Exhibit G.

CERTIFICATES OF INDEBTEDNESS.

1 Includes $160,500 purchased by the Federal Reserve Bank of Minneapolis.

Total.

No. 43.-Subscriptions, by classes of subscribers, to certificates of indebtedness issued in anticipation of the third and fourth Liberty loans-Continued.

SEVEN ISSUES OF CERTIFICATES OF INDEBTEDNESS PRECEDING THE FOURTH LIBERTY LOAN.

NOTE.-Figures for State banks, trust companies, and other banks are only approximately correct, since in some States no distinction is made between the several classes of banks operating under State laws.

Exhibit H.-EARNINGS AND EXPENSES OF THE FEDERAL RESERVE BANKS FOR 1918.

Total earnings of the Federal Reserve Banks for the calendar year 1918 were $67,584,417, compared with $15,438,858 for the calendar year 1917, while total current expenses were $12,137,438, compared with $4,235,866 for the earlier year. Current expenses for the year under review include besides $8,463,957 of expenses of operation proper-$2,423,540, the cost, including expressage, insurance, and other expenses incident to the issue and retirement of Federal Reserve notes and bank notes, $1,133,524 depreciation on furniture and equipment, and $116,417 the cost of alterations and repairs to bank buildings.

Total expenses shown above are exclusive of the expenses of the fiscal agent departments. The latter are treated separately, being reimbursable by the United States Treasury Department. For the past year the Federal Reserve Banks, as fiscal agents of the Government, mainly in floating the certificate issues and the last two Liberty loans, disbursed a total of $16,256,689. In addition there was outstanding at the opening of the year a reimbursable amount of $1,699,661 disbursed by the banks during 1917. Reimbursements received from the Government during the year totaled $8,382,709, leaving thus a reimbursable balance at the end of 1918 of $9,573,641.

Net earnings of the banks, i. e., the excess of earnings over current expenses, totaled $55,446,979, or at the rate of 72.6 per cent on an average aggregate paid-in capital for the year of $76,342,000, compared with an average rate of 55.9 per cent for the first six months of the year and 18.9 per cent for the calendar year 1917. New York shows net earnings for the year at the rate of 113.5 per cent, Kansas City at the rate of 78.4 per cent, San Francisco at the rate of 70.6 per cent, and Chicago at the rate of 67.7 per cent. Of the remaining banks six show net earnings at rates between 50 and 60 per cent and 2 at rates between 40 and 50 per cent. All arrears in dividends having been paid at the end of June, dividend payments at the close of the year covered only the six months ending December.

To the net earnings above shown should be added the net profits carried over from 1917-$1,158,715, also net amounts credited during the year direct to profits-$74,772. This gives total gross profits of $56,680,466. Deductions from this total, $2,805,441, comprise depreciation allowances on bank premises $1,609,537, on vaults $40,500, and on United States bonds $848, 129, also special reserves of $307,275 set aside by the New York and San Francisco banks to take care of future contingencies. This leaves available for dividends, surplus, and franchise taxes a total of $53,875,025, out of which were paid all dividend arrears and the maximum 6 per cent dividends for the year, totaling $5,540,684. Of the remaining amount one-half up to 40 per cent of the paid-in capital of each bank was carried to surplus, the total thus carried being $21,605,901. The balance, $26,728,440, was reserved for franchise tax to the Government. It will be noted that in the case of the New York bank the amount reserved for franchise tax is $12,795,215, or more than $5,000,000 in excess of the 40 per cent of the capital, the maximum which the bank is permitted at present to carry to surplus. For the other banks the

100823°-19-14

ratios of surplus to average paid-in capital for the year stand as follows:

For the system as a whole the ratio of surplus to paid-in capital is 28.2 per cent.

Of the total earnings of the banks 71.5 per cent, as against 45 per cent the year before, came from discounts, largely of war paper. Bills purchased in the open market contributed 17.7 per cent of the total earnings, as against 32.2 per cent; United States securities, chiefly Treasury certificates, 5.7 per cent, as against 15.3 per cent; transfer operations yielded about 1.5 per cent of the total earnings, as against 3 per cent the year before, and the remainder came from penalties on deficient reserves, service charges, commissions, profits on foreign exchange operations, and sundry smaller profits. Expenses of operation of the banks proper, exclusive of their fiscal agent departments, totaled $8,463,957, compared with $2,669,855 in 1917. Of the larger total about 42 per cent, as against 28 per cent in 1917, went as compensation to the clerical staff, and 11.5 per cent, as against 23 per cent in 1917, as salaries to bank officers. Nearly 10 per cent of the total operating expenses went for postage and expressage and over 6 per cent for printing and stationery. Contributions of the banks for the support of the Federal Reserve Board aggregated $382,641, as against $237,795 the year before, and constitute about 4.5 per cent of the total 1918 expenses of operation, as against about 9 per cent the year before. Rent paid by the banks is about double in amount that for 1917, though some of the banks own the premises or parts thereof occupied at present by them. This is true of New York, Philadelphia, Richmond, Atlanta, Dallas, and San Francisco. With the exception of Cleveland and Minneapolis, all the banks have purchased ground on which it is proposed to erect buildings for use as permanent banking quarters. Total book value of the investments in "bank premises," after allowing $1,609,537 for depreciation, stood at $8,081,841 at the end of the year, compared with $707,611 at the beginning of the year.

14, 222
978, 189
58,029

698, 991
421,332

7,995 149, 733

96, 409

27,719

23,493