Business Continues at High Pressure Bank clearings during July and the first two weeks of August reflected no contraction in commercial and industrial activity. Total clearings for July exceeded all previous records for that month, aggregating $25,451,756,489, an increase of 32 per cent. as compared with the same month last year and of 71 per cent. as contrasted with the corresponding month in 1915. Railroad earnings also continue to show improvement, the returns for July indicating a gain in gross returns of about 14 per cent. over the previous year. Industrial activity naturally reveals the stimulus of heavy Government buying, although considerable doubt is entertained as to the influence of arbitrary Government price fixing policies in behalf of its own and Allies' purchases. Index figures of commodity prices continue to rise.

The condition of the crops reveals marked improvement in the light of more authentic returns as to the winter wheat yield and the stand of spring wheat. The August Government crop report places the winter wheat crop at 417,000,000 bushels and spring wheat at 236,019,000 bushels with a total yield 653,000,000 bushels, or 13,000,000 bushels more than harvested last year. This corn crop promises to be the largest on record with a total yield of 3,191,000,000 which is 68,000,000 above the record yield of 1912. An unexpectedly large and bountiful garden crop will bring the grand total of food production to a total that should dispel fears of food famine during the coming year. Because of the assurance of a minimum price of $2 a bushel as fixed in the Government food control bill and an aggressive program of stimulation by the Agricultural Department and State authorities it is expected that the wheat acreage next year will be increased so as to assure a crop of over one billion bushels.

Operating Efficiency of Virginian Railway Because of high standard equipment, operating efficiency and rapid development of business the Virginian Railroad occupies a distinctive place among the transportation systems of the country. It was but a few years ago that this road existed only in the fancy of the late H. H. Rogers who first conceived the idea of opening up the rich coal deposits of the New River and Pocahontas fields of West Virginia. His plan was to build a north and south line which should link together the Chesapeake & Ohio and the Norfolk and Western, tapping the richest of bituminous coal fields. Despite numerous obstacles, Mr. Rogers carried out his project, which by many of his associates had been declared as foredoomed to failure. Up to 1907 he financed the construction of the Virginian Railroad largely from his own private fortune.

The National City Company of New York has issued a most interesting booklet descriptive of the history and development of The Virginian Railroad relating to construction, operation and finance. It shows that the average annual growth of total operating revenues since 1910 has been over 26 per cent. and the average annual increase of income available for interest on funded debts over 85 per cent. In the calendar year 1916 the road earned 2.63 times the interest charges on its funded obligations and earned 8.86 per cent. on its preferred stock. The present outstanding capitalization embraces $27,955,000 preferred stock; $31,271,500 common stock; $29,500,000 first mortgage 5's due May 1, 1962 and $562,000 equipment trust 5's, series "A." Under the first mortgage additional bonds to the extent of $10,000,000 may be issued for acquisition of obligations of other properties to provide extensions, for improvements, etc.

IRVING

Strictly a Commercial Bank

RYING

"Central File," a New Adjunct for Development of Trust Company Business

At the Guaranty Trust Company of New York a system has been developed for correlating information as a basis for securing new business which is adaptable to the requirements of banks and trust companies generally. The company maintains a so-called "Central File" by which it obtains unification of the work of various departments, assembles the records of each department so that the customers of each department might be served by not only one, but by all. Every day each department reports all its new customers to the Central File on a special blank provided for that purpose. Complete data goes with each record and as soon as the new customer lists are received the names are checked against the 40,000 and more names already on file. The card shows at a glance the customer's whole relation with the company and thereby suggests other ways in which the bank may be useful to him in the future. Each card is also subject to close study by officers and department managers. A daily bulletin is issued which gives the names of all customers which, in the judgment of the Central File staff, seem to offer leads. The system is described in detail with fac-similes of forms used, in the current issue of The Guaranty News, the house organ of the Guaranty Trust Company.

Paying Interest in Form of Dividend

The successful operation of the Massachusetts plan of paying interest on savings bank deposits in the form of interest and transmitting such credits by mail is attracting general attention among bankers as a means of avoiding the rush and strenuous labor always associated with "interest periods." By means of registration of pass books, it is suggested, the plan may be extended to take in savings deposits generally instead of only mutual savings banks. The plan requires depositors to give the bank a permanent order to mail checks for dividends as they become due on pass books. The bank gives to the depositor a blank memorandum for his or her signature which sets forth that the pass book is registered as No. — and in the possession of the bank. All accounts to receive registered interest must be registered by the 15th of the month preceding the interest period. Ledger entries may be dated from the first day of interest period.

The New York Legislature, in response to the suggestion of bankers, has paved the way for facilitating payment of savings deposit interest by embodying the word "dividend" into the statute and the Banking Department has recommended the use of the word "dividend" as far as possible.

New York City

Wall Street Cautious But Confident Guided mainly by intuition as to the future course of events the important financial, banking and trading interests in Wall Street are observing an attitude of restraint and ultra-conservatism. Developments in the European arena of war and the confusing character of the legislative program at Washington render impossible any definite course of action, save that of "standing pat." The prudent banker hugs the shore line and scrutinizes every item with microscopic care, knowing that he will be called upon to withstand the heavy strain of huge war financing now placed at over $10,000,000,000 for the first fiscal year of war operations, not including additional authorization of loans to our allies which may bring the sum to the staggering total of $17,000,000,000. The financier "temporizes," because he knows that existing financial and economic conditions are wholly arbitrary and charged with the certainty of more or less violent readjustment when normal laws of supply and demand again come into play. The investor is at sea because of the prospect of heavy taxation on the one hand and uncertainty as to the effect of Government financing upon investment values and interest rates in general. The bulls and bears on the Stock Exchange find little incentive for their professional talents, gravitating between conflicting hopes and fears. There are days when the war developments in Europe dominate the local situation. Confidence in the restoration of Russia's fighting power wavers and returns. Ever and anon the

spectral figure of peace looms up. Military authorities here and in Europe express widely divergent views as to the prospect of early decisive action. Statesmen of the opposing camps avow determination to carry on the struggle to ultimate victory. Last, but not least, there is the weekly toll of U-boat sinkings with our ship-construction plans still in a nebulous stage. Then come days when the legislative outlook at Washington presses foreign developments into the background.

The one great redeeming feature of the Wall Street situation is the firm, robust feeling of confidence is the ability of this nation to safely negotiate the military as well as economic responsibilities which it has assumed in waging war upon a scale which baffles the most fertile imagination. Of most immediate concern to the banker, business man and investment interests is the proper solution of the problems of taxation, levies upon excess profits, price and food control, construction of ships and other vital questions of national welfare and war efficiency. There can be no disguising the growing sentiment of impatience with the politicians at Washton who show a disposition to ignore wise counsel and persist in playing to the galleries.

Reconsideration of Exchange Charge

The Council of Administration of the New York State Bankers' Association, at a recent meeting, adopted a resolution recommending members who are interested in the subject of equitable exchange charges for collection of checks to co-operate with the Committee of Twenty-five appointed at the last annual convention of the American Bankers' Association which led the campaign in behalf of the passage of the original Hardwick bill in Congress which was designed to serve to banks the right to make a reasonable charge not to exceed 10 cents per $100 on check remittances. The resolution reads as follows:

"Resolved, That it is the sense of the Council of Administration of the New York State Bankers' Association that the contention of the many bankers throughout the State of New York against the removal of Exchange charges is entitled to consideration, and, as the matter is a country-wide problem and has been and is being handled by a very representative committee known as "The Committee of Twentyfive" of the American Bankers' Association, we recommend that all banking institutions interested in the restoration of these Exchange charges be requested to promptly communicate with its secretary, Mr. Jerome Thralls, No. 5 Nassau street, New York City, as it is believed that the best results can be obtained by cooperating with this committee."

THE

SURPLUS AND PROFITS, $3,250,000

S. G. BAYNE, President

C. C. THOMPSON, Vice-President B. L. GILL, Vice-President

DEPOSITS, $57,000,000

O. M. JEFFERDS, Asst. Cashier
C. C. FISHER, Asst. Cashier
J. D. SMITH, Asst. Cashier

J. E. ORR, Asst. Cashier

Effect of War Financing on Money Market and Bank Resources

Although the bulk of war financing is conducted through New York banking institutions, especially absorption of short term Treasury certificates and advances to our allies, the net result of such operations during the past two months does not reveal any material change in the loan, deposit and potential reserve items. On June 9th, one week before initial payments were due for Liberty Loan subscriptions, the New York Clearing House institutions reported aggregate loans and investments of $3,790,284,000. On August 11th, notwithstanding that the New York allotment of Liberty Loans had been nearly all paid for and that Government requirements called for huge shifting of balances and withdrawal of funds, the total loans and investments stood at $3,795,989,000, a difference of barely five millions. Net deposits of Clearing House banks amounted to $3,793,985,000 on June 9th as compared with $3,804,652,000 on August 11th, an increase of only eleven millions, covering a period when the biggest piece of financing in the history of this country was negotiated.

Although there have been some radical changes in the official compilation of reserves credited to New York banks, the net balance of surplus reserves, counting the cash held in the vaults of institutions which are members of the Federal Reserve bank, shows no such actual reduction as might have been expected. The wide fluctuations in excess reserve account were largely due to the alteration of the manner of computing reserves, following the transfer of all legal reserves of member banks to the Federal Reserve bank. Despite a reduction of $96,500,000 in excess reserves for Clearing House institutions, reported for the week closing August 11th, bringing surplus reserves down to $72,000,000 as compared with the low record of $36,000,000 on July 14th, these totals do not take in account the cash held by member banks in their own vaults.

The money market has evidently settled down to comparative ease following the fluctuations attending reduction of reserves, Government withdrawal of funds and heavy domestic requirements which characterized the situation during the latter part of June and the first two weeks of July. Call money rates have ruled fairly steady at 22 per cent. with time loans on mixed collateral for 60 and 90 days averaging 41⁄2 per cent. and 60 to 90 day acceptances, eligible for rediscount, at 3 to 32 per cent. Under the influence of payments covering the latest issue of $300,000,000 Treasury certificates the call rate touched 4 per cent. on August 9th, but subsequently declined.

The following compilation gives the more important changes in the weekly statements of Clearing House banks and of trust companies: