The Washington herald., 1922-08-05
FIN cIAL
FEDERAL RESERVE
RATIO ADVANCES
TO 1857 IN WEEK
Gain Occurs, Despite In
crease of $13,3 800, 900 in
Note Circulation.

The reserve ratio OF the COM
bined Federal Reserve banks rose
during the week ending August .
from 7s.2 to 1915 per cent. bringing
the figure to the highest point
since September. 1917, the Federal
Reserve Board announced yester-
day. This increase occurred in
spite Of gain of s13.3oo.oo0 In
Federal reserve note circulation
and was due to a gain of s1s.o0o.oo0
in gold. and of s4.300.000 in other
cash reserves. combined with a re-
duction of s3.1oo.o00 in deposit liza
bilities. Total bin holdings in
creased s14.2oo.oeo.
There was a gain Of SIS. 900, 900 in
bills secured by government obli-
cations and of s4.so0.ooo In bills
discounted for member banks. while
bills purchased in the open market
declined to the extent of s5.60O. 900.
Although there was this slight gain
In bill holdings the aggregate Is
still very near the low point of
the year. reached dusing the pre-
ceding weeks and amounts to only
about q third of the holdings Of
bills by the Reserve system a year
ago. The slack demand for COM
mercial credit thus indicated points
to a continuation for some time of
conditions conducive to cheap
money.
Member Banks Condition.
Continued loan liquidation, ag-
gregating ss7,o0o.0o0 as against a
further Increase of s5s.0oo.ooo Of
Investments. largely in corporate
securities. accompanied by substan-
tIal reductions in demand deposits,
reserve balances and borrowings
from the Federal Reserve banks. is
Indicated in the Federal Reserve
Boards weekly statement of con-
dition on July rs of 1874 member
banks in leading cities. Loans and
discounts of member banks in New
York City show "a reduction of s7S.-
100000. of which ss1 100000 repre-
sents the reduction of loans Sc
cured by corporate obligations and
s17.O00.0OO the reduction of other
loans and discounts, largely loans
Of commercial character.
Investments of the reporting
banks in United States bonds show
an increase for the week of s2o,-
0O0. .0OO. while holdings of other
government securities declined by
$4,000, 900. For member banks in
New York City an increase of
s7.00O.0 900 in United States bonds
and Of s3.oo0.o0o in other govern
ment securities Is noted. As against
the substantial liquidation of loans
bank Investments in these securi-
ties show an increase OF $4,000, 900.
the greater part outside Of New
York City. Total loans and in
vestments of the reporting institu-
tions declined by ss.000.000 and
those of the New York bank by
1000. 900.
As against a nominal decline in
government deposits and a reduc-
tion OF s5s.00o. 900 In other demand
deposits (s56,000.c0 in New York
City) time\deposits show a further
gain of s2s.0oo.ooo (s1s. 900. 900 In
New York City,. Borrowings Of
the reporting institutions from the
Federal Reserve banks show a re-
duction for the week from .$15s.000.-
900 to sss,O0o.e00. or from l TO 0.6
per cent Of their combined loans
and investments. For the New
York City banks reduction from
s72. 100000 to s1o.0o0.o00 In bor-
rowings from the local reserve
bank and from IA to OF per cent
In the ratio of these borrowings
to total loans and investments is
noted.
Reserve balances of the report
ing institutions show a decline for
the week of s46.0oo.00o. while cash
in vault fell of ss.o00.00o. Mem
ber banks in New York City report
a decrease of s24.0o0.ooo In reserve
balances and a nominal increase in
cash on hand