes by depositing them provisions, including the cost of the certificates or receipts with the Federal reserve agent or with the Treasurer of issued for deposits received, and all expenses incident to the United States, and such Federal reserve bank shall the handling of such deposits shall be paid by the Federal thereupon be entitled to receive back the collateral de- Reserve Board and included in its assessments against the posited with the Federal reserve agent for the security of several Federal reserve banks. such notes. Federal reserve banks shall not be required "Gold deposits standing to the credit of any Federal to maintain the reserve or the redemption fund heretofore reserve bank with the Federal Reserve Board shall, at the provided for against Federal reserve notes which have option of said bank, be counted as part of the lawful reserve been retired. Federal reserve notes so deposited shall not which it is required to maintain against outstanding be reissued except upon compliance with the conditions Federal reserve notes, or as a part of the reserve it is reof an original issue." quired to maintain against deposits. All Federal reserve notes and all gold, gold certificates, "Nothing in this section shall be construed as amending and lawful money issued to or deposited with any Federal section six of the act of March fourteenth, nineteen hunreserve agent under the provisions of the Federal reserve dred, as amended by the acts of March fourth, nineteen act shall hereafter be held for such agent, under such rules hundred and seven, March second, nineteen hundred and and regulations as the Federal Reserve Board may pre- eleven, and June twelfth, nineteen hundred and sixteen, scribe, in the joint custody of himself and the Federal nor shall the provisions of this section be construed to reserve bank to which he is accredited. Such agent and apply to the deposits made or to the receipts or certificates such Federal reserve bank shall be jointly liable for the issued under those acts." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNI 1, 1317. FEDERAL EESEEVE BULLETIN. 449 Sue. 7. That section seventeen be, and is hereby, subject to such penalties as may be prescribed by the amended so as to read as follows: Federal Reserve Board, be checked against and with- "SEC. 17. So much of the provisions of section fifty-one drawn by such member bank for the purpose of meeting hundred and fifty-nine of the Revised Statutes of the existing liabilities: Provided, however, That no bank shall United States, and section four of the act of June twentieth, at any time make new loans or shall pay any dividends eighteen hundred and seventy-four, and section eight of unless and until the total reserve requirccl by law ib fully the act of July twelfth, eighteen hundred and eighty-two, restored. and of any other provisions of existing statutes as require '•'In estimating the reserves and the cash in vault rethat before any national banking association shall be au- quired by this act, the net balance of amounts due to and thorized to commence banking business it shall transfer from other banks shall be taken as the basis for ascerand deliver to the Treasurer of the United States a stated taining the bank deposits against which reserves with amount of United States registered bonds, and so much of Federal reserve banks and cash in vault shall be deterthose provisions or of any other provisions of existing stat- mined. utes as require any national banking association now or "National banks or banks organized under local laws hereafter organized to maintain a minimum deposit of located in Alaska or in a dependency or insular possession such bonds with the Treasurer is hereby repealed." or any part of the United States outside the continental SEC. 8. That section nineteen be amended and re- United States may remain nonmember banks,, and shall enacted so as to read as follows: in that event maintain reserves and comply with all the "SEC. 19. Demand deposits within the meaning of this conditions now provided by law regulating them; or said act shall comprise all deposits payable within thirty days, banks except in the Philippine Islands may, with the and time deposits shall comprise all deposits payable after consent of the Federal Reserve Board, become member thirty days, all savings accounts and certificates of de- banks of any one of the reserve districts, and shall, in posit which are subject to not less than thirty days' notice that event, take stock, maintain reserves, and be subject before payment, and all postal savings deposits. to all the other provisions of this act." "Every bank, banking association, or trust company SEC. 9. That that part of section twenty-two which which is or which becomes a member of any Federal re- reads as follows: " Other than the usual salary or director's •erve bank shall establish and maintain with its Federal fees paid to any officer, director, or employee of a member reserve bank reserves as follows: bank and other than a reasonable fee paid by said bank to "(a) If not in a reserve or central reserve city, as now such officer, director, or employee for service rendered to or hereafter denned, it shall hold and maintain with the such bank, no officer, director, employee, or attorney of a Federal reserve bank of its district actual net reserves member bank shall be a beneficiary of or receive, directly equal to not less than six per centum of the aggregate or indirectly, any fee, commission, gift, or other consideraamount of its demand deposits and three per centum of tion for or in connection with any transaction or business its time deposits. of the bank," be, and hereby is, amended and reenacted "(&) If in a reserve city, ns now or hereafter defined, it so as to read as follows: shall hold and maintain with the Federal reserve bank of " Other than the usual salary or director's fee paid to its district actual net reserves equal to not less than ten any officer, director, employee, or attorney of a member per centum of the aggregate amount of its demand deposits bank, and other than a reasonable fee paid by said bank to and three per centum of its time deposits. such officer, director, employee, or attorney for services . "(c) If in a central reserve city, as now or hereafter rendered to such bank, no officer, director, employee, or denned, it shall hold and maintain with the Federal reserve attorney of a member bank shall be a beneficiary of or bank of its district an actual net reserve equal to not less receive, directly or indirectly, any fee, commission, gift, or than thirteen per centum of the aggregate amounlof its de- other consideration for or in connection with any transmand deposits and three per centum of its time deposits. action or business of the bank: Provided, however, That "Every member bank shall maintain in its own vaults nothing in this act contained shall be construed to proan amount of specie or currency equal to at least four per hibit a director, officer, employee, or attorney from receivcentum of its demand deposits less the amount of those ing the same rate of interest paid to other depositors for reserves with the Federal, reserve bank which are in excess similar deposits made with such bank: And provided ©f the minimum reserves required by this section. further, That notes, drafts, bills of exchange, or other "No member bank shall keep on deposit with any non- evidences of debt executed or indorsed by directors or member bank a sum in excess of ten per centum of its attorneys of a member bank may be discounted with such •irn paid-up capital and surplus. No member bank shall member bank on the same terms and conditions as other act as the medium or agent of a nonmember bank in apply- notes, drafts, bills of exchange, or evidences of debt upon ing for or receiving discounts from a Federal reserve bank the affirmative vote or written assent of at least threeunder the provisions of this Act except by permission of fourths of the members of the board of directors of such the Federal Reserve Board. member bank." "The required balance carried by a member bank with Passed the House of Representatives May 5, 1917. a Federal reserve bank may, under the regulations and Passed the Senate with an amendment May 9, 1917, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

450 FEDERAL RESERVE BULLETIN". JUNE 1,1917. New National Bank Charters. [A bill to amend the act approved Dec. 23, 1913, known as the Federal Reserve Act.] The Comptroller of the Currency reports the Be it enacted ly the Senate and, House of following increases and reductions in the num- Representatives of the United States of America in Congress assembled. That the Act approved ber of national banks and the capital of December 23, 1913, known as the Federal Renational banks during the period from April serve Act, be amended by adding a new sec- 21, 1917, to May 25,1917, inclusive: tion as follows: Banks. BANKING CORPORATIONS AUTHORIZED TO DO New charters issued to 24 FOREIGN BANKING BUSINESS. With capital of $1,095,000 Increase of capital approved for 17 SECTION 25 (a). That banking corporations With new capital of 2,565,000 for carrying on the business of international banking and banking in foreign countries and Aggregate number of new charters and (or) in the dependencies and (or) insular posbanks increasing capital 41 sessions of the United States, and in aid of With aggregate of new capital authorized 3,660,000 commerce between the United States, its dependencies, insular possessions, and foreign Number of banks liquidating (other than countries, and to act when required as fiscal those consolidating with other national agents of the United States, may be formed by banks) 10 any number, not less than three, of persons, Capital of same banks 680,000 firms, companies, or corporations; for which Number of banks reducing capital 0 purpose they shall enter into articles of asso- Reduction of capital 0 ciation, in such form and containing such rules and regulations with respect to and governing Total number of banks going into liquida- the conduct of the business of the proposed tion or reducing capital (other than those corporation as may be prescribed by the Fedconsolidating with other national banks). 10 eral Reserve Board. Such articles of associa- Aggregate capital reduction 680,000 tion shall, in general terms, specify the objects for which the banking corporation is formed, The foregoing statement shows the aggregate of and may contain any other provisions for the increased capital for the period of the banks regulation and conduct of the business and embraced in statement was 3,660,000 affairs of the corporation not inconsistent with Against this there was a reduction of capital the provisions of this act or with any other law owing to liquidations (other than for con- of the United States which may be deemed solidation with other national banks) and proper. Such articles of association shall be reductions of capital of 680,000 signed by all of the persons, firms, companies, or corporations intending to participate in the Net increase 2,980,000 organization of the said banking corporation and, thereafter, shall be forwarded to the Federal Reserve Board and shall be filed and pre- Foreign Trade Banks. served in its office. The persons, firms, companies, or corpora- In view of the demand for legislation author- tions signing the said articles of association izing the granting of Federal charters to banks shall also make an organization certificate organized for the purpose of engaging in for- which shall specify— First. The name assumed by such corporaeign trade and intending to exercise the function, which shall be subject to the approval of tions already provided in the existing legislathe Federal Reserve Board. tion, the Federal Reserve Board has renewed Second. The foreign country, countries, and an earlier recommendation to Congress for the (or) the dependency, dependencies, colony, or adoption of an act authorizing the granting colonies thereof, and (or) the dependency or dependencies, insular possession or insular of such charters. The bill as transmitted to possessions of the United States where its the Banking and Currency Committees of the operations are to be carried on. two Houses with the approval of the Board is Third. The place in the United States where as follows: its home office is to be located. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 451 Fourth. The amount of its capital stock and POWERS GRANTED. the number of shares into which the same shall be divided. Each corporation so organized shall also Fifth. The name and place of business of have power: each person, firm, company, or corporation (a) To purchase, sell, discount, and negotiate executing such certificate, and the number of notes, drafts, checks, bills of exchange, acceptshares which each has subscribed or agreed to ances, including bankers' acceptances, and take. other evidences of indebtedness; to purchase Sixth. A declaration that said certificate is and sell securities, including the obligations of made to enable the persons, linns, companies, the United States or of any State thereof; to and corporations subscribing the same, and accept bills or drafts drawn upon it; to issue all other persons, firms, companies, and cor- letters of credit, to purchase and sell exchange, porations, who or which may thereafter sub- coin, and bullion; to borrow money, to lend scribe to or purchase shares of the capital stock money on real or personal security or without of such corporation, to avail themselves of the security; to receive deposits; and generally to advantages of this section. exercise such powers and to do such things as are incidental to the banking business or as CREATION OF CORPORATION. may be usual in connection therewith, as the The persons, firms, companies, and corpora- same may be conducted in the country or tions, respectively, signing the said organiza- countries, colonies, dependencies, or possestion certificate shall duly acknowledge the exe- sions in which it shall transact business. cution thereof before a judge of some court of (5) To establish and maintain branches or record or notary public, who shall certify there- agencies in foreign countries, their dependento under the seal of such court or notary, and cies or colonies, and in the dependencies or thereafter the certificate shall be forwarded to insular possessions of the United States, at the Federal Reserve Board to be filed and pre- such places as may be approved by the Federal served in its office. From the date of the filing Reserve Board and under such rules and regulaof the organization certificate the corporation tions as it may prescribe; and the number of therein mentioned shall become and be a body places where branches or agencies may be corporate, and as such, and in the name desig- established and maintained may, from time to nated therein, shall have power to adopt and time, with the consent of the Federal Reserve use a corporate seal, which may be changed at Board, and under such rules and regulations the pleasure of its board of directors; to have as it may prescribe, be increased or decreased. succession for a period of twenty years, unless (c) To purchase and hold stock or other cersooner dissolved by an act of Congress or unless tificates of interest or ownership in any other its franchises become forfeited by some viola- banking corporation or association, organized tion of lav/; to .make contracts; to sue and be under the provisions of this section, or under sued, complain and defend in any court of law the laws of any foreign country or a colony or or equity; to elect or appoint directors, a ma- dependency thereof, or under the laws of any jority of whom shall be citizens of the United State, dependency, or insular possession of the States; and, through its board of directors, to United States, which banking corporation, appoint such officers and employees as may be or association, shall not be transacting busideemed proper, define their authority and du- ness in the United States, except to such extent ties, require security for the faithful perform- as may be incidental to its international or ance of their duties from such thereof and in foreign business: Provided, lioioever, That withsuch amounts as may be deemed proper, dis- out the consent of the Federal Reserve Board miss them, or any thereof, at pleasure, and ap- no corporation organized hereunder shall inpoint others to fill their places; to prescribe, by vest in any ono banking corporation an amount its board of directors, by-laws not inconsistent in excess of twenty per centum of its own capiwith law or with the regulations of the Federal tal and surplus: And 'provided further. That, Reserve Board, specifying the manner in which without the consent of the Federal Reserve its stock shall be transferred, its directors Board, no corporation organized hereunder chosen, its officers and employees selected, its shall purchase stock in an^y other corporation property transferred, its general business con- organized under the provisions of this section ducted, and its privileges exercised and on- or under the laws of any State of the United joyed. States or of any dependency or possession 100256—17 5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

452 FEDERAL RESERVE BULLETIN. JUNE 1,1917. thereof. So much of section 7 of the act- No national bank or other member of a approved October 15, 1914, entitled "An. act to Federal Reserve Bank shall subscribe for or supplement existing laws against unlawful re- hold stock in banking corporations organized straints and monopolies, and for other pur- under the provisions of this section aggregating poses, " as maybe in conflict with the provisions more than ten per centum of the paid-in capital of this paragraph, is hereby amended in such and surplus of the subscribing bank. manner that the provisions thereof shall not Shareholders in such corporations shall not apply to a corporation organized hereunder. be liable for the contracts, debts, and engage- \d) To exercise, through its board of direc- ments of such corporations except to the tors or duly constituted officers or agents, all extent of their unpaid stock subscriptions. powers not herein expressly granted, which Any member bank may act as agent for any shall be incidental to such expressly granted corporation organized under the provisions of powers and which shall be necessary for the this section for the purpose of dealing with any purpose of carrying on the business of banking Federal Reserve Bank and the Federal. Reserve authorized by law: Provided, liowever, That no Board shall establish and promulgate rules and corporation organized under this section shall regulations defining and governing transactions carry on any part of its business in the "United which corporations organized hereunder may States except such as, in the judgment of the have with Federal Reserve Banks, either Federal Reserve Board, shall bo incidental to directly or through the agency of a member "bank. " No corporation organized hereunder shall, however, become a member of any and preliminary to its organization no such Federal Reserve Bank. corporation shall transact any business until Every corporation organized hereunder shall it has been dxily authorized by the Federal hold a meeting of its stockholders annually Reserve Board to commence business as a cor- upon a date fixed in its by-laws, at which poration organized under the provisions of directors, or such number thereof as the bythis section. laws may require, shall be elected to serve until No corporation shall be organized under the their successors are elected and qualified, which provisions of this section with a capital stock meetings shall be held at its home office in the of less than $1,000,000, one quarter of which United States. At every meeting of stockmust be paid in before the corporation may be holders, each shareholder shall be entitled to authorized to begin business. The capital cast, in person or by proxy, one vote for each stock of any such corporation may be increased share held. Every such corporation shall at any time, with the approval of the Federal keep at its home office books containing the Reserve Board, b}^ a vote of two-thirds of its names of all stockholders thereof, and the shareholders, or by unanimous consent in names and addresses of the members of its writing of the shareholders without a meeting board of directors, together with copies of all and without a formal vote; and may be re- reports made by it to the Federal Reserve duced in like manner, provided that, in no Board; and each such corporation shall make event, shall it be lass than $1,000,000. reports to the Federal Reserve Board at such times and hi such form as it may require; and OWNERSHIP OF SHARES. shall be subject to examinations whenever deemed necessary by the Federal Reserve A majority of the shares of the capital stock Board which examinations shall be conducted of any such corporation shall be held and by examiners appointed by the Federal Reserve owned by citizens of the United States, by cor- Board, the cost of such examinations, including porations chartered under the laws of the the compensation of the examiners, to be fixed United States or of a State of the United States by the Federal Reserve Board and to be paid or by firms or companies, the controlling inter- by the corporation examined. est in which is owned by citizens of the Should any corporation organized hereunder United States or of a State thereof. The pro- fail to comply with any of the provisions of the visions of section eight of the act approved laws of the United States, all of its rights, privi- October 15, 1914, entitled "An act to supple- leges, and franchises derived herefrom may ment existing laws against unlawful restraints thereby be forfeited. Before any such corand monopolies, and for other purposes," shall poration shall be declared dissolved, or its not be construed to apply to the directors, other rights, privileges, and franchises forfeited, any officers, agents, or employees of corporations noncompliance with, or violation of such laws organized under the provisions of this section. shall, however, be determined and adjudged by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 453 a court of the United States of competent Any such corporation may go into voluntary jurisdiction, in a suit brought for that purpose liquidation and be closed and woundup by a vote in the district or territory in which the home of its shareholders holding two-thirds of its stock. office of such corporation's located, which suit Whenever the Federal Reserve Board shall shall be brought by the United States at the become satisfied of the insolvency of any such instance of the Federal Reserve Board. Upon corporation it may appoint a receiver thereof, adjudication of such noncompiiance- or viola- who shall take possession of all of the property tion, each director and officer who participated and assets of the corporation and exercise the in, or assented to, the illegal act or acts/shall same rights, privileges, powers, and authority be liable in his personal or individual capacity with respect thereto as "are now exercised by for all damages which the said corporation shall receivers of national banks appointed by the have sustained in consequence thereof. No Comptroller of the Currency of the United dissolution shall take away or impair any States; provided, however, that the assets of remedy against the corporation, its stockhold- the corporation subject to the laws of other ers, or officers for any liability or penalty countries or jurisdictions shall be dealt with in previously incurred. accordance with such laws, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

454 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. GOLD SETTLEMENT FUND. Below are given the figures covering the transactions which took place in the fund Since the last published statement of the between the settlements of April 19 and May fund, in the Bulletin of May 1, each weekly 17. Total obligations settled, including the settlement has produced increased totals, exfour weekly settlements and ordinary transfers ceeding in each week the previous high record between banks, amounted to $l,837,019;000, an of $338 894,000 the total of the obligations ? ; increase of 8622,124,500 over the totals of the liquidated in the settlement of April 19. The previous four weeks. Changes in ownership in settlement of May 17 showed totals liquidated the fund amounted to only 2.01 per cent of of $412,103,000, the largest amount for any the obligations settled. New York, San Franone week in the history of the fund. cisco, and Boston show the only increases. Transfers between Federal Reserve Banks through the fund were also large, amounting Amount of clearings and transfers, Federal Reserve Banks, during the four weeks beginning April 20, to from Apr. 20, 1917, to May 17, 1917, inclusive. $282,009,000. These transfers represent, in the L000 omitted.] main, the shifting of credits of the Treasurer of the United States with the various Federal Total clear- Balances Transings. adjusted. fers. Reserve Banks to the Federal Reserve Bank of New York. These new credits were brought Settlement; of— about through the subscriptions by the banks A M p a r v 3 2 , 6 1 ,1 9 9 1 1 7 7 . . ... £ 4 3 0 7 4 0 , , 8 4 0 4 4 0 $ 6 2 4 0 , , 5 7 5 0 4 3 $6 17 5 , , 7 (5 3 0 1 0 to the recently issued United States certificates May 10.1917 307,867 18,878 89,938 Mav 17,' 1917 412,103 53,684 108,740 of indebtedness, and were transferred from the Total 1.555,014 157,879 282,009 other Federal Reserve Banks to that of New Previously reported Tor 1917 4,408,740 250,986 98,00-1.5 York in order that the Treasurer might have Total since Jan. 1,1917 5,963,754 403,865 380,613.5 Total transfers Jan. 1,1917,to date. . 380,613.5 funds in New York which he could use in mak- Total for 1916, including transfers... 5,633,960 Total for 1915, including transfers j 1,052,649 ing large payments due from the United States Total clearings and transfers, ; Government. May 20,1915, to May 17,1917. i 13,030,982.5 Changes in ownership of gold. [000 omitted.] Total t 1 o 9 1 A 7. pr. 19, From Apr. 20, 1917, to Majr 17, 1917, inclusive.1 To A ta p l r . c h 2 a 0 n , g 1 e 9 s 1 f 7 r , o m to May 17,1917.2 Federal Reserve Bank of— Balance to credit Apr. Decrease. Increase. 1 n 9 e , t 1 9 d 1 e 7 p , o p s l i u ts s Ba 1 la 7 n ,1 c 9 e 1 H 7. ay Decrease. Increase. Decrease. Increase. of gold since that date. Boston 841,380 $16,552 §22,316 $5,704 -$4.7,144 Now VorV . .. . . . .. §407,980 16,992 37,809 20,817 'S387,"l69" Philadelphia 81,660 18,451 4,854 $13,597 68,063 Cleveland 44,618 27,453 19,296 8,157 36,461 Richmond 19,907 19,055 13,655 o,400 i 14,507 Atlanta 23,897 5,961 4,973 988 22,909 Chicago 38,134 33,212 30,208 3,004 i * 35,130 St. Louis 8,917 9,773 7,242 2.531 6,386 Minneapolis :::::::::: 10, 724 8,551 7,923 '628 10,096 Kansas City 55,125.5 24,508 22,233 2,275 52,850.5 Dallas.....' 29,926.5 7,575 7, .175 400 29,526.5 San Francisco 53,697 1,777 12,176 10 3Q9 64,096 • Total 407,986 407,986 189,860 189,860 36,980 36,980 387,169 387,169 1 Changes in ownership of gold during period Apr. 20,1917, to May 17,1917, equal 2.01 per cent of obligations settled. 2 Total changes in ownership of gold since May 20,1915, equal 2.97 per cent of total obligations settled. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. EEDEBAL RESERVE BULLETIN". 455 Gold settlement fund—Summary of transactions from Apr. 20, 1917, to May 17, 1917, inclusive. [000 omitted.] I Ba la la s n t ce Gold. Transfers. Weekly settlem M e a n y t s 17 fr , o m 19 1 A 7. pr. 20, 1917, to M 1 a 9 y 1 7 1 , 7, state- balance Federal Reserve Bank of— ment, in fund Apr. 19, "De- Net Total Total ! Net after 1917. posited. Debit. Credit. debits. debits. credits, j credits. clearing. ~r Boston 320,552 833,500 S870 SI, 639 8100,830 S139,224 ! $40,033 S22,316 New York 21,992 58,613 218,850 139', 420 512,893 373,473 ! 37,809 Philadelphia 18,071 26,300 2,919 m 413 ! 212,116 j 15,622 4,854 Cleveland j 30,753 33,170 99!632 i 124,645 ! 25,013 19,296 Richmond ! 15,325 10,625 685* 80,570 I 85,795 i 5', 910 13,055 Atlanta 5,631 10,000 9,013 5,629 49,568 , 49,567 j 5,628 4,073 Chicago I 41,752 58,200 40,000 1,925 189,182 i 204,378 17,12.1 30;208 St. Louis. j 5,973 15,000 5,050 127,261. 134,680 i 7,419 7,242 Minneapolis 6,351 3,600 3,000 1,933 j 34,709 34,681 ! 1,905 7.923 Kansas City 25,258 17,500 383 77,510 i 92,734 15,607 22,233 Dallas 5,345 9,001 33,026 ! 41,627 8,601 7,175 San Francisco 10,227 6,500 5,225 3,346 | 50,420 I 62,094 15,020 12,176 Total 207,230 41,810 282,009 282,009 j 157,879 1,555,014 I 1,555,014 | 157,879 189,860 Federal Reserve Agents' fund—Summary of transactions, Apr. 20, 1917, to May 17, 1917, inclusive. [000 omitted.] Federal Reserve Agent at— I B 1 a 9 la 1 n 7 c ." e d W ra i w th n - . po D si e t - ed. B M 1 a a 9 l y a 1 7 n 1 . c 7 e , Federal Reserve Agent at— ! B 1 a 0 l 1 a 7 n ! ce d W ra i w th n - . po D si e t - ed. ! B M 1 a 9 a l y 1 a n 7 1 c . 7 e , 1 Philadelphia ; $20,590 S400 S4,120 524,310 ; Minneapolis : So, 720 82,500 S3,220 Cleveland \ 9,500 3,000 12,500 i Kansas City i 20,360 500 $700 20,560 Richmond \ 8,100 3,600 1,500 6,000 ' Dallas \ 8,360 2,720 5,640 Atlanta ' 13,030 450 13,480 San Francisco ! IS, 110 3,000 21,110 Chicago ; 37,770 ieo' 10,700 48,310 St. Louis i 6,270 6,270 Total 147,810 j 9,880 \ 23,470 161,400 Operations of the Federal Reserve clearing system Apr. 16, to May 15, 1917. b I ( a t d e R n a m k i e l s s y s e i d r a n v v r a e F e w r e c a d i n g t e y e o r ) a n . l b I o ( t a d u " e n a R t m s k i e l i s s y s d e i e d a r n v r v F a e d e e w r i c d a s i n e g t t r r y e o i a c ) n l . t I d t b e i a s m a n tr v k s i e c s d r t i a s r n a g ( w e o d ) t a n . h i l o e y r n ly avenge). b M b a e n e m k r s - m w b N f e a r h m o o n i m n c k b - h s er in dis- chocks trict. M'Q col- Num- Num- Num- Num- Num- lected, ber. Amount. ber. Amount. ber. Amount. i ber. Amount. ber. : Amount. at par. T Boston j 1,85288,560,546 36,824i-13,975,994 2,883 i$5,213,161 41,559 S17,749,701 970i §176,295 392 2-48 New York ; 4,465 31,130,454 22,504I 6,334,361 16,448 1 9,863,679 43,417 50,328,494 7,352 '1,536,436 624 ] 425 Philadelphia ill, 093 11,215,899 15,364 2,338,016 6,728 8,166,939 33,185 21,720,854 950I 157,804 632 242 Cleveland j 1,114 2,601,931 15,582 6,700,710 1,023 1,222,683 17,719 10,528,324 205i 24,918 754 542 Richmond ] 1,107 2,486,723 13,763 3,879,170 1,602 2,843,000 16,472 9,208,893 196j 23,508 521 270 Atlanta j 1,209 1,102,922 10,309 1,896,109 1,555 1,707,116 13,073 4,766,147 5471 54,794 382 387 Chi c ago ,5,273 11,570,270 ! 12,860 2,745,966 1,375 684,632 19,508 15,000,868 2,225 i 323,552 1,044 1,801 St. Louis i 1,673 5,008,976 I 8,495 1,727,335 169 1,977,438 10,337 8,713,749 2,242 I 318,699 469 863 Minneapolis ! 2,220 4,258,335 ! 10,742 897,275 629 830,559 13,591 5,986,169 173! 19,309 721 1,028 Kansas City i 1,955 3,800,394 1 9 700 1,674,881 593 3,592,025 12,248 9,067,300 814I 58,547 941 1,510 Dallas....." ! 981 1,108,054 9,787 3,392,202 318 703,674 11,086 5,203,930 14i 328 625 221 San Francisco \ 825 1,463,35.5 5,163 911,144 105 32,028 6,093 2,406,527 237! 903,675 526 1 1,289 Total: j Apr. 16 to May 15.1917 :33,767 87,370,859 171,093 36,473,163 33,428 136,836,934 238,288 160,680,956 15,925 |3,597,865 7,634 8,926 Mar. 16 to Apr. 15. 1917 1231,777 127,618,503 7,625 8,607 Feb. 16 to Mar. 15', 1917 .234,475 116,401,430 7,630 8,007 Jan. 16 to Feb. 15, .1917 .220,421 110,188,028 7,630 Dec. 16.1916. to Jan. 15,1917... .[241,933 121,814,589 7,622 8,130 Nov. 16to Dec.15.1916 i -!236,038 125,603,732 7,627 8,065 Oct. 16 to Nov. 15.1916 i .1227,489 115,061,224 7,623 8.059 Sept. 16 to Oct. 15.1916 | .1204,891 97,660,107 7,618 7; 459 Aus.l6to Sept. 15,1916 j 177,397 78,559,704 7,618 7,419 July 15 to Aug. 15.1916 j 133,113 59,301,696 7,624 7,032 1 Including banks from which collections arc made through express companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

