ABSTRACTS OF REPORTS OF BUREAUS AND DIVISIONS.

The following is a summary of the reports of bureaus and divisions of the Treasury Department for the fiscal year ended June 30, 1915, with the exception that the figures in relation to public moneys are brought down to November 1, 1915.

TREASURER OF THE UNITED STATES.

The financial transactions of the Government have been seriously and adversely affected by the European war. This condition was anticipated at the beginning of the fiscal year, and to offset its effect upon the income of the Government an emergency revenue act was passed by Congress, but even this measure has not made good the reduction in receipts due mainly to the falling off in importations. The ordinary revenues for the fiscal year 1915 were $697,910,827.58, notwithstanding a decrease of $82,533,342.30 in receipts from customs as compared with those of 1914; the increased receipts from internal revenue (ordinary), corporation and income tax, and miscellaneous sources was $45,771,003.17, so that the net decrease from all ordinary sources for the year was $36,762,339.13.

The total ordinary disbursements were $731,399,759.11, which by classified comparison with 1914 shows a net increase in the total of civil and miscellaneous accounts, the Naval Establishment, the Indian Service, and interest on the public debt, while decreased disbursements are recorded in the Military Establishment and on account of pensions. The net result on ordinary expenditures was an increase of $31,145,269.40. The deficit on ordinary transactions for the year was $33,488,931.53.

The expenses incurred in the construction of the Panama Canal during the year, amounting to $29,187,042.22, were paid out of the general fund of the Treasury, and the total net balance so expended to June 30, 1915, was $219,471,636.48.

Deposits for postal savings bonds, authorized by the act of June 25 1910, were received during the fiscal year 1915 to the amount of $933,540. Under the provisions of the act of July 14, 1890, deposits of lawful money of the United States to retire national-bank notes were received amounting to $21,553,415, which, with the deposits for postal savings bonds, aggregate $22,486,955 in actual cash received on account of the public debt, while the cash disbursements on

account of the principal of matured loans and fractional currency were $47,533, and for national-bank notes canceled and retired $17,205,958, a total disbursement for the debt of $17,253,491. The net result was an excess of receipts of $5,233,464.

On June 30, 1915, the balance in the general fund was $104,170,105.78, a decrease of $57,442,509.75 as compared with that of the preceding year.

The trust funds, gold and silver coins held to redeem outstanding notes and certificates, increased $95,158,120, and amounted to $1,669,421,989 at the close of the fiscal year. The increase in gold was $92,734,120, and in silver $2,424,000.

The redemptions from the reserve fund during the fiscal year were, in United States notes, $49,599,925, and in Treasury notes, $1,740, making a total of $49,601,665. The redeemed notes were exchanged for gold coin each day in accordance with the provisions of the act of March 14, 1900, and thereby the reserve was maintained at the fixed amount. The reserve fund was increased by $2,977,036.63, being the amount of tax collected during the year on additional circulation issued under the act of May 30, 1908.

The gold in the Treasury at the close of the fiscal year 1915 amounted to $1,382,959,989.18, of which $1,003,825,849.38 was in coin. Set apart for the respective uses, it was held on the following accounts: Reserve fund, $152,977,036.63; trust funds (for redemption of gold certificates in actual circulation), $1,135,213,619; and in general fund (belonging to Treasury), $94,769,333.55.

The imports of gold during the year were $171,568,755, the exports $146,224,148, and the net excess of imports $25,344,607.

The United States bonds pledged to secure bank circulation amounted to $736,024,190 on June 30, 1915, a decrease of $4,772,720 as compared with those of 12 months earlier. United States bonds and other securities, amounting to $54,854,619, were held to secure public deposits in national banks. Under the provisions of the act of June 25, 1910, establishing the Postal Savings System, the Treasurer of the United States held in trust, as security for deposits in postal savings depositaries, bonds and securities amounting to $91,321,801.43 on June 30, 1915.

The general stock of money in the United States at the close of the fiscal year 1915 amounted to $3,989,456,186, an increase of $251,167,315 as compared with that of the preceding year. There was a noticeable increase in the element of gold, which took on a growth of $94,882,381; the silver coins advanced in volume by $5,861,740. United States notes remained, under the law, unchanged. Treasury notes decreased $2,439,000, being replaced by silver dollars. Nationalbank notes received an increment of $68,601,694, and Federal reserve

notes (a new kind of money issued during the year), $84,260,500. The money in circulation increased in volume by $167,204,147 and amounted to $3,569,219,574 on June 30, 1915. The circulation per capita was $35.44 and the share of gold to whole circulation 46.59 per cent.

During the earlier months of the fiscal year an anomalous condition prevailed throughout the country owing to the outbreak of the European war, and for a time all business and financial operations were seriously in danger. Through the prompt and effective action of the Treasury Department, and with the cordial and intelligent cooperation of the banking and business interests of the country, the danger was averted. The Secretary of the Treasury, under the provisions of existing law, authorized the issue of emergency currency to national banks upon their application. The banks were very prompt in making application for the currency, and during the period from August to November, inclusive, more than $382,500,000 of such currency was issued, thus affording a medium that entered at once into circulation, and it contributed largely to the restoration of confidence and the general revival of business throughout the country. This currency was gradually retired after it had served the purpose for which it was issued. The national-bank notes (including the emergency currency) in circulation on November 2, 1914, amounted to $1,083,519,080, and by the close of the fiscal year the amount was reduced to $785,393,047.

