Derivation of the Series
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This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Currency Held by the Public, the Banks, and the Treasury, Monthly, December 1917-December 1944 Volume Author/Editor: Anna Jacobson Schwartz and Elma Oliver Volume Publisher: NBER Volume ISBN: 0-87014-449-9 Volume URL: http://www.nber.org/books/schw47-1 Publication Date: 1947 Chapter Title: Derivation of the Series Chapter Author: Anna Jacobson Schwartz, Elma Oliver Chapter URL: http://www.nber.org/chapters/c9490 Chapter pages in book: (p. 2 - 10) Reserve notes, Federal Reserve bank notes, and national banknotes. xlii banks, unless otherwise qualified,are all member and non-mem- ber banks combined. iVon-nationd banks are member and non-member banks without national charters, including commercial banks, loan andtrust com- panies, savings banks, and private banks. J"ault cash includes all kinds of United Statescurrency, metallic and paper, issued by all banks, Federal Reserve Banks,and by the Treasury, whetheror not considered part of legal reserves, either held on the premises of member and non-member banksor in transit to or from a Federal Reserve Bank. Currency in publiccirculation, i.e., outside all banks, Federal Re- serve Banks, and both the Treasury Department in Washington, D. C. and the mints andassay offices in the country, includes cur- rency in active use or in hoards held by individuals, businessfirms, municipalities, states, and non-excluded federalgovernment agen- cies; also such United Statescurrency as may have been carried abroad, lost, or destroyed. 2DERIVATION OF THE SERIES CURRENCY HOLDINGS OF ALL BANKS Monthly estimates ofcurrency in the hands of the public are the difference betweena published monthly series of 'Currency outside the Treasury and the FederalReserve Banks' (i.e.,currency held by the public and by all banks)and estimates of all bank vaultcash.3 The monthly serieson vault cash in all bankswas constructed from data on vault cash holdingsreported by the first fivegroups of banks listed in Table 1. The weekly reportingmember bank series, for Wednesdays(Fri- days before May 1921)closest to the end of eachmonth and to call dates (Chart 1), and themember bank call date series(Chart 2) are familiar data. Call date figureson vault cash in non-member banks, however, havenot previously been published.Many state banking departmentsreport on the condition ofnon-national com- mercial banks and trustcompanies, savings banks, loan and private banksmember companies, and non-member. Eachstate banking department regulates thefrequency with whicheach class of bank within its jurisdictionmust report, as wellas the form of the con- dition statement. Many, however, requireCondition statements as 3End-of-,nonth data, published in the Treasury CirculationStatement, are reprinted in the Federal Rehrve huFf/in underthe heading Money (Or Currency) 'Currency in public circulation' is in Circulation (App. A). used here to describecurrenc' in the hands only of the public, and should not be confusedwith the Treasury term, of all banks. which includes currency in thevaults 2 TuLE 1 Classes of Banks Reporting Vault Cash, 1914-1944 REPORTING D',TES SOURCE 1 Weekly Reporting Mern- Weekly: Fridays, Dec. 1917-April 1921; Wednes- Federal Reserve Bulletin bet Banks: in N.Y. out- days thereafter side N.Y., & 'I'otal 2 Member Banksofthe Call Dates: 1914-44 Annual Reports of (lie BaarI Federal Reserve System: No. of Call Dates each Year of Governors of the Federal inCentral Reserve 1 1914 Reserve System, and Member Cities,ReserveCities, 3 1921-22; 1926; 1932-33; 1936-37; 1942-44 Bank Call Reports Country Districts, & Total 41917-20; 1923-25; 1927-31; 1934-35; 1931-41 61915-16 3Non-National Banks in Call dates, varying from 1 to 6, 1914-44 Reports of state Banking Various States l)epa rt ments 4 All Repoiting Banks On or about June 30: 1914-35; 1938 Annual Reports of the On or about June 30 and Dec. 31: 1936-37; 1939-4-1- Comptroller of 1/ic Currency 5All National Banks Call Dates: 1914-44 Annual Reports of the No. of Call Dates each Year Comptroller of (lie Currency 3 1926; 1932-33; 1936-37; 1942-44 41923.25; 1927-31; 1934-35; 1938-41 5 1921-22 61914-20 6 All Non-Member Banks On or about June 30: 1914-35; 1938 Data for all reporting banks On or about June30 and Dec. 31:1936-37; 1939-44minus data for meniber banks 7 Philadelphia & Boston Saturdays: Philadelphia, July 1917-Oct. 1930; Commercial and Financial Clearing House Banks Boston, Jan. 1914-June 1917; Feb. 1926-Jan. 1933 Chronicle SN.Y.C. Clearing House Saturdays and weekly averages: Jan. 1914- Commercial and Financial Banks March 1928 Chronicle 9 N.Y.C. Non-National Saturdays: Jan. 1914-July 1920 Commercial and Financial Banks' Chronicle 10 All N.Y.C. Banks Saturdays: Jan. 1914-March 1928 Commercial and Financial Chronicle 'This series is obtainable from condition statements of banks, denoted in the source as 'State banks and trust com- panies in Greater New York', i.e., in the five boroughs of New York City. of the dates on which member banks report, although not all publish returns segregating vault cash. Twenty-four states and the District of Columbia reported vault cash holdings of non-national banks on at least two consecutive member bank call dates between December 1917 and June 1944. To obtain a non-member bank series, vault cash holdings of non- national member banks by states (directly available in the Member Bank Call Reports, June 1919-June 1929, and calculable thereafter from all member bank and national bank data), were subtracted from total non-national bank vault cash, as reported by the states listed in Table B 44 Non-member bank figures, thus compiled for June 1919-June 1944, cover a varying number of states, but, by overlapçing, the data have been made continuous from one call date to the next.' Whenever the constituency of the sample changed, tAs non-national member bank data, by states, are unavailable before June 1919, we used non-national instead of non-member bank call date figures. 'The series ends in June 1944- because few state bank reports are as yet av3ilable beyond that date, and in these, either vault Cash is shown in combinatiom with one os more other item, 3 Vt Ch fsIj bj WesHj Frtr-Mrr-' B-;-v ': : ' Cecembr lj17 - 1344 4 tsc''1 921, £.:-' tI:- S - 1. - _'_L,} 1, , ' ec.re May 921, F'day) Cotes M-t-r -: : ._J-__,I- -- '-'- .---- __\ / ' \J two figures were compiled,one comparable with the figure for the preceding call date, the otherwith that for the following.The level of non-member bc.nk vaultcash on Chart 3 hasno meaning, since non- continuous lines, traced froma chart with a proper scale, have been joined. The significance of the non-memberbank series lies in the similarity of itsmovement with that of vaultcash in all member banks. We call the sum of vault cash in allmember and the chang- ing sample of non-member banks the 'calldate sample' of all bank data which is, ofcourse, also noncontinuous. The all bank vault cash series (Chart4), availableonce a year (in some recent years, twice), isa revision of the The revision Comptroller's data. was deemed advisablebecause some of the bank vault cash figures non-national included by theComptroller are estimates that, in severalyears, are unsatisfactory. 'cash on hand' Certain states donot report separately from 'cash items'and/or 'due from banks' considered a, part of liquidreserves ie., due from banks or else the dating of the returns does and cash items inprocess of collection, not correspond with memberbank call dat. 4 I C,'ani 2 Vault Cash Held by Four Groups of Member Banks Member Rank Call Dates, December 1917 - December 1944 ofolli,s NOlan, at oHars 800 I i too i"r""T II I Iii I I 000 600 "CO I0naernelos ' -500 400 "'"/" 400 3(0 300 200 200 6,., Cties' " .' --S 100- - _ fSii,_ 100 a ' \,\ ., 80 80 I. 63 \ 60 Ito, Yo,City-°° 50 40 ''.'.,,! -- 40 10 ,,,, 30 I 1 20L__ L,t_ 1 7 1 1 I I I I I._._L__ 1 !__L 20 19(7 78 19 1920 212223 '24 1025 '26'27 28 '28830 '37 '32'33 34 1935 '36 '37 '38'39 1940 41'42 '43 1944 Data for N.Y.C. central reserve city member banks first become available at the call r,,,date on June 30, 1919. or other asset categories. The Comptroller has published an arbi- trary distribution of some of these aggregates; others he has allo- cated wholly to one of the component categories, leaving the other categories blank. The sum of our adjustments (which, to some ex- tent, are offsetting) is over 6 percent at its maximum in 1928, but in half the years is less than 1 percent of the Comptroller's total annual figure (see App. B). We have also included an estimate of vault cash in non-reporting banks. CHART 3 Vault Cash Held by All Member (National) and a Changing Sample of Non-Member (Non-National) Banks Member Bank Call Dates, December 1917- June 1944 7lalioaI & Ilvr&o Oaoks NaI,onaI 5, Mo,"ter 8aos M(lli,n, of doI!ars MOhons of dollarn I I I I 1 7 III I I I I II Changin5SaroIe of fi,n-tlatioal Nn-M,n5er 2,00) 1003 7,000 600 600 600 600 500 500 400 400 N,fja.,l ta'tn 300 300 - Ratio scale 200 II Ij,___,,.1.,___l It II _._..__I__I IItill 200 7971'78 7920III '27'22'23 '27'28 '34 1935 '38'31 '42'43 1944 'II '24 IllS '26 '29 7930 'lt'32'33 '38'39 940 '41 As explained in Section 2, the curves plottedfornon-national and non-member bank call date figures are noncontinuous; consequently their level has no significance.