The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
1977 ANNUAL REPORT Federal Reserve Bank of Chicago Cover: Detail from bronze doorway, main Federal Reserve Bank of Chicago entrance, Table of contents "Letter to stockholders" 4 The source of Federal Reserve earnings 6 Reserve Bank profits and the management challenge 8 The challenge and the strategy 8 Managing for the 70s and beyond 10 Summary of operations 11 Statement of condition 12 Statement of earnings 13 1977 directors 14 1977 officers 15 ANNUAL REPORT Federal Reserve Bank of Chicago To our stockholders: Current earnings for 1977 climbed to $1,085,843,394, an increase of 7.3 percent over the previous year. The increase resulted from renewed demand for loans from the bank, growth in the bank's securities portfolio, and a modest rise in market interest rates. Income after current expenses was $1,006,473,635, an increase of 7.7 percent. Thus, current net earnings in 1977 amounted to 92.7 percent of total revenues, up slightly from 92.4 percent in 1976. This improvement in the bank's performance was achieved primarily through continued vigorous efforts on the part of management to control costs and improve productivity. Consequently, even though volume increased in most of the bank's major activities, operating expenses for 1977 were up only 2 percent from the previous year. Primarily as a result of unfavorable developments in foreign exchange markets, the rise in net earnings after all additions and deductions was somewhat less than the rise in current earnings — about 4.5 percent. Nonetheless, with net earnings of $971,509,141 for 1977, the bank was able to pay its stockholders a dividend for the 62nd consecutive year, or, in other words, in every year since the second full year of the bank's operation. The earnings outlook for the coming year is, as always, dependent largely upon development in the U.S. economy. Stockholders can rest assured, however, that bank management will continue to seek opportunities to improve. Wouldn't any bank be proud to send its stockholders a letter describing such extraordinary performance? Operating expenses total only 7.3 percent of operating income compared with an 87.6 percent ratio for all insured commercial banks in the United States for 1976! Net earnings amount to almost 90 percent of total current earnings versusa12.4 percent profit margin for all banks! That kind of earnings performance means remarkable rates of return as well. All banks in 1976 earned (before taxes) about 1 percent on assets and 14 percent on capital. The figures reported in that letter represent a 4.6 percent return on assets and an incredible 619 percent return on capital! Could such performance be possible? The figures cited are real. They are derived directly from the 1977 condition and earnings statements of the Federal Reserve Bank of Chicago (pages 12 and 13 of this report). Year after year Chicago Fed financial statements indicate "performance" ratios that would be the envy of any "for-profit" enterprise. But while the figures are authentic they are not a true indication of this institution's performance. Profits are only incidental to, not an objective of, Reserve Bank operations. Unfortunately, however, the average citizen finds it difficult to regard "profits" which for the Chicago Fed approach the billion dollar level as incidental, unimportant or insignificant. As a result, Reserve Bank profitability is a source of confusion for many and, quite frankly, a source of irritation for a few. This confusion is especially unfortunate today in light of current debate concerning the structure and operation of the Federal Reserve System. Of particular significance in this regard are questions being raised concerning: (1) the central bank's independence, which in large part rests on its ability to finance operations from its own earnings, and (2) the use of such earnings to pay interest on member bank reserves. Obviously, misunderstanding concerning Reserve Bank profits inhibits constructive debate of such questions. Therefore, Federal Reserve profitability has been chosen as the focus of this year's annual report of the Federal Reserve Bankof Chicago. In particular,two questions underlie the discussion: first, what is the source of Reserve Bank earnings, and second, if profits are not a managerial objective, what are the determining factors of management decisions? The source of Federal Reserve earnings At first glance Federal Reserve financial statements are strikingly similar to those of a private commercial bank. Although one would have to admit to some major disparities in relative proportions (such as capital to assets, loans to deposits and investment income to total income), most asset, liability and income items are thesame. For both commercial and Federal Reserve Banks, their principal assets are loans and securities. The liability side of their balance sheets both show "customer" deposits—member bank reserve accounts in the case of the Fed. And earnings statements for both show that income is derived primarily from interest on security holdings and loans. Given this overall similarity it is easy to assume that Federal Reserve profits are generated in the same way as commercial bank earnings. But the truth of the matter is that the processes are exactly opposite. A commercial bank uses its deposit liabilities to acquire assets. By lending or investing its customers' funds, a bank generates income. But to assume that the Federal Reserve uses member bank deposits to make loans or buy U.S. Government securities which in turn generate its income carries the parallel too far. Whereas from the commercial bank's point of view an increase in its assets results from an increase in its liabilities, Federal Reserve liabilities arise from increases in its assets. And whereas a commercial bank goal is to increase assets in order to increase earnings, the Fed at times deliberately takes action to decrease its assets. The process through which the acquisition of assets by a Federal Reserve Bank creates its liabilities is illustrated by T-accounts depicting a Reserve Bank loan to a member bank. Reserve Bank assets increase by the amount of the loan, and the proceeds of the loan are simply added, or credited, to the member bank's reserve deposit account. (See Illustration 1.) Clearly, the asset increase—a loan—gives rise to an increase in reserve deposits—a liability. The purchase of securities by the Fed from a securities dealer has the same effect although the process is less direct. The Fed "pays" for the security by simply crediting the reserve account of the dealer's bank, and the bank in turn credits the demand deposit account of its customer, the securities dealer. (See Illustration 2.) For the receiving commercial bank a deposit received as a result of this transaction is no different from any other net increase in its deposits: it now has additional funds to lend or invest. But for the commercial banking system as a whole, the transaction is quite distinctive. Had one party to the securities purchase not been the central bank, the increase in deposits at the seller's bank would have been precisely offset by a decrease in deposits at the buyer's bank. Illustration 1 When a member bank borrows $ 1 0 0 , 0 0 0 from the Fed Federal Reserve Bank 6 Loans to member banks + 100 Member bank reserves + 100 Member bank Reserve balance at F.R. Bank + 100 Loan payable to F.R. Bank + 100 A c l o s e r l o o k at R e s e r v e B a n k e a r n i n g s : t h e 1 9 7 7 f i n a n c i a l s t a t e m e n t s of t h e F e d e r a l R e s e r v e B a n k of C h i c a g o Year-to-year changes in the major asset, liability and income items on Reserve Bank financial statements reflect developments in the economy and actions undertaken in support of System monetary objectives. By purchasing securities and making loans to member banks, the Reserve Banks increase member bank reserve deposits and provide a base for expansion in the public's holdings of currency and commercial bank deposits, in accord with the economy's growth needs. During 1977 this Bank's loans to member banks increased by $34.5 million and its share of securities held in the System Open Market Account increased by $1.4 billion, as System monetary policy actions continued to be aimed at providing reserves to the banking system sufficient to finance moderate expansion in the nation's economy with a minimum of inflation. The increase in Reserve Bank credit outstanding was almost entirely absorbed, however, by the payout of currency (Federal Reserve notes outstanding) in response to public demands. Although District member bank deposits increased last year, member bank reserves declined because of a reduction in reserve requirements and shifts of deposits to banks and deposit classes with lower reserve requirements. Increased interest income from this larger portfolio of loans and securities as well as somewhat higher market interest rates more than offset this Bank's share of losses on sales of securities and foreign exchange losses entailed in currency stabilization operations. Net earnings rose by almost $42 million, producing a record payment to the U.S. Treasury. T h u s , a l t h o u g h it c e r t a i n l y appears o t h e r w i s e , t h e Fed d o e s not earn its p r o f i t s b y u s i n g t h e f u n d s of c o m m e r c i a l b a n k s to b u y s e c u r i t i e s a n d m a k e loans. 1 T o a c q u i r e assets—to p u r c h a s e s e c u r i t i e s or o t h e r w i s e e x t e n d c r e d i t — t h e Federal Reserve d o e s n o t n e e d to have a s i n g l e p e n n y of d e p o s i t s . T h e very essence of c e n t r a l b a n k i n g is that increases in c e n t r a l bank assets p r o v i d e new f u n d s to t h e b a n k i n g s y s t e m ; the increases create reserves w h i c h in t u r n s u p p o r t g r o w t h in c o m m e r c i a l bank d e p o s i t s and c r e d i t . A n d this is p r e c i s e l y t h e p u r pose for w h i c h t h e Federal Reserve increases—or d e c r e a s e s — i t s assets: n o t to p r o d u c e Reserve Bank inc o m e b u t rather to affect the f l o w of m o n e y a n d c r e d i t through the nation's banking s y s t e m . Reserve Bank profits, a l t h o u g h s u b s t a n tial, are i n c i d e n t a l . Assets are a c q u i r e d by t h e Federal Reserve w i t h o u t regard to the i m p a c t t h e a c t i o n w i l l have o n its p r o f i t a n d loss s t a t e m e n t but rather w i t h an eye o n l y to t h e i m p a c t t h e a c t i o n w i l l have o n t h e c o m m e r c i a l b a n k i n g system a n d t h r o u g h it t h e U.S. e c o n o m y at large—ultimately on growth, production, e m p l o y m e n t , a n d t h e value of t h e d o l l a r . 'The mistaken notion that the Federal Reserve uses the funds member banks are legally required to deposit with it to earn huge profits underlies some arguments that the Fed should use its profits to pay interest on member bank reserve accounts. While the above points out that this line of reasoning is not correct, the aim here is not to suggest that the payment of interest on reserves is inappropriate or unwarranted. The payment of interest on reserves would tend to compensate for the fact that the legal requirement, and therefore, the burden of membership, does not fall equitably on all banks. Illustration 2 W h e n t h e Fed b u y s $ 1 0 0 , 0 0 0 of U.S. G o v e r n m e n t s e c u r i t i e s Federal Reserve Bank U.S. Government securities +100 Member bank reserves +100 Member bank Reserve balance at F.R. Bank +100 Securities dealer's deposit account +100 7 Reserve Bank profits and the management challenge To say that Reserve Banks face any kind of management challenge may sound strange. After all, what could be simpler than managing a very profitable not-for-profit institution? Since profits are not an objective, management is not expected to maximize them. And management hardly has to worry about financial resources since Reserve Bank revenues far exceed needs in terms of the cost of operations. Consider, for example, that current earnings of the Chicago Fed for 1977 exceeded $1 billion while current expenses were less than $80 million. In other words, during 1977 the Chicago Fed used only about $1 out of every $14 of its income to cover the cost of operations, and it has been many decades since management has had to worry whether revenues would fall short of expenses. Furthermore, no precise legal constraints apply to how much or how little a Reserve Bank can spend on operations. Current law and regulations place only two specific fiscal requirements on a Reserve Bank: it must pay an annual dividend to member bank stockholders (by statute equal to 6 percent of paid-in capital), and it must set aside an amount sufficient to equalize its capital surplus account with its paidin capital account. Whatever remains of Reserve Bank earnings after these small payments and after expenses is turned over to the U.S. Treasury each year, technically as interest on Federal Reserve notes. With no challenge to maximize profits, no fears that earnings will not cover expenses, and no precise legal restrictions on spending, Reserve Bank management would appear to have little need or incentive to apply management methods similar to those that are successful in private business. But, in reality, the absence of a profit discipline does not mean that the Fed has no "bottom line," that there are no constraints. Clearly, Reserve Bank m a n a g e m e n t is a c c o u n t a b l e — r e sponsible for completing the tasks assigned the central bank in the most effective and most efficient manner possible. The challenge and the strategy 8 The Reserve Bank management task is actually complicated by the fact that objectives cannot be stated in terms such as profit targets, growth rates, sales or returns on investments. Were such objectives relevant, management would be provided with explicit guides for both allocating resources and measuring performance. Since profits, investment return and similar measures cannot be applied to a Reserve Bank, what factors can be used to answer the questions that face management of any organization? How should resources be allocated? How much should be spent on one Reserve Bank operation versus another? Should m o r e — o r less—be spent on all simultaneously? Is a significant capital investment warranted—such as would be entailed in automating an activity or establishing regional offices to process checks? What level of service should the Fed provide in any of its various activities—that is, in providing a facility for check collection, in issuing currency and coin, in serving as the government's bank, in supervising and regulating commercial bank activities, and so forth? To an extent, answers to such questions may be obvious, even though based more often on subjective judgments than objective measures. Take service levels within the Fed's cash issuing function, for example. The Federal Reserve has responsibility for assuring that the public has at all times enough currency and coin to conduct its business free of interruptions caused by shortages of cash. Reserve Banks, therefore, transport cash to member banks in whatever a m o u n t s and denominations they request. But many levels of service are possible—especially from the standpoint of the Federal Reserve's capacity to "foot the bill." Comparable service could be provided to nonmember banks. Deliveries could be made to any banking office, including all branches, or only to selected offices. Currency shipments could be scheduled on demand or on a restricted basis, such as weekly or monthly. Coin could be provided in wrappers or in bulk form. A cash dispensing service could even be provided directly to the general public. What level of service is appropriate for the Federal Reserve to provide within its cash issuing function? In each of the Fed's various areas of responsibility, how much of the public's resources should be spent by the Fed in providing service to the public? An examination of current Reserve Bank activities would reveal that a general principle that guides management in answering this question has evolved. Within each major function that Congress has assigned the Federal Reserve, sufficient resources should be spent to provide that level of service which is essential to assure the smooth operation of the financial system. On the other hand, it is unnecessary, and therefore unwarranted, for the Federal Reserve to commit resources to services which are adequately provided by the private sector. The Federal Reserve was not chartered to compete in the private m a r k e t p l a c e . So l o n g as t h e marketplace provides service on an equitable and efficient basis to all potential users, the Fed should not interfere in its operation. To put it more simply, each Federal Reserve Bank should do and should spend no more— but certainly no less—than it takes to accomplish the major objectives of the Federal Reserve Act within its District. This general principle, although difficult to quantify and apply, represents for Reserve Bank management what profits are for managers of private enterprises: namely, a standard for both allocating resources and measuring performance. Once the general principle has been applied in the decisionmaking process, Reserve Bank management can then look to more precise tools, comparable to those employed by p r i v a t e enterprises, to increase operational effectiveness and efficiency. This sequence provides a Reserve Bank with a means and with a strategy for meeting its management challenge. 9 Managing for the 70s and beyond A few examples of Chicago Reserve Bank operational developments and management programs might help to illustrate how this management process works. During the 1970s major resource commitments have been necessary in order for the Chicago Fed to meet increased public demands in a number of areas of the Bank's activity. In the payments mechanism area, for example, the establishment of regional check processing centers and increased automation of operations have been necessary to process a continuously expanding volume of work and to maintain timeliness. Similarly, in the area of s u p e r v i s i o n and r e g u l a t i o n , new programs, requiring additional staff, have had to be developed and implemented, not only to carry out new legislated responsibilities in the areas of consumer credit protection and bank holding company regulation, but to provide adequate supervision of an increasingly complicated and s o p h i s t i c a t e d commercial banking system as well. Once the need for such resource commitments has been recognized, however, these and other areas of operation can be scrutinized for opportunities to maximize effectiveness and efficiency. To accomplish this a number of management programs and techniques have been employed during recent years. 10 To name but a few, a "management by objectives" program was first introduced at the Chicago Fed in 1973 to identify corporate goals and new initiatives that could be undertaken at all levels of management. A new Federal Reserve a c c o u n t i n g system was developed and installed, providing unit cost and comparative performance information for all Federal Reserve offices. The usefulness of "zero-base" budgeting is being studied, and to this end the Chicago Fed's Research, Bank Relations and Public Information departments prepared special 1978 budgets incorporating these techniques on a test-pilot basis. Overall, as in private i n d u s t r y , terms such as "operations reviews," "performance evaluations" and "cost-effectiveness analyses" have become the bywords and tools of Reserve Bank management. And as in private industry, there is a sense in which a Reserve Bank can and ought to view itself as something akin to a profit-maximizing firm. At the least, a Reserve Bank must recognize its responsibility for minimizing the cost of providing adequate service to the public. This is the challenge that Reserve Bank management must face. And so long as the Federal Reserve identifies public needs first and then charts the best course for meeting them, it can meet the challenge, no matter what new demands may be made of the central bank in the future. Summary of operations Dollar amount 1977 Number 1976 1977 1976 Clearing and collection operations Commercial bank checks collected . . . 906.4 billion U.S. Government checks collected 1 . . . 46.8 billion Automated payments processed 3.1 billion Wire transfers of funds 7.1 trillion Corporate and municipal bonds, coupons and other noncash items collected 1.8 billion 798.8 42.2 0.9 6.0 billion billion billion trillion 1.9 billion 3 2.0 96.3 10.0 3.7 billion million million million 1.8 104.2 3.2 3.4 billion million million million 538.5 thous. 567.5 thous.3 894.3 302.6 1.6 226.0 890.8 271.7 1.8 244.7 C u r r e n c y a n d related o p e r a t i o n s Currency received and counted 7.1 billion Unfit currency withdrawn 1.2 billion Coin received and counted 215.5 million Food stamps received and processed . 873.1 million 6.8 1.2 229.5 938.5 billion billion million million million million billion million million million billion million Loans to m e m b e r banks Total loans made during year Banks accommodated 6.3 billion — 2.6 billion — 2,001 209 560 114 Services to U.S. Treasury Marketable Government securities issued, serviced and redeemed: Definitive securities Book entry securities U.S. savings bonds issued, serviced and redeemed Federal taxes processed2 4.9 billion 734.5 billion 21.3 billion 3 626.4 billion 3 326.7 thous. 268.8 thous. 750.6 thous.3 267.3 thous.3 3.7 billion 48.6 billion 3.6 billion 41.4 billion 60.2 million 0.8 million 55.6 million 4.4 million 7.7 billion 37.6 billion 3 1.5 million 1.6 million 1.1 billion 12.4 thous. M e m b e r bank "service" operations Safekeeping of securities: Definitive, balance December 31 . . . 8.2 billion Book entry, balance December 31 . . 42.3 billion Securities purchased and sold for member banks 1.3 billion — — 11.6 thous. 'Includes postal money orders. 2 Number count for items processed changed in last quarter 1976 f r o m tax deposit forms to transmittal letters which represent multiple deposit forms. 3 Revised. Statement of condition (in thousands of dollars) As of December 31 1977 Assets Gold certificate account Interdistrict settlement account Special drawing rights certificate account Coin 1,735,954 89,375 1,704,081 570,496 198,000 24,371 190,000 36,278 41,575 7,020 1,282,151 16,166,456 1,087,925 14,935,629 Total loans and securities 17,490,182 16,030,574 Cash items in process of collection Bank premises Other assets 1,366,649 15,686 261,533 1,182,956 15,715 238,751 Total assets 21,181,750 19,968,851 Liabilities Federal Reserve notes 15,427,599 13,895,922 3,591,303 704,511 41,355 90,167 3,713,914 824,742 36,062 222,489 4,427,336 4,797,207 834,240 178,509 837,098 142,708 20,867,684 19,672,935 157,033 157,033 147,958 147,958 314,066 295,916 21,181,750 19,968,851 Loans and securities: Loans secured by U.S. Government securities Other loans Federal agency securities U.S. Government securities Deposits: Member bank reserves U.S. Treasury—general account Foreign Other Total deposits Deferred availability cash items Other liabilities Total liabilities Capital accounts Capital paid in Surplus Total capital Total liabilities and capital 12 1976 Statement of earnings (in thousands of dollars) Year ending December 31 1977 Current earnings: Interest on loans to member banks Interest on Government securities Interest on investments of foreign currencies All other 1976 2,763 1,082,419 639 1,006,357 422 239 4,320 251 1,085,843 1,011,567 79,726 7,370 78,053 6,009 Total current expenses Less reimbursement for certain fiscal agency and other expenses 87,096 84,062 7,726 7,291 Current net expenses 79,370 76,771 1,006,473 934,796 Total current earnings Current expenses: Operating expenses Cost of Federal Reserve currency Current net earnings Additions to (or deductions from) current net earnings: Net profit (or loss) on sales of securities Net profit (or loss) on foreign exchange transactions Assessment for expenses of Board of Governors All other—net Net additions (or deductions) Net earnings before payments to U.S. Treasury Distribution of net earnings: Dividends paid Payments to U.S. Treasury (as interest on Federal Reserve notes) Transferred to surplus (7,994) 5,111 (21,958) (3,836) (7,153) 2,141 (6,365) 154 (34,964) (4,936) 971,509 929,860 9,144 8,661 953,290 9,075 915,095 6,104 971,509 929,860 13 1977 directors PETER B. CLARK, Chairman Chairman of the Board and Evening News Association Detroit, Michigan President JAY J. DeLAY President Huron Valley National Ann Arbor, Michigan Bank ROBERT H. STROTZ, Deputy Chairman President Northwestern University Evanston, Illinois PAUL V. FARVER Vice Chairman Rolscreen Company Pella, Iowa A. ROBERT ABBOUD Chairman of the Board The First National Bank of Chicago, Illinois JOHN T. HACKETT Executive Vice President Cummins Engine Company, Columbus, Indiana Chicago OSCAR G. MAYER Chairman, Executive Committee Oscar Mayer & Co. Madison, Wisconsin LEO H. SCHOENHOFEN Chicago, Illinois JOHN F. SPIES President Iowa Trust and Savings Bank Emmetsburg, Iowa Inc. Board of Directors, Federal Reserve Bank of Chicago, from left to right: Schoenhofen; (standing) Messrs. Farver, Hackett, Spies, Mayer, Delay, (seated) Messrs. Strotz, Abboud. Federal Advisory Council Member Auditors EDWARD BYRON SMITH FRED A. DONS, General Carman of the Board The Northern Trust Company Chicago, Illinois Detroit (reporting to Board of Clark, Directors) Auditor RICHARD P. BUSH, Assistant General ROBERT A. LUDWIG, Assistant General Auditor Auditor branch JORDAN B. TATTER, Chairman President and Chief Executive Officer Southern Michigan Cold Storage Company Benton Harbor, Michigan HERBERT H. D O W Secretary The Dow Chemical Midland, Michigan 14 H A R O L D A. ELGAS President Gaylord State Bank Gaylord, Michigan Company JOSEPH B. FOSTER President Ann Arbor Bank & Trust Ann Arbor, Michigan Company CHARLES R. M O N T G O M E R Y President Michigan Consolidated Gas Company Detroit, Michigan BENJAMIN H. PADDOCK III President City National Bank of Detroit Detroit, Michigan JOHN SAGAN Vice President-Treasurer Ford Motor Company Dearborn, Michigan 1977 officers WILLIAM H. GRAM, Assistant General Assistant Secretary CAROL P. KASPAR, Assistant Vice ROBERT P. M A Y O , President DANIEL M . DOYLE, First Vice President President President LARRY R. MOTE, Senior Economist Assistant Vice and President JAMES H. NASH, JR., Assistant Counsel RICHARD H. RAMSDELL, Assistant Vice President HARVEY ROSENBLUM, Senior Economist Robert P. Mayo Daniel M. Doyle Assistant Vice D A V I D R. STARIN, Assistant Vice General Counsel, and Secretary President and HILBERT G. SWANSON, Assistant Vice President WARREN J. TAUBMAN, Assistant Vice President BRUCE L. SMYTH, Senior Vice RUTH F. VILONA, Assistant Vice President CARL C. WELKE, Assistant Vice President President President President ROBERT W . WELLHAUSEN, Assistant Vice President GEORGE W . CLOOS, Economic Vice President Adviser ROBERT P. CORNELISEN, Vice President President PATRICIA W . WISHART, Assistant Vice President and Assistant Director FREDERICK S. D O M I N I C K , Vice FRANKLIN D. DREYER, Vice Examiner T H O M A S C. TUCKER, Assistant Vice President RICHARD D. ABRAHAMSON, Vice and of Research T H O M A S L. WOLFE, Examining Officer President Detroit President RODERICK L. HOUSENGA, Chief Examiner JOSEPH G. KVASNICKA, Economic Vice President Adviser RICHARD A. MOFFATT, Vice President WILLIAM T. NEWPORT, Vice President DOROTHY M . NICHOLS, Economic branch WILLIAM C. C O N R A D , Vice President and and Adviser RONALD L. ZILE, Vice Manager President WAYNE R. BAXTER, Assistant Vice President ROBERT W . C O O K , Assistant Vice President ROBERT M . FITZGERALD, Assistant Vice President and Des Moines office President WILLIAM ROONEY, Vice President RUDOLPH W . DYBECK, Vice R A Y M O N D M . SCHEIDER, Vice President ROBY L. SLOAN, Vice President and Associate Director President PATRICK J. TRACY, Assistant Chief of Research HARRY S. SCHULTZ, Senior Vice Vice President ARTHUR G. STONE, Assistant Vice KARL A. SCHELD, Senior Vice President PAUL J. BETTINI, Vice President President, JAMES R. MORRISON, Senior Vice Director and President WALTER A. SIENKO, Assistant Vice W A R D J. LARSON, Senior Vice and President DANIEL P. KINSELLA, Assistant Vice ERICH K. KROLL, Assistant Vice Counsel of Research President T H O M A S P. KILLEEN, Assistant Vice Indianapolis President office ADOLPH J. STOJETZ, Vice President LOUIS J. PUROL, Vice EUGENE J. WAGNER, Vice President RICHARD L. SIMMS, JR., Assistant Vice ALLEN G. WOLKEY, Vice President President President BUDDIE J. BELFORD, Assistant Vice President Milwaukee office HARRIS C. BUELL, JR., Assistant Vice President CARL E. VANDER WILT, Vice CHARLES W . FURBEE, Assistant Vice President RUSSELL O . LANGAN, Assistant Vice President President 15 (312) 322-5112 FEDERAL RESERVE BANK OF CHICAGO Public Information Center P. O. Box 834 Chicago, Illinois 60690
@FedFRASER