456 FEDERAL RESERVE BULLETIN. .TONE 1, 1017. INFORMAL RULINGS OF THE BOARD. Below are reproduced letters sent out from or are to be used for permanent or fixed investtime to time over the signatures of the officers ments of any kind, such as land, buildings, or machinery. or members of the Federal Reserve Board "(c) It must not be a note, draft, or bill of which contain information believed to be of exchange the proceeds of which have been general interest to Federal Reserve Banks and used or are to be used for investments of a member banks of the system: purely speculative character. "(d) It may be secured by the pledge of Paper Secured by Warehouse Receipts. goods or collateral, provided it is otherwise (To a Member of Congress.) eligible.7' Your letter of April 26, inclosing letter from APRIL 28, 1917. president of the Equity Cooperative ; Association of , has been received. Bonds Secured by Real Estate. It is not entirely clear from Mr. 7s letter for just what purpose it is desired to use the (To a Federal Reserve Bank.) proceeds of the loans he has in mind. Your letter of April 24 was duly received, Where the proceeds of loans made by member and inasmuch as the matter referred to therein banks are used for any industrial, agricultural, is one which would properly come under the or commercial purpose the notes, drafts, and jurisdiction of the Comptroller of the Currency, bills of exchange evidencing such loans are the question was referred to that office. I now eligible for rediscount with a Federal Reserve quote below for your information a memoran- Bank. Where the proceeds are used merely dum received by the Board from the Deputy for speculative purposes such notes are not Comptroller of the Currency on the subject: eligible. A member bank may, of course, dis- "The bonds referred to in the attached corcount the note of a farmer whether secured or respondence aggregate $1,200,000 and are unsecured. Under the terms of the act the issued on three buildings made up of a hotel, nature of the collateral security accepted is not apartment house, and stores, valued by the the determining factor in reaching a conclusion advertiser at $2,100,000. The owner of the as to whether or not the note is eligible. property values it at $2,500,000. These bonds If the members of his association intend to are issued by an individual on the security of use the proceeds of loans secured by warehouse this real estate, and are therefore real estate receipts for agricultural, industrial, or commer- loans, subject to the provisions of section 24 cial purposes, there would seem to be no dif- of the Federal Reserve Act and to the limit ficulty about such notes being rediscounted prescribed by section 5200, Revised Statutes. with a Federal Reserve Bank if they comply If the owner's valuation of his property is corwith the regulations of the Federal Reserve rect, the bonds would come within the 50 per Board, If, however, they are used for the pur- cent requirement, but if the company adverpose of purchasing grain, with the view of hold- tising them for sale is correct, the total issue ing it for a higher price, merely as a matter of of bonds exceed 50 per cent of the value of the speculation, the Federal Reserve Banks would property and they would be unlawful investnot be authorized to rediscount such notes. ments for a national bank. For your information I beg to advise that the "It is also noted that the bonds are dated regulations of the Board which deal with this January 1, 1917, and that the first maturity subject are as follows: date is January 1, 1919, the maturities of por- "TheFederalReserveBoard, exorcisingits stat- tions of the issue running up to 1923. At this utory rights to define the character of a note, time, therefore, none oi the bonds would be draft, or bill of exchange eligible for rediscount lawful investments, as they all run for more at aFederal Reserve Bank,hasdetcrmined that— than one year and are secured by city property. 11 (a) It must be a note, draft, or bill of ex- "In cases of this kind this office would advise change the proceeds of which have been used the bank that the bonds are loans subject to or are to be used in producing, purchasing, car- section 24 of the Federal Reserve Act and also rying, or marketing goods in one or more of the section 5200, Revised Statutes, and as none of steps of the process of production, manufacture, them conform to section 24, relative to time or distribution. for which they may run, they would constitute "(b) It must not be a note, draft, or bill of illegal investments and should not be taken." exchange, the proceeds of which have been used MAY 10, 1917. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL BESBBVB BULLETIN. 457 Surrender cf Stock by Liquidated Bank. for the quality, quantity, or delivery of goods covered thereby, does not render the bill non- (To a Federal Reserve Bank.) negotiable or ineligible for purchase by a Fed- In reply to your letter cf May 12, 1917, I eral Reserve Bank. wish to advise you that the Board has ruled on An indorsement of this character is not a several occasions that the adjustment of acrestrictive or qualified indorsement within the counts incident to the repayment of stock submeaning of the negotiable instruments law. It scriptions to a member bank which has either passes complete legal title and makes indorser liquidated or gone into the hands of a receiver liable on the instrument, just as if there were must be as of the date on which the bank went no qualifications relative to accompanying into liquidation or was declared insolvent and papers. In other words, the Board Tbelieves a receiver appointed. that the provision in question is nothing but an The Federal Reserve Act provides that when independent collateral statement denying liaa member bank voluntarily liquidates, or when bility on another separate and distinctcontract it is declared insolvent and a receiver apand in no way relates to or affects the nature of pointed, the stock held by it in the Federal the indorsement or the indorsees liability on the Reserve Bank must be surrendered for cancelcontract contained in the bill of exchange. lation. A failure to comply with this provi- It is suggested, however, that even though sion of the law can not give to a member bank the provision in question does not affect tfte any rights greater than those which would validity of the bill of exchange it is superinure to its benefit had it complied with the fluous in view of the provisions of section 36 of terms of the law. the uniform bills of lading act passed by Con- MAY 14, 1917. gress and approved by the President on August 29, 1916, which provides: Discount of Farmers' Paper. "That a mortgagee or pledgee or other (To a Member of Congress.) holder of a bill for security who in good faith I have your letter of the 2d instant in closing demands or receives payment of the debt for telegram from Mr. , which I have noted which such bill is security, whether from, a party and return to you herewith. to a draft drawn for such debt or from any I presume that Mr. is anxious to per- other person, shall not be deemed by so doing fect some arrangement by which the Federal to represent or warrant the genuineness of such Reserve Banks can discount notes for farmers bill or the quantity or quality of the goods direct, without the intermediation of member therein described."' banks. The Federal Reserve Banks are au- MAY 16, 1917. thorized, under section 14 of the Federal Reserve Act, "under rules and regulations prescribed by the Federal Reserve Board, to pur- Treasury Certificates and Bonds as Security for Rediscount. chase and sell in the open market, at home or (To an individual.) abroad, either from or to domestic or foreign Your letter of April 28, asking to be informed banks, fens, corporations, or individuals, cable if the Treasury certificates of indebtedness transfers and bankers7 acceptances and bills of and the bonds about to be issued by the Govexchange of the kinds and maturities by this ernment will be accepted as security for redisact made eligible for rediscount, with or with- count in the Federal Reserve Banks, is reout the indorsement of a member bank." ceived. The question of the eligibility of obli- No power is given, however, to the Board to fations of the United States for rediscount at compel such operations on the part of Federal 'edoral Reserve Banks is covered by an amend- Reserve Banks, which are allowed to exercise ment to the Federal Reserve Act, approved their discretion. September 7, 1916, as follows: MAY 3, 1917. 'Any Federal Reserve Bank may make advances to its member banks on tlieir promis- Indorsement on Bill of Exchange. sory notes for a period not exceeding 15 days (To a Federal Reserve Bank.) at rates to be established by such Federal Referring to your letter of May 1, 1917, the Reserve Banks, subject to the review and de- Federal Reserve Board is of the opinion that termination of the Federal Reserve Board, proan indorsement on a bill of exchange which vided such promissory notes are secured hj * * * the deposit or pledge of bonds or expressly exempts the indorser from any renotes of the United States." sponsibility for the validity or genuineness of an accompanying bill of lading or other paper or APRIL 30, 1917, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

458 FEDERAL RESERVE BULLETIN. JUNE 1. 1917. LAW DEPARTMENT. The following opinions of counsel have been raises this question whether Federal Reserve authorized for publication by the Board since Banks are included in the inquiry submitted. the last edition of the Bulletin : The act, however, specifically refers to national banks and member banks and could not reason- Reserves Against Government Deposits. Under the provisions of section 7 of the act approved ably be construed to repeal any of the provi- April 24, 1917, national banks and member banks are not sions of the Federal Reserve Act, which require required to maintain reserves against Government deposits Federal Reserve Banks to maintain reserves regardless of the source of the funds deposited. This secagainst deposits. tion, however, does not apply to Federal Reserve Banks. Respectfully, MAY 5, 1917. M. C. ELLIOTT, Counsel. SIR: Section 7 of the act approved April 24, To Hon. W. P. G. HARDING, 1917, which is an act "to authorize an issue of Governor Federal Reserve Board. bonds to meet expenditures for the national security and defense, and for the purpose of Eligible Paper Secured by Real Estate Mortgage. assisting in the prosecution of the war, to ex- A note, draft, or bill of exchange drawn for commercial tend credit to foreign Governments, and for purposes and otherwise eligible for rediscount under the other purposes/7 COB tains the following proviso: provisions of section 13 of the Federal Reserve Act is not rendered ineligible merely because it is secured by a Provided further. That the provisions of secmortgage on real estate. tion fifty-one hundred and ninety-one of the MAY 3, 1917. Revised Statutes, as amended by the Federal SIR: The question has been raised whether a Reserve Act and the amendments thereof, with note, draft, or bill of exchange secured by a reference to the reserves required to be kept by national banking associations and other mem- mortgage on real estate is eligible for redisber banks of the Federal Reserve system, shall count by a Federal Reserve Bank. not apply to deposits of public moneys by the Section 13 of the Federal Reserve Act au- United States in designated depositaries. thorizes any Federal Reserve Bank to redis- You have asked whether, in the opinion of count for its member banks notes, drafts, or this office, this proviso is intended to apply bills of exchange drawn for agricultural, indusonly to deposits of funds realized from the trial, or commercial purposes. If, therefore, a sale of bonds authorized by this act or to all note, draft, or bill of exchange is tendered by a Government deposits. There does not appear member bank for rediscount with its Federal to be any ambiguity in the language used, Reserve Bank, and it appears that its proceeds which in effect repeals all statutes which refer have been or are to be used for one of the purto reserves required to be maintained by poses above specified, it should be considered as eligible, provided it conforms to the other national banking associations and other memprovisions of law and the regulations of the ber banks of the Federal Reserve System in so Board. The fact that such a note, draft, or far as such statutes relate to deposits of public bill of exchange is secured by a mortgage on moneys by the United States in designated real estate does not of itself affect its eligibility. depositaries. In the opinion of this office, This office lies previously advised the Board therefore, national banks and member banks, that, in its opinion, a note or bill which conunder existing laws, are not required to mainforms to the requirements of the law relating tain reserves against any deposits made by the to eligible commercial paper is not rendered United States in designated depositaries, reineligible merely because it is secured by stocks gardless of the source of the funds deposited. or bonds. The same principle applies to the I understand that the Comptroller of the case under consideration. Currency has already advised national banks Respectfully, to this effect. M. C. ELLIOTT, Counsel. It is not entirely clear from the letter of the To Hon. W. P. G. HARDING, governor of the Federal Reserve Bank who Governor Federal Reserve Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNM 1, 1917. FEDERAL RESERVE BULLETIN. 459 Notes and Bills Drawn for the Purpose of Carrying or which these bonds are issued, namoly, the act Trading in Government Obligations. approved April 24, 1917: Notes, drafts, and bills of exchange drawn for the pur- "The principal and interest thereof wluill bo pose of carrying or trading in bonds or notes of the United payable in United States gold coin of the pros States and rediscounted uuder the provisions oi section 1.3 cnt standard of value and shell be exempt both are eligible as collateral security for the issue of Federal as to principal and interest from all taxation, .Reserve notes. except estate and inheritance taxes, imposed MAY 31, 1917. by authority of the United States or its pos- Sm: Section 16 of the Federal Reserve Act sessions, or by any State or local taxing provides that the collateral offered by Federal authority." Reserve Banks as security for the issue of This office holds that the income derived by Federal Reserve notes shall be "notes, drafts, way of interest on tlio Liberty Loan bonds is bills of exchange, or acceptances rediscounted exempt from the tax imposed by the in com ounder the provisions of section 13 of this act," tax law (Title I of the act of Sept. 8, 1916) and etc. the excoss-profits tax law (Title II of the act If, therefore, a Federal Reserve Bank redisof Mar. 3, 1917). counts for any member bank, as it is author- Section 4 of Titlo I of the act of September ized to do under the provisions of section 13, 8, 1916, specifically exempts from liability to any notes, drafts, or bills of exchange drawn the tax thereby imposed: * for the purpose of carrying or trading in bonds "interest upon the obligations of a State or any or notes of the United States, such notes, political subdivision thereof or^.upon the oblidrafts, or bills of exchange are clearly eligible gations of the United States or its possessions." as collateral security for Federal Reserve notes. Section 203 of the excess-profits tax law pro- Respectfully, vides: M. C. ELLIOTT, Counsel. "that the tax herein imposed on corporations To Hon. W. P. G. HARDING, and partnerships shall be computed upon the Governor Federal Reserve Board. basis of net income shown by their income tax returns," etc. Taxability of Income from Investments in Liberty Bonds. The income from United States bonds being The following ruling has been made by the excluded from "the net income as shown by Acting Commissioner of Internal Revenue to their income-tax returns" it necessarily follows the effect that the income from investments that this income is excluded from the income for in Liberty Bonds is exempt from the income the purpose of excess-profits tax. These bonds, tax and from the excess-profits tax: being obligations of the United States, the income derived therefrom is exempt from both TREASURY DEPARTMENT, forms of taxation hereinbefore referred to, Washington, May 26, 1917. while under the act authorizing the issuing of SIR: This office is in receipt of your letter of these bonds, they are exempt as to both princithe 9th instant, in which, you submit for conpal and interest from "all taxation except estate sideration and ruling the following inquiry: or inheritance taxes." "If a national bank invests $200,000 in 3J Therefore, this office holds that in the case per cent bonds issued as part of the Liberty you submit, the $7,000 derived from an invest- Loan authorized by the recent act of Congress, would it be exempt (a) from income, tax on the ment of $200,000 in Liberty Loan bonds would 37,000 derived from its investment in the be exempt from both the income and excess Liberty Loan; (5) from excess-profits tax on profits tax. the $7,000?" Respectfully, In reply, you are informed that in view of DAVID A. GATES, the following specific provision of the act under Acting Commissioner. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

460 FEDERAL EESEEVE BULLETIN". JUNE 1,1917. SUMMARY OF BUSINESS CONDITIONS MAY 23, 1917. ! District No. 1- District No. 2— District No. 3— District No. 4— District No, 5— District No. 6— Boston. New York. Philadelphia. Cleveland. Richmond. Atlanta. General business • Hesitating Active Good Steady Conditions sound.. Good. Crops: I Condition ! Much planting Late season Fair Improved Season little late.. Do. Outlook Larger acreage. Good Good Normal Encouraging. Industries of the dis- Busy Active Very busy Active in all lines. Active; labor in Operating full time. trict. continued demand. Construction, building, Good, but not as j Building activity Decrease com- Retarded by un- Building restricted Slow. and engineering. | large as lost year, j decreasing. pared with year seasonable by high cost of I ! ago. weather. labor and supplies. Very large Exports in excess Small. Jb'oreJgn trade j Small change Slightly below last of last year. Bank clearings | Increased. month. Decrease com- Increased. Increase Increasing. Steady at figure pared with premuch over last vious month; inyear. crease over last year. Money rates ; Increasing. Firm; slight easing Increasing Firm and higher., 5 to 6 per cent Slight increase. tendency. Railroad, post office, Conflicting. Railroad, heavy; Decreasing com- Increased Normal; railroad Good. and other receipts. postal, increased. pared with pre- ! expenses showvious month. j increase. Labor conditions Very well em- Good; labor scarce. Labor well em- } Fair Negro laborers ployed. ployed. ! leaving for high- Growing worse. er wages elsewhere. Outlook.. Uncertain Good.... Favorable I Favorable Encouraging Remarks. | Some uncertainty Some irregularity, Bright. i and hesitancy in owing to specific I big business as conditions; gento operations of erally satisfac- I draft and war tory. revenue measures. District No. 7- District No. &- District No. 9— District No. 10— District No. 11— District No. 12— Chicago. St. Louis. Minneapolis. Kansas City. Dallas. San Francisco. General business.. Fairly active... Good.. Good.. Good.. Satisfactory Active. Crops: Condition Winter wheat poor Fair .do.. Improved Generally good Good. Outlook Good for spring Improved. Favorable.. Increased acreage. Promising grains. Industries of the dis- Operating satisfac- Conservatively ac- Active B/unning full time. Unusually active.. Very active. trict. torily. tive. Construction, building Decrease Slight 'Jeerease Somewhat retard- Slackening appar- Building opera- Increase. anu engineering. ed by prices of ent. tions active. material and labor. Foreign trade..., Do, Bank clearings.. Increasing j Increase Increased Increase Increase Do, Money rates,'... Strong..,' • do Stiffening , No change in rates; Firmer. Slight hardening. easy. Railroad, post office, Decrease. Somewhat smaller Good volume Increase Increasing. and other receipts, j Increased Labor conditions ; Shortage of labor.. Satisfactory High prices caus- Conditions satis- Fully employed; Fair ing unrest; gen- factory. some shortage. eral shortage. Outlook.. Satisfactory ! Good Good Promising Promising Favorable. Remarks. Waiting attitude Crops, except Will be some un- Great activity and in many lines; wheat, good. certainty in bus- high prices seem underlying con- Business more iness until Govditions sound. conservative. ernment plans in prospect. are fully known. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JOKB 1, 1017. FEDERAL RESERVE BULLETIN. 461 GENERAL BUSINESS CONDITIONS. There is given on the preceding page a sum- tralian wool have been in progress for some mary of business conditions in the United time past, but lack of shipping facilities will be States by Federal Reserve districts. The re- a serious problem to the .importer. Woolen ports are furnished fo}r the Federal Reserve and worsted mills, especially the former, con- Agents, who are the chairmen of the boards of tinue very busy. Domestic business is being directors for the Reserve Banks of the several "sidetracked" as far as possible in order that districts. Below are the detailed reports as of Government orders may be given the preference. approximately May 23: The boot and shoe industry is feeling the effects of the large business of last year. At DISTRICT NO. I—BOSTON. that time retailers bought YQTJ heavily, antici- So many conflicting factors are entering into pating rising prices and a large demand. Many the situation that business men are uncertain dealers have found it hard to carry a large stock as to their proper course. Raw material prices with their limited capital. With the present are high and in many cases are increasing each economy movement, they are more inclined to week. Wages have risen, labor is scarce, and reduce their stock, as they can do at a good it is expected that the operation of the selec- profit, than to place additional orders. For tive draft will cause an even greater scarcity, this reason manufacturers are finding new although women are already being used in some business rather unsatisfactory. Business in places to take the place of men. leather has been very quiet, although prices A wave of economy has caused consumers to have remained firm, and with Government retrench, at least until something more definite orders to be placed these will probably conas to the future course of wages and commodity tinue so. prices is disclosed. In addition, it is thought The dry goods business has been adversely many are economizing to invest in the Liberty affected by the late spring, continued cold Loan or to pay for supplies of one kind or weather, and the unsettlement caused by our another which they are hoarding. The season entering the war. However, it is expected has been late and continued cold weather has that with the coining of more seasonable caused a postponement of spring buying. How weather the demand for summer merchandise long this period of hesitation will last it is im- will be good. possible to estimate. Fine cotton cloth mills are feeling a reaction, The coal situation is very bad, both in anthra- and the demand for goods for future delivery cite and bituminous. The anthracite shortage is light. Manufacturers have plenty of adis caused by a lack of supply, while in bitumi- vance orders and expect good business again nous it is due to the largely increased demands before they reach the end of those now in hand, of mills and factories. Any exportation of although possibly the need of econony may rebituminous coal and reduction of the New strict business in high-priced goods turning it England supply would cause a very serious toward the cheaper lines. Mills are running situation. Manufacturers in their anxiety to as nearly full as they can with the supply of be sure of a supply have bid prices up, and these labor, and the news from Washington that the in comparison with former years are now very first draft of men for the Army would not come high. until September was very welcome. The Gov- Prices for wool continue to increase, and it is ernment orders placed in Fall River for lowfelt that unless the English Government re- count cloths has caused activity and strength leases some wool from Australia the supply for in that market with a slight advance in prices. domestic and Government needs will not be Money is much firmer than a month ago with sufficient, Negotiations for a release of Aus- banks restricting their business to a large ex- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

