The Birmingham age-herald., 1921-01-02
Reserve Bank Capital In- creases During Year From 87.4 to 98.8 Millions. Changes In Condition of Banks Reflect Changes In Policy Originated In 1918

ruary 2, and 246.9 millions below the cor responding total at the beginning of the year, decreases in reserve and net de- Hposits reflecting reductions in demand deposits Of member banks, especially during the latter part of the year
 CIRCULATION EXPANSION
 Federal reserve note circulation, after the usual contraction at the beginning of the year, when return flow of notes ,s- sued during the holiday season occurs, shows an almost uninterrupted expansion from the minimum amount of 2S44 mill lions on January g to maximum of 5, O4.9 millions on December 9 The total of 3,3447 millions on December 30 marks a reduction of coz millions for the week, but an expansion of S45.7 millions from the beginning of January, note expansion rather than growth of deposits accom- panying the increase in the borrowings of member banks. Federal reserve Eank note circulation shows a practically steady decline from a59 millions on Jan- uary to IF millions on May IA, but since that date an increase to PIT mill Hons on December 30 is noted.
 During the early part of the year the federal reserve banks lost gold, largely through export to South America and. to the Orient. and on March 26 total gold holdings were 1895 millions, marking a reduction of 18 millions from January ?. Since that time. partly the result of gold shipments from England in an- ticipation of the maturity of the Anglo French bonds on October 15. there has been an increase in gold reserves, the total of 2.5N9.3 millions on December 9 being only 33 millions below the total shown on January 2. During the latter part of the year all the gold held with foreign agencies, except 3.3 millions held by the Bank of France for federal re- serve account, was returned to this coun- try Since the gold Sheld abroad was counted as part of the banks reserves. it's transfer from abroad has had no eff feet on the reserve ratio. Total cash re- serve show an increase of 127.9 millions, or from 2,121.3 millions on January 2 to 2,249.2 millions on December 30. the larger part of the increase being due to depos- it's of silver by the United Sttaes treas ury.
 ALL GOLD RETURNED
 .Interbank discountingJ showed con siderable increase about the end of April when nearly lO IIlilloflS Ol TeulSCOuItcu bills were carried by the Boston. New York and Cleveland banks for seven other reserve banks. After a slight re cession these operations were resumed on an increasing scale early in August. and on October g the Boston, Philadel- phia and Cleveland banks reported a maximum for the year of over PAT mill lions of hills held under discount for eight other reserve banks. At the close of the year total discounts of the above three banks included 115.3 millions of paper discounted for five other reserve banks in the south and middle west
 During the year the paid-in capital of the federal reserve banks increased frcni STA to 9e.S millions. or by 12.4 millions. corresponding to an Increase of over All millions in capital and surplus of mem Der banks. This gain is due primarily to increases IT capitalization of existing member banks and a smaller extent to accessions If new members.
 The reserve ratio of the federal re- serve banks, as consequence of the changes detailed above, as higher at the end of the year than at its beginning, the percentage being 454 on December a. compared with 437 on January 9 The ratio was brought up to AS per cent cn June IS. and to 45-5 per cent. the maxi mum for the year. on DecemberA H, the Fridays following two of the quarterly income tax dates <