make special drafts on its Federal Reserve bank which are payable at any specified Federal Reserve bank, no limit being placed on such drafts. In either case the member bank must advise the special draft to its Federal Reserve bank, which, upon receipt of the advice, charges the amount to the account of the member bank. The member bank is thus placed in position to obtain without cost, and furnish to its customers, exchange on any of the twelve Federal Reserve cities at any time or season. These facilities are made possible by the gold settlement fund which the twelve Federal Reserve banks maintain at Washington and through which they settle daily their obligations to one another by transfers on the books of the fund instead of by actual shipments of currency or coin. The gold held in this fund amounted in June, 1919, to almost $600,000,000. CURRENCY Q. 27. What must a member bank do to obtain Federal Reserve notes from the Federal Reserve bank? A. Federal Reserve notes in denominations of $5, $10, $20, $50, $100, $500, $1,000, $5,000 and $10,000 are shipped to member banks on request, by registered mail, insured, and the member bank's account charged with the face amount, thus providing clean currency at all times. The Federal Reserve Board has authorized the Federal Reserve banks to absorb the expenses in connection with transactions between them and their member banks, as follows: (a) Payment of all postage, express charges, insurance, etc., incident to shipments of currency to and from member banks; and (b) Payment of charges on all telegrams received from or sent to member banks in connection with currency, exchange transfers, and deposit transactions. Shipments of gold, gold certificates, silver certificates, and legal-tender notes may be made to the Federal Reserve Bank of New York either by express or by registered mail for credit of the member bank's account or for exchange for Federal Reserve notes. We pay transportation charges on gold, gold certificates, and silver certificates, whether fit or unfit for circulation, and also furnish, free of expense, Federal Reserve notes in exchange. Q. 28. In what amounts are Federal Reserve notes avail able? A. The Federal Reserve bank is not limited as to the amount of notes which it may issue, except by the provision that a 40-per-cent gold reserve must be maintained against Federal Reserve notes in actual circulation. The Federal Reserve Bank of New York now has in actual circulation approximately $760,000,000 of Federal Reserve notes. It always maintains, ready for issuance, a very large supply of unissued notes, which assures member banks of an ample currency supply at all times. Q. 29. Can the Federal Reserve bank supply $1 and $2 notes? A. Yes. The Federal Reserve bank is at present issuing Federal Reserve bank notes of these denominations, which can be supplied in the same manner as other currency. Q. 31. Does the Federal Reserve bank furnish subsidiary silver coin and minor coins? A. Yes. It will furnish such coins and pay cost of shipment thereon. IX SELECTED LIST OF COLLATERAL READING 1. EXCHANGE Fisher, I., Purchasing Power of Money. 2. CREDIT Cleveland, F. A., Funds and Their Uses. Ettinger, R. P., and Golieb, D. E., Credits and Collections. Hagerty, J. E., Mercantile Credit. Phillips, C. A., Bank Credit. Taylor, W. G., The Credit System. Bankers Credit Manual. 3. CREDIT INSTRUMENTS Huffcut, E. W., Elements of Business Law. McMaster, W., Irregular and Regular Commercial Paper. 4. COMMERCIAL BANKING Barrett, A. R., Modern Banking Methods. Fiske, A. K., The Modern Bank. Commercial Banking. Langston, L. H., Practical Bank Operation. Financial Organization of Society. Phillips, C. A., Readings in Money and Banking. Loans and Discounts. Executive Control. Buildings, Equipment, and Supplies. Credit and Collections. Willis, H. P., American Banking. Wolfe, O. H., Practical Banking. 5. FOREIGN EXCHANGE Bastable, C. E., Theory of International Trade. Cross, I. B., Domestic and Foreign Exchange. Escher, F., Foreign Exchange Explained. Whitaker, A. C., Foreign Exchange. 6. INVESTMENT BANKING Chamberlain, L., Principles of Bond Investment. Dewing, A. S., Financial Policy of Corporations. Gerstenberg, C. W., Materials for Corporation Finance. Lagerquist, W. E., Investment Analysis. Lyon, H., Corporation Finance. 7. SAVINGS BANKING Hamilton, J. H., Savings and Savings Institutions. Kniffin, W. H., Savings Bank and Its Practical Work 8. TRUST COMPANIES Herrick, C., Trust Companies. Kirkbride, Sterrett, and Willis, Modern Trust Company. 9. BANKING SYSTEM Agger, E. E., Organized Banking. Bagehot, W., Lombard Street. Conant, C. A., History of Modern Banks of Issue. Hepburn, A. B., History of Currency. Hollander, J. H., War Borrowing. Kemmerer, E. W., A B C of the Federal Reserve System. Laughlin, J. L., Banking Progress. Mitchell, W. C., History of the Greenbacks. National Monetary Commission Reports. Noyes, A. D., Forty Years of American Finance. Phillipovich, E., Bank of England. Warburg, P. M., Essays in Banking Reform. The Federal Reserve System. 10. MONEY AND PRICES Anderson, B. M., Value of Money. Cassel, G., Money and Foreign Exchange After 1914. Kemmerer, E. W., High Prices, Inflation and Deflation. Keynes, M., Monetary Reform. Laughlin, J. L., Money and Prices. |