During the fiscal year 1915 national-bank notes amounting to $782,633,567 were presented for redemption. This sum was 83 per cent of the average circulation outstanding, and was $75,876,965 more than was received during the previous year, and was also the largest amount presented in a single year since the organization of the National-Bank Redemption Agency in 1874. The largest amount presented during a month was $132,509,108, in January; the smallest, $26,713,805, in September. The expenses incurred for redemption of national-bank notes during the year amounted to $498,328.60, and have been assessed upon the banks in proportion to their notes redeemed at the rate of $0.65147 per $1,000.

The notes and certificates of United States paper currency issued during the fiscal year numbered 280,174,317 pieces, of the total value of $1,164,718,000. The redemptions were 299,455,985 pieces, of the total value of $1,025,086,100. The pieces outstanding number 334,353,365, of the total value of $2,061,576,785. The average cost of each piece of United States paper currency issued and redeemed is about 1.526 cents, and the annual cost of maintenance of the currency issued by the National Government averages slightly more than one-fifth of 1 per cent of the amount outstanding.

The currency shipped from the Treasury in Washington to the subtreasuries and to banks during the fiscal year 1915 amounted to $836,961,227, against $935,952,146 in 1914.

Silver dollars were shipped to depositors therefor at the expense of the consignee for transportation as usual during the past fiscal year. However, the outgo of these coins from the Treasury is more than offset by the inflow, consequently the amount of silver dollars in circulation on June 30, 1915, was $64,647,156, a decrease of $5,653,329 as compared with that of 12 months earlier. The stock of subsidiary silver coin increased $3,423,563 and amounted to $185,430,250, of which $159,265,955 was in circulation on June 30, 1915, a decrease of $699,743 as compared with that of the preceding year. The amount held in the Treasury at the close of the fiscal year 1915 was $26,164,295, against $22,040,989 at the close of 1914. The Federal reserve act imposed upon the Secretary of the Treasury the duty of announcing the date of the establishment of the Federal reserve banks, and in the discharge of that duty on October 25, 1914, he announced the 16th day of November, 1914, for the establishment of the Federal reserve banks in all the Federal reserve districts. On that date the new reserve requirements for national banks, as prescribed by the act, became operative.

Notwithstanding the short time allowed to perfect the organization of the banks, their officers and directors responded with commendable zeal and vigor, and as a result the Federal reserve banks were opened for business in each of the Federal reserve cities on November 16, 1914. The new reserve requirements which became operative on that date released an immense amount of reserve money and largely increased the credit facilities of the banks of the country. It is confidently believed that the reserve banks are going to exert a farreaching influence for good upon the banking system and business of the country.

Section 16 of the Federal reserve act authorizes the Federal Reserve Board, at its discretion, to exercise the functions of a clearing house for the Federal reserve banks. In the exercise of this authority, said board on May 8, 1915, devised and announced a plan for the establishment and maintenance of a gold fund for the settlement of balances arising out of transactions among the 12 Federal reserve banks, to be in the custody of and operated under the direction of the Federal Reserve Board with the cooperation of the Treasury Department. Each Federal reserve bank was required to deposit not later than May 24, 1915, with the Treasurer or nearest subtreasury, for credit to the account of the gold-settlement fund, $1,000,000 in gold, gold certificates, or order gold certificates, which the Treasurer transferred to Washington through the medium of his general account, and in payment thereof issued gold certificates,

series of 1900, drawn to the order of the Federal Reserve Board. The total amount deposited in the gold-settlement fund to June 30 was $31,840,000. Any excess balance may, on request of the Federal reserve bank to which it is due, be refunded by the return to the reserve bank of the gold order certificates held by the gold-settlement fund properly indorsed. If the Treasury finds it necessary to ship from one point to another funds to make payment on account of the said gold-settlement fund the Federal Reserve Board will refund any expenses incurred in making such shipments.

The balance of public moneys on deposit in national banks at the beginning of the fiscal year 1915 amounted to $69,288,369.62. The working balance in the Treasury offices at the same time was $84,570,004.74.

Reports from the several sections of the country in the beginning of the fiscal year indicated that an increased amount of money would be required to facilitate the movement and marketing of the crops, and in order to determine to what extent assistance would be required by the banks, the Secretary of the Treasury sent a letter to each national bank in the country inclosing a blank form upon which an expression of views of each bank was requested. A majority of the banks in the Eastern and Pacific States replied that they would not need Government funds, but, acting on the replies from banks which expressed a wish for assistance through public deposits, the following allotments were made: To the Southern States, $23,500,000; to the Western States, $13,475,000; and to the Pacific States, $350,000; a total of $37,325,000. These funds were distributed in installments of 25 per cent each, the amount distributed to October 31, 1914, being $19,446,246.. The deposits were made only in national banks located in the principal cities or towns of the several States designated by the Secretary, and the depositaries selected acted as mediums of distribution in furnishing funds to the localities in need of them for the purpose of transporting and marketing the crops and assisting legitimate business. In apportioning the funds among the banks in each city consideration was given to the character of business done by the applicant bank and the extent to which it was lending money to its country correspondent banks. The Secretary distributed the Government money in such a way as to enable the ultimate borrower to get it at the lowest possible rate of interest.

Federal, State and municipal bonds and prime commercial paper were prescribed as acceptable security for such deposits, and when the movement of the crops had been completed the money was returned to the Treasury in four installments-that is, on December 1, 1914, January 1, 1915, February 1 and February 15, 1915. Interest at the rate of 2 per cent per annum was paid on these deposits during the time they were held by the depositaries.