View PDF

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

A

s ' a n n u l 51 ?!3 3 3 ttandfifiSSIgg
133 S33313111133 ?
B 1351311113i3 33 I
3 35111111I I ! 1 13 1 rrfrrfrriiiim
Siir
rFfrrrrFrrrFKKKRK
3 3! 1333 3 3 9 1 3 1 1

fF II [[[[rrrrrrrrrrrfrr
W 'V M M M

MEMBER BANKS
< 7e
^

Federal R eserve Bank of Chicago
<?
O F F IC E

or

January 30, 1951

T H E P R E S ID E N T

To the Member Banks:
This annual report c a rrie s with it the grateful
appreciation of the entire staff of the Federal Reserve
Bank of Chicago for the co-operation of the bankers of
the Seventh Federal Reserve D istrict, without whose help
and advice the accomplishments se t forth herein could
not have been attained.
Very truly yours

0

Issuing Government bonds

Economic Summary.....................................................................................................................

1

Federal Open Market Committee...........................................................................................

5

Departmental Activities
Services to Member Banks
Discounts and Other Credits.....................................................................................

6

Investments...................................................................................................................

7

Safekeeping of Securities...........................................................................................

9

Currency and Coin......................................................................................................

11

Collection of Checks and Other Items...................................................................

13

Communications ........................................................................................................

15

Economic Research .................................................................................................... 16
Examination of Banks................................................................................................ 17
Services to Treasury Department
Issuance of Government Securities.......................................................................... 19
Servicing of Government Securities........................................................................ 21
Redemption of Government Securities...................................................................

22

Collection of Federal Taxes....................................................................................... 23
Board of Governors Activities— Regulations V, W , and X ..................................... 24
.

. .

General Bank Activities

'

.rv

Personnel ..................................................................................................................... 25
Building Operations.................................................................................................. 27
Statement of Condition............................................................................................................... 28
Statement of Earnings and Expenses.........................................................................................

29

Earnings H istory .......................................................................................................................... 30
Directors and Officers................................................................................................................... 32

...

Proving and forwarding checks

SEVENTH DISTRICT ECONOMIC SUMMARY FOR 1950
Business Reaches New Peaks
In the year 1950, the Seventh Federal Reserve District as well as the nation reached
new peak levels of economic activity. During the first six months business extended its 1949
fall recovery into a period of prosperity, based heavily upon credit expansion. After midyear,
spectacular new peacetime records were set in almost all fields during the upsurge in
pre-mobilization spending by the private sector of the economy. Throughout most of 1950
the expansion of District production was steady and substantial, but demand for goods grew
even more rapidly, particularly after the start of the Korean war. By the end of the year
inflationary pressures had grown to serious proportions.
The basic factor in the 1950 expansion was the strong ground swell of consumer spend­
ing. Even before Korea, individuals were purchasing homes and consumer durable goods at
extremely high rates. The outbreak of open hostilities at the end of June, however, set off
a three-month consumer buying wave of unprecedented proportions in both soft and hard
goods lines. Retail sales declined somewhat from these levels thereafter, but the seasonal
rise in sales at year-end set a new record in dollar volume.
Throughout most of the year, consumers evidenced an increasing willingness to spend
their larger incomes, liquidate past savings, and go into debt in order to make desired pur­
chases while goods were available. Resultant pressures upon the retail price structure were
varying but strong, and were reinforced during the last months of the year as cost increases,
in the form of higher wage rates and material costs, were reflected at the retail level.
To restrain excessive consumer demand, credit controls were imposed during September
and October on the two major types of debt incurred by individuals— new residential mort­
gages and consumer instalment credit. The effects of these controls on Seventh District
business were difficult to measure in the first few months of their existence. For example,
prices of used automobiles dropped sharply, but production o f new autos did not decline aside
from the usual interruptions for model changeovers. In housing, on the other hand, selling
prices evidenced little immediate change, while new production, as measured by housing starts,
fell moderately from September through November. This latter decline, however, corresponds
in both timing and magnitude to the seasonal construction decline witnessed in each postwar
year except 1949, and probably is only incidentally due to the imposition of credit controls.
Mortgage credit restrictions will not exert the major portion of their influence until more
months have passed.

Business Spending and Industrial Output
Added to the growing volume of consumer spending during 1950 were rising levels
of business and governmental outlays. Seventh District concerns made plant and equipment
expenditures at unexpectedly high rates during the first months of the year. After Korea,

these programs were revised upward, and by the end of the year were absorbing all the
men and materials available. Durable goods industries, particularly, raised their capital expen­
ditures targets. Inventory accumulations during the first half of the year provided a reservoir
of finished goods which enabled business to meet the summer consumer buying wave with
relative ease. Since that time the total value of inventories has increased considerably, primarily
because of higher prices. As a result, many businesses have drawn substantially upon bank
credit in their efforts to acquire sufficient holdings of materials to support production schedules.
State and local government expenditures remained at seasonally high levels during all
of 1950, as both major and minor construction projects were pushed in the face of imminent
materials shortages. The projected formidable increase in Federal government spending, mean­
while, did not materialize in significant volume during 1950. The great rise in demand during
the year, therefore, came almost exclusively from private businesses and consumers.
To meet the ever growing private demand, industrial output within the Seventh District
expanded to record peacetime levels during the year. The automobile industry turned out
8 million vehicles, one-third more than in the previous peak year of 1949- Steel ingot pro­
duction in the area moved back up to "rated capacity’’ levels by midyear, and was maintained
at or near that volume in almost every week thereafter. Most o f the consumer durable goods
industries centered in the District likewise reached new output levels sometime during the final
half of the year. Nonetheless, by year-end the slowing rate of output expansion above previous
capacity ceilings was falling behind the rise in consumer and business demand, with huge
increases in Federal government purchases still to come.

Farm Income Below Last Year
Although the trend in farm receipts has been definitely upward since midyear, the
rise thus far has done no more than offset the decline in farm receipts during the preceding
six months. Cash receipts from farm marketings in 1950 for Seventh Federal Reserve District
farmers were about equal to the 1949 level, although the volume of marketings was slightly
smaller. A rising level of farm production expenses, however, reduced net farm incomes
slightly below the 1949 total, and farmers’ real incomes continued the decline started in 1947.
Farm product prices, already rising early in the year, increased sharply following the
outbreak of hostilities in Korea. As a result, the level of farm prices for the last six months
of 1950 averaged 12 per cent higher than for the first half of the year. By the end of the
year labor shortages were reported in some dairy sections and farm areas adjacent to booming in­
dustrial centers, with indications that this situation would become increasingly common in 1951.
Farm mortgage indebtedness showed a further moderate increase in 1950 while nonreal estate indebtedness (excluding loans guaranteed by the CCC) in the Seventh Federal
Reserve District increased sharply. This was due primarily to a large volume of livestock pur­
chases, and acquisitions of machinery and other production materials at higher prices.

Crop production was again at a high level, being exceeded only in 1948 and 1949- The
corn acreage allotment program plus a favorable soybean outlook resulted in much acreage
being diverted from corn to soybean, oat, and hay production. Soybean production was the
largest on record. Feed grain and hay harvests were large, but expanding livestock produc­
tion is expected to utilize the total 1950 output as well as part of the large carryover from
previous years. The number of pigs raised in 1950 was a peacetime record, and production of
dairy products and beef feeding operations continued at high levels.

Strong Bank Loan Expansion
Like all other elements of Seventh District business, commercial banking was strongly
influenced by the intensification of international conflicts. A moderate first-half rise of 175 mil­
lion in member bank loans grew to a 968 million increase by November 29, as business and
consumers drew heavily upon bank credit to finance their record rate of spending. By
November 29, total loans, total non-Government investments, total earning assets, and total
deposits at all Seventh District member banks stood at all time highs.
f

During the first half of 1950, loan expansion centered in rural banks, although Chicago
banks experienced much less than their usual seasonal decline in credit. After June, however,
commercial and industrial borrowings in major financial centers dominated the banking picture.
Member banks financed the loan expansion primarily by shifting out of Government securi­
ties. Holdings of Governments dropped 526 million through November 29, 1950, with all
but 76 million of the decline concentrated in the period after midyear.
Member bank net current earnings during the first half of 1950 totaled 76 million,
nearly 10 per cent higher than for a year earlier. W ith an expanded total of all earning assets,
sharply increased holdings of relatively high-yielding loans, and a somewhat higher pattern
of interest rates prevalent since September, even larger increases in net current earnings were
assured for the second half of the year.

FEDERAL RESERVE BANK OF CHICAGO

Participation in
SYSTEM OPEN MARKET ACCOUNT

FEDERAL OPEN MARKET COMMITTEE

The Federal Open Market Committee consists
of all the members of the Board of Governors of

out the objectives of the Federal Open Market
Committee.

the Federal Reserve System and the presidents
of five out of the twelve Federal Reserve banks.

