The Birmingham age-herald., 1921-01-02
Little Change In Gold Reserve at End of Year Shown In Annual Review of Federal Reserve Board, Exports Be- ing Offset By British Ship mentS to United States
By Associated Press

Washington, January 1.-Holdings of paper secured by government war ob- legations declined from nearly 1,50o millions at the opening of the year to Al millions on December 31. said the annual review issued tonight by the federal reserve board At the end of the year." 1t added. "out of total of 2,719.1 millions of discounted bills. about 42 per cent was composed of pa- per secured by United States war obli- gations against 67 per cent of a total of 2,2s1.2 millions held on the first Fri day of the year"
 The gold reserve. according to the re- view, shows little change at the end of the year as compared with the end 12 months earlier. Although considerable gold was exported to South America and the Orient early in the year, it was explained. gold shipments from Eng land in anticipation of the maturity of the Anglo French bonds on October Is were responsible in a measure for a subsequet recovery so that on Decem- Der 30 the amount was only 5.3 millions below the total shown on January 2.
 Increases in capitalization of existing member banks and accessions of new members were responsible in part for an increase in the paid-in capital of the federal reserve banks during the year from STA to 9S.S millions. This corre- sponded to an increase of over i'll mill lions in capital and surplus of member banks.
 CHANGES REFLECTED
 Changes in the condition of the fed eral reserve banks during 1920. accord ing to the review, reflect to large ex- tent the changes in the credit policy originated about the last of 1918.
 'Preferential rates on paper secured by Liberty Bonds and Victory Notes' the review continued. were abrogated by some reserve banks and raised by others to a level more nearly approxi- mating the rate level for ordinary com mercial paper. In the case of paper secured by treasury certificates the rates adopted were in most cases iden- tical with the higher coupon rates with the higher Coupon rates fixed by the government, thus holding out no inducement to the member banks
 
 own investments and use them as col lateral for loans at the federal reserve banks. but rather providing a stimulus to place them in theshands of ultimate investors. The results are seen in the gradual decrease of the amounts of war paper held during the year by the re- serve banks.
 From nearly 1,500 millions at the opening of the year, the holdings of pa per secured by government war obliga- tions declined to 1,141 millions on De- cember 30.
 REDUCTIONS SHOWN
 "Of the latter total, 1SS millions, or 16.5 per cent. were secured by treasury certificates. compared with 4s1.5 mil lions or over 31 per cent: held at the opening of the year. this decrease cor responding in a general way to the re- duction in the amoune of certificates held by the member banks. Much smaller reductions are shown in the re- serve banks holding of paper secured by Liberty Bonds and Victory Notes. the December 30 total. 953 millions. being only 70 millions less than the amount reported at the beginning of the year On the other hand. holdings of other paper which at the opening of the year totaled 746.s millions. show. an almost steady growth. being In ex- cess of 1,500 millions at the end of De. cember. and fluct,ating between 1,5o0