Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-05-01
LOCAL RESERVE BANK
BUSINESS INCREASES
Annual Report Shows Net
Earnings of $753,874, Equal
to 1872 p. C. on Capital

The third annual report on operations
Of the Federal Reserve Bank of Phila-
delphia, prepared by Richard H. Austin
Federal Reserve agent and chairman of
the local institutions board OF di-
rectors, shows that the last year was
an unusually successful one for busl-
ness done in this city.
II is shown by the report which was
submitted to the Treasury Department
at Washington and made public today.
that during 1917 the total resources of
the Federal Reserve Bank of Philadel-
phia increased from $54, 500, 600 to S2l2,-
100000 Part of this increase was due
TO the changed form of bank statement,
which now includes Federal Reserve
notes in circulation as liability of the
bank, and gold with the Federal
Reserve agent as an asset Of the bank
Reserve deposits Of member banks in
creased from $4,000, 900 to SlO3, ,0OO, 900
The reserve of the Federal Reserve
Bank increased greatly In amount, but
the percentage figure declined. as might
be expected i'm view of the heavy bor-
rowings by member banks on account of
the war financing. in the latter part
of January, 1917, the reserve against
combined deposit and Federal Reserve
note liabilities was 81 per cent, COM
pared to 81 per cent in the latter part
or December.
Gross earnings Of the bank for the
year amounted 20 Sl.015,OO0. and net
earnings, $753,S74. This was equiva-
lent to 1872 per cent on the capital
stock. and enabled the bank to clear
up accumulated dividends from July l,
1915, 30 June 80, 1917. amounting to
S622.1GO. The rate of earnings rose
steadily throughout the year, and in De-
cember were at the annual rate of 3O.2
per cent On the paid-n capital stock,
which on the last day of the year
amounted TO $6,142.OOO. The profit and
loss account on December 81, 1917,
showed a balance of 100000
In its discount and investment opera
tions, the Federal Reserve Bank did a
total business of $329. 700, 900. or an
average Of nearly 81 900, 600 a day. This
was an increase of 2S4 per cent over
1915. Rills discounted for member
banks comprised 6S per cent of the
total operations, and bills bought &c
per cent. In the previous year bills dis
counted comprised only 26 per cent of
the total operations and bills bought ca
per cent The average daily holdings Of
discounts and investments was 500. 7O0,-
OO0 The total earning assets at the end
of the year amounted TO S63.900, 900,
compared with S18,5O0.O 900 the preced-
ing year and S6.2OO,OOO on December
81, 1915 Earnings on investments were
at the average rate of 3.32 per cent.
compared with 2.42 per cent in 1916.
The average rate of return advanced
from 2.90 per cent in January TO 46l
per cent in December. Borrowings Incl
dent to the placing of the war loans
were largely accomplished by obligations
having maturity of fifteen days and
less. The banks assets were in very
liquid form throughout the year
The act of the Pennsylvania Legis-
lature, making Federal reserve notes a
part OF the lawful reserve Of state in
stitutionS effected the exchange of a
considerable amount of gold held by such
institutions for Federal reserve notes
The amendment TO the Federal Reserve
act abolshing the carrying of any part
of a national banks reserve i'm cash also
enabled the member banks to exchange
their gold for Federal reserve notes
The demand for currency was heavy,
due to the abnormal activity in all lines
of business Federal reserve notes in
circulation increased during the year
from Sl7,00O,0O0 to over $4,000, 600,
$40 and $50 notes being in especially
great demand. The gold reserve main
tained against Federal reserve notes
was always far in excess of the required
10 per cent,
During 1917, the Federal Reserve
Bank cleared the great amount Of 81
146,0OO,O0O for the banks belonging to
the collection system consisting of H.
100000 items, about one-half Of which
were drawn on Philadelphia banks. Not
included In these figures were 375,3OO
Government checks, having a value Of
s216,6O0,0O0 Bank clearings I'm the
district reached a high record in October
1917, when they were Sl,G7S, 900, 600.