1914, to the close of April, 1915. During the month of May, 1915, the usual deposit of public moneys in depositary banks located in the District of Columbia was made, the local taxes being collected and deposited in the Treasury mainly during the month of May. The amount deposited as an offset to taxes collected was $3,138,000, and was divided among the several depositary banks in proportion to the total deposits therein and secured by bonds deposited with the Treasurer of the United States. Interest at the rate of 2 per cent per annum was paid on these deposits while they were retained by the banks.

The public moneys handled by depositary banks during the month of June is much greater in amount than in other months of the year, owing to the provisions of law relating to the payment of the corporation excise tax and the income tax. On the last day of the fiscal year the collectors of internal revenue received payments of these taxes until a late hour, and as a result the collections were deposited in the depositary banks, in many instances after banking hours, and transfers thereof to Treasury offices could not be effected until the succeeding business day. At the close of the month of June, 1915, the banks held to the credit of the general fund $53,454,547.87 and to the credit of postmasters and judicial officers $6,484,611.32, making a total of $59,939,159.19.

GENERAL ACCOUNT OF THE TREASURER OF THE UNITED STATES.

The Treasurer receives and keeps the moneys of the United States and disburses the same upon warrants drawn by the Secretary of the Treasury, countersigned by the Comptroller of the Treasury, and not otherwise. He takes receipts for all moneys paid by him and gives receipts for all moneys received by him; and all receipts for moneys received by him are indorsed upon warrants signed by the Secretary of the Treasury, without which warrant, so signed, no acknowledgment for money received into the Public Treasury is valid. He renders his accounts quarterly, or oftener if required, and at all times submits to the Secretary of the Treasury and the Comptroller of the Treasury, or either of them, the inspection of the moneys in his hands.

As a matter of information, it may be said that all public moneys paid into any subtreasury office, national-bank depositary, or other depositary, are placed to the credit of the Treasurer of the United States and held subject to his draft. The public moneys in the hands of any depositary of public moneys may be transferred to the Treasury of the United States or may be transferred from one depositary to any other depositary, as the safety of the public moneys and the convenience of the public service shall require.

The public moneys in any subtreasury, mint, or other depositary are subject to special examination and count whenever it is deemed advisable by the Secretary of the Treasury. Such examinations of the moneys in the subtreasuries are frequently made by committees representing the Secretary and the Treasurer. Annual examinations of the public moneys in mints are made by committees selected by the Director of the Mint, but as these moneys are a part of the general account it is suggested that the Treasurer of the United States should have a representative on all such committees.

FEDERAL RESERVE BANKS.

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 12 Federal reserve cities on November 16, 1914. The new reserve requirements which became operative on that date released an enormous sum 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 far-reaching influence for good upon the banking system and business of the country.

Section 16 of the Federal reserve act authorized the Federal Reserve Board, in 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 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 the nearest subtreasury, for credit to the account of the gold settlement fund, $1,000,000 in gold, gold certificates, or gold order certificates, which the Treasurer transferred through the medium of the general account to Washington, 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, 1915, was $31,840,000. If the Treasury finds it necessary to ship funds from one point to another to make payment on account of the said gold settlement fund the Federal Reserve Board will refund any expenses incurred in making such shipments.

MONETARY STOCK.

There was a net increase of $251,167,315 in the monetary stock of the country during the fiscal year 1915. The growth in gold was $94,882,381, in silver $5,861,740, in national-bank notes $68,601,694, and in Federal reserve notes (a new kind of money issued during the year) $84,260,500, while the Treasury notes are no longer included in the stock, having been replaced by the silver dollars held for their redemption, which in previous years were not embraced in the stock of money.

The amount of each kind of money included in the general stock is given in the statement following (this statement represents the

monetary stock of the United States as shown by the revised statements for June 30, 1914 and 1915):

RATIO OF GOLD TO THE TOTAL STOCK OF MONEY.

The annual growth in the volume of gold as compared with the total stock of money since July 1, 1906, may be observed in the table following:

Ratio of gold to total stock of money from July 1, 1906.

[From the revised statements of the Treasury Department.]

MONEY IN CIRCULATION.

During the earlier part of the fiscal year 1915 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 the act of May 30, 1908, as amended, authorized the issue of additional circulating notes to national banks upon their application. The banks were very prompt in applying for the currency and during the months of August, September, and October more than $382,500,000 of such currency was issued, thus affording a medium that entered at once into circulation and contributed largely to the general revival of business throughout the country. When this currency had served the purpose for which it was issued it was gradually retired. The national-bank notes (including the additional circulating notes) in circulation on November 2, 1914, amounted to $1,083,519,080 but this was reduced to $785,393,047 by the close of the fiscal year. The total amount of money in circulation on June 30, 1915, was $3,569,219,574, an increase of $167,204,147 as compared with that of the preceding year.

The kinds of money in circulation, the circulation per capita, and the percentage of gold coin and certificates to the total circulation may be studied from the table following:

Money in circulation at the end of each fiscal year from 1906.

CIRCULATION AND POPULATION.

Statistics relative to the money in circulation and the population, by years, may be studied in the annexed table:

Increase in population and in circulation per capita.

CONDITION OF THE UNITED STATES PAPER CURRENCY.

The total stock of paper currency in the United States at the close of the fiscal year 1915 amounted to $2,964,110,878, of which the Government issued directly $2,060,576,785, and the banks $903,534,093. The denominations of $1, $2, and $5 are very popular, and the total amount of such denominations outstanding June 30, 1915, was $793,652,282, of which the Government issued $623,885,862, and the banks $169,766,420. National banks are precluded from issuing $1 and $2 notes, and the issue of $5 notes is limited to onethird in amount of the total circulation of such banks. The Federal reserve banks issue denominations of $5 and above to $100; therefore it can be readily observed that the burden of supplying the greater part of the smaller denominations required must be borne by the Government.

National-bank notes are not available for "reserves," and for this reason large amounts of such circulation are returned to the Treasury by the banks for redemption in order to replenish their "reserves. The expense of transportation of the unfit notes to the Treasury in such cases is borne by the bank of issue, while the return of the proceeds is at the expense of the owner of the notes. The owners of Government paper currency sent to the Treasury for redemption have to pay the transportation charges both ways, and the payment of these charges under contract rates gives rise to a burden that does not bear equally upon the banks and other business interests in the different sections of the country, as, for instance, the contract rates from Chicago, St. Louis, and Boston to Washington are 20 cents per $1,000, while such rates from Savannah, Charleston, Richmond, and other southern cities to Washington are 60 cents per $1,000. It is apparent that there is necessity for legislation that will equalize the expense of redemption between the different sections of the country. This may be accomplished through a more extended use of the registered mail. Banking institutions in all parts of the country are resorting to this method of transportation with satisfactory results,