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AXNUAE

REFORT




OR

TME

EEDERAE

OF

RESERVE

FKIEADEEFMrA

1956

BANK

THE FEDERAL RESERVE BANK OF PHILADELPHIA




In 1956 probably more people talked, thought, and learned more
about money than in years. Many of these aspects of money had
been discussed many times before. A newer problem was the
whole question of money and economic growth. Because of the
wide interest in this subject, we devote the opening section of this
Report to a brief analysis of it.
Then we turn to the most outstanding economic development
of 1956—tight money—and try to answer two fundamental ques­
tions: What is it? and Why did we have it?
For those concerned with the more technical aspects of mone­
tary policy, we attempt in the third section of this Report to go
a little beneath the surface of one of the most significant develop­
ments of the year—the heavy volume of borrowing from Federal
Reserve Banks. We have used the case-example approach to try
to find out something about the why, who, and how of bank
borrowing.
In the fourth section we talk about an activity of this Bank that
we consider all-important, particularly in a year like 1956—that
is, creating a better understanding of the objectives and problems
of the Federal Reserve System.
Finally, the remainder of this Report presents pertinent facts
about operations of the Bank during the year.

(Ityu ;'?J s
PRESIDENT




CONTENTS

Page

1

MONEY AND GROWTH

6

1956: YEAR OF TIGHT MONEY

12

LENDING TO MEMBER BANKS

18

BANK AND PUBLIC RELATIONS

22

RESERVE BANK OPERATIONS

26

APPENDIX

Additional copies of this report are

available upon request to the
Department of Research

Federal Reserve Bank of Philadelphia

Philadelphia 1, Penna.

MONEY AND GROWTH

Some day, some perceptive scholar may be able to capture the history of
Federal Reserve policy simply by analyzing a series of dilemmas. He would
look at such knotty problems as holding down commodity prices without
depressing Government securities prices, restraining inflation without bringing
on unemployment, curbing speculation without hampering productive activity,
etc. Only time can tell how much attention he should give to a dilemma left
on the doorstep of the monetary authorities in 1956—how to restrain inflation
without interrupting long-run economic growth.
If he were writing today, he would certainly have to go into it quite
thoroughly, for it is a question that seems to be bothering many people. Pro­
fessional economists have been discussing it;* business and financial publica­
tions have been writing about it; and bankers and businessmen have begun
to think about it in making plans for the future. Interest in the subject has
spread wide and fast. Why? Because it concerns something which has become
near and dear to our hearts—economic growth.
Anyone with a sardonic turn of mind might be amused by the fact that
1956, when “growth” was the byword, marked the twentieth anniversary of
the publication ofj. M. Keynes’ General Theory of Employment, Interest and Money
For the revolutionary ideas which Keynes developed provided the founda­
tion on which arose the theory of the “mature economy.” This theory held
that a number of basic forces doom our economy to “secular stagnation.”
Since then, a decade and a half of almost uninterrupted prosperity have
*The American Economic Review of May 1956 has several papers dealing with economic growth,
one of which is on the “Relation of Money to Economic Growth.”




1

virtually obliterated the concept from the minds of most people. Long-run
growth has taken its place.
Growth means different things to different people. To some, it is a faith; a
New Era philosophy generated by the post-war boom. To others it is a statistic;
something which has happened in the past and therefore will happen in the
future. And to still others it is a goal; an objective that should enter into all
policies of government.
So far as the Federal Reserve is concerned, growth always has been an
objective of policy. If you go all the way back to the original Federal Reserve
Act of 1913, you find the Reserve Banks directed to fix their discount rates
“with a view of accommodating commerce and business.” More recently, the
more specific terms “orderly economic growth” and “sustainable economic
growth” have been used officially to describe one of the goals of policy.
But this isn’t quite what some people apparently have in mind. They feel
there is some optimum relationship between the amount of money and the
rate at which the economy progresses. Just as a certain vitamin intake is needed
for the healthy growth of a youngster, a certain amount of money is necessary
for growth of the economy; if there is not enough, growth is stunted. What is
Money and Growth
BILLIONS $

10

1920

1925

1930

1935

1940

1945

1950

1955

Over a 40-year stretch the money supply has grown at about the same annual rate as Gross
National Product.

2




the right amount of money? To get some idea they turn to the past and con­
clude that the economy has been growing at a rate of x per cent a year, so
the money supply should be increased by x per cent a year to permit this rate
of growth to continue.
A look at a few facts may throw some light on the validity of this theory. As
the chart shows, over the past 40 years Gross National Product has risen at a
compound rate of about 5 per cent a year. The money supply has risen at a
rate of almost 6 per cent. On the surface this seems to bear out the idea of
a fairly close correspondence between changes in the money supply and
economic activity.
But when we talk about growth, we usually think in real terms. It would
make little sense to increase the money supply to keep pace with a Gross
National Product rising only because of higher prices. When G.N.P. is adjusted
for price changes, we find that over the past quarter of a century the economy
has grown at an annual rate of 3 per cent. The money supply has risen at a
rate of about 6 per cent. The correspondence now becomes much less close.
In any case, a figure around 3 per cent—sometimes more or less—is often
taken as the “normal” annual growth factor. In 1956 the money supply rose
Money and Real GNF*

When price changes are taken out of Gross National Product, the annual rate of economic growth
has been only half of that for the money supply.




3

Year-to-Year Changes in GNF* and Money Supply

The money supply and real Gross National Product seldom change to the same degree from year
to year. (In years when they increased, they are plotted above the zero line; when they decreased,
they are plotted below. The shaded areas show the difference between the two lines.)

by only 1V2 per cent. Hence, the concern about tight money interfering with
long-run growth.
Whatever may be the validity of the idea of a long-run correspondence
between money and growth, it is important to recognize that extension of the
principle to a single year like 1956 assumes at least two things constant—
the rate of growth itself and the velocity of money.
Any parent knows that a youngster grows in spurts, not at a constant rate.
Sometimes he eats like a horse, sometimes like a bird. Although economic
growth may average out at 3 per cent, the chart shows that in some years
deflated G.N.P. has increased as much as 15 per cent; and it has declined as
much as 15 per cent. Moreover, from year to year, changes in the money
supply often have been considerably more or less than changes in real G.N.P.
To say, therefore, that the money supply should have been increased by 3 per
cent during 1956 because the economy has grown at an average rate of 3 per
cent since 1929 overlooks the erratic changes which go to make up that average.
It also overlooks the possibility that the public may use its existing money
supply more or less efficiently. Actually, those who are worried about the
money supply not keeping up with G.N.P. should have begun to express their
concern five or six years ago. Since 1950 the money supply has increased by
4




only a little more than 3 per cent annually, yet real G.N.P. has averaged 4
per cent. Increased velocity has made up the difference.
There is a real question, though, as to how much of the load velocity can
carry. Some feel that although velocity has been filling the breach, it is reach­
ing a ceiling, so that the money supply must soon be increased more rapidly
or growth will really suffer. But no one knows much about velocity. We know
that it is influenced by the habits and psychology of consumers and business.
We know, and the chart shows this, that velocity today is considerably below
what it often has been in the past. But we don’t know how much further the
public would be willing to economize their money holdings.
At any rate, it is clear that the problem is more complex than it looks on
first encounter. Chairman Martin recognized this in a speech to the Pennsyl­
vania Bankers Association in 1956. He said: “The volume of money must grow
with the growing population and the growing scale of economic activity. How
much growth there should be is more difficult to say. Some people think the
Velocity of Money

The economy has used its money supply more effectively in recent years. But velocity is still well
below many years in the past.




5

money supply ought to grow at the rate of 3 per cent a year, while others may
say 2 per cent to 5 per cent; I do not profess to know what the figure ought
to be, and I doubt that a precise figure can be set as desirable for year in and
year out purposes. . . . since monetary policy deals with human nature and
human beings, it can’t operate on a formula basis.”
But in another sense, this problem may well not be as serious as it looks. Is
there really a dilemma between restraining inflation and encouraging growth ?
In the full-employment economy of 1956, more money could not have stim­
ulated more growth—in real terms. It could have given us a bigger G.N.P.,
but only through higher prices. At other times, however, when the economy is
running at less than capacity, more money can help to stimulate economic
activity and encourage an expansion of real output.
Everyone agrees that long-run growth is desirable. But if the Federal
Reserve succeeds in solving its shorter-run problem of contributing to eco­
nomic stability and relatively full employment, it is likely that long-run growth
of the money supply will take care of itself.

1956: YEAR OF TIGHT MONEY

Rather than present the usual review of business and financial developments in
1956, we have decided to sketch a brief picture of only one important aspect of the
year—tight money. It is not surprising, however, that in trying to answer two basic
questions about tight money—what it is, and why we had it—we do in fact cover
most of the outstanding developments in business and finance. For tight money
6




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was a matter of concern to more than the Federal Reserve System. The headlines
testify to the fact that it permeated the entire economy, influencing activities of
homebuilders, state and local governments, corporations, consumers, and numerous
other groups. In many respects, tight money was the key economic development
of 1956.
What is tif’lat. money?

To answer this question we must look at the credit market. The credit market is
any place where borrowers—consumers, businesses, and governments—demand
funds, and where lenders—mostly savings institutions (like insurance companies,
mutual savings banks, savings and loan associations) and commercial banks—sup­
ply funds. This is where interest rates are set.
Tight money was simply a short way of saying that the demand for credit was
stronger than the supply. So, like any other price in such a situation, interest rates
went up.
Responsibility for tight money, therefore, lay basically with those who wanted
credit. Their demands were greater than could be supplied out of savings. But the
Federal Reserve was also responsible. It could have stimulated the flow of bank




7

credit to help meet demands. But in general it didn’t. Neither did it move aggres­
sively to shrink the supply of credit by selling government securities or raising
reserve requirements. The Federal Reserve simply kept bank credit from expand­
ing as fast as demands increased, more or less letting the market tighten itself.
Interest Rates
PER CENT

One measure of tight money was the
increase in interest rates that resulted.
As market rates rose, the Federal Re­
serve Banks raised their discount rates.

Money Svijjjjly and Velocity
PER CENT CHANGE —,955 TO ,956




Another indication was the relatively
small increase in the money supply. And
a third was the rising velocity of money;
as the supply of money tightened, the
economy used its existing money hold­
ings more efficiently.

Why tigPit money?

This was a question many of those involved in the above headlines frequently
asked, sometimes quite vehemently. For tight money kept them from doing some
of the things they wanted to do—building more houses, factories, roads, etc. But,
naturally enough, they were looking at the problem from their own individual
point of view. The Federal Reserve was looking at the economy as a whole.
What it saw was a market for all goods and services. Our economy is a place
where resources are put to work in producing goods and services which enter the
market place. Consumers, businesses, and governments demand these products by
spending their dollars in the market. The flow of dollars meeting the flow of goods
determines the price level. If the flow of dollars is too strong, we are likely to have
inflation; if it is not strong enough, we are likely to have recession. The Federal
Reserve’s job is to regulate bank credit in such a way as to contribute to the main­
tenance of spending in balance with output at a high level.




9

Consumer* Spending Change from 1955
BILLIONS $

In 1956 the flow of dollars was very
heavy. This was a point many con­
sumers failed to see because they looked
at familiar things like cars and tele­
vision sets. When they saw that spending
for them was down from 1955, they
concluded that demand for all con­
sumer goods was off. But if they had
looked also at nondurable goods (like
food and clothing) and services (like
haircuts, electricity, and rent), they
would have found that consumer spend­
ing in 1956 was up considerably—more
than enough to make up for the decline
in spending for durables.

Investment Spending Change from 1955
BILLIONS $

Also, they were likely to think of
housing, which was off from 1955. But
businesses were spending so much more
for new plants and new equipment that
the drop in housing plus business inven­
tories was more than cancelled out.

Government Spending Change from 1955
BILLIONS $




Similarly, the Federal Government
spent little more than in 1955, but states
and local governments kept on pouring
dollars into the market place for more
roads, schools, hospitals, and other facil­
ities. As a result, total government
spending was significantly higher.
Adding consumer, business, and gov­
ernment spending together, we find that
the flow of dollars was indeed large—
in fact, greater than ever before in
our history.

Ovit-jjvit a,n<l Capacity of major materials

On the other hand, the ability of our
economy to supply increasing demands
was limited. Unemployment was about
at minimum. The labor force was work­
ing more than 40 hours a week. Basic
industry was operating close to capacity.
With the flow of goods limited, a rapid
expansion in the flow of dollars threat­
ened to force up prices.

Prices did, in fact, rise almost continuously throughout the
year both at the wholesale and retail levels.

Prices

INDEX (1947-49 = 1 00)

118

116

Cons jmer p>rices

114

Whol esale prices

112
r\

1956

_

JFMAMJJASOND

So no matter where the Federal Reserve looked in the market for all goods and
services—at the demand side, or the supply side, or the market place itself—infla­
tionary pressures were there. The Federal Reserve’s restrictive policy was an attempt
to keep demands from being even more inflationary. No one knows for sure what
would have happened in the absence of such a policy, but it is likely that prices
would have risen still more.




11

The impact of tight money on operations of this Bank in 1956 was nowhere so
apparent as in our loans to member banks. Although still well below the peaks
reached in the 1920’s when discounting was the main way in which banks got
reserves, the average level of loans outstanding in 1956 was greater than at any
time since 1932. As the chart shows, lending was particularly active around the
middle of the year. A brief look at this lending, especially during the period of
heavy activity, may give an idea of some of the problems facing this Bank and its
members during the year.
Lending to Member Banks: The long- and short-run picture
MILLIONS $

MILLIONS $

A

/

100

1 QV
(Average cdaily balance of discounts <jutstanding
1 at the Fed sral Reserve Bank of Phila<delphia)

A

I
160

80

140

60

120

40

100

20

80

1956

/

\

\

\/

1 1 1 1 1 1 1 1 1 1 1
J F M A M J J A S O N D

60

40

20
Z
V

/Li.

i

1 1 1

1920

1

-1

1925

1

1 L

i

1930

i

i

K

1

1935

1

1

1

i i.X
1940

1945

Although still well below the volume of some years back in the 1 920’s, lending to member banks
was greater in 1956 than at any time since 1932. It was particularly active around the middle of
Digitized12
for FRASER
the year.



1.......L..I

1950

1
1955

WFiicli Banks Borrowed ?
PER CENT

The Philadelphia banks accounted for more than three-fourths of the outstanding loans during most
of the year, although they had only about two-fifths of total member-bank resources.

201 banks, or almost two out of five borrowed. This was more than at any time
in the past two decades. But it was considerably less than in the early 1930’s and
the 1920’s when three out of four banks frequently were borrowing.
It would not be far wrong to characterize borrowing during 1956 as a bigPhiladelphia-bank phenomenon. As the chart shows, the Philadelphia banks
accounted for more than three-fourths of the outstanding loans during most of the
year, although they had only about two-fifths of total member-bank resources.
Moreover, as can be seen in the following table, the largest banks (most of them in
Philadelphia) were in debt almost half the time during the period of heavy activ­
ity, compared with about one-third of the time for the other borrowing banks.
Almost all of the very large banks borrowed, but only 10 per cent of the very
small banks.

In May through August,
banks of this size . . .

. . . borrowed this
proportion of the
total amount . . .

Deposits under $ 2 million
$ 2—
5 million
5— 10 million
10— 20 million
20— 100 million
over $100 million
All borrowing banks..........

*%
1
3
3
7
86
100%

. . . and had borrow­
ings outstanding dur­
ing this proportion of
the total period.

This proportion of
all member banks
in the size group
borrowed.

33%
32
35
37
26
49
34%

10%
20
39
31
64
92
37%

*Less than .5 per cent




13

How banks borrowed

Philadelphia banks were more active borrowers than the smaller country banks
also in the sense that they were frequently changing the amounts borrowed. If you
count as a single borrowing the length of time a given amount remained on the
books, it is clear that the larger the bank, the shorter the period of each borrowing.

In May through August,
banks of this size . . .

Deposits under $ 2 million
$ 2—
5 million
5— 10 million
10— 20 million
20— 100 million
over $100 million
All borrowing banks........

. . . borrowed this number
of days each time

17
11
11
9
5

7

It was not that Philadelphia banks needed funds only temporarily; actually, as
we have seen, they were borrowing a larger part of the time than country banks.
It was just that they followed their reserve positions more closely, paying off some
of their borrowings as funds came in, borrowing more as pressures increased again.
The premium for playing it close to the line became greater and greater as interest
rates rose.
Day-to-Day Movements in Borrowing

y ba nk s —Thir d Fed era l Reserve Dist rict)

MILLIONS $

Philadelphia banks were constantly changing their borrowings during the period of heavy activity.
They usually reduced their debts on Wednesdays. (The green line.)

14




Some idea of how closely Philadelphia banks actually did watch their positions is
given by the chart on daily borrowing during the period of heavy activity. The
jagged line shows how widely borrowing fluctuated from day to day. The green
line—much smoother and lower—shows the volume outstanding on Wednesdays.
What happened was that banks borrowed heavily on Thursday and Friday to
build up reserve positions, then paid down their borrowings by Wednesday. Since
they were required to meet reserve requirements only over the week as a whole—and
for this purpose the week ended on Wednesday—excess reserves early in the reserve
period were enough to compensate for deficits later. The reason for paying down
borrowings on Wednesday was that most banks submitted their statement of con­
dition on that day and did not like to report any more indebtedness than necessary.
There was nothing particularly new about this. But banks did revive in 1956 a
practice they had not engaged in for years. For the first time in fifteen years, some
of them used commercial paper in substantial volume as collateral. This was another
reflection of the tight money situation. Banks had sold large amounts of Govern­

ment securities that they ordinarily use for collateral. And they were using much
of what they had left as security against Treasury tax and loan and state and local
government accounts.
Why banks borrowed

The high level of bank borrowing was a sign that banks were being squeezed.
As the chart shows, they were under pressure from one group of customers—their
borrowers—for more credit. But another group—-their depositors—was not putting
Mow Banks were Squeezed
MILLIONS $

“1

—I
OF FL NDS
(Inert?ases n liab ilities or dec rease s in as sets)

sou RCES

"7
Z
Z

Invest ments

f

X.

\*
\
\
\
\

y
z

Lo( 3ns

X

><

**Depc>sits^

USE’> OF :UNDS
(Incr sases in asststs or decre ases ir

1956

J

F

MA

MJ

t

Z
Z
/__

liabi ities)

JASOND

How to read this chart: loans were increasing and deposits (during much of the year) were off.
These were the main uses of bank funds. The biggest source of funds came from selling investments.




15

in enough funds to meet all loan demands. We have already shown how in 1956
the growth of deposits was limited in the nation as a whole. In this district, deposits
actually were off during most of the year. To relieve the squeeze, banks sold Gov­
ernment securities. But even that was not enough, so they borrowed.
A further look at the major sources and uses of bank funds helps to explain
two points raised earlier—why such a large proportion of the borrowing was done
by large Philadelphia banks, and why borrowing bunched up around the middle
of the year.
Banks outside as well as inside Philadelphia were squeezed, but the pressure
was greater in Philadelphia. Loan demands were heavy in both cases, as the chart
shows. In fact, loan expansion throughout the year was larger and more persistent
in country banks than in Philadelphia banks. But the Philadelphia banks lost more
demand deposits and failed to share in the strong inflow of time deposits that
country banks enjoyed.

Banks

The Pressure on F*kii lndel jjlai
was Greater than on ...

... Country Banks
MILLIONS $

—
—
SOUR<:es OF F UNt)S
(Increa ses i n lia biliti es o r de crea ses i 1 as sets)

SOURCES OF FUNDS
(Increases in liabilities o

dec:reas es i a ass ets)

200
U. J>. G □ver imerits

150

100

U.

50

Oth er se curi ties

100

Ti me cJepo sits

X
v
s

X
X
X

150
D<;marid
200

1956

*

\

4
z

<
X, vZ
X
d spos its
X

Lo ans

X
\
/

/

/
t
9

/
k ZZ

ES OF FUNDS
1
US
(In creases in assets or d ecre ases in li abili ties)
JFMAMJJASOND

Philadelphia banks faced a strong demand for
loans, withdrawals of demand deposits and little
increase in time deposits. They had already sold
large amounts of Governments.

V
1
X
\
X




7

k Other secur ities

X
Loans *
________

/
<

1
z>‘
——
D ema Kd clepo
)F FUNDS
1
us ES C
>es
in
assets
or
decreeases in li □ bili ies)
(Inc:rea:
____ 1____ 1____ 1____ 1____
S
O
N D
M A
M
J
*«.

Country banks had a stronger loan demand and
also lost demand deposits during most of the
year. But they enjoyed a strong inflow of time
deposits and could sell Government securities.

To meet loan demands and deposit losses, both groups sold Government securi­
ties. Philadelphia banks, however, had been selling all through 1955, and by the
middle of 1956 were practically out of short-term securities. They still had Govern-

16

z’

Ti me Jepo sits

0
50

s. c?ove rnme nts

Seasonal Swings (Based on monthly averages—1952-1956)
PER CENT

Some tendency for borrowing from this Bank to bulge around mid-year may be caused by a sea­
sonal expansion of loans (relative to other areas) and a seasonal loss of deposits.

merit bonds but were naturally reluctant to sell at the low prices prevailing in the
market. They turned increasingly to municipals and other securities as a source of
funds. Country banks, on the other hand, actually were able to increase their
holdings of other securities slightly.
To explain the bulge in borrowing around midyear, we have to go beyond the
charts on sources and uses of bank funds into territory we know less about, even
in retrospect. It is clear that a similar bulge did not take place at all Reserve
Banks. And we know that the volume of borrowing in this district for a time clearly
was out of line with the importance of this district in the nation’s economy. Most
measures indicate that this is a 5-to-7-per-cent district; but borrowing from this
Bank between May and August was well above 10 per cent of the volume of bor­
rowing from all Reserve Banks.
It may well be that the heavy borrowing was the result of forces at work for
some time. Banks in Philadelphia had been expanding their loans rapidly for
several years—more rapidly than banks in the rest of the nation. But because their
deposits had not been increasing as fast as their loans (and, in fact, not as fast as
deposits in the nation as a whole), their loan-to-deposit ratio had risen to a very
high point compared with other sections of the country. To get funds for loans,
banks had reduced their investments much more rapidly than average to the point
where their ratio of investments to deposits was low compared with other areas.
On top of this longer-run situation, seasonal developments put even more pres­
sure on the Philadelphia banks. The chart shows that borrowing from this Reserve




17

Bank usually increases, relative to borrowing from all Reserve Banks, around the
middle of the year and drops again in the fall. This seems to be because loans
bulge in the same way, while deposits tend to move in the opposite direction.
Since the usual tendency seems to be for loan demands to be relatively less insistent
toward the end of the year and for deposits to flow in from other areas, pressure
might have eased even if banks had done nothing about their situation.
But these developments are not invariable or dependable. And banks did some­
thing to assure the result. When they needed reserves, they were more inclined to
try to get them in the Federal funds market before coming to the Fed. While this
may have tended to reduce borrowing at this Bank, it did not help to relieve pres­
sure on the banking system as a whole. In addition, however, banks apparently
attempted in many different ways to encourage the inflow of deposits and to hold
down the expansion of loans. In thus working toward a solution of their own prob­
lems, they helped this Bank combat the broader problem of inflation.

BANK AND PUBLIC RELATIONS

The Federal Reserve Banks recognize, I
know, the special responsibilities they bear
in their respective areas for gathering eco­
nomic information and for making it avail­
able. They have a duty to explain what
they do, and why, in carrying out their part
in the trusteeship over credit.
Wm. McC. Martin, Jr.
As we have seen in the preceding pages, the interests of the public and the Federal
Reserve are inseparable. Problems of monetary management, primarily the respon­
sibility of the Federal Reserve, are ultimately problems of the central bank relative
to the public welfare. It would be difficult to find a more basic kind of public
relations.
At first glance, however, the central banker appears to have the cards stacked
against him in this field. This report has discussed some of his dilemmas, but there
are others of a different nature.
By tradition, for example, the central banker is known to prefer “the silent
service,” letting actions rather than words speak for him. By obligation, he is
close-mouthed lest he tip his hand to the advantage of some at the expense of

18



others. He is changeable—sometimes restrictive and abrasive; at others, easy and
expansive, and sometimes neutral. He “leans against prevailing winds,” “bucks the
tide,” “removes the punch bowl just when the party’s getting started”—and puts
it back when no one is particularly thirsty. He is accused of doing too little or too
much—and at the wrong time. When applauded for what he is doing, he suspects
his own effectiveness and warns of his limitations. In his dual role of supervisor of
banks and overseer of credit, he must perform such constabulary duties as the law
requires.
All in all, his lot, like that of Mr. Gilbert’s policeman, is not a happy one. Nor
would it appear to be cast for effective public relations, as that term is com­
monly used.
On the other hand, despite these encumbrances, he does not labor in a com­
pletely unyielding vineyard. When his performance is good and his purposes and
policies understood, if not agreed with, the climate he works in improves. A midwestern professor of business administration writes:

We have a Boy Scout Week and we have a Love Your Mother-InLaw Week, and many others. I think it would not be unreasonable
if we were to establish something called National Be Kind to the Fed­
eral Reserve Week—in which we would do our best to express kind­
ness and sympathy with the Fed, if not complete agreement with
everything they are doing. Theirs is a difficult and unenviable task.
Recognition of the tasks and the problems is always a step in the right direction.
Some problems were outlined earlier in this report. They demand thought and
constructive discussion and this implies, of course, good two-way communications,
essential to mutual understanding, between the central bank and the general public
it serves.
Even though the central banker in his official capacity tends to be uncommuni­
cative for reasons suggested above, framers of the Federal Reserve Act provided
a number of assurances that he would not be isolated. They built into the System,
in effect, a network of communications devices. For example, the Act ensures diver­
sity on the Board of Governors and on the Open Market Committee. The 12
regional Reserve Banks and their 24 branches must reach into the grassroots of
their respective districts for directors of varied experience and background. The
Federal Advisory Council was set up primarily to provide a statutory avenue of
communications with the Board of Governors. The Federal Reserve is empowered
to call for various reports which, among other uses, supply information bearing on
economic conditions. In turn, it must submit a report to Congress annually but is
usually called on more frequently for statements, reports, and testimony. They
become a matter of public record.
There are, of course, many other arrangements by which the Federal Reserve
System and the Reserve Banks keep informed and transmit information to the
economy. Especially important are the statistics and research studies published in
the monthly Federal Reserve Bulletin and in the monthly business reviews of the
Reserve Banks, and in other releases and booklets. The catch-all term “public
relations,” variously defined, could encompass the multitude of operational and




19

personal relationships involving the Federal Reserve System and the Reserve
Banks. However, this section is limited to a review of activities falling under the
bank and public information program of one Federal Reserve Bank. All Federal
Reserve Banks conduct similar activities in forms they deem appropriate in their
districts.
Dual objectives

Their basic objectives are twofold: to bring about understanding of why the
Federal Reserve System exists, what its responsibilities are, and how it functions;
and, conversely, to keep the System aware of attitudes toward its policies, regula­
tions, and operations. In brief, the premise is that the effectiveness of the Federal
Reserve System and the Reserve Banks is more likely to be enhanced by mutual
understanding and awareness than without them. Furthermore, since Federal
Reserve Banks do not operate for profit, the customary market place criteria do
not apply to what Reserve Banks do. The differences between Federal Reserve
Banks and commercial banks are not obvious to a large segment of the public.
Therefore, much of the “public relations” aspect of our efforts is devoted to explain­
ing what Federal Reserve Banks do and the place of the Federal Reserve in our
economy.
Activities carried on by this Bank fall into two general categories, those that
involve primarily the banks of the district and those that apply to other segments
of the public.
Soundings Fr>om the district

Most banks in the district are visited, usually on a county-by-county basis, at
least once a year by our representatives. These calls provide opportunities to
exchange views and discuss problems with bank officers on their home grounds.
They are a means of keeping in close touch with area trends, a periodic pulse­
taking in the 60 counties of this district. Reports of visits include, among other
things, summaries of conditions and new developments, credit, deposit and interest
rate trends, opinions and attitudes regarding monetary policy, comments about
Reserve Bank operations, and other matters of information. Circulated among
officers and research personnel, they feed into the general stream of information
and intelligence about the district.
Through their state and group associations, banks in this district select members
of a group known as the Federal Reserve Relations Committee which serves a
liaison function in such matters as may be appropriate. From time to time its
members may be called upon to meet at the Bank.
Members of this Committee assist us in organizing a series of field conferences
covering the district once a year. An officer and director from each bank are
invited to attend a conference in the area where their bank is located. Each meet­
ing provides an off-the-record forum for frank exchange of information and views
on subjects of common interest, such as national business and credit trends, mone­
tary policy, consumer credit, operating ratios, and bank personnel. Representatives
of local industry, retailing, real estate, agriculture, and other fields report on
area trends.
Conferences at the Reserve Bank are sometimes held in place of field confer-

20




ences. Bank officers and directors are invited to spend a day at this Bank observing
behind-the-scenes operations and reviewing their knowledge of the Federal Reserve
System.
Information available

Federal Reserve Bank representatives are exposed to public opinion at meetings
they address and others they attend. In a period such as 1956, when a great deal
of attention and publicity is given to monetary policy, the number of requests for
talks and speeches increases. They come from business, banking, and professional
groups, civic and service organizations, educational institutions, and trade associa­
tions. They offer excellent opportunities to explain what the Federal Reserve is
doing, and why, and to obtain the views of a great variety of people. Increasing
use is made of visual aids, which help clarify talks on subjects related to the Federal
Reserve System, monetary policy, and business conditions.
About 1400 visitors, usually in groups, tour the Bank each year. These include
high school seniors, college and university classes, school teachers and counselors,
foreign visitors, business, banking, and professional groups, directors, officers and
staffs of banks, and other individuals. Tours include talks and discussions about the
Federal Reserve appropriate to the group. Guides are trained employees from
departments throughout the Bank.
Contacts are maintained with teachers of money and banking and related sub­
jects in accredited colleges and universities in the district. Federal Reserve publi­
cations and testimony and speeches of an educational nature are called to their
attention where appropriate. A seminar for a group of college and university
teachers of money and banking was held at the Bank in 1955. It dealt mainly with
selected operations of a Reserve Bank, problems in the formulation of monetary
policy, and problems in implementing policy. Several officers of the Bank teach
regularly at universities in this area and lecture at banking schools in other parts
of the country.
Information services of the financial library and of the research and statistics
department of the Bank are used extensively. Collections of currency and coin are
available to member banks for lobby display and are on exhibit in the Bank.
Increasing interest in monetary policy has stimulated the use of publications of
this Bank, the Board of Governors, and other Reserve Banks. Films on money,
inflation, and the Federal Reserve, which may be borrowed without charge, are
also in demand.
In summary, the information services and activities listed above are carried on,
on one hand, for the purpose of broadening public understanding of the Federal
Reserve System. The responsibilities of the central bank in our society are vital to
the public welfare. The law establishes these responsibilities and the central bank
carries them out through its policies, regulations, and operations. Understanding
the purposes and limitations of the central bank is important, because its perform­
ance must be evaluated in terms of what it is set up to do and not in terms of its
success in the market place as with most other institutions. On the other hand, these
activities help keep the Federal Reserve Bank of Philadelphia informed of trends
in this district, aware of attitudes about its policies and operations, and alert to
the effects of monetary policy.




21

RESERVE BANK OPERATIONS-1956

Developments in the economy over the past year—tightness in the credit situation
and the growth in trade and industrial activity-—were reflected in the operations
of the Federal Reserve Bank of Philadelphia.
The more general use of its credit facilities and the increase in discount operations
are covered earlier in this Report under the heading “Lending to Member Banks.”
In terms of personnel and equipment requirements, the largest single division of
the Bank is the Department of Collections. A moderate increase in physical volume
of work was reported in all phases of its operations—the handling of ordinary
checks, Government checks, postal money orders, and non-cash items.
Transfers of funds were larger than in 1955 both in number and in dollars.
Active demand for currency was reflected in larger payments to banks and in the
greater number of pieces counted by the Cash Department. Further growth was
reported in the number of depositary receipts for withheld taxes received and proc­
essed, and volume increased in the department which handles currency, checks,
and savings stamps received from postmasters. The phase of fiscal agency work
concerned with the issue, exchange, and redemption of securities for the Federal
Government shows mixed changes; the number of securities redeemed was smaller
in the aggregate and deliveries of marketable issues against subscriptions and of
savings bonds of the H, J, and K series declined, but deliveries of Series E bonds
increased in number.

22



The efficiency of internal operations is constantly under review and every effort
is made to keep abreast of improvements in methods and equipment. The activities
of a Reserve Bank, however, are not confined to service functions such as the collec­
tion of checks, the provision of currency, and fiscal-agency activities. As part of
the central banking organization of the country, it shares in the formulation and
administration of monetary and credit policy. In carrying out this responsibility,
the Bank keeps in close touch with banking and business developments, provides
information to bankers and the general public, and helps to broaden public under­
standing of System policy and its relation to the economy. These activities are
described in some detail in the section of this Report dealing with bank and public
information relations.

Directors £t,nd officers

Two new directors were elected by the member banks in the fall to serve for terms
of three years from January 1, 1957. Geoffrey S. Smith, President of the Girard
Trust Corn Exchange Bank, Philadelphia, was elected by banks in Group 1 to
serve as a Class A director, succeeding William Fulton Kurtz. Banks in Group 2
elected R. Russell Pippin, Treasurer of E. I. du Pont de Nemours and Company,
Wilmington, Delaware, as a Class B director; he succeeds Warren C. Newton.
The Board of Governors of the Federal Reserve System reappointed Dr. Lester
V. Chandler, Professor of Economics at Princeton University, to serve as a Class C
director of this Bank for another three-year term, beginning January 1, 1957.
William J. Meinel continues as Chairman and Federal Reserve Agent during 1957
and Henderson Supplee, Jr. as Deputy Chairman.
By appointment of the Board of Directors of this Bank, William R. K. Mitchell,
Chairman of the Board of the Provident Trust Company of Philadelphia, will con­
tinue to represent the District on the Federal Advisory Council during 1957.
Effective November 1, 1956 Harry W. Roeder, an Assistant Cashier, was made
an Assistant Vice President, and Walter H. Wray and Russell P. Sudders became
Assistant Cashiers.




23

DIRECTORS as of February 1, 1957

Term expires
December 31

Group

CLASS A

1

GEOFFREY S. SMITH
President, Girard Trust Corn Exchange Bank,
Philadelphia, Pennsylvania

1959

2

W. ELBRIDGE BROWN
President and Trust Officer, Clearfield Trust Company,
Clearfield, Pennsylvania

1957

3

LINDLEY S. HURFF
President and Trust Officer, The First National Bank
of Milton, Milton, Pennsylvania

1958

CLASS B
1

CHARLES E. OAKES
President, Pennsylvania Power & Light Company,
Allentown, Pennsylvania

1958

2

R. RUSSELL PIPPIN
Treasurer, E. I. du Pont de Nemours & Company,
Wilmington, Delaware

1959

3

BAYARD L. ENGLAND
President, Atlantic City Electric Company,
Atlantic City, New Jersey

1957

CLASS C

24




WILLIAM J. MEINEL, Chairman
Chairman of the Board, The Heintz Manufacturing Company,
Philadelphia, Pennsylvania

1957

HENDERSON SUPPLEE, JR., Deputy Chairman
President, The Atlantic Refining Company,
Philadelphia, Pennsylvania

1958

LESTER V. CHANDLER
Professor of Economics, Princeton University,
Princeton, New Jersey

1959

OFFICERS as of February 1, 1957

ALFRED H. WILLIAMS
President

W.J. DAVIS
First Vice President

CLAY J. ANDERSON
Financial Economist

KARL R. BOPP
Vice President

DAVID P. EASTBURN
Financial Economist

ROBERT N. HILKERT
Vice President

MURDOCH K. GOODWIN
Assistant General Counsel
and Assistant Secretary

ERNEST C. HILL
Vice President

WILLIAM G. McCREEDY
Vice President and Secretary

PHILIP M. POORMAN
Vice President
JAMES V. VERGARI
Vice President and General Counsel

RICHARD G. WILGUS
Cashier and Assistant Secretary
JOSEPH R. CAMPBELL
Assistant Vice President

WALLACE M. CATANACH
Assistant Vice President
NORMAN G. DASH
Assistant Vice President

EDWARD A. AFF
Assistant Cashier
HUGH BARRIE
Machine Methods Officer

ZELL G. FENNER
Chief Examiner

RALPH E. HAAS
Assistant Cashier
ROY HETHERINGTON
Assistant Cashier
FRED A. MURRAY
Director of Plant

HENRY J. NELSON
Assistant Cashier

GEORGE J. LAVIN
Assistant Vice President

RUSSELL P. SUDDERS
Assistant Cashier

HARRY W. ROEDER
Assistant Vice President

WALTER H. WRAY
Assistant Cashier

EVAN B. ALDERFER
Industrial Economist

HERMAN B. HAFFNER
General Auditor




25

APPENDIX—statistical tables

Page

FEDERAL RESERVE BANK OF PHILADELPHIA
27

Statement of Condition

28

Earnings and Expenses

29

Volume of Operations

MEMBER BANKS-

THIRD FEDERAL RESERVE DISTRICT
30

Combined Statement

30

Earnings, Expenses, and Profits

31

FACTORY EMPLOYMENT AND HOURS

31

INCOME AND PRICES

32

DEPARTMENT STORE SALES AND INVENTORIES

26




STATEMENT OF CONDITION

FEDERAL RESERVE BANK OF PHILADELPHIA
End of year

(000’s omitted in dollar figures)

1956

1955

1954

Gold certificates......................................................

$1,051,274

$1,105,726

$1,220,496

Redemption fund—Fed. Res. notes.....................

63,053

61,738

58,928

Total gold certificate reserves.........................

$1,114,327

$1,167,464

$1,279,424

Fed. Res. notes of other Fed. Res. Banks...............

35,132

37,672

17,291

Other cash......................................................................

13,1 16

16,770

16,199
13,767

ASSETS

Gold certificate reserves:

Loans and securities:

Discounts and advances.......................................

7,975

26,928

Industrial loans.........................................................

439

642

612

United States Government securities...............

1,478,817

1,484,488

1,514,656

$1,529,035

Total loans and securities.................................

$1,487,231

$1,512,058

Due from foreign banks............................................

2

2

2

Uncollected items.........................................................

405,812

327,844

235,683

Bank premises................................................................

4,782

5,050

5,164

All other assets..............................................................

14,884

9,264

7,915

Total assets...........................................................

$3,075,286

$3,076,124

$3,090,713

$1,756,490

$1,839,889

$1,845,959

Member bank reserve accounts..........................

859,677

868,455

884,622

United States Government....................................

27,841

22,008

39,713

Foreign........................................................................

21,312

28,178

35,668

Other deposits..........................................................

16,865

15,458

14,134

LIABILITIES

Federal Reserve notes.................................................

Deposits:

Total deposits.......................................................

$

925,695

$

934,099

$

974,137

Deferred availability items.........................................

306,868

219,651

1 90,709

All other liabilities........................................................

800

751

685

Total liabilities....................................................

$2,989,853

$2,994,390

$3,01 1,490

$

$

CAPITAL ACCOUNTS

Capital paid in..............................................................

$

20,629

19,757

18,982

Surplus—Section 7......................................................

52,301

49,490

47,773

Surplus—Section 13b.................................................

4,489

4,489

4,489

Reserves for contingencies.........................................

8,014

7,998

7,979

Total liabilities and capital accounts.............

$3,075,286

$3,076,124

$3,090,713

Federal Reserve note liabilities combined ....

41.5%

42.1%

45.4%

Commitments to make industrial advances..........

$15

$41

$128

Ratio of gold certificate reserves to deposit and




27

EARNINGS AND EXPENSES

FEDERAL RESERVE BANK OF PHILADELPHIA

1956

1955

1954

U. S. Government securities..............................

$34,351

$24,212

$26,360

Other sources.........................................................

1,940

990

260

Total earnings....................................................

$36,291

$25,202

$26,620

Operating expenses* .........................................

$ 6,294

$ 6,170

$ 5,923

Cost of Federal Reserve currency....................

293

365

634

(000’s omitted)
Earnings from:

Net expenses:

Assessment for expenses of Board of

Governors.........................................................

383

306

311

Total net expenses............................................

$ 6,970

$ 6,841

$ 6,868

Current net earnings.................................................

$29,321

$18,361

$19,752

$

$

30

$

30

$

27

Additions to current net earnings:

Profits on sales of U. S. Government
securities (net)....................................................

$

Total additions.................................................

16
—

All other....................................................................

—

$

17

$

$

16

$

—

Deduction from current net earnings:
Reserves for contingencies.................................

—

All other....................................................................

Total deductions..............................................

$

Net additions or deductions ( — ).........................
Net earnings before payments to U. S. Treasury .

18
—

—

$

18

$

27

$

$

-18

$

3

$29,321

$18,343

$19,755

25,296

15,457

16,779

1,215

1,169

1,111

$ 2,811

$ 1,717

$ 1,865

17

Paid to U.S. Treasury (interest on

Federal Reserve notes).........................................
Dividends...........................................
Transferred to Surplus (Section 7).........................

’After deducting reimbursements received for certain fiscal agency and other expenses.

28



VOLUME OF OPERATIONS

FEDERAL RESERVE BANK OF PHILADELPHIA

1954

1956

1955

163,100
44,200
23,600
1,000

161,500
41,400
23,400
900

38,800
23,100
900

940
106
304,900
395,900
3
463

1,022
96
291,200
389,700
2
440

1,078
86
299,200
372,400
1
361

213

220

260

7,909
6,548
789

7,217
6,616
875

7,042
6,889
894

$60,927
6,970
346
190

$55,288
6,733
337
194

$51,376
6,313
339
172

30,793
49,524
2,049
44
11,731
1,619

27,926
44,346
1,903
51
6,926
1,424

25,512

8,035

8,531

1 1,036

467
521
93

497
461
98

495
477
89

Number of pieces (000’s omitted)

Collections:
Ordinary checks.........................................
Government checks (paper and card).............
Postal money orders (card)..............................
Non-cash items............................
Clearing operations in connection with direct
sendings and wire and group
clearing plans* *..........................

Transfers of funds . . ..................................................
Currency counted......................................................
Coins counted..............................................................
Discounts and advances to member banks ....
Depositary receipts for withheld taxes...............
Fiscal agency activities:
Marketable securities delivered or redeemed .
Savings bond transactions—
(Federal Reserve Bank and agents)
Issues (including re-issues)............................
Redemptions......................................................
Coupons redeemed (Government and agencies).

Dollar amounts (000's omitted)
Collections:
Ordinary checks...................................................
Government checks (paper and card).............
Postal money orders (card)...............................
Non-cash items......................................................
Clearing operations in connection with direct
sendings and wire and group
clearings plans * *.........................................
Transfers of funds............................
Currency counted.......................................................
Coins counted..............................................................
Discounts and advances to member banks ....
Depositary receipts for withheld taxes...............
Fiscal agency activities:
Marketable securities delivered or redeemed .
Savings bond transactions—

(Federal Reserve Bank and agents)
Issues (including re-issues)............................
Redemptions......................................................
Coupons redeemed (Government and agencies).

43,176
1,931
47
759
1,289

’Previous year not comparable
** Debit and credit items




29

MEMBER BANKS

THIRD FEDERAL RESERVE DISTRICT
Statement of Condition

(Dollar amounts in millions)
ASSETS
Loans and discounts............................................
U. S. Government securities.................................
Other securities............................................................
Cash assets..............................................................
Fixed assets.................................................................
Other assets............................................................
Total assets.........................................................
LIABILITIES AND CAPITAL ACCOUNTS
Deposits:
Individuals, partnerships and corporations—
Demand...............................................................
Time.....................................................................
U. S. Government.................................................
Other..........................................................................
Total deposits....................................................
Other liabilities............................................................
Capital accounts....................................................
Total liabilities and capital accounts..........

Dec. 31,
1956*

Change in year* *
Amount

Per cent

$4,1 13
2,368
787
2,102
123
39
$9,532

+ $271
- 151
24
+ 152
+
14
+
3

+ 7%
- 6
- 3
+ 8
+ 12
+ 9

+ $265

+

3%

$4,999
2,338
172
1,048
$8,557
122
853
$9,532

+ $33
+ 118
—
+ 101
+ $252
18
+
31
+ $265

+
+

1%
5
—
1 1
3%
13
4
3%

+
+
+
+

Earnings, Expenses, and Profits
Change in year* *
(Dollar amounts in millions)

1956*

Amount

Per cent

EARNINGS
On U. S. Government securities............................
On other securities........................................
On loans............................................................
Other earnings.......................................................

$ 54.9
19.0
206.5
51.3

-$

+
+

.6
.7
32.1
5.5

- 1%
- 4
+ 18
+ 12

Total earnings....................................................

$331.7

+ $36.3

+ 1 2%

$ 95.4
33.2
77.6

+ $ 7.7
+
7.5
+
9.5

+ 9%
+ 29
+ 14

EXPENSES
Salaries and wages............................................
Interest on deposits.................................................
Other expenses....................................................

Total current expenses.................................

$206.2

+ $24.7

+ 1 4%

Net current earnings before income taxes ....

$125.5

+ $1 1.6

+ 10%

Recoveries, profits on securities, etc.f. . .
Losses, charge-offsf f...............................................
Taxes on net income.......................................

$

6.8
39.6
35.9

-$ .9
+
5.0
+
2.1

- 1 2%
+ 14
+ 6

Net profits...............................................
Cash dividends declared....................................

$ 56.8
34.2

+ $ 3.6
+
1.6

+
+

‘Preliminary
* ‘Adjusted for mergers and changes in membership
flncludes transfers from valuation reserves
tflncludes transfers to valuation reserves

30




7%
5

FACTORY EMPLOYMENT ANO NOURS*
THIRD FEDERAL RESERVE DISTRICT
All Manufacturing

Employ­
ment

Durable Goods

Nondurable Goods

Weekly hrs. Employ­ Weekly hrs. Employ­ Weekly hrs
worked
worked
worked
ment
ment

1950...............................
1951...............................
1952...............................
1953...............................
1954...............................
1955...............................
1956...............................

1,190.2
1,258.2
1,266.5
1,316.4
1,202.3
1,197.2
1,203.9

40.0
40.3
40.4
40.2
38.9
39.9
40.1

512.7
583.4
603.4
652.1
573.6
566.9
573.0

40.9
41.8
41.7
41.2
39.5
40.8
41.3

677.5
674.8
663.1
664.3
628.7
630.3
630.9

39.4
39.2
39.4
39.3
38.4
39.3
39.2

1956 January..........................
February.......................
March............................
April...............................
May...............................
June...............................
July..................................
August..........................
September.....................
October..........................
November.....................
December.....................

1,211.3
1,212.0
1,206.7
1,205.8
1,199.2
1,201.0
1,139.9
1,209.7
1,219.0
1,216.3
1,210.1
1,215.9

40.2
40.2
40.0
40.0
39.9
40.0
39.9
40.1
40.2
40.1
40.3
40.5

577.7
575.3
572.6
574.0
570.5
571.3
518.2
572.2
579.2
587.4
586.8
590.8

41.2
41.2
41.1
41.4
41.3
41.2
41.4
40.7
41.6
41.4
41.4
42.0

633.6
636.7
634.1
631.8
628.7
629.7
621.7
637.5
639.8
628.9
623.3
625.1

39.4
39.4
39.2
39.0
38.8
39.0
38.9
39.6
39.1
39.1
39.3
39.3

‘Estimates of employment include production and nonproduction workers.
Average hours cover only production workers.

INCOME ANO PRICES
Factory Payrolls:
1949 = 100
Farm income—
Prices:
1947-1949 = 100

Factory Payrolls—Production Workers
Third Federal Reserve District

Income
from farm
marketings Consumer
prices in
N. J., Pa.,
Phila.t
and Del.*

All Manu­
facturing

Durable
goods

Nondurable
goods

1950...............................
1951...............................
1952...............................
1953...............................
1954...............................
1955...............................
1956...............................

1 1 1
127
131
145
129
138
145

112
140
150
174
147
157
169

1 10
116
117
122
115
123
127

93
1 1 1
1 10
108
97
97
101

102
112
114
115
116
115
117

January..........................
February .......................
March............................
April...............................
May...............................
June...............................
July..................................
August..........................
September.....................
October.......................
November.....................
December.....................

145
144
143
144
143
144
133
147
149
149
149
151

169
166
165
168
167
167
142
167
175
178
179
18

127
127
127
127
126
127
126
131
129
127
125
1 26

92
84
95
90
108
98
123
116
1 11
105
94
98

115
115
116
116
1 16
117
118
118
118
119
118
119

Sources:>: *U.S. Dept. of Agricultu e.




fU.S. Bijreau of Labe r Statistics.

31

DEPARTMENT STORE SALES
1947-49 = 100
(Adjusted for
seasonal variation)

Lan­
Third
Phila­
District delphia caster

Read­
ing

Scran­
Wilkeston
Trenton Barre

York

1950...............................
1951...............................
1952...............................
1953...............................
1954...............................
1955...............................
1956...............................

106
109
109
111
109
117
122

104
106
104
106
106
113
117

108
1 10
1 1 1
115
1 1 1
117
120

102
104
104
107
104
114
123

109
1 10
114
116
115
119
125

116
121
122
122
121
129
133

101
100
99
99
94
104
104

106
114
117
129
122
138
144

1 956 January..........................
February.......................
March.............................
April...............................
May...............................
June...............................
July..................................
August..........................
September.....................
October..........................
November.....................
December.....................

120
118
116
121
121
125
119
124
127
118
126
125

116
115
108
115
119
120
120
122
121
113
116
119

113
124
115
105
125
122
114
130
131
114
125
120

116
108
118
117
118
122
115
130
141
113
140
128

127
128
120
128
119
126
122
136
131
1 11
128
130

145
125
126
131
125
134
131
136
144
132
133
134

102
100
100
101
98
100
103
109
113
96
105
1 11

146
129
135
143
134
159
143
147
153
131
165
143

Trenton

WilkesBarre

York

DEPARTMENT STORE INVENTORIES
1947-49 = 100
(Adjusted for
seasonal variation)

Third Phila­
District delphia

Lan­
caster

Read­ Scran­
ton
ing

1950................................
1951................................
1952................................
1953................................
1954................................
1955................................
1956................................

108
127
113
119
116
123
133

107
125
1 10
114
112
119
132

108
124
114
121
125
130
140

106
131
114
122
116
120
131

114
134
116
121
129
135
145

105
127
113
116
108
121
118

1 10
126
109
113
101
115
115

112
128
119
132
126
137
146

1956 January..........................
February ........................
March.............................
April................................
May................................
June................................
July..................................
August...........................
September.....................
October..........................
November . . .
December.....................

132
131
130
131
129
132
132
135
135
135
136
137

136
129
127
131
127
127
129
1 34
135
132
1 34
137

133
137
137
140
140
141
143
146
140
140
1 37
144

130
137
129
126
121
119
122
121
125
142
149
148

134
138
139
142
145
151
151
151
146
146
144
149

104
108
109
111
114
125
123
123
126
128
125
119

1 14
117
113
114
113
114
119
117
114
114
1 15
115

146
142
138
144
139
151
148
154
148
144
151
152

32







The following publications of this Bank are available upon request:

BUSINESS REVIEW, issued monthly, includes articles on finan­
cial, business, and agricultural developments and a summary of
banking and business statistics.
ANNUAL REPORT, features articles on business and financial
subjects of current interest and includes statistical tables on busi­
ness in the District and on operations of the Bank.

/THE QUEST FOR STABILITY, a 54-page series of five essays
on major problems of monetary policy.
/ FUNDAMENTALS OF FEDERAL RESERVE POLICY, 40
pages; the script and illustrations used in a flannel board pre­
sentation of policy instruments and their influence on money.

/ EXERCISES IN THE DEBITS AND CREDITS OF BANK
RESERVES, 16 pages of T-accounts showing the essential nature
of transactions affecting bank reserves.

40 YEARS OF THE FEDERAL RESERVE ACT, a 19-page
booklet describing the evolution of the Federal Reserve Act from
1913 to 1953; includes a synopsis of major changes in the instru­
ments and organization of the Federal Reserve System.

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