The United States government securities shown

The president of the Federal Reserve Bank of

on the December 31, 1950 statement of the Fed­

Chicago serves on this Committee in alternate

eral Reserve Bank of Chicago represented this

years. Its primary activity is the direction of the

bank’s share in the portfolio of the System

operations o f the System Open Market Account,

Open

in which all the Federal Reserve banks participate.

the Account, on December 31, 1950, amounted

To the Federal Open Market Committee is
assigned the responsibility of deciding the amount
and character of government securities to be
bought or sold in the open market, together with

Market

Account.

Our

participation

in

to $3,142,824,000 par value of securities, rep­
resenting

15.16%

of

the

total

portfolio

of

$20,724,467,000. The former figure is comparable
with an amount of $2,817,903,000 par value of

the timing of such transactions, with a view to the

securities held on December 31, 1949, an increase

prevention of violent fluctuations in money rates

of $324,921,000. In addition to the increase in

and the maintenance of an orderly market for

amount, the composition of our participation

government securities. The Federal Reserve banks

changed substantially during the year, as will be

are required by law to co-operate in carrying

evident from the following analysis:

CHICAGO PARTICIPATION
SYSTEM OPEN MARKET ACCOUNT

B ills..............................
C of I’s..........................
N o tes............................
Bonds ..........................
Total ............................

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

Dec. 31, 1950
$ 188,646,000
353,976,000
1,899,577,000
700,625,000
$3,142,824,000

Dec. 31, 1949
$ 720,606,000
936,404,000
83,890,000
1,077,003,000
$2,817,903,000

Increase or
Decrease
—$ 531,960,000
582,428,000
+ 1,815,687,000
376,378,000
+ $ 324,921,000

It is apparent that the activities of the System

count of the pattern of Treasury financing during

Open Market Account during the year 1950 re­

the year, which tended toward the replacement

sulted in the disposal of large totals of Treasury

of maturing bonds and certificates of indebtedness

bonds, bills, and certificates of indebtedness, and

with new note issues, not all of which were in

the acquisition of an even greater amount of Trea­

immediate demand by holders of exchangeable

sury notes. This result came about largely on ac­

securities.

5

SERVICES TO MEMBER BANKS

DISCOUNTS AND OTHER CREDITS
The Federal Reserve banks are empowered to make loans to member banks and, under certain circumstances, to commercial firms.

GENERAL SUMMARY

At Chicago, member bank borrowings secured by
United States Government obligations increased during
1950. Also, one member bank rediscounted its eligible
customers’ notes aggregating $105,991. Member bank
borrowings from Detroit were less than 1949 amounts.

Seven commitments, totaling $239,000, were granted
to financing institutions in connection with working
capital loans to industrial enterprises under the provisions
of Section 13b of the Federal Reserve Act.

STATEMENT OF OPERATIONS

CHICAGO
1950

DOLLAR VALUE OF TRANSACTIONS
A d v a n ces

to

M em ber B anks

Rediscounts .............................................
Secured by U. S. Government Obliga­
tions ....................................................
Secured by Eligible Paper.....................

I n d u s t r ia l L o a n s

Commitments .........................................

$

105,991 $

DETROIT BRANCH
1950
1949

1949
38,029

$

— $

1,921,630,000
—

1,841,338,000
50,000

146,130,000
50,000

215,150,000
—

239,000

66,533

—

—

SERVICES TO MEMBER BANKS

INVESTMENTS
The Federal Reserve banks act as securities agents for member
banks. The purchase and sale of bonds by member banks, either

for their own account or for the account of customers, may be
effected through their Reserve bank.

GENERAL SUMMARY

banks and others by the Branch increased over 1949
amounts, while sales decreased.
At Chicago, the total amount of the securities handled
was more evenly divided between purchases and sales
than in the previous year, although buyers were still pre­
dominant in activity, if not in number.

The number of sales and purchase transactions pro­
cessed at Chicago during 1950 declined slightly from
1949 figures. On the other hand, Detroit showed an
increase in purchase transactions.
Par values involved in securities transactions showed
a sizeable increase at Chicago. Purchases for member
STATEMENT OF OPERATIONS

DETROIT BRANCH

CHICAGO
1950

1949

1950

1949

$323,552,900
26,911,125
50,000,000

$305,507,650
15,763,000

$28,943,439

$18,665,118

DOLLAR VALUE OF SECURITIES
P urch ases
U. S. G o v er n m e n ts

Member Banks and Others.........
Other F. R. Banks...........................
Dealers— Repurchase Agreement
O t h er

Member Banks and Others............

240,100

145,000

Total Purchases..................

$400,704,125

$321,415,650

$28,943,439

$18,665,118

U. S. G o v er n m e n ts
Member Banks and Others.........
Other F. R. Banks............................
Dealers— Repurchase Agreement

$289,649,570
26,829,150
50,000,000

$247,362,970
17,047,350

8,152,677

9,162,119

Member Banks and Others............

39,150

577,410

Total Sales............................

$366,517,870

$264,987,730

$ 8,152,677

$ 9,162,119

S a les

O th er

f

0

t

T " i -i | r r ~ r
i

|

100

1 1 1 1

|

1 1 1 1

|

200

1 1 1 1

|

1 1 1 1

|

300

1 1 1 1

|

L

1 1 1 "i

(—r n r

400

0

$ MILLIONS
7

30

* '

Processing securities for safekeeping—vault custody

SERVICES TO MEMBER BANKS

SAFEKEEPING OF SECURITIES
A free safekeeping service for U. S. Savings Bonds, Series E, is
extended to members of the armed forces and to the general
public.

The Federal Reserve banks act as depositories for securities
owned by member banks. Securities so held are completely
serviced as to collection of interest, redemptions, exchanges, etc.

GENERAL SUMMARY

During 1950, the Bank experienced considerable
activity in the safekeeping operation. Chicago’s piecesreceived volume for member banks was 34,000, or 18%,
larger than in 1949, while Detroit’s figures recorded an
increase of 13,000, or 66%. Likewise, the number of
pieces released topped 1949 amounts by 6,000, or 4%,
at Chicago and 9,000, or 53%, at Detroit.

CHICAGO

400

The number of coupons detached from securities by
Chicago during 1950 was 158,000 greater than in 1949;
Detroit’s figures on coupons detached showed an increase
of 11,000.

SAFEKEE
OF

SECURITI

The number of pieces of United States Savings Bonds
held in safekeeping as of December 31, 1950 declined
from 1949 year-end holdings: Chicago’s decrease was
40,000; Detroit’s, 8,000.
STATEMENT OF OPERATIONS

DETROIT

CHICAGO
1950

DETROIT BRANCH
1950

1949

1949

P iec es

Securities— Received ..................................
Released ..................................
Coupons Detached from Securities.........
D ollar V a lu e

of

226,354
182,498
1,031,985

192,416
176,272
873,652

32,964
25,531
164,989

19,800
16,679
153,449

$10,513,427,538
10,779,162,846
5,119,513,015
88,837,308

$10,152,780,248
9,196,352,276
5,385,248,323
84,143,991

$ 1,353,693,070
1,316,385,463
566,908,357
6,512,833

$ 1,206,608,026
1,039,569,259
529,600,750
4,515,654

44,991
41,411
64,563
61,882
332,600
297.600

40,227
40,899
73,058
57,702
352,172
318,071

52,591
—
60,766
—
289,769

P iec es

Securities— Received ..................................
Released ..................................
Held as of December 31. . ■
Coupons Detached from Securities.........
SAFEKEEPING— SAVINGS BONDS
P iec es

Received— U. S. Army Personnel...........
Civilian..................
Released— U. S. Army Personnel...........
Civilian..................
Held as of Dec. 31-U.S. Army Personnel
Civilian....................
D ollar V a l u e

of

—
56,423
—
56,225
—
297,944

—

P iec es

Received— U. S. Army Personnel...........
Civilian..................
Released— U. S. Army Personnel...........
Civilian..................
Held as of Dec. 31-U .S. Army Personnel
Civilian.....................

$

3,107,060
8,889,256
3,703,375
8,419,382
17,619,310
48.451,793

$

2,559,945
7,806,110
3,966,405
14,061,439
18,215,625
47,981,919

$

—
5,608,685
—
5,343,565
—
24,952,830

$

—
5,455,100
—
5,257,345
—
24,687,710

9

CASH OPERATIONS
VALUE

MILLIONS

mm

>

MILLIONS

55001----

VALUE

< C H 1C A G 0 >

MINTS
MINTS

SERVICES TO MEMBER BANKS

CURRENCY AND COIN
Currency and coin are routed into general circulation through
the Federal Reserve banks, which act as distributing agents
between the Treasury and the banking community. Commercial
banks desiring currency or coin may obtain it from this Bank
in exchange for their draft, a charge to their reserve account,

C

etc. Similarly, banks having excess cash may turn it in to this
Bank and obtain funds in return. Incoming cash is used either
to supplement new currency and coin in outgoing shipments,
or, if unfit for further circulation, is returned to the Treasury
for destruction.

