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Home , Lucena, Philippine National Bank

November 1918

1084 FEDERAL RESERVE BULLETIN. NOY.iOM.BEIl 1, 1.918.

are immediately placed to the credit of the immediate use either for rediscount or as member bank, so that a bank sending in paper collateral for Government deposits. for rediscount knows that it will receive credit The Attorney-General of the the same day. has ruled that State banks joining the Federal Reserve system do not come under the scope CURRENCY. of the Clayton Act, and, therefore, no change need be made in a board of directors by reason The Federal Reserve Bank is ready at all of becoming a member of the system. times to supply its member banks with cur- New accounts for deposit of postal savings rency of all denominations. A large supply of funds can not be opened in a nonmember bank, Federal Reserve notes is kept printed, the and many of the industries now under Govern- total at present apprpXmiating $100,000,000. ment control will not or can not deposit money These cover all denominations from $5 to $100. with a notunember. For this reason some In addition, a supply of bills of smaller and banks have found that joining the system has larger denominations is on hand, and it is ex- been the means of their securing considerable pected soon to issue Federal Reserve notes in deposits of funds of this nature. denominations of $1, $2, and $5. Specie can It should, be remembered that member banks also be provided immediately on request. are the stockholders of the Federal Reserve With this reservoir to draw from, members in Banks and that six of the nine directors are States which have no required cash reserve elected by members. The idea that the (Maine, New Hampshire, and Massachusetts) Federal Reserve Bank is a Government insti- can often maintain a large part of their reserve tution, out of the reach of its members, is fast in the Federal Reserve Bank from the cash disappearing, and we believe that member formerly required as vault reserve. banks in the first Federal Reserve .District A member bank can send to the Federal have always found their connection with the Reserve Bank of Boston for immediate credit Federal Reserve Bank of Boston agreeable. bills unfit for further circulation. At the present time we are providing currency at the rate of over SI,000,000 a day to as many as 50 different banks. ffoe Philippine National Bank. The following carrying charges are paid by In the FEDERAL RESERVE BULLETIN for the Federal Reserve Bank of Boston: August, 1918, there was printed the charter or 1. On gold or gold certificates shipped to us. act of the Philippine Legislature creating the 2. On Federal Reserve notes shipped in ex- Philippine National Bank as amended up to change for gold or gold certificates. date. While the Philippine National Bank is 3. On currency sent to us for credit in pay- not technically speaking a foreign institution, ment of remittance letters. it is performing the same functions as American 4. After the issuance of Federal Reserve banks which are engaged in developing our bank notes (probably about August 15) on foreign trade while its methods are necessarily silver certificates shipped to us to be exchanged those of foreign-trade banking. The act al- for Federal Reserve bank notes. ready reprinted furnishes much of the informa- 5. On Federal Reserve bank notes shipped tion that is required by the student of American in exchange for silver certificates. foreign banking, and this need not be recapitu- lated here. A few additional data are, how- CONCLUSION. ever, supplied as a part of the Board's series of monographs or studies relating to foreign In addition to points particularly outlined banking. above, the Federal Reserve Bank of Boston In the original by-laws adopted by the board endeavors to give its member banks e~ ery of directors of the Philippine National Bant- service which it consistently can. With this there was contained the following provision: in mind, a department has recently been estab- SEC. 41. Xot to exceed two branches or agencies of the? lished for the holding of securities in safe keep- bank may be established in the United States, and ing, where bonds are held and coupons cut as branches or agencies may be established in provincial done by regular cit}7 correspondents. This capitals and municipalities of the Philippine Islands, at such points as the board of directors may determine upon. has proved of benefit to member banks, many The salaries and duties of each of the officers of said of which are keeping an amount of bonds or branches shall be fixed in accordance with subsection (e) commercial paper available at this bank for of section 28 of these by-laws.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis November 1918

NOTEMBEU 1, 1018. FEDEBAL RESERVE BULLETIN. 1085

SEC. 4.2. T3ie branches or agencies in the United States, , Misamis. of which there shall in no case be more than two, shall Bontoc, . have the following functions: , N. Oriental. (a) To receive, transmit, and disburse any funds of the , Nueva Viscaya Philippine Government payable in the United States. , . (b) To receive, transmit, and disburse any funds of the San Fernando, . United States Government which may be placed on de- , . posit with or entrusted to it. , . (c) To receive, transmit, and disburse any funds of indi- , . viduals, firms, companies, or corporations engaged in busi- , Sorsogon. ness with the Philippine Islands, or having interests Jolo, . therein. Surigao, Surigao. (d) To engage in business to the extent permitted by , Tarlac. law of the United States with the Federal Reserve Bank Lucena, . of the district in which said branches or agencies may be Iba, . located, and to conduct a deposit and discount business Zamboanga, Zamboanga. with the said Federal .Reserve Bank in accordance with the law of the United States and under the instructions of The condition of the Philippine National the board of directors of the Philippine National Bank. (e) To exercise any other functions authorized by the Bank, as announced by it at the close of board of directors. business June 30, 1918, was as follows: SEC. 43. The branch banks in the Philippine Islands shall exercise only the powers conferred upon them by the Condensed statement of condition as at the close of June 30, board of directors, shall make detailed daily reports of 1918 (Estado condensado de condiciones en 30 de Junto, their transactions to the central office at , and shall at any time be subject to examination by an examiner or 1918). examiners to be designated by the board of directors. KESOTJRCES (ACTIVO). Loans and discounts (pr&stamos y deseuentos) P103,665,858.96 Under this provision the Philippine National U. S. and Philippine Government bonds (bonos de los Bank has now established 48 agencies and Gobiernos de JE E. UU. y Filipinas) 5,818,499.00 Furniture and fixtures (niobiliario y enseres) 125,254.47 branches as follows: Exchange for future delivery (cambios para entregas luturas) 10,320,276.83 Due from branches (a cobrar de los sucursales) 1,761,042.33 BRANCHES. Due from banks and bankers (a cobrar de los bancos y banqueros) 21,734,000.85 Cash in vault and with treasurer of Philippine Islands In the United States: New York City, N. Y. (ofectivo en caja y en poder del Tesorero I. F.) 26,065,507.25 In the Philippine Islands: , Occi- Customers' liability L/C and acceptances (cartas de dental Negros ; Oebu, ; ,Nueva cre"dito y aceptanciones) 41,452,056.18 Ecija; Davao, ; Corregidor; Aparri; 210,942,495.87 , Iloilo. LIABILITIES (PASIVO). The following agencies will shortly be con- Capital (capital) 3*9,207,830.00 Reserve funds (fondos de reserva) 2,346,946.58 verted into branches according to announced Dividends unpaid (dividendos por pagar) 446,501.19 Circulation (circulation). 5,760,000.00 plans: Lucena,Tayabas; Zamboanga, Zambo- Acceptances (aceptaciones) 11,443,629.48 anga; , Albay. Exchange contracts (contratos de cambio) 10,320,276.83 Commercial credits (cartas de credito) 25,841,663.33 The following agencies are in full operation Deposits (depdsitos) 145,575,648.46 as such: 210,942,495.87 , Aguean. Albay, Albay. The Philippine National Bank has under- NagaJ Ambos Oamarines. taken the investigation of the question of San Jose, . establishing agencies on the coast. It Bagnio, . Balanga, . already possesses a considerable Japanese and Basco, . Chinese business, and finances the movement , . of staples from Java and elsewhere in the East , . Indies to the United States. In general, its , . , Cagayan. foreign trade functions are the opening of , Capiz. export and import credits between the United , Cavite. States and the East, and of course chiefly , Batangas. between the United States and the Philippine , Cotabato. , . Islands, and the transmission of funds. At its , . local branches in the Philippine Islands it , . transacts a complete banking business, includ- Santa Cruz, . ing both direct loans to business men, the sale Dansalan, Lanao. San Fernando, . and purchase of foreign exchange, and under , . the direction of home office the opening of , Minforo. export and import credits.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis November 1918

