GOLD SETTLEMENT FUND. AUDIT OF GOLD FUND. An audit of the gold settlement fund and the Federal Reserve Agents' fund was made on November 16, resulting in the following report: We, the undersigned, acting under instructions of the conference of Governors and the conference of Federal Reserve Agents, made an examination of the gold settlement fund and the Federal Reserve Agents' fund as of November 15, 1915, on Tuesday, November 16, 1915, in the office of the secretary of the Federal Reserve Board, at Washington, D. C. In addition to the undersigned there were present, while the cash was being counted, Sherman Allen, Esq., assistant secretary, Federal Reserve Board; Ray M. Gidney, Esq., settling agent; Reyburn R. Burklin, Esq.; representative designated by the Federal Reserve Board. We verified by count an aggregate of ninety one million seven hundred and sixty thousand dollars ($91,760,000) in United States Treasury gold certificates of the denomination of ten thousand dollars ($10,000) each. A list of the numbers of such certificates is attached. hereto. All the balances were verified to us in writing by the Federal Reserve Banks and Federal Reserve Agents, including the five agents not creditors of the gold settlement fund. R. REYBURN BURKLIN, Representative, Federal Reserve Board. THOMAS GAMON, Jr., Federal Reserve Bank of Philadelphia, Representing Federal Reserve Banks. W. E. CADWALLADER, Representing Federal Reserve Agents. DECEMBER 6, 1915. The Federal Reserve Board held in the gold settlement fund on December 23 to the credit of the Federal Reserve Banks $70,360,000, and in the Federal Reserve Agents' fund to the credit of nine Federal Reserve Agents $56,310,000. Total clearings up to and including December 23 have amounted to $964,300,000, which have resulted in net changes in the ownership of the gold held in the fund of $74,459,000, or 7.7 per cent of the total clearings. Previously reported.. Dec. 2, 1915. These certificates, issued payable to the order of the Federal Reserve Board and indorsed by perforation "Payable only to the Settlement of Treasurer of the United States or a Federal Reserve Bank," were taken from a safe in the vaults of the Comptroller of the Currency. The following credit balances were copied from the books of the settling agent, the total thereof being in agreement with the amount of cash resources as proven by us: Boston.. Federal Re- Federal Reserve Banks. serve Agents. 4,260,000 Dec. 23, 1915. Total.. Federal Reserve Bank of Boston.. Atlanta.. Chicago. 7,934,000 St. Louis. Minneapolis. Kansas City 3,103,000 San Francisco... Dallas San Francisco.. 4,619,000 1 Withdrawals have exceeded amounts of the gold deposits made. Federal Reserve Agents' fund-Summary of transactions, Nov. 27, 1915, to Dec. 23, 1915. 1 Rate for commodity paper maturing within 90 days. Rate for trade acceptances bought in open market, without member bank indorsement. A rate of 2 to 4 per cent for bills with or without member bank indorsement has been authorized. Rate for commodity paper maturing within 30 days, 34 per cent; over 30 to 60 days, 4 per cent; over 60 to 90 days, 44 per cent; over 90 days, 5 per cent. INFORMAL RULINGS OF THE BOARD. Below are reproduced letters sent out from time to time over the signatures of the officers of the Federal Reserve Board, which contain information believed to be of general interest to Federal Reserve Banks and member banks of the system: Additional Stock Applications. This is to advise you that the Federal Reserve Board in considering applications of member banks for additional stock will not hereafter require a certificate from the Comptroller of the Currency as to the amount of capital and surplus of the applying bank on the date of application. This will render unnecessary the separate sworn statements heretofore required for the information of the Comptroller's office in cases where there have been changes in the capital or surplus subsequent to the filing of the last report of condition. Purchase of United State; Bonds. In reply to your letter of December 3, 1915, you are advised that any United States bonds which your bank may buy in the open market between January 1, 1916, and March 31, 1916, must, under the provisions of section 18 of the Federal Reserve Act, be deducted from its proportionate share of those bonds which the Federal Reserve Board may require Federal Reserve Banks to purchase from member banks at the end of the first quarter of 1916. In this connection your attention is directed to a copy of an opinion of counsel of the Federal Reserve Board printed on page 99 of the June Federal Reserve Bulletin, and also to a copy of a letter of the Federal Reserve Board printed on page 355 of the November Federal Reserve Bulletin. DECEMBER 4, 1915. As the fiscal year will close on December 31, 1915, the Board deems it advisable that all Federal Reserve Banks close their books on that date. The period from November 16, 1914, to December 31, 1915, may properly be called the organization period. In some instances the banks have not been able to keep a sufficient amount invested to defray current expenses and extraordinary expenditures incident to their organizations. The Board therefore requests: 1. That Federal Reserve Banks having an ings for the period November 16, 1914, to excess of current expenses over current earnDecember 31, 1915, include such excess as an organization expense. 2. That, beginning with the month of Janary, 1916, each bank charge against current earnings each month an amount equal to not less than one-twenty-fourth of the total organization expenses. Where a 3. That, where the earnings of the bank will permit, the cost of Federal Reserve notes issued and in circulation be charged against earnings for the current year. deficiency in earnings exists the cost of such notes used should be included in organization expenses to be charged off at the rate of not less than one-thirtieth each month, beginning with the month of January, 1916. 4. Beginning with the month of January 1916, the cost of notes issued and used should be charged against current earnings each month. 5. Beginning with the month of January, 1916, a reasonable allowance for depreciation in furniture and equipment should be charged against current earnings each month. DECEMBER 10, 1915. Classification of Cotton Bills. There was recently received by the Federal Reserve Board a letter from one of the southern Federal Reserve Banks asking whether a member bank would be justified, if fully secured, in accepting drafts drawn by a local cotton-buying firm having a contract of sale to foreign buyers, if the transaction, after having been made in good faith, ultimately resulted in the sale of the cotton to American instead of foreign purchasers. This question involved an interpretation of section 13 of the Federal Reserve Act, it being understood that the national bank participating in the transaction had received permission |