GENERAL SUMMARY

Outgoing currency handled during 1950 exceeded the
record volumes reached during 1948, and established
all-time peaks both as to dollar amount and number of
pieces. The 1950 work-load on incoming currency ap­
proximated that carried in 1949. Outgoing payments of
coin, both loose and wrapped, were processed in moder­

ately increased amounts during 1950, while pieces and
amounts of coin received from banks decreased.
Net circulation of our Federal Reserve Notes amounted
to $4,559,960,000 on December 31, 1950. This figure
was $109,378,000 short of the all-time high circulation
recorded on December 24, 1947.

STATEMENT OF OPERATIONS
DETROIT BRANCH

CHICAGO
1950
PIECES
Currency
Outgoing .......................................................
Incom ing.........................................................
Forwarded for Redemption.........................

1950

1949

1949

562,888,492
556,958,260
209,091,771

530,888,131
558,377,758
227,775,957

139,320,548
129,657,164
45,618,970

138,959,206
140,140,943
41,762,180

Outgoing— Loose .........................................
W rap p ed ..................................

817,725,390
576,615,000

764,496,603
557,660,600

94,457,591
73,413,000

51,462,807
32,980,000

Total .........................................

Coin

1,394,340,390

1,322,157,203

167,870,591

84,442,807

Incoming— From B an ks..............................
From Mints ..............................
From Other F. R. Banks. . . .

1,171,841,129
173,650,000
8,000,000

1,282,457,814
45,100,000
5,000,000

118,618,352
65,850,000
1,447,000

110,937,421
4.500.000
3.545.000

DOLLAR VALUE OF PIECES
Currency
Outgoing .......................................................
Incoming.........................................................
Forwarded for Redemption.........................

$3,170,653,000
3,202,911,541
835,909,041

$2,984,250,500
3,207,451,014
847,900,014

$832,485,830
835,211,310
213,069,298

$867,504,156
933,667,769
175,634,606

Outgoing— L o o s e .........................................
Wrapped ..................................

$

53,416,151
58,199,750

$

$

6,031,125
5,464,250

$

4,422,446
2,236,700

Total .........................................

$

111,615,901

$ 105,315,631

$ 11,495,375

$

6,659,146

Incoming— From B an ks..............................
From Mints ..............................
From Other F. R. Banks. . . .

$

101,878,807
4.770.000
1.700.000

$

106,010,802
550.000
400.000

$ 10,156,482
2,271,000
596,000

$

9,316,433
117.000
275.000

73.260.000
74.066.000

61.144.000
59.910.000

15.720.000
15.428.000

9,740,000
9,188,020

$ 745,000,000
772,420,000

$ 632,320,000
611,380,000

$195,000,000
190,340,000

$117,000,000
115,200,000

Coin

FEDERAL RESERVE NOTE ISSUES— FEDERAL
RESERVE AGENT
Pieces
Received from Washington.........................
Issued to Bank................................................
Dollar Value of Pieces
Received from Washington.........................
Issued to Bank................................................

47,352,801
57,962,830

11

NUMBER OF CHECKS HANDLED

] Country
] Government

SERVICES TO MEMBER BANKS

COLLECTION OF CHECKS AND OTHER ITEMS
The Federal Reserve banks act as nation-wide clearing agents
for the routing of checks between commercial banks in much
the same manner as clearing house associations do in local com­
munities, and accept and pay checks drawn by the Federal

GENERAL SUMMARY

The number of checks processed during 1950 in­
creased 5% at Chicago and 10% at Detroit, while the dol­
lar value of all checks handled increased $11,163,459,000

Government. They also collect drafts, notes, bonds, coupons,
acceptances, etc., for member banks and deliver against payment
securities sold by member banks.

at Chicago and $3,165,036,000 at Detroit.
Preparation of outgoing cash letters on proof machines
effected a 25% reduction in letters dispatched at Chicago.

STATEMENT OF OPERATIONS
CHICAGO
1950

DETROIT BRANCH
1950

1949

1949

CHECKS
Number of Checks Handled
City ..................................................
C ountry...........................................
Government— P a p e r.....................
Card .....................

48.246.000
214,132,000
3,813,000
41.288.000

47,511,000
201,730,000
3,814,000
40,216-,000

14.863.000
29.504.000
1,080,000
5,124,000

14.764.000
25.491.000
989,000
4,646,000

Totals................................

307,479,000

293,271,000

50,571,000

45,890,000

Dollar Value of Checks Handled
City ..................................................
Country...........................................
Government— P a p e r.....................
Card .....................

$ 57,548,493,000
38,968,304,000
3,230,109,000
2,816,129,000

$50,956,061,000
34,009,768,000
3.725.385.000
2.708.362.000

$14,243,353,000
6,456,731,000
959.238.000
363.959.000

$12,302,979,000
5,361,938,000
884.793.000
308.535.000

Totals................................

$102,563,035,000

$91,399,576,000

$22,023,281,000

$18,858,245,000

DAILY AVERAGE NUMBER OF
CASH LETTERS DISPATCHED.........

4,067

5,439

548

552

NON-CASH ITEMS
Number of Transactions
City ..................................................
Country* .........................................
Coupon and Security....................

25,933
160,987
632,473

28,304
152,434
535,320

21,310
14,218
143,982

24,949
15,573
114,728

Totals................................

819,393

716,058

179,510

155,250

106,908

98,931

6,007

6,046

*lncludes direct sendings to other
Federal Reserve banks by our
member banks................................
Dollar Value of Transactions
City ..................................................
Country* .........................................
Coupon and Security.....................
Totals................................
* Includes direct sendings to other
Federal Reserve banks by our
member banks................................

$

65,040,000
380.618.000
994.624.000

$

1,440,282,000

$

289,251,000

98,851,000
364.684.000
869.692.000

$

29,377,000
33.778.000
65.540.000

$

32.716.000
35.297.000
47.996.000

$ 1,333,227,000

$

128,695,000

$

116,009,000

$

$

26,096,000

$

28,088,000

$

265,809,000

13

SERVICES TO MEMBER BANKS

COMMUNICATIONS
In addition to the usual mail and telephone facilities, the Bank
maintains the principal relay center of a leased wire system
having connections with the Board of Governors in Washington,
with the other Reserve banks and branches, with the Treasury

Department, with the Reconstruction Finance Corporation, and
with the Commodity Credit Corporation. Telegrams effecting
transfers of funds for members, Fiscal Agency operations, and
other banking transactions are processed.

GENERAL SUMMARY

The Chicago relay office of the Federal Reserve
Leased Wires System processed over 1,100,000 telegrams
during 1950, an increase of 11% over the 1949 volume.
Messages handled by the Codes and Telegrams Division
STATEMENT OF OPERATIONS

at Chicago increased 8% over 1949 figures to a total of
188,000.
Mail Department activities increased during the year
both at Chicago and at Detroit. Also, increases in trans­
fers of funds were registered at both offices.

CHICAGO
1950

DETROIT BRANCH
1950
1949

1949

TELEGRAMS PROCESSED

C o m m e r c ia l W

ires

Received ................................
Dispatched ..............................
MAIL HANDLED
Number of Pieces Received.........
Number of Pieces Dispatched,
Mail and Express.....................
TRANSFER OF FUNDS
Number of Transfers...............
Dollar V alue........................

80,157
70,514

75,040
62,707

24,984
23,847

22,358
20,070

23,004
13,554

22,025
14,480

1,199
1,261

1,224
1,520

2,144,288

1,801,559

294,302

2 8 2 ,9 1 2

4,095,381

3,104,486

345,655

335,991

205,425
$74,658,796,000

196,428
$65,419,048,000

39,876
$22,986,784,000

34,213
$16,627,317,000

MAIL

TELEGRAMS

TRANSFER OF FUNDS

Jr
r —

(

n

ires

Received ................................
Dispatched ............................

■i
X

L ea sed W

ECE'VE D

DEI ‘ROM
1946

1947

1948

1949

1950

15

SERVICES TO MEMBER BANKS

ECONOMIC RESEARCH
The Bank gathers economic information and makes analytical
studies which serve as the basis for the formulation and execution of monetary and credit policies. These data and studies are
made available not only to the officers and directors of this Bank
and to the Board of Governors, but also, in large part, to
member banks and business firms in the Seventh Federal Reserve

District. This informational service is a very important activity
of the Research Department. Members of the research staff
maintain continuing close contact with leaders of banking, industry, agriculture, and trade in order to obtain firsthand information on banking and business in this Reserve District,

GENERAL SUMMARY
In its studies during 1950 the Research De­
partment

emphasized

the

impact of

interna­

tional developments and partial mobilization upon
Seventh District banking, industry, trade, and agri­
culture, with the rapid pace of events necessitating
close attention to the changing outlook. Special
studies of a pioneering nature conducted during
the year covered such topics as the presentation
of Federal receipts and expenditures on a cash
and consolidated basis, the bearing of present

than commercial banks; almost 23,000 registration
statements under Regulation W were processed.
Summary reports of statistical data were pre­
pared and sent to the Board of Governors. Greater
use of collected data by reporting banks and firms
was given marked attention. Altogether, 38 peri­
odic statistical summaries were sent to a total
mailing list of over 30,000, with almost half a
million individual reports distributed.

commitments on future expenditures in the Fed­

One thousand Seventh District member banks

eral budget, and the significance of velocity of

received their own operating results recorded in

circulation o f the money supply.

our booklet M em ber B ank O perating Ratios. The

The Department answered a mounting num­
ber of inquiries for business and financial infor­
mation received by mail, phone, or in person from
banks, business firms, and others. The Research
officers and staff made about 150 addresses at
banking, business, and agricultural meetings dur­
ing the year and participated in many conferences
concerned with national and District economic
conditions.