1086 FEDERAL RESERVE BULLETIN. NOVEMBER 1,1918.

The Philippine National Bank, being vested Trast Powers for National Banks. with the power of note issue, is able at its local branches to exercise the function of providing In connection with applications of national an elastic currency and redeeming the notes batiks to exercise fiduciary powers under the when presented. recent amendment to the Federal Reserve Act, the following press statement was issued by the Board under date of October 24 : Changes in Reserve Requirements. By recent amendment to section 11 (k) of the Federal Reserve Act, the fiduciary powers that may be exercised The Federal Reserve Bank of New York on by national banks with the permission of the Federal Reserve Board have been materially broadened, and this October 30 sent the following letter to member section, as amended, will enable national banks to exer- banks in reserve and central reserve cities in cise fiduciary powers under conditions substantially similar to the conditions under which such powers are exercised District No. 2: by competing State banks and trust companies. As a The Federal Eeserve Board, pursuant to result of this amendment a number of national banks which have not heretofore been granted permission to exercise the provisions of section 19 of the Federal fiduciary powers have filed applications in accordance with Reserve Act, as amended by the act of Septem- the statute, and are arranging to open trust departments. ber 26, 1918, has approved a recommendation In order that applications filed up to and including Novem- with respect to outlying districts of central ber 15 may receive consideration at the same time, the Federal Reserve Board has fixed its first meeting in Decem- reserve and reserve cities in this district and ber as the date on which these applications will be acted the reserves to be carried by banks located uj)on. All such applications must, as heretofore, be trans- therein, as follows: mitted through the Federal Reserve Agent of the district in which the applying bank is located, and unless received by the Board by November 15 they will probably not be RESERVE CITIES. acted upon until some meeting subsequent to the first meeting in December. Albany, K Y., and Buffalo, N. F.—No The form of application prescribed by the Board may change to be made in the status of Albany and be obtained either from the Federal Reserve Board or the Federal Reserve Agent. New regulations made necessary Buffalo as reserve cities, and all member banks by the recent amendments to the act will be issued in the located therein will be subject to the reserve near future. requirement of paragraph "b" of section 19 of the Federal Reserve Act, namely, 10 per cent of aggregate demand deposits and 3 per cent Financial Preparations for After-War Trade. of time deposits. A lengthy study on " Economic Reconstruc- CENTRAL RESERVE CITY. tion—Analysis of Main Tendencies in the New York City.—Member banks located in Principal Belligerent Countries of " has the borough of Manhattan or located in other been prepared by the Department of Commerce. boroughs and having branch offices in Man- This study contains a review of bank and hattan will be subject to the reserve require- financial legislation and reorganization in- ment of paragraph "c" of section 19 of the tended to meet the problems of export trade Federal Keserve Act, namely, 13 per cent of aggregate demand deposits and 3 per cent of immediately following the close of the war. time deposits. The principal sections of the study bearing Member banks located in the boroughs of upon the banking phase of the after-war recon- Brooklyn and Bronx will be subject to the struction are as follows: reserve requirement of paragraph "b" of sec- tion 19 of the Federal Reserve Act, namely, 10 GJiEAT BRITAIN. per cent of aggregate demand deposits and 3 per cent of time deposits. Among private organizations the outstand- Member banks located in the boroughs of ing tendency has been toward cooperation and Richmond and Queens will be subject to the concentration—policies that are receiving con- reserve requirement of paragraph "a" of sec- siderable encouragement from the Government, tion 19 of the Federal Reserve Act, namely, influenced more or less by similar economic 7 per cent of aggregate demand deposits and' 3 tendencies in other countries, particularly in per cent of time deposits. the United States. It is stated that the board

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