Federal Reserve Bulletin June 1920
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FEDERAL RESERVE BULLETIN ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON JUNE, 1920 WASHINGTON GOVERNMENT PRINTING OFFICE 1920. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BOARD. EX OPFICIO MEMBERS. W. P. G. HARDING, Governor. DAVID F. HOUSTON, ADOLPH C. MILLER. Secretary of the Treasury, Chairman. CHARLES S. HAMLIN. JOHN SKELTON WILLIAMS, HENRY A. MOEHLENPAH. Comptroller of the Currency. EDMUND PLATT. GEORGE L. HARRISON, General Counsel. W. T. CHAPMAN, Secretary. W. W. HOXTON, Executive Secretary. R. G. EMERSON, Assistant Secretary. "EL. PARKER WILLIS, W. M. IMLAY, Fiscal Agent. Director, Division of Analysis and Research. W. W. PADDOCK, ChieJ\ Division of Examination. M. JACOBSON, Statistician. J. E. CRANE, E. L. SMEAD, Acting Director, Division of Foreign Exchange. Chief, Division of Reports and Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis OFFICERS OF FEDERAL RESERVE BANKS. Federal Reserve Bank of— Chairman. Governor. Deputy governor. Cashier. Boston Frederic H. Curtiss... Chas. A. Morss C. C. Bullen W. Willett. New York Pierre Jay Benj. Strong, jr.1 J. H. Case2 L. H. Hendricks.3 L. F. Sailer3. J. D. Higgins.3 E. R. Kenzel Channing Rudd.3 A. W. Gilbart.3 Leslie R. Rounds.3 J. W. Jones.3 George W. Norris.... Philadelphia R. L. Austin Wm. H. Hutt, 4jr W. A. Dyer. Cleveland D.C.Wills E. R. Fancher....... M. J. Fleming H. G. Davis. Frank J. Zurlinden 4.. Richmond Caldwell Hardy George J. Seay C. A. Peple Geo. H. Keesee. T> TT "R vr»O ri ri n « A. S. Johnstone4 Atlanta Joseph A. McCord M. B. Wellborn L. C. Adelson M. W. Bell. Chicago Wm. A. Heath J. B. McDougal C. R. McKay S. B. Cramer. St. Louis Wm. McC. Martin.... D. C.Biggs 0. M. Attebery J. .W. White. Minneapolis... John H. Rich R. A. Young S. S. Cook. Kansas City ... Asa E. Ramsay J. Z. Miller, jr C. A. Worthington J. W. Helm. Dallas Wm. F. Ramsey R. L. Van Zandt Lynn P. Talley Sam R. Lawder. San Francisco John Perrin J. U. Calkins... Wm. A. Day W. N. Ambrose. Ira Clerk5... C. H. Stewart6. * On leave of absence. 2 Acting governor. «Controller. < Assistant to governor. 5 Assistant deputy governor. MANAGERS OF BRANCHES OF FEDERAL RESERVE BANKS. Federal Reserve Bank of— Manager. Federal Reserve Bank of— Manager. New York: St. Louis: Buffalo branch Ray M. Gidney. Louisville branch W. P. Kincheloe. Memphis branch J. J. Heflin. Cleveland: Little Rock branch.... A. F. Bailey. Cincinnati branch..... L. W. Manning. Pittsburgh branch Geo. De Camp. Kansas City: Omaha branch L. H. Earhart. Richmond: Denver branch C. A. Burkhardt. Baltimore branch...... Morton M. Prentis. Dallas: Atlanta: El Paso branch W. C. Weiss. New Orleans branch Marcus Walker. Houston branch E. F. Gossett. Jacksonville branch.... Geo. R. De Saussure. Birmingham branch A. E. Walker. San Francisco: Nashville branch Bradley Curry. Los Angeles branch.. -. C. J. Shepherd. Portland branch... Frederick Greenwood ijjiicago. (acting). Detroit branch R. B. Locke. Salt Lake City branch.. R. B. Motherwell. Seattle branch C. A. McLean (acting). Spokane branch. W. L. Partner (acting). 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. It is the Board's medium of communication with member banks of the Federal Reserve Sys- tem and is the only official organ or periodical publication of the Board. In sending the BULLETIN to individuals other than those named or to nonmembers of the system the Board feels that a subscription should be required. It has accord- ingly 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 10 names at a subscription price of $1 per annum. No complete sets of the BULLETIN for 1915, 1916, or 1917 are available. in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis TABLE OF CONTENTS. Review of the month 553 Business, finance, and industry, May, 1920 567 Wholesale trade activity in the West 570 Level of interest and discount rates 571 Effect of the railroad strike 574 Financial conference with Federal Advisory Council and Class A directors 579 Methods followed by city banks in granting accommodation to correspondents 584 Banking and financial conditions in Argentina 592 Report of the German Reichsbank for the calendar year 1919 601 Debits to individual account, January, 1919, to May, 1920 603 Official: Foreign branches of American banks 606 State banks and trust companies admitted to the system. 