Page images
PDF
EPUB
[blocks in formation]

CHECKS DRAWN ON THE TREASURER OF THE UNITED STATES, HANDLED BY TIIE FEDERAL RESERVE BANK OF CLEVELAND AND ITS BRANCHES DURING THE YEAR.

[merged small][merged small][ocr errors][ocr errors][merged small][merged small][merged small][merged small][merged small]

VOLUME OF CHECKS HANDLED FOR MEMBERS AND OTHER FEDERAL RESERVE BANKS BY THE FEDERAL RESERVE BANK OF CLEVELAND AND ITS BRANCHES JAN. 1, 1918, TO DEC. 31, 1918.

[merged small][merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][merged small][merged small][merged small]

This schedule includes Government checks scheduled under "checks drawn on Treasurer of the United States."

Items handled by both parent bank and branches and duplicated in above schedule, 370,706; amount, $1,159,690,343.29.

Total number of items handled, 14,008,235.
Total amount handled, $9,422,429,678.30.
Disbursements, transit department, $282, 198.33.
Cost per item handled, 2.0i cents.
Cost per $1,000, 3 cents.

3

SCHEDULE 22.-Gold settlement fund operations, Jan. 1, 1918, to Dec. 31, 1918.

[blocks in formation]

DISTRICT NO. 5-RICHMOND.

CALDWELL HARDY, Chairman and Federal Reserve Agent.

FINANCIAL RESULTS OF OPERATION.

The financial results of the operations of the Federal Reserve Bank of Richmond for 1918 have been most satisfactory. The increase in the productive assets from $46,000,000 on December 31, 1917, to over $97,000,000 on December 31, 1918, is reflected in the earnings for the year. These show a gross increase from $770,000 in 1917 to $2,979,000 in 1918, which, with an increase in expenses from $307,000 to $667,000, results in a corresponding increase in net earnings from $462,000 to $2,300,000. After payment of dividends, there remains $2,079,000, one-half of which was carried to surplus, the other half being payable to the Government as a franchise tax. Earnings, dividends, and comparative report of profit and loss are shown in Schedule 1, and expenses in detail in Schedule 2.

Schedule 3, comparative balance sheet for December, 1917–18, shows an increase in total assets and liabilities from $111,700,000 to $204,800,000. While deposit liabilities show an increase of less than $7,000,000, Federal Reserve notes have increased approximately $81,000,000, from $56,500,000 to $137,478,000. This expansion in Federal Reserve notes is a striking illustration of the elasticity and power of the Federal Reserve system.

GENERAL BUSINESS AND BANKING CONDITIONS.

The year 1918 was the most prosperous ever enjoyed by the territory comprising this district. The most notable activities are, of course, agricultural. The cotton crop has been the largest ever produced, with one or two exceptions. Prices have averaged in the

. neighborhood of 30 cents per pound as against a normal average of about 10 cents, but the cost of producing the present crop has been much greater than usual. Farmers who have sold their crops are in better position than ever before, but much cotton is being held for higher prices.

The tobacco crop has been large in acreage and output, South Carolina in particular having increased her acreage considerably. The average price has been in the neighborhood of 30 cents and the return the highest ever received for a tobacco crop. There have been unusual farm developments, transactions in farm lands have increased largely in volume, large farms have been subdivided, and a great deal of money spent for building houses, barns and other buildings. These conditions have been reflected in an unprecendented volume of business and great activity in commercial and banking circles.

Labor has been very scarce and inefficient, and wages have been limited only by what has been demanded. Money has circulated freely, the volume exceeding anything ever before known, and has been liberally spent.

The money market has been active, and while the supply of credit has been ample for all purposes, the prevailing rate has not fallen below 6 per cent. Bank profits have been satisfactory after providing for heavy Federal taxes.

DISCOUNT OPERATIONS.

The volume of commercial paper handled during the year, including trade and bankers' acceptances and Liberty loans, is shown on Schedule 4, by quarters, including daily average during the year and balance held on December 31, 1918. The volume classified by States is shown in Schedule 5. The schedules show an increase in the total bills held from $42,800,000, December 31, 1917, to $91,700,000, December 31, 1918. The principal increase has been in loans secured by Government obligations. Discount rates current for the year 1918 are shown in Schedule 6.

TRADE ACCEPTANCES.

Trade acceptances have been used to an increasing extent, particularly in financing sales of cotton to mills. The volume of bankers' and trade acceptances actually discounted has been much larger than the average volume held would indicate. Our contingent liability on bills rediscounted with other Federal Reserve Banks on December 31, was $4,787,000. This was due to our rediscounting commercial paper and bankers' acceptances from time to time with other Federal Reserve Banks (to an aggregate of $69,000,000 during the year) in order to maintain our reserve on a fair parity with those of other Federal Reserve Banks and at the same time meet the increasing demands of member banks for loans on Liberty bonds and United States certificates of indebtedness.

OPEN MARKET FOR ACCEPTANCES. We have maintained an open market for bankers’ acceptances originating in this district. Large transactions have been financed by these acceptances to a very considerable extent, particularly in cotton and tobacco. While we have endeavored to see that such

« PreviousContinue »