462 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. tent to their own people, although, during the DISTRICT NO, 2—NEW YORK. past few days the tone has been easier. Call The aggregate of business activity in this money is 4^ per cent, with exceptions at 5 per district continues at a high level. Readjustcent. Time money 5 per cent for practically ments incident to the transition to war footing all dates, with the best grade of commercial are stimulating activity and production in paper quoted at that rate; town notes, 4| per staple and basic lines, but have curtailed to a cent upward for fall maturities; bankers' ac- marked extent the retail sales of commodities ceptances, 3| per cent upward. not the object of pressing day-to-day demand. Loans and discounts on May 19, 1917, The public's purchases of clothing, dry goods, amounted to $457,051,000, as compared with silks, jewelry, and articles of like nature have $463,184,000 last month and $416,934,000 on decreased very materially since the declaration May 20, 1916. Deposits on May 19, 1917, to- of war, due primarily to the practice of econtaled $351,006,000, as compared with $364,- omy, although the lateness of the season has 406,000 on April 14, 1917, and $339,196,000 on been a contributing factor. Business in men's May 20, 1916. The amount "Due to banks77 and women's clothing and dry goods is peron May 19 was §137,273,000, as compared with haps as much disturbed as in any line, being $147,630,000 on April 14. The excess reserve hampered by uncertainties as to the course of of these banks decreased from $40,428,000 on styles, supply and price of goods, and probable April 14 to $22,662,000 on May 19. buying demand during the next few months, Exchanges of the Boston Clearing House for as well as by rising prices and Government the week ending May 19, 1917, were $228,- demand. 733,906, compared with $210,413,870 for the Though manufacturers in the textile induscorresponding week last year, and $227,048,842 tries report slightly decreased sales to the for the week ending April 14, 1917. trade, orders are in most cases being received, as Building and engineering operations in New fast as they can be handled. Woolen mills England from January 1 to May 16, 1917, have heavy demand for fall goods and are runamounted to $69,073,000, as compared with ning to capacity, Government orders making $72,393,000 for the corresponding period of up an important part of the business. Cotton 1916, the highest previous year recorded. mills have sold their product for several months Imports to the port of Boston for April, 1917, ahead and have received, large Government amounted to $23,864,180, as compared with orders for duck, khaki, and heavy cotton goods. $24,816,006 for March, 1917, and $23,683,251 Demand for burlaps and jute is active with for April, 1916. prices firm, difficulties of ocean transportation The receipts of the Boston post office for hindering the importation of material from April, 1917, show an increase of $35,143.13, or India and Great Britain. about 5 per cent more than April, 1916. For The volume of business in the hide and the first 15 days of May, 1917, receipts were leather trade has decreased slightly, some hesiabout 4 per cent, or $16,561.20 more than for tation being observed in buying demand. the corresponding period last year. Boots and shoes are selling in slightly smaller Boston & Maine Railroad reports net oper- volume, apparently because of high prices, but ating income, after taxes, for March, 1917, as manufacturers have orders covering their $724,514, as compared with $1,089,104 for the output into the early winter. corresponding month of 1916. New York, Drugs and chemicals have commanded in- New Haven & Hartford Railroad reports net creasing prices, and though sales to retailors operating income, after taxes, for March, 1917, have been slightly reduced, the total volume of as $1,647,490, as compared with $1,338,120 for business clone has increased. Conditions in the the same month, last year. dyes tuffs industry have improved both as to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

.TUNE 1, 1017. FEDERAL RESERVE BULLETIN. 463 quantity and quality of output. Manufac- report a decrease in business for April, due to turers of rubber tires and other rubber products decreased demand by foreign customers, to report continued heavy buying demand and difficulties in obtaining goods for export, and to higher manufacturing costs due to increased lack of ocean tonnage and to high rates for cost of labor, cotton fabrics and chemicals. freight and insurance, but total exports through The volume of business done by manufac- the port were slightly greater than those for turers of machinery represents maximum March. capacity of output with prices rising. Buying Provisions have continued to increase in is very largely intended to provide equipment price, though somewhat less rapidly than imfor turning out supplies for the Government. mediately following the declaration of wax. Sales of pleasure automobiles have decreased, Wholesale grocers are doing a larger volume of but the demand for motor trucks continues business than last year, but are seeking to disnormal. Orders for cars and other railway suade patrons from buying more than actual equipment have been small. The volume of immediate requirements, the demand being "business in general railway supplies, such as mostly for staples such as sugar, flour, cereals, castings, forgings, bar iron, wheels, and other dried and canned vegetables, and dried and articles for repairs, is fair. canned fruit. Coal dealers have orders larger Buying demand for metals such as lead, than are usual at this season, and have had to brass, zinc, and copper has been slightly less pay premiums for prompt delivery. active, a larger proportion of the output going Letters received from bankers in all parts of to domestic buyers. The production of zinc the district show the existence of keen and or spelter is near the highest point in the history active interest in the problem of increasing proof the industry and prices are now much lower duction of food crops, and indicate that despite than during 1916, though still about 50 per shortage of labor and high price of seed the cent above those ruling before the war. acreage of land planted is much larger than Great activity in the steel trade is reflected by last year. Cool, damp weather prevailed up pig-iron prices now about twice those of a year to the middle of May and delayed planting in ago, and by the increase of 471,439 tons in some sections, but warmer weather has come unfilled orders of the United States Steel Cor- and the delay was not great enough to be poration, between March 31 and April 30, the dangerous. amount on the latter date being 12,183,083 The freight traffic situation has continued to tons, or about 80 per cent of the total annual improve, and reports of freight movements capacity of the plants. Pig-iron production for indicate effective use of railway equipment. April was greater than in any previous month That the situation is still serious, however, is except October, 1916. shown by increase in net shortage of freight Activity in building trades, hampered by cars from 130,082 on March 1 to 143,059 on scarcity and high prices of labor and materials, April 1, and by the continuance of embargoes is declining. Building permits in greater New on shipments. York for April were only $8,036,709, as com- Borrowing operations of American industrial pared with $14,786,078 a year ago. and railroad corporations for April show a Collections continue good for the most part, heavy decrease, the total being $130,141,500 but reports indicate that there are now several as compared with $312,115,800 for March and lines in which they are not as good as a month, with $221,598,500 for April last year. ago. The market for stocks and bonds during the Merchandise imports at New York for April last week of April and early part of May was were approximately $21,000,000 less than those weak, due apparently to preparations for subfor March, though still over $11,000,000 greater scriptions to forthcoming issues of Government than those for April, 1916. Some exporters bonds, and sales were lighter than for the same Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

464 FEDERAL EESEBVE BULLETIN. JUNE 1,1917. period a year ago. Prices showed a marked it is more than offset by the Government redownward trend, reaching the level of October, quirements. The mills are kept running and 1915, but reacted about the middle of May on labor remains fully employed. The sufferers the announcement of the Government's ad- from the change are the wholesale and retail vance of $100,000,000 to the Russian Govern- distributing houses. ment. There has been a distinct strengthening Cotton.—Cotton trade has been quiet during of security prices on the London Stock Ex- the past month, due to the economy movement change. and the high prices of cotton goods. Jobbers Call money on April 25, the date of the Gov- and retailers are just now beginning to feel the ernment's issue of 3 per cent Treasury certifi- full effect of high-priced cotton. The rise has cates, touched 4 per cent, dropping back next practically all been within the past year, and day. Again, from May 1 to May 7, the ruling until recently goods still in the process of rate was from 3 to 4 per cent with a high of 4J manufacture and distribution wore made from per cent on May 3. Imports of gold and dis- lower-priced yarns, of which some manufacbursements b}^ the Government have since turers had considerable quantities on hand at brought about an easing tendency, and rates the time the rise began. Practically all of have been steady at moderate levels, the Gov- those stocks have now been consumed, so the ernment's arrangements for redepositing with manufacturer is now offering to the retailer and banks funds received on account of loans pre- jobber goods for fall delivery at prices based venting undue or serious disturbance. on the present yarn values. It is doubtful Excess reserves of New York Clearing House whether the retailer will buy in any quantity banks fell from $111,642,220 on April 28 to at such prices, and if he does, it is doubtful $90,478,070 on May 5, but rose again to $147,- whether the goods can be passed on to the con- 199,000 on May 12, and on May 17 stood at sumer, whose purchasing power has been cur- $146,754,420. tailed by the high prices of foodstuffs. Local dealers regard the situation with confidence, DISTRICT NO. 3—PHILADELPHIA. however, and believe that the manufacturer Manufacturing plants in this district have who is not buying needed yarns now will pay continued to operate as nearly to capacity as even a higher price for them at a later date. the supply of labor and materials would permit Crops.—The increase of our food supply consince the entrance of the United States into the tinues to be a most important question throughwar. A slowing down is noticeable, however, out the district. Unseasonable weather has in retail trade and among the jobbers of wear- retarded the farmer in his spring work and has ing apparel of all kinds, due to extremely high checked the growth of crops. Weather condiprices, unseasonable weather, the economy tions are better now than they were during the campaign, and the fact that most consumers early spring. The Pennsylvania State Departare pretty well supplied. Some of the depart- ment of Agriculture estimated the condition of ment stores have been compelled to reduce winter wheat to be 90 per cent of normal on their staffs of employees because of curtailed April 1, and rye 92 per cent. It is estimated sales. that the potato acreage in Pennsylvania is 108 Business men are not greatly perturbed over per cent in comparison to the acreage last year. the war situation, although they fully realize In New Jersey, also, a large acreage of potatoes its seriousness. Demand for iron and steel, has been planted. Efforts are being made to arms and munitions, food and clothing, ships, furnish the farmer with the labor necessary to and other products necessary for the mainte- obtain maximum production. Schools and colnance of armies and the transportation of sup- leges are dismissing students who agree to work plies must continue. When domestic demand on the farms. Local committees in many places becomes lighter in such lines as wearing apparel, are working to see that every available acre Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. EEDERAL BESEBVE BULLETIN. 465 is used for some productive purpose. Such that there will be a paper shortage by midsumefforts will undoubtedly be helpful as a means mer. Advancing prices are expected. The of bringing production as nearly to normal as margin of profit has been dwindling because of possible. It is too late to result in increased increased expenses in all directions. acreage in wheat, grains, and other staple prod- Textiles.—Manufacturers of hosiery, underucts, but the acreage planted will receive bet- wear, and men's wear of all kinds are busy on ter care and will, yield more because of the extra Government orders. In other branches of the help placed on the farms. More vegetables will textile trade, business is quiet. Manufacturers be raised also, and fruit orchards, which have of carpets, towels, lace curtains, and tapestries been neglected by many farmers in the past, do not have enough orders to warrant more will now be well cared for; all of which is com- than 50 per cent operation. Underwear and mendable as a tendency toward intensive hosiery manufacturers are well sold up on dofarming. mestic and Government business. Stocks in Groceries.—Business is good in the wholesale the jobbers' hands arc very low, but it is grocery trade; there is a good demand from the thought that the retailers have larger supplies retailer for goods to satisfy the abnormal de- on hand than is usual at this time of the year. mands of the consumers who are storing gro- Cool weather is retarding the movement of ceries. There is a scarcity in canned goods and seasonable goods to the consumer. Silk manusome other staples, but for the most part there facturers are busy filling orders but they are would be plenty of goods to go around if buy- not now receiving many new orders from jobing were restricted to real needs. There is fear bers and retailers whose trade has been hurt among some of the local houses that heavy by the advocacy of economy. losses will be sustained on goods furnished the Tobacco.—Cold weather is seriously retarding Government. They have been notified to de- the Lancaster County tobacco crop. The seed liver certain goods at prices later to be deter- beds were planted two weeks later than usual mined and if the Government bases its prices and the crop can not be planted now before the on original production costs instead of the cost middle of June. Growers are not contracting to the wholesaler when he bought the goods, this year's crop but they expect the buying to heavy losses will result. begin around 15 or 16 cents, the prices at Leather.—Vast quantities of sole leather are which most of last year's crop was sold. being purchased by the Government and re- Wool.—Trading in wool is largely of a specuquirements promise to continue large. There lative nature, prices being bid up at a very is considerable export demand but it is not an rapid rate. Some manufacturers who must important factor in the business just now. have wool to fill present needs are in the mar- Domestic trade in belting leather is very good ket and have to buy regardless of price, but but demand from shoe manufacturers is very they are not buying ahead at the prevaillight. The economy movement has particu- ing figures. Supplies of wool are very light, larly affected manufacturers of high grade wo- considering the needs of the Government for men's and misses' shoes. They have very little clothing, blankets, etc. Manufacturers of all to do at present; the retailers are well stocked kinds of woolen goods are very busy. Governand the goods are not moving from the shelves ment business is of course given precedence as fast as they should. and has caused either the cancellation or long Paper.—The outlook for dealers in paper is postponement of deliveries of domestic orders disquieting because of difficulty in obtaining in many cases. raw materials. The small cut of wood in Can- Money.—Deposits of Philadelphia banks ada last winter, due to scarcity of labor and have declined approximately $30,000,000 dursevere weather, can not be corrected until next ing the past month while surplus reserves have winter, and it is the opinion of large dealers decreased $20,000,000. Money rates have stif- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

466 FEDERAL RESERVE BULLETIN. JUNE 1,1917, fened considerably, call money advancingjfrom tional work is, of course, necessary; but the 3-J- to 4 per cent. Commercial paper is not now many men who make up the volunteer organibeing bought below 5 per cent. Considerable zation are fully alive to the magnitude of the rediscounting with the Federal Reserve Bank task, and we feel most hopeful of the necessary is being done, especially by the Philadelphia public response. banks. Agriculture.—The various organizations ad- Financial indicators. vocating increased food production and economies in the utilization of foodstuffs have done Per cent increase excellent work, and results are noticeable. or decrease compared with— The reports indicate that there is approxi- May 15, 1917. mately 25 to 30 per cent more plowed area in the country districts than at any previous time; and, with a number of agencies pro- Philadelphia banks: viding men for farm work, the production of .Loans S566,933,000 + 2.9 j + 10.7 Deposits 058,866,000 ~ 4.3 I + 6.8 staple articles will be very much increased in Surplus reserve 17,303; 000 - 53 i - 51 Federal Reserve Bank: this district, provided, of course, seasonable Discounts and collateral loans. 8,637,000 -1-688 +1,200 Per cent cash reserve 51 - 22 - 8 weather obtains. The long, cold winter was Com 9 m 0e d r a c y ia l d i p s a e p oi e m r t rato.p pe e r r c c e e n n t t . . . . 5 4 () 2 44 C1) not broken until a week ago, but with only *3£ one week of spring the conditions have greatly April, 1917. P m re o v n i t o h u . s Year ago. improved and the prospects are much better. The movement for city gardening has had a Bank clearings: i in Philadelphia ' SI, 410,313,000 - 3.9 +41 decided effect, and all of the cities, towns, Elsewhere in district I 101,560,000 + 4.4 +12.8 and villages report a great number of garden Total. 1,511,873,000 - 3.4 +38.5 plots. It is, of course, to be expected that Port E o x f p o P r h ts iladelphia: 39,889,000 + 3 +13 the results obtained will not be proportionate Imports 11,103,000 -1-43 — 2 to the work and material employed, and that, Building permits in Philadelphia. 5,0.10,000 -1-44.2 -19.3 Post-olRce receipts in Philadel- to a large extent, the inexperienced and inphia ". 846,000 - 7.2 + 8.5 Commercial failures in district efficient laborer will not produce crops com- (per Bradstreet's) 56 - 8 -16 mensurate with his outlay; but there can be i No change. 2 Actual. no question that the large amount of work DISTRICT NO. 4—CLEVELAND. being expended will later result in a very con- General conditions in this district, as re- siderably lessoned demand for vegetables and ported for the preceding month, are favorable other foodstuffs in the cities. in most lines of activity. There have been no One important farming region reports that unusual developments tending to make an un- farm lands are now selling higher than everfavorable impression. In some branches hesi- known, and that farmers have been able to tancy and uncertainty continue to some ex- liquidate materially owing to good prices for tent, due largely to local problems, the outcome stock and farm products during the past eight of the present high rate of production and months. activity in industry, which have been present Industries.—Practically all plants and facfor some time. The transportation situation tories report "business as usual." In the iron has somewhat improved. and steel trade, demand and prices are main- Liberty Loan.—That this district will exceed tained at the highest point ever reached. its share in subscribing for the Liberty Loan is Lack of available transportation, both for raw now apparent. The organization of the cam- materials and finished products (although this paign for publicity and distribution is already condition is now improved), is curtailing opfar enough advanced to indicate a widespread erations to some extent and in some localities general response by the people. Much educa- inadequacy of labor has a detrimental effect. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 3,1917. FEDERAL BESEEVE BULLETIN. 467 Improvements are noted in methods of pro- Banking and investments.—Banking condiduction, which offset largely the labor shortage, tions are excellent. There has been an inand the reports indicate proposed plant ex- creased demand in the country for impletensions, especially for plates for shipbuilding. ments and planting, and. the cities have also Ice in the upper lake regions has retarded experienced some increased demand, though, the movement of ore and coal, but the reports in general, the market is easy. Investment show that this avenue of transportation is be- conditions are entirely in a waiting attitude, ginning to be used, and another record season and the markets are quiet. Money rates are is anticipated. firm to higher, time commercial paper now be- In the brick, fireproofing, clay products, and ing offered at J per cent to 1 per cent advance. pottery lines there is some hesitancy, and per- So-called "call loans" in some parts of this haps a falling off in business, due largely to district are being discouraged by bankers, and the labor situation and greatly increased cost speculative commitments have been largely to the consumer, which causes a lessened avoided. demand. The following table indicates increases in The rubber industry is working to full ca- bank clearings over the corresponding period pacity, with every indication of continued of the preceding year in nine of the principal activity. cities: Automobile factories producing both pleasure cars and trucks are giving renewed effort April 16 to May 15, to the manufacturing of trucks, and there has inclusive. Increase. Per cent been a general tendency to substantial in- increase. 1917 1916 creases in price of cars by reason of increased cost of materials and fabrication. Akron, Ohio 823,046,000 $15,316,000 87,730,000 50.5 There can be no question that the industrial C Cl i e n v c e in la n n a d ti , , O O h h i i o o . . . . 2 1 9 6 4 6 , , 2 9 9 4 7 2 , , 5 4 2 9 7 2 1 1 3 0 4 2 , , 7 6 8 9 1 8 , . 3 5 0 2 0 2 1 3 3 2 1 , , 1 5 6 9 1 9 , , 1 0 9 0 2 6 2 8 3 0 . . 9 8 situation generally in this district is strong and C D o a l y u t m on b , u O s, h O io hio.. 4 3 3 , , 9 5 1 0 2 0 , , 3 4 9 0 1 0 3 3 7 , , 5 0 0 0 3 6 ; ,4 9 0 1 0 9 6,4 4 9 0 4 8 , , 0 4 0 7 0 2 1 1 1 7 . . 7 5 that the outlook is as good as could well be Erie, Pa 7,915,301 5,823,813 2,091,487 35.9 Pittsburgh. Pa... 333,273,297 272,054,897 61,218,401 22.5 expected. Toledo, Ohio 48,520,795 38,054.653 10,400.141 27.5 Youngstown, Ohio 13,733,934 10,390,343 3,343,591 32.2 Building.—There are inadequate housing fa- Total 935,202,137 679,089,847 255,512,290 37.6 cilities in all of the larger cities and industrial centers. Efforts are being made to improve The following table indicates the comparison the situation, but the high cost of labor and of the post-office receipts in the nine principal material is a very deterrent factor. The de- cities for April: crease in number of permits and valuations in all of the cities except two, as indicated in the following table, is due to the late spring: P is e s r u m e i d t . s Valuations. C A i k n r c o i n n , n O at h i, i o Ohio S 2 8 7 5 8 . , 2 1 7 7 1 6 8 2 6 6 2 7 , , 6 6 2 0 4 8 10,509 3 3 6 . .3 9 Cleveland, Ohio... 355'. 899 332,915 22,984 6.9 Dayton, Ohio 60,213 65,676 i 5,433 18.3 Columbus, Ohio..., 116,661 110,991 5,670 5.1 April,April. April, April Erie, Pa 24,111 22,891 1.220 5.3 1917. 1916. 1917. 1916. Pittsburgh, Pa.... 348,219 364,744 i 16i525 i 4.5 Toledo, Ohio 106,681 94,850 11.830 12.5 Youngstown, Ohio 26,679 26,569 110 .4 Akron, Ohio 885 499!$2,431,21.3!$l,340, Cincinnati, Ohio l,280j 1,7091 1,039,7801 1,156,165 Total.. 1,401,940 1,3 ;,868 | 53,073 3.9 Cleveland; Ohio. l,303i 1.533' 2,441,500! 2,625,055 Dayton, Ohio... '184! '1471 215,204! 259,370 Columbus, Ohio. 324; 393i 532,0001 1,166,840 * Decrease. Erie, Pa 230; 200! 689,099! 282,429 Pittsburgh, Pa.. 413 482| 1,094,1091 1,250,762 Mercantile lines.—The demand throughout Toledo, Ohio 506 611 1,176,969: 1,188,467 Youngstown, Ohio. 1721 349,675 • 373,001 this district for nonessential articles has notice- Total. 5,308j 5,746 9,969,549; 9,642,948 3.5 ably decreased, and the activities of the wholesaler and retailer both have been lessened to a 1 Decrease. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

468 FEDERAL KESEEVE BULLETIN. JUNJB 1,1917. marked extent. Whether this condition is Jobbers in some lines report that purchases due to unseasonable weather or to the practice are not being freely made, and there is some of economy is not established. The movement complaint of slow collections. Furniture and of necessities is at its highest, and the increased hardware dealers, including general dealers in cost probably continues the total of values of building supplies, report less activity. Dealers trade at high points. in tobacco report a good volume of trade. The percentage of slow accounts has in- Lumber has improved considerably in price, creased during the period covered by this report but this is offset by the reduced output, which and collections generally are not as good as a is curtailed by labor and shipping conditions. month ago. Transportation difficulties, both in securing ma- Labor.—Labor conditions continue as good terials and moving manufactured products, and as could be expected in general, although in the difficulty many manufacturing plants are some locations there have been evidences of encountering in securing an adequate supply of unrest, and it is apparent that the selective coal even at present high prices, are important service act will further deplete the supply. factors in the situation. One jobber calls atten- Voluntary increases of salaries and wages by tion to the fact that his tonnage was 25 to 33J employers have extended to practically all per cent less a year ago, but high prices have forces except clerical, and even in the clerical increased his capital requirements and his risks, lines the supply is inadequate for the needs resulting in a decreased percentage of profits. of the district at advanced salaries. Barildng.—Unusual demands in increasing DISTRICT NO. 5—RICHMOND. volume are coming from farmers for agricul- Liberty Loan.—Our financial preparation for tural purposes, owing to universal efforts for a war, including the assistance to be extended maximum production, accelerated by the high directly to our allies, has naturally been the cost of supplies, fertilizers, labor, and general overshadowing factor during the past month. expenses. Although there has been consider- The uncertainties naturally attending this able shrinkage in deposits and an average inunexpected situation have produced some crease in rates of at least 1 per cent in the larger hesitancy in every business and vocation. centers of the district, all reasonable demands This district has for years been steadily are being promptly met by the banks, either growing in wealth and prosperity, particularly from their own resources or through redisin recent years, but the field of development counts principally with the Federal Reserve has been so wide and the demand so great Bank. that its resources have gone back to the soil— Clearings, exports, postal receipts and railhave gone into agricultural improvements, or roads.—Bank clearings show an increase of 16 additions to manufacturing and other plants. per cent. Exports continue to show an increase The result has been that while the aggregate notwithstanding freight embargoes. Postal of increasing wealth has been steady and rapid, receipts show a slight increase. Railroad the demand for capital has taxed the resources receipts show an increase in gross, but are of its banks and drawn largely upon wealthier seriously affected by the increased cost of sections of the country. The liquid wealth operation. The situation of the railroads is of the district is therefore relatively limited. regarded by many as perhaps the most serious There is a widespread and patriotic effort and domestic question confronting us. Railroad desire in the district to meet liberally the borrowings have about reached the limits of national call for financing. The district is credit from every point of view, there is general being organized in every direction. complaint with regard to transportation condi- General conditions.—General business con- tions, and business which the roads are unable ditions are regarded as sound, but there is to handle is knocking at their doors. It would some slowing up. seem a self-evident proposition that the roads Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNB 1, 1917. FEDERAL RESERVE BULLETIN. 469 can only meet this situation and render the effi- report business somewhat slow and conditions cient service, which is imperatively demanded unsatisfactory. by shippers and our people generally, by an Labor.—There has been some disorganization allowance of increased rates. Inquiry in the on account of volunteering for Government district indicates a recognition of this necessity service and widespread deportation of negro and a willingness on the part of manufacturers laborers from the district, induced to leave by and others to an increase in rates, in order that high wages in the northern States, it being they may secure efficient shipping facilities. estimated that as many as 75,000 to 100,000 It is recognized that the ultimate consumer have left the district in the last few months. "pays the freight/' and that reasonable pros- The high price of food has borne heavily on the perity can only be attained and maintained by poorer classes and has been an important factor a maximum, production, the prompt transpor- in this situation. tation of which from the producer and manufacturer to the consumer is an essential function. DISTRICT NO. 6—ATLANTA. There is a widespread demand for the necessary Business conditions in the Sixth Federal increase of rates and the prompt solution of the Reserve District were not as good in May as transportation question. during the months of March and April. The Farming.—The season generally is backward, high prices of food and the agitation in connecand in striking contrast with the wet season of tion with the war had a weakening effect. last year, there has been some lack of moisture. Interest in the Liberty bond issue is growing Strenuous efforts are being made to get a full more earnest. The Federal Reserve Bank of crop, food products receiving more widespread Atlanta has inaugurated a campaign of subattention, and the yield of garden products scription and education with.a central Liberty promises to be beyond anything ever before Loan Committee composed of the officers of the attained. Grain, while more widely planted, bank and a number of business men of excepis below the average condition; the same may tional ability. Each State in the district is in be said of cotton, the acreage of which is esti- charge of a local State chairman with a commated to be about the same as last year. Re- pact organization extending into every line of ports as to acreage in tobacco vary, but the commercial, agricultural, and industrial fields. average would probably be about the same as Five hundred of the most prominent men of last season. Agricultural implements are scarce the city of Atlanta attended the first public and deliveries are behind. The peanut crop of meeting. Bankers, bond houses, large corpothe past season was very profitable. The rations, and many individuals have volunteered farmers' supply has been disposed of, leaving their services in connection with the sale of only limited stocks in the hands of cleaners and Liberty bonds, and are devoting their adverjobbers. Fruit prospects, including berries and tising space to the cause. The Southern Bell peaches, are favorable. The production of Telephone & Telegraph Co. have placed at the truck crops along the seaboard, particularly disposal of the Liberty Loan Committee their potatoes, has been unusually heavy and pro- contracted advertising space in 60 daily newsfitable. Many banks are advertising to help papers in 26 cities in the district without cost. especially those who are planting food crops. With a clearer understanding of the advantages Increased facilities for canning excess vegetable of owning a Liberty Loan bond, it is thought crops are quite extensive and are an important that the number of individual subscribers will step in food conservation. be large. Milling.—Cotton mills continue to operate on The general agricultural conditions are very full time, are paying increased wages, offering encouraging, and this is especially true of foodbonuses for efficiency, and continuing to obtain stuffs. With reasonably favorable seasons, the good profits. Woolen mills, on the contrary, corn crop will be the largest ever produced and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

470 FEDERAL RESERVE BULLETIN. JUNE 1,1P17, reports indicate an increase of from 100 per trees can also be saved in this way, and many cent to 300 per cent in general foodstuffs, such vegetables left on the vine to dry. In addition as potatoes, peanuts, velvet beans, soy beans, to the saving of sugar and labor, the drying peas, sweet potatoes, etc. Also there is a de- method will aid materially in relieving the can cided increase in sorghum for sirup making and shortage. large increases in all forage and feed crops. Cotton is late. The dry weather in April Care is being taken to conserve breeding ani- resulted in seeding under unfavorable conmals, especially cattle and hogs, though in a ditions with insufficient moisture for rapid few localities high prices have resulted in the germination. In the northern part of the disfarmer selling animals that should have been trict there has been little, if any, decrease in retained as breeders. There will be an exceed- cotton acreage, and southeast Georgia has ingly large production of garden truck and planted heavily. In southwest Georgia and movements are on foot all over the district to southern Alabama there has been a large deconserve the supply. In almost every county crease in cotton acreage owing to the boll there is an organization preparing to take care weevil. In Georgia it is estimated the crop of the marketing of and canning of foodstuffs. will be from 10 per cent to 15 per cent less than In numerous places civic organizations have last year; in Alabama probably 30 per cent; guaranteed the farmer a minimum price for in Mississippi, 20 per cent; in Louisiana, 10 per his products and are making arrangements for cent; and Tennessee and Florida, light cottonsales warehouses for the disposal of his prod- raising States, about normal. The general ucts. In this connection the Southern Kail- decrease in cotton acreage will probably be way and other railways in the district are augmented by a smaller production due to making a special effort to collect information shortage in negro labor. as to the products and bring the seller and The labor situation continues to grow worse. producer in close touch. They are doing this There is a scarcity of unskilled labor around through personal representatives, public meet- the coal mines, ore mines and furnaces, and ings, and bulletins, and in addition are con- while plants in the district, in general, are ducting an intensive campaign on the best operating full time, unless some means are methods of soil preparation, planting, and found to retain labor, production will be largely cultivation of food crops. curtailed; and this will likewise be true in the The Florida Citrus Fruit Exchange, having harvest and cotton-picking season. a large and complete selling force in the North, The shortage of cars continues, and this has has offered its services to the Government for caused some few plants to operate on short the handling of food products, and has just time for a period of several days. This connotified its four or five thousand members in dition has especially affected the lumber busi- Florida that they are prepared to handle their ness. Lumber dealers state the section of the vegetables and all other produce shipments. country between the Mississippi River and a The purpose of this activity is to keep down line drawn north through Atlanta from the speculation. Gulf seems to be in worse condition, so far as The shortage of cans is still serious, and no car supply is concerned, than any other secgreat improvement is looked for. In view of tion of the country. Lumber prices are firm and this, the agricultural departments of the va- on new high levels, with the demand very heavy. rious States and the various organizations There is an increased activity in shipbuildcooperating in the increased food production ing, though handicapped somewhat by lack of campaign are drawing attention to practical ship carpenters, ship joiners, boiler makers, methods of fruit and vegetable drying. Large and machinists. Steel ships as well as wooden quantities of fruit that drop and rot under the ships are being built. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDEBAL 'RESERVE BULLETIN. 471 The unseasonably cool weather in connection Crop prospects are unsatisfactory, and with with scarcity of labor on turpentine farms is but a small winter-wheat crop it is difficult to seriously interfering with naval stores produc- believe that even favorable weather conditions tions, and receipts at the ports show a decrease will produce crops of spring wheat, oats, and as compared with the same period last year. corn sufficient to meet the requirements of this Foreign demand is much less than a year ago, country, when it is taken into consideration but the movement to domestic consumers has that Europe will call upon us for wheat alone been excellent. to an amount estimated at 250,000,000 bushels, Phosphate mines in the district are working Foreign Governments are reported to have only about 50 per cent of capacity, owing to been heavy buyers of futures in wheat, in inability to get box cars for loading to interior order to protect their requirements. Weather points. Operators claim to be receiving only conditions during the past month have been about 20 per cent of requirements. Fertilizer reasonably satisfactory, although cold weather plants are anxious for phosphate rock, but has retarded the growth of all small grains. A railroads can not furnish equipment. One large acreage of corn and oats is indicated by company states that they were short 300 cars the reports up to date. for loading in the second week of May and Agricultural implements.—Manufacturers rewould require 600 cars for the third week port a satisfactory volume of orders and diffiloading. culty in securing the necessary material and Bank deposits continue to show large in- labor; also a lack of railroad equipment with creases. which to make deliveries of farm machinery. DISTRICT NO. 7—CHICAGO. Automobiles.—Concerns in this line are Business conditions in the Seventh Federal experiencing a decrease in shipments and, in Reserve Bank District are, on the whole, some cases, have curtailed production and satisfactory, although there is considerable decreased working forces. The increased cost evidence of a waiting attitude among business of construction has reduced profits and, men in certain lines. The call for personal according to some authorities, retarded sales. economy is having its effect upon those re- This industry is seriously disturbed over the tailers who handle other than the necessities prospects of an excess-profits tax. Collections of life, and many are waiting to see the results are somewhat slower. Trucks are reported in of the Government's taxation policy and its good demand. effect upon their individual incomes. Manu- Building and building materials.—Building facturing establishments report a good volume enterprises have been uniformly curtailed, of trade, with the labor question growing more due to the future uncertainties and the high serious and the car situation somewhat allevi- cost of all structural materials. April showed ated. In the banking field there is but little a decrease in building and it is believed that activity; deposits are holding up well, and May will show a still greater decline. The discount rates are firm. Financial institutions cement-business was good up to a short time as well as the bond houses are working for ago, but the difficulty in securing shipments of the success of the Liberty Loan, and an active stone, gravel, brick, sand, etc., will seriously campaign toward this end is being conducted affect sales in this line. Collections are good. throughout this district. Since the money to The brick business is not as active as during be derived from the sale of these bonds will be the same period last year, and the piincipal spent almost entirely in the purchase of sup- difficulty seems to be a shortage of freight cars. plies in this country, there can hardly fail to Coal— -There is an insistent demand from all be great business activity, accompanied by quarters for coal with consumption a little in some shifting in bank deposits without any excess of production. Public retail orders at decrease in their aggregate. this time are being accepted subject to delivery Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

472 FEDERAL RESERVE BULLETIN. JUNI 1,1917. within the course of the next few months, and Hardware.—There is some indication of a present shipments are being distributed with slowing up in business, but on the whole cona view to placing the available tonnage over ditions are satisfactory, and the high cost ot as wide a territory as possible. goods has not materially affected the demand. Distilling and brewing.—Distilleries are oper- In a number of lines goods are difficult to seating only part time, in view of the movement cure and prices continue to advance without toward prohibition, but the sale of whiskies is any prospect of a change as long as the war reported exceptionally good, caused partly by lasts. Collections are fair. the fact that many States will prohibit the Leather.—There is very little activity in the sale of liquor after July 1. Withdrawals from shoe and leather trade and many customers the bonded warehouses for the fiscal year 1917 are restricting their purchases to immediate are expected to be heavy. Breweries have needs. Labor is scarce, and some large conexperienced a quiet business owing to the cold cerns are forced to curtail their production. weather, and this, together with the increased The prospects are for quiet business for the cost of material and prospective taxes, makes next few months. for a poor showing in earnings. Live stock and packing.—Live-stock receipts Dry goods.—Immediate business has suffered are running about normal and prices are strong. during the past few weeks, due to the high cost This condition is bringing to market a good supof food and provisions, unseasonable weather, ply of cattle, and those who wish to secure cattle and the tendency toward economy. Collec- to put on pasture are experiencing some diffitions are fairly good. Orders for fall are sat- culty. The immediate demand for packers' isfactory, but the retail merchants seem to products is light, clue to the stocked-up conhave heavy stocks of goods which it will be dition of the trade and the present wave of necessary for them to dispose of, and until this economy. The foreign demand is strong. is accomplished their purchases will probably By-products are in good demand with the exbe of the hand-to-mouth variety. Whole- ception of glue, sheepskin, and leather. salers do not care to quote prices for next year, Lumber.—The decrease in building operations owing to the difficulty in forecasting the has had its effect upon this line, but prices are situation. strong. On the whole, a satisfactory condition Furniture.—Orders are scarce, and one report seems to exist in this territory, and, while a states that the unfilled orders on hand with temporary easing up is apparent, the prosmembers of the Furniture Association are the pects are fayorable. lowest they have been for the past year. Mail orders.—Sales in this district continue to Grain.—The grain exchanges are in consid- show an increase. erably better shape than before regulations Pianos.—Sales have dropped off considerwent into effect which stopped speculative ably, due to the prospects of taxation and the accumulation. economy propaganda. Materials and labor are Groceries.—Sales, measured both in quantity scarce, and collections normal. of merchandise and money, show a substantial Shipbuilding.—This line is very active, with increase over previous figures. Collections are capacity bookings for this year and through good and being followed closely by the whole- 1918. The principal difficulty is encountered salers on account of the high cost of goods, in securing the necessary labor and materials. which necessitates the use of a larger capital Steel.—The domestic demand for steel conthan ever before to finance even a small busi- tinues active with prices strong. Mills are ness. The present volume is attributed to pushed to capacity and Government orders are speculative purchases on the part of the public, being given preference. This may delay shipand a decrease in business with recession of ments to some of the regular customers who prices is looked upon as a probability after the will not get their allotments as promptly as present movement subsides. desired. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 473 Watches and jewelry.—Sales are reported extent distributed to the general public and considerably ahead of last year, and manufac- should materially assist in floating the Liberty turers and importers find difficulty in keeping Loan. up with their sales. There is a satisfactory Details of the Liberty Loan were announced volume of business in sight but there is con- a few days previous to this writing. The organsiderable question as to the profit, owing to ization of the banking interests of the district taxes and increased overhead expenses. has now been completed; the necessary steps Wool and woolens.—There appears to be a have been taken to organize other interests shortage in raw wool, and this, together with throughout the district, and a campaign for the the heavy demands for military purposes, has success of the loan, under the motto, "A Libcreated an active market at extremely high erty Bond in Every Home," which originated prices. Mills are busy, and Government re- in f3t. Louis, is welt under way. One month quirements have forced the cancellation of ago mention was made of various campaigns many trade orders. Labor shortage and de- then being conducted with a view to larger creasing wool supplies are interfering with the production of foodstuffs, and it is felt that conknit goods manufacturers. siderable progress has been made. Other cam- Clearings in Chicago for the first 21 days of paigns have now been inaugurated for the con- May were $1,583,000,000, being $385,000,000 servation of food supplies. Meatless days have more than for the corresponding 21 days in May, been introduced in the restaurants and hotels 1816. Clearings reported by 18 cities in the of St. Louis, and there has been a general appeal district outside of Chicago amounted to $304,- to the public for elimination of waste. 000,000 for the first 15 days of May, 1917, as The volume of sales in all wholesale lines concompared with $223,000,000 for the first 15 tinues to be very large, but increases noted this days of May, 1916. Deposits in the eight cen- month are smaller than those reported for a tral reserve city member banks in Chicago number of months past. This is attributed, in were $728,000,000 at the close of business May the lines supplying what may be called the 21, 1917, and loans were $496,000,000. De- necessities of life, to a general feeling of conposits show a decrease of approximately servatism and in part to the cold and rainy $12,000,000 over last month and loans a de- weather which was prevalent throughout the crease of approximately $4,000,000. district up to the middle of May. Dry goods jobbers report that the demand for merchandise DISTRICT NO. 8—ST. LOUIS. is not so insistent as it has been for months Business interests in this district have held past. Wholesale millinery houses have been their own in the face of the preparations for our affected by the cold, wet spring. Manufacactive participation in the war. Reports from turers of women's and men's ready-to-wear all lines of business, other than those directly garments have had a very satisfactory season, connected with war munitions, indicate a some- but the distribution of this merchandise to the what quieter condition than has been reported general public has been delayed. The hardfor the past few months. Reports all indicate ware interests report a strong and active trade. a very healthy condition, and there is a remark- Retail merchants in all lines seem to have been able feeling of confidence in the future, but at affected by unseasonable weather up to the the same time war preparations have had a middle of May, but business since that date is sobering effect. Business men are operating on reported to be extremely satisfactory, and sales a somewhat more conservative basis. for May will show increases over a year ago. The certificates of indebtedness which were The gains in dollars now reported seem to be subscribed for by member and nonmember entirely due to the increased cost of merchanbanks in this district have been to a very large dise and not to an increase in the quantity Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

474 FEDERAL RESERVE BULLETIN. JUNE 1,1917. shipped. The buying power of the general Favorable reports are received from the public continues at a high level, but high prices tobacco districts of Kentucky and Tennessee. are beginning to have their effect on sales, par- The cotton crop in the belt is undoubtedly ticularly on articles that the public can con- two or three weeks later than usual. Cultivaveniently <lo without. tion has been retarded. In some sections re- To sum up, it may be said that there has been planting is necessary and the high cost of seed a slight slackening in general business, due in makes this a hardship. In an effort to overpart to the unseasonable weather, in part to come the ravages of the boll weevil, farmers the increased cost of merchandise, and in part have endeavored to plant a large percentage of to the campaign for economy. Index figures their acreage in early maturing varieties. The on the cost of living again show an advance. high cost of provisions and the scarcity of labor Reports from Louisville indicate that the will undoubtedly increase the cost of produclumber trade has been somewhat handicapped tion of the 1917 crop, and this may be a factor by high prices, but manufacturers of ax han- affecting the acreage planted, although present dles, etc., report heavy orders on hand, although prices are very tempting to planters. Reports this is usually their dull season. on business in general in the cotton belt are The temperature for the last half of April and satisfactory, one correspondent writing as folthe first half of May was below the normal lows: "We are glad to report that our farmers throughout the entire district. The rainfall are planting a good part of their land ingrain, during this same period, generally speaking, and, notwithstanding the abnormal conditions was above the normal. The agricultural devel- which confront us, we feel safe in giving liberal opment has accordingly been somewhat re- credit to our customers, as we have done in tarded, but rain was needed for sufficient sub- former years." The stock of cotton on hand in soil moisture and with favorable weather con- Memphis on May 18 is still unusually large for ditions from now on it is believed that the agri- this time of the year. The stock on this date cultural outlook will improve. amounts to 297,000 bales as compared to On May 8 the Government issued its report 136,000 on the same date in 1916, 120,000 in of condition of crops as of May 1. The wheat 1915, and 60,000 in 1914. report showed an unusually large percentage The May 1 condition of rye as reported in of acreage abandoned and an unusually low the Government crop report of May 8, is satispercentage of condition for the country at large. factory. The acreage planted this year in the The reports on the wheat crop in the States States within this district is generally larger wholly or in part within this district were some- than that harvested in 1916; the percentage what more encouraging than the reports from of condition is fairly satisfactory, showing an other sections of the country. The percentage improvement as compared to April 1. of acreage abandoned in the large wheat-pro- Spring plowing and spring planting is well ducing sections of the district was on the aver- advanced, the percentages for the States within age smaller than in other sections of the coun- this district being generally above the 10-year try; the percentage of condition showed an average. improvement as compared to the April 1 re- Reports indicate that the corn crop is develport; and the forecast for the 1917 harvest oping satisfactorily. South of the Missouri from the May 1 condition was larger than the River considerable corn is up, and in some secfinal estimate for 1916. It can not be said that tions fields have been once worked over. The the condition of the wheat crop is satisfactory cold, wet weather, which was prevalent up to a in this district; at the same time it is believed few days ago, has retarded the growth. Some that the prospects are better than have been counties report that corn had rotted in the hitherto supposed. ground and replanting was necessary. In an Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1<>17. FEDERAL RESERVE BULLETIN. 475 effort to increase the production of foodstuffs, The bond market is very quiet. Investors the growing of alfalfa on cut-over stump land as well as bankers have practically withdrawn in Arkansas is being introduced with consider- from the market. Bond houses in the district able success. have offered their services to the Government A large acreage of potatoes has been planted and the efforts of these organizations are being and the crop is coming up well. Truck gardens expended on the Liberty Loan. Commercialare not so far advanced as is usual at this time paper rates have advanced again. Best names of the year. With seasonable weather from are now quoted at 5 per cent and other names now on they should develop rapidly. The at 5J, as compared to 4-J to 4f a month ago. movement of the strawberry crop is now in full There is a fair supply of paper on the market, swing. Shipments from the Arkansas district and in fact the supply seems to exceed the are very large and shipments from Tennessee, demand. Although a large amount of com- Kentucky, and the southern sections of Mis- mercial paper will have to be refinanced within souri are now beginning to appear in volume. the next 30 days, brokers generally report a Lettuce, cabbages, onions, and other truck-farm quiet business. City banks are not buying, and products are being shipped from the southern country banks are buying only in small quanportions of the district. The outlook for the tities. Bank deposits have fallen off somewhat small-fruit crops is generally good, the apple in the past 30 days, and banks generally seem outlook being particularly bright. to be husbanding their resources in an effort to The St. Louis National Stock Yards reports aid the Government by liberally subscribing to an increase in the receipts of cattle and hogs the various issues of temporary Treasury cerfor the month of April and a decrease in the tificates and by their desire to help place the receipts of sheep and horses and mules. For Liberty Loan. Bank rates to customers have the first time in several months the price of hogs accordingly advanced, prime demand loans in has not shown a material increase. St. Louis now being quoted at approximately Building permits in Louisville, Little Rock, 5 per cent with rates in other smaller centers in and Memphis show a decrease for the month of the district somewhat higher. April as compared with April, 1916, while St. DISTRICT NO. 9.—MINNEAPOLIS. Louis shows an increase for the same month. The appeal to the farmers of the Ninth Fed- The high cost of building materials is having a eral Reserve District to plant heavily and sedeterrent effect on building activity, and that cure a record-breaking acreage this year met in turn has affected the business of those supwith a prompt and effective response. Seeding plying building materials. during the last half of April was interfered with Postal receipts in the four large cities of the by bad weather and was somewhat delayed; district confirm the general slacking up of during the first half of May conditions were very business, Little Rock, Louisville, and St. Louis favorable, and the farmers were able to accomshowing a decrease as compared to a year ago plish a very large amount of work. Reports and Memphis showing a slight increase. now coming in indicate that wheat acreage of Compilations of gross and net railroad earn- Minnesota, North and South Dakota, and Monings which are now available again show the tana will be very close to normal in spite of discrepancy between the increase of gross and severe damage from hail, rust, and hot weather net earnings. The increased cost of material last year. and labor is affecting the net earning of many Organized work to encourage heavy planting of the railroads. Railroads in this district have was especially successful in North Dakota. joined in the national movement to conserve Banks everywhere throughout the district have their resources and equipment for Government been very liberal with farmers and active in enpurposes. Rules and regulations with that couraging them to take a personal interest in object in view are now being put into effect. increased crop production, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

476 FEDERAL RESERVE BULLETIN. 1, 1917. There will be a large increase in barley and Colorado,—Winter wheat is generally good oats, and it is probable that the final reports on and recent moisture has benefited all crops. flax will show an increased acreage. Corn A materially increased acreage is being cultiplanting is actively in progress in Minnesota vated. Sugar beet planting is well under way and South Dakota, and an increase of 20 per and conditions are favorable. cent to 30 per cent in acreage is predicted. Kansas,—April rainfall was almost as much Winter rye is in fine condition. Wheat is ob- as during the five previous months combined, taining a very favorable start, and although the causing a general improvement in all crops. cool nights have retarded the germination of State and Government estimates on this year's the seed to some extent conditions have been wheat production agree upon approximately right to give the plant a good start, and the 40,000,000 bushels. The highest estimate reroots have gone deep into the ground instead ceived is 60,000,000 as against last year's final of spreading along the surface. estimate of 97,500,000. Sunshine and warmth Planting in southern Minnesota and South are the greatest needs at the present time. Dakota is from a week to 10 days late, but Alfalfa is looking well in the eastern half of the throughout the remainder of Minnesota and State and getting started in the western. Au- North Dakota and Montana grain has gone into thorities claim that there is a good supply of the ground at about the same season as in pre- seed for this season. The gardening area is said vious years. The crop outlook is generally to have been doubled. favorable, and with satisfactory weather con- Missouri.—The abandoned wheat acreage ditions large yields should be obtained this will probably amount to between 15 and 20 per year. cent, while indications are that the corn acreage Business conditions the district over have being planted is 40 per cent above the average, been generally satisfactory. There has been being approximately 7,368,000, an area greater some hardening of rates, and country banks than the whole of Belgium. The wheat forehave been experiencing quite a heavy demand cast on May 1 exceeded last year's final estimate as a result of the appeal to plant larger acre- by approximately 3,000,000 bushels. ages. This demand has reflected itself on city Nebraska.—Winter wheat has improved. institutions, but funds have been promptly pro- Reliable estimates are that not to exceed 50 vided where needed and farmers have had libper cent has been killed, whereas earlier estieral support from their banks. mates ran as high as 75 per cent. In many The business outlook is favorable, and localities tractors are being operated 24 hours although construction has been somewhat rea day by two or three shifts. The acreage of tarded by the high price of materials the genspring crops has been increased from 15 to 20 eral opinion is that prosperity will continue and per cent over all past seasons. that the district will enjoy a good year. New Mexico.—The commissioner of public DISTRICT NO. 10—KANSAS CITY. lands has granted a permit to eveiy holder of a Agriculture.—The labors of the various State lease of State lands for grazing purposes to use committees for the conservation of agricultural such lands for general farming without increase products are meeting with enthusiastic response in rental during the period of the war, covering from all quarters. Publicity bureaus in charge roughly the right to farm 7,000,000 acres of of experts are reaching all classes through the land, a large portion of which is adapted to press and by direct propaganda. The past month some form of cultivation. Liberal permits have has been abnormally cold and wet,retardingf arm also been granted for the farming of tracts in work, but some improvement in growing crops the United States timber reserves. is noted. Brief reviews from various States OMalioma.—Only 15 per cent of the wheat wholly or partly within this district follow: acreage has been abandoned, and there has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDEBAL RESERVE BULLETIN. 47' been material improvement in the crop remain- Oil.—Contrary to predictions, the price of ing to be harvested, the growing condition of crude oil in the mid-continent field remains which, on May l,was 71 per cent, or 7 points unchanged, while the shortage of casing and lower than at the same time last year. Indica- scarcity of rigs lias reached an acute stage, tions are, however, that Oklahoma will produce causing a number of shutdowns. Both Kan- 31,800,000 bushels of wheat this year as against sas and Oklahoma reported increases in com- 29,585,000 last year. pleted wells in April over March, but a net Wyoming,—The supply of snow remaining in loss in new production. Rapid development the mountains at the close of April was unusu- in Wyoming continues. ally large, the depth averaging 42.6 inches, or Lumber and construction.—Lumbermen are 75 per cent greater than a year ago, assuring predicting a shortage for the retail trade, due an abundant flow of irrigation water if weather to the great demand of the Government for conditions for early summer are normal. There building material for ships and Army barracks, is an improved prospect in winter wheat, and but some insist that there is plenty of lumber it is now estimated that only 10 or 15 per cent at producing points and that the supply will of the crop will be plowed up. continue adequate regardless of the Govern- Live stock,—The general trend of prices ment's requirements, the real problem being the for all classes has been upward, the highest question of transportation. There is a healthy level ever known prevailing. The movement and insistent demand for yard stock for gento the markets increased materially and will eral building purposes. Many large firms have unquestionably be reflected in smaller receipts withdrawn from the market because they can later in the season. Unseasonable weather has not furnish the stock. Order files are the caused a severe lamb loss in Wyoming, while largest ever known, and until most of these many of those surviving are in poor condition. book orders are filled but little new business Wool brought the highest price ever paid, from can be handled. Local sash and door factories 45 to 50 cents a pound. There has been notice- are running full force, but orders are not able betterment in grazing conditions. Local quite so heavy as they were 30 days ago. supplies of cut meats on May 1 showed a de- Seven of the twelve important cities reporting crease from 50,000,000 pounds on May 1, 1916, show slight decreases in valuation of building to 46,500,000 pounds. Practically every pack- permits for April, as compared with the same ing center shows a decrease in hog packing for month last year. However, the six cities the past two months as compared with the same showing increases, in some cases important, period last year. comprise the largest cities in the district. Mining.—Colorado mines producing base "Unquestionably, general building operations metals made a record production during the are not so active, due to the scarcity of month of April, gold and tungsten showing material. some falling off, owing to the increasing cost of Labor.—In spite of the fact that the past production. In the Missouxi-Kansas-Oklahoma month has witnessed an unusual number of field operators are claiming that unless materi- voluntary wage increases and bonuses in varially advanced prices occur soon, there will be ous lines of industry, there have been increasmany shutdowns because of the increasing ing demands on the part of labor, by reason of prices of everything that enters into produc- the increasing cost of necessities, with a number tion. However, if the remaining eight months of strikes and rumors of others. The disprove as productive as the first four, all records turbances reported, however, are scattered will be broken in the production and valua- and do not affect any considerable number of tion of zinc, lead, and calamine ores in this men in any instance. The shortage of labor field for the current year. is becoming more and more apparent and the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

478 FEDERAL RESERVE BULLETIN. JUNE 1, 1917, farm Labor problem particularly is receiving centers being 50.2 per cent, the greatest gains much attention. It is estimated that 20,000 occurring in Oklahoma. Post-office receipts harvest hands will soon be needed for Kansas are reported in satisfactory volume. Bank deand Oklahoma. posits show a healthy gain over the same period Wholesale and retail.—Flour mills are m a year ago, while the largest city banks show active operation and current shipments of something of a decrease in deposits and an inproducts in April were far above normal for crease in loans since March 5, as is usual in the the season, the activity being due to excessive spring of the year. Desirable loans continue buying of flour by housewives, which has now in demand throughout the district, but there fallen off to some extent by reason of high is evidence of a stiffening in discount rates, prices and the fact that millers are discourag- General.—The claim of a shortage of fooding new buying as much as possible. stuffs and the efforts put forth to induce Local distributors of automobiles report that economy are said by many to have been carfrom many quarters dealers have been taking ried to extremes, and critics of this policy, more cars than called for by their contracts, in believing that legitimate business has been unspite of the diminished crop prospects and the favorably affected, axe urging the plan of fact that practically all cars represented in "Business as usual." There has been no disthis territory have raised their prices, some of cernible abatement in the volume of general them two or three times in the past year. business, as indicated by bank clearings and The widespread economy propaganda has other business barometers, and the attitude undoubtedly had its effect upon dealers in dry of commercial interests is by no means one of goods, while unseasonable weather has had a apprehension. Government purchases in varifurther depressing tendency. Wholesalers re- ous directions are adding materially to the port a good increase in orders for fall delivery. normal COD sumption. A well-organized movement to increase the DISTRICT NO. II—DALLAS. cultivated area, together with the abandon- Since our April letter there has been a conment of considerable wheat acreage, has siderable change in business conditions throughresulted in the greatest demand for corn-tillage out the district, and while not particularly tools ever experienced, with a decided shortserious the situation is materially affected by age quite apparent. Many houses report havthe war. All sections report the growth of ing shipped out as much or more of second conservatism. The uncertainty of conditions order goods as they did upon the original very far ahead has promoted economy among contracts. the people. The extraordinarily high prices General April purchasing activities are reof practically every commodity, especially ported as practically stationary with April of foodstuffs, have caused many people to relast year, with a slight decrease from March of strict their purchases, and in the main exthis year, while collections continue satisfacpenditures are being confined to the necessities tory. of life, rather than luxuries. Summed up, Financial.—While reports indicate a most therefore, general business conditions are less satisfactory increase in the gross earnings of favorable than a month ago. For at least a railways, the effect of rising expenses is remonth after war was declared "business as vealed in decreases in net earnings in several usual7' seemed to be the prevailing principle. instances. The latter part of May has shown a slowing Well-maintained business activity is reflected by the largest total clearings ever recorded for down in many lines. April, with gains of from 10.2 to 178.6 per Unseasonable weather the early part of the cent, the average for the 15 most important month has caused a curtailment of retail trade. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESEKVE BULLETIN. 479 and it is below normal. Retailers are hopeful certificates of indebtedness, have been of first that with warm weather the trade will again importance in finance. The banks and indibecome active. viduals are responding to the call of the Gov- The wheat belt of the district was benefitted ernment in the present situation, and all seem by a heavy snow and good rains on May 6. disposed to do their best in making the bond Unusually cold weather prevailed, but the issue a success. Demand with member banks moisture materially helped grain. According is rather active, and their loan account shows to reports, the condition of the wheat and oat a steady increase. The seasonal slump in decrop has materially improved within the last posits is at hand, and a corresponding decrease two weeks, and at this time prospects are ex- in reserves is noted. Notwithstanding the actcellent for a good yield. In our April letter ive demand for money, there is no evidence of we estimated that Texas would produce any stiffening of rates, and they remain easy. 20,000,000 bushels of wheat: 25,000,000 bush- The sale of the Government's bonds has had els of oats, and 150,000,000 bushels of corn. the effect of causing inactivity in other bond After carefully analyzing the reports received offerings, and dealers report few inquiries and we believe these figures conservative. little trading. Cotton has been retarded by the cold, back- Demand with this bank is increasing daily, ward spring and cold nights. As it is par- and within the past month our loans show an ticularly a hot-weather plant the condition of increase of some $800,000. The larger part of the crop at the present time is not especially the paper offered consists of notes of farmers', encouraging. Our advices are that much of fall maturity, and live stock paper. Bank the staple has died because of unfavorable clearings for April show an increase of 36 per weather, and that replanting has been necessary cent over the same month last year, and conin many sections, especially Oklahoma. There tinue at record figures. The totals for April at is an increased acreage in cotton over 1916, but the principal cities were, 1916, $134,601,572; with the heavy acreage planted this season in 1917, $182,257,831. diversified crops and foodstuffs farmers will be Lumber continues in good demand, at admore self-supporting than in many years past, vanced prices. The car situation, already seand be less dependent upon returns from rious for several months past, shows no imcotton. provement. Building operations, as reported The markets of the district are well supplied by the principal cities of the district, for April with vegetables, for which there is an excellent show a decrease in number, but an increase of demand at good prices. The effects of the 36 per cent in the valuation of permits issued. home gardening campaign are now being felt, The most unfavorable feature in the oil inand the producer is getting good returns from dustry at this time is the high price and his efforts in this direction. scarcity of materials necessary in production. Uncertainty as to war conditions is affecting The declaration of war had the effect of temwholesale lines. There is a tendency to buy porarily suspending export shipments from very conservatively, and high prices prevent Gulf ports, but this has practically all been any buying of unusually large stocks. The made up by heavier shipments later. Loadvolume of trade, according to reports, is about ings of refinery products by the Gulf Refining equal to last year. ^ There is some slowing up Co. alone, in the first half of April, amounted in collections in the trade. to 992,384 barrels; a gain of 344,789 barrels Government financing has taken precedence over the company's deliveries from its refinery over other matters in banking circles in the to vessels in the corresponding period in March. past 30 days, and the flotation of Liberty A great deal of the oil was for export. Operabonds, and the distribution of the Treassmy tions in the Petrolia and Holiday fields are Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

480 FEDERAL RESERVE BULLETIN. JUNE 1, .1.917. curtailed to a very great extent by the short- day than before the $20,000,000 was paid to it, age of water. payments having been made in eastern ex- There is no evidence of any unemployment change. of labor. The high cost of living, and the ad- Our hazard would appear to be not that vanced prices of all necessities has been gen- bank deposits may diminish under war financerally recognized by employers throughout ing but that they may expand too greatly, this section. With the harvesting season near enhancing the difficulty of readjustment after at hand, and the unusual demand for men for the war. If, for illustration, we assume that that work, there should be no unemployment our total expenditures last year were $25,000,in the near future. 000,000, and the Government now is to spend $10,000,000,000 this year for war, this latter DISTRICT NO. 12—SAN FRANCISCO. sum could be supplied either by curtailing our The offering of $2,000,000,000 Liberty Loan expenditures to three-fifths those of last year, bonds has commanded chief attention in the viz, to $15,000,000,000, and giving two-fiffchs, past month. If each person in the United viz, $10,000,000,000, to the Government, leav- States made equal subscription, the share of ing the combined Government and private exeach man, woman, and child would be $20, or, penditures the same as last year; or, we could on the average, $100 for each family. If ap- avoid curtailment and lend the Government portioned according to the amount of deposits $10,000,000,000, bringing the combined Govin banks, each bank would sell to its customers ernment and private expenditures up to an amount approximately equal to 10 per cent $35,000,000,000. This latter course would of its deposits (excluding deposits from banks). mean that we would this year pay $35,000,000,- This would aggregate $42,000,000 for San Fran- 000 for the total products of all the labor of cisco, $18,200,000 for Los Angeles, $8,000,000 the country which were paid for with $25,000,for Seattle, $6,000,000 for Portland, $3,300,000 000,000 last year, the total products probably for Spokane, $2,200,000 for Tacoma, and a to- varying but little in quantity. In other words, tal of $166,000,000 for the Twelfth Federal this would advance prices on the average 40 Reserve District. per cent. To curtail two-fifths would be a tax Apprehension that bank deposits will shrink equal to 40 per cent of all expenditures, but as a result of such financing seems ill founded. the price level would not be advanced and there Bonds will be paid for chiefly by checks on would be no Government debt. To increase banks, being a transfer of balances now at the the price level 40 per cent by disbursement of credit of individuals to the credit of the Gov- Government borrowings with undiminished ernment. When disbursed by the Government private expenditure would likewise impose a for services and materials the amounts will tax of two-fifths, since as a consequence a dollar reappear as deposits of individuals. Such a would on the average buy only 60 per cent as process will inevitably increase, not diminish, much as before. Besides this the resulting the total of bank deposits. No export of gold Government debt would entail }rears of heavy is involved. That payment for bonds may be taxation to pay interest and principal, and the a mere transfer of bank balances from one ac- higher price level would intensify the difficulcount to another and not a transaction in ac- ties of the period of contraction and readjusttual money is well illustrated by the fact that ment inevitably to follow the expansion. when the Federal Reserve Bank of San Fran- A middle course has been chosen, providing cisco recently received payment from banks war funds partly by taxation and partly by and individuals of $20,000,000 for Treasury bond issues. certificates sold them, the reserve bank had "Business as usual" would aggravate every 3,000 less gold at the close of business that evil growing out of a period of expansion, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 481 causing the Government to receive least value spring has been so cold and backward that it for its expenditures and hampering it at every has prevented planting a full acreage of spring point in the conduct of the war. Every econ- wheat. Private estimates indicate a total crop omy in the use of the product of labor and every perhaps 30 per cent below normal in amount. increase in the efficiency and output of labor The acreage in beans has been increased can not fail to be directly helpful to the Govern- about 50 per cent over last year, that in Caliment in its war efforts and will render easier fornia alone being estimated at 400,000 acres. the industrial and commercial readjustment Last year over 260,000 acres were in sugar after the war. There is no danger of unem- beets. The acreage this year has been largely ployment but it is inevitable that the diver- increased in Idaho and Utah. Last year Oresion of effort from channels of peace to those gon and Washington produced about 10,000,000 of war will occasion individual hardships. bushels of corn. This year 190,000 acres have Credit is easy and conditions are generally been planted as compared with 121,000 last favorable for the flotation of this district's year. A recent survey in California shows the share of Government loans. With such huge wheat crop about 90 per cent of normal, pasfinancing, temporary dislocations of funds can ture grasses 75 per cent, rice 130 per cent, and hardly fail to appear here and there, but the potatoes about normal. Secretary of the Treasury will deposit in A report from Idaho estimates that 120,000 member and nonmember banks the proceeds of acres in that State are planted in fruit, 115,000 payments on Liberty Loan bonds, withdrawing acres being in apples. Prospects for deciduous the funds as needed. Banks generally have fruits are for only moderate crops. Apricots exceptionally heavy reserves, but rediscounting and almonds have suffered from frost. Generwith the Federal Reserve Bank should unhesi- ally speaking, the increase of new acreage tatingly be availed of when required. coming into bearing will to a considerable Both to extend its service and as a safe- extent offset losses by frost. guard, it has been determined to establish Railroads are preparing to provide cars for branches of the Federal Reserve Bank at large shipments of fruit from California, 15,000 Seattle, Portland, and Spokane. Plans for to 18,000 being the estimate for deciduous the branch at Spokane are well forward. The fruit, 14,000 to 15,000 for Valencia oranges eligible State banks of that city have given (2,000 more than in any previous year), besides assurance of their intention to make appli- 10,000 for cantaloupes. cation for membership and the clearing-house A large salmon catch is anticipated this year banks have offered to employ the branch to because of the quadrennial run of the sockeye conduct the examinations hitherto conducted and the biennial run of humpback varieties. by the clearing house examiner, paying the It is said that 315,000 head of sheep are branch for this service an amount equal to the grazing on the Humboldt National Forest in present cost of conducting such examinations, Nevada, the largest number on any single it being assumed that the clearing house ex- national forest, while the largest number of aminer will be appointed branch manager. It cattle, 76,000 head, is found on the Tonto in is anticipated that Seattle and Portland will Arizona. Both cattle and sheep are commandoffer similar cooperation. ing extraordinary prices, and wool contracts The May 1 Government report estimates the have been made at 50 to 52J cents. winter wheat crop for this district at 39,2*50,000 Potash, formerly obtained from Germany, is bushels, against 53,330,000 last year and a five now being obtained from the kelp along the year average of 62,235,000. According to re- California coast, and while this means a much ports from the Spokane section last fall was higher cost, the availability commercially has unfavorable for planting winter wheat and this been demonstrated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

482 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. In California $2,000,000 worth of quicksilver Federal Eeserve Bank bought their acceptances was produced in 1916. covering the following importations: Rice from A Los Angeles shipyard has received an order China and South America; beans, raw silk, for eight steel vessels of 8,800 tons each. pongee, curios, surgical instruments, and but- The lumber output of this district during the tons from Japan; rubber from Java; cocoanut past year has amounted to. 9,070,000,000 feet, oil, hemp, buttons, hats, and cigars from the about 1,500,000,000 more than last year. Philippines; tea, cotton goods, toj^s, walnuts, Production of petroleum in California in carpets, and peanuts from China. April amounted to 269,085 barrels daily, ship- Loans and deposits of member banks in rements being 309,001 barrels. On April 30, serve cities in this district each expanded more 1917, stored stocks were 39,976,386 barrels com- than 25 per cent from May 1, 1916, to May 1, pared with 60,820,315 barrels on April 30, 1915. 1917. Pacific coast banks, particularity those of San The prospects at this time are for maximum Francisco, are steadily expanding their accept- industrial activity, but for only moderate crops, ance business. From April 1 to May 15 the with generally high prices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNK 1, 1917. FEDERAL RESERVE BULLETIN. 483 ACTUAL AND REQUIRED RESERVES OF NATIONAL BANKS, 1915 TO 1917. Tlio tables below and accompanying diagrams reductions on December 31, 1915, June 30, are based upon data shown in the Comptroller's 1916, and December 27, 1916, the dates of the abstracts of condition of national banks begin- Comptroller's calls following the transfers of ning with December 31, 1914, the date of call reserves to the Federal Reserve Banks. following the opening of the Federal Reserve Figures of required reserve are based entirely Banks. As is known, the Federal Reserve Act upon the amounts of net deposits carried by the prescribed certain minimum percentages of re- banks and indicate, therefore, most clearly the serve which member banks were required to degree of expansion of the several groups of keep in vault and with the Federal Reserve banks during the period under consideration. Banks, varying according to whether the banks On the whole, the progress of expansion is were located in central reserve cities (New shown to have been most pronounced for the York, Chicago, and St. Louis), reserve cities central reserve city banks, their required re- (present number fifty-two), or in places not so serves being 78 per cent larger on March 5, designated. Between November 16, 1914, and 1917, than at the close of 1914, while in the case November 16, 1916, the percentages of reserve of the reserve city banks the increase in rewhich member banks outside of central reserve quired reserve is 64 per cent and in the case of cities had to maintain at the Federal Reserve country banks only 42 per cent for the same Banks were increased three times. Since Sep- period. A comparison of the aggregate figures tember, 1916, member banks have been per- of required reserve with the combined amounts mitted to carry in the Federal Reserve Banks of vault reserve and reserve deposits with the any portion of their reserve formerly required Federal Reserve Banks held on the several to be held in their own vaults. These provi- dates indicates that except during the middle sions, in combination with the considerable of 1916 these amounts were but slightly below growth of net deposits, account for the almost the amounts of total reserve required, and for continuous increases shown in the amounts due the most recent dates even in excess of these from the Federal Reserve Banks to all three amounts. This favorable situation was due, groups of national banks. Those amounts have however, to the fact that the central reserve city more than doubled in the case of central reserve banks have been and are at present maintaincity banks, and have nearly quadrupled in the ing vault reserves as well as reserve deposits case of national banks outside these cities. with their Federal Reserve Banks largely in Vault reserves show considerable increases excess of reserve requirements. only in the case of central reserve city banks, It is evident, however, that in case the presnational banks in reserve cities reporting prac- ent law is changed and a greater centralization tically no changes in their vault reserves, and of reserves at the Federal Reserve Banks is country banks a practically stationary condi- ordered, the banks outside the central reserve tion during 1915 and but slight increases since. cities will be able to effect transfers of reserves The effect of the transfers of reserves is reflected to the Federal Reserve Banks without reducalso through the changes in the amounts due ing materially their deposits with correspondfrom approved reserve agents, which show large ents at the central reserve cities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

484 FEDERAL RESERVE BULLETIN, JUNE 1, 1917. Gold and total vault reserves, amounts due from Federal Reserve Banhs and from approved reserve agents; also required reserves, by classes of national banks, 1915 to 1917. [From Comptroller's abstracts of reports of condition of national banks. Figures expressed in millions of dollars.] ! Gold reserve. Other vault reserve. Total vault reserve (1+2). Due from Federal Reserve Banks. U Banks Coun- in cenm re try Total tral retralre-l cities.banks. serve sss. cities. Dec. 31,1914. 131 Ill 127 125 Mar. 4,1915.. 173 115 125 413 145 Mayl, 1915.. 213 110 123 446 144 June 23,1915. 260 117 126 503 124 Sept. 2, 1915., 299 114 128 541 146 Nov. 10,1915. 315 115 134 564 121 Dec. 31,1915.. 275 111 132 518 128 Mar.'/', 1916.., 280 120 138 538 134 May 1,1916.. 236 113 140 489 129 June 30,1916. 228 113 140 481 122 Sept. 12,1916. 220 126 152 498 106 Nov. 17, 1916. 244 134 150 528 107 Dec. 27,1916.. 230 122 153 505 111 Mar. 5,1917... 272 131 152 555 103 Total (3+4). Due from approved reserve Total (3+4+6). Reserve required. B t i c s r n i a e a t c n i r l e v e k r s n e e s . - -B c i i a n t n i r e k e s s - .b C a o t n r u k y n s - . Total. B c i s n i e a t r n i r e v e k s e - s . b C a t o r n u y k n s - . Total. B t i c s r n i e a a t r i c n l e v e r k s e n e s . - -B i s n e a r n r v e k i - s ! I Total. B t i c s r n i e a a t r c n i l e v e k r s e n e s . - -B c s i i a e n t n r i r v e k e s e s - .b C a o t n r u k v n s - . Total. Dec. 31,1914. 239 295 923 185 397 582 424 : 1,505 306 281 371 958 Mar. 4,1915... 472 246 290 1,008 281 466 747 472 527 i 756 1,755 345 298 379 1,022 Mayl, 1915.. 511 237 277 1,025 292 456 748 511 529 ' 733 1,773 366 305 375 1,046 June 23,1915. 557 252 293 1,102 301 436 737 557 553 ! 729 1,839 377 309 375 1,061 Sept. 2,1915.. 619 244 294 1 157 334 475 809 619 578 : 769 1,966 404 315 381 1,100 Nov. 10,1915. 648 253 311 1,212 372 522 648 625 : 833 2,106 473 342 401 1,216 Dec. 31,1915., 605 271 334 1,210 305 528 605 576 862 2,043 479 345 408 1,232 Mar. 7,1916... 632 287 345 1 264 406 615 1,021 632 693 . 960 2,285 497 374 423 1,294 Mayl, 1916... 578 . 277 349 1,204 351 603 954 578 628 ; 952 2,158 487 375 429 1 291 June 30,1916. 553 297 383 1,233 299 543 842 553 596 • 926 2,075 467 376 431 1 274 Sept. 12,1916. 542 339 416 .1,297 320 616 936 542 659 1.032 2,233 479 399 465 1,343 Nov. 17,1916. 585 388 464 1437 338 606 ! 1,034 585 726 I'160 2,471 513 437 505 1,455 Dec. 27,1916.. 584 416 492 1,492 267 678 i 945 584 683 ; 1,170 2,437 495 437 511 1 443 Mar. 5,1917... 646 422 495 1,563 328 718 ! 1,076 646 750 1,243 2,639 546 460 526 1,532 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

•TUNE 1, 1017. FEDERAL BESEBVB BULLETIN. 485 DISCOUNT OPERATIONS OF THE FEDERAL RESERVE BANKS. Discount operations of the Federal Reserve Medium-size bills (i. e., in denominations of Banks during April totaled $50,055,801, com- $1,000 to $5,000) constituted about 24 per pared with a monthly average of $22,480,385 cent of the paper rediscounted during the discounted during the first quarter of the year, month, compared with about 50 per cent in and $11,521,500 discounted during April, April, 1916. Small bills (in amounts up to 1916. Of the total discounts for the month, $250) constituted about 22 per cent of the $19,883,579 was in the form of member banks' number, though only about one-half of 1 per collateral notes, as against a monthly average cent of the total amount of paper rediscounted of $10,425,973 for the first quarter of the during the month, Philadelphia reporting the present year. Nearly one-quarter of the dis- largest number of these small bills, largely counts for the month is reported by the Rich- trade acceptances. mond Bank, about 20 per cent by the Boston About 70 per cent of all the paper, including bank, and about 14 per cent by the Cleveland collateral notes, discounted during April, was bank. Fifteen-day paper constitutes over 75 15-day paper (i. e., maturing within 15 days per cent of the Richmond bank's, about 92 from the date of discount with the Federal per cent of the Boston bank's, and about 96 Reserve Bank); less than 8 per cent was 30per cent of the Cleveland bank's discounts for day paper; nearly 15 per cent, 60-day paper; the month, the greater part of the short-term and less than 6 per cent, 90-day paper. Agripaper being in the shape of member banks' cultural and live-stock paper maturing after collateral notes discounted for the larger mem- 90 days from date of rediscount with the Fedber banks in the respective Federal Reserve eral Reserve Bank (six-month paper) figures cities. to the extent of $996,804, or less than 2 per Aggregate discounts for the month include cent, in the total discounts for the month. $678,022 of trade acceptances (two-name During the four months ending April of the paper) discounted by eight reserve banks, and present year the Federal Reserve Banks dis- $856,805 of commodity paper, practically all counted a total of about $2,592,000 of sixbased on cotton, discounted by three reserve month paper, compared with $5,491,800 and banks. Over three-fourths of the trade accept- $4,320,400 of this class of paper discounted ances and nearly all the commodity paper are during the same period in 1916 and 1915. reported by the Richmond and Atlanta banks. On the last Friday in April the banks held The total number of bills discounted during a total of $35,042,056 of discounted paper, April, exclusive of 115 collateral notes, was compared with $20,106,182 about the end of 6,202, averaging in size $4,865, compared with March, and $21,448,000 on the corresponding about $3,800 in March, 1917, and $1,640 in date in 1916. Of the total held about the close April, 1916, indicating a relatively large in- of the month under review, $3,135,751 was crease in the amount of the larger-size bills agricultural paper, $2,194,217 live-stock paper, discounted during the month. As a matter of $21,805,509 industrial and commercial paper, fact, over 55 per cent of the paper rediscounted and $7,906,579 member banks' collateral notes. (i. e., exclusive of collateral notes discounted Over 60 per cent of the agricultural paper of with the Federal Reserve Banks) during April all maturities was held by the Richmond, was paper in denominations of over $10,000, Chicago, and Dallas banks, and about 60 per chiefly 15-day paper, presented by the larger cent of the live-stock paper by the Dallas bank. banks with the view of securing additional Of the 7,634 member banks reported at the funds to subscribe to Government securities. end of the month, only 384, or slightly over 5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

486 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. per cent, availed themselves of their discount was 184, as against 312 in April, 1916. Boston, privileges during the month. The number of New York, Cleveland, and San Francisco are member banks in the three southern Federal the only banks which report larger numbers of Reserve 'Districts rediscounting during April discounting members than for April, 1916. Bills discounted by each Federal Reserve Bank during April, 1917, distributed by sizes. NUMBER OF PIECES AND AMOUNTS. Over 85,000 to 810,000. 31 857,534 157 $757,730 $928,530 24^352! 24 43,219 62 307,200 162,2811 27,124i 64 132,919! 87 371,859 248,274! 6,9211 27 51,492 73 348,286 431,552j 333,9581 241 410,771 194 803,048 870,499) 47,240! Ill 197,681! 84 332,157 311,950 4,095 30,069! 51,4351 70 122,896! 452,880 324,956 2,055 31,3691 44,157} 46 79,277! 168 817,613 559,942 1,501, 13,573. 51,690! 105 186,095! 141 630,317 669,495 35| 6,515 25,721! 49,024! 30 46,267! 18 67,019 63,055 1591 27,264! 114!39,510: 82,610 109 181,509! 119 483,186 291,859 3| 668 14! 6,231! 11,248 29 54,100! 48 219,765 191,323 Total S95J33,052J 750130,183 8791335,133 836 648,653 88711,5,5i63,7601,249 5,591,060 590 5,053,716 Percent | O.lL... 0.4 ....! 1.1;.... 2.2.... 5.2| 18.5 ....; i6.8 Member banks' collateral notes I 22,700 121 110,879 i Bills discounted during the month of April, 1917, and 1916, and the four months ending April, 1917, and 1916, distributed by classes. Col- Trade Com- All Col- Trade Com- ! All . Banks. lateral accept- modity other dis- Total. Banks. lateral accept- inodity • otherdis- Total, notes. ances. paper. counts. notes. ances. paper. ' counts. Boston 32,024.000 S69,926 87,855,496 89,949,422 Dallas §170,000 :S1,696,427 81,866,427 Now York 1,027,000 10,452 1,401,7711 2,439,223 San Francisco 6,000 85,197 81,363i 692,327 704,887 Philadelphia. 1,307,7001 24,199 1,053,5221 2,385,421 Cleveland 4,110,000! 823... 2,860,589] 6,971,412 Total April, 1917.. 19,883,579 678,022i 856,80528,637,395150,055,SOT Y A i t i l o a h n m ta ond 8,9 7 3 3 6 5 , , 0 0 0 0 0 0 ! ! 3 1 2 9 3 5 , , 7 6 7 0 9 0 ! ; * i 8 2 6 4 1 3 1 , , 8 6 2,2 7 9 9 3 3 , , 1 3 2 8 1 9 1 ! 1 2 1 , , 1 9 6 6 4 7 , , 5 8 0 2 9 2 T T o ot t a a l l A J p a r n il . , - A 19 p 1 r 6 ., . ' 240,000:1,370,700; 9,910,800:11,521,500 Chicago 50 000:. ! 3,176,4311 3,226,431 1917 ) 14,115,317 :59,372,23ljll7,496,9S7 St. Louis 1,377,8791 48,046;. 2,507,430; 3,933,355 Total Jan.-Apr., Minneapolis.. 140,000' i. 3,962,497j 4,102,497 1916 1,229,233 6,747,963 !31,711,204139,688,400 Kansas City.. 344,3951 344,395 1 All cotton paper. Amounts of discounted paper, including member banks'* collateral notes, held by each Federal Reserve Bank on the last Friday in April, 1917, distributed by classes. Banks. A p t g a u r p r ic e a u l r. l- p s L a t i o p v c e e k r - . : C i c n p o i d a a m u l p s m a e t n r r e . d i r a - lc M o b n l a e o la n m t t e k e b s s r e . ' a r l Total. Banks. A p t g a u r p r ic e a u l r , l -i I i p s L a t i o p v c e e k r - . i C c n p o i d a a m u l p s m a e t r n r e , i d r a - l c M o b n l a e o la m n t t e k e b s s r e . ' a r l Total. I Boston i84,499,472;$1.589,000 $6,088,472 Minneapolis.. S296,378j $330,359"S3,033,281 000 53,750,018 New York 853,694 37,016! 469,757! 210,000 740,467 Kansas City.. 173,554! 322,269; 71,110 566,933 Philadelphia 93,189 636,611! 802,700 1,532,500 Dallas 410,126! 1,298,520' 1,045,566 90,000 2,844,212 Cleveland 21,200 12,836i 1,756,138' 1,230,000 3,020,174 San Francisco 101,6761 22,8921 592,162 716,730 'Richmond 854,657 ! 3,724,905! 2,777,000 7,356,562 Atlanta 310,683 116,044; 1,542,082! 350,000 2,318,809 Total... Chicago 671,611 2,662! 2,066,460' . 50,000 2,790,733 Per cent St. Louis 148,983 81,619; 2,367,965! 717,879 3,316,446 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 487 Distribution, by sizes, of bills bought in open market by all Federal Reserve Banks during April, 1917, and the four months ending April, 1917, and 1916. I To 35,000. | To §10,000. To 825,000. To $50,000. To 15100,000. ; Over §100,000. Acceptances bought in open market. "PI Bankers' acceptances. 732 SI, 546,440; 255:$2,038,377 639 S13,123,188: 256 $10,969,233 87 S7,155,097| 38 *6,186, S16|2,007!i $41,019,15li 99.3 Trade acceptances 16 42,646| 15j 109,003| 8 107,904! 1 33,887 i 40! 2 293,440! .7 Total, April, 1917 74.8 1,589,086s 2702,147,380) 647 13,231,092: 25711,003,120: 87 7,155,097! 38 6,186,816:2,047 41,312,591! Per cent 3.9! 5.2! 32.0;.... 26.6j 17.3!.... lo.Oj. 100.0 March, 1917 389 876,506; 175 l,381,029| 363 6,976,406! 171 7,185,125; 6,801,912; 25 4,930,66011,2091 28,151, February, 1917 819 2,175,639; 777i 6,324,0181,248 22,367,962; 401 16,483,974j 180 15,273,481! 498,012,105i3,474i 70,637,179i January, 1917 390 l,023,210J 483! 1,706,069! 300 5,238,208; 152 6,898,412: 48 3,891,515! 11 1,859,768|l, 384| 20,617,180! Total, 4 months ending April, 1917. 2,346 5,664,4411,705111,558,496!2,558 47,813,666J 981 41,570,631 401 33,122,005: 123 20,989,349!8,114| 160,718,588 Total, 4 months ending I i i April, 1916 1,018 19,660,600! 29912,124,183 13210,769,8041 48 10,438,448j3,473J 63,436,510 3,125,893: 894! 7,317,5S2|l,082 1 Of the above amount, bankers' acceptances totaling $31,873,550 were based on imports and exports and 89,145,601 on domestic trade transactions. 2 Of the above amount, trade acceptances totaling 8290,440 were drawn abroad on importers in the United States and 83,000 were based on domestic trade transactions. Acceptances bought in open market and held by Federal Reserve Banks as per schedules on file with the Federal Reserve Board on dates specified, distributed by classes of accepting institutions. Bankers' acceptances. Trade ac- Date. c N o be m o r n p m t a r n u em i s e t s - . N be b o r n a n m S k t e a s m t . e - P b r a i n v k a s t . e a b F n r d b o a a r n a e n c g i k h g e e n n s - Total. b c m e o p o u a t p g a r e h k n n t e c t m e . s c T ep o t t a a n l c a e c s - . cies. 1915. Feb. 22 S93,000 893,000 £93,000 Apr. 5 _3,, 6„5_3,, 0_0__0 I 37,820,000 $10,000 SI10,000 11,593,000 11,593,000 May 3 5,. ,0«3™8,0 «0n0n 8,189,000 10,000 110,000 13,347,000 13,347,000 June? .J 5,242,000 4,516,000 10,000 192,000 9,960,000 9,900,000 July 3 • 4,342,000 5,267,000 163,000 9,770,000 9,770,000 Aug. 2 ! 5,350,000 5,407.000 ""26/666' 352,000 11,129,000 11,129,000 Sept. 6 6,087,000 6,305', 000 20,000 472,000 12,884,000 12,884,000 Oot. 4. 9,000,000 4,898,000 132,000 343,000 14,373,000 14,373,000 Nov. 1., 8,477,000 4,331,000 253,000 204,000 13,265,000 13,265,000 Dec. 0 '12,311,000 5,172,000 275,000 396,000 18,154,000 18,154,000 1916. Jan. 3 15,494,000 7,160,000 302,000 822,000 23,838,000 23,838,000 F•"eb-.' •-7 , '• 15,681,000 7,876,000 336,000 456,000 25,349,000 3489,000 25,838", 000 Mar. 6, 17,182,000 8,670,000 408,000 781,000 28,041,000 462,000 28,503,000 Apr. 3, 21,000,000 13,573,000 473,000 262,000 38,308,000 722,000 39,030,000 Mayl. 24,875,000 15,4.00,000 585,000 430,000 44,290,000 1,477,000 45,707,000 Juno 5. 24,680,000 17,029,000 644,000 007,000 ! 49,300,000 2,208,000 51,5(58,000 July 3. . 32,, 989,,000 18,921,000 471,000 830,000 J 64,211,000 3,422,000 67,633,000 Aug. 7 ! 39,695,000 19,060,000 738,000 940,000 I 73,433,000 4,225,000 77,658,000 Sept. 4 ! 41,413,000 20,356,000 72G, 000 491,000 ! 74,986,000 3,673,000 78,659,000 Oct. 2 1 37,798,000 21,782,000 712,000 944,000 I 70,236,000 2,306,000 72,542,000 Nov. 6 ! 37,770,000 29,474,000 1,014,000 147,000 ! 80,405,000 2,378,000 82,783,000 Dec. 4 47,748,000 33,232,000 1,630,000 069,000 ! 98,679,000 4,487,000 303,166,000 1917. 3an. 1 66,803,000 34,625,000 1,502,000 18,224,000 .121,154.000 4,585,000 125,739,000 Jan. 8 60,066,000 32,467,000 1,325,000 16,915,000 j. . 110, v73,000 4,219,000 115,022,000 Jan.15 59,710,000 30,691,000 1.245,000 15,81)2,000 . 107,508,000 4,380,000 111,894,000 Jan.22 56,334,000 26,286,000 1,140,000 14,119,000 j. 97', 885,000 4,102,000 10.1,987,000 Jan. 29 52,439,000 22,744,000 1,054,000 12,949.000 89,18fi, 000 4,041,000 93,22/, 000 Feb. 5 50,361,000 23,511,000 972,000 13,775'. 000 $140,000 88,759,000 4,041,000 92,800,000 Feb. 12 54,945,000 33,473,000 1,2(55,000 ] 7,9o2,000 668,000 1108,303,000 4,890,000 113,199,000 Feb. 19 59,165,000 35,745,000 1,208,000 21,842,000 677,0001118,697,000 4,982,000 123,679,000 Feb. 20 ' 59,498,000 3(5,478,000 1,094,000 20,389,000 i 677,000 118,1^1,000 5,068,000 123,204,000 Mai'. 5 53,288,000 32,518,000 1,090,000 20.581,000 i 354,000 .107,837,000 2,535,000 110,36o,000 Afar. 12 50,130,000 28,709, (K)0 815,000 19;503,000 i 290,000 99,543,000 2,359,000 101,902,000 Mar. 19 46,171,000 24,175,000 135,000 17,607,000 ! 228,000 88,916,000 1,908.000 90,824,000 Mar. 26 43,471,000 22,525,000 645,000 17,515,000 i 167,000 84,323,000 1,295; 000 85,618,000 Apr. 2 43,979,000 20,328.000 (389,000 16,830,000 i 200,000 82,020,000 1,144,000 83,170,000 Apr. 9 42,264,000 19,424,000 681,000 15,427,000 ! 200,000 77,996,000 1,344,000 79,340,000 Apr. 16 38,865,000 15,708,000 638,000 14,470,000 i 200,000 69,881,000 1,310,000 71,197,000 Apr. 23 41,093', 000 13,473,000 495,000 15,502.000 ! 200,000 70,764,000 1,461.000 72,225,000 Apr. 30 45,247,000 13,531,000 327,000 17,090,000 ' 344,000 76,545,000 1,371 ',000 77,916,000 M M M a a a y y y 2 7 14 1 4 5 5 9 6 9 , , , 2 1 1 9 0 9 4 5 2 , , , 0 0 0 0 0 0 0 0 0 2 2 1 3 4 9 , , , 3 6 3 1 5 8 6 0 3 , , , 0 0 0 0 0 0 0 0 0 3 3 2 8 2 3 5 0 6 , , , 0 0 0 0 0 0 0 0 0 1 1 1 9 9 8 , , , 8 1 9 2 7 1 2 7 7 , , , 0 0 0 0 0 0 0 0 0 1 1 9 1 3 4 7 6 , , , 0 0 0 0 0 0 0 0 0 1 1 8 0 0 8 2 0 , , , 3 6 0 4 9 9 9 9 6 , , , 0 0 0 0 0 0 0 0 0 3 1 1 , , , 0 9 0 2 8 7 7 6 9 , , , 0 0 0 0 0 0 0 0 0 1 1 9 0 0 0 5 2 , , , 0 7 0 2 2 8 8 2 6 , , , 0 0 0 0 0 0 0 0 0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

488 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. Amounts of bills discounted and acceptances and warrants bought by each Federal Reserve Bank during April, 1917 } distributed by maturities. 15-day maturities. 30-day maturities. Banks. Discounts. A a c n c c e e p s t . - Warrants. Total. Discounts. A a c n c c e e p s t . - Warrants. Total. Boston $9,118,209 S9,118,269 $180,269 $34,635 $214,904 New York 2,316,507 31,023,023 3,339,530 30,753 1,767,097 1,797,850 Philadelphia... 2,164,269 43,873 2,208,142 137.441 737,158 874,599 Cleveland 6,730,998 6,730,998 125;824 $2,563 128,387 Richmond 9,250,442 131,667 9,382,109 509,808 2,672,852 3,182,660 Atlanta &33,649 30,000 863,649 211,296 413,510 630,006 Chicago 1,207,981 1,207,981 451,247 138,905 590,152 St. Louis 2,713,018 I 2,713,018 724,023 215,572 939,595 Minneapolis 252,628 555,000 807,628 982,267 2,179,500 3,161,767 Kansas City... 29,510 i 4,303 33,813 88,985 84,525 173,510 Dallas 224,414 224,414 178,608 178,608 San Francisco., 126,302 I 126,302 200,577 91,268 291,845 Total.... 34,967,987 | 1,787,866 36,755,853 I 3,821,098 8,335,022 7,763 I 12,163,883 Percent 40.1 I ........ 13.2 60-day maturities. 90-day maturities. Banks. Accept- Discounts. ances. Warrants. Total. Discounts. Warrants. Total. Boston $454,771 $775,395 §1,230,166 §196,113 $435,057 $631,170 New York 39,924 3,198,013 3,237,937 52,039 3,680,262 3,732,301 Philadelphia.. 53,762 857,957 911,719 26,477 3,629,819 3,656,296 Cleveland 67,466 956,385 1,023,851 37,016 1,705,125 $5,119 1,747,260 Richmond 1,393,348 1,867,210 3,260,558 927,872 513,989 1,441,861 Atlanta 420,936 456,742 877,678 370,824 257,795 j 2,000 630,619 Chicago 1,408,387 730,578 2,138,955 92,881 2,018,018 2,110,899 St. Louis 188,549 479,675 668,224 266,051 948,768 | 1,214,819 Minneapolis... 2,406,583 2,163,150 4,569,733 258,107 066,430 I 924,537 Kansas City... 20,137 165,107 185,244 98,146 460,251 ! 558,397 Dallas 745,610 142,422 $103,766 991,798 388,719 220,706 | 609,425 San Francisco. 2,161,325 25,249 2,402,940 139,828 1,819,600 | 1,959,428 Total. 7,415,839 13,953,959 129,015 ! 21,498,813 2,854,073 16,355,820 7,119 19,217,012 Percent 23.6 20.9 1 Over 90-day maturities. Total. Per cent. Banks. co D u i n s t - s. Accept- r W an a t r s - . Total. Discounts. Accept- r W an a t r s - . Total. co D u i n s t - s. Accept- r W an a t r s - . Total. Boston $9,949,422 81,245,087 $11,194,509 11.1 100.0 New York , $19,020 $19,020 2,439,223 9,687,415 12,126,638 79.9 100.0 Philadelphia... 83,472 !$126,667 130,139 2,385,421 5,268,807 $126,667 7,780,895 67.7 1.6 100.0 Cleveland 10,108227,"l28"1 9,722 246,958 6,971,412 2,888,638 17,404 9,877,454 29.3 0.2 100.0 Richmond 83,039500,000 583,039 12,164,509 5,685,71S 17,850,227 31.9 100.0 Atlanta 131,117 131,117 1,967,822 1,158,047 7,200 3,133,069 36.9 0.3 100.0 Chicago 65,935 65,935 3,226,431 2,887,501 6,113,932 47.3 100.0 St. Louis 41,714 27, 657 69,371 3,933,355 1,671,672 5,605,027 29.8 100.0 Minneapolis... 202,912 202,912 4,102,497 5,564,080 9,666,577 57.6 100.0 Kansas Citv... 107,617 31,119 138,736 344,395 745,305 1,089,700 68.4 100.0 Dallas..../.... '"" 076 329,076 1,866,427 363,128 103,766 2,333,321 15.5 4.5 100.0 San Francisco. 21,814 75,666 96,814 704,887 4,147,193 25,249 4,877,329 85.0 0.6 100.0 Total., 996,804 879,924 I 136,389 12,013,117 50,055,801 41,312,591 280,286 91,648,678 54.6 45.0 0.4 100.0 Percent ! 2.2 100.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDERAL RESERVE BULLETIN. 489 Maturities of discounts, acceptances and municipal warrants held by the Federal Reserve Banks on Friday, } Apr. 27, 1917. [In thousands of dollars; i. e., 000 omitted.] 1 to 15 days. 16 to 30 days. Banks. B co il u ls n t d e i d s . - b A o a c n u c c g e e h p s t t - . M wa u r n r i a c n ip ts a . l Total. B co il u ls n t d e i d s . - b A o a c n u c c g e e h p s t t - . M wa u r n r i a c n ip ts a . l Total. Boston 4,964 1,898 6 544 1,762 2,306 New York 445 5,106 175 5,726 136 4,570 4,706 Philadelphia.. 1,334 1,948 53 3,335 104 1,481 1,585 Cleveland 2,872 1 078 69 4,019 36 840 878 Richmond 3,981 2,645 6,626 953 1,688 2,641 Atlanta 872 703 1,583 291 991 1,282 Chicago 595 985 1,611 521 1,067 1,588 St. Louis 2,132 894 3,051 635 542 1,177 Minneapolis... 866 2,408 3,274 764 2,093 2 857 Kansas City... 85 510 25 620 56 423 479 Dallas 498 423 921 424 209 52 685 Ban Francisco.. 225 555 780 122 599 721 Total. 18,869 19,153 38,414 16,265 54 20,905 Percent 31.6 17.2 31 to 60 days. 61 to 90 days. Banks. B co il u ls n d te i d s- . b A a o c n u c c g e e p h s t t - . M wa u r n r i a c n ip ts a . l Total. B co il u ls n t d e i d s . - b A a o c n u c c g e e p h s t t - . M wa u r n r i a c n ip ts a . l Total. Boston 416 2,428 127 2,971 164 652 816 New York 119 3,492 4,663 8,274 40 3,427 255 3,722 Philadelphia.. 79 4,007 1,267 5,353 10 3,276 Cleveland 65 1,305 1,627 2,997 39 1,416 1,455 Richmond 1,720 1,391 3,111 582 1 050 1,632 Atlanta 669 792 4 1,465 327 246 573 Chicago 1,435 1,960 2,034 5,429 143 1,543 1,686 St. Louis 232 657 832 1,721 268 688 100 1,056 Minneapolis... 1,678 1,365 177 3,220 227 305 532 Kansas City... 113 225 380 718 159 226 385 Dallas 1,123 124 488 1,735 472 68 540 San Francisco. 4,882 60 1,345 1,405 Total. 21,740 12,207 41,876 2,491 j 14,242 355 17,088 Percent.... 34.5 14.1 Over 90 days. Total. Percentages. Total. Banks. c B o d e u i i d l s n l . - s t- b A a o c n u c c g e e p h s t t - . M r w a i u p n a n a t r l i s - c . - B e i d ll . s b A a o c n u c c g e e p h s t t - . M r w a i u p n a n a t r i s l - c . - Amount. c P e e n r t. c B o d e u i i d l s n l . - s t- b A a o c n u c c g e e p h s t t - . M r w a i u p n a n a t r i l s - c . - Total. Boston 6,740 133 12,961 10.7 47.0 52.0 1.0 100.0 New York 61 61 740 16,595 5,154 22,489 18.5 3.3 73.8 22.9 100.0 Philadelphia... 129 134 1,532 10,712 1,449 13,693 11.3 11.2 78.2 10.6 100.0 Cleveland 1,248 1,257 3,021 4,639 2,946 10,606 8.7 28.5 43.7 27.8 100.0 Richmond 121 15 136 7,357 6,774 15 14,146 11.6 52.0 47.9 | .1 100.0 Atlanta 160 160 2,319 2,732 12 5,063 4.2 45.8 54.0 j .2 100.0 Chicago 97 152 249 2,791 5,555 2,217 10,563 8.7 26.4 52.6 i 21.0' 100.0 St. Louis 49 112 161 3,316 2,781 1,069 7,166 5.9 46.3 38.8 ! 14.9 100.0 Minneapolis.... 215 215 3,750 6,171 177 10,098 8.3 37.1 61.1 1.8 100.0 Kansas City 154 51 205 567 1,384 456 2,407 2.0 23.6 57.5 18.9 100.0 Dallas 327 20 347 2,844 824 560 4,228 3.5 67.3 19.5 13.2 100.0 San Francisco.. i 203 233 717 6,493 811 8,021 6.6 8.9 81.0 10.1 100.0 Total. 1,167 1,991 3,158 i 35,042 71,400 14,999 121,441 100.0 28.9 58.8 12.3 100.0 Per cent 2.6 !........ 100.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

490 FEDERAL RESERVE BULLETIN. JUNE I, 1917. Total investment operations exclusive of purchases of 3 per cent United States certificates of indebtedness of each Federal Reserve Bank during the months of April, 1917, and 1916, and the four months ending April 1917, and 1916. } Bills bought in open market. Municipal warrants bought. Bills discounted Federal Reserve Banks. me f m or ber Bankers' Trade banks. accept- I a a c n c c e e p s t . - Total. City. State. All other. Total. Boston 39,949,422 SI,245,087 SI,245,087 New York 2,439,223 9,673,181 814,234 9,687,415 Philadelphia 2,385,421 5,268,807 5,268,807 §126,667 I §126,667 Cleveland 6,971,412 2,888,638 2,888,638 10,751 S6,653 i 17,404 Richmond 12,1(54,509 ! 5,685,718 5,685,718 Atlanta (including New Orleans branch) 1,967,822 1,155,047 3,000 1,158,047 7,200 7,200 Chicago 3,226,431 2,887,501 2,887,501 St. Louis 3,933,355 1,671,672 1,671,672 Minneapolis 4,102,497 5,564,080 5,564,080 Kansas City 344,395 745,305 745,305 Dallas 1,866,427 363,128 363,128 103,766 103,766 San Francisco 704,887 3,870,987 276,200 4,147,193 25,249 25,249 Total, April, 1917 50,055,801 j 41,019,151 293,440 j 41,312,591 266,433 13,853 280,280 Total, April, 1916 11,521,500 I 17,565,600 933,500 ! 18,499,100 11,113,200 3197,300 50,600 10,361,100 Total, 4 months ending April, 1917.. 117,496,957 157,860,802 2,857,785 1160,718,587 14,288,401 2,040 604,030 14,894,471 Total, 4 months ending April, 1916.. 39,688,400 ! 61,308,000 2,128,500 i 63,436,500 40,448,200 462,900 133,000 41,044,100 United States bonds and Treasury notes. Total investment operations. Federal Reserve Banks. 2 per cent. 3 per cent. 4 per cent. 1 n - o y t e e a s r . Total. A 19 p 1 r 7 i . l, A 19 p 1 r 6 i . l, A 19 p 1 r 7 i . l, A 19 p 1 r 6 i . l, Per et. Per ct. Boston 11,194,509 $4,511,200 1.1.7 8.9 New York 12,126,638 13,344,600 12.6 26.2 Philadelphia S40 40 7,780,935 5,296,500 8.2 10.4 Cleveland 1,270,500 SI,220,000 2,490,500 12,367,954 4,628,600 13.0 9.1 Richmond 17,850,227 3,936,900 18.6 7.7 A fclanta (including New Orleans branch).. 502,000 3,000 505,000 2,702,800 3.8 5.3 Chicago 6,113,932 6,197,100 6.3 12.2 St. Louis 583,500 583,500 6,188,527 1,019,800 6.5 2.0 Minneapolis 511,000 511,000 10,177,577 1,354,300 10.6 2.7 Kansas City 1,089,700 2,263,300 1.2 4,4 Dallas 2,333,321 3,389,900 2.4 6.7 San Francisco 4,877,329 2,210,300 5.1 4.4 Total, April, 1917 2,807,04.0 3,000 1,220,000 j 4.090,040 95,738,718 ! Total, April, 1916 9,436,100 53,500 $940,000 50,000 i 10,479,600 .: 50,861,300 100. 0 100.0 Total, 4 months ending April, 1917.. 13,947,200 114,440 25,250 3,558,000 17,644,890 310,754,905 Total, 4 months ending April, 1916.. 28,013,000 2,962,380 3,828,000 50,000 34,853,380 .179,022,380 United Stales bonds, notes, arid certificates of indebtedness held by all Federal Reserve Banks on Apr. SO, 1917, distributed by maturities. United States bonds with circulation privilege. United States securities without circulation privilege. I Certificates of indebt- Bank. 2 per cent 2 per cent 3 per cent 4 per cent ncss. 3 per cent Total. consols Panamas loan loan Joan of 1930. of 1936-38. of 1918. of 1925. 2 per cent. 3 per cent. of 1946-47. notes. of 1961. Boston , £750 S3,000,000 $529, S2,194,000 $5,723,750 New York 50 S50,000 j 20,000,000 1,255, 2,788,000 24,093,550 Philadelphia $100 3,500,000 549, 2,548,000 6,597,300 Cleveland G, 400 407,200 * 2," 586,' 560' " 82," 369," 2003,500,000 $2,870,000 414, 1,865,000 14,079,160 Richmond 915,100 237,000 2,000,000 1,909,000 5,12.1,100 Atlanta 640,600 21,000 1,500,000 1,091,500 10, 1,491,000 4,754,500 Chicago 1,862, f,00 367,300 2,581,000 1,768,000 5,000,000 635,000 427, 2,985,000 sioo 15,626,600 St. Louis 100 1,080,000 2,500,000 785,000 1,153, 1,444,000 6,902,400 .Minneapolis 323,050 16,260 1,194,180 206,250 2, GOO, 000 114, 1,340,000 500 5,195,010 Kansas City i 7,105; 850 22,240 825,000 2,500,000 838, 1,784,000 13,075,590 Dallas '• 2,450,900 281,500 2,000,000 900,000 1,233,600 1,430,000 8,296,000 San Francisco i 2,428,750 2,500,000 2,690,000 1,500,000 9,118,750 Total 15,734,050 I 1,412,600 7,491,740 5,168,450 50,000,000 8,971,500 6,526,500 23,338,000 900 118,643,740 Total United Slates bonds with circulation privilege $29,806,840 Total United States securities without circulation privilege.. §88,836,900 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1917. FEDEKAL BESEEVE BULLETIN. 491 RESOURCES AND LIABILITIES. Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve System at close of business on Fridays, Apr. 27 to May 25, 1917. [In thousands of dollars; i. c, 000 omitted.] RESOURCES. Boston.! Y N o e r w k. d P el h p i h la i - a. C la le n v d e . - m R o ic n h d - . Atlanta. Chicago. Lo S u t. is. M ap i o n i n i e s - . j K C a i n ty sa . s Dallas. F S r a a n n- Total. cisco. Gold coin and certify catos in vault: Apr. 27 13.605 l-">5,072 24,580 18,558 6,460 6.0i)2 j34,107 8,899 12.055 7,891. 8, 420 15,993 3M.798 May 4 14,282 183,376 20,995 18.692 6,674 6! 134 34.370 9,895 12'. 031 7.903 8,476 13,310 336,118 May 11 14.605 178,416 22, !.?7 19,390 6,762 6) 153 34) 243 12.718 12:110 7) 951 7,755 11.605 336,S4I 3 Lav 18 lo.126 189,62,"} 23,752 19.844 6.872 5,647 34.948 12'. 437 12) 122 7.978 7. 841 1-<:077 •'550,269 May 25 15)619 j168,255 24,875 20,619 j 6)979 6) 108 35)889 11)755 12,213 8) 016 8) 109 15,828 334,265 Gold settlement fund: Apr. 27 13.1.84 !75,767 3,872 22.845 I 16.200 7,115 21.947 2.025 4,988 26,133 9, 463 4,381. 207,920 Mav 4 30.046 S 27,345 14,992 27; 630 20)080 7)927 24)445 «'. 410 5,256 j 34,812 9) 786 11.; 175 2UU)10 M I K vl a a o y y y 2 1 1 5 8 1 2 1 7 2 7 , ) . 0 4 9 2 6 0 1 9 7 9 7 3 5 1 7 , , . 3 4 8 7 9 0 6 3 9 1 2 4 2 , , , 2 8 2 1 5 4 7 0 4 2 2 1 3 3 8 , , , 0 1 0 4 4 3 1 1 9 I ! ! 1 1 9 2 3 , , , 1 5 0 0 1 9 2 3 0 4 4 l' , . , 3 9 7 1 7 7 1 5 3 j 2 1 2 . 6 9 "j , , , 1 2 0 8 0 8 8 2 1 9 7 1 ) , , 7 9 4 0 9 6 4 4 2 6 4 7 ", : , 1 8 9 "1 2 8 "8 3 8 : 1 j 2 2 1 4 2 5 , . . 9 2 3 2 3 8 9 3 0 5 7 1 ' . ) . 2 8 U 0 3 6 3 o 1 9 4 2: ) , 7 8 0 5 1 5 3 0 S 2 1 1 2 8 8 1 3 7 , , , 7 9 5 5 6 9 9 0 0 Gold redemption fund: Apr. 27; 250 250 608 380 I 20-1 85 350 157 80 ?.. 518 Hay 4 250 250 50 i 644 401 207 167 155 101 2,669 May 11 250 250 40 I 700 443 506 226 150 97 I 2.687 M M a a y y 2 1 5 8 2 2 5 5 0 0 2 2 5 5 0 0 3 3 4 7 j I 694 5 4 0 ^ 3 2 214 ! 2 25 7 9 8 3 2 5 o 3 O | i 1 1 4 4 2 4 1 1 2 2 3 5 j i 2 2) ,9 7 0 5 5 4 Legal tender notes, i silver, etc.: Apr. 27 512 23.871 556 112 136 883 1,347 i 1.430 295 38 1.064 90 30.340 Mav 4 442 33; 178 593 102 128 934 1,325 j 1) 273 241 13 l) 098 88 30. 41.:i Hay 11 1)34 29,155 430 147 138 944 1)818 ! 1, 332 270 14 1,278 89 ?-' }-•; MavlS 418 20,419 37o 137 172 097 2,053 : 1,234 244 15 1)278 300 May 25 514 30,076 445 149 179 1,575 i 1,396 285 12 1.273 i 92 i 36)892 Total reserve; I Apr. 27 27.411 I 254,960 29, 258 41,570 23.410 14,476 57,605 i 12,439 17,688 34, 219 19.027 20,513 1 552, >76 May 4 44', 820 1 244,149 36,830 46', 474 27)532 lo)398 60.347 i 16,745 17,857 42,883 19)461 2.1,(MR 597,112 Slav 11 33)094 I 279.314 35,047 42,728 20,113 11,851 61)348 j 23,980 18,750 33) 044. 14,396 23,77i 597,436 MaylS 38.015 I 248.103 29,231 38,059 20.828 12.0o9 !66,423 I 21.411 20,539 30,370 16,3S0 27,007 568. AM May 25 23'. 252 293.957 27,787 43,843 16)948 53,860 i 15,404 17,719 23)550 11,338 20,712 557)652 Five per cent redemption fund against Federal Reserve Banknotes: ATH1. ''121., 300 100 400 May 4 300 100 400 May 11 300 100 400 May 18 300 100 400 May 25 300 100 400 Bills discounted members: Apr. 27 6,089 740 1,533 3,020 7,356 2,319 2,791 3,317 3,750 567 2,84.4 i 717 35,043 Mav 4 3,763 3,576 2,158 2,219 7,528 2.414 2,745 . 2,792 4,229 545 3)174 i 773 35,916 May 11 2,803 3,021 5,790 1,751 7,424 2)420 3,025 ; 2,876 5,272 1,278 3,021 I 853 39,534 May 18 4,058 1,940 8,921 1,367 9,515 2,860 2)716 • 2,488 5,663 1,448 3,064 I 806 44,846 May 25 3,463 651 8,296 3,049 8,772 3,328 3,235 : 3,806 5,617 2,967 3,5G8 ! 47,587 Bills bought in open market: Apr. 27 6,740 16,595 10,711 4,639 6,775 2,732 5.555 • 2,781 6,171 1,384 824 i 6,493 71,400 Mav4 7,530 24,135 11,369 5,883 6,590 2,823 6)219 i 3,234 5,473 1,718 963 i 7,934 83.871 May II ' 11,506 27,757 12,843 7,885 6,033 2,677 7,788 ' 4,415 4,830 2,271 934 ! 8,216 97)155 May 18 11,676 29,028 12,623 6,061 2,421 8,161 ! 4,565 3,871 2,913 998 9,250 1.00,177 May 25 12,014 34,780 12,814 10J294 5,622 2,165 9,129 j 5,102 2,276 3,085 880 ! 9,216 107,377 United States bonds: Apr. 27 530 1,306 549 j 5.844 1,152 672 7,007 \ 2,233 1,743 8,792 3,966 I 2,429 30,223 May 4 530 1,306 549 I 5,844 1,152 672 7,006 2,233 1,743 8,792 3,966 2)429 36,222 May 11 530 1,306 549 ! 5,844 1,152 672 7,006 2,233 1,743 8,702 3)986 2,429 36.222 May 18 530 1,305 549 ! 5,844 1,152 672 7,007 2,233 1.857 8,812 3.966 2:420 36) 386 May 25 1,307 549 I 5,844 1,152 672 7,007 2,233 1)982 8,842 3,1)66 2,429 38,513 1-year Treasury notes: Apr. 27 2,194 2,788 2,548 1,865 1,969 1,491 2,985 ! 1,444 1,452 1,784 1,430 1,500 23,450 Mav4 2,194 2,788 2,548 1,865 1,969 1,491 2,985 i 1,444 1,452 1,784 1,430 1,500 23,450 May 11 2,194 2,788 2,548 1,865 1,969 1,491 2,985 ! 1,444 1,452 1,781. 1,430 1,500 23,450 May 18 2,19-1 2,788 2.548 1,865 1,969 1,491 2,9S5 ; 1,444 1,340 .1,78-1 1,430 1,500 23.338 May 25 ! 2,194 2,788 2,548 1,865 1,969 1,491 2,985 I 1,444 1,340 1,784 1,430 1,500 23)338 United States certifi- i cates of indebted i ness: Apr. 27 3,000 20,000 3,500 4,940 2,382 5,680 | 3,235 2,000 2,933 2,900 5,495 58,145 May 4 3,000 27,270 3.500 5,485 2,000 2,567 5,005 3,205 2,000 2,500 2,900 5,165 64,597 May 11 3,000 20,002 3,500 4,955 2,000 2,810 6,261 ! 2,714 2,000 2,906 2,918 5,023 58,089 May 18 3,000 20,000 3,500 3,710 2,000 2,810 5,253 ! 2,505 2,000 2,510 2,905 4,473 54,666 May 25 3; 000 20.906 3,500 3,551 2,000 2,500 2,000 2,780 2,919 4,650 57,807 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

492 FEDERAL RESERVE BULLETIN. 1, 191.7. Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve System at close of business on Fridays, Apr. 27 to May 25, 1917— -Continued. j In thousands of dollars; i. c, 000 omitted.] RESO U ROES- Continued. Boston. Y N o o r w k. d P el h p i i l H ii- a. C la le n v d e . - m R o ic n h d - . Ali ant a. Chicago. L(.!ui.s. M ap i o n l n i e s. - K C a i n t s y a . s c F S i r s a a c n o n - . Tolnl. Municipal warrants: Apr 27 133 5,154 1,419 2,947 15 12 2.217 1,06S 177 456 560 .811 14,999 May 4 127 5,079 l',422 2,.S-!3 lo 11 2,186 1.043 177 431 560 811 14,755 Mav 11 . 127 5,029 1,-122 2; 883 15 2,186 1.013 177 431 560 811 14,688 Mav 18 127 5,029 1,422 15 5 2,1«6 1,043 1.77 •431 508 811 14,039 Mav 25.. 127 5,029 1.422 2,'i\>o 31 2', 3 86 1,043 177 431 508 811 14,675 F e d e r a 1 11 e s e r v e notes—net: Apr 27 9 7"2 10 974 1 397 •1,061 320 1 008 20 K'32 Mav 4 2 432 1,177 4,238 303 1,789 23 56] Mav 11 2,280 14,798 1,390 4 561 1,051 24,080 Mav 18 1 913 15 781 ! 638 •V 435 1 691 26 4o8 May 25. 2.051 17,225 I. 099 5.425 2,010 28!416 Due from other Fed- • er a i R escrve Banks---net;: Apr. 27 6,732 6,559 4,468 2,085 2,895 7,575 6,982 5,94.9 1 132 Mav 4 4,138 ' 209 1,935 860 4,398 ?., 158 71 2,887 889 2,094 1 5,243 May 11 2,348 9,591 2,3,19 3,088 13,485 921 3,022 2,71L 975 2.903 1 1,345 Mav 18 3 958 3 305 1 'Mo 5 349 2 543 J 3 057 Mav 25 269 4,031 1,552 809 211 3,472 2' 138 1,002 Due from depositary banks—Fiscal Agent account: May 18 83,361 1,100 84 461 AJ'av 25 122,249 100 122 349 (Tncoilected items: Apr 27... 16,652 50,554 24,357 13,504 9,338 10,169 31,439 13,127 4,962 10,454 6,236 14,050 204,842 Mav 4 12,040 •10,502 22', 639 13', 689 9,606 8.400 34,004 10,642 5,071 8; 0o7 6,1162 12.117 184,639 May 11 22; 194 '144,413 30,546 11,589 10,580 8; 994 37,332 9.456 5,806 7,722 10,504 310, (185 Mav 18 16,147 43,445 24,515 16,473 9,850 9,385 29,575 10', 597 6,518 11J92 6,023 9,104 192; 830 M ay 25.. 29,615 150,535 28,195 15.170 11,414 9,781 39,156 5.302 7.117 14'. 889 7.871 9.734 328,779 All other resources: Apr 27 39 854 497 216 120 1,138 797 497 117 174 1,172 136 5,757 May 4.. 51 1,237 574 100 82 1,001 656 460 116 176 757 202 5,412 Mav 11 28 1,341 588 209 61 1,034 789 639 85 306 845 153 0.078 May 18 22 1,332 1,422 311 73 • 740 512 407 97 181 646 258 5,981 May 25 27 1,475 919 172 72 791 721 687 93 197 843 427 6,424 Total resources: Apr. 27 72,292 363,925 80. 961 84,410 54,300 38,286 127,7.12 40,141 38,060 68,365 39,059 59,191 1,023,589 May 4 80.625 363,664 81.798 87,564 57.334 39,173 129,449 41,869 •U; 005 68,988 59,4."2 1,075.178 Mav 11 80; 104 499,769 92; 8-33 90. 690 Si', 686 35,041 146,766 49.721 •13,137 05.372 36* 867 57,214 l'. 209; 162 Mav 18 77,682 452,112 88,689 84,055 51,469 33,791 136,702 46.693 12,062 62'. 551 36,029 59 <N^1 f, 155,673 May 25 76.542 654,933 86,030 88,382 49,516 31.043 131.323 40'. 993 38.321 60'. 903 33.419 53,390 1.341.952 LIABILITIES. I Capital paid in: • Apr. 27 .' o, 059 11,883 5,253 6,2-10 3,431 2,418 7,002 2.945 2.431 I 3.089 2, 7>'3 3,935 50,409 May 4 5,074 12,073 5.253 6,239 3.438 2,393 7,057 3; 140 2.432 i 3,081 2,744 3,035 50,859 Mav 11 o!074 12,075 5', 253 (i, 240 3; 438 2,388 7,057 3,139 2.432 j 3.081 2,747 3; 935 56,859 May 18 5', 082 12,059 5,263 (), 243 3,440 2,388 7,057 3,139 2; 134 : 3; 081 2,718 3,934 50,8(58 May 25 5.090 12,060 5.205 6.250 3,436 2,388 7.. 057 3,139 2.467 ' 3,. 150 2,754 3., 935 56,991 {J 0vernment depos its: Apr. 27 7,917 18,211 (i, 504 3,357 7,546 10,988 8,01-1 1,795 3,849 10,726 8,926 11,856 99,689 May 4 14,695 7, 779 9,224 8, 780 8,305 12,594 7,895 1.821 4,147 JO,876 9,014 12.678 107,868 Afav 11 18 688 105,532 15. J56 18,247 4,548 8,5(18 30,076 7,643 6,008! 10,436 (>, 623 10'. 896 242,421 Mav IS 10,646 111,493 10;050 4,150 3,236 6,053 14,244 2, 579 4,314 ; 2,600 4,642 13;120 187,127 Anr 25 9,414 140.431 8.121 4.810 2,316 4,404 12.897 2,711 2,414 ; 2,272 2.282 6,391 198,463 Due to members—reserve account: Apr. 27 49,115 262,369 43,532 61,290 25,652 18.574 97,116 25,793 27,843 !46,926 22,527 39,042 719,785 May 4 50,840 274,673 44.91(5 60,332 26,404 17'. 907 99,970 28,269 28.7-15 '48,196 23,395 39,436 743; M3 May 11 44,290 295,148 47', 215 54,583 25,092 17', 869 96.876 26,619 27', 938 :43', 762 22,376 38.958 740,72(5 Hay .1.8 49,277 287,071 4.8,402 58,677 25,5(53 18,443 9i>; 871 27.906 27,340 !47,983 22.382 3S;524 748,499 May 25 44,157 359:645 47.634 62.175 24;155 17.661 95.101 26'. 426 27:084 :47.427 22/. 763 39.098 813.326 Co 1! ect ion j terns: Apr. 27 10,128 29,524 22,753 13,517 7,860 4,520 15,580 7,499 2,606: 7,624 3,179 4.212 129,032 May 4 9,891 28,986 20,621 12,213 8,268 4,890 14,527 7', 161 3,063 6,835 3,050 3', 256 122,761 May 11 11,894 37,075 22,011 11,020 8,655 4; 908 12,757 8,618 2,787 ; 7,749 3,080 3,293 .134,447 May 18 11,924 26,914 22,681 14,985 8,911 5,490 18,530 8,502 2,888 : 8,113 3,641 4,171 336,750 May 25. 17,724 66.529 21.805 14.516 9.195 4.821 16,268 3,01.8 2,383 ! 7.181 2.875 3,836 170.151. Federal reserve notesnet : Apr 27 2,786 9,811 1,786 1,557 1,182 1 104 18,220 Mav 4 1,654 10,790 1,389 1,478 •2,618 1,045 18', 974 May 11. 2,682 9,935 1,308 * 3,702 3,963 2,041 23,975 Mav 18 2 102 9 940 1.417 4 356 4,091 777 j 1,965 : 24,648 May 25 2,181 10.394 1,769 5.699 3,186 833 ! 2,039 . 20,201 1 Difference between net amounts due from and net amounts duo to other Federal Reserve banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNK 1, 1917. FEDERAL RESERVE BULLETIN. 493 Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve System at close of business on Fridays, Apr. 27 to May 25, 1917—Continued. |7n thousands of dollars: i. <>., 000 omitted.] LIABILITIES Continued. Due to other Federal Reserve Banks—net: • Apr. 27, May 4 May 11 May 18. May 25. All other liabilities, including forei gn Govern merit credits: Apr. 27. May 4 May 11 May 18 May 25, Total liabilities: Apr. 27 72,292 363,925 : 80,961 84,410 54,300 38,286 i 127,712 40,141 38,060 I 68,365 I 39,059 j 59.191 1,023,580 May 4 80,625 | 363,664 •81,798 87,564 57,334 39,173 i 129,449 41,869 41 005 i 68.,,9.88. .i. .39,,-6 73 !, 59)482 1,075', .178 Mayll 80,104 j 499,769 ',92,833 90, 090 51,686 35,041 i 146,766 49,721 43,337 i 65,372 36,867) 57,2.14 1,209)162 May 18 : 77,682 : 452,112 =88,689 84,055 51,469 33,791 : 136,702 46,693 42,062 I 62,554 30,029 1,155.673 May 25 = 76,542 j 654:933 \ 86,030 88.382 49.516 31.043 ! 131.328 40,993 38,321 ! 60,963 33,419 531390 1,341)952 i ; FEDERAL RESERVE NOTES. Federal Reserve note account of each Federal Reserve Bank ai close of business on Fridays, Apr. 27, lo May 25. 191.7. [In thousands of dollars; i. e. 000 omitted.] I New Phila,- ; Clove- 1 Rich- St. Minne- Kansas San : Boston. York. ticlphia. j land, j mond. Atlanta.'Chicago. Louis. apolis. City. ; Dallas. Fran- • Total, cisco. i Federal Reserve notes received from agentnet: Apr. 27 21,383 193,594 1,433 ! 21,919 16.522 19,836 40,303 15,482 22,563 24,992 ; 20,563 IS, 954 446,54-1 May 4 21,363 198,163 31,383 : 22,227 16', 770 19,686 44,133 . 15,682 23.145 O2i4l, 9r*7T7T !. 2or0*,,3 o9n3o 20,952 458.874 May 11 21,930 201,640 3" 1,6"8'"0 ' 23,981 17.059 19,573 48,945 i 15,6.19 23;520 25,369 20,175 20,910 470; 401 May 18 21,912 205,229 32,630 24,882 161908 19,035 51,205 ! 15,727 23,486 25,268 20,135 21,889 478,906 May 25 22,640 208,620 33,373 27,334 17,014 19,130 52,476 i 16,403 23,365 25,955 ; 19,919 21,854 488,088 Federal Reserve notes I held by bank: Apr ."27 ! 2,772 10,974 1.361 i 1,397 776 785 4,001 4<K) 828 1,266 224 1.098 I 26,035 May 4 ' 2,432 13,622 1)726 ! 1,177 604 732 5,238 809 992 983 268 1)780 : 30,372 May 11 i 2,280 14.798 1,098 I 1,390 854 813 7,021 685 1,147 786 260 1,051 i 32,183 May 18 : 1,913 15'. 7S1 808 ! 1,688 746 854 6,715 551 1)019 353 336 1,691 i 32,405 May 25 1 2,051 17', 225 729 ! 1,699 965 502 5,'125 928 971 932 2)010 ! 88,6SK Federal Reserve notes \ I in circulation: ! Apr. 27 ! 18,611 i 182,620 20,069 :20,522 15,746 19,051 36,242 14,992 21,735 23.726 ! 20.339 17,856 j 420.509 Mav 4 ; 18.931 i 184,541 29.657 I 21,050 16,166 IS", 954 38,895 14.873 22,153 n, 994 I 20', 125 19.163 ! 42S!">O2 May 11 : 19* 650 ; 186,842 30,582 : 22', 591 10,205 18,760 41,924' 14)934 22,373 24,583 i 19:915 39)859 ! 43S'.E18 May 18 i 19.999 189,-IIS 31,822 i 23,244 16;162 18,781 44,490 15,176 22)467 2-1,915 j 19; 799 20,198 ! 4461501 May 25 1 20)5S9 191,390 32,614 i 25,635 16,049 18,628 47,051 .15,480 22,391 25,023 ! 19,673 19,844 i 454)-HW Gold and lawful : money deposited j with or to credit of ! Federal Reserve ; Agent: I Apr. 27 i 2i,S83 ! 193.59-1 25.288 ; 21,019 5,935 17,265 40,303 13,435 20,553 •. 21,0-16 19,235 =1S,9->1 ! 422,905 May 4 ! 21,363 ' 198)163 28,003 1 22,227 5l 376 17,565 43,133 13,395 19,535 ! 24.297 19,080 20,952 ! 433.08f> ?"" Mayll ; 21', 930 i 201.640 27,900 , 23,981 (V, 270 17,452 46,485 11,232 18,410 : 24)289 17,874 20,910 I <i:-8)32" E: May 18 2])912 j 205.! 229 20^720 j 24)882 6,222 17,364 49,925 10,820 18,376 • 24,138 17,831 2!,SS9 ' 'I!^,:*!! May 25 ; .?..?., f>-10 j 208; 69,0 30, -163 i 27', 334 5,655 16, 859 52?7 9,781 19)205 : 2-1,090 i 17)634 21,851 i '!5f!,r>|.l Commercial paper d.e- . : ! livered to Federal : Reserve Agent: ! Apr. 27.." i 4.136 11,285 2,575 I i 2,053 2,010 ; 1,114 2,758 25. 981 May 4 '• 3,390 11,629 2,125 I 1,013 I 2,295 3,610 I 784 2,497 : 271313 Mayll ! 3,790 i 11,157 2,125 I 2,461 i 4,393 5,110 ' 1,194 2,516 : 32)776 May 18 • 2,917 ! 12,124 2,278 ! 1,301 4,922 5,110 : 1,130 2,639 : 32/21 Mav 25 : 2,917 I 11,987 2^79 i 6,635 A, 160 ! 1,892 2)815 : 32,685 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

494 FEDERAL RESERVE BULLETIN. JUNE 1, 1917. Federal Reserve note account of each Federal Reserve Agent at close of business on Fridays, April 27 to May 25, 1917. [In thousands of dollars; i. e., 000 omitted.] Bos- New At- • Ciii- St. I Mimie-1 Kansas ton. York. land, i mond. lanta. ' cago. Louis. ! apolis. j City. Dallas. Total. phia. FEDERAL RESERVE NOTES. Received from Comptroller: Apr. 27 39,680 333,280 43,440 32,200 29,500 36,380I I 51,080 24,940 34,000 I 40,720 36,920 22,060 724,200 May 4 i 39,680 339,280 52,140 32,200 29,500 36,380 ! 57,120 24,940 34,640 I 40,720 36,920 24,060 747,580 May 11 ! 39,680 345, 920 52,140 35,600 29,500 36,380 ! 60,560 24,940 34,640 i 40,720 36,920 24,060 761,000 M a v 18 ; 3 9.6 80 358.340 52,140 35,600 30,100 36,380 i 64,020 24,940 34,640 ! 40,720 36,920 25,060 778,440 May 25 j 39; 680 383; 440 57,340 35,600 30,100 36,380 i 65,060 | 25,74034,640 I 40,720 36,920 25,060 810,680 Returned to Comptroller: i Apr. 27 j 9,547 71,786 8,167 5,341 9,778 5,589 2,077 i 4,518 4,987 ! 4,958 7,871 3,106 137,725 May 4 i 9.567 72,017 8,217 5,433 9,880 5,739 2,087 i 4,508 5,005 i 5,673 8,041 3,108 139,325 May 11 i lOiOOO 72,400 8,320 5,479 30,056 5.852 2,095 ! 4,621 5,130 i 6,161 8,259 3,150 141,523 May 18 : 10.018 72,611 8,370 5,578 10,207 5', 940 2,115 ! 5,033 5,314 i 6^262 8,299 3,171 142,918 May 25 ! 10,290 72,820 5,626 10,406 6,015 2,244 ! 5,072 5,135 i 6,425 8,515 3,206 144,711 Chargeable to Federal Reserve j Agent: A pr. 27 30,133 261,494 35,273 26,859 19,722 30,791 49,003 i 20,422 29,013 35,762 29,049 18,954 588,475 May 4 30,113 267,263 43,923 i 26,76" 19,620 30,641 55.033 I 20,382 29,635 35.047 28,879 20,952 :608,255 May 11 i 29,680 273,520 43,820 30,121 19,444 30,528 58;465 20,319 29,510 3< 559 28,681 20,910 619,537 May 18 ! 29,662 285,629 43.770 30,022 19,893 30,440 61.905 19,907 29,323 34,458 28,621 21,889 635,522 In h M an a d y s 2 o 5 f Federal Reserve Agent: 29,390 1310,620 48; 713 29; 974 19,694 30,335 62;816 20,668 29,205 j 34,295 28,405 21,854 (HJO} 969 Apr. 27 8.750 .67,000 4,840 4,940 3,200 10,055 8,700 ! 4,940 6,450 i 10.770 139,931 Mav 4 ! 8', 750 69,100 12,540 4,540 2,850 10,955 10,900 I 4,700 6,490 ! 10'. 070 8,4: 149,381. May 11 i 7.750 71,880 12,140 6,140 2,885 10,955 9,520 ! 4,700 5,990 i 9; 190 8,486 149,136 May 18 J "t, 750 400 ; 140 i o,uo2,985 10,805 10,700 I 4,180 5,810 9.190 8', 486 156,616 May 25 6,750 102,000 15,340 | 2,640 11,205 10,310 i 4,260 5,840 8; 340 177,881 Issued to Federal Reserve "Bank less amount returned to Federal "Reserve Agent for redemption: Apr. 27 ; | 21,383 193,594 80,433 | 21,919 16,522 19,836 40,303 j 15.482 22,503 i 21.992 20,563 18,954 446.544 May 4 | 21,363 198,163 3J,383 | 22,227 16,770 19,686 44,133 I 15; 682 23,145 ! 2<977 20,393 20,952 458; 874 May 11 j 21,930 201,640 31,680 i 23.981 17,059 19,573 48,945 l 15,619 23,5?0 I 25; 809 20,175 20,910 470,401 May 18 ! 21,912 205,220 32,630 | 24,882 16,908 19.635 51,205 i 15.727 23.4*6 i 25,268 20,135 21,889 478,906 May 25 ! 22,640 308,620 33,373 | 27,334 17,014 19j 130 52,476 ; 10; 408 23;305 i 25,955 19,919 21,854 488,088 Amount held by Federal Reserve Agent: Ln reduction of liability on outstanding notes- Gold coin and certificates on hand- Apr. 27 __,__. 183,881 3,730 10,313 6,465 13,918 I 2,370 10,110 253.944 May 4 20,260 188,678 3,730 10,457 2,897 6,465 13,918 I 2.370 I 10,110 258; 885 May 11 20.800 191,538 3,730 10,238 2,897 4,364 13,913 I 2;370 ' 11",'11"0" 261,025 May 18 20) 860 195,338 3,730 10,048 2,S97 4,304 13,918 i 2,370 11,110 264,635 May 25 j 19,310 197,938 3,730 9,830 2,897 3,305 13,918 i 2,370 I 11,110 264,408 Credit balances— ' In gold redemption i fund— ! I A M M M M p a a a a r y y y y . 2 4 1 1 2 5 1 8 7 | | i j 1 1 1 1 1 , , , , , 3 1 0 1 0 3 0 7 2 5 0 3 0 3 2 1 I© 9 9 9 0 ' , , , , , 7 4 8 6 1 1 8 9 8 0 3 5 1 2 2 1 1 1 1 i , , , , ; 6 4 6 5 6 2 8 3 3 8 3 3 3 0 0 1 1 1 l 1 ' , , , , , 2 3 2 1 5 4 3 0 7 0 3 4 6 0 4 2 6 3 2 4 5 7 2 7 3 5 6 2 0 5 1 1 1 1 , , , , 8 0 3 1 9 8 7 3 8 8 2 5 8 8 7 6 6 6 6 4 3 5 1 3 5 3 5 ! I i ! 6 6 5 5 7 6 6 0 9 0 6 0 6 S 0 1 1 1, , , 2 0 8 2 1 3 7 1 9 1 8 2 5 7 " ! i ; i ' l 1 1 1 1 , , , , , 4 3 2 3 1 1 0 0 6 6 6 9 8 7 0 f 1 1 j - , , l, ! 2 1 . 1 0 ; 0 3 7 . 0 4 S 1 5 0 l 4 : 24 1,0 8 8 8 7 9 0 4 7 4 4 0 4 9 2 Z 2 2 2 2 0 0 0 1 \\ , . , , 6 5 0 9 2 3 9 2 3 3 4 6 8 1 3 With Federal Reserve Hoard— Apr. 27 i 21,070 10,500 5,500 13,030 39,650 6.270 5,720 20,200 7.920 IS,110 148,030 M M a a y y 4 11 i ! 2 2 2 2 , , 6 6 4 4 0 0 1 1 0 2 , , 5 5 0 0 0 0 5 6 , , 0 0 0 0 0 0 1 1 3 3 , , 4 4 8 8 0 0 4 45 2 , , 4 S 9 5 0 0 6 6 J ,2 2 7 7 0 0 3 4 , , 2 7 2 2 0 0 2 20 0 , , 5 5 6 6 0 0 5 7' , 7 6 8 4 0 0 0 2 2 0 0 , , 1 1 1 1 0 0 I i 1 1 5 5 0 3 , , 2 5 7 7 0 0 May 18 ! 24,310 13,500 6,000 13,4S0 49,310 5,950 3,220 20,560 5,640 21,110 I 163', 0*0 May 25 2,000 ! 25,110 16,000 5,000 12,080 51,990 5,750 4,170 20,560 5,490 20,760 168,910 As security for outstanding notes- Commercial paper- Apr. 27 4,150 10,587 2,571 2,047 2,010 1,328 23,639 Mav 4 3,380 11,394 2,121 1,000 2,287 3,610 1,313 25,785 May 11 "1,780 10,789 2,121 2,460 4,387 5.110 1,130 2,301 32,078 May 18 2,910 10,686 2,271 1,280 4,907 5,110 1,130 2,301 30,595 May 25 2,910 li;359 2,271 6,627 4,160 1,865 2,285 31,477 Total— i Apr. 27 ! 21,383 193,594 30,433 21,919 16,522 19,830 40,303 15,482 22,563 24,992 I20,563 18,954 443,544 May 4 i 21,363 198,163 31,383 22,227 16,770 19,686 44,133 15,682 23,145 24.977 20,393 20,952 458,574 May 11 i 21,930 20lJ 610 31,680 23,981 17,059 19.573 48,945 15,619 23,520 25;369 20,175 20,910 470,4.01 M M a a y y 2 1 5 8 i 2 2 2 1 , , 6 9 4 3 0 2 1 ~ 2 " 0 ~ 5, 22 '" 9 " 3 33 2 , , 3 6 7 3 3 0 2 2 7 4 , , 3 8 3 8 4 2 1 17 6 , , 0 9 1 0 4 8 j 1 19 9 ' . , 1 6 3 3 0 5 5 5 2 1 , , 4 2 7 0 6 5 1 16 5 , , 4 7 0 2 8 7 23;486 2 2 5 5 , , 9 2 5 6 5 8 2 19 0 , , 9 1 1 3 9 5 2 2 1 1 , , 8 8 S 5 9 4 4 4 8 7 8 8 , ,9 0 0 8 6 8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

.TUNM 1, 1017. FEDERAL BESEKVE BULLETIN". 495 EARNINGS ON INVESTMENTS OF FEDERAL RESERVE BANKS. Average amounts of earning assets held by each Federal Reservvee BBaannkk dduurriinngg AApprriill,, 11991177,, eeaarrnniinnggss ffrom each class of earning g y t d l l f ig s oon tthhee bbaassiiss ooff AApprriill, 11991177, rreettuurrnnss. assets, and annual rales of earnings Average balances for the month of the several classes of earning assets. J Banks. Bills dis- Bills bought \ m co e u m n b te e d rs , , i i i m n a o r p k e e n t. | . M wa u r n r i a c n ip ts a . l Total. notes. Boston i 84,067,008 ), 366,068 So, 723,750 ! 8186,678 S20.343.502 New York I 1,033,473 ',273,051 24,098,550 | 5,150,844 47,5551918 Philadelphia 1,212,746 6,597,280 j 1,497,732 20,325,854 Cleveland 2,518,798 024,941 11,420,547 i 2,987,348 21,957,634 Richmond ! 5,017,197 626,711 ! 5,141,000 j 15,000 16,799,908 Atlanta I 2,169,949 052,556 i 3,555,367 ! 10,467 8,788,339 Chicago ! 1,354,108 846,811 15,260,833 i 2,209,349 25,671,101 St. Louis ! 1,783,253 384,044 6,330,233 I 1,068,495 12,566,025 Minneapolis : I 2,522,500 387,300 5,188,600 I 176,700 13,275,100 Kansas "Gitv i 633,503 740,938 13,128,156 I 459,139 15,961,736 Dallas I | 2,127,217 041,662 7,576,000 j 547,857 11,292,736 San Francisco j 462,817 049,525 7,002,917 I 802,856 15,318,115 Total ! 24,902,567 | 78,811,703 111,029,233 1 15,112,465 229,855,968 Earnings from— Calculated annual rates of earnings from— United Banks. B co i m b l u l e e s n r m t s d e . - i d s , - m i b n o B a u o r il k g p l e s e h n t t . T b re a o a n n s d d u s ry p M r a a l u n n w t i s c a . i r - - Total. B co i m b l u l e e s n r m t d s e . - i d s , - m i b n B o a o u r il k p g l e s e h n t t . | U s S c t n t i c a e i u t s t r e e . i s d - p M r a a l u n n w t i s c a . i r - - Total. notes. Per cent. Per cent. Per cent. Per cent. Per cent. Boston £12,120 526,996 812,120 $442 $51,678 3.63 3.17 2.58 2.87 ' 3.06 New York 3,018 45,479 43,468 12,664 104,629 3.55 3.20 2.19 2.99 2.61 Philadelphia.. 3,695 27,794 13,478 3,602 48,569 3.76 3.06 2.48 2.92 2.90 Cleveland 7,588 12,774 22,495 7,881 50,738 3.67 3.09 2.48 3.21 2.81 Richmond 15,884 lf>, 576 10,162 43 42,665 3.85 3.04 2.40 3.53 3.09 Atlanta 7,031 8,132 7,331 40 ! 22,534 3.94 3.24 2.51 4.65 3.12 Chicago 4,676 16,457 30,432 5,755 57,320 4.20 2.92 2.43 3.17 2.72 St. Louis 5,627 8,999 12,750 2,657 30,033 3.84 3.24 2.45 3.03 2.91 Minneapolis... 8,565 13,404 10,143 392 32,504 4.13 3.03 2.38 2.70 2.98 Kansas City... 2,550 4,472 24,551 1,125 32,698 4.eo 3.12 2.28 2.91 2.49 Dallas....;.... 7,860 2,808 14,550 1,409 26,627 4.49 3.23 2.31 3.08 3.50 San Francisco. 1,578 16, 798 13,585 1,935 33,896 4.15 2.90 2.33 2.93 2.69 Total 80,192 I 200,689 215,065 37,945 533,891 3.92 3.10 2.36 3.05 2.83 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

496 FEDERAL RESERVE BULLETIN. .TONE 1, 1917. DISCOUNT SATES. Discount rates of each Federal Reserve Bank in effect May 31, 1917. Maturities. Discounts. Commodity paper W d m c b a i l a e t u y h n m d s i k , i n b n s i e n g ' 1 r - 5 d c 1 a l 6 u v s s to i , v i 6 e n . 0 - d c 8 a l 1 u y t s s o i , v 9 i e n 0 . - c S B e e r d L o c t e u n i i f b b r d i e t e c s e d a r . d t t y e n b s e W y L s s o o X i t f a o h L n r i i n n S - . m w d i a t a t h u y i r n s i . n 9 g 0 collateral 90 days. notes. Boston 31 4 4 Now York 1 3 4 4 J 'hilarielpliia 3 4 4 Cleveland 2 3?y 4 41 Richmond 3-i 4 4 Atlanta 3-V 4 41 Chicago 83i 4 44 St. Louis 34- 4 4 Minneapolis 34 4 I Kansas City 84 4.\- "J)iiIJas 3.V 4 San Francisco 3i 4. NOTE.- -Kate for bankers' acceptances, 2h to 4 per cent. 1 Rate of 2 to 4 per cent on member banks' 1-day collateral notes in connection with the loan operations 01 the Government. * 3 par cent for member banks' collateral notes if secured by "United States certificates of mdeble'\IIQSS. 3 3 per cent Tor member banks' collateral notes ii' secured by United States bonus, notes, or uei'tificato!:: of indebtedness. GOLD IMPORTS AND EXPORTS. Gold imports and exports into and from the United Slah-s. [Tn thousands of do!llars; i. 0., 000 omitted.] Wxi\i ending- Total Total for sine 3 corresponding period Ap 19 r. 1 7 2 . 0, Aw 1 . 9 17 2 . 7, 10 i 7."' M 1 a 9 v 1 7 1 . 1, ir 1 a 9 v 1 7 IS . , ju 1 i 9 i. 1 7. 1, d 1 u 9 r 1 in 6 g . I IMPORTS. rJro aiL(i bosp bullion 600 200 280 •213 206 5,754 4,749 Urnted Slatos mint or assay ofii.ce bars 2 9 I '11 i 1 P1"' •'••! (' fl ( PS 0 0 ill 3*7 • 9 J2 3 C 2 5 1 30,250 W 12 7 ij i i 2o 5 O 2. ; 0 5 7 5 7 4 18 1, ' 9 7 7 1 0 5 .Foreign coin ' 2,433 18,-102 30 | 70,910 26,358 Total 953 3,991 615 43,925 70S 385,304 53,122 EXPORTS. Domestic: ()re and base bullion 11 16 99 147 United States mint or assay ofTico bars 2 1,670 2,493 14,096 4,378 Bullion, refined 36 128 41 1,549 4,236 Coin 4.015 942 8,815 8,256 8,790 80,012 22,933 Total 4,031 980 10,622 10,872 8.836 102,356 31,694 Foreign: Bullion, refined 31 1,438 C oin 5 332 i 1 4,840 17,025 Total 5 332 i 1 4,871 18,463 Total exports 4,036 1,312 10,622 10,822 8,837 107,227 50.157 Excess of gold imports over exports since Jan. 1,1917. 278,077 Excess of gold imports o\ er exports since Aug. 1,1914. 1,146,839 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX. T'aiie. Acceptances, distribution of, by classes, maturities, Franking privilege in correspondence relating to etc '. 487 Liberty Loan 439 Alien enemies, instructions to Federal Reserve Gold coin, abrasion of, caused by use of coin-count- Banks relative to 441-441) ing machines 440 Amendments to Federal Reserve act as passed by Gold imports and exports 496 House and Senate 441 Gold settlement fund, transactions under 454 Branch bank in Baltimore, establishment of 440 Informal rulings of the board: Business conditions throughout the Federal Re- Paper secured by warehouse receipts. ^ 450 serve districts .' 4G0-482 Bonds secured by real estate 456 ("hart showing reserves of national banks, 1915-19.17. 484 Surrender of stock by liquidated bank 457 Circular issued by Federal Reserve Bank of Chicago Discount of farmers' paper 457 relative to Liberty Loan 437 indorsement on bill of exchange 457 Circulars issued by the Treasury Department reki- Law department: ing to Liberty Loan 432 Reserves against Government deposits 458 Clearing and collection system, operation of -455 Eligible paper secured by real estate mortgage. 458 Coin-counting machines, abrasion of gold coin Notes and bills drawn for purpose of carrying caused by use of 440 on trading in Government obligations 459 Commercial failures reported 441. Ruling by Acting Commissioner of Internal Committees, Liberty Loan, personnel of 437 Revenue regarding taxability of income Discount rates: from investments in Libert}' Bondjsj 459 Establishment of rate of 3•£ per cent on notes se- Liberty Loan: cured by certificates of indebtedness or Lib- Circular issued by Chicago Federal Reserve erty Loan bonds 429 Bank relative to 437 In effect 496 Circulars issued by Treasury Department rela- Discount operations of the Federal Reserve Banks. 485-490 tive to 432 Federal Reserve Act: Cooperation of American Bankers Association. 438 Amendment submitted by Board authorizing Cost of telegrams and use of franking privigranting of charters to banks organized for lege 439 purpose of engaging in foreign trade 450-458 Establishment of rate of 3J per cent .on notes Ame ndments to, as passed by Houseand S enat e. 441 -449 secured by bonds 429 Federal Reserve agents' fund, transactions under. . 455 Personnel of liberty Loan committees 437 Federal Reserve Banks: National bank charters granted 450 Earnings on investments 495 Reserves of national banks, 1915-1917 483-484 Resources and liabilities.. 491 Chart showing 4.84 Federal Reserve drafts, plan for issue of, date post- Resources and liabilities of Federal Reserve Banks. 491 poned 4-40 Review of the month 423-429 Federal Reserve note accounts of Federal Reserve State banks admitted to system 439 Banks and agents 493-494 Tele-grams, cost of, relating to bond issue 439 Fiduciary powers granted during month 440 Treasury certificates of indebtedness 423 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis