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Annual Report

1957
Manufacturing and New England’s Progress







"3a*

To the member banks of the Federal Reserve

I take pleasure in sending you the 1957 annual report o f the Federal R eserve Bank
o f B oston.
Y o u will observe that on ce again we have follow ed our recent p ractice o f devoting
m uch o f the report to exam ining a significant phase o f New E nglan d's econ om ic life.
T his year we are sum m arizing new studies m ade in the field o f m anufacturing, now,
as fo r generations, the r e g io n ’s largest single source o f incom e. These studies reveal that
New E ngland faces a num ber o f issues w hich m ay vitally affect its m anufacturing future,
and we are venturing suggestions as to how som e o f these issues m ay be resolved.
It is our con viction that the facts reported in these pages deserve the early and close
attention not only o f New England business leaders but o f ou r com m un ity and state
governm ent officials as well.
T his report also includes the usual summ aries o f the B an k’s operations. F or the
increasing efficiency o f these operations, and fo r their continuin g endeavors to im prove
the Bank’ s usefulness to the New E ngland econ om y, I extend to our officers and staff my
own thanks and those o f ou r directors.
Our thanks go also to New England bankers and business leaders fo r the generous
co-op era tion they continue to give us.

January 15, 1958

Bank o Boston
ff







Manufacturing and New England’s Progress

I he decade following W orld W ar II brought with it conflicting forces
which have augmented and accelerated fundamental changes that have long been work­
ing within the New England economy. Both employment and income have expanded
significantly since 1947. Within the over-all employment gain, however, there have
been disturbing displacements in the relative importance of various types o f employ­
ment. These in turn have altered long-established patterns o f business cycles — both
in frequency and degree o f swings — and consequently are affecting the basic stability
o f the region’ s still-rising income.
Total employment in New England has increased by approximately 310,000
since 1947. Over the same period, however, the number o f manufacturing jobs has
declined by some 57,000. Moreover, this decline came during a decade o f rapid growth
in manufacturing output in both the region and the nation. Such an apparent contradic­
tion is explained by the fact that productivity — that is, output per worker — has been
expanding in the manufacturing industries.
The records posted by its manufacturing industries continue to be the most critical
and valuable measures o f New England’ s economic prosperity. W hile such service
industries as finance, education, insurance and the vacation travel business notably aid
New England in paying for its imported fuels, foodstuffs and industrial raw materials,
the region’ s basic income still comes from manufacturing. And it is manufacturing
which enables most o f the service industries to maintain their strength and growth
because many o f their major markets lie within New England.
Manufacturing is the principal source o f income for each o f the New England
states, and it provides 40 per cent of all the region’ s income payments as compared
with only 32 per cent for the nation. It is their broad and intensive development of
manufacturing that has enabled successive generations o f New Englanders to provide
for themselves an income level consistently and significantly above the United States
average — 13 per cent higher in 1956, fo r example. In consequence, it is New England
manufacturing which, directly and indirectly, provides the bulk of the municipal and
state revenues which support public services; and it is manufacturing which makes
possible our high standard o f living and cultural development and underwrites ad­
vances in the arts and sciences.
The forces o f inflation which have been pushing both the regional and national
economies for three years have now abated. At the beginning of 1958, rising unemploy­
ment and business slowdowns have set the stage for a reappraisal of the current strength
o f New England manufacturing. Have the changes which occurred in the region’ s
economy over the last decade strengthened or weakened its competitive strength? How
have manufacturing employment patterns changed, particularly in the 18 metropolitan
areas which account for so much o f New England’ s industrial activity? What are
the effects o f these changes in terms o f products, employment and income stability?
What measures might best be taken to turn desirable industrial possibilities into prob­
abilities? Who should take them? And how?
The follow ing pages attempt preliminary answers to these questions.




3




Postwar Manufacturing Trends
New England’s manufacturing activities are best measured by three yardsticks.
The one most frequently used compares relative rates o f growth or decline in employ­
ment. A second measure is the trends o f productivity as revealed by the values created
in manufacturing. A third gauge is the record o f cyclical stability or variability.
New England shared in the national postwar boom, but the region’ s economy,
like that o f the nation, was hit hard by the 1947-1949 recession. At that time there was
considerable excess capacity in the textile industry. In spite o f the surplus o f spindles
and the fact that consumer spending on clothing has increased only slightly over the
last decade, construction o f new textile mills has continued in the South. The hard
core o f New England’ s industrial problem is its long-term and still continuing difficulty
o f adjusting to textile employment losses.
A few statistics on employment changes make clear the basic transformation
which has taken place in New England manufacturing over the 1947-1957 period.
Excepting the textile industry, as many New England industries reduced their employ­
ment as increased it, and the gainers and losers were about equally divided between
manufacturers o f durable and nondurable goods. In the 11 New England industries
in which employment declined, 196,000 jobs were lost; 56,000 of these were in indus­
tries other than textiles. At the same time, 10 other New England industries added
139,000 new jobs. Thus, again excepting textiles, employment gains outweighed em­
ployment losses.
New England’ s largest manufacturing employment increases since 1947 have been
the 65,000 new jobs in the transportation equipment field, primarily in Connecticut’ s
aircraft industries, and the 31,000 new jobs in electronics and other electrical equip­
ment, the latter mainly in Massachusetts.
In general, however, the employment record o f New England manufacturers
during the past 10 years compares unfavorably with that of their competitors. Regional
factory jobs have declined by 3.7 per cent while those in the nation expanded by
10.3 per cent. And even if contractions in the textile industry are excluded from both
regional and national totals, New England still shows a manufacturing employment
increase o f only 6.7 per cent as against the nation’ s gain o f 13.6 per cent.
Six New England industry groups turned in performance records which exceeded
their national competition. O f those six, transportation equipment, furniture, apparel
and the miscellaneous group actually expanded employment. Two others, shoes and
leather and lumber, curtailed employment less than did their United States counter­
parts.
It is axiomatic that growth rates in highly developed industrial areas seldom
match those o f less intensively developed regions. But it is sobering to reflect that New
England manufacturers in nine different industrial categories reduced employment
during this 10-year period while their competitors in the country as a whole were
scoring gains. Altogether, these nine industries account for 52.6 per cent o f the region’ s
manufacturing employment.

a

T h e y a r d s t ic k o f e m p lo y m e n t
changes provides evidence that manufac­
turing in New England is already under
severe pressure from competitors in other
regions — pressure which may be ex­
pected to increase in the future.

TA BLE I
T r e n d s in M a n u f a c t u r i n g E m p l o y m e n t
United States and New England — 1 94 7 to 1957
( i n th o u s a n d s )
United States
%
change
from
1957
1947

Industry
A ll M anufacturing..........
Durable Goods...................

16,867.0

O rdnance..................... . . .

Productivity
Productivity — the measure o f effi­
ciency in turning out manufactured
goods — is another gauge o f industrial
strength. Direct measures o f productivity
for New England manufacturing do not
exist. But indirect evidence may be drawn
from statistics on “ value added by manu­
facture,” which is a measure o f net
product values (after deducting cost of
materials) created during the manufac­
turing process.
Almost without exception, New Eng­
land’ s major industry groups have a
lower net value o f product per man-hour
than the United States average.

9,879.0
128.0

Lumber & W ood Prod.

689.0

Furniture & Fixtures.
Stone, Clay & (Hass.

373.0

Fabricated M eta ls..........
M a chinery.........................
Electrical Machinery.

+ 10.3 1,470.9
745.9
+ 24.9
+ 38 1.2
13.7
- 19.4
39.8
9.7
20.9
+

550.0
1,323.0

Primary M etals...............

.

Transportation Equip.

+

1,126.0
1,722.0

+
+

1,229.0
1,916.0

New England
%
change
from
1957
1947

+

8.9
7.5
15.3
12.6

23.4
55.4
100.9

-

3.7

+
-

9.5
8.7

-

17.6

+

18.1

+
-

8.3
14.1

-

9.7
6.5

+ 33.9
+ 50.3
+ 28.3

186.0
138.7

+ 28.4

119.5

+118.5

47.6

Instrum ents......................

340.0

+

17.0

Nondurable Goods............

6,988.0

+

1.0

725.0

-

14.3

Food P roducts.................
T o b a c co ..............................

1,516.0
91.0

67.5

-

5.5

T extiles...............................

1,008.0

1.7
+
- 22.9
- 24.5

0.7
149.4

-

53.3
48.4

A p parel...............................

1,202.0
575.0

6.2
+
+ 23.7

86.5

Paper & P rod ucts...........

75.0

+
+

11.5
4.5

Printing, Publishing.

859.0
836.0

+ 20.8
+ 20.5

63.1
33.4

+ 14.5
+ 17.6

7.9
1.9

3.1

Chemicals & Products.
Petroleum & C oa l...........

258.0

Rubber P roducts.............
Leather & Products........

265.0
378.0

+
+
-

M iscellaneous...................

483.0

+

7.6
3.7

43.0
109.4
93.9

-

22.5
9.1

-

3.0

+

7.4

Source: Com puted from Bureau o f Labor Statistics data.

In the nondurable goods category, the five industries with the largest employment
in New England — textiles, leather and leather products, miscellaneous, apparel and
paper — * are the five with the lowest net product per man-hour. In the over-all non­
durable goods producing group, net product per man-hour averages 24 per cent less
in New England than in the United States.
New England manufacturers o f durable goods do considerably better than do
nondurables producers, but they still fall 10 per cent short o f matching the national
average.
For the 1947-1954 period New England manufacturers as a whole also showed
a 10 per cent slower rate o f improvement in net product per man-hour than did the
nation.
New England cannot and need not entirely eliminate these differentials in net
product values. They result in part from the higher costs o f transporting raw materials
into and shipping manufactured goods out o f the region, and also from the higher
fuel and power costs which New England manufacturers must bear — the latter again
partially traceable to the expense o f bringing fuels into an area without native oil and
coal deposits. These costs, which are not included in net product value, must be borne




5




TA B L E II
E m p l o y m e n t V a r ia b il it y
M a j o r I n d u s t r ie s

of

United States and New England — 1947-1956
Average Annual
Percent Change*
United
States

New
England

Manufacturing Employment
Total ..................................

5.2

6.6

Durables

8.1

8.2

..............................

4.0

6.0

Ordnance ....................................
Lumber & Wood Products . .
Furniture & Fixtures ............
Stone, Clay & Glass ..............
Primary Metals .......................
Fabricated Metals ..................
Machinery ..................................
Electrical Machinery ...........
Transportation Equipment ..
Instruments ..............................

50.1
9.8
9.2
6.4
8.1
8.8
8.6
10.9
12.6
8.4

16.3
11.7
7.7
9.1
9.7
8.9
10.8
11.4
13.3
9.9

....................................

Nondurables

Durables

Industrial Stability
A third measure o f New England’s
manufacturing performance is the cycli­

Nondurables
Food Products .........................
Tobacco .......................................
Textiles .......................................
Apparel .......................................
Paper & Products ..................
Printing, Publishing ..............
Chemicals & Products .........
Petroleum & Coal ..................
Rubber Products .....................
Leather & P ro d u c ts ................
Miscellaneous
.........................

by New England producers. Therefore
their other costs o f production must be
held below those of their competitors
elsewhere if they are to compete pricewise. This is one o f the pressures that
keep New England wage levels below the
national average in most industries.
Although New England will never
be able to concentrate its employment
in those industries in which net product
per man-hour is highest, it must work
unceasingly to increase productivity as
rapidly as it is increased elsewhere.

3.1
5.8
8.0
5.3
4.8
0.9
4.6
3.3
10.2
6.9
9.6

3.8
—i
13.9
5.6
5.1
2.1
4.5
—
11.0
7.8
8.3

cal stability or instability o f its industries
as compared with their national counter­
parts. During the period 1919-1939,
New England manufacturing employ­
ment tended to be more stable than that
o f the United States. After allowance for

* Cumulative year-to-year per cent changes in indices
averaged for the ten-year period 1947-1956. Indices
adjusted to eliminate long-run trends and seasonal
influences.

differences in long-term trends, it was
found that a 10 per cent change either
up or down in the nation’ s factory em­
ployment was usually accompanied by a

corresponding change o f 8.4 per cent fo r New England. This greater stability was
attributed to the predominance in the region o f such nondurable goods manufacturing
as textiles, both cotton and wool, and shoes and leather.
Since 1939, however, New England has steadily increased its durable goods
manufacturing, with an apparent reduction in the stability o f its factory employment.
In the 1947-1949 recession, after adjustment fo r seasonal and long-term trends, total
manufacturing employment in the nation showed a drop o f about 13 per cent, while
the drop in New England was 14.5 per cent. The 26 per cent decline in New England’ s
durable goods employment was about one-quarter greater than the corresponding
United States slump. New England’ s nondurable goods decline o f 8.7 per cent was
one-sixth greater than that o f the nation.

6

Business Cycles in New England
In the 1953-1954 recession, employment in New England industries fluctuated
about the same as that of their national counterparts, except for textiles, which dropped
nearly twice as much in the region as in the nation. The inability of the textile con­
traction seriously to affect the region’ s over-all performance, however, reflects the
diminishing importance of that industry in New England manufacturing and suggests
that the economy may now have a greater strength and resilience than during the
earlier postwar period.
In considering the greater degree o f stability shown by New England in 19531954 as against the record for 1947-1949, it must be remembered that the later reces­
sion was amplified by the post-Korean reduction in defense expenditures. Since New
England was then concentrating heavily on aircraft parts and electronics production,
fields in which cutbacks were less than in other military goods, it suffered somewhat
less in the 1953-1954 recession than did the nation as a whole.
As it devotes an increasing share o f its manufacturing effort to durable goods
production, New England is, o f course, moving into an area in which employment is
traditionally less stable. In the relatively limited recessions since W orld W ar II, the
nation’ s durable goods makers have reduced employment about two and one-half times
as much as have nondurable goods producers.
It is also true that the two industries which recently have grown most rapidly in
New England, electrical machinery and transportation equipment, are those in which
employment has fluctuated most widely.
The heart o f New England’s economic activity is her 18 largest cities and their
suburban communities. These metropolitan areas contain two-thirds o f the region’ s
population, about three-fourths o f the employment and manufacturing activity, and
even larger proportions of financial and commercial activity.
No other multistate region o f the country has a comparable concentration of
economic activities in its cities. With only two per cent o f the nation’ s land area and
six per cent o f the population, New England has eight per cent o f the country’ s urban
population. Obviously the economic prosperity o f the region as a whole has its wellsprings in the vigor and progress o f these 18 cities.
Table III, on page 8, compares the degree and duration o f business contractions
in 1947-1949 and 1953-1954 fo r New England’ s largest cities. After adjustment for
long-term trends and seasonal influences, it is apparent that the experiences o f these
metropolitan areas differ considerably. During the 1947-1949 recession, for example,
Lawrence, Massachusetts, experienced a 47 per cent decline in manufacturing employ­
ment within a period o f 13 months. Boston, by way of contrast, had a 14 per cent
contraction stretched over a period of 35 months.
Two aspects o f the recession experiences o f New England’ s largest cities deserve
special attention. First, during each of the recent recessions the community hardest
hit was one showing a heavy concentration in textiles. In 1947-1949, it was Lawrence.
In 1953-1954, it was New Bedford, Massachusetts. Even after trend adjustment, the




7




New England textile contraction in 1954 was 19 per cent, as against a national con­
traction in textiles o f 10 per cent. Second, in each recession period three of the five
metropolitan areas hardest hit were in Connecticut and were heavily dependent on
hard-goods industries. Furthermore, the employment declines posted in the hard-goods
cities tended to be longer lasting than in cities with concentrations o f nondurables.
It would be unwise to place long-run significance on the stability fluctuations
registered only during these two recessions. The basic causes of the recessions were
different and the effects o f the recessions differed according to the kinds of industries
which predominated in the various cities. In spite o f these differences, however, it
should be pointed out that those five cities with the sharpest job declines in the 19471949 period were also in the top six in declines during 1953-1954.

Diversification as a Stabilizing Factor
Because the high and low points o f different industrial groups occur at different
times, employment will be more stable in communities with diversified industries than
in those dependent on only one or a few industries. Table IV shows the timing of recent
New England manufacturing employment cycles for each o f the principal industrial
groups. While durable and nondurable goods, as groups, usually show only a few
months’ difference between their employment peaks and valleys, the table shows there
are wide differences among the peaks and valleys of individual industries. For example,
the employment low point
T A B L E III
came as early as Febru­
B u s in e s s C y c l e C o n t r a c t i o n s in
ary of 1954 in the textile
N e w E n c l a n d ’ s L a r c e s t C i t ie s
industry, and as late as
1947-1949
1953-1954
July o f 1955 in transpor­
City
Decline’1
'
Duration
Decline*
Duration
tation equipment.
(% )
(mos.)
(% )
(mos.)
Since no two cycles
21
12.24
35
13.83
Boston ................................
13
9.28
31
15.53
Brockton ...........................
are alike, the relative de­
22
18.87
13.14
19
Fall River .........................
gree and timing o f the
13
21.30
47.24
13
Lawrence .........................
18
16.08
28
25.80
Lowell ................................
decline and recovery of
14
26.32
26.12
13
New Bedford ..................
35
16.27
individual industries will
22
12.35
Pittsfield, Mass.................
18
13.47
30
20.96
Springfield-Holyoke . ..
be different. The 194721
15.55
31
22.03
Worcester .........................
19
19.03
35
39.83
Bridgeport .......................
1949 decline in employ­
17
10.91
25.25
33
Hartford ...........................
ment would have been ap­
17
22.08
32.14
26
New Britain-Bristol . . . .
15.36
2b
28
16.45
New H a v e n .......................
proximately 50 per cent
20.14
13
30
21.51
Stam ford-Norw alk.........
12
18.97
28
30.72
Waterbury .......................
greater in both New Eng­
15.69
12
11
14.15
Providence .......................
land and the rest o f the
9.07
14
15
18.20
Manchester, N. H ...........
nation if all industries
* Amplitude of decline is measured as per cent drop from peak to trough
in employment indices after adjustment to eliminate long-run trends and
had simultaneously ex­
seasonal influences.
perienced their high and

T A B L E IV
T i m in g

of

N e w E n g l a n d M a n u f a c t u r in g E m p l o y m e n t C ycles
1947-1956

A d ju sted for T rends and Seasonal V ariations
19 47 -48
peak
N ew England
m ent T otal

M an ufactu ring E m p loy­
.....................................................

S tandard
20
22
23
26
27
28
30
31
39
19
24
25
32
33
34
35
36
37
38

1950-51
peak

1951-52
trough

1953
peak

1954
trough

1955-56
peak

3 /4 7

7 /4 9

4 /5 1

1 1 /5 1

5 /5 3

1 /5 5

6 /5 6

...........................................

1 /4 8

5 /4 9

4 /5 1

3 /5 2

5 /5 3

9 /5 4

5 /5 6

...................................................

2 /4 7

8 /4 9

*

7 /5 3

1 /5 5

8 /4 7
5 /4 8
1 2 /4 7
1 /4 7
3 /4 8
1 /4 7
3 /4 7
1 1 /4 7
1 /4 8
8 /4 8
3 /4 7
1 /4 8
2 /4 7
4 /4 7
3 /4 7
4 /4 7
2 /4 7
2 /4 7
2 /4 8

3 /5 0
4 /4 9
1 /4 9
7 /4 9
1 1 /4 9
8 /4 9
2 /5 0
1 1 /4 9
7 /4 9
2 /5 0
7 /4 9
1 2 /4 8
7 /4 9
7 /4 9
6 /4 9
1 2 /4 9
8 /4 9
1 2 /4 9
1 2 /4 9

*
6 /5 2
4 /5 2
7 /5 2
1 1 /5 2
*

5 /5 4
7 /5 3
6 /5 3
7 /5 3
1 1 /5 3
*

1 /5 2
9 /5 1
1 0 /5 1
*
*

6 /5 3
5 /5 3
8 /5 3
8 /5 3
*

6 /5 5
2 /5 4
6 /5 4
3 /5 5
1 /5 5
2 /5 4
8 /5 4
9 /5 4
1 2 /5 6
*

5 /5 2
9 /5 2
5 /5 2
5 /5 2
*
*
*
*

1 0 /5 2
7 /5 3
8 /5 3
8 /5 3
*

N ondurables
D urables

1949-50
trough

Industrial

*

Classification

Food Products ......................................
Textiles .....................................................
A p parel .....................................................
Paper & Products ..............................
P rinting, Publishing .........................
C hem icals & Products .....................
R u b b er P r o d u c t s .................................
Leather & P r o d u c t s ............................
M iscellaneous .........................................
O rdnance ................................................
Lum ber & W o o d Products ..........
Furniture & Fixtures .......................
Stone, C lay & G lass .........................
Prim ary M etals ....................................
Fabricated M e t a l s ...............................
M achinery
..............................................
Electrical M achinery .......................
Transportation Equipm ent ..........
Instrum ents ...........................................

*
4 /5 1
2 /5 1
3 /5 1
1 2 /5 1
7 /5 1
5 /5 1
9 /5 0
3 /5 1
*
3 /5 1
9 /5 0
5 /5 1
8 /5 1
8 /5 1
7 /5 1
*
*
*

4 /5 3
6 /5 3
6 /5 3

1 2 /5 4
1 2 /5 4
1 1 /5 4
1 /5 5
7 /5 4
1 2 /5 4
4 /5 5
7 /5 5
1 0 /5 4

#
5 /5 6
1 2 /5 5
8 /5 6
6 /5 6
1 2 /5 5
4 /5 6
1 1 /5 5
•
1 2 /5 6
9 /5 6
9 /5 6
*
4 /5 6
8 /5 6
1 0 /5 6
5 /5 6
*
1 /5 6

* N o discernible peak or trough.

low points. Obviously the individual community will fortify itself against future reces­
sions insofar as it spreads its employment into several kinds o f manufacturing activities
and with different firms within single industry groups.
The chart on page 10 shows that in 1947 there were seven New England cities
dependent on either the textile or shoe industries for more than one-third of their total
factory employment. Nine years later that dependence had dropped to less than onethird in only three of the seven cities — Lawrence and New Bedford in Massachusetts
and Providence, Rhode Island. In all three the better balance had come through the
loss o f textile plants.
For New England as a whole, diversification lowered dependence on the three
top industries from 39 per cent in 1947 to 33 per cent in 1956. O f the region’ s major
cities, only Boston and Springfield-Holyoke in Massachusetts, and New Haven and
Stamford-Norwalk in Connecticut, came close to matching this 1956 average o f diver­
sification. The predominantly soft-goods areas ranged from a low o f 53 per cent
dependence on three industries in Lawrence to a high o f 85 per cent dependence in
Fall River, Massachusetts. The Springfield-Holyoke area, with a 35 per cent threeindustry concentration, held low position among the hard-goods cities, and the New
Britain-Bristol, Connecticut, area was in top place with dependence o f 81 per cent.
O f the hard-goods cities, the Waterbury, Connecticut, metropolitan area regis-




9




EM P LO YM EN T CONCENTRATION IN N EW ENGLAND CITIES
E m p l o y m e n t in th e T h r e e M o s t Im p o r ta n t In d u s t rie s a s a P e r c e n t
of T o t a l M a n u f a c t u rin g E m p lo y m e n t , 1 9 4 7 a n d 1 9 5 6
Percent

10

20

40

30

50

80

70

60

United States

New England

Fall River

____ _____ ____ ' -

....13

m

m -. M
m

22

Lawrence

30

is :

Lowell

31

H

2|H

23

I
^

—

Providence

_

Portland

... ^

is
L-.. -.... -....

....

Manchester

............. i

31

1

i

a

i

vm zm j

...

■V TT^H
■ m

Brockton

Waterbury

hoH

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Boston

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INDUSTRY CODE
Ordnance
Food and Products
Textiles
Apparel

27
30
31
32
33
34
35
37
38
39

Transportation Equipment
Instruments
Miscellaneous

90

tered the most significant improvement in diversification. On the other hand, Hart­
ford, Connecticut, still further concentrated its manufacturing employment in the
fields o f transportation equipment, machinery and fabricated metals.
Available statistics do not provide a clear-cut finding that those cities which were
well diversified industrially in 1947 showed greater-than-average employment stability
over the decade which followed. Yet there are some grounds for believing this could
be demonstrated if it were possible to isolate and measure all the ramifications of the
textile contraction.
A recently made city-by-city study supports this general view. A correlation of
1947 industry concentrations with employment declines in two subsequent recessions
indicates that communities with narrow industrial bases experienced greater-thanaverage employment fluctuations. The study also indicates that cities with improved
stability records may attribute part o f their gain to increased diversification.

Yesterday and Tom orrow
It is clear that many o f the sobering situations and trends described in the pre­
ceding pages have grown out o f the rigors attending the long, slow decline of New
England’ s once vast textile industry. The causes o f the decline are numerous and com­
plex, have been endlessly studied and debated, and need not be reviewed here. It is
sufficient to note that since 1919 New England has lost some 300,000 textile jobs.
Because this has been an economic misfortune practically without parallel in
the country’ s history, there has been no sizable body o f experience upon which the
region could draw for help in its struggle fo r industrial readjustment. In consequence,
New Englanders have carried on unprecedented programs of economic research and
have devised new and sometimes unique instruments for industrial development.
Some measure o f the success New England has achieved in meeting this challenge
has been recorded in earlier annual reports o f this Bank. They have pointed out that
since 1920 New England has not only increased its population by more than 2,000,000
but has also expanded its per capita income by 89 per cent, even after price level
adjustment. And at the peak in 1957, there were more New Englanders at work —
earning more, spending more and saving more — than ever before.
As earlier pages have indicated, serious problems still persist in the field of
manufacturing. But it is also true that the changed and still changing structure of
New England industry virtually rules out another disaster o f the magnitude o f that
o f the past. And obviously there is a fundamental strength and resiliency in any people
who can successfully weather the extinction o f 300,000 jobs in a single industry.
However perplexing the problems o f today may seem, they do not match those
o f the recent past. Moreover, today’ s problems are better defined and more widely
understood than were those o f yesterday, and there is a large and ever-growing body
o f New Englanders able and willing to lend a hand in solving them.




1
1




Reinforcements for Manufacturing

■ he nature, size and strength o f tomorrow’ s industrial New England
will be determined largely by the decisions and actions o f three different groups work­
ing toward three different objectives. No one of these forces is concerned with the
manufacturing progress o f the region as a whole. Yet insofar as all three groups think
clearly, decide wisely and act courageously, so far will industrial New England suc­
ceed in meeting the steadily rising competition o f other manufacturing areas.
The largest o f these groups is composed o f the directors and managers of the
thousands o f manufacturing establishments now operating in New England. Their
objective is to elicit the best possible performances from their individual firms.
The second group is made up o f the leaders of hundreds o f New England com­
munities. One of their principal responsibilities is to discern and evaluate the con­
tributions o f manufacturing to local welfare and progress and to marshal community
opinion and resources in ways which will facilitate sound manufacturing growth.
The third group consists o f the legislators and administrators o f the New England
state governments. In the economic field, their aim is the enactment and administration
o f state laws and regulations which will stimulate, or at least not hamper, the industries
which provide the basic payrolls fo r their people.
The fortunes of these three groups are inseparably interwoven. The prosperity
o f the manufacturer is directly influenced by the treatment accorded him by his com­
munity and state. The progress o f most New England communities is linked to the
profitable operation of their industrial plants through employment, wages and taxes,
and to the state government through the business climate which it creates. The welfare
o f the state is the sum of the welfare o f its communities, and the ever-broadening
services provided by the state government depend, directly and indirectly, upon reve­
nues derived mainly from manufacturing enterprises and the service industries which
they support.
The obvious interdependence o f these groups, and their pre-eminent influence over
the future o f New England manufacturing, places a high premium on their mutual
understanding, respect and willingness to work together. Some o f their individual
needs and opportunities, their relationships with each other, and some suggestions as to
how their present positions may be improved are sketched out below.

Improving Today’s Industrial Performance
The most important single factor in building New England’ s industrial future
is improving the over-all performance o f present-day manufacturers. Their continued
profitable operation, their flexibility in adjusting to new needs and opportunities, their
development and exploitation o f new products and production methods provide the
broad, firm foundation for tomorrow’ s entire economic structure.
This viewpoint has been succinctly expressed by the Committee of New England
in its massive report on The Economic State o f New England. The Committee’ s con­
clusions seem even more pertinent and valid today than when first propounded.




1
3




“ The attitudes o f management constitute one o f the
most important keys to New England’ s future. . . . The
principal focus o f their attention must be on making
their own businesses run better by adapting policies,
techniques and operations to changing conditions and by
developing and keeping a forward-looking attitude. . . .
‘ Research-mindedness’ in the broadest sense on the part
o f management is vital if New England is to maintain
and to improve its industrial position. . . . Any New
England management that is uncertain whether it is
doing the best job possible, or that has not given itself a
thorough objective examination in recent years, would
do well to adopt a research viewpoint and have its opera­
tion appraised to determine whether it is abreast o f its
competition.”
One o f the methods now increasingly employed to
revitalize older industries is product diversification. This
technique has proved particularly helpful to firms facing
fluctuating or declining markets because broadening the
product base stabilizes operations by reducing the impact
o f seasonal variations or a depression in a single branch of
manufacture. And firms in fields where the profit margin
is low are frequently able to improve their financial positions by expanding operations
into production areas where the margin is higher.
In appraising the opportunities in product diversification, the New England manu­
facturer must consider such matters as his firm’ s management competence, present
and potential demand, present and probable competition, the availability and com­
petitive costs o f raw and semifinished materials, skilled labor, power, transportation
facilities and taxes.
Experience and analysis have shown that the best opportunities for diversifica­
tion by New England manufacturers are likely to be found in products which satisfy
one or more o f the following requirements: (1 ) need for skilled labor, (2 ) high value
added, (3 ) unique product, (4 ) need fo r management ingenuity and patience, (5 )
small bulk and high value, (6 ) a raw material base in New England, in eastern Canada
or overseas, (7 ) orientation to a local market, (8 ) easily available facilities for basic
or engineering research. There are doubtless other requirements which might be offered,
but this list suggests how the research for industrial opportunities in new products or
in product diversification might be conducted in New England.
W orld trade is another area in which New England manufacturers may logi­
cally seek to improve their sources o f materials and develop new markets. Some of
the world’ s most rapidly growing markets are presently found in previously under­
developed foreign countries which are now showing marked economic and social

1
4

progress. The newly formed W orld Trade Center in New England, with headquarters
in Boston, provides a channel through which manufacturers may establish contacts
in their efforts to expand their foreign sales or purchases. Such foreign trade objec­
tives would capitalize on New England’s seaboard location and its ability to manu­
facture complex products of high quality and value which should find ready markets
in foreign countries. The New England manufacturer who investigates the opportunities
in foreign trade may well be insuring his future prosperity.
These days it is not sufficient for New England manufacturers simply to operate
their enterprises with vision and a high degree o f management competence. By putting
their leadership talents at the service o f community and state, they will demonstrate
industry’ s increasing consciousness o f its social responsibilities, contribute valuable
executive experience, and help win for business appropriate recognition o f its para­
mount importance to the progress and prosperity o f the New England people.

The Community Takes the Initiative
Many decisions which will affect the further growth of New England manufactur­
ing are made at the community level, sometimes as a by-product o f other action appar­
ently unrelated to manufacturing growth. For example, a community which constructs
water and sewerage facilities too limited in capacity to serve large-scale manufacturing
requirements, automatically sets up a growth barrier which must later be removed if
the community is to expand its manufacturing activities.
Wishful thinking has never stimulated a community’ s economic growth. The
most successful records o f industrial expansion have been posted by those cities and
towns which have created and supported a continuing organization that has economic
development as its principal objective. Whether it be a municipal commission, an
adjunct o f the community’ s planning body or a privately supported agency, an eco­
nomic development group has long since proved itself indispensable. Such a group
enables a community to get its diverse and sometimes conflicting problems o f economic
growth into sharp focus, to weigh one problem against another, to organize construc­
tive programs and to enlist those best qualified to help expedite their execution.
The ingredients o f a community development program usually include studying
the community’ s past business performance and
analyzing trends, inventorying physical and
human resources, working for the establishment
and enforcement o f effective zoning and building
laws, and seeking out and selling industrial
prospects. Sometimes the development group
assists in bringing about new plant construction
and in creating industrial parks. A frequent
by-product of such a program is a lift in
community morale and an improvement o f the
local economic climate.




1
5




Diversification as a Community Stabiliser
As has been indicated, many New England communities are open to industrial
adversity because o f too great a reliance on a single kind o f industry or on too limited
a number o f manufacturing establishments. One solution o f this problem is to increase
industrial diversification and thus help stabilize factory employment.
As far back as 1951, the seven-man Committee on the New England Economy
recommended to the President’ s Council o f Economic Advisers: “ In communities where
one-third or more of industrial employment is dependent upon the shoe or textile
industry, local groups should take steps immediately to broaden their industrial bases
by encouragement o f diversification among other equally suitable products.”
Diversification has a twofold meaning— first, it implies variety in the kinds of
industrial activity which provide a community’ s livelihood; and second, it implies
having several firms within each industrial category. Diversification usually results
in having industries which sell to differing groups o f customers or meet differing
needs, thus increasing the probabilities that local industries will not simultaneously
experience either their boom or slack periods.
In seeking to diversify their industrial structures, communities need to weigh
carefully the potentials of the various kinds o f manufacturing activity. The industries
now growing most rapidly in New England show a greater susceptibility to cyclical
fluctuation but are also those which usually provide higher average annual earnings.
Industries with good growth prospects are also characterized by a higher level o f invest­
ment and of productivity techniques.

Community Transportation Problems
New England manufacturers are critically dependent upon the efficiency and low
cost o f the transportation services available to them. They are concerned not only with
the speed and cost o f the inward movement o f raw materials and the outward move­
ment o f finished products, but also with the safe and expeditious movement o f their
workers to and from the plant. Actions taken by communities and states with respect
to changes in the patterns and costs o f transportation services can significantly influence
the attitudes o f present manufacturing industries and the decisions o f firms seeking
new locations.
An outstanding characteristic o f past community action on transportation matters
should be noted. Most transportation agencies have been and must continue to be
regulated. But thus far, the various methods o f transportation have been regulated
individually with little or no regard to their changing competitive relationships and
the changing needs o f the community itself.
In its recent report, the New England Governors’ Committee on Public Transpor­
tation emphasized: “ Competition in transportation has reached the stage at which any
large expenditure o f public funds to improve and to expand a particular form of

1
6

transport almost inevitably works to the disadvantage o f one or more competing trans­
port forms. . . . Any public expenditure to assist a particular form o f transport should
be undertaken only with the clearest possible appraisal o f the function which that
transport can be expected to perform, having particular regard for its relation to and
reliance upon other forms o f transport. Public policy must take all competing forms
of transport into account. Emphasis upon a particular form in disregard o f such inter­
relationships may produce unintended and undesirable results.”
Many New England communities are considering extensive expenditures for new
or rehabilitated highways as part o f the evolving national highway program. At the
same time, they face difficult problems in connection with maintaining any form of
mass transportation in their communities. In weighing new transportation proposals
and expenditures, communities need to consider the probable impact o f their decisions

on the location and growth o f manufacturing activity. And such consideration certainly
should take account o f the views o f industry by inviting its active participation in
transit matters.

Progress and Assessment Practices
A community’ s property assessment practices, and their relation to the public
services provided, usually indicate its attitude toward manufacturing and manufactur­
ing growth. Unfortunately, the record shows that in their efforts to cope with constantly
rising budgets, some communities seem to regard their manufacturing firms primarily
as opportunities for exploitation. Such practices are public confessions o f failure to
understand manufacturing’ s contributions to community welfare and progress, and can




1
7




seriously hamper community growth.
Most manufacturers neither expect nor
request special privilege. But they may
logically demand fairness in assess­
ment practice.

Intra-Urban Planning
In addition to specialized work
in economic development, there are
other fields o f community and state
action which may have profound
effects on industrial life. One o f these
is planning to meet the problems
created by metropolitan growth.
A recent study of these problems
pointed out: “ Population growth will go right on; the drift from the soil to the city
will go right on; the economic advantage o f industrialism will not abate; there will
be more not fewer automobiles, trucks and planes . . . thus, the great, sprawling
regions, the metropolitan complexes will go right on growing and all the problems
will be bigger, and worse and more demanding, all except one, and this is recognition
. . . recognition that there is a problem, that the problem is serious and growing
and that something effective must be done about it and fast.”
This statement is applicable not only to New England’ s larger urban areas but
to smaller ones as well. The creation o f new mechanisms for metropolitan area plan­
ning and operation is one o f our most critical social and political needs. During the
last few years, Connecticut has pioneered in this field by passing legislation which
authorizes and encourages cities and towns in the larger metropolitan areas to form
metropolitan planning authorities. The Hartford, New Haven, Waterbury and Bridge­
port areas have already made tentative plans to take advantage of the new legislation.
The hope is that the new planning agencies will enable the cities and towns to w ork
T
co-operatively in developing plans for roads, zoning regulations and other matters.
It is clearly the responsibility o f state legislatures to create these agencies for
studying, defining and solving the socio-economic problems that spill over political
boundaries and embrace numerous heterogeneous and sovereign cities and towns. Fail­
ure to do so will tend to stultify the orderly expansion o f industry.

Urban Renewal as an Industrial Stimulant
New England’ s cities were built in an era when the horse provided the princi­
pal means o f transportation and when the falling waters o f rivers and streams were
industry’s prime sources of power. As a result, the region has a legacy o f congested

1
8

cities hemmed in by rivers, and with narrow streets, obsolete factories and factory
housing.
Urban problems affect the daily lives of almost all New Englanders and nearly
60 per cent o f them live in densely populated urbanized areas. These communities
must be renovated to meet the needs created by higher incomes, increasing leisure,
mass use o f the automobile and the diffusion o f industry throughout various sections
o f each metropolitan area.
During the last seven years the federal government has sponsored an urban
renewal program for cities throughout the nation. This program involves land assembly
by condemnation, destruction o f all inadequate or decrepit buildings and the resale
o f redeveloped sites to private builders or public housing authorities. Two-thirds of
the net cost o f these projects is paid for by the federal government.
This federal program is ideally suited to the needs o f older industrial commu­
nities. For this reason, it seems fair to assume that New England’ s cities, which contain
about eight per cent o f the nation’ s urbanized population, should receive a substantially
higher proportion o f federal funds. Of the $1 billion which the federal government
has spent, committed or reserved for urban renewal work throughout the nation up
to January 1, 1958, $124 million or 12.4 per cent had been used or earmarked for
projects in New England. Based on this crude measure, the region’ s municipal leaders
would seem to have been alert to their opportunities. However, the record is not con­
sistent for all six New England states.
Connecticut, with only 1.8 per cent o f the nation’ s urbanized population, has
obtained almost six per cent of the federal funds. On the other hand, Massachusetts
has received a smaller percentage o f federal funds than its proportion of urbanized
population would warrant. In addition, numerous old mill cities throughout the region
which have extremely serious problems have so far given but little thought to develop­
ing renewal programs. Clearly there is opportunity here for imaginative and per­
suasive leadership.
As these communities are redeveloped — their physical appearance and facilities
improved and their “ atmospheres” cleared — they become increasingly attractive sites
for new industries.

Industrial Development as a State Responsibility
The manufacturing changes constantly taking place in the New England states
are sometimes provoked and frequently conditioned by the policies and activities o f
the state government. State regulations regarding employment, compensation, trans­
portation, taxation and numerous other matters directly affect manufacturing opera­
tions either beneficially or adversely. In their total effect they create the state’ s business
climate, a psychological intangible, to be sure, but one important to the state’s reputa­
tion, particularly as it relates to efforts to secure new industries and branch plants.




1
9




A state department of commerce or development commission is another important
element in furthering manufacturing expansion. Such an agency includes in its work,
on a state-wide basis, tasks similar to those described above in the discussion o f com­
munity development groups. Many of its operations are carried on with the close
co-operation o f community counterparts throughout the state. In addition, an agency
o f this kind is able to counsel both legislative and administrative branches o f the
government on economic development measures and actions. It is important that such
departments be staffed with professionals of the highest quality.
An obvious example o f successful legislative action has been the creation o f the
six New England state development credit corporations through special acts o f the
legislatures. In their brief period of organization, these corporations have collected
capital stock subscriptions amounting to $1.3 million, enlisted membership pledges to
loan $16.4 million, and have already extended nonbankable loans to small and grow­
ing businesses for a cumulative total o f $14.2 million.
Development credit corporations provide a method by which the region’ s conven­
tional financial institutions are able to turn some of their funds to long-term credit
which will stimulate additional employment and income in the several states. The stock­
holders who contribute funds and the member financial institutions who provide loan
funds at less than the going rate, are thus contributing to the public interest. It is
unfortunate that many New England financial institutions have not yet recognized their
stake in the general welfare and pledged their support to their state development credit
corporations. Only 55 per cent o f the potential commercial bank members in the
five New England corporations with an active operating experience have pledged their
support. In most states, participation by savings banks and insurance companies has
been similarly inadequate. It is also true that in some states nonfinancial business
firms which had been expected to subscribe to credit corporation stock have not yet
given the corporations their support.
The New England states pioneered in devising credit corporations and provided
a pattern for stimulating economic development which is being widely copied across
the country. This new form o f agency deserves and needs greater support here in its
New England birthplace than it has yet been given.

Taxation and Manufacturing Growth
In their power to establish the taxation structure o f the state, legislators exercise
one o f the most powerful instruments affecting economic development. The problems
o f state and municipal finance in New England are not intrinsically greater than in
the other 42 states, but resolutions o f the problems are more urgently required. The
manufacturing economy o f New England is already laboring under the competitive
disadvantages o f a lack of native available raw materials and of high fuel, power and
transportation costs. It cannot afford the additional man-made handicap o f tax and

20

spending programs that penalize manufacturing activity. Fiscal policies that retard
economic growth will create yet more severe fiscal problems.
Communities in several o f the New England states depend excessively on property
taxation because they lack an alternative source of finance to support community activi­
ties. It is imperative that legislators in New England carefully review the structure
o f their taxing and spending decisions, with particular attention to the impact those
decisions have on stimulating or retarding the state’ s economic growth.

In Summary
The foregoing pages have outlined changes which have taken place in New Eng­
land manufacturing over the last decade, indicated trends and examined the nature
and relationships of the forces which will largely shape the region’ s industrial future.
They have also offered some suggestions which may help New England to strengthen
its manufacturing structure and improve its performance.
The suggestions are addressed to New England’ s industrial managements, partic­
ularly to those in manufacturing and banking, to its community leaders and to the
legislators and administrative officers o f its six state governments. It is their thousands
o f decisions and actions, taken as a whole, which will pretty much determine whether,
and how far, New England will forge ahead in days to come. These decisions will be
the wiser and more likely to succeed to the extent that each group understands, appre­
ciates and co-operates with the other two. In our highly organized, competitive society,
no one o f these three elements can stand alone. Together they support each other and
sustain the New England economy.

The facts on New England manufacturing which are summarized in this report have been treated exten­
sively in recent issues of the New England Business Review, published monthly by the Federal Reserve Bank
of Boston. Copies of the Business Review may be had without charge by writing to the Public Information
Department of the Bank.
The material on regional manufacturing employment cycles was prepared by Professor Frank W . Gery,
Chairman of the Economics Department of Eastern Nazarene College, and is related to his doctoral thesis pre­
sented at Boston University and in completion of a research grant from the Federal Reserve Bank of Boston.




2
1

Condition

ASSETS

December 31, 1957

Gold Certificates

.............................................................

$1,066,638,442.49

December 31, 1956

$ 928,799,005.90

Federal Reserve Notes of Other Federal Reserve
Banks ................................................................................

31,700,555.00

29,465,410.00

Other Cash ...........................................................................

19,863,025.35

22,291,083.32

Loans and A d v a n c e s .....................................................

740,000.00

1,800,000.00

Industrial

..........................................................

326,600.00

312,000.00

U. S. Government S ecu rities.....................................

1,293,773,000.00

1,352,693,000.00

Uncollected Cash I t e m s ................................................

467,095,945.20

525,926,663.26

Bank P r e m is e s ...................................................................

5,010,066.81

5,361,085.39

......................................................................

11,930,139.70

13,445,702.06

T o t a l A s s e t s ...................................................

$2,897,077,774.55

$2,880,093,949.93

................................................

$1,638,156,245.00

$1,623,169,295.00

Member Bank Reserve A c c o u n ts ........................

777,422,475.18

778,900,207.77

U. S. Treasurer-Collected F u n d s ........................

38,076,894.10

33,984,008.24

Foreign

...........................................................................

19,778,000.00

17,464,000.00

Other ................................................................................

3,105,923.41

Loans

Other Assets

L IA B IL IT IE S
Federal Reserve Notes
Deposits:

T o t a l D eposits .............................................

$

........................................

836,544,864.23
348,117,468.44

548,904.03

661,566.66

$2,821,434,957.60

$2,808,493,194.33

$

$

.............................................................

T o t al L iabilities

6,196,648.22
$

344,346,515.88

Deferred Availability Cash I t e m s ...........................
Other Liabilities

838,383,292.69

C A P IT A L A C C O U N T S
Capital Paid I n ................................................................

17,741,650.00

16,801,450.00

47,012,676.68

43,947,826.20

Surplus (Section 1 3 b ) ...................................................

3,010,527.20

3,010,527.20

Reserves for C on tin gencies........................................

7,877,963.07

7,840,952.20

Surplus (Section 7 )

.....................................................

T o t a l C a p it a l A c c o u n t s ........................
T o t a l L iabilities

75,642,816.95

$

71,600,755.60

and

C a p it a l A ccounts




$

................................

22

$2,897,077,774.55

$2,880,093,949.93

Current Earnings:

1957

1956

Advances to Member B a n k s ............................................

$ 1,199,518.16

Foreign Loans on G o l d .....................................................

29,288.87

4,145.09

Industrial Loans ................................................................

14,770.09

9,769.81

U. S. Government Securities— System Account . . . .

40,016,933.52

31,363,787.40

A ll O t h e r ..............................................................................

17,981.60

16,991.63

Total Current E a rn in g s.....................................................

$41,278,492.24

$32,178,835.77

.....................................................................

9,123,662.95

8,368,632.39

Current Net Earnings .......................................................

$32,154,829.29

$23,810,203.38

Net Expenses

$

784,141.84

Additions to Current Net Earnings:
Profit on Sales o f U. S. Government Securities (net) .

$

9,847.62

$

16,547.55

Reimbursement for Fiscal Agency Expenses Incurred
in Prior Y e a r s .................................................................

94,314.23

All O t h e r ...............................................................................

981.82

Total A d d itio n s ...................................................................

5,350.38

$

105,143.67

$

21,897.93

$

37,010.87

$

37,017.07

Deductions from Current Net Earnings:
Reserves for C ontingencies..............................................
Retirement System (Adjustment for Revised Benefits)

543,884.00

All O t h e r ...............................................................................

1,307.28

1,830.92

Total D e d u ctio n s.................................................................

$

582,202.15

$

38,847.99

Net Deductions ...................................................................

$

477,058.48

$

16,950.06

Net Earnings Before Payments to U. S. Treasury . . . .

$31,677,770.81

$23,793,253.32

Paid U. S. Treasury (Interest on Federal Reserve Notes)

$27,583,697.46

$20,531,028.23

Dividends Paid ........................................................................

1,029,222.87

981,028.17

Transferred to Surplus (Section 7) ...................................

3,064,850.48

2,281,196.92

L,677,770.81

$23,793,253.32




23




The Total Assets o f the bank were $2.9 billion at the end o f 1957, an increase o f
$17 million. The principal changes were an increase o f $138 million in Gold Certificate
holdings, a decrease o f $59 million in our holdings of U.S. Government Securities, a
decrease in Uncollected, Cash Items o f $59 million, and an increase o f $15 million in
Federal Reserve Notes.
Gold Certificates increased principally because Treasury transfers to this district
more than offset losses to other districts in private, commercial and financial trans­
actions.
Loans and Advances were approximately $1 million lower than at the year end
of 1956. Advances averaged about $39 million on a daily basis during the year. The
Industrial Loans figure includes $42,000 three months overdue which was carried in
Other Assets.
U.S. Government Securities, representing our allocation o f System Open Market
Account, decreased $59 million. This reflected the continuation o f the System’ s re­
strictive credit policy which prevailed until November.
Check clearing activities again set new records. Uncollected Cash Items on the
asset side and Deferred Availability Cash Items on the liability side were both lower,
despite the increase in the over-all volume of checks handled. Improvements in oper­
ations, in part the result of the establishment of our twilight check collection force in
January 1957, helped to reduce float.
The principal change in liabilities arose from an increase of about $15 million in
Federal Reserve Notes in circulation. This increase, when coupled with the larger hold­
ings o f notes o f other Federal Reserve Banks, reflected greater use o f currency in this
district and the net transfer o f notes from this bank to other districts.
Member Bank Reserve Accounts decreased $1.5 million, while the U.S. Treas­
urer’ s Account was $4 million higher.
Capital Paid In increased by almost $1 million and a little more than $3 million
was added to surplus.
Net Earnings of $31.7 million were almost $7.9 million higher than in 1956.
The increase was due largely to higher average yield on the holdings of U.S. Securities.
Net Expenses were $755 thousand greater than last year.
After dividend payment to member banks o f $1,029,000, 90 per cent or $27.6
million of the Net Earnings was transferred to the U.S. Treasurer in payment o f
interest charges on Federal Reserve Notes levied under Section 16 of the Federal
Reserve Act.
The bank’ s ratio of Gold Certificate reserves to deposits and o f Federal Reserve
Note liability combined rose to 43 per cent, principally as a result o f the gain in Gold
Certificates. At the end of 1956 the ratio stood at 37.7 per cent.

24

Volume Figures

Daily Average

Transaction
Check Collections

Annual Total

Volume in Pieces or Units

Volume in Dollars

1957
.........................1,143,971

1956

1957

1956

1,104,500

$70,609,468,038

$67,582,937,064

Coin Counted and Wrapped . .

3,847,012

3,697,588

90,567,700

85,723,150

Currency Sorted and Counted

1,096,337

1,057,922

1,767,568,525

1,726,561,866

4,119

4,039

391,136,601

352,700,143

...................................

1,344

1,252

9,077,872,000

14,772,199,000

..............

1,652

1,575

29,461,705

32,860,139

Transfers o f F u n d s ..................

349

321

51,376,020,560

48,377,150,966

Noncash Collections:
Notes, Drafts and Coupons
(except U. S. Government)
Safekeeping o f Securities:
Pieces Received and Deliv­
ered

Coupons Detached

Issues, Redemptions and Ex­
changes :
U. S. Securities (Direct Obli­
............................

1,036

768

12,181,737,973

11,049,837,447

U. S. Savings B o n d s .........

42,165

41,198

933,485,382

856,557,601

1,901

1,818

110,416,090

111,369,731

2,762

2,747

1,637,016,471

1,495,292,882

268,629

258,984

95,268,000

91,270,000

gations)

U. S. Government Coupons Paid
(Direct Obligations)

...

Federal Taxes: Depositary Re­
ceipts and Direct Remit­
tances
Currency

.................................
Verified

stroyed

and

De­

..............................




25




Officers
J. A . E r ic k s o n , President
E. 0 . La th am ,

D.

First Vice President

H. A n g n e y , Vice President
Vice President

A n sg ar R . B e r g e ,
G eorge
B.

H. E l l is , Vice President and Director o f Research

F. G r o o t , Vice President

D a n a D . Sa w y e r ,

Vice President

0 . A . Sc h l a ik j e r ,

Vice President and General Counsel

J. E . L o w e , Cashier
E l l i o t S. B o a r d m a n ,

Assistant Vice President

F. C . G i l b o d y , Assistant Vice President
W il l ia m R . K in g ,
E . W . O ’ N e il ,

Assistant Vice President

Assistant Vice President

C harles E. T urner,
L. A . Zeh n er,

Assistant Vice President

P a r k e r B. W il l i s ,
D . L . St r o n g ,
C harles

Economic Adviser

General Auditor

H. B r a d y , Assistant Cashier

W a l l a c e D ic k s o n ,
L o r in g C. N y e ,
R ic h a r d

Assistant Vice President

Director o f Public Information

Assistant Cashier

H. R a d f o r d , Assistant Cashier

Laurence

H. S t o n e , Secretary and Assistant Counsel

J. M. T h a y e r , Jr., Assistant Cashier
G. G. W atts,

Assistant Cashier

26

Directors
R obert

C. S p r a g u e , Chairman o f the Board and Federal Reserve Agent; Chairman o f
the Board and Treasurer, Sprague Electric Company, North Adams,
Massachusetts

H arvey

P. H o o d , Deputy Chairman o f the Board; President, H . P. H o od & Sons, Inc.,
Boston, Massachusetts
M. C o o p e r , Chairman o f the Board, The Fafnir Bearing Company, New
Britain, Connecticut

Stan le y

O l iv e r

B. E l l s w o r t h , President, Riverside Trust Company, Hartford, Connecticut

M il t o n

P. H ig g in s , President, Norton Company, Worcester, Massachusetts

W il l ia m

D. I r e l a n d , President, Second Bank-State Street Trust Company, Boston,
Massachusetts

A rthur

F. M a x w e l l , President, The First National Bank o f Biddeford, Biddeford,
Maine

H arry E. U m p h r e y,
N il s

Y. W

essell,

MEMBER
L loyd

President, Tufts University, Medford, Massachusetts

OF

FEDERAL.

ADVISORY COUNCIL

D. B r a c e , President, The First National Bank of Boston, Boston, Massachusetts

INDUSTRIAL
Jo h n

President, Aroostook Potato Growers, Inc., Presque Isle, Maine

ADVISORY

COMMITTEE

L. B a x t e r , Partner, H. C. Baxter & Brothers, Brunswick, Maine
Vice President and Director o f Personnel and Public Rela­
tions, The Fuller Brush Company, Hartford, Connecticut

W a l l a c e E . Ca m p b e l l ,

E arl

P. S t e v e n s o n , Chairman o f the Board, Arthur D. Little, Inc., Cambridge,
Massachusetts

Fred

C. T a n n e r , President and General Manager, Federal Products Corporation,
Providence, Rhode Island

H arold

J. W

President, Treasurer and General Manager, Bachmann Uxbridge
Worsted Corporation, Uxbridge, Massachusetts

alter,




27




*'S&i R e s e r v e

Bank o Boston
ff




1957





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102