The commercial paper discounted by the federal reserve banks from November, 1914, to June, 1917, has been gradually increasing in volume, although it has represented a comparatively unimportant factor in the banking situation as a whole. The total amount of commercial paper discounted January-December, 1915, was $161,353,000. For the same period, 1916, the total was $207,870,500.

Collateral loans to member banks were first provided for in September, 1916. During the remainder of the year the advances to member banks in this form totaled $39,026,050. Of this total, $29,892,400 was advanced during the month of December alone.

Trade acceptances were discounted for the first time in September, 1915. To the close of that year $1,958,800 in this form of paper came to the reserve portfolios. The total for 1916 was only $5,113,500. Commodity paper was also discounted for the first time in September, 1915. Up to the end of that year $10,315,100 of this form of paper had been acquired through discounting operations. During 1916 the total reached $16,813,500.

The open-market purchases of commercial paper by the reserve banks have been confined to trade and bankers' acceptances. In the field of bankers' acceptances the great increase in American foreign trade and the substitution of the "dollar" for the "pound sterling" in financing this and other trade brought especially notable results. A complete analysis of the weekly development of the open-market purchases of acceptances by the reserve banks is given monthly in the Federal Reserve Bulletin. The purchases of bankers' acceptances by the reserve banks shows a steady increase. During 1915 the reserve banks bought $61,924,000 of this class of paper. During 1916 the pur-chases leaped to $369,582,700. On February 19, 1917, the reserve banks reported a holding of $123,679,000 in bankers' acceptances purchased in the open market. The acceptors of these bills were member banks, state banks, trust companies, and private banks. While the majority of the acceptances are by member banks the trust companies come second and private bankers third. On January 1, 1917, for example, out of a total of 121,154 bills, 66,803 had been accepted by member banks, 34,625 by trust companies, 18,224 by private bankers, and 1,502 by state banks.

Commercial paper redis-counted

Collateral loans

Trade acceptances

Commodity paper

Open market purchases

Purchases of trade acceptances in the open market were reported for the first time in February, 1916. The original purchases reported ran under a half-million dollars, but there has been a steady increase since that time. During 1915 the purchases totaled $2,921,000, but they increased during 1916 to $16,333,300. At the end of May, 1917, the trade acceptances held by the reserve banks amounted to more than $5,000,000.

Bankers' acceptances

Trade acceptances