Federal Reserve Bulletin, 1918-06

FEDERAL RESERVE BULLETIN ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON JUNE, 1918 WASHINGTON GOVERNMENT PRINTING OFFICE 191S Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BOARD. EX OFFICIO MEMBERS. W. P. G. HARDING, Governor. PAUL M. WARBURG, Vice Governor. WILLIAM G. MCADOO, FREDERIC A. DELANO. Secretary of the Treasury, ADOLPH C. MILLER. Chairman. CHARLES S. HAMLIN. JOHN SKELTON WILLIAMS, Comptroller of the Currency. H. PARKER WILLIS, Secretary. L. C. ADELSON, Assistant Secretary. 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 to not less than ten names at a subscription price of $1 per annum. No complete sets of the Bulletin for 1915 or 1916 are available. Bound copies of the Bulletin for 1917 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. The President on thrift and the purchase of securities 483 Review of the month „ 484 Indexes of business conditions 491 Class C director named for Federal Reserve Bank of Richmond. 491 Meeting of Federal Advisory Council 491 Banks granted authority to accept up to 100 per cent of capital and surplus 492 Fiduciary powers granted to national banks 492 Progress in retiring silver certificates 493 Work of the Capital Issues Committee 494 Special deposits of public moneys 494 Operations of the War Finance Corporation 495 Additional taxation 497 Act authorizing national banks to subscribe to the Red Cross 498 Control of coin, bullion, and currency movement 499 Deposits, loans, and discounts, and total investments of national banks, 1914-1918 502 Chart showing 503 Movement of prices, 1914-1918 504 Chart showing 505 Amounts of money held in the Treasury and the Federal Reserve Banks and amounts held by other banks and the public 506 State banks and trust companies admitted to the Federal Reserve system 508 The third Liberty loan 509 Charters issued to national banks during the month 509 Commercial failures reported 510 State banks and trust companies entering the Federal Reserve system 510 List of Liberty bonds lost or stolen 515 Conversion of Liberty bonds 517 New issue of Treasury certificates of indebtedness 518 r Report on revision of law and practice relating to checks, by tho Central Executive Council of the International High Commission 518 Amounts of paper currency outstanding 519 Informal rulings of the Federal Reserve Board 520 Law department 522 Business conditions throughout the Federal Reserve districts 528 Gold settlement fund transactions 548 Operation of the check clearing and collection system 550 Average rate and maturity of paper discounted by the Federal Reserve Banks each month 551 discount operations of the Federal Reserve Banks 552 Resources and liabilities of tho Federal Reserve Banks 559 Federal Reserve note accounts of Federal Reserve Banks and agents 562 Member bank condition statement 564 Earnings on investments of Federal Reserve Banks 569 Gold imports and exports 570 Discount rates 570 Digest and index of informal rulings of the Board, Jan., 1917-Apr. 1918 571 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BULLETIN VOL. 4 JUNE 1, 1918. No. 6 STATEMENT OF THE PRESIDENT ON THE NEED OP THRIFT AND THE PURCHASE OF SECURITIES. This war is one of nations—not of armies—and all of our 100,000,000 people must be economically and industrially adjusted to war conditions if this Nation is to play its full part in the conflict. The problem before us is not primarily a financial problem, but rather a problem of increased production of war essentials and the saving of the materials and the labor necessary for the support and equipment of our Army and Navy. Thoughtless expenditure of money for nonessentials uses up the labor of men, the products of the farm, mines, and factories, and overburdens transportation, all of which must be used to the utmost and at their best for war purposes. The great results which we seek can be obtained only by the participation of every member of the Nation, young and old, in a national concerted thrift movement. I therefore urge that our people everywhere pledge themselves, as suggested by the Secretary of the Treasury, to the practice of thrift; to serve the Government to their utmost in increasing production in all fields necessary to the winning of the war; to conserve food and fuel and useful materials of every kind; to devote their labor only to the most necessary tasks, and to buy only those things which are essential to individual health and efficiency; and that the people, as evidence of their loyalty, invest all that they can save in Liberty bonds and war-savings stamps. The securities issued by the [Treasury Department are so many of them within the reach of everyone that the door of opportunity in this matter is wide open to all of us. To practice thrift in peace times is a virtue and brings great benefit to the individual at all times; with the desperate need of the civilized world to-day for materials and labor with which to end the war, the practice of individual thrift is a patriotic duty and a necessity* I appeal to all who now own either Liberty bonds or war-savings stamps to continue tc> practice economy and thrift and to appeal to all who do not own Government securities to do likewise and purchase them to the extent of their means. The man who buys Government securities transfers the purchasing power of his money to the United States Government until after this war, and to that same degree does not buy in competition with the Government. I earnestly appeal to every man, woman, and child to pledge themselves on or before the 28th of June to save constantly and to buy as regularly as possible the securities of the Government, and to do this as far as possible through membership in war-savings societies. The 28th of June ends this special period of enlistment in the great volunteer army of production and saving here at home. May there be none unenlisted on that day, (Signed) WOODROW WILSON. MAY 29, 1918. 483 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

484 FEDERAL BESERVE BULLETIN. JUNE 1,1918. REVIEW OF THE MONTH. Federal Eeserve Bank. First loan. Second loan. Third loan. Total. Final figures for subscriptions to the third Liberty loan show an aggregate Boston $265,478,000 S407,714,000 $354,537,250 $1,027,729,250 New York 593,987,000 1,151,185,000 1,114,930,700 2,860,102,700 <* $4,170 019,650, the total Philadelphia... 164,760,000 295,127,000 361,963,500 821,850,500 Cleveland 201,977,000 409,787,000 404,988,200 1,016,752,200 number 01 subscriptions, as Kichmond 88,594,000 182;582,000 185,966,950 457,142,950 Atlanta.. 46,283,000 82;943,000 136,653,350 265,879,350 already announced, being not far from 17,000,- Chicago.. 272,702,000 525.956,000 608,878,600 1,407,536,600 St. Louis 65,029,000 150i122,000 199,085,900 414,236,900 000. This satisfactory result was achieved not- Minneapolis 53,759.000 131;972,000 180,826,350 366,557,350 Kansas City.... 62,183,000 136;549,000 202,301,050 401,033,050 withstanding the fact that the country will Dallas 36.663; 000 74,567,000 115,395,200 226,625,200 have had to meet, since the second Liberty San Francisco.. 149^045,000 260; 262,000 286,577,450 695,884,450 loan and to and including the month of June, Total 2,000,000,000 3,808,766,000 4,170,019,650 9,978,785,650 income and excess-profits taxes to an esti- What is perhaps even more encouraging mated amount of approximately $3,000,000,- _ . „ than the wide distribution and 000, making a total to accrue to the Treasury, mTlhe b anfks and , , . ,. -, from such taxes and from the third Liberty the loan neavy oversubscription shown by the returns of the third loan, of approximately $7,000,000,000. In Liberty loan is the fact that there has been, the first campaign, conducted one year ago, so far as present indications go, gratifyingly bonds were sold to approximately 4,500,000 little use of bank accommodations in the people; the second Liberty loan was taken taking of the bonds. Of the entire amount of by about 9,500,000 people; and these figsubscription received, it is estimated that ures are now again increased to 17,000,000. more than 80 per cent is already fully paid. Detailed returns showing the actual subscrip- Returns from Federal Reserve Banks emtions and the percentage of the quota assigned bodied in the weekly statement of the Federal to each district, that has been taken therein, Reserve Board bear out the belief that the are as follows: recourse to the Reserve Banks in connection with the placing of the third Liberty loan has District. Q m u il o li t o a n i s n . Subscriptions. P o e f r c q e u n o ta t g a. e thus far been comparatively slight. Detailed statistics are not yet available to show the amount of bonds that is being carried through the Minneapolis 105 3180,826,350 172 Kansas City 130 202,301,050 156 aid of advances from the banks, but informal St. Louis 130 199,085,900 153 Atlanta 90 136,653,350 151 reports from the various Federal Reserve dis- Philadelphia 250 361,963,500 144 Dallas 80 115,395,200 144 tricts indicate that the reliance upon the Fed- Chicago 425 608,878,600 143 Richmond 130 185,966,950 143 eral Reserve Banks for rediscounts intended Boston 250 354,537,250 142 San Francisco 210 286,577,450 136 to carry Government bonds is smaller than has Cleveland 300 404,988,200 135 New York 900 1,114,930,700 124 been supposed and that the various member United States Treasury 17,9.15,150 banks have not been called upon unduly to as- Total 3,000 4,170,019,650 sist individual subscribers. Taken in conjunction with general and apparently well-founded The foregoing figures are subject to slight reports to the effect that the process of paymodifications upon receipt of final audited ing income and excess-profits taxes will involve figures from the several districts. Any such much less inconvenience than had been supadjustments will not materially affect the posed, the bank situation as respects the third total. Liberty loan is encouraging. There may easily The following figures, also, are interesting as be an increase in the applications for rediscounts, showing the distribution of final allotments by protected by Government obligations, in some districts, during the three loans, viz: Federal Reserve districts, as the pressure upon Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNK 1. 191.8. FEDERAL RESERVE BULLETIN. 485 the several banks for loan funds increases with desirability of this method of anticipating the the advance of the season. This indeed is proceeds of loans, and suggests that when carealready predicted by some careful observers fully employed it has the effect of producing a in the several localities. There seems, how- steady flow of available free funds into the ever, to be little ground for thinking that such hands of the Government, there to be as applications will be unduly heavy. The whole steadily used and disbursed for current exexperience is expected to demonstrate that penses on account of salaries and commodities. the process of selling the certificates will have Of the old issues of certificates there still reoperated to bring in these large sums with a main (on May 31) to be liquidated $1,624,minimum of inconvenience. The certificates 000,000, while of the proceeds of income and have been very widely distributed among the excess-profits taxes available during June and larger taxpayers. The prosperous condition of estimated at $3,000,000,000 to $4,000,000,000, business in general and the high returns ob- there have been already paid, through the purtained by producers in practically every- line of chase of the so-called tax certificates issued business have enabled the small taxpayers, in in, anticipation of revenues, approximately a very large percentage of cases, to provide for $1,500,000,000. the payment of their taxes even at this early More and more as the Government's financing date, while the larger taxpayers, as already sug- proceeds, it becomes evident gested, will be materially assisted by the use The question of h t success will be best if not t a saving. of the certificates which they have acquired. only secured through the devel- The outcome of the Treasury operations deopment of a systematic policy of saving in con- Use of certifi- signed to anticipate the prosumption accompanied by the curtailment of cates of indebted- ceeds of the third Liberty loan credit to the less essential industries. The ness. through the issue of certificates Board has, by every means in its power, enof indebtedness has already been described in deavored to impress upon Federal Reserve Banks the issue of the FEDERAL RESERVE BULLETIN and, through them, upon member banks of the for May 1. As there set forth, the total amount system, the desirability of endeavoring, by every of certificates already issued and not liquidated conservative and legitimate means, to bring aggregated about $2,610,000,000. This left, of about the reduction of borrowing and of capital the proceeds of the third Liberty loan, $1,560,- investment for businesses which, while entirely 000,000 available for current uses. Since that desirable and perhaps even beneficial in themdate the two issues of certificates of indebted- selves, are not necessarily connected with or ness maturing on May 9 and 28, amounting to conducive to the success of the war. The mat- $500,000,000 each, have been redeemed. On ter was thoroughly discussed at the meeting of the other hand, the Treasury has placed during the Federal Advisory Council on May 20 and the month $183,767,000 of tax certificates, the 21, and the Board was then advised that deissue being closed on May 31. Balances cided progress is being made in a number of on hand in the several Federal Reserve districts. In other districts there is a less- Banks and in special depositaries, as of May marked appreciation of the necessity of coopera- 24, amounted to $1,486,000,000. Inasmuch as tion. The belief that business may go on as the current expenditures of the Government usual still maintains its hold upon mam7 of the United States, as shown by Treasury re- minds, with the result that some establishments turns, are now running at the rate of $1,500,- are still endeavoring, in not a few parts of the 000,000 per month, a resumption of the issue country, to maintain the volume of their sales of certificates of indebtedness in the com- and to encourage lavish buying on the part of paratively near future may naturally be ex- their customers. Manufacturers in many lines pected. Experience is again showing the are, however, exhibiting an appreciation of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

486 FEDERAL RESERVE BULLETIN. JUNE 1, 1918. real necessities of the case and are seeking in without producing undesirabla consequences. numerous instances to convert their plants— Creation of additional bank credit, for the purat least in part—to the production of articles pose of buying bonds or paying taxes by obof an unmistakably essential character, cur- taining bank accommodations rather than by tailing the output of the luxury trades, while saving, results only in a technical increase of abandoning certain lines altogether. It would purchasing power, since it is not based upon now seem that some of the principal obstacles a commensurate increase in the production of to progress in this important movement are goods—in other words, is not offset by genuine found in the disposition of some, who are em- savings. The consequence of making such ployed at higher wages than ever before, to additions to bank credits is necessarily an in maintain or even to enlarge purchases of lux- creased tendency toward the bidding up of prices, uries as well as of necessaries. and results in the menace called "inflation." The President, in his statement with refer- Whenever the volume of current purchasing ence to thrift, printed on the power, in terms of money, &*t PaSe of the Present .num~ whether in the form of actual ber, has expressed in unmistak- currency or in the form of able terms the necessity of saving as a means credit, grows or is increased faster than the of advancing our war objects. The fundamen- volume of current and available goods, the retal basis of the theory which underlies the sulting situation may be ascribed to the excess doctrine of thrift is being better and better of currency or credit, or both, above normal reunderstood by the public. Some phases of the quirements, or, more briefly, to the distention situation, however, are still subjects of discus- of currency and credit. This alteration of the sion or not generally admitted. It should be proportion between existing goods and purevident, however, that the needs of the Gov- chasing power eventually results in increase of ernment are reducible to a requirement for prices, not necessarily in the exact degree in present services and commodities, and that it which the volume of purchasing power has been can obtain these only in so far as a surplus of increased but in the degree in which it is both is produced over and above the amount actively used to effect the purchase and transconsumed or required for other purposes. fer of goods. When loans are made by Wide distribution of the third Liberty loan, banks upon the security of bonds or other claims to the product of future industry attained with only a moderate recourse to bank or its share in fixed capital, the tendency credit, shows that a large proportion of the is to advance prices. Funds obtained by population is actually cooperating in the task the Government, in the form of such credits, of paying the cost of the war out of current result therefore in the bidding up of the earnings and savings by reducing its consumpprices of commodities, especially of those tion of dispensable goods. The requirements for which the Government has most need. of the Government are, however, steadily on the Such advance in prices, in so far as relates to the increase, as shown by the fact that estimated necessaries of life, almost unavoidably leads to expenditures for the coming fiscal year 1918-19 an advance in wages, and when such advances are now about $24,000,000,000. There is no in wages are again used in enlarging consumpsound basis for the belief that it is possible tion, the tendency toward price advances is to obtain these needed funds through loans still further aggravated. Saving, on the other placed with banks or through taxation of a hand, results in placing at the disposal of the character that would result in compelling tax- Government, either directly or indirectly, the payers to rely upon banks for the means with surplus of goods produced over goods conwhich to meet their dues to the Government sumed and enables the Government to provide Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNK 1,1918. FEDERAL RESERVE BULLETIN. 487 itself with the articles it requires without dis- as a caution to member banks, even though the turbing the basis of prices. volume of applications for rediscount might not The necessity of a well-distributed system be very materially reduced as far as dependent of taxation, both as a method of obtaining merely upon seasonal needs and requirements. additional revenues and as a measure of pre- Under the Federal Reserve system, as has been venting inflation and avoiding waste, was set previously explained, it is the Board's policy to forth by the President in an address to Con- make, so far as practicable, an adjustment of gress on May 27, from which is here quoted paper among Federal Reserve Banks such as the following paragraph: will bring about a relatively uniform reserve condition at all Federal Reserve Banks. The Additional revenues must manifestly be provided for. It would be a most unsound policy to raise too large a pro- tendency of so doing is to promote greater portion of them by loans, and it is evident that the four equalization among the banking reserves of the billions now provided for by taxation will not of themselves several Federal Reserve districts. The sucsustain the greatly enlarged budget to which we must cess of this policy, however, is based upon the immediately look forward. We can not in fairness wait adoption of similar standards of rediscounting until the end of the fiscal year is at hand to apprise our people of the taxes they must pay on their earnings of the in each Federal Reserve district, and upon the present calendar year, whose accountings and expenditures regulation of rediscount applications in such a will then be closed. We can not get increased taxes un- way as to prevent applicants in any one disless the country knows what they are to be and practices trict from gaming the advantage of those elsethe necessary economy to make them available. * * * where located by reason of access to an undue Enormous loans freely spent in the stimulation of industry share of reserve funds. The Federal Reserve of almost every sort produce inflations and extravagances which presently make the whole economic structure ques- system necessarity counts largely upon the cotionable and insecure and the very basis of credit is cut operation of its member banks to keep redisaway. Only fair, equitably distributed taxation of the count obligations to the minimum that will widest incidence and drawn chiefly from the sources enable such banks to comply with their ordiwhich would be likely to demoralize credit by their very nary requirements. The raising of rates at abundance can prevent inflation and keep our industrial system free of speculation and waste. We shall naturally Kansas City and Richmond served the purpose turn, therefore, I suppose, to war profits and incomes and of giving notice to the members of this need for luxuries for the additional taxes. cooperation but did not prevent them from During May important changes in rates of getting assistance whenever their condition or discount occurred at two banks legitimate demands called for it. Rates of disonly—Kansas City and Rich- Material progress has been made, since the count. mond—the general rate sched- adoption of the act providing ule determined upon during April continuing Silver situa- for the breaking up of the silver tion. in effect at all others. The question of rates dollars held behind silver cerof discount is of primary importance at the tificates, in carrying out the operations therein present time, but market conditions are anom- authorized. With a view to being ready for alous owing to the fact that all changes must be any eventuality growing out of these transacmade, upon full consideration of the necessity tions, orders have been placed for the printing of facilitating Government financing, so that it of Federal Reserve bank notes in the $1 denomiis not possible to regulate rates upon a strictly nation in the amount of $200,000,000 and in commercial basis. The advances in rates at the $2 denomination in the amount of $50,000,- Kansas City and Richmond were made upon 000. The designs for these notes have been the request of the Federal Reserve Banks of approved and the making of the plates has those cities, because of the heavy volume of pa- been practically completed, so that it may be per which was steadily offering itself for redis- expected that a full supply of $1 and $2 bank count at those points. It was the belief of the notes will soon be available to make good Board that the applications should be granted any deficiency that may result from the retire- 62161—18 2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

488 FEDEEAL RESERVE BULLETIN. JUNE 1, IU18. mont of the old silver certificates. These notes During the four weeks between April 26 and have been allotted to the several Federal Re- Operations of MaF 24 operations of the Fedserve Banks upon a pro rata basis previously the Reserve era! Keserve Banks continued determined with respect to the printing of notes Banks. practically on an even scale, of the $5 denomination. In order further to the total earning assets on the last named date facilitate the process of withdrawing silver cer- 1,277.2 millions being slightly below the cortificates from circulation, the Board moreover responding total of 1,286.2 millions shown for suggested to the Federal Reserve Banks the the initial date. sending out of a letter to member banks, asking On May 10, the Friday following the conthat they cooperate with the Government by summation of the third Liberty loan, total turning in their present suppfy of $5 silver cer- investments reached the record total of 1,373.8 tificates and suggesting that at a later time, millions, nearly 45 per cent of which was comwhen the new $1 and $2 notes are available, a posed of war loan paper, i. e., paper directly similar request would be made with respect to traceable to war loan financing operations and silver certificates of these lower face values. comprising member banks7 collateral notes Cooperating still further with the efforts of the and customers' paper, supported by United Treasury Department in'this matter, the Gold States war bonds or certificates of indebtedness. Export Committee of the Federal Reserve Total discounts on hand rose from 901.7 Board has, moreover, endeavored to induce millions on April 26 to 939 millions on May 10, applicants for permission to carry paper curand stood at 923.3 millions two weeks later. rency out of the country to take United States Practically the same development is shown by notes of the $1 and $2 denominations, whenever the New York Reserve Bank, which reports possible, rather than silver certificates, thereby an increase in the holdings of discounted bills retaining as many of the latter within reach as from 434.3 millions on April 26 to 450 milconditions would permit. lions on May 10 and a slight decrease to 442.2 For the four weeks ending May 17 the net millions on May 24. The largest relative inoutward gold movement totaled creases in discount operations during the ^Movement of $509,000, as compared with month are shown for the Minneapolis and gold. $987,000 for the preceding five Kansas City banks, the former increasing its weeks. Gold imports for the four weeks holdings of discounted paper from 14.6 to 24 totaling $2,213,000 came largely from Canada, millions and the latter from 43.9 millions to Mexico, and Colombia, while gold exports 71.6 millions. War loan paper, as defined totaling $2,722,000 were consigned chiefly to above, constituted about 65 per cent of the Mexico, Venezuela, and Canada. total discounts held on May 24, as against over The gain in the country's stock of gold since 70 per cent on April 26. At the New York August 1, 1914, was $1,046,623,000, as may bank this proportion was considerably higher, be seen from the following exhibit: ranging between 83 per cent on May 10 and 87 per cent on April 26. [000 omitted.! Total acceptances on hand likewise show a slight though continuous decrease, all the Excess of Imports. | Exports. imports banks except those at Boston and New York over exports. reporting reductions in the amounts of purchased paper held, thus causing a further con- ... - . . J A a u n g . . 1 1 f t o o D D e e c c . . 3 3 1 1 , , 1 1 9 9 1 1 5 4 • : $ 4 2 5 3 1 , , 2 9 5 5 3 5 ! i $ 3 1 1 0 , 4 4 , 2 97 6 2 i? 4 8 2 1 0 , , 7 5 1 2 9 9 centration of this class of paper at the New Jan. 1 to Dec. 31,1916 ! 685,745 I 155,793 529,952 York bank from about 40 per cent on April Jan. i to Dee. 31, 1917 i 553,713 ! 372,171 181,542 Tan. 1 to May 17, 1918 : 12,774 \ 16,407 13,633 26 to nearly 50 per cent on May 24. Total i 1,727,440 j 680,769 1,046,671 But little change is shown in the total of 1 Excess of exports over imports. United States bonds held by the banks, while Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

3, 10J 8. FEDERAL RESERVE BULLETIN". 489 the banks7 holdings of United States notes Considerable changes are shown in the holdand certificates show a reduction from 37.4 to ings of United States bonds (other than circula- 32.5 millions. tion bonds) and of certificates of indebtedness, During the period under review the banks7 the former showing an increase of 294.4 millions gold reserves increased from 1.827 to 1,898 and the latter a decrease of 344.6 millions. millions while their net deposits, following Circulation bonds show a decrease of about 1 practically the same course as the banks7 total million, while total United States security investments, show about the same figures for holdings declined from 2,106.8 to 2,055.5 milthe beginning and end of the four-week period, lions. As against this decrease the banks viz, 1,556.3 and 1,557.6 millions. Federal Rereport an increase of their loans secured by serve notes in circulation increased from 1,526.2 United States war bonds and certificates of to 1,578.6 millions, or by 18.6 millions less indebtedness from 320.2 to 501.6 millions. than the banks7 gold reserves. The result is Corresponding figures for 120 banks in the seen, in the rise of the ratio of total reserves to three central reserve cities indicate practically aggregate net deposit and Federal Reserve no change in their holdings of circulation bonds, note liabilities from 61.3 to 62.4 per cent. a net increase of 164.2 millions in other United In the following table are shown the changes States bonds, mainly Liberty bonds, net liquibetween April 26 and May 24, 1918, in the dation of 216.9 millions of certificates of intotals of discounted and purchased bills held debtedness and an increase of 124.1 millions in by each of the Federal Reserve Banks, also changes between the two dates in the total loans secured by United States war obligations. holdings of other classes of investments: For the member banks in Greater New York increases of 120.4 millions in the holdings of [In thousands of dollars:i. e., 000 omitted.] Liberty bonds and of 121.7 millions in loans Federal Reserve Bank. Apr. 26. May 24. inc N re e a t se. i 1 de N c e re t ase. supported by United States war securities are shown, as against a reduction of over 187 mil- Boston. . 70,913 63,591 : 7,322 lions in Treasury certificates of indebtedness. Now York 555,283 581.158 25,875 : Philadelphia 6.1,654 64,128 2,474 ; Aggregate holdings of United States securi- Cleveland 78,840 64', 845 i 13,995 Richmond 52,510 48,552 i 3,958 ties (exclusive of circulation bonds) and loans Atlanta 29,403 28,383 i 1,020 Chicago 136,555 121.782 j 14.773 supported by such securities show an increase St. Louis 55,037 37, 769 1 17,268 Minneapolis 26,137 28,796 2,659 i for the four weeks from 2,159,1 to 2,290.3 Kansas City 51,044 73,023 21,979 ! Dallas.... 30.722 28,930 ! 1,792 millions. During the same period member San Francisco 56,489 60,563 4,074 1 banks in Greater New York show an increase Total 1,204,587 1,201.520 i 3,067 United States long-term ! of these items from 1,269.9 to 1,324.9 millions. securities 41,446 42,067 621 United States short-term If it is remembered that the figures of reserve securities 37.407 32,476 I 4,931 Other earning assets 2,722 1,151 i 1,571 carried b}^ reporting banks constitute about Total investments 78 per cent of the total members' reserve held 1,286,162 1,277,214 I 8,948 deposits shown by the Federal Reserve Banks Some indication as to the part taken by the for corresponding dates, some idea may be banks of the country in the had of the amount of war securities and war membirbanks. fencing of the Government's paper held at present by the banks of the more recent loan operations, country and the relative share of the New culminating in the third Liberty loan, is af- York banks in the total holdings. forded by the reports from member banks in Total loans and investments of reporting about 100 leading cities showing their principal banks, exclusive of permanent investments, assets and liabilities each week between April show an increase from 12,412.7 to 12,608.7 19 and May 17. millions, while the share of war securities and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

490 FEDERAL RESERVE BULLETIN. JUNE 1,1918. loans supported by such securities in the total similar fluctuations are noted, the maximum just given rose from 17.4 to 18.2 per cent. For of 109.5 millions on May 10 being followed by the Greater New York banks total loans and a decline to 49.2 millions on May 17. investments show an increase from 4,979 to On May 20-21 occurred the regular quarterly 5,048.7 millions, while the proportion of war meeting of the Federal Advisecurities and war paper to total investments sor^ C o u n^ all members being of these banks rose from 25.5 to 26.2 per cent. present with the exception of Immediately following the close of the third Mr. Norwood, the representative of the fifth Liberty loan a considerable decline in net district. Two joint sessions were held with the demand deposits is noted, the May 17 total, Federal Reserve Board and much attention was 8,922.6 millions, being 324.9 millions below given to a discussion of the question of the rethe corresponding April 19 total. For the striction of the less essential credits and the Greater New York banks the decrease was problem of rediscount rates, as well as of general 118.2 millions and for the member banks in all borrowing and financial conditions in the sevthree central reserve cities, 173.1 millions. eral districts. The Federal Advisory Council Time deposits of all reporting banks show but also held a joint session with the directors of a slight decline, from 1,397.5 to 1,386.7 mil- the new War Finance Corporation. There was lions, the corresponding decrease for central re- agreement throughout these sessions that, serve city banks being from 444.3 to 412.4 mil- while a condition of general activity and full lions. On the other hand, Government deposits employment existed throughout the country, at all reporting banks rose from 633.6 to 1,284.1 it would be necessary to press the campaign for millions, at central reserve city banks, from restriction of credit and for individual saving to 386.4 to 744.1 millions, and at the New York the utmost. The banking situation was probanks alone, from 329.9 to 593.7 millions. nounced entirely sound, due largely to the Reserves of all reporting banks (all with hearty response, on the part of the public, to the Federal Reserve Banks) declined from the demands for general absorption of Liberty 1,167.2 to 1,148.1 millions, while cash in vault loan obligations by private purchasers with as gained slightly from 370.4 to 373.1 millions. little aid from the banks as practicable. An For all reporting banks the ratio of com- especially interesting feature of the discussion bined vault cash and reserve to total, including was the review of legislation on banking now Government deposits, works out at 13.6 per pending in both Houses of Congress. The cent on April 19, compared with 13.5 per cent Council expressed the opinion that there was no for May 17. For the central reserve city occasion for the adoption of the proposed measbanks this ratio shows a decline from 14.8 to ure relating to the guaranty of bank deposits. 14.2 per cent. Excess reserves, in the calcula- The Board adheres to the view expressed by tion of which no account is taken of Govern- it in the past that needed relief against the ment deposits, stood at 61.6 millions on hardships, which depositors of failed banks now April 19 and after some fluctuations reached suffer, would be adequately provided if a fund a total of 161.5 millions on May 10, when total were established to secure the prompt and effecinvestments as well as reserves were at their tive liquidation of the sound assets of failed highest. At the end of the following week, as banks. Such a fund would enable the deposithe result mainly of reductions in reserves and tors of failed banks to receive without delay a cash in vault, excess reserves fell off to 88.3 cash distribution for a substantial proportion millions. For the central reserve city banks of their claims, pending final liquidation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESEBVE BULLETIN. 491 Indexes of Business Conditions. Meeting of Advisory Council. Rapid changes are now going on in every The usual quarterly meeting of the Federal department of industry in consequence of the Advisory Council was held in Washington on reorganization necessary for war and in prepa- May 20 and 21. A series of topics relating to ration for future development of trade. Many existing financial and banking conditions was of these bid fair to continue after the close of taken up for consideration and, after discusthe war itself. There is thus an increasing need sion, opinions were expressed by the Council for the development of some method of meas- and formerly reported to the Board. The uring in an authoritative way changes in busi- topics discussed and the conclusions arraived ness conditions, movements of prices, and other at were as follows, viz: alterations in the commercial outlook occurring j Topic No. 1.—Curtailment of unnecessary credits. from time to time, especially in their relation to | Recommendation: The Federal Advisory Council conbanking and credit. The Federal Reserve | curs in the principle laid down and the recommendations Board, therefore, has in contemplation plans for ! made by the Federal Reserve Board in regard to the conthe extension of its statistical and reporting servation of credits, and we urge upon the bankers of the country the great importance of their hearty cooperation service, with a view of establishing a series of in the adoption of the policy as outlined by the Federal indexes of industrial, business, and financial Reserve Board in its April Bulletin. conditions. It is desired that these indexes be Topic No. 2.—The proper means of extending banking as nearly scientific and authoritative as they can operations in foreign countries. This should involve a be made. The Board will endeavor to expand discussion of foreign branches of national banks having a million dollars or more of capital and surplus, and banks and coordinate the statistical service of the organized to do a foreign banking business in which several Federal Reserve Banks in accordance national banks are stockholders to an amount not exceeding with a general plan on some common basis de- 10 per cent of their capital and surplus. signed to adapt itself to the special conditions Recommendations: The Council believes that member obtaining in each of the several districts. This banks and banks authorized to do a foreign business in which member banks are stockholders should be encourgeneral statistical or reporting service will be aged to take care of the foreign business of the country under the direction of the Board in order that during the continuance of the war. uniformity and harmony of results may be ob- The Council reaffirms its statement made on February tained. Further details of the plan will be an- 19, 1917, as follows: "The Council recommends that the nounced at an early date. foreign business of the Federal Reserve Banks should for the present be conducted through correspondents, and that neither agencies nor branches should be established Class C Director Named for Richmond Bank. in foreign countries by any Federal Reserve Bank until The Federal Reserve Board on May 24 world conditions are more settled and until the efficiency of the service rendered by correspondents be thoroughly elected Howard Bruce, of Baltimore, as a class tested." C director of the Federal Reserve Bank of Topic No. 3.—Foreign agencies of Federal Reserve Richmond. Mr. Bruce succeeds Mr. Gouver- Banks and the proposition to establish a Government forneur, of North Carolina, resigned. eign exchange bank. On this subject an interesting Mr. Bruce is a native Virginian, a graduate of report has been submitted by a committee of the Chamber of Commerce of the United States, of which I presume you the Virginia Military Institute. For the past have a copy. 16 years he has been connected with the Recommendation: The Council is of the opinion that it Bartlett-Haward Co., of Baltimore, probably would be unwise under present conditions to establish a the largest employers of labor in Baltimore, Government foreign exchange bank or for the Federal and is now president and principal owner of Reserve Board to undertake to regulate foreign exchange operations further than it is now doing in connection with that company. In the third Liberty campaign the Treasury Department. We unanimously indorse the every employee of this company, numbering recommendations of the Federal Reserve Board that Fedover 12,000, were buyers of Liberty bonds. eral charters be granted to banks which are now engaged Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

492 FEDERAL RESERVE BULLETIN. JU.NK 1, 15)18. in foreign banking business the stock of which is owned DISTRICT NO. 1. by member banks. Trustee, executor, administrator, and registrar of stocks Topic No. 4.—Senate bill No. 4426 which the Board and bonds: understands has been favorably reported by the Senate Blackstone National Bank, Uxbridge, Mass. Committee on Banking and Currency. Recommendation: We are opposed to the guaranty of DISTRICT NO. 3. bank deposits in any form, believing it to be wrong in Trustee, executor, and administrator: principle. Inasmuch as the official report of the Comp- Atglen National Bank, Atglen, Pa. troller of the*Currency shows the Joss to depositors in failed Trustee, executor, administrator, and registrar of stocks national banks to be less than three one-thousandths of 1 and bonds: South Bethlehem National Bank, South Bethlehem, per cent during the last three years and with the Govern- Pa. ment offering the highest possible security to induce the DISTRICT No. 4. use of hoarded funds the necessity of such legislation is not apparent. The Council reaffirms its declaration of Registrar of stocks and bonds: April IS, which said: "A plan might, however, be devised Northern National Bank, Toledo, Ohio. by the Federal Reserve Board which would provide for prompt relief to be given depositors of failed member DISTRICT NO. 5. banks." (Passed with one dissenting vote.) Trustee, executor, and administrator: Topic No. 5.—Bankers' acceptances. First National Bank, Harrisonburg, Va. Recommendation: This Council is of opinion that the DISTRICT No. 7. use of bankers' acceptances should be encouraged and Trustee, executor, administrator, and registrar of stocks developed as it will be of great service to the country in and bonds: Farmers National Bank, Edinburg, Ind. meeting its necessary financial, requirements, particularly First National Exchange Bank, Port Huron, Mich. during the period of the war. In order to accomplish this legislation may be necessary granting the banks greater DISTRICT NO. 8. accepting power. Every effort should be made to encourage and develop a broad open discount market for Trustee, executor, and administrator: First National Bank, Paducah, Ky. these acceptances. Topic No. 6.—Discount rates. DISTRICT NO. 9. Recommendation: It is the opinion of the Council that in view of the large payments for taxes and Government Trustee, executor, and administrator: bonds which will be made shortly it is undesirable at this First National Bank, Forman, N. Dak. time to change the discount rates at the Federal Reserve DISTRICT NO. 10. Ban Irs. Trustee, executor, administrator, and registrar of stocks and bonds: Acceptances to 100 Per Cent. Stock Growers National Bank. Cheyenne, "Wyo. Since the issue of the May BULLETIN the following banks have been authorized to accept Progress m Retiring Silver Certificates. drafts and bills of exchange up to 100 per cent of their capital and surplus: Since the adoption of the act of April 23, authorizing the retirement of silver certificates First National Bank, Terrell, Tex. and the breaking up of silver dollars held be- Beacon Trust Co., Boston, Mass. Hamilton National Bank, Chattanooga, Tenn. hind them in order to supply bullion for export, the authorities of the Treasury Department have been making steady progress in the Fiduciary Powers. application of the law. In this the Federal The applications of the following banks for Reserve Board has cooperated. Two probpermission to act under section ll-(k) of the lems require solution; first, the actual retire- Federal Reserve Act have been approved since ment of the silver certificates themselves, and the issue of the May BULLETIN : second, the preparation and issuance of Fed- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

3. 1918. FEDERAL EESEKVE BULLETIN. 493 eral Reserve bank notes to take their place. to request the Secretary of the Treasury from time to time In connection with the issuance of Federal to deposit with the Treasurer of the United States, through the Comptroller of the Currency for account of the respec- Reserve bank notes it was necessary to pretive banks, such amounts of United States certificates of pare new plates and to determine upon the disindebtedness as may be necessary to secure, after all the tribution of the issues upon some pro rata basis one-year 3 per cent notes have been deposited, the Federal between Federal Reserve Banks. It was de- Eeserve bank notes which will be issued in substitution cided to apportion the notes among the banks for silver certificates withdrawn. The Treasurer of the United States can thereupon charge the account of each upon the same basis as Federal Reserve notes Federal Eeserve Bank, as a deposit in his general account, and to enlist the assistance of Federal Reserve with the amount of the purchase price of the certificates. and member banks in undertaking the with- In order to carry out this plan the Board requests the drawal of silver certificates, first in the higher Federal Eeserve Banks to call for Federal Eeserve bank denominations and later when the new bills had notes in the amounts indicated below and to deposit as security with the Comptroller of the Currency an equivbeen prepared in the denominations of one alent amount in one-year 3 per cent Treasury notes: and two dollars. Philadelphia $1,000,000 The following letter, transmitted by Gov. Cleveland 2,660,000 Harding to Federal Reserve Banks on May Richmond 1,000,000 Atlanta 1,141, 000 24, furnished instructions regarding the first Chicago 2, 962, 000 steps in the operation of retiring the old notes Minneapolis 880.000 Kansas City 1, 374.000 and substituting the new ones in their place: Dallas 1,307; 000 San Francisco 1, 500,. 000 MAY 24, 1918. As soon as Federal Eeserve bank notes for all of the DEAR SIR : For your information there is inclosed a copy banks are available the Board will make the proper adjustof a statement issued by the Division of Loans and Curment between the banks. rency of the Treasury, showing silver certificates withdrawn from circulation and canceled, and silver dollars Following is a typical letter that is being melted or broken up during the week ended May 17. sent to member banks by Federal Reserve You will notice that as a result of these operations the Banks: circulating medium has been decreased by $37,881,374. In order to avoid any shortage in small bills, the Board To the cashier of the hank addressed: is of the opinion that Federal Eeserve Banks should, act- DEAR SIR: For the purpose of conserving the Nation's ing together as a system, replace withdrawals of silver gold supply, permitting the settlement in silver, where dollars and silver certificates by the issue of Federal Ee- practicable, of adverse trade balances, providing silver serve bank notes. It is the intention of the Board to keep for subsidiary coinage and commercial use, and assisting the Federal Eeserve Banks informed each week of the Allied Governments in the war against Germany, Congress amount of silver and silver certificates withdrawn and to has recently authorized 3350,000,000 of the silver dollars allot to each Federal Eeserve Bank its proper proportion held in the United States Treasury to be broken up and of Federal Reserve bank notes as nearly as possible on the sold as bullion. As most of the silver thus held is reprebasis of distribution outlined in its letter of April 29th, sented by silver certificates in circulation, it can only be X-917. obtained by the return of silver certificates to the Treasury It is desirable that Federal Eeserve Banks should get for cancellation. their Federal Eeserve bank notes as received into cir- The withdrawal of silver certificates from circulation is culation before issuing additional Federal Eeserve notes. not intended to be permanent, as the act provides that For the present it will not be possible, however, to adhere the Director of the Mint, as soon as practicable after a strictly to the basis of distribution outlined in the letter sale of silver bullion has been made, shall purchase a like of April 29, because the amount of Federal Eeserve bank quantity of silver to take the place of the bullion sold. notes available in the various districts is not uniform, and To provide temporarily the necessary circulating medium three of the Federal Eeserve Banks have no bank notes during the interim between the withdrawal of the silver available at all. A statement is inclosed showing the certificates and their subsequent reissue when the silver amount of Federal Eeserve bank notes available for each supply has been replenished by purchases of silver, bank on May 20. Federal Reserve Banks will issue Federal Reserve bank It has been deemed advisable that Federal Eeserve notes in denominations of $1, $2, $5, and upward. These Banks should first deposit their one-year 3 per cent notes notes will be obligations of the Federal Reserve Banks as security for their Federal Eeserve bank notes and that secured by United States certificates of indebtedness or they give power of attorney to the Federal Eeserve Board bonds and similar otherwise to national-bank notes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

494 FEDEEAL RESERVE BULLETIN. JUNE 1,1918. We ask the banks of this district to cooperate with the departments of the Federal Government, the Government by furnishing us with their present supply leading stock exchanges, the American Bankers' of $5 silver certificates, which can be replaced in circula- Association and the Investment Bankers' Assotion at once by Federal Reserve notes, Federal Reserve ciation of America. bank notes, or United States notes. In a few weeks, Detailed report made by the committee is as when Federal Reserve bank notes of the $1 and $2 denom- follows: inations are ready, a request will also be made that silver certificates in these denominations be sent in. Municipal. Public Industrial. Tola]. Will you not, therefore, please sort out of your cash and utility. forward to us, at our expense, all silver certificates of $5 and upward which you may have on hand or receive from Number considered 192 62 107 361 Number approved. 140 60 78 278 time to time, in return for which we will either— Number disapproved . 34 o 24 60 (a) Furnish you, free of expense, other currency of the N umber curtailed.. 18 0 5 23 same or larger denominations, as you may prefer; or A Am m o o un u t n c t o n d si i d s e a r p e - d$86,878,512 §172,069,605 8219,510,269 8478,458,386 (6) Place the amount to your credit in this bank, if a proved 19,791,665 6,000,000 39,900,000 65,691,665 member bank, or in any designated bank in this district. Aggregate approved. 67,086.847 166,069,605 179,610,269 412,766,721 We feel confident that you will be willing to cooperate Less "refunding".. 21,392,312 125,860,284 311,411,900 258,664,496 with the Government in furnishing it the silver it needs Aggregate new issues 45,G94,534 40,209,321 68,198,369 154,102,224 for its own requirements and those of the Allies. New issues last year, same period.108,952,865 107,504., 075 287,754,684 504,211,624 Governor. issues approved: Amount original applica- Work of the Capital Issues Committee. Am tio o n u s nt aD- 65,486,199 46,209,321 108,098,369 219,793,889 proved 45,694,534 40,209,321 68,198,369 154,102,224 The following statement was issued on May Curtailment effected 19,791,665 6,000,000 39,900,000 65,691,665 22 by the Capital Issues Committee: Analysis of applications inlor- Applications for the issue of securities aggre- mallv discouraged: gating $478,458,386 were considered by the Number 8 3 6 17 Amount $8,915,000 §7,360,000 $3,590,000 $19,865,000 Capital Issues Committee of the Federal Reserve Board. The Committee's existence ceased upon the taking of office on May 17 of Special Deposits of Public Moneys. the Capital Issues Committee created by the The following circular relating to special War Finance Corporation Act. While it approved three issues during the period January deposits of public moneys under the act of 12 to February 1, the committee was not Congress approved September 24, 1917, as organized and under way until February 1. amended by the act of Congress approved Of the total issues considered, the committee April 4, 1918, was issued by the Treasury Deapproved $412,766,721, of which $258,664,496 partment on May 29: were for the purpose of refunding obligations previously incurred. New issues approved, To Federal Reserve Banks and other banks and trust comtherefore, aggregated $154,102,224. New issues panies incorporated under the laws of the United States or for the same period last year were $504,211,624, of any State. so that a comparative saving has been effected Department Circular No. 92, dated October 6,1917. and of $350,109,399. This saving by action of the the supplement thereto, dated April 10, 1918, in relation committee does not include the saving of to special deposits of Government funds in connection $19,865,000 effected through the informal post- with subscriptions for bonds and certificates of indebtedponement for the period of the war secured ness of the United States issued under the act of Congress through the efforts of the committee or its approved September 24, 1917, are hereby further suppleagencies. In addition, however, there is an mented as follows: immeasurable saving caused by the wide The provisions of the said circular and supplement are publicity given to the committee's aims and extended, subject to the provisions hereof, to deposits of purposes which has discouraged at the very moneys, arising from the payment of income and excess source issues clearly incompatible with the profits taxes, made under the act of Congress approved national interest at this time. September 24, 1917, as amended by the act of Congress The committee attributes this success to the approved April 4, 1918. Applications hereafter made for splendid cooperation and loyal support it has deposits of public moneys under said acts should be. and received from State and municipal authorities, all applications for such deposits made on and after Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL RESERVE BULLETIN. 495 June 5, 1918, must be, in Form H3 hereto attached, and taxpayers were not turned in in payment of their taxes, be accompanied by a certified copy of resolutions duly but were either sold or hypothecated by the taxpayers and adopted by the board of directors of the applicant in in consequence were presented for payment in cash. In Form J3 hereto attached. view of the fact that the aggregate amount of these certifi- Depositaries already qualified to a sufficient amount pur- cates now issued exceeds $1,500,000,000 this is important, suant to Department Circular No. 92, or pursuant to said and banks and trust companies are required to cooperate circular as amended and supplemented under date of by advising their customers to turn in certificates, to the April 10, 1918, will not be required to file anew formal extent that they have taxes to pay, in payment of such applications or resolutions in connection with deposits of taxes. No deposit of moneys arising from the payment moneys arising from the payment of income and excess of income and excess profits taxes will be made with any profits taxes, but, if they desire to receive deposits here- depositary which disregards this requirement. under must so notify the Federal Reserve Bank of the dis- W. G. MCADOO, trict in which they are located by letter or telegram; and Secretary of the Treastunj. they will thereby and by the acceptance of such deposits, [Form 113—Public Moneys.] be conclusively presumed to have assented to all the terms APPLICATION" 70R DEPOSITS. and provisions hereof. The words "qualified depositaries" in this circular refer exclusively to depositaries To the Federal Reserve Bank of , fiscal agent of the United States: The undersigned bank or trust company, in accordance with the qualified under Department Circular No. 92 and suppleprovisions of Treasury Department Circular No. 92, dated October 6, ments thereto. 1917, as amended and supplemented April 10,1918, and May 29,1918, and Collateral security pledged or to be pledged by qualified pursuant to due action of its board of directors, hereby makes application depositaries will be conclusively deemed to be pledged for the deposit of public moneys with it from time to time under the act of Congress approved September 24, 1917, as amended by the act apas collateral security for deposits of public moneys made proved April 4,1918, the aggregate amount of such deposits not to exunder Department Circular No. 92 and supplements ceed at any one time S ; and assigns and agrees to pledge, from thereto, whether arising from the sale of bonds or certifi- time to time, to and with the Federal Reserve Bank of , cates of indebtedness of the United States or arising from as fiscal agent of the United States, as collateral security for such deposits as may be made from time to time pursuant to this application, securities the payment of income and excess profits taxes. of the character and amount required by said circular. Payment of income and excess profits taxes can not be made by credit. It is intended, out of any unexpended cash proceeds President (Vice President). Street arising from the payment of income and excess profits City or town taxes, to make deposits, through the Federal Reserve State Banks, under direction of the Secretary of the Treasury, [Form J3—Public Moneys.] with qualified depositaries throughout the United States, RESOLUTIONS AUTHORIZING APPLICATION POR DEPOSITS. as nearly as may be proportionately, having regard to the I hereby certify that the following resolutions were duly adopted at a following three determining factors: (1) The amount of meeting of the board of directors of the below-named bank (trust comchecks, received by collectors of internal revenue on pany), which meeting was duly called and duly held on the day of , 191.., a quorum being present, and that the said resolutions and after June 10, 1918, and until further notice, drawn were spread upon the minutes of said meeting: upon and paid by such depositaries, respectively, in pay- Resolved, That in accordance with the provisions of Treasury Department of income and excess profits taxes; (2) the amount of ment Circular No. 92, dated October 6, 19.17, as amended and supple- Treasury certificates of indebtedness of all issues maturing mented April 10, 1918, and May 29, 1918, this bank (trust company) makes application for the deposit of public moneys with it from time June 25, 1918, sold to and through such depositaries, reto time under the act of Congress approved September 24, 1917, as spectively; and (3) the amount for which such deposi- amended by the act approved April 4, 1918, the aggregate amount of taries, respectively, shall be qualified in excess of exist- such deposits not to exceed at any one time S ; and assign ing deposits. It is the intention that such deposits shall, and agree to pledge from time to time to and with the Federal Reserve Bank of , as fiscal agent of the United as nearly as may be, be made simultaneously with the States, as collateral security for such deposits as may be made from time payment of checks drawn upon such depositaries, re- to time pursuant to such application, securities of the character and spectively, in payment of such taxes. Appropriate in- amount required by said circular; and Resolved, That the president, or any vice president, or cashier, or secrestructions will be given to collectors of internal revenue tary, of the undersigned bank (trust company) is hereby authorized to and to Federal Reserve Banks. make application, assignment, and agreement as aforesaid and from All deposits will be subject to withdrawal on demand time to time to deliver to and pledge with said Federal Reserve Bank, and will bear interest at the rate of 2 per cent per annum, or any custodian or custodians appointed by it, securities of the undersigned bank (trust company) of a character and amount at least suffias provided in the above-mentioned circular and supplecient to secure such deposits according to the terms of said Treasury ment. Deposits made hereunder shall be credited to the Department circular as amended and supplemented as aforesaid, and "War Loan Deposit Account." from time to time to withdraw securities and to substitute other securi- A principal object of the issue of the United States ties and to pledge and deposit additional securities. In witness whereof I have hereunto signed my name and affixed the Treasury certificates of indebtedness maturing June 25, seal of the of 1918, was to prevent unnecessary dislocation of funds, and this object would be defeated if such certificates held by Cashier (Secretary). 62161—18 3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

496 FEDEBAL RESERVE BULLETIN. rxE 1, 11)18. Operations of the War Finance Corporation. Reserve Banks are not permitted to do that, the Federal Reserve Act having specifically con- The War Finance Corporation, on May 28, templated advances of that character only upon authorized the following statement: what we call liquid or commercial paper, and therefore the Federal Reserve Banks are not In view of the applications for direct advance permitted to rediscount any paper for their which have been filled with the War Finance banks which is secured by fixed investments. Corporation, the directors wish to point out The Federal Reserve Act does not provide for that an erroneous impression seems to exist in this, and the War Finance Corporation is decertain quarters that the Corporation is in- signed as a war emergency to fill this gap." tended primarily to make direct advances to The Corporation was organized to provide borrowers under the "exceptional cases" clause an instrumentality to which the banks of the of the act. This, however, is not the purpose country could resort to obtain accommodation of the act, which was designed primarily to on advances made by them to war industries enable credit to be extended by the War Fi- upon a character of security not available for nance Corporation through the banks of the rediscount at a Federal Reserve Bank. It is country to "war industries"—that is, to those hoped that as need arises the banks of the industries whose operations are necessary or country will' avail themselves of the facilities contributory to the war. In other words, the thus afforded, so that they may be amply able resources of the War Finance Corporation are to extend credit to those industries of the not intended to be loaned directly to war in- country which are necessary or contributory to dustries unless in an exceptional case, but only the prosecution of the war. indirectly through the banks. As the Secre- From the applications received by the War tary of the Treasury stated before the com- Finance Corporation there seems to be an immittees of Congress when the bill was under pression in certain quarters that the Corporaconsideration, "the provision of the bill per- tion was specially designed to provide funds for mitting direct loans by the corporation, in ex- meeting maturing obligations, particularly those ceptional cases, is intended to provide for those of public-utility companies. The law expressly rare instances where it may be made to appear provides that the Corporation shall not make to the Corporation that a meritorious borrower direct advances to provide funds to meet such is being unwisely discriminated against by the maturing obligations except possibly in some banks." In the progress of the bill through rare case which could clearly be brought within Congress advances under the exceptional cases the "exceptional cases clause." Of course the clause were further restricted both as to se- Corporation will stand ready to lend its assistcurity and as to the amount which could be ance to banks and bankers in proper cases advanced—thus indicating the intention of where they have themselves made advances to Congress that in order to obtain an advance war industries whether for the purpose of meetunder this clause the borrower must show some ing maturing obligations or otherwise, and exceptional circumstances clearly entitling him direct advances in deserving cases that come to relief. clearly within the provisions of the law. In no circumstances was it the intention that Holders of maturing obligations, whether of the War Finance Corporation should make public utilities or of other concerns which may loans except upon adequate security. find themselves unable because of temporary It is expected that the greatest usefulness of conditions to meet their commitments punctuthe War Finance Corporation will be found in ally, should consider whether in the public its operations through the banks. As the interest as well as their own they should not Secretary of the Treasury stated before the cooperate by consenting to reasonable renewals. Senate Finance Committee, the organization of Public-utility companies particularly, in cothe War Finance Corporation should be re- operation with the communities in which they garded "primarily as a measure to enable the operate, should have the opportunity of adbanks, *" * * " to continue to furnish essen- justing themselves to the changed conditions tial credits for war industries and enterprises brought about by the war. which are necessary or contributory to the pro- No machinery has been specially provided secution of the war. In Europe central banks, for direct purchases of obligations of the public which correspond to our Federal Reserve Banks utilities whether to meet maturities or otherin a sense, are permitted to grant to banks and wise, either through the War Finance Corporabankers loans upon stocks and bonds upon tion or through any other governmental agency. certain well-defined terms; but here the Federal The situation of these public utility companies Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL BESEEVE BULLETIN. 497 is therefore quite different from that of the weighty and anxious matters that crowd upon us in these railroads, where Congress has made specific days of critical choice and action. But we dare not go provision for the purchase of their securities to the elections until we have done cur duty to the full. by the Government in certain exigencies, yet These are days when duty stands stark and naked, and even the railroads are expected, wherever pos- even with closed eyes we know it is there. Excuses are sible, to meet their own maturities and to pay unavailing. We have either done our duty or we have what the money is worth to accomplish that not. The fact will be as gross and plain as the duty end. It must be remembered that the rail- itself. In such a case lassitude and fatigue seem negligible roads are under Federal operation, and their enough. The facts are tonic and suffice to freshen the rates are subject to Federal control, and that labor. the Government is therefore in a position to And the facts are these: Additional revenues must see to it that their charges shall be sufficient to manifestly be provided for. It would be a most unsound meet the cost of the service rendered, in the policy to raise too large a proportion of them by loan, case, however, of the public utilities, neither and it is evident that the four billions now provided for their operations nor their rates are subject to by taxation will not of themselves sustain the greatly Federal control. Wherever the charges do not enlarged budget to which we must immediately look amount to adequate compensation for the forward. We can not in fairness wait until the end of the services rendered, relief can be had only fiscal year is at hand to apprise our people of the taxes through the appropriate local authorities, and they must pay on their earnings of the present calendar time is essential to enable the companies and year, whose accountings and expenditures will then be the communities in which they operate to closed. We can not get increased taxes unless the country reach a satisfactory solution of this important knows what they are to be and practices the necessary problem. It is not a problem which can be economy to make them available. Definiteness, early disposed of by having the Federal Government denniteness. as to what its tasks are to be is absolutely through the War Finance Corporation assume necessary for the successful administration of the Treasury; the burden of financing the operations of these it can not frame fair and workable regulations in haste; local companies except in exceptional circum- and it must frame its regulations in haste if it is not to stances wnich may make it a matter of national know its exact task until the very eve of its performance. importance that advances should be made. The present tax laws are marred, moreover, by inequities The local authorities will no doubt respond as which ought to be remedied. Indisputable facts, every promptly as possible in cases where relief is one: and we can not alter or blink them. To state them needed because of changed conditions, as it is is argument enough. clear that the soundness and efficiency of And yet perhaps you will permit me to dwell for a public utilities is intimately connected with a moment upon the situation they disclose. Enormous vigorous and successful prosecution of the war. loans freely spent in the stimulation of industry of almost every sort produce inflations and extravagances which presently make the whole economic structure questionable A New Measure of Taxation. and insecure and the very basis of credit is cut away. The President, on May 27, delivered, before Only fair, equitably distributed taxation, of the widest Congress the following address which is re- incidence and drawing chiefly from the sources which would be likely to demoralize credit by their very abunprinted here because of its direct bearing upon dance, can prevent inflation and keep our industrial system general banking and financial conditions: free of speculation and waste. We shall naturally turn, Gentlemen of the Congress: It is with unaffected therefore, I suppose, to war profits and incomes and luxreluctance that I come to ask you to prolong your session uries for the additional taxes. But the war profits and long enough to provide more adequate resources for the incomes upon which the increased taxes will be levied will Treasury for the conduct of the war. I have reason to be the profits and incomes of the calendar year 1918. It appreciate as fully as you do how arduous the session has would be manifestly unfair to wait until the early months been. Your labors have been severe and protracted. of 1919 to say what they are to be. It might be difficult, You have passed a long series of measures which required I should imagine, to run the mill with water that had althe debate of many doubtful questions of judgment and ready gone over the wheel. many exceedingly difficult questions of principle as well Moreover, taxes of that sort will not be paid until the as of practice. The summer is upon us in which labor and June of next year, and the Treasury must anticipate them. counsel are twice arduous and are constantly apt to be It must use the money they are to produce before it is due. impaired by lassitude and fatigue. It must sell short-time certificates of indebtedness. In The elections are at hand, and. we ought as soon as possi- the autumn a much larger sale of long-time bonds must be ble to go and render an intimate account of our trusteeship effected than has yet been attempted. What are the to the people who delegated us to act for them in the bankers to think of the certificates if they do not certainly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

498 FEDERAL RESERVE BULLETIN. JUNE 1,1918. know where the money is to come from which is to take time. The world never stood in such case before. Men them up? And how are investors to approach the pur- never before had so clear or so moving a vision of duty. I chase of bonds with any sort of confidence or knowledge know that you will begrudge the work to be done here by of their own affairs if they do not know what taxes they are us no more than the men begrudge us theirs who lie in the to pay and what economies and adjustments of their trenches and sally forth to their death. There is a stimubusiness they must effect? I can not assure the country lating comradeship knitting us all together. And this task of a successful administration of the Treasury in 1918 if to which I invite your immediate consideration will be the question of further taxation is to be left undecided performed under favorable influences if we will look to until 1919. what the country is thinking and expecting and care noth- The consideration that dominates every other now, and ing at all for what is being said and believed in the lobbies makes every other seem trivial and negligible, is the of Washington hotels, where the atmosphere seems to make winning of the war. We are not only in the midst of the it possible to believe what is believed nowhere else. war, we are at the very peak and crisis of it. Hundreds Have you not felt the spirit of the Nation rise and its of thousands of our men, carrying our hearts with them thought become a single and common thought since these and our fortunes, are in the field, and ships are crowding eventful days came in which we have been sending our faster and faster to the ports of France and England with boys to the other side? I think you must read that thought regiment after regiment, thousand after thousand, to join as I do, to mean this, that the people of this country are not them until the enemy shall be beaten and brought to a only united in the resolute purpose to win this war, but are reckoning with mankind. There can be no pause or inter- ready and willing to bear any burden and undergo any mission. The great enterprise must, on the contrary, be sacrifice that may be necessary for them to bear in order to pushed with greater and greater energy. The volume of win it. We need not be afraid to tax them, if we lay taxes our might must steadily and rapidly be augumented until justly. They know that the war must be paid for and that there can be no question of resisting it. If that is to be it is they who must pay for it, and if the burden is justly accomplished, gentlemen, money must sustain it to the distributed and the sacrifice made a common sacrifice from utmost. Our financial program must no more be left in which none escapes who can bear it at all, they will carry doubt or suffered to lag than our ordnance program or our it cheerfully and with a sort of solemn pride. I have ship program or our munitions program or our program for always been proud to be an American, and was never more making millions of men ready. These others are not proud than now, when all that we have said and all that we programs, indeed, but mere plans upon paper, unless there have foreseen about our people is coming true. is to be an unquestionable supply of money. The great days have come when the only thing that they That is the situation, and it is the situation which creates ask for or admire is duty greatly and adequately done; the duty, no choice or preference of ours. There is only when their only wish for America is that she may share the one way to meet that duty. We must meet it without freedom she enjoys; when a great compelling sympathy selfishness or fear of consequences. Politics is adjourned. wells up in their hearts for men everywhere who suffer and The elections will go to those who think least of it; to those are oppressed, and when they see at last the high uses for who go to the constituencies without explanations or ex- which their wealth has been piled up and their mighty cuses, with a plain record of duty faithfully and disinter- power accumulated and, counting neither blood nor treasestedly performed. I, for one, am always confident that ure now that their final day of opportunity has come, rethe people of this country will give a just verdict upon the joice to spend and to be spent through a long night of service of the men who act for them when the facts are suffering and terror in order that they and men everywhere such that no man can disguise or conceal them. There is may see the dawn of a day of righteousness and justice and no danger of deceit now. An intense and pitiless light peace. Shall we grow weary when they bid us act? beats upon every man and every action in this tragic plot of war that is now upon the stage. If lobbyists hurry to Washington to attempt to turn what you do in the matter Contributions to the Eed Cross. of taxation to their protection or advantage, the light will beat also upon them. There is abundant fuel for the light The act authorizing national banks to conin the records of the Treasury with regard to profits of every tribute to the American Eed Cross was signed sort. The profiteering that can not be got at by the resby the President on May 23. The text of the traints of conscience and love of country can be got at by act follows: taxation. There is such profiteering now and the information with regard to it is available and indisputable. [S. 3911.] I am advising you to act upon this matter of taxation A BILL Authorizing national banks to subscribe to the American National Red Cross. now, gentlemen, not because I do not know that you can see and interpret the facts and the duty they impose, just Be it enacted by the Senate and House of Representatives of as well and with as clear a perception of the obligations in- the United States of America in Congress assembled, That volved as I can, but because there is a certain solemn satis- during the continuance of the state of war now existing it faction in sharing with you the responsibilities of such a shall be lawful for any national banking association to con- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 499 tribute to the American National Red Cross, out of any exportation for which a license is desired will be compatible with the public interest. net profits otherwise available under the law for the 2. Each Federal Reserve Bank shall keep a record copy declaration of dividends, such sum or sums as the directors of each application filed with it under the provisions of of said association shall deem expedient. Each associa- this regulation and shall forward the original application tion shall report to the Comptroller of the Currency within and a duplicate to the Federal Reserve Board at Washington, together with such information or suggestions as it ten days after the making of any such contribution the may believe proper in the circumstances,' and shall in amount of such contribution and the amount of net earn- addition make a formal recommendation as to whether or ings in excess of such contribution. Such report shall be not in its opinion the exportation should be permitted. attested by the president or cashier of the association in 3. The Federal Reserve Board, subject to the approval of the Secretary of the Treasury, is hereby authorized and like manner as the report of the declaration of any empowered upon receipt of such application and the dividend. recommendation of the Federal Reserve Bank to make SEC. 2. That all sums so contributed shall be utilized such ruling as it may deem proper in the circumstances by the American National Red Cross in furnishing volun- and if in its opinion the exportation in question be compatible with the public interest, to permit said exportateer aid to the sick and wounded of the combatant armies, tion to be made; otherwise to refuse it. the voluntary relief of the Army and Navy of the United WOODROW WILSON. States, and the relief and mitigation of the suffering caused THE WHITE HOUSE, September 7, 1917. by the war to the people of the United States and their allied nations. BY THE PRESIDENT OF THE UNITED STATES OF AMERICA, A PROCLAMATION. Whereas Congress has enacted, and the President has Control of Coin, Bullion, and Currency Movement. on the 15th day of Jane, 1917, approved a law, which con- The work of the Federal Reserve Board in tains the following provisions: applying the gold embargo provided under the Whenever during the present war the President rhall find that the public safety shall so require, and shall make Executive order of September 7, 1917, has proclamation thereof, it shall be unlawful to export from resulted, up to the present time, in the exami- or ship from or take out of the United States to any country named in such proclamation any article or articles nation and consideration of 2,020 applications mentioned in such proclamation, except at such time or for licenses to export coin, bullion, and cur- times, and under such regulations and orders, and subject to such limitations and exceptions as the President shall rency out of the country. Some minor modi- prescribe, until otherwise ordered by the President or by fications of the regulations relating to this phase Congress: Provided, Jiowcver, That no preference shall be given to the ports of one State over those of another. of the Board's work have in practice become Any person who shall export, ship, or take out, or deliver necessary, particularly in the section relating or attempt to deliver for export, shipment, or taking out any article in violation of this title, or of any regulation or to funds carried by travelers. The Executive order made hereunder, shall be fined not more than $10,000, order governing the exportation of coin, bul- or, if a natural person, imprisoned for not more than two years, or both; and any article so delivered or exported, lion, and currency is as follows: shipped, or taken out, or attempted to be so delivered or exported, shipped, or taken out, shall be seized and forfeited to the United States; and any officer, director, or EXECUTIVE ORDER. agent of a corporation who participates in any such violation shall be liable to like fine or imprisonment, or both. By virtue of the authority vested in me, I direct that Whenever there is reasonable cause to believe that any the regulations, orders, limitations, and exceptions pre- vessel, domestic or foreign, is about to carry out of the scribed in relation to the exportation of coin, bullion, and United States any article or articles in violation of the provisions of this title, the collector of customs for the district currency shall be administered by and under the authority in which such vessel is located is hereby authorized and of the Secretary of the Treasury; and upon the recom- empowered, subject to review by the Secretary of Commendation of the Secretary of the Treasury I hereby pre- merce, to refuse clearance to any such vessel, domestic or scribe the following regulations in relation thereto: foreign, for which clearance is required by law, and by | formal notice served upon the owners, master, or person or 1. Any individual, firm, or corporation desiring to ex- persons in command or charge of any domestic vessel foi port from the United States or any of its Territorial pos- which clearance is not required by law to forbid the desessions to any foreign country named in the proclamation parture of such vessel from the port, and it shall thereupon dated September 7, 1917, any com, bullion, or currency, be unlawful for such vessel to depart. Whoever, in violashall first file an application in triplicate with the Federal | tion of any of the provisions of this section shall take, or Reserve Bank of the district in which such individual, j attempt to take, or authorize the taking of any such vessel firm, or corporation is located, such application to state out of port or from the jurisdiction of the United States, under oath and in detail the nature of the transaction, the shall be fined not more than $10,000 or imprisoned not amount involved, the parties directly and indirectly inter- more than two years, or both; and, in addition, such vessel, ested, and such other information as may be of assistance j her tackle, apparel, furniture, equipment, and her forbid to the proper authorities in determining whether the I den cargo shall be forfeited to the United States. 62161—18 3* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

500 FEDERAL BESEEVE BULLETIN. JUNE 1, 1918. And whereas the President has heretofore by proclama- must file an application with the Federal Reserve Bank of tion, under date of the 27th day of August in the year the district in which the applicant resides or where the 1917, declared certain exports in time of war unlawful. transaction requiring the shipment originates. These and the President finds that the public safety requires applications must be made on a standard form, which has that such proclamation be amended and supplemented been furnished to all Federal Reserve Banks. in respect to the articles hereinafter mentioned: EXPORTS OF GOLD. Now, therefore, I Woodrow Wilson, President of the United States of America, do hereby proclaim to all whom It will be the general policy of the Board not to auit may concern, that the public safety requires that, thorize the exportation of gold unless the shipment apexcept at such time or times, and under such regulations plied for is shown to be connected in a direct and defiand orders, and subject to such limitations and exceptions nite way with a corresponding importation of merchanas the President shall prescribe, until otherwise ordered dise for consumption in the United States, but in any by the President or by Congress, the following articles, case authorization will be granted only where the expornamely: Coin, bullion, and currency shall not, on and tation of gold in payment for such merchandise is found after the 10th day of September, in the year 1917, be to be compatible with the public interest. In reaching exported from or shipped from or taken out of the United its conclusions, however, the Board will consider all at- States or its territorial possessions to Albania, Austriatending circumstances in each particular case. Hungary, Belgium, Bulgaria, Denmark, her colonies, possessions or protectorates, Germany, her colonies, pos- SHIPMENTS OF CANADIAN SILVER COIN AND CURRENCY. sessions, or protectorates, Greece, Leichtenstein, Luxembourg, The Kingdom of the Netherlands, Norway, Spain, Until further notice the Board will approve all appliher colonies, possessions, or protectorates, Sweden, Swit- cations for the exportation of Canadian silver coin and zerland or Turkey, Abyssinia, Afghanistan, Argentina, currency to Canada, and of Mexican paper currency to Bolivia, Brazil, China, Chile, Colombia, Costa Rica, Mexico, without limitation. The Treasury Department Cuba, Dominican Republic, Ecuador, Egypt, France, has instructed collectors of customs to pass such shipher colonies, possessions, or protectorates, Guatemala, | ments when approved by the Federal Reserve Bank of the Haiti, Honduras, Italy, her colonies, possessions, or pro- district from which the shipments are made. Continuous tectorates, Great Britain, her colonies, possessions, or pro- permits for shipments of Canadian silver coin and currency tectorates, Japan, Liberia, Mexico, Monaco, Montenegro, and of Mexican paper currency, without requiring an ap- Morocco, Nepal, Nicaragua, the colonies, possessions, or plication in each case, may be granted by Federal Reserve protectorates of The Netherlands, Oman, Panama, Para- Banks upon condition that each transaction will be reguay, Persia, Peru, Portugal, her colonies, possessions, or ported to it without delay. The Federal Reserve Banks protectorates, Roumania, Russia, Salvador, San Marino, will transmit to the Board weekly reports of all appli- Serbia, Siam, Uruguay, or Venezuela. cations of every kind passed upon by them, showing the The regulations, orders, limitations, and exceptions amount of each shipment. prescribed will be administered by and under the authority of the Secretary of the Treasury, from whom licenses EXPORTS OF SILVER BULLION AND SILVER COIN OF FOREIGN in conformity with said regulations, orders, limitations, MINTAGE. and exceptions will issue. Applications for the exportation of silver bullion and Except as hereby amended and supplemented, the silver coin of foreign mintage will in general be approved above-mentioned proclamation under date of August 27, by the Federal Reserve Board upon recommendation of 1917, shall continue in full force and effect. the Federal Reserve Bank with which the application is In witness whereof I have hereunto set my hand and filed. caused the seal of the United States of America to be affixed. UNITED STATES NOTES, NATIONAL BANK NOTES, FEDERAL Done at the city of Washington this 7th day of Septem- RESERVE NOTES, AND FEDERAL RESERVE BANK NOTES. ber, in the year of our Lord 1917, and of the independence Applications for the exportation of United States notes, of the United States of America the 142d. national bank notes, Federal Reserve notes, and Federal WOODROW WILSON. Reserve Bank notes will as a rule be approved by the By the President: Federal Reserve Board, but each application must come ROBERT LANSING, before the Board for its determination before shipment is Secretary of State. made, unless authority to pass upon such applications The administrative procedure under this locally has been delegated by the Board to the respective order is now as follows: Federal Reserve Banks. ADMINISTRATIVE PROCEDURE. TRAVELERS LEAVING THE COUNTRY. METHOD OF MAKING APPLICATION. Instructions have been issued by the Treasury Depart- Individuals, firms, and corporations desiring to obtain ment to collectors of customs to permit travelers leaving licenses for the exportation of coin, bullion, and currency the country to carry on their persons or in their baggage: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 501 (a) United States notes, national-bank notes, Federal customs at the port from which the applicant expects to Reserve notes, or-Federal Reserve Bank notes not to ex- leave the United States, and collectors of customs have ceed $1,000 for each adult. been notified that in dealing with travelers to whom such (6) Subsidiary silver coins not to exceed $100 for each licenses have been issued they may act without communiadult, such coin to be in lieu of a like amount of notes cating with the Federal Reserve Board. under (a) above. GENERAL. Collectors of customs have been informed that in dealing with travelers they may act in accordance with these regu- Shipments of coin or currency which appear to be or are lations, without communicating with the Federal Reserve suspected of being for enemy account or for the benefit Board or with the Federal Reserve Bank of their district. of the enemy will not be permitted. These regulations are Travelers who desire to take with them silver dollars or issued subject to change without notice, and no applicagold coin, or gold or silver certificates in any amount, tion granted will be regarded as constituting a precedent. must obtain a license from the Federal Reserve Bank of Following is a summarized statement of the their district, from which application blanks may be obshipments of coin, bullion, and currency which tained. Whenever such licenses are issued, the Federal Reserve Bank will give due notice to the collector of I the Board has authorized up to the present date: Amounts of licenses granted by the Federal Reserve Board during the period Sept. 7, 1917, io May 24, 1918, covering exports from the United States of coin, bullion, and currency. Miscel- Gold. «ilver ; Sciulvrerre nacndy. Currency. laneous. Total. United Kingdom 84,(555 919,561,371 $202,400 $19,768,426 France 812,500 iSl,725 814,225 Italy 200 200 Russia 70 1,276,884 44,508 1,321,462 Netherlands 300,000 300.000 Sweden 2 000 000 2,000,000 Norway 11,364 20,000 31,364 Spain 2 225 ::::.::::.:: 225 Switzerland 200 8,666 : 8,200 Canada 7,329,290 23,237,020 $600, 111 713,437 3 3,000 31,882,858 Newfoundland 50 50 Mexico 26,706,462 2,331,560 3,349,600 8,105,669 3 116.000 40,609,291 Guatemala 228 50,000 i '..... 50,228 Honduras 160,000 540,200 ! 700,200 Nicaragua. . . 20,500 20,500 Salvador 28,000 28,000 Cuba.. 12,999 1,273 18,881,000 <600 18,895,872 Porto Rico 980,000 386,200 &36.200 1,402,400 Dominican Republic . . . 40,000 200,000 942,000 i 1,182,000 Haiti :. 20,000 20,000 British West Indies... 38,245 6,342 68,000 112,587 Dutch West Indies 20 57 50 127 Panama 5,000 5,000 Argentina 62,000 7,377 32,666 4,539 105,938 Brazil 695 10,000 10,695 Chile 10,274,398 10,274,398 Colombia 876,165 160,000 1,036,165 Bolivia 300,000 300,000 Ecuador. 72,500 72,500 Peru 1,241,090 5,000 6490,000 1,736,090 Venezuela 554,420 12,000 569,420 Uruguay 216,000 210,000 British Guina 4,580 4,580 Dutch G uina 1,669 J,609 China. . 2,990,000 26,338,263 2,700 29,330, 983 Japan 881,615 560,000 48,000 1,489.615 India 3,300,000 79,884,819 2*3,184)819 Dutch East indies . 1,538,000 1,100,000 2,63X, 000 British West Africa 500 13,300 13,800 All other 151,150 250 50,000 201,400 Total 7 58,740,182 155,237,725 5,328 110 ' 30,382.703 647,526 250,336,245 In the above table amounts of silver stated in terms of Mexican currency were converted to United States equivalents at the rate of 50 cents per peso. 1 Currency, silver, and gold. 2 Does not include §1,250,000 gold for which the Board has issued licenses permitting either export or earmarking in trade with Spain. 3 Gold and silver. * Copper. 5 Cents and dimes. 6 Nickel coin. 7 Exclusive of £600 to the Fanning Islands and £9.000 to Canada. s Exclusive of currency as follows: Russian rouble's to Japan, 15,080; to the United Kingdom .1,600; 4,000 guilders to the Netherlands; 6,000 kroner to Sweden; 5,000francs to Switzerland. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

502 FEDERAL RESERVE BULLETIN. JUNE 1, 1018. Deposits, Loans and Discounts, and Total net deposits as shown in column 3 are con- Investments of National Banks, 1914-1918, siderably in excess of the combined gross individual and Government deposits as shown in Changes in the volume of deposits in conneccolumn 5. The latter indicate a slow, and tion with the loan and investment operations with few exceptions, steady progress, the June, of the national banks since the outbreak of the 1915, showing an increase of 418 millions over war are presented in the following table and those of June, 1914, as against a decrease of 212 accompanying diagram. In the first column millions in the net deposit figures. are shown figures of gross deposits, including unpaid dividends, Government and so-called Figures of loans and discounts (column 7) on "individual" deposits, postal-savings deposits, the whole show a fairly parallel movement and gross amount due to banks and bankers with those of net deposits, though the de- (i. e., without deduction of offsetting amounts pression of 1914-15 is reflected more clearly in due from banks and bankers, clearing house the heavy decreases of net deposits than in the exchanges and checks on banks in the same reduction of loans and discounts. In column place). In the third column are shown the 9 are shown the figures of total investments, figures of net deposits, based on the Comp- exclusive of those of a fixed character. Prior troller's reserve computations. To the amounts to the entrance of the United States into the shown in the Comptroller's abstracts have been war the relative growth of this item differed added uniformly amounts of Government de- but little from that shown for loans and inposits, which were disregarded by the Comp- vestments, as may be seen from a comparison troller's office in computing reserve under calls of the corresponding index figures to March 5, subsequent to the passage of the act of April 1917. Since then, owing to the considerable 24, 1917, which exempted Government de- investments by banks in Government securities, posits from reserve requirements. In column largely certificates of indebtedness, the rate of 5 are shown combined figures of "gross individ- growth for aggregate investments has been ual and Government deposits, exclusive of considerably larger than for loans and disamounts due to banks and bankers. counts. Because of the much larger balances carried In addition to the absolute figures, percentby the banks with approved correspondents ages are given for each set of items calculated prior to the enactment of the June 21, 1917, on the amounts reported under the June 30, amendment the figures for the earlier period of 1914, call, Movement of the several classes of deposits, also of loans and investments of national banks, June SO, 1914, to Mar. 4,1918. Gross deposits. N G e d t o , e v i p e n o r c n s l i m u ts d e . i n n t g In G d d o iv e v i p e d r o u n s a m it l s e a . n n t d co L u o o n a v t n e s, s r d i a r n n a c d f l t u s d d . i i i s n - g Loans m a e n n d t s i .2 nvest- 1. 3. ~\ 5. 6. 7. 9. 10. Millions of Millions of Millions of Millions of Millions of dollars. Per cent, dollars. Per cent dollars. Per cent, dollars. Per cent, dollars. Per cent. June 30,1914.. 8,564 100.0 7,495 100.0 6,197 I 100.0 6,446 100.0 8,347 100.0 Sept. 12,1914.. 8,188 95. ft 7,293 97.3 6,238 ! 100.7 6,418 99.6 8,637 I 103.5 Oct. 31,1914... 8,076 94.3 7,167 95.6 6,185 I 99.8 6,335 98.3 8,635 ' 103.5 Dec. 31,1914... 8,235 96.2 6,668 89.0 6,366 | 102.7 6,363 98.7 8,437 101.1 Mar. 4,1915..., 8,593 100.3 7,066 94.2 6,350 102.5 6,507 100.9 8,471 101.5 Mav 1,1915.... 8,891 103.8 7,198 96.0 6,665 107.5 6,650 103.2 8,600 103.0 Jane 23,1915. 8,821 103.0 7,283 97.2 6,613 106.7 6,865 103.4 8,639 103.5 Sept. 2,1915.. 9,229 107.8 7,523 100,4 6,763 109.1 6,762 104.9 8,823 105.7 Nov. 10,1915. 10,157 118.6 8,257 110.2 7,448 120.2 7,211 112.3 9,471 113.5 Doc. 31,1915.. 10,402 121.5 8,366 111.6 7,664 123.7 7,384 114.2 9,651 | 115.6 Mar. 7,1916... 10,792 126.0 8,783 117.2 7,718 121.5 7,495 116.3 9,869 i 118.2 May 1,1916... 11,135 130.0 8,782 117.2 8,140 131.3 7,613 118.1 10,046 | 120.4 June 20,1916.. 10,877 127.0 8,702 116.1 8,164 131.7 7,685 119.2 10,101 ! 121.0 Sept. 12,1916. 11,363 132.7 9,202 122.3 8,447 136.3 7,868 122.1 10,417 124.8 Nov. 17,1916.. 12,489 145.8 9,977 133.2 9,110 147.5 8,355 129.6 10,958 131.3 Dec. 27,1916.. 12,266 143.2 9,929 132.5 9,005 145.3 8,351 129.6 10,963 131.3 Mar. 5,1917... 12,958 151.3 10,489 140.0 9,275 149.7 8,720 135.3 11,365 136.2 May 1,1917... 13,080 152.7 10,283 137.2 9,701 156.5 8,760 135.9 11,550 138.4 June 20, 1917.. 12,772 149.1 10' 306 137.5 9,746 157.3 8,828 137.0 11,946 143.1 Sept. 11,1917. 13,230 154.5 10,293 137.4 10.185 164.3 9,005 140.6 12,292 147.3 N D o ec v . . 3 2 1 0 , , 1 1 9 9 1 1 7 7 . . . , 1 1 4 4 , , 7 4 9 4 4 2 1 1 6 72 8 . . 7 6 1 11 1 , , 0 7 7 0 4 1 1 1 4 5 7 6 . . 7 1 l 1 l 1 'f , 6 2 9 5 1 2 . i 1 1 8 8 8 1 . . 7 6 9 9 , ,5 4 5 0 1 6 1 1 4 4 8 5 . . 2 9 1 1 4 3 , , 0 1 2 8 9 0 1 15 6 7 8 . . 9 1 Mar. 4,1918... 14,435 168.6 11,115 148.7 11,137 ! 179.7 9,153 142.0 13,375 160.1 1 Beginning with Sept. 12, 1916, notes and bills rediscounted are not included among loans and discounts, as was the previous practice. 2 Exclusive of fixed investments, i. e., banking house, real estate, furniture and fixtures, also stock of Federal Reserve Banks. 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JUNE 1,1918. FBDEBAL RESERVE BULLETIN. 503 1 —A ?/7 'C // ye -A Nf Ml/ |Cff» Tib l£ *<* A 1 J C%fit TO; '// If K< f/K O ft O fA7/ / - Hi 8^— | • ISO fa aa\zr 180 in «* SOP* JL a ^^ kla ter me.per to. a md TM 0m 1 4 !7O axr\ F!S flh "1 ITT 170 1 /1* j / ii !6O 1 160 f/ A '• / ( "/ \tSO ! J \/ i / f ISO / AI // j1/ / 1 j/ \_ 3 i-4 i 3 // \ / i 1 f "71 {• 140 L / /• 1/40 / ^/ / /.A \ . . i I / 130 \ i / / I' «&> 1i .. \/30 JI ;/ If1 i ; — y ISO A \/EO >•/ //i —i— //// h / I no | /// /y _. _ fiO / i_ A fA *$% —* i 100 1 v—Jf / < f VQO / A \ 20 1 if 90 ! i 1914 1915 | /S/tf 131? \iBi& | 62161—18 4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

504 FEDERAL RESERVE BULLETIN. JUNK 1,1918. MOVEMENT OF PRICES, 1914-1918. quotation and recomputing the subsequent numbers on the new basis. Changes in the general price level are indi- A comparison of the course of wholesale and cated by the course of index numbers, pre- retail prices shows a considerably smaller rise of sented by governmental and other authori- retail prices. But it is well to remember that in tative agencies. In the following tabulation the tables wholesale prices cover a much wider and accompanying diagram the attempt was field than retail prices, which cover merely a cermade to relate the monthly price changes to tain number of important food articles. It may the price level existing on or about July 1, also be noted that the increase in retail prices 1914, when market conditions may be said to indicates the increase in the cost of living only have been relatively normal. This was done on the assumption that there has been no by shifting the bases used by the original com- change in the relative quantities of the several pilers to a uniform base—the beginning of articles used throughout the entire war period, July, 1914. In making this shift the July so that the relative weight given to the articles index number shown by the original compilers in the construction of the general index number was taken as equal to 100, and subsequent continues to correspond more or less closely index numbers were restated in terms of the to the relative importance of these articles in new base b}r dividing these numbers by the the typical family budget. original index number for July, 1914. It is realized that the use of this short-cut method Movement of prices 1914 to 19IS. does not yield entirely accurate results,1 but it is believed that the errors in results obtained are not large enough to alter materially the general picture of price development shown in the table and diagram. It is generally conceded—and this is brought out in the tabulation—that the general rise of prices since July, 1914, has been greater in July 1,1914 100.0 100.0 100.0 Great Britain than in this country, and it has End of July, 1014 100.5 101.5 100.6 been suggested that the shortage of tonnage August, 1914 105.7 108.2 112.7 103.0 104.9 September, 1914.. 108.9 109.9 106.7 104.0 104.9 and the consequent rise of freights is largely October, 1914 107.1 110.6 102.3 100.0 102.9 November, 1914 108.2 109.4 104.4 99.0 102.9 responsible for the greater rise of prices since December, 1914 109.8 112.8 105.6 98.0 102.9 July, 1914, observed in Great Britain than in January, 1915 117.9 118.7 111.6 99.0 101. C February, 1915 122.7 124.2 111.1 101.0 99.0 the United States and Canada since the out- March, 1915 129.5 127.7 112.8 100.0 96.1 break of the war.2 A M p a r y i , l , 1 1 9 9 1 1 5 5 1 13 3 0 0 . . 5 5 1 1 3 30 2 . . 4 0 1 11 1 2 3 . . 5 1 1 10 0 1 0 . . 0 0 I 9 98 7 . . 1 G Besides the four columns showing the course June, 1915 127.3 131.0 113.9 IOO.O s 98. G July, 1915 128.4 131.0 113.4 102.0 I 98.0 of wholesale prices in the United States and in August, 1915 129.1 131.7 113.1 IOI.O ! 98. C Great Britain, there is presented in column 5 S O e c p to te b m er b , e 1 r 9 , 1 1 5 915 1 1 3 3 0 1 . . 7 6 i ! 1 1 3 3 5 2 . . 5 7 1 1 1 15 9 . . 2 8 1 9 0 9 2 . . 0 0 i i 1 9 01 9 . . 0 C the course of relative retail prices of important November, 1915 137.1 ! 139.3 122.9 103.0 ! 102.0 December, 1915 142.3 j 145.8 126.1 106.1 ! 102.9 articles of food as computed by the United January, 1916 150.5 i 152.2 128.6 111.1 I 104.9 States Bureau of Labor Statistics and printed M Fe a b r r c u h a , r 1 v 9 , 1 1 6 916 1 1 5 5 7 7 . . 1 2 | I 1 1 5 6 6 0 . . 4 6 1 13 3 5 1 . . 4 8 , i 1 1 1 1 5 2 . . 2 1 ! 1 1 0 0 3 4 . . 9 9 on pages 100-101 of the Februray, 1918, num- April, 1916 163.1 ! 165.4 135.6 i 117.2 106.9 May, 1916 169.2 I 166.7 134.9 I 119.2 106.9 ber of the Bureau's Monthly Review. As in June, 1916 105.1 ! 161.3 133.1 ! 119.2 109.8 the ease of the relative wholesale prices, the J A u u ly g , u s 1 t 9 , 1 1 6 916 1 17 6 1 3 . . 3 1 i 1 1 6 6 0 5 . . 7 6 1 1 3 36 2 . . 0 2 ! j 1 1 2 2 0 4 . . 2 2 1 11 0 0 8 . . 8 8 figures given in the original compilation have September, 1916 173.2 ! 165.5 139.0 i 128.3 115.7 October, 1916 | 180.0 | 174.3 147.8 I 134.3 118.6 been changed b}^ shifting the base to the July November, 1916 j 187.2 ! 185.7 157.7 I 144.4 123.5 December, 1916 1 192.2 | 190.9 158.5 I 147. 5 123.5 January, 1917 j 194.1 i 196.2 160.9 i 151.5 125.4 1 Sec Wesley O. Mitchell; index Numbers of Wholesale Prices in theFebruary, 1917 ! 198.7 I 201.9 163.3 i 156.6 130.4 United States and Foreign Countries, in Bulletin of the U. S. Bureau of March, 1917 207.7 208.1 168.3 I 161.6 130.4 Labor Statistics No. 173: July, 1915, p. 39 and foil. Apnl, 1917 210.8 | 213.1 174.6 I 172.7 142.2 »This explanation apparently assumes a general price level equally May, 1917 212.1 215.5 178.6 | 182.8 148.0 high in the three countries for the initial period, an assumption which is June, 1917 221.2 i 222.2 185.6 ! 185.9 149.0 not proved. If. for argument's sake, it is admitted that the general July, 1917 219.3 ! 217.8 189.4 J 186. 9 143.1 level of wholesale prices in Great Britain, as reflected in the Economist's August, 1917 221.6 I 216.4 192.1 ! 185.9 146.1 and Statist's index numbers, was lower before the war than in this September, 1917 220.8 217.2 195.3 ! 183.8 150.0 country and in Canada, and that as the result of the elimination of End of October, 1917.... 223.3 222.4 197.5 j 181.8 153.9 British trade with the greater part of Europe greater reliance had to be November, 1917 226.0 225.2 205.6 ! 183.8 152. G placed upon America as a source of supply, it follows that wholesale December, 1917 228.2 227.9 207.4 ' 182.8 153.9 prices in Great Britain for the more recent period must show a rela- January, 1918 226. 6 229.3 208.8 156.9 tively larger advance than in this country and in Canada, even if no February, 1918 227.9 230.7 208.7 157.8 account is taken of the large rise in freights. See A.. O. Pigou: TheMarch, 1918 229.8 231.5 213.3 151.0 proportion of British price changes that is due to local causes, in Eco- April, 1918 233.1 218.3 nomic Journal, December, 1917, p. 481 and foil. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

-si jT7 Eft in Jut _.. V zL i^1 0 i f - £30 fi 5P m WA fin fc \'l& 2^ —^ / £20 i—tefjpi^i—f *m 2Kfea ., £~ —^ap» »/• \wt ^7 TAa? litmk r» TO r ZiO \—^a 1. . i£ ^ £ —m w: Wt ,m / _ mo t {£/—- // - m i 80 — / f / ' / • , / / "7 /so t , • • — - - 1 1 i\f' f PO /I -^ IPO \m —J - — • A ~i if f— / • — ISO if— 1 ^ V —~j? — f • / ^f —1 / / * i ^ —\ ISO H 140 — f / id /• •• /H / m issss j——< ISO —- —A. / —3 *— 120 — f£~— _^ JL- • ... 1 -— - /a? no SC i. — ^J — s r*' ij sad ?** si" * —i ,— w s s i i Si i i I 1 11 1 111 1 1 8 1 8 111 —f— t 1 1 • 1 |; IS 13IG 1917. _ ..19/JL. i § Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

506 FEDERAL RESERVE BULLETIN. JUNB 1, 1918. Amounts of Money Held by the Treasury and totals of gold coin include the amounts standthe Federal Reserve Banks and Amounts ing to the credit of the Federal Reserve Banks and agents in the gold settlement fund, held Held by Other Banks and the General Public. in the Treasury, the total gains in gold coin As showing the effect of the law of June 20, fairly corresponding to the growth of the gold 1917, upon the monetary situation, especially settlement fund during the same period. with regard to the concentration of gold at the Standard silver dollars and Treasury notes of Federal Reserve Banks, the following tables 1890 are not shown separately in the Federal have been constructed by combining the figures Reserve Banks7 reports. Such amounts as of the Treasury's monthly circulation state- they hold are shown combined with "Subment, beginning with July 1, 1917, with cor- sidiary silver77 and "United States notes/7 responding figures of the various classes of respectively. money held by the Federal Reserve Banks and Some changes from the figures printed in agents. It will be noted that between July 1, the Treasure's circulation statement are due 1917, and May 1, 1918, the Federal Reserve to the revision of the items by the banks system showed a gain of $424,728,417 in gold themselves following the dispatch of telecoin and of $104,742,455 in gold certificates. graphic data which are used in the compila- As stated in the footnote to the table, the tion of the Treasury statement. Estimated general stock of money, money held by the Treasury and by the Federal Reserve system,, and all other money in the United States. July 1,1917. Aug. 1, 1917. Held in the Held outside Held in the G o t e f h n e S m e t r U o a a n t l n e e s i s y t t . e o d c in k a t T s h U S r a e e n s t a a s i G s t e t e e u t o s s d r v y o - f f B H o R a e r a n l g e d F k s e e e s n b d r t y a v e s n e . r o a d r l T t t h r h e e R e a S e s t F U s u a e e t n r r e d y i v s e t a e e r n d al d G o t e h f n e m S e t r U o a a n t n l e e i s s t y t . e o d i c n k T as r G s U e S e a o n t t s v a s i u t t e o e e r r f s y d n t - a h s e H f B o R e a r a l n g e d F k s e e e s n b d r t a y v e s n e r . o a d r l H S u F t t r h e e a y e l d t d e e a U s r o n a T n u d l i r t R t s e e t i a h e d d s - e e ernments System. ments serve System. Gold coin « 83,090,607,703 $202,325,168 8700,280,235 $593,961,921 $3,086,218,498 $188,163,487 $769,688,709 $592,897,113 Gold certificates 501,12S,580 1.092,911,799 518,050,060 1,017,427,129 Standard silver dollars "" 588," 270,'061""i6,"962*556" 179,078 71,650,883 "568,"276,"66i" "2L0i2,"643" 187,488 71,622.687 Silver certificates 8,741,521 468,765,615 14,978,021 458,510; 027 Subsidiary silver 198,832,889 4,417,785 194,415,104 199,470,157 4,494,741 194;975,416 Treasury notes of 1890 1,970,414 1,959,195 United States notes 346,681,016 10,429,162 23,313,705 312,938,149 346,681,616 10,546,308 37,332,565 298; 802,143 Federal Reserve notes 547,407,960 2.658,745 36,671,860 508,077,355 584,169,800 3.002,855 46,334,460 534,832,485 Federal Reserve bank notes 12,790,245 90,585 8.991.020 3,708,640 12,699,440 69,710 7,395,100 5,234,630 National bank notes 715; 420,010 r 16,787,619 1,574,715 697,057,676 715;783,922 20,978,581 2,024,325 692,781,016 Amou T nt o ta p l er capita outside the 5,480,009,884 253,671,814 1,280,880,714 3,945,457; 556 5,513,292,894 248,268,325 1,395,982,728 3,869,041,841 United States Treasury and the Federal Reserve System 37.88 37.10 Sept. 1, 1917. Oct. 1, 1917. Held in the Held outside ! Heldin the Held outside General stock United Held by or the United General stockj "qS}*®? Held by or the United o t f h e m U on n e i y te d in T S re t a a s te u s ry fo R r e F s e e d rv e e ral Trea S s t u at r e y s and of money in [ rp^sury fo R r e F s e e d rv e e ral Tre S as ta u t r e y s and States. t a h s e a G ss o e v ts e r o n f - Ba a n g k e s n t a s. nd th R e e F s e e d rv e e ral b* !the Govern- Ba a n g k e s n t a s n . d the R e F se e r d v e e ral ments System. 1 mentS System. Gold coin a $3,062,614,285 3183,441,694 $716,260,274 $624,987,248 $3,035,390,720 $196,370,317 $703,960,384 $589,734,050 Gold certificates 553,680,940 984,244,129 621,226,710 924,099,259 Standard silver dollars 568,270,061 21,514,343 153,400 72,355.084 588,269,513 15,381,213 75,360 73,864,790 Silver certificates 14,090,470 458,210', 298 13,021,515 463,990,324 Subsidiary silver 200,837,387 3,761,213 197,076,174 204,044,123 1,982,226 202,061,897 Treasury notes of 1890 1,946,466 1,936,311 United States notes 346,681,016 6,611,049 38,366,116 301,673,851 346,681,016 5,797,485 35,568,738 305,314,793 Federal Reserve notes 644,911,800 2,801,345 48,452,906 595,657,549 758,869,242 5; 148,900 52,626,970 701,093,372 Federal Reserve bank notes 12,608,890 127,670 3,977,000 8,504,220 12,406,860 73,610 2,000,000 10,333,250 National bank notes 717,737,715 21,366,953 1,005,955 695,364,807 716,603,382 17,715,276 942,755 697,945,351 Total 5,553,681,154 239,654,267 1,373,987,061 3,940,019,826 5,642,264,856 242,469,027 1,429,422,432 3,970,373,397 Amount per capita outside the United States Treasury and the Federal Reserve System 37.73 37.97 a Includes balances in gold settlement fund standing to the credit of the Federal Reserve Banks and agents. & Includes reserve funds against issues of United States notes and Treasury notes of 1890, and redemption funds held against issues of national bank notes, Federal Reserve notes, and Federal Reserve bank notes. 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JUNE 1,1918. FEDERAL RESERVE BULLETIN. 507 Estimated general stock of money, money held by the Treasury and by the Federal Reserve system, and all other money in the United States—Continued. Nov. 1, 1917. Dec. 1, 1917. Heldin the Held outside Held in the field outside G o t e f h n e m S e t r U o a a n t l n e e i s s y t t . e o d i c n k t a h T s e U S r a e G s n t a a s i o s e t t v e e u ts s e d r r y o n f - . H f B o e R a a r l n g d e F k e s e e n s b d r t y a v s e . n e r o d a r l T t t r h h e e R e a S s e F t U u s a e e r n t d y r e i v e s t a e r e n a d l d G o t e f h n e m S e t r U o a a n t l n e e i s s y t t . e o d i c n k t a h T s e U r S a e G n s t a a s i o s t e t v e e u t s s d e r y r o n f - H f B o e R r a a l n g d e F k s e e e n s b d r t y v a e s . n e r o a d l r T t t r h h e e R e a S s e F t U u s a e e r n t d y r e i v e s t a e e r n a d l d ment. & System. ment. & System. Gold coin a S3,041,549,041 3197,533,851 5780,497.258 §581,756,083 $3,040,472,040 $192,279,247 8881,402,795 §572,978,029 Gold certificates 647,615,670 834,146,179 641,827,450 751,984,519 Standard silver dollars 568,269,513 13,958,993 177,017 75,763,241 568,269,513 15,074,742 188,839 76,626,468 Silver certificates 14,036,210 462,413,261 16,602,714 457,864,691 Subsidiary silver 209,864,245 1,980,121 207,884,124 214,465,300 1,962,947 212,502,353 Treasury notes of 1890 . ... 1 920 791 1,912,059 United States notes 34.6,681,016 6,706,982 37,310,425 302,063.609 346,681,016 6,828,891 37,69f), 989 302,156,136 Federal Reserve notes 928,243,720 7,355,240 62,591,775 858,296; 7051,126,344,610 17,560,005 65,301,509 1,043,483,096 Federal Reserve bank notes 12,970,425 59,320 2,732.400 10,178,705 12,843,365 86,480 2,732,400 10,024,485 National bank notes 716,276,375 14,670,870 1,163; 936 700,441,569 717,052,065 14,374,836 1,022,050 701,655,179 Total 5,823,854,335 242,265,377 1,516,124,691 4,035,464,267 6,026,127,909 248,167,148 1,646,773,746 4,131,187,015 Amount per capita outside the United States Treasury and the Federal Reserve System 38.54 39-40 Jan. I, 1918. Feb. 1, 1918. Held in the Held outside Held in the Held outside G o t e f h n e m e r U o a n l n e i s y t t e o d i c n k a T s U r S a e s n t a a s i s e t t e e u ts s d r y of H f B o e R a r l n d e F k s e e s b d r y v a e n e r o a d r l T t t r h h e e e a S s F t U u a e r n t d y e i e s t a r e n a d l d G o t e h f n e m e r U o a n l n e s i y t t e o d i c n k a T s U r S a e s n t a a s i s e t t e e u ts s d r y of H f B o e R a r l n e d F k s e e s b d r y v a e n e r o a d r l T t t r h h e e e a S s . t U F u a e r t n y d e i s e t a e r n a d l d States. the Govern- agents. Reserve States. the Govern- agents. Reserve ment, b System. ment, b System. Gold coin a §3,040,439,343 §212,230,998 5915,104,237 3569,946,034 $3,038,545,652 $232,211,663 8996,031,422 3520,744,467 Gold certificates 643,012,390 700,145,684 626,490,935 657,067,165 Standard silver dollars ""568,"269,*oi3""i6,"366*52i* 231,684 77,637,669 " "568," 269*513*28,366*981" 476,432 76,546,043 Silver certificates 14,272,909 457,918,667 19,164,158 441,821,401 Subsiding silver 218,226,579 1,791,850 216,434,729 221,081,713 6,465,587 214,616,126 Treasury notes of 1890 1,90S, 063 1,900,498 United States notes 346,681,016 8,781,228 34,715.268 303,184,520 346,681,016 i3,849,488 38,708,255 294,123,273 Federal Reserve notes 1.350,764,025 23.577,065 99,633; 475 1,227,553,485 el,366,858,445 27,961,820 127,932,700 cl, 210,963,925 Federal Reserve bank notes 12,605,165 ' 69,240 2,732,400 9,803,525 12,333,485 113,7J0 2,732,900 9,486,875 National bank notes 719,212,630 14,292,456 13,867,928 691,052,246 717,833,215 23,612,876 22,565,806 671.654,533 Total 6,256,198,271 277,043,358 1,723,570,291 4,255,584,622 0,271,603,039 332,576,125 1,834,102,608 4,104,924,306 Amount per capita outside the United States^Trcasuryandthe Federal Reserve System 40.53 39.04 i Mar. 1,1918. Apr. 1, 1918. Held in the Held outside Held in the Held outside G o t e f h n e m S e t r U o a a n t l n e e i s s y t . t e o d i c n k t a h T s e U S r a e G s n t a a s i o s e t t e v e u ts s d e r y r o n f - H f B o e R a r a l n g d e F k s e e e s n b d r t y v a e s . n e r o a d r l T t t r h h e R e e a S s e F t U u s a e e r n t d y r e i v e s t a e e ra n d l d G o t e f h n e m S e t r U o a a n t l n e e i s s y t t . e o d i c n k t a h T s e U r S a e G n s t a a s i o s t t e v e e u t s d s e r r y o n f - H f B o e R r a a l n d g e F k s e e e s n b d r y t v a e s e n . r o a d r l T t t r h h e e e I a , / S i s f t F u u s a r e e n t y e d r i v s e t a e e r n d a d l ments System. ments System. Gold coin a $3,041,643,270 $230,905,330$1,034,706,053 $520,929,003 53,042,708,319 $234,610,242 51,076,734,540 §509,375,655 Gold certificates 619,001,585 636,101,299 618,404,900 603,582 982 Standard silver dollars 568,269,513 30,368,823 585,305 76,010,049 568,269,513 36,482,080 750,271 76,360,709 Silver certificates 20,951,501 438,476,445 19,408,991 433,392,773 Subsidiary silver 222,805,182 8.392,651 214,412,531 225,971,720 10,607,733 215,303,987 Treasury notes of 1890 1,876,790 1,874,689 United States notes 346,681,016 13,918,100 38,280,520 294,482,390 346,681,016 11,485,378 39,073,486 296,122,152 Federal Reserve notes 1,442,088,335 30,693,360 90,963,412 1,320,431,563 1,563,969,405 31,449,191 100,664,403 1,431,855,811 Federal Reserve bank notes 12,020,735 138,500 2,732,900 9,149,335 11,662,045 67,570 2,753,920 8,840,565 National bank notes 718,040,005 16,510,412 19,904,932 681,624,661 720,919,507 15,094,480 15,733,621 690,091,406 Total 6,351,548,050 330,927,170 1,827,126,208 4,193,494,672 0,480,181,525 339,856,674 1,873,524,132 4,266,800,719 Amount per capita outside the United States Treasury and the "Federal Reserve System 39 83 40.47 a Includes balances in gold settlement fund standing to the credit of the Federal Reserve Banks and agents. o Includes reserve funds against issues of United States notes and Treasury notes of 1890, and redemption funds held against issues of national bank notes, Federal Reserve notes, and Federal Reserve bank notes. c Amended figure. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

508 FEDERAL RESERVE BULLETIN. JUNK 1, 1018. Estimated general stock of mov,ey money held by the Treasury and by^ the Federal Reserve system, and all other money in the y United States—Continued. ! M.ny 1, 1918. Held in the Held outside G o e f n m er o a n l e s y t o i c n k U S n ta i t t e e s d f H or e ld F e b d y e r o a r l the S t U a n te i s ted the United Treasury as Reserve Treasury and States. G a o ss v e e ts r n o m f e th n e ts Ba a n g k e s n t a s. nd th R e e F s e e d rv e e ral System. GoldTcoin a j S3,042,711,222 5239,947,082 ,125,008,652 G old certificates • 605,871,035 573,584,614 Standard silver dollars - - - -i 538,532,139 16,946,171 802,092 76,846,075 Silver certificates i 16,434,232 425,635,508 Subsidiary silver i 228,034,831 12,772,325 215;262,506 Treasury notes ofl890 1 1,868,061 United States notes I 340,681,016 334,715 43,084,494. 294,661,807 Federal Reserve notes j 1,650,964,290 480,570 99,128.870 1,525,354,850 Federal Reserve bank notes 11,742,955 101,570 2,917; 900 8,663,485 National bank notes 722,288,177 549,875 15,747,399 689,990,903 Total 6,540,954,630 J 321,192,308 1,909,594,674 4,310,167,648 Amount per capita outside the United States Treasury and the Federal Reserve System 40.82 a Includes balances in gold settlement fund standing to the credit of the Federal Reserve Banks and agents. & Includes reserve funds against issues of united States notes and Treasury notes of 1890, and redemption funds held against issues of national bank notes, Federal Reserve notes, and Federal Reserve bank notes. State Banks and Trust Companies Admitted. | State banks admitted—Continued. [ The following list shows the State banks ' Capital. Surplus. Total and trust companies which have been admit- resources. ted to membership in the Federal Reserve North-Western Trust & Savings I Bank, Chicago, 111 8500,000 8250,000 I 87,403,456 system during the month of May: First State Bank of Post City, Post City, Tex 25,000 63,27*3 State banks admitted. The Commercial Savings Bank ! & Trust Co., Toledo, Ohio 200,000 50,000 4,676,812 The Trust Company of New J ersey, Hobo ken, N. J 600,000 550,000 24,540,757 Capital. Surplus. ! Total Th S e o S u t t . h J B os e e n p d h , L Tn o d an & Trust Co., 200,000 100,000 3,036,868 The Southern Bank & Trust Co., Miami, Fla 100,000 845,895 Bank of Sturgeon Bav, Sturgeon Tillamook County Bank, Tilla- Bay, Wis... ." ' 50,000 10,000 1,293,906 mook, Ores- -. -* $40,000 80,000 §523,473 Dcnison Bank <fe Trust Co., Peni- M Fr C o e l m i s t o y o n , n I S t d ta a C t h e o o B u . n . a . t n ; y k , " B M a o n l k so , n, S W u a g . s a .. r h , . 2 2 5 5 , , 0 0 0 0 0 0 4 1 , ,0 0 0 0 0 0 2 1 2 7 8 2 , , 0 3 7 2 7 5 Dr s P o o a v n u e , l r , T s M ex S i t n a n te Bank, South St. 1 1 0 0 0 0 , , 0 0 0 0 0 0 2 5 3 0 , , 0 0 0 0 0 0 1,7 8 3 9 2 8 , , 6 86 2 2 2 Fa V rm al e li r a s n t S , t O at k e l a G uaranty \ Bank, 40,000 11,000 528,992 Bl I a d c a k h fo o ot City Bank, Blackfoot, 50,000 10,000 663,707 F F i i r r s s t t S S t t a a t t e e B B a a n n k k , o f G R ra e n a d g a P n r , a R ir e ie a , - 30,000 14,000 250,239 Th B e ank A , lp A e l n p a e na, C M ou ic n h t * y Savings 100,000 125,000 3,268,260 T T h h g P e e a l n e G F , a i u s T r a a s e n r t x a t, S n t T t y a e te x S ta B t a e n B k, a n P k a , d M uc o a u h n , t 0 2 0 5 , , 0 0 0 0 0 0 1 7 5 , ,0 0 0 0 0 0 5 1 7 0 7 9 , , 6 1 1 8 9 3 V B Th a a h e l n a l k e s s y .E o e B e f x , c C a F h n o a l k m a n , g m P e e h r o B c e e a n , n i S k x i , n A t o o f r n iz , T T al e l x a- .. 5 5 2 0 0 5 0 , , , 0 0 0 0 0 0 0 0 0 2 7 , , 5 0 0 0 0 0 4,2 2 6 6 5 0 , , 9 7 7 7 5 2 F S S T B B t t a h a a I T b o O M a r I e y n e c t I m e h e k e r k M x C i m e o L B i o G r i t p s n a f y a r h s k S o n C t B i e e w k t s , o a a r , e m t S n T S o e r . k s m e f t B , a D r S e m t G B a e a r t n c a k a e B e k y t n e , a e C & v n I B t i a k f t a T o , , y n r , r o M G k u M , , s e i O t n n T i s c r e C i t e v h m e o g a r . . - - , 1 , . , - . . 1,5 2 5 2 5 2 2 0 5 0 5 0 5 5 0 , , , , , , , 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,0 5 2 1 1 0 0 5 1 4 0 5 , , , , , , 2 0 0 0 0 0 5 0 0 0 0 0 0 0 0 0 0 0 2 4 0 , , 4 2 3 0 5 0 1 1 5 5 2 0 7 5 0 0 8 2 9 9 6 , , , , , , , 6 6 2 4 9 8 2 1 4 3 3 8 0 3 9 5 6 2 4 0 0 T T T S O B e h h h e a T C I B F W c e e e n v n e l u i a e y k i t F a x F H r s n y n s i o a i k , t t i h r o r , y l , o F s m l M s f t H l C b a e T S i e o S r o c r s c t r h t u u a o l a a a n s t n n e t , S t w d y S t B C a o M . a t S o o D e n e d a . , k a r v B , c k , i a L h n S I n a g e l t n k i s x a l t , n i l s n s w B P b g S l a o o t t a o n o a r n o n d t k e t , , , , 5 5 1 5 2 0 0 2 5 5 0 0 0 5 0 , , , , , , 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 1 5 0 1 1 5 5 0 0 0 5 0 , , , , , , 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8 1 , , 5 9 5 5 1 7 4 2 6 5 6 6 1 7 1 2 1 6 , , , , , , 6 7 0 6 6 3 9 6 2 6 5 0 6 0 3 6 3 3 Th S e u l C p e h n u t r r a S l p S ri t n a g te s, M Ba o n n k t , White 80,000 I 15,000 323,444 Th T e e x Citizens State Bank, Frost, 25,000 25,000 266,824 C A o l O t a o k l g l S a a t t a c t e S B ta a t n e k, B A a l n to k , , T C ex oalgatc, 5 25 0 , , 0 0 0 0 0 0 I ! 1 7 2 , , 5 50 0 0 0 5 2 5 1 3 9 , , 9 0 8 1 5 2 Th B e a nk "S , c S a e n a d tt i l n e a , v W ia a n s h "American" 1,000,000 500,000 240,557 First Guaranty State Bank, Jack- 16,123,767 sonville, Tex 50,000 ' 8,000 526,128 Alpine State Bank, Alpine, Tex... 30,000 30,000 281,822 Changes of names.—State institutions, members of the Federal Reserve Lake Providence Bank, Lake System, have changed their names as follows: Providence, La 25,000 5,000 328,946 German Savings Institution, St. Louis, Mo., to Liberty Bank. Chattanooga Savings Bank, Chat- German-American Bank, St. Louis, Mo., to United States Bank. tanooga, Term 750,000 225,000 5,578,950 German Insurance Bank, Louisville, Ky., to Liberty Insurance Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDEKAL BESERVE BULLETIN. 509 Four hundred and eighty-six State insti- Pertutions are now members of the system, having District. i Q n li o u m n o s i t l a . - Subscriptions. a c g e e n t o - f a total capital of $272,422,800, total surplus quota. of $348,100,495, and total resources of Minneapolis ' 116655 §180,826,350 172 $5,988,031,582. Kansas City 130 202,301,050 156 St. Louis 130 199,085,900 153 Atlanta 90 136,653,350 151 Philadelphia 250 361,963,500 144 Dallas 80 115,395,200 144 The Third Liberty Loan. C R h ic ic h a m go ond 4 1 2 3 5 0 6 1 0 8 8 5 , , 8 9 7 6 8 6 , , 6 9 0 5 0 0 1 1 4 4 3 3 Boston 250 354,537,250 142 San Francisco 210 286,577,450 136 Secretary McAdoo on May 18 issued the fol- Cleveland 300 404,988,200 135 New York 900 1,114,930,700 124 lowing statement: United States Treasury 17,915,150 In response to the Treasury's invitation for Total 3,000 4,170,019,650 subscriptions to $3,000,000,000 United States of America 4-| per cent gold bonds of 1928 of The foregoing figures are subject to slight the third Liberty loan there have been received modifications upon receipt of final audited figsubscriptions to the amount of $4,170,019,650 ures from the several districts. Any such from about 17,000,000 subscribers. This is adjustment will not materially affect the total. the most successful loan the United States 1 congratulate the country on this wonderful has offered both in number of subscribers and result which is irrefutable evidence of the in the amount realized. Every subscription strength, patriotism, and determination of the was made with full knowledge that allotment American people. in full was to be expected, unlike the first loan, when allotments were limited to $2,000,000,000, and the second loan, when allotments were New National Bank Charters. limited to one-half the oversubscription. The Comptroller of the Currency reports the LOAN AND TAXES TOTAL $7,000,000,000. following increases and reductions in the num- This great result was achieved, notwith- ber of national banks and the capital of nastanding the fact that the country has been tional banks during the period from April 27, called upon to pay since the second Liberty 1918, to May 31, 1918, inclusive: loan and to and including the month of June Banks. income and excess-profits taxes to the amount New charters issued to 15 of approximately $3,000,000,000, which will With capital of §640,000 make a total amount turned into the Treasury Increase of capital approved for 15 of the United States from such taxes and the With new capital of 1,020,000 third Liberty loan of about $7,000,000,000. In the first campaign, which started just Aggregate number of new charters and one year ago, bonds were sold to approximately banks increasing capital 30 4,500,000 people, and the country was amazed With aggregate of new capital authorized 1,660,000 at this wonderful evidence of public interest. Number of banks liquidating (other than In October about 9,500,000 people bought those consolidating with other national Liberty bonds, and now, with an even more banks) 3 effective organization and an intense spirit of Capital of same banks 680,000 patriotism throughout the country, approxi- Number of banks reducing capital 0 mately 17,000,000 people purchased bonds of Reduction of capital 0 the tnird Liberty loan. This equals approxi- Total number of banks going into liquidamately one-sixth of our total population. tion or reducing capital (other than those consolidating with other national banks)« 3 REPORT BY DISTRICTS. Aggregate capital reduction 680,000 The report by districts, arranged in order The foregoing statement shows the aggregate of of their percentage of oversubscriptions, is as increased capital for the period of the banks follows: embraced in statementaa was 1, 660,000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

510 FEDEBAL RESERVE BULLETIN. .TUNE 3, 1918. Against this there was a reduction of capital State Banks and Trust Companies Entering the owing to liquidation (other than for consoli- Federal Reserve System.1 dation with other national banks) and reductions of capital of $680,000 By BRECKINBIDGE JONES. Net increase. 980,000 When Congress, at the recommendation of the Federal Reserve Board, on June 21, 1917, passed amendments to the Federal Reserve Commercial Failures Reported. act, it was done with the hope that thereby all reasonable objections the State banks and That the economic readjustments occasioned trust companies had to entering the system by war conditions have caused no general or would be removed. When I had the honor of addressing your conspicuous disturbance in business is demonconvention in April, 1915, I attempted to set strated by the continued reduction in the out clearly what those objections were. At country's commercial mortality, only 604 fail- Atlantic City, last September, in a paper read ures, exclusive of banking and other fiduciary before the Trust Company Section of the suspensions, being reported to R. G. Dun & American Bankers' Association, an effort was made to show how those amendments had met Co. in three weeks of May, as against 871 in those objections, with the single exception of the corresponding period of last year. The not remedying the defects of section 22 of the returns for April, the latest month for which Federal Reserve act. I say this single excepcomplete statistics are available, disclose 905 tion, because, as I see it, the two or three other defaults for §14,271,849, in comparison with objections that are urged are not to radical defects in the Federal Reserve act itself, but 1,069 insolvencies in April, 1917, for $12,rather to (1) a misapprehension of how a State 587,213, While the April liabilities are 13.4 institution would be affected, if it were to come per cent in excess of the April, 1917, total, into the system, and (2) objections that can. they are the lightest for the month, with the and will be remedied by the Federal Reserve exception noted, in over a decade, and the Board. number is not only less than in any month MINOR OBJECTIONS. since September, 1911, but is also the smallest After quite extensive correspondence with for April back to 1907. Separated according to State institutions that have pot entered the Federal Reserve districts, the April statement system, I find that the objections are reduced to a few oft-repeated points. shows fewer failures than last year in all of the 12 districts, aside from the first, ninth, and OBJECTION OF LOSS OF INTEREST ON RESERVE tenth, whereas the indebtedness is larger in ACCOUNTS. in all instances, except in the first, third, fifth, First, and oftener than all the others, is the and sixth districts. objection that a State institution would lose Failures during April. interest on balances that it might transfer from, its present correspondents to the Federal Reserve Bank. As an abstract proposition, that Number. Liabilities. objection is well taken, but the results of such District. loss of interest, I think, are fully offset and are 1918 1917 1918 1917 not so serious as is so often asserted. Many State bankers think that Federal Reserve Banks No. 1—Boston 122 §1,405.975 81,643,235 No. 2—New York... 201 4,610,726 4,005,078 should allow interest on reserve accounts. That No. 3-Philadelphia, 47 535,628 1,249,883 conclusion is inconsistent with the very nature No. 4r-ClevelandL... 90 1,460,787 1,180,192 No. 5—Richmond... 57 553,992 of the Federal Reserve Banks. Those banks No. 6—Atlanta. 74 271,667 914,200 No. 7—Chicago 129 159 1,597,477 856,910 are reserve banks, established not primarily for No. 8—St. Louis. 54 447,362 208,438 money-making purposes, but for the protection No. 9.—Minneapolis 24 268,785 207,200 No. 10—Kansas City... 41 392,835 260,208 No. 11—Dallas 44 251,858 228,577 No. 12—San Francisco. 156 2,659,920 1,279,300 1 Part of an address delivered before the convention of the State Bankers of Kansas, at Topeka, Kans., May 7, Total. 905 i 1,069 14,271, 12,587,213 1918. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL RESERVE BULLETIN. 511 of the country at large. If they paid interest on they are very favorably impressed with it and I believe their reserves, then they woula have to make they will soon join the Federal Reserve system. There those reserves profitable by lending them out was some prejudice but no argument against it and it was admitted by them that it would pay. and not having them as a means of accommo- Yours, very truly, dating member banks, and, moreover, bringing L. D. JONES, these large Government instrumentalities in Assistant Cashier. direct and hurtful competition with the member banks, for whose aid and not for whose ADVANTAGE OF CENTRALIZING RESERVES IN injury, in part, the Federal Reserve Banks FEDERAL RESERVE BANK. were established. Moreover, while a member bank receives no interest on its reserves with It is frequently urged that the reserves that the Federal Reserve Bank, yet through the would be carried in the Federal Reserve Bank recognized right of prompt rediscount which would have to be withdrawn from present balthe member bank has with the Federal Reserve ances with some member bank, so the question Bank, the member bank is enabled to greatly is asked what is to be gained by making the reduce the reserves which it had been enforced transfer ? The answer is, first, the balance now to carry before it entered the system. A mem- kept with the member bank correspondent is ber bank can get along with much less actual in the reserves of that correspondent as a unit, cash in its own office, and with less balances where it can be applied only for the uses of that with its correspondents in reserve, and central unit, and may remain dormant if that unit has reserve cities. I know this not only theoret- no direct need for it, whereas if the balance were ically, but as a matter of practical experience in the Federal Reserve Bank it would be in the in the institution with which I am connected, as general reservoir that is ready to go to the aid well as from numerous statements to this effect of any district in need and t>e readily changed from other State institutions which have be- from time to time, as the nieds of the several come member banks. Yesterday I received districts change—and, second, this balance from a country banker, and will read to you, a with the city correspondent may be performing letter that expresses well the present trend of no public service, whereas if the balance were thought: in the Federal Reserve Bank it might be, with only 40 per cent gold reserve, the basis for issue THE MONTICELLO BANKING CO., by the Federal Reserve Bank of two and one- Monticello, Ky.. May 4, 1918. half times the amount in Federal Reserve notes. Mr. BBECKINRIDGE JONES, President Mississippi Valley Trust Co., St. Louis, Mo. If you will consider the large aggregate of the MY DEAR SIR: On the 22d ult. I wrote you in regard to balances of the eligible State banks and trust the controlling factors which have kept us out of the companies, and the great demand that may be Federal Reserve system. Since that time I have figured put upon the Federal Reserve Banks as the a little more closely and I find that the argument I made in my letter to you was considerably one-sided in that it result of war conditions, the importance of did not contemplate the full use of the system. cooperation of the eligible State banks and I find on going further into the matter that instead of trust companies is evident. operating under the system at a loss of enough to declare a 3J or 4 per cent dividend as I stated in my letter, we can, by using a part of the reserve we now carry, make enough ELIGIBLE BANKS IN KANSAS AND IN UNITED to offset the loss mentioned and in addition make for our stockholders 7 or 8 per cent. STATES. It has been our policy to carry a very heavy reserve, averaging a little over 40 per cent. I find that, without In Kansas there are 313 eligible State banks abandoning this policy entirely, we can reduce this reserve and trust companies with a capital of $13,381,one-half and invest it in good commercial paper or bank 000, surplus $5,900,000, and total resources of acceptances, using this class of paper as a secondary reserve, it being readily discountable at the Federal Re- $156,182,000, while in the United States at serve Bank on short notice and agreeable terms, makes it large there are approximately 8,000 eligible a very nice secondary reserve in case of need. The extra State banks and trust companies, not including earnings from this source would make us the per cent of those that have already joined. The aggregate profit mentioned above. Of course, our small capital and comparatively large capital of these nonmember banks and trust deposits makes this possible for us when it would not be companies is approximately $695,000,000, surso to such an extent with many other banks. plus $425,000,000, and total resources $7 I have argued the matter before a recent meeting of our r 596,000,000. board of directors and I find after presenting it in this way 62161—18 5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

512 FEDERAL RESERVE BULLETIN. JUNEI, 1918. PRESENT NUMBER OF STATE MEMBER BANKS. States that they join the system—I say, to put forward the slacker excuse that they will On April 30 there were 444 State institutions not cooperate in this respect because of some that were members, with an approximate fancied, or even if it were an actual, loss of 2 aggregate capital of $266,000,000, surplus or 2§ or possibly 3 per cent or not to exceed, in $345,000,000, and total resources of $5,883,- any case, 15 per cent of their deposits ? 000,000. Moreover, there are various means by which OBJECTION OF LOSS OF COLLECTION INCOME. a member bank can adequately compensate itself for this loss of interest on the reserves The same line of thought might apply to the kept with the Federal Reserve Bank. I have objection, frequently urged, that if a State yet to hear any complaint on this score from a bank or trust company should join the system single member bank that has had experience in it would lose some of its collection income. the system, This subject has had so much discussion from time to time that I will not make any elaboration of it here, merely suggesting that most LOSS OF INTEREST ON RESERVES UNIMPORTANT State banks and trust companies have as com- WHEN COMPARED TO SACRIFICES MADE BY petitors national banks in their communities. OTHERS. These national banks are living and prosper- And again, even if there were some small loss ing under the Federal Reserve system and not to the State institutions on this account, can making complaint on this score. The feared that small loss be urged as of deciding import- loss of income from this source, if a State bank ance in these war times? We are giving the should come into the system, is more imaginary lives of our boys, and let every man here who than real, and I think we might as well reconhas a heart or "a soul relaize what that means, cile ourselves to the system because it is within without further elaboration. The railroads the power of the Federal Reserve Board to have not been left to discuss whether some little make regulations that would take care of this thing would take something from their profits, matter so as to put us on the same basis as the but the Government has taken over all the national banks, and it will be the duty of the operations of railroads as a war measure. Federal Reserve Board to make such regula- Within the week the Steel Corporation offered tions, if the State banks and trust companies the use of all its manufacturing resources, are arbitrary on this question and remain out giving priority in its manufacture to the needs of the system on that account. of the Government, to the exclusion of its profits on private contracts, and its president, OBJECTION THAT SO FEW INSTITUTIONS ARE the president of the Associated Steel Industries MEMBERS. of the United States, requested all that association's 1,500 members, by formal resolution, to By correspondence with some of the eligible do likewise; yet, within a few days thereafter, banks, it develops that a number of them rethe Government commandeered for Govern- main out just because they are out and have ment uses, to such an extent as needed, the not taken the pains to look closely into the entire output of all the iron and steel industries matter and say, "Well, so long as out of the in the United States. The people of the United thousands of eligible State banks and trust States, in every State and in every town, have companies less than 500 have come in, those joined in subscribing for billions and billions of that stay out must have some good reason for Government bonds, at 3|, 4, and 4§ per cent it, and we will just wait and see what happens." interest, when all of these subscribers could That is the argument of the sluggard and of the readily have invested their money at a much man who has not the spirit nor the force to be higher rate. Appeals for the Eed Cross, an independent factor in dealing with the great Young Men's Christian Association, and Knights national questions immediately incident to his of Columbus have met with the response of tens own business—a business in which the people of millions of dollars from patriotic, open- in his community recognize him as a leader. hearted American citizens. Shall it be left Instead of being impressed with the number only to the State banks and trust companies of State banks and trust companies that have throughout this fair land, in its year of distress not come in, might it not be more reasonable and trial, to put forward the slacker excuse— for him to look to the character of those that they will not join in meeting the direct and have come in and their experience since they urgent appeal of the President of the United have come in ? Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1018. FEDEBAL RESERVE BULLETIN. 513 OBJECTION OF NECESSITY OF ADDITIONAL STATE- member bank across the street ? I asked my- MENTS. self these questions and was bound to answer No. Then I asked myself are not my custo- A number of State institutions still say that mers as wise and as careful as I am ? Yes. they do not wish to be bothered with the enor- Then how can I expect them to continue to do mous and intricate statements that have to what I would not be willing to do myself? We be made out by national banks, forgetting that joined the system. under the amendments to the Federal Reserve Act, passed last June, they reserve all of their PRINCIPAL OBJECTION, SECTION 22. powers under their State charters, and remain under the bank commissioner of their own Now, referring back to section 22 of the State, and are in no sense under the Comp- Federal Reserve Act, I think there is in the troller of the Currency at Washington. law as it now stands a serious objection; but A number say they can not serve two masters this objection, I trust, will soon be remedied, and do not wish to be subject to dual control, and I ask your careful consideration of what is also forgetting the point just mentioned, and said on that subject in the hope that this not realizing the fact that no member bank has convention will pass a resolution and communiexperienced any difficulty in this regard. cate with your Senators, by wire, asking them to cooperate in securing the passage of that THE SOLUTION OF THE DIFFICULTY. part of House bill 11283 that proposes to amend section 22 of the Federal Reserve Act. As to these various objections, let me suggest I would like to discuss that question in rather that the State banker study the question, confer close detail, because of its importance. with the Federal Reserve agent of his district, The Federal Reserve Act was passed in and correspond with the State institutions that December, 1913. In discussing it in May, 1914, have joined the system, and he will find that before the Alabama Bankers' Convention, I he will get rid of a great many of his cobwebs. made certain comments as to section 22, ajid I felt an obligation to accept the invitation of these comments were repeated as still holding your committee and come and talk to you on good when I addressed you a year later. this subject, because when I spoke to you They were brought to the attention of the three years ago, I centered my thought on the Federal Reserve Board. I refer to them here to objections to the Federal Reserve system. preserve the continuity of thought, and to let When I found that Congress was about to pass them be the basis for a further discussion and the amendments that would remove all of my an appeal to you to help make them effective. objections, save the one connected with section I believe that if Congress will reasonably 22, the institution of which I am president amend this section 22 they will have removed joined the system I am now speaking after a the last fundamental objection to the form of year's actual experience in the system. I say the Federal Reserve Act that can be urged at to you frankly that if we were not now in, we this time by the State banks and trust comcould not adequately meet the demands that panies. now come on us, either in the way of facilitating the governmental matters that come up, or in accommodating our customers. We would not SECTION 22 AS ORIGINALLY ENACTED. for a moment consider going out. Now, what are the facts about section 22 ? As originally enacted, that paragraph that is ABILITY OF THE MEMBER BANK TO MEET objectionable was as follows: UNUSUAL REQUIREMENTS. Other than the usual salary or directors' fee paid to any One special point I should like to make. officer, director, or employee of a member bank, and other Would you, as a nonmember bank, consider than a reasonable fee paid by such bank to such officer, keeping all of your reserves with nonmember director, or employee for services rendered to such bank, no officer, director, employee, or attorney of a member banks and expect to depend entirely on such bank shall be a beneficiary of, or receive directly or nonmember correspondents in time of stress? indirectly any fee, commission, gift, or other consideration Would you feel that you had the right to hold for or in connection with any transaction or business of the a large part of the deposits of the people of bank. * * * Any person violating any provision of this section shall be punished by fine of not exceeding your community and not be as well protected $5,000 or by imprisonment of not exceeding one year, or in taking care of them as is your competitor both. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

514 FEDP^RAL RESERVE BULLETIN. JUNE 1, 1918. In a published memorandum of the Federal j directors of a bank and talk to him about a Reserve Board, under date of April 26, 1915, | loan on a farm. The director of the bank they said, "No ruling or interpretation by the j would arrange to lend the farmer at from 8 to Federal Reserve Board would afford any pro- 10 per cent interest and then take the loan tection to a person subsequently indicted by a over to the bank and get the money at, say, Federal grand jury for any such violation" of 6 per cent, the bank furnishing all the money this section. Therefore, only a court could that went to the farmer, the director making make a final determination on the meaning of j the difference in interest. that section. As yet, no court has construed it. (2) In the cities especially it had been Therefore, as any violation of the provisions of claimed that a director of a bank would use section 22 by officers, directors, employees, or his position as a director to make the bank attorneys of a member bank constitutes a take participations in the purchase of large crime, punishable by fine and imprisonment, it underwritings of bonds, or buy other securities becomes important to see just what that section or property in the sale of which the director means. was interested and had a personal profit, or (3) A director would use his position as director of the bank to buy, at a lower price PRINCIPLES OF LAW APPLYING TO BANK than others could buy from the bank, securi- DIRECTOR. ties or other property owned by the bank; and It is important to inquire what are the funda- (4) It* was urged when the Comptroller and mental principles that apply to a director of a bank examiner or stockholders found that a bank—this independent of any statute pro- director was thus making a misuse of his posivision. We can then see what the evils were tion as a director, there was no direct statute that were to be remedied; then, as no court making the director personally liable and no has construed this section, see what construc- way to protect stockholders and depositors tion the courts have given to other acts of without going into the merits of the divers practically the same purport; then see what individual transactions and attacking the amendments Congress is now proposing to this director in court, and generally the grasping section. director was of such high position and influence in the community that the ordinary man * * * ** hesitated to raise the question. It is important to have in mind that in the So Congress passed this section 22, providing event a question came up between a trustee that other than the usual salary or directors' and a beneficiary of a trust, it was the option fee, and pay for services rendered, no officer, of the beneficiary whether to raise the question director, employee, or attorney in any bank of setting the transaction aside; so with the shall be the beneficiary of or receive, directly director of a bank, where the question was or indirectly, any fee, commission, gift, or other that the director had made unfair use of his consideration for, or in connection with, any position, it was at the option of the bank or its stockholders, or any third party in interest, transaction or business of the bank, and proto raise the question. The contract was not viding fine and imprisonment for violation. void absolutely, but was voidable at the in- To say that he should not directly or indirectly stance of the injured party. But, as a prac- be the beneficiary, etc., of any consideration tical matter, it was found that directors many arising out of any business of the bank is just as times did take unfair advantage of their posi- broad as saying that he should not be directly tion and no one raised the question in a or indirectly interested in any business of the public way. bank. * * * * * WAYS IN WHICH A DIRECTOR MISUSED HIS Frequently when the Comptroller, or a bank POSITION. commissioner, or a clearing-house examiner finds a bank in bad condition he calls the di- As to the kinds of transactions that were rectors together and arranges with them to buy most frequently mentioned: from the bank certain bad or questionable (1) Out through the rural districts, it was assets, and yet, under this section 22, if the claimed that when an application was made to directors did so come to the relief of the bank, a bank for a loan, some director would charge they would be subject to fine and imprisonment. a commission, getting the bank to make the Banks usually try to have as their directors loan; or, a farmer would go to one of the men of large means and varied interests and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL RESERVE BULLETIN. 515 put them on their boards so that they can have the required amount of capital and surplus to make nave the influence and business of sucli men them eligible for membership to unite with the Federal Reserve system now and thereby contribute their share for the bank. If section 22 remains as it is, to the consolidated gold reserves of the country? I feel the tendency will be to drive from the board sure that as member banks they will aid to a greater degree of directors of the State banks and trust com- than is possible otherwise in promoting the national welpanies such active successful men, the very fare, and at the same time, by securing for themselves the men whose experience, familiarity with current affairs and natural strength make them most customers. I believe that cooperation on the part of the valuable as directors, and put in their places banks is a patriotic duty at this time, and that membership men of less value, or probably dummies. It in the Federal Reserve system is a distinct and significant evidence of patriotism. is evident that if this section 22 remains unamended there is in it a fundamental objection to State banks and trust companies becoming RESOLUTION PASSED BY CONVENTION. member banks and thereby making its pro- After the reading of the paper the convenvisions applicable to them. tion unanimously passed the following resolution : PROPOSED AMENDMENTS NOW BEFORE SENATE. Whereas section 22 of the Federal Reserve Act, as now existing, is unreasonably drastic and stands as a serious But the Federal Reserve Board, thoroughly objection on the part of the State banks and trust comawake to the objections to section 22, even as panies against then* entering the Federal Reserve system, amended above, after the fullest consideration, and Whereas there is now pending in the United States has recommended to Congress an amendment Senate House bill 11283, which, as passed in the House of to section 22, this amendment now being a part Representatives, amends section 22 so as to make it of House bill 11283, passed by the House of reasonably free from objection, yet effective to remedy the Representatives at Washington on April 24, evils aimed at: Therefore be it Resolved, That the Senators from Kansas be, and they and now before the Banking and Currency are hereby, urged to use their best endeavors to have be- Committee in the Senate. come a law, unchanged as it came from the House, that part of House bill 11283 relating to said section 22 of the Federal Reserve Act; and As indicated above, I trust that this conven- Resolved further, That the president of this convention tion will indorse this amendment and request forward this preamble and resolution, by wire, to our Senators. your Senators to see that it becomes law. Prompt action is required, as the Senate committee is liable at any time to report the bill. Liberty Bonds Lost or Stolen. With that one remaining primal objection to the Federal Reserve Act removed, as I The Federal Reserve Board has been adsincerely hope it soon will be, then it will be vised of more or less extensive losses or thefts left to be said that the State banks and trust of Liberty bonds, occurring at various banks companies are the most sluggish of all instituthroughout the country, and has undertaken, tions in America in arising to the performance of a patriotic duty. I am sure it will not be on behalf of the Protective Department of the left to be so said, in Kansas, a State of historic American Bankers Association, to print loyalty—a State that has so cordially responded monthly a list showing the numbers and values to every other appeal to stand by our beloved of the bonds referred to. Banks to which country in these fateful times of war. any of these bonds, or coupons belonging to them, are presented, are requested to write, PRESIDENT WILSON'S APPEAL. telephone, or telegraph to L. W. Gammon, I can close this talk, already too long, in no Manager, Protective Department, American more fitting way than to quote the following Bankers' Association, 5 Nassau Street, New words taken from a formal public appeal made York City. by President Wilson last October: The first list of bonds, supplied by Mr. Gam May I not, therefore, urge upon the officers and directors of all nonmember State banks and trust companies which mon, is as follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

516 FEDERAL RESERVE BULLETIN. JUNE 1,1918. FIRST 3£ PER CENT BONDS, DUE 1947 SECOND 4 PER CENT BONDS, DUE 1942—Continued. Number. Amount. 140086.. 140087.. .. 140095.. 140096 140097.. 140098 14C099 140100.. .. 140101 140102 140103 140104 140105.. . 140106 140107.. 140108 140109. 140110... . 140111 140112 140113 ggggggggg 50 50 50 50 50 50 50 50 50 ggg Number. Amount. Number. Amount. Number. 140114... S50 65547.. $100 140115 50 19070.. 500 140116 50 19071., 500 1031339 50 19072.. 500 1031347 50 19073. 500 1031355 50 19074. 500 1031356 50 19075.. 500 65533 100 19076. 500 65534 . 100 19077. 500 65535 100 19078. 500 65536 - 100 134655 500 65537 100 223003 1,000 65538 100 223004 1,000 65539 .. 100 223005 1,000 65540 100 223006 1,000 65541 100 223007 1,000 65542 .. . . 100 223008 1,000 65543 100 223009 1,000 65544 .. 100 223010 1,000 65545 100 223011 1,000 65546 .. 100 223012 1,000 FIRST 4 PER CENT CONVERTED, DUE 1947. 540340 S50 540341.. 50 5*0342 sn 540343 540344 540345 SECOND 4 PER CENT BONDS, DUE 1942. ggg Amount. Number. Amount. Number. Amount. 8100 2327985.. S100 4585464 S100 100 ! 100 4585465 100 100 2327987.. 100 I4585466 100 100 2327988.. 100 i4585467 100 100 3262431.. ioo ;4585468 100 100 3262435.. 100 4585469 100 100 3262437.. 100 4585470 100 888847.. 100 3265438.. 100 4585471 100 100 4585384.. 100 4585472 100 100 4585385.. 100 4585473 100 100 4585386.. 100 4585474 100 888851. 100 4585387.. 100 i4585475 100 100 4585388.. 100 148664. 500 888853. 100 4585389.. 100 148665. 500 888854. 100 4585390.. 100 148666. 500 100 4585391.. 100 148667. 500 100 100 500 88S857. 100 4585393.. 100 500 100 4585394.. 100 148670. 500 100 4585395.. 100 .168511. 500 100 4585396.. 100 168512. 500 888861. 100 4585397.. 100 168513. 500 100 4585398.. 100 168514. 500 100 4585399.. 100 176262. 500 100 4585400.. 100 206571. 500 100 4585401.. 100 206572. 500 100 4585402.. 100 206573. 500 5*0346 . 850 99192 .. 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JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 517 SECOND 4 PER CENT BONDS, DUE 1942—Continued. July 1, 1918. Bonds presented for conversion on or before July 1 will be retained and a non- Number. Amount. Number. ! Amount. Number. Amount. negotiable receipt will be issued therefor, and adjustment of interest will be completed at 158537 ... $1,000 412152 :• §1,000 1609475 SI, 000 the time of delivery of conversion bonds. 395982 1,000 1608469 ! 1,000 1609476 1,000 395983.. 1,000 1608470 1 1,000 1609477 1,000 After November 9 no further rights of con- 396235 1,000 1608471 1,000 I 1628865 1,000 version will attach or accrue to 4 per cent bonds 396236 1,000 1608472 1,000 i 1628866 1,000 396237. . . 1,000 1609473 1,000 ! of the first Liberty loan converted or to 4 412151 1,000 1609474 1,000 i i ' per cent bonds of the second Liberty loan, and after that date 3£ per cent bonds of the first THIRD 41 PER CENT BONDS, DUE 1928. Liberty loan will have no further conversion rights with respect to the conversion privilege 705896 850 385330. .. S100 385369 S100 705949 . 50 385331 100 385373 100 now arising, but any unconverted 3J per cent 705950 50 385353 100 4620 .. 500 bonds will have a recurrent right of conversion in the event of any further bond issue at a Conversion of Liberty Bonds. higher rate than 3£ per cent before the termination of the war. All 4| per cent bonds, includ- Secretary McAdoo on May 10, 1918, authoring bonds issued upon conversions, are nonized the following announcement: cocvertible. Three and one-half per cent bonds of the Bonds may be presented and surrendered first Liberty loan, 4 per cent bonds of the for conversion at any Federal Reserve Bank or first Liberty loan converted, and 4 per cent at the Treasury Department. Registered bonds of the second Liberty loan may be con- bonds presented for conversion must be asverted into 41 per cent bonds during the six signed to the Secretary of the Treasury for months' period beginning May 9 and ending conversion. Such assignments, however, need November 9, 1918. not be witnessed. On conversion of registered It will not be practicable to make deliveries bonds, registered bonds only will be delivered, prior to July 1, 1918, of 4J per cent conversion neither change of ownership nor delivery of bonds, and as under the act approved April 4, coupon bonds on conversion of registered bonds 1918, holders of 4 per cent bonds of the first being permitted. Registered bonds, however, Liberty loan converted and of 4 per cent may be delivered upon conversion of coupon bonds of the second Liberty loan presenting bonds if request therefor is submitted. Coupon their bonds for conversion after July 1 but bonds presented for conversion must have May not after November 9, 1918, will be entitled 15 or June 15 coupons detached and coupons to the benefit of the increased interest rate maturing November 15 or December 15 and all from June 15 and May 15, respectively, with- subsequent coupons attached. Interest on out adjustment of interest, it is hoped that registered bonds will be paid on May 15 or holders of such bonds will not present their June 15 without regard to conversion. The bonds for conversion until after July 1, 1918. coupon bonds issued upon conversion will have In the case, however, of holders of such bonds four interest coupons attached, and on and who prefer to present their bonds for con- after the final interest payment date covered version on or before July 1, 1918, an adjust- thereby such bonds must be exchanged for ment of interest will be made. This interest new bonds with all subsequent interest coupons adjustment in the case of bonds of the first attached. Liberty loan converted will be in favor of the Bonds issued upon conversion of 3-| per cent bondholder if such bonds are presented for bonds and of 4 per cent bonds of the first conversion before June 15, 1918, and will be Liberty loan converted will be dated May 9 in favor of the United States if such bonds are and will carry interest at 4-| per cent from presented for conversion after June 15 and June 15. Bonds issued upon conversion of on or before July 1, 1918. In the case of bonds 4 per cent bonds of the second Liberty loan of the second Liberty loan this interest adjust- will be dated May 9, and will carry interest at ment will be in favor of the bondholder if 4£ per cent from May 15. such bonds are presented for conversion before The registered and coupon bonds issued upon May 15, 1918, and will be in favor of the conversions will be issued in the same denomi- United States if such bonds are presented for nations as the bonds of the third Liberty loan conversion after May 15 and on or before and, except for the dates of maturity of prin- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

518 FEDERAL RESERVE BULLETIN. JUNE 1, 1918. cipal, the dates for payment of interest and the The Central Executive Council of the International terms of redemption, which will remain the High Commission, of which Secretary McAdoo is chairman, has, during recent months, been devoting special same as for the original issues, the terms of attention to securing greater uniformity in the commercial such 4| per cent issued upon conversion will legislation of the Republics of America. Recent effort be identical with the bonds of the third Liberty has been concentrated on the law relating to notes and bills loan, including tax exemptions, nonconverti- of exchange concerning which an extensive report was published a short time ago. This report is now being bility, receivability for Federal inheritance made the basis for concrete legislative effort by the several taxes. They will not carry the circulation national sections of the International High Commission. privilege, they will be receivable as security A further step in the same direction has now been taken for public deposits, and may participate in the by the Central Executive Council in the publication of a report on the law and practice relating to checks. Owing benefit of the bond-purchase fund. to the wide diversity of practice in different sections of the continent, the difficulty^ of securing uniformity of legislation relating to checks is considerably greater than in the matter of notes and bills of exchange. The report just issued by the Central Executive Council of the Inter- Certificates of Indebtedness. national High Commission is the first step in the difficult process of securing greater uniformity of law and practice. The Treasury Department, on May 14, After a careful analysis of existing legislation and study of the development of the proposed Hague Rules on issued the following statement: Checks (1912), the Council has come to the conclusion United States Treasury certificates of indebt- that of all the instrumentalities of international commerce the legislation in regard to checks stands in greatest need edness dated May 15, 1918, maturing June 25, of a revision toward greater uniformity amongst the 1918, acceptable in payment of income and American Republics. excess-profits taxes, bearing interest at the rate of 4 per cent per annum, and in all respects The report, which is issued in the Spanish language, deals with the following topics: identical with the certificates dated April 15, 1918, except as to the date of issue and from I. The theory of the check. II. Material concerning the history and present imporwhich they bear interest, will be made availtance of the check. able promptly. In the meanwhile Federal Re- III. The check at The Hague Conference on Bills of serve Banks are authorized to issue interim Exchange. receipts calling for definitive Treasury certifi- IV. The questionnaire circulated by the Government of the Netherlands concerning the check (1912.) cates dated May 15 as above instead of certifi- V. The discussions of the Central Committee of The cates dated April 15. This will relieve sub- Hague Conference upon the Rules to Govern the scribers for certificates of this character of the Check. necessity of paying so much on account of VI. The preliminary resolutions of The Hague Conference on the Law of Checks (1912). accrued interest. Subscriptions for these cer- VII. The check in the legislation of American Republics. tificates at par and accrued interest will be VIII. Appendix: received by Federal Reserve Banks and they A. The Principles of Check Legislation, by Dr. are authorized until further notice to make Octavio Morato. B. Project of a Uniform Law on Checks, preallotment in full and receive payment with the pared by Dr. Octavio Morato. subscription. More than §70,000,000 of the An elementary and detailed examination of the history, certificates dated April 15 have been sold to kinds, and present uses of checks was felt to be. desirable date, making the total amount of certificates in Latin America, in view of the slight acquaintance with this negotiable instrument outside of one or two large maturing June 25, 1918, to date about commercial countries. $1,430,000,000. The studies by Dr. Morato, who is professor at the University of Montevideo and an active member of the commission, were especially prepared for the Council. The uniformity of law and practice with reference to Press Statement. checks is one of the important questions in the program of the International High Commission, and it is confi- The following statement for the press was dently expected that it will soon be possible to record further definite steps toward the attainment of this issued by the Treasury Department on May 12: purpose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 519 Paper Currency Outstanding. Statement issued by the Treasury Department showing the amount of paper currency of each denomination outstanding 'Apr. 30, 1918. Denominations. U S n n o ta t i t e t e e s s d . T n r o 1 e t 8 a e 9 s s 0 u o . r f y s F e e r d v e e r a n l o R te e s - . ba F r n e e k s d e e n r r v o a e t l es. b N an a k ti o n n o a t l e - s. G tif o i l c d a t c e e s r . - S t i i l f v ic e a r t c e e s. r- Total. One dollar $25,329,845 $332,321 $342,072 $225,271,052 $251,275,290 Two dollars 26,447,823 207,596 163,392 56,505,310 83,324,121 Five dollars 217,819,260 459,643 $227,251,160 $3,252,725 111,399.260 136,856,152 697,038,200 Ten dollars 53,139,971 488,940 567,833,000 4,665,890 297,503,210 $352,591,845 14,525,301 1,290,748,157 Twenty dollars 10,914,042 220,650 596,174,930 3,824,340 248,385,960 283,394,894 14,724,230 1,157,639,046 Fifty dollars 1,246,275 9,250 114,155,100 30,400,900 74,611,030 7,703,435 228,125,990 One hundred dollars 2,011,800 90,600 145,554,100 34,905,900 104,654,900 271 020 287,488,320 Five hundred dollars , 1,540,000 88,000 27,759,500 15,500 29,403,000 One thousand dollars 9,222,000 ""64*666" 21,000 133,359,500 16,000 142.682,500 Five thousand dollars 142,660.000 142:660,000 Ten thousand dollars 10,000 758,290,000 758,300,000 Fractional parts 57,438 57,438 Total 347,681,016 1,873,000 1,650,968,290 11,742,955 723,267,132 1,877,321,669 455,888,000 5,068,742,062 Deduct: Unknown, destroyed 1,000,000 1,000,000 Held in Treasury 8,334,715 26,480,570 161,570 "16* 549,* 875 697,866,020 13,818,260 763,215,949 Held by Federal Reserve Banks and Federal Reserve agents:.. 100,259,965 241,869,780 342,129,745 Redeemed but not assorted by denominations 978,955 978,955 Net- 338,346,301 1,868,061 1,524,227,755 11,581,385 705,738,302 937,585,869 442,069,740 3,961,417,413 62161—18 6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

520 FEDERAL RESERVE BULLETIN. 1918. INFORMAL RULINGS OF THE BOAR®. Below are reproduced letters sent out from indicate a desire on its part to obtain accomtime to time over the signatures of the officers modation from the Federal Reserve Bank through one of its correspondent member or members of the Federal Reserve Board banks. This being true, it may be well to which contain information .believed to be of call its attention to the fact that if this is its general interest to Federal Reserve Banks and purpose it will be necessay to obtain the conmember banks of the system: sent of the Federal Reserve Board. MAY 1, 1918. Rediscount of Paper Indorsed by Nonmember Bank. (To a Federal Reserve Bank.) Acceptance of Drafts Against Sugar in Bond. Receipt is acknowledged of your letter of the 26th ultimo in further reference to the (To a Federal Reserve Bank.) rediscount by a Federal Reserve Bank for a Your telegram. It is the understanding of member bank of eligible paper bearing the this office that sugar referred to is placed in indorsement of the Bank of . bond under transit entry and warehouse It appears from your letter that the Bank of receipt issued by collector in negotiable form, is not a member bank. You ask but sugar can not be withdrawn for domestic whether this fact would alter the ruling of the sale or consumption without special permis- Federal Reserve Board contained in letter to sion of Treasury Department. Board is of you dated April 24. opinion that member banks may legally accept In reply you are advised that in the opinion drafts drawn against security of such wareof the Board the limitations contained in sec- house receipt properly assigned. tion 13 of the Federal Reserve Act on the MAY 7, 1918. rediscount of paper bearing the signature or indorsement of any one borrower should not be held to refer to the indorsement of a non- Bills Payable Elsewhere Than in the United States. member bank on paper rediscounted with a (To a Federal Reserve Bank.) member bank. It is true that in such case the nonmember I have received JOXIT letter of May 8, 1918, bank is contingently liable if the paper is not asking whether or not Federal Reserve Banks paid at maturity, but the Board is inclined to are authorized to purchase bankers' acceptthe view that this language refers to paper ances payable elsewhere than in the United bearing the signature or indorsement of bor- States. rowers or customers of the member bank and You are advised that under the regulations not to the indorsement of other banks. A of the Federal Reserve Board defining bankers' nonmember bank could not, of course, obtain acceptances, any bill which is payable elseindirect accommodation from the Federal where than in the United States would not be Reserve Bank through the medium or agency eligible for purchase as a bankers' acceptance, of a member bank except with the permission under the provisions of regulations A and B, of the Federal Reserve Board, but if a member series of 1917, even though eligible in all other bank had acquired eligible paper in due course respects. by rediscount from a nonmember bank the The acceptance to which you refer, however, member bank should hardly be precluded from might properly be purchased as a bill of exrediscounting this paper with the Federal change payable in a'foreign country in accord- Reserve Bank because it bears the indorsement ance with the provisions of Special instructions of the nonmember bank. No. 2 of 1916, subsection (b), printed on page The fact that this inquiry is submitted by 529 and 530 of the October, 1916, Bulletin. the Bank of , a nonmember bank, may MAY 11, 1918. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL BESEKVE BULLETIN. 521 Discount of Acceptances Not Paid at Federal Reserve 30, no addition should be made to the surplus Bank. of your bank and no return need be made to (To Federal Reserve Banks.) the Government. These matters can be ad- The discount committee of the Federal Re- justed on the last business day of December, at serve Board has reported that, in its opinion, which time all depreciation can be provided "Federal Reserve Banks should insist that for and the proper amounts carried to the acceptances when due should be paid by checks surplus fund and paid over to the Governon the local Federal Reserve Bank, in order ment. It is, of course, understood that at that they may be charged to the account of the your semiannual dividend period in June you acceptor on the day of maturity, or else that should charge off the expense account as acceptances should be paid by checks through shown by your books, as well as any ascertained the clearings. If an arrangement on these lines losses, in order that no dividends may be can not be perfected, Federal Reserve Banks paid which have not actually been earned. ought to be required to add one day to the MAY 1, 1918. actual number of days the acceptance has to run when bought, so as to make up for the loss of interest incurred in collecting in this manner." Use of the Word "Reserve." This report has been agreed to by the Board, and your bank is requested, in buying accept- (To a Federal Reserve Bank.) ances, to charge discount for one additional Your letter of the 10th instant, asking day, except in cases where satisfactory arwhether the Board would approve a change of rangements are made to make actual cash paythe name of the American Savings Bank and ment at the Federal Reserve Bank on the day Trust Company of to "The American of maturity. Reserve Bank," has been duly considered by MAY 7, 1918. the Board. You are requested to call the attention of this bank to the informal ruling of the Board Date for Payment of Dividend. on a similar question which involved the use of the word "Federal" as part of the name of (To Federal Reserve Banks.) a bank not a Federal Reserve Bank, under The Board ruled some time ago that the date of July 21, 1917 (vol. 3, p. 615, Federal books of Federal Reserve Banks could be Reserve Bulletin), in which it was stated that closed for the purpose of paying dividends on "it is decidedly against the policy of the Federal the last business day of June and December of Reserve Board to encourage the use of the each year. Section 7 of the act provides that word 'Federal7 as part of the title of member "after all necessary expenses of a bank have banks." been paid or provided for, the stockholders The Board is of the opinion that there is just shall be entitled to receive an annual dividend as much objection to the use of the term of 6 per cent on the paid-in capital stock, which "Reserve," especially when coupled with the dividend shall be cumulative." Dividends are term "American" so as to read "American permitted to be paid at this rate semiannually Reserve Bank," as there is to the term "Fedfor the greater convenience of the member eral" as part of the title of an ordinary bank. banks, and the Board holds that this does not You are therefore requested to advise the require that payment to the Government be bank that the Board would not approve a made at the semiannual dividend periods. change of its name to "The American Reserve Therefore, in making your dividend distri- Bank." butions, either current or cumulative, on June MAY 18, 1918. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

522 FEDERAL RESERVE BULLETIN. JUNK 1,1918. LAW DEPARTMENT. The following opinions of counsel have been treating the branch and the parent bank as authorized for publication by the Board since separate entities. the last edition of the Bulletin: Respectfully, Membership of Branch of State Bank. M. C. ELLIOTT, Counsel. Where a branch of a State bank becoming a member of To HON. W. P. G. HARDING, the Federal Reserve system is located in a different dis- Governor, Federal Reserve Board. trict from its parent bank, it is not necessary for the branch bank to become a member of the Federal Keserve Bank of the district where it is located; since the operations of the Decision of Supreme Court of Illinois in the Case of The branch are the operations of the parent bank, and the People ex rel. First National Bank of Joliet v. branch and parent banks are not separate entities. Andrew Russell, Auditor of Public Accounts. APRIL 24, 1918. In a former proceeding before the Illinois SIR: From the accompanying letter of the Supreme Court, the First National Bank of chairman of the board of a Federal Reserve Joliet petitioned the Supreme Court of Illinois Bank, it appears that a State bank recently for a mandamus to require the auditor of admitted to membership in a Federal Re- public accounts to issue to it a license under the serve Bank has a branch in another city, State law, authorizing it to exercise trust which is located in a different Federal Reserve powers. district. This petition was refused by the court, which The question is raised whether this branch held that the exercise of trust powers would shall be treated as a separate entity and be contravene the laws of Illinois and that the act required to carry a deposit with the Federal of Congress vesting these powers in national Reserve Bank of the district where it is lo- banks was unconstitutional. The same quescated, or whether all of its operations shall be tion was involved in a suit instituted in the conducted through the Federal Reserve Bank State of Michigan, in which case the Supreme of which the parent bank is a member. Court of that State held the act of Congress to In the opinion of this office, the operations be unconstitutional. This case was appealed of the branch are the operations of the parent to the Supreme Court of the United States, bank. The reserve to be maintained by the which reversed the Supreme Court of Michigan parent bank with the Federal Reserve Bank and sustained the constitutionality of the act. of which it is a member should, therefore, be The present proceedings against the auditor based upon the aggregate deposits of the of public accounts were instituted in the parent bank and the branch. If it becomes Supreme Court of Illinois after the Supreme necessary to do so, there would seem to be no Court of the United States had sustained the objection to having the branch send items for constitutionality of the act. In the present collection through the Federal Reserve Bank case, the Illinois Supreme Court, in referring of the district where it is located for credit to to its previous decision refusing the writ of the account of the member bank with the mandamus applied for, says: Federal Reserve Bank of which the parent Under the decisions of the Supreme Court of the United bank is a member; but there is Mot, in the States, our judgment was erroneous, but the conclusiveness opinion of this office, any justification for of a judgment upon the parties to it, does not depend upon Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1. 1918. FEDERAL RESERVE BULLETIN. 523 whether it is erroneous. (Case v. Beauregard, 101 U. S. law were raised by demurrer to the former petition, which 688.) Although it may be based upon unsound principles, we considered on their merits in an opinion filed at the it is binding on the parties and on the court rendering it December term, 1915, denying the writ (People v. Brady, unless reversed or set aside, and it is unaffected by the fact 271 111., 100). One question was the contention of the that in another case another court has rendered a different Attorney General that section Ilk of the Federal Reserve judgment upon the same issues of law or fact. We do Act is a delegation of legislative power by Congress to the not understand that we have the power to entertain, hear, Federal Reserve Board, in violation of the Constitution of and determine this case so long as our judgment in the same the United States. We did not sustain that contention. case rendered at a former term is in full force and effect. The second and third questions were (2) if it be held section Ilk is not a delegation of legislative power but is a The petition of the First National Bank of general grant by Congress to national banks of power to Joliet was accordingly denied. act as trustees, executors, administrators, or registrars of The full text of the opinion is as follows: stocks and bonds, it is void for want of power in Congress to grant such a franchise to a national bank; and (3) that Mr. Justice Farmer delivered the opinion of the court: to permit national banks to act as trustees, executors, This is an original petition filed in this court, on the administrators, or registrars of stocks and bonds in Illinois relation of the First National Bank of Joliet, for a perwould be in contravention of the laws of Illinois. Upon emptory writ of mandamus against the State auditor of the second question we expressed our understanding of the public accounts, commanding him to forthwith issue to decisions of the Supreme Court of the United States, esrelator a certificate of qualification under the trust act of pecially McCulloch v. State of Maryland, 4 Wheat. 316, Illinois, whereby it might lawfully act as trustee, execuand Osborn v. United States Bank, 9 id. 738, to be as tor, administrator, or registrar of stocks and bonds and in follows: such other trust capacities as provided by the trust act. Relator alleges it is a national banking association in- "The basis upon which the authorities rest that Congress corporated under an act of Congress; that pursuant to regu- has power to create a banking corporation and authorize it to carry on a general banking business is that such instilations prescribed by the Reserve Bank Organization Comtutions are necessary and appropriate agencies for the carmittee created by act of Congress entitled "An act to pro- rying out of certain governmental functions, and while vide for the establishment of Federal Reserve Banks," etc., they are authorized to engage in a general banking busicommonly called the Federal Reserve Act, the relator be- ness (U. S. Rev. Stat., sec. 5136) such authority is necessary to their continued existence and the exercise of such came a member of the Federal Reserve Bank of Chicago power is necessary to enable the corporations to serve the and still continues to be such member; that said Federal purpose of their creation. The power to create them was Reserve Act provides that the Federal Reserve Board never sustained on the ground that Congress had the right created by the act may grant special permits to national to charter a corporation for the purpose, alone, of engaging banks applying therefor, when not in contravention of in the private trade of banking, but the power of such corporation to engage in such trade or business was sus- State or local law, to act as trustees, executors, administained as necessary to perpetuate the life of the corporatrators, or registrars of stocks and bonds, under such rules tion created as an instrument or agent for carrying out the and regulations as said board might prescribe. The peti- objects and purposes of the Government." tion alleges that upon its application to the Federal Re- We further were of opinion that as Congress had no serve Board said board granted relator permission to act express authority to create a corporation for the purpose as trustee, executor, administrator, or registrar of stocks of engaging in the business of acting as trustee, executor and bonds; that thereafter relator applied to the auditor of public accounts of the State of Illinois for a certificate of wills, or administrator of estates, it had no implied of authority, stating therein that relator had complied power to authorize a national banking corporation to act with the Illinois act entitled "An act to provide for and in those capacities, because in our view such powers regulate the administration of trusts and trust companies," could not be made useful instrumentalities in carrying approved June 15, 1887, and subsequent amendatory and out governmental functions and their exercise is not supplementary acts. The petition alleges that at the time necessary to the life or existence of the bank. We further of making said application to the auditor, relator offered were of opinion the business of acting as trustee, executor, to comply with ail the requirements of the Illinois act, and administrator appertains to private-property rights but the auditor refused to issue said certificate of qualifi- under the laws of the several States, their devolution, cation, whereby relator has been and is prevented from descent, and distribution, and therefore subjects of reguexercising the rights, privileges and franchises conferred lation by the States. Upon the third question we were by the Trust Act of the State of Illinois. of opinion, from an examination of the large powers con- At a former term of this court this same relator filed a ferred by the Illinois statute upon the auditor of public precisely similar petition praying the same relief. The accounts of examination, regulation, and control of coronly difference is that then James J. Brady was the in- porations authorized to administer trusts in this State, cumbent in the office of auditor of public accounts while that the Federal Reserve Act in this respect, or section now Andrew J. Russell is the incumbent. Three issues of Ilk, is "in contravention of State or local law." No Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

524 FEDERAL RESERVE BULLETIN. JUNE 1,1918. appeal was prosecuted or writ of error sued out to reverse full force and eSect. For these reasons we feel compelled that judgment, rendered more than two years before this to deny the writ. petition was filed, and it still remains in full force and (Writ denied.) effect. Now, the same relator files a precisely similar pe- The Board has been unofficial advised that, tition against the same public officer, asking the same in view of the foregoing opinion of the Supreme relief upon the same grounds as in the former case. There is identity in the thing sued for, the cause of action, court of Illinois, the auditor of public accounts parties to the action, and quality in the person for and will grant to national banks holding permits against whom the claim is made. This court had juris- of the Federal Reserve Board the necessary diction of the subject matter and of the parties, and the license to exercise trust powers in Illinois. decision, whether erroneous or not, was based on the merits of the case. The judgment of a court of competent jurisdiction, although it may be erroneous, is binding upon the parties until reversed and can not be collaterally assailed. It is a complete bar to a subsequent suit be- Amendments to New York Banking Laws. tween the same parties on the same demand or cause of action. Johnson Co. v. Wharton, 152 U. S., 252; Smyth The definition of " reserves on deposit" in v. Neff, 123 111., 310; Baum v. Hartmann, 238 id., 519; section 3 of the New York banking law was 3 Cyc, 493; 15 R. 0. L., 959. amended by the 1918 legislature (Laws of 1918, The reason given by the relator for bringing the same chap. 92) so as to exclude from the meaning suit again is, that since our decision in the case when it of the term deposits maintained with a Federal was before us the first time the Supreme Court of the Reserve Bank located in the State. The United States has considered the same question on writ of error to the Supreme Court of Michigan (National Bank definition now reads as follows: of Bay City v. Fellows, 37 Sup. Ct. Rep., 734), and in an Reserves on deposit. The term, " Reserves on deposit," opinion filed June 11, 1917, sustained the validity of when used in this chapter, means the reserves against section Ilk of the Federal Reserve Act and the power of deposits maintained by any individual or corporation the Federal Reserve Board under said act to clothe a pursuant to this chapter in reserve depositaries, other than national bank with authority to act as trustee, executor, a Federal Reserve Bank located in this State, and not in or administrator, and it is, in substance, contended that excess of the amount authorized by this chapter. we should disregard or ignore our former judgment in this case and award the peremptory writ. We willingly and Section 112, relating to the reserves of banks, cheerfully yield obedience to the authority of decisions and section 197, relating to the reserves of trust of the United States Supreme Court when we have any companies, were amended (Laws of 1918, chap. liberty of choice in the matter, but we do not understand 92) so as to permit banks and trust companies that in this case we have the power to adopt the view of the United States Supreme Court and render a judgment becoming members of a Federal Reserve Bank granting the relief prayed. If that court had been asked to carry or deposit with that Federal Reserve to review our decision, it would have had the power to Bank such portion of their total reserves as is reverse and set it aside, but we do not understand the required of members, as reserves on hand inreversal of the judgment of the Supreme Court of Michigan stead of reserves on deposit. In addition, the in any way disturbed or affected the conclusiveness of the requirement that member banks, located in judgment of this court as a bar to a second suit between the same parties on the same cause of action. Under the New York City, must carry the remainder of decisions of the Supreme Court of the United States our their total reserves as reserves on hand was judgment was erroneous, but the conclusiveness of a judg- omitted from section 112 as so amended. ment upon the parties to it does not depend upon whether Section 112 now reads as follows: it is erroneous. (Case v. Beauregard, 101 U. S., 688.) Although, it may be based upon unsound principles, it is Reserves against deposits. Every bank shall maintain binding on the parties and on the court rendering it total reserves against its aggregate demand deposits as folunless reversed or set aside, and it is unaffected by the j lows: fact that in another case another court has rendered a I 1. Eighteen per centum of such deposits if such bank different judgment upon the same issues of law or fact, jhas an office in a borough having a population of two We do not understand that we have the power to enter- j millions or over; and at least twelve per centum of such tain, hear, and determine this case so long as our judg- deposits shall be maintained as reserves on hand, except ment in the same case rendered at a former term, is in as otherwise provided in this section. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 525 2. Fifteen per centum of such deposits, if such bank is bankers' acceptances and bills of exchange, located in a borough having a population of one million subject to certain restrictions. The following or over and less than two millions, and has not an office in subdivision was added to the list of securities a borough specified in subdivision one of this section; and in which savings banks might invest such funds: at least ten per centum of such deposits shall be maintained as reserves on hand. 11. Bankers' acceptances and bills of exchange of the 3. Twelve per centum of such deposits if such bank is kind and maturities made eligible by law for rediscount located elsewhere in the State; and at least four per cenwith Federal Reserve Banks, provided the same are tum of such deposits shall be maintained as reserves on accepted by a bank, national banking association or trust hand. company, incorporated under the laws of the State of New Any part of the reserves on hand in excess of four per York or under the laws of the United States and having its centum of such deposits may be deposited, subject to call, principal place of business in the State of New York. Not with a Federal Reserve Bank in the district in which such more than twenty per centum of the assets of any savings bank is located, and the reserves on hand not so deposited bank less the amount of the available fund held pursuant shall consist of gold, gold bullion, gold coin, United States to the provisions of section two hundred fifty-one of this gold certificates, United States notes or any form of curchapter, shall be invested in such acceptances. The aggrerency authorized by the laws of the United States; but, if gate amount of the liability of any bank, national banking any bank shall have become a member of a Federal Reserve association or trust company to any savings bank for Bank, it may maintain as reserves on hand with such acceptances held by such savings bank and deposits made Federal Reserve Bank such portion of its total reserves as with it shall not exceed twenty-five per centum, of the paidshall be required of members of such Federal Reserve up capital and surplus of such bank, national banking Bank. association or trust company and not more than five per If any bank shall fail to maintain its total reserves in the centum of the aggregate amount credited to the depositors manner authorized by this section, it shall be liable to, and of any savings bank shall be invested in the acceptances shall pay the assessment or assessments provided for in of or deposited with a bank, national banking association section thirty of this chapter. or trust company of which a trustee of such savings bank Sections 108 and 190, restricting loans and is a director. investments by banks and trust companies, Subdivision 5 of the same section, relating respectively, were amended (Laws of 1918, to investments by savings banks of their deeh. 94) by adding to each a new subdivision posits and guaranty funds in stocks or bonds reading as follows: of incorporated cities, counties, villages or None of the limitations or restrictions contained in the towns located in adjoining States, was also previous subdivisions of this section shall apply to loans, amended (Laws of 1918, ch. 96); and two discounts or other extensions of credit secured by Liberty paragraphs authorizing savings banks to invest bonds or by other bonds or securities issued by the United such funds in promissory notes secured by first States Government for war purposes, if the market value mortgages on New York real estate or by of such Liberty bonds or other securities exceeds by teD per centum the amount of any such loan, discount or other pledges of pass books of New York savings extension of credit. banks were added to subdivision 8 (Laws of Section 238 relating to the powers of savings 1918, ch. 95). banks was amended (Laws of 1918, ch. 176) Subdivision 5 of section 106 was amended so as to authorize savings banks to receive (Laws of 1918, chap. 98) so as to enable banks deposits of Liberty bonds for safe-keeping. A to own, to an amount not exceeding 10 per cent new subdivision is added, which reads as fol- of their own capital and surplus, the capital lows : stock of any investment company qualified to accept drafts, issue letters of credit and dis- 8. To receive as depository, or as bailee for safe-keeping and storage, Liberty bonds or other bonds or securities count commercial paper, and the capital stock issued by the United States Government for war purposes of any foreign banking corporation licensed to or otherwise. do business in the State. Section 239 was amended (Laws of 1918, Subdivision 10 of section 190 was amended ch. 270) so as to enable savings banks to (Laws of 1918, chap. 98) so as to remove from invest their deposits and guaranty funds in the restrictions on the amount of stock of other Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

526 FEDERAL RESERVE BULLETIN. JUNE 1,1918. corporations which might be owned by trust to accept bills of exchange and issue letters of companies the ownership of stock in invest- credit, and to provide that the discount and ment companies qualified to accept drafts, purchase of certain commercial paper should issue letters of credit and discount commercial not be considered as borrowed money within paper, and the capital stock of foreign banking the meaning of the limitation on loans to one corporations licensed to do business in the person, firm, or corporation. State. Section 579 of Carroll's Kentucky Statutes, The following sections were also amended: as so amended, provides in part as follows: Section 109, subdivision 5, and section 194, Any bank or trust company may accept for payment at subdivision 5, relating to accounts of court a future date drafts or bills of exchange drawn upon H by funds on deposit to be kept by banks and trust its customers and issue letters of credit authorizing the companies, respectively (Laws of 1918, chap. holders thereof to draw drafts upon it or its correspondents at sight or on time, not exceeding one year, and may also 93). accept drafts or bills of exchange drawn upon it, having Section 454, subdivision 7, relating to loans not more than six months sight to run, growing out of transby credit unions to their members (Laws of actions involving the importation and exportation of 1918, chap. 97). goods; and any bank or trust company may discount Section 293, subdivision 3, relating to de- acceptances which are based upon the importation or exportation of goods and which have a maturity at time posits of securities by investment companies of discount of not more than three months and are endorsed receiving deposits (Laws of 1918, chap. 98). by at least one other bank or trust company; but no bank Section 294, subdivision 1, restricting the or trust company shall accept such drafts or bills of expowers of investment companies (Laws of 1918, change to an amount equal at any time in the aggregate to chap. 98). more than one-half of its paid up and unimpaired capital stock and surplus, except by authority of the banking Penal Law, section 1293, relating to obtaincommissioner under such general regulations as said coming money by fraudulent order (Laws of 1918, missioner may prescribe, and in no event to an amount chap. 314). exceeding the capital stock and surplus of such bank or And a new section, 1292a, was added to the trust company; and such regulations shall apply to all Penal Law, providing a penalty for issuing banks and trust companies alike regardless of the amount of capital stock and surplus. fraudulent checks, drafts, or orders (Laws of 1918, chap. 314). Section 583 was amended by adding to it the following provision: Amendments to Kentucky Banking Laws. Provided, that the discount of bills of exchange drawn In addition to the amendments noted on against actually existing value and the purchase or dispage 315 of the April Bulletin, the Kentucky counting of commercial or business paper actually owned by the person negotiating the same shall not be considered Legislature recently amended certain other as borrowed money, within the meaning of this section sections of the banking laws of that State so as in fixing the limit of indebtedness of any person, firm, or to authorize State banks and trust companies corporation, selling or negotiating said paper to the bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SUMMARY OF BUSINESS CONDITIONS, MAY 23, 1918. District. b G u e si n n e e r s a s l . Crop condition. Indus d t i r s ie tr s i c o t. f the Con a s n tr d u c e t n i g o i n n , e 1 er w in i g ld . ing, Foreign trade. Money rates. Ra a i n lr d o a o d th , er p r o e s c t e ip o t f s fi . ce, Labor conditions. No. 1—Boston Good Normal ,. Busy Inactive Slight decrease... Mixed Well employed; wages high. No. 2—Now York Active. Favorable; plant- Very active. Extremely light, ex- Imports much re- Firm; no material Increase in post office In great demand; i u g vr v 11 a d - cept s h i p b i:i il ding stricted; exports change. receipts 20,66 percent much shifting. vaiiccd. and factory construc- other than Gov- over last year; street tion lor Government ernment mate- railroad receipts work. rial light, but lower than last year; aggregate very steam railroads show heavy. increase over last year. No. 3—Philadelphia.. Good Good ; Very little Stilllarge. Very firm. Increasing Inadequate supply of competent labor. No. 4—(Cleveland Satisfactory.. Good . Very busy. Dull. Very firm. Increase Scarce; wages increased. No. 5—Richmond Satisfactory.. Satisfactory and Active; profitably Private building neg- Restricted by- Good demand; 6 Railroad, irregular; Inadequate and promising. employed. ligible; Government lack of tonnage. per cent; in- post oilice, volume unsatisfactory. work active. creasing. large; reflect increased rates. No. 6—Atlanta (rood Active Very inactive. Unsatisfactory Steady. Stationary Scarce and well paid. No. 7—Chicago Good Excellent Generally at ca- Inactive.. Firm... Increase Generally good. pacity. No. 8—St. Louis Good Good Generally active-. Quiet Firm Increase in postal re- Improving. ceipts. No. 9—Minneapolis.. Good Good Active Slow Firm Good Fair. No. 10—Kansas City. Good Much improved...! Active Improving, but below i Increasing Substantial increase Settled. ! normal. No. 11—Dallas | Satisfactory. Fair to good ! Active Building fairly active, Only fair. Unchanged; firm Railroad, increase; post Unsatisfactory; though not as heavy | to steady. of lice, 60.1 per cent scarcity in all I as last year. increase for April at branches. larger cities. No. 12—San Franci;col Active Good [ Very active Decreasing. Large volume | Firm , Increasing More settled. I I to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

528 FEDEKAL RESERVE BULLETIN. JUXK 1, 1018. GENERAL BUSINESS CONDITIONS. There is given on the preceding page a sum- The Capital Issues Committee has been mary of business conditions in the United effective in its influence in cutting down States by Federal Reserve districts. These unnecessary expenditures, both by municipalireports arc furnished by the Federal Reserve ties and industries, and this has resulted in agents, who are the chairmen of the boards of the release of much labor and raw material in directors for the Federal Reserve Banks of the addition to the capital saved. several districts. Below are the detailed re- Boot and shoe manufacturers are finding ports as of approximately May 23: collections good. The early warm weather has advanced the season for summer shoes, DISTRICT NO. 1—BOSTON. with a consequent large retail demand, espe- Conditions in similar lines of business vary cially in women's lines. Retailers are not carwidely in different parts of the district, due to rying large stocks and are therefore able to local factors, but on the whole general business, meet maturing obligations promptly. Many while good, is following the same trend that manufacturers have enough civilian orders, has been apparent for several months and is taken in conjunction with Government con settling down to a war basis. tracts, to keep them busy until fall. All business, no matter what its nature, has The Government regulation of the wool encountered new and in most cases unprece- trade practically prohibits dealers from doing dented conditions. The manufacturers of business. The entire crop has been taken products required by the Government are over by the Government, dealers having been delaying distant future commitments for civil- asked to handle, on a percentage basis, that ian purposes until war needs are provided for. part which is to be allotted for civilian needs. The demand for labor for war requisites has Some of the larger dealers estimate that by forced up wages to a point where overhead doing this they will be able to keep their costs make it more and more unprofitable for organizations in good form until after the war, some dealers and manufacturers to continue but that it will leave no profit after overhead business. expenses. The National Association of Wool On the other hand, an excellent demand for Manufacturers report, under date of May 16, clothing and dry goods of the better grades is indicates that all but a very small percentage being made by employees earning larger wages. of machinery is in use and that approximately There is a decrease in the inquiry for cheaper 50 per cent of the spinning spindles in this goods ordinarily purchased by this same class. district are employed on American war orders. In some sections wage earners are said to be Cotton mills producing fine goods have had spending their money as fast as received, a considerable demand in the last week or while in others savings deposits are showing two, but are unwilling to accept new business satisfactory increases. Nevertheless, a large until at least a part of that already booked is number have become Liberty bond owners finished. !Mills find that with Government who, up to a few months ago, did not know business and shortage of labor, they will be what a security was and had never saved. unable to make deliveries until a month or Deposits in savings banks have been very two later than originally planned and this little affected and much less than in past extends some commitments into the late fall. Liberty loans by the third campaign, and the The prices for print cloth have developed some large number of individual subscriptions for strength with the demand good. Wages in small amounts indicate that many bonds are New Bedford mills have been increased 72 being paid for out of earnings. per cent in the last two and one-half years, but Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

.FT XK 1. .10IS. FEDERAL RESERVE BULLETIN. 529 in spite of this employees are again threatening of 817,456, as compared with $215,588 for the to strike unless granted a further increase. corresponding month of 1917. This, in addition to the increase that is antici- For March, 1918, the New York, New pated in taxes, is causing mill owners consider- Haven & Hartford Railroad reports operating able apprehension as to future not earnings. income, after taxes, of SI,153,488, compared The United States Department of Agri- with SI,647,490 for March, 1917. For the first culture estimates that about the average three months of this year operating income, amount of plowing and planting was finished after taxes, of the four principal New England May 1. The spring has been favorable for roads was §229,518, as compared with farm work, the season being about normal. $6,932,622 for last year. While labor has been hard to obtain, the Loans and discounts of the Boston Clearing fanners are doing their utmost, and a good House banks on May, 1918, amounted to crop is expected. §503,733,000, as compared with $491,471,000 The money market is very quiet, with tone last month and $457,051,000 on May 19, 1917. easier than last month. No large demand for Demand deposits on May 18, 1918, amounted loans to pay taxes has become evident and to $464,336,000, as compared with $430,780,000 as the due date approaches less uneasiness is on April 20, 1918, and 1351,006,000 on May 19, apparent. Banks, however, are not anxious 1917. Time deposits on May 18, 1918, totaled to loan for long maturities and credits are 116,179,000, as compared with $19,755,000 on being closely scanned. There is only a limited April 20, 1918, and $33,750,000 on May 19, market for outside paper, but banks are in a 1917. The amount "duo to banks'7 on May position to meet comfortably the demands of 18, 1918, was $129,078,000, as compared with their customers which are apparently less in 8140,747,000 on April 20, 1918. volume owing to Government payments being DISTRICT NO. 2—NEW YORK. more prompt. The sales of commercial paper being made are out-of-town and mostly at Business and industry continue very active 6 per cent. Call money, 5 to 5-J- per cent; in this district. Manufacturers of chemicals, time money, 5£ to 6 per cent, with exceptions potteries, lead, paper, tableware, sewing maat 5£ per cent, but only for short maturities. chines, silks, and knit goods report good busi- The exchanges of the Boston Clearing House ness. Dealers in building materials report for the week ending May 18, 1918, were business as only a fraction of the usual volume. §317,154,340, compared with $228,733,906 for Heavy orders recently placed by the Governthe corresponding week last year and ment are causing shoe factories to run at maxi- §307,496,431 for the week ending May 11, 1918. mum capacity. The copper industry is ex- Building and engineering operations in New ceedingly active, with approximately 90 to 95 England from January 1 to May 16, 1918, per cent of the entire production being manuamounted to 855,198,000, as compared with factured into articles required by our Govern- 869,073,000 for the corresponding period of ment and its Allies. Smelting companies re- 1917. port that the value of copper and other metals The receipts of the Boston post office for in transit between western smelters and eastern April, 1918, show an increase of $113,612.09, refineries is about one-third of what it was in or about 15 per cent more than April, 1917. the middle of March. Factories producing For the first 15 days of May, 1918, receipts electrical machinery are working at maximum were about 11 per cent, or §41,192.53 more capacity. Shirt and collar manufactures show than for the corresponding period of last year. decided failing off in production. Glove manu- The Boston & Maine Railroad reports net ufacturers, though hampered by shortage of operating income, after taxes, for March, 1918, skins, are maintaining a volume of business Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

530 FEDERAL RESERVE BULLETIN, JUNE I, 1918, about equal to that of last year. Contracts Because of the large demand for summer furs, for 30,000 steel cars, to cost $80,000,000, and workers in this trade now find employment 1,025 locomotives, to cost $60,000,000, have the entire year, where formerly their dull seabeen let by the Railroad Administration. son extended from January until July. New The adaptation of factories of various kinds York and St. Louis are said to have displaced to Government work is the most notable fea- London, for the time being, at least, as the ture of the industrial situation. An example world's largest fur market. of the changes going on is the recent utiliza- Improvement in freight conditions in the tion of 50 per cent of the capacity of a phono- eastern territory is indicated by figures made graph factory in this way. A company which public by the Regional Director of Railroads. before the war made auto parts, motor-truck The accumulation of export freight in carload frames, and sporting rifles and pistols is now lots on the eastern seaboard wTas as follows: making machine guns and light ordnance, has 5,000 employees, as compared with 1,500 in Jan. 1, 1918."Nfay 1,1918. 1915, and a volume of business over eight times that of 1915. Demand for sporting ammuni- In oars.. 11,092 S, 042 On piers and warehouses 7,659 6,290 tion is much smaller than before the war. A Unloaded on ground 22,451 13,256 storage-battery plant is devoting 85 per cent Total 41,202 o 28,5S8 of its capacity to Government work. a Includes 24,109 cars of export freight for ocr Government and its Allies. Department stores and retailers report good business in medium-priced furniture, kitchen Exclusive of grain and coal, 28,600 cars of ware, cotton piece goods, ready-to-wear gar- export freight arrived at north Atlantic ports ments, men's furnishings, shoes, hosiery and and 27,890 cars were delivered to steamers knit underwear, gloves, millinery, handker- during the month of April. The estimated chiefs, notions and ribbons, food and tobacco, export tonnage represented by these cars for but reports indicate a decrease in sales of high- April was 17.8 per cent greater than that grade silks, woolen dress goods, laces and em- handled during March, and exceeded the exbroidery, high-grade furniture, jewelry, and port volume in the same months of previous other less essential goods. Collections are years by the following percentages: 1913, good. 111.6 per cent; 1914, 139.3 per cent; 1915, Labor, both skilled and unskilled, is in strong 65.1 per cent; 1916,14.8 per cent. In the eastdemand at advancing wages. Factories in ern territory there were 34,791 cars in transit the State of New York report 1.2 per cent May 9 above normal traffic conditions, as commore employees and 19.9 per cent larger wage pared with 160,904 on February 6, at the time volume in March, 1918, than in March, 1917, of the most severe freight congestion. and 12 per cent more employees and 50 per The New York State barge canal was officent larger wage volume than in March, 1916. ciall}7 opened May 15, after 13 years in building, Wage payments in the metal goods and chem- the total cost having been $233,695,350. The ical industries, both of which include the man- work consisted of the enlargement of the Erie ufacture of munitions, as well as in printing, and three other existing canals, and changing textiles, clothing, and food manufacturing, portions of the Mohawk and other rivers into are larger than ever before. War conditions navigable canals. The entire system covers have caused a shortage of needle-trade work- a distance of 352 miles, and connects New ers, as it is estimated that an average of 10 to York Harbor by water with the Great Lakes. 15 per cent leave the trade yearly to engage in The canal will be controlled by the Governother pursuits, and the loss has not, as in nor- ment Railroad Administration. Fifteen tugs mal times, been made good by immigration. have been employed for towing purposes, 165 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNEl, 1918. FEDERAL RESERVE BULLETIN. 531 T old barges have been leased, and orders placed business life on the problems of the war is gradfor 75 new barges, deliveries to commence in ually resulting in a more smoothly running matwo months. chine of production. The crop outlook for the district is favorable, Retail trade is reported to be about 40 per with planting well advanced on large acreage. cent ahead of last year in volume of business, The use of farm tractors is in some measure wage earners on account of their very large making up for shortage of farm labor. De- earnings being large consumers of goods. Seamand for fertilizers during the past three sonable lines are in particularly good demand. years has increased considerably because of Manufacturers, as a rule, are extremely busy, high prices of farm products and abnormal but considerable embarrassment is being caused export demand for food crops. In the potato- by the scarcity of many kinds of raw materials growing sections demand for fertilizers is and the inadequate supply of competent labor. somewhat decreased because of low price of The transportation situation has shown great potatoes caused by the heavy production in improvement. Railroad freight car move- 1917. Reports received by the New York ments over the Pennsylvania Railroad at State Department of Agriculture indicate some Lewistown Junction for April totaled 188.000 reduction in potato acreage and some increase cars, compared to 176,000 in March and 185,000 in the acreages of corn and tomatoes. Lower in April, 1917. The necessity for equipment of prices have stimulated consumption of milk, all kinds, however, is very urgent. Motor the supply having been greater than the de- trucks as a means of transportation are coming mand because of the season and limited more and more into use, and shipments are facilities for the export of condensed milk. being made on regular schedules between Phila- Between low price of milk and high cost of delphia, New York, Baltimore, and other cities. feed the dairymen have had very narrow Little change is noted in the iron and steel profits and many have actually run behind. situation, Government requirements being par- Recent weeks have seen a striking advance in amount and increasing in volume. Some mills bond and stock prices, rails and industrials are reported as running at 95 per cent of capacbeing alike affected. Activity was greatest in ity. Orders have been placed which will keep the week ending May 18, when stock sales ex- them busy for months to come. Material for ceeded 7,000,000 shares, more than 1,750,000 civilian use is hard to obtain and demands upon being sold in one day alone. The level of manufacturers are most urgent. Shipyards are stock prices on that date was about 14 points taking the largest percentage of output, and above that of the low point in December, and manufacturers of locomotives are calling for average bond prices are over 3 points above large amounts, while considerable material is the same low point. Money rates continue going to Europe. The coke situation is refirm, commercial paper selling at 6 per cent, ported somewhat improved. with some sales at 5f- per cent. Call money The Anthracite Bureau of Information estifluctuated considerably, touching 6 per cent mates shipments of anthracite coal during occasionally, with the average at about 5 per April at 6.368,372 tons. This compares with cent. 7,276,777 in March, which was the record month, and 5,592,299 tons in April, 1917. DISTRICT NO. 3—PHILADELPHIA. Bituminous coal production is steadily increas- The industries of the district are adjusting ing, due to a better supply of cars and more themselves to meet the war requirements of the favorable operating conditions. Nation, the output in many lines being almost The huge Government demand for cotton entirely devoted to filling Government orders. goods has displaced other orders in maiw lines, The concentration of all the energies of the and it will be some time before any large Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

532 FEDERAL RESERVE BULLETIN. JUXE 1, 1018. amount of goods of certain kinds can go to facturers have difficulty in securing a supply. civilian consumers. Manufacturers of cotton The pig-iron output, while greatly increased yarns ..nd textiles are working at full blast. during the past month and comparing favor- It is reported that of 34 breweries in Phila- ably with other active periods, is not equal to delphia, all but 7 show a decrease in output as the demands, and investigations are in progress compared with last year. Owing to the re- on the theory that considerable basic iron is striction of materials used, output for the cur- being devoted to the manufacture of nonrent year is estimated at 40 per cent less than essential products. last year. Tin-plate mills are running at maximum Business failures are at a very low ebb, while capacity to meet the expected demand during the record totals of bank clearings for this the canning season for food containers. period of the year reflect unusual business Face-brick manufacturers report that there activity. has been little change in the line in the last A firm money market prevailed during the 30 days. Production is being adjusted to the past month, 6 per cent being asked on both curtailment of 50 per cent of the average of call and time loans. Commercial paper ranged the years 1915, 1916, and 1917. from 5| to 6 per cent, with but little paper Unusual sales of draintile for use in draining selling under the higher rate. swamp lands is reported. Very little change While loan and investment operations of is noted in production by glass plants. Rethe Federal Reserve Bank averaged about strictions keep the output of this line in much $2,000,000 per day during April, and more the same condition as heretofore. Dullness in than §2,500,000 during the first three weeks the building trades is also a drawback, and of Ma}r, borrowings by member banks have curtailment in these quarters is to be expected. not been as heavy- as had been anticipated, Owing to the heavy demand for coal for and it is apparent that the third Libert}7 loan domestic use, occasioned by last year's shorthas been floated thus far without any undue age, the general demand is stronger than usual strain on the money market. The bulk of the for this season. In some quarters the volume discounting has been in the form of notes of production is discouraging, and some comsecured by Government obligations. Such plaint is made of miners disregarding their loans amounted to $35,100,000 in April, agreements. However, it is believed that coal compared with $21,100,000 in March, and production for the district is equal to the same 3,500,000 from May 1 to May 21, inclusive. period of last year. Agriculture.—In the northern part of the dis- DISTRICT NO. 4.—CLEVELAND. trict, in localities where last month the con- The restrictions placed upon nonessential dition of wheat was reported not up to the industries are reducing the output very de- average, this month, owing to favorable cidedly. The situation is accepted for the I weather and rain, the condition is reported as most part with cheerful acquiescence, and the very materially improved. In the " blue grass " energies of the industries affected are turned section this crop is said to be in better condito lines more needful under the circumstances. tion than ever in its history at this time of year, Generally throughout, the district business is and generally throughout the district the acrein a healthy condition. age is large and a good yield is expected. Manufacturing.—The manufacture of steel In many parts the areas being planted in approaches closely, if it does not equal, its corn is larger than ever before. In some lohigh record, and Government orders are said calities planting in the lowlands has been to be in such volume that few domestic orders delayed on account of wet weather, but, genare taken and in consequence small manu- erally speaking, it is progressing favorably. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL BESEBYE BULLETIN. 533 The burley tobacco growers report an abund- conditions and to the increased interest of the ance of plants in beds to be transplanted within wage earner in the Liberty loan campaign. the next few days. Last year's crop having Merchants say that the volume of business been sold at such attractive prices, it is ex- in dollars is satisfactory, but that the amount pected that the acreage will be increased. of merchandise delivered is smaller in com- The number of war gardens over last year is parison with the same period last year. It is very much increased, and in one large center thought that the increased prices for merchanit is estimated that fully 2,000 acres are being dise affect to some extent the purchasing power cultivated, exclusive of those in the adjoining of the public. suburbs. It is thought that last year's ex- Collections.—Collections continue good, and perience will be a great benefit and that in- while in some quarters recessions are reported creased yields will result. yet in others increased cash sales are said to Labor.—Farmers still complain of serious offset any deficiencies. It is believed that the labor shortage, but this apparently has not wide distribution of the third Liberty loan resulted in curtailing their operations. The among wage earners has affected collections inadequate supply of farm labor is being met somewhat, but in general the credit conditions by the use of tractors. Already over 600 are good. tractors of an inexpensive type are in use in the Transportation.—Transportation facilities are State of Ohio. thought to be generally improving, although A shortage is reported from all manufactur- they are still unable to do all that is required ing centers, but here again there appears to be of them. However, the complaints in this reno definite curtailment of output in conse- gard have considerably lessened and acquiquence. Many lines of labor are receiving the esence in the situation is shown. It is believed maximum prices. The small manufacturing that the improvement has been such that centers appear to be suffering more than larger almost every line of industry is being taken ones from an insufficient supply. Nonessential care of to a fair extent. Shortage of labor and industries which have been closed for a short equipment still continues to handicap the traffic time find it very difficult to obtain a new force. situation. While labor is exacting in its terms, and Money and investments.—The demand for apprehension for the future is apparent, yet money still continues very active. Since the there is a general feeling that labor'will to the initial payments on the third Liberty loan bank extent of its power meet the demands laid balances are building up and in some quarters upon it. marked recovery is noted. While an increased Mercantile lines.—Complaint is still made by demand for funds is expected during the comthe mercantile trade of delayed delivery of ing month, little trouble is anticipated in fully stocks of merchandise owing to delayed freight meeting the situation, shipments. It is generally reported by the Building.—The building trade shows little jobbing trade that business for the past month change from its previous condition and, for has been in large volume and in excess of ex- other than Government work, is almost at a pectations, which gives evidence that mer- standstill. In. several quarters rents are being chants have confidence in the future. In the increased, and in districts where new plants retail line in some quarters it is reported that are being located the housing problem is a this is the first month since the beginning of matter of concern, the war that business has not increased, but DISTRICT NO, 5—RICHMOND. even these authorities say that business has equalled the same period last year and that The third Liberty loan has been the allthe lack of increase is probably due to weather absorbing point of interest recently. With Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

534 FEDERAL BESEBVE BULLETIN. JUNE 1, 1918. our increasing war activities, the public has ness, there is a decided tone of cheerfulness become more widely impressed with the neces- and even optimism in all circles. sities of the case and has rallied with increasing Continued cooperation with the Capital enthusiasm to the support of the cause. When Issues Committee in the conservative limitathe campaign closed on May 4 it was found tion of new issues and elimination of unnecthat subscriptions had reached $180,000,000, essary expenditures is helping to limit capital which is §56,000,000 over the quota of $130,- demands without serious interference with trade 000,000 allotted to this district. The result activities. speaks for itself and there has been a wide- A 40 per cent increase in clearings over last spread feeling of gratification throughout the year reflects a growing vol'ime of business, district. resulting, however, largely from exceedingly The bond campaign has been followed by a high prices. The credit demands naturally week's campaign for the Red Cross, which attendant on Government financing, coupled promises to result in an overwhelming success, with the more than normal seasonal demands, as was the case with the campaign for the are due particularly to the high prices and are Liberty bonds. making unprecedented calls on bank resources. Aside from these matters, no others of great Bank rates are firm at 6 per cent, and some of importance have transpired since our last the larger banks particularly report that they report, and changes have been so slight that a are overloaned on United States securities and report of them constitutes rather a monotonous facing strong demands from regular customrepetition. ers. The supply of outside liquid paper ac- The readjustment of the railroad situation of cumulated during the winter, when funds were the country, regulation of food and coal sup- plentiful, has been pretty freely collected or plies, and efforts by State and National Govern- rediscounted. These conditions have been ment to relieve the labor situation hold con- reflected by unusually heavy offerings at the spicuous attention in the public eye. Federal Reserve Bank, and while conditions There has been some unfavorable weather, are sound, indeed unusually prosperous, furcrop reports generally are favorable, and the ther demands must be met before permanent condition of winter wheat is said to be above relief can naturally be expected from the harthe average. The acreage in summer crops is vesting and marketing of the growing crops. not expected to exceed, if it equals, that of Some holders of cotton who have apparently last year. Cotton, corn, and rice reports, on overstayed the high market and suffered from the whole, are favorable. Every effort is being the recent decline are hardly entitled to much made to secure maximum results, as these are sympathy. The marketing of the remainder most important factors in backing our own of the present crop and clearing decks for the men and our allies in achieving victor}7 as early coming one would apparently be wise. as possible. There is a cheerful acceptance of and adap- Foodstuffs are in demand. Retail trade is tation to the requirements of present condifair in goods of all kinds, including clothing, tions, and an earnest determination to overshoes, and other articles. come successfully all difficulties, local and Government requirements in all lines are the national, without any other thought than the most important factor, particularly as regards winning of the present struggle. lumber, metals, wagons, and all manufactured DISTRICT NO. 6—ATLANTA. products of the district. Notwithstanding the reduction in private Business activities were somewhat displaced building to a negligible quantity and disturb- by the all-absorbing interest centered in the ing limitations placed on many lines of busi- third Liberty loan campaign during the past Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 535 month. The campaign started with bright as well as foodstuffs has been largely increased prospects, and though daily results lagged dur- over previous years. The season is about two ing the middle, the final outcome was in excess weeks later than last year, and while farmers of the most optimistic expectations, the sub- are fairly well up with their work the labor test scriptions totaling $137,649,450, against an will come in the crop-gathering season. There allotment of $90,000,000. Only a limited has been a considerable increase in the sale of number of large subscriptions were received, mules and farm implements. Most of the the great majority being from wage earners, farmers are able to take care of their own resalaried people, and farmers; the most striking quirements, but with money easily obtainable factor in the campaign being the large sub- the merchants are willing to provide for those scriptions received from the smaller towns and who need help. rural communities. In the first and second A good stand of cotton is reported through- Liberty loans some difficulty was experienced out the district, and if cultivation of the crop in selling to farmers, but in the campaign just continues as at present there is not much likeclosed this class of citizens fully subscribed lihood that there will have to be much replantits share. ing. Practically all the cotton in the south Current reports from throughout the dis- half of the district has been sided up and trict indicate that business generally has not chopped out, and a good deal of the acreage is been materially affected by the Liberty loan being plowed the second time. Male labor is campaigns; though when installments begin to very scarce in some cottonfields, and it is not fall due on monthly payments on subscriptions uncommon to see women plowing and children to the third Liberty loan personal economy hoeing. The final outcome of the crop value will play a stronger part, especially in retail depends largely on the solution of the labor lines. Conditions in dry goods continue brisk, situation. with a good sprinkling of fill-in orders. Early About 3 per cent of the Alabama acreage fall orders have been coming in steadily. sown to wheat last fall will not be harvested Jobbers and retailers report especially good mainly on account of winter killing. This leaves business for this season of the year, with indi- approximately 140,000 acres to be harvested cations that the public is beginning to econo- in grain as compared with 93,000 acres cut mize in purchases—more noticeably in the last year. Wheat in Georgia, in spite of the high-class trade. winter killing, will be equal to last year's pro- Clearings continue to show a monthly in- duction. In Tennessee the abandoned acreage crease and deposits are increasing. Deposits will be about 32 per cent, compared with 35 in the five larger banks of Birmingham show per cent last year. The State's estimated an increase of approximately $3,500,000 dur- production of grain is 10,192,000 bushels, coming the past two months. Reports of the pared with 4,830,000 last year. Birmingham clearing house for the year end- Last year's production of hay in the sixth ing April 30, 1918, show an increase of district was the largest on record, arid there is $43,526,287 over previous year; and, while an unusually large hay reserve, partially caused allowances must be made for extremely high by the increased production of peanut hay and prices, these increases and clearings reflect the velvet beans. It is too early to predict this continued business activity in this section. year's hay crop, but indications point to a The cool weather prevailing during the first slight increase. half of the month was followed by more sea- There will be a decided increase in the citrussonable temperatures, and agricultural con- fruit acreage on account of the large number of ditions are very promising. Acreage in cotton 3roung trees coming into bearing. Several Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

536 FEDERAL RESERVE BULLETIN. JUNE 1, 1018. hundred cars of peaches have already been finance business and to assist in the flotation shipped from Georgia points to markets of of future loans. the North and East. The Mayflower peaches While there has been some reduction in have never been placed on the eastern markets deposits in this district on account of the loan, at an earlier date, and the crop of this par- this has not resulted in seriously crippling the ticular variety is far the largest this State has banks, as many had anticipated withdrawals ever known. Revised estimates of the total and had kept their assets in liquid condition. peach crop for the year now place the number Owing to the intense pace of industry, money of cars at 7/300. will rapidly find its way back to the usual chan- The public in endeavoring to prevent a re- nels, though, of course, the rapidity with which currence of the coal famine is beginning to this operation will take place in a given locality is store coal, which is creating a demand on the dependent upon the character of its industries. output, notwithstanding new mines are being Though complete figures are hot yet availopened from time to time. A new deposit of able, it is generally understood that the farmzinc sulphide has been discovered in Hancock ing communities have figured prominently as County, Tenn. The field covers approxi- subscribers to the last loan. In this connecmately 10,000 acres, largely controlled by one tion, several references are made to the strong corporation which is at present on the field cash position of farmers on account of the preparing for the mining of this ore. unprecedented prices they have received for The industrial situation continues satis- their products. We are told that comparafactory, the only difficulty being the result of tively few new farm loans are being placed and labor conditions, and especially the inefficiency that maturities are being met in an unusual due to the scarcity of labor. Negro inefficiency number of cases. is increasing, due to the growing independence Belief in a growing conservatism among busibrought about by high wages and correspond- ness men finds foundation in the exhibit of ing tendency to "lay off a few days/' thereby total commercial failures reported to R. G. decreasing production in some industrial lines. Dun & Co. Throughout the United States for Industrial leaders look forward to a mighty the four weeks ending May 16, failures numboom for this section after the war. Many bered 810, while for the same period in 1917 the industries heretofore unknown in this part of total was 1,154. In the West, covering the the Nation are being built up and plans for district of the Chicago Federal Reserve Bank, expansion and larger operations are being 1918 figures were 217 for the four weeks ending considered by almost every industry. May 16 as compared with 259 for a like period The Federal Reserve Bank of Atlanta has in 1917. This reduction in failures for the had under consideration the applications of entire country of practically 30 per cent and the cities of Birmingham, Jacksonville, and for the West of over 16 per cent is a satisfactory Nashville for the establishment of branch showing. banks in those centers. The matter was re- Labor is quite scarce in most lines. Wages ferred to the Federal Reserve Board, at which and salaries paid are said to be the highest in place a hearing was held on May 18. history. There are only isolated cases of labor unrest. Notwithstanding, however, the gen- DISTRICT NO. 7—CHICAGO. eral full employment, the situation of building The third Liberty loan has been successfully trades employees is said to be serious on account placed. The banks, though prepared to sub- of the marked cessation of building and conscribe to a far greater extent, were not called struction. Authorities stated a few weeks ago upon to do so, and the resulting reserve posi- that there were in the neighborhood of 50,000 tion is a promising augury of their ability to men idle in these trades in Chicago. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

r.sK 1, 101.8. FEDERAL KESEKVE BULLETIN, 537 Prices continue to advance in practically all steel requirements of the United States and her lines. Price regulation has been extended to Allies. Production of 2,000,000 cars during the leather industry. Textiles are being 1918 as proposed by manufacturers is said to eagerly bought on an ever-advancing market represent sufficient steel to build 9,000,000 with the scarcity of manufactured articles for dead weight tons of shipping. What is to be civilian consumption becoming more acute. the decision of the Government is not yet There is considerable buying for future needs known, but reliable opinion seems to be that against further advances and greater scarcity. nothing will be done that will operate to the Money rates are hard but banks are accom- permanent serious injury of the industry. modating their deserving customers. Distant Comparative figures of building permits maturities are not in favor, six months paper granted in April, 1918, and their value, with being about the limit on which banks are will- those granted in April, 1917, reveal a marked ing to loan even their best customers. contrast. In April of this year Chicago permits Nothing has occurred to mar the brilliant numbered 396, valued at $2,767,900, while in prospects for a large crop of wheat. Michigan April of last year permits numbered 652, valued alone reports unfavorably in this connection, at $9,524,450. This reveals a percentage loss hard freezes during the winter causing consid- of 70 per cent. Fifteen of the largest cities in erable damage to the wheat. There is a large the district including Chicago report a falling acreage of spring wheat which is coming along off of 65 per cent in valuation of buildings for in fine shape. Corn is practically all in the which permits were granted. Total values inground and under continued favorable weather volved were for April, 1918, 86,733,149, for conditions should be a fair crop. There is April, 1917, $19,755,583. Only two cities in much speculation as to the germination of seed the entire district report an increase in building corn, of which there was an acute scarcity in operations. This may be attributed to excesthe desirable grades, and the farmers are await- sive cost of materials, and scarcity of the same, ing with some concern the quality of the stand. together with unwillingness of individuals to Oats acreage is large and, like wheat, has had a tie up their resources in capital expenditures at very auspicious start. this time and a like indisposition on the part of The investment market has somewhat re- banks to finance such investments. vived. Miscellaneous securities are in small Mines are employed at capacity due to supply and strong demand. Brokers look for domestic demands, despite the fact that raila good resumption of business if certain ap- roads have not yet made contracts for their proaching maturities are refunded in the usual yearly supply of coal. Coal miners expect a market. We find investment bankers hopeful larger production during May than in April. for a fair business in three to five year indus- Distillers are feeling a good demand for trials at attractive rates. There is some inter- bonded whiskys which will continue until exest on the part of investors in longer term haustion of stocks on hand. Certain distilleries bonds. are availing themselves of the adaptability of Agricultural implement manufacturers are their plants to corn drying and milling of cattle able to dispose of all the products they can turn feed. Maltsters report grave difficulty in securout under the existing conditions of scarcity ing the necessary labor to carry on their busiof labor, material, and transportation. Orders ness. Large orders contracted during the emare far in excess of their ability to supply. bargo period are being filled with great effort Manufacturers of passenger automobiles now necessitating day and night labor. working under a voluntary curtailment of out- There is no recession in the demand for dry put to the extent of 30 per cent are said to be goods. The market is still soaring. Probably facing a curtailment of 75 per cent based on the due to the Liberty Loan, retail business was Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

538 VE BULLETIN. JUNE 1,1918. retarded somewhat during April, but May I Cattle. Calves. Hogs. Sheep. promises much activity. Stocks in jobbers' L hands are lower both in money value and actual W18 I 228,250 84 783 615,374 214,971 merchandise, while retailers have been pretty 1917 1 202,812 70,800 545,9S2 202,403 i well stocked up. Possible Government action There is nothing approaching general activity in the way of requisition and regulation is in the lumber business. A volume reaching 50 ground for much uncertainty. Collections per cent of normal is exceptional. Very few have been excellent. dwellings are being built. The bulk of the Furniture manufacturers report increases in trade comes from rebuilding and repairing revolume over past periods, part of which are quirements. Collections are fair. due to higher prices and part to the anxiety of Except in foodstuffs and products containing retailers as to ability to secure stock in the sugar, mail-order houses continue to record infuture. Collections are good and transportacreased sales over last year. Educational meastion facilities more satisfactory. ures designed to promote conservation have Excellent credit condition is an outstanding effected noticeable reductions in the items menfeature of the grocery business. Correspondtioned. Collections are good. ents say collections are better than pre-war Pianos, player pianos, and talking machines period. Conservation is being practiced and m are reported in unusual demand by retailers, the distribution of goods is carefully made. owing to the recent publicity given the state- Volume is good, despite restrictions on flour ment that manufacturers would voluntarily and sugar, and light movement of canned goods. curtail output. The latter are far behind in Hardware dealers face a scarcity of goods on filling orders and freely exercise their prerogaaccount of pledge to the Government by steel tive of choosing whom they shall sell, on the mills of 100 per cent of their product. Building basis of past credit experience. Collections hardware reflects the slump in building opera- continue very good. tions while other departments show a healthy Shipbuilders are, of course, pushed to caincrease in volume. A very satisfactory credit pacity by the Government needs for ships and condition exists. are being assisted at every hand to obtain Maximum prices have been established in the necessary material and labor. Steel business leather industry on the price of raw hides, is in the same situation, with Government reskins, and leathers. There has been increased quirements gradually crowding from consideractivity in the leather market in the last few ation the demand for domestic consumption. weeks on account of civilian, Government, and Though commonplace on account of fre- Allied demands. Dealers are naturally not quent repetition, the continuance of the desirous of selling under the Government maxiurgent demand for watches and chronometers mum prices and in view of present volume of every description compels capacity operaquotations will hover quite close to if they do tion of watch factories. Retailers attribute not reach the maximum. Collections are good. large sales gains to purchases of precious Receipts of beef cattle have fallen off and stones and watches. authorities anticipate short runs for some time Wool markets are featureless. While conto come. Other live stock are coming to marsignments find their way to central markets, ket in normal volume. Incoming stock is said Government prohibition prevents their sale. to be of excellent quality. Poor pasturage is Committees on valuation will soon be estabapprehended as forecasting light receipts durlished, when available stocks will be distribuing the summer. Comparative receipts of live ted and military needs first met. stock at Chicago for the four weeks ending May Clearings in Chicago for the first 17 business 18, 1918, and a corresponding period in 1917: days of May were $1,459,000,000, being $42 r Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNK 1, 1918. FEDERAL RESERVE BULLETIN. 539 000,000 less than for the corresponding 17 facturers of boots and shoes, clothing, etc., are business days in May, 1917. Clearings re- also busy. Packers report a large increase in ported by 22 cities in the district outside of business over this time last year. Some de- Chicago amounted to §322,000,000 for the first cline in the electrical line is noted, due to the 15 days of May, 1918, as compared with $318,- fact that very little building or extensions by 000,000 for the first 15 days of May, 1917. public utilities is going on. Flour mills also Deposits in the 12 central reserve city member report a dull business, on account of their banks in Chicago were $878,000,000 at the inability to get a sufficient supply of wheat. close of business May 20, 1918, and loans were Wholesalers and jobbers of dry goods report $584,000,000. Deposits show an increase of a good business, as do also department stores approximately $14,000,000 over last month, and retail merchants generally. The grocery and loans an increase of approximately trade is said to be steady, but the demand for $5,000,000. many articles is falling off on account of the numerous gardens. Dealers in jewelry report DISTRICT NO. 8—ST. LOUIS. a decline in their business in some directions, The outlook in this district is greatly while in other directions it is holding its own. strengthened by the favorable crop conditions. The demand for jewelry is said to come largely From reports received throughout the district, from those who, by reason of a change in forit appears that the crops generally are in good tune, find themselves short of jewels and long condition. On May 1 the condition of the in cash. The reports state, as a rule, that colwinter wheat in the States included in this lections are good, and some indicate that cash district was estimated by the Government to transactions are increasing. be 94.7 per cent, which is 10 per cent better During the past month a fur sale was held than the 10-year average. The acreage in in St. Louis, the total sales amounting to winter wheat is also considerably more than $6,250,000. It is said that in quantity of furs last year, and a large output is anticipated. presented, in the number of active buyers, and The oats, rye, ha}r, and alfalfa crops are also in the actual cash returns this was the largest reported to be progressing satisfactorily. The fur sale ever held. planting of corn has been retarded by the The scarcity of materials for civilian use is recent rains, and in some sections it will be affecting practically all lines, and is causing late. However, the indications point to a many buyers to place orders for future degood crop. The cotton and tobacco crops are livery, believing that they will be unable to also somewhat behind, but they are said to be get the goods at all later or else at higher improving. The fruit has been damaged in prices. Some concerns are restricting sales some portions of the district, and our corre- for future delivery. Government needs are spondents state that there will be very few receiving first consideration, and there is a peaches. There seems to be an increased growing sense of responsibility among business diversification of crops in this district and a men to cooperate to win the war. general tendency to produce an abundance of The transportation situation continues to food. improve, but complaints are still heard on Business in this district continues active, account of delays in shipments of goods, which especially in those lines contributing articles is having a deterrent effect on business. necessary for the prosecution of the war. Outside of St. Louis there is very little dis- Manufacturers are more and more engaging in turbance in the labor situation in this district. Government work, and some are now doing In St. Louis the situation is improving, and practically nothing else. Iron and steel manu- with the aid of Government mediators, it is facturers report increased activity, and manu- anticipated that practically all strikas will be Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

540 FEDERAL RESERVE BULLETIN. JUNK 1, 1018. settled in the near future. Labor is well em- and concerns have purchased United States ployed, and there is a good demand for both Treasury certificates with which to pay this skilled and unskilled workmen. tax. According to the report of the St. Louis DISTRICT NO. 9—MINNEAPOLIS. National Stock Yards, there was a decided falling off in the receipts and shipments of With a favorable season crop production in horses and mules during April. The receipts the Ninth District should roach record figand shipments of hogs and sheep were also ures. A very large acreage of all small grains less than the previous month. However, and especially wheat has been planted, and all there were substantial increases both in the crops have obtained an excellent start. Corn receipts and shipments of cattle. In com- and flax acreages will be less than a year ago, parison with April of last year, the report also and farmers have wisely devoted a part of the shows increases in the receipts and shipments usual corn ground, which they were not able of cattle, and increases in the receipts of hogs to plant because of the shortage of good seed, and the sales of horses and mules, but de- to the equally important item of wheat. This creases in the receipts of sheep, horses, and in part explains a very substantial increase mules and in the sales of hogs and sheep. over the normal wheat planting. Reports from the leading cities in this dis- Moisture conditions from the beginning of trict for the month of April indicate a slight the season have been entirely satisfactory, increase in building operations over the pre- especially in western North Dakota and Monvious month, but perceptible decreases in tana, where the crop a year ago was a failure. comparison with April of last year. Little A large amount of new land has been put under building is going on in this district except that plow in that portion of the district. which is absolutely necessary. The very favorable crop outlook and the Postal receipts in St. Louis, Louisville, Mem- fact that the moisture now in the ground is phis, and Little Rock, during April, all show sufficient to carry the crop well into June has decreases in comparison with the previous had a favorable influence upon all lines of month, but in comparison with April of last business, and trade at local points is good. year, substantial increases are shown. Banking conditions show little change. The demand for money in this district has The demand is active and rates are firm withcontinued good during the past month. The out much fluctuation from the conditions a bank rate to customers is still 6 per cent in month ago. the large centers and slightly higher in the No serious shortage of labor has yet develoutlying districts. oped, although good labor is scarce and most Very few of the banks in the large centers large employers are having some difficulty in are in the market for commercial paper, though meeting their demands. There is a prospect there is a fair demand from the country banks. that as the season advances there will be The commercial paper rate, as a rule, is 6 per difficulty in supplying labor both for comcent for all maturities. Brokers report that mercial and agricultural activities. the demand is mostly for short-term paper, The soundness of underlying conditions which is readily available for rediscount at the throughout the district was well demon- Federal Reserve Bank. strated hy the extremely liberal response of all Bankers and business men are now making classes of labor to the third Liberty loan, rearrangements to meet the payment of the sulting in a very heavy oversubscription and excess-profits tax, which is due June 15. The in the oversubscription by each one of the burden on the banks is expected to be greatly more than 300 different counties in this relieved by the fact that many individuals district. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 19:18. FEDERAL RESERVE BULLETIN. 541 DISTRICT NO. 10—KANSAS CITY. owing to liberal receipts and the promising Agriculture.—The present agricultural out- start of the new crop. The visible supplies of look is very promising. General weather con- corn on the four chief markets decreased about ditions in this district continue favorable for j one-tenth during April. the development of crops. There has been | The Government is now contracting for the ample rain for the immediate needs of the balance of the pinto bean crop, and when this wheat sections, and these States report that movement is over fully 50,000,000 pounds of winter wheat has made an excellent growth pintos will have been shipped to eastern during the past month, and the condition has markets. It is estimated that 400,000 acres improved steadily. The old wheat supplies of these beans will be planted in Colorado will be more thoroughly cleaned up than ever alone this spring, and indications are that the before, and a determined effort is being made pinto will prove a valued asset to the whole hy the Food Administration to use every avail- Southwest. able bushel, so that the new crop season will Live stock.—The remarkable and recordbegin with empty bins. The season has breaking advance in prices for beef steers, started favorably for spring sown crops, j which began with the opening of the month though cool weather has made corn develop- and continued until almost the close, is mainly ment a little backward. responsible for the large movement of cattle Practically all the mills in this region con- to market. When the prices for all classes of tinue to operate on Government orders either fat cattle reached these new high levels, shipfor the Army or for export, and have therefore pers sent in all stock they could secure to produced little flour available for domestic | meet the strong demand, and a large part of use. The people, however, have willingly used j the corn-fed cattle were marketed. Accordsubstitutes, and this unusual shortage in the j ingly, stocks of meat have so materially domestic supply has caused remarkably little j increased that with incoming supplies they comment or complaint. Mills are grinding will amply cover the demand until the incomwheat as fast as they can secure it, but reports ing of grass-fed cattle in July. Since the from 67 in this district showed they were run- cattle movement from Texas north is about ning at only 40 per cent of capacity during j completed, the demand for loans to finance April as against 80 per cent a year ago, with a cattle for grazing and fattening purposes is not resultant decrease of nearly one-half in the so strong. flour output. Wheat stocks on the four prin- The hog market continues at a high record cipal grain markets decreased 72 per cent level for this time of year. Receipts at the during the past month. Local market re- seven district markets increased 30 per cent ceipts were less than one-eighth and ship- over April, 1917. The general quality of ments less than one-fourteenth of those last offerings was good and the weight of hogs on year. five markets averaged 218 pounds, as compared The marketing of corn and oats continues with 203 pounds last year. Slaughterings were larger than usual for this season of the year. 7 per cent in excess of those a year ago. Receipts of corn on the local market for the Prices on sheep and lambs during the past past month increased two-thirds over the cor- month on the local market reached record responding period last year and shipments were heights. Feeding and breeding stocks were in nearly three times as great. The demand for strong favor, with but a very limited suppl}r. corn as a wheat substitute has been sufficiently Spring lambs were exceedingly scarce, while heavy to maintain extraordinary high prices the receipts of sheep have been below the considering the volume of supplies. The prices demand. Conditions were generally favorable on oats, however, have declined moderately and up to the close of the month the prevailing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

542 FEDERAL RESERVE BULLETIN. JUNE 1, 1918. tone of the market was strong. Sheep receipts Oil.—There were 122 more wells completed for the seven chief centers were reported 11 in Kansas during April than in the previous per cent greater than those a year ago. month. Because of the fact that no so-called Mining.—Conditions in the metal mining "freak" wells—that is, wells with 10,000 or industry of Colorado have changed very little 15,000 barrels initial production—were brought during the past month. The increased price in, a falling off in new production was shown, of silver, brought about by the passage of the the decrease being 44 per cent from March. silver bill providing for the melting of 350, However, the month proved good from the 000,000 silver dollars now in the Treasury, has standpoint that the wells completed should be resulted in renewed inquiry for silver proper- longer and better producing ones than those of ties, and some stimulation of this industry is freak character. High prices of crude have expected. It is reported that shipments of caused remewed activity and interest in the manganese ores, used in the manufacture of old fields. The estimated total production of paint, glass, and chemical products, have the State was 84 per cent greater than that of increased and will continue to gain steadily April, 1917. throughout the summer, if prices remain high. Oklahoma completions during the month of Inquiries are being made in this State regard- April numbered 784, an increase of 75 over ing deposits and production of chrome and March. The new production, however, made pyrite, both iron products for use in connec- a slight decrease of less than 1,000 barrels, or tion with the war. 3 per cent. Gushers were not plentiful and The month of April showed a distinct slow- there were but few wells that started better ing down in the mining industry of the Mis- than 1,000 barrels a day. The total estimated souri-Kansas-Oklahoma district. The average production of the State was larger than that of price on all grades of zinc blende dropped from the previous month, but still continues slightly $45 per ton, as quoted in March, to $42. This under last year. Stocks of crude petroleum in decrease in zinc ore prices contributed largely the Oklahoma-Kansas field at the end of to a curtailment of producing operations, and March were about 500,000 barrels less than in also to an increase in surplus stocks. Govern- February and have decreased nearly 7,000,000 ment cooperation has encouraged the operators barrels, or 6 per cent, since March, 1917. to some extent. A price of $75 per ton has A severe storm curtailed nearly all field been set for the high grade ores, thus assuring operations in Wyoming. But 12 wells were producers a fair profit. Government and completed during the month, with a new daily allied contracts will probably be placed in the production of 795 barrels, as against 17 comnear future. The production of the district pletions in March with production of 1,000 for the first four months of this year as com- barrels per day. It is reported that large pared with the corresponding period last year companies have become interested in the decreased nearly 14 per cent and the value of Wyoming fields and are investing great sums this output decreased over 40 per cent. of money to develop the deposits. An in- The lead ore market has also shown some creased future production is looked for in that decline, opening at $85 per ton and closing by State. the end of the month at $80. Surplus stocks I Lumber and construction.—Conditions are decreased slightly during April. The total j very uncertain in the lumber market at present, output of lead gained 9 per cent for the first i but there is a steady and strong demand for four months this year over the same period in I all kinds of lumber, which is not noticeably 1917, but the value decreased about 18 per I retarded by the high prices. It is reported cent. 1 that from the standpoint of wholesale dealers Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNEl, 1918. FEDERAL RESERVE BULLETIN. 54$ conditions were never more favorable. They The Government now plans to take over the advise that the bulk of orders are from the implement control, and all dealers will go under country yards, and as crop conditions have license June 20. General reports indicate that greatly improved, the demand from the rural except for harvesting machine^ the present districts is expected to be heavy. Shipments demand for farm implements is exceptionally from the mills continue quite slow and uncer- light. tain, although the car situation is greatly Manufacturing is active. Jobbers in all lines improved. This is attributed to the facts that advise that trade is very good with a steady the mills are still running on reduced operations call for seasonable goods, greatly stimulated by and that long-standing orders from eastern warm weather. Merchants are purchasing points are being filled. Reports indicate that goods for future delivery from the wholesalers. most of the retail dealers are carrying normal Sales of shoes are large, with higher prices stocks. predicted for next fall. Trade in groceries and Building permits issued in the 10 largest- drugs is normal and orders continue in good cities of this district for April were nearly one- volume. Failures are few and collections fair fourth less in volume than those issued during to good. the same month last year. The estimated cost Financial.—Receipts at the post offices in 11 of such proposed constructions was about of the largest cities in the district for the $2,500,000, an increase over the preceding month of April as compared with the corremonth but a decrease of 35 per cent from sponding month last year showed a substantial April, 1917. Only 3 cities showed a gain in increase of 28 per cent. this month's building valuations as compared Bank clearings as reported in the 17 principal with those of the corresponding month a year cities for the past month gained 47 per cent ago. over April, 1917. The clearings at Omaha were Labor.—Labor conditions have been very 81.2 per cent in excess of those a year ago, the quiet and settled. But a few small strikes second largest increase in the entire United were reported during th e past month. Govern- States. ment cooperation has been extended to the The third Liberty loan was a great success,, State free employment bureaus. Although with a subscription of over $4,000,000,000 from the demand for farm labor is steady and in- 17,000,000 persons. The Kansas City district, sistent, it is predicted that all needed hands | with a quota of $130,000,000, subscribed over will be secured. However, Kansas alone is | $200,000,000, or 156 per cent of its quota, and reported in need of 85,000 men for farm work j was credited second among the 12 Federal in the harvest season. All cities in that State j Reserve districts. are to be requested to furnish a census of their Demands for money continue strong. Rates man power and its availability for a farm draft. of discount have advanced and a new schedule In Nebraska, under a new law, all men over with increased rates went into effect May 20. 16 years of age must register the first week in DISTRICT NO. II—DALLAS. June and become liable to farm labor. Mercantile.—General merch andise activities The generally favorable features which for for the 3'ear ending April 1, 1918, compared some time past have characterized the comvery favorably with the annual period ending mercial situation in this district still obtain, April 1, 1917. The seven States (wholly or and with few exceptions our correspondents partially within this district) show an average are optimistic concerning the business outlook increase of over 2 per cent in purchases, a small in the immediate future. Farming conditions decrease in indebtedness, and a gain in pay- show a further improvement in the past 30 days, . ment activity averaging 3.2 per cent. the result of good rains over practically all of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

544 FEDERAL RESERVE BULLETIN". JUNE 1,1918. the agricultural belt, and the drought seems to tions. Wholesale lines, such as dry goods and have been broken over a large portion of the ter- notions, are in good demand, and wholesalers ritory which has suffered for many months past. and jobbers have all the orders they can con- Reports as to lack of sufficient moisture are the veniently handle. In seasonal lines, such as exception at this time, rather than the rule. seeds, farm implements, harvest supplies, etc., Farmers have planted seed and cotton and are trade is unusually brisk. Activities with all getting fairly good stands. Corn and other manufacturing industries are well maintained, feed crops are, for the most part, in good condi- and their operations are restricted only by the tion. The season is late on account of dry continued scarcity of labor and uncertainty in weather and the fact that the month of April delivery of raw materials. Collections are fair was unseasonably cold. The small-grain crop to good. shows great improvement with the fine rains, Subscriptions to the third Liberty loan will and while actual figures as to the condition of run slightly more than $115,000,000. The this crop at this time, as compared with 30 days banking institutions of this district have demonago are not at hand, we believe that the im- strated their patriotism in this great moveprovement will make the yield fully up to, if ment, and notwithstanding that we are apnot exceeding, expectations. proaching the borrowing season, they have From the rice-growing belt of south Texas responded unselfishly to the war demands. our correspondents advise that the planting An early analysis of the reports of conditions season has been ideal, and with anything like from the comptroller's call of May 10 shows a normal conditions the yield of rice will be decrease of deposits and increase in loans. unusually heavy. Demand with this bank continues unusually Onion shipments from the Laredo section heavy, our loans showing an increase of some have so far aggregated about 1,200 cars. Last $3,000,000 in the past 30 days. Interest rates year's shipments amounted to about 1,800 cars. are steady to firm. Within the past 30 days a Recent rains there have damaged the crop large portion of the $5,000,000 special Governremaining unshipped and a great many of the ment fund for drought-relief purposes has been shipments are going to market in bad condi- distributed in the west and southwestern portion. The cost of production this year has tions, and the deposits have been of great relief been heavier than formerly, and but few of the to the banking institutions there. The degrowers will make money; many of them will mand with banks in the west and southwest, sustain large losses. where the drought was so serious, already Our correspondent at Nogales reports that heavy, has been further increased by the good the first shipments of chick peas (garbanzo) rains over that territory and the necessity of have arrived at that interior port, and as this financing farmers and stock men to get a new is the money crop of the west coast of Mexico, start. and most of the growers carry their accounts The Red Cross campaign is now actively with banks in that section, it will mean a con- under way and we confidently believe the siderable activity in business there. The crop quota of this district will be fully raised, if not of chick peas this year will be unusually large, largely oversubscribed. This statement is and it is expected will be sold at satisfactory based on the previous unselfish and patriotic prices. response of banking institutions, firms, and The first warm weather of the season has ob- individuals in this district to the Government's tained during this month, and as the result re- program. tailers of summer merchandise have enjoyed a At the risk, probably, of repetition, it may good business. Retail trade in other lines is be stated that the building industry is generally also in good volume, and fully up to expecta- inactive and below normal, a decrease in val- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL BESERVE BULLETIN". 545 uation of 29 per cent in permits issued being Trade with Mexico is improving, and were shown at the principal cities in the month of export and passport regulations not so rigid April. Construction of ships at Orange and business would be much better. Merchants at Beaumont, however, has made an unusual border points are handicapped by these export activity at these places, and business in all regulations. This has had a tendency to relines there is at capacity, reports indicating duce their volume of business, on account of that it is difficult to provide proper housing the difficulty experienced in securing export facilities for the influx of workmen and their licenses. families. Texas lumber manufacturers report that Reports from New Mexico indicate that conditions at the sawmills are such that they cattle and sheep are in poor condition, and are able to produce only about 50 or 60 there will be a small crop of calves and lambs. per cent of their normal capacity. Cars are Practically all of the range country in Texas in fairly good supply and very little complaint has had good rains and the present outlook is being made on account of lack of equipment. in the cattle industry in such sections is more The demand for lumber is largely in excess of encouraging than for some time past. Large production and has been for some weeks. sales of steers have been made in Arizona for Excepting for the scarcity of labor essential June and July delivery, and with the reduction to the output of the mills, the situation in in the amount of feed necessary, the result Texas lumber trade is in fairly good condition. of good rains, cattle men are more optimistic The lumber mills of New Mexico are working concerning the immediate future in the in- to their full capacity and have more orders dustry. than they can fill. Post-office receipts at the principal cities of the district show an increase of 60.1 per cent DISTRICT NO. 12—SAN FRANCISCO. for the month of April over the same month The condition of grain in all parts of the dislast year. This is the largest increase reported trict, except in California, is good. A larger in several months. acreage was seeded, and the increase in produc- The recent rains have created an active tion will be considerable. On May 1 the condemand for farm labor and the shortage dition of winter wheat in Washington, Oregon, which has existed for several months past has and Idaho was better than the average for the grown more acute. There is no material past five years. In California wheat acreage change in the situation as regards skilled lines. on May 1 was 416,000, with an estimated pro- There is also a fairly good demand for car- duction of 7,076,000 bushels, or 349,000 bushels penters and other building mechanics. The less than last year, the decrease being due to general situation as regards labor in this lack of spring rains. In the Imperial Valley district is indeed serious. Practically every harvesting of wheat and barley has started, line of business is suffering from the shortage 100,000 tons of barley and 10,000 tons of wheat of help, and as the harvest season approaches being the estimated production. Recent rains the situation will be intensified. in Oregon, Washington, and Idaho have greatly Our correspondent at Tucson reports that improved the condition of all grains. The producers of copper in that section of Arizona winter wheat acreage is estimated at 1,850,000 are complaining on account of the maximum in Washington and 553,000 in Oregon. About price of 23J cents per pound which has been 50,000 acres are planted to rye in Washington, set on that metal. Owing to the increased Oregon, and Idaho, from which 896,000 bushels cost of production, they claim this price leaves are expected. Hay acreage is about the same them no profit. as last year and the condition is normal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

546 FEDERAL RESERVE BULLETIN. JUNE 1,1918. Ranges in the Pacific Northwest are in good 1918, showed an increase in flocks in Oregon, condition, but in California, Arizona, and Ne- Idaho, and Washington of 2\ per cent during vada are rapidly drying. 1917. Almonds, pe aches and apricots were dam- Alaska salmon packers expect a normal pack 4 7 aged by frost in some localities, but a yield of of about 6,000,000 cases. The pack of red deciduous fruit better than the average is ex- salmon on Puget Sound, Columbia River, and pected. In Washington apples are in good in British Columbia is expected to be less than condition, a heavy crop of most varieties being 1,000,000 cases. indicated. The navel orange season just closed Conditions in the lumber industry have in California was the lightest in several years, improved. The car supply at present is adeonly 10,727 cars having been shipped from No- quate, but lumbermen anticipate another car vember 1, 1917, to April 29, 1918. Valencias shortage in July. Two months of operation are now being shipped. The crop is about under the eight-hour law have shown 9.81 per three-quarters normal, and it is estimated that cent decrease in output and 25 per cent increase 12,000 cars will be shipped by October 31, 1918, in cost of production. The placing of 10,000 bringing total shipments of citrus fruits for the soldiers in various Oregon and Washington season to 27,000 cars compared to 50,077 cars lumber camps had a very stabilizing influence. last season. The orange groves now have a Agitators are not so much in evidence, and the very heavy bloom, and with favorable weather attitude of the laborers is said to be more favnext season's crop is expected to equal if not orable to increased production. The placing exceed the 1916-17 bumper crop. of the Government's order for 100,000 box It is estimated that 120,000 acres will be cars, 3,000 of which will be built in Oregon sown to rice in California this year, compared to and Washington, will utilize considerable lum- 90,000 acres in 1917. ber from this district. Reports indicate that there will be little if The control exercised by the United States any shortage of water for irrigation during the Shipping Board over the movements of vessels summer. and Government requisition have swept the The wool markets of the district have been ports of the district practically clear of vessels very unsettled, due to the uncertainty of the available for charter. The agreement with Government's action. The situation has Japan whereby the Government obtains 250,000 cleared since May 1, through the announce- tons of ships in exchange for an equal tonnage ment that the Government would take the of ship steel will create a shortage of tonnage entire clip at the prices prevailing in the Bos- for oriental trade, as most of the Japanese ton wool market last July. This will net ships will go to the Atlantic to carry men and growers from 45 to 60 cents per pound, ac- supplies to Europe. cording to the quality. The absence of specu- Steel and wooden shipbuilding continues to lators and buyers from the market during the lead all other industries in the district. Launchpast winter placed the whole burden of financing ings are of almost weekly occurrence, and sevwoolgrowers upon the banks, who, fortunately, eral shipbuilding records have been broken through the facilities for rediscount afforded recently. Such achievements, apart from their by the Federal Reserve Bank, were able to importance in aiding the early increase in care for their requirements. The growers gen- available tonnage, illustrate the improved erally are satisfied with the prices, and wool is spirit of the workmen in the shipyards, for it beginning to move in considerable quantities. is on their efforts that the shipbuilding pro- The flocks came through the winter in excel- gram depends for results. lent shape and a high percentage of iambs was The concrete steamer Faith had a successful saved. The Government report of January 1, ocean trial trip on May 15 and will go to sea Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 547 loaded about May 20. The large production are Owens Lake, Inyo County, and extensive of cement on the Pacific coast, the California beds of kelp off the southern California coast. production in 1916 being 5,299,507 barrels, April bank clearings for 20 principal cities and the location of steel mills in each of the of the district increased 21.9 per cent over the coast States for rolling the necessary rein- corresponding month of 1917. The greatest forcing material make possible the economical gain was shown by Tacoma with 71.1 per cent, construction of concrete ships on a large scale followed by Seattle with 64.2 per cent, and on this coast. Portland with 41.4 per cent. Petroleum production in California during Building permits for the same cities declined April was 8,294,137 barrels, an increase over 22.3 per cent. March of 262,260 barrels. April consumption The district's quota for the third Liberty was 8,623,006 barrels. Storage stocks de- loan was $210,000,000, which was oversubcreased 328,869 barrels to 30,502,447 barrels. scribed nearly 40 per cent. The total number The successful development of a process for of subscribers was far in excess of previous extracting potash from the brine of Searles loans, showing a wide distribution of the Lake, San Bernardino County, is claimed and bonds, and demonstrating that the people of a large plant has been erected. The previous the district are loyally supporting the conduct dependence of America on Germany for this of the war. The position of the banks is salt is shown by the following figures of strengthened by the heavy disbursements of imports: 1913, 267,970 tons, average price, the Shipping Board and other Government $38 per ton; 1916, 10,628 tons, average price, departments in the district, which amount to $400 per ton. nearly $50,000,000 per month. American production in 1916 was 9,720 The situation throughout the district is one tons. Other sources of potash in California of great industrial and agricultural activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

548 FEDERAL RESERVE BULLETIN. JUNE 1, 1018. GOLD SETTLEMENT FUND. Total deposits of gold in the two funds from April 18 to May 16, principally by the Operations through the gold settlement Chicago and San Francisco banks and the fund for the four-week period from April 18 Federal Reserve agent at Boston, amounted to May 16, 1918, were the heaviest of any peto $69,668,700 against total withdrawals of riod during the current year, due largely to gold of $7,640,600, resulting in a net gain of Government fiscal operations, including trans- $62,028,100 in the combined funds. The comfers of funds largely for the payment of the bined banks' and agents' balances crossed the second issue of certificates of indebtedness billion dollar mark oil May 3, aggregate holdmaturing on May 9, and also to payment in New ings at the close of business on that day York exchange for Liberty loan bonds. Comamounting to $1,004,331,200. On May 16 bined clearings and transfers for the four-week the total of the two funds was $1,036,period amounted to $3,785,405,000, averaging 495,500, an increase of 28.2 per cent since $946,351,250 per week, compared with a like January 1, 1918. average of $846,448,000 for the preceding four Below are given figures showing changes in weeks, an increase of 11.8 per cent in the volthe fund between April 19 and May 16, both ume of average weekly transactions. Transinclusive. fers of funds between the banks amounted to $443,300,000, 67 per cent of the total represent- Amounts of clearings and transfers through the gold settleing transfers to the account of the New York ment fund by Federal Reserve Banks from Apr. 19 to May 16, 1918, both inclusive. bank, mainly for the credit of the Government, [In thousands of dollars.] while transfers from New York comprised about 24 per cent of the total transfers made. Total Balances clearings. adjusted. Transfers. Of the aggregate transfer transactions about 91 per cent affect New York's account. Settlement of— Changes in the ownership of gold in the A M p a r y . 2 2 5 8 7 9 6 7 9 , , 1 7 6 7 6 3 6 7 5 4 , ,3 9 1 9 9 8 1 7 3 5 6 , , 0 0 0 0 0 0 banks7 fund through transfers and settlement M M a a y y 9 16 8 8 5 1 5 9 , , 4 7 2 4 0 6 6 6 3 4 , , 5 1 3 8 0 9 1 8 5 1 0 , , 6 7 0 0 0 0 during the four-week period amounted to Total 3,342,105 268,036 443,300 1.45 per cent of the total obligations settled, Previously reported for 1918 11,021,954 849,263 1,161,595. Total since Jan. 1,1918 14,364,059 1,117,299 1,604,895 as against 3.08 per cent for the preceding four- Total for 1917 24,319,200 2,154,721 2,835,504.5 week period. Net changes in the ownership of gold since the commencement of the opera- Clearings and tion of the fund May 20, 1915, to May 16, 1918, transfers. amount to 1.22 of the total obligations settled Total for 191S to date 15,968,954 during the period. St. Louis and Cleveland Total for 1917 27,154,704.5 Total for 1916 5,533,966 show the largest gains through the shift- Total for 1915 1,052,649 ing of credits in the fund, while New York and Total clearings and transfers from May 20, 191.5, to May 16,1918 49,710,273.5 Atlanta show large decreases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL RESERVE BULLETIN. 549 Changes in ownership of gold. [In thousands of dollars.] Total to Apr. 18,1918. From Apr. 19,19 in 18 c , l u to si M ve a . y 16,1918, both To M ta a l v 2 c 0 h , a 1 n 9 g 1 e 5 s , to f M rom ay 16,1918. Balance Federal Reserve Bank. to credit Ar>r. 18, 1918, plus Balance Decrease. Increase. net deposits Mav 16, Decrease. Increase. Decrease. Increase. of gold 1918. since that date. B oston... 58,463 61,348 63,885 2.537 61,000 NewYork . . .. 570,487 53,025 22,336 30,689 601,176 Philadelphia 90,258 60,802 55,729 5,073 85,185 Cleveland.... 105,657 44,444.7 60,754.7 16,310 121,967 Richmond 4,388 9.107.4 6,850.4 2,257 6,645 Atlanta 48,979 17;679 8,993 8,686 40,293 Chicago 73,251 86,322 81,739 4,583 68,668 St. Louis . . . 25,602 18,212 37,421 19,209 44,811 Minneapolis 17,122 12,180 18,572 6,392 23,514 Kansas City 51,259.5 39,619.2 35,848.2 3,771 47,488.5 Dallas...... 16,382.5 1,924.9 7,397.9 5,473 21,855.5 San Francisco.... 87,901 15,950 21,088 5,138 93,039 Total. 574,875 574,875 420,614.2 420,614.2 55,059 55,059 607,821 607,821 Gold settlement fund—Summary of transactions from Apr. 19, 1918, to May 16, 1918, both inclusive. [In thousands of dollars.] Federal Reserve Ba l l a a s n t ce Gold Gold drawals A d g e g a p r n o e d s g i a ts te Transfers. Weekl 1 y 6 s ,1 e 9 tt 1 l 8 e , m b e o n th ts , i n A c p lu r. s i 2 v 5 e t . o May in B c l a f o u l s a n e n d c o e a f t Bank of— st A at p e r m . 1 e 8 n , t, dr w a i w th a - ls. deposits. tra a n n sf d ers tra f n ro s m fers Net Total Total Net b M u a si y n e 1 s 6 s , 1918. to f a u g n e d n . t's a f g u e n n d t . 's Debit. Credit. debits. debits. credits. credits. 1018. Boston 66,990 4,358 10,000 4,358 12,000 10,475 276,873 267,410 1,012 63,885 New York 88,670 4,355 40,000 4,355 104,800 297,000 222,889 1,141,629 918,740 22,336 Philadelphia 51,164 500 5,753 2,500 12,138 18,000 | 12,000 12,912 375,352 376,279 13,839 55,729 Cleveland 41,289.5 1,227.3 4,382.5 1,227.3 4,382.5 62,000 I. 234,755 313,065 78,310 60,754.7 Richmond 7,501.9 2.5 4,108 2,502.5 4,108 27,000 ! 10,000 154,495 169,238 14,743 6,850.4 Atlanta 12,635 100 1,894 9,350 14,394 500 I. 10,267 122,143 113,957 2,081 8,993 Chicago 59,093 100 15,907 15,640 42,809 112,000 ! 50,000 424,826 482,243 57,417 81,739 St. Louis 18,368.4 994.2 1,028 8,994.2 8,837.8 13,300 6,797 218,759 224,668 12,706 37,421 Minneapolis 7,480 700 4,700 ""ii",666"| 4,000 4,696 107,535 110,927 8,088 18,572 Kansas City 29,975.8 1,643.4 9,643.4 51,000 122,950 170;179 47,229 35,848.2 Dallas 6,918.7 516.6 522.8 5,516.6 522.8 7,000 4,000 58,220 66,693 8,473 7,397.9 San Francisco 15,533 15,017 35,000 15,417 60,000 41,000 104,568 128,706 24,138 21,088 Total 405,619.3 3,440.6 59,668.7 110,730.6 125,725.5 443,300 443,300 268,036 3,342,105 3,342,105 263,036 ! 420,614.2 Federal Reserve agents1 fund—Summary of transactions from April 19, 1918, to May 16, 1918, both inclusive. [In thousands of dollars.] With- Deposits Balance at Federal Reserve agent at— m la B e s n a t l t s a , t n A a c t p e e- r. dr w G aw i o t l h a d - ls. de G po o s ld its. f d o f r r e a t r w r a t a o n ls s- t t r h a f r n r o o s u m fe g r h s dr T w a o w it t h a a - l ls. de T p o o t s a i l ts. b M c u lo a s s i y n e e 1 o s 6 f s , 18,1918. bank. bank. 1918. Boston... 11,500 10,000 10,000 20,000 31,500 NewYork 25,000 40,000 40,000 65.000 Philadelphia 80,619 500 6,385 2,000 6,885 2,000 i 75^734 70,000 70,000 Richmond 27,000 2,500 2,50© 29,500 Atlanta 37,670 1,000 12,500 9,250 13,500 9,250 33,420 Chicago 160,315.5 500 26,962 15,540 27,462 15,540 148,393.5 St. Louis 34,903.6 7,809.8 8,000 7,809.8 8,000 35,093.8 Minneapolis... 24,500 1,000 4,000 5,000 19,500 Kansas City.. 42,360 8,000 8,000 34,360 Dallas.. 584 5,000 5,000 5,584 San Francisco 54,396 1,200 400 15,000 | 1,600 15,000 67,796 Total. 568,848.1 | 4,200 10,000 66,056.8 107,290 | 70,256.8 117,290 615,881.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

550 FEDERAL RESERVE BULLETIN. JUNE 1,1918. OPERATION OF THE FEDERAL RESERVE CLEARING SYSTEM, APRIL 16 TO MAY 15,1918. Ite i ( n m d a F s i e ly d d e r a a r v a w e l r n R a g e o e s n e ). r v b e a n ci k t s y Ite i e n m ra d s l i R s d t e r r i s a c e w t r v o n e u c t o s i n i t d y e b ( a d F n a e k i d l s - y Ite in m o s th d e r r a w di n st ri o c n ts ( b d a a n i k ly s average). Number. Amount. Number. Amount. Number. Amount. Boston 5,214 §17,029,311 42,795 S6,165,182 4,710 $7,795,226 New York 7,850 77,676,088 50,353 40,995,148 26,704 16,349,400 Philadelphia 13,631 20,779,211 24,702 3,759,149 11,845 12,356,958 Cleveland 2,021 5,074,976 27,358 19,592,562 2,294 4,281,935 Richmond 1,524 4,866,762 26,260 7,179,808 2,439 4,739,295 Atlanta 1,809 3,060,882 13,069 2,931,285 1,807 3,719,786 Chicago 8,538 23,131,000 24,362 6,916,000 2,131 924,000 S t. Louis 2,055 7,576,754 16,605 5,192,516 176 1,421,098 Minneapolis 2,422 6,974,504 13,203 1,429,761 916 1,299,722 Kansas City 2,084 7,751,273 17,432 9,629,021 841 3,414,888 Pallas 1,050 1,326,810 13,184 4,898,863 507 892,401 San Francisco 1,371 3,124,814 17,738 5,410,225 518 1,228,654 Totals: Apr. 16 to May 15,1918 49,569 178,372,385 287,061 114,099,520 54,888 58,513,363 Mar. 16 to Apr. 15,1918 55,034 159,441,188 271,506 98,201,962 53,725 53,391,691 Feb. 16 to Mar. 15,1918 51,408 153,701,375 259,531 113,134,162 51,259 48,556,709 Jan. 16 to Feb. 15,1918 46,207 153,847,568 227,312 80,248,466 44,654 42,852,372 Dec. 16,1917, to Jan. 15,1918 48,549 148,033,108 253,458 89,065,135 49,342 52,175,578 Nov. 16 to Dec. 15,1917 47,678 171,723,439 240,756 84,440,761 46,353 58,458,952 Oct. 16 to Nov. 15,1917 47,574 166,552,773 232,723 64,296,210 45,393 53,089,827 Sept. 16 to Oct. 15,1917 40,591 128,271,466 212,935 47,476,204 40,216 44,984,581 Aug. 16 to Sept. 15,1917 36,306 100,331,694 182.191 41,323,621 32,564 40,648,168 July 16 to Aug. 15,1917 36,727 98,075,919 175;625 40,353,278 31,273 37,981,022 June 16 to July 15,1917 38,476 109,722,256 182,622 41,004,720 33,941 46,762,698 May 16 to June 15,1917 37,898 97,322,883 179,193 3S,599,461 33,150 38,314,393 Apr. 16 to May 15,1917 33,767 87,370,859 171,093 36,473,163 33,428 36,836,934 Mar. 16 to Apr. 15,1917 31,162 60,288,002 168,607 32,666,959 32,008 34,693,542 Total (exclusive of items Items handled by both drawn on Treasurer of Items drawn on Treasurbank and branches United States) (daily) er of United States Number of Number of (daily average). average). (daily average). member nonmembanks in ber banks district. on par list. Number. Amount. Number. Amount. Number. Amount. Boston 52,719 §30,989,719 4,855 §2,729,112 414 249 New York 84,907 135,020,636 31,418 12,547,349 684 365 Philadelphia.. 50,178 36,895,318 4,500 1,848,904 627 319 Cleveland 1,214 $7,927,197 32,887 36,876,670 1,029 858,082 775 628 Richmond 429 1,524,419 30,652 18,310,284 1,136 351,544 540 287 Atlanta 289 174,229 16,974 9,886,182 2,240 2,408,636 397 320 Chicago 160 348,000 35,191 31,319,000 5,952 I 2,320,000 1,156 2,284 St. Louis 228 409,213 19,064 14,599,581 4,027 i 757,370 484 1,002 Minneapolis... 16,541 9,703,987 407 I 84,942 808 1,070 Kansas City... 3,240 3,675,041 23,597 24,470,223 2,588 I 430,470 967 1,559 Dallas 14,741 7,208,074 1,131 I 288,811 675 269 San Francisco. "2 ,"734" *1," 083," 505" 22,361 10,847,198 1,488 ! 6,302,965 1,123 Totals: Apr. 16 to May 15,1918 8,294 15,141,604 399,812 365,126,872 60,771 30,928,185 8,113 9,475 Mar. 16 to Apr. 15,1918 7,793 8,942,976 388,058 319,977,817 59,228 31,563,675 8,059 9,450 Feb. 16 to Mar. 15,1918 7,700 6,413,071 369,898 321,805,317 58,991 25,827,757 8,013 9,425 Jan. 16 to Feb. 15,1918 7,128 5,836,958 325,301 282,785,364 48,224 21,316,033 7,972 9,319 Dec. 16,1917, to Jan, 15,1918. 7,718 3,402,035 359,067 292,585,856 38,130 •21,116,293 7,909 9,268 Nov. 16 to Dec. 15,1917 334,787 314,623,152 33,806 I 27,179,053 7,823 9,321 Oct. 16 to Nov. 15,1917 325,690 283,938,810 30,426 17,496,974 7,826 9,210 Sept. 16 to Oct. 15,1917 293,742 220,732,251 26,797 13,518,566 7,747 9,052 Aug. 16 to Sept. 15,1917 251,061 182,303,483 23,492 11,006,515 7,718 8,934 July 16 to Aug. 15,1917 243,625 176,410,219 19,533 9,701,569 7,683 June 16 to July 15,1917 255,039 197,489,674 19,100 11,637,899 7,666 May 16 to June 15,1917 250,241 174,236,737 16,344 i 4,414,508 7,651 8,789 Apr. 16 to May 15,1917 238,288 160,680,956 15,925 I 3,597,865 7,634 8,926 Mar. 16 to Apr. 15,1917 231,777 127,648,503 12,582 I 2,643,408 7,625 8,607 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

.TUNE 1,1918. FEDERAL RESERVE BULLETIN. 551 DISCOUNT OPERATIONS OF THE FEDERAL RESERVE BANKS. Discount operations at the Federal Reserve maturity of the paper discounted by the Banks for the month of April totaled $2,178,- New York bank, 7.22 days, the like average 410,479, compared with $759,112,515 for March for all the banks works out at 11.25 days only, and $2,681,165,854 for October, 1917, the the Minneapolis bank, as in the case of the month preceding the closing of the second average discount rate, showing the highest av- Liberty loan. Of the total discounts for the erage under this head. Further particulars month under review, $1,811,419,864, or 83.2 per along these lines, also discussion of method used cent, was represented by war paper, including in computing these averages, are found on p. members7 collateral notes and customers' paper 553 of this BULLETIN. secured by Government war obligations, or con- On the last Friday of the month the banks siderably less than the corresponding amount held a total of 901.7 millions of discounted in October of 1917. Of the total amount of paper, as against an aggregate of 583.2 milwar paper discounted by the banks 75 per cent lions held on the last Friday in March and of is reported by the New York bank. 35 millions held on the corresponding date in Discounts of member banks' notes secured 1917. Of the total discounts on hand the by eligible paper totaled §34,233,979, the share of war paper, i. e., member banks7 col- Federal Reserve Banks at Chicago and Kansas lateral notes and customers' paper secured by City accounting for $29,052,395, or about United States war obligations, was 70.8 per 85 per cent, of the total shown. Trade cent. At the Boston bank this share was about acceptances discounted during the month 82 per cent and at the New York bank as high aggregated $10,171,425, nearly all in the do- as 87.5 per cent. In addition to the discounted mestic trade, reported by 11 banks. Other war paper, four banks report also about 4.2 discounts not secured by Government obliga- millions of certificates of indebtedness and Libtions totaled $323,359,411, the New York and erty bonds held under 15-day repurchase agree- Richmond banks reporting about 54 per cent ments with nonmember institutions and of the total. Fifteen-day paper, i. e., paper included with other holdings of United States maturing within 15 days from date of discount securities. with the Federal Reserve Bank, aggregated Trade acceptances on hand about the end $2,027,048,792, or about 93 per cent of the of April show the record total of 19.2 millions total discounts for the month. 7 of which about 1.5 millions represent the hold- By far the greater portion of the paper, ings of discounted foreign-trade acceptances. namely, 86.8 per cent, was discounted at 4 All the banks except Dallas report holdings of per cent, which was the uniform rate charged domestic trade acceptances, the Cleveland and by all the banks during the month on 15-day St. Louis banks leading in the amounts held. war paper, while the calculated, average rate Agricultural paper of all maturities totaled on paper discounted during the month b}^ all about 9.4 millions, or about 1 per cent of the Federal Reserve Banks was 4.23 per cent, the total discounts held, while live-stock paper aggrelowest average rate, 4.05 per cent, working gated 30.1 millions, over one-half of this amount out for the New York bank and the highest rate, 4.88 per cent, for the Minneapolis being reported by the Kansas City bank. bank. Owing largely to the short average Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

552 EEDEEAL RESERVE BULLETIN. JUNE 1,1918. Bills discounted during April, 1918, distributed by classes. Member banks' collateral Customers1 notes. paper secured Federal Reserve Banks. tI U c i b n e n b y r d i t o t e i e L f n b d i d c i t b e a s S d e t e t o r n a s t r e y t e s o s s f . L S i t S o b i e f t r e c i a c r u U t t a e r y t e n s e d b i c s t o e e b n o d r y f - ds O se th c e u r r w ed is . e acc T ep r t a a d n e ces. d A is l c l o o u th n e ts r . Total. indebtedness. Boston S3,746,698 816,372,800 SI, 523,850 S287,007 S3,563,599 330,493,954 New York 11,237,688 1,355,966,810 825,000 12,696,793 89,955,026 .,460,681,317 Philadelphia... 1,886,401 28,176,700 762.997 11,556,490 42,382,588 Cleveland 4,704,362 54,229,800 485.000 1,890,014 28,970,605 90,279,781 Richmond 15,472,498 82,804,243 1,634,500 1,063.149 84,081,663 185,056,053 Atlanta 29,847 20.192,300 51,000 436,300 13.159,086 33,868,533 Chicago 743,493 83,077,500 25,902,310 314,103 15,645,774 125,683,180 St. Louis 180,034 37,593,791 1,630,990 23,588,072 62,992,887 Minneapolis... 8,141 9,751,600 400.234 28,039 7,695,738 17,883,752 Kansas City... 133,516 35,695,725 3,150,085 15,111,288 54,774,500 Dallas 357,989 29,286,550 262,000 6,464,010 36,370,549 San Francisco. 76.078 19,695,300 378,147 17,793,860 37,943,385 Total ! 38,576,745 * 1,772,843,119 34,233,979 10,171,425 3322,585,211 2,178,410,479 i Including §221,104 in the foreign trade. 2 Includes $771,700 rediscounted for nonmember banks. 3 Includes SI,554,459 of bankers' acceptances. Amounts of discounted paper, including member banks' collateral notes, held by each Federal Reserve Bank on the last Friday in April, 1918, distributed by classes. [In thousands of dollars; i. e., 000 omitted.] Member banks' collateral Customers' notes. paper secured by Banks. Ag p ri a c p u e lt r u . ral Li p v a e p -s e to r. ck Un b L i o t i e n b d d e s r S t t y o a r tes S b e L o c i u n b r d e e s r d t y o b r y c T e r p a t d an e c a e c s - . d A is l c l o o u th n e ts r . Total. certificates United States Otherwise of indebted- certificates secured. ness. of indebtedness. Boston 34,462 10,133 500 11,284 7,928 54,307 81,914 297,933 154 2 3,324 50,931 434,256 Philadelphia . . 64 12,177 15 629 1 383 6,118 35 351 23 68 6,726 21,802 95 4,050 25,448 58,212 Pichmond 953 25 3,490 21,430 494 1,772 19,169 47,333 Atlanta 210 189 54 10 223 20 873 8,837 20 406 Chicago . 3,261 427 5,924 47,5Q8 15,954 610 14,779 88,553 St. Louis 90 96 1,772 22 924 2 974 15,800 43 656 Minneapolis 1,188 3,064 143 4 867 71 5 258 14 591 Kansas City . . . 624 15,355 239 14,745 2,319 2,154 8,476 43,912 Dallas 1,530 5,347 415 13 033 105 5,737 26 167 San Francisco 1,436 5,577 315 10,904 696 16,071 34,999 Total 9,379 30,148 147,631 491,221 19,641 19,171 184,552 901,743 Per cent 1.0 3.3 16.4 54.5 2.2 2.1 20.5 100.0 1 Includes 8287,000 in the foreign trade. 2 Includes $1,220,000 in the foreign trade. During the month, largely as the result of accession to membership of State banks and N m um em b b e e r r of N ba u n m k b s e d r i s o - f trust companies, the number of member banks Federal reserve district. b A a p n r k . s 3 o 0. n co d u u n ri t n in g g April. increased from 8,083 to 8,149. The total number of member banks accommodated through Boston 416 138 New York 684 278 discounts during April was 2,100, or 25.8 per Philadelphia.. 647 135 Cleveland 773 118 cent of the total number of members reported Richmond 542 181 Atlanta 400 112 at the end of the month. The following ex- Chicago 1,157 237 St. Louis 488 112 hibit gives the number of member banks by Minneapolis... 810 174 Kansas City... 974 221 Federal Reserve districts at the end of April Dallas 673 234 San Francisco. 585 160 and the number of discounting members for the same month: Total.... 8,149 2,100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL RESERVE BULLETIN. 553 AVERAGE RATE AND MATURITY OF PAPER DISCOUNTED BY THE RESERVE BANKS. Following the installation of tabulating ma- the average maturity in days is obtained. The chines, the Board is able for the first time to average rate is calculated by means of the show average maturities and average discount formula: rates of bills discounted during the month at Amount X rate X maturity (in days) ,. all Federal Reserve Banks. For the pur- dz^Wf^T ~ = dlsCount pose of calculating these averages the total whence, discounts for the month were arranged into , , discount X days in year eight groups, according to rates of discount N rate ^average; - t (foT5^) charged, and in each group the amounts of amount x maturi y Recalling that the amount discounted multipaper discounted and the corresponding unplied by the average maturity equals the earned discount were shown. For any such equivalent amount discounted for one day, the group the total unearned discount multiplied formula becomes: by the number of days in the year (365 in the case of the New York and Boston banks and . v discount X days in year 360 in the case of the other banks), divided by to equivalent amount discounted for one day. the rate gives the equivalent amount, which discounted at the specified rate for one day, In case the average maturity of the discounts yields the given discount. Having found for included in any discount rate group is desired, each rate group the equivalent amount when it may evidently be derived by dividing the discounted for one day, the sum of these re- equivalent amount, which discounted at the spective amounts is the like equivalent of the given rate for one day yields the discount for total discounts at each bank and the system. that group, by the corresponding total discount, Dividing this sum by the total paper discounted the result being the average maturity in days. Bills discounted by each Federal Reserve Bank during April, 1918, distributed by rales of discount; also average maturity and rate of bills discounted by each bank during the month. 3£ per cent. 4 per cent. 4J per cent. 4J per cent. 4f per cent. Federal Reserve Bank. Amount. Discount. Amount. Discount, Amount. Discount. Amount. Discount. Amount. Discount Boston |S2,692,000 S3,993.33 820,599,223 535,053.48 12,508,591 519,068.87 3296,807 82,252.61 33,582,581 $30,053.13 New York j 49,175.918 60,914.18 1,393,836,866 963,091.20 4,413,015 40,713.94 2,739,292 17,391.50 10.455,707 72,699.66 Philadelphia 2,442,400 3,541.55 36,418,786 51,294.47 555,281 4,941.31 1,120,515 9,042.70 l'843,152 9,100.64 Cleveland 3,037,500 4,267.63 60,729,862 79,153.81 12,441,985 24,935.32 6,259,884 48,274.30 7,762,755 66,088.97 Richmond 10,296,150 11, 978. 83 112,416,982 61,713.25 41,687,665 26,026.89 2,541,263 19,523.25 11,882,050 79,383.92 Atlanta 1,837,162 2,663.41 28,241,776 45,522.95 27,748 130.69 1,328.295 7,219.59 2,242,613 14,794.45 Chicago 5,866,079 7,903.29 J.05,670, 485 167,007.71 631,292 4,889.64 1,639;393 9,614.99 7,836,235 40,572.72 St. Louis 4,683,000 6,819.70 47,850, 033 76,493. 75 133,034 1,103.58 3,136,196 19,259.83 7,149,644 42,385.64 Minneapolis 289,000 230.88 10,887,102 18,580.33 8,14.1 87.46 1,386,406 7,723.06 2,421,655 14,376.23 Kansas City 4,886,253 7,061.72 34,957,739 50,692.49 28,000 149.69 3,417,736 20,910.74 6,521,991 52,422.90 Dallas 12,101,000 17,410.84 17,915,144 28,009.06 101,541 1,078.33 2,624,875 20,050.08 846.668 4,476.50 San Francisco 5,018,000_ 7,157.42 22,145,206 36,073.16 _lJ780,251_ 14,266.17 59,406.38 Total 108,324,462 139,942.78 1,891,669,204 1,610,685.66 62,536,293 123,125.72 28,270,913" 195,528. 82 69,912,029 485,761.14 5 per cent. 5J per cent. 5£- per cent. Total. Average Average Federal Reserve maturity rate(per Bank. ! Amount. Discount, i Amount, Discount, Amount. Discount. Amount. Discount. in days. cent). Boston | 3814,752 87,374.89 §30,493,954 397,796.31 27.16 4.31 New York- 60,519 1,833.98 1,460,681,317 1,162,644.46 7.22 4.05 Philadelphia.. 2,454 53.41 42,382,588 77,974.03 18.08 4.12 Cleveland 13,761 204.39 834,034 8637.33 90,279,781 223,561.75 20.61 4.33 Richmond 231,943 5,285.87 185,056,053 203,912.01 9.12 4.33 Atlanta 190,939 4,125.31 33,868,533 74,456.40 18.83 4.20 Chicago 3,582,178 37,926.19 §457,518 38,946.58 125,683,180 276,861.12 18.63 4.26 St. Louis 40,980 890.16 62,992,887 146,952.66 19.83 4.24 Minneapolis.. 1,311,420 13,557.99 1,580,028 ! 39,577.45 17,883,752 92,133.40 38.01 4.88 Kansas City. 4,962,781 103,613.21 54,774,500 234,850.75 33.61 4.59 Dallas .". ! 2,190,182 30,425.01 591,139 , 13,201.05 •36,370,549 114,650.87 24.78 4.39 San Francisco ! 3,150 84.22 W® 800 ! 3656638 37,943,385 153,553.73 31.69 4.60 Total j 13,360,929 204,400.25 j 37,184 721.55 4,299,465 ; 99,181.62 2,178,410,479 2,859,347.54 11.25 14.23 i Average discount rate on all paper discounted works out at 4.20 per cent, if calculated on a uniform 360-day basis, and at 4.26, if calculated on a uniform 365-day basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

554 FEDERAL RESERVE BULLETIN. JUNE 1,19.18. Acceptances bought in open market and held by Federal Reserve Banks as per schedules on file with the Federal Reserve Board, or as reported by the Federal Reserve Banks on dates specified, distributed by classes of accepting institutions. Bankers' acceptances. Trade acceptances Date. M ba e n m k b s e . r N co o m n t m r p u e a s m n t ie b s e . r N b b e o r a n n m S k t e a s m . te - P b r a i n v k a s te . b F r b a o a a n r n e n c d i k h g e n s Total. b m ou o a p g r e k h n e t t i . n acce T p o ta ta n l ces. agencies. 1915. Feb. 22. S93,000 ! §93,000 893,000 Apr. 5.. 3,653,000 j $7,820,000 810,000 3110,000 11,593,000 11,593,000 July 3.. 4,342,000 5,267,000 161,000 9,770,000 9,770,000 Oct. 4.. 9,000,000 4,898,000 132,000 343,000 14,373,000 14,373,000 1916. Jan. 3.. 15,494,000 7,160,000 362,000 822,000 23,838,000 23,838,000 Apr. 3. 21,000,000 13,572,000 473,000 3,262,000 38,308,000 $722,000 39,030,000 July 3. 32,989,000 18,921,000 471,000 11,830,000 64,211,000 3,422,000 67,633', 000 Oct. 2. 37,798,000 21,782,000 712,000 9,944,000 70,236,000 2,306,000 72,542,000 1917. Jan. 1 66,803,000 34,625,000 1,502,000 18,224,000 121,154,000 4,585,000 125,739,000 Apr. 2 43,979,000 20,328,000 689,000 16,830,000 8200,000 82,026,000 1,144,000 83,170,000 July 14-16. 108,597,000 30,390,000 3,333,000 38,082,000 3,805,000 184,785,000 4,660,000 189,445,000 Sept. 29... 131,997,000 14,987,000 2,193,000 21,708,000 2,286,000 173,171,000 6,942,000 180,113,000 Dec. 31.... 227,717,000 8,163,000 3,179,000 20,137,000 7,657,000 266,853,000 6,383,000 273,236,000 1918. Jan. 31.. 240,259,000 5,547,000 3,522,000 22,099,000 6,947,000 278,374,000 6,363,000 284,737,000 Feb. 28. 252,747,000 1,648,000 3,856,000 28,419,000 7,097,000 293,767,000 5,456,000 299,223,000 Mar. 31. 275,144,000 1,360,000 1,884,000 31,779,000 8,562,000 318,729,000 8,015,000 326,744,000 Apr. 30. 248,390,000 654,000 2,907,000 25,921,000 10,304,000 288,176,000 19,279,000 297,455,000 1 Includes 8128,000 of acceptances in the domestic trade. Acceptances bought in open market and held by each Federal Reserve Bank on Apr. SO, 1918, distributed by classes of accepting institutions. [In thousands of dollars; i. e., 000 omitted.] Federal reserve bank. M ba em nk b s e . r N b p e o c a r n o n m t m i r e e u - s m s . t - N b b e o r a n n m S k t e a s m . te - P b r a i n v k a s te . b a F g b ra o e a a n r n n n e c c k d i h i g s e e , n s s . , Total. D T o r m ad e e st i a c o c . p ce e F p n o t r a m e n i c a g e r n k s . e b t o . u T g o h t t a l i . n a a T c n c o c e t e p a s l t . - Boston 14,293 30 1,834 575 16,732 844 844 17,576 New York SO,775 156 2,028 19,780 8,716 120,455 1,476 1,476 121,931 Philadelphia 23.036 50 346 670 315 25,317 52 27 79 25,396 Cleveland 18; 025 200 700 480 19,405 76 177 253 19,658 Richmond 4,933 4 933 4,933 Atlanta <S,112 25 261 8 398 .8,398 Chicago 46,177 200 50 1,211 47,63S 47,638 St. Louis. 10.097 375 299 11,371 f 11,371 Minneapolis 10' 995 16 47 11 052 11.052 Kansas City 5,140 5 140 5,140 Dallas 4,455 4,455 4,455 San Francisco 11,852 8 83 1,119 218 13,280 6,627 6,627 19,907 Total 248,390 654 2,907 25,921 10,304 288,176 128 9,151 9,279 297,455 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 555 Amounts of bills discounted and acceptances and warrants bought by each Federal Reserve Bank during April 1918, t distributed by maturities. 15-day maturities. 30-day maturities. Discounts. Acceptances. Warrants. Total Discounts. Acceptances. Warrants. Total Boston §22,463,915 §399,472 522,863,387 SI, 679,924 §396,690 82,076,614 New York 1,435,115,707 1,336,022 1,436,451,729 3,508,531 3,735,003 7,243,534 Philadelphia 38,470,531 38,470,531 1,169,662 1,050,000 2,219,662 Cleveland 65,175,448 62,247 65,237,695 2,418,578 209,086 2,627,664 Richmond 169,529,130 200,000 169,729,130 2,797,187 1,495,207 4,292,394 Atlanta 29,866,109 200,000 30,066,109 1,001,917 130,000 532,270 1,164,187 Chicago 111,405,740 510,000 111,915,740 2,649,097 971,500 3,620,597 St. Louis 52,177,346 25,049 52,202,395 3,702,334 293,281 3,995,615 Minneapolis 11,170,601 11,170,601 669,191 417,254 1,086,445 Kansas City 39,610,458 39,610,458 1,713,413 1,713,413 Dallas 29,774,697 150,000 29,924,697 655,946 285,000 940,946 San Francisco 28,114,110 28,114,110 518,980 1,470,252 1,989,232 Total | 2,032,873,792 | 2,882,790 2,035,756,582 22,484,760 10,453,273 32,270 32,970,303 60-day maturities. 90-day maturities. Discounts. Acceptances. Warrants. Total. Discounts. Acceptances. Warrants. Total. Boston 81,805,733 63,888,423 35,694,156 S3,977,320 S3,699,479 §7,676,799 New York.... 8,996,623 9,688,863 18,685,486 12,997,341 43,192,866 | 56,190,207 Philadelphia.. 999,088 5,231,332 6,230,420 1,660,853 4,096,995 5,757,848 Cleveland 5,304,905 779,533 6,084,438 17,001,927 2,483,023 I 19,484,950 Richmond 7,074,651 3,339,849 10,414,500 5,320,471 3,302,269 I 8,622,740 Atlanta 1,655,560 1,744,451 3,400,011 1,154.876 1,341,198 326,000 i 2,522,074 Chicago 7,125,084 1,098,500 8,223,584 4,045; 741 4,505,164 8,550,905 St. Louis 3,772,113 628,866 4,400,979 3,239,648 811,794 ! 4,051,442 Minneapolis.. 3,121,582 1,090,293 4,211,875 1,328,863 485,000 I 1,813,863 Kansas City.. 3.921,187 3,921,187 4,587,988 100,000 i 4,667,988 Dallas i;683,212 1,475,000 3,158,212 2,922,304 1,370,000 i 4,292,304 San Francisco 1,886,004 2,551,610 4,437,614 5,791,342 3,562,650 i 9,353,992 Total... 47,345,742 31,516,720 78,862,462 64,008,674 i 68,950,438) 26,000 j 132,985,112 Over 90-day maturities. Total. Per cent. Discounts. A a c n c c e e p s t . - r W an a t r s - . Total. Discounts. Acceptances. r W an a t r s - . Total. co D u i n s- ts. A a e n c c e e p s t . - r W an a t r s - . Total. Boston S567,062 3555,000 81,122,062 830,493,954 88,939,064 839,433,018 77.3 22.7 100 New York 63,115 63,115 1,450,681,317 57,952,754 1,518,634,071 96.2 3.8 100 Philadelphia.. 82,454 443,000 525,454 42.382,588 10,821,327 53,203,915 79.7 20.3 100 Cleveland 378,923 30,309 409,232 90)279,781 3,564,198 93,843,979 96.2 3.8 100 Richmond 334,614 667,500 1,002,114 185,056,053 9,004,825 194,060,878 95.4 4.6 100 Atlanta 190,071 243,075 433,146 33,868,533 3,658,724 §58,270 37,585,527 90.1 9.7 .2 100 Chicago 457,518 1,600,000 2,057,518 125,683, ISO 8,685,164 134,368,344 93.5 6.5 100 St. Louis 101,446 22,265 123,711 62,992,887 1,781,255 64,774,142 97.3 2.7 100 Minneapolis... 1,593,515 1,593,515 17,883,752 1,992,547 19,876,299 90.0 10.0 100 Kansas Citv... 4,961,454 150,000 5,111,454 54,774,500 250,000 55,024,500 99.5 .5 100 Dallas ." 1,334,390 1,334,390 36,370,549 3,280,000 39,650,549 91.7 8.3 100 San Francisco. 1,632,949 1,632,949 37,943,385 7,584,512 45 .127.897 83.3 16.7 100 Total....11,697,511 3,711,149 15,408,660 2,178,410,479 117,514,370 58,270 2,295,983,119 94.9 1 5.1 100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

556 FEDERAL EESERVE BULLETIN. JUNE 1,1918. Maturities of discounts, acceptances, and municipal warrants held by each Federal Reserve Bank on Apr. 26, 1918. 1 to 15 days. 16 to 30 days. 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. B co il u l n s t d e i d s . - A b 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 $15,997 32,071 $18,068 $27,891 SI,944 I 829,835 Now York 387,656 10,790 348,446 58,606 15,030 | 73,636 Philadelphia.. 20,892 5,949 26-841 10,149 6,649 | 16,798 Cleveland 30,649 7,133 37,782 9,236 4,754 13,990 Richmond 29,339 2,078 31,417 6,551 714 7,265 Atlanta..., 15,630 3,259 $35 18,924 1,974 1,805 3,779 Chicago 73,713 5,030 5 78,748 4,362 12,734 17,096 St. Louis 31,602 2,879 34,481 3,638 2,964 6,602 Minneapolis... 7, 132 2,512 9,644 1,35S 5,183 6,541 Kansas City... 22,311 4, 72S 27,039 5,445 1,969 7,414 Dallas 15,369 1,350 16,719 2,040 760 2,800 San Francisco. 18,679 6,703 25,382 3,644 4,451 8,095 Total. 618,969 54,482 40 673,491 134,894 58,957 \. 193,851 Percent 55.9 16.1 31 to 60 days. 61 to 90 days. c B o il u l n s t d e i d s . - bought. M wa u r n r i a c n ip t p s a ' l j T t j c B o il u l n s t d e i d s . - b A a o c n u c c g e e p h s t t - . ! w M a u r n r i a c n ip ts a , l i i Total. Boston $7,853 S9,580 $17,433 82,565 S3,011 $5,576 New York 27,290 59,919 87,209 10,652 35,288 45,940 Philadelphia.. 3,208 9,601 12,809 1,100 4,104 5,204 Cleveland 11,086 6,591 17,677 7,211 2,150 9,361 Richmond 7,846 1,043 8,889 3,355 1,342 4,697 Atlanta 1,959 2,711 $27 4,697 662 1,222 1,884 Chicago 1,974 22,720 24,694 6,000 7,518 13,518 St. Louis 6,362 4,632 10,994 2,007 906 2,913 Minneapolis... 3,694 3,366 7,060 1,153 485 1,638 Kansas City... 6,277 185 6,462 4,267 250 4,517 Dallas 3,740 1,925 486 6,151 3,277 520 3,797 San Francisco. 6,396 7,579 13,975 4,626 2,757 7,383 Total.. 87,685 129,852 513 218,050 46,875 59,553 106,428 Percent 18.1 8.8 I Over 90 days. Total. c B o il u l n s t d e i d s . - A b a o c n u c c g e e p h s t t - . p M r a a l u n n w t i s c a . i r - - Total. c B o il u l n s t d e i d s . - b A a o c n u c c g e e h p s t t - . p M r a a l u n n w t i s c a . i r - - Total. c B o il u l n s t d e i d s . - b A a o c n u c c g e e h p s t t - . p M r a a l u n n w t i s c a . i r - - Total. Boston $1 $54,307 $16,606 $70,913 76.6 23.4 100 New York 52 434,256 121,027 555,283 78.2 21.8 100 Philadelphia... 2 35,351 26,303 61,654 57.3 42.7 100 Cleveland 30 58,212 20,628 78,840 73.8 26.2 100 Richmond 242 47,333 5,177 52,510 90.1 9.9 100 Atlanta 181 20,406 8,997 $63 29,466 69.3 30.5 0.2 100 Chicago 2,504 88,553 48,002 5 130,560 64.8 35.2 100 St. Louis 47 43,656 11,381 55,037 79.3 20.7 100 M Ka i n n s n a e s a p C o i l t i y s . . . . . . 5 1 t , , * 6 25 1 4 2 4 1 3 4 , ,5 9 9 1 1 2 1 7 1 , ,5 1 4 3 6 2 2 5 6 1 , ,0 1 4 3 4 7 5 8 5 6. . 0 8 4 1 4 4 , , 2 0 1 1 0 0 0 0 Dallas 1,741 26,167 4,555 31,208 83.8 14,6 1.6 100 San Francisco. 1,654 34,999 21,490 56,489 62.0 38.0 100 Total. 13,320 13,321 901,743 302,844 554 1,205,141 Per cent... 1.1 100 74.8 25.1 0.1 100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 557 Liberty loan bonds and United States certificates of indebtedness purchased under repurchase agreements during the month oj April, 1918. [Figures included with United States securities in table showing total investment operations.] New York. Phila- Cleveland. Atlanta. Chicago. Minne- Kansas Dallas. F S ra an n- Total. delphia. apolis. City. Cisco. Liberty bonds $5245,000 $1,844,800 §2,089,800 Certificates of indebtedness 5232,020,000 4,573,000 86,724,000 2,205,100 11825,733,200 §2,131,000 $17,000 $763,000 S62,500 1274,228,800 Total 232,020,000 4,818,000 6,724,000 4,049,900 25,733,200 2,131,000 17,000 763,000 62,500 276,318,600 i Includes Liberty bonds purchased by the Chicago bank under repurchase agreements. Total investment operations of each Federal Reserve Bank during the month of April, 1918 and 1917. Bills bought in open market. Municipal warrants. Bills discounted for members Federal Reserve Bank. and Federal Bankers' Trade .ReserveBanks. acceptances. accept- Total. City. State. All other. Total. Boston , 830,493,954 88,939,064 $8,939,064 New York 1,460,681,317 57,209,781 §742,973 57,952,754 Philadelphia 42,382,588 10,742,322 179,005 10,821,327 Cleveland 90,279,781 3,384,061 2 180,137 3,564,198 Richmond , 185,056,053 9,004,825 9,004,823 Atlanta 33,868,533 3,658,724 3,658,724 S32,270 $26,000 $58,270 Chicago , 125,683,180 8,685,164 8,685,164 St. Louis 62,992,887 1,781,255 1,781,255 Minneapolis 17,883,752 1,992,547 1,992,547 Kansas City 54,774,500 250,000 250,000 Dallas , 36,370,549 3,280,000 3,280,000 San Francisco 37,943,385 4,604,045 2,980,467 7,584,512 Total, April, 1918 2,178,410,479 113,531,788 3,982,582 117,514,370 32,270 26,000 58,270 Total, April, 1917 50,055,801 41,019,251 293,440 41,312,691 266,433 13,853 280,286 Total investment opera- United States securities. tions. Federal Reserve Bank. United 2 per cent. 3 c p e e n r t. 3 c 1- e n p t e . r 4 c p e e n r t. T n 1 r - o e y t a e e s a s u . r ry, o c f e r i S t n i t d f a i e t c e b a s t te e s d- Total. April, 1918. April, 1917.* ness. Boston $39,433,018 194,509 New York §232,088,000 8232,088,000 ,750,722,071 126,638 Philadelphia §245,000 7,712,500 7,957,500 (51,161,415 780,935 Cleveland 9,214,500 9,214,500 103,058,479 367,954 Richmond 194,060,878 850,227 Atlanta $467,000 1,577,900 i 2,205,100 4,250,000 41,835,527 638,069 Chicago , j i 425,888,200 25,888,200 160,255,544 113,932 St. Louis 64,774,142 ,188,527 Minneapolis 272,850 671,150 | i 32,970.000 33,920,000 53,793,299 177,577 Kansas City 1,334;500 1,334,500 56,359,000 089,700 Dallas ". 973,000 973,000 40,623,549 333,321 San Francisco 5,250 400 I j 3,019,500 3,025,150 48,553,047 ,877,429 - Total, 1918. 745,100 2,494,450 i I 315,411,300 318,650,850 2,614,633,969 Total, 1917. 82,867,040 S3,000 j SI, 220,000 \ 4,090,040 95,738,818 1 $31,824 in the domestic trade. 3 Exclusive of purchases of United States certificates of indebtedness. 2 §109,345 in the domestic trade. * Includes United States bonds purchased under repurchase agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

558 FEDERAL RESERVE BULLETIN. JUNK 1,1018. United States securities held by each Federal Reserve Bank on Apr. 30, 1918, distributed by maturities. United States bonds with circulation O ther United States securities including 1 year Treasury Notes and privilege. Treasury Certificates of Indebtedness available as security for Federal Reserve bank notes under Silver Act of April 23,1918. Federal Reserve Banks. 2 o c p f o e n r 1 s 9 o c 3 e l 0 s . nt 1 P 9 a 3 2 c n 6 e p o a - n 1 f e m 9 t r 3 a 8 s . I ! j | 3 l p 1 o e 9 a r n 1 c 8 o e . f nt 4 l p o 1 e a 9 r n 2 5 c o . e f nt 3 b 1 c p o 9 o s e n 4 n i r 6 o d v - c n s e 4 e r 7 o n - . f t 3 T p n r 1 e e - o y a r t s e e c u a s e . r r n y t lo 3 1 c a 9 e p 6 n n 1 e t o . r f 31 L > lo i 1 p b a 94 e n e 7 r r o . t c f y ent4 1 L 9 l p 4 o i e 2 b a r - n e 1 c r o 9 e t 4 f y n 7 t . c i T e n r r d n t e i e e f a o b i s s f c t s u a e . r t d y e - s Total. -| Boston $750 i! i 3529,000 §1,416,000 §60,000 8141,450 85,000 $2,152,200 New York 50 So6,666 j 1,255,400 2,226,000 268,250 15,003 93,000 3,907,700 Philadelphia , $100 549,200 1,537,000 11,850 1,419,250 2,397,500 5,914,900 Cleveland 2,"653," 660* I "S2,*378," 2o6" 414,800 2,660,000 1,966,900 374,550 8,444,000 18,892,110 Richmond 915,100 237,000 1,513,000 42,850 37,750 10,000 2,755,700 Atlanta 440,600 21,000 I6,"3o6" 1,141,000 13,650 241,750 85,000 1,953,300 Chicago 1,862,500 367,300 2,581,000 1,768,000 427,400 2,962,000 $400 83,050 11,799,000 11,850,650 St. Louis 100 1,080,000 1,153,300 511,000 2,744,400 Minneapolis , 304,300 i6,260 1,199,180 2 ,5 114,800 880,000 500 109,500 45,550 646,500 3,522,840 K Da a l n la sa s s City 2 7 , , 4 1 5 5 0 5 , , 9 85 0 0 0 2 2 8 2 1 , , 2 5 4 0 0 0 825,000 1,2 8 3 3 3 8 , , 6 5 0 0 0 0 1 1 , , 4 3 3 7 0 4 , , 0 0 0 0 0 0 7 1, , 1 5 0 0 0 0 1 2 3 , , 5 1 0 0 0 0 3 1 , , 2 2 7 0 6 2 , , 0 0 0 0 0 0 1 6 3 , , 6 5 0 1 1 2 , , 6 1 0 9 0 0 San Francisco , 2,428,750 1,500,000 21,500 10,850 473,000 4,434,100 Total 15,558,900 i 945,400 7,563,840 5,177,450 6,526,300 19,150,000 900 2,501,100 2,384,800 j 18,431,000 78,241,690 i Includes United States bonds purchased from banks under 15-day repurchase agreements. Total United States bonds with circulation privilege, §29,245,590. Other United States securities, §43,996,100. Number of banks and of other subscribers, also amounts subscribed, to the 6 issues of certificates of indebtedness preceding the third Liberty loan. National banks. State banks. Trust companies. Other banks. Federal Reserve Num- Per Num- Per Num- Per Num- Per Bank. be sc r ri s b u - b- t c o e t n a t l o in f Amount. be sc r r s ib u - b- t c o e t n a t l o in f Amount. be sc r r s ib ub - - t c o e t n a t l o in f Amount. be sc r r s ib u - b- t c o e t n a t l i o n f Amount. ing. district. ing. district. ing. district. ing. district. Boston 350 88.16 3136 172 500 193 75.40 372 472,500 70 17 16 25 709 000 New York 579 92.94 723,314,500 208 90.83 §90,233,000 182 91.92 407,380,000 71 39.66 10,660,000 Philadelohia 578 90 31 123 319 500 200 68 26 61 990 000 MO 45 56 8 685 000 Cleveland 737 98.53 139,810,500 787 94.36 36,204,000 219 94.80 60,636,50C Richmond.. 342 64.04 43,115,000 448 34.57 15,521,000 71 36.41 17,058,000 Atlanta 332 87.36 44,019,000 843 52.43 34,502,000 7 70.00 713,500 Chicago... 914 77.85 159,931,000 3,627 84.17 1 159,875,000 St Louis 458 97.03 64,025,500 1,623 74.04 46,194,000 176 78.22 20,281,500 119 50.85 2,566,500 Minneapolis 469 60.91 54,223,500 1,178 40.55 32,468,000 Kansas City 838 89.53 80,274,500 2,066 67.63 33,781,500 52 61.90 8,593,000 ........ Dallas 65,964,000 122,790,500 2,740,500 •San Francisco ""*497" "*92."72" 93,969,500 """823" " "67." 96"" "50," 566," 500" 72" "77." 42* 23,145,000 Total 1,718,139,000 339,470,000 854,935,500 .... 30,361,000 Individuals, corporations, etc. Total. Number Federal Reserve Bank. SNumber Number v o i f d u in a d ls i- , subscrib- Amount. of banks Per cent corpora- Amount. ing. subscrib- of total. tions, ing. etc., subscribing. Boston.. . 12 $63,000 613 57.77 12 3214,417,000 New York 170 23,720,500 1,040 84.63 170 1,255,308,600 Philadelphia 14 8 2,505,500 896 75.17 148 196,500,000 Cleveland... 49 1,382,500 1,743 96.14 49 238,033,500 Richmond 8 135,500 861 40.52 8 75,829,500 Atlanta 14 338,500 1,182 82.43 14 79 573 000 Chicago 189 5,549,000 4,541 82.82 189 325,355,000 St. Louis .. 18 517,000 2,376 76 07 18 133 584 500 Minneapolis 164 2,498,000 1,647 44.83 .,164 2 89,350,000 Kansas City .. 502 5,875,500 2,958 72.53 502 128,524,500 Dallas 9,430,000 90,925,000 San Francisco 228 5,109,500 1,392 75.65 228 172,790,500 Total 57,124,500 3,000,190,500 1 Include figures for State banks. 2 Includes 3160,500 purchased by the Federal Reserve Bank of Minneapolis. NOTE.—Figures by the several classes of banks are only approximately correct, since in some States no distinction is made between the several •classes of banks operating under State laws. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL BEBEEVE BULLETIN. 559 RESOURCES AND LIABILITIES OF FEDERAL RESERVE BANKS. Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system at close of business on Fridays, May 3 to 24, 1918. RESOURCES. [In thousands of dollars; i. e., 000 omitted.] Boston. York. d P el h p i h la i - a. C la le n v d e . - m R o ic n h d - . la A n t t - a. Chicago. Lo S u t. is. M ap i o n l n is e . - K C a i n t s y a . s Dallas. F S r a a n n- Total. cisco. Gold coin and certificates in vault: May 3 9,688 345,677 9,176 26,547 6,369 6,490 30,053 1.604 14,027 358 5,063 27,780 482,832 May 10 10,393 345,459 9,285 23,050 6,417 6,604 30,622 2;019 11,857 337 5,153 29,384 480,58C May 17 5,276 348,267 9,190 24,645 6,336 6,615 28,878 2,212 10,738 554 5,205 31,613 479,529 May 24 2,879 351,319 9,167 25,633 6,369 6,633 28,276 1,906 8,371 360 5,405 32,142 478,460 Gold settlement land, Federal R e s e r v e Board: MayS 60,554 78,084 53,022 51,805 9,388 13,903 81,512 18,537 11,184 32,730 6,135 20,917 437,771 May 10 61,046 68,797 57,572 49,274 14,710 11,162 61,036 23,118 14,098 45,793 7,054 23,784 437,444 May 17 60 985 39,336 52,729 60,844 18,710 10,008 80,016 32,421 18,572 21,371 7,397 15,888 418,337 May 24 60,927 39,583 40,537 54,514 23,224 15,224 81,869 23,784 18,520 23,344 8,438 17,773 407,767 Gold with foreign agencies: Mav3 3,675 18,112 3,675 4,725 1,837 1,575 7,350 2,100 2,100 2,625 1,838 2,888 52,500 May 10 3,675 18,112 3,675 4,725 1,837 1,575 7,350 2,100 2,100 2,625 1,838 2,888 52,500 May 17 , 3,675 18,112 3,675 4,725 1,837 1,575 7; 350 2 100 2,100 2,625 1,838 2,888 52,500 May 24 3,675 18,112 3,675 4,725 1,837 1,575 7,350 2,100 2,100 2,625 1,838 2,888 52,50() Gold with Federal Reserve agents: May 3 48,166 238,514 82,702 95,940 31,321 31,369 141,601 29,734 35,007 45,126 14,248 68,568 862,290 May 10 , 48,116 248,154 83,735 100,073 31,200 33,354 146,376 29,037 34,875 37,032 19,220 73,855 885,027 May 17 , 63,213 247,839 82.796 98,204 31,096 37,345 148,713 42,003 34,804. 36,979 19,193 73,351 915,536 May 24 , 63,163 247,502 83;661 107,630 32,957 37,838 152,251 41,131 34,672 36,936 19,163 73,277 930,181 Gold redemption fund: May 3 2,000 9,945 2,500 553 996 1,543 1,665 1,537 1,702 1,263 29 24,541 May 10 2,000 12,500 2,500 917 1,685 1.768 1,529 1,773 788 1,262 167 27,584 May 17 2,000 12,500 3,000 855 1,048 11986 1,722 1,902 777 1,260 16 28,502 May 24 2,000 12,500 3,000 1,177 755 1,799 2,090 1,715 1,984 758 1,259 78 29,115 Total gold reserves: May3 124,083 690,332 151,075 179,570 49,911 54,880 262,181 53,512 64,020 81,647 28,547 120,182 1,859,940 May 10 125,230 693,022 156,767 177,817 55,081 54,380 247,152 57,803 64,703 86,575 34,527 130,078 1,883,135 May 17 135,149 666,054 151,390 189,254 58,834 57,251 266,943 80,458 68,116 62,306 34,893 123,756 1,894,404 May 24 132,644 669,016 140,040 193,709 65,142 63,069 271,836 70,636 65,647 64,023 36,103 126,158 1,898,023 Legal tender notes, silver, etc.: May 3 2,067 44,796 1,585 500 374 863 4,485 1,853 70 347 2,797 60,043 May 10 2,484 42,881 1,469 549 398 802 5,572 1,835 105 296 2,778 ' 196 59,365 May 17 2,561 42,865 1,324 629 426 717 4,520 1,692 67 294 2,850 363 58,308 May 24 2,709 41,658 1,291 482 441 942 4,980 1,771 133 415 2,909 58,033 Total cash reserves: May 3 126,150 735,128 152,660 180,070 50,285 55,743 266,636 55,365 64,090 81,994 31,344 120,488 1,919,983 May 10 127,714 735,903 158,236 178,366 55,479 55,182 252,72-i 59,638 64,808 86,871 37,305 130,274 1,942,500 May 17 137,710 708,919 152,714 189,883 59,260 57,968 271,463 82,150 68,183 02,600 37,743 124,119 1,952,712 May 24 135,353 710,674 141,331 104,191 65,583 64,011 276,816 72,407 65,780 64,438 39,012 126,460 1,956,050 Bills discounted for members and Federal Reserve Banks: May 3 52,082 401,092 39,308 54.888 51,201 24,194 83,868 40,245 17,058 46,404 26,518 36,584 873,442 May 10 50,265 450,024 38,429 So] 149 51,637 24,073 87,882 43,852 20,910 51,325 27,705 37,790 939,041 May 17 36,049 368,714 36,276 64,104 46,333 21,303 83,989 29,150 22,024 69,067 27,133 38,123 842,265 May 24 41,277 442,175 40,690 54,018 46,058 23,814 80,771 30,814 24,051 71,577 28,160 I 39,894 923.299 Bills bought in open market: May3 18,618 124,463 23,933 18,022 5,020 8,027 47,356 10,944 10,684 3,507 4,960 21,495 297,029 May 10 18,862 126,650 25,727 14,417 5,695 6,885 45,665 8,999 10,128 2,604 1,555 18,849 286,036 May 17 21,037 130,439 26,956 13,480 1,893 5,567 42,627 7,697 7,116 2,041 845 ! 20,188 279,886 May 24 22,314 138,983 23,438 10,827 2,494 4,569 41,011 6,955 4,745 1,446 770 20,669 278,221 United States Government long-term securities: May 3 731 1,586 1,905 7,7b» 1,233 727 7,691 2,233 1,996 8,863 3,969 ! 2,461 41,183 May 10 616 1,577 1,347 7,800 1,234 7,161 2,233 1,915 8,865 3,981 I 2,461 40,110 May 17 616 1,575 1,347 7,800 I 1,234 726 7,335 2,233 1,869 8,864 3,981 ! 3,461 41,041 May24 616 2,756 1,347 7,800 1,234 730 7,200 2,233 1,845 3,981 i 3,461 42,067 United States Government short-term securities: May 3 1,421 2,519 3,409 11,211 1,523 1,314 3,638 511 1,490 4,644 2,632 2,060 36,378 May 10 1,421 77,335 2,390 9,337 1,523 1,324 3,517 511 1,217 4,571 1,896 ! 1,720 106,762 May 17 1,421 43,475 2,330 9,387 1,523 1,205 3,165 511 1,430 4,433 1,936 I 2,227 73,043 May 24 1,421 3,475 2,321 9,822 1,523 1,205 3,189 511 1,314 4,398 1,750 I 1.547 32,476 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

560 EEDEEAL BESERVE BULLETIN". JUNK 1, 1018, Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system at close of business on Fridays, May S to 24, 1918—Continued. RESOURCES—Continued. [In thousands of dollars; i. e., 000 omitted.] m Y N o ew rk. d P el h p i h la i - a. C la le n v d e . - m R o ic n h d - . la A n t- ta. Chicago. Lo S u t. is. M ap i o n l n is e . - K C a i n ty sa . s Dallas. F S r a a n n- Total. Boston. All! other earning May 3 246 425 218 72 1,432 61 2,537 May 10 55 231 201 152 35 1,135 35 1,844 May 17 53 124 122 23 1,131 39 1,492 May 24 53 90 58 23 823 20 1,151 Total earning assets: 72,852 529,660 68,555 91,909 58,977 34,345 142,799 54,358 31,452 63,490 39,511 62,661 1,250,569 May 10 71,164 655,586 67,893 86,703 60,089 33,263 144,456 55,796 34,322 67,400 36,272 60,855 1,373,799 May 17 59,123 544,203 66,909 94,771 50,983 28,854 137,116 39,715 32,561 84,428 64,038 1,237,727 May 24 85,628 587,389 67,796 82,467 51,309 30,371 132,261 40,571 32,039 86,308 35,484 65,591 1,277,214 Due from other Federal Reserve Banks, net: ! May 3 821 1,683 4,403 4,130 3,767 7,280 23,080 May 10 8,202 8,816 21,599 6,281 7,972 6,494 May 17 427 1,856 10,159 7,870 4,032 6,420 1 1.882 May 24 3,746 i 10,484 12,897 5,959 2,263 1,570 114; 033 Uncollected items: May 3 26,526 !85,105 48,278 33,397 27,955 27,247 51,027 36,078 10,392 19,276 16,761 17,643 399,585 May 10 i 23,216 i 77,358 42,860 49,701 41,194 29,175 50,307 49,643 14,638 38.104 18,072 27,952 482,220 May 17 | 33,843 i 73,208 40,818 37,171 27,884 21,201 45,854 43,383 8,423 16', 728 15,915 19,983 384,391 May 24 | 22,506 !69,355 42,869 42,338 23,558 41,269 30,190 9,599 22,218 17', 864 17.488 365,440 Total deductions from ! gross deposits: i May3 1 27,147 85,105 48,278 33.397 29,638 ' 27,247 55,430 40,208 14,159 26,556 16,761 17,643 376,605 May 10 i 24,914 77,358 42.860 57; 903 41,194 37,991 71,906 58;139 20,9.19 46,076 18,072 27,952 455,726 May 17 j 33,843 73,635 42i674 37,171 27; 884 31,360 53,724 43,383 12,455 23.148 15,915 20,246 382,509 May 24 j 26.252 69,355 53,353 42,338 26,186 23,558 54,168 36,149 11,862 23; 788 17,864 17,488 351,407 >er cent redemption I Reserve bank notes:! '; May 3 j L. 400 137 537 May 10 1 L. 267 137 404 May 17 1 !.. 393 137 530 May 24 1 ;.. 400 137 537 All other resources: I May3 ! i.. 318 329 May 10 i !.. 65 66 May 17 ! L. 77 May 24 j j.. 77 Total resources: ! I May3 i 226,149 |1,I 269,311 305,376 138,900 117,340 46-1,895 149,931 109,701 172,440 87,753 200,792 3,548,023 May 10 1 223,792 {1,46S,847 269.054 322,972 156,762 126,437 469,086 173.573 120,049 200,614 91,783 219,081 3,772,495 Mav 17 : 230,676 j 1,326,757 262', 374 321,825 138,127 118,182 462,303 165', 248 113,199 170.569 88,821 208,403 3,573,555 Mav24 ! 227,233 i 1,367,418 262.569 318; 996 143,078 463;243 149,127 109,681 174;934 92,497 209,539 3,585.303 ierence between net amounts due from and net amounts duo to other Federal Reserve Banks = net amount due to other Federal Reserve Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 561 Resources and liabilities of each Federal Reserve Bank and of the Federal Reserve system, at close of business on Fridays, May S to 24, 1918—Continued. LIABILITIES. [In thousands of dollars; i. e., 000 omitted.] I Boston. Y N o e r w k. d P el h p i h la i - a. C la le n v d e . - m R o ic n h d - . la A n t t - a. Chicago. Lo S u t. i s. I I M ap i o n l n is e . - ! ; K C a i n ty sa . s Total. I i Capital paid in: May3 6,458 19,698 6,909 8,504 3,801 2,965 9,715 3,520 | 2,771 3,472 2,928 4,308 75,049 May 10 , 6,400 19,736 6,909 8,508 3,803 2,977 9,707 3,524 ! 2,773 3,471 2,938 4,312 75,118 May 17 6,460 19,754 6,938 8,536 3,811 3,016 9,730 3,523 | 2,777 ! 3,490 2,950 4,330 75,315 May 24 6,466 19,754 8,536 3,811 3,019 9,737 3,623 i 2,782 j 3,500 2,967 4,332 75,465 Surplus: May 3 .„ , 649 116 4.0 216 38 ! 1,134 May 10 , 75 i 649 116 40 216 38 ! 1,134 May 17 , 75 I 649 116 40 216 38 i 1,134 May 24 75 ! 649 116 40 216 38 | 1.134 Government deposits: May3 3,877 i 7,496 12,415 8,525 4,212 5,050 8,715 5,877 ;. 5,105 3,786 3,516 5,314 ! 73,888 May 10 1,661 I 33,028 1,945 27,778 9,486 4,470 8,250 20,670 ! 3,544 6,807 834 14,056 i 138,529 May 17 2,230 | 2,074 1,428 9,581 224 4,519 4,460 4,369 j 8,886 3,674 2!294 5,014 ! 48,753 Due M to a y m 24 embers—rc- 11,728 I 12,142 10,696 19,194 4,247 4,892 9,498 12,615 I 9,879 9,818 7- 717 9,924 ' 122,350 sorve account: May 3 94,399 639,907 87,598 i 108,305 44,723 37,369 189,007 ! 51,148 ! 41,648 72,552 37,745 i 70,117 il, 474,518 May 10 94,501 675,135 109,784 | 117,703 44,413 40,386 192,555 | 49,680 I 42,706 64,637 41,164 75,493 -1,548,137 May 17 92,892 625,718 95,986 I 113,581 43,323 38,428 184,337 ! 49,339 i 39,503 67,676 i 38,657 71,698 ! 1,461', 138 May 24 628,517 | 88,711 108,184 42,248 j 37,398 185,287 ! 47,884 ; 33,614 66,701 I 36,876 j 68,234 jl, 436,284 Collection items: May 3 17,972 61,047 i 38,520 24,234 19,376 12,471 24,920 j 24,705 i 5,062 13,208 ! 5,496 i 10,582 I 257,593 May 10 18,129 57,052 i 23,183 22,990 31,789 21,069 23,546 i 34,913 i 11,177 45,223 I 6,963 i 13,739 ! 309,773 May 17 22,434 59,039 | 31,332 31,003 20,715 14,211 26,265 ! 33,977 j 7,414 14,593 ! 8,373 I 15,119 ; 282', 475 May 24 17,734 54,145 I 27,810 28,728 17,362 14,377 22.563 j 21,374 ! 4,094 13,644 ! 7,394 j 13,263 ! 242,488 Due to other Federal Reserve Banks, net: May 3 22,091 285 13,540 2,592 I 4,787 !. May 10 62,457 1,992 391 I. 3,955 i 763 !. May 17 3,278 15,260 1,657 j. 8,625 i. 4,109 ! May 24 37,552 i 2,349 6,892 I 412 3,679 I 68 ! Other deposits, including foreign government credits: May 3 , 85,627 i 259 | 177 1,803 20 ; 3.683 i 91,563 May 10 102,566 '•• 266 ! 5 3,214 81 ! 4; 459 i 110,611 May 17 104,137 i 244 j 16 5,336 469 I 4,377 ! 114.596 May 24 100,312 | 174 ! 17 3,154 35 ! 4,192 I 107J903 Total gross deposits: May 3 116,248 : 816,168 I 138,818 154,863 68,311 i 56,736 224,445 81,750 j 51,820 89,546 49,349 94,463 il, 897,562 May 10 114.291 930,238 | 136,904 168,737 86.079 ! 65,930 227,565 105,304 62,467 116,667 53,916 108,510 |2,107,050 May 17 120,834 790,968 ; 128,746 169,669 65'919 ! 57,174 220,398 96,779 55,820 85,943 51,433 96.208 jl, 906,962 May. 24 117.292 832,668 i 127,217 158,629 70,749 ! 57,096 220,502 81,708 52,606 90,163 55,666 95^681 11,909,025 Federal Reserve notes in actual circulation: May 3 102,547 508,560 ! 124,084 141,306 I 66,558 57,605 229,526 64,124 54,779 70,531 • 35,207 101,833 1,556,660 May 10 102,484 511,004 | 125,241 145,092 i 66,658 57,490 230,506 64,198 54,440 71.741 : 34,740 106,024 1,569,618 May 17 102,818 507,826 ' 126,690 142,917 | 67,981 57,952 230,818 64,446 54,213 72', 112 '34,131 107,541 1,569,445 May 24 102,898 506,342 . 128,414 150,987 i 68,281 57,780 231,690 63,276 53,887 72,299 : 33,557 109,210 1,578,621 Federal Reserve bank notes in circulationnet liability: Mays 7,980 May 10 7,878 May 17 7,878 i. 7,878 May 24 7^764 i. 7,764 Ail other liabilities: May 3 821 4,818 j 703 114 993 537 284 911 ; 188 MaylO 7,220 I 635 106 1,092 : 547 331 857 : 192 235 11,897 May 17 489 7,560 703 I 300 1,141 I 500 351 1,146 ; 307 324 12,821 May 24 502 8,005 844 ! 121 1,098 I 520 1,208 • 307 316 13,294 Total liabilities: May 3 226,149 1,319,893 269,811 305,376 1 138,900 117,346 464,895 149,931 109,701 172,440 ! 87,753 200.792 3,548,023 MaylO 223,792 1,468,847 ! 269,054 322,972 I 156,762 126,437 469,086 173,573 120,049 200,614 : 91,786 219; 081 3,772,495 May 17 230,676 1,326,757 I 262,374 321,825 I 138,127 118,182 462,303 165,248 113,199 170,569 i 88.821 208,403 3,573,555 May 24 227,233 i;367,418 I 262,569 318,996 i 143,078 117,940 463,243 149,127 109,681 174,934 i 92;497 209,539 3,585,303 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

562 FEDERAL RESERVE BULLETIN. JUNE 1, 1938. FEDERAL RESERVE NOTES. Federal Reserve note account of each Federal Reserve Bank at close of business on Fridays, May 3 to 24,1918, [In thousands of dollars; i. e., 000 omitted.] Boston. Y N o e r w k. d P el h p i h la ia - C la le n v d e . - m R o ic n h d - . Atlanta. Lo S u t. is. M ap i o n l n is e . - K C a i n t s y a . s Dallas. Total. FederalReserve notes received from agentnet: May3 106,166 553,988 129,422 149,740 77,635 | 59,610 245,776 67,826 55,853 76,914 35,686 112.552 1,671,168 May 10 107,556 569,018 137,855 153,373 77,480 59,446 250,551 67,129 56,021 77,862 35,462 115', 9391,707,522 May 17 107,863 565,212 136,916 152,804 78,674 60,007 252,888 69,435 56,150 77,921 34,675 117,695 1,710,240 May 24 107,813 56G,156 138,281 159,250 79,868 59,719 256,426 68,563 56,018 77,964 33,806 120,821 1,724,685 Federal Reserve notes held by banks: | May 3 3,619 45,428 5,338 8,434 11,077 2,005 36,250 3,702 1,074 6,383 479 10,719 114,508 May 10 5,072 58,044 12,634 8,083 10,822 1,956 20,045 2,931 1,581 6,121 722 9,915 137,904 May 37 5,045 5577,338866 ! 1100,222266 9,887 10,693 2,055 22,070 4,989 1,937 5,809 544 10,154 140,795 May 24 4,915 59,834 i 9,867 8,263 11,587 1,939 24,736 5,287 2,131 5,665 249 11,611 146,064: Federal Reserve notes I in actual circulation: May3 102,547 508,560 124,084 141,306 66,558 57,605 64,124 54,779 70,531 35,207 101,833 1,556,660 May 10 102,484 531,004 125,241 145,092 66, 658 57,490 230,506 64,198 54,440 71,741 34,740 106,024 1,569,618 May 17 102,818 507,826 326,690 142,937 67,981 57, 952 230,838 64,446 54,213 72,112 34,131 107,541 1,569,445 May 24 102,898 506,342 I 128,414 150,987 68,281 57,780 231,690 63,276 53,887 72,299 33,557 109,210 1,578,621 Gold deposited with . or to credit of Fed- ! i era] Reserve agent: I May 3 j 48,166 238,514 82,702 95,940 31,321 31,369 341,601 29,734 35,007 45,126 14/248 68,568 May 10 i 48,116 248,154 83,735 100 073 31,200 33,354 346,376 29.037 34,875 37,032 19,220 73,855 885,027 May 17 63,213 247,839 82,796 98,204 31,096 37, 345 148,733 42; 003 34,804 36,979 19,193 73,351 915,536 May 24 63,163 247,502 83,661 107,630 32,957 37,838 152,251 41,131 34,672 36,936 19,163 73,277 ! 930,181 Paper delivered to j Federal Reserve agent: May3 70,700 525,555 60,240 72,910 55,055 28,679 120,460 46,232 26,383 34,763 31,478 45,554 1,118,009 May 10 69,127 576,674 58,406 69,556 57,051 26,533 124,237 44,670 27,752 49,170 29,260 45,620 1,178,056 May 17 57,086 499,153 56,411 77,584 45,479 22,746 121,289 30,827 27,992 66,263 27,978 48,287 1,081,095 May 24 63,591 581,158 58,959 64,845 47,867 22,675 114,040 29,424 25,385 68,476 28,930 50,527 1,155,877 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JCJNH 1,1918. FEDERAL RESERVE BULLETIN, 563 Federal Reserve note account of each Federal Reserve agent at close of business on Friday% May S to 24, 1918, [In thousands of dollars; i. e., 000 omitted.] San Y N o e r w k. d P e h lp il h a i - a. C la le n v d e . - m R o ic n h d - . Atlanta. Chicago. Lo S u t. is. M ap i o n l n is e . - K C a i n ty sa . s Dallas. F ci r s a c n o - . Total. FEDERAL RESERVE NOTES. Received from Comptroller: May 3 149,560 841,480 184,200 181,560 102,860 91,620 304,920 88,900 73,980 100,700 68,500 121,280 2,309,560 May 10 149,560 184,200 183,960 103,060 91,620 312,320 88,900 73,980 101,700 68,500 124,880 2,335,760 May 17 149,560 866,280 190,200 186,160 105,060 92,020 313,320 88,900 73,980 101,700 68,500 127,140 2.362,820 May 24 152,580 866,280 190,200 189,760 106,860 92,740 317,520 92,200 73,980 101,700 68,500 130,340 2,382,660 Returned to Comptroller: May3 26,474 177,292 27,838 14,180 I 19,575 15,315 14,584 12,444 12,632 16,026 15,014 8,728 360,102 May 10 27,084 181,832 28,805 14,547 19,870 15,629 15,289 13,141 12,764 16,328 15,238 8,941 369,468 May 17 27,777 185,668 29,744 14,916 | 20,186 15,888 15,953 13,175 12,835 16,469 15,325 9,445 377,381 May 24 28,827 189,924 30,879 15,490 | 20,792 16,896 18,974 14,047 13,307 17,026 15,394 9,519 389,075 Chargeable to Federal Reserve agent: May3 123,086 664,188 156,362 76,305 290,336 76,456 61,348 84,674 112,552 1,949,458 May 10 122,476 671,248 155,395 169,413 I 83,190 75,991 297,031 75,759 61,216 85,372 53,262 115,939 1,986,292 May 17 121,783 680,612 160,456 171,244 84,874 76,132 297,367 75,725 61,145 85,231 53,175 117,695 1,985,439 May 24 123,753 676,356 159,321 174,270 ~ 75,844 300,546 78,153 60,673 84,674 53.105 120,821 1,993,585 In hands of Federal Reserve agent: May 3..*. 16,920 110,200 26,940 17,640 I 5,650 16,695 44,560 8,630 5,495 7,760 17,800 278,290 May 10 i 14,920 102,200 17,540 16,240 I 5,710 18,545 46,480 8,630 5,195 7,510 17,800 238,770 May 17 i 13,920 115,400 23,540 18,440 I 6,200 j 16,125 44,479 6,290 4,995 7,310 18,500 275,199 May 24 j 15,940 110,200 21,040 15,020 | 6,200 ' 16,125 44,120 9,590 4,655 8,710 19,300 268,900 Issued to Federal Re- j serve Bank, less | amount returned to Federal Reserve agent for redemption: May 3 106,166 553,988 129,422 149,740 77,635 i 59,610 245,776 67,826 55,853 76,914 35,686 112,552 1,671,168 May 10 107,556 569,048 137,855 153,173 77,480 ! 59,446 250,551 67,129 58,021 77,862 35,462 115,939 1,707,522 May 17 107,863 565,212 136,916 152,804 78,674 I 60,007 252,888 69,435 56,150 77,921 34,675 117,695 1,710,240 May 24 107,813 568,156 138,281 159,250 79,888 I 59,719 256,428 68,563 56,018 77,964 33,806 120,821 1,724,685 Collateral held as security for outstanding notes: Gold coin and certincates on hand— May3 31,000 173,251 18,518 2,503 13,102 11,581 249,955 May 10 31,000 173,248 22,018 2,503 13,102 11,581 I 253,452 May 17 16,000 173,247 20,517 T503 13,102 ! 11,581 I 236,950 May 24 12,000 169,745 19,518 2,503 13,102 I 11,581 ! 228,449 In'" gold redemption fund— May 3 5,666 10,263 6,743 7,422 1,821 1,996 248 1,976 2,405 2,768 | 2,083 j 5,672 49,061 May 10 5,616 9,906 6,646 8,055 1,700 1,681 548 1,943 2,273 2,672 2,055 ! 5,459 48,554 May 17 5,713 9,592 7,062 7,687 1,596 2,422 319 1,909 2,202 2,619 2,028 I 6,855 50,004 May24 5,663 12,757 6,957 8,112 1,457 2,415 112 2,182 2,070 2,576 1,998 ! 3,781 53,080 Gold settlement fund, Federal Reserve Board— MayS 11,500 55,000 75,959 70,000 29,500 26,870 141,353 27,758 19,500 42,360 ! 584 563,280 May 10 11,500 65,000 77,089 70,000 29,500 29,170 145,828 27,094 19,500 34,360 ! 5,584 583,021 May 17 41,500 65,000 75,734 70,000 29,500 32,420 148,394 40,094 19,500 34,360 j 5,58-1 628,582 May 24 45,500 65,000 76,704 80,000 31,500 32,920 152,139 19,500 34,360 I 5,584 648,652 Eligible paper, minimum required1— May 3 58,000 315,474 46,720 53,800 46,314 j 28,241 104,175 38,092 20,846 31,788 21,438 43,984 808,872 May 10 59,440 320,894 54,120 53,100 46,280 ! 26,092 104,175 21,146 40,830 16,242 42,084 822,495 May 17 44,650 317,373 54,120 54,600 47,578 ! 22,662 104,175 27,432 21,346 40,942 15,482 44,344 794,704 May 24 44,650 318,654 54,620 51,620 46,911 i 21,881 104,175 27,432 21,346 41,028 14,643 47,544 794,504 Total: MayS 106,166 553,988 129,422 149,740 77,635 59,610 245,776 67,826 55,853 76,914 35,686 112,552 1,671,168 May 10 107,556 569,048 137,855 153,173 77,480 59,446 250,551 67,129 56,021 77,882 35,462 115,939 1,707,522 May 17 107,863 565,212 136,916 152,804 78,674 60,007 252,888 69,435 56,150 77,921 34,675 117,695 1,710,240 Kay 24 107,813 566,156 138,281 159,250 79,868 59,719 256,426 68,563 56,018 77,964 | 33,800 120,821 1,724,685 i For actual amounts see item " Paper delivered to Federal Reserve agent," on p. 562, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

564 FEDERAL RESERVE BULLETIN. JUNE 1,1918, MEMBEU BANK CONDITION STATEMENT. Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities, as at close of business on Fridays from Apr. 26 to May 17, 1918. 1. TOTAL FOR ALL REPORTING BANKS. i In thousands of dollars; i. e.. 000 omitted.] i Boston. \ Y N o e r w k . IPh p i h la i d a e . l-i : C la le n v d e . - Atlanta.! Chicago. Lo S u t. is. F S r a a n n - j I Total, i cisco. I Number of reporting \ banks: = ! Apr. 26 ! 39 j 98 49 i 79 64 32 I 47 681 May3 i 41 | 49 ; 32 ! 47 j May 10 1 40; 49 ! 31 48 i May 17 ! 42 ! 98 49 I 37 30 47! 688 United States bonds ! to secure circulation: | Apr. 26 j 14,621 50,667 12,976 i 42,519 22,876 14,700 19,241 17,374 5,747 ! 14,012 17,561 35,399 267,693 May3 1 14,621 50,809 12,975 ! 42,907 21,978 13,545 19,642 17,392 5,747 I 14,012 17,312 35,299 266,23S Mav 10 ...i 14,121 50,817 12,975 ! 42,887 23,818 14,695 19,642 17,393 5,744 ! 14,012 13,979 35,399 268,482 May 17 | 14,621 50,917 12,978 i 43,016 21,599 14,785 19,142 17,437 5,642 ! 14,014 17,559 35,055 266,765 Other "United States j bands, including ! i Liberty bonds: j Apr. 26 13,135 167,335 13,805 | 39,124 18,891 15,692 36,603 12,985 7,617 10,646 10,461 15,896 362,190 MayS ! 16,376 166,624 14,056 ! 38,703 18,729 18,026 36,610 14,402 8,916 10,636 9,527 15,473 368,078 May 10 1 18;939 317,294 31,475 | 79,050 25,173 25,622 83,973 24,833 10,280 20,980 16,591 677,090 May 17 1 17,644 304,658 23.758 i 73,719 22,891 22,465 81,226 21,692 9,499 19,940 16,998 21,241 635,731 United/ States eertifi- j cates of indebted- j ness: ! Apr. 26 ! 49,273 11,023.646 69,853 i 79,447 22,812 27,686 102,967 41,753 19,139 ! 38,489 20,308 52,996 1,548,369 MayS ! 44,868 1,011^648 66,742 i 81,827 23,466 25.224 100,265 38,470 18,560 j 42,166 20,579 52,514 1,526,329 May 10 : 24,859 822,386 i 46,530 ! 39,146 i 18,971 22; 218 56,721 32,685 ! 12,833 30,159 17,589 41,170 1,165,26? May 17 = 29,089 814,876 ". 45,478 j 37,826 1 16,334 22,853 55,152 32,622 i 11,721 j 27,920 18,857 40,320 1,153,048 To s t e a c l u ri U ti n es it e o d w n S ed ta : tes ; : 1 ! ! i Apr. 26 : 77,029 il,241,648 i 96,634 ! 161,090 i 64,579 58,078 158,811 72,112 32,503 ! 63,147 48,330 104,291 12,178,252 May 3 • 75,865 1,229.081 I 93,773 i 163,437 \ 64,173 56,795 156,517 70,264 i 33,223 ! 68,814 47,418 103,286 :2,160,646 May 10 ! 57,919 1.190.497 ' 90,980 I 161,083 I 67,962 62,535 j 160,336 74,911 j 28,857 I 65,151 51,159 99,449 2,110,838 May 17 \ 61,354 ii;i70'.451 • 82,214 ! 154,561 i 60,824 60,103 ! 155,520 71,751 ! 26,862 i 61,874 53,414 96,616 i2,055,543 Loans secured by ; i United States bonds ; and certificates: ; i Apr. 26 i 31,919 ; 153,160 ! 21,213 | 37,203 i 12,412 5,176 ! 33,577 8,393 2,316 ! 3,007 3,609 4,367 ! 316,352 MayS i 33,582 i 148,207 ! 27,653 " 37,867 | 12,273 6,516 I 23,240 8,377 2,627 ! 3,252 3,895 4,448 ! 311,937 May 10 i 56,492 j 264,809 ! 36,376 | 42,697 ! 15,824 6,416 ' 27.771 12,558 3,179 ! 3,997 5,226 8,391 : 483,736 May 17 j 60,223 ! 280,334 I 34,795 . 44,166 15,551 6,403 | 26; 857 14,103 3,461 ! 4,332 5,088 6,244 ! 501,556 Other loans and in- ;• I I vestments: | | Apr. 26 i 722.222 |4,006,751 • 611,090 j 923,808 335,995 271,042 11,331,674 365,392 I 228,945 450,967 176,254 483,381 ;9,907,521 May 3 j 772', 229 !4,00l|30l ! 614,794 : 928,965 324,372 251,564 j 1,351,613 371,982 j 233,388 455,188 171,802 482,565 9,959,763 May 10 i 775.529 14,051,094 j 622,068 j 928,100 349,106 267,004 il,357,373 370,135 233,988 454,161 169,243 487,434 10,065,235 Apr. 17 |792', 825 14,024,953 ; 627,410 ! 937,115 324,293 271,680 '1,346,945 375,443 230,591 462,436 173,426 484,511 110,051,628 Total loans and in- | vestments: "• Apr. 26 , 831,170 5,401,559! 728,937 1,122,101 412,986 334,296 1,524,062 445,897 263,764 517,121 228,193 592,039 112,402,125 MayS 881,676 5|378.589 i 736,220 11,130,269 400,818 i 314,875 1,531,370450,623 269,238 525,254 223,115 590,299 12,432,346 May 10 889,940 5,506.400 i 749,424 ll,131,880 432,892 ! 335,955 1,545,480457,604 266,024 523,309 225,628 595,274 112,659,810 May 17 914,402 5,475;73Sj 744,419 1,135,842 400,668 I 338,186 ! 1,529,322461,297 260,914 528,641 231,928 587,371 !12,6OS;72S Reserve with Federal ! Reserve Banks: Apr. 26 62,851 631,551 j 57,349 ! 80,335 27,071 25,107 ! 142,995 33,477 i 19,073 42,011 16,382 42,625 ll, 180,827 May 3 66,720 599,641 ! 55,040 I 84,354 26,778 23,528 I 145,081 35,526 1 19,502 44,054 16,782 45,515 il, 162,521 May 10 65,643 650^252 ; 68,131 ! 81.129 27,214 27,545 ! 143,464 33,349 i 20,242 44,460 17,705 43,993 jl, 223,127 May 17 66,564 595; 479 ! 62,794 i 81', 416 25; 581 ! 25,081 I 139,171 32,241 ! 17,401 39,744 15,911 46,728 |1,148,U1 Cash in vault: I Apr. 20.- , 26,069 I 130.245 ; 20,419 i 29,633 15,48-4 13,669 ! 61,574 13,555 10,125 j 16,977 11,107 20,477 I 369,334 Mav3 27.782 ! 127; 320 j 20,230 ! 35,764 15.029 13,224 64,157 14,663 9,691 17,034 11,090 19,662 I 375,646 Mav 10 28; 446 I 130,375 . 20.319 i 31.457 15;568 j14,812 64,121 14,754 9,488 17,031 11,774 21,268 I 379.413 May 17 , 27.909 I 126,896 i 20,727 i 35,622 14,845 ! 14,628 63,937 13,403 8,943 15,546 11,460 19,219 • 373,135 Net demand deposits on which reserve is computed: Apr. 26 638,079 |4,331,488! 587,163 ! 595,666 263,760 j 204,201 1,053,322240,125 183,402 384,545 153,511 374,827 ;9,100, OSS MayS G62.882 14,428,836 \ 584,884 \ 709,801 256,037 186,741 11,050,156 272,869 I 185;881 399,653 151,595 382,290 9,269,625 May 10.. , 629,429 14,245,365 i 592', 722 | 673:313 267,650 192,606 1,024,429 252,270 1 171,088 375,147 140,773 370,780 18,935.572 Mav 17 , 066,122 14,271,156 i 588.079 I 670'.090 243,175 194,964 998,254 251,343 ! 162,583 356,247 141,965 378,627 |8,922; 611 Time deposits: Apr. 26 79.210 i 320,821 14,965 I 222., 649 45,519 I 79,868 349,264 75,548 47,058 ! 58,606 24,541 103,845 1,421,900 Mav 3 98'. 879 284,790 15,490 I.228,335 i 43,337 ! 74.253 75,659 46,350 I 56,799 24,090 102,205 1,419,056 MavlO 95', 600 j 277,896 14.426 ! 227;748 ' 44,669 81;868 347,103 74,634 45,040 62,606 23,175 103,499 11,398,264 May 17.. 97;017 i 270,524 13,903 J 277,753 39,136 - — 347,362 74'610 I 44! 936 I 62', 433 24,840 102,282 11,386)698 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 565 Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities, as at close of business on Fridays from Apr. 26 to May 17, 19 IS—Continued. 1. TOTAL FOR ALL REPORTING BANKS—Continued. [In thousands of dollars; i. e.f 000 omitted.] San j Boston.I Y N o e r w k. Ph p i h la i d a e . l-j ! C la le n v d e . - m R o ic n h d - . Atlanta. st- < i j M ap i o n ]i n s e > - • ! K c a it n y s > as Dallas. c F i r s a c n o - . TotaJ. ! Total net deposits on which reserve is computed: Apr. 2G 668,169 4,411,780 592,452 i 764,551 279,293 229,95411,149,056 259,642 200,367 402,127 161,499 405,980 9,524,870 May 3 701,609 4,498,589 590,325 I 780,402 270,899 210,329 1,152,105 292,490 202,579 416,693 159,371 412,951 9,688,342 May 10 666,862 4,315,876 597,831 ! 743,699 282,942 219,005 1,120,057 271,621 187,277 393,929 148,338 401,830 |9,349,267 May 17 704,338 4,340,047 592,972 | 740,484 256,261 221,313 1,093,941 270,684 178,744 374,977 150,037 409,311 |9,333,109 Government deposits: Apr.26 39,777 407.993 43,756 I 56,341 5,595 13,864 45,443 24,393 11,298 10,918 7,379 2,595 | 669,352 May 3 43,342 342', 067 43,372 | 56,690 10,358 11,360 42,785 23,831 11,862 10,067 6,647 3,639 I 606,020 May 10 113,562 379,927 37,729 i 68,531 24,092 32,425 47,474 52,538 20,378 29,896 7,917 12,520 i 826,989 May 17 114,355 650,035 83,851 ! 104,044 29,759 119,260 65,904 25,976 30,202 18,898 21,168 11,284,081 2. MEMBER BANKS IN CENTRAL RESERVE CITIES. CENTRAL RESERVE CITIES. Number of reporting banks: Apr.26 120 May 3 120 May 10 120 May 17 120 United States bonds to secure circulation: Apr.26 36,323 1.442 : 10,374 48,139 May 3 36,465 1.443 i 10,392 48,300 May 10 36,473 1,443 j 10,393 48,309 May 17 36,573 1,443 i 10,392 48,408 Other United States bonds including Liberty bonds: Apr.26 151,687 15,615 i 8,649 175.951 May 3 148,690 15,491 i 10,016 174', 197 May 10 275,527 52,371 18,450 346,348 May 17 268,676 50.875 14,802 334,353 United States certificates of indebtedness: Apr.26 1,000,768 65,045 34,392 i 1,100.205 May 3 62.470 31.847 ! 1,083', 307 May 10 805,879 29,707 28,123 ' 863,709 May 17 798,990 30,006 28,350 857,346 Total United States securities owned: Apr.26 1,188,778 82,102 53.415 1,324,295 May 3 1,174,145 79,404 52,255 1,305,804 May 10 1,117,879 83,521 56,9(56 1,258; 366 May 17 1,104,239 82.324 53,544 1,240,107 Loans secured by United States bonds i and certificates: Apr.26 135,271 22,772 6,692 i 164,735 May 3 130,549 12,145 6,473 i 149.167 May 10 242,321 15,713 |10,097 ! 268,131 May 17 257.273 15,671 i 11,199 284,143 Other loans and investments: I Apr.26 3,671,200 815,898 259.208 ' .14,746,306 May 3 3,671,101 815,348 263,694 .14,750,143 May 10 3,700,416 820,741 264,760 .14,785.917 May 17 3,687,226 821,154 269,025 .14; 777; 405 Total loans and investments: Apr.26 4,995,249 j : 920,772 319,315 !. .16,235,336 Mav 3 , 4,975,795 ! •" 903.879322;422 I. .;6,205,114 May 10 5,060,616 i 919'. 975 381,823 '. .:G; 312,414 May 17 5,048,738 ; 919^149 333.768 .. .6.301,655 Reserve with Federal Reserve Banks: A or. 2G 004,353 99,435 25,747 i I 729,535 May 3 571;677 101,588 1 27,334 : i 700,599 May 10 i 023.574 101,742 i 24,820 j I i 750,136 May 37. ' 567;161 96,322 !24,686 : j ! I ...! 088,169 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

566 FEDEKAL RESERVE BULLETIN". JUNE 1, 1918. Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities, as at close of business on Fridays from Apr. 26 to May 17, 1918—Continued. 2. MEMBER BANKS IN CENTRAL RESERVE CITIES—Continued. [In thousands of dollars; i. e., 000 omitted.] Boston. Y N o e r w k. Ph p i h la i d a. el- 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 l n is e . - K C a i n t s y a . s Dallas. c F S i r s a a c n n o - . Total. CENTRAL RESERVE CITIES—contd. Cash in vault: Apr. 26 118,130 38,229 7,490 163.849 May 3 114,908 38,9H 7,592 161', 411 May 10 116 927 ! 39,184 8,288 164,399 May 17 113,430 i :::::::: *::::::::: 37,650 7,663 158,743 Net demand deposits on which reserve is computed: Apr. 26 4,045,438 707,196 161,103 4,913,737 May 3 4,121.824 717,866 193,920 5,033,610 May 10 3,960,888 683,451 180,871 4,831,210 May 17 3,968,140 668,880 182,857 4,819,877 Time deposits: A pr. 26 277,779 135,035 56.528 469,342 May 3 243,395 133,372 55;466 432,233 May 10 234,825 130,630 54,724 420,179 May 17 226,747 130,899 54,712 412,358 Total net deposits on which reserve is computed: Apr. 26 . 4J09,541 738,358 174,148 5,022,047 May 3 4,177,992 1 748,644 206,720 5,133,356 May 10 4,015,078 719,596 193,500 4,928,174 May 17 4,020,466 699,087 195,483 4,915,036 Government deposits: \nr 26 392,820 33,371 20,646 446,837 May 3 326,006 ! 32,115 19;904 378,025 May 10 352,707 i 36,082 41,691 430,480 May 17 593,741 I 96,221 54,184 744,146 j 3. MEMBER BANKS IN RESERVE CITIES. BBSEKYB CITIES. Number of reporting banks: Apr. 26 33 416 May 3 33 418 May 10 32 419 May 17 60 42 33 422 United States bonds to secure circulation: Apr. 26 4,498 7,796 8,965 34,863 13,694 12,170 17,449 3,290 14,012 15,133 35,399 172,599 May 3 4,498 7,796 8,985 ! 35,230 13,691 11,085 17,449 5,330 3,290 14,012 15,128 35,299 171,754 May 10 4,498 7,796 8,965 35,230 13,694 11,865 17,449 5,330 14,012 14,526 35,399 172,054 May 17 4,498 7,796 3,968 35,359 13,684 12,255 16,949 5,330 3,240 14,014 15106 35,055 i 172,254 Other United States bonds, including Liberty bonds: Apr. 26 7,132 10,770 36,381 13,263 14,205 20,267 j 3,302 5,981 10,646 j 8,738 15,898 ! 154,977 May 3 10,916 8,830 10,958 38,140 13,322 16,685 19,421 I 3,143 7,259 10,633 ! 8,625 15,473 j 161,441 May 10 13,663 25,566 27,231 74,684 15,536 22,410 29,813 I 4,461 7,781 20,980 i 14,206 22,880 279,211 May 17 11,795 21,448 20,049 69,324 15,170 19,275 28,352 I 4,361 7,143 19,940 i 14,984 21,241 I 253,082 United States certificates of indebtedaess: Apr. 28 38,863 11,26-4 |63,832 72,881 18,477 23,008 37,448 5,943 13,644 38,489 17,678 52,996 394,303 May3 32,736 11,239 i 60,436 75,332 19,036 22,018 36,991 5,325 13,152 42,166 17,955 52,514 388,900 May 10 18,156 7,604 |41,758 35,137 15,358 18,077 26,384 3,234 9,763 30,159 15,437 41,170 262,235 May 17 21,040 7,454 |40,859 33,862 14,263 18,962 24,756 3,146 8,902 27,920 16,809 40,320 258,293 Total United States j securities owned: Apr. 26 51,757 83,367 144,105 45,434 49,383 75,164 14,575 22,915 63,147 41,549 104,291 721,879 May 3 48,150 25,192 '80,359 148,702 46,052 49,768 73,861 13,801 23,701 66,814 41,706 103,286 722,095 May 10 38,317 27,895 77,952 145,051 44,588 52,352 73,646 13,025 20,834 65,151 44,169 99,449 713,500 May 17 37.333 40,966 69,876 138,545 43,117 70,057 12,837 19,285 61,874 46,899 96,616 683,829 Loans secured by 36,698 United States bonds and certificates: Apr. 26 26,195 8,858 20,444 36,391 10,363 4,845 10,566 1,299 2,191 3,007 3,440 4,367 131,966 May 3 28,320 8,874 26,631 37,059 10,243 6,247 10,643 1,463 2,501 3,252 3,727 4,448 141,408 May 10... 47,023 10,593 34,454 41,798 13,414 5,912 11,497 1,892 3,004 3,997 5,056 8,391 187,031 May 17.. 50,627 11,361 32,897 ! 43,264 13,774 5,952 10,545 1,870 3,175 4,331 4,928 8,244 188,968 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL RESERVE BULLETIN". 587 Principal resources and liabilities of member banks located in central reserve, reserve, and other selected cities, as at close of business on Fridays from Apr. 26 to May 11, 1918—Continued. 3. MEMBER BANKS IN RESERVE CITIES—Continued. [In thousands of dollars; i. e., 000 omitted. Boston. Y N o e r w k. Ph p il h a i d a o . l-i I C la lo n v d e . - I j m R o ic n h d - . Atlanta. Chicago. Lo S u t. i s. I I M arc in ol n i e s. - City. Dallas. F S r a a n n- Total. 1" ! RESERVE CITIES—COn. Other loans and investments: Apr. 26 543,586 146,487 542,726 851,122 244,061 239,818 511,249 82,905 | 171,749 450,967 149,220 483,381 4,417,271 Mav3 545,382 142,789 545,949 857,134 246,575 228,625 525,598 85,424 i 176,698 455,188 147,635 482,565 4,439,562 May 10 556,551 146,309 552,799 856,107 250,320 234,111 525,540 83,195 i 179,524 454,181 142,095 487,434 4,468,14.6 May 17 567,102 146,196 559,583 865,126 247,721 240,903 514,781 83,212 | 175,266 462,436 147,165 484,511 4,494,002 Total loans and investments: Apr. 26 621,538 181,537 648,537 1,031,618 299,858 294,046 596,979 98,779 196,855 517,121 194,209 592,039 5,271,116 Mav3 619,852 179,558 652,939 1,040.895 302,870 284,040 610,102 100,688 202,900 525,254 193,008 590,299 5,303,065 M> 1 639,891 197,868 665,205 1,042^56 308,322 292,375 610,683 98,112 1 203,362 523,309 191,320 595,274 5,368,677 May 17 655,062 194,255 662,356 1,046.935 304,612 297,347 595,383 97,919 I 197,726 528,641 198,992 587,371 5,366,599 Reserve with Federal Reserve Banks: Apr.26 52,088 13,900 51,722 ' 75,158 1 21,288 23,282 43,171 6,313 ! 15,430 42,011 14,528 42,625 401,516 May3 53,617 15,063 49,739! 79,151 I 21,811 21,998 42,675 6,908 ! 15,893 44,054 14,873 45,515 411,295 May 10 52,255 14,182 62,195 i 75,738 j 21,205 25,475 40,870 7,340 ! 16.841 44,4.60 15,842 43,993 420,396 May 17 52,779 15,910 57,039 I 76,774; 20,876 23,103 41,969 5,942 i 14; 010 39,744 13,942 48,728 408,818 Gash in vault: Apr.26 19,153 4,836 17,184 | 26,001! 11,753 12,040 23,137 5,041 ! 8,763 18,977 9,840 ! 20,477 173,002 May3 19,052 4,927 16,291 i 31,454 i 11,540 11,878 24,701 5,627 ! 6,3191177,,003344. 9.,.3.7.2. .j 19,662 178,157 May 10 19,570 5,544 16,834 27,261 ! 11,307 13,228 24,429 5,213 '• 6,303 17,031 ! 10,029 j 21,268 178,017 May 17 18,777 5,850 16,512 31,130 11,843 13,302 25,769 4,426 6,051 15,546 | 9,958 |19,219 178,383 Net demand deposits on which reserve is conrouted: Apr. 28 508,426 130,917 ! 517,814 632,792 194,631 182.358 342,513 62,371 142,131 384,545 131,358 i374,827 3,604,681 May 3 505,057 128,824 I 513,894 | 646,792 i 196,717170)389 323,720 62,355 144,710 399,853 131,219 !382,290 3,805,620 May 10 477,089 115,908 ! 525,886 j 613,217 : 193,948170,696 325,859 55,748 134,231 375,147 119,918 !370,780 3.478,427 May 17 504,506 129,943 I 519,592 | 608,688 ; 187,024174,987 320,200 54,574 126,191 I 356,247 120,955 ;378,627 3; 481,514 Time deposits: i Apr.26 i 30,017 17,562 I 8,747 208,393 ! 30,922 65,924 211,867 13,063 24,912 I 58,806 19,677 i103,845 791,535 Mav3 ! 16,772 i 9,311 212,002 . 28,860 64,045 231,439 14,251 24,629 ! "5•6*, 79—9 19.821 !102,205 808,523 May 10 ! 27,525 16,632 8,350 211,708 I 29,958 67,573 212,258 14,083 24,220 62.806 18; 407 I103,499 796,819 May 17 | 26,146 17,086 8,289 211,716 : 28,674 88,073 212,259 14,096 24,084 62', 433 20,020 !102,282 795,15S Total net deposits on I which reserve is ! computed: ! Apr.26 1 517,431 136,188 520,438 694,710 ! 203,908 202,135 406,073 66,290 I 149,805 402,127 137,259 405,980 3,842,142 May 3 j513,574 133,856 516,687 710,393 ". 205,375189,602 393,152 68,630 152,099 413,693 137,165 412,951 3,848,177 May 10 i485,347 120,898 528,391 678,729 ! 202,935 389,536 59,973 ! 141,497393,929 112255,444400 440011,883300 3,717,473 May 17 j512,349 135,069 522,079 672,183 j 195,628 195,409 383,878 58,803 | 133,416 374,977 126,961 i 409,3113,720,061 Government deposits:! A.pr. 26 1 34,950 6,286 41,729 55,449 ! 4,584 11,983 11,823 3,083 I 10,575 10,918 | 8,712 : 2,595 200,687 May3 i 36,680 7,462 41,347 55,988 i 8,223 9,076 10,381 3,286 ! 10,301 10,067 ! 6,083 I 3,639 202,493 May 10 97,773 9,420 36,129 67,135 ! 16,247 28,319 11,100 8,157 1 18,432 29,896 j 7,499 ; 12,520 342,627 May 17 98,274 28,498 79,323 102,593 ! 14,933 25,571 22,643 8,889 | 23,749 30,202 17,178 j 21,168 473,021 4. MEMBER BANKS OUTSTDE RESERVE CITIES. COUNTRY BANKS. Number of reporting banks: Apr.26 25 13 24 7 3 6 17 8 145 May 3 25 13 24 7 5 6 17 7 148 May 10 25 13 30 8 5 6 16 3 154 May 17 25 13 22 7 5 6 16 8 148 United States bonds to secure circulation: Apr.26 10,123 6,548 4,011 7,656 9,182 2,530 350 1,670 2,457 2,428 46,955 May 3 10,123 6,548 4,010 7,677 8,284 2,480 750 1 670 2 457 2,186 46,185 May 10 9,623 6,548 4,010 7,657 10,124 2,830 750 1,670 2,454 2,453 48,119 May 17 10,123 6,548 4,010 7,657 7,915 2,530 750 1,715 2,402 2,453 46,103 Other United States bonds including Liberty bonds: Apr. 26 4,739 8,516 3,035 2,743 5,628 1,487 721 1,034 1,636 1,723 31,262 May3 5,460 9,074 3,098 2,563 5,407 1,341 1,698 1,240 1 657 902 32,440 May 10 5 276 16,201 4,244 4,366 9,637 3,212 1,789 1,922 2,499 2,385 51,531 May 17 5,849 14,534 3,709 4,395 7,721 3,190 1,999 2,529 2,356 2,014 43,296 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

568 FEDERAL BESEEVE BULLETIN. JDNE 1, 1018. Principal resources and liabilities of member^ banks located in central reserve, reserve, and other selected cities, as at close of business on Fridays from Apr. 26 to May 17, 1918—Continued. 4. MEMBER BANKS OUTSIDE RESERVE CITIES—Continued. [In thousands of dollars; i. e., 000 omitted.] I Boston. Y N o e r w k. Ph p i h la i d a. el- C la le n v d e . - m R o ic n h d - . Atlanta. Chicago. Lo S u t. is. j M ap i o n l n is e . - City. Dallas. C F i r s a c n o - . I Total. COUNTRY BANKS— continued. United States certificates of indebtedness: Apr. 26 10,410 11,614 6,221 6,586 ! 4,335 4,678 474 1,418 i 5,495 2,630 53,861 May 3 12,132 11,419 6,206 6,495 ! 4,430 3,206 804 1 5,408 2,624 54,122 May 10 6,703 8,903 4,774 4,009 I 3,613 4,141 630 1,328 3,070 2,152 39,323 May 17 8,049 8,432 4,619 33.,996644 I 2,071 3,891 390 l|l26 2,819 2,048 37,409 Total United States securities owned: Apr. 26 25,272 26,678 13,267 16,985 19,145 8,695 1,545 4,122 6,781 132,078 May 3 27,715 27,041 13,414 16,735 18,121 7,027 3,252 4,208 ! 9,522 5,712 132,747 May 10 21,602 31,652 13,028 16,032 23,374 10,183 3,169 4,920 8,023 6,990 i 138,973 May 17 24,021 29,514 12,338 16,016 17,707 9,611 3,139 5,370 7,577 6,515 i 131,808 Loans secured by United States bonds and certificates: Apr. 26 5,724 9,031 769 812 2,0-19 331 402 125 169 19,651 May3 7,262 8,784 1,022 2,030 452 441 126 168 21,362 MavlO 9,469 11,895 1,922 2,410 504 561 569 175 170 28,574 May 17 9,596 11,700 1,898 902 1,777 451 641 1,034 160 28,445 Other loans and investments: Apr. 26 178,636 189,064 68,364 72,686 91,934 31,224 4,527 23,279 57,196 27,034 743,944 May 3 226,847 187,411 68,845 71,831 77,797 22,939 10,667 22,864 56,690 24,167 770,058 May 10 218,978 204,369 69,269 71,993 98,786 32,893 11,092 22,180 54,464 27,148 811,172 May 17 225 723 191,531 67,827 71,989 76,572 30,777 11,010 23,206 55,325 26,261 780,221 Total loans and investments: Apr. 26 209,632 224,773 82,400 90,483 113,128 40,250 6,311 27,803 66,909 33,984 895,673 May 3 261,824 223,236 83,281 89,374 ! 97,948 30,235 14,371 27,513 66,338 30,»0™475 924,167 May 10 250.049 247,916 84,219 88,924 ! 124,570 43,580 14,822 27,669 62,662 34,308 978 719 May 17 259)340 232,745 88,907 . 96,056 40,839 14,790 29,610 63,188 32,936 940,474 Reserve with Federal Reserve Bank: Apr. 26 10,763 13,298 5,627 5,177 5,783 1,825 1,417 ! 3,643 1,854 49,776 May 3 13,103 12,901 5,301 5,203 4,967 1,530 818 1,286 | 3,609 1,909 50,627 May 10 13,388 12,496 5,936 5,391 6,009 2,070 852 1,189 I 3,401 1,' " 52,595 May 17 13,785 12,408 5,755 4,642 4,705 1,978 880 1,613 | 1,' 51,120 Cash in vault: Apr. 26 6,916 7,279 3,235 3,632 3,731 1,629 208 1,024 | 3,362 1,467 32,483 May 3 8,730 7,485 3,939 4,310 3,489 1,346 545 1,444 3,372 1,418 36,078 May 10 8,876 7,904 | 3,485 4,196 4,261 1,584 508 1,253 3,185 1,745 36,997 May 17 9,132 7 616 ! 4,215 4,492 3,002 1,326 518 1,314 2,892 1,502 Net demand deposits on which reserve is computed: Apr. 26 129,653 155,133 I69,349 62,874 69,129 21,843 i 3,613 16,651 41,271 22,155 591,671 May 3 157,825 176,188 !70,990 63,009 59,320 16,352 i 8,570 16,594 41,171 20,376 630,395 May 10 152,340 168,569 I66,836 60,096 73,702 21,910 ! 9,119 15,651 36,857 20,855 625,935 May 17 161,616 173,073 I68,487 61,428 56,151 19,977 | 9,174 13,912 36,392 21,010 621,220 Time deposits: Apr. 26 49,199 25,4S0 6,218 16,256 14,597 13,944 I 2,362 5,957 22,146 4,864 161,023 Mav3 70,490 24,623 6,179 16,333 14,477 10,208 ! 4,058 5,942 21,721 4,269 178 300 May 10 68,075 26,439 6,076 16,040 14,711 14,295 4,215 5,827 20,820 4 768 181 266 May 17 70,871 26,691 5 614 16,037 10,462 13,829 4,204 5,802 20,852 4,820 179,182 Total net deposits on I w h i c h reserve is computed: Apr. 26 150,738 166,053 72,014 69,841 75,385 27,819 4,625 19,204 50,762 24,240 660,681 May 3 188,0*5 186,741 73,638 70,009 65,524 20,727 10,309 19,140 50,480 22,206 706,809 May 10 181,515 179,900 69,440 66,970 80,007 28,037 10,925 18,148 45,780 i 22,898 703,620 May 17 191,989 184,512 70,893 68,301 60,635 25,904 10,976 16,398 45,328 23,076 698,012 Government deposits: Apr. 26 4,827 8,887 | 2,027 892 1,011 1,881 249 664 723 667 21,828 May 3 6,682 8,599 ! 2,025 722 2,135 2,284 289 641 1,561 564 25,502 Mav 10 15,789 17,800 ! 1,600 1,396 7,845 4,106 292 2,690 1,946 418 53 882 May 17 16,081 27,796 i 4,528 1,451 5,696 4,188 2,831 2,227 1,720 66,914 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JCNE 1,1918. FEDEBA.L RESEBVE BULLETIN. 569 EARNINGS ON INVESTMENTS OF FEDERAL RESERVE BANKS. Average amount of earning assets held by each Federal Reserve Bank during April, 1918, earnings from each class of earning assets, and annual rates of earnings on basis of April, 1918, returns. Average balances for the month of the several classes of earning assets. Bills dis- Banks. a c n o m R d u e e n m F s te e e b r d d v e e r e f r s o a r l Bi m l i l n s a o r b k p o e e u n t g . ht se U cu n r i i t t e i d es. | j w M a u r n ra ic n i t p s. a l ! l Total. Banks. Boston , 355,877,376 $14,283,035 82,403,195 j i §72,563,606 C D N R M P C A S S K a h h t l i e a t a i e . c n l i i l w n n c a v h l l L a n a s a n F e m o a g s d e l Y t r a u s a a a o o e n i o p n l n C s d p c o r d i h i k l t s i i y s c . a . . . o . . . . , . . , 3 4 2 3 5 5 1 3 2 1 7 3 0 9 2 7 8 0 6 3 0 8 5 , , , , , , , , , , , 1 0 7 4 3 3 9 9 1 7 4 5 3 4 4 1 8 5 5 8 1 9 1 7 6 1 4 8 3 8 0 5 4 , , , , , , , , , , , 4 5 1 5 0 5 3 6 0 6 9 8 7 4 0 0 2 3 4 5 0 4 5 5 8 0 6 5 0 2 2 6 2 1 2 2 2 1 2 4 1 1 8 9 5 4 4 3 0 1 5 1 1 , , , , , , , , , , , 6 8 1 5 8 8 3 9 2 6 5 0 7 3 1 3 7 9 4 5 8 7 0 8 3 8 3 7 7 6 0 7 1 , , , , , , , , , , , 2 6 8 0 4 8 3 0 5 5 5 7 7 0 4 9 2 7 9 0 3 5 4 0 4 4 2 6 8 1 5 3 3 2 6 1 1 1 2 8 0 0 2 2 4 2 5 5 7 , , , , , , , , , , , 2 7 9 2 9 3 7 6 0 5 5 8 8 7 8 9 4 9 6 0 4 1 7 2 4 1 4 3 3 2 9 5 1 ,, , , , , , , , , , , 2 9 6 0 4 0 3 6 3 1 5 7 2 4 2 0 0 0 9 8 1 3 2 7 0 7 0 0 0 7 3 3 3 8 4 4 8 9 6 , , 2 4 9 0 8 2 | 5 1 6 6 6 2 3 9 5 3 5 4 3 2 2 7 6 3 1 3 1 7 1 7 , , , , , , , , , , , 1 6 6 6 7 2 0 5 4 4 1 3 2 5 3 7 8 7 3 5 7 5 0 6 1 8 8 0 8 5 6 5 2 , , , , , , , , , , , 1 5 0 4 7 7 7 8 5 1 0 3 9 0 2 3 0 8 3 9 3 3 9 7 0 4 7 1 3 0 3 1 8 Total.... 7-39,259,187 311,984,205 155,588,487 535,700 1,237,367,579 Earnings from- Calculated annual rates of earnings from— Bills dis- Banks. a c n m o B R d u i e e l n F m l s t s e e e b d r d d e v i e s r e f r s - o a r l m i b n o a H o u r i k p g ll e e h s n t t . ip M r a a l u n n w t i s a c . r - - Total, f b c R o F e o r e e r u d s s m n e e a t e r r e n v m a d d e l - m i b n o B a o u r i k p l g l e e h s n t t . se U S cu n ta r i t i t t e e i s d e s, j ip M r a a l u n w n t i s a c . r - - Total. Banks. Banks. I" Per cent. Per cent. Per cent.\ Per cent. Per cent. Boston 8194,203 849,232 $6,547 S249,982 4.09 4.06 3.21 3.85 New York 1,166,930 409,805 219, 547 1,796,282 3.97 4.09 3.91 3.99 Philadelphia... 98,800 80,109 33,531 212,440 4. OS 4.08 3.93 4.05 Cleveland 175,702 83,523 65,952 325,177 4.24 4.14 3.56 4.06 Richmond 136,546 31,122 5,979 173,647 4.14 4.28 2.61 4.08 Atlanta 60,225 33,107 14,899 . 8194 108,425 4.18 4.06 3.53 4.62 4.04 Chicago 266,082 171,329 24,812 462,223 4.15 4.41 2.84 ! 4.14 St. Louis 131,023 37,951 5,945 ! 174,919 4.12 3.99 2.64 4 01 Minneapolis... 39,422 38,191 15,730 93,343 4.71 4.13 3.36 i 4.19 Kansas City... 147,338 37,472 33,988 218,798 4.63 4.06 3.19 4.23 Dallas 81,920 18,413 16,358 1,621 118,312 4.16 4.32 2.84 ; 4.06 3.93 San Francisco. 117,488 80,978 12,240 210,706 4.42 4.04 2.65 4.12 Total 2,615,679 1,071,232 455,528 1,815 4,144,254 4.14 4.18 3.56 4.12 I 4.07 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

570 FEDERAL RESERVE BULLETIN'. JUNE 1.1918. GOLD IMPORTS AND EXPORTS. Gold imports and exports into and from the United States. [In thousands of dollars; i. e., 000 omitted.] Week ending- Total Total for since correspond- A 1 p 9 r 1 . 8 . 26, M 19 a 1 y 8 . 3, M 1 a 9 v 18 1 . 0, M 1 a 9 y 18 . 17, J 1 a 9 n 1 . 8 . 1, in i g n p 1 e 9 r 1 i 7 o . d IMPORTS. Or© and base bullion 100 177 109 137 4,023 5,754 United States mint or assav office bars 9 Bullion refined 576 628 234 241 6,ii8 250,554 United States coin . . 1 2,491 52,077 Foreign coin 10 142 76,910 Total 686 805 343 379 12,774 385,304 EXPORTS. Domestic: Ore and base bullion 6 10 42 99 United States mint or assay office bars. 30 121 151 14,096 Bullion refined 100 4 3 374 1 549 Coin 590 928 368 562 12,533 86,612 Total 590 1,034 402 693 16,100 102,356 Foreign: Bullion refined . 31 Coin 1 1 1 307 4,840 Total 1 1 1 307 4,871 Total exports 591 1,035 403 693 16,407 107,227 Excess of gold exports over imports since Jan. 1, 1918, §3,633; excess of gold imports over exports since Aug. 1, 1914, $1,046,671. DISCOUNT RATES. Discount rates of each Federal reserve bank approved by the Federal Reserve Board up to May 31, 1918. Maturities. Discounts. Trade acceptances. Secured by U. S. certificates of indebtedness or Liberty loan Federal reserve bank. Within 15 Agricul- bonds. days, tural and i m n b c e a l m u n d k b i s e n ' r g 1 d 6 a t y o s 6 . 0 6 d 1 a t y o s 9 . 0 liv o p e v a - e p s r t e o 9 r c 0 k W da i y th s i , n i n 1 - 5 in I c d t l a o u y s 6 s i 0 v , e. in 6 c d 1 l a u t y o s s iv , 90 e. co n l o la t t e e s r . al days. m c b l e a u m n d k i b n s e g ' r 1 d 6 a t y o s 9 . 0 collateral notes. Boston New Yorki... Philadelphia.. Cleveland Richmond Atlanta Chicago St. Louis Minneapolis... Kansas City... Dallas San Francisco. I 1 Rate of 3 to 4J per cent for 1-day discounts in connection with the loan operations of the Government. NOT?: 1.—Acceptances purchased in open market, minimum rate 4 per cent. NOTE 2.—Rates for commodity paper have been merged with those" for commercial paper of corresponding maturities. NOTE 3.—In case the 60-day trade acceptance rate is higher than the 15-day discount rate, trade acceptances maturing within 15 days will be taken at the lower rate. NOTE 4.—Whenever application is made by member banks for renewal of 15-day paper, the Federal reserve banks may charge a rate not exceeding that for 90-day paper of the same class. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDEBAL SESEKVE BULLETIN,, 571 DIGEST AND INDEX. Bankers' Export Acceptances Defined. Where a dealer is engaged in purchasing the same char- In 1917 the Federal Reserve Board published acter of goods for export and for domestic use, a member a " Digest and Index of Opinions of Counsel, bank accepting his draft drawn to finance an export transaction should require proper assurances that proceeds of Informal Eulings of the Federal Eeserve Board, draft are to be used in connection with such export transand Matter Relating Thereto." This was action and that the acceptance will be paid out of procompiled from the Federal Reserve Bulletin ceeds of sale of goods exported. and covered the opinions and rulings for the (Page 314, April, 1918, Bulletin.) year 1915-16. There is herewith presented a Bills, Demand and Sight, When to be Presented. similar digest for the year 1917 and the year Demand and- sight bills of exchange must be presented for payment by the holder within a reasonable time. 1918 to and including April, 1918. The matter Demand and sight bills become due and payable on the has been arranged under the same topics as date on which they are presented for acceptance. were employed in the original Digest and Index. If a member bank holds demand and sight drafts for more than a reasonable time after acceptance, they must ACCEPTANCES. be classed as overdue paper and considered in substance as promissory notes of the acceptor subject to the limita- OPINIONS OF COUNSEL. tions imposed by section 5200. Acceptances, Where Payable. (Page 31, Jan., 1917, Bulletin.} An acceptance to pay at a particular place different Bills Drawn Against Actually Existing Value. from the residence of the acceptor is a general acceptance, A bill of exchange discounted before acceptance may be unless it expressly states that the bill is to be paid there said to be drawn against actually existing value, within and not elsewhere, and does not render the bill nonnego- the meaning of section 13 of the Federal Keserve Act. tiable. (Page 289, April, 1917, Bulletin.) when and only when it is accompanied by shipping Acceptances by Correspondents—When a Direct documents, warehouse receipts, or other papers securing Liability. title to the goods sold. An accepted bill of exchange, Drafts accepted by foreign correspondents at the re- unaccompanied by shipping documents or other such quest, and under the guarantee of a national bank in the papers, may be considered as drawn against actually United States, should be reported as a direct liability of existing value if drawn against the drawee at the time of, such national bank, and should be treated as subject to or within a reasonable time after, the shipment or delivery the limitations imposed by the Federal Reserve Act on of the goods sold. In this latter case there must be reasonthe acceptance power of national banks. able grounds to believe that the goods are in existence in the hands of the drawee either in their original form or in (Page. 311, April, 1918, Bulletin.) the shape of the proceeds of their sale. Bankers' "Dollar Exchange" Acceptances. (Page 195, Mar., 1917, Bulletin.) The 50 per cent limit imposed upon the amount of drafts Bills Payable to the Order of the Drawee. which a member bank may accept for the purpose of fur- A bill made payable to the order of the drawee is not nishing dollar exchange is separate and distinct from and negotiable "until the drawee as payee has indorsed it. not included in the limits imposed by section 13 upon the When it has been accepted and indorsed by the drawee amount of drafts or bills of exchange drawn against the it is a valid negotiable instrument in the hands of a third shipment of goods or against warehouse receipts covering party, and the drawer is not released, since the terms of readily marketable staples, which a member bank may his order have been specifically complied with. accept. (Page 528, July, 1917, Bulletin.) (Page 110, Feb., 1918, Bulletin.) Bankers' Acceptances Without Documents, as "Accom- Drafts with Documents Attached—Conveyance of Title, modation." Under the provision of section 13, which authorizes The acceptance of a draft by a member bank against an any member bank to accept drafts based upon domestic acceptance agreement which purports to assign to the shipment of goods, provided shipping documents conbank certain collateral security, but which does not speveying or securing title are attached, such documents cifically mention any security as assigned, is an ordinary must be made out or indorsed so as to convey or secure accommodation acceptance, and is not authorized by law. title to the accepting bank. (Page 311, April, 1918, Bulletin.) (Page 198, Mar., 1918, Bulletin.) Bankers' Domestic Acceptances, Eligibility of. Drafts, Interest on. A draft drawn by the purchaser of goods against a na- A provision in a draft or bill of exchange that it is paytional bank is not eligible for acceptance by that bank able "with interest at the rate of — per cent per annum under the provisions of section 13 of the Federal Reserve after maturity if payment is delayed " does not affect the Act merely because it is secured by a bill of lading cover- negotiability of the instrument. (Page 200, Mar., 1917, Bulletin,) ing the goods bought. (Page 380, May, 1917, Bulletin.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

572 FEDERAL RESERVE BULLETIN. JUNEI, 192 8. I Drafts Payable on or Before Certain Date. Trust Receipts as Actual Security for Acceptance Trans- Drafts payable "ninety'days from date or before on five actions. days after demand (i. e. s on live days' notice) by the holder If an acceptance is secured by shipping documents hereof" are negotiable and eligible for discount with a which are surrendered by the acceptor for a trust receipt Federal Reserve Bank. which permits the purchaser of the goods to retain control (Page 291, Apr., 1917, Bulletin.) of the goods, the accepting bank can not be said to be Drafts to Finance Sales to the United States Government. secured "by some other actual security" as provided in section 13 of the Federal Reserve Act. A trust receipt, Drafts drawn in connection with sales to the United however, which does not permit the purchaser to procure States Government of lumber or other material can not be control of the goods, may properly be said to be actual treated as bills of exchange drawn against actually existing security within the meaning of the act. value and are subject to the limitations of section 5200, (Page 881, Nov., 1917, Bulletin.) Revised Statutes, when discounted by national banks. Such drafts do not conform to the requirements of com- INFORMAL RULINGS. modity paper as defined by the Federal Reserve Board and should not be discounted at the rate prescribed for such Acceptance Given by Acceptance House or Broker. paper. (Page 32, Jan., 1918, Bulletin.) The note of an acceptance house or broker could not Drafts Drawn on Sales Corporations. be said to have been used for an industrial, agricultural, A draft drawn by a lumber corporation UJJOII a sales cor- or commercial purpose, since the business of such acceptporation which it and a number of other lumber concerns ance house or broker is not such as to come within any of have organized will, when accepted, become a trade these classifications. The fact that the note is secured acceptance, even though the selling corporation is a stock- by eligible paper is immaterial if the proceeds are not holder of the sales corporation, provided the latter is used for one of the purposes mentioned. organized in good faith and not merely to act as an agent (Page 108, Feb., 1918, Bulletin.) for the purpose of evading the law. (Page 33, Jan., 1918, Bulletin.) Acceptances—Exports Defined. Drafts with Documents Attached—Definition. Clean drafts drawn by an exporter in Chile for the purpose of providing funds with which to purchase beans, A provision of section 13 which authorizes any member peas, etc., from farmers in Chile, are ineligible unless the bank to accept drafts based upon the domestic shipment Chilean exporter is under contract to ship the peas, beans, of goods, provided shipping documents are ''attached," etc., purchased from the farmers in that country, to some should not be construed so as to require that the documents other country, and the member bank has a guarantee to be physically fastened to the draft. It is sufficient if this effect. " (Page 378, May, 1917, Bulletin.) the accepting bank has possession of the documents at the time of acceptance. (Page 765, Oct., 1917, Bulletin.) Bankers' Acceptances Drawn Against Future Importa- Member Banks' Acceptances, Status of. tions. An acceptance which has been purchased by the A national bank may properly accept a draft drawn for accepting bank and subsequently rediscounted with its the purpose of importing goods whether or not the sale Federal Reserve Bank is not subject to the limitations of of the goods under consideration has actually been consection 5200 of the Revised Statutes. summated at the time of the acceptance of the draft, (Page 696, Sept., 1917, Bulletin.) (Page 527, July, 1917, Bulletin,) Trade Acceptances Based on Advertising Space. Bankers' Acceptances—When Drawn Against Exports. The Federal Reserve Board may properly rule that a draft or bill of exchange drawn by the seller on the pur- No national bank can legally accept a draft drawn upon chaser of advertising space and accepted by such purchaser it by an acceptance house which pledges as collateral is a trade acceptance. (Page 116, Feb., 1917, Bulletin.) security for the bill an acceptance based upon a transaction involving the importation or exportation of goods. Trade Acceptance Providing for Discount if Paid at Maturity. (Page 28, Jan., 1917, Bulletin.) A trade acceptance which consists of an order to pay Bankers' Acceptances Drawn Against Shipment of Goods a certain amount, which is the amount of the debt minus from a Corporation to its Agent. a discount for prompt payment at maturity, or, if not paid at maturity, to pay a greater amount, which is the A member bank may properly accept a draft drawn amount of the debt without any discount, is an order to against the shipment of goods from a corporation to its pay a sum certain and is negotiable. agent or branch even though no sale of the goods is involved (Page 200 Z-.I&r., 1918, Bulletin.) in the transaction. (Page 690, Sept., 1917, Bulletin.) ; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1, 1918. FEDEEAL RESERVE BULLETIN. 573 ! Bankers' Acceptances Against Bullion. Drafts Drawn "On or Before 90 Days After Sight." Gold bars may be properly considered as goods, and Bills drawn "on or before 90 days after sight" should accordingly 60-day bills when accepted by banks and not be encouraged or countenanced. bankers against such a shipment would be eligible for (Page 949, Dec, 1917, Bulletin.) purchase by Federal Reserve Banks as based upon or Draft, Form of. involving the exportation of goods. A draft made payable at sight and accepted by the (Page 29, Jan., 1917, Bulletin.) drawee is negotiable even if it contains the following pro- Bankers' Acceptances —Security Therefor. vision: "With interest at the rate of 6 per cent per annum if payment is delayed." There is no objection to permitting the mills to substitute (Page 109, Feb., 1918, Bulletin.) other warehouse receipts for cotton receipts during the life of the acceptance. In purchasing or discounting bankers' Limitations Under Section 5200 E. S. acceptances or other bills which are secured hy warehouse Where a national bank has already loaned 10 per cent of receipts, etc., Federal Reserve Banks should make sure its capita] and surplus to a certain company, it may. while that the receipt is issued hy a warehouse which is inde- the loan is still outstanding, obligate itself as acceptor pendent of the borrower. If the credit were granted before on a draft drawn by that same company. The limitations the importation took place, there would be no objection of section 5200 on the amount of money which may be to continuing or renewing the acceptance while the goods borrowed from a member bank are separate and distinct are on the docks. (Page 30, Jan., 1917, Bulletin.) from and in no way restrict the limitations "of section 13 of the Federal Reserve Act on the amount of drafts which Bank's Own Acceptances, Purchase of. a member bank might accept for any one firm or corpora- A member bank's own acceptances purchased by it tion. (Page 197, Mar., 1918, Bulletin.) must be treated as loans and as such are subject to the 10 per cent limitation. (Page 28, Jan., 1917, Bulletin.) Limitations Imposed by Section IS of Act. The right of the bank to resell or reissue such accept- In any case where shipping documents or warehouse ances is, in the opinion of counsel, fully recognized by the receipts are held by the acceptor the 10 per cent limit does authorities, and where this is done they may be treated as not apply; so also in any case where the acceptor holds a acceptances outstanding and not as loans. trust receipt which does not enable the borrower to obtain (Page 691, Sept., 1917, Bulletin.) the goods for his own use, the 10 per cent limit does not apply; but in any case where the bank holds merely the Bills Drawn Against Coin. ordinary trust receipt which gives it only a lien on the Gold coin is "goods" within the meaning of section 13 goods in the hands of the purchaser or on their proceeds, of the Federal Reserve Act, and therefore a bill of exchange the 10 per cent limit should apply. drawn to finance a shipment of gold coin from this country (Page 286. Apr., 1917. Bulletin.) either to Europe or to Canada is eligible for purchase by a Syndicate Acceptance Credits. Federal Reserve Bank if otherwise in conformity with The Board has authorized expression of its views in the provisions of law and the regulations of the Federal Reaccordance with the principles outlined in a memorandum serve Board. (Page 29, Jan., 1917, Bulletin.) attached. The banks of New York may, during a period Differential as to Acceptances. which can be declared ended at any time, proceed upon the basis of this memorandum. The essential principles There is no objection to a moderate differential, say may be summed up as follows: one-fourth of 1 per cent, to apply between member-bank (1) Acceptance credits opened for periods in excess of acceptances and the acceptances of large nonmember 90 days should only, in exceptional cases, extend over a institutions well known throughout the country and period of more than one year, and in no case for a time whose acceptances necessarily have a broad market. exceeding two years. (Page 28, Jan., 1917, Bulletin.) (2) Banks which are members of groups opening these Drafts Drawn to Finance Sale of Goods to Allied Pur- credits should not buy their own acceptances, and where chasing Commissions. an agreement is made with the drawer for purchase of ac- Even if this transaction did not involve the exportation ceptances for future delivery, the rate should not be a fixed of goods a member bank might accept a draft drawn for the one, but should be based upon the rate ruling at the time purpose of financing it if it involved a domestic shipment of the sale. of goods and if the shipping documents are attached at the (3) Transactions covered by these credits should be of a time of acceptance. An acceptance of that character legitimate commercial nature, and acceptances must be would seem to be permissible in any case where the goods eligible according to the rules and regulations of the Board. are shipped from the interior to the seaboard preparatory (4) Whenever syndicates are formed for the purpose of to exportation. (Page 878 Nov.. 1917, Bulletin.) granting acceptance credits for more than moderate r Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

574 FEDERAL RESERVE BULLETIN. JUNE 1,1918. amounts, Federal Reserve Banks should be consulted with Insurance Premium—Trade Acceptance Against Insurance. regard, to the transaction. The question of eligibility, A draft drawn by a casualty company against a policy bothjfrom the standpoint of the character of the bill and holder for premiums could hardly be said to be a draft by of the amount involved, will be passed upon by the Fedthe seller on the purchaser of goods sold and would not, eral Reserve Bank subject to the approval in each case of in the opinion of the Board, come within the Board's the Federal Reserve Board. present definition of a trade acceptance. (Page 257, Apr., 1918, Bulletin.) (Page 309, Apr., 1918, Bulletin.) Trade Acceptances Defined. Trade Acceptances, Conference on. Only those trade acceptances which are drawn at the On March 9 the National Credit Men's Association held time of, or within a reasonable time after, the shipment or a conference on trade acceptances at the Hotel Astor, in delivery of goods sold can be treated as bills of exchange New York City, at which the trade acceptance question drawn against actually existing value. was discussed from a variety of angles. Extracts from the (Page 287, Apr 1917., Bulletin.) addresses of some of the speakers are presented. v (Page 243, Apr., 1917, Bulletin.) Trade Acceptances for Advertising. Warehouse Receipts, A draft or bill of exchange drawn by a publisher, or Warehouse receipts offered as security for bills accepted other advertising agency, on the purchaser of advertising by member banks under authority of section 13 of the space and accepted by such purchaser shall be considered Federal Preserve Act must be issued by warehouses which a trade acceptance, provided the advertisement on which are independent of the borrower. The corporation issuing the draft or bill is based is for the purpose of promoting or such receipt must be organized in good faith as an infacilitating the production, manufacture, distribution, or dependent corporation, and its affairs must be adminissale of goods, wares, merchandise, or agricultural products, tered by duly authorized officers and agents independent including live stock; and provided further that such of the borrower in order to comply with the rulings of the advertisement is not illegal and is not for the purpose of Board referred to. (Page 31, Jan., 1918, Bulletin.,) promoting or facilitating any transaction which is prohibited by the laws of the State in which it is to be con- ACCOUNTING. summated. (Page 114. Feb., 1917, Bulletin.) Accounts, Uniformity of. Trade Acceptance, Where Payable. | A tentative proposal submitted by the Federal Reserve Board for the consideration of banks, bankers, and banking If the terms of the original draft make it payable at the associations; of merchants, manufacturers, and associations banking house of the drawee the drawee may nevertheless of manufacturers; and of auditors, accountants, and assoaccept it payable elsewhere—as, for example, at a Federal ciations. The problem naturally subdivides itself into Reserve Bank—provided the acceptance does not stiputwo parts. (1) The improvement in standardization of late in terms that it is payable only at the Federal Reserve the forms of statements; (2) the adoption of methods which Bank and not elsewhere. will insure greater care in compiling the statements and (Page 379, May, 1917, Bulletin.) the proper verification thereof. Trade Acceptances of Retailers. (Page 270, Apr., 1917, Bulletin.) A bill of exchange drawn by the seller of goods and Basis for Figuring Interest for Rediscount Transactions. accepted by the purchaser of those goods is a trade accept- In connection with rediscounts with Federal Reserve ance, regardless of whether or not the purchaser intends Banks, the point has been raised by one bank that it is to resell the goods or to use them for his own purpose. its habit to figure discounts on a basis of 360 days to the (Page 30, Jan., 1918, Bulletin.) year. It has been decided that for rediscounts on transactions between Federal Reserve Banks the basis of 365 Trade Acceptance Against Costs of Installation. days to the year should be applied. It is customary for the seller of certain goods to contract (Page 109, Feb., 1918, Bulletin.) for their installation and to include the cost of installation in the selling price. In the opinion of the Board an ac- Discount, Method of Computing. ceptance drawn for the purchase price, including cost of Aside from the fact that New York and Boston Federal installation, would come within the Board's definition of Reserve Banks figure discount on a 365-day basis while all a trade acceptance. (Page 310, Apr., 1918, Bulletin.) the other Federal Reserve Banks use 360 days, the methods used by the Federal Reserve Banks do not vary. Discount Trade Acceptances, Eligibility of, for Hediscount. is computed on the actual number of days the paper has The trade acceptance is an instrument which carries to run, the date of payment of course varying in different upon its face the evidence of the commercial character of States in accordance with the laws regarding holidays in the transaction which gave it birth. force in the different jurisdictions. (Page 109, Feb., 1918, Bulletin.) (Page 951, Dec, 1917, Bulletin.) 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JUNE 1, 1918. FEDERAL RESERVE BULLETIN. 575 ADVISORY COUNCIL, MEETINGS OF. ber banks to carry accounts with Federal Reserve Banks for clearing or collection purposes. Meeting of Federal Advisory Council, Apr. 16,1917. (Page 879, Nov., 1917, Bulletin.) (Pago*340. May, 1917, Bulletin.) Meeting of Federal Advisory Council, Nov. 19, 1917. Bill of Lading Drafts. (Page 921, Dec, 1917, Bulletin.) Undertaken by several of the Federal Reserve Banks as Meeting of Federal Advisory Council, Feb. 18, 1918. a collection transaction. The drafts are credited upon (Page 160, Mar... 1918, Bulletin.) receipt and when paid the sending bank is charged interest at the published rate for the time the draft is outstanding AMENDMENTS TO THE FEDERAL RESERVE ACT. plus the actual cost of collection. (Page 114, Feb., 1917, Bulletin.) Te"xt of amendments to Federal Reserve Act as introduced in Congress, 1917, and statements relating thereto. Checks Payable in Exchange. (Page 98, Feb., 1917, Bulletin.) Federal Reserve Banks directed not to handle checks Text of a memorandum transmitted to it by Mr. James which are drawn payable in exchange at current rates or B. Forgan, president of the Federal Advisory Council, in any other way than an absolute and unconditional expressing the views of that body with reference to the order to pay in money. If any individual or any bank proposed amendments to the Federal Reserve Act, 1917. sees fit to receive a check which is nothing more than an (Page 106, Feb., 1917, Bulletin.) order for exchange, he does so with his eyes open and with Comparative Senate and House bills amending Federal the full knowledge that an exchange charge will be im- Reserve Act, 1917. (Page 177, Mar., 1917, Bulletin.) posed. (Page 763, Oct., 1917, Bulletin.) Senate report on amendments, 1917. | Immediate Availibility of Drafts. (Page 188, Mar., 1917, Bulletin.) House report on amendments, 1917. I Board suggests that all member banks be permitted to | participate in the arrangement, with a limitation of (Page 191, Mar., 1917, Bulletin.) I $10,000 per day as the total that may be drawn by any Bill authorizing the granting of Federal charters to banks j one bank. (Page 78, Feb., 1917, Bulletin.) organized for the purpose of engaging in foreign trade. (Page 450, June, 1917, Bulletin.) | Federal Reserve Drafts. Amendments as passed by House and stricken out in i Forms of special drafts on Federal Reserve Banks pre- Senate. (Page 441, June, 1917, Bulletin.) pared and sent to the 12 Federal Reserve Banks, with the Synopsis of amendments to Federal Reserve Act as necessary suggestions as to their use. approved June 21, 1917. (Page 347, May, 1917, Bulletin.) (Page 509, July, 1917, Bulletin.) Text of amendments to Federal Reserve Act as approved Other Citations on Collections. June 21,1917. (Page 511, July, 1917, Bulletin.) Development of the collection system. (Page 660, Sept., 1917, Bulletin.) BRANCH BANKS AND AGENCIES. Collection of notes and bills in New York. (Page 743, Oct., 1917, Bulletin.) Bank of England appointed as foreign agent. (Page 5, Jan., 1917, Bulletin.) CLAYTON ACT. Bank of France as foreign agent. Advisory Committee of Member Banks. (Page 175, Mar., 1917, Bulletin.) The members of an advisory committee of a national Philippine National Bank as foreign agent. bank are not necessarily officers, directors, or employees of (Page 239, Apr., 1917, Bulletin.) such bank within the meaning of section 8 of the Clayton Branches of Federal Reserve Banks at New Orleans. Antitrust Act. They can not be directors unless elected Seattle, Portland, Spokane, Louisville, Cincinnati, Pittsby the shareholders; and whether they are officers or emburgh, Detroit, and Baltimore. ployees depends entirely on the scope of the rights and (Page 10, Jan., 1918, Bulletin.) I duties assigned to them by the board of directors. By-laws for use in branch banks. (Page 586, Aug., 1917, Bulletin; page 934, Dec, (Page 118, Feb., 1917, Bulletin.) 1917, Bulletin.) Duration of Permits. Where the Federal Reserve Board has once granted per- CHECK CLEARING AND COLLECTION. mission to a person to serve at the same time as a director of two or more institutions under the provisions of the Advertisments of "Clearing Members." Kern amendment to section 8 of the Clayton Act, that A bank, in advertising, should be careful to avoid giving permission is continuing and good until revoked by the a wrong impression, but there is no objection, legally or Federal Reserve Board. morally, to its stating facts. The law authorizes nonmem- ! (Page 763, Oct., 1917, Bulletin.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

578 FEDERAL BESEBVE BULLETIN. JUNE 1, 1918. Morris Plan Bank. Holding Over of Federal Reserve Bank Directors. Ruled that a Morris plan bank is a "bank" within the A director of a Federal Reserve Bank has no authority meaning of section 8 of the Clayton Antitrust Act and that to continue to serve as such after the expiration of his word as used in that part of section 4 of the Federal Reserve term even though his successor has not been elected. Act which reads as follows: (Page 290, Apr., 1917, Bulletin.) ''No director of class C shall be an officer, director, or DISCOUNT BATES. employee, or stockholder of any bank " must be construed to include a Morris plan bank. Readjustment of Discount Rates. (Page 527, July, 1917, Bulletin.) New schedule of discount rates developed, as follows: 1. Paper maturing within 15 days, including member "Substantial Competition" Within the Meaning of the banks' collateral notes. Clayton Act. 2. Paper maturing within 18 to 60 days, A director of a national bank now serving with a trust 3. Paper maturing within 61 to 90 days. company would not be required to resign in case the trust 4. Trade acceptances maturing within 60 days. company should become the purchaser of bankers' accept- 5. Trade acceptances maturing within 61 to 90 days. ances or of first-class commercial paper, but did not other- 6. Bankers' acceptances maturing within 90 days. wise come into competition with the national bank. 7. Commodity paper maturing within 90 days. (Page 878, Nov., 1917, Bulletin.) 8. Agricultural and live stock paper maturing within 90 to 180 days. Status of State Banks Under Clayton Act—Opinion of (Page 241, Apr., 1917, Bulletin.) Attorney General. Rediscount of Notes Secured by Bonds. State banks or trust companies may have common offi- On May 22, after consideration of the question how the cers and directors with other State banks and trust com- Federal Reserve Banks could best participate in furthering panies whether or not any of such banks or trust companies the progress of the Liberty loan, the Federal Reserve Board are members of the Federal Reserve System. National determined upon the establishment of a rate of 3-J per cont banks, however, and banks and trust companies doing for the rediscount of customers' notes of not to exceed 90 business in the District of Columbia, can not have as offi- days' maturity, secured by Treasury certificates or Liberty cers or directors, officers or directors of any other bank Loan bonds. (Page 429, June, 1917, Bulletin.) or trust company which is lcated in the same city of more than 200,000 inhabitants, or which has deposits, capital, DIVIDENDS, EARNINGS, AND EXPENSES OF surplus and undivided profits aggregating more than FEDERAL RESERVE BANKS. 35,000,000, regardless of its location (unless permission Dividends declared by Federal Reserve Banks. so granted by the Federal Reserve Board, under authority (Page 4, Jan., 1917, Bulletin; page 507, July, 1917, if the Kern amendment to section 8 of the Clayton Act). Bulletin; page 5, Jan., 1918, Bulletin.) This is true whether or not such a State bank or trust com- Earnings and expenses of the Federal Reserve Banks pany is a member of the Federal Reserve System. for the year 1916. (Puge 89, Feb., 1917, Bulletin.) (Page 744, Oct., 1917,"Bulletin.) Earnings and expenses of the Federal Reserve Banks i for the six months ending June 30, 1917. DIRECTORS, ELECTION OF. | (Pago 605, Aug., 1917, Bulletin.) Earnings and expenses of the Federal Reserve Banks Directors of branches of Federal Reserve Banks should |for the year 1917. (Page 99, Feb., 1918, Bulletin.) be elected annually. (Page 31, Jan., 1918, Bulletin.) Rights of Liquidating National Bank to Accrued Dividends. Class C directors appointed for 1917. Any national bank which liquidates and reorganizes as (Page 7, Jan., 1917, Bulletin.) a State bank forfeits its rights to accrued dividends from Class A and B directors elected for 1917. its Federal Reserve Bank. Such rights do not survive in (Page 7, Jan., 1917, Bulletin.) favor of such State bank, even though it immediately be- List of directors whose terms expire in 1917, and in- comes a member bank. structions for election. (Page 117, Feb., 1917, Bulletin.) (Page 743, Oct., 1917, Bulletin.) EXPENSES OF FEDERAL RESERVE BOARD. Class C directors appointed for 1918. (Page 13, Jan., 1918, Bulletin.) Assessment by the Federal Reserve Board for expenses Class A and B directors elected for 1918. from January 1 to June 30, 1917. (Page 14, Jan., 1918, Bulletin.) (Page 23, Jan., 1917, Bulletin.) Directors of branch banks named. Receipts and disbursements. Federal Reserve Board, (Page 14, Jan., 1918, Bulletin.) 1916. (Page 87, Feb., 1917, Bulletin.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. EEDEEAL EESEKVE BULLETIN. 577 Assessment by the Federal Reserve Board for expenses Use of Note Emblem. from July 1 to December 31, 1917. The act of March 4, 1909, provides in part that whoever (Page 525, July, 1917, Bulletin.) shall print, photograph, or in any other manner make or Assessment by Federal Reserve Board for expenses execute any engraving, photograph, print, or impression from January 1 to June 30, 1918. in the likeness of any such obligation or other security, or (Page 24, Jan., 1918, Bulletin.) any part thereof, except by direction of some proper officer or the United States, shall be fined not more than §5,000, FEDERAL RESERVE AGENTS, MEETINGS OF. or imprisoned not more than 15 years, or both. (Page 194, Mar., 1917, Bulletin..) Meeting of Federal Reserve agents in Washington, j December 4, 1917. (Page 4, Jan., 1917, Bulletin.) FIDELITY BONDS. Meeting of Federal Reserve agents in "Washington, February 26, 1918. (Page 160, Mar., 1918, Bulletin.) Bonds of Federal Reserve Agents. In view of joint custody and control on the part of FEDERAL RESERVE NOTES. Federal Reserve agents and Federal Reserve Banks over unissuedfFederal Reserve notes, and certain funds as Custody of Gold, Lawful Money, and Federal Reserve provided;'by the Federal Reserve Act as amended June 21, Notes. 1917, the Federal Reserve Board has decided that it will These funds should be kept in safes, preferably with not require bonds of Federal Reserve'agentsjand assistant two locks, each with a different combination, one in the Federal Reserve agents in as large amounts as heretofore. control of the Federal Reserve Agent and his representa- It has prescribed as minimum bonds: For Federal Reserve tive and the other in the control of the officers of the bank. agents, $100,000; for assistant Federal Reserve agents, As the Federal Reserve Bank is jointly liable for the safe- 550,000. Should the directors of any Federal Reserve keeping of funds, a joint record should, be kept of all Bank deem it desirable to require larger bonds, no objectransactions. (Page 691, Sept., 1917, Bulletin.) tion will be made by the Board to such action. (Page 615, Aug., 1917, Bulletin.) Redemption of Federal Reserve Notes, Federal Reserve Banks should ask their member banks FIDUCIARY POWERS. to continue to pay out Federal Reserve notes as long as they are reasonably fit for use, and to refrain from sending Litigation Involving Constitutionality of Section II (k). notes to Washington for redemption unless they are so The case of Grant Fellows, attorney general of Michigan, worn or soiled as to be actually unfit for circulation. ex rel. The Union Trust Company et al. v. The First (Page 310, Apr., 1918, Bulletin.) National Bank of Bay City, Mich., instituted in the Su- Shipment of Unfit Notes. preme Court of the State of Michigan, discussed. The Federal Reserve Board and the Treasury Depart- (Page 32, Jan., 1917, Bulletin.) ment have agreed upon a plan whereby Federal Reserve Decision of United States Supreme Court in case brought Banks may forward unlit Federal Reserve notes of other to test the constitutionality of section 11 (k) of the Federal Federal Reserve Banks directly to Washington for redemp- Reserve Act. (Page 534, July, 1917, Bulletin.) tion. (Page 82, Feb., 1917, Bulletin.) Delaware—Fiduciary Authority of National Banks. It has been decided that in the case of shipments of unfit Bill passed by the Delaware Legislature authorizing notes to Washington, Federal Reserve notes should be national banks to act as trustee, executor, administrator, included with classes of currency on which the transand registrar of stocks and bonds. portation charges should be assessed against the sender. (Page 528, July, 1917, Bulletin.) Hitherto charges have been paid by the Government on | unfit national bank notes, Federal Reserve notes, and | Georgia Law as to Fiduciary Powers. Federal Reserve bank notes when shipped in "collect." j Bill passed by the Georgia Legislature authorizing na- A change in this plan has now been authorized by the ! tional banks located in Georgia to act as trustee, executor, Treasury Department. administrator, and registrar of stocks and bonds. (Page 212, Apr., 1917, Bulletin.) (Page 767, Oct., 1917, Bulletin.) Substitution of Collateral. Washington Laws Authorizing National Banks to Act as For the assistance of Federal Reserve Agents in making Trustees. substitutions of paper or deposits of gold or lawful money Act of the Legislature of the State of Washington, apwhen the original pledge is collectible, the Federal Reserve proved March 10, 1917, permitting national banks located Board on April 12 sent out a letter providing for substitu- in Washington to exercise the powers of a trust company. tion of securities. (Page 351, May, 1917, Bulletin.) (Page 697, Sept., 1917, Bulletin.N. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

578 FEDEKAL RESERVE BULLETIN. JUNBl, J918. GOLD SETTLEMENT FUND. National-Bank Examinations. Change in Operation of Fund. The Comptroller of the Currency instructs national-bank Important changes in the operation of the gold settle- examiners to leave with each national bank upon the comment fund were made possible by the approval on June 21, pletion of its examination, a bill covering its assessment 1917, of the amendments to the Federal Reserve Act. for the examination, with instructions that the national Section 16 of the amendments was recommended to Con- banks deposit with the Federal Reserve Bank of their disgress for the purpose of simplifying the operation of the trict, in the name of the Comptroller of the Currency, to fund, which has grown to such proportions as to make the the credit of the Treasurer of the United States, the amount handling of the gold certificates evidencing the deposits of of the bill. (Page 374, May, 1917, Bulletin.) Federal Reserve Banks and Federal Reserve Agents a heavy responsibility. The fund has grown from about One hundred largest national banks in the United States. $20,000,000, when its operation began in May, 1915, to (Page 19, Jan., 1917, Bulletin.) $523,410,000. (Page 521, July, 1917, Bulletin.) The Comptroller of the Currency announces that in future calls for reports of condition, national banks will GOVERNORS, MEETINGS OF. not be required to make detailed statements of the various Meeting of Governors of Federal Reserve Banks in classes of money in their vaults according to the schedules Washington, December 11, 1916. heretofore used. (Page 604, Aug., 1917, Bulletin.) (Page 7, Jan., 1917, Bulletin.) Statement of the Comptroller of the Currency regarding Meeting of Governors of Federal Reserve Banks in bank failures. (Page 939, Dec, 1917, Bulletin.) Washington, April 4, 1917. (Page 347, May, 1917, Bulletin.) OFFICERS AND EMPLOYEES OF BANKS. Meeting of Governors of Federal Reserve Banks in Washington, November 8, 1917. Exemption from Military Service. (Page 921, Dec, 1917, Bulletin.) Exemption for its own employees and those of Federal Meeting of Governors of Federal Reserve Banks in Reserve Banks from military service will not be generally Washington, March 22, 1918. asked by the Federal Reserve Board. (Page 256, Apr., 1918, Bulletin.) (Page 591, Aug., 1917, Bulletin.) NATIONAL BANKS. Group Insurance. There is no objection to the taking out of group insurance Usurious Charges by National Banks. covering the employees of Federal Reserve Banks. Where a national bank, in addition to charging interest (Page 28, Jan., 1917, Bulletin.) at the highest legal rate, requires a borrower to give an additional note, accept a certificate of deposit for a like OPEN-MARKET TRANSACTIONS. amount, and put up such certificate as additional collateral to his entire loan the transaction appears to be usurious. Member Banks, Purchase of Warrants from. (Page 292, Apr., 1917, Bulletin.) The fact that Paragraph VII of Regulation E, series'of 1916, authorizes any Federal Reserve Bank to purchase Government Financing, Duty of National Banks. warrants which comply with only Paragraphs I and III of National banks were created primarily to assist the Regulation E, from any of its members, provided that they Government in the conduct of its fiscal affairs, and in are indorsed by the member bank and do not exceed 10 performing the various services incident to the marketing per cent of its capital and surplus, does not of itself proof Liberty bonds, war-savings stamps, thrift stamps, and hibit a Federal Reserve Bank from purchasing warrants any other obligations of the Government, they are carryfrom a member bank in excess of that 10 per cent limit if ing out one of the fundamental purposes for which they they comply with all the other provisions of Regulation E. were created. (Page 313, Apr., 1918, Bulletin.) (Page 29, Jan., 1917, Bulletin.) Banks as Insurance Agents. Regulations under which national banks may act as Nonnegotiable Warrants, Purchase of. insurance agents and as brokers or agents in making or The Board has consistently adhered to its policy of not procuring loans on real estate under the amendment cov- undertaking to pass upon the legality of issue of any muering such action passed by Congress in 1916, issued from nicipal securities. The Board is further of the opinion the office of the Comptroller of the Currency. No such that a Federal Reserve Bank should not buy a nonnegobank shall in any case guarantee either the principal or tiable warrant, and it would suggest further that in coninterest of any such loans or assume or guarantee the sidering the purchase of warrants issued by a municipality payment of any premium on insurance policies issued it would be well to ascertain what the sinking fund requirethrough its agency by its principal or guarantee the truth ments are with reference to bonded obligations of the of any statement made by an assured in filing his applica- municipality and whether or not these requirements are cation for insurance. (Page 164, Mar., 1917, Bulletin.) being complied with. (Page 193, Mar., 1917, Bulletin.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL RESERVE BULLETIN, 579 Warrants, Eligibility of. States and rediscounted under the provisions of section 13 The Federal Reserve Board may, under the provisions are eligible as collateral security for the issue of Federal of Regulation E, series of 1916, authorize Federal Reserve Reserve notes. (Page 459, June, 1917, Bulletin.) Banks to purchase warrants which are issued in anticipa- Indorsement on Bill of Exchange. tion of the collection of taxes and which mature after the date on which such taxes are due but before the penalty- An indorsement on a bill of exchange which expressly attaches for their nonpayment, if experience has demon- exempts the indorser from any responsibility for the strated that the due date produces sufficient taxes to pay validity or genuineness of an accompanying bill of lading the warrants at maturity. or other paper or for the quality, quantity, or delivery of (Page 32, Jan., 1917, Bulletin.) goods covered thereby, does not render the bill nonnegotiable or ineligible for purchase by a Federal Reserve PAPER ELIGIBLE FOR REDISCOUNT. Bank. (Page 457, June, 1917, Bulletin.) Bonds or Notes of the United States as Security for Re- Public-Service Corporation Paper. discounted Paper. Notes given in payment of material or supplies which are Any member bank may rediscount with its Federal necessary to enable the public-service corporation to fur- Reserve Bank a note, draft, or bill drawn for the purpose nish goods (light, heat, or power) which it sells the public, of carrying or trading in bonds or notes of the United and for which the public will pay at- the end of 30 or 60 day States, and may also procure advances from its Federal periods, might be regarded as eligible, provided the state- Reserve Bank on its own promissory note secured by a ment of the corporation shows a satisfactory proportion of deposit of or pledge of bonds or notes of the United States. cash and accounts receivable against current liabilities. (Page 158, Mar., 1917, Bulletin.) (Page 949, Dec, 1917, Bulletin.) Demand Notes. Real Estate Mortgage, Eligible Paper Secured hy. A note made payable "on demand, and if no demand is A note, draft, or bill of exchange drawn for commercial made, then on ," is eligible for rediscount by a purposes and otherwise eligible for rediscount under the Federal Reserve Bank, provided the date to be filled in provisions of section 13 of the Federal Reserve Act is not is not more than 90 days from the date of discount, and rendered ineligible merely because it is secured by a provided further it conforms to the other provisions of law mortgage on real estate. (Page 458, June, 1917, Bulletin.) and the regulations of the Board. (Page 527, July, 1917, Bulletin.) Rediscount of Participation Certificate. Demand Paper Not Eligible for Rediscount. There is no provision in the Federal Reserve Act which The board has ruled that a demand note or bill is not authorizes a Federal Reserve Bank to rediscount a certifieligible under the provisions of the act, since it is not in cate of participation in a note, because even though the terms payable within the prescribed 90 days, but, at the original note is eligible for rediscount, a participation option of the holder, may not be presented for payment certificate nevertheless is nothing more than the evidence until after that time. (Page 378, May, 1917, Bulletin.) of an equitable., interest in that original note, and does not in any way represent a legal claim against the maker Exchange and Collection Charges, Bills Payable with, of the note. (Page 949, Dec, 1917, Bulletin.) Not Negotiable. A bill made payable with "collection charges" is not a Renewal of Short-Term Paper. negotiable instrument, though the Negotiable Instruments While the Board does not wish to prohibit the renewal of Law provides that an instrument payable'' with exchange'' a 15-day note, it feels that the renewal should be an excepdoes not lose its negotiability. tion rather than the rule. (Page 880, Nov., 1917, Bulletin.) (Page 879, Nov., 1917, Bulletin.) Finance or Credit Companies, Notes of. Short-Time Commercial Paper. The note of a finance or credit company which is drawn either directly or indirectly to finance some industrial or Short-time commercial paper to run not longer than commercial concern in the transaction of its business is not four instead of six months was advocated by the Federal eligible for rediscount, even though it may be secured by Reserve Board in a letter sent to Federal Reserve Banks paper which is itself eligible for rediscount. on September 17, 1917. (Page 197, Mar., 1918, Bulletin.) (Page 739, Oct., 1917, Bulletin.) Government Obligations, Notes and Bills Drawn for Treasury Certificates and Bonds as Security for Redis- Trading in. count. Notes, drafts, and bills of exchange drawn for the pur- The question of the eligibility of obligations of the pose of carrying or trading in bonds or notes of the United United States for rediscount at Federal Reserve Banks Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

580 FEDERAL RESERVE BULLETIN. ims. is covered by the amendment to the Federal Reserve Act, Classification of Discounted Paper. approved September 7, 1916. It is the desire of the Board that the Federal Reserve (Page 457, June, 1917, Bulletin.) Banks ascertain in all cases whether the original loan has been obtained from the rediscounting. member bank for Warehouse Receipts, Paper Secured by. agricultural, industrial, or commercial purposes so that all Where the proceeds of loans made by member banks discount items of the Federal Reserve Banks may be are used for any industrial, agricultural, or commercial reported to the Board properly classified. purpose, the notes, drafts, and bills of exchange evidenc- (Page 114, Feb., 1917, Bulletin.) ing such loans are eligible for rediscount with a Federal | Compulsory Loans. Reserve Bank. Where the proceeds are used merely for i speculative purposes such notes are not eligible. No power is given to the Board to compel open market (Page 456, June, 1917, Bulletin.) operations on the part of Federal Reserve Banks, which are allowed to exercise their discretion. Waterworks Company, Paper of. (Page 457, June, 1917, Bulletin.) If the proceeds of the paper have been or are to be used Direct Loans. to provide funds for pay roll, purchases of coal, etc., Federal Reserve Banks do not make loans direct to indiand if the paper is otherwise in conformity with the law viduals, but merely rediscount notes for member banks. and the provisions of the Board's regulations, it is eligible (Page 763, Oct., 1917, Bulletin.) for rediscount by the Federal Reserve Bank. (Page 527, July, 1917, Bulletin.) Paper Secured by Chattel Mortgage. AGRICULTURAL PAPER. Any member bank could discount a promissory note secured by collateral notes, in turn secured by chattel Live-Stock Paper. mortgages on cattle. Such a note, however, would not be eligible for rediscount by a Federal Reserve Bank because The bill or note of a packing company, the proceeds of of the fact that it is not drawn for an agricultural, industrial which are used for the purchase of live stock which is or commercial purpose, within the meaning of section 13, slaughtered upon purchase, is Dot "based on live stock" of the Federal Reserve Act. within the meaning of section 13, and is, therefore, not eligible for rediscount if it has a maturity in excess of 90 (Page 690, Sept., 1917, Bulletin.) days. (Page 616, Aug., 1917, Bulletin.) Notes of Farmers for Commodities Used in Farming. Where a farmer makes his note payable to the seller of a Cattle Paper. commodity and actually uses the commodity for agricul- A loan made by a member bank in good faith to a farmer, tural purposes, such a note may be treated as agricultural for the purpose of assisting him to produce a crop, or to paper, whether discounted with the member bank by the fatten his cattle, would be eligible for discount by a farmer as the maker or by the seller as the indorser. Federal Reserve Bank whether secured by a mortgage or (Page 310, Apr., 1918, Bulletin.) not, but most of the farmers' notes which have been dis- Tractor Work. counted with Federal Reserve Banks for member banks Where tractors are used to supplement the work of horses are secured by chattel mortgages. or mules or are used altogether instead of these animals, (Page 378, May, 1917, Bulletin.) notes given by farmers for the purchase price of tractors, Cattle as Readily Marketable Commodity. and maturing within six months, should be admitted to National banks are not authorized to accept bills secured discount as agricultural paper. by chattel mortgages on cattle, and Federal Reserve Banks (Page 309, Apr., 1918, Bulletin.) should consider as ineligible bills drawn against the secur- COMMODITY PAPER. ity of such chattel mortgages, whether accepted by member or nonmember banks. Commodity Rate Suspended. (Page 309, Apr., 1918, Bulletin.) Staple perishable food products, such as butter, cheese, eggs, poultry, frozen fish, etc., carried for seasonal periods Commodities Used for Agricultural Purpose—Note for in cold storage under negotiable warehouse receipts, may Purchase Price. be eligible for rediscount with Federal Reserve Banks. A note given for the purchase price of a commodity can In view of the fact, however, that the present time and be classed as. agricultural paper eligible for rediscount present circumstances do not warrant preferential rates when having a maturity in excess of 90 days, if the maker in favor of such paper, the commodity rate has been is to use the commodity for an agricultural purpose, re- abolished for the time being and has been merged with gardless of whether the note is discounted by the maker or the general commercial rate. by the indorser. (Page 312, Apr., 1918, Bulletin.) (Page 30, Jan., 1918, Bulletin.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

UNE 1, 1918. FEDERAL RESERVE BULLETIN. 581 Potatoes as Security—Superseding Ruling of November jvided such loans conform in all other respects to the pro- 10, 1915. i visions of section 24. (Page 952, Dec, 1917, Bulletin.) Potatoes, properly graded "and packed "and stored in a j PAPER OTHER THAN AGRICULTURAL OR COMweatherproof and responsible'warehouse, as evidenced by MODITY. its receipt, would undoubtedly constitute a readily mar- j ketable, nonperishable staple within the meaning of the j Paper of Equity Exchange. regulation. The member bank making loans against Paper of equity exchanges, if first discounted by a memwarehouse receipts for potatoes properly insured would, ber bank, would be in form eligible for rediscount at the of course, have to satisfy itself as to the margin of its Federal Reserve Bank, provided its maturity at the time security and the conditions of warehousing, but after hav- of discount does not exceed 90 days. Their paper must, ing done so, and making the loan, it could rediscount such however, first have been discounted with a member bank paper with the Federal Reserve Bank for periods not and the member bank alone would have the right to relonger than 90 days. discount this paper with the Federal Reserve Bank. (Page 614, Aug., 1917, Bulletin.) (Page 379, May, 1917, Bulletin.) REAL ESTATE LOANS. Rediscount of Bank's Note Given for Funds to Replace Deposits Withdrawn to Purchase Liberty Bonds. Bonds Secured by Real Estate. A note executed by Bank " A " and discounted by Bank Bonds issued by an individual on^the security of real "B," the proceeds of which were used to replace funds estate are real estate loans and are therefore subject to withdrawn by customers to purchase Liberty bonds, is section 24 of the Federal Reserve Act and also section not eligible for rediscount by a Federal Reserve Bank, 5200, Revised Statutes, and as the bonds in question do since the proceeds were not used for an agricultural, innot conform to section 24, relative to time for which they dustrial, or commercial purpose, or for the purchase of may run, they would constitute illegal investments for notes or bonds of the United States. national banks and should not be taken. (Page 954, Dec, 1917, Bulletin.) (Page 456, June, 1917, Bulletin.) Renewal of 15-Day Notes of Member Banks. Loans on Real Estate. A Federal Reserve Bank may properly renew the 15-day National banks are subject to the limitations imposed notes of its member banks if properly secured, provided by section 24 of the Federal Reserve Act, and can not that the Federal Reserve Bank does not obligate itself in make loans on real estate except under authority of this advance to make any such renewal. act, which limits the amount to an aggregate sum equal (Page 765, Oct., 1917, Bulletin.) to 25 per cent of its capital and surplus or to one-third of its time deposits. If one-third of its time deposits exceed Sunday or Legal Holidays, Maturity of Notes Due on. 25 per cent of the capital and surplus, banks are given the In discounting any paper regardless of maturity a reserve benefit of this alternative maximum. bank should first consult the calendar and time its actual (Page 691, Sept., 1917, Bulletin.) maturity. ' For instance, if it should on January 26 discount a note running for 90 days, it should, as far as notes Loans on City Real Estate. payable in Alabama, Georgia, and Florida are concerned, If the security for a trust company certificate is another mature this paper on April 27, as April 26 is a legal holiday note which in turn is secured by real estate, then, under in these States, and it should figure discount for 91 days the decisions of the Supreme Court, the loan is authorized instead of 90. If the paper is payable in Mississippi, it by law, on the ground that it is a loan on personal security, would legally mature on April 25, and it should figure disand not a loan upon the security of real estate. count for 89 days. In the other States of your district (Page 30, Jan., 1918, Bulletin.) April 26 is not a legal holiday, and it should therefore Loans on Improved Farm Lands. mature such paper in those States on April 26 and figure Section 24 authorizes any national bank to loan on un- discount for 90 days. As far as 15-day notes are concerned, encumbered and improved farm land up to 50 per cent of it should, in the case of a note payable in Mississippi, fallits actual value. What proportion of the land used as ing due on Sunday, mature it as of Saturday and charge security must be improved or cultivated must necessarily 14 days' interest. In the case of a 15-day note payable depend upon the facts of each case. in Georgia, it should mature it if due on Sunday as of Monday and charge 16 days' interest, and in Alabama, (Page 618, Aug., 1917, Bulletin.) Tennessee, and other States which have the negotiable Real Estate Loans by Foreign Branches. instruments law it should mature 15-day notes payable in A branch bank of a national bank established in a foreign those States and falling due on Saturday or Sunday, as of country, under authority of section 25, may make loans Monday, charging 16 or 17 days' interest, as the case may be. on real estate located within 100 miles of the branch, pro- (Page 108, Feb., 1918, Bulletin.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

582 FEDERAL RESERVE BULLETIN. .TUNIS J, 1918. War Department Obligations. i Reserves of National Banks, Method of Computing. Member banks in giving accommodation to holders of I Reserves of national banks and the manner in which Government claims as evidenced by vouchers, could take | they should be computed (letter by Comptroller of the the note of the firm or contractor with the voucher at- I Currency to all national banks). tached as collateral security. The Board holds that such | (Page 602, Aug., 1917, Bulletin.) notes will be eligible for rediscount by Federal Reserve | Shipments of Currency to Cover Reserves. Banks at the 15-day rate, or at the regular commercial paper rates according to maturities. Under the present In cases of any remittance of currency or specie in excess circumstances Government officers will seek to protect the of the amount due to the Federal Reserve Bank and not banks which extend these accommodations to those hav- offset by other items the expense of shipment of such ing contracts with the Government. excess should be borne by the member bank. In order (Page 288, Apr., 1917, Bulletin.) that the expense to be assumed by the Federal Reserve Bank may not be unnecessarily increased, member banks, RESERVES. except when shipping gold, should remit currency rather than specie wherever this is practicable. Computation of Reserves. (Page 615, Aug., 1917, Bulletin.) Under section 19 as amended banks are permitted to Synopsis of State laws relating to bank reserves. count as reserve only actual balances carried with a Fed- (Page 767, Oct., 1917, Bulletin.) eral Reserve Bank. In estimating the amount against, which reserve must be carried they are permitted to de- RESERVE CITIES. duct balances due from banks from balances due to banks The Board designates as reserve cities Buffalo, N. Y., and to carry reserve only against the net balance due to Toledo, Ohio, Memphis, Tenn., Peoria, 111., Grand Rapbanks and against other deposit liabilities. ids, Mich., and Oakland, Cal., thus making banks in those (Page 614, Aug., 1917, Bulletin.) places subject to the reserve requirement of 10 per cent against demand deposits and 3 per cent against time Government Deposits, Reserves Against. deposits. (Page 921, Dec, 1917, Bulletin.) Under the provisions of section 7 of the act approved April 24, 1917, national banks and member banks are not STATE BANKS. required to maintain reserves against Government deposits Applications for Membership by State Banks Before regardless of the source of the funds deposited. This sec- Commencing Business. tion, however, does not apply to Federal Reserve Banks. A State bank may make application for membership in (Page 458, June, 1917, Bulletin.) the Federal Reserve System as soon as it has been granted a charter and is authorized to commence business. Reserves, Deductions in Determining. (Page 953, Dec, 1917, Bulletin.) Member banks in determining the amount against which reserves must be carried, may deduct all Govern- Conversion of a State Bank into a National Bank. ment deposits, except postal savings deposits, from the In view of the fact that the conversion of a State into amount of gross demand deposits, and may deduct from a national bank does not destroy the corporate identity of the amount of balances due to other banks the amount of the bank, it is hardly necessary for the State bank to file balances due from other banks, and may include in the an application for the surrender of its stock or for the amount due from banks checks drawn on banks located in national bank to file an application for new stock. the same place and exchanges for clearing houses. The (Page 690, Sept., 1917, Bulletin.) law, however, does not permit member banks to deduct Eligibility of Mutual Savings Bank. checks on other banks located in the same place or ex- A mutual savings bank without capital stock or stockchanges for clearing houses from gross demand deposits' holders is not eligible under the law for membership in nor does it permit cash on hand to be deducted from gross the Federal Reserve System. demand deposits. (Page 692, Sept., 1917, Bulletin.) (Page 950, Dec, 1917, Bulletin.) Reserve Requirements Under the New Amendments. Examination Forms. Letter to all Federal Reserve Banks announcing that A suggestion has been made by one of the Federal the bill amending the Federal Reserve Act had become Reserve agents that an effort should be made to induce the law and explaining the conditions under which the new banking departments of the various States to adopt for use reserve requirements would be made effective. of examiners in making reports of examination a form (Page 508, July, 1917, Bulletin.) used by the Federal Reserve Boards' Division of Audit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDERAL RESERVE BULLETIN. 583 and Examination. The Board has never communicated Act permitting State institutions in Pennsylvania to with any of the bank commissioners regarding this matter, become members of the Federal Reserve System. but would be pleased if each Federal Reserve agent would (Page 666, Sept., 1917, Bulletin.) ascertain the views upon this subject of the bank com- Law authorizing State banks and trust companies in missioners or superintendents of the States in his own Mississippi to become member banks. district. (Page 310, Apr., 1918, Bulletin.) (Page 315, Apr., 1918, Bulletin.) Amendment of the banking laws of Kentucky. Limitations Under Section 5200, R. S. (Page 315, Apr., 1918, Bulletin.) Under section 9 of the Federal Reserve Act as amended, State banks and trust companies becoming members of STOCK IN FEDERAL RESERVE BANKS. the Federal Reserve System are not subject to the limitations of section 5200, but are subject only to such limita- Calculation of Dividends on Surrendered Stock. tions as are imposed by State laws. Such banks may, When a national bank going into voluntary liquidation therefore, make loans to the same person, firm, or corpora- fails to promptly apply for surrender and cancellation of its tion in any amounts permitted by the State laws. Loans stock in the Federal Reserve Bank, it is within the provto one person in excess of 10 per cent are, however, not ince of the Federal Reserve Board to allow the Federal eligible for rediscount with a Federal Reserve Bank. Reserve Bank to pay dividends on such stock up to the (Page 879, Nov., 1917, Bulletin.) date when such application was actually made, if, in the Powers of State Banks Which Become Members. opinion of the Board, the liquidating bank did not unreasonably delay filing such application. A State bank which becomes a member of the Federal (Page 201, Mar., 1918, Bulletin.) Reserve System may continue to make loans to one customer in excess of 10 per cent of its capital and surplus, Deduction of Federal Reserve Bank Stock From Tax provided it is authorized to do so under the laws of the Assessments Levied on Shareholders of National State in which it is located. The obligations of any one Banks. customer to whom the bank has loaned more than 10 per An opinion rendered by Judge Sater, of the United States cent of its capital and surplus would not, however, be eli- District Court, Southern District of Ohio, Western Divigible for rediscount with the Federal Reserve Bank. sion, holds that Federal Reserve Bank stock which is held (Page 696, Sept., 1917, Bulletin.) by a national bank can not be deducted by such national Private Bankers as Members. bank in making a return of the value of its own stock for The Federal Reserve Act does not permit a private the purpose of taxation. banker to become a member bank, nor does it permit (Page 955, Dec, 1917, Bulletin.) Federal Reserve Banks to extend clearing privileges to Stock Subscriptions. such a banker. (Page 693, Sept., 1917, Bulletin.) It would not be consistent with regulations or with the State Bank Membership. more conservative business principles to treat applicants If a State bank is authorized by law to invest in real for membership in the Federal Reserve System as members estate mortgages, the fact that it has large investments of until their applications have been formally approved by this kind would not bar the bank from membership in the the Board. (Page 287, Apr.. 1917, Bulletin.) Federal Reserve System. (Page 950, Dec, 1917, Bulletin.) Surrender of Stock by Liquidated Bank. Other References to State Banks. When a member bank voluntarily liquidates, or when Abstract of State laws relating to the right of banks it is declared insolvent and a receiver appointed, the stock created and organized under the laws of the several States held by it in the Federal Reserve Bank must be surto accept drafts and bills of exchange. rendered for cancellation. A failure to comply with this (Page 529, July, 1917, Bulletin.) provision of the law can not give to a member bank any Experience of State banks in the Federal Reserve rights greater than those which would inure to its benefit system. (Page 355, May, 1917, Bulletin.) had it complied with the terms of the law. Digest of the procedure to be followed by Federal Re (Page 457, June, 1917, Bulletin.) serve agents in connection with the applications of insti tutions which desire to be considered for membership. Transfer of Federal Reserve Bank Stock. (Page 592, Aug., 1917, Bulletin.) A national bank acquiring assets of another national President's statement re membership of State institu- bank in liquidation is not entitled to have transferred to tions in the Federal Reserve system. it the Federal Reserve Bank stock held by the liquidating (Page 827, Nov., 1917, Bulletin.) bank. (Page 199, Mar., 1917, Bulletin.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

584 FEDERAL RESERVE BULLETIN. JUXH 1, 191S. TIME DEPOSITS AND SAVINGS ACCOUNTS. bank and that such amendments shall be binding on depositors. (Page 199, Mar., 1918, Bulletin.) Deposits by Nonmember Banks in Federal Reserve Banks. That part of section 13 as amended by the act approved UNITED STATES BONDS. June 21, 1917, which authorizes Federal Reserve Banks Coupons from United States Bonds. to receive deposits from nonmember banks is merely- Instructions for the handling of coupons from United permissive and not mandatory, and in accepting any States bonds: Coupons from United States bonds are deposit authorized by that section a Federal Reserve actually payable only on presentation to the Treasurer Bank may properly require the depositing bank to mainof the United States, to an Assistant Treasurer of the tain a balance sufficient to cover checks drawn against the depositing bank as well as items received from that bank. United States, or to a Federal Reserve Bank or branch (Page 617, Aug., 1917, Bulletin.) thereof. When so paid they should be canceled by punching a hole one-fourth inch in diameter in the middle Deposits with Nonmember Banks. of the coupon and near the top thereof through the words No member bank shall keep on deposit with any State "United States" or immediately thereunder. bank or trust company which is not a member bank a sum (Page 938, Dec, 1917, Bulletin.) in excess of 10 per cent of its own paid-up capital stock and surplus. This applies also to State members. Income from Liberty Bonds Exempt from Tax. (Page 951, Dec, 1917, Bulletin.) The income from not to exceed $5,000 face value of Liberty bonds, Treasury certificates of indebtedness, and Farm Loan Bank Deposits. war savings certificates authorized by the act of October Federal Reserve Banks are not authorized by the Fed- 3, 1917, is exempt from all income and war excess profits eral Reserve Act to receive deposits except from the taxes. (Page 930, Dec, 1917, Bulletin.) United States Government and from member banks. Loans on United States Bonds or Notes. There is no provision in the farm loan act authorizing farm Letter advising Federal Reserve Banks as to the methloan banks to make deposits in Federal Reserve Banks. ods by which they may make advances to member banks (Page 379, May, 1917, Bulletin.) for the purpose of enabling them or their customers to Federal Farm Land Bank Deposits with Federal Reserve carry or trade in bonds or notes of the United States. Banks. (Page 158, Mar., 1917, Bulletin.) Federal Reserve Banks may properly receive deposits Purchase of United States Bonds. from the various Farm Land Banks for the purpose of Resolution of Board regarding purchase of United States exchange or of collection or for the purpose of paying 2 per cent bonds. (Page 5, Jan., 1917, Bulletin.) farm loan bond coupons, (Page 881, Nov., 1917, Bulletin.) The Board will not require Federal Reserve Banks to purchase during the year 1917 more than §15,000,000 of Interest on Bank Deposits. United States bonds offered for sale by member banks After a discussion of the situation as to rates of interest through the Treasurer of the United States. on deposits, which lasted for several weeks, the New York (Page 240, Apr., 1917, Bulletin.) Clearing House Association at a special meeting held on Offerings of 2 per cent United States bonds to June 30, March 19, arrived at an adjustment of the pending issues. 1917. (Page 507, July, 1917, Bulletin.) The by-laws of the Clearing House Association were amended by adopting a provision covering maximum rates. The Board will not, under existing circumstances, re- This action was nearly unanimous, only three out of the quire the Federal Reserve Banks to make further pur- 58 banks and trust companies voting on the amendment chases of United States 2 per cent bonds. being recorded in opposition. (Page 285, Apr., 1918, Bulletin.) (Page 879, Nov., 1917, Bulletin.) Board's policy as to interest on deposits. MISCELLANEOUS. (Page 160, Mar., 1918, Bulletin.) Alien Enemies, Transactions With. Savings Accounts as Time Deposits. The Federal Reserve Board, acting upon advices re- Savings accounts opened under regulations which do ceived from the Department of State, has transmitted to not specifically reserve to the bank the right to require Federal Reserve Banks for retransmission to member and 30 days' notice before a withdrawal are not savings accounts other banks in the several districts for their guidaiace a within the definition of that term in Regulation D, series letter relating to transactions of American banks which of 1917; even though the regulations contain a provision involve dealings with alien enemies. that they may be amended by notices posted in the (Page 431, June, 1917 Bulletin.) ? Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

JUNE 1,1918. FEDEKAL RESERVE BULLETIN, 585 Compensation of Member Bank Officers. tax. There does not seem to be anything to prevent a The Federal Reserve Board has consistently main- bank from giving in its letter of transmittal such instructained the position that it should not make rulings on tions as it may see fit as to the presentation or holding of specific or concrete cases arising under section 22 of the the draft. (Page 31, Jan., 1918, Bulletin.) Federal Reserve Act, because of the fact that, it being Section 22, Federal Reserve Act, Violation of. a penal statute, no ruling by the Board would afford any protection to a person subsequently indicted for a viola- Any violation of the provisions of section 22 of the tion of its provisions. (Page 30, Jan., 1917, Bulletin.) Federal Reserve Act by officers, directors, or employees of a member bank constitutes a crime, punishable by Curtailment of Unnecessary Credits. fine or imprisonment. No ruling or interpretation hy Policy of Board. (Page 260, Apr., 1918, Bulletin.) the Federal Reserve Board would afford any protection to a person subsequently indicted by a Federal grand Exports of Coin, Bullion, and Currency—Embargo System. jury for any such violation, it not being within the prov- Regulations governing the exportation of coin, bullion, ince of the Federal Reserve Board to make an official and currency. (Page 736, Oct., 1917, Bulletin.) ruling on the provisions of this section. Farm Loan Bonds. (Page 694, Sept., 1917, Bulletin.) Farm loan bonds are issued by Federal farm land banks Stamp Tax on Acceptances. incorporated under Federal law, and are not obligations Acceptances originating outside but payable inside this of the United States, so that they are not eligible as colcountry as well as acceptances originating inside but paylateral for promissory notes of member banks. able outside are subject to stamp taxes. (Page 32, Jan., 1918, Bulletin.) (Page 950, Dec, 1917, Bulletin.) Foreign Exchange Instructions. Instructions to dealers as defined under Executive order Tax on Promissory Notes. of the President of the United States, dated January 26, In December, 1914, Hon. Wm. H. Osborne, who was 1918, made public by the Federal Reserve Board on Feb- then the Commissioner of Internal Revenue, advised the ruary 3. (Page 185, Mar., 1918, Bulletin.) Board that the following rulings had been made by his bureau. Loans to Directors. "The rediscount of a note by a bank does not involve Assent of a board of directors to a loan under section any tax liability. 22 of the Federal Reserve Act may be given by a resolu- "A promissory note payable on demand is not held to tion of the board of directors fixing a specific amount, be renewed and subject to tax under the provisions of but all loans made under such authority should be rethe internal revenue act of October 22, 1914, when acported to and ratified at a subsequent meeting of the crued interest thereon is paid. board. (Page 614, Aug., 1917, Bulletin.) "A promissory note may have interest payments in- Officers of the Federal Reserve Board. dorsed thereon without becoming subject to tax if the Governor and vice-governor redesignated for 1917-18. life of the note is not contingent upon payment of the (Page 657, Sept.. 1917, Bulletin.) interest and is not extended to a certain future date. "A promissory note given for a fixed period which, Priorities in Capital Issues. when due, is allowed to run without suit, is not held to Statement giving details of the Board's organization for be renewed upon payment of interest. This is looked the oversight of capital issues. upon as a forbearance and not as a renewal; the holder not (Page 77, Feb., 1918, Bulletin.) relinquishing his right for any stated period, and, there- Formation of 12 local committees of Capital Issues Comfore, no stamp is required in such cases." mittee. (Page 166, Mar., 1918, Bulletin.) (Page 950, Dec, 1917, Bulletin.) Regulation of Foreign Exchange. Use of Coin Counting Machines. Text of an Executive order signed by the President on January 26, 1918, prescribing rules and regulations under Statement, of Board discouraging the practice of using section 5 of the trading-with-the-enemy act and supple- coin-counting machines. menting rules and regulations heretofore prescribed under (Page 440, June, 1917, Bulletin.) title 7 of the espionage act. Use of the Word "Federal." (Page 81, Feb., 1918, Bulletin.) It is decidedly against the policy of the Federal Reserve Revenue Stamps on Time Drafts. Board to encourage the use of the word " Federal" as part Banks should have their customers draw such drafts of the title of member banks. simply as demand drafts which are not subject to a stamp (Page 615, Aug., 1917, Bulletin.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

586 FEDEBAL RESERVE BULLETIN. JUNK 1,1918. Taxability of Income from Investments in Liberty Bonds. certificate plan as being an entirely suitable and patriotic A ruling made by the Acting Commissioner of Internal method of handling the matter. Revenue to the effect that the income from investments (Page 951, Dec, 1917, Bulletin.) in Liberty Bonds is exempt from the income tax and from War Stamp Taxes. the excess-profits tax. (Page 459, June, 1917, Bulletin.) Reprint of Treasury decision (T. D. 2682) relating to war stamp taxes on negotiable instruments. War Savings Certificates as Christmas Gifts. (Page 316, Apr., 1918, Bulletin.) The attention of bankers, employers of labor, and of individuals should be directed to the new war savings Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX. Acceptances: Pase- Banks granted authority to accept up to 100 per Informal rulings of the Federal Reserve Board—Continued. cent of capital and surplus 492 Date for payment of dividend 521 Distribution of, statement showing. 554 Use of the word "reserve " 521 Act authorizing national banks to contribute to the International High Commission, report of, on uni- Red Cross 498 formity of law and practice with reference to Average rate and maturity of paper discounted by checks 518 the Federal Reserve Banks each month 551 Jones, Breckinridge, address of, on State banks en- Business conditions throughout the Federal Re- tering the Federal Reserve system 510 serve districts . 527-547 Law department: Capital Issues Committee, work of 494 Membership of branch of State bank 522 Charters issued to national banks during the month. 509 Decision of Supreme Court of Illinois in fidu- Charts: ciary case 522 Deposits, loans, and investments of national Amendments to New York and Kentucky banks, 1914-1918 503 banking laws 524-526 Movement of prices, 1914r-1918 505 Liberty bonds: Check clearing and collection system, operation of. 550 Conversion of the different issues of 517 Checks, report on law and practice relating to, by List of, lost or stolen 515-517 central executive council of the International Liberty loan, success of 484, 509 High Commission 518 Member banks, statement showing condition of 564 Coin, bullion, and currency movement, control of.. 499 Money, amount of, held by the Treasury, the Fed- Commercial failures reported 510 eral Reserve Banks, and the public 506-508 Currency, paper, outstanding 519 National banks, charters issued to, during the Deposits of public moneys 464 month 509 Deposits, loans, and investments of national banks, President of the United States: 1914-1918 502 Address of, before Congress, on taxation measure. 497 Chart showing „ 503 Statement of, on thrift and purchase of securities 483 Digest of informal rulings of the Board, January, Prices, monthly changes in, 1914-1918 504 1917, to April, 1918 571-586 Chart showing 505 Director, class C, named for Federal Reserve Bank Red Cross, act authorizing national banks to subof Richmond 491 scribe to 498 Discount operations of the Federal Reserve Banks. 552 Regulations governing the exportation of coin, bul- Discount rates in effect 570 lion, and currency, revision of 499 Earnings on investments of Federal Reserve Banks. 569 Resources and liabilities of Federal Reserve Banks. 559 Exports of coin, bullion, and currency, licenses Review of the month: covering, September 7, 1917, to May 24, 1918.... 501 Success of the third Liberty loan 484 Federal Advisory Council, meeting of 490, 491 Use of certificates of indebtedness 485 Federal Reserve agents' fund, transactions through. 549 The question of saving 485 Federal Reserve Banks: Prices, credit, and currency 486 Earnings on investments of 569 Rates of discount 487 Resources and liabilities of 559 Silver situation 487 Federal Reserve note account of Federal Reserve Movement of gold 488 Banks and agents 562 Operations of the Federal Reserve Banks 488 Fiduciary powers granted to national banks 492 Condition of member banks 489 Gold export, control of 499 Meeting of Federal Advisory Council 490 Gold imports and exports 570 Silver certificates, progress in retiring of 493-495 Gold settlement fund, transactions through 548 State banks: Indexes of business conditions 491 Address of Breckenridge Jones regarding mem- Informal rulings of the Federal Reserve Board: bership of 510 Rediscount of paper indorsed by nonmember List of, admitted to system during the month.. 508 bank 520 Treasury certificates of indebtedness: Acceptance of draft against sugar in bond 520 Issue of 518 Bills payable elsewhere than in the United Number of subscribers and amounts subscribed States 520 to the six issues preceding the third Liberty Discount of acceptances not paid at Federal loan 558 Reserve Bank 521 War Finance Corporation, operations of 495-497 o Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis