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New York City

European War, Mexican Situation and
Congress the Dominant Factors

To the layman the mechanism of the New York Stock Exchange doubtless appears baffling at times and lacking in the quality of consistency, at least, so far as daily fluctuations are concerned. When quotations might be expected to go down in response to unsettling factors at. home or abroad, they go up and vice versa. The "outsider" often fails to allow for the fact that professional influences are constantly at work and that a rise or fall of several points in the active list during a single session may be due to technical considerations or sentimental anxiety fostered by "long" or "short" accounts. Last fall, during the height of the "war stock" craze there seemed to be neither rhyme nor reason in the daily course of the market, unless we adopt the conclusion that it was an "open season" for lambs..

Close observation, however, shows that the security market is now responsive to more conservative pressure than in the past. There is a more intelligent appraisement of present and future effects of developments whether arising out of the war in Europe, the strained diplomatic negotiations regarding submarine warfare, the status of merchant ships armed for defense or the Mexican situation. Although there are numerous uncertain factors the responsible banking, financial and trust company managements of this city realize that there is at least one sound formula to observe and that is to adhere to conservative policies.

There is little likelihood of another runaway market despite the activity and boom in earmarked war stocks following the announcement of a punitive military expedition into Mexico to "capture Villà dead or alive." Doubtless, the latest phase of the Mexican embroglio growing out of the murderous descent of Villistas on American territory will stimulate the cry for "preparedness" and may increase orders for the manufacture of munitions for our own army and navy forces. But the fact is that banks and trust companies will continue to scrutinize carefully the collateral offered for loans and demand for big margins will operate as a corrective.

The type of Wall Street judgment which refuses to be stampeded by "scare-headlines" is still of the firm opinion that the war in Europe is to be a long-drawn out affair despite the German offensive around Verdun, that the United States will not be embroiled in a war of its own with the de facto government of Mexico and that our peaceful progress is assured by the determination of Congress to give President Wilson a free hand in the conduct of diplomatic negotiations with the European belligerents who show a disposition to ignore neutral rights.

Increasing Strength of Domestic, Economic and Business Situation

Although there are many angles and crosscurrents there can be no doubt that domestic business and financial conditions are being adjusted to a more normal basis. In so far as banks and trust companies are concerned in respect to the extension of credit or loan accommodation, they may be relied upon to exercise a nice discrimination as to demands which are based upon real or temporary expansion. It is likewise gratifying to note that the corporations which are more directly affected by "war orders" are providing against possible "rainy days" by using their earnings to build up surplus accounts and making improvements. At the same time the statistical returns of railway earnings, bank clearings, productions of steel and iron and general trade, either for domestic consumption or export, continue to point toward sustained and increasing activity. The fact must not be overlooked that real wealth is pouring into this country as a reward of peace while half the rest of the world is at war. That readjustment will take place in regard to international trade, prices of commodities, the wage scale and in the employment of capital, when the European powers cease hostilities, cannot be doubted. It must be apparent to every student of current economic affairs, however, that the United States is not only "making hay while the sun shines" but is acquiring a position of strength which will go far toward offsetting the reactionary forces.

THE

SEABOARD

National Bank of the City of New York

cordially and earnestly solicits accounts, active or dormant, from trust companies throughout the United States. Interest allowed. Its solicitation is based upon conservatism, service in all banking lines, excellent facilities, and the fact that its officers give their personal attention to all accounts.

SURPLUS AND PROFITS, $2,865,000

DEPOSITS, $45,000,000

Weekly Bank Statements Reflect Increased

Absorption of Funds

"Will money rates harden?" That is the query which presents itself most persistently to the banker. For the first time in what seems an age the weekly Clearing House statements would seem to indicate that there is a steady absorption of funds in progress which must sooner or later result in higher rates. It is now quite evident that with the cessation of the gold important, for the present at least, the high point in surplus bank funds has been passed. This is confirmed by a decrease in the excess reserve of the Clearing House institutions from $160,236,000 on January 15th, to $136,226,880 reported the week ending March 11th. The aggregate reserve, which stood at $756,035,000 on February 5th decreased to $719,919,000 on March 11th. During this same period net deposits increased $19,000,000 to a total of $3,561,251,000 and loans expanded $58,000,000 to a total of $3,353,825.000. Since January 1st net deposits increased $114.000,000 and loans $107,000,000.

This drawing down of the excess reserve has not caused any appreciable change in money rates. It is regarded as quite likely, however, that there will be a stronger demand for funds from the interior with the opening of spring activities. Considering the big margin of surplus funds over legal requirements and the fact that the Federal Reserve banks have an untouched credit issuing power of over $600,000,000 on the basis of present gold reserve, there is little likelihood of any marked change in the money market.

The following table shows the principal weekly changes reported by trust companies and the Clearing House institutions:

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Connecticut Banks Transferred to New York District

The Federal Reserve Board has granted the appeal of the banks in Fairfield County, Connecticut, to be transferred from the Boston to the New York Reserve District. This transfer of fifteen National banks of Connecticut from the First to the Second Federal Reserve District, the paid-up capital of the New York Federal Reserve Bank, will be increased by approximately $210,000, and the reserve deposits by nearly $7,000,000. The membership of the New York Reserve Bank will thus be increased to 628 banks of which 482 are located in New York State, 131 in New Jersey and 15 in Connecticut. The aggregate capital of the bank will be $11,300,000 and the deposits in excess of $200,000,000.

This is the second time the Federal Reserve Board has extended the boundary of the New York Federal Reserve district from the original limits. On July 1, 1915, National banks in northern New Jersey situated in the counties of Bergen, Essex, Hudson, Hunterton, Middlesex, Monmouth, Morris, Passaic, Somerset, Sussex, Union and Warren were transferred to the New York district.

The Board of Trustees of the Brooklyn Trust Company has declared the regular quarterly dividend of 5 per cent., payable April 15, 1916, to stockholders of record March 17, 1916.

The names of thirteen shareholders of the General Motors Company are signed to a circular recently sent to other stockowners urging that a voting trust be formed for the shares.

Guaranty Service

.XIX

War Tax Law Information

The Federal War Tax Law of 1914, which expired by limitation on December 31, 1915, has been extended by Congress to December 31, 1916.

We have just published a revised edition of our alphabetical synopsis of this law as it now stands, and those desiring copies may secure them by addressing a request to our Department of Publications.

Ask for booklet N-171

Guaranty Trust Company of New York

Capital and Surplus - $ 40,000,000

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NATIONAL BANKS OF NEW YORK CONTINUE TO SHOW
LARGE DEPOSITS

Considering that the aggregate deposits of the National banks of New York City increased during the year 1915 from $1,510,824,000 to $2,569,101,000, a gain of over one billion it is interesting to note that the latest official returns under date of March 7, 1916, continue to denote still further additions to the deposit holdings of a number of the leading National banks of this city despite the recent withdrawals for interior account. Carrying the comparison further back we find that New York has truly outstripped all world banking centers in the ratio of increase in banking power. Twenty years ago, in 1894, the New York National banks had combined deposits of only $585,674,483 a total which was exceeded recently by one National bank alone. Since the war there have been tremendous changes in the relative standing of the world's great banks. Before the outbreak of hostilities there were eleven foreign banks which exceeded in volume of resources the largest bank of this country. A comparison today would probably show only three of the world's largest banks ahead of the largest banking institutions of this country. Indeed there are few Government banks which hold larger deposits than the National City Bank and the Guaranty Trust Company of this city? The former reported a total of $584,827,000 on March 7th and the Guaranty Trust Company $430,912,000 on December 31, 1915.

Irving National Bank

The March 7, 1916, statement of the Irving National Bank of New York shows total deposits of $79,889,337, an increase of $5,370,256 since

January 1st and following an increase of nearly $20,000,000 during the last calendar year. Resources have increased since January 1st from $84,553,963 to $97,147,932. Included in these resources are loans and discounts of $63,811,754; cash and legal tender in vault and due from Federal Reserve Bank, $14,409,441. The growth of the foreign business is shown by acceptances based on imports and exports amounting to $1,033,790 while letters of credit amount to $7,631,035. The capital stock is $4,000,000, surplus fund $3,000,000 and undivided profits $879,873: The $79,889,337 deposits include $42,952,422 due to banks and bankers and $34,536,083 individual deposits subject to check.

The National Park Bank of New York As compared with total deposits of $110,121,800, reported by the National Park Bank of New York at the beginning of 1915, the official statement of March 7, 1916, shows aggregate deposits of $163,178,134. In point of combined resources there has been relatively little change since the previous report of December 31, 1915. Since the first of the year the surplus and undivided profits account has been increased from $15,257,990 to $15,624,909. The capital of the National Park Bank is $5,000,000. Included in the aggregate resources of $191,343,405 are loans and discounts of $94,079,383 with cash resources of specie and U. S. Notes, due from Federal Reserve Bank, due from banks and Clearing House Exchanges and demand loans, of $84,079,383. Acceptances and letters of credit amount to $3,888,561.

Lawyers Title & Trust Company

CAPITAL AND SURPLUS

$9,000,000

Member of The New York Clearing House Association

160 Broadway, New York

44 Court St., Brooklyn

RECEIVES DEPOSITS subject to check or on certificate, allowing interest thereon.
Depository for moneys paid into Court and for money of bankrupt estates.
LENDS ON APPROVED STOCKS and Corporation Bonds as collateral.
ACTS AS TRUSTEE, Guardian, Executor, Administrator, Assignee, or Receiver,
Transfer Agent or Registrar of Stocks of Corporations. Takes Charge of Personal
Securities.

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EDWIN G. MERRILL, President

JOHN V. B. THAYER, Vice-President
JOHN Y. G. WALKER, Vice-President

CARROLL C. RAWLINGS, Vice-Pres't & Trust Officer
HENRY M. POPHAM, Vice-President
HENRY M. MYRICK, Secretary
T. W. HARTSHORNE, Ass't Secretary
BENJAMIN A. MORTON, Ass't Trust Officer

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Acts as Executor, Guardian, Trustee, &c. Administers "Institutional" and Other Fiduciary Trusts. Receives Securities for Safe Keeping and Collection of Income.

ALLOWS INTEREST ON DEPOSITS

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