Agricultural Letter, issued weekly during the year,
reached a circulation of approximately 6,000.
The number of copies published regularly of
Business Conditions has now risen to over 15,000,
of which 4,000 are sold at cost in bulk subscrip­
tions to a number of member banks which redis­
tribute them to their customers. Some issues of
Business Conditions were devoted entirely to a
single important subject: February— the Federal

A great amount of important data again was

budget; April— postwar Seventh District banking;

collected through the cooperation of Seventh Dis­

September— old-age pension problems; October—

trict reporting banks and business firms. Reports

credit, defense, and inflation; November —- the

on retail trade were received from firms repre­

farm outlook. These special issues created a heavy

senting about 2,500 stores; reports on instalment

demand for extra copies totaling 24,000 beyond

loans were received from about 500 firms other

the usual distribution.

16

SERVICES TO MEMBER BANKS

EXAMINATION OF BANKS
An examination of the state member banks in the District is
made each calendar year by the Federal Reserve Bank. Such
examination includes trust departments and is usually made
jointly with a state banking department. A pre-membership
examination is made of state banks applying for admittance

St

to the Federal Reserve System. Investigations in connection with
applications to organize national banks are also carried out.
Various reports and applications required by law to be rendered
by member banks are reviewed and analyzed.

GENERAL SUMMARY

Seven banks, 4 national and 3 state, were admitted to
membership in 1950. The examination work during the
year proceeded along the same general lines as hereto­
fore. In the field of trust department examinations,
efforts to widen the scope of examinations were made
with a view of bringing to light any possible weakness

in administration of trusts.
In addition to completing 597 examinations, 9 investi­
gations were made by the staff of the Bank Examination
Department in connection with applications to organize
national banks, and 1 investigation was made in connec­
tion with an application to organize a state bank.

STATEMENT OF OPERATIONS

NUMBER OF EXAMINATIONS MADE
Regular..............................................................................................................
Membership .....................................................................................................
Trust Departments..........................................................................................
Follow-up Investigations................................................................................
Special ..............................................................................................................
NUMBER OF MEMBER BANKS IN 7th F. R. DISTRICT
N a t io n a l B a n k s

As of January 1........................................................................................
Additions (See Note A ) ...............................................................
Withdrawals (See Note B ) ..........................................................
As of December 31................................................................................

St a t e B a n k s

As of January 1......................................................................................
Additions (See Note A )...............................................................
Withdrawals (See Note B )..........................................................
As of December 31................................................................................

1950

1949

441
5
146
3
2

442

565
4
3
566

567

440
3
1
442

2

145

2

0

1

3
565
441
2

3
440

NOTE A— ADDITIONS TO MEMBERSHIP DURING 1950
N a tio n al B anks

Park National Bank of Chicago, Chicago, Illinois
Union National Bank of Chicago, Chicago, Illinois
National Bank of Chenoa, Chenoa, Illinois
Peoples National Bank of Bay City, Bay City, Michigan
St a te B anks

Bank of Silvis, Silvis, Illinois
State Bank of Whiting, Whiting, Indiana
Farmers State Bank of Breckenridge, Breckenridge, Michigan
NOTE B— WITHDRAWALS DURING 1950
N a tio n a l B anks

3— voluntary liquidations (Assets and liabilities assumed by other banks)
St a te B anks

1— conversion

17

S £ R /

H

e s

i

//

m'U ion
p, ecE;

S A V ,N % \ ° h N ° s
iSc; thro*gh
15SU lIiS a g e n t s

PI
/ /

/

O

w #*

L l 'ONs

/ / / / c /•
/

e '/&

° e r *t

J

° o l l a r Va l u b

* //A
S si
cv / ,
C* G ,
a * n * o / r
'9 S o

SERVICES TO TREASURY DEPARTMENT

ISSUANCE OF GOVERNMENT SECURITIES
Although the Treasury Department issues some of its securities
— both marketable and savings issues— directly, by far the major
portion is issued through the Federal Reserve banks, acting as
fiscal agents of the United States. Information regarding new
Treasury offerings, either for cash or in exchange, is distributed
by the Federal Reserve banks through commercial banks to the
general public, and subscriptions from investors of all types are

received for processing. The Federal Reserve banks service agents
for the sale of U. S. Savings Bonds, Series E, by supplying
blank bonds, receiving payment for bonds issued, and maintain­
ing accounts. Detailed sales reports showing geographical and
investor-type distribution of new issues of Government securities
are supplied to the Treasury Department.

GENERAL SUMMARY

The number of applications for Treasury Savings
Notes processed by Chicago in 1950 dropped consider­
ably from the previous year, and the dollar value of sub­
scriptions received for savings issues declined accordingly.
This decrease in Notes was the result of higher yields
available on Treasury Bills and Certificates, as well as
the change in Treasury policy regarding the charging
of accrued interest on Savings Notes.

The increase in the dollar value of subscriptions re­
ceived at Chicago for marketable issues is due to a sub­
stantial increase in tenders for Treasury Bills.
The maturity value of Series E Savings Bonds sold by
issuing agents during 1950 decreased; however, this
decrease was in line with national experience and was
due largely to a substantial decline in sales of the larger
denominations.

STATEMENT OF OPERATIONS
CHICAGO
1950

DETROIT BRANCH
1949

1950

1949

SUBSCRIPTIONS AND APPLICATIONS
F o rm s R eceived

Marketable Issues.........................................

11,300

11,200

480

560

Savings Issues ..............................................

120,300

147,800

10,700

11,930

N um ber

of

S u b sc r ib er s I nvolved

Marketable Issues.........................................

20,700

21,800

1,280

1,300

Savings Issues ..............................................

498,700

486,000

232,500

199,200

Marketable Issues.........................................

$12,543,416,000

$10,646,252,000

$578,622,000

$593,173,000

Savings Issues ..............................................

856,073,000

1,292,065,000

441,340,700

342,851,000

Marketable Issues.........................................

$ 9,925,942,000

$ 8,091,315,000

$578,572,000

$593,173,000

Savings Issues ..............................................

856,073,000

1,292,065,000

441,431,100

342,301,000

D o lla r V a l u e — S u b sc r ip t io n s
R eceived

D ollar V a l u e — S u b sc r ip t io n s
A llo tted

P iec es D elivered

on

O rigin al I ssue

Marketable Issues.........................................

111.500

112,400

8,500

7,830

Savings Issues ..............................................

699.500

712,000

260,620

220,550

SALES B Y ISSUING AGENTS
S e r ies E S avings B onds

Maturity V a lu e ..............................................
Number of Pieces.........................................

$

824,480,000

$194,580,000

$197,054,000

6,572,500

6,873,000

3,328,500

3,165,950

3,039

3,107

361

364

681,396,000

$

NUMBER OF QUALIFIED ISSUING
AGENTS AS OF DECEMBER 3 1 ..................

19

Posting control accounts of Government bond operations

SERVICES TO TREASURY DEPARTMENT

SERVICING OF GOVERNMENT SECURITIES
Servicing of the public debt after it is outstanding in the hands
of the general public is one of the functions of Federal Reserve
banks in their capacity as fiscal agents of the United States. The
principal services performed are: making denominational and

other exchanges, handling telegraphic transfers of Government
securities, maintaining a general stock of all Treasury issues out­
standing with the public, reissuing savings bonds, maintaining the
Treasury Tax and Loan Accounts, and other miscellaneous services.

GENERAL SUMMARY

During 1950, the number of pieces issued and related
maturity value of marketable issues increased over 1949
volume, both at Chicago and at Detroit. This increased
volume resulted primarily from exceptional activity pre­
vailing in the Government bond market in connection
with Treasury Department refinancing in August and
December.
STATEMENT OF OPERATIONS

The number of payments handled in the Treasury
Tax and Loan Account in 1950 was considerably greater
than that functioned in 1949: Chicago’s payments in­
creased 51%; Detroit’s, 27%. These increases are ac­
counted for mainly by the increased number of withheld
tax entries arising from the daily reporting requirement
instituted in 1950 for depositaries for federal taxes.

CHICAGO
1950
1949

DETROIT BRANCH
1950
1949

M A R K E T A B L E ISSU ES
D e n o m in a t io n a l and O t h e r
E xc h a n g es
5 7,200

6 2 ,8 0 0
$ 1 ,3 8 2 ,5 8 2 ,0 0 0

Pieces R e c e iv e d .............................................
Maturity V a l u e .............................................

$ 1 ,6 1 9 ,0 2 6 ,0 0 0

$

830
2 9 ,4 6 8 ,9 0 0

1,160
$ 2 7 ,6 7 2 ,0 0 0

Pieces Is s u e d .................................................
Maturity V a l u e .............................................

8 6 ,7 0 0

8 5 ,7 0 0

$ 1 ,6 1 3 ,7 0 2 ,0 0 0

$ 1 ,3 7 5 ,7 0 8 ,0 0 0

$

2,740
2 9 ,4 9 4 ,9 0 0

$ 2 7 ,3 5 4 ,0 0 0

8 0 ,7 0 0
$ 5 ,9 4 6 ,9 8 7 ,0 0 0

57,300
$ 3 ,8 9 5 ,3 6 7 ,0 0 0

$

4 ,9 9 0
8 3 7 ,4 5 5 ,5 0 0

3,560
$ 3 7 3 ,6 0 7 ,0 0 0

2,300

T eleg ra ph ic T r a n sfe r s (C P D )
Pieces R e c e iv e d .............................................
Maturity V a l u e .............................................
Pieces Is s u e d .................................................

6 1 ,9 0 0

4 8 ,8 0 0

8,200

7,200

Maturity V a l u e ............................................

$ 6 ,2 3 4 ,5 7 8 ,3 5 0

$ 5 ,3 7 9 ,6 0 2 ,0 0 0

$ 1 ,0 0 4 ,7 4 3 ,5 0 0

$ 6 6 2 ,1 0 6 ,0 0 0

$

9 2 ,7 1 0
1 4 ,1 4 7 ,4 0 0

9 7 ,1 9 0
$ 1 5 ,349,000

$

9 2 ,4 1 0
13,647,800

94 ,9 6 0
$ 1 2 ,456,000

$

423
23,425

SA V IN G S B O N D S
R eissu e s
Pieces R e c e iv e d .............................................
Maturity V a l u e .............................................

$

6 9 1 ,4 0 0
2 3 7 ,5 4 1 ,6 0 0

$

2 0 8 ,5 1 2 ,0 0 0

Pieces Is s u e d .................................................
Maturity Value ............................................

$

5 8 9 ,5 0 0
2 2 3 ,0 5 2 ,8 0 0

$

6 1 6 ,0 0 0
2 0 2 ,0 3 4 ,0 0 0

$

7 0 ,6 0 0
6 ,6 5 9 ,4 0 0

$

R eissu es — T r ea su r y C laim C ases
Pieces Is s u e d .................................................
Maturity V a l u e .............................................

6 2 7 ,5 0 0

3 6 ,1 0 0 *
3 ,3 3 2 ,0 0 0 *

—
—

D E P O S IT A R Y B A N K S — T R E A S U R Y
T A X A N D LOAN ACCOUNT
Number o f Payments H andled...............
Depositary Balances as o f December 31

2 9 7 ,5 0 0
$

3 6 6 ,6 8 2 ,0 0 0

197,000
$

4 2 5 ,6 2 3 ,0 0 0

2 7 ,1 4 0
$

21,360

1 3 0 ,9 0 2 ,5 0 0

$ 1 3 8 ,4 8 3 ,0 0 0

Number of Qualified Depositaries as of
December 31 .............................................

1,690

1,696

138

134

Pieces Received from Treasury D ept.. .

8 ,5 8 2 ,6 0 0

8 ,6 9 1 ,0 0 0

3 ,9 1 8 ,4 0 0

3 ,5 8 7 ,4 0 0

Pieces Prepared for D elivery....................

8 ,0 7 0 ,6 0 0

8 ,7 9 8 ,0 0 0

3 ,8 6 9 ,9 0 0

3 ,595,800

C U S T O D Y O F FISC A L S T O C K

*New Activity
July 1, 1949

21

SERVICES TO TREASURY DEPARTMENT

REDEMPTION OF GOVERNMENT SECURITIES
Federal Reserve banks, as fiscal agents of the United States, re­
deem Government securities at maturity, or prior to maturity in
the case of securities eligible for redemption in that manner.
Savings bonds are redeemed either directly from the holders

GENERAL SUMMARY

The number of pieces of bearer securities redeemed
was greater in 1950 than in the preceding year: Chicago’s
increase amounted to 15,000, or 9%, while Detroit’s
was 4,000, or 34%. However, the number of registered
securities processed declined because of the very sub­

thereof or through commercial banks designated as paying
agents. Redeemed securities are canceled and forwarded to the
Treasury Department.

stantial reduction in 1950 redemption operations for
Treasury Savings Notes.
The total number of United States Savings Bonds
Series A-E redeemed during the current year increased
over 1949 volumes: Chicago processed 807,000 more;
Detroit handled an increase of 55,000.

STATEMENT OF OPERATIONS
DETROIT BRANCH

CHICAGO
1950

1950

1949

1949

TREASURY ISSUES— INCLUDING SAV­
INGS NOTES AND ARMED FORCES
LEAVE BONDS
Number of Pieces
Bearer Securities .....................................

197,800

182,200

17,790

13,230

Registered Securities ..............................

92,100

105,850

19,620

25,440

Bearer Securities .....................................

$7,814,244,000

$7,876,693,000

$1,411,317,300

$1,000,622,000

Registered Securities ..............................

374,594,500

545,774,000

193,441,900

100,857,000

Maturity Value

SAVINGS BONDS
^Number of Pieces
11,186,000

10,372,000

4,113,200

4,057,450

By FRB

— A -E.......................

314,600

321.000

47,000

47,100

By FRB

— F-G .......................

209,900

186.000

19,900

19,400

7,194,200

6,919,000

2,947,300

2,898,000

425,400

433,000

84,400

76,300

By Paying Agents— A -E.......................

^Number of Pieces $25 E Bonds Included
in Above .......................................................
Number of Pieces Matured Bonds
Included in Above.......................................
Redemption Value
$ 679,944,200

$ 564,660,000

— A -E.......................

78,533,900

85,268,000

8,974,500

8,777,500

— F-G .......................

184.723.800

160.320.000

17,578,800

16,913,000

Matured Bonds Included in Above. . .

146.098.800

150.426.000

25,690,200

20,885,000

2,412

2,408

201

200

By Paying Agents— A -E .......................
By FRB
By FRB

$

174,476,800

$

165,168,000

NUMBER OF QUALIFIED PAYING
AGENTS AS OF DECEMBER 3 1 ..............
U. S. GOVERNMENT AND OTHER
GOVERNMENTAL AGENCY COUPONS
1,609,300

Number of Pieces.........................................
Dollar V a lu e ................................................

22

$

90,448,600

1,735,000
$

99,069,000

179,800

213,900
$

18,461,300

$

9,141,000

SERVICES TO TREASURY DEPARTMENT

COLLECTION OF FEDERAL TAXES
The Bank acts as agent of the Treasury Department, assisting
the Bureau of Internal Revenue in the collection of funds repre-

senting income and social security taxes withheld from employees,
and employers contributions, under Federal Tax regulations.

GENERAL SUMMARY
Effective January 1, 1950, the Treasury Depart­

tary bank. Commercial banks desiring to act as

ment amended the regulations covering the col­
lection o f withheld taxes to include taxes collected

depositaries for Federal taxes are required to re­
qualify under the revised Treasury regulations.

under the Federal Insurance Contributions Act.
A punched card depositary receipt covering both
classes of taxes was substituted for the paper
receipt formerly used for withheld taxes only.

Tax deposits received by the Bank are summar­
ized below, although the figures are not strictly
comparable because the 1949 figures represent
withheld income taxes only, while the 1950 figures

Under the new procedure, employers have the
option of making tax deposits directly with the
Federal Reserve bank or with a qualified deposi-

cover both withheld income taxes and social
security taxes:

TAX DEPOSITS RECEIVED
1950

Withheld Income and
Social Security Taxes
Receipts ........................................................
Dollar V alue...............................................

1949

Withheld Income
Taxes

8 0 9 ,0 0 0

6 5 2 ,0 0 0

...$ 1 ,9 9 3 ,0 0 0 ,0 0 0

$ 1 ,4 2 3 ,0 0 0 ,0 0 0

Collection of Federal taxes during 1950 in­
volved administering a "dual” system: operations

ceipts outstanding were received from collectors

pertaining to the old "1949” system had to be
completed, and, at the same time, procedures for
the new "1 9 5 0 ” system had to be initiated. During
the early months of 1950, 38,000 paper receipt
copies aggregating $94,200,000 were received
from depositary banks in conclusion of the "1 949”
system. Throughout the year, 163,000 paper re-

receipt copies, leaving a residue o f only 237 of

☆

o f internal revenue and matched against our paper
those receipt copies unmatched at the close of the
year under the old system. Under the new sys­
tem,

the

Bank

received

a total

of

771,000

punched card receipts representing tax deposits
of $1,899,000,000.
☆

☆

23

BOARD OF GOVERNORS ACTIVITIES

REGULATIONS V. W, AND X
throughout its district to investigate applications for loan guar­
antees and to ascertain whether or not Executive orders and
related directives are being followed.

The Board of Governors of the Federal Reserve System works
through the Reserve banks in its regulation of loans guaranteed
for defense production, consumer credit, and residential real
estate credit. Each Reserve bank carries on specified activities

☆

☆

☆
necessary to the defense effort, are eligible to ob­

Regulation V — Loans Guaranteed for
Defense Production

tain guarantees of stated percentages of such loans
under the Regulation V program. To date, rela­
tively few applications for guarantees have been
received. It is anticipated, however, that as the
rearmament program increases in volume, the num­
ber and amount of V loan guarantees will also
increase, and may possibly exceed the very sub­
stantial volume of such guarantees issued during
W orld W ar II.

Regulation V was revised effective September
27, 1950. This Regulation is based upon and issued
pursuant to the Defense Production Act of 1950,
and the President’s Executive Order No. 10161
of September 9, 1950. Banks and other lending
institutions making loans to contractors holding
prime or sub-contracts calling for procurement

☆

☆

16, 1950 the Regulation was amended, tightening
down payment requirements and shortening maxi­
mum maturities on installment credits of all listed
articles except home improvement. W ithin 10 days
of the effective date of the Regulation, registration
statements were made available to all registrants
in this District, and, by the end of 1950, the major

Regulation W — Consumer Credit
Regulation W was reinstated under the autho­
rity of the Defense Production Act of 1950 on
September 18, 1950. Primarily it is intended to
assist in curtailing consumer credit which, prior to
the Regulation, had been increasing excessively and
contributing materially to inflationary pressures.

portion of registrants had complied with the Regu­

Its secondary purpose is to siphon from civilian
channels vital materials necessary to defense pro­
duction. Despite the Regulation, the upward
trend of prices continued so that effective October

☆

☆

lation in filing statements with the Bank. An in­
vestigation program was instituted promptly and
is functioning smoothly.

☆

☆

Regulation X — Residential Real Estate Credit

family units. Registration of those affected by the

Regulation X was issued under the authority

Regulation has not been required, although regis­

of the Defense Production Act of 1950, and be­
came effective October 12, 1950. At this time, the
Regulation covers both urban and rural residences
serving and designed to include not more than two-

tration may be required at the discretion of the

24

Board of Governors of the Federal Reserve System.
At the request o f the Board of Governors, no in­
vestigation of registrants has as yet been made.

G EN ERAL BA N K A C TIVITIES

PERSONNEL
General personnel activities of the Bank are handled by a central
personnel department. This work includes: recruiting, selecting,
hiring, transferring, promoting, counseling, and terminating
services; preparing payrolls and sundry payments; making with­
holding tax, retirement, and other deductions; making status
changes; maintaining individual earnings, retirement system,

social security, salary deduction, attendance, and other personnel
records; administering wage, sick leave, and vacation policies,
the Job Evaluation Plan, education, training, employee-welfare
and hospital-surgical insurance programs; preparing the em­
ployees’ monthly magazine; maintaining the Medical Division,
recreational and rental libraries, and employees’ lounges.

GENERAL SUMMARY

The number of employees at Chicago declined moder­
ately during the first eight months of 1950, and reached
a low of 2,127 on September 8. In the latter part of the
year, this trend was sharply reversed because an increase
in the volume of work and the addition of two new
departments made it necessary to increase our work force.
At the Branch, employee turnover during the first half
of the year was relatively small; however, during the last
half of 1950 the rate of turnover increased substantially.
Total personnel assigned to Chicago was 4% lower on
December 31, 1950 than at the close of the previous
year. This decrease would not have been registered if a
STATEMENT OF OPERATIONS

general tightening of the employment market had not
prevented the Bank from completely meeting its person­
nel requirements. The Bank has resumed the practice
of employing high school students on a part-time basis
in order to provide additional workers. These studentemployees will be employed full-time after they are
graduated.
All changes necessary to effect the integration, on Jan­
uary 1, 1951, of Federal Old Age Insurance with the
Bank’s retirement system were made during the latter
part of 1950.
CHICAGO
1950
1949

DETROIT BRANCH
1950
1949

NUMBER OF EMPLOYEES
As of December 31............................
New Employees................................
Separations.........................................

2,216
469
557

2,304
395
539

385
141
136

380
78
100

MEDICAL
Physical Examinations......................
Requests for Medical Care...............

931
31,205

833
33,337

113
2,999

73
3,158

CAFETERIA (See Note Below)
Number of Meals Served, Including
Officers Dining Room...................
Daily Average Number of Meals
Served In Cafeteria—Noon Only.

529,608

730,301

1,503

1,859

Branch cafeteria closed
August 13, 1949 because
of building construction.

NOTE: 5-day week adopted effective August 6, 1949.

AA

EMPLOYEES
CH ICAGO

DETROIT

1946
1947 r*
194 9[~ *
1950

GENERAL BANK ACTIVITIES

BUILDING OPERATIONS
The operation of the Bank’s own building, and such outside
rented space as is required, involves attending routinely to the
services of air, water, heat, light and power, sewage disposal,
vertical transportation, building and furniture repairs and main-

tenance, and decorating and cleaning. Occasionally, attention
is directed to real estate valuation and rate procedure, and, in
connection with major alterations, to contract negotiation, archi­
tecture, engineering, and decorating.

GENERAL SUMMARY
Operations carried on during 1950 were in
furtherance of a renovation program started after
World W ar II, aimed at modernizing the Bank

building. Since this program has now been prac­
tically fulfilled, a review is furnished of its more
important projects.

Projects Completed
1. Air-conditioned the entire building.
2. Installed standard doors in Vault No. 4 ; increased cash vault facili­
ties 25 % .
3. Enlarged truck concourse 66-2/3% .
4. Converted electric power and all electrical equipment to alternating
current.
5. Modernized electric elevator system.
6. Installed under-floor electric outlet network for concentrations of
business machines.
7. Installed modern wood and glass office partitions on two floors.
8. Replaced police alarm system.
9. Replaced all electric master-control wall clocks.
10. Made major departmental moves involving floors 13, 12, 11, 10, 9,
8, and 3.
11. Added oil burner alternate to coal burner boilers.
12. Modernized rest rooms.
13- Relocated laundry on 14th floor.

Projects Near Completion
1. Increase electrical capacity from 2 to 8 watts per square foot.
2. Relocate Research Department on 5th and 6th floors.
3. Make pilot installation of fluorescent "troffer-lighting” system in Re­
search Department.
A survey of the Bank building is under way in
connection with the civil defense program to de­
termine feasible defense measures, zones of rela­
tive safety, escape routes, and availability of
elemental civil defense tools.

basement. Because of the national defense pro­
gram, these construction projects will be postponed
until conditions are more favorable for building.

Consideration has been given to the addition

Alterations of the Detroit Branch building and
the construction of an eight-story addition thereto,
which were contracted for on August 19, 1950,
will be completed, it is anticipated, late in 1951.
Approximately 118,000 square feet of additional
space will be provided. Vault capacity will be more

of four stories to the Bank building and the con­
struction o f additional vault space below the third

than doubled when construction on the addition
to the cash and security vault is completed.

In anticipation of future space needs, a com­
mitment has been made to rent 5,000 square feet
of outside space on or before July 1, 1951.

27

ASSETS
G

old

C e r t if ic a t e s O

$ 4 , 1 6 0 ,1 8 1 , 8 2 4 .2 3

$ 4 , 3 7 5 ,0 0 7 , 0 1 1 .5 3

o t e s ......................................................

1 0 0 , 2 7 6 ,2 6 5 .0 0

8 2 , 9 5 6 ,7 8 7 . 5 0

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

3 3 ,6 3 3 ,0 4 0 .6 7

2 9 , 7 9 9 ,9 3 8 . 2 9

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

$ 4 , 2 9 4 ,0 9 1 , 1 2 9 .9 0

$ 4 , 4 8 7 ,7 6 3 , 7 3 7 .3 2

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

1 0 5 ,9 9 0 .9 5

9 , 7 5 1 ,8 2 9 . 4 0

and

D

ue fro m

R e d e m p t io n F u n d — F e d e r a l R e s e r v e N
O

ther

Ca

sh

T o t a l C ash
B il l s D

is c o u n t e d

U . S. T

D ec. 31, 1 9 4 9

r e a s u r y ..............

n

H and

D ec. 31, 1 9 5 0

T o t a l B i l l s ....................................................................................................................

$

1 0 5 ,9 9 0 .9 5

$

9 , 7 5 1 ,8 2 9 . 4 0

U . S . G o v e r n m e n t S e c u r i t i e s ...........................................................................................

3 ,1 4 2 ,8 2 4 , 0 0 0 .0 0

2 , 8 1 7 ,9 0 3 , 0 0 0 .0 0

T o t a l B il l s an d S e c u r itie s .....................................................................................

$ 3 ,1 4 2 ,9 2 9 ,9 9 0 .9 5

$ 2 ,8 2 7 , 6 5 4 , 8 2 9 . 4 0

5 , 0 6 2 ,0 2 1 .9 9

3 , 5 1 4 ,1 9 4 . 1 0

k s ...............................................................

1 7 ,5 4 2 ,5 0 0 .0 0

1 8 , 4 6 4 ,5 0 0 . 0 0

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

7 1 6 , 7 5 0 ,2 1 0 . 9 7

4 3 5 , 8 4 8 ,9 9 2 . 8 8

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

1 8 ,4 0 6 ,1 4 1 .0 4

1 5 , 3 6 8 ,0 0 9 . 1 1

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

$ 8 , 1 9 4 ,7 8 1 , 9 9 4 .8 5

$ 7 , 7 8 8 ,6 1 4 , 2 6 2 .8 1

$ 4 ,5 5 9 ,9 5 9 , 7 7 5 .0 0

$ 4 ,5 0 1 ,2 8 0 ,0 5 0 .0 0

2 ,7 9 7 ,8 2 8 , 1 3 0 .4 6

2 ,6 2 7 ,0 7 2 ,4 6 4 .2 0

B a n k P r e m is e s

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

F ed era l R eserv e N
U n c o ll ec t ed It
O ther A s s

e t s

otes o f

e m s

O ther B a n

LIABILITIES
F ed era l R eserv e N
D

o t e s in

A c t u a l C i r c u l a t i o n ........................................ .

e p o s it s :

M e m b e r B a n k — R e s e rv e A c c o u n t ................................................................................
U . S. T re a s u re r— G e n e r a l A c c o u n t ...............................................................................

1 0 2 , 3 0 5 ,0 7 8 . 7 4

5 6 ,2 6 9 ,0 4 0 . 1 9

O th e r D e p o s i t s ........................................................................................................................

1 3 1 ,6 4 3 ,0 8 3 .8 1

1 1 7 , 4 8 1 ,4 4 9 . 5 7

$ 3 ,0 3 1 ,7 7 6 ,2 9 3 .0 1

$ 2 ,8 0 0 ,8 2 2 ,9 5 3 .9 6

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

4 8 2 , 6 9 0 ,6 5 8 . 8 5

3 7 0 ,5 1 5 ,1 5 2 . 6 1

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

8 5 5 ,9 0 0 .3 1

1 , 6 7 8 ,4 0 5 . 1 3

T o t a l L i a b i l i t i e s ......................................................................................................

$ 8 ,0 7 5 ,2 8 2 , 6 2 7 .1 7

$ 7 ,6 7 4 ,2 9 6 , 5 6 1 . 7 0

$

$

T o t a l D e p o s i t s ......................................................................................................... .
D

eferred

O

th er

A v a il a b il it y I t

L ia

b il it ie s

e m s

CAPITAL

ACCOUNTS

C a p i t a l P a id I n .......................................................................................................................... .
S u r p l u s (S e c t io n 7 ) ..................................................................................................................
S u r p l u s (S e c t io n 1 3 b )

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

O t h e r C a p it a l A c c o u n t s

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

T o ta l L ia b ilitie s an d C a p ita l A c c o u n ts ...................................................... .

2 8 ,6 9 8 ,3 0 0 .0 0

2 6 , 8 8 5 ,3 5 0 . 0 0

7 5 ,3 4 5 ,4 4 3 .1 7

7 2 , 0 2 8 ,8 2 1 . 7 3

1 ,4 2 9 ,3 8 3 .7 8

1 , 4 2 9 ,3 8 3 . 7 8

1 4 , 0 2 6 ,2 4 0 .7 3

1 3 , 9 7 4 ,1 4 5 . 6 0

$ 8 ,1 9 4 ,7 8 1 ,9 9 4 .8 5

$ 7 , 7 8 8 ,6 1 4 , 2 6 2 .8 1

6

1950
$41,659,635.28

E a r n in g s ..............................

1949
$47,051,999-33

10,064,335.34
473,900.00
1,371,612.24
$11,909,847.58
$29,749,787.70

10,040,239.13
446,200.00
1,121,901.80
$11,608,340.93
$35,443,658.40

$ 5,131,653.36
7,986.71
$ 5,139,640.07

$ 4,268,571.03
131,944.37
$ 4,400,515.40

$34,889,427.77

$39,844,173.80

$ 56,411.31
$34,833,016.46

$ 535,630.69
$39,308,543.11
5,884,000.00
28,681,442.18
$ 4,743,100.93
1,556,096.77
$ 3,187,004.16

Ex p e n s e s :

Operating Expenses...................
Assessment for Board of Governors...................................
Cost of Federal Reserve Currency...........................................
Total Current Expenses.....................................
Current Net Earnings...........................................................................
A dditions

to

C u r r e n t N e t E a r n in g s :

Profit on Sales of U. S. Government Securities.............................................
Other Additions ...............................................................................................
Total Additions to Current Net Earnings.........................................
Total Current Net Earnings and Additions to Current Net
Earnings.............................................................................................
D ed u c t io n s F ro m C u r r e n t N e t E a r n in g s :

Total Deductions from Current Net Earnings................................
Net Earnings.....................................................................................................
Transferred to Reserves for Contingencies......................................................
Paid United States Treasury (Interest on Federal Reserve N otes).............
Net Earnings After Reserves and Payments to United States Treasury. . . .
Dividends Paid .................................................................................................
Transferred to Surplus (Section 7 ) .................................................................

—

29,845,729.40
$ 4,987,287.06
1,670,665.62
$ 3,316,621.44

FEDERAL RESERVE BANK OF CHICAGO

SURPLUS ACCOUNT (Section 7)
YEA R ENDED DECEMBER 3 1 , 1950, AND YEA R ENDED DECEMBER 3 1 , 1949

Su r plu s J a n u a r y
T r a n sfer r ed

to

1

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

—As A b o v e ...........................................................................
31........................................................................................

Su r p l u s

Su r plu s D ec em b er

1950
$72,028,821.73
3,316,621.44
$75,345,443.17

1949
$68,841,817.57
3,187,004.16
$72,028,821.73

29

FEDERAL RESERVE BANK OF CHICAG'

STATEMENT

OF

EARNINGS

AND

EXPENSES

NOVEM BER 16, 1914 (Date of Incorporation) TO DECEMBER 31 , 1950

YEAR

CURRENT
EARNINGS

1 9 1 4 -1 5 ..............
1916 ................
1917 ..............
1918 ..............
1919 ..............
1920 ..............
1921 ..............
1922 ................
1923 ..............
1924 ..............
1925 ..............
1926 ..............
1927 ..............
1928 ..............
1929 ..............
1930 ..............
1931 ..............
1932 ..............
1933 ..............
1934 ..............
1935 ..............
1936 ..............
1937 ..............
1938 ..............
1939 ..............
1940 ..............
1941 ..............
1942 ..............
1943 ..............
1944 ..............
1945 ..............
1946 ..............
1947 ..............
1948 ..............
1949 ..............
1950 ..............

$

Totals..................

$416,742,512

268,885
665,937
2,083,164
8,481,747
12,012,078
30,303,218
20,382,170
6,748,863
6,511,359
5,202,169
5,424,663
6,567,043
6,167,352
8,936,418
9,889,451
4,834,153
4,143,601
5,613,671
6,764,554
8,152,371
6,177,615
4,423,476
4,575,583
3,954,026
4,254,602
4,831,217
5,089,095
6,590,508
8,738,325
14,204,919
20,076,761
21,235,190
21,318,967
43,407,727
47,051,999
41,659,635

CURRENT
EXPENSES
$

245,584
237,731
584,069
1,478,310
2,450,244
4,164,176
4,734,100
4,080,057
4,373,024
3,946,436
3,744,039
3,824,437
3,887,058
3,696,679
4,092,369
3,805,117
3,524,401
3,432,693
3,854,009
3,551,838
3,697,540
3,453,380
3,199,558
3,318,002
3,316,352
3,471,164
4,227,534
5,177,403
5,850,233
6,757,377
6,551,011
7,789,344
8,843,097
10,843,513
11,608,341
11,909,847

$163,720,067

CURRENT
NET
EARNINGS
$

23,301
428,206
1,499,095
7,003,437
9,561,834
26,139,042
15,648,070
2,668,806
2,138,335
1,255,733
1,680,624
2,742,606
2,280,294
5,239,739
5,797,082
1,029,036
619,200
2,180,978
2,910,545
4,600,533
2,480,075
970,096
1,376,025
636,024
938,250
1,360,053
861,561
1,413,105
2,888,092
7,447,542
13,525,750
13,445,846
12,475,870
32,564,214
35,443,658
29,749,788

$253,022,445

DEDUCTIONS
ADDITIONS
FROM
TO
CURRENT NET CURRENT NET
EARNINGS
EARNINGS
$

—
—
2,127
—
—
69,307
4,826
572,019
41,903
27,857
12,646
13,098
13,061
11,833
8,050
298,510
263,967
874,264
373,245
1,611,990
951,304
1,526,060
811,188
1,637,141
521,313
1,530,021
163,061
386,898
4,137,334
333,895
422,552
243,136
447,858
1,115,619
4,400,515
5,139,640

$28,016,238

$

3,210
25,000
269,343
198,356
985,630
332,600
1,147,779
1,835,610
1,001,883
374,467
571,997
501,781
365,710
488,143
380,467
273,218
273,272
812,517
1,493,297
4,808,032
2,660,159
1,563,978
499,607
1,182,207
476,646
282,100
157
602,842
1,266,073

NET
EARNINGS
( S e e d is p o s itio n ,
n ex t page)

517,991
328,214
154,505
5,961,421
6,419,630
56,411

20,091
403,206
1,231,879
6,805,081
8,576,204
25,875,749
14,505,117
1,405,215
1,178,355
909,123
1,121,273
2,253,923
1,927,645
4,763,429
5,424,665
1,054,328
609,895
2,242,725
1,790,493
1,404,491
771,220
932,178
1,687,606
1,090,958
982,917
2,607,974
1,024,465
1,197,161
5,759,353
7,831,437
13,430,311
13,360,768
12,769,223
27,718,412
33,424,543
34,833,017

$38,114,253

$242,924,430

—

$

PAID U. S. TREASURY

TRANSFERRED TO SURPLUS
Net
Earnings
^ ear
1914-15
1916.
1917.
1918.
1919.
1920.
1921.
1922.
1923.
1924.
1925.
1926.
1927.
1928.
1929.
1930.
1931.
1932.
1933.
1934.
1935.
1936.
1937.
1938.
1939.
1940.
1941.
1942.
1943.
1944.
1945.
1946.
1947.
1948.
1949.
1950.

Dividends
Paid

( S e e d e t a i l,
p re v io u s p a g e )

.$

.
.

.

.
.
.

20,091
403,206
1,231,879
6,805,081
8,576,204
25,875,749
14,505,117
1,405,215
1,178,355
909,123
1,121,273
2,253,923
1,927,645
4,763,429
5,424,665
1,054,328
609,895
2,242,725
1,790,493
1,404,491
771,220
932,178
1,687,606
1,090,958
982,917
2,607,974
1,024,465
1,197,161
5,759,353
7,831,437
13,430,311
13,360,768
12,769,223
27,718,412
33,424,543
34,833,017

Totals ,..$ 2 4 8 ,7 5 0 ,2 1 2
NOTES:

—
361,319
862,259
604,635
700,807
792,769
853,785
876,203
904,371
909,123
934,016
985,959
1,029,990
1,099,761
1,170,363
1,211,418
1,170,633
1,029,933
858,127
761,334
753,583
725,553
763,115
791,007
819,532
826,919
896,766
955,508
993,684
1,115,422
1,215,381
1,311,792
1,380,234
1,472,491
1,556,097
1,670,666

—
—
215,799
6,200,446
7,875,397
14,688,500
2,075,323
— 657,289
27,398
—
187,257
1,267,964
897,655
3,663,668
3,651,464
—
157,090
—
560,738
121,279
932,366
669,479

$34,364,555

$90,685,880

$

Totals . .$242,924,430
ADJUSTMENTS—
— 19,748,517
19,748,517
1,417,702
— 3,207,763
7,615,843

Section 7
$

Section 13b
—
—

Franchise
Tax

Section
13b

Interest on
F. R. Notes
Outstanding

$

$

Balance
to
Profit
& Loss

Other
Transfers

—

—

—

20,091
41,887
— 61,978

—

—

—

—

—

—

—

—

—

$

10,394,480
11,576,009
1,186,301
246,586
—
—
—

—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—

—
—
—
—
—
—
—

—
—
—
—
—
—
—
—

—

—

—

—

—

—

—

—

—

—

—
—
—
—
—
—

—
—

$

—
—
215,799

—

—
602,838

—
—

$

—
—

$

—
—

—

■

—

—

—

—
—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—
—
—

—

153,241
883,370
279,031
158,265
1,770,131
100,484
237,632
4,765,619
6,710,302
12,212,414
12,048,976
1,139,227
2,624,684
3,187,004
3,316,622
$

26,322
—
25,030
12,767
206
—
—
—
—
—
—
—
—
—
—
—
—
11,681

1,091,513
—

—

—

—

—

—

—

—

—

—

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$25,313,526

17,637
28,354
28,354
20,714
5,120
10,924
27,215
4,021
50
5,713
2,516
—
427
—
—
—

—
—
—
—
—
—
—
—
-—
—
—
10,249,335
23,621,237
28,681,442
29,845,729

$151,045

$92,397,743

$

—

$

-19,748,517 ( l a )

(1 )
(1 )
(2 )
(3 )
(4 )

19,748,517(lb )
1,417,702 (2 )
3,207,763 (3 )
7,615,843 (4 )
$34,364,555

$75,345,443

$1,429,383

$25,313,526

$151,045

$92,397,743

$19,748,517

( 1 ) F. D. I. C. Stock:
(a) 1934— Purchase.
(b ) 1947— Retirement (proceeds to Treasury).
Payments from U. S. Treasury, Section 13b loans, Years 1934 and 1935.
Transferred from Surplus to Reserves for Contingencies, Years 1940, 1942, and 1943.
Transferred to Surplus (Section 7) from Reserves for Contingencies, Year 1945.

31

—

DIRECTORS

AND

OFFICERS

DIRECTORS
FRANKLIN J. LUNDING, Chairman, Executive Committee
Jewel Tea Co., Inc.
Barrington, Illinois
Chairman
JOHN S. COLEMAN, President
Burroughs Adding Machine Company
Detroit, Michigan
Deputy Chairman
WILLIAM C. HEATH, President
A. O. Smith Corporation
Milwaukee, Wisconsin

WALTER J. CUMMINGS, Chairman
Continental Illinois National Bank
and Trust Company of Chicago
Chicago, Illinois
HORACE S. FRENCH, President
The Manufacturers National Bank of Chicago
Chicago, Illinois
WILLIAM J. GREDE, President
Grede Foundries, Inc.
Milwaukee, Wisconsin

VIVIAN W . JOHNSON, President
First National Bank
Cedar Falls, Iowa
ALLAN B. KLINE, President
American Farm Bureau Federation
Chicago, Illinois

NICHOLAS H. NOYES, Chairman, Finance Committee
Eli Lilly and Company
Indianapolis, Indiana

OFFICERS
C. S. YOUNG, President
E. C. HARRIS, Vint Vice President

J. K. LANGUM, Vice President

H. J. CHALFONT, Vice President

A. L. OLSON, Vice President

N. B. DAWES, Vice President

A. T. SIHLER, Vice President

W . R. DIERCKS, Vice President

W . W . TURNER, Vice President
A. M. BLACK, Cashier

W . A. HOPKINS, Assistant Vice President

L. G. MEYER, Assistant Vice President

L. H. JONES, Assistant Vice President

I. J. PETERSEN, Assistant Vice President

M. A. LIES, Assistant Vice President

F. L. PURRINGTON, Assistant Vice President

F. A. LINDSTEN, Assistant Vice President

H. F. WILSON, Assistant V ice President

G. W . MITCHELL, Senior Economist

C. P. VAN ZANTE, C hief Examiner

E. D. BRISTOW, Assistant Cashier

H. J. NEWMAN, Assistant Cashier

P. C. CARROLL, Assistant Cashier

C. M. SALTNES, Assistant Cashier

H. H. CONKLIN, Assistant Cashier

E. F. SHIREY, Assistant Cashier

E. A. HEATH, Assistant Cashier

B. L. SMYTH, Assistant Cashier

C. T. LAIBLY, Assistant Cashier

R. A. SWANEY, Assistant Cashier

P. C. HODGE, General Counsel

J. J. ENDRES, Auditor

O. C. BARTON, Assistant Counsel

A. M. GUSTAVSON, Assistant Auditor

DIRECTORS

AND

OFFICERS

MEMBER OF FEDERAL ADVISORY COUNCIL
EDWARD E. BROWN, Chairman of the Board
The First National Bank of Chicago
Chicago, Illinois

MEMBERS OF INDUSTRIAL ADVISORY COMMITTEE
EDWARD J. DOYLE, President
Commonwealth Edison Co.
Chicago, Illinois

EDWARD M. KERWIN, Vice President
E. J. Brach and Sons
Chicago, Illinois

WALTER HARNISCHFEGER, President
Harnischfeger Corporation
Milwaukee, Wisconsin

G. BARRET M OXLEY, President
Kiefer-Stewart Company
Indianapolis, Indiana
JAMES L. PALMER, President
Marshall Field & Company
Chicago, Illinois

DETROIT BRANCH

DIRECTORS
WILLIAM M. DAY, Vice President & General Manager
Michigan Bell Telephone Company
Detroit, Michigan

JOHN A. HANNAH, President
Michigan State College
East Lansing, Michigan

CHARLES T. FISHER, JR., President
National Bank of Detroit
Detroit, Michigan

HOWARD P. PARSHALL, President
Commonwealth Bank
Detroit, Michigan

JOHN A. STEWART, Vice President and Cashier
Second National Bank and Trust Company of Saginaw
Saginaw, Michigan

OF FI CERS
H. J. CHALFONT, V ice President and Manager

R. W . BLOOMFIELD, Assistant Vice President

H. L. DIEHL, Cashier

A. J. WIEGANDT, Assistant Cashier

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