607 Banks granted authority to accept up to 100 per cent of capital and surplus 608 Charters issued to national banks 609 Fiduciary powers granted to national banks 608 Rulings of the Federal Reserve Board 609 Law Department: Exercise of trust powers by national banks located in Connecticut 610 Miscellaneous: Discount policy of Federal Reserve Banks, response to a Senate resolution 582 Winter wheat forecast 606 Commercial failures reported 609 Statistical: Wholesale prices in the United States 611 Retail trade index 614 International price index , 616 Wholesale prices abroad 616 Discount and interest rates prevailing in various centers 622 Physical volume of trade 624 Gold settlement fund 633 Debits to individual account, March and April 635 Discount and open-market operations of the Federal Reserve Banks 638 Operation of the Federal Reserve clearing system 642 Resources and liabilities of the Federal Reserve Banks 645 Federal Reserve note account 649 Condition of member banks in selected cities 651 Imports and exports of gold and silver 657 Estimated stock of money in the United States 659 Earnings and dividends of State bank and trust company members 660 Discount rates approved by the Federal Reserve Board 659 Diagrams: Debits to individual account, January, 1919-May, 1920 605 Par point map 644 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BULLETIN VOL. 6 JUNE, 1920. No 6. REVIEW OF THE MONTH. The fact that the receipts of the department are now less than expenditures has been called Treasury finance during the month of May to the attention of Congress by Secretary Hous- has involved no striking de- Treasury fi- partures from the condition of ton in a letter of May 19, in which he stated to nance. affairs established during April. Chairman J. W. Fordney, of the Ways and Expenditures exclusive of pub- Means Committee, that recent railroad laws lic debt transactions during the month will entail an expenditure of approximately amounted to $395,475,235.43, while receipts on $1,000,000,000, and referred also to the delay the same basis amounted to $257,501,375.32, in making provision to realize upon the Gov- leaving a deficit of $137,973,860.11. On May ernment's investments in railroads and ships. 17, an issue of Treasury certificates of in- Of the current financial situation, he says, debtedness amounting to $102,863,000 was "It is no longer possible to finance the current placed on the market at 5J per cent, the sub- needs of the Government in part by the issue scriptions growing out of it amounting in the of Treasury certificates except on onerous aggregate to $125,000,000. Interest payments terms which reflect upon the value of the on the second Liberty loan were payable on Government's bonds and depreciate them in May 15, the total amount due being $71,- the market. It is a matter of serious concern T 224,000. Inasmuch as May 15 w as the latest to have the Government appearing in the date for the conversion of the second 4 per market every few weeks for loans. Certainly cent Liberty bonds into the 4J per cent nothing ought to be done to increase the ex- issue, coupons on the old bonds having been isting credit expansion that can be possibly exhausted at the last interest period, the process avoided." of conversion during the early part of May was actively carried forward. The bulk of The intensity of the demand for credit ac- the new bonds issued were at the 4J per cent The credit commodation throughout the rate, only a relatively small percentage being problem. country has been reflected dur- reissued as 4 per cent bonds. The Govern- ing the month in the continuance of the large ment's retention of the funds necessary for volume of paper presented for rediscount at the settlement of its interest indebtedness on Federal Reserve Banks. This volume has this bond issue was assigned in some quarters naturally varied in its extent, according to con- as the cause of unusual stringency developing ditions prevailing in the several districts. In in the money market during the few days spite of the effort pi Federal Reserve Banks to prior to May 15. This stringency, however, discourage rediscounting paper, the total became considerably greater after the disburse- amounts of discounted and purchased bills held ment of the interest than it was before, thus by the Federal Reserve Banks during the again indicating the fact already frequently month show but slight changes. The following noted that under existing banking organiza- table furnishes a brief review of the situation tion payments to and out of the Treasury are at Federal Reserve Banks, presenting a com- book transfers and have no material or direct parative statement of the total reserves, bills effect upon the money situation.