The sun., 1919-08-18
FEDERAL RESERVE
EARNS $S7,62S,Ss1
Profit for Six Months at An
nual Rate of 90 Per Cent.
on Paid In Capital.
DIVIDENDS OF $2,458,652
Sum of S31,618,248 Carried to
Surplus and S3,512,45O to
Profit and Loss.


WARRINGTON, Aug. 17.-Net earnings
Of the twelve Federal reserve banks OF
the country for the first six months of
the present year we're s37,62s.s31, or a
YEARLY rate Of 90 per cent. on an average
Maid in capital of ss1.7ss.oeo. Earnings
for the first six months of 1918 were
$50 per cent, and for the first six
months Of 1917 only s.s per cent. These
figures on earnings have been compiled
by the Federal Reserve Board. They
Indicate clearly that the surplus ac-
counts Of the various banks. limited by
law. soon would be filled to the maxi
mum but for the recent extension of the
total amount by Congress.
The earnings will not mean. 1t is
understood any reduction in discount
rates, as these rates FOLLOW financial con-
ditons. Disposal of the earnings for the
six months has been made as follows
First. all dividends for the six months,
s2,453,652 were paid. About 10 per
cent, or S3,512,450 OF the rest was car
rled to a profit and loss account, while
s3i,sls,243 was carried to surplus.
Surplus Fund Now es1 ,Ose,s1s.
The amount carried to the surplus
fund brings this fund up to $S1. 0Ss,sls
as Of June 80 last. This amount is
about 40 per cent. of tho aggregate SUBJ
scribed capital of the twelve reserve
banks In the case of the New York
bank the surplus constitutes about a
per cent Of the subscribed capital. and
in the case of the Kansas City bank
about SO per cent. Surplus funds of the
other banks are below so per cent. of the
subscribed capital. or below 100 per cent.
Of the banks paid in capital.
Total earnings Of the Federal Reserve
banks for the six months ended June 80,
1919 were s46.69o,577, compared with
s2t,s50.190 for the corresponding period
in 1918, while total current expenses for
the same period were Se.0s1,74s, COM
pared with s4,152.o2s in 1918. Current
expenses for the first half of the present
year include s6.552.4s4, expenses Of oper-
alton proper, 2,017,176 the cost of Fed
eral Reserve notes and bank notes and
other expenses incident to the issue, ship
ment exchange and redemption of Fed
eral Reserve currency. 3447,s76; the cost
Of office furniture and equipment, and
sA,210 the cost of alteration and repairs
Of bank premises in use.
Expenses shown are exclusive of the
expenses of the fiscal agency depart
ments. incurred mainly In floating the
certificates and Victory Loan issues.
The latter are treated separately, be-
ing rembursable by the Treasury De-
partment. During the six months of the
present year the banks. as fiscal agents
for the Government, disbursed a total
Of ll.11e,274, as against s6,425,102 dur
inr the first siy rnOuthg IN 1919
PROFIT From wIar Paper.
In addition, there was outstanding a,
the beginning of the year a reimburs-
able amount of ss,5T3,ss0 disbursed by
the banks during the last year REIN
bursements received from the Treasury
during the period totalled s13,010,430
leaving thus a relmbursable balance on
June 80 of $7.6s2,67f$
OF the total earnings for the siz
months of the present year more thar
50 per cent. compared with so per cent
in 1918, came from bills. largely wal
paper, discounted for member banks
Earnings from bills purchased in the
open market largely bankers accept
snces, were about 100000 less than fol
the corresponding period in 1913, and
constituted about IL per cent. of tho
total earnings. compared with 22.6 pei
cent. in 1918.
Earnings from United States securi
ties, largely 2 per cent Treasury certih
Gates TO secure Federal Reserve banl
note circulation, differed but little from
corresponding earnings In 1918. and com
prised more than 5 per cent. Of the tota
earnings as against 10 per cent. for tn,
first half Of the previous year.
Combined earnings from the thre'
sources named account for. about IS PEI
cent of the total earnings of the Fedora
Reserve banks. The remainder Is mad
up Of earnings from bank transfers. pen
altes and interest charges on defcien
reserves. rent for-the temporary use o
bank buildings and other smaller mis-
ceaneous profits