currency, might be subjected to as little inconvenience as possible, the Federal Reserve Banks were instructed to grant, whenever they felt justified in so doing, blanket licenses for such exportations, the licensee to make report of each shipment. From September 7, 1917, to December 31, 1918, the amount of Canadian currency exported under general authority granted by Federal Reserve Banks amounted to about $15,000,000.

For some time exportations of silver to China were freely permitted in order to aid financing of importations to the United States. However, the silver situation in India becoming acute at a time when war conditions on the western front and in Mesopotamia made it imperative that a crisis in India should be avoided at all hazards, it was found necessary to restrict the private exportation of silver to the financing of importations of products which had been contracted for by departments of the Government. The extent of assistance rendered by the United States in meeting the demand for silver in India is shown as follows:

Licensed for export Sept. 7, 1917 to Dec. 31, 1917:
To India_____

To the United Kingdom__.

Total.

Jan. 1, 1918, to Dec. 31, 1918

To India__.

To the United Kingdom_.

Total.

$20,932, 565. 20

5, 403, 639. 99

26, 336, 205. 19

212, 310, 188. 15

39, 035, 375, 00

251, 345, 563. 15

The total amounts involved in licenses granted for the export of coin, bullion, and currency from September 7, 1917, to December 31, 1918, are: Gold, $128,688,515; silver, $351,316,000; currency, $105,056,568; an aggregate of $585,061,083. Details, showing countries to which these exports went, appear in the appendix.

The Board was confronted with a difficult problem in passing upon applications to export gold to Mexico, for it was evident in view of the gold premium in Mexico that our own stock of gold would be subjected to a heavy drain unless protective measures were adopted which would serve to curtail what appeared to be an insatiable demand. At the same time it was clear that if the exportation of gold to Mexico should be prohibited entirely, our nationals conducting large mining, oil, and other operations in Mexico, being forced to pay exorbitant prices for Mexican gold in order to comply with the reimportation requirements and decrees of the Mexican Government, that taxes, export duties, and import duties be paid in gold, would be forced to stop production which would prevent the importation of material and commodities necessary for the prosecution of the war.

The Board therefore adopted the policy of permitting exportations of gold to Mexico by mining companies to cover the reimportation requirements of the Mexican Government against new product of mine gold or silver exported to the United States, to the extent of 100 per cent of the value of gold and 25 per cent of the value of silver coming into the United States.

By the return of this gold to Mexico the mine operators were able to use it for the payment of taxes, export and import duties, and to some extent wages. The Board also decided, with respect to American oil interests in Mexico, that it would permit the exportation of a sufficient amount of gold to allow producers to pay their taxes and bar dues on oil exported to the United States, import duties on commodities necessary in their operations imported from the United States, and one-half of their pay rolls. Later on large amounts of gold having gone to Mexico on account of mine operators' reimportation requirements, exchange rates fell to such an extent as to enable producers to purchase in Mexico, at a moderate premium, the gold necessary for their requirements. The Board let it be known that while it preferred that the producers obtain in Mexico gold for their requirements, it stood ready to permit exportations of American gold whenever an excessive premium was demanded. With an abundance of American gold in Mexico, and with increased exports of various commodities from the United States to that country, there is no reason for United States currency to be at a discount in Mexico at a rate exceeding the cost of shipping gold, and for several months our currency has been circulating there with greater facility and in larger volume.

For some time, in order to meet the wishes of the Food Administration and other governmental agencies, licenses were granted for the exportation of gold, to enable shippers of sisal, hides, cattle, bones, ixtle, garbanzos, and other miscellaneous commodities from Mexico to the United States, to pay Mexican export duties in gold as demanded by the Mexican Government, but conditions later became so changed, that, after consultation with the governmental departments and agencies interested, applicants were notified that exports of gold would not be permitted for paying export duties on miscellaneous commodities shipped to the United States, but that the Board would give favorable consideration to applications for permission to export United States paper currency other than gold or silver certificates for use in that connection.

In the execution of its policies, the Board has been mindful of both the national and the individual interest, but at the same time it has endeavored to retain in the United States gold which otherwise would have been exported. For the period September 7, 1917,

December 31, 1917, licenses were granted permitting gold exportations to Mexico of $14,151,000, an average of $3,538,000 monthly. From January 1 to June 30, 1918, licenses permitting the exportation of $17,690,000 were granted, an average of $2,948,000 monthly; and for the period July 1 to December 1, 1918, licenses were granted aggregating $11,444,000, an average of $1,907,000 monthly, and during December the exports authorized amounted to $2,229,000.

The Board has recently allowed considerable amounts of gold to go to Colombia, from which country we import during normal times between $6,000,000 and $7,000,000 worth of gold per annum, upon an engagement by the licensees that gold in the amounts exported will be reimported within 12 months. The Board has in all meritorious cases granted licenses for the exportation of United States currency other than gold and silver certificates, and it is interesting to note the extent to which our currency is being used in Canada, Mexico, Central America, and the West Indies. Permits for shipments to these countries and dependencies of more than $86,000,000 currency have been granted. Since the signing of the armistice the demand for gold has been far less urgent and a larger use of our currency in neighboring countries is evident.

REGULATION AND CONTROL OF FOREIGN EXCHANGE.

EXECUTIVE ORDER.

Executive order prescribing rules and regulations under section 5 of the trading-with-the-enemy act and supplementing rules and regulations heretofore prescribed under title 7 of the espionage act.

Whereas, by virtue of the authority vested in me by the act approved June 15, 1917, known as the Espionage Act, I directed by Executive order, dated September 7, 1917, that the regulations, orders, limitations, and exceptions prescribed by me in relation to the export of coin, bullion, and currency should be administered by the Secretary of the Treasury, and upon his recommendation prescribed certain regulations in relation thereto; and

Whereas, by Executive order, dated October 12, 1917, made under authority of the act aforesaid and of the act approved October 6, 1917, known as the Trading-with-the-Enemy Act, I vested in the Secretary of the Treasury the executive administration of any investigation, regulation, or prohibition of any transactions in foreign exchange, export, or earmarking of gold or silver coin or bullion or currency, transfers of credit in any form (other than credits relating solely to transactions to be executed wholly within the United States) and transfers of evidences of indebtedness or of the ownership of property be tween the United States and any foreign country or between residents of one or more foreign countries by any person within the United States, and I further vested in the Secretary of the Treasury the authority and power to require any person engaged in any such transaction to furnish, under oath, complete information relative thereto, including the production of any books of account, contracts, letters, or other papers in connection therewith in the custody or control of such person, either before or after such transaction is completed; and

Whereas, by said Executive order, dated October 12, 1917, I authorized and directed the Secretary of the Treasury for the purpose of such executive administration to take such measures, adopt such administrative procedure, and use such agency or agencies as he may from time to time deem necessary and proper for that purpose; and

Whereas, the Secretary of the Treasury, with the approval of the President, by order dated November 23, 1917, adopted certain administrative procedure for the executive administration, authority and power vested in the Secretary of the Treasury by said Executive order, dated October 12, 1917, and designated the Federal Reserve Board to act as the agency of the Secretary of the Treasury, subject to the approval of the Secretary of the Treasury, to carry out such executive administration, authority and power vested in the Secretary of the Treasury as hereinbefore recited:

Now, therefore, upon the recommendation of the Secretary of the Treasury, and in order to vest all necessary authority in the Federal Reserve Board to act as the agency of the Secretary of the Treasury, in the performance of the duties hereby imposed upon it, I hereby prescribe the following orders, rules, and regulations in respect of such executive administration, authority and power, and I hereby amend the regulations heretofore prescribed by said Executive order dated September 7, 1917, as herein provided.

DEFINITIONS.

Person. The term person as used herein shall be deemed to mean an individual, partnership, association, company or other unincorporated body of individuals, or corporation or body politic.

Dealer. The term dealer as used herein shall be deemed to mean any person engaged primarily or incidentally in the business (1) of buying, selling, or dealing in foreign exchange, or (2) of buying, selling, or dealing in securities for or through foreign correspondents, or (3) any person who carries accounts or securities with or for foreign correspondents.

Dealers of Class A.-Dealers who engage in the business of buying, selling, or dealing in foreign exchange, or of buying, selling, or dealing in securities for or through foreign correspondents, and who may or may not carry accounts or securities with or for foreign correspondents shall be known as dealers of Class A.

Dealers of Class B.-Dealers who carry accounts or securities with foreign correspondents or who buy, sell or deal in securties through such correspondents but who do not carry accounts or securities for foreign correspondents and who do not engage in the business of buying, selling, or dealing in foreign exchange or of buying, selling, or dealing in securties for foreign correspondents shall be known as dealers of Class B.

Dealers of Class C.-Dealers who carry accounts or securities for foreign correspondents or who buy, sell, or deal in securities for such correspondents but who do not carry accounts or securties with foreign correspondents and who do not engage in the business of buying, selling, or dealing in foreign exchange or of buying, selling, or dealing in securities through foreign correspondents shall be known as dealers of Class C.

Foreign Exchange.--The term foreign exchange as used herein shall be deemed to mean checks, drafts, bills of exchange, cable transfers, or any form of negotiable or assignable instrument, or order used (a) to transfer credit or to order the payment of funds in any foreign country, or (b) to transfer credit or to order the payment of funds within the United States for foreign account.

Securities. The term securities as used herein shall be deemed to mean all evidences of ownership of property not included in the foregoing definition of foreign exchange.

Correspondent.-The term correspondent as used herein shall be deemed to mean any person who acts as the agent of, or for, or on behalf of, or as the depositary of, another person, or any person who is the principal for, or on behalf of, whom another person acts as agent.

Customer. The term customer as used herein shall be deemed to mean any person other than a dealer who buys foreign exchange from a dealer or sells foreign exchange to a dealer.

TRANSACTIONS IN FOREIGN EXCHANGE AND CERTAIN OTHER TRANSACTIONS PROHIBITED EXCEPT AS HEREIN AUTHORIZED.

All transactions in foreign exchange, export or earmarking of gold or silver coin or bullion or currency, transfers of credit in any form (other than credits relating solely to transactions to be executed wholly within the United States) and transfers of evidences of indebtedness or of the ownership of property between the United States and any foreign country, whether enemy, ally of enemy, or otherwise, or between residents of one or more foreign countries, by any person within the United States, except any such transactions or transfers conducted in conformity herewith, are hereby prohibited.

TRANSACTIONS IN FOREIGN EXCHANGE OR IN SECURITIES FOR OR THROUGH FOREIGN ACCOUNT.

Certain persons required to obtain registration certificates.-No person, other than a customer, shall, after February 10, 1918, engage in any transaction or make any transfer described in the next preceding subdivision hereof who shall not have obtained, on or before that date, a registration certificate, as hereinafter provided.

Every person who is a dealer upon the date hereof, as promptly as possible and in any event on or before January 31, 1918, shall file, with the Federal Reserve Board, through the Federal Reserve Bank of his district, an application for a registration certificate. Such application shall be in form approved by the Federal Reserve Board and shall show the character of business engaged in and whether or not an enemy or ally of enemy of the United States or any subject or citizen of an enemy or ally of enemy, wherever resident or domiciled, has any interest directly or indirectly in such business. Such application shall embody an agreement on the part of the applicant to comply with the regulations of the Federal Reserve Board, and to permit the inspection at any time of his books and accounts and to make reports as and when required on forms to be approved by the Federal Reserve Board.

The Federal Reserve Board may issue to such applicant the appropriate registration certificate in form approved by it, entitling the holder to engage in the class or classes of foreign exchange or other transactions specified in such certificate, subject to all applicable provisions of law and to such Executive orders of the President and administrative regulations as shall have been issued or may from time to time be issued by the Federal Reserve Board.

Any person who is not a dealer at the date hereof but who hereafter desires to become a dealer must first obtain a registration certificate.

Any person, other than a customer, who does not desire to become a dealer but who nevertheless desires to engage in one or several transactions or to

Under power of Federal Reserve Board to waive requirements, time extended to Feb. 15, 1918.

* Id., time extended to Feb. 5, 1918.