Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1921-01-02
WAR OBLIGATIONS DROP
1853 MILLIONS IN 1920
Decline I'm Paper Holdings
During Past Year.
GOLD RESERVE IS STABLE
Exports to South America and
Orient Early In Year Fail to
Lessen Accumulation In Treas
ury-ShowS Little Change.
lny AaeocIntcl rress.l

vi Dhp'f secured ny government war
obligations declined from nearly
Sl.3G0, 600. 900 "A: In" opening OF the
year to sl,lil 1000 on DeGember
H. said the annual review issued to-
night by the Federal Reserve hoard
"A, TIA. ond OF the year II added.
''ou; Of a total of 2.Tl9i millions of
discounted bills. about AZ per cent
was composed OF paper secured by
United states war obligations. against
o. per cent OF total 0f 2.@3l.2 MIL
lions held ON the nrst Friday Of the
year"
The gold reserve. according to tn"
review. shows little change at the
end OF tho year. aE compared with
tn" condition twelve months earlier.
Although considerable gold WAS cN-
ported 70 South America and the
Orient early IN ia" year. Il was cN-
planned gOH shipments from Eng
land IA anticipation OF the maturity.
or the ALiE o-FEeHch bonds on DC
tobrr - we're rrsgpns!Oi" ia a ircas-
sure Tor - subsequent recovery. $50
tina, on December 81 tho amount was
only 3.a m!lil0ns below lAr total
SHOWN On January :.
increases ia capi taiizat!on % OK
lSi!nS member banks and acccasiOns
ui new members were Responsible in
Part for an Increase In tn" pa.d-iu
during tn" y"ar from So to gg.s
Hli'lipnS THIS cgrr"spOnd"d TO an in
ere.is" Of over All miiions ia capital
ANA surplus OF member banks.
ia:O Changes Rrncctrd.
;. Changes IN the condition Of the
Fed"Tai reserve banks during 1920
according 10 the review. reflect. TO :,
MrEc extent. the changes In the
,feH4i poi!aY originated about tn.
last uf l3lr
.rIeicrcpt!nl rates on paper Sc
cured by Liberty bonds and victory
notes" thc review continued. "wcr,
ahFpEatri ~ SON" reserve banks and
sN.Aah ~ pih't' - lcre! more
nearly approx mating the rate level
10y ordinary commercial paper
In ih" case ~ paper secured hv
!T'usIry certificates the rates nGOpt-
W. hGhcr coupon rates liked by ht.
government THUS huidjug out no In
1IGri"e.t 10 me in"mh.r banks. TO
'drr% these securities among their
own Investments ana use them as
c"llhtnTil ioi loans 80 the Federal
I'Str'r banks but .rnth"r. prevailing
81 " iHat" Investors TIE results
.'re seea In the gradual d.. rcas.. ~
y" hnDInis Dt war pApcs hc.i Ilr-
NE re year 9y TIE r"sory" banks"
FROM nearly 1890 millions "a. tho
op"niug of thc year the holding Of
parnr secured bv rgv-rumcut war nib
iiEai Ions declined 10 i,liI millions ON
smaller deduction shown.
gt tho latter total .as millions. OF
80 per cent. we're secured by t.cna-
Ary cc!iiAoSics. compared TtA itl =
ihIIi'ons. .! over 5! per ye/~ held Il;
tie opening %! The X.Ar-tn's decrease.
c"rfcsponu!nS - . general way 20 tt.,
."nuci!nn "a The amounI " certN-
Gates lIc!d ~ TIA" member banks M4cn
h'"i.ttF tthGct!onh arc shown IN tho
reserve banks holdings OF ptpar Sc
cutsd 5y Liberty bonds ana Victory
notes, the December So total az mi :
lions, being only 20 millions less than
tne amount reported at the bes inning
OF tho year.
on the other hand. holdings Of other
ntsc1uhtrh paper which - the open :
ing of the S.Er tcta!cd 1863 millions
sho" an almost stead! growth. being
in excess %: LOCO millions ~ the end
q: SEPTEMBER ana iluctuat!tc he
tween about 1900 and 600 u.Iltons
during ihc last three months OF the
At IA. rnd 81 the year on. of n
toi:n oi 2.'lti millions oi discounted
osI.s about ~ Der ccnt WAS con. posed
OF paper occurred by rnitcd states
".' obligations. uGHiHs: 60 p"r cent
~ " io;a! Z" --@i= millions held on
tHe nrSt Fruay OF the year
IaTly iu the year tn. Fedora! re-
serve banks raised their discount
rates on commercial paper. but til.
!iNucAcc OF the higher rates Is seen
III rriar!iuS the progress 81 borrow
ins rather than ~ restricting them.
IN fact, :ptal Federal reserve bank
holdings &; d:acOuatcd BINS. 223I .
iMcreASsd hy over 800 millions UP TO
thc end 81 APRIL and by another zoo
millions during the next four months
reached on November ). while the
,9tal he'd on DecGnE r 30. 2,7is.l mil
lions. IS 1873 m!lll9ns larger than a,
the bcEinn.ns OF the year
ii"ldings OF BILLS Decline.
holdings OF bills purchased In
opra ,narhct snow an alinost uu!ntcr-
rupted DECLINE for the period under
review. From a total Of 5TII ,,u
lions at the beginning OF the year. a
decline 10 &55;' millions on December
lions being due largely to the IN
creased demand for this class OF bills
hS s1vin*s banks. trust companies.
also corporate and Individual invest
shown on the amounts ana classes OF
United states bonds held.
FLUCTUATIONS In the holdings OF
Treasury certificates during the year
arc largely the result Of the issuanr.
by tho government from time to time
q temporary certificates pending
Institutions. The largest figures mr..
shown COR the four Fridays following
INC quarterly iucom. tax dates. when
temporary advances to the govern
mon; - the reserve banks for tho re-.
dempt!on Of tax certificates were n,
thcir maximum.
Total earning assets Of the Federal
reserve bpuks which stood at alsl 3
millions on January =. reached The
hgh point Of a,i22 millions ON ohto.
Der ~. ana at tho end OF The yr;r
stood &, $.2G3 millions. an increase OF
over so millions TO; the wear
Net DrpnsitS Decrease
Net deposits OF the reserve hopls
show q general downward tcn1rncv
for tho year, the December 20 tota,
of lG0i.2 millions beini; oSO.4 millions
below tho maximum amount shnyvn
for February 81. ana 1863 million.
below the corresponding total AT In"
hcginniO~ of the year. decreases in
reserve and net deposits rejecting re-
auctions m demand deposits of mem
Der banks. especially during the lat :
ter part OF the year.
Federal reserve note circulation
after the usual contraction nj tho he.
rinnin.; OF the Year. when Il return
row Of notes issued during the hoii-
day season occurs. shows an almost
UNINTERRUPTED expansion from thn
minimum arhount OF 2.Sii millions m,
January - 10 Il maximum OF 3.iOI q
millions on December -.
The total az 3.2i47 millions on De-
crmhcr 80 marks n reduction OF co. Q
millions for the week. but an eypan-
sion Of 1851 millions from tho be-
ginning Of January. note expansion
rrthcl than growth OF deposits ac-
{i'erps',9r IN Er,